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Long Thesis - Progyny - 100% upside - High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY's high-touch, seamless offering helps them stand out against large insurance carriers.
Link to my research report on PGNY
High-growth, profitable company is the only differentiated provider in a large, growing, and underserved market. PGNY's high-touch, seamless offering helps them stand out against large insurance carriers. Covid-19 has shown the importance of benefits for employees and will continue to be the key differentiator for those thinking of changing jobs. According to RMANJ (Reproductive Medicine Associates of New Jersey), 68% of people would switch jobs for fertility benefits.
For employers, Progyny reduces costs by including the latest cutting-edge technology in one packaged price, thereby lowering the risk of multiples and increasing the likelihood of pregnancy, keeping employees happy with an integrated, data-driven, concierge service partnering with a selective group of fertility doctors.
Upside potential is 2x current price in the next 18 months.
Progyny Inc. (Nasdaq: PGNY), "PGNY" or the "Company", based in New York, NY, is the leading independent fertility and family building benefits manager. Progyny serves as a value-add benefits manager sold to employers who want to improve their benefits coverage and retain and attract the best employees. Progyny offers a comprehensive solution and is truly disrupting the fertility industry.
There is no standard fertility cycle, but the below is a good approximation of possible workflows:
https://preview.redd.it/7aip8pna9zi51.png?width=941&format=png&auto=webp&s=7ef868a67eae10534bac254ab58fb3d4295aef37
Patient is referred to fertility center for evaluation for Assisted Reproductive Technology ("ART") procedures, including in-vitro fertilization ("IVF ") and intrauterine insemination ("IUI"). Both can be aided by pharmaceuticals that stimulate egg production in the female patient. IVF involves the fertilization of the egg and sperm in the lab, while IUI is direct injection of the sperm sample into the uterus. Often, IUI is done first as it is less expensive. As success rates of IVF have increased, IUI utilization will likely fall.
Sperm washing is the separation of the sperm from the semen sample for embryo creation, and it enhances the freezing capacity of the sperm. Typically, a wash solution is added to the sample and then a centrifuge is used to undergo separation. This is done in both IUI and IVF.
Some OB/GYN platforms are pursuing vertical integration and offering fertility services directly. The OB would need to be credentialed at the lab / procedure center.
Specialty pharmacy arranges delivery of temperature sensitive Rx. Drug regimens include ovarian stimulation to increase the number of eggs or hormone manipulation to better time fertility cycles, among others.
Oocyte retrieval / aspiration is done under deep-sedation anesthesia in a procedure room, typically in the attached IVF lab. Transfer cycle implantation is done using ultrasound guidance without anesthesia. (Anecdotally, we have been told that only REIs can perform an egg retrieval. We have not been able to validate this).
Many clinics house frozen embryos on-site, while some clinics contract with 3rd parties to manage the process. During an IVF cycle, embryos are created from all available eggs. Single-embryo transfer ("SET") is becoming the norm, which means that multiple embryos are then cryopreserved to use in the future. A fertility preservation cycle ends here with a female storing eggs for long-term usage (e.g. a woman in her young 20s deciding to freeze her eggs for starting a family later).
Common nomenclature refers to an IVF cycle or an IVF cycle with Intracytoplasmic sperm injection ("ICSI"). From a technical perspective, ICSI and IVF are different forms of embryo fertilization within an ART cycle.
ART clinics are frequently offering ancillary services such as embryo / egg adoption or surrogacy services. More frequently, there are independent companies that help with the adoption process and finding surrogates.
ART procedures are broken into two different types of cycles: a banking cycle is the process by which eggs are gathered, embryos are created and then transferred to cryopreservation. A transfer cycle is typically the transfer of a thawed embryo to the female for potential pregnancy. If a pregnancy does not occur, another transfer cycle ensues. Many REIs are moving towards a banking cycle, freezing all embryos, then transfer cycles until embryos are exhausted or a birth occurs. If a birth occurs with the first embryo, patients can keep their embryos for future pregnancy attempts, donate the embryos to a donation center, or request the destruction of the embryos.
The Company started as Auxogen Biosciences, an egg-freezing provider before changing business models to focus on providing a full-range of fertility benefits. In 2016, they launched with their first 5 employer clients and 110,000 members. As of June 30, 2020, the Company provided benefits to 134 employers and ~2.2 million members, year over year growth of 63%. 134 employers is less than 2% of the total addressable market of "approximately 8,000 self-insured employers in the United States (excluding quasi-governmental entities, such as universities and school systems, and labor unions) who have a minimum of 1,000 employees and represent approximately 69 million potential covered lives in total. Our current member base of 2.1 million represents only 3% of our total market opportunity."
The utilization rate for all Progyny members was less than 1% in 2019, offering significant leverageable upside as the topic of fertility becomes less taboo.
https://www.wsj.com/articles/fertility-treatments-are-now-company-business-11597579200
https://www.nytimes.com/2020/04/19/parenting/fertility/fertility-startups-kindbody.html
https://www.theglobeandmail.com/opinion/article-covid-19-will-make-the-global-baby-bust-even-worse-but-canada-stands/
https://www.wbal.com/article/469564/114/post-pandemic-baby-boom-and-fertility-consults-via-zoom-how-covid-19-is-affecting-pregnancy-plans
Fertility has historically been a process fraught one-sided knowledge, even more so than the typical physician procedure. Despite the increased availability of information on the internet, women who undergo fertility treatments have often described the experience as "byzantine" and "chaotic". Outdated treatment models without the latest technology (or the latest tech offered as expensive a la carte options) continue to be the norm at traditional insurance providers as well as clinics that do not accept insurance. Progyny's differentiated approach, including a high-touch concierge level of service for patients and data-driven decision making at the clinical level, has led to an NPS of 72 for fertility benefits and 80 for the integrated, optional pharmacy benefit.
Typically, fertility benefits offered by large insurance carriers are add-ons to existing coverage subject to a lifetime maximum while simultaneously requiring physicians to try IUI 3 – 6 times before authorizing IVF. The success rate of IUI, also known as artificial insemination, is typically less than 10%, even when performed with medication. As mentioned in Progyny's IPO "A patient with mandated fertility step therapy protocol may be required to undergo three to six cycles of IUI, which has an average success rate range of 5% to 15%, takes place over three to six months and can cost up to $4,000 per cycle (or an aggregate of approximately $12,000 to $24,000), according to FertilityIQ. Multiple rounds of mandated IUI is likely to exhaust the patient's lifetime dollar maximum fertility benefits and waste valuable time before more effective IVF treatment can be begun."
Success Rates for IVF
IVF success rates vary greatly by age but were 49% on average for women younger than 35. The graph below shows success rates by all clinics by age group for those that did at least 10 cycles in the specific age group. As an example, for those in the ages 35 – 37, out of 456 available clinics, 425 performed at least 10 cycles with a median success rate of 39.7%.
https://preview.redd.it/d2l5dtw89zi51.png?width=4990&format=png&auto=webp&s=5ff2ab9948b94419558a27ac861d4e498dce6713
Progyny's Smart Cycle is the proprietary method the company has chosen as a "currency" for fertility benefits. As opposed to a traditional fee-for-service model with step-up methods, employers may choose to provide between 2 and unlimited Smart Cycles to employees. This enables employees to choose the provider's best method. Included in the Smart Cycle, and another indicator of the Company's forward-thinking methodology, are treatment options that deliver better outcomes (PGS, ICSI, multiple embryo freezing with future implantations).
https://preview.redd.it/np577a389zi51.png?width=734&format=png&auto=webp&s=c061a2b24c8515890ba204479b4677893dabf755
As detailed in the chart above, a patient could undergo an IVF cycle that freezes all embryos (3/4 of a Smart Cycle), then transfer 5 frozen embryos (1/4 cycle each; each transfer would occur at peak ovulation, which would take at least 5 months) and use only 2 Smart Cycles. Alternatively, if the patient froze all embryos and got pregnant on the first embryo transfer, they would only use one cycle.
Before advances in vitrification (freezing), patients could not be sure that an embryo created in the lab and frozen for later use would be viable, so using only one embryo at a time seemed wasteful. Now, as freezing technology has advanced, undergoing one pharmaceutical regime, one oocyte collection procedure, creating as many embryos as possible, and then transferring one embryo back into the uterus while freezing the rest provides the highest ROI. If the first transferred embryo fails to implant or otherwise does not lead to a baby, the patient can simply thaw the next embryo and try implantation again next month.
Included in each Smart Cycle is pre-implantation genetic sequencing ("PGS") on all available embryos and intracytoplasmic sperm injection ("ICSI"). PGS uses next-generation sequencing technology to determine the viability and sex of the embryo while ICSI is a process whereby a sperm is directly inserted into the egg to start fertilization, rather than allowing the sperm to penetrate the egg naturally. ICSI has a slightly higher rate of successful fertilization (as opposed to simply leaving the egg and sperm in the petri dish).
Because Progyny's experience is denominated in cycles of care, not simply dollars, patients and doctors can focus on what procedures offer the best return. 30% of the Company's existing network of doctors do not accept insurance of any kind, other than Progyny, which speaks to the value that is provided to doctors and employers.
For patients not looking to get pregnant, Progyny offers egg freezing as well. Progyny started as an egg-freezing manager, which allows a woman to preserve her fertility and manage her biological clock. As mentioned previously, pregnancy outcomes vary significantly and align closely with the age of the egg. Egg freezing is designed to allow a woman to save her younger eggs until she is ready to start a family. From an employer's perspective, keeping younger women in the work force for longer is a cost savings. Vitrification technology has improved significantly since "Freeze your eggs, Free Your Career" was the headline on Bloomberg Businesweek in 2014, but we still don't yet know the pregnancy rates for women who froze their eggs 5 years ago, but early results are promising and on par with IVF rates for women of similar ages now.
From a female perspective, the egg freezing process is not an easy one. The patient is still required to inject themselves with stimulation drugs and the egg retrieval process is the same as in the IVF process (under sedation). The same number of days out of work are required. Using the SmartCycle benefit above as an example, the egg freezing process would require ½ of a Smart Cycle. The annual payment required to the clinic is typically included in the benefits package but may require out-of-pocket expenses covered by the employee.
Contrary to popular belief, IVF pregnancies do not have a higher rate of multiples (twins, triplets, etc.), rather in order to reduce out of pocket costs, REIs have transferred multiple embryos to the patient, in the hopes of achieving a pregnancy. If you have struggled for years to get pregnant, and the doctor is suggesting that transferring 3 embryos at once is your best chance at success, you are unlikely to complain, nor are you likely to selectively eliminate an implanted embryo because you now have twins. There are several factors that are making it more likely / acceptable to transfer one embryo at a time, enabling Progyny's success.
https://preview.redd.it/48vk9gc69zi51.png?width=953&format=png&auto=webp&s=2c75a2771a1dd9a079074331b317451f076725ca
From the Company: "According to a study published in the American Journal of Obstetrics & Gynecology that analyzed the total costs of care over 400,000 deliveries between 2005 and 2010, as adjusted for inflation, the maternity and perinatal healthcare costs attributable to a set of twins are approximately $150,000 on average, more than four times the comparable costs attributable to singleton births of approximately $35,000, and often exceed this average. In the case of triplets, the costs escalate significantly and average $560,000, sometimes extending upwards of $1.0 million."
"Progyny's selective network of high-quality fertility specialists consistently demonstrate a strong adherence to best practices with a substantially higher single embryo transfer rate. As a result, our members experience significantly fewer pregnancies with multiples (e.g., twins or triplets). Multiples are associated with a higher probability of adverse medical conditions for the mother and babies, and as a byproduct, significantly escalate the costs for employers. Our IVF multiples rate is 3.6% compared to the national average of 16.1%. A lower multiples rate is the primary means to achieving lower high-risk maternity and NICU expenses for our clients."
An educated and supported patient leads to better outcomes. Each patient gets a patient care advocate who interacts with a patient, on average, 15x during their usage of fertility benefits - before treatment, during treatment and post-pregnancy. The Company provides phone-based clinical education and support seven days a week and the Company's proprietary "UnPack It" call allows patients to speak to a licensed pharmacy clinician who describes the medications included in the package (which contains an average of 20 items per cycle), provides instruction on proper medication administration, and ensures that cycles start on time. The Company's single medication authorization and delivery led to no missed or delayed cycles in 2018.
Previous conference calls have made note of the fact that the Company would like to purchase their own specialty pharmacy and own every aspect of that interaction, which should provide a lift to gross margins. This would allow PGNY to manage both the medication and the treatment, leading to decreased cost of fertility drugs. Under larger carrier programs, carriers manage access to treatment, but PBM manages access to medications, which can lead to a delay in cycle commencement.
Progyny Rx can only be added to the Progyny fertility benefits solution (not offered without subscription to base fertility benefits) and offers patients a potentially lower cost fertility drug benefit, while streamlining what is often a frustrating part of the consumer experience. The Progyny Rx solution reduces dispensing and delivery times and eliminates the possibility that a cycle does not start on time due to a specialty pharmacy not delivering medication. Progyny bills employers for fertility medication as it is dispensed in accordance with the individual Smart Cycle contract. Progyny Rx was introduced in 2018 and represented only 5% of total revenue in 2018. By June 30, 2020, Progyny Rx represented 28% of total revenue and increased 15% y/y. The growth rate should slow and move more in line with the fertility benefits solution as the existing customer base adds it to their package.
Progyny Rx can save employers 5% on spend for typical carrier fertility benefits or 21% of the drug spend. Prior authorization is not required, and the pre-screened network of specialty pharmacies can deliver within 48 hours. Additionally, PGNY has 1-year contracts, as opposed to 3 – 5 years like standard PBMs, but with guaranteed minimums, allowing them to purchase at discounts and pass part of the savings on to employers – another reason the attachment rate is so high.
Large, Underpenetrated Addressable Market
Total cycle counts are increasing (below, in 000s), including both freezing cycles and intended-pregnancy cycles. Acceleration in cycle volume is likely driven by a declining birth rate as women wait later in life to start a family, resulting in reduced fertility, as well as the number of non-traditional (LGBT and single parents). Conservatively, we believe cycles can double in the next 8 years, a 7% CAGR.
https://preview.redd.it/y6y7jb559zi51.png?width=943&format=png&auto=webp&s=6cc5cdde7c6583d8e943d2675ad3b6ae85f818de
Progyny believes its addressable market is the $6.7B spent on infertility treatments in 2017, but these numbers could easily understate the available market and potential patients as over 50% of people in the US who are diagnosed as infertile do not seek treatment. Additionally, according to the Company, 35% of its covered universe did not previously have fertility benefits in place previously, meaning there is a growing population of people who are now considering their fertility options. According to Willis Towers, Watson, ~ 55% of employers offered fertility benefits in 2018.
