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The Long Investor
$PFE Earnings due on Weds before the market opens.
$22 would be the sweet spot to add
But has this beaten down stock got the ability to drop another 15% to get there?
Trying to catch the bottom is normally not a good idea. https://t.co/cN5K7uaQNa
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$PFE Earnings due on Weds before the market opens.
$22 would be the sweet spot to add
But has this beaten down stock got the ability to drop another 15% to get there?
Trying to catch the bottom is normally not a good idea. https://t.co/cN5K7uaQNa
$PFE bounced within the 0. 618 Fib - 0.78 Fib in 2009
It is showing signs of bouncing in this range now too.
It may be the ultimate cyclical stock and a 5.95% dividend too.
Very attractive long term hold. https://t.co/2cD5yeGfnl tweet
The Long Investor
Wall Street does not inform retail investors when they expect a correction.
People will generally stop buying, there will be less trades and many leave investing or trading for good and do not return....they'll make one sell and exit.
This is not how Wall Street makes money
When have you heard Wall Street say, be patient, wait, control your triggers....instead they are exploring 24/7 trading instead.
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Wall Street does not inform retail investors when they expect a correction.
People will generally stop buying, there will be less trades and many leave investing or trading for good and do not return....they'll make one sell and exit.
This is not how Wall Street makes money
When have you heard Wall Street say, be patient, wait, control your triggers....instead they are exploring 24/7 trading instead.
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Offshore
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Giuliano
In their last letter, $BUR made clear what the path forward is.
This must not be overlooked, for it dramatically changes $BUR economics.
In 2008, Chris noticed demand for funding litigation claims and thought he should take his hobby seriously. Alongside Jonathan Molot, both decided to raise institutional capital to address this unmet need. Burford raised 130M dollars in its IPO. Demand was so strong that Chris and John did a follow up in 2010. More equity was sold on a secondary offering for an aggregate of 175M dollars. Ever since, no more capital has been raised via this avenue. Rather, the team waited for their investments to yield results for writing more business.
In 2014, Burford started issuing debt in the UK market, though moderately. Two years later, management acquired GKC, an investment management firm. The purpose of this acquisition was to invest in other verticals legal finance offers that they couldn’t do otherwise, for capital was a major constraint. Managing private funds offers flexibility and capacity for rapidly raising capital. This way, Burford grew its group-wide business to over 7bn dollars.
However, private funds’ commitments were taking share of the overall business. In 2019, out of 1.6 billion in commitments, only 726M were Burford-only. The former had quadrupled while the latter didn’t even double in the prior 3 years. Management mentions not to have liked this dynamic as shareholders themselves. Managing private funds ended up being a costly way to grow. Indirectly, it capped the company’s capacity to write new business and was poised to continue on such a path.
Having passed the phase and counting Burford with more resources now, it would’ve been a mistake to keep running the business in this manner.
In consequence, management focused on accessing the US market. In 2020, they registered with the SEC and added $BUR listing to the NYSE. This allowed the company to tap into the US debt market. Thereafter, Burford issued debt on four separate occasions.
This ought not to be overlooked, for it dramatically changes Burford’s economics:
“This cost of capital is game-changing for us. With 2/20 fund capital, we pay around 80% of investment profits to our fund investors for the use of their capital. Now, given the average 7% interest rate on our debt and the average 2.5-year duration of our matters, we are instead paying only a total of around 20% of investment profits for the debt, fundamentally changing the economics for the balance sheet.”
The team has on getting capital from this cheaper source and reducing their reliance on private funds. Their 2/20 structure turned out to be highly disadvantageous, considering the team’s skill. In fact, BOF-C is generating 88% of asset management income, although the portfolio is smaller than that of the others. It is to be observed that BOF-C fee structure differs from the rest of partnerships.
Burford closed the Strategic Value Fund and decided not to immediately replace Burford Opportunity Fund. New complex strategies investments will be carried out with capital from the balance sheet, if sound investments are found. BOF-C agreement was renewed last year. Finally, another Advantage Fund will not be immediately raised after expiry. To the extent lower-risk legal finance investments are made, they’ll be done so with balance sheet capital.
