What we’re reading (12/2)
“Stocks Finish Higher After Omicron-Driven Selloff” (Wall Street Journal). “Equities rose, with the S&P 500 and Dow Jones Industrial Average more than recouping Wednesday’s losses. Oil prices and bond yields rose. Investors already confronting rising inflation are now also evaluating the likelihood that Omicron could spur changes in government or monetary policy, which has led to pronounced volatility in recent sessions.”
“Do We Really Need A 24-Hour Economy?” (The Nation). “[R]unning West Coast ports 24/7 won’t solve the supply-chain problem, not when there aren’t enough truckers to carry that critical patio furniture to Home Depot. The shortage of such drivers arises because there’s more demand than ever before, and because many truckers have simply quit the industry. As The New York Times reports, ‘Long hours and uncomfortable working conditions are leading to a shortage of truck drivers, which has compounded shipping delays in the United States.’”
“The FAANG Market Is Fading” (Morningstar). “Heading into the final weeks of 2021, an important trend has emerged in the stock market: The hyper-concentration of returns that saw a handful of stocks responsible for much of the gains last year has faded. Some of the largest stocks in the market still dominate returns to a degree that's greater than in previous years…[b]ut the trend in 2021 has shifted toward a lesser degree of concentration of returns. For investors, this is a potentially healthier dynamic, with less risk for index-tracking funds and more opportunities for stock-pickers.”
“I Lost $400,000, Almost Everything I Had, On A Single Robinhood Bet” (Vice). “I just went all in on this one single stock option: The $200 strike price call option on Alibaba…I initially invested $300,000 in February, basically every single liquid asset in my account. Not retirement, but everything cash. I didn't have anything left. My thesis was I might not make a lot of money, but I won’t lose much. The downside seemed limited, and that if worse comes to worse, it would go down to like $280,000…in July, I put in another almost $100,000…[t]he whole $400,000 turned to almost zero.”
“Nobel-Winning Stock Market Theory Used To Help Save Coral Reefs” (The Guardian). “A Nobel prize-winning economic theory used by investors is showing early signs of helping save threatened coral reefs, scientists say. Researchers at Australia’s University of Queensland used modern portfolio theory (MPT), a mathematical framework developed by the economist Harry Markowitz in the 1950s to help risk-averse investors maximise returns, to identify the 50 reefs or coral sanctuaries around the world that are most likely to survive the climate crisis and be able to repopulate other reefs, if other threats are absent.”
