What we’re reading (11/4)
“Wall Street Couldn’t Prevent Mayor Mamdani. Now It Has to Work With Him.” (Wall Street Journal). “Wall Street heavyweights failed to stop New York City voters from electing a democratic socialist mayor. Now what? There was an air of defeat on Tuesday evening in New York’s upper echelons as it became clear that Zohran Mamdani had won the mayor’s race. Some top figures in the city’s finance industry found the notion of a Mamdani administration unthinkable and had spent millions to elevate other candidates.”
“This Famous Method Of Valuing Stocks Is Pointing Toward Some Rough Years Ahead” (Wall Street Journal). “Consider what seems like one of the clearest comparisons of how much we pay for a piece of the world’s largest, most-rewarding stock index. As of last week, its multiple of sales was higher than at any point in history, including the peak of the tech-stock bubble. In part, though, that just reflects the U.S. economy’s transformation. Microsoft has an operating margin about five times as high as Exxon Mobil and 10 times that of retailer Walmart. Asset-light companies make up a lot more of the index than they did in the past and they earn a lot more profit on their sales. But the “companies are just better” excuse starts to wear thin when the gold standard of valuation enters the discussion. Rather than the forward-looking price/earnings ratio based on analyst forecasts and favored by most fund managers, that is the cyclically adjusted version first proposed by Warren Buffett’s mentor Benjamin Graham. It is sending a clear signal: Expect paltry stock returns in coming years.”
“Gold Rebounds On Haven Demand As Risk-Off Mood Rattles Markets” (Bloomberg). “Gold rebounded as investors sought safety following a slump in global stocks due to concerns around elevated valuations. Spot bullion rose toward $4,000 an ounce, after falling almost 2% in the previous session as a gauge of the US currency advanced for a fifth day. Global stocks were lower on Wednesday after suffering the steepest drop in nearly a month. Treasuries also rallied on haven demand.”
“Denny’s Is Being Taken Private And Pizza Hut May Be For Sale” (CNN Business). “Denny’s, the struggling, 72-year-old diner chain, is selling itself to a group of investors who are taking the business private. The company announced Monday that it’s sold itself to TriArtisan Capital Advisors, a private equity firm that also owns P.F. Chang’s, and Yadav Enterprises, a major Denny’s franchisee, in a $322 million deal (excluding its substantial debt load).”
“Britain’s 300-Year Tradition Of Wearing Wigs In Court Gets A Trim” (Washington Post). “The British legal system isn’t abandoning its 300-year tradition of curly white wigs just yet, but it is making room for lawyers who may not want to look like they are auditioning for a production of ‘Amadeus’ while arguing armed robbery cases. Some barristers — lawyers operating in the courtroom — practicing criminal law in England and Wales are no longer required to wear the classic horsehair headpieces in cases where they prove ‘uncomfortable or impractical,’ codifying a growing recognition within the profession that not everyone’s hair was built for Georgian-era fashion.”
