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MiB: Tina Vandersteel, GMO head of Emerging-Country Debt

    This week, we speak with Tina Vandersteel, who is the head of GMO’s Emerging-Country Debt team. Prior to joining GMO in 2004, she worked at J.P. Morgan in fixed-income research developing quantitative arbitrage strategies for emerging debt and high-yield bonds. She began her career as a journalist before moving into finance. She spent several… Read More The post MiB: Tina Vandersteel, GMO head of Emerging-Country Debt appeared first on The Big Picture.     This week, we speak with Tina Vandersteel, who is the head of GMO’s Emerging-Country Debt team. Prior to joining GMO in 2004, she worked at J.P. Morgan in fixed-income research developing quantitative arbitrage strategies for emerging debt and high-yield bonds. She began her career as a journalist before moving into finance. She spent several years abroad, starting in J.P. Morgan’s Sao Paulo office. She returned to the US, working on the EM credit desk, where two of her biggest clients were GMO and Long Term Capital Management. They were each buying the same bonds, using various strategies including leverage. Those strategies led LTCM to crash and burn, while GMO thrived. She joined GMO to expand its capabilities in the EM debt sector a few years later. In 2012, she published: The What-Why-When-How Guide To Owning Emerging Country Debt, her manifesto on the most attractive characteristics of external, local, and corporate emerging debt. In the paper, she analyzes diversification, alpha, value, ways to own emerging debt, including local, corporate, blended, active, and passive. We also discuss the risks and advantages of investing in either local currencies or dollars. She left JPM in 2002, to train for a spot on the U.S. Olympics national rowing team (Athens 2004) in the lightweight women’s doubles event. A list of her favorite books is here; A transcript of our conversation is available here Monday. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. Be sure to check out our Masters in Business next week with David Conrod  Co-Founder CEO at FocusPoint Private Capital Group. Previously, he was at Guggenheim Partners, where he established the Private Fund Group, with more than $7 billion of fund allocations for general partnerships external to the firm.     Tina Vandersteel Favorite Books       The Pillars of Hercules: A Grand Tour of the Mediterranean by Paul Theroux Running in the Family by Michael Ondaatje The English Patient by Michael Ondaatje The Patron Saint Of Liars by Ann Patchett Gödel, Escher, Bach: An Eternal Golden Braid by Douglas R Hofstadter The post MiB: Tina Vandersteel, GMO head of Emerging-Country Debt appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 22nd, 2022Related News

How Much Do Boosters Increase Immunity?

You should be vaxxed and boosted. But should you get a 2nd booster?   Should We Get a Second Booster Vaccine? What the Science Says Source: WSJ     The post How Much Do Boosters Increase Immunity? appeared first on The Big Picture. You should be vaxxed and boosted. But should you get a 2nd booster?   Should We Get a Second Booster Vaccine? What the Science Says Source: WSJ     The post How Much Do Boosters Increase Immunity? appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

Fake It Til You Make It

    “And I know I’m fakin’ it, I’m not really makin’ it.” –Simon & Garfunkle   I purposefully waited a few weeks after the Elizabeth Holmes verdict before weighing in on the entire Theranos debacle. The reason: I want to distinguish between 3 issues: 1) Outright “fraud” 2) the hustle subculture known as “fake it… Read More The post Fake It Til You Make It appeared first on The Big Picture.     “And I know I’m fakin’ it, I’m not really makin’ it.” –Simon & Garfunkle   I purposefully waited a few weeks after the Elizabeth Holmes verdict before weighing in on the entire Theranos debacle. The reason: I want to distinguish between 3 issues: 1) Outright “fraud” 2) the hustle subculture known as “fake it till you make it” 3) the Venture Capital strategy of buying into the idea of an as yet unproven technology. We all know about fraud: From Enron to Bernie Madoff to the GFC Fraudclosure, finance has had endless examples. If you do not know what Fraud is you probably cannot afford to pay for internet access to read this, as the fraudsters will have already emptied out your bank account. “Fake it til you make it” was not about criminality, it was more about an attitude. It was part of ye olde Wall Street (watch the 1987 movie), and manifest as a false bravado that served to hide a green broker’s lack of expertise. There was a distinct pecking order on Wall Street among traders, brokers, bankers, and others in finance; showing a little bit of confidence might at least get you a phone call or a meeting to make your sales pitch. But I do not believe that showing a little brio is remotely similar to that what took place at Theranos. As was revealed by John Carreyrou in his WSJ reporting and in his book “Bad Blood,” the founders had no expertise, no promising technology, no medical training. Reading the book, it appears the foundation of the entire enterprise was built upon a mix of wishful thinking and self-deception. (See Red Flags Everywhere). Venture capital seeks to invest in products of tomorrow, services that very often do not exist yet. Skillful VCs have some ideas about where markets and demand might be a few years out, and (cliché alert) they skate to where the puck will be. But it is a very different thing to make a wager about one possible future, which by design is highly likely to fail versus outright fraud. Building out an idea that does not find a market is one thing, but it’s quite different from lying about a medical product that simply cannot do what you claim, never could, and has no basis in reality. There are endless good ideas out there that might not be financially lucrative to create: Lots of apps and consumer products and software programs and others. The entire biotech space is populated with companies whose new molecules or novel techniques might — if it were to get sufficient funding to run endless tests — cure or even resolve a particular health issue. Or not, we really do not know until we have more development in the lab and much more testing. That was not what occurred with Holmes. Theranos engaged in fraud, misled investors, and put people’s actual health at risk in pretending their machines did what they could not. It is not a surprise she got caught; given all the red flags the real surprise is that she got away with it for as long as she did. For that, we need to look to her enablers . . .       Previously: The Bad Blood at Theranos (May 30, 2018) MiB: John Carreyrou author of Bad Blood, on Theranos (July 21, 2018) Transcript: John Carreyrou on Theranos (July 22, 2018)     Red Flags Everywhere 1. The founder had no medical training, no medical-device experience and no health-care background; nor did the firm’s second-in-command. 2. None of the (original) directors came from the medical-devices or health-care industries. 3. No outside investors were allowed to closely examine the company’s machines; there were no peer reviewed papers covering the medical breakthroughs the company claimed. 4. Secrecy at Theranos was excessive — much more extensive than the usual tech nondisclosure agreements. 5. Staff turnover was extremely high; the chief financial officer left early in the company’s life. 6. Venture capitalists with experience in medical devices, health care or biotech all took a pass on investing in Theranos. 7. Early pilot programs with well-known health-care and medical companies were either not renewed or terminated outright. 8. Promised reports on the proprietary technology’s performance were never delivered, despite repeated promises from the CEO. 9. Threats of litigation against former employees and staff were aggressive and rampant. 10. The board had no control; Holmes held 99 percent of voting shares; the board was stocked with faded stars of yesteryear, many in their 80s and 90s. –The Bad Blood at Theranos   The post Fake It Til You Make It appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

