• ValueAct Capital’s Investment In Citigroup
    This week, ValueAct Capital Partners was reported to have made two new investments – one hiking from $70 million to $1.2 billion its stake in global bank Citigroup, market capitalization $183 billion, the other a new position in $778 million […] The post ValueAct Capital’s Investment In Citigroup appeared first on ValueWalk.
  • A fund manager sees ‘inconvenient truths’ in the market, predicting a shift as inflation gains
    Mayflower Advisors' Larry Glazer warns a "new paradigm" is coming to Wall Street.
  • Elon Musk: The amped-up version of Tesla's Model 3 will cost $78,000
    The car will be able to go from zero to 60 miles per hour in 3.5 seconds.
  • Starbucks is opening its bathrooms to everyone
    The policy change follows the uproar over the way two black men were treated at a Starbucks in Philadelphia.
  • Reliability of Historical Financial Data
    We have all heard the phrase “history repeats itself.” Yet, very few people apply long-term history to the art and science of investing. There is no better example of this than how the majority of modern investors, the most knowledgeable […] The post Reliability of Historical Financial Data appeared first on ValueWalk.
  • What Happens In An Internet Minute In 2018?
    In your everyday life, a minute might not seem like much. But when it comes to the vast scale of the internet, a minute of time goes much further than you ever could have imagined. That’s because the internet has […] The post What Happens In An Internet Minute In 2018? appeared first on ValueWalk.
  • Americans are happy with how Trump is handling the economy even though most think he's helping the rich and his own businesses, poll finds
    A new poll from CBS News shows that Americans are happy and optimistic about the economy, and credit President Donald Trump for the upswing. Yet nearly nine in 10 Americans think Trump is looking out for the interests of big business and the wealthy, while half say the same about the middle and working classes. Americans give President Donald Trump credit for the strong economy, even though they think he's looking out for big business and the rich, a new CBS News poll found. The poll found that 18% of Americans rate the economy as "very good" and 46% rate it as "somewhat good." Only 9% said they see the economy as "very bad." Of those surveyed, 35% think Trump's policies are "a great deal" responsible for the current state of the economy and 33% think they are "somewhat" responsible. Just 11% said they thought his policies have no impact. Even though Trump gets favorable grades on the economy, most people think he is looking out for his own private business and the wealthy. The survey said 88% think Trump is concerned about the interests of big business and the wealthy, compared to 49% who think he's looking out for the middle and working class, and 43% who think Trump cares about "people like you." A whopping 84% said they believe Trump is looking out for the interests of his family business, which he officially stepped away from running before taking office. Additionally, 42% feel optimistic about the near future of the economy while 33% are pessimistic. The new GOP tax law may help explain that outlook. In February, a majority of Americans had a positive view of the GOP tax plan that passed into law last year, reversing initial reactions to the legislation. The CBS News poll was conducted by YouGov between May 16 and 18 with 2,023 American adults responding.SEE ALSO: 'Ouch': The global economy is having a painful start to 2018 DON'T MISS: Trump is punting on one of his biggest goals for the year Join the conversation about this story » NOW WATCH: A Nobel Prize-winning economist says Trump's tax plan won't crash the economy
  • US companies are returning cash to shareholders at a record pace — and that's fueling everyone's biggest fear about tax reform
    Following the successful passage of Republicans' new tax law, many parties across Wall Street were nervous about how US companies would use their excess cash. Data from S&P Dow Jones Indices suggests their biggest fears are coming true, though some argue it may not be as big of a deal as previously thought. When Republicans passed the new tax law, Wall Street was very vocal about what US corporations should do with the mountain of proceeds coming their way. Favor your workers and sink money back into your businesses, observers said, worried that companies would instead spend the billions of dollars to boost their stock prices and reward shareholders. If the latest figures are any indication, companies didn't listen. With a handful left to report, they have already set a new record for share buybacks, repurchasing $178 billion worth in the first quarter of the year. On a trailing 12-month basis, corporations are now on pace to surpass $1 trillion in combined buybacks and dividends for the first time, according to data compiled by S&P Dow Jones Indices. Digging further into the numbers, companies have spent $564 billion on buybacks and $428 billion on dividends over the past year, totaling $992 billion. If the remaining firms give that a slight boost, as S&P expects them to, it would mark the historic breach of the $1 trillion threshold. Upon first glance, this would seem to fuel Wall Street's big fear about the new tax law. After all, $1 trillion spent on shareholder enrichment is $1 trillion not being pumped into capital expenditures and employee wages. But Howard Silverblatt, a senior index analyst at S&P, has other ideas. He says corporations are so flush with money that they can comfortably cover all bases. "Cash remains near or at its highs, giving companies the ability to do whatever they want," he wrote in a report. And based on the record $158.8 billion spent on capex in the first quarter, Silverblatt would seem to have a point. On a broader basis, the way companies are deploying their tax-reform cash is a positive for the equity market. As stocks feel increased pressure from climbing Treasury yields and an expected slower pace of earnings growth, investors are likely to start seeking out companies that enrich shareholders. Goldman Sachs is already on it, and it maintains an index of firms best positioned to return the most money to shareholders. You can read more about that here. In the meantime, if you're still feeling uneasy about how corporations are using their excess capital, allow Silverblatt's data to put your mind at ease.SEE ALSO: Goldman Sachs has uncovered a Tesla trade designed to make money no matter how the company's battered stock performs Join the conversation about this story » NOW WATCH: Ian Bremmer: Why the American dream doesn't exist anymore
  • A former trader accused of rigging the market says being a vice president at Barclays is like working at McDonald's
    In a recent courtroom testimony, ex-Barclays trader Carlo Palombo likened being a vice president at Barclays to working at McDonald's. Palombo is accused, along with three other individuals, of rigging the euro interbank offered rate — or Euribor — between 2005 and 2009. To most people, rising to the rank of vice president at a major financial firm is an immense accomplishment — a rare feat that just a small number of people ever achieve. But some don't get the fuss, and Carlo Palombo is among them. The ex-Barclays trader is currently on trial amid accusations that he rigged benchmark interest rates. Speaking in court on Thursday during his second day of testimony, Palombo said being a VP at Barclays is "the equivalent to the guy that serves you in McDonald's," according to a Bloomberg report. Palombo's tone-deaf comments came as he tried to downplay his seniority at the firm. "Vice president is not what everyone thinks it is," he replied after a prosecutor questioned his comparison. "It is junior." For context, as a supposed "junior" level employee, Palombo made £1 million ($1.35 million) in 2017, according to prosecutor James Waddington. Palombo, 39, is on trial along with his former Barclays colleagues Colin Bermingham and Sisse Bohart. Ex-Deutsche Bank trader Achim Kraemer also stands accused. The quartet has denied charges that they fixed the euro interbank offered rate — also known as Euribor — between 2005 and 2009, according to Bloomberg. Read the full Bloomberg report here.SEE ALSO: Goldman Sachs has uncovered a Tesla trade designed to make money no matter how the company's battered stock performs Join the conversation about this story » NOW WATCH: Why so many fast food logos are red
  • Kellyanne Conway on leaks: It's a few people trying to 'settle personal scores'
    Conway confirmed an investigation into White House leaks is underway.
  • Holding money in cash hasn't been this attractive since the financial crisis — here's why that's a terrible sign for markets
    Cash and cash-like holdings such as Treasurys haven't been this appealing relative to other assets since 2008. This development is indicative of multiple pressures facing markets right now that should have investors very worried. For much of the nine-year bull market, equity enthusiasts have repeated a mantra called "TINA" — or "There Is No Alternative." They're referring, of course, to the complete and utter lack of lucrative investment options available outside the stock market. For years, the type of risk-taking associated with owning stocks has been rewarded, and investors have responded in kind. They've continue to pile into positions even as they've grown jam-packed, because yield from elsewhere has been so scarce. Well, there's no easy way to say this, but TINA appears to be dead — at least if one crucial market indicator has anything to say about it. As you can see below, the 3-year Treasury yield (1.90%) is now above the benchmark S&P 500's dividend yield (1.89%) for the first time since 2008. In other words, holding money in safe, cash-like assets like Treasurys is now a competitive alternative to stocks for the first time since the financial crisis. While it's not altogether surprising that Treasury yields are getting more competitive as the Federal Reserve works to raise interest rates, there are still some negative implications. First, and perhaps most crucially, it raises the question of why investors should put their money in a so-called risky asset (like stocks) if they can get a superior yield somewhere safer. If equities aren't proving to be worth the risk, why buy them? It's a question traders will be asking themselves more and more going forward if this trend persists. Second, on a bigger picture basis, the yield shift affirms what many Wall Street experts have been saying for weeks — we're in the final stage of the current market cycle. And that means a downturn is coming. Maybe not imminently, but at some point. Going forward, equity investors will continue to take their cues from Treasury yields, which climbed to their highest level since 2011 on Tuesday. If the 10-year can prolong its push above the closely watched 3% threshold, there could be more pain in store for stocks.SEE ALSO: Wall Street’s best stock picker shares his secret weapon for unlocking massive investment opportunities and crushing the market Join the conversation about this story » NOW WATCH: What will probably happen with the North and South Korean peace treaty
  • GOLDMAN SACHS: Buy these 13 stocks for their explosive sales growth as market-wide profits dry up
