David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Alibaba jumps ahead of Amazon with Maersk tie-up

    This article by Sam Chambers for splash247 may be of interest to subscribers. Here it is in full:

    Alibaba’s move to partner with Maersk Line should be seen as a game of one-upmanship with US rival Amazon, a leading name in online logistics has said.

    Chinese customers will now be able to book space on Maersk ships, a first for the industry and one that potentially removes many freight forwarders as middlemen.

    Dr Zvi Schreiber, CEO and founder of logistics technology Freightos, offered his perspective on the bigger picture and what this deal means for online shoppers and Alibaba’s rival, Amazon.

    “Maersk is testing the waters of digital sales with one of the world’s largest ecommerce companies while threatening forwarder business. But for Alibaba, this is a direct challenge to global retailers like Amazon. Beyond drones and futuristic supermarkets, Amazon opted to get licensed as a forwarder. Alibaba one-upped them by going directly to the world’s largest ocean liner. Point, Alibaba.” 


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    Brexit Plans Rattle Pound and Stocks as Gold Rises

    This article by Cecile Gutscher and David Goodman for Bloomberg may be of interest. Here is a section:

    Caution dominated markets amid tough talk from May and Donald Trump about Europe’s economic and political institutions. British government officials trying to limit damage to the pound will speak to major banks in London before the U.K. leader sets out her vision for leaving the bloc in a speech on Tuesday, according to people familiar with the situation. Meanwhile Trump predicted that Britain’s exit will be a success that will encourage others to do the same. He also branded NATO obsolete.

    “Markets are trading in risk aversion mode,” said Neil Jones, the head of hedge-fund sales at Mizuho Bank Ltd. in London. “Investors and corporates around the world are concerned by the prospect of a hard Brexit. Pound rallies are limited and weak, while plunges are harsh and prolonged.”


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    Email of the day on MOOCs

    On your piece about MOOCs I couldn't help but observe that you did not mention FutureLearn

    This service is UK based and is an offshoot of the Open University.

    It claims to be the largest MOOC. See below. I've used it and it's very good. I particularly like the fact that many courses are short - 6 weeks and typically 2 - 3 hrs per week.  
    All the best


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    Email of the day on reshoring and automation

    This is indeed well under way and generally government-supported trend globally, with Germany (as always) at the forefront, but also the US and the rest of Europe promoting and facilitating the process.

    The article below is interesting I think

    It gives an idea of how easily these processes are implemented (2 weeks to start production) and the advantages offered to producers (design innovation + shorter time to market + customisation). €2 million investment for being able to produce a total of 200k pieces every year seems very low.

    Shima Seiki (6222) - that provided the machinery to Benetton - is a company worth looking into, and the recent rally in share price confirms what you mentioned re the growth potential from clothing manufacturers in Asia.

    This is also confirmed on their IR page


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    Davos Wonders If It Is Part of the Problem

    Here is the opening of this topical article from Bloomberg:

    Kenneth Rogoff can pinpoint the moment he started to grow concerned Donald Trump would be the next U.S. president: It was when Rogoff’s fellow attendees at the World Economic Forum’s annual meeting last January said it could never happen. “A joke I’ve told 1,000 people in the months since leaving Davos is that the conventional wisdom of Davos is always wrong,” says the Harvard professor and former chief economist of the International Monetary Fund. “No matter how improbable, the event most likely to happen is the opposite of whatever the Davos consensus is.”

    The repeated failure of business and political elites to predict what’s coming—last year, that included the U.K.’s vote to leave the European Union—doesn’t strike those returning this month to the Swiss Alps as very funny. After a year in which political upsets roiled financial markets and killed off the careers of once-dominant Davos-going politicians, the concern for delegates attending this year’s meeting isn’t that their forecasts are often wrong, but that their worldview is.

    In its four decades of existence, the WEF has nurtured a broad consensus in favor of globalization and open markets. At its core is the notion that capital, goods, and people should be able to move freely across borders, a principle that can deliver huge benefits to those with education and money but seems terrifying to those without either. For the 3,000 people who will convene in the small Swiss town from Jan. 17 to 20, the 2017 event could be a moment of reckoning. At speakers’ podiums, coffee bars, and the ubiquitous late-night parties, they’ll be asking themselves whether Davos has become, at best, the world’s most expensive intellectual feedback loop—and, at worst, part of the problem. “Since the recession, the boom has benefited the upper-income earners and done little for those in the middle or on less. That’s the backlash,” says Nariman Behravesh, the chief economist for research provider IHS Markit. “The Davos vision of the world has not delivered a broad-based economic recovery.”

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    Email of the day 1

    On Ambrose Evans-Pritchard and market views:

    Dear David, 
    Thank you for posting this and other articles from the Telegraph, which are always informative. I particularly enjoy reading A E-P. He has a breadth and depth of experience that is quite unique among UK journalists and he never fails to be dramatic. I remember 2008 when A E-P was calling for a financial crash, and few others agreed. I don't know whether he acted on it and made any money. I rather doubt it. 
    One thing I bear in mind (with all newspaper articles) is that journalists are not investors - and if they were successful investors they would not be journalists!
    Your views on markets have more gravitas than any journalist.

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    Email of the day 2

    On the Fed, Mr. Trump and a fiat monetary system:

    Hi, David, and thank you for posting the above article. I tend to agree with your assessment of it. My one observation is that while the author impugns the Fed, and justly so, as a principle player in fostering the zeitgeist we hope Mr. Trump will cause to be successfully addressed, he makes no mention of a fiat monetary system that enables the Fed to play its role so generously. Is it fair to view that as a significant omission or am I flirting with the danger of the single story?

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