Top Reads this Week (2 June)


Rounding up top reads from around the web, as shared by fellow investors and myself in the Financial Horse Facebook Group.

How the Tech Giants Make Their Billions (Visual Capitalist)

Let’s dig deeper, and see the differences in how these companies generate their revenue.

You are the Customer

In the broadest sense, three of the tech giants make money in the same way: you pay them money, and they give you a product or service.

Beyond the China-U.S. Trade War (Ray Dalio)

As I have explained for a while, the U.S.-China conflict is much more extensive than a “trade war.” It is an ideological conflict of comparable powers in a small world. It’s about 1) China emerging to challenge the power of the U.S. in many areas and 2) these two countries having two different approaches to life­—one that’s top down and one that’s bottom up. These conflicts extend to American and Chinese businesses, technologies, capital markets, influences over other countries, militaries, ideologies, and most everything else. They are made especially difficult because the Chinese, the Americans, and those who deal with them both are now so interdependent, with the interdependencies being both vulnerabilities of each and weapons that each can use to hurt the other.

Singapore Telecom Sector – How Would M1’s Mobile Makeover Sway the Sector (DBS Research)

M1 revamps its mobile offerings completely with cheaper handset-bundled plans and more expensive SIM only offerings.

SingTel and Netlink Trust are out top picks in the sector.

The Blacklisting of Huawei might be China’s Sputnik Moment (Fareed Zakaria)

Many of us have been waiting for a new Sputnik moment, the point at which the challenge from China spurs the United States to get its act together. We may now be witnessing such a watershed, but in Beijing. The Trump administration’s decision to blacklist Huawei — the world’s seventh-largest technology company — might well be China’s Sputnik moment, with seismic consequences.

What The Bond Market And Real Estate Market Are Telling Investors (Seeking Alpha)

Corporate debt-to-EBTDA is near an all-time peak.

Treasury yields across the curve – 2s, 3s, 5s, and 10s – presently trade below the Federal Funds Rate (FFR) of 2.38%.

Existing home sales have experienced 14 consecutive months of year-over-year declines.

Even with the 30-year fixed dropping form 5% to 4%, servicing the home ownership dream is prohibitive.

The bond market and the real estate market point to an economic slowdown in the near future.

UOB CEO sees South-east Asia as ‘haven’ from trade war (Business Times)

United Overseas Bank (UOB) is betting South-east Asia will shield it from the escalating trade war between the US and China, distancing itself from the approach of its two main rivals that have expanded their focus to Hong Kong and the mainland.

Singapore added to US watch list for currency practices (Business Times)

Singapore was added to a watch list for exchange rate and macroeconomic policies by the United States, which said the city-state made estimated net foreign exchange purchases of at least US$17 billion in 2018, equivalent to 4.6 per cent of gross domestic product.

China gears up to weaponise rare earths in trade war (Business Times)

Beijing is gearing up to use its dominance of rare earths as a counter in its trade battle with Washington, according to a salvo of media reports in China that included hints from the state planning agency.

The US shouldn’t underestimate China’s ability to fight the trade war, the People’s Daily, a flagship newspaper of the ruling Communist Party, said in a commentary on Wednesday. It isn’t hard to answer the question whether China will use rare earths as a weapon as retaliation in the trade war, the paper said.

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