Skip to content
Learning that drives better investment decisions

Become a Better Investor Newsletter – 27 April 2024

|

Noteworthy this week

  • Bonds only diversify under low inflation
  • Japanese earnings almost 2x the US
  • The MMT inflation train
  • Central banks load up on gold
  • AI demands power

Bonds only diversify under low inflation: Bonds are a good hedge for stock investors only if core inflation is predictably below 3%.

Japanese earnings almost 2x the US: Japanese companies barely grew EPS from 2000 to 2010. But since then, the EPS of the biggest 500 Japanese stocks has increased by 5.8x over the last 14 years, almost twice the rate of their American peers.

The MMT inflation train: Modern Monetary Theory (MMT) proponents often say that a public sector deficit is a private sector surplus. Well, yeah. A surplus of money. That’s why it’s inflationary.

Central banks load up on gold: China acquired over 225 tonnes of the metal alone last year. In 2022 and 2023, world central banks bought 1081 and 1037 tonnes of gold, respectively. Before 2022, there was never a year in history with 1,000+ tonnes of central bank gold purchases.

AI demands power: Power demand from major technology companies has increased 8x in the last 10 years, and AI developments are likely to drive this further.

Join the world’s toughest valuation training

Become a Valuation Expert. Valuation Master Class Boot Camp graduates can confidently value any company in the world and possess in-demand industry skills.

Click here to learn more.

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

“In case you have missed today’s Become a Better Investor community live session, click here to access the presentation. We had an exciting discussion about the correlations across asset classes and regions.”

Try 1 month of the Become a Better Investor Community for FREE today!
You can cancel at any time. Click here to learn more.

Podcasts we listened to this week

The Diary Of A CEO with Steven Bartlett – Jimmy Carr

“Learn the lessons behind the laughter, learned from over 20 years in the world of comedy. Jimmy Carr is an award-winning comedian, writer and TV host for shows including, ‘8 Out Of 10 Cats’, ‘Roast Battle’, and ‘Big Fat Quiz Of The Year’. In this conversation Jimmy and Steven discuss topics such as, why we don’t think about death enough, how to speak so people listen, the power of imposter syndrome, and how to find out what you want to do in life.”

Listen on Apple or Spotify.

Readings this week

Valuation Multiples: What They Miss, Why They Differ, and the Link to Fundamentals

“Most investors “price” the stocks of companies by using valuation multiples instead of “valuing” them based on future cash flows and fundamentals. This report addresses what valuation multiples miss and why they have become less informative.”

Read research paper

Book recommendation

Marcus Aurelius: The Stoic Emperor (Ancient Lives) by Donald Robertson

“This novel biography brings Marcus Aurelius (121–180 CE) to life for a new generation of readers by exploring the emperor’s fascinating psychological journey. Donald J. Robertson examines Marcus’s relationships with key figures in his life, such as his mother, Domitia Lucilla, and the emperor Hadrian, as well as his Stoic tutors.”

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

Ep782: Chris Ball – If They’re Not 100% Right, Don’t Hire Them

BIO: Chris Ball started his career in 2004 as a tax adviser with KPMG LLP. He then transitioned and founded Hoxton Capital Management in 2018. The group’s sole emphasis is helping HNW and UHNW clients with borderless global financial advice. Chris’ specialty is assisting individuals with their retirement planning needs.

STORY: When Chris started his career young and fresh, he got into spread betting. That didn’t go so well, and he lost 10,000 pounds, which was a lot of money in 2008. In terms of business, he wasted over $750,000 on bad hiring decisions.

LEARNING: Don’t enter markets that you don’t understand. If someone is not 100% right, don’t hire them.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

In this episode, Bill Bellows and host Andrew Stotz discuss seeing organizations as holograms—3D images. Holograms show all parts from different views at once. Learn how using the lens of the System of Profound Knowledge lets you see the problems and opportunities for transformation.

Listen to Organizations are Holograms: Awaken Your Inner Deming (Part 18)

Johnson & Johnson (JNJ US): Profitable Growth rank of 1 was up compared to the prior period’s 2nd rank. This is World Class performance compared to 380 large Health Care companies worldwide.

Read Johnson & Johnson – World Class Benchmarking

Sinovac Biotech Limited (SVA US): Profitable Growth rank of 8 was same compared to the prior period’s 8th rank. This is below average performance compared to 400 medium Health Care companies worldwide.

Read Sinovac Biotech – World Class Benchmarking

Pfizer Incorporated (PFE US): Profitable Growth rank of 5 was down compared to the prior period’s 1st rank. This is average performance compared to 380 large Health Care companies worldwide.

Read Pfizer – World Class Benchmarking

AstraZeneca PLC (AZN LN): Profitable Growth rank of 4 was down compared to the prior period’s 3rd rank. This is above average performance compared to 380 large Health Care companies worldwide.

Read AstraZeneca – 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.

Posted in Newsletter