E A Heavy News Day And Crypto

Asset manager Guy Spier, now based in Switzerland, wrote about why he won't buy cryptocurrencies, a matter about which I agree with him. Like many classic investors, he says he doesn't understand crypto, but of course, he really does.

“The key point about crypto is that, unlike a farm or a building or some other tangible asset that can generate cash flows, Bitcoin does not and cannot generate cash flows. As such, it is not an asset that I can analyze, the reason I have not even considered an investment. I am less confident that its end price will be zero, although it might well be. Bitcoin stands at the center of the crypto-currency universe and there is an enormous amount of physical, computing infrastructure invested in it. So it might well succeed. But I still can not value it, so it is not an investable asset for me.

(In investing) “There is always one group or another getting rich at a faster rate than you. And that group tends to speak loudly and proudly about its superior insight and success. My approach is to simply be okay with that. I am delighted to have more people joining the ranks of the rich. What's important is that we can't allow envy or fear of missing out to knock us off our chosen path (which) may seem slower in the short term, but likely to be more resilient and profitable in the long term. Patience is likely to deliver much richer rewards.”

Guy runs Aquamarine Capital Management LLC which operates from Cambridge Mass for US investors and from Zurich for the rest of the world. My husband is one of the investors in the US version. Today is a heavy news day so enough about crypto.

Photo by Annie Spratt on Unsplash

*Banco Santander is up 3.14% after its Q1 results beat with net profit at euros 1.61 bn ($1.95 bn) up from euros 331 mn a year earlier when the first impact of the coronavirus hit. This handily beat the consensus forecast of euros 1.17 bn. Revenues dropped to euros 11.39 bn from prior year's euros 11.81 bn, but also beat the consensus, which was for euros 11.04 bn. The main reason profits rose was lower loan loss provisions, nearly halved to euros 1.99 bn. Europe and North America were up more than expected, “a positive surprise” according to UBS. Europe gains came from Britain and Portugal. Latin America overall did less well but Brazil also was up. Chair Ana Botin told the conference call that she is confident SAN will achieve its goal for the rest of this year of increasing profits, by cutting the cost of credit and improving its efficiency ratio. Q1 net interest income of €7.96B fell 0.8% Q/Q and 6.3% Y/Y.  Q1 underlying net operating profit of €6.27B increased 12% Q/Q and 0.8% Y/Y. Q1 efficiency ratio improved to 44.9% vs. 47.7% in Q4 2020 and 47.2% in Q1 2020. Group net fee income of€2.55B fell from €2.46B in Q4 and €2.85B a year ago; excluding the exchange rate impact, there was no material change from a year ago.

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