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Below is a chart of Visaka Industries Ltd. from 2003 to 2021 reflecting the year-over-year (YoY) percentage change. We are going to review the periods when Visaka Industries was at the same level in year over year performance (red arrows) … Continue reading →

Episode #332: Mebisode – Journey to 100X     Guest: Episode #332 has no guest, it’s a Mebisode. Date Recorded: 7/18/2021     |     Run-Time: 54:25 Summary: Episode 332 is a Mebisode. In this episode, you’ll hear Meb talk about his journey investing in over 250 private companies since 2014. He explains why he chose to do […]

The post Episode #332: Mebisode – Journey to 100X appeared first on Meb Faber Research - Stock Market and Investing Blog.

Welcome to another issue of Net Interest, where I distill 25 years of experience investing in the financial sector into a weekly email. If you’re reading this but haven’t yet signed up, join over 21,000 others and get Net Interest delivered to your inbox each Friday by subscribing here:

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Ever Grande

When I shut down my Bloomberg and exited the Mayfair office of my hedge fund for the final time a few years ago, one of the last prices I saw flickering on my screen was the bond price of a Chinese real estate developer called Evergrande. The price was part of my ‘canary’ screen. Evergrande is the biggest player in the biggest industry sector in one of the biggest economies in the world. It is also very highly leveraged. So when its bond price falls, it’s useful to take note. 

This week, its bond price fell. 

It’s not the first time it’s happened, which is why it may not have made it to the front pages of the newspapers. But that doesn’t make it any less significant. Its balance sheet is bigger now, at $356 billion, and it is the largest issuer of dollar-denominated Chinese junk bonds. The fall in Evergrande’s bonds was sparked by news that one of the Chinese banks had frozen some of its deposits. Piling on the woe came news that it had been asked to suspend new home sales in the city of Shaoyang due to a lack of funds in its accounts and that potential buyers were being refused mortgages by some Hong Kong banks. One line of its bonds fell to 49 cents on the dollar. 

China is a country full of paradoxes and one of them sits at the heart of the residential real estate market where Evergrande operates. Lest you forget, China is a communist state, and all land is owned by the state. In order to solve a funding problem, early reformers came up with a fudge. Zhao Ziyang, a former premier, describes in his memoir how he was introduced to the idea of selling land to raise funds:

It was perhaps 1985 or 1986 when I talked to Huo Yingdong [a Hong Kong tycoon better known as Henry Fok] and mentioned that we didn’t have funds for urban development. He asked me, “If you have land, how can you not have money?”

I thought this was a strange comment. Having land was one issue; a lack of funds was another. What did the two have to do with one another? He said, “If municipalities have land, they should get permission to lease some of it, bring in some income, and let other people develop the land.”

Indeed, I had noticed how in Hong Kong buildings and streets were constructed quickly. A place could be quickly transformed. But for us it was very difficult.

In 1988, the government changed the constitution to allow rights to use land – not to own, to use – to be bought and sold under long term leases. Residential use typically comes with a seventy year lease; commercial use with fifty years. No-one really expects land to revert to the government after that time, but the fudge serves a purpose. In the seven years between 2009 and 2015, the Chinese government collected 22 trillion yuan from selling land. By privatising this state asset, the government has been able to fund massive infrastructure investment on a scale that the taxpayer wouldn’t have been able to bear. 

The constitutional change paved the way for a commercial market to take root around residential property. But the real turning point came later, in 1998. At the time, most city dwellers lived in housing provided by their state employer. The problem was that state employers lacked the motivation and resources to build housing on sufficient scale. In 1998, the government introduced urban housing reforms that removed the obligation of employers to provide housing. People were encouraged to buy their homes from their employers, who sold them at heavily discounted prices. A massive transfer of wealth took place between the state and its people. That transfer of wealth seeded the growth in the residential housing market as homeowners reinvested their gains back in the market by buying bigger and better homes. 

(Ironically, having not been interested in investing in housing themselves prior to 1998, many state enterprises got heavily involved in real estate ten years later as the returns exceeded what they could get in their core business. In 2010, the central government mandated state companies to divest their property arms and return their attention to their core businesses.)

My interest with Chinese property developers began in the mid 2000s, soon after I had started at my hedge fund. Several developers had come to the market and I would visit them on trips to China. Plastic shoe covers on my feet so as not to spoil the newly laid floors, I would tour the sweeping developments springing up around cities like Beijing, Shanghai and Guangzhou. 

The investment thesis was simple: China was urbanising fast and that drove an insatiable demand for residential real estate. Developers could buy land from local government and turn it into aspirational accommodation at 25% margins. Back in my hotel room I would fire up my laptop and plug in values for the inventory of land and unsold homes sitting on developers’ balance sheets to gauge what their stock was worth. 

