The Most Enviable Of All Titles
Monday Market Recap: February 17, 2020
Highlights
Pier 1 Imports files for bankruptcy with plans to sell the company. Two months prior it planned to close 450 stores.
All 3 major market indices hover at record highs on belief coronavirus will be contained. Chinese stocks have also risen to +2% after declines of -10%.
The travel industry expects a loss of $6B in spending as a result of fears on the coronavirus outbreak.
The short-term impact from the coronavirus outbreak – thus far mostly stemming from China’s containment measures – will likely play out in coming quarters. Based on what’s known so far, this won’t derail, but will most likely delay a growth uptick that should take root this year. China’s central bank has already started to ease policy, and we are likely to see more support from Chinese authorities to shore up growth. However, the key question is: How extensively will the outbreak spread beyond China?
The coronavirus outbreak may also pose medium-term risks. Potential disruptions to global value chains could drive up prices – and push companies that suffer from these disruptions to build up higher stockpiles and start to rethink their just-in-time inventory management systems (think Amazon Prime). This adds to the potential disruptions to global supply chains from trade protectionism. One possibility: Growth slows and inflation rises. This might pressure the negative correlation between stock and bond returns over time, reducing the diversification properties of government bonds particularly outside the US.
Chart of The Week
The company Volkswagen (which owns VW, Audi, Porsche, Bugatti, Skoda and many others) is currently valued at about $8,400 for every car it sells a year. For Tesla, its valuation is closer to $380,000 for every car that it sold.
What I’m Reading – Why We Swing for The Fences – Bill and Melinda Gates Foundation
Over the last 20 years the Bill and Melinda Gates Foundation has given away over $50 Billion Dollars, towards scholarships, charities, and global health initiatives. How do you spend this much money? How do you decide who deserves a finite number of resources? More importantly for Bill and Melinda – How do you spend MORE?
Last year we received a glimpse of what it is like to see Bill on his daily routine and some personal insight on the past (See Inside Bill’s Brain). However in this piece we receive an inside look on his new role, the work the Gates Foundation has achieved over the last 20 years, and an outline for the work that is still left to do.
Covering health, education, climate, and gender issues throughout the world, the Gates Foundation looks to tackle big problems and provide innovative solutions. How will you swing for the fences this year?
What I’m Watching – Uppity: The Willy T Ribbs Story
One of the most powerful stories in sports history. Willy T. Ribbs was the Jackie Robinson of auto-racing who shattered the color-barrier in an all-white sport. Willy was referred to as "Uppity" behind his back by mechanics and other racers. He overcame death-threats, unwarranted suspensions and engine sabotage to go after his dream. Ultimately, Willy beat the people holding him back and became the first Black driver to win a Trans-Am race, test a Formula One car, and race in the Indy 500.
What I’m Listening To – Striving vs Self Acceptance – Brene Brown and Tim Ferriss
Brené Brown studies human connection -- our ability to empathize, belong, love. If you haven’t seen it already, she has one of the top TED Talks of all time with over 45 Million Views.
My take away from this was Brown’s use of the 80/20 rule. Not for performance or efficiency, but for feeling. When working with a spouse, partner or even a team, it is important to check in on how the other is feeling. If you are feeling a “20” it’s up to you to let your partner know so they can fill in the “80”. Most importantly if you both don’t add up to “100” make sure to have a plan to get you both back to where you need to be.
“I hope I shall possess firmness and virtue enough to maintain what I consider the most enviable of all titles, the character of an honest man.” – George Washington
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