The Margin: FuboTV will ‘no longer pursue’ in-house sports betting on its own

The Fubo Sportsbook will continue operating in states where it's been approved, but the company is looking for 'strategic opportunities' to team up.....»»

Category: topSource: marketwatchAug 5th, 2022

The Margin: FuboTV to ‘no longer pursue’ in-house sports betting on its own

The Fubo Sportsbook will continue operating in states where it's been approved, but the company is looking for 'strategic opportunities' to team up.....»»

Category: topSource: marketwatchAug 8th, 2022

The Margin: FuboTV will ‘no longer pursue’ in-house sports betting on its own

The Fubo Sportsbook will continue operating in states where it's been approved, but the company is looking for 'strategic opportunities' to team up.....»»

Category: topSource: marketwatchAug 5th, 2022

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero"

Futures Slide Amid Renewed Recession Fears After China Doubles Down On "Covid Zero" One day after futures ramped overnight (if only to crater during the regular session) on hopes China was easing its highly politicized  Zero Covid policy after it cut the time of quarantine lockdowns, this morning futures slumped early on after China's President Xi Jinping made clear that Covid Zero isn't going anywhere and remains the most “economic and effective” policy for China during a symbolic visit to the virus ground zero in Wuhan, in which he cast the strategy as proof of the superiority of the country’s political system. That coupled with renewed recession worries (market is again pricing in a rate cut in Q1 2023) even as monetary policy tightens in much of the world to fight supply-side inflation, sent US futures and global markets lower. S&P futures dropped 0.2% and Nasdaq 100 futures were down 0.4% after the underlying index slumped on 3.1% on Tuesday. The dollar was steady after rising the most in over a week while WTI crude climbed above $112 a barrel, set for a fourth session of gains. In cryptocurrencies, Bitcoin dipped below the closely watched $20,000 level on news crypto hedge fund 3 Arrows Capital was ordered to liquidate. The Nasdaq's Tuesday’s slump added to what was already one of the worst years in terms of big daily selloffs in US stocks. The S&P 500 Index has fallen 2% or more on 14 occasions, putting 2022 in the top 10 list, according to Bloomberg data. Not helping the tech sector, on Wednesday morning JPMorgan cut its earnings estimates across the sector, especially for companies exposed to online advertising, citing macroeconomic pressures, forex and company-specific dynamics. One of the chief drivers for overnight weakness, China's Xi said during a trip Tuesday to Wuhan where the virus first emerged in late 2019 that relaxing Covid controls would risk too many lives in the world’s most populous country. China would rather endure some temporary impact on economic development than let the virus hurt people’s safety and health, he said, in remarks reported Wednesday by state media. As a result, China’s CSI 300 Index extended loss to 1.4% after the headline, while the yuan drops as much as 0.2% to trade 6.7132 against the dollar in the offshore market. Among key premarket movers, Tesla slipped in US premarket trading. The electric-vehicle maker laid off hundreds of workers on its Autopilot team as it shuttered a California facility, according to people familiar with the matter. Carnival slumped as Morgan Stanley analysts warned that the London and New York-listed cruise vacation company’s shares could lose all their value in the event of another demand shock. Pinterest gained 3.7% as the company’s co- founder and CEO Ben Silbermann quit and handed the reins to Google and PayPal veteran Bill Ready in a sign the social-media company will focus more on e-commerce. Also, despite the pervasive weakness, the Energy Select Sector SPDR Fund ETF (XLE) rebounded off key support (50% Fibonacci) relative to the SPDR S&P 500 ETF (SPY). That said, energy was alone and most other notable movers were down in the premarket: Carnival (CCL US) shares fall 8% premarket as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Nio (NIO US) shares drop 8.2% after short-seller Grizzly Research published a report on Tuesday alleging that the electric carmaker used battery sales to a related party to inflate revenue and boost net income margins. The company rejected the claims. Upstart Holdings (UPST US) shares slump about 9% after Morgan Stanley downgraded the consumer finance company to underweight from equal-weight amid rising cyclical headwinds. Ormat Technologies (ORA US) rallies as much as 5% after the renewable energy company is set to be included in the S&P Midcap 400 Index. 2U (TWOU US) shares rise 16% premarket. Indian online-education provider Byju’s has offered to buy the company in a cash deal that values the US-listed edtech firm at more than $1 billion, a person familiar with the matter said. Watch Amazon (AMZN US) shares as Redburn initiated coverage of the stock with a buy recommendation and set a Street-high price target, saying “there is a clear path toward a $3 trillion value for AWS alone.” Shares in data center REITs could be active later in the trading session after short-seller Jim Chanos said in an FT interview that he’s betting against “legacy” data centers. Watch Digital Realty (DLR US) and Equinix (EQIX US), as well as data center operators Cyxtera Technologies (CYXT US) and Iron Mountain (IRM US) Investors are growing increasingly skeptical that the Fed can avoid a bruising economic downturn amid sharp interest-rate hikes. Evaporating consumer confidence is feeding into concerns that the US might tip into a recession. Naturally, Fed officials sought to play down recession risk. New York Fed President John Williams and San Francisco’s Mary Daly both acknowledged they had to cool inflation, but insisted that a soft landing was still possible. “It seems the market is in this tug of war between on the one hand the hope that we are close to the peak in inflation and rates, and on the other hand the challenge of a slowing economy and potential recession,” Emmanuel Cau, head of European equity strategy at Barclays Bank Plc, said in an interview with Bloomberg TV. “Central banks are walking a very tight line and to a certain extent dictate the mood in the markets.” European equities snapped three days of gains, trading poorly but off worst levels with sentiment also hurt by China remaining committed to its zero-Covid approach. Spanish inflation unexpectedly surged to a record, dashing hopes that inflation in the euro zone’s fourth-biggest economy had peaked, and emboldening European Central Bank policy makers pushing for big increases in interest rates. The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow. German benchmark bonds rose, while 10-year Treasury yields slipped to 3.16%. DAX lags, dropping as much as 1.8%. Real estate, autos and miners are the worst performing sectors. In notable moves in European stocks, Hennes & Mauritz (H&M) gained after the Swedish low-cost retailer’s earnings beat analyst estimates. Just Eat NV tumbled to a record low after Berenberg analysts rated the stock sell, saying the food delivery firm’s UK business will remain under pressure. Here are some of the biggest European movers today: Just Eat Takeaway shares plunge as much as 21% after Berenberg initiated coverage with a sell rating, saying the firm’s UK business will remain under pressure and a sale of its Grubhub unit is unlikely to satisfy the bulls. Carnival stocks slumped over 12% in London as Morgan Stanley analysts warned that the cruise vacation firm’s shares could lose all their value in the event of another demand shock. Pearson drops as much as 6.1% after the education company was cut to sell at UBS, which reduced forecasts to reflect a weak outlook for 2022 college enrollments. Grifols shares plunge as much as 13% on a media report the Spanish plasma firm is weighing a capital raise of as much as EU2b to cut its debt. Diageo shares fall after downgrades for the spirits group from Deutsche Bank and Kepler Cheuvreux, while Pernod Ricard also dips on a rating cut from the latter. Diageo declines as much as 4.2%, Pernod Ricard -3.7% Fluidra shares fall as much as 8.4% after Santander cut its rating on the Spanish swimming pools company. The bank’s analyst Alejandro Conde cut the recommendation to neutral from outperform. H&M shares rise as much as 6.8% after the Swedish apparel retailer reported 2Q earnings that beat estimates. Jefferies said the margin beat in particular was reassuring, while Morgan Stanley said it was a “positive surprise” overall. Ipsen shares rise as much as 3.1% after UBS analyst Michael Leuchten said that accepting palovarotene refiling priority review should be a net present value and confidence boost. Asian stocks fell, halting a four-day gain, as renewed angst over the outlook for global economic growth and inflation help drive a selloff across most of the region’s equity markets. The MSCI Asia Pacific Index dropped as much as 1.5%, led by consumer discretionary and information sectors. Chinese equities in particular took a hit, as the CSI 300 Index fell 1.5% Wednesday after Xi Jinping reiterated his firm stance on Covid zero. Tech-heavy indexes in markets such as South Korea and Taiwan took the brunt of Wednesday’s drop amid lingering concerns that monetary tightening in much of the world to fight inflation will cause an economic slowdown. While Federal Reserve members have played down the risk of a US recession, gloomy data such as US consumer confidence have damped investor sentiment. “Volatility is going to be the enduring feature of the market, I suspect, for the next couple of quarters at least until we get a firm sense that peak inflation has passed,” John Woods, Credit Suisse Group AG’s Asia-Pacific chief investment officer, said in an interview with Bloomberg TV. “Markets, I think, have aggressively priced in quite a serious or steep recession.”  China’s four-day winning streak came to a halt, putting its advance toward a bull market on hold.  “We will continue to see a risk of targeted lockdowns, and that spoils the initial euphoria seen in the markets from the announcement on relaxation of quarantine requirements,” said Charu Chanana, market strategist at Saxo Capital Markets. “Still, economic growth will likely be prioritized as this is a politically important year for China.”  Japanese equities decline as investors digested data that showed a drop in US consumer confidence over inflation worries and increased concerns of an economic downturn.  The Topix Index fell 0.7% to 1,893.57 in Tokyo on Wednesday, while the Nikkei declined 0.9% to 26,804.60. Toyota Motor Corp. contributed the most to the Topix’s decline, decreasing 1.8%. Out of 2,170 shares in the index, 1,114 fell, 984 rose and 72 were unchanged. “There are concerns about stagflation,” said Hideyuki Suzuki a general manager at SBI Securities. “The consumer sentiment from the University of Michigan, which provides one of the fastest data points, has already shown poor figures.” Stocks in India tracked their Asian peers lower as brent rose to the highest level in two weeks, while high inflation and slowing global growth continued to dampen risk-appetite for global equities. The S&P BSE Sensex fell 0.3% to 53,026.97 in Mumbai, while the NSE Nifty 50 Index declined by an equal measure. Both gauges have lost more than 4% in June and are set for their third consecutive month of declines. The main indexes have dropped for all but one month this year. Twelve of the 19 sub-sector gauges compiled by BSE Ltd. eased, led by banking companies while power producers were the top performers.   Investors will also be watching the expiry of monthly derivative contracts on Thursday, which may lead to some volatility in the markets.  Hindustan Unilever was the biggest contributor to the Sensex’s decline, decreasing 3.5%. Out of 30 shares in the Sensex, 10 rose and 20 fell. The Bloomberg Dollar Spot Index inched up modestly as the greenback traded mixed against its Group-of-10 peers; the Swiss franc led gains while Antipodean currencies were the worst performers and the euro traded in a narrow range around $1.05. The relative cost to own optionality in the euro heading into the July meetings of the ECB and the Federal Reserve was too low for investors to ignore and has become less and less underpriced. The yen strengthened and US and Japanese bond yields fell. In rates, fixed income has a choppy start. Bund futures initially surged just shy of 200 ticks on a soft regional German CPI print before fading the entire move over the course of the morning as Spanish data hit the tape, delivering a surprise record 10% reading for June and more hawkish ECB comments crossed the wires. Treasuries and gilts followed with curves eventually fading a bull-steepening move. Long-end gilts underperform, cheapening ~4bps near 2.75%. Peripheral spreads are tighter to core.  Treasuries are slightly higher as US trading day begins, off the session lows reached as bund futures jumped after the first monthly drop since November in a German regional CPI gauge. Yields are lower across the curve, by 1bp-2bp for tenors out to the 10-year with long-end yields little changed; 10-year declined as much as 5.3bp vs as much as 8.2bp for German 10- year, which remains lower by ~3bp. Focal points for the US session include a final revision of 1Q GDP, comments by Fed Chair Powell, and anticipation of quarter-end flows favoring bonds. Quarter-end is anticipated to cause rebalancing flows into bonds; Wells Fargo estimated that $5b will be added to bonds, with most of the flows occurring Wednesday and Thursday. In commodities, crude futures advance. WTI drifts 0.3% higher to trade near $112.13. Base metals are mixed; LME tin falls 5.6% while LME zinc gains 0.4%. Spot gold falls roughly $5 to trade near $1,815/oz Looking ahead, the highlight will be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Market Snapshot S&P 500 futures little changed at 3,829.00 STOXX Europe 600 down 0.8% to 412.69 MXAP down 1.3% to 159.96 MXAPJ down 1.6% to 531.04 Nikkei down 0.9% to 26,804.60 Topix down 0.7% to 1,893.57 Hang Seng Index down 1.9% to 21,996.89 Shanghai Composite down 1.4% to 3,361.52 Sensex little changed at 53,204.17 Australia S&P/ASX 200 down 0.9% to 6,700.23 Kospi down 1.8% to 2,377.99 German 10Y yield little changed at 1.59% Euro little changed at $1.0510 Brent Futures down 0.4% to $117.46/bbl Gold spot down 0.2% to $1,816.09 U.S. Dollar Index little changed at 104.55 Top Overnight News from Bloomberg The Fed’s Loretta Mester said she wants to see the benchmark lending rate reach 3% to 3.5% this year and “a little bit above 4% next year” to rein in price pressures even if that tips the economy into a recession The ECB should consider raising interest rates by twice the planned amount next month if the inflation outlook deteriorates, according to Governing Council member Gediminas Simkus, as calls not to exclude an outsized initial move grow ECB has “ample room” to hike in 25bps-50bps steps to “whatever rate we think, we consider reasonable,” Governing Council member Robert Holzmann said in interview with CNBC Swedish consumers are gloomier than they have been since the mid-1990s, as prices surge on everything from fuel to food and furniture China’s President Xi Jinping declared Covid Zero the most “economic and effective” policy for the nation, during a symbolic visit to Wuhan in which he cast the strategy as proof of the superiority of the country’s political system NATO moved one step closer to bolstering its eastern front with Russia after Turkey dropped its opposition to Swedish and Finnish bids to join the military alliance A more detailed look at markets courtesy of Newsquawk Asia-Pac stocks were pressured amid headwinds from the US where disappointing Consumer Confidence data added to the growth concerns. ASX 200 failed to benefit from better than expected Retail Sales and was dragged lower by weakness in miners and tech. Nikkei 225 fell beneath the 27,000 level as industries remained pressured by the ongoing power crunch. Hang Seng and Shanghai Comp. conformed to the negative picture in the region although losses in the mainland were initially stemmed after China cut its quarantine requirements which the National Health Commission caveated was not a relaxation but an optimization to make it more scientific and precise. Top Asian News Chinese President Xi said China's COVID prevention control and strategy is correct and effective and must stick with it, via state media. Shanghai will gradually reopen museums and scenic sports from July 1st, state media reports. US Deputy Commerce Secretary Graves said the US will take a balanced approach on Chinese tariffs and that a clear response on China tariffs is coming soon, according to Bloomberg. China State Council's Taiwan Affairs Office said it firmly opposes the US signing any agreement that has sovereign connotations with Taiwan, according to Global Times. BoJ Governor Kuroda said Japanese Core CPI reached 2.1% in April and May which is almost fully due to international energy prices and Japan's economy has not been affected much by the global inflationary trend so monetary policy will stay accommodative, according to Reuters. Japanese govt to issue power supply shortage warning for a fourth consecutive day on Thursday, according to a statement. European bourses are on the backfoot as the region plays catch-up to the losses on Wall Street yesterday. Sectors are mostly lower (ex-Energy) with a defensive tilt as Healthcare, Consumer Products, Food & Beverages, and Utilities are more cushioned than their cyclical peers. Stateside, US equity futures trade on either side of the unchanged mark with no stand-out performers thus far, with the contracts awaiting the next catalyst. Top European News UK expects defence spending to reach 2.3% of GDP and said PM Johnson will announce new military commitments to NATO, according to Reuters. UK Weighs Capping Maximum Stake in Online Casinos at £5 Europe Is the Only Region Where Earnings Estimates Are Rising European Gas Prices Rise as Supply Risks Add to Storage Concerns Gold Steady as Traders Weigh Fed Comments on US Recession Risks Choppy Start for Euro-Area Bonds on Mixed Inflation FX Dollar mostly bid otherwise as rebalancing demand underpins - DXY pivots 104.500 within 104.700-350 confines. Franc outperforms on rate and risk considerations - Usd/Chf breaches 0.9550 and Eur/Chf approaches parity. Euro erratic in line with conflicting inflation data - Eur/Usd rotates around 1.0500. Aussie and Kiwi undermined by downturn in sentiment - Aud/Usd loses 0.6900+ status, Nzd/Usd wanes from just over 0.6250. Yen rangy following firmer than forecast Japanese retail sales and BoJ Governor Kuroda reaffirming intent to remain accommodative - Usd/Jpy straddles 136.00. Nokkie welcomes oil worker wage agreement with unions to avert strike action, but Sekkie hampered by softer Swedish macro releases pre-Riksbank policy call tomorrow - Eur/Nok probes 10.3000, Eur/Sek hovers around 10.6800. Rand rattled by decline in Gold and ongoing SA power supply problems, but Rouble rallies irrespective of CBR and Russian Economy Ministry divergence over deflation. Central Banks ECB's Lane said there are two-way inflation risks: "on the one side, there could be forces that keep inflation higher than expected for longer. On the other side, we do have the risk of a slowdown in the economy, which would reduce inflationary pressure", via ECB. ECB's Holzmann said "We will have to make an assessment where the economic development is going and where inflation stands and afterwards there’s ample room to hike in 0.25 and 0.5 levels to whatever rate we think, we consider reasonable" via CNBC. ECB's Simkus said if data worsens, then he wants a 50bps July hike as an option, 50bps hike is very likely in September; ECB's fragmentation tool should serve as a deterrent, via Bloomberg. ECB's Herodotou said EZ inflation will peak this year, via CNBC. ECB's Wunsch said government aid may spell more rate hikes, via Bloomberg; 150bps of hikes by March 2023 is reasonable ECB is said to be weighting whether or not they should announce the size and duration of their upcoming bond-buying scheme, according to Reuters sources. Fed's Mester (2022, 2024 voter) said on a path towards restrictive interest rates; July debate between 50bps and 75bps hike, via CNBC. Mester said if inflation expectations become unanchored, monetary policy would have to act more forcefully; current inflation situation is a very challenging one, via Reuters. SARB Governor said a 50bps hike is "not off the table", Via Bloomberg CBR Governor said she does not see risks of deflation; sees room to cut rates; sticking to policy of floating RUB exchange rate. PBoC will step up implementation of prudent monetary policy, will keep liquidity reasonably ample. Fixed Income Bunds unwind all and a bit more of their hefty post-NRW CPI gains as other German states show smaller inflation slowdowns and Spanish HICP soars. Gilts suffer more pronounced fall from grace in relative terms and US Treasuries slip from overnight peaks in sympathy. UK debt and STIRs also await testimony from MPC member elect to see if newbie leans dovish, hawkish or middle of the road 10 year benchmarks settle off worst levels within 147.37-145.14, 112.66-11.85 and 117-12+/116-27 respective ranges awaiting comments from ECB, Fed and BoE heads at Sintra Forum. Commodities WTI and Brent front-month futures traded with no firm direction in early European hours before picking up modestly in recent trade. US Private Inventory (bbls): Crude -3.8mln (exp. -0.6mln), Cushing -0.7mln, Distillate +2.6mln (exp. -0.2mln) and Gasoline +2.9mln (exp. -0.1mln). Norway's Industri Energi and SAFE labour unions agreed a wage deal for oil drilling workers and will not go on strike, according to Reuters. OPEC to start today at 12:00BST/07:00EDT; JMMC on Thursday at 12:00BST/07:00EDT followed by OPEC+ at 12:30BST/07:30EDT, via EnergyIntel. Libya's NOC suspends oil exports from Es Sider port. Spot gold is under some mild pressure as the Buck and Bond yields picked up, with the yellow metal back to near-two-week lows Base metals are mixed but off best levels after President Xi reaffirmed China's COVID stance – LME copper fell back under USD 8,500/t US Event Calendar 07:00: June MBA Mortgage Applications, prior 4.2% 08:30: 1Q PCE Core QoQ, est. 5.1%, prior 5.1% 08:30: 1Q GDP Price Index, est. 8.1%, prior 8.1% 08:30: 1Q Personal Consumption, est. 3.1%, prior 3.1% 08:30: 1Q GDP Annualized QoQ, est. -1.5%, prior -1.5% Central Banks 09:00: Powell Takes Part in Panel Discussion at ECB Forum in Sintra 09:00: Lagarde, Powell, Bailey, Carstens Speak in Sintra 11:30: Fed’s Mester Speaks on Panel at ECB Forum in Sintra 13:05: Fed’s Bullard Makes Introductory Remarks DB's Jim Reid concludes the overnight wrap I'm finishing this off in a taxi on the way to the Eurostar this morning and I made the mistake of telling the driver I was slightly pressed for time. He seems to be taking the racing line everywhere and my motion sickness is kicking in. A little like this car journey, it's been another volatile 24 hours in markets, with a succession of weak data releases raising further questions about how close the US and Europe might be to a recession. That saw equities give up their initial gains to post a decent decline on the day, whilst there was little respite from central bankers either, with sovereign bonds selling off further as multiple speakers doubled down on their hawkish rhetoric. That comes ahead of another eventful day ahead on the calendar, with investors primarily focused on a panel featuring Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey, as well as the flash German CPI print for June, who are the first G7 economy to release their inflation print for the month, which will provide some further clues on how fast central banks will need to move on rate hikes. Just as we go to print the NRW region of Germany has seen CPI print at 7.5% YoY, way below last month's 8.1%. This region is around a quarter of GDP so it could imply the national numbers will be notably softer when we get them later. The energy tax cuts were always going to come through in June so some respite was always possible but at first glance this seems materially below what might have been expected. This comes after a significant sovereign bond selloff in Europe once again yesterday as President Lagarde reiterated the central bank’s determination to bring down inflation, and described inflation pressures that were “broadening and intensifying”. And although Lagarde stuck to the existing script about the ECB raising rates by 25bps at the next meeting, we also heard from Latvia’s Kazaks who said that “front-loading the increase would be a reasonable choice” in the event that the situation with inflation or inflation expectations deteriorates. Lagarde did nod to this in part, saying that if the ECB was “to see higher inflation threatening to de-anchor inflation expectations, or signs of a more permanent loss of economic potential that limits resources availability, we would need to withdraw accommodation more promptly to stamp out the risk of a self-fulfilling spiral.” Separately on fragmentation, Lagarde said that they could “use flexibility in reinvesting redemptions” from PEPP starting July 1 in order to deal with the issue. For now, overnight index swaps are only pricing in a +31.3bps move in July from the ECB, so still closer to 25 than 50 for the time being. Meanwhile the rate priced in by year-end rose also by +7.9bps as investors interpreted the comments in a hawkish light. That supported a further rise in yields, with those on 10yr bunds up another +8.1bps yesterday, following on from their +10.7bps move in the previous session. That’s now almost reversed the -21.9ps move over the previous week, which itself was the third-largest weekly decline in bund yields for a decade, and brought the 10yr yield back up to 1.63%, so not far off its multi-year high of 1.77% seen last week. A similar pattern was seen elsewhere, with 10yr yields on 10yr OATs (+9.6bps), BTPs (+4.2bps) and gilts (+7.2bps) all moving higher too. Things turned near the European close with some poor US data releases piling on to some lacklustre confidence figures in Europe. Earlier in the day the GfK consumer confidence reading from Germany fell to -27.4 (vs. -27.3 expected), taking it to another record low. Separately in France, consumer confidence fell to 82 on the INSEE’s measure (vs. 84 expected), which we haven’t seen since 2013. Then in the US, the Conference Board’s measure fell to 98.7 (vs. 100.0 expected), which is the lowest since February 2021. The Conference Board’s one-year ahead inflation expectations hit a record high of 8.0%, surpassing the June 2008 record of 7.7%, adding to the pessimism. Along with waning confidence, the Richmond Fed’s Manufacturing Index registered a -19, its lowest since the peak onset of the pandemic, versus expectations of -7 and a prior of -9, showing that production data has weakened as well. This put a serious damper on risk sentiment which drove Treasury yields and equities lower intraday during the New York session. 10yr Treasury yields ended down -2.8bps after trading as much as +5.5bps higher during the European session. They are down another -4bps this morning. Concerningly as well, there was a fresh flattening in the Fed’s preferred yield curve indicator (which is 18m3m – 3m), which came down another -9.1bps to 165bps, which is the flattest its been since early March. With that succession of bad news helping to dampen risk appetite, US equities gave up their opening gains to leave the S&P 500 down -2.01% on the day. Tech stocks saw the worst losses, with the NASDAQ (-2.98%) and the FANG+ (-3.74%) seeing even larger declines. And whilst there was a stronger performance in Europe, the STOXX 600 ended the day up just +0.27%, having been as high as +0.95% in the couple of hours before the close. We didn’t hear so much from the Fed ahead of Chair Powell’s appearance today, although New York Fed President Williams said that at the upcoming July meeting “I think 50 to 75 is clearly going to be the debate”. Markets are continuing to price something in between the two, although since the last Fed meeting futures have been consistently closer to 75 than 50, with 69.0 bps right now. Those sharp losses in US equities are echoing across Asia this morning. The Hang Seng (-1.86%) is leading the losses followed by the Kospi (-1.82%), the Nikkei (-1.07%) and the ASX 200 (-1.06%). Over in mainland China, the Shanghai Composite (-0.77%) and the CSI (-0.80%) are slightly out-performing after yesterday’s surprise move by China to slash the quarantine period for inbound travellers (more on this below). Looking ahead, US stock index futures point to a positive opening with contracts on the S&P 500 (+0.18%) and NASDAQ 100 (+0.19%) mildly higher. Earlier today, data released showed that Japan’s retail sales advanced for the third consecutive month in May (+3.6% y/y) but lower than the consensus of +4.0%, but with the previous month's data revised up to +3.1% (vs +2.9% preliminary). Meanwhile, South Korea’s consumer sentiment index (CSI) fell sharply to 96.4 in June (vs 102.6 in May), sliding below the long-term average of 100 for the first time since Feb 2021. Separately, Australia’s retail sales put in another strong performance as it climbed +0.9% m/m in May, surpassing analyst estimates of a +0.4% increase. Oil has fallen back slightly overnight after three sessions of gains with Brent futures down -0.84% at $116.99 and WTI futures (-0.64%) at $111.04/bbl as I type. Just after we went to press yesterday, it was also announced that China would be shortening the required quarantine period for inbound travellers to one week from two. So although China is still very-much committed to a Covid-zero strategy for the time being, this step towards loosening rather than tightening restrictions is an interesting development that helped support Chinese equities in yesterday’s session towards the close which filtered through into early northern hemisphere risk performance. In terms of other data yesterday, there were signs that US house price growth might finally be slowing somewhat, with the S&P CoreLogic Case-Shiller index up by +20.4% in April, which is down slightly from the +20.6% gain in March. So still a long way from an absolute decline, but that marks a reversal in the trend after the previous 4 months of rises in the year-on-year measure. To the day ahead now, and the highlight will likely be the panel at the ECB Forum that includes Fed Chair Powell, ECB President Lagarde and BoE Governor Bailey. We’ll also be hearing from ECB Vice President de Guindos, the ECB’s Schnabel, the Fed’s Mester and Bullard, and the BoE’s Dhingra. On the data side, releases include German CPI for June, Euro Area money supply for May, and the final Euro Area consumer confidence reading for June. From the US, we’ll also get the third reading of Q1 GDP. Tyler Durden Wed, 06/29/2022 - 08:00.....»»

Category: smallbizSource: nytJun 29th, 2022

Dave & Buster"s (PLAY) Shares Up 28% YTD: More Upside Left?

Dave & Buster's (PLAY) continues to focus on simplifying its store operations, improving guest experience, and enhancing its food and beverage and entertainment offerings to boost sales. Dave & Buster's Entertainment, Inc. PLAY is poised to benefit from its amusement business, expansion initiatives and digital efforts. This along with the expansion of entertainment options has been a driving factor for sales in the last few quarters.So far this year, shares of Dave & Buster's have gained 27.8% against the industry’s 12.5% fall. The price performance was backed by a solid earnings surprise history. Dave & Buster's’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Earnings estimates for fiscal 2023 and 2024 have moved up 21.8% and 12.9% respectively, in the past 30 days. This positive trend signifies bullish analyst sentiments and justifies the company’s Zacks Rank #1 (Strong Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.Image Source: Zacks Investment ResearchGrowth CatalystsStrong Amusement Business: Dave & Buster's has been gaining from its Amusement business. During the fourth quarter of fiscal 2021, amusement and other revenues (accounting for 65% of the total revenues) jumped 191.1% year over year to $223 million. The upside was primarily driven by a reduction in discounting and a shift toward higher denomination Power Cards. The shift toward increased focus on amusement is driving Dave & Buster’s bottom line, given that it's a higher-margin business. This unique model sets the company apart and its entertainment business is likely to sustain the momentum in the days ahead.Going forward, the company intends to expand entertainment options and broaden its appeal, thereby making way for increased visit frequency. In the first quarter of fiscal 2022, the company intends to launch its Late Night Happy Hour initiative, including a series of D&B Night with custom content and daily takeovers (featuring club mixes). Also, it stated plans to bring back its eat and play combo as a limited-time offer (through April 2022). Backed by pent-up demand, the company expects the initiative to drive incremental consumer spending behavior as well as guest additions in the upcoming period.Continued Expansion: Dave & Buster's continues to pursue a disciplined new store growth strategy in new and existing markets, given the broad appeal of its brand. Management believes that it can grow the concept to more than 200 units in North America over time. In addition to the growth potential in North America, management is optimistic regarding the brand’s significant appeal in certain international markets. In fourth-quarter fiscal 2021, the company opened one new store. During fiscal 2021, the company opened four new stores and relocated one existing location. Going forward, the company intends to open two stores in the first quarter of fiscal 2022. In fiscal 2022, the company plans to open eight new stores.Solid Sales-Building Initiatives: Dave & Buster's continues to focus on simplifying its store operations, improving guest experience, and enhancing its food and beverage and entertainment offerings to drive sales and profitability. It has also taken steps to widen its entertainment plans by operating programmed events in select markets. Over the summer, the company stated plans to boost its entertainment offerings with the introduction of new games.Meanwhile, the company continues to focus on virtual kitchen concepts, optimizing back-of-the-house operations and enhancing its bar menu to enable a seamless flow of food as well as boost guest experience. Moreover, the company increased its focus on the beverage menu. Backed by a disciplined approach and extensive guest research, the company launched a freshly-curated beverage menu in the fourth quarter of fiscal 2021. Also, the company emphasized to boost offerings with seasonal drinks in the form of LTOs (limited time offers). The company intends to take advantage of the freshness of seasonal products and offer customers a constant stream of new culinary options to drive food attachment and sales. Meanwhile, Dave & Buster's initiated the rollout of reservation capabilities to enhance the dining experience for customers. The company has enabled reservations through the D&B website and via open-table. The new service is likely to boost the company’s expansion, in terms of reach and appeal.Organic Efforts to Drive Growth: Dave & Buster's intends to broaden its entertainment offerings by including more immersive sports viewing experiences, adding fantasy sports and permitting in-sports betting options. The company plans to explore sports betting partnership to bring sports racing and daily fantasy sports to Dave & Buster's stores, subject to regulatory permissions. It is also working on an entertainment programming function focused on creating compelling content-based events to drive reach and boost visit frequency. Thus, with the help of a centralized programming team, Dave & Buster's intends to enhance the live sports experience in lieu of becoming a premier sports watching destination. The company also stated that it intends to give its stores a fresh look to drive organic growth. In the first quarter of fiscal 2022, the company initiated a partnership with UFC and WWE to unveil their pay-per-view events to the D&B locations across North America. The association with WWE enables the company to launch WrestleMania on Apr 2, followed by SummerSlam in July 2022.Other Key PicksOther top-ranked stocks in the Zacks Retail-Wholesale sector include BBQ Holdings, Inc. BBQ, Arcos Dorados Holdings Inc. ARCO and Tapestry, Inc. TPR.BBQ Holdings sports a Zacks Rank #1. BBQ Holdings has a long-term earnings growth of 14%. Shares of the company have rallied 90.9% in the past year.The Zacks Consensus Estimate for BBQ Holdings’ 2022 sales and earnings per share (EPS) suggests growth of 40.9% and 66.2%, respectively, from the year-ago period’s levels.Arcos Dorados sports a Zacks Rank #1. ARCO has a long-term earnings growth of 31.3%. Shares of the company have risen 60.4% in the past year.The Zacks Consensus Estimate for Arcos Dorados’ 2022 sales and EPS suggests growth of 10.3% and 62.5%, respectively, from the year-ago period’s levels.Tapestry carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 28.2%, on average. Shares of the company have declined 9.4% in the past year.The Zacks Consensus Estimate for Tapestry’s 2022 sales and EPS suggests growth of 17.5% and 22.9%, respectively, from the year-ago period’s levels. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arcos Dorados Holdings Inc. (ARCO): Free Stock Analysis Report Dave & Buster's Entertainment, Inc. (PLAY): Free Stock Analysis Report Tapestry, Inc. (TPR): Free Stock Analysis Report BBQ Holdings, Inc. (BBQ): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksApr 1st, 2022

