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Become a Better Investor Newsletter – 29 April 2023

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Noteworthy this week

  • Yield curve dynamics
  • Overcrowded China reopening trade
  • Gold has outperformed miners
  • Solar energy waste
  • China bets on nuclear

Yield curve dynamics: Good explanatory thread on how yield curves change during various market regimes. Click on the picture below to read the thread on Twitter.

Overcrowded China reopening trade: Starting off 2023, fund managers were bullish on the China reopening. Looking at the Chinese stock market performance, it has underperformed the US.

Gold has outperformed miners: Your expectation of gold miners’ performance is like being leveraged gold. With a shorter investment horizon, miners can still be a good trade. In the long run, holding gold rather than miners appears to be better.

Solar energy waste: We need a more nuanced view of future energy sources. “Green energy” is not as unproblematic as its proponents claim. Click on the picture below to read the thread on Twitter.

China bets on nuclear: China is set to massively increase its nuclear power capacity in the next four decades. Maybe the West should take note?

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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

“Many Community members asked us to add Vietnam to the market cheat sheet.

Due to some data constraints, we had to aggregate the data bottom-up. It was a lengthy process to get it done, but we are very happy that we were finally able to make this addition.”

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You can cancel at any time. Click here to learn more.

Podcasts we listened to this week

The Morgan Housel Podcast – Your Money and Your Family

 “How do you avoid spoiling kids? How do you and your spouse learn to agree about the best way to spend?”

Listen on Apple or Spotify.

Readings this week

Limited Hedging and Gambling for Resurrection by U.S. Banks During the 2022 Monetary Tightening?

“These actions are reminiscent of classic gambling for resurrection: if interest rates had decreased, equity would have reaped the profits, but if rates increased, then debtors and the FDIC would absorb the losses.”

Read the paper

Book recommendation

Central Banking 101 by Joseph J Wang

“Central banking is magic. With a few words, the Fed can lift the stock market out of desperation and catapult it towards euphoric highs. With a few keystrokes, the Fed can conjure up trillions of dollars and fund virtually unlimited Federal spending. And with a few poor decisions, the Fed can plunge the entire world into a recession. The Federal Reserve is one of the most powerful institutions in the world, and also one of the most difficult to understand.”

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

ISMS 22: Toyota vs. EV Extremists Who Is Right?

What’s interesting about Toyota is that if you buy today, you get its future growth for free

Download the PDF with all charts and graphs

Access the episode’s show notes and resources

Ep678: Guillermo Cornejo – Don’t Underestimate the Value of Experience

BIO: Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.

STORY: Guillermo had an insurance company handling claims for his customers. When he realized the insurance company had a 50% profit margin, he decided to start his own insurance business. This became a costly and challenging venture because he had no experience handling claims.

LEARNING: Don’t underestimate the value of experience.

Access the episode’s show notes and resources

Ep677: Eugene Ng – Keep Playing the Long-Term Game of Investing

BIO: Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!

STORY: Eugene invested in a three-day course in a bid to accelerate investment learning. The course involved playing a simulated stock investment game. Eugene lost in the early stages of the game due to overconfidence.

LEARNING: It’s okay to make a mistake. Keep playing the long-term game of investing.

Access the episode’s show notes and resources

ISMS 21: CPI Collapsing Across the Globe

Will the global CPI slowdown continue?

Download the PDF with all charts and graphs

Access the episode’s show notes and resources

Ep676: Nick Maggiulli – Don’t Buy Individual Stocks

BIO: Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.

STORY: Nick invested in a stock he wasn’t familiar with just because his friends were doing it. He suffered a 78% loss.

LEARNING: Don’t buy individual stocks. Trust your gut.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

In this, the first in a series of episodes on Awakening Your Inner Deming, Andrew talks with Dr. Bill Bellows about his journey. He started with Taguchi, read his way through other quality “gurus”, and finally found Deming in unexpected places – solving big problems in space shuttles along the way!

Listen to From Taguchi to Deming: Awaken Your Inner Deming (Part 1)

An oil price surge would push end-2023 slightly higher than 4%, but only slightly because it takes a few months for an oil price rise to impact CPI. A US recession could quickly bring CPI below 4%.

Download the PDF with all charts and graphs

Read ISMS 19: 5% March 2023 CPI Could Fall to 4% By Year-End; If Oil Doesn’t Fly

BG Container Glass Public Company Limited (BGC TB): Profitable Growth rank of 8 was same compared to the prior period’s 8th rank. This is below average performance compared to 810 medium Materials companies worldwide.

Read BG Container Glass – World Class Benchmarking

Asset World Corporation Public Company Limited (AWC TB): Profitable Growth rank of 3 was same compared to the prior period’s 3rd rank. This is above average performance compared to 1,000 medium Cons. Disc. companies worldwide.

Read Asset World Corporation – World Class Benchmarking

In this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.

Read ISMS 18: Dave Collum – What Makes Your Investments Good or Bad

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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