Here we analyze a selection of third-party news articles—both those we agree and disagree with.
Please note: Though we make every effort to source articles from freely available sites, we will also regularly include articles on sites that have limited content for non-subscribers. Doing so is increasingly unavoidable, as more and more financial media is published behind paywalls.
MarketMinder’s View: Sigh. Look, we are all in favor of people in rural areas and other underserved folks having greater access to banking services, but postal banking is not the answer, and as this article outlines, USPS’s new financial services could very well be the start of the slide down that slippery slope. Several politicians intend them to be (which reminds us, we are politically agnostic and don’t favor any politician or political party). Where tried, postal banking has mostly ended up mushrooming into a state-owned banking behemoth that made the financial system uncompetitive. The textbook case is Japan, where Japan Post enticed customers with artificially high interest rates, plowed all of those savings into government bonds, and essentially became the central government’s main financing arm, creating a negative feedback loop of anemic growth (thanks to the flat yield curve) and more feckless fiscal “stimulus.” Privatizing the institution and redrawing the line between postal services and banking was one of the most important reform initiatives of the last 20 years. Wise people learn from others’ mistakes, and in our view, letting postal banking take off in the US likely raises some long-term structural risks. It could also create winners and losers, the latter likely being smaller, community banks. Obviously, this is light years from a reason to be bearish, given the small scope of the current project. But we think it is worth noting now, given the history here.
MarketMinder’s View: The Fed, Treasury and White House have been circling over stablecoins for some time, and it looks like regulations are forthcoming—illustrating one of the major risks surrounding cryptocurrencies. Stablecoins are digital currencies that trade on online exchanges, just like bitcoin. But unlike bitcoin, they are backed by a basket of securities to keep their value stable relative to the dollar. Theoretically, this makes them more currency-like and liquid, but for now, their primary use is as an intermediary for trading more volatile cryptocurrencies. Like bitcoin, they are unregulated, and there are no protections for their owners against fraud, theft and institutional failure. “Current and former regulators worry that stablecoins could be vulnerable to the equivalent of a bank run if large numbers of investors suddenly rush to redeem them, forcing sponsors to sell the assets at fire-sale prices and potentially putting stress on capital markets, as well.” This piece details some of the ways regulators might step in, and treating stablecoins like banks seems to be gaining the most traction. We guess that is one idea, although stablecoins seem more like money market funds or pegged foreign currencies to us, so it will be interesting to see what rules actually emerge. Notwithstanding those philosophical aspects, one of the main reasons people liked stablecoins and cryptocurrencies was the lack of government involvement. In our view, that was always likely to sunset, for the simple reason that governments tend not to like competition to their own currency. China’s crypto crackdown coincided with its development of a digital yuan. Central banks in the developed world are also pursuing digital currencies, and the likelihood they allow a wild west of competition seems low. So if you haven’t factored regulatory risk into your crypto thought process, we suggest doing so now.
MarketMinder’s View: The eurozone inflation rate’s acceleration to 3.4% y/y isn’t pleasant news for households and businesses there, as rising costs pinch hard. Energy prices, which rose 17.4% y/y, were unsurprisingly the primary contributor. Much of this commentary centers on the ECB and its large quantitative easing (QE) program, with analysts speculating on when and if faster inflation will accelerate the program’s end—implying that could help tame prices. Setting aside our traditional views on QE, which we think is deflationary anti-stimulus, the notion of central banks addressing inflation with monetary policy now seems like a large stretch. Yes, inflation is a monetary phenomenon—too much money chasing too few goods. Inflation right now isn’t coming from the “too much money” part, but from the “too few goods.” The ECB, like other central banks, can’t magically increase the supply of semiconductors and other intermediate parts that are in short supply. It can’t supply natural gas, drill for oil, make wind turbines spin or wave more nuclear plants into existence. Nor can it supply container ships and fix all the traffic jams at ports globally. Supply issues just have to work themselves out—which is likely coming before long, because the high prices are a signal to producers to fix them. It just takes time, which may keep inflation high a tad longer than it otherwise might have been, but not high enough for long enough to prove problematic for the economy and stocks, in our view.
