Weekend Reading

8 December 2018 | by Ensemble Capital

A summary of this week’s best articles. Follow us on Twitter (@INTRINSICINV) for similar ongoing posts and shares.

FOR COMPANIES, IT CAN BE HARD TO THINK LONG TERM (John D. Stoll, @johndstoll, WSJ)

Apple recently announced that it will no longer be reporting on their quarterly sales numbers in an attempt to focus investors’ attention on long-term results as opposed to short-term ones.  This announcement is part of an ongoing debate around the focus on short-term versus long-term thinking on Wall Street.  Should companies report less frequently than quarterly?  What are the potential market consequences on either side?

AUDI TO SPEND NEARLY $16 BILLION ON SELF-DRIVING CAR TECH, ELECTRIFICATION THROUGH 2023 (Kirsten Korosec, @kirstenkorosec, TechCrunch)

Audi announced recently that they will invest significant capital into continuing to develop their self-driving and electrification technology.  Car manufacturers globally are looking to keep up with the future of transportation by investing significant capital into self-driving, electric cars.

THE FRIENDSHIP THAT MADE GOOGLE HUGE (James Sommer, The New Yorker)

In the year 2000, Google almost collapsed when a cosmic ray from a supernova hit one of their server chips and flipped a binary bit from 0 to 1 corrupting their index of the web.

MILLENNIALS DIDN’T KILL THE ECONOMY.  THE ECONOMY KILLED MILLENNIALS. (Derek Thompson, @DKThomp, The Atlantic)

The Millennial generation gets blamed for a lot of the economic woes of today’s era, but are they really the ones to blame?  “Millennials were promised rising wages, homes, and cars; they got 140 characters. Okay, fine, 280 characters. That’s nothing to live on. But it’s just enough to efficiently articulate one’s despondency alongside 80 million frustrated peers, all of whom are exasperated with a system that keeps finding new ways to brand its young economic victims as cultural criminals.” Sean Stannard-Stockton also recently wrote about what the millennial generation means for the economy and investing.

HUAWEI EXECUTIVE’S ARREST INTENSIFIES TRADE WAR FEARS (Mark Landler, Edward Wong and Katie Benner, New York Times)

Intensifying trade war fears have been cited as a key reason for much of the downward market pressure of late.  Concerns increased this week as Meng Wanzhou, a top executive of one of China’s flagship technology firms, was detained for allegations that her company, Huawei, has been violating sanctions on Iran.

FED WEIGHS WAIT-AND-SEE APPROACH ON FUTURE RATE INCREASES (Nick Timiraos, @nicktimiraos, WSJ)

While Thursday December 6th felt like a down day in the markets, it was really a down morning followed by a massive 700 point rally in the Dow. This article is being cited as the reason for the rally.  The news, however, isn’t all that new and is consistent with what the Fed has communicated to date.  A pause after December would still potentially be consistent with two additional rate hikes in 2019.

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