Vol. 3, No. 18 — This ain’t a scene, it’s an Arms race
Bankers have stuck a hefty price tag on Arm Limited; No commodity backs it, but paper money still has well-defined value; China's real estate market is collapsing; Value in lithium batteries
In this issue
Quote from Walter Bagehot
Cartoon: Jackson a***hole
This ain’t a scene, it’s an Arms race
The value of fiat money
Cost of capital
Regions and sectors
Stock screen
Debt cycle monitor
Investment idea
Read time: 28 minutes
Quotation
“Life is a compromise of what your ego wants to do, what experience tells you to do, and what your nerves let you do.”
― Walter Bagehot
Cartoon: Jackson a***hole
Last week, Jerome Powell, the Chairman of the Federal Reserve, gave his annual speech at Jackson Hole. Here's the summary...
This ain’t a scene, it’s an Arms race
Bankers have stuck a hefty price tag on Arm Limited. But it doesn't matter. The market will pay up.
•••
Fall Out Boy, an American punk-pop band, said it best when they sang:
"And don't really care which side wins
Long as the room keeps singing
That's just the business I'm in"
— This Ain't a Scene, It's an Arms Race, Fall Out Boy, 2007
Bankers should re-listen to some '00s pop-punk—there are lessons in there. Taking a company public is lucrative. It doesn't matter which side wins as long as you ensure the markets keep dancing.
Masayoshi Son, a tech investor from Japan who runs Softbank, has been listening too. Arm Limited, a semiconductor company Softbank owns, filed to go public the other week. But bankers have attached a hefty $64bn price tag to the company. The price is overcooked, but that doesn't matter. The market will accept it as chip-maker valuations are sky-high.