Amazon's former CEO, Jeff Bezos, sold $8.5 billion worth of the company's stock the past few weeks. Amazon, a $1.8 trillion company, trades about as much in a single day. And the market hardly blinked.
This is the best part about public markets - instant liquidity and a single price for everyone.
However, liquidity is not uniformly distributed.
This week, we follow up on our previous posts on this subject (Liquidity, Liquidity is Oxygen) with a discussion around circuit limits. If a group of stocks spend most of their time out of the market because they either hit the upper or lower price circuits, then you cannot treat them the same way you treat those that trade well: Market-cap Deciles and Circuit Limits
While we have been running a trend-following strategy using a micro-cap index fund, the price of liquidity is always on our mind. And if you are active in that space, you should think through it as well.
Markets this Week
NVDA is A.I…. A.I. is NVDA
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
Taxing Top Wealth: Migration Responses and their Aggregate Economic Implications (NBER)
Trickle-down effects of tax-induced migration by the wealthy do exist, but that they are quantitatively small.
The Essential Role of Altruism in Medical Decision Making (NBER)
We find that more profit-motivated providers report higher rates of false-positive malaria test results than do more altruistic providers. Specifically, purely profit motivated providers report 30 percentage points more positives than providers who are altruistically motivated, and providers likely knew that the positive results that they reported to their patients were false. We also find that more profit motivated providers sold more unnecessary antimalarial drugs than did more altruistic providers.
Personality Changes Associated with Organ Transplants (mdpi)
89% of all transplant recipients reported personality changes after undergoing transplant surgery. Many different types of personality changes have been described following organ transplantation. These include changes in preferences for food, music, art, sex, recreation, and career, the experience of new memories, feelings of euphoria, enhanced social and sexual adaptation, improved cognitive abilities, and spiritual or religious episodes.
Investing & Economy
Will lab-grown beef raise the price of handbags? (economicforces)
Can Trade Intervention Lead to Freer Trade? (carnegieendowment)
All of the windmills currently installed will need to be replaced before our net zero target date of 2050.
Solar Panel Waste is Becoming a Big Problem (oilprice)
Plastic producers have known for more than 30 years that recycling is not an economically or technically feasible plastic waste management solution. That has not stopped them from promoting it. (theguardian)
India
High real rate impeding India's growth goals (reuters)
The World Bank and other global institutions have issued $1.4 billion worth of offshore rupee-denominated bonds so far this year to meet strong demand spurred by India's inclusion in JP Morgan's widely tracked emerging market debt index (yahoo)
Ideology and identity politics were more important factors explaining the rising popularity of the BJP. (NBER)
Private benefits are effective in generating votes, but public goods are not. (NBER)
Thanks to India’s high inflation rates, low real returns from debt and rising longevity, you can forget about retirement. (thehindubusinessline)
RoW
Americans believe the rich and powerful have designed the economy to benefit themselves and have left others with too little or with nothing at all. (nytimes)
China’s 1 trillion yuan EV, solar and battery exports face overcapacity concerns as US, EU anxieties grow (scmp)
China urgently needs to issue ‘most effective’ cash coupons to boost insufficient consumption (scmp)
China tightens grip on stocks with net sale ban at open, close (livemint)