Very interesting Economist article on the roots of China’s success – and why China must change to achieve future prosperity. However, the “China Unbalanced” debate is far from over, and countless arguments have been laid out for each side of the debate. Why does it matter to us? Surely, as Brazilians, because of the undeniable impact of China in our economy. But more importantly, as global citizens and asset managers, because of the uncertainty that comes from such a wide range of possible outcomes.
Two recent stories in US newspapers highlight the huge per-capita spending of Brazilians in the US. While one piece focuses on tourists in NY and retail sales, the other focuses on Florida and also mentions Brazilians buying up real estate. The big point: the taxation making imports so expensive in Brazil as to justify, in some cases, the airfare and hotel expenses.
No mistake in the title: US immigration laws have some California entrepreneurs – Peter Thiel included – pondering a ship to house innovators and entrepreneurs 12 nautical miles off the California coast – i.e. international waters! The point here isn’t the specific plan, it’s the regulatory and political environment that spawned it.
Much noise has been generated by MidAmerican’s purchase of First Solar’s $2 billion Topaz solar energy project. Yes, MidAmerican is Berkshire’s utility/ energy subsidiary and this sizable acquisition has certainly been cleared by Warren Buffett. That does not mean that “Buffett is buying/ betting on solar” as a category. It is Berkshire taking advantage of an opportunity.
In another building block in the “Banking: Global Mess” series, the World Bank says in a report released yesterday that the Latin American financial systems still seem sound, but there are a few yellow flags. The embedded 3-min video interview (inside) is a nice summary of findings.
Bill Miller himself once said: “This is a brutal business, success equals survival. If you have survived, you will have succeeded”. We have said it a little differently since 1988: to finish first, you must first finish. Mr. Miller, famous for his 15-year streak of beating the S&P 500, has announced that he will step down as co-manager of the Legg Mason Value Trust in April 2012. Is Mr. Miller’s rise and subsequent fall a matter of genius becoming overconfidence or simple probability theory playing out – as per Taleb? Not knowing the inside workings of Legg Mason, no one can really claim to know the answer. To help us think about it, we collect several links inside.
The IMF has recently issued a report on China’s financial system’s stability that has grabbed plenty of headlines, and yet today it seemed that there were pessimistic articles about banking all over the world. European and US banks are also the subject of stories that highlight risk, interconnectedness, poor balance sheets etc.. While the financials’ situation isn’t necessarily news, it is the trend that’s interesting. Inside we collect quite a few articles about the world’s financial system, all of them very from yesterday or today. Collectively they plant a bleak picture, one that seems very different from what we (still) observe in Brazil’s banking system. It’s very hard to separate signal from noise, especially so in the middle of a crisis, but it’s great food for thought.
We’ve read two stories yesterday that “clicked” together. One was Seth Godin’s post on media choices and how one must now deal with scarcity of attention. Another was a NYT story on the Disney deal with Youtube. Disney has incredible content, but they don’t have kids’ “ears” anymore – incredibly enough for people over 30, Youtube does. On the other hand, Disney brings Youtube credibility with advertisers and families (the latter worry their kids only go on Youtube to watch what they perceive as useless, mindless, purposeless videos). What can we do as long-term investors? Probably nothing, and that’s OK.
Brazil’s efforts to influence its Latin America neighbors are not always well-received. That by itself isn’t a problem, at least not beyond the stated and unstated strategies and goals behind such initiatives. Reaction will always occur as one group or another feels threatened/ left behind. However, it is important to keep an eye on the trend. Much has been said about Brazil having “lessons to teach” other LatAm countries, and we have been skeptical given increased government spending and intervention in the economy – alongside rising inflation. Brazil has done well, no doubt, but let’s keep our minds open to our own problems before we try to “export solutions”.
Huge, sprawling article on Business Insider about Groupon since the early beginnings. It’s telling when an article about the big article is 3 pages long. Normally we would recommend reading the summary for conciseness – and because the day only has 24h – but the big article is a keeper. They got almost all of it right, except for the culture change part. It is more important, and far more disruptive, than they make it seem.