A quick review of CDC stats and FertilityIQ shows a significant disparity in outcomes and emotions for those who are seeking treatment. While technology in the embryo lab is improving rapidly and success rates between clinics should be converging, there continue to be significant outliers. Clinics that follow what are now generally accepted procedures (follicle stimulating hormones, a 5-day incubation period and PGS to determine embryo viability) have seen success rates of at least 40%. There continue to be several providers that offer a mini-IVF cycle or natural IVF cycle. Designed to appeal to cost conscious cash payors, the on average $5,000 costs, is simply IVF without prescription drugs or any add-ons such as PGS. However, the success rates are on par with IUI and there is an abundance of patients over 40 using the service, where the success rates are already low. Additionally, success stories at these clinics frequently align with what is perceived as the worst parts of the process:
One clinic offering a natural cycle IVF has a rating at FertilityIQ of ~8.0 with 60% of people strongly recommending it. This clinic performed 2,000 cycles in 2018 (the most recently available data from the CDC), making it one of the top 10 most active fertility center in the US. Their success rate for women under 35 was 23%, as opposed to the national average of 50% for all clinics. For women over 43, the average success rate for the most active 40 clinics in this demographic was 5.0% this clinics success rate was 0.4%. The lower success rate is likely due to the lack of pre-cycle drugs and PGS, but the success rate and the average rating is hard to understand. Part of this could be to the customer service provided by the clinic, or the perceived benefit of having to go into the office less often for check-ups when not doing a medication driven cycle.
Reviews from other clinics with high average customer ratings, but low success rates include:
- "start of a journey that consisted of multiple IUI's with numerous medications, but they were not successful."
- After an IVF retrieval, the couple had two viable embryos, both were transferred the next month"
- "The couple started with a series of IUI treatments, three in total that were not successful."
- "After a fresh transfer of two embryos, again another unsuccessful cycle".
- "He suggested transferring 2 due to higher implantation rates, but there is increased rate of twins "
https://preview.redd.it/tqcykjm39zi51.png?width=6358&format=png&auto=webp&s=b63fd53c054ac5cbacaf9ccc734c7e73f0ea3c32
Progyny's comps have typically been other high-growth companies that went public in the last two years: 1Life Healthcare (ONEM), Accolade (ACCD), Health Catalyst (HCAT), Health Equity (HQY), Livongo (LVGO), Phreesia (PHR), as well as Teladoc (TDOC). Despite revenue growth that outpaces these companies, PGNY's revenue multiple of 4.4x 2021E revenue is a 40% discount to the peer group median. PNGY's lower gross margin is likely limiting the multiple. However, Progyny is the one of the few profitable companies in this group and the only one with realistic EBTIDA margins. SG&A leverage is the most likely driver of increased EBITDA and can be achieved by utilizing data to improve clinical outcomes in the future, but primarily by increased productive of the sales reps, including larger employer wins and larger employee utilization.
Perhaps the best direct comp is Bright Horizons (BFAM). BFAM offers childcare as a healthcare benefit where employees can use pre-tax dollars to pay for childcare. BFAM offers both onsite childcare centers built to the employer's specification (owned by the employer and operated by BFAM), as well as shared-site locations that are open to the public and back-up sitter services. Currently, PGNY is trading at 4.4x 2021E Revenue, in-line with BFAM's 4.3x multiple. I would argue that PGNY should trade significantly higher given the asset-lite business model and higher ROIC.
Post Covid-19, fertility treatments came back faster than anticipated, combined with disciplined operations, PGNY drove revenue and EBITDA above 2Q2020 consensus estimates. Utilization is still below historical levels, but management's visibility led to excellent FY21 revenue estimates (consensus is around $555M, a y/y increase of 62%.
2Q2020 revenue increased 15% to $64.6M, and EBITDA increased 18% to $6.5M, primarily driven by SBC as the 15% revenue was not enough to leverage the additional G&A people hired in the last 18 months. The end of the quarter as fertility docs opened their offices back up for remote visits saw better operating margin.
Despite the shutdown in fertility clinics during COVID-19, Progyny was able to successfully add several clients.
"The significant majority of the clinics in our network chose to adhere to ASRMs guidelines, and our volume of fertility treatments and dispensing of the related medications declined significantly over the latter part of the quarter. . . Through the end of March and into the first half of April, we saw significant reductions in the utilization of the benefit by our members down to as low as 15%, when compared to the early part of Q1 were 15% of what we consider to be normal levels. In April, the New York Department of Health declared that fertility is an essential health service and stated that clinics have the authority to treat their patients and perform procedures during the pandemic. Then on April 24, ASRM updated its guidelines which were reaffirmed on May 11, advising that practices could reopen for all procedures so long as it could be done in a measured way that is safe for patients and staff."
Revenue increased by $33.8 million, 72% in 1Q2020. This increase is primarily due to a $19.0 million, or 47% increase, in revenue from fertility benefits. Additionally, the Company experienced a $14.8 million or 216% increase in revenue from specialty pharmacy. Revenue growth was due to the increase in the number of clients and covered lives. Progyny Rx revenue growth outpaced the fertility benefits revenue since Progyny Rx went live with only a select number of clients on January 1, 2018 and has continued to add both new and existing fertility benefit solution clients since its initial launch.
The only true competition is the large insurance companies, but, as mentioned previously, they are not delivering care the same way. WINFertility is the largest manager of fertility insurance benefits on behalf of Anthem, Aetna and Cigna and are not directly involved in the delivery of care. Carrot is a Silicon Valley startup that recently raised $24M in a Series B with several brand name customers (StitchFix, Slack) where they focus on negotiating discounts at fertility clinics for their customers, who then use after-tax dollars from their employers.
Risks to Thesis
Though there is risk a large carrier may switch to a model similar to Progyny's, I believe it is unlikely given the established relationships with REIs at the clinic level, the difficulty of managing a more selective network of providers, and the lack of
interest shown previously in eliminating the IUI. It is more likely a carrier would acquire Progyny first.
submitted by dornstar18 to SecurityAnalysis [link] [comments]
CAMS IPO Analysis
IPO Filings/DRHP's are some of the best places to learn from when you are trying to understand the company and industry it operates in. In this letter, we will delve into the IPO filing of CAMS (the largest RTA in the country)
Founded in 1998, CAMS ( Computer Age Management Services Pvt. Ltd ) is India's largest registrar and transfer agent of mutual funds with an aggregate market share of 69.4% based on mutual fund AUM managed by its clients (Asset Management Companies) during November 2019
This IPO is an offer of sale .i.e. the proceeds from the IPO will be going only to the existing shareholders selling their shares.
Shareholding pattern is available here. The subreddit does not let us post pictures.
Growth Drivers:
Growth in the mutual fund industry on back of increasing savings moving towards financial assets: See chart here. Company has shown 17.4% CAGR from 2000-2019.
India's mutual fund AUM as a % of GDP is significantly lower than the world average: See chart here. India is at 11%, compared to 103% for USA, 75% for France, 68% for Canada
The number of mutual fund houses have been largely stable over the last few years, hence, the growth in the revenues will be largely on back of growth of AUM managed by the fund houses.
Mutual fund industry comprises of 41 AMCs (excluding Infrastructure Debt Funds) and a majority of the total mutual fund AUM is managed by the top five AMCs which have approximately 60% of the total market share as of March 2019. (Market share of top five AMCs has risen in the last few years from 54% in financial year 2015 to 58% in financial year 2019)
Services provided by RTA's to AMC's:
Knowledge partner of AMC's: Given the history of RTA's association with AMC's, they apply analytics to accumulated data and help AMCs in the development of innovative products
Service aggregator: RTA's bring cost efficiency to the table due to having similar scope of work across major AMC's (e.g. sending notifications to the customer)
Operational Integration & Customer Care: Onboarding customers, maintaining records, data upgradation
Revenue Model:
Revenue is derived from fees charged for servicing the AAUM (average assets under management ) of the funds serviced by CAMS
Charge higher fees for equity mutual funds v/s debt funds
Contracts with Mutual fund and AIF clients are typically perpetual in nature, unless terminated by either party while it is 3-5 years for other clients
Major part of the revenue earned (estimated to be over 80%) is by means of tiered fees charged on the AUMs managed for which the MF RTAs provide service. These tend to decrease as a proportion of total AUMs once the AUMs surpass the tiers for which the fees are agreed on.
With the increase in AUM managed, the fees charged as proportion of AUM has been falling, but the extent of decline in pricing despite the strong growth in AUM (i.e. approximately a 30% CAGR) indicates the reasonably strong bargaining power enjoyed by MF RTAs
In FY 2020, MF RTAs witnessed some pricing pressure, as the SEBI reduced the total expense mutual funds were allowed to charge.
According to CRISIL, a moderate reduction in fees charged by RTAs as a proportion of AUM as the size of industry AUM increases is expected. However, RTAs will benefit from an expected increase in the share of equity and hybrid funds in industry AUM.
There is no impact of direct plans growth on RTA's as RTAs as these are charged based on AUM, irrespective of which plan is opted for by investors
RTA's also offer similar services to Alternate Investment Funds (AIF)
In addition, RTA's also have offer similar services to insurance companies for policy servicing of e-insurance policies. There are 4 insurance repositories in India :
CAMS Insurance Repository Services Limited;
Central Insurance Repository Limited;
KARVY Insurance Repository Limited; and
NSDL Database Management Limited.
Following are the are the mutual fund registrar and transfer agents operating in India:
Computer Age Management Services Limited ("CAMS"),
KFin Technologies Private Limited (erstwhile Karvy Fintech Private Limited) ("Karvy")
Sundaram BNP Paribas Fund Services (acquired by Karvy in October 2019)
Franklin Templeton Asset Management (India) Private Limited
See market share and total AUM of top fund houses here.
CAMS services the 4 out of the top 5 AMC's and 9 of the 15 largest AMC's. It has been able to manage and hold on to its market share in the last few years: See chart here.
CAMS is the clear leader vs/ peers in profitability with RoE of 29.5% , PAT margin of 19% and witnessed the revenue CAGR of 20% over 2016-19: See chart here.
CAMS also has a 3X higher business per branch despite having only 22% higher number of branches than Karvy: See chart here.
There are multiple reasons for the oligopolistic nature of the RTA industry leading to significant entry barriers:
High client stickiness due to humongous hassles involved in migration ,business disruption , customer and regulatory hassles . New players have not gain traction, only consolidation or building in-house RTA have led to switching of RTA's - this is evidenced by the CAM's number of clients being the same over the last 5 years: See chart here.
The average term of CAM's relationship with its ten largest mutual fund clients is 18 years as of September 30, 2019
High Technology intensity requiring continuous up gradation of systems due to changes in regulations
Need of extensive branch network to address service needs of customers
High operating leverage: RTA helps in addressing investor and distributor needs which are not addressed online
CAMS also has a significant presence in insurance repository market: Given the miniscule penetration of e-policies, there is a significant headroom for growth in this market.
Risks:
Regulatory Risk : SEBI in its press release in September and October 2018 had provided a maximum cap on the Total Expense Ratio (TER) which can be charged by mutual fund companies on the various type of products . This capping can potentially impact the revenues of service providers like CAMS since the AMC's can renegotiate their fee contracts with CAMS
Client concentration Risk: Top 5 clients have contributed to 65-67% of revenues in last 4 years. Given the Oligopolistic nature of the market, the client concentration doesn't seem to be reducing soon.
Consolidation in Industry: M&A in AMC's can reduce the number of clients and grant more bargaining power to the AMC. In the past, they lost one of mutual fund clients' due to their merger with another mutual fund that was serviced by a competitor
CAMS Overview:
Provides portfolio of technology-based services, such as transaction origination interface, transaction execution,payment, settlement and reconciliation, dividend processing, investor interface, record keeping, report generation, intermediary empanelment , brokerage computation and compliance related service
Also provide certain services to alternative investment funds, insurance companies, banks and non-banking finance companies.
Managed mandated transactions (collections , reconciliations) for AMC,s NBFC's etc
For Insurance companies - processing of new applications, holding policies in demat form, servicing and support for policies
Digitization of account opening, back office processing for banks and NBFC's
Number of folios serviced by CAMS are 38.3 million as of September 30, 2019
Has 278 service centers, four call centers, four back offices of which three are in Chennai
Business Structure:
See chart here.
CAMS operates in 7 business verticals namely: Mutual Funds Services Business, Electronic Payment Collection Services Business, Insurance Services Business, Alternative Investment Fund Services Business, Banking and Non-Banking Services Business, KYC Registration Agency Business and Software Solutions Business
Mutual Fund vertical services
Transfer services like transaction origination , managing KYC , execution of transaction processing from investors and payments, calculation & payment of brokerage commission fees to distributors, risk management services like reporting to SEBI, anti money laundering services, Customer care services through service branches for customer and distributors and call centre.
Distributor services like record and maintenance of brokerage structures , computation of payable /clawback brokerage/ distributor queries
Also has developed a bunch of applications including mobile apps and solutions for investor, corporate and AMC needs
Electronic Payment Collection services:
Manage end-to-end automated clearing house transaction and electronic clearance services and service mutual funds, non-banking financial companies and insurance for automated payments
Insurance services:
Scrutinizing and processing of applications, training and onboarding of new insurance agents, submission of proposals, scanning, indexing and data entry, reminding policyholders of payment receipts
Alternative Investment Fund Services:
Similar to MF
Banking and Non Banking Services
Customer interface and back office processing
KYC Registration Agency Business:
Maintain KYC records on behalf of capital market intermediaries registered with SEBI, eliminating the need to repeat KYC procedure.
Software Solutions Business:
Software solutions business through subsidiary, SSPL which owns, develops and maintains the technology solutions for mutual fund clients, with a team of 362 people .
As of September 30, 2019, CAMS employed 4,314 full time and 2,136 contractual employees.
Given the high operational intensity of the business, employee expenses is the major cost at ~38% of the revenues.
Dividend Distribution Policy:
Company adopted a formal dividend policy on February 20, 2018 which was further amended on January 2, 2020.
Company aims to distribute a minimum dividend of 65% of the consolidated profit, net of tax, for relevant financial year
Notes on financial information:
Nearly 254 Cr investments in mutual funds , 45 Cr of trade receivables, 157 Cr of cash & cash equivalents as of HYFY19
No debt on the books, just long term lease liabilites of 105 Cr as of HYFY19
Bulk of the revenues is from data processing
Data processing comprises of core AAUM based revenue, revenue from services to insurance companies, banking and non-banking financial services companies and services to alternative investment funds and our KYC registration agency business.
Customer care services primarily comprise paper transaction volume-based fees and NACH volume based fee from electronic payment collection services business.
Recoverables comprise out of pocket expenses incurred on clients
Miscellaneous services comprises revenue from call centre services and fees for applications made available to clients. Software license fee, development and support services comprises fee earned by Subsidiary, SSPL for providing services to external clients.
Major part (~50%) of the operating expenses is the service expenses
Service expenses: Out of pocket expenses incurred for communication services to investors or distributors, stationary and postage on behalf of clients
Data entry expenses: primarily incurred to process paper applications in mutual fund services business
Customer service centre charges: Expenses primarily associated with management of service centres and payment of fees to centre heads
Claims: Incurred on account of claims raised against CAMS as well as funds set aside by CAMS to provide for future claims
There is no debt on the books of the company or its subsidiaries
Valuation :
Company is seeking to sell 1500 Cr-1600 Cr valuing the company at nearly 6,000 Cr
At current share capital of 48,760,000 shares, this translates to a price of 1230/- , meaning a current P/E of 36x on FY20E
Given that the growth in the CAM's business with be primarily driven by the clients' AUM growth , unless CAMS acquire more clients (which looks difficult to high entry barriers) and low pricing power, the earnings growth in the future will be largely in line with industry AUM growth.
