Monday morning news drop
One Year Since the Bottom One of the big lessons from 2020 is that risk is always present, even if we don’t always feel it. Things were smooth sailing until they weren’t. The other big lesson: Survival is the name of the game. It’s not about maximizing returns or beating the market. It’s about staying the course. And you can only stay the course if you have a course to stay on. (Irrelevant Investor)
Big Market Delusion: Electric Vehicles The “big market delusion” is when all firms in an evolving industry rise together, although as competitors ultimately some will win and some will lose. The electric vehicle industry, with its astronomical growth in market-cap over the 12 months ending January 31, 2021, is a prime example of a big market delusion. In the highly competitive and capital-intensive auto industry, the January 2021 valuations of electric vehicle manufacturers are simply not sustainable over the long term. (RAFI)
What If Housing Prices Aren’t As High As They Appear? Mortgage rates were more than 10% in 1989. So while prices were far lower in the past, borrowing rates were much higher. Taking the median sales price and applying the prevailing 30 year fixed mortgage rate (after accounting for a 20% down payment) shows a different story when it comes to monthly payments: (A Wealth of Common Sense)
If You Look at Your Phone While Walking, You’re an Agent of Chaos An experiment by Japanese researchers revealed how just a few distracted walkers really can throw off the movements of a whole crowd. (New York Times)