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2021-08-01

Singtel needs to reinvent itself

SIA, SIAE, Singtel potential candidates for company restructuring: Maybank

2021-07-13

Like!

Anything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%

2021-07-13

Really?

Sorry, the original content has been removed

2021-06-28

is this realistic?

Square: The Bear Case

2021-06-28

good to adapt

谷歌改善搜索结果可靠性搜索某些内容会提示“结果正快速变化”

2021-06-27

Good!

Berkshire Hathaway appears to buy back more stock

2021-06-24

bankrupt country :(

The Fed In A Box, Part 1: They Cannot Raise Interest Rates

2021-06-20

But nobody can tell when

A Stock Market Crash Is Coming: 5 High-Conviction Stocks to Buy Hand Over Fist When It Happens

2021-06-17

nice

These 10 Stocks Make Up 85% of Warren Buffett's Portfolio

Go to Tiger App to see more news

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needs to reinvent itself","listText":"Singtel needs to reinvent itself","text":"Singtel needs to reinvent itself","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/802541401","repostId":"1153879814","repostType":4,"repost":{"id":"1153879814","kind":"news","pubTimestamp":1627784753,"share":"https://ttm.financial/m/news/1153879814?lang=&edition=fundamental","pubTime":"2021-08-01 10:25","market":"sg","language":"en","title":"SIA, SIAE, Singtel potential candidates for company restructuring: Maybank","url":"https://stock-news.laohu8.com/highlight/detail?id=1153879814","media":"Singapore Business","summary":"Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play f","content":"<blockquote>\n <b><i>Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?</i></b>\n</blockquote>\n<p>Drivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of Singapore Press Holdings (SPH) and a possible merger between Keppel Offshore &amp; Marine and Sembcorp Marine Ltd, according to a report by Maybank Kim Eng.</p>\n<p>According to the report, the drivers catalyzing these restructurings remain in play and are unlikely to retreat in the near-term.</p>\n<p>Some Singapore companies named by Maybank that are potential candidates for a corporate restructuring are Singtel, Singapore Airlines Group and the Singapore Institute of Aerospace Engineers.</p>\n<p>Maybank said Singtel is currently exploring options to review its stakes in associates and infrastructure assets to unlock latent value.</p>\n<p>Continued weakness and expected long lead time to recovery of international air travel may force certain rationalization for SIA and SIAE. Meanwhile, big developers like CityDev and UOL also have sizable development businesses similar to CAPL.</p>","source":"lsy1618986048053","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SIA, SIAE, Singtel potential candidates for company restructuring: Maybank</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSIA, SIAE, Singtel potential candidates for company restructuring: Maybank\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-01 10:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank><strong>Singapore Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of ...</p>\n\n<a href=\"https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153879814","content_text":"Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of Singapore Press Holdings (SPH) and a possible merger between Keppel Offshore & Marine and Sembcorp Marine Ltd, according to a report by Maybank Kim Eng.\nAccording to the report, the drivers catalyzing these restructurings remain in play and are unlikely to retreat in the near-term.\nSome Singapore companies named by Maybank that are potential candidates for a corporate restructuring are Singtel, Singapore Airlines Group and the Singapore Institute of Aerospace Engineers.\nMaybank said Singtel is currently exploring options to review its stakes in associates and infrastructure assets to unlock latent value.\nContinued weakness and expected long lead time to recovery of international air travel may force certain rationalization for SIA and SIAE. Meanwhile, big developers like CityDev and UOL also have sizable development businesses similar to CAPL.","news_type":1},"isVote":1,"tweetType":1,"viewCount":354,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":142861584,"gmtCreate":1626141404548,"gmtModify":1703754140518,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Like!","listText":"Like!","text":"Like!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/142861584","repostId":"1161134258","repostType":2,"repost":{"id":"1161134258","kind":"news","pubTimestamp":1626137252,"share":"https://ttm.financial/m/news/1161134258?lang=&edition=fundamental","pubTime":"2021-07-13 08:47","market":"us","language":"en","title":"Anything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%","url":"https://stock-news.laohu8.com/highlight/detail?id=1161134258","media":"zerohedge","summary":"While central banks, tenured economists and the financial media are doingeverythingin their propagan","content":"<p>While central banks, tenured economists and the financial media are doing<i>everything</i>in their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (although it now appears that even the Fed is getting some doubts writing in its semi-annual monetary policy report that inflation is \"<i><b>more lasting but likely still temporary</b></i>\" until proven otherwise, of course), the shocking reality on the ground is that the Fed has effectively lost control over near-term inflation expectations, as the NY Fed's own survey of consumer expectations reveals.</p>\n<p>According to the latest, June, installment of this closely watched survey, consumer inflation expectations for one year ahead, jumped by the most on record,<b>surging by 0.8% in one month, from 4.0% in May to an all-time high for this series of 4.8% in June.</b></p>\n<p><img src=\"https://static.tigerbbs.com/687424aa9936131fc5fd4fb975eb16c9\" tg-width=\"500\" tg-height=\"225\"></p>\n<p>As the NY Fed details, \"the increase in the short-term measure was driven mostly by respondents who have some college education. Our measures of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) reached new series’ highs at both horizons.\"</p>\n<p>There was some hope that the US won't end up as Weimar in the Fed's median inflation expectations for the three-year horizon which, unlike the 1-Year spot, were little changed from the prior month at 3.6%. Still, arguing that inflation at 3.6% in 3 years is acceptable to the Fed's formerly dual mandate (which has since grown toSocial Justice, Race, Gender Issues, Climate Change And Inequality), is at best laughable.</p>\n<p>However, in a testament to just how sticky most Americans expect inflation to be, the most valuable (and widespread) middle-class asset - housing - is expected to rise at near-record levels<b>with the median year-ahead home price change expectations at 6.2% in June, substantially higher than its 12-months trailing average of 3.7%,</b>if well below the current double-digit pace of home price increase which has pushed the average home price to a new all-time high. According to the Fed, \"Median year-ahead home price growth uncertainty—or the uncertainty expressed regarding year-ahead home price growth outcomes—increased and reached a new series high.\"</p>\n<p><img src=\"https://static.tigerbbs.com/730babaea29df064660a7f25212d1a82\" tg-width=\"721\" tg-height=\"439\"></p>\n<p>Looking at a breakdown of inflation expectations by commodity, the median one-year ahead expected change in the cost of college education increased to 7.0% from 6.1% in May, its highest reading since April 2019. In contrast, the median expected changes in the price of food and gasoline decreased to 7.1% and 9.2%, respectively, from 8.0% and 9.8% in May. The median expected change in the cost of medical care and rent remained unchanged at 9.4% and 9.7%; elsewhere medical costs are expected to rise 9.36%; and rent prices will rise 9.66%.</p>\n<p><img src=\"https://static.tigerbbs.com/003d8db78cc2804186ff076cccec3077\" tg-width=\"723\" tg-height=\"435\"></p>\n<p>Some other notable highlights from the survey: 9.59% (vs 9.69% in the prior month), expect to not be able to make minimum debt payment over the next three months; the mean perceived probability of losing one’s job in the next 12 months fell from 12.6% to 10.9%, hitting new series low which is to be expected in a country with record numbers of job openings.</p>\n<p>Some more details from the Fed's survey:</p>\n<p><b>Labor Market</b></p>\n<ul>\n <li>Median one-year ahead expected earnings growth increased by 0.1 percentage point to 2.6% in June, its highest reading since the start of the pandemic (February 2020). The increase was driven by respondents who have at least some college education.</li>\n <li>Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now— decreased to 30.7% from 31.9%, a new series’ low.</li>\n <li>The mean perceived probability of losing one’s job in the next 12 months decreased from 12.6% to 10.9%, reaching a new series’ low. The mean probability of leaving one’s job voluntarily in the next 12 months also decreased to 18.6% from 18.7%, staying close to its trailing 12-month average of 18.1%.</li>\n <li>The mean perceived probability of finding a job in the next three months (if one’s current job were lost) increased by 0.2 percentage point to 54.2%, its highest reading since February 2020. The increase was driven by those with at least some college education. The series remains substantially below its 2019 average of 59.8%.</li>\n</ul>\n<p><b>Household Finance</b></p>\n<ul>\n <li>The median expected year-ahead household income growth increased to 3.0% in June from 2.8%. The increase was broad-based across age, income, and education groups.</li>\n <li>Median household spending growth expectations increased by 0.2 percentage point to 5.2%, reaching a new series’ high. The increase was most pronounced for respondents with some college education.</li>\n <li>Perceptions of credit access compared to a year ago slightly improved. In contrast, expectations for future credit availability deteriorated, with more respondents expecting it will be harder to obtain credit in the year ahead.</li>\n <li>The average perceived probability of missing a minimum debt payment over the next three months decreased to 9.6% from 9.7%. The series remains below its 2020 average of 11.4%.</li>\n <li>The median expectation regarding a year-ahead change in taxes (at current income level) declined slightly to 4.6% from 4.7%.</li>\n <li>The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.5 percentage point to 29.9%. This is the highest reading of the series since May 2019. The increase was driven by those with an annual household income over $100,000.</li>\n <li>Perceptions about households’ current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago. In contrast, respondents were slightly more optimistic about their households’ financial situations in the year ahead.</li>\n <li>The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.5 percentage point to 40.2%, staying below its 2020 average of 44.3%.</li>\n</ul>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Anything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAnything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-13 08:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>While central banks, tenured economists and the financial media are doingeverythingin their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (...</p>\n\n<a href=\"https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite","SPY":"标普500ETF",".SPX":"S&P 500 Index",".DJI":"道琼斯"},"source_url":"https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1161134258","content_text":"While central banks, tenured economists and the financial media are doingeverythingin their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (although it now appears that even the Fed is getting some doubts writing in its semi-annual monetary policy report that inflation is \"more lasting but likely still temporary\" until proven otherwise, of course), the shocking reality on the ground is that the Fed has effectively lost control over near-term inflation expectations, as the NY Fed's own survey of consumer expectations reveals.\nAccording to the latest, June, installment of this closely watched survey, consumer inflation expectations for one year ahead, jumped by the most on record,surging by 0.8% in one month, from 4.0% in May to an all-time high for this series of 4.8% in June.\n\nAs the NY Fed details, \"the increase in the short-term measure was driven mostly by respondents who have some college education. Our measures of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) reached new series’ highs at both horizons.\"\nThere was some hope that the US won't end up as Weimar in the Fed's median inflation expectations for the three-year horizon which, unlike the 1-Year spot, were little changed from the prior month at 3.6%. Still, arguing that inflation at 3.6% in 3 years is acceptable to the Fed's formerly dual mandate (which has since grown toSocial Justice, Race, Gender Issues, Climate Change And Inequality), is at best laughable.\nHowever, in a testament to just how sticky most Americans expect inflation to be, the most valuable (and widespread) middle-class asset - housing - is expected to rise at near-record levelswith the median year-ahead home price change expectations at 6.2% in June, substantially higher than its 12-months trailing average of 3.7%,if well below the current double-digit pace of home price increase which has pushed the average home price to a new all-time high. According to the Fed, \"Median year-ahead home price growth uncertainty—or the uncertainty expressed regarding year-ahead home price growth outcomes—increased and reached a new series high.\"\n\nLooking at a breakdown of inflation expectations by commodity, the median one-year ahead expected change in the cost of college education increased to 7.0% from 6.1% in May, its highest reading since April 2019. In contrast, the median expected changes in the price of food and gasoline decreased to 7.1% and 9.2%, respectively, from 8.0% and 9.8% in May. The median expected change in the cost of medical care and rent remained unchanged at 9.4% and 9.7%; elsewhere medical costs are expected to rise 9.36%; and rent prices will rise 9.66%.\n\nSome other notable highlights from the survey: 9.59% (vs 9.69% in the prior month), expect to not be able to make minimum debt payment over the next three months; the mean perceived probability of losing one’s job in the next 12 months fell from 12.6% to 10.9%, hitting new series low which is to be expected in a country with record numbers of job openings.\nSome more details from the Fed's survey:\nLabor Market\n\nMedian one-year ahead expected earnings growth increased by 0.1 percentage point to 2.6% in June, its highest reading since the start of the pandemic (February 2020). The increase was driven by respondents who have at least some college education.\nMean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now— decreased to 30.7% from 31.9%, a new series’ low.\nThe mean perceived probability of losing one’s job in the next 12 months decreased from 12.6% to 10.9%, reaching a new series’ low. The mean probability of leaving one’s job voluntarily in the next 12 months also decreased to 18.6% from 18.7%, staying close to its trailing 12-month average of 18.1%.\nThe mean perceived probability of finding a job in the next three months (if one’s current job were lost) increased by 0.2 percentage point to 54.2%, its highest reading since February 2020. The increase was driven by those with at least some college education. The series remains substantially below its 2019 average of 59.8%.\n\nHousehold Finance\n\nThe median expected year-ahead household income growth increased to 3.0% in June from 2.8%. The increase was broad-based across age, income, and education groups.\nMedian household spending growth expectations increased by 0.2 percentage point to 5.2%, reaching a new series’ high. The increase was most pronounced for respondents with some college education.\nPerceptions of credit access compared to a year ago slightly improved. In contrast, expectations for future credit availability deteriorated, with more respondents expecting it will be harder to obtain credit in the year ahead.\nThe average perceived probability of missing a minimum debt payment over the next three months decreased to 9.6% from 9.7%. The series remains below its 2020 average of 11.4%.\nThe median expectation regarding a year-ahead change in taxes (at current income level) declined slightly to 4.6% from 4.7%.\nThe mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.5 percentage point to 29.9%. This is the highest reading of the series since May 2019. The increase was driven by those with an annual household income over $100,000.\nPerceptions about households’ current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago. In contrast, respondents were slightly more optimistic about their households’ financial situations in the year ahead.\nThe mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.5 percentage point to 40.2%, staying below its 2020 average of 44.3%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":266,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":142863885,"gmtCreate":1626141328947,"gmtModify":1703754138898,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Really?","listText":"Really?","text":"Really?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/142863885","repostId":"1149354714","repostType":4,"isVote":1,"tweetType":1,"viewCount":365,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":127985720,"gmtCreate":1624816284860,"gmtModify":1703845494422,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"is this realistic?","listText":"is this realistic?","text":"is this realistic?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/127985720","repostId":"1117734317","repostType":2,"repost":{"id":"1117734317","kind":"news","pubTimestamp":1624759414,"share":"https://ttm.financial/m/news/1117734317?lang=&edition=fundamental","pubTime":"2021-06-27 10:03","market":"us","language":"en","title":"Square: The Bear Case","url":"https://stock-news.laohu8.com/highlight/detail?id=1117734317","media":"seekingalpha","summary":"Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong re","content":"<p><b>Summary</b></p>\n<ul>\n <li>On the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.</li>\n <li>In reality, the company has struggled to translate its top line into bottom line earnings.</li>\n <li>This has resulted in Square expanding its products to justify exaggerated revenue valuations which may never result in meaningful earnings growth.</li>\n <li>And whilst at first glance its Cash App story appears to be a budding prospect, it may be nothing more than temporary growth based on necessity.</li>\n <li>Given the current valuation and the increasing Bitcoin headwinds, Square could face significant revisions downwards in revenue and earnings.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f072284e4d267ddbfaf6f17db8b6aa46\" tg-width=\"1536\" tg-height=\"1024\"><span>AndreyPopov/iStock via Getty Images</span></p>\n<p><b>Introduction</b></p>\n<p>Square Inc.(NYSE:SQ)is one of the&nbsp;most popular stocks&nbsp;among retail traders and investors, ranking 57 in Robinhood's top 100 rankings. This has resulted in a 135% increase in price over the last year allowing SQ to reach a market capitalization of greater than $100bln, trading with the volatility of a mid-cap company.</p>\n<p>On the surface the price and valuation may seem justified, with the company sequentially increasing revenues and expanding its portfolio of products through Cash App, Bitcoin (BTC-USD), PPP loans and most recently delving into the commercial loans business with a&nbsp;banking license&nbsp;via Square Financial Services.</p>\n<p>However, these valuations are becoming disaggregated from the fundamentals of the company and its core business on speculation of future revenue projections which are heavily reliant on Bitcoin revenues.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/adc746c80eba08b76805234d32a7eff4\" tg-width=\"638\" tg-height=\"358\"><span>Source: Author, with data from SQ Investor Relations (Q1 2021 Historical Financial Information)</span></p>\n<p>In addition to this, SQ potentially faces several other issues related to small business positioning; policy and regulation; and general macroeconomic factors which may create headwinds that will impact its valuation and pose an asymmetric downside risk for investors, which I will extrapolate on below.</p>\n<p><b>Overview</b></p>\n<p>SQ is a payment processing and business tool provider that facilitates transactions between businesses / sellers and individuals and provides them with hardware, online infrastructure and analytics. Additionally, it services individuals through Cash App which appears to be growing exponentially and allows users to send, receive, hold and invest money, and recently Bitcoin.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cee1136e6c6e1b5294daf79d06e4a1e8\" tg-width=\"382\" tg-height=\"421\"><span>Source: SQ Investor Relations (Q1 2021 Shareholder Letter - Cash App Inflows vs Gross Profit)</span></p>\n<p>As of March 2020, the&nbsp;company has received a Banking License&nbsp;from the Federal Deposit Insurance Corporation (FDIC) to originate commercial loans to retailers which use SQ for payment processing.</p>\n<p>Given all of this positive news, it is not surprising that the stock has rallied over 330% in the last 3 years on the basis of future growth projections and, since 2020, has chased revenue estimates.</p>\n<p>This was a common occurrence during COVID, as unchartered waters meant that top line growth was imperative for survival. Further, seemingly endless money printing by the Fed, combined with zero rates, meant money flowed into stocks which showed the highest potential for growth.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/214a8d95ef4deef4b9e6e7ec8ca86793\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ vs EPS Estimates and Revenue Estimates 2021)</span></p>\n<p>However, in Q1 2021, as the printing slowed, yields began to rise and federal transfers to individuals dissipated, and consequently ever increasing revenue estimates began to mean less for the market, resulting in SQ price action ranging between $200 to $280.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5a03c8294f2805d4e82fbc3fed739f45\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ Price YTD)</span></p>\n<p><b>Quantitative</b></p>\n<p>Year to Date, SQ has been a good performer relative to the payment processing sector, returning ~12% price increases to shareholders.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c32bf1243cd5e4252fc8af88b2ee4bfb\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ vs Payment Processing Sector &gt;$50 bln Year to Date)</span></p>\n<p>It is also not a surprise to see why when evaluated against these companies on a forward earnings and revenue basis. SQ has above average and median earnings growth for 2021 and 2022, as well as strong revenue growth for 2021.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7b67e41d041b35bf5e8ae3c7adb55c7d\" tg-width=\"640\" tg-height=\"444\"><span>Source: Author, Sector Comparison (Payment Processors)</span></p>\n<p>Whilst SQ's forward PE seems exaggerated in contrast to its counterparts, its forward PS is relatively small and below the sector averages and median, perhaps justifying its present value.</p>\n<p>However, once you remove Bitcoin revenue from the equation, you get much more exaggerated forward PS estimates on much lower revenue growth, which represents SQ's primary business.</p>\n<p>For this equation, I have removed Bitcoin revenue from their Q1 2021 results, and judging by average analyst expectations which show little to no sequential revenue growth from Q2-Q4 2021, multiplied this figure by 4x for a year end revenue estimate of $6,140.70 mln. For prior years, I have removed Bitcoin from Revenue.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/624b2de0076a4f2d6062c52036b5d176\" tg-width=\"640\" tg-height=\"182\"><span>Source: Author, SQ Revenue Growth (2018 to 2021 Estimates with Bitcoin vs excl Bitcoin)</span></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5337259448695cf7fc6a796d86dba775\" tg-width=\"523\" tg-height=\"245\"><span>Source: Author, SQ vs Sector Comps (Revenue Estimates excl Bitcoin)</span></p>\n<p>As we can see this paints a very different picture of the company, and whilst revenue is still growing slightly above comps which also have high PS ratios, suddenly valuations on earnings look more meaningful and it becomes difficult to justify a forward PE 3x above the average and 4.5x above the median. Especially when companies such as American Express Co (AXP), Mastercard Inc (MA), PayPal Holdings Inc (PYPL) and Visa Inc (V) are producing on average 4x higher EPS. The majority of which pay a dividend and have similar growth estimates with less volatility risk.</p>\n<p>Many will suggest that \"this does not matter as BTC is now part of their revenue metrics and that is that, besides transaction volume is what is important\". However, I would cite the example of the 2018 Bitcoin sell off in which&nbsp;Bitcoin fell 70%, and transaction volumes fell from highs by approximately 75% as well:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b01941a1ab02f1b6dc27d73a2705a242\" tg-width=\"640\" tg-height=\"320\"><span>Source: Bitcoinvisuals.com (Bitcoin Market Volume 2018)</span></p>\n<p>On a valuation basis, this presents a substantial downside risk to investors if Bitcoin continued to retrace as a result of being met by increased regulation globally, as the company is essentially trading on revenue metrics propped up by Bitcoin. Quite simply, price down in Bitcoin could mean downwards revisions to revenue estimates and consequently a highly volatile retracement in the price of SQ.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c89cf1b41c0d446571c7a471bb8d8e50\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ Price Correlation - Revenue, EPS and EBITDA)</span></p>\n<p>This becomes increasingly likely given the historical volatility of the stock when compared to its peers and it is not surprising that it is also becoming a consensus short position.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2d47874b5957751f0d485a9aa9ec5016\" tg-width=\"640\" tg-height=\"233\"><span>Source: Author (SQ vs Sector Comps Implied and Realized Volatility and Short Interest)</span></p>\n<p>Given the analysis by another Seeking Alpha contributor,The Value Trend&nbsp;in which the author suggests that&nbsp;SQ's 2025 growth is essentially priced in&nbsp;I would have to agree. SQ's reliance on revenue estimates which have been amplified substantially by Bitcoin present an asymmetric risk to the downside in the short to medium term for investors.</p>\n<p><b>Macro</b></p>\n<p>Whilst we are in the process of reopening, many things remain uncertain, such as the level of demand sustainability, job growth and creation, and inflation.</p>\n<p>Whilst the sentiment is overall positive in the media, there are several macroeconomic issues that are beneath the surface which need to be resolved before we can conclude that we are in the clear.</p>\n<p><b>Small Business Environment</b></p>\n<p>SQ's MRQ shows that nearly 49% of the Gross Profit comes from the Seller ecosystem (small businesses).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a0f50d03e91a1609a120fa139b61e292\" tg-width=\"640\" tg-height=\"319\"><span>Source: SQ Investor Relations (Q1 2021 10Q Page 39 - Segmented Gross Profit)</span></p>\n<p>The majority of this is originating from exposure to sellers with &lt;$500,000 Gross Payment Volume (69.5%). This makes square substantially exposed to fluctuations in the small business cycle.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/75fbdbba973e9d39e9d07b50d6174b03\" tg-width=\"380\" tg-height=\"502\"><span>Source: SQ Investor Relations (Q1 2021 Shareholder Letter)</span></p>\n<p>Delving into the Business Formation Statistics, there is a rosy picture, with over 500,000 business applications for the month of May, 2021 providing an endless surge of opportunity for SQ.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/777bf7fbfba7b466a8c89baa9b21a72d\" tg-width=\"640\" tg-height=\"475\"><span>Source: Census.gov (Business Applications, May 2021)</span></p>\n<p>Again, when we dig deeper and look at the statistics below which rank the optimism of established small businesses, the picture begins to distort and starts to look like the descent into 2008.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e5be8fe67a4c257868eb79101d262e77\" tg-width=\"525\" tg-height=\"557\"><span>Source: NFIB (Small Business Economic Trends - Optimism, May 2021)</span></p>\n<p>Further, when we examine Small Business future outlook on expansion, this has also descended to lows and similar to what was seen in 2008. This could suggest that the bread and butter of SQ's gross profit margin, may not expand at the rate previously seen during 2017 to 2020.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e1a555c19fb385f170bb6deb2b3abcca\" tg-width=\"539\" tg-height=\"319\"><span>Source: NFIB (Small Business Economic Trends - Outlook, May 2021)</span></p>\n<p>Additionally, it should be noted that the two primary reasons small businesses are giving for their negative outlook are \"Economic Conditions\" and \"Political Climate\", which could be related to the election in 2020, COVID, recent policy changes and be somewhat transitory. Alternatively it could resemble the slow march of 2008 to 2016, we simply do not know, except for the fact it is a low reading and consequently could weigh on SQ's high revenue and earnings growth estimates.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4fbef66ecf854fe482a86e001dec91e6\" tg-width=\"523\" tg-height=\"271\"><span>Source: NFIB (Small Business Economic Trends - Reasons for Outlook, May 2021)</span></p>\n<p><b>Small Business Lending</b></p>\n<p>Looking forward, SQ clearly aims to solidify its position in the commercial lending space through acquiring a banking license. This is very positive for the company due to their large and growing small business user base,their experience since 2014, and the&nbsp;PPP program, which stopped on May 31, 2021.</p>\n<p>Currently, bank lending has receded as a result of recovery efforts from COVID.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/327e5b2f822c5f6e8b6298b58c0d4f94\" tg-width=\"640\" tg-height=\"401\"><span>Source: YCHARTS (US Commercial Banks - Commercial and Industrial Loans)</span></p>\n<p>This can be verified through the credit conditions index in the&nbsp;monthly NFIB report. Although, an&nbsp;American Banker survey&nbsp;is reporting that 86% of small businesses are finding it difficult to access credit, and are having to resort to personal credit.</p>\n<p>This is positive for SQ as it will allow them to fill the gap for credit to small business within the market. Though I believe it will be short lived as there is speculation that when the Fed tapers, they will also announce the lifting of&nbsp;capital restraints&nbsp;placed on Wells Fargo &amp; Company (WFC).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/530b7de3c5d05e7e8f5de219d3582ea7\" tg-width=\"640\" tg-height=\"689\"><span>Source: Credit Suisse (Global Money Dispatch - 25 May 2021)</span></p>\n<p>There is a fairly good probability that this will occur, given that early in 2020 the Fed had&nbsp;lifted these restraints&nbsp;to help small businesses via the PPP program and tapering has a history of upsetting the market. If this occurs, I suspect WFC will become a giant amongst the small business credit space once more and be a very tough competitor to SQ due to their extensive network and history in the space.