Aramco Fischer Black famously defined an efficient market as "one in which price is within a factor of 2 of value, i.e., the price is more than half of value and less than twice value," and I certainly would not aspire to any greater precision. By that standard, the initial public offering of Saudi Aramco is going great: Saudi Aramco may be worth as little as $1.5 trillion or even less, well below the target set by the kingdom, according to research sent on Sunday to potential investors by the banks involved in the company's initial public offering.fwew The research, according to multiple investors who reviewed it, suggests the banks are struggling to pinpoint a precise valuation for Aramco. Some banks offered a huge range -- as much as $1 trillion in the case of Bank of America -- between their low and high estimates. … BofA put the valuation of Aramco at $1.22 trillion as a low case scenario and $2.27 trillion as a high case — a huge gap that's more than enough to fit the combined market capitalizations of Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp, the world's three largest publicly listed energy companies. ... Goldman Sachs, perhaps the most influential bank on Wall Street, told investors it thought Aramco was worth between $1.6 trillion and $2.3 trillion. … HSBC, one of the leading banks through the last two years on the IPO process, put the valuation at between $1.59 trillion and $2.1 trillion. BNP Paribas, which is playing a role in the IPO too, gave investors a rather precise valuation. The French bank said Aramco was worth exactly $1.424394 trillion. Seems fine, right? Let me be a little bit cynical here and point out that if you think Aramco is worth, say, $1.22 trillion, and your bank is underwriting the IPO, and you are aware that Saudi Crown Prince Mohammed bin Salman strongly believes that it is worth $2 trillion, you can without sacrificing too much of your integrity say "we think it is worth between $1.22 trillion and $2.27 trillion" or whatever. Then if it turns out to be worth $1.2 trillion you can say you were right (it was in your range!), while you can also tell the prince that you agreed with and supported his valuation (also in your range!). Oh and sure you will get made fun of because that range is more than a trillion dollars wide, but you should not worry about this too much because (1) investors are not coming to you for a specific valuation so much as for information and analysis and all the usual services of sell-side investment research and (2) you are within the Black interval, it's fine, whatever. The general point is that pretty soon, probably by mid-December, there will be a market price for Aramco shares, and then it just won't matter that much what people say it is worth or think it ought to be worth or whatever, so if you are responsible for saying what you think it is worth now, you should just say a wide range of very large numbers and then stop checking your email for a month. I mean, unless you are responsible for putting in an order. If you are considering investing in Aramco, you probably have to come up with some firmer view on valuation. Good luck with that! The research analysts don't seem to be much help. Fortunately the actual IPO marketing range is narrower: The Kingdom is ready to accept less than the $2 trillion Crown Prince Mohammed bin Salman has long insisted the state oil giant is worth. Bankers will instead target a valuation of $1.6 trillion to $1.8 trillion after the record share sale was given the green light by Prince Mohammed on Friday, according to people briefed on the matter. The bankers' range is somewhat narrower than the analysts', but arguably their job is a little easier: The analysts have to say what Aramco will be worth in the long run; the bankers just have to say what investors will pay for it in six weeks. If you just ask the investors they might tell you. It's a bit of a circular process—the banks market the IPO at a range they think investors will pay for it, and investors put in orders based on the banks' marketing range—but that's kind of how markets work. Anyway the IPO kicked off with "a so-called intention to float on Sunday," with plans to list a small percentage of the company on the Saudi stock exchange. There will also be lower-than-expected income taxes on Aramco's production, and a sort of loyalty program—"Saudi retail investors will be eligible to receive one share for every 10 allotted shares if they continuously hold the shares for 180 days from the first date of trading and listing"—to keep the stock up. WeExist The New York Times had another big story about WeWork founder Adam Neumann this weekend, so of course we have to talk about it. As usual this one has a lot of crazy stuff, so let's start with the tequila and marijuana and orphans: Mr. Neumann would convince employees to take shots of pricey Don Julio tequila, work 20-hour days, attend 2 a.m. meetings. He'd convince them to smoke marijuana at work, dance to Journey around a fire in the woods on weekend excursions, smoke more pot, drink more tequila. Even people who don't really seem the tequila type would go along with his act — including a pre-White House Jared Kushner, who imbibed while scoping out a property in Philadelphia. Mr. Neumann had a talent for imbuing "Animal House" antics with a larger meaning. In his view, WeWork didn't simply sublease office space to workers; it supplied them with kombucha, cold-brew coffee and an ecstatic sense of community. "They're coming to us for energy, for culture," Mr. Neumann would say. He envisioned customers residing in WeLive apartment buildings that would drive down suicide rates because "no one ever feels alone." He imagined a WeGrow school and an effort to shelter the world's orphans. ("We want to solve this problem and give them a new family: the WeWork family.") There was talk of a WeBank, WeSail, WeSleep, an airline. Also this, which in hindsight seems like maybe it could have been a risk factor in the IPO prospectus? Some came to wonder if Mr. Neumann had been wise to share, during a 2017 speech at Baruch College, a story from his first date with Rebekah. "She looked me straight in the eye and she said, 'You, my friend, are full of" crap, Mr. Neumann recalled. "'She then said, 'Every single word that comes out of your mouth is fake.'" But there are people who still love Adam Neumann: Improbably enough, there are those who still have faith in Mr. Neumann as a businessman. "I actually think he's probably one of the greatest entrepreneurs I've ever met," Marc Benioff, the co-chief executive of Salesforce, told Business Insider on Oct. 15. "He's an incredible evangelist. He's an incredible visionary. He's hired a lot of amazing people. He's built an amazing brand, right?" Mr. Benioff did allow: "Unfortunately, there were some things, obviously, in the company that you probably would have preferred to change if he could do it all over again." And there is also … look, I continue to think that the basic idea of leasing office space, making it nice, dividing it up and charging tenants more than your costs seems basically fine, and that there's no especially good reason why WeWork should not be a good and profitable company: Other analysts say WeWork does have a workable business model, but that model will likely hew closer to the core idea of leasing office space, largely to long-term corporate clients — rather than, say, schools and orphanages — providing them with a cheery atmosphere and free Wi-Fi. "Is there a viable business? The answer is yes, but not the way WeWork pursued it," said Nori Gerardo Lietz, a senior lecturer at Harvard Business School who has studied the company extensively. She added that WeWork would have to move past its "profligate excesses." One possibility is that the WeWork story is about a mismatch between the opportunity and the person. You need an incredible visionary to, like, invent social networking, or design an iPhone. But you might want a quiet, cost-conscious real estate expert to run a company that subleases office space and collects a small margin; having an incredible vision might—did—get in the way of making the margins work. Another possibility is that WeWork is about a mismatch between the opportunity and the financing. You can bootstrap a business of renting office space for more than you pay for it, building it slowly while focusing on cost and efficiency. Or you can raise billions of dollars from SoftBank all at once and stop worrying about pesky details like profit: To WeWork insiders who know Mr. Neumann — most of whom spoke on the condition of anonymity because of nondisclosure agreements signed with the company — the SoftBank deal changed things precipitously. They talk about WeWork as existing pre- and post-Masa. The investment transformed the start-up from a mere unicorn into something with nearly unlimited ambition. … Mr. Son's decision to put billions into WeWork may have thrilled early investors and made the Vision Fund's partners feel like they had a piece of a world-changing start-up, but the deal severed Mr. Neumann from any sense of reality. "You've got a guy who meets Adam for 10 minutes and cuts him a check for $4.4 billion, and it's just insane," the former executive said. "And he's not told, 'I need you to be the most careful steward of this capital.' It's like, 'I need you to go crazier, faster, bigger and more.'" In this model the problem is not WeWork's business model, or Neumann's pre-existing eccentricity; it's just that the company overdosed on cash and could not recover. But there is something else deep and weird in this story. It's in this quote from Harrison Weber, WeWork's former