Unless we’re mistaken, Goldman has come up with its own “This is nuts” top ten. Decent effort:
1. Since the low in the global equity market on March 9, 2009, the MSCI The World index has risen roughly 180% in total return terms, generating an annualised return of a remarkable 20%.
2. 2013 was one of the strongest years on record for the equity markets. The US managed a price return of 30% and the Sharpe Ratio of the S&P 500 ranked in the 98th percentile since 1962.
3. Perhaps even more striking is that bond markets have continued to perform strongly. Since the 2009 low in equities, the JP Morgan GBI global bond index has risen 24%.
Alibaba this week…
The calm after Wednesday’s one-day storm is downright weird. No?
Eight minutes of wonder for the S&P 500.
Let’s call it the Alibaba indicator, with thanks to BofAML’s Thundering Word:
The S&P500 index peaked at 2019 roughly 8 minutes after the Sept 19th launch of the Alibaba IPO.
A competition. What is the portfolio with the greatest hope to value ratio?
To start you off, here are the top ten holdings of the Edinburgh Worldwide Investment Trust plc, managed by Baillie Gifford. (Click to enlarge):
Some clown’s made up a spoof investment pitch for Rocket Internet, the German e-incubator planning to float in Frankfurt next month at a valuation of something north of €6bn.
Alibaba has started trading and its current market valuation is about $227 billion. Yahoo! Inc., which currently owns a little more than 16 per cent of the Chinese conglomerate, is currently valued at just over $40 billion. Yahoo also owns a 35 per cent stake in publicly-traded Yahoo! Japan, which currently has a market cap of about $23 billion.
Let’s do some arithmetic to see how much Yahoo’s core business is currently worth: Read more
This of course is Alibaba, the Cayman e-commerce site. Click the image above for the SEC filing; click the image below for the corporate structure. Read more
Felix Salmon on the redundancy of banks, in Friday’s FT:
Today’s big Silicon Valley deals are not based on corporate synergies, or the amount that earnings per share will increase after the deal closes. They are not, therefore, based on the sort of thing that bankers can model. (Very few of the acquired companies have any earnings at all; some even lack revenues.)
This valuation will self destruct in ten, nine…
Snapchat is worth $10bn, according to Alibaba. The yet to list Chinese ecommerce company is in talks to inject a round of financing that would make the company worth as much as Dropbox and and Airbnb, reports Bloomberg. Read more
We’ve been worried about the lack of liquidity in the bond market for yonks. Some at the Fed (though not Janet Yellen) share the concerns, and have been talking about whether to add exit charges to bond funds to prevent a potential run on the market.
Now the Bank of England has weighed in, warning investors that they are paying more and receiving less when it comes to liquidity, particularly in bonds.
Here’s a few choice comments from the Bank’s Financial Stability Report today: Read more
Dubai stocks went bonkers last year, along with Qatar, distorting the performance of the (anyway tiny) frontier markets index.
Locals rediscovered their lust for equities, while foreigners were excited by a potential upgrade to emerging market status and the billions of dollars of inflows from index funds that would represent. In total the index more than tripled in two years.
In the past month it’s all gone wrong, and strategist Andrew Howell at Citi has a good reason why: the performance of Dubai, represented by the MSCI UAE index, looks very much like the out-of-control price inflation represented by the Nasdaq during the dotcom bubble. Read more
Back in September we calculated that the average London house had earned more in the previous year than its average occupants.
The difference then was small, a capital gain of £38,729 in the year to July, against a post-tax income of £38,688 in 2011, the last year for which the ONS has statistics.
Fast forward the best part of a year and your London house has had a raise, is flicking through the Audi catalog and considering exotic holidays. Read more
So you like the idea of a buy-to-let property empire but don’t have the cash, time, or expertise?
Fear not, because with the liberal application of crowdsauce, you too could become a landlord with as little as £500. And you’ll get a 5 per cent annual return from day one…
Come with us to the Northeast, where the bleeding edge of crowdfunding is to be found: Read more
There have been protests. There has been legal risk. There has been disruption. And there have even been questions about whether breaking all the rules is really all that innovative.
