Rounding up top reads from around the web, including articles shared by fellow investors in the Financial Horse Facebook Group.
- Ray Dalio recently spelled his thesis on why the economy is broken in a LinkedIn post titled: “The World Has Gone Mad and the System Is Broken.”
- Central banks have been handing out cheap money to investors who have been injecting it into companies that are often unprofitable and don’t contribute to the growth of the economy, he explains.
- Dalio also attacked the country’s ballooning debt and disproportionate access to credit, which is fueling the wealth gap.
A glitch in the stock trading app Robinhood blew up on Wall Street Bets earlier this week, with traders boasting about the unlimited amounts of borrowed money the bug allowed. Users of the platform’s premium tier, in what’s been described as an “infinite cheat code,” were allowed to sell covered call options with money borrowed from Robinhood. The problem is that the app incorrectly adds the value of the options to the user’s original cash on hand, allowing them to borrow larger and larger amounts, with apparently no limit.
One trader said that he turned his $2,000 into $50,000, and then proceeded to lose it all after he used it to buy Apple (AAPL) puts. Another trader said he turned his $4,000 into a $1 million position.
Who Needs Moonshots? How Former Hollywood Mogul Barry Diller Built A $4.2 Billion Tech Fortune Out Of Underdog Assets (Forbes)
Since he took control of IAC’s predecessor in 1995, he’s produced 14% compound annual returns for shareholders, outperforming Berkshire Hathaway and trouncing both the S&P and Hollywood giants like Disney, CBS and Viacom.
In a 1993 New Yorker profile, Diller laid out a prescient vision of nonlinear TV viewing habits, essentially describing Netflix. Yet when the time came to build his own streaming business, Diller admits, “the ideas we had were bad.” Despite owning Ask Jeeves and Vimeo, he was beaten by Google in search and YouTube in video. He passed on the chance to invest in Chinese internet giants like Baidu at their dawn and Amazon after the dot-com bust. When Priceline was offered to him, he was stretched thin because of trouble at Expedia and was unable to pounce.
But Diller’s hits have more than made up for his misses. At IAC he has built and spun off ten publicly traded companies including Ticketmaster, travel giant Expedia and Match Group, Tinder’s parent company, worth a combined $70 billion (at an estimated cost of $12 billion).
In 2019, Diller’s IAC will generate $5 billion in revenues, up about 12% over last year. Its $20 billion market capitalization, however, seems to reflect investments in only two operations, 81% of Match Group and 84% of ANGI HomeServices, both of which Diller is considering jettisoning. But if you think for a second that you’ve heard the last from Barry Diller and his band of underdogs—from Investopedia and Ask to Bluecrew, Brides and Turo—you’re mistaken.
The most obvious difference is the sheer quantity of wealth depicted on the Forbes 400 lists. The top five richest Americans today — Bezos, Gates, Buffett, Mark Zuckerberg and Larry Ellison — are worth a collective $435.4 billion — more than 2% of America’s GDP. The top five richest Americans in 1982 had a combined fortune of roughly $11 billion. But the differences don’t end there.
The Fear Fund: Nancy Davis’ ETF Aims To Protect Investors From Scary Stuff, Like Recession And Inflation (Forbes)
The Quadratic Interest Rate Volatility & Inflation Hedge ETF, ticker IVOL, is designed to provide shelter from both inflation and recession. Its actively managed portfolio mixes inflation-protected Treasury bonds with bets, in the form of call options, on the steepness of the yield curve. Those options are cheap, for two reasons. One is that, at the moment, there is no steepness: Yields on ten-year bonds are scarcely higher than yields on two-year bonds. The other is that the bond market is strangely quiet. Low volatility makes for low option prices.
However, the survey also showed that 45 percent, or nearly half of all Singaporeans do not possess an emergency fund that can sustain them for six months. One industry analyst, behavioural finance and market psychology expert Wong Kon How, surmises that this is due to the fact that for many Singaporeans, their assets are locked away in CPF accounts or property ownership.
When asked regarding their attitudes toward investments, one-fourth of all the respondents said they believe that investing is a risky endeavour. Additionally, 20 percent, or one out of every five respondents said they actually keep cash at home in a piggy bank.
Moreover, more than one out of every two respondents (54 percent) said that the cost of living today outpaces the income that they earn.