</p>\n<p><b>Bitcoin, Legislation &amp; Gensler</b></p>\n<p>Bitcoin has been making headlines as of 2H 2020 and much of 1H 2021 for good reason. It is gaining traction amongst retail traders and investors and has shown exceptional appreciation. Further, some minor&nbsp;banks&nbsp;have been interested in the medium although many banks and financial institutions have explicitly banned the&nbsp;purchase of Bitcoin using their services.</p>\n<p>The primary reasons for their objection is more than likely to do with illicit activities, such as&nbsp;money laundering,terrorism,fake transaction volumes, and similar activities which I do not want to get into and neither do banks.</p>\n<p>Consequently, on the recent hype, many countries are now stepping in to regulate the use of Bitcoin, but others are going a step further and are enacting legislation to ban its use and mining, most notably,China&nbsp;and&nbsp;India.</p>\n<p>This has had a negative impact on the price of Bitcoin since the ATHs in May 2021 of ~$65,000, retracing -46% since then.</p>\n<p>It is also extremely negative for Bitcoin going forward as the majority of Bitcoin mining is done in China (~70% YTD) with&nbsp;Hashrates of mining being correlated to the price. Therefore if these recede on decreasing Chinese mining activity, price could surely follow, affecting SQ's Bitcoin holdings and future transaction volumes.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/75ef78953396700241870a3f3ae8d8be\" tg-width=\"640\" tg-height=\"382\"><span>Source: Cambridge University (Cambridge Bitcoin Electricity Consumption Index YTD)</span></p>\n<p>Whilst the SEC has come out and said that&nbsp;Bitcoin regulation is not on their agenda for 2021, Gary Gensler has&nbsp;warned investors to be cautious. Gensler is also has a long history on regulations to protect investors, and despite not putting Bitcoin on the agenda for 2021, I advise readers to study his history with respect to&nbsp;2000 and 2008.</p>\n<p>Looking out further, this does not bode well for Bitcoin and SQ, generally. It is likely that there could be further regulation rather than adoption, negatively impacting its price, leading to a repeat of 2018 lower volumes as well as mining activity.</p>\n<p><b>General Economy - The Worry for Retail</b></p>\n<p>Separately, we could also be seeing a negative situation for retail going forward. Much of the recovery in retail as not been driven by \"pent up demand\" but mostly through subsidies issued throughout&nbsp;2020 and the start of 2021. When examining the graph below, we can see that once you subtract transfer receipts (government stimulus cheques and employment benefits - red line), income is not what it used to be.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/97a5a8cfaa11dd3c5ab5544778a40b90\" tg-width=\"640\" tg-height=\"247\"><span>Source: Federal Reserve Bank of St. Louis (Disposable Income vs Real Income minus Transfers vs Personal Savings vs Retail Trade Sales)</span></p>\n<p>Additionally, we can see that much of the spikes in retail sales (purple) have been driven mainly through the stimulus cheques which bolstered disposable income (blue) and consumer savings (green), though now stimulus has ended and people are having to start to dig into their savings, which is dropped 54% month on month between March and April.</p>\n<p>The consumer spending situation is made worse when examining U6 unemployment, which is&nbsp;considered to be the most revealing&nbsp;amongst economists as it includes unemployed, underemployed and discouraged job seekers. This, generally speaking, does not bode well for consumer discretionary spending patterns going forward.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c09f260d254df1a847962a6b6896764c\" tg-width=\"640\" tg-height=\"388\"><span>Source: Macrotrends.net (U6 Unemployment Rate vs U5 vs Official)</span></p>\n<p>Finally, the rising cost of food and energy, which for food I expect to continue, should hamper consumer discretionary spend going forward. I have previously written articles on The Mosaic Company (MOS)hereand The Andersons (ANDE)here, which outline my justification for this trend.</p>\n<p>In relation to SQ, we can see their historical exposure to consumer discretionary spend based on end 2019 data. When taking into account figures from: retail; professional services, beauty and personal care, home and repair, leisure and entertainment, and casual use, the total exposure is approximately 59%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dddddbe8ed21ed16aab29a7b5ebbc846\" tg-width=\"640\" tg-height=\"340\"><span>Source: Statista (Raynor de Best - GPV by Seller Industry Dec 2019)</span></p>\n<p>Whilst this may not impact its revenue figures substantially due to the weighting of bitcoin, I do expect this to undermine is gross profit figures going forward and negatively impact margins as stimulus further fades.</p>\n<p><b>Financials</b></p>\n<p><b>Bitcoin</b></p>\n<p>When examining the financials of SQ we can easily see that Bitcoin is the predominant factor driving its revenue growth (MRQ 69% of total revenue) of which its valuation is derived (see above Introduction section - SQ Price vs Revenue Segments; and Quantitative section - SQ Price correlation).</p>\n<p>From their Q1 2021 Shareholder Letter, page 12 they have stated that on March 31, 2021 the fair value of their holdings was $472 million. On this date the closing price was $58,918.83, or approximately 8,011 Bitcoins. They also state they initially invested $200 million into bitcoin during this period and Q4, so their average price is roughly $25,000 per Bitcoin.</p>\n<p>Currently, the price of Bitcoin sits at approximately $34,600 and it also appears to be struggling to find traction, especially when you examine some other trends. For example, looking at search trends of \"Buy Bitcoin\" on Google Trends, this is clearly waning.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d6b3b70625f48232fa97f1aa14f5548e\" tg-width=\"640\" tg-height=\"333\"><span>Source: Google Trends (Buy Bitcoin search terms - Worldwide 5 Yrs)</span></p>\n<p>Additionally, when you align this data with stimulus payments it is clear there is a relationship between the two in 2H 2020, and much of the recent speculation could be driven by government subsidies.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/54329dbe61b7b1f9fc1347f632aff709\" tg-width=\"640\" tg-height=\"293\"><span>Source: USA.Gov (COVID Stimulus Cheque Dates)</span></p>\n<p>The spike in searches occurs roughly around the time of the two latter government stimulus cheques with a lag of a few days to a few weeks.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4c7a198a905e4a89f11faa1b4db4003b\" tg-width=\"640\" tg-height=\"340\"><span>Source: Google Trends (Buy Bitcoin search terms - USA 12 Months)</span></p>\n<p>This also coincides with Bitcoin's price run up in December 2020 and January 2021, as well the failed rally in March and April 2021.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0428576ae2c8312e747c3ae5fccab637\" tg-width=\"640\" tg-height=\"401\"><span>Source: YCHARTS (Bitcoin Price 1 Yr)</span></p>\n<p>Thus, in this example, if we have a continued sell off of -70%, which is similar to what occurred in 2018. We would be back at November 2020 Bitcoin prices of $20,000 approximately.</p>\n<p>This is still feasible on the basis of dwindling volume, further legislation and declining hashrates. It could also be theorized that SQ may carry an impairment charge of $40 million, which would greatly affect operating income, net income and shareholder earnings and future estimates. Though this is purely theoretical without accounting for transactions in the current quarter, such as purchases or sales at or near ATHs.</p>\n<p>Additionally, with the lack of stimulus payments going forward and tighter consumer discretionary spend, the revenue generated from Bitcoin may also decline as less money enters the space and volumes decline. Negatively impacting revenue estimates for SQ and subsequently their price and valuation.</p>\n<p><b>Cash App</b></p>\n<p>On the surface, it looks like Cash App is growing exponentially into a viable platform for users to transact, with more than 36 million monthly transacting active customers, up 50% YoY.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b457a1d1f65d9d40fac153a9926aa167\" tg-width=\"262\" tg-height=\"230\"><span>Source: SQ Investor Relations (Q4 2020 Shareholder Letter)</span></p>\n<p>However, this growth in Cash App may be unsustainable going forward, with SQ elaborating on this in their Quarterly filing notes:</p>\n<blockquote>\n Cash App revenue benefited from growth in numbers of active Cash App customers and from&nbsp;\n <b>government relief programs</b>&nbsp;most recently passed into law in late December 2020 and in March 2021, as well as cumulative benefit from earlier stimulus programs passed in 2020. These programs provided additional stimulus relief and unemployment benefits which resulted in an increase in consumer spending and inflows into our Cash App ecosystem. Cash App revenue growth may not be sustained at the same levels in future quarters and may be impacted by the enactment of further stimulus relief and benefit programs, as well as the demand and market prices for bitcoin, amongst other factors.\n</blockquote>\n<blockquote>\n <i>Source: SQ Investor Relations (Q1 2021 10Q Filings - Page 49)</i>\n</blockquote>\n<p>Part of the issue with Cash App is theoretical continued use and future adoption. Much of the growth seen over the last year was predominantly fueled by stimulus payments through the Cash App ecosystem, and therefore by necessity given the circumstances.</p>\n<p>The two sharp spikes in searches for the app occurred on:</p>\n<ul>\n <li>April 12-18 2020</li>\n <li>January 24-30 2021</li>\n</ul>\n<p>These coincide with stimulus payments as they initially sent them and they gradually deposited them into people's accounts.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f9485d2feac40030b5190195a471781e\" tg-width=\"640\" tg-height=\"337\"><span>Source: Google Trends (Cash App search terms - USA 5 Years)</span></p>\n<p>Therefore, as government stimulus payments end, and Bitcoin again fades from relevancy, and more people return to work and day-trade less, this could negatively impact user growth metrics going forward, impacting SQ revenue estimates, gross profit figures, and its earnings.</p>\n<p>Further, there are a multitude of other more viable platforms, which another Seeking Alpha contributor,The Value Trend, has elaborated onhere.</p>\n<p>It is also important to keep in mind how they define these users, a \"Transacting active Cash App customer\" is the following:</p>\n<blockquote>\n ... has at least\n <b>one financial transaction</b>using any product or service within Cash App during the specified period.\n</blockquote>\n<blockquote>\n <i>Source: SQ Investor Relations (Q4 2020 Shareholder Letter - Page 4)</i>\n</blockquote>\n<p>So, if a customer received their wages from an employer, or unemployment benefit, into Cash App once per month, and transferred all of it to their bank account once per month, they are a \"transacting active Cash App customer\"...</p>\n<p>Perhaps a better quantifier of an \"active\" customer would be greater than 5 transactions.</p>\n<p><b>Technicals</b></p>\n<p>Examining the technicals of SQ, it is clear that the stock is now ranging between $200 and $280, with several breakout attempts at $250 and 2 failed attempts near $300, showing several signs that momentum is dying out.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4c277d5239e06c67b7ff6fd7fff319bb\" tg-width=\"640\" tg-height=\"642\"><span>Source: Author, with data from FINVIZ (SQ Chart)</span></p>\n<p>When examining dark pool order flows, there is a possibility for the current rally to continue as dark pools are at lows, which may likely continue into earnings by August. Although I would not get my hopes up unless some seriously good news occurs and Bitcoin rallies back to ATHs.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3323bfcd903c74dce542b53b0b56e093\" tg-width=\"640\" tg-height=\"281\"><span>Source: Squeezemetrics.com (SQ Dark Pools vs Implied Vol 2 Years)</span></p>\n<p>From the 13F filings, we can also see that many funds have reduced exposure and closed their positions, with fewer new positions being added. The Put to Call ratio is also becoming quite high, especially on a stock that has $100 bln market cap, signaling that we are not the only ones thinking the same thing.</p>\n<p>Caution is required though, as SQ's issues with Bitcoin are obviously becoming a consensus trade, and when those puts are lifted, gamma may turn positive and it could cause the stock to rally significantly.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b221f08c025ba225e32114f0e76dd272\" tg-width=\"640\" tg-height=\"152\"><span>Source: Whalewisdom.com (SQ Funds Positioning)</span></p>\n<p>Further, with relation to ARK ETFs, it is no surprise that there have been&nbsp;significant liquidity issues&nbsp;the last 6 months, and I agree with another Seeking Alpha contributor's thesisherethat we will see a reversion to the mean with respect to prices of stocks held in these ETFs. What can be noted is that Cathie has significantly reduced her exposure to SQ and that she may be picking her battles.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ecce0e1f1cd9e7e47fe27105be3f6ad0\" tg-width=\"640\" tg-height=\"559\"><span>Source: Cathiesark.com (SQ Shares Held - All ETFs)</span></p>\n<p>Given the above information, this is a difficult company to be short. It will either payoff enormously, or rip your face off due to its volatility. Additionally there are many funds wanting some small level of exposure to a company with Bitcoin on the financial statements. Therefore, if you were to trade this as a short at your own risk, discretion is advised and you should always pick your battles.</p>\n<p><b>Price Targets</b></p>\n<p>On the basis of volatility through SQ's ATR it is possible that SQ could move to a low of approximately $100 by the end of the year, moving in favor 40% of the time. This aligns with my year end 2021 price if you remove Bitcoin entirely from the equation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4ec1e2586568ef7e0aea0c54e3503acc\" tg-width=\"640\" tg-height=\"222\"><span>Source: Author (SQ ATR Calculator)</span></p>\n<p>However, it would not be sensible to do this as it is part of their revenue for the time being, no matter how high Bitcoin volumes were in the start of 2021 and how low they may be at the end of the year.</p>\n<p>I do expect the stock to fall again and retest $200, possibly breaking down to $160. Though it is very difficult to determine a valuation with SQ, mainly because the valuation is derived from Bitcoin revenues, and also the perceived value by funds and the market in the future adoption of the asset.</p>\n<p>If the market begins to perceive Bitcoin again as irrelevant, I would expect SQ to slowly sell off to between $150 and $160 (-37% downside) with a low probability that it will rally past $300 (25% upside).</p>\n<p><b>Risks</b></p>\n<p>With respect to SQ the following risks should be noted.</p>\n<p>The company is growing, whether you like SQ or not. The main questions are: Will the market value Bitcoin on any realistic basis? How much is it growing with and without Bitcoin? What is the potential future growth with and without Bitcoin? And does the market believe it, or for that matter care?</p>\n<p>If the Bitcoin fades from relevancy, and judging by Google Trends, it is more likely than it is not, it is not outlandish to assume that SQ will suffer as a result of this and over the 2H 2021 and take a substantial hit to revenue estimates. However, if Bitcoin adoption increases and negative news fades, since this is a growth company, it could simply continue rallying.</p>\n<p>Further, consumer spending patterns are producing mixed data, and above I have presented a bear case. This could easily turn the other way if people's behavior changes, such as applying for jobs which will increase spending in the economy and hopefully produce small business growth and increase small business optimism and expansion, which is very beneficial for SQ as a cyclical business in the payment processing space.</p>\n<p>Again, caution is necessary, though I do think that future growth of the company is priced in and there is a higher risk to holders of SQ to the downside than to the upside.</p>\n<p><b>Summary</b></p>\n<p>SQ is a high growth company with some potential positive points in the long run; however, its valuation is highly questionable due to its high revenue estimates predominantly derived from Bitcoin transactions and not bottom-line earnings growth.</p>\n<p>From a quantitative perspective, it looks good amongst its peers but upon further examination it appears to be extremely overvalued as future growth, at least for 2021, may be derived from Bitcoin. Further, its Cash App adoption statistics may not continue to see the same run rate going forward without continued government stimulus.</p>\n<p>Additionally, it faces several potential macroeconomic hurdles with respect to small business exposure, lending competitors, consumer transaction competitors, Bitcoin legislation and softening retail demand.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Square: The Bear Case</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSquare: The Bear Case\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-27 10:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4436723-square-the-bear-case><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.\nIn reality, the company has struggled to translate its ...</p>\n\n<a href=\"https://seekingalpha.com/article/4436723-square-the-bear-case\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SQ":"Block"},"source_url":"https://seekingalpha.com/article/4436723-square-the-bear-case","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1117734317","content_text":"Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.\nIn reality, the company has struggled to translate its top line into bottom line earnings.\nThis has resulted in Square expanding its products to justify exaggerated revenue valuations which may never result in meaningful earnings growth.\nAnd whilst at first glance its Cash App story appears to be a budding prospect, it may be nothing more than temporary growth based on necessity.\nGiven the current valuation and the increasing Bitcoin headwinds, Square could face significant revisions downwards in revenue and earnings.\n\nAndreyPopov/iStock via Getty Images\nIntroduction\nSquare Inc.(NYSE:SQ)is one of the most popular stocks among retail traders and investors, ranking 57 in Robinhood's top 100 rankings. This has resulted in a 135% increase in price over the last year allowing SQ to reach a market capitalization of greater than $100bln, trading with the volatility of a mid-cap company.\nOn the surface the price and valuation may seem justified, with the company sequentially increasing revenues and expanding its portfolio of products through Cash App, Bitcoin (BTC-USD), PPP loans and most recently delving into the commercial loans business with a banking license via Square Financial Services.\nHowever, these valuations are becoming disaggregated from the fundamentals of the company and its core business on speculation of future revenue projections which are heavily reliant on Bitcoin revenues.\nSource: Author, with data from SQ Investor Relations (Q1 2021 Historical Financial Information)\nIn addition to this, SQ potentially faces several other issues related to small business positioning; policy and regulation; and general macroeconomic factors which may create headwinds that will impact its valuation and pose an asymmetric downside risk for investors, which I will extrapolate on below.\nOverview\nSQ is a payment processing and business tool provider that facilitates transactions between businesses / sellers and individuals and provides them with hardware, online infrastructure and analytics. Additionally, it services individuals through Cash App which appears to be growing exponentially and allows users to send, receive, hold and invest money, and recently Bitcoin.\nSource: SQ Investor Relations (Q1 2021 Shareholder Letter - Cash App Inflows vs Gross Profit)\nAs of March 2020, the company has received a Banking License from the Federal Deposit Insurance Corporation (FDIC) to originate commercial loans to retailers which use SQ for payment processing.\nGiven all of this positive news, it is not surprising that the stock has rallied over 330% in the last 3 years on the basis of future growth projections and, since 2020, has chased revenue estimates.\nThis was a common occurrence during COVID, as unchartered waters meant that top line growth was imperative for survival. Further, seemingly endless money printing by the Fed, combined with zero rates, meant money flowed into stocks which showed the highest potential for growth.\nSource: Author, using data from YCHARTS (SQ vs EPS Estimates and Revenue Estimates 2021)\nHowever, in Q1 2021, as the printing slowed, yields began to rise and federal transfers to individuals dissipated, and consequently ever increasing revenue estimates began to mean less for the market, resulting in SQ price action ranging between $200 to $280.\nSource: Author, using data from YCHARTS (SQ Price YTD)\nQuantitative\nYear to Date, SQ has been a good performer relative to the payment processing sector, returning ~12% price increases to shareholders.\nSource: Author, using data from YCHARTS (SQ vs Payment Processing Sector >$50 bln Year to Date)\nIt is also not a surprise to see why when evaluated against these companies on a forward earnings and revenue basis. SQ has above average and median earnings growth for 2021 and 2022, as well as strong revenue growth for 2021.\nSource: Author, Sector Comparison (Payment Processors)\nWhilst SQ's forward PE seems exaggerated in contrast to its counterparts, its forward PS is relatively small and below the sector averages and median, perhaps justifying its present value.\nHowever, once you remove Bitcoin revenue from the equation, you get much more exaggerated forward PS estimates on much lower revenue growth, which represents SQ's primary business.\nFor this equation, I have removed Bitcoin revenue from their Q1 2021 results, and judging by average analyst expectations which show little to no sequential revenue growth from Q2-Q4 2021, multiplied this figure by 4x for a year end revenue estimate of $6,140.70 mln. For prior years, I have removed Bitcoin from Revenue.\nSource: Author, SQ Revenue Growth (2018 to 2021 Estimates with Bitcoin vs excl Bitcoin)\nSource: Author, SQ vs Sector Comps (Revenue Estimates excl Bitcoin)\nAs we can see this paints a very different picture of the company, and whilst revenue is still growing slightly above comps which also have high PS ratios, suddenly valuations on earnings look more meaningful and it becomes difficult to justify a forward PE 3x above the average and 4.5x above the median. Especially when companies such as American Express Co (AXP), Mastercard Inc (MA), PayPal Holdings Inc (PYPL) and Visa Inc (V) are producing on average 4x higher EPS. The majority of which pay a dividend and have similar growth estimates with less volatility risk.\nMany will suggest that \"this does not matter as BTC is now part of their revenue metrics and that is that, besides transaction volume is what is important\". However, I would cite the example of the 2018 Bitcoin sell off in which Bitcoin fell 70%, and transaction volumes fell from highs by approximately 75% as well:\nSource: Bitcoinvisuals.com (Bitcoin Market Volume 2018)\nOn a valuation basis, this presents a substantial downside risk to investors if Bitcoin continued to retrace as a result of being met by increased regulation globally, as the company is essentially trading on revenue metrics propped up by Bitcoin. Quite simply, price down in Bitcoin could mean downwards revisions to revenue estimates and consequently a highly volatile retracement in the price of SQ.\nSource: Author, using data from YCHARTS (SQ Price Correlation - Revenue, EPS and EBITDA)\nThis becomes increasingly likely given the historical volatility of the stock when compared to its peers and it is not surprising that it is also becoming a consensus short position.\nSource: Author (SQ vs Sector Comps Implied and Realized Volatility and Short Interest)\nGiven the analysis by another Seeking Alpha contributor,The Value Trend in which the author suggests that SQ's 2025 growth is essentially priced in I would have to agree. SQ's reliance on revenue estimates which have been amplified substantially by Bitcoin present an asymmetric risk to the downside in the short to medium term for investors.\nMacro\nWhilst we are in the process of reopening, many things remain uncertain, such as the level of demand sustainability, job growth and creation, and inflation.\nWhilst the sentiment is overall positive in the media, there are several macroeconomic issues that are beneath the surface which need to be resolved before we can conclude that we are in the clear.\nSmall Business Environment\nSQ's MRQ shows that nearly 49% of the Gross Profit comes from the Seller ecosystem (small businesses).\nSource: SQ Investor Relations (Q1 2021 10Q Page 39 - Segmented Gross Profit)\nThe majority of this is originating from exposure to sellers with <$500,000 Gross Payment Volume (69.5%). This makes square substantially exposed to fluctuations in the small business cycle.\nSource: SQ Investor Relations (Q1 2021 Shareholder Letter)\nDelving into the Business Formation Statistics, there is a rosy picture, with over 500,000 business applications for the month of May, 2021 providing an endless surge of opportunity for SQ.\nSource: Census.gov (Business Applications, May 2021)\nAgain, when we dig deeper and look at the statistics below which rank the optimism of established small businesses, the picture begins to distort and starts to look like the descent into 2008.\nSource: NFIB (Small Business Economic Trends - Optimism, May 2021)\nFurther, when we examine Small Business future outlook on expansion, this has also descended to lows and similar to what was seen in 2008. This could suggest that the bread and butter of SQ's gross profit margin, may not expand at the rate previously seen during 2017 to 2020.\nSource: NFIB (Small Business Economic Trends - Outlook, May 2021)\nAdditionally, it should be noted that the two primary reasons small businesses are giving for their negative outlook are \"Economic Conditions\" and \"Political Climate\", which could be related to the election in 2020, COVID, recent policy changes and be somewhat transitory. Alternatively it could resemble the slow march of 2008 to 2016, we simply do not know, except for the fact it is a low reading and consequently could weigh on SQ's high revenue and earnings growth estimates.\nSource: NFIB (Small Business Economic Trends - Reasons for Outlook, May 2021)\nSmall Business Lending\nLooking forward, SQ clearly aims to solidify its position in the commercial lending space through acquiring a banking license. This is very positive for the company due to their large and growing small business user base,their experience since 2014, and the PPP program, which stopped on May 31, 2021.\nCurrently, bank lending has receded as a result of recovery efforts from COVID.\nSource: YCHARTS (US Commercial Banks - Commercial and Industrial Loans)\nThis can be verified through the credit conditions index in the monthly NFIB report. Although, an American Banker survey is reporting that 86% of small businesses are finding it difficult to access credit, and are having to resort to personal credit.\nThis is positive for SQ as it will allow them to fill the gap for credit to small business within the market. Though I believe it will be short lived as there is speculation that when the Fed tapers, they will also announce the lifting of capital restraints placed on Wells Fargo & Company (WFC).\nSource: Credit Suisse (Global Money Dispatch - 25 May 2021)\nThere is a fairly good probability that this will occur, given that early in 2020 the Fed had lifted these restraints to help small businesses via the PPP program and tapering has a history of upsetting the market. If this occurs, I suspect WFC will become a giant amongst the small business credit space once more and be a very tough competitor to SQ due to their extensive network and history in the space.\nBitcoin, Legislation & Gensler\nBitcoin has been making headlines as of 2H 2020 and much of 1H 2021 for good reason. It is gaining traction amongst retail traders and investors and has shown exceptional appreciation. Further, some minor banks have been interested in the medium although many banks and financial institutions have explicitly banned the purchase of Bitcoin using their services.\nThe primary reasons for their objection is more than likely to do with illicit activities, such as money laundering,terrorism,fake transaction volumes, and similar activities which I do not want to get into and neither do banks.\nConsequently, on the recent hype, many countries are now stepping in to regulate the use of Bitcoin, but others are going a step further and are enacting legislation to ban its use and mining, most notably,China and India.\nThis has had a negative impact on the price of Bitcoin since the ATHs in May 2021 of ~$65,000, retracing -46% since then.\nIt is also extremely negative for Bitcoin going forward as the majority of Bitcoin mining is done in China (~70% YTD) with Hashrates of mining being correlated to the price. Therefore if these recede on decreasing Chinese mining activity, price could surely follow, affecting SQ's Bitcoin holdings and future transaction volumes.\nSource: Cambridge University (Cambridge Bitcoin Electricity Consumption Index YTD)\nWhilst the SEC has come out and said that Bitcoin regulation is not on their agenda for 2021, Gary Gensler has warned investors to be cautious. Gensler is also has a long history on regulations to protect investors, and despite not putting Bitcoin on the agenda for 2021, I advise readers to study his history with respect to 2000 and 2008.\nLooking out further, this does not bode well for Bitcoin and SQ, generally. It is likely that there could be further regulation rather than adoption, negatively impacting its price, leading to a repeat of 2018 lower volumes as well as mining activity.\nGeneral Economy - The Worry for Retail\nSeparately, we could also be seeing a negative situation for retail going forward. Much of the recovery in retail as not been driven by \"pent up demand\" but mostly through subsidies issued throughout 2020 and the start of 2021. When examining the graph below, we can see that once you subtract transfer receipts (government stimulus cheques and employment benefits - red line), income is not what it used to be.\nSource: Federal Reserve Bank of St. Louis (Disposable Income vs Real Income minus Transfers vs Personal Savings vs Retail Trade Sales)\nAdditionally, we can see that much of the spikes in retail sales (purple) have been driven mainly through the stimulus cheques which bolstered disposable income (blue) and consumer savings (green), though now stimulus has ended and people are having to start to dig into their savings, which is dropped 54% month on month between March and April.\nThe consumer spending situation is made worse when examining U6 unemployment, which is considered to be the most revealing amongst economists as it includes unemployed, underemployed and discouraged job seekers. This, generally speaking, does not bode well for consumer discretionary spending patterns going forward.\nSource: Macrotrends.net (U6 Unemployment Rate vs U5 vs Official)\nFinally, the rising cost of food and energy, which for food I expect to continue, should hamper consumer discretionary spend going forward. I have previously written articles on The Mosaic Company (MOS)hereand The Andersons (ANDE)here, which outline my justification for this trend.\nIn relation to SQ, we can see their historical exposure to consumer discretionary spend based on end 2019 data. When taking into account figures from: retail; professional services, beauty and personal care, home and repair, leisure and entertainment, and casual use, the total exposure is approximately 59%.