What we’re reading (1/4)
“Don’t Tell Anyone, But 2021 Was Pretty Amazing” (Paul Krugman, New York Times). “[T]here’s a good chance that once time has passed and we’ve had a chance to regain perspective, we’ll consider 2021 to have been a very good year, at least in some ways. In particular, although nobody seemed to notice, it was a year of spectacular economic recovery — and one in which many dire warnings failed to come true.”
“10 Predictions For 2022” (The Irrelevant Investor). “Large value will outperform large growth by 20%. One of the stories that went under the radar last year was the return of small value. While small growth returned 2.5% in 2021, small value gained 28%. This same dynamic did not take place in large stocks. As the economy reopened over the first three months of last year, large value returned 11% while large growth fell 1%. It looked like the tide was changing, but the endzone dance was premature. Growth came roaring back, returning 29% through the rest of the year, while large value gained just 12% over the same time.”
“This Was The Year When Finance Jumped The Doge” (Wired). “When Lasse Heje Pedersen, a finance professor at Copenhagen Business School, researched the GameStop incident, he noticed something unexpected. A lot of those seemingly crusading investors were not dumping the stock at the end of the ride, as one would expect from predators ready to collect their loot; in fact, they were clinging to their GameStonks. ‘They didn’t just drive it up and then dump the stock: they were actually holding it for quite a long time,’ Pedersen says. ‘They didn’t seem to be buying it just to hurt somebody else.’ What happened in January 2021 was not simply a rebellion against Wall Street—it was something else. Call it, if you like, the rise of meme finance.”
“4 Charts On Apple's $3 Trillion Market Cap” (Morningstar). “Comparisons with fruit production and trips to Mars aside, Apple's size is massive even when measured against global stock markets. Apple's current market cap is greater than the market caps of entire countries. All public companies that operate in Canada, for example, added up to a total market cap of $2.64 trillion as of year-end 2020, $360 billion less than Apple.”
“The Verdict Is In On Elizabeth Holmes” (DealBook). “Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, was found guilty of fraud yesterday, in a high-profile case that came to symbolize the perils of Silicon Valley hype and hubris. The case was not open-and-shut. Jurors, after a 15-week trial, returned a mixed verdict, finding Holmes guilty on four of 11 charges. All of the counts that she was convicted of related to defrauding investors. She was found not guilty of four counts of defrauding patients, and jurors were unable to agree on three counts related to financial fraud.”