Inflation & the Elephant

      To hear an audio spoken word version of this post, click here.   Every discussion I hear about inflation reminds me of the parable of the six blind men and the elephant.1 Having never encountered such a creature before, the sightless men learn about the pachyderm only by touching it: One man… Read More The post Inflation & the Elephant appeared first on The Big Picture.       To hear an audio spoken word version of this post, click here.   Every discussion I hear about inflation reminds me of the parable of the six blind men and the elephant.1 Having never encountered such a creature before, the sightless men learn about the pachyderm only by touching it: One man feels the trunk, another the tail, the tusks, ears, legs, and sides. They argue over what the beast is, each describing it differently, each mans’ understanding incomplete, limited by his narrow, personal experience. It feels like the debate over Inflation is a similar experience: One’s analysis and expectations about inflation can be too narrow, highly dependent upon the aspect of CPI data you choose to focus upon, the priors you bring to those observations, and (therefore) what it is you see in various prices.2 This matters a great deal: Inflation is less than the simple binary question: Is the CPI rising or not? Rather, there are many factors driving the components that make up the Consumer Price Index. When we closely analyze these, we find a broad dispersion across various consumer goods and services. The nature of these inputs will determine how much inflation there is, how long-lasting it might be, and what can be done to combat it. Consider four components that go into CPI, plus two additional factors impacting consumption, and you get a sense of the complexities involved: Automobiles: The constraints of reopening chip fabs to produce semiconductors is a long slow process – estimates are for as long as 24-36 months. Which means we might only be halfway to a third of the way to a sufficient supply of chips for new car productions to ramp up. The shortage of new cars has led to a surge of used car prices — and there are only so many used cars out there. This has had a substantial – and disproportionate – impact on prices (see chart). Without the spike in car prices, that 7% consumer price increase would have been about a third less, closer to 5.5% had car prices been stable. Housing: The lack of supply of new single-family homes has been over a decade in the making; existing-home sales seems to have been impacted by the pandemic lockdowns from apartments to houses. Housing expert Jonathan Miller of Miller Samuel notes that “sales volume exploded as the pandemic lockdowns ended.” 3 This was especially true among the upper half of homes, where salaries had risen and net worth rose. As more supply comes online, and mortgage rates rise, we should see price increases moderate. Wages: There are so many crosscurrents in the labor market, but for inflation purposes, I want to draw your attention to three: Minimum wage workers, High-skill workers, and Demographics. Minimum wage workers, relative to most other metrics, have been underpaid for decades. The pandemic gave them two things – CARES act cash, which afforded an opportunity to improve their skills, and negotiating power. It is obvious (to me at least) that rising minimum wages is a belated generational reset. Demographics are partly to blame: Decreased immigration, new business launches, a lack of childcare, covid deaths, early retirement have dramatically reduced the number of people in the Labor Force. High-skill workers have always been in high demand, but the pandemic turned local labor markets like New York, San Francisco, Boston, etc., into national ones. There has been lots of disruption   as the market adjusts, but valuable employees have figured out they can earn a substantial raise by switching employers. The great resignation at least among this group, is more like a huge job exchange. Energy: There is a duality among energy sources: On the one hand, oil and natural gas prices have risen so much that electricity producers are consuming more coal (!) than they have in years. On the other hand, gasoline prices have been flat for 13 years, and are only back to where they were in 2015. Of all the inputs we are discussing into rising prices, Energy seems to have the fastest ability to respond to rising demand with more supply. As every commodity trader knows, the cure for high prices is high prices. Goods versus Services: We discussed in November how the balance of Goods (38.7%) versus Services (61.3%) was altered by the pandemic. CPI Goods are up over 8%, while CPI Services have recovered back to where they were pre covid — at about ~3% price increases. That will eventually revert to pre-pandemic levels. The move towards goods and away from services may be temporary, but it is still inflationary. Logistics: Rebecca Patterson, Bridgewater Associates’ Director of Investment Research, observes that the “biggest monetary stimulus outside of wartime” plus a massive fiscal stimulus has led to a “Demand Shock” driving inflation. Globally, the production of goods is now 5% over 2019 pre-pandemic levels, but Patterson notes that demand has risen 20%. We have more ships on the seas than ever, but it isn’t enough. Increased shipping containers and ports working 24/7 are still insufficient. How will these five factors play out over time? Some are likely to be transitory. Of all of these rising prices, energy prices tend to be the most responsive to rising prices. On the other hand, it takes 4 to 6 months to construct a new home; an adequate supply of semiconductors is estimated to be at least 6 months, or as much as 24 months away; wages have reset higher – $15 is the new unofficial minimum wage – but the rate of increase could very well moderate towards late 2022. To build one of the giant container transport ships is a 3-year process. Last, the balance between goods and services will be determined by how long it takes us to get the pandemic under control. How much the prices of these goods and services respond to rising Federal Reserve rate increases is another question entirely. I am very much in favor of the Fed normalizing rates, but I am less sanguine that rate increases are the cure for what we describe above. Pricing in the global economy is dynamic, ever-changing, with lots of cross currents each responding to different inputs: Supply, demand, interest rates, fiscal stimulus, geopolitics, consumer sentiment, etc. This is the nature of a complex system. Investors should not engage in gross oversimplification, single variable analysis, or even thinking about inflation as a binary outcome. Instead, an awareness of the many factors affecting prices, and how they might play out is a rational approach. Is the worst of U.S. inflation behind us? Maybe, but since we cannot accurately predict the future, we should at least do our best to understand the present. That means doing more than focusing on any one single part of the elephant . . .       Previously: Generational Reset of Minimum Wage (November 30, 2021) Structural or Transitory? (November 23, 2021) How Everybody Miscalculated Housing Demand (July 29, 2021) The Inflation Reset (June 1, 2021) Shifting Balance of Power? (April 16, 2021) Elvis (Your Waiter) Has Left the Building (July 9, 2021)   ______________ 1. It was made famous by John Godfrey Saxe’ 19th century poem. I find it so illustrative I keep returning to it again and again. See e.g., Nation of Rentiers? (February 23, 2018) and Is the Market Still a Future Indicator? (August 11, 2008) 2. It was not my intention to suggest that all economists are blind to the full picture of data that lay before them, but if the shoe fits . . . 3. Interesting side note: Miller adds that, “this is a bit simplistic but land appreciates and buildings depreciate so most of the recent price surges are carried by the land.”     click for audio   The post Inflation & the Elephant appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

Long-Term Economic Consequences of Pandemics

Long-Term Economic Consequences of Pandemics.....»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

1936 Cord 810 Westchester

Time and again, I keep coming back to these beautiful cars. (See this 1936 810 Cabriolet, 1937 812 Super-Charged Beverly, 1937 812 Super-Charged Westchester, and this 1937 812). If I had room in my garage, or even better, my own barn filled with collectibles, I would definitely find a spot for one of these. Gordon Buehrig’s design was both… Read More The post 1936 Cord 810 Westchester appeared first on The Big Picture. Time and again, I keep coming back to these beautiful cars. (See this 1936 810 Cabriolet, 1937 812 Super-Charged Beverly, 1937 812 Super-Charged Westchester, and this 1937 812). If I had room in my garage, or even better, my own barn filled with collectibles, I would definitely find a spot for one of these. Gordon Buehrig’s design was both innovative and lovely. The Cord 810 was the first American car with front-wheel drive, independent front suspension, pop-up headlights, a non-traditional radiator grille, and other innovations. But the shape, lines, and visual impact the car made on people who saw it was special. In the middle of the Great Financial Crisis, I recommended using the disruption to “counter-cyclically” spend on distressed assets at 50% off of their recent values. When the 2020 pandemic began, I repeated that advice: If there is something you have been considering, but had run away in price, use the crash to make a purchase at a deep discount. I followed my own advice and picked up a cheap toy in April 2020. But that meant other opportunities would pass by. This lovely Cord was one of those missed opportunities: It sold at Bring A Trailer for $61,000 — an excellent example priced as if it was only a fair one. It is an advantage to have some dry powder when we head into selloffs of any kind.   Source: Bring A Trailer The post 1936 Cord 810 Westchester appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

