1. The Charts That Matter
Special report - a world of bubbles
April 14, 2015 – Loïc Schmid
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
1
2. 2
Are they all take-over candidates?
Have they all found the AIDS vaccine?
Hope, springs eternal?
Bubble #1
Biotech sector fantasy
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
3. 3
Same-Same, but different responsibilities?
Mr Barack Obama (a guy with tiny responsibilities) earns 100x less than ZLATAN
Seriously folks?
Ok, Mr Obama has a plane, nice houses and a few “benefits” that goes with his job but is
still does not make up the amount
Bubble #2
Football players Vs. world political leaders
Rank Name Total earnings 2014
1. Cristiano Ronaldo USD 80.0 Mn
2. Lionel Messi USD 64.7 Mn
3. Zlatan Ibrahimović USD 40.4 Mn
4. Gareth Bale USD 36.4 Mn
5. Radamel Falcao USD 35.4 Mn
6. Neymar USD 33.6 Mn
7. Wayne Rooney USD 23.4 Mn
Rank Name Total earnings 2014
1. Mr Lee Hsien Loong USD 2.18 Mn
2. Mr Chun-Ying Leung USD 0.53 Mn
3. Mr Barack Obama USD 0.40 Mn
4. Mr Tony Abbott USD 0.35 Mn
5. Mr Michael Higgins USD 0.34 Mn
6. Mr Xavier Bettel USD 0.34 Mn
7. Mr Stephen Harper USD 0.29 Mn
Source : sporteology.com
Earnings = salary + other
Source : richestlifestyle.com
Football stars World leaders
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
4. 4
London is fun, London is great but London real estate has reached insane levels, I’m not
even talking about fancy neighborhoods…
HNWI are buying houses like hot cakes (…)
Its for the climate
Bubble #3
London real estate
London
UK Nationwide
Scotland
BUBBLE
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
5. 5
Bubble #4
Swiss National Bank balance sheet
Hard to believe but the SNB’s balance sheet has grown massively in size over the past years
due to 2008 financial crisis and … the European mess.
31.12.1996 = 75 Bn CHF
28.02.2015 = 569 Bn CHF
This will end up badly
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
SNB balance sheet total assets
100 = 31.12.1996
6. 6
Bubble #5
Long USD
Do you know anybody who is currently not bullish USD?
Do you know any macro or CTA hedge fund which is not leveraged on the USD trade?
If QE#4 comes before rate hike then fasten your seatbelt (…)
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
7. 7
Bubble #6
Defensive blue chips with high dividend yields
Dividend stocks are the place to be…
For years now, institutional and mean variance strategies ;-) have piled into the same stocks
But do investors care of valuation anymore or are they blinded by the [poor] search for
yield?
Stock YTD % LC Est P/E 2015 Dividend yield
Nestlé +3.43%* 22.22x 2.92%
Bayer +26.81% 20.47x 1.57%
Danone +18.77% 22.21x 2.32%
L’Oréal +26.85% 28.65x 1.53%
Anheuser Busch +24.60% 23.09x 2.57%
*lagging. Due to the SNB thing … Source : Bloomberg
Selection of European stocks
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
8. 8
Bubble #7
Chinese stocks
A year ago, I was bullish on Chinese stocks not because of the economy but because of the
herd behaviour !! It worked! I just closed my position after a meaningful performance …
Trading is becoming the new Chinese hobby after (ghost) housing
Trading accounts are opening like real estate agencies
This will end-up badly. But when?
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
Shanghai Shenzhen CSI 300 Index
9. 9
Bubble #8
DAX index
German stocks are up 239% since March 2009
And YTD +24.3%
Even if I do understand that QE and EURO weakness is bullish for German stocks, things have
gone too far, too fast in my opinion.
Est P/E of 15.7x for 2015… if earnings follow and if market does not drop of course…
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
DAX Index
*
10. 10
Bubble #9
Short oil
Short oil, what else?
When its obvious, it gets obviously wrong?
It’s a very crowded trade now
However, hard to believe that oil could go back to $100
… well… you never know what could happen this year in the Strait of Hormuz?
ICE Brent Crude Cot Producer
Merchant Net long contracts/futures
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015
Short baby, short
11. 11
Sorry, no bubble #10
Just a reminder of the typical [financial] bubble pattern…
Investir.ch Charts That Matter are sponsored by SEQUOIA Asset Management SA
Loïc Schmid – 14.04.2015