wall street | Wall Street Financier: Notes from High Altitude©

Cathie’s blog is fun

Max Cantor — Thu, 25 Aug 2022 20:17:10 +0000

Over here at Wall Street Financier: Notes from High Altitude we follow Cathie (Katherine) Wood, the world superstar of of the investment world ARKK Investment. ARKK Invest is a vehicle tailored towards stocks with secular growth trends. Kathy (or Cathie if you prefer) even has a monthly Bitcoin newsletter. I read her newsletter and listen to her interviews.

The latest post there: Is It Possible That Your Body Will Heal By Creating And Manufacturing Its Own Medicine? I invite you to read it.

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The fat bankers bonuses

Max Cantor — Sun, 30 Jan 2022 01:07:50 +0000

2021 was the year with the biggest bankers bonuses in history.

From the Wall Street Journal: “At J.P. Morgan Chase & Co., compensation for investment bankers and traders rose 13%, about three times as much as the extra revenue they produced. J.P. Morgan is paying CEO Dimon $34.5 MM, $3 MM more than he made in the previous two years. The J.P. Morgan board also awarded him a $50 MM special bonus earlier in 2021.”
WSJ

“JPMorgan also gave its younger staff a raise this week for the second time in seven months, lifting base salaries to match rivals. First-year bankers will now make $110,000 a year, up from $85,000 at the start of 2021, according to a person familiar with the matter. Associates, the next rung up the ladder and typically three years into their careers, got a $25,000 raise to $175,000 this week.”
WSJ

“Compensation as a percentage of revenue at the five biggest companies ticked up to 35% from 33%, where it had been for two years. That means their bankers, traders, engineers and portfolio managers took home an extra $9 billion that might otherwise have gone back to shareholders or been invested in new loans or technology upgrades. Jefferies Financial Group LLC gave its most-junior employees a choice of gifts including a Peloton bike.”
WSJ

Meanwhile on the crypto news… NY City Mayor Eric Adams converted his first paycheck into cryptocurrency ($BTC and ETH)

Ketamine for depression ?

Ketamine

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Are SPACs risk-free for the early investors ?

Max Cantor — Sat, 16 Jan 2021 06:19:02 +0000

SPACS have taken the dealmaking business by storm in 2020. “Hedge funds give the SPAC money for up to two years while it looks for a merger target. In return, they get a unique right to withdraw their investment before a deal goes through that minimizes any loss on the…

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Main Street Lending Program

Max Cantor — Fri, 16 Oct 2020 17:11:19 +0000

WSJ recently brought up an article on Fed’s Main Street Lending Program, glaring a forerunner of the program, City-National Bank of Florida.

“The Main Street Lending Program works like this: businesses with revenues of up to $5 Bn or fewer than 15,000 employees can apply for loans of at least $250,000 from participating banks. Banks can then, typically, sell 95% of the loan to the Fed. Businesses have five years to repay the loans, and they can defer principal payments for the first two years.”
The Wall Street Journal, Orla McCaffrey

There’s no forgiveness with this loans, but the rates are competitive: around 3.2% nowadays.

In my judgement, this is a great program. Why aren’t mare businesses getting into it ? It seems to be there aren’t enough lenders willing to tap into it (fewer than 100 banks have used it as of the end of Sept.)

The example cited is City National Bank of Florida and their customer, Mango’s Tropical Cafe. who got a $10 MM loan.

“Before March 16, Mango’s was bringing in about $50 MM annually, more than enough to employ around 450 people and to cover payments on mortgages of almost $50 MM.”
Orla McCaffrey, WSJ

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Direct Listings on NYSE get a Green Light

Max Cantor — Sun, 30 Aug 2020 20:36:44 +0000

This past week two significant developments I would like to bring to the attention of you finance guys.

One is NYSE getting the green light to direct listings, which is what Palantir Technologies will use as early as next month.

“The Council of Institutional Investors, a group of pension funds and other big money managers, asked the SEC to reject the plan…
Unlike an IPO in a direct listing there is no bank acting as a ‘stabilization agent’ to prop up the stock if it falls sharply after its debut…
Nasdaq has a similar proposal on the table.”
The Wall Street Journal, Aug. 26, 2020

Another one is the SEC expanding its definition of accredited investors.

