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Ebix, Google and macro news +2

09:19 19-Mar-19


Ebix has commenced due diligence for its Yatra purchase and set May 15th as its goal for signing a formal agreement.  The company also reports strong momentum in its EbixCash operations and is establishing "quarterly annualized" targets of $600M for revenue and $180M for income for that segment alone by year end.  Given that TOTAL company revenue last year was just under $500M, this is significant growth that would support the planned IPO. 

My thoughts on Ebix remain the same, but there is evidence that they are ripening.  The overdue unwinding of the Trump trade is related to the strengthening rupee, which is now at $0.015.  Overall the developments represent a tail wind for Ebix as well as European stocks like VOD and ABB.  Many market pundits are looking to the FOMC tomorrow as the next data point, focusing particularly on the removal of the word "patient" from its statement, and of course a change in the dot plot, possibly even indicating a rate cut.  For the record, I don't expect that, but we'll see what happens.

In the meantime, I'll be taking at least a quick look at Google's first ever gaming keynote this afternoon, but will only write again about it if some surprise changes my viewpoint.  Although I'm sure there will be some fanfare, I'm not especially optimistic about the long-term prospects here.  Google+ has failed at less lofty endeavors, and backlash against the company is growing both from governments and on the individual level.  I see this as completely appropriate in light of the opacity of its operations and utter lack of accountability.  A gaming effort would be just one example of how the situation is pushing it try to develop riskier sources of income. 

Another, more viable example would be transportation as a service, via self-driving cars.  That is an area where Waymo seems to have a meaningful lead both in technology and experience.  There should be no more MVIS investors left amongst subscribers, but just in case there are, I note that the timing of MicroVision's LiDAR project fits well with Google's legal victory over Uber.  If I'm right, I would not see that relationship as much of a positive, in light of the competition. 

Finally, I'm not seeking to vilify Alphabet here, simply to note risks which I think investors might be inclined to brush off inappropriately.  I've called useful buying dips in GOOG in the past, but from an investment standpoint, I think the company is going to have a difficult time playing both sides of a growing rift in geopolitics, technology, and culture.  It's tempting to take a local view and claim, as the U.S. general attacking Google did

Look, we're the good guys
but all parties involved would do well to recognize a growing consensus amongst global investors and citizens of the world that there are no good guys here; only monsters on every side.