Its the Estimates, Not the Earnings, That Are Wrong

Barry Ritholtz, Bloomberg Opinion Columnist and Ritholtz Wealth Management Chairman and CIO says we’ve had an amazing run on the S&P in the past decade. He speaks on “Bloomberg Surveillance”.   Amazing Run in Past Decade, Says Ritholtz Source: Bloomberg, January 21st, 2022   The post Its the Estimates, Not the Earnings, That Are Wrong appeared first on The Big Picture. Barry Ritholtz, Bloomberg Opinion Columnist and Ritholtz Wealth Management Chairman and CIO says we’ve had an amazing run on the S&P in the past decade. He speaks on “Bloomberg Surveillance”.   Amazing Run in Past Decade, Says Ritholtz Source: Bloomberg, January 21st, 2022   The post Its the Estimates, Not the Earnings, That Are Wrong appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 21st, 2022Related News

2021 State of Venture Capital

2021 State of Venture Capital.....»»

Category: blogSource: THEBIGPICTUREJan 14th, 2022Related News

1970 Mazda Cosmo Series II

Anyone who is familiar with Mazda today likely knows of the brand through the MX5 Miata. That tossable, perfectly balanced little roadster back in 1989 single-handedly revived the convertible market. It also Mazda the brand from But before there was a Miata or even an RX-7, there was the Cosmo. The early Series I version… Read More The post 1970 Mazda Cosmo Series II appeared first on The Big Picture. Anyone who is familiar with Mazda today likely knows of the brand through the MX5 Miata. That tossable, perfectly balanced little roadster back in 1989 single-handedly revived the convertible market. It also Mazda the brand from But before there was a Miata or even an RX-7, there was the Cosmo. The early Series I version arrived in 1967, and the Series II you see below was the 1968 upgrade. It gave the pretty little Series II (L10B) a power bump to 128 horsepower from its twin rotary engine with a 7,000-rpm redline, a five-speed gearbox, and a top speed over 120 mph. Over time, the flagship Cosmo morphed from a sport to a luxury car. There were 343 Series I produced by Mazda from 1967-68; 833 of the series II, starting mid-68 through 72, were made. They are not a lot of these around anymore, and they have become increasingly collectible. The RHD model you see below sold for $105,000.     Source: Bring A Trailer The post 1970 Mazda Cosmo Series II appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 14th, 2022Related News

Living Through a Crash

Living Through a Crash.....»»

Category: blogSource: THEBIGPICTUREJan 14th, 2022Related News

Which Companies Won or Lost Your Affection During Pandemic?

    Did any particular company win your affections during the pandemic? What shops might you have fallen in or out of love with? Who performed admirably under challenging circumstances? Who stunk the joint up? Since lockdown began ~March 2020, I have been observing relationships between consumers and companies. After all, companies are managed by… Read More The post Which Companies Won or Lost Your Affection During Pandemic? appeared first on The Big Picture.     Did any particular company win your affections during the pandemic? What shops might you have fallen in or out of love with? Who performed admirably under challenging circumstances? Who stunk the joint up? Since lockdown began ~March 2020, I have been observing relationships between consumers and companies. After all, companies are managed by people, and people occasionally have lapses in judgment. Every now and again, a company is blind to its relationship with its customers and stumbles. How they respond when these errors are pointed out says a lot about its management team, and how they think about their relationship with the people who keep them in business. There were some broad policy changes and corporate behaviors that altered how some companies interacted with their customers (and society). I wonder how much this has impacted whether or not some customers want to vote with their dollars to encourage that company to keep doing what they are doing — or not. Note I am not discussing a single slight to any one person (What is more tone-deaf than a celeb whining on Twitter about flight delays to airline Twitter accounts?) Where are people “feeling the love” – or not? The pandemic has created very specific winners and losers – but I suspect we have yet to realize the long-term effects of how sentiment might have shifted over time. A few companies that stood out; here are my  subjective observations: Delta: Travel (and espeically airlines) were among the first companies to get hit by lockdowns. Airline had few options, but I greatly appreciate how some – in particular Delta – responded: Their CEO emailed travelers that COVID cancelled flights would be refunded or you could choose to receive a credit in perpetuity (this was greatly appreciated). Frequent flyer miles would continue indefinitely; your flight status (Silver Medallion!) would be rolled over (meaning you wouldn’t be penalized for any lack of flying in 2020). It was just smart customer relations by $DAL, and I will remember that the next time I have to book a flight. Starbucks: I am a long-time consumer of Starbucks coffee (and their breakfasts). When we moved offices a few years ago from the Park Ave South region over to the Bryant Park, I had to shift my local Starbucks. What a difference 3 blocks makes: It always took longer to get an order, even pre-ordering with the app. My favorite breakfast (egg whites / turkey bacon on English muffin) was out of stock four of five days; it’s amazing the difference service and competency a few avenues made. I share that to let you know I was primed pre-pandemic to be disappointed by $SBUX A few articles about how successful the company was with their app and gift cards and how much money their customers had lent to them (note: this was old news) kind of piqued my curiosity. Rather than being grateful for free capital, Starbucks kicked off the pandemic by telling app users their Starbucks points (which had already become much chintzier than they once were) were soon expiring. What a thoughtless way to respond to the pandemic! It was the last straw for me, and – Adios muchachos! – I deleted my Starbucks app. The company has gradually moved away from what made them so successful in the first place. I am not angry, its more of a disappointed shrug. As my buddy Todd Harrison always points out, the opposite of Love is not Hate, its indifference. And that is how I now feel about them. I’m not suggesting anyone boycott Starbucks, I’ll still go, just far less frequently than I used to. They no longer give me the warm fuzzies they once did. Amazon: A funny thing happened during the pandemic: Amazon no longer was my automatic choice for online retail purchases. Pre-pandemic, I’d hit Amazon.com automatically for nearly everything, never thinking twice about it. But during lockdown with items in short supply, I began searching and finding things elsewhere, often at significantly better prices. For the longest time, Amazon was THE low-cost provider; today, this is no longer true. The site is filled with third parties often of dubious quality, occasionally price gouging. Every page is overwhelmed with ugly advertising – and often for the wrong item. It was once a huge advantage having your credit card + address information on file but because of the decline of the entire Amazon experience, people set up accounts at competitors: Chewy, Walmart, target, Google Wallet, lots more. Don’t get me wrong: Amazon will still be the beneficiary of my online spending; but the pandemic has led me to lots of new relationships with many other companies. Assuming others did the same, the net result will be declining Amazon market share over the next decade. YouTube: We all understand Netflix and Amazon Prime and HBO Max, and I thought I understood YouTube. But over the past two years, I have been continually astonished by the breadth and depth of YouTube’s massive collection of videos. My appreciation for what they have created continues to grow and compound. It is nothing short of astonishing. Pre-pandemic, I spent time on a handful of automobile and music videos. Today, I use the site as a resource for cooking, home repairs, figuring out how to change the date on an antique watch, adjusting the carburetor an old Vette, building a bat house, installing nerf bars on the Jeep, potty training a puppy, just about anything you want to learn how to do. And that’s before we get to endless entertainment and education choices. Whatever I previously thought about YouTube, its probably 100X that size. Amazing! What’s App/Google Translate/World Remit/Remitly: I mentioned this previously, but What’sApp ($FB) combined with Google Translate ($GOOG) and global transfer apps has made it very easy to do busines around the world. This made specific overseas sales, purchases, shipping, etc. possible. Just a decade ago, this required incredible expertise and resources. Today, there is an app for that. Local Restaurants: Restaurants were hard hit by pandemic, and we have been saddened by the loss of some that were like old friends to us. But a lot of restaurants exhibited entrepreneurship and savvy as they adapted as best as they could to a challenging set of circumstances. Some built sidewalk sheds, others filled their patios with gas heaters, and all of the survivors tacked towards take out. I have been especially impressed and how productive and efficient some restaurants have become at this. One of our favorable local joints separate the burger from the bun, fixins, and fries to keep everything from getting soggy. Others do something similar with all of their dishes. the effort has not gone unnoticed. Even when you’re doing takeout, you should always tip generously as much of the staff at restaurants are paid via gratuities. Others had mixed results: I was furious at Toyota for being one of the first car companies to back the insurrectionists in Congress, but other car companies (like Ford) soon followed. Live Nation/TicketMaster did pretty okay and they barely stayed alive, but I heard of people who had much worse experiences than I did. There were lots of companies that donated to local food banks and generally were good corporate citizens, but there were too many exceptions to that observations. What companies impressed you over the past year or two? Which ones disappointed you?     Previously: The Cutting Edge (September 30, 2021) America’s CEOs Are Having a Good Year (February 19, 2021)   The post Which Companies Won or Lost Your Affection During Pandemic? appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

