long term – Piazza Carlo Giuliani http://piazzacarlogiuliani.org/ Wed, 16 Mar 2022 11:13:28 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://piazzacarlogiuliani.org/wp-content/uploads/2021/03/cropped-icon-1-32x32.png long term – Piazza Carlo Giuliani http://piazzacarlogiuliani.org/ 32 32 The recent rise could appease institutional owners of The Boeing Company (NYSE:BA) after losing 30% in the past year https://piazzacarlogiuliani.org/the-recent-rise-could-appease-institutional-owners-of-the-boeing-company-nyseba-after-losing-30-in-the-past-year/ Wed, 16 Mar 2022 11:13:28 +0000 https://piazzacarlogiuliani.org/the-recent-rise-could-appease-institutional-owners-of-the-boeing-company-nyseba-after-losing-30-in-the-past-year/

To get a sense of who really controls The Boeing Company Inc (NYSE: BA), it’s important to understand the company’s ownership structure. And the group that holds the biggest slice of the pie are institutions with 47% ownership. In other words, the group faces the maximum upside potential (or downside risk).

After a year of 30% losses, last week’s 3.5% gain would be welcomed by institutional investors as a likely sign that yields may start to rise.

Let’s take a closer look at what different types of shareholders can tell us about Boeing.

See our latest analysis for Boeing

NYSE: BA Ownership Breakdown March 16, 2022

What does institutional ownership tell us about Boeing?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Boeing already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Boeing’s historic earnings and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
NYSE:BA Earnings and Revenue Growth March 16, 2022

Hedge funds don’t have a lot of shares in Boeing. Our data shows that The Boeing Company Employee Savings Plans Master Trust is the largest shareholder with 7.5% of shares outstanding. In comparison, the second and third shareholders hold approximately 7.4% and 5.3% of the shares.

Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, which means that the company’s shares are widely distributed and there is no dominant shareholder.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Boeing Insider Ownership

The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data suggests that insiders hold less than 1% of The Boeing Company in their own name. It’s a very big company, so it would be surprising to see insiders owning much of the company. Although their stake is less than 1%, we can see that the board members collectively own $99 million worth of stock (at today’s prices). In this kind of situation, it may be more interesting to see whether these insiders have been buying or selling.

General public property

With a 44% stake, the general public, made up mostly of individual investors, has some influence over Boeing. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. Know that Boeing shows 2 warning signs in our investment analysis and 1 of them is significant…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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It’s not the stagflation of the 1970s, but it’s not the low-rate world of the 2010s either. https://piazzacarlogiuliani.org/its-not-the-stagflation-of-the-1970s-but-its-not-the-low-rate-world-of-the-2010s-either/ Tue, 15 Mar 2022 13:12:56 +0000 https://piazzacarlogiuliani.org/its-not-the-stagflation-of-the-1970s-but-its-not-the-low-rate-world-of-the-2010s-either/

Those of us who remember the 1970s, even when we were kids, get nervous. No decade is entirely bad, but very few of us would like to see a repeat of inflation, endless financial stress, poverty – and, in the case of many families (mine included), migration to looking for a job. Unfortunately, so far the 2020s are too much like the 1970s for comfort.

Dario Perkins of the TS Lombard Research Group – our latest guest on the MoneyWeek podcast – lists the ways: The 1960s saw one of the longest booms on record and a flattening of the Phillips curve – that is, say that falling unemployment was not correlated with rising inflation in the way one would expect.

This encouraged policymakers to prioritize full employment over low inflation (inflation did not seem to be the relevant risk) and to develop more militant fiscal policy.

This was the backdrop for a fabulous bull market. The FTSE All-Share Index doubled in the two years to January 1969, when it peaked at a record price-earnings ratio of 23 times.

Then came a huge energy shock that built on earlier inflationary rumblings. The Phillips curve normalized, wages started to rise and the money supply jumped. Policymakers blamed temporary factors – and removed them from the inflation numbers they used as a benchmark. It was “transient”, you see.

It’s not the 1970s…

Sounds awfully familiar, doesn’t it? Especially now that, despite last Thursday’s sharp drop in oil prices, the energy price shock of recent weeks is comparable in magnitude to that of the 1970s.

Perkins isn’t convinced we should be as tense as I’m beginning to feel. There is, he says, a huge and crucial difference between now and then, in the UK at least: then labor had power; Now, that is no longer the case. Our population is not so young and “activist”, our unions are weak, our markets are much more open (companies cannot get away with price hikes in the same way) and hardly anyone – pensioners and Members aside – does not have their income indexed in any way to inflation. All of this means that a wage price spiral cannot start in quite the same way.

He may be right. I would say workers will rebuild their bargaining power fairly quickly in the face of CPI inflation hitting 10%. It is worth recalling that in the 1960s wages lagged inflation for some time before pressures appeared. There were rumblings in 1966 in the railroads and coal mines and then things got seriously worse in late 1969 when Ford Motor workers went on strike.

…but it’s not the 2010s either

Yet, whoever of us is most right – forecasters are rarely quite right – one thing is certain: we will not return to the 2010s.

The deflation machine that has been the driving force of the past decades is properly broken, which quickly proves to be a terrible shock to fund managers who have only ever worked inside said machine, and who were therefore hard-wired in their behavior. an assumption that moderate inflation and low interest rates would last forever.