But Uber, the taxi app formed by Garrett Camp and Travis Kalanick in 2009, is heading for a funding round anyway, and it’s doing so at a proposed market value of $10bn. (Note to FT Alphaville selves — we must really get round to launching that Shut App!* idea we’ve had.)
Is that sort of valuation justified? Who knows. Read more
Apple, that ultra-secretive, profit maximising, cash hoarding, phone making, tax
dodging efficient maker of phones and stuff is supposed to be the sensible one. It sells actual things for a profit and is not known for pouring money down speculative drains.
But, as the FT’s Matt Garrahan and Tim Bradshaw revealed, it wants Beats Electronics for $3.2bn. Beats makes headphones, like Apple does, and, er, even longtime Apple analyst Gene Munster is scratching his head.
We are struggling to see the rationale behind this move. Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand’s sake (i.e., there are no non-Apple sub-brands under the company umbrella). Separately, we are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand.
Works by Degas, Renoir and Picasso failed to sell at a Sotheby’s auction in New York on Wednesday, in what the local paper called “another bumpy night at the spring auctions”…
According to officials there, Asian bidders managed to snap up $63.9 million worth of art, or roughly one-third of the evening’s $219 million total. Sotheby’s had estimated the sale would bring in $218.1 million to $317.9 million. The auction house offered 71 works, and of those, 21 failed to sell.
The mediocre results followed an unexciting night at Christie’s on Tuesday. That auction house managed to sell $285.9 million, above its low estimate of $244.5 million but not close to its high of $360.4 million.
Okay, maybe it’s because this particular FT Alphaville blogger has been safely quarantined in Geneva, Switzerland for the last two years where everything is frozen in time, and it’s all down to “London shock”, but it really does feel like you can’t walk three foot in the capital these days without bumping into a crane panorama that would make the Doozers of Fraggle Rock proud.
Case in point, the current view from outside FT Towers at One Southwark Bridge:
Tech stocks have become a little bit more modestly priced.
Virtual reality is more Mister Mxyzptlk’s department, and $2bn is not quite This is nuts territory.
But can you feel the LexCorp-style corporate governance, and ambition, here? Read more
That uber-growth business, washing machines…
Only 12 years to go till the “utopian society” drives up.
Interruption not inflection, says BoAML’s Michael Hartnett, who sees the beginning not the end of the fun.
in exchange for an aggregate of 183,865,778 shares of Parent’s Class A common stock (valued at $12 billion based on the average closing price of the six trading days preceding February 18, 2014 of $65.2650 per share (“Specified Price”)) and $4 billion in cash… In addition, upon Closing, Parent will grant 45,966,444 restricted stock units to WhatsApp employees (valued at $3 billion based on the Specified Price). Read more
A case of a market requiring medication, perhaps, rather than the other way round?
From the FT’s Arash Massoudi in New York and Andrew Ward in London… Read more
London prime property vendor finance, vignette #1:
Luxury property developer Christian Candy has lent more than £300m in the past year to wealthy London housebuyers, in a bid to profit from the banks’ withdrawal from the market, and aims to take his total lending to £1bn by the end of this year…
Last week he lent £25m for the purchase of a £35m private home in Knightsbridge, and he is now in talks to provide £100m for the purchase of a home in north London.
Google is spending maybe $400m on a was kid. From recode on Monday…
Google is shelling out $400 million to buy a secretive artificial intelligence company called DeepMind. Google confirmed the deal after Re/code inquired about it, but declined to specify a price. Based in London, DeepMind was founded by games prodigy and neuroscientist Demis Hassabis, along with Shane Legg and Mustafa Suleyman. This is in large part an artificial intelligence talent acquisition, and Google CEO Larry Page led the deal himself, sources said. According to online bios, Hassabis in particular is quite a talent, a child prodigy in chess who was later called “probably the best games player in history” by the Mind Sports Olympiad. DeepMind has only a landing page for a website where it describes its business as building learning algorithms for simulations, e-commerce and games. Profiles on LinkedIn indicate the company is about three years old. Read more
The Journal’s got themselves a billion-dollar start-up graphic… Read more