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Tough Year for Stock Markets, Okay for Wine and Art

US Equity in 2018

S&P 500 -6.2%

Dow Jones Industrial Average -5.6%

Nasdaq Composite -3.9%

In the fourth quarter specifically, the S&P 500 and Nasdaq plunged 13.97 percent and 17.5 percent, respectively, their worst quarterly performances since the fourth quarter of 2008. The Dow notched its worst period since the first quarter of 2009, falling nearly 12 percent. (CNBC)

Meanwhile, assets like fine wine and art are gaining

Liv-ex Fine Wine 1000 index – 2018 | Source: liv-ex.com

According to The Liv-ex Fine Wine 1000 index, which tracks 1,000 wines from across the world, the price has been on a steady rise since May 2016.

People who put money into art at the beginning of the year saw an average gain of 10.6% by the end of November, according to Art Market Research’s Art 100 Index. (WSJ)

And in December’s Art Basel in Miami Beach, one of the world’s preeminent art fairs, things seemed going smooth. In a detailed report, owners of Mark Rothko’s Untitled (Yellow, Orange, Yellow, Light Orange) (1955), a painting purchased at Sotheby’s in 2014 for $36.6 million, was asking $50 million for the painting and said was on reserve later on. “The price tag is high even for the elite Art Basel franchise of fairs.”

In a summary…

Luxury Goods Outperform as Markets Swoon | Source: WSJ

 

「2018 书单」(4)

16. The Elegant Universe: Superstrings, Hidden Dimensions, and the Quest for the Ultimate Theory by Brian Greene
/《宇宙的琴弦》—— 布赖恩·格林
11 月读完

一本深入浅出讲述物理上的弦理论的书。广义相对论和量子力学的**不兼容**是物理学中的世纪难题,superstring theory (超弦理论) 是目前可以**统一两者**,并可能成为**物理学“终极理论”**的理论 (M 理论)。作者先分别阐述了广义相对论和量子力学,之后尽可能易懂地描述了超弦、高维空间等。部分内容读起来还是比较难,但这已然是最好的科普级别。

17. Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It by Peter Peterson
/没有找到中文译本
12 月读完

一本 2004 年的书,作者是上面提过的 Blackstone co-founder,不留情面的描述了美国的 twin deficits (财政赤字和贸易赤字),以及美国两党 – 在选民面前,共和党抓着 tax cuts,彰显 how little they can give to government,民主党抓着 healthcare,彰显 how much they can take from government;与当下的美国对比起来极其有趣。


19 年再接再厉。

「2018 书单」(3)

11. 《腾讯传1998-2016》—— 吴晓波
7 月读完

一本按时间顺序补习腾讯发展历史的书。相比于《激荡三十年》,这本书有更多的官方意味,即腾讯让吴晓波来谈谈自己。此外,由于互联网行业发展速度所致,作者了解和写作的主体也在不断变化,更难把握,能写出不过时的内容相当不易。尽管部分章节更多的是陈列一些官方 fact,但有时逻辑可以自己找,不用靠作者提供。作为书的主角,腾讯虽然时不时会受到不同角度的批评,但仅是**自身革新和进化能力**就相当值得尊敬。

12. 《乞力马扎罗山的雪》—— 欧内斯特·海明威
7 月读完

一本海明威的短篇小说集,还包括了《印第安人营地》《大双心河》《白象似的群山》等。海明威生活的年代和个人经历使他能够写出别人很难体验到的感觉。他对于**死亡和生命**认识之深,并能如此艺术地简洁表达出来,在人类历史上也是为数不多的。

13. 《论人类不平等的起源和基础》—— 卢梭
7 月读完

这是卢梭《社会契约论》之前的文章,以科学严谨的方式尝试推导社会和不平等的形成,着重阐述了最原始的人最自然的状态,以及从感知自我存在到社会不平等的过程。相当具有哲学逻辑的行文,读的时候时常需要回头看看。

14. The Alchemy of Finance by George Soros
/《金融炼金术》—— 乔治·索罗斯
9 月读完(8 月回国进度略慢)

书中强调的一个重要逻辑,**反身性 (Reflexivity)**,适用广度不止金融。索老在金融市场找到了可以严格推导证明的案例,并在部分历史时期运用得炉火纯青。相差 19 岁,他和 Dalio 对于债务危机的理解可能自成一个层次。同时,书中回顾的历史与今年的部分危机(如阿根廷)息息相关,事件是一个个的延续发展,不是孤立和机械的重复。

15. 《邓小平时代》—— 傅高义
10 月读完

这么说,如果要看中国建国后历史,我觉得这本书是**必读**。2013 年在中国大陆出版,内容相当客观有干货。教授毕竟是教授,文字中没有一丝的浮躁,仅是阅读本身就可以提高做其它事情的认真度。

「2018 书单」(2)

6. 《老残游记》—— 刘鹗
4月读完

精彩程度超乎期望值,是晚清四大谴责小说之一(鲁迅评),也是中国近代小说在国外影响最大的一本。最早于 1903 年开始连载,笔名为“洪都百炼生”,后笔名为“鸿都百炼生”。内容以江湖郎中“老残”视角展开,文笔具有特殊的年代感。小说内容有鲜明的时代特色,比如“北拳之乱,所以渐渐逼出甲辰之变法;南革之乱,所以逼出甲寅之变法。”,也有其先进性,比如谈到中国的专利等 “无奈中国无此条例”。

7. 《百年政治家族》—— 《环球人物》杂志社
5 月读完

这个集合的出发点是很好的,其中对于人物子嗣的采访有相当独特的信息量。所谓聚焦重要历史时刻中的人物,理解他们本身与理解历史环境同等重要。

8. 《白夜》—— 陀思妥耶夫斯基
5 月读完

看的这个选集里有五篇中短篇小说,《诚实的小偷》《白夜》《脆弱的心》《圣诞树和婚礼》《一个荒唐人的梦》。本着多看一些文学的想法,找了些代表性的作品,包括接下来的《电视人》《乞力马扎罗的雪》等。陀思妥耶夫斯基十分注重内心描写,不需要太多客观环境背景描述就可以把读者拉入故事中。读译本总有一些不同,若是懂俄文应该体验更佳。

9. 《电视人》—— 村上春树
6 月读完

看的这个选集里有六篇短篇小说,《电视人》《飞机》《我们时代的民间传说》《加纳克里他》《行尸》《眠》。第一次看村上春树,有些不适应,感觉他的小说属于先有一个强烈的感觉再夸张暗示,部分内容有些难理解。另外,这本是 1990 年的小说集,有独特的年代视角。在日本经济高速发展末期,也是资产价格飙升和泡沫末期 (1991 年开始 Lost Decade),一个人人疯狂追逐飞速增长的社会是否健康是否 livable? 村上春树小说大概是受此影响,其中反映出的麻木虚无失落,值得参考。

10. 《三体》—— 刘慈欣
6 月读完

考完 CFA 终于有空读这篇科幻巨著。果然是一打开停不下来的那种。部分内容有点理论(情节需要),整体相当完美。1. 很多情节和设定真实得不像小说;2. 三部曲的时空跨度十分佩服作者;3. 与第二三部比,第一部略显独立。

「2018 书单」(1)

1. The Liar’s Ball: The Extraordinary Saga of How One Building Broke the World’s Toughest Tycoons by Vicky Ward
/《骗子的舞会:史上最昂贵的商业地产争夺战》—— 维基·沃德
第一本是去年 11 月读完(去年计划提前完成,这本书算入18 年计划)

主要围绕纽约地标之一 – 第五大道上的 General Motors Building (通用汽车大厦) – 涉及了纽约地产几十年的历史。作者从 Harry Macklowe 2003 年 14 亿美元从 Trump 和 Conseco 手中拿下 GM Building 前后展开,包括其前后拥有者,关联的投行、律师、保险公司等。另一方面,从通用汽车,一度全世界最大的汽车制造商,到 06 年 GM Building 门口开业的苹果店,地标在 Macklowe 手中成为新的地标。某种程度上说,这是苹果的加冕仪式 – **从通用手中接过美国制造业扛把子的大旗**,也是全球经济增量从传统制造业转型的标志。

2. Life on the Edge: The Coming of Age of Quantum Biology by Jim Al-Khalili and Johnjoe McFadden
/《神秘的量子生命》——  吉姆·艾尔·哈利利 & 约翰乔·麦克法登
1 月读完

