DeepSummary
The episode begins by discussing the dire food insecurity situation in Gaza, where a significant portion of the population is facing catastrophic hunger. Aid agencies have been conducting airdrops of food supplies over the region, as land routes for aid trucks have been disrupted due to conflicts and inspections. The producer, Peter Granitz, recounts his experience joining one such airdrop mission, describing the multinational efforts involved and the process of loading and dropping pallets of food from the aircraft.
The episode then shifts to an interview with Joshua Roberts, the Economist's finance correspondent, discussing the concept of risk in investing. Roberts challenges the widely held belief that higher investment risk leads to higher returns, citing research that shows no correlation between volatility (a common measure of risk) and long-term stock performance. He explains that the riskiest, most volatile stocks tend to perform the worst, contrary to the principles of modern portfolio theory.
The final segment examines the soaring prices of cocoa, which have reached historic highs due to a combination of extreme weather events affecting West African cocoa production, the spread of diseases among cocoa trees, and structural issues within the cocoa industry. Carlos Siberana, a digital journalist at the Economist, discusses the ripple effects on chocolate companies and consumers, as well as the broader impact of climate patterns on global food production.
Key Episodes Takeaways
- The humanitarian crisis in Gaza has reached severe levels of food insecurity, prompting aid agencies to conduct airdrops of food supplies due to disruptions in land routes.
- The widely held belief that higher investment risk leads to higher returns is challenged by research showing no correlation between volatility and long-term stock performance.
- Extreme weather events, the spread of diseases, and structural issues within the cocoa industry have contributed to record-high cocoa prices, impacting chocolate companies and consumers.
- Climate patterns and other environmental factors are increasingly affecting global food production across various commodities, including cocoa, olive oil, rice, and sugar.
- Airdrops of aid, while a necessary measure, are insufficient in addressing the scale of hunger in Gaza, and a lasting ceasefire is needed to facilitate the efficient delivery of aid by land routes.
- Government regulations and pricing policies in cocoa-producing countries like Ghana and Ivory Coast have disincentivized farmers from investing in new plantations and maintaining existing crops, exacerbating the supply crunch.
- The concept of risk in investing is subjective and difficult to define, and the principles of modern portfolio theory may not accurately reflect the reality of investment returns.
- The chocolate industry has been significantly impacted by the cocoa price surge, with major companies announcing profit losses, workforce reductions, and price increases for consumers.
Top Episodes Quotes
- “The first thing you see when you get to the air base is that it is very clearly a multinational affair.“ by Peter Granitz
- “Deciding what your risk appetite is sounds simple, but it's not really, because risk is quite a slippery and difficult concept to define.“ by Joshua Roberts
- “The highest volatility stocks, which you might have expected to be the highest yielding stocks, actually turned out to be the worst performing stocks, not the best.“ by Joshua Roberts
- “El Nino is causing a severe drought in West Africa, so production has fallen even more, and currently supplies are at their lowest level in years.“ by Carlos Siberana
- “Because of this, farmers are not incentivized to plant new trees or spend money on fertilizer. And as a result, no new plantations have been created in the Ivory Coast in almost 25 years.“ by Carlos Siberana
Entities
Location
Organization
Company
Person
Product
Episode Information
The Intelligence from The Economist
The Economist
3/27/24
It is becoming harder to get supplies into the enclave, which is facing a growing risk of famine. As fewer trucks are making it in, more aid is being dropped by plane. Our producer takes us on a flight. Why high risk does not always lead to high reward (09:40). And the ripple effect of rising cocoa prices for chocoholics (14:43).
Listen to what matters most, from global politics and business to science and technology—Subscribe to Economist Podcasts+
For more information about how to access Economist Podcasts+, please visit our FAQs page or watch our video explaining how to link your account.
Hosted on Acast. See acast.com/privacy for more information.