Finance & Economics

✒ United Airlines raised $6.8bn by putting up its customer loyalty scheme as collateral. The MileagePlus programme earned an EBITDA of $1.8bn with a margin of 34%, and accounted for about a quarter of the company’s profit. With a valuation of about $22bn disclosed in the bond documents, the value of United’s MilesagePlus exceeded the … Read More

✒ People are not spending, albeit central banks and governments have flooded the financial system with recording breaking amount of money. I wonder what will happen to inflation when the velocity of money picks up.

✒ What was described as an “elaborate and sophisticated fraud with a deliberate aim of deception”, turned out could have been uncovered by a routine audit procedure.

✒ “All models are wrong, but some are useful.”

✒ EBITDAC: earnings before interest, tax, depreciation, amortisation – and coronavirus. What started out as a joke on the internet becomes reality.

✒ The day when all asset classes go down.

✒ Read the diagrams for a TLDR version, then read the whole post.

✒ Don’t just read.

✒ IRR is not an ideal benchmarking tool because it leaves out critical data: (i) how much capital is used, (ii) when it is deployed, and (iii) for how long it stays at work relative to targeted investment horizon and the allocation / commitment made.

✒ Pensions have become a defining political issue in other countries as diverse as Russia, Japan and Brazil. Many pension systems cannot survive if things don’t change. They either have to pay in more or cut benefits.

✒ Debate on goodwill amortization.

✒ Taxes on the wealthy have fallen radically over the past 70 years.

✒ Also, averages can be misleading.

✒ Revenue is an opinion.

✒ Easy credit.

✒ Time for a refresher on OPM – Option Pricing Model (not Other People’s Money).

✒ Apple bid for Tesla at $240 per share back in 2013, compared to current price of ~$190. That looks like a good deal if the same offer resurfaces again now. However, Tesla’s balance sheet has become vastly different. Considering Tesla’s share count increasing by almost half and it’s net debt going up, Apple’s hypothetical … Read More

✒ The true cost of a £2.5 coffee: 35% Shop costs/rent; 25% Staff costs; 15% Tax plus additional costs; 10% Profit; 7% Cups, napkins, stirrers; 4% Milk; 4% Coffee. Price of just the coffee: 10p.

✒ IFRS 16 on operating lease.