Are investors underestimating the power of brands? According to some research the answer is yes and if this dynamic continues to remain place it offers the possibility of better than market long term returns.
Michael Batnick, head of research at Director of Research at Ritholtz Wealth Management posted a very provocative chart that showed what the performance of the Dow would be if its membership was unchanged from 1998 versus its actual returns for the past two decades. The difference was startling. The dynamic Dow outperformed the static Dow by nearly a factor of four.
Oil continues to hover near multi year highs with yesterday’s surprise inventory draw numbers only adding to the bullish posture of the market. Although the Biden administration has made several attempts to jawbone the price of oil lower, first by appealing to OPEC to increase production and them hinting that it may release some stockpiles from the SPR reserve most analysts believe that crude and the whole hydrocarbon complex will at very minimum remain steadily bid for the foreseeable future.
Tesla’s shares are down more than -7% in early European trade today after Elon Musk polled his followers on Twitter if he should sell 10% of his stock. The typical Musk theatrics aside, the key question going forward for investors is whether Tesla stock may have peaked for the near term, setting it up for a nasty correction. The answer may be yes.
Everyone knows that the Chinese word for crisis is made up of two characters that mean danger and opportunity. Nowhere is this combination more evident than in the Chinese internet stock sectors which has taken a severe beating this year due to new government regulation that has put the whole industry on notice.
In June we discussed the investment thesis for uranium noting that several analysts have called it the “greatest trade of our lifetime”. Since then uranium stocks have exploded and we take another look at the reasons why this is suddenly the case.
But although EV market penetration is miniscule, regulatory pressures, advances in battery technology and massive capital spending by auto manufacturers indicates that in the next decade the world will make an inexorable shift away from the polluting and expensive ICE engine.