It didn’t take long for the market to get frothy. Demand for housing came not just for its utility but also for its investment features. Interest rates were kept exceptionally low and easy money boosted investment demand for housing. Since 2002, housing prices in China’s tier 1 cities, like the ones I visited, have risen more than six-fold (which compares with an 80% overall national increase in US housing prices between 2000 and 2005). With the market this frothy, analysts began plugging into their laptops the value of land developers hadn’t even acquired yet, but might. 

It was into that environment that Evergrande was listed, at the end of 2009. It was the biggest residential real estate developer of them all. At the end of the year, it had a total land reserve of 55 million square metres, giving it years of runway compared with the 5.6 million square metres of gross floor area (GFA) it sold that year. The company’s strategy was built around scale, affordability, turnover and brand. It adopted a standardised approach to its operating procedures. One of the bankers on the deal called Evergrande the McDonald’s of the Chinese residential property market. Its stock was 46 times oversubscribed in the retail tranche and it popped 34% on its first day of trading. 

Successful listing of the Group set the milestone in the corporate brand building. From the beginning of 2009, the Group quickly leveraged the gradual heating up of the property market, and immediately adjusted the business strategy, obtaining excellent results of RMB30.3 billion in contracted sales. Besides, the Group captured the best opportunity of the capital market and was successfully listed on the Main Board of the Stock Exchange on 5 November 2009. The Evergrande brand became a household name in China, the recognition and reputation of the brand reached an unprecedented level. [2010 Annual Report]

The IPO also helped Evergrande clean up its balance sheet. In the years prior to IPO it had operated with very high levels of debt relative to equity. Following its IPO, it sat on a net cash position.

That wasn’t to last. The company immediately geared up and started to expand in a literal land grab. The year after IPO, it grew its land bank by 75%, investing in a pipeline of developments across 62 cities, up from 25 the previous year. It took scale to a new level, building mini-cities rather than just apartment blocks that could accommodate as many as 65,000 people on a single site. The company raised cash from pre-sales, signing up prospective buyers years before completion. And it also raised debt: net gearing (net debt as a percentage of shareholders’ equity) rose to 52% in the year after IPO.

A couple of years later the company attracted the attention of short sellers at Citron Research, the team that would later give up short selling in the aftermath of the GameStop affair. They highlighted the risks creeping into Evergrande’s balance sheet. The company had grown its assets five times faster than peers in the past five years and was burning cash. Citron’s report made a number of other accusations about the company and its chairman, and Andrew Left, Citron’s founder, was eventually fined for market manipulation on the basis his report had been somewhere between negligent and reckless. But he was right about one thing: Evergrande was burning cash. 

In the ten years leading up to 2020, Evergrande has overseen RMB230 billion in cash outflows from operations. Its net debt currently stands at RMB536 billion, reflecting a 153% net gearing ratio. Excluding the revaluation of investment properties, that ratio is over 170%. Add in large accounts payable obligations (RMB829 billion) and the company’s liabilities are even larger. Much of this debt has been channeled into land acquisitions; the company now owns 231 million square metres of land across 234 cities (equivalent to four Manhattans). Over the past few years the company has been funding at rates of 8-11% via dollar-denominated bonds, but even these bonds were trading at higher yields before the recent bond price collapse.  

Over the years, the government has intervened numerous times to influence the residential real estate market in China. Using tax, mortgage rates, mortgage quotas, controls on secondary market listing prices and other tools, it has attempted to steer the residential property market between boom and bust. More recently it imposed some ‘red lines’ on property developers that require them to control their debt levels. Evergrande remains firmly in the ‘red group’. 1

Some people liken Evergrande to a giant pyramid scheme. There are periods in the cycle where real estate isn’t a cash flow business, it’s an asset appreciation business. As long as debt can be serviced, that can work, but problems emerge when it can’t. To address this, Evergrande has pursued two strategies.

First, it diversified into other businesses. It’s had a football team since 2010 which has gained success under coaches Marcello Lippi and Luiz Felipe Scolari. It operates theme parks, is involved in grain, dairy and mineral water businesses and has a cultural entertainment division. Its electric vehicle business is now worth $26 billion (down from $93 billion in April).

Second, Evergrande has made itself too big to fail – literally ever grande. Real estate investment is a very important driver of the overall Chinese economy. It has grown from a 5% share of GDP in 1995 to over 13% in 2019, of which over 70% is residential. Incorporating industries downstream and upstream of real estate, the sector makes up 29% of Chinese GDP (comparable internationally only to pre-crisis Spain and Ireland). 

Banks are particularly co-joined. Real estate loans make up around 28% of their loans and 40% of new loans. As a robust source of collateral, banks have an incentive to extend more loans to firms with land holdings. Incentives are similarly skewed in local government, where construction activity represents measurable economic output against which officials are assessed. Zhao’s economic realisation still drives local government budgets today. 