\nSource: Statista (Raynor de Best - GPV by Seller Industry Dec 2019)\nWhilst this may not impact its revenue figures substantially due to the weighting of bitcoin, I do expect this to undermine is gross profit figures going forward and negatively impact margins as stimulus further fades.\nFinancials\nBitcoin\nWhen examining the financials of SQ we can easily see that Bitcoin is the predominant factor driving its revenue growth (MRQ 69% of total revenue) of which its valuation is derived (see above Introduction section - SQ Price vs Revenue Segments; and Quantitative section - SQ Price correlation).\nFrom their Q1 2021 Shareholder Letter, page 12 they have stated that on March 31, 2021 the fair value of their holdings was $472 million. On this date the closing price was $58,918.83, or approximately 8,011 Bitcoins. They also state they initially invested $200 million into bitcoin during this period and Q4, so their average price is roughly $25,000 per Bitcoin.\nCurrently, the price of Bitcoin sits at approximately $34,600 and it also appears to be struggling to find traction, especially when you examine some other trends. For example, looking at search trends of \"Buy Bitcoin\" on Google Trends, this is clearly waning.\nSource: Google Trends (Buy Bitcoin search terms - Worldwide 5 Yrs)\nAdditionally, when you align this data with stimulus payments it is clear there is a relationship between the two in 2H 2020, and much of the recent speculation could be driven by government subsidies.\nSource: USA.Gov (COVID Stimulus Cheque Dates)\nThe spike in searches occurs roughly around the time of the two latter government stimulus cheques with a lag of a few days to a few weeks.\nSource: Google Trends (Buy Bitcoin search terms - USA 12 Months)\nThis also coincides with Bitcoin's price run up in December 2020 and January 2021, as well the failed rally in March and April 2021.\nSource: YCHARTS (Bitcoin Price 1 Yr)\nThus, in this example, if we have a continued sell off of -70%, which is similar to what occurred in 2018. We would be back at November 2020 Bitcoin prices of $20,000 approximately.\nThis is still feasible on the basis of dwindling volume, further legislation and declining hashrates. It could also be theorized that SQ may carry an impairment charge of $40 million, which would greatly affect operating income, net income and shareholder earnings and future estimates. Though this is purely theoretical without accounting for transactions in the current quarter, such as purchases or sales at or near ATHs.\nAdditionally, with the lack of stimulus payments going forward and tighter consumer discretionary spend, the revenue generated from Bitcoin may also decline as less money enters the space and volumes decline. Negatively impacting revenue estimates for SQ and subsequently their price and valuation.\nCash App\nOn the surface, it looks like Cash App is growing exponentially into a viable platform for users to transact, with more than 36 million monthly transacting active customers, up 50% YoY.\nSource: SQ Investor Relations (Q4 2020 Shareholder Letter)\nHowever, this growth in Cash App may be unsustainable going forward, with SQ elaborating on this in their Quarterly filing notes:\n\n Cash App revenue benefited from growth in numbers of active Cash App customers and from \n government relief programs most recently passed into law in late December 2020 and in March 2021, as well as cumulative benefit from earlier stimulus programs passed in 2020. These programs provided additional stimulus relief and unemployment benefits which resulted in an increase in consumer spending and inflows into our Cash App ecosystem. Cash App revenue growth may not be sustained at the same levels in future quarters and may be impacted by the enactment of further stimulus relief and benefit programs, as well as the demand and market prices for bitcoin, amongst other factors.\n\n\nSource: SQ Investor Relations (Q1 2021 10Q Filings - Page 49)\n\nPart of the issue with Cash App is theoretical continued use and future adoption. Much of the growth seen over the last year was predominantly fueled by stimulus payments through the Cash App ecosystem, and therefore by necessity given the circumstances.\nThe two sharp spikes in searches for the app occurred on:\n\nApril 12-18 2020\nJanuary 24-30 2021\n\nThese coincide with stimulus payments as they initially sent them and they gradually deposited them into people's accounts.\nSource: Google Trends (Cash App search terms - USA 5 Years)\nTherefore, as government stimulus payments end, and Bitcoin again fades from relevancy, and more people return to work and day-trade less, this could negatively impact user growth metrics going forward, impacting SQ revenue estimates, gross profit figures, and its earnings.\nFurther, there are a multitude of other more viable platforms, which another Seeking Alpha contributor,The Value Trend, has elaborated onhere.\nIt is also important to keep in mind how they define these users, a \"Transacting active Cash App customer\" is the following:\n\n ... has at least\n one financial transactionusing any product or service within Cash App during the specified period.\n\n\nSource: SQ Investor Relations (Q4 2020 Shareholder Letter - Page 4)\n\nSo, if a customer received their wages from an employer, or unemployment benefit, into Cash App once per month, and transferred all of it to their bank account once per month, they are a \"transacting active Cash App customer\"...\nPerhaps a better quantifier of an \"active\" customer would be greater than 5 transactions.\nTechnicals\nExamining the technicals of SQ, it is clear that the stock is now ranging between $200 and $280, with several breakout attempts at $250 and 2 failed attempts near $300, showing several signs that momentum is dying out.\nSource: Author, with data from FINVIZ (SQ Chart)\nWhen examining dark pool order flows, there is a possibility for the current rally to continue as dark pools are at lows, which may likely continue into earnings by August. Although I would not get my hopes up unless some seriously good news occurs and Bitcoin rallies back to ATHs.\nSource: Squeezemetrics.com (SQ Dark Pools vs Implied Vol 2 Years)\nFrom the 13F filings, we can also see that many funds have reduced exposure and closed their positions, with fewer new positions being added. The Put to Call ratio is also becoming quite high, especially on a stock that has $100 bln market cap, signaling that we are not the only ones thinking the same thing.\nCaution is required though, as SQ's issues with Bitcoin are obviously becoming a consensus trade, and when those puts are lifted, gamma may turn positive and it could cause the stock to rally significantly.\nSource: Whalewisdom.com (SQ Funds Positioning)\nFurther, with relation to ARK ETFs, it is no surprise that there have been significant liquidity issues the last 6 months, and I agree with another Seeking Alpha contributor's thesisherethat we will see a reversion to the mean with respect to prices of stocks held in these ETFs. What can be noted is that Cathie has significantly reduced her exposure to SQ and that she may be picking her battles.\nSource: Cathiesark.com (SQ Shares Held - All ETFs)\nGiven the above information, this is a difficult company to be short. It will either payoff enormously, or rip your face off due to its volatility. Additionally there are many funds wanting some small level of exposure to a company with Bitcoin on the financial statements. Therefore, if you were to trade this as a short at your own risk, discretion is advised and you should always pick your battles.\nPrice Targets\nOn the basis of volatility through SQ's ATR it is possible that SQ could move to a low of approximately $100 by the end of the year, moving in favor 40% of the time. This aligns with my year end 2021 price if you remove Bitcoin entirely from the equation.\nSource: Author (SQ ATR Calculator)\nHowever, it would not be sensible to do this as it is part of their revenue for the time being, no matter how high Bitcoin volumes were in the start of 2021 and how low they may be at the end of the year.\nI do expect the stock to fall again and retest $200, possibly breaking down to $160. Though it is very difficult to determine a valuation with SQ, mainly because the valuation is derived from Bitcoin revenues, and also the perceived value by funds and the market in the future adoption of the asset.\nIf the market begins to perceive Bitcoin again as irrelevant, I would expect SQ to slowly sell off to between $150 and $160 (-37% downside) with a low probability that it will rally past $300 (25% upside).\nRisks\nWith respect to SQ the following risks should be noted.\nThe company is growing, whether you like SQ or not. The main questions are: Will the market value Bitcoin on any realistic basis? How much is it growing with and without Bitcoin? What is the potential future growth with and without Bitcoin? And does the market believe it, or for that matter care?\nIf the Bitcoin fades from relevancy, and judging by Google Trends, it is more likely than it is not, it is not outlandish to assume that SQ will suffer as a result of this and over the 2H 2021 and take a substantial hit to revenue estimates. However, if Bitcoin adoption increases and negative news fades, since this is a growth company, it could simply continue rallying.\nFurther, consumer spending patterns are producing mixed data, and above I have presented a bear case. This could easily turn the other way if people's behavior changes, such as applying for jobs which will increase spending in the economy and hopefully produce small business growth and increase small business optimism and expansion, which is very beneficial for SQ as a cyclical business in the payment processing space.\nAgain, caution is necessary, though I do think that future growth of the company is priced in and there is a higher risk to holders of SQ to the downside than to the upside.\nSummary\nSQ is a high growth company with some potential positive points in the long run; however, its valuation is highly questionable due to its high revenue estimates predominantly derived from Bitcoin transactions and not bottom-line earnings growth.\nFrom a quantitative perspective, it looks good amongst its peers but upon further examination it appears to be extremely overvalued as future growth, at least for 2021, may be derived from Bitcoin. Further, its Cash App adoption statistics may not continue to see the same run rate going forward without continued government stimulus.\nAdditionally, it faces several potential macroeconomic hurdles with respect to small business exposure, lending competitors, consumer transaction competitors, Bitcoin legislation and softening retail demand.","news_type":1},"isVote":1,"tweetType":1,"viewCount":180,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":127985554,"gmtCreate":1624816263578,"gmtModify":1703845493937,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"good to adapt","listText":"good to adapt","text":"good to adapt","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/127985554","repostId":"2146100198","repostType":2,"repost":{"id":"2146100198","kind":"news","pubTimestamp":1624750500,"share":"https://ttm.financial/m/news/2146100198?lang=&edition=fundamental","pubTime":"2021-06-27 07:35","market":"sh","language":"zh","title":"谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化”","url":"https://stock-news.laohu8.com/highlight/detail?id=2146100198","media":"cnBeta","summary":"作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。","content":"<html><body><p>原标题：<a href=\"https://laohu8.com/S/GOOG\">谷歌</a>改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM</p><p>我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。</p><p>在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。 在 2020 年 4 月的更新中，当搜索无法找到与用户查询特别匹配的结果时 ，Google就会通知用户。在 2021 年 2 月，Google推出了“关于此结果”的功能，可提供有关特定搜索结果的更多附加信息。</p><p>根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。</p><div><img src=\"http://k.sinaimg.cn/n/spider2021627/213/w700h313/20210627/12cb-krwipar7144099.jpg/w720fin.jpg\"/></div><p>Google以上面的搜索结果作为示例，在有人搜索“ufo filmed traveling 106 mph”（拍摄到的以 106 英里/小时飞行的 UFO），结果会返回一条消息，告诉用户要小心他们看到的第一个结果，因为事情正在迅速变化： It looks like these results are changing quickly（看起来这些结果在快速变化）。</p><p>如果此主题是新主题，有时可能需要时间才能通过可靠来源添加结果。该警告只会出现在突发新闻类型的情况下，随着更多信息的进入，结果可能会有所不同。但它可能足以指示互联网用户在与他人分享可能不完整的信息之前保持谨慎。</p><p>一些互联网用户已经开始在搜索中收到这些提示，但您的里程会有所不同。大多数互联网搜索不符合条件，因为此 Google 搜索算法更改只会影响与正在发展的、正在进行的事件相关的结果。</p></body></html>","source":"sina_symbol","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; 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height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化”\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-27 07:35 北京时间&nbsp;&nbsp;&nbsp;<a href=https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml><strong>cnBeta</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>原标题：谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。...</p>\n\n<a href=\"https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.tigerbbs.com/7cb1a202ad9a99e9e2852de348daca32","relate_stocks":{"GOOGL":"谷歌A","03086":"华夏纳指","QNETCN":"纳斯达克中美互联网老虎指数","GOOG":"谷歌","09086":"华夏纳指-U"},"source_url":"https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml","is_english":false,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146100198","content_text":"原标题：谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。 在 2020 年 4 月的更新中，当搜索无法找到与用户查询特别匹配的结果时 ，Google就会通知用户。在 2021 年 2 月，Google推出了“关于此结果”的功能，可提供有关特定搜索结果的更多附加信息。根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。Google以上面的搜索结果作为示例，在有人搜索“ufo filmed traveling 106 mph”（拍摄到的以 106 英里/小时飞行的 UFO），结果会返回一条消息，告诉用户要小心他们看到的第一个结果，因为事情正在迅速变化： It looks like these results are changing quickly（看起来这些结果在快速变化）。如果此主题是新主题，有时可能需要时间才能通过可靠来源添加结果。该警告只会出现在突发新闻类型的情况下，随着更多信息的进入，结果可能会有所不同。但它可能足以指示互联网用户在与他人分享可能不完整的信息之前保持谨慎。一些互联网用户已经开始在搜索中收到这些提示，但您的里程会有所不同。大多数互联网搜索不符合条件，因为此 Google 搜索算法更改只会影响与正在发展的、正在进行的事件相关的结果。","news_type":1},"isVote":1,"tweetType":1,"viewCount":420,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":124124104,"gmtCreate":1624754888408,"gmtModify":1703844398226,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Good!","listText":"Good!","text":"Good!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/124124104","repostId":"2146028795","repostType":2,"repost":{"id":"2146028795","kind":"highlight","weMediaInfo":{"introduction":"Reuters.com brings you the latest news from around the world, covering breaking news in markets, business, politics, entertainment and technology","home_visible":1,"media_name":"Reuters","id":"1036604489","head_image":"https://static.tigerbbs.com/443ce19704621c837795676028cec868"},"pubTimestamp":1624591018,"share":"https://ttm.financial/m/news/2146028795?lang=&edition=fundamental","pubTime":"2021-06-25 11:16","market":"us","language":"en","title":"Berkshire Hathaway appears to buy back more stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2146028795","media":"Reuters","summary":"June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc appears to have extended its drive to re","content":"<p>June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc&nbsp;appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.</p>\n<p>Edward Jones &amp; Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.</p>\n<p>Berkshire did not immediately respond on Thursday to a request for comment.</p>\n<p>Buffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.</p>\n<p>\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.</p>\n<p>Berkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.</p>\n<p>Its last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.</p>\n<p>\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in <a href=\"https://laohu8.com/S/AONE\">one</a>'s stock.\"</p>\n<p>Berkshire may discuss buybacks in its financial report for the second quarter, likely in early August.</p>\n<p>On Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.</p>\n<p>The donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.</p>\n<p>That stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.</p>\n<p>The dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.</p>\n<p>Repurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.</p>\n<p>Berkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc</p>\n<p>and $Bank of America Corp(BAC-N)$ .</p>\n<p>Shanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Berkshire Hathaway appears to buy back more stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBerkshire Hathaway appears to buy back more stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1036604489\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/443ce19704621c837795676028cec868);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Reuters </p>\n<p class=\"h-time\">2021-06-25 11:16</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc&nbsp;appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.</p>\n<p>Edward Jones &amp; Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.</p>\n<p>Berkshire did not immediately respond on Thursday to a request for comment.</p>\n<p>Buffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.</p>\n<p>\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.</p>\n<p>Berkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.</p>\n<p>Its last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.</p>\n<p>\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in <a href=\"https://laohu8.com/S/AONE\">one</a>'s stock.\"</p>\n<p>Berkshire may discuss buybacks in its financial report for the second quarter, likely in early August.</p>\n<p>On Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.</p>\n<p>The donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.</p>\n<p>That stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.</p>\n<p>The dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.</p>\n<p>Repurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.</p>\n<p>Berkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc</p>\n<p>and $Bank of America Corp(BAC-N)$ .</p>\n<p>Shanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"</p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BRK.A":"伯克希尔","BRK.B":"伯克希尔B"},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146028795","content_text":"June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.\nEdward Jones & Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.\nBerkshire did not immediately respond on Thursday to a request for comment.\nBuffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.\n\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.\nBerkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.\nIts last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.\n\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in one's stock.\"\nBerkshire may discuss buybacks in its financial report for the second quarter, likely in early August.\nOn Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.\nThe donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.\nThat stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.\nThe dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.\nRepurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.\nBerkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc\nand $Bank of America Corp(BAC-N)$ .\nShanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"","news_type":1},"isVote":1,"tweetType":1,"viewCount":529,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":121210579,"gmtCreate":1624464948591,"gmtModify":1703837682883,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"bankrupt country :(","listText":"bankrupt country :(","text":"bankrupt country :(","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/121210579","repostId":"1191722749","repostType":4,"repost":{"id":"1191722749","kind":"news","pubTimestamp":1624455982,"share":"https://ttm.financial/m/news/1191722749?lang=&edition=fundamental","pubTime":"2021-06-23 21:46","market":"us","language":"en","title":"The Fed In A Box, Part 1: They Cannot Raise Interest Rates","url":"https://stock-news.laohu8.com/highlight/detail?id=1191722749","media":"zerohedge","summary":"3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, mak","content":"<p><b>3 Key Takeaways</b></p>\n<ol>\n <li>The US Government has over $28 Trillion in Debt</li>\n <li>Much of the debt is short-term, making it extra sensitive to higher rates</li>\n <li>Higher Interest Rates would immediately start putting strain on the Federal Budget</li>\n</ol>\n<p><b>Introduction</b></p>\n<p>The US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.</p>\n<p>First and foremost, this took pressure off the Treasury as it refinanced the ballooning short-term debt outstanding at lower rates. However, even more relief occurred as the Federal Reserve absorbed +90% of the long term debt issued since last March. This allowed more room in the private markets to purchase the issuance of new short-term Treasury Bills. Because the Fed pays interest revenue back to the Treasury, and since interest rates on Treasury Bills are sitting at 0%, this has effectively given the Treasury a&nbsp;<b>$4.5T loan at 0% interest</b>&nbsp;in 15 months!</p>\n<p>While this sounds like a great deal, it comes with major risks and has now put the Fed in a box. This will be explained in detail over two articles. Part 1 will explain why the Fed can no longer raise interest rates, and Part 2 will show how the Fed is unable to taper and may even need to increase Treasury purchases to maintain control over the long end of the yield curve.</p>\n<p><b>$28 Trillion and Growing</b></p>\n<p>The US Government cannot stop spending money. Spending is now far in excess of what is being collected in tax revenues. The US economy continues to experience nominal increases in growth, which has increased Federal Tax receipts, but Federal Spending is growing far faster. Figure 1 below, shows this clear trend.</p>\n<p><img src=\"https://static.tigerbbs.com/8b5576e9901f1f8310629d45af16836a\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>Excess spending has to be paid for using debt. This massive excess in spending has led to proliferate borrowing by the Federal Government resulting in over $28T in total debt outstanding. See figure 2 below.</p>\n<p><img src=\"https://static.tigerbbs.com/ed345b06ec4a35726fe7d9847937cf34\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>For anyone struggling to wrap their mind around the size of $1T, please see this great&nbsp;visual. Now, multiply that by 28!</p>\n<p>For most governments, this would be unsustainable as interest rates would rise. This puts pressure on a borrower to bring down spending. The US Government has benefited from three major advantages that are not available to most governments. First, it has the exorbitant privilege of issuing the global reserve currency (for now), which creates far more demand for dollars than would otherwise be the case. The&nbsp;petro-dollar&nbsp;should have its own dedicated article, so that will be skipped in this analysis.</p>\n<p>It is important to highlight two other key facts that have allowed spending and borrowing to continue unabated. It has been able to borrow from the Social Security Trust Fund, and the Federal Reserve has absorbed a large chunk of debt issuance in recent years. Not only does this equate to $11T in interest-free loans (as all interest payments return back to the Treasury), but it has prevented the private markets from absorbing all new debt issuance keeping interest rates lower. As Figure 3 below shows, since Jan 2010, the private markets have “only” had to absorb $9T of the $14.5T issued.</p>\n<p><img src=\"https://static.tigerbbs.com/2dee6e735c0a3c1421eb321c0eae4b54\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov andhttps://fred.stlouisfed.org/</i></p>\n<p>Since Jan 2020, the numbers are even more stark. The Treasury has issued $4.5T, of which the Fed has taken on $2.6T (<i>Note: The Fed balance sheet has expanded by greater than $4T, but not all of this was Treasury Debt</i>). Looking deeper into the numbers shows the Fed had an even bigger appetite for longer-dated maturities. With Short Term rates at 0%, the Treasury can sell Treasury Bills to the private sector and still have an interest-free loan. Thus, it has been critical for the Fed to absorb almost all (~90%) the long-term debt issued by the Treasury to keep interest payments low!</p>\n<p><img src=\"https://static.tigerbbs.com/89bf299c6c054e65d3317aa72d0f686a\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><b>The Treasury has so far avoided higher interest payments</b></p>\n<p>Zooming back out, the three charts below show why the maneuvers over the last year have been so important. Take one more look at the US Debt load, this time categorized by vehicle. Non-Marketable is debt the government owes itself, Notes represent 1-10 year maturity, Bills less than 1 year, and Bonds &gt;10 years. The two charts below show both the absolute growth in debt and how the makeup of the debt has changed. Since 2008, Notes have experienced the largest growth increasing from 25% of total outstanding to 42%. Non-Marketable went the other way, shrinking from 45% to 25% as the Social Security Trust Fund is no longer a source to borrow from.</p>\n<p><img src=\"https://static.tigerbbs.com/a144f0f9250c364637205e8bd0178bc0\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><img src=\"https://static.tigerbbs.com/2c1851784731b81544c30c5338624a03\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>It is important to notice the growth in Treasury Bills above. Bills are the highest risk to the Treasury because higher interest rates will affect Bills within months, so it is important to note that in 2015 during the last rate hike cycle they accounted for only $1.4T but now make up $4.3T. This means every .25% rate hike will almost immediately add $10B to Federal spending. The chart below clearly shows the impact of the last interest rate hike cycle. The Pink line shows how Bills followed the Fed hike cycle topping out near 2.25%.</p>\n<p>If the Fed attempted to raise rates in a similar fashion it would immediately add $100B to Federal Spending on ONLY interest due for Treasury Bills. In a scenario where the Fed shrunk its balance sheet back to $1T (no more interest free loans) AND raised interest rates back to 4%, the Treasury would incur an extra $160B in interest rates for Treasury Bills and a whopping $290B on Treasury Notes! This would not factor in any new debt added over that time, which now includes an extra $.5T a year just on interest payments!</p>\n<p><img src=\"https://static.tigerbbs.com/04501c54f465fba412ffbf77b81a559f\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>The chart below shows a much clearer impact of how falling interest rates have kept debt payments relatively stable for nearly 20 years. The chart shows the average weighted interest rate and the annualized monthly interest payments. The orange line (average weighted interest rate) is moving in direct opposition to the growth in debt seen above. In the last rate tightening cycle, the chart shows just how quickly higher interest rates increased the debt burden ($150B). The Fed owns very few Treasury Bills ($320B), so those interest payments are NOT returning to the Treasury.</p>\n<p><img src=\"https://static.tigerbbs.com/c859933a1e991d3e6ba191ccb6a7609e\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>One final chart to consider. How do these interest payments compare to tax revenue collected by the IRS? In this context, it becomes very clear how much impact the 2015 rate cycle increases had on debt payments.</p>\n<p><img src=\"https://static.tigerbbs.com/585708ace254d0b79ecddcc77c9c8ca0\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><b>Wrapping Up</b></p>\n<p>Nothing in this article should be surprising to anyone who even closely watches the US Debt situation or follows financial markets. The charts and graphs attempted to show the trends and put hard numbers behind what most people already know anecdotally. This article does not even touch on how devastating higher interest rates would be on the housing market, corporate debt market, and consumer debt market. Instead it only focuses on the Treasury, which just so happens to be run by the old chair of the Federal Reserve (Janet Yellen).</p>\n<p>None of this math is overly complex, and all the data is freely available on the Treasury and Fed website. This begs the question, does the Fed realize interest rates cannot go up or are they only looking in the rear-view mirror and assuming that an increase to 2.25% will be similar to 2015 which was “only” derailed by COVID-19? To reiterate, the drop in interest rates gave the Treasury&nbsp;<i>relief</i>&nbsp;from the higher interest payments. Next time they might not even get halfway to 2% with the added debt burden.<b>Unfortunately, for the Fed, their box is tighter than most realize.</b>If the Fed hasn’t figured it out by now,<b>even before they fail to raise interest rates, they will be unable taper Quantitative Easing (debt monetization) much less shrink their balance sheet, without serious consequences.</b>That data will be reviewed in Part 2. Stay tuned!</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Fed In A Box, Part 1: They Cannot Raise Interest Rates</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Fed In A Box, Part 1: They Cannot Raise Interest Rates\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-23 21:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, making it extra sensitive to higher rates\nHigher Interest Rates would immediately start putting strain ...</p>\n\n<a href=\"https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1191722749","content_text":"3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, making it extra sensitive to higher rates\nHigher Interest Rates would immediately start putting strain on the Federal Budget\n\nIntroduction\nThe US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.\nFirst and foremost, this took pressure off the Treasury as it refinanced the ballooning short-term debt outstanding at lower rates. However, even more relief occurred as the Federal Reserve absorbed +90% of the long term debt issued since last March. This allowed more room in the private markets to purchase the issuance of new short-term Treasury Bills. Because the Fed pays interest revenue back to the Treasury, and since interest rates on Treasury Bills are sitting at 0%, this has effectively given the Treasury a $4.5T loan at 0% interest in 15 months!\nWhile this sounds like a great deal, it comes with major risks and has now put the Fed in a box. This will be explained in detail over two articles. Part 1 will explain why the Fed can no longer raise interest rates, and Part 2 will show how the Fed is unable to taper and may even need to increase Treasury purchases to maintain control over the long end of the yield curve.\n$28 Trillion and Growing\nThe US Government cannot stop spending money. Spending is now far in excess of what is being collected in tax revenues. The US economy continues to experience nominal increases in growth, which has increased Federal Tax receipts, but Federal Spending is growing far faster. Figure 1 below, shows this clear trend.\n\nSource – Treasurydirect.gov\nExcess spending has to be paid for using debt. This massive excess in spending has led to proliferate borrowing by the Federal Government resulting in over $28T in total debt outstanding. See figure 2 below.\n\nSource – Treasurydirect.gov\nFor anyone struggling to wrap their mind around the size of $1T, please see this great visual. Now, multiply that by 28!\nFor most governments, this would be unsustainable as interest rates would rise. This puts pressure on a borrower to bring down spending. The US Government has benefited from three major advantages that are not available to most governments. First, it has the exorbitant privilege of issuing the global reserve currency (for now), which creates far more demand for dollars than would otherwise be the case. The petro-dollar should have its own dedicated article, so that will be skipped in this analysis.