Your Gateway to Digital Payments- PayPal

Contributed By: The Big Fat Whale

The digital payment industry has been on a steady climb for many years given the e-commerce revolution. The Covid 19 situation, has further led to new users who usually would not have shopped online to come onboard. All these bode well for a good runway for further consistent growth ahead.

With the coming of the new era of Metaverse by Meta, where the future could be split between your virtual and physical world, the need for a digital wallet would be essential. The digital wallet could be used for keeping your digital currency, digital assets (NFTs) and other digital-related items.

Source: Mordor Intelligence

The transaction value of the digital payments market was USD 5.44 trillion in 2020, and it is projected to be worth USD 11.29 trillion by 2026, registering a CAGR of 11.21% from 2021 to 2026

Source: Mordor Intelligence

The global payments market is expected to grow from $466.29 billion in 2020 to $517.68 billion in 2021 at a compound annual growth rate (CAGR) of 11%. The market is expected to reach $735.39 billion in 2025 at a CAGR of 9.2%.

Source: Businesswire.com

The growth as predicted by both Modor Intelligence and Businesswire for the digital payment industry would be in the region of around 11% for the next 5 years. This is consistent growth rather than exceptional growth but one thing is for sure, it is still a sunrise sector. Hence, it is going to be a good place to look for potential investments.

Here is the full article on the Merits of Investing in PayPal:

https://thebigfatwhale.com/your-gateway-to-metaverse-paypal/

 

King of Internet of Things- Xiaomi

We could still remember the first exposure to Xiaomi was by ordering online their smartphones many years ago. They managed to create a cult branding as most of their smartphones are sold within minutes during those days. It is not surprising as they have most of the features of an iPhone but yet is trading at a fifth of their price.

 

Source: Xiaomi Homepage 

Xiaomi has since evolved from the early days and has now in their product catalogue, a mind-boggling amount of household appliances and gadgets, on top of their smartphone range. The household appliances are connected to the Mi Home and the data analytics from the usage of the products would be Xiaomi's edge compared to their competitors.

The more prominent products in their line-up will be smartphones, smartwatches, robot vacuum cleaners, smart tv, fridge, air-conditioners, laptops and washing machines. Their products are in more than 80 markets.

Xiaomi's vision is not to make huge profits from the sale of hardware as they have explicitly stated they would not surpass a net profit margin of 5%.

With their good value and quality products, they hope to link all the devices to their ecosystem, they would then be able to monetize from the strength of their ecosystem.

This strategy is similar to Gillette selling the shaver cheaply and earning huge margins from the sale of blades.

Here is the link for the full article:

https://thebigfatwhale.com/king-of-internet-of-things-xiaomi/

 

Riding the Recovery of the Construction Sector- Hock Lian Seng

With Covid 19 causing huge disruption to the economy, the construction sector was especially affected given the migrant workers' high infection rate. But, things are starting to look brighter, with the government getting things back to normalcy. With the live with the covid directive, most migrant workers will be able to go back to work as long as they get vaccinated. 

 

Given the BCA guidance, things are starting to be turning up based on the contracts awarded. You could find the latest Building and Construction Authority forecast appended below. This could be due to pent up demand, given news of BTO delays. Moreover, the government's initiative to boost up infrastructure spending to jumpstart the economy post covid would also provide a further tailwind.

 

 

Source: BCA Media Release Jan 2021

 

Giving some context, the total contracts awarded in 2019 was in the region of 33 billion. The general forecasted contracts from 2014 to 2019 was also higher than the current forecasted contract values for the next few years.

 

But, things are moving rapidly and any forecast could be derailed or even surpassed. Nonetheless, one thing is for sure, the figures are likely going to be higher than 2020 which bear the full brunt of the pandemic.

 

Also, the trump card would be the contracts for Changi Airport Terminal 5 and the Integrated Resorts expansion, which have been excluded from the forecast.

Click Here for the Full Article:

https://thebigfatwhale.com/riding-the-recovery-in-the-construction-sector-hock-lian-seng/

Riding The Commodities Boom- Wilmar

Contributed By: The Big Fat Whale

There has been recent talk about an inflationary spike and pressure on the overall economy. Commodities prices have been creeping up. This phenomenon is not surprising given the huge money press at work and it is still running on full steam- Biden's recent 2 trillion infrastructure bill was passed.

The current US debt is at 28 trillion dollars. We touched on the Fiat Money symptom in our article supporting Silver as a hedge against hyperinflation.

Source: Dow Jones Commodities Index- spglobal.com

Looking at the charts, the commodities prices have been on a steady ascent since mid-2020.

Looking around us, there have been new policies to increase wages of security guards to 3500 dollars by 2028. This is equivalent to or more than a fresh graduate pay in today's term. We can still remember our starting pay when we graduated ages ago was just 1800-2000 dollars.

Click Here to Read More:

https://thebigfatwhale.com/riding-the-commodities-boom-wilmar/

 

6 Indicators to Gauge if S&P 500 is Peaking

Contributed By: The Big Fat Whale

The market has been on a tear ever since its huge 35% correction in March 2020- S&P index drop from 3400 to 2200- due to the Covid 19 pandemic. It has more than doubled from the bottom to its current level at 4650. 

So what's the outlook ahead?

Is it on a never-ending trajectory to the moon?

We will be looking at 6 indicators and the chart of S&P to give us some indication if things are getting way too hot that will lead to the imminent meltdown.

