SAN FRANCISCO, CALIFORNIA - OCTOBER 02: (L-R) SC30 Inc. President Bryant Barr and SC30 Inc. Founder ... [+] Stephen Curry speak onstage during TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 02, 2019 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)

Our earning potential is a very short window, but how can you leverage that into opportunities that set you up for post-career? Stephen Curry told a TechCrunch Disrupt panel session on his entry into the investment world earlier this month. Its a question many athletes grapple with after their playing days are done. In recent years, though, more and more players have gotten involved in areas like investment and technology earlier in their careers, a movement spearheaded in part by Currys former teammate Andre Iguodala.

The genesis of SC30 Inc.

To answer this very question, Curry and his team set up SC30 Inc. last year, bringing together all his off-court interests. Bryant Barr, a former teammate and roommate of Currys at Davidson, heads up SC30 Inc. Barr told me on a call recently that after he moved to the Bay Area to study at Stanford, the company was born from a series of conversations over three or four years around how could Stephen think about his off-court business from a much longer-term, more strategic perspective. So instead of just thinking about his playing days and his career, how could he think about the next 20 or 30 years?

SC30 Inc. includes Currys work to build his own brand through projects like the Underrated Tour. Then theres his burgeoning media production company, Unanimous Media, which is responsible for movies such as Breakthrough, Emanuel and Jumpshot, and programming such as his recent Stephen vs The Game series on Facebook Watch. Then there are his philanthropic endeavors through the Eat. Learn. Play. Foundation, which he and Ayesha Curry launched in the summer.

The final pillar of SC30 Inc. is investment. But this is Stephen Curry were talking about, a man who has revolutionized an entire sport with his long-range shooting ability and managed to ruin the game, to quote the phrase SC30 Inc. has picked up and run with. He may be at the start of his investment journey, but its already clear that hes not just about a normal investment strategy.

Just as Curry has changed the game of basketball, his team are thinking about how they can change the world through his presence in the investment space as well. Barr sets out the aim underlying all of the work of SC30 Inc. as not just to make money so you can sit on it and have nice things and continue to build wealth, but what could you do with that wealth that drives an impact in a really material way?

The partnership with Guild Education

That aspiration has been realized in their latest investment in Guild Education, a venture-backed tech company that partners with businesses, colleges, and students to offer education as benefit and help more people go back to college. If it sounds like theres a tie in with Currys philanthropic work, thats because there is, as Barr concurs it was clear right off the bat that there was clear alignment with the foundation. It was mission-aligned quite perfectly.

But Guild is set specifically as a business and seeks venture capital for a reason, as Rachel Carlson, the companys founder explains. For Guild, the impetus for that is that there are 64 million Americans today who need what we do. They either need access to complete their college degree or they need to earn a skill-certificate the only way were going to be successful in making a dent in that problem is by rapidly scaling. So thats why weve sought out being a venture-backed company.

For SC30, Inc. its important that there is a return to be made, as Barr sets out. We want to make sure its a good financial investment, and if its not theres no way were going to invest. We made a decision very early on that were not going to invest in things just because theyre brand-accretive to Stephen. Thats great if thats true, but first and foremost we need to believe that we can generate our target return here. But the added value of the alignment with the foundation meant that investing in, and partnering with, Guild is a home run according to Barr.

A step into impact investing

Its a step into a new world of impact investing. Guild has made SC30, Inc. think differently already, as Barr admits. What Guild has started to make us think about is where are there other opportunities for investment that align with our philanthropic interests? I dont think social impact investing needs to just be completely philanthropic in nature. Guild is a fantastic business. Theyre crushing it right now. Were very excited about what the future holds for them. We believe its going to be a great investment for our overall portfolio. But it is incredibly helpful and exciting to have something that aligns so much with what were doing philanthropically and allows us to really lean in on it from a value-add perspective.

Carlson is at the forefront of this world. I think differently about investment. When were fundraising at Guild were thinking about how do we bring people around the table who share conviction in our double-bottom line. One of those lines is our eventual profit line The other is your mission. How do you ensure your margin reinforces your mission, and your mission reinforces your margin?

One of the most important elements in answering that question is how you measure the return both financially and in terms of social impact. At the moment SC30, Inc. has concentrated on the financial return, but Barr says thats actually starting to change. Hes been out meeting with other investors to learn more about this space. Barr is exploring the intricacies involved. How do you balance the two, and what are the certain KPIs and metrics that youre looking at to understand if youre really driving impact or not... were continuing to develop a hypothesis, test it, and go back to iterate and evolve. As we start looking at businesses like Guild and investing in them to go beyond just the financial success how do we align purpose and profit?

With Guild, theres a clear methodology. The company is certified as a B-Corp. Its a rigorous process where the company measures and reports on impact metrics in the same way they report on their financial metrics. Carlson sets out what that looks like for Guild. Key indicators for us are how many students are successfully progressing through their programs in order to graduate, our loan avoidance rate our primary employers offer either fully-funded degrees whereby the employee can go back to college debt-free, or dramatically reduced where the employee pays a small amount so we measure how much debt were helping avoid for our student population. We measure other metrics directly with our universities related to underrepresentation such as graduation rates for a single mom.

With Guild the data isnt just collected and reported on though. Carlson explains that the companys business model is that they only get paid when students are successful. In effect we put all of our revenue at risk. And so measuring those outcomes is actually paramount as they are key performance indicators that will let us know if our business is going to be successful.

Adding value

Just as Guild is adding value to SC30, Inc. by helping them explore this path, so too is Curry able to add value beyond a normal investor. Barr stresses that Stephen is not simply a celebrity, customer-acquisition vehicle. We are looking to truly add value as an investor.

Carlson pinpoints Currys authenticity and connection with their students and potential students as something that is already paying dividends. With our students its constantly challenging the status quo, its saying just because youre a working adult, just because youre in your 30s or 40s and havent gone to college yet, just because youre a parent, just because youre low income doesnt mean youre not capable of achieving a college degree or achieving your higher education goals and aspirations. And thats something thats an authentic position that Stephen takes in his philanthropic work, but also as role model, as an athlete. Theres been this connection with... our students path to challenging the status quo when college today is designed for wealthy 18-year olds.

Developing the point, Carlson elaborates the difference between Curry and a more traditional set of investors. As a tech company, the reasons we normally get pointed towards the East Bay or Silicon Valley is because of tech Luminati, or famous technical founders. Whats interesting is that those folks dont necessarily create role models for our students in the way that Stephen is capable of. His background, his ability to overcome those obstacles, and then his commitment both to topics like gender equality and education its special that hes investing. If you told me youve got to find ten investors that meet that profile I dont know where Id start.

Changing the tech and investment world

One element that both sides stress is the common mission to change the worlds theyre operating in. Guild is one of a small number of female-founded venture-backed companies, while Curry has long been a champion for gender equality. In fact, this bond helped build the partnership in the first place, as Carlson explains. We share a passion for the work that Guild is doing but we also share a lot of commonalities in terms of our position in the venture capital and impact landscape as a female CEO and a black investor.

The statistics dont lie. In 2018 just 2.2% of the $130 billion total in venture capital money invested went to female-founded companies. All-male teams got 76%, or $109.36 billion. Companies with at least one female founder received $15.76 billion, or 12%, of last years venture capital. Even if the picture is improving, with women now making up a record-high number of CEOs at top-grossing companies, its starting from a low base. That high is only 6.6%.

Changing that is a major priority for SC30, Inc. as Barr explains. We want to find more female founders to invest in. Were actively looking at how do we increase the number of female-founded companies that were adding to the beginning of the funnel. But one thing thats equally as important is making sure that were investing in teams that are prioritizing that gender-equity across the board Even with our male-founded companies its how are you thinking about females on your board, how are you thinking about women on your executive team?

Indeed SC30, Inc. just did a data collection exercise across all their portfolio companies, totalling around 1000 employees. That showed that the profile was 46% female. Barr says that this is just the start. As we look at companies that we want to invest in, its not just what are they doing, its how theyre going about doing that.

So can SC30 Inc. be pioneers for other athletes in the impact investment world, as Iguodala has been for the tech space? Barr admits theyre early on in the journey. Id be lying if I told you that we had all the answers and its crystal clear on our end. But the north star for us is to be purpose-driven and to align purpose with profit. Judging by what Curry has done on the court, you wouldnt bet against him changing the game off it too.

Read the rest here:
Can Stephen Curry Revolutionize The Investment Game? - Forbes

It's that time of year German university students are heading back to the classroom for the start of semester after their summer break. But at the University of Bonn, as in many German universities, some students are unhappy with the standard of the buildings where they will be attending classes this fall.

"Every room I know in the main building is old-fashioned and unpractical,"Lisa Stroetmann, Masters student in Political Science in Bonn, told DWon a sunny October day as hundreds of fresh-faced "Erstis" (first years) entered the main building for their first week of classes. "It's really not good enough."

"The rooms really aren't properly equipped,"another student agreed, who didn't want to be named. "Often the seminar rooms aren't big enough for the amount of students, because they assume after the first week that people will stop showing up."

Graffiti adorns building work which masks the Electoral Palace building of the University of Bonn in front of the Hofgarten

Asbestos in the main building

The Rheinische Friedrich-Wilhelms-Universitt Bonn certainly looks impressive at first glance. The iconic Electoral Palace, former home of the Prince Electors of Cologne and Bonn, has been at the heart of the university since it was founded in 1818. To visitors and new students enjoying the leafy Hofgarten in front of the building on a sunny day, the yellow frontage gives an air of prestige.

However, the building itself is not original, having beenrebuilt in the 1950s after extensive bombing damage during World War II. University students at the time were required to help in the building works.According to university spokesperson Andreas Archut, it is in desperate need of renovation. Cracks run along the walls and mold and moss are growing in corners.

Weve also recently discovered asbestos in the main building, so now we have very strict regulations about building works," Archut told DW. "You're not even allowed to hammer a nail in the wall without special precaution procedures."

Asbestos, along with lead and PVC, are building materialsonce commonly used butnow considered toxic. PVC and lead have also been found in other Bonn university buildings.

Huge building works aretaking place on the front and basement garage of the building, as announced by signs covered in graffiti.But there areno plans for similar renovation work on the ground level.

Cracks and mold visible in a ceiling in the courtyard of the University of Bonn

'A permanent problem'

The University of Bonn is made up of around 200 buildings, many dating from the 1960s and 1970s. Although there are many new buildings, some of the most tired and old-fashionedcan be found at the Rmerstrae concrete complex, which houses IT and sports facilities.

"There's onebuilding at the Rmerstrasse complex which is completely unused because of PVCin the walls,"Archut told DW.

It is, however, beyond the university's control to tear down or renovate these buildings. All the university buildings are owned by BLB (Bau- und Liegenschaftsbetrieb), a private company which rents the buildings to the university. This means that it is difficult for the university to instigate renovation projects.

The university in the city that hosts one of Germany's largest parties, Karneval, comes in tenth place. The relaxed attitude of the locals make it a popular destination with international students as does its proximity to other major European cities - it is a train ride from Amsterdam, Brussels and Paris.

The university is named after German writer, Johann Wolfgang von Goethe, just in case you were wondering. Frankfurt, which is often called "Mainhattan" because of its skyscrapers, is one of the country's ethnically diverse cities, and its banking sector offers a lot of opportunities.

With 37,000 students, the University of Duisburg-Essen is one of the largest higher education institutions in Germany. The university is a result of a merger in 2003 by the Universities of Duisburg and Essen. Studying in this region puts students in Germany's most densely populated region, the Ruhr Valley.

