Invest For Kids Conference: Zell, Magnetar. BAM And MoreJacob Wolinsky
Notes from The Invest For Kids Conference with an all-star line up including Sam Zell among others. Pitches include LONG SRG, short DPZ, long HTZ, much more is coming so stay tuned. Below is an excerpt on Bitcoin and cryptos and Russia followed by more notes in PDF and more to come.
Is bitcoin a bubble? --> Has done some research into bubbles, you find patterns.. there's always the presence of leveraged speculators and they're financial incumbents. What you don't see here is those players. Nobody is long this stuff. It's young people. Overwhelming consensus we're in a bubble. Scale matters a lot in bubbles, in dot com there was 4.5T in market cap that went away. If it's a bubble it won't hurt wall street or mainstreet bc no one owns yet. Expect money to move here and we're early in the move. Bitcoin is closer to a Gold 2.0.
Blockchain --> a network of 100k's of computers, the infrastructure layer. There's multiple Blockchains. It's the worlds largest decentralized data base. This is larger than all of GOOG's data centers combined x 1000. At the infrastructure it's never been hacked, only at the second party level. Will bring new services to the world, in early days of the adoption of this technology. Not going away
Regulation --> Not illegal. The IRS will tax you on it as a digital commodity. Was misused by criminals. Regulators have given the rules of the road. We want to know the rules of the road to reduce uncertainty.
Sberbank - Largest banks in Russia. 55% share of mortgage market, 46% of retail deposits, 40% of retail loans. Has done a good job of putting technology to work. Has gotten through a massive hack a couple years ago. 25% dividend payout, priced at 1.3x tangible book, 5.7x 2018 EPS. Running at 20% ROE coming out of a recession. Massive consolidation going on in the market. Top three banks control 52% of assets in Russia. They are cutting costs now. Talking about increasing the payout ratio to 70-80%.. so yield to 7-8%. Free option on oil going higher. Earnings should grow at 10% given coming out of recession, w oil kicker. In 2011 this bank traded in the mid-teens, when commodities were booming in 2007 it was trading at 2.5x book. Could easily compound at 20% plus given a reflation cycle. Best proxy to play Russia.
Invest For Kids more notes below.
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