Category Archives: Trend Review & Foresight

Bifurcation in Mortgage Loan Markets

 In early March and April when Covid-19 pandemic just started, mortgage markets sunk steeply. After that short period, there has been bifurcation in mortgage markets recovery between jumbo loans, i.e. larger than $510,400* and conforming mortgage loans. Before Covid-19, jumbo loans were viewed as less risky, as they were owned by wealthier customers (McCaffrey, 2020, July 27). That has changed in Covid-19 pandemic when Fed intervened.

Most banks and non-bank lenders heightened lending standards of jumbo loans, particularly required almost perfect credit scores and high downpayment of  even 35% of the principle (McLaughlin, 2020, June 25). As of June 16, 11.8% of jumbo loans were in forbearance, compared with 8.7% of all mortgages (Black Knight, 2020, July). Please see the table below.

Possible reason that jumbo loans, wealthy house owners, went delinquent higher than conforming loans can be found at the Care Act that government agencies stepped in for defaulted monthly payments of conforming loans. Federal Reserve decisively prevented mortgage market from a possible breakdown as Financial crisis in 2008 and bought unlimited amount of mortgage backed securities (Federal Reserve, 2020, March 23). This measure made conforming loans looking much safer to lenders, than jumbo loans that are not protected by the Care Act. A jumbo loan is too big for government-backed mortgages (McCaffrey, 2020, July 27).

The new strict standards for jumbo loans are one of many changes that Covid-19 brought to us. In addition, shown the graph below, there are high level of new loan originations in June 2020, higher than 2019, which means beyond recovery. Apparently, many people bought their houses (Black Knight, 2020, July).

With low interest rate until 2023, Jerome Powell promised today, September 16, in his FOMC statement, still, buying assets may be MBA finance investment textbook answers. Ideally, the assets must be smaller than jumbo loans. 



Cite as:

Rachel Kim (2020, September 19). Bifurcation in Mortgage Loan Markets, The Blue Ocean Management, Retrieved from:




*Note1: in the high living cost areas, jumbo loans must be larger than $765,600.


Black Knight, 2020, July, Black Knight’s Mortgage Monitor Report, Black Knight

Federal Reserve, 2020, March 23, Federal Reserve announces extensive new measures to support the economy, Federal Reserve.Gov

McLaughlin, 2020, June 25, The Jumbo Market Shows Signs of Heating Up, Wall Street

McCaffrey, 2020, July 27, Jumbo Mortgage Rates Are No Longer the Cheapest Around, Wall Street

Food Industry is Moving Slowly, Very Slowly, to Innovate its Food Product and its Business.

Consumer staple sector might be the most slowly growing one, compared to technology sector. As the prior article suggested, however, there are many indicators that food industry is innovating its products and its business models.

Nestlé keeps its keen eye on the ball namely the most promising markets. For example, global pet food  has jumped to 61% higher than 2010 according to Euromonitor. Likewise, in 2020, US pet owners have increased their spending 9.39% higher than spending in 2018, $90.5 billion (Chaudhuri, 2020, June 15). Pet food and treats are major portion of the spending, which is the revenue of Purina pet food grow steadily. Purina is a business of Nestlé global conglomerate.

Recently, Nestlé made a bet on health science business, allergy treatment. First, Nestlé started purchasing shares of Aimmune in November 2016 and then decided to acquire the company in August 2020 (Bugault, 2020, August 31; Globenewswire, 2020, August 31). The term of transaction is to buy all the outstanding shares of common stock, as Nestlé already owned 25.6% of Aimmune. Based on this bid, Nestlé is going to sell pet foods, treats, and allergy treatment with them. If you think of who pay for all, they might be the same target customers, head of household who might be interested in bulky purchase from one company at good deals.

Cite as:

Rachel Kim (2020, September 9). Food Industry is Moving Slowly, Very Slowly, to Innovate its Food Product and its Business, The Blue Ocean Management, Retrieved from:


Bugault, 2020, August 31, Wall Street

Globenewswire, 2020, August 31,

Chaudhuri, 2020, June 15, Wall Street


Socially Responsible and Conscious Eaters Welcome Beyond Meat &Food Innovation

Now more than ever, socially responsible and conscious customers look for items without feeling sorry for animals. Most new makeup products carry the label saying no animal experiment or no animal cruelty in short. Vegetarians are proud of themselves in this regard. According to the Vegetarian Blogs, 254 million adults are casual vegetarians; 116.8 million are interested in becoming ones.

Meanwhile meat lovers argue that they care for animals. Their punchline is or used to be that they cannot give up on taste of beef barbeques and grilled hotdogs. Beyond Meat is a maker and seller of plant-based meat, who started its business with loyal customers in California.

In 2019, Beyond sold $40.2 million and it increased to $97.1 million in 2020 first quarter. Possible reason might be that the company launched Chinese market via Starbucks. Tyson Foods had to reduce its production due to Covid-19 pandemic (Chin, 2020, May 5).


