As another week passes, we call upon our editors to once again enlighten us with some of their favourite stories that made the press. Whether it’s something educational that is of interest, or something more fun, you can count on the Finance Magnates editorial team to fill you in on some recommended reading material.
Steven Hatzakis begins with an article he came across which provides a simple explanation of investment banking…
A Simple Explanation of Investment Banking
An article that caught my eye this week put into simple perspective what the essence of investment banking means, using a
simple analogy and comparing it to consulting, as explained in a Business Insider (BI) post. A Goldman Sachs’ analyst, Alan Li, had just finished up a two-year program at the investment bank and explained his views in a podcast.
The article cited Mr. Li explaining in his podcast, “I like to compare it to a consulting firm because everyone understands what consulting firms do. A consulting firm has a project or an assignment from a client and they make an action or they make a plan and recommend it to their client.”
Mr. Li added: “An investment bank does something very similar. They do provide advice to their clients, but they usually do it through more of a financial lens. So using Excel a lot more, providing valuation advice – and they actually see the deal through to the very end.
So if a company is going public, an investment bank is not going to recommend them to go public, and that’s it; an investment bank is going to take them through every step of the way until the company is public, and even after they’re public, they still maintain a relationship with the client and provide them with other services that they need.”
Whether its for an IPO or when mergers and acquisitions are announced, or helping to raise venture capital/private equity investments for millions or billions of dollars into emerging and/or mature fintech companies, large companies need guidance the same way smaller firms or investors seek professional investment advice.
I thought this article was interesting because quite often prominent advisors are used to helping provide guidance (consulting) on large transactions yet their role may appear opaque to outsiders, and this was aptly explained by Alan Li in simple words.
Victor Golovtchenko continues with an article he read in the New Yorker…
Bernie Sanders’ Demands for Hillary Clinton’s Endorsement
An article in the New Yorker points out the price that Hillary Clinton has had to pay in order to get the endorsement of
Bernie Sanders – raising minimum wage, free tuition at state colleges and universities for some families and more unfunded liabilities for the U.S. government via Medicare expansion.
Hillary Clinton is shifting left of the center at a time when crucial fiscal decisions are going to have to be taken in the coming years.
With the rising deficits of the U.S. government, the last thing that the new administration would be able to warrant is more spending, yet some of the policy endorsements which Bernie Sanders has come to demand are pushing the government into the opposite direction.
A $15 federal minimum wage requirement is likely to stifle growth at small and medium sized businesses as big companies such as McDonalds are already shifting to automation in order to avoid paying higher salaries.
Until the cost of credit is close to zero thanks to the policy adopted by the Federal Reserve, U.S. income inequality is set to continue rising.
In the meantime, the realization that the income gap issue that has been at the core of the campaign of Bernie Sanders is caused by the government’s own policy levers, is nowhere in sight.
And finally, Avi Mizrahi picks up on the latest Pokémon Go craze…
Pokémon Go the AR Craze Taking Over the World
If you have a habit of checking Reddit every day for subjects you care about, like me, you must have noticed all this Pokémon spam recently. It seems everyone is talking about this children’s anime series and posting photos of the Japanese pocket
Boosting Profits in Low FX VolatilityGo to article >>
The reason for this is Pokémon Go, a new augmented reality (AR) game that lets players interact with the characters in the real world. The free app has very quickly become the top seller on the Apple store and sent Nintendo’s stock skywards – already increasing the value of the gaming developer by $9 billion.
Now I personally never liked the franchise but I have been following AR for a while and it’s wonderful to see it succeed. From the adoption figures it seems Nintendo finally cracked the secret to making it mainstream. No goofy glasses needed, just another layer on top of the prism that we all already use to see the world-our mobile phones.
Everyone is writing about Pokémon Go now so you can read about it on just about any site but I found this Guardian piece to be simplest for someone that has no prior knowledge on it.
That wraps up another week of stories that our editors are reading.
Feel free to share your views in the comment section and any recommendations of your own. We’d love to hear your opinions!
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