Footonomics by Jakobsen & Garnry is about the serious and fun differences on macro and equities between two countries playing in the UEFA EURO 2020 tournament.
Match: France vs Germany
Macro: Nationalelf vs. Les Bleus
- Germany wins on Misery Index (CPI + Unemployment + Budget deficit) with 13.8 vs. France 18.3. Very big fiscal deficits in both countries: -8.4% France and -5.4% Germany. Sign of a “new Europe”.
- Germany is ranked 5th in GDP on PPP basis vs. France 9th – Small German win.
- Germany has the most wins and most finishes in top two: 6 wins and 6 top two finishes.
- France has most scored goals: 86, and most conceded goals: 63
- France has a 20.5% chance of winning EURO 2020 according to TheAnalyst AI model, versus Germany’s 9.8%
- Small France victory on stats.
Best football quotes:
- Germany: Berti Vogts talking about critical journalists: ”If people saw me walking on water, someone would have complained: Look at that Berti Vogts, he cant even swim” – or for German speakers: “Das Runde muss ins Eckige” – Herberger.
- France: Eric Cantona: “If a Frenchman goes on about seagulls, trawlers, and sardines, he’s called a philosopher. I’d just be called a short Scottish bum talking crap”. Arsene Wenger: (talking about Arsenal fans booing) “If you eat caviar every day its difficult to return to sausages”.
- A major France victory on quotes! Who can compete with seagulls and caviar?
Overall Macro is a draw.
Equities: LVMH vs SAP
- A slim 2-1 victory to SAP as the German and Europe’s largest software maker has a better valuation (22.4 vs 32.6 on 2-year forward P/E, yes luxury is in higher demand than software) and better return on equity (16.8% vs 13.7%, software just scales better). LVMH wins on growth with an expected growth rate of 9.4% vs 5.2% for SAP as Asian consumers have the munchies for French luxury.
- With software being critical infrastructure these days, SAP came through the pandemic without big wounds losing only 3% of revenue. The German software maker is in the same camp as the other old giants of technology such as Oracle and Intel – they look tired and not as fresh as the new kids on the block. But nothing can take away that SAP is a well-run business with strong profit margins.
- LVMH initially stared into the abyss during the pandemic with high-end luxury being a physical experience. Massive stimulus and a consumer coming back to high streets have created a boom in luxury with consensus looking for a 33% revenue growth this year taking revenue to a new all-time high for the French luxury behemoth.
