Mocker Monday. 25 May.

Long term debt cycle

Nucleus investments has posted a great summary of the Australian position within the long term debt cycle (described by Ray Dalio and shared by Mockingbird on May 12), and what to look for in terms of good and bad policy responses in this space. Well worth your time to watch the whole thing. Debt Deleveraging: is this the big one? (Nucleus Investment Insights – Youtube)

Technology as a driver of deflation

The basic thesis is that technology, by making us more productive, makes things cheaper and consequently causes deflation. Some interesting concepts on the role of humans in a world where we no longer drive productivity, the current state of capitalism (or is it cronyism), and how everything is getting cheaper. The Fed’s Losing Battle with Deflation (w/ Jeff Booth) (Real Vision Finance – Youtube)

Retail opportunities or apocalypse?

The retail rollercoaster continues. The stockpiling and high sales seen in March haven’t continued past that. The expectation is for retail to rebound somewhat, but indications from China are that this won’t hit pre-lockdown levels. Australian retailers just had their worst ever month, with the ‘unprecedented’ fallout far from over (Business Insider Australia)

Shaver Shop Group SSG share price spiked with a well written report that they were stil 14% up on FY19. This was driven by online sales growth of ~400% even though foot traffic through stores was greatly reduced. ASX Announcement. Trading and Covid-19 Announcement. 14th May (Shaver Shop Group)

The outdoor retailer Kathmandu hasn’t fared as well, despite having a similar increase in online sales (250-300%). They acquired RipCurl in Oct 2019, and the books are muddied from the acquisition costs and their recent capital raising. Could this be an opportunity? ASX Announcement. Surge in onlines sales and staged reopening of stores. 5th May (Kathmandu Holdings Limited)

Good analysis of the decline of Target in Australia. Discussions of branding, competition, and market positioning. Worth a read. Why Australia’s Target stores had to close (ABC News)

Live documents

Various Mockers collect our opinions and thoughts into documents that we share with each other, to solicit other points of view to flesh out the ideas and improve our own understanding. We will share these here regularly. They represent our opinions and thoughts on a topic, and have varying degrees of research backing them up. They are not intended to be solid investment journalism. Despite this, they contain summaries and ideas that may be worth considering. Approach with caution. 

• Following on from last week’s discussion Mocker Bill has scribbled up some thoughts on The Big 4 Aussie Banks. Banks post Covid-19 (Bill Segall – Mockingbird Investment)
• Searching for opportunities in the retail space Mocker Hsuan started a Buy Hold Sell on outdoor retailer Kathmandu. BHS – Kathmandu (Mockingbird Investment)