Markets Reverie

In late March, a completely out of left field event occurred, Archegos, a large family-run hedge fund collapsed. To be more precise, Archegos began liquidating large positions in blue-chip companies that it had invested in like Viacom CBS, which Archegos owned $20bn worth of shares or an astonishing 30% of the company’s total value. The founder of Archegos, Bill Hwang saw his nearly $20bn fortune go up in smoke, due to this.  What started initially as a fund mainly centered around tech stocks, Bill Hwang started to move towards a more eclectic array of companies like media conglomerates ViacomCBS and Discovery, Inc which became huge parts of Archegos’ portfolio and Chinese stocks like GSX, Techedu, Baidu, Iqiyi, and Vipshop.   It is required by US law to prevent individual investors from buying securities with more than 50% of the money borrowed on margin. No such rule applies for hedge funds and family offices. As a result of this, Hwang was allowed to exercise as much r...

  I first heard about NFTs when watching a YouTube video by on of my favorite creators JxmyHighroller, where he discussed the company called Top Shot. Much akin to basketball cards of the past, Top Shot sells cards, but instead of individual players, they sell NBA highlights. Essentially, Top Shot sells highlights, either as individual moments or packs. Each highlight comes in a set and some sets come in a circulation count with a counter of how many sets are in motion. Some sets are limited edition with a fixed amount minted. All the highlights in a particular set have a serial number, the serial number represents the sequential order in which something was minted. The earlier something is minted, usually the rarer it is, thus the more expensive it is. It should also be noted that there is a tier system for the sets. The whole concept of Top Shot is still quite disorientating to me. What is the difference between a highlight from Top Shot and just the same highlight that can most ...

Cathie Wood of Ark Investment Management has emerged as one of the most prominent figures in the asset management space. In 2020, her $16.4 billion Ark Innovation ETF has returned 152% in 2020. Three of her other ETFs have more than doubled. However, the superb performances of ETFs like ARKK (Ark Innovation ETF), is not the sole reason for why she has received some much adulation and support as of late. I think breaking down why Cathie Wood has so much support is important because it digs into the deeper issue of the extreme alienation that most retail investors feel with Wall-Street as a whole, especially incidents like GameStop’s short squeeze. Before breaking down why Wood is as loved as she is, it is pertinent to talk not only about her history but the history of Ark. Prior to founding Ark in 2014, Wood worked at Jennison during the 1980s. At Jennison, she proved herself as a capable researcher and strongly distinguished herself with one of her most characteristic traits, her chari...

  Cathie Wood’s Ark Investment Management had purchased 1.5 million in additional stock of Palantir during the mid-February dip. Cathie Wood said at the time, “If you’re short-term in your focus, you probably don’t want to invest too much time in Palantir, and that is music to our ears.”

  Recently, Palantir has been getting a lot of eyes on it. This has been for both good and bad reasons. As a company that mainly handled government clients for more than a decade, they have aided quite a few controversial bodies, such as ICE- U.S. Immigration and Customs Enforcement, the CIA- Central Intelligence Agency, and the NSA- National Security Agency. However, tech giants like Amazon and IBM have recognized Palantir’s abilities and have partnered with them to improve and expand on their AWS and Watson services respectively. Now before talking about Palantir’s recent financial performance, it’s important to talk about it’s past, so that we can better map out its future. Palantir was founded in 2003 by Peter Thiel, Nathan Gettings, Alex Karp, Joe Lonsdale & Stephen Cohen. The company’s main function is to make software that integrates large volumes of data into a central platform so that it can be analyzed. For a majority of its life, Palantir served the United States Int...

As I write this, GameStop's pre-market stock price is around $140. It seems baffling that a brick-and-mortar company in steep decline would receive such strong support in the stock market. Even when you look at their financial statements, it is clear that they have been operating with a net loss for years. So, why is this happening? Simply put, GameStop's stock is in a short squeeze. It should be known that all short positions are publicly available information, so soon enough r/wallstreetbets found out about the GameStop situation in around the Spring of 2020. As a community they believed the stock was over shorted, and thus putting their money were their mouth is bought the stock. One user of note is u/deepfuckingvalue, who invested $53,000 in the Spring of 2020. They have now seen astronomical gains and as of 26th January 2021, have made around $23,000,000. During Spring 2020, GameStop was still a murmur that was mostly contained in the subreddit, but by November 2020, GameS...

  This is going to be my last multiples valuation for now. The reason being is that I fell like my level of analysis when using multiples as a means of valuation isn't satisfactory. However, I will still do my best in giving a sufficient analysis of the Unilever stock.  Let's start by looking at one of the most important ratios, the P/E ratio. As we can garner from the table Unilever's P/E ratio is moderately smaller in comparison to it's competitors. As it has a P/E ratio of 23.5x in comparison to it's competitors' average of 29.6x and its' median of 26.4x. However, this seems to be the case mostly because of how much Nestle stands out as an outlier, with a P/E ratio of 42.4x, whereas the rest of the firms used had values ranging from the mid to late 20.0x range. I chose Nestle as a comparable company to Unilever because they both compete in the food and beverages industry to a certain extent with brands like Knorr (Unilever) Vs Maggi (Nestle) and Breyers (...

  This time around I decided to change industries completely from big-tech to food and beverages. I was eating a bag of Cheetos while thinking of which company I should do my next valuation for and then it came to me. Let's do PepsiCo.  For the comparable companies, I decided to use Coca-Cola, Dr-Pepper, Monster Energy, Nestle, and National Beverage Corp. ( mainly known for manufacturing La Croix). It's obvious that Pepsi's biggest competitor in the soft drink market is Coca--Cola, so it makes sense that Coke would be my first choice. Dr-Pepper is also a rather prominent soft drink brand in the world, so I chose it as another competitor to compare Pepsi with. Monster Energy, even though it is known for making energy drinks, is still big in the beverages industry, thus a perfect choice to chose as a competitor to compare Pepsi with. On the other hand, Nestle is a much more balanced competitor with Pepsi, as it competes with Pepsi in terms of both food and beverages. Whether ...