Category: Money

Oracle of Omaha

Right Answer ~ Wrong Question

If you’re wondering what ultra-low or even negative interest rates will do to the financial markets, you are not alone. Warren Buffett is wondering too.

When I asked Warren Buffett specifically what are the actual implications of negative rates, he went positively Yoda on me. “I would say that’s the most important question in the world,” said the Oracle of Omaha. “And I don’t know the answer. Now, if we knew the answer, it wouldn’t be the most important question.”

Late-Cycle Behavior

Virgin Galactic founder Richard Branson.

Investors’ new mantra: Apple AAPL, +1.71%  and Amazon AMZN, +1.25% are for boomers — we buy Tesla TSLA, +7.29% and Virgin Galactic SPCE, +11.58%. Apple and Amazon are pedestrian stocks of yesterday; they do nothing interesting. Vacationing in space on a Virgin Galactic flight is around the corner. Soon we will be mining on Mars. When we return from Mars to the lowly planet Earth to visit our aging parents, we will be getting around in flying autonomous electric taxis from Tesla and staying in homes powered by Tesla solar roofs and batteries.

Public service announcement: If you’re an investing novice, you are setting yourself up for a painful lesson

Both Virgin Galactic and Tesla provide short-term trading opportunities for sophisticated investors both from the long side and the short side. Our system gave a signal to short-sell Virgin Galactic for a very short-term trade near the highs.

However, there was no point in publishing that signal because the shares were not readily available to short. The plan is to trade only those setups where there is reasonable risk control. It is also important to pay attention to Arora’s 14th Law: “To be successful at investing and trading, become a master of position sizing.”

Nigam Arora  Nigam@TheAroraReport.com

Fintech – Financial Technology

Fintech refers to the integration of technology into offerings by financial services companies in order to improve their use and delivery to consumers. It primarily works by unbundling offerings by such firms and creating new markets for them.

Fintech startups received $17.4 billion in funding in 2016 and were on pace to surpass that sum as of late 2017, according to CB Insights, which counted 26 fintech unicorns globally valued at $83.8 billion. The same firm reported that there were 39 VC-backed fintech unicorns worth $147.37 billion by the end of 2018.

V ~ Visa Inc.

Cash to plastic conversion remains strong, with approximately 0.65-0.9% annual rate supporting the secular growth story. Visa may have a near-term pricing advantage against its chief rival, Mastercard. More buyback authorization may be on the horizon.

Visa, Inc. (V) is a network that facilitates electronic fund transfers via branded credit, debit, and gift cards. On an annual basis, it processes more than 110 billion transactions, with the total payments volume exceeding $8 trillion. Visa has one of the world’s best-recognized brands, operating across nearly all countries around the world and commanding more than 60% of the global payments volume share together with its main rival, Mastercard (MA). In 2018, the company generated $20.6 billion in revenue, with its current market cap approaching $400 billion.

BIAWX – Brown Advisory Sustainable Growth Fund Investor Shares ~ Qty 105.55

Top 10 Holdings As of 08/31/2019

CompanyYTD Return
(as of 09/25/2019)
% of Assets
Microsoft Corp+37.21%5.06%
American Tower Corp+40.36%4.96%
Danaher Corp+39.59%4.70%
Visa Inc Class A+32.85%4.50%
Intuit Inc+35.35%4.46%
Amazon.com Inc+17.73%4.03%
Thermo Fisher Scientific Inc+26.16%3.84%
Verisk Analytics Inc+44.72%3.81%
Alphabet Inc A+19.23%3.67%
UnitedHealth Group Inc-10.82%3.52%

PREFX – T. Rowe Price Tax-Efficient Equity ~ Qty 100.61

Top 10 Holdings As of 06/30/2019

CompanyYTD Return
(as of 09/25/2019)
% of Assets
Amazon.com Inc+17.73%3.09%
Visa Inc Class A+32.85%2.51%
Alphabet Inc Class C+20.37%2.51%
Facebook Inc A+39.45%2.40%
Mastercard Inc A+44.58%2.17%
Microsoft Corp+37.21%2.08%
UnitedHealth Group Inc-10.82%1.33%
Boeing Co+19.75%1.09%
The Home Depot Inc+32.76%1.03%
NVIDIA Corp+33.51%1.03%

BIAGX – Brown Advisory Growth Equity Fund ~ Qty 67.99

Top 10 Holdings As of 08/31/2019

CompanyYTD Return
(as of 09/25/2019)
% of Assets
Microsoft Corp+37.21%4.52%
Visa Inc Class A+32.85%4.49%
Zoetis Inc Class A+45.87%4.46%
SBA Communications Corp+51.96%4.45%
Amazon.com Inc+17.73%4.03%
Roper Technologies Inc+33.65%3.76%
PayPal Holdings Inc+23.84%3.75%
Intuit Inc+35.35%3.68%
Thermo Fisher Scientific Inc+26.16%3.66%
Sherwin-Williams Co+38.40%3.45%

Arbor Realty Trust, Inc. (ABR) ~ Qty 100

Arbor Realty Trust, Inc.. Arbor Realty Trust, Inc. is a real estate investment trust. The Company invests in a portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. Its segments include Structured Business and Agency Business. In addition, the Company may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities.

It focuses on investment types, such as Bridge Financing, Mezzanine Financing, Junior Participation Financing and Preferred Equity Investments. It offers bridge financing products to borrowers, typically seeking short-term capital to use in an acquisition of property. It offers mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction.