The world is experiencing some of the most epic shifts in business and lifestyle in 100 years. What’s happening now and what does it mean for investors?
Jeff Bezos Cashes Out Amazon Stock
Amazon’s stock price is one of the few that did well in the first half of 2020. Yet, despite a stock market which has continued to survive on the fumes of hope Jeff Bezos has been cashing out. In August 2020 the online retail giant founder sold another $3.1B of his stock in the company. That’s on top of an even larger dump earlier in the year. Bringing the total shedding of his stock this year alone to over $7B. This could be a wake up call to other investors to finally make the move to more reliable investments in different sectors.
Ellie Mae Gets Bought For $11B
In an epic flip that could have many future ramifications for the industry, the private equity firm that bought mortgage software platform Ellie Mae for just $3.7B last year has announced it is being bought by the owner of the New York Stock Exchange for $11B. The deal includes $9.25B in new debt to finance the deal and $1.75B in stock.
The FHFA has announced that it has directed Fannie Mae and Freddie Mac to suspend foreclosures until at least August 31st, 2020. Various other protections may be enacted at state, county and municipal levels. Note that this does not cover all mortgage loans. Many borrowers have not received help, and some lenders have seemed eager to foreclose to take advantage of rising property prices and demand.
UK Funds Freeze
UK investment funds began freezing withdrawals as far back as December 2019 due to political uncertainty around Brexit. This activity seems to be continuing, with at least $25B frozen in the market. This may help strengthen the market and values over the long term, though is certainly motivating international investors to divert more funds to the US where the yields are greater and there continues to be more liquidity.
Taxes, Taxes, Taxes
Increased stimulus measures, cleanup after civil unrest, countermeasures to combat COVID-19 and other factors are all poised to slam Americans with potentially equally as monumental tax hikes. All of this needs to be paid by someone. That is the American taxpayers. This could show
up in many forms, including soaring local property taxes and a proposed 60% windfall tax on billionaires.
While many things are changing out there, the most successful also recognize the secret to great investing is not just moving ahead of trends, but to invest in what is not going to change. Those things include the need for housing, financing and debt, and good people to provide solutions amongst the chaos. How are you reallocating your portfolio this quarter?
Find out more about investing in secured debt and real estate, go to NNG Capital Fund