10k Words - April 2021

Apparently, Confucius didn’t say “One Picture is Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in advertisements on the sides of streetcars. Even without the credibility of Confucius behind it, we think this saying has merit. Each month we share a few charts or images we consider noteworthy. 

It is well established now that retail trading activity in Australia and the US has surged in the March quarter, as shown by the NY Times, but is there a pull-back underway as data from retail broker website activity sourced from SimilarWeb indicates? Hedge fund Archegos learned the hard way what many CFD punters know and the FT (via bespoke) has highlighted - if you keep leveraging up when you're winning, a pull-back in the underlying investments will hurt. Turning to crypto for a moment, Bianco Research highlighted that the market value of cryptocurrencies has pulled alongside the equity value of US banks. With "inflation" back in the investor vocab, we look at a run-down of asset class performance during the high inflation of the 1970s via @soberlook. Taking a different slant on what current valuations mean, @jsblokland charts the duration (the amount of time over which an investment pays off) of a classic 60/40 equities/bonds portfolio. Finally, looking at some of the oddities that have come out of the COVID-19 epidemic, Deutsche Bank shows a sharp decline in the birth-rate in France and Bianco Research a sharp rise in used car prices in the US.

Trading volume in the smallest US stocks surged in the March quarter

Source: New York Times, FIRA

Average daily website traffic per week to US brokers

Source: WSJ, Similarweb

Total website visits to hotcopper.com.au (blue line) & commsec.com.au (orange line)
Source: Similarweb, Equitable Investors

How Archegos could have come unstuck - maintaining 5:1 leverage

Source: FT, Bespoke Investment Group

Cryptocurrency market value pulls alongside equity value of US banks
Source: Bianco Research, coin.dance, S&P. Bloomberg

Asset classes that performed best in high inflation environment of 1970s
Source: @SoberLook et al

Estimated duration of the classic equities/bonds portfolio
Source: @jsblokland, St Louis Fed, Bloomberg

Live births in France - year-on-year % change
Source: Deutsche Bank

Used car prices
Source: Bianco Research, Bloomberg, Manheim Auctions

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