What we’re reading (10/27)
“AMD Agrees To Buy Rival Chip Maker Xilinx For $35 Billion” (Wall Street Journal). “AMD and Xilinx on Tuesday said the companies reached an all-stock deal that would significantly expand their product range and markets and deliver a financial boost immediately on closing. The Wall Street Journal previously reported the two were close to an agreement. The U.S. semiconductor industry is going through a seismic transformation, driven both by a wave of corporate transactions and a pandemic that has supercharged demand for some chips”
“S&P CoreLogic Case-Shiller: US Home Prices Up 5.2% in August” (U.S. News & World Report). “U.S. home prices posted a robust gain in August — another sign that the American housing market remains strong despite economic fallout from the coronavirus pandemic. The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, showed that home prices climbed 5.2% in August from a year earlier, accelerating from a 4.1% gain in July. The gain was stronger than economists had expected.”
“Robinhood Co-CEO Says Young Traders See Market Downturns As Buying Opportunities For The Long Term” (CNBC). “The young customers of Robinhood are actually smart, long-term oriented investors who recognized that the market sell-off in March was a buying opportunity, according to the zero commission pioneer’s co-founder. ‘What we’ve seen is they typically see volatility and market downturns as buying opportunities, just because they’re at the beginning of their investing journey and think they recognize that there’s many, many decades for things to, to smoothen out in front of them,’ co-founder and co-CEO Vlad Tenev told CNBC’s “Squawk Box.’”
“The Data of Long-Lived Institutions” (The Long Now Foundation). “I’ve been collecting data on all of the longest lived institutions in the world. As you look at these, there’s a few things that stick out. Notice: brewery, brewery, winery, hotel, bar, pub, right? And also notice that a lot of them are in Japan. There’s been a rough system of government there for over 2,000 years (the Royal Family) that’s held together enough to enable something like the Royal Confectioner of Japan to be one of the oldest companies in the world…[i]n the West, most of the companies that have survived for a very long time are basically service companies. It’s a lot easier to reinvent yourself as a service-oriented company than it is as a commodity company when that particular commodity goes out of use…Something else that came out of this research is the fact that the length of company’s lives is shrinking at almost one year per year. In [1950], the average company on the Fortune 500 had been around for 61 years. Now it’s 18 years. Companies’ lives are getting shorter.”
“Will Steve Cohen, A Symbol Of Wall Street Malfeasance, Own The New York Mets?” (New Yorker). “Cohen and S.A.C. Capital [his former hedge fud] were, for several years, at the center of one of the most high-profile financial-fraud investigations ever conducted, which resulted in the indictment of the company. Cohen was never charged personally, but his firm paid $1.8 billion in forfeitures and penalties, and Cohen was required to shut it down. He also was barred from managing outside investor money until January, 2018. Martoma, a former S.A.C. portfolio manager, was sentenced to nine years in prison for insider trading at S.A.C., in what was billed as one of the largest cases of its kind. In the indictment of S.A.C., the U.S. Attorney for the Southern District of New York, Preet Bharara, was sweeping in his condemnation of the company: in the course of more than a decade, the indictment alleged, numerous employees engaged in insider-trading offenses involving more than twenty publicly traded companies, which generated hundreds of millions of dollars in ill-gotten profits for the fund. Cohen micromanaged the company’s operations, and, in the years he supervised, it became ‘a veritable magnet for market cheaters.’”
