Nevstar Links 23 August 2024
Welcome back to the Nevstar Links, your guide to some of the best articles on markets and investing available on the internet.
Today is the 23rd August and it marks a rather important day in the history of humankind. On this day in 1991, the World Wide Web was released to the public. Invented in 1989 by English computer scientist Tim Berners-Lee, the Web was designed to allow simultaneous use of information held on independent computers by multiple users. The technology was developed while he was working CERN and subsequently shared with other research institutions in 1989 and the wider public in 1991. So as you peruse the links today hosted on that very same Web, give a nod of silent thanks to the remarkable visionary scientist that made the sharing of unlimited information available via a single click.
Onto the links for this week which has articles on attention, bonds, and coffee.
Stop Paying Attention
Excellent piece from the Behavioural Investment website focusing on the inclination of investors to closely follow financial market movements and determine that changes to their portfolio need to be made as a result. The reality is, for the majority of investors, the daily/weekly/monthly market gyrations can safely be ignored.
"Even the areas that the industry treats as the most important thing in the world - such as what the Fed will do at its next meeting - just don't matter that much to fundamentally driven investors with long-run horizons."
Why Investors Will Always Buy Bonds Even As Debt Swells
There has been much discussion in the investor class about surging budget deficits globally, particularly in the United States which now must finance close to US$2 trillion dollars of deficits annually. One school of thought suggests that interest rates must rise to continue to attract such large amounts of capital. This article does an excellent point of arguing the contra, noting that there will always be buyers for Government debt.
"You would likely have earned some income while you held it. Earning an income and receiving the par value of your principal might not seem like a big deal, but it helps. Ask a man who succumbed not once but twice in three decades to the siren call of fuel cells."
The Death of the Magazine
Really interesting story on the slow death of a major media property which we have all had multiple interactions with over time - the magazine. The entire industry is simply fading away and even the market leaders are seeing declining readership. But this is occurring when demand for long form articles is actually increasing. It's the medium, not the content that is the issue. Fascinating stuff.
"In the year 2024, the traditional magazine is rarely the best platform for serious journalism-and that's true for both print and digital media. The legacy outlets are all chasing short form 'content' (ugh!) now, and have lost confidence in good writing."
Can Starbucks' new CEO Revive the Company
One of the more interesting business stories of the week was the sudden appointment of Brian Niccol as CEO of Starbucks. He was lured away from his role as head of restaurant chain Chipolte with a massive pay package and some lofty expectations. Indeed the Starbucks share price rose 25% on news of his appointment. Good article from The Week on the challenge facing the new occupant of the corner office at a global multinational.
"There are still challenges for Starbucks - and for Niccol, as Starbucks is a much more complicated model than Chipotle, with company and licensed stores, domestic and international locations, and a significant presence in struggling China."
The Porsche Family's Race To The Top
Another excellent profile piece - this time on the car maker Porsche. The name epitomises high performance sports cars to this day while the influence of the Porsche family over the global Volkswagen brand is fascinating. Highly recommended particularly the section on the infamous VW short squeeze of 2008.
"The Volkswagen short squeeze of 2008 is one of the most dramatic and extraordinary events in financial history. This financial manoeuvre saw Porsche secretly amass a controlling stake in Volkswagen, leading to a historic short squeeze that caused Volkswagen's stock price to skyrocket and briefly made it the world's largest company by market cap."
Quote of the Week
"The perfect race car crosses the finish line first and then crumbles into its individual parts."
Ferdinand Porsche
That's all for this week.
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Have a great weekend.
The Nevstar
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