three weeks after the president rekindled the trade war with China, sending the Dow into a 4% tailspin, traders are growing increasingly impatient for their dose of White House succor. Where is it?
There is literally no incentive for the Federal Reserve to intervene after a 4% correction. They’ve exited their market distorting QE efforts, already announced QT will end in about a quarter & now President Trump owns the stock market narrative.
A big part of the purpose of the Trump tax cuts was to let the economy run hot to where wages were improving & he had a big cushion he could use to put the screws to China to force a more favorable trade deal. However the Federal Reserve used the economic strength to justify lifting rates.
Many states & local governments also lifted income taxes to fund underfunded pension plans. In many areas the state & local increases more than offset the Federal rate declines.
So now there is rising input costs, disrupted supply chains, net tax rates that are flat to up, faltering stock markets, & inverted yield curves. What’s more, the Federal Reserve engaging in QT & lifting rates has been a large part of why the stock market has went nowhere over the past year and a half. So that means lower capital gains driven tax revenues, which when combined with higher interest expense on servicing the debt have blown out the deficit.
That view is perhaps cynical, but a decade ago it was the financial economy that was saved while the actual economy was allowed to burn to the ground.
And now that Trump owns the market, the bubble fomenting arsonists at the Federal Reserve would prefer to remain in the background & wait until such a crisis emerges that they can don the firefighting suit & claim they saved the world.
So the market probably has at least another 10% to the downside before there is any serious jawboning to presage any further non-market interventions.
“Ninety five percent of spot bitcoin trading volume is faked by unregulated exchanges, according to a study from Bitwise this week. The firm analyzed the top 81 crypto exchanges by volume on industry site CoinMarketCap.com. They report an aggregated $6 billion in average daily bitcoin volume. The study finds that only $273 million of that is legitimate.”
Facebook aims to burrow more deeply into the lives of its users. It is building a type of checkout option that consumers could use on other websites, some of the people said. Similar to how a Facebook profile can be used to log into hundreds of websites (including The Wall Street Journal), Facebook envisions allowing those credentials to be selected as a payment method when users buy goods online. … One idea under discussion is Facebook paying users fractions of a coin when they view ads, interact with other content or shop on its platform—not unlike loyalty points accrued at retailers, some of the people said. … It is also working to tie online purchases more closely to ads.”
The idea of using cryptocurrencies for regular day to day purchases is still for the most part unrealistic unless they have that sort of loyalty program incentive bonus integrated with them.
“As of the date [April 30] I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totaling approximately $2.1 billion, representing approximately 74 percent of the current outstanding tethers.”
Volatility is the main reason people invest in & believe in cryptocurrencies.
The transaction fees are more than a bit overwhelming. E-trade may soon offer cryptocurrency trading, but they’d mostly appeal to daytraders & daytraders would need much tighter spreads than what something like Coinbase offers.
The following shows why cryptocurrencies are utterly horrible in terms of transaction costs. As of about an hour ago Coinbase would buy a Bitcoin for $7,993.35 though they would also charge a $119.10 fee, driving that buy price down to $7,874.25. The same service would sell a Bitcoin for $8,073.37, with an additional bonus fee of $120.29, bringing the cost to $8,193.66.
If you average together the buy & sell price it comes to $8,033.96, with a $319.41 spread. That means if you invest $8,000 at a time, you are getting clipped for a 1.99% spread in each direction each time you trade.
How much more ridiculous do those fees get if you are dealing in smaller sums? Do they go from 2% in each direction to 5%? And what convenience do they provide over cash that offsets the massive conversion fees & the headache of dealing with the accounting of gains and losses on all those FX transactions.
The spreads are much better if you use Coinbase Pro. For a similar transaction fee you could put through a $50,000 transaction & the spread outside of that fee is frequently only a dollar or two.
I am a bit surprised they haven’t damaged their brand with what a rip off their core platform is relative to the rates available on their pro subdomain. Even so, the PRO user interface would probably overwhelm most people who’ve never traded financial instruments.
A person who was willing to hold a small amount of inventory could probably run a decent arbitrage business creating something like the core Coinbase site while buying & selling off the PRO subdomain.
Price up. Volume up.
Though the critical question remains: is any of it real?
Roku smashed their quarterly numbers, which led to a big pop at open yesterday & the stock was up over 25% on the day. They are winning on top of winning, with revenue per user up, users up, and users using their service more and more.
Zillow reported quarterly numbers which beat expectations & have their stock up about 6% today in spite of the market sliding on the trade war narrative.
I’m not seeing how the Zillow numbers were good. Their core high-margin business continues to decelerate.
their core (high-margin) Premier Agent business was up 2% YoY from $213.7 million to $217.7 million
in prior quarters they claimed slowing growth in this business line was from shifting the business model from selling email leads to selling a mix of email & phone leads
I still see Zillow as having strong value that would be nearly impossible to recreate for less than the cost of buying the company outright. But you would think they would have more growth in their core Realtor-focused ad products given how dominant they are in their category.
Uber opened down about $3 below their IPO price of $45 a share. The wave of startups adding to the stock market could adversely impact aggregate share scarcity.
If this was just about economic growth, the S&P 500 this cycle would have peaked around 1,850, a thousand points lower than where we are now. … What has been the driver is this near-perfect symmetry we have seen: between a US$4 trillion expansion of the Fed’s balance sheet, a US$4 trillion surge in corporate debt, and US$4 trillion in share buybacks. By creating scarcity in the market for safe securities this cycle, investors were forced to move up the risk curve and this meant tremendous opportunity for CEOs and CIOs to issue gobs of debt to receptive yield-starved investors. And this debt, or at least 25 per cent of the new issuance, went to fund an unprecedented wave of share buybacks.
If the trade war goes astray, it could be a market top for some period of time, particularly if Uber has already seen their high.
“Gulf money is notoriously late to the party, purchasing Carlye Group in 2007 at the peak of the credit bubble, and anchor investors in Glencore IPO in 2011 at the peak of the commodity bubble. Now they are “all in” on Uber and opened offices in Silicon Valley to do more. … When the leading company in the hottest sector goes public, it reflects a peak in social mood and usually presents an important inflection point in financial markets. As a rule, insiders sell at the top. … The AOL Time Warner merger in 2000 culminated in the tech crash, the Blackstone IPO in 2007 presaged the 2008 meltdown, and the Glencore listing in 2011 marked the peak in the commodity super-cycle. Uber, we believe, will mark the peak in Silicon Valley and tech valuations.”
Those who expressed confidence in adverting a trade war based on the (bogus) constructive commentary get to wake up some presidential weekend Tweets stating otherwise.
There’s a very difficult problem with China and the trade situation: They have structured their entire economy around cheating and embedded it into the Community Party, which has top-level control over all of it.
Trying to change that is likely a bridge too far; it would require the Chinese Communist Party, and Xi himself, to acknowledge that (1) what they were doing was and is wrong and (2) they’ll cut it out.
The second you might get. The first you won’t get.
Communists are never wrong, you see. They can’t be. To admit so is to admit their political and economic system is wrong and therefore that other competing ideas might be superior. Down that road lies their own death and they know it.
pension funds are significantly underfunded & they roughly need to get about a 7.5% return to meet cashflow obligations
pensions tend to prefer the credit markets to the stock market & use leverage to drive further incremental gains over the yield on a particular bond
many companies issue debt into the hungry bond market & use the funds to buy back shares, goosing earnings per share by lowering the denominator with a lower share count
it is hard to outperform the stock market index with active management at scale & many active managers are short the market, driving further underperformance
it is much easier to outperform in bonds during a bull market by simply buying lower quality debts at higher yield, which works until it doesn’t.
the Detroit bankruptcy changed the actuarial assumptions for public pension plans because pensioners did eat a loss. thus state & local tax increases ramped significantly, which more than offset the much heralded Trump tax cut
market volatility dissipates & the market returns its grind ever higher until at some point pension plans ask to cash out of a particular issue & are unable to, which drives a rush for the exits.
the above sort of cycle has driven bubble after bubble. so far this century we have had bubbles in:
telecom / internet / information technology, which caused the Federal Reserve to lower rates, thus igniting
residential real estate / housing, which caused the subprime bubble crash after they began raising rates, which then led to large scale balance sheet expansion, which then led to a bubble in
commodities, in particular debt associated with oil fracking & then a commodity price decline, …
and now some sectors of commercial real estate
individual investors have favored ETFs over mutual funds, but largely that move has been a wash. most of the net buying of stock since the recovery has been from buybacks from companies.
he believes a while after yields invert there will be an LBO spree which will drive the final blow off top
in the next crisis pension plans are perhaps going to be more likely to receive a bailout than banks were in the last crisis
the pension-driven bubble cycle is likely only to end if we go from defined benefit pension plans to defined contribution pension plans
Scientific Games (SGMS) reported earnings & the market reaction was beautiful with a powerful short squeeze causing the stock to jump 15%. I figured they were going to have a positive reaction to their earnings announcement, if for no other reason the ability to shift narrative.
Scientific Games has been beaten down for the past year & I figured even if they bombed the numbers the narrative shift would carry the day.
Last week I put most of my liquid savings in a low-yield Vanguard bond fund so I would sort of ignore the stock market & focus on other stuff, so I only put a tiny position on just before close yesterday using a bit of money that was in my IRA to quick flip Scientific Games around the quarterly results.
The short squeeze is still going with the stock up over 19% now, so I certainly sold too soon, but it will likely trend down later in the day as shorts finish covering & new shorts re-engage.
The trade war ending has already been priced into the market, which is part of why the market has tanked for the last couple days after another round of Trillion dollar Tweets.
When the market sold off Monday I sold off the VIRT position I had recently established.
By close of Monday the stock market made up most of its losses & then today was once again down.
There are lots of obvious first-order impacts of the trade war. A slowing Baidu (BIDU) now trades for about a 15x P/E on fears of slowing down of the Chinese economy & potential capital flight from foreign investors if the trade war accelerates & supply chains move.
Today US federal government bonds & muni bonds are up. However most of the market is down.
There are also defensive sectors which can turn very much non-defensive if market behavior shifts enough. For example, if a market sell off continues it could not only project a recession, but it could cause one. That, in turn, would likely lead to an electoral landslide for the Democrats. That, in turn, would lead to some defensive sectors like healthcare getting dramatically repriced as some portions of the value chain are grown while others are gutted.
My view on the trade war stuff has been to fade consensus. When everything being perfect is priced in, expect turbulence. Whenever it seems all hope is lost with negative headlines everywhere, become a buyer. If the market is down again tomorrow it might be a decent day to nibble.
I’ll still read about the capital markets daily, but I have found trading quite distractive when considering my daily workflow. I’ve sold most my positions other than WBA, CVS, a REIT & a somewhat negatively correlated stock that tends to outperform when the market craps the bed. In the current market where a flood of IPOS are coming online, I’d hate to be in anything other than low beta stuff unless I was obsessively watching it.
I guess that near constant distraction would be worth it if my investing returns drastically outperformed what I was doing elsewhere, but the capital markets are far more competitive than most other markets. As a newbie it is better to wade into such waters when the central banks are pumping liquidity into the market after a pull back than to either buy beaten down value plays that keep getting more beaten down or diving into some beyond meat IPO pump-n-dump styled elevator price action.
I am the only person in America to have not filed an S-1 to go public this year. I love seeing endless IPO’s, but I know that with IPO’s comes supply and with endless supply comes lower prices (at least generally).
SoftBank Group Corp. is considering audacious fundraising plans, including a public offering of its $100 billion investment fund and the launch of a second fund of at least that size, as it looks to seize on an exploding startup scene, people familiar with the matter said. … Highlighting the need for new funds: Mr. Son recently returned from China, where he negotiated informal deals worth several billion dollars that the Vision Fund doesn’t yet have, one of the people said.
If he & money from Saudi Arabia are existing, who is the next marginal buyer left in the market? I can’t believe the Wall Street Journal published an article with this analogy:
A Vision Fund IPO is the most ambitious of the plans under consideration and would take place after the fund is fully invested, likely by this fall, according to people familiar with the matter. The hope is to create a smaller version of Warren Buffett’s Berkshire Hathaway Inc. —only loaded with young technology companies, many of which have yet to turn a profit, instead of a stable of well-established utilities, insurers and energy companies.
Like Buffett, except the opposite.
Not value-based investments
No large insurance premium float to fuel other investments, but rather a bunch of marked up money-losing companies where the exit is done in part to raise funds to create another pro-cyclical investment vehicle which will likely invest in companies that also compete against the last batch of startups before they get profitable
Blue Apron is now profitable after a couple years as a public company & a 90% slide in their stock price.
Anyone remember CMGI? The Vision Fund feels like a high-stakes liar’s poker version of that. A loose collection of money losing somethings fueled by unrelenting optimism … sold to you.
This sumptuous show last fall at the Hammerstein Ballroom in Manhattan represented the avant-garde not of theater but of Internet hype. It introduced a new home page and ad campaign by AltaVista, the search engine, to about 100 journalists and Wall Street analysts, and laid the groundwork for an initial public offering. AltaVista — prompted by its new owner, CMGI, one of the most successful incubators of Internet companies — promised to take on Yahoo with ”a portal as powerful and immediate as life itself.”
To do so, it would spend $120 million on a new slogan, ”Smart is beautiful.” These days, that strategy does not look very smart, and the prospects for the CMGI empire are not very beautiful.
CMGI’s shares are off 91 percent this year, to a value of about $3.8 billion, closing on Friday at $11.94.
And I wasn’t the only one who saw the CMGI parallel
If you lose 50% of your capital base, you have to double your base just to get back to even. If you ride a CMGI down 90% you’ll need a 10-bagger to get to par, excluding the impacts of inflation.
Maybe the market heads higher from here on a China trade deal & the Federal Reserve lowering rates once more to throw fuel on the fire, but I suspect the Fed will first have to see a catalyst to justify throwing more fuel on the fire & at the very least I’d rather wait for such a catalyst before putting much capital at risk.
Which is part of why insiders were buying. CVS is up around 5% in premarket trading today. They beat earnings & revenues, raised full year guidance, outperformed in their retail business & outperformed in their health-care benefits segment.
A month ago they were under $52 a share & a week ago they were still just $52.50 a share. So shares currently trading at $57 have seen a big move & the bottom is almost certainly in.
Provided Bernie Sanders is not elected president (socialized medicine that nixes private insurance also guts the value of CVS’s Aetna) the current share price is still cheap. In Q1 CVS insiders invested hundreds of thousands of dollars buying shares at above $58 a share, so if you buy at open you’d be paying a price insiders felt was a good deal.
When I saw they were down almost $100 a share in after hours trading yesterday I knew today was going to be a down day for the market. You’d just about need a signed deal ending the trade war with China (allegedly resolved one way or the other within weeks) to get markets back up to par after such a key component nose dives.
Google is weighted heavily in key indexes & many tech ETFs
Google is seen as a bellwether. If they can’t get the numbers to work out as well as it looked like they would, then many money losing tech startups that are soon coming to market will have people question how they’re going to get their numbers to work.
Google rarely misses, but they stunk up the joint in Q1 by showing a rapidly decelerating ad growth rate, with the YoY rate decelerating from 26% to 17% in the quarter & operating margins falling from 25% to 18%. Google claimed a big part of the shift was due to changes at YouTube:
“While YouTube clicks continue to grow at a substantial pace in the first quarter, the rate of YouTube click growth rate decelerated versus a strong Q1 last year, reflecting changes that we made in early 2018, which we believe are overall additive to the user and advertiser experience,” Porat said on the company’s earnings call Monday.
If YouTube was the main driver of the miss you would expect to see rapidly slowing click growth & increased cost per click. What we saw in the quarter for Google properties was:
paid clicks (also includes video ad views): up 39% YoY, down 9% QoQ
cost-per-click: down 19% YoY, up 5% QoQ
Ads on search clicks are worth far more than video ad views because there is a lot more expressed intent in searching for a specific keyword than there is in watching a random(ish) YouTube video.
Over the prior 4 quarters Google grew their owned & operated ad clicks about 60% YoY while driving down CPC about 24% YoY. The rapidly decelerating click growth & CPC falling less than it had been would indicate YouTube is perhaps getting closer to ad saturation.
Historically a rising click count at above a 50% rate means massive YouTube ad view expansion, which normally correlates with blended click price being off around 20%. That Google rose their cost per click in the first quarter from the seasonally strong 4th quarter does indicate they’ve slowed down ad growth on YouTube compared against prior quarters.
Prior to the app removals, DO Global had roughly 100 apps in the Play store with over 600 million installs. Their removal from the Play store marks one of the biggest bans, if not the biggest, Google has ever instituted against an app developer.
DO Global is a Chinese app developer that claims more than 800 million monthly active users on its platforms, and was spun off from Baidu, one of China’s largest tech companies, last year. At least six of DO Global’s apps, which together have more than 90 million downloads from the Google Play store, have been fraudulently clicking on ads to generate revenue, and at least two of them contain code that could be used to engage in a different form of ad fraud, according to findings from security and ad fraud researchers Check Point and Method Media Intelligence.
The weakness Google showed in the most recent quarter likely has to do with ad load saturation. They could add another ad unit on desktop search results, but key categories like hotels & e-commerce already stack ads via showing multiple different formats. They have also ramped up YouTube ad load a lot over the past year.
Google’s push of programmatic advertising has led to a greater share of their non owned and operated inventory being low quality garbage clicks like the stuff DO Global was offering.
Leading publishers have reoriented their focus to place more emphasis on subscription revenues & less on advertising. And some of the leading destination sites are not only ad buyers but are also becoming ad sellers.
The software-as-a-service platform may grow into a $100 million business that would bolster the company’s bottom line.
Shailesh Prakash, head of product and information technology at the company, said Arc has expanded its clientele beyond WaPo to include almost every major advertising market in the United States. Its technology powers the Chicago Tribune, Los Angeles Times, New York Daily News, The Boston Globe, The Dallas Morning News and The Philadelphia Inquirer.
That gives Washington Post great benchmarking data on their competitors. But it (combined with Amazon’s first party data) also puts them in an enviable spot to launch a premium ad network. I could see them offering the technology free (or rebated to make it free) in exchange for using their ad server. At that point Google gets to have an ad netwrork consisiting of fat thumb misclicks on mobile games while premium advertisers & premium publishers are drawn in closer to Amazon’s orbit.
Look what Amazon recently did in the freight market. Offer a service at no margin to destroy the capacity utilization & economics of an incumbent, and then only after shifting the economics consider making a profit. The ad network equivalent of that is peal off many of the premium publishers while leaving the existing ad network with backfill dreck.
With so much selling off it could be the beginning of a bear market, so no harm staying heavily in cash. That said, here are some stock ideas I am looking at…
PETS – earlier today Petmed Express was off over 3% in part on general market downdraft, fall of internet related stocks & an ultra bearish analyst call on PetIQ that pulled PETQ down about 15%. As of typing this PETS is down almost 3%. Chewy.com also filed for IPO, so that could have a big impact (hype around IPO could drive PETS higher until some analyst makes a call that Chewy.com will eat everything & downgrades PETS). Petmed Express reports earnings on the 6th.