并不喜欢这个中文标题。2015年7月出版,一本以高中物理化学基础 + google 可以读下的书。作者用比较易懂的语言阐述**量子生物学** – 运用量子力学来解释生物学中的现象,比如酶的催化作用中的 quantum tunnelling (量子隧穿,新的思路解释酶超过传统力学模型下的效率)、光合作用中的 quantum coherence (量子相干性,用 wave-like energy transfering 解释被捕获光子以近乎零损失的效率找到 reaction center) 等等。一直认为生物学是人类至今还没能参透的科目 – **you don’t understand what you can’t build**。但书中内容不一定是真理,量子生物学是一个探索中的领域,未来可能有更正确的理论。

3.《中国历代政治得失》——  钱穆
1 月读完

钱老是 20世纪国学大师之一,1949 年在香港创立了新亚书院,是后来香港中文大学成立时的最重要的创校书院。这本书讨论了汉、唐、宋、明、清的各项制度 – 政府组织的制度(包括皇权相权,政府机构等讨论;汉唐时期政府对皇帝的制约很有趣,**中国封建社会不能简单用“专制”一词直接概括**),选举和考试制度,赋税制度,兵役制度。虽然也看到一些对于这本书在史诗细节上的批评,但看完整本书可以理解中国现在的很多制度(比如户籍制度,至少在汉代就已经很详细了)。经过几千年演变,**国家运行是极其复杂有趣的科学,历史是再好不过的参考**。

4.《朱自清散文集》——  朱自清
3 月读完(2 月回国进度略慢)

现在回忆起来,有些忘了为什么选了这本书,或许是想读读原汁原味的**“你就在此地,不要走动”**。朱自清去过相当多地方,一个在一九三几年游历欧洲的中国人,并且很实际和详细地记录下各地风土人情,这份功力是相当了得。不仅是游记,散文集里许多其它的文章,包括朱自清自己的事儿,家里的事儿,朋友的事儿,社会的事儿,都似一位从容的学者在我面前讲述着那个年代,这番笔触是很难得读到的。

5. King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone by David Carey and John Morris
/《资本之王》—— 戴维·凯里 & 约翰·莫里斯
3 月读完

一本早就摆在 reading list 里的书,终于读完了原版。这是一部 Blackstone 的历史,也是小半个美国 PE 市场简史:a) 能否抓住整个市场的波荡起伏十分重要 – **vintage year as a beta**; b) 政策监管变化和必然结果 – 比如 corporate pension funds 监管的放松催生的 junk bond 和 PE 融资;Reagan tax cut 里根的减税 28% -> 20% top capital gain tax rate; c) 运气是需要的,也很难说是不是运气 – 比如 Blackstone 2007 年压着线完成的 IPO。虽说现在提 Blackstone 关注点都在 Schwarzman,但有两个极其重要的因素成就今天的 Blackstone:1. 另一位 cofounder Peter Peterson (今年 3 月去世,RIP) 的 mentorship;2. 合作共享 – 拉起 MBS 业务的 Larry Fink 等 (后来的 BlackRock),拉起 real estate 业务的 Jonathan Gray (WH ’92)。

Canada Housing Problems

Talks around Canada’s housing market have been surging – about its booming prices and about its looming risks.

The price side – directly shown by its pricing index from Statistics Canada – plotted below from Jan. 2006 – Oct. 2018.

Canada Housing Price Index | Source: Author, Statistics Canada

Toronto’ prices are the most wild in among Canada’s housing markets – nearly doubled in 39 month from Jan. 2014 to Apr. 2017.

Toronto home prices 2014 – 2017 | Source: Financial Post

The price itself is not actually something to worry about. But as FT argued, “House prices have raced ahead of wages for years, boosted by loose lending, low interest rates and lax controls on foreign money.” Similarly on Huffpost, “Toronto’s house price index doubled between 2011 and 2017, even as household incomes grew by single percentage points.”

And let’s take a look at the housing debt level – the risky side.

Bank of Canada said the two trillion dollars of debt is around 170% of disposable income.

I double checked with OEDC data here.

Here is a historical comparison –

and housing debt versus GDP – just passed 100% for 2017 Q2.

The regulator took actions to cool down the market.

The short-sellers/investors took theirs too.

