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Musings on Markets

Musings on Markets
DeepSeek crashes the AI Party: Story Break, Change or Shift? I am going to start this post with a confession that my knowledge of the architecture and mechanics...
2 days ago
2
2 days ago
I am going to start this post with a confession that my knowledge of the architecture and mechanics of AI are pedestrian and that there will be things that I don't get right in this post. That said, DeepSeek's abrupt entry into the AI conversation has the potential to change the...
Musings on Markets
Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! It was an interesting year for interest rates in the United States, one in which we got more...
5 days ago
3
5 days ago
It was an interesting year for interest rates in the United States, one in which we got more evidence on the limited power that central banks have to alter the trajectory of market interest rates. We started 2024 with the consensus wisdom that rates would drop during the year,...
Musings on Markets
Data Update 3 for 2025: The times they are a'changin'! In my first two data posts for 2025, I looked at the strong year that US equities had in 2024, but a...
a week ago
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a week ago
In my first two data posts for 2025, I looked at the strong year that US equities had in 2024, but a very good year for the overall market does not always translate into equivalent returns across segments of the market. In this post, I will remain focused on US equities, but I...
Musings on Markets
Data Update 2 for 2025: The Party Continued (for US Equities) In my last post, I noted that the US has extended its dominance of global equities in recent years,...
2 weeks ago
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2 weeks ago
In my last post, I noted that the US has extended its dominance of global equities in recent years, increasing its share of market capitalization from 42% in at the start of 2023 to 44% at the start of 2024 to 49% at the start of 2025. That rise was driven by a surge in US equity...
Musings on Markets
Data Update 1 for 2025: The Draw (and Danger) of Data For the last four decades, I have spent the first week of each year collecting and analyzing data on...
3 weeks ago
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3 weeks ago
For the last four decades, I have spent the first week of each year collecting and analyzing data on publicly traded companies and sharing what I find with anyone who is interested. It is the end of the first full week in 2025, and my data update for the year is now up and...
Musings on Markets
For the fun of it: An Open House for my Spring 2025 Classes I am a teacher at heart, and every year, for more than two decades, I have invited people to join me...
a month ago
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a month ago
I am a teacher at heart, and every year, for more than two decades, I have invited people to join me in the classes that I teach at the Stern School of Business at New York University. Since I teach these classes only in the spring, and the first sessions for each of the classes...
Musings on Markets
The Siren Song of Sustainability: The Theocratic Trifecta's Third Leg! You might know, by now, of my views on ESG, which I have described as an empty acronym, born in...
2 months ago
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2 months ago
You might know, by now, of my views on ESG, which I have described as an empty acronym, born in sanctimony, nurtured in hypocrisy and sold with sophistry. My voyage with ESG began with curiosity in my 2019 exploration of what it purported to measure, turned to cynicism as the...
Musings on Markets
The Wisdom and Madness of Crowds: Market Prices as Political Predictors! In this, the first full week in November 2024, the big news stories of this week are political, as...
2 months ago
44
2 months ago
In this, the first full week in November 2024, the big news stories of this week are political, as the US presidential election reached its climactic moment on Tuesday, but I don't write about politics, not because I do not have political views, but because I reserve those views...
Musings on Markets
The Sugar Daddy Effect? Corporate venture capital, Sovereign funds and Green Energy! It is a sign of the times that I spent some time thinking about whether the title of my post would...
3 months ago
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3 months ago
It is a sign of the times that I spent some time thinking about whether the title of my post would offend some people, as sexist or worse. I briefly considering expanding the title to  "Sugar Daddies and Molasses Mommies", but that just sounds awkward, or even replacing the words...
Musings on Markets
Breaking up Big Tech: Cui Bono? In a court filing on October 9, 2024, the US Department of Justice (DOJ) let it be known that it was...
3 months ago
58
3 months ago
In a court filing on October 9, 2024, the US Department of Justice (DOJ) let it be known that it was considering a break-up of Alphabet, with the addendum that it would also be pushing for the company to share the data it collects across its multiple platforms with competitors....
Musings on Markets
Just do it! Brand Name Lessons from Nike'sTroubles! I have spent the last week reading "Shoe Dog", Phil Knight's memoir of how  a runner on the Oregon...
4 months ago
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4 months ago
I have spent the last week reading "Shoe Dog", Phil Knight's memoir of how  a runner on the Oregon University track team built one of the great shoe companies in the world, in Nike. In addition to its entertainment value, and it is a fun book to read, I read it for two...
Musings on Markets
Fed up with Fed Talk? Fact-checking Central Banking Fairy Tales! The big story on Wednesday, September 18, was that the Federal Reserve’s open market committee...