The survey results from 1,028 Singaporeans between the ages of 18 and 65 were released on November 1. It showed that these are the top three financial priorities of Singaporeans”
- Putting away money in savings
- Reaching financial independence
- Building up an emergency fund
Furthermore, a sizable percentage (41 percent) of Singaporeans said they do not feel optimism regarding their financial future. According to Mr Wong, these insecurities may stem from pressures they feel from society.
Pairing a not-so-fun activity with another I enjoy is one way I’m able to knock out my to-do list without feeling too drained or grumpy. This works for both big and small items. For instance, at the end of the month I always comb through my expenses and tally my budget spreadsheet. Sounds pretty dry, right? Except I always do this at a bar or cafe, sipping a glass of wine or a latte. This turns the task into a treat, not a burden. I get to escape the desk where I work all day to enjoy a beverage — and my budget gets up-to-date.
An acquaintance of mine approached me about joining her team. I would be selling health and wellness products such as vitamins, drink supplements, and protein and promoting a healthy eating program designed to allow people to drop weight quickly. At the time, I was taking a summer semester of nursing school, which my scholarships didn’t cover. I was also dealing with some painful things in my personal life, which left me extra vulnerable to the community aspect of the MLM. I was promised that no one got any direct financial gain from signing me up. Needless to say, the whole thing sounded too good to be true — but I jumped in anyway.
Once I became involved with the business, I picked up on things that made me uneasy. My “uplines” hosted team meetings where they would lay out the list of things you should be doing throughout the week to grow your business. Reach out to dozens of people, read “self-development” books. Recruit, recruit, recruit. It felt unnatural and fake, but I was promised that if I did these things and followed in their footsteps, I would make money. So I ignored the red flags.
Man jailed for abusing CapitaStar, cheating CapitaLand of nearly $5,000 in shopping vouchers (Yahoo News)
A 32-year-old perfume promoter submitted more than a thousand forged shopping receipts to a loyalty programme over five months, a court heard. As a result, Musadiq Abbas unlawfully got nearly $5,000 worth of CapitaLand shopping vouchers. At the State Courts on Wednesday (6 November), the conman was jailed for one year and three months.
- Exxon Mobil reported a 49% decline in third-quarter earnings on lower oil prices and higher costs.
- The company reported 75 cents in earnings and $65.05 billion in revenue, which did top analyst expectations.
- “We are making excellent progress on our long-term growth strategy,” Chairman and CEO Darren Woods said.
- Shares of the country’s largest oil company gained 3% on Friday.
The Personal Data Protection Commission (PDPC), Singapore’s official privacy watchdog for data breaches, has fined Singapore-based companies Singtel and Ninja Van.
Telco Singtel was fined $25,000 after an issue with its My Singtel mobile app, allowed users to other customers’ accounts, exposing the billing information like names and addresses of more than 330,000 subscribers, according to The Straits Times. For delivery startup Ninja Van, it was fined $90,000 for leaving up to 1.26 million individuals’ data exposed to website users from 2016 to 2018 after another whistleblower tipped off the PDPC. This meant users of the order tracking function on Ninja’s website were able to enter a different tracking number and view information, such as names, addresses and signatures, of customers whose parcel delivery statuses were set to “completed”.
After Synnex Trading was fined $160,800, and its director, Jia Xiaofeng faced three months of jail term as well as a fine of $5,400 for the sale of illegal Android TV boxes, on Wednesday, October 30th an appeal has been filed by the Attorney-General’s Chambers (AGC) to the High Court against the excessive sentences, as this is the second case which involves the highest fine in Singapore. It should be noted that Jia and Synnex Trading were each convicted of four charges under the Copyright Act.
McDonald’s said Sunday that it had fired CEO Steve Easterbrook due to what the company described as a “recent consensual relationship with an employee” that violated company policy. Chris Kempczinski, president of McDonald’s USA, will take over as CEO, according to the company’s press release Sunday night.
In an email to McDonald’s employees, Easterbrook called the relationship a “mistake.” “Given the values of the company, I agree with the Board that it is time for me to move on,” Easterbrook said. “Please join me in congratulating Chris on his promotion. I know you will support him as you have supported me — he’s lucky to have a team of your caliber.”
Goldman Sachs says antitrust to heat up in 2020, pressure Facebook, Google shares for ‘years’ (CNBC)
- Goldman Sachs downgrades the communications services sector to a neutral rating based on regulatory pressure and expected lackluster performance.
