What we’re reading (7/24)
“Amazon Met With Startups About Investing; Then Launched Competing Products” (Wall Street Journal). The Journal interviewed more than two dozen entrepreneurs, investors, and deal advisors who said that Amazon appeared to use the investment and deal-making process to acquire proprietary information to help it develop competing products.
“Vanguard Comes To Defense Of The 60/40 Portfolio As It Forecasts Stock Market Returns For The Next Decade” (MarketWatch). Vanguard is forecasting U.S. equities will return four to six percent annually, on average, over the next decade (apparently, similar to a recent Goldman Sachs forecast), which works out to a total return in the range of 48-79 percent (1.04^10 years-1=0.48; 1.06^10 years-1=0.79). That’s pretty much in line with average annual historical U.S. stock market returns, but maybe a little lower, depending on the measurement period.
“The Economy Looks Rough. The Stock Market Doesn’t. Here’s why That May Make Sense” (Intelligencer). Another hot take on this issue. The explanations offered here for why equities continue to be up? (1) Expected out-year corporate profits are arguably higher than before, (2) common measures of stock market performance (S&P 500, DJIA) are relatively heavily concentrated in large, globally operating companies with extensive footprints in countries that have managed the covid-19 pandemic better than the U.S., and (3) interest rates have continued falling.
interest rates have continued falling.
“How Accurate Are Prediction Markets?” (JSTOR). A nice overview of the history and current thinking on prediction markets—the “marketplaces” of prediction that aggregate “bets” on various events (e.g., who will win the 2020 U.S. presidential election) and have been postulated as producing forecasts more accurate than the predictions of supposed experts. The idea is that when you have skin in the game by way of your bet, you may be less prone to the biases to which experts regularly succumb.
“This Man Owns More Land Than Anyone Else In America” (24/7 Wall Street). 2.2 million acres in Colorado, Maine, New Mexico, and Wyoming—about 2x the size of the state of Rhode Island. It’s good to be media tycoon John Malone.