“Previously, to qualify as accredited investors, individuals need to have a net worth of at least $1m excluding the value of their primary residence, or an annual income of at least $200k for the last two years [300k if married and filing jointly] . Now, many more people may be able to make those investments, if they can prove that they are knowledgeable enough, including employees of investments firms or governmental bodies.
SEC Commissioner Hester Pierce tweeted Wednesday: “Americans shouldn’t have to ask the SEC for permission to invest, but today’s accredited investor rule at least offers people a path to ask permission based on their education, rather than simply telling them ‘no, unless you’re rich.’”
WSJ, Aug. 26, 2020

“The Commission indicated that it preliminary expected that the initial Commission order accompanying the final rule would include the following certifications or designations administered by the Financial Industry Regulatory Authority, Inc. (FINRA): the Licensed General Securities Representative (Series 7), Licensed Investment 14 Adviser Representative (Series 65), and Licensed Private Securities Offerings Representative (Series 82).”

Change, please ?

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SPACs 101

Max Cantor — Sat, 22 Aug 2020 17:29:19 +0000

An easy primer for you finance literati was written here @Tech Crunch , and that includes answering the MOST asked question about them: how much do Spacs sponsors make ?

“The rough rule of thumb is 2% of the SPAC value, plus $2 million.”

and the 2nd most asked question, why is the unit price of SPACs $10.

The Gold market basics were nicely outlined in a WSJ article recently (Joe Wallace, Aug. 17th, 2020). Describing the gold market doesn’t get any clearer than that.

Excerpts:

“How does the physical market work ?
Deals to buy, sell and lend gold in London are struck privately, rather than on exchange. To reduce the amount of metal that has to be shunted from vault to vault, five banks act as clearing house, balancing out each other’s sales and purchases. Some of them provide vaults, offering clients a safe place to stash gold. The Bank of England guards more than 400,000 bars beneath the narrow streets of the City of London, largely on behalf of the U.K. government and other central banks, a hoard second only to Feds in NY. Princes are quoted by troy ounce (14.6 troy ounces to pound instead of the standard 16) of pure gold, and bullion trades in batches of 400-ounce bars. London prices are fixed in twice-daily auctions and act as a benchmark throughout the physical market. When a watchmaker buys gold from a refiner, it usually does so at a premium to the London price…”
WSJ

That Old Snikeroo Buffett selling airlines shares and buying gold…he knows what he’s doing.

Personality Tests

Max Cantor — Thu, 28 Jul 2016 23:25:00 +0000

Personality tests, whether for employment (pilots, analysts) have become more and more widespread.

Check out This IQTest or Mensa tests.

IPIP Big-Five Factor Markers. “This test uses the Big-Five Factor Markers from the International Personality Item Pool, developed by Goldberg (1992).”

Disclaimer: Your use of this tool should be for educational or entertainment purposes only. The results of this test are not psychological or psychiatric advice of any kind and come with no guarantee of accuracy or fitness for a particular purpose. Responses to this test will be recorded anonymously, without any personality identifying information, and may be used for research or otherwise distributed in accordance with this privacy policy.

According to Quartz (via Reuters) an Sachs is using the The SHL Occupational Personality Questionnaire (OPQ) which measures “32 personality characteristics relevant to performance”, a whole lot more than MBTI.

Wanna go for your own test. Try out the Psych Central MBTI (link ).

I think that more important than MBTI classification is whether you are a person with an internal or an external locus of control. You can test yourself, free of charge

From PsychTests: “Locus Of Control & Attributional Style Test (click on this link)

Locus of control refers to a person’s perceived control over their own behavior.
Do you control your destiny or are you controlled by it? This test assesses your locus of control orientation and your attribution style.

PsychTests site has a whole array of self administered tests, including:

Emotional Intelligence Test
Culture Fair IQ Test
Verbal-Linguistic Intelligence Test
Visual-Spatial Intelligence Test
Classical IQ Test
Analytical Reasoning Test
Logic IQ Test
Multiple Intelligence & Learning Style Test