4 months ago
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4 months ago
The big story on Wednesday, September 18, was that the Federal Reserve’s open market committee finally got around to “cutting rates”, and doing so by more than expected. This action, much debated and discussed during all of 2024, was greeted as "big" news, and market...
Musings on Markets
Dealing with Aging: Updating the Intel, Walgreens and Starbucks Stories! A few weeks ago, I posted on the corporate life cycle, the subject of my latest book. I argued that...
4 months ago
52
4 months ago
A few weeks ago, I posted on the corporate life cycle, the subject of my latest book. I argued that the corporate life cycle can explain what happens to companies as they age, and why they  have to adapt to aging with their actions and choices. In parallel, I also noted that...
Musings on Markets
The Power of Expectations: Nvidia's Earnings and the Market Reaction! Last Wednesday (August 28), the market waited with bated breath for Nvidia’s earning call, scheduled...
4 months ago
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4 months ago
Last Wednesday (August 28), the market waited with bated breath for Nvidia’s earning call, scheduled for after the market closed. That call, at first sight, contained exceptionally good news, with revenues and earnings coming in at stratospheric levels, and above expectations,...
Musings on Markets
Beat your Bot: Building your moat against AI It seems like a lifetime has passed since artificial intelligence (AI) became the market's biggest...
5 months ago
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5 months ago
It seems like a lifetime has passed since artificial intelligence (AI) became the market's biggest mover, but Open AI introduced the world to ChatGPT on November 30, 2022. While ChatGPT itself represented a low-tech variation of AI, it opened the door to AI not only as a business...
Musings on Markets
The Corporate Life Cycle: Corporate Finance, Valuation and Investing Implications! As I reveal my ignorance about TikTok trends, social media celebrities and Gen Z slang, my children...
5 months ago
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5 months ago
As I reveal my ignorance about TikTok trends, social media celebrities and Gen Z slang, my children are quick to point out my age, and I accept that reality, for the most part. I understand that I am too old to exercise without stretching first or eat a heaping plate of cheese...
Musings on Markets
Country Risk: My 2024 Data Update After the 2008 market crisis, I resolved that I would be far more organized in my assessments and...
6 months ago
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6 months ago
After the 2008 market crisis, I resolved that I would be far more organized in my assessments and updating of equity risk premiums, in the United States and abroad, as I looked at the damage that can be inflicted on intrinsic value by significant shifts in risk premiums, i.e., my...
Musings on Markets
Catastrophic Risk: Investing and Business Implications In the context of valuing companies, and sharing those valuations, I do get suggestions from readers...
11 months ago
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11 months ago
In the context of valuing companies, and sharing those valuations, I do get suggestions from readers on companies that I should value next. While I don't have the time or the bandwidth to value all of the suggested companies, a reader from Iceland, a couple of weeks ago, made a...
Musings on Markets
The Seven Samurai: How Big Tech Rescued the Market in 2023! I was planning to finish my last two data updates for 2024, but decided to take a break and look at...
11 months ago
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11 months ago
I was planning to finish my last two data updates for 2024, but decided to take a break and look at the seven stocks (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla) which carried the market in 2023. While I will use the "Magnificent Seven" moniker attached by these...
Musings on Markets
Data Update 5 for 2024: Profitability - The End Game for Business? In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free...
a year ago
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a year ago
In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the...
Musings on Markets
Data Update 4 for 2024: Danger and Opportunity - Bringing Risk into the Equation! In my last data updates for this year, I looked first at how equity markets rebounded in 2023,...
a year ago
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a year ago
In my last data updates for this year, I looked first at how equity markets rebounded in 2023, driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound. In this post, I look at risk, a central theme in finance and...
Musings on Markets
Data Update 3 for 2024: Interest Rates in 2023 - A Rule-breaking Year! In my last post, I looked at equities in 2023, and argued that while they did well during 2023, the...
a year ago
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a year ago
In my last post, I looked at equities in 2023, and argued that while they did well during 2023, the bounce back were uneven, with a few big winning companies and sectors, and a significant number of companies not partaking in the recovery. In this post, I look at interest rates,...
Musings on Markets
Data Update 2 for 2024: A Stock Comeback - The Low Expectations Game! Heading into 2023, US equities looked like they were heading into a sea of troubles, with inflation...
a year ago
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a year ago
Heading into 2023, US equities looked like they were heading into a sea of troubles, with inflation out of control and a recession on the horizon. While stocks had their ups and downs during the year, they ended the year strong, and recouped, at least in the aggregate, most of...
