In a piece from Dealbook written by Peter Lattman and Eric Lichtblau, the article writes about a lawsuit against PEs for colluding on some of the biggest deals in the past few years. The antitrust civil lawsuit was filed by former shareholders against 11 of the largest private equities (e.g. Blackstone , KKR , Bain) who claim that their "anti-competitive behaviors" had cost them higher bids. E-mail exchanges between executives were also used as evidence for cooperation between the funds.
This piece in DealBook written by Steven Davidoff exposes how WS execs profited (even more) from the financial crisis. During this period, execs and management were prevented from receiving bonuses due to TARP restrictions. This encouraged a lot more options to be given out, which has become somewhat serendipitous. Just how fortunate were these execs? Take for example Amex's CEO, who received 1.9 million stock options with a strike price at $16 when their stock fell below $10, which has now returned to their pre-recession level of $58.56 (11/05/12). That's a whopping $80M. Funny how things work out.
The other day, I explained to a friend how I had made a generous return on the market simply by buying a US index fund when the P/E on the whole was below the historic average while bond yields were still low. I am hesitant to give the same advice today. There's always been a constant debate among pundits about the appropriate balance. But what if both asset classes aren't particularly attractive right now? The market is arguably appropriately valued with P/E's hovering around its long-term average. Bond yields are still at their historic lows. Throw in inflation, and you've got a negative return for fixed income.
In an article and interview by Randall Lane from Forbes , Warren Buffett reveals how he was influenced on his philosophy on philanthropy. If you're aware, Buffett gave away $40B of his fortune to the Bill and Melinda Gates Foundation, rather than managing the distribution of his wealth himself. Some would associate this type of thinking to his investment style, where he avoids micro-managing companies that he invests in. The real reason is that he was inspired by a man named Abraham Flexner, who had counseled many, if not most, of the major philanthropists of his time including Andrew Carnegie and John D. Rockefeller.
There's been a few blogs already about the trend in free online courses, but I came across this specific course today that was just added to Coursera taught by Columbia University. The course "Financial Engineering and Risk Management", will be taught by Martin Haugh and Garud Iyengar, with guest lectures by Emanuel Derman. It's a ten week course, starting in February 2013, and I'm considering it.
There's been a few mentions about Thorium on WSO, and I'm sure some of you are much more knowledgable about this so please excuse my ignorance. If you haven't heard about it, Thorium is a metal that can be used instead of Uranium as a fuel for nuclear power. What makes Thorium different is that it appears to have almost every advantage over conventional resources; it's green, safe, doesn't produce hazardous wastes, and produces enough energy for the world to last hundreds of years!
When I came across this article by CNBC, "China--Not Wall Street--Caused 2008 Crisis: Study" written by Liza Jansen which is based on a study conducted by Erasmus Research Institute of Management, I thought to myself, "This must be a huge scandal!". But apparently, China was just being prudent with their money. Whether it was a national policy or a cultural difference, I couldn't tell ya. It basically goes like this:US relaxes monetary policies during the beginning of the decade American consumers spends more, which drove imports from China
A video by Bloomberg shows some of the trades in the second quarter by prominent investors. Billionaires like Warren Buffett , George Soros and John Paulson have disclosed their quarterly trades, which of course can be of great insights. Without further ado:
Buffett buys 28 million shares of Phillips 66 (PSX) and 28.9 million shares of Conocco Phillips (COP). Buffett also added stakes in National Oil Well Varco Inc. (NOV) and shed some shares in Proctor and Gamble (PG)
Clearly, Buffett is bullish on energy stocks and/or perhaps energy prices. In addition, valuations appears to be relatively low at face value, but further analysis is warrented:
Estimated P/E 12/2012: 7.2015
Est. PEG Ratio: 0.7202
Singapore is predicted to be the wealthiest nation by 2050, according to an article by CNBC, which is based on a study conducted by Citibank. I had made a post about Singapore awhile back, and there was a mixed response about the lifestyle and banking industry there. Also, here is the top five, which doesn't include oil rich nations:
[quote]According to Citibank's 2050 prediction, the top five countries by this measure will be:
1. Singapore: $137,710
2. Hong Kong: $116,639
3. Taiwan: $114,093 (Congratuations, Taiwan, Citibank analysts think you'll make it 2050 without being consumed by China.)
4. South Korea: $107,752
From an article from CNBC , Goldman Sachs has escaped criminal prosecution on some of its trades during the height of the financial crises, when GS was betting against subprime mortgage securities that were also being sold to their clients. The announcement to end the prosecution is deemed to be odd, as the DOJ rarely makes public statements:
"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday.