When shorting, remember that stocks usually follow earnings; Pitch for Alphabet; Netherlands is the second-largest exporter of agricultural products; The effect of life events on life satisfaction
1) Continuing where I left off in yesterday's e-mail, I'm sharing slides from my presentation on "Lessons From 15 Years of Short Selling"...
These next slides make the point that stocks usually follow earnings (with six case studies), so the key to successfully shorting (or going long!) a stock is to be right about the direction of reported earnings (not, to be clear, where you think earnings might be at some time in the future):
Lumber Liquidators:
3D Systems (DDD):
Bed Bath & Beyond (BBBY):
Valeant Pharmaceuticals:
Crocs (CROX):
2) I neglected to send this out when my friend Marcelo Lima of hedge fund Heller House tweeted it, but I think his point that Alphabet (GOOGL) is cheap remains true today:
3) I found this in-depth Washington Post article about the massive, highly modernized agricultural industry in the Netherlands to be absolutely fascinating: Cutting-edge tech made this tiny country a major exporter of food. Excerpt:
The rallying cry in the Netherlands started two decades ago, as concern mounted about its ability to feed its 17 million people: Produce twice as much food using half as many resources.
The country, which is a bit bigger than Maryland, not only accomplished this feat but also has become the world's second largest exporter of agricultural products by value behind the United States. Perhaps even more significant in the face of a warming planet: It is among the largest exporters of agricultural and food technology. The Dutch have pioneered cell-cultured meat, vertical farming, seed technology and robotics in milking and harvesting – spearheading innovations that focus on decreased water usage as well as reduced carbon and methane emissions.
The Netherlands produces 4 million cows, 13 million pigs, and 104 million chickens annually and is Europe's biggest meat exporter. But it also provides vegetables to much of Western Europe. The country has nearly 24,000 acres – almost twice the size of Manhattan – of crops growing in greenhouses. These greenhouses, with less fertilizer and water, can grow in a single acre what would take 10 acres of traditional dirt farming to achieve. Dutch farms use only a half-gallon of water to grow about a pound of tomatoes, while the global average is more than 28 gallons.
More than half of the land in the Netherlands is used for agriculture. The Dutch often say their singular focus on food production is born of the harrowing famine the country experienced during World War II. But it could be argued that the preoccupation with food began in the 17th century, when the Dutch were at the center of the global spice trade.
Their centrality in global food exploration is indisputable: Fifteen out of the top 20 largest agrifood businesses – Nestlé, Coca-Cola, Unilever, Cargill, and Kraft Heinz – have major research and development centers in the Netherlands.
With their limited land and a rainy climate, the Dutch have become masters of efficiency.
Here is a companion 48-minute video, which is equally fascinating: Food for thought.
4) This is a very interesting chart on the effects various events have on life satisfaction, which I found on the Our World in Data website on Happiness and Life Satisfaction. The good news is that humans are, overall, surprisingly resilient. But in one important area, long-term unemployment, we're not...
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.