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI

Futures Slide On Renewed China Covid Lockdown Fears As Traders Brace For Q2 Earnings, Red Hot CPI US equity futures and global markets started the second week of the 3rd quarter on the back foot, with spoos sliding on Monday morning as traders were spooked by fears that Covid may be making a return to China leading to more virus restrictions sending Chinese stocks tumbling the most in a month, amid growing concern about an ugly second-quarter earnings season which begins this week. A closely watched CPI print on Wednesday which is expected to rise again, will also keep markets on edge. Contracts on the S&P 500 and Nasdaq 100 traded 0.7% lower, suggesting last week’s rally in US stocks my stall as concerns about China’s Covid resurgence weigh on risk appetite. The dollar jumped, reversing two weeks of losses and trading around the highest level since 2020 while Treasuries gained. Bitcoin dropped, oil declined and iron ore extended losses on concern about the demand outlook in China. Adding to the risk-off mood were the latest covid news out of China, whose stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door.  Both the Hang Seng and Shanghai traded negative after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. There was more bad news out China including a rejection by China Evergrande Group’s bondholders on a proposal to extend debt payment, as well as a warning by a prominent investor’s wife that a key lithium maker’s stock is overvalued. The Chinese selloff is a reminder that the nation’s Covid Zero policy and lingering uncertainty toward tech crackdowns remain key risks for investors betting on a sustained rebound in Chinese shares. The Hang Seng China gauge has recorded just one positive session in the last eight after rallying nearly 30% from a March low.  Anyway, back to the US where in premarket trading, Twitter shares slumped in premarket trading after Elon Musk terminated his $44 billion takeover approach for the social media company. Some other social media stocks were lower too, while Digital World Acquisition (DWAC US), the SPAC tied to Donald Trump, jumps as much as 30%. Bank stocks are also lower in premarket trading Monday amid a broader decline in risk assets as investors await the release of key inflation data later this week. S&P 500 futures are also lower, falling as much as 1%, while the US 10-year Treasury yield holds above the 3% level. In corporate news, UBS is considering a plan to promote Iqbal Khan to sole head of the bank’s global wealth management business. Meanwhile, Klarna is shelling out loans for milk and gas with cash-strapped customers looking for ways to cover basic necessities. Here are some other notable premarket movers: US-listed Macau casino operators and Chinese tourism stocks fall after local authorities in the gambling hub shut almost all business premises as a Covid-19 outbreak in the area worsened. Las Vegas Sands (LVS US) down 3.5%, MGM Resorts (MGM US) -3.5%, Wynn Resorts (WYNN US) -3.1%. Cryptocurrency-exposed stocks were lower after the latest MLIV Pulse survey suggested that the token is more likely to tumble to $10,000, cutting its value roughly in half, than it is to rally back to $30,000. Crypto stocks that are down include: Marathon Digital (MARA US) -6%, Riot Blockchain (RIOT US) -4.5%, Coinbase (COIN US) -3.8%. Lululemon (LULU US) cut to underperform and Under Armour (UAA US) downgraded to hold by Jefferies in a note on athletic apparel firms, with buy-rated Nike (NKE US) “still best-in-class.” Lululemon drops 1.8% in US premarket trading, Under Armour -3.1% Morgan Stanley cut its recommendation on Fastly (FSLY US) to underweight from equal-weight, citing a less favorable risk/reward scenario heading into the second half of the year. Shares down 5.2% in premarket. Price pressures, a wave of monetary tightening and a slowing global economy continue to shadow markets. the June CPI print reading on Wedensday is expected to get closer to 9%, a fresh four-decade high, buttressing the Federal Reserve’s case for a jumbo July interest-rate hike. Company earnings will shed light on recession fears that contributed to an $18 trillion first-half wipe-out in global equities. “The real earnings hit will come in the second half as we’re hearing from companies, especially retailers, saying they’re already seeing weakness from consumers,” Ellen Lee, portfolio manager at Causeway Capital Management LLC, said on Bloomberg Television. The Stoxx Europe 600 index pared a decline of more than 1% as an advance for utilities offset losses for carmakers and miners. The Euro Stoxx 50 was down 0.8% as of 10:30 a.m. London time, having dropped as much as 1.9% shortly after the cash open. DAX and CAC underperform at the margin. Autos, miners and consumer products are the worst-performing sectors.  Copper stocks sank as fear of global recession continues to suppress metals prices; miners suffered: Anglo American -5.1%, Antofagasta -5.3%, Aurubis -3.7%, Salzgitter -5.1%. Copper was hit hard, with futures down 1.9% today. Here are the top European movers: Dufry shares rise as much as 11%, while Autogrill falls as much as 9.4% after the Swiss duty-free store operator agreed to buy the Italian company from the billionaire Benetton family, with the offer price being below Autogrill’s closing price on Friday. Danske Bank declines as much as 6.4% after the lender cut its outlook for the year. Fincantieri advances as much as 7% after the Italian shipbuilder said it secured an ultra-luxury cruise ship order that will be built by the end of 2025. Joules drops as much as 25% after the British retailer said it hired KPMG to advise on how to shore up its cash position. MJ Gleeson jumps as much as 7.4% after the homebuilder published a trading update stating that it sees full-year earnings being “significantly ahead of expectations.” Peel Hunt says it was a “strong finish to the year.” Uniper falls as much as 12%, adding to its declines in recent weeks, after the German utility last week asked the government for a bailout. Wizz Air declines as much as 5.3% after the low-cost carrier provided a 1Q update, with ticket fares down 12% versus FY20. Nordex rises as much as 7.8%, reversing early losses after the wind-turbine maker said it plans to raise EU212m via a fully-underwritten rights issue. Mining stocks sink as fear of global recession continues to suppress metals prices. Anglo American and Antofagasta are among the decliners. “Earnings expectations will come down this year and probably next year as well, which is somewhat priced,” Barclays Private Bank Chief Market Strategist Julien Lafargue said on Bloomberg Television. “The question is how big are the cuts we are going to see,” he added. The declines in Europe came as Chinese stocks had their worst day in about a month as the Covid resurgence combined with fresh fines for tech giants hit markets Earlier in the session, Asian stocks tumbled as resurging Covid-19 cases in China dented investor sentiment and raised fears of lockdowns that could hurt growth and corporate earnings. The MSCI Asia Pacific Index dropped as much as 1.1%, erasing an earlier gain of as much as 0.5%. Chinese stocks had their worst day in about a month as a Covid resurgence combined with fresh fines for the tech giants sent investors running for the door. Japan was a bright spot, buoyed by the prospect of administrative stability after the ruling coalition expanded its majority in an upper house election. Alibaba and Tencent dragged the gauge the most after China’s watchdog fined the internet firms. All but two sectors declined, with materials and consumer discretionary sectors leading the retreat. Chinese stocks were the region’s notable losers, with benchmarks in Hong Kong slumping about 3% and those in mainland China down more than 1%. A bevy of bad news from the world’s second-largest economy ahead of major economic data releases later this week dampened the mood. The first BA.5 sub-variant case was reported in Shanghai in another challenge to authorities struggling to counter a Covid-19 flare-up in the financial hub. Macau shuttered almost all casinos for a week from Monday as virus cases remain unabated.  “Sentiment got weakened again as Covid-19 cases spread again in China,” said Cui Xuehua, a China equity analyst at Meritz Securities in Seoul. “There are also worries about lockdowns as companies will start reporting their earnings.”   Meanwhile, benchmarks in Japan outperformed the region, gaining more than 1% following the ruling bloc’s big election victory.   Traders in Asia are awaiting for a set of data from the world’s second-largest economy this week, including its growth and money supply figures. Also on the watch are corporate earnings, which would give investors more clues about the impact of lockdowns in China and rising costs of goods and services. Japanese equities climbed after the ruling coalition expanded its majority in an upper house election held Sunday, two days after the assassination of former Prime Minister Shinzo Abe.  The Topix index rose 1.4% to 1,914.66 as of the market close in Tokyo, while the Nikkei 225 advanced 1.1% to 26,812.30. Toyota Motor Corp. contributed the most to the Topix’s gain, increasing 1.9%. Out of 2,170 shares in the index, 1,862 rose and 256 fell, while 52 were unchanged. “In the next two years or so, the government will be able to make some drastic policy changes and if they don’t go off in the wrong direction, the stability of the administration will be a major factor in attracting funds to the Japanese market,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Australia's S&P/ASX 200 index fell 1.1% to close at 6,602.20, with miners and banks contributing the most to its drop. All sectors declined, except for health. EML Payments was the worst performer after its CEO resigned. Costa slumped after Credit Suisse downgraded the stock. The produce company also said it’s faced quality issues from weather. In New Zealand, the S&P/NZX 50 index fell 0.6% to 11,106.14 India’s benchmark stock index declined following the start of the first quarter earnings season, with bellwether Tata Consultancy Services Ltd. disappointing amid worsening cost pressures faced by Indian companies.  The S&P BSE Sensex Index fell 0.2% to 54,395.23 in Mumbai, after posting its biggest weekly advance since April on Friday, helped by a recent correction in key commodity prices. The NSE Nifty 50 Index ended little changed on Monday.  Tata Consultancy contributed the most to the Sensex’s drop, falling 4.6%, its sharpest decline in seven weeks. Bharti Airtel slipped as Adani Group’s surprise announcement of participating in a 5G airwaves auction potentially challenges its telecom business. Still, 15 of the 19 sub-sector gauges compiled by BSE Ltd. gained, led by power producers. Software exporter HCL Technologies Ltd. slumped more than 4% before its results on Tuesday. In FX, the pound fell as the race to replace Boris Johnson as UK premier heats up. Over in Europe, the main conduit for Russian gas goes down for 10-day maintenance on Monday. Germany and its allies are bracing for President Vladimir Putin to use the opportunity to cut off flows for good in retaliation for the West’s support of Ukraine following Russia’s invasion. The Bloomberg Dollar Spot Index snapped a two-day decline as the greenback rose against all of its Group-of-10 peers. The Norwegian krone and the Australian dollar were the worst performers. The Aussie declined amid the greenback’s strength, and poor sentiment triggered by Covid news and political strife with China. Australian Prime Minister Anthony Albanese has ruled out complying with a list of demands from the Chinese government to improve relations between the two countries. Shanghai reported its first case of the BA.5 sub-variant on Sunday, warning of “very high” risks as the city’s rising Covid outbreak sparks fears of a return to its earlier lockdown. The yen dropped to a 24-year low above 137 per dollar. Japanese Prime Minister Fumio Kishida’s strong election victory presents him with a three-year time frame to pursue his own agenda of making capitalism fairer and greener, with no need to quickly change course on economic policy including central bank stimulus In rates, Treasuries are slightly richer across the curve with gains led by the front end, following a wider rally seen across bunds and, to a lesser extent, gilts as stocks drop. Sentiment shifts to second-quarter earnings season, while focus in the US will be on Tuesday’s inflation print. Bunds lead gilts and Treasuries higher amid haven buying. Treasury yields richer by up to 3.5bp across front end of the curve, steepening 2s10s and 5s30s spreads by almost 2bp; 10-year yields around 3.06%, with bunds and gilts trading 3bp and 1bp richer in the sector.  Auctions are front loaded, with 3-year note sale today, followed by 10- and 30-year Tuesday and Wednesday. Auctions resume with $43b 3-year note sale at 1pm ET, followed by $33b 10-year and $19b 30-year Tuesday and Wednesday. WI 3-year around 3.095% is above auction stops since 2007 and ~17bp cheaper than June’s stop-out. Bitcoin caught a downdraft from the cautious start to the week in global markets, falling as much as 2.6% but holding above $20,000. In commodities, crude futures decline. WTI trades within Friday’s range, falling 1.3% to trade near $103.48. Base metals are mixed; LME copper falls 1.4% while LME lead gains 1.4%. Spot gold maintains the narrow range seen since Thursday, falling roughly $4 to trade near $1,739/oz. It is a quiet start tot he week otherwise, with nothing scheduled on the US calendar today. Market Snapshot S&P 500 futures down 0.6% to 3,877.75 STOXX Europe 600 down 0.8% to 413.75 MXAP down 0.9% to 157.30 MXAPJ down 1.6% to 516.87 Nikkei up 1.1% to 26,812.30 Topix up 1.4% to 1,914.66 Hang Seng Index down 2.8% to 21,124.20 Shanghai Composite down 1.3% to 3,313.58 Sensex down 0.2% to 54,349.37 Australia S&P/ASX 200 down 1.1% to 6,602.16 Kospi down 0.4% to 2,340.27 German 10Y yield little changed at 1.28% Euro down 0.6% to $1.0122 Brent Futures down 2.2% to $104.66/bbl Gold spot down 0.3% to $1,738.11 U.S. Dollar Index up 0.47% to 107.51 Top Overnight News from Bloomberg Foreign Secretary Liz Truss entered the race to replace Boris Johnson as UK premier, the latest cabinet minister to make her move in an already fractious contest Price action in the spot market Friday for the euro was all about short-term positioning, options show The Riksbank needs to prevent high inflation becoming entrenched in price- and wage-setting, and to ensure that inflation returns to the target, it says in minutes from latest monetary policy meeting The probability of a euro-area economic contraction has increased to 45% from 30% in the previous survey of economists polled by Bloomberg, and 20% before Russia invaded Ukraine. Germany, one of the most- vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink ECB Governing Council member Yannis Stournaras said a new tool to keep debt-market turmoil at bay as interest rates rise may not need to be used if it’s powerful enough to persuade investors not to test it The number of UK households facing acute financial strain has risen by almost 60% since October and is now higher than at any point during the pandemic A more detailed look at global markets courtesy of Newqsuawk Asia-Pac stocks traded mostly lower as the region digested last Friday’s stronger than expected NFP data in the US, with sentiment also mired by COVID-19 woes in China. ASX 200 was led lower by underperformance in tech and the mining-related sectors, while hopes were dashed regarding an immediate improvement in China-Australia ties following the meeting of their foreign ministers. Nikkei 225 bucked the trend amid a weaker currency and the ruling coalition’s strong performance at the Upper House elections, but with gains capped after Machinery Orders contracted for the first time in 3 months. Hang Seng and Shanghai Comp. traded negative amid COVID concerns after a rise in Shanghai’s COVID-19 cases prompted authorities to declare more high-risk areas and the city also reported its first case of the BA.5 omicron subvariant, as well as two more rounds of mass testing in at least 9 districts. Casino stocks were heavily pressured in Hong Kong after Macau announced to shut all non-essential businesses including casinos, while shares in tech giants Tencent and Alibaba weakened after reports that they were among the companies fined by China’s antitrust watchdog concerning reporting of past transactions. Top Asian News Shanghai’s COVID-19 cases continued to increase which prompted authorities to declare more high-risk areas and is fuelling fears that China’s financial hub may tighten movement restrictions again, according to Bloomberg. In relevant news, Shanghai reported its first case of the BA.5 omicron subvariant and authorities ordered two more rounds of mass testing in at least 9 districts. An official from China's Shanghai says authorities have classified additional areas as high risk areas. Macau will shut all non-essential businesses including casinos this week due to the COVID-19 outbreak, according to Reuters. It was separately reported that Hong Kong is considering a health code system similar to mainland China to fight COVID. China’s Foreign Minister Wang said he had a candid and comprehensive exchange with US Secretary of State Blinken, while he called for the US to cancel additional tariffs on China as soon as possible and said the US must not send any wrong signals to Taiwan independence forces, according to Reuters. US Secretary of State Blinken stated that the US expects US President Biden and Chinese President Xi will have the opportunity to speak in the weeks ahead, according to Reuters. US Commerce Secretary Raimondo said cutting China tariffs will not tame inflation and that many factors are pushing prices higher, according to FT. China’s antitrust watchdog fined companies including Alibaba (9988 HK) and Tencent (700 HK) regarding reporting of past deals, according to Bloomberg. Japan's ruling coalition is poised to win the majority of seats contested in Sunday's upper house election and is projected to win more than half of the 125 Upper House seats contested with a combined 76 seats and the LDP alone are projected to win 63 seats, according to an NHK exit poll cited by Reuters. Japanese PM Kishida said that they must work toward reviving Japan’s economy and they will take steps to address the pain from rising prices, while he added they will focus on putting a new bill that can be discussed in parliament when asked about constitutional revision and noted that they are not considering new COVID-19 restrictions now, according to Reuters. European bourses are pressured, Euro Stoxx 50 -0.5%, but will off post-open lows amid a gradual pick-up in sentiment. Pressure seeped in from APAC trade amid further China-COVID concerns amid a relatively limited docket to start the week. Stateside, futures are directionally in-fitting but with magnitudes less pronounced with earnings season underway from Tuesday; ES -0.4%. Toyota (7203 JP) announces additional adjustments to its domestic production for July; volume affected by the adjustment will be around 4000 units, global production plan to remain unchanged, via Reuters. Top European News Fitch affirmed European Stability Mechanism at AAA; Outlook Stable and affirmed Greece at BB; Outlook Stable, while it cut Turkey from BB- to B+; Outlook Negative. UK Companies are bracing for a recession this year with multiple companies said to have begun “war gaming” for a recession, according to FT. In other news, local leaders warned that England’s bus networks could shrink by as much as a third as the government’s COVID-19 subsidies end and commercial operators withdraw from unprofitable routes, according to FT. Senior Tory party figures are reportedly seeking to narrow the leadership field quickly, according to FT. It was separately reported that only four Tory party leadership candidates are expected to remain by the end of the week under an accelerated timetable being drawn up by the 1922 Committee of backbenchers, according to The Times. UK Chancellor Zahawi, Transport Minister Shapps, Foreign Secretary Truss, junior Trade Minister Mordaunt, Tory MPs Jeremy Hunt and Sajid Javid have announced their intentions to run for party leader to replace UK PM Johnson, while Defence Secretary Wallace decided to not run for PM and several have declared the intention to cut taxes as PM, according to The Telegraph, Evening Standard and Reuters. FX Buck firmly bid after strong US jobs report and pre-CPI on Wednesday that could set seal on another 75bp Fed hike this month, DXY towards top of 107.670-070 range vs last Friday's 107.790 high. Aussie undermined by rising Covid case count in China’s Shanghai, AUD/USD loses grip of 0.6800 handle Yen drops to fresh lows against Greenback after BoJ Governor Kuroda reiterates dovish policy stance amidst signs of slowing Japanese growth, USD/JPY reaches 137.28 before waning. Euro weak due to heightened concerns that Russia may cut all gas and oil supplies, EUR/USD eyes bids ahead of 1.0100. Pound down awaiting Conservative Party leadership contest and comments from BoE Governor Bailey, Cable under 1.2000 and losing traction around 1.1950. Hawkish Riksbank minutes help Swedish Crown avoid risk aversion, but Norwegian Krona declines irrespective of stronger than forecast headline inflation; EUR/SEK sub-10.7000, EUR/NOK over 10.3200. Yuan soft as Shanghai raises more areas to high-risk level; USD/CNH and USD/CNY nearer 6.7140 peaks than troughs below 6.6900 and 6.7000 respectively. Fixed Income Debt regains poise after post-NFP slide, with Bunds leading the way between 151.00-149.75 parameters Gilts lag within 114.94-33 range awaiting Conservative leadership contest and comments from BoE Governor Bailey 10 year T-note firm inside 118-00+/117-18+ bounds ahead of USD 43bln 3 year auction Commodities Crude benchmarks are curtailed amid the COVID situation with broader developments limited and heavily focused on Nord Stream. French Economy and Finance Minister Le Maire warned there is a strong chance that Moscow will totally halt gas supplies to Europe, according to Politico. Canada will grant a sanctions waiver to return the repaired Russian turbine to Germany needed for maintenance on the Nord Stream 1 gas pipeline but will expand sanctions against Russia’s energy sector to include industrial manufacturing. The US does not expect any specific announcements on oil production at this week’s US-Saudi summit, according to FT sources. JPMorgan (JPM) sees crude prices in the low USD 100s in H2 2022, falling to high USD 90s in 2023. Spot gold remains relatively resilient, torn between the downbeat risk tone and the USD's modest advances; attention on the metal's reaction if DXY surpasses Friday's best. Copper pulls back as Los Bambas returns to full output and on the China readacross. US Event Calendar Nothing major scheduled Central Banks 14:00: Fed’s Williams Takes Part in Discussion on Libor Transition DB's Jim Reid concludes the overnight wrap If you're in Europe over the next week good luck coping with the heatwave. In the UK I read last night that there's a 30% chance that we will see the hottest day ever over that period. The warning signs are always there when at 5am you're sweating and not just because of the immense effort put in on the EMR. Talking of red hot, it's that time of the month again where all roads point to US CPI which will be released exactly half way through the European week. This will be followed by the US PPI release (Thursday) and the University of Michigan survey for July on Friday where inflation expectations will be absolutely key. With US Q2 GDP currently tracking negative Friday's retail sales and industrial production could still help swing it both ways. Staying with the US it's time for Q2 earnings with a few high profile financials reporting. This is a very important season (aren't they all) as the collapse in equities so far in 2022 is largely due to margin compression and not really earnings weakness. Elsewhere China’s Q2 GDP on Friday alongside their main monthly big data dump is a highlight as we see how data is rebounding after the spike in Covid. In Europe, it will be a data-packed week for the UK. Going through some of this in more detail now and US CPI is the only place to start. Our economists note that while gas prices fell in the second half of June, the first half strength will still be enough to help the headline CPI print (+1.33% forecast vs. +0.97% previously) be strong on the month but with core (+0.64% vs. +0.63%) also strong. They have the headline YoY rate at 9.0% (from 8.6%) while core should tick down from 6.0% to 5.8%. Aside from an array of Fed speakers, investors will be paying attention to speeches from the BoE Governor Bailey (today and tomorrow). Markets will be also anticipating the Bank of Canada's decision on Wednesday, and another +50bps hike is expected based on Bloomberg's median estimate. Finally, G20 central bankers and finance ministers will gather in Bali on July 15-16. In Europe, it will be a busy week for the UK, with monthly May GDP, industrial production and trade data due on Wednesday, among other indicators. Germany's ZEW Survey for July (tomorrow) will also be in focus as European gas prices continue to be on a tear amid risks of Russian supply cut-offs. Speaking of which, Nord Stream 1 will be closed from today to July 21st for maintenance with much anticipation as to what happens at the end of this period. Elsewhere, Eurozone's May industrial production (Wednesday) and trade balance (Friday) will also be due. Finally, as Q2 earnings releases near for key US and European companies, key US banks will provide an early insights on the economic backdrop and consumer spending patterns. Results will be due from JPMorgan, Morgan Stanley (Thursday), Citi and BlackRock (Friday). In tech, TSMC's report on Thursday may provide more insight into the state of supply-demand imbalance in semiconductors. In consumer-driven companies, PepsiCo (tomorrow) and Delta (Wednesday) will also release their results. The rest of the day by day week ahead is it the end as usual. Asian equity markets are starting the week mostly lower on rising concerns around a fresh Covid flare-up in China as Shanghai reported its first case of the highly infectious BA.5 omicron sub-variant on Sunday. Across the region, the Hang Seng (-2.89%) is the largest underperformer amid a broad sell-off in Chinese tech shares after China imposed fines on several companies including Tencent and Alibaba for not adhering to anti-monopoly rules on disclosures of transactions. In mainland China, the Shanghai Composite (-1.50%) and CSI (-2.05%) both are trading sharply lower whilst the Kospi (-0.30%) is also weaker after see-sawing in early trade. Bucking the trend is the Nikkei (+1.02%) after Japan’s ruling party, the Liberal Democratic Party (LDP) and its coalition partner, Komeito, expanded its majority in the upper house in the country’s parliamentary vote held on Sunday and following the assassination of former Prime Minister Shinzo Abe last week. Outside of Asia, US stock futures are pointing to a weaker start with contracts on the S&P 500 (-0.60%) and NASDAQ 100 (-0.85%) moving lower. Early morning data showed that Japan’s core machine orders dropped -5.6% m/m in May (v/s -5.5% expected) and against an increase of +10.8% in the previous month. Over the weekend, China’s factory gate inflation (+6.1% y/y) cooled to a 15-month low in June (v/s +6.0% expected) compared to a +6.4% rise in May. Additionally, consumer prices rose +2.5% y/y in June (v/s +2.4% expected), widening from a +2.1% gain in May and to the highest in 23 months. Elsewhere, oil prices are lower with Brent futures down -0.36% at $106.63/bbl and WTI futures (-0.77%) at $103.98/bbl as I type. Treasury yields are less than a basis point higher at the moment. Recapping last week now and a return to slightly more optimistic data boosted yields and equities, as central bank pricing got a bit more hawkish after a dovish run. More pessimistically, natural gas and electricity prices in Europe skyrocketed, as another bout of supply fears gripped the market. Elsewhere, the resignation of Prime Minister Johnson left a lot of questions about the medium-term policy path for the UK. After global growth fears intensified at the beginning of the month, a combination of stronger production and labour market data allayed short-term aggressive slow down fears. This sent 10yr Treasury and bund yields +20.6bps (+9.1bps Friday) and +11.3bps (+2.7bps Friday) higher last week. In the US, the better data coincided with expectations that the Fed would be able to tighten policy even more, which drove 2yr yields +27.2bps higher (+9.1bps Friday), and drove the 2s10s yield curve into inversion territory, closing the week at -2.5bps. The market is still anticipating that the FOMC will reach its terminal rate this cycle around the end of the first quarter next year, but that rate was +24.4bps (+12.2bps Friday) higher over the week. A large part of the jump in yields came on Friday following the much stronger than expected nonfarm payrolls figures, which climbed +372k in June, versus expectations of +265k. It’s hard to have a recession with that much job growth, so hiking will continue. Elsewhere in the print, average hourly earnings were in line at 0.3%, with the prior month revised higher to 0.4%, while the unemployment rate stayed at an historically tight 3.6% as consensus expected. Contrary to the US, yield curves were steeper in Europe, with 2yr bund yields managing just a +1.1bp climb (-3.1bps Friday). The continent had more immediate concerns in the form of a potential energy crisis. Fears that Russia would use the planned Nord Stream maintenance period beginning this week as a chance to squeeze supplies, alongside a now averted strike in Norway, sent European natural gas prices +14.44% higher (-4.24% Friday), ending the week at €175 per megawatt-hour, levels last rivaled during the initial invasion of Ukraine. German electricity prices also took off, increasing +20.26% (-7.54% Friday), setting off fears of a genuine energy crisis on the continent. That, combined with more expected Fed tightening priced in versus the ECB over the week, drove the euro -2.23% (+0.21% Friday) lower versus the US dollar, to $1.018, the closest to parity the single currency has come in over two decades. The fears were somewhat tempered by the end of the week, when it was reported that Canada would send a necessary turbine to Russia via Germany, enabling Russia to in theory remit gas supply back to Germany post the shutdown. Through all the macro noise the S&P 500 posted its 12th weekly gain of the year, climbing +1.94% (-0.08% Friday), driven by a particularly strong performance among tech and mega-cap stocks, with the NASDAQ (+4.56%, +0.12% Friday) and FANG+ (+5.82%, -0.22% Friday) both outperforming. European equities also managed to climb despite the energy fears, with the STOXX 600 gaining +2.35% (+0.51% Friday), the DAX gaining +1.58% (+1.34% Friday), and the CAC +1.72% higher (+0.44% Friday). UK equities underperformed, with the FTSE 100 gaining just +0.38% (+0.10% Friday). The pound was in the middle of the pack in terms of G10 currency performance versus the US dollar, however losing -0.53% (+0.05% Friday). Tyler Durden Mon, 07/11/2022 - 08:03.....»»

Category: personnelSource: nytJul 11th, 2022

Top Research Reports for Amazon, Accenture & Comcast

Today's Research Daily features new research reports on 16 major stocks, including, Inc. (AMZN), Accenture plc (ACN), and Comcast Corporation (CMCSA). Thursday, June 30, 2022The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including, Inc. (AMZN), Accenture plc (ACN), and Comcast Corporation (CMCSA). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. You can see all of today’s research reports here >>>Amazon shares have significantly lagged the broader market lately, with the stock down -37.4% in the year-to-date period vs. -20.3% decline for the S&P 500 index. Amazon has missed top-line estimates in each of the last four quarters, as growth has decelerated in the post-pandemic period. Rising costs and over-capacity also appear to be headwinds. That said, Amazon remains the undisputed leader in ecommerce and cloud computing. Gaining on solid Prime momentum owing to ultrafast delivery services and strong content portfolio. Further, strengthening relationship with third-party sellers is a positive.Also, growing momentum across Amazon Music is contributing well. Additionally, strong adoption rate of AWS is aiding the company’s cloud dominance. Also, expanding AWS services portfolio is continuously helping Amazon in gaining further momentum among the customers. Further, robust Alexa skills and expanding smart home products portfolio are positives. Additionally, the company’s strong global presence and solid momentum among the small and medium businesses remain tailwinds.(You can read the full research report on Amazon here >>>)Accenture shares have modestly underperformed the Zacks Consulting Services industry over the past year (-4.0% vs. -2.5%). While Accenture is faced with a number of near-term challenges like increased competition from strong companies like Genpact, Cognizant and Infosys, and exposure to exchange rate fluctuations as a result of its global status, it has been steadily gaining traction in its outsourcing and consulting businesses. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividend payments and share repurchases, and pursue opportunities in areas that show true potential.(You can read the full research report on Accenture here >>>)Comcast shares have declined -29.7% over the past year against Zacks Cable Television industry’s decline of -31.5%. The company is persistently suffering from video-subscriber attrition due to cord-cutting. Moreover, a leveraged balance sheet is a major concern. However, Comcast is benefiting from strength in broadband subscriber base and strong momentum in the wireless business.The company’s strategy to provide high-speed Internet at an affordable price plays a pivotal role in providing connectivity and improving customer experience. Moreover, COVID-led increased media consumption and the work-from-home and online-learning waves bode well for Comcast’s Internet business. The company’s streaming service Peacock gained significant traction within a short span and is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.(You can read the full research report on Comcast here >>>)Other noteworthy reports we are featuring today include Morgan Stanley (MS), Lockheed Martin Corporation (LMT), and Caterpillar Inc. (CAT). Sheraz Mian Director of Research Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>Today's Must ReadAmazon (AMZN) Banks on Growing AWS Adoption & Prime MomentumAccenture (ACN) Gains From Service Demand Amid Talent CostHigh Speed Internet Subscriber Gain Benefits Comcast (CMCSA)Featured ReportsStrategic Buyouts Aid Morgan Stanley (MS), High Costs AilsPer the Zacks analyst, inorganic expansion plans to focus on less capital markets dependent businesses and solid balance sheet aid Morgan Stanley. Yet, rising operating costs remain a major concern.Order Growth Boosts Lockheed (LMT), Tiff With Turkey AilsPer the Zacks Analyst, steady order flow continues to boost Lockheed's revenue growth. Yet, the U.S. government's Tiff with Turkey over its involvement in Russia's S-400 may hurt F-35 program.Spikevax's FDA Authorization To Aid Moderna's (MRNA) Top-LinePer the Zacks Analyst, Moderna's (MRNA) revenues will continue to be driven by Spikevax sales, more so after FDA's emergency authorization for its use in the youngest population.Intercontinental (ICE) Banks on Buyouts & Solid Balance SheetPer the Zacks analyst, Intercontinental Exchange is set to grow on a number of acquisitions and cost synergies. Moreover, a solid balance sheet provides financial flexibility. Quest Diagnostics' (DGX) Base Business Grows Amid Dull SalesPer the Zacks analyst Quest Diagnostics' legacy base business continues to gain share and grow revenues faster than the market. Yet, declining sales growth on low COVID-testing demand is concerning.Sports Betting Expansion To Aid MGM Resorts (MGM), Traffic LowPer the Zacks analyst, MGM Resorts is likely to benefit from sports betting expansion, asset light strategy and non-gaming activities. However, decline in traffic from pre-pandemic levels is a concernAspen (AZPN) to Gain From Product Portfolio & AcquisitionsPer the Zacks analyst, Aspen's diversified product portfolio is witnessing heathy momentum. The integration with Emerson's OSI Inc and the Geological Simulation Software business also bodes well.New UpgradesStrong Demand, Strategic Initiatives Aid Caterpillar (CAT)Per the Zacks analyst, Caterpillar is poised to gain from improving demand in its end markets and focus on strategic investments in expanded offerings, and services and digital initiatives.Valero Energy (VLO) to Gain From Renewable Diesel DemandPer the Zacks analyst, Valero Energy will continue to gain from improving demand for renewable diesel, backed by global low-carbon fuel policies.Range Resources (RRC) Banks on Marcellus Shale Play AssetsThe Zacks analyst is impressed by Range Resources' 3,100 undrilled wells in the Marcellus formation of the Appalachian Basin. The wells are likely to provide production for several decades.New DowngradesCommodity Inflation & High Capex Ail Johnson Controls (JCI)Per the Zacks analyst, volatile prices of metals and fuel impact Johnson Controls. Price inflation is likely to persist in the upcoming quarters. High capex also looks to dent cash flows and margins.Soft Gross Margin a Concern for The Children's Place (PLCE)Per the Zacks analyst, Children's Place's gross margin has been hit by higher inbound transportation costs and deleverage of fixed costs due to lower net sales. It expects margin to be under pressure.High Costs, Concentration Risk Hurt Federated (FHI)Per the Zacks analyst, rising expenses due to increased distribution expenses and expansion measures hurt Federated's financials. Investment advisory fees, as a key source of revenues, are worrisome. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report, Inc. (AMZN): Free Stock Analysis Report Morgan Stanley (MS): Free Stock Analysis Report Accenture PLC (ACN): Free Stock Analysis Report Caterpillar Inc. (CAT): Free Stock Analysis Report Comcast Corporation (CMCSA): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 30th, 2022

The Bill Gurley Chronicles: Part 2

The Bill Gurley Chronicles: Part 2 By Alex of the Macro Ops Substack What if there was a way to distill all the knowledge that someone’s written over the last 25 years into one, easy-to-read document? And what if that person was a famous venture capital investor known for betting big on companies like Uber, Snapchat, Twitter, Discord, Dropbox, Instagram, and Zillow (to name a few)?  Well, that’s what I’ve done with Bill Gurley’s blog Above The Crowd.  Gurley is a legendary venture capital investor and partner at Benchmark Capital. His blog oozes valuable insights on VC investing, valuations, growth, and marketplace businesses.  This document is past two to the one-stop-shop summary of every blog post Gurley’s ever written, part 1 can be found here. February 2, 2004: The Rise Of Open-Standard Radio: Why 802.11 Is Under-Hyped (Link) Summary: WiFi will dominate wireless communications for the same reason Ethernet dominated networking and x86 dominated computing: high switching costs. This wide-scale adoption causes capital to flow into the standard as companies look to differentiate on top of the existing platform. In doing so, it further entrenches the “open-standard” incumbent.  Favorite Quote: “Open standards obtain a high “stickiness” factor with customers as a result of compatibility. Once customers invest in a standard, they are likely to purchase more and more supporting infrastructure. As their supporting infrastructure grows, their switching costs rise dramatically with respect to competitive alternate architectures. Customers are no longer tied simply to the core technology, but also to the numerous peripherals and applications on which they are now dependent. All of these things make challenging an accepted open standard a very difficult exercise.” March 24, 2004: All Things IP: The Future Of Communications In America (Link) Summary: South Korea and Japan are leading the world in broadband speed and connectivity. South Korea, for example, sports 80% broadband adoption. The US on the other hand, less than 50%. Different players battle for the future of US communication. Free services like Skype offer high-quality VoIP calls. But it’s the cable companies, with their mega-cable infrastructure, that lead the way. At the end of the day follow the money. Comcast went after Disney not because of distribution, but because of content. Favorite Quote: “Now, while voice should be free, that doesn’t mean that it will be free. The two conditions outlined above are nontrivial. First and foremost, it is not at all clear that we have enough competition in the U.S. broadband market. Innovations in the wireless market, particularly recent innovations around mesh architectures, have the opportunity to change this. As of right now, however, many users simply lack choice. Additionally, the many state municipalities around the country are eager to place their hands on VoIP. A poorly executed policy could in fact “increase” the long term pricing on voice services for all users (for example, would you really tax a free service?).” May 6, 2004: Entrepreneurialism And Protectionism Don’t Mix (Link)  Summary: Protectionism and entrepreneurialism don’t work together. One prides itself on open dissemination of ideas, talent and problems (entrepreneurialism). The other (protectionism) desires to keep what’s theirs and turn a blind eye to competition. There are seven reasons why these two ideologies don’t mix: it hurts the economy (comparative advantage), start-ups don’t receive government subsidies (that encourage protectionism), disincentivizes diversity, more start-ups start with a global presence, the hot markets are ex-US, it goes against our global open standards (WiFi, etc.) and its inconsistent with the entrepreneurial mindset.  Favorite Quote: “It is hard to imagine a successful entrepreneur arguing that he or she deserves a job over someone else that is equally skilled and willing to work for a lower wage. The entire spirit of entrepreneurialism is based on finding ways to do something better, faster, and cheaper. It is the whole nature of the game. If someone can do something better somewhere else, it simply means it’s time to innovate again – with intellect and technology, not politics.” October 19, 2004: The Revolutionary Business Of Multiplayer Gaming (Link)  Summary: Multiplayer gaming is an incredible business featuring five “Buffett-Like” business characteristics: recurring revenue (subscription pricing), competitive moats (switching costs), network effects/increasing returns, real competition with others and high brand engagement. Those that fail to realize the importance (and power) of the video game business model (40%+ operating margins) will miss a huge investment opportunity.  Favorite Quote: “Some skeptics argue that MMOG is still a “niche” business and that the same half-million users are migrating from Everquest to Ultima Online to City of Heroes. Under this theory, MMOGs will never be mass market and will never really “matter” in the $20 billion interactive entertainment business. However, with billion dollar businesses now dotting the NASDAQ, it becomes harder and harder to invoke such skepticism. And if new paradigms, architectures, and broadband speeds allow for titles that meet the needs of a wider demographic, ignoring MMOGs may be equivalent to ignoring the successor to television.” March 11, 2005: Believe It Or Not: Your State Leaders May Be Acting To Slow The Proliferation Of Broadband (Link) Summary: In 2005, rumors circulated that laws would pass eliminating a city’s right to offer telecommunications services to its citizens. Gurley suggested states should say “no way” to this offering, and opined six reasons why (straight from the post):  The primary reason for the proposition is to reduce or eliminate competition for incumbent telcos An oligopoly doesn’t make a marketplace Taking rights from municipalities will have negative overall impact on American innovation  Even if a city has no intention of deploying wireless services, it is still in that city’s best interest to retain the right to do so In 2005, isn’t it reasonable for a city to choose to offer broadband as a community service?  A founding American principle — localized government whenever possible Favorite Quote: “In what is ostensibly the cornerstone “democracy” on the planet, one would think that the citizens in each of America’s cities could simply “vote” on the services they believe make sense for their city to provide.  Running a wireless network in a city like Topeka, Kansas simply has no overriding impact on the state as a whole.  As Thomas Jefferson aptly wrote in a letter to William Jarvis in 1820, “I know of no safe depository of the ultimate powers of society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform them.”” March 21, 2005: The State Of Texas Refuses To Block Municipal Broadband (Link) Summary: Gurley’s post before this one did its job and Texas removed the harsh language around cities offering broadband access to its citizens. According to Gurley, the battle moved to Colorado.  Favorite Quote: “This proposed bill, in its original form, would prohibit a city from helping any new carrier whatsoever get started.  It’s a pure and blatant anti-competitive move.  It’s been modified slightly, but it is still one of the harshest proposals of any state, and once again created only to help the incumbent carriers by removing competition.  Consumers do not benefit from this language.” March 24, 2005: Texas Two Step – Backwards (Link) Summary: After celebrating the removal of restrictive broadband language three days prior, Texas reinserted the notion. What’s crazy is that the member who reinserted the language, Robert Puente, serves in a district where a large telco company has its headquarters. Hmm …  Favorite Quote: “It is shocking that these local reps really don’t care if broadband deployment in America continues to fall further and further behind the rest of the world.  Just shocking.” June 2, 2005: Texas Sets Key Precedent For Other States In Refusing To Ban Municipal Wireless (Link) Summary: It’s interesting that fixed broadband incumbents in Texas are so opposed to wireless broadband. The incumbents claim wireless is a weaker form of their product. But if it’s so weak, why do they want it banned from their state? Why won’t they let natural competition run its course? If it is indeed weak, there shouldn’t be a reason to impose sanctions and restrictions.  Favorite Quote: “The reason the pro-broadband movement was successful is because they organized, they gathered the real data on the success of municipal wireless deployments, and they were able to inform the citizens about this effort by the incumbents and their key legislators to use regulation to restrict competition.  They leveraged the Internet, blogs, and mailing lists, and made a huge difference.  The tech community also played a role with the AEA, the Broadband Coalition, and TechNet all speaking out against this effort to intentional slow technical progress.  These lessons and resources are now focusing on other states to ensure the Texas outcome.” July 12, 2005: DVD Glut (Link) Summary: Gurley saw the rise of TiVo and its effect on the DVD industry. Why would people pay for DVDs when they can record their favorite movies on TV and watch them whenever they want? There is no practical use for DVDs outside nostalgia and collection.  Favorite Quote: “Could it be that people are watching Shrek 2 on Tivo and saving that on Tivo for future viewing?  Could it be that other activities, such as Internet usage, is infringing on DVD time?” July 19, 2005: Do VCs Help In Building A Technology Platform? (Link) Summary: There are two important implications for venture capital’s lack of investment in Microsoft’s .NET platform. First, VCs are investing on the Open Platform. This is likely due to (what Gurley calls) “a more benign” platform. Such a platform allows for more creativity and application. Second, VCs aren’t investing in .NET applications because Microsoft’s simply going up the software vertical (owning each spot). There is a lack of opportunity within the existing .NET framework.  Favorite Quote: “Venture Capitalists look to the public markets for clues on where to go next.  There is no point in investing in technologies that don’t lead to liquidity events.  What the article stresses is that the majority of VC money these days is being spent on top of the Open Source platform rather than the Microsoft’s .Net platform.” July 22, 2005: Wifi Nation… (Link) Summary: This article gives us an excuse to talk about Innovator’s Dilemma. Clayton Christensen coined the term in his book with the same title. Wikipedia defines the term as, “the new entrant is deep into the S-curve and providing significant value to the new product. By the time the new product becomes interesting to the incumbent’s customers it is too late for the incumbent to react to the new product.” In short, WiFi is disrupting the incumbent broadband and their end consumers. Also, WiFi isn’t built for the incumbents. It’s built for the next generation.  Favorite Quote: “What you will see, and what many continue to deny, is that Metro-scale Wifi isn’t a theory, its a reality.  The networks are live.  They perform way better than EVDO or any cellular alternative. They are cheaper to deploy.  AND, there is huge momentum around more and more networks.” Years: 2006 – 2008 April 5, 2006: Why SOX Will Lead To The Demise Of U.S. Markets (Link) Summary: Sarbanes-Oxley (SOX) killed the small and micro-cap public market spirit. Like most regulations, the creators of SOX thought their stipulations would preserve the growth of public markets. Instead it stunted growth. SOX is an expensive requirement for smaller public companies. The costs disincentivize companies from going public. In return, US capital markets offer less opportunities than global companions. Will this lead to more money flowing overseas? Favorite Quote: “Ironically, the two gentlemen that created SOX did it with the intention of “preserving” U.S. capital market leadership. Their fear was that people viewed our markets as too risky, and so they created SOX to ensure that investors would “trust” our markets.” April, 2006: As Wifi Grows, So Do The PR Attacks (Link) Summary: There will always be haters when new technology replaces old, resentful incumbents. Can you blame them? WiFi completely destroyed their business model. Of course they’re going to run sham campaigns. But that’s the beauty of the Innovator’s Dilemma. WiFi doesn’t care about fixed broadband and incumbents. It’s serving its new wave of customers who want something incumbents can’t offer. Look for this in other up-and-coming technologies.  Favorite Quote: “Better performance than EVDO at a much lower cost.  You won’t stop this with an AP article.  Are their issues?  Sure, but I drop 5 cell calls a day in Silicon Valley and that technology (cellular voice) is over 25 years old.”  April 27, 2006: MMOs (MMORPGs) Continue To Rock (Link) Summary: Gurley again emphasizes the importance of MMO video games — particularly out of Asia. In fact, he mentions that Nexon (Japanese gaming company) plans to file on the JSE. Gurley believes the JSE filing is directly correlated with Sarbanes Oxley (from the article above). Regardless, the real winners in the video game industry are coming from Asia. Winning games will be based on community and entertainment, rather than pure competition. It’s no wonder Fortnite is so popular today. Gurley gave us clues almost 20 years ago.  Favorite Quote: “Many of the rising stars of multi-player interactive entertainment are more social than interactive. They also target much broader demographics than gaming ever dreamed of hitting. Consider three sites targeted at younger children and teens that are all doing extremely well — NeoPets, HabboHotel, and GaiaOnline (Benchmark is an investor in HabboHotel).” June 19, 2008: Back To Blogging (Maybe)… (Link) Summary: Gurley returned from his writing break to mention a few of his favorite reading sources. Gurley notes that he reads each of these websites every morning:  TechCrunch GigaOm Marc Andressen’s Blog Favorite Quote: “The bottom line is I have been really busy. Busy with our investments here at Benchmark, and busy with three growing kids at home.  But in the end, I am quite fond of writing, and I have been inspired by some of the great writing of others.” June 30, 2008: Bleak VC Quarter? Why? (Link) Summary: June 2008 marked another dreary quarter for venture capital. Not one single VC-backed company went public. At first glance, this seems bad for venture capital. But looking deeper, it’s not venture capital that’s the issue. It’s the public market. Between regulations and SOX costs, small companies are opting to remain private at record numbers. As Gurley notes, fund managers want high growth and capital appreciation. But these small growth companies don’t want the issues of being a public company.  Favorite Quote: “This passionate desire to be public is completely gone in Silicon Valley. For reasons you could easily list – Sarbanes Oxley; 12b1 trading rules; shareholder litigation; option pricing scandals; personal liability on 10-Q filing signatures – it is simply not much fun being a public executive.” July 22, 2008: BAILOUT What? (Link) Summary: Fascinating how relevant this quote is for 2020. What we’ve seen from the US government during the COVID pandemic is a double-downed effort on its bailout precautions. Even going so far as to buy bond ETFs on the open market! Capitalism requires failure. It requires weak businesses to fall by the wayside in exchange for stronger competitors.  Favorite Quote: “Is our government really going to bail out equity investors in a failed business enterprise? I totally get keeping America afloat, but it is critical that failed businesses FAIL. They must FAIL. You can’t provide band-aids to equity failure. The whole system will come to a halt. Risk that pans out must result in failure. it is a crucial part of the system.” December 1, 2008: Benchmark Capital: Open For Business (Link) Summary: Gurley and the Benchmark team continued investing while the rest of their VC peers cowered in fear during the bowels of the Great Recession. Investing when others are fearful is not only a sign of a great VC firm, but any great company.  Favorite Quote: “I can’t speak for other firms, but make no mistake about…Benchmark Capital is wide open for business and we are eager to invest new capital behind great entrepreneurs.  Right now.  In this environment.  Today. You may wonder why I feel the need to make this pronouncement, and you may even consider this a stunt.  It is not.   We have made fourteen new investments this year, and are actively considering new investments each and every day.” December 5, 2008: Do VCs Help In Building A Technology Platform; Part 2 (Link) Summary: Microsoft offers three years of free software/service to startups. This is a clear signal that Microsoft understands the power of platforms and where companies choose to build their products. Otherwise, as Gurley notes, why offer it for free? This comes on the heels of three new cloud platform technologies entering the space: Facebook, Salesforce and Amazon AWS. VCs may not choose which platform wins, but they choose which platform gets capital. And to some, that’s the same thing.  Favorite Quote: “It obviously would be overstating it to suggest that VCs help “choose” the platform that wins. That said, it is a powerfully positive indicator if VCs show confidence in a new platform by shifting where they deploy their capital.” Years: 2009 – 2011 February 1, 2009: Google Stock Option Repricing: Get Over It (Link) Summary: Retail investors, bloggers, and financial pundits argued that Google’s Stock Options Repricing hurt the “common” shareholder. Gurley thinks stock options shouldn’t matter because common shareholders gave up their rights (more or less) when investing in Google shares. The fact is, Google’s founder and original shareholder shares carry 9/10ths voting power. That means minority (aka second-class citizen) shareholders get 1/10th. In other words, deal with it.  Favorite Quote: “So my reaction to anyone who owns Google stock and is sore over this decision — Get Over It.  You bought a stock where you gave up the ability to vote on such things, and if you don’t like it, sell the stock.  But you have no right to complain, as the rules were laid out from the beginning.” February 11, 2009: Picture Proof Of The Innovator’s Dilemma: SlideRocket (Link) Summary: With a team of 3 engineers and a fraction of Microsoft’s budget, SlideRocket created (arguably) a better version of PowerPoint. According to Gurley, SlideRocket is a perfect example of the Innovator’s Dilemma. PowerPoint took (probably) billions of dollars in R&D and thousands of engineers to create. SlideRocket did it with 4 orders of magnitude less resources.  Favorite Quote: “One subtlety of this is that it allows others to catch up and basically recreate the same thing for a fraction of the cost.   In SlideRocket’s case, it appears that a team of 3 engineers with primary work done by the founder, have recreated PowerPoint (leveraging Flex of course).”  February 18, 2009: Just Say No To A VC Bailout: A Green Government Venture Fund Is A Flawed Idea (Link) Summary: Some VC investors wanted a bailout from the government during the GFC. Gurley originally thought this was a far-cry from a lone complainer. Then he read an article by Thomas Friedman suggesting the same thing: a bailout for VC targeted at green-tech companies. According to Gurley, VC bailouts are flawed for six reasons: There are no lack of capital in VC VCs don’t deserve a bailout Those that need bailout are (likely) bad ideas Excess capital hurts markets Good companies don’t lack for capital Use customer subsidies instead of government-backed VC investment Favorite Quote: “Great ideas have never suffered from a lack of capital availability.  Bringing extra government dollars to the investment side will only ensure that marginal and sub-par companies get more funding dollars, which historically has had a perverse and negative effect on the overall market.” February 22, 2009: Just Say No To A VC Bailout – Part 2 (Link) Summary: Continuing the rant from the previous blog post, Gurley hits on three main criticisms with Friedman’s cry for a VC bailout. First, Friedman suggested that the US Treasury give the Top 20 VC firms up to $1B to “invest in the best VC ideas”. When you consider the 2% annual fee each year that VC’s take, you’re effectively giving these firms an additional $4B in partners’ fees. Finally, Gurley hammers home the idea that to win in green-tech you need to incentivize the customer on the demand side. Create a positive ROI proposition for the customer to use the product or service.  Favorite Quote: “The key is to create an ROI positive investment for the end customer through subsidies.  Ethanol isn’t falling to succeed because of a lack of capital — it’s a problem with customer ROI.  Invest through subsidies in making the market huge and ROI positive.  Capital alone will not solve the problem as the ethanol case proves.” February 27, 2009: Perfect Online Video Advertising Model: Choose Your Advertiser (Link) Summary: Gurley reveals his “perfect online video advertising model” in which consumers can choose their advertiser. It works like this. Before an online premium or VOD show starts, the content creators present the consumer with a list of 4-9 sponsors for the programming. Then, the consumer picks which sponsor they’d like to see when the inevitable ad runs during their program. The benefit to this is that content creators would know their customers’ interests to the tee, which would allow them to raise prices on advertising channels (read: higher revenue).  Favorite Quote: “Just because I am a male between 18-24 and watching “Lost” doesn’t mean I want an XBOX.  You are more likely to guess that i might want it, but you would be 10X better off if I chose XBOX as my sponsor at the start of the show.  Then you would KNOW I have an interest — no more guessing. Making predictions is always a dangerous game, but I am fairly certain that this will be the video ad model of the future.  It makes way too much sense not to work.” March 2, 2009: Looking For Work: Are You An Insurance Agent? (Link) Summary: One of Gurley’s investments had an unusual circumstance during the GFC: they had excess demand for work. LiveOps, a virtual SaaS call center on the cloud, leverages a network of work-from-home call center operators. At the time of writing, LiveOps had 20,000+ live call-center agents working from home assisting companies like Aegon, Colonial Penn, and American Idol.  Favorite Quote: “Their core technology is a SAAS “contact center in cloud.” Just like anyone’s call center, it is a four-9’s operation that is highly resilient. What’s different, and very unique, is that the agents on the other end don’t actually work for LiveOps – they work for themselves. So far, over 20,000 “crowd-sourced” agents are now working from home on behalf of LiveOps customers – companies like Aegon, Colonial Penn, etc. One really cool customer example is American Idol. For Idol Gives Back, AI’s charity campaign, over 4000 LiveOps agents handled over 200,000 calls in less than five hours. Only a crowd-sourced play could handle such a ramp.” March 9, 2009: How To Monetize A Social Network: MySpace And Facebook Should Follow TenCent (Link) Summary: Social networks had trouble monetizing their websites. MySpace and Facebook failed to generate revenue like Yahoo, which did $7B at the time of writing. The problem wasn’t growing the userbase (both sites had tremendous user growth). It was the dependence on advertising to generate the lion’s share of their revenues. Gurley compares MySpace and Facebook to Tencent (700.HK). The two primary drivers of revenue for Tencent are digital items and casual game packages and upgrades. These are significantly higher-margin businesses than advertising. At the end of the day, social networks are social status symbols. This means if you want to leverage your business, you need to provide users with ways to improve their social status. Favorite Quote: “If you removed the Chanel logo from them, and offered them for $50 cheaper, you could not sell a pair.  Not one.  Why?  People are buying an image that they want to project about themselves.  Without the logo, they fail to make that statement.  The same is true for watches, clothes, cars, sodas, beers, cell phones, and many more items.  People care greatly about how they are perceived and are willing to part with big bucks to achieve it.  Digital items are merely the same phenomenon online.” March 26, 2009: Note To Timothy Geithner: Do Startups & Venture Capitalists Really Need More Regulation? (Link) Summary: The US government levied Sarbanes-Oxley on all public companies after the whole Enron, WorldCom saga. The purpose? Protect investors from future frauds. While the efficacy of “Sarbox” remains in question, one thing doesn’t: the cost on small public companies. Sarbox costs ~$2-$3M to implement. This makes it nearly impossible for small companies to go public because the Sarbox costs eat away all potential operating profits. Overburdening small companies could restrict the pipeline of new public IPOs.  Favorite Quote: “And remember that the largest companies in America that were created in the last 35 years (MSFT, GOOG, AAPL, CSCO, INTC) were all small venture-backed companies at one point in time.  Do we really want to inappropriately restrain or throttle the future pipeline of such companies in America?” May 2, 2009: Swine Flu: Overreaction More Costly Than The Virus Itself? (Link) Summary: It’s amazing how relevant this blog post became during the COVID-19 pandemic. Gurley suggests that in some cases, overreacting to news (like swine flu) can have far worse consequences than the natural course of the virus itself. For example, Mexico’s economy teetering on the brink of insolvency as tourism represents a third of their economy. The argument for overreacting is that it prepares people for the worst-case scenario. Yet that decision has consequences. Consequences we can’t see, and might not see for a long time.  Favorite Quote: “Some people rationalize that this hysteria serves a noble purpose, in that it prepares us for the worse.  This, however, ignores the fact that there are tremendous real economic costs to overreaction, and that sometimes overreaction has far-reaching negative impacts which can be many times greater than that of the original problem.” May 8, 2009: Second Life: Second Most Played PC Title, #1 In Minutes/User (Link) Summary: Gurley’s investment in Linden Lab paid off big time in May 2009 when Linden’s hit game Second Life ranked as the #2 most-played PC title. The game trailed World of Warcraft in number of users, but ranked first in number of minutes played per user. Data like this further reiterates Gurley’s earlier claims that selling goods online (digital signs of social status) can make for a great business. It also shows people love distracting themselves from their everyday lives.  Favorite Quote: “The truth of the matter is that the company is quite large, it’s growing, it’s profitable,  it has hired a number of great people over this time frame, and as the data shows it’s kicking butt. Note that the data also shows SecondLife actually leads WOW in terms of minutes played per user.”   May 10, 2009: Bill Gurley’s Online Video Market Snapshot (Link) Summary: Gurley did an on Hollywood talk about the massive changes in the Online Video Market. The link has an 18-minute video where Gurley outlines five things that matter in the coming online video market battle:  Great content is super expensive Affiliate fees are a “huge fucking deal”  The Netflix Business model is widely misunderstood HBO and the NFL are incredibly well-positioned companies Wireless will not save the day  Favorite Quote: I didn’t have a favorite quote from this post as it was mainly a link to the video and slide deck. I highly recommend watching the video and scanning through the deck. It’s 18 minutes long but you can watch at 1.5-2x speed without issue.  Tyler Durden Sun, 06/19/2022 - 17:30.....»»