MiB: Ray Dalio

    This week, we speak with Ray Dalio, who is founder, co-chair, and co-chief investment officer of the world’s largest hedge fund, Bridgewater Associates. His most recent book is “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.” We discuss how there is nothing truly unprecedented, what that word tends… Read More The post MiB: Ray Dalio appeared first on The Big Picture.     This week, we speak with Ray Dalio, who is founder, co-chair, and co-chief investment officer of the world’s largest hedge fund, Bridgewater Associates. His most recent book is “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.” We discuss how there is nothing truly unprecedented, what that word tends to refer to are things we have not seen in our lifetime. Even the current Covid pandemic has a predecessor in the 1918 Spanish flu pandemic. He explains how the rise and fall of great empires have all followed a very specific pattern: the Roman Empire, the British, French, Dutch, and Spanish empires, now the US hegemony, and the rise of China — all of these are following the same patterns we have seen time and again. He tells how history happens over and over, and why China is the next country to become the dominant economic, military, and trading entity, which means it is going to be the most significant geopolitical comp[etitor for the West and the United States for the  next few decades. A list of his favorite books is here; A transcript of our conversation is available here. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. Our prior interviews are here: October 24, 2020, November 10, 2018, December 9, 2017, and MIB Live in 2018 (MIB Live, Round Up). Be sure to check out our Masters in Business next week with Jim McKelvey, co-founder of Square (with Jack Dorsey), and currently CEO of Invisibly, empowering people to manage the future of their personal data.       Ray Dalio’s Authored Books   The Changing World Order: Why Nations Succeed and Fail   Big Debt Crises Principles: Life and Work   Ray Dalio’s Favorite Books The Hero with a Thousand Faces (The Collected Works of Joseph Campbell) by Joseph Campbell The Lessons of History by Will Durant River Out of Eden: A Darwinian View of Life by Richard Dawkins   Ray Dalio’s Current Reading The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 by Paul Kennedy No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings and Erin Meyer Battlegrounds: The Fight to Defend the Free World by H.R. McMaster The World: A Brief Introduction by Richard Haass   The post MiB: Ray Dalio appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

