Elon
Michael Cembalest, Michael Mauboussin, Steve Eisman, Larry Cunningham, Hendrik Bessembinder & More
“Stoic detachment combined with emotional awareness is the perfect combination for stocks. Feel the fear, but let reason decide.”
— Joel Tillinghast
Research
J.P. Morgan - The Good, the Bad, and the Ugly (11 pages)
This is a summary of a presentation by Michael Cembalest covering tech valuations, AI, energy and the US Presidential Election.
Counterpoint Global - Cost of Capital and Capital Allocation (23 pages)
Michael Mauboussin analyzes how U.S. public companies acted in the regime of easy money (2009-2021). He emphasizes that companies often use hurdle rates much higher than their cost of capital, and that buybacks will contribute less to earnings per share growth than they did in the period of easy money given today’s valuation multiples and interest rates.
Facts & Figures
The number of bank branches in the U.S. peaked in 2012. Link
Wells Fargo estimates Costco is selling as much as $200 million in gold bars per month. Link
With over 17,000 chargers at about 120 warehouses around the US, Amazon is now the largest operator of private electrical vehicle charging infrastructure in the country. Link
J.P. Morgan has more employees in Texas than Florida. Link
Real estate tycoon Truong My Lan was sentenced to death in Vietnam's largest financial fraud case ever. She was accused of fraud amounting to $12.5 billion - nearly 3% of the country's 2022 GDP. Link
In the last two years, overseas purchases totaled over 2,800 tons — more than all of the metal that backs exchange-traded funds around the world, or about a third of the stockpiles held by the US Federal Reserve. Link
The majority of the top 100 performing stocks in the MSCI AC World Index over the last 10 years have been less than $50B in market cap. Link
China’s stock market is less developed as a percentage of GDP. Link
Robeco breaks out forward earnings yield for different value quintiles in the U.S. and abroad.
Podcasts
In Good Company: Elon Musk: AI, Space, free speech, leadership and hardcore: Elon Musk talks with Nicolai Tangen about AI, Twitter, free speech, the future of space, and more. [4/9/2024 - 46 minutes] Apple | Spotify | YouTube
The Compound & Friends: Warren Buffett’s Margin of Safety: Larry Cunningham shares how he developed a relationship with Warren Buffett, corporate governance, ESG, and more! [3/1/2024 - 95 minutes] Apple | Spotify | YouTube
Odd Lots: Steve Eisman on the Three Big Macro Stories of Our Time: Eisman covers the three dominant macro stories today: AI, infrastructure and crypto. He thinks the first two may last a long time, but rejects crypto. [4/5/2024 - 48 minutes] Apple | Spotify | YouTube
What Else Is Happening
Did you miss last week’s email?
Meb Faber spoke with Hendrik Bessembinder about power laws in public markets.