- “Antitrust lawsuits typically take years to resolve but ultimately result in lower valuation,” writes David Kostin, chief equity strategist at Goldman Sachs.
- Whether Kostin’s caution is called for will depend on coordination between lawmakers on both sides of the aisle as well as the results of the 2020 election.
Legendary Wall Street trader Carl Icahn’s long-standing bet against equities markets has continued to cost him. His investment fund is heading towards its fourth annual loss in the last six years as the stock market soars.
On an investor call held on Tuesday, an Icahn Enterprises executive, Keith Cozza, said the investment fund’s “negative performance in Q3 was driven by net losses in our short equity index positions and certain core long equity positions.”
Rising gold prices have deterred jewellery buyers, with global demand slumping to the lowest in nearly a decade in the third quarter, according to the World Gold Council. But this was more than made up for by investors of physical gold-backed exchange traded funds (ETFs), which meant overall gold demand was moderately higher, said the industry body representing leading miners. Gold price gained 5 per cent during the quarter, driven by two interest rate cuts in the United States, an easing of European monetary policy via resumption of bond-buying and a global economic slowdown.
This partnership is aiming to benefit 5,000 individuals and 100 SMEs. Microsoft is expected to work with SkillsFuture to enhance workplace learning practices among Microsoft’s network of SME partners, through which both parties will develop a training blueprint for SMEs. The company will also provide a curated list of free online Microsoft courses on the MySkillsFuture portal that will include subjects like Data Analytics and Artificial Intelligence (AI). The participants of selected programs will get a chance to receive Microsoft certification after the completion. The multinational US-based company’s PowerApps Platform will also be incorporated into SkillsFuture initiatives.
Pragmatism trumps ideology: a Taiwanese scholar looks at Lee Kuan Yew’s relationship to China as he was building Singapore (Independent.sg)
Professor Liu argues that the late PM Lee had a relationship with China that was both pragmatic and situational, despite the popular belief that China had stood in the way of Singapore’s nation-building since Beijing had been perceived to have encouraged the communist rebellions in Singapore in the 1950s and 60s.
At that point, PM Lee and the PAP was thought to downplay an overseas Chinese identity, for the purpose of building Singapore’s own multiracial identity. This was shown in the choice of English as a national language, for example. The Prime Minister has already stated that he understood “the PRC aimed to increase the loyalty of the overseas Chinese to Beijing.” And therefore, during his first visit to China in 1976, English was spoken in all of the meetings he took, in order to “avoid any suspicion that Singapore was influenced by kinship ties with China”.
But PM Lee, who is of Chinese descent, also used this when it was to his advantage, “especially for commercial gain,” as Professor Liu writes. Concerning opportunities for business in China, the late Prime Minister said “We would be foolish not to use the ethnic Chinese network to increase our reach and our grasp,” while his administration encouraged local businesses to “to exploit their dual identity as ethnic Chinese and Singaporean”.
However, the Prime Minister also played both sides when needful. Even as an anti-colonialist, he sided with the British against the communists, and then changed sides again later when it proved necessary, according to Professor Liu. China did the same, since it held anti-colonialism over communism as well, and turned a blind eye when the Lee government suppressed communist moves.
Despite how their relationship is often described in competitive terms, the two Asian financial centres are inevitably intertwined as a result of trade linkages and other ties that affect the fortunes of the region.
Hong Kong is Singapore’s fifth largest trading partner, as well as Singapore’s fourth largest investment destination. As of end-2017, Singapore’s cumulative foreign direct investment (FDI) into Hong Kong was S$57.4 billion, while Hong Kong’s cumulative FDI into Singapore was S$61.0 billion as of end-2018. As both are small, open economies, they are heavily affected by the external environment, with their trade three times that of their gross domestic product. Both markets – to varying extents – also depend on the state of China’s economy.
When queried, the Monetary Authority of Singapore (MAS) reiterated its stance that the inflows from Hong Kong have not been significant or substantial. A deterioriation of the situation in Hong Kong resulting in large capital outflows “will not be positive” for Singapore and the region, added the spokesperson. There has also not been any strong evidence in terms of data to suggest a sharp inflow of Hong Kong money into Singapore residential properties, but there has been a surge in Chinese interest, particularly in luxury homes.
Looking for a comprehensive guide to investing? Check out the FH Complete Guide to Investing for Singapore investors.