MarketMinder’s View: This detailed look at Japanese Prime Minister-in-Waiting Fumio Kishida’s new leadership team is all about political personalities, and as we often remind readers, markets care about policies, not personalities—that is why we are politically agnostic and don’t prefer any party or politician. But we highlight this piece anyway because it also illustrates the power dynamics within the ruling Liberal Democratic Party (LDP), which we think goes a long way toward showing why deep economic reforms are unlikely under this administration even if the LDP and its coalition partner renew their supermajority in this autumn’s general election. The LDP has seven factions, and these are more organized and uniform than your typical intraparty caucus. They have their own financial resources, membership perks and policy platforms. Kishida is from the Kochikai faction, which is the fifth-largest and not known for championing reforms. Most members come from Japan’s upper crust—long a beneficiary of the status quo—likely building in some opposition to change. The two largest factions, which former Prime Ministers Junichiro Koizumi, Shinzo Abe and Taro Aso hailed from, are the main champions of reforms and generally favor lower taxation and greater private sector involvement. Their backing is key, which is reflected in Kishida’s LDP leadership picks, as the article details. But other factions are wary of giving them too much influence over policy. “Kishida has repeatedly said his strength is carefully listening to people. However, if he listens too much to the wishes of the party’s heavyweights, it might be difficult for him to project his own style as prime minister. ‘If the presence of Abe and Aso becomes too strong, Kishida’s colors will fade,’ a veteran member of the Kishida faction said.” That is an incentive against pushing reforms they championed. So is the lingering rivalry between Kishida and his chief competition in the LDP presidential race, Taro Kono, who was previously the cabinet minister for reform. So, in short, this looks to us like a lot of intraparty gridlock, probably extending the status quo for Japanese stocks.
MarketMinder’s View: Oh boy. This piece claims the most meaningful market-based measure of default risk is the short end of the yield curve, where—if markets perceive high risk—“the T-bill curve will ‘kink’ around the [debt ceiling] drop-dead date, with investors demanding a greater premium to own obligations that could be in jeopardy if lawmakers can’t get their act together.” That indicator fired during 2017’s debt ceiling showdown but isn’t doing so now. Rather than celebrating the market’s clarity, this piece argues Fed policy is holding rates down artificially, suppressing the signals that might otherwise ping, and default risk is therefore higher than the market suggests. That, in our view, is a textbook case in overthinking and rhetorical gymnastics, not least because there is no logical scenario in which the US actually defaults on debt payments even if Congress doesn’t lift or suspend the ceiling by the drop-dead date. The 14th Amendment states, “The validity of the public debt of the United States … shall not be questioned.” A 1935 Supreme Court ruling stated this requires the Treasury to put debt service before all other obligations. A GAO memo from the 1980s stated the Treasury can prioritize payments rather than paying bills as they come in, and former Treasury Secretary Jack Lew stated in a 2014 letter that prioritizing debt payments above other “obligations” was doable. It is also financially feasible, considering monthly revenue exceeds monthly interest expenses, according to the Treasury’s reports. As for principal repayment, being at the debt ceiling doesn’t prevent the Treasury from issuing new bonds to replace maturing ones. So, in our view, all of the political theatrics and possible endgames discussed in the article’s second half are largely a sideshow for markets. (Also, they aren’t even accurate, as reconciliation rules separate the debt ceiling from spending, so a standalone debt ceiling reconciliation bill wouldn’t prevent a spending bill later.)
MarketMinder’s View: Throughout the year we have seen pundits warn rising prices, supply shortages and slowing economic growth risked a return of the “stagflation” of the 1970s—a period that elicits memories of long gas station lines and high unemployment both in the US and across the pond. However, a few high-level similarities between now and nearly 50 years ago don’t mean the past is about to repeat. This article shares several key differences as it pertains to the UK. “Inflation above 4pc may hurt households but it by no means compares with the double-digit rise in the cost of living that characterised that decade. The economy is also expected to continue its post-Covid bounce, albeit at a slower pace, rather than suffering outright decline. Meanwhile, the debate on interest rates focuses on if the Bank of England will raise the base rate from 0.1pc to 0.25pc in February or a few months later. By contrast, the rate surged from 7.5pc to 13pc between June and November 1973. House prices were also rising at an annual rate of 50pc in January of that year.” Now, we don’t dismiss UK and European consumers’ pain due to soaring energy costs or businesses’ supply bottleneck-related struggles. Even if the headwinds are likely temporary, they are real. But we think it is critical to base investment decisions on what is probable, not speculation, and diving into history—rather than gleaning surface-level comparisons—can provide some calming perspective.
