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


Popular posts from this blog

10k Words | August 2022

Feel the Cash Burn as Profit Season Closes (or "In memory of Pocketmail")

Where was the EPS uplift?

Disclaimer

Nothing in this blog constitutes investment advice - or advice in any other field. Neither the information, commentary or any opinion contained in this blog constitutes a solicitation or offer by Equitable Investors Pty Ltd (Equitable Investors) or its affiliates to buy or sell any securities or other financial instruments. Nor shall any such security be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.

The content of this blog should not be relied upon in making investment decisions.Any decisions based on information contained on this blog are the sole responsibility of the visitor. In exchange for using this blog, the visitor agree to indemnify Equitable Investors and hold Equitable Investors, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to legal fees) arising from your use of this blog, from your violation of these Terms or from any decisions that the visitor makes based on such information.

This blog is for information purposes only and is not intended to be relied upon as a forecast, research or investment advice. The information on this blog does not constitute a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Although this material is based upon information that Equitable Investors considers reliable and endeavours to keep current, Equitable Investors does not assure that this material is accurate, current or complete, and it should not be relied upon as such. Any opinions expressed on this blog may change as subsequent conditions vary.

Equitable Investors does not warrant, either expressly or implied, the accuracy or completeness of the information, text, graphics, links or other items contained on this blog and does not warrant that the functions contained in this blog will be uninterrupted or error-free, that defects will be corrected, or that the blog will be free of viruses or other harmful components.Equitable Investors expressly disclaims all liability for errors and omissions in the materials on this blog and for the use or interpretation by others of information contained on the blog.