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2022-05-21

Notes from https://www.wsj.com/articles/one-bad-choice-and-a-baby-formula-crisis-factory-shutdown-shortage-infant-cronobacter-fda-11653080306?mod=latest_headlines

  • Cronobacter sakazakii infection in infants
  • “one product-population problem”
  • Cronobacter typically causes disease only in the elderly and immunocompromised.
  • deadly complications like sepsis and meningitis
  • “swabs and sponges”
  • CDC urges mixing powdered formula with water heated to 158 degrees Fahrenheit before serving the cooled solution to an infant.
  • Only one state, Minnesota, tracks Crononbacter infections.

2022-05-20

Notes from https://www.npr.org/2022/05/19/1099748064/baby-infant-formula-shortages

  • infant formula industry
    • multi-billion dollar business
    • four companies control about 90% of the US market
  • The Abbott manufacturing facility in Sturgis, Michigan
    • Abbott Nutrition is the firm behind it
    • manufactured baby formula
    • supplied as much as one-fifth of all the infant formula in the USA.
    • The formula produced by this plant was suspected to be contaminated which led to a recall
    • They shuttered it
    • It s a critical supplier of specialized formula for infants with allergies and other health conditions that require a particular diet.
  • JBS
    • is a giant meatpacking company
    • was hit by a ransomware attack last year
  • FDA Commissioner Robert Califf
  • Formula makers are regulated by the federal government
  • The federal government is the biggest customer of formula makers.
  • About half of all formula sold in the U.S. is paid for by the Department of Agriculture, through its Special Supplemental Nutrition Program for Women, Infants and Children (WIC).
  • WIC contract
  • Abbott has the WIC monopoly in about two-thirds of all states
  • There are 17.5% tariffs on imported infant formula
  • it will take about two weeks to restart production at Abbott's Sturgis plant and another six to eight weeks to bring that plant to full capacity
  • market research firm IRI

Notes from https://www.reuters.com/business/sustainable-business/tesla-removed-sp-500-esg-index-autopilot-discrimination-concerns-2022-05-18/

  • S&P 500 ESG Index
    • weights
      • Apple 9.657%
      • Exxon 1.443%
    • SPDR S&P 500 ESG ETF is based on it
  • oil refiner Phillips 66 (PSX)
  • Tesla pioneered EVs and expanded into battery storage for electric grids and solar-power systems
  • Margaret Dorn, S&P Dow Jones Indices' head of ESG indices for North America
  • S&P Dow Jones Indices is majority-owned by S&P Global Inc. (SPGI)
  • Other big ESG ratings agencies
    • MSCI Inc
    • Morningstar Inc
  • Sustainalytics unit of Morningstar Inc

Notes from https://www.indexologyblog.com/2022/05/17/the-rebalancing-act-of-the-sp-500-esg-index/

2022-05-16

Notes from https://www.wsj.com/articles/warren-buffett-spends-big-as-stock-market-sells-off-11652589031?mod=hp_lead_pos6

  • Berkshire Hathaway bought 901,768 shares of Occidental Petroleum Corp (OXY)
  • The SEC requires all institutional investors that manage more than $100 million to file the form 13F within 45 days of the end of each quarter.
  • Cash is dry powder
  • YTD energy stocks are the best-performing group in the S&P 500
  • Chevron (CVX) is up 43% YTD
  • OccidentalPetroleum (OXY) is up 121% YTD
  • S&P 500 is down 16% YTD
  • Energy stocks are likely to be an inflation hedge

2022-05-15

Notes from https://www.indiatoday.in/world/story/sri-lanka-financial-economic-crisis-1930721-2022-03-29

  • low-return projects such as construction of ports, airport and coal power plants

Notes from https://www.wsj.com/articles/why-its-so-hard-to-keep-russian-diamonds-and-gold-out-of-the-u-s-despite-sanctions-11652526180?mod=hp_lista_pos2

  • U.S. and European sanctions have outlawed the sale of gold and diamonds from Russia.
  • Rep. Elissa Slotkin (D., Mich.) - proposed legislation further restricting Russian gold imports
  • processed diamonds and finished jewelry are often imported from countries such as China, India and Turkey
  • Russia contributes roughly a tenth of the global gold supply and 30% of the diamond supply
  • Russia has a gold stockpile of $140 billion worth
  • the World Gold Council
  • U.S. sanctioned polished Russian diamonds
  • EU has sanctioned Russian gold and jewelry
  • In April, U.S. sanctioned Alrosa
  • Alrosa is the giant Russian diamond producer responsible for 90% of the country’s total supply
  • Alrosa is a Russian miner (mining company)
  • “Stop Russian Gold Act,”
  • The gold industry mainly comprises of small businesses and a vast network of middlemen
  • Global Gold Transparency Initiative - GGTI
  • Big Western companies typically rely on U.K.-based “Responsible Jewellery Council” to certify gems and precious metals as ethical.
  • world’s leading jewelers - Gucci owner Kering SA, Pandora A/S and Cartier owner Compagnie Financière Richemont SA
  • Alrosa is one-third owned by the Russian state
  • Tiffany & Co. owner LVMH Moët Hennessy Louis Vuitton SE
  • U.S. jewelry store operator Signet Jewelers Ltd.
  • fully traceable gold typically costs 20% more

Notes from https://www.wsj.com/articles/behind-fake-account-issue-that-elon-musk-cited-in-pausing-twitter-deal-11652612403?mod=hp_lead_pos9

  • As of March 31, Twitter has 229 million daily active users.

