Tag: bubble
Ayoa Review 2023: Features, Functionality, Pricing, and More
‘The Matrix’ Movie Effects Pioneer & Former Magic Leap Exec Reveals ‘Tragic Story’ of Startup’s Recent Struggles
Magic Leap has had a rough couple of years, highlighted by high-profile executive departures, lawsuits, troublesome patent shuffles, and massive layoffs. Despite this, things seem to have calmed down at the augmented reality startup under Peggy Johnson, but there are still questions as to how things went awry under the old regime. • Don't Miss: Magic Leap Experiencing Yet Another Major Executive Shake-Up, Report Says Most former Magic Leap staff have remained tight-lipped, but now one major former executive is finally shedding some light on the situation. Magic Leap's former senior vice... more
Top 20 Coins: Uncommon Core Podcast Episode 15 – Bits on Blocks
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DAMWON Gaming defeats Suning to win 2020 League of Legends World Championship
DAMWON Gaming defeats Suning to win 2020 League of Legends World Championship
On Oct. 31, DAMWON Gaming took down Suning 3-1 to become the 2020 League of Legends world champions. After beating out 21 other teams in the monthlong tournament, DAMWON became the first Korean team to lift the Summoner’s Cup since 2017.
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His National Athlete Background Helped Him Learn Programming
How Can The Market Be at An All Time High and There Be A Freight Recession – Part II
So, how can the stock market be hitting an all time high? I believe it is due to 3 reasons (Warning, I know a lot more about freight than I do about investing but here goes):
- The alternative investment (10yr as a proxy)
- % of the economy which has nothing to do with goods
- The Fed.
This chart compares the Dow Jones Transportation Index to the DJ30 and the S&P500. This is a one year return graph and ends on June 21. As of June 21, the DJ30 is up 6.66%, the SPX is up 7.1% and yet the DJT is DOWN 3.91% Bottom line is investors are shunning transports yet still embracing the overall economy. Why?
The Alternative Investment:
Investors are going to invest. That is what they do and they have two macro alternatives. First, they can invest in the "risk" markets (i.e., stocks) or they can invest in what is generally considered the "risk free" or "near risk free" investment. I will use the 10yr as a proxy for this second grouping. What we have seen recently is not only a 10 year treasury at multi year lows but we are also hearing the Fed discussing lowering the rates even further. This will drive investment dollars away from the "risk free" and into the markets.
It is no coincidence towards the end of last year when the Fed was not only raising rates but also calling for 3 rate hikes in 2019 the stock market tanked. Investors were deciding to move away from risk assets as the risk free was looking pretty good. Not so much any more as the 10yr is now bouncing around the 2% level.
The graph to the left is the graph of the 10 year treasury rates as of Friday, June 21. This movement of rates down has caused money to flow back into the risk asset markets and specifically look at the major move down since mid May. This is when the Fed made it pretty clear the only action they likely will take is a move down in rates.
% of The Economy Which Does Not Have Anything to Do with Shippable Goods:
This one is a bit nuanced. Let's just look at 30 years ago and think about what it meant for the economy to be growing at 3%. It was intuitive that the growth had to have much to do with autos, real hard electronics, housing etc. etc. These are all very "hard" goods which drove the economy.
Today, when we the economy grows at 3% more of it has to do with finance, services and the infamous FANG stocks (Facebook, Amazon, Netflix and Google - Alphabet). Only one of these, Amazon, ships anything. The rest make their money in the "virtual" world. Very important to the economy but not so important to trucking. The graph below illustrates this:
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Non Shipment Economy |
- Economy is slowing
- Investors have to invest in the market to get any kind of return due to the "risk free" paying so low.
- Investors are shunning the transports
- This drives the market to records
- Less and less of the GDP has to do with "shippable goods"
The Fat Prophets Global Contrarian Fund
Personally, Geddes track record is too good to pass up, and I will be making a small investment.