#Critical Sense
14 January 2021
The main argument of those who refute the idea of a bubble is that with rates low, stocks are worth more.
However, a company like SAMSUNG, whose operating results have been stable for years, has seen its share price rise by 80% in one year. Yet Korean long rates remained unchanged at 1.80%.
So rates are not the explanation. The right explanation is that we are in a bubble.
So I'm officially launching the hashtag #criticalsense, which I'll use every time I hear this music.
Incidentally, here's one for John Thornton, the chairman of Barrick Gold - the world's largest gold company. In October 2018, he doubled his stake in the company by buying 2.3M shares for $25 million - a deal accompanied by a press release titled "Ownership is a core element of Barrick's partnership culture." But, when in April 2020 John Thornton sold all the shares he had bought 2 years earlier (doubling the stake), no press release was issued... #senscriticism
Have a good week,
Charles
PS : Good news - if I may say so - for the fund, with the surprise departure of Intel CEO Bob Swann. Of course, an accountant - he was the group's former CFO - is not necessarily the best thing to give new impetus to the world's leading processor group. On this news, the stock gained +10%, allowing us to close our line with a profit of $830,000 since the beginning of the year. Finally, our hypothesis was confirmed: Q4 numbers will be better than expected.
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