Because it’s too big to fail, Evergrande’s demise may be less a product of its financial position and more its political position. Recently, China’s financial regulator instructed banks to conduct a stress test around an Evergrande failure so the endgame could be getting close. How they choose to allocate losses will determine whether Evergrande bonds bleed out of the canary screen and onto the main screen. 2

Thanks to Byrne Hobart for pushing Evergrande up my agenda and for flagging Ken Rogoff’s recent paper with Yuanchen Yang on the Chinese real estate market.

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More Net InterestGreensill: Simply not Fintechery

The UK Parliamentary Treasury Select Committee released its report, Lessons from Greensill Capital this week. Our original write-up on Greensill was flagged at the hearings; the Committee now presents its own conclusions. In them, the Committee picks up on the red flag we raised about Greensill using an ‘appointed representative’ regime to meet regulatory requirements. Rather than seek direct authority, Greensill hid under the umbrella of a regulated firm called Mirabella Advisers. The Committee recommends that the Financial Conduct Authority and Treasury should consider reforms to the appointed representatives regime, with a view to limiting its scope and reducing opportunities for abuse of the system like this one.

The Committee also dismisses Lex Greensill’s attempt to deflect blame to the insurance industry. At his hearing, he said, “one of the real lessons from the failure of my firm and the impact it has had on the 1,200 employees that we had, is that a heavy reliance on trade credit insurance is dangerous. I urge you and the Committee to consider the manner in which that is regulated, because it is fundamentally [procyclical] in its behaviour.” The Committee is blunt in its response: “We do not think the failure of Greensill leads to any particularly strong evidence about procyclicality in the regulation of insurance markets.”

One other thing that stands out from the report is the cover that some companies receive from their association with the buzz around fintech. The Committee writes,

Mr Cameron may have been hoping to tap into an ongoing interest of the Government in supporting fintech. In 2014, George Osborne, then Chancellor of the Exchequer, stated at the launch of a new trade body for fintech that “I’m here today because I want the UK the lead the world in developing Fin Tech.” Lord Macpherson told us that “Every Government likes to be associated with success stories, such as the dotcom boom. Fintech is definitely the flavour of the month.”

Greensill paraded as a fintech company, but it wasn’t one. As Lord Macpherson told the Committee: “this simply was not fintechery.” Greensill is not alone here; many companies enjoy privileges they may not otherwise attain, through their characterization as fintechs. 

Circle

The noise around stablecoins is heating up now that they have over $100 billion of market cap and policymakers are taking note. We touched on the big ones here. Aside from continued questions over Tether’s balance sheet (see note 2 below), Circle has released disclosures ahead of its SPAC merger.

Circle management projects that the volume of USDC (its stablecoin) in circulation will grow from $35 billion in 2021 to $194 billion in 2023. It anticipates generating interest income on these balances of $40 million in 2021, rising to $196 million in 2023 (or $21 million to $88 million net of income shares and transaction costs). A rise in interest rates will boost these projections as Circle would be able to extract a higher yield on cash. A 100 basis point rise in interest rates across the yield curve would be worth an extra $470 million to Circle in 2022 and $1,110 million in 2023 before income sharing and transaction costs.

The company hints that it may seek out a bank license. It states that substantial investment in the business is required for a number of reasons, one of which is “regulatory capital required for appropriate license, operational and business model expansion.” Its interest rate sensitivity would make it one of the most asset sensitive banks in the sector.

Equity Research

As a former equity research analyst, a current newsletter writer and an intermittent consumer of investment research, the investment research industry is one I take a deep interest in. It was the subject of a Net Interest piece last year: The Cautionary Tale of Equity Research.

Earlier this month, Integrity Research completed a survey of asset managers to measure spend in the industry. They estimate that asset managers will spend $13.66 billion on investment research this year, down 4.5% on last year and almost 20% down from the peak ($19.98 billion) in 2015. 

Most of the spend gets channeled to the big sell-side firms, although independent research providers are expected to pick up $2.1 billion (a lower decline). The biggest chunk of this independent piece is primary research, which is projected to grow.

Classic sell-side maintenance research has been in decline for many years, but the budgets are still there for investors to reward value-added research. Last week, Byrne Hobart discussed newsletters that can move markets. The ones he highlights turnover a fraction of the $13.66 billion institutions spend on research. Either they are underpriced, or the price of investment research has further to fall.

Finally

It’s hot in London! So I may take some time off over August. But if you have any ideas, opportunities, proposals, observations, or anything else you want to talk about, do get in touch by replying to the email or via Twitter or LinkedIn.

1

Targets are: net debt/equity ratio below 100% by 30 June 2021 (company was at 153% at end 2020); cash/short-term debt above 1x by 31 December 2021 (company was at 0.47x at end 2020) and liability/asset ratio below 70% by 31 December 2022 (company was at 83% at end 2020).

2

@TheLastBearSta1 has an interesting theory that Tether (which we discussed here) may have invested customer funds in Evergrande commercial paper. Tether owns just under $30 billion of commercial paper, yet trading desks in Europe and New York have not had dealings with it. Evergrande, meanwhile, is one of the biggest issuers of commercial paper, with $32 billion outstanding at the end of 2020 (although consolidated number could be higher). 

