Our neighbors to the north have appropriated the dubious claim of “first country to regulate fake currencies,” with hopes that others will follow their frozen lead when adopting their own bit-loony money launder laws. Assign responsibility accordingly when something inevitably goes wrong. Read more »
Nostalgia can be a surprisingly powerful force in marketing financial products, and without knowing much about it I have high hopes for this new Canadian stock exchange? It’s like a regular stock exchange (in Canada), only they won’t allow high-frequency trading. I mean, they will allow it, but not the bad kind:
Aequitas plans to challenge “certain predatory high frequency trading strategies which have impacted the quality of existing equity markets,” Greg Mills, chairman of Aequitas and co-head, global equities at Royal Bank’s asset management unit, said in a statement. “Marketplaces in Canada and around the globe are increasingly out of sync with their traditional users as they attract and cater to volume and revenue-generating trading over traditional investors.”
You can read their position paper here if that’s your thing. It seems very worthwhile and Canadian, with an interesting mix of old-timey things (market makers would have performance obligations for their securities of responsibility) and concessions to current high-speed trading realities, but with a general emphasis on being a market for Investors and Issuers as opposed to Speculative Jerks.
I feel like that will go well? Read more »
So here’s a story about a Canadian asset manager and I don’t know what to do with it so I’m pretty much just going to tell you the story, and at the end there’ll be a quiz, and the choices on the quiz will be like:
- Is there something a little weird about this company? or
- Is this just, like, how things are done in Canada? or
I don’t know the answer but maybe you do? Mostly I just love the story so you ought to hear it and then you can decide.
The company is called One Financial Corp. and it markets mutual funds in the “All-Weather Profit Family.” These are advertised as “Canada’s first and only family of long/short mutual funds and wrap portfolios,” designed to “bring benefits of hedge funds to the masses” by being long-short and trading derivatives and stuff.1
One thing to know about One Financial is that it fired 70% of its workforce over the weekend and Jeffrey O’Brien, the CEO and founder, “said he was threatened” by some of them. Also he’s looking to hire some salespeople who don’t suck like the old ones did.2 Also there’s some debate as to whether those fired people were fired (a) last Friday or (b) on Monday when they showed up and the doors were locked.3
All bad signs! But that’s not the story, that’s just like some stuff that happened. The amazing story is that, in parallel with firing all its staff, this company is doing an IP’O, which is like an IPO only the P’ stands for “private” rather than “public,” because this is an initial private offering, and it is a pile of amazing. To me. Maybe not to you? Maybe you see this sort of stuff all the time?
Here are some things I enjoyed about One Financial’s initial private offering: Read more »
A new thesis from a Columbia professor says our banking system would be way better off if we had started off as a French colony. Or if we weren’t so populist. Or if we hadn’t gotten so peeved over taxes 238 years ago and just stuck with the British Empire for a little longer. Or something. Read more »
If you’re an activist investor your job is to (1) think of an idea for how to make a company’s stock go up, (2) buy stock in the company, (3) convince them to do your idea, and (4) sell high. Step 3 tends to involve lots of attention-seeking – it’s easier to wear a company down into doing your idea if they’re constantly hearing about it from other shareholders and reporters and stuff – but steps 1 and 2, importantly, don’t.1 If you tell everyone about your great idea for Apple to issue GO-UPS,2 then they’ll all realize that Apple will certainly do it and unlock tens of billions of dollars of value, so they’ll bid up the stock before you can buy it and you’ll lose the opportunity to benefit from all those gains. That may be a bad example but just work with me here.
There’s another way of putting that, which is: if you secretly conceive of an idea to make Apple a better company, and then secretly buy up a bunch of Apple stock, and then announce to the world “surprise! I have 12% of Apple’s stock, and a brilliant idea that starts with a thematically appropriate lowercase i!,” and the stock goes up, and you make a lot of money – isn’t that unfair? You got to buy stock at the low, pre-publication-of-your-idea price; the people who sold to you were bamboozled into selling out too low because they didn’t know about your great idea. It almost “smacks of insider trading.”
Or something. I may not be doing this theory justice because I think it’s silly: that great idea is your idea; why shouldn’t you be able to make money off of it? (And why should anyone else?) The money is your incentive to come up with the idea in the first place, and do the hard ego-stroking work of pitching it to CNBC and the target company; if you had to share it with free-riders why would you take on the responsibility? We talked about this a little last year when there were vague rumors that the SEC was buying into it, and that they might require investors to disclose 5% stakes within 1 day of acquiring them (instead of the current 10 days), and include synthetic share ownership in computing the 5%, in order to make it harder for activists to secretly accumulate shares. I have not heard much about that proposal since, though I hesitate to assign any causality.
Today is not a great day for the American government, people, economy and reputation. But that doesn’t mean a good dose of schadenfreude can’t lift the gloom some. Read more »
From High Atop of Victoria Peak, ChiFedPres Can Look West and See The Future. And The Future is Meh.By Jon Shazar
Well, this is not especially encouraging: Read more »