What we’re reading (12/19)
“Innovation Stocks Are Not In A Bubble: We Believe They Are In Deep Value Territory” (Ark Invest). “Last year, as the equity market responded to the ugly reality of the coronavirus during March and April, quant and algorithmically driven strategies seemed to seize simplistically on two variables – level of cash on company balance sheets and rate of cash burn – and, in just a few weeks, they crushed many stocks by 50-75%. Momentum followers and market commentators embraced this “obvious” trade, but they were wrong. Many of those stocks were in the genomic space, their underlying technologies critical to tackling the coronavirus[.]”
“Sky-High Lumber Prices Are Back” (Wall Street Journal). “Lumber prices have shot up again in a rise reminiscent of a year ago, when high-climbing wood prices warned of the hinky supply lines and broad inflation to come. Futures for January delivery ended Friday at $1,089.10 per thousand board feet, twice the price for a prompt delivery in mid-November. Cash prices are way up as well. Pricing service Random Lengths said that its framing composite index, which tracks on-the-spot sales, has jumped 65% since October, to $915.”
“The U.S. Government Has A Massive, Secret Stockpile Of Bitcoin — Here’s What Happens To It” (CNBC). “For years, the U.S. government has maintained a side hustle auctioning off bitcoin and other cryptocurrencies. Historically, Uncle Sam has done a pretty lousy job of timing the market…[t]he government has obtained all that bitcoin by seizing it, alongside the usual assets one would expect from high-profile criminal sting operations. It all gets sold off in a similar fashion.”
“The Real Reason To Index” (Morningstar). “[F]uture active-passive contests will likely resemble the Vanguard/American Funds outcome rather than Bogle’s projections. Ironically, this will make Bogle wrong by being right. His critique about how most fund companies operated was entirely correct. However, through his efforts, Bogle taught investors to change their behavior. They no longer operate as they once did, which means index funds no longer enjoy such a significant cost advantage.”
“Candy Cane Shortage Fueled By COVID, Weak Peppermint Harvest” (New York Post). “It’s the great Candy Cane Crisis of 2021. Weakness in peppermint crops and COVID-caused logistical issues have created a problem for Big Candy…[p]eppermint production in the United States has declined nearly 25 percent over the past decade, according to the US Department of Agriculture.”
