This is very interesting in LNG Export from North East US. Shipping distance to Europe will be less compared to from Texas.
Tuesday, October 29, 2019
Brookfield to take 25% stake in Dominion's Cove Point in $2B Deal
Dominion Energy, Inc. (D), today announced that it has entered into an agreement with Brookfield Super-Core Infrastructure Partners, an infrastructure fund managed by Brookfield Asset Management Inc. (Brookfield), in which the company will transfer a 25 percent non-controlling equity interest in Cove Point to Brookfield in exchange for cash consideration of just over $2 billion, excluding working capital. The announcement is part of Dominion Energy's previously communicated intention to establish a permanent capital structure for Cove Point.
This is very interesting in LNG Export from North East US. Shipping distance to Europe will be less compared to from Texas.
This is very interesting in LNG Export from North East US. Shipping distance to Europe will be less compared to from Texas.
Amazon AWS Growth Profile Last 5 Years & Thoughts on AWS Value
Amazon AWS Growth Profile Last 5 Years has been amazing. Revenue went up from $1.5B in 2015 to $7.5B in 2019 which is 5 times multiple over 4 years. The Operating Income growth is slowing down as more competitors emerge include Azure and GOOGL.
IT Enterprise is a $Trillion Market so continues growth is possible. However hard to predict operating income growth. The servers and hardware need to be replaced over time Paya will be there although hardware cost keeps falling over time. As of now I think attributing a valuation of $50B to $100B for AWS is feasible assuming rosy assumptions. That still leaves $750B for rest of AMZN.
IT Enterprise is a $Trillion Market so continues growth is possible. However hard to predict operating income growth. The servers and hardware need to be replaced over time Paya will be there although hardware cost keeps falling over time. As of now I think attributing a valuation of $50B to $100B for AWS is feasible assuming rosy assumptions. That still leaves $750B for rest of AMZN.
US S&P vs UK FTSE vs Euro Stoxx - Stock Index Performance Last 4 Years
Stock Index Performance Last 4 Years - US S&P vs UK FTSE vs Euro Stoxx in US$ terms shows that while US Index is up 50% taking Forex into account UK stock market is only up 2%, Euro Index is up 10% in comparison.
Brexit Uncertainty is one major factor. Also I believe the lack of innovation in Europe when compared to US which is leading in tech innovation and disruption is another major factor.
Returns over next 4 years for UK and Europe could improve if business sentiment and investment improves after Brexit issue is done one way or other. However I expect the US Index to continue to deliver with increased innovation and earnings especially with the lower corporate taxes and abatement of trade war with China. The US China trade war will be like the Cold War which will keep going but they will come to some mutually agreeable stalemate.
Brexit Uncertainty is one major factor. Also I believe the lack of innovation in Europe when compared to US which is leading in tech innovation and disruption is another major factor.
Returns over next 4 years for UK and Europe could improve if business sentiment and investment improves after Brexit issue is done one way or other. However I expect the US Index to continue to deliver with increased innovation and earnings especially with the lower corporate taxes and abatement of trade war with China. The US China trade war will be like the Cold War which will keep going but they will come to some mutually agreeable stalemate.
S&P TSX 60 vs US SnP 500 Index Performance Analysis - Last 19 Years
Last 19 Years S&P TSX Index Performance Shows that investing in Canada stock market index has not been a good bet relative to alternatives. $10K invested in 2000 is only worth $18K in 2019 Oct. The problem is that Canada has many mining and resource companies that are cyclical. Also there are not that many world leading businesses in Canada. A strategy of investing in Canadian Banking and Telecom dividend champions has worked out better.
Investing in Canadian Index at low points in the commodity cycle in 2002, 2009 and 2016 ha e produced good short term returns as a trading strategy.
Investing in Canadian Index at low points in the commodity cycle in 2002, 2009 and 2016 ha e produced good short term returns as a trading strategy.
Monday, October 14, 2019
Brian Kingston, CEO of Brookfield Property Group, dishes on 5M and Pier 70 in San Francisco - San Francisco Business Times
Brian Kingston, CEO of Brookfield Property Group, dishes on 5M and Pier 70 in San Francisco - San Francisco Business Times.
Brookfield Property Group, dishes on 5M and Pier 70 in San Francisco
Brookfield Property Group, dishes on 5M and Pier 70 in San Francisco
SoftBank is reportedly seeking to take control of WeWork through a financing package
SoftBank has readied a financing package to take control of WeWork and further sideline the company’s founder Adam Neumann, The Wall Street Journal reported, citing people familiar with the matter.
SoftBank already owns one-third of WeWork, but is aiming to invest several billion dollars in additional equity and debt in the company, sources told The Journal. The potential deal would shift Neumann’s already diminished voting power to the Japanese conglomerate, according to the Journal. This would give give SoftBank a bigger role in turning around the company’s operations.
SoftBank is reportedly seeking to take control of WeWork through a financing package
SoftBank already owns one-third of WeWork, but is aiming to invest several billion dollars in additional equity and debt in the company, sources told The Journal. The potential deal would shift Neumann’s already diminished voting power to the Japanese conglomerate, according to the Journal. This would give give SoftBank a bigger role in turning around the company’s operations.
SoftBank is reportedly seeking to take control of WeWork through a financing package
Monday, October 7, 2019
Online brokers tumble after Schwab cuts commissions to zero
Sometimes I wonder if the tech disruptors are actually creating value or they are just distributing the value to consumers.
Robin Hood am online app that allows people to trade for $0 started in US in 2013. Due to its growth now all major companies are switching to $0 trade commissions. The consumer benefits not a multi billion dollar industry is decimated now. These companies now need to make money in other ways by increasing rates on margin loans or other services.
Same can be said for Uber and LYFT as well. I am not sure if these business models are sustainable. This will lead to more layoffs in these industries and more automation to cut costs.
Very dangerous times to be invested in companies as any startup can disrupt the industry. It is ever more important to be invested in companies with strong economic moat with barriers to entry including low cost of operations, secular tailwinds and network effect.l or patents.
Online brokers tumble after Schwab cuts commissions to zero
Robin Hood am online app that allows people to trade for $0 started in US in 2013. Due to its growth now all major companies are switching to $0 trade commissions. The consumer benefits not a multi billion dollar industry is decimated now. These companies now need to make money in other ways by increasing rates on margin loans or other services.
Same can be said for Uber and LYFT as well. I am not sure if these business models are sustainable. This will lead to more layoffs in these industries and more automation to cut costs.
Very dangerous times to be invested in companies as any startup can disrupt the industry. It is ever more important to be invested in companies with strong economic moat with barriers to entry including low cost of operations, secular tailwinds and network effect.l or patents.
Online brokers tumble after Schwab cuts commissions to zero
Airbnb Looking at Direct Listing and Not IPO
Airbnb (AIRB) is set to hire Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) as joint lead advisers on its planned stock market flotation next year, Reuters reports. The appointments would represent another high-profile assignment for the investment banks, albeit potentially less lucrative because Airbnb is leaning toward going public through a direct listing rather than an IPO. In a direct listing, no new shares are sold, and the role of the investment banks is more of one advising on market conditions vs. underwriting.
Airbnb Looking at Direct Listing and Not IPO
Airbnb Looking at Direct Listing and Not IPO
Brookfield to Sell Out of North American Palladium
Brookfield to Sell Out of North American Palladium. Brookfield made a loan to North American Palladium in 2015. Sale proceeds to Brookfield Business Partners for its 20% ownership interest in NAP are approximately $130 million, after taxes.
Tuesday, October 1, 2019
Recent Unicorn IPO Performance
Recent Unicorn IPO Performance.
Just buying an IPO to sell to a greater fool at a higher price works until the day it doesn’t!
Just buying an IPO to sell to a greater fool at a higher price works until the day it doesn’t!
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Recent Tech IPO Performances 2019
Recent Tech IPO Performances 2019.
Zoom, Cloufare and Fastly are in the green.
Most others in in the red especially from the first day open.
Zoom, Cloufare and Fastly are in the green.
Most others in in the red especially from the first day open.
2019 Q3 SnP Earnings Growth Outlook
2019 Q3 SnP Earnings Growth Outlook shows that most companies will show earnings decline due to slowing economy and consumer spending. The effects of trade conflicts and tariffs and secular headwind of regulation and antitrust pushback on tech seems to be weighing on near term earnings growth.
Some say in the future these issues will get sorted out and strong companies will continue growing value. However in the near term I am looking forward to a correction in next 2-3 months for a buying opportunity.
Some say in the future these issues will get sorted out and strong companies will continue growing value. However in the near term I am looking forward to a correction in next 2-3 months for a buying opportunity.
Why Staying Continuously Invested is Key to Long Term Compounding
Why Staying Continuously Invested is Key to Long Term Compounding. Below chart shows Why Staying Continuously Invested is Key to Long Term Compounding.
$1K invested in S&P 500 in 1970 is now worth $139K (139 times multiple).
However if you would have missed the 25 best days in the market over this time period of 49 years your return would be $33k only (33 times multiple).
It is hard to predict what events occur in future and how market reacts to them. So best approach is to buy forever companies with strong moat and good management and conservative balance sheets and stay invested in them.
$1K invested in S&P 500 in 1970 is now worth $139K (139 times multiple).
However if you would have missed the 25 best days in the market over this time period of 49 years your return would be $33k only (33 times multiple).
It is hard to predict what events occur in future and how market reacts to them. So best approach is to buy forever companies with strong moat and good management and conservative balance sheets and stay invested in them.
Teekay Offshore accepts improved Brookfield buyout offer
Teekay Offshore (TOO) accepts improved Brookfield buyout offer.
BBU offered only $1.05/share in its original offer for TOO announced on May 20; the deal also represents a 33.6% premium to yesterday's $1.16 closing price.
Teekay Offshore accepts improved Brookfield buyout offer
BBU offered only $1.05/share in its original offer for TOO announced on May 20; the deal also represents a 33.6% premium to yesterday's $1.16 closing price.
Teekay Offshore accepts improved Brookfield buyout offer
Brookfield Business Partners invests in BrandSafway
Brookfield Business Partners invests in BrandSafway. Company provides infrastructure services to construction and energy services industry and has recurring revenue. $1.3B investment for BBU + BAM Private Equity Funds for 45% ownership of business.
Brookfield Business Partners invests in BrandSafway
Brookfield Business Partners invests in BrandSafway
First look at Amazon's new Echo Buds, Echo Loop ring and Echo Frame glasses
First look at Amazon's new Echo Buds, Echo Loop ring and Echo Frame glasses.
Continue to be impressed with AMZN Innovation.
These products have great potential to grow the AMZN eco system and widen the economic moat around the company.
Watch: First look at Amazon's new Echo Buds, Echo Loop ring and Echo Frame glasses
Continue to be impressed with AMZN Innovation.
These products have great potential to grow the AMZN eco system and widen the economic moat around the company.
Watch: First look at Amazon's new Echo Buds, Echo Loop ring and Echo Frame glasses
GM, Amazon partner to install Alexa voice assistant in cars
GM, Amazon partner to install Alexa voice assistant in cars.
Alexa helps grow AMZN ecosystem and moat.
Alexa helps grow AMZN ecosystem and moat.
Brookfield Infrastructure plans Canadian Unit Split
Brookfield Infrastructure plans Canadian Unit Split.
Looks like a ploy to make it more tax efficient for Canadian and US owners and to increase pool of owners.
Looks like a ploy to make it more tax efficient for Canadian and US owners and to increase pool of owners.
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