Pop quiz: What do Norway, Nestlé, and NASCAR have in common?

Or what about Leonardo DiCaprio, President Biden… and JetBlue?

They’re all among the companies, celebrities, cities, and countries that have made commitments to curb their contributions to climate change.

Or eliminate them entirely.

And they’re all using the exact same tactic to do so.

It’s one you’ve probably never heard of…

In fact, it’s a commodity so new that it doesn’t even have an official market yet.

There are no quotes or tickers on Yahoo! Finance, Financial Post or Google Finance …Pricing is almost impossible to find.

But it’s on the verge of erupting onto the world stage.

In a few years, even your Uber driver—will know everything about it.

I’m Talking About Carbon Credits

From here on out, the carbon credit news cycle will accelerate.

And it’s going to happen at a breakneck pace.

The tidal wave of government and corporate money that will create this change will put NASA and every other government body to shame.

It’s going to create enormous, long-lasting change in how investing works.

• This is the type of opportunity that—like clockwork—comes along once in a generation.

You are getting a front-row seat to one of the most incredible emerging opportunities you will ever see.

Once you’re up to speed on how the largest entities in the world plan on fighting global warming…

You’ll be set to profit from them in a big way.

So, let’s get you up to speed on the basics.

I guarantee you will be smarter than any of your friends and colleagues by the end of this missive.

How are Carbon Credits Created?

Carbon credits are generated through emission reduction or direct emission removal.

For example: carbon credits can be earned for a renewable power plant that is used to displace coal fired electricity generation.

• For each tonne of CO2 which is displaced, a credit is earned.

Carbon credits can also be generated through removal of greenhouse gases.

This is known as carbon sequestration.

Carbon removal comes from projects such as forest restoration and avoided deforestation. These are grouped as “nature-based solutions”.

Or credits are created through physical removal of carbon from the atmosphere through technology known as:

• Carbon Capture & Store or
• Bioenergy combined with Carbon Capture Store (known as “negative emission technologies”)

Carbon offset projects which sequester carbon (such as reforestation or avoided deforestation) are a function of opportunity cost.

This means the alternative use for the land is what partially drives the value of the offset.

Land which could be used for agriculture or livestock is therefore a function of crop and livestock prices.

The Trove Intelligence Global Carbon Credit Supply Model indicates that prices in the voluntary market will need to rise by an order of several magnitudes…

To continue to incentivize carbon project developers.

Book a Flight

If you try to look at pricing of flights on google or any online portal, under the price of the flight you will now see the amount of carbon emissions that your one seat is responsible for.

This is done for two reasons…

First, to start making customers aware of the amount of carbon emissions they are responsible for their flight.

Second, it’s to condition customers such that when there is a cost now to negate those emissions, the customers know the reason for the cost.

Carbon Credits are an Emerging International Marketplace

The beauty about the carbon market is that it is global.

Greenhouse gases migrate and emissions from one nation end up in the skies of another.

It requires global acceptance and adoption to solving the problem.

• In the Voluntary Carbon credit Market (VCM), a credit produced in 1 country can be applied against emissions of a company located in another part of the world.

For example, the Bonobo Peace Forest in the Democratic Republic of Congo is one of the largest reforestation projects in the world.

Credits earned from this project can be applied against emissions of a company domiciled in Europe or North America.

This creates an incredible opportunity for an international marketplace for credits.

Below is a table which shows the total value of transactions by offset type in the Voluntary market for the past 4 years.

• Total transaction volume in 2020 is estimated to be over 3 times the volume it was in 2017…

And this is exactly what makes it such an exciting place to invest…

All of this is building up a pressure chamber of demand in the VCM that has not yet reached a tipping point.

When it does, there’s a lot of upside to be had.

Because It’s the perfect setup for a long squeeze in the VCM:

1. Rising emissions from a growing population.
2. Tightening government mandates on carbon emissions.
3. Increasing consumer demand for environmental responsible.
4. More transparency in emissions reporting.
5. Corporate buy-in at every level, even from non-emitting companies.

All together, this is going to result in a desperate scramble for high-quality carbon offsets, of which there are few.

If you thought the rise in the price of lumber was crazy in early 2021…

Just wait until you see the VCM market in five years.

Voluntary Carbon Market Pricing

The bad news is that since VCM is such an undeveloped market, pricing information is hard to obtain.

In fact, the term “voluntary carbon market” is somewhat inaccurate. The market itself purely ad hoc.

This is such a new commodity that there is no real, actively traded market.

And that’s great news.

Because it means very few people are actually investing in the market right now.

This isn’t even hitting a blip compared to Gold or Bitcoin on Google Trends…

• As an investor, you know that the time to make your bets is when NO ONE else is looking at a sector.

