Investment
Calgary’s investment portfolio took 6.14% hit last year
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Last year was a tough one for anyone invested in the markets, and the City of Calgary also felt the pain with its investments.
Council’s audit committee heard the 2022 annual report on the City’s investment portfolio, which was worth $6.2 billion at the end of last year.
The portfolio did see an overall increase of $180 million dollars through 2022, but those gains were realized through government grants and revenues, according to audit committee chair Coun. Richard Pootmans.
“A lot of our revenue now is from sales of services and things like that,” said Pootmans, explaining where the portfolio saw its increase.
However, the portfolio’s total market investments went down by 6.14 per cent after fees.
“That’s happened to a number of funds,” said Pootmans. ”And what we do is we benchmark against other standards. No one’s particularly happy about it, but given the turmoil in the world, it is what it is.”
Against its benchmarks, the city was still up 32 basis points.
Portfolio equals only a year of operating funds in the context of operating, capital budgets
Rod Babineau, senior leader of investments at the City of Calgary, explained to council that the invasion of Ukraine in February 2022 caused turbulence in the markets.
“Then, with the rampant inflation that we saw in 2022, the central banks — both the Bank of Canada and the Federal Reserve — aggressively raised interest rates, which had an effect on our fixed-income portfolio,” said Babineau.
He said it amounted to a double whammy in which both fixed-income investments and equity investments took hits, when one class of investments often offsets the other.
Pootmans said while the portfolio is, in absolute terms, a significant sum of money, it equals only a year of operating funds in the context of the city’s operating and capital budgets.
He said there is no prevention pill to avoid losses such as this in some years.
“The fund is professionally and actively managed on a daily basis by a professional team at the city and advised by the best investment advisors in the country,” he said. “We’re always trying to achieve the maximum possible return. But of course, there’s risk involved and so there’s risk mitigation exercises as well.”
As part of that risk mitigation, the audit committee will be looking at the number of professionals outside the city which will be looking at the city’s investments. Pootmans said it’s not a reactive decision to these losses, adding they’re happy with the governance as it stands.
“I think there’s three or four outside professionals that serve on the advisory committee,” he said. “We’re looking at whether or not we have to augment our governance supervision or not. So that’s an active discussion that we’re debating and bringing to council in the near future.”
Investment
Everton search for investment to complete 777 deal – BBC.com
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2 hours ago
Everton are searching for third-party investment in order to push through a protracted takeover by 777 Partners.
The Miami-based firm agreed a deal to buy the Toffees from majority owner Farhad Moshiri in September, but are yet to gain approval from the Premier League.
On Monday, Bloomberg reported the club’s main financial adviser Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line.
BBC Sport has been told this is “standard practice contingency planning” and the process may identify other potential lenders to 777.
Sources close to British-Iranian businessman Moshiri have told BBC Sport they remain “working on completing the deal with 777”.
It is understood there are no other parties waiting in the wings to takeover should the takeover fall through and the focus is fully on 777.
The Americans have so far loaned £180m to Everton for day-to-day operational costs, which will be turned into equity once the deal is completed, but repaying money owed to MSP Sports Capital, whose deal collapsed in August, remains a stumbling block.
777 says it can stump up the £158m that is owed to MSP Sports Capital and once that is settled, it is felt the deal should be completed soon after.
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Investment
Warren Buffett Predicts 'Bad Ending' for Bitcoin — Is It a Doomed Investment? – Yahoo Finance
Currently sitting in sixth on Forbes’ Real-Time Billionaires List, Berkshire Hathaway co-founder, chairman and CEO Warren Buffett is a first-rate example of an investor who stuck to his core financial beliefs early in life to become not only a success but a once-in-a-lifetime inspiration to those who followed in his footsteps.
One of the most trusted investors for decades, the 93-year-old Buffett isn’t shy to pontificate on his investment philosophy, which is centered around value investing, buying stocks at less than their intrinsic value and holding them for the long term.
Read Next: Warren Buffett: 6 Best Pieces of Money Advice for the Middle Class
Find Out: 5 Genius Things All Wealthy People Do With Their Money
He’s also quite vocal on investments he deems worthless. And one of those is Bitcoin.