With the reversal of globalization, labor costs at best no longer falling, and the structural problem of material and energy supply increasingly evident, the prices of just about everything must now rise. . A quick reminder for those who think there is an easy way out: it takes fossil fuels to make wind turbine blades and solar panels and it takes a lot of nickel – up to 90% in two weeks – to make electric car batteries.

The question is how far prices should rise, how fast and with what volatility. That we cannot know. The war in Ukraine is giving us some nasty near-term clues (very quickly and with a lot of volatility) but the layering of uncertainty means we can’t guess much more than that. Who knows, for example, what might result from attempts by money-printing governments to shield households from the sharp rise in food prices caused by the horrors in one of the world’s most trusted grain producers. ?

How can you invest?

Where are the financial safe havens? You might think that as long as inflation stays around 1% to 4% (Perkins estimate), you will be safe in stocks. This is what we are often told, but it is not always the case.

Inflation in the UK only exceeded 5% in 1969, but investors still lost hugely in the 1960s: the market rose by 20% and prices by 43%. Extend it into the stagflationary 1970s and things look pretty bad too: From October 1964 to May 1979, a period that encompassed two Labor governments and a Tory, UK stock investors lost 31.7% of their money in terms of adjusted for inflation.

So much for the idea that a stock index can protect you from inflation, stagflation – or anything else. The good news is that the only way a stock market can protect you is to buy it low – the best long-term returns come from buying cheap markets.

It would be nice to think that some markets are almost there – especially the United States, which is less at risk of a war-related recession than Europe – but they are not. For that, we would need to be sure that there was another wave of central bank money on the way, to know that energy prices are coming down, and to be sure that the valuations are attractive. None of these things are true, or close to being true. For example, Shiller’s price-to-earnings ratio in the US is still over 30x, compared to a long-term average of over 16x.

Waiting for them to be true is a slow process. Russell Napier, a market historian, likes to point out that the four major bear markets in the United States lasted an average of nine years each. In the meantime, you should get some protection against commodities and against gold – you did in the 1970s.

But you’d also be wise to look into multi-asset funds run by managers who have long known the deflationary machine would break and are invested accordingly. Look Ruffer Investment Company (LSE: RICA)which has been up slightly since the beginning of the year, Personal Property Trust (LSE: NLP) and Capitalization Trust (LSE: CGT). They are more ready than most.

• This article first appeared in the Financial Times

]]> Series TO1 warrants exercised approximately 75.3% and Veg of Lund receives approximately SEK 6.53 million https://piazzacarlogiuliani.org/series-to1-warrants-exercised-approximately-75-3-and-veg-of-lund-receives-approximately-sek-6-53-million/ Sat, 12 Mar 2022 08:11:03 +0000 https://piazzacarlogiuliani.org/series-to1-warrants-exercised-approximately-75-3-and-veg-of-lund-receives-approximately-sek-6-53-million/

Today, Veg from Lund AB (pub) (“Vegetable of lund” or the “Company”) announces the result of the exercise of the series TO1 warrants (the “Warrants”), which were issued during the third quarter of 2021. In total, 590,865 subscription were exercised, corresponding to approximately 75.3% of the total number of Warrants in circulation, for the subscription of 590,865 shares at a subscription price of SEK11.06 per new share. Lund Vegetablesthus receives approximately 6.53 million Swedish crowns before issuing fees by exercising the Warrants.

“It’s gratifying that so many people have chosen to participate in the financing of Lund Vegetables and our continued launch of DUG®. The main shareholders and members of the Board of Directors have exercised their warrants and thus show their continued support in the important phase that the company is going through. We can now focus on increasing market share, mainly in the UK and Sweden while the board continues to actively evaluate various financing options to ensure the company’s long-term funding and optimal capital structure based on the ongoing launch,” said Emma Källqvist, interim CEO. and Chief Financial Officer of Lund Vegetables.

Context:

The exercise period of the Warrants took place from February 25, 2022 up to and including March 10, 2022. The subscription price per share subscribed by exercise of the BSAs was set at SEK11.06 as communicated by press release on February 24, 2022.

A total of 590,865 warrants were exercised to subscribe for 590,865 shares, which means that approximately 75.3% of all outstanding warrants were exercised to subscribe for shares.

The warrants exercised have been replaced by interim shares (IA), pending registration with the Swedish Companies Registration Office. The provisional shares should be converted into shares within approximately three (3) weeks.

Number of shares, share capital and dilution:

Through the exercise of the Warrants, the number of shares in Lund Vegetables increases by 590,865 shares, from 12,224,336 shares to 12,815,201 shares. The share capital increases with SEK37,815.360 from SEK 782,357.504 for SEK 820,172,864.

For existing shareholders who have not exercised any Warrants, the dilution amounts to approximately 4.6% based on the number of shares after the exercise of the Warrants.

Advisors

Mangold Fondkommission AB is the financial advisor and issuing agent and Fredersen Advokatbyrå is the legal advisor to Lund Vegetables within the framework of the exercise of the Warrants.

For more information regarding the Warrants, please contact:

Mangold Fondkommission AB
Telephone: +46 8 5050 1595
E-mail: transmitter@mangold.se

For more information please contact:

Veg from Lund AB
Emma Källqvist (acting CEO and CFO)
Telephone: +46 721 869 018
E-mail: emma.kallqvist@vegoflund.se

This information is such as Lund Vegetables is required to make public in accordance with the EU Market Abuse Regulation. The information has been submitted for publication, through the above contact person, the March 12, 2022 at 09:10 CET.