    Investors had a surprisingly sour reaction to first-quarter earnings results, even though the majority exceeded analyst forecasts. That doesn't bode well for the future of equities as traders begin to prepare for a market-wide earnings growth slowdown. Goldman Sachs says investors should instead focus on companies set to see strong revenue growth through the end of 2019, and singles out 13 stocks that fit the bill. Heading into this past earnings season, analyst expectations were extremely lofty. And then something surprising happened: companies beat them anyway. But the surprises didn't end there. Even as corporations handily exceeded forecasts, investors failed to reward them with stock gains commensurate to their outperformance, according to Goldman Sachs. To make matters even dicier, firms that missed earnings were punished to a greater extent than usual. To say these were tough conditions is an understatement, especially considering S&P 500 earnings-per-share grew by 23% during the quarter, the most since 2011. So what gives? Is the traditional way for traders to play earnings season outdated? Goldman has some ideas. The firm argues the lack of share price follow-through stems from investors thinking — perhaps correctly — that profit growth has peaked for the cycle, leaving nowhere to go but down. It's a view that's shared across Wall Street, with firms like Morgan Stanley and BlackRock already voicing similar concerns. Goldman has a solution for picking stocks going forward: Go further up the income statement and assess companies based on top-line revenue. The firm says that in an environment of slowing economic growth — like the one currently facing investors — it's the companies capable of growing sales that stand apart. The chart below shows this dynamic in play. Over the past year, a Goldman-curated basket of high-revenue-growth stocks has beaten the S&P 500 by 8 percentage points, outperformance the firm expects to continue. "Analysts do not expect the conditions that led to upside in 1Q EPS to persist for the remainder of this year," David Kostin, Goldman's head of US equity strategy, wrote in a client note. "In a decelerating GDP growth environment with a narrow dispersion of valuation multiples, we continue to recommend investors own stocks with the highest forecast sales growth." With that in mind, all you need to do is identify the companies that fit the bill. And lucky for you, Goldman has already done the dirty work.  As mentioned above, the firm maintains a basket of companies predicted to see the biggest revenue growth. It recently went the extra step and rebalanced the index based on full-year 2019 forecasts, which informs the list below. Without further ado, here are the 13 stocks that best fit the bill, arranged in increasing order of 2019 estimated revenue growth.13. Adobe Systems Ticker: ADBE Industry: Information technology Market cap: $112 billion Year-to-date return: 38% 2019 expected sales growth: 18% Source: Goldman Sachs 12. Alphabet Ticker: GOOGL Industry: Information technology Market cap: $674 billion Year-to-date return: 5% 2019 expected sales growth: 18% Source: Goldman Sachs 11. Ticker: CRM Industry: Information technology Market cap: $92 billion Year-to-date return: 28% 2019 expected sales growth: 19% Source: Goldman Sachs See the rest of the story at Business Insider
  • Goldman Sachs has uncovered a Tesla trade designed to make money no matter how the company's battered stock performs
    Trading Tesla's highly volatile stock has been difficult for investors. Goldman Sachs offers up a trade it says will make money regardless of how Tesla's stock trades. Trading Tesla's stock can be a daunting task. For bulls, it can be difficult to stay the course amid countless negative headlines. Whether that means stark tales of the company's torrid cash burn or horror stories from the production line, defending a long Tesla position can be a daunting task. Not to mention the ever-present short sellers nipping at the heels of the long trade — a group so convinced of Tesla's imminent demise that it has made it the most shorted company in the US market for much of the past 18 months. Speaking of bears, they have to grapple with a stock that has managed to wiggle out of trouble time and time again, their shorts bearing the brunt of those gains. Not to mention CEO Elon Musk seems hell-bent on destroying them. Heck, he's even ponied up millions of his own dollars to punish them. So with that in mind, what's a trader to do? Goldman Sachs has a solution: Make a trade that's insulated from Tesla's volatile stock price. Goldman recommends doing so using the company's convertible bonds. Here's the trade, as put together by Jonathan Kahnowitz, a cross-asset research analyst at the firm: Buy Tesla 0.25% convertible bonds maturing in 2019 Sell a March 2019 call option on the same bond to isolate the credit value "By selling a $360 call against the convertibles investors can create a package that returns 6.4% annualized yield over a 10-month investment period at any stock price if the company is able to pay down the bond at maturity," Kahnowitz wrote in a client note. That last part is key, and it represents the possible downside risk. Goldman's trade hinders on Tesla's ability to maintain a strong capital structure and keep raising enough cash. Fear not, the firm says. "We see several avenues for the company to meet these upcoming capital requirements through a combination of secured/unsecured debt, additional convertibles, and equity — with the mix more weighted to debt," analysts wrote to clients. And if you're still wondering how to trade Tesla's stock, Goldman has some ideas on that too. Put simply, you should sell. That's largely because, according to the firm, the company will continue to see negative free cash flow through its forecast period. SEE ALSO: Holding money in cash hasn't been this attractive since the financial crisis — here's why that's a terrible sign for markets Join the conversation about this story » NOW WATCH: Ian Bremmer: Why the American dream doesn't exist anymore
  • Warren Buffett Thanks Bruce Greenwald
    In this short video Berkshire Hathaway’s Warren Buffett thanks Bruce Greenwald. Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid? Transcript Hi Bruce. Ben Graham I started the path to value investing back […] The post Warren Buffett Thanks Bruce Greenwald appeared first on ValueWalk.
  • 'Deadpool 2' topples 'Avengers: Infinity War' at the box office
    "Deadpool 2" took down the Avengers at the box office this weekend.
  • America's biggest companies keep sounding the alarm on an overlooked fear that could crush profits
    Companies in the S&P 500 raised similar concerns over a major market headwind during first-quarter earnings calls. Goldman Sachs followed the calls and compiled multiple examples of rising corporate fear around the swelling pressure point. If you've forgotten to keep an eye on wage inflation, you can hardly be blamed. After all, the market has dealt with any number of other pressure points in recent months, including the 10-year Treasury yield's climb above the crucial 3% threshold, the prospect of a global trade war, escalating nuclear tensions in the Middle East, and good old-fashioned high valuations. But as you've been distracted by that maelstrom of headwinds, corporate America has stayed focused on wage growth. And it showed as much during first-quarter conference calls. A wide range of companies disclosed worries about having to pay more for labor — something that's obviously great for workers but troublesome for corporations trying to grow their bottom line. Before we get into specific examples, it's important to take a step back and assess the conditions informing this situation. US unemployment slipped to 3.9% in April, a level the Federal Reserve says indicates the economy is operating beyond full employment. Conventional thinking suggests that higher wages should result from such tight labor conditions, but the effect hasn't yet been fully felt. As a result, many economists (and companies) are predicting a spike higher once wage growth is shaken from its dormant state. This will, in turn, put pressure on corporate margins, and hurt profitability for companies unable to lower other costs. Goldman Sachs followed hundreds of conference calls and found wage concerns to be among the most commonly cited worries for corporations. The following are select excerpts from the firm's quarterly Beige Book report, which compiles "anecdotal evidence of fundamental and thematic trends" among S&P 500 companies. Halliburton (HAL) — "Given the level of activity today, there will likely be wage inflation and additional pricing will be necessary for cost recovery." Automatic Data Processing (ADP) — "The underlying inflationary trends with labor costs accelerating a little bit are on an upward trajectory." Fifth Third Bancorp (FITB) — "The number one thing that we’re hearing from our clients is really still the tax law changes, along with rising labor cost." Colgate-Palmolive (CL) — "We do foresee modest inflation given GDP growth, increasing wages and rising commodity costs." Starbucks (SBUX) — "New store profitability in the U.S. remains very strong with year one ROIs of approximately 60%, down somewhat from the expectation we shared at our most recent investor day, primarily due to rising labor costs in urban markets." Darden Restaurants (DRI) — "We continued to see elevated wage inflation of approximately 4% that was only partially offset by the favorability we picked up from pricing leverage and productivity improvements."SEE ALSO: Holding money in cash hasn't been this attractive since the financial crisis — here's why that's a terrible sign for markets Join the conversation about this story » NOW WATCH: Jeff Bezos reveals what it's like to build an empire and become the richest man in the world — and why he's willing to spend $1 billion a year to fund the most important mission of his life
  • US and China call a ceasefire in trade dispute
    'We're putting the trade war on hold,' US Treasury Secretary Steven Mnuchin said Sunday.
  • 'Deadpool 2' dethrones 'Infinity War' with a $125 million opening and breaks single-day box office record for an R-rated movie (FOXA)
    "Deadpool 2" took in an estimated $125 million over the weekend. The movie broke the record for highest-grossing opening day for an R-rated movie with $53.3 million on Friday. "Deadpool 2" proved that the record-breaking success of the original in 2016 was not a fluke as the movie took in an estimated $125 million at the domestic box office over the weekend, according to The Hollywood Reporter. The latest adventure from Marvel's most crude superhero wasn't able to beat the original movie's $132.4 million opening, which will remain the highest-grossing opening weekend of all time for an R-rated movie. But it took in $53.3 million on Friday to break the record for biggest opening day for an R movie, surpassing last year's hit, "It" ($50.4 million). "Deadpool 2" pulled off this performance by living up to the lofty expectations of the franchise that came from Ryan Reynolds' depiction of the Merc With a Mouth in the first movie, who wasn't just a foul-mouthed hitman but was also armed with loads of meta jokes. The sequel didn't just have timely jokes, but more ultraviolent action than the first movie and a whole lot of Easter eggs. That led to the movie earning an 83% rating on Rotten Tomatoes. And it also helped that its studio, 20th Century Fox, put the movie on a whopping 4,349 screens (it was certainly gunning to break the record the first "Deadpool" set, but think the studio is still happy this morning). The performance by Deadpool finally dethroned the top box office performer for the last three weeks, "Avengers: Infinity War." The Marvel title from Disney/Marvel Studios came in second place with $29 million. That puts the movie's domestic total at close to $600 million. And coming in third place with an impressive $12.5 million is Paramount's "Book Club." Geared toward the older crowd with a cast headlined by Diane Keaton, Jane Fonda, Candice Bergen, and Mary Steenburgen, the movie exceeded the $9 million to $10 million industry projections thrown at it going into the weekend.SEE ALSO: All the "X-Men" movies, ranked from worst to best Join the conversation about this story » NOW WATCH: What will probably happen with the North and South Korean peace treaty
  • Hedge fund billionaire David Tepper's latest investing move is the Carolina Panthers
    David Tepper is widely considered one of the brightest minds on Wall Street, leaving many wondering how the hedge fund guru may be using the Panthers as a long-term investment play.
