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Source: Sam Ro
Chart #2 —
Zoom goes boom
During the pandemic and the lockdowns, Zoom had become the darling of Wall Street. Last week, Zoom closed the session at a new all-time low, down 90% from its October 2020 peak.
Source: Charlie Bilello
Chart #3 —
France-Germany, the gap widens
France's debt-to-GDP ratio has diverged significantly from that of Germany. The Fitch rating agency already downgraded the country's credit rating from AA to AA- last year. The S&P rating agency has just placed France under watch...
Source: Bloomberg, HolgerZ
Chart #4 —
The price of Abenomics
As the yen continues to plummet, it may be time to draw some lessons from the famous "Abenomics", the economic policy advocated by Shinzō Abe, Japan's Prime Minister between December 2021 and September 2020.
To curb deflation, the head of government had opened the floodgates with a programme based on three "arrows": fiscal, monetary, and structural reform, known as "Abenomics".
During this period, the Bank of Japan bought more than half the national debt with freshly created yen, as well as a huge quantity of local securities to support its domestic market.
But there was a price to pay: massive currency depreciation. After years of "printing money", the yen is now trading at 155 to the dollar: the yen has weakened by 32% against the dollar since 2021, and by 50% since 2012.
Source: Wolfstreet
Chart #5 —
Small and mid-caps suffer most from rising rates
Small companies generally devote a much higher percentage of their revenues to debt servicing, making them more sensitive to rising rates. The interest coverage ratio (operating income/interest expense) for S&P 600 small caps is 2.3 times, versus 7.6 times for S&P 500 large caps. With continued high interest rates and rising bond yields, the market is tending to penalise these small and mid-caps even more.
Source: Charlie Bilello, Factset
Chart #6 —
The wage gap between the US and Europe continues to widen
Could this be a major theme in the years ahead? A massive wage arbitrage has opened up between the US and its competitors. The overwhelming majority of Americans have no idea how much their salaries have risen in relation to those of the Japanese, the French, the British and so on. Will this gap affect the competitiveness of American companies? Will the use of AI help maintain a sufficiently high level of productivity?
Source: Jeff Weniger
Chart #7 —
Warren Buffet's 4 investment filters
How does Warren Buffett identify the best investment opportunities? He uses these 4 filters:
“Charlie (Munger) and I look for companies that have a) a business we understand; b) favorable long-term economics; c) able and trustworthy management; and d) a sensible price tag.”
Simple rules, but not so easy to follow...
Source :"The Investing for Beginners Podcast"
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