vestact posted: " Market Scorecard In a volatile trading session, US markets bobbed between red and green, eventually ending marginally lower. Jerome Powell appeared before Congress yesterday, saying a recession is a possibility. He also noted that the US economy i" Vestact - Money with a dash of funny
In a volatile trading session, US markets bobbed between red and green, eventually ending marginally lower. Jerome Powell appeared before Congress yesterday, saying a recession is a possibility. He also noted that the US economy is very resilient, so it can handle higher interest rate hikes.
Locally, our inflation reading (CPI) landed at 6.5%, above the SARB's 4 to 6% target range. Transport was one of the drivers of higher inflation, with a rise of 15.7%. This suggests that local interest rates will also continue to rise.
In company news, tobacco company Altria dropped 9% on the news that their e-cigarette subsidiary Juul, will be banned in the US. Interestingly, the share prices of other tobacco companies didn't react to the news.
Yesterday the JSE All-share closed down 1.55%, the S&P 500 closed down 0.13%, and the Nasdaq closed down 0.15%.
Our 10c Worth
One Thing, From Paul
Dr. Paul Bloom is an expert on suffering. The Canadian American psychologist is a professor at both the Universities of Yale and Toronto. That's him in the picture below.
Bloom notes that the achievements people are most proud of later in life are those which involved struggle and suffering. These are things like raising children, caring for a terminally-ill family member, building a business, running a marathon, writing an academic thesis, paying off a home loan, or renovating a house.
Bloom is careful to separate chosen and unchosen suffering. He does not argue that unchosen suffering, like the death of a loved one or living with chronic pain, are defining. Self-set obstacles and chosen difficulty are what give life meaning. Meaningful experiences require an element of suffering.
I may be stretching the point here, but surviving a deep bear market, hanging on to stocks in a beaten-up portfolio, and waiting for them to recover, is also a character-building exercise. One day we'll be proud that we survived the sell-off of early 2022.
Byron's Beats
In 2014, Amazon's in-company delivery service was responsible for only 0.2% of all US packages delivered. Last year they overtook Fedex and now deliver over 20% of all packages in the US. They are on track to surpass UPS and the US Postal Service soon.
This is an incredible achievement, in an industry that is not easy to crack. Logistics is complex and capital intensive. It probably would have been easier to keep on outsourcing the delivery function but Amazon is all about keeping prices low - "Your margin is our opportunity".
That's what is so wonderful about owning shares in thriving companies. While you as a shareholder were minding your own business, Amazon was building one of the biggest logistics networks the world has ever seen, in just 8 years. Lovely.
Michael's Musings
Forty years ago China was 1/10 the size of the US, now that gap is much smaller. When you measure GDP on a purchasing power parity basis, which is removing the impact of currency valuations from the calculation, China is actually 20% bigger than the US now. There is no doubt that China is a growth miracle, lifting millions of people out of extreme poverty.
Much of the credit for that can be attributed to the Chinese Communist Party, for doing what was necessary for growth, even if it was at the expense of personal freedoms and the environment. My question is, is an authoritarian government worth it if it results in rapid economic development? I've had this debate with many people, and my conclusion is no, it's not worth it.
Authoritarian governments are not accountable, so they can do a terrible job and it doesn't matter. Have a look at North Korea, China's dirt-poor neighbour. The second issue is that power is addictive, and once a leader has it, they don't like to let go. Living without personal freedoms is highly unsatisfactory.
The New York Times just published an article about the development of surveillance systems in China. The government is collecting as much information on citizens as possible. This includes knowing people's faces, eye iris, voice, and DNA. The DNA is collected so that the state can track family trees. Another article I read suggested that technology is being developed to identify people based on how they walk. Further to that, they are tracking cellphones, and what apps are used on the phone, to link someone's digital life to their physical movements.
As it stands, around half of all the security cameras on the planet are in China. The government can use all the information to discourage behaviour they deem unfit. Would you participate in a protest if the government would know exactly who you are once you walk past a security camera?
Streaming upended the movie industry as we know it. This year, half of the ten Oscar nominees for best picture were produced by streaming services. These movies were premiered on the big screen and at home simultaneously.
For the first time in history, streaming services took home the award for best picture. The winner? Wait for it. . . Apple! However, none of those ten best picture nominees made the top ten list at the US box office. Combined, they earned just a quarter of Spider-Man's 2021 box office haul of $800 million.
Said differently, the academy and society at large have very different taste in movies. So how do you know a movie is going to lose money? It's critically acclaimed! The infographic below shows the number of Academy Awards wins in 2022, by film distributor.
Linkfest, Lap It Up
Advertisers are paying for an estimated $1 billion in ads that never get seen. Due to communication issues between TVs and streaming boxes, the streaming box doesn't know when the TV is off - Some Ads Play on Streaming Services Even When the TV Is Off.
Asian markets are higher this morning, and US futures are currently flat. Jerome Powell will be in front of Congress again today, so we could be in for another volatile session. The Rand is currently at $/R 15.96.
Thankfully, concerns about a global recession have hit oil prices too. Lower oil prices will take the sting out of inflation.
Stay warm out there, and enjoy not having to wear a mask, finally!
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