The hottest Investment Analysis Substack posts right now

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the biggest business myth is that PE-backed companies are well run

Five Links (and three graphs) by Auren Hoffman • 121 implied HN points • 22 Jun 25
💼 Business Private Equity Company performance Corporate strategy Investment Analysis
  1. Private equity (PE) companies used to be seen as well-run, but many are now poorly managed and bloated. Unlike the past, there's no guarantee that a PE-backed company is better run than others.
  2. PE firms today often focus more on financial engineering and increasing their fees rather than actually improving the companies they buy. This has led to companies becoming more complicated without much actual performance improvement.
  3. If a top PE firm acquires a company from another top PE firm, the acquired company may not be able to provide significant improvements. The trend shows that the initial efficiency that PE firms once promised is largely missing now.

Market Movers - 12 October 2024

The Wolf of Harcourt Street • 539 implied HN points • 12 Oct 24
💰 Finance Market Trends Investment Analysis Consumer behavior
  1. MercadoLibre in Argentina is seeing a boost in consumer spending after a tough few months, with more people buying and selling on its platform.
  2. Nubank has made it easier for customers to increase their credit limits by using government bonds as collateral, giving them more financial flexibility.
  3. InPost is dominating the logistics market in Poland with a huge share of parcel deliveries and is investing in new facilities to handle growing demand.

Think of It as Generating Our "Investment Surplus", Not as Our "Trade Deficit"

Brad DeLong's Grasping Reality • 146 implied HN points • 04 Jun 25
💰 Finance Economic Policy Global Trade Investment Analysis Financial Stability
  1. Think of the trade deficit as an investment surplus instead. This way, we can see the benefits of foreign investments in the U.S. economy.
  2. A current-account trade deficit actually reflects an investment surplus by nature. This means that money from foreign exports is being used to buy U.S. assets, which can help keep interest rates low.
  3. While there are some costs linked to trade deficits, such as job losses in certain sectors, it's also important to recognize that investments can lead to new technology and greater economic strength in the long run.

Is Someone Attacking the Comex? January Sees $5.2B in Gold Deliveries

QTR’s Fringe Finance • 36 implied HN points • 03 Feb 25
💰 Finance Market Trends Investment Analysis Economic Forecast
  1. January saw a huge amount of gold delivered at $5.2B, which is unusual for a minor month like this.
  2. There's been a consistent trend of new contracts being opened and settled for delivery instead of the usual early demand drops.
  3. The Comex has restocked its gold inventory significantly, which raises questions about future deliveries and potential market impacts.
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The Seven Samurai: Big Tech to the Rescue!

Musings on Markets • 1538 implied HN points • 09 Feb 24
💰 Finance Investment Analysis Stock Market Economic Trends Company Valuation
  1. The 'Magnificent Seven' stocks, which include major companies like Apple and Amazon, significantly boosted the US market in 2023. They contributed to over half of the market's growth, highlighting their importance in investing.
  2. These companies have shown strong performance not just recently, but over the past decade. If investors didn't include these stocks, they likely missed out on significant gains.
  3. Despite their past success, investors should be cautious. Valuations for these companies are high now, and prices may drop if they don't meet the high expectations set by the market.

Everyone Thinks They Are Underfunded

Superfluid • 13 implied HN points • 05 Jun 25
💼 Business Venture Capital Startup Growth Market Trends Investment Analysis
  1. Many businesses feel underfunded, but the real issue is how capital is allocated, not its availability. Some sectors get much more funding than others, leaving some companies behind.
  2. There's a growing trend where venture capital is moving towards non-traditional tech areas. Companies in industries outside the usual tech focus can attract investment if they use technology creatively.
  3. If you're a founder feeling underfunded, remember there are other funding sources besides VCs. Being resourceful and strategic can help you grow your business sustainably, even without large amounts of capital.

Freddie Mac House Price Index Increased in December; Up 4.0% Year-over-year

CalculatedRisk Newsletter • 33 implied HN points • 31 Jan 25
💰 Finance Real Estate Market Trends Economic data Housing Prices Investment Analysis
  1. The Freddie Mac House Price Index went up by 4.0% in December compared to last year. This shows that home prices are rising again after a period of decline.
  2. Most of the cities with the biggest price drops are in Florida, with Austin being the worst performer overall. This indicates that some areas are struggling much more than others.
  3. As more homes become available for sale in 2025, the growth in house prices might slow down. So even though prices are rising now, that might change in the near future.

