Insights on markets, emergent trends, history, innovation, risk management, global economics, strategy, policy, and other topics that catch our attention. Inspired by ongoing research, conversations and events. Written and edited by Osbon Capital Management and published every Thursday morning.
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Too much time is spent talking about price. Fundamentals are ultimately what drive equity prices higher over time. To say this another way, a company’s stock price can’t continue to rise unless it continues to be successful. The famous quote by Warren Buffett is, “In the short run, the market is a voting machine, but in the long run (...)
Week 33: SPAC Bubbles, The Metaverse, Lumber, Poly Network Hack, and so on.
Briefing: SPACs are allowed to publish future revenue projections when they go public, which is causing some problems. | The Metaverse can be used to train autonomous robots. | Lumber prices are back below pre-pandemic levels after jumping to extreme heights. | Blockchain technology may prove useful in preventing money laundering.
Week 32: Quirks of the S&P 500 & The Power Behind Meme Stock Upside
Briefing: The S&P500 is the biggest brand name in the investment world. It’s known as the index that passively tracks the 500 largest public US companies, but that’s not 100% true and the list of exceptions is growing. The very late addition of Tesla in December of last year is a prime example. | The options market is the driving…
Week 31: Investing In China, Zero G Manufacturing and Cloud Spending
Briefing: It shouldn’t come as a surprise that investing in Chinese companies comes with the risk of intervention by the Chinese government. China is acting as an unpredictable investment partner. | Fiber optics will soon be manufactured in space to reduce imperfections. | Cloud spending continues to grow at a rapid pace, and it’s not done growing yet. Chinese Tech…
Week 30: Buybacks Over Dividends, AlphaFold Breakthrough and The First 3D Printed Bridge
Briefing: This week, three topics caught our attention. Equity yields are higher than reported. The S&P 500 dividend yield is approximately 1.25%, but when you include buybacks the yield is closer to 2.25%. Investors may not appreciate how the buyback yield is positively impacting them from both a tax and income perspective. AI is contributing to real scientific breakthroughs. AlphaFold…
Week 29: Interest Rates, Venture Capital and High Yield Debt
Briefing: Following many decades of incredible success, venture capital investing is aggressively funding the next wave of innovative disrupters. The high yield rate, the rate that investors earn from buying “junk” rated companies, is the lowest it’s been since 2007, which signifies very low bankruptcy risk. Where should future interest rates settle now that the 10 year treasury rate is…
Week 28: The All Electric Future & Battery Technology
GM recently announced strategic plans to convert its entire product line into electric vehicles by 2035. For context, GM sold 6.8m new vehicles last year out of 78.5m total, making them one of the largest vehicle manufacturers in the world. It’s a bold, but necessary move to create a sustainable and environmentally aware future. Given our increasingly electrified world, battery…
Week 27: Chinese IPOs, Global Ownership, and The AI Race
Briefing: With all of the recent news on Didi, the Chinese version of Uber, it’s a good time to revisit the challenges and opportunities related to investing in Chinese companies. Similar to the US, China is a highly sophisticated global technology leader and many investors have successfully participated in the rise of Alibaba, Tencent, JD, and so on. Investors have…
Week 26: The Dollar, Lumber and Cybersecurity
Briefing: There are three themes that rose to the top this week as we head towards a much-needed long Summer weekend. In spite of the many noisy headlines: the dollar is not on the verge of collapse, lumber prices are normalizing fast and there is an exponentially increasing need for cybersecurity. Let’s dive into each of these in turn below.
Week 25: Mission Driven Investing, Avoiding Headwinds and Considering the Stakeholders
Impact investing has gone through a revolution of sorts over the past few years. For decades, communities have voiced continuous concern that shareholders are myopically focused on short term profits at the expense of society as a whole. ESG (environmental, social, governance) investing was considered to be more of a marketing strategy or a charitable endeavor instead of a high…
