A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web
The Financial Times published a list of the worst global trade ideas of 2019.
There a few that were never of much interest to Canadian investors – a popular bet on Argentine debt an another bullish call on the Brazilian real went badly astray – but it suspect a few domestic investors got burned on the fake meat trade,
“Investors in Beyond Meat have had a roller-coaster ride since the US plant-based meat-substitute company floated on Nasdaq in May, amid a burst of enthusiasm over protein alternatives. At today’s levels, around $76 a share, those lucky enough to have bought in at the initial public offering price of $25 would be sitting on gains of more than 200 per cent.But the shares started to lose their sizzle in late July, after hitting a high of almost $240 a share. Short sellers mounted an assault on the company ahead of the expiry of post-IPO lock-ups in late October, which allowed company insiders and early investors to cash in for the first time”
“Trades to forget: the big market slip-ups of 2019” – Financial Times (paywall)
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I’m still looking for a stock that will benefit from the explosive growth in revenues for the video game industry. Game makers, like Take Two Interactive Software Inc., are like movie companies – one dud release away from profit-related disaster – and graphics chip maker NVIDIA Corp. is too diversified beyond gaming. Still, the growth is incredible,
“The gaming industry headed into 2010 having generated about $20 billion in revenue. Game sales had declined after setting a record by topping $21 billion the year before. Today’s estimates put the value of the global games market at over seven times that, with research firm Newzoo predicting that the industry will bring in over $152 billion this year… By adopting the F2P [free to play] model, a company such as Riot was removing a key barrier to user entry, while also making sure that users were being heard and developers would be held accountable to those users.”
“How free games and streaming services sparked a video game boom that changed pop culture” – CNBC
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A Toronto Star investigative report found that the vast majority of money laundering – even when the culprit are caught – goes unpunished in Canada,
“White-collar criminals have little to fear from the Canadian judicial system, in which nearly all money laundering charges get thrown out before trial, according to statistics obtained by the Star. Eighty-six per cent of charges for laundering the proceeds of crime laid between 2012 and 2017 were withdrawn or stayed, according to data from Statistics Canada’s Integrated Criminal Court Survey. A mere nine per cent of money laundering charges during that period resulted in a guilty plea or a conviction.”
“In Canada, nearly all accused money launderers get their charges dropped” – Toronto Star
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Bespoke Investment Group published a simple but useful chart showing equity dividend yield by country. Canada is below average while the biggest dividend payers include riskier markets – Russia, the United Kingdom, Australia and Spain top the list.
I’m tempted to screen the Brit markets for high dividend payers with lower sensitivity to Brexit in search of income-related deals.
“ @SBarlow_ROB This chart from @bespokeinvest shows dividend yield by country. Canada is below average.” – Twitter (chart)
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Diversion: “My Semester With the Snowflakes: At 52, I was accepted to Yale as a freshman. The students I met there surprised me” – Medium
Tweet of the day:
Scott Barlow