November 2024 New Home Sales

Erdmann Housing Tracker • 42 implied HN points • 24 Dec 24
💰 Finance Real Estate Market Trends Investment Analysis Economic Indicators
  1. New home sales are low, but this is not always a bad sign. It could mean there's room for growth in the market.
  2. There's a high inventory of homes available, giving buyers more options. This can lead to better deals for those looking to purchase.
  3. Having a lot of homes for sale can create competition and could eventually lead to a more balanced housing market. It's important to watch how this evolves.

Why Do You Need a Moat? & Why Are Founders Afraid to Talk About It? | VC Jobs

Venture Curator • 219 implied HN points • 16 Apr 24
💼 Business Venture Capital Tech Innovation Investment Analysis
  1. Having a moat is crucial for startups to maintain a competitive advantage over competitors, and founders should be able to clearly communicate this to investors.
  2. Successful companies need strong moats, which are built by having bold statements or visions that provide a unique and valuable experience for customers.
  3. Equity among co-founders should be split equally or close to equal, focusing on the work and challenges ahead rather than early contributions.

Country Risk: A July 2023 Update

Musings on Markets • 739 implied HN points • 26 Jul 23
💰 Finance Risk Assessment Investment Analysis Economic Factors Political Risk Global Markets
  1. Country risk factors include political systems, corruption, legal protections, and violence, which all affect how safe it is to do business in different countries.
  2. Democratic countries often have continuous risks from changing governments, while authoritarian regimes can present sudden and severe risks, making it tricky for businesses to decide where to invest.
  3. Corruption adds hidden costs to businesses operating in affected regions, making it crucial for companies to understand both the visible and hidden risks in their chosen markets.

Homebuilder Earnings Update

Erdmann Housing Tracker • 42 implied HN points • 06 Dec 24
💰 Finance Housing Market Economic Trends Investment Analysis Market research Real Estate
  1. Homebuilder earnings are being updated, which is important for understanding the housing market. This update can give insights into how homebuilders are performing financially.
  2. Keeping track of homebuilder performance can help in making informed decisions about buying or selling a home. If builders are doing well, it might indicate a strong housing market.
  3. The information provided is available through a subscription service, which offers more detailed analyses and insights. Exploring these resources can be beneficial for those interested in housing trends.

Everything is (not) fine at Intel

Irrational Analysis • 159 implied HN points • 03 Apr 24
🕹 Technology Semiconductors Investment Analysis Engineering
  1. The Intel event highlighted concerning trends, particularly in product competitiveness and margins, with challenges in execution and manufacturing processes.
  2. Intel's strategic shift towards insourcing and reducing external foundry partnerships suggests significant changes in their manufacturing approach.
  3. Despite efforts to improve, Intel faces a tough road ahead with the need for advanced technology developments and a challenging competitive landscape.

VC: "I Don't Care About Your LTV/CAC Ratio!" Why? | VC Remote Jobs

Venture Curator • 179 implied HN points • 05 Mar 24
💼 Business Venture Capital Startup funding Tech news Investment Analysis Entrepreneurship
  1. Investors value the velocity of return on customer acquisition cost (CACD) more than the LTV/CAC ratio. They want to know how quickly their investment in acquiring customers is returned as customer lifetime value.
  2. Customer cohorts are crucial: Not all customers have the same value. By tracking the LTV/CAC ratio by customer cohort, businesses can optimize their marketing efforts and focus on acquiring high-LTV customers.
  3. Startup success is tied to the correlation between customer acquisition cost (CAC) and customer lifetime value (LTV). A high LTV/CAC ratio indicates a successful business model, while a low ratio can lead to financial challenges and potential startup failure.