On Veg from Lund AB (pub)
Lund Vegetables develops unique plant foods that meet consumer demands for taste and sustainability. The company has roots in research at Lund University and has patented methods for developing new food categories in the growing plant-based food market. Lund Vegetables climate-smart and tasty products are sold in Europe and Asia under the DUG® Mark. The company’s stock is listed on the Nasdaq First North Growth Market under the symbol VOLAB. Learn more at ir.vegoflund.se. Mangold Fondkommission AB is the company’s certified advisor and can be contacted by telephone: +46 8 5030 15 50 or by e-mail: ca@mangold.se.

https://news.cision.com/veg-of-lund/r/warrants-of-series-to1-were-exercised-to-approximately-75-3-percent-and-veg-of-lund-receives- c3523755

https://mb.cision.com/Main/18795/3523755/1547521.pdf

(c) Decision 2022. All rights reserved., sources Press Releases – English

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The war in Ukraine has raised long-term inflation expectations https://piazzacarlogiuliani.org/the-war-in-ukraine-has-raised-long-term-inflation-expectations/ Sat, 12 Mar 2022 00:17:10 +0000 https://piazzacarlogiuliani.org/the-war-in-ukraine-has-raised-long-term-inflation-expectations/

Inflation continues to rise in many countries. Until recently, central banks such as the ECB or the Swiss National Bank viewed the current rise in inflation as temporary, albeit more persistent than expected. They attributed the high inflation rates to base effects, supply bottlenecks and demand shifts, all related to the pandemic, and expected these transitory factors to decline over the course of the year. the year. As long as long-term inflation expectations remained anchored, core inflation should be stable and close to central bank targets.

However, the Russian invasion of Ukraine and the resulting economic disruption could fundamentally upset this assessment. For the world economy, Russia and Ukraine are important suppliers of raw materials such as energy, metals and agricultural products. The war called into question the supply of these resources and accelerated the evolution of their price. It is feared that a further increase in the price of these factors of production will translate into higher operating and manufacturing costs, which in turn translates into higher prices and ever-higher inflation expectations. (D’Acunto and Weber 2022). Indeed, oil shocks are historically known to fuel inflation expectations and unanchor the expectations of consumers and price makers (Coibion ​​and Gorodnichenko 2015, Coibion ​​et al. 2018).

To determine whether the Russian invasion of Ukraine has affected corporate inflation expectations, I use data from a special survey of Swiss companies conducted by the KOF Swiss Economic Institute at ETH Zurich. The companies surveyed are companies from all economic sectors in Switzerland, with the exception of agriculture. As part of this survey, companies were asked where they expected the annual inflation rate of the consumer price index in Switzerland to be over the next 12 months (short term) and next five years (long term). There were no response options limiting company assessments to answer these quantitative questions. Companies were free to formulate their expectations as a numerical value (in percentage).

The empirical strategy then exploits the fact that the investigation was launched just before and conducted during the Russian invasion. This configuration makes it possible to identify the effects induced by the war on companies’ inflation expectations by comparing the answers of companies which answered the survey before February 24 (the first day of the war) with those of companies which responded after the outbreak of war. As the survey was conducted electronically, it is possible to determine the exact response time of the companies: 652 companies responded before the invasion, 258 companies since. The analysis takes into account all responses received at the time of writing (9 March).

Figure 1 shows the distributions of 12-month (left panel) and 5-year (right panel) inflation expectations responses separately for groups of firms that responded before and during the war.

Figure 1 Inflation expectations of Swiss companies

To note: This figure plots the distributions of 12-month (left panel) and 5-year (right panel) inflation expectations responses separately for groups of firms that responded before and during the war. The vertical lines show the group-specific mean values. Responses greater than 20% in absolute values ​​are excluded.

In the short term, inflation expectations are almost the same for both groups. Before the start of the war, Swiss companies expected the inflation rate to reach 2.10% (median: 2.00%) on average over the next twelve months. Since the beginning of the war, the expected increase in consumer prices is 2.12% (median: 2.00%). Thus, Swiss companies estimated that the inflation rate over one year would be higher than the inflation rate known to most participants at the time of the survey. Actual inflation was 1.6% in January 2022.1 Moreover, the median and mean values ​​are close to each other, indicating an overall fairly condensed distribution. The cross-sectional standard deviation of inflation expectations is only 1.54% before the war and 1.55% during the war.

In the long term, inflation expectations have increased since the Russian invasion from 2.37% (median: 2.00%) to 2.75% (median: 2.00%). We can use a regression model to test if this difference is statistically significant. The advantage of such a model is that other factors can also be taken into account, such as the size or the sector of activity of a company. The estimate shows that the increase in five-year inflation expectations is statistically significant at the 5% significance level. This suggests that after the outbreak of the war, Swiss companies expect higher consumer prices in the long term than before the war.

Figure 2 documents the systematic heterogeneity across firms in long-term inflation expectations by showing the effects of conditional mean treatment with 90% confidence limits. Differentiated by sectors, the left panel shows that companies in the manufacturing sector are the source of higher expected inflation since the start of the war. Their long-term inflation expectations have increased by 0.7 percentage point on average. This result seems plausible because these firms are closer in the value chain to input factors such as energy and other raw materials, the prices of which rose significantly during the war. On the other hand, there is no significant change in the expectations of companies in the construction or service sectors.