To start shedding light on what carbon offsets could be worth, let’s start by looking at the price floor.

Carbon offsets produced through means such as reforestation have an opportunity cost.

Breakneck Price Acceleration

Based on this, the Trove Intelligence Global Carbon Credit Supply Model indicates that prices in the Voluntary Carbon Market (VCM) will need to rise to continue to incentivize carbon project developers.

Furthermore, how credits are produced gives them different base values.

The table below shows the variation in global carbon credit pricing across different types of carbon offsets in the voluntary market for 2017–2019.

In 2021, prices in the voluntary market have been hot.

Prices have regularly been quoted above $7.50 per tonne and as high as $15 per tonne for high-quality credits.

Catalysts & Opportunities in the Carbon Markets

They key catalysts for the carbon market are…

1. Government-led initiatives to promote the carbon marketplace.

These include establishing a global carbon price floor, heavily enforcing the achievement of NDCs, and regulating investment in carbon removal technology.

All of these are heavily bullish for carbon offset prices.

2. Corporate-led net neutral and net zero pledges.

Expect to see corporations race to become net zero so that they can remain competitive in the marketplace.

And then watch for additional demand from erasing historical emissions.

3. Demand-driven development of reporting and exchanges.

As outlined, this will include Scopes 1, 2, and 3 emissions. In the near future, it will also require highly liquid, transparent exchanges for both the compliance and VCM.

This has always been the trajectory of any new commodity.

Only this time, you know about it before it has achieved anything close to equilibrium.

The Carbon Market is an Incredible Asymmetric Bet

There’s so little downside—climate change isn’t going anywhere—and incredible upside.

Early adopters, project generators, and holders of carbon credits and offsets can earn substantial returns over the coming years.

Very few people know about this brand-new commodity sector… yet.

But everyone understands it immediately once exposed.

And everyone who understands… will invest, because it makes sense and its cheap to do so now.

Of course, you can stay on the sidelines if you want. But before you make that decision, recall one of Warren Buffett’s most famous quotes.

It goes like this:

“Someone’s sitting in the shade today because
someone planted a tree a long time ago.”

Those trees are (literally) being planted today—all across the world.

And I’m here to help you make a profit from it.

To find the companies best positioned to make money from the hundred-trillion-dollar war, you’ll want to become a member of Katusa’s Resource Opportunities.

In my monthly newsletter, I’ll be publishing the best carbon investments that come across my desk.

If you want to be among the first—and only—to know, sign up today.

Regards,

Marin Katusa

The post The Adoption Rate of this Obscure Commodity Will be the Fastest of All Commodities appeared first on Katusa Research.

La pandemia y más de un año de trabajo en remoto ha cambiado la gestión de personas. En el caso de esta ejecutiva con más de 20 años de experiencia en RRHH, el propósito y los valores han sido definitivos para afrontar un nivel de incertidumbre sin precedentes. Leer

 Leer

Football is a funny game. It is a team game, so superstar players like Lionel Messi or Christiano Ronaldo can’t win championships on their own. Yet, while “money doesn’t score goals” the teams with high-class superstar players like Real Madrid and Bayern Munich constantly win not only the trophies at home but also the trophies at the European level. This is obviously what drives many second-rate teams to invest in individual superstar players to improve the team. Yet, the track record of clubs with these individual superstars and a mediocre rest of the team is pretty bad. Meanwhile, there are the occasional no-name teams that work so well together that they win championships. Just think of Leicester FC winning the Premier League in 2016 or FC Kaiserslautern winning the Bundesliga in 1998 after being newly promoted to the highest tier in German Football.

In essence, it seems that in football a team has to be pretty balanced to be successful. Too much of a difference between the superstar and the rest of the team and the team fails. Nowhere is this easier to see than on the national level where players cannot be bought or sold. Teams like the Italian national football team of today and many of their best teams in the past tend to be void of global superstars but have a range of players that are all world-class. Similarly, the Spanish team that won everything from 2008 to 2012 were full of world-class players without an individual superstar. Meanwhile, Neymar as the lone superstar in the Brazilian team or Ibrahimovic in Sweden didn’t do them any favour and these teams were often better without their superstar than with him.

According to a study amongst chess players, this superstar effect is pretty universal and rooted in the psychology of social interactions. The study looked at the individual performance of chess players when they faced a superstar player like Magnus Carlson or Gary Kasparov. In theory, there are two ways a player can handle the superstar. Either he is intimidated and employs less effort and hence plays worse, thinking that the opponent is so good he has no chance of winning anyway. Or the weaker player uses the superstar as an inspiration to get better and improve his game.

It turns out that the direct effect of the superstar is always negative. When facing a superstar opponent, all players played worse and exert less effort. And when they have a superstar on their team, players exert less effort because they expect the superstar to take care of it.

