What we’re reading (9/26)
“What The ‘Smart Money’ Knows About China’s Evergrande Crisis” (Wall Street Journal). “Between its inception at the end of 1992 and this Aug. 31, the MSCI China stock index has returned an average of 2.2% annually, including dividends. Over the same period, the MSCI Emerging Markets index grew 7.8% annually; the S&P 500, 10.7%. That covers a nearly 30-year period in which China’s economy often grew by at least 10% a year. Nevertheless, you would have earned much better returns on U.S. Treasury securities than on Chinese stocks. Maybe China, which holds more than $1 trillion in U.S. Treasurys, knew something that Wall Street didn’t. And knowing what the Chinese government is thinking is harder than ever.”
“Costco, Nike And FedEx Are Warning There’s More Inflation Set To Hit Consumers As Holidays Approach” (CNBC). “Shipping bottlenecks that have led to rising freight costs are cooking up a holiday headache for U.S. retailers. Costco this week joined the long list of retailers sounding the alarm about escalating shipping prices and the accompanying supply chain issues. The warehouse retailer, which had a similar cautionary tone in May, was joined by athletic wear giant Nike and economic bellwethers FedEx and General Mills in discussing similar concerns. The cost to ship containers overseas has soared in recent months. Getting a 40-foot container from Shanghai to New York cost about $2,000 a year and a half ago, just before the Covid pandemic. Now, it runs some $16,000, according to Bank of America.”
“How Bad Are Supply Chains? Costco Is Renting Ships” (CNN Business). “Costco (COST), home of the ultimate big box store, is not mincing words about what it's like to run a consumer business in the middle of a pandemic. ‘Inflationary factors abound: higher labor costs, higher freight costs, higher transportation demand, along with container shortages and port delays, increased demand in certain product categories, various shortages of everything from computer chips to oils and chemicals, higher commodities prices,’ Chief Financial Officer Richard Galanti told analysts after markets closed Thursday. ‘It's a lot of fun right now.’ […] [S]upply chains are so badly tangled that the company said it has chartered three ocean vessels for the next year to transport containers between Asia and the United States and Canada.”
“Warren Buffett May Not Be Into Crypto, But His Granddaughter Is” (Institutional Investor). “For Nicole Buffett, creating NFTs of her paintings, especially during the pandemic, when in-person art shows and gallery openings have been a near impossibility, allowed her to expand her circle of buyers globally — a large proportion of them young, entrepreneurial, and tech-savvy. ‘NFTs are really art as money, art as currency, which means there’s more accessibility for artists and for people who want to buy art,’ she tells Institutional Investor. ‘It’s great just to have more eyeballs on the work…I will help people get set up so they can buy art on the blockchain, but the currency of the NFT space is Ethereum. I do still take dollars for physicals.’”
“A Hamster Has Been Trading Cryptocurrencies In A Cage Rigged To Automatically Buy And Sell Tokens Since June - And It's Currently Outperforming The S&P 500” (Insider). “A hamster in Germany is redefining ‘A Random Walk Down Wall Street’ author Burton Malkiel's belief that a blindfolded monkey throwing darts at a stock ticker list in the newspaper could do just as good as a human investment professional. The livestreamed hamster, named Mr. Goxx, has been independently trading a portfolio of various cryptocurrencies since June 12, and so far its performance has been impressive. As of Friday, the portfolio was up nearly 24%, according to the @mrgoxx twitter feed that documents daily performance, along with every trade made by the hamster. Mr. Goxx's performance outpaces bitcoin and the S&P 500 over the same time period.”
