10k Words | May 2023
Apparently, Confucius did not say “One Picture is Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in ads on the sides of streetcars...
Miserable IPO returns have been the story even though Kenvue got away with a 22% stag on day one of its US listing last week; a gap has opened between small and large stocks with the “jaws” notable in both price movements and valaution comparisons; in that context it is interesting to see how smaller stocks have outperformed historically coming out of market drawdowns; in Australia the industry survey looks negative but S&P/ASX EPS revisions haven’t really been notable; insolvency is on the rise as is US consumer credit card debt; and finally for whoever is advising the state fo Victoria, credit ratings do matter.
Distribution of returns from US IPOs by issue date (2023 to date)
Source: Equitable Investors, StockAnalysis
Distribution of returns from ASX IPOs by issue date
Source: Equitable Investors
ASX small caps (SSO - orange) v large caps (STW - blue)
Source: Equitable Investors, TIKR
US micro caps (IWC - orange) v large caps (IVV - blue)
Source: Equitable Investors, TIKR
Past 20 Years World Small Cap P/E Ratios
Source: Pzena
Nasdaq 100 Price/Sales Ratio
Source: Charles Schwab & Co.
US small caps v large caps during & after the “dot-com bubble”
Source: abrdn
US small caps v large caps during & after the GFC
Source: abrdn
S&P/ASX small v large during & after the “dot-com bubble”
Source: Equitable Investors, Iress
S&P/ASX small v large during & after the GFC
Source: Equitable Investors, Iress
AIG Industry Index
Source: IFM, AIG
Consensus EPS expectations for S&P/ASX 200
Source: Cannacord
Large bankruptcies ($US50m+ liabilities) - Jan-Apr count for 2023
Source: Bloomberg, @jsblokland
Australian companies entering external administration for the first time (FY23 = black line)
Source: ABS
US Consumer Loans (Credit Cards & Other Revolving Plans, All Commercial Banks)
Source: @glightfinancial, FRED
Government Bond Yields and their S&P credit ratings
Source: Equitable Investors,
worldgovernmentbonds.com