On the other hand, the secondary effect of a superstar player can be positive or negative. If the skill gap between the superstar is small, the weaker players can see that with some effort they can get on that level and they exert more effort and get better over time. If the skill gap is too large, however, they give up and simply get demoralised and do a worse job.

The lesson should be clear if you are trying to build a team of fund managers, analysts, or whatever team you are building in your business. Try to build a team like Chelsea FC, Manchester City or the Italian national football team where all the players are world-class and none of them is the standout global superstar. If you can’t do that (because who has the money that Manchester City has?), try to build a team of people with relatively equal skill sets and use the ones with the slightly higher skill sets than the rest as leaders to train the group and get them on a higher level. This way, you are creating something like Leicester FC. A team without stars that consistently plays above its level where the sum of the parts creates something bigger.

But please, don’t build a team like the Brazilian national team with Neymar or Manchester United with Wayne Rooney. A team where one superstar is above everyone else and thus the team doesn’t play as a team but just expects the star to take care of everything or get the glory for any successes, deservedly or not. That is a recipe for failure.

El fabricante de microchips y equipamiento electrónico Intel anunció el jueves unos beneficios de 8.422 millones de dólares/7.150 millones de euros) entre enero y junio, un 22% inferiores a los del mismo período del año pasado. Leer

Cada vez más recién graduados manifiestan su preocupación ante la falta de oportunidades laborales. Muchos de ellos, al relatar sus experiencias personales, hacen referencia a un mercado hipercompetitivo que conduce a la desmoralización. Los empleos no se ajustan a sus expectativas y deben aceptar puestos con sueldos inferiores a los deseados. Leer

El fabricante de microchips y equipamiento electrónico Intel anunció este jueves unos beneficios de 8.422 millones de dólares entre enero y junio, un 22% inferiores a los del mismo período del año pasado, en un contexto mundial de escasez de chips. Leer

La red social Twitter anunció este jueves unos beneficios de 134 millones de dólares entre enero y junio, frente a las pérdidas de más de 1.000 millones que registró en el mismo período de 2020, a la vez que sigue aumentando la cifra de usuarios. Leer

I've been using the DEGIRO as a broker for more than 5 years. Read my honest DEGIRO review to hear my thoughts as a long-term investor

The post DEGIRO Review 2021 – An honest review based on 5 years of experience appeared first on European Dividend Growth Investor.

Following the highly successful global financial bailout in 2008, central banksters were hailed by this Madoff acolyte society as the saviours of systemic fraud and criminality. Therefore it was inevitable these fake gods of modern alchemy would continue to overuse monetary policy until such time as their virtual simulation of prosperity did more harm than good. But not before it became widely bought and believed as the secret to effortless wealth, and the secret to eliminating all recessions. The only question being why did no one try this sooner?

Unfortunately, history will say that it never happened sooner, because it first took a populace with the average IQ of a gerbil to believe this would actually work. 

What is amazing at this juncture is the fact that so few pundits today are concerned about this self-evident policy failure. Any blind man can see above that the "reflationary" impact of monetary policy has declined for the past decade. Now, at this late juncture the intended economic effect of balance sheet expansion wears off immediately since asset reflation is skewed  entirely to the benefit of the ultra wealthy. The second order commodity reflation effect wears off next as over-leveraged speculators get margined out - a process that is well underway. Which finally leaves the direct financial effect of central bank bond purchases which is to drive bond yields lower absent higher inflation expectations. And as global bond yields decline, the hunt for yield ensures that ALL markets converge back to the global deflation impulse. Which means that fund managers are forced to rotate out of reflation trades back into long duration trades (bonds, Tech) as a result of the falling discount rate.

The impotence of monetary policy at the 0% bound, is often called "pushing on a string": 

"Pushing on a string is a metaphor for the limits of monetary policy and the impotence of central banks. Monetary policy sometimes only works in one direction because businesses and households cannot be forced to spend if they do not want to. Increasing the monetary base and bank reserves will not stimulate an economy if banks think it is too risky to lend and the private sector wants to save more because of economic uncertainty"

Or, because interest rates have been at 0% for a decade and everyone is already maxed out on debt in the largest asset bubble in human history. 

It's clear that central banks will be the last to know that their policies have failed humanity. Not for lack of trying mind you. 

"We pledge to keep the deflation impulse stronger for longer"

  

Add in the central banks sponsored effects of record leveraged speculation, record valuations, and squandered stimulus buffer, and it's clear that monetary policy is now doing far more harm than good. It's putting the system that it sought to save in 2008 at far greater risk. Amid record wealth inequality driven by central bank policies, does anyone honestly believe there will be another Wall Street bailout this time around? We have reached the inevitable Humpty Dumpty phase of this NeverNeverLand economic expansion. The driving theory of the day is that as long as no one worries about risk, then there is no risk. Which is not exactly how it works.

