Mar 3, 2014 17:53 UTC

Inverses Buffett and Icahn correlate many ways too

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By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Warren Buffett and Carl Icahn are inverse investors who correlate in more ways than one. In just-released letters to shareholders, the two billionaires tout their returns and approaches to deploying capital. While their styles couldn’t be more different, both beat the market by betting on America, playing hardball and trading on personal brands. Yet their greatest common bond is that neither can be easily replicated.

Mar 3, 2014 16:24 UTC

Ukraine crisis dents EU banks’ recovery plans

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By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Crisis in Ukraine is denting European banks’ recovery strategies. Barring Austria’s Raiffeisen, few Western groups have meaningful exposure to the country. But big lenders such as Societe Generale, Commerzbank, UniCredit and KBC were hoping lucrative, fast-growing markets in central and Eastern Europe would counter humdrum returns at home. With Russia squaring off against the West, the economic, currency, and political risks of this approach are all too apparent.

Mar 3, 2014 16:18 UTC

West can hurt Russia – if there’s a will

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By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Western powers seem to consider that Crimea is gone, that Russia is there to stay, and that their main option is to increase the “cost” – Barack Obama’s word – that Vladimir Putin must pay for his actions in the Ukrainian territory.

COMMENT

Trade is a 2 way process that benefits both parties. The West cannot hurt Russia unless USA exports more energy to Europe.

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Feb 28, 2014 18:28 UTC

Citi’s Mexico fraud besmirches industry further

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By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Not for the first time, Citigroup has stepped into a mess – and by extension besmirched the financial industry. Not that Citi committed a crime, or colluded to set foreign exchange rates or Libor prices, say. Rather the bank is the victim of fraud in Mexico that could cost it much as $400 million. The problem is that the lender has been cheated out of the cash in one of the most basic businesses in banking. That should worry Citi’s rivals, too.

Feb 28, 2014 16:44 UTC

Dan Loeb bids against himself at Sotheby’s

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By Richard Beales
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Dan Loeb seems to be bidding against himself at Sotheby’s. The Third Point hedge fund activist surprised the auctioneer by nominating three directors to run against the incumbents, even after the firm offered him one uncontested board seat and even acted on some of his gripes.

Feb 28, 2014 16:15 UTC

Blackstone bets Versace can go up a few sizes

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By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Blackstone is betting Versace can go up a few sizes. The U.S. private equity firm has bought 20 percent of the Italian fashion house at a 1 billion-euro valuation. This is a wager that Versace’s lightweight business can grow to fit its extra-large brand.

Feb 28, 2014 06:04 UTC

Macau casino stocks are priced for perfection

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By Ethan Bilby

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

Macau’s casino stocks are priced for perfection. A building boom will expand capacity in China’s gambling enclave. But to justify their valuations, gaming operators not only need to attract more punters but encourage them to spend more at the tables. Any slowdown or increased competition could test excited multiples.

Feb 27, 2014 19:28 UTC

PayPal has outgrown eBay’s warm embrace

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

PayPal has outgrown the warm embrace of its parent eBay. The online merchant’s ownership provided rich soil for the payments system to thrive. But PayPal is now mature enough to grow faster on its own. Activist Carl Icahn has a point when he says splitting eBay in two – as first suggested by Breakingviews in 2008 – would make investors some 15 percent richer.

Feb 27, 2014 15:19 UTC

Investors take note: low inflation isn’t deflation

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The theory says that bonds benefit and stocks suffer when there’s deflation. In the real world, disinflation has yet to turn into persistent price declines. Sluggish price rises are no bar to equities doing quite well, just so long as there is growth. It’s too early to write off stocks.

Feb 27, 2014 06:56 UTC

SoftBank’s Alibaba stake both blessing and burden

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

SoftBank’s investment in Alibaba must be one of the most successful of all time. Billionaire chief Masayoshi Son injected just $20 million into the Chinese e-commerce giant in 2000. Today, the 36.7 percent shareholding accounts for a large chunk of Japanese group’s market value. As Alibaba heads toward an initial public offering, however, Son’s investment blessing may become a burden.

COMMENT

Not sure I buy your conclusion, but a great analysis up to that point. While you are right of course that when Alibaba goes public, investors can simply go there. But surely that doesn’t mean that the valuation of Softbank, affected as it is by Alibaba, will decrease?
If anything, it should increase since the valuation will be straightforward.

As of now there are widely varying estimates of Alibaba’s value, including yours. That uncertainty will no longer be present once the IPO is filed. On top of that, there is a good chance that Alibaba shares will rocket up after listing, since interest in it as well as projections of its future value, are huge. All of this should allow Softbank to lessen that 16% conglomerate discount.

We shall see.

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