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The Zeitgeist – 4.12.2019

Summary:
Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it. But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world. April 12, 2019 Narrative Map – US Equities The last few years have been brutal for shareholders of Gilead Sciences (GILD). The biotech actually started healing Hep C patients causing a plunge in revenues from a key drug. The company has now shifted to a HIV growth machine and when combined with a reduced dependence on HCV drugs makes for a promising scenario

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Rusty Guinn writes The Zeitgeist Weekend Edition – 4.20.2019

Ben Hunt writes The Zeitgeist – 4.19.2019

Ben Hunt writes The Zeitgeist – 4.18.2019

Rusty Guinn writes The Zeitgeist – 4.17.2019

Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it.

But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world.


April 12, 2019 Narrative Map – US Equities

The Zeitgeist – 4.12.2019

The last few years have been brutal for shareholders of Gilead Sciences (GILD). The biotech actually started healing Hep C patients causing a plunge in revenues from a key drug. The company has now shifted to a HIV growth machine and when combined with a reduced dependence on HCV drugs makes for a promising scenario where revenues have finally hit bottom setting the stock up for a rally.

I think of Gilead as a cautionary tale for the entire healthcare industry. Two things have crushed the stock over the past two years:

  • A couple of drugs saw their patent protection expire, so prices plunged as generics came into the market.
  • Hep C patients were effectively cured by a new drug regimen, crushing demand for the lucrative drugs that didn’t cure them but kept them alive.

The first point here is the smaller of the two and has been debated endlessly. It will be debated more endlessly still in the 2020 presidential campaign.

The second point, though, is by FAR the larger issue. Which means that NO ONE will talk about it.

The business of “healthcare” depends on people staying sick. So they will.

Cures are soooo 20th century.

The 21st century is all about “testing for” your disease and “living with” your disease.

Why?

Because that’s where the money lives.


The wall of worry surrounding Asia’s double-digit stock market growth this year just got another impetus: equity ETFs inflows have dwindled.

Despite a 9 percent increase to $502 billion in assets under management for Asia equity exchange-traded funds so far this year, net inflows have been tapering off, according to data compiled by Citigroup Inc. On top of that, a monthly net outflow — the second time in more than two years — was recorded in March.

Two ET points to make here:

Walls of Worry are a good thing for asset prices, not a bad thing. You always climb the wall.

There are better ways to track money flows than eyeballing historical monthly data.

For more, read this:


Consumer activist and former Presidential candidate Ralph Nader lost a grand niece in the Ethiopian Airlines, so naturally he is close to the issue.

He came out with a rather extreme claim that the 737 MAX as it stands needs to be treated as a faulty product and, in his words “recalled.”

Centering around the aerodynamic changes caused by engine placement, he argues that the “grandfathered” certification by the FAA was rash and that Boeing’s involvement in the certification process of its own plane was an example of regulatory capture.

Nader argues that trust is lost, the aircraft is fundamentally less safe than the aircraft before it.

The Zeitgeist – 4.12.2019

My father owned a red Corvair almost exactly like this one. He loved that car. Almost died in it, too, when he was t-boned at an intersection on his way to work in Bessemer, Alabama. That was in 1966. I was two years old.

Ralph Nader wrote “Unsafe At Any Speed” in 1965. That book changed the US automotive industry forever, although I bet not 1 in 10 automotive sector analysts have ever heard of it, much less read it.

And I can guarantee you that not 1 in 100 aerospace sector analysts have ever heard of that book, much less read it.

The Boeing 737 MAX is our generation’s Chevy Corvair.

Or at least it should be.


The Zeitgeist – 4.12.2019

The Zeitgeist – 4.12.2019

The Zeitgeist – 4.12.2019

Though never stepping out of Katrina Lindsay’s original costumes — sharply tailored suits in shades of gray that bring to mind daguerreotype family portraits — the brothers Lehman transform themselves into an innumerable host of others. These include their descendants, spouses, colleagues, rivals and employees during more than 160 years.

The word “nothing” echoes throughout. Nothing is what the Lehman brothers say they come from; nothing is finally what’s left of all they’ve achieved. That’s what happens when money floats into the ether of latter-day Wall Street, unmoored by connection to substance.

Did you know that the Lehman Brothers – by which I mean THE Lehman Brothers – got their start in America by setting up shop in Montgomery, Alabama?

This is a long play … more than 3 hours, which is apparently way down from the original 5 hours staging … so not for the faint of heart. But seeing this is a bucket list item for me.


Rusty Guinn
Executive Vice President of Asset Management, Salient. Rusty Guinn is the executive vice president of asset management at Salient. He oversees Salient’s retail and institutional asset management business, including investment teams, products, and strategy. Rusty shares his perspective and experience as an investor on the Epsilon Theory website.

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