\nIt is important to highlight two other key facts that have allowed spending and borrowing to continue unabated. It has been able to borrow from the Social Security Trust Fund, and the Federal Reserve has absorbed a large chunk of debt issuance in recent years. Not only does this equate to $11T in interest-free loans (as all interest payments return back to the Treasury), but it has prevented the private markets from absorbing all new debt issuance keeping interest rates lower. As Figure 3 below shows, since Jan 2010, the private markets have “only” had to absorb $9T of the $14.5T issued.\n\nSource – Treasurydirect.gov andhttps://fred.stlouisfed.org/\nSince Jan 2020, the numbers are even more stark. The Treasury has issued $4.5T, of which the Fed has taken on $2.6T (Note: The Fed balance sheet has expanded by greater than $4T, but not all of this was Treasury Debt). Looking deeper into the numbers shows the Fed had an even bigger appetite for longer-dated maturities. With Short Term rates at 0%, the Treasury can sell Treasury Bills to the private sector and still have an interest-free loan. Thus, it has been critical for the Fed to absorb almost all (~90%) the long-term debt issued by the Treasury to keep interest payments low!\n\nSource – Treasurydirect.gov\nThe Treasury has so far avoided higher interest payments\nZooming back out, the three charts below show why the maneuvers over the last year have been so important. Take one more look at the US Debt load, this time categorized by vehicle. Non-Marketable is debt the government owes itself, Notes represent 1-10 year maturity, Bills less than 1 year, and Bonds >10 years. The two charts below show both the absolute growth in debt and how the makeup of the debt has changed. Since 2008, Notes have experienced the largest growth increasing from 25% of total outstanding to 42%. Non-Marketable went the other way, shrinking from 45% to 25% as the Social Security Trust Fund is no longer a source to borrow from.\n\nSource – Treasurydirect.gov\n\nSource – Treasurydirect.gov\nIt is important to notice the growth in Treasury Bills above. Bills are the highest risk to the Treasury because higher interest rates will affect Bills within months, so it is important to note that in 2015 during the last rate hike cycle they accounted for only $1.4T but now make up $4.3T. This means every .25% rate hike will almost immediately add $10B to Federal spending. The chart below clearly shows the impact of the last interest rate hike cycle. The Pink line shows how Bills followed the Fed hike cycle topping out near 2.25%.\nIf the Fed attempted to raise rates in a similar fashion it would immediately add $100B to Federal Spending on ONLY interest due for Treasury Bills. In a scenario where the Fed shrunk its balance sheet back to $1T (no more interest free loans) AND raised interest rates back to 4%, the Treasury would incur an extra $160B in interest rates for Treasury Bills and a whopping $290B on Treasury Notes! This would not factor in any new debt added over that time, which now includes an extra $.5T a year just on interest payments!\n\nSource – Treasurydirect.gov\nThe chart below shows a much clearer impact of how falling interest rates have kept debt payments relatively stable for nearly 20 years. The chart shows the average weighted interest rate and the annualized monthly interest payments. The orange line (average weighted interest rate) is moving in direct opposition to the growth in debt seen above. In the last rate tightening cycle, the chart shows just how quickly higher interest rates increased the debt burden ($150B). The Fed owns very few Treasury Bills ($320B), so those interest payments are NOT returning to the Treasury.\n\nSource – Treasurydirect.gov\nOne final chart to consider. How do these interest payments compare to tax revenue collected by the IRS? In this context, it becomes very clear how much impact the 2015 rate cycle increases had on debt payments.\n\nSource – Treasurydirect.gov\nWrapping Up\nNothing in this article should be surprising to anyone who even closely watches the US Debt situation or follows financial markets. The charts and graphs attempted to show the trends and put hard numbers behind what most people already know anecdotally. This article does not even touch on how devastating higher interest rates would be on the housing market, corporate debt market, and consumer debt market. Instead it only focuses on the Treasury, which just so happens to be run by the old chair of the Federal Reserve (Janet Yellen).\nNone of this math is overly complex, and all the data is freely available on the Treasury and Fed website. This begs the question, does the Fed realize interest rates cannot go up or are they only looking in the rear-view mirror and assuming that an increase to 2.25% will be similar to 2015 which was “only” derailed by COVID-19? To reiterate, the drop in interest rates gave the Treasury relief from the higher interest payments. Next time they might not even get halfway to 2% with the added debt burden.Unfortunately, for the Fed, their box is tighter than most realize.If the Fed hasn’t figured it out by now,even before they fail to raise interest rates, they will be unable taper Quantitative Easing (debt monetization) much less shrink their balance sheet, without serious consequences.That data will be reviewed in Part 2. Stay tuned!","news_type":1},"isVote":1,"tweetType":1,"viewCount":387,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":164925721,"gmtCreate":1624167087063,"gmtModify":1703830021620,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"But nobody can tell when","listText":"But nobody can tell when","text":"But nobody can tell when","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/164925721","repostId":"1126454279","repostType":4,"repost":{"id":"1126454279","kind":"news","pubTimestamp":1624151746,"share":"https://ttm.financial/m/news/1126454279?lang=&edition=fundamental","pubTime":"2021-06-20 09:15","market":"us","language":"en","title":"A Stock Market Crash Is Coming: 5 High-Conviction Stocks to Buy Hand Over Fist When It Happens","url":"https://stock-news.laohu8.com/highlight/detail?id=1126454279","media":"fool","summary":"It might be the last thing you want to hear, but it's the truth:A stock market crash is inevitable.\n","content":"<p>It might be the last thing you want to hear, but it's the truth:A stock market crash is inevitable.</p>\n<p>Since the March 23, 2020 bottom, investors have enjoyed a historically strong bounce-back rally -- the widely followed<b>S&amp;P 500</b>(SNPINDEX:^GSPC)has gained an impressive 90%. But both history and valuation metrics unequivocally suggest that a big drop is upcoming for the stock market.</p>\n<p><b>History is pretty clear that trouble lies ahead</b></p>\n<p>For example, there have beenone or two double-digit percentage declineswithin the three years following a bottom in each of the previous eight bear markets prior to the coronavirus crash (i.e., dating back to 1960). Although bull markets tend to last years, rebounds from a bear market are never this smooth. We're nearly 15 months past the March 2020 bear-market bottom in the S&amp;P 500 and have yet to see anything close to a double-digit correction.</p>\n<p>To add to this point, data from market analytics firm Yardeni Research shows that there have been 38 double-digit declines in the S&amp;P 500 over the past 71 years. That's a crash or correction, on average,every 1.87 years. Though the market doesn't adhere to averages, it does give a general sense of when to expect these hiccups.</p>\n<p>On a valuation basis, the S&amp;P 500's Shiller price-to-earnings (P/E) ratio is a waving red flag. The S&amp;P 500's Shiller P/E -- a measure of inflation-adjusted earnings over the previous 10 years -- almost hit 38 earlier this week. That more than doubles its 151-year average, and it's the highest level in nearly two decades. The previous four times the Shiller P/E surpassed and held above 30 during a bull market rally, the indexsubsequently declined by a minimum of 20%.</p>\n<p>Make no mistake about it -- a stock market crash is coming.</p>\n<p>Every crash or correction is an opportunity for patient investors to make money</p>\n<p>However, a crash is no reason to duck and cover. While history may signal trouble ahead, it also tells us that each and every double-digit decline has been a buying opportunity. Eventually, every big drop in the major indexes is erased by a bull-market rally. When the next crash does occur, the following five high-conviction stocks can be confidently bought hand over fist.</p>\n<p><b>CrowdStrike Holdings</b></p>\n<p>Cybersecurity is projected to beone of the safest double-digit growth trendsthis decade. No matter the size of the business or the state of the U.S./global economy, protecting enterprise and consumer data is paramount. This means cloud-based cybersecurity stock<b>CrowdStrike Holdings</b>(NASDAQ:CRWD)can thrive in any environment.</p>\n<p>CrowdStrike's successderives from its cloud-native Falcon security platform. Because it's built in the cloud and relies on artificial intelligence, it's growing smarter at identifying and responding to threats all the time. It's currently overseeing 6 trillion events on a weekly basis, and it's far more cost-effective at protecting data than on-premise solutions.</p>\n<p>We can also look to the company's income statements to see clear-cut evidence that businesses favor CrowdStrike's cybersecurity platform. It's been retaining 98% of its clients, has seen existing clients spend 23% to 47% more on a year-over-year basis for the past 12 quarters, and recently reported that 64% of its customers have purchased at least four cloud module subscriptions. Scaling with its customers is CrowdStrike's ticket to big-time cash flow expansion.</p>\n<p><b>Facebook</b></p>\n<p>Brand-name businesses can make patient investors a fortune, and social media giant<b>Facebook</b>(NASDAQ:FB)is the perfect example.</p>\n<p>When the curtain closed on March, Facebook tallied 2.85 billion monthly active users (MAU) visiting its namesake site and an additional 600 million unique MAUs visiting WhatsApp or Instagram, which it also owns. All told, this equates to44% of the global populationinteracting with its owned sites each month. There's simply no social media platform businesses can go to get their message to a broader (or potentially targeted) audience, which is why Facebook ad-pricing power is so strong.</p>\n<p>But here's the kicker: Facebookhasn't even put the pedal to the metal. Although it's on track to generate more than $100 billion in advertising revenue in 2021, nearly all of these ad sales are coming from its namesake site and Instagram. WhatsApp and Facebook Messenger, which are two of the six most-visited social sites in the world, aren't being meaningfully monetized as of yet. Further, the company's Oculus virtual reality devices are still in the early stage of their growth. Suffice it to say, Facebook offers ample upside as its other operating segments are monetized and mature.</p>\n<p><b>NextEra Energy</b></p>\n<p>Another high-conviction stock to buy hand over fist the next time a crash or steep correction strikes is electric utility stock<b>NextEra Energy</b>(NYSE:NEE).</p>\n<p>Did I put you to sleep when I said \"electric utility stock?\" Electric utilities are traditionally known for their market-topping dividend yields and persistently low growth rates. But this doesn't describe NextEra Energy. NextEra has aggressively invested in renewable energy projects and is leading the country in solar and wind capacity. As a result of these investments, its electric generation costs have declined and its compound annual growth ratehas consistently been in the high single digitsfor more than a decade. It also doesn't hurt that NextEra is front-running any potential green-energy legislation that might come out of Washington.</p>\n<p>In addition to growth rates that are well above the sector average, NextEra still benefits from the predictability of energy demand. For instance, its regulated utilities (i.e., those not powered by renewable energy) require approval from state utility commissions before price hikes can be passed along to households. This might sound like an inconvenience, but it's actually great news. It means NextEra won't be exposed to potentially volatile wholesale pricing.</p>\n<p><b>Visa</b></p>\n<p>When the next stock market crash arrives, payment processing kingpin<b>Visa</b>(NYSE:V)is a winning company to confidently buy hand over fist. It's also another brand-name company thatcan still make its shareholders a fortune.</p>\n<p>Buying into the Visa growth story is a simple numbers game. Visa grows its revenue and profits when consumers and businesses are spending more. This happens when the U.S. and global economy are expanding. Although contractions and recessions are an inevitable part of the economic cycle, they tend to be short-lived. Meanwhile, periods of economic expansion are almost always measured in years. Buying into Visa during these short-lived crashes or corrections should allow long-term investors to be handsomely rewarded by this numbers game.</p>\n<p>The other interesting thing about Visa is thatit's shunned becoming a lender. You'd think that Visa could generate big bucks from interest income and fees by lending during these long-lived periods of expansion. But lending would also expose Visa to the credit delinquencies that arise during recessions. Operating solely as a payment processor means not having to set aside cash to cover delinquencies. It's why Visa rebounds so much faster than most financial stocks following a recession.</p>\n<p><b>Amazon</b></p>\n<p>Lastly (andwho couldn't see this coming?), investors should take any discount they can get during a crash on e-commerce behemoth<b>Amazon</b>(NASDAQ:AMZN).</p>\n<p>Amazon's online marketplace has proved virtually unstoppable for well over a decade. An April 2021 report from eMarketer pegged the company's share of U.S. online sales at 40.4%. That more than quintuples its next-closest competitor and effectively solidifies Amazon as the go-to source for online shopping in the U.S.</p>\n<p>What about those pesky low retail margins, you ask? Amazon has signed up more than 200 million people globally to a Prime membership. The fees collected from Prime members help to offset some of the company's retail-based margin weakness. Prime members are extremely loyal to the Amazon ecosystem and spend far more than non-members, too.</p>\n<p>But it's Amazon's cloud infrastructure segmentthat's the superstar. Amazon Web Services (AWS) brings in around one-eighth of the company's total sales but accounts for well over half its operating income. Since cloud margins are superior to retail and advertising margins, AWS is the company's key to explosive cash flow growth this decade.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>A Stock Market Crash Is Coming: 5 High-Conviction Stocks to Buy Hand Over Fist When It Happens</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nA Stock Market Crash Is Coming: 5 High-Conviction Stocks to Buy Hand Over Fist When It Happens\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-20 09:15 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/06/19/stock-market-crash-coming-5-high-conviction-stocks/><strong>fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>It might be the last thing you want to hear, but it's the truth:A stock market crash is inevitable.\nSince the March 23, 2020 bottom, investors have enjoyed a historically strong bounce-back rally -- ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/19/stock-market-crash-coming-5-high-conviction-stocks/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMZN":"亚马逊","NEP":"Nextera Energy Partners","V":"Visa","CRWD":"CrowdStrike Holdings, Inc."},"source_url":"https://www.fool.com/investing/2021/06/19/stock-market-crash-coming-5-high-conviction-stocks/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1126454279","content_text":"It might be the last thing you want to hear, but it's the truth:A stock market crash is inevitable.\nSince the March 23, 2020 bottom, investors have enjoyed a historically strong bounce-back rally -- the widely followedS&P 500(SNPINDEX:^GSPC)has gained an impressive 90%. But both history and valuation metrics unequivocally suggest that a big drop is upcoming for the stock market.\nHistory is pretty clear that trouble lies ahead\nFor example, there have beenone or two double-digit percentage declineswithin the three years following a bottom in each of the previous eight bear markets prior to the coronavirus crash (i.e., dating back to 1960). Although bull markets tend to last years, rebounds from a bear market are never this smooth. We're nearly 15 months past the March 2020 bear-market bottom in the S&P 500 and have yet to see anything close to a double-digit correction.\nTo add to this point, data from market analytics firm Yardeni Research shows that there have been 38 double-digit declines in the S&P 500 over the past 71 years. That's a crash or correction, on average,every 1.87 years. Though the market doesn't adhere to averages, it does give a general sense of when to expect these hiccups.\nOn a valuation basis, the S&P 500's Shiller price-to-earnings (P/E) ratio is a waving red flag. The S&P 500's Shiller P/E -- a measure of inflation-adjusted earnings over the previous 10 years -- almost hit 38 earlier this week. That more than doubles its 151-year average, and it's the highest level in nearly two decades. The previous four times the Shiller P/E surpassed and held above 30 during a bull market rally, the indexsubsequently declined by a minimum of 20%.\nMake no mistake about it -- a stock market crash is coming.\nEvery crash or correction is an opportunity for patient investors to make money\nHowever, a crash is no reason to duck and cover. While history may signal trouble ahead, it also tells us that each and every double-digit decline has been a buying opportunity. Eventually, every big drop in the major indexes is erased by a bull-market rally. When the next crash does occur, the following five high-conviction stocks can be confidently bought hand over fist.\nCrowdStrike Holdings\nCybersecurity is projected to beone of the safest double-digit growth trendsthis decade. No matter the size of the business or the state of the U.S./global economy, protecting enterprise and consumer data is paramount. This means cloud-based cybersecurity stockCrowdStrike Holdings(NASDAQ:CRWD)can thrive in any environment.\nCrowdStrike's successderives from its cloud-native Falcon security platform. Because it's built in the cloud and relies on artificial intelligence, it's growing smarter at identifying and responding to threats all the time. It's currently overseeing 6 trillion events on a weekly basis, and it's far more cost-effective at protecting data than on-premise solutions.\nWe can also look to the company's income statements to see clear-cut evidence that businesses favor CrowdStrike's cybersecurity platform. It's been retaining 98% of its clients, has seen existing clients spend 23% to 47% more on a year-over-year basis for the past 12 quarters, and recently reported that 64% of its customers have purchased at least four cloud module subscriptions. Scaling with its customers is CrowdStrike's ticket to big-time cash flow expansion.\nFacebook\nBrand-name businesses can make patient investors a fortune, and social media giantFacebook(NASDAQ:FB)is the perfect example.\nWhen the curtain closed on March, Facebook tallied 2.85 billion monthly active users (MAU) visiting its namesake site and an additional 600 million unique MAUs visiting WhatsApp or Instagram, which it also owns. All told, this equates to44% of the global populationinteracting with its owned sites each month. There's simply no social media platform businesses can go to get their message to a broader (or potentially targeted) audience, which is why Facebook ad-pricing power is so strong.\nBut here's the kicker: Facebookhasn't even put the pedal to the metal. Although it's on track to generate more than $100 billion in advertising revenue in 2021, nearly all of these ad sales are coming from its namesake site and Instagram. WhatsApp and Facebook Messenger, which are two of the six most-visited social sites in the world, aren't being meaningfully monetized as of yet. Further, the company's Oculus virtual reality devices are still in the early stage of their growth. Suffice it to say, Facebook offers ample upside as its other operating segments are monetized and mature.\nNextEra Energy\nAnother high-conviction stock to buy hand over fist the next time a crash or steep correction strikes is electric utility stockNextEra Energy(NYSE:NEE).\nDid I put you to sleep when I said \"electric utility stock?\" Electric utilities are traditionally known for their market-topping dividend yields and persistently low growth rates. But this doesn't describe NextEra Energy. NextEra has aggressively invested in renewable energy projects and is leading the country in solar and wind capacity. As a result of these investments, its electric generation costs have declined and its compound annual growth ratehas consistently been in the high single digitsfor more than a decade. It also doesn't hurt that NextEra is front-running any potential green-energy legislation that might come out of Washington.\nIn addition to growth rates that are well above the sector average, NextEra still benefits from the predictability of energy demand. For instance, its regulated utilities (i.e., those not powered by renewable energy) require approval from state utility commissions before price hikes can be passed along to households. This might sound like an inconvenience, but it's actually great news. It means NextEra won't be exposed to potentially volatile wholesale pricing.\nVisa\nWhen the next stock market crash arrives, payment processing kingpinVisa(NYSE:V)is a winning company to confidently buy hand over fist. It's also another brand-name company thatcan still make its shareholders a fortune.\nBuying into the Visa growth story is a simple numbers game. Visa grows its revenue and profits when consumers and businesses are spending more. This happens when the U.S. and global economy are expanding. Although contractions and recessions are an inevitable part of the economic cycle, they tend to be short-lived. Meanwhile, periods of economic expansion are almost always measured in years. Buying into Visa during these short-lived crashes or corrections should allow long-term investors to be handsomely rewarded by this numbers game.\nThe other interesting thing about Visa is thatit's shunned becoming a lender. You'd think that Visa could generate big bucks from interest income and fees by lending during these long-lived periods of expansion. But lending would also expose Visa to the credit delinquencies that arise during recessions. Operating solely as a payment processor means not having to set aside cash to cover delinquencies. It's why Visa rebounds so much faster than most financial stocks following a recession.\nAmazon\nLastly (andwho couldn't see this coming?), investors should take any discount they can get during a crash on e-commerce behemothAmazon(NASDAQ:AMZN).\nAmazon's online marketplace has proved virtually unstoppable for well over a decade. An April 2021 report from eMarketer pegged the company's share of U.S. online sales at 40.4%. That more than quintuples its next-closest competitor and effectively solidifies Amazon as the go-to source for online shopping in the U.S.\nWhat about those pesky low retail margins, you ask? Amazon has signed up more than 200 million people globally to a Prime membership. The fees collected from Prime members help to offset some of the company's retail-based margin weakness. Prime members are extremely loyal to the Amazon ecosystem and spend far more than non-members, too.\nBut it's Amazon's cloud infrastructure segmentthat's the superstar. Amazon Web Services (AWS) brings in around one-eighth of the company's total sales but accounts for well over half its operating income. Since cloud margins are superior to retail and advertising margins, AWS is the company's key to explosive cash flow growth this decade.","news_type":1},"isVote":1,"tweetType":1,"viewCount":199,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":161415815,"gmtCreate":1623938133637,"gmtModify":1703823998900,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"nice","listText":"nice","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161415815","repostId":"2143379379","repostType":2,"repost":{"id":"2143379379","kind":"highlight","pubTimestamp":1623893744,"share":"https://ttm.financial/m/news/2143379379?lang=&edition=fundamental","pubTime":"2021-06-17 09:35","market":"us","language":"en","title":"These 10 Stocks Make Up 85% of Warren Buffett's Portfolio","url":"https://stock-news.laohu8.com/highlight/detail?id=2143379379","media":"Motley Fool","summary":"Diversification isn't necessary if you know what you're doing, according to the Oracle of Omaha.","content":"<p>If you've ever wondered why <b>Berkshire Hathaway</b> (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett isn't infallible, but he's delivered an annual average return of 20% since the mid-1960s for his shareholders. In aggregate, we're talking about a return of more than 2,800,000%!</p>\n<p>What's even more amazing is that Buffett hasn't done anything the average investors couldn't do to net these huge gains. He focuses on a few sectors and industries that interest him, buys companies with clear-cut competitive advantages, and most importantly hangs onto those stakes for a very long time.</p>\n<p>Another source of Buffett's success is concentration. The Oracle of Omaha doesn't believe diversification is necessary if you know what you're doing. This is readily apparent in Berkshire Hathaway's $302.6 billion investment portfolio. As of this past weekend, 85% of Berkshire's invested assets ($257.3 billion) were tied up in only 10 stocks.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/601f21f3cc2f9e5524bd5d613063faa2\" tg-width=\"700\" tg-height=\"466\"><span>Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.</span></p>\n<h2>1. Apple: $115.6 billion</h2>\n<p>Tech kingpin <b>Apple</b> (NASDAQ:AAPL) makes up about 38% of Warren Buffett's portfolio by itself and has been dubbed \"Berkshire's third business\" by the Oracle of Omaha. Apple offers some of the strongest branding in the world, is the clear leader in smartphones in the U.S., and has been pivoting to higher-margin services under the leadership of CEO Tim Cook. Though iPhone sales remain Apple's top product, services becoming a larger percentage of total sales will help remove the revenue lumpiness associated with new product launches.</p>\n<h2>2. Bank of America: $43.2 billion</h2>\n<p>Bank stocks have long been Buffett's favorite place to put Berkshire's money work. <b>Bank of America</b> (NYSE:BAC) is Berkshire's unquestioned largest bank holding, with more than 14% of invested assets. Bank of America has done an excellent job of controlling its noninterest expenses by consolidating branches and emphasizing digital banking. It's also in line to benefit more than any other money-center bank from an eventual rise in interest rates.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ed3e6a16841306014bf0cfc3b1697b23\" tg-width=\"700\" tg-height=\"466\"><span>Image source: American <a href=\"https://laohu8.com/S/EXPR\">Express</a>.</span></p>\n<h2>3. American Express: $24.9 billion</h2>\n<p>Payment processor and lender <b>American Express</b> (NYSE:AXP) is Buffett's third-largest and third-longest-held stock. After 28 years of holding AmEx, Berkshire Hathaway's position has grown to almost $25 billion in value. This is a cyclical company that benefits from long periods of economic expansion, as well as its ability to attract affluent clientele. These well-to-do clients are less likely to change their spending habits when economic hiccups arise, which often means less worry about credit delinquencies for AmEx.</p>\n<h2>4. Coca-Cola: $22.5 billion</h2>\n<p>Speaking of long-tenured holdings, beverage behemoth <b>Coca-Cola</b> (NYSE:KO) is the longest-held stock in Buffett's portfolio (33 years). Coca-Cola operates in all but two countries worldwide (North Korea and Cuba) and has more than 20 brands generating at least $1 billion in annual sales. Thanks to its top-notch marketing team, it's also the best-known consumer goods brand. Coke has holiday tie-ins, has allied itself with well-known brand ambassadors, and is embracing digital advertising and social media as a way to get its message to a younger generation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cc21d6aabfd53f63ded95ae16cbd64e1\" tg-width=\"700\" tg-height=\"468\"><span>Image source: Getty Images.</span></p>\n<h2>5. Kraft Heinz: $14.1 billion</h2>\n<p>There's little question that <b>Kraft Heinz</b> (NASDAQ:KHC) is the oddball holding in Buffett's top 10. That's because Buffett admits to Heinz overpaying for Kraft Foods, and the combined company largely underperforming in recent years. This includes a greater than $15 billion goodwill writedown in 2019. While the pandemic has helped boost demand for packaged foods, Kraft Heinz's balance sheet is still bogged down by high debt levels and goodwill. In short, Berkshire Hathaway is sort of stuck with its 325.6 million shares.</p>\n<h2>6. Verizon Communications: $9.1 billion</h2>\n<p>Telecommunications giant <b>Verizon</b> (NYSE:VZ) is a fairly recent addition to Berkshire Hathaway's portfolio, although it's been bought hand over fist in the previous two quarters by Buffett and his team. The lure of Verizon is likely its 4.4% dividend yield, which is arguably <a href=\"https://laohu8.com/S/AONE\">one</a> of the safest high-yield payouts on the planet. What's more, Verizon should benefit immensely from the rollout of 5G infrastructure. It's been a decade since the last major upgrade to download speeds, which suggests that a multiyear tech upgrade cycle will lead to higher-margin data consumption.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7343c3ce7330b86321a8ec9384d4baea\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<h2>7. U.S. Bancorp: $8.7 billion</h2>\n<p>Next to BofA, <b>U.S. Bancorp</b> (NYSE:USB) is Buffett's favorite bank stock. It's a company that regularly trades at a premium to its book value -- and for good reason. U.S. Bancorp has seen its users embrace technology, with the percentage of consumer loans completed digitally skyrocketing over the past two years. Being able to consolidate its physical branches, while also avoiding riskier derivative investments that have gotten U.S. money-center banks in trouble, has helped U.S. Bancorp to some of the highest return on assets among big banks.</p>\n<h2>8. Moody's: $8.5 billion</h2>\n<p>Credit agency and analytics company <b>Moody's</b> (NYSE:MCO) is yet another top-10 holding that's been held for longer than two decades. With an initial cost basis of just over $10, Berkshire Hathaway is sitting on an unrealized gain of better than 3,300% -- and this isn't accounting for dividends. Historically low lending rates have kept Moody's credit rating segment busy, while volatile trading markets are boosting demand for Moody's analytics. It's hard to envision Buffett ever selling this stake.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8abdae403dddfa42107e06ea5bfddf39\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<h2>9. BYD: $6.2 billion</h2>\n<p>Back in 2008, Buffett acquired 225 million shares of China-based electric-vehicle (EV) manufacturer <b>BYD</b> (OTC:BYDDY)&nbsp;for $1.03 a share (it closed this past week at $27.65 a share). In March, BYD sold 16,301 EVs, which is more than higher-profile competitors <b>NIO</b>&nbsp;and <b>XPeng</b>&nbsp;delivered on a combined basis in the same month. With the Society of Automotive Engineers of China forecasting that half of all new vehicles sales in 2035 will be powered by alternative energy, BYD is in pole position to disrupt the largest auto market in the world.