Notes from https://www.bloomberg.com/news/articles/2022-05-15/-11-trillion-and-counting-global-stock-slump-may-not-be-over

  • the S&P 500 is down more than 13% from its high on March 29
  • Fewer than 30% of the benchmark’s members have hit a one-year low
  • the 14-day relative strength index
  • Defensive stocks are now in demand
  • slowing growth hammers economically sensitive cyclical sectors
  • Stoxx 600 Defensives Index
  • cyclical-versus-defensive relative performance
  • Nasdaq 100 now trades at about 20-times forward earnings

2022-05-13

Notes from https://www.wsj.com/articles/warnings-from-the-crypto-currency-crash-stablecoin-liquidity-terrausd-11652390321?mod=hp_opin_pos_1

article published date | 2022-05-12

  • $200 billion in crypto assets have blown up in 24 hours
  • stablecoin TerraUSD collapsed
  • Stablecoins are supposed to hold a fixed peg and let investors seamlessly trade crypto assets
  • TerraUSD is linked to another crypto currency - the token Luna
  • Examples of stablecoins - TerraUSD, Tether
  • Coinbase, the crypto exchange
  • Coinbase customers would be unsecured creditors in the event of a bankruptcy
  • Crypto market is $2.9 trillion in Nov 2021. It was $500 billion in Nov 2020.
  • junk bond prices are falling as concerns mount that some companies may struggle to roll over their debt
  • European Central Bank recently warned banks to hold extra capital against leveraged loans, which are sensitive to interest rates, to cover potential losses.
  • About $800 billion in leveraged loans in the U.S. were issued last year
  • Debt covenants and market discipline were already deteriorating before the pandemic
  • the oracles of the Eccles building

Notes from https://www.wsj.com/articles/crash-of-terrausd-shakes-crypto-there-was-a-run-on-the-bank-11652371839?mod=hp_lead_pos7

  • TerrsUSD swelled to $18 billion.
  • TerraUSD's sister cryptocurrency, Luna
  • TerraUSD, which is known by the ticker UST
  • Jim Greco, a partner at crypto quantitative investment firm F9 Research, was celebrating his birthday at Manhattan’s Le Bernardin
  • Anchor Protocol is a crypto bank created by developers at Terraform Labs
    • allows digital-currency investors to earn interest on their coins by lending them out
    • Anchor offered 20% returns on deposits of TerraUSD
  • Investors had deposited $14 billion of TerraUSD in Anchor as of late last week.
  • Terraform Labs - Mr. Kwon's firm
  • Luna lost nearly $20 billion in value
  • a central bank in an emerging-markets country might spend dollar reserves to protect its currency
  • Mr. Kwon, a Stanford University graduate who worked at Apple Inc. and Microsoft Corp.
  • “My dearest creation named after my greatest invention.”
  • Examples of stablecoins - TerraUSD, tether, and USD Coin

2022-05-12

Notes from https://www.bloomberg.com/news/articles/2022-05-11/terra-stablecoin-rescue-efforts-struggle-to-win-investor-support?srnd=premium-asia

  • Jump Crypto is an affiliate of Jump Trading LLC.

Notes from https://www.bloomberg.com/news/articles/2022-05-11/crypto-billionaires-vast-wealth-destroyed-in-weeks-amid-turmoil?srnd=premium-asia

  • Coinbase Global Inc. founder Brian Armstrong
  • Coinbase, the largest US cryptocurrency exchange
  • Changpeng Zhao, the CEO of Binance
  • Binance, closely held
  • Tyler and Cameron Winklevoss, co-founders of crypto exchange Gemini
  • Sam Bankman-Fried, CEO of crypto exchange FTX
  • Armstrong owns 16% of Coinbase and controls 59.5% of its voting shares
  • Ehrsam has a 4.5% stake in Coinbase and controls 26% of its voting stock

Notes from https://www.bloomberg.com/news/articles/2022-05-11/coinbase-gives-256-billion-reminder-about-agonies-of-bankruptcy?srnd=premium-asia

  • Coinbase Global Inc. is the biggest US crypto exchange
  • Coinbase was custodian for $256 billion of customer money on March 31
  • Adam Levitin, a Georgetown University law professor
  • automatic stay imposed on creditors
  • General unsecured creditors are the last to recover money. Ahead of them would be senior debtholders

2022-05-05

Notes from https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504a.htm

  • Fed raised the target range for the federal funds rate to 3/4 to 1 percent
  • Fed will reduce its holdings of Treasury securities and agency debt and agency MBS on June 1

Notes from https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm

  • System Open Market Account (SOMA)
  • For Treasury securities, the cap will initially be set at \$30 billion per month and after three months will increase to \$60 billion per month.
  • For agency debt and agency MBS, the cap will initially be set at \$17.5 billion per month and after three months will increase to \$35 billion per month.

