Growth or value stocks
False choice ignores true metrics
Style funds get it wrong
False choice ignores true metrics
Style funds get it wrong
Thursday, February 25, 2016
Wednesday, February 24, 2016
Tuesday, February 23, 2016
The Haiku of Finance for 02/23/16
Phony crowdfunder
"Angel" faking his background
Dumb founders get fooled
"Angel" faking his background
Dumb founders get fooled
Monday, February 22, 2016
Early Political Donors Face Diminishing Primary 2016 Expectations
The early shakeouts of the 2016 US presidential campaign have done more than dash the hopes of some long-shot candidates. The financial backers who committed piles of money to the early efforts of doomed campaigns also face major disappointments. Any expectation that money could transform this election are gone.
The Jeb Bush campaign was one of the largest wastes of money in American political history. The biggest Bush donors got badly burned and they now face candidates who are unlikely to consider their business interests. The current Republican front-runner has spent little on direct media or ground organizations compared to the other serious candidates. One of the cheapest modern GOP campaigns, in both popular votes and party delegates acquired, is possible with celebrity-powered free media that reads the cultural zeitgeist correctly.
The Anglophile Establishment in America has always had a bias in favor of large enterprises. Big sectors employ lots of unionized voters and are easier to protect with trade rules and tax breaks. The remaining Establishment hopes in either major political party lack popular appeal precisely because their longstanding ties to big business are so obvious.
The business community must now face the prospect of a future administration that owes them nothing. A progressive Senator promising unlimited free benefits and a real estate tycoon promising a free border wall will feel no loyalty to Wall Street or subsidized sectors, assuming they get their party nominations. America is on the cusp of a political transformation that may break the rule of an oligarchy unable to fathom its own shortcomings. Money could not buy political cover this time. Political "investors" must recalibrate what it means to earn ROI without political influence, if their fortunes even survive the next recession.
The Jeb Bush campaign was one of the largest wastes of money in American political history. The biggest Bush donors got badly burned and they now face candidates who are unlikely to consider their business interests. The current Republican front-runner has spent little on direct media or ground organizations compared to the other serious candidates. One of the cheapest modern GOP campaigns, in both popular votes and party delegates acquired, is possible with celebrity-powered free media that reads the cultural zeitgeist correctly.
The Anglophile Establishment in America has always had a bias in favor of large enterprises. Big sectors employ lots of unionized voters and are easier to protect with trade rules and tax breaks. The remaining Establishment hopes in either major political party lack popular appeal precisely because their longstanding ties to big business are so obvious.
The business community must now face the prospect of a future administration that owes them nothing. A progressive Senator promising unlimited free benefits and a real estate tycoon promising a free border wall will feel no loyalty to Wall Street or subsidized sectors, assuming they get their party nominations. America is on the cusp of a political transformation that may break the rule of an oligarchy unable to fathom its own shortcomings. Money could not buy political cover this time. Political "investors" must recalibrate what it means to earn ROI without political influence, if their fortunes even survive the next recession.
Sunday, February 21, 2016
The Haiku of Finance for 02/21/16
No post-crash learning
Theses built on fakery
Soon to feel the burn
Theses built on fakery
Soon to feel the burn
Awaiting Some Tumultuous Market Tumble
It has been a long time since the 2008 financial crisis. Everyone who bet on a market recovery since then has been rewarded. Professional money managers think they have the recovery all figured out. Endless monetary and fiscal stimulus in the developed world made even the worst investment theses prosper. The experts have no idea how wrong they are about so much of the economy.
It is impossible to fairly value any publicly traded financial security when interest rates are permanently at zero. It is difficult to invest in fixed income securities when sovereign defaults in Greece, Puerto Rico, and elsewhere invalidate distressed debt investing. It is hard to buy real estate in desirable locations when credit-impaired mortgage borrowers drive up prices after putting no money down. It is ludicrous to endorse some nation's economic potential if its government statisticians falsify important data.