The power of the Fed printing machine has worked wonders. But is the market getting too complacent?

 

Buffet Indicator

 

Source: www.currentmarketvaluation.com

The Buffett Indicator is defined as the value of a country's publicly traded stocks divided by its gross national product. The greatest investor of our lifetime, Warren Buffet, have used this indicator to assist him to gauge where the valuation of the market stands at any moment in time. 

We are now way off the charts and looks excessively overvalued. If the market just reverts to the historical trendline, it could easily be a 50% correction. 

Click Here to Read More:

https://thebigfatwhale.com/a-look-into-6-indicators-to-gauge-if-the-market-is-peaking/ 

Fed's Latest Move- Demise of ARKK and Innovation Stocks?

Contributed by: TheBigFatWhale

With the latest move by the Fed, where they are looking to have 3 interest rate hikes in 2022 and into reducing their balance sheet, growth stocks have not been faring well. The move by Fed is a move towards a monetary tightening policy that will drain the exodus of liquidity that has been pumped into the economy since early 2020. 

Source: Tradingeconomics.com- Fed Balance Sheet

The Fed Balance sheet has more than doubled since 2020 which is a worrying sign that things are going out of control. Therefore, the indication by Fed to reduce their balance sheet is a sound and prudent move provided they are really serious about doing it. We touch on our previous article about the 6 indicators to gauge if the S&P 500 is peaking with the Fed Balance sheet as one of our concerns.

With a potential stoppage of easy money, the prospects for growth stocks could be bleak. Most of the growth or innovation stocks run on the theory that they would be wildly profitable once they are able to scale. Moreover, it is the vision for the future and it will disrupt the whole way things are done. 

Click Here to Read More:

https://thebigfatwhale.com/feds-latest-move-demise-of-arkk-and-innovation-stocks-quick-thoughts/

NFTs as an Alternative Investment?

Contributed by: TheBigFatWhale

There have been lots of hype on NFTs recently. It is not surprising given that the Beeple NFT digital art piece, " The First 5000 days" was sold for a whopping 69 million dollars. It was purchased by a Singaporean, Vignesh Sundaresan (Metakovan), who have the conviction that it would be worth a billion dollars in the future. Fun Fact: Beeple has not sold any of his digital art for more than $100 before this auction.

The origin of NFTs could be dated back to 2014 where bitcoin minted the coloured coins. In 2017, Cryptopunks and Cryptokitties was the impetus to pivot the NFTs market.

To have a feel of the prices in the digital NFTs market, you could check out the 10 most expensive digital art to date.

Considering that CryptoPunks was a project by Larva Labs to create 10000 uniquely generated characters using the Ethereum network through an algorithm. Ethereum is the second most popular blockchain after Bitcoin and has been used for commercial contracts.

They gave out all the characters for free at its launch in 2017- in the NFT world, it is called an NFT drop. Now some of them are worth millions of dollars- what a joy to be one of the frontrunners and get a character of the Cryptopunks to call our own.

 

Source: Pexels

So what exactly is NFT?

The term for it is non-fungible tokens and they are unique by themselves, that is backed by a multimedia file. It could be digital art, video, music tune, sound recording, a tweet (Jack Dorsey first tweet sold for $2.9 million) or even a blog post, etc.

The difference between an NFT and a bitcoin would be bitcoin is fungible. There is no difference between one and the other and that makes it exchangeable; Bitcoin is like digital gold. As for NFT, most of them are currently minted in the Ethereum network, it is an original token or one of its kind.

Therefore, once we buy an NFT token, it is similar to owning a baseball card or being an owner of an original painting. Scarcity brings demand and hence possibly higher prices in the future if we choose the right NFT- must have an eye to find the next Monet, Miro or Dali of the digital art world.

Click Here To Read More:

https://thebigfatwhale.com/nft-as-an-alternative-investment/ 

 

Is Grab A Worthwhile Investment?

Guest Post by: The Big Fat Whale 

UPDATE (24th Dec 21): Grab has the intention to acquire Jaya Grocers which is at a premium but it could be a good move to establish positive cash flows and sustainable earnings. From the influx of 4.5 billion dollars, acquiring profitable businesses that have synergies with their network would be the right path forward in our view.

Grab is very much part of our life if you reside in South East Asia- be it hailing a Grab taxi, ordering food from Grab food, arranging a courier service and now even catering to our insurance and financial needs. They have the title of being the SuperApp in South East Asia.

Recently, they have just launched their stock listing in Nasdaq through the merger with Altimeter Growth Corp which is a special purpose acquisition company (SPAC) valuing the deal at $40 billion. Grab raised $4.5 billion with this merger.

Truth be told, we were never interested in Grab as an investment, especially so with headlines of them losing billions per year plastered through different media outlets. Nonetheless, with this stock listing, we decided to understand the company better and see if a turnaround is in sight.

 

Grab Business Model

 

Source: Form 8k- Altimeter Growth Corp

Grab was started in Malaysia as MyTeksi in 2012 and within a span of 9 years, their business has now expanded tremendously to include 4 main categories. They are namely:

• Mobile (Transport)
• Deliveries (Food and Groceries)
• Courier Express 
• Financial Services (Fintech)

 

Their coverage now covers the 8 countries in South East Asia as illustrated from the diagram above.

Click Here to Read More:

https://thebigfatwhale.com/is-grab-a-worthwhile-investment/