News > All

ETF Outlook: more biotech blunders or a biotech bounce?
Asset Management
<p>&nbsp;</p> <p>&nbsp;</p> <p>Stocks' September shenanigans continued last week as the S&amp;P 500 lost more than one percent and although the Dow Jones Industrial Average notched a triple-digit gain last Friday, a problem is surfacing: Increasingly bearish action in the biotechnology space.</p> <p>&nbsp;</p> <p>It is not a stretch to say that in the week ahead, this is an issue that traders of and investors in exchange traded funds will be heavily focusing on. That much is confirmed when noting the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB), the largest biotech ETF, slumped 13 percent last week and will enter Monday at its lowest levels in a month. With last week's tumble, IBB now resides nearly 11 percent below its 200-day moving average.</p> <p>&nbsp;</p> <p>As an equal-weight ETF, the SPDR S&amp;P Biotech ETF (NYSE: XBI) has heavier exposure to smaller biotechs than does the rival IBB. So it is not surprising that XBI was worse for the wear last week, sliding 15 percent.</p> <p>Read more at Benzinga. <br /> Photo: 401(K) 2012 </p>
Communication lessons from Donald Trump
Lifestyle, 4:01
<p>In a previous article, I discussed the lessons that advisors could learn from the non-verbal behavior of Donald Trump. Today, I will examine his communication skills and ways advisors can benefit from emulating them. To be clear, I’m nottalking about the substance of Trump’s message, as a presidential candidate or otherwise, but the manner in which he presents it.</p> <p>It’s not surprising that Trump is an excellent communicator. He honed these skills as host of the popular Apprentice television shows over an 11-year period. Here’s a summary of why he is so effective.</p> <p>He doesn’t use a teleprompter</p> <p>Trump is unscripted. He speaks with no notes and takes pride in the fact that he does not use a teleprompter. He has derided “traditional politicians” who use this tool and give the same speech every day.</p> <p>His demeanor is informal. His tone is conversational. Regardless of the size of the crowd, he intersperses his remarks with rhetorical questions and waits for an audience reaction.</p> <p>His style is in sharp contrast to many politicians. They tend to be carefully scripted, with “talking points” that are polished by highly paid consultants. They strive to demonstrate an encyclopedic knowledge of their subject matter, often with mind-numbing results.</p> <p>Instead of conversing with their audience, they lecture them.</p> <p>My experience</p> <p>When I started making television appearances, I was terrified. I prepared for hours and tried to anticipate every question. I rehearsed my responses. I recall vividly an experience I had on a Fox morning news program. The anchors were bantering with each other as I entered the set. One of them turned to me and asked this question on air: “Hey Dan. What do you have?”</p> <p>I was like a deer caught in the headlights. I bumbled my way through an answer to a question I never could have anticipated. The interview went downhill from there.</p> <p>I learned a valuable lesson that day. I noted how comfortable the anchors were in front of the camera and how stressed I was by comparison. So I came up with a simple solution. I decided that, in every interview, I would emulate the demeanor of the interviewer. I would be as conversational, relatable and comfortable as they were.</p> <p>It proved to be easier than I thought, because that is how people relate to each other in their everyday lives. It also markedly reduced my anxiety. Instead of trying to live up to my image of how one should act on television, I just had to be myself.</p> <p>He dumbs-down complex subjects</p> <p>Immigration policy and the proposed nuclear agreement with Iran are very complex subjects. They are also hot-button issues for voters.</p> <p>Whatever you may think of it, Trump’s solution to illegal immigration is remarkably simple:</p> <p> He would build a wall.<br /> He would get Mexico to pay for the wall.<br /> He would deport illegal aliens.<br /> He would end birthright citizenship.</p> <p>However, his plan is replete with flawed assumptions, glosses over daunting practical obstacles and rests on a dubious legal premise.</p> <p>The Iran agreement is similarly intricate. Trump has another “easy </p>
Traits of a successful investor
Lifestyle, 4:01
<p>During my stay within Yellowstone National Park, I was reflecting and pending down my thoughts on what makes a successful investor. I know that I have written a post similar to this in the past, however, I felt that it was time to write a new one – partly because there are new traits that I feel that are important, shaped through my experiences and interactions.<br /> Traits of a Successful Investor Insatiable Curiosity<br /> I find that the route to becoming a successful value investor is not just solely being curious about researching on companies or investing strategies. That will make us a better investor compared to those who do not put in the effort to learn more about the different strategies and all, however, I do not believe that is sufficient. Many a times I find that the materials that make me a better investor are materials solely unrelated to value investing. Take for instance, I was reading an article titled, “Doing Business in Japan“. It was a really interesting article from the point of view of a foreigner who migrated to Japan and his experiences of working and starting a business in Japan. However, from such an article it gave me insights and understanding of the business culture and corporate governance within Japan. Hence, don't just narrow down your curiosity to one aspect but broaden your interests. While value investing may be an investment strategy, it too is a way of thinking about various issues.<br /> Traits of a Successful Investor Networking<br /> Built up a great network of investors to talk to, be it seasoned or new investors. I have always found myself fortunate to have my friend/partner to start my value investing with and over the years it is this mutual help that has deepened our understanding towards value investing. Furthermore, over the years, we have constantly been meeting other like-minded individuals and this has definitely been rewarding. I once believed that the road of a value investor is often lonely due to our contrarian nature, however, this belief has changed over the years. It is all a matter of whether one is willing to look and put in the effort to make that connection. Hence, to all value investors out there be it seasoned investors or those starting their journey out, we are always willing to meet up for a chat to share our insights and hear about yours.<br /> Traits of a Successful Investor Humility<br /> I have once said that as value investors, we require that necessary arrogance to allow us to have the conviction in our investments when we are going against the herd. To achieve greatness, I believe a balance of the two is required. One needs to know what you can do and what you can't, and be grounded in reality. The greatest dangers some face are when they have been through a period of successful investments, such as since post Global Financial Crisis. A rising tide lifts all boats, during this period every stock has benefitted from an extremely long period of cheap interest rates. To immediately attribute one's success over this period to successful stock picking resulting in a conviction that one can never be wrong again is very dangerous. We have to constantly keep our self belief in check and know when to listen to others.<br /> Traits of a Successful Investor Attention to detail<br /> I have seen many formulas being taught out there and many investors have started applying it. While the formulas are not wrong, however, value investing is not just some mathematical problem where formulas are sufficient in solving it. Hence, this is why it is both a form of science and art. It is not a</p>
The very best of… Dan Loeb’s letters to CEOs
Hedge Funds
<p>It’s been awhile since we’ve seen Dan Loeb’s poison pen put to good use so, here are the nastiest, the most scathing, and above all, the most hilarious letters of his from back in the day – just in case you forgot why the New Yorker called him the “angry investor” back in 2005.</p> <p>Enjoy.