Pandemic only unleashes inequality between the rich and the poor.

The United States was the lead of the world in financial asset growth last year thanks to tax cuts and a boom in the stock market, but the distribution of wealth was more unequal than any other country. 

According to the annual tally which Allianz, the German insurer which holds world stocks, bonds, cash and other assets, showed that poor countries are no longer able to follow the wealth of advanced countries. For the first time since 2000, the number of people considered middle class worldwide has declined when measured by their financial holdings. 

And the world's super rich are becoming more and more rich. The top 1% own 44% of their financial assets, and their shares are increasing. “The super rich do indeed seem to be moving further and further away from the rest of society,” the Allianz study said. 

The pandemic only exacerbates the gap between the poor and the poor. The decline in global trade will be the biggest obstacle to developing countries, and the poor suffer more from the burden on the health care system and public schools. 

Assets per capita in the United States increased by more than 13% in 2019 to $245,000. The United States was ahead of Switzerland and Singapore in per capita.

Source : NYT

https://www.nytimes.com/2020/09/23/business/united-states-is-the-richest-country-in-the-world-and-it-has-the-biggest-wealth-gap.html

Benjamin Graham, the father of value investor.

Benjamin Graham is considered as most successful investor of all time. Not only he had countless victories on the investment field but also was a father of so many successful investors like Warren Buffet, John Templeton, Irving Kahn and so on. The reason Benjamin Graham is regarded as historically greatest value investor can be found back in days in early 1900s when speculative trading environment was mainstream. Stock market was not kind of what we know now. During the days, investors were anxious of uncertainty since absence of internet provided insufficient information.

As Benjamin Graham was working in NHL, he had his heydays working on security analyst. He was not momentum or day-trader seeking for profit gains in short-term. His investment style is known as the “cigar-butt” which is the “approach that picks up discarded business cigar butts laying on the side of the road, selling them at deep discounts to book value with one good puff left in them.” Warren Buffett was influenced the way Benjamin Graham did in the past to find the firms that were barely out of attention from media.

By reading his book, I was inspired by several investment philosophy which lead present investors to direct themselves in the right path. I will list four principles Benjamin Graham emphasized.

Diversification

Portfolio divergence is the most important for not only for mom-and-pop investors but also the ones who regard themselves as gurus. Benjamin Graham has diversified his portfolio in many different areas. He mentioned finding companies which has significant ‘safety margin’ is the best way to make profit, however, it is not easy to discover such a stock. Some of firms which he regarded as underestimated compared to the present price were invested heavily and concentratively. However, for unknown situation, he invested in various companies to hedge the risk. He invested about 70 different companies to diversify his portfolio because if a company makes a loss, then others will cover it. (Warren Buffett was influenced by Benjamin Graham, though he did not select diversification investment method.)

Intrinsic Value (Cigar-Butts)

Sometimes inexperienced investors tend to follow the trend of stock market. If the market is in upward cycle, then they don’t try to miss out the chances. If opposite, then investors try to sell off their assets. That is what Mr. Market entices innocent investors to join the party. It can give them delusion as they are the successful investors when the market is irrational floated. However, it can lay investors into fury when they think they are deceived by Mr. Market. Sometimes the experts of analysts can allure them to lead market melt-up. Nevertheless, Benjamin Graham puts weight on intrinsic value. If an investor has a clear philosophy based on intrinsic value, there is no need to worry about in attributing his or her mistakes on personified object that does not exist at all. 

Amazon is dominating the retail industry. "Death By Amazon"

Amazon is expanding beyond online and offline to distribute its power through all areas. The company’s widespread expansion in the industry is giving a threat to the offline stores and small and medium-sized shopping malls into bankruptcy. The book “Death by Amazon” introduces “Amazon fear index”, which represents the stock indices of 54 publicly traded companies that are at risk from the Amazon’s business. 

This book explains specifically about how Amazon is increasing its field whether by itself or acquisition. To fight against Amazon’s monopoly, the book reveals the tactics of each company for its survival. Companies such as Walmart, Costco, Wayfair, Nike, Spehora, Warby Parker, Allbirds, Quip, Uniqlo, have mobilized their own strengths to compete against Amazon by their own advanced technology and differentiation strategy.

Internet of Things (IoT) or technology represented as 4th industrial revolution, such as big data, virtual reality, augmented reality, and so on are gradually permeating every aspect of our daily lives. Just only five years ago, many did not imagine a store where customers just need to take things out without any checkout, an artificial intelligence secretary who can request anything with a single word, and a delivery service for drones or unmanned self-driving robots. However, cutting-edge technologies that seemed like a distant future are now beginning to be naturally commercialized. The lead of industrial technology change is dominated by Amazon, the world's largest online e-commerce company. 