MarketMinder’s View: Volatility returned in a big way in September, and this piece both recaps the action and attempts to project what the rest of the year will hold. As noted here, though US stocks remain positive on the year, September wasn’t pretty. “All told, the S&P 500 is still up 16% for the year and on course to notch a sixth straight quarter of gains. The index is just a few percentage points away from its record close hit in early September. But the stock market is also poised to close out its worst month in a year. All but one of the S&P 500’s 11 sectors are down for the month of September.” Some of the experts cited here attributed the month’s turbulence to a host of issues—including COVID, the debt ceiling, slowing economic growth, supply shortages, inflation and uncertainty about monetary policy—and conclude the rest of the year will be a grind for stocks. In our view, these stories are false fears. Markets have likely moved beyond today’s COVID variant disruptions. The debt ceiling is political theater. Stocks can do great in a slow-growth environment. Supply shortages are a headwind—but likely a passing one. Inflation is elevated but appears unlikely to stay that way for a significant length of time. Monetary policy’s impact on stocks is overrated. That these false fears still elicit, well, fear implies sentiment isn’t close to euphoria right now—which suggests the bull market still has plenty of wall of worry to climb. This may sound counterintuitive, but the persistence of these stories may end up prolonging the bull market. September has also reminded investors of long-term investing’s challenges: Uncomfortable volatility can arise for any or no reason. When it does, staying cool-headed and refraining from emotional decision-making is wisest, in our view. For more, see our 9/28/2021 commentary, “Energy Prices, Interest Rates and Volatility: Our Thoughts on a Rocky Tuesday."
MarketMinder’s View: Japanese politics garnered most September headlines, but the latest data provide a snapshot of the issues weighing on the world’s third-largest economy recently. August industrial production fell -3.2% m/m—due primarily to supply chain disruptions in Asia hitting auto production—while retail sales dropped -4.1% m/m, its first monthly decline since April, dragged down by consumer electronics and clothing. Now, global factors like supply shortages and COVID restrictions are weighing on data worldwide, so these weak August numbers aren’t necessarily unique to Japan. Yet we do think it is worth considering future growth prospects as supply chain issues improve and COVID restrictions ease. In our view, developed economies will likely return to their pre-pandemic trends—and in Japan’s case, that means export-driven growth coupled with tepid domestic demand. Favoring globally focused multinational firms continues to be the most sensible way to approach Japan for investors, in our view.
MarketMinder’s View: Here is a brief story of a UK financial fraud victim that illustrates how easy it is for anyone to fall prey to bad actors. As the article recounts, a fraudster used personal details that only a bank would seemingly know to win the victim’s trust—and then tricked her to send over money. Fortunately, this person got a refund, but not everyone who gets swindled is so lucky. The back half of this piece discusses the challenges in protecting sensitive information: Not all banks have robust security systems or procedures, and fraudsters are often a step ahead of regulators. However, this doesn’t mean innocent folks are powerless, and basic common sense can go a long way. For example, unsolicited and/or unexpected communication demanding immediate action (e.g., asking for money or sensitive information) should set off alarm bells—and we suggest refraining from acting, even if the source appears legitimate. Instead, contact the institution through its official channels to confirm whether the communication is genuine or not. These small extra steps can help save some serious headaches later, in our view. For more tips, see our recent commentary, “Ponzi Schemes, Identity Thieves and NFT Fraud, Oh My!”
MarketMinder’s View: Please note MarketMinder is politically agnostic, favoring no party nor any politician. Our analysis serves only to assess political developments’ potential market impact, if any. Not to get lost in September’s flurry of developed market election shuffles (Canada, Germany, Japan), Norway’s September 13 vote resulted in center-left Labour, the centrist Centre Party and the left-wing Socialist Left Party winning enough seats to form a parliamentary majority if they could agree on a coalition government, displacing the ruling center-right coalition. Despite the winners’ general center-left alignment ideologically, disagreement over policy details kept the Socialists from joining a government under Labour leader Jonas Gahr Stoere, torpedoing his hopes to head a majority government. “Labour now faces the option of ruling alone or jointly with the Centre Party, but Stoere declined to say which option he preferred. In either case, the new government will be forced to negotiate in parliament on any proposals it presents, including on fiscal spending.” The article also notes, “Minority governments are common in Norway, however, and incumbent Prime Minister Erna Solberg of the Conservatives has ruled in a minority for most of her eight years in power.” As Norway’s government takes further shape, gridlock looks increasingly likely, leaving the status quo largely intact. Notably, for Norway’s outsized Energy sector, both Labour and Centre back the country’s oil and gas industries’ continued drilling—just like the Conservative Party before them. Political risk for markets appears low to us here.