Note: All the notes are based on the filed CAMS IPO prospectus , please consult your financial advisor for advice before investing in any product.
P.S - Apologies. A lot of the charts are images that cannot be posted on this subreddit. However, all of these are available on the source article - https://www.thegalacticadvisors.com/post/computer-age-management-services-decoded.
submitted by GalacticAdvisors to IndiaInvestments [link] [comments]
This rally is a mirage, we are only in the beginning stages of this recession
TL;DR at the bottom
Hi guys, with the market rallying 20% from its "bottom", many people are expressing the sentiment that we should buy back into the market again because the "fed" or the "government" won't allow stocks to crash.
We will for sure see unprecedented actions taken by the fed and the government because they have both the motive and the political capital to enact such policies. However, I think this is a misguided reason to believe the market is currently making its "real" rally.
I am not not a permabear nor am I a permabull. I just try to objectively analyze the facts, apply a healthy dose of margin of safety, and then see if my conclusions are actionable.
For example, I posted my thesis on why we will enter a serious global economic downturn on Feb 9th 10 days before it happened. At the time we were at the height of the biggest bull market in our history, and I had gotten a lot of attacks on my thesis leading up to me consolidating my thoughts:
https://www.reddit.com/China_Flu/comments/f1fm6y/the_world_economy_will_enter_a_serious_downturn/
I continued adding more thoughts on things like the potential efficacy of Chloroquine 2 weeks before Trump announced it in a press conference and the media picked up on it, the potential collapse of American oil producers before the price war happened, casinos going under, helicopter money, bailouts, etc all before they were announced or the markets priced them in here:
https://www.reddit.com/China_Flu/comments/fede69/continued_thoughts_on_the_global_economic_impact/
And finally I talked about an upcoming inflection point coincidentally moments before Trump first announced Chloroquine/Hydroxychloroquine and 2 trading days before the "bottom" of the market:
https://www.reddit.com/stocks/comments/fleh7e/incoming_inflection_point_for_general_market/
So I'm perfectly happy to make bearish calls or bullish calls, they are dependent variables of independent and unbiased analysis. I hope I made a reasonable case for why I am not personally biased (although, for the sake of humanity, I do wish for progress and prosperity of course).
I think the market rally is largely a mirage, and we are not getting correct pricings. The rally is probably driven by two main sources:
Capital displacement from monetary action
Incorrect earnings modeling based on improper historic precedent.
So the capital displacement is relatively simple: If you're seeking shelter in "risk free" investments that has some yields, you're now competing with a buyer (federal reserve) that prints hundreds of billions up to whatever it wants. They're literally squeezing out capital from the finite treasuries.
If you want riskier high quality corporate bonds, the fed will be there.
If you want even equities, you're going to face competition for them in the future. At least that's what former chairwoman Jenet Yellen recently said about the possibility of expanding their powers to buy equities.
So money is getting squeezed into a smaller and smaller relative portion of the financial markets, and the artificial demand is driving yields down and prices up. I could write a whole thread about this, but let's stick with the explanation of price movement.
The second main reason for the recent rally is from institutional investors who are incorrectly modeling earnings/yield of equities. So the logic here is: trillions are injected into the economy (fiscal injections), those trillions will become earnings for companies at some multiplier of the original stimulus over x amount of time, and if we add this number to the unstimulated estimated earnings, we can model future earnings.
My issue with this model, is on two main assumptions:
The first assumption is the length of disruption caused by the threat of this virus.
This virus is not going to stop its serious disruption of behavior from economic actors. Especially not in a country like the US where the majority of people have a massive financial disincentive to seek out healthcare. Here's my logic:
For months I've been praising the governments and response of South Korea, Singapore, and Taiwan. With Taiwan being the absolute best at handling the virus. However, I have also been using them as my leading indicators for how the virus will progress and affect economic actors. What I have seen developing lately is not good.
Singapore is now calling for a shutdown, after they initially did a herculean job of containing their outbreak. I had hoped that they would develop procedures (that we can copy) needed to run an open economy while the threat of the virus looms in the background. But that is not what has happened. Instead, we are seeing growing numbers of new clusters forming, and quickly getting out of control. They are tightening and shutting down their economy rather than opening up more. This is our leading indicator. A government far more responsible and effective than us is resorting to shutting down.
Taiwan is faring better, but only because of their prohibitive ban on almost all foreign travelers (this is obviously devastating to their tourism sector and broader economy). Their economy and society remains open, with many if not most people having hardly any interruptions to their lives (aside from mask wearing). They are one of only 3 countries where all children are still going to school. However, even their economy is faltering as they try to balance the prohibitive actions needed to contain the virus and the economic need to keep things open. They are proposing an unprecedented stimulus/rescue package to bolster their economy. And I think it's a safe assumption that if they ever do open up to foreign travelers again, especially with covid19 having proliferated as it already has, then they will have to deal with massive outbreak clusters all over their island.
South Korea, which has probably the relatable and relevant model for us to copy, has recently extended its social distance campaign. South Korea is a far larger nation than Singapore or Taiwan. They have a climate similar to Seattle/New York. They had a major outbreak in Deagu but didn't shut their country down. They never even banned Chinese travelers, yes, they had Chinese tourists in their country while the outbreak was happening. They were among the first to widely use Hydroxychloroquine/chloroquine as a treatment for Covid19. They had among the lowest fatality rates. They contained their outbreak without shutting the whole country down.
Even South Korea can't truly return to normal and open their economy up.
So why, in our incredible American exceptionalism hubris, and far less competent leaders, do we believe we're going to come anywhere close to normalcy in the near future?
Let's look at the next assumption, that fiscal stimulus would end up as earnings for companies. There's no doubt some will end up as earnings, but only a small fraction of what is being modeled by those on Wall Street.
The average American don't even have $1000 in emergency funds, do we expect them to return to their normal consumption habits when they risk having hospital bills multiples of $1000 just from walking past the wrong person? Do you think Americans, as much as they love to spend, aren't going to put some of that stimulus check in their emergency funds rather than contribute it to the earning of some companies? Sure, there will be some "forced" spending of the money (food and necessities), but if anyone is modeling the multiplier effect from previous data, then they really don't appreciate how different this virus makes things. Even in the GFC, laid off people didn't really worry about the heightened threat of being hospitalized.
Finally, some investors believe the Fed and the government literally will do anything to keep the numbers up. If this is true, you should be buying silver (or gold), not stocks.
Monetary actions can be reversed relatively easily. They are far more dynamic tools. Fiscal actions are not. You put money in the hands of spenders, that money is gonna circulate. And you really don't have an easy way of reversing that. If we think the government is going to keep handing out stimulus checks, grants to businesses, and other fiscal stimulus, then the inflation predicted from the GFC will come true for this crisis.
The fall out of inflation will be difficult to truly understand. But I do think inflation will be disruptive enough to the economy that inflation hedge assets will outperform other assets at least in the short term. For example, if inflation goes to 5%, who's going to lend to companies for less than inflation? With costlier debt, equity yield goes down, and again, what investor wants yields less than inflation? Inflation is going to cause all kinds of disruptions. I think the disruptions will come down to less liquidity (credit will vanish with uncertain inflation) and higher economic friction (less efficiency).
So if the response to why the market has to go up is continuous fiscal (and some monetary) actions to prop up spending and earnings, then the question is how will fiscal actions be reversed? How do we get that money out after things go back to "normal"?
I think if we see equities rise from here, it'll be reflective of inflation rather than inflation-adjusted earnings. Silver would be the play here.
I have a lot more thoughts on this, especially on the time it takes to turn the gears of the financial system and why the inertia is moving us deeper into global recession, not out of it, but I'm running out of time and must end here.
TL;DR this is a fake rally, and if anyone really expects prices to continue rallying, buy silver instead
submitted by Starcraftduder to StockMarket [link] [comments]
Bittrex Review: One of the First Crypto Exchanges| Final Part
4. Transaction Fees
Transferring funds across the blockchain and withdrawing them from Bittrex costs a fee for customers, with the rate unique for every coin.
Bittrex Global charges no commission for deposits. Please keep in mind that some tokens or cash may be required to perform a transaction by a crypto coin or token's community. Bittrex crypto exchange can't keep away from it.
Every token or coin has a blockchain transaction fee that is built in it, and the Bittrex fee is a small amount to cover this charge. You can view the fee percentage for every coin or token by clicking Withdrawal near to the coin. There you will see a transaction fee you will be charged for withdrawing a specific coin or token.
In the example below, the withdrawal fee amounts to 1 USDT
https://preview.redd.it/209uz2p64zh51.jpg?width=974&format=pjpg&auto=webp&s=9ee9355c4d75d41931a3073b8a230bd1ffddaf08
The transaction fee for Bitcoin came to 0.00050000 BTC
https://preview.redd.it/vh7zbe884zh51.jpg?width=974&format=pjpg&auto=webp&s=e6293650b46a7e0ba661478bd2467471b8b213f9
5. Trading Fees
The fee schedule below provides the applicable rate based on the account's 30-Day Volume and if the order is a maker or taker.
Bittrex Global Fee30 Day Volume (USD)MakerTaker$0k - $50k0.2%0.2%$50k - $1M0.12%0.18%$1M - $10M0.05%0.15%$10M - $60M0.02%0.1%$60M+0%0.08%>$100MContact TAM representative
Trading expenses are incurred when an order is prepared by means of the Bittrex worldwide matching engine. While an order is being executed, the purchaser and the vendor are charged a rate primarily based on the order's amount. The fee charged by Bittrex exchange is calculated by the formula amount * buy rate * fee. There aren't any charges for placing an order which is not being executed so far. Any portion of an unfinished order will be refunded completely upon order cancelation.
Prices vary depending on the currency pair, monthly trade volume, and whether the order is a maker or taker. Bittrex reserves the right to alternate fee quotes at any time, including offering various discounts and incentive packages.
Your buying and selling volume affects the fee you pay for every order. Our expenses are built to encourage customers who ensure liquidity in the Bittrex crypto exchange markets. Your buying and selling charges are reduced according to your trade volume for the last 30 years in dollars.
Bittrex calculates the 30-day value every day, updating every account's volume calculation and buying and selling charge between of 12:30 AM UTC and 01:30 AM UTC every day.
You can check your monthly trade volume by logging in and opening Account > My Activity.
https://preview.redd.it/n1djh2ob4zh51.jpg?width=974&format=pjpg&auto=webp&s=2eebb9c9ac63de207c4dd2e49bc45aeb53a8dec8
6. Withdrawing Funds
Withdrawing any type of funds is likewise simple. You can profit by buying and selling Bitcoin, Ether, or any other cryptocurrency.
You determine the crypto address—to which the amount will be credited—and the transaction amount. The withdrawal fee will be automatically calculated and shown right away.
After confirming the transaction, the finances will be sent to the specified addresses and all that you need to do is to wait for the community to confirm the transaction.
If the 2FA is enabled, then the user receives a special code (via SMS or application) to confirm the withdrawal.
7. How to Trade on Bittrex Global
Currency selling and buying transactions are performed using the Sell and Buy buttons, accordingly.
To begin with, the dealer selects a currency pair and sees a graph of the rate dynamics and different values for the pair.
Below the chart, there is a section with orders where the user can buy or sell a virtual asset.
To create an order, you just need to specify the order type, price, and quantity. And do not forget about the 0.25% trade fee whatever the quantity.
For optimum profit, stay with liquid assets as they can be quickly sold at a near-market rate effective at the time of the transaction. Bittrex offers no referral program; so buying and selling crypto is the easiest way to earn.
https://preview.redd.it/hopm6fih4zh51.jpg?width=1302&format=pjpg&auto=webp&s=68c0aaae86f64c3e6b9d351c3df2a9c331f94038
Bittrex helps you alternate Limit and Stop-Limit orders.
A limit order or a simple limit order is performed when the asset fee reaches—or even exceeds—the price the trader seeks. To execute such an order, it is required that there's a counter market order on the platform that has the identical fee as the limit order.
Differences between Limit Order and Stop Limit Order
A stop limit order is a mixture of a stop limit order and a limit order. In such an application, charges are indicated—a stop charge and the limit.
Stop Limit Order Purpose
https://preview.redd.it/hlxvy9ti4zh51.jpg?width=1141&format=pjpg&auto=webp&s=064a77459a4dcb4555a885cbc56629aae10fc38b
Trade Terminal
Let's discuss how you could trade conveniently with our service.
The key features include a user-friendly interface and precise currency pair statistics (timeframe graphs, network data, trade volumes, and so forth).
The platform's top-notch advantage is handy, easy-to-analyze, customizable charts. There is also a column for quick switching between currency pairs and an order panel beneath the fee chart. Such an all-encompassing visual solution helps compare orders efficiently and in one place.
You can use the terminal in a day or night mode; when in the night mode, the icon in the upper-right corner changes and notice the Bittrex trading terminal in night mode is displayed. The main menu consists of 4 sections: Markets, Orders, Wallets, Settings.
Markets are the trade section. Bittrex allows handling over 270 currency pairs.
Orders. To see all open orders, go to Orders → Open.
To see completed orders, go to Orders → Completed.
Wallets. The Wallets tab displays many wallets for all cryptocurrencies supported by the exchange and the current balance of each of them.
After refilling the balance or creating a buy or sale order, you will see all actions in the section. Bittrex allows creating a separate wallet for every coin. Additionally, you can see how the coin price has changed, in terms of percentage, throughout the day.
Here's what you can also do with your wallets:
Hide zero balances: hide currencies with zero balance
Green and red arrows: replenish balance/withdraw funds
Find: search for a cryptocurrency
The Settings section helps manage your account, verification, 2FA, password modification, API connection, and many more.
The process of selling crypto assets follows the same algorithm. The only difference is that after choosing the exchange direction, you need to initiate a Sell order. All the rest is similar: you select the order type, specify the quantity and price, and click Sell *Currency Name* (Sell Bitcoin in our case).
If you scroll the screen, the entire history of trades and orders will be displayed below.
LONG and SHORT
You can make a long deal or a short deal. Your choice depends on whether you expect an asset to fall or rise in price.
Long positions are a classic trading method. It concerns purchasing an asset to profit when its value increases. Long positions are carried out through any brokers and do not require a margin account. In this case, the trader's account must have enough funds to cover the transaction.
Losses in a long position are considered to be limited; no matter when the trade starts, the price will not fall below zero with all possible errors. Short positions, in contrast, are used to profit from a falling market. A trader buys a financial instrument from a broker and sells it. After the price reaches the target level, the trader buys back the assets or buys them to pay off the initial debt to the broker.
A short position yields profit if the price falls, and it is considered unprofitable the price matches the asset value. Performing a short order requires a margin account as a trader borrows valuable assets from a broker to complete a transaction. Long transactions help gain from market growth; short from a market decline.