</p>\n<h2>10. DaVita: $4.4 billion</h2>\n<p>Rounding out the top 10 is kidney dialysis services company <b>DaVita</b> (NYSE:DVA). Buffett's fascination with the company is likely a numbers play. Over time, an aging U.S. population is going to become more reliant on kidney dialysis services for maintenance purposes. As the clear leader in providing these services, DaVita should see a steady uptick in demand and reimbursement for its services. This patient long-term thesis perfectly embodies the Buffett investing ethos.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>These 10 Stocks Make Up 85% of Warren Buffett's Portfolio</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThese 10 Stocks Make Up 85% of Warren Buffett's Portfolio\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-17 09:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you've ever wondered why Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"KO":"可口可乐","MCO":"穆迪","AXP":"美国运通","VZ":"威瑞森","BRK.A":"伯克希尔","KHC":"卡夫亨氏","DVA":"达维塔保健","BRK.B":"伯克希尔B","BAC":"美国银行","AAPL":"苹果","USB":"美国合众银行","BYDDY":"比亚迪ADR"},"source_url":"https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2143379379","content_text":"If you've ever wondered why Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett isn't infallible, but he's delivered an annual average return of 20% since the mid-1960s for his shareholders. In aggregate, we're talking about a return of more than 2,800,000%!\nWhat's even more amazing is that Buffett hasn't done anything the average investors couldn't do to net these huge gains. He focuses on a few sectors and industries that interest him, buys companies with clear-cut competitive advantages, and most importantly hangs onto those stakes for a very long time.\nAnother source of Buffett's success is concentration. The Oracle of Omaha doesn't believe diversification is necessary if you know what you're doing. This is readily apparent in Berkshire Hathaway's $302.6 billion investment portfolio. As of this past weekend, 85% of Berkshire's invested assets ($257.3 billion) were tied up in only 10 stocks.\nBerkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.\n1. Apple: $115.6 billion\nTech kingpin Apple (NASDAQ:AAPL) makes up about 38% of Warren Buffett's portfolio by itself and has been dubbed \"Berkshire's third business\" by the Oracle of Omaha. Apple offers some of the strongest branding in the world, is the clear leader in smartphones in the U.S., and has been pivoting to higher-margin services under the leadership of CEO Tim Cook. Though iPhone sales remain Apple's top product, services becoming a larger percentage of total sales will help remove the revenue lumpiness associated with new product launches.\n2. Bank of America: $43.2 billion\nBank stocks have long been Buffett's favorite place to put Berkshire's money work. Bank of America (NYSE:BAC) is Berkshire's unquestioned largest bank holding, with more than 14% of invested assets. Bank of America has done an excellent job of controlling its noninterest expenses by consolidating branches and emphasizing digital banking. It's also in line to benefit more than any other money-center bank from an eventual rise in interest rates.\nImage source: American Express.\n3. American Express: $24.9 billion\nPayment processor and lender American Express (NYSE:AXP) is Buffett's third-largest and third-longest-held stock. After 28 years of holding AmEx, Berkshire Hathaway's position has grown to almost $25 billion in value. This is a cyclical company that benefits from long periods of economic expansion, as well as its ability to attract affluent clientele. These well-to-do clients are less likely to change their spending habits when economic hiccups arise, which often means less worry about credit delinquencies for AmEx.\n4. Coca-Cola: $22.5 billion\nSpeaking of long-tenured holdings, beverage behemoth Coca-Cola (NYSE:KO) is the longest-held stock in Buffett's portfolio (33 years). Coca-Cola operates in all but two countries worldwide (North Korea and Cuba) and has more than 20 brands generating at least $1 billion in annual sales. Thanks to its top-notch marketing team, it's also the best-known consumer goods brand. Coke has holiday tie-ins, has allied itself with well-known brand ambassadors, and is embracing digital advertising and social media as a way to get its message to a younger generation.\nImage source: Getty Images.\n5. Kraft Heinz: $14.1 billion\nThere's little question that Kraft Heinz (NASDAQ:KHC) is the oddball holding in Buffett's top 10. That's because Buffett admits to Heinz overpaying for Kraft Foods, and the combined company largely underperforming in recent years. This includes a greater than $15 billion goodwill writedown in 2019. While the pandemic has helped boost demand for packaged foods, Kraft Heinz's balance sheet is still bogged down by high debt levels and goodwill. In short, Berkshire Hathaway is sort of stuck with its 325.6 million shares.\n6. Verizon Communications: $9.1 billion\nTelecommunications giant Verizon (NYSE:VZ) is a fairly recent addition to Berkshire Hathaway's portfolio, although it's been bought hand over fist in the previous two quarters by Buffett and his team. The lure of Verizon is likely its 4.4% dividend yield, which is arguably one of the safest high-yield payouts on the planet. What's more, Verizon should benefit immensely from the rollout of 5G infrastructure. It's been a decade since the last major upgrade to download speeds, which suggests that a multiyear tech upgrade cycle will lead to higher-margin data consumption.\nImage source: Getty Images.\n7. U.S. Bancorp: $8.7 billion\nNext to BofA, U.S. Bancorp (NYSE:USB) is Buffett's favorite bank stock. It's a company that regularly trades at a premium to its book value -- and for good reason. U.S. Bancorp has seen its users embrace technology, with the percentage of consumer loans completed digitally skyrocketing over the past two years. Being able to consolidate its physical branches, while also avoiding riskier derivative investments that have gotten U.S. money-center banks in trouble, has helped U.S. Bancorp to some of the highest return on assets among big banks.\n8. Moody's: $8.5 billion\nCredit agency and analytics company Moody's (NYSE:MCO) is yet another top-10 holding that's been held for longer than two decades. With an initial cost basis of just over $10, Berkshire Hathaway is sitting on an unrealized gain of better than 3,300% -- and this isn't accounting for dividends. Historically low lending rates have kept Moody's credit rating segment busy, while volatile trading markets are boosting demand for Moody's analytics. It's hard to envision Buffett ever selling this stake.\nImage source: Getty Images.\n9. BYD: $6.2 billion\nBack in 2008, Buffett acquired 225 million shares of China-based electric-vehicle (EV) manufacturer BYD (OTC:BYDDY) for $1.03 a share (it closed this past week at $27.65 a share). In March, BYD sold 16,301 EVs, which is more than higher-profile competitors NIO and XPeng delivered on a combined basis in the same month. With the Society of Automotive Engineers of China forecasting that half of all new vehicles sales in 2035 will be powered by alternative energy, BYD is in pole position to disrupt the largest auto market in the world.\n10. DaVita: $4.4 billion\nRounding out the top 10 is kidney dialysis services company DaVita (NYSE:DVA). Buffett's fascination with the company is likely a numbers play. Over time, an aging U.S. population is going to become more reliant on kidney dialysis services for maintenance purposes. As the clear leader in providing these services, DaVita should see a steady uptick in demand and reimbursement for its services. This patient long-term thesis perfectly embodies the Buffett investing ethos.","news_type":1},"isVote":1,"tweetType":1,"viewCount":240,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":142863885,"gmtCreate":1626141328947,"gmtModify":1703754138898,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Really?","listText":"Really?","text":"Really?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":3,"repostSize":0,"link":"https://ttm.financial/post/142863885","repostId":"1149354714","repostType":4,"isVote":1,"tweetType":1,"viewCount":365,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":802541401,"gmtCreate":1627790891903,"gmtModify":1703495938041,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Singtel needs to reinvent itself","listText":"Singtel needs to reinvent itself","text":"Singtel needs to reinvent itself","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/802541401","repostId":"1153879814","repostType":4,"repost":{"id":"1153879814","kind":"news","pubTimestamp":1627784753,"share":"https://ttm.financial/m/news/1153879814?lang=&edition=fundamental","pubTime":"2021-08-01 10:25","market":"sg","language":"en","title":"SIA, SIAE, Singtel potential candidates for company restructuring: Maybank","url":"https://stock-news.laohu8.com/highlight/detail?id=1153879814","media":"Singapore Business","summary":"Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play f","content":"<blockquote>\n <b><i>Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?</i></b>\n</blockquote>\n<p>Drivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of Singapore Press Holdings (SPH) and a possible merger between Keppel Offshore &amp; Marine and Sembcorp Marine Ltd, according to a report by Maybank Kim Eng.</p>\n<p>According to the report, the drivers catalyzing these restructurings remain in play and are unlikely to retreat in the near-term.</p>\n<p>Some Singapore companies named by Maybank that are potential candidates for a corporate restructuring are Singtel, Singapore Airlines Group and the Singapore Institute of Aerospace Engineers.</p>\n<p>Maybank said Singtel is currently exploring options to review its stakes in associates and infrastructure assets to unlock latent value.</p>\n<p>Continued weakness and expected long lead time to recovery of international air travel may force certain rationalization for SIA and SIAE. Meanwhile, big developers like CityDev and UOL also have sizable development businesses similar to CAPL.</p>","source":"lsy1618986048053","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>SIA, SIAE, Singtel potential candidates for company restructuring: Maybank</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSIA, SIAE, Singtel potential candidates for company restructuring: Maybank\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-08-01 10:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank><strong>Singapore Business</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of ...</p>\n\n<a href=\"https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"C6L.SI":"新加坡航空公司"},"source_url":"https://sbr.com.sg/economy/news/sia-siae-singtel-potential-candidates-company-restructuring-maybank","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1153879814","content_text":"Who will follow in SPH, Keppel and Sembcorp steps in corporate restructuring?\n\nDrivers are in play for more corporate restructuring from Singapore firms following the major restructuring plans of Singapore Press Holdings (SPH) and a possible merger between Keppel Offshore & Marine and Sembcorp Marine Ltd, according to a report by Maybank Kim Eng.\nAccording to the report, the drivers catalyzing these restructurings remain in play and are unlikely to retreat in the near-term.\nSome Singapore companies named by Maybank that are potential candidates for a corporate restructuring are Singtel, Singapore Airlines Group and the Singapore Institute of Aerospace Engineers.\nMaybank said Singtel is currently exploring options to review its stakes in associates and infrastructure assets to unlock latent value.\nContinued weakness and expected long lead time to recovery of international air travel may force certain rationalization for SIA and SIAE. Meanwhile, big developers like CityDev and UOL also have sizable development businesses similar to CAPL.","news_type":1},"isVote":1,"tweetType":1,"viewCount":354,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":127985720,"gmtCreate":1624816284860,"gmtModify":1703845494422,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"is this realistic?","listText":"is this realistic?","text":"is this realistic?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/127985720","repostId":"1117734317","repostType":2,"repost":{"id":"1117734317","kind":"news","pubTimestamp":1624759414,"share":"https://ttm.financial/m/news/1117734317?lang=&edition=fundamental","pubTime":"2021-06-27 10:03","market":"us","language":"en","title":"Square: The Bear Case","url":"https://stock-news.laohu8.com/highlight/detail?id=1117734317","media":"seekingalpha","summary":"Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong re","content":"<p><b>Summary</b></p>\n<ul>\n <li>On the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.</li>\n <li>In reality, the company has struggled to translate its top line into bottom line earnings.</li>\n <li>This has resulted in Square expanding its products to justify exaggerated revenue valuations which may never result in meaningful earnings growth.</li>\n <li>And whilst at first glance its Cash App story appears to be a budding prospect, it may be nothing more than temporary growth based on necessity.</li>\n <li>Given the current valuation and the increasing Bitcoin headwinds, Square could face significant revisions downwards in revenue and earnings.</li>\n</ul>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f072284e4d267ddbfaf6f17db8b6aa46\" tg-width=\"1536\" tg-height=\"1024\"><span>AndreyPopov/iStock via Getty Images</span></p>\n<p><b>Introduction</b></p>\n<p>Square Inc.(NYSE:SQ)is one of the&nbsp;most popular stocks&nbsp;among retail traders and investors, ranking 57 in Robinhood's top 100 rankings. This has resulted in a 135% increase in price over the last year allowing SQ to reach a market capitalization of greater than $100bln, trading with the volatility of a mid-cap company.</p>\n<p>On the surface the price and valuation may seem justified, with the company sequentially increasing revenues and expanding its portfolio of products through Cash App, Bitcoin (BTC-USD), PPP loans and most recently delving into the commercial loans business with a&nbsp;banking license&nbsp;via Square Financial Services.</p>\n<p>However, these valuations are becoming disaggregated from the fundamentals of the company and its core business on speculation of future revenue projections which are heavily reliant on Bitcoin revenues.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/adc746c80eba08b76805234d32a7eff4\" tg-width=\"638\" tg-height=\"358\"><span>Source: Author, with data from SQ Investor Relations (Q1 2021 Historical Financial Information)</span></p>\n<p>In addition to this, SQ potentially faces several other issues related to small business positioning; policy and regulation; and general macroeconomic factors which may create headwinds that will impact its valuation and pose an asymmetric downside risk for investors, which I will extrapolate on below.</p>\n<p><b>Overview</b></p>\n<p>SQ is a payment processing and business tool provider that facilitates transactions between businesses / sellers and individuals and provides them with hardware, online infrastructure and analytics. Additionally, it services individuals through Cash App which appears to be growing exponentially and allows users to send, receive, hold and invest money, and recently Bitcoin.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cee1136e6c6e1b5294daf79d06e4a1e8\" tg-width=\"382\" tg-height=\"421\"><span>Source: SQ Investor Relations (Q1 2021 Shareholder Letter - Cash App Inflows vs Gross Profit)</span></p>\n<p>As of March 2020, the&nbsp;company has received a Banking License&nbsp;from the Federal Deposit Insurance Corporation (FDIC) to originate commercial loans to retailers which use SQ for payment processing.</p>\n<p>Given all of this positive news, it is not surprising that the stock has rallied over 330% in the last 3 years on the basis of future growth projections and, since 2020, has chased revenue estimates.</p>\n<p>This was a common occurrence during COVID, as unchartered waters meant that top line growth was imperative for survival. Further, seemingly endless money printing by the Fed, combined with zero rates, meant money flowed into stocks which showed the highest potential for growth.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/214a8d95ef4deef4b9e6e7ec8ca86793\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ vs EPS Estimates and Revenue Estimates 2021)</span></p>\n<p>However, in Q1 2021, as the printing slowed, yields began to rise and federal transfers to individuals dissipated, and consequently ever increasing revenue estimates began to mean less for the market, resulting in SQ price action ranging between $200 to $280.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5a03c8294f2805d4e82fbc3fed739f45\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ Price YTD)</span></p>\n<p><b>Quantitative</b></p>\n<p>Year to Date, SQ has been a good performer relative to the payment processing sector, returning ~12% price increases to shareholders.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c32bf1243cd5e4252fc8af88b2ee4bfb\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ vs Payment Processing Sector &gt;$50 bln Year to Date)</span></p>\n<p>It is also not a surprise to see why when evaluated against these companies on a forward earnings and revenue basis. SQ has above average and median earnings growth for 2021 and 2022, as well as strong revenue growth for 2021.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7b67e41d041b35bf5e8ae3c7adb55c7d\" tg-width=\"640\" tg-height=\"444\"><span>Source: Author, Sector Comparison (Payment Processors)</span></p>\n<p>Whilst SQ's forward PE seems exaggerated in contrast to its counterparts, its forward PS is relatively small and below the sector averages and median, perhaps justifying its present value.</p>\n<p>However, once you remove Bitcoin revenue from the equation, you get much more exaggerated forward PS estimates on much lower revenue growth, which represents SQ's primary business.</p>\n<p>For this equation, I have removed Bitcoin revenue from their Q1 2021 results, and judging by average analyst expectations which show little to no sequential revenue growth from Q2-Q4 2021, multiplied this figure by 4x for a year end revenue estimate of $6,140.70 mln. For prior years, I have removed Bitcoin from Revenue.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/624b2de0076a4f2d6062c52036b5d176\" tg-width=\"640\" tg-height=\"182\"><span>Source: Author, SQ Revenue Growth (2018 to 2021 Estimates with Bitcoin vs excl Bitcoin)</span></p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/5337259448695cf7fc6a796d86dba775\" tg-width=\"523\" tg-height=\"245\"><span>Source: Author, SQ vs Sector Comps (Revenue Estimates excl Bitcoin)</span></p>\n<p>As we can see this paints a very different picture of the company, and whilst revenue is still growing slightly above comps which also have high PS ratios, suddenly valuations on earnings look more meaningful and it becomes difficult to justify a forward PE 3x above the average and 4.5x above the median. Especially when companies such as American Express Co (AXP), Mastercard Inc (MA), PayPal Holdings Inc (PYPL) and Visa Inc (V) are producing on average 4x higher EPS. The majority of which pay a dividend and have similar growth estimates with less volatility risk.</p>\n<p>Many will suggest that \"this does not matter as BTC is now part of their revenue metrics and that is that, besides transaction volume is what is important\". However, I would cite the example of the 2018 Bitcoin sell off in which&nbsp;Bitcoin fell 70%, and transaction volumes fell from highs by approximately 75% as well:</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b01941a1ab02f1b6dc27d73a2705a242\" tg-width=\"640\" tg-height=\"320\"><span>Source: Bitcoinvisuals.com (Bitcoin Market Volume 2018)</span></p>\n<p>On a valuation basis, this presents a substantial downside risk to investors if Bitcoin continued to retrace as a result of being met by increased regulation globally, as the company is essentially trading on revenue metrics propped up by Bitcoin. Quite simply, price down in Bitcoin could mean downwards revisions to revenue estimates and consequently a highly volatile retracement in the price of SQ.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c89cf1b41c0d446571c7a471bb8d8e50\" tg-width=\"640\" tg-height=\"377\"><span>Source: Author, using data from YCHARTS (SQ Price Correlation - Revenue, EPS and EBITDA)</span></p>\n<p>This becomes increasingly likely given the historical volatility of the stock when compared to its peers and it is not surprising that it is also becoming a consensus short position.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/2d47874b5957751f0d485a9aa9ec5016\" tg-width=\"640\" tg-height=\"233\"><span>Source: Author (SQ vs Sector Comps Implied and Realized Volatility and Short Interest)</span></p>\n<p>Given the analysis by another Seeking Alpha contributor,The Value Trend&nbsp;in which the author suggests that&nbsp;SQ's 2025 growth is essentially priced in&nbsp;I would have to agree. SQ's reliance on revenue estimates which have been amplified substantially by Bitcoin present an asymmetric risk to the downside in the short to medium term for investors.</p>\n<p><b>Macro</b></p>\n<p>Whilst we are in the process of reopening, many things remain uncertain, such as the level of demand sustainability, job growth and creation, and inflation.</p>\n<p>Whilst the sentiment is overall positive in the media, there are several macroeconomic issues that are beneath the surface which need to be resolved before we can conclude that we are in the clear.</p>\n<p><b>Small Business Environment</b></p>\n<p>SQ's MRQ shows that nearly 49% of the Gross Profit comes from the Seller ecosystem (small businesses).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a0f50d03e91a1609a120fa139b61e292\" tg-width=\"640\" tg-height=\"319\"><span>Source: SQ Investor Relations (Q1 2021 10Q Page 39 - Segmented Gross Profit)</span></p>\n<p>The majority of this is originating from exposure to sellers with &lt;$500,000 Gross Payment Volume (69.5%). This makes square substantially exposed to fluctuations in the small business cycle.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/75fbdbba973e9d39e9d07b50d6174b03\" tg-width=\"380\" tg-height=\"502\"><span>Source: SQ Investor Relations (Q1 2021 Shareholder Letter)</span></p>\n<p>Delving into the Business Formation Statistics, there is a rosy picture, with over 500,000 business applications for the month of May, 2021 providing an endless surge of opportunity for SQ.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/777bf7fbfba7b466a8c89baa9b21a72d\" tg-width=\"640\" tg-height=\"475\"><span>Source: Census.gov (Business Applications, May 2021)</span></p>\n<p>Again, when we dig deeper and look at the statistics below which rank the optimism of established small businesses, the picture begins to distort and starts to look like the descent into 2008.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e5be8fe67a4c257868eb79101d262e77\" tg-width=\"525\" tg-height=\"557\"><span>Source: NFIB (Small Business Economic Trends - Optimism, May 2021)</span></p>\n<p>Further, when we examine Small Business future outlook on expansion, this has also descended to lows and similar to what was seen in 2008. This could suggest that the bread and butter of SQ's gross profit margin, may not expand at the rate previously seen during 2017 to 2020.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e1a555c19fb385f170bb6deb2b3abcca\" tg-width=\"539\" tg-height=\"319\"><span>Source: NFIB (Small Business Economic Trends - Outlook, May 2021)</span></p>\n<p>Additionally, it should be noted that the two primary reasons small businesses are giving for their negative outlook are \"Economic Conditions\" and \"Political Climate\", which could be related to the election in 2020, COVID, recent policy changes and be somewhat transitory. Alternatively it could resemble the slow march of 2008 to 2016, we simply do not know, except for the fact it is a low reading and consequently could weigh on SQ's high revenue and earnings growth estimates.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4fbef66ecf854fe482a86e001dec91e6\" tg-width=\"523\" tg-height=\"271\"><span>Source: NFIB (Small Business Economic Trends - Reasons for Outlook, May 2021)</span></p>\n<p><b>Small Business Lending</b></p>\n<p>Looking forward, SQ clearly aims to solidify its position in the commercial lending space through acquiring a banking license. This is very positive for the company due to their large and growing small business user base,their experience since 2014, and the&nbsp;PPP program, which stopped on May 31, 2021.</p>\n<p>Currently, bank lending has receded as a result of recovery efforts from COVID.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/327e5b2f822c5f6e8b6298b58c0d4f94\" tg-width=\"640\" tg-height=\"401\"><span>Source: YCHARTS (US Commercial Banks - Commercial and Industrial Loans)</span></p>\n<p>This can be verified through the credit conditions index in the&nbsp;monthly NFIB report. Although, an&nbsp;American Banker survey&nbsp;is reporting that 86% of small businesses are finding it difficult to access credit, and are having to resort to personal credit.</p>\n<p>This is positive for SQ as it will allow them to fill the gap for credit to small business within the market. Though I believe it will be short lived as there is speculation that when the Fed tapers, they will also announce the lifting of&nbsp;capital restraints&nbsp;placed on Wells Fargo &amp; Company (WFC).</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/530b7de3c5d05e7e8f5de219d3582ea7\" tg-width=\"640\" tg-height=\"689\"><span>Source: Credit Suisse (Global Money Dispatch - 25 May 2021)</span></p>\n<p>There is a fairly good probability that this will occur, given that early in 2020 the Fed had&nbsp;lifted these restraints&nbsp;to help small businesses via the PPP program and tapering has a history of upsetting the market. If this occurs, I suspect WFC will become a giant amongst the small business credit space once more and be a very tough competitor to SQ due to their extensive network and history in the space.</p>\n<p><b>Bitcoin, Legislation &amp; Gensler</b></p>\n<p>Bitcoin has been making headlines as of 2H 2020 and much of 1H 2021 for good reason. It is gaining traction amongst retail traders and investors and has shown exceptional appreciation. Further, some minor&nbsp;banks&nbsp;have been interested in the medium although many banks and financial institutions have explicitly banned the&nbsp;purchase of Bitcoin using their services.</p>\n<p>The primary reasons for their objection is more than likely to do with illicit activities, such as&nbsp;money laundering,terrorism,fake transaction volumes, and similar activities which I do not want to get into and neither do banks.</p>\n<p>Consequently, on the recent hype, many countries are now stepping in to regulate the use of Bitcoin, but others are going a step further and are enacting legislation to ban its use and mining, most notably,China&nbsp;and&nbsp;India.</p>\n<p>This has had a negative impact on the price of Bitcoin since the ATHs in May 2021 of ~$65,000, retracing -46% since then.</p>\n<p>It is also extremely negative for Bitcoin going forward as the majority of Bitcoin mining is done in China (~70% YTD) with&nbsp;Hashrates of mining being correlated to the price. Therefore if these recede on decreasing Chinese mining activity, price could surely follow, affecting SQ's Bitcoin holdings and future transaction volumes.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/75ef78953396700241870a3f3ae8d8be\" tg-width=\"640\" tg-height=\"382\"><span>Source: Cambridge University (Cambridge Bitcoin Electricity Consumption Index YTD)</span></p>\n<p>Whilst the SEC has come out and said that&nbsp;Bitcoin regulation is not on their agenda for 2021, Gary Gensler has&nbsp;warned investors to be cautious. Gensler is also has a long history on regulations to protect investors, and despite not putting Bitcoin on the agenda for 2021, I advise readers to study his history with respect to&nbsp;2000 and 2008.</p>\n<p>Looking out further, this does not bode well for Bitcoin and SQ, generally. It is likely that there could be further regulation rather than adoption, negatively impacting its price, leading to a repeat of 2018 lower volumes as well as mining activity.</p>\n<p><b>General Economy - The Worry for Retail</b></p>\n<p>Separately, we could also be seeing a negative situation for retail going forward. Much of the recovery in retail as not been driven by \"pent up demand\" but mostly through subsidies issued throughout&nbsp;2020 and the start of 2021. When examining the graph below, we can see that once you subtract transfer receipts (government stimulus cheques and employment benefits - red line), income is not what it used to be.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/97a5a8cfaa11dd3c5ab5544778a40b90\" tg-width=\"640\" tg-height=\"247\"><span>Source: Federal Reserve Bank of St. Louis (Disposable Income vs Real Income minus Transfers vs Personal Savings vs Retail Trade Sales)</span></p>\n<p>Additionally, we can see that much of the spikes in retail sales (purple) have been driven mainly through the stimulus cheques which bolstered disposable income (blue) and consumer savings (green), though now stimulus has ended and people are having to start to dig into their savings, which is dropped 54% month on month between March and April.</p>\n<p>The consumer spending situation is made worse when examining U6 unemployment, which is&nbsp;considered to be the most revealing&nbsp;amongst economists as it includes unemployed, underemployed and discouraged job seekers. This, generally speaking, does not bode well for consumer discretionary spending patterns going forward.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/c09f260d254df1a847962a6b6896764c\" tg-width=\"640\" tg-height=\"388\"><span>Source: Macrotrends.net (U6 Unemployment Rate vs U5 vs Official)</span></p>\n<p>Finally, the rising cost of food and energy, which for food I expect to continue, should hamper consumer discretionary spend going forward. I have previously written articles on The Mosaic Company (MOS)hereand The Andersons (ANDE)here, which outline my justification for this trend.</p>\n<p>In relation to SQ, we can see their historical exposure to consumer discretionary spend based on end 2019 data. When taking into account figures from: retail; professional services, beauty and personal care, home and repair, leisure and entertainment, and casual use, the total exposure is approximately 59%.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dddddbe8ed21ed16aab29a7b5ebbc846\" tg-width=\"640\" tg-height=\"340\"><span>Source: Statista (Raynor de Best - GPV by Seller Industry Dec 2019)</span></p>\n<p>Whilst this may not impact its revenue figures substantially due to the weighting of bitcoin, I do expect this to undermine is gross profit figures going forward and negatively impact margins as stimulus further fades.</p>\n<p><b>Financials</b></p>\n<p><b>Bitcoin</b></p>\n<p>When examining the financials of SQ we can easily see that Bitcoin is the predominant factor driving its revenue growth (MRQ 69% of total revenue) of which its valuation is derived (see above Introduction section - SQ Price vs Revenue Segments; and Quantitative section - SQ Price correlation).</p>\n<p>From their Q1 2021 Shareholder Letter, page 12 they have stated that on March 31, 2021 the fair value of their holdings was $472 million. On this date the closing price was $58,918.83, or approximately 8,011 Bitcoins. They also state they initially invested $200 million into bitcoin during this period and Q4, so their average price is roughly $25,000 per Bitcoin.</p>\n<p>Currently, the price of Bitcoin sits at approximately $34,600 and it also appears to be struggling to find traction, especially when you examine some other trends. For example, looking at search trends of \"Buy Bitcoin\" on Google Trends, this is clearly waning.