Figure 2 Heterogeneity of long-term inflation expectations between companies

To note: This chart shows the effects of the conditional mean treatment (with 90% confidence limits) of the Russian invasion on firms’ long-term inflation expectations by sector (left panel), firm size (middle panel) and the evolution of profit margins over the last five years (right panel).

The middle panel shows the effect of firm size. Small and medium-sized companies with less than 250 employees tend to report higher long-term inflation expectations than large companies since the Russian invasion. Finally, the panel on the right distinguishes according to the evaluation of companies whether the profit margin of their main product or service has increased or decreased over the last five years. Inflation expectations have risen for companies whose margins have shrunk in recent years. Rising energy and commodity prices are already reducing profits for many companies. Therefore, the result might suggest that firms facing margin pressures are more likely to expect to pass on higher prices for their inputs by raising their own prices.

Indeed, companies confirm that higher operating and manufacturing costs impact their prices. As part of the survey, companies were also asked about the reasons for changing prices.2 Specifically, the survey asked companies to rate a range of factors such as labor cost or competitor price changes based on their importance to price adjustments with points ranging from 1 (“completely unimportant”) and 4 (“very important”). These ratings were collected separately for price increases and price decreases.

The average odds for most factors are higher for price increases than for price decreases. Exceptions to this observation are market conditions such as the intention to gain market share, changes in competitor prices or changes in demand. Taken together, this observation highlights asymmetries in price drivers: cost changes are the most important factor for price increases. On the other hand, market conditions are driving price declines. Figure 3 illustrates these asymmetries by showing the difference in average score for each factor and by sector. The results show a surprisingly regular pattern of positive asymmetries in costs and negative asymmetries in market conditions.

picture 3 Asymmetries of factors influencing prices

To note: Companies were asked to rate the factors according to their importance for price adjustments with points ranging from 1 (“completely unimportant”) to 4 (“very important”). These ratings were collected separately for price increases and price decreases. This figure shows for each factor and sector the difference between its average score for a price increase and its average score for a price decrease.

Beyond that, the figure shows that these asymmetries are not the same in all sectors. In particular, higher supplier prices, higher raw material costs, and higher energy and fuel prices – all of which are rising sharply following the Russian invasion – are more important in explaining the increases. prices in the manufacturing sector than in construction or services.

Conclusion

The results of a special survey on pricing behavior show that following the Russian invasion of Ukraine, the long-term inflation expectations of Swiss companies increased significantly, especially in the manufacturing sector. In manufacturing, rising input costs, such as rising energy and commodity prices, are particularly important in driving price increases. These results reinforce concerns that, as price pressures widen, inflation expectations could become less anchored, making headline inflationary pressures much more persistent.

The references

Blinder, A, E Canetti, D Lebow and J Rudd (1998), Asking about prices: a new approach to understanding price stickinessRussell Sage Foundation.

Coibion, O and Y Gorodnichenko (2015), “Is the Phillips curve alive after all? Inflation expectations and missing disinflation”, American Economic Journal: Macroeconomics 7(1): 197-232.

Coibion, O, Y Gorodnichenko and S Kumar (2018), “How Do Firms Shape Their Expectations? New Survey Data”, American Economic Review 108(9): 2671-2713.

D’Acunto, F and M Weber (2022), “Rising inflation is worrisome. But not for the reasons you think”, VoxEU.org, 4 January.

Fabiani, S, M Druant, I Hernando, C Kwapil, B Landau, C Loupias, F Martins, T Mathae, R Sabbatini, H Stahl, A Stokman (2005), “The behavior of firm prices in the euro zone: new evidence investigation”, ECB Working Paper No 535.

Endnotes

1 The inflation rate for February was only published on March 3 and amounts to 2.2%.

2 The wording of these questions is adapted from Blinder et al. (1998) and Fabiani et al. (2005).

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Amazon announces stock split offering green in a sea of ​​red https://piazzacarlogiuliani.org/amazon-announces-stock-split-offering-green-in-a-sea-of-%e2%80%8b%e2%80%8bred/ Thu, 10 Mar 2022 14:36:48 +0000 https://piazzacarlogiuliani.org/amazon-announces-stock-split-offering-green-in-a-sea-of-%e2%80%8b%e2%80%8bred/

Key points to remember:

  • Consumer Price Index (CPI) report hits projections
  • Stocks rebound as Russian official signals potential progress ahead of peace talks
  • The strength of the sector could change depending on the prospects for peace

Stock index futures were pointing to a lower open as Wednesday’s rally appears to lack the legs to continue into Thursday. Commodities are rebounding from yesterday’s strong sell-off, and that seems to be weighing on investors. However, today’s Consumer Price Index (CPI) report will capture much of the attention of investors.

The CPI report measured a 0.8% increase month-on-month and a 7.9% increase year-on-year, meaning inflation rose as foreseen. However, these are still very high figures not seen since the early 1980s. Core inflation which excludes food and energy rose by 6.4% year-on-year, which was higher than expected by 5.9%. Stock index futures rallied on the report, but quickly gave back gains. All in all, there’s not much here that’s likely to push the Fed off the trajectory Chairman Jerome Powell outlined to Congress last week.