Notes from https://www.wsj.com/articles/fed-approves-half-point-interest-rate-rise-ratcheting-up-its-inflation-fight-11651687201

  • Fed will shrink its balance sheet by allowing bonds to mature without reinvesting the proceeds into new securities rather than by selling them in the open market.
  • Fed will allow up to \$30 billion in Treasurys and \$17.5 billion in mortgage bonds to roll off every month in June, July and August.
  • After that, they will allow \$60 billion in Treasurys and \$35 billion in mortgage securities to run off every month.

2022-05-02

Notes from https://investors.publicstorage.com/news-events/press-releases/news-details/2022/Public-Storage-Provides-Update-in-Relation-to-Agreed-Acquisition-of-PS-Business-Parks-by-Affiliates-of-Blackstone-Real-Estate/default.aspx

  • Public Storage (PSA)
    • holds 41% common equity interest in PS Business Parks (PSB)
      • 7.2 million common shares
      • 7.3 million limited partnership units
      • it will receive $2.7 billion of cash (= (7.2 + 7.3) * 1e6 * \$187.50 = \$2.7 billion)

Notes from https://www.wsj.com/market-data/quotes/PSB

  • PS Business Parks (PSB)
    • shares outstanding = 27.61 M

Notes from https://www.wsj.com/articles/blackstone-to-buy-ps-business-parks-in-7-6-billion-deal-11650894308

  • Blackstone (BX) to buy PS Business Parks (PSB)
    • for $7.6 billion
    • includes debt
    • BX will pay $187.50 cash for each PSB share
    • premium = 15% over the vwap of PSD's stock over the last 60 days
    • expected to close in Q3 2022
  • PS Business Parks (PSB)
    • a real-estate investment trust
    • owns and operates industrial and low-rise suburban offices and business parks, mostly in California, Miami, Texas and Northern Virginia
    • As of 2022-03-30, it owned
      • 96 properties with 4,900 tenants
      • 800 residential units
    • Public Storage (PSA) owns 26% of PSB's common stock (= 7.2 / 27.61)
  • Last week, Blackstone (BX) bought American Campus Communities for $12.8 billion

2022-04-28

Notes from https://www.bloomberg.com/news/articles/2022-04-28/fidelity-to-create-12-000-jobs-building-on-its-hiring-spree?srnd=premium

  • Fidelity
    • Boston-based fund manager
    • Founded in 1946
    • Closely-held
    • Controlled by the Johnson family
    • In last year: revenue = \$24 billion, operating income = \$8.1 billion
    • Worth $74.8 billion
    • 33.5 million brokerage accounts by Q1 end
    • Currently has 57,000 staff and will add 12,000 by Q3 end
    • discretionary assets of $4.2 trillion
    • Kirsten Kuykendoll, head of talent acquisition at Fidelity
    • Fidelity Diversifying Solutions is focused on liquid alternatives – products that offer regular investors access to hedge-fund like strategies
  • Charles Schwab Corp.
    • has 34,000 staff

Notes from https://www.bloomberg.com/news/articles/2022-04-28/lilly-says-obesity-drug-helps-patients-lose-about-20-of-weight?srnd=premium

  • Tirzepatide
    • Eli Lilly & Co.’s obesity drug
    • an average loss of about 15% of body weight, or 35 pounds, on a low dose of the drug
    • an average loss of about 21% of body weight, or 50 pounds, on the highest dose of the drug
    • Injected once a week
    • Works by mimicking the effects of two gut hormones called GLP-1 and GIP, suppressing appetite and potentially increasing energy expenditure
    • side effects included nausea, diarrhea and vomiting
    • 72-week research trial enrolled 2,539 participants who are either overweight or obese accompanied by another medical condition
  • Wegovy
    • a similar drug from Novo Nordisk A/S
    • average weight loss of about 15%
    • can bring in about $3.5 billion by 2025
  • Nearly three-quarters of U.S. adults have measurements of body mass in the obese or overweight range

Notes from https://www.bloomberg.com/news/articles/2022-04-28/after-twitter-elon-musk-jokes-about-buying-coca-cola-to-put-the-cocaine-back?srnd=premium

  • Musk’s net worth $253 billion
  • Jeff Bezos net worth $162 billion.

2022-04-27

Notes from https://www.wsj.com/articles/what-are-i-bonds-everything-you-need-to-know-to-earn-nearly-10-interest-11650543039

  • Americans snatched up nearly \$11 billion in Ibonds over the past six months, compared with around \$1.2 billion during the same period in 2020 and 2021, according to Treasury Department records.

