Category: Investing

The Best Months for Stock Market Gains


This post is by Marcus Lu from Visual Capitalist


best months for stock market gains

The Best Months for Stock Market Gains

Many investors believe that equity markets perform better during certain times of the year.

Is there any truth to these claims, or is it superstitious nonsense? This infographic uses data gathered by Schroders, a British asset management firm, to investigate.

What the Data Says

This analysis is based on 31 years of performance across four major stock indexes:

  • FTSE 100: An index of the top 100 companies on the London Stock Exchange (LSE)
  • MSCI World: An index of over 1,000 large and mid-cap companies within developed markets
  • S&P 500: An index of the 500 largest companies that trade on U.S. stock exchanges
  • Eurostoxx 50: An index of the top 50 blue-chip stocks within the Eurozone region

The percentages in the following table represent the historical frequency of these indexes rising in a given month, between the years 1987 and 2018. Months are ordered from best to worst, in descending order.

RankMonth of Year Frequency of Growth (%)Difference from Mean (p.p.)
#1December79.0%+19.9
#2April74.3%+15.2
#3October68.6%+9.5
#4July61.7%+2.6
#5May58.6%-0.5
#6November58.4%-0.7
#7January57.8%-1.3
#8February57.0%-2.1
#9March56.3%-2.8
#10September51.6%-7.5
#11August49.3%-9.8
#12June36.7%-22.4
Average59.1%n/a

There are some outliers in this dataset that we’ll focus on below.

The Strong Months

In terms of frequency of growth, December has historically (Read more...)

The Contrarian VC with Jeremy Levine of Bessemer Venture Partners


This post is by MPD from @MPD - Medium


On this week’s episode I chat with Jeremy Levine, a Partner at Bessemer Venture Partners. Bessemer has been around for over 100 years and was originally founded by a family that partnered with Andrew Carnegie back in the day.

Jeremy has been at the firm for 21 years and has seen a few cycles. He’s a hell of an investor and has quite the track record. He’s been on the Forbes Midas List and his investments include the likes of Yelp, LinkedIn, Pinterest and Shopify.

If you’re interested in how the VC industry works this is a great conversation for you. We cover how Bessemer operates, how to be a good early-stage investor, the impact of macro trends on the VC landscape, Jeremy’s point of view on contrarian investing and much more. Enjoy.

Listen via your preferred platform here.

Show Links:


The Contrarian VC with Jeremy Levine of Bessemer Venture Partners was originally published in @MPD on Medium, where people are continuing the conversation by highlighting and responding to this story.

Catching the Growth of the Cannabis Industry



The following content is sponsored by eToro

Cannabis future infographic

Catching the Growth of the Cannabis Industry

The global stance on cannabis is changing rapidly.

With a wave of medical and recreational legalization occurring, there are now 70 countries with some form of legalization. As billions of investment dollars pour in, the cannabis industry finds itself entering a brand new chapter.

This infographic from eToro provides key information for investors on how the global cannabis market is making significant strides forward.

The World’s Legal Cannabis Markets

In just a few short years since legalization momentum kicked off, societal views on cannabis have changed tremendously. Examples of this include:

  • Dispensaries being deemed essential businesses during the pandemic.
  • Uber announcing its intention to incorporate cannabis deliveries.
  • Malta becoming the first country to legalize cannabis in Europe for recreational use.

This shifting dynamic is part of why the global cannabis industry now generates over $20 billion in legal recreational sales on an annual basis.

The title for the world’s largest cannabis market belongs to the U.S.—generating more than $16 billion in sales in 2020. However, their regulatory landscape is also one of the trickiest to navigate, as federal legalization has yet to occur despite over 30 states having legalized cannabis in some form.

While this unique situation leaves a lot of potential money off the table, it also provides lots of potential upside for the industry should legalization trends persist. In 2022, Mississippi, Oklahoma, and Delaware are considered likely to legalize, which would take the small (Read more...)

The World’s Largest Real Estate Investment Trusts (REITs)


This post is by Marcus Lu from Visual Capitalist


World's largest real estate investment trusts

The World’s Largest Real Estate Investment Trusts (REITs)

Real estate is widely regarded as an attractive asset class for investors.

This is because it offers several benefits like diversification (due to less correlation with stocks), monthly income, and protection from inflation. The latter is known as “inflation hedging”, and stems from real estate’s tendency to appreciate during periods of rising prices.

Affordability, of course, is a major barrier to investing in most real estate. Property markets around the world have reached bubble territory, making it incredibly difficult for people to get their foot in the door.

Thankfully, there are easier ways of gaining exposure. One of these is purchasing shares in a real estate investment trust (REIT), a type of company that owns and operates income-producing real estate, and is most often publicly-traded.

