Friday 17, December 2021
$CVNA (or, as some would prefer, $CVNAQ)
Lol, $CVNA hasn't financed yet in spite of $700m of estimated cash burn next year (99% of Q3 equity).
— Motörhead (@BradMunchen) December 17, 2021
Could it be because no investment bank wants to sell such toxic paper to their clients? Or is the SEC investigation getting serious?$CVNAQ pic.twitter.com/Hb4XVGwXF4
Ray Dalio makes sense at last
If I give $100 today how many years do I have to wait to get my $100 back and then start collecting the reward on top of what I gave? In US, European, Japanese, and Chinese bonds an investor has to wait roughly 42 years, 450 years, 150 years, and 25 years respectively to get one’s money back and then one gets low or nil nominal returns. However, because you are trying to store buying power you have to take into consideration inflation. In the US you have to wait over 500 years, and you will never get your buying power back in Europe or Japan. In fact, if you buy bonds in these countries now you will be guaranteed to have a lot less buying power in the future. Rather than get paid less than inflation why not instead buy stuff—any stuff—that will equal inflation or better?
— Ray Dalio
I am not a great fan of Ray D. I think he’s wrong about China. But for sure, he makes a strong point about investing in something that is guaranteed to lose money relative to cash.
I read the quote in today’s edition of The Alpha Letter.
Magnesium
It’s important, and now production is dominated by China, because of energy costs and environmental concerns in the West. Read more.
This is a sort of bullish for China story. It’s hard to know where things will go. China has some pretty important pieces of the global economy. Either it cranks up the price, once it’s cornered the market, or the West reshores production. It seems to me that either way this stuff is going to get more expensive.
Wrap
Risk off day, except the Ο (omicron) variant has spooked everyone, so cloud providers benefitted to the extent that $NDX was flat. Generally, this was a risk-off day, with oil and most non-food commodities falling, bonds up to flat. The drop in yields supported growth stocks. Overall, the breadth of support in the Nasdaq is very poor.
In currencies, there was the usual flight to the dollar. The big story is Turkey, whose currency is in a very poor state. At some point the authorities are going to impose capital controls, price controls and goodness knows what. This is not good news for the Turkish people. This should not happen to decent, hard-working families.
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