Financial Double Takes Week Of Date (September 17, 2018)
Grant Davis |
Financial Double Takes
Week Of Date (September 17, 2018)
The world of finance and business is a fun thing to watch from the sidelines.
What makes it fun?
Well first let’s give a little context.
There’s a buyer and seller at the end of every transaction. Two people who value the same thing differently – aka subjectively.
The price depends on what the buyer is willing to pay. And what the seller is willing to give it up for.
One farmer may be willing to give up 20 chickens for one cow. Another farmer may be willing to give up 10. Another one may want to give up 100 chickens.
It’s not whether the farmer is “getting a better deal.” It’s what each farmer thinks the value of one cow is.
Multiply this simple example across millions of different assets.
Chickens. Cows. Dollars. Gold. Barrels of oil. Stocks. Bonds. Cars. Homes.
You name it. A market is always made between buyers and sellers.
But sometimes the value two parties see between two items turns into speculation. Which then turns into frenzy. This is where asset price bubbles can form.
Most bubbles form when buyers are willing to pay any price for an asset. All in hopes of selling it to someone else at an even higher price.
Whether it’s tulips in the 17th century. Tech stocks in the late 1990s. Mortgages in the mid 2000’s. Beanie babies. Pokemon cards. Anything.
Looking back… we wonder how people could have fallen victim to these bubbles.
But it all rolls back into what the buyer was willing to pay for it. And what the seller was willing to give it up for.
This is what brings us to our Financial Double Takes column.
It gives cadence to one of Mighty Trades’ favorite financial writers Grant Williams and his letter: Things That Make You Go Hmmm…
Every week we’re going to post facts, articles, or tidbits in the markets that are fascinating. Some that are bullish. Some that are bearish. Some that remind us the sheer size of a company’s operations. Complete government recklessness. Financial bubbles.
It won’t just pertain to stocks. It could private equity valuations. Housing prices too.
Really whatever we find that is a remarkable statistic in the world of finance. Good or bad.
There won’t be any personal bias or commentary.
Just the facts. Do with them as you please.
So, without further ado… here’s a couple things that make us do a double take:
“According to Bloomberg data, foreign-denominated debts have doubled to roughly $9 trillion over the past decade.
Nearly $3 trillion of this total is about to come due over the next two years.”
“This year, the AI market could be worth $7.3 billion, according to research firm Statista. By 2025, estimates put that number at almost $90 billion, more than 12 times higher.”
“By end of 2017, 3,418 Chinese VC funds were launched within the year, raising a combined $243 billion USD or 1.61 trillion RMB. Of the $154 billion worth of VC invested in 2017, 40 percent came from Asian (primarily Chinese) VCs. America’s share? Only 4 percentage points higher at 44 percent.” -John Mauldin, Mauldin Economics (China’s Command Innovation)
Americans waste $73 billion per year looking for a parking spot, new INRIX study finds
INRIX also found that Americans waste more than $20 billion annually on overpaying for parking. And of the 6,000 U.S. drivers surveyed for the study, 63 percent said they avoided driving somewhere due to parking challenges. (Geekwire)
On average, a car with an internal combustion engine uses 55 pounds of copper. A hybrid uses about 110 pounds, and an EV uses 165 pounds of copper. (Katusa Research)
**Here’s our Financial Double Takes for the week of September 10, 2018.
**Here’s our Financial Double Takes for the week of September 3, 2018.