10k Words - July 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. 

Bank of America has charted the phenomenal amount of capital flowing into equity markets. It's also a bull market for used cars, Bloomberg reminds us. The Financial Times sets out China's economic development through time. Then we get back to equities with Morgan Stanley highlighting a spread between large and small cap valuations in the US that Equitable Investors also identifies in Australia. BCA Research charts the extraordinary rise of loss making businesses as IPOs. Finally, lower multiple stocks generated the greater returns in FY21, based on Equitable Investors' number crunching.


June half annualised inflow to equities was largest ever


Source: Bank of America


June half annualised equity inflows greater than prior 20 years

Source: Bank of America


US used car prices

Source: Bloomberg, BLS

Historical perspective on China's economic growth

Source: Financial Times

Forward PE on US large caps has opened wide spread on small caps


Source: Morgan Stanley


Trailing P/E on ASX large caps has opened wide spread on small caps

Source: Iress, Equitable Investors

Share of IPOs with Negative Earnings

Source: @Scutty, BCA Research

Stocks on lower multiples averaged higher returns in FY21 for ASX micro-to-mid caps

Source: Sentieo, Equitable Investors


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