What I read today October 26, 2020
Another story in the value vs growth investing annals. A 30 year old $10 billion value investing fund is shutting down ($).
Although he is shutting down, Mr. Aronson is convinced value investing isn’t dead. When will it come back to life? “All records have been broken, so past experience is meaningless,” he says—“except in knowing the drought will end.” He bears down hard on the word “except.”
Aronson references 2016 as the year that growth really started to pull away. We’ve touched on it before how the traditional metrics that define value stocks tend to lead to an underweight in technology as well as in disruptors within industry groups (see WIRT August 14th). I think it’s a combination of that plus the increasing importance of intangible assets that has created some real structural changes in what works in investing.
“It’s amazing how being long intangibles, short human beings has been such a winning trade -- not just this year, but for quite a while,” said Jared Woodard, the head of the Research Investment Committee at Bank of America. “Right now we have an economy structured to reward these asset-light business models.”
If you want more a deep-dive look at Prof. Aswath Damodaran’s recent posts on value investing.
We covered the NYT’s success in pivoting to Digital. Contrast that to the WSJ where Buzzfeed reported on a leaked internal report showing their issues in growing their digital subscriber base and issues covering race.
“Here’s the bottom line: if we want to grow to 5.5 million digital subscribers, and if we continue with churn, traffic and digital growth about where they are today — it will take us on the order of 22 years,” the report reads.
Yale’s endowment taking a more prominent line on diversity in fund management ($).
A decision making framework from A16Z. MBAs love a 2x2 matrix, I sort of like the simplicity of this one for trying to take a top down view.
The big news for cryptocurrency last week was Paypal going to start allowing users to buy and sell on its platform. With bitcoin around the $13k mark payment platforms have been keen to get in on the action where there are still good fees to be made helping users buy and sell.
More on OpenAI GPT-3. This time it wrote the screenplay to a short film, and it’s weird but actually probably better than most film students efforts!
A NY restaurant accidentally served a $2000 Mouton 1989 to a young couple who had ordered an $18 Pinot Noir. The irony was that the table of businessmen that accidentally received the Pinot Noir didn’t seem to notice the difference.
Travel influencers and authoritarian regimes. Covid’s taken away a lucrative line of work for influencers.
Should we be surprised that influencers are buying empty shopping bags to pretend they’re rich?
But influencers have a big potential payday lined up with live shopping. Anyone who remembers daytime TV and home shopping channels will be amazed that we’ve gone full circle.