- Much of our prosperity in general and shareholder returns in particular depend on the global economic order of relatively free trade and capital flows.
- That order has been singled out as the source of stagnation by an increasingly populist movement.
- While there are indeed groups left behind from the disruption caused by trade, it is far from the only disruption in a capitalist system that is powered by creative destruction.
- What can be done to take the wind out of the sails of the populist and preserve the world economic order turns out to depend on the type of populism.
July 10th, 2017 · Comments Off on Populism, Trade And The Markets
Comments Off on Populism, Trade And The MarketsTags: The Markets
July 10th, 2017 · Comments Off on Synaptics Transitions From Mobile To IoT Company
- The company acquired two businesses to facilitate the transition.
- While success isn’t guaranteed, we think the company has a good shot at it.
- Valuations are very reasonable and seem to have priced in most immediate risks.
- The company could have upside in the near future based on integration of touch sensing, display controllers, and fingerprint recognition, and OLED TDDI.
Comments Off on Synaptics Transitions From Mobile To IoT CompanyTags: SYNA
July 9th, 2017 · Comments Off on Volatility To Return?
- After a period of unusual calm, markets are getting a little more volatile. We think such volatility was always going to come, given the long period of unusual stability.
- This is informed by vertigo after strong gains, retreating central banks, tax cuts going nowhere and the prospect of trade troubles.
- And while we’re alarmed about the trade thinking that informs part of the US administration and do not relish a trade war, we don’t think the latter is a given.
Comments Off on Volatility To Return?Tags: The Markets
July 9th, 2017 · Comments Off on A Micron Super Cycle? – Micron Technology Inc.
- Micron once again beat estimates and raised expectations. At least for now, however, it wasn’t enough to start a new leg up.
- There are those that argue Micron is facing a super cycle in memory or, at the minimum, the cyclical nature is becoming more muted.
- We see some rationale in that view, but argue that investors need more proof in order to latch onto that idea.
- In the meantime, bulls and bears, the latter expecting bad news out of the memory markets anytime soon, are locked.
- Equilibrium between those that have large profits and selling and/or those that see the end of the cycle, versus those that see it as a super cycle and notice the low valuations.
Comments Off on A Micron Super Cycle? – Micron Technology Inc.Tags: MU
July 1st, 2017 · Comments Off on How Dangerous Is The World’s Debt Problem?
- High debt can lead to financial crisis. Since debt levels have risen in many countries, there is considerable reason for concern.
- However, big financial crises, while economically enormously harmful, are rare events needing outsized asset bubbles financed by debt, we don’t see that in the developed world yet.
- We have to distinguish between public and private debt, and debt denominated in domestic and foreign currency.
- We do see two dangerous situations: eurozone peripheral public debt and emerging market private debt denominated in US dollars.
July 1st, 2017 · Comments Off on Technology Optimists Vs. Pessimists
- According to techno-optimists, we’re on the verge of an inflection point where technological innovation is accelerating.
- Techno-pessimists like Robert Gordon argue that there is nothing in the data to suggest that this is happening.
- We think Gordon is largely right, but we also think the third industrial revolution hasn’t run its course yet, as Gordon is suggesting.
- There are still large parts of the economy which haven’t really adapted to the possibilities of ICT, and companies figuring out how stand to gain massively.
Comments Off on Technology Optimists Vs. PessimistsTags: Technology
June 29th, 2017 · Comments Off on The IMF Blasts The U.S.
- The IMF has become pretty critical of the US economic model, arguing it isn’t addressing rising inequality, stagnant wages, declining participation and social mobility and high poverty levels.
- While this critique is by no means exclusive of the present government, the IMF does warn that many proposals are liable to make these things worse.
- The IMF is also reducing growth forecasts and is rather skeptical of the attainability of the governments growth targets.
June 29th, 2017 · Comments Off on Is The Fed Is Behind The Wrong Curve?
- Debt to GDP ratios have kept on rising since the financial crisis in most of the world, in some parts at alarming rates.
- While we wholeheartedly agree with the BIS that this is a dangerous development, we’re less sure about their diagnostic.
- In essence, the BIS argues that the Fed is behind the wrong curve, steeped in Phillips curve thinking.
- But we do not see a compelling case for laying the blame of low interest rates at central banks.
- Nor do we think tightening in a weak economy to contain financial excesses is the right approach.
Comments Off on Is The Fed Is Behind The Wrong Curve?Tags: Monetary policy
June 27th, 2017 · Comments Off on Cypress 3.0 Still On Track
- Cypress Semiconductor is in the midst of a corporate transformation that was fueled by two acquisitions.
- While the company is still digesting these acquisitions, the indications are that the transformation is well underway and delivering solid returns.
- Now that the boardroom fight is out of the way, investors can concentrate on these developments.
- One should also take notice of a 3.3% dividend yield, not all that common for a small tech company.
Comments Off on Cypress 3.0 Still On TrackTags: CY
June 26th, 2017 · Comments Off on What’s Behind Declining Economic Dynamism?
- Several measures like new company formation show a worrying decline in US economic dynamism.
- Demographics and changes in retail and house ownership explain part of this.
- Regulation and increasing economic concentration are also to blame.