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Blackstone’s Gray Predicts UK to Beat US for Investment in 2023

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(Bloomberg) — The UK could outperform the US as an investment destination in 2023 because of the pound’s decline and the greater returns that companies offer, according to Blackstone Inc.’s Jonathan Gray.

“Since Brexit, the UK lost its halo a little bit and again this summer with some of the policy decisions, but I think that’s been course corrected in a meaningful way,” Gray, president and chief operating officer at the world’s largest alternative asset manager, said in an interview with Bloomberg. “I think the Sunak government is making very good choices that will ultimately attract capital.”

Data out Friday indicated the UK economy may avoid a recession for now as consumers continued spending through the steepest cost increases in four decades. Globally, inflation remains a key challenge for companies and investors, but is starting to decelerate, Gray said.

“I think the sentiment around the UK has gotten way too negative. And yes, it faces challenges, but when you look at it relative to other places in the world to deploy capital, the UK seems really attractive,” Gray said. This is not the first time Gray has made a case for the UK, where his firm is expanding its European headquarters with a new base in London.

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Blackstone is beginning to see job vacancies at its portfolio companies come down, as well as easing pressure on revenue and wages, he said. Though for markets globally this year, Gray said “what we have ahead of us is probably still a fair amount of volatility until central banks pause on the rate increases.”

Monetary tightening is affecting corporate dealmaking as well, with investors including Blackstone struggling to find financing for leveraged buyouts. The firm had to bypass investment banks and turn to private credit lenders to purchase a unit of Emerson Electric Co., Bloomberg reported in November.

Blackstone, which did its most successful transaction just before the financial crisis with the buyout of Hilton Worldwide Holdings Inc., remains optimistic about deals in the coming year. “Some of the public stocks have traded off a lot, particularly in sectors that we like,” Gray said. “You will see privatizations happen and one of the great things about us is we can buy large-scale things and we can commit a lot of equity.”

The firm has $180 billion of dry powder across its different businesses and “this will be a favorable time to deploy capital,” Gray said.

–With assistance from Ben Stupples and Neil Callanan.

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Zacks Investment Ideas feature highlights: Meta Platforms, Alphabet, Snap, Oracle and Global Social Media ETF – Yahoo Finance

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For Immediate Release

Chicago, IL – January 30, 2023 – Today, Zacks Investment Ideas feature highlights Meta Platforms META, Alphabet GOOGL, Snap Inc SNAP, Oracle ORCL and Global Social Media ETF SOCL.

TikTok Ban Coming: 3 Stocks That Would Benefit

The Social Media Landscape Is Evolving

The social media landscape has changed dramatically over the past few years with the rapid ascent of the personalized video platform app TikTok. Despite TikTok’s rapid rise, Meta Platforms and Alphabet are still the dominant players. In terms of monthly active users, three Meta platforms make up the top four rankings globally: Facebook (#1), Whatsapp (#3), and Instagram (#4).

Alphabet holds the second spot with its video platform Youtube and TikTok is ranked #6. Even with the continued dominance of existing players like META and GOOGL, stock performance has been lackluster in recent years. The Global Social Media ETF is the most followed social media ETF (note that it does not include TikTok).

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What has Led to the Underperformance of Existing Players?

For one, Meta CEO Mark Zuckerberg is paying less attention to his lucrative social media business and instead investing valuable resources in what he sees as the future – the metaverse. Approximately 20% of Meta’s current investments are aimed at this project. While the bold bet has not panned out for Zuckerberg and Meta yet, he plans to stay the course.

The other major factor leading to the underperformance in domestic social media platforms such as Instagram, Youtube, and Snap Inc’s Snap Chat platform is TikTok’s success.

Chinese-based ByteDance launched TikTok in the United States in 2016, and since then, the platform has dominated. The app, which allows users to create and modify short-form videos, has caught on, especially with the younger generation. TikTok’s competitors have noticed. To win eyes back, Instagram has launched “Reels” and Youtube has created “Shorts” –aimed at users who prefer short, customizable videos like Tik Tok.

SnapChat, already in the short video space, has suffered the most from TikTok’s rise.

National Security Concerns

Though TikTok is one of the dominant global social media players and shows little signs of slowing growth – other factors may play a significant role in the social media space moving forward. Concerns are growing that ByteDance is collecting unnecessary personal data on its users and possibly supplying it to the Chinese government (the biggest rival of the U.S.).

Former President Donald Trump attempted to ban TikTok in 2020, but ultimately the app was able to remain active. The Biden administration struck down the potential Trump ban on TikTok but ordered a national security investigation.

A Potential Catalyst for Domestic Social Media Platforms

Even with the failed TikTok bans of the past, momentum is growing for a new possible attempted ban. In the past year, FBI director Christopher Wray, FCC Commissioner Brendan Carr, and Senator Josh Hawley have called for a domestic TikTok ban. Meanwhile, several U.S. colleges have implemented their own bans (via WiFi) amid security concerns.

Tuesday, Josh Hawley announced he would introduce a bill to ban the app. Investors who follow the social media space should keep a close eye on how the efforts to ban the app play out. If the app is ultimately banned, SNAP will benefit the most, along with META and GOOGL. Software giant Oracle, which supports TikTok via its cloud platform, would stand to lose.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Oracle Corporation (ORCL) : Free Stock Analysis Report

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Global X Social Media ETF (SOCL): ETF Research Reports

Snap Inc. (SNAP) : Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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ChatGPT explains Warren Buffett's investing strategy, names stock picks – Markets Insider

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  • Insider’s Phil Rosen asked ChatGPT to explain Warren Buffett’s investing strategy.
  • The viral language tool shared how value investing has given Buffett an edge, and broke down his best investment decision.
  • The bot also named two potential stocks that would align with Buffett’s strategy. 

