Hello RON, got a new motor
by Doug Brodie
/1. How can you lose $430,000,000,000 and not get fired?
So as everyone was chasing up Nvidia’s share price (someone bought at the top), the existing investors were thinking otherwise and sold off enough stock to drop the value of the firm by almost 20% in just two days. Applied to its market cap, it means that $430 billion in value has been lost in those hours – even if not the top (I think Elon holds that), this must be pretty close to the most amount of capital that has ever been lost in one company in 48 hours.
Obviously, if you’re in a US tracker you may well be the person who bought this at the top – that’s the point of passive investing, you ignore market movements.
Photo courtesy of Yahoo!
/2. Mortgage? Try this for size - $1 trillion interest only.
Like spending on a credit card over Christmas, eventually, the collector calls. This chart shows why governments are very, very encouraged to keep the lid on interest rates, and why central bankers need to include sovereign debt in their considerations.
In context, there are 161 million people working in the US, so the annual interest bill now is now $6,211 per worker, per year.
(Q. “How many people work for you?” A. “About half?”)
There’s clearly a major difference between the US and Euro area; as much as the interest bill is rising, so is the projection of the US government’s debt. We don’t like debt, even though Japan has demonstrated the ability for a government to function with 200% debt/GDP.
We still don’t like it.
/3. How to create a small fortune
Start with a large fortune and build electric vehicles.
Sometimes pictures cut to the quick better than words.
Picture 1
With thanks to Vincent Galen for putting this together.
Then we have Picture 2.
I can’t remember who posted this up on LinkedIn, so thank you kindly whoever you are, this is so…relevant.
When they ask who took all the money, it’s the financial engineers who put together the IPOs and SPACs for the above. Hot air. Who were the investors who put up the initial investment cash to start these prices? Not the pension funds we use. This is toxic, and the SPACs all had red flags flying saying ‘Stay away, we’re toxic’, however, there’s always someone who thinks he knows better.
/4. Delete the pension app
I’ve posted this often before, it’s drafted by the articulate Simon Evan-Cook. The point is that investment prices move every minute of every day, so the more often you look the more often your pension / investment value has moved. The more you see it moving the more anxious you become, and from anxiety you’ll not make better decisions.
In his thirteenth letter, ‘On groundless fears’, Seneca wrote:
‘There are more things … likely to frighten us than there are to crush us; we suffer more often in imagination than in reality.’