Painful lessons recede from memory when shamans apply fake salves to real wounds. The snake oil feels good for a while if the patient does not catch on to the placebo effect. Witch doctors on Wall Street have run away with investors' money since 2008. The cleverest and luckiest players have already left the game. Suckers remain, awaiting their chance to hold an empty bag while Wall Street's knaves clean them out.
The post-2008 economic recovery is mostly a mirage in Europe and the United States. China's growth miracle has been a mirage for some time. The BRICS were a cute marketing concept as long as investors never figured out that those countries had weak legal climates for investing. Privately funded unicorn startups are deflating, flushing their employees' stock options down the Silicon Valley drain. Investment concepts that looked great when capital had no cost were suitable only for fantasies. The market tumble that will snap people back to reality will be one heck of a tumult.
It is impossible to fairly value any publicly traded financial security when interest rates are permanently at zero. It is difficult to invest in fixed income securities when sovereign defaults in Greece, Puerto Rico, and elsewhere invalidate distressed debt investing. It is hard to buy real estate in desirable locations when credit-impaired mortgage borrowers drive up prices after putting no money down. It is ludicrous to endorse some nation's economic potential if its government statisticians falsify important data.
Painful lessons recede from memory when shamans apply fake salves to real wounds. The snake oil feels good for a while if the patient does not catch on to the placebo effect. Witch doctors on Wall Street have run away with investors' money since 2008. The cleverest and luckiest players have already left the game. Suckers remain, awaiting their chance to hold an empty bag while Wall Street's knaves clean them out.
The post-2008 economic recovery is mostly a mirage in Europe and the United States. China's growth miracle has been a mirage for some time. The BRICS were a cute marketing concept as long as investors never figured out that those countries had weak legal climates for investing. Privately funded unicorn startups are deflating, flushing their employees' stock options down the Silicon Valley drain. Investment concepts that looked great when capital had no cost were suitable only for fantasies. The market tumble that will snap people back to reality will be one heck of a tumult.
Saturday, February 20, 2016
Financial Sarcasm Roundup for 02/20/16
It's always a great day at Alfidi Capital. It's even greater when I'm throwing sarcasm at the financial world.
China replaced its stock market regulator with a bank economist. Trading one type of loser for another will not repair foreign investors' lost confidence. The symbolism of a former central bank official watching stock movements is that capital markets must do the state's bidding. They could try putting a panda bear in charge. It would be more fun to watch than a human regulator and just as effective given the system's pervasive corruption.
US law enforcement and Apple are testing each other's legal patience. It looks like so much theater to me. Apple has cooperated with data subpoenas before. It's fairly easy to unlock iPhone data anyway. It's so easy, a caveman could do it. The latest case should not be such a big deal but Apple has to at least go through a few hysterical motions to please Silicon Valley's hard-core libertarians and data geeks. The data privacy crowd simply does not grok the "layer cake" messaging methods that federal regulators often employ with the finance sector, and now with the tech sector. I do not expect the data crowd of Star Wars fans and Bitcoin nut jobs to uncover such subtle public performances.
The heart of Yahoo's operation is going to the highest bidder. The board should fire the CEO for dragging this decision out so long. I would have kept the core business and sold off everything else, but the Yahoo board never asked me to become CEO. It's their loss. I will LOL if Microsoft emerges as the ultimate buyer, getting a bargain for what they should have acquired in 2008. Silicon Valley's smartest people sometimes do some really dumb things. It took a series of geniuses over a decade to destroy Yahoo when it could have been saved under Microsoft.
I still use Yahoo Finance because I like the details. It enhances my net worth. Dumb people in the Valley continue to dump capital into doomed tech startups. Laughing at them all will enhance my well-being.
China replaced its stock market regulator with a bank economist. Trading one type of loser for another will not repair foreign investors' lost confidence. The symbolism of a former central bank official watching stock movements is that capital markets must do the state's bidding. They could try putting a panda bear in charge. It would be more fun to watch than a human regulator and just as effective given the system's pervasive corruption.