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In their last letter, $BUR made clear what the path forward is.
This must not be overlooked, for it dramatically changes $BUR economics.
In 2008, Chris noticed demand for funding litigation claims and thought he should take his hobby seriously. Alongside Jonathan Molot, both decided to raise institutional capital to address this unmet need. Burford raised 130M dollars in its IPO. Demand was so strong that Chris and John did a follow up in 2010. More equity was sold on a secondary offering for an aggregate of 175M dollars. Ever since, no more capital has been raised via this avenue. Rather, the team waited for their investments to yield results for writing more business.
In 2014, Burford started issuing debt in the UK market, though moderately. Two years later, management acquired GKC, an investment management firm. The purpose of this acquisition was to invest in other verticals legal finance offers that they couldn’t do otherwise, for capital was a major constraint. Managing private funds offers flexibility and capacity for rapidly raising capital. This way, Burford grew its group-wide business to over 7bn dollars.
However, private funds’ commitments were taking share of the overall business. In 2019, out of 1.6 billion in commitments, only 726M were Burford-only. The former had quadrupled while the latter didn’t even double in the prior 3 years. Management mentions not to have liked this dynamic as shareholders themselves. Managing private funds ended up being a costly way to grow. Indirectly, it capped the company’s capacity to write new business and was poised to continue on such a path.
Having passed the phase and counting Burford with more resources now, it would’ve been a mistake to keep running the business in this manner.
In consequence, management focused on accessing the US market. In 2020, they registered with the SEC and added $BUR listing to the NYSE. This allowed the company to tap into the US debt market. Thereafter, Burford issued debt on four separate occasions.
This ought not to be overlooked, for it dramatically changes Burford’s economics:
“This cost of capital is game-changing for us. With 2/20 fund capital, we pay around 80% of investment profits to our fund investors for the use of their capital. Now, given the average 7% interest rate on our debt and the average 2.5-year duration of our matters, we are instead paying only a total of around 20% of investment profits for the debt, fundamentally changing the economics for the balance sheet.”
The team has on getting capital from this cheaper source and reducing their reliance on private funds. Their 2/20 structure turned out to be highly disadvantageous, considering the team’s skill. In fact, BOF-C is generating 88% of asset management income, although the portfolio is smaller than that of the others. It is to be observed that BOF-C fee structure differs from the rest of partnerships.
Burford closed the Strategic Value Fund and decided not to immediately replace Burford Opportunity Fund. New complex strategies investments will be carried out with capital from the balance sheet, if sound investments are found. BOF-C agreement was renewed last year. Finally, another Advantage Fund will not be immediately raised after expiry. To the extent lower-risk legal finance investments are made, they’ll be done so with balance sheet capital.
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The Long Investor
$QQQ the 24 Year Resistance line has been tested and rejected. https://t.co/jNRYOZsXEH
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$QQQ the 24 Year Resistance line has been tested and rejected. https://t.co/jNRYOZsXEH
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Offshore
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Giuliano
Molot saw it with incredible clarity 15 years ago. $BUR
I suspect Zeckhauser would view the endeavor as an operation in a UU world. https://t.co/S2WLfXuCAd
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Molot saw it with incredible clarity 15 years ago. $BUR
I suspect Zeckhauser would view the endeavor as an operation in a UU world. https://t.co/S2WLfXuCAd
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The Long Investor
RT @CnEVPost: China offers incentives to boost old car replacements, analysts expect up to 2 million additional sales
https://t.co/d6bEGh2I4J
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RT @CnEVPost: China offers incentives to boost old car replacements, analysts expect up to 2 million additional sales
https://t.co/d6bEGh2I4J
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The Long Investor
RT @Barchart: Stock Market hits highest market concentration since the Great Depression 🚨 Probably Fine https://t.co/wBILUAl2cX
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RT @Barchart: Stock Market hits highest market concentration since the Great Depression 🚨 Probably Fine https://t.co/wBILUAl2cX
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