Musings on Markets
The School Bell Rings: Time for Class! Continuing an annual ritual of long standing, ahead of starting my spring teaching at NYU starting...
a year ago
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a year ago
Continuing an annual ritual of long standing, ahead of starting my spring teaching at NYU starting in a couple of weeks, I would like to invite you, if you are interested, to come along for the ride. I know! I know! Most of you are not enrolled at NYU, paying nosebleed prices,...
Musings on Markets
Data Update 1 for 2024: The data speaks, but what does it say? In January 1993, I was valuing a retail company, and I found myself wondering what a reasonable...
a year ago
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a year ago
In January 1993, I was valuing a retail company, and I found myself wondering what a reasonable margin was for a firm operating in the retail business. In pursuit of an answer to that question, I used company-specific data from Value Line, one of the earliest entrants into the...
Musings on Markets
The Difference Makers: Key Person(s) Valuation Can one person make a difference to the value of a business? Of course, and with small businesses,...
a year ago
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a year ago
Can one person make a difference to the value of a business? Of course, and with small businesses, especially those built around personal services (a doctor or plumber’s practice), it is part of the valuation process, where the key person is valued or at least priced and...
Musings on Markets
Tesla in November 2023 : Story twists and turns, with value consequences! I was planning to start this post by telling you that Tesla was back in the news, but that would be...
a year ago
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a year ago
I was planning to start this post by telling you that Tesla was back in the news, but that would be misleading, since Tesla never leaves the news. Some of that attention comes from the company's products and innovations, but much of it comes from having Elon Musk as a CEO, a man...
Musings on Markets
Good Intentions, Perverse Outcomes: The Impact of Impact Investing! I have made no secret of my disdain for ESG, an over-hyped and over-sold acronym, that has been a...
a year ago
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a year ago
I have made no secret of my disdain for ESG, an over-hyped and over-sold acronym, that has been a gravy train for a whole host of players, including fund managers, consultants and academics. In response, I have been told that the problem is not with the idea of ESG, but in its...
Musings on Markets
Invisible, yet Invaluable: Valuing Intangibles in the Birkenstock IPO! A few days ago, I valued Instacart ahead of its initial public offering, and noted that the...
a year ago
24
a year ago
A few days ago, I valued Instacart ahead of its initial public offering, and noted that the reception that the stock gets will be a good barometer of where risk capital stands in the market, right now. After a buzzy open, when the stock jumped from its offering price of $30 a...
Musings on Markets
Market Bipolarity: Exuberance versus Exhaustion! As we enter the last quarter of 2023, it has been a roller coaster of a year. We started the year...
a year ago
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a year ago
As we enter the last quarter of 2023, it has been a roller coaster of a year. We started the year with significant uncertainty about whether the surge in inflation seen in 2022 would persist as well as about whether the economy was headed into a recession. In the first half of...
Musings on Markets
Putting the (Insta)cart before the (Grocery) horse: A COVID Favorite's Reality Check! After years of rumors of an imminent IPO, Instacart has finally filed for a public offering of it’s...
a year ago
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a year ago
After years of rumors of an imminent IPO, Instacart has finally filed for a public offering of it’s shares, aspiring to raise about $600 million from markets, at a pricing of about $9-$10 billion for its equity. Coming in the week after ARM, an AI chip designer, also filed to go...
Musings on Markets
A Business Upended: Streaming disrupts the Entertainment Business! It has been an unsettling summer for anyone with a stake in the movie, television and broadcasting...
a year ago
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a year ago
It has been an unsettling summer for anyone with a stake in the movie, television and broadcasting businesses.  The strike by screen actors and writers which started in July is now into almost into its third month, with no end in sight, putting at risk the pipeline of movies and...
Musings on Markets
Toys for Billionaires: Sports Franchises as Trophy Assets! I have always loved sports, playing tennis and cricket when I was growing up, before transitioning...
a year ago
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a year ago
I have always loved sports, playing tennis and cricket when I was growing up, before transitioning to fan status, cheering for my favored teams from the sidelines. I also like finance, perhaps not as much as sports, but there are winners and losers in the investment game as well....
Musings on Markets
In Search of Safe Havens: The Trust Deficit and Risk-free Investments! In every introductory finance class, you begin with the notion of a risk-free investment, and the...
a year ago
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a year ago
In every introductory finance class, you begin with the notion of a risk-free investment, and the rate on that investment becomes the base on which you build, to get to expected returns on risky assets and investments. In fact, the standard practice that most analysts and...
