Part-Time Analyst

One of the best opportunities either to make (or lose) money while investing comes about via a stock dislocation. Whilst it has been often stated that the market is in fact efficient, I personally hold the view that the people who hold this view probably couldn't spot an elephant on an ice rink. Whilst the stock market is generally fairly efficient, there are times when either paranoia or exuberance take over - turning a well priced stock into a source of ridicule for all those able to see that the emperor does in fact have no clothes on.  What makes investing really interesting though, is that that there will also be times when those of us 'in the know' will point out that the emperor has no clothes, only to find that he is in fact dressed in his full royal regalia. The great thing about investing is that most of the time you are wrong. Stock Manias - e.g. Tesla? But manias do exist, and the more discussed examples come about through irrational exuberance - where the posit...

When I look at Tesla one thing that stands out to me is how big it's vision is. This is admirable - we do all like ambitious companies after all - but what subsequently puzzles me about Tesla is it's approach to that ambition. More specifically, the amount it allocates to be spent on research and development. To explain my point, let's have a meander through the car world to gather up some rough financial comparisons between manufacturers. At the base of the tree you have your upstart luxury car manufacturers like Aston Martin - and Aston Martin spend a plucky $450-550m a year on R&D in their bid to play a role in the luxury part of the market. The cars that result are pretty, but only serve part of a small part of the wider market. And even within the luxury car segment there are levels - and the top spot within that segment is held by The Daddy of the luxury car market - Ferrari. With a market cap of $76b and an R&D spend of about $1bn, Ferrari have always reaped ...

At the moment there is a lot of chatter in the news about financial markets with a lot of headlines along the lines of 'Is there a crash coming?' or 'Are we all going to die in some great financial fireball?'. And to be honest, I find these articles a bit tedious, because as soon as the news starts to be dominated by these articles, people start sending me links to them with comments along the lines of 'this is really important'. And when I start to be a bit dismissive, they start to get upset, because the information in these links 'IS REALLY IMPORTANT!!!' But for two quite different reasons, I don't think that the information included is very important. The first is because it is rarely very clear what to do with the information. And indeed I suspect that most of the reflexive responses, such as pivoting to gold, will in the long run prove to be ball calls, made more in panic than based upon any real insight about any given situation. But the secon...

Over in the US, equity prices are riding high - with the NASDAQ having almost doubled in the last 5 years, driven on by the success of companies focused on AI. AI is the new exciting game in town - much like the internet was back in the 1990s - and the headlines boast that total AI capex spend is expected to reach a total of around $400bn this year. But if the internet triggered a tech bubble, does that mean we are in an AI bubble right now? Much of this money is going into data centres, with the remainder being focused on the development of AI technologies - but if $400bn is being added on the cost side of the balance sheet, doesn't that mean that at least $400bn needs to be added on the income side, and surely we aren't seeing this money appear in the market? Now big numbers can be challenging to put into perspective, but figures these large are sufficient for it to be possible to see a clear drop off in the net cash generation at the big US technology companies. Indeed, if y...

Big things have been happening in the world of Cypto, and whilst Crypto is not an investment for me, I am not blind to the goings on in the Crypto universe. And within that universe, something big happened last Friday - with $19.5bn of liquidation events occurring across a 24 hour period between Friday and Saturday. $19.5bn is quite a big number - and exceeds the prior record of $2.2bn  from February 2025 - and boy don't we all have fond memories of early 2025 (when Trump had seemingly gone insane in his quest for more and more tariffs). But this event dwarfed that, in a crash that clearly had consequences for peoples' financial wealth - particularly for those who have come to rely on leverage to supercharge their positions. As Google AI can explain : Crypto leverage trading works by using your capital as collateral (margin) to borrow funds, which allows you to control a larger trading position than your own capital would permit, amplifying both potential profits and losses. Fo...