editorial director: Mr. Neumann would talk eloquently about creating the first "physical social network," a place where members could talk about jobs, family, love. "It was like, wait, you mean life. What you're talking about is just regular life," Mr. Weber said. But as Mr. Neumann framed things, it sounded revolutionary. As more people bought into his vision, WeWork's value kept soaring. "That's a bus. You invented a bus," is a famous and not always fair joke about a certain sort of tech-company hubris, in which visionary tech companies are unjustifiably proud of themselves for replicating ordinary, well-functioning, pre-existing services. But "life, you invented life": That's a new one! We's grand vision was, like, you can go to work in an office, and live in a home, and work out at a gym, and send your kids to a school, and keep your money in the bank, and fly on an airline, and you are sort of nodding along and being like "yes, yes, a home, that is where I want to live, and a school seems like a good place to send my kids, these people are making a lot of sense," but are they? Which part here is the tech company? What … is … this? The maximal tech-company vision wraps around to become the minimal one. Everything in your life happens exactly as it would otherwise, but there is a vague mist of We over all of it. I don't know how they make money from the vague mist. They didn't really get that far. There is a profile of Edward Gorey in which he quotes two of his influences: What appeals to me most is an idea expressed by [Paul] Éluard. He has a line about there being another world, but it's in this one. And Raymond Queneau said the world is not what it seems—but it isn't anything else, either. These two ideas are the bedrock of my approach. Perhaps that's how to think about Neumann's approach too. Perhaps WeWork really is not a real estate company—but it isn't anything else, either. Jim Simons It is a strange and upsetting fact about investing that probably the best investor ever does not seem to be particularly interested in investing. Like, Warren Buffett, good investor, probably a top-5 investor, and the guy basically wakes up and spends his day reading corporate financial statements. That makes sense, that's how it ought to be, sure he has immense natural talent and soft skills and luck and opportunity, but he combines those things with constant focused enthusiastic hard work. He has become great at investing by devoting his whole life to it. Normal stuff. But the Wall Street Journal has an excerpt from Gregory Zuckerman's book about Jim Simons of Renaissance Technologies, who is pretty securely ahead of Buffett in the rankings: Today, Mr. Simons is considered the most successful money maker in the history of modern finance. Since 1988, his flagship Medallion fund has generated average annual returns of 66% before charging hefty investor fees—39% after fees—racking up trading gains of more than $100 billion. No one in the investment world comes close. Warren Buffett, George Soros, Peter Lynch, Steve Cohen, and Ray Dalio all fall short. And he is all bleh, investing, whatever. He started at age 40 with no experience: This wry, chain-smoking teacher had never taken a finance class, didn't know much about trading, and had no clue how to estimate earnings or predict the economy. … "I don't want to have to worry about the market every minute. I want models that will make money while I sleep," Mr. Simons told a friend. "A pure system without humans interfering." And he went and built it! It took him a while—he launched his fund in 1978 and it didn't really click until about 1990—but he absolutely achieved his dream of making money without doing anything. Simons ranked second on Institutional Investor's list of top-earning hedge fund managers in the world last year, and first the year before and the year before that, despite the fact that he retired in 2010. He is the best hedge fund manager in the world year after year without managing his hedge fund. I mean, presumably he worked hard before 2010, and presumably his employees work hard now, and certainly they are all super smart and all of that, but their work is sort of tangential to financial markets, not "let's read financial statements as hard as we can" but "let's apply techniques of linguistics and meteorology to predict patterns in financial markets." The message of Simons's career isn't exactly that financial markets are easy to crack, but it might be that they are a trivial corollary to a theorem of differential geometry or whatever. Also every story about Jim Simons has to have some smoking-related anecdotes: The son of a Boston shoe-factory executive, Mr. Simons developed an early love for mathematics and mischief. As a freshman at the Massachusetts Institute of Technology, he liked to fill water pistols with lighter