Democratic – there is no limit to how much they can take from government
Republican – there is no limit to how little they can give to government
where “they = voters”
It seems that the swing between two parties causes the constantly larger promises that are asymmetric in terms of what voters get – no one would promise more restrictive policies to gain votes.
See who is joining and their IPO targets –
Other tech companies include – Pinterest ~$15-20 bn, Robinhood ~$10 bn
A CB Insights report, a good summary.
Ohio is becoming the first state to accept crypto as tax payments on https://ohiocrypto.com/.
The move is made by Ohio State Treasurer Josh Mandel. Born in Sep. 1977, he had made several moves after being elected as Ohio State Treasurer in Dec. 2010, including OhioCheckbook.com that posts all state spending information on the internet for better government transparency.
The current cryptocurrency accepted is Bitcoin, with more to come. A third party cryptocurrency payment processor, BitPay, will serve between taxpayers and Ohio State Treasury, so that the former will pay crypto and the latter will receive dollar.
Although the State Treasurer himself is said to be an enthusiast of cryptocurrencies and blockchain, it might as well be seen as a state-level move to differentiate itself and embrace the future tech world. According to TechCrunch, Ohio has other moves to become tech-friendly including a technology hub forming in Columbus, home to one of the largest venture capital funds in the Midwest, Drive Capital. And Cleveland (the city once called “the mistake on the lake”) is trying to remake itself in cryptocurrency’s image with a new drive to rebrand the city as “Blockland”, etc. Columbus also reported last year that its Smart Columbus program had an expanded $417 million in resources to turn Columbus into the testing ground for intelligent-transportation systems.
Politics and future development is more interconnected than ever. Policy makers are becoming smarter and seeing/learning the tech future as others. “Policy infrastructure” played an important role in the past and will continue to do so. Each city/state may have a specialization and leveraging its hub effect. Blockchain is one of those “specializations” that many are going after. China and US are no different in terms of this strategy of development.
Moderna filed S-1 with SEC last Friday and will become the largest biotech IPO in history.
The record amount of raise ($500 million in current version of documents; I will expect more) just surpassed $421 million (HK$3.3bn) IPO by Innovent. In the past years, the typical size of the largest biotech IPO is around $200-300 million.
Since October, we have seen a series of large biotech IPOs that might also contribute to the money pulled from other biotech companies.
Here is the list of ever-increase IPOs in size since October:
– Guardant Health $238 million
– Allogene $324 million
– Innovent (in HK) $421 million
– Moderna (proposed) $500 million
Intense sub-planck undulations are seen as glimmers of distortions when zooming out, and are smoothed out on a higher level. Vice versa, seemingly flat world could be surprisingly dynamic if viewed in a sufficient close manner.
Fluctuations in prices within a short time frame, however dramatic, could be (at least partially) smoothed out in a longer period of time. Vice versa, more details or clues of changes could possibly be found behind the scene even if prices stay the same in a week/month/year.
While sub-planck variations are cancelling out with each other, some changes are constant and going in certain directions, although might be immaterial/unsensible on a daily basis – e.g. our universe is ever expanding.
Certain underlying trends (company, industry, economy, society, species, planet, etc.) are happening definitely in the long run. Trying to uncover those trends and making investments according to those should be an effective long term approach.
[This blog post is mainly focused on NASDAQ]
The market rout on 10/24 (NASDAQ Composite dropped 329.14 points to 7,108.40) made it the largest retreat so far this year, surpassing the previous 316-points loss merely 2 weeks ago (10/10).
While the 4.43% retreat is widely “touted” as the biggest one-day loss since August 2011, it’s also the 3rd largest daily point loss in NASDAQ history (the other two happened in 2000 during the dot-com bubble).
| Top 10 NASDAQ Largest Point Decrease as of 10/24/2018 | |
|---|---|
| Date | Point Change |
| 04/14/2000 | -355.49 |
| 04/03/2000 | -349.15 |
| 10/24/2018 | -329.13 |
| 10/10/2018 | -315.96 |
| 04/12/2000 | -286.27 |
| 02/08/2018 | -274.82 |
| 02/05/2018 | -273.42 |
| 04/10/2000 | -258.25 |
| 01/04/2000 | -229.46 |
| 03/27/2018 | -211.73 |
| Reference: NASDAQ Largest Point and Percentage Decreases in the NASDAQ Composite Index | |
However, in percentage wise, we could see NASDAQ’s 10 biggest single day decrease ranging from -11.35% to -7.23% (3 of which related to the 2008 financial crisis, 3 related to the dot-com crash, another 3 related to the 1987 crash).