Investors are likely feeling the jolt of market swings, especially with 2% ranges. While there really isn’t anything that signals an end in sight, we can hope that the ranges will at least tighten.

US markets do not appear to be benefiting from a good trading day in Asia. The Japanese Nikkei 225 rose nearly 4% on lower oil prices. The Hang Seng Index in Hong Kong rose 1.27%, while the Shanghai Composite Index traded 1.22% higher. However, oil futures are trading higher again this morning, rising 5.25% before the opening bell.

As the Fed moves slowly to raise rates, some companies are looking to raise capital while interest rates are still low. AT&T (T) and Discovery (DISCA) raised $30 billion by selling 40-year corporate bonds for their joint venture. The long maturity allowed the group to offer a yield above 3%, which seemed to attract a lot of attention.

After the market closed on Wednesday, Amazon (AMZN) rebounded more than 8% on news that the company had approved a 20-to-1 stock split in February. Stock splits allow small investors to buy stocks without jeopardizing the diversification of a portfolio. AMZN also announced its intention to buy back $10 billion of its shares.

Market Minutes Review

Stocks rebounded on Wednesday with the S&P 500 (SPX) up 2.57% and testing the 4,300 level. We’ve watched this key level as support for the past nine months, but now it’s acting as resistance. . This level will be key for some traders. If the bulls are able to overcome the resistance, many traders can expect the rally to continue. However, if the resistance holds, the bears could push the benchmark to lower levels.

The rebound was prompted by the spokesperson for the Russian Foreign Ministry who said that Moscow did not want to overthrow the government in Kiev. I hope this is a good sign for tomorrow’s talks between Russia and Ukraine. However, Ukrainian President Zelensky said Ukraine would not give “a single inch” to Russia. Yesterday, President Zelensky said that Ukraine would no longer seek membership in NATO (North Atlantic Treaty Organization), which has been the main point of contention for Russia.

The news led to a sell-off in commodities, which have seen a tear in the past seven trading days. Crude oil futures fell 11.33% on Wednesday, closing below $110 a barrel. Similarly, RBOB gasoline futures fell more than 10% and fuel oil futures fell 20% on the day.

Mains strength switch

If the peace talks succeed, there could be a change in the strength of the sector. Depending on how oil prices react, energy will likely pull back a bit as crude oil goes through a price discovery phase where investors try to focus on supply and demand instead of speculating on what might come next. with Russia and Ukraine. However, even before Russia invaded Ukraine, oil prices were still rising and analysts were forecasting prices ranging from $65 a barrel to $150 in 2022. This means energy stocks could pull back in the short term. term but increase in the long term. If so, energy could still be a strong sector.

Wednesday’s sector performance could be a bit of a microcosm of what’s to come in the near future if peace prevails. The energy sector was the worst performer, with the Energy Select Sector Index falling 3.11%. Financials and technology were the strongest, followed by materials and consumer discretionary. The Financial Select sector index rose 3.93% as the 10-year Treasury yield (TNX) jumped more than 4% on the day and appears to be heading back towards a 2% yield.

If the threat of war lessens, the Federal Reserve is freer to be more aggressive in raising interest rates to fight inflation. Rising rates tend to benefit financials as the gap between savings and credit widens. In fact, the PHLX KBW Bank Index (BKX) rose 4.19% in reaction to higher yields.

If the resistance of the S&P 500 (SPX) holds, it is difficult to say how the sectors will react. Wednesday’s rally could just be a relief rally as the war between Russia and Ukraine is far from over. Therefore, there could still be a lot of anxiety that could prevent stocks from following today. However, war anxiety will make it difficult for the Fed to be aggressive on inflation, so inflationary sectors like energy, materials and financials could still benefit.

Measuring fear: Speaking of anxiety, the Cboe Market Volatility Index (VIX), aka Fear Gauge, fell 7.63% and is now trading just above 32. There are different levels on the VIX that can help investors gauge the degree of fear and complacency. It is important to remember that these levels are not exact due to the enormous volatility of the index. These levels have also evolved over time.

Measuring fear: Investor complacency tends to be highest when the VIX is trading below 15. This tends to happen during mature bull markets. Much of 2021 found the VIX at or below 15. However, in 2018 the VIX was as low as 10. When the VIX is around 20, investor anxiety tends to be heightened. This level often coincides with normal market pullbacks. At 30, anxiety turns to fear. In the early 2000s, this level tended to signal that fear was close to a capitulation point. When the VIX hits 40, investors typically hit a peak of fear. The VIX was around 40 years old when the dotcom bubble burst.

However, there have been times when the VIX has increased much more. When COVID-19 started arriving in the United States and breaking out, the VIX was hitting 90. Similar levels were reached during the 2008 credit crisis. The biggest spike on record was Black Monday in 1987, where the VIX exceeded 170.

TD Ameritrade® Commentary for educational purposes only. SIPC member.

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Blatant Absence of Standards Governing the Startup Ecosystem (Opinion) https://piazzacarlogiuliani.org/blatant-absence-of-standards-governing-the-startup-ecosystem-opinion/ Sun, 06 Mar 2022 05:51:48 +0000 https://piazzacarlogiuliani.org/blatant-absence-of-standards-governing-the-startup-ecosystem-opinion/

By Pratap Venugopal

New Delhi, March 6 (IANS): A startup is typically a small, self-funded early-stage company founded by one or more entrepreneurs, seeking to promote a product or service for which they believe there is a demand.

