Mainstream financial press on 5G

Mainstream financial press on 5G

This post is pretty good advice (not that it mirrors mine :))

Prudent approach over several years and there will be waves of investment appropriate to different areas on value chain … FOMO will be a negative impact on portfolio and patience will be rewarded.

https://www.marketwatch.com/story/how-and-when-prudent-investors-ought-to-buy-these-5g-stocks-2020-01-13

Of their list, I am watching or own APPL, NOK, NXPI, T and QCOM. I also add ERIC, CSCO and a host of carriers around the world (mostly because they pay dividends to be patient)

Climate financial impact just keeps adding up … action when?

Climate financial impact just keeps adding up … action when?

Quote below -> I saw it on Seeking Alpha

Moody’s report on global sea level rise says Vietnam, Egypt, Suriname and some small island sovereigns face material credit risk

The document has been translated in other languages 16 Jan 2020

Singapore, January 16, 2020 —

— Sovereign credit profiles are mainly affected through economic and fiscal strength

— Credit assessments factor in the likely impact of plausible shocks related to sea level rise

Moody’s Investors Service says in a newly published report that Vietnam (Ba3 negative), the Bahamas (Baa3 stable), Egypt (B2 stable), Suriname (B2 stable) and other small island sovereigns are among the most exposed to a global rise in sea levels according to a range of studies.

Climate science shows that sea levels will most likely continue to rise for decades. Although this will happen gradually, higher sea levels contribute to increasingly frequent and severe natural disasters such as storm surges, floods or cyclones.

Moody’s explains that the sovereign credit implications of sea level rise and the related natural disasters are wide-ranging. The economic and social repercussions of lost income, damage to assets, a loss of life, health issues and forced migration from the sudden events related to sea level rise are immediate. The main credit channels for sovereigns are through their economic and fiscal strength.

Vulnerability to extreme events related to sea level rise can also undermine investment and heighten susceptibility to event risk, by hindering the ability of governments to borrow to rebuild, increasing financial risks, raising external pressures, and/or amplifying political risk as populations come under stress and institutional capacities are tested.

The extent of risk will be determined by the pace of increase in the frequency and severity of natural disasters related to sea level rise, which is currently highly uncertain, and by the effectiveness of adaptation measures, so far largely untested.

While some high income economies, such as Japan (A1 stable) and the Netherlands (Aaa stable) are also exposed, many of them have countermeasures in place, and their credit strengths mean they are unlikely to suffer a material credit impact.

Mixing Indicators

Mixing Indicators

In a quick post this morning from Heisenberg on the data out this morning, a statement struck me square in the face

Quote: “Retail sales came in better than expected for December (even as some cohorts were revised lower for prior data), perhaps relieving some worries about the stability of the key pillar holding up the US economy at a time when business investment is subdued and C-suite confidence remains depressed.”

Heisenberg is one of the smartest financial bloggers I read, so I am not pointing a finger at his misuse of indicators – his was a summary statement, not a conclusion or inference of the data.

Here’s the problem – mixing indicators and trying to reconcile their inferences – Retail numbers are backward historical indicators; CFO confidence is a forward looking indicator. It’s no surprise they are not consistent. From an investment perspective, which direction do you want to review and analyze (i remember all the prospectus i read … historical performance is no guarantee of future performance). But all the C-suite people i worked with looked ahead and planned accordingly – …

So should we, i think.

Molly Tuttle on David Rawlings

Molly Tuttle on David Rawlings

Molly is one of the absolutely amazing young guitar players & Billy Strings too. Some reporter asked her about fav players – her response about Rawlings was inspiringly accurate based on my experience – I love both their playing!

MOLLY TUTTLE ON DAVID RAWLINGS

Photo by Kaitlyn RaitzMy favorite guitar player is Dave Rawlings, whose style is really unique. It’s accessible, but so true to who he is. The way he crafts a solo.… It builds in a way I hear other people build solos—it climaxes and then comes to an ending—but the way he gets there is so him. And even the guitar he plays [a 1935 Epiphone Olympic archtop] is so different than anyone else’s I know. His way of backing up a singer has also been really inspiring. I first heard him through Gillian Welch. I was listening to her when I was just starting to write songs, but I was also still working on guitar a lot. As I listened, I heard his interesting guitar playing and it spoke to me. I got the idea to use a lot of tension over chords and to use intervals like minor seconds that some people might find a little dissonant, but he uses those in a really cool way.

Healthcare REITs

Healthcare REITs

Today was a good day for good reads – doesn’t happen all that much

Hoya Capital does a great job (imho) with their analysis and data-rich updates. They tend to share their data analysis and let the reader make their own decisions – i like that!

