December 20, 2017

Perspective

Visual Capitalist – Visualizing the Money Made Per Second by Top Companies – Jeff Desjardins 12/18

NYT – A Bitcoin Hedge Fund’s Return: 25,004% (That Wasn’t a Typo) – Nathaniel Popper 12/19

  • “There are hedge funds with blockbuster returns. Then there is the Pantera Bitcoin Fund.”
  • “The fund — one of the first in the world to dedicate itself to virtual currencies — released its returns in a letter sent to investors on Tuesday. The figure for the life of the fund, which was set up in 2013, is eye popping: 25,004%.”
  • “A significant portion of the gains have come this year, thanks to the skyrocketing price of an individual Bitcoin, which hit $19,000 on Monday. (The fund’s 25,004% figure was actually counted back when Bitcoin was at $15,500, a week ago.)”
  • “Currently, the average price of one Bitcoin is about $18,007, according to Blockchain.info, a news and data site.”
  • “For comparison, the top performing hedge fund in the world last year returned 148%, according to Preqin, a hedge fund tracker. Since 2013, the Pantera Bitcoin Fund’s compound annual returns have been around 250%.”
  • “The Pantera Bitcoin Fund did not have to do much to get those returns. It just bought Bitcoins and held them as the price went up. Its performance is a reminder of the unprecedented gains that Bitcoin has experienced, with some analysts arguing that Bitcoin’s moves have been even greater than the movements of Dutch tulip bulb prices back in the 1600s.”

Worthy Insights / Opinion Pieces / Advice

WSJ – The Flawed Bull Case for Bitcoin – Aaron Back 12/19

  • “The bitcoin network can only handle a limited number of transactions per second, and is being overwhelmed by traffic.”

Real Estate

China’s HNA Group Seeking Sale of $6 Billion in Overseas Property – Wayne Ma and Julie Steinberg 12/18

  • “HNA, an airlines-to-hotels conglomerate that until a few months ago was aggressively scooping up assets around the world, is now trying to raise cash to pay off debt that helped fund over $40 billion worth of acquisitions since 2015. In recent weeks, the company’s liquidity has come under pressure and some of its borrowing costs have climbed.”
  • “HNA has earmarked roughly $6 billion worth of properties for sale, including prime office towers in Midtown Manhattan, London’s Canary Wharf and San Francisco’s Mission District, as well as resorts in French Polynesia and buildings in Australia, according to a person close to the matter.”
  • “The company owns about $14 billion worth of commercial real estate globally, according to Real Capital Analytics, and the assets being considered for sale make up a large portion of its overseas portfolio. HNA paid hefty sums for several of the properties as recently as 2016, such as the City Center, which also houses retail stores Marshalls and Brooks Brothers, as well as plots of land that Hong Kong’s old airport used to sit on.”
  • “HNA, which has assets of more than $140 billion and is based in the Chinese tropical island of Hainan, over the past two years has announced more than 80 deals, scooping up large stakes in Deutsche Bank AG, the Hilton hotel chain, and scores of other businesses. The group previously estimated it has over $100 billion in debt, about a quarter of which is coming due within a year.”
  • “HNA is looking to sell around 20 commercial properties, according to a person familiar with the matter. Some, such as an office building on Mission Street in San Francisco and 850 Third Avenue in New York City were bought as recently as 2016, according to Dealogic. Others, including a building at 1180 Avenue of the Americas in Manhattan that HNA earlier this year said it wanted to sell, have been in its portfolio for years.”
  • “Some market participants believe HNA overpaid for some of the assets, which could make it difficult to find buyers for the prices it wants. For example, HNA last year agreed to pay $3.5 billion for the plots of land at what used to be Hong Kong’s airport. One of the parcels was purchased at an 88% premium over a previous valuation.”
  • “The sale plans come as HNA’s borrowing costs have risen sharply and investors have grown concerned about the company’s ability to pay off tens of billions in debt coming due next year. While HNA Group is privately owned, the company has around a dozen listed subsidiaries and other units that have issued bonds. Shares and bonds of several HNA units have plunged in recent months, hampering their ability to sell new securities to raise funds.”
  • “Last week, the yield on a short-term HNA-related bond briefly surged above 20%, a worrying sign for the company and its investors.”

Finance

FT – ‘Retail apocalypse’ trade prompts contrarian bets – Miles Johnson 12/18

Agriculture

WSJ – The Worlds’ Top Banana Is Doomed and Nobody Can Find a Replacement – Lucy Craymer 12/18

  • The headline is a little over the top; however, the Cavendish banana is under threat from a fungus and finding a replacement or beefing up the Cavendish is no easy task.

Other Interesting Links

WP – This angry inventor has a special gift for package thieves: Revenge – Cleve R. Wootson Jr. 12/19

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