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Buybacks and Issuance
The Idea Farm
August 11, 2024
Together With
“One day, in retrospect, the years of struggle will strike you as the most beautiful.”
Research
Morgan Stanley - Which One Is It? (20 pages)
Michael Mauboussin researches companies that both issue and retire shares around the same time, finding that companies with low stock-based compensation issuance and high buybacks delivered the highest average and median total shareholder return. Mauboussin starts off his podcast with Meb on this topic.
As of July 24, 2024
GMO compares the S&P 500 today to 2000, looking at market concentration, fundamentals and valuations. They note the median P/E ratio of the top 10 stocks was 60x in 2000, but today it is 27x.
Cornell Capital Group explains why they’re cautious about the market given various valuation and economic indicators.
As of June 30, 2024
Facts & Figures
Nearly 400,000 guests are staying at Airbnbs in Paris for the Olympics, equivalent to 5 Olympic stadiums. Link
Olympians who win a medal will take home a real piece of the Eiffel Tower. Each medal includes 18 grams (0.04 pounds) of the Eiffel iron. Link
Between 2017 and 2021, Amazon had more than $25 billion in losses from its devices business (Echos, Fire TV Sticks, video doorbells, Kindles), according to The Wall Street Journal. Link
Apple has spent more than $20 billion to produce original TV shows and movies. However, Apple TV+ generates less viewing in one month than Netflix does in one day. Link
How different are the Largest 7 stocks from the 2000 bubble compared to today? Link
The business cycles in China and India are decoupling after having grown in sync for decades. Link
Liquidity Pain: the portion of endowments’ private equity allocations that are unfunded, and that amount compared to liquid assets in an endowment. Link
The decline in JGB yields on August 2nd and 5th was the the biggest two-day fall this century.
"The US is imposing sanctions at a record-setting pace again this year, with more than 60% of all low-income countries now under some form of financial penalty, according to a WaPo analysis."
Source: The Washington Post
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Podcasts
 3/25/24 - 54 minutes | West is the former President of the Santa Fe Institute and author of Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and Businesses. He walks through the power laws behind living organisms, cities, businesses, and technologies. |
 1/10/24 - 43 minutes | In a rare interview, Steven Cohen, CEO of Point 72 Asset Management, offers a rare glimpse at how he approaches his craft. |
What Else Is Happening
Did you miss last week’s email?
Meb Faber spoke with Michael Mauboussin about stock market concentration, stock buybacks, attributes of great investors, and more.