What Qualifies as REIT?

To qualify as a REIT in the U.S., a company must meet several criteria:

  • Invest at least 75% of assets in real estate, cash , or U.S. Treasuries
  • Derive at least 75% of gross income from rents, interest on mortgages, or real estate sales
  • Pay at least 90% of taxable income in the form of shareholder dividends
  • Be a taxable corporation
  • Be managed by a board of directors or trustees
  • Have at least 100 shareholders after one year of operations
  • Have no more than half its shares held by five or fewer people

Investing in a REIT is similar to purchasing shares of any other publicly-traded company. There are also exchange-traded (Read more...)

How Much Prime Real Estate Could You Buy for $1 Million?


This post is by Marcus Lu from Visual Capitalist


diagram showing how much prime real estate one can buy for $1 million in various cities

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The Briefing

  • Housing affordability can vary significantly from city to city
  • $1 million USD can buy over 6 times more space in Dubai than in Hong Kong

How Much Real Estate Could You Buy for $1 Million?

“There are three things that matter in property: location, location, location”

Those are words from Harold Samuel, a British real-estate mogul from the 1900s. Broadly speaking, it’s a quote that still holds true—property values in the world’s best cities have always been worth a pretty penny.

The scarcity of real estate is driven by trends such as urbanization, which is the migration of people into cities. While the first examples of cities were built thousands of years ago, it was only recently that the majority of the population began to live in them. In fact, the urban population just overtook the rural population for the first time in 2007.

Of course, certain cities simply hold more appeal for wealthy people, and as a result, competition in the prime real estate market can be fierce.

To learn more about (Read more...)

Three Emerging Trends in the Space Industry



The following content is sponsored by MSCI

MSCI Space Exploration Index

Three Emerging Trends in the Space Industry

Over the past several decades, space and satellite technology has become the invisible foundation of our digital world. 1,700 active satellites are currently orbiting the Earth, and together, they enable many of the technologies we use on a daily basis.

Looking forward, this industry is on the cusp of a significant ramp-up. Recent technological breakthroughs have drastically reduced the cost of rocket launches, and by 2030, analysts expect the number of active satellites to increase by several magnitudes.

Greater satellite coverage is significant because it could unlock futuristic solutions like drone deliveries, or bring internet access to the world’s underserved. To help you learn more, this infographic from MSCI provides an overview of the entire space opportunity.

Emerging Trends in the Space Industry

The space industry is a broad opportunity set which can be divided into three segments.

#1: Products and services focused on orbital and sub-orbital spaceflights

This segment includes reusable launch systems, hypersonic travel, and satellite connectivity. Rocket reusability has the greatest potential because it could greatly lower the cost of launches going forward.

This table lists rocket launch costs in terms of USD/kg.

RocketManufacturerCost (USD/kg)
2016 Atlas VUnited Launch Alliance (ULA)*$14,100
2014 Ariane 5Airbus$6,900
2015 Falcon 9SpaceX$4,700
2020 Reusable Falcon 9SpaceX$1,800
Rapidly Reusable StarshipTheoretical model based on ARK estimates$200

*Joint venture between Lockheed Martin and Boeing. Source: ARK Investment Management (2021)

(Read more...)

Visualizing Amazon’s Rising Shipping Costs


This post is by Aran Ali from Visual Capitalist


amazon rising shipping costs

The Briefing

  • Amazon’s shipping and fulfillment costs have soared to over $150 billion
  • Global supply chain constraints have accelerated these costs, which are now 40x their 2009 levels

Visualizing Amazon’s Rising Shipping Costs

Most investors would agree that Amazon has been a winner during the COVID-19 pandemic. After all, in two short years from 2019 to 2021, sales soared to $469 billion from $280 billion and their market cap surged towards a $1.7 trillion valuation.

But even the best of companies have had to navigate choppy waters and uncertainty during this time. For Amazon, this has come in the form of cost pressures in their shipping and fulfillment department, which are now representing an increasingly large share of revenues.

Just how large are Amazon’s shipping and fulfillment costs becoming?

In 2021, shipping and fulfillment costs added up to $151.8 billion. Shipping, which includes sortation, delivery centers, and transportation costs amounted to $76.7 billion. Fulfillment costs, which include cost of operating and staff fulfillment centers, were $75.1 billion.

As a result of these trends, Amazon’s shipping and fulfillment expenses now represent 32% of their revenues:

YearCost as a % of revenue
202132%
202031%
201928%
201827%
201726%
201625%
201523%
201422%
201320%
201219%
201118%

As you can see, costs are escalating, and today’s figure is almost twice that of the 18% figure seen in 2011.