“-4.43%” is not a big deal & that’s not how investors react if they are really panicking.
It’s crucial to incorporate inflation into analysis.
NASDAQ climbed above 5,000 in Mar. 2015, and it took another 7 weeks before it reached the dot-com bubble peak of 5048.61 (intra-day record was 5,132.52).
However, when we adjust for inflation, things are different.
Doing a simple math – U.S. CPI (urban, all items ex. food & energy) is 181.3 in 2000 (annual average) and 256.5 in 2018 (H1 average); so a 8,109.69 peak in August should be around 5,732 in 2000-price-level.
So NASDAQ Composite spent more than 18 years to grow 13.5% (from peak to peak), while fundamentally technology has gone through tremendous evolutions.
Similarly, WSJ reported in January this year that “Nasdaq Tops Inflation-Adjusted High [7269.89] from Dot-Com Boom”; and the chart below shows the inflation-adjusted path.
It’s a sure thing that companies can be over- or undervalued over time. But the benefits and growths are also real.
We have (unprecedented) iPhone in 2007 and (finally) massively produced Tesla Model 3 in 2018; we have 1 TB cloud storage for $9.99/month on Dropbox/Google Drive and unlimited storage of business account for $15/month on Box or $10/month on OneDrive.
Development in biotech is equally impressive. Sequencing cost dropped from ~$100 million per genome in early 2000s to ~$1,000 in 2016; and we are curing/curbing more types of cancer with unprecedented success rate and less harmful methods. Other advancements, for example those in neuroscience or surgical robots, are no less exciting.
And we can see their reflections in stock price (e.g. AAPL TSLA ILMN ISRG).
While the NASDAQ Composite in 2000s may be overvalued, comparatively in 2018 it is more supported by concrete revenue and earnings. Promises and expectations are still built in the price, but things are a lot better.
From a similar discussion in Mar. 2015 when NASDAQ reached 5,000 again after 15 years – P/E is not even close to insane levels.
When we call it a bubble (e.g. dot-com bubble), it is usually characterized by an increasing [absurdly large] difference between price and actual value created.
Revenue or earnings can rarely be doubled consecutively between regular quarters but prices can. That’s what happened in 1999 when Nasdaq Composite rose 85.59% (vs. 28.24% in 2017) and 13 large-cap stocks rose over 1000% (vs. Amazon +56%, Netflix +55%, Facebook +53%, Apple +46%, Alphabet +33% in 2017).
While a 10-fold rise in stock price is tough to catch up by revenues and earnings, I see a 50% rise doable and reasonable (e.g. could be a combination of 80% EPS growth + 20% P/E decrease, 50% EPS growth + P/E unchanged, or 25% EPS growth + 20% P/E increase), as long as the new P/E is justified by the future prospect.
I am not saying we shouldn’t anticipate a correction; but NASDAQ Composite hasn’t been super crazy neither.
I would like to conclude this post here by saying that – I believe in the future and the real benefits of tech [if correctly used]. Some areas might seem to be more over-promised than others, and some risks are looming on the horizon [to negatively impact global economy in a nontrivial manner], but true value creation should and will always be valued.
