Friday, 1 August 2014

Small things 2

1. BBY Disruptive Lunch

Three companies presented yesterday. The enthusiasm these companies have is, as always reinvigorating to aged investment bankers like myself:

Airtasker - Employment facilitator for small jobs. I thought of this one like a concierge service.

InStitchu - Custom tailoring for men, but with some interesting technological twists.

Qwilr - A different approach to documentation. Active feedback with some remarkable capabilities. Be very afraid if you're a mail-shot freak.

I'll these up over the weekend in a more comprehensive form and give you my opinion on the chances of success.

2. Those crazy guys from Credit Suisse . . .

I like Credit Suisse as company, whether it's the old First Boston guys, the private bankers or the various local stockbroking groups that have over the years been melded into the larger entity, I like them all. Yesterday the CS troops left me smiling as they clearly haven't seen my blog or they'd know they just added a great example of the 1st of the Investment Banker Cyclist rules for derivatives trading:

A product class of derivatives will see returns decrease in proportion to the increase in barrier conditions available to investors

Credit Suisse launched an investment product that they call oil express certificates. Essentially they're just another structured product that various qualified accounts will be offered that are linked to the performance of WTI front-month future over the next 8 months. Essentially you've sold a series of 1 month puts in exchange for a coupon dependent on WTI. The coupons are cumulative so that if the WTI never breached the downside barriers (which change periodically) you get 6.68% plus your face value back.  Without going into it too much the monthly puts step down 1% each period. There's a knock-out at 93% . . . essentially if thats breached and never recovers you start losing money one for one. 

I don't have the term sheet for this one or I'd happily simulate the payouts. I bet CS is short a lot of downside puts in the WTI market and this is the way of covering their risk. Good for them and somewhat good for you so long as WTI doesn't take a hit. Nothing is foolproof and nothing is for free. Investors be warned.

3. Argentina officially defaults

Well it happened. The hand wringing has commenced. For mine it comes down to nations understanding their obligations to behave responsibly. Argentina has for years thumbed it's nose at investors and allowed corruption whether it be a military junta, Peronists or now the Kirchners. It's messy, but as I said in this blog you'll now have to wait until 1 Jan 2015 when the RUFO expires for some serious negotiations.

4. Strava was down!

Help I'm a Strava junkie and for 24 terrifying hours this week your uploads weren't immediately available. I put every workout I do on Strava and back them up at Garmin. It was funny seeing the "Twitter-verse" light-up complaining about it.

Strava stats are now up-to-date

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