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Can Reddit’s silver “apes” beat the market?

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Kerry Kraker, 56, has worked in kitchens all his life. Since March he’s spent around $100 a week – half his spare cash – on silver coins. He’s part of a growing social media movement who say they are buying bars and coins for protection from a coming age of inflation.

Thanks to a community of like-minded silver ‘stackers’ gathering on social-media platform Reddit Inc., Seattle-based Kraker says he also feels empowered.

“They are so encouraging and so convinced in the changes they can cause,” Kraker, who lost his home in the financial crisis, told Reuters.

Inspired by Reddit forum WallStreetBets, some of the 122,000-strong community hope to corner the market and bring down what they say is an unjust banking system.

Market professionals say that is unlikely to succeed – there is plenty of silver, and central bankers in the United States and Europe expect inflation to stay in low single-digits.

But bankers aren’t getting through to this group.

“There’s a bit of anger, like ‘fuck the system.’ If there’s a back door to wealth, I might take that door because the front door is closed,” said Kraker. “The bankers and others have basically shut that door for everyone who is not themselves.”

The core of the movement is a Reddit community called Wall Street Silver, formed in January at the time WallStreetBets was marshalling an uprising of ordinary people against the financial elites, through coordinated buying of company shares.

Reuters spoke to more than 20 members, who call themselves “silverbacks” and “apes,” have a home page featuring an image of an army of primates on the march from the “Planet of the Apes” movie, and say things like “Ape like shiny.” They organise “raids” – days on which everyone buys together.

The group’s founder, Ivan Bayoukhi, is a 24-year old former car salesman living with his parents in Alberta, Canada. “NOW IS THE TIME TO WAKE UP AND TAKE THE POWER BACK IN THE HANDS OF THE PEOPLE,” says https://www.reddit.com/r/Wallstreetsilver/comments/mlpxev/now_is_the_time_to_wake_up_and_take_the_power one of his characteristic posts.

Silver costs around $26 an ounce. Stackers think the price will rise as inflation erodes the value of currencies, demand for silver rises, and supplies run short. Some say that by buying up bars and coins, they can jack up prices by 100% or even 1,000%, to the point where they can call the shots against the so-called bullion banks, the large financial institutions which lead trade in precious metals.

A March post Our time draws nigh…keep stacking and we will win the day! : Wallstreetsilver pictured silver coins laid out to spell a message to the head of JPMorgan Chase & Co, a U.S. investment bank which dominates the bullion trade: “KISS MY ASS JAMIE DIMON.” JPMorgan declined to comment.

“In a year or two we will have millions of people in the movement,” Bayoukhi told Reuters. “And then it will be over for the bullion banks.”

“CORNER THE MARKET”

Prices of silver and gold, which are traditionally seen as safe stores of wealth, have risen since 2019: Gold is up around 40% and silver around 70% since then. The silver stackers are joining millions worldwide who believe currencies are vulnerable – a fear that has grown as governments borrowed and printed money in the pandemic.

“It scares me every day when this bomb will burst,” said Tim Hack, a 23-year-old stacker in Germany. “Silver and gold really have intrinsic physical value that you can even feel when you hold it in your hand.”

Posters on Reddit joined the silver fray on Jan. 27, when posts appeared on WallStreetBets saying that if enough people bought the metal, they could push prices to the moon.

“Corner the market,” said one.

Adding to the impetus was an argument put forward on Reddit that big banks trade huge quantities of paper contracts for silver that they don’t have in their possession, keeping prices lower than they should be.

In some ways, that’s correct.

Contracts representing around 800 million ounces of silver are active in the New York futures market alone – more than twice the amount the exchange says is in its registered vaults, not all of which is available for delivery. Much of the silver that banks buy and sell in London, another big trading hub, is borrowed, bankers and traders say.

If every professional who owns silver on paper called in their dues at once, there wouldn’t be enough metal on hand, they agree. The system works because most people with contracts don’t want actual metal, which they’d have to pay to store and insure. They are speculators, or miners and jewellers, hedging their risks.

After the posts on WallStreetBets, around $3 billion rushed into a fund run by asset managers Blackrock that stores silver for investors. Blackrock said it added more than 100 million (adds dropped word) ounces of silver to its stockpile in three days. Silver’s wholesale price jumped nearly 20%.

Much of the silver stored for Blackrock is in London. The London Bullion Market Association (LBMA), an industry body, later said that there had been “concerns that London would run out of silver.”

Blackrock told Reuters it did not track where the money had come from.

The Reddit group’s founder Bayoukhi said he watched with growing excitement, turned to his father and said, “Why don’t I start a Wall Street silver community?”

“FAMILY FOREVER”

There’s also truth in Redditors’ claims that big players can influence the silver market. One trader tactic is spoofing – sending out fake buy or sell orders to shift prices before completing the real trade.

In 2020, JPMorgan paid $920 million to U.S. authorities to settle charges that its staff sent “hundreds of thousands” of fake orders into precious metals and Treasury markets. The bank said at the time that the people responsible had left and it had improved its compliance systems. It declined further comment for this story.

But the impact of spoofing lasts only seconds or minutes, said Ross Norman, a London-based former precious metals trader.

The January squeeze lasted three days. Then WallStreetBets returned its focus to stock markets; silver calmed. Since early February, the price of silver has fallen by a dollar.

Undeterred, Wall Street Silver issues a deluge of tips, analysis, memes, photos and encouragement. It is only Reddit’s 3,783rd biggest community, but it is frequently in the top 20 for volume of posts per day.

When a new member posts, Bayoukhi often responds https://www.reddit.com/r/Wallstreetsilver/comments/o92fmi/silver_is_a_national_security_commodity_covertly saying, “You are now family forever.”

“HELL OF A TIME”

Reddit buyers sit at the end of a fat silver pipeline. Only about a quarter of the 1 billion ounces or so that are produced each year is used to manufacture the bars and coins that most of them are buying, analysts say. Most of the rest is used for jewellery and in industrial applications.

Michael Mesaric, who runs the world’s largest gold and silver refiner – Valcambi SA, in Switzerland – says the 1,000 ounce bars of silver used in the wholesale market are plentiful: For small investors to think they can corner the market is “entirely wrong.”

“They can engineer a squeeze on products,” he said. “But silver in total? They’ll have a hell of a time.”

Investors will stockpile a lot of silver this year, but less than in 2020, according to consultants Metals Focus. Demand in the West is strong, but in India, one of the biggest silver consuming countries, the pandemic is reducing people’s ability to buy, they say.

Funds like Blackrock’s stockpiled 331 million ounces – the most ever – in 2020, Metals Focus said in a report for the Silver Institute; bar and coin buyers took home 200 million ounces more. This year, the consultancy expects funds to hoard 150 million ounces – the second highest level ever – and bar and coin buyers 253 million ounces.

Silver coins and bars can certainly hold their value. Higher inflation should lift prices, as will rising demand from makers of goods like electronics and solar panels, said Rhona O’Connell, an analyst at traders and brokers StoneX.

But she, and others at companies that trade the metal, think predictions of $1,000 an ounce are out of this world.

Of 39 analysts and traders polled by Reuters in April, only seven thought silver prices would average $30 or more in 2022. The highest average that they forecast was $44.

Redditors are unmoved. Kraker, the restaurant worker, has begun reading obsessively about inflation, money supply and other economic data. “There is a monster around the corner,” he said. “I’m trying to sharpen my stick.”

(Peter Hobson reported from London; Edited by Veronica Brown and Sara Ledwith)

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Montreal investment fund sued over use of founder's great-great-grandfather's name – Coast Reporter

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MONTREAL — Brendan Holt Dunn said he wanted to invoke the legacy of his great-great-grandfather, pioneering Quebec industrialist Sir Herbert Holt, in the name of his Montreal-based venture capital fund.

Now, he may have to go to court to keep the name.

His fund, The Holt Xchange, which invests in early stage financial technology startups, is being sued by international bank Credit Suisse for trademark violation. 

In a statement of claim filed last year with Federal Court in Edmonton, Credit Suisse subsidiary CSFB HOLT said it owns the right to use the brand “HOLT” when offering financial goods and services in Canada and that the branding and offerings of the Montreal venture capital fund — known as the Holt Accelerator when the lawsuit was filed — is too similar.

The bank, which is seeking at least $100,000 in damages, argues that similarity “will cause confusion amongst Canadian consumers” and reduce the value and reputation of its trademark.

Dunn said he doesn’t think there’s a risk of confusion.

“We’re in different areas, the financial sector as a whole is very broad,” he said, adding that he’d never heard of Credit Suisse’s HOLT brand before being sued.

“I think what they’re worried about is that our name, our family’s name is better known than them in Canada,” he said in an interview Wednesday. “There is absolutely no overlap.”

Elisabeth Laett, managing partner at The Holt Xchange, said the decision to use the Holt family name when the fund launched in 2018 was a reference to the history of Montreal’s financial sector and the fund’s ambitions to help make Quebec a hub for a new generation of financial technology companies.

“We were the financial hub of Canada, in Montreal, at one point,” she said. 

When Herbert Holt died in 1941, he was described as the richest man in Canada. A railway engineer who helped build the Canadian Pacific Railway, he was knighted for his work planning railways in France during the First World War. He later consolidated several power companies in the Montreal area — which would eventually be expropriated to create Hydro-Québec — and was president of the Royal Bank of Canada from 1908 to 1934. 

Holt was also a controversial figure in Montreal at a time when many French-speaking Quebecers resented the city’s English-speaking business elite.

In court filings, The Holt Xchange maintains the Holt name has been used by generations of family members when offering financial goods and services in Canada. It has also filed a counter claim seeking to have Credit Suisse’s HOLT trademark struck down.

Credit Suisse’s HOLT brand comes from the name of a United States-based financial consulting firm acquired by the bank in 2002 and is an acronym based on the letters of the last names of consulting company’s founders. The bank, which filed an application to register the “HOLT” trademark in Canada in 2006, sells software used to value companies, as well as offering consulting services and investment products, under the HOLT name.

Whether consumers would interpret “Holt” in the name of the Montreal venture capital fund as a reference to the Holt family is one of the issues being disputed in court filings.

Teresa Scassa, the Canada Research Chair in information law and policy at the University of Ottawa’s law faculty said the courts look at several factors when evaluating the possibility of confusion in trademark cases “including how long each name or mark has been in use, and how similar the goods and services goods or services are, and the way in which they’re marketed or sold.”

While the Trademarks Act allows people to use their own names as trade names, she said that defence has “been interpreted fairly narrowly,” 

“For example, someone named McDonald is not prevented from using their name in business and if they open a burger stand, they’re not prevented from using their name in their family business to sell burgers, but they can’t just call it McDonald’s,” she said. Instead they have to make it clear it’s a different business.

Credit Suisse spokesman Jonathan Schwarzberg declined to comment on the case, saying the bank can’t say anything publicly beyond what’s in court filings. No trial date has been set. 

Dunn said the fund entered into negotiations with Credit Suisse after the lawsuit was filed and changed its name from Holt Fintech Accelerator to The Holt Xchange in the spring, a move he said he thought would satisfy the bank.

He noted there are other companies using the name Holt.

“I don’t understand it,” he said. “It’s insulting and we’re obviously feeling like we’re being bullied. We’re a very successful family, but no family in the world can go up against a financial institution.”

Laett said the Montreal fund has built an international brand around its name, attracting interest from startups from around the world. “We’ve received roughly 3,000 applications to be part of Holt,” she said. “There is a tremendous momentum.”

Dunn said he’s not open to dropping “Holt” from the company’s name. 

“It is my personal name and my family’s name and our family’s history and reputation in Canada,” he said. 

This report by The Canadian Press was first published Aug. 2, 2021.

———

This story was produced with the financial assistance of the Facebook and Canadian Press News Fellowship.

Jacob Serebrin, The Canadian Press

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Montreal investment fund sued over use of founder's great-great-grandfather's name – Pique Newsmagazine

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MONTREAL — Brendan Holt Dunn said he wanted to invoke the legacy of his great-great-grandfather, pioneering Quebec industrialist Sir Herbert Holt, in the name of his Montreal-based venture capital fund.

Now, he may have to go to court to keep the name.

His fund, The Holt Xchange, which invests in early stage financial technology startups, is being sued by international bank Credit Suisse for trademark violation. 

In a statement of claim filed last year with Federal Court in Edmonton, Credit Suisse subsidiary CSFB HOLT said it owns the right to use the brand “HOLT” when offering financial goods and services in Canada and that the branding and offerings of the Montreal venture capital fund — known as the Holt Accelerator when the lawsuit was filed — is too similar.

The bank, which is seeking at least $100,000 in damages, argues that similarity “will cause confusion amongst Canadian consumers” and reduce the value and reputation of its trademark.

Dunn said he doesn’t think there’s a risk of confusion.

“We’re in different areas, the financial sector as a whole is very broad,” he said, adding that he’d never heard of Credit Suisse’s HOLT brand before being sued.

“I think what they’re worried about is that our name, our family’s name is better known than them in Canada,” he said in an interview Wednesday. “There is absolutely no overlap.”

Elisabeth Laett, managing partner at The Holt Xchange, said the decision to use the Holt family name when the fund launched in 2018 was a reference to the history of Montreal’s financial sector and the fund’s ambitions to help make Quebec a hub for a new generation of financial technology companies.

“We were the financial hub of Canada, in Montreal, at one point,” she said. 

When Herbert Holt died in 1941, he was described as the richest man in Canada. A railway engineer who helped build the Canadian Pacific Railway, he was knighted for his work planning railways in France during the First World War. He later consolidated several power companies in the Montreal area — which would eventually be expropriated to create Hydro-Québec — and was president of the Royal Bank of Canada from 1908 to 1934. 

Holt was also a controversial figure in Montreal at a time when many French-speaking Quebecers resented the city’s English-speaking business elite.

In court filings, The Holt Xchange maintains the Holt name has been used by generations of family members when offering financial goods and services in Canada. It has also filed a counter claim seeking to have Credit Suisse’s HOLT trademark struck down.

Credit Suisse’s HOLT brand comes from the name of a United States-based financial consulting firm acquired by the bank in 2002 and is an acronym based on the letters of the last names of consulting company’s founders. The bank, which filed an application to register the “HOLT” trademark in Canada in 2006, sells software used to value companies, as well as offering consulting services and investment products, under the HOLT name.

Whether consumers would interpret “Holt” in the name of the Montreal venture capital fund as a reference to the Holt family is one of the issues being disputed in court filings.

Teresa Scassa, the Canada Research Chair in information law and policy at the University of Ottawa’s law faculty said the courts look at several factors when evaluating the possibility of confusion in trademark cases “including how long each name or mark has been in use, and how similar the goods and services goods or services are, and the way in which they’re marketed or sold.”

While the Trademarks Act allows people to use their own names as trade names, she said that defence has “been interpreted fairly narrowly,” 

“For example, someone named McDonald is not prevented from using their name in business and if they open a burger stand, they’re not prevented from using their name in their family business to sell burgers, but they can’t just call it McDonald’s,” she said. Instead they have to make it clear it’s a different business.

Credit Suisse spokesman Jonathan Schwarzberg declined to comment on the case, saying the bank can’t say anything publicly beyond what’s in court filings. No trial date has been set. 

Dunn said the fund entered into negotiations with Credit Suisse after the lawsuit was filed and changed its name from Holt Fintech Accelerator to The Holt Xchange in the spring, a move he said he thought would satisfy the bank.

He noted there are other companies using the name Holt.

“I don’t understand it,” he said. “It’s insulting and we’re obviously feeling like we’re being bullied. We’re a very successful family, but no family in the world can go up against a financial institution.”

Laett said the Montreal fund has built an international brand around its name, attracting interest from startups from around the world. “We’ve received roughly 3,000 applications to be part of Holt,” she said. “There is a tremendous momentum.”

Dunn said he’s not open to dropping “Holt” from the company’s name. 

“It is my personal name and my family’s name and our family’s history and reputation in Canada,” he said. 

This report by The Canadian Press was first published Aug. 2, 2021.

———

This story was produced with the financial assistance of the Facebook and Canadian Press News Fellowship.

Jacob Serebrin, The Canadian Press

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Why You Should Invest In Farmland – Forbes

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At Terra Ag Ventures, our mission is to provide investors access to high quality farmland investment opportunities in the Southwest while employing sustainable farming practices with respect to water and soil. We’ve been investing in farmland for over 20 years and understand the benefits of having this asset class in a modern and diversified portfolio.

However, although farmland has generated superior returns historically for us and other investors and is an attractive investment for most portfolios, it is also misunderstood and very difficult to access. Over 86% of all farmland is owned by families (much like the single-family home market) with the rest held by large institutional interests including endowments, pension funds, insurance companies, family offices and private equity firms. 