Founded in 1386, it is the oldest university in Germany. Bearing that title makes the university one of the most attractive destinations for foreign students, not to mention the appeal of Heidelberg - a city with one of the most charming and intact old towns in Germany.

It is one of the oldest universities in Germany. With notable alumni including Otto von Bismarck, Heinrich Heine, Robert Koch and African American activist WEB Dubois, the university also has a great reputation.

Berlin isn't only popular with tourists. Students love it. Apart from being known for its high ranked engineering program, Technical University of Berlin's location in the German capital is advantageous because it the cost of living is lower than other large western European cities.

RWTH Aachen university is located in the city it's named after, which lies on the German border with Belgium and the Netherlands. As Germany's largest technical university, RWTH's motto, "Zukunft denken" (Thinking the future) , also clearly reflects the university's reputation in the country.

The Bavarian capital is also home to another world class institution - the Munich University of Technology. In 2013, just under one in five students were foreign, according to the university's figures.

Ludwig Maximilian University (LMU) is in Munich, which was ranked "the world's most livable city" by Monocle magazine in 2013. It is one of Germany's oldest and most prestigious universities - 34 Nobel laureates are associated with LMU.

The Free University of Berlin (FU Berlin) was founded in 1948. Its name is a reference to West Berlin because of its status as part of the "free world" unlike its counterpart in then Soviet-occupied East Berlin, Humboldt University. FU Berlin is among the 11 institutions in the German Universities Excellence Initiative.

Author: Chiponda Chimbelu

A recent article from German newspaper Die Zeit estimates that over 1 billion ($1.1 billion) isneeded to modernize the university buildings in Bonn. Archut described this number as "an easy figure" to cite,but agreed thatit might not be far off what would be needed. "Just the main building would probably need 100 million ($110 million),"he told DW.

"Recently some money has been put into the student residences and brand new buildings, but no money has been put into renovating the older buildings, said Luca Cristodero, a fourth-year medical student. "This is especially the case with technical equipment and also the look of the buildings."

"It's really a permanent problem,"another student said. "They've always got building work going on here and it never seems to make any difference to the standard of the buildings."

A large crack in the ceiling of a University of Bonn building

'Elite'universities

As long as the buildings do their job and are safe, it can be argued that German universities do not need to update tired facades. After all, German public universities simply don't have the same kind of money as British Russell Group universities orIvy League colleges in the US.

Indeed, German universitieshave long prided themselves on removing themselves from the narrative of "elite"universities thatpervades the educational cultureof many Western countries. Unlike in the US or UK, where a name like Oxford or Harvard on a resume can make all the difference to a job application, German students often choose universities which offer courses which they want to study, or simply which are closer to home or offer other practical benefits.

Map showing the excellence intiative universities of Germany

However, this all has been slowly changing since 2006, when a federally funded program referred to as the "Excellence Initiative"began to hand out funding to German universities that made great steps in research programs or had made attempts to be promotethemselves internationally, for example in their connection with the Scottish University of St Andrews.

Infrastructure investment 'urgently needed'

Following a renewal of the fund in 2018, 11 German universities have received funding of between 10 and 15 millionto spend over the next seven years. But this money is to be invested in research at the universities and will not be spent on infrastructure.

Its great that were got funding for all these new researchprojects," Archut said. "Butwe do not want the excellent new additional staff we can now hirejust turn around and leave when they seethefacilities.This is why more investmentininfrastructure isurgently needed."

The University of Bonn was officially added to the list in July 2019, in recognition of itsgrowing international status andresearch model. Despite its infrastructure issues, Bonn remains one of the most highly ranked universities in Germany, according to the British Times Higher Education ranking.

Top 10 German universities

International university with a bright future

A 2016 Zurich study on the impact of the excellence initiative in German universities points out that the initiative is slowly seeing German universities creep up international league tables and describes the "very positive"impact of the program.

Bonn also pridesitself on becoming more international, which means that more funding comes in from international tuition fees: Germanand EU citizens pay no or very low tuition fees. However, in Bonn, the vast majority of students are from Germany, and for these students the issue of infrastructure may be more important that a university's international standing.

Proportion of German and foreign students in the University of Bonn

Archut explained that there may be a precedent, with the universities of Aachen and Bochum in Germany investing some of their money from previous excellence initiative schemes into new buildings. But for now there are no such plans in Bonn.

For now, new undergraduate students and federally-funded postgraduate researchers alike will have to continue to work and study university buildings in dire need of an upgrade, or else work out of separate buildings which the university is now renting.

With enrollment higher this year than ever before and 1,000 new researchers expected as part of the excellence initiative, the University of Bonn, just likemany German universities,may need a solution fast.

Every evening, DW's editors send out a selection of the day's hard news and quality feature journalism. You can sign up to receive it directly here.

See the rest here:
German universities 'urgently need infrastructure investment' - DW (English)

The stock market regularly makes headlines, especially with the wild swings weve experienced lately. But volatility among stocks is nothing new. What investors should really pay attention to, experts warn, is the bond market.

Long considered a secure, steady way to earn income and hedge retirement savings against risk, bonds likely wont be such a haven for much longer. The volatility that we may experience in the bond market could easily exceed the volatility thats normally associated with the stock market, said Ric Edelman, a financial advisor, author, syndicated radio host and co-founder of Edelman Financial Engines. And the worst part is, it will hit the very investor whos least able to sustain the volatility: the conservative, income-oriented investor who is retired and doesnt have 30 years to wait for recovery.

Investors that went into bonds under the guise of safety could get a rude awakening if interest rates rise.

Interest Rate Risk And Its Effect On Bonds

Rather than focusing on the short-term fluctuations of the stock market, which dont have much bearing on long-term goals, such as saving for retirement, Edelman said investors should be more concerned about interest rates and their effect on the bond market.

Nobody expected that interest rates would stay so low for so long or that we might experience zero or even negative interest rates, Edelman said. That means investors need to recognize the notion of interest rate risk.

The 1970s are considered by many to be one of the worst economic periods in modern American history. Folks who are old enough to remember can fondly recall the days of 15% CD rates and can also lament the days of 21% mortgages, Edelman said. Interest rates were at all-time highs until Ronald Reagan took office in 1982, at which point interest rates began to come down (you can argue the degree to which Reagan was responsible for this).

Considering that the average investor is in the market for about 40 years, according to Edelman, most investors today have only ever experienced consistently falling interest rates with a few upward fluctuations here and there. It also means theyve only ever experienced a rising bond market, since interest rates and bond yields have an inverse relationship.

It has caused many investors to conclude that this is the way bonds always behave because, in their individual memory, thats the way bonds always did behave, Edelman said.

What people may not realize is that at some point interest rates will have to rise again, which means bond yields will fall in value. They are on opposite ends of a seesaw: When one goes up, the other goes down, Edelman said.

Today, that ratio is about 1-to-7, meaning for every 1% change in interest rates, theres a 7% change in bond values. If interest rates go from 2% to 4% a 2% increase bonds could lose 15% of their value... and the majority of bond investors, I fear, are not aware of this risk, he said.

Is It Time To Ditch Bonds?

Greg McBride, a chartered financial analyst and senior vice president at Bankrate.com, agreed with Edelmans sentiment. There is a ton of risk in the bond market, concentrated among long-term bonds, he said. And a lot of investors that went into bonds under the guise of safety could get a rude awakening if interest rates rise and the value of those long-term bonds plunges.

Of course, experts have been claiming for the last 10 years that rates are going to go up. When they have risen, theyve done so modestly, only to move right back down. A skeptical investor might think this is crying wolf, McBride said. But just because it hasnt happened yet doesnt mean its not going to happen.

The whole idea of going into bonds for less volatile returns and predictable income is no longer a guarantee. You are getting very little in the way of income, and youve got a risk of significant downside volatility at this point, McBride said. Investors would be prudent to take a little money off the table now and lighten up on bonds.

That doesnt mean you should ditch them entirely, however. Edelman advised that investors simply shorten the maturity. We are recommending that you hold short-term and intermediate-term five- to seven-year maturities for the most part rather than predominantly 20- and 30-year maturities, he said. This will insulate you to a great degree against the risk that interest rates might rise. Edelman pointed out that since interest rates are now very low across the board, the difference in yield between a seven-year Treasury and a 20-year Treasury is not all that significant. So youre not sacrificing much income in order to obtain a higher degree of safety.

McBride added that for investors who still have a long time horizon before retirement, quality dividend-paying stocks are a much more attractive option. The valuations are reasonable, the income stream is poised to grow over time (unlike a bond, which stays static) and youre earning yields that are above what youre going to get on bonds, he said.

McBride recognized that this understandably might seem counterintuitive to investors. The reality of it is you can generate income and should generate income across your portfolio, he said. Not just in bonds and fixed-income, but from equities, real estate investment trusts, master limited partnerships... some of those investments that are riskier in the short-term are a much better hedge against inflation and preserving your buying power in the long-term.

Read the original post:
Bonds Are About To Become A Risky Investment, Experts Warn - HuffPost

Billionaire Mark Cuban is known for his tech investments but on Sunday's "Shark Tank," Cuban diversified in a unique way.

Cuban invested six figures in Eterneva, a business that turns human or animal ashes or hair into diamonds.

"What we do is grow real diamonds from the carbon in someone's ashes," Garrett Ozar, who co-founded the company withAdelle Archer, said during the episode. "But really, we're in the business of celebrating remarkable people. Our diamonds give you something positive to look forward to."

According to Archer and Ozar, customers receive a "welcome kit," which includes a small container for a half-cup of ashes or hair. Customers then send that back to Eterneva. Customers also pick the diamond of their liking.

Then "we extract carbon from a half a cup of ashes or hair," Ozar said during the episode. "Once we have carbon, we then use high pressure, high temperature to grow a diamond."

The prices of these diamonds range from $3,000 to $20,000, according to Archer. She said the average order value is $8,000, and customers "pay upfront, in full."

"That's smart," Cuban said.

It takes 10 months to make the diamond, and it costs Eterneva between $3,000 to $5,000 to make.

The Sharks were impressed with Eterneva's business model.

"First year in sales we did $913,000, and we're projecting to do $2.7 million this year," Ozar said during the episode. "We're doing three-and-a-half times the volume of all our competitors in a year and a half," Archer added.

Archer and Ozar asked the Sharks for a $600,000 investment in exchange for a 5% stake. However, once the Eterneva duo revealed they currently have investors, previously raising a "$1.2 million round in a $10 million valuation," the Sharks were concerned that they did not really need a Shark investment.

"You come on here knowing you have to negotiate, but that puts a cap on what you're able to negotiate," Cuban said during the episode.

Shark Daymond John was not happy with the Archer and Ozar's decision to appear on "Shark Tank."

"Tens of thousands of people apply to stand on this rug. And every person that takes this carpet that has the money, they took the chance away from somebody that desperately needed help," John said during the episode. "Do you understand where I am seeing this as a problem?"

Cuban then added, "what he is asking is: are you happy with the commercial that we're making you right now?"

Despite this, Cuban thought the company was worth an offer, revealing why he was sold on the business.

"I love the idea. You're a celebration company," Cuban said during the episode. "Whether it's death, whether it's human, whether it's pet, whether it's birth. I would have loved to take a hair from my kids when they were born and put it in a diamond and give to my wife as a gift, even if it took 10 months. I love what you're doing."

