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Become a Better Investor Newsletter – 18 May 2024

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Noteworthy this week

  • China replaces UST with gold
  • Meme stonks redux
  • Electricity inflation is the highest in 40 years
  • US small cap debt coming due
  • Magical PE vol

China replaces UST with gold: In 1Q24, China sold a record amount of US Treasuries (UST) and US agency bonds to buy gold.

Meme stonks redux: A tweeted image by the “Roaring Kitty” set off a new crazy pump in meme stocks like GameStop and AMC.

Electricity inflation is the highest in 40 years: Energy prices surge as demand is growing from, for example, data centers and AI.

US small cap debt coming due: Small caps have a bigger share of debt coming due in the next 5 years. At the same time, 41% of Russell 2000 companies are not profitable.

Magical PE vol: Institutional investors like private equity (PE) for its low volatility (vol) and high risk-adjusted return. However, the vol is low because the shares aren’t priced regularly, like listed equities.

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Weekly market performance

Click here to see more markets and periods.

Chart of the week

Discussed in the Become a Better Investor Community this week

“We go live today @channel at 6 PM GMT+7. We will continue our dive into the correlations across asset classes and regions.”

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Podcasts we listened to this week

The Morgan Housel Podcast – The Long Run Is Just A Collection of Short Runs

“Take the notion that investors should ignore the short run. It’s important to recognize that the long run is just a collection of short runs, and capturing long-term growth means managing the short run effectively enough to ensure you can stick around for a long time.”

Listen on Apple or Spotify.

Readings this week

Secrets of Family Empires

“Family businesses are at the heart of the world’s economic system – they employ the majority of the workforce and contribute over half of GDP, and even more in many Latin American and some Asian economies.”

Read the article

Book recommendation

Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger

“Poor Charlie’s Almanack draws on Munger’s encyclopedic knowledge of business, finance, history, philosophy, physics, and ethics—and more besides—to introduce the latticework of mental models that underpin his rational and rigorous approach to life, learning, and decision-making. Delivered with Munger’s characteristic sharp wit and rhetorical flair, it is an essential volume for any listener seeking to go to bed a little wiser than when they woke up.”

Get the book on Audible or Kindle.

Audible is great; have you tried it? If not, click here to get 2 books for free.

Memes of the week

New My Worst Investment Ever episodes

Ep784: August Biniaz – Be a Specialist Not a Jack of All Trades

BIO: August Biniaz is the Co-founder and Chief Investment Officer of CPI Capital. CPI Capital is a real estate private equity firm with the mandate to acquire multifamily assets while partnering with passive investors as limited partners.

STORY: Upon looking back and reflecting on the worst investment decision August has ever made, he says it’s his time, shiny object syndrome, getting excited about new investment ideas, and then putting a lot of time into learning about those ideas and losing that time.

LEARNING: Don’t be a jack of all trades and a master of none. Focus on your primary business. Stay in your lane.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

Dr. Deming developed his philosophy over time and in conversations with others, not in isolation. As learners, we tend to forget that context, but it’s important to remember because no one implements Deming in isolation, either. In this conversation, Bill Bellows and host Andrew Stotz discuss how there’s no such thing as a purely Deming organization and why that’s good.

Listen to System of Profound Wisdom: Awaken Your Inner Deming (Part 20)

Guangdong TCL Smart Home Appliances Company Limited (002668 SZ): Profitable Growth rank of 3 was same compared to the prior period’s 3rd rank. This is above average performance compared to 920 large Cons. Disc. companies worldwide.

Read Guangdong TCL Smart Home Appliances – World Class Benchmarking

Sri Trang Agro-Industry Public Company Limited (STA TB): Profitable Growth rank of 10 was down compared to the prior period’s 7th rank. This is poor performance compared to 920 large Cons. Disc. companies worldwide.

Read Sri Trang Agro-Industry – World Class Benchmarking

United Parcel Service Incorporated (UPS US): Profitable Growth rank of 1 was same compared to the prior period’s 1st rank. This is World Class performance compared to 1,420 large Industrials companies worldwide.

Read United Parcel Service – World Class Benchmarking

Zalando SE (ZAL GR): Profitable Growth rank of 2 was up compared to the prior period’s 9th rank. This is World Class performance compared to 950 large Cons. Disc. companies worldwide.

Read Zalando SE – World Class Benchmarking

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.

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