EV and metals mining

Not enough is being printed, said, discussed or integrated into public policy on the potentially unintended consequences of EV mobility. Bloomberg published an article last month on impact to Chile’s Atacama area.

With all innovation, it’s the unintended consequences that bit us in the rear … sadly.

Mr Duy on Fed – Monday 7-15-19

Mr Duy’s full article is worth the read today … his summary does not carry the same value imho https://blogs.uoregon.edu/timduyfedwatch/2019/07/15/still-looks-like-25bp/

quote: “Bottom Line: I am still anticipating a 25bp rate cut this month. Policymakers advocating for a rate cut do not appear sufficiently motivated to argue for 50bp while a nontrivial contingent doesn’t believe a rate cut is necessary. It appears that getting consensus on anything more than 25bp would be a challenge considering the current state of the economy.

Here are a couple of other good quotes – bolds are from source

It still looks like the Fed will opt for 25bp rather than 50bp at the July meeting. The message from Powell and others is that the primary motivation for a rate cut is a recalibration of policy considering greater downside risks while the underlying economy, in the words of Powell, remains in “a very good place.” A 50bp rate cut seems inconsistent with what seems to be the general assessment of the state of the economy.”

The same is likely true for the degree of cutting that occurs after this July cut.Again, the Fed is recalibrating policy, not reacting to a turn in the business cycle. At this point, only roughly half of Fed policymakers expect rate cuts this year, and then only 50bp. That argues for Evans’ “couple” of cuts given the current data flow. Obviously, weaker data will yield more rate cuts. At the risk of oversimplification, I would anticipate ultimately 75bp or more of cuts if the preponderance of data begins to suggest that the economy is slowing enough to push unemployment higher.

India population growth

GDP is powered by population growth – workers, buyers, innovators … Most of the developed world is slowing, shrinking in some cases (political questions withheld). From a portfolio management perspective, I acknowledged that I am woefully under invested in India. This just makes my error more painful

Statista followed up w/ additional info on India – this targeting United Nations multidemensional poverty. https://www.statista.com/chart/18680/the-number-of-people-in-multidimensional-poverty-in-india/

Infographic: Then & Now India's Fight Against Poverty | Statista

5G rollout speeds so far

Another great data slice from Statista on current speed updates … a small sample size for sure, but will be interesting to watch this over time.

and a projection of up-take over time by geography (source Ericsson)

Infographic: Global 5G Adoption to Take Off in 2021 | Statista

Confusion?

After all the Fed speak today, the current interest rate futures are a bit strange, maybe confused

Near term rates are surely going down (wisely or not tbd) yet longer rates are mixed w/ 10yr flat and 30yr up … the superficial interpretation: fed lowers front end, increases inflation and “perfecto!”. Such BS – nothing is that simple. I am holding capital until some of this falls out. Younger more risk accepting traders can get in the saddle – and many will make money for sure. I just, as i’ve said countless times, want a return of my capital, not necessarily fantastic returns on my capital.

Mr Duy on Fed

Quote: “Bottom Line: The data is not supporting a 50bp cut, nor does there seem to be much stomach for a such a move at the Fed. The story emerging is one of an insurance cut to reverse December’s hike. A 25 basis point cut this month looks likely; given the dovish direction of the Fed as revealed in the SEP, the odds favor still another 25bp, but that looks more fragile than I believe a few weeks ago.

this seems like the most likely scenario – anything less than this will get market pushback

A couple of resources on 5G

First from Statista, technical contributions … no surprise here on the total number. Unfortunately a breakdown on what part of the value chain, e.g., end point, transmission, management, etc, is not available (at least yet).

Infographic: Huawei is Leading the Race to Develop 5G | Statista

One of my followed authors on Seeking Alpha posted an interesting view on why US is behind in technology, leadership and deployments. Some of this is new to me, and I do not have additional sources to support the view published here. https://seekingalpha.com/article/4273134-5g-technology-ability-compete

Regardless, US is not leading, and the current political strategy (blacklisting and tariffs) are hard for me to paint a path of success. Seems like a collaborative effort with government investment in technology and deployments would have higher probability of success.

Better late than sorry – DBI (old DSW) Q1 Conf Call

Disclaimer: Not recommendation just an observation and opinion

I just finally read carefully the latest earnings conference call from DBI – i was really late as this sat in my inbox since May 30 – a month late. Between now an then, I doubled my position in DBI due to the price / valuation and X-div dates. My current long position is ~2% of my actively managed portfolio, and I am considering increasing that position.

The earnings call held a couple of nuggets: a) first q2 will not be a barn burning (a buying opportunity?) and q3 is seasonally strongest; b) management enthusiasm for their strategy was high and their opportunities / challenges were well explained; and c) analysts did not ask tough questions in the call – are they comfortable w/ management’s strategy and delivery, or have they just punted on anything / everything retail? Hard to sa

I will most likely not add to my position until q2 earnings are out to see the depth of analyst disappointment (or absence thereof)

A good summary of recent financial news

I found this post a great summary of recent economic news. It puts things simply without trying to give condident advice. I just cannot receive advice (crystal ball crap) these days with how erratic events are unfolding …

https://seekingalpha.com/article/4271564-fed-worried-thought-technically-speaking-week-june-17minus-21

Here was my comment to the post: “I thought this was a great summary – thank you. If I approach today’s equity markets from a purely risk management lens, and ask which direction is most probable (up / down), and what is the relative impact to equity values of those moves – my risk monitor is way tilted to downward moves, rather than risk of missing additional up-side. There are a multitude of scenarios that can play out over the next few months (after the last 8 weeks if anybody has a high confidence crystal ball – run away, fast!), but I firmly believe risk is concentrating on downward scenarios. Risk management is required today … on steroids.”

An active investor

https://seekingalpha.com/news/3473007-big-u-k-investor-dumps-exxon-climate-change

quote:

  • Exxon Mobil (XOM +0.9%) is being dropped by the U.K.’s biggest asset manager, which also says it plans to vote against the reappointment of Chairman/CEO Darren Woods for failing to adequately address the threats posed by climate change.
  • XOM is the only oil major Legal & General is divesting, as competitors including Chevron (NYSE:CVX) and Royal Dutch Shell (NYSE:RDS.A) meet or exceed the insurer’s basic standards on climate change action.
  • The divestment affects a small part of XOM’s equity – Legal & General owns just 0.6% of the company, and the divesting funds hold just part of that -but it could increase pressure on the oil giant.

The more investors who apply pressure with their capital to further climate change considerations the better! Carry on!