Friday, January 31, 2020

This week's interesting finds

When giants fall

America’s highest valued automaker

Tesla has an extremely high premium on earnings when compared with its more established counterparts in the auto industry.
The enterprise multiple (EV/EBITDA) measures the dollars in enterprise value for each dollar of earnings. The ratio is commonly used to determine if a company is undervalued or overvalued compared to peers.

The Apple effect
In 1997 Apple was valued at $3 billion — less than one-tenth of the value of Siemens, Europe’s largest industrial group both then and now. Fast forward two and a half decades, and Apple’s market capitalization exceeds not only Siemens — at $1.42 trillion Apple is worth more than the entire Dax index of Germany’s 30 leading companies.

A busy year for Constellation Software 

A bright future
The many young people who seem to share her gloomy view of the future should read the new book by Laurence B. Siegel, “Fewer, Richer, Greener.” In it, he proclaims, “We are on the verge of the greatest democratization of wealth and well-being that the world has ever known” and “the market is a powerful mechanism for driving bad and dishonest providers out of business.”

On destroying the planet:
As the world gets richer it will continue to get greener. Switzerland is probably the most environmentally clean country in the world, and it is one of the very richest. As time passes, Greece will act more like Switzerland, Colombia more like Greece, Ethiopia more like Colombia and so on until the whole world is much greener than it is now.

On apocalyptic thinking:
Our neural network says to us all the time: That could be a tiger, or it could be a rabbit, so let’s assume it’s a tiger. In the modern world, though, that often leads us to worry more about some dangers than we need to, because they rarely or never occur anymore. Apocalyptic thinking has always been wrong as a forecast, and it will continue to be wrong. Here’s hoping young people will take his message to heart, realize that capitalism can be a force for good and stop fearing the future.

Cut back on email if you want to fight global warming
Everyone has seen the warning. At the bottom of the email, it says: “Please consider the environment before printing.” But for those who care about global warming, you might want to consider not writing so many emails in the first place.

The problem is that all those messages require energy to preserve them. And despite the tech industry’s focus on renewables, the advent of streaming and artificial intelligence is only accelerating the amount of fossil fuels burned to keep data servers up, running, and cool.
This is a sector “where emissions are increasingly getting out of control,” says Philippe Zaouati, chief executive officer of Paris-based Mirova, a $15 billion sustainable asset manager. “We need to decrease carbon emissions, and what we see in the IT sector is increasing emissions.”

Indeed, socially conscious investors have historically been attracted to tech stocks, based on the assumptions that it’s a low-emissions industry. Some are starting to rethink that.