Comment of the Day
23rd February 2023
Eoin Treacy
Video commentary for February 23rd 2023
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: AI stocks continue rebound but tech breadth narrowing, oil in a tight range, copper pulls back sharply, natural gas extends rebound.
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Email of the day on climate change and whether it is already too late
Am not sure how familiar you are with work of eminent Climate scientist James Lovelock FRS . Ten years ago he predicted it was already too late to avoid collapse in human civilization. I thought it might be of interest to you Youtube James Lovelock, end of civilization.
Eoin Treacy's view
Thank you for this email and I believe this video is what you are referring to. It makes for sobering viewing. The primary point is when a system experiences aberrations a positive feedback loop begins which exaggerates future movements.
Geoffrey West’s book Scale makes much the same point. His point is the heat build-up in a closed system is finite and will ultimately result in a significant upset. Both could be considered paradigm shifts in that it would be a virtually instant change in the environment. That is also implied in the desire to contain temperature rises to 1.5%. The assumption is a warming beyond that level would be catastrophic.
I am very much of the view that trying to completely reorient the entire global economy in new and exciting ways in an unproven manner is very risky and not guaranteed to provides the solution desired.
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Salad Shortages on UK Shelves Spark Brexit Blame Game
This article from Bloomberg may be of interest. Here is a section:
The shortages have led Tesco, Aldi and Asda to limit purchases to three units per person in the UK while Morrisons has introduced a cap of two. Asda has gone the furthest with restrictions across tomatoes, peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries.
The UK’s Department for Environment, Food and Rural Affairs has insisted the country has a “highly resilient food supply chain” and that other countries are experiencing similar disruption.
British shoppers have shared images of empty shelves on Twitter while on the continent consumers in France, Netherlands, Spain, Italy and Bulgaria are showing photos and video tours of supermarkets with plentiful supply. On Thursday morning #BrexitFoodShortages was trending on Twitter.
However, Irish stores also have a shortage of some fruit and vegetables stemming from Spain and north Africa and retailers are looking at alternative sources of supply.
In Denmark, the second-largest supermarket chain Coop is short of cucumbers, tomatoes, lettuce, bell peppers and aubergines due to lower deliveries from Spain, though the grocer hasn’t started rationing. Another chain in Denmark, REMA 1000, has similar shortages and expects the issues to persist for several weeks.
There have been reports of higher prices due to supply constraints in the Netherlands, but Binard from Freshfel Europe insisted “there are not really any significant shortages” in the country, nor in France, Germany, Italy or Spain. “There may be a little bit less volume at a higher price,” he said. “But nothing is missing.”
In Sweden, supermarket ICA Gruppen is finding it challenging to get full volumes of fruit and vegetables but the situation is manageable, said Jonas Andersson, head of fruit and vegetables at ICA Sverige.
In the UK, it’s the second instance of widespread rationing in the space of four months. In November almost every major supermarket capped purchases of eggs after the higher cost of chicken feed and an outbreak of bird flu led to a dearth of supply.
Eoin Treacy's view
There are obvious efforts to lay blame when consumers cannot buy the products they are accustomed to having access to. However, the fact many of these plants are grown in greenhouses. In colder countries those greenhouses need heating and we have just been through one of the most uncertain winters in history from an energy availability and cost perspective. As natural gas becomes truly globally fungible, that will be less of an issue in future.
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AI Mania Propels Nvidia Value by Nearly $220 Billion This Year
Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications, leading analysts and investors to believe that the company will benefit as more people use ChatGPT-like applications.
“When you have ‘the next big thing’ in tech, it’s natural for investors to scramble to find ways to play the theme,” said Russ Mould, investment director at AJ Bell. “Nvidia’s involvement in the AI space now puts it directly under the spotlight, which means there could be strong demand for the shares.”
The expectation is driven by the hope that chatbot operators will need more computing power as they respond to the millions of queries received across the web, from deadline-driven students to struggling songwriters.
Eoin Treacy's view
The buzz around artificial intelligence continues to heat up. I had a chat a couple of evenings ago with a friend who is looking at hiring a pool of analysts. He was clear in his view that much of what he was reading from examples could just as easily have been written by AI. The value of repeating something someone can find on Google is declining while the value of second order thinking and reaching novel conclusions is more valuable as a result.
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Eoin's personal portfolio: commodity long initiated and stock option long initiated February 14th 2023
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.