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/d6b3b70625f48232fa97f1aa14f5548e\" tg-width=\"640\" tg-height=\"333\"><span>Source: Google Trends (Buy Bitcoin search terms - Worldwide 5 Yrs)</span></p>\n<p>Additionally, when you align this data with stimulus payments it is clear there is a relationship between the two in 2H 2020, and much of the recent speculation could be driven by government subsidies.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/54329dbe61b7b1f9fc1347f632aff709\" tg-width=\"640\" tg-height=\"293\"><span>Source: USA.Gov (COVID Stimulus Cheque Dates)</span></p>\n<p>The spike in searches occurs roughly around the time of the two latter government stimulus cheques with a lag of a few days to a few weeks.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4c7a198a905e4a89f11faa1b4db4003b\" tg-width=\"640\" tg-height=\"340\"><span>Source: Google Trends (Buy Bitcoin search terms - USA 12 Months)</span></p>\n<p>This also coincides with Bitcoin's price run up in December 2020 and January 2021, as well the failed rally in March and April 2021.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/0428576ae2c8312e747c3ae5fccab637\" tg-width=\"640\" tg-height=\"401\"><span>Source: YCHARTS (Bitcoin Price 1 Yr)</span></p>\n<p>Thus, in this example, if we have a continued sell off of -70%, which is similar to what occurred in 2018. We would be back at November 2020 Bitcoin prices of $20,000 approximately.</p>\n<p>This is still feasible on the basis of dwindling volume, further legislation and declining hashrates. It could also be theorized that SQ may carry an impairment charge of $40 million, which would greatly affect operating income, net income and shareholder earnings and future estimates. Though this is purely theoretical without accounting for transactions in the current quarter, such as purchases or sales at or near ATHs.</p>\n<p>Additionally, with the lack of stimulus payments going forward and tighter consumer discretionary spend, the revenue generated from Bitcoin may also decline as less money enters the space and volumes decline. Negatively impacting revenue estimates for SQ and subsequently their price and valuation.</p>\n<p><b>Cash App</b></p>\n<p>On the surface, it looks like Cash App is growing exponentially into a viable platform for users to transact, with more than 36 million monthly transacting active customers, up 50% YoY.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b457a1d1f65d9d40fac153a9926aa167\" tg-width=\"262\" tg-height=\"230\"><span>Source: SQ Investor Relations (Q4 2020 Shareholder Letter)</span></p>\n<p>However, this growth in Cash App may be unsustainable going forward, with SQ elaborating on this in their Quarterly filing notes:</p>\n<blockquote>\n Cash App revenue benefited from growth in numbers of active Cash App customers and from&nbsp;\n <b>government relief programs</b>&nbsp;most recently passed into law in late December 2020 and in March 2021, as well as cumulative benefit from earlier stimulus programs passed in 2020. These programs provided additional stimulus relief and unemployment benefits which resulted in an increase in consumer spending and inflows into our Cash App ecosystem. Cash App revenue growth may not be sustained at the same levels in future quarters and may be impacted by the enactment of further stimulus relief and benefit programs, as well as the demand and market prices for bitcoin, amongst other factors.\n</blockquote>\n<blockquote>\n <i>Source: SQ Investor Relations (Q1 2021 10Q Filings - Page 49)</i>\n</blockquote>\n<p>Part of the issue with Cash App is theoretical continued use and future adoption. Much of the growth seen over the last year was predominantly fueled by stimulus payments through the Cash App ecosystem, and therefore by necessity given the circumstances.</p>\n<p>The two sharp spikes in searches for the app occurred on:</p>\n<ul>\n <li>April 12-18 2020</li>\n <li>January 24-30 2021</li>\n</ul>\n<p>These coincide with stimulus payments as they initially sent them and they gradually deposited them into people's accounts.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/f9485d2feac40030b5190195a471781e\" tg-width=\"640\" tg-height=\"337\"><span>Source: Google Trends (Cash App search terms - USA 5 Years)</span></p>\n<p>Therefore, as government stimulus payments end, and Bitcoin again fades from relevancy, and more people return to work and day-trade less, this could negatively impact user growth metrics going forward, impacting SQ revenue estimates, gross profit figures, and its earnings.</p>\n<p>Further, there are a multitude of other more viable platforms, which another Seeking Alpha contributor,The Value Trend, has elaborated onhere.</p>\n<p>It is also important to keep in mind how they define these users, a \"Transacting active Cash App customer\" is the following:</p>\n<blockquote>\n ... has at least\n <b>one financial transaction</b>using any product or service within Cash App during the specified period.\n</blockquote>\n<blockquote>\n <i>Source: SQ Investor Relations (Q4 2020 Shareholder Letter - Page 4)</i>\n</blockquote>\n<p>So, if a customer received their wages from an employer, or unemployment benefit, into Cash App once per month, and transferred all of it to their bank account once per month, they are a \"transacting active Cash App customer\"...</p>\n<p>Perhaps a better quantifier of an \"active\" customer would be greater than 5 transactions.</p>\n<p><b>Technicals</b></p>\n<p>Examining the technicals of SQ, it is clear that the stock is now ranging between $200 and $280, with several breakout attempts at $250 and 2 failed attempts near $300, showing several signs that momentum is dying out.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4c277d5239e06c67b7ff6fd7fff319bb\" tg-width=\"640\" tg-height=\"642\"><span>Source: Author, with data from FINVIZ (SQ Chart)</span></p>\n<p>When examining dark pool order flows, there is a possibility for the current rally to continue as dark pools are at lows, which may likely continue into earnings by August. Although I would not get my hopes up unless some seriously good news occurs and Bitcoin rallies back to ATHs.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/3323bfcd903c74dce542b53b0b56e093\" tg-width=\"640\" tg-height=\"281\"><span>Source: Squeezemetrics.com (SQ Dark Pools vs Implied Vol 2 Years)</span></p>\n<p>From the 13F filings, we can also see that many funds have reduced exposure and closed their positions, with fewer new positions being added. The Put to Call ratio is also becoming quite high, especially on a stock that has $100 bln market cap, signaling that we are not the only ones thinking the same thing.</p>\n<p>Caution is required though, as SQ's issues with Bitcoin are obviously becoming a consensus trade, and when those puts are lifted, gamma may turn positive and it could cause the stock to rally significantly.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/b221f08c025ba225e32114f0e76dd272\" tg-width=\"640\" tg-height=\"152\"><span>Source: Whalewisdom.com (SQ Funds Positioning)</span></p>\n<p>Further, with relation to ARK ETFs, it is no surprise that there have been&nbsp;significant liquidity issues&nbsp;the last 6 months, and I agree with another Seeking Alpha contributor's thesisherethat we will see a reversion to the mean with respect to prices of stocks held in these ETFs. What can be noted is that Cathie has significantly reduced her exposure to SQ and that she may be picking her battles.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ecce0e1f1cd9e7e47fe27105be3f6ad0\" tg-width=\"640\" tg-height=\"559\"><span>Source: Cathiesark.com (SQ Shares Held - All ETFs)</span></p>\n<p>Given the above information, this is a difficult company to be short. It will either payoff enormously, or rip your face off due to its volatility. Additionally there are many funds wanting some small level of exposure to a company with Bitcoin on the financial statements. Therefore, if you were to trade this as a short at your own risk, discretion is advised and you should always pick your battles.</p>\n<p><b>Price Targets</b></p>\n<p>On the basis of volatility through SQ's ATR it is possible that SQ could move to a low of approximately $100 by the end of the year, moving in favor 40% of the time. This aligns with my year end 2021 price if you remove Bitcoin entirely from the equation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4ec1e2586568ef7e0aea0c54e3503acc\" tg-width=\"640\" tg-height=\"222\"><span>Source: Author (SQ ATR Calculator)</span></p>\n<p>However, it would not be sensible to do this as it is part of their revenue for the time being, no matter how high Bitcoin volumes were in the start of 2021 and how low they may be at the end of the year.</p>\n<p>I do expect the stock to fall again and retest $200, possibly breaking down to $160. Though it is very difficult to determine a valuation with SQ, mainly because the valuation is derived from Bitcoin revenues, and also the perceived value by funds and the market in the future adoption of the asset.</p>\n<p>If the market begins to perceive Bitcoin again as irrelevant, I would expect SQ to slowly sell off to between $150 and $160 (-37% downside) with a low probability that it will rally past $300 (25% upside).</p>\n<p><b>Risks</b></p>\n<p>With respect to SQ the following risks should be noted.</p>\n<p>The company is growing, whether you like SQ or not. The main questions are: Will the market value Bitcoin on any realistic basis? How much is it growing with and without Bitcoin? What is the potential future growth with and without Bitcoin? And does the market believe it, or for that matter care?</p>\n<p>If the Bitcoin fades from relevancy, and judging by Google Trends, it is more likely than it is not, it is not outlandish to assume that SQ will suffer as a result of this and over the 2H 2021 and take a substantial hit to revenue estimates. However, if Bitcoin adoption increases and negative news fades, since this is a growth company, it could simply continue rallying.</p>\n<p>Further, consumer spending patterns are producing mixed data, and above I have presented a bear case. This could easily turn the other way if people's behavior changes, such as applying for jobs which will increase spending in the economy and hopefully produce small business growth and increase small business optimism and expansion, which is very beneficial for SQ as a cyclical business in the payment processing space.</p>\n<p>Again, caution is necessary, though I do think that future growth of the company is priced in and there is a higher risk to holders of SQ to the downside than to the upside.</p>\n<p><b>Summary</b></p>\n<p>SQ is a high growth company with some potential positive points in the long run; however, its valuation is highly questionable due to its high revenue estimates predominantly derived from Bitcoin transactions and not bottom-line earnings growth.</p>\n<p>From a quantitative perspective, it looks good amongst its peers but upon further examination it appears to be extremely overvalued as future growth, at least for 2021, may be derived from Bitcoin. Further, its Cash App adoption statistics may not continue to see the same run rate going forward without continued government stimulus.</p>\n<p>Additionally, it faces several potential macroeconomic hurdles with respect to small business exposure, lending competitors, consumer transaction competitors, Bitcoin legislation and softening retail demand.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Square: The Bear Case</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nSquare: The Bear Case\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-27 10:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4436723-square-the-bear-case><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.\nIn reality, the company has struggled to translate its ...</p>\n\n<a href=\"https://seekingalpha.com/article/4436723-square-the-bear-case\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SQ":"Block"},"source_url":"https://seekingalpha.com/article/4436723-square-the-bear-case","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1117734317","content_text":"Summary\n\nOn the surface, Square appears to be a growing company and a good investment with strong revenue growth and a large Cash App user base.\nIn reality, the company has struggled to translate its top line into bottom line earnings.\nThis has resulted in Square expanding its products to justify exaggerated revenue valuations which may never result in meaningful earnings growth.\nAnd whilst at first glance its Cash App story appears to be a budding prospect, it may be nothing more than temporary growth based on necessity.\nGiven the current valuation and the increasing Bitcoin headwinds, Square could face significant revisions downwards in revenue and earnings.\n\nAndreyPopov/iStock via Getty Images\nIntroduction\nSquare Inc.(NYSE:SQ)is one of the most popular stocks among retail traders and investors, ranking 57 in Robinhood's top 100 rankings. This has resulted in a 135% increase in price over the last year allowing SQ to reach a market capitalization of greater than $100bln, trading with the volatility of a mid-cap company.\nOn the surface the price and valuation may seem justified, with the company sequentially increasing revenues and expanding its portfolio of products through Cash App, Bitcoin (BTC-USD), PPP loans and most recently delving into the commercial loans business with a banking license via Square Financial Services.\nHowever, these valuations are becoming disaggregated from the fundamentals of the company and its core business on speculation of future revenue projections which are heavily reliant on Bitcoin revenues.\nSource: Author, with data from SQ Investor Relations (Q1 2021 Historical Financial Information)\nIn addition to this, SQ potentially faces several other issues related to small business positioning; policy and regulation; and general macroeconomic factors which may create headwinds that will impact its valuation and pose an asymmetric downside risk for investors, which I will extrapolate on below.\nOverview\nSQ is a payment processing and business tool provider that facilitates transactions between businesses / sellers and individuals and provides them with hardware, online infrastructure and analytics. Additionally, it services individuals through Cash App which appears to be growing exponentially and allows users to send, receive, hold and invest money, and recently Bitcoin.\nSource: SQ Investor Relations (Q1 2021 Shareholder Letter - Cash App Inflows vs Gross Profit)\nAs of March 2020, the company has received a Banking License from the Federal Deposit Insurance Corporation (FDIC) to originate commercial loans to retailers which use SQ for payment processing.\nGiven all of this positive news, it is not surprising that the stock has rallied over 330% in the last 3 years on the basis of future growth projections and, since 2020, has chased revenue estimates.\nThis was a common occurrence during COVID, as unchartered waters meant that top line growth was imperative for survival. Further, seemingly endless money printing by the Fed, combined with zero rates, meant money flowed into stocks which showed the highest potential for growth.\nSource: Author, using data from YCHARTS (SQ vs EPS Estimates and Revenue Estimates 2021)\nHowever, in Q1 2021, as the printing slowed, yields began to rise and federal transfers to individuals dissipated, and consequently ever increasing revenue estimates began to mean less for the market, resulting in SQ price action ranging between $200 to $280.\nSource: Author, using data from YCHARTS (SQ Price YTD)\nQuantitative\nYear to Date, SQ has been a good performer relative to the payment processing sector, returning ~12% price increases to shareholders.\nSource: Author, using data from YCHARTS (SQ vs Payment Processing Sector >$50 bln Year to Date)\nIt is also not a surprise to see why when evaluated against these companies on a forward earnings and revenue basis. SQ has above average and median earnings growth for 2021 and 2022, as well as strong revenue growth for 2021.\nSource: Author, Sector Comparison (Payment Processors)\nWhilst SQ's forward PE seems exaggerated in contrast to its counterparts, its forward PS is relatively small and below the sector averages and median, perhaps justifying its present value.\nHowever, once you remove Bitcoin revenue from the equation, you get much more exaggerated forward PS estimates on much lower revenue growth, which represents SQ's primary business.\nFor this equation, I have removed Bitcoin revenue from their Q1 2021 results, and judging by average analyst expectations which show little to no sequential revenue growth from Q2-Q4 2021, multiplied this figure by 4x for a year end revenue estimate of $6,140.70 mln. For prior years, I have removed Bitcoin from Revenue.\nSource: Author, SQ Revenue Growth (2018 to 2021 Estimates with Bitcoin vs excl Bitcoin)\nSource: Author, SQ vs Sector Comps (Revenue Estimates excl Bitcoin)\nAs we can see this paints a very different picture of the company, and whilst revenue is still growing slightly above comps which also have high PS ratios, suddenly valuations on earnings look more meaningful and it becomes difficult to justify a forward PE 3x above the average and 4.5x above the median. Especially when companies such as American Express Co (AXP), Mastercard Inc (MA), PayPal Holdings Inc (PYPL) and Visa Inc (V) are producing on average 4x higher EPS. The majority of which pay a dividend and have similar growth estimates with less volatility risk.\nMany will suggest that \"this does not matter as BTC is now part of their revenue metrics and that is that, besides transaction volume is what is important\". However, I would cite the example of the 2018 Bitcoin sell off in which Bitcoin fell 70%, and transaction volumes fell from highs by approximately 75% as well:\nSource: Bitcoinvisuals.com (Bitcoin Market Volume 2018)\nOn a valuation basis, this presents a substantial downside risk to investors if Bitcoin continued to retrace as a result of being met by increased regulation globally, as the company is essentially trading on revenue metrics propped up by Bitcoin. Quite simply, price down in Bitcoin could mean downwards revisions to revenue estimates and consequently a highly volatile retracement in the price of SQ.\nSource: Author, using data from YCHARTS (SQ Price Correlation - Revenue, EPS and EBITDA)\nThis becomes increasingly likely given the historical volatility of the stock when compared to its peers and it is not surprising that it is also becoming a consensus short position.\nSource: Author (SQ vs Sector Comps Implied and Realized Volatility and Short Interest)\nGiven the analysis by another Seeking Alpha contributor,The Value Trend in which the author suggests that SQ's 2025 growth is essentially priced in I would have to agree. SQ's reliance on revenue estimates which have been amplified substantially by Bitcoin present an asymmetric risk to the downside in the short to medium term for investors.\nMacro\nWhilst we are in the process of reopening, many things remain uncertain, such as the level of demand sustainability, job growth and creation, and inflation.\nWhilst the sentiment is overall positive in the media, there are several macroeconomic issues that are beneath the surface which need to be resolved before we can conclude that we are in the clear.\nSmall Business Environment\nSQ's MRQ shows that nearly 49% of the Gross Profit comes from the Seller ecosystem (small businesses).\nSource: SQ Investor Relations (Q1 2021 10Q Page 39 - Segmented Gross Profit)\nThe majority of this is originating from exposure to sellers with <$500,000 Gross Payment Volume (69.5%). This makes square substantially exposed to fluctuations in the small business cycle.\nSource: SQ Investor Relations (Q1 2021 Shareholder Letter)\nDelving into the Business Formation Statistics, there is a rosy picture, with over 500,000 business applications for the month of May, 2021 providing an endless surge of opportunity for SQ.\nSource: Census.gov (Business Applications, May 2021)\nAgain, when we dig deeper and look at the statistics below which rank the optimism of established small businesses, the picture begins to distort and starts to look like the descent into 2008.\nSource: NFIB (Small Business Economic Trends - Optimism, May 2021)\nFurther, when we examine Small Business future outlook on expansion, this has also descended to lows and similar to what was seen in 2008. This could suggest that the bread and butter of SQ's gross profit margin, may not expand at the rate previously seen during 2017 to 2020.\nSource: NFIB (Small Business Economic Trends - Outlook, May 2021)\nAdditionally, it should be noted that the two primary reasons small businesses are giving for their negative outlook are \"Economic Conditions\" and \"Political Climate\", which could be related to the election in 2020, COVID, recent policy changes and be somewhat transitory. Alternatively it could resemble the slow march of 2008 to 2016, we simply do not know, except for the fact it is a low reading and consequently could weigh on SQ's high revenue and earnings growth estimates.\nSource: NFIB (Small Business Economic Trends - Reasons for Outlook, May 2021)\nSmall Business Lending\nLooking forward, SQ clearly aims to solidify its position in the commercial lending space through acquiring a banking license. This is very positive for the company due to their large and growing small business user base,their experience since 2014, and the PPP program, which stopped on May 31, 2021.\nCurrently, bank lending has receded as a result of recovery efforts from COVID.\nSource: YCHARTS (US Commercial Banks - Commercial and Industrial Loans)\nThis can be verified through the credit conditions index in the monthly NFIB report. Although, an American Banker survey is reporting that 86% of small businesses are finding it difficult to access credit, and are having to resort to personal credit.\nThis is positive for SQ as it will allow them to fill the gap for credit to small business within the market. Though I believe it will be short lived as there is speculation that when the Fed tapers, they will also announce the lifting of capital restraints placed on Wells Fargo & Company (WFC).\nSource: Credit Suisse (Global Money Dispatch - 25 May 2021)\nThere is a fairly good probability that this will occur, given that early in 2020 the Fed had lifted these restraints to help small businesses via the PPP program and tapering has a history of upsetting the market. If this occurs, I suspect WFC will become a giant amongst the small business credit space once more and be a very tough competitor to SQ due to their extensive network and history in the space.\nBitcoin, Legislation & Gensler\nBitcoin has been making headlines as of 2H 2020 and much of 1H 2021 for good reason. It is gaining traction amongst retail traders and investors and has shown exceptional appreciation. Further, some minor banks have been interested in the medium although many banks and financial institutions have explicitly banned the purchase of Bitcoin using their services.\nThe primary reasons for their objection is more than likely to do with illicit activities, such as money laundering,terrorism,fake transaction volumes, and similar activities which I do not want to get into and neither do banks.\nConsequently, on the recent hype, many countries are now stepping in to regulate the use of Bitcoin, but others are going a step further and are enacting legislation to ban its use and mining, most notably,China and India.\nThis has had a negative impact on the price of Bitcoin since the ATHs in May 2021 of ~$65,000, retracing -46% since then.\nIt is also extremely negative for Bitcoin going forward as the majority of Bitcoin mining is done in China (~70% YTD) with Hashrates of mining being correlated to the price. Therefore if these recede on decreasing Chinese mining activity, price could surely follow, affecting SQ's Bitcoin holdings and future transaction volumes.\nSource: Cambridge University (Cambridge Bitcoin Electricity Consumption Index YTD)\nWhilst the SEC has come out and said that Bitcoin regulation is not on their agenda for 2021, Gary Gensler has warned investors to be cautious. Gensler is also has a long history on regulations to protect investors, and despite not putting Bitcoin on the agenda for 2021, I advise readers to study his history with respect to 2000 and 2008.\nLooking out further, this does not bode well for Bitcoin and SQ, generally. It is likely that there could be further regulation rather than adoption, negatively impacting its price, leading to a repeat of 2018 lower volumes as well as mining activity.\nGeneral Economy - The Worry for Retail\nSeparately, we could also be seeing a negative situation for retail going forward. Much of the recovery in retail as not been driven by \"pent up demand\" but mostly through subsidies issued throughout 2020 and the start of 2021. When examining the graph below, we can see that once you subtract transfer receipts (government stimulus cheques and employment benefits - red line), income is not what it used to be.\nSource: Federal Reserve Bank of St. Louis (Disposable Income vs Real Income minus Transfers vs Personal Savings vs Retail Trade Sales)\nAdditionally, we can see that much of the spikes in retail sales (purple) have been driven mainly through the stimulus cheques which bolstered disposable income (blue) and consumer savings (green), though now stimulus has ended and people are having to start to dig into their savings, which is dropped 54% month on month between March and April.\nThe consumer spending situation is made worse when examining U6 unemployment, which is considered to be the most revealing amongst economists as it includes unemployed, underemployed and discouraged job seekers. This, generally speaking, does not bode well for consumer discretionary spending patterns going forward.\nSource: Macrotrends.net (U6 Unemployment Rate vs U5 vs Official)\nFinally, the rising cost of food and energy, which for food I expect to continue, should hamper consumer discretionary spend going forward. I have previously written articles on The Mosaic Company (MOS)hereand The Andersons (ANDE)here, which outline my justification for this trend.\nIn relation to SQ, we can see their historical exposure to consumer discretionary spend based on end 2019 data. When taking into account figures from: retail; professional services, beauty and personal care, home and repair, leisure and entertainment, and casual use, the total exposure is approximately 59%.\nSource: Statista (Raynor de Best - GPV by Seller Industry Dec 2019)\nWhilst this may not impact its revenue figures substantially due to the weighting of bitcoin, I do expect this to undermine is gross profit figures going forward and negatively impact margins as stimulus further fades.\nFinancials\nBitcoin\nWhen examining the financials of SQ we can easily see that Bitcoin is the predominant factor driving its revenue growth (MRQ 69% of total revenue) of which its valuation is derived (see above Introduction section - SQ Price vs Revenue Segments; and Quantitative section - SQ Price correlation).\nFrom their Q1 2021 Shareholder Letter, page 12 they have stated that on March 31, 2021 the fair value of their holdings was $472 million. On this date the closing price was $58,918.83, or approximately 8,011 Bitcoins. They also state they initially invested $200 million into bitcoin during this period and Q4, so their average price is roughly $25,000 per Bitcoin.\nCurrently, the price of Bitcoin sits at approximately $34,600 and it also appears to be struggling to find traction, especially when you examine some other trends. For example, looking at search trends of \"Buy Bitcoin\" on Google Trends, this is clearly waning.\nSource: Google Trends (Buy Bitcoin search terms - Worldwide 5 Yrs)\nAdditionally, when you align this data with stimulus payments it is clear there is a relationship between the two in 2H 2020, and much of the recent speculation could be driven by government subsidies.\nSource: USA.Gov (COVID Stimulus Cheque Dates)\nThe spike in searches occurs roughly around the time of the two latter government stimulus cheques with a lag of a few days to a few weeks.\nSource: Google Trends (Buy Bitcoin search terms - USA 12 Months)\nThis also coincides with Bitcoin's price run up in December 2020 and January 2021, as well the failed rally in March and April 2021.\nSource: YCHARTS (Bitcoin Price 1 Yr)\nThus, in this example, if we have a continued sell off of -70%, which is similar to what occurred in 2018. We would be back at November 2020 Bitcoin prices of $20,000 approximately.\nThis is still feasible on the basis of dwindling volume, further legislation and declining hashrates. It could also be theorized that SQ may carry an impairment charge of $40 million, which would greatly affect operating income, net income and shareholder earnings and future estimates. Though this is purely theoretical without accounting for transactions in the current quarter, such as purchases or sales at or near ATHs.\nAdditionally, with the lack of stimulus payments going forward and tighter consumer discretionary spend, the revenue generated from Bitcoin may also decline as less money enters the space and volumes decline. Negatively impacting revenue estimates for SQ and subsequently their price and valuation.\nCash App\nOn the surface, it looks like Cash App is growing exponentially into a viable platform for users to transact, with more than 36 million monthly transacting active customers, up 50% YoY.\nSource: SQ Investor Relations (Q4 2020 Shareholder Letter)\nHowever, this growth in Cash App may be unsustainable going forward, with SQ elaborating on this in their Quarterly filing notes:\n\n Cash App revenue benefited from growth in numbers of active Cash App customers and from \n government relief programs most recently passed into law in late December 2020 and in March 2021, as well as cumulative benefit from earlier stimulus programs passed in 2020. These programs provided additional stimulus relief and unemployment benefits which resulted in an increase in consumer spending and inflows into our Cash App ecosystem. Cash App revenue growth may not be sustained at the same levels in future quarters and may be impacted by the enactment of further stimulus relief and benefit programs, as well as the demand and market prices for bitcoin, amongst other factors.\n\n\nSource: SQ Investor Relations (Q1 2021 10Q Filings - Page 49)\n\nPart of the issue with Cash App is theoretical continued use and future adoption. Much of the growth seen over the last year was predominantly fueled by stimulus payments through the Cash App ecosystem, and therefore by necessity given the circumstances.\nThe two sharp spikes in searches for the app occurred on:\n\nApril 12-18 2020\nJanuary 24-30 2021\n\nThese coincide with stimulus payments as they initially sent them and they gradually deposited them into people's accounts.\nSource: Google Trends (Cash App search terms - USA 5 Years)\nTherefore, as government stimulus payments end, and Bitcoin again fades from relevancy, and more people return to work and day-trade less, this could negatively impact user growth metrics going forward, impacting SQ revenue estimates, gross profit figures, and its earnings.\nFurther, there are a multitude of other more viable platforms, which another Seeking Alpha contributor,The Value Trend, has elaborated onhere.\nIt is also important to keep in mind how they define these users, a \"Transacting active Cash App customer\" is the following:\n\n ... has at least\n one financial transactionusing any product or service within Cash App during the specified period.\n\n\nSource: SQ Investor Relations (Q4 2020 Shareholder Letter - Page 4)\n\nSo, if a customer received their wages from an employer, or unemployment benefit, into Cash App once per month, and transferred all of it to their bank account once per month, they are a \"transacting active Cash App customer\"...