The Nuclear Narrative

The Last Bear Standing • 53 implied HN points • 24 Jan 25
💰 Finance Market Trends Investment Analysis Energy Policy
  1. Nuclear power is getting a lot of hype and some companies are seeing big stock gains. This is partly because there's a growing demand for energy from datacenters.
  2. However, the nuclear industry has been shrinking for many years, with no new large plants in development and existing plants facing high costs and old age.
  3. Even though small nuclear reactors are in the works, they won't be ready soon and are unlikely to be cheap or meet the growing energy needs.

What is “GDP” and why is it such an important economic indicator?

Concepts of Finance 🧠 • 259 implied HN points • 07 Sep 23
💰 Finance Economic Indicators Investment Analysis
  1. GDP stands for Gross Domestic Product, and it adds up the value of everything produced in a country over a specific time, usually a year. A higher GDP means a country produces more goods and services.
  2. There are three main ways to calculate GDP: by production, income, or expenditure. The most common method is the expenditure approach, which measures total spending on goods and services.
  3. GDP has limitations since it doesn’t account for unpaid work or environmental factors. It also only measures cash transactions, so important activities that don't involve money are excluded.

Data Update 4 for 2023: Country Risk - Measures and Implications

Musings on Markets • 379 implied HN points • 12 Feb 23
💰 Finance Risk Assessment Investment Analysis Market Trends Economic Indicators
  1. Country risk affects investments everywhere, not just in emerging markets. Every country has its own level of risk, which is important for investors to understand.
  2. Investors need to look beyond just company performance and consider how a country's situation influences their investments. Government actions and country stability matter a lot.
  3. Assessing country risk involves looking at different factors like political stability and economic conditions. Measures like sovereign ratings and CDS spreads help evaluate this risk.

IAC 2023: Unique Highlights by Space Ambition

Space Ambition • 159 implied HN points • 13 Oct 23
🔬 Science Space Exploration Technology Trends Investment Analysis
  1. The 74th International Astronautical Congress was diverse, with attendees from 132 countries and over 5,400 delegates. This made it one of the most inclusive space events ever.
  2. New trends were noted, especially the rising interest from young professionals and startups in the space sector. This highlights that younger generations are becoming increasingly engaged in space discussions and technology.
  3. Sustainability and security in space were major topics this year. Participants emphasized the importance of regulations against space debris and managing geopolitical risks as more countries invest in space technology.

Case-Shiller: National House Price Index Up 3.9% year-over-year in September

CalculatedRisk Newsletter • 14 implied HN points • 26 Nov 24
💰 Finance Housing Market Real Estate Economic Trends Investment Analysis Market research
  1. The national house price index increased by 3.9% from last year, showing steady growth in home values.
  2. Most cities saw home prices rise month-to-month, but some places like Los Angeles and Miami experienced declines.
  3. While year-over-year growth is still positive, the pace of increase is slowing down, indicating that the housing market might be stabilizing.

What is EBITDA?

Concepts of Finance 🧠 • 299 implied HN points • 16 Mar 23
💰 Finance Corporate Finance Investment Analysis Financial Metrics Cash Flow
  1. EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. It's a way to see how much cash a company makes from its regular activities, without debt and accounting effects.
  2. To calculate EBITDA, you add net income, taxes, interest, depreciation, and amortisation. This helps give a clearer picture of a company's financial health.
  3. Companies like EBITDA because it shows how well they're doing without the impact of financing and other expenses. It's a key metric when looking at profits or selling the business.

Country Risk: The Mid-year Update for 2022

Musings on Markets • 519 implied HN points • 14 Jul 22
💰 Finance Investment Analysis Capital Markets Economic Indicators Sovereign debt
  1. Country risk varies significantly between different nations. Countries with stable economies and strong political systems are generally safer for investments than those with instability or violence.
  2. Corruption and legal protections are vital factors influencing country risk. High corruption levels can increase costs for businesses, while strong legal systems provide better support for contracts and property rights.
  3. Recent global events, like the conflict in Ukraine, have raised risk levels across many countries. This has resulted in higher costs of capital for investors and increased equity risk premiums globally.

