Caveat Emptor

Thoughts about Archegos and the Prime brokerage Industry As the earnings season for US listed companies approaches, news of the fallout from Archegos (Family office hedge fund) dominated the headlines concurrently. Even as US banks like JPM and BAML are reporting record earnings, other banks such as Nomura and Credit Suisse took significant hits and losses from their Prime brokerage businesses. Matt Levine from Bloomberg and Marc Rubinstein from Net Interest provided exceptional insight to the opaque internal businesses of investment banks and I decided to make some integrated notes based on their unique insights and my personal understanding of the investment banking and prime brokerage businesses. What constitutes Prime brokerage 1) Agency business - trade execution and fees driven business. Execute buy and sell transactions for clients under street name omnibus accounts. Execute block trades and using algos to split trades into different shapes to conceal institutional buying / s

Thoughts about Emerging Mega-trends and business models The month of March is greeted by unprecedented volatility among the technology sector. As vaccines are distributed worldwide, investors / speculators are pricing in recovery of the traditional economy. There were concerns about heightened valuations of the gloves stocks, tech stocks and potential regulatory crackdown on the Chinese and US technology sector. This contributed to a selloff among the <Pandemic stocks>  as some investors rotate to cyclicals, quantitatively cheap value stocks and airline / hospitality / banking stocks.   As I have made an active decision to invest in stronger businesses and avoid market timing especially in cyclicals outside my area of competence, I capitalized on the technology stocks selloff and allocated capital among the stronger business models. I am still uncomfortable with the widespread speculative behaviour in the reddit WSB space, crypto space, money losing companies as well as some of t

Li Ka-shing, Hong Kong's richest man, wrote the "Sunset Ballad". He is now 92 years old. One of the richest men in the world, he was ranked the 30th richest person in the world as of June 2019 with an estimated net wealth of US$29.4 billion. Hong Kong business magnate, investor, and philanthropist, he is one of Asia’s wealthiest and most influential businessman, famous for being a workaholic. He retired only in 2018 at the age of 90 years old. After retirement, he began to enjoy life. And he wrote this "Sunset Ballard"   1、天定人生是个零，过方过圆都不行。从零开始走向零，顺其自然心态平。 We are born with nothing, no more and no less, and finally to return to nothing. Be as natural, normal and at ease as possible.  2,、晚年莫想富有余，来者糊涂走者迷。生前死后啥属你？应该醒悟莫骗己。 Don’t aspire to acquire surplus wealth at sunset years. Those who have such intention are rather confused or crazy. Just consider what belongs to you before and after death. One has to wake up and stop fooling ourselves.  3、能知足，便常乐，晚年过的要快