Category: blogSource: zerohedgeJun 19th, 2022

How To Retire Early – The Definitive Guide

Have you dreamed of early retirement? ‌How about the freedom it brings – financial and otherwise? ‌It’s not just you who dreams of‌ ‌early‌ ‌retirement. In fact, since 1992, people have embraced the F.I.R.E. movement. ‌It has become more popular in recent years. ‌As an example, Natixis Investment Managers reported that Generation Y (ages 26-61) […] Have you dreamed of early retirement? ‌How about the freedom it brings – financial and otherwise? ‌It’s not just you who dreams of‌ ‌early‌ ‌retirement. In fact, since 1992, people have embraced the F.I.R.E. movement. ‌It has become more popular in recent years. ‌As an example, Natixis Investment Managers reported that Generation Y (ages 26-61) wants to retire at the age of 60 on average. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more There is a slight hiccup, unfortunately. 59% of Americans don’t believe that have enough to retire, let along retire early. There are number of reasons why a majority of people feel this way. Everything from overwhelming debt, the impact of the pandemic, and inflation. At the same time, all is not lost. ‌As well as getting your retirement savings back on track, you might be able to‌ still ‌retire‌ ‌early. How? Well, let’s show you in the following guide. What is Early Retirement? Before‌ ‌you commit to early retirement, make sure you understand what exactly it means. In the past, early retirement was defined as retiring before the age of‌ ‌65. ‌Technically, this is true. Nevertheless, it’s an evolving concept. You don’t have to give up work completely by taking early retirement. ‌Rather, your employment is purely voluntary. ‌That means you’re free to live your life as you see fit. Why? Because you have the financial freedom to do so. Believe it or not, people as young as 30 or 40 can take early retirement. ‌But most of them also work in some capacity, such as with their passion projects or other endeavors. More simply put, people who work this way do it for themselves, not because they have to. It is important to remember that work can be fulfilling, meaningful, and purposeful. ‌Additionally, some studies suggest that people who retire early and do not work at all may die earlier than those who remain employed. Conversely, early retirement enables you to spend more time with your family and friends. ‌You can‌ ‌also‌ ‌start your own company or pursue new hobbies. Or, maybe you’re burned out from the daily grind. For many, stopping working isn’t the ultimate goal. ‌Instead, it’s about having the freedom to do what you want. What are the Pros and Cons of Early Retirement? Getting to early retirement can be tough. But the rewards are typically worth all of the struggles once you reach it. ‌Again, as soon as you retire, you are free to spend it as you choose. Among the things you can do with all that free time are: Bond with family and friends. You can visit your friends and family more often when you retire and stay for longer periods of time. Take extended vacations. The question might arise, “Who on earth can spend a month in Europe or take weeklong cruises?” ‌Now that you’re retired, the answer is obvious: You can. Enjoy hobbies. Your days can be filled with the things that bring you joy once you retire, whether that is golf or ‌reading. Volunteer. There are many reasons why people do not volunteer, one of them being lack of‌ ‌time. ‌Giving back to your community becomes a lot easier once you retire. Early retirement might sound amazing, but there are a few downsides. ‌There are even experts who claim that early retirement isn’t worth the effort. ‌For‌ ‌example, 64% of Americans live‌ ‌paycheck‌ ‌to‌ ‌paycheck. ‌Thus, pushing yourself to fit into an early retirement plan can be stressful and counter-productive. Another drawback? You might get bored. In early retirement, you may wish that you were still working so you would have something to keep your mind occupied. Yes. You get to travel and engage with new hobbies. But, will this truly keep you stimulated for the next 40 or 50 years? Overall, the financial risks of early retirement are substantial. ‌That‌ ‌is,‌ ‌unless you‌ ‌have‌ ‌a number of sources of income or have ‌more‌ ‌than‌ ‌enough‌ ‌money‌ ‌in‌ ‌the‌ ‌bank. If not, early retirement may ‌completely bankrupt your dreams. Phase 1: Pre-Retirement Planning When you’re young, you can adopt the right mindset and financial plan to help you retire early. If that sounds daunting, here’s how you can get the ball rolling. What does early retirement mean to you? Retiring early doesn’t mean you have to stop working — unless that’s your endgame. ‌Early retirement is instead a term used to describe a situation where an individual is not working‌ ‌‌to‌‌ ‌‌support themselves. It simply means that you’re financially independent enough to stop working your 9-to-5 job. ‌Nevertheless, you can still work part-time or find ways to earn a passive income. But, since you aren’t putting in 40 pus hours a week working, you can spend that time however you please. Early retirement begins with you figuring out what it means ‌to‌ ‌you. ‌‌‌After that, you can begin to move in that direction. ‌ The following questions may help you define‌ ‌your‌ ‌ideal‌ ‌early‌ ‌retirement: Are you planning on moving or staying in the same place? How will the cost of living change for you? Which kind of lifestyle are you looking for? Hobbies and travel are expensive, for example. ‌But, volunteering and spending time with your family are not. Would you prefer to work‌ ‌part-time,‌ ‌full-time,‌ ‌or‌ ‌not‌ ‌at‌ ‌all? By answering these questions accurately, you’ll be able to calculate when you’ll be able to retire. Save money on a larger scale. It’s crucial that you change your attitude about money if you’re committed to retiring‌ ‌early. ‌The process begins with making conscious trade-offs when spending money. Contrary to popular belief, ‌fiscal discipline along will not solve the problem. For example, cutting back on high-cost expenditures is ‌more sensible than giving up your daily latte. ‌You can stick to your budget by making your coffee at home. But you won’t be able to retire early with this method. You should, simply put, live ‌below‌ ‌your‌ ‌means. ‌This will allow you to save a significant portion‌ ‌of‌ ‌your‌ ‌earnings. What’s the appropriate amount to save? ‌Planners recommend saving 30% of one’s earnings over 40 years,‌ ‌instead‌ ‌of‌ ‌10%‌ ‌to‌ ‌15%. You might think that’s an impossible‌ ‌goal. ‌But it’s possible if you automate your savings. The reason being is that you’ll stash this money away before you can spend it. ‌You should also contribute to your savings whenever you receive a windfall of cash, such as a bonus or tax refund. Keep your lifestyle in check. It’s okay to reward yourself when you get a ‌generous raise or promotion. ‌However, with greater earnings comes a natural tendency to spend more money. ‌Financial‌ ‌advisors‌ ‌refer to this as “lifestyle creep.” How can you keep your lifestyle in check? You can save half of those additional dollars by setting up automatic deductions from your paycheck or making a bank transfer. But you should also refrain from feeling restricted when using your dollars. ‌If you find ways to cut costs or search for the best deals, you can still travel. Perhaps you could stay with a friend or family member rather than book a hotel. This can’t be stressed enough. Retiring doesn’t mean that you stop‌ ‌working. Taking a part-time job or starting a side business are possibilities. ‌Because you’re still generating an income, you can still enjoy a comfortable lifestyle. Become more aware‌ ‌of‌ ‌your‌ ‌financial‌ ‌decisions. Regardless of your retirement plan, the only way to achieve your retirement goals is to make wise financial decisions. ‌You can secure your financial success in the future if you make smart decisions today. What’s the best way to get started? ‌Get the basics down first, like; Spending only what you can afford. Create a budget to keep you from overspending. ‌‌If necessary, try creating a mock retirement budget with your monthly expenses for retirement as well. ‌To calculate how much maintaining that lifestyle would cost, you can work backwards. Paying‌ ‌off‌ ‌high-interest debts,‌ ‌such‌ ‌as‌ ‌credit‌ ‌cards. Creating a fund for emergencies so that you won’t be forced to tap into‌ ‌savings. Putting your tax returns and bonuses to good use, as well as your savings from unnecessary purchases. The obvious examples are paying off debt or contributing to a retirement or emergency fund. But, let’s also address the elephant in the room. Housing. Your‌ ‌house is probably your biggest expenditure, and therefore your biggest opportunity for savings. ‌According to the Bureau of Labor Statistics, Americans spend a third of their income on housing. In order to figure out what you can realistically afford, check out calculators provided by Bankrate, NerdWallet, or Mortgage Loan. If you can’t downsize and buy a home that you can actually pay off your mortgage in a shorter time-frame. More likely than not, you’ve heard this advice before. ‌There’s a good reason for this. ‌By following these steps, you can put money aside, plan for the future, and manage the unpredictable. Maximize your tax savings. Do you really want to retire‌ ‌early? ‌As much money as possible should be deposited in tax-favored accounts if that’s the case. Maximizing your 401(k) would be the logical starting point). ‌As of 2022, employees can contribute up to $20,500 ‌to‌ ‌their‌ ‌401(k). ‌The catch-up contribution for individuals over 50 years old in 2022 will be $6,000 more. You can also choose‌ ‌a‌ ‌Roth‌ ‌IRA. A Roth IRA contribution is‌ ‌after-tax. ‌However, you must meet certain income requirements to contribute to a Roth IRA. ‌To qualify, your Modified Adjusted Gross Income (MAGI) must be under $144,000 in‌ ‌2022 if you’re filing as a single person. ‌To contribute to a Roth IRA for tax year 2022, your MAGI must be less than 214,000 if you’re married and file jointly. Combined,‌ ‌you‌ ‌can‌ ‌contribute‌ ‌these amounts to all ‌your‌ ‌IRAs; $6,000 for those under 50 $7,000 if you’re 50 years old or older Additionally, you can contribute a portion of the income from your side job as well as your regular job to a SEP-IRA. You may also want to consider putting as much into a health savings account as possible if you have a high-deductible health plan. ‌HSAs can sometimes be a better investment than 401(k)s when certain factors apply. ‌HSA earnings are not taxed if they are used to pay for qualified medical expenses today or in the future, and taxable withdrawals are also not allowed. ‌For a self-only plan, you can contribute $3,650, and for a family plan, $7,300 as of 2022 Phase 2: ‌Getting Ready to Dive Into Early Retirement Nearing your early retirement? ‌Make sure these key elements of your plan are in place. Make an estimation of‌ ‌your‌ ‌retirement‌ ‌savings. In order to plan a successful early retirement lifestyle, you must estimate your expenses and income. ‌You can estimate your retirement income by combining your Social Security, pension, and any side jobs you have. Most retirees depend on Social Security and, ‌less frequently, pensions for income. ‌With a pension, the payments are often available as early as age 55, and with Social Security at age 62. ‌If you take early benefits, however, your monthly benefits will be smaller. ‌In the long run, your retirement plan will be affected by Social Security, even if it is only the cream on top. You will be able to see the projected benefits on the Social Security website if you file early. ‌If you’re part of a couple who earns two incomes, it’s best to discuss your options with a Social Security offiicial or a financial professional. Suppose you die with a higher monthly benefit than your spouse. ‌The‌ ‌earlier you claim your benefits, the less you will receive, and the less your spouse will receive in the event you pass away. Ask your employer’s pension administrator how much your pension payment will be at different ages. ‌With this info, you’ll have a better idea of how much income you’ll get. You may have difficulty calculating your expenses, however. Establish a‌ ‌retirement‌ ‌budget. When you are within five years of your desired early retirement, think about the lifestyle you want and what it might cost you. ‌Determining where and what activities you will engage in will assist you with this. ‌It’s an incorrect belief that a person’s expenses will decrease after they stop working. ‌Actually, retired people spend about 20% more during retirement than during their working years. Even though you’ll have more time to spend on hobbies and trips, this obviously costs more. ‌Moreover, if you leave the workforce young, you can enjoy an active and most likely costly retirement if you are healthy and energetic. Budget items may rise faster than inflation overall, so you must keep this in mind. ‌For example, health care costs could rise as much as 7% or 10% annually. In some cases, a retirement income calculator such as‌ ‌T. Rowe Price’s Retirement Income Calculator ‌will let you know whether your retirement portfolio will allow you to retire early. Your retirement will be delayed if you reduce your lifestyle expectations, boost your savings, or delay your retirement. Just add up your pension, Social Security, and savings. ‌After this, calculate how much you would have to spend every month (including income taxes) if you were to retire five years early and become eligible for Social Security and pension benefits earlier. ‌It should give you an idea of how much you will need in retirement. But, to give you a ballpark figure, the Bureau of Labor Statistics’ Consumer Expenditure Survey found that the average household earns $84,352 a year. In addition, the average household spends $72,258 each‌ ‌year. ‌The data also shows that roughly $5,854 is spent monthly on bills and other expenses. Make sure your health insurance is in place. Nobody wants to blow through retirement savings by paying for unanticipated medical expenses in the years between early retirement and Medicare eligibility. ‌Until‌ ‌you‌ ‌are eligible for Medicare, you will still need private health insurance. COBRA allows you to keep your employer-sponsored health insurance. But, you can also join the plan of your spouse or enroll in a health insurance plan through ‌AARP and other organizations may offer‌ ‌discounts‌ ‌on‌ ‌coverage as well. You might also want to think about long-term care insurance. ‌It’s not just the long-term care costs that can be expensive, it’s medical insurance too. ‌In order to save money, you might like to research it while you’re still young. Even if you have some sort of health insurance, taking care of yourself is a surefire way to keep healthcare costs at bay. The most obvious places to start is eating a nutritious and balanced diet and engaging in physical activity. Don’t take any risks‌ ‌with‌ ‌your‌ ‌portfolio. Suppose you’re planning to retire at 50. You should be more conservative with your portfolio in your late 40s than your peers who plan to keep working until 65. ‌The objective is to avoid what’s called‌ ‌”sequence‌ ‌of‌ ‌return‌ ‌risk.” ‌This is the risk of having a series of bad markets occur at a time when your finances are particularly fragile. In fact, according to Dr. Wade Pfau, professor of retirement income at the American College of Financial Services, this is what makes the first couple of years in retirement so dangerous. “I’ve estimated that if somebody is planning for a 30-year retirement, the market returns they experience in the first 10 years can explain 80% of the retirement outcome,” he told Barron’s. “If you get a market downturn early on, and markets recover later on, that doesn’t help all that much when you’re spending from that portfolio because you have less remaining to benefit from the subsequent market recovery.” The solution? “There are four ways to manage the sequence-of-return risk,” Dr. Pfau adds. “One, spend conservatively. Two, spend flexibly.” You can manage sequence-of-return risk if you can reduce your spending after a market downturn by not selling as many shares to meet spending needs. “A third option is to be strategic about volatility in your portfolio, even using the idea of a rising equity glide path,” he states. “The fourth option is using buffer assets like cash, a reverse mortgage or whole life policy with cash value.” Create a 10-year financial buffer. “At least five years before their early retirement date, investors should set aside the amount of money required to provide income for their first five years of retirement,” says Phil Lubinski, CFP, co-founder of IncomeConductor. “This will effectively put a 10-year buffer between the money they need for early income and any market volatility that could take place during their five-year countdown to retirement.” By setting aside this money from their main retirement savings, investors are able to protect the wealth they’ve accumulated. ‌The recommended five years of income can be rolled into a new IRA. ‌These funds can then be invested in a portfolio designed for capital preservation, such as one using cash-based investments such as‌ ‌Treasury‌ ‌Bills‌ ‌or‌ ‌bonds, suggest E. Napoletano and Benjamin Curry in Forbes. With a separate account for the money you’ll need for retirement, you give yourself a cushion in case the market experiences‌ ‌volatility. ‌You’ll have years to bounce back from any losses experienced in your remaining investments under this model. Phase 3: ‌Maintaining and Sustaining Your Finances So, you were able to retire early. Congratulations! ‌However, while you’re in the initial stage of retirement, keep an eye on your compass and be prepared to correct course. Keep your retirement funds secure. “One of the biggest misconceptions many people have is that retirement simply means living off of their pension, Social Security, or retirement savings,” notes Pierre Raymond, cofounder of Global Equity Analytics & Research Services LLC (GEARS). “While this may be the case for a minority of people, the latter reveals that some Americans have still not placed any stress on their financial future when they reach the age of retirement.” A retiree’s expenses can become more manageable by investing in various stocks and portfolios, or perhaps taking out an annuity. An annuity offers a guaranteed lifetime income. Because of this, it’s an ideal supplement to other income sources. Raymond also suggests that you have an investment portfolio and minimize withdrawals from retirement funds. And, as mentioned several times already, think about how you can introduce new income streams. Some suggestions would be: Starting a blog or online course. Renting out a spare bedroom. Providing baby-or-petsitting services. House-sit internationally. Being a freelancer or local business consultant. Tutoring. Selling handmade goods online. Take a strategic approach to‌ ‌Social‌ ‌Security. Did you know ‌you‌ ‌can‌ ‌‌‌manage ‌the‌ ‌size‌ ‌of‌ ‌your‌ ‌Social‌ ‌Security‌ ‌check? ‌Yes, you can – to an‌ ‌extent. ‌The key is when you start getting‌ ‌benefits. “About 1 out of 3 Social Security recipients apply for benefits at the earliest age, which is 62,” writes author and certified financial planner Liz Weston. “It’s often a mistake.” “Benefits grow by a guaranteed 5% to 8% each year that the applicant delays,” ‌she‌ ‌adds. “Starting early also can stunt the survivor benefit that one spouse will have to live on when the other dies.” Don’t rush it. ‌Wait‌‌ ‌‌until the right time comes. ‌This will increase your Social Security benefits. Seek the advice of‌ ‌a‌ ‌financial‌ ‌advisor. In order to retire early there are two major challenges to consider: It takes less time to save for retirement. After retirement, you’ll have more free time. You should work with a financial advisor regularly — unless you’re a financial expert yourself. ‌An advisor can help you to develop an investment strategy so that you can meet your retirement goals. ‌In addition, a financial planner can show you how much you have to invest per month to hit your goals over‌ ‌time. Even after retirement, it’s possible for you to work with your advisor to ensure that your retirement funds last. ‌Income streams include dividend income, required minimum distributions, Social Security, defined-benefit plans, and rental income from real estate. Trust is imperative since you’ll probably work together for a long time. ‌Likewise, an advisor’s fee shouldn’t just be based on their time, but also their expertise. ‌In the end, hiring an advisor with the right expertise is more than worth it. Follow your plan, but enjoy life as well. Discipline and time are both essential for executing and maintaining your plan. ‌Save and invest while you can, but don’t forget to take advantage of your youth. ‌If you dream of touring Patagonia, you should do it when you’re younger and ‌in‌ ‌good‌ ‌health. In the words of early retiree Steven Adcock, “Sacrifice is necessary to retire early, but it’s not all we do, either. It is important to treat and reward ourselves along the way by celebrating those smaller achievements.” Frequently Asked Retirement Questions When can I retire? There is no set age to retire. ‌As long as you are able to retire, you can leave the workforce whenever you wish. There are some factors, however, that may limit when you can‌ ‌retire. ‌Pensions are usually available to employees after 20 to 30 years of service. Aside from that, Social Security benefits aren’t available until the age of 62. And Medicare won’t kick in until ‌65. ‌So, people covered by their employer’s health insurance may not be able to retire until 65. How‌ ‌much‌ ‌money‌ ‌do‌ ‌I‌ ‌need‌ ‌for retirement? An individual’s retirement income depends on a variety of factors. The factors considered include Social Security benefits, monthly expenses, retirement age, and life expectancy. ‌It’s helpful to have a financial advisor help you figure out how much you’ll need for a comfortable retirement. How will early retirement affect my Social Security benefits? In general, you can receive Social Security retirement benefits as early as‌ ‌age 62. ‌Benefits may, however,‌ ‌be‌ ‌reduced‌ ‌by‌ ‌up‌ ‌to‌ ‌30%. “Workers planning for their retirement should be aware that retirement benefits depend on age at retirement,” notes the Social Security Administration. “If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.” “Starting to receive benefits after normal retirement age may result in larger benefits,” adds the SSA. “With delayed retirement credits, a person can receive his or her largest benefit by retiring at age 70.” For each month before normal retirement age, you lose 5/9 of one percent of your benefits. ‌When the number of months over 36 is exceeded, the benefit is reduced by 5/12 of one percent per month. “For example, if the number of reduction months is 60 (the maximum number for retirement at 62 when normal retirement age is 67), then the benefit is reduced by 30 percent,” the SSA states. “This maximum reduction is calculated as 36 months times 5/9 of 1 percent plus 24 months times 5/12 of 1 percent.” Should I pay off my mortgage before retiring? At the end of the day, it’s a personal choice. ‌People who itemize deductions can reduce their taxes by paying mortgage interest. ‌In addition, if the interest rate is low enough, it might make more sense financially to invest money rather than pay off the debt. If you plan on retiring comfortably, it’s important to think about how paying off your mortgage will impact your ability to do so. ‌Though a debt-free retirement is ideal, don’t use too much money from a retirement account to pay off a house. What does a good monthly retirement income look like? An individual’s definition of an adequate monthly retirement income may differ from another’s. ‌Various factors will determine how much retirement income is adequate. ‌This includes your retirement lifestyle, any dependents you have (kids, grandkids, debts, etc.) and your health. A good retirement income is usually between 70% and 80% of an individual’s last income before retirement. Article by John Rampton, Due About the Author John Rampton is an entrepreneur and connector. When he was 23 years old while attending the University of Utah he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months he had several surgeries, stem cell injections and learned how to walk again. During this time he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time . He is the Founder and CEO of Due. Updated on Jun 14, 2022, 3:35 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 14th, 2022

What Is A Comfortable Lifestyle In Retirement?

To retire comfortably, Americans say they will need $1.1 million. ‌Unfortunately, less than one in four will have the savings to do so. According to the 2022 Schroders US Retirement Survey, 22% of people approaching retirement say they’ll have enough money to maintain a comfortable standard of living. ‌The figure is down from 26% the […] To retire comfortably, Americans say they will need $1.1 million. ‌Unfortunately, less than one in four will have the savings to do so. According to the 2022 Schroders US Retirement Survey, 22% of people approaching retirement say they’ll have enough money to maintain a comfortable standard of living. ‌The figure is down from 26% the previous year. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Overall, there is a general expectation among Americans that their retirement savings will be inadequate. In fact, the majority (56%) expect to have less than $500,000 saved by the time they retire ‌and 36% anticipate‌‌ ‌‌having‌‌ ‌‌less‌‌ ‌‌than‌‌ ‌‌$250,000. Not surprisingly, American workers were most worried about inflation shrinking their assets in retirement. ‌The‌ ‌second‌ ‌most-feared‌ ‌scenario is becoming a reality, at least right now – 53% of respondents fear “a major market downturn significantly reducing assets.” “The list of concerns that retirees have, and that Americans in general have, are longer and they are more serious today,” Joel Schiffman, who oversees defined contribution products in North America for Schroders, told Bloomberg. “Inflation, the stock market, the cost of healthcare, taxes — there is this compounding effect.” People already retired said they were comfortable, or that their circumstances were “not terrible, not good.” ‌But 18% said their retirement was hard, and 5% said it was an absolute‌‌ ‌‌nightmare. Among respondents, a quarter said that in order to afford their “dream retirement” they must sacrifice what they want today; another 25% just need to keep on keeping on. ‌The study revealed that 35% of respondents between the ages of 60 and 67 said they would have to win the lottery to achieve their dreams. Before panicking, though, you should answer an important question. What is a comfortable retirement lifestyle? What is a Comfortable Lifestyle in Retirement? Your mileage will certainly vary. However, “Comfortable Retirees were more likely to have intermediate levels of financial assets (between $99,000 and $320,000) and income,” reports the Employee Benefit Research Institute (EBRI). ERBI also found that; One in two homeowners were mortgage-free, while 37 percent had a mortgage. ‌ A third had no debt, while 42 percent had debt that was easily manageable. They were most likely married and had college degrees. More than half said they plan to grow, maintain, or spend a small portion of their financial assets, and almost three-quarters said their retirement savings are sufficient or above their needs. “In this group, more retirees cited workplace retirement savings plans such as 401(k) plans and individual retirement accounts (IRAs), in addition to Social Security, as their major source of income than any other group,” they add. ‌The most common types of debt are credit card and auto loan debt, and 1 in 3 had at least one of each. “Half of the retirees in this group spend less than $3,000 a month, while the majority said they can afford their current level of spending,” states ERBI. “In this group of retirees, most think their standards of living have not changed since their working years; however, 1 in 4 believes it has declined.” Retired Comfortables were on average just behind Affluent Retirees in their level of happiness during retirement. Choosing a Comfortable Retirement Lifestyle Before getting too consumed with an exact dollar amount, a key question to ask when planning for retirement is, “What do I want to do when I retire?” ‌After all, putting money away for retirement without determining how you plan to make use of it can leave you unprepared for your golden years. In terms of retirement, men are looking at over 18 years and women at over 20 years, as per the Social Security Administration. ‌As such, it will be important to make sure you’re happy with how you spend that much time. If you’re stuck, you should take into account the things in life that are important to you. Examples include friends and family, socializing, travel, hobbies, etc. To get started, answer the following questions. ‌When you do, you should be able to figure out what your priorities for retirement are. Are there health concerns that will impact‌ ‌your‌ ‌retirement‌ ‌lifestyle? To what extent is the quality of health care where you live important to you? Are you planning to stay in your current residence? Would you like to live near your ‌family‌ ‌or‌ ‌friends? Are you interested in moving‌ ‌to‌ ‌another‌ ‌state? Do you think living somewhere with lower taxes is ‌important? Is it your dream‌ ‌to‌ ‌retire‌ ‌abroad? Would you like‌ ‌to‌ ‌move‌ ‌into‌ ‌a‌ ‌retirement‌ ‌community? When you get older, do you plan on moving into assisted living? During retirement, what kinds of activities do you want to pursue that you are passionate about? Are you interested in traveling? Is it important to you to participate‌ ‌in‌ ‌charitable‌ ‌activities? How much income will you need ‌in‌ ‌retirement? Would you like to remain in the workforce? Full-time‌ ‌or‌ ‌part-time? In retirement, are you interested in reinventing your life? When you figure out what your priorities are, you’ll get a better idea of what you should include in your retirement plan. And, more importantly what it will take to maintain a comfortable lifestyle in retirement. It’s Not About Money, It’s About Income When figuring out your retirement “number,” it’s important to take into account that it isn’t just about deciding how much you need to save,” explains Robin Hartill, CFP®. ‌Americans, for example, tend to want to retire with a million-dollar‌ ‌nest‌ ‌egg. ‌That, however, is a false assumption. “The most important factor in determining how much you need to retire is whether you’ll have enough money to create the income you need to support your desired quality of life after you retire,” adds Hartill. ‌Is a $1 million savings account enough to sustain an individual forever? ‌Possibly. So, how much income do you really need? Well, for most retirees, it’s definitely not 100% of your pre-retirement income. The reason? ‌These expenses are probably not an issue; There’ll be no need to save for retirement. If you don’t commute to work, you might spend less on transportation costs. By the time you retire, your mortgage may be paid off. If you do not have dependents, you may not need life insurance. “But retiring on 80% of your annual income isn’t perfect for everyone,” says Hartill. Depending on the type of retirement lifestyle you intend to have and the range of expenses you expect, you might need to adjust your goal. It may make sense to aim for 90% to 100% of your pre-retirement income if you plan to travel frequently in retirement. Alternatively, you may be able to comfortably live on less than 80% if you intend to pay off your mortgage before retiring or downsizing your living arrangements. “Let’s say you consider yourself the typical retiree,” she says. ‌Your annual income is $120,000 between you and your spouse. ‌Using the 80% rule, you can expect to need about $96,000 in annual income after retiring, or $8,000 a‌ ‌month. Social Security The‌ ‌good‌ ‌news‌? ‌If‌ ‌you’re‌ ‌like‌ ‌most‌ ‌people,‌ ‌your Social Security benefits may provide some additional help beyond your savings. ‌In‌ ‌fact,‌ ‌at the end of 2020, nearly nine in ten seniors were receiving Social Security benefits. ‌Moreover, Social Security benefits make up about 30% of an elderly person’s income. However, Social Security typically replaces a lower percentage of income ‌for higher-income‌ ‌retirees. “For example, Fidelity estimates that someone earning $50,000 a year can expect Social Security to replace 35% of their income,” clarifies Hartill. ‌On the other hand, if someone earned $300,000 a year, their Social Security income replacement rate would be only 11%. As a rule, you can expect to receive less than half your pre-retirement salary in Social Security benefits. ‌Therefore, you will be responsible for covering the‌ ‌difference. But, there are still ways for you to still live comfortable off just a social security check: Delay taking your benefits. Try to wait until after you have reached your full retirement age before starting to collect benefits. ‌Your Social Security benefits will be at their maximum if you wait until you are 70 years old. And, if you already filed, you can still withdraw your claim. Pay off your debt. ‌Before retiring, it is best to pay off all debts, including credit card bills and mortgages, so you can maximize your Social Security benefits. ‌So, instead of spending your benefits on things you have already bought, you can put them towards things you need today. Relocate. ‌By lowering your cost of living, you can reap greater Social Security benefits. If you can consider moving to a tax-friendly state. Alaska‌ ‌and‌ ‌New‌ ‌Hampshire‌ ‌do not levy sales or income taxes, while Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming do levy sales taxes, but do not levy income taxes or taxes on pensions. Don’t overpay for prescriptions. ‌Medications can get rather expensive. ‌Always choose generic over brand-name prescriptions when you can. ‌Additionally, you may want to join a prescription drug membership program at the pharmacy where you buy your medication so that you can earn rewards and receive discounts. Take advantage of discounts. Speaking of discounts, if you go out to eat only go to restaurants the offer senior discounts. Also, the same it true with retailers like Kohl’s. Consider Savings, Annuities, and Other Income Streams While it’s possible to live comfortably just off Social Security, I wouldn’t completely bank on that. As a general rule, Social Security will only replace around 40% of your pre-retirement income. And, if you’re using the 80% rule as a benchmark, then that’s only half of your retirement income. To make sure they are able to meet their bills and have a life in retirement, most people need additional income retirement streams. And, these income streams are typically; Qualified retirement savings plans. A 401(k) plan, an IRA, or another type of retirement plan are the most common in the private sector. ‌Throughout your working career, you invest money into the plan. ‌If you contribute to a retirement plan or take money out after you retire, you typically get a tax break. If you’re self-employed, you can contribute to a Simplified Employee Pension (SEP-IRA) or an Individual 401(k). Retirement portfolio. In addition to a qualified retirement, you should also have a diversified retirement portfolio. Generally, this consists of stock, high yielding bonds, high yield savings accounts, and dividend paying stocks. Annuities. ‌An‌ ‌annuity‌ ‌is‌ ‌a‌ ‌contract that you purchase from an insurance or annuity company. It can provide a steady and guaranteed stream of income in retirement. Pensions. ‌ Private pension plans have become rarer over time. ‌Government workers, who still have pensions, can rely on them as a regular source of income throughout their lives. Veterans pension benefits. Veterans Pension benefits may be available if you meet certain criteria, including serving during wartime, being 65 or older, having a service-connected disability, and little to no income. ‌It differs from your military retirement pension, which is based on your number of years of service. Work Part-Time. Moreover, you may want to consider working part-time. Besides the additional income, it can help make the transition into retirement smoother. And, it’s a surefire way to remain physically and mentally sharp. Some suggestions would be freelancing, consulting, or babysitting your grandkids. You could also enter the gig economy by driving for Lyft or Door Dash. And, you could even rent out a spare bedroom to a full-time roommate or list it on Airbnb. To learn more about the tax implications of retirement savings or collecting Social Security benefits during retirement, speak with your licensed financial advisor. ‌Your finances may be affected. Senior Living Options The cost of housing will likely be your largest retirement expense. Housing-related costs averaged $1,406.68 per month for Americans 65 and older between 2016 and 2020. The good news is that there are a number of ways to lower your monthly housing costs as well. ‌‌When you pay your mortgage off, you won’t have a large monthly expense. Instead, you would only have to pay taxes, insurance,‌‌ ‌‌and‌‌ ‌‌maintenance. Another‌ ‌choice would be to downsize to a home that costs much less and take advantage of the equity in your home. ‌You can also save money on heating, cooling, maintenance, and taxes if you live in a smaller home in a cheaper neighborhood. From what activities you can pursue to who you will socialize with to how much your new lifestyle will cost, where you live can make a big difference in your retirement lifestyle. With that in mind, here are some options worth exploring. Move to a more affordable state. Make sure you consider factors like taxes, cost of living, health care, and other quality of life issues before deciding where to retire within the United States. However, based on median home cost, medicare advantage cost, and the cost of living index, here are the 12 cheapest states to retire: Mississippi Alabama Oklahoma Arkansas Georgia Tennessee West Virginia Indiana Iowa South Carolina New Mexico 55+ retirement communities. Age-restricted retirement communities commonly offer detached houses as well as townhouses or apartments for active‌ ‌older‌ ‌adults. ‌The community may have golf courses, organized activities, social calendars,‌ ‌and‌ ‌other conveniences. Senior living apartments. Older Americans can benefit from age-restricted apartments, condos or townhouses, which are specifically suited to their needs. ‌The majority of them offer pools and fitness centers. On the other hand, medical or dining facilities aren’t usually available. ‌The equity in your home can be released when you move into an assisted living complex for travel or other retirement ‌activities. Living abroad. Approximately 432,000 retired Americans were receiving Social Security benefits in foreign countries at the end of 2019, ‌according‌ ‌to‌ ‌the‌ ‌Social Security‌ ‌Administration. Many countries offer retirement benefits for Americans while stretching their retirement dollars, such as; Puerto Plata, Dominican Republic Chitre, Panama Northern Belize Thailand’s Eastern Seaboard Popoli, Italy George Town Malaysia Cuenca, Ecuador The secret? ‌Finding a good balance between finances, a place you will enjoy living, and understanding the issues of becoming an expat, from health care to tax issues. ‌Also, in a foreign country, Medicare typically doesn’t cover your health care, so you’ll still need to pay income taxes in the states. Retirement Hobbies and Activities When you retire, you should be able to focus on what makes you happy and what makes you feel fulfilled. ‌However, you can still pursue hobbies and activities that meet both of these goals while living within your means. Here are some of the best hobbies and activities you can enjoy throughout your golden years. Creative ‌pursuits. In retirement, you can pursue hobbies that interest you and have time to devote to them, such as knitting and photography. ‌Also, here’s your chance to start a blog or write a book about something that interests you – without having to worry about going back to work every day. Outdoor adventures. Retirement‌ ‌is‌ ‌a great‌ ‌time to explore national and state parks or your favorite fishing hole during a weekday and avoid the weekend crowds. ‌Even better? Most parks offer senior discounts. Health and fitness. ‌Golf courses are commonly found in retirement communities. ‌There are dozens of healthy lifestyle choices to pursue after retirement, including running, swimming, biking, and dozens of other activities. ‌Physical activity is important for long-term health. ‌Adults 65 and older are recommended to get at least two and a half hours of moderate – or 75 to 150 minutes of vigorous – physical activity every week. Travel. ‌ Traveling around the world may be limited only by your budget since you do not have a limited number of vacation days. ‌It may be affordable to spread out an RV adventure across the country over several‌ ‌weeks. But, ‌the cost of intercontinental travel can be reduced with flexible travel dates and group tour packages. And, with four-day packages that offer affordable options, cruises provide action-packed adventures at sea. Volunteer. ‌ An estimated 42% of retirees volunteer in their communities, according to AARP and Independent Sector, an organization that partners with nonprofits and foundations. ‌Volunteering‌ ‌is‌ ‌a‌ ‌great‌ ‌way‌ ‌to‌ ‌stay active, meet new people, and make a difference in your community while feeling fulfilled. Continue your education. ‌ By taking classes at your local university or community college, you can keep your mind active in retirement. ‌Studying a subject you were always curious about but never had time to investigate is a great idea when you are retired. ‌Senior citizens have access to reduced tuition rates at many colleges and universities. ‌Some may even be‌‌ ‌‌free. Frequently Asked Questions about Your Lifestyle in Retirement 1. How much will I spend in retirement? That depends as everyone’s situation is different. But, the 80% rule can provide a guideline. Based on your current income, you can start the planning process by assuming you’ll spend about 80% of the income you will make before you retire each year. ‌This ratio is called the retirement‌ ‌income‌ ‌replacement‌ ‌ratio. ‌You can expect to spend about $36,000 a year in retirement, for example, if your preretirement income was $45,000. Think‌ ‌of 80% as a good starting point. ‌You can modify this number based on your lifestyle, health expectations, and income. 2. Where does retirement income come from? The majority of retirees‌‌ ‌‌have‌‌ ‌‌multiple‌ ‌sources‌ ‌of‌ ‌income‌ ‌during‌ ‌their‌ ‌retirement‌ ‌years. Investment accounts that provide inflation protection, governmental benefits, or continuing paychecks are some examples. ‌To ensure you have enough income to live comfortably, it’s best to have multiple income sources. When‌ ‌deciding where your retirement income will come from, diversification is an important aspect to consider. ‌As a result, your future income can be protected and market risks can be reduced. 3. How long will I live? According to the CDC, the average life expectancy in the United States is 77 years. 4. What will my taxes look like in retirement? Your retirement planner can provide you with an estimate of your tax rate in retirement if you ask this question. ‌There are certain retirement savings, for example IRA and 401(k) accounts, that‌ ‌are‌ ‌taxable. ‌‌‌You may also have to pay taxes on your Social Security benefits based on your income. ‌You must also consider federal and state taxes. 5. Should I pay off my mortgage before I retire? It all‌ ‌comes‌ ‌down‌ ‌to‌ ‌personal‌ ‌preference. ‌Those who itemize deductions may find that their mortgage interest reduces their taxes. ‌If the interest rate is low enough, you might be better off investing more money than paying off the debt. If you plan on retiring comfortably, you need to consider the impact of paying off your mortgage. ‌Even though it’s best to enter retirement debt-free, it’s not a good idea to drain your retirement fund to pay off a house. Article by Deanna Ritchie, Due About the Author Deanna Ritchie is a financial editor at Due. She has a degree in English Literature. She has written 1000+ articles on getting out of debt and mastering your finances. She has edited over 40,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite.   Updated on Jun 3, 2022, 4:31 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkJun 3rd, 2022

