A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
Citi's chief equity strategist, Montreal's own Tobias Levkovich, published a report detailing the most widely held stocks among global hedge funds. The first three stocks on the list – Alphabet Inc., Facebook Inc. and Microsoft Corp – aren't a big surprise. It's most likely these are the stocks managers are terrified not to own or risk underperforming their benchmarks.
There are a number of surprises on the list including Altaba Inc., NPX Semiconductors NV, Time Warner Inc. and MGM Resorts International.
"@SBarlow_ROB Citi: most widely held stocks by hedge funds" – (full table) Twitter
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Dramatic proclamations get all the attention - "The end of the oil age!", "Huge crude scarcity by 2022!" – but a Bernstein analyst, using the history of rubber production, expects a 'muddle-through' type future for oil demand. Apologies for the long excerpt, but it was my favourite read of the weekend by a big margin,
"Rubber is the story of an incumbent technology that, for all its excesses and booms and busts (just like my industry), still shares and competes in a market with a disruptive technology… Look to rubber. Look to hydropower. Look to coal and the pace of its death. Look to diesel and gasoline competing. Look to the whaling industry. Look to guano (if you like rubber you'll love bird feces!). Energy and raw materials and extractive industries are different from cameras, smartphones, chip design, and social trends. And the more that investors can accept that, the more willing they might be to consider that, although in the long run the oil sector will be dead (as Keynes pointed out, this is true for all of us), and in the short run the oil sector is hated, it's always the muddy middle where the money is to be made."
"@SBarlow_ROB ibid " – (research excerpt) Twitter
"Norway's $1 trillion oil fund is planning to get out of oil" – Quartz "
"Oil eases as traders and investors grow edgy ahead of OPEC" – Reuters
"Oil demand: Beware the gap" – Petroleum Economist
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The Economist reports that for U.S. marijuana producers, "Canada is where the money is,"
"Investors remain skittish about the [marijuana] industry, and accessing American stock markets is onerous. Instead, firms are moving north to Canada, listing themselves on Canadian stock markets to raise capital, and then investing the funds in American companies. One such company, iAnthus Capital Holdings, has raised nearly $50m says Hadley Ford, the co-founder. Mr Ford, a Wall Street veteran, found the northern relocation curious at first, but eventually adjusted. "It's like what John Dillinger said when asked about why he robbed banks," he says. "'That's where the money is.'"
"The price of cannabis is falling, suggesting a supply glut" – The Economist
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Gadfly's David Fickling was entertainingly harsh on Rio Tinto's management while providing a warning for investors in lithium miners,
"Rio Tinto Group isn't one of those companies[ that's good at acquisitions]. Indeed, it's hard to find an acquisition since its 2000 takeover of Australian iron ore miner North Ltd. that's not been a top-of-the-market catastrophe. That should make investors nervous about the prospect that a big new lithium deal could be forthcoming."
"Rio Tinto's M&A Madness" – Gadfly (Bloomberg)
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Tweet of the Day: "@RateSpy It's been decades since Canadians renewed mortgages at considerably higher rates " – (chart from DBRS) Twitter
Diversion: "Love and Respect For the Movies We Outgrew" – Film School Rejects
Scott Barlow