Showing posts from May, 2017

Sunday Spectacle CCXXVIII

Decline in American C Corporations and the Rise of Pass-through Entities Catherine Mulbrandon from always does good work on economics and business graphics and this is another great one on American corporations and tax collections. It clearly shows something that is not widely understood by the public at large. Namely, the number of American C corporations--these are the ones that pay corporate taxes*--have declined significantly in the last few decades. The number of pass-through entities--these are ones that don't pay corporate taxes but instead the owner is taxed directly*--has risen. The biggest impact from all this is the reduction in corporate double-taxation (which benefits owners of such companies) and the decline in taxes being collected from corporations (which hurts government/society**). * I'm being very simplistic here and there is more complexity to the notion of how corporate taxes are paid ** This is only true if you believe go

Sold: Syngenta (SYT) -- Tender Offer Accepted

The Syngenta (SYT) buyout successfully closed about a week ago and ChemChina cashed out all shareholders that tendered the shares near the end of last week. If you haven't tendered your shares, you should do so immediately in the next round where they are accepting the shares; who knows how the untendered shares will be treated once the offer ends and you don't want to be in that situation (this is a Swiss company and is an ADR so squeeze-out rules may not be what a typical American or Canadian investor encounters). Overall, I'm very satisfied with this deal. The returns weren't that great--about 10% from the initial October 2016 position and about 3.6% from the April 2017 position--and the deal got delayed by about a quarter for regulatory reasons but it was a low-risk position and turned out as I was anticipating. This is the kind of risk arbitrage position I would like to take on. You learn a lot from deals like these. You don't get to see it reading this blo

Sunday Spectacle CCXXVII

Real Estate Contribution to Canadian Provincial GDP (source: " In Home Capital’s Mortgage Mess, Blame the ‘Unlucky’ Brokers " by Katia Dmitrieva, Bloomberg, May 23 2017)

Sunday Spectacle CCXXVI

Rise of Indexes vs Stocks Not sure what is counted as stocks in this graphic by Bloomberg but it's amazing that indexes outnumber stocks. That's beyond crazy. The number one function of stock markets, according to some theorists, is price discovery and wonder how much of that is lost due to the rise of indexes. Wonder how these indexes are going to behave during a market correction or a crash. source: " There Are Now More Indexes Than Stocks ," Bloomberg, May 12 2017

Sunday Spectacle CCXXV

American Business Creation/Termination I'm shocked to see such a low number of businesses (overall net) being created in the last decade. I don't know if the data is bad or something is being missed. This is probably good for existing companies but bad for society (since it implies less dynamic and less innovative economy). (source: 1Q 2017 GMO Quarterly Letter, GMO. URL direct link ; URL main website )