Transcript: Ray Dalio

    The transcript from this week’s, MiB: Ray Dalio, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz… Read More The post Transcript: Ray Dalio appeared first on The Big Picture.     The transcript from this week’s, MiB: Ray Dalio, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Ray Dalio. He is the founder of Bridgewater, one of the world’s largest hedge funds. He is the author of numerous bestselling books, including “Principles: Life and Work” and “Big Debt Crises.” His latest is called “The Changing World Order: Why Nations Succeed and Fail.” Ray Dalio, our returning champion, welcome back to Bloomberg. DALIO: Thank you, Barry. It’s always a pleasure to be with you. RITHOLTZ: So, before we get into the book, I want to give listeners who may not be familiar with some of your work a little background. And you first came to my attention for the work you do on mistakes as, quote, “opportunities to learn and improve, the key to success in life is learning how to fail well.” Tell us a little bit about that. What — what led you to that understanding? DALIO: The markets. You know, but I mean, it’s true like pain is a great teacher, you know, so I learned pain plus reflection equals progress, and so the markets. You know, markets teach you humility. You got to be aggressive and you got to be defensive at the same time. So, what I learned is whatever successes I had in life had to do more with how I dealt with what I didn’t know than what I know. And so, that means taking it in. But making mistakes and reflecting on them, hey, that’s a great way to learn, right? RITHOLTZ: It certainly is. And there’s another issue that you bring up related to that, which is hyperrealism. You have to understand how reality works then learn how to deal with it, which kind of raises an issue. Isn’t that obvious? Who gets that wrong? Who doesn’t deal with reality? DALIO: Well, I — I think the most people have a wish of what reality is, and they get upset that their reality is not that. And they get hung up in that upsetness rather than to look at it and accept it, and then say, “What does that tell me about how reality works and how I should deal with it?” Right? I think most people are upset. They’re stuck in that upsetness and wishing something is different rather than thinking how do they best respond to what is their reality. RITHOLTZ: That – that’s very zen of you — accept reality for what it is and — and interact with that as opposed to just being upset about the way the world isn’t. DALIO: Well, zen are practical, I think it is practical. RITHOLTZ: So, let’s talk about some things that you have helped create some products. Treasury Inflation Protected bonds, TIPS, the U.S. Dollar Future Index, risk parity, the stock market of China, and my favorite, Chicken McNuggets. How did you have a hand in creating all of these products? DALIO: Well, you know, you just go along with your life and you do the thing you do, and then you come up with an idea. So, in my case, I was at, you know, markets since I was a kid, 12. I played around. I mean, I didn’t know what I was doing in the beginning, but I played around with markets, and I encountered things. So, I used to start off with commodities. I traded commodities — grains, and meats, and all of those things. And then this McDonald’s wanted to have the chicken McNugget, but they were worried that chicken prices would change a lot, and so then I needed — I worked with a chicken processor who then made chickens and chickens grain, and I showed them how they can work a deal out where they would hedge the grain and so on so forth, and that’s how Chicken McNuggets could come out without — at a fixed and stayed at fixed price. But anyway, one thing leads to another. You know, then the financial markets … RITHOLTZ: Right. Wait, I just want to make sure I understand. A hedge on green prices leads to stable chicken prices and, therefore, a consistent nugget price. DALIO: Right, because the cost of a chicken has nothing to do with the price of the chick. It has to do with the price of the grain that you feed the chick. RITHOLTZ: Right. DALIO: And so, by being able to lock in that price with the producer, we were able to lock in the price for the chicken for McDonald’s so that they could have stable prices. But anyway, that other stuff, the world evolves and I’m trading, and so then I come into trading financial instruments because then we have the printing of money, and we have all of those other things, so monetary policy becomes a thing. And one thing leads to another, then idea of risk parity is the idea of how I could balance a portfolio well, that I wanted to balance it well. So, one thing leads to another, you know? RITHOLTZ: Interesting. So, a couple of quotes from you that relate to each of the books you’ve — you’ve written, but I think they’re very revealing about who you are. One is unprecedented question mark. Big developments that haven’t happened in my lifetime, but have occurred numerous times in history. It’s not so much that they’re unprecedented, it’s that we just haven’t experienced them recently. Tell us about that. DALIO: Well, I learned about this. In 1971, I graduated college and before I went to business school in the summer, August 15, 1971, I’m following the markets. I’m clerking on the floor of the New York Stock Exchange, and President Nixon gets on the television. And he explains that money as we know it ceases to exist because then gold was money … RITHOLTZ: Right. DALIO: … and paper money was what your claim like a check in the checkbook, you could go get your money. And he said to the world, “You can’t go get your gold.” And I walked on to the floor of the New York Stock Exchange, and I thought that this is a big deal so there would be a pandemonium. And — and I didn’t, but the pandemonium was rather than go down a lot, the stock market went up a lot the most in a couple of decades. And then I said, wow, I didn’t understand what happened. So, I went back and I looked at history, and I found the exact same thing happened on March 5, 1933 with Roosevelt saying, “You don’t get the gold,” and they print the money, and the stock market went up, and then behaved that way. Now and I learned about the valuations. So, I started to learn that I needed to go back to things that didn’t happen. So, I studied, for example, the Great Depression. And because I studied the Great Depression, then in — I was able to anticipate the 2008 financial crisis, so we made a lot of money when others were losing money in the financial crisis, but I wouldn’t have that if I didn’t study things that didn’t happen before my lifetime, right? So, things like the pandemic, let’s think as you start to think about the things … RITHOLTZ: Unprecedented. DALIO: … there are a number of things like right now, the reason I did that book is because there are things that are happening now that never happened in our lifetime before, and I want to be like a doctor who knows many cases of those, but I have to go back and see them in history in order to gain that perspective. RITHOLTZ: Right. There’s a fascinating discussion between – I think it was St. Louis and Philadelphia in the 1918 pandemic. One of the cities was very aggressive in shutting down schools — I think was St. Louis — and advocating masks for everybody, and Philadelphia didn’t. Huge difference in the outcome for that pandemic. DALIO: Man, I could learn about that from you. You got it, right, but you … RITHOLTZ: Well, you sent me — you know, in your book — and we’ll — we’re going to get to the changing world order. So, let — let’s talk about something from the changing world order right now. One of the most interesting quotes I pulled from the book, quote, “There are only a limited number of personality types going down a limited number of paths, which lead them to encounter a limited number of situations to produce a limited number of stories that repeat over time.” So — so you’ve brought that up a number of times in — in some of your previous books as well Hero of a — of Thousand Faces and — and a lot of the Joseph Campbell stuff. Tell us a little bit about that limitation that we see the same cycles, the same stories over and over again. DALIO: Well, that’s — that’s it. I mean, I think you said it very well. If you look back in history and you read human nature does not change much. RITHOLTZ: Right. DALIO: OK? Our — it’s — and it’s a major driver. You put a person into a certain set of circumstances, and then you got the reaction, and you’re going to have — and the dynamic like you borrow money. And if markets go up, people borrow more money to speculate on the thing, and then they get over indebted, and then some — there were wealth gaps and there are all these things that happen over and over again. And — but we don’t think about it. Everybody is almost dealing with whatever is happening to them at the moment and they’re just thinking about it, but think about it like I mean, you could go to anything, OK, and it happens over and over again. It is a life ark — all of our life arks. You’re — you’re born at certain age, your kids go to school. Certain age they — they have kids. You move on. There were these things that repeat over and over again. And so, let’s look at those things and how they repeat. It’s remarkable. So, it’s almost as though the only things that change pretty much are the clothes people wear and the technologies they use, right? RITHOLTZ: There’s a truth to that, for sure. And a lot of the clothes are based on the technology, you know, they’re not — they’re not just old flax and — and cotton and what have you. DALIO: Right. So, what you see, you see evolution if you decompose it. You see that there’s a force of evolution that moves things toward improvement, OK? And then around that there are cycles and give the same circumstances around that, they repeat over and over again. And that’s why in order to understand today you cannot look what happened yesterday, OK? You have to look at what has happened repeatedly. RITHOLTZ: So, you mentioned we all go through these lifecycles, both as individuals and societies. You’re at the stage of life where you’re writing books, sharing wisdom. What’s the motivation for this act of your life? DALIO: Well, I think there are three stages in life. The first stage is you’re dependent on others, you’re going to school, you’re learning. In the second stage, you are independent. You — others are dependent on you, and then you’re trying to be successful. As you move past that stage, your goal isn’t to be successful in that same way before, you want to pass on what you’ve learned and so on, and then you go into your third stage of life where, you know, you’re free to live, free to die, OK? That — that ark is basically it. So, I’m at — I’m 72 years old. And while — my joy is in being able to pass along that which is valuable, and I’ll do that for probably maybe my one more book, which is “Economic and Investment Principles,” and then I’ll be done with that. And — but I still love the game, but — but that’s where the stage of life is. So, like I did this study because I needed the information to know how to deal with today, and I ordinarily wouldn’t put it out as a book. But I now figure, OK, it’s too important and I think it’ll be helpful for the people to take or leave as they like, but that’s why I’m doing it. RITHOLTZ: Quite fascinating. So, let’s talk a little bit about the changing world order, and I have to start with the — the U.S. dollar. It’s been the reserve currency for quite a while. Do you see that changing anytime soon? And is that part of the changing world order? DALIO: You know, it was that question that led me to study what causes reserve currencies to rise and fall and to go back for the 500 years because you need the cycles, and these cycles have long lasting cycles. So at first, it was the Dutch guilder, then it was the British pound, then it was the U.S. dollar, OK? And what is that dynamic to answer that question? So — and then it brought me into contact with all the things that matter. What were they doing economically? How — what percentage of world trade where they? How strong were they militarily, the whole package? And that’s what the book then takes one through took me through that journey. That was my exploration. So, what you find out in history is that there is the — the world order that we began began in 1945 … RITHOLTZ: Right. DALIO: … the end of the World War I mean, New World Order. The United States owned 80 percent of the world’s money because the world’s money was gold. RITHOLTZ: Right. DALIO: And the United States had 80 percent of the world’s gold. And so, that gave it the reserve currency. It was also had all the economic power. It was more than half the world GDP, and it also had the only military. It had nuclear weapons and so on. There was no comparison. Hence, we began the American World Order and the U.S. dollar going with that, OK? And then there’s a cycle, and I saw the cycle. As those — as the economy grows and you have prosperity and so on, it’s self-reinforcing. That’s — those are the good years. After the war, nobody wants to fight the opposition and you build this, but you get into a period where then it becomes, when you have a reserve currency, others want to hold it as an asset, so they lend to you. And you can borrow a lot of money. RITHOLTZ: Wait, does this trace back to where the Dutch … DALIO: Same thing … RITHOLTZ: … jetters (ph), the — the British jetters (ph) … DALIO: Yes. RITHOLTZ: … the Spanish jetters (ph)? DALIO: Yes, every time. RITHOLTZ: Wow. DALIO: OK? The same pattern begin. There’s a war, you win a war. You become the dominant power, also technologically and so on. The Dutch, for example, invented ships that could go all around the world … RITHOLTZ: Right. DALIO: … and collect all sorts of treasures, but in order to do that, they had to have a military. And then when they went around, they got to pay in their money and it became the world’s reserve currency because they want – they were trading all over and they can do that, like the United States, like the British, and so on. RITHOLTZ: So, wait, let me interrupt you. Technological advancement leads to military superiority, leads to booming trade, leads to economic dominance and reserve currency … DALIO: That’s right. RITHOLTZ: … and how long does that tend to last? DALIO: That ark, it can vary, but it’s usually somewhere in the vicinity of — the total empire is like 150 years, on average. RITHOLTZ: Right, so — so the Romans were an exception because they had all of that … DALIO: That’s right. They … RITHOLTZ: … and they lasted much longer. DALIO: That’s right. They lasted about 350 years, 325 years or something. But you can take each of those, so there’s a variation around those. But anyway, you’ve got the pattern. And so, to answer your question about the reserve currency, then what happens is the country gets into — deeply into debt, OK? And — and then with that, it runs deficits because it wants to spend more money and wants to maintain that position, but it does — but those deficits mean that it’s earning less than it’s spending and it’s required that debt money. And then when you get down to a zero-interest rate type of situation where — like we’re in, then we need more debt because everybody wants more money. So, the government has got to send out more to checks, and you — as always, you either have to get that money from somebody, which means you have to get taxes. But when people get that — get taxed, they get angry. So, what always happens at that point is you send out the money and you print the money, OK? And then there’s the mechanics of the printing of that money. So right now, we have a situation where there is a lot of debt and a lot of dollar-denominated debt in others — foreigners’ portfolios because they’re holding it because the reserve currency is what it is, and there’s low interest rates. Now we can get into how that compares with othe.....»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