  • 17 things you should never wear to a job interview
    Picking an interview outfit might be one of the more stressful parts of preparing for a job interview. An ideal interview look shows the employer that you're a good cultural fit for the company. What not to wear to an interview includes suits at a laid-back start-up and T-shirts at a law firm. Above all, interview outfits should be unwrinkled, clean, and not revealing.   Your interview outfit should be professional and put-together. It won't necessarily be the most stylish outfit you'll ever wear, but it should communicate confidence and a good work ethic. But the days of absolutely having to wear a suit to a job interview are over, said Marc Cenedella, CEO of recruiting firm Ladders. In fact, rolling up to the office in a suit or skirt suit when everyone else is wearing jeans could hurt you in the interview process. It shows you're not a cultural fit for the company. "Some of the most common mistakes people make when dressing for an interview are following old and outdated advice or not taking the time to do their research and ask questions about the company culture ahead of time," Cenedella told Business Insider. Cenedella suggested reaching out to your recruiter, company contact, or the HR team to get a sense for what people at the company typically wear to work. "You can always be direct and ask 'Will I feel out of place in formal business attire?'" Cenedella told Business Insider. "If they answer 'not at all,' you know it's expected." Regardless of the typical level of dress in the office, some decorum during the interview is still necessary — yoga pants, wrinkled shirts, or ripped denim shouldn't be in your interview wardrobe even for the most casual workplaces. Here are the 17 things you definitely shouldn't wear to a job interview:SEE ALSO: 16 things you should never wear to work — even if you work in a business casual environment DON'T MISS: 28 brilliant questions to ask at the end of every job interview SEE ALSO: How to dress your best in any work environment, from a casual office to the boardroom Anything that's wrinkled or wrinkle-prone Ironing your interview look the night before is a non-negotiable. "Make sure it's clean, unwrinkled, and that you feel that it presents you in the best possible light," Betsy Aimee, a digital content producer who writes on workplace fashion and entrepreneurship, told Business Insider. "People make an assumption about you before you sit down in the seat and start talking."     Something that doesn't quite fit you or is stained That dress that's just a little too tight? Those shoes that have salt stains? You want to wear your best, most-polished clothing to the interview so you can feel confident from the get-go. Don't start off on the wrong foot with clothing that doesn't feel comfortable or look presentable.  Light colors If you're taking public transportation or have a tendency to spill coffee on yourself, avoid wearing light colors, Barbara Pachter, author of "The Essentials of Business Etiquette" and business communications coach, told Business Insider. Stained clothing is the ultimate no-go for job interview looks. Dark colors are the least likely to show stains, and are the safest bet.  See the rest of the story at Business Insider
  • Wells Fargo shares dip after another worrying discovery
    Wells Fargo recently discovered that some workers altered documents about business customers, raising fresh concerns about the embattled bank's internal system of checks-and-balances.
  • Tax cut sparks record-setting $178 billion buyback boom
    President Donald Trump's tax overhaul helped set off a record-setting spending spree by Corporate America -- on shareholders.
  • 9 star lawyers helping blockchain companies navigate the tricky waters of cryptocurrency regulation (SQ)
    Considering bitcoin's origins as a decentralized technology designed to disrupt the world banking system, it's no surprise that the cryptocurrency community has a rather tepid relationship with financial regulators like the Securities and Exchange Commission (SEC).  Meanwhile, alleged cryptocurrency scams like Centra Tech — which the SEC believes raised $32 million in a fraudulent initial coin offering last fall — have done little to help the relationship from the regulator's perspective. Add this complicated background to the fact that the SEC is still developing its official policy on how to regulate cryptocurrencies, and you've got an incredibly vague and shaky legal environment from which to try to run a business. Now, as companies big and small compete for a piece of the cryptocurrency pie, much of the ground work is being done by an invisible force in the C-suite: the general counsel — which is to say, cryptocurrency companies' in-house lawyers. Many of the lawyers on this list have spent their careers in finance law or in-house at other tech companies. One lawyer went in-house just one year after finishing her law degree, while another held senior-level roles across three different presidential administrations before finding his way into the world of bitcoin.  Whatever their experience, these 9 lawyers are helping some of the biggest names in cryptocurrency navigate the shaky and ever-changing landscape of blockchain regulation and compliance.  Here's who you need to know. SEE ALSO: This partner at Sequoia Capital thinks cryptocurrencies and blockchain startups have big potential — and he's investing millions. Brynly Llyr — Corporate Counsel at Ripple Undergrad: Mills CollegeLaw school: University of California, Berkeley Why you should know her: Llyr's career has spanned both tech and finance, making her uniquely qualified to work in cryptocurrency. "I joined Ripple in 2016 for the company's technology and vision," Llyr told Business Insider. "Improving the efficiencies with payments helps real people around the world - many of whom are either shut out of the banking system altogether or are subject to high fees and poor visibility into the payment system." Prior to joining Ripple, she was at PayPal and eBay for a combined total of five years and managed a range of issues from litigation to patents. Before that, she was at a law firm representing both corporate and individual clients in regulatory investigations, among other things.  But one of Llyr's most defining experiences may likely be one that happened before she had a law degree at all. Llyr spent seven years as a project manager and stock broker at Charles Schwab, which gives her unparalleled understanding of the financial systems that Ripple is trying to conquer. Mike Lempres — Chief Legal and Risk Officer at Coinbase Undergrad: Dartmouth CollegeLaw school: University of California, Berkeley Why you should know him: Lempres' career has spanned both public and private sectors, including time in senior government positions under three different presidential administrations. He joined Coinbase in January from a similar role at another blockchain company, Bitnet Technologies. Before that, he was assistant general counsel at Silicon Valley Bank's financial group. "I first heard about cryptocurrencies from friends who were on it very early. Later I was working at a bank that focused on technology companies in the Bay Area, and a few crypto companies were looking for a bank," Lempres told Business Insider. "The space was fascinating to me, and I began to believe it could change the world [...] I still love the technology and the legal art in this space. No looking back!" Lempres also has a less conventional item on his resume — mayor of Atherton, an affluent Silicon Valley town and the most expensive zip code in America, which is home to influential tech billionaires like former HPE CEO Meg Whitman and former Google chairman Eric Schmidt. He still sits on the Atherton city council.  Marco Santori — President and Chief Legal Officer at Blockchain Undergrad: University of California, Berkeley Law school: University of Notre Dame Why you should know him: Santori is likely the crypto lawyer with the most name recognition among his peers — and with good reason. In addition to practicing law, he has been a central figure on the foundation level, helping bring legal clarity to a developing field.  Santori joined Blockchain from Cooley LLP, where he was head of the financial technology group. While he's spent most of his career at law firms, Santori started building a name for himself in crypto around 2013, when he joined the Bitcoin Foundation as chairman of the regulatory affairs committee. He even co-authored the authoritative white paper on Simple Agreements for Future Tokens (SAFT) — a new investment vehicle which has given venture capitalists and other investors a way to invest in blockchain startups outside of the traditional equity model. The SAFT model is used by top investors, like Sequoia Capital's Matt Huang, today.  Read more about how SAFT investments have reimagined venture capital.  See the rest of the story at Business Insider
  • Vacation searches are up, signaling a strong economy and comfort with employment status
    The U.S. economy seems to be on solid footing according to one unusual indicator: vacation searches on the internet.
  • Morgan Stanley has identified 17 stocks that will pay off hugely over the next 3 years no matter what
    Morgan Stanley's equity strategists have been sounding the alarm on the bull market for months, saying an extended period of volatility and weaker returns may be underway. If that's the case, it increases the importance of stock picking. Equity strategists across the firm rated companies they believe will deliver the best returns over the next three years. If "buy and hold" is your strategy, Morgan Stanley has a few stocks for your consideration. Equity analysts across industries recently published a list of quality stocks viewed as good to hold for a three-year period — through 2021, in this case. Morgan Stanley's equity strategists have been sounding the alarm on the bull market for months, warning that an extended bear market may already be underway. If that's truly the case, stock picking will be more important to minimize the damage caused by the worst performing parts of the market. The strategists rated stocks based on their sustainability of competitive advantage, business model, pricing power, cost efficiency, and growth. They didn't simply identify the most undervalued stocks; they also factored in environmental, social, and governance principles to see how companies are running themselves for sustainability in the future. The list below highlights the top 17 of the 30 stocks they identified, with comments from the analysts who cover the stocks.SEE ALSO: An investment chief at a trillion-dollar firm has a wake-up call for anyone who's bullish Accenture Ticker: ACN Market Cap: $105.6 billion Revenue 5-year CAGR (2016-2021 estimates): 9% EPS 5-year CAGR: 11% Price Target: $180 Comment: Accenture is a "beneficiary of shift toward digital and cloud adoption," said Brian Essex, an analyst. "Other positive signposts include (1) commentary from CIOs and the channel that digital/cloud projects are growing in size and scope, and (2) data from consulting firms and vendors that services spending is picking up." Source: Morgan Stanley Alphabet Ticker: GOOGL Market Cap: $105.6 billion Revenue 5-year CAGR (2016-2021 estimates): 18% EPS 5-year CAGR: 18% Price Target: $1,200 Comment: "Investments in cloud/YouTube/hardware are likely to weigh on GOOGL's near-term profitability, upward revisions, and share price outperformance," Brian Nowak said. "That said, we feel that the additional capex/R&D is necessary to take advantage of the large greenfield opportunities ahead (Waymo, Verily,etc.). We are fully supportive of these investments over the long term as they should enable GOOGL to expand its ecosystem and fuel its innovation and monetization drivers." Source: Morgan Stanley Dollar General Ticker: DG Market Cap: $25.14 billion Revenue 5-year CAGR (2016-2021 estimates): 8% EPS 5-year CAGR: 14% Price Target: $122 Comment: "Management's key priorities remain (i) profitable sales growth, (ii) unit growth opportunities, (iii) enhancing DG's position as a low-cost operator, and (iv) investing in people," Vincent Sinisi said. "With in-progress investments behind these initiatives and a supportive 2018 setup, we continue to see a clear pathway for solid long-term returns." Source: Morgan Stanley See the rest of the story at Business Insider
  • Trump wants to roll back banking regulations meant to prevent the type of risky behavior that crashed markets a decade ago
    President Donald Trump and his administration are expected to scale back provisions of the Volcker Rule, which is designed to combat exorbitant risk-taking by banks. Those financial-system excesses were largely blamed for the financial crisis a decade ago. Banks were among the market's biggest gainers immediately after Trump's election victory amid expectations of less oversight. Bank stocks surged following Donald Trump's election victory amid expectations of reduced regulation. Now it looks like the president is ready to follow through. Backed by the Federal Reserve and assorted regulatory agencies, the Trump administration is planning to propose an overhaul to the so-called Volcker Rule, which was intended to clamp down on the excessive risk-taking by banks that many blame for the financial crisis. Originally part of the 2010 Dodd-Frank Act, and named after former Fed Chairman Paul Volcker, the rule has long held a provision stating that positions held by banks for less than 60 days are considered speculative, and therefore not allowed. Trump is instead proposing that banks be the ones to decide whether they're complying, essentially making regulators responsible for challenging them, according to a Bloomberg report. The end result is expected to be a much less restrained trading environment on Wall Street — precisely the type of conditions that allowed risk-taking to spiral so out of control ahead of the last market crash. To better understand what exactly is going on here, consider that, in the mind of regulators, banks should be trading predominantly on behalf of their clients, rather than for themselves. This is a practice called "market making," and the difference between that and so-called proprietary trading — which regulators think is done more with self-interest in mind — has been defined by the duration of the trade. And regulators apparently decided on 60 days as the line of demarcation. According to Bloomberg's report, regulators are also trying to make it easier for banks to stock-pile assets for short-term client purchases, while also loosening compliance requirements for small lenders.  In the end, the looming spectre of less regulation has skeptics worried about banks once again incurring too much risk for their own good. And while that's a sound argument, it's also worth considering that both banks and regulators have learned from their past mistakes, and are wise to the risks of overindulging. Regardless of how it shakes out, bank stocks are the clear beneficiary in the situation. Already up 48% since Trump's election, the KBW Bank Index is positioned to benefit from the double whammy of less oversight and higher interest rates.SEE ALSO: 'Comfort is not your friend' — The stock market's biggest bear explains why the next market crash will be one of the worst ever Join the conversation about this story » NOW WATCH: Why you should never release your pet goldfish into the wild
  • A startup that makes high-tech notebooks crashed and burned on 'Shark Tank,' but business is booming
    Like the "smart" thermostat and doorbell before it, the paper-and-pen notebook has now been upgraded for the 21st century. Rocketbook makes notebooks that let users access their notes on the web. In 2016, the Rocketbook founders pitched the "Shark Tank" judges on investing in the startup — and were rejected by every investor.   Rocketbook, a startup that makes and sells "smart" paper-and-pen notebooks that let users access their notes on the internet, crashed and burned in an episode of "Shark Tank." In 2016, Jake Epstein and Joe LeMay tried to raise $400,000 at a $4 million valuation, and left without a single offer from the show's judges. Now, the founders say it's the sharks' loss. Since the "Shark Tank" episode aired in May 2017, business has been booming. Rocketbook has launched four products and sold over one million notebooks since its founding in 2015. The Rocketbook Everlast, a notebook that wipes clean with water, is Amazon's best-selling wirebound notebook. According to the founders, the company has pulled $10 million in revenue to date. "We've run a wrecking ball through the notebook industry by creating something that's a thousand times more useful than the existing product in that industry," Epstein told Business Insider. Rocketbook's notebooks look like regular binders of paper, and writing in them isn't any more magical. But when you're done taking notes, you draw a check over one of seven icons — such as a star, horseshoe, or diamond — at the bottom of the page and take a photo of the page with the Rocketbook smartphone app. The app edits the photo for brightness and clarity and sends your notes to whatever cloud-based service you choose. You might want notes marked with a four-leaf clover to go straight to your Google Drive, while notes designated with a diamond arrive in your spouse's inbox. Some of Rocketbook's products are even reusable. When you write in the Rocketbook Everlast ($34) using any pen from the Pilot Frixion line, the ink erases with a damp cloth. That's because the notebook's pages are made from a polyester composite rather than wood. The Rocketbook Wave ($27) zaps notes away when you heat it in the microwave, though it can only be nuked up to five times. Both notebooks use patent-pending technologies that the founders would not reveal — not even to the sharks. How to swim with the sharks and not get eaten According to Epstein, the "Shark Tank" producers found Rocketbook on their own. They invited the founders to apply to be on the show and flew them from Boston to Los Angeles. Epstein said he and LeMay prepared for the show's taping by watching episodes of "Shark Tank." They wrote on index cards every type of question asked, and scribbled responses on the backs. When they arrived in Los Angeles, they walked with their heads buried in the index cards. "We had a stack of index cards — I kid you not — five inches deep," Epstein said. During the taping, the sharks peppered the founders with questions for about an hour. They talked over each other and interrupted the founders. In a word, it was "chaos," Epstein said. Mark Cuban said the idea was crazy. Barbara Corcoran called it a gimmick. Kevin O'Leary, another "Shark Tank" investor, suggested the founders were out of their minds to make a product that claims to be reusable. He asked how they intended to make money. "The only reason I'm microwaving this book is to erase it, so I don't have to buy a new one. What's the matter with you guys?" O'Leary asked. "Don't you want to sell a second book?" By then, Rocketbook had already shipped 75,000 notebooks to crowdfunding backers and other customers. The founders told O'Leary that customers buy more notebooks because they like the Rocketbook system — that it sorts and preserves their notes where they can access them remotely. Epstein actually got the idea for Rocketbook after leaving behind some important notes. He was working as a sales executive at Salesforce at the time and was pitching another executive at a mid-sized company to buy Salesforce's products. Epstein prepared extensive notes for the meeting. "I reached into my bag to grab my notebook, where I had prepared pages and pages of notes to add value to this meeting. I pulled it out," he said, "and I had the wrong notebook." He wasn't broken up about walking away from "Shark Tank" empty-handed. One month before the episode aired, Rocketbook raised over $2.5 million in a crowdfunding campaign for the Rocketbook Everlast, making it the most funded office supply product in Kickstarter history.SEE ALSO: This founder went from scooping ice cream to running a $250 million startup that caters lunch for Salesforce, BuzzFeed, and Fandango — here's how he did it Join the conversation about this story » NOW WATCH: 'Shark Tank' star Barbara Corcoran shares her keys to making a good first impression
  • An investment chief at a trillion-dollar firm has a wake-up call for anyone who’s bullish
    Northern Trust Wealth Management recently downgraded its forecasts for the US economy. The investor doesn't expect a recession but says the benefits of tax reform will likely be front-end loaded and may benefit capital markets more than economic growth. "We downgraded our growth forecast for the US, developed ex-US, and emerging markets because we think expectations have perhaps gotten a little bit ahead of reality," Katie Nixon, the chief investment officer at Northern Trust Wealth Management, told Business Insider. The Trump bump for the US economy may soon flatten. Like many other investors, Northern Trust Wealth Management — which has $287 billion in assets under management — had taken the view that tax cuts and other policies would inject more fuel into the US economy. The firm oversees $1.2 trillion overall.  But at a meeting last week the firm downgraded its views, saying that a year from now the economy may not live up to the lofty expectations. In that sense, it's a wake-up call for investors with rosier outlooks than theirs. Business Insider recently spoke with Katie Nixon, the chief investment officer at Northern Trust Wealth Management, about why the unit changed its views on the economy and how it's positioned to benefit from this forecast.  Interview condensed and edited for clarity. Akin Oyedele: You recently downgraded your US outlook. Why? Katie Nixon: For several years, we had been thinking the US economy would surprise to the upside. Last year the market went up so much but we weren't too surprised because it was doing a little bit of catch-up to a scenario that we had seen unfolding, which was good growth propelled by tax reform. When we met last week, though, we thought, "What is this going to look like a year from now as we look back?" And right now, there's probably room for a little bit of disappointment relative to expectations. So we downgraded our growth forecast for the US, developed ex-US, and emerging markets because we think expectations have perhaps gotten a little bit ahead of reality. Clearly, here in the US, we're very late in the economic cycle. We do have the Trump tax-reform tailwind, but that dissipates over time, and we're seeing some offsets in the form of a stronger dollar and higher oil prices. And clearly we're seeing some disappointments across Europe, including some of the data we got on Monday and Tuesday, which suggest that Europe is not firing on all cylinders yet. We do have the Trump tax-reform tailwind, but that dissipates over time, and we're seeing some offsets in the form of a stronger dollar and higher oil prices. We see, in China, a managed slowdown, a deliberate emphasis on the quality of growth over quantity, which should be welcome to investors, but, from a macro perspective, certainly represents a slowdown. That will impact not only emerging Asia but probably Europe. We took our growth forecasts down for all those reasons. Similarly, we don't think inflation is going to be an issue across any of these regions. We've had a durable theme of "stuck-flation" for a couple of years now, and that theme persists. Everyone's waiting with bated breath for inflation to show up, and it just hasn't, even this late in the cycle with unemployment at 4%. Because of the former discussion on growth and inflation, we think the Fed's going to be probably a lot more patient than the market expects. Oyedele: How have these views affected your portfolio? Nixon: The change in our tactical portfolio was relatively modest. Intuitively, if our base case is that the Fed will be slower, that growth may disappoint, and that inflation remains benign — which is a bit out of consensus right now — then a 10-year Treasury at 3% probably represents a pretty good deal. We actually took some cash off the sidelines — 2% cash — and reinvested it in investment-grade bonds, thinking that the market has gotten ahead of itself in terms of expecting a more aggressive rate-hike path than we think. So we moved out of cash into fixed income. We didn't touch our risk assets or our equity assets because the kind of environment that I describe — low inflation, accommodative central banks, and modest positive growth — is pretty good for stocks. Oyedele: Given the outlook, are there any other specific parts of the market you think are attractive right now? Nixon: As I mentioned, we still like risk. We like equities quite a bit right now. We're overweighted in developed ex-US and emerging markets in particular. We're fairly equal-weighted in the US right now, recognizing that the US has been the best-performing market for quite some time, and recognizing that valuations are a little bit more reasonable in developed ex-US and in emerging markets, and both of those are much earlier in their economic cycles than the US. The big trade that we saw last week was, given the move in the bond market, increasing our allocation to bonds consistent with our views that the Fed will have to be a lot more patient. Unfortunately, when you look across the capital markets right now, there's not necessarily a fat pitch to be had. We moved out of cash into fixed income. Oyedele: If you were to do a temperature check of the economy based on your conversations with clients, what does that look like? Nixon: Many of them are business owners, so they really have their finger on the pulse of what's going on outside of the ivory tower. They're feeling really good. They're seeing the benefits of, in particular, the tax reform, which is a direct and immediate benefit in terms of lowering their tax rate and increasing their earnings, and certainly their cash flow. We also have clients who are C-suite executives. These are clients that are running publicly traded companies. Of course they are seeing very good trends in their businesses. But I think the interesting thing is in terms of what they're doing with the tax largesse. There seems to be a bit of reluctance to over-invest right now. You see a lot of stock buyback and balance-sheet activity as a function of the tax reform, but we've seen a bit of hesitancy around the capex cycle that everyone's waiting for. In terms of structuring their businesses for the expectation of much higher growth into the future, we're not quite seeing that. Maybe it's a delayed reaction and it's sort of a wait-and-see approach, but that's what we're hearing from clients. Across the board, what clients worry about is inflation. These are folks who have experience in living through inflationary environments. And finally, the worry that I hear most commonly across our client base is the ultimate impact of increasing debt and deficits and what that might mean to growth and interest rates. Oyedele: When you say debt and deficits, is that at the federal level? Nixon: Yes. Actually, I had a client meeting yesterday, and there was head-scratching going around the table of people saying, "The bond market doesn't seem to be too concerned about the long-term impact of some of the fiscal policies that are being enacted right now." If there were more broad-based concern about this, you would expect to see a much higher Treasury yield than we see right now. And so the market seems to be sending a very strong message that it's not going to be an issue. Start saving and enjoy the eighth wonder of the world, which is compound interest. Oyedele: What advice would you give someone starting their career in terms of best practices to thinking about money, wealth preservation, and investing? Nixon: This is going to be such a simple answer, but it's the most powerful answer I can give, and that is, save as much as you can as early as you can. Start saving and enjoy the benefits of the eighth wonder of the world, which is compound interest. Recognize your long-time horizon and save and invest accordingly. We work with a lot of multigenerational families, and when we're talking to some of our younger clients, who are 19 and 20 years old, we give them this advice: Don't be afraid to invest. Markets don't go up every year, but, over time, they do go up. Form a habit and keep investing over time, and recognize that people who are young right now potentially could live well past 100 years old.SEE ALSO: 'There isn't really fear out there': Citigroup's equity chief explains why investors are complacent Join the conversation about this story » NOW WATCH: I ate nothing but 'healthy' fast food for a week — here’s what happened