MarketMinder’s View: Per usual, MarketMinder is nonpartisan and doesn’t prefer any party, politician or policy. We seek simply to assess political events’ potential effects—or lack thereof—on markets and the economy. Many articles like this one note several items on Democrats’ agenda—government funding, the debt ceiling, a bipartisan infrastructure bill and their much larger social spending package—are coming to a head all at once. While these may be make or break for advancing Democratic initiatives, that isn’t the case for stocks. First up: “Congress, which Democrats control by a razor-thin margin, is due to vote on a bipartisan resolution to fund federal operations through early December before funding expires at midnight on Thursday. The House of Representatives is currently expected to vote Thursday on a $1 trillion infrastructure bill already passed by the Senate, a vote that has been delayed once.” Whether Congress averts a government shutdown or not this week, previous ones have never caused a recession or bear market (typically a lasting, fundamentally driven decline exceeding -20%), including 2018 – 2019’s longest-ever 35-day closure. Then, as we wrote Monday, even if the Treasury’s extraordinary measures run out in October and it can’t pay all the bills without raising the debt ceiling, the US’s actual default risk is next to nil. Incoming tax revenue easily covers interest payments, which the Supreme Court has ruled the Treasury is constitutionally mandated to prioritize above all else. As for legislative proposals in the hopper, you may fear or cheer their passage or blockage, but markets likely shouldn’t mind either way. One, spending scheduled to drip out over a decade is easily—and often—changed by a future Congress. Two, in the public glare, they aren’t taking markets by surprise—and surprise is what moves markets most. For investors, all the fretting over supposed crunch time for legislative action suggests sentiment underrates a sunnier reality—a likely boost for stocks as political uncertainty fades.
MarketMinder’s View: As always, MarketMinder doesn’t make individual security recommendations. Companies this article mentions are purely for illustrative purposes, as we wish to highlight a broader theme: Rising bond yields aren’t bad for Tech and Tech-like stocks. As this piece asserts, growthy Tech companies may be going out of favor: “Low yields make many investors willing to pay more for shares of large tech companies that they expect to churn out outsize profits in the future. Yields tend to rise when investors feel better about the economy, so their advance tends to boost shares of companies that earn more money and increase shareholder returns during periods of global growth. So-called cyclical stocks are also cheaper.” There are several problems with this view, though. First, comparable history contradicts the premise. The article attributes Treasury yields’ titular surge to the prospect of the Fed pulling back its quantitative easing bond purchases (aka tapering). However, go back to when the Fed first discussed a taper in May 2013. Per the US Treasury, 10-year Treasury rates rose from a 1.66% low on May 1 to 3.04% by year-end. According to FactSet, the S&P 500 gained 18.5% during that stretch. But its Tech sector? 22.7%, outperforming more cyclical and value-oriented sectors like Energy and Financials. That doesn’t mean history will repeat, but rising yields don’t always weigh on Tech disproportionately. Second, and more generally, valuations have little bearing on stocks’ returns. So-called cheaper (value) stocks can become even cheaper no matter what bond yields do. Then too, growth stocks can move higher—and often do—as bull markets mature. Third, we doubt a sustained rise in bond yields is likely. Inflation, bond yields’ main driver, is moderating. Supply chain issues may cause temporary price spikes, but those don’t appear to be lasting, especially as producers find workarounds. Last, but not least, bond yields aren’t stocks’ primary driver. They may influence sector earnings (e.g., Financials’), but bond and stock markets incorporate the same widely available information in real time. Saying yield movements influence stocks implies past prices predict—they don’t, in our view.
MarketMinder’s View: Are you willing to stand against the bull market? This article explores what it takes to be successful. To start, history shows markets rise more than they fall—so investing with the expectation of a decline (i.e., “shorting” the market) is more likely to be wrong than right. “There’s a good chance the market will be higher in the future because the US economy should continue to expand, and American companies should continue to pay dividends and increase earnings. ... Second, long investors have more to gain than lose. There’s no ceiling on how high the market can climb, whereas investors can only lose what they invest — and even that overstates the downside because the market has never hit zero and has always recovered after a downturn.” Now, this may oversimplify long-term investing’s challenges—particularly the emotional struggles—but we think the high-level point is worth internalizing for investors, as trying to time when the market will fall can be treacherous. “While it’s safe to assume the market or any asset will take a dive occasionally, there’s no way to know when. The market can rise for years before pulling back meaningfully, as it did for more than a decade between the financial crisis and the COVID-19 meltdown last year. Every time the market ticks higher, the shorts lose money, and eventually they get wiped out. So timing is everything when it comes to shorting, a harrowing task given that there’s no reliable way to consistently time the market or the price movement of any asset. The shorts also have more to lose than gain because asset prices have a zero floor but no ceiling, so while the upside is capped, the downside is bottomless.” In our view, if you are positioning for a bear market that you have determined is already underway and likely to last for a significantly longer stretch—and your reasoning is grounded in careful, forward-looking fundamental analysis that runs deeper than what you see in the headlines—some short positions can play a beneficial role in a diversified defensive strategy. But using them as a timing tool or perpetual hedge, in our view, is likely a counterproductive move.
MarketMinder’s View: As a reminder, MarketMinder takes no political sides and has no preference among parties or politicians. We evaluate political matters only for how they might affect markets. In this case, it seems Canadian Prime Minister Justin Trudeau, who failed to secure a majority for his Liberal Party after calling a snap election, is now fielding a pretty milquetoast early agenda. Headline items include COVID measures, national childcare and a couple of climate and geopolitical matters—nothing particularly radical in terms of the drivers stocks care about most, in our view. “Now, [Trudeau’s] decision to leave [Finance Minister Chrystia] Freeland in charge at finance suggests the Liberals will press ahead with their plans to keep spending through Canada’s recovery from the Covid crisis. Trudeau’s last budget included C$140 billion ($110 billion) in additional measures over the next five years.” Although “Liberals made an additional C$78 billion in spending promises” during the campaign, making good on those pledges requires the support of opposition parties—far from a given. For investors, we think this shows minority governments’ inaction. They generally aren’t capable of sweeping change, which markets don’t mind.
MarketMinder’s View: Last year’s lockdowns and steep economic contraction put bank mergers into deep freeze, but they have thawed rapidly in 2021. “Banks have announced more than $54 billion in deals through late September, according to Dealogic. That puts industry mergers and acquisitions on pace for their biggest year since 2008, when some big banks had to sell themselves to stave off collapse. At this time last year, banks had announced just $17 billion in mergers.” The reason: Banks were extremely fearful last year of potential problems lurking in an acquisition’s loan book. Now animal spirits are returning, and they are motivating many deals. This would be very unusual to take place early in a bull market, so this is another way this cycle looks like a continuation of the last: “2019 was also a big year for bank mergers, but more of the major regionals are in play this year. So while there are fewer deals this year than at this point in 2019, the overall value is higher than it was two years ago.”
MarketMinder’s View: Remember the summer’s “Sausage War” between the EU and UK, in which the UK refused to implement the Brexit deal’s Northern Ireland protocol on select goods (chilled meats—hence the whole “Sausage War” moniker)? Well, the talks to resolve the UK’s complaints over delays and complexity in shipping goods across the Irish Sea are set to kick off in October. This article offers a bit of a preview, noting that, “The EU is planning to offer a set of proposals next month aimed at addressing British complaints about the Northern Ireland protocol, according to a person familiar with the planning, who added that the details would be presented first to the U.K. That is expected to trigger intensive talks that could last until December.” Let us break the news to you here: No matter how these talks go, they will not be the last trade-related disputes and discussions between the EU and UK. While Brexit is the proximate cause of this round, disputes-and-discussions over trade are just plain normal between sovereign nations.