VIRT – if volatility picks up this stock often has a negative correlation to many others, as they are an HFT shop that can scrape more meat off the bones when others are forced to liquidate positions. They were off about 2.5% earlier today & are still down about 1.5%.
MMYT – they made a strategic majority investment in corporate travel firm Quest2Travel & were downgraded by Bank of America in the wake of Google crapping the bed – a proper triple lindy. Last week did Ctrip increase their holdings in the company to 49%. They’re off over 10% today, putting their stock right where it was before the Ctrip announcement was made. This stock has low liquidity & sometimes spreads can be a bit wide on it, so it is worth considering a longer term position, particularly if you think the domestic India internet will parallel the development of the Chinese & US internet ecosystems.
I don’t follow commodities heavily, but African swine flu is causing big problems in China. Some of the related protein stocks have been strong & are up even on a day like today. Tyson (TSN), Seaboard Corp (SEB), Pilgrims Pride (PPC) & the JBS ADR (JBSAY) might be worth a look & a small exploratory position. Many of them are up about 50% off the bottom from late last year.
EIGI – probably has another day or two of decline, but Endurance International Group bombed earnings and lowered guidance. They’re now at fresh 52-week lows & are down over 10% today, so who knows when the bottom will be in. At some point they will be a P/E buyout target as they are trading at well under 1 times sales. Anyone who can come up with any sort of upsells on hosting that they are not doing could drastically expand their margins as they have about 4.8 million active subscribers. Hard to believe they were founded in 1997, have negative growth YoY & are still losing money.
Health insurers – if you don’t have any exposure to healthcare yet, these are quite beaten up & the current Congressional hearings are about as rough as it will get provided Bernie Sanders is not elected and/or the Senate does not flip in 2020
Amazon has had a history of making announcements that decimate adjacent markets. They’ve acquired Whole Foods & crashed Kroger, they’ve acquired PillPack & crashed CVS + Walgreens, and they’ve had other retail announcements in the past which have clobbered other retailers.
In most cases, each of the “oh shit, Amazon …” stories has been a decent entry point for at least a short term trade.
“We’re currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program,” Olsavsky said, adding that Amazon expects to spend $800 million this quarter to make the change.
Amazon offers one-day delivery on some products now, and even same-day delivery for some purchases. But Olsavsky suggested that the company now expects that the standard free two-day shipping that is the biggest selling point for the Prime subscription plan will be improved to a one-day schedule globally.
The faster shipping time increases the range of impulse purchases consumers may conduct on Amazon. Amazon still has gaps in their catalog in terms of competitive pricing & the more they move to speed up advertising the more they’ll need to either cross-subsidize from AWS or squeeze merchants on their platform with more junk fees to make up for the cost difference.
Some parts of the market are logical & some are utterly illogical. For instance, after there was news that Nancy Pelosi’s team was guaranteeing health insurers they wouldn’t eat any cramdowns anytime soon & Trump suggested it made sense to wait until after the 2020 election to reform healthcare one could presume that would be an “all clear” to dip into the health market.
Markets not only tend to be forward looking, but they also tend to be more headline & emotionally driven than most would give them credit for being. So when the Democratic presidential candidates started taking hard left planks to try to differentiate themselves from the field, the concept of socialized medicine / Bernie Sander’s Medicare-for-all absolutely clobbered health stocks.
The current Democratic leaders in Congress — Senator Chuck Schumer of New York, the minority leader, and Nancy Pelosi of California, the House speaker — have not supported it. President Trump and Republican leaders in Congress have been demanding a smaller government role in health care, not a larger one. And the giant health care companies, which have enormous wealth and influence, are, for the most part, committed to blocking the idea. …
Data from Bespoke Investment Group shows that the damage to health care stocks became much more acute on Tuesday and Wednesday. On those days, according to Bespoke, the health care sector, dominated by UnitedHealth, underperformed the S&P 500 by its widest margin since April 2009.