COVID Deaths Per Million (July 2020-Present)

    Amazing infographic from Dan Goodspeed showing the state by state relationship between Covid deaths and partisan affiliation. More on this later this week . . .   The post COVID Deaths Per Million (July 2020-Present) appeared first on The Big Picture. .flourish-embed { width: 95vw; max-width: 130vh !important; margin: 2em auto; } header { display: flex; flex-wrap: wrap; margin: 1vw 5vw; max-width: 90vw; } header > * { flex: 1; padding: 1rem; min-width: 280px; align-self: stretch; display: flex; align-items: center; flex-wrap: wrap; border-radius: 1rem; margin: 1vw; } .nav-box { background-color: #FED; } select { display: block; margin: auto; } .credit { font-size: .9em; background-color: #DEF; } .support { background-color: #DFE; } .support p { font-size: .75em; max-width: 600px; margin: .5em auto; } h1 { font-family: 'Passion One'; margin-top: .5em; font-size: calc(1.5em + 1.5vw); } .content-box { max-width: 60em; margin: 0 auto 5em; padding: 0 5vw; font-family: Georgia; } .content-box .explanation { font-size: 1.1em; } p, ol { margin: .5em 0; font-size: .9em; } a { transition: all .25s; } h1 a { color: #036; } .lead { font-size: 1.5em; font-weight: bold; margin: 0 auto; max-width: 90vw; width: 40em; } h4 { line-height: 1; margin-top: .5em; } a.home-links { display: flex; width: 86vw; margin: 0 auto; color: black; max-width: 50em; padding: 2em; border-radius: 1em; background-color: #FFF; transition: all 250ms; } a.home-links .img-cont { flex: 1; padding: 0 1em } a.home-links .desc { flex: 1; padding: 0 1em } a.home-links .home-image { width: 100%; box-shadow: 0 0 1em rgba(0,0,0,0.5); display: block; opacity: 1; margin-right: 1em; } a.home-links:hover { text-decoration: none; background-color: #EEE; } ul.list { margin: 1.5em 0; font-family: sans-serif; } ul.list li { border-top: 1px solid #0056b3; margin: 1em 0; padding-top: .5em; list-style-type: none; } ul.list li .topic { font-weight: bold; } ul.list li .detail { margin: 0 1em; font-size: .9em; } @media (max-width: 640px) { a.home-links { display: block; } } function loadChart(chart) { window.location.href = "/covid/"+chart.value; } (function() { var param = 'fbclid'; if (location.search.indexOf(param + '=') !== -1) { var replace = ''; try { var url = new URL(location); url.searchParams.delete(param); replace = url.href; } catch (ex) { var regExp = new RegExp('[?&]' + param + '=.*$'); replace = location.search.replace(regExp, ''); replace = location.pathname + replace + location.hash; } history.replaceState(null, '', replace); } })();     Amazing infographic from Dan Goodspeed showing the state by state relationship between Covid deaths and partisan affiliation. More on this later this week . . .   The post COVID Deaths Per Million (July 2020-Present) appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

Not How I Wanted to Spend NYE

This year, I spent New Year’s Eve in the Emergency Room. More accurately, in the ER parking lot behind the hospital — Covid protocols only allow the patient seeking care into the ER (not family). Security very politely escorted me outside to impatiently await an update. My wife was on antibiotics for an infection for… Read More The post Not How I Wanted to Spend NYE appeared first on The Big Picture. This year, I spent New Year’s Eve in the Emergency Room. More accurately, in the ER parking lot behind the hospital — Covid protocols only allow the patient seeking care into the ER (not family). Security very politely escorted me outside to impatiently await an update. My wife was on antibiotics for an infection for a few days, but thanks to her prior antibiotic regime (Lyme) this bug was resistant. Her pain had increased all week to the point that by New Year’s Eve it was unbearable, and so off we went to a non-trauma hospital ER. That turned out to be a fortuitous choice. The hospitals around us had been filling up with Covid patients (nationally they are at record highs). Despite 80.6% of New Yorkers being fully vaccinated, the state’s 24-hour positivity rate that day was 22.24%. Estimates of Omicron’s regional prevalence are running between 92-99%. It seems to evade prior vaccinations (but with far milder results). It is sending more children to the hospital.  We heard lots of stories of other major hospitals where there were no beds available. She was one of two patients in the ER (Northwell continues to impress as a private hospital). She was taken care of quickly and efficiently, despite the NYE/Covid circumstances. With an IV bag of antibiotics and painkillers dripping into her arm, she texted me “Happy New Year” from her hospital bed. I looked at the dashboard clock of her car, snapped a pic + texted it back to her. About 2 hours later they released her, and we went home to crash. Omicron presents the starkest warning yet about mutations. The good news is people who catch it are at a 70% lower risk of severe illness compared to Delta. The bad news is it’s wildly virulent, at least 4X Delta’s infection rate; Prior Covid-19 infections provide little in the way of protection; those recovering unvaxxed are 10X more likely to catch Omicron than prior variants. Unvaccinated people around the world have become mutation factories. Its real-time evolution of an aggressive, iterative adaption via endless variations. Virii do not require intelligence; they are not purposeful; like all infectious pathogens, the replicate process is strictly an adaptive evolutionary fitness test. This is why the anti-Vaxx crowd is so pernicious — they are helping to create conditions leading to future variants — and these may not be as survivable as Omicron has been. Maybe we dodged a bullet. In many parts of the country, not only is elective surgery getting canceled, but emergency medical care is becoming unavailable. We were lucky to find an ER that could take us (always good to avoid sepsis shock). Others have not been as fortunate. There have been too many news stories of people getting turned away from ERs to die at home from treatable conditions. Hospitalizations due to Omicron are running 95%+ unvaccinated across the country. Manufactured ignorance is leading to terrible medical outcomes for those who have chosen to remain at risk, and for the entire medical system straining under avoidable hospitalizations. My wife is fine. She ran her course of treatment and fully recovered. Others may not be so fortunate. If you choose to remain unvaccinated you not only risk your own health, but you put others at grave risk as well. If we are lucky, Omicron will spike mid-January, and rapidly burn itself out. (To repeat: If we are lucky). But this may not protect us from future variants, some of which might be even more dangerous. This is not how we wanted to ring in the new year.     Previously: COVID Deaths Per Million (July 2020-Present) (January 9, 2022) The Economic Risks from Anti-Vaxxers (July 15, 2021) DELTA is Coming For Your Economic Recovery (August 13, 2021) How F*cked Is Business Travel? (August 11, 2021)   Source: CDC The post Not How I Wanted to Spend NYE appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