Trade via API
Bittrex also supports algorithmic trading through extensive APIs (application programming interface), which allows you to automate the trading process using third-party services.
To create an API key, the user must enable the two-factor authentication 2FA, verify their account, and log in to the site within 3 minutes.
If all the requirements of the system are fulfilled, you can proceed to generate the API key. Log in to your Bittrex account, click Settings. Find API Keys. Click Add new key (Create a new key).
Toggle on / off settings for READ INFO, TRADE, or WITHDRAW, depending on what functionality you want to use for our API key.
Click Save and enter the 2FA code from the authenticator → Confirm.
The secret key will be displayed only once and will disappear after the page is refreshed. Make sure you saved it!
To delete an API key, click X in the right corner for the key that you want to delete, then click Save, enter the 2FA code from the authenticator and click Confirm.
Bittrex Bot, a Trader's Assistant
Robotized programs that appeared sometimes after the appearance of cryptocurrency exchanges save users from monotonous work and allow automating the trading process.
Bots for trading digital money work like all the other bots: they perform mechanical trading according to the preset parameters.
Currently, one of Bittrex's most popular trading bots is Bittrex Flash Crash Buyer Bot that helps traders profit from altcoin volatility without missing the right moment.
The program monitors all the market changes in the market every second; also, it even can place an order in advance. The Bittrex bot can handle a stop loss—to sell a certain amount of currency when the rate changes in a favorable direction and reaches a certain level.
8. Secure Platform
Bittrex Global employs the most reliable and effective security technologies available. There are many cases of theft, fraud. It is no coincidence that the currency is compared to the Wild West, especially if we compare the 1800s when cowboys rushed to the West Coast of America to earn and start something new in a place that had no rules.
Cryptocurrency is still wild. One can earn and lose money fast. But Bittrex has a substantial security policy thanks to the team's huge experience in security and development for companies such as Microsoft, Amazon, Qualys, and Blackberry.
The system employs an elastic, multi-stage holding strategy to ensure that the majority of funds are kept in cold storage for extra safety.
Bittrex Global also enables the two-factor authentication for all users and provides a host of additional security features to provide multiple layers of protection.
Bittrex cold wallet: https://bitinfocharts.com/en/bitcoin/address/385cR5DM96n1HvBDMzLHPYcw89fZAXULJP
How to Pass IP Verification
To ensure higher security of your Bittrex Global account, the system requires all users to approve each new IP address through an email confirmation. This IP verification procedure is required every time you attempt to log in from a new IP Address.
Confirming your IP address.
https://preview.redd.it/rnl730z75zh51.jpg?width=971&format=pjpg&auto=webp&s=bd13fba0a844ab01cadc40003f5ea5de7439cbf9
The new IP address must be confirmed from the device that you are using to access Bittrex Global. This means that you must follow the CLICK HERE TO LOGIN link in an email on the device that you want to use to access your account.
https://preview.redd.it/tq9eje795zh51.jpg?width=607&format=pjpg&auto=webp&s=160b2ebfd1b9e0a287d4d2b99017dd45518ef2f7
To ensure even more security, Bittrex Global supports whitelisting of IP addresses and Crypto addresses. These two features can help protect the account in the event of credentials or API key loss.
How to Add IP Address to Whitelist
By setting one or more whitelisted addresses, you are telling Bittrex Global to only authorize trades or withdrawals from those IPs. This concerns both the global.bittrex.com web interface and API-based trades or withdrawals. To do this, click IP Whitelist in Site Settings.
https://preview.redd.it/m2klahja5zh51.jpg?width=971&format=pjpg&auto=webp&s=7cfb941ecb5284973baed1a2b0301459e36a0ab6
How to Add Crypto Address to Whitelist
By setting a withdrawal address, you are telling Bittrex Global to authorize withdrawals only to that address.
This concerns both the global.bittrex.com web interface and API based withdrawals.
Note that when opting into this feature, you need to specify a withdrawal address would like to withdraw funds from for every currency. To do this, click Withdrawal Whitelist in the Site Settings section. The example below shows a BTC address.
https://preview.redd.it/yrror8zd5zh51.jpg?width=974&format=pjpg&auto=webp&s=179dd7da9f6e59d3fca628cbfcd2c3962562f911
Bittrex Global is a reliable and advanced platform for trading digital assets with a respected reputation, long history, and active market presence and development nowadays. The exchange is eligible to be used globally, including the US and its territories.
The legal component of Bittrex Global is one of the most legitimate among numerous crypto-asset exchanges.
The Bittrex team has had great ambitions and managed to deliver promises and more. The exchange staff comprises forward-thinking and exceptional individuals whose success is recognized in the traditional business and blockchain sector.
Bittrex's purpose is to be the driving force in the blockchain revolution, expanding the application, importance, and accessibility of this game-changing technology worldwide.
The exchange fosters new and innovative blockchain and related projects that could potentially change the way money and assets are managed globally.
Alongside innovation, safety will always be the main priority of the company. The platform utilizes the most reliable and effective practices and available technologies to protect user accounts. Bittrex customers have always primarily been those who appreciate the highest degree of security.
Because of the way the Bittrex trading platform is designed, it can easily scale to always provide instant order execution for any number of new customers.
Bittrex supports algorithmic trading and empowers its customers with extensive APIs for more automated and profitable trading.
One of the common features which is not available on the exchange is margin trading. No leverage used however adds up to the exchange's stability and prevents fast money seekers and risky traders from entering the exchange.
Bittrex is a force of the blockchain revolution and an important entity of the emerging sector.
The full version
First part
submitted by mPrestige to revain_org [link] [comments]
I'm finalizing my portfolio for this year.
It's been a while since I made a big post. Lots of people are still messaging me about the energy sector post, especially for the ENPH tip, so I'm here to show my portfolio. I don't own all companies yet, this is partially hypothetical. I'm holding on to a reasonable cash position for a possible new downturn, but I have starting positions in most companies and will DCA.
I will try to keep it summarized, as I have done quite a lot of analysis on each of them. I'll draw the main picture and give the most important arguments for my choices, but I'm not expanding too much. If you're interested, you can DM me to talk about them more.
Let me start by saying I'm a growth investor. I always look for a combination of growth with a great track record, if possible at a reasonable price. There are exceptions as you will see below, but the main balance stays the same. I'm not a defensive investor, but no aggressive one either. My timeline is 2-5 years at least (due to a possible start of a small business), but I would gladly hold on to these companies 10+ years.
TLDR; For you guys not interested in my portfolio, I've added a short list of interesting smaller cap companies at the end, most of them trading at decent values.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ADVANCED MICRO DEVICES - $AMD
This one is becoming a blue chip, but has more than enough growth potential to live up to those high valuations. Preferred by gamers and beating their biggest competitor in the CPU market hard. While AMD and INTC were close competitors at the beginning of the 21st century, INTC took the lead by a lot. Since 2017, they introduced 7nm CPU's and GPU's and they are closing the gap fast. Not only are their chips more performant, they are also cheaper. Market cap $60B vs $261b.
Those next generation chips lead them to new partnerships, often beating INTC. Microsoft, a long time Intel customer, began using AMD chips in their Surface laptops. Lenovo using AMD for their new servers. Nvidia started using the chips in their AI products. AMD is also used by Apple's high-end laptops, while Intel (used in the budget range) will probably get replaced by Apple chips made in-house. Apart from laptops, AMD has government contracts to deliver supercomputers in 2021/2023 and they are used in both PS and XBOX consoles, to give a few examples.
For the CPU market, AMD is destined to take over, but they're also taking on NVDA for their GPU's. They have been catching up for years and in 2019 they finally made a better performing GPU in the $350-400 price range. There is a possibility to gain GPU market cap since NVDA has been pushing their prices due to the lack of competition. Therefore, with AMD stepping up their game, they need to give up market share or lower their margins.
Assets over liabilities are x1.88. Cash to debt ratio well above industry average, debt to EBITDA well below IA. ROE 17.12% and ROIC 28.06%. Earnings were growing fast before Covid (125% in Q3, 78% in Q4). Yes they're overvalued, but with their future outlook, I would always buy below $49.
Now that they are done catching up, the question is, will they outperform in the future. To gain more market share of Nvidia, they need to be better, not equally good. AMD also needs to control the heating better, as it is one of their long term problems.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
MASTERCARD - $MA
Fintech companies like SQ and PYPL are a great investment. However, a lot of big companies will (and already did) implement online financial services. MA is able to easily work with multiple of those companies and they're using their global presence pretty well, that's why they're my pick for the fintech industry.
They launched Mastercard Accelerate last year, implementing those online paying platforms and letting start-ups take advantage of their global presence to grow and transform very fast. Last year they acquired Ethoca (managing e-commerce fraud) and Vyze (platform to connect merchants with multiple renders, giving them the opportunity to get those financial needs for start-ups). MA is basically helping start-ups to grow faster, which will result in more financial transactions in the future.
Last but not least, they like to focus on expanding to countries where there isn't much competition yet. They are expanding their exposure to Middle East and Africa, working with local networks and e-commerce platforms. They are in a strong position to capitalize those regions in the future and take on market leader Visa even more.
They get compared a lot to Visa, so I'll expand on that subject a bit as well. While V is focussing on performance and speed, MA plays the cyber security card. They are already working on ways to implement cryptocurrency and Mastercard tend to have more growth potential vs stability from market leader Visa. While V is in the lead, MA is more widely used by fintech companies, which shows potential take-over in the future. Next to their credit services, they also own debit service Maestro, which is widely used in Europe.
Returns as high as 150% (ROE) and 60% (ROIC). Very large margins and perfectly stable balance sheet. High EPS growth YoY, 53% and 42% in the last two years. Quick ratio 1.87. V has more assets and even bigger margins, however MA wins in returns and cash. In terms of more growth, I like to focus on those last numbers more.
It's a blue chip at a $300B market cap. Their growth potential might be limited, although I see them as one of the better picks between blue chips.
ENPHASE ENERGY - $ENPH
I already talked about solar energy in another post, so I'm gonna skip the explanation. As some of you know my choices were ENPH and SEDG, so I'll explain a bit about why I choose ENPH here. Mainly it's because of their financials, so I'll dive that straight away.
Quick ratio - 2.35 vs 1.74
ROE - 142.94% vs 21.51%
ROIC - 85.51% vs 25.81%
Net margin - 25.81% vs 10.28%
However I think SEDG balance sheet is a lot better and safer, ENPH is working on their future more efficient. They are paving the way smoothly with bigger margins and return on investments. Although SEDG might be the better pick right now, ENPH will be the better one in a short while. ENPH is also a bit less overvalued and their PEG ratio is lower, which makes them the better pick to get in right now.
Diving into the products as well, ENPH just has the better and more efficient product. Their micro inverters are more durable (20 vs 12 years) and give the chance to increase or decrease the amount of solar panels easily, depending on your personal situation.
GALAPAGOS - $GLPG
I'm not a big fan of biotech companies, but these guys have my attention. Not because they're working on Covid vaccines, but because of two reasons. First one is them getting back-up from Gilead Sciences. That's the push they needed to start operating worldwide, increasing their potential market cap. Now that they have the cash from GILD, they can keep on buying interesting divisions and increase their growth. While having almost no long term debt, they are set pretty well with about $4 billion extra in cash.
Second, they have multiple medicines in later trial phases, with Filgotinib as their biggest one. They had a setback on those results, but the company is very confident, giving an opportunity to get them at a decent price. I wouldn't be surprised if they partner up with another big pharmaceutical company in the metabolic disease section.
High PE (84 vs 44 average), but PEG ratio is 1.2. Quick ratio 9.28. ROIC 75.91% and ROE 7%. Became profitable this year with 16.25% net margin. 38.7% YoY EPS growth.
Like all biotech players, there's a lot depending on medicines getting through phase trials and being commercialized. If Filgotinib will fail, their stock will obviously fall. However since they are backed by a big US giant, they can commercialize the product faster and on a bigger global scale if trials succeed. That's what gives them the advantage in comparison to other biotech companies for me.
WALT DISNEY - $DIS
This one has got me doubting a lot. I've taken them off and put them back on my list multiple times, but eventually I decided to keep them at least 2 years to see how they will evolve into streaming.
Biggest advantage they have on their competitors is they basically have a monopoly on kids entertainment. Kids are growing up with electronic devices and content, so they're creating customers at a very young age. That's how Coca Cola used to work. They targeted 14-16 year olds, dumping loads of money into advertising which resulted in life long customers, as people didn't change cola brands often.
Disney+ is a big hit and they won't get so much competition from other streaming services as Netflix and Roku will. They have one of the strongest defined brands out there and they know perfectly how to build and maintain their company. It's also still unclear how sports with public will evolve, but it's certain streaming will become even bigger after Covid. Therefore their money-losing ESPN acquisition could even turn into a moneymaker.
I can't really say great things about their financials. ROE is 12.67%, above 10% is decent. Assets over liabilities are x1.85 and debt to equity is 0.61. You could apply the saying "too big to fail' here, but that's about it. The bad financials are mainly caused by their big investment to streaming of course and they're working on it hard. They doubled their cash position, increasing their quick ratio from 0.75 to 0.89.
I would say financials are their weak point here. They still have to go through some bad weather this and next year I would say. Them doubling their cash position in Q1 was soothing, as I see it being the biggest issue for the future. It might be better to wait it out and keep an eye on them for next year, but I wanted to take a position already. Not higher than 8% of my portfolio though.
MICROSOFT - $MSFT
They don't really an introduction I guess. 2nd biggest player for cloud services with Azure. Naming Satya Nadella as CEO and making the transition from hardware to software in 2014 were the best decisions they could've made. Acquired the government contract with Pentagon, however there's still uncertainty about it. In short, Amazon is claiming they were about to win the contract, but Trump criticizing the company would've lead to calling off the deal. For me, that's probably the main reason why MSFT didn't fly as high as their fellow cloud competitors yet.
Assets over liabilities x1.67. ROE and ROIC respectively at 43.82% and 28.88%. Quick ratio of 2.88, 0.65 debt to equity and 1.86 cash to debt. Decent financials, great returns. Talking about blue chips, I would say MSFT is still fairly valued with a PEG ratio just below industry average. Also paying a small dividend.
The Pentagon contract allegations could be pretty negative for the company. They will probably not come back on their decision, cause if they do, MSFT will claim they already made big investments towards them and things will just keep on dragging on. Even without the contract, MSFT should be a 10 year hold while buying on dips.
INNOVATIVE INDUSTRIAL PROPERTIES - $IIPR
Haven't read a lot about them here on Reddit, but they're a very decent investment. Basically, they buy properties from cannabis companies and leases them back to the sellers, giving them the cash they need to grow faster and IIPR keeps the long term advantage of renting out those properties. They need to buy about 6-8 properties a year to keep their growth rate going and they already bought 7 this year. They still have a lot of cash ready to take advantage of the crisis.
Not only are they 20% undervalued right now, they have a lot more growth potential after that and on top of it, they pay close to 5% dividend. I'm not a big fan of betting on the best cannabis company for the future, but IIPR is a great buy to have exposure in that industry. It doesn't happen very often I come across a company that combines growth potential with a high dividend, but IIPR does.