Top 5 financial posts of the 4/2024 trading week

Global Markets Investor • 19 implied HN points • 28 Jan 24
💰 Finance Stock Market Cryptocurrency Investment Analysis
  1. The S&P 500 ended near its highest point, driven by big Tech, while Tesla saw a significant drop. The Federal Reserve was meeting, and important tech companies like Apple and Amazon were set to report earnings.
  2. Bitcoin faced volatility after ETFs approval, dropping momentarily but stabilizing above $40,000. The future of Bitcoin's market trends remains uncertain.
  3. Chinese stocks have not performed well in the past decade, with the US stock market value surpassing China and Hong Kong combined. Despite looking cheap, investing in China carries significant risk during a potential bear market.

How TikTok breaks economics [Finance Fridays]

Technology Made Simple • 59 implied HN points • 29 Oct 22
💰 Finance Economics Social media Government Influence Data Analysis Investment Analysis
  1. TikTok struggles with profitability due to competition, lack of valuable data, and the expensive analysis of user behavior.
  2. The CCP's involvement in ByteDance enables them to fund TikTok despite losses for geopolitical influence, impacting the content promoted and the platform's sustainability.
  3. Banning TikTok may not address the root issues; education on health, mental wellness, skepticism, and maintaining real social connections are vital for healthier social media engagement.

Clouded Judgement 12.20.24 - The Fed Bomb

Clouded Judgement • 3 implied HN points • 20 Dec 24
💰 Finance Monetary Policy Market Trends Economic Indicators Investment Analysis Stock Valuation
  1. The Federal Reserve is expecting fewer interest rate cuts in 2025 than many had hoped. They now see only two cuts instead of three or four.
  2. The Fed raised its inflation projections, indicating that inflation might be a bigger problem than previously thought. This caused a noticeable drop in market values.
  3. Economic growth estimates for 2025 have improved slightly, but the Fed suggests it will be cautious moving forward, making investors nervous.

No, higher corporate taxes do not reduce profits

Klement on Investing • 2 implied HN points • 06 Nov 24
💰 Finance Economic Impact Investment Analysis
  1. Higher corporate taxes don't necessarily mean lower profits for companies. It can vary, and overall, it often just shifts profits from one group of companies to another.
  2. The effect of changing corporate tax rates on corporate profits is very small. Studies show there's not much correlation between tax changes and profit levels.
  3. Government spending of tax revenue can boost the economy. For example, if the government invests in infrastructure, it can help increase profits for involved companies.

The Venture Activity Index

Who is Nnamdi • 10 implied HN points • 25 Jul 23
💼 Business Venture Capital Market Analysis Economic Trends Investment Analysis
  1. The Venture Activity Index measures the state of the venture business cycle using the Venture Activity Index (VAI).
  2. Funding in the venture market is fluctuating around a linear trend with a consistent ~5% growth per quarter on average.
  3. Correlations across different stages of venture investment have increased since 2020, with later stages experiencing more volatility than seed and Series A stages.

January 2019 Data Update 5: Hurdle Rates and Costs of Financing

Musings on Markets • 19 implied HN points • 24 Jan 19
💰 Finance Corporate Finance Investment Analysis Risk management Valuation
  1. Hurdle rates are important because they help companies decide whether to invest in a project. They reflect the risks involved and the expected returns for different funding sources.
  2. Businesses face various types of risks like business, financial leverage, country, and currency risks. Understanding these risks helps in accurately calculating the cost of capital.
  3. It's crucial to maintain consistency in currency analysis, adjusting for inflation and risk, as it affects investment evaluations. Choosing a currency should not change the project's perceived risk or outcome.

The Privatization of Tesla: Stray Tweet or Game Changing News

Musings on Markets • 0 implied HN points • 10 Aug 18
💼 Business Corporate strategy Investment Analysis Market Trends Financial News
  1. Companies can go from being public to private when they feel the benefits of being public are no longer helping them. This can happen when they don't need much new capital or when the market undervalues them.
  2. Tesla might not be a good fit for going private because it needs lots of funding to grow and is currently valued high compared to traditional car companies. Plus, it has shown strong market performance despite some criticism.
  3. Elon Musk's decision to tweet about taking Tesla private raised many questions. If funding is truly secured, it would need significant investment, which might be hard to find for a company that is currently losing money.