</p> <p>Letter to InterCept Inc., 2004<br /> “Do not confuse our $22 million stake as a vote of confidence in the Company’s senior management or its Board of Directors. On the contrary, it is our view that your record in management, acquisitions and corporate governance is among the worst that we have witnessed in our investment career… “</p> <p>“…The Company’s proxy statement provides us with our first indication that a “good ol’ boy” (“GOB”) set of ethics prevails at the Company rather than standards dictated by fairness and good judgment. First, the Company employs the C.E.O.’s daughter, Denise, and her husband David Saylor, who received total compensation of $238,776 in 2003. I called Mr. Saylor last Friday at 4:00 p.m. at the Company’s offices to learn more about the core product that he presumably sells. He had his calls forwarded to his cell phone since it was still business hours. I identified myself as a shareholder interested in learning about the core product lines to which he replied that he could not speak as he was “on the golf course.” I was not sure whether it was his relation with his father-in-law or the $238,776 salary that affords him the opportunity to work on his golf game during business hours.”<br /> Letter to Ligand Pharmaceuticals, 2005<br /> “When one analyst was queried about the reputation of the senior executives at the Company, he said that you [Ligand C.E.O. David Robinson] are “the worst CEO in biotech”, and another analyst we spoke with attributed the significant valuation disparity between the current stock price and the much higher intrinsic value of the Company to the “David Robinson Discount”. I must wonder how in this day and age the Company’s Board of Directors has not held you and [Ligand C.F.O.] Paul Maier responsible for your respective failures and shown you both the door long ago—accompanied by a well worn boot planted in the backside.”<br /> Letter to Star Gas Partners, 2005<br /> “Sadly, your ineptitude is not limited to your failure to communicate with bond and unit holders. A review of your record reveals years of value destruction and strategic blunders which have led us to dub you one of the most dangerous and incompetent executives in America. (I was amused to learn, in the course of our investigation, that at Cornell University there is an “[Star Gas C.E.O.] Irik Sevin Scholarship.” One can only pity the poor student who suffers the indignity of attaching your name to his academic record.)”</p> <p>“…how is it possible that you selected your elderly 78-year old mom to serve on the Company’s Board of Directors and as a full-time employee providing employee and unitholder services? We further wonder under what theory of corporate governance does one’s mom sit on a Company board. Should you be found derelict in the performance of your executive duties, as we believe is the case, we do not believe your mom is the right person to fire you from your job…. We insist that your mom resign immediately from the Company’s board of directors.”“<br /> Letter to Potlach, 2003<br /> “Since you ascended to your current role of Chief Value Destroyer (“C.V.D.”) when you assumed the formal title of C.E.O. in 1999, the shares have dropped over 45%, a destruction of shareholder value in excess of $520 million. This negative sum does not include the declin</p>
Didi Kuaidi snaps up stake in Ola
Venture Capital
<p>This week in unicorns, Chinese decacorn Didi Kuaidi and its backers have turned their fight against Uber all the way up to 11.</p> <p>According to TechCrunch, China’s largest ride sharing firm taken part in funding round worth about $500 million for India’s dominant ride-hailing app, Ola.</p> <p>How much the Beijing-based company invested in Ola is still unknown, what we’re sure of though is that the round valued the Bangalore-based firm at $5 billion, making it one the largest ride-app companies currently going.</p> <p>This is the latest salvo in a war being waged against Uber being waged by a global consortium that also includes the likes SoftBank, Alibaba and Singapore fund Temasek. As the raging quinquagintacorn continues to scale up, the coalition has been backing Uber's competitors in all its key markets – including Uber’s home turf.</p> <p>Didi inked a deal with US-based Lyft this month that will allow the two companies to shares riders across the world, and just to be sure, it invested $100 million in the firm as well. It also injected an unspecified amount of cash in Southeast Asia’s GrabTaxi, an investment that will surely cement Didi’s place in the region’s burgeoning car service arena.</p> <p>How Uber will respond to this is anyone’s guess, but given Didi’s great choice of investments, CEO Travis Kalanick is no doubt having some sleepless nights.<br /> Photo: Abhijit Patil</p>
Is the Islamic State responsible for Android Pay?