fluid and use cigarette lighters to create homemade flame throwers, once sparking a bonfire in a dormitory bathroom. Bond funds If you run a bond mutual fund, the basic way to outperform your peers is to take on more credit risk: If they all buy AA-rated bonds, and you buy BBB-rated bonds, you will collect more yield and make more money for your investors. (Sometimes this will go the other way, but don't worry about that now!) The problem for you is that investors don't usually choose bond mutual funds based just on their returns; they also look at their risk, as measured by credit ratings. Some people prefer to invest in investment-grade bond funds, which are safer, rather than high-yield bond funds, which have higher yields. If you run an investment-grade bond fund, you can get higher yields than your peers by buying all BB-rated bonds, but you are really not supposed to do that. On the other hand here's a paper (free version here) titled "Don't Take Their Word For It: The Misclassification of Bond Mutual Funds," by Huaizhi Chen, Lauren Cohen and Umit Gurun: We provide evidence that mutual fund managers misclassify their holdings, and that these misclassifications have a real and significant impact on investor capital flows. In particular, we provide the first systematic study of bond funds' reported asset profiles to Morningstar against their actual portfolios. Many funds report more investment grade assets than are actually held in their portfolios, making these funds appear significantly less risky. This results in pervasive misclassifications across the universe of US fixed income mutual funds by Morningstar, who relies on these reported holdings. The problem is widespread- resulting in about 30% of funds being misclassified with safer profiles, when compared against their actual, publicly reported holdings. "Misclassified funds" – i.e., those that hold risky bonds, but claim to hold safer bonds– outperform the actual low-risk funds in their peer groups. "Misclassified funds" therefore receive higher Morningstar Ratings (significantly more Morningstar Stars) and higher investor flows due to this perceived outperformance. However, when we correctly classify them based on their actual risk, these funds are mediocre performers. Misreporting is stronger following several quarters of large negative returns, and it is strong at the fund family level. We report those families that have the highest percentage of misreported funds in the sample. So there is that! In an efficient market investors would look through the star ratings and categories, and just compare funds based on their actual risk and performance, but in the actual market … I mean, the ratings and categories exist, right? And they seem to drive investor flows. I do not propose to talk any more about this result because it is so aesthetically unappealing. Yes fine of course you can outperform your low-risk-bond-fund peers by just taking more risk and pretending that you don't, and apparently that is just allowed, but you shouldn't, it is cheating, and a surprisingly boring form of cheating. Some video content If you would like to listen to Steve Cohen's employees at Point72 Asset Management praise him, set to inspiring music and intercut with candid photos of him in quarter-zip sweaters, Point72 has helpfully put this advertisement on YouTube. Elsewhere, Bloomberg's Tracy Alloway went "down a rabbit hole of old trading videos" and has collected some classics, including the great 1987 Paul Tudor Jones documentary "Trader." Things happen Stanford Tops Ranking of U.S. B-Schools, Dartmouth Hurdles to Second Spot. Under Armour Is Subject of Federal Accounting Probes. McDonald's Fires CEO Steve Easterbrook Over Relationship With Employee. Berkshire Profit Hits a Record as Buffett's Cash Pile Grows. Abu Dhabi Plans Futures Trading for Its Main Oil Grade. Regulators press Deutsche Bank boss to drop dual roles. What Investors Can Learn From the Best Poker Players. JP Koning: "What is now apparent is that bitcoin was never a monetary phenomenon. No, bitcoin is a new sort of financial betting game." "We propose that when recipients open a gift from a friend, they like it less when the giver has wrapped it neatly as opposed to sloppily and we draw on expectation disconfirmation theory to explain the effect." Prince Charles Reportedly Caught Up in $136 Million Fake Art Hoax. CEO of Zimbabwean Crypto Exchange Loses Password to Bitcoin Cold Wallet. If you'd like to get Money Stuff in handy email form, right in your inbox, please subscribe at this link. Or you can subscribe to Money Stuff and other great Bloomberg newsletters here. Thanks! | 
⇉〖OpenLoad〗 2020 Superintelligence Película Completa En Línea released 2020. story: La vida de Carol Peters se trastorna cuando es selecci...
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