What we’re reading (1/30)
“Buy GameStop, Fight Injustice. Just Don’t Sell.” (New York Times). “As he dug deeper, spending hours reading what other traders had posted about GameStop, Mr. [Kunal] Gogna [a GameStop shareholders] became convinced that something far darker was going on. Several posts detailed what users were calling a plot by Wall Street, the Securities and Exchange Commission and a trade clearinghouse to create fake or ‘synthetic’ GameStop shares.”
“Rents Are Up 40 Percent In Some Cities, Forcing Millions To Find Another Place To Live” (Washington Post). “Rental prices across the country have been rising for months, but lately the increases have been sharper and more widespread, forcing millions of Americans to reassess their living situations. Average rents rose 14 percent last year, to $1,877 a month, with cities like Austin, New York and Miami notching increases of as much as 40 percent, according to real estate firm Redfin. And Americans expect rents will continue to rise — by about 10 percent this year — according to a report released this month by the Federal Reserve Bank of New York.”
“It’s Been Rough For Stocks, But The Outlook Is Still OK” (Morningstar). “Raheel Siddiqui, portfolio and quantitative strategist…says Monday’s steep declines weren’t driven by fundamental news, but rather a confluence of ‘technical’ factors, such as selling by trend-following futures traders, stock options traders, and ripples from leveraged exchange-traded funds. That coupled with a lack of ‘buy-the-dip’ support from individual investors helped create a void for the market to fall into to start the week. At the same time, there was an overhang of big, institutional investors heavily weighted in the very largest--and often most expensive--stocks who finally started cutting back on those positions.”
“Cathie Wood’s ARK Faces Loyalty Test After Tech-Stock Rout” (Wall Street Journal). “What happens next at the ARK Innovation fund, which goes by the ticker ARKK, and other risky investments like it will help tell the story of financial markets in 2022. The most speculative assets, ranging from ARK and many of its holdings to what are known as meme stocks like GameStop Corp. and AMC Entertainment Holdings Inc. to cryptocurrencies like bitcoin, soared during the pandemic thanks to the enormous sums governments and central banks poured into the economy to counter the impact of lockdowns. Now those gains are eroding as the Federal Reserve prepares to begin raising U.S. interest rates as soon as March, prompting a shift of investor behavior and a rethink of risk appetites.”
“The 60%-40% Portfolio Will Deliver Anemic Returns Over The Next Decade — Here’s How To Adapt” (MarketWatch). “We have entered a new paradigm of anemic return expectations for traditional asset-allocation models. The prospects of a lost decade ahead are uncomfortably high for portfolios that are 60% invested in stocks and 40% in bonds – particularly when adjusted for inflation, which is at levels not seen since the early 1980s. Investors have witnessed expensive stock markets and incredibly low interest rates. Seldom have we experienced both concurrently.”