  • Mifid reforms spur companies seeking investors to bypass brokers
    Requirement to charge for arranging ‘access’ leads some to ditch middlemen
  • The contrast between Tesla and the rest of the auto industry is terrifying (TSLA, GM, F, FCAU, RACE)
    Some think that Tesla is a tech company, but its main product is cars, so it effectively exists in the auto industry. For years, auto sales have boomed in the US and automakers have raked in profits while Tesla has lost billions. Unless Tesla reverses this trend, it won't be able to weather a downturn when sales drop and profits vanish. Optimism and skepticism about Tesla's future are in an all-out war. Those who are bullish on the 15-year-old maker of sexy all-electric cars are doubling down on their bullishness and support for CEO Elon Musk. Those who are bearish are predicting a bankruptcy in the next year, as Tesla burns through all its cash and fails to convince new investors to fund its monumental losses (something like $20 billion for the life of the company). Tesla, at base, is an automaker. But unlike other automakers, Tesla is valued like a rapid-growth tech firm and avidly followed by the same enthusiasts who might consider social media, fintech, and cryptocurrencies to be their passion.  Meanwhile, there's a traditional auto industry that after being pummeled by the financial crisis has come roaring back since 2010. The four old-school companies that I follow closely — General Motors, Ford, Fiat Chrysler Automobiles, and Ferrari — are awash in cash and profits and have been raking it in for literally years.  One salient statistic: both GM and Tesla staged IPOs in 2010, but since then Tesla has never posted an annual profit, while GM has made over $70 billion. The stock of GM and Ford has performed poorly relative to the overall markets, and since 2010, Tesla has massively rewarded risk-taking investors. Since its own IPO in 2014, FCA shares has rallied strongly, up almost 275%, while following Ferrari's spinoff from FCA and its 2015 IPO, stock in the Italian supercar brand is up 140%.  Those returns have been relatively riskless, while Tesla's certainly haven't. And even if you bought Ford and GM expected better results, both companies have compensated investors with robust dividends and stock buybacks. Tesla bulls will tell you that to properly understand the potential of the company, you have to rearrange your thinking. Musk is a disruptive visionary; the cars are rolling computers. That's fine for a jazzy storyline, but Tesla's struggle isn't related to its narrative — it's falling short on fundamentals, such as being able to effectively build a mid-size sedan in the Model 3. Any other established carmaker could crank out hundreds of thousands in short order, but Tesla spent a closely watched year trying to manufacture a few thousand per week. So let's take a closer look at how Tesla is terrifyingly different from a regular car company:FOLLOW US: On Facebook for more car and transportation content! Tesla vs. GM There are three major differences between Tesla, which sold 100,000 vehicles in 2017, and GM, which sold 10 million. The first is leadership. GM CEO Mary Barra is the best in the business. Her laser focus on maximizing the carmaker's return on invested capital has yielded quarter after quarter of profits. She's now arguably the best CEO GM has ever had, surpassing even mid-20th-century management genius Alfred Sloan. The second is scale. To sell 10 million vehicles worldwide in a year, you have to be good at building them. What Tesla considers to be an ambitious production target at its single factory (ironically, once jointly operated by GM and Toyota, another global juggernaut) in California — 5,000 Model 3's per week — is a rounding error to GM. GM could have achieved and surpassed Tesla oh-so-obsessively monitored objectives in a few months at most. The third is speed. Everybody thinks Tesla is a fast-company Silicon Valley operation, but the carmaker is, in fact, agonizingly slow. It's been years between reveals of new vehicles and their actual appearance in the market. The Model 3 is no exception. A launch in mid-2017 led to just a few thousand cars delivered by the end of the year. GM, on the other hand, revealed and launched its Chevy Bolt long-range EV in about a year, start to finish. It's been on sale in the US since fall of 2016. And nobody obsessively followed its rollout. It ... just ... happened. Right on schedule. Tesla vs. Ford With a management shakeup last year that led to the ouster of then-CEO Mark Fields and his replacement with a more visionary personality in Jim Hackett, Ford has clearly been looking to emulate Tesla's Wall-Street-attractive story. But Ford also makes the bestselling vehicle in the US, the F-150 pickup truck. This thing can be mass-produced in absolutely staggering volumes and has been selling nearly a million units annually. And although it isn't priced anywhere near what Tesla charges from its Model S and Model X luxury vehicles, the F-150 throws off huge profit margins.  The F-150 can witness sales dips, but for the most part, it's nearly an invulnerable product. Ford can always count on it, like an insurance policy. Tesla, by contrast, has probably topped out in its luxury segment and now has to pull off a potentially impossible stunt: sell hundreds of thousands of electric sedans to a market that has shown limited interest in EVs (they're only 1% of the global market) and that ... doesn't want sedans. The four-door is dying. FCA has given up on them in the US, and Ford is heading in that direction. GM will likely make the shift in the next year. Ferrari doesn't sell them. Tesla has promised to bring a crossover SUV, the Model Y, to market in the next few years, but at the moment it has no place to build the vehicle. That leaves Tesla trying to make the Model 3 into its F-150. And that's just not going to happen. Tesla vs. FCA Like Tesla, FCA has an outspoken CEO in Sergio Marchionne. But unlike Musk, Marchionne is an accountant by training and understands the biggest risks to a carmaker: debt and cash burn. Since taking over Chrysler after a government bailout and bankruptcy, Marchionne has focused on making the Jeep brand a profit-minting beast and maintained the RAM pickup brand's number-three-market position behind Ford and Chevy/GMC.  This has generated the cash flow that he needs to pay down FCA's debt and to bolster the carmaker's cash balances. It's actually not that complicated. He inherited a ruined balance sheet, but one that was getting a fresh start. And he has done what's needed to transform it into a fortress. Over the past two years, FCA shares have outperformed Tesla shares by 200%. So which was the better "growth" investment? (And that outperformance took place, shockingly, even after FCA spun off Ferrari, which represented a huge chunk of value in the company.) The big difference between Tesla and FCA is that the former has been run like a Silicon Valley casino that has somehow staved off functional insolvency thanks to treating Wall Street like an ATM, while the latter has been run like the tightest ship in the industry, based primarily on well-defined financial goals that have all been met. If you were looking for a CEO to run Tesla in the event that it, too, goes bankrupt and Musk is deposed, Marchionne would be first on your list.   See the rest of the story at Business Insider
  • How much it costs to rent in 28 Manhattan neighborhoods, ranked from the least expensive to the most
    The cost of living in Manhattan is more than double the US average. The NYC cost of living is so high partly due to its exorbitant housing market — the average rent for a Manhattan apartment is $3,667. RENTCafé broke down the average rent for different Manhattan neighborhoods, and we ranked them from most to least affordable, from SoHo to the East Village. City life comes with a lot of dollar signs — especially in Manhattan. The cost of living in New York City is at least 68% higher than the US average, according to SmartAsset. If you think that's a lot, the cost of living in Manhattan specifically is more than double the national average. At the center of it all is New York City's high-cost housing market. Asking rents in New York City increased by 33% from December 2009 to June 2017 at roughly 3.9% a year, reports StreetEasy. And while the NYC rental market has seen declining prices this year, the average rent for an apartment in Manhattan remains exorbitant at $3,667 — a 10% decrease compared to $4,085 the previous year. To put things in perspective, that's only a few hundred dollars shy of the typical US worker's average monthly income of $3,895. That number is even more shocking considering that the average size for a Manhattan apartment is only 703 square feet. Even then, some neighborhoods in Manhattan are notoriously more expensive than others. Rent in Battery Park City, for example, is 52% higher than the Manhattan average. To highlight such differences, RENTCafé broke down the average rent in Manhattan neighborhoods for all rentals, one-bedroom apartments, and two-bedroom apartments. Using this data, we narrowed down the top 28 Manhattan neighborhoods according to the largest number of rental units overall (in apartment communities of 50 units or larger), which was provided by Yardi Matrix. Scroll through below to see which Manhattan neighborhoods have the highest average rent, ranked from the least expensive to the most, from SoHo to the Upper East Side.SEE ALSO: Inside New York City's hidden neighborhood where Wall Street big shots, celebrities, and billionaire heirs mingle DON'T MISS: These are the priciest homes for sale in New York City 28. Washington Heights All rentals: $2,176 One-bedroom: $1,980 Two-bedroom: $2,777 Number of rental units: 1,000–1,500     27. Roosevelt Island All rentals: $3,379 One-bedroom: $3,211 Two-bedroom: $3,558 Number of rental units: 1,200–2,000 26. East Harlem All rentals: $3,412 One-bedroom: $3,258 Two-bedroom: $3,471 Number of rental units: 1,700–2,500 See the rest of the story at Business Insider
  • Stocks are 'coiling for a break higher'
    The S&P 500 has formed a bullish triangle pattern that's setting it up for a break higher, according to David Sneddon, Credit Suisse's global head of technical analysis.  The index's recent sideways trading is a result of the overbought conditions that prevailed earlier this year.  Market breadth and volume gauges are also improving, Sneddon said.  Study a chart of the S&P 500, and it will show that stocks are on the brink of a big move higher. That's according to David Sneddon, Credit Suisse's global head of technical analysis. This may not seem apparent now that stocks are going nowhere. After spiking into the new year and entering a correction in February, the S&P 500 is trading in a tight range. The frenetic period when the major indexes hit new highs on an almost daily basis are no more; Monday is the 73rd day since the S&P 500 rose to a new record.  Sneddon says this sideways trading activity is a result of the overbought nature of the market just a few months ago.  "We have consistently maintained the view that the sideways consolidation in the US equity market has been consistent with the construction of a potential large bullish 'triangle' continuation pattern," Sneddon said in a note on Thursday.  Another "clear positive" for the S&P 500 is that it has rebounded from its 200-day moving average after closing below it in April for the first time in nearly two years. When the index falls below this trend line — or worse, if it closes below — it's considered a bearish indicator of a change in the market's direction.  But so far, the 200-day moving average has mostly served as a key support level, or floor, for stocks. Meanwhile, the S&P 500 has broken out of its falling 63-day moving average, as the chart below shows.  "With market breadth measures and volume finally starting to improve, we may be on the cusp of seeing these bull 'triangles' confirmed, for a resumption of the core bull trend," Sneddon said.  The triangle pattern that's formed represents the coil Sneddon refers to. As prices fluctuate between two trend lines, the battle between bulls and bears intensifies, setting up for a possible bullish break out of the triangle.   "Key now is the downtrend from the January peak and April high, today seen at 2711 and 2717 respectively," Sneddon wrote. "A close above here should confirm a bull 'triangle' is completing, turning the trend higher again with resistance then seen back at 2800/02. Through here can expose the 2873 current record high, and eventually we think the psychological 3000 barrier." SEE ALSO: Wall Street is in danger of being ambushed by a powerful force brewing in the US economy, Franklin Templeton says Join the conversation about this story » NOW WATCH: Why so many fast food logos are red
  • Correlation Between SPX And VIX
    In January, many traders noticed that there was a divergence between SPX and VIX. It’s true if we look at the price series. Graph below shows the 20-day rolling correlation between SPX and VIX prices for the last year.
