GROUND HOG DAY!!

I feel I am living in a modern version of the 1993 movie Ground Hog Day, where a weatherman (Bill Murray) wakes up in a small town and realises that he is reliving the same day over and over. Every day is the same with depressing reports of the Covid-19 cases continue to explode worldwide, while politicians and medical experts warn of dire days ahead. News stories focus on either promising news of vaccines ahead (yeah!) or a huge increase in fatalities as American Thanksgiving approaches (sigh). Last, but not least, daily media debate on the US elections, still not over after almost three weeks.

So, this week, as a distraction, I thought I would talk about another thing that makes me go Hmmmmm? Electric Cars (EVs).

Tesla’s stock market value is $440 Billion plus, which is now more than GM, Ford, Toyota and Volkswagen combined. The company will sell, at most, 500,000 vehicles in 2020; GM alone will sell around 7 million and Toyota north of 10 million. There are three other notable, publically traded Chinese EV manufacturers and all with some major backers: NIO market value $67 billion, XPeng $39 billion and Li Auto $31 billion. There are also a number of companies developing their own versions of EVs, all funded by private equity (a couple are publicly traded). The estimated value of these companies combined is about another $33 billion. Put it all together and that’s a lot of billons and a lot of competing companies.

In addition, all the current major manufacturers are developing their own green vehicles. For those who remember the history of automobiles back in the early part of the last century, you will know it is going to end in tears for a great many of these current players. That will result in the loss of billions of dollars for the investors. I have written previously of my opinion that the recent headlong rush of Pension funds and Institutional Money Managers into Private Equity will end badly, just as it did for their foray into Hedge Funds a few years back. I am confident that many of these investments in Electric Vehicles will be a notable part of their reported losses in the next few years.

And what of financial markets last week? It was a minor losing one for most US equities, but a continuation of last week’s winning streak for global markets and foreign currencies. Commodities lead the way with oil and copper being the notable winners. The pandemic has caused a huge investment inflow into the benefactors of the economic shutdown, and thus the spread in valuation between US growth companies (technology mainly) and value companies (industrials, financials, materials etc.) is the highest ever!! I believe that this valuation spread will narrow considerably in 2021 and developed, non-USA, countries, which have much higher weightings in the value sector, will do very well along with US value companies. The out-performance of these sectors and global indices over the last two weeks is, in my opinion, the early beginnings of this trend.

November 16, 2020 - Vaccine Pop

November 9, 2020- The American Way

November 2, 2020- PPE

October 26, 2020- Crunch Time

October 19, 2020 - Counting

October 13, 2020 - Shake It Off!!!

October 5, 2020 - The Line Holds For Now - However!!

September 28, 2020 - It's All About 3 Key Words

September 21, 2020 - A Second Wave?

September 14, 2020 - Not A Lot To Cheer About

September 9, 2020 - Hump Day then Thump Day

August 31, 2020 - ASA Coming To The Fore

August 24, 2020 - The Debate Intensifies!

August 17,2020 -Potpourri

August 10, 2020- When Bad News is Good News

August 4,2020 - Three Records of Note

July 27, 2020 - Vaccine Vs Virus - Round 2

July 20, 2020 - Vaccine Vs Virus-Fight On!

July 13, 2020- A Week of Highs & Lows

July 6, 2020 - Economy VS Covid Cases

June 29, 2020 - A Bridge Too Far

June 22, 2020 - What Me Worry?

June 15, 2020-Reality Check??

June 8, 2020- It's All About The Workers

June 1, 2020 - Can We Bank on The Banks??

May 25, 2020- A Very Good Week For Stocks

May 19, 2020- Hedgehoppers Anonymous

May 11, 2020 - Was Monty Python Right?

May 4,2020 - Balancing the Teeter-Totter

April 27, 2020 - Oil - Another reason...

April 20, 2020- The Curate's Egg

April 13, 2020- Governor Cuomo Knows Best

April 6, 2020-  Stock Markets - It's a Teeter-Totter

March 30, 2020 - Stuck Like Glue

March 23, 2020-As Always, Bob Dylan Has The Answer

March 16, 2020 - Show Me The Money

March 9, 2020 - Interest Rates-The Race to Zero

March 2, 2020 - The Unknown Unknowns

February 24, 2020 - It's Always The Unexpected

February 18, 2020 - Oh (Dear!) Canada

February 10, 2020 - Sick Or Not I'm Going To Work

February 3, 2020 - A Turn For The Worse

January 27, 2020- Run For The Exits!!

January 20, 2020 - All Aboard!!!

January 13,2020 -  The Year That Was - A Wall of Worry

December 16, 2019 - Dear Santa

December 9,2019 - Those Who Live by The Tweet...

December 2,2019 - Taylor Swift

November 18, 2019 - Like The Duck in the Pond

November 11, 2019 - A "RISK ON" WEEK

November 4, 2019 - What About The Workers?

October 28, 2019 - Trick or Treat

October 21, 2019- The Gains Continue

October 15, 2019 - All We Are Saying.....

October 7, 2019 - Saved By The Workers!!

September 30, 2019 - Second Verse Same As The First!!

September 23, 2019 - About Face!

September 16, 2019-UP In Smoke

September 3, 2019 - The Sleeping Giant is Awake

August  26, 2019 -WOW!

August 19, 2019- "Do I Feel Lucky? Well,do ya, punk?"

August 12, 2019- Recession Rumblings

August 6, 2019-Coin Toss Part 2 - It came up HEADS!! = Bonds

July 29,  2019 - THe US Economy and Stocks (still) Lead The Way

Coin Toss- HEADS = Bonds  TAILS = Stocks

A Short USA Holiday

July 2,2019 - A Friday Rally Helped Cap An Impressive Month of Gains

June 24 - The Only Missiles Launched last Week were Financial Ones!! Whew!!!

June 17 - The Calm Before The Storm

June 10, 2019 - The Powell Put #2

May 29, 2019 - What To Do For An Encore

May 27,2019 - Let's Make A Deal

May 13, 2019 - When Elephants Fight