Free eLetters

December 2019

Best of: Why WeWork Summed Up the Unicorn Bubble

December 27, 2019TradeSmith Research Team

Editor’s Note: In August, before the IPO was canceled, we said that WeWork sums up “everything that is wrong” with the unicorn bubble. Then the storyline went gonzo, with a series of founder fiascos so nutty they’ll be remembered for a generation. Here’s a look back on our early call pegging the craziest startup of 2019. Generally, you want to avoid cash-burning companies when they go public. The initial public offerings (IPOs) for Lyft and Uber were an example of

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Best of: The Optometrist Investor Who Became a Billionaire

December 26, 2019TradeSmith Research Team

Editor’s note: While Hendrik Bessembinder’s “most stocks are duds” research was shocking and a bit of a bummer, the story of “Dr. Herbie” was the most inspiring thing we came across in 2019 — and worth a look back heading into the year’s end. Forbes has a profile on the greatest billionaire investor you’ve probably never heard of. Dr. Herbert Wertheim, a 79-year-old semi-retired optometrist and small businessman, has a stock portfolio worth $2.3 billion (according to Forbes estimates). “Dr.

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Best of: Most Stocks are Duds (But You Can Win Anyway)

December 24, 2019TradeSmith Research Team

Editor’s note: We come across a lot of research, and the study performed by Hendrik Bessembinder earlier this year was one of the most eye-opening we’ve seen. If you have a poorly performing stock in your portfolio, hoping it might make a comeback, here is some bad news: That comeback isn’t likely. Most “dud” stocks tend to stay duds. Not only that, it turns out well over half of all stocks lose money — even during bull markets, and even

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Best of: A Look Back at the Smoot-Hawley Tariff Act

December 23, 2019TradeSmith Research Team

Editor’s note: Thanks to U.S.-China trade negotiations, the confirmation of Brexit, and various other factors, 2019 was the year global trade felt a backlash. Some economists are worried about the return of a “Smoot-Hawley” mentality to the world stage — hence our holiday lookback at the original event. In a speech to the House of Commons in 1948, Winston Churchill said: “Those who cannot remember the past are condemned to repeat it.” Churchill was paraphrasing the philosopher George Santayana. To

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Will the United Kingdom Still Exist in Five Years?

December 20, 2019TradeSmith Research Team

The euro had its debut as a currency on Jan. 1, 1999, initially rolling out for 11 member states. From the very beginning, there was skepticism the euro would survive. Some still wonder if fallout from the next global recession will break it apart. Whereas European monetary union weathered a Greek debt crisis, it may not survive one with a far larger member (like Italy or France). The interesting question now, though — and one few people saw coming —

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To Invest in that Startup, Maybe Get a Stockbroker’s License

December 19, 2019TradeSmith Research Team

The government has a bunch of weird and dumb rules. Anybody who flies commercial has experienced this. It’s hard to see how taking off your shoes makes air travel safer — especially when the bad guys can just try a different tactic, and TSA failure points have been demonstrated over and over — but the rule persists anyway. The “accredited investor” designation is another such weird and dumb rule, perpetuated by government decree. The idea behind the accredited investor rule

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Will FedEx Get Disrupted Like Kodak?

December 18, 2019TradeSmith Research Team

A dominant theme for the 2020s will be “the disrupters versus the disrupted.” The disrupters are the companies and industries that are changing the landscape with new technology, new business models, and new market dominance (if not a combination of all three). The disrupted are the companies and industries caught in the path of the disrupters, waiting to get steamrolled by technological change. The disrupted are likely to face declining revenue and profits, falling share prices, and possibly even bankruptcy

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Never Forget the Great Horse Manure Crisis of 1894

December 17, 2019TradeSmith Research Team

You should never forget the Great Horse Manure Crisis of 1894. No seriously, it’s good investing advice. That will take some explaining, so here goes. First off, the Great Horse Manure Crisis was absolutely a real thing. The problem was that, at the turn of the 20th century, cities were drowning in the stuff. By the year 1900, the city of London had more than 50,000 horses employed for human transport. The horses pulled 11,000 hansom cabs — a kind

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How Self-Driving Cars Will Transform Cities

December 16, 2019TradeSmith Research Team

Self-driving cars will completely transform urban city landscapes, and possibly even change the nature of real estate as we know it. This transformation will both create and destroy trillions of dollars in wealth, not just in the automotive industry, but all the industries adjacent to it. Headed into 2020, self-driving cars are a disappointment relative to expectations. They were supposed to be dominating the roads by now, and they obviously aren’t. The “minor details” of making self-driving technology sufficiently reliable

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Why Drone Could Replace Your Washing Machine and Dryer

December 13, 2019TradeSmith Research Team

Lately we’ve been discussing the wild technology impacts the world will feel in the 2020s. And again, let’s be clear: If you don’t think the next decade will be wild, you’re not paying attention. There is a convergence of tipping point trends and technological capabilities dead ahead that will create change — rapid change — like nothing we’ve seen in our lifetime. Some aspects of the 2020s landscape will be so bizarre they are hard to even grasp at first.

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Blue Energy: The Transformative Technology You’ve Never Heard Of

December 12, 2019TradeSmith Research Team

The clean energy revolution has already begun. For the past few years, if not the entire past decade, it has been laying foundations and building momentum. In the next few years, we will enter “the knee of the curve” — the point where the rate of change for clean energy impact goes from geometric to exponential. Think of a graph shaped like a hockey stick. Clean energy outputs are about to go to from the flattish part of the hockey

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Crypto Investors Are Going to Hate Central Bank Digital Currencies

December 11, 2019TradeSmith Research Team

Central Bank Digital Currencies (CBDCs) are coming. They are inevitable now. And crypto investors are going to hate them. (Bond investors might wind up hating them, too — but that’s a different story.) China has been developing a central bank digital currency (CBDC) for years. Because of that head start, China will likely be the first country to get a CBDC to market. But other countries will follow quickly. There is already a routine string of news announcements along the

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