Cuban first offered $600,000 for a 15% stake in the company during the episode. But after some back-and-forth, including some competition from Sharks Robert Herjavec and Kevin O'Leary, the Eterneva co-founders went with Cuban's final offer: $600,000 for a 9% stake.

"I knew you guys were smart," Cuban said.

"Now that Mark is a part of the team, sky is the absolute limit," Archer said.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."

Like this story? Subscribe to CNBC Make It on YouTube!

See also:

See original here:
'Shark Tank': Why Mark Cuban invested $600,000 into a business that turns human ashes into diamonds - CNBC

Caution: Men Working. Repairs are underway at the Khurais oil field in Saudi Arabia.

Saudi Aramco may be the worlds most profitable company, with more than $200 billion of pretax income over the past year. But even if the Kingdom manages to launch its IPO of the company, prudent investors should stay away, at any price. Heres 10 reasons not to invest:

Geopolitical risk. A September 14 cruise missile strike disabled two of oil giant Saudi Aramcos crown jewels, the Abqaiq oil stabilization plant and the Khurais oilfield. It used to be that the threat of disruption to oil flows from Saudi Arabia would be good for at least a few dollars pop in the price of oil. Not anymore. After jumping 20% when trading commenced following the Abqaiq attack, crude has since slumped to $60, lower even than before the attacks. Amid heightened tensions, President Trump appears tired of holding Uncle Sams umbrella of protection over the Kingdom, and the slog in Yemen should give no comfort that the Saudis could defend itself and its oilfields in a war against Iran. The possibility of future attacks now hangs over the market, says Amrita Sen of consultancy Energy Aspects.

No growth. In a commodity business you need scale in order to compete. But once youve achieved that scale, growth is anchored by the law of large numbers. A small company can rapidly double in size and value. Aramco sure cant. Its output has been flat, around 10 million barrels per day since 2014. And even prior to the attack on Abqaiq the company was being forced to run at less than 90% of capacity in order to satisfy OPEC volume reductions.In the first half of 2019 Aramcos net income and capital investment both fell 12% to $47 billion and $14.5 billion. According to analysis by Bernstein Research, Aramco will not have enough funds this year to pay its dividends out of free cash flow and so will have to borrow to make its payouts.

No autonomy. The companywhether active in OPEC or notacts as the primary lever of Saudi oil policy, with the king, not the board, calling the shots, says Bill Farren-Price, a director at RS Energy Group.In preparation for the IPO, King Salman in 2017 lowered Aramcos tax rate from 80% to about 50%, such that in 2018 the company had to hand over only $100 billion in taxes to the kingdom. Aramco says that upon going public it will promise dividends of at least $75 billion a year to shareholders, but with the kingdom running a budget deficit, if money gets tight that dividend could be cut by royal decree.

About that valuation. Prince MbS regularly touted $2 trillion as his valuation expectation for Aramco. This has always been too high. The worlds biggest and best-managed oil companies currently trade at a dividend yield of around 5% (Exxon 5%, Chevron 4%, Shell 6.5%, Total 5.6%, Sinopec 8%). To generate a 5% yield from $75 billion in dividends implies a market cap valuation on the order of $1.5 trillion. On a price/earnings basis, applying the average megacap P/E of 15 to Aramcos ~$100 billion of net income gets the same $1.5 trillion valuation.

Too many alternatives. Even $1.5 trillion is likely too high, considering that the world really doesnt need any more bloated, state-controlled, publicly traded oil giants. For instance, Gazprom, PetroChina and Petrobras, have each suffered corruption scandals and are down at least 40% in the past decade. Equinor, the Norwegian oil giant formerly known as Statoil, is considered the best-run of the state-owned giants; it has lost just 20% in the past decade and has made great strides in reducing the carbon intensity of its operationsa clear competitive advantage.

Capital is mistreated. In late 2017 Prince MbS arrested dozens of Saudi billionaires and tycoons and installed them in fancy prison at the Ritz-Carlton Riyadh. The captives included famous capitalists like Prince Alwaleed bin Talal, long praised as the Arab worlds Warren Buffett for decades of shrewd investments. MbS shook down his guests for $100 billion in assets with no legal due process whatsoever. You will no longer find any Saudis on Forbes list of Global Billionaires. Prince Alwaleed reportedly said the price of his freedom was $6 billion. Once a fixture on CNBC, he has hardly been seen since.If this is the treatment that successful Saudi entrepreneurs (legit or not) receive in the kingdom, why bother? Capital only flows to places where it is treated well and protected by the rule of law. In 2016 Saudi Arabia attracted $7.4 billion in Foreign Direct Investment. In 2017 FDI plunged to $1.4 billion, recovering somewhat last year to $3.2 billion.The World Bank ranks Saudi Arabia 92 out of 190 countries on ease of doing business. Theres too many better places to set up shop.

Behold the power of Americas frackers. If you absolutely must own oil and gas assets, wouldnt you rather they be in politically stable places like Texas or New Mexico, where property rights are sacrosanct, contracts upheld by the rule of law and the likelihood of Iranian missile strikes vanishingly low? Americas frackers have unlocked enormous onshore reserves over the past decade, and theyre now on sale, with many names down 50% or more in the past year. Apache Corp. is down 50%, Occidental Petroleum down 44% and EOG Resources off 17%, from year-ago levels. All have far more room to grow than Aramco and are not burdened with the pressure of being a royal piggybank.

The traditional niqab and black abayas are common, even in more liberal Jeddah, as seen in this 2018 ... [+] photo.

What human rights? The murder of Washington Post columnist Jamal Khashoggi last year still gets headlines, but you cant believe for a second he was the first dissident killed and dismembered by a team of Saudi hitmen. Though Prince MbS may think he can placate calls for liberalization by granting women permission to drive, he has imprisoned driving activist Loujain al-Hathloul for more than a year. Women remain second-class citizens and must cover their heads in public. There is no religious pluralism, no freedom of assembly or expression. Alcohol is prohibited. But hey, now you can get a tourist visa to come see for yourself how this absolute monarchy keeps its 30 million subjects in line.