MarketMinder’s View: Well, here is the latest on the debt ceiling, which features more inaccurate discussion of “default” as a looming threat. It cites Treasury Secretary Janet Yellen’s estimate that “extraordinary measures” used to stay under the debt ceiling temporarily will run out by October 18. Could be a little sooner, too, considering there is significant churn in the government’s daily tax receipts and spending. Regardless, though, this doesn’t mean the government “will run out of money,” which is too hyperbolic by half. What it means: The government could only pay expenses that are covered by tax receipts. The Supreme Court’s interpretation of the 14th Amendment’s Public Debt Clause requires the Treasury to pay bond interest first, and there should be ample tax revenue to do that. This means default—literally defined as failure to service the debt—is very unlikely, even if the debt ceiling doesn’t rise by October 18. It would likely require delaying some other payments, which the Treasury can prioritize. That isn’t great, but it is mostly just a different spin on a government shutdown, not something “catastrophic.” For more, see our 9/27/2021 commentary, “A Comprehensive Guide to the Debt Ceiling.”
MarketMinder’s View: Yesterday, both Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren announced their retirements after news broke that they actively traded their portfolios—including some agency mortgage real estate investment trusts (REITs)—as recently as 2020, while the Fed was engaged in supporting that market to an extent. Loads of people see this as a conflict of interest, and we don’t question that conclusion. But our interest here is a little different. Monetary policy in the US is set by the (typically 12-member) Federal Open Market Committee (FOMC). That consists of the Fed Chairman and 6 other Fed Governors, the New York Fed President and 4 of the 11 other regional Fed presidents (who rotate annually). As this piece touches on, these retirements open two regional presidencies (one a couple months early, one several years sooner than scheduled). Each Fed branch’s board of directors elects the president, adding an element of uncertainty about who will lead them next year. Boston is slated to get a vote on monetary policy next year. This comes on top of one currently open Fed Governor post, and another (Governor Richard Clarida’s) will open in January. President Joe Biden appoints nominees to those posts. Furthermore, there are many questions about whether Biden will reappoint Fed Chairman Jerome Powell, whose term as Fed head expires in January—and whether he will stay on as a governor if he isn’t reappointed head. The upshot: There could be many new faces on the FOMC next year—including the chair. So don’t take any FOMC officials’ hints about where they plan to take monetary policy for granted, as we really don’t even know who will be making that policy.
MarketMinder’s View: Pro tip: By the time niche indicators like the Manheim Used Vehicle Value Index steamroll their way into headlines, any usefulness they once might have had is gone. In this case, we think the whole effort was misguided from the start. When used car prices became big contributors to inflation this summer, Wall Street analysts jumped on the Manheim Index, which measures wholesale used car prices—on the thesis rises in these would bleed into consumer price increases a couple months later. Then, the thinking went, they could predict inflation changes in advance and, in turn, predict and position for Fed decisions. We see a few problems with this. One, used car prices’ impact was short-lived and mostly gone by August. Two, it is impossible to predict how the Fed will react to data, as it is a group of people with diverse opinions and biases. Three, Fed decisions don’t have a preset market impact. Now that there is so much attention here, there is a fourth reason: Widely watched indicators get priced in quickly. Whatever this index shows, market-set interest rates are therefore likely to already reflect it.
MarketMinder’s View: Was Theranos, the failed, privately held blood-test technology startup, a case of deliberate fraud or the general cycle of hype and failure that characterizes countless smaller defunct startups? That is the question at the heart of the ongoing trial of founder Elizabeth Holmes. We, of course, aren’t legal experts and don’t have an opinion one way or the other on that question. But this piece does offer some worthwhile insight for all investors, as it posits the verdict will rest partly with the jury’s opinion of whether Theranos’s investors were uninformed and misled or took calculated risks that simply didn’t pay off. Our earlier disclaimer applies to this question too, but the fact that it is asked raises a very simple point: Either way, these people lost vast sums of money, proving the big risks inherent in investing in unlisted companies, which don’t have the same disclosure requirements as publicly traded firms and which have more license to entice investors with rosy forecasts. This highlights a few investors who decided to back Theranos because of Holmes’s “conviction,” (meaning her zeal, not the potential outcome of the court case) which is a phenomenon we have seen again and again in Silicon Valley and the cult-like following around many founders. That, in our view, isn’t a great basis for any investment decision. If you are considering taking that level of risk, we think it is wisest for you to have a solid, evidence-based reason to believe the thesis will play out in the long run. That includes an understanding of the technology, its potential limitations, regulatory barriers and how the industry works in general. Doing such deep research, in our view, is the way to limit your risk of having to ask the headline question about yourself if your investment doesn’t work out.