Notes from https://www.bloomberg.com/news/features/2021-04-08/how-bill-hwang-of-archegos-capital-lost-20-billion-in-two-days?srnd=premium

  • Losses from Archegos implosion
    • Credit Suisse Group AG lost $4.7 billion
    • Nomura Holdings Inc. lost $2 billion.
    • Mitsubishi UFJ Financial Group Inc. lost $300 million
    • Goldman, Deutsche Bank AG, Morgan Stanley, and Wells Fargo - no losses.
  • penthouse overlooking Manhattan’s Central Park
  • hillside chalet at the Yellowstone Club
  • private jets
  • a “Tiger cub,” an alumnus of Tiger Management, the hedge fund powerhouse that Julian Robertson founded
  • ViacomCBS, GSX Techedu, and Shopify
  • Media conglomerates ViacomCBS and Discovery
  • four Chinese stocks: GSX Techedu, Baidu, Iqiyi, and Vipshop
  • arbitrage on collateralized bundles of obscure financial contracts
  • popular themes such as cord cutting, virtual education, and online shopping
  • family, business, and charity - the Grace & Mercy Foundation
  • Sung Kook Hwang immigrated to the U.S. from South Korea in 1982 and took the English name Bill.
  • Tiger Management, run by Julian Robertson, became one of the first widely famous hedge funds. Many former Tiger employees went on to open their own shops. Hwang’s onetime colleagues at Tiger Management include: Andreas Halvorsen, Viking Global Management; Philippe Laffont, Coatue Management; and Chase Coleman, Tiger Global Management
  • a key lesson: to live with losses
  • Tiger closed in 2001
  • investing only in Korean, Japanese, and Chinese companies that generated all of their revenue domestically
  • a group called Liberty in North Korea, or Link, that has helped about 1,300 North Koreans escaping the regime.
  • the Financial Services Ministry, a group affiliated with New York’s Redeemer Presbyterian Church that connects Christians in finance
  • Paul Gojkovich, a former director at Merrill Lynch
  • U.S. rules prevent individual investors from buying securities with more than 50% of the money borrowed on margin. No such limits apply to hedge funds and family offices.
  • 2x leverage = $1 million borrowed for every $1 million of capital
  • In a typical swap agreement, a bank gives its client exposure to an underlying asset, such as a stock. While the client gains—or loses—from any changes in price, the bank shows up in filings as the registered holder of the shares.
  • Cursing was not tolerated in Archego's offices. It is a policy borrowed from Robertson’s Tiger.
  • Uniqlo, the fast-fashion brand, because it’s cheap and comfortable
  • hedge fund running a similar strategy would lever up two to two-and-a-half times
  • a portfolio short, a broad bet against the stock market, often made through an options or futures contract on the S&P 500.

2022-04-26

Notes from https://www.bloomberg.com/news/articles/2022-04-25/musk-s-21-billion-mystery-where-will-he-get-cash-for-twitter?srnd=premium

  • total
    • $21 billion equity portion
      • personally guaranteed by Musk
    • $13 billion in bank financing
      • secured by Twitter
    • $12.5 billion margin loan
      • backed by a pledge of some of Elon Musk's $170 billion Tesla Inc. stake
  • $54.20 per share of Twitter
  • Musk
    • net worth $257 billion
    • $3 billion in cash
  • Private U.S. companies are generally limited to fewer than 2,000 shareholders
  • Dorsey’s stake in Twitter is worth almost $1 billion

Notes from https://www.bloomberg.com/news/articles/2022-04-26/bezos-asks-will-musk-s-twitter-deal-disrupt-tesla-in-china?srnd=premium

  • About half of Tesla's cars sold globally last year were produced at its plant in Shanghai
  • Jeff Bezos owns the Washington Post
  • Twitter is banned in China
  • Tesla has boomed in China due to tax breaks, cheap loans and the green light to wholly own its domestic operations.
  • Alibaba Group Holding Ltd. and JD.com Inc. - Amazon's competitors in China

2022-04-21

Notes from https://www.bloomberg.com/news/articles/2022-04-21/musk-is-said-to-vet-potential-equity-partners-for-twitter-bid?srnd=premium

  • Apollo Global Management Inc., Blackstone Inc., Brookfield Asset Management Inc., and Vista Equity Partners

2022-04-19

Notes from https://www.wsj.com/articles/blackstone-bets-on-campus-housing-with-13-billion-acquisition-11650366000?mod=hp_lead_pos2

  • American Campus Communities Inc.
    • the largest publicly traded owner and developer of student housing in the U.S.
    • also known as ACC
    • Austin, Texas-based
    • owns 166 buildings in cities and college towns across the U.S.
    • About a quarter of its properties are on campus
  • There is relatively little new student-housing construction
  • Big investors such as Blackstone and Brookfield Asset Management Inc.
  • Nadeem Meghji, Blackstone’s head of real estate for the Americas

Notes from https://www.bloomberg.com/news/articles/2022-04-19/russia-touts-swift-alternative-but-will-keep-its-members-secret?srnd=premium

  • Bank of Russia Governor Elvira Nabiullina
  • the central bank will no longer publish quarterly data on the schedule for repayments of foreign debt

Notes from https://www.bloomberg.com/news/articles/2022-04-19/putin-calls-time-on-foreign-listings-in-fresh-blow-to-tycoons?srnd=premium

  • Russia’s richest man, Vladimir Potanin
  • steel billionaires Vladimir Lisin and Alexey Mordashov
  • MMC Norilsk Nickel PJSC and Lukoil PJSC, registering depository receipt programs in New York, London and Frankfurt.
  • Lukoil Chairman Vagit Alekperov
  • Since the invasion of Ukraine on Feb. 24, trading in depository receipts of Russian companies has been frozen by foreign bourses.