The historical returns of farmland investing have been uncorrelated to conventional assets and securities such as stocks, bonds, real estate, timber, and even short-term agricultural commodity prices. Accordingly, the inclusion of farmland in a portfolio increases diversification while providing an attractive hedge against inflation. Additionally, farmland has delivered a higher average annual return than most asset classes in the last 29 years (1992-2020). To summarize in more detail, farmland has:

(1) Historically Attractive Returns (1992 – 2020 / 11.01%)

(2) Low Volatility of Returns (1992 – 2020 / 6.9%)

(3) Uncorrelated with Other Asset Classes (1992 to 2020 / -0.05 to 0.45)

(4) Long-Term Tailwinds (high demand with decreasing supply and recession / inflation resistant

Farmland crops can be divided into two sub-categories, annual row crops and permanent crops. Annual row crops, such alfalfa, corn, wheat, peppers, squash, lettuce, and others, are planted and harvested annually, or more frequently. Permanent crops, such as oranges, almonds, and grapes, have plant structures such as trees or vines that produce crops annually without being replanted.

Row Cropland

Row cropland investments produce annual crops such as corn, soybeans, cotton, wheat, and rice. In general, these have lower annual cash flow yields but less volatility. They typically have shorter harvest periods and involve lower upfront capital expenditure. The crop decisions are made annually providing additional flexibility for farmers to react to relatively current market conditions.

Permanent Cropland

Permanent cropland investments, our focus here at Terra Ag, include perennial crops such as fruit and nut crops, which have both pre-productive and mature periods. Pre-productive or “greenfield” investments must mature before they reach economic profitability. Some permanent crops, like almonds, peak in productivity and then decline so orchard age is an important factor in estimating productivity and value. Others, such as pistachios and pecans, take longer to reach economic profitability but can produce an economically viable crop for over 50 or 100 years. These crop types have longer investment horizons and offer opportunities for higher profitability and higher yields but also carry higher risk.

Farmland Values

Farmland values began rising in 1988 and, except for single-year declines in 2009 and 2016, have continued rising. Additionally, since 2000, the NCREIF Farmland Income Index, which tracks the value of U.S. farmland, has more than tripled. A similar positive trend in farm income growth and appreciation of land values occurred in other major crop-producing regions, such as South America, Oceania, and Europe.

Regionally, farmland values vary widely because of differences in general economic conditions, local farm economic conditions, government policy and local geographic conditions that affect returns to farming. Cropland values are highest in the Pacific region with California ($12,900/acre) and Arizona ($7,650/acre) having the highest value cropland as of 2020.

Food Demand

The world currently faces a global supply-demand imbalance with regards to food production. As the global population continues to rise, with expectations of reaching 9.7 billion by 2050, approximately 70% more food will be required than is consumed today. Additionally, it is estimated that only 7% of the Earth’s land is suitable for cultivation with most of the world’s productive arable land already in crop production. With increasing food production needs and decreasing land suitable for cultivation, this will create a supply-demand imbalance.

Alongside the rise in global population and growing food production needs, increases in income per capita is driving higher daily caloric intake. 2.3 billion people currently consume 2,000 to 2,500 kilocalories per day; however, this number is expected to drop to 683 million by 2030 as consumers transition to diets of 2,500+ kilocalories per day. This shift in consumption will be most prevalent in developing nations such as India and Africa, which remain 30% below current U.S. average consumption levels.

In addition to the increase in population and caloric intake, consumer preferences are evolving to include a greater emphasis on nutritious foods due to a better understanding of health benefits and higher income per capita. Within the U.S. and the developing world, this growing awareness of the importance of what people eat and its influence on a healthier lifestyle is driving demand for fresh, wholesome foods. In the U.S., more than half of Americans report trying to consume more protein, fiber, whole grains and vitamins and minerals in their diets.

Driven by rising demand for food, decreasing land supply, low correlation with other assets and historically strong performance, it is thus not a surprise that more investors are looking to access farmland as an investment opportunity. As with other types of real estate, farmland investors also benefit from tax savings through depreciation. At Terra Ag, we’re excited to see this investment opportunity become more mainstream with investors looking for ways to diversify and earn solid returns.

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