Amazon Web Services to the Rescue

While these expenses are rising, it’s important to remember (Read more...)

Putting EV Valuations Into Perspective


This post is by Marcus Lu from Visual Capitalist


EV Valuations

Putting EV Valuations Into Perspective

The global push for lower emissions has created a mania around pure-electric automakers. While Tesla leads the charge, institutional investors have also piled into many of its younger rivals.

For example, in 2019, Saudi Arabia’s sovereign wealth fund invested $1.3 billion into Lucid Motors. One year later, it was revealed that Amazon had a 20% stake (worth $3.8B) in Rivian.

To see how quickly EV valuations have ballooned, we’ve visualized the historical market capitalizations (market caps) of 10 prominent automakers.

Legacy vs Pure-Electric

The legacy group includes five top traditional automakers, while the EV group includes the five most valuable pure-electric automakers that are listed on an American exchange.

The following table lists the market caps of these companies at various dates. While XPeng and NIO are listed on the New York Stock Exchange, they do not currently sell cars in the U.S.

AutomakerType20102015202102/22/2022
?? TeslaEV$3B$31B$1,061B$849B
?? ToyotaLegacy$124B$191B$255B$256B
?? Volkswagen GroupLegacy$59B$79B$129B$128B
?? Mercedes-BenzLegacy$61B$94B$83B$89B
?? FordLegacy$63B$57B$83B$69B
?? General MotorsLegacy$55B$51B$85B$68B
?? RivianEVN/AN/A$93B$55B
?? LucidEVN/AN/A$63B$42B
?? NIOEVN/AN/A$50B$35B
?? XpengEVN/AN/A$41B$30B

Source: Companies Market Cap

At the end of 2021, Tesla and its four EV rivals were worth a combined $1.3 trillion. This was more than double of the legacy group, which (Read more...)

Putting EV Valuations Into Perspective


This post is by Marcus Lu from Visual Capitalist


EV Valuations

Putting EV Valuations Into Perspective

The global push for lower emissions has created a mania around pure-electric automakers. While Tesla leads the charge, institutional investors have also piled into many of its younger rivals.

For example, in 2019, Saudi Arabia’s sovereign wealth fund invested $1.3 billion into Lucid Motors. One year later, it was revealed that Amazon had a 20% stake (worth $3.8B) in Rivian.

To see how quickly EV valuations have ballooned, we’ve visualized the historical market capitalizations (market caps) of 10 prominent automakers.

Legacy vs Pure-Electric

The legacy group includes five top traditional automakers, while the EV group includes the five most valuable pure-electric automakers that are listed on an American exchange.

The following table lists the market caps of these companies at various dates. While XPeng and NIO are listed on the New York Stock Exchange, they do not currently sell cars in the U.S.

AutomakerType20102015202102/22/2022
?? TeslaEV$3B$31B$1,061B$849B
?? ToyotaLegacy$124B$191B$255B$256B
?? Volkswagen GroupLegacy$59B$79B$129B$128B
?? Mercedes-BenzLegacy$61B$94B$83B$89B
?? FordLegacy$63B$57B$83B$69B
?? General MotorsLegacy$55B$51B$85B$68B
?? RivianEVN/AN/A$93B$55B
?? LucidEVN/AN/A$63B$42B
?? NIOEVN/AN/A$50B$35B
?? XpengEVN/AN/A$41B$30B

Source: Companies Market Cap

At the end of 2021, Tesla and its four EV rivals were worth a combined $1.3 trillion. This was more than double of the legacy group, which (Read more...)

Startups and Macro Risk



I find it difficult to think of another time with as much macro risk as the present at least since the financial crisis and likely much longer than that. There is a shooting war in Europe with no clear endgame. China might make a move on Taiwan at any moment. We have an ongoing pandemic that could still produce a dangerous variant. US democratic institutions appear incapable of mounting a coherent response to pretty much anything and are under attack from within.

The broader stock market has held up surprisingly well in light of this. Yet many public tech stocks have already pulled back substantially. Bluechip names like Cloudflare and Shopify are down 50% off their all time highs. This is a reflection both of anticipated higher interest rates and lower growth. Still I would not be surprised if we wound up with a much bigger and broader correction, if any of these macro risks are realized.

Is this something a startup founder/CEO should be paying attention to? In order to answer this question it is useful to look at the interaction between private and public markets.

Private market valuations tend to lag public market valuations. This is fantastic for venture investors when you invest in a sector where public market valuations are just starting to expand because you can still get into deals at reasonable prices. This is when the best venture returns are achieved. That’s why being early (but not too early) to a new sector is so (Read more...)