2022-04-18

2022-04-06

Notes from https://www.bloomberg.com/news/articles/2022-04-06/how-a-russian-oligarch-s-17-billion-fortune-reached-an-off-campus-lsu-dorm?srnd=premium

  • Viktor Vekselberg
    • $16.6 billion
    • invested in Arlington Cottages, an off-campus apartment complex for Louisiana State University (LSU)
      • 732-bed complex
      • built in 2016
      • was appraised at $63.6 million
      • financed with a $44.1 million loan
      • KeyBank NA, the loan’s servicer
      • features a large pool surrounded by palm trees and cabanas
      • facilitated by the investment firm Bracken Capital
    • has a 8-meter (256-foot) superyacht, called Tango valued at $100 million
    • Cyalume Technologies, a Florida-based maker of chemical lighting solutions
    • Odyssey Online, a publishing platform popular with college students
  • Coastal Ridge Real Estate Partners, an investment firm overseeing $3.5 billion of apartments and student housing

Notes from https://www.bloomberg.com/news/articles/2022-04-06/jetblue-bid-for-spirit-is-driven-by-hunger-for-stealth-asset?srnd=premium

  • JetBlue, Chief Executive Officer Robin Hayes
  • the four biggest U.S. carriers control about 80% of the domestic market
  • Airbus customers face a wait of two to three years for A320 delivery slots

2022-04-05

Notes from https://www.bloomberg.com/news/articles/2022-04-05/treasury-cuts-off-russian-reserves-in-the-u-s-as-war-drags-on?srnd=premium

  • Energy exports are set to hand President Vladimir Putin a $321 billion windfall this year if the commodities continue flowing.
  • Russia had foreign-currency and gold reserves of about $604 billion as of March 25.

2022-04-04

Notes from https://www.bloomberg.com/news/articles/2022-04-04/elon-musk-s-passive-stake-in-twitter-belies-his-big-influence?srnd=premium

  • Shareholders who intend to remain “passive” – those who don’t seek to influence or change control of a company – file a shorter form with the U.S. Securities and Exchange Commission, called a 13G.
  • Those angling for board seats or seismic shakeups typically file a longer and more in-depth form, a 13D, within 10 days of buying their stake.
  • A 13D requires more disclosure – shareholders have to say what their plans are, and how they’re financing the purchase of the stock.
  • The rule applies to anyone acquiring 5% or more of a public company’s stock.
  • Musk announced his 9.2% stake in Twitter by filing the 13G
  • Elon Musk and Jack Dorsey are friends
  • Musk has 80 million followers on Twitter
  • Unlike Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Snap Inc., Twitter’s founders don’t have special voting control over its future
  • Jared Birchall, the head of Elon Musk's family office

2022-04-01

Notes from https://www.bloomberg.com/news/articles/2022-04-01/russian-bond-arbitrage-is-minting-near-guaranteed-profits?srnd=premium

  • relative-value trade
  • A negative-basis trade involves buying beaten down government or corporate bonds along with corresponding credit-default swaps, which insure the debtholder in the event of non-payment.
  • pay out at par quoted recently at 80 cents on the dollar
  • Rob Citrone’s $2.6 billion Discovery Capital Management
    • bought long-dated Russian government bonds at about 20 cents on the dollar, while also hedging with one-year CDS at a price of around 60 cents
    • position accounts for a couple percentage points of Discovery’s portfolio
  • Aurelius Capital Management, GoldenTree Asset Management and Silver Point Capital
    • have been piling into Russian markets by snapping up corporate bonds
  • H2O Asset Management has been adding to its Russian debt holdings
  • distressed-debt veterans - a group known for its combative personalities and aggressive tactics
  • Volumes in Russian corporate bonds soared to their highest levels in two years last month
  • trading of Russian credit-default swaps has surged, dwarfing other single-name contracts
  • Bond and CDS packages were being offered by sales desks for as much as 95 cents on the dollar
  • Marathon Asset Management’s Bruce Richards
  • half of Russia’s foreign-exchange reserves are frozen
  • Clearstream, one of the biggest clearinghouses in the world
  • Jay Newman, the hedge fund veteran behind Elliott Management’s 15-year battle with Argentina following that nation’s default
  • Specialist investors, crossover investors
  • hedge-fund consultant Macro Intelligence 2 Partners
  • setting up offshore structures in order to buy Russian assets

