Weekend Reading

29 December 2018 | by Ensemble Capital

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

What’s Next for Silicon Valley?  Our VC Roundtable Points the Way (Lauren R. Rublin, @laurenrublin, Barron’s)

There’s no denying that Silicon Valley has seen and produced some of the fastest growing businesses valued for multiple billions over the last decade.  Major companies like Uber, Lyft, Pintrest, Slack and more are slated to go public in 2019 minting several new multimillionaires.  With an estimated $180 billion raised by VC companies since 2013, one might wonder what the path of technology will be as we move in to 2019.

I’m Stunned by all the Recession Talk – Mohamed El-Erian Warns Against Self-Fulfilling Prophecies (Matthew J. Belvedere, @Matt_Belvedere, CNBC)

Some economists are predicting a recession next year and many cite the flattening yield curve as the tip off.  With unemployment at historically low numbers, the Fed raising interest rates, and worries about an economic slowdown, is the market overly concerned?  “The Commerce Department on Friday said the economy expanded at a solid 3.4 percent annual rate in the third quarter, slightly slower than the previous estimate. Economists see gross domestic product slowing in the fourth quarter to around 2.5 percent. But for all of 2018, GDP is expected to log its best year since 2005.”

How Google Will Destroy Uber (Stephen McBride, @DisruptionHedge, Forbes)

If autonomous vehicles aren’t in your backyard, it might be difficult to grasp the rate at which their numbers are growing.  So much that Waymo’s cars have logged over 11 million miles and they’re logging another 1 million per month.  Uber is no stranger to this business and they also hold a major presence here.  There is still much research to be done before these gain public trust but what company is lined up to take the most market share?  Stephen McBride discusses his thought here.

Dow Soars 1,086 Points in a Miraculous Comeback (Sherisse Phan, @Sherisse and David Goldman, @DavidGoldmanCNN, CNN Business)

After weeks of a selloff in the market the Dow soars to a record breaking 1,086 point gain on December 26th.  “Stocks rose higher despite virtually no news – which may have been a catalyst in its own right.”  Wondering what’s causing the market volatility and where we’re headed from here?  Our own Sean Stannard-Stockton, CFA, President and CIO of Ensemble Capital takes a closer look into market concerns in his article The Market Decline of 2018 & What Comes Next (Sean Stannard-Stockton, @INTRINSICINV , Ensemble Capital)

Opinion: 3 Reasons Why the Fed Wants to Keep Raising Interest Rates (Martin Feldstein, @mfeldstein15UF , MarketWatch)

The latest December rate hike spooked the market and caused a selloff before the massive rally on the 26th.  When looking at rate hikes you have to question if you believe the economy is strong enough to tolerate higher rates.  The market seems to think the Fed is raising rates too quickly and that the economy will slow as a result.  The Fed seems to think the economy can take the increased rates.  Whose side are you on?

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