Quick ratio 6.75, cash to debt 2.8 (while REITs have an 0.07 average). Net margins 13% above average. Assets over liabilities x4.88. Annual EPS growing by more than 150% and about 41% in the last quarter before Covid. They just missed Q1 estimates, but it was only an 8% drop from Q4, performing way better than other REITs.
IIPR has held a lot of new investment rounds, diluting shares. Of course extra capital will result in higher growth and will eventually be positive in the long run. There has been a drop in these last few days due to the announcement of selling 1 million more shares soon. I would look at it as an opportunity to get an even better price on them.
TELADOC HEALTH - $TDOC
It's the only company I don't own yet. I can't force myself to invest more than $140 per share for them, although I really like their business model. A lot of people are skipping doctors visits these days, going straight away to get medicines and counting on the advice of pharmacists. A lot of times, there's more examination needed.
Not only do I see them succeeding in their field, I see them as an essential part of the automation of the pharmacy industry. It's a useful tool in emergencies, giving advice and deciding how serious the condition is, if (fast) medical care is needed. Teladoc will also play a role in insurance and giving the employers a checking tool. 98.9% of their shares are owned by institutions.
In terms of profitability and returns, not great of course. They are estimated to get profitable in 2023. Great balance sheet, assets over liabilities x2.66. Quick ratio 6.14, cash to debt 1.06, debt to equity 0.48.
It's hard to see if a company is well managed before they are profitable. Their moat isn't very narrow, however I feel being one of the first ones gives you a big advantage in this field.
DRAFTKINGS - $DKNG
Gonna keep this one pretty short, there has been enough posts about Donkey Kong. For me, the most important factor for choosing them in this industry is their fantasy sports section. They are widely popular and that division will only get more interesting while online gambling, and especially in-game betting, gets more and more legalized in the US.
Although they realized major revenue growth in 2019, they almost doubled their earnings loss. Main reason of course having to develop their platform and system. Good thing is, their technology is highly scalable, meaning they margin will grow massively while expanding in to more states and countries. Not many ratios available yet, so that's about the only financial information I own atm.
The only negative I see is their pretty wide moat, so this one should be monitored more closely in the future. But for now, they have the momentum and are one of the most popular choices, great investment.
RAYTHEON TECHNOLOGIES - $RTX
As many of you know, two great companies (UTC and RTN) merged together in April. While United focussed on aircraft engines (Pratt & Whitney), Raytheon manufactured weapons, military and commercial electronics. They always delivered advanced technologies and them gaining multiple government contracts in the last decade is confirmation of their performant products.
Raytheon will continue to grow their leadership in different segments. Because of their diversity, they seem perfectly in place to grow even more into an aerospace & defense giant. Engines, aerostructures, avionics, sensors, cybersecurity and other software solutions are just a few examples of their working fields.
With a PE ratio of 13.58 and PB ratio of 1.41, this is probably the most undervalued stock in my portfolio. Assets over liabilities x1.43. The rest of their financials isn't that great. UTC was carrying a lot of debt, but because of the merger, it will be better balanced as RTN was only carrying $2 billion net debt. If they can decrease their debt and optimize their merger, they are set to be the new number one in defense.
It's still unclear how the merger will work out financially and logistically. In theory, they should be very well armed (pun intended) to take on LMT as market leader. Their exposure to commercial aircrafts is also a big threat, but it's less of an issue because they can make up with their other practices.
As you can see, I've tried to get the best blue chips with still some growth potential and stable growth companies together. Since a lot of companies already got mentioned on this forum, I'll include a bonus round of interesting companies I came across during my search for the best companies. I didn't include them in my portfolio mainly because I feel the chance of them succeeding and living up to their future potential is more risky than others. For you looking for higher risk, higher reward, check out these companies below.
$INMD. They offer minimally-invasive aesthetic medical products for various procedures, such as liposuction with simultaneous skin tightening, body and face contouring. They are actually the only company in my watchlist that scored maximum on my financial checklist. I love to watch their financials. While we're in an overvalued market, INMD has only 18.73 PE and 0.6 PEG. They certainly got hit by Covid, but I would be very surprised if they don't multiply their market share over the next years.
$SMCI. Based mainly on servers and storage solutions. They are the supplier for cloud computing and AI based companies. They were ranked 18th fastest growing company by Fortune Magazine in 2016, but they still have a long way possible to grow. I see them stagnating a bit for a few years, but they definitely have potential in the long run. Financially very stable, big on cash to make some acquisitions and trading at only 14.84 PE.
$CDLX. Great business model. They basically turn financial transaction data into valuable information for advertising. They show returns as high as 30:1 for advertising spent. Not only is the online payment industry growing fast, but after Covid companies will need to work their advertising budgets even more efficiently. CDLX has momentum and will increase that market cap massively. That future outlook has a price unfortunately and I feel they're too expensive right now.
$OLED. They hold patents on ultra high definition OLED screen technology. There's still a large transition going on from LED to OLED screens. They are estimated to increase their manufacturing with 50% by the end of 2021. Unfortunately most of that growth is already priced in right now. It doesn't take away the longer term potential, but it doesn't make it that sexy of a buy right now.
$OMCL. Omnicell provides pharmacy automation solutions and other tools for healthcare systems. Big on cash, low on debt. They have an interesting business and the automation of healthcare will continue to grow, however they are also trading a bit above value.
$PCOM. A technology company based on e-commerce and services through loyalty programs. Most of their partners are airlines, which explains their difficulties of getting back up since the drop. At the moment it's unsure how this will work out. There will barely be room for bargains or rewards, however while the industry has to build up again, there's an opportunity to take away long time customers from competitors. Although they have enough cash to weather this crisis, they are depending on the industry. At PE below 10 and having a decent cash position, it's worth a gamble.
$APPS. Digital Turbine offers a mobile platform mainly for new apps. They have a very high future revenue forecast of 202.2% over the next 3 years. Big on cash and no debt as well. They already acquired Mobile Posse in March, diversifying their platform. Analysts are putting an average price target of $9.88 on them, giving it a 61% potential return.
$NVMI. They develop and produce process control systems used in the manufacturing of semiconductors, mainly focussing on industrializing X-ray and optical technologies like holographic images. Cash to debt 6.1, debt to equity 0.1, quick ratio 5.75, ROE 12.83% and ROIC 20.26%. Their financials are great. The only thing you could say is they are slightly overvalued, but still a very nice buy in comparison to the overvalued tech industry.
$INS. Active in the fintech sector, they provide tech solutions and processing services. Very similar financials to NVMI. Big on cash, almost no long term debt, great returns (ROE 29.7% / ROIC 85.95%) and steady growing EPS. They are also slightly overvalued, but should easily get back to $45 range after the crisis is over.
So, that's about all I have to share. This will also be my last big post a while. Analyzing stocks has been my main occupation for the last three months, but it's time to work on opening up the hotel and bar again. I hope some of you get something out of this. I'm not a professional so always check again for yourself. I'm gonna hold on to these companies for a while now. Will add some extra capital at the beginning of 2021, so you could expect another big post about my newest findings then. For now, I'm gonna take a break from following the market day in day out and enjoy the weather a bit more.
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Ethical/SRI Criteria Series #5 - L&G Future World ESG Developed Index Fund
As each person's definition of what "Ethical" means differ and there is no black-and-white definition of "ethical", it is important to understand that some trade-offs have to be made.
In this Ethical/SRI Criteria Series, we take a look at some of the most popular Responsible Investment (e.g. Ethical, ESG, Sustainable, Impact Investing) funds and their "Ethical" investment criteria to help you make better fund selections to align with your own values.
L&G Future World ESG Developed Index Fund
The Future World funds are for investors who want to express a conviction on environmental, social and governance (ESG) themes. The funds extend LGIM's approach to sustainable investing across a broad array of asset classes and strategies.
Future World is a natural evolution of what Legal & General Investment Management (LGIM) has always done – it reflects its culture and is aligned with its investor clients' values. It seeks to identify long-term themes and opportunities, while managing the risks of a changing world.
Investors are increasingly recognising that ESG factors play a crucial role in determining asset prices, and helping to identify the companies that will succeed in a rapidly changing world – the winners of the future. As a result, sustainable investing is very much here to stay.
Hence the Future World Fund range helping to bring investments that incorporate ESG principles into the mainstream. The fund range include:
Legal & General Future World ESG Developed Index Fund (covered in this post) (Index/Passive)
Legal & General Future World ESG UK Index Fund (Index/Passive)
Legal & General Future World Multi-Index 4 Fund (Index/Passive)
Legal & General Future World Climate Change Equity Factors Index Fund (Index/Passive)
L&G Future World Global Equity Focus Fund (Active)
L&G Future World Global Credit Fund (Active)
Legal & General Future World Gender in Leadership UK Index Fund (Index/Passive)
Legal & General Future World Sustainable Opportunities Fund (Active)
Investment Methodology (ESG + T) & Screening
The objective of the Fund is to provide a combination of growth and income by tracking the performance of the Solactive L&G Enhanced ESG Developed Index (the "Benchmark Index").
LGIM's approach rests on three pillars: long-term thematic analysis, the integration of ESG considerations and active ownership.
It believes that well-managed companies are more likely to deliver sustainable long-term returns. Assessing companies on their management of environmental, social and governance (ESG) issues is an important element of risk management, and therefore part of investors' fiduciary duty.
Companies are intrinsically linked to the economies and societies in which they operate. Investors are collective owners of companies and LGIM therefore believes that it has a responsibility to the market as a whole. By incorporating ESG factors into investment decisions, LGIM believes investors can gain an element of protection against future risks and the potential for better long-term financial outcomes.
Future World "Protection List" (Negative Screening)
Through the Future World fund range companies are incentivised to operate more sustainably allowing clients to go further in integrating ESG factors into their investment strategy.
Companies are incorporated into the Protection List if they fail to meet minimum standards of globally accepted business practices. Across the LGIM-designed Future World funds, securities issued by such companies will not be held or exposure to them will be significantly reduced. The Future World Protection List includes companies which meet any of the following criteria:
Involvement in the manufacture and production of controversial weapons
Controversial weapons are those that have an indiscriminate and disproportional humanitarian impact on civilian population, the effects of which can be felt long after military conflicts have ended and often result in multi-generational humanitarian suffering. These include antipersonnel landmines, cluster munitions, biological, chemical and nuclear weapons.
There are a number of international conventions and treaties that have been developed with a view to prohibiting or limiting the use and availability of these weapons. The manufacture or production of such weapons is illegal in a number of jurisdictions globally and the involvement of companies in such weapons brings reputational risk and censure.
LGIM uses data for the identification of companies involved in the manufacture or production of controversial weapons provided by a well-known and highly respected ESG data provider.
Companies that are involved in the manufacture or production of cluster munitions, antipersonnel landmines, and biological and chemical weapons will be incorporated into the Future World Protection List. Companies incorporated into the list are involved in the core weapons system or components or services of the core weapons system considered to be tailor-made and essential for the lethal use of the weapon. Additionally, if companies are involved in the production, maintenance/service, sale/trade or research and development in relation to the core weapons system, they will also be incorporated into the list.
Perennial violators of the United Nations Global Compact, an initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies.
The United Nations Global Compact (UNGC) is a set of globally agreed standards on human rights, labour, environment and corruption which was created for the purpose of encouraging businesses worldwide to adopt environmentally and socially responsible policies. Companies whose activities breach such principles present increased investment risks due to lax governance and management of their own operations, which can lead to grave reputational damage and potential future liabilities.
LGIM uses data for the identification of companies in breach of the principles provided by a well-known and highly respected ESG data provider.
Companies that are in breach of at least one of the UNGC principles for a continuous period of three years (36 months) or more will be considered to be persistent violators of the UNGC principles and incorporated into the list.
Pure coal miners – companies solely involved in the extraction of coal
The use and extraction of coal produces significantly high levels of greenhouse gas (GHG) emissions, contributing to the accelerated warming of the planet. Pure coal companies present heightened investment risks due to the increasing regulatory pressure to limit GHG emissions globally, combined with technological advances such as renewables, which can reduce demand for coal. Due to the inability to diversify their business LGIM therefore does not see a future for this business model.
LGIM uses data for the identification of pure play coal companies provided by a well-known and highly respected ESG data provider.
Companies which derive a significant proportion of their revenues from the mining of bituminous or lignite coal, development of mining sites for bituminous or lignite coal, or the processing of bituminous or lignite coal are considered to be pure coal companies and will be incorporated into the Future World Protection List.
LGIM ESG Scoring (28 metrics) & Tilted indices
LGIM uses a proprietary ESG scoring methodology based on 28 metrics to score and monitor companies, across Environmental, Social and Governance factors, plus an extra Transparency factor - see below. It uses these scores to design ESG-aware tilted indices which invest more in those companies with higher scores and less in those which score lower, while retaining the investment profile of a mainstream index. The ESG Score is aligned to LGIM's engagement and voting activities.
28 Key Metrics used to calculate ESG Score
1. Carbon emissions intensity
LGIM considers the carbon dioxide emissions that a company produces directly ('Scope 1') or is indirectly responsible for through its purchased energy ('Scope 2'). The sum of these emissions is divided by the companies' revenue. This provides a measure of the carbon emissions intensity of a company's activities, adjusted by company size and applicable across different sectors. Data on indirect emissions from companies' supply chain and use of sold products ('Scope 3') is not used.
Companies whose carbon emissions intensity is less than the global median will receive a higher score, whereas companies with more carbon-intensive activities will receive a lower score. Carbon emissions data is provided by Trucost.
2. Carbon reserve intensity
Carbon reserves are reserves of fossil fuels (oil, coal and gas). Companies owning such reserves present investors with two long-term risks. First, if all known fossil fuel reserves were burnt, the associated carbon emissions would lead to a dramatic rise in global temperatures and extreme weather events. This would cause unprecedented disruption for companies' operations and supply chains, in addition to the significant human costs from forced migration, water stress and pressures on global food supply. The second risk, which is partly a reaction to the first, is that the value of fossil fuel assets may significantly reduce, due to the ongoing energy transition accelerated by policy and technological trends.
Companies with very large fossil fuel reserves or with very carbon-intensive reserves (e.g. coal, tar sands) are more at risk from this change.
This metric looks at the embedded carbon in the fossil fuel reserves owned by a company, divided by a company's market capitalisation, to adjust for company size. This represents a carbon reserves intensity score for a company. Carbon reserves data is provided by Trucost.
3. Green revenues
The transition to a low-carbon economy presents investment opportunities. New technologies are already leading to new revenue streams in sectors from agriculture to infrastructure and energy, with further innovation anticipated as the world develops alternatives to our current approach to energy and natural resources.
Companies who derive revenues from low-carbon services and technologies are assigned a green revenue score, in proportion to the percentage of company revenue derived from 'green' activities. This is applied as a positive uplift to the companies' score.
Companies that may have a lower score due to their exposure to carbon emissions are rewarded if they have revenue exposures to green sources. This is intended to encourage companies to drive innovation and provide solutions to the energy transition.