2022-03-27

Notes from
https://www.berkshirehathaway.com/letters/2021ltr.pdf
Warren Buffett's 2021 letter to Berkshire Hathaway's shareholders

  • Charlie and I are not stock-pickers; we are business-pickers.
  • In 2021, Berkshire's U.S.-based “infrastructure” assets are $158 billion
  • In 2021, Berkshire paid $3.3 billion in federal income taxes.
    • This is roughly $9 million a day.
  • Compare this to $402 billion which is the total corporate income-tax receipts as reported by the U.S. Treasury.
  • “I gave at the office”
  • In 1955, Berkshire Fine Spinning and Hathaway Manufacturing agreed to merge their businesses.
  • Both of them are venerable New England textile companies
  • Fall River (Berkshire) and New Bedford (Hathaway)
  • The New England textile industry had silently entered an extended and non-reversible death march.
  • Berkshire's insurance float is \$147 billion. It increased by \$9 billion last year. In the past two years, it increased by 25%.
  • Ajit Jain was hired in 1986.
  • Marmon has more than 100 individual business operations, ranging from the leasing of railroad cars to the manufacture of medical devices.
  • Berkshire owns 5.55% of Apple, up from 5.39% a year earlier.
  • Each 0.1% of Apple's 2021 earnings amounted to $100 million.
  • In 2021, Apple paid $785 million of dividends to Berkshire.
  • BNSF had earnings of $6 billion in 2021. This figure is calculated after interest, taxes, depreciation, amortization and all forms of compensation.
  • Bull markets breed bloviated bull
  • BHE earned $4 billion in 2021.
    • Berskhire purchased BHE in 2000. At that time it was earning $122 million.
    • Berkshire owns 91.1% of the company.
    • BHE's website https://brkenergy.com/
  • David Sokol and Greg Abel
  • Berkshire’s two long-time investment managers, Todd Combs and Ted Weschler.
    • they both manage $34 billion
  • Pilot Corp., a leader in travel centers
  • Berkshire has $144 billion of cash and cash equivalents
    • Of this, $120 billion is held in U.S. Treasury bills with maturity < 1 year. This is 0.5% of publicly-held U.S. national debt.
    • Berkshire will always hold more than $30 billion of cash and cash equivalents
  • Warren Buffett keeps 80% of his net worth in equities but he prefers it to be 100%.
  • Examples of productive investments - stocks, apartments, farms, oil wells
  • During the past two years, Berkshire repurchased 9% of the shares that were outstanding at yearend 2019 for a total cost of $51.7 billion.
  • As of February 23, 2022, since yearend Berkshire repurchased additional shares at a cost of $1.2 billion.
  • Paul Andrews died last year. He was the founder and CEO of TTI, a Fort Worth-based subsidiary of Berkshire.
  • purchasing agent
  • distribute small electronic components
  • TTI now employs 8,043
  • John Roach - a mutual friend of Paul Andrews and Warren Buffett
  • Deb Bosanek - assistant of Warren Buffett
  • Matt Rose, CEO of BNSF
  • “secrets” are catnip to kids
  • the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.

2022-03-21

Notes from https://www.bloomberg.com/news/articles/2022-03-21/china-plane-crash-update-132-people-on-boeing-737-feared-dead?srnd=premium

  • the Civil Aviation Administration of China
  • China Eastern flight
  • Spirit AeroSystems Holdings Inc.,
    • SPR
    • manufactures about 70% of the 737 Max’s frame for Boeing
    • Supplier
  • India’s Directorate General of Civil Aviation (DGCA)
  • India DGCA Chief Arun Kumar
  • Air India Express is the low-cost overseas unit of Air India Ltd.,
  • Air India Express and SpiceJet Ltd. operate 737 jets.
  • Vistara is the local affiliate of Singapore Airlines Ltd.
  • Vistara operate some 737 aircraft previously used by now-defunct Jet Airways India Ltd.
  • Aviation Safety Network
  • Boeing 737-800 NG model
    • NG = Next Generation
    • best safety records among all aircraft
    • 11 fatal accidents out of more than 7,000 planes delivered since 1997
    • There are 4,502 Boeing 737-800 NGs in service globally, including 950 in the U.S.
  • Boeing 737 Max was subjected to a global grounding after two deadly crashes
  • The British Airline Pilots Association (BALPA)

2022-03-09

Notes from https://www.wsj.com/amp/articles/david-bennett-the-patient-who-received-a-pig-heart-dies-two-months-after-transplant-11646842067?mod=hp_lead_pos13

  • University of Maryland Medical Center in Baltimore
  • xenotransplantation - the transplantation of an organ between two species
  • Roughly 106,000 people are on the wait list for organ transplants
  • U.S. Department of Health and Human Services’ Organ Procurement and Transplantation Network
  • Human heart valves are regularly replaced with ones from pigs.
  • Pig's organs are similar in size to humans’ and also have large litters