GDS Holdings Limited Reports First Quarter 2022 Results

SHANGHAI, China, May 18, 2022 (GLOBE NEWSWIRE) -- GDS Holdings Limited ("GDS Holdings", "GDS" or the "Company") (NASDAQ:GDS, HKEX: 9698)), a leading developer and operator of high-performance data centers in China, today announced its unaudited financial results for the first quarter ended March 31, 2022. First Quarter 2022 Financial Highlights Net revenue increased by 31.5% year-over-year ("Y-o-Y") to RMB2,243.6 million (US$353.9 million) in the first quarter of 2022 (1Q2021: RMB1,706.0 million). Service revenue increased by 31.6% Y-o-Y to RMB2,243.5 million (US$353.9 million) in the first quarter of 2022 (1Q2021: RMB1,704.5 million). Net loss was RMB373.3 million (US$58.9 million) in the first quarter of 2022, compared with a net loss of RMB278.7 million in the first quarter of 2021. Adjusted EBITDA (non-GAAP) increased by 28.5% Y-o-Y to RMB1,051.2 million (US$165.8 million) in the first quarter of 2022 (1Q2021: RMB817.9 million). See "Non-GAAP Disclosure" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. Adjusted EBITDA margin (non-GAAP) decreased to 46.9% in the first quarter of 2022 (1Q2021: 47.9%). Operating Highlights1 Total area committed and pre-committed by customers increased by 18,188 square meters ("sqm") in the first quarter of 2022, to reach 575,009 sqm as of March 31, 2022, an increase of 24.5% Y-o-Y (March 31, 2021: 461,823 sqm). Area in service increased by 4,461 sqm in the first quarter of 2022, to reach 492,344 sqm as of March 31, 2022, an increase of 36.6% Y-o-Y (March 31, 2021: 360,542 sqm). Commitment rate for area in service was 95.3% as of March 31, 2022 (March 31, 2021: 95.0%). Area under construction was 168,128 sqm as of March 31, 2022 (March 31, 2021: 170,149 sqm). Pre-commitment rate for area under construction was 63.1% as of March 31, 2022 (March 31, 2021: 70.0%). Area utilized by customers increased by 12,545 sqm in the first quarter of 2022, to reach 332,019 sqm as of March 31, 2022, an increase of 32.2% Y-o-Y (March 31, 2021: 251,063 sqm). Utilization rate for area in service was 67.4% as of March 31, 2022 (March 31, 2021: 69.6%). "We kicked off 2022 with a solid first quarter," said Mr.William Huang, Chairman and Chief Executive Officer. "During the first quarter, we secured over 18,000 sqm of new bookings and further cemented our leading position in China's Tier 1 markets through both organic and acquisition-driven growth. In addition, we progressed our regionalization plan to deepen our presence in Southeast Asia through our partnership with YTL for green data center campus development in Malaysia, creating a unique platform with access to renewable energy in this emerging digital region." "We maintained a steady financial performance in the first quarter, achieving a revenue increase of 31.5% and Adjusted EBITDA growth of 28.5% year-over-year, " commented Mr. Dan Newman, Chief Financial Officer. "Our Adjusted EBITDA margin was 46.9% compared with 47.0% last quarter. Additionally, we raised US$620 million during the first quarter through a private convertible senior note and obtained debt financing and refinancing facilities of around US$532 million to continue building our capital base to support future business growth." First Quarter 2022 Financial Results Net revenue in the first quarter of 2022 was RMB2,243.6 million (US$353.9 million), a 31.5% increase over the first quarter of 2021 of RMB1,706.0 million and a 2.6% increase over the fourth quarter of 2021 of RMB2,187.4 million. Service revenue in the first quarter of 2022 was RMB2,243.5 million (US$353.9 million), a 31.6% increase over the first quarter of 2021 of RMB1,704.5 million and a 2.6% increase over the fourth quarter of 2021 of RMB2,185.9 million. The increase over the previous quarter was mainly due to the full quarter revenue contribution from additional area utilized in the previous quarter and the contribution from 12,545 sqm of net additional area utilized in the first quarter of 2022, mainly related to the Beijing 8 ("BJ8"), Langfang 3 ("LF3"), Langfang 10 ("LF10") and Nantong 3 ("NT3") data centers. Cost of revenue in the first quarter of 2022 was RMB1,757.2 million (US$277.2 million), a 34.2% increase over the first quarter of 2021 of RMB1,309.1 million and a 3.4% increase over the fourth quarter of 2021 of RMB1,700.1 million. The increase over the previous quarter was mainly due to an increase in utility cost as a result of higher power consumption due to higher area utilized and higher power tariffs following the power market reform initiated during the previous quarter, and an increase in depreciation and amortization cost related to the full quarter contribution from new data centers coming into service in the previous quarter, as well as new data centers coming into service in the first quarter of 2022, namely Changshu 2 ("CS2") Phase 2 and Wuhan 1 ("WH1") Phase 1 (through acquisition) data centers. Gross profit was RMB486.4 million (US$76.7 million) in the first quarter of 2022, a 22.6% increase over the first quarter of 2021 of RMB396.9 million, and a 0.2% decrease over the fourth quarter of 2021 of RMB487.3 million. The slight decrease over the previous quarter was mainly due to higher power tariffs leading to higher utility cost as a result of the power market reform initiated during the previous quarter, and higher depreciation and amortization cost related to new data centers coming into service during the fourth quarter of 2021 and the first quarter of 2022. Gross profit margin was 21.7% in the first quarter of 2022, compared with 23.3% in the first quarter of 2021, and 22.3% in the fourth quarter of 2021. The decrease over the previous quarter was mainly due to higher power tariffs as a result of the power market reform initiated during the previous quarter, and higher depreciation and amortization cost related to new data centers coming into service during the fourth quarter of 2021 and the first quarter of 2022. Adjusted Gross Profit ("Adjusted GP") (non-GAAP) is defined as gross profit excluding depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs and share-based compensation expenses allocated to cost of revenue. Adjusted GP was RMB1,174.6 million (US$185.3 million) in the first quarter of 2022, a 26.6% increase over the first quarter of 2021 of RMB928.0 million and a 2.3% increase over the fourth quarter of 2021 of RMB1,148.4 million. See "Non-GAAP Disclosure" and "Reconciliations of GAAP and non-GAAP results" elsewhere in this earnings release. Adjusted GP margin (non-GAAP) was 52.4% in the first quarter of 2022, compared with 54.4% in the first quarter of 2021, and 52.5% in the fourth quarter of 2021. The Adjusted GP margin stayed at a similar level as the previous quarter, which is an outcome of higher power tariffs leading to higher utility cost partially offset by a decrease of other cash costs in cost of revenue. Selling and marketing expenses, excluding share-based compensation expenses of RMB13.0 million (US$2.0 million), were RMB28.6 million (US$4.5 million) in the first quarter of 2022, a 40.2% increase from the first quarter of 2021 of RMB20.4 million (excluding share-based compensation of RMB15.3 million) and a 3.8% decrease from the fourth quarter of 2021 of RMB29.7 million (excluding share-based compensation of RMB12.4 million). The decrease over the previous quarter was primarily due to a decrease in marketing activities during the Chinese New Year season. General and administrative expenses, excluding share-based compensation expenses of RMB52.6 million (US$8.3 million), depreciation and amortization expenses of RMB121.1 million (US$19.1 million) and operating lease cost relating to prepaid land use rights of RMB20.7 million (US$3.3 million), were RMB105.3 million (US$16.6 million) in the first quarter of 2022, a 4.2% increase over the first quarter of 2021 of RMB101.1 million (excluding share-based compensation expenses of RMB59.7 million, depreciation and amortization expenses of RMB62.1 million and operating lease cost relating to prepaid land use rights of RMB8.2 million) and a 9.4% decrease from the fourth quarter of 2021 of RMB116.2 million (excluding share-based compensation of RMB50.8 million, depreciation and amortization expenses of RMB104.5 million, and operating lease cost relating to prepaid land use rights of RMB9.3 million). The decrease over the previous quarter was mainly due to a lower level of professional fees related to acquisitions. Research and development costs were RMB9.8 million (US$1.5 million) in the first quarter of 2022, compared with RMB9.3 million in the first quarter 2021 and RMB12.4 million in the fourth quarter of 2021. Net interest expenses for the first quarter of 2022 were RMB453.5 million (US$71.5 million), a 26.8% increase over the first quarter of 2021 of RMB357.7 million and a 2.4% increase over the fourth quarter of 2021 of RMB442.8 million. The increase over the previous quarter was mainly due to higher interest expenses on increased total gross debt balance to finance data center capacity expansion. Foreign currency exchange loss for the first quarter of 2022 was RMB4.7 million (US$0.7 million), compared with a gain of RMB1.2 million in the first quarter of 2021 and a loss of RMB3.9 million in the fourth quarter of 2021. Others, net for the first quarter of 2022 was RMB21.5 million (US$3.4 million), compared with RMB16.3 million in the first quarter of 2021 and RMB37.2 million in the fourth quarter of 2021. Net loss in the first quarter of 2022 was RMB373.3 million (US$58.9 million), compared with a net loss of RMB278.7 million in the first quarter of 2021 and a net loss of RMB312.9 million in the fourth quarter of 2021. Adjusted EBITDA (non-GAAP) is defined as net loss excluding net interest expenses, income tax expenses (benefits), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses and gain from purchase price adjustment. Adjusted EBITDA was RMB1,051.2 million (US$165.8 million) in the first quarter of 2022, a 28.5% increase over the first quarter of 2021 of RMB817.9 million and a 2.3% increase over the fourth quarter of 2021 of RMB1,027.4 million. Adjusted EBITDA margin (non-GAAP) was 46.9% in the first quarter of 2022, compared with 47.9% in the first quarter of 2021, and 47.0% in the fourth quarter of 2021. The slight decrease over the previous quarter was mainly due to higher power tariffs leading to higher utility cost partially offset by a lower level of corporate expenses during the quarter. Basic and diluted loss per ordinary share in the first quarter of 2022 was RMB0.39 (US$0.06), compared with RMB0.21 in the first quarter of 2021, and RMB0.24 in the fourth quarter of 2021. Basic and diluted loss per American Depositary Share ("ADS") in the first quarter of 2022 was RMB3.15 (US$0.50), compared with RMB1.66 in the first quarter of 2021, and RMB1.92 in the fourth quarter of 2021. Each ADS represents eight Class A ordinary shares. Sales Total area committed and pre-committed at the end of the first quarter of 2022 was 575,009 sqm, compared with 461,823 sqm at the end of the first quarter of 2021 and 556,822 sqm at the end of the fourth quarter of 2021, an increase of 24.5% Y-o-Y and 3.3% quarter-over-quarter ("Q-o-Q"), respectively. In the first quarter of 2022, net additional total area committed was 18,188 sqm, including significant contributions from the Shanghai 18 ("SH18") Phase 1, Beijing 14 ("BJ14") Phase 1, Beijing 21 ("BJ21") and Beijing 22 ("BJ22") data centers. Data Center Resources Area in service at the end of the first quarter of 2022 was 492,344 sqm, compared with 360,542 sqm at the end of the first quarter of 2021 and 487,883 sqm at the end of the fourth quarter of 2021, an increase of 36.6% Y-o-Y and 0.9% Q-o-Q. In the first quarter of 2022, CS2 Phase 2 and WH1 Phase 1 (through acquisition) data centers came into service. Area under construction at the end of the first quarter of 2022 was 168,128 sqm, compared with 170,149 sqm at the end of the first quarter of 2021 and 161,515 sqm at the end of the fourth quarter of 2021, a decrease of 1.2% Y-o-Y and an increase of 4.1% Q-o-Q, respectively. In the first quarter of 2022, construction commenced on the SH18 Phase 1 and WH1 Phase 2 data centers. SH18 Phase 1 is the first phase of SH18 data center at the same site as our Shanghai 16 and Shanghai 17 data centers in the Minhang District of Shanghai. SH18 Phase 1 will yield a net floor area of 6,680 sqm and is 67.5% pre-committed. It is expected to come into service in the second half of 2022. WH1 Phase 2 is the second and final phase of WH1 data center which the Company completed the acquisition of during the first quarter of 2022. WH1 Phase 2 will yield a net floor area of 2,800 and is expected to come into service in the first half of 2023. Commitment rate for area in service was 95.3% at the end of the first quarter of 2022, compared with 95.0% at the end of the first quarter of 2021 and 93.8% at the end of the fourth quarter of 2021. Pre-commitment rate for area under construction was 63.1% at the end of the first quarter of 2022, compared with 70.0% at the end of the first quarter of 2021 and 61.3% at the end of the fourth quarter of 2021. Area utilized at the end of the first quarter of 2022 was 332,019 sqm, compared with 251,063 sqm at the end of the first quarter of 2021 and 319,475 sqm at the end of the fourth quarter of 2021, an increase of 32.2% Y-o-Y and 3.9% Q-o-Q. Net additional area utilized was 12,545 sqm in the first quarter of 2022, which mainly came from additional area utilized in the BJ8, LF3, LF10 and NT3 data centers. Utilization rate for area in service was 67.4% at the end of the first quarter of 2022, compared with 69.6% at the end of the first quarter of 2021 and 65.5% at the end of the fourth quarter of 2021. During the first quarter of 2022, the Company completed its previously announced acquisition of 100% equity interest in target companies which are developing a data center site in Wuhan, Hubei Province, containing two data centers, WH1 and Wuhan 2 ("WH2"). The two data centers will yield an aggregate net floor area of approximately 8,400 sqm once fully developed. WH1 Phase 1, with a net floor area of 1,400 sqm, is currently in service and 100% committed. WH1 Phase 2, with a net floor area of 2,800 sqm, is currently under construction. WH2, with a potential net floor area of 4,200 sqm, is currently held for future development. During the first quarter of 2022, the Company completed its previously announced acquisition of a greenfield site in the Nusajaya Tech Park, Johor, Malaysia, immediately adjacent to Singapore. The Company intends to develop the site into a data center campus comprising a total net floor area of approximately 18,000 sqm, or 54 MW of total IT power capacity, according to the initial design. The first phase of the development, with an IT power capacity of 18 MW, is expected to be delivered in 2024. During the first quarter of 2022, the Company completed its previously announced acquisition of a greenfield site in the Nongsa Digital Park, located in Batam, Indonesia, approximately 25 km from Singapore. The Company plans to construct two new data center buildings on the site, comprising a total net floor area of approximately 10,000 sqm or 28 MW of total IT power capacity. The Company expects to secure a supply of renewable energy to support the data center site. The development of a data center campus in Nongsa Digital Park will complement the Company's existing project in the Nusajaya Tech Park, Johor, Malaysia forming a strong core for its "Singapore Plus" strategy in the region. During the first quarter of 2022, the Company completed its previously announced acquisition of a majority equity interest in a target company which owns greenfield land in the Xianghe County of Langfang in Hebei Province, namely Xianghe Land Site 1. The target company has already obtained required energy quota and other approvals for data center development on the site. Approximately 10 km to the east of Tongzhou District of Beijing, the site is well located to serve the Beijing market. Xianghe Land Site 1 has a land area of approximately 65,000 sqm and, once fully developed, it will yield a net floor area of approximately 30,000 sqm. It is currently held for future development. The Company will subsequently acquire all the remaining minority equity interest in the target company when certain conditions are met. During the first quarter of 2022, as previously announced, the Company entered into a definitive agreement for the lease of a purpose-built building shell (currently under construction by the landlord) in Hong Kong which will house our Hong Kong 3 ("HK3") data center. HK3 is located in West Kowloon, approximately 3 km from the Company's existing Hong Kong 1 ("HK1"), Hong Kong 2 ("HK2") and Hong Kong 4 ("HK4") data center cluster in the Kwai Chung area. HK3 will yield a net floor area of 7,265 sqm. It is expected to be delivered in the second half of 2024, ensuring that we will have continuous new capacity across four purpose-built data centers coming into service in Hong Kong through 2022 to 2025. On March 8, 2022 the Company closed its previously announced sale of US$620 million in aggregate principal amount of 0.25% convertible senior notes due 2029 (the "Notes") to Sequoia China Infrastructure Fund I ("SCIF"), ST Telemedia Global Data Centres ("STT GDC"), and an Asian sovereign wealth fund which has a strategic relationship with GDS (collectively, the "Investors"). In conjunction with SCIF's investment in the Notes, GDS and Sequoia Capital China (together with its affiliates, "Sequoia China") have entered into a Strategic Cooperation Agreement pursuant to which GDS and Sequoia China will identify and pursue collaborative opportunities for business synergies between GDS and Sequoia China; the development and implementation of GDS's regionalization strategy; and strategic acquisitions and investments in the internet data center business in China and overseas. Liquidity As of March 31, 2022, cash was RMB11,320.9 million (US$1,785.8 million). Total short-term debt was RMB6,793.1 million (US$1,071.6 million), comprised of short-term borrowings and the current portion of long-term borrowings of RMB6,242.3 million (US$984.7 million) and the current portion of finance lease and other financing obligations of RMB550.8 million (US$86.9 million). Total long-term debt was RMB33,983.9 million (US$5,360.8 million), comprised of long-term borrowings (excluding current portion) of RMB19,594.1 million (US$3,090.9 million), convertible bonds of RMB5,804.5 million (US$915.6 million) and the non-current portion of finance lease and other financing obligations of RMB8,585.4 million (US$1,354.3 million). During the first quarter of 2022, the Company obtained new debt financing and re-financing facilities of RMB3,369.5 million (US$531.5 million), and further raised $US620 million from a convertible bond issuance. Recent Developments Shenzhen 11 AcquisitionThe Company has recently completed its previously announced acquisition of 100% equity interest in a target company which has developed a data center in the Longhua District of Shenzhen, Shenzhen 11 ("SZ11"). SZ11 will yield a net floor area of approximately 7,089 sqm. It is a scarce resource in a Tier 1 core location which the Company believes is highly marketable. Partnership with YTL for green data center campus development in Johor, MalaysiaThe Company recently signed a partnership with YTL Power International Berhad ("YTL Power"), an international multi-utility infrastructure group, to co-develop 168 MW of data center capacity, across 8 individual data center facilities, at the upcoming YTL Green Data Center Park in Johor, Malaysia. The first phase of the co-development will enter service in 2024. YTL Green Data Center Park ("the Park") is a visionary project initiated by YTL Data Center Holdings Pte. Ltd., a wholly-owned subsidiary of YTL Power. Located in Kulai, Johor, approximately 30 kilometres from the cities of Johor Bahru and Singapore, the Park will comprise 500 MW of total data center capacity integrated with an equivalent amount of solar power generation. It is the first hyperscale data center campus in Malaysia to be powered by on-site renewable energy. GDS's presence at the YTL Green Data Center Park will complement its hyperscale data center projects at Nusajaya Tech Park, Johor, Malaysia and Nongsa Digital Park, Batam, Indonesia. Ulanqab 1 to become a B-O-T joint venture data centerThe Company recently signed a share purchase agreement for the sale of a 49% equity interest in the project company of Ulanqab 1 ("UL1"), a build-operate-transfer ("B-O-T") data center, under the new master joint venture agreement signed between GDS and GIC in the third quarter of 2021. Once the transaction is completed, UL1 will become the second B-O-T joint venture data center with GDS owning 51% equity interest and GIC owning 49%, after HL1 Phase 1 data center. Business Outlook The Company confirms that the previously provided guidance for total revenues of RMB9,320 – RMB9,680 million, adjusted EBITDA of RMB4,285 – RMB4,450 million and capex of around RMB12,000 million for the year of 2022 remain unchanged. This forecast reflects the Company's preliminary view on the current business situation and market conditions, which are subject to change. Conference Call Management will hold a conference call at 8:00 p.m. U.S. Eastern Time on May 18, 2022 (8:00 a.m. Beijing Time on May 19, 2022) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialing: United States: +1-833-239-5565 International: +65-6713-5590 Hong Kong: +852-3018-6771 Mainland China: 400-820-5286 Conference ID: 1699103 Participants should dial in at least 15 minutes before the scheduled start time and provide the Conference ID to the Operator to be connected to the conference. Due to conditions surrounding the outbreak of COVID-19, participants may experience longer than normal hold period before being assisted to join the call. The Company thanks everyone in advance for their patience and understanding. A telephone replay will be available approximately two hours after the call until May 26, 2022 09:59 AM U.S. ET by dialing: United States: +1-646-254-3697 International: +61-2-8199-0299 Hong Kong: +852-3051-2780 Mainland China: 400-820-9035 Replay Access Code: 1699103 A live and archived webcast of the conference call will be available on the Company's investor relations website at Non-GAAP Disclosure Our management and board of directors use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted GP and Adjusted GP margin, which are non-GAAP financial measures, to evaluate our operating performance, establish budgets and develop operational goals for managing our business. We believe that the exclusion of the income and expenses eliminated in calculating Adjusted EBITDA and Adjusted GP can provide useful and supplemental measures of our core operating performance. In particular, we believe that the use of Adjusted EBITDA as a supplemental performance measure captures the trend in our operating performance by excluding from our operating results the impact of our capital structure (primarily interest expense), asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights and accretion expenses for asset retirement costs), other non-cash expenses (primarily share-based compensation expenses), and other income and expenses which we believe are not reflective of our operating performance, whereas the use of adjusted gross profit as a supplemental performance measure captures the trend in gross profit performance of our data centers in service by excluding from our gross profit the impact of asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights and accretion expenses for asset retirement costs) and other non-cash expenses (primarily share-based compensation expenses) included in cost of revenue. We note that depreciation and amortization is a fixed cost which commences as soon as each data center enters service. However, it usually takes several years for new data centers to reach high levels of utilization and profitability. The Company incurs significant depreciation and amortization costs for its early stage data center assets. Accordingly, gross profit, which is a measure of profitability after taking into account depreciation and amortization, does not accurately reflect the Company's core operating performance. We also present these non-GAAP measures because we believe these non-GAAP measures are frequently used by securities analysts, investors and other interested parties as measures of the financial performance of companies in our industry. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for gross profit, net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operations and cash flow data prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures instead of their nearest GAAP equivalent. First, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted GP, and Adjusted GP margin are not substitutes for gross profit, net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. Second, other companies may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP financial measures as tools for comparison. Finally, these non-GAAP financial measures do not reflect the impact of net interest expenses, incomes tax benefits (expenses), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses and gain from purchase price adjustment, each of which have been and may continue to be incurred in our business. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release. Exchange Rate This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB 6.3393 to US$1.00, the noon buying rate in effect on March 31, 2022 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. Statement Regarding Preliminary Unaudited Financial Information The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information. About GDS Holdings Limited GDS Holdings Limited (NASDAQ:GDS, HKEX: 9698)) is a leading developer and operator of high-performance data centers in China. The Company's facilities are strategically located in China's primary economic hubs where demand for high-performance data center services is concentrated. The Company also builds, operates and transfers data centers at other locations selected by its customers in order to fulfill their broader requirements. The Company's data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancies across all critical systems. GDS is carrier and cloud-neutral, which enables its customers to access all the major PRC telecommunications networks, as well as the largest PRC and global public clouds which are hosted in many of its facilities. The Company offers co-location and a suite of value-added services, including managed hybrid cloud services through direct private connection to leading public clouds, managed network services, and, where required, the resale of public cloud services. The Company has a 21-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services in China. The Company's customer base consists predominantly of hyperscale cloud service providers, large internet companies, financial institutions, telecommunications carriers, IT service providers, and large domestic private sector and multinational corporations. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "aim," "anticipate," "believe," "continue," "estimate," "expect," "future," "guidance," "intend," "is/are likely to," "may," "ongoing," "plan," "potential," "target," "will," and similar statements. Among other things, statements that are not historical facts, including statements about GDS Holdings' beliefs and expectations regarding the growth of its businesses and its revenue for the full fiscal year, the business outlook and quotations from management in this announcement, as well as GDS Holdings' strategic and operational plans, are or contain forward-looking statements. GDS Holdings may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC") on Forms 20-F and 6-K, in its current, interim and annual reports to shareholders, in announcements, circulars or other publications made on the website of the Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause GDS Holdings' actual results or financial performance to differ materially from those contained in any forward-looking statement, including but not limited to the following: GDS Holdings' goals and strategies; GDS Holdings' future business development, financial condition and results of operations; the expected growth of the market for high-performance data centers, data center solutions and related services in China; GDS Holdings' expectations regarding demand for and market acceptance of its high-performance data centers, data center solutions and related services; GDS Holdings' expectations regarding building, strengthening and maintaining its relationships with new and existing customers; the continued adoption of cloud computing and cloud service providers in China; risks and uncertainties associated with increased investments in GDS Holdings' business and new data center initiatives; risks and uncertainties associated with strategic acquisitions and investments; GDS Holdings' ability to maintain or grow its revenue or business; fluctuations in GDS Holdings' operating results; changes in laws, regulations and regulatory environment that affect GDS Holdings' business operations; competition in GDS Holdings' industry in China; security breaches; power outages; and fluctuations in general economic and business conditions in China and globally, the impact of the COVID-19 outbreak, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors is included in GDS Holdings' filings with the SEC, including its annual report on Form 20-F, and with the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release and are based on assumptions that GDS Holdings believes to be reasonable as of such date, and GDS Holdings does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: GDS Holdings LimitedLaura ChenPhone: +86 (21) 2029-2203Email: The Piacente Group, Inc.Ross WarnerPhone: +86 (10) 6508-0677Email: Brandi PiacentePhone: +1 (212) 481-2050Email: GDS Holdings Limited GDS HOLDINGS LIMITEDUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))               As ofDecember 31, 2021 As of March 31, 2022     RMB RMB US$             Assets       Current assets         Cash 9,968,109   11,320,911   1,785,830     Accounts receivable, net of allowance for doubtful accounts 1,732,686   2,313,110   364,884     Value-added-tax ("VAT") recoverable 229,090   243,739   38,449  .....»»

Category: earningsSource: benzingaMay 18th, 2022

Time To Buy These 3 Oversold Mid-Caps

More than one in four S&P 400 constituents are down at least 20% this year. On the flip side, less than two dozen names are up 20% or more year-to-date. The rough start to 2022 for U.S. stocks is evident in virtually all broad indices (energy-focused benchmarks aside). Yet it is the mid-cap space where […] More than one in four S&P 400 constituents are down at least 20% this year. On the flip side, less than two dozen names are up 20% or more year-to-date. The rough start to 2022 for U.S. stocks is evident in virtually all broad indices (energy-focused benchmarks aside). Yet it is the mid-cap space where some of the most intriguing buy opportunities are forming. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Buyers beware. While there are plenty of stocks trading at steep discounts to where they began the year, not all are bargains. Plenty could very well see more downside as the market punishes companies with high valuations and unclear growth prospects. Investors looking to pounce on the dip in individual names can use fundamental queues in combination with technical clues to find the biggest winners. These three oversold mid-caps check both boxes. Is Lyft Stock a Buy? Lyft, Inc. (NASDAQ:LYFT) is down more than 50% this year and 70% from last year’s peak. The ride-hailing operator sank to new lows last week after slashing its second-quarter EBITDA guidance from $83 million to $15 million at the midpoint. Rising gas prices and the resulting impact on driver retention are forcing Lyft to incur higher expenses. The good news is that the sales side of the ledger is getting healthier—and could eventually far outweigh the near-term cost pressures. Revenue rose 44% last quarter as Lyft’s rideshare volumes rode to Covid-era highs. This confirmed that Americans are getting out more these days and increasingly turning to Lyft to usher them around town. As demand continues to strengthen, analysts are expecting Lyft to turn a profit this year after incurring a loss in 2021. By 2023, Wall Street is projecting earnings per share of $1.20. This implies that as management works through the current headwinds, things will get better in the long haul. It also means that Lyft shares can be had for 17x next year’s earnings estimate. Lyft also looks inexpensive from a technical standpoint. The stock price has slipped below the lower Bollinger band and the relative strength indicator (RSI) is well below the key 30 levels. It may be time to hitch a ride to the recovery rally. Is Under Armour Stock Oversold? Under Armour, Inc. (NYSE:UAA) has seen its market cap cut in half since the start of the year. The last shoe to drop for the athletic apparel maker was a $60 million first-quarter loss that caused Friday’s 24% selloff. Making matters worse, the company said that the supply chain disruptions impacting performance will likely persist for several more months. Supply chain challenges aren’t the only problem at Under Armour. Higher shipping and labor expenses are also weighing on its financials, not to mention new Covid restrictions in the key China market. Things have become so bad that the company has been canceling orders to manage its capacity constraints. Fortunately, there is a silver lining here. Under Armour still has a lifeline in the form of healthy consumer demand. Vendors around the world are ordering clothing and footwear to meet the consumer’s desire for comfortable, high-quality sports gear. Led by a fast-growing sneaker business, management expects sales will grow 5% to 7% this year. Imagine what this growth will look like when supply chain pressures ease. Under Armour shares not only look attractive at 13x next year's earnings but also because technically oversold conditions have set in. They are the furthest away from the lower Bollinger band than they’ve been since October 2017—which, like the present, was a great time to buy. What is a Good Gaming Technology Stock? International Game Technology PLC (NYSE:IGT) is down nearly 30% this year after surging 70% last year. The stock’s return to the $20 level presents a great opportunity for investors to get in on a leading gaming equipment provider with solid growth prospects. While reopening casinos are a boon to IGT’s traditional slot machine business, it is the modern forms of gambling that are its most attractive opportunities. As casino operators looking to get into the emerging online sports betting and gaming space, IGT’s technology is a viable, lower-cost alternative to in-house development. IGT entered 2022 with the wind at its back after Q4 revenue of more than $1 billion topped consensus expectations. As the company’s high-margin gaming business becomes a bigger part of the overall mix, analysts are anticipating 24% profit growth next year. This means IGT is trading at a mere 12x FY23 EPS estimates. This combined with the stock’s low volume 37% retreat since November makes it well worth the gamble. Should you invest $1,000 in Lyft right now? Before you consider Lyft, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Lyft wasn't on the list. While Lyft currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. Article by MarketBeat Updated on May 9, 2022, 5:00 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkMay 9th, 2022

How To Retire Early With Zero Regrets And Extra Cash For Life

Depending on who you ask, early retirement has different definitions. Generally, any time before your 62nd birthday when you are eligible to draw Social Security benefits. Recent years have seen the growth of the “Financial Independence, Retire Early” or FIRE movement, which encourages people to retire even in their 30s and 40s. Q1 2022 hedge […] Depending on who you ask, early retirement has different definitions. Generally, any time before your 62nd birthday when you are eligible to draw Social Security benefits. Recent years have seen the growth of the “Financial Independence, Retire Early” or FIRE movement, which encourages people to retire even in their 30s and 40s. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Many Americans do not know how much they will need to save for retirement, which poses a challenge. However, many people can achieve early retirement with dedication and planning. To find out if you can retire early, here’s an overview on how you can make that dream a reality. What is Early Retirement? Traditionally, early retirement was defined as retiring at age 60 as opposed to 65. Even though this is technically true, the notion of early retirement has evolved. Taking early retirement doesn’t mean you’re completely done working. Instead, you work because you want to. In other words, you have the financial freedom to do whatever you please. Early retirement is possible for people as early as their 30s or 40s. The majority of these people, however, also work in some way, often on their passion projects or some other activity. To put that more succinctly, those who work this way work purely for their own sake, not as a necessity. Remember that work can provide us with meaning, purpose, and fulfillment. Moreover, some studies suggest that people who retire early and do not work at all may die earlier than people who continue to work. On the flipside, retiring early allows you to pursue hobbies or spend more time with friends and family. You can also launch your own business. Or, maybe you’re just fed up with the rat race. It is therefore not the goal for many to stop working altogether. The goal is to be free to choose whatever you want to do. How to Retire Early If you want to retire early, there are a lot of factors to consider. But, here’s a blueprint you can refer to to get started. Get the foundation in place. Want to retire early? You first need to posses the right mindset. And, you’ll also need a financial plan in place — ideally as soon as you’re kicking off your career. Take your savings strategy to the next level. It’s crucial to change your attitude towards money if you’re serious about retiring early. And, to get started, a conscious tradeoff must be made whenever money is spent. More specifically, a little belt-tightening won’t do the trick — despite popular opinion. Rather than swearing off your daily latte, the key is cutting back on high-cost expenditures. So, while making your coffee at home can help you stick to a budget, it’s also not going to make early retirement possible. To put it simply, you should live well below your means. As result, you’ll be able to stash away a large part of your earnings. How much should you be saving? Financial planners advise aiming for 30% of one’s earnings over a typical 40-year career instead of 10% to 15%. That may sound like an unachievable goal. But, it’s possible if you automating your savings so that you don’t spend it. Also, whenever you come across a windfall of cash, think bonuses or tax refunds, contribute these funds to your nest egg. Do not succumb to lifestyle creep. If you get a huge raise or promotion, you know you should treat yourself. But as you earn more, there’s a natural tendency to spend more. Financial advisors call this “lifestyle creep.” Again, setting up an automatic deduction from your paycheck or a bank transfer can ensure that you save half of those additional dollars. At the same time, it’s important to spend your dollars carefully without feeling restricted. For example, you can still travel after researching the best deals or finding ways to reduce your spending. Maybe you could visit a friend or family member and stay with them for a couple of days instead of booking a hotel room. Again, just because you “retire” doesn’t mean that you’re no longer working. You could work part-time or maybe start a side hustle. This way you’ll have more free time while still having an income stream. Spend less on housing. Your greatest expense, and therefore greatest opportunity for saving, is probably your house. In fact, the average American’s housing budget consumes a third of their income, according to the Bureau of Labor Statistics. But, what if want to buy a new home? Keep your home if it is large enough. If not, then don’t buy the biggest house you can buy. To find out what you can realistically swing, use online calculators from Bankrate, NerdWallet, or Mortgage Loan. Based on your income and other financial information, these tools will let you figure out how much mortgage you can afford. Keep in mind, though, that you do not have to borrow the maximum amount. Keep your housing expenses to 30% of your income or lower if you would like to maximize your savings. Make the most of tax savings. Are you serious about retiring early? If so, you should put away as much money as possible in tax-favored accounts. The most obvious place to start would be maxing out your 401(k). Employees can contribute up to $20,500 for 2022 to their 401(k). An additional $6,500 catch-up contribution is available to individuals over the age of 50 in 2022. Another option is a Roth IRA. Contributions to Roth IRAs are made after-tax. Remember that Roth IRAs require a certain level of income to qualify for contributions. You must have a Modified Adjusted Gross Income (MAGI) under $140,000 for the tax year 2021, or under $144,000 for the tax year 2022, if you file as a single person. If you’re married and file jointly, though, your MAGI must be under $208,000 for the tax year 2021, or under 214,000 for the tax year 2022 to contribute to a Roth IRA. Combined, you can contribute the following amount to all of your IRAs; Under age 50, $6,000 If you are 50 years old or older, you will receive $7,000 Furthermore, a SEP-IRA can be used to save a portion of the income from your side job, as well as your regular job. If you’ve maxed out these retirement contributions and the funds in your budget, you may also want to buy an annuity. This is tax-deferred insurance product that guarantees a lifetime income. It’s a safe to prevent outliving your savings and can be a supplemental retirement income stream. In addition, if you’ve got a high-deductible health plan, put as much into a health savings account as possible. When certain factors apply, an HSA can be a better investment than a 401(k). If the money is used for qualifying medical expenses today or in the future, HSA earnings aren’t taxed, and withdrawals are tax-free as well. As of 2022, for self-only coverage, you can contribute $3,650, and for family coverage, $7,300 Estimate your retirement savings. Expenses and income estimates will be essential if you want to plan a successful early retirement lifestyle. Based on your Social Security income, your pension income, and any side jobs you may have, it is generally easy to estimate your retirement income. As a retiree, most of your income is likely to come from Social Security and, to a lesser extent, pensions. These payments can usually be collected early, often as early as age 55 with a pension and at 62 for Social Security. You will, however, receive smaller monthly benefits if you take benefits early. Even if Social Security is simply the cherry on top of your retirement cake, that will affect your bottom line. If you claim your benefits early, it will be projected on your Social Security website. It may be best to visit a Social Security office or meet with a financial professional if you’re part of a couple with two incomes to weigh options. For example, if you die with a higher monthly benefit than your spouse, your spouse will receive your benefit. The early you claim your benefits, the less you receive, and the less your spouse could benefit if you die early. You can estimate your monthly pension payments at different ages by asking your employer’s pension administrator. After you have these estimates, you’ll have a better idea of how much income you can expect for any specific period of time. Calculating your expenses, on the other hand, can be difficult. Create your post-work budget Consider the lifestyle you want and how much it is likely to cost you when you are within five years of your desired early retirement. Identify where you will live as well as what activities you’ll pursue. Most people incorrectly believe that when they stop working, their expenses will decrease. The truth is that retired people spend about 20% more than they while working. While you’ll have more time to pursue hobbies and take trips, this obviously costs more than working all day. And, if you leave the workforce young, you’ll likely have the energy and health the enjoy an active and most likely pricey retirement. You should be aware that some items in your budget may increase faster than inflation as a whole. The cost of health care, for example, could increase by as much as 7% to 10% every year. A retirement income calculator like T. Rowe Price’s Retirement Income Calculator can show you whether your portfolio is on track to make early retirement possible. Choosing between boosting your savings, reducing your lifestyle expectations, or delaying retirement will be a difficult choice. In short, add up the pensions, Social Security, and savings you may be entitled to. Next, calculate your anticipated monthly expenditures (including income taxes) if you were to retire five years early and would be eligible for Social Security and pension benefits sooner. This should help you figure out your retirement budget. The average American household budget. If you look at the average American household budget, you can see how your budget compares. Using the Bureau of Labor Statistics’ Consumer Expenditure Survey, it is possible to determine how much is spent on everything from housing and transportation to clothing, entertainment and charitable contributions. Currently, data from 2020 is available. According to the BLS survey, the average household earns $84,352 a year and spends $72,258 a year. Data shows that roughly $5,854 is spent on bills and other expenses a month. So, let’s break this down. Housing In 2020, households spent an average of $21,409 on housing, including rent, mortgage payments, utilities, furnishings, laundry and cleaning supplies, according to the BLS survey. Taxes, interest, and maintenance accounted for about $7,473 of homeowners’ annual expenses; Mortgage interest: $2,962 Property taxes: $2,353 Maintenance, repairs, and insurance: $2,158 Utilities American households paid an average of $4,158 in 2020 for utilities, up from $3,737 in 2013, representing about 19 percent of all housing-related expenses. The calculation includes heating and cooling, internet service, and cellphone service. Natural gas: $414 Electricity: $1,516 Fuel oil and other fuels: $105 Telephone services (including cellphone service): $1,441 Water and other public services: $682 In the U.S., energy costs vary significantly by region, so Americans pay different prices to heat and cool their homes. Transportation In 2020, stay-at-home orders and remote work brought down transportation costs by nearly 9 percent per household as a result of stay-at-home orders and remote work. On the other hand, household expenditures on vehicles increased slightly – just over 3 percent – in 2020 over 2019. In 2020, the average household’s transportation expenses were: Vehicle purchases: $4,523 Gasoline, other fuels and motor oil: $1,568 Other vehicle expenses: $3,471 Public and other transportation: $263 Taxes According to figures from the U.S. Census Bureau, American households earned an average of $84,352 in 2020 and paid an average of $9,402 in personal income taxes after accounting for $1,911 in stimulus payments from the government. Due to stimulus payments, taxpayers paid the lowest amount of taxes since 2015. Federal taxes amounted to $8,812; state taxes amounted to $2,430; and other taxes amounted to $72. Additional expenses. Food: $7,316 Health care: $5,177 Entertainment: $3,341 Apparel and services: $1,434 Personal care products and services: $646 Engage rather than beat the market. Low-fee index funds are preferred over riskier, volatile investments like stocks or cryptocurrencies by those looking to retire early — specifically FIRE followers. If you’re unaware, the S&P 500 is an index fund that reflects the performance of the 500 largest companies in the U.S. based on market capitalization. Index funds are basically baskets of stocks that track the performance of a major stock index. “The best advice I have is the conventional wisdom in the financial independence community is that it’s better to participate in the market than to try to beat it,” Ed Ditto of Early Retirement Dude told CNBC. “And one of the best ways to do that is to buy low-cost index funds. You’ll find that the Vanguard S&P 500 ETF is the darling of the FIRE set.” If you invest in index funds, you get exposure to stocks from a wide variety of industries, explains Trina Paul for CNBC. Therefore, when you invest in an index fund that provides diversification, you take on less risk than if you bought individual stocks. You might see gains in another sector which will offset a decline in another. FYI, from 1970 to 2020, the S&P 500 returned an average of 10.83% per year, according to Investopedia. Getting started with investing. TD Ameritrade, E*TRADE, or Vanguard are all solid options if you want to get started investing, suggests Paul. Unlike traditional brokers, these platforms don’t charge commissions for the trades they execute. The money you invest in these funds, however, will be subject to expense fees known as expense ratios. An expense ratio is a fee charged to manage a fund. As an example, a fund charging 0.15% expense ratio would cost you $1.50 for every $1,000 you invest, clarifies Paul. A robo-advisor, such as Wealthfront, Betterment, or Charles Schwab, is a great place to start if you don’t know where to begin assembling your investment portfolio. A robot advisor invests on your behalf after obtaining a picture of your current finances and future goals. Typically, you’ll enter your age, risk tolerance, and investment horizon, she adds. After the portfolio is constructed, the robo-advisor will select stocks and bonds from a large selection. Upon reaching your financial goals, your portfolio will then be automatically adjusted over time by sales and purchases of funds. Along with fund expense ratios, robo-advisors charge accounts fees. By reading the fine print, you will know how much money you will need to invest. Following their success with index funds, some early retirees and FIRE followers move on to other asset classes requiring more expertise and knowledge. “As time goes along, and as your portfolio starts to build, you owe it to yourself to take new risks,” Kiersten Saunders of rich & REGULAR. “I think what people find when they get online is they start to see all of the hype and the buzz around crypto, NFTs, real estate, these types of asset classes that are either very risky or have high barriers to entry.” Know how far your money will go as inflation increases. In order to plan for a comfortable retirement, you should consider inflation. “After all, if your retirement is 20 years away and you aim to save $1 million for it, that $1 million won’t have the same purchasing power in 20 years as it does today,” writes Selena Maranjian for the Motley Foul. The inflation rate has averaged about 3% annually historically. Although, it has been different in different years. Over the course of 25 years, an interest rate of that kind will roughly halve your dollar’s purchasing power. To illustrate how you can include inflation in your planning, imagine you’re still 20 years from retirement and anticipate living on the equivalent of a $50,000 income. “You could take the number 1.03 and raise it to the 20th degree — by punching buttons such as 1.03 ^ 20 on your calculator — getting 1.81,” states Maranjian. “Then multiply $50,000 by 1.81, getting $90,306. That’s the actual income in 2040 that would have a similar purchasing power as $50,000 in 2020.” Dividend-paying stocks help combat inflation because they typically increase their dividends annually. As such, the stock price will rise over time as well. “If you have, say, $100,000 invested in dividend payers with an overall average yield of 3%, you’ll receive $3,000 in dividend income this year,” she explains. “If those payouts grow by an annual average of 5%, in 10 years they will be generating close to $4,900 per year.” The cost of annuities with inflation-adjusted features may also help combat inflation, as can investing in Treasury Inflation-Protected Securities (TIPS) bonds. Consider your health (insurance). In the years between early retirement and Medicare eligibility at age 65, no one wants to burn through their retirement savings by paying for unanticipated healthcare costs. Until you qualify for Medicare, you’ll need some health insurance coverage if you lose your employer-sponsored policy. You can continue your employer-sponsored coverage through COBRA, join your spouse’s health insurance plan, or enroll in a health insurance plan through the Health Insurance Marketplace at If you belong to an organization, such as AARP, you may be eligible for discounts on coverage. Additionally, “long-term care insurance may be worth considering,” recommends Due Founder and CEO John Rampton. “In addition to the costs associated with long-term care, medical insurance for it can be expensive as well.” You might want to look into it while you’re still in your middle age to save money. Richer people may be able to pay for it themselves, while those with less wealth may not be able to afford it. This makes middle-income individuals the ideal candidates. “By eating more nutritiously and exercising more, you may also be able to save a lot of money and years in retirement by taking care of your health,” John advises. And, if you have dependents, like a spouse or children, purchase a life insurance policy to protect their livelihood. Work with a financial advisor. You are faced with two major challenges if you wish to retire early; The retirement savings period is shorter. In retirement, you will have more time on your hands. Working regularly with a financial advisor is a good idea unless you’re a season investing pro To make it easier for you to meet your retirement goals, an advisor can develop an investment strategy. A financial planner can also show you how much you need to invest each month to achieve your goals within a certain period of time. You can work with your advisor to make sure that the money you receive lasts after you retire. Dividend income, required minimum distributions, Social Security, defined-benefit plans, and real estate investment income are examples of income streams. Since you might end up working with that advisor for decades, it’s imperative to find someone you trust and are comfortable with. Also, the cost of a financial advisor should not be seen as merely their time, but as their expertise, too. After all, you will more than make up for the costs of that advisor if you work with one with the right expertise who can also steer you in the right direction. Frequently Asked Questions About Early Retirement How Do I Know When I Should Retire? There are various factors you need to examine when you’re deciding when to retire. First and foremost, you need to how much you already have saved and will it help you maintain your lifestyle. Additionally, you need to consider when you can start receiving different benefits. And, you need to determine when you can start taking advantage of your retirement plans. What Is The Ideal Age To Become Debt-Free? It’s often recommended that individuals are debt-free by the time they are 45 years old. Why at this age? By 45, you should have no debts except good debt like a mortgage. And, at this point, you should begin saving for retirement because this is where you should be in the second half of your career. When Can I Start Withdrawing From My 401(K) Without Penalties? When you stop working, you can typically withdraw funds from your 401(k) without incurring penalties after age 59 1/2. As soon as you turn 72 (or 70 1/2 if you were born before July 1, 1949), you are required to take the required minimum distributions. If you retire later, you must take the required minimum distributions by April of that year. How Does Early Retirement Impact Social Security? “Workers planning for their retirement should be aware that retirement benefits depend on age at retirement,” notes the Social Security Administration. “If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.” “Starting to receive benefits after normal retirement age may result in larger benefits,” adds the SSA. “With delayed retirement credits, a person can receive his or her largest benefit by retiring at age 70.” When you retire early, you lose 5/9 of one percent of your benefit for every month before the normal retirement age, up to 36 months. A benefit reduction of 5/12 of one percent per month occurs if the number of months over 36 is exceeded. “For example, if the number of reduction months is 60 (the maximum number for retirement at 62 when normal retirement age is 67), then the benefit is reduced by 30 percent,” the SSA states. “This maximum reduction is calculated as 36 months times 5/9 of 1 percent plus 24 months times 5/12 of 1 percent.” What Is A Good Monthly Retirement Income? Each individual will have a different definition of a good monthly retirement income. A good retirement income will depend on a variety of factors. At the minimum, this includes expected lifestyle in retirement, dependents, such as children or grandchildren, outstanding debts, and overall health. However, a good retirement income is generally considered to be 70% to 80% of an individual’s last income before retirement. Article by John Rampton, Due About the Author John Rampton is an entrepreneur and connector. When he was 23 years old while attending the University of Utah he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months he had several surgeries, stem cell injections and learned how to walk again. During this time he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine, Finance Expert by Time and Annuity Expert by Nasdaq. He is the Founder and CEO of Due. Article by John Rampton, Due Updated on Apr 22, 2022, 2:40 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkApr 22nd, 2022

Transcript: Luana Lopes Lara

     Transcript: Luana Lopes Lara The transcript from this week’s, MiB: Luana Lopes Lara, Kalshi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This… Read More The post Transcript: Luana Lopes Lara appeared first on The Big Picture.      Transcript: Luana Lopes Lara The transcript from this week’s, MiB: Luana Lopes Lara, Kalshi, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast, I have an extra special guest, Luana Lopes Lara is a co-founder of Kalshi. They are a derivatives trading marketplace, where you can go and trade event contracts on such disparate occurrences such as COVID-19, economic outcomes, interest rates, Federal Reserve, politics, climate and weather, culture, the Oscars, the Grammys, science and technology, all sorts of really fascinating places. They are the only such marketplace that has been approved for the sort of events trading by the Commodity Futures Trading Commission, the CFTC, which makes them both fascinating and — and unique. There’s nothing else like them. This provides a way for individuals and institutions to hedge all sorts of really interesting events. And as opposed to having think about, well, if this happens, what’s the ramification in gold, or oil, or inflation, or interest rates, you can actually bet on that exact event and hedge your business or your portfolio. It’s really quite fascinating. I thought this was really interesting conversation, and I think you will also. So with no further ado, my conversation with Kalshi Co-Founder, Luana Lopes Lara. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Luana Lopes Lara. She is the co-founder of Kalshi, one of the only derivative trading marketplaces that allows the trading of event contracts in order to hedge against major business and political events. Kalshi is the only marketplace to receive approval from the Commodity Futures Trading Commission, who regulates the trillion-dollar derivatives industry. Luana Lopes Lara, welcome to Bloomberg. LARA: Thank you so much. I’m very happy to be here. RITHOLTZ: So — so let’s start just with that unusual intro, you’re the only CFTC-approved way to trade on the outcome of events. Explain that a little bit. LARA: Right, exactly. Kalshi is a financial exchange that allows people to trade on the outcome of a lot of different events. So things from, will inflation keep going as high as it is right now, will the Fed raise rates to like, well, 2020 with the hottest year on record? And what really sets us apart is that we’re the only — the first and only ones regulated by the CFTC to do this in the United States. RITHOLTZ: So — so let’s talk about that because I love the story about you guys. You and your co-founder, you start calling attorneys, and one day, you end up calling like 60 or 70 lawyers in a single day. And pretty much every one of them said, “People have been trying to do this since the 1980s. It’s never been approved. Just forget about it, it’s not happening.” Tell us about that. LARA: Right. So we really wanted to build Kalshi the right way. So to view the exchange that is sustainable and — and can be a pillar of the financial world, we wanted to make this really big, get the right partners on board, and really try to build something that’s going to outlast CME. You know, like, CME is around there for like 150 years. RITHOLTZ: Right. LARA: And the way to do that, for us, was to build a proper financial exchange, to build this right. And we knew that getting regulated was the first step and like figuring out how to do it right. But obviously, me and my co-founder were both computer scientists, we knew nothing about regulation. So we sat down and put on a spreadsheet the names and — and emails of – of 65 different lawyers that we thought maybe could be related to this, and we called one by one. I think we split who was going to call who. And all of them were just like, “That’s not going to happen. The CFTC won’t allow this. It has already — they already said no to this in the past.” But because of a friend of a friend of a friend, we ended up getting to Jeff Bandman, who works with us till today. He’s an ex-official of the CFTC, and he really understood the Commission and – and helped us — started — helping us start navigating the entire situation. And yeah, it was two years of — of — of that entire engagement and iteration of the CFTC with all their core principles and concerns that they had, to address them and — and really ended up getting regulated in November 2020. RITHOLTZ: So it sounds like it wasn’t so much that the CFTC was against the idea of event contracts in order to hedge on these circumstances. They just didn’t like what was presented them previously, over the previous 40 years, or — or did something change that they suddenly said, “Oh, we used to think this was a bad idea. Now, we think it’s a good idea.” LARA: I think it was — it’s more of the first. I think it was about presenting to them why we thought event contracts were so important, and how they could really be used for hedging. And every day hedging like — like retail, and Americans every day can hedge things like inflation, like rates, risks that we see and read about like in the news or on TV every day. And it was really like presenting to them and getting them to comfort with how these markets work, how they weren’t easy to manipulate, how the rules could — could operate. So really getting them to comfort with how the exchange, the markets, and all of our contracts could — could operate, and that’s what took that long. It wasn’t — in my opinion, it was more like explaining what we wanted to do. They were fantastic from the beginning to really listening and working with us. It wasn’t that they were just like, “No, we’re never going to do this.” RITHOLTZ: I — I think it’s interesting that it took people from outside of the world of finance to bring an idea into finance from a technology perspective and say, “Whatever the logistical hurdles we have to meet in order to receive regulatory approval,” that wasn’t like an ideological problem. To you, it was a, “Well, this is a logistical problem that we have to solve. And once we solve it, we can get this going.” So how long did the back and forth with the CFTC take to get approval? LARA: Yeah. No, it was two years or two years and a half. RITHOLTZ: Wow. LARA: And yeah, we used to say it’s like we were climbing a very high mountain, and then as we started climbing more, we would see it’s actually twice as high and it would keep – and it would keep multiplying. Because the thing is we would go to them and — and they would have concerns and issues, so we would go back and solve the issues. A lot of it, as you mentioned, was related to technology. We did analysis on similar markets on what we could do, and viewed the surveillance systems and all of those things, and going back to them, and then they were like, “Okay, that’s fine.” But we have all these other issues now, and then we would go back and — and figure them out and — and — and do that one by one. It was like walking in the desert a little bit. We didn’t know where — where the end was. But it ended up working out. RITHOLTZ: So — so let’s talk a little bit about your platform. This is unlike futures and it’s unlike derivatives, and that when you are purchasing a contract, you are putting up the full dollar amount. It’s not like where you’re putting up 10 cents on the dollar, or one cent on the dollar. If you’re making a $1,000 bet, you are posting a $1,000. How much did that factor influenced the CFTC that this wasn’t just going to be reckless speculation and — and people fooling around, this was really hedging? LARA: Right. So we are fully cash collateralized. So every — as you said, every dollar that you can lose or every dollar that you — you trade, you have to have it with us before. And I think this really helps with the safety of the platform and it really started from us. We really want to start in a way that is very safe for everyone, and we can really understand the system before going like too far ahead. And we really see this as very important. So all the funds are fully cash collateralized. But obviously from — from the CFTC perspective, it adds to their comfort to the fact that there can’t be like leverage or margin or more risk added to the system, that all the money is collateralized, and the retail is protected because of that. RITHOLTZ: So equities, you can put up half the – the dollar amount, 2 to 1, futures or something like 10 to 1. Options, if you go out of — out of the money and far enough into the future, it’s — it’s a 100 to 1. Is there ever a plan to move away from the 1 to 1, dollar for dollar, maybe not option 100 to 1? But certainly, margin and equity market seems to be pretty reasonable at 2 to 1. LARA: At the moment, we’re really focused on retail and fully cash collateralization — fully cash — being fully cash collateralized. But at — in the future, I think our goal is to be like the New York Stock Exchange for events. So having — being really the — the central place of the ecosystem, and having like different brokers and institutions, hedge funds, market makers plugged into us, the exchange. At that point, it would make sense to start considering something like that. But right now, we’re completely focused on retail and having it fully cash collateralized as well. RITHOLTZ: Right. So once — once it becomes a big institutional exchange, then — then you can explore that. LARA: Right. RITHOLTZ: So since it’s retail, let’s talk a little bit about retail. Gamification is a real big issue. We’ve seen Robinhood do this. We’ve seen a number of other sports gambling platforms doing this. What are your thoughts about gamification when it comes to events trading? LARA: Yeah. I think the gamification question is a very interesting one, because I think it’s less about the asset class and more about the actual platform and the mechanics. So for example, you can trade equities on Robinhood, or Charles Schwab. The conversation about gamification is a lot more on Robinhood than on Charles Schwab, even though the underlying like is the same, you’re trading equities. So we really believe event contracts are — have a very big economic purpose and can be used for hedging and all of those things that we — we talked about. And the gamification would come only in the platform. But we’re very, very focused on building a platform that’s safe, easy to understand and to use, but not — not gamified. RITHOLTZ: So let’s go over some of the type of events that you guys trade. You could — you can make bets on COVID-19 and vaccination, on economics, inflation, mortgage rates, politics, climate and weather, world culture, science and technology. Let — let’s — let’s take some examples from this. I’d love the idea, will the 30-year fixed rate mortgage be above 3.9% on April 15? In other words, if I’m buying a house and closing on it, and concerned that rates might rise, I could take a trade against that and hedge that position. And I don’t have to be a billion-dollar hedge funds. I could just be someone buying a house. LARA: Exactly. I think all of our contracts have economics purpose, and they can really be used for hedging. For example, all of our COVID markets, during the Omicron wave, you could really see like even before the news started reporting it, the amount that it was taking up of. And then we’ve talked to the users, and they are, “Oh, wow, like I — I might not be able to go back to school. I want to hedge like that — that situation and all of that.” So a lot of the contracts I’m very interested in, for example, is the half point rate hike for — for March. I think it’s — it’s a market that went up a lot during, I think, one of the — there was some news that that it was going to go up … RITHOLTZ: Right. LARA: … by that. And then it went down again. And — and other ones are GDP and inflation, really just getting into the economic situation we have nowadays. RITHOLTZ: Number of Americans — so these are all “yes or no” contracts that — that’s … LARA: Right. RITHOLTZ: … pretty clearly determined. It’s black and white. Will 254 million Americans be vaccinated by May 1st? But I saw a contract, will America achieve herd immunity by September 1st? Who is the determiner of whether or not herd immunity — how do you define those terms? LARA: Yeah, that’s a great question. All of our markets are like legal binding documents. So they’re like 40 pages determining what the real rules are, to really make sure that there’s no room for indeterminacy or anything of the sort. So this market, specifically, I’m not exactly sure. I think it’s definitely the CDC or some number around there. But if you – like, all of our rules, if you go to our rulebook, it has very specifically defining where — which number we’re using, how we’re using, which target, if it has to be above or below a certain number, and it ends up being very determined. But for COVID markets, we’re using CDC numbers for — for some of our sources. RITHOLTZ: So I mentioned world culture, that’s kind of interesting. Is there a lot of activity in who’s going to win Best Picture or who’s going to be the Best Actress at the Oscars? How — is that a seasonal thing when — each year or how does that trade? LARA: Yeah. Launching the Oscar markets were – it was very important for us because they were the very – very first regulated derivatives, I guess, in the entertainment industry and Academy Awards. We have traded more than 150,000 contracts … Ryan Wyrtzen: Really? LARA: … in the Oscars so far. RITHOLTZ: Wow. LARA: … and it’s only been a couple of weeks. And we really expect the — the trading there to — to be a lot higher, closer to — to the ceremony … RITHOLTZ: Right. LARA: … or during the ceremony. But it’s interesting, a lot of people say that the Oscars are — are dead or irrelevant. But the movie industry is so big too nowadays, that there’s so much — so many people that are so impacted by the results of these awards, and things of that sort. And yeah, on the seasonality point, I think that the interesting thing about the entertainment industry is that you have awards, for example, like the Oscars or the Grammys, and we also have markets on. But you have weekly things, for example, album, sales numbers … RITHOLTZ: Right. LARA: … Billboard charts, and things like that, that we offer markets on every week and have a lot of room for like modeling and alpha, and things of that sort. RITHOLTZ: So — so I know studios spend a lot of money on marketing and promoting, leading up to the Oscars. Because if a — let’s say a small independent film wins Best Oscar, it seems a huge — it gets a huge uptick in subsequent box office and — and other sales or streaming rights. I’m wondering if part of their marketing plan is going to include hedging on Best Oscar. They can not only spend, you know, a million dollars on promotion, they could buy a contract that offsets not winning Best Oscar. LARA: Yeah, that’s our goal, is to get all of them to come and really hedge all this risk that they have. RITHOLTZ: So — so where’s the volume today? Where are you seeing the most amount of activity? Is it — is it inflation and Fed activity? Is it GDP? What — where — where’s all the money flowing in on your platform? LARA: Right. It’s actually interesting, because when we launched, we really expected it to be category specific or concentrated in specific categories or economics, entertainment, transportation, technology. But it really is about what — what the news are. So what’s top of the New York Times? What’s in the newspaper the whole day? And what’s in the news? And right now, as you mentioned, the Fed March meeting is — is very — is a very — it’s a market with a lot of … RITHOLTZ: It’s live. It’s hot. LARA: Right. It’s very hot. Yeah, for sure. But for us, we’ve — we’ve seen this, like news-based activity lot, like the Omicron wave, as I told you. When the infrastructure bill was passing, there was a lot of activity over there; or when Jay Powell was going to get renominated, there was a lot of activity in that market. So it’s really about what’s in the news and what people see their risks associated with, and where they think there’s most room to make money. And right now, the Fed rates, people are really disagreeing on that. And there’s a lot of volume and volatility on that market. RITHOLTZ: So — so you guys didn’t exist when Brexit had come up. That was before your time. But you have been around with Russia and Ukraine, and I noticed there’s not a lot of activity there. Why not do a futures contract on will Russia — it’s obviously too late today. But in January or December, you could have done a “Will Russia invade Ukraine by February 1st, March 1st, April 1st?” LARA: Right. We avoid any contract that’s related to war, terrorism, assassination or — or violence of any kind. We don’t want to have those — those markets on our platform. But we do have markets that are adjacent to that. So for example, markets on the price of ruble or — or the price of oil, natural gas in the U.S. and Europe. So we have markets that are adjacent. We just don’t want to have markets directly related to war, terrorism, assassination, or those things. RITHOLTZ: Makes sense. You don’t want to incentivize anybody to misbehave. LARA: Right. Exactly. RITHOLTZ: In the past, I’ve heard futures described as a marriage between hedgers and speculators. So if you’re an airline, you want to hedge the price of oil. But someone got to be on the other side of that trade, so incomes speculators. Are you seeing that same sort of relationship amongst Kalshi clients? LARA: Yeah. I think Kalshi is one of the most pure forms of exactly this hedging and speculation match. I think one – a very simple example to understand this, if you think of rain in New York City, right? Like, you can have like an ice cream truck buying – an ice cream truck will be really — really hit if — if it rains for like a lot of days, because people will buy less ice cream. So they can buy a “yes” contract to really hedge that offset that they have. On the other side, there can be someone that is going to speculate, and seeing there’s a forecast for 20% rain in the next couple of days and they are willing to take the — the “no” side because they think that there’s only a 20% chance it’s going to rain and — and it seems like they can make money. So then you can really have a match of like people that actually need to have a contract for hedging, almost like insurance, and people who – who because of forecasting and probability and — and what they think the fair value is, is going to take the other side. And then at the settlement, for example, if it does rain, it ends up being that everyone is happy because the speculator makes money, because they were correct. No. RITHOLTZ: Right. LARA: Right. RITHOLTZ: The — the hedger is protected against the event. LARA: Right. Yes. Right. RITHOLTZ: And the speculator won the trade. LARA: Right. Exactly. And exactly, you — you got it totally right. RITHOLTZ: So — so let – that raises a really interesting question. Who are your clients? Are they hedge funds and institutions? Are they retail investors, or is it a whole spectrum of people? LARA: We really focus now on — on retail. And our — our biggest amount of users right now is the traditional option trader, like informed retail options traders. But the way that we see this — this growing is we want to keep growing within the retail trading and options trading community. And then our next step is getting brokerages on board so that you can now go and trade on event contracts through your interactive brokers or e-trade account. And then after that, building enough liquidity to start bringing more prop shops in and — and smaller firms and then hedge funds and — and then institutions, and maybe we can have maybe a Burger King hedging, I don’t know, price of plastic straws or something like that. RITHOLTZ: So — so the platform eventually becomes an exchange? LARA: Exactly, exactly. I think we — we see it as a buildup of liquidity from — from retail that’s like smaller amounts, but — but — but higher velocity to — to hire bigger and bigger institutions, all the way to become like a full-fledged financial exchange like the New York Stock Exchange or CME. RITHOLTZ: So let’s talk a little bit about how you guys, you and your co-founder, created Kalshi. You kind of were the opposite of Facebook. You know, Mark Zuckerberg famously said, “Move fast and — and break things.” Companies like you and Coinbase and BlockFi spent a lot of time getting approval from the regulators. Tell us a bit about why you took that approach as opposed to moving fast and breaking things. LARA: Yeah. I think a lot of times people are making the short-term trade-off for speed. And in finance, I think it’s different. You can – obviously, you go to market faster if you choose the unregulated route. But with finance, there’s been like a lot of historical examples of unregulated platforms getting meaningful volume and then being shut down by regulators, because they weren’t properly regulated and doing things right from the start. We really think that the opportunity really shrinks if — if you don’t take regulation into account, because then you can’t get real money in the platform. You can’t get real good partners, as we just talked about brokers, market makers, hedge funds onboard. Sometimes you can’t even offer products to U.S. customers. It really boxes into something small, very quickly. And that’s — for us to be the New York Stock Exchange for events, because that’s our goal, the only way to do that was to do it right from the start, going through the regulated path, and — and eating on the cost of the two years and a half waiting, but — but making sure that we’re set for success. RITHOLTZ: So your — your co-founder, Tarek Mansour, he was an equity derivatives intern at Goldman Sachs in 2016. The same year you were a quantitative trader at Citadel Securities. So you guys both had a pretty bright career path. Had you not decided to go out and launch this whole new platform? Tell us what motivated you to say, “Goldman, Citadel, that looks too easy. Let’s — let’s launch a — a new startup.” LARA: Well, that — that’s funny because actually most of our MIT time, we were both very focused on just getting finance jobs and never even thought about starting a company. But yeah, we were both very interested in math, financial history, finance from — from the very start of — of our school years and — and we worked with various financial firms. As you mentioned, Tarek worked at Goldman. I worked at Bridgewater, Five Rings Capital, which is a small prop shop, and then Citadel Securities. At those internships, we really saw the behavior that we say is the Kalshi behavior over and over again. It’s like firms making trading decisions based on events. As we think the European Central Bank is going to raise rates, let’s take this massive position, or really find the structure to make that work. But the idea really crystallized in our heads when we were working, both together, at Five Rings. And there, we were playing this game almost the whole day. It’s called the “maker market” game that people — that everyone would be putting like bids and offers in the probability of something. And then the other person could only tighten the spread or — or trade against you. And there was a single — there was a day that we were just trading — playing this game the entire day. And then I — I don’t remember exactly what market it was, but I took a massive position on Trump doing something. I don’t remember exactly what it was. And everyone thought I was crazy and debated me a lot on that. But I ended up being right. And then when I was — we were walking back to — to where the interns were staying, it was stuck in my head, like why isn’t there a place for people to do this? Like, we love doing this? We do this the whole day. Like, we see in every place we work at, like very big positions, people are trading based on events. Like, why is there no place to do this? And then I sat down and started talking to Tarek about it. Like, why isn’t there — why don’t — why don’t we do it? And we stayed the whole night up talking about it. And it was just something we were so passionate about from the finance side, the product side, everything we always loved. And if there was going to be someone to figure it out, it was going to be us. It just then leaves us the idea for another six months, up until we were like, OK, like, this is a calling, we have to do it. RITHOLTZ: So — so when you say your desks are – and you guys are trading back in 2016, trading events, you couldn’t credibly bet any sort of volume on events like Kalshi does today. You had to go to secondary or tertiary markets. So you’re betting on gold if you’re thinking about inflation. LARA: Exactly. RITHOLTZ: You’re betting on oil if you’re concerned about war. It’s – it’s always once removed, which raises the issue. Even if you’re right, you may not express itself in a market the same way that the bet was supposed to go. LARA: Right. Exactly. I think that in the beginning of COVID, you had this exact thing happening with — with the economy and how you would think about the S&P. And the beauty about event contracts is that it’s direct exposure in what you think. There’s not like a lot of variables for you to keep track of or — or think about of things that can go wrong. That’s why we also think it’s very – it’s the most like natural way of investing, especially if you think for retail. They can’t like keep track or have full desks of people trying to understand what’s going on. It’s a lot easier to do when you have one opinion, and you have a very clear way to get exposure on what you believe in being right or wrong. RITHOLTZ: So — so you’ve spoken about the gambling industry and how incentives are somewhat cloudy. How does your platform correct for that? LARA: Right. The key part about gambling is that the house takes a position in the bets. So the house has an interest on the outcome of — of the bet or — or the market, if you want to call it that, but it’s more just the bet. We are just a financial exchange. So we — you can think of Kalshi a matching agent. We match people that believe something will happen with people that believe something will not happen. If they have equivalent prices, we match them. So we have no interest in whether the market will go away a certain way. We do have an affiliate trader that’s there to provide liquidity so that people can trade, especially as we start the exchange. But the exchange doesn’t take any positions ever. We’re simply matching other participant orders. So there’s no conflict of interest between us and our members. RITHOLTZ: So — so when you look at a racetrack and the odds are set on horses, those odds don’t quite add up and the shortfall is the house take. So it’s never quite 50/50. What does it cost to trade on this platform? What — what’s the — so in other words, if I’m betting a $100 that something is going to happen and I win, do I get $200 back or how — how does that work? LARA: Right? So — so the way that it works is that the “yes” and the “no” prices are from 1 to 99 cents, and whoever is right gets $1. So let’s say I’m buying a “yes” for 40 cents, it means there’s someone buying a “no” for 60 cents. And if I am correct, I make $1, which means I’m profiting 60 cents which is from my counterparty, RITHOLTZ: Right. What – what’s the cost of that trade? Meaning, how does Kalshi make money, and I assume since it’s fully collateralized, there’s a float. That’s going to be a good source of revenue over time. LARA: We don’t make money on float. All of our — our — all of them, user member funds are in a fully regulated CFTC Clearinghouse, which is FTX derivatives, the U.S. derivatives, they are clearinghouse. And we make money on a transaction fee. So we have a small transaction fee that varies on the price of the contract. RITHOLTZ: But what is it averaged ballpark? What does that cost? LARA: I think it’s less than 1%. RITHOLTZ: All right. So, we will have a conversation after we’re done, and I will show you that – I think it was Schwab. When they moved to free trading, their float became 57% of the revenue. So we’ll have a conversation. We’ll see if we can help raise your — your revenue target and – and we’ll go from there. Because especially — it’s one thing if you’re looking at events that are days and weeks out. But if you’re making bets on will 2020 be the hottest year in history, hey, you’re sitting with that money for 12, 11, 10 months. There’s a lot of top line to be gained from — from a little float. We’ll — we’ll work that out with the CFTC. That will be — that will be easy. You guys raised $36 million in a Series A. Sequoia Capital was the lead, probably the most storied venture capital firm in Silicon Valley. Charles Schwab, not the entity I was talking earlier about Charles Schwab in the float. But Mr. Charles Schwab was an investor. Henry Kravis is an investor. Silicon Valley Angel is one of the early investors. And were you with Y Combinator when you were first launching? LARA: Yeah. RITHOLTZ: So — so that’s quite an esteemed list of — of people who said, “Hey, there’s some value here.” Tell us a little bit about the experience at Y Combinator and then doing an A round with some really boldface names. LARA: Yeah. Our experience at Y Combinator was actually very different from most of the other startups. Like, we were measuring regulatory traction, and other startups are measuring user growth, or revenue or — or things — things of that sort. Yeah, and about the Series A, getting a DCM was — was a key part of — of that Series A. I think Kashi is really one of those asymmetric type of investments. We are going to face obviously a lot of challenges and — but we — if we execute against those challenges, we’re going to have massive outlier potential. And we were really trying to find partners and investors that really understood the long-term vision of the company, and share that obsession that we have with event contracts and — and building this entire trading ecosystem. So Alfred from Sequoia is one of those people. He — he did a PhD in these types of markets. He really, really understands it and sees the potential. And obviously, it’s — it’s a Sequoia Sequoia, as you said. RITHOLTZ: Right. LARA: So that was – that was definitely something we thought about. But — but Alfred, specifically, has historically invested in a lot of like paradigm shifting companies like Airbnb and DoorDash. So we really thought it was a good — it was a good fit. And then after Sequoia was our lead investor, we were really trying to fill the round of – with Wall Street investors that could really help us navigate this industry. So yeah, Tarek, my co-founder, he’s obsessed with barbarians at the gate. So — so when … RITHOLTZ: Hence, Henry Kravis. LARA: Right. So when — when one of our seed investors, Ali Partovi, said he could intro and — and we could talk to Henry, I think Tarek was just like absolutely fascinated. And they had a fantastic conversation. He was very interested from — from the very beginning. And with — with Charles Schwab, it was something similar. It was also Ali Partovi introing us to — to him, also very interested in from the start, and he actually told us that our early days at Kalshi looked very similar to his early days starting Charles Schwab. So that was very exciting. And — and yeah, they help us so much till today so it’s fantastic. RITHOLTZ: The funny thing about Schwab is people don’t realize the guy you see with the gray hair in commercials, that’s Charles Schwab. That’s not an actor. LARA: Right. RITHOLTZ: He really exists and has been running the company. Now, I think he’s chairman. But that was really him for — for a long time. So — so let’s talk a little bit about event hedging. And I like this quote, “These markets are a little like an aggregator of public opinion in real time.” So — so what are the implications of this? And is that the sort of stuff your lead investor at Sequoia was studying when he went to school? LARA: Right. Yeah, this is a very important part of our vision. Over time, we really want Kalshi to become the source of truth for forecasting these events that we have markets on. Because of the prices at Kalshi go from 1 to 99 cents, they directly translate to the probability of the event happening. So let’s say the market might be saying there’s a 20% chance there’s a recession this year. It means that 20 cents means that there’s a 20% chance that the market believes there’s a 20% chance … RITHOLTZ: Right. LARA: … that there will be a recession this year. And the amazing thing is that there’s a lot of theoretical and empirical evidence that they are the most effective and most accurate ways of forecasting the future. They’re way better than polls, way better than like pundits on — on the news, trying to say what’s going on. And it’s mainly for two reasons. I think the first one is because when people put money where their mouth is, they are more — more likely to say what they really think and actually do research and everything. And the second one is that markets really aggregate the wisdom of the crowds. You’re getting a lot of different people’s opinions, when they put money behind their opinion, and really aggregating data, and which makes this a very powerful tool. And I mean, any market lover understands what I’m saying. And yeah, making — and — and part of our — our vision and what we really want to do long — long term is make these forecasts core to people’s lives. It’s really part of our mission. With — with event contracts becoming more widespread, we really hope that people will use data in their lives to prepare better for the future, address uncertainty, inform themselves better, and like try to address a little bit of the very biased world and not very data-driven world that we live in nowadays. So we’re trying to get started with that. We’re really trying to get — we have market tickers like any other equity or things like that. We have tickers for all of our markets. So we’re trying to have tickers and prices to be used by news and things of that sort. So we really try to get this very important data, that we believe is very important data out there. But for Alfred specifically, I think he was doing more than like mathematical and like research. He was doing a stats PhD, so somewhat related to this, but not really on the — on the — on this side, but yeah. RITHOLTZ: So — so let’s — let’s talk a little bit about prediction markets that are out there. Historically, they’ve only done a so-so job, partly because they’re not very broad. They’re not that very deep, and the dollar amounts that are traded had been modest. I saw an overlay of about half a dozen different prediction markets before the Russian invasion of Ukraine. And you would think they would all be kind of similar, but they weren’t. They were all over the map. Do you have to get to a certain scale that will fix that problem of prediction markets being kind of thin and easily — I don’t want to say manipulated, but one big trade really has an impact on — on how those markets trade. LARA: Right. Exactly. I think we need a — a base level of liquidity and — and volume for — for the forecast to really work and be really useful. And a lot of these like other prediction markets out there, as — as we talked about, they’re unregulated. They have — they’re very new. They just pop up, especially the crypto ones every other day. And it’s hard to build liquidity and real proper volume like that. But we really think that prediction markets are the way to go to have these — these very good forecasts of — of events, but it needs liquidity and needs volume, and that’s what we’re working on. RITHOLTZ: Really kind of interesting, which raises the question, how are you going to scale this up? How are you going to get to 100 million and then a billion, and then who knows what from there? LARA: Right. We have a lot of ways to — to scale the exchange. It’s kind of what we talked about with — with building up liquidity. Right now, we’re really focused on retail. So getting — we have a lot of option traders, or like what we call informed retail traders in the platform, trying to go in more – deeper into different communities, and trying to get them in to test the platform, things of that sort. And then the next step for us is getting brokers in to offer our markets in their platform, so e-trade, interactive brokers, all of those. And then bringing up the volume, we can bring up like actual liquidity providers, prop shops, hedge funds, and then up until, I guess, insurance companies even offloading some risk or — or like actually big institutions, natural hedgers, bringing them in. So the way that we’re seeing it is really starting to build of retail with getting more and more of the current users that we have, which are option traders, and having more retail as we go to the — to the, I guess, brokers. RITHOLTZ: So — so how big can this get? I mean, is this ever a billion dollars a month? How — how large can this sort of event hedging scale up to? LARA: Right. So event contracts are a lot more like tangible, relatable and — and more direct, as we talked about, then all these other assets that — that preceded it. So we really think when we actually plug it in the financial ecosystem, it can properly scale. Obviously, it takes a lot of time to get there because we need to view the entire ecosystem around events. RITHOLTZ: Right. LARA: It’s a completely new thing. But once it’s properly plugged in the financial system, I can give you some numbers to give some idea, right? I think you mentioned that in the beginning of the CFTC regulating a trillion-dollar industry, like grain futures are $7 trillion industry. RITHOLTZ: Wow. LARA: Commodities, 20 trillion. Interest rate swaps are around, I think, $500 trillion. So not exactly how big the market is, but I think as we expand event contracts, it definitely has a potential to be one of these. RITHOLTZ: Right. Interest rate swaps are $500 billion or trillion? LARA: Trillion. RITHOLTZ: Really? LARA: Right. RITHOLTZ: That’s the notational, nothing is going to get offered? LARA: Right. Yes. You got that point. RITHOLTZ: That — that’s a giant amount of money. LARA: Right. RITHOLTZ: So — so really, startups have a tendency to have this defining moment in their lifespans, where they sort of either pivot or just a moment of clarity, and you could see the whole roadmap laid out. Did you guys have that sort of defining moment at Kalshi? LARA: I would say the biggest — the earliest defining moment we had was actually — before we really started the company, we went to a Y Combinator hackathon. Because before we were like fascinated by it, but we didn’t think it was like going to work. It’s like — it seems so complicated, and like, are we crazy? I think that was the big question in our head, like are we going crazy over here? Then we went to Y Combinator for a hackathon. And there were like these teams with like bunch of servers, crazy computers like — and it was just me and Tarek with our like Macbooks, like try to — to code like a demo of what we were talking about. And then we first presented to Michael then, the CEO of YC and he really didn’t like what we were saying from the beginning. He cut us. Like the first five seconds, he’s like that, like “This is illegal,” like, “What are you doing?” And then we will get very upset. We went in like we – I think we — Tarek even started drinking beer. He’s like, “There’s no way we’re going to be in the Top 10,” which had to present again. And we ended up being in the Top 10. We presented again, and then we ended up being in the Top 3, which were the winners of the hackathon. And I remember that night, when we were going back to — to our friend’s place where we were staying in San Francisco for the hackathon, we were like, “Wow, like maybe we aren’t crazy. Like, we should — like maybe like people believe in what we’re doing.” And it was a very like happy moment for us. And I think right after that, we actually got into the Y Combinator batch. And it was one of the happiest moments we’ve — we’ve had — we’ve had of the company. So that was really like motivating and encouraging, because as I told you, we never thought about being founders. We thought about being like he was going to be — we were both going to be traders full time. So it was like a big shift for us. So that was a very exciting moment. RITHOLTZ: Really interesting. Let me throw a couple of curveballs at you. You and your co-founder, Tarek, both were named to the Forbes 30 Under 30 list in — in the finance category. Tell us a little bit about that. What was that experience like? LARA: Yeah. No, it was very excited. We were very honored to be — to be — to be nominated, especially being like the head up of the — of the finance category. We were really excited after all the work we’ve done. And actually, a funny story is that because of the Forbes 30 Under 30, I went viral in Brazil for a little bit, because the Brazilian Forbes wrote a — wrote a piece about how a Brazilian was in the American Forbes 30 Under 30 and that — because it’s very rare to have Brazilians in the list here. So that was — that was — that was a funny story. But yeah, because of the Forbes 30 Under 30, we also ended up ringing the opening bell at the NASDAQ, which was very exciting. RITHOLTZ: Interesting. LARA: Yeah. RITHOLTZ: And one more — one more curveball. You were a ballet dancer with the Bolshoi. You studied ballet. Tell us about that. LARA: Right. So very different from what I do now, for sure. But I’m from Brazil, originally, and I just came to the U.S. for college. And most of my life before college, I was split between ballet and school. What — what I really loved about ballet was intensity of it all. It was extremely hard to get to the top. It’s extremely competitive. And there’s nowhere to hide, you need to be completely on, you need to give it your all. And yeah, and I — I studied at the Bolshoi Ballet School and it was extremely intense. And — and we had to be extremely disciplined, like measuring our food down to like a four puffs of strawberry before this rehearsal, to be able to get there. But that was –that was one part. And the other part, my — my parents are both engineers and have stem backgrounds. So I was surrounded by that outside of ballet, doing like Math Olympiad and all of that, I also had to get 100 on everything on the math and science side. So I used to do like normal school, I guess, from like 7:00 a.m. because Brazil school’s hours are different. so 7:00 a.m. to like 1:00 p.m., and then ballet from 1 – like 1:30 p.m. to like 9:00 – 10:00 p.m. And then I would actually go study. So that was a very intense part of my life, but I think it really set me up for — for being able to go to MIT and — and — and enjoy everything there. And it’s something that Tarek is very similar to me, he was actually a professional skier before going to college. And — and we have very similar backgrounds. And I think that level of intensity and — and discipline is really what helped us get through the regulatory process and be where we are today. So tough times, but it’s good now. RITHOLTZ: I — do the same thing. I measure my food input down to the quarter strawberry. And you could see it’s how I maintain my girls. So — so we only have certain amount of time left. Let me jump to my favorite questions that I asked all of our guests, starting with what kept you entertained during lockdown? What were you streaming, watching or — or listening to? LARA: Right. I listened to all and — and I’m very into American politics nowadays. So I’m finishing up the 10 American Presidents podcast. But on TV, I think I’m more mainstream. So I just love Succession, House of Cards, West Wing, and so on. RITHOLTZ: Let’s talk about your mentors who helped shape your career. LARA: Right. So I think at MIT, I had two professors that were very impactful in my career and to me. I think the first one was Patrick Winston. He was my advisor and professor, a lot of artificial intelligence classes. He really helped me navigate MIT and set me up to — and set my mindset to where I wanted to be, to like really psychology. And the other great mentor was Peter Kempthorne. He’s also professor of stats, and really, I started being interested in finance in his glasses. And funnily enough, he’s actually one of directors of — of Kalshi nowadays, because we kept very close contact. And we talk a lot to him about like the dynamics of markets and all the stuff we talked about. And since we started the company, I think our biggest mentors have been Michael, the CEO of YC. Up until today, he’s helped us so much. And Ali Partovi, who’s — who runs Neo, he’s one of our seed investors. And they have been really instrumental in like making us better founders, not just like making the company succeed, but better founders and how to like deal with employees, growing — like growing pains, negotiation, all of those things that, you know, like MIT nerds didn’t really know what to do. RITHOLTZ: So let’s talk about books. What are some of your favorites and what are you reading right now? LARA: Right. Some of my favorite – my favorite book is this book called “Americana,” but it’s not the novel. It’s actually the 400-year history of American capitalism. But whenever I say Americana, everyone thinks is the novel. And the other one is this book called predict — “Predictably Irrational,” which is … RITHOLTZ: Dan — Dan Ariely? LARA: Right. Yeah. And it’s — it’s very — some — it has a lot to do with what Kalshi does and I think it’s one of the early books I read on — on prediction markets and decision-making, and I thought it was a fantastic book. And at the moment, I’m finally — Tarek will be very happy to hear this. I’m finally reading “Barbarians at the Gate” after he told me for years that I should, but I barely started, so yeah. RITHOLTZ: And Americana is a Bhu Srinivasan, am I pronouncing it right? LARA: Right. He’s that. RITHOLTZ: He was a guest here a couple of years ago. I love that book. That book is just amazing. LARA: That’s book is fantastic. Yeah, it – yeah. RITHOLTZ: Those people think that, oh, all these companies were, you know, freestanding. It was a public private partnership … LARA: Right. RITHOLTZ: … for a long time. That — that is a fascinating book and I’m surprised someone, as young as you, has found it. It’s sort of off the beaten path. LARA: Yeah. No. It’s — it’s a fascinating book. It made me — especially not being American, I think it made me understand the country and how it works so well, I think, way better. RITHOLTZ: So — so this is the first time I’m going to ask this question of somebody who is so recently out of college, but you’re 25 now, is that right? LARA: Right. RITHOLTZ: So what sort of advice would you give to a college student or a recent college grad who is interested in a career in either startups and technology, or finance and derivative training? LARA: Right. I think the finance industry is very — there’s a very traditional path that people can take. And what really helped me and — and Tarek understand and — and really come up with the Kalshi idea and — and — and understand it and work on it was that we got a lot of exposure to a lot of different types of firms and a lot of different types of roles as well, like we did. I did more of the engineering side, then a little bit of the trading, then a bit of research. And Tarek did like all types of different trainings, because he also worked at Citadel, and Five Rings, and Goldman. And I think that giving yourself a lot of breadth, especially when you’re in college is very important to just understand the industry as a whole, understand when there are gaps, and — and seeing — like finding patterns, like how we found the Kalshi behavior. So I really think it’s about putting yourself out there, trying to learn different things, do different things and — and trying to get a global vision of — of what the industry is and why you want to do, and — and not be too tied to like the traditional path of like entering as like this level and then going up in a big firm and — and things like that. RITHOLTZ: And our final question, what do you know about the world of trading, and hedging, and investing today that you didn’t know, what do I say, four years ago when you guys were first starting out? You’ve been doing it since 2016, so let’s call it six years ago. LARA: Right. Yeah. So what we’re really doing is — is enabling trading and investing. But if I were an investor, what I think I would have liked to know a couple of years ago is that bold bets are — I would take a lot of bold bets. I think generally that’s – the bets that seem ridiculous at first and there’s a lot of debate, then there’s no way that it’s going to work, are usually the ones that are achieved, like the large outlier results. Definitely, I’m biased because Kashi is hopefully one — is going to be one of those bets for a lot of our investors. But I really think it’s about seeing what the world can be in the future and — and taking bold bets to get there. I think a couple years ago, I’ll be very — if I were an investor a couple years ago, I would be very scared to do that. But now, I would think that’s the way to go to really do meaningful investing. RITHOLTZ: Quite fascinating. We have been speaking to Luana Lopes Lara. She is the co-founder of derivatives trading marketplace, Kalshi. If you enjoy this conversation, be sure and check out any of our previous 400 interviews we’ve done over the past eight years. You can find those at iTunes, Spotify, wherever you get your podcast fix. We love your comments, feedback, and suggestions. Write to us at You can sign up for my daily reads at Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Sean Russo is my research assistant. Mohamad Rimawi is my audio engineer. Paris Wald is my producer. Atika Valbrun is our project manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: Luana Lopes Lara appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureApr 19th, 2022