LGIM follows its data provider's classification of green revenue streams, but exclude carbon trading, gas- and nuclear-related activities.
Currently, many companies' disclosures are not sufficiently granular enough to identify green revenue streams. LGIM encourages companies to improve disclosures in this area.
Green revenues data is provided by HSBC.
Themes: Social Diversity and Human Capital
Social Diversity: LGIM believes that companies that are representative of their employees and society, which bring together a diversity of views, backgrounds, values and perspectives, have a better track record of innovation, decision-making and culture.
Having diverse companies also has macroeconomic benefits, as all talent within an economy is effectively utilised.
Gender has been chosen as a proxy for social diversity within a company. Data on gender is globally reported, provides an easily measured way to review total workforce and management levels, and can also serve as an indicator for a company's overall approach, as companies with strong approaches to gender diversity are also likely to have a commitment to other types of diversity.
LGIM recognises that some companies and sectors face challenges in attracting a diverse group of employees. Therefore, by looking at diversity across the different levels within a company, we seek to capture the development of a pipeline of talent. The social diversity theme tracks four indicators, looking at the percentage of:
4. Women on the board
5. Women at executive level
6. Women in management
7. Women in workforce
Across all four indicators, LGIM considers 30% gender diversity as a minimum standard, with companies below this threshold receiving negative scores. LGIM believes this represents a turning point within organisations, creating a critical mass that can influence change and impact the culture and practices of companies.
Having diversity across the workforce is important for the culture of the organisation and an indicator of the future talent pipeline for management. However, LGIM ESG scores that in most sectors and regions, gender representation is higher in the general workforce than it is at more senior levels.
Social diversity data is provided by Refinitiv.
Human Capital - Policy & Incidents: People are the most important assets for any company. Attracting and retaining the best talent, motivating them to be innovative, efficient and committed to the goal of the company is key for future success. A number of indicators can allow investors to get a sense of how companies manage the risks and opportunities associated with their workforce. LGIM has chosen to use the strength of companies' social policies, checked against social incident rates, as proxies for how companies value, respect and support their employees and workforce, and how they promote a healthy and engaging work culture.
LGIM utilises four human capital indicators to capture whether companies have sufficient policies in place with regards to below. Across each policy category, companies who are deemed to have no formal policies in place receive a negative score. Companies with a formal policy in place receive a neutral score. Finally, companies with adequate to strong policies receive positive scores.
8. Bribery and corruption policy
Occurrences of bribery and corruption can indicate issues related to culture and employees; LGIM looks for reassurance that companies are managing these risks by implementing appropriate policies.
9. Freedom of association policy
The ability of employees to freely form and join unions is a key component of a healthy work culture.
10. Discrimination policy
Attracting and supporting a diverse and inclusive workplace is critical to creating a working culture with diversity of thought to support decision-making. A strong policy against discrimination is a key element to achieving this objective.
11. Supply chain policy
The strength of the supply chain is critical for most companies and it is a crucial component of applying consistent social standards across the businesses globally. LGIM expects companies to have strong policies for their supplier relationships.
LGIM also incorporate incidents into this theme, as a high level of material incidents may indicate that current policies are either of poor quality or insufficiently enforced. As such, it considers:
12. Employee incidents
13. Business ethics incidents
14. Supply chain incidents
A penalty is applied to companies' Human Capital policy score depending on the severity of the incident.
All human capital indicators are provided by Sustainalytics.
Themes: Investor rights, board composition and audit quality
Board composition - The board of directors is the primary structure setting corporate strategy and direction, overseeing management's performance and approving the use of investor capital. Having the right composition at the top of a company is an essential element of its success. Maintaining strong corporate governance through a high quality and independent board dilutes the risk of power being concentrated in one or a few people in an organisation and ensures there are appropriate levels of accountability.
This theme is composed of data on three indicators:
15. Independence of the chair
The chair leads the board, setting agendas for the discussion and ensuring the board has the right people and the right information required to make the best decisions and hold management accountable. As set out in our global voting policy, LGIM therefore expect the chair to be independent upon appointment and throughout their tenure. LGIM assesses whether the chair is currently an executive or has been a former executive of the company. A high score is attributed to an independent chair.
16. Independent directors on the board
An independent board is critical in overseeing the management and capital of a company. LGIM acknowledges that the structure of boards varies between companies and countries. As set out in LGIM's global voting policy, it believes that having a minimum of at least 30% independent directors is an essential safeguard for minority shareholders. Companies that fall below this threshold are penalised, whilst companies with a majority of independent directors are rewarded with top scores.
17. Board tenure
Regular refreshment of the board contributes to a continued independent board with the relevant skillsets. Regular refreshment can also assist in questioning established best practices and avoid 'group think'. However, LGIM equally recognises the value of retaining corporate knowledge within a board, therefore do not wish to see too frequent change. LGIM's methodology reflects its global voting policy in that a lower score is attributed to boards with very high or very low board tenure.
Audit oversight - Having accurate and reliable financial information is the bedrock of investment decision-making and effective corporate governance.
Investors expect companies to demonstrate and explain the established processes and procedures to ensure the independence and robustness of the internal and external audit functions, and the level of oversight from the board.
18. Audit committee expertise
The audit committee plays a vital role in safeguarding investors' interests. LGIM expects all companies to have at least three independent members on the audit committee, including a "financial expert" as defined by the US Securities and Exchange Commission's rules following the Sarbanes-Oxley Act. Companies who fail to meet this minimum standard are penalised.
19. Non-audit fees paid to auditors
The extent to which auditors conduct non-audit work (i.e. consulting, IT support, etc.) for an audit client is an important proxy for independence.
Auditors should not audit their own work, and the higher margins available on the non-audit work may affect their willingness to negatively mark the accounts. LGIM does not expect excessive non-audit work to be conducted by the company's external auditors, as this will bring into question the independence of their judgment. In line with LGIM's global voting policy, the scoring methodology penalises companies when non-audit fees exceed 50% of the companies' audit-related fees.
20. Audit opinion of the accounts
An auditor's opinion provides a view into the extent to which a company's financial statements represent a "true and fair" view of a company's financial performance and position. From a score perspective, LGIM only assumes that a company is compliant when the opinion is "unqualified" (i.e. a company's financial statements are fairly and appropriately presented, without any exceptions, and in compliance with accounting standards). All other auditor opinions result in a negative score.
Investor rights - The ability of shareholders to vote is an important mechanism in the public equity markets, to demonstrate dissent and align the interests of the company and management to that of the owners. In contrast, a diminished ability to hold corporates to account weakens fundamental checks and balances.
Investor rights are therefore assessed based on two data points:
21. Free float
The greater the number of shares held by disbursed shareholders (free float), the greater the opportunities for shareholders to use their voice for influence and impact. LGIM encourages companies to have a free-float of at least 50%.
22. Equal voting rights
LGIM subscribes to the principle of 'one share, one vote', as control of a company should be proportional to the risk being borne by investors. LGIM believes this is both a fundamental right of shareholders and an essential feature of good corporate governance. Without it, investors lack the ability to influence the companies they own and have a say in how their capital is being used.
Companies are tested against three criteria:
Does the company have dual-class stocks (e.g. class A/B shares)?
Does the company implement a voting cap or ownership restriction?
Do you have to own a minimum number of shares in order to vote?
If companies violate any of these three criteria, they are deemed to have unequal voting rights and receive a lower score.
Theme: Transparency
In addition to the traditional E, S and G metrics, LGIM also assesses companies on their overall transparency. Without access to comprehensive corporate data, investors are unable to properly assess material risks and opportunities related to their investments.
23. ESG reporting standard
Analysing the company's overall reporting on ESG matters and the extent to which it conforms to international standards as well as best practices.
24. Verification of ESG reporting standards
Assessing whether the company's sustainability report has been externally verified according to a report assurance standard.
25. Carbon Disclosure Project (CDP) disclosure
Responding to relevant CDP questionnaires is an established best practice in carbon emissions reporting
26. Tax disclosure
Assessing whether the company reports taxes paid in each country of operation. The best score requires full country-by-country reporting, a moderate score is given for when some but not all taxes are disclosed, whilst a low score indicates that tax disclosure is happening in only a few or none of the countries of operation.
27. Director disclosure
Assessing the level of disclosure regarding board directors, including directors' biographies. This information is critical for investors in order to assess the skillsets and relevant experience of director nominees and the overall quality of the board of directors.
28. Remuneration disclosure
Disclosure of executive pay policy and practices is critical to allow proper analysis of the alignment between pay and performance and to ensure that the quantum of pay is both reasonable and within market standards.
Score calculation - Each of the 28 data points are assessed and scored, creating a sub-score at the theme level.
Individual themes are then aggregated to form the environmental, social, governance and transparency scores.
Companies' final ESG scores are presented between 0 and 100. A high-scoring company will have met most of our criteria for best practice; a company scoring 0 has not met any of LGIM's minimum expectations and represents a very significant concern.
Scores are updated twice a year in March and September.
LGIM's Global ESG Scores of companies - March 2020 can be found here
LGIM's objective is to effect positive change in the companies and assets in which it invests, and for society as a whole. In 2019, LGIM focused on:
LGIM supported more shareholder resolutions on climate change than any of the world's 20 largest asset managers
LGIM published its second annual ranking of climate leaders and laggards, naming 11 companies that have failed to demonstrate sufficient action, including ExxonMobil
Contributed to successful legal efforts to suspend the construction of a risky, polluting coal plant in Poland
LGIM opposed 35% of pay packages globally:
LGIM has pushed investee companies to adopt a Living Wage for their staff
In the US, LGIM opposed 352 "say on pay" votes and supported a further 32 shareholder proposals to encourage stronger compensation practices
In 2019 LGIM worked to improve gender diversity at 19 Japanese companies
51 of the 72 US companies LGIM targeted for engagement over the past three years have now appointed at least one woman to their board
LGIM did not support the election of over 190 directors at companies globally due to concerns over board diversity
Future World Funds: Climate Impact Pledge
As one of the largest asset managers in Europe, LGIM seeks to use its scale to ensure companies are playing their part to accelerate the transition to a low-carbon economy. The investment risks surrounding climate change have become so urgent that, for the first time, LGIM is going beyond solely engaging with companies in order to hold them to account on the issue.
In December 2015, 195 governments agreed in Paris to limit the increase in the average global temperature to well below 2°C above pre-industrial levels. The Climate Impact Pledge represents LGIM's commitment to address climate change by engaging directly with the largest companies in the world, which are crucial to meeting the 2°C Paris target. The companies will be assessed rigorously for the robustness of their strategies, governance and transparency.
Companies that fail to meet its minimum standards (ESG Scoring) will be removed from, or not invested in, our range of Future World funds, subject to the disinvestment process. In all other funds where LGIM cannot divest, it will vote against reappointing the chair of their board of directors, to ensure LGIM are using one voice across all of our holdings.
The companies covered by the pledge include market leaders in sectors ranging from resource mining to finance. LGIM's assessment takes into account whether they have a corporate statement that formally recognises the impact of climate change; whether they are fully transparent on their carbon contribution; how climate considerations are embedded within the corporate strategy; and whether the board composition is diverse and robust enough to drive innovation and change. LGIM will rank companies based on these criteria, and engage directly with them to improve their rankings. LGIM will also make public the names of some of the best and worst performers, alongside examples of best practices that LGIM would like to see adopted more widely.
Disinvestment Process - If companies fail to meet these criteria, and if after a period of engagement, the company has not addressed the areas of concern, LGIM will either not invest or exclude the company from active Future World funds ("Protection List"), and reduce or divest the company from Future World index funds.
In the Future World index funds, LGIM will make sure the impact of divestment is no more than the tracking error disclosed in the fund's prospectus. That could mean it will have to retain some investment in companies that do not meet its criteria in order to avoid tracking error. LGIM believes this combined approach of ranking, publicising, voting and divestment can send a powerful message to all companies that their investors are serious about tackling climate change.
Summary: LGIM's proprietary ESG Scoring using 28 key metrics of Global Companies is very impressive to see - it ensures that this is done in-house and not reliant on third-parties, hence it is more transparent and can be amended to match evolving views. I've taken the opportunity to use these ESG Scores and match them up with the L&G Future World ESG Developed Index fund's top 10 holdings below.
In addition, the width and depth of the metrics encompasses many important factors, and the fund would effectively penalise those firms with low ESG scores by tilting exposure to those with higher ESG scores. Though there's a lot of detail, I'm surprised that what's missing is the weightings between the environmental, social, governance and transparency factors (i.e. is each factor weighted equally or is E more important than say T?).
In addition to this, there is a Negative Screening overlay ("Protection List") and Active Voting/Engagement to compliment the process. For a low-cost passive/index tracking fund, this is all very good to see (and quite rare as most simply have a negative screen) and would certainly please those cost-conscious responsible investors.
Having said that, the fund size is still relatively small and the fund lacks a long track record - though this may not be a big concern for an index tracking fund.
Fund Stats
Fund Size: £126.8m as at 31/05/2020
Number of Holdings: 1292
OCF: 0.25% as at 30/09/2019
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Target benchmark: Solactive L&G Enhanced ESG Developed Index
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Top 10 Holdings & LGIM ESG Scores
Name of holding
LGIM ESG Score
MICROSOFT CORP 5.50 67
APPLE 4.10 61
AMAZON.COM 2.10 48
VISA A 1.40 72
JPMORGAN CHASE & CO 1.10 62
FACEBOOK A 1.10 47
UNITEDHEALTH GROUP 1.00 58
ROCHE HOLDING GENUSS 1.00 68
MASTERCARD A 1.00 68
HOME DEPOT 0.90 56
Sector Breakdown
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https://preview.redd.it/t7x41dc49q751.png?width=1600&format=png&auto=webp&s=a0c85ff2cea5ff217159c48b30dacc5e31be38e7
submitted by SirBanterClaus to UKEthicalInvesting [link] [comments]
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submitted by RiseExpert to u/RiseExpert [link] [comments]
submitted by Starcraftduder to stocks [link] [comments]
New user: I have a few basic questions regarding currencies, account funding and options
I have just set up an IBRK Pro account (the account is a pure cash account I did not yet opt for margin) and there are just some thing that I would need to clarify (do note that I am a new user of this particular platform but otherwise have experience in the craft):
I see how I can buy stocks, but I can not see where to buy options. A step by step would be appreciated. I have permissions for options (US), but not for stock options (whatever is the difference). [EDIT: This question relates to trading over the website and not over the TWS]
Do I need to convert my base currency (EUR) prior to a trade into another currency (USD) or does the broker do so automatically at order execution?
I saw that account funding involved me first declaring my intended transfer and then I received instructions where to transfer the cash to. Is that the normal procedure?
What are the main options trading rules for IBKR? Are ITM options cash settled or is there a stock delivery? Can one exercise an American option at any point (This question might seem stupid by I saw brokers that did not allow early exercise of American options)? If an option expires ITM and I am short the option (cash covered put / covered call position), what should I expect to happen? Does IBKR reserve "cash / options"?
submitted by De_Noir to interactivebrokers [link] [comments]
A long list of CIA atrocities.