Why You Are A Bad Market Timer

Barry Ritholtz, Bloomberg Opinion Columnist and Ritholtz Wealth Management Chairman and CIO says market timing is impossible for the majority. Note: This was the post that Tom referenced at the top of the hit:   Market Timing Impossible, Says Ritholtz  Source: Bloomberg, January 11th, 2022       Previously: The Post-Normal Economy (January 7,… Read More The post Why You Are A Bad Market Timer appeared first on The Big Picture. Barry Ritholtz, Bloomberg Opinion Columnist and Ritholtz Wealth Management Chairman and CIO says market timing is impossible for the majority. Note: This was the post that Tom referenced at the top of the hit:   Market Timing Impossible, Says Ritholtz  Source: Bloomberg, January 11th, 2022       Previously: The Post-Normal Economy (January 7, 2022) The post Why You Are A Bad Market Timer appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

What Companies Won or Lost Your Affection During Pandemic?

    Did any particular company win your affections during the pandemic? What shops might you have fallen in or out of love with? Who performed admirably under challenging circumstances? Who stunk the joint up? Since lockdown began ~March 2020, I have been observing relationships between consumers and companies. After all, companies are managed by… Read More The post What Companies Won or Lost Your Affection During Pandemic? appeared first on The Big Picture.     Did any particular company win your affections during the pandemic? What shops might you have fallen in or out of love with? Who performed admirably under challenging circumstances? Who stunk the joint up? Since lockdown began ~March 2020, I have been observing relationships between consumers and companies. After all, companies are managed by people, and people occasionally have lapses in judgment. Every now and again, a company is blind to its relationship with its customers and stumbles. How they respond when these errors are pointed out says a lot about its management team, and how they think about their relationship with the people who keep them in business. There were some broad policy changes and corporate behaviors that altered how some companies interacted with their customers (and society). I wonder how much this has impacted whether or not some customers want to vote with their dollars to encourage that company to keep doing what they are doing — or not. Note I am not discussing a single slight to any one person (What is more tone-deaf than a celeb whining on Twitter about flight delays to airline Twitter accounts?) Where are people “feeling the love” – or not? The pandemic has created very specific winners and losers – but I suspect we have yet to realize the long-term effects of how sentiment might have shifted over time. A few companies that stood out; here are my  subjective observations: Delta: Travel (and espeically airlines) were among the first companies to get hit by lockdowns. Airline had few options, but I greatly appreciate how some – in particular Delta – responded: Their CEO emailed travelers that COVID cancelled flights would be refunded or you could choose to receive a credit in perpetuity (this was greatly appreciated). Frequent flyer miles would continue indefinitely; your flight status (Silver Medallion!) would be rolled over (meaning you wouldn’t be penalized for any lack of flying in 2020). It was just smart customer relations by $DAL, and I will remember that the next time I have to book a flight. Starbucks: I am a long-time consumer of Starbucks coffee (and their breakfasts). When we moved offices a few years ago from the Park Ave South region over to the Bryant Park, I had to shift my local Starbucks. What a difference 3 blocks makes: It always took longer to get an order, even pre-ordering with the app. My favorite breakfast (egg whites / turkey bacon on English muffin) was out of stock four of five days; it’s amazing the difference service and competency a few avenues made. I share that to let you know I was primed pre-pandemic to be disappointed by $SBUX A few articles about how successful the company was with their app and gift cards and how much money their customers had lent to them (note: this was old news) kind of piqued my curiosity. Rather than being grateful for free capital, Starbucks kicked off the pandemic by telling app users their Starbucks points (which had already become much chintzier than they once were) were soon expiring. What a thoughtless way to respond to the pandemic! It was the last straw for me, and – Adios muchachos! – I deleted my Starbucks app. The company has gradually moved away from what made them so successful in the first place. I am not angry, its more of a disappointed shrug. As my buddy Todd Harrison always points out, the opposite of Love is not Hate, its indifference. And that is how I now feel about them. I’m not suggesting anyone boycott Starbucks, I’ll still go, just far less frequently than I used to. They no longer give me the warm fuzzies they once did. Amazon: A funny thing happened during the pandemic: Amazon no longer was my automatic choice for online retail purchases. Pre-pandemic, I’d hit Amazon.com automatically for nearly everything, never thinking twice about it. But during lockdown with items in short supply, I began searching and finding things elsewhere, often at significantly better prices. For the longest time, Amazon was THE low-cost provider; today, this is no longer true. The site is filled with third parties often of dubious quality, occasionally price gouging. Every page is overwhelmed with ugly advertising – and often for the wrong item. It was once a huge advantage having your credit card + address information on file but because of the decline of the entire Amazon experience, people set up accounts at competitors: Chewy, Walmart, target, Google Wallet, lots more. Don’t get me wrong: Amazon will still be the beneficiary of my online spending; but the pandemic has led me to lots of new relationships with many other companies. Assuming others did the same, the net result will be declining Amazon market share over the next decade. YouTube: We all understand Netflix and Amazon Prime and HBO Max, and I thought I understood YouTube. But over the past two years, I have been continually astonished by the breadth and depth of YouTube’s massive collection of videos. My appreciation for what they have created continues to grow and compound. It is nothing short of astonishing. Pre-pandemic, I spent time on a handful of automobile and music videos. Today, I use the site as a resource for cooking, home repairs, figuring out how to change the date on an antique watch, adjusting the carburetor an old Vette, building a bat house, installing nerf bars on the Jeep, potty training a puppy, just about anything you want to learn how to do. And that’s before we get to endless entertainment and education choices. Whatever I previously thought about YouTube, its probably 100X that size. Amazing! What’s App/Google Translate/World Remit/Remitly: I mentioned this previously, but What’sApp ($FB) combined with Google Translate ($GOOG) and global transfer apps has made it very easy to do busines around the world. This made specific overseas sales, purchases, shipping, etc. possible. Just a decade ago, this required incredible expertise and resources. Today, there is an app for that. Local Restaurants: Restaurants were hard hit by pandemic, and we have been saddened by the loss of some that were like old friends to us. But a lot of restaurants exhibited entrepreneurship and savvy as they adapted as best as they could to a challenging set of circumstances. Some built sidewalk sheds, others filled their patios with gas heaters, and all of the survivors tacked towards take out. I have been especially impressed and how productive and efficient some restaurants have become at this. One of our favorable local joints separate the burger from the bun, fixins, and fries to keep everything from getting soggy. Others do something similar with all of their dishes. the effort has not gone unnoticed. Even when you’re doing takeout, you should always tip generously as much of the staff at restaurants are paid via gratuities. Others had mixed results: I was furious at Toyota for being one of the first car companies to back the insurrectionists in Congress, but other car companies (like Ford) soon followed. Live Nation/TicketMaster did pretty okay and they barely stayed alive, but I heard of people who had much worse experiences than I did. There were lots of companies that donated to local food banks and generally were good corporate citizens, but there were too many exceptions to that observations. What companies impressed you over the past year or two? Which ones disappointed you?     Previously: The Cutting Edge (September 30, 2021) America’s CEOs Are Having a Good Year (February 19, 2021)   The post What Companies Won or Lost Your Affection During Pandemic? appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 13th, 2022Related News