The biggest risk to this entire gong show is now the sell order. All it will take is one cry of "fire" in this crowded theater to set off human history's biggest clusterfuck. Case in point, as the Delta variant spreads, another lockdown would render this market a smoking crater. And we know from past experience another lockdown is highly conceivable in this old age home. Regardless, when margin clerks are involved, the sell order doesn't need any more catalyst than the 200 day moving average.

Here we see that cyclicals are now becoming ever-more volatile as result of the imported global deflation impulse. These are not insignificant declines:

This chart below of NYSE breadth mirrors the disintegration of the reflation trade seen above. As the S&P 500 rolls higher, the internals of the market are in a waterfall crash lower:

Which leaves Tech stonks which are currently getting buried under an avalanche of new IPO issuance as Wall Street takes upon itself to underwrite another liquidation sale of Silicon Valley's mainstay output, junk stocks. 

But, like everything else in this Potemkin society, it's not what's taking place behind the curtain that matters, it's only the superficial that captures attention.

In summary, this society is deep under the spell of FOMC:

Fear of Missing Crash

Hello

I am just starting out using HSMworks within Solidworks and have a machining problem as per the attached screen shot , the part has an angled bottom and i only want to machine the outside profile .
The part is 20mm thick and needs to have the outer profile that is maximum 18mm.and help in a jig .

i want the cutter to to offset the bottom of the part by 1mm all the way around , as the longest cutter i can get is 45mm

If i try 2d contour as per the screenshot 1 it cuts the full depth all around

if i use the same cutter path using Contour in the 3D menu it try's to cut a weird path around the top of the part screenshot 2

Im sure i am missing something ??

Attached Images

• 2D Contour.jpg‎ (52.0 KB)
• 3D Contour.jpg‎ (53.3 KB)

Economists seek to save a romantic species

En palabras de Alfonso Conde, Director de Mercado de QBE: “Nos alegra dar la bienvenida a David a nuestro equipo de Market Management que queda así reforzado y preparado para afrontar los retos y planes de distribución de QBE EO (European Operations) y en especial de España. David se une a nosotros con unas referencias extraordinarias y estamos seguros que con su juventud y entusiasmo aportará un gran valor añadido a nuestra Sucursal”.

Acerca de QBE

QBE European Operations forma parte de QBE Insurance Group, uno de los grupos aseguradores y reaseguradores internacionales más destacados del mundo, otorgado con la calificación A+ por Standard & Poor. Cotiza en el Mercado de Valores de Australia y la prima bruta emitida por QBE para el ejercicio finalizado el 31 de diciembre del 2020 fue de 14.643 millones de dólares.

Como especialistas en seguros para empresas, QBE European Operations ofrece una gama de productos de seguros, desde el conjunto estándar de RC General, Daños Materiales hasta los productos especializados de Líneas Financieras, Construcción y Energía. Todos se adaptan a las necesidades individuales de nuestra base de clientes con independencia de su tamaño.

Buenos días desde Pamplona.

Tengo una duda en cuanto a la compra del bono. Utilizo tanto Degiro como Interactive Brokers; con este último bróker llevo poco tiempo y hay cosas que todavía no entiendo muy bien. A ver si me podéis echar una mano.

En Degiro ya he operado con este bono y es muy fácil. En Degiro puedo poner cantidades muy pequeñas y no tengo ningún problema para comprar el bono. Por ejemplo, si pones en límite 97 y en valor nominal 300, la cantidad a cobrar son 291 € (aparte las comisiones) y la orden se ejecuta sin ningún problema en el mercado de Frankfurt. Sé que en otros bonos de empresas o estados el valor nominal es más alto pero en este bono se permite utilizar cantidades más bajas.

Sin embargo, en IB el mínimo valor nominal es 1 (donde pone MIL € VALOR NOMINAL) y si pongo 97 donde pone «Precio Límite», la cantidad a cobrar son 970 € (aparte las comisiones). Es decir, no puedo comprar por una cantidad menor el bono. Además, en los datos de cotización pone OTC (no tengo suscripción a datos reales) y no sé si puedo seleccionar que la operación se ejecute en el mercado de Frankfurt.

¿Estoy haciendo algo mal con IB? Lo que me sorprende es que en Degiro pueda operar con cantidades más bajas y en IB no (y lo de seleccionar el mercado de Frankfurt en vez del OTC también me trae de cabeza...).

Gracias por vuestra ayuda y aprovecho la ocasión para daros la enhorabuena por el gran foro que habéis creado. La información es completísima.

Estadísticas: Publicado por cpe — 22 Jul 2021, 11:46

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Pat Dorsey tiene sus cinco claves, Joel Greenblatt tal vez sólo emplee dos en su fórmula mágica…, la mayoría tenemos nuestras propias claves. Yo escribí las mías (no me pregunten cuántas son porque no las he contado) hace más de una década, en plena crisis subprime del 2009. Con la edición de Alicia regresa a Wall Street me estuve planteando si sería conveniente ampliar mis claves, reducirlas o, tal vez, eliminarlas por obsoletas en un mundo “idealmente growth”. Ahí las tienen, no cambié ni una sola coma, finalmente concluí que tras una década de experiencia no había aprendido lo suficiente como para atreverme a cambiarlas, para bien, con ciertas garantías de éxito.
Busque sus claves, escríbalas para tenerlas siempre presentes y trate de seguir un rumbo racional, de forma disciplinada, evitando el ruido del Sr. Mercado.