Appendix – what does S&P look like
[NOT for recommendation purposes; more for tracking purposes]
这件事已经想了有一阵子。昨天具体构思后，简单地做一个 5G 股权指数 (index)，并按着指数做这么一个组合，以 $1000／股为起始面值，以 10 月 22 日作为开始日期。
组合很简易，局限于在美股交易的股票。一开始纳入了 7 只，比重有些 arbitrary（更像是根据我现有的持有比例来的）。
这个组合的第一阶段主要是 5G 基础或者说 enabler；等 2-3 年后将调整为侧重因 5G 而爆发的应用。
成分股中分为两类 – 核心 (Core) 和 其它 (Others)，将主要跟踪核心成分股，目前 4 只（高通 康宁 Verizon AT&T）。
说一下主要成分股的主要的非 5G 因素。
高通 – 主要收入继续受到智能手机出货量压力和低价压力
康宁 – 主营业务之一的显示屏单价压力，LCD 需求增长放缓，新技术的份额扩大
Verizon 和 AT&T – 传统业务，媒体业务，尤其是 AT&T 的收购和债务
英特尔 – 服务器 data center 领域要接受 AMD 的挑战，再观察一下准备移到 Core
暂时有约 20% 的现金未分配留着添加调整。
留一个截图
感觉我对于 real estate 的兴趣超过了自己的认知。
上一篇里最明显的结论之一就是观光台对于高层商业建筑盈利的影响是巨大的。以游客为中心的 renovation 可以通过一小部分的改造撬动整个建筑的盈利水平。
Blackstone 就是这么做的。
2017 年 2 月，Blackstone 宣布了了 5 亿多美元的 Willis Tower 改造计划
1. 其中一个操作就是改造 Skydeck
Skydeck 的改造将涉及 2000 万美元：原本一层将扩展至两层 (102nd & 103rd)，将能同时容纳 1200 人（double）；外部将有一圈 open-air ledge walk；将打造一个位于楼外的 glass box，让游客体验用绳子从第 103 层降到第 102 层…
Blackstone 预计这些改动将提高 Skydeck 的年收入至 5000 多万美元 ($35.5m in 2016)
2. 更重要的改造来自于地面上的 retail + restaurant + entertainment 中心，地面3层，地下三层，一层 50k sqft，总共超过 300k sqft
Southeast corner –
Southwest corner –
3. 另一部分是写字楼 office space 的 renovation，包括电梯、lounge等，涉及约 150,000 sqft
Blackstone 的计划还是很被资本市场接受的，也带来的更高的写字楼入住率。
今年 4 月，Blackstone 从 Willis Tower 中又贷出 3 亿多美元（由于资产升值，以及对翻新计划的认可）；Blackstone 累计已贷出 13 多亿美元，超过其当初 15 年收购的成本。不考虑翻新计划支出的话，当初收购用的资金已全部回收，3 年。Blackstone 也更新了整体改造计划，提高预计投入至 6.68 亿美元 (from 5.46 亿美元；已花费 2 亿美元)。Willis Tower 的价值已接近 $1.8 billion。read more here。
Chicago 地标借着 consumer 的消费，将进化成新的庞然大物。
Square 和 Paypal 是两家相当有声音的 fintech 公司，Square Cash app 和 Venmo app 分别是它们旗下的 p2p 支付载体。
虽然早就关注，但今天才申请了他们各自的 debit card – Cash Card (by Square) 和 Venmo Card (by Paypal)。
Cash Card 是去年推出的，4 月宣布，5 月开始预定；Venmo Card 是今年 6 月正式推出。Cash Card 接入 Visa 网络，Venmo Card 接入 MasterCard 网络。
Debit card 不新鲜，背后要有银行。Cash Card 是 Sutton Bank，Venmo Card 是 The Bancorp Bank。从这种程度来看，相当于把很多监管问题外包，从而自己更多地服务消费者。
（PayPal 也有以 PayPal 为形象主题的 debit card 和 credit card，之前就有不少发卡的尝试，但这里想聚焦一下从 P2P 支付中走出来的 debit card，也就是 Venmo 和 Square Cash）
通过这种方式，Square 和 Paypal 尽可能地想成为新一代消费者的新一代的银行，尽管它们不是银行；在此之上把所有银行已有的、有实际用途的业务再重新做一遍。
再举一个例子就是贷款业务。Square Capital 通过 Celtic Bank，目前放贷大小为 $500 – $10k，Paypal Business Loan 通过 WebBank，目前放贷大小为 $5000 – 50k
还有 payroll/payouts 等
把传统的业务和需求，用新的方式呈现，把用户体验放到首位，这是一个 square 和 paypal 在赛跑的路上（square 隐有后来居上的势头）挑战传统玩家的故事。