James Damore vs. The Google Archipelago

I was distressed and saddened this week to learn that Google had decided to fire James Damore for his circulation of an internal memo that dared to question some of the more extreme elements of the social justice warrior (SJW) inspired workplace equality/diversity movement.

Michael Kors +21.5%, and why value investing is so hard

Overnight (I reside in Asia), Michael Kors (KORS US) announced an above-expectation fiscal 1Q18 result, which sent the stock up 21.5% to US$45.25. Comp sales still declined by about 5-6% YoY, but this was better than the c10% decline the market was expecting. Earnings declined by about 20% YoY as operating margins fell from about 18% to 15%, but EPS declines were only in the mid single digits, because the company has bought back so many shares over the past 12 months at such low prices (the stock has been trading at 5x EBITDA and a mid-teen FCF yield for most the past 12mths).

BMW & bargains in plain sight

If the bears are to be believed, we are living in a world of overvalued global markets inflated by excessive central bank stimulus, that offer investors the torturous combination of scant opportunity and substantial systemic risk. I do not see this narrative in my portfolio. Sure, there are parts of global markets that are expensive - notably yield-proxies, and parts of the tech industry. However, there are still plenty of bargains in other parts of the market hiding in plain sight.

Deflationary delusions, the wealth effect, and the direction of causality

Of the many absurdities traditional economic theory has served up, one that I find particularly bemusing is the following: that deflation is an economy's mortal enemy because it causes consumers to defer consumption on the expectation that prices are likely to decline in the future, hobbling economic activity. The idea emerged after a multi-decade period of deflation in Japan which saw concurrent weak consumption/growth.