The following article was initially published in 1997. It is in part based on the work of William Blum. Killing Hope: U.S. Military and CIA Interventions since World War II, 1995 (GR Ed. M. Ch.)
By Steve Kangas
The following timeline describes just a few of the hundreds of atrocities and crimes committed by the CIA. (1)
CIA operations follow the same recurring script. First, American business interests abroad are threatened by a popular or democratically elected leader. The people support their leader because he intends to conduct land reform, strengthen unions, redistribute wealth, nationalize foreign-owned industry, and regulate business to protect workers, consumers and the environment. So, on behalf of American business, and often with their help, the CIA mobilizes the opposition. First it identifies right-wing groups within the country (usually the military), and offers them a deal: "We'll put you in power if you maintain a favorable business climate for us."
The Agency then hires, trains and works with them to overthrow the existing government (usually a democracy). It uses every trick in the book: propaganda, stuffed ballot boxes, purchased elections, extortion, blackmail, sexual intrigue, false stories about opponents in the local media, infiltration and disruption of opposing political parties, kidnapping, beating, torture, intimidation, economic sabotage, death squads and even assassination. These efforts culminate in a military coup, which installs a right-wing dictator.
The CIA trains the dictator's security apparatus to crack down on the traditional enemies of big business, using interrogation, torture and murder. The victims are said to be "communists," but almost always they are just peasants, liberals, moderates, labor union leaders, political opponents and advocates of free speech and democracy. Widespread human rights abuses follow.
This scenario has been repeated so many times that the CIA actually teaches it in a special school, the notorious "School of the Americas." (It opened in Panama but later moved to Fort Benning, Georgia.) Critics have nicknamed it the "School of the Dictators" and "School of the Assassins." Here, the CIA trains Latin American military officers how to conduct coups, including the use of interrogation, torture and murder.
The Association for Responsible Dissent estimates that by 1987, 6 million people had died as a result of CIA covert operations. (2) Former State Department official William Blum correctly calls this an "American Holocaust."
The CIA justifies these actions as part of its war against communism. But most coups do not involve a communist threat. Unlucky nations are targeted for a wide variety of reasons: not only threats to American business interests abroad, but also liberal or even moderate social reforms, political instability, the unwillingness of a leader to carry out Washington's dictates, and declarations of neutrality in the Cold War. Indeed, nothing has infuriated CIA Directors quite like a nation's desire to stay out of the Cold War.
The ironic thing about all this intervention is that it frequently fails to achieve American objectives. Often the newly installed dictator grows comfortable with the security apparatus the CIA has built for him. He becomes an expert at running a police state. And because the dictator knows he cannot be overthrown, he becomes independent and defiant of Washington's will. The CIA then finds it cannot overthrow him, because the police and military are under the dictator's control, afraid to cooperate with American spies for fear of torture and execution. The only two options for the U.S at this point are impotence or war. Examples of this "boomerang effect" include the Shah of Iran, General Noriega and Saddam Hussein. The boomerang effect also explains why the CIA has proven highly successful at overthrowing democracies, but a wretched failure at overthrowing dictatorships.
The following timeline should confirm that the CIA as we know it should be abolished and replaced by a true information-gathering and analysis organization. The CIA cannot be reformed — it is institutionally and culturally corrupt.
The culture we lost — Secretary of State Henry Stimson refuses to endorse a code-breaking operation, saying, "Gentlemen do not read each other's mail."
COI created — In preparation for World War II, President Roosevelt creates the Office of Coordinator of Information (COI). General William "Wild Bill" Donovan heads the new intelligence service.
OSS created — Roosevelt restructures COI into something more suitable for covert action, the Office of Strategic Services (OSS). Donovan recruits so many of the nation's rich and powerful that eventually people joke that "OSS" stands for "Oh, so social!" or "Oh, such snobs!"
Italy — Donovan recruits the Catholic Church in Rome to be the center of Anglo-American spy operations in Fascist Italy. This would prove to be one of America's most enduring intelligence alliances in the Cold War.
OSS is abolished — The remaining American information agencies cease covert actions and return to harmless information gathering and analysis.
Operation PAPERCLIP – While other American agencies are hunting down Nazi war criminals for arrest, the U.S. intelligence community is smuggling them into America, unpunished, for their use against the Soviets. The most important of these is Reinhard Gehlen, Hitler's master spy who had built up an intelligence network in the Soviet Union. With full U.S. blessing, he creates the "Gehlen Organization," a band of refugee Nazi spies who reactivate their networks in Russia.
These include SS intelligence officers Alfred Six and Emil Augsburg (who massacred Jews in the Holocaust), Klaus Barbie (the "Butcher of Lyon"), Otto von Bolschwing (the Holocaust mastermind who worked with Eichmann) and SS Colonel Otto Skorzeny (a personal friend of Hitler's). The Gehlen Organization supplies the U.S. with its only intelligence on the Soviet Union for the next ten years, serving as a bridge between the abolishment of the OSS and the creation of the CIA. However, much of the "intelligence" the former Nazis provide is bogus. Gehlen inflates Soviet military capabilities at a time when Russia is still rebuilding its devastated society, in order to inflate his own importance to the Americans (who might otherwise punish him). In 1948, Gehlen almost convinces the Americans that war is imminent, and the West should make a preemptive strike. In the 50s he produces a fictitious "missile gap." To make matters worse, the Russians have thoroughly penetrated the Gehlen Organization with double agents, undermining the very American security that Gehlen was supposed to protect.
Greece — President Truman requests military aid to Greece to support right-wing forces fighting communist rebels. For the rest of the Cold War, Washington and the CIA will back notorious Greek leaders with deplorable human rights records.
CIA created — President Truman signs the National Security Act of 1947, creating the Central Intelligence Agency and National Security Council. The CIA is accountable to the president through the NSC — there is no democratic or congressional oversight. Its charter allows the CIA to "perform such other functions and duties… as the National Security Council may from time to time direct." This loophole opens the door to covert action and dirty tricks.
Covert-action wing created — The CIA recreates a covert action wing, innocuously called the Office of Policy Coordination, led by Wall Street lawyer Frank Wisner. According to its secret charter, its responsibilities include "propaganda, economic warfare, preventive direct action, including sabotage, antisabotage, demolition and evacuation procedures; subversion against hostile states, including assistance to underground resistance groups, and support of indigenous anti-communist elements in threatened countries of the free world."
Italy — The CIA corrupts democratic elections in Italy, where Italian communists threaten to win the elections. The CIA buys votes, broadcasts propaganda, threatens and beats up opposition leaders, and infiltrates and disrupts their organizations. It works — the communists are defeated.
Radio Free Europe — The CIA creates its first major propaganda outlet, Radio Free Europe. Over the next several decades, its broadcasts are so blatantly false that for a time it is considered illegal to publish transcripts of them in the U.S.
Operation MOCKINGBIRD — The CIA begins recruiting American news organizations and journalists to become spies and disseminators of propaganda. The effort is headed by Frank Wisner, Allan Dulles, Richard Helms and Philip Graham. Graham is publisher of The Washington Post, which becomes a major CIA player. Eventually, the CIA's media assets will include ABC, NBC, CBS, Time, Newsweek, Associated Press, United Press International, Reuters, Hearst Newspapers, Scripps-Howard, Copley News Service and more. By the CIA's own admission, at least 25 organizations and 400 journalists will become CIA assets.
Iran – CIA overthrows the democratically elected Mohammed Mossadegh in a military coup, after he threatened to nationalize British oil. The CIA replaces him with a dictator, the Shah of Iran, whose secret police, SAVAK, is as brutal as the Gestapo.
Operation MK-ULTRA — Inspired by North Korea's brainwashing program, the CIA begins experiments on mind control. The most notorious part of this project involves giving LSD and other drugs to American subjects without their knowledge or against their will, causing several to commit suicide. However, the operation involves far more than this. Funded in part by the Rockefeller and Ford foundations, research includes propaganda, brainwashing, public relations, advertising, hypnosis, and other forms of suggestion.
Guatemala — CIA overthrows the democratically elected Jacob Arbenz in a military coup. Arbenz has threatened to nationalize the Rockefeller-owned United Fruit Company, in which CIA Director Allen Dulles also owns stock. Arbenz is replaced with a series of right-wing dictators whose bloodthirsty policies will kill over 100,000 Guatemalans in the next 40 years.
North Vietnam — CIA officer Edward Lansdale spends four years trying to overthrow the communist government of North Vietnam, using all the usual dirty tricks. The CIA also attempts to legitimize a tyrannical puppet regime in South Vietnam, headed by Ngo Dinh Diem. These efforts fail to win the hearts and minds of the South Vietnamese because the Diem government is opposed to true democracy, land reform and poverty reduction measures. The CIA's continuing failure results in escalating American intervention, culminating in the Vietnam War.
Hungary — Radio Free Europe incites Hungary to revolt by broadcasting Khruschev's Secret Speech, in which he denounced Stalin. It also hints that American aid will help the Hungarians fight. This aid fails to materialize as Hungarians launch a doomed armed revolt, which only invites a major Soviet invasion. The conflict kills 7,000 Soviets and 30,000 Hungarians.
Laos — The CIA carries out approximately one coup per year trying to nullify Laos' democratic elections. The problem is the Pathet Lao, a leftist group with enough popular support to be a member of any coalition government. In the late 50s, the CIA even creates an "Armee Clandestine" of Asian mercenaries to attack the Pathet Lao. After the CIA's army suffers numerous defeats, the U.S. starts bombing, dropping more bombs on Laos than all the U.S. bombs dropped in World War II. A quarter of all Laotians will eventually become refugees, many living in caves.
Haiti — The U.S. military helps "Papa Doc" Duvalier become dictator of Haiti. He creates his own private police force, the "Tonton Macoutes," who terrorize the population with machetes.
They will kill over 100,000 during the Duvalier family reign. The U.S. does not protest their dismal human rights record.
The Bay of Pigs — The CIA sends 1,500 Cuban exiles to invade Castro's Cuba. But "Operation Mongoose" fails, due to poor planning, security and backing. The planners had imagined that the invasion will spark a popular uprising against Castro -– which never happens. A promised American air strike also never occurs. This is the CIA's first public setback, causing President Kennedy to fire CIA Director Allen Dulles.
Dominican Republic — The CIA assassinates Rafael Trujillo, a murderous dictator Washington has supported since 1930. Trujillo's business interests have grown so large (about 60 percent of the economy) that they have begun competing with American business interests.
Ecuador — The CIA-backed military forces the democratically elected President Jose Velasco to resign. Vice President Carlos Arosemana replaces him; the CIA fills the now vacant vice presidency with its own man.
Congo (Zaire) — The CIA assassinates the democratically elected Patrice Lumumba. However, public support for Lumumba's politics runs so high that the CIA cannot clearly install his opponents in power. Four years of political turmoil follow.
Dominican Republic — The CIA overthrows the democratically elected Juan Bosch in a military coup. The CIA installs a repressive, right-wing junta.
Ecuador — A CIA-backed military coup overthrows President Arosemana, whose independent (not socialist) policies have become unacceptable to Washington. A military junta assumes command, cancels the 1964 elections, and begins abusing human rights.
Brazil — A CIA-backed military coup overthrows the democratically elected government of Joao Goulart. The junta that replaces it will, in the next two decades, become one of the most bloodthirsty in history. General Castelo Branco will create Latin America's first death squads, or bands of secret police who hunt down "communists" for torture, interrogation and murder. Often these "communists" are no more than Branco's political opponents. Later it is revealed that the CIA trains the death squads.
Indonesia — The CIA overthrows the democratically elected Sukarno with a military coup. The CIA has been trying to eliminate Sukarno since 1957, using everything from attempted assassination to sexual intrigue, for nothing more than his declaring neutrality in the Cold War. His successor, General Suharto, will massacre between 500,000 to 1 million civilians accused of being "communist." The CIA supplies the names of countless suspects.
Dominican Republic — A popular rebellion breaks out, promising to reinstall Juan Bosch as the country's elected leader. The revolution is crushed when U.S. Marines land to uphold the military regime by force. The CIA directs everything behind the scenes.
Greece — With the CIA's backing, the king removes George Papandreous as prime minister. Papandreous has failed to vigorously support U.S. interests in Greece.
Congo (Zaire) — A CIA-backed military coup installs Mobutu Sese Seko as dictator. The hated and repressive Mobutu exploits his desperately poor country for billions.
The Ramparts Affair — The radical magazine Ramparts begins a series of unprecedented anti-CIA articles. Among their scoops: the CIA has paid the University of Michigan $25 million dollars to hire "professors" to train South Vietnamese students in covert police methods. MIT and other universities have received similar payments. Ramparts also reveals that the National Students' Association is a CIA front. Students are sometimes recruited through blackmail and bribery, including draft deferments.
Greece — A CIA-backed military coup overthrows the government two days before the elections. The favorite to win was George Papandreous, the liberal candidate. During the next six years, the "reign of the colonels" — backed by the CIA — will usher in the widespread use of torture and murder against political opponents. When a Greek ambassador objects to President Johnson about U.S. plans for Cyprus, Johnson tells him: "Fuck your parliament and your constitution."
Operation PHEONIX — The CIA helps South Vietnamese agents identify and then murder alleged Viet Cong leaders operating in South Vietnamese villages. According to a 1971 congressional report, this operation killed about 20,000 "Viet Cong."
Operation CHAOS — The CIA has been illegally spying on American citizens since 1959, but with Operation CHAOS, President Johnson dramatically boosts the effort. CIA agents go undercover as student radicals to spy on and disrupt campus organizations protesting the Vietnam War. They are searching for Russian instigators, which they never find. CHAOS will eventually spy on 7,000 individuals and 1,000 organizations.
Bolivia — A CIA-organized military operation captures legendary guerilla Che Guevara. The CIA wants to keep him alive for interrogation, but the Bolivian government executes him to prevent worldwide calls for clemency.
Uruguay — The notorious CIA torturer Dan Mitrione arrives in Uruguay, a country torn with political strife. Whereas right-wing forces previously used torture only as a last resort, Mitrione convinces them to use it as a routine, widespread practice. "The precise pain, in the precise place, in the precise amount, for the desired effect," is his motto. The torture techniques he teaches to the death squads rival the Nazis'. He eventually becomes so feared that revolutionaries will kidnap and murder him a year later.
Cambodia — The CIA overthrows Prince Sahounek, who is highly popular among Cambodians for keeping them out of the Vietnam War. He is replaced by CIA puppet Lon Nol, who immediately throws Cambodian troops into battle. This unpopular move strengthens once minor opposition parties like the Khmer Rouge, which achieves power in 1975 and massacres millions of its own people.
Bolivia — After half a decade of CIA-inspired political turmoil, a CIA-backed military coup overthrows the leftist President Juan Torres. In the next two years, dictator Hugo Banzer will have over 2,000 political opponents arrested without trial, then tortured, raped and executed.
Haiti — "Papa Doc" Duvalier dies, leaving his 19-year old son "Baby Doc" Duvalier the dictator of Haiti. His son continues his bloody reign with full knowledge of the CIA.