January 2016 Data Update 4: The Costs of Capital

Musings on Markets • 0 implied HN points • 14 Jan 16
💰 Finance Corporate Finance Valuation Investment Analysis Risk management Economic Indicators
  1. The cost of capital is crucial for businesses as it helps determine where to invest. Companies need to know the minimum returns needed to justify their investments.
  2. It plays a key role in deciding the mix of debt and equity a company should use. Understanding this mix can optimize financial performance.
  3. Different sectors have varying costs of capital due to risk factors. It's important to use a cost of capital that reflects the specific risks of investments being considered.

Aging in Dog Years? The Short, Glorious Life of a Successful Tech Company!

Musings on Markets • 0 implied HN points • 09 Dec 15
💼 Business Corporate strategy Investment Analysis Market Trends Tech industry
  1. Tech companies can grow quickly because they often have easier market entry and can scale fast. This means they can become popular in a short time.
  2. However, once tech companies mature, they struggle to maintain their success. Their advantages fade away faster than in other industries.
  3. When tech companies start to decline, they do so rapidly because new competitors can easily enter the market and attract customers. This makes it hard for them to recover.

January 2017 Data Update 7: Profitability, Excess Returns and Governance

Musings on Markets • 0 implied HN points • 30 Jan 17
💼 Business Corporate Finance Investment Analysis Company performance Financial Metrics Governance
  1. Companies need to earn more than their cost of capital to be successful. Just making money isn't enough; they must create value for their investors.
  2. Return on Invested Capital (ROIC) is a common way to measure how well a company is doing, but it has its flaws. Investors should be careful when interpreting this metric for young or troubled companies.
  3. There are many companies that are not creating value for their shareholders, with a large number classified as 'value destroyers.' This can limit resources for better investment opportunities in the economy.

January 2018 Data Update 1: Numbers don't lie, or do they?

Musings on Markets • 0 implied HN points • 05 Jan 18
💰 Finance Market Data Investment Analysis Corporate Finance Risk management Financial Metrics
  1. Collecting and analyzing data from a large number of companies helps in gaining a better perspective for making investment decisions. It allows for comparison against industry and geographic averages.
  2. It's important to question common investing rules of thumb and understand whether they still hold true in today’s market. Examining actual data can reveal if these rules are outdated.
  3. Trends and changes in corporate finance can significantly impact investors and the economy. It’s useful to track how companies evolve over time and how that affects various financial metrics.

January 2018 Data Update 4: The Currency Conundrum

Musings on Markets • 0 implied HN points • 24 Jan 18
💰 Finance Risk management Investment Analysis Currency Markets Economic Theory Sovereign debt
  1. Many people wrongly assume that government bonds always have no risk, especially when they are in local currency. But countries can default on these bonds, making their interest rates not risk-free.
  2. There is no single global risk-free rate; it varies with inflation across different countries. Mixing risk-free rates from different currencies can distort financial analyses.
  3. Choosing the currency for valuation doesn’t change a company's inherent value, since risks and cash flows should align with the currency used.

January 2016 Data Update 5: Making a case for corporate governance

Musings on Markets • 0 implied HN points • 21 Jan 16
💼 Business Corporate Governance Investment Analysis Financial Performance Market Trends
  1. More than half of publicly traded companies don't make enough returns to cover their costs, meaning they might actually be losing value instead of gaining it.
  2. Some companies consistently make bad investment choices, but their managers often stay in place because it's hard to change leadership or hold them accountable in many parts of the world.
  3. Certain industries, like tobacco, perform much better than others, like oil, which struggled due to falling prices, showing there are businesses that keep failing while managers fail to recognize the problems.

Tesla's Travails: Curfew for a Corporate Teenager?

Musings on Markets • 0 implied HN points • 03 Jun 19
💼 Business Corporate strategy Market Analysis Financial Performance Valuation Techniques Investment Analysis
  1. Tesla has seen a huge increase in revenue, almost doubling thanks to the success of the Tesla Model 3. This shows that there is strong demand for electric cars.
  2. Despite this growth, Tesla is heavily in debt, which puts its future at risk. The company borrowed a lot to fund its growth, making it vulnerable if things don't go well.
  3. Elon Musk's unpredictable behavior, especially on social media, adds uncertainty to Tesla's stability. Investors often worry about his actions affecting the company's image and financial health.