Establezca un plan de inversiones a largo plazo con una visión global y unos objetivos razonables, y reequilibre la distribución de sus activos bursátiles tras tener fuertes altibajos en sus cotizaciones.

Compre acciones de compañías sólidas y con ventajas competitivas. Cómprelas a buen precio y manténgalas. Si su inversión es buena, el tiempo es su mejor aliado. Quien se conforma con ganar un dólar no merece ganar diez.

No diversifique en exceso. Diversificar reduce los riesgos, pero también puede mermar la rentabilidad. Lo bueno no abunda.

No invierta en bolsa un dinero que pueda precisar en unos pocos años. Como dice Buffett: «El plazo de tiempo idóneo de tenencia de acciones es siempre». Un auténtico inversor nunca se ve obligado a desprenderse, a precios ridículos, de sus activos bursátiles.

No especule a corto plazo. Comprar y vender reiteradamente solo enriquecerá a sus intermediarios financieros. Recuerde, un auténtico inversor siempre lo es a largo plazo, ya que un inversor a corto plazo es un especulador.

No invierta en bolsa si no es capaz de soportar, psicológica y económicamente, ver decrecer en más de un cincuenta por ciento su inversión sin caer en el pánico vendedor.

No persiga los fondos de inversión ni las acciones de moda. El mercado es cíclico: si compra los activos que más han subido en el último año, estará pagándolos caros.

La tendencia en la bolsa es su amiga hasta que deja de serlo. En general, procure no comprar tras fuertes subidas ni vender tras importantes caídas.

No invierta en función de las buenas o malas noticias de la macroeconomía y no tome decisiones arrastrado por la prensa económica ni los analistas financieros. Mantenga siempre su propio criterio y, siguiendo a Buffett, «sea temeroso cuando los demás son ambiciosos y, por el contrario, ambicioso cuando los demás sean temerosos». Las olas de pánico vendedor son siempre una buena oportunidad de compra, los mercados son cíclicos y cuando todo el mundo ha vendido suelen subir.

Pregúntese siempre cuánto cuesta y cuánto vale. «Precio es lo que pagas, valor es lo que recibes», dice Buffett. Conozca lo que compra y evalúe la rentabilidad de los fondos de inversión con un horizonte temporal de diez años o más.

No intente adivinar el futuro. No se puede predecir la evolución de la economía ni de los índices bursátiles. Sea objetivo y paciente; no invierta, siguiendo sus intuiciones, de forma emocional. Sea humilde y consciente de sus limitaciones, la prepotencia y la desmesurada autocomplacencia le harán ignorar el riesgo.

No es cierto que, a largo plazo, en bolsa siempre se gane; eso solo sucede si los valores son sólidos y se han comprado a buenos precios.

Créaselo: en bolsa, a mayor riesgo no hay más beneficio, sino más pérdida.

Compre bien y mantenga. Compre bien y desconecte. Olvídese del ruido y de las cotizaciones del mercado. El señor Mercado es maniacodepresivo. Las noticias le incitarán a comprar y vender, y en bolsa la decisión más rentable suele ser no hacer nada.

No minimice el coste fiscal de sus decisiones. El pago de impuestos, el coste de las comisiones de sus transacciones y el de mantenimiento de sus activos pueden reducir ostensiblemente su rentabilidad a largo plazo.

Cuando los índices bursátiles ronden los máximos históricos, los PER estén muy altos, la rentabilidad media por dividendos sea significativamente inferior a la de la renta fija, y se oferten un elevado número de OPV de compañías de dudosa calidad, cuando todas esas circunstancias concurran simultáneamente, sea muy prudente y selectivo en sus inversiones bursátiles, pues el riesgo es alto.

¿Quiere usted que suba la bolsa? Su respuesta solo debería ser afirmativa si piensa vender o no quiere comprar más activos bursátiles. Si, por el contrario, desea invertir más, alégrese de los descensos en los precios. Cuanto más bajen, más barato podrá comprar y más revalorizaciones futuras obtendrá. Aproveche las fluctuaciones a la baja de las cotizaciones para invertir a largo plazo. Hasta que usted no esté absolutamente convencido de que es mejor comprar a ocho que a diez, no debería invertir en bolsa. Solo quien compra barato puede vender caro.

Que tengan un buen verano.

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Con el apoyo de 468 Capital, Mundi Ventures y Nazca, la 'start up' persigue el objetivo de acelerar su expansión internacional hacia nuevos países de Latinoamérica y penetrar en el sudeste asiático. Leer