\nPerhaps a better quantifier of an \"active\" customer would be greater than 5 transactions.\nTechnicals\nExamining the technicals of SQ, it is clear that the stock is now ranging between $200 and $280, with several breakout attempts at $250 and 2 failed attempts near $300, showing several signs that momentum is dying out.\nSource: Author, with data from FINVIZ (SQ Chart)\nWhen examining dark pool order flows, there is a possibility for the current rally to continue as dark pools are at lows, which may likely continue into earnings by August. Although I would not get my hopes up unless some seriously good news occurs and Bitcoin rallies back to ATHs.\nSource: Squeezemetrics.com (SQ Dark Pools vs Implied Vol 2 Years)\nFrom the 13F filings, we can also see that many funds have reduced exposure and closed their positions, with fewer new positions being added. The Put to Call ratio is also becoming quite high, especially on a stock that has $100 bln market cap, signaling that we are not the only ones thinking the same thing.\nCaution is required though, as SQ's issues with Bitcoin are obviously becoming a consensus trade, and when those puts are lifted, gamma may turn positive and it could cause the stock to rally significantly.\nSource: Whalewisdom.com (SQ Funds Positioning)\nFurther, with relation to ARK ETFs, it is no surprise that there have been significant liquidity issues the last 6 months, and I agree with another Seeking Alpha contributor's thesisherethat we will see a reversion to the mean with respect to prices of stocks held in these ETFs. What can be noted is that Cathie has significantly reduced her exposure to SQ and that she may be picking her battles.\nSource: Cathiesark.com (SQ Shares Held - All ETFs)\nGiven the above information, this is a difficult company to be short. It will either payoff enormously, or rip your face off due to its volatility. Additionally there are many funds wanting some small level of exposure to a company with Bitcoin on the financial statements. Therefore, if you were to trade this as a short at your own risk, discretion is advised and you should always pick your battles.\nPrice Targets\nOn the basis of volatility through SQ's ATR it is possible that SQ could move to a low of approximately $100 by the end of the year, moving in favor 40% of the time. This aligns with my year end 2021 price if you remove Bitcoin entirely from the equation.\nSource: Author (SQ ATR Calculator)\nHowever, it would not be sensible to do this as it is part of their revenue for the time being, no matter how high Bitcoin volumes were in the start of 2021 and how low they may be at the end of the year.\nI do expect the stock to fall again and retest $200, possibly breaking down to $160. Though it is very difficult to determine a valuation with SQ, mainly because the valuation is derived from Bitcoin revenues, and also the perceived value by funds and the market in the future adoption of the asset.\nIf the market begins to perceive Bitcoin again as irrelevant, I would expect SQ to slowly sell off to between $150 and $160 (-37% downside) with a low probability that it will rally past $300 (25% upside).\nRisks\nWith respect to SQ the following risks should be noted.\nThe company is growing, whether you like SQ or not. The main questions are: Will the market value Bitcoin on any realistic basis? How much is it growing with and without Bitcoin? What is the potential future growth with and without Bitcoin? And does the market believe it, or for that matter care?\nIf the Bitcoin fades from relevancy, and judging by Google Trends, it is more likely than it is not, it is not outlandish to assume that SQ will suffer as a result of this and over the 2H 2021 and take a substantial hit to revenue estimates. However, if Bitcoin adoption increases and negative news fades, since this is a growth company, it could simply continue rallying.\nFurther, consumer spending patterns are producing mixed data, and above I have presented a bear case. This could easily turn the other way if people's behavior changes, such as applying for jobs which will increase spending in the economy and hopefully produce small business growth and increase small business optimism and expansion, which is very beneficial for SQ as a cyclical business in the payment processing space.\nAgain, caution is necessary, though I do think that future growth of the company is priced in and there is a higher risk to holders of SQ to the downside than to the upside.\nSummary\nSQ is a high growth company with some potential positive points in the long run; however, its valuation is highly questionable due to its high revenue estimates predominantly derived from Bitcoin transactions and not bottom-line earnings growth.\nFrom a quantitative perspective, it looks good amongst its peers but upon further examination it appears to be extremely overvalued as future growth, at least for 2021, may be derived from Bitcoin. Further, its Cash App adoption statistics may not continue to see the same run rate going forward without continued government stimulus.\nAdditionally, it faces several potential macroeconomic hurdles with respect to small business exposure, lending competitors, consumer transaction competitors, Bitcoin legislation and softening retail demand.","news_type":1},"isVote":1,"tweetType":1,"viewCount":180,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":161415815,"gmtCreate":1623938133637,"gmtModify":1703823998900,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"nice","listText":"nice","text":"nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/161415815","repostId":"2143379379","repostType":2,"repost":{"id":"2143379379","kind":"highlight","pubTimestamp":1623893744,"share":"https://ttm.financial/m/news/2143379379?lang=&edition=fundamental","pubTime":"2021-06-17 09:35","market":"us","language":"en","title":"These 10 Stocks Make Up 85% of Warren Buffett's Portfolio","url":"https://stock-news.laohu8.com/highlight/detail?id=2143379379","media":"Motley Fool","summary":"Diversification isn't necessary if you know what you're doing, according to the Oracle of Omaha.","content":"<p>If you've ever wondered why <b>Berkshire Hathaway</b> (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett isn't infallible, but he's delivered an annual average return of 20% since the mid-1960s for his shareholders. In aggregate, we're talking about a return of more than 2,800,000%!</p>\n<p>What's even more amazing is that Buffett hasn't done anything the average investors couldn't do to net these huge gains. He focuses on a few sectors and industries that interest him, buys companies with clear-cut competitive advantages, and most importantly hangs onto those stakes for a very long time.</p>\n<p>Another source of Buffett's success is concentration. The Oracle of Omaha doesn't believe diversification is necessary if you know what you're doing. This is readily apparent in Berkshire Hathaway's $302.6 billion investment portfolio. As of this past weekend, 85% of Berkshire's invested assets ($257.3 billion) were tied up in only 10 stocks.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/601f21f3cc2f9e5524bd5d613063faa2\" tg-width=\"700\" tg-height=\"466\"><span>Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.</span></p>\n<h2>1. Apple: $115.6 billion</h2>\n<p>Tech kingpin <b>Apple</b> (NASDAQ:AAPL) makes up about 38% of Warren Buffett's portfolio by itself and has been dubbed \"Berkshire's third business\" by the Oracle of Omaha. Apple offers some of the strongest branding in the world, is the clear leader in smartphones in the U.S., and has been pivoting to higher-margin services under the leadership of CEO Tim Cook. Though iPhone sales remain Apple's top product, services becoming a larger percentage of total sales will help remove the revenue lumpiness associated with new product launches.</p>\n<h2>2. Bank of America: $43.2 billion</h2>\n<p>Bank stocks have long been Buffett's favorite place to put Berkshire's money work. <b>Bank of America</b> (NYSE:BAC) is Berkshire's unquestioned largest bank holding, with more than 14% of invested assets. Bank of America has done an excellent job of controlling its noninterest expenses by consolidating branches and emphasizing digital banking. It's also in line to benefit more than any other money-center bank from an eventual rise in interest rates.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/ed3e6a16841306014bf0cfc3b1697b23\" tg-width=\"700\" tg-height=\"466\"><span>Image source: American <a href=\"https://laohu8.com/S/EXPR\">Express</a>.</span></p>\n<h2>3. American Express: $24.9 billion</h2>\n<p>Payment processor and lender <b>American Express</b> (NYSE:AXP) is Buffett's third-largest and third-longest-held stock. After 28 years of holding AmEx, Berkshire Hathaway's position has grown to almost $25 billion in value. This is a cyclical company that benefits from long periods of economic expansion, as well as its ability to attract affluent clientele. These well-to-do clients are less likely to change their spending habits when economic hiccups arise, which often means less worry about credit delinquencies for AmEx.</p>\n<h2>4. Coca-Cola: $22.5 billion</h2>\n<p>Speaking of long-tenured holdings, beverage behemoth <b>Coca-Cola</b> (NYSE:KO) is the longest-held stock in Buffett's portfolio (33 years). Coca-Cola operates in all but two countries worldwide (North Korea and Cuba) and has more than 20 brands generating at least $1 billion in annual sales. Thanks to its top-notch marketing team, it's also the best-known consumer goods brand. Coke has holiday tie-ins, has allied itself with well-known brand ambassadors, and is embracing digital advertising and social media as a way to get its message to a younger generation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/cc21d6aabfd53f63ded95ae16cbd64e1\" tg-width=\"700\" tg-height=\"468\"><span>Image source: Getty Images.</span></p>\n<h2>5. Kraft Heinz: $14.1 billion</h2>\n<p>There's little question that <b>Kraft Heinz</b> (NASDAQ:KHC) is the oddball holding in Buffett's top 10. That's because Buffett admits to Heinz overpaying for Kraft Foods, and the combined company largely underperforming in recent years. This includes a greater than $15 billion goodwill writedown in 2019. While the pandemic has helped boost demand for packaged foods, Kraft Heinz's balance sheet is still bogged down by high debt levels and goodwill. In short, Berkshire Hathaway is sort of stuck with its 325.6 million shares.</p>\n<h2>6. Verizon Communications: $9.1 billion</h2>\n<p>Telecommunications giant <b>Verizon</b> (NYSE:VZ) is a fairly recent addition to Berkshire Hathaway's portfolio, although it's been bought hand over fist in the previous two quarters by Buffett and his team. The lure of Verizon is likely its 4.4% dividend yield, which is arguably <a href=\"https://laohu8.com/S/AONE\">one</a> of the safest high-yield payouts on the planet. What's more, Verizon should benefit immensely from the rollout of 5G infrastructure. It's been a decade since the last major upgrade to download speeds, which suggests that a multiyear tech upgrade cycle will lead to higher-margin data consumption.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/7343c3ce7330b86321a8ec9384d4baea\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<h2>7. U.S. Bancorp: $8.7 billion</h2>\n<p>Next to BofA, <b>U.S. Bancorp</b> (NYSE:USB) is Buffett's favorite bank stock. It's a company that regularly trades at a premium to its book value -- and for good reason. U.S. Bancorp has seen its users embrace technology, with the percentage of consumer loans completed digitally skyrocketing over the past two years. Being able to consolidate its physical branches, while also avoiding riskier derivative investments that have gotten U.S. money-center banks in trouble, has helped U.S. Bancorp to some of the highest return on assets among big banks.</p>\n<h2>8. Moody's: $8.5 billion</h2>\n<p>Credit agency and analytics company <b>Moody's</b> (NYSE:MCO) is yet another top-10 holding that's been held for longer than two decades. With an initial cost basis of just over $10, Berkshire Hathaway is sitting on an unrealized gain of better than 3,300% -- and this isn't accounting for dividends. Historically low lending rates have kept Moody's credit rating segment busy, while volatile trading markets are boosting demand for Moody's analytics. It's hard to envision Buffett ever selling this stake.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8abdae403dddfa42107e06ea5bfddf39\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<h2>9. BYD: $6.2 billion</h2>\n<p>Back in 2008, Buffett acquired 225 million shares of China-based electric-vehicle (EV) manufacturer <b>BYD</b> (OTC:BYDDY)&nbsp;for $1.03 a share (it closed this past week at $27.65 a share). In March, BYD sold 16,301 EVs, which is more than higher-profile competitors <b>NIO</b>&nbsp;and <b>XPeng</b>&nbsp;delivered on a combined basis in the same month. With the Society of Automotive Engineers of China forecasting that half of all new vehicles sales in 2035 will be powered by alternative energy, BYD is in pole position to disrupt the largest auto market in the world.</p>\n<h2>10. DaVita: $4.4 billion</h2>\n<p>Rounding out the top 10 is kidney dialysis services company <b>DaVita</b> (NYSE:DVA). Buffett's fascination with the company is likely a numbers play. Over time, an aging U.S. population is going to become more reliant on kidney dialysis services for maintenance purposes. As the clear leader in providing these services, DaVita should see a steady uptick in demand and reimbursement for its services. This patient long-term thesis perfectly embodies the Buffett investing ethos.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>These 10 Stocks Make Up 85% of Warren Buffett's Portfolio</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThese 10 Stocks Make Up 85% of Warren Buffett's Portfolio\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-17 09:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you've ever wondered why Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett...</p>\n\n<a href=\"https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"KO":"可口可乐","MCO":"穆迪","AXP":"美国运通","VZ":"威瑞森","BRK.A":"伯克希尔","KHC":"卡夫亨氏","DVA":"达维塔保健","BRK.B":"伯克希尔B","BAC":"美国银行","AAPL":"苹果","USB":"美国合众银行","BYDDY":"比亚迪ADR"},"source_url":"https://www.fool.com/investing/2021/06/16/10-stocks-make-up-85-of-warren-buffetts-portfolio/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2143379379","content_text":"If you've ever wondered why Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett's name gets brought up so much on Wall Street, it's because of his impressive investing track record. Buffett isn't infallible, but he's delivered an annual average return of 20% since the mid-1960s for his shareholders. In aggregate, we're talking about a return of more than 2,800,000%!\nWhat's even more amazing is that Buffett hasn't done anything the average investors couldn't do to net these huge gains. He focuses on a few sectors and industries that interest him, buys companies with clear-cut competitive advantages, and most importantly hangs onto those stakes for a very long time.\nAnother source of Buffett's success is concentration. The Oracle of Omaha doesn't believe diversification is necessary if you know what you're doing. This is readily apparent in Berkshire Hathaway's $302.6 billion investment portfolio. As of this past weekend, 85% of Berkshire's invested assets ($257.3 billion) were tied up in only 10 stocks.\nBerkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.\n1. Apple: $115.6 billion\nTech kingpin Apple (NASDAQ:AAPL) makes up about 38% of Warren Buffett's portfolio by itself and has been dubbed \"Berkshire's third business\" by the Oracle of Omaha. Apple offers some of the strongest branding in the world, is the clear leader in smartphones in the U.S., and has been pivoting to higher-margin services under the leadership of CEO Tim Cook. Though iPhone sales remain Apple's top product, services becoming a larger percentage of total sales will help remove the revenue lumpiness associated with new product launches.\n2. Bank of America: $43.2 billion\nBank stocks have long been Buffett's favorite place to put Berkshire's money work. Bank of America (NYSE:BAC) is Berkshire's unquestioned largest bank holding, with more than 14% of invested assets. Bank of America has done an excellent job of controlling its noninterest expenses by consolidating branches and emphasizing digital banking. It's also in line to benefit more than any other money-center bank from an eventual rise in interest rates.\nImage source: American Express.\n3. American Express: $24.9 billion\nPayment processor and lender American Express (NYSE:AXP) is Buffett's third-largest and third-longest-held stock. After 28 years of holding AmEx, Berkshire Hathaway's position has grown to almost $25 billion in value. This is a cyclical company that benefits from long periods of economic expansion, as well as its ability to attract affluent clientele. These well-to-do clients are less likely to change their spending habits when economic hiccups arise, which often means less worry about credit delinquencies for AmEx.\n4. Coca-Cola: $22.5 billion\nSpeaking of long-tenured holdings, beverage behemoth Coca-Cola (NYSE:KO) is the longest-held stock in Buffett's portfolio (33 years). Coca-Cola operates in all but two countries worldwide (North Korea and Cuba) and has more than 20 brands generating at least $1 billion in annual sales. Thanks to its top-notch marketing team, it's also the best-known consumer goods brand. Coke has holiday tie-ins, has allied itself with well-known brand ambassadors, and is embracing digital advertising and social media as a way to get its message to a younger generation.\nImage source: Getty Images.\n5. Kraft Heinz: $14.1 billion\nThere's little question that Kraft Heinz (NASDAQ:KHC) is the oddball holding in Buffett's top 10. That's because Buffett admits to Heinz overpaying for Kraft Foods, and the combined company largely underperforming in recent years. This includes a greater than $15 billion goodwill writedown in 2019. While the pandemic has helped boost demand for packaged foods, Kraft Heinz's balance sheet is still bogged down by high debt levels and goodwill. In short, Berkshire Hathaway is sort of stuck with its 325.6 million shares.\n6. Verizon Communications: $9.1 billion\nTelecommunications giant Verizon (NYSE:VZ) is a fairly recent addition to Berkshire Hathaway's portfolio, although it's been bought hand over fist in the previous two quarters by Buffett and his team. The lure of Verizon is likely its 4.4% dividend yield, which is arguably one of the safest high-yield payouts on the planet. What's more, Verizon should benefit immensely from the rollout of 5G infrastructure. It's been a decade since the last major upgrade to download speeds, which suggests that a multiyear tech upgrade cycle will lead to higher-margin data consumption.\nImage source: Getty Images.\n7. U.S. Bancorp: $8.7 billion\nNext to BofA, U.S. Bancorp (NYSE:USB) is Buffett's favorite bank stock. It's a company that regularly trades at a premium to its book value -- and for good reason. U.S. Bancorp has seen its users embrace technology, with the percentage of consumer loans completed digitally skyrocketing over the past two years. Being able to consolidate its physical branches, while also avoiding riskier derivative investments that have gotten U.S. money-center banks in trouble, has helped U.S. Bancorp to some of the highest return on assets among big banks.\n8. Moody's: $8.5 billion\nCredit agency and analytics company Moody's (NYSE:MCO) is yet another top-10 holding that's been held for longer than two decades. With an initial cost basis of just over $10, Berkshire Hathaway is sitting on an unrealized gain of better than 3,300% -- and this isn't accounting for dividends. Historically low lending rates have kept Moody's credit rating segment busy, while volatile trading markets are boosting demand for Moody's analytics. It's hard to envision Buffett ever selling this stake.\nImage source: Getty Images.\n9. BYD: $6.2 billion\nBack in 2008, Buffett acquired 225 million shares of China-based electric-vehicle (EV) manufacturer BYD (OTC:BYDDY) for $1.03 a share (it closed this past week at $27.65 a share). In March, BYD sold 16,301 EVs, which is more than higher-profile competitors NIO and XPeng delivered on a combined basis in the same month. With the Society of Automotive Engineers of China forecasting that half of all new vehicles sales in 2035 will be powered by alternative energy, BYD is in pole position to disrupt the largest auto market in the world.\n10. DaVita: $4.4 billion\nRounding out the top 10 is kidney dialysis services company DaVita (NYSE:DVA). Buffett's fascination with the company is likely a numbers play. Over time, an aging U.S. population is going to become more reliant on kidney dialysis services for maintenance purposes. As the clear leader in providing these services, DaVita should see a steady uptick in demand and reimbursement for its services. This patient long-term thesis perfectly embodies the Buffett investing ethos.","news_type":1},"isVote":1,"tweetType":1,"viewCount":240,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":127985554,"gmtCreate":1624816263578,"gmtModify":1703845493937,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"good to adapt","listText":"good to adapt","text":"good to adapt","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/127985554","repostId":"2146100198","repostType":2,"repost":{"id":"2146100198","kind":"news","pubTimestamp":1624750500,"share":"https://ttm.financial/m/news/2146100198?lang=&edition=fundamental","pubTime":"2021-06-27 07:35","market":"sh","language":"zh","title":"谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化”","url":"https://stock-news.laohu8.com/highlight/detail?id=2146100198","media":"cnBeta","summary":"作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。","content":"<html><body><p>原标题：<a href=\"https://laohu8.com/S/GOOG\">谷歌</a>改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM</p><p>我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。</p><p>在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。 在 2020 年 4 月的更新中，当搜索无法找到与用户查询特别匹配的结果时 ，Google就会通知用户。在 2021 年 2 月，Google推出了“关于此结果”的功能，可提供有关特定搜索结果的更多附加信息。</p><p>根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。</p><div><img src=\"http://k.sinaimg.cn/n/spider2021627/213/w700h313/20210627/12cb-krwipar7144099.jpg/w720fin.jpg\"/></div><p>Google以上面的搜索结果作为示例，在有人搜索“ufo filmed traveling 106 mph”（拍摄到的以 106 英里/小时飞行的 UFO），结果会返回一条消息，告诉用户要小心他们看到的第一个结果，因为事情正在迅速变化： It looks like these results are changing quickly（看起来这些结果在快速变化）。</p><p>如果此主题是新主题，有时可能需要时间才能通过可靠来源添加结果。该警告只会出现在突发新闻类型的情况下，随着更多信息的进入，结果可能会有所不同。但它可能足以指示互联网用户在与他人分享可能不完整的信息之前保持谨慎。</p><p>一些互联网用户已经开始在搜索中收到这些提示，但您的里程会有所不同。大多数互联网搜索不符合条件，因为此 Google 搜索算法更改只会影响与正在发展的、正在进行的事件相关的结果。</p></body></html>","source":"sina_symbol","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化”</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; 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height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化”\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-27 07:35 北京时间&nbsp;&nbsp;&nbsp;<a href=https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml><strong>cnBeta</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>原标题：谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。...</p>\n\n<a href=\"https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.tigerbbs.com/7cb1a202ad9a99e9e2852de348daca32","relate_stocks":{"GOOGL":"谷歌A","03086":"华夏纳指","QNETCN":"纳斯达克中美互联网老虎指数","GOOG":"谷歌","09086":"华夏纳指-U"},"source_url":"https://cj.sina.cn/article/normal_detail?url=https://finance.sina.com.cn/tech/2021-06-27/doc-ikqcfnca3480472.shtml","is_english":false,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146100198","content_text":"原标题：谷歌改善搜索结果可靠性 搜索某些内容会提示“结果正快速变化” 来源：cnBeta.COM我们在互联网上的很多日常活动都是从搜索更多信息开始的，无论是搜索新闻，还是寻找我们个人感兴趣的工作、个人主题的信息。作为全球使用最广泛的在线搜索引擎，Google不断增强其可靠性，以确保提供的数据是真实的。在新冠疫情期间，假新闻和错误信息这个问题变得非常明显，因此Google推出了一些新功能来改进搜索。 在 2020 年 4 月的更新中，当搜索无法找到与用户查询特别匹配的结果时 ，Google就会通知用户。在 2021 年 2 月，Google推出了“关于此结果”的功能，可提供有关特定搜索结果的更多附加信息。根据一篇博客文章，Google搜索的算法现在可以检测“某个主题何时快速发展，而一系列来源尚未纳入考虑范围”。发生这种情况时 ，Google 搜索会放置一个指示符，告诉用户与结果相关的信息正在迅速变化，最好稍后在有更多信息可用时返回搜索。换句话说，当搜索结果可能不准确或不完整时 ，Google现在会警告用户。Google以上面的搜索结果作为示例，在有人搜索“ufo filmed traveling 106 mph”（拍摄到的以 106 英里/小时飞行的 UFO），结果会返回一条消息，告诉用户要小心他们看到的第一个结果，因为事情正在迅速变化： It looks like these results are changing quickly（看起来这些结果在快速变化）。如果此主题是新主题，有时可能需要时间才能通过可靠来源添加结果。该警告只会出现在突发新闻类型的情况下，随着更多信息的进入，结果可能会有所不同。但它可能足以指示互联网用户在与他人分享可能不完整的信息之前保持谨慎。一些互联网用户已经开始在搜索中收到这些提示，但您的里程会有所不同。大多数互联网搜索不符合条件，因为此 Google 搜索算法更改只会影响与正在发展的、正在进行的事件相关的结果。","news_type":1},"isVote":1,"tweetType":1,"viewCount":420,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":124124104,"gmtCreate":1624754888408,"gmtModify":1703844398226,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Good!","listText":"Good!","text":"Good!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/124124104","repostId":"2146028795","repostType":2,"repost":{"id":"2146028795","kind":"highlight","weMediaInfo":{"introduction":"Reuters.com brings you the latest news from around the world, covering breaking news in markets, business, politics, entertainment and technology","home_visible":1,"media_name":"Reuters","id":"1036604489","head_image":"https://static.tigerbbs.com/443ce19704621c837795676028cec868"},"pubTimestamp":1624591018,"share":"https://ttm.financial/m/news/2146028795?lang=&edition=fundamental","pubTime":"2021-06-25 11:16","market":"us","language":"en","title":"Berkshire Hathaway appears to buy back more stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2146028795","media":"Reuters","summary":"June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc appears to have extended its drive to re","content":"<p>June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc&nbsp;appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.</p>\n<p>Edward Jones &amp; Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.</p>\n<p>Berkshire did not immediately respond on Thursday to a request for comment.</p>\n<p>Buffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.</p>\n<p>\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.</p>\n<p>Berkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.</p>\n<p>Its last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.</p>\n<p>\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in <a href=\"https://laohu8.com/S/AONE\">one</a>'s stock.\"</p>\n<p>Berkshire may discuss buybacks in its financial report for the second quarter, likely in early August.</p>\n<p>On Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.</p>\n<p>The donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.</p>\n<p>That stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.</p>\n<p>The dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.</p>\n<p>Repurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.</p>\n<p>Berkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc</p>\n<p>and $Bank of America Corp(BAC-N)$ .</p>\n<p>Shanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Berkshire Hathaway appears to buy back more stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBerkshire Hathaway appears to buy back more stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1036604489\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/443ce19704621c837795676028cec868);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Reuters </p>\n<p class=\"h-time\">2021-06-25 11:16</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc&nbsp;appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.</p>\n<p>Edward Jones &amp; Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.</p>\n<p>Berkshire did not immediately respond on Thursday to a request for comment.</p>\n<p>Buffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.</p>\n<p>\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.</p>\n<p>Berkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.</p>\n<p>Its last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.</p>\n<p>\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in <a href=\"https://laohu8.com/S/AONE\">one</a>'s stock.\"</p>\n<p>Berkshire may discuss buybacks in its financial report for the second quarter, likely in early August.</p>\n<p>On Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.</p>\n<p>The donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.</p>\n<p>That stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.</p>\n<p>The dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.</p>\n<p>Repurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.</p>\n<p>Berkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc</p>\n<p>and $Bank of America Corp(BAC-N)$ .</p>\n<p>Shanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"</p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BRK.A":"伯克希尔","BRK.B":"伯克希尔B"},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2146028795","content_text":"June 24 (Reuters) - Warren Buffett's Berkshire Hathaway Inc appears to have extended its drive to repurchase its own stock, even with its share price near a record high, according to regulatory filings and an analyst.\nEdward Jones & Co analyst James Shanahan estimated that buybacks have totaled about $5.15 billion between April 22 and June 22, and about $6.46 billion in the second quarter, based on Berkshire's average share price during the applicable periods.\nBerkshire did not immediately respond on Thursday to a request for comment.\nBuffett has aggressively repurchased Berkshire shares as high stock market valuations and the growth of special purpose acquisition companies, which take private companies public, made buying whole companies appear expensive.\n\"It's a killer,\" Buffett said at Berkshire's May 1 annual meeting, referring to SPACs.\nBerkshire repurchased $6.6 billion of stock in the first quarter, and a record $24.7 billion in 2020.\nIts last major acquisition was a $32.1 billion takeover of aircraft parts maker Precision Castparts in 2016. Berkshire ended March with $145.4 billion of cash and equivalents.\n\"There could be deal frustration,\" said Cathy Seifert, a CFRA Research analyst with a \"hold\" rating on Berkshire. \"Share buybacks also reflect confidence in one's stock.\"\nBerkshire may discuss buybacks in its financial report for the second quarter, likely in early August.\nOn Wednesday, Buffett donated more than $4.1 billion of his Berkshire stock to the Bill and Melinda Gates Foundation and four family charities.\nThe donations left him with a 15.8% stake in his Omaha, Nebraska-based conglomerate, regulatory filings show.\nThat stake suggests Berkshire's share count has been dropping, based on reported shares outstanding as of March 31 and April 22, according to another regulatory filing.\nThe dollar amount of any buybacks depends on what price Berkshire paid. Through Wednesday, Berkshire's share price was down 7% from its early May record high.\nRepurchasing stock \"offers a simple way for investors to own an ever-expanding portion of exceptional businesses,\" Buffett wrote on Feb. 27 in his annual shareholder letter.\nBerkshire owns several dozen businesses including the BNSF railroad and Geico car insurance, and stocks such as Apple Inc\nand $Bank of America Corp(BAC-N)$ .\nShanahan said Berkshire's cash hoard may have declined since March, based on the company's investment activity and ability to generate free cash flow. He rates Berkshire a \"buy.\"","news_type":1},"isVote":1,"tweetType":1,"viewCount":529,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":164925721,"gmtCreate":1624167087063,"gmtModify":1703830021620,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"But nobody can tell when","listText":"But nobody can tell when","text":"But nobody can tell when","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/164925721","repostId":"1126454279","repostType":4,"isVote":1,"tweetType":1,"viewCount":199,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":142861584,"gmtCreate":1626141404548,"gmtModify":1703754140518,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"Like!","listText":"Like!","text":"Like!