Apple iPhone XS Max: Total Parts Cost vs. Retail Price

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The Apple iPhone XS Max retails for $1,099. But the total cost of all the parts that form the phone costs only $390 according to an article in the journal. The markups on iPhones in general is huge and so this phone is also not an exception.

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Source: What’s Inside the New iPhone, WSJ

Its not only Apple(AAPL) that add high markups to its products. Another example is Starbucks (SBUX) which charges a huge premium for its coffee. As long as the market is willing to pay the quoted price companies are free to charge as much as they want.

Disclosure: No positions

India’s Sensex: Relatively Stable But Caution Warranted

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The benchmark index of the Indian equity market S & P BSE Sensex is up by 2% YTD at 34808. However over the past 52 weeks it reached a record high of 38896. Since then it has slid some 5% to current levels. Among the major emerging markets, only Brazil is performing better than India due to ending of political uncertainty. Despite the Sensex yielding positive returns so far this year investors need to be cautious with Indian equities. Some of the factors that are not favorable to Indian markets include: rising crude oil prices, record low depreciation of the Indian Rupee against the US dollar, lack of meaningful economic reforms, rising external debt, lackluster corporate earnings, etc. In addition, the Sensex is driven a handful of powerful firms that do not truly represent the state of the economy.

The chart shows the YTD return of the Sensex:

Source: Google Finance

Related:

On The Relative Size Of Emerging Markets To Developed Markets

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Emerging equity markets are small in size relative to the market capitalization of developed markets. Emerging markets accounted for just over 12% of global market capitalization.

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Source: The Curious Case for Emerging Markets by Philip Huber at bpsandpieces

From an opportunity standpoint, the emerging universe is huge with over 6,000 stocks in the 24 emerging markets with a total value of about $7.0 Trillion. So completely avoiding this big set of potential investment opportunities is not a wise strategy.

Similarly emerging markets represent only about 12% of the MSCI World Index:

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Source: MSCI