Pension Performance

China, Andrew Lo, Ben Inker, Regional Banks, VC, Holiday Cards & More

Author

The Idea Farm
December 24, 2023

“If you're a short term investor, you chase earnings. If you're a long term investor, you chase valuations.”

Jeremy Siegel

Research

FTSE Russell analyzes the reasons for investing in China through the lens of the latest economic reforms, capital market expansion and opening-up to foreign investors, and the potential for equity market diversification benefits. Then, they share some thoughts on implementing a strategy to get exposure to the Chinese equity market.

This study analyzes the investment allocations and realized investment performance (net of costs) across aggregate asset classes covering over 200 public and private sector pensions totaling ~$4.4 trillion in assets at the end of 2021 (there are $39.4 trillion total retirement assets in the U.S. and of that, $11.8 trillion are held in pensions). There are four pages of commentary, followed by tables.

Facts & Figures

"The four most prominent investors, Tiger Global, D1 Capital Partners, Dragoneer Investment Group, and Coatue, have participated in just 76 VC deals this year, representing an 86% decline since their 436 deals in 2022." Source: Pitchbook

The Norwegian Sovereign Wealth Fund owns 1.5% of all public equities worldwide and 2.7% of all listed companies in Europe. Source: Capital Allocators

“According to Goldman Sachs, roughly half of debt issued by S&P 500 companies is not due to expire until after 2030.” Source: Goldman Sachs

Amazon accounts for about 11% of UPS’s revenue. Source: WSJ

Americans spent $1.1 billion on holiday cards in 2022. Source: Bloomberg

Was the death of U.S. regional banks exaggerated? Link

Source: Totem Macro

2023 (so far) is the 2nd worst year for Equal Weight vs. Cap Weight, and also 2nd worst year for Rus 1K Value vs. Growth.

Source: Leuthold Group

Charlie Bilello shared the best performing stocks in the S&P 500 over the last 30 years (through November 2023). Link

“Performance in developed markets excluding the U.S. has been much less concentrated year-to-date: the top 10 companies in the index are up 13.7%, while the remaining stocks are up 6.7%.” Link

Podcasts

12/12/23 - 59 minutes

GMO’s Ben Inker talks about the quality factor, how extreme the performance of the Magnificent 7 stocks has been, growth traps, the relationship between value/growth and the level of interest rates, and more.

12/10/23 - 126 minutes

In this special tribute, William Green celebrates the life & legacy of investing legend Charlie Munger by sharing stories about Munger from himself, Mohnish Pabrai, Tom Gayner, Joel Greenblatt, & Chris Davis.

12/1/23 - 65 minutes

MIT Professor of Finance Andrew Lo discusses his application of portfolio theory to address the challenges of funding drug development. He also explains how a Netflix subscription model can address the coming crisis in funding high-priced curative therapies approaching the market.

What Else Is Happening