Sources of funding for startups include friends and family, venture capitalists, crowdfunding, etc.

India, according to the 2021-22 economic study, has become the third largest startup ecosystem in the world after the United States and China, with a total number of recognized startups exceeding 61,400. As of January 14, 2022, startups in India are expected to grow annually at the rate of 12-15%.

India has 83 unicorns (i.e. private tech startups with a valuation of around Rs 7,500 crore or more) worth a total of $277.77 billion (Rs 2, 10, 92 , 32, 60, 65,000), mostly in the service sector, contributing over 50% of India’s GDP.

Although governance standards for listed companies in India are strict and continue to be tightened, there is a distinct lack of standards governing startups.

It is only when a startup has, after having successfully achieved its objectives that institutional investors seek to exist by listing on the stock exchange, that governance standards come into effect and the listed entity becomes subject to the regulation from various regulatory bodies including the Securities and Exchange Board of India (SEBI).

There is an argument that the regulatory framework in India as a startup ecosystem is complex. However, the need for good governance practices is established by recent events at BharatPe, which was co-founded by Ashneer Grover and Shashvat Nakrani in 2018 in New Delhi.

It, at breakneck speed of three and a half years, has grown into a well-known Indian fintech company that caters to smallholders and kirana or convenience stores.

However, in January 2022, an external investigation resulted in preliminary findings of financial manipulation and fraud for periods spent as a startup, involving Ashneer Grover’s wife and brother, resulting in a board decision. of BharatPe to end his services.

Ashneer Grover is currently under investigation and is on leave until April 1, 2022.

BharatPe’s experience reiterates the need for good corporate governance in the startup ecosystem that would hold management and other staff accountable and ensure the values, conduct, and ethical actions of these organizations.

However, it is essential that a balance be found between excessive control and what startups are looking for, namely self-regulation.

Proper regulation and corporate governance in the startup ecosystem will not only promote growth but also ensure transparency and ultimately promote the listing of a good company adding value to investors in the market. securities.

The basis of an efficient and effective corporate governance framework in the startup ecosystem requires clarity of legal requirements to be adopted and followed, authority or authorities responsible for regulating various functions, transparency through appropriate disclosure of financial and non-financial information to all stakeholders, auditing by independent auditors and other similar measures.

Corporate governance requirements for startups should be constantly reviewed and adapted based on requirements that arise from time to time.

Only with proper “checks and balances” can mismanagement, misuse of company resources, and conflicts of interest be curbed, making startups sustainable in the long run.

Corporate governance standards play a vital role in improving the public image of startups and making them attractive to investors.

A startup at each stage of its growth has different requirements when it comes to stakeholders and compliances and therefore requires appropriate corporate governance standards.

Corporate governance standards, although at the inception stage, could be less rigid and more flexible, and as the startup grows and is on its way to an initial public offering (IPO), the needs corporate governance should be tightened to ensure the protection of the interests of the investing public.

There is certainly a need for startups, especially those with exponential growth potential and therefore also potential for securities market disruption, to have strong pro-corporate governance, and to formulate and adopt best practices to avoid situations such as the one that arose in the case of BharatPe.

The establishment of good and appropriate corporate governance in the startup ecosystem, although not an easy task, is essential and of utmost importance in the long term and must evolve taking into account experiences. past and situations that have occurred.

The need for a good corporate governance framework and its implementation in the startup ecosystem has also been recognized by SEBI.

SEBI has from time to time considered the issue of corporate governance for startups, creating a number of committees including business leaders, although regulation by SEBI only comes into effect when registration of startups or in the event that alternative investment funds (AIFs) are involved.

SEBI meanwhile relaxed listing standards to help startups attract big investors.

The SEBI (AIF) (Second Amendment) Regulations, 2021 sought to define a startup as a limited liability company or limited liability company that meets the criteria for startups prescribed by the DPIIT, Department of Trade and Industry , Government of India in the notification dated 19th February 2019 or such other policy as may be issued from time to time by the Central Government.

It is undoubtedly true that legal and accounting standards may not be strictly of paramount importance to a startup that suffers from inadequate resources or finances, but as the startup scales and grows and begins to generate substantial revenue, strong and efficient business governance standards would prevent money laundering, corruption, account manipulation, embezzlement, unfair labor practices, etc.

In summary, while corporate governance should not be equated with bureaucracy, it would be essential to promote the mission as envisioned by the founder(s) of a startup, improve and endear its image to the investing public. with a healthy culture. transparency and focus on an efficient corporate structure.

To achieve this objective, it would be necessary to rethink the roles of regulators and authorities in order to place startups under their jurisdiction, to promote and ensure compliance with good and effective corporate governance practices.

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Should you investigate RBG Holdings plc (LON:RBGP) at £1.02 in the UK? https://piazzacarlogiuliani.org/should-you-investigate-rbg-holdings-plc-lonrbgp-at-1-02-in-the-uk/ Sat, 05 Mar 2022 08:33:21 +0000 https://piazzacarlogiuliani.org/should-you-investigate-rbg-holdings-plc-lonrbgp-at-1-02-in-the-uk/

While RBG Holdings plc (LON:RBGP) may not be the best-known stock right now, it has seen significant price moves over the past few months on AIM, reaching highs from UK£1.37 and falling to lows of UK£1.02. . Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question that needs to be answered is whether RBG Holdings’ current trading price of UK£1.02 reflects the true value of the small cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of RBG Holdings based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for RBG Holdings

What is the opportunity at RBG Holdings?

