Noteworthy this week
- Korea bans short-selling
- Apple & Microsoft are 14.4% of the S&P 500
- Buffett has been selling since 4Q22
- This rate cycle will be different?
- The aftermath of We(DON’T)Work
Korea bans short-selling: The ban on short-selling stocks is said to last at least until June 2024. The reaction from the market was that the Korean Tech index jumped >10%. Regulators stepping in to trick with the market mechanics, what could go wrong?!
KOREAN TECH STOCK INDEX IS NOW UP ALMOST 12% TODAY AFTER SOUTH KOREA BANNED SHORT SELLING
— GURGAVIN (@gurgavin) November 6, 2023
Apple & Microsoft are 14.4% of the S&P 500: This is the highest weight in the index for the top two stocks since 1980. Before the dot-com bubble burst, the top two stocks accounted for <10%.
The top 2 stocks in the S&P 500 (Apple & Microsoft) now represent a combined 14.4% of the index, the highest weighting for any two companies with data going back to 1980. pic.twitter.com/M75Vpa3lo4
— Charlie Bilello (@charliebilello) November 8, 2023
Buffett has been selling since 4Q22: The famed investor has been a net seller of stocks for the past four quarters.
Warren Buffett’s Berkshire Hathaway continues to sell stocks. Conglomerate offloads more than $5bn worth of US & international shares. Filing indicated the company sold >12mn Chevron shares before it bought Hess for $53bn in an all-stock deal last month. The value of Berkshire’s… pic.twitter.com/7J3n1CN731
— Holger Zschaepitz (@Schuldensuehner) November 5, 2023
This rate cycle will be different?: Rates are predicted to be lowered slowly when inflation is under control. However, central banks tend to break things and then start cutting fast and furious to undo their own making.
When central banks need to cut rates, they need to cut quickly and a lot. What are the odds that this time it will be an orderly and granular process? pic.twitter.com/maeZLnMDED
— Michael A. Arouet (@MichaelAArouet) November 4, 2023
The aftermath of We(DON’T)Work: WeWork still has 700 locations worldwide. How will the company’s bankruptcy impact Commercial Real Estate?
JUST IN: Bankruptcy documents show that WeWork, $WE, will immediately break 40 office leases in New York City.
Documents also show that WeWork plans to break leases on 70 properties in New York City.
The worst part?
40 of these locations are completely empty.
This comes less… pic.twitter.com/s2em5FdiDl
— The Kobeissi Letter (@KobeissiLetter) November 7, 2023
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Weekly market performance
Chart of the week
Discussed in the Become a Better Investor Community this week
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Podcasts we listened to this week
The Investors First Podcast – Aswath Damodaran: Unmasking ESG
“Today we host Professor Aswath Damodaran, where we speak about how Aswath gained his love for teaching and how it led to him becoming an expert in valuation. The episode quickly veered into a sharp critique of the shortcomings of ESG investing.”
Readings this week
What is Stoicism? by John Sellars
“In what follows I want to set out some key ideas in Stoicism. My aim is to say something about the philosophical ideas that stand behind all those inspirational quotes from Seneca and Marcus Aurelius that circulate on the internet. What are the foundational principles of Stoicism as a philosophy?”
Same as Ever: A Guide to What Never Changes by Morgan Housel
“When planning for the future we often ask, “What will the economy be doing this time next year?” Or, “What will be different ten years from now?”
But forecasting is hard. The important events that will shape the future are inherently unpredictable.
Instead, we should be asking a different question: What will be the same ten years from now? What will be the same one hundred years from now?”
Audible is great; have you tried it? If not, click here to get 2 books for free.
Memes of the week
— Declaration of Memes (@LibertyCappy) November 8, 2023
— What Is It Like to Be a Philosopher? (@CliffordSosis) November 4, 2023
New My Worst Investment Ever episodes
ISMS 34: Larry Swedroe – Consider All Hidden Costs Before You Invest
In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this eleventh series, they discuss mistake number 20: Do You Only Consider the Operating Expense Ratio When Selecting a Mutual Fund? And mistake number 21: Do You Fail to Consider the Costs of an Investment Strategy?
LEARNING: Don’t focus solely on the operating expense ratio when buying a mutual fund; consider hidden costs, too. Always consider the costs of an investment strategy, such as bid-offer spreads, market impact costs, taxes, etc.
Ep747: Chong Ser Jing – Pay Attention to What Drives Business Results
BIO: Chong Ser Jing is the Portfolio Manager and Co-Founder of Compounder Fund, an investment fund that invests in stocks around the world.
STORY: In October 2010, Ser Jing bought six stocks. Two of these were companies in the oil industry. By the time he was selling these stocks, he had a loss of 77% and 31% from the two companies, respectively.
LEARNING: Some sectors may not be worth investing in because they tend to historically generate poor returns on invested capital. Pay careful attention to the drivers of a company’s business results. Understand the difference between internal and external drivers.
Ep746: James M. Dahle – Don’t Buy More Insurance Than You Need
BIO: James M. Dahle, MD, is a practicing emergency physician who took an interest in personal finance and investing in residency after getting ripped off by every financial professional he came into contact with. He founded The White Coat Investor in 2011 to help fellow docs get a fair shake on Wall Street.
STORY: James got sold a whole life insurance policy in medical school. He invested in it, thinking it would be a good option, only to realize seven years later that it was not. When he pulled out of the policy, he lost 33% of the premiums he had paid.
LEARNING: You must understand anything you buy. Don’t buy more insurance than you need. Focus on one catastrophe-related insurance product that’s reasonable.
Published on Become a Better Investor this week
Most of the time, variation between students or workers is the result of common cause situations, but sometimes you find folks who consistently aren’t performing at the same level. Does more punishment work? What should you do instead? In the episode, David Langford and host Andrew Stotz discuss how managers (or teachers) should approach these “special cause” situations.
Beijing Tongrentang Company Limited (600085 SH): Profitable Growth rank of 5 was up compared to the prior period’s 6th rank. This is average performance compared to 380 large Health Care companies worldwide.
Mega Lifesciences Public Company Limited (MEGA TB): Profitable Growth rank of 1 was same compared to the prior period’s 1st rank. This is World Class performance compared to 390 medium Health Care companies worldwide.
Eco World Development Group Berhad (ECW MK): Profitable Growth rank of 5 was up compared to the prior period’s 6th rank. This is average performance compared to 310 medium Real Estate companies worldwide.
Radiant Opto-Electronics Corporation (6176 TT): Profitable Growth rank of 4 was down compared to the prior period’s 3rd rank. This is above average performance compared to 660 large Info Tech companies worldwide.
DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.