Absolute power corrupts absolutely. In a country that outlaws all political opposition, when change finally does come to the kingdom it will not be orderly. In a conversation in late 2017, Khashoggi told me he wasnt a revolutionary. Im not against the system. Without the monarchy the whole country would collapse, he said. What he wanted most for Saudi Arabia were the freedoms we take for granted in the United States. I would wish for freedom of expression.If only that werent such a high bar.

The oil age is ending. The world has never used more oilabout 101 million barrels every day. And theres plenty more where that came from, thanks to advances in directional drilling and hydraulic fracturing. The world is glutted with oil right now even after the near total collapse of Venezuela (which has even more of the stuff than Saudi Arabia) and the blockade on Iranian crude. When Peak Oil comes sometime in the next 25 years, it will be a function not of inadequate supply, but lackluster demand, driven by electric vehicle adoption. That will gut the price of oil and, with it, the value of Aramcos reserves. Considering that Aramco currently pumps about 4 billion barrels per year, Saudi claims of 260 to 300 billion barrels of proven oil reserves should be met with eye rolls. There is zero present value to a barrel of oil in the ground that no one will get around to drilling for 50 years.

See more here:
10 Reasons Not To Invest In The Saudi Aramco IPO - Forbes

Spearhead, an investment fund launched by AngelLists Naval Ravikant and Accomplices Jeff Fagnan, plans to raise roughly $100 million for its third fund to provide founders $1 million each to invest in technology startups of their choosing.

The firm, created in 2017, initially provided founders $200,000 in investment capital sourced from Spearhead I, a $25 million vehicle, followed by Spearhead II, a $35 million vehicle. The group now plans roughly $100 million to give its founders 5x more capital to play with.

Each founder is allotted 15% carry in his or her fund, while Spearhead holds on to 5%. This time around, says Spearheads Jeff Fagnan, standout leads, or those tapped to deploy capital from the fund, will also have the opportunity to receive another $10 million to invest at the end of the two-year program during a culminating demo day-like event.

Spearhead is designed to train founders, who tend to be well-connected to the tech ecosystem and knowledgeable about startups, to be effective angel investors. Previous Spearhead leads include Shippo co-founder and chief executive officer Laura Behrens Wu, Scale AI founder and CEO Alex Wang and Rippling co-founder and chief technology officer Prasanna Sankar. To date, 35 founders have completed the program.

Applications to join Spearheads third cohort will become available this week. Those who participate will be encouraged to write checks at the pre-seed stage.

Theres starting to be gap opening up again at the pre-seed, Fagnan tells TechCrunch. Founders are the right way to fill that gap. Founders backing their most talented friends founders backing founders is the right way for this to go. We need to redefine who thinks of themselves as an angel investor.

To be eligible to become a Spearhead lead, you must live in San Francisco, Los Angeles, Boston or New York City and run, or very recently have run, a startup. The firm plans to accept around 15 applicants.

We are trying to build an active community within the leads and weve found smaller equals better; fewer people coming together and taking deeper accountability, Fagnan said.

Spearhead leads can invest their capital in any tech startups, so long as theres no existing equity relationship. Existing Spearhead investments include ZeroDown, Altitude Networks, Scythe, Air Garage, Cloosiv, Height, O.School, PopSQL, Superplastic and Sword Health.

View post:
Spearhead will give $1M to 15 founders to invest freely - TechCrunch

CAIRO 20 October 2019: Kuwaiti Prime Minister Jaber Al-Mubarak Al-Hamad Al-Sabah's two-day visit starting Sunday is set to strengthen the bilateral ties between the two countries especially at the economic level and investments.

Sheikh Jaber Al-Mubarak, will be accompanied, during his visit to Egypt, with a large delegation comprising a number of ministers, representatives of Kuwait Chamber of Commerce and Industry, and businessmen, local media reported.

The Kuwaiti prime minister and his delegation are scheduled to meet with Egyptian President Abdel Fattah al-Sisi and Prime Minister Mostafa Madbouly.

During the meetings, the two sides will sign several agreements covering some areas of cooperation between the two countries, especially the investments sector.

The Egyptian-Kuwaiti relations are based on cooperation and understanding on all issues.

According to the Kuwaiti newspaper Al-Qabas, economic relations between the two countries have witnessed a steady growth throughout history. Kuwaiti investments in Egypt rank high among existing investments as it exceeds $15 billion.

Tourism and aviation between the two countries have witnessed a similar growth reflected in the increase in the number of Kuwaiti tourists to around 200,000 tourists on 64 weekly flights between.

A large Kuwaiti community is also inhabiting Egypt, including about 20,000 Kuwaitis, mostly undergraduate and post-university students. In return, Kuwait hosts around 700,000 Egyptian nationals.

In the investment sector, Kuwait is Egypt's third largest trading partner in the Arab world after the UAE and Saudi Arabia. Deputy Prime Minister Sabah Al-Khalid Al-Sabah said in the 12th session of the Kuwaiti-Egyptian joint committee that investments exceeded $15 billion.

The volume of Egyptian exports to Kuwait between 2010 and 2018 amounted to about 984.2 million dinars (about $3.2 billion), while the volume of Kuwaiti exports to Egypt reached 165.3 million dinars (about $543 million), according to statistics of Kuwait's Central Statistics Bureau.

The Kuwaiti prime minister's visit comes in the context of continuous visits between the two countries to enhance bilateral cooperation.

The Kuwaiti Fund for Arab Economic Development has covered most of the developmental fields in Egypt during the past years, according to Al-Qabas. The total number of projects financed by the Fund in Egypt since its establishment until September 30 this year is about 50 projects with a total cost of one billion dinars (about 3.4 billion dollars), while the number of grants and technical assistance amounted to about 18 grants worth 17.3 million dinars (about 56 million dollars).

