Mo’ Momentum Markets

Author

The Idea Farm
August 25, 2024

Together With

“Having, and sticking to, a true long-term perspective is the closest you can come to possessing an investing superpower.”

— Cliff Asness

Research

We apologize for sharing the wrong link for The CEO Macro Briefing Book by UBS last week. Please view the piece here. As a bonus, read their more recent piece on recent market performance below.

Jason Draho explains why markets are now more prone to rollercoaster swings between momentum pushing asset prices higher followed by sharp reversals, why he believes it will persist, and what the implications are for investors.

Rob Arnott demonstrates index deletions have historically beaten the Russell 2000 Value Index in ‘spectacular fashion.’ He dives into the reasons why and explains Research Affiliates’ new strategy based on this.

This looks at potential sources and drivers of relative performance in the S&P 500 Equal Weight Index—ranging from market concentration to sector, factor and single-stock perspectives.

Facts & Figures

Uber’s advertising run rate is now over $1 billion. Link

Kentucky has the highest concentration of people with weight-loss drug prescriptions in the country. Link

1 million people now owe more than $200,000 in federal student loans. Link

Sequoia distributed more than $43 billion to its investors over the past five years, including $10 billion in 2023. Link

"The world’s largest private capital firms have avoided income taxes on more than $1tn in incentive fees since 2000..." Link

As of June 12, 2024

8.5% of U.S. homes are worth $1 million or more, the highest share of all time. Link

As of June 30, 2024

Dividend yields in various markets since 2019. Link

Source: Morgan Stanley Investment Management. As of 5/31/24.

Hermès raised prices of Birkins handbags by around 20% in January, but it hasn’t affected the secondary market profits. Link

As of June 22, 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

8/16/24 - 21 minutes

Planet Money covers the rise of fintechs that might resemble banks but aren’t, and what the fintech industry reveals about banking regulation.

7/31/24 - 65 minutes

General Catalyst’s CEO covers the motivation behind GC's focus on critical industries such as healthcare, the value of a long-term approach to building deals and relationships, and more.

3/21/2024 - 37 minutes

Adam Grant shares what great entrepreneurs have in common and why “growth is not about the genius you possess; it’s about the character you develop.”

What Else Is Happening