Ford vs Ferrari Tesla

    This week, we have been looking at some of the market surprises from 2021: The various charts, relative performance, returns, and other issues that were unexpected. Today’s surprise: Ford versus Tesla. Everybody knows Tesla has been on a tear, becoming of the 10 largest companies by market cap, making Elon Musk the richest… Read More The post Ford vs Ferrari Tesla appeared first on The Big Picture.     This week, we have been looking at some of the market surprises from 2021: The various charts, relative performance, returns, and other issues that were unexpected. Today’s surprise: Ford versus Tesla. Everybody knows Tesla has been on a tear, becoming of the 10 largest companies by market cap, making Elon Musk the richest man in the world. TSLA’s stock performance was stellar, adding 49.8% in 2021. It’s just a shame how badly TSLA lagged F, which had gains of 137.5% in 2021 — nearly tripling the market performance of the pioneering EV company. Here’s where things get interesting: Ford has a market cap of $95 billion, revenues of $135 billion, and profits of ~$3B. Tesla’s market cap is over $1 trillion, revenues of $46.8B, and profits of ~$3B. Tesla’s narrative was wonderful: Its technology was years ahead of everyone else’s, especially its in-car software and over-the-air updates; its designs were better, its battery tech was superior, its range was world-class, and its driving experience unlike anything else on the market. The stock price would rise as the S&P500 managers would have to add the company to the index. Ford’s narrative is less known but also intriguing: The only US automaker that did not need a bailout in the GFC, whose quality and designs have improved enormously. The company’s Mustang Mach E was a minor EV hit, the Lightning, a new electric version of the Ford 150 pick up (America’s best selling vehicle) has presold 200,000 units. The new Bronco is also a smash success, with an EV version sure to follow. What is the Tesla story today? It’s much more challenging than it was in the 2010s: Their success has attracted competitors from around the world, from well-financed start-ups to world-class legacy automakers. Their future product line is let’s just call it a work in progress, especially the cyber truck versus the Ford Lightning and the Chevrolet Silverado. That is before we get to the endless new choices from Porsche, Audi, Lucid, Rivian, Polestar, Mercedes, Volkswagen, Toyota, Hyundai, Genesis, Kia, GMC, Mazda, BMW, Volvo, the rest of Ford, and whoever else I forgot. Ford is currently trading at 1/10th of Tesla’s market cap. Can you imagine any scenarios where a decade from now, they are at (or close to) parity? Where both Ford and Tesla have market caps of say $500B? I think there is at least a 25% possibility that might come to pass. Said differently, would you lay 4-to-1 odds that Tesla is still bigger than Ford in 2032? I am not sure which side of that bet I would want to be on . . .         Previously: What Does Equal versus Market Cap Weight S&P500 Say About Top 5 Stocks? (January 3, 2022) 2021: Small, Medium & Large Cap Returns (January 4, 2022) 2021’s Surprising Laggard: Amazon (January 5, 2022)   See also: 7 Trends in Car Markets (December 23, 2021)   The post Ford vs Ferrari Tesla appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 6th, 2022Related News

2021’s Surprising Laggard: Amazon

    Perhaps the most overlooked story of 2021 was Amazon.com’s poor stock market performance. For the year, the giant gained a mere 2.4%. Among its closest mega-cap competitors Apple was up 34.7%, Tesla gained 49.8%, Microsft added 52.5%, and Google tacked on 65.2%. Rising 2.4% looks like losing money compared to its peers. Beyond… Read More The post 2021’s Surprising Laggard: Amazon appeared first on The Big Picture.     Perhaps the most overlooked story of 2021 was Amazon.com’s poor stock market performance. For the year, the giant gained a mere 2.4%. Among its closest mega-cap competitors Apple was up 34.7%, Tesla gained 49.8%, Microsft added 52.5%, and Google tacked on 65.2%. Rising 2.4% looks like losing money compared to its peers. Beyond its stock price, Amazon had a rough year. In 2020, the company rose to the challenge of the pandemic, showed its logistical expertise, the wizardry of Amazon Web Services (AWS), and the strength of its founder/CEO. 2021 saw a lot of the gloss on Amazon fade: -Jeff Bezos stepped down as CEO -Amazon lost its status as lowest-cost retailer; -Advertisers seemingly overran the site; -3rd party sellers added regulatory headaches; -Brad Stone’s Amazon Unbound revealed some of the less attractive aspects of the company (pod here) But all of that is hindsight. The simple market fact is this: After a decade where the company was unstoppable, AMZN’s stock rising 1830% and bringing the company to a $1.6 trillion market cap, Amazon.com stumbled. This might be the most overlooked, underreported story of 2021…         Similar chart showing with top 5 market caps   The post 2021’s Surprising Laggard: Amazon appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 5th, 2022Related News

2021: Small, Medium & Large Cap Returns

    Claims that the top 5 or 10 stocks are the sole or primary drivers of markets do not hold up to close scrutiny. We discussed this yesterday, using both the Equal Weight S&P500 Index as well as sector performance to show this is a broad and healthy rally. That post generated some pushback.… Read More The post 2021: Small, Medium & Large Cap Returns appeared first on The Big Picture.     Claims that the top 5 or 10 stocks are the sole or primary drivers of markets do not hold up to close scrutiny. We discussed this yesterday, using both the Equal Weight S&P500 Index as well as sector performance to show this is a broad and healthy rally. That post generated some pushback. And so I want to try a different tack: Comparing the S&P600 Small Cap, S&P400 midcap, S&P500 Large Cap performance for 2021. The S&P500 index beat the S&P600 Small Caps, but barely: 27.7% vs 26.6%. That is not the sort of wild underperformance you expect to see from a narrow, top-driven market. Ironically, it was the midcaps that did the least well at 23.6%. Note: Almost 24% would usually be considered a great year, but in 2021, it was the laggard. If you want to see a (cherry-picked) example of a narrow market where big caps outperformed small caps, see 1998: The S&P 500 saw gains of 26.7% (quite similar to 2021), but the small-cap S&P 600 actually lost 2.14%. THAT was a narrow market:   These charts tell a story of a market that is broad, not narrow.       Previously: What Does Equal Weight S&P500 Say About Top 5 Stocks? (January 3, 2022)   The post 2021: Small, Medium & Large Cap Returns appeared first on The Big Picture......»»

Category: blogSource: THEBIGPICTUREJan 4th, 2022Related News