What we’re reading (7/9)
“We’re Looking At Stocks As Money Pots, And That’s Just Not In The Cards” (MarketWatch). “Consider by how much individual investors in the U.S. expect their portfolios to beat inflation in coming years. According to the 2021 Natixis Global Survey of Individual Investors, they on average expect their portfolios to produce an inflation-adjusted return of 17.3% annualized over the next decade. That’s nearly triple the U.S. stock market’s long-term average real total return of 6.1% annualized, and more than four times the bond market’s long-term average total return of 4.1% annualized[.]”
“Why Do We Buy What We Buy?” (Vox). “If you think about the particular things people want, it mostly has to do with being the kind of person that they think they are because there’s a consumption style connected with that. The role of what are called reference groups — the people we compare ourselves to, the people we identify with — is really key in that. It’s why, for example, I’ve [Prof. Juliet Schor of BC] found that people who have reference groups that are wealthier than they are tend to save less and spend more, and people who keep more modest reference groups, even as they gain in income and wealth, tend to save more.”
“The Stickiness Of Pandemic-Driven Economic Behavior” (Project Syndicate). “[T]he global disruption triggered by COVID-19 created a perfect storm in which some shifts in consumer behavior were matched by changes in business operations and government regulations. Many such behaviors in fact accelerated practices that held promise before the pandemic but had failed to gain traction because of cost concerns or widespread skepticism. The virus, by creating an opportunity to experiment with them, made their value much more apparent.”
“Levi Earnings Crush Estimates, Retailer Raises 2021 Forecast, Citing Strong Denim Sales” (CNBC). “Levi Strauss & Co. said Thursday that shoppers are stocking up on jeans in new sizes and styles in the U.S. and China as they emerge from their homes during the pandemic. The momentum both in stores and online boosted its fiscal second-quarter earnings and revenue ahead of analysts’ expectations. Although sales were still down 3% from 2019, the retailer anticipates fiscal third-quarter sales are on track to top pre-pandemic levels. That was something Levi previously didn’t expect to achieve until the fourth quarter.”
“Robinhood May Lose 81% Of Its Revenue, Still Going Public Anyway” (Dealbreaker). “When discussing the record-setting $70 million fine for its alleged technical, due-diligence and truth-telling failings that apparently served as the green light for going public, we noted that the Robinhood IPO prospectus’ “Risk Factors” chapter was likely to be on the long side…[t]hen, our focus was on the risks inherent in the hailstorm of user litigation, regulatory ire and skeptical oversight battering the company...[i]ncredibly, however, these pale in comparison to the threat that one day soon lawmakers and/or regulators will decide to take away the source of $420 million of the $522 million Robinhood made in the first quarter: payment for order flow.”
