7 Weekend Reads
Apple's suppliers have so far spent $16 billion to move from China. "Over the last four years since the start of the pandemic, we estimate Apple's revenues have been impacted by over $30 billion," says TD Cowen in the note. This comes from "undersupplying the market due to production disruptions stemming from component supply, available labor pool, and/or government-mandated movement restrictions."
Ten unsung digital and AI idea shaping business. “But the very excitement around gen AI is in danger of distracting business leaders from some other core business imperatives and the importance of rewiring their companies. For this reason, we thought it might be helpful to take a quick look at ten underlying ideas that might not be dominating the headlines but are shaping the modern business landscape. Some of these ideas represent significant shifts, such as the importance of architecting the business so that everything can be tested, or how to think about a workforce where everyone has their own gen AI “copilot.” Others, like keeping a tight focus on value, relate to business fundamentals that are often overlooked under the stresses of day-to-day demands and technology hype.”
Bringing True Strategic Foresight Back to Business. “As strategy and foresight drifted onto separate paths, companies lost the synergy that originally made each discipline so potent. Just like other iconic duos you already know — Simon & Garfunkel, Kirk & Spock, Sherlock & Watson — strategy and foresight are better together, because they amplify what each element could achieve alone. Strategy without foresight makes companies vulnerable to outside disruption. Foresight without strategy renders scenarios unactionable. Each on its own has value, but our current business environment demands both.”
Will spiking shipping costs cause inflation to surge? “Rising shipping prices from mid-2020 to early 2022 coincided with the surge of inflation in the first place. Their subsequent fall coincided with its decline. Since the Houthi attacks on ships began in November, prices have once again jumped. According to the Freightos Baltic Index (fbx) the cost of shipping a standard container rose by 93% in the week to January 9th. Drewry, a consultancy, notes that for the Shanghai to Rotterdam route, which would usually pass through the Suez Canal, the cost jumped by 114% to $3,577 over a similar period.”
Tech layoffs 2024: Discord, Google, Audible, and others add to bad start for the year. “Any hopes that the layoffs that began in 2022 and accelerated in 2023 would begin to subside have yet to be realized as more major companies joined other big players, including Unity and Amazon, in laying off workers just after the start of the year.”
Is There Any Hope for Hollywood? “Cable TV is shedding viewers by the millions and advertising sales by the billions. The movie business still hasn’t recovered from the pandemic. And streaming, supposedly the answer to all of it, is still losing gobs of money. Even though unions secured huge victories, writers and actors have returned to an industry that should have far fewer jobs… But it could be too late. Everyone is fighting to be one of the three or four streaming services people can’t live without.”
These 11 Tips Will Make You a Better Cook. “Every good cook first masters the basics, like correctly holding a knife, salting your food and getting to know your pans and burners. It might not seem exciting, but we all have to start somewhere. (I promise: Even a pro like Gordon Ramsay once chopped his onions slowly, unevenly and probably with a dull knife.) That’s why the team at New York Times Cooking and I have spent the past year working on a brand-new video series to help you learn to cook, whatever the reason.”
The strategies behind our Thematic Models:
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Consumer Inflation Fighters - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Precision Ag & Agri Science – Companies that look to address shrinking arable land by helping maximize crop yields utilizing technology, science, or both.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The strategies behind our Dividend Income Models:
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.