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Esports vs. pro sports: Jeremy Lin is betting on both

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07 November 2018

 

 

Video commentary for October 6th 2018

 

 

Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area.

Some of the topics covered include: Wall Street at an important area of potential resisitance, Dollar eases, gold quiet, oil falls further to test the $70 area, Rand firms, Brazil steady, 

 

 

A War Beyond Trade

Thanks to a subscriber for this report from Deutsche Bank which may be of interest. Here is a section:

 

 

Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area. 

The value of any contract is heavily dependent on the values of the counterparties signing it and the authority of an agreed party to enforce the terms. When the signees are countries then enforcement and the legal wrangling around differing interpretations of what is entailed can take years and, even then, if one party decides not to accept a ruling there is not much that can be done. The USA’s bipartisan institutional realization that China is a not a reliable contract counterparty now represents a significant obstacle to more than a cursory trade agreement being negotiated.

 

 

Esports vs. pro sports: Jeremy Lin is betting on both

This article by Jeremy Lin for Quartz may be of interest to subscribers. Here is a section:

The barrier to entry for esports is also so much lower than pro sports. You don’t need to wait for open-hours at your YMCA gym and hope that enough people show up and pay their membership to shoot some hoops. You don’t need another nine people in the same place at the same time with the same skillset—you don’t even have to wait until the sun’s up at the local park or stop playing when it goes down.

Esports is therefore democratizing entertainment. It’s free, and all you need is a good internet connection to play. Mobile gaming was a game changer for this accessibility: You don’t need an expensive console to play anymore, and some of the best games are literally in your hand.

Because of its truly global nature, you’re also being exposed to people who come from different cultures and countries and religions than your neighborhood ball court. It gets you out of your bubble. The tournaments bring people from all over the world together—professional sports only do that during the Olympics or events like the World Cup. Teams are often made up of players from all around the world who have to learn how to work together and get along; there were 24 countries represented at The Dota 2 International last year.

 

Eoin Treacy's view

Gaming companies control the games and therefore own the intellectual property on which eSports are based on. They have the scope to control the evolution of the esports sector in a way that was never open to conventional sports. That represents two important revenue vectors. The first is that the shelf-life of games is extended. Historically games have been discounted within about 12 months of release and once a player gets about 40 hours of game time they set the title aside. However, with an eSport constantly boosting visibility the legacy game has the potential to continue to attract new players well after its release date.

 

 

No More Junk in the Trunk

This note from Riverfront Investment Group may be of interest to subscribers. Here is a section:

As the high yield market has continued to strengthen, credit spreads have tightened to 381 basis points, which is near a 10-year low (credit spreads measure the extra amount of income required to compensate investors for default risk and are a common gauge for the overall health of the economy).

There are two ways to look at the current level of credit spreads. The first is an optimistic view which would suggests the bond market is not signaling any stress in the economy. Historically, tight credit spreads (smaller premium for default risk) have reflected economy strength and a reassurance that a recession in the near-term was unlikely. In previous recessions, credit spreads have widened prior to equities falling and have therefore been an informative leading indicator for the economy.

On the other hand, it’s easy to see why some investors have a more pessimistic view regarding tight credit spreads. Without lower coupon payments, there is a smaller margin of safety for default risk. In other words, investors aren’t protected as much in the event of a recession. Furthermore, with credit spreads near a 10-year low, it might seem like there is only one way for them to go, which is higher!

 

Eoin Treacy's view

US high yields spreads have been inert for 18 months but in that time Treasury yields have risen quite considerably. What that tells us is the yield on junk bonds is also rising and the coupon demanded to attract investor interest is also higher.

 

 

Oil Heads For 8-Month Low as Specter of Global Shortage Fades

This article by Samuel Robinson for Bloomberg may be of interest to subscribers. Here is a section:

“Oil prices don’t have any real reason to rally significantly,” said Phil Streible, senior market strategist at R.J. O’Brien & Associates LLC in Chicago.

Crude has tumbled about 20 percent since touching a four-year high last month as bearish supply signals around the globe crowded out concerns about disrupted exports from Iran and Venezuela. The waivers announced this week by U.S. Secretary of State Mike Pompeo apply to China, India and six other nations.

“The U.S. has for now given a lifeline to Iran,” said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. “The end result of the sanctions is softer than expected. The final outcome of the sanctions also confirms the political fear of high gasoline prices.”

 

 

Eoin Treacy's view

By issuing exemptions to tariffs to China and India, Iran can now import equipment and material from those countries to try and boost production. That essentially hands the Iranian oil market over the Asia and pretty much re-establishes the status quo that existed before the liberalisation agreement was put in place.

 

 

Long-term themes review October 29th 2018

 

 

Eoin Treacy's view

FullerTreacyMoney has a very varied group of people as subscribers. Some of you like to receive our views in written form, while others prefer the first-person experience of listening to the audio or watching daily videos.

The Big Picture Long-Term video, posted every Friday, is aimed squarely at anyone who does not have the time to read the daily commentary but wishes to gain some perspective on what we think the long-term outlook holds. However, I think it is also important to have a clear written record for where we lie in terms of the long-term themes we have identified, particularly as short-term market machinations influence perceptions.

Let me first set up the background; I believe we are in a secular bull market that will not peak for at least another decade and potentially twice that. However, it also worth considering that secular bull markets are occasionally punctuated by recessions and medium-term corrections which generally represent buying opportunities.

2018 has represented a loss of uptrend consistency for the S&P500 following a particularly impressive and persistent advance in 2016 and 2017. Many people are therefore asking whether this is a medium-term correction or a top. There is perhaps no more important question so let’s just focus on that for the moment.

 

 

The 49th year of The Chart Seminar

 

 

Eoin Treacy's view

The next Chart Seminar will be held on 12 and 13 November 2018 at The Army and Navy Club in London.

If you have an interest in attending an online Chart Seminar please contact Sarah and we will arrange times based on the time zones of those who wish to attend.

I am also in initial discussions with a potential partner about organising a New York Seminar.

If you would like to attend or have a suggestion for another venue please feel to reach out to Sarah at [email protected].  

The full rate for The Chart Seminar is £1799 + VAT. (Please note US, Australian and Asian delegates, as non EU residents are not liable for VAT). Subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.

 

 

 

 

 

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