Buffett’s Take on Bitcoin
Over the past decade, it’s been clear that the crypto craze isn’t something Buffett wants any part of. He described Bitcoin as “probably rat poison squared” back in 2018.
“In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending,” Buffett said in 2018. And his stance hasn’t wavered since. According to Benzinga, Buffett believes that cryptocurrencies aren’t a viable or valuable investment.
“Now if you told me you own all of the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you one way or another. It isn’t going to do anything,” Buffett said at the Berkshire Hathaway annual shareholder meeting in 2022.
Although the Oracle of Omaha has his misgivings about the unpredictable investment, does that mean crypto is doomed as an investment? Not necessarily.
For You: 10 Valuable Stocks That Could Be the Next Apple or Amazon
Is Buffett Wrong About Bitcoin?
Bitcoin bulls argue that while it’s not government-issued, cryptocurrency is as fungible, divisible, secure and portable as fiat currency and gold. Because they occupy a digital space, cryptocurrencies are decentralized, scarce and durable. They can last as long as they can be stored.
Crypto boosters continue to predict massive growth in the coin’s value. Earlier this year, SkyBridge Capital founder and former White House director of communications Anthony Scaramucci told reporters that Bitcoin could exceed $170,000 by mid-2025, and Ark Invest CEO Cathie Wood predicts Bitcoin will hit $1.48 million by 2030, according to Fortune.
“They really don’t understand the concept and the whole history of money,” Scaramucci said of crypto critics like Buffett on a recent episode of Jason Raznick’s “The Raz Report.” Because we place a value on “traditional” currency, it is essentially worthless compared with the transparent and trustworthy digital Bitcoin, Scaramucci said.
Currently trading around the $66,000 mark, Bitcoin is up nearly 50% in 2024. This means it’s massively outperforming most indexes this year, including the S&P 500, which is up about 6% in 2024.
Although Berkshire Hathaway has invested heavily in Bitcoin-related Brazilian fintech company Nu Holdings, which has its own cryptocurrency called Nucoin, it’s possible Buffett will never come around fully to crypto, despite its recent surge in value. It’s contrary to the reliable investment strategy that has served him very well for decades.
“The urge to participate in something where it looks like easy money is a human instinct which has been unleashed,” Buffett said. “People love the idea of getting rich quick, and I don’t blame them … It’s so human, and once unleashed you can’t put it back in the bottle.”
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This article originally appeared on GOBankingRates.com: Warren Buffett Predicts ‘Bad Ending’ for Bitcoin — Is It a Doomed Investment?
Investment
Ping An Profit Falls as Market Declines Hurt Investment Returns – BNN Bloomberg
(Bloomberg) — Ping An Insurance (Group) Co.’s profit dropped 4.3% in the first quarter as stock-market declines and falling bond yields eroded investment returns.
Net income fell to 36.7 billion yuan ($5 billion) in the three months ended March 31, from 38.4 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Tuesday.
Operating profit, which strips out one-time items and short-term investment volatility, fell 3%.
China’s stock market rout at the start of the year and lower bond yields have weighed on insurers’ investment returns. They hurt profit even as more customers seek to buy savings products. Co-Chief Executive Officer Michael Guo said last month that profitability will recover after a 23% drop in net income last year.
“China’s macroeconomy gradually recovered in the first three months of 2024, but there were still challenges,” the company said in a statement, citing weak domestic demand. “In response to volatile capital markets and declining treasury yields, Ping An continued to pursue long-term returns through cycles via value investing.”
Read More: Ping An Trust Wins First Court Ruling Over Delayed Trust Product
Net investment yield of insurance funds dropped to 3%, the statement said, down from 3.1% a year earlier. Real estate investments fell to 4.2% of the 4.9 trillion yuan portfolio, from 4.6% the year earlier.
The CSI 300 Index slumped as much 7.3% this year through the start of February, before government intervention fueled a rally.
New business value, which gauges the profitability of new life policies sold, rose 21% in the first quarter. That followed a 36% jump last year as the company’s efforts to improve the productivity of life agents started to bear fruit. NBV per agent jumped 56% from a year earlier, the statement said.
Ping An shares rose 3% to HK$33.00 in Hong Kong trading on Tuesday, trimming the year’s loss to 6.7%.
(Updates with company comment in fifth paragraph, more details afterwards)
©2024 Bloomberg L.P.
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