- When I want to dig into some company
Which companies also hold shares in company x
Who are the decision-makers in those companies
What trades have they done recently
What is their cash position
Are they democrats or republicans? If republican, how close to trump?
How much kissing ass to trump
How many hedges against trade war in their supply chain
How exposed to other industries in their supply chain
Consumer loyalty? Socioeconomic demographic of consumers? Elasticity of products?
US household debt https://awealthofcommonsense.com/2019/11/u-s-household-debt-isnt-as-bad-as-you-think/
What do American consumers mostly buy
How has their consumption of this changed
Household debt as a percentage of household income decreasing (see above)
Quality of loans increase so borrowers better credit score
Debt increase as the economy and population increase
Related to unemployment, growth, wage growth
Related to prices of things
Trade war-> tariffs-> higher prices for the American consumer -> higher prices even more -> inflation
Low cost of borrowing, inflation -> borrow money to buy shit like cars
Americans have been increasing debt to buy automotive (see website) BUT- what type of cars? Tesla et al or normal gas?
But now banks less likely to lend -> decrease profit margins
CPI rises-> fixed income lose value because yields don’t increase with inflation EXCEPT for treasury-inflation protected securities
this vis-à-vis
- Deflation: see which companies historically strong, don’t cut quality of raw material, don’t cut marketing, have low debt
- Presidential race: see which big companies CEOs going public events to comment on candidates (such as recently on Elizabeth Warren). See her position in swing states. What people tweet. What they share on Facebook. See her policies. Which areas of the market they would affect.
- Trump didn’t win bcs he is da man, he won bcs Hilary sucks. Check closely people’s sentiments and always remembers POLLS ARE FIGURATIVELY BS.
- Plot equity market and fixed income market returns with different news:
Trade talks
Trump tweets (both negative and positive but separate)
See generally how many percentage points and effects on yield. Whether systematic and show behavioural pattern or no).
- Saudi Aramco IPO
See how much Saudi has been investing in renewable and sustainable energy
See how other sectors of their economy is performing
See price movements
See to what extent people care that MBS is a douchebag
- Let’s say I am worried a bit about the economy going south
Have a portion in consumer staples. Companies with diversified products that cater to different socioeconomic groups. See their return and how they usually do during bad periods of the economy. See who their CEO is and follow the changes they’re making in their supply chain
High-quality bonds that tend to perform well in a recession period but tend to bounce up well after
Maybe just a tiny portion of equities that bring higher yield but make sure that they have excellent management and not very exposed to cyclicality. Dividends?
Put the percentage that I want from my overall portfolio. Calculate the return I am getting from every single one. My exit price. Then change accordingly.
- Analysis on avocado as a theoretical basis
Avocado nation dependent on eating avos
Millenial idiots increase demand–> prices up
Too expensive for avo nation –> find substitute BUT– what is it?
To what extent the supply and demand of sub product increased?
Which industries dependent on it sub product? Is there foreign demand?
Where also produced? If it needs a specific climate– affected by climate change?
Price and production in those countries
Effect in supply chain
- Be careful with beta! Same industry- company X can have lower EBITDA than company Y and yet have a lower beta. Can be misleading so always look at financials.
- Income statement is BS. Can be manipulated easily. Best is balance sheet and cash flow. Keen focus on balance sheet to make sure everything makes sense.
Oil prices:
Slowing down economic growth
Middle east tension
Changing emission standards
Trade war with China
- china important market for US oil exports à go to iran
- à oil industry capital intensive à china equipment à steel china cheaper à impact budgets
Venezuela à oil is part of the nation, highly corrupt state, decrease
Saudi arabia à oil part of religion
Gold prices:
-No deal Brexit, china trade war à Uncertainty à high volatility à gold safehaven
China trade war à FED”uncertainty” à monetaru policy [interest rates] à consumer demand and investment à demand US dollar down à gold prices up
ALSO
China trade war à higher prices producers à higher prices for consumers à less demand US dollar —
– political uncertainty
-china trade deal
-speculation [recession or not?] àStrength of US dollar
Factors affecting bond prices:
Interest rates ?????? [see paper]
Again, china trade war.. lower interest rates higher bond prices
BUT
Limits to monetary policy …interest low for a long time à slower growth with higher inflation
FED responsibility is to control inflation
Ayah Shahin 