  • The mysterious story of former Theranos president Sunny Balwani, who former employees saw as an 'enforcer' and the SEC charged with fraud
    During the rise and fall of Theranos, one of the company's top executives stayed mainly out of the spotlight: its then-president Sunny Balwani.  Not much is known about Balwani, who Wall Street Journal investigative reporter and author of "Bad Blood" John Carreyrou found was in a romantic relationship with Theranos founder and CEO Elizabeth Holmes during the time he was at the company.  In his new book, Carreyrou details the role Balwani played in the company's culture as the "enforcer," as well as its downfall.  Throughout the saga of Theranos, the embattled blood testing company that came under fire in 2015 over the accuracy of its blood tests, one key figure remained out of the spotlight.  While Theranos founder and CEO Elizabeth Holmes countered claims at conferences and in TV interviews, the company's president and chief operating officer — and Holmes' romantic partner for a time — Sunny Balwani stayed a mystery.  Wall Street Journal investigative reporter John Carreyrou explores the role Balwani had in the company's dealings and the relationship he had with Holmes in his new book "Bad Blood: Secrets and Lies in a Silicon Valley Startup." As Carreyrou saw it, Balwani was as integral to the Theranos saga as its founder and Holmes was.  The relationship — which itself stayed out of the headlines throughout the setbacks and scrutiny Theranos faced — was one of the reasons Carreyrou knew he had a big story on his hands. In 2015, Carreyrou said he read a New Yorker interview with then-Theranos board member Henry Kissinger. Kissinger said in the interview he tried to set Elizabeth up on dates, not realizing that she was in a relationship.  "It instantly became clear to me that she was lying to her board about this romantic relationship that she was having with the number two of the company, who by the way, was also about 20 years older," Carreyrou told Business Insider. An almost non-existent internet presence Balwani and Holmes met in Beijing on a trip through Stanford University's Mandarin program the summer before Holmes went to college. While there, the two struck up a friendship. While it wasn't clear when Balwani and Holmes became romantically involved, it appears to be around the time she dropped out of Stanford to start Theranos. Balwani's background was in technology, after moving to the US in 1986. He had worked as a software engineer at Microsoft and Lotus before joining a startup called right before the dot-com bubble and later becoming president and chief technology officer. The company was acquired, and Balwani walked away with $40 million months before the bubble popped and the company went bankrupt. Balwani owned a Lamborghini Gallardo and a Porsche 911 with vanity license plates.  But Google the name "Sunny Balwani," and apart from recent reports about his SEC charges related to Theranos, there's not a whole lot about the man's past. An image search mainly pulls up photos of Holmes instead. For someone who had been part of the tech industry for so long, Balwani didn't leave much of a digital footprint. It led sources Carreyrou talked to to suspect that he may have wiped himself from the internet.  "It doesn't make sense. You would've appeared somewhere, at some time and gotten your photo taken," Carreyrou said.  'The enforcer' Balwani came into the role of president in 2009. After getting in contact with an insider at the company at the beginning of his reporter, Carreyrou quickly realized Balwani played an important role in the day-to-day life of the company. "In that first phone call, which was an hour long, [my source] made very clear to me that they were running this thing as a partnership, and that Sunny was kind of the enforcer and Holmes' older boyfriend," Carreyrou said. "He painted the portrait of this fraud being run by a couple." While Holmes served as the figurehead, Balwani stayed behind the scenes, "terrorizing everyone," Carreyrou said.  For example, Balwani took it upon himself to keep track of how long employees were working. In one encounter, Balwani brought up security footage that showed a software engineer only working an eight-hour day. He told the employee, "I'm going to fix you." The engineer promptly resigned and left the building, even as Balwani sent a security officer to try and stop him. Balwani then called the cops on the employee.  "A lot of my ex-employee sources, who for the first year was speaking to me on the background, were traumatized by what they experienced at Theranos," Carreyrou said. "It was like a mind-warping sort of experience." Balwani left the company in May 2016 after 7 years at the company. He now awaits potential charges from the Department of Justice, and has been charged with "massive fraud" by the Securities and Exchange Commission.SEE ALSO: Theranos appears to be running out of money — here are the investors who stand to lose the most Join the conversation about this story » NOW WATCH: BlackRock's $1.8 trillion bond chief shares an epiphany he had that reshaped his entire economic outlook
  • An investor who helps manage money for the super-rich has a simple tip for building wealth, and you can start doing it today
    Saving early and consistently is the most powerful financial advice for young people offered by Katie Nixon, the chief investment officer at Northern Trust Wealth Management.  Starting early helps savers take advantage of compound interest, which basically means letting both the balance and older interest payments earn even more interest over time. It's costly to start late and then try to play catch up. It's just two words: compound interest.  Understanding the power of this concept, and more crucially, putting it to work by saving, is crucial to building wealth over time, according to Katie Nixon, the chief investment officer at Northern Trust Wealth Management, which has $287 billion in assets under management. The firm's clients include 20% of Forbes' 400 wealthiest Americans, private businesses, and individuals.  Savings accounts are important for the inevitable rainy day and because they earn free money in the form of interest. And that's where compound interest comes in. Basically, leaving a savings account to grow over time ensures that interest is earned not just on the balance, but on old interest that's already been earned. Recognizing how powerful this concept is in the long run is the best advise for a young person figuring out their finances, according to Nixon.  "It's the most powerful answer I can give, and that is, save as much as you can as early as you can," Nixon told Business Insider when asked her advice to someone starting their career. "Start saving and enjoy the benefits of the eighth wonder of the world, which is compound interest." The chart below shows the power of compound interest through three hypothetical people who started saving at various stages of their careers. It assumes that each person except the third (more on that in a second) put aside $100 monthly in an account with a 3% interest rate.   Clearly, the person who started earliest, at age 25, had the most cash by the time they were 65. It also shows that it is costly — now and at retirement — to start late and play catch up; the person who started at 40 and saved twice as much fell behind the person who started earliest.  What about the stock market?  Investing in stocks is riskier than piling on cash — but it's a risk worth taking, Nixon said. "We work with a lot of multigenerational families, and when we're talking to some of our younger clients, who are 19 and 20 years old, we give them this advice: Don't be afraid to invest," she said. "Markets don't go up every year, but, over time, they do go up. Form a habit and keep investing over time, and recognize that people who are young right now potentially could live well past 100 years old." Warren Buffett, the most famous investor of this era, recommends keeping things simple, especially for people who aren't sure where to start.  "My regular recommendation has been a low-cost S&P 500 index fund," Buffett, the chairman of Berkshire Hathaway, said in his 2016 letter to shareholders. Such an exchange-traded fund (ETF) would move in lockstep with the S&P 500, and spread the risk of betting on a handful of companies. SEE ALSO: Morgan Stanley has identified 17 stocks it says will pay off hugely over the next 3 years even if the bull market ends Join the conversation about this story » NOW WATCH: Ian Bremmer: Why the American dream doesn't exist anymore
  • How To Avoid Leverage Risks In Small Caps (EES)
    From WisdomTree: A relative bright spot amid a challenging start to 2018 for U.S. equities has been the performance of small caps: The Russell 2000 Index’s 4.65% return is an advantage of more than 180 basis points (bps)over the 2.82% return of the S&P 500… Read more ›
  • What’s Keeping Gold Down? (GLD)
    From Streetwise Reports: Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, reflect on market factors that are driving current fluctuations in the gold price. For nearly four months now, gold has been pressured lower by a rising dollar; the… Read more ›
  • Stagflation Remains A Major Risk For U.S. Economy
    From Adem Tumerkan: There’s been a lot of talk lately about the dollar and the United States’ economy. I don’t think people realize how the latest ‘growth’ the U.S. has had is superficial – all thanks to a weaker dollar.… Read more ›
  • Focus On The Future With ETFs, Not The Past (QUS)
    From David Fabian: Some of my favorite posts are spawned from readers asking questions that challenge my thesis in one way or another.  Often, it’s the result of decisions or preferences that don’t conform to their methods of analyzing investments. … Read more ›
  • 10-Year Treasuries Remain Above Key 3% Level (TLT)
    From Jill Mislinski: Let’s take a closer look at recent activity in US Treasuries. The yield on the 10-year note ended Friday at 3.06% and the 30-year bond closed at 3.20%. The 2-10 yield spread is now at 0.51%. Here… Read more ›
  • The market is doing something most investors have never seen in their lifetime — and could be foreshadowing the next crash
