Diary of a Financier

Top Newsstuffs (January 19-25)

In Bookshelf on Sun 25 Jan 2015 at 05:28

Top reads from the week that was…

Macro

Rail traffic weekly (Week 2, 2015) | Association of American Railroads (AAR)
Bad week is even worse considering easy yoy comps due to 2014q1’s severe winter weather; momentum from YE14 rally has disappeared:
Weekly traffic: -5.9pp @ -1.0% yoy
Growth rate: -3.1pp @ +1.8% ytd
Carload groups: 5 of 10 posted gains for the week yoy
    Grain: +18.2
    Chemicals: +4.6
    Motor vehicles/parts: +0.8
    Petroleum: +0.4, multiyear boom finally succumbs to law-of-large-numbers amidst oil price crash
    Farm/food: +0.3
    Coal: -0.7
    Metals: -3.3
    Minerals: -4.4
#Bearish #Latent indicator $XLE $USO $XLB $KOL $XME $XLI

Sentiment

Investor sentiment survey (2015.01.21) | American Association of Individual Investors (AAII)
Last week’s spike proves ephemeral as sentiment plummets back below historical norms; a healthy, contrarian signal that grounds the alarming complacency seen in 2014, when continued “buying-the-dip” mentality persisted through multiple market events (e.g. 2 internal corrections & energy bear market):
Bull/Bear ratio: -94bps wow @ 1.20 (under 1.28 historical average & 1.8 extreme high)
Bullish: -9.0pp @ 37.1% (under 39.0 avg & 45 extreme high)
Bearish: +9.3 @ 30.8% (over 30.5 avg & 25 extreme low)
Neutral: -0.3 @ 32.1% (over 30.5 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 6/2015).
[Previously: Retail asset allocations neutral with equities nearing extremes, Fund managers report average risk exposures, Strategist sentiment remains a bullish signal & Recent volatility increases retail’s willingness to buy]
#Bullish

Technicals

Bull & bear market durations (by time & cumulative percent, SPX 1900-2014) | Business Insider
The current bull market Historical bull & bear markets' duration (by time & points)rally is still young by historical standards, especially since the last bear market was in line with the average.
Bull markets:
Current: +212%, 68 months
Historical average: +457.5%, 103.2 mos mean (+193.3%, 77 mos median)
Bear markets:
Great Recession: -50.9%, 16 mos
Historical average: -40.6%, 16.25 mos mean & median
[Previously: The definitive guide to corrections, bull, and bear markets]
#Bullish #Secular #Drawdown

Interests

The state of consumer technology past, present & future (2014) | Ben Thompson (stratechery)
The progression of consumer tech crossed a key threshold with mobile, wherein users took their computers in hand and started using them while walking around the real world. The next era will “bridge the online & offline worlds”…
Three major epochs of consumer computing to date:Epochs of consumer tech
1. PC
2. Internet
3. Mobile
…and three arenas of competition within each:
1. Core technology
2. Operating systems (OS)
3. Killer usage case: for both communication & work/productivity; other uses (like entertainment) don’t lead to big, important winners
The next epochs:
1. Sharing economy: “Uber’s core technology has long term potential to be the physical network that connects everything”
2. Messaging (WeChat): “currently leveraging their platform to push applications, particularly games, and making money on the back end. In the future, I expect [messaging] to be a major channel for direct marketing between companies and consumers… they render the underlying mobile platform unimportant… similar to the effect of the Internet on the PC [that allowed the iMac’s comeback & Chromebook’s rise]”
3. Virtual & augmented reality (Oculus Rift):bridge the online and offline worlds”
4. Protocol (Blockchain): PCs had the internet, but smartphones haven’t settled into a mobile standard for networking communication; the movement seems to be a regression from yesteryear’s radically open web towards securely encrypted, decentralized, peer-to-peer sharing
#Monetization #B2C #Internet of Things (IoT) #VR #AR #P2P $BTC

Collective knowledge systems | Chris Dixon (cdixon, Andreessen Horowitz)
“One of the major startup opportunities of the information age is: now that more than two billion people have internet-connected devices, how do we create systems to efficiently share and store their collective knowledge?”
Requirements for successful “collective knowledge” systems include:
1. Incentive: users contributions need to be incentivized
2. Quality & quantity: qualified users are necessary to make the system smarter and bigger (i.e. network effects & economies of scale)
3. Quality control: defend the system from users with malicious intent
#Crowdsourcing #Wiki

–Romeo

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