Musings on Markets
The Price of Risk: With Equity Risk Premiums, Caveat Emptor! If you have been reading my posts, you know that I have an obsession with equity risk premiums,...
a year ago
22
a year ago
If you have been reading my posts, you know that I have an obsession with equity risk premiums, which I believe lie at the center of almost every substantive debate in markets and investing. As part of that obsession, since September 2008, I have estimated an equity risk premium...
Musings on Markets
Country Risk: A July 2023 Update! I have looked at country risk, in all its dimensions, towards the middle of each year, for the last...
a year ago
20
a year ago
I have looked at country risk, in all its dimensions, towards the middle of each year, for the last decade, for many reasons. One is curiosity, as political and economic crises roll through regions of the world, roiling long-held beliefs about safe and risky countries. The other...
Musings on Markets
Market Resilience or Investors In Denial? A Mid-year Assessment for 2023! I am not a market prognosticator for a simple reason. I am just not good at it, and the first six...
a year ago
24
a year ago
I am not a market prognosticator for a simple reason. I am just not good at it, and the first six months of 2023 illustrate why market timing is often the impossible dream, something that every investor aspires to be successful at, but very few succeed on a consistent basis. At...
Musings on Markets
AI's Winners, Losers and Wannabes: An NVIDIA Valuation, with the AI Boost! I will start this post with a couple of confessions. The first is that my portfolio has held up well...
a year ago
16
a year ago
I will start this post with a couple of confessions. The first is that my portfolio has held up well this year, in a market that has been top-heavy and tech-driven, and one big reason is that it contains both NVIDIA and Microsoft, two companies that have benefited from the AI...
Musings on Markets
Good (Bad) Banks and Good (Bad) Investments: At the right price... In my last post, I looked at banking as a business, and used  a simple banking framework to advance...
a year ago
17
a year ago
In my last post, I looked at banking as a business, and used  a simple banking framework to advance the notion that the key ingredient tying together the banks that have failed so far in 2023 is an absence of stickiness in deposits, created partially by depositor and deposit...
Musings on Markets
Breach of Trust: Decoding the Banking Crisis In March 2023, the fall of Silicon Valley Bank shocked investors not only because it was unforeseen,...
a year ago
21
a year ago
In March 2023, the fall of Silicon Valley Bank shocked investors not only because it was unforeseen, but also because of the speed with which it unfolded. That failure has had a domino effect, with Signature Bank falling soon after, followed by Credit Suisse in April 2023 and by...
Musings on Markets
Data Update 7 for 2023: Dividends, Buybacks and Cash Flows This is the last of my data update posts for 2023, and in this one, I will focus on dividends and...
a year ago
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a year ago
This is the last of my data update posts for 2023, and in this one, I will focus on dividends and buybacks, perhaps the most most misunderstood and misplayed element of corporate finance. To illustrate the heat that buybacks evoke, consider two stories in the last two weeks where...
Musings on Markets
Data Update 6 for 2023: A Wake up call for the Indebted? We have an uneasy relationship with debt, both in our personal and business lives. While it is a...
a year ago
16
a year ago
We have an uneasy relationship with debt, both in our personal and business lives. While it is a financial decision, it is one that is freighted with moral overtones, since almost every religion inveighs against debt's sins, labeling those who lend as sinners and those who borrow...
Musings on Markets
Data Update 5 for 2023: The Earnings Test As I have argued in all four of my posts, so far, about 2022, it was year when we saw a return to...
a year ago
18
a year ago
As I have argued in all four of my posts, so far, about 2022, it was year when we saw a return to normalcy on many fronts, as treasury rates reverted back to pre-2008 levels, and risk capital discovered that risk has a downside. During the course of the year, investors also...
Musings on Markets
Data Update 4 for 2023: Country Risk - Measures and Implications I describe myself as a dabbler, and it does get in the way of my best laid plans. A few weeks ago, I...
a year ago
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a year ago
I describe myself as a dabbler, and it does get in the way of my best laid plans. A few weeks ago, I posted my first data update pulling together what I had learned from looking at the data in 2023, and promised many more on the topic. In the month since, I have added two more...
Musings on Markets
Control, Complexity and Politics: Deconstructing the Adani Affair! The India Rising story hit some turbulence last week, as one of its biggest corporate success...
a year ago
19
a year ago
The India Rising story hit some turbulence last week, as one of its biggest corporate success stories, the Adani Group, was hit with a report from Hindenburg Research, an investing group that specializes in targeting and shorting companies that it believes have dubious accounting...
Musings on Markets
Disagreements and First Principles: The Pushback on my Tesla Valuation I wrote about my most recent valuation of Tesla just over a week ago, and as has always been the...
over a year ago
16
over a year ago
I wrote about my most recent valuation of Tesla just over a week ago, and as has always been the case when I value this company, I have heard from both sides of the Tesla divide. Some of you believe that I am being far too generous in my forecasts of revenues and profitability...
