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Musings on Markets's Blog

Is there a signal in the noise? Yield Curves, Economic Growth and Stock Prices!

December 7, 2018 Comments (0)

The title of this post is not original and draws from Nate Silver's book on why so many predictions in politics, sports and economics fail. It reflects the skepticism with which I view many 'can't fail" predictors of economic growth or stock markets, since they tend to have horrendous track records. Over the last few weeks, as markets have gyrated, market commentators have been hard pressed to explain day-to-day swings, but that has not stopped them from trying. The explanations have shifted...

Investing Whiplash: Looking for Closure with Apple and Amazon!

December 3, 2018 Comments (0)

In September, I took a look, in a series of posts, at two companies that had crested the trillion dollar market cap mark, Apple and Amazon, and concluded that series with a post where I argued that both companies were over valued. I also mentioned that I was selling short on both stocks, Amazon for the first time in 22 years of tracking the company, and Apple at a limit price of $230. Two months later, both stocks have taken serious hits in the market, down almost 25% apiece, and one of my...

The GE End Game: Bataan Death March or Turnaround Play?

November 14, 2018 Comments (0)

It seems like ancient history, but it was just 2001, when GE was the most valuable company in the world, commanding a market capitalization in excess of $500 billion. The quintessential conglomerate, with a presence in almost every aspect of the global economy, it seemed to have been built to withstand economic shocks and was the choice for conservative investors, scared of the short life cycles and the volatile fortunes of its tech challengers. Unlike other aging companies like Sears that...

An October Surprise? Making Sense of the Market Mayhem!

October 29, 2018 Comments (0)

I don't know what it is about October that spooks markets, but it certainly feels like big market corrections happen in the month. As stocks have gone through contortions this month, more down than up, like many of you, I have been looking at my portfolio, wondering whether this is the crash that the market bears have been warning me about since 2012, just a pause in a continuing bull market or perhaps a prognosticator of economic troubles to come. If you are expecting me to give you the...

High and higher: The Money in Marijuana!

October 16, 2018 Comments (0)

In 1992, when Bill Clinton was running for president of the United States, and was asked whether he had ever smoked marijuana, he responded that he had, but that he did not inhale, reflecting the fear that being viewed as a weed-smoker would lay low his presidential ambitions. How times have changed! Today, smoking marijuana recreationally is legal in nine states, and medical marijuana in twenty nine states, in the United States. Outside the United States, much of Europe has always taken a...

Amazon and Apple at a Trillion $: A Follow-up on Uncertainty and Catalysts!

September 21, 2018 Comments (0)

In my last post, I looked at Apple and Amazon, as their market caps exceeded a trillion dollars, tracing the journey that they took over the last two decades to get to that threshold and valuing them  given their current standing. While you can check out the stories that I told and the details of my valuation in that post, I valued Apple at $200, about 9% less than the market price, and Amazon at abut $1255, about 35% lower than its market price. I concluded the post with a teaser,...

Apple and Amazon at a Trillion $: Looking Back and Looking Forward!

September 19, 2018 Comments (0)

For most of us, even envisioning a trillion dollars is difficult to do, a few more zeros than we are used to seeing in numbers. Thus, when Apple’s market capitalization exceeded a trillion on August 2, 2018, it was greeted with commentary, and when Amazon’s market capitalization also exceeded a trillion just over a month later on September 4, 2018, there was more of the same. I have not only admired both companies, but tracked and valued them repeatedly over the last twenty years. There is...

Trillion Dollar Toppers: Market Triggers, Value Drivers and Pricing Catalysts!

September 10, 2018 Comments (0)

In the last few weeks, the market capitalization of Apple and Amazon each hit a trillion dollars, a threshold not seen before in public markets. Predictably, that has drawn press attention and commentary about what this moment means for markets, investors and the companies themselves. As readers of this blog know, I have followed both companies and valued them for more than two decades, and this is as good a time as any to see how they got to where they are today, and what the future holds...

Deja Vu In Turkey: Currency Crisis and Corporate Insanity!

August 15, 2018 Comments (0)

This has been a year of rolling crises, some originating in developed markets and some in emerging markets, and the market has been remarkably resilient through all of them. It is now Turkey's turn to be in the limelight, though not in a way it hoped to be, as the Turkish Lira enters what seems like a death spiral, that threatens to spill over into other emerging markets. There is plenty that can be said about the macro origins of this crisis, with Turkey's leaders and central bank bearing a...

The Privatization of Tesla:

August 10, 2018 Comments (0)

After my last two posts in Tesla, I was planning to take a break from the company, since I had said everything that I had to say about the company. In short, I argued that Tesla, notwithstanding its growth potential, was over valued and that to deliver on this potential, it would need to raise significant amounts of capital in the next few years. In an even earlier post, I described Tesla as the ultimate story stock, both blessed and cursed by having Elon Musk as a CEO, a visionary with a...