Elon

Author

The Idea Farm
May 05, 2024

Together With

“Stoic detachment combined with emotional awareness is the perfect combination for stocks. Feel the fear, but let reason decide.”

— Joel Tillinghast

Research

This is a summary of a presentation by Michael Cembalest covering tech valuations, AI, energy and the US Presidential Election.

Michael Mauboussin analyzes how U.S. public companies acted in the regime of easy money (2009-2021). He emphasizes that companies often use hurdle rates much higher than their cost of capital, and that buybacks will contribute less to earnings per share growth than they did in the period of easy money given today’s valuation multiples and interest rates.

Facts & Figures

The number of bank branches in the U.S. peaked in 2012. Link

Wells Fargo estimates Costco is selling as much as $200 million in gold bars per month. Link

With over 17,000 chargers at about 120 warehouses around the US, Amazon is now the largest operator of private electrical vehicle charging infrastructure in the country. Link

J.P. Morgan has more employees in Texas than Florida. Link

Real estate tycoon Truong My Lan was sentenced to death in Vietnam's largest financial fraud case ever. She was accused of fraud amounting to $12.5 billion - nearly 3% of the country's 2022 GDP. Link

In the last two years, overseas purchases totaled over 2,800 tons — more than all of the metal that backs exchange-traded funds around the world, or about a third of the stockpiles held by the US Federal Reserve. Link

The majority of the top 100 performing stocks in the MSCI AC World Index over the last 10 years have been less than $50B in market cap. Link

China’s stock market is less developed as a percentage of GDP. Link

Robeco breaks out forward earnings yield for different value quintiles in the U.S. and abroad.

As of April 16, 2024

As of April 16, 2024

Where Sophisticated Investors Access Private Markets

10 East is a co-investment platform where sophisticated investors access private market investments alongside a veteran team with a decade+ track record of strong performance. The firm is led by Michael Leffell, former Deputy Executive Managing Member of Davidson Kempner.

Members have the flexibility to participate on a deal-by-deal basis across private equity, credit, real estate, and venture capital.

 Benefits of 10 East membership include: 

  • Flexibility – members have full discretion over whether to invest on an offering-by-offering basis.

  • Alignment – principals commit material personal capital to every offering.

  • Institutional resources – a dedicated investment team that sources and diligences each offering. 

There are no upfront costs or commitments associated with signing up and checking out the platform.

Idea Farm readers can join 10 East with complimentary access here.

Podcasts

4/9/24 - 46 minutes

Elon Musk talks with Nicolai Tangen about AI, Twitter, free speech, the future of space, and more.

3/1/24 - 95 minutes

Larry Cunningham shares how he developed a relationship with Warren Buffett, corporate governance, ESG, and more.

4/5/24 - 48 minutes

Eisman covers the three dominant macro stories today: AI, infrastructure and crypto. He thinks the first two may last a long time, but rejects crypto.

What Else Is Happening