September 21, 2015
What we’re reading this week
Volkswagen admitted to cheating on emission testing for ”years” after the International Council on Clean Transportation discovered issues with Jetta and Passat. Following the controversy, Dean Wormer put the cars on double secret probation.
Brave New Bond Market
The Wall Street Journal writes: The New Bond Market: Bigger, Riskier and More Fragile Than Ever. I’ll say this, it’s not your father’s bond market. Etf’s and mutual funds now own 17% of all corporate debt, up from 9% in 2008. Rates are low, global debt is high (ish), and the Fed is under scrutiny. All in all, there are not many fixed income options for investors right now.
Bloomberg’s Matt Levine points out that millennials “seem really determined to un-learn all of the financial lessons that previous generations have absorbed through hard experience.” This article proves that point as well as anything I suppose.
Amazon vs. Google
Bill Gurley thinks Google should be afraid of Amazon because of his “reversal of funnel” theory. More than 50 years ago Peter Drucker wrote, “The customer rarely buys what the company thinks it sells him. One reason for this is, of course, that nobody pays for a ‘product.’ What is paid for is satisfaction.” Or as Ted Levitt said, “People don’t want quarter-inch drills—they want quarter-inch holes.” Amazon and it’s Prime offering are quickly becoming the hole of choice.
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