Amazon, which is considered as an omnivorous dinosaur, has destroyed the existing industrial ecosystem by making strides in every business from online bookstores to fashion, furniture, drones, robots, and cloud services. In the process, Amazon fears have gripped the market, with a series of offline giants collapsing, including large bookstore chain "Barns & Noble," the world's No. 1 toy company "Toys R Us," and 100 years of traditional department store "Sears." It has come as a huge threat to countless companies to the point. 

On the other hand, there are companies that are steadily increasing their sales by solidifying their territory in the strike of Amazon. From big offline retailers such as Costco, Walmart, Uniqlo, Tiffany to small and medium online shopping malls including Etsy, Wayfair, Casper, what are their strategies that have won the competition against Amazon? Commonly, they have avoided direct challenges against Amazon and tried to differentiate themselves by showing their strengths.

For example, fast fashion brand Uniqlo has launched a customer-centered service that combines cutting-edge technology based on the offline stores world-wide. Also, the world's largest handmade online store, Etsy has survived throughout the pressure of Amazon’s enlargement. Amazon's business strategy is mainly to buy products in large quantities from suppliers and offer them at low prices, which have not worked at all in the handmade market where diversity and uniqueness are important. Soon after, Amazon launched a competitive service called ‘Handmade at Amazon’ to take advantage of the market, nonetheless Etsy still remains the leading player. The book explains fully about the secrets of future strategies of each companies in response of Amazon’s strike. It also revealed Amazon's innermost agony behind its aggressive entry into the market. 

This book consists of a total of seven chapters. First and second chapters are about the steps which Amazon dominated online retail market. Then, Amazon Go was next Amazon’s step to stride in the offline markets: for instance, fashion and furniture industries, which were considered difficult to succeed in online. What's the real story behind Amazon's relentless move across the field? From chapter three to six, the book deals with the events of offline giants such as Walmart, Costco, and Apple. They are fiercely fighting with Amazon to defend their territory with strong brand strategies and smart, high-tech tools. Finally, Chapter 7 reveals the strategies and examples of companies in fighting with Amazon.

The author of the book, Shirota Makoto, is one of the top economist in Nomura Institute. He has been watching the moves of Amazon and the rest of online and offline retail commerce companies. It was clearly witnessed that Amazon was destroying the existing ecosystems. A lot of companies which did not prepare from their competitors later faced bankruptcy. On the other hand, some companies were able to handle themselves from the crisis of so called ‘Amazon Fear’. It is difficult to predict who will be the champion in retail area, however, in order to maintain in survival, overcoming Amazon’s dominance is one of the strategies that companies should bear in mind.

Sony is about to launch PlayStation 5....competing with Microsoft and Nintendo.

The new console competition between Microsoft (MS) and Sony has risen. The two companies began a scuffle for control of the huge console game market as they began pre-booking for new consoles. Microsoft and Sony will release their new consoles Xbox series X and PlayStation 5 on November 10 and 12. It is the first time in seven years that the two companies are releasing new consoles, PlayStation 4 and Xbox One.

The previous models, PlayStation 4 and Xbox One, saw their performance increase fall short of expectations. However, the newly introduced PlayStation 5 and Xbox series X are considered to have improved performance enough to enjoy smooth games even at 4K resolution.

In addition, Sony, which has adopted a strategy of attracting the attention of console users as a traditional way to strengthen its exclusive lineup.  Meanwhile Microsoft is putting strength on console rental service called Xbox All Access, along with subscription game service, GamePass. The competition between two companies are now heating for its market.

Normally, pre-booking serves as a barometer to determine the market's interest in the product before launch. This is also why all companies, regardless of sector, make great efforts to supply and demand pre-bookings, sales outlets and supplies.

Sony began pre-booking PlayStation 5 on the 18th for global primary retailers such as Korea, the U.S., Japan, and Europe. The game industry also commented that Sony, which was slightly behind Microsoft's schedule for price and pre-booking, has started to take the lead by making reservations faster than expected.

The pre-booking of PlayStation 5 was conducted in a hotter atmosphere than expected. In all countries where reservations have been made, supplies have run out while reservations have been made. As soon as pre-booking began in Korea, pre-bookings were sold out, and console users could see how much interest they had in PlayStation 5.

Source WSJ

https://www.wsj.com/articles/sony-to-launch-two-playstation-5-models-this-fall-11600292156?mod=searchresults&page=1&pos=4

https://www.wsj.com/articles/console-makers-now-have-bigger-game-to-play-11600426980?mod=tech_lead_pos13

https://www.wsj.com/articles/sony-earnings-win-boss-battle-with-coronavirus-11596539440?cx_testId=3&cx_testVariant=cx_2&cx_artPos=1#cxrecs_s