The health care industry — doctors, hospitals, insurers, pharmaceuticals — has united in the Partnership for America’s Health Care Future, a lobbying coalition, to stop Medicare-for-all. That organization aggressively denounces single-payer at every opportunity, and has condemned proposals like a public option or letting people 55 and older buy into Medicare.
The Democrats would need to take the Presidential election, the House of Representatives & the Senate in order to pass a Medicare-for-all bill. And they would need to have a strong enough majority to override moderate grifter types like Nancy Pelosi. In short, “The selloff is based on legislation that has almost no chance of passing,” said Raymond James analyst John Ransom.
If that tail risk doesn’t come true then many stocks in that sector are a steal. And if at any point during the election cycle it looks like Donald Trump is going to get re-elected or a more moderate Democrat is likely to get the nomination healthcare stocks will pop.
After the steep declines health industry stocks today are almost like buying a call option on Bernie Sanders losing the election or a put option on him winning.
The Amazon shipping announcement took about 6% off Target, 4% of Kroger & 2% of Walmart. Those are substantial moves for staid retailers.
“[I]t would be a mistake to sell large retailers on this announcement as they have anticipated this for some time and are already rolling-out corresponding services,” Zolidis said in a statement. “Further, we believe that a total offer that gives consumers the option to get product when and where they want it, either at home or in the store, is superior to a delivery-only option.”
I just bought a bit of KR & TGT. They could still fall further, but unless the entire market craters they are reasonably priced.
And any logic which concludes offline retail is going to get wiped out by Amazon becoming more efficient is also logic which might conclude that Amazon is likely to get broke up after the election. President Trump already hates Jeff Bezos (for owning the Washington Post) & some of the Democrat presidential candidates like Elisabeth Warren have spoke mad hate about Amazon.
To be clear, I don’t think Amazon gets broken up anytime in the next 5 or 6 years. But I also don’t think changing shipping from 2 days to 1 day is a huge deal changer for most people.
A smarter approach IMHO would be one where Amazon gave buyers a sliding scale for shipping rebates for either buying more merchandise at once and/or selecting slower shipping dates for credits to apply to future purchases. Amazon already does the second a bit, but I think they could have their shipping features more than pay for themselves by allowing customers to not only enjoy free shipping widely but also get paid to wait.
A couple years ago IHL Group highlighted how the “retail is dead” meme was sort of garbage & how a lot of the company closures were from debt-levered LBOs by private equity firms. That business model is a “no lose” as even when they go under they still get to loot the value of the underlying real estate & pension plans while layering on dividend recapitalization after dividend recapitalization until they create a debt mountain so large the firm implodes.
“Growth shares have surged to the highest levels versus cheap equities since the dot-com bubble, underscoring fierce demand for companies less exposed to the gyrations of the economic cycle. Stocks posting a strong return on equity are near their most expensive since 1990, according to Sanford C. Bernstein & Co. To cap it all, tech multiples have jumped toward 2009 highs relative to the broader gauge. It all suggests an “extreme” valuation gap is setting the stock market up for a rotation away from winners in favor of the losers, according to Morgan Stanley, echoing a growing number of Wall Street strategists. … the most-loved equities look decidedly expensive in this melt-up. And all bets are off on how they will fare in any correction, with the projected earnings expansion for growth stocks this year not much stronger than peers”
Naspers offered Ctrip even more shares, which would have given it control of MakeMyTrip, noted analysts at Goldman Sachs, but Ctrip opted for a minority position to avoid regulatory scrutiny. Ctrip’s concerns centered around a foreign company taking over a brand in India. Naspers will own about 6 percent of the Chinese travel agency’s outstanding ordinary shares after the maneuver. In 2016, Shanghai-based Ctrip had invested about $180 million in MakeMyTrip, gaining it one board seat. With this deal, it will get Naspers four board seats. It now has five of the 10 board seats.