The various projects financed by the Fund in Egypt included development of maritime transport, the pharmaceutical industry, sanitation, power and water plants, the expansion of natural gas networks, and the development of railways.

Read more:
Egyptian-Kuwaiti investments highlighted ahead of PM's visit to Cairo - Egypttoday

In case you haven't noticed, our old friend volatility is back again. Through the first six trading days of October, a historically volatile month for the stock market, the S&P 500 (SNPINDEX:^GSPC) has delivered single-day points declines (when rounded) of 36, 53, and 46.

For those investors fixated on point values rather than percentages, the start of October has all the making of a stock market "plunge." The S&P 500 has shed an aggregate of 83 points in a six-day span, and it's nearly 115 points lower than where the index closed in mid-September. Concerns about weak manufacturing data, the persistent trade war between the U.S. and China, and the inverted yield curve, have some folks talking about the dreaded "R" word: recession.

Image source: Getty Images.

But there are a couple of things you should certainly keep in mind if the latest stock market hiccup has you concerned. First, these "hiccups" tend to be pretty common. Over the previous 70 years, there have 37 corrections in the S&P 500 totaling at least 10%, not including rounding. That's one every 1.9 years. Drops in the market of 5%, similar to what we're experiencing now, are even more frequent. This is the price of admission, so to speak, for long-term wealth creation.

That brings me to the next point: long-term investors rarely suffer lasting damage from stock market corrections. Though you're going to be wrong on some of the individual stocks you buy, it's important to recognize that each and every correction in the stock market has been eventually erased by a bull market rally. Patience, time, and diligence are the keys to succeeding over the long run.

Lastly, it's never a bad idea to have a strategy in place to curb your concerns when these inevitable corrections and hiccups in the stock market pop up. When investor fear builds and emotions drive the stock market lower in the near-term, here are three investment ideas that can thrive.

Image source: Getty Images.

The first consideration for investors is to buy businesses that provide a basic-need good or service that isn't impacted by the ups and downs of the U.S. economy. Some really basic examples include detergent and toothpaste, which are going to be bought by consumers regardless of how well or poorly the economy is performing.

In terms of top-performing basic-need stocks, NextEra Energy (NYSE:NEE) might be worth a closer look as a healthy hedge during times of volatility. NextEra is the largest electric utility in the U.S. by market cap, and also happens to be a global leader in wind and solar energy generation. These renewable projects haven't been cheap, but it's put NextEra on track to be low-cost producer for a long time to come.

On the other side of the coin, NextEra's traditional electric generation business is regulated. This mean NextEra can't raise its prices without the approval of state-based energy commissions. However, it also means that the company isn't exposed to volatile wholesale pricing, and its cash flow is highly predictable.

Since homeowners and renters don't change their electricity usage much as a result of fluctuations in the economy, NextEra is the epitome of a defensive basic-need stock that can thrive in a volatile market.

Image source: Getty Images.

Admittedly, not every company provides a basic-need good or service. However, that shouldn't disqualify brand-name stocks from being purchased during periods of heightened volatility. Businesses that provide steady profits, pay a dividend, and offer low volatility can be especially profitable when the tide turns.

Take telecom giant AT&T (NYSE:T) as an example. I simply say the name AT&T and investors worldwide yawn. It's a relatively boring business model with a low-to-mid-single-digit growth rate that's buoyed by its wireless division and content options, such as DIRECTV. But during periods of heightened volatility, and over the long run, boring is beautiful.

The barrier to entry in the wireless space is exceptionally high in the U.S., meaning AT&T only has a few major competitors and pretty healthy market share. Its wireless division is also looking at an exciting infrastructure upgrade cycle that'll see the rollout of 5G networks really ramp up in 2020. Since data is AT&T's margins driver, 5G networks could provide years of higher-margin growth. Assuming AT&T can also monetize its Time Warner acquisition into juicier advertising rates and more streaming subscribers, this boring business could be on the verge of getting considerably more exciting.

And did I mention it offers a 5.4% yield, which is more than triple the current yield of a 10-year Treasury bond?

Image source: Getty Images.

A third way to thrive during a stock market correction is to buy a safe-haven asset stock. For instance, when uncertainty or worry build in the stock market, investors will often turn to gold as a store of value. This is why it's known as a safe-haven asset.

But buying gold, or any commodity for that matter, tends to underperform the stock market over longer periods of time. Plus, physical assets like gold don't offer a dividend. That's why it might be a smart idea for investors to consider buying a company that produces a safe-haven asset, such as gold.

As an example, British Columbia-based SSR Mining (NASDAQ:SSRM) is a company that's sitting on net cash of almost $207 million, which is pretty incredible considering that most gold and silver mining stocks are saddled with debt. SSR Mining expects production at its flagship Marigold mine in Nevada to grow by about 30% to 265,000 ounces of gold per year by 2021 or 2022, and has seen its Seabee Mine deliver record gold output year after year.

Also, after recently acquiring Golden Arrow's 25% joint venture stake, SSR Mining also now owns a 100% stake in the Chinchillas silver mining project in Argentina. Though still generating a significant portion of revenue from the gold market, SSR Mining now has recurring silver revenue that allows it to benefit from a robust economy, too.

The next time to stock market "plunges," keep in mind that there are alternatives that can allow investors to thrive.

Read the original post:
The Stock Market Is "Plunging": 3 Investments That Can Thrive - The Motley Fool

LONDON (Reuters) - Royal Dutch Shell (RDSa.L) still sees abundant opportunity to make money from oil and gas in coming decades even as investors and governments increase pressure on energy companies over climate change, its chief executive said.

