Seeking Alpha by Adding Beta

Next week starts the biggest shopping season of the year in US with Black Friday. Millions of people would be heading to malls to spend on holiday gifts. And given that people were stuck at home for last year with only option of online shopping, this year they want to go in malls in person and enjoy the shopping. That brings me to my blog topic - is this the Retail Renaissance? ( The Renaissance was a fervent period  of European cultural, artistic, political and economic “rebirth”  following the Middle Ages) During depths of COVID pandemic, most of the in-person retail (except for essentials) was closed for multiple weeks. Holiday shopping of 2020 was mostly online. Since people were scared to go out.  Online giants like Amazon did a wonderful job in delivering everything from essentials to holiday gifts. No wonder stocks of traditional retail companies were trading as if they are going out of business. Retail was facing double whammy - short term pain of Pandemic and lon...

Kids are known to blame their dogs for eating their homework! Looking at one of the photo forwarded by a friend, I can blame supply chain for "Who ate my Donut?" The Supply Chain issues are seen everywhere - from corporate earnings to weird economics of used cars selling more than they were bought for. Supply chain issues are mentioned in every earning call multiple times - even by companies which are supposed to be all digital. The ports are backlogged with ships lined up for miles to get unloaded. What happened in the world priding itself "just-in-time" and efficient, all connected flat world. Pandemic threw a wrench in this supposedly well-oiled supply chain engine.  When Pandemic hit in early 2020 across the world, after initial spurt of demand in consumables (remember toilet paper shortage?) demand for travel, autos etc vanished overnight including labor.  No wonder crude price went negative briefly. Governments pumped up trillions of $$ to keep their economies...

Exactly 18 months back in depths of COVID induced panic, Crude oil fell to -37 US $ per barrel....yes you read it right. It was minus..means someone was ready to pay $37 to take one barrel of oil off their hands...weird but it did happened albeit for very short time....That was then..and now same barrel of oil has reached $80 - highest since 2014. Oil price is just one of the very widely tracked indicators which reflect multiple factors. Let's look at some other trends Oil at 7 years high Natural gas at multi year highs crossing $6 per BTU Power cuts in China due to coal shortage. Even in most progressive country priding itself to transition to green power Germany also having potential power cuts due to coal shortage UK citizens are living in their 70s with long lines at gas stations to refill their cars.  Avg time to ship holiday goods from Asia to America has gone to 80 days - twice of pre-pandemic days and prices have gone up multi-fold Labor shortages all across - UK is having ...

One would think that leader of capitalism USA and only large communist nation (which matters) China would have very different problems. However if you pay closer attention to what's happening in Washington and Beijing and reasons behind it, you would wonder if both systems have created similar societies and trying to address the problem with only slight variations in their approach, Last 3 decades saw explosive growth in economies and corresponding wealth creation. After financial crisis of 2008-09 it has increased the wealth gap significantly. By some accounts, top 1% of population has 15 times more wealth than bottom 50% . Unicorns (startups valued at more than billion $) are being created every day. Even in China wealth at top has been very concentrated. President Xi is determined to address this with force of regulations as well as policies. In US, progressives are putting pressure on President Biden to enact $3.5 trillion "social contract" bill (and they are willing ...

History repeats. No wonder last week's events are being referred as "The Fall of Kabul" (similar to The Fall of Saigon in 1975). 100 years back British learned their lessons giving Afghans independence in 1919. Russians learned their lessons in 80's and now it was turn of another superpower to learn same lesson - 20 years, $2 trillion and thousands of American and Afghan lives lost. And it feels like back to square one. Taliban controls more territory and is more powerful than ever thanks to all the military gear Americans are leaving behind. It was a mistake by all 4 presidents to stay beyond initial few years. So I do agree with President Biden that another 10-20 years would not have changed anything so let's get out.  Biden did not change Trump deal with Taliban (even though he did reverse almost all other Trump policies). The issue was execution of exit despite planning for last few years. Biden had 8 months to plan this properly and have well executed exit fo...