US law enforcement and Apple are testing each other's legal patience. It looks like so much theater to me. Apple has cooperated with data subpoenas before. It's fairly easy to unlock iPhone data anyway. It's so easy, a caveman could do it. The latest case should not be such a big deal but Apple has to at least go through a few hysterical motions to please Silicon Valley's hard-core libertarians and data geeks. The data privacy crowd simply does not grok the "layer cake" messaging methods that federal regulators often employ with the finance sector, and now with the tech sector. I do not expect the data crowd of Star Wars fans and Bitcoin nut jobs to uncover such subtle public performances.
The heart of Yahoo's operation is going to the highest bidder. The board should fire the CEO for dragging this decision out so long. I would have kept the core business and sold off everything else, but the Yahoo board never asked me to become CEO. It's their loss. I will LOL if Microsoft emerges as the ultimate buyer, getting a bargain for what they should have acquired in 2008. Silicon Valley's smartest people sometimes do some really dumb things. It took a series of geniuses over a decade to destroy Yahoo when it could have been saved under Microsoft.
I still use Yahoo Finance because I like the details. It enhances my net worth. Dumb people in the Valley continue to dump capital into doomed tech startups. Laughing at them all will enhance my well-being.
Friday, February 19, 2016
Thursday, February 18, 2016
Wednesday, February 17, 2016
The Haiku of Finance for 02/17/16
How we should behave
Always think risk and return
Leave emotion out
Always think risk and return
Leave emotion out
Tuesday, February 16, 2016
The Haiku of Finance for 02/16/16
Startup gets a prize
Not about earning profit
Just for looking good
Alfidi Capital Visits DeveloperWeek 2016
I did not have time for either the full CTO World Congress or DeveloperWeek in 2016. I had to make an appearance at DeveloperWeek's VIP reception at Galvanize SF because I am a VIP after many appearances at tech events in Silicon Valley. I avoided the sticky badge and went straight for the food and beverages, along with the snazzy brand icon photo below.
I sat for the brief awards ceremony in between my rounds of booze. Several well-funded startups have made a big splash among the media portals tracking software developers. I have always believed that the ultimate success milestone in monetization is actually making a profit rather than impressing tech writers. I hold a minority view as long as VC-backed startups can afford PR in tech media.
Any reception at Galvanize brings out a crowd of people who play at having tech careers but aren't really serious. They were mostly downstairs tonight for another tech reception. These people are usually in the second or third round of hires at VC-backed startups because they enjoy riding the freebie gravy train. The permanent adolescents in The City never grow up. They will still have roommates into their late 40s and will always complain that dating apps never have a match for their personalities. If someone could create a matchmaking app for total losers, the app would find a boatload of beta testers in San Francisco.
Congratulations to the DevOps people who won prizes at DeveloperWeek and other conferences. The hiring mixers are brimming with developers jumping into their prize-winning startups. I can drink any of them under the table if I have free food before social hour begins. Winning at drinking is easy for me even with an empty stomach but I have to let the public think that I at least make an effort.
I sat for the brief awards ceremony in between my rounds of booze. Several well-funded startups have made a big splash among the media portals tracking software developers. I have always believed that the ultimate success milestone in monetization is actually making a profit rather than impressing tech writers. I hold a minority view as long as VC-backed startups can afford PR in tech media.
Any reception at Galvanize brings out a crowd of people who play at having tech careers but aren't really serious. They were mostly downstairs tonight for another tech reception. These people are usually in the second or third round of hires at VC-backed startups because they enjoy riding the freebie gravy train. The permanent adolescents in The City never grow up. They will still have roommates into their late 40s and will always complain that dating apps never have a match for their personalities. If someone could create a matchmaking app for total losers, the app would find a boatload of beta testers in San Francisco.
Congratulations to the DevOps people who won prizes at DeveloperWeek and other conferences. The hiring mixers are brimming with developers jumping into their prize-winning startups. I can drink any of them under the table if I have free food before social hour begins. Winning at drinking is easy for me even with an empty stomach but I have to let the public think that I at least make an effort.
Monday, February 15, 2016
Subscribe to:
Posts (Atom)