Notes from https://www.bloomberg.com/news/articles/2022-03-08/oil-pushes-higher-after-u-s-escalates-russia-sanctions-with-ban?srnd=premium

  • Iraqi Oil Minister Ihsan Abdul Jabbar Ismaael
  • The International Energy Agency recently said that it will release 63 million barrels of crude and products
  • OPEC+ produces 400,000 barrel-a-day
  • U.S. distillates inventories

Notes from https://www.bloomberg.com/news/articles/2022-03-03/blackrock-suspends-purchases-of-russian-securities-across-funds

  • BlackRock
    • is pressing index providers to remove Russian securities from broad-based benchmarks
    • AUM at the end of 2021 is more than $10 trillion
  • Russian securities account for less than 0.01% of client assets, mostly in index portfolios
  • Rich Kushel, head of the portfolio management group
  • Salim Ramji, global head of iShares and index investments
  • Polymetal International Plc
    • precious-metals miner
    • based in St. Petersburg, Russia
    • plunged 86% this year
    • will be removed from the FTSE 100 index as of March 21

Notes from https://www.bloomberg.com/news/articles/2022-03-09/blackrock-hedge-fund-raised-its-russia-bet-suffered-record-loss?srnd=premium

  • BlackRock’s Emerging Frontiers Fund
    • AUM at the end Jan 2022 is $960 million
    • down 7% ytd
    • Sam Vecht is the head of the team that manages the fund
      • He is the head of the emerging Europe and frontiers team
      • That team is within the fundamental active equity division
      • That division is part of BlackRock’s Active Equities Group
    • It currently has zero exposure to Russia
    • The Emerging Frontiers fund has never lost money in a full year since launching in Sept. 2011
  • BlackRock halted purchases of Russian securities across its actively managed and index funds effective Monday, Feb 28th.

2022-03-03

Notes from https://www.bloomberg.com/news/features/2022-02-28/which-u-s-european-companies-are-pulling-out-of-russia-after-ukraine-invasion?srnd=premium

  • Russia’s largest foreign investor, BP Plc
  • state-controlled Rosneft
  • BP announced on Sunday that it would exit its 20% stake in Rosneft. This result in a $25 billion write-off and cut its global oil and gas production by a third.
  • Shell owns 50% of the Salym Petroleum Development, which last year earned the company $700 million of adjusted earnings.
  • state-controlled Gazprom
  • Sakhalin-II liquefied natural gas facility
  • Nord Stream 2 pipeline project
  • Kwasi Kwarteng, the U.K. business secretary
  • Shell Chief Executive Officer Ben van Beurden
  • Equinor ASA is Norway’s biggest energy company and majority owned by the state
  • France’s TotalEnergies SE is involved in major liquefied natural gas projects in Russia
  • Norway’s sovereign wealth fund is the largest in the world

2022-03-02

Notes from https://www.bloomberg.com/news/articles/2022-03-02/biggest-crypto-exchange-says-blocking-all-russians-unethical?srnd=premium

  • Binance - world’s largest cryptocurrency exchange
  • other large cryptocurrency exchanges - Kraken, Coinbase

2022-03-01

2022-02-25

2022-02-22

Notes from https://www.bloomberg.com/news/articles/2022-02-22/mortgage-businesses-seen-laying-off-thousands-as-volume-drops?srnd=premium

  • The number of people working as brokers for mortgages and other kinds of loans is a proxy for total home lending employment.
  • LoanDepot Inc. is one of the largest lenders to consumers outside of the banking sector in the U.S.
  • Mortgage lender Homepoint Capital
  • Better.com, an online mortgage lender
  • The credit rating for the average borrower whose loan is bundled into a mortgage bond backed by Fannie Mae or Freddie Mac fell to 733 in January from 750 a year earlier
  • FICO scale goes from 300 to 850
  • Mortgages for home purchases can take longer to process than refinancings
  • For a purchase, the underwriter needs to evaluate new appraisal documentation, and look at down payments and other moving costs.
  • Purchase loans = loans for home purchases
  • United Wholesale Mortgage is one of the biggest mortgage wholesalers in the U.S.
  • Home loans to borrowers that can’t document income and therefore don’t qualify for mortgages backed by government-sponsored enterprises like Fannie Mae are known as “non-qualified mortgages”
  • Non-QM take longer to underwrite.

Notes from https://www.credit.com/blog/what-is-a-prime-vs-subprime-credit-score-189867/#:~:text=Scores%20of%20620%20to%20799,distribution%20among%20United%20States%20consumers.

  • Scores of 620 to 799 are usually considered prime. Scores below 620 are subprime.