We managed to see latest "Fast and Furious" series movie - F9 in theaters (and couple of other movies like  "In the Heights" and "Quiet Place 2"). F9 was way over the top even for the series with rockets blasting car in space and so on...but that's the fun part of enjoying complete non-sense action movie or musicals on big screen. Last week we enjoyed the natural wonders at Yellowstone and Grand Teton National Parks. The planes, hotels, restaurants and even parks were full. Despite the crowds, it felt good to see life returning to normalcy. Economic recovery as well as stock market recovery since reaching bottom 15-16 months back has been Fast and Furious. Government and central banks acted fast to support the economy and citizens who were unemployed for no fault of theirs. With nearly $10T support with stimulus and Fed bond buying, employment situation is improving drastically along with economy. This has resulted in spectacular recovery in stock  mar...

Congratulate Yash for graduating with Bachelors and Master's in Computer Science from Stanford. We are so proud of you! And congratulations to all the graduates! Many of my friends kids are also graduating or already graduated and started their careers at exciting companies (and most of them want to stay in Cities - San Francisco is popular choice of course) This blog is focused on various steps they should take to save for securing their financial future. Their parents learned this hard way....I am not financial advisor so use this writeup just as reference for you to consider. My usual caveat applies - do your own research before taking action. This would be beneficial to  many folks who are already working few years but may not know about these. Here you go... Education: Education is best investment one can make and beats any other alternative. Even if you have graduated, don't stop learning..you can do it on the job, enroll in new courses/graduate program, learn by reading/...

This year's memorial day would be a stark contrast to 2020's gloomy and uncertain memorial day. Thanks to extraordinary success of vaccination drive, America is back in action celebrating Memorial Day remembering ones who lost their lives protecting Americans, travel, barbecues and start of summer season (including summer movies). This memorial day weekend has special meaning as it can also be marked as start of post-covid America. Nearly 2 million Americans would be flying this weekend. Couple of much awaited movies (A Quiet Place Part II and Cruella) would revive theatre going experience and cinema theatre companies like AMC (more on this later).  This weekend also marks centenary of one of the most unfortunate events in American History which not many people know. 100 years back White supremacists massacred and destroyed Geenwood neighborhood in Tulsa, Oklahoma which was also called Black Wall Street (I came to know about this when I was watching "Watchmen" series ...

I have written about various bubbles in my previous posts and invariably I give example of first known financial bubble called " Tulipmania " which happened in 17th century in Netherlands. Since then every few years we have seen such mania - after all humans do not change. Every generation have their own bubble. During Tulipmania, price of one Tulip bulb exceeded price of average home. In 90's we saw valuation of dot.com companies based on how many "eyeballs" these companies have on their web-sites. As soon as people realized that eyeballs cannot be valued as real assets, the bubble burst. In today's generation, we have "dogecoin". This was created as "joke" crypto-currency in 2013. In 2021, it has gone up by 120,000% despite having no real value. In yesterday's SNL hosted by Elon Musk, Elon's mother hoped that her mother's day gift is not a "dogecoin" which Elon replied "Yes it is". Why do people chase bub...

This week world celebrated Earth Day on Apr 22. Fifteen years after Al Gore's " An Inconvenient Truth "  documentary which won 2 Oscars, I am glad that policymakers across large nations (US, China, India and EU) as well as corporates which used to be part of of the problem (Automakers and Energy companies) are paying attention to real dangers of Global Warming and becoming part of the solution. Many leaders committed to significant reductions in emission goals by 2030 to 2050. Even companies like Exxon and GM are taking concrete steps in helping solve the problem. After all they are looking at valuation premiums offered to their "green" counterparts like Tesla and solar companies and realizing that " green is good " (on lines of famous Gordon Gekko dialogue from original Wall Street movie "greed is good"). Hope that these actions and commitments will help make Earth "cool" again! After two month delay, Oscars would be held today eve...