The Case-Zablocki Act — Congress passes an act requiring congressional review of executive agreements. In theory, this should make CIA operations more accountable. In fact, it is only marginally effective.
Cambodia — Congress votes to cut off CIA funds for its secret war in Cambodia.
Wagergate Break-in — President Nixon sends in a team of burglars to wiretap Democratic offices at Watergate. The team members have extensive CIA histories, including James McCord, E. Howard Hunt and five of the Cuban burglars. They work for the Committee to Reelect the President (CREEP), which does dirty work like disrupting Democratic campaigns and laundering Nixon's illegal campaign contributions. CREEP's activities are funded and organized by another CIA front, the Mullen Company.
Chile — The CIA overthrows and assassinates Salvador Allende, Latin America's first democratically elected socialist leader. The problems begin when Allende nationalizes American-owned firms in Chile. ITT offers the CIA $1 million for a coup (reportedly refused). The CIA replaces Allende with General Augusto Pinochet, who will torture and murder thousands of his own countrymen in a crackdown on labor leaders and the political left.
CIA begins internal investigations — William Colby, the Deputy Director for Operations, orders all CIA personnel to report any and all illegal activities they know about. This information is later reported to Congress.
Watergate Scandal — The CIA's main collaborating newspaper in America, The Washington Post, reports Nixon's crimes long before any other newspaper takes up the subject. The two reporters, Woodward and Bernstein, make almost no mention of the CIA's many fingerprints all over the scandal. It is later revealed that Woodward was a Naval intelligence briefer to the White House, and knows many important intelligence figures, including General Alexander Haig. His main source, "Deep Throat," is probably one of those.
CIA Director Helms Fired — President Nixon fires CIA Director Richard Helms for failing to help cover up the Watergate scandal. Helms and Nixon have always disliked each other. The new CIA director is William Colby, who is relatively more open to CIA reform.
CHAOS exposed — Pulitzer prize winning journalist Seymour Hersh publishes a story about Operation CHAOS, the domestic surveillance and infiltration of anti-war and civil rights groups in the U.S. The story sparks national outrage.
Angleton fired — Congress holds hearings on the illegal domestic spying efforts of James Jesus Angleton, the CIA's chief of counterintelligence. His efforts included mail-opening campaigns and secret surveillance of war protesters. The hearings result in his dismissal from the CIA.
House clears CIA in Watergate — The House of Representatives clears the CIA of any complicity in Nixon's Watergate break-in.
The Hughes Ryan Act — Congress passes an amendment requiring the president to report nonintelligence CIA operations to the relevant congressional committees in a timely fashion.
Australia — The CIA helps topple the democratically elected, left-leaning government of Prime Minister Edward Whitlam. The CIA does this by giving an ultimatum to its Governor-General, John Kerr. Kerr, a longtime CIA collaborator, exercises his constitutional right to dissolve the Whitlam government. The Governor-General is a largely ceremonial position appointed by the Queen; the Prime Minister is democratically elected. The use of this archaic and never-used law stuns the nation.
Angola — Eager to demonstrate American military resolve after its defeat in Vietnam, Henry Kissinger launches a CIA-backed war in Angola. Contrary to Kissinger's assertions, Angola is a country of little strategic importance and not seriously threatened by communism. The CIA backs the brutal leader of UNITAS, Jonas Savimbi. This polarizes Angolan politics and drives his opponents into the arms of Cuba and the Soviet Union for survival. Congress will cut off funds in 1976, but the CIA is able to run the war off the books until 1984, when funding is legalized again. This entirely pointless war kills over 300,000 Angolans.
"The CIA and the Cult of Intelligence" — Victor Marchetti and John Marks publish this whistle-blowing history of CIA crimes and abuses. Marchetti has spent 14 years in the CIA, eventually becoming an executive assistant to the Deputy Director of Intelligence. Marks has spent five years as an intelligence official in the State Department.
"Inside the Company" — Philip Agee publishes a diary of his life inside the CIA. Agee has worked in covert operations in Latin America during the 60s, and details the crimes in which he took part.
Congress investigates CIA wrong-doing — Public outrage compels Congress to hold hearings on CIA crimes. Senator Frank Church heads the Senate investigation ("The Church Committee"), and Representative Otis Pike heads the House investigation. (Despite a 98 percent incumbency reelection rate, both Church and Pike are defeated in the next elections.) The investigations lead to a number of reforms intended to increase the CIA's accountability to Congress, including the creation of a standing Senate committee on intelligence. However, the reforms prove ineffective, as the Iran/Contra scandal will show. It turns out the CIA can control, deal with or sidestep Congress with ease.
The Rockefeller Commission — In an attempt to reduce the damage done by the Church Committee, President Ford creates the "Rockefeller Commission" to whitewash CIA history and propose toothless reforms. The commission's namesake, Vice President Nelson Rockefeller, is himself a major CIA figure. Five of the commission's eight members are also members of the Council on Foreign Relations, a CIA-dominated organization.
Iran — The CIA fails to predict the fall of the Shah of Iran, a longtime CIA puppet, and the rise of Muslim fundamentalists who are furious at the CIA's backing of SAVAK, the Shah's bloodthirsty secret police. In revenge, the Muslims take 52 Americans hostage in the U.S. embassy in Tehran.
Afghanistan — The Soviets invade Afghanistan. The CIA immediately begins supplying arms to any faction willing to fight the occupying Soviets. Such indiscriminate arming means that when the Soviets leave Afghanistan, civil war will erupt. Also, fanatical Muslim extremists now possess state-of-the-art weaponry. One of these is Sheik Abdel Rahman, who will become involved in the World Trade Center bombing in New York.
El Salvador — An idealistic group of young military officers, repulsed by the massacre of the poor, overthrows the right-wing government. However, the U.S. compels the inexperienced officers to include many of the old guard in key positions in their new government. Soon, things are back to "normal" — the military government is repressing and killing poor civilian protesters. Many of the young military and civilian reformers, finding themselves powerless, resign in disgust.
Nicaragua — Anastasios Samoza II, the CIA-backed dictator, falls. The Marxist Sandinistas take over government, and they are initially popular because of their commitment to land and anti-poverty reform. Samoza had a murderous and hated personal army called the National Guard. Remnants of the Guard will become the Contras, who fight a CIA-backed guerilla war against the Sandinista government throughout the 1980s.
El Salvador — The Archbishop of San Salvador, Oscar Romero, pleads with President Carter "Christian to Christian" to stop aiding the military government slaughtering his people. Carter refuses. Shortly afterwards, right-wing leader Roberto D'Aubuisson has Romero shot through the heart while saying Mass. The country soon dissolves into civil war, with the peasants in the hills fighting against the military government. The CIA and U.S. Armed Forces supply the government with overwhelming military and intelligence superiority. CIA-trained death squads roam the countryside, committing atrocities like that of El Mazote in 1982, where they massacre between 700 and 1000 men, women and children. By 1992, some 63,000 Salvadorans will be killed.
Iran/Contra Begins — The CIA begins selling arms to Iran at high prices, using the profits to arm the Contras fighting the Sandinista government in Nicaragua. President Reagan vows that the Sandinistas will be "pressured" until "they say 'uncle.'" The CIA's Freedom Fighter's Manual disbursed to the Contras includes instruction on economic sabotage, propaganda, extortion, bribery, blackmail, interrogation, torture, murder and political assassination.
Honduras — The CIA gives Honduran military officers the Human Resource Exploitation Training Manual – 1983, which teaches how to torture people. Honduras' notorious "Battalion 316" then uses these techniques, with the CIA's full knowledge, on thousands of leftist dissidents. At least 184 are murdered.
The Boland Amendment — The last of a series of Boland Amendments is passed. These amendments have reduced CIA aid to the Contras; the last one cuts it off completely. However, CIA Director William Casey is already prepared to "hand off" the operation to Colonel Oliver North, who illegally continues supplying the Contras through the CIA's informal, secret, and self-financing network. This includes "humanitarian aid" donated by Adolph Coors and William Simon, and military aid funded by Iranian arms sales.
Eugene Hasenfus — Nicaragua shoots down a C-123 transport plane carrying military supplies to the Contras. The lone survivor, Eugene Hasenfus, turns out to be a CIA employee, as are the two dead pilots. The airplane belongs to Southern Air Transport, a CIA front. The incident makes a mockery of President Reagan's claims that the CIA is not illegally arming the Contras.
Iran/Contra Scandal — Although the details have long been known, the Iran/Contra scandal finally captures the media's attention in 1986. Congress holds hearings, and several key figures (like Oliver North) lie under oath to protect the intelligence community. CIA Director William Casey dies of brain cancer before Congress can question him. All reforms enacted by Congress after the scandal are purely cosmetic.
Haiti — Rising popular revolt in Haiti means that "Baby Doc" Duvalier will remain "President for Life" only if he has a short one. The U.S., which hates instability in a puppet country, flies the despotic Duvalier to the South of France for a comfortable retirement. The CIA then rigs the upcoming elections in favor of another right-wing military strongman. However, violence keeps the country in political turmoil for another four years. The CIA tries to strengthen the military by creating the National Intelligence Service (SIN), which suppresses popular revolt through torture and assassination.
Panama — The U.S. invades Panama to overthrow a dictator of its own making, General Manuel Noriega. Noriega has been on the CIA's payroll since 1966, and has been transporting drugs with the CIA's knowledge since 1972. By the late 80s, Noriega's growing independence and intransigence have angered Washington… so out he goes.
Haiti — Competing against 10 comparatively wealthy candidates, leftist priest Jean-Bertrand Aristide captures 68 percent of the vote. After only eight months in power, however, the CIA-backed military deposes him. More military dictators brutalize the country, as thousands of Haitian refugees escape the turmoil in barely seaworthy boats. As popular opinion calls for Aristide's return, the CIA begins a disinformation campaign painting the courageous priest as mentally unstable.
The Gulf War — The U.S. liberates Kuwait from Iraq. But Iraq's dictator, Saddam Hussein, is another creature of the CIA. With U.S. encouragement, Hussein invaded Iran in 1980. During this costly eight-year war, the CIA built up Hussein's forces with sophisticated arms, intelligence, training and financial backing. This cemented Hussein's power at home, allowing him to crush the many internal rebellions that erupted from time to time, sometimes with poison gas. It also gave him all the military might he needed to conduct further adventurism — in Kuwait, for example.
The Fall of the Soviet Union — The CIA fails to predict this most important event of the Cold War. This suggests that it has been so busy undermining governments that it hasn't been doing its primary job: gathering and analyzing information. The fall of the Soviet Union also robs the CIA of its reason for existence: fighting communism. This leads some to accuse the CIA of intentionally failing to predict the downfall of the Soviet Union. Curiously, the intelligence community's budget is not significantly reduced after the demise of communism.
Economic Espionage — In the years following the end of the Cold War, the CIA is increasingly used for economic espionage. This involves stealing the technological secrets of competing foreign companies and giving them to American ones. Given the CIA's clear preference for dirty tricks over mere information gathering, the possibility of serious criminal behavior is very great indeed.
Haiti — The chaos in Haiti grows so bad that President Clinton has no choice but to remove the Haitian military dictator, Raoul Cedras, on threat of U.S. invasion. The U.S. occupiers do not arrest Haiti's military leaders for crimes against humanity, but instead ensure their safety and rich retirements. Aristide is returned to power only after being forced to accept an agenda favorable to the country's ruling class.
In a speech before the CIA celebrating its 50th anniversary, President Clinton said: "By necessity, the American people will never know the full story of your courage."
Clinton's is a common defense of the CIA: namely, the American people should stop criticizing the CIA because they don't know what it really does. This, of course, is the heart of the problem in the first place. An agency that is above criticism is also above moral behavior and reform. Its secrecy and lack of accountability allows its corruption to grow unchecked.
Furthermore, Clinton's statement is simply untrue. The history of the agency is growing painfully clear, especially with the declassification of historical CIA documents. We may not know the details of specific operations, but we do know, quite well, the general behavior of the CIA. These facts began emerging nearly two decades ago at an ever-quickening pace. Today we have a remarkably accurate and consistent picture, repeated in country after country, and verified from countless different directions.
The CIA's response to this growing knowledge and criticism follows a typical historical pattern. (Indeed, there are remarkable parallels to the Medieval Church's fight against the Scientific Revolution.) The first journalists and writers to reveal the CIA's criminal behavior were harassed and censored if they were American writers, and tortured and murdered if they were foreigners. (See Philip Agee's On the Run for an example of early harassment.) However, over the last two decades the tide of evidence has become overwhelming, and the CIA has found that it does not have enough fingers to plug every hole in the dike. This is especially true in the age of the Internet, where information flows freely among millions of people. Since censorship is impossible, the Agency must now defend itself with apologetics. Clinton's "Americans will never know" defense is a prime example.
Another common apologetic is that "the world is filled with unsavory characters, and we must deal with them if we are to protect American interests at all." There are two things wrong with this. First, it ignores the fact that the CIA has regularly spurned alliances with defenders of democracy, free speech and human rights, preferring the company of military dictators and tyrants. The CIA had moral options available to them, but did not take them.
Second, this argument begs several questions. The first is: "Which American interests?" The CIA has courted right-wing dictators because they allow wealthy Americans to exploit the country's cheap labor and resources. But poor and middle-class Americans pay the price whenever they fight the wars that stem from CIA actions, from Vietnam to the Gulf War to Panama. The second begged question is: "Why should American interests come at the expense of other peoples' human rights?"
The CIA should be abolished, its leadership dismissed and its relevant members tried for crimes against humanity. Our intelligence community should be rebuilt from the ground up, with the goal of collecting and analyzing information. As for covert action, there are two moral options. The first one is to eliminate covert action completely. But this gives jitters to people worried about the Adolf Hitlers of the world. So a second option is that we can place covert action under extensive and true democratic oversight. For example, a bipartisan Congressional Committee of 40 members could review and veto all aspects of CIA operations upon a majority or super-majority vote. Which of these two options is best may be the subject of debate, but one thing is clear: like dictatorship, like monarchy, unaccountable covert operations should die like the dinosaurs they are.
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Margin trading refers to the practice of using borrowed funds from a broker to trade a financial asset, which forms the collateral for the loan from the broker. Margin trading defines the procedure where the individual investors or traders buys more stocks than the one can afford. This service has been provided by the stockbrokers in India . This trading involves the buying and selling of the securities in just one single time frame. This special procedure is known as the Stop Out Level. For example, if a broker's Stop Out level is 50%, the trading platform will automatically start closing your loss positions when the 50% margin level is reached. It should be noted that the trading platform first liquidates the largest loss positions. Trading on margin can be a For each trade made in a margin account, we use all available cash and sweep funds first and then charge the customer the current margin interest rate on the balance of the funds required to fill the order. The minimum equity requirement for a margin account is $2,000. Please read more information regarding the risks of trading on margin. - Margin trading allows you to take benefit of short-term trading opportunities without delivery of shares. - You can buy or sell stocks by paying a fraction of the transaction value. - Enhances your buying power, as you need to pay only a small portion of the stock value. - Grab the ultra-short term opportunity available in the markets
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Stock Market Trading for Beginners Tutorial
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