vestact posted: " Market Scorecard US markets continued to decline yesterday, adding to the disappointment of Friday's washout. The S&P 500 is now lower than at the start of August, sadly. Minneapolis Fed President Neel Kashkari made headlines yesterday saying " Vestact - Money with a dash of funny
US markets continued to decline yesterday, adding to the disappointment of Friday's washout. The S&P 500 is now lower than at the start of August, sadly. Minneapolis Fed President Neel Kashkari made headlines yesterday saying "I was actually happy to see how Chair Powell's Jackson hole speech was received. People now understand the seriousness of our commitment to getting inflation back down to 2%." Ok then, good for him. We were not happy.
In company news, Apple is said to have trademarked the name "Reality One/Pro" for its mixed reality headset which is coming as soon as next year. Locally, Walmart has made an offer to buy all the shares in Massmart it doesn't already own. Shares of the retailer were up 44.9% on the news.
This was not the start to the week that we wished for, but it is what it is. The JSE All-share was down 1.38%, the >S&P 500 fell by 0.67%, and the Nasdaq was 1.02% lower.
Our 10c Worth
One Thing, From Paul
We own a number of Internet companies in our investment portfolios, because it's the defining technology of our era. Everyone is using the web to do new things. We are keen investors in social media, e-commerce, cloud computing, payments, content streaming, gaming, and more.
We got in early, more than a decade ago, and it was a bumpy ride. For years, people said companies like these were overvalued, because their revenues and profits were not very strong. All that they had going for them was rapid user growth.
Ben Evans (pictured below) made an interesting point about that in a recent blog post:
"For such businesses, knowing how, exactly, you're going to make money might not be the most important thing to focus on. If you are acquiring tens or hundreds of millions of users with a new kind of service, and they are attributing value and attention to you, and the users, attention, and value have network effects and hence probably winner-takes-all effects, and if they come with little or no marginal cost, then the revenue can and probably should come later."
A good example of this is Meta's WhatsApp, which Bright writes about below.
We often write about the "side hustles" of the companies we own. These are new projects that are tacked on to existing operations. Some of them work, but many of them do not. Amazon announced plans to shut down Amazon Care, its virtual health care business. Amazon also stated that it is not a complete enough offering for the large enterprise clients they have been targeting.
I do like the concept of remote healthcare, hopefully, someone else can make it work. Amazon is not giving up on health care, they recently bought One Medical, a subscription-based primary care company.
It's important to know when to pull the plug. Sometimes that decision is harder and takes more discipline than making the original investment. Well done to Amazon for not being too proud to admit defeat.
Bright's Banter
Meta and e-commerce startup Jio are reported to be bringing grocery shopping to WhatsApp. They're calling this a global-first end-to-end shopping experience on the popular messaging platform. The new venture is going to be called JioMart, and it will be piloted in India.
Customers will be able to browse JioMart's entire grocery catalog on WhatsApp, add items to a cart, and make payments via a Unified Payments Interface (UPI) rail without ever having to leave the app.
If this business model is successful, it could prove to be a major source of revenue for WhatsApp, which has largely avoided serving ads to its users.
Linkfest, Lap It Up
Parched ground is less likely to absorb water, increasing the risk of dangerous flash floods. There are ways to mitigate these conditions - How long droughts make flooding worse.
Bigger tyres on an electric car lowers their range. They look good but that comes at a cost - EVs have a big tyre conundrum.
Signing Off
Asian markets are mixed this morning, but sentiment seems to have stabilised. A climb in Japan and South Korea helped to counter a retreat in Hong Kong tech shares, and mainland China.
China's largest property developer, Country Garden Holdings, said first-half earnings plunged 96% in the biggest profit slump since its 2007 listing.
US equity futures are higher in early trade, signalling a let-up in the negative mood that has prevailed since late last week. The Rand is hovering at around the R16.85 mark to the US Dollar.
That's all for now. Thanks for reading this letter.
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