Investors have caught the risk bug

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Ritholtz Wealth Management director of institutional asset management Ben Carlson is wondering whether investor sentiment is now the inverse of post-great depression,

“Self-imposed pundit deadlines have come and gone yet household appetite for risk remains strong. Now it’s just wait until there’s a once-in-a-lifetime crash like the Great Recession ... My question is this: What if it’s secular? What if an entire generation of people experiences the opposite of the Depression Babies? What if the pandemic flipped a switch in people who are more willing to take risk? What does that mean going forward? … After peaking at 63 per cent in 2004 following a massive increase in stock market ownership from the 1990s boom times, the household share of stocks fell to 52 per cent by 2016. The 2008 crisis also left some scars. Now it’s all the way back up to 62 per cent as a new generation of investors has entered the market … Bitcoin is likely the first ever financial asset that was owned by retail before institutional investors. Many of the early bitcoin investors are younger. They’ve been rewarded with gigantic returns but also some bon-crushing crashes … In 2019, the amount of money wagered on sports betting was less than $1-billion. In 2024, it was nearly $150 billion. People are more comfortable with risk. They’re more comfortable with volatility. They’re more comfortable spending money”

“Pandemic Babies & a Bull Market in Risk” – A Wealth of Common Sense

Former professor and investor Mark Rzepczynski covers the renewed central bank interest in the ‘barbarous relic”,

“The latest survey on central bank behavior and gold shows that 3/4ths will increase their gold portion of total reserves. It is higher simply because the price of gold is higher; yet, we are seeing more central banks increasing their gold exposure. Where is it coming from? … The explosive increase in gold prices is simply [that] there is a shortage of this “safe asset” relative to supply. There have been pockets of lower demand, but central banks are price-insensitive 800-lb gorillas in the gold marketplace. This is more than an inflation hedge, but for many EM central banks, a sanction hedge.

“Gold and central banks - Do what we do not what we say” – Disciplined Systematic Global Macro Views

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Morgan Stanley’s daily research summary included some promising developments for common health care treatments,

“MS Research Analyst Patrick Wood’s new deep dive into the endoscopy market shows material growth ahead with disruptive new tech potentially driving billions of dollars of marginal sales to MDT (OW [overweight], $98 PT) and ISRG (OW, $650 PT) over time. He explains that endoscopy is the medical practice of visualizing (with a scope) or performing surgery through one of the body’s natural orifices. He points out that it’s a space that while often overlooked, is highly dynamic at comfortably more than $30-billion in sales and growing 5-10 per cent. Patrick highlights 4 key themes shifting billions of dollars in value: 1) He believes endoluminal robotics will allow ISRG to take incremental share in the surgery market, particularly around areas like ESD (endoscopic submucosal dissection) in the US, translating to a combined more than $5-billion sales opportunity (c. $2bn in GI, $3-billion in global bronchoscopy), and hitting some of the surgical players, such as STE (EW, $260 PT) and MDT; 2) He thinks MDT’s suppliers may be close to cracking solid-state batteries, which along with AI (GI Genius) could shift the Capsule Endoscopymarket into a c. $2-billion opportunity that nobody is expecting; 3) Patrick expects continued single-use endoscopy share gains, broadly aiding challengers Ambu A/S (Not Covered) and BSX (OW, $125 PT) in the space relative to existing re-usable players; and 4) He thinks the new liquid biopsy guidelines could potentially help drive millions of incremental endoscopy tests globally, along with downstream procedures, adding a HSD contribution to category organic growth and helping almost all incumbent players, such as Olympus, BSX, and STE”

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Bluesky post of the day:

Diversion: “Earliest evidence of humans in the Americas confirmed” – Phys.org