Markets Reverie

With reelections in the UK coming up and moderately high inflation still being hard to combat over the world, it’s a good a time as any to do a deep-dive and evaluate the British economy and stock market. Brexit has had undeniable effect on the UK economy as well, Goldman Sachs says that "the UK has significantly underperformed other advanced economies since the 2016 Brexit referendum, with lower growth and higher inflation". Their analysis shows that the British economy is 5% smaller than it would have been had it remained in Europe. Moreover, UK debt spending has been increasing at a concerning rate year over year. The IMF listed the UK in its Fiscal Monitor publication last week as one of four large economies that “critically need to take policy action to address fundamental imbalances between spending and revenues”. They project UK debt to hit 98 % of GDP by the end of the decade - which would still leave the country below the US, Italy and France,...

I’ve noticed a recent phenomenon with many apps I use these days. The slow but gradual erosion of value as I see Ubers get more expensive, meals on DoorDash get more costly and arriving slower and more remarkably streaming services like Amazon Prime taking on ads to a subscription that used to previously not serve them for the excellent price of $14.99. Before I dwell further into why I think these things are happening and why we are continuously losing out as customers, it is pertinent to start at the beginning of a tech companies’ life-cycle and observe how the grow and then dominate their field. Blitzscaling is an old-school startup strategy of burning as much cash as quickly as possible with the help of dedicated Venture Capitalists in order to gain significant market share in their industry. We can see examples of this in companies like Uber, Airbnb and DoorDash. In order to gain increasing market, share these services have to be good value propositions for customers so they can...