2022-02-21

Notes from https://www.cnbc.com/2022/02/20/massive-credit-suisse-leak-reportedly-reveals-possible-criminal-ties-among-18000-accounts.html

  • Credit Suisse is the second-biggest Swiss bank
  • OCCRP - Organized Crime and Corruption Reporting Project

2022-02-18

Notes from https://www.wsj.com/articles/russia-ukraine-putin-nato-11643121821

  • Nord Stream 2 is a natural-gas pipeline that runs from Russia to Germany.
  • The pipeline is 764-mile long.
  • U.S. thinks that the pipeline will strengthen Russia’s grip on the European energy market and weaken Ukraine.
  • Germany is a NATO member.
  • Germany is the world’s biggest buyer of Russian gas.
  • Germany draws more than half of its gas supply from Russia
  • German Chancellor Olaf Scholz

2022-02-14

Notes from https://www.bloomberg.com/news/articles/2022-02-14/morgan-stanley-s-wilson-sees-war-a-polar-vortex-risk-to-stocks?srnd=premium

  • Michael Wilson
    • Morgan Stanley’s chief U.S. equity strategist
    • one of Wall Street’s most vocal bears

2022-01-19

Notes from https://www.bloomberg.com/news/articles/2022-01-18/stocks-set-to-extend-drop-amid-higher-bond-yields-markets-wrap

  • Upbeat earnings from Morgan Stanley, UnitedHealth Group Inc. and Procter & Gamble Co.

Notes from https://www.bloomberg.com/news/articles/2022-01-19/blackrock-alumni-have-a-new-gameplan-to-disrupt-junk-debt-etfs?srnd=markets-vp

  • Ben Johnson, director of global ETF research at Morningstar Inc
  • AUM in U.S. fixed-income ETFs is around $1.3 trillion
  • AUM in stock ETFs is around $5.6 trillion

Notes from https://www.bloomberg.com/news/articles/2022-01-19/schwab-ceo-sees-brokerage-of-the-future-looking-more-like-uber?srnd=markets-vp

  • “Charles Schwab Corp/The”
    • CEO = Walt Bettinger
      • He is 61 years old
    • ticker = SCHW
    • 50-year-old firm
    • more than $8 trillion of client assets
    • acquired TD Ameritrade for $26 billion
    • relocating to Westlake, Texas, from San Francisco
    • investment-services industry
      • does SCHW come under this industry?
  • Uber, DoorDash, Amazon
  • Thinkorswim

2022-01-14

Notes from https://www.bloomberg.com/news/articles/2022-01-14/blackrock-s-assets-pass-10-trillion-for-the-first-time

  • Current AUM is $10 trillion
  • It has a chart that shows Blackrock's AUM by fiscal year; from FY2011 through FY2021.
  • S&P 500 climbed 27% in 2021.
  • AUM in actively managed funds = $2.6 trillion. The actively managed funds include ETFs and mutual funds.
  • AUM in alternatives business = $265 billion. The alternatives business includes hedge funds.

Notes from https://www.bloomberg.com/news/articles/2022-01-14/cathie-wood-outflows-grow-as-diehard-fans-face-biggest-ever-test?srnd=premium

  • Cathie Wood’s flagship ARK Innovation ETF (ARKK)
  • ARK
    • 9 ETFs with current AUM $25 billion
    • was founded in 2014
    • investment horizon = 5 years
  • ARK Genomic Revolution ETF (ARKG)
  • ARK Israel Innovative Technology ETF (IZRL)
  • The settlement schedule for the products mean that flow data arrives with a one-day lag.

2022-01-05

Notes from https://www.bloomberg.com/news/articles/2022-01-05/td-bank-to-sell-bonds-as-financial-companies-tap-market-en-masse?srnd=markets-vp

  • TD Bank = Toronto-Dominion Bank
  • Scott Kimball - head of investments for U.S. fixed income at BMO Global Asset Management

2022-01-04

Notes from https://www.bloomberg.com/news/articles/2022-01-04/charlie-munger-s-daily-journal-nearly-doubles-alibaba-holding?srnd=markets-vp

  • Daily Journal Corp., a newspaper and software business
  • The Chairman of its Board of Directors is Charlie Munger

Notes from https://www.bloomberg.com/news/articles/2022-01-04/u-s-schools-close-in-droves-as-omicron-drives-staff-shortages?srnd=premium

  • In New Jersey, 30% of schools had switched to virtual learning as of Jan. 3.
  • Among 1.4 million K-12 students, infections have more than doubled in three weeks, to 11 per 1,000 pupils.
  • Staff positives have quadrupled, to 24 per 1,000, according to state data.

Notes from https://www.bloomberg.com/news/articles/2022-01-04/denmark-dumps-7-billion-in-kroner-on-fx-market-to-protect-peg?srnd=markets-vp

  • Denmark’s central bank sold 47 billion kroner ($7.1 billion) last month to protect its euro peg, the biggest monthly currency intervention to weaken the krone in seven years.
  • With the sale, Denmark’s foreign currency reserves jumped to 529.8 billion kroner at the end of December 2021.
  • The bank uses currency interventions to steer the krone in a tight band to the euro and changes its interest rates when those interventions become too great.
  • Its benchmark deposit rate is already at minus 0.6%.
  • Denmark has had negative rates longer than any other country.
public/sotm/reading_2022.txt · Last modified: 2022/05/21 12:49 by raju