My Two-for-Tuesday morning train WFH reads:
• Nasdaq Days Like This Once Were Common. During the Dot-Com Crash Nasdaq Index hasn’t wiped out loss of almost 5% since early 2001; Late-day rally latest lurch in volatile market this year. (Bloomberg) see also Is This the End of the Go-Go Years? We humans are pattern-seeking creatures so it makes sense that we would continually look to the past to help us explain the present or future. Assuming we understand exactly what’s going to happen based on what’s already occurred helps put our minds at ease, even if we all know predicting the future is impossible. (A Wealth of Common Sense)
• Four-day weeks and the freedom to move anywhere: Companies are rewriting the future of work (again) As omicron spreads, more companies are adopting creative approaches and using technology to help mitigate workplace inequity (Washington Post)
• Intangible Value One of the reasons why traditional value investing has struggled over the past few years is because the way it measures a business is incomplete. It relies on things that show up on a financial statement like revenue or PP&E. But a lot of value accrues off the balance sheet. This is what Kai focuses on. Getting a more complete picture of the value of a company by quantifying intangibles; Brand equity, human capital, intellectual property, and network effects. (Irrelevant Investor) see also Why Is Silicon Valley Still Waiting for the Next Big Thing? The tech industry has grown ever more rich off big ideas that were developed more than a decade ago. New things like quantum computing and self-driving cars could take a while. (New York Times)
• Reddit’s WallStreetBets Was the GameStop Kingmaker, but Longtime Users Say the Thrill Is Gone The group was once the engine that powered rookie traders, but now veteran members say only tired-out ideas remain. (Wall Street Journal)
• To Tame Inflation, the Fed Needs to Get Into Your Head: The theory that expectations are a key driver of price increases will be tested in 2022 (Businessweek) see also Powell’s Legacy Is at Stake in Fed Pivot to Beat Back Inflation Quest to soft land economy to define Fed chair’s second term; Critics urge open door to more rate hikes: every meeting live (Bloomberg)
• Why is Ukraine such an economic failure? One obvious culprit is the war itself, which since 2014 has chilled foreign investment and forced the government to divert resources toward the military. In my overview of the post-Soviet countries, I concluded that Rule #1 for economic development was not to piss off Vladimir Putin. But looking at the graphs above, it’s very clear that that can’t be the whole story, because Ukraine’s problems began well before 2014. (Noahpinion)
• Americans Feel Burnt Out — Personally And Politically Survey after survey showed that Republican voters didn’t understand — or just didn’t like — Democrats, and vice-versa. But now there appear to be more voters like me out there: tired of the current state of divisiveness but pessimistic that the ongoing political rancor will subside anytime soon. (FiveThirtyEight) see also How do we solve our pandemic fatigue? There needs to be a way to talk about what we have lost that acknowledges both the real risks of an unmanaged virus, and the injustice of not getting these two years back. (New Statesman)
• Google AI Research: Themes from 2021 and Beyond Over the last several decades, we’ve witnessed a lot of change in the fields of machine learning (ML) and computer science. Early approaches, which often fell short, eventually gave rise to modern approaches that have been very successful. Following that long-arc pattern of progress, expect to see a number of exciting advances over the next several years, advances that will ultimately benefit the lives of billions of people with greater impact than ever before. (Google AI Blog)
• There are 40 quintillion black holes in the observable Universe. More or less. Astronomers calculate the evolution of black holes over the Universe’s existence. (Syfy Wire) see also In a First, an ‘Atomic Fountain’ Has Measured the Curvature of Spacetime The atom interferometry technique uses the effects of time dilation to reveal subtle changes in gravity’s strength (Scientific American)
• Four Classics, All With Walk-Off Endings, Deliver The Best NFL Playoffs Weekend Ever In 25 hours on the greatest playoff weekend in the 102-year history of professional football, the headlines, one by one, kept overtaking the last one: (NBC Sports)
Be sure to check out our Masters in Business interview this weekend with Tina Vandersteel, head of GMO’s Emerging Country Debt team and serves as portfolio manager for GMO’s external and local currency debt portfolios. Prior to joining GMO in 2004, she worked at J.P. Morgan in fixed income research developing quantitative arbitrage strategies for emerging debt and high yield bonds.
Retail Traders Bailed on the Market Right Before Stocks Rebounded
Source: Bloomberg
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