Sunday, 6 September 2015

Stories we should be thinking about

A few finance and related stories we need to be thinking about before Monday morning:


Macro matters:

So how was the G20 conference for you?  Not unexpected words from Christine Lagarde of the IMF on a lack of growth and the need for structural reforms:

“The major challenge facing the global economy is that growth remains moderate and uneven. For the advanced economies, activity is projected to pick up only modestly this year and next. For the emerging market economies, prospects have weakened in 2015 relative to last year, though some rebound is projected next year. For both the advanced and emerging economies, productivity growth continues to be low.


“A concerted policy effort is needed to address these challenges, including continued accommodative monetary policy in advanced economies; growth-friendly fiscal policies; and structural reforms to boost potential output and productivity"

Yes, monetary policy globally generally remains very accommodative...


...assisted by the current low level of inflation generally in the world:


(h/t @callum_thomas)

My view: as expressed in a tweet I wrote yesterday:

Headline in today's FT: 'Danger lies in belief that inflation is history'. Absolutely - and especially with so much debt in the world.

Super piece by @JLyonsFundMgmt on market internals which appear to be deteriorating:


...and meanwhile (finally) share prices and earnings are finally in unison (the trouble is both are down...): 

What should we make of this week's Barron's front page?! 10% gains by year end and 2016 to be positive too.  I like opportunities at the moment but am very aware of macro volatility.  My gut feel is that the front page is a little bit too optimistic: 

Very good read on China by @WorthWray discussing many of the economic and political realities:

Well 'worth' a read . Especially liked the mini appraisal by of an article by :-)

The trouble with a slowing China is nicely shown by this graph from the Peterson Institute: 

Got to watch water stress over time...
Top ten investment scams - amazing to me that Mr Madoff was not number one!  Link here

Bernie Madoff  – Loss estimated at $65 billion

Madoff transmitted out fraudulent dividend records to investors making it seem their funds were well and growing. When the market collapsed, investors started asking for their money and Madoff couldn't do it. $65 billion were lost through Madoff's Ponzi scheme and were the largest such scheme in American financial history.

Will Europe be the centre of bitcoin innovation?  This article thinks so...(shame bitcoin has in price terms been so bad recently):

By providing a legal framework, many European countries are giving bitcoin entrepreneurs the confidence they need to create and find new use cases for bitcoin and the blockchain.

Company-related observations:

Fascinating article on the new Google which concludes that:

Pichai’s leadership challenge is to build a new Google, keep it fresh and relevant to consumers, advertisers, and talent. I think we’ll find that the old Google and Pichai’s Google are worlds apart.


Interesting: 'After running the "ValueRank" ranking system on all Russell 1000 consumer goods stocks on September 05, I discovered the twenty best stocks, which are shown in the table below'
Link here. Funnily enough I was doing some levels work and both Archer Daniels Midland and Wal-Mart both flashed up: 


However this chart indicates that Wal-Mart is not relatively well respected:


Wonderful on Caterpillar (link here):

'If someone wants an industrial, he can pick up GE, Emerson, Honeywell, Deere, United Technologies, or something like that. Those companies may be volatile, but the business has more “fat years” and the returns tend to exceed the S&P 500. Caterpillar isn’t a bad stock--if you hold it for twenty years, you will have more purchasing power than you do now--but it is not a great company from a growth perspective. The feast years just aren’t long enough'

Interesting infographic about cigarettes (link here).  Made a non-smoking but tobacco sector investor like me think...

And finally...

A great post why writing down one's thoughts ("Journaling") is a fantastic decision-making tool
Link here.


Have a good week

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