Seeking Alpha by Adding Beta

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...

World has started celebrating end of 2020 and start of new year 2021. While 2020 was an interesting year, I am not going to list down all the aspects of 2020 - you can read my previous blogs for that. Let's look at 2020 report card on my predictions and recommendation I made in " 2020! " and make new ones for 2021. 2020 Report Card: Macro Predictions: All the macro predictions were thrown out of the window since start of COVID pandemic in March. Interest rates are close to zero after multiple cuts by Fed, economy went into shortest recession, unemployment is near 7%. Despite all of these, S&P managed to beat my prediction of 3450 by nearly 10%. And Biden not only became nominee but also won well deserved US Presidency. Stock Recommendations: When it came to stock recommendations, I would say I must have gotten lucky since even I did not expect the way sone of the stocks like NIO, ZS, ROKU and even bigger ones like AMZN, APPL, NFLX, MSFT performed. If one had invested ...

Last month fo 2020 started with Paradox of highs! Here is why I consider it as Paradox: COVID: US daily COVID infections are at all time highs (above 225,000) US daily COVID related death rates are all time high (above 2500) US hospitalizations is over 100,000 - in some regions ICU capacity reaching 85% Many regions are announcing "shelter-at-home" (aka lockdowns) phase Europe is also seeing high number of infections and deaths Asian nations which handled virus quite well (South Korea, Japan) are also seeing increased infections In summary - third wave seems to be lot worse than first two waves and going to get worse before it gets better due to winter and holiday gatherings Markets: All 4 indexes (DOW, S&P, Nasdaq and Russell 2000) reached all time highs on Friday - last time it happened was in 2018 Markets across the world are making new highs  Bitcoin reached all time high; Gold is very close to all time high Even 10 year treasury yield reached 1% (pandemic high) US Ho...

As we are approaching holiday season and end of 2020, markets seem to have already moved into 2021 and as incorporating likely outcomes in 2021 with continued upward movement. Markets are trading close to all time highs (even after discounting last few days of sideway moments). Let's look at the 5 "V" Factors which are at play. Virus: COVID-19 virus would continue to dominate our lives well into 2021. We are into 3rd wave and this wave is even stronger than first two waves. Daily infections in US are over 150,000 and hospitalizations are also increasing at alarming rate. Various states and local governments are going back to curfews and partial lockdowns. Restaurants which saw some signs of life are being shut again. Even Thanksgiving holiday would be different this time with limited attendance at dinners and "no rush" Black Friday to start the most important holiday shopping season. Lack of coherent policy and fatigue of staying at home is causing this surge. ...

Congratulations to President-Elect Joe Biden and Vice-President-Elect Kamala Harris for winning the historic 2020 elections with highest vote count (~75 million). Congrats to American voters for participating with highest turnout (% of eligible voters) since 1900. This is what makes democracy and nation stronger. President Trump - despite his style got over 70 million voters (second highest of any candidate received ever). There was no blue wave as predicted by pollsters losing their credibility once more. Democrats lost few seats in house and did not flip senate yet. Georgia is new battleground with 2 runoff senate races on Jan 5 which would decide control of senate. That could become $300 million election. Georgians have the power to decide the course of nation for this decade. Joe Biden's VICTORY can also be his agenda for next 4 years! Let's break it down the VICTORY agenda V irus Control: COVID-19 Pandemic changed the world, narrative of the election and American Preside...

As history has taught us, empires rise and fall. We had seen this with Roman empire, British Empire, Ottoman empire and many more. Same can be said for companies. But even fallen empires or companies can rise if they can learn from their falls and innovate to prosper the new changing world. Apple had proven this when it came back from its almost bankrupt status in 1997. Let's look at some of companies which have been under decline for years for many reasons - some of which were their own mistakes (GE and Boeing), changing industry (Oil to green), disruptive new industries and behaviors (streaming, online advertisements) and some of them were just unlucky due to COVID which no one was prepared for. Now that companies and populations have learned to live with COVID and 2020 is 2 months away from ending, let's look at some of the companies (old empires) and see how they may perform in months ahead. Basic filter I used to define "empire" is that company must be at least 5...

The 2nd surge of COVID infections is gaining momentum across many countries with US continuing to lead in number of cases and deaths. President Trump's COVID and outbreak at white house in last two weeks demonstrated that even highest and most secure facility in world could not prevent COVID penetration..the blame goes to administration for not taking precautions (the way they would take against terrorist threats). It feels that our own personal house is more safer than White house.  Markets had their best week since July when similar summer surge was happening and it continued to make highs till end of Aug. It a way markets are delinking from COVID story. We are at similar juncture and 4 factors would matter most for future direction. Economy: Q3 economy should show ~25% growth compared to Q2 (when it went down by 30+ % due to sudden lockdowns in March). That would be highest growth ever recorded for US economy. Over weekend, I visited St. Pedro's Square in San Jose Downtown f...

In American political jargon, an  October surprise  is a news event deliberately created or timed or sometimes occurring spontaneously to influence the outcome of an election, particularly one for the U.S. presidency (Source: Wikipedia). Well... it started last week due to unfortunate timing of death of Supreme Court Justice Ruth Bader Ginsberg. President Trump and GOP senate members wasted no time in starting the process of nominating conservative judge Amy Coney Barrett. This by far could become most important election issue and hence can be qualified as October Surprise. Once justice Barrett is confirmed, Supreme Court would be 6-3 with conservative majority (first time in 100 years) and could have long term implications on many key decisions. This is one of the most important policy power Presidents and Senate members have and hence winning these elections matter so much. President Trump is the only president in recent history who got to nominate three Supreme Co...

As mentioned in previous blog, Sept started with its reputation and markets did had some volatility with Nasdaq near correction territory (10% down from peak). In a way its healthy so that some froth is out from market and newbie day-traders can get the lesson that markets do go down also! Apple is back below historic 2 trillion market cap and Tesla is back to pre-split "reasonable" valuation. More on this later... Sept also means start of football (American football...not to confuse with Soccer) season. Normally fall weekends are filled with college football on Saturday and NFL on Sunday. Unfortunately most of the college football is shut down (for legit reasons... no in-person classes..so it doesn't make sense to have in-person games). NFL is taking lessons from NBA bubble season and starting games with almost no crowd. Let's see how it plays out. At least there would be something to watch on Sunday afternoons and Monday/Thursday nights and follow the teams. This ye...

Congratulations Joe Biden and Kamala Harris for Democratic Nomination for President and Vice-President and Best of Luck for winning the elections! Exactly six months earlier S&P reached all time high - that happened in BC (Before COVID). World changed with record unemployment across most of the countries, many folks who have jobs are working from home and close to 800,000 people died due to novel virus COVID-19. But markets don't seem to care...it took 3-4 weeks to lose 34% from Feb 19 to Mar 23 and since then it has not looked back. If you want to see what V-shaped market recovery looks like, just look at S&P chart. It has recovered all the losses and some more and reached all time high last week. And it all can be attributed to select few companies - many of them happened to be in Bay Area. Paradoxically instead of celebrating these with dot.com type excitement, we are all holed up in our houses and packing our bags in case we have to evacuate due to fires burning across ...

Almost every article you may have read regarding current COVID pandemic, you would see references to  Spanish Flu Pandemic of 1918-1919. But I was surprised to read that just 11 years back, we had similarly wide-spread Swine Flu pandemic in 2009. The CDC site gives very detailed information and timeline about this pandemic.   Let's look at some of the comparisons and timelines and learn/predict the course of COVID pandemic H1N1 Pandemic 2009: First case detected in USA on Apr 15. CDC reported to WHO 3 days later 2 weeks later, WHO declared that Pandemic alert The distribution of tests started by CDC in May Jun 11: WHO officially declared it as Pandemic (less than 2 months after first case) Jun 25: Infections reached 1 million July: Reached peak of first wave and Vaccine trials begin Oct: Vaccine approved and second wave started Some school closures but not wide-spread Nov/Dec: 5 vaccines approved and CDC put orders of 100 million doses Aug 11, 2010: WHO officially declare...