Weekend Reading

24 August 2019 | by Ensemble Capital

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

Whole Foods CEO On Plant-Based Meat Boom: Good For The Environment But Not For Your Health (Jade Scipioni, @jadescipioni, CNBC)

There has been plenty of talk about Beyond Meat and Impossible Foods; the two main players in the plant based “meat” market.  I have yet to try one of these meat alternatives but I have to say that something about it is intriguing.  Impossible Foods started in 2011 and Beyond Meat in 2013 and several years later both of these companies have exploded.  So much so that in May of this year, Beyond Meat had the best IPO so far with the stock surging more than 163% on the day of its market debut.  This kind of growth isn’t without skepticism and some are arguing that the products in these plant based products is just as unhealthy or even more unhealthy than the traditional beef based burger.

The Japanification of Bond Markets (The Economist)

Central banks have been cutting interest rates globally with some even having negative interest rates.  Germany, for example has negative interest rates on everything from overnight deposits to 30-year bonds.  The inversion of the US yield curve and fiscal stimulus utilized among central banks has renewed concern about global stagnation.  This article explores the “Japanification” of global economies in which rich, debt-ridden economies are destined to follow the path set by Japan.  But the article offers up an alternative narrative in which the world chooses to follow a different path than Japan and manages to jump start growth globally.

Facebook’s Libra Bets It Can Bank The Unbanked (Paul Vigna, @paulvigna, The Wall Street Journal)

Facebook has an ambitious goal to reach the hundreds of millions of people worldwide who don’t trust banks and financial institutions to trust them with their finances.  This has been a goal of major cryptocurrencies such as Bitcoin and Ethereum that hasn’t yet been widely achieved.  The challenge of cryptocurrencies is that they aren’t an acceptable form of payment at most businesses and there is also the problem of marketing them.  Facebook has a clear advantage here with over 2 billion users, they can easily get in front of a large audience.  This article examines the challenges cryptocurrencies must navigate to becoming a mainstream method of payment.

Silicon Valley Looks North as Tech Giants Expand in Toronto (Vipal Monga, @vipalmonga, The Wall Street Journal)

Silicon Valley has continued to expand as new companies are looking to grow and existing business expansion continues.  With the strong technology presence and the growing population, Silicon Valley prices have only gone up.  Because of this, several major companies such as Uber Technologies, Alphabet Inc., and Microsoft Corp. are building offices and expanding their workforces in Toronto, Canada.  The employers cite the deep pool of skilled workers paired with more affordable salaries and office space.  The travel between San Francisco and Toronto has been increasing so much that airlines have added 139 additional flights between the cities in the past two years.  As real estate in Silicon Valley becomes more unattainable, some employers are now looking at alternative areas to grow their businesses.

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