ChatGPT, whose parent is getting a $10 billion investment from Microsoft, has shown its competence in writing stock stories, dating-app messages, and even an email announcing layoffs

As it turns out, OpenAI’s viral language tool fared well in its breakdown of Warren Buffett’s investing approach, too. 

I asked ChatGPT to explain the Oracle of Omaha’s most important strategy that helped him reach his legendary billionaire status, and within seconds the bot spat out an analysis of value investing.

“Warren Buffett’s most important investing strategy is value investing, which involves identifying undervalued companies with strong potential for growth and a durable competitive advantage, and then holding onto those investments for the long-term,” ChatGPT said. “He also follows a principle of investing in businesses he understands, with a focus on companies with predictable earnings and a strong track record of increasing profits.”

That said, when I inquired what Buffett’s most important decision has been in his career, ChatGPT pointed to his investment in Berkshire Hathaway decades ago. Buffett “transformed it into a holding company and used it as a vehicle to make a series of successful investments and acquisitions,” the bot said.

ChatGPT’s stock picks for Buffett

To fully carry out the interrogation, I tasked ChatGPT with naming stocks that Buffett could add to his portfolio. 

While the bot doesn’t have access to real-time markets data and its knowledge only goes up to 2021, it had plenty of historical intel to work with, given Buffett’s long career. 

It named PepsiCo and Unilever as stocks that would make sense for Buffett to invest in, given they’re consumer goods companies with strong brand recognition and consistent revenue growth. Buffett famously consumes five cans of Coke a day, but he had been a Pepsi drinker for nearly 50 years before that.

As for Unilever, Buffett had come close to sealing a deal on the company along with Kraft Heinz in 2017, but it eventually fell through.

ChatGPT also named Amazon, which Buffett already owns, and Microsoft, which Buffett owns an indirect stake in via ownership of New England Asset Management, as two examples of blue-chip companies with a track record of innovation.

Then it listed Johnson & Johnson and Pfizer — Buffett owns the former, and has previously owned the latter — as two stable healthcare options that would fit Buffett’s strategy.

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Are crypto banks saving rates safe?

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crypto banks

There is a lot of interest in crypto banks like Nexo and Blockfi. Savings accounts on the high street, where interest rates are sub-1%, can offer an annual percentage yield of up to 12%. There are some important things you need to know before you start saving in crypto. You must understand what interest is being offered by these banks.

Many crypto banks do not offer customers the option to save in stablecoins, such as tether or USDC, which they trade on a one for another basis with the US dollar, aside from Nexo, which offers up to 12% interest on pounds, US dollars, and euros.

Stablecoins are where they charge high the most, such as Tether and USDC, where BlockFi pays 8.6% on USDC, 9.3% on Tether, and 5% on bitcoin and Nexo pays up to 12% on USDC and Tether but 8% on bitcoin. This means you could convert $1000 (£720) into USDC1000, hold it in a BlockFi account for one year, then withdraw $1,086.

You need to transfer your money into this form first since major crypto banks deal only in cryptocurrencies. You can do this through an exchange like Binance or Coinbase or through crypto banks that offer limited versions of this service. For example, anyone can send dollars to BlockFi, which will convert them into stablecoins known as Gemini USD, which has an 8.6% rate of interest.

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A majority of crypto banks offer the option of converting your Gemini to bitcoins on their platform. Although there are no fees associated with this service, the rates aren’t the most competitive. According to BlockFi, its price may be 1% above the regular price when purchasing crypto. Investing in cryptocurrencies lowers interest rates as you hold them longer. For example, BlockFi only charges 5% on bitcoin deposits of up to 0.5 bitcoins. Once you deposit more, the rate drops to 2%, and finally to 0.5%.

Furthermore, users can boost their chances of enjoying top quality trades by embracing the right trading tools. Bit Index AI has enjoyed much popularity as a tool that can help you trade like a pro to achieve quality trades.

 

In addition to offering interest payments on their cryptocurrency, certain crypto banks offer the best rates. Nexo, for instance, offers 12% APR on USDC and Tether, but only for people who receive payments in Nexo tokens. Unlike stablecoins, Nexo tokens fluctuate in value. The interest rate for USDC and Tether payments is 10%. There is also no guarantee of interest rates. So, when you quote an annual rate, keep in mind that it could fluctuate anytime

 

Business Model

However, the rates are extremely high. So, what are the secrets of crypto banks? At a crypto bank, capital is lent out at a higher rate than the interest rate it pays its depositors. There are two ways that crypto banks protect themselves.

First, they lend out less than the amount they hold in deposits. Then, by requiring that borrowers place collateral on their loans. Calculating the required collateral needed for a loan involves calculating loan-to-value (LTV). So, when BlockFi reaches an 80% LTV, it has the right to liquidate collateral. The current rate for borrowing $5000 from BlockFi is BTC0.25at the value of $9448 at the time of writing.

If the value of bitcoin dropped to $6250, the bank would sell some of your collateral to raise the LTV.

 

Bottom Line

This type of business model can generate significant revenues in good times. Although regular banks could give high rates on savings, they tend to use some of those savings to make their rates more competitive.

It is not clear the direction crypto banks would take if borrowing dried up or there was either a sudden or prolonged crash in the market. A scenario such as these, however unlikely, would mean that your savings in crypto are not insured, unlike those in a high street bank.

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