TEK2day

Operating at the Intersection of Technology and the Capital Markets

    Month: August 2022

    • Now May Be The Time for SSNC To Sell Itself

      SSNC shares are flat from August 2018 to August 2022. By year-end 2022, SS&C will have grown Adjusted EBITDA by more than 60% from year-end 2018 – no small feat (table below) – yet SSNC shares do not reflect this achievement. S&P Global (ticker: SPGI), FIS Inc. (ticker: FIS) and Fiserv (ticker: FISV), will need…

    • Prices Up, Personal Consumption Down

      The Federal Reserve Bank of Atlanta estimates Real GDP for Q3 at 1.4%. That is likely an optimistic outlook and 1% growth is certainly nothing to write home about. Get used to it however as Real GDP in the -1% to 1% range is likely our future for the next decade or two given elevated…

    • Quality of Management

      Talk about an overlooked investment decision-making variable. Nothing is more overlooked by investors than the Quality of Management. Define “quality” how you will. At present, Quality of Management seems to be an afterthought amongst many investors. Even peddlers of financial knowledge such as the CFA Institute (remind me what practical value the CFA institute provides?),…

    • Fix The Problem Rather Than Dance At The Edges

      What Fed Chair Powell spouts Friday in Jackson Hole WY will be meaningless in the long-term. The longer the Fed allows price inflation to persist, the longer the economy will remain in this stagflationary environment of high prices and low economic growth (if any real growth at all). It’s simple math. For every incremental dollar…

    • VC Culture Ruins Companies

      The grow-at-all-costs venture capital culture of the past 20-plus years ruins companies. How? Far too much focus is placed on revenue growth at the expense of sound operations and profitability. Too many venture-backed companies grow at a pace that far outstrips those companies’ ability to scale operations in a manner that supports growth. The result…

    • Apple’s Ad Business Is About To Get Bigger

      Apple’s (ticker: AAPL), advertising revenue playbook may look something like this two-step plan: 1.) Provide Apple customers with the ability to turn off targeted advertising via their iPhones (Apple’s ATT initiative HERE); 2.) Once the competition (Meta Platforms, Snap, Google and others), has been dealt a significant advertising revenue blow, subsequently insert Apple targeted ads…

    • August CPI To Remain Robust

      The Cleveland Fed’s current August year-over-year CPI estimate is 8.3%, down 0.2% from July’s 8.5% level. The bank estimates August Core CPI at 6.3%, up from July’s 5.9% level (while oil prices have fallen, food prices continue to rise). We quote the Cleveland Fed as the bank’s view on CPI and Core CPI is in-line…

    • Treasury Yields Up; Risk Assets Down

      Treasury Yields moved higher and therefore equity indices moved lower. The Fed is not done tightening, not even close. The Fed won’t tighten as much as it should, but it will tighten for much longer than many market participants expect – especially those who expect the Fed to reverse course and lower rates sometime between…

    • Amazon Ups Its M&A Effort

      Amazon (ticker: AMZN), has become more aggressive on the M&A front under new CEO Andy Jassy. We have seen this across the Entertainment, Health and Robotics sectors – each highly strategic in our view. Entertainment: Amazon recently closed its acquisition of MGM for $8.5 billion. The MGM acquisition onboards the James Bond franchise – a…

    • Banks Are Tightening Credit for Auto Loans

      The percentage of domestic banks that have tightened credit standards for auto loans has ticked up into positive territory (1.9%), for the first time since Q4 2020. This figure was negative from Q1 2021 through Q2 2022.