Home Capital is at the center, Canada’s largest provider of home loans to the newly arrived and self-employed.

Home Capital Stock Price (C$) | Source: Bloomberg

In Jun. 2017, Warren Buffett’s investment vehicle Berkshire committed to acquire a 38.39% stake as part of a rescue package (C$2.4 billion, including C$400 million equity and C$2 billion credit line with 9% interest rate). The first tranche of equity investment acquired a 19.99% ownership.

However as the second tranche of equity investment wan’t approved, now in Dec. 2018, the updates came as Buffett would sell most of its stake and reduce ownership level to less than 10%.

Home Capital is under control and stabilized now.

A single crisis is easier to solve than a systematic problem between housing prices and local income.

 

Politics in Airline Boarding Process

Since 2017, three major airlines in US have made changes to their boarding process, in the face of different layers/tiers, ticket types and other privileges.

Here is a description of the mess before – “Under American’s old boarding call, Group 1 actually was the fifth group called for boarding, trailing the carrier’s elite frequent-fliers and first- and business-class customers who were subdivided into five groups of their own that all boarded earlier.”

 “Group 1 actually was the fifth group called for boarding”

What are the “new” procedures and how airlines value their customers?

American Airlines – 10 segments

Group Boarding pass type
ConciergeKey℠ members ConciergeKey℠
Group 1 First
Active duty U.S. military with military I.D.
(Business on a 2-class international plane)
Group 2 Executive Platinum
oneworld® Emerald℠
(Business on a 3-class plane)
Group 3 Platinum Pro
Platinum
oneworld® Sapphire℠
Group 4 Gold
oneworld® Ruby℠
AirPass
Premium Economy
Citi® / AAdvantage® Executive cardmembers
Travelers who bought Priority boarding
Group 5 (Preferred boarding) Main Cabin Extra (excluding Basic Economy)
Eligible AAdvantage® credit cardmembers*
Eligible corporate travelers**
Group 6 Group 6
Group 7 Group 7
Group 8 Group 8
Basic Economy to / from Europe
Group 9 Basic Economy within the U.S., Canada, Central America, Mexico & Caribbean

Delta Airlines – 7 segments

Pre-Boarding

Customers needing assistance or additional time to board, including families with car seats or strollers

Active Duty U.S. Military personnel with ID

Premium Boarding Zone

Delta One® customers
First Class customers
Delta Premium Select customers
Diamond Medallion® Members

Sky Priority Boarding Zone

Platinum Medallion® Members
Gold Medallion® Members
Delta Comfort+® customers
Flying Blue Platinum and Gold members
Virgin Atlantic Flying Club Gold members
Virgin Australia Platinum and Gold members
GOL Smiles Diamond members
SkyTeam® Elite Plus members

Zone 1

Silver Medallion® Members

Delta Corporate Travelers

Priority Boarding Trip Extra customers
Gold, Platinum and Reserve Delta SkyMiles® Credit Card Members
Flying Blue Silver members
Virgin Australia Velocity Silver members
GOL Smiles Gold members
Sky Team® Elite

Zone 2

Main Cabin Passengers

Zone 3

Main Cabin Passengers booked in T, X and V fares

Zone 4

Basic Economy Passengers (E)

United Airlines – 6 segments

Pre-boarding

  • Unaccompanied minors
  • Customers with disabilities
  • Active members of the military
  • United Global Services® members
  • Families traveling with children age 2 and younger
  • Premier® 1K® members

Group 1

  • Premier Platinum members
  • Premier Gold members
  • Star Alliance™ Gold members
  • Customers seated in premium cabins: United Polaris®, United First® and United Business®

Group 2

  • Premier Silver members
  • Star Alliance Silver members
  • Customers who have purchased Premier Access® or Priority Boarding
  • United℠ Explorer, Club, Presidential Plus℠ and Awards Cardmembers

Groups 3 – 5

  • Economy Plus®
  • United Economy®
  • Basic Economy*

* Customers who have purchased a Basic Economy ticket will be in the last boarding group, except for Premier members, Chase Cardmembers of qualifying cards and Star Alliance Gold members, who will still receive their priority boarding.

..

Just a reflection on the complicated business development efforts and corporate strategies… think about the internal slides behind the schemes