Musings on Markets
Data Update 3 for 2023: Inflation and Interest Rates If 2022 was an unsettling year for equities, as I noted in my second data post, it was an even more...
over a year ago
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over a year ago
If 2022 was an unsettling year for equities, as I noted in my second data post, it was an even more tumultuous year for the bond market. The US treasury market, considered by some still as a safe haven, was anything but safe or a haven, especially at the long maturities, as long...
Musings on Markets
Tesla in 2023: A Return to Reality, The Start of the End or Time to Buy? I am not much of a car person and view cars primarily as a mode of transportation. I drive a 2010...
over a year ago
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over a year ago
I am not much of a car person and view cars primarily as a mode of transportation. I drive a 2010 Honda Civic, a perfectly serviceable vehicle that is never going to get oohs and ahas from onlookers, but I feel no urge to value Honda. I don't own a Tesla, and have only driven...
Musings on Markets
Data Update 2 for 2023: A Rocky Year for Equities! It is the nature of stocks that you have good years and bad ones, and much as we like to forget...
over a year ago
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over a year ago
It is the nature of stocks that you have good years and bad ones, and much as we like to forget about the latter during market booms, they recur at regular intervals, if for no other reason than to remind us that risk is not an abstraction, and that stocks don't always win, even...
Musings on Markets
Data Update 1 for 2023: Setting the table! In my last post, I talked about the ritual that I go through every year ahead of my teaching each...
over a year ago
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over a year ago
In my last post, I talked about the ritual that I go through every year ahead of my teaching each spring, and in this one, I will start on the first of a series of posts that I make at the start of each year, where I look at data, both macro and company-level. In this post, I...
Musings on Markets
A Return to Teaching: The Spring 2023 Edition If, as you read this post, it feels like you have read it or a close variant before, it is because...
over a year ago
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over a year ago
If, as you read this post, it feels like you have read it or a close variant before, it is because you have. Each year, ahead of teaching my classes at NYU's Stern School of Business in the spring, I invite readers to accompany me on my journey, and this year is no different....
Musings on Markets
META Lesson 3: Tell me a story! In my first two posts on Facebook, I noted that its most recent earnings report, and the market...
over a year ago
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over a year ago
In my first two posts on Facebook, I noted that its most recent earnings report, and the market reaction to it, offers an opportunity for us to talk about bigger issues. I started by examining corporate governance, or its absence, and argued that some of the frustration that...
Musings on Markets
META Lesson 2: Accounting Inconsistencies and Consequences In my last post, I used Facebook's recent troubles to talk about the importance of corporate...
over a year ago
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over a year ago
In my last post, I used Facebook's recent troubles to talk about the importance of corporate governance, and how we, as investors, have abandoned the power to change management at many younger tech companies in return for being able to invest in young tech companies, with growth...
Musings on Markets
META Lesson 1: Corporate Governance As we get deeper into earnings season for the third quarter of 2022, the biggest negative surprises...
over a year ago
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over a year ago
As we get deeper into earnings season for the third quarter of 2022, the biggest negative surprises are coming from technology companies, with the tech giants leading the way. Investors, used to a decade of better-than-expected earnings and rising stock prices at these companies,...
Musings on Markets
Earnings and Cash Flows: A Primer on Free Cash Flow It is never pleasant to be in the midst of a market correction, but a market correction does operate...
over a year ago
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over a year ago
It is never pleasant to be in the midst of a market correction, but a market correction does operate as a cleanser for excesses that enter into even the most disciplined investors' playbooks in the good times. This correction has been no exception, as the threat of losing...
Musings on Markets
Reaping the Whirlwind: A September 2022 Inflation Update! In my early 2021 posts on inflation, I argued that while the higher inflation that we were just...
over a year ago
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over a year ago
In my early 2021 posts on inflation, I argued that while the higher inflation that we were just starting to see could be explained by COVID and supply chain issues, prudence on the part of policy makers required that it be taken as a long term threat and dealt with quickly. Not...
Musings on Markets
A Zomato 2022 Update: Value, Pricing and the Gap On July 21, 2021, I valued Zomato just ahead of its initial public offering at about ₹41 per share....
over a year ago
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over a year ago
On July 21, 2021, I valued Zomato just ahead of its initial public offering at about ₹41 per share. The market clearly had a very different view, as the stock premiered at ₹74  per share and soared into the stratosphere, peaking at ₹169 per share in late 2021. The last few months...