Financial Double Takes Week Of Date (October 7, 2018)

Peter Sayles |

Financial Double Takes

Week Of Date (October 7, 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 MightyTrades’ 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.

Everything.

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:

  • Energy Finance predicts demand for batteries will climb to almost 1800 gigawatts by 2030 – up from about 120 in 2018.

 

  • “Investors have plowed money into U.S. stock exchange traded funds at a rate of almost $12 billion a month since the start of 2017 – 5x as much as 7 years ago.” (Bloomberg)

 

  • “China’s military budget has increased from $21 billion in 1990 to $228 billion in 2017. Yet the share of overall government spending actually decreased.” (Bloomberg)

 

  • “This year, 83% of all new US public listings (IPOs) have been from unprofitable enterprises, the most on record going back to 1980,” according to research by University professor Jay Ritter. (Quartz)

 

  • “U.S. podcast ad revenue totaled $314 million in 2017, an 86 percent upswing from the previous year, and will grow to nearly $660 million by 2020, the IAB says. By comparison, digital audio as a whole saw $1.6 billion of ad revenue in 2017.”

    • “Roughly 55 percent of podcast listeners are men, which is flat year-over-year, according to the report.

      But time spent with podcasts significantly grew among women, from 4.6 hours per week in 2017 to 5.5 hours per week this year, a 20 percent uptick year-over-year. Time spent among men may be reaching a plateau, however, growing 3 percent to 7.6 per hours per week in 2018, the study say.” (Adage)

 

**Here’s our Financial Double Takes for the week of October 1, 2018.

**Here’s our Financial Double Takes for the week of September 24, 2018.