Monday, October 7, 2013

Notable Articles (Oct-7-2013)

A Step Toward ‘Peer to Peer’ Lending Securitization: Eaglewood’s 1st Lending-club collateral backed CLO, 53 mm in size, Eaglewood retained 1st loss equity tranche of 13 mm or 25%. The fund is currently less than 3x levered and, in the founder’s own words, the credit quality is solid, they have an attractive yield and a relatively short maturity. [Note: I fully support the development of this market with liberation and dis-intermediation]…Source: http://dealbook.nytimes.com/2013/10/01/a-step-toward-peer-to-peer-lending-securitization/

How Converse went from bankruptcy to a $1.4 billion business: The 105-year-old brand has grown at breakneck pace since Nike rescued the company in 2003, two years after it filed for bankruptcy. Since its cultural heyday in the ’80s, the hip sneaker has experienced a rebirth. In 2002, the flailing company reported just $205 million in revenue. Since, Nike has transformed the brand into a $1.4 billion business—and this year’s revenue is on pace to surpass that number. Converse has seen the strongest growth in the North America, China and the UK, where it’s made significant investments over the past several years. Basically, it transformed a basic canvas sneaker into a designer’s canvas. The consistent, targeted approach to advertising, and the addition of new retail stores, have helped the sneakers gain a foothold around the world. Source: http://qz.com/129238/how-converse-went-from-bankruptcy-to-a-1-4-billion-business/

A Cheap Play on a Precious Resource: Water: Barron ran an article this weekend on PICO Holdings w/ 3 businesses: water-resources, west-coast home builder, and a  canola-seet crushing company with a total of 480 mm market cap. A sale of the assets could result in prices significantly higher than the company's carrying value. In February PICO entered into an option agreement with Lincoln County water district in Nevada to sell 7,000 acre-feet of water rights for $12,000 per acre-foot, well above the company's cost. The housing market could also lift the fortunes of UCP. A fund manager values PICO at $35 a share, which assumes $15.40 a share for Vidler, $7 a share for UCP, and $7.90 a share for Northstar. The company has $116 million in cash, not including the proceeds from the UCP offering, and $150 million in debt. It's worth noting that CEO Hart is well incentivized to boost the share price over the next few years. Hart has 838,000 options with an exercise price of $33.76. The options expire in December 2015. Source: http://online.barrons.com/article/SB50001424053111903320604579107361558477556.html?mod=BOL_twm_fs

A Scientific Guide to Effectively Saying No: Your words help to frame your sense of empowerment and control. Furthermore, the words that you use create a feedback loop in your brain that impacts your future behaviors. For example, every time you tell yourself “I can’t,” you’re creating a feedback loop that's a reminder of your limitations. This terminology indicates that you’re forcing yourself to do something you don’t want to do. In comparison, when you tell yourself “I don’t,” you’re creating a feedback loop that reminds you of your control and power over the situation. It’s a phrase that can propel you towards breaking your bad habits and following your good ones. Source: http://lifehacker.com/a-scientific-guide-to-saying-no-1293242273


The Eyes Are Increasingly Dirty Windows Into the Soul: Perhaps this was something we intuitively understood, because new findings appearing in the journal Psychological Science indicate that not only does looking someone in the eye not convince them, it may actually harm your case. Eye contact, especially if someone is predisposed to disagree with you and you’re pushing them to look you back, is not persuasive at all. (This might be helpful to understand as we navigate out of the government shutdown….)… Source: http://www.psmag.com/culture/eyes-increasingly-dirty-windows-soul-67463/

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