This was one of the best Healthcare REIT reviews I have seen in long time.

Healthcare REITs: ‘Retirement Crisis’ Fears Overblown

That graphic is a great overview of the segment … the rest of the article fills in the gaps around this table.

My portfolio contains: WELL, DOC and LTC. These positions were trimmed in 2019 given the run up and earlier I sold all my VTR as I am not a fan of SHOP-heavy senior housing businesses. Up-coming earnings reports and conference calls will be important to see if additional capital should be applied … i am skeptical until later in 2020, but facts will tell.

Autonomous Driving – A good update

Autonomous Driving – A good update

This may be a heavy hand to INTC (it was afterall a piece on INTC), but the overall picture on ADS was pretty good.

This is a pretty standard pic on the ADS levels

To get beyond today’s current best in class Level 3, many pieces need to fall together – some technical and some government approvals. The author states, quote:

“Intel will not be able to do this, as the roadshow presentation from CES 2020 also shows (see above). But this is not necessarily due to Intel. The competition is not ahead of Intel either. It is more that there is a need for multiple approvals and the infrastructure for enabling autonomous driving does not even exist yet. To make all this possible, a decisive development is needed and this development is 5G. 5G is generally considered to be decisive in this respect. However, this will change this year. With the coming rollout of 5G right ahead, I don’t think that the years 2024 and 2025, which Intel is aiming for, are unrealistic.”

Regardless of the hype, this is a long road (pun intended) … there are two things that will matter more than others: a) who has the largest and most ‘learnable’ dataset for AI / ML, and b) where will 5G infrastructure be reliable to send around the datasets required. (my opinion) … that completely skirts the government approvals (policy, etc).

*** exuberance from credit investors?

*** exuberance from credit investors?

Heisenberg posted on a BoA survey of credit investors this morning … wow. Such shifts make me nervous and I wonder if irrational exuberance is entering this space …

For example, quote: “For high yield investors, holding above normal cash levels is increasingly out of style. At the same time, it’s getting more fashionable to hold less cash than usual.’

If that does not grab your attention, then what about this … quote:

“In another sign of rapidly improving sentiment, 32% now see CCCs outperforming all other buckets across both IG and HY. That’s up from 17% in November and more than triple the 10% who expressed the same optimism around the junkiest junk in September.”

Another reason to like Apple

Another reason to like Apple

https://www.reuters.com/article/us-usa-minerals-recycling/apple-pushes-recycling-of-iphone-with-daisy-robot-idUSKBN1Z925S

Quote:

Inside a nondescript warehouse on the outskirts of Austin, Texas, Apple’s Daisy robot breaks apart iPhones so that 14 minerals, including lithium, can be extracted and recycled.”

If Apple can do it, and the article expresses the notion that they intend to share the technology, why not everybody? Reuse and recycle rather than extract. Just think what government investment could do worldwide to reduce the demand on extractions – environmental and human impact seems to be worth every dollar spent!

CFO Survey

CFO Survey

Recession talk disappeared with the holidays and new year and the geopolitical crazies … and the interest rate inversion corrected. Nothing to worry about, right?

https://www.fuqua.duke.edu/duke-fuqua-insights/cfo-survey-half-us-cfos-expect-recession-2020-election-looms

Based on my experience in corporate world, good CFOs have a pretty accurate pulse on revenue growth (and costs required for that growth). I am not positioning this as a ‘be-all’ insight into 2020, but for me, a data point that weighs a bit heavier than predictions from talking head type pundits.

Quote below

2020 Recession

More than half (52%) of U.S. CFOs believe the U.S. will be in an economic recession by the end of 2020, and 76% predict a recession by mid-2021. 

“Business leaders continue to expect an economic slowdown in the U.S. before or concurrent with the presidential election,” said John Graham, a finance professor at Duke University’s Fuqua School of Business and director of the survey. “I’d expect uncertainty about the election itself to cause firms to slow expansion in the summer and fall of 2020.”

Seventy-nine percent of CFOs in Asia believe their countries will be in recession by the fourth quarter of 2020, as do the majority of CFOs in Africa (77%), Canada (67%) and Latin America (55%). Forty-nine percent of CFOs in Europe expect a recession by the end of 2020.

Mr Duy and an easy explanation

Mr Duy and an easy explanation

The title of Mr Duy’s post is a bit misleading or a teaser, but the content is worth the read. While the easiest explanation is often close to accurate, continued FED theories of economic and market manipulation stretches the imagination. Duy makes it simple rather than conspiratorial.