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/142861584","repostId":"1161134258","repostType":2,"repost":{"id":"1161134258","kind":"news","pubTimestamp":1626137252,"share":"https://ttm.financial/m/news/1161134258?lang=&edition=fundamental","pubTime":"2021-07-13 08:47","market":"us","language":"en","title":"Anything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%","url":"https://stock-news.laohu8.com/highlight/detail?id=1161134258","media":"zerohedge","summary":"While central banks, tenured economists and the financial media are doingeverythingin their propagan","content":"<p>While central banks, tenured economists and the financial media are doing<i>everything</i>in their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (although it now appears that even the Fed is getting some doubts writing in its semi-annual monetary policy report that inflation is \"<i><b>more lasting but likely still temporary</b></i>\" until proven otherwise, of course), the shocking reality on the ground is that the Fed has effectively lost control over near-term inflation expectations, as the NY Fed's own survey of consumer expectations reveals.</p>\n<p>According to the latest, June, installment of this closely watched survey, consumer inflation expectations for one year ahead, jumped by the most on record,<b>surging by 0.8% in one month, from 4.0% in May to an all-time high for this series of 4.8% in June.</b></p>\n<p><img src=\"https://static.tigerbbs.com/687424aa9936131fc5fd4fb975eb16c9\" tg-width=\"500\" tg-height=\"225\"></p>\n<p>As the NY Fed details, \"the increase in the short-term measure was driven mostly by respondents who have some college education. Our measures of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) reached new series’ highs at both horizons.\"</p>\n<p>There was some hope that the US won't end up as Weimar in the Fed's median inflation expectations for the three-year horizon which, unlike the 1-Year spot, were little changed from the prior month at 3.6%. Still, arguing that inflation at 3.6% in 3 years is acceptable to the Fed's formerly dual mandate (which has since grown toSocial Justice, Race, Gender Issues, Climate Change And Inequality), is at best laughable.</p>\n<p>However, in a testament to just how sticky most Americans expect inflation to be, the most valuable (and widespread) middle-class asset - housing - is expected to rise at near-record levels<b>with the median year-ahead home price change expectations at 6.2% in June, substantially higher than its 12-months trailing average of 3.7%,</b>if well below the current double-digit pace of home price increase which has pushed the average home price to a new all-time high. According to the Fed, \"Median year-ahead home price growth uncertainty—or the uncertainty expressed regarding year-ahead home price growth outcomes—increased and reached a new series high.\"</p>\n<p><img src=\"https://static.tigerbbs.com/730babaea29df064660a7f25212d1a82\" tg-width=\"721\" tg-height=\"439\"></p>\n<p>Looking at a breakdown of inflation expectations by commodity, the median one-year ahead expected change in the cost of college education increased to 7.0% from 6.1% in May, its highest reading since April 2019. In contrast, the median expected changes in the price of food and gasoline decreased to 7.1% and 9.2%, respectively, from 8.0% and 9.8% in May. The median expected change in the cost of medical care and rent remained unchanged at 9.4% and 9.7%; elsewhere medical costs are expected to rise 9.36%; and rent prices will rise 9.66%.</p>\n<p><img src=\"https://static.tigerbbs.com/003d8db78cc2804186ff076cccec3077\" tg-width=\"723\" tg-height=\"435\"></p>\n<p>Some other notable highlights from the survey: 9.59% (vs 9.69% in the prior month), expect to not be able to make minimum debt payment over the next three months; the mean perceived probability of losing one’s job in the next 12 months fell from 12.6% to 10.9%, hitting new series low which is to be expected in a country with record numbers of job openings.</p>\n<p>Some more details from the Fed's survey:</p>\n<p><b>Labor Market</b></p>\n<ul>\n <li>Median one-year ahead expected earnings growth increased by 0.1 percentage point to 2.6% in June, its highest reading since the start of the pandemic (February 2020). The increase was driven by respondents who have at least some college education.</li>\n <li>Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now— decreased to 30.7% from 31.9%, a new series’ low.</li>\n <li>The mean perceived probability of losing one’s job in the next 12 months decreased from 12.6% to 10.9%, reaching a new series’ low. The mean probability of leaving one’s job voluntarily in the next 12 months also decreased to 18.6% from 18.7%, staying close to its trailing 12-month average of 18.1%.</li>\n <li>The mean perceived probability of finding a job in the next three months (if one’s current job were lost) increased by 0.2 percentage point to 54.2%, its highest reading since February 2020. The increase was driven by those with at least some college education. The series remains substantially below its 2019 average of 59.8%.</li>\n</ul>\n<p><b>Household Finance</b></p>\n<ul>\n <li>The median expected year-ahead household income growth increased to 3.0% in June from 2.8%. The increase was broad-based across age, income, and education groups.</li>\n <li>Median household spending growth expectations increased by 0.2 percentage point to 5.2%, reaching a new series’ high. The increase was most pronounced for respondents with some college education.</li>\n <li>Perceptions of credit access compared to a year ago slightly improved. In contrast, expectations for future credit availability deteriorated, with more respondents expecting it will be harder to obtain credit in the year ahead.</li>\n <li>The average perceived probability of missing a minimum debt payment over the next three months decreased to 9.6% from 9.7%. The series remains below its 2020 average of 11.4%.</li>\n <li>The median expectation regarding a year-ahead change in taxes (at current income level) declined slightly to 4.6% from 4.7%.</li>\n <li>The mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.5 percentage point to 29.9%. This is the highest reading of the series since May 2019. The increase was driven by those with an annual household income over $100,000.</li>\n <li>Perceptions about households’ current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago. In contrast, respondents were slightly more optimistic about their households’ financial situations in the year ahead.</li>\n <li>The mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.5 percentage point to 40.2%, staying below its 2020 average of 44.3%.</li>\n</ul>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Anything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAnything But Transitory: Consumers Expect Inflation In One Year To Soar To 4.8%\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-13 08:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>While central banks, tenured economists and the financial media are doingeverythingin their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (...</p>\n\n<a href=\"https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite","SPY":"标普500ETF",".SPX":"S&P 500 Index",".DJI":"道琼斯"},"source_url":"https://www.zerohedge.com/markets/anything-transitory-consumers-expect-inflation-one-year-soar-record-48","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1161134258","content_text":"While central banks, tenured economists and the financial media are doingeverythingin their propaganda power to convince Americans that the current phase of hyperinflation is merely transitory (although it now appears that even the Fed is getting some doubts writing in its semi-annual monetary policy report that inflation is \"more lasting but likely still temporary\" until proven otherwise, of course), the shocking reality on the ground is that the Fed has effectively lost control over near-term inflation expectations, as the NY Fed's own survey of consumer expectations reveals.\nAccording to the latest, June, installment of this closely watched survey, consumer inflation expectations for one year ahead, jumped by the most on record,surging by 0.8% in one month, from 4.0% in May to an all-time high for this series of 4.8% in June.\n\nAs the NY Fed details, \"the increase in the short-term measure was driven mostly by respondents who have some college education. Our measures of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) reached new series’ highs at both horizons.\"\nThere was some hope that the US won't end up as Weimar in the Fed's median inflation expectations for the three-year horizon which, unlike the 1-Year spot, were little changed from the prior month at 3.6%. Still, arguing that inflation at 3.6% in 3 years is acceptable to the Fed's formerly dual mandate (which has since grown toSocial Justice, Race, Gender Issues, Climate Change And Inequality), is at best laughable.\nHowever, in a testament to just how sticky most Americans expect inflation to be, the most valuable (and widespread) middle-class asset - housing - is expected to rise at near-record levelswith the median year-ahead home price change expectations at 6.2% in June, substantially higher than its 12-months trailing average of 3.7%,if well below the current double-digit pace of home price increase which has pushed the average home price to a new all-time high. According to the Fed, \"Median year-ahead home price growth uncertainty—or the uncertainty expressed regarding year-ahead home price growth outcomes—increased and reached a new series high.\"\n\nLooking at a breakdown of inflation expectations by commodity, the median one-year ahead expected change in the cost of college education increased to 7.0% from 6.1% in May, its highest reading since April 2019. In contrast, the median expected changes in the price of food and gasoline decreased to 7.1% and 9.2%, respectively, from 8.0% and 9.8% in May. The median expected change in the cost of medical care and rent remained unchanged at 9.4% and 9.7%; elsewhere medical costs are expected to rise 9.36%; and rent prices will rise 9.66%.\n\nSome other notable highlights from the survey: 9.59% (vs 9.69% in the prior month), expect to not be able to make minimum debt payment over the next three months; the mean perceived probability of losing one’s job in the next 12 months fell from 12.6% to 10.9%, hitting new series low which is to be expected in a country with record numbers of job openings.\nSome more details from the Fed's survey:\nLabor Market\n\nMedian one-year ahead expected earnings growth increased by 0.1 percentage point to 2.6% in June, its highest reading since the start of the pandemic (February 2020). The increase was driven by respondents who have at least some college education.\nMean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now— decreased to 30.7% from 31.9%, a new series’ low.\nThe mean perceived probability of losing one’s job in the next 12 months decreased from 12.6% to 10.9%, reaching a new series’ low. The mean probability of leaving one’s job voluntarily in the next 12 months also decreased to 18.6% from 18.7%, staying close to its trailing 12-month average of 18.1%.\nThe mean perceived probability of finding a job in the next three months (if one’s current job were lost) increased by 0.2 percentage point to 54.2%, its highest reading since February 2020. The increase was driven by those with at least some college education. The series remains substantially below its 2019 average of 59.8%.\n\nHousehold Finance\n\nThe median expected year-ahead household income growth increased to 3.0% in June from 2.8%. The increase was broad-based across age, income, and education groups.\nMedian household spending growth expectations increased by 0.2 percentage point to 5.2%, reaching a new series’ high. The increase was most pronounced for respondents with some college education.\nPerceptions of credit access compared to a year ago slightly improved. In contrast, expectations for future credit availability deteriorated, with more respondents expecting it will be harder to obtain credit in the year ahead.\nThe average perceived probability of missing a minimum debt payment over the next three months decreased to 9.6% from 9.7%. The series remains below its 2020 average of 11.4%.\nThe median expectation regarding a year-ahead change in taxes (at current income level) declined slightly to 4.6% from 4.7%.\nThe mean perceived probability that the average interest rate on saving accounts will be higher 12 months from now increased by 0.5 percentage point to 29.9%. This is the highest reading of the series since May 2019. The increase was driven by those with an annual household income over $100,000.\nPerceptions about households’ current financial situations compared to a year ago deteriorated, with more respondents reporting to be worse off compared to a year ago. In contrast, respondents were slightly more optimistic about their households’ financial situations in the year ahead.\nThe mean perceived probability that U.S. stock prices will be higher 12 months from now decreased by 0.5 percentage point to 40.2%, staying below its 2020 average of 44.3%.","news_type":1},"isVote":1,"tweetType":1,"viewCount":266,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":121210579,"gmtCreate":1624464948591,"gmtModify":1703837682883,"author":{"id":"3575074532947939","authorId":"3575074532947939","name":"Jeric87","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":3,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3575074532947939","authorIdStr":"3575074532947939"},"themes":[],"htmlText":"bankrupt country :(","listText":"bankrupt country :(","text":"bankrupt country :(","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/121210579","repostId":"1191722749","repostType":4,"repost":{"id":"1191722749","kind":"news","pubTimestamp":1624455982,"share":"https://ttm.financial/m/news/1191722749?lang=&edition=fundamental","pubTime":"2021-06-23 21:46","market":"us","language":"en","title":"The Fed In A Box, Part 1: They Cannot Raise Interest Rates","url":"https://stock-news.laohu8.com/highlight/detail?id=1191722749","media":"zerohedge","summary":"3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, mak","content":"<p><b>3 Key Takeaways</b></p>\n<ol>\n <li>The US Government has over $28 Trillion in Debt</li>\n <li>Much of the debt is short-term, making it extra sensitive to higher rates</li>\n <li>Higher Interest Rates would immediately start putting strain on the Federal Budget</li>\n</ol>\n<p><b>Introduction</b></p>\n<p>The US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.</p>\n<p>First and foremost, this took pressure off the Treasury as it refinanced the ballooning short-term debt outstanding at lower rates. However, even more relief occurred as the Federal Reserve absorbed +90% of the long term debt issued since last March. This allowed more room in the private markets to purchase the issuance of new short-term Treasury Bills. Because the Fed pays interest revenue back to the Treasury, and since interest rates on Treasury Bills are sitting at 0%, this has effectively given the Treasury a&nbsp;<b>$4.5T loan at 0% interest</b>&nbsp;in 15 months!</p>\n<p>While this sounds like a great deal, it comes with major risks and has now put the Fed in a box. This will be explained in detail over two articles. Part 1 will explain why the Fed can no longer raise interest rates, and Part 2 will show how the Fed is unable to taper and may even need to increase Treasury purchases to maintain control over the long end of the yield curve.</p>\n<p><b>$28 Trillion and Growing</b></p>\n<p>The US Government cannot stop spending money. Spending is now far in excess of what is being collected in tax revenues. The US economy continues to experience nominal increases in growth, which has increased Federal Tax receipts, but Federal Spending is growing far faster. Figure 1 below, shows this clear trend.</p>\n<p><img src=\"https://static.tigerbbs.com/8b5576e9901f1f8310629d45af16836a\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>Excess spending has to be paid for using debt. This massive excess in spending has led to proliferate borrowing by the Federal Government resulting in over $28T in total debt outstanding. See figure 2 below.</p>\n<p><img src=\"https://static.tigerbbs.com/ed345b06ec4a35726fe7d9847937cf34\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>For anyone struggling to wrap their mind around the size of $1T, please see this great&nbsp;visual. Now, multiply that by 28!</p>\n<p>For most governments, this would be unsustainable as interest rates would rise. This puts pressure on a borrower to bring down spending. The US Government has benefited from three major advantages that are not available to most governments. First, it has the exorbitant privilege of issuing the global reserve currency (for now), which creates far more demand for dollars than would otherwise be the case. The&nbsp;petro-dollar&nbsp;should have its own dedicated article, so that will be skipped in this analysis.</p>\n<p>It is important to highlight two other key facts that have allowed spending and borrowing to continue unabated. It has been able to borrow from the Social Security Trust Fund, and the Federal Reserve has absorbed a large chunk of debt issuance in recent years. Not only does this equate to $11T in interest-free loans (as all interest payments return back to the Treasury), but it has prevented the private markets from absorbing all new debt issuance keeping interest rates lower. As Figure 3 below shows, since Jan 2010, the private markets have “only” had to absorb $9T of the $14.5T issued.</p>\n<p><img src=\"https://static.tigerbbs.com/2dee6e735c0a3c1421eb321c0eae4b54\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov andhttps://fred.stlouisfed.org/</i></p>\n<p>Since Jan 2020, the numbers are even more stark. The Treasury has issued $4.5T, of which the Fed has taken on $2.6T (<i>Note: The Fed balance sheet has expanded by greater than $4T, but not all of this was Treasury Debt</i>). Looking deeper into the numbers shows the Fed had an even bigger appetite for longer-dated maturities. With Short Term rates at 0%, the Treasury can sell Treasury Bills to the private sector and still have an interest-free loan. Thus, it has been critical for the Fed to absorb almost all (~90%) the long-term debt issued by the Treasury to keep interest payments low!</p>\n<p><img src=\"https://static.tigerbbs.com/89bf299c6c054e65d3317aa72d0f686a\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><b>The Treasury has so far avoided higher interest payments</b></p>\n<p>Zooming back out, the three charts below show why the maneuvers over the last year have been so important. Take one more look at the US Debt load, this time categorized by vehicle. Non-Marketable is debt the government owes itself, Notes represent 1-10 year maturity, Bills less than 1 year, and Bonds &gt;10 years. The two charts below show both the absolute growth in debt and how the makeup of the debt has changed. Since 2008, Notes have experienced the largest growth increasing from 25% of total outstanding to 42%. Non-Marketable went the other way, shrinking from 45% to 25% as the Social Security Trust Fund is no longer a source to borrow from.</p>\n<p><img src=\"https://static.tigerbbs.com/a144f0f9250c364637205e8bd0178bc0\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><img src=\"https://static.tigerbbs.com/2c1851784731b81544c30c5338624a03\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>It is important to notice the growth in Treasury Bills above. Bills are the highest risk to the Treasury because higher interest rates will affect Bills within months, so it is important to note that in 2015 during the last rate hike cycle they accounted for only $1.4T but now make up $4.3T. This means every .25% rate hike will almost immediately add $10B to Federal spending. The chart below clearly shows the impact of the last interest rate hike cycle. The Pink line shows how Bills followed the Fed hike cycle topping out near 2.25%.</p>\n<p>If the Fed attempted to raise rates in a similar fashion it would immediately add $100B to Federal Spending on ONLY interest due for Treasury Bills. In a scenario where the Fed shrunk its balance sheet back to $1T (no more interest free loans) AND raised interest rates back to 4%, the Treasury would incur an extra $160B in interest rates for Treasury Bills and a whopping $290B on Treasury Notes! This would not factor in any new debt added over that time, which now includes an extra $.5T a year just on interest payments!</p>\n<p><img src=\"https://static.tigerbbs.com/04501c54f465fba412ffbf77b81a559f\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>The chart below shows a much clearer impact of how falling interest rates have kept debt payments relatively stable for nearly 20 years. The chart shows the average weighted interest rate and the annualized monthly interest payments. The orange line (average weighted interest rate) is moving in direct opposition to the growth in debt seen above. In the last rate tightening cycle, the chart shows just how quickly higher interest rates increased the debt burden ($150B). The Fed owns very few Treasury Bills ($320B), so those interest payments are NOT returning to the Treasury.</p>\n<p><img src=\"https://static.tigerbbs.com/c859933a1e991d3e6ba191ccb6a7609e\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p>One final chart to consider. How do these interest payments compare to tax revenue collected by the IRS? In this context, it becomes very clear how much impact the 2015 rate cycle increases had on debt payments.</p>\n<p><img src=\"https://static.tigerbbs.com/585708ace254d0b79ecddcc77c9c8ca0\" tg-width=\"1024\" tg-height=\"512\"></p>\n<p><i>Source – Treasurydirect.gov</i></p>\n<p><b>Wrapping Up</b></p>\n<p>Nothing in this article should be surprising to anyone who even closely watches the US Debt situation or follows financial markets. The charts and graphs attempted to show the trends and put hard numbers behind what most people already know anecdotally. This article does not even touch on how devastating higher interest rates would be on the housing market, corporate debt market, and consumer debt market. Instead it only focuses on the Treasury, which just so happens to be run by the old chair of the Federal Reserve (Janet Yellen).</p>\n<p>None of this math is overly complex, and all the data is freely available on the Treasury and Fed website. This begs the question, does the Fed realize interest rates cannot go up or are they only looking in the rear-view mirror and assuming that an increase to 2.25% will be similar to 2015 which was “only” derailed by COVID-19? To reiterate, the drop in interest rates gave the Treasury&nbsp;<i>relief</i>&nbsp;from the higher interest payments. Next time they might not even get halfway to 2% with the added debt burden.<b>Unfortunately, for the Fed, their box is tighter than most realize.</b>If the Fed hasn’t figured it out by now,<b>even before they fail to raise interest rates, they will be unable taper Quantitative Easing (debt monetization) much less shrink their balance sheet, without serious consequences.</b>That data will be reviewed in Part 2. Stay tuned!</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Fed In A Box, Part 1: They Cannot Raise Interest Rates</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Fed In A Box, Part 1: They Cannot Raise Interest Rates\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-23 21:46 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, making it extra sensitive to higher rates\nHigher Interest Rates would immediately start putting strain ...</p>\n\n<a href=\"https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SPY":"标普500ETF",".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.zerohedge.com/markets/fed-box-part-1-they-cannot-raise-interest-rates","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1191722749","content_text":"3 Key Takeaways\n\nThe US Government has over $28 Trillion in Debt\nMuch of the debt is short-term, making it extra sensitive to higher rates\nHigher Interest Rates would immediately start putting strain on the Federal Budget\n\nIntroduction\nThe US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.\nFirst and foremost, this took pressure off the Treasury as it refinanced the ballooning short-term debt outstanding at lower rates. However, even more relief occurred as the Federal Reserve absorbed +90% of the long term debt issued since last March. This allowed more room in the private markets to purchase the issuance of new short-term Treasury Bills. Because the Fed pays interest revenue back to the Treasury, and since interest rates on Treasury Bills are sitting at 0%, this has effectively given the Treasury a $4.5T loan at 0% interest in 15 months!\nWhile this sounds like a great deal, it comes with major risks and has now put the Fed in a box. This will be explained in detail over two articles. Part 1 will explain why the Fed can no longer raise interest rates, and Part 2 will show how the Fed is unable to taper and may even need to increase Treasury purchases to maintain control over the long end of the yield curve.\n$28 Trillion and Growing\nThe US Government cannot stop spending money. Spending is now far in excess of what is being collected in tax revenues. The US economy continues to experience nominal increases in growth, which has increased Federal Tax receipts, but Federal Spending is growing far faster. Figure 1 below, shows this clear trend.\n\nSource – Treasurydirect.gov\nExcess spending has to be paid for using debt. This massive excess in spending has led to proliferate borrowing by the Federal Government resulting in over $28T in total debt outstanding. See figure 2 below.\n\nSource – Treasurydirect.gov\nFor anyone struggling to wrap their mind around the size of $1T, please see this great visual. Now, multiply that by 28!\nFor most governments, this would be unsustainable as interest rates would rise. This puts pressure on a borrower to bring down spending. The US Government has benefited from three major advantages that are not available to most governments. First, it has the exorbitant privilege of issuing the global reserve currency (for now), which creates far more demand for dollars than would otherwise be the case. The petro-dollar should have its own dedicated article, so that will be skipped in this analysis.\nIt is important to highlight two other key facts that have allowed spending and borrowing to continue unabated. It has been able to borrow from the Social Security Trust Fund, and the Federal Reserve has absorbed a large chunk of debt issuance in recent years. Not only does this equate to $11T in interest-free loans (as all interest payments return back to the Treasury), but it has prevented the private markets from absorbing all new debt issuance keeping interest rates lower. As Figure 3 below shows, since Jan 2010, the private markets have “only” had to absorb $9T of the $14.5T issued.\n\nSource – Treasurydirect.gov andhttps://fred.stlouisfed.org/\nSince Jan 2020, the numbers are even more stark. The Treasury has issued $4.5T, of which the Fed has taken on $2.6T (Note: The Fed balance sheet has expanded by greater than $4T, but not all of this was Treasury Debt). Looking deeper into the numbers shows the Fed had an even bigger appetite for longer-dated maturities. With Short Term rates at 0%, the Treasury can sell Treasury Bills to the private sector and still have an interest-free loan. Thus, it has been critical for the Fed to absorb almost all (~90%) the long-term debt issued by the Treasury to keep interest payments low!\n\nSource – Treasurydirect.gov\nThe Treasury has so far avoided higher interest payments\nZooming back out, the three charts below show why the maneuvers over the last year have been so important. Take one more look at the US Debt load, this time categorized by vehicle. Non-Marketable is debt the government owes itself, Notes represent 1-10 year maturity, Bills less than 1 year, and Bonds >10 years. The two charts below show both the absolute growth in debt and how the makeup of the debt has changed. Since 2008, Notes have experienced the largest growth increasing from 25% of total outstanding to 42%. Non-Marketable went the other way, shrinking from 45% to 25% as the Social Security Trust Fund is no longer a source to borrow from.\n\nSource – Treasurydirect.gov\n\nSource – Treasurydirect.gov\nIt is important to notice the growth in Treasury Bills above. Bills are the highest risk to the Treasury because higher interest rates will affect Bills within months, so it is important to note that in 2015 during the last rate hike cycle they accounted for only $1.4T but now make up $4.3T. This means every .25% rate hike will almost immediately add $10B to Federal spending. The chart below clearly shows the impact of the last interest rate hike cycle. The Pink line shows how Bills followed the Fed hike cycle topping out near 2.25%.\nIf the Fed attempted to raise rates in a similar fashion it would immediately add $100B to Federal Spending on ONLY interest due for Treasury Bills. In a scenario where the Fed shrunk its balance sheet back to $1T (no more interest free loans) AND raised interest rates back to 4%, the Treasury would incur an extra $160B in interest rates for Treasury Bills and a whopping $290B on Treasury Notes! This would not factor in any new debt added over that time, which now includes an extra $.5T a year just on interest payments!\n\nSource – Treasurydirect.gov\nThe chart below shows a much clearer impact of how falling interest rates have kept debt payments relatively stable for nearly 20 years. The chart shows the average weighted interest rate and the annualized monthly interest payments. The orange line (average weighted interest rate) is moving in direct opposition to the growth in debt seen above. In the last rate tightening cycle, the chart shows just how quickly higher interest rates increased the debt burden ($150B). The Fed owns very few Treasury Bills ($320B), so those interest payments are NOT returning to the Treasury.\n\nSource – Treasurydirect.gov\nOne final chart to consider. How do these interest payments compare to tax revenue collected by the IRS? In this context, it becomes very clear how much impact the 2015 rate cycle increases had on debt payments.\n\nSource – Treasurydirect.gov\nWrapping Up\nNothing in this article should be surprising to anyone who even closely watches the US Debt situation or follows financial markets. The charts and graphs attempted to show the trends and put hard numbers behind what most people already know anecdotally. This article does not even touch on how devastating higher interest rates would be on the housing market, corporate debt market, and consumer debt market. Instead it only focuses on the Treasury, which just so happens to be run by the old chair of the Federal Reserve (Janet Yellen).\nNone of this math is overly complex, and all the data is freely available on the Treasury and Fed website. This begs the question, does the Fed realize interest rates cannot go up or are they only looking in the rear-view mirror and assuming that an increase to 2.25% will be similar to 2015 which was “only” derailed by COVID-19? To reiterate, the drop in interest rates gave the Treasury relief from the higher interest payments. Next time they might not even get halfway to 2% with the added debt burden.Unfortunately, for the Fed, their box is tighter than most realize.If the Fed hasn’t figured it out by now,even before they fail to raise interest rates, they will be unable taper Quantitative Easing (debt monetization) much less shrink their balance sheet, without serious consequences.That data will be reviewed in Part 2. Stay tuned!","news_type":1},"isVote":1,"tweetType":1,"viewCount":387,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}