Futures, Treasuries Tumble On Fed Tightening Fears As FOMC Minutes Loom

Futures, Treasuries Tumble On Fed Tightening Fears As FOMC Minutes Loom There is a scene in My Cousin Vinny where Joe Pesci's puzzled wannabe-lawyer character asks the judge if he was really serious 'bout dat. On Tuesday and overnight, incredulous algos and 15 year old hedge fund managers had a similar question to the Fed about its market-crushing, rate-hiking intentions, after yesterday the Fed's in house permadove and Hillary Clinton donor, Lael Brainard, shocked markets when she not only made the case for accelerated rate hikes but also a faster balance sheet drawdown after she said that curbing inflation is “paramount” and the central bank may start trimming its balance sheet rapidly as soon as May. As a result, investors once again feared out that a more restrictive U.S. central bank could end up tipping the world’s largest economy into a downturn, or even a recession, something which is now Deutsche Bank's base case for 2024. The virus resurgence in Asia and the war in Ukraine are also clouding the outlook for prices and growth. “Market participants finally acknowledged that central banks are serious and will raise interest rates significantly to bring inflation rates down,” Florian Spate, a senior bond strategist at Generali Investments, wrote in a note. “We expect the selloff to lose momentum but the general trend for yields is likely to point still upwards.” It also meant a plunge in both US stocks and bonds, and a continuation of this selloff across global markets overnight, which then fed back into US future weakness again this morning and saw tech companies lead U.S. index futures lower on Wednesday as concerns mounted over the pace of the Federal Reserve’s monetary tightening and a worsening pandemic in China. Futures on the Nasdaq 100 were down about 1.5% and contracts on the S&P 500 slid -1% with tech heavyweights among the worst performers in premarket trading. Global stocks and bonds also fell. The Stoxx Europe 600 index was down more than 1%, with travel, carmakers and tech leading declines. 10Y yields soared as high as 2.65% and a gauge of the dollar’s strength rose to a three-week peak. Tesla, Nvidia, Applied Materials, Amazon, Alphabet, Qualcomm and Boeing were among the worst performers in premarket trading. Starbucks slipped after the company announced the ousting of its top lawyer. Here are some other notable movers: Shares of Spirit Airlines (SAVE US) fall 2.6% in U.S. premarket, erasing some of prior day’s steep gains after the budget carrier received a $3.6 billion takeover offer from JetBlue (JBLU US) that topped a competing bid by Frontier Group. JetBlue -4.3%. Twitter (TWTR US) slips 1.3% after two-day surge of about 30%. Elon Musk refiled the disclosure of his stake to classify himself as an active investor, making the change after taking a seat on the social media company’s board. Array Technologies’ (ARRY US) strong order book and better-than-expected FY22 guidance were welcomed by analysts, however they also highlight margin pressure and potential impacts from an antidumping and countervailing duties (AD/CVD) investigation. Array gains 11% premarket. Tech companies led U.S. index futures lower on Wednesday as concerns mounted over the pace of the Federal Reserve’s monetary tightening and a worsening pandemic in China. Apple (AAPL US) -0.8%. Gogo (GOGO US) gains 11% premarket on news that it will join the S&P Smallcap 600 Index before trading opens April 8, according to S&P Dow Jones Indices. US-listed Chinese stocks fall in premarket trading Wednesday, tracking Asian peers, as a selloff in bonds pressures tech shares. The decline in Chinese ADRs follows a 3.8% drop in Hang Seng Tech Index, the most in more than a week, with Alibaba and among the biggest decliners  In premarket trading, Alibaba drops 2.2%, falls 2.5% and Pinduoduo declines 2.8%; Baidu -1.6%, while Bilibili -1.2%. Among electric carmakers, Nio -2.4%, Li Auto -2% and XPeng -2.4%. Even more hawkish surprises from the Fed may be on deck: according to Swissquote analyst Ipek Ozkardeskaya, the Fed minutes expected on Wednesday afternoon may hint at a 50 basis-point hike at the next meeting. The latest comments from policy makers, surging inflation, strong jobs data and rising wages all support an accelerated tightening campaign, she said.  “The market risks remain tilted to the downside,” said Ozkardeskaya. “If there is a good time for the Fed to hit the brakes on its ultra-lose policy, it is now.” The selloff was broad based and also hammered rates, with the 10-year Treasury yield rising as high as 2.65%, taking it back into the ranges traded in 2018 and 2019. Money-market traders are betting on the steepest Fed tightening in almost three decades following Brainard's comments. Sovereign debt across Europe retreated after bonds in Australia and New Zealand tumbled. “The QE honeypot looks close to being empty now,” Jeffrey Halley, a senior market analyst at Oanda, wrote in a note. “I’m not sure we will get a soft landing, and nor am I sure the FOMO gnomes of the equity market will be able to continue ignoring reality, particularly if U.S. yields continue to rise.” In Europe, automotive, travel, technology and consumer companies were the worst performers, leading declines in the Stoxx Europe 600 Index which dropped 1.5%. Delivery Hero sank 5% in Germany. Imperial Brands rose 3.1% after the U.K. cigarette producer forecast a slight increase in profit this year. Here are some of the biggest European movers today: Chr. Hansen shares rise as much as 5.5%, leading gains on the Stoxx 600 and the Health Care sub-index, after the nutritional ingredients manufacturer reported consensus-beating 2Q earnings. Imperial Brands shares climb as much as 3.5% after the company said its FY outlook is in line with the revised guidance issued last month. It’s been a solid start to the year, RBC says. IWG shares rise as much as 6% after the stock is raised to buy from hold at Peel Hunt, with the broker seeing multiple ways the flexible offices firm could create value. Avio shares rise as much as 15% the most intraday in a year after the stock was raised to buy from neutral at Banca Akros after Amazon’s “massive order” for Ariane 6 launches. Huber + Suhner shares climb to a record high after UBS upgrades to buy from neutral, citing “under-appreciated” prospects for the maker of radio- frequency and fiber-optic technology. Semiconductor stocks lead European tech stocks lower on Wednesday as a selloff in bonds steepens amid hawkish commentary from Federal Reserve Governor Lael Brainard. Among semiconductor stocks, ASML drops 3.4%, ASM International -5%, Infineon -3.7%, Nordic Semi -7.6%, BE Semi -4.8% Royal Mail shares fall as much as 4.6%, hitting the lowest since Dec. 21, as Barclays cut its PT on the postal group to 400p from 640p with FY23 likely to be a challenging year. Stroeer shares drop after HSBC cut the advertising firm’s rating to hold, saying the stock may find it difficult to withstand cyclical headwinds as the Ukraine war weighs on economic growth. Avon Protection shares drop as much as 25% with Jefferies saying the protective-equipment maker’s latest update is “disappointing.” Earlier in the session, Asian stocks traded lower across the board following the losses on Wall Street as Mainland China returned from its long-weekend. ASX 200 conformed to the downbeat tone which isn’t helped by the RBA’s hawkish hold yesterday. Japan's Nikkei 225 saw most of its construction and machinery-related names with losses. KOSPI was pressured by its large tech exposure. Hang Seng was also weighed on by its tech exposure as yields continued to rise overnight. The Shanghai Comp returned for the first time this week following its domestic holiday and saw less pronounced losses, with the Real Estate sector feeling relief from reports that over 60 Chinese cities ease policies on housing purchases to support the market. In rates, the Treasuries selloff extended with the curve steepening sharply out to the 10-year sector after Tuesday’s aggressive selloff -- spurred by hawkish Fed comments -- was extended during the Asia session. Wednesday’s focal points include the March FOMC minutes release, expected to feature balance-sheet runoff details. Yields are higher by as much as 8bp after the 10-year rose as much as 11bp to nearly 2.66%, highest since March 2019; The 2s10s curve is steeper by ~4.5bp on the day near 7bp, while 2s10s30s fly cheapens around 5bp follows Tuesday’s 9bp jump wider; 10s30s curve spread is back around 2bp after briefly inverting for first time since 2006. Into the selloff, long-end swap spreads have widened, 10- and 30-year by 1bp-2bp. In FX, Bloomberg dollar spot index fades a push higher to trade flat. GBP and NZD are the strongest performers in G-10 FX, CHF and JPY underperform. In FX, a gauge of the dollar’s strength rose to a three-week peak.   In commodities, WTI crude rose above $103 a barrel, before stalling near $104 . Worries remain that Russia’s growing isolation over the war in Ukraine may further disrupt commodity flows. Fresh sanctions on Russia are expected, including a U.S. ban on investment in the country and a European Union proscription on coal imports. Most base metals trade in the red; LME lead falls 0.7%, underperforming peers. Spot gold rises roughly $6 to trade near $1,929/oz. Crypto markets experienced sudden selling pressure overnight with Bitcoin losing USD 45k, a level it has acquired a foothold on during the European session   Market Snapshot S&P 500 futures down 1% to 4,475.00 STOXX Europe 600 down 0.9% to 458.77 German 10Y yield little changed at 0.66% Euro little changed at $1.0912 Brent Futures up 0.9% to $107.63/bbl MXAP down 1.4% to 179.00 MXAPJ down 1.2% to 593.59 Nikkei down 1.6% to 27,350.30 Topix down 1.3% to 1,922.91 Hang Seng Index down 1.9% to 22,080.52 Shanghai Composite little changed at 3,283.43 Sensex down 0.8% to 59,672.08 Australia S&P/ASX 200 down 0.5% to 7,490.09 Kospi down 0.9% to 2,735.03 Brent Futures up 0.9% to $107.63/bbl Gold spot up 0.0% to $1,923.71 U.S. Dollar Index little changed at 99.50 Top Overnight News from Bloomberg Money-market traders are betting the Federal Reserve will implement 225 basis points of interest-rate hikes by the end of the year. Factoring in the hike already delivered in March, that would mean an increase of 2.5 percentage points for the whole year. The Fed hasn’t done that much tightening in one year since 1994, a famously brutal year for bond investors that even included a 75 basis-point hike The Bloomberg Global Aggregate Index fell below a measure of so-called par value Tuesday, with its price falling to 99.9 -- under the key 100 level at which bonds are often sold to investors. It’s the first time since 2008 that the gauge has traded at a discount to face value The Federal Reserve will unveil details of its likely plans to shrink its massive balance sheet with the release of minutes of the U.S. central bank’s March meeting, as policy makers confront the highest inflation in four decades Leaving the European Central Bank to fight the current bout of energy-driven inflation alone would only work at a steep cost to society, according to Executive Board member Fabio Panetta German factory orders fell in February, dropping for the first time in four months in the runup to Russia’s invasion of Ukraine and underscoring concerns over slower growth in Europe’s largest economy Turkey’s Recep Tayyip Erdogan approved on Wednesday a set of changes to the country’s electoral rules that would bolster his party’s prospects and consolidate the shift toward an all- powerful presidency set to be tested at the ballot box next year The U.S., European Union and Group of Seven are coordinating on a fresh round of sanctions on Russia, including a U.S. ban on investment in the country and an EU ban on coal imports, following the discovery of civilian murders and other atrocities in Ukrainian towns abandoned by retreating Russian forces The European Union’s foreign policy chief described a summit with Chinese President Xi Jinping as a “deaf dialog,” casting doubt on how much cooperation the Asian nation will offer to end the war in Ukraine A more detailed look at global markets courtesy of Newsquawk Asia-Pac markets traded lower across the board following the losses on Wall Street; Mainland China returned from its long-weekend. ASX 200 conformed to the downbeat tone which isn’t helped by the RBA’s hawkish hold yesterday. Nikkei 225 saw most of its construction and machinery-related names with losses. KOSPI was pressured by its large tech exposure. Hang Seng was also weighed on by its tech exposure as yields continued to rise overnight. Shanghai Comp returned for the first time this week following its domestic holiday and saw less pronounced losses, with the Real Estate sector feeling relief from reports that over 60 Chinese cities ease policies on housing purchases to support the market. Top Asian News Hong Kong Chief Secretary John Lee Resigns, Government Says China Backs Ex-Security Chief to Lead Hong Kong, SCMP Says Singaporeans Need $73,549 Just for Right to Buy a Car EU’s Top Envoy Calls Summit With China’s Xi a ‘Deaf Dialog’ European bourses deteriorated further from a tepid cash open, in-fitting with the Wall St./APAC handover, Euro Stoxx 50 -1.6% Such downside was exacerbated by weak Construction PMIs and as yields continue to make further advances ahead of ECB's Lane & FOMC Minutes. As such, the NQ -1.0% is the morning's laggard, though price action thus far has seen the ES give-up 4500 ahead of the 200-DMA at 4484. Top European News U.K. Covid Cases at Highest Level as Immunity Wanes, Study Finds Erdogan Changes Turkey’s Electoral Laws to Bolster His Rule BNP Allows Staff in Europe to Work From Home Half the Time Infineon, STMicro Attractively Valued Despite Softer 2023: Citi In FX, dollar fades fast following rapid rise to fresh 2022 high post-hawkish Fed Brainard and pre-FOMC minutes - DXY reaches 99.759 before retreat to sub 99.500. Swedish Krona outperforms after latest comments from Riksbank member Floden upping the ante for a near term repo rise, EUR/SEK capped below 10.3000. Franc lags as yield and policy divergence weigh and EUR/CHF cross rebounds in a fashion that suggests official intervention, USD/CHF tests 0.9350 and EUR/CHF close to 1.0200 vs sub-1.0150 at one stage. Euro and Pound take advantage of Buck pull back and some chart support to recoup losses, EUR/USD and Cable back on 1.0900 and 1.3100 handles after dip through 1.0895 Fib and 1.3050. Yen reverses more repatriation gains as BoJ maintains YCC, USD/JPY hovering beneath 124.05 peak. In commodities, WTI and Brent are firmer, shrugging off the tepid tone and benefitting from geopolitical premia. amid ongoing sanction announcements/ discussions. However, the benchmarks are once again in relatively thin ranges of circa. USD 3.00/bbl at present. US Private Energy Inventory Data (bbls): Crude +1.08mln (exp. -2.1mln), Cushing +1.791mln, Gasoline -0.543mln (exp. +0.1mln), Distillate +0.593mln (exp. -0.8mln). Gas flows via Yamal-Europe pipeline resume eastward, according to Gascade data, according to Reuters; however, subsequently reported that such flows have stopped. Spot gold/silver are modestly firmer, benefitting from the general risk tone and as the USD takes a breather from recent advances. Central Banks ECB's Wunsch said the inflation target is essentially met and expects the deposit rate to be raised to zero by year end. He said the ECB's rate could rise to 1.5-2% in the longer term, but caveat that even within the ECB there has been no discussion about raising interest rates, according to Reuters. ECB's Panetta says they would not hesitate to tighten policy if supply shocks fed into domestic inflation, not seeking any de-anchoring of inflation expectations. Asking the ECB to bring down high inflation in the near-term would be extremely costly. RBA's Deputy Governor Bullock notes Australian labour market is tight, was seeing some response in wages, with unemployment at 4.0%. Expects some revision upward in inflation forecasts; are now seeing more underlying inflation pressures. Riksbank's Floden says inflation will be much higher in the coming year than predicted in February. We must raise the policy rate much earlier than previously planned. Evident we must reassess and substantial adj. monetary policy plans. US Event Calendar 07:00: April MBA Mortgage Applications, prior -6.8% 14:00: March FOMC Meeting Minutes Central Banks 09:30: Fed’s Harker Discusses the Economic Outlook 14:00: March FOMC Meeting Minutes DB's Henry Allen concludes the overnight wrap DB Research have released a significant World Outlook document yesterday, in which we’ve updated our views on the global economy and financial markets given developments since the start of the year. In terms of the key takeaways, we’ve downgraded our growth forecasts, with an out-of-consensus view that a US recession is now the base case by the end of next year, since higher inflation will require a more aggressive tightening in monetary policy from central banks, and we now see the Fed moving much faster, with 50bp hikes at the next 3 meetings, and a terminal rate of 3.6% by mid-2023. The outlook has been further dampened by Russia’s invasion of Ukraine, which has pushed up energy prices and led to further disruption for key commodity markets and supply chains. With the outlook moving in a more stagflationary direction, we expect growth to slow materially in the second half of 2023, tipping the US into recession by the end of that year. Indeed historically, there’s been just 2 occasions over the last 70 years when the Fed has raised rates by 300bps and left inflation on a downward trajectory without causing a recession. And as we’ve written many times in the EMR, the recent inversion of the 2s10s curve has on average preceded the start of a recession by around 18 months (see more in our recent chartbook here). Over in the Euro Area, we’re also forecasting a more aggressive tightening cycle, with the ECB raising rates by 250bps between this September and December 2023. But unlike in the US, we think Euro Area growth will be modestly above zero in the winter of 2023-24. Along with the updated call for US recession, Jim’s also expecting credit spreads to widen out by the end of next year. See the full credit update from him here. Many of those themes we wrote about in the World Outlook were echoed in markets over the last 24 hours, with a massive bond selloff that was turbocharged by some hawkish rhetoric from Fed Governor Brainard (who’s also been nominated to become Vice Chair). Among the headlines, she said the FOMC would “continue tightening policy methodically” and would start reducing the balance sheet “at a rapid pace as soon as our May meeting.” Furthermore, she went on to say that she expected the balance sheet “to shrink considerably more rapidly than in the previous recovery, with significantly larger caps and a much shorter period to phase in the maximum caps compared with 2017-19.” Today’s FOMC minutes should give more detail about what QT may look like, which our US econ team and Tim from our team covered here. And there was also a comment that inflation was “subject to upside risks”. Brainard is typically perceived to be dovish, that the comments came from her left little doubt about the consensus of the entire committee voting bloc. Those remarks saw market pricing shift to expect even more aggressive moves from the Fed over the rest of the year. In fact by yesterday’s close, futures were pricing in an 83% chance of a 50bps move at the next meeting in May, whilst the amount of tightening priced for 2022 as a whole hit its highest yet as well, with 220bps worth of further hikes on top of the 25bps from last month. If realised, that would be the largest amount of Fed tightening in a single calendar year since 1994, when they moved Fed funds up by 250bps, and remember that our economists’ latest forecasts now see the Fed matching that 250bps worth of hikes this year as well. Terminal rates are also repricing higher, with 1y1y OIS rates hitting their highest level this cycle at 3.17%, up from 1.11% at the start of the year. These expectations of a more aggressive Fed led to a major selloff in Treasuries across maturities, with yields on 10yr Treasuries up by +15.2bps to 2.55% by the close, echoing the volatility in yields we saw at the start of last month as Russia’s invasion of Ukraine got underway, and marking the largest daily rise in the 10yr yield since the Covid-induced volatility in March 2020. That also marks the first time the 10yr yield has closed above 2.5% since May 2019, and the move went alongside a large rise in real yields (+9.7bps) as well, which at -0.31% put it at levels not seen since March 2020 as well. Another feature of yesterday was that the big rise in yields at the long end of the curve proved enough to un-invert the 2s10s curve, which ended the day in positive territory for the first time since last Wednesday, at 2.5bps. And this morning those moves have gained added momentum, with the 10yr Treasury up another +7.1bps to 2.62%, and the 10yr real yield up +5.8bps to -0.25%. That selloff in Treasuries was echoed in Europe too yesterday, with yields on 10yr bunds (+10.8bps), OATs (+14.9bps), BTPs (+19.3bps) and gilts (+10.7bps) all seeing similarly big rises. From Europe, one interesting point to note is that the spread of French 10yr yields over bunds widened to 54bps yesterday, which is its widest level in almost 2 years. That came amidst a broader underperformance in French assets yesterday, with the CAC 40 index losing -1.28% as the tightening polls ahead of the first round this Sunday have led to increasing doubt as to whether President Macron will win another term in office. He’s still ahead in the polls for now, but the gap between himself and his main challenger Marine Le Pen has narrowed in Politico’s polling average from a peak of 30%-17% less than a month ago to just 27%-21% now. Furthermore, the second round average is at 54%-46%, which is also significantly tighter than Macron’s 66%-34% victory over Le Pen in 2017. US equities were also affected by the more hawkish rhetoric from Governor Brainard, and the S&P 500 fell -1.26% as investors continued to price in higher interest rates. Cyclical sectors were among the worst performers, and technology stocks lost significant ground with the NASDAQ (-2.26%) and the FANG+ index (-3.28%) both undergoing serious declines. In Europe the situation was somewhat better, although the main indices there closed before the later decline in the US, meaning that the STOXX 600 still advanced +0.19%. As mentioned however, that masked serious regional divergences, with the FTSE 100 advancing +0.72%, whilst the Germany’s DAX (-0.65%) and France’s CAC 40 (-1.28%) both lost ground. Staying on Europe, there were further developments on Russian sanctions yesterday, with the EU proposing a 5th package of measures that would include an import ban on Russian coal, among others. Commission President von der Leyen said that they were working on further sanctions “including on oil imports”, but there wasn’t yet a discussion about banning either oil or gas, with differing opinions among the member states on such a move. That pattern of losses has been seen overnight in Asia as well, where equity markets are trading in negative territory amidst that continued rise in Treasury yields overnight. The Nikkei (-1.89%) is leading losses across the region with the Hang Seng (-1.69%) trading sharply lower as the index reopened after a holiday. Stocks in mainland China are also struggling with the Shanghai Composite (-0.29%) and CSI (-0.52%) both down after their own reopenings following holidays, which also comes as the Caixin services PMI dropped to 42.0, its lowest level since February 2020 and beneath the 49.7 reading expected by the consensus. Looking ahead, equity futures are pointing towards further losses today, with contracts on the S&P 500 (-0.04%) and the DAX (-0.41%) both falling. Data releases took something of a back seat yesterday, but we did get the release of the final services and composite PMIs from around the world, with many European countries having upward revisions relative to the flash readings. For example, the Euro Area composite PMI came in at 54.9 (vs. flash 54.5), whilst the UK composite PMI came in at 60.9 vs. flash 59.7). The US was one of the few exceptions, where the composite PMI was revised down to 57.7 (vs. flash 58.5), and the ISM services index also came in modestly beneath expectations at 58.3 (vs. 58.5 expected), although that did mark a rebound following 3 consecutive months of declines. To the day ahead now, and the release of the FOMC minutes from the March meeting will be one of the main highlights later. Otherwise, central bank speakers include ECB Vice President de Guindos, Chief Economist Lane, and Philadelphia Fed President Harker. Data releases include the UK and German construction PMIs for March, German factory orders for February, and Euro Area PPI for February. Tyler Durden Wed, 04/06/2022 - 08:03.....»»

Category: personnelSource: nytApr 6th, 2022

Stimulus Check From Kentucky: New Proposal Could Give Up to $500 to Taxpayers

Rising inflation and gas prices are making it hard for people to meet all their needs. Several states are working on proposals to help residents offset the impact of inflation. Kentucky is the latest state to join this growing list, and a stimulus check from Kentucky could give residents a one-time tax rebate worth $500. […] Rising inflation and gas prices are making it hard for people to meet all their needs. Several states are working on proposals to help residents offset the impact of inflation. Kentucky is the latest state to join this growing list, and a stimulus check from Kentucky could give residents a one-time tax rebate worth $500. This proposal to give a one-time tax rebate is yet to be approved by lawmakers. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2021 hedge fund letters, conferences and more Stimulus Check From Kentucky: What Is It? Both the chambers in Kentucky have come up with different tax plans. The Senate has proposed a one-time tax rebate, while the House wants to reduce the income tax rate from 5% to 4%. This new tax rate, if approved, would be effective January 1, 2023. Specifically, the Senate approved a $1 billion rebate, while House Bill 8 proposes reducing the income tax rate. The House bill also calls for additional rate reductions to zero if the state hits revenue goals going forward. The Senate’s proposal of a one-time tax rebate of $500, if approved, would go to individual tax filers. Joint filers, on the other hand, would get a $1,000 rebate, unless they paid less than $1,000 in state taxes. In case the taxpayers paid less, they would get a stimulus check from Kentucky of a lower amount. They would get no rebate at all if they paid no taxes. Lawmakers expect a compromise on the proposals from both chambers. “We came to an agreement on that with the house last week,” Sen. Damon Thayer, R-Georgetown said. “The bill is in the process of being printed now and I think we will deal with it either Tuesday or Wednesday.” The Kentucky General Assembly’s 2022 session is scheduled to end Wednesday. Along with the proposal to give a tax rebate to Kentuckians, the lawmakers will also be deciding the fate of many other proposals, including sports betting, medicinal marijuana and charter schools. Other Proposals In The Works At the federal level also, lawmakers are working on proposals to offer relief to Americans from rising gas prices. A group of senators in Washington, DC, have come up with a proposal to give energy relief checks to Americans. Representative Ro Khanna of California and Senator Sheldon Whitehouse of Rhode Island have come up with a bill that would offer a quarterly rebate depending on a tax levied on oil and gas companies. Rep. Peter DeFazio, D-Oregon, has introduced a separate proposal that would offer people a rebate depending on the profit of oil companies. This bill, called the Stop Gas Price Gouging Tax and Rebate Act, would “tax Big Oil's excess profits in 2022 and return the revenue back to Americans," DeFazio said in a statement. Another proposal, called the Gas Rebate Act, would offer a monthly energy rebate of $100 per person. Updated on Mar 30, 2022, 9:34 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkMar 30th, 2022

Okta has stopped cutting pay for workers who move out of the Bay Area. Its head of dynamic work says the new policy is part of a broader approach to employee wellness.

Okta's head of dynamic work said it's a key talent strategy. "If you really want your business to be successful, you need to have the best people." Kazi Awal/InsiderSamantha Fisher is Okta's head of dynamic work.Okta Software company Okta will no longer cut pay for people who move from San Francisco, but their raises may be smaller. The move is part of a broader focus on employee well-being, which is a key component of the People pillar of sustainability.  This article is part of the "Financing a Sustainable Future" series exploring how companies take steps to set and fund sustainable goals. Okta leadership thinks building the best and biggest cloud-software business comes down to hiring the right people — and making their well-being a priority. And as the most skilled and talented people have the option to work pretty much anywhere — in early September, there were more than 1.2 million job openings in the US in computer occupations such as software developer and information security analyst  — Okta is hoping that a unique approach to compensation will help it stand out.Last year, Okta, a $28 billion company that makes security software for other companies, announced that employees would be paid based on their value to the organization, regardless of where they live. Before that, Okta, which employs 4,584 people globally and is headquartered in San Francisco, had cut pay for employees who were moving out of the Bay Area, a practice that tends to breed resentment among employees in the tech industry."It continues to be an attraction for us," said Samantha Fisher, Okta's head of dynamic work, who focuses on adjusting policies around hiring, office design, and employee collaboration. "Particularly as organizations in the tech sector haven't been as explicit as we have about pay equity." Indeed, top tech employers like Google have said they'll cut pay for their remote employees. Then again, Spotify and Reddit have said they'll pay all US employees San Francisco salaries.But the coronavirus pandemic spawned a new class of remote workers, who discovered during lockdowns that they could have a better quality of life outside a metropolis like San Francisco or New York. Maybe they could finally afford a house with a backyard or simply avoid being jostled on their daily commute to the office.Okta is betting that helping these employees realize their professional and personal dreams will help it attract the best talent on the market. Dynamic work is also a way for Okta to support communities outside San Francisco. "Allowing employees to work from anywhere has enabled Okta to hire diverse talent from outside of the markets in which we have offices, which are primarily in markets with higher costs of living," Fisher said.How Okta calculates compensationSome New York-based Okta employees volunteered to clean up a local park.OktaAfter announcing the new compensation policy last year, Fisher said, Okta went back and adjusted the salaries of employees who had taken pay cuts when they moved outside the Bay Area.Now Okta looks at compensation in terms of two tiers. The top tier is the San Francisco Bay Area, where salaries — and the cost of living — tend to be higher than in many other areas. Every other US geographic region falls under the second tier.Employees who live in the Bay Area now and move elsewhere will not take a pay cut, Fisher said, but over time they might see slightly smaller pay increases than their Bay Area-based colleagues. According to Fisher, that's because Okta takes into account an employee's value to the organization — which encompasses things like their subject-matter expertise, their experience, and the caliber of clients they bring in — as well as which tier they live in when calculating compensation. Employees who are hired in markets outside of the Bay Area will receive slightly lower starting salaries than their counterparts in the Bay Area.Okta is investing in employees as a talent strategyFisher said Okta hasn't directly measured or quantified the impact of the new pay policy on its business. But she said taking care of the people who work for a company directly enables the business to thrive.Okta's 2021 State of Inclusion report also spotlights pay parity as a core element of its diversity and inclusion strategy. "Okta provides a consistent and positive experience for all employees, regardless of location, and this also includes pay parity," the report reads. "We want to attract the best talent from wherever we recruit them." By the end of fiscal year 2022, Okta said, the company aims for 60% of new hires to be remote, meaning they do not live near an Okta office. Eventually, Okta expects 85% of its staff to be remote.Enabling employees to work from home without penalty fits with Okta's sustainability goals as well. Last year, the company published the results of a study that found greenhouse gas emissions are 21% lower per employee in a dynamic work environment than they were before.The way Fisher sees it, supporting employees in their efforts to build their ideal lifestyle is a critical talent strategy — employees want to feel as if their employer is invested in them. "If you really want your organization and your business to be successful," she said, "you need to have the best people." She added that those people need to feel as if their employer cares about not just their work experience but also "the things that are important to them outside of their work life."Fisher, for her part, lives and works in the Chicago area. "I could choose to relocate to San Francisco," she said, "but I chose the standard of living that I chose based on what's going on in my life, which is the whole intent of dynamic work." @media (min-width: 960px) { #piano-inline-content-wrapper .content-header .figure.image-figure-image { min-width: 100%; margin-left: 0; } } Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 28th, 2022

Abcam Plc Results for the 12- and 18-month periods ended 31 December 2021

Growing demand for Abcam's portfolio of in-house products drives calendar 2021 revenues up by 22% at constant exchange rates Acquisition of BioVision completed 26 October 2021 CAMBRIDGE, United Kingdom, March 14, 2022 (GLOBE NEWSWIRE) -- Abcam plc (NASDAQ:ABCM, AIM: ABC)) (‘Abcam', the ‘Group' or the ‘Company'), a global leader in the supply of life science research tools, today announces its final results for the 18-month period ended 31 December 2021 (the ‘period'). The Group's accounting reference date changed from 30 June to 31 December during the year1, therefore these financial statements report on both a 12- and 18-month period. SUMMARY PERFORMANCE £m, unless stated otherwise   12 months ended 31 Dec 2021 (unaudited)(‘CY2021') 12 months ended 31 Dec 2020 (unaudited)(‘CY2020')   18 months ended 31 Dec 2021 (audited) Revenue   315.4 269.3   462.9 Adjusted gross profit margin*, %   72.2% 70.0%   71.8% Reported operating profit   7.1 1.0   24.4 Adjusted operating profit**   60.4 50.6   95.5 Adjusted operating margin, %   19.2% 18.8%   20.6% Share-based payments related to pre-CY2021 schemes   (12.9) (13.3)   (22.0) Like-for-like adjusted operating profit (post share-based payments related to pre-CY2021 schemes)***   47.5 37.3   73.5 Like-for-like adjusted operating margin***, %   15.1% 13.9%   15.9% Net (Debt) / Cash****   (24.1) 211.9   (24.1) * Excludes the amortisation of the fair value of assets relating to the inventory acquired in connection with the acquisition of BioVision. ** Adjusted figures exclude impairment of intangible assets, systems and process improvement costs, acquisition costs, amortisation of fair value adjustments, integration and reorganisation costs, amortisation of acquisition intangibles, share-based payments and employer tax contributions thereon, the tax effect of adjusting items and credits from patent box claims. Such excluded items are described as ‘adjusting items'. Further information on these items is shown in note 4 to the consolidated financial statements. *** In previous reporting periods, share-based payments have not been included within adjusting items. With the approval of the Profitable Growth Incentive Plan (‘PGIP') during CY2021, management considers it to be more appropriate and more consistent with its closest comparable companies to include all share-based payments in adjusting items. To aid comparison with our previous presentation of results, we have included the adjusted operating margin in the table above on a like-for-like basis, excluding this change (‘Like-for-like'). **** Net Cash comprises cash and cash equivalents less borrowings. CY2021 FINANCIAL HIGHLIGHTS1,2 Revenue growth of +22% (+17% reported) at constant exchange rates, compared to CY2020, including a 1%pt contribution from the acquisition of BioVision +38% total in-house CER revenue growth (including Custom Products & Licensing3 and   £2.6m of incremental revenue from BioVision) (+32% reported) Revenue from in-house products and services contributed 61% of total revenue (including Custom Products & Licensing3 and £2.6m of incremental revenue from BioVision) Adjusted2 gross margin increased by over 200 basis points to 72.2% (CY2020: 70.0%), benefiting from the contribution of higher margin in-house products and volume leverage resulting from the increase in revenue Adjusted2 operating profit of £60.4m (excluding share-based payments), equating to an adjusted operating margin of 19.2% (CY2020: 18.8%) Adjusted2 operating margin on a like-for-like4 basis improved over 300 basis points to 16.5% in H2 '21 (Jul-Dec), from 13.3% in H1 '21 (Jan-Jun) Statutory reported operating profit increased to £7.1m from £1.0m in CY2020 Net cash inflow from operating activities increased to £62.9m (CY2020: £58.9m) BUSINESS HIGHLIGHTS Focus on serving customers' needs globally as research activity levels continued to normalise and demand for Abcam products increased Positive customer transactional Net Promotor Score ('tNPS') of +56 (CY2021) and product satisfaction rates at all-time highs Completed the acquisition of BioVision, Inc (‘BioVision'), a leading innovator of biochemical and cell-based assays, in October 2021, for cash consideration of $340m (on a cash free, debt free basis) High employee engagement, with the business ranked in the Top 5 in the Glassdoor UK Employees' Choice Awards in January 2022, for the second year running Strengthened and expanded leadership in commercial and operational teams with senior hires in Commercial, Brand, China, and Supply Chain Expanded the Group's global presence, with the opening of new and enlarged sites in China, the US (Massachusetts, California, Oregon), Singapore, and Australia Upgraded supply chain systems at three locations, implemented new data architecture, and began transition to a new e-commerce platform, with completion of the digital transformation due in 2022 Completed the secondary US listing on Nasdaq's Global Market in October 2020 (supplementing existing listing on AIM on the London Stock Exchange) Expanded Asia, digital, and life science industry experience on the Board of Directors, with the appointments of Bessie Lee, Mark Capone and Sally Crawford, as Non-Executive Directors SHARE TRADING, LIQUIDITY AND LISTING Following our listing on Nasdaq in October 2020, the number of Abcam shares traded as ADSs on Nasdaq has doubled. While only 10% of our shares trade in the US market, it represents 25% of liquidity The Board continues to review options to increase share liquidity and intends to consult with shareholders on these options in due course CY2022 GUIDANCE Global lab activity continues to recover, though some uncertainty remains CY2022 trading performance YTD is in line with our expectations Expect total CER5 revenue growth of c.20% (including BioVision) with mid-teens organic CER revenue growth Expect continued adjusted gross margin improvement from the contribution of higher margin in-house products and full year impact of the BioVision acquisition Expect total adjusted operating cost growth (including depreciation and amortisation) at mid-teens percentage, as we slow rate of investment and leverage recent investments LONG TERM GOALS TO CY2024 CY2024 revenue goal target range increased by £25m to £450m-£525m, adjusted to incorporate BioVision6 and current operating performance Adjusted operating margin and ROCE targets remain unchanged Commenting on today's results, Alan Hirzel, Abcam's Chief Executive Officer, said: "I am grateful to everyone at Abcam for their dedicated effort through this most challenging time and thank our customers and partners for their ongoing trust and support. We have had another successful year operationally and financially despite the ongoing challenges. As we look ahead to 2022, we expect to create more innovation and success out of the past two years of investment as we installed elements of Abcam's long term growth strategy. The scientific community remains our guide and with their support we are becoming a more influential and trusted brand globally." Analyst and investor meeting and webcast: Abcam will host a conference call and webcast for analysts and investors today at 13:00 GMT/ 09:00 EDT. For details, and to register, please visit A recording of the webcast will be made available on Abcam's website, Notes: On 2 June 2021, Abcam announced that it had changed its accounting reference date from 30 June to 31 December. Following this extension, these financial statements are for the 18-month period ended 31 December 2021. To assist understanding of the company's underlying performance, like-for-like financial information for the 12-month periods ended 31 December 2021 (‘CY2021') and 31 December 2020 (‘CY2020') have also been provided. These results include discussion of alternative performance measures which include revenues calculated at Constant Exchange Rates (CER) and adjusted financial measures. CER results are calculated by applying prior period's actual exchange rates to this period's results. Adjusted financial measures are explained in note 2 and reconciled to the most directly comparable measure prepared in accordance with IFRS in note 4 to the interim financial statements. Custom Products & Licensing (CP&L) revenue comprises custom service revenue, revenue from the supply of IVD products and royalty and licence income. In previous reporting periods, share-based payments have not been included within adjusting items. With the approval of the Profitable Growth Incentive Plan (‘PGIP') during CY2021, management considers it to be more appropriate and more consistent with its closest comparable companies to include all share-based payments in adjusting items. To aid comparison with our previous presentation of results, we also calculate adjusted operating margin on a like-for-like basis, excluding this change (‘Like-for-like'). Average CY2021 exchange rates to GBP as follows: USD: 1.378; EUR: 1.159, RMB: 8.891, JPY: 150.7 Last 12-month BioVision recurring revenues of £17.8m at point of acquisition, adjusted for non-recurring COVID-19 related revenues, and sales to Abcam during that period. The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. For further information please contact: Abcam + 44 (0) 1223 696 000 Alan Hirzel, Chief Executive OfficerMichael Baldock, Chief Financial OfficerJames Staveley, Vice President, Investor Relations       Numis – Nominated Advisor & Joint Corporate Broker + 44 (0) 20 7260 1000 Garry Levin / Freddie Barnfield / Duncan Monteith       Morgan Stanley – Joint Corporate Broker + 44 (0) 207 425 8000 Tom Perry / Luka Kezic       FTI Consulting + 44 (0) 20 3727 1000 Ben Atwell / Julia Bradshaw   This announcement shall not constitute an offer to sell or solicitation of an offer to buy any securities. This announcement is not an offer of securities for sale in the United States, and the securities referred to herein may not be offered or sold in the United States absent registration except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended. Any public offering of such securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer, which would contain detailed information about the company and management, as well as financial statements. Forward Looking StatementsThis announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any express or implied statements contained in this announcement that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation statements of targets, plans, objectives or goals for future operations, including those related to Abcam's products, product research, product development, product introductions and sales forecasts; statements containing projections of or targets for revenues, costs, income (or loss), earnings per share, capital expenditures, dividends, capital structure, net financials and other financial measures; statements regarding future economic and financial performance; statements regarding the scheduling and holding of general meetings and AGMs; statements regarding the assumptions underlying or relating to such statements; statements about Abcam's portfolio and ambitions, as well as statements that include the words "expect," "intend," "plan," "believe," "project," "forecast," "estimate," "may," "should," "anticipate" and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: a regional or global health pandemic, including the novel coronavirus ("COVID-19"), which has adversely affected elements of our business, could severely affect our business, including due to impacts on our operations and supply chains; challenges in implementing our strategies for revenue growth in light of competitive challenges; developing new products and enhancing existing products, adapting to significant technological change and responding to the introduction of new products by competitors to remain competitive; failing to successfully identify or integrate acquired businesses or assets into our operations or fully recognize the anticipated benefits of businesses or assets that we acquire; if our customers discontinue or spend less on research, development, production or other scientific endeavours; failing to successfully use, access and maintain information systems and implement new systems to handle our changing needs; cyber security risks and any failure to maintain the confidentiality, integrity and availability of our computer hardware, software and internet applications and related tools and functions; we have identified material weaknesses in our internal control over financial reporting and failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could have a material adverse effect on our business; failing to successfully manage our current and potential future growth; any significant interruptions in our operations; if our products fail to satisfy applicable quality criteria, specifications and performance standards; failing to maintain our brand and reputation; our dependence upon management and highly skilled employees and our ability to attract and retain these highly skilled employees; and the important factors discussed under the caption "Risk Factors" in Abcam's prospectus pursuant to Rule 424(b) filed with the U.S. Securities and Exchange Commission ("SEC") on 22 October 2020, which is on file with the SEC and is available on the SEC website at, as such factors may be updated from time to time in Abcam's other filings with the SEC. Any forward-looking statements contained in this announcement speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Abcam disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.The Group has changed its year end to December 31 and, as a result, this year's results present an 18-month accounting period, which ended on 31 December 2021. The comparison to the previously reported 12 months ended 30 June 2020 presents substantial period-on-period increases due to the longer period of account in the current reporting period and provides little helpful insight into the underlying performance of the business. To provide more useful commentary, both the CEO and CFO reviews largely focus on the financial and operating performance of the business in the 12 months ended 31 December 2021 (‘CY2021') compared to the 12 months ended 31 December 2020 (‘CY2020'). The audited financial statements in the back of this report contain statutory results for the 18 months ended 31 December 2021 and a comparison to the year ended 30 June 2020. CEO Report Moving forward with courage and hope As we continue to grapple with the challenges of our times, I am convinced that for all of us in the science community, the only way to move forward is with courage and hope. Over the last several decades, the positive impact of life science on the human condition has been profound. For example, across every income level and every country where there has not been a catastrophe, life expectancy has increased by nearly 20 years since the 1960s. Life science, medical discovery and innovation have been central to this health and social progress. In the last two decades, since the sequencing of the human genome, research in life sciences has more than doubled, and with it the potential to make even more progress. New discoveries can take 10 years or more to make a tangible difference and I am hopeful that our children will reap greater benefits in health and lifespan in the years to come. As I think about these inspiring achievements, alongside the development of our own business, I am determined to ensure Abcam continues to innovate and play a key role in helping our customers reach their scientific and career goals. We remain resolutely focused on enabling scientists to make breakthroughs faster, with better quality research tools and a passion for collaboration. It won't stop there either. We see a greater role for Abcam to accelerate the transition of discovery to clinical and social impact. I have always believed in the power of collaboration and the global response to the pandemic has shown the benefits of such collaboration. With the challenges ahead we will find ways for researchers, funders, publishers, tools companies, translational researchers, clinicians, diagnostics companies, pharmaceutical companies, and regulators to work together in common purpose as one. Improvements our business has made in product performance and consistency and our expanding network of commercial relationships are significantly reducing the time from first discovery to a better patient outcome. We look to put more effort toward this collaborative approach as we build our business. This collaborative spirit is also championed within our teams. Efforts we have been making to improve inclusion and diversity have amplified more voices through groups led by our people and outreach activities in our communities. Despite everything we faced in 2021, and the disturbing geopolitical aggression in Europe at the start of 2022, we see this period as an exciting time for proteomics research. I remain confident that Abcam is well positioned to influence and improve the journeys from discovery to impact, while sustaining value creation for all stakeholders. Our performance We achieved the major strategic, operational and financial goals we set for the business in the period and continued to make significant operational changes and to implement our growth strategy. Feedback from our customers was excellent, with a customer tNPS of +56 (CY2021). Sales of our in-house products grew strongly as we scaled up our capability here. Because these are sold at a higher margin, we started to feel the benefits of increased operational leverage. The business transition to 2024 is nearly complete and we will soon be able to fully reap the benefits of what we have been building over recent years.   Indeed, the biggest contributor to Abcam's growth and value and the main reason why we are winning more market share is the portfolio of proprietary products developed and manufactured at Abcam. This burgeoning in-house library of recombinant antibodies, immunoassays, conjugation products, proteins, and cell lines is offering customers the right products, to the right pathways, with a promise to go the distance from discovery to clinic. Customer demand for this portfolio drove in-house product revenue to £174m in CY2021 (CY2020: £129m), equivalent to 41% annual CER growth (36% excluding BioVision). Our investment of 14% of revenue (own product) back into R&D (including capitalised product development) is helping us sustain the growth and higher customer satisfaction in these areas. The BioVision acquisition in October 2021 added one of our largest suppliers to the in-house portfolio, with strengths in biochemical and cell-based assay kits. Business integration is moving ahead as planned and we expect it to provide further innovation opportunities within this portfolio. Risks around the global pandemic remain – as evidenced by the emergence of the Omicron variant in late 2021 – but data suggests that overall lab activity increased consistently during 2021 in our largest markets. Progress toward our strategic goals We aim to deliver consistent, durable growth and performance in a responsible way. Despite the continued disruption of COVID-19, we have seen sustained progress during the period as we continue to deliver on the growth strategy announced in November 2019. Strategic KPI performance (in-house product revenue growth and customer transactional net promotor score) was positive, feedback on our products has never been stronger, and we continue to make market share gains worldwide. At the same time, we are focused on ensuring the significant investment made in our innovation capabilities, systems and processes, facilities, and people support our long-term growth aspirations. As we seek to further strengthen our position as the partner of choice for our customers and partners, we have made further progress against each of the following strategic goals to drive sustained organic growth set out in 2019: 1. Sustain and extend antibody and digital leadership 2. Drive continued expansion into complementary market adjacencies 3. Build organisational scalability and sustain value creation Innovation and our impact on scientific progress Our product portfolio enables breakthrough proteomics discovery by our customers and partners. They are working to innovate and discover proteomic mechanisms such as the role of signaling and regulatory proteins in biological pathways – ultimately leading to diagnostics and treatments for diseases such as cancer and immune deficiency disorders. Their success depends on rigorous product performance and reliability, and it's these factors that continue to guide our innovation efforts. Since 2019, we have put more resources into innovating faster in antibodies and immunoassays, and we have complemented these areas with new product categories such as conjugation kits, proteins/cytokines, engineered cell lines, and now a range of BioVision cellular and biochemical assays. In total, new products introduced since 2019 represented approximately 7% of 2021 revenue (CY2021) and our own-product revenues (including Custom Products & Licensing) contributed over 60% of total revenue in the last 12 months. We are confident that our customer data insights and our approach to innovation and marketing underly this strong growth driver from internal innovation. In CY2021, our teams developed and launched over 2,500 high-quality antibody products, including recombinant RabMAb antibodies, antibody pairs, SimpleStep ELISA kits and new formulations that enable faster labelling and assay development. These new product introductions combined to meet two objectives for our new product development: fill unmet needs in research and increase product quality. As we have developed our high throughput innovation capability, we have also made bolder moves to delist third party supplied product that doesn't meet our customer quality needs. Together, these actions have substantially improved Abcam's quality and our overall brand preference. According to the most recently available industry data, these innovations and other initiatives have led Abcam to become the most cited antibody company. Abcam products were cited more than 70,000 times in scientific journals in 2020 and the business now has a citation share of over 22%, up approximately two percentage points on the previous year (source: CiteAb, based on over 300,000 recorded citations for 2020 as of February 2022). Most importantly, we have seen a continued strengthening of customer feedback during the period, with product satisfaction rates at all-time highs (rolling 12-month period to 31 December 2021). Extending Abcam's leadership in research antibodies has provided a strong foundation to expand into adjacent product categories used in protein research. We took our first adjacent product category move in 2014 with the introduction of proprietary immunoassays. In total these (non-primary antibody) product categories now contribute over 30% of total revenue. In CY2021, total CER revenue growth from these categories was 32% demonstrating the progress made developing these capabilities and the growing customer interest in these high-quality product portfolios. Other, newer product categories have had less time to develop than either our antibody or immunoassay portfolio, but we are seeing similar growth performance and opportunities here. Extending the impact of our innovation through partnership and collaboration Across the translational research, drug discovery and clinical markets, we are focused on strengthening our position as a leading discovery partner to organisations looking to access high quality antibodies and antibody expertise for commercial use within their products and assays – a philosophy we refer to as ‘Abcam Inside'. The period has seen good progress in this regard, with continued growth in the adoption of our products for use on third party instrumentation platforms, or by partners for their use in the development of clinical products. We established several new platform partnerships during the period while significantly expanding existing co-development programmes with current partners, including recently announced strategic partnerships with Alamar and Nautilus Biotechnology. We also grew our specialty antibody portfolio – signing 85 new outbound commercial agreements in CY2021 with organisations that have the potential to lead to new diagnostic or therapeutic tools in years to come. To date, approximately 1,000 of our antibodies are now validated for commercial use on third party platforms or as diagnostic tools, with over 3,000 more currently undergoing evaluation by our partners. We believe both areas remain significant long-term opportunities for the Group. Building a scalable enterprise Over the last two years our teams have been putting ideas, know-how, and capital to work installing new capabilities as we build scalability into our operational infrastructure, including our manufacturing and logistics footprint and IT backbone and digital capabilities to support our growth. At the same time, global supply chains have faced significant challenges primarily as a result of the COVID-19 pandemic. These additional pressures have been resolved by additional investment in manufacturing equipment and processes, while also introducing additional shift patterns in order to achieve better use of our resources. Further progress is expected as we pursue changes to our processes, including quality control, kit development and logistics as well as benefits expected from our integrated business planning process. We also completed several important global footprint initiatives in the period, with site moves or upgrades completed in Boston, Fremont, and Eugene in the USA; Hangzhou and Shanghai in China; Adelaide in Australia; Amsterdam in the Netherlands as well as relocating our Hong Kong operations to Singapore. These initiatives enable more efficient customer service, manufacturing, supply chain and logistics processes; create additional capacity needed to meet our growth objectives; and reduce risks that were identified in our ongoing risk management process. Across our IT and digital infrastructure, roll-out of the final stages of our ERP renewal programme continued, covering manufacturing and supply chain. Systems have now been successfully deployed across the Group's major manufacturing hubs, with final deployments in other small sites due for completion in 2022. At the same time, development of the next generation of our customer-facing digital platform has continued. The new platform is being designed to enable a step change to the customer experience, supporting dynamic content, a more personalised experience and driving enhanced search and traffic. Beta-testing in select markets was launched during the year and we remain on track to launch the new site in 2022. Sustaining social and financial value creation Our impact flows from our vision and purpose, which ultimately lead to a positive impact on the world: helping the scientific community accelerate breakthroughs in human healthcare. The more successful we can be as a business, therefore, the greater the difference we can make in the world. Our vision to be the most influential life sciences company comes with a commitment to the highest ethical standards, not just in our own conduct, but across our value chain. We have made further progress against each of our four priority areas (those seen as most important to sustaining value creation, namely: Products; People; Partners; and Planet) and were pleased to be ranked first by Sustainalytics, a leading ESG ratings agency, across its universe of more than 1,000 healthcare companies globally. Full details of our commitments, performance and progress will be provided in our 2021 Impact Report to be published in April and made available on our corporate website ( Of course, the ability of Abcam and our industry to continue to thrive will depend on future generations of scientists and so it's exciting to see that more young people than ever are taking STEM subjects. I am proud of Abcam's support in this area through our work with In2Science UK and The Henrietta Lacks Foundation. We have also made significant progress on our diversity and inclusion during the period. A new D&I strategy was launched alongside the establishment of multiple Employee Resource Groups, an enhanced family leave policy, and the introduction of diversity and inclusion targets that are tied to senior management compensation. These and other initiatives ensure that we are building an exceptional workplace for our teams, and it was pleasing to once again be recognised by Glassdoor as one of the top 5 employers in the UK in 2021. Attractive outlook We remain on track to achieve the five-year plan that we set out in 2019. In 2022, we will complete a few large-scale tasks to help us scale the business over the next decade. Once those are complete, the agenda for the year will largely focus on refining what we have installed, learning from the market, and making adjustments to drive double digit revenue growth and improve profit margins. With the addition of BioVision and adjustments for ongoing revenue, plus our confidence in the performance of the business, we have raised our revenue target for 2024 to a range of £450m-£525m, representing growth rates that are two to three times our underlying market and reflect the durable growth of Abcam. None of this attractive outlook could happen without great energy and effort by everyone involved. I thank our colleagues for their unwavering dedication, our customers for the trust they place in us, and our board of directors and our shareholders for their continued support. Alan HirzelCEO CFO Report The Group has changed its year end to 31 December. As a result, this year's results will present an 18-month accounting period, which ended on 31 December 2021. As a result, the comparison to the previously reported 12 months ended 30 June 2020 presents substantial period-on-period increases due to the longer period of account in the current reporting period and provides little helpful insight into the performance of the business during 2021. In order to provide a more useful comparison, this review largely focuses on the comparison of the 12 months ended 31 December 2021 (‘CY2021') to the 12 months ended 31 December 2020 (‘CY2020'). The audited financial statements in the back of this report contains the statutory results for the 18 months ended 31 December 2021 and a comparison to the year ended 30 June 2020. In preparing the CY2020 and CY2021 balances, the Group has applied consistently its accounting policies as disclosed within note 1. Although CY2020 and CY2021 are not audited financial periods within these financial statements, the balances have been extracted from the Group's underlying accounting records and reconciled in line with previously disclosed statements. For further information on the composition of CY2020 and CY2021, refer to the ‘Basis of preparation' section in the back of this report. The CFO's Report and Financial Review includes discussion of alternative performance measures which are defined further in the Notes to the Preliminary Financial Information. These measures include adjusted financial measures, which are explained in note 1b and reconciled to the most directly comparable measure prepared in accordance with IFRS in note 4. Further detail on the Group's financial performance is set out in the Preliminary Financial Information and notes thereto. Constant exchange rates ("CER") growth is calculated by applying the applicable prior period average exchange rate to the Group's actual performance in the respective period. Continued strong performance The Group reported revenue for CY2021 of £315.4m (CY2020: £269.3m), a CER growth rate of 22%. This figure includes a contribution of approximately one percentage point, or £2.6m, from BioVision following the acquisition's completion on 27 October 2021. Growth in revenue from our own, in-house (catalogue) products was 41% (CER) for CY2021, including a four-percentage point contribution from BioVision. While laboratories continued to relax COVID-19 related restrictions during the period, and data indicates overall lab activity levels increased through 2021, activity had not fully returned to pre-COVID levels by the end of the period due to the emergence of the Omicron variant in late 2021. Adjusted operating profit (before all share-based payment costs) for CY2021 was up 19%, to £60.4m (CY2020: £50.6m). This equates to an adjusted operating profit margin (excluding share-based payments) of 19.2% (CY2020: 18.8%). After share-based payment charges related to share incentive schemes in force prior to the start of the year, of £12.9m, like-for-like adjusted operating profit was £47.5m, equivalent to an adjusted operating profit margin of 15.1% (CY2020: 13.9%). Total revenue and adjusted operating profit for the 18 months ended 31 December 2021 was £462.9m and £95.5m respectively. The Group's statutory results for the 18 months ended 31 December 2021 are covered in more detail in our audited financial statements contained herein. Investing in future growth Despite the disruption inflicted on our customers and industry by COVID-19, the long-term opportunities for growth across our markets continue to strengthen and, consistent with the strategic plans we set out in November 2019, we have further invested in our business through the period to capture these opportunities. Our global team increased to approximately 1,750 colleagues by the end of 2021 (31 December 2020: 1,600) and, overall, total adjusted operating costs in CY2021 rose 21% to £167.3m. We also committed a further £47m in capital expenditure (net of landlord contributions) during CY2021 to growth and scaling opportunities across the business, including capitalised product innovation, global footprint enhancements – including the opening of our flagship US site in Waltham, Massachusetts – and the implementation of the final stages of our ERP implementation. Underpinning our invest-to-grow strategy is our robust balance sheet and financial position. Net cash generation from operating activities increased to £62.9m in CY2021 (CY2020: £58.9m) and we ended the period with a small net debt position of £24.1m. Operational leverage and increased profitability As expected, over the last two years the Group's profit margins have been suppressed by the effects of both COVID-19 and the implementation of the Group's five-year growth plan. Many of our major investment plans are now substantially complete, and as we look forward, we expect to see the rate of investment reduce and the resultant delivery of operational leverage as the value of our investments are realised. We are pleased with the progress made over the most recent six-month period, where our adjusted operating margin (excluding share-based payments) was 20.3% as compared to 17.8% for the first six months of CY2021 (or 16.5% in H2 compared to 13.3% in H1 on a ‘like-for-like' basis, including share-based payments relating to pre-2021 share plans). As we look forward, we expect this operating leverage to continue to levels consistent with those levels laid out in our five-year growth plan, with a goal to reach over 30% in CY2024. Acquisition of BioVision In July 2021, we announced the signing of an agreement to acquire BioVision for $340m on a cash-free, debt-free basis. The purchase closed in October 2021, and we are now working on the integration, building on our combined expertise, and enhancing our presence in cell based and metabolic assays. To support the financing of the acquisition, we drew down approximately £120m on our revolving credit facility in October 2021. US Nasdaq listing The Group successfully added a secondary US listing on Nasdaq in October 2020, supplementing its existing admission to trading on the London Stock Exchange's AIM market whilst raising approximately £127m ($180m). The listing supports the Group's plans to enhance liquidity in our shares, attract a greater number of US-based life science and growth investors and provide the Group with an acquisition currency in the US market. We were pleased with the demand for the offering from long-term, life science investors. Interest has grown since, with the number of American Depository Receipts (ADRs) in issue doubling. The board continues to review options to increase share liquidity and to ensure investor demand is met, and intends to consult with shareholders on these options in due course. Outlook, 2022 guidance and long-term goals to 2024 We have made good progress in many areas during the year and our top line performance has seen good momentum coming out of the pandemic. Whilst short-term returns on our core business have inevitably been reduced by COVID-19 and our investments, I am confident in a continuation of the trajectory we have seen over the last six months, and the potential return our organic and inorganic investments will generate over the medium- and long-term. CY2022 Guidance Global lab activity continues to recover, though some uncertainty remains, with trading performance in the first two months of CY2022 in line with our expectations. For CY2022 overall, we currently estimate total reported revenue to increase by approximately 20% on a constant exchange rate basis, including the impact from the acquisition of BioVision, with organic CER growth of mid-teens. We expect continued adjusted gross margin improvement through CY2022, due to the contribution of higher margin in-house products and the full year effect of BioVision transaction. Total adjusted operating costs (including depreciation and amortisation) are expected to grow at a mid-teens percentage rate, as we slow the rate of investment and leverage our recent investments. Long-term goals to CY2024The Group expects to deliver improving operating leverage as the pace of investment graduates. We are increasing our 2024 revenue goal by £25m to £450m-£525m, adjusting to incorporate BioVision and our current operating performance. Our adjusted operating margin and ROCE targets remain unchanged. This commentary represents management's current estimates and is subject to change. See the Cautionary statement regarding forward-looking statements on page 3 of this release. Summary Performance   Reported Results   Adjusted Results   18 months ended 31 Dec 2021 (audited)£m 12 months ended 30 June 2020 (audited, restated) £m 12 months ended 31Dec 2021(unaudited)£m 12 months ended 31Dec 2020 (unaudited)£m   18 months ended 31 Dec 2021 (audited)£m 12 months ended 30 June 2020 (audited, restated) £m 12 months ended 31Dec 2021 (unaudited)£m 12 months ended 31Dec 2020 (unaudited) £m Revenue 462.9 260.0 315.4 269.3   462.9 260.0 315.4 269.3                     Gross profit 329.2 180.2 224.6 188.5   332.3 180.2 227.7 188.5 Gross profit margin (%) 71.1% 69.3% 71.2% 70.0%   71.8% 69.3% 72.2% 70.0%                     Operating profit 24.4 10.4 7.1 1.0   95.5 54.0 60.4 50.6 Operating profit margin (%) 5.3% 4.0% 2.3% 0.4%   20.6% 20.8% 19.2% 18.8%                     Earnings per share                   Basic earnings / (loss) per share 7.7p 6.0p 1.9p (0.4)p   33.2p 20.5p 20.8p 18.0p Diluted earnings / (loss) per share 7.6p 6.0p 1.9p (0.4)p   32.9p 20.3p 20.6p 17.8p                     Net (debt)/cash at end of the year1 (24.1) 80.9 (24.1) 211.9   (24.1) 80.9 (24.1) 211.9 Return on Capital Employed 3.1% 1.6% 0.9% 0.1%   12.0% 8.3% 7.6% 6.6% 1. Excludes lease liabilities Calendar Year Results The Group has prepared the following Calendar Year results to enable a more consistent like-for-like review of the trading performance of the business. The Calendar Year results are an Alternative Performance Measure and cover the trading period for the 12 months ended 31 December 2021 (CY2021) compared with the 12 months ended 31 December 2020 (CY2020). The basis of preparation applied to the Calendar Year results together with a reconciliation to the Group's Statutory IFRS Results are provided at the end of this report. Consolidated statement of profit and loss for the 12 months ended 31 December   CY2021(unaudited)   CY2020(unaudited) £m Adjusted Adjusting items Reported   Adjusted Adjusting items Reported Revenue 315.4 - 315.4   269.3 - 269.3 Cost of sales (87.7) (3.1) (90.8)   (80.8) - (80.8) Gross profit 227.7 (3.1) 224.6   188.5 - 188.5 Selling, general and administrative expenses (150.6) (39.1) (189.7)   (120.6) (23.9) (144.5) Research and development expenses (16.7) (11.1) (27.8)   (17.3) (25.7) (43.0) Operating profit 60.4 (53.3) 7.1   50.6 (49.6) 1.0 Finance income 0.3 - 0.3   0.4 - 0.4 Finance costs (2.7) - (2.7)   (3.6) - (3.6) Profit / (loss) before tax 58.0 (53.3) 4.7   47.4 (49.6) (2.2) Tax credit / (charge) (10.8) 10.5 (0.3)   (8.8) 10.1 1.3 Profit / (loss) for the financial period 47.2 (42.8) 4.4   38.6 (39.5) (0.9) Consolidated cashflow statement for the 12 months ended 31 December £m CY2021(unaudited) CY2020(unaudited) Operating cash flows before working capital 68.2 63.0 Change in working capital 4.0 (7.8) Cash generated from operations 72.2 55.2 Income taxes paid (9.3) 3.7 Net cash inflow from operating activities 62.9 58.9 Net cash inflow / (outflow) from investing activities (291.5) (153.7) Net cash inflow from financing activities 111.4 116.0 Net (decrease) / increase in cash and cash equivalents (117.2) 21.2 Cash and cash equivalents at beginning of period 211.9 189.9 Effect of foreign exchange rates 0.4 0.8 Cash and cash equivalents at end of the period 95.1 211.9       Free Cash Flow * 6.0 5.6 * Free Cash Flow comprises net cash generated from operating activities less net capital expenditure, cash flows relating to committed capital expenditure and outflows in respect of lease obligations Financial review Revenue   18 months ended 31 Dec 2021 (audited)£m 12 months ended 30 Jun 2020 (audited) £m   12 months ended 31 Dec 2021 (unaudited)£m 12 months ended 31 Dec 2020 (unaudited)£m 12 month % Change CER CY2021 % Split** Catalogue revenue by region               The Americas 163.7 96.8   112.4 95.3 26% 38% EMEA 121.5 68.4   82.3 73.2 15% 28% China 84.4 39.1   57.1 42.7 34% 19% Japan 28.4 18.8   18.6 19.3 5% 6% Rest of Asia Pacific 34.8 20.0   23.4 21.0 17% 8% Catalogue revenue sub-total* 432.8 243.1   293.8 251.5 22% 100% In-house catalogue revenue* 245.0 114.4   171.5 128.8 39% 58% Third party catalogue revenue 187.8 128.7   122.3 122.7 4% 42%                 Custom products and services 8.4 6.3   5.7 5.7 6% 30% IVD 8.9 4.7   6.3 5.9 15% 33% Royalties and licenses 10.2 5.9   7.0 6.2 20% 37% Custom Products & Licensing (CP&L) sub-total 27.5 16.9   19.0 17.8 14% 100%                 BioVision 2.6 -   2.6 -     Total reported revenue 462.9 260.0   315.4 269.3 22%   * Includes BioVision product sales sold through Abcam channels post closing of the transaction on 26 October 2021 but excludes incremental BioVision sales sold through non-Abcam channels of £2.6m. ** Numbers may not add up due to rounding In the 18-month statutory reporting period ended 31 December 2021, the Group generated revenue of £462.9m, which represents an increase of 78% on the results for the 12 months ended 30 June 2020, reflecting the extended accounting period. The Directors believe underlying business performance is better understood by comparing the performance for the 12 months ended 31 December 2021 (CY2021) and the 12 months ended 31 December 2020 (CY2020). In CY2021 revenue was £315.4m, representing CER growth of 22% and reported growth of 17%, after a 5%pt headwind from foreign currency exchange. The acquisition of BioVision added approximately 1%pt to revenue growth. Revenue growth continues to be driven by a recovery in laboratory activity from the depressed levels experienced in 2020 due to the COVID-19 pandemic, and by increasing demand for our growing portfolio of in-house products. Catalogue revenue grew 23% CER in CY2021 compared with CY2020 (18% reported), with revenue growth from our in-house products of 41% CER including BioVision (35% reported) or 36% CER excluding BioVision. Except for Japan, which suffered greater COVID-19 related disruption, all major territories grew at double digit rates, with China, which now accounts for 19.4% of revenue, the fastest growing region with CER growth of 34%. Custom Products & Licensing (‘CP&L') revenue, rose 14% on a CER basis (7% reported). Within CP&L, IVD and royalty and license sales grew double digit on a CER basis as the number of out-licensed products and commercial deals continues to grow, whilst custom projects returned to growth as customer activity levels improved following a more muted period of activity due to COVID-19. Gross margin   18 months ended 31 Dec 2021 (audited)% 12 months ended 30 Jun 2020 (audited)%   12 months ended 31 Dec 2021 (unaudited)% 12 months ended 31 Dec 2020 (unaudited)% Reported Gross Margin 71.1 69.3   71.2 70.0 Amortisation of fair value adjustments 0.7 -   1.0 - Adjusted Gross Margin 71.8 69.3   72.2 70.0 Reported gross margin for the 18 months ended 31 December 2021 was 71.1%. Reported gross margin for the period was impacted by the fair value adjustment of BioVision inventory following the acquisition, totaling £6.0m. Approximately half, or £3.1m, of this cost was amortised in the period, with the balance of £2.9m to be amortised in CY2022. Before this impact, adjusted gross margin for CY2021 increased by just over 2 percentage points to 72.2% (CY2020: 70.0%), reflecting a favourable movement in product mix towards high margin in-house products, as well as volume leverage resulting from the increase in revenue. In-house product sales (including CP&L revenue) contributed 61% of total revenue in CY2021 (CY2020: 54%). Operating profit Operating profit for CY2021 increased to £7.1m (CY2020: £1.0m). Adjusted operating profit for the same 12-month period increased to £60.4m (CY2020: £50.6m), representing an adjusted operating profit margin of 19.2% (CY2020: 18.8%) reflecting the Group's planned investment, the impact of COVID-19, and the step up in depreciation and amortisation. The calculation of adjusted operating profit has been updated to exclude share-based payments of £20.0m and £13.3m in CY2021 and CY2020 respectively. A reconciliation between reported and adjusted operating profit is provided in note 4 to the financial statements. Reported operating profit for the 18 months ended 31 December 2021 was £24.4m (12 months to 30 June 2020: £10.4m). Operating costs and expenses   Reported   Adjusted*   18 months ended 31 Dec 2021 (audited)£m 12 months ended 30 June 2020 (audited, restated) £m 12 months ended 31 Dec 2021 (unaudited) £m 12 months ended 31 Dec 2020 (unaudited)£m   18 months ended 31 Dec 2021 (audited)£m 12 months ended 30 June 2020 (audited, restated)£m 12 months ended 31 Dec 2021 (unaudited)£m 12 months ended 31 Dec 2020 (unaudited)£m Selling, general & administrative (263.3) (131.5) (189.7) (144.5)   (211.5) (111.5) (150.6) (120.6) Research and development (41.5) (38.3) (27.8) (43.0)   (25.3) (14.7) (16.7) (17.3) Total operating costs and expenses (304.8) (169.8) (217.5) (187.5)   (236.8).....»»

Category: earningsSource: benzingaMar 14th, 2022

Yale history professor Timothy Snyder told Insider he fears American democracy may not survive another Trump campaign