Cite as:

Rachel Kim (2020, September 7). Socially Responsible and Conscious Eaters Welcome Beyond Meat & Food Innovation, The Blue Ocean Management, Retrieved from:


Why Warehouses are Popular? Is it a Short Trend or Long Trend?

Cold warehouses became popular, particularly when Amazon targeted grocery delivery business with its acquisition of Whole Food in 2017 (Stevens, L. & Gasparro, A., 2017, June 16). As Amazon tends to illuminate a promising business area in near future,  this has been a strong trend (Phillips, E. E., 2018, July, 17).

Even before Covid-19 pandemic, online grocery sales grew and cold-storage warehouses are on high demand. Tyson Foods Inc, Kroger Co., Walmart Inc., and FreschDirectLLC are looking for refrigerated warehouses (Phillips, E. E., 2018, July, 17; Fung, E. 2019, December 10).

In Covid-19 Pandemic era, e-commerce sector has been further strengthening, warehouses are getting spotlight. Warehouses are located near city centers with lower rental fees (Wilmot, 2020, August 25). Lineage Logistics LLC and Americold Realty Trust own 63% of the cold-storage warehouses , according to the International Association of Refrigerated Warehouses ( Fung, E. 2019, December 10). If you are looking for a strong and lasting trend, this might be one of food innovation or food business innovation trend.

Cite as:

Rachel Kim (2020, September 4). Why Warehouses are Popular? Is it a short trend or long trend?, The Blue Ocean, retrieved from:



Fung, E. 2019, December 10, Wall Street Journal

Phillips, E. E., 2018, July, 17, Wall Street Journal

Stevens, L. & Gasparro, A., 2017, June 16, Wall Street Journal

Wilmot, 2020, August 25,  Wall Street Journal

Emerging Payment Companies on the rise of e-Commerce

Global trends of business have been strengthening e-commerce sector, even before Covid-19 Pandemic. In 2020, it has been a only way to do business in USA when lockdown was announced statewide, particularly New York and California. Due to the importance of online transactions, payment companies are getting attention and higher valuation as well.

There are immense investment interest in payment companies including established ones and emerging new players based on small business. Visa and PayPal Holdings are globally known companies in this sector.

There are BigCommerce,, and Coupa Software. Among them, Wix might be a newcomer yet potential one, due to its bases on website building packages that small business owners are familiar with (Demos, 2020, August 27). Wix has some 180 million registered users globally and currently partners with GoDaddy as a endorsed payment (Demos, 2020, August 27Norton, 2020, August 28).

Cite as: 

Rachel Kim (2020, August 25). Emerging Payment Companies on the rise of e-Commerce, The Blue Ocean, retrieved from:

AstraZeneca Makes a Big Splash

Among Covid-19 vaccine candidates, the Oxford and AstraZeneca vaccine might be worthwhile to mention here. Their vaccine is going to deliver the genetic code for the spikes coming out of  the new coronavirus and generate an immune response to fight against coronavirus.

The generic code was developed from chimpanzees and showed minor side effect in humans in phase 1 and 2. Phase 3 clinical trials started with 30,000 participants in US in August and with 70,000 in the UK, Brazil and South Africa. Production estimate is that AstraZeneca will be able to produce 2 billion doses worldwide (Rivas, A., Loftus, P. & Cervantes, A., 2020, September 1; Deng & Walker, 2020, August 6).

Cite as:

Rachel Kim (2020, September 2). AstraZeneca makes a big splash, The Blue Ocean Management, retrieved from:

Mobile Games are Hot

Now than ever, a cellphone is a consumer necessity for authorization to work systems, for delivery, for opening door, for social network, for a ride, of course, and for even education: such as Moodle or Education systems. As the reflection of the facts listed, Apple continues to rise its share price today, September 1, 2020, regardless of political uncertainty upcoming presidential election in US or trade tension with China.

If you missed an opportunity to invest in current stock market trend, let’s think what can be sold to mobile phone users? Here comes mobile games that do not need video game consoles. Mobile gaming markets have grown incrementally as shown the graph below( WePC, 2018).

Zynga’ games: FarmVille or CityVille, earned its popularity and name recognition via Facebook. When Facebook made a new game appear before the games known, in 2012, Zynga Inc had lost $22.8 million in its second quarter and its stock went down to 70% from its initial public offering price: $10. Zynga Inc restructured its top managers to integrate web and mobile platforms in 2012 July, according to the company’s announcement. Zynga delayered its previous structure between its CEO, John Schappert, and its Chief Mobile Officer, David Ko, which looked to emphasize on mobile game offering via Android and iPhones (Raice, 2012, August 9).

In 2020, August 31, Zynga shares rose 5.57%, in part because its second quarter earnings expected to be higher than its published guidance of $460 million and to complete its acquisition of Peak, Turkish Mobile game studio (Needleman, 2020, June 1).

Cite as:

Rachel Kim (2020, September 1). Mobile Games are Hot, The Blue Ocean Management, Retrieved from:



Needleman, 2020, June 1, Wall Street Journal

Raice, 2012, August 9,Wall Street Journal

WePC, 2018