Good news for investors – RBG Holdings is still trading at a fairly cheap price according to my multiple price model, where I compare the company’s price-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find RBG Holdings’ ratio of 11.67x to be below its average of 25.46x, indicating that the stock is trading at a lower price than the professional services sector. However, there may be another chance to buy again in the future. This is because RBG Holdings’ beta (a measure of stock price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s stock will likely fall more than the rest of the market, providing an excellent buying opportunity.

What does the future of RBG Holdings look like?

TARGET: RBGP Earnings and Revenue Growth March 5, 2022

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With revenues expected to grow 38% over the next year, the future looks bright for RBG Holdings. If the level of spending can be maintained, it looks like higher cash flow is expected for the stock over the coming year, which should translate into a higher valuation for the stock.

What does this mean to you :

Are you a shareholder? Given that RBGP is currently trading below the industry PE ratio, now may be the perfect time to build up more of your holdings in the stock. With an optimistic outlook on the horizon, it appears that this growth has yet to be fully priced into the stock price. However, there are also other factors such as the capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been watching RBGP for a while, it might be time to get into the stock. Its prosperous future prospects are yet to be fully reflected in the current share price, meaning it’s not too late to buy RBGP. But before making investment decisions, consider other factors such as the track record of its management team, in order to make an informed assessment.

So while earnings quality is important, it is equally important to consider the risks that RBG Holdings currently faces. For example, we found 3 warning signs which you should browse to get a better picture of RBG Holdings.

If you are no longer interested in RBG Holdings, you can use our free platform to view our list of over 50 other stocks with high growth potential.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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What is a payday loan? https://piazzacarlogiuliani.org/what-is-a-payday-loan/ Fri, 25 Feb 2022 22:26:00 +0000 https://piazzacarlogiuliani.org/what-is-a-payday-loan/

payday ready are generally short-term unsecured loans characterized by high interest rates that generally do not require a credit check.

Although there is no exact and universal definition of the term, the US Consumer Financial Protection Bureau indicates that this type of loan is usually $500 or less and is usually due on the borrower’s next payday. States have different laws governing these types of fast loans, but they may be available to Americans through in-store payday lenders or in line, depending on location. The due date on payday loans is generally two to four weeks from the date of issuance, and lenders generally do not consider borrowers’ credit scores or their ability to meet other financial obligations when approving the loan.

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To secure a payday loan, payday lenders often require a personal check from the borrower for the loan amount, plus interest and fees, for a future deposit. They often require direct access to the borrower’s bank account.

Payday lenders hold the personal check until the borrower receives their next paycheck, direct deposit or social Security Payment. Depending on the terms of the loan and the laws of the state in question, some payday lenders offer long-term repayment plans that allow them to make multiple electronic withdrawals from the borrower’s bank account.

The average term for payday loans is about two weeks, and loans typically range between $50 and $1,000. In exchange for quick loans that don’t require a credit check, payday borrowers typically pay exorbitant interest rates and fees on their loans. Payday lenders often charge annual percentage ratesor APR, of 400% or more on their loans, plus finance charges of between $10 and $30 for every $100 borrowed.

The only requirements to qualify for most payday loans are an opening Bank account relatively good standing, a regular income and a source of identification.

Because little consideration is given to the financial condition or creditworthiness of borrowers, the CFPB has found that payday loans have a high default rate of around 20%. Additionally, approximately 80% of payday borrowers renew or re-borrow their loans within 30 days of their initial loan.

Qualified state borrowers can apply for a payday loan online from companies such as MoneyMutual, CashUSA.com, and BillsHappen. Many payday lenders also have thousands of physical stores in the United States.

In times of financial emergency or life or death situation, payday loans may be one of the only places Americans have bad credit can turn to temporary financial assistance. However, due to widespread deception and predatory behavior in the payday loan industry, the CFPB, Federal Trade Commission, and other federal and state regulators have repeatedly warned Americans of the dangers of payday lending. payday and imposed restrictions on the activities of payday lenders.

A 2016 five-year study by Pew Charitable Trusts found that 12 million Americans take out payday loans each year, and those borrowers collectively pay $9 billion a year in loan fees alone.

  • Speed. Payday loans are fast, and lenders often approve the same or next day.
  • Ease of use. It’s usually easy to get approved for a payday loan as long as the applicant has a stable source of income, a bank account in good standing, and proper identification. Borrowers can even get payday loan approval online. While some critics say payday loans are inherently predatory, there are laws in place to protect the rights of borrowers.
  • Availablity. Depending on the situation, payday loans may be one of the only viable sources of emergency cash for borrowers with bad credit.

  • High cost. Payday loans can come with annual interest rates of 400% or more, and finance charges can be 15% to 30% of the loan amount. These high interest rates stand out even more compared to the national average of around 16.17% credit card interest rate or the average interest rate of 4.25% over 30 years mortgage end of February 2022.
  • Debt cycle. Due to interest and fees, a payday loan can easily force the borrower to put off the majority of their next paycheck, creating an opportunity for borrowers to fall into a cycle of repeat loans.
  • Harassment. Payday lenders have a reputation for exploiting financially vulnerable borrowers and using aggressive and harassing collection practices.

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What are the latest thoughts on fiscal and monetary policy? The Hutchins Roundup keeps you informed of the latest research, charts and speeches. Want to receive the Hutchins Roundup by email? Sign up here to receive it in your inbox every Thursday.

The labor market is tighter than low unemployment and labor force participation rates suggest, say Jason Faberman of the Chicago Fed and Andreas Mueller and Ayşegül Şahin of the University of Texas at Austin. Comparing the number of hours individuals want to work with those they actually work, they find that desired hours of work fell by 4.6% across all individuals between February 2020 and the end of 2021, nearly doubling. the 2.3% decline in labor force participation. These trends are mainly driven by inactive people and part-time workers changing the number of hours they are willing to work, rather than broad changes in the desire to enter the labor market. They are consistent across most demographic groups, with larger declines among those without a college degree. Notably, the authors do not find that desired hours declined significantly more for women than for men, despite documented gender disparities in child care burdens caused by COVID-19. The authors also show that workers in jobs involving some degree of social contact saw particularly large reductions in desired work hours, but those in low-contact jobs actually increased their desired work hours.

The unemployment rate soared at the start of the COVID-19 pandemic before falling back to pre-pandemic levels. The natural unemployment rate — the rate that is consistent with full employment and stable inflation — had a longer-lasting response, according to Richard K. Crump of the Federal Reserve Bank of New York and his co-authors. The authors estimate that the natural rate of unemployment fell from 4.5% to 5.9% over the period 2019-2021, with the estimate driven by strong wage growth rather than rising inflation expectations or the level of inflation. Modeling the Phillips curve relationship – the trade-off between inflation and a slowing labor market – the authors estimate that the deviation of the real unemployment rate from its natural rate will push inflation up by 0.5 points percent above its long-term trend until the end of 2023, although long-term inflation expectations remain well anchored. Recovering labor force participation could help ease wage pressures and lower inflation, although such changes are likely to occur in the long run, the authors conclude.

In the United States, wealth is more unequally distributed than income, perhaps because the rate of return on assets is higher for wealthier households. Using housing market data, Jung Sakong of the Federal Reserve Bank of Chicago finds that poorer households are more likely to buy a home during an economic boom – when expected returns are lower – and sell after a recession, when expected returns are higher. According to his calculations, a 10% increase in net worth is associated with an increase of about 12 basis points in annual return. Consistent with these trends, geographic regions with higher housing market volatility have larger differences in wealth inequality relative to income inequality. He concludes that government policies aimed at increasing wealth by encouraging home ownership could backfire.

The average 30-year fixed rate mortgage rate is climbing

Graphic courtesy of The Wall Street Journal

“In my view, labor market conditions have been and are currently consistent with the FOMC’s maximum employment target, and as such I have focused on continued high inflation…I support the increase in the fed funds rate at our next meeting in March and, if the economy evolves as I expect, further rate increases will be appropriate in the coming months. I will be watching the data closely to judge the appropriate size of an increase at the March meeting In early March, the FOMC will finally stop expanding the Federal Reserve’s balance sheet The resulting end of our pandemic asset purchases will remove another source of unnecessary stimulus over the next few months, we will need to take the next step, which is to start reducing the Fed’s balance sheet by ceasing to reinvest the maturing securities already held in the portfolio. a level appropriate and manageable will be an important additional step towards tackling high inflation,” said Michelle Bowman, Governor of the Federal Reserve.

“I expect these measures to contribute to an easing of inflationary pressures in the coming months, but further measures will probably be necessary this year to tighten monetary policy. Beyond this spring, my opinion on the The appropriate pace of interest rate increases and balance sheet reduction for this year and beyond will depend on how the economy plays out, and I will focus particularly on the progress we are making in reducing inflation. would be to take strong action to help reduce inflation, bringing it back toward our 2% target, while keeping the economy on track to continue creating jobs and economic opportunity for Americans.

The Brookings Institution is funded through support from a wide range of foundations, corporations, governments, individuals, as well as an endowment. The list of donors can be found in our annual reports published online here. The findings, interpretations and conclusions of this report are the sole responsibility of their author(s) and are not influenced by any donation.

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Venture Capital Firm Sequoia Capital Bets Big on Crypto https://piazzacarlogiuliani.org/venture-capital-firm-sequoia-capital-bets-big-on-crypto/ Sun, 20 Feb 2022 16:42:15 +0000 https://piazzacarlogiuliani.org/venture-capital-firm-sequoia-capital-bets-big-on-crypto/

Cryptocurrencies might be posting losses for their investors right now, but there is enough money flowing into this space despite the volatile nature of this asset.

Experts believe the growth of crypto is here to stay.

Leading California venture capital firm Sequoia is the latest to pledge nearly $600 million to become a more active investor in crypto.

The timing of the investment is perhaps a crucial reminder that despite a bitcoin crisis, the cryptocurrency is seen as a bullish asset.

Right now, bitcoin has once again fallen to the $40,000 mark, a first in the past two weeks. Bitcoin is trading near $39,891 at the time of writing according to CoinGecko, a price tracking website for crypto assets.