In 2017, I wrote about " Crypto-currencies: Fad, Fraud or Frontier ". In 4 years all three aspects of crypto came true in some form or shape. At that time Bitcoin was going around $4200 and Ethernum was less than $300. The crypto market reached another key milestone this week with biggest IPO of Coinbase as proxy for how real is this new frontier of asset class. On first day, Coinbase at $85B was worth more than 3 times of Nasdaq valuation where it started trading. What an irony! Shouldn't Coinbase "company" should have its own "coin" to trade on Coinbase "exchange"? I am sure someone will come up with "token" which tracks Coinbase stock price to trade on Coinbase or FTX exchange. Complicated? Yes and that's why normal investors should stay away from these. Having said that, one cannot ignore that market cap of all cryptos together exceed most valuable company (Apple) market cap and Bitcoin itself is worth more than trillion $ a...

About one century ago, as world was coming out of world war 1 and devastating spanish flu pandemic new decade unleashed wave of prosperity with new technologies as well as major social changes in western world. That's why the decade is nicknamed as " Roarin's 20s ". Following technologies changed the world forever and they still dominate our lives even 100 years later Autos Television/Radio/Movies Aviation Medicine Expanded infrastructure with electrification of grid, telephone networks and urbanization There were also major social and culture changes such as Suffrage, Jazz, Liberalism and many others marked the decade.  100 years later, world is getting ready to come out of another devastating COVID pandemic and trade war between two major nations. Thanks to combination of fiscal and monetary stimulus totaling over 25 trillion $ worldwide, world economies are going to see growth not seen for multiple decades. This decade could unleash following Mass adoption of Elect...

In the early days of COVID pandemic, absolutely no one including myself had any ideas on how long it would last and how devastating and abnormal 2020 would be. Almost everyone was optimistic that it would be only few weeks or few months at best. Case in point is my own blog which I wrote on Apr 18 about " To Open, or Not To Open ". I must acknowledge that it was too early (almost by one year) and premature. This week World is reminded of numerous articles of one year of Pandemic and at same time world is also looking forward to return to normalcy. Let's be clear - Pandemic is nowhere over. Millions of people are still getting infected and thousands of lives still getting lost...my empathy to all the families who had lost loved ones...At same time, there is good progress being made to bring normalcy back...let's look at some of the aspects to be optimistic about Vaccines - My salute to all the scientists, companies and volunteers who participated in trials as well as ...

The  America's National Sports Day (aka Super Bowl) is here. Last year ignorance about virus already spreading in US was a bliss. The festivities of SuperBowl including family and friends gathering went on in normal ways. This year all of us would be watching Super Bowl in our homes with only families staying together. It's better this way to be safe....to bring life back to normal. This year's Super Bowl is a match between Experience (Brady - 43 years old and already 6 time Super Bowl winner) vs Youth (Mahomes - 25 years old and one time Super Bowl winner). Both quarterbacks have completely different styles. Brady is classic quarterback and one of the greatest of the game. Mahomes is anything but traditional quarterback and one the greatest in making. Tom Brady had proven that even at age 43 he could be in Super Bowl with a different team. That's what greatness is about. Mahomes had proven that last year's Super Bowl win was no fluke....in recent history other than...

Year 2020 was interesting in many ways...one of those is that many of my friends and colleagues (some of you are readers of my blog) are now  driving "Million" $ Teslas! Let me explain what I mean by "Million" $ Teslas and investing lessons one can derive from this.... At start of 2020, well equipped Tesla car was around $70-80K and Tesla company valuation was $76B. At end of 2020, Tesla car is depreciated and may be worth about $60K. And at end of 2020, Tesla company is valued over $800Billion. Just imagine if one of you who bought Tesla car at start of year would have instead bought Tesla stock, your portfolio would have $800K and some change to buy Tesla car you always wanted (provided you had not sold it - more on this later). And imagine someone buying Tesla car back in 2009 vs buying Tesla stock at IPO price of $20. By some calculations they are driving "10 million$" Tesla (assuming they still kept those cars). So what's investing lesson from thi...