Author and historian Timothy Snyder thinks the 2024 campaign could end with the loser claiming power — and that could break up the United States. Timothy Snyder, Professor of History at Yale University specializing in the history of Central and Eastern Europe and the Holocaust, speaks at Oslo Freedom Forum 2019 on May 27, 2019 in Oslo, Norway.Julia Reinhart/Getty Images Timothy Snyder is a history professor at Yale University and an expert on the rise of authoritarianism. Snyder is the author of "The Road to Unfreedom: Russia, Europe, America," among other books. He spoke to Insider about what he sees as grave threats to democracy in the United States. Timothy Snyder does not want to be a downer, he says, but he is not feeling too optimistic about America these days. A history professor at Yale University, and the author of a series of books on authoritarianism and the road to tyranny, he looks at the United States these days and wonders if the country as we know it will still exist in a few years.In a recent article — marking one year since a former president, who lost an election, sought to thwart the peaceful transfer of power — Snyder painted a grim scenario where something like the January 6 insurrection had succeeded. How would the country, and the rest of the world, react to the installation of a leader who clearly did not win?In an interview with Insider, Snyder discussed Donald Trump, democracy, and what he fears could happen come 2024.It's been a year now since the January 6th insurrection. What do you think the state of American democracy is? Are we on firmer ground now, a year out?Well, I mean, obviously things could be worse. The January 6th insurrection a year ago could have succeeded. We could be living in a country that is wracked by civil and indeed violent conflict after Donald Trump succeeds in, at least temporarily, staying in power, thanks to some kind of conspiracy of his supporters, the Department of Justice, supporters in Congress and so on, right? So things could be worse. And I wouldn't wanna deny that.Unfortunately, that scenario is not one that is just in the rearview mirror. It's also one that is right in front of us. The problem with a failed coup, which is what January 6th, 2021, is, is that it is practice for a successful coup. So what we're looking at now is a kind of slow-motion practice for a repetition of all of that, but this time with the legal parts of it more fully prepared. What I'm afraid of is that now, in the shadow of a big lie — namely, that Trump actually won — the states are preparing the legal steps that will enable Trump to be installed as president the next time around. And that in turn will lead to a terrible sort of conflict, the kind that we haven't seen before. Some people look at January 6th and they see that — as bad as it was — it did not succeed, obviously. And, in fact, the leading players were kind of bumbling, right? I think that some have dismissed January 6th as a foolish stunt that got out of hand, but that never stood a chance of succeeding. I guess maybe you could both agree with that, but also think that's something that could be a lesson for them going forward.Let me try a comparison. If you think that democracy just succeeded on January 6th, sort of on its own strength, then you're missing the backdrop. In the course of the year 2020 there were a lot of important individuals and institutions, ranging from civil society to business, who were aware that there was some possibility that Trump would go for it, even if he lost, and were making preparations for that all year long. Without those preparations, it's very likely that Trump would have succeeded, or at least he would've come close enough to succeeding that we would be in terrible, bloody chaos for a very long time. It's like you're imagining an athlete winning a gold medal in the Olympics and thinking, 'Okay, that guy never actually practiced. He just showed up that day, in Tokyo, and won the medal'. The reason why democracy succeeded in 2021 is that a lot of people put in a lot of hard work ahead of time. And if it's going to keep succeeding, a lot of people are going to have to keep doing a lot of hard work. That attitude, that things just kind of happened because they happened — if we have that attitude, we're not going to put in the work and we're going to have this problem a second time around. The second thing to say about that is that, sure, sometimes coups fail, and when they fail the people who carry them out look foolish. But we're kind of in a strange spot in the US. Normally when you try a coup and you fail, you face some kind of consequence, right? In an authoritarian regime, your political life is terminated in some unpleasant way. In a democratic regime with a rule of law, you face legal consequences. We in the US are in this weird middle state, where you can try to carry out a coup, and pretty obviously break the law in all kinds of ways, and nevertheless, you can kind of just hang out and remain in politics. We're in a very awkward place, a strange place, where this sort of thing can repeat itself,Are you encouraged at all by the work of the January 6 committee and also the charges that the Department of Justice unveiled, where they've actually started charging people with seditious conspiracy?I hate to always be negative, and I won't be, but let me just start with a proviso. It's really too bad that, thanks to the archaic institution known as the filibuster, we don't have a bipartisan January 6th committee. We did have majorities in both the house and the Senate for something like that, but nevertheless, it doesn't exist. And that's a shame because democracy depends upon reflection and self-correction, and the January 6th committee is about reflection and self-correction, and so it's too bad that it couldn't have been done in the broadest way possible.That said, the work that it's doing is incredibly important. Democracy depends upon facts. Democracy depends upon knowing what's going on, operating in the shadow of a big lie, as a lot of us are doing — and even those of us who don't believe in the lie have to deal with it all the time — is incompatible with democracy. Myths and personality cults, and massive doses of self-deception, are incompatible with democracy. Figuring out just what happened, step by step, is compatible because it gives us that chance to reflect and to improve and to move on. So the work that the January 6th committee is doing is absolutely indispensable.I was going to ask you about the Democrats' response in January 6th, but actually your response there makes me want ask you about the Republicans' response. Because does the Democrats' response even matter if one of the major political parties is completely behind what you call 'the big lie'? There was a brief moment, after January 6th, where it seemed like the leading members of the Republican Party were going to break from Donald Trump and his claims. But it definitely seems like that's a way to get yourself kicked out of the party these days.To answer your literal question, it does of course matter what the Democrats do. It matters whether they try to figure out the truth. It matters whether they dig in and do the hard work of having to challenge their colleagues in the Senate, in the House, which of course is not that pleasant for the Democrats. That all matters very much because, without a legal and historical sense of the events of January 6th, we're not going to be able to keep going as a democracy. All of that baggage, from the Civil War forward that we don't clean up, just stands in the way of a democratic future. So it does matter what the Democrats are doing.The Republicans are facing a different kind of problem than the Democrats. Their problem is that, if they don't stand up to the big lie, and to the big liar himself, then they are doomed to become an authoritarian party. The logic of the big lie is such that, since you're claiming that the other side cheated you are then going to cheat yourself. You're basically promising your supporters that you're going to cheat. You're telling your supporters that a vote for us is not really a vote to try to win an election, a vote for us is just to kind of get us vaguely close enough that we can then fix the election, thanks to voter suppression and voter subversion and all the things that we're preparing now. So the Republicans face this very different ethical situation, which is that the longer they operate within the shadow of the big lie, the more they're gonna be remembered by posterity as a party that became authoritarian and possibly broke the system.I think, by the way, that a good number of them realized that. I think, by the way, that a good number of them are trying to find some way to get out from under this. And I hope that I hope that more of them find the courage to try to do so.Do you agree with the assessment that this is the worst crisis for democracy since the Civil War?I think we're in the same territory as the Great Depression and the Civil War. And those were moments when the United States was very lucky with its leaders. I mean, it's no coincidence that we tend to remember Lincoln and Roosevelt as the presidents that stand out. I would add the Great Depression to that because I think the Great Depression was also a moment when it could have all gone south. But yes, we're on historically dangerous territory.Obviously, when people refer to the Civil War, I mean, one response to that can be that that's, you know, hysterical, right? We don't appear to be on the verge of a violent conflict between two heavily armed sides. So how do you see that playing out? Where could this lead?First of all, I just want to say that, for the people who actually study the origins of civil wars, not just in the US, but as a class of events, America doesn't look good right now, with its high degree of polarization, with its alternative reality, with the celebration of violence — the example of Kyle Rittenhouse. Those social scientists who actually work on this topic — neutrally — see indicators in the United States, which suggests that we are on the brink of some kind of conflict.You're asking me about my scenario? My scenario is not very complicated. My scenario is that if, as is very possible, we install a president in January 2025 who has lost by a clear margin — let's say 10 million popular votes, and let's say 89 electoral votes — it's not very difficult in that situation for the loser to become the winner, thanks to just a few gimmicks. A few states just have to withhold their electoral votes; the House of Representatives then votes, according to state delegations; the Supreme Court then blesses the whole configuration; and then all of a sudden you have an installed president of the United States.I think by 2025 it's going be very hard for a lot of Americans to accept something so blatantly undemocratic, the more so since people will have known that this kind of plot was in the works for several years. So my scenario is at that point you would then have uncertainty as to who the President of the United States actually was — uncertainty among the population and also uncertainty within the institutions of government, both bureaucracy, the civil administration, but also unfortunately the armed parts of the government: the armed forces, the national guard.So that's the scenario. It's not very complicated. And unfortunately, it's the kind of thing that one has seen in other countries. And it's not really all that implausible.Speaking of other countries, what parallels can you draw, with the caveat that we know history doesn't repeat, exactly? What do you see as analogous to the situation that the United States finds itself in today?There are all kinds of comparisons. History doesn't repeat, but it does instruct. And it also instructs the people who are trying to undermine the rule of law. An easy, contemporary example is Hungary. Hungary is a place where, legalistic step by legalistic step, the spirit and reality of democracy and the rule of law were removed, such that Hungary, although it still has elections, is a country, which you can't really characterize as a functioning democracy. That is the road that we are on. And that is a model, not a historical one, but a contemporary one for a lot of Republicans right now.  Hungary's going to be more and more present — in fact, it's already been present, for example, on Tucker Carlson — as a kind of positive ideal for rule: an authoritarian regime, on the basis of a minority and kind of ritual elections.Going back a few years: Russia. Russia pioneered what's called the 'administrative resource.' That is, you have elections, but the elections are arranged in such a way that you know who's going to win. And you can't really point to exactly where things went wrong because they went wrong at a whole bunch of different levels at the same time. But nevertheless, your guy always wins. We're moving in that direction. We're moving towards the administrative resource.A more distant historical parallel: the failed democracies of the 1920s and 1930s. A similarity there is that, thanks to obstreperousness and complicated parliamentary rules, laws weren't passed and people all over Central and Eastern Europe began to think that parliament, or what we call Congress, is just not very important. It would be better to have a strong leader. Someone who at least reflects our mood. Someone who can get things done. As it becomes difficult for our Congress to pass laws, and as Republicans deliberately, of course, make it difficult for our Congress to pass laws, that kind of sentiment is also building in the US.Where do you trace the beginnings of guess what you would call the Republicans' weakening commitment to democracy? Is it the rise of Donald Trump and his personality call and his unique characteristics? Is he a product of a conservative movement that had been, for years, kind of slowly moving away from the idea of democracy as a value?You have to go way back in US history. There's always been a party which wanted to suppress the votes of all of Black people and call that democracy. For a long time, that was the Democratic Party. They switched, after civil rights in the sixties, and it became the Republican party. But this is kind of the original sin of American democracy — that we've always had a political party which wants to suppress votes and game the system.I think there are three recent developments, though. One is the surgical precision by which we now carry out gerrymandering, which means that the Republican Party, in particular, is playing only to the loudest voices in its own choir and is ever less representative of the general public. The second change is social media, within which I would include also foreign interventions in our social media. Social media is a bit like a gerrymandering of the brain. It allows voters to collect themselves into clusters and not have contact with anyone else. And that radicalizes things.And then the third is, I mean, give credit where credit is due: the personality cult of Donald Trump. The Republicans have not had a figure like this before, who is willing to call them out on their own hypocrisies, basically to expose them nakedly for the worst things that they do, as opposed to the values that some of them still would like to express in politics. They've never had a kind of cult of personality like this, where everything was out in the open. That creates a new kind of popularity. I think it'll be hard for Republicans to rally around, at this point, someone else to carry out a second coup, partly because I think no one has both the combination of a sheer indifference to ethics and the popularity that Mr. Trump has at this moment.It sounds like you're saying if in 2024 the Republican nominee were Ron DeSantis or Tucker Carlson, who seem to have the same political values — Tucker Carlson, as you mentioned, openly admires [Hungary's] Viktor Orbán — that the threat to democracy would be greatly diminished, which seems to reduce the threat to the person of Donald Trump.I wouldn't want to say it's a good situation to have a whole cast of characters who want to come to power under the cover of a big lie, using non-democratic means. That's still not a good situation that we have a DeSantis or a Carlson or a Josh Hawley or possibly a Ted Cruz — that we have a whole list of people who'd be willing to come to power that way. That's not a good situation. But, at the moment, it's Mr. Trump who captures the imagination of a lot of the American electorate. To carry out a coup of this kind, you've gotta get close enough to make it plausible. And you have to have somebody who's absolutely ruthless. And I think he remains, therefore, the best of the worst, or the worst of the worst, depending upon how you want to look at it.I want to ask you about President Biden. Obviously, he's given a couple of speeches recently that have explicitly labeled not just Donald Trump but the Republican Party as a threat to democracy. How do you grade his response to January 6th?It's a tough time right now for Mr. Biden in public opinion. I think he has been put in a very difficult situation — in a way, an historically unprecedented situation. With the exception, we just don't have presidents coming to power at a time when the existence of the republic has been challenged. And unlike Lincoln, Biden, can't begin from the position of some kind of clear victory. That is to say, the people who oppose American democracy are still out there in the field. Mr. Trump is in Florida doing his thing, every day. And there's no clear way to remove them from the picture.So he has to be president, and he has to do the normal things that a president does, which is try to get laws passed. And he has to, simultaneously, embody the values of our democratic Republic. It's a tough combination. Because he'd like to be able, I think, to stand above all of this. And then, after a year, it's become clear that he just can't. I think all of these attitudes have been correct. I just think it's unfortunate — going back to the comparison to FDR, unlike FDR he doesn't have big majorities in his first term. If he had big majorities, a lot of the stuff that we're talking about would be moot. We would have a bipartisan investigation. A lot more laws would've been passed.And above all, we'd already have electoral reform, which is the single most important thing: making it easier for Americans to vote would be good, not only for the whole system, it would also be good for the Republicans because it would force the Republican closer into the role of being a party which has to seek votes, has to care about public opinion, has to represent people, rather than the worst parts of a system. If Biden had a bigger majority, then all that stuff would've already happened. I think he's come to power at a really uninviting time. His first year has been, let's say a lot better than we think — it's been a lot better than the atmospherics would suggest.President Biden's approval rating, some polls suggest, is in the 30s and Democrats look like they're on the verge of losing their majority in the House and their 50-50 control of the Senate. Polls also suggest that a large majority of the public is concerned about the state of democracy. They do not particularly like Donald Trump. Yet they seem ready to return the Republican Party — a party that's committed to Donald Trump and his lies about the 2020 election — to power. How do you reconcile all that?I think there are several things going on there. One, just lots of people, regardless of party commitment, don't see the kind of legalistic threat building up to a second coup attempt or an installation of a president. In early 2020, and this is perfectly understandable, people don't necessarily see that the combination of voter suppression and vote subversion and a candidate who's going to break all the rules in a few years that this — that this combined with Republican victory in both the House and the Senate makes the end of democracy in the US, unfortunately, conceivable. People don't see that because it's a complicated institutional story and people would prefer to vote in 2022 on the stuff they're thinking about in 2022. That's understandable, but it's really unfortunate.The second thing, which is going on here, is that there's a kind of irony in our system, which is that Democrats tend to trust the very institutions that Republicans are corrupting. Republicans are the ones who, if you poll them, are more likely to say somebody's gonna fix the election. Democrats just aren't worried enough about this because they tend to believe the institutions are going to work, that everybody will come together, etcetera. And so I think it's hard in particular for Democrats to think, okay, it's 2022, we have to vote like hell because otherwise we're going to have Trumpland — in a worse version — two years down the line.And then the third thing that's going on is just people are sick of COVID. People are sick of living unusual lives. People are sick of all these restrictions on them, understandably. And people are going to vote their mood. That's just the way democracy is.The things that we're talking about, we should talk about and try to get them across, but there's also just this basic matter that people are unsatisfied with COVID. And Republicans know this and they're trying to keep COVID going as long as possible because they think it favors them. And they're probably right. People want to go back to normal life and until they go back to normal life, it's hard to have a normal election where the kinds of things we're talking about will get to the surface.Let's revisit this scenario where Trump and the Republican Party have claimed victory and have had some legal cloaking of this claim that has installed the loser of the election in power. You talked about competing allegiances among, perhaps, different branches of the military. It would be a very unclear situation of who, legally, different institutions in the United States should be pledging allegiance to. How do you see that playing out a year later? If Trump is in there as a minority, loser-president, seen as illegitimate by 55% of the American public, what's that look like for him and for the rest of the country?I mean, look, god forbid, I don't want all this to happen. And I think there's time to prevent it from happening. But I don't think the scenario that you're talking about is the one that we have to worry about. I think the scenario we have to worry about is that there isn't a US at that point. The kind of conflict that begins January 20, 2025, isn't the kind of conflict that ends with one president being just unpopular, or even seen as illegitimate. It's a kind of conflict that ends with governors seeking some kind of safe haven for their states. It's a kind of conflict that ends with Americans moving from one part of the country to another to be with people with whom they feel safer. It's the kind of conflict that ends with some kind of basic political reconstruction, where the US as we know it doesn't have to exist.That's the thing I think that people have the hardest time getting through their minds. Like the US, as we know it, doesn't have to exist. It's built upon these constitutional foundations, which are very flawed and which are now being intensely abused. If those constitutional foundations lead to something which is broadly unacceptable, we're going to be in unknown territory, which can go to unknown places. But it's very often the thing that you take for granted the most, like the existence of your own country, which is the thing that you should be paying the most attention to.That's a lesson which the Soviets learned in 1991, right? It's 30 years since the Soviet Union came to an end. We can look back at that and say, 'aha, it came to an end because it was a flawed communist system.' And sure, that's true. But we didn't expect it to come to an end, and they didn't expect it to come to an end. The fundamental lesson there is that big, powerful systems that you don't think can come to an end can come to an end if you don't get a hold of the internal problems — what they used to call the internal contradictions. We have some internal contradictions. We say we're a democracy, but we're becoming ever less so in practice. And if we don't get a hold of that, the system as we know it may not continue at all.That's what I'm worried about, sincerely. And I like to think — maybe I'm naive — that if folks on both sides of the aisle, Republicans, Democrats, and others, could imagine themselves into a 2025 where the existence of the country is actually in doubt, if we could think ourselves forward to that, and then think back to where we are now, it might moderate things that we're doing.My basic feeling is that the Republicans are right to think they can game their way to power. But by the time they game their way to power, it's not clear that there will be anything to have power over. And I don't think they've thought their way through to the end of that. And I think they need to, and everyone needs to, so that we can, you know, so that we can operate in such a way where at least our republic is still around a few years from now,To clarify that: you're thinking less that scenario where it's a shooting war between the army and the navy or competing factions in the military, and more like what we've kind of seen with blue states and climate change, for example, under Trump, where they kind of announce we have our own foreign policy, and we're actually going to band together and pursue our own policies. Speak directly to us, not Washington, DC. That's not America.I think some combination of that is what we're talking about. The more you get into details, the more you're going to be wrong, because the details won't be exactly what we think. In that scenario, I think Trump is president of something, but I'm not sure he governs from Washington, DC, and I'm not sure the thing that he runs is called the United States of America.In that scenario, he and the Supreme Court get to get to run something, but I'm not sure it's most of the country at that point. The military, you know, is subordinate to civilian command, which is a proud tradition that we have, but it's not clear who the civilian commander actually is, that's a real problem. And if there are conflicting orders coming down, or if different commanders within our armed forces are giving conflicting orders, then you have a situation where either you're going to have a literal civil war or people are going say, 'Hey, the way to prevent violent conflict is to have some kind of peaceful separation along some kind of lines.' That will suggest itself. The model that I have in mind now is Yugoslavia.It all seems wild and science-fictiony at this point, but if you reason your way through to 2025 with an installed president, and you don't see some scenario like this, you must be thinking, 'Okay, Trump can get installed and nobody will care.' And I just don't think that's plausible. I just don't think the combination of Trump himself — who's wildly unpopular along among a lot of people and who has already effectively announced that his policies next time around will be still more radical — and installation will be accepted by Americans and American institutions. That's a step that I can't make mentally. I don't see how installing Trump won't lead to a major challenge to the existence of the republic.Read the original article on Business Insider.....»»

Category: personnelSource: nytJan 14th, 2022

Bob Iger: Pixar Deal Completed To Show Disney Employees It Was A New Day

Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Walt Disney Co (NYSE:DIS) Chairman and former CEO Bob Iger on CNBC today, Tuesday, December 21st. Following is a link to video on Q3 2021 hedge fund letters, conferences and more Pixar Deal Completed To Show Disney Employees It Was A […] Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Walt Disney Co (NYSE:DIS) Chairman and former CEO Bob Iger on CNBC today, Tuesday, December 21st. Following is a link to video on if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Pixar Deal Completed To Show Disney Employees It Was A New Day, Says Former CEO Bob Iger Part I on CNBC's "Squawk Box" DAVID FABER: Yeah, of course, he did step down as you well know Becky, at the end of let's call it February of 2020 right before the pandemic hit very hard and of course, he had three times that we thought he was going to step down as CEO only to stay on but this time is for real. He's got about 10 days left as you said on a career that’s spanned some 47-plus years at this company starting as he did in sports at ABC at 23 years of age and we did have a chance to sit down for a long period of time last week, late last week in Disneyland and talk about his career, talk about the challenges facing Disney at this point, a lot of other things that you don't typically do in a CNBC interview. But I did ask Iger whether at this moment as he looks towards the future and of course towards his past at Disney whether he's got any anxiety at all. BOB IGER: There's no anxiety about that at all. Sadness because I'm leaving people that I love working with and a company I've loved working for. But no remorse. No second guessing. No anxiety. FABER: You don't regret having left when you did and stepped down as CEO when you did? IGER: No, I think the, look, I didn't, no one knew that the pandemic was going to explode the way it did. I think the timing was unfortunate. But throwing a new CEO into, you know, that, you know, that circumstance, it was difficult. But no, I have no, no regrets about having made that decision. It was time. I didn't want people to say be going around saying, "When the heck is he gonna leave," you know? "Isn't it time?" I'd rather have them say, "Gee, did he have to leave when he's leaving? We would've liked him to stay longer." I'm getting some of that. Part II on CNBC's "Squawk Box" FABER: You know, listen, there are no shortage of challenges for Chapek and there's also been a decent amount sort of reported and written about challenges between Chapek and Iger, you know, as you’d probably expect, Iger did not want to engage too fully on it. I don't know if we have time but I did ask him if there should be any concern amongst Disney shareholders in terms of the relationship between the Bobs but at this point, of course, as you know, it is Mr. Chapek’s show and that's something that Iger agrees with. IGER: It shouldn't be a concern to Disney shareholders at all that, you know, that, that any dynamic between us is, would have an impact on the company long term. I'm leaving. He's in. It's his company. He's going to manage it as he see fit, he sees fit with the board under circumstances that are very different than existed when I was CEO and, and chairman because they're changing, as we've talked, they're changing so rapidly. And, you know, he'll make his own decisions, and, and I, you know, I hope that he's learned good lessons. I believe that he has, in terms of, you know, some of the things that I did along the way, and what worked and what didn't work. And I think the relationship I have with him is not really relevant to, you know, how he, how effective he is running the company. Part III on CNBC's "Squawk on the Street" FABER: But yeah, we did sit down for a long interview that I was very happy to have an opportunity to conduct and a bit different than we typically do here at CNBC talking of course about his long career at Disney not just his time as CEO, obviously we hit on a lot of the key business questions as you might anticipate and we went over a lot of other things as well, you know, including sort of some of the things that he saw in terms of his strengths and weaknesses. And I guess I'll start there because he did sight sort of something he noticed about his own responsiveness that he said was one thing that alerted him maybe it was time to consider stepping down. Take a listen. IGER: I will say that over time, I think I started listening less than maybe with a little less tolerance of other people's opinions maybe because of getting a little bit more overconfident in my own, which is sometimes what happens when you get built up, you know, in some form or another, as you know, something special or great or whatever. I was mindful of that. FABER: Well you were introspective enough to recognize it though. A lot of leaders might not even recognize it. IGER: I think I wrote about that too. I was I became a little bit more dismissive of dissent and other people's opinions than I should have been. And that was that that was an early sign that it was time. It wasn't the reason I left but it was a contributing factor. FABER: That you just weren't, right, you just didn't have the patience any longer or you thought I've heard this all before and— IGER: Yes, a lot of all those things. You've heard all the, every argument before. I don't want to hear it again, even though it may be more valid today than it was then, times change. All the, you know, all the, that's the time, the challenges of a CEO of a large global company today in terms of managing time so you can't, so dissent has to be finite in a sense and depends on where you draw that line and when you, when do you shut dissent down. Maybe I was doing it a little bit too quickly. I felt that. Part IV on CNBC's "Squawk on the Street" FABER: Back to Bob Iger and that interview we conducted late last week. Of course, Mr. Iger spending his last few days as the Chairman of Disney after what's been a 47-year career plus career at that company, 15-plus as its CEO as well in a period, as Jim noted earlier, in which the stock did extraordinarily well. We did have that chance though sort of an unusual opportunity really to talk not just about Disney and its business, but also sort of about some of the broader leadership lessons that Mr. Iger learned and perhaps could impart to others. He did some of that in a book that Jim and I of course have lauded for some time as well, but he and I did spend some time talking about that and culture and things that he would tell other potential CEOs as well. Take a listen. I'm curious as to how you think you went about changing the culture of Disney and what you would say or, you know, how quickly you can do it as a leader and where that culture is today versus then. IGER: Yeah, I think for any CEO of any particularly large company in today's world, the world throws you more and more curveballs, more and more challenges. And they now they come at you constantly and from directions that you could never anticipate, never expect. It gets really tough and I think I think one of the reasons why I think it's right for there to be change at the top sometimes is that can turn a CEO into more of a skeptical or pessimist or just because they get weary of all of those challenges. And I think we had gone through it. I know we had gone through a period of time at Disney prior to my ascending to become CEO where those challenges were numerous. They were omnipresent. There was the Comcast hostile takeover attempt. There was the share, the board member or shareholder revolt. There was the impact of technology on all of our traditional businesses. There was 9/11, there was, we can think about all of these things and I think Disney at the time had become weary of those challenges and with that came a little bit less of a belief in its future. There was a scale issue as well, were we large enough and it was intimidating, you know, faced some of those technology companies. Steve Jobs announcing “Rip. Mix. Burn.” and what was going to be the future of IP. People challenging copyrights, it was left and right and all over the place. And so, what I wanted to do when I came in was to see whether we could not ignore those challenge but put them aside and become optimists again and look to a future that we actually believed was brighter. And one thing that was important to me was embracing technology even though it was causing disruption and potential threats, I wanted to embrace it as a means of creating opportunity for us. FABER: Well you did I mean Jobs showed you the first video iPod, didn’t he? IGER: Right, so we put our television programs on it first which was a tiny, tiny deal but all of a sudden it signaled, wait a minute, maybe we could use technology to gain as opposed to, to lose. And that mentality was something I wanted to infuse in the company which is future's bright, let's view technology as opportunity versus threat and that, and that announcement actually turned out to be a big one and it has led to more serious conversations with Steve about buying Pixar too. FABER: Right, right. IGER: And I think one of the things that I was surprised at is if you if you consider pessimism about the future to be part of the company's culture, I thought it was going to take a long time to change that. It was very fast. FABER: Why do you think it was so fast? And why was that a surprise to you? IGER: Well, I think what it says something about that change in the top matters, you know, I'm not suggesting good or bad. I'm not suggesting oh in comes Bob and out goes Michael but it's, it has its it can freshen things up so to speak. And it’s happening at Disney now as well, you know, there's a change at the top and that could create a whole different outlook for the company going forward. FABER: Do you think it freshens things up, your departure as CEO? IGER: Look, the world is changing dramatically and it's important for a CEO of a company to address all of those changes rapidly. Bob is going to address them probably differently perhaps than I may have. That's neither good nor bad. I think change, I think generally speaking, change is good. Change isn't necessarily bad. FABER: Yeah. What do you see yourself doing, you know, a few days from now when you are no longer a part of this company? IGER: Step away from all of this, this dream when this dream finally ends. You know, I've worked full time, really full time since I was 23 years old and going to be 71. Working in the job that I've the jobs that I've had CEO and Chairman have, you know, were taxing from a time perspective, never in terms of my energy or my enthusiasm. It's time for me to have a blank canvas so to speak to be forced in a way to be a little bit more imaginative with my time. Not fortunate enough to have that luxury. Well, what will I do today? FABER: Do you have any hobbies though? IGER: Yeah, I have some hobbies. I don't golf. I like to sail, you don't sail and golf in the same lifetime. There just isn't enough time for that. But my wife has a full time job. My kids are out of the house— FABER: So you’re going to have to keep busy? IGER: I'll keep busy. I'm doing some selective investing. I'd like the ability to be an advisor to founders of startups because I think I've got some advice to give in that regard even though I haven't run a startup. And I've been sought after by some already. I'll probably do some of that. I plan to write another book, which is a homework assignment right now. I've got to get at that. And I'll do some speaking and I'll see where life takes me. I'm not in any rush. I've been advised by some who have stepped down from high office, including President Obama, do not, he said, “Do not make any decisions. Don't commit to anything for six months.” FABER: Six months? IGER: I’m telling you, don't do that. Yes. FABER: You know, you wrote about Eisner's departure in the book and you said it's hard to know exactly who you are without this attachment and title and role that has defined you for so long. IGER: Yes. When I wrote about tha,t I, I had developed a lot of empathy from Michael. I remember his last day at Disney. It was a Friday, last Friday in September of 2005 when his wife and one of the sons came to Disney and had lunch with him and he drove off the Disney lot after having been CEO for 21 years. And I was, at that point, I couldn't wait because I was ready to have that office and that title and that job and raring to go. And I don't think I thought long and hard at the time what that really meant to him and here I am. Yesterday was my last day on that Disney lot, you know, in this role and it was, it was an emotional experience for me. My son came to the lot, one of my sons, we had lunch together. There I walked around, took some pictures, I was feeling incredibly wistful, incredibly emotional. The ties that I've had to this company that have been so part of my life were ending and I in two weeks from now, I will not have a title and I've had a decent title since I was in my 30s. It’s a long time. But there's no anxiety about that at all. Sadness because I'm leaving people that I loved working with and a company I've loved working for, but no remorse. No second guessing. No anxiety. FABER: You don't regret having left when you did and stepped down as CEO when you did? IGER: No, I think the, look, I didn't, no one knew that the pandemic was going to explode the way it did. I think the timing was unfortunate. But throwing a new CEO into, you know, that, you know, that circumstance, it was difficult. But no, I have no, no regrets about having made that decision. It was time. FABER: It was, why? IGER: Some of the things that I've said which is believing that change at the top was good, although I will say a lot of it was very, very personal. It wasn't about the company. It was about me, you know, wanting to leave with the vitality to explore the world in different way. I thought back about a biography I read a pitcher for the Brooklyn Dodgers and the Los Angeles Dodgers named Sandy Koufax left at the top of his game and I think the biographer, Koufax’s biographer Jane Leavy said that he left walking off the field or on his own volition are, “Great athletes rarely retire on their own instead they limp off the field.” I didn't want to limp off the field. Part V on CNBC's "Squawk on the Street" FABER: Well Carl, shares of Disney actually having a strong open this morning, up some almost 2.5% but for the year, the shares of the company down roughly 17%, one of the key reasons of course continuing concern about the growth of subscribers at Disney+ its key direct-to-consumer offering, and whether in fact the company can continue to add subscribers at a rate at least that investors had come to expect given quite vigorous subscriber growth certainly during the course of 2020 and early part of 2021. As you might expect in a long sit down with Disney's Chairman, he is still Chairman for another 10 days or so, Bob Iger, I did ask him about how he sees the outlook for streaming given its importance to Disney's overall business. IGER: There's guidance out there that the company has provided that I'm neither gonna update or comment too much on but obviously the company has expressed confidence in its ability to achieve the guidance that it has out there. So, I obviously supported that guidance was put out there by Bob when he was CEO and I was Chairman. Again, I think, we can't, we can't just maintain a pat hand because the world isn't staying basically the same. We have to continue to evolve and all that that means not just changing but taking advantage of opportunities aggressively. FABER: But there’s this continued question as strong as Pixar is with its audience, as strong as Star Wars is and Marvel and the incredibly deep loyalty it has, do you need to be broader in order to actually reach those kinds of numbers? IGER: I think there probably need, there probably needs more volume, there probably needs to be more dimensionality meaning more, you know, basically, more programming and more content for more people, different demographics, but Bob's aware of that. He’s addressing those issues. FABER: You seem to have that first mover advantage and gulped up a lot of assets that I'm sure many of the competitors now wish they had actually moved on. Doesn't mean that there weren't plenty of opportunities that perhaps you passed on but is everybody else sort of subscale when you look at the world as it was 16, 17 years ago? IGER: You know, I've never really spent much time thinking about how our competitors are positioned in that regard. I spent most of the time thinking about how we're positioned. So I don't know that others are scaled right or subscaled necessarily, I just think we're well scaled. Part VI on CNBC's "Squawk on the Street" FABER: All day long, we've also been sharing excerpts of interview that I did last week with Bob Iger, the longtime CEO and the current Chairman of Disney. There's a look at the performance of the stock during the period of his CEO-ship so to speak. Remember he stepped down it's it's not that far away from two years ago Bob Chapek is the CEO of the company. Chairmanship will also change as well at the end of this year. Mr. Iger ending a 47-plus year run at the company that began with his working at ABC Sports when he was a young man. When we talked about his tenure of course, as you might expect, deal making was certainly one of the keys and starting with that decision to acquire Pixar. Take a listen. IGER: I'm proud of a lot of the decisions that were made, certainly the acquisitions. I'd say of all of them probably Pixar because it was the first and it put us on a path to achieving what I wanted to achieve which is scale when it came to storytelling. That was probably the best. FABER: And you faced I mean your own board. You were uncertain whether you're going to get it passed. Eisner came back to, to say, “Don't do it.” IGER: He subsequently, we had a long conversation about that years later and he admitted that he was wrong about that. I think there was a lot of emotion at that point for him having left Disney under such strange circumstances with Steve but looking back when he reflected on it with me, he admitted that I did the right thing. FABER: Well, you know, it's funny because I remember interviewing you and Jobs that afternoon after you announced it and I was basically focused on the price. I think, man, you're paying an awfully high multiple and many people may not have understood how incredibly important it was to sort of set a new direction for the company and revitalize animation. IGER: Well, that's exactly what I wanted to do. I, what I wanted to do more than anything is I wanted to send a signal to everybody at Disney that it was a new day, that we were more open minded about expansion in particular about partnerships, that creativity was the most important strategy for the company and Pixar at that point exemplified original storytelling and quality and creativity and in its highest form. And then there was the Steve factor, which I sometimes called the cool factor, which is what Apple was, what Steve represented the fact that Steve would embrace not just Disney but me and the vote of confidence that Steve gave in me, and Steve becoming a member of the board and our largest shareholder and I was all tied up in my desire to not only grow content, but it reposition Disney to our employees, to our shareholders and to our customers. And the price you mentioned it also factored in my desire to revitalize Disney Animation, which we did. You look at “Frozen” and you look at “Moana” and you look at “Zootopia” and you look at “Wreck-It Ralph” and you look at “Tangled,” and the number of Academy Awards and the box office success and all of the IP that that created, generated and what how basically we're going to mine that IP for Disney+, you know, it all was tied really everything that we've done at Disney Animation since then, was tied to the Pixar acquisition. FABER: Do you think it was something unique about you that allowed you to convince all of these founders to part with their “babies?” IGER: In all cases, I developed a trust with them and that I convinced them would serve them well if they sold to us meaning, in Steve's case, he, he owned half of Pixar publicly traded company and converted his ownership of Pixar into all Disney. That by the way, wasn't the motivation behind him doing and it wasn't about growing his personal wealth at all. But more importantly, with Steve, I created a trust in him that the assets of Pixar and its people would be in the right hands. And so I think in terms of your question, what was it about me that convinced them. First of all, it was me meaning it was singular in terms of I didn't do the deal myself. It was singular in terms of the pursuit. One on one in some cases, being as candid as I possibly could be and I think as authentic as I could be in developing a relationship, even if we've developed over a relatively brief period of time and not disappointing him either. FABER: What does that mean? IGER: He was never disappointed. Once we did the deal, in fact, in the months before he died he came to, he and his wife, Laurene, came to our house. And Laurene and Steve and Willow and I sat down at a dinner and he toasted to the deal we had done some years earlier, convinced that it was the right thing to do for Disney and for Pixar. And I remember it was, it was very heartfelt and tears came to our eyes, four of us at the dinner table crying, in part dreading what was potentially in store for him which is the end of his life but in part reflecting on what we had done together and truly appreciating it. So. I think again, it's development of a relationship, different in some ways but similar in others. It was me going to New York spending months trying to figure out getting a meeting with him, sitting with him one on one once and then twice a couple of days later and convincing him that it was the right thing to do for the Marvel shareholders, publicly traded company and the people at Marvel and I think he was intrigued with the notion of, of investing in Disney plus Marvel and it worked out extremely well. FABER: And became a large shareholder. I assume you heard from him frequently as well after he became a Disney shareholder. IGER: I heard from Ike, yeah, I heard from Ike a lot over the years. FABER: Yes, that’s what I heard. IGER: We weren't, we weren't always— FABER: In sync? IGER: Complete agreement on things. But that's neither here nor there. I think it's turned out extremely well for him and certainly for the shareholders of Marvel. It's turned out I think they got Disney shares somewhere in the neighborhood of $28 a share. I know we were up around 200 even if you look at it today in that 150 range, that's a pretty good return on investment and George's case was also singular in many ways. I had breakfast with him at Disney World. Talked to him about the future of Lucasfilm and broached the subject. He was close with Steve Jobs and don't forget Pixar was owned at one point by George. Steve bought it from George. And there was a real connection although Steve had passed when I first sat down with George and George was impressed with how we had managed Pixar and assimilated Pixar into the company. He was very, very concerned about Lucasfilm many respects his baby, his legacy, and there was a trust there too that I think we demonstrated that we could be trusting in terms of how we had already managed the Marvel assets and the Pixar assets and I think he was looking to some extent for either long term wealth preservation or long term wealth creation. FABER: You know, you mentioned in the book, the idea that if Steve had lived, Disney and Apple might have become one. Did you guys ever really talk about Apple buying? IGER: No, Steve and I never did. What we did talk about and he was public about at one point at one of his late Apple product presentations, he stood in front of a street sign with an intersection I think one said liberal arts and one said technology. That's what made his heart sing. I think that's how we put it that intersection. So what we talked about a lot was what happens when great technology meets great creativity. He thought that means that to him was the secret sauce for almost everything. And if you, if you project that into how the world was changing and you think of a world where suddenly the opportunity to use that technology to create new experiences for people in terms of how they access content, the natural thing would have been for Apple to have the great content that Disney creates applied or used on their platform. And I know I'm pretty convinced we would have had that discussion. And you know, that was maybe someone wistful of me when I wrote that, but I just knew of his passion for everything we did and everything Apple did and then his deep, deep belief that nothing would be more powerful than that combination. I think we would have gotten there. Part VII on CNBC's "TechCheck" FABER: Yeah, of course Julia, and something you've been very focused on as well as your coverage of the company, direct-to-consumer certainly being a such an important component overall of their strategy. I know we can both remember back in what was it August of 2015 on that earnings conference call when for the first time Iger addressed potential sub erosion at the giant cash flowing property ESPN. Since then, of course, it's no secret that the linear ecosystem has been in decline, and certainly Iger acknowledges that as well. IGER: I think you're seeing a migration to more digital, direct-to-consumer forms of entertainment distribution. And being in that business at a larger scale, which because I think that will provide more growth for the company than the traditional media platforms would've and just the migration, the erosion of the traditional media platforms and the growth of the new ones. We're playing in that new space much more aggressively than we would have obviously without Disney+, without Hulu as well. I think people are consuming things in much more different ways. App-based entertainment in the home has, is replacing the linear channel consumption in the home. So, when you go back to the question you asked about the future of that business, it's not bright at all. It's, it's actually eroding right before our eyes. FABER: And it continues to erode before our eyes You know, it was a long interview and opportunity to talk to Iger about so many different things, best decisions in which he sort of talked about the decision to buy Pixar and worst decisions as well where YouTube came up. IGER: I remember when YouTube was sold. One of the things I always rued, because when YouTube emerged, it was the, we didn't see that first. I'm the one who put “America's Funniest Videos” on ABC in 1989, which was user-generated content. It's kinda funny, which YouTube really started as. It's evolved tremendously. Why didn't I think of that? FABER: Yeah. Why, yeah. IGER: I don't know, I, I missed that one— FABER: You missed that one. Worth, it's worth about $300 billion now, by the way, based on its revenue if you— IGER: Well, YouTube would've been smart. FABER: It would've been. All right, so that gets me to worst decision. Is there one that comes to mind in terms of just a really bad decision you made over those 16-plus years? IGER: I made some bad decisions. Fortunately, they weren't monumental or they woulda, brought me, me down. So I can't really think of, like, the worst decision. I made some bonehead creative decisions along way, you know, greenlit some things that I probably shouldn't have. I mean— FABER: All right, yeah, but saying yes-- IGER: But that's kinda easy. FABER: To Cop Rock is not exactly the worst decision you're gonna make. IGER: You know, I’m, I'm, there's, that's actually, it's interesting, I try to be honest and candid, both in terms of assessment and myself. I definitely made a bunch of bad decisions. Sometimes people, sometimes product, nothing gigantic. FABER: Nothing gigantic? IGER: No. FABER: And nothing comes to mind at all that you can share? IGER: A buncha little things. FABER: Just little things. IGER: Yeah. FABER: So I guess that's a pretty good tenure then, if it's a buncha little things-- IGER: Well, I lasted a long time, so I guess, I suggest I didn't make any really bad, any big, bad decisions. Updated on Dec 21, 2021, 12:33 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 21st, 2021

Energy Industry Executives, Investors Embracing the Clean Energy Transition

A new survey out today sheds light on how investors and executives view the transition underway to clean energy. Q3 2021 hedge fund letters, conferences and more On behalf of Womble Bond Dickinson Key Findings Include: A large portion of executives and investors (about three-quarters) say their organizations and/or investment portfolios are very or moderately […] A new survey out today sheds light on how investors and executives view the transition underway to clean energy. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more On behalf of Womble Bond Dickinson Key Findings Include: A large portion of executives and investors (about three-quarters) say their organizations and/or investment portfolios are very or moderately prepared to achieve carbon dioxide and methane reduction goals by 2030. Most executives (70%) and investors (78%) view the Biden Administration’s climate policies as favorable to their businesses. However, 49% of respondents believe that the Administration’s goal of decarbonizing the power sector by 2035 will not be met. Eight in 10 respondents are either active in, planning for, or considering hydrogen and biofuel/biomass as future energy sources. Electric vehicle charging, energy efficiency and geothermal also emerged as strong areas of industry focus. While ESG implementation is in its early days, the data suggests it is growing. For instance, 85% of investors say their focus on ESG in investments will increase at least slightly in the next two years. Energy Industry Executives, Investors Embracing the Clean Energy Transition, According to Womble Bond Dickinson Survey Report Most decision-makers believe their organizations, or those they invest in, are prepared to achieve emission-reduction goals December 7, 2021 – In the face of overwhelming and existential challenges, a strong majority of energy industry leaders are willingly embracing work toward decarbonization while they simultaneously adopt a forward-looking and optimistic perspective on the energy transition, according to Womble Bond Dickinson’s 2022 Energy Transition Outlook Survey Report. The Energy Industry Supports the Clean Energy Transition The survey, which was completed by 170 executives and investors across the energy industry, provides insight and inside perspective on the many complex and nuanced issues involved in transitioning the global economy out of its current reliance on fossil fuels. In a sign of the times, most executives (73%) and investors (70%) say that their organizations or those in which they invest are either very prepared or moderately prepared to achieve more than a 50% reduction in carbon emissions by 2030. The data show even stronger values related to reduction of methane emissions by 2030 (77% for executives and 71% investors). “Five years ago, it would have been difficult to believe that three-quarters of energy executives would feel this well-prepared for carbon and methane reductions – and that investors would feel the same way about their portfolio companies,” said Womble Bond Dickinson partner and Energy and Natural Resources (ENR) sector co-lead Jeff Whittle. “The industry is clearly looking long-term and sees its future as having a very different shape from what it is today.” In addition, 77% of industry executives reported that they were already focusing on or considering carbon-neutrality measures and they expressed a relatively equal embrace for pollution-neutrality (79%). Overall, the survey’s findings paint a fascinating snapshot of where the energy transition stands as 2021 draws to a close and suggest that energy leaders do not see an inherent conflict between climate goals and the long-term success of their businesses. Mixed Perspectives on Biden Administration’s Policies and Goals Most executives (70%) and investors (78%) view the Biden Administration’s climate policies as favorable to their businesses and business opportunities. This data indicates that energy industry leaders value federal guidelines and initiatives supportive of definitive strategies for investment in the transition and for the achievement of net zero goals. “The fact that the new administration is prioritizing these efforts is seen as a welcome change in contrast to the hesitancy of the previous administration to embrace climate initiatives,” said Womble Bond Dickinson partner and ENR sector co-lead Lisa Rushton. “Many in the industry likely see the potential for big returns, whether they’re utility companies already betting on solar and wind or upstream players who see potential in hydrogen and other longer-term plays.” Despite a comfort with the administration’s plans, almost half (49%) of those surveyed believe that the Biden Administration’s announced goal of decarbonizing the power sector by 2035 will not be met. One-third (32%) believe that it will and 20% are unsure. Hydrogen, Biomass and Geothermal Becoming Bigger Pieces of the Puzzle In reflecting on their status with regard to various renewable energy sources, respondents are actively operating, investing in, or researching a range of established technologies, with solar (50%) topping the list, followed by geothermal (39%), hydro (37%) and wind (34%). Roughly one-third are active in biofuel/biomass (34%) and hydrogen (31%), but 8 in 10 said they are either active in, planning for, or considering these areas as future energy sources. “The fact that the data did not identify any clear areas of early concentration in newer technologies suggests that the industry is hedging its bets across many fronts,” said Womble Bond Dickinson partner and ENR sector co-lead Belton Zeigler. “At the same time, it is surprising to see the amount of activity in hydrogen – which is relatively new to the party – and geothermal, which has been something of sleeper to date.” The most appealing growth opportunities in the eyes of executives were identified as battery storage (69%), hydrogen (67%), energy efficiency improvements (58%), and electrification (56%). Furthermore, industry executives identified hydrogen (38%) as the technology for which research and development is most important, followed by biofuels/biomass (29%) and geothermal (27%) Carbon capture and sequestration was not seen as a leading technology by respondents as far their own operations. Only about 1 in 5 of those who said they were prepared at some level to reduce more than 50% of their methane and carbon emissions by 2030 said the technology was part of their plans – which is consistent with the expense and complexity of the technology, as well as the number of high-profile projects that have failed in the past. ESG Mindset in Its Early Days, But Growing Leaders in the energy sector, while further along than many other sectors, remain in the early stage of implementation when it comes to environmental, social and governance (ESG) policies. There is intense scrutiny in this sector, more than any other, and a major obstacle in the United States remains the lack of any consistent standards. However, there is clear investor focus on ESG, with 76% of those surveyed saying that it is at least a moderate consideration in evaluating energy investments and 85% saying their focus on ESG in investments will increase at least slightly in the next two years. As noted in the firm’s recent article on ESG, “a lack of ESG strategy will ultimately affect a company’s access to public, and increasingly private, capital.” Regardless of the drivers, ESG has certainly played, and will continue play, a material role in accelerating the world’s transition to green(er) energy. Womble Bond Dickinson’s 2022 Energy Transition Outlook Survey Report was completed by 170 decision-makers in the energy industry, including C-suite executives (32%), investors (29%), business or operations managers (7%) and in-house legal counsel (29%). Respondents represent a broad spectrum of energy industry sub-sectors including oil and gas, power and renewables, and mining and minerals. To read the complete report and methodology, please click here. About Womble Bond Dickinson Womble Bond Dickinson is a transatlantic law firm with more than 1,100 lawyers based in 26 U.K. and U.S. office locations serving clients across every business sector. The firm provides core legal services including: Commercial, Corporate, Employment, Pensions, Dispute Resolution, Litigation, Finance, Banking, Restructuring, Insolvency, I.P., Technology and Data, Private Wealth, Projects, Construction and Infrastructure, Real Estate and Regulatory Law. "Womble Bond Dickinson," the "law firm" or the "firm" refers to the network of member firms of Womble Bond Dickinson (International) Limited, consisting of Womble Bond Dickinson (U.K.) LLP and Womble Bond Dickinson (U.S.) LLP.  Each of Womble Bond Dickinson (U.K.) LLP and Womble Bond Dickinson (U.S.) LLP is a separate legal entity operating as an independent law firm. Womble Bond Dickinson (International) Limited does not practice law.  Please see for further details. Updated on Dec 9, 2021, 4:11 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 9th, 2021