    Stock and bond investors alike have become accustomed to historically long bull market cycles, to the point where disruption could catch them flat-footed. One Wall Street firm has issued an ominous forecast that, if it comes to fruition, could derail both bull runs in one fell swoop. Since 1981, Treasury yields have pretty much gone in just one direction: down. The result has been one of the most awe-inspiring bull markets in the modern era — one spanning more than three decades. But the party may be over for Treasury bulls, who profit from lower yields because of the inverse relationship they have with bond prices. This can be seen in the 10-year Treasury yield, which bounced off a record low in 2016 and has recently shown signs of a sustained move higher. Macquarie, for one, thinks the bond market's stretch of strength is in its final innings. The firm forecasts the 10-year yield — currently trading just above 3% — will approach 4% over the next 18 months. Many Wall Street experts have highlighted such an increase as problematic to the continued health of the stock market, which is locked in a historically long bull market of its own. The thinking is that as bonds get more appealing, stocks will lose luster by comparison. To make the situation even more ominous, the majority of investors aren't old enough to remember the last time Treasury yields were climbing, which could leave them unprepared for the fallout. After all, once you've become so accustomed to one set of circumstances, it can be tough to break free from conventional thinking. "Most market participants have only ever seen yields move lower during their working lives," a group of Macquarie strategists led by Ric Deverell wrote in a client note. "While the outlook for interest rates is highly uncertain, we feel that the bull market is over. The increase will be driven by the slow withdrawal of central bank financial repression and an increase in estimates of the real neutral rate as the long tail of the crisis begins to fade." Macquarie isn't alone in its concern. Morgan Stanley says that three months after Treasury yields peak, stocks do the same, which means it's all downhill from there. The firm even made the preemptive move of cutting its net equity exposure in half. Bank of America Merrill Lynch has weighed in as well, arguing that a Treasury yield move above 3.6% will spur a massive reallocation from stocks into bonds. It's part of a broader concern floated by the firm pertaining to investor cash levels. BAML predicts widespread weakness in risk assets once cash holdings drop below where they are now — and pressure from yields represents one of multiple factors that could complicate matters. A separate analysis from BAML shows stocks may be already losing their luster relative to Treasurys with nearer-term maturities. This past week, the 3-year Treasury yield (1.90%) rose above the benchmark S&P 500's dividend yield (1.89%) for the first time since 2008 (see below).  In other words, holding money in safe, cash-like assets like Treasurys is now a competitive alternative to stocks for the first time since the financial crisis. All of the factors outlined above would seem to suggest an imminent reckoning in stocks. At the very least, they should offer a wake-up call for equity investors who have become so accustomed to easy returns. SEE ALSO: Morgan Stanley just issued an ominous forecast for the rest of 2018 — and it should have traders worried that markets are peaking Join the conversation about this story » NOW WATCH: Jeff Bezos on breaking up and regulating Amazon
  • America beware: dollar supremacy is not forever
    Under Trump, the US is increasingly seen as an unreliable partner
  • Oil market bulls walk fine line as $80 crude hits demand
    Italian politics and the euro, EM sell-off and US yields’ impact on Europe also in focus
  • Two trends propping up economic growth in Britain have suddenly reversed as more consumers realise the damage from Brexit is permanent, not transient
    The UK savings rate suddenly looks like it is going to go up. That's because Brits are not taking on new debts. Credit Suisse argues that consumers were willing to tolerate the short-term negatives of Brexit, but they are not going to finance the long-term. People are "realizing that the damage to their real incomes from the Brexit vote is permanent, not transient," CS says. None of this looks good for economic growth. British consumers have stopped taking on more debt and started saving their money again, in a sudden reversal of two trends that propped up economic growth in Britain over the last year. If the trend continues — and Credit Suisse analysts Neville Hill and Sonali Punhani told clients recently they believe it will — it will hurt one of the main drivers of GDP growth in the UK: consumer spending. Since the EU Referendum of 2016, Brits have done two things with their money: Go shopping on credit, racking up debt. Reduce their monthly saving to historic lows. That has kept a rising tide of consumer cash washing through the economy. But the tide is about to turn, Hill and Punhani say. "We increasingly judge that the UK consumer is retrenching and rebuilding its saving rate, having allowed it to plummet in the wake of the Brexit vote. That retrenchment may be due to consumers ... realizing that the damage to their real incomes from the Brexit vote is permanent, not transient." Here is their first piece of evidence: The rate of household savings has climbed again recently, after hitting sudden record lows. That might imply that consumers want to start saving again, after two years of not really caring: The second piece of evidence is what's happening to consumer debt. In the post 2008-era, consumers made a yearslong push to reduce their debts. That changed in 2016, when consumers seemed to become a bit more relaxed about taking on credit, and household debt levels went up again. But over the last couple of months, the Credit Suisse team argue, Brits have suddenly gone shy of debt again: Taken together the two sudden changes suggest that consumers are frightened of the future, and want to hoard cash and get rid of their liabilities to others. The obvious consequence of this is that consumers are spending less. As Business Insider noted on May 10 and April 29, consumers have pulled in their horns and retail sales have gone down. Brexit had an unusual effect on the UK economy: It lowered the value of the pound, suddenly making everyone poorer Brexit has had an unusual effect on the UK economy. It suddenly lowered the value of the pound, driving inflation, which raised prices faster than wages and made everyone poorer. The CS analysts believe consumers were willing to tolerate that if it only lasted a short time. And the rise in debt was more of an affect from rising interest rates and shrinking real incomes (the actual value of the money you keep after inflation has been accounted for), not consumers' willingness to blow out their credit cards and overdrafts. But now, Hill and Punhani say, consumers seem to believe that the post-Brexit period of weakness in income growth isn't temporary. It's permanent. "That’s important, as it suggests that the shift from household de-leveraging to re-leveraging in the last few years was a consequence of the shock to household incomes after Brexit rather than a decisive change of behaviour on the part of households. Once again, the performance of borrowing and savings in 2016-17 looks peculiar and anomalous. "... But the squeeze on real incomes has not reversed, or proved temporary. As that becomes apparent, the risk is that they reverse that unusual and excessive cut in the savings rate, and seek to resume the process of deleveraging," they wrote in a recent research note. They regard this as an "underlying domestic weakness in the UK." "That would be significant. Despite a modest pick up in real household disposable income growth, a rising savings ratio would imply poor consumer spending and provide a headwind to overall UK growth," they say.SEE ALSO: The UK's 'credit impulse' just went sharply negative, and that explains why the Bank of England did not raise interest rates today Join the conversation about this story » NOW WATCH: Here’s what is keeping stocks from completely crashing with the 10-year above 3%
  • Investors scruntinise the weak links in Emerging Markets
    Higher US bond yields and dollar apply pressure to countries with large debts
  • Since the Q4 2017 issue was published, these companies have returned between 7.8% and 48%!
    It has been claimed that value investing is dead, and the value principles that helped make Warren Buffett his first $1 million, no longer apply. Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should […] The post Since the Q4 2017 issue was published, these companies have returned between 7.8% and 48%! appeared first on ValueWalk.
  • PayPal's $2.2 billion acquisition of Swedish card terminal startup iZettle makes perfect sense — and Square should be worried (PYPL, SQ)
    PayPal is buying the Swedish card-reading startup iZettle for $2.2 billion. The deal looks expensive at 20 times revenue and double iZettle's expected initial-public-offering valuation. But iZettle's in-store offering complements PayPal's online prowess and gives PayPal a much more powerful sales pitch to take to businesses. PayPal plans to roll out iZettle to new international markets, and this is likely to include the US — that is bad news for Square, which has only really competed with iZettle in the UK. LONDON — PayPal surprised many industry observers Thursday with a $2.2 billion deal to buy the eight-year-old Swedish card terminal company iZettle. The deal is PayPal's largest acquisition and comes less than two weeks after iZettle announced plans to go public. The Financial Times reported at the time that iZettle could seek a valuation of $1.1 billion in an initial public offering, suggesting a huge premium on PayPal's offer. The sale price is just over 20 times iZettle's 2017 revenue, and the company is loss making. Thomas McCrohan, an analyst at Mizuho Securities, said in a note to clients on Friday: "We do not believe this was the acquisition shareholders were anticipating [and] the price paid appears expensive." So why did PayPal think iZettle was worth it? For PayPal, which was spun out of eBay in 2015, the deal makes perfect strategic sense. PayPal is traditionally more dominant in online and mobile payments, while iZettle produces card terminals that allow small businesses and sole traders to take affordable card payments. The deal means PayPal will suddenly gain an in-store presence in 11 new markets: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain, and Sweden. As well as complementing each other geographically, combining the two companies means the new group can offer what's known as an "omnichannel" solution to retailers. As shopping increasingly moves online and on mobile devices, traditional retailers want to be able to take payments through different channels: online, in-store, and on mobile. By combining iZettle's terminal chops with PayPal's online know-how, the group can pitch itself as a one-stop shop for merchants looking to solve all their payment problems. Management will hope that this new offering will supercharge revenue growth. Once PayPal/iZettle is embedded in retailers, the company can then start to layer on additional revenue-generating services. iZettle has launched loans to customers based on the data gathered from terminal activity, for instance. "While the 100% premium that they appear to have paid for iZettle may look high, it may prove to be a prudent call," Jonny Hunot, a cofounder of the UK iZettle rival The Good Till Company, said on Friday. "Mobile, cloud-based payment solutions are clearly the future gateway for billions of dollars of annual retail sales, and whoever owns these gateways stand to gain significant fees over the long term. This has always been the PayPal play." Still, it's a gamble. McCrohan said in his note to clients on Friday that "acquiring iZettle does not alter how smaller merchants perceive PayPal as a tender type given the plethora of options already available for purchases in-store." But the deal is at least a step in the right direction for PayPal. Crucially, it should also worry Jack Dorsey's Square. Square and iZettle's products are very similar, and both target the small-business sectors. Until now, they have only really competed head-to-head in the UK — Square is dominant in North America, while iZettle has a strong footprint in Europe and Latin America. iZettle CEO Jacob de Geer said in a blog post on Friday, however, that part of the logic of selling to PayPal was that doing so would give the company a significant war chest to fuel international expansion. "We'll become iZettle with superpowers and jump on a fast track to realise our vision," he wrote. The United States seems like an obvious market for iZettle to target. It's a huge market and also PayPal's core market. Square, of course, has a big head start in the US, but iZettle's new firepower shouldn't be underestimated. PayPal's market capitalization is $96 billion, compared with Square's $21.7 billion, and PayPal most likely will plan to invest in iZettle to reap the full expected rewards it wants from the takeover, especially if it's targeting long tail revenue from getting embedded within merchants. Evercore advised PayPal on the deal, while JPMorgan was the sole financial adviser to iZettle.SEE ALSO: PayPal just made its biggest acquisition ever as it snaps up a Swedish credit-card-processing company for $2.2 billion DON'T MISS: European Square rival iZettle is heading for a $225 million IPO Join the conversation about this story » NOW WATCH: Here’s what is keeping stocks from completely crashing with the 10-year above 3%
