Navigating the Investment Landscape in a Stagflation World- Revisiting the 1970s

Contributed By: The Big Fat Whale

Stagflation is the buzzword in recent times. The definition of stagflation will be persistent high inflation combined with high unemployment and stagnant growth in a country's economy.

The most relatable period in which we can have insights into the impact of stagflation would be a relook into the 1960s-1970s period. This was the only time in modern history(20th and 21st century) that this economic phenomenon has happened.

Inflation was persistently above the 8% mark throughout the period from 1972 to 1981.

History Rhymes

As Mark Twain famously quoted:

"History does not repeat itself but it certainly rhymes"

There are many market analysts and commentators that dismissed the possibility of stagflation happening and argue that the situation is different this time. One of the main arguments is that stagflation is caused by the oil shock in the 1970s which send oil prices spiralling up and the US was heavily dependent on it.

Currently, the US is a net exporter of oil as they have the largest shale oil reserve in the world and with the advent of alternatives (Solar, Wind and Nuclear), the impact of oil on the economy would be less pronounced.

But we might not have an oil shock but a debt shock could be on the cards which have been built up from trigger happy Quantitative Easing in the past. Debt to GDP is at a record of 124% versus 35% in the 1970s.

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Investment Opportunities in the Gene Editing Field

Contributed by: The Big Fat Whale

The birth of the first genetic edited twins, Lulu and Nana in November 2018, has brought the gene-editing field into the spotlight.

This was made possible by He Jiankui who was at first lauded for this achievement by China's government but after a day, they changed track as there was international attention to this controversial milestone.

The scientist was trying to rid the twins of the HIV virus, where one of the parents was a carrier. He was eventually jailed for 3 years for this feat.

Bill Gates has highly recommended the book, The Code Breaker, which follows the events leading to the invention of the CRISP gene-editing technology by Jennifer Doudna.

For this breakthrough, Jennifer Doudna and Emmanuelle Charpentier earn the esteemed Noble Prize. This technology was also utilised by He Jiankui for the birth of the gene-edited twins.

They have opened the floodgates for the launch of this field and the different applications could lead to possibilities that will allow us to cure diseases, fend off viruses, and enhance our children.

 

Gene-Editing Industry Outlook

We will look at the potential of the sector outlook through the lens of the different market research companies' insights.

The global gene editing market is expected to grow from USD 4.2 billion in 2020 to USD 13 billion by 2028, at a CAGR of 15.2% during the forecast period 2021-2028.

Source: Fior Markets

According to Emergen Research, the global gene editing market size was USD 5.20 billion in 2020 and is expected to reach USD 18.50 billion in 2028 and register a revenue CAGR of 17.2% during the forecast period, 2021-2028.

Market Dynamics:

The global gene editing market revenue growth is majorly attributed to factors such as the growing prevalence of chronic and genetic disorders globally, increasing research & development activities in the field of genomics, continuous advancements in gene therapy, and increasing applications of genome editing technologies in the pharmaceutical, biotechnological, and agricultural sectors. Technological advances in gene-editing tools, the rapid spread of the novel coronavirus worldwide, and the increasing use of CRISPR-based diagnostic tools to detect the SARS-CoV-2 virus are among the other key factors expected to drive the global market revenue growth over the forecast period.

Source: Biospace

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Food Economics: Rustic Pet Haven Food Hub

It is always exciting to discover new places that will create a different experience, especially if gives a laidback and nostalgic feel. We were looking for a place that is pet friendly for a relaxing weekend outing.

It brings us to Faber Drive which is in the Clementi vicinity with Nanhua Primary School as a good landmark that is nearby. The cafes and eateries are nestled in the middle of a private estate in a possibly 1980s building.

We went to the gelatolabo which is famed for its mochi waffle with ice cream. There were 2 more eateries, a pub and a cafe situated in this hub. The prices are generally reasonable and the waffle from gelatolabo is indeed unique as mochi was embedded inside the waffles.

There are seatings outside the eateries and cafes where pets are welcomed. It gives me a feeling of being transported back to the 1990s or 2000s when the pace is slower and brings our heartbeat down a notch.

You can choose to sip on a coffee and just idle your afternoon away while reading a nice book or you could take your dog for a stroll around the estate.

It is indeed a great find and would be back to try out the other eateries and cafes where the food looks great and prices are friendly to the wallet.

Have a great week ahead and Faber Drive could be a chill-out place for you to check out this weekend!

Would you wait for a deceased for 9 years?- Story of Hachi

In the midst of the current gloom and doom of the war coupled with the fear of economic armageddon- tech and innovation stocks have already felt the ripples, it is good to take a step back and reflect on what really matters.

Over the weekend, I have caught this 2009 movie, Hachi: A Dog's Tale, featuring Richard Gere. It is based on a true story in Tokyo during the 1920s of a Japanese college professor and his dog. The professor passed away in 1925 due to a brain haemorrhage. The dog continues his daily ritual of waiting for his owner at the train station for 9 years before passing away.

There is a statue erected in memory of Hachi at the Sibuya Station where he has waited for his owner.

It certainly brings many thoughts such as life could be really simple with a simple goal such as for Hachi; which is to see his owner once again. The devotion, dedication and determination are what every one of us could learn from.

So if we desire a simple lifestyle, we could gain financial freedom earlier and do what we love and desire instead of it being another job. With the ever-increasing expectations- a bigger home, a better car and an ideal lifestyle- that society is piling on us and with simple goals- owning a home- fleeting away due to it being out of reach, it has even inspired the "Lying Flat" movement in China.

The advent of technology and social media, it has led to their own set of problems such as cyberbullying, wastage of productive time, scams and misdemeanours. Nonetheless, from the productivity angle, it has really helped to boost up the economy and address workers shortage issues.

I would strongly recommend this show as it would evoke not only emotions but hopefully self-reflections in these challenging times. It will make us more appreciative given that there are many that are worse off than us- imagine those in the war zone now.

Hope everyone would enjoy the show as much as I do. 

Life could indeed be very simple and meaningful.

Here is the link to the actual Hachi story:

https://www.cesarsway.com/hachiko-story-hachi/

Is Meta a Buy Now?- Not at Maximum Pessimism

As chronicled by John Templeton's famous bet in the Great Depression, he put in $100 on all the stocks listed in the stock exchange, which was 104 stocks that cost him $10,000 dollars (Equivalent to $185,000 today).

His bet was on the basis that the market has reached maximum pessimism. His good foresight has proven prescient and it netted him close to a 5 times returns when he eventually liquidated all of his positions years later.

The point we are trying to highlight is that the market tends to overreact and therefore, we do not feel Meta have reached the optimal entry-level despite the huge decline in recent times. The bearish trend might just have started and it would need some time to play out.

Let's first revisit some main points that led to Meta's plunge:

1. The fall in Daily Average Users (DAUs) for Facebook- an important barometer of growth.
2. Apple Privacy Policy would cost Meta 10 Billion a Year
3. 10 Billion a year to be spent on research and development for MetaVerse
4. Credible Competitor in Douyin (TikTok)

 

Source: Meta Corporate Presentation

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