samedi 7 juillet 2018


There's always somebody to come up with two big threats that will turn the world upside down forever: 

1- The coming of a rise of interest rates;
2- The coming of self-driving car.

My answers:

1- The coming of a rise of interest rates will hurt every business, or almost... Because debt will be more expensive for everybody. If you've chosen a stock which is a leader or a strong business, your pick will do better than others. The earth continues to turn with a rise of interests, however, it turns a little slower.

2- These days, we talk much more about the economic war than about the coming of self-driving car. And I'm thinking about Couche-Tard right now. Because it's one of the stocks for which the fear of self-driving cars has some impact. And one of the few stocks for which I wouldn't care about an economic war.

Couche-Tard is exactly the kind of stock that shouldn't be hurt. Think about it: it's a convenience store. A store that's for people around or for some tourists passing by. The negative/very low beta of Couche-Tard says it all.

So, the economic war should hurt at least 95% of stocks out there before Couche-Tard.

And the self-driving car?

Well, the Investor's day transcript of Sequoia is finally out and here's what the specialist about Google had to say about it (because Google has been working for a long time on a self-driving car).

We have put a lot of thoughts into this because automated driving threatens some of the businesses we have invested in and that we thought, well, is it a 5 years or a 10 years threat? It is probably quite a bit longer than that before it actually threatens traditional businesses like auto parts or GEICO at Berkshire. You're looking at 2030, maybe 2040 before this is widespread...

These guys have been wrong in the past as we all know, but having exactly zero person around me having futuristic skills, I'd rely on this guy at Sequoia.

For the smartphones (from Blackberry to Iphone, for instance), the switch has been quick, but not that quick. I don't see why it should be faster with something bigger and more expensive than a phone.

5 commentaires:

  1. Your view on rising interest rates and how they affect stocks is too simplistic. Risings interest rates are supportive for commodities especially oil and grains, and also supportive for insurance companies, especially lifecos.

    On the downside, REITS, utilities, non discretionary and telcos will get hurt or see muliple compression.

    Debt by itself is simply leverage and counter to what you hear on CNBC is not bad or good, just by itself.

    1. I agree with some of your points. However, a great company (a great REIT for instance) will take advantage of a rise of interest rate by buying smaller players who can’t play the game anymore.

  2. For ATD.B I'd be more worried about electric cars then driver-less. Lots of places are offering charge stations for free (such as hotels). If you can charge for free wheres the incentive to go to a convenience store where the food is already over priced. I made quite a bit of money on ATD.B in the past but as of this year I sold out for other opportunities.

  3. You are right, just go ask friends that own an electric car how often do they stop at a gas station. Their answer is almost always : never.

    Unless ATD.B find a way to fix this, they are pretty much in trouble.

  4. In my opinion, one of ATD.B best assets is the real estate they own at strategic (and valuable) location.