Ben Van Beurden, CEO of Shell, speaks to Reuters reporters in Canary Wharf, London, Britain, October 8, 2019. Picture taken October 8, 2019. REUTERS/Marika Kochiashvili

But in an interview with Reuters, Ben van Beurden expressed concern that some shareholders could abandon the worlds second-largest listed energy company due partly to what he called the demonisation of oil and gas and unjustified worries that its business model was unsustainable.

The 61-year-old Dutch executive in recent years became one of the sectors most prominent voices advocating action over global warming in the wake of the 2015 Paris climate agreement.

Shell, which supplies around 3% of the worlds energy, set out in 2017 a plan to halve the intensity of its greenhouse emissions by the middle of the century, based in large part on building one of the worlds biggest power businesses.

Still, the amount of carbon dioxide emitted from Shells operations and the products it sells rose by 2.5% between 2017 and 2018.

A defiant van Beurden rejected a rising chorus from climate activists and parts of the investor community to transform radically the 112-year-old Anglo-Dutch companys traditional business model.

Despite what a lot of activists say, it is entirely legitimate to invest in oil and gas because the world demands it, van Beurden said.

We have no choice but to invest in long-life projects, he added.

Shell and its peers have long insisted that switching away from oil and gas to cleaner sources of energy will take decades as demand for transport and plastics continues to grow. Investors have warned, however, that oil companies often rely on forecasts that underestimate the pace of change.

Shell plans to greenlight more than 35 new oil and gas projects by 2025, according to an investor presentation from June.

Oil and gas remain the backbone of profits for Shell, the largest listed company on London's main FTSE index .FTSE.

While oil and gas account for the entirety of Shells free cashflow today, it foresees a gradual diversification over the next two decades. Oil and gas are each still expected to provide a third of free cashflow, however, with the rest coming from power and chemicals.

Many oil and gas projects such as gas-processing plants, deepwater platforms or chemical plants take billions of dollars to develop and operate for decades.

Shell, like many rivals, has become more selective in its investments as the outlook for oil prices and demand remains unclear. It targets new projects that can be profitable at oil prices of $20 to $30 a barrel and which emit relatively low greenhouse emissions. Oil is trading at around $60 a barrel.

We can sustain an upstream portfolio all the way into the 2030s if there is an economic rationale for doing that and a societal rationale for doing that, van Beurden said.

Fortunately enough, we have more of those than we have money to spend on them.

Van Beurden rejected as a red herring arguments that Shells oil and gas reserves, which can sustain its current production for around eight years, would be economically unviable, or stranded, in the future.

A lack of investment in oil and gas projects could lead to a supply shortage and result in price spikes, he said.

One of the bigger risks is not so much that we will become dinosaurs because we are still investing in oil and gas when there is no need for it anymore. A bigger risk is prematurely turning your back on oil and gas.

Shell plans to increase its annual spending to around $32 billion by 2025 from the current $25 billion, with up to one tenth allocated to renewables and the power business.

The company, the worlds largest dividend payer, plans to return $125 billion to shareholders in the five years to 2025.

On liquefied natural gas, of which Shell is the worlds biggest trader, van Beurden said the market would exhibit oversupply in the near term. But (LNG) demand will continue to grow at a pace that is roughly four times that of oil, he said.

(GRAPHIC: Shell reserves - here)

(GRAPHIC: Shell capex - here)

(GRAPHIC: Shell's share performance - here)

Shell has become a focal point of environmental protests, particularly in Europe, with regular demonstrations outside its London headquarters and the British National Theatre dropping Shells sponsorship in recent months.

At the same time, investors have sharply increased their scrutiny of companies environmental performance.

Amid growing uncertainty over future demand, the share prices of Shell and its peers have underperformed relative to other sectors.

Van Beurden expressed concern that some investors could ditch Shell, acknowledging that shares in the company were trading at a discount partly due to societal risk.

I am afraid of that, to be honest, he said.

But I dont think they will flee for the justified concern of stranded assets ... (It is) the continued pressure on our sector, in some cases to the point of demonisation, that scares asset managers.

It is not at a scale that the alarm bells are ringing, but it is an unhealthy trend.

Van Beurden put the onus for achieving a transformation to low-carbon economies on governments, warning that not enough progress had been made to reach the Paris climate goal of limiting global warming to well below 2 degrees Celsius above pre-industrial levels by the end of the century.

Can that happen? I think it can ... Increasingly society is not putting up with the fact we are not making enough progress.

Delaying implementation of the right climate policies could result in knee-jerk political responses that might be very disruptive to society, he said.

Let the air out of the balloon as soon as you can before the balloon actually bursts, van Beurden said.

(GRAPHIC: Shell Q2 2019 profits - here)

(GRAPHIC: Shell annual earnings 2018 - here)

(GRAPHIC: Oil Majors' Carbon emissions interactive - here)

Reporting by Ron Bousso and Dmitry Zhannikov; Editing by Dale Hudson

More here:
Exclusive: No choice but to invest in oil, Shell CEO says - Reuters

For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Time Watch Investments Limited (SEHK:2033) useful as an attempt to give more color around how Time Watch Investments is currently performing.

See our latest analysis for Time Watch Investments

2033s trailing twelve-month earnings (from 30 June 2019) of HK$305m has increased by 4.8% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.9%, indicating the rate at which 2033 is growing has accelerated. How has it been able to do this? Well, lets take a look at whether it is solely because of industry tailwinds, or if Time Watch Investments has experienced some company-specific growth.

In terms of returns from investment, Time Watch Investments has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 10.0% exceeds the HK Luxury industry of 5.3%, indicating Time Watch Investments has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Time Watch Investmentss debt level, has declined over the past 3 years from 18% to 14%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 2.4% to 9.5% over the past 5 years.

Though Time Watch Investmentss past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Time Watch Investments gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Time Watch Investments to get a better picture of the stock by looking at:

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

Excerpt from:
Does Time Watch Investments Limiteds (HKG:2033) Past Performance Indicate A Stronger Future? - Simply Wall St