FinTech
<p>At first glance, the notion that Islamic State - formerly ISIS  (Islamic State of Iraq and Syria) - has a part to play in the birth of Android Pay is absurd, but its not impossible. No one is suggesting that the Islamic terrorist organisation  has a secret cell of programmers moonlighting  in Mountain View, however the group's mere existence may have set off a chain of events that inadvertently brought us Google's latest payment's platform.</p> <p>This is what's suggested by fintech blog Mobile Payments Today which insists that to understand Android Pay one must start with ISIS. Why? Because the IP behind the Smart Tap technology that is at the center of Android Pay's value proposition was actually acquired by Google when it bought a company called Softcard in 2013.</p> <p>Softcard was a joint venture created in 2010 by AT&amp;T, T-Mobile and Verizon back when it was called Isis, at a time when name was more closely associated the Egyptian goddess. It was only when the terrorist group ISIS came onto the scene they were forced to change their name. Supposedly the brand never recovered from the name change, making it easier - so the logic goes - for Google to acquire them and their IP, and eventually bring us Android Pay.<br /> Photo: FutureTrillionaire</p>
Goldman, Barclays, RBS execs named London’s top 1000 financiers
Lifestyle, 4:01
<p>They are the royalty of London’s financial world, the individuals involved in the biggest deals and setting the economic policy agenda, reports FinBuzz. They are the most influential people in the City, according to the Evening Standard.</p> <p>The list, compiled by the Evening Standard and broken down into several subcategories, includes CEOs of major global banks, hedge fund managers, Bank of England economists, and professionals across varied financial spheres.</p> <p>Many are not native Brits, but have made London their home, either by choice or the lure of business.</p> <p>Xavier Rolet <br /> Chief executive, London Stock Exchange</p> <p>The 56-year-old French man has been at the held of the London Stock Exchange since 2009. Before he held senior roles at Goldman Sachs and Lehman Brothers in London.</p> <p>John McFarlane<br /> Chairman, Barclays</p> <p>The Scottish-born banker was named Barclay’s chairman in 2014, just months before the abrupt departure of chief executive Antony Jenkins. Before he was the director of RBS, Citibank, and ANZ.</p> <p>Sir Howard Davies<br /> Chairman, Royal Bank of Scotland</p> <p>Sir Howard became the chairman of the bank’s board just a few weeks ago. He will have to navigate the bank, which received a £45 billion bailout in 2012, through the major restructuring. Before he worked at the UK Airports Commission as well as Deputy Governor of the Bank of England.</p> <p>Michael Sherwood and Richard Gnodde<br /> Co-chief executives, Goldman Sachs International</p> <p>Michael Sherwood, a native Londoner, has been the Co-Chief Executive Officer at Goldman since 2005 after joining the company in 1986 and becoming a partner in 1994. Richard Gnodde, born in South Africa, joined Goldman just one year after Sherwood, and became co-chief in 2006.</p> <p>Colm Kelleher<br /> Chief executive, Morgan Stanley international division</p> <p>The 58-year old Irish banker, though he keeps a low profile, is one of the City’s highest paid executives. Bloomberg estimates that Kelleher, who has been the president of institutional securities since 2013, has a total yearly compensation of more than $20 million including options.</p> <p>Stephanie Flanders<br /> Managing director, UK and Europe, JP Morgan Asset Management</p> <p>Flanders worked for the BBC as an economics editor for 11 years before jumping ship to JP Morgan. She is still very active on Twitter where she has over 115,000 followers.</p> <p>James Bardrick<br /> UK chief county officer, Citi</p> <p>The 52-year old banker from Exxex never actually intended to be a banker, but an engineer. As the UK country officer, a role he has held since February 2014, he is responsible for 10,000 Britain-based staff. Before Citi, he worked at Schroders, which was acquired by Citi in 2000.</p> <p>Inga Beale<br /> Chief executive, Lloyd’s of London</p> <p>Besides being Llyod’s of London’s first female boss in the company’s 325-year history, the 51-year old is also a former rugby player, and nearly went pro. Before, she worked at Canopius, Zurich Insurance Group, and GE Insurance Solutions in the US, London, France, Europe, Germany, the Middle East, and Africa.</p> <p>António Horta-Osório<br /> Chief executive, Lloyds Banking Group</p> <p>The Portuguese native has played a large role in restructuring the one-f</p>
James Grant: The next thing might be helicopter money
Capital Markets
<p>James Grant, Wall Street expert and editor of the investment journal «Grant’s Interest Rate Observer», warns of ever more extreme central bank policies and bets on the comeback of gold.</p> <p>The global financial markets are under severe stress. The postponed interest rate hike in the United States, the fast cool down of the Chinese economy and the crash in the commodity complex are causing a great amount of unease among investors. Fear is growing that the world slips into recession. «Central bank policy is intended to paper over the cracks in the systems. Seven years after the outbreak of the financial crisis we’re paying for this with a lack of growth», says James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» draws worrisome parallels between the command based central planning of the Chinese economy and the economic policies in the West. He also doubts that Fed Chair Janet Yellen is the right fit for the top job at the world’s most powerful central bank. Looking for protection he points to gold and shares of gold miners</p> <p>Jim, since the fall of Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ) seven years have passed now. In what kind of world are investors living in today?</p> <p>James Grant: It seems longer ago, doesn’t it? Certain things have not changed. The first of those permanent things is the nature of human beings who operate in markets and their tendency to buy high and sell low. That is just as it was the day before Lehman failed and it’s just as it will be forever. What’s new and different is the larger than life presence of government in our markets, both with respect to regulation and with respect to the management and the production and the manipulation of money.</p> <p>Are you referring to super low interest rates?</p> <p>James Grant: There is nothing so terribly new about very low interest rates. In the 19th century interest rates fell for most of the area from the end of the Napoleonic wars in 1815 to the turn of the 20th century. But something new under the sun might be very well the hyperactivity of our central banks.</p> <p>But without their interventions we might be even worse off today.</p> <p>James Grant: We are living in the age of magical thinking. Governments through central banks have muscled down money market interest rates to zero and in some cases below zero. Not content with that, they have implemented what economists chose to call «the portfolio balance channel». That’s a very fancy phrase meaning higher stock prices in the interest of rising aggregate demand. That was the theory of the Bernanke Fed and it certainly was the theory of the Chinese communists who sponsored the fly away levitation of the Shanghai A-shares. So the world over – and this goes for Europe as well – central bankers have taken it upon themselves to sponsor great bull markets in the hopes of making people spend more because they will feel richer. That was the theory. But they neglected to think through the full consequences of these policies.</p> <p>The slowdown in China is putting the financial markets under a lot of stress. How bad is the situation?</p> <p>James Grant: If I were a member of the ruling elite of the Chinese communist party I would say to myself: «Wait a second, we were just doing what the capitalist West </p>
Boaz Weinstein sued by Canadian pension fund
Hedge Funds
<p>Boaz Weinstein, the derivatives wunderkind known for such hits as making partner at Deutsche Bank at 27, losing $1.8 billion shortly after, and harpooning the London Whale, is currently accused of cheating one his largest investors.</p> <p>According to the WSJ, the Canadian Public Sector Pension Investment Board – which asked Weinstein’s Saba Capital for its money back – is suing the hedge fund for allegedly marking down “the value of its portfolio right before paying out the redemption request, and then marked the value back up shortly after the money was cashed out.”</p> <p>The lawsuit is massive blow for Saba. After reaching $5 billion in assets post-London Whale, the fund saw its assets shrink to $1.6 billion over the next few years – $500 million of which, belongs to the pension fund.</p> <p>For his part, Weinstein said that the whole thing is “utter nonsense,” adding that the accusations were “completely false,” and that he takes these allegations “very seriously.”</p> <p>With people itching to nail another hedge fund, this should be interesting to watch unfold. Stay tuned.<br /> Photo: StockMonkeys.com</p>
Artcurial gears up for its inaugural HK auction
Lifestyle, 4:01
<p>Paris-based auction house Artcurial is gearing up for its first ever sale in Hong Kong, and apparently, they’re doing it with a bang.</p> <p>Among the items to auctioned off in the From Paris to Hong Kong sale are Picasso’s Buste de femme (HK$20-30 million), Pierre Auguste Renoir’s a portrait of Edmond Renoir Junior (HK$8-12 million), a golden cup from the collection of Count Nicolas Demidov (HK$700,000 to 1,000,000), and a fantastically maintained 1961 300SL Roadster (HK$10-15 million).</p> <p>For the ladies, a selection of “exceptional” exotic-skinned Hermès bags are also set to be auctioned, including “a black porosus crocodile” bag that boasts “red goatskin lining” (HK$250,000-300,000).</p> <p>The sale not only represents the French firm’s incredible growth, but also Hong Kong’s (and Asia’s) ascendancy as an important hub for the art market.</p> <p>Speaking to the SCMP, Artcurial director Isabelle Bresset had this to say:<br /> “The number of Asian clients has been doubling each year since we started Asian art sales in 2011. We need to get used to this new client base and we have to be there to understand our Asian clients better.”<br /> The sale starts on October 5 and previews will be held from the 2nd to the 5th at Spink, Hong Kong.<br /> Photo: German Medeot</p>