A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Billionaire Mark Cuban is best known for his courtside antics watching his NBA team, the Dallas Mavericks. Investors shouldn't forget, however, that Mr. Cuban is a tremendous blogger and his 2008 post "How to Get Rich" is, for my money, the best, most concise advice for young people on the discipline, effort and determination it takes to acquire outsized wealth.
Wednesday, Mr. Cuban turned his attention to the current state of technology markets with an ominous warning – the current tech bubble is worse than the 1990s ridiculousness:
"All those angel investments in all those apps and startups. All that crowdfunded equity. All in search of their unicorn because the only real salvation right now is an exit or cash pay out from operations. The SEC made sure that there is no market for any of these companies to go public and create liquidity for their angels. The market for sub-$25-million raises is effectively dead… the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity."
"Why this tech bubble is worse than the tech bubble of 2000" – Blog Maverick
The problem with energy investing right now is that, no matter what your view, there are highly credible experts to support it. For the bullish, consulting firm Wood Mackenzie predicts Brent crude will reach $68 (U.S.) per barrel by the end of 2015 and average $71 for 2016. For the skeptical, Exxon Mobil CEO Rex Tillerson noted,
"There's a lot of supply out there and I don't see a particularly healthy economy…My opinion is, people have to kind of settle in for a while [at current prices], and I can't tell you how long that's going to be."
Mohamed El-Erian, highly respected Allianz SE executive and former co-leader at PIMCO, is also in the lower for longer camp according to his Thursday column for Bloomberg.
"Expect continued consolidation, though volatile at times, with a tendency toward higher oil prices over the course of the year. Second, there will be no quick return to the $100 level. Third, low-cost producers of oil and traditional energy products will expand their market share."
"Oil price: Mapping the new landscape" – Wood Mackenzie
"Exxon looks to U.S. shale fields to drive global growth" – Bloomberg
"Where oil prices go from here" – El-Erian, Bloomberg
Chinese premier Li Keqiang was uncharacteristically blunt about the challenges facing his nation's economy,
"'Over the past year we have faced more difficulties and challenges than anticipated,' Mr Li told the National People's Congress. But 'with downward pressure on China's economy building and deep-seated problems in development surfacing, the difficulties we will encounter in the year ahead may be even more formidable than those of last year.'"
As an obsessive follower of web traffic data here at the Globe and Mail, I can report that Canadian readers are bored with the "China is slowing" meme. But China remains the largest consumer of almost any commodity you can name, and the S&P/TSX Composite remains hugely weighted towards resources despite recent stock price weakness. I would strongly urge domestic investors to follow China's economic progress, or lack thereof, to avoid waking up one morning and finding their portfolios have been blindsided.
"Chinese Premier Li Keqiang lays out flaws in country's economic model" – Financial Times
In another China-related report, The Economist cites projections that in the near future, half the world's feed stock will be needed to feed China's pigs. The long term agricuoltural investment theme continues to take shape, but it's also too early to start investing because of low expected North American corn planting.
"Empire of the pig" – The Economist
Tweet of the Day: "@IvanTheK: Truncated. RT @AP: BREAKING: APNewsBreak: Ringling Bros. Circus eliminating elephant acts by 2018 amid public concerns.""
Diversion: "Like humans, apes make irrational economic decisions" – The Atlantic
Follow Scott Barlow on Twitter @SBarlow_ROB