  • The CBI just made a major intervention to keep Britain in a customs union after Brexit
    Britain's largest business group, the CBI, makes a major intervention in the Brexit debate. The group argues that Britain should remain a customs union with the EU "unless and until an alternative is ready and workable." Theresa May's government is currently deadlocked on the kind of trade partnership to pursue with the EU after Brexit. Failure to secure a beneficial partnership could lead to major economic issues for the UK. Britain's biggest business group, the CBI, has told Theresa May's government to "break the Brexit logjam" or risk doing major damage to the UK economy. In a major speech, CBI's president, Paul Drechsler, group, will on Sunday argue that the government's indecision over what kind of customs partnership it will pursue is crippling the UK economy. "We need to break the Brexit logjam and fast because there’s so much more that we need to get on with," Drechsler will say on Sunday evening, emphasising the need for "an urgent end to Brexit uncertainty." He will add that Britain should remain a customs union with the EU "unless and until an alternative is ready and workable" — before putting forward four tests that any future partnership should be able to pass. These are that: It should maintain "friction-free trade at the UK-EU border." "Ensure no extra burdens are incurred behind the border." Make sure there is no "border barrier" between the UK and Ireland. Finally, any agreement should have the ability to boost UK exports both to the EU, and to nations outside the EU. Theresa May's government is currently deadlocked on what kind of customs arrangements to pursue with the EU after Brexit. The prime minister has reportedly set up two working groups within her Cabinet to deal with the tricky issue of customs. Each group has been given the task of working on one of the government's two ideas for avoiding a hard border on the island of Ireland after Brexit: the customs partnership and the "max-fac" option. Under the customs partnership model, Britain would collect customs union tariffs on the EU's behalf to prevent the need for checks on goods heading for the European single market when they reach the Irish border. The "max-fac" idea seeks to minimise (but not eliminate) the friction on the border through as-yet undefined technologies. Whichever model the UK ends up pursuing, Drechsler is expected to say that the "correct" form of Brexit would allow the UK to "transform the fabric of our economy." "We can revolutionise our approach to education and skills to give the next generation the best possible chance to succeed," he will add, putting particular emphasis on the building of a third runway at Heathrow Airport. Drechsler's intervention comes three weeks after his organisation expressed "serious doubts" that the UK government will be able to fulfill its promise to roll-over Britain's 40 existing free trade deals with non-EU countries in time for Brexit, and warned that failure to do so could "wipe out" entire sectors of the economy.SEE ALSO: Exclusive: The CBI warns Liam Fox's Brexit trade plans could bankrupt British companies Join the conversation about this story » NOW WATCH: BlackRock's $1.8 trillion bond chief says Wall Street is looking at the wrong thing when it comes to the yield curve
  • Forge First Funds April 2018 Commentary – Danger With Canadian Natural Gas
    Forge First Funds commentary for the month ended April 30, 2018. April experienced more of the same volatility in equity markets that has persisted for most of the year, and as a result, Forge First continued to play things safe, […] The post Forge First Funds April 2018 Commentary – Danger With Canadian Natural Gas appeared first on ValueWalk.
  • A $2.3 billion merger has created the world’s largest marijuana company — and it’s a sign of a dealmaking boom in the sector
    Aurora Cannabis bought Medreleaf in a $2.3 billion stock deal — the largest cannabis merger ever. It's a sign that M&A is heating up in the cannabis space. The deals are driven by the excitement around legalization, competition for scale, and specific expertise on the medical side of the sector.  A dealmaking boom in the marijuana sector is ramping up as excitement around legalization grows.  Aurora Cannabis, one of the largest Canadian growers, bought its rival Medreleaf for a $2.3 billion stock deal, the companies announced in a joint statement on Monday. The combined firm will be the largest cannabis company by market cap, leapfrogging its chief rival, Canopy Growth.  The behemoth will produce a total of 1.25 million pounds of cannabis in its facilities and will have access to the increasingly important European market.  The deal is one of many to pop up in the cannabis sector in recent days. "Merger Monday, a Wall Street adage, is back in vogue but in a new space, the cannabis sector," said Morgan Paxhia, Chief Investment Officer of cannabis industry-focused hedge fund Poseidon Asset Management.  With the ink barely drying on the Aurora-MedReleaf deal, a consortium of four cannabis companies — Baker Technologies, Sea Hunter, Brightside, and Sante Veritas Therapeutics — announced a merger on Tuesday, operating under the name TILT. The new conglomerate will list on the CSE, a Canadian exchange.  Here's a rundown of the other major Monday announcements: Canopy Growth announced it would seek to list on the NYSE and begin trading shares at the end of May (pending approval), amid a wave of excitement about marijuana legalization sweeping the US. The company also announced it purchased the remaining third of Tweed, a British Columbia-based grower.  Green Thumb Industries, a Chicago-based cultivator, announced it's going public through a reverse-takeover agreement with the Toronto Stock Exchange-listed Bayswater Uranium Corporation. The new public company will list on the CSE. IAnthus, a firm that operates cannabis cultivation facilities in a number of US states, announced it received a $50 million investment from cannabis-focused private equity firm Gotham Green Partners, in the largest-ever single public investment by one investor into a cannabis company.  "We expect to see transaction activity in M&A, IPOs, and private funding to continue hitting record levels as the velocity and size of capital is still relatively low but picking up meaningfully around the world," Paxhia said.  The strategy behind cannabis deals  Cam Battley, Aurora's Chief Corporate Officer, told Business Insider that the merger is intended to help the company make inroads into new markets. "We didn't actually go to do this in order to achieve scale," Battley said. "It was a byproduct of the strategic rationale." Nonetheless, Battley said the merger gives Aurora everything it needs to "rapidly expand around the world."  "We're operating based on a very clear strategic plan that calls for both organic growth and growth by M&A and for all of that to happen incredibly quickly," said Battley. Battley said the company is continuing to build out its 800,000 square-foot production facility near the Edmonton, Alberta airport, as well as a number of other state-of-the-art cultivation facilities in Canada and in Denmark.  Aurora has also been on an acquisition spree in recent months, completing eight acquisitions and eight partnerships in the last year alone. "The whole sector moves fast, but we move at what we call the speed of Aurora," Battley said. "And no exaggeration, the entire management team works seven days a week." This is all good news for shareholders. Each shareholder of MedReleaf will receive 3.575 shares of Aurora, equating to around 40% of the combined company.  "MedReleaf’s shareholders will be getting a healthy premium," Vahan Ajamian, an analyst at the Toronto-based Beacon Securities said in a note. "We believe this development will spark M&A enthusiasm across the sector."  Why specific expertise makes for a good acquisition target In the US, tech and pharma companies that have specific expertise in the cannabis sector make for the best acquisition targets. Each of the 29 states with some form of regulated cannabis — whether medical or recreational — has its own regulations around the legal cannabis industry, creating what amounts to "29 unique markets," Alex Coleman, the new CEO of TILT, told Business Insider. The Trump administration's stance toward cannabis is still unclear, though there are a number of legalization bills floating around Congress. Canada, on the other hand, is set to legalize cannabis federally this year and roll out recreational markets as early as September, pending deliberation in the Canadian Senate.  "I think you're going to be seeing more strategic acquisitions," Coleman said. "I think those acquisitions will mostly be smaller in-state acquisitions with companies that have proven themselves to have some point of difference." These acquisition targets could be companies with specific geographic expertise, or more likely smaller startups  geared toward the pharmaceutical side of the industry that have patented some sort of extraction method, Coleman said. For example, if a startup came up with a treatment that could address a medical condition using certain combinations of CBD and THC (two of the most well-known active chemical compounds in cannabis) that would make the company a prime acquisition target, Coleman said.  From Canada to the world  Though there's lots of activity on the pharma and tech side in the US, it's the big Canadian companies that are poised to get a first-mover advantage to the global medical cannabis export market, Karan Wadhera, the managing partner of Casa Verde Capital, told Business Insider. "While in the US we are still dealing with a myriad of issues related to our fragmented market — Canada is already seeing multi-billion dollar M&A activity," Wadhera said. Battley, Aurora's CCO, echoed Wadhera's sentiment. "There's a very unusual situation that exists today whereby a handful of Canadian companies have an opportunity to establish and invents the global cannabis industry," Battley said. Canada's cannabis industry is the most mature, and Canadian companies can access capital much easier than US companies, where investors are largely reticent to jump into the industry because of the federal government's stance.  While Aurora would have "done fine" in launching consumer brands in Canada following legalization, the big economic opportunity lies in the global medical market, Battley said.  As new medical markets open up around the world, Canadian companies like Aurora will have the supply and infrastructure to export cannabis to countries in the European Union — as well as Australia, Israel, and others — as those markets open up. Battley said Aurora doesn't have any real US competitors because cannabis remains federally illegal, so US cultivators can't deduct business expenses (lest they get in trouble with the IRS), can't sell product across state lines (because of the Interstate Commerce Act), and largely can't access public exchanges.  Read more of our cannabis industry coverage here: The rising stars of marijuana's investment scene that everyone from Wall Street to Silicon Valley should know The highest-valued marijuana companies of 2017 reveal 2 key insights about the booming industry The CEO of a Peter Thiel-backed cannabis private equity firm reveals his 3-pronged strategy for choosing investments A hedge fund that focuses solely on marijuana is crushing it A $22 billion investment firm led one of the largest ever funding rounds for a cannabis tech company — here's why it's a big deal for the industry Inside Shopify's strategy for dominating the booming cannabis industry SEE ALSO: Inside Shopify’s strategy for dominating the booming cannabis industry Join the conversation about this story » NOW WATCH: How to survive an alligator attack