Sorry, gold bugs. The world’s biggest money manager appears to have run out of love for the precious metal.“Fourteen months ago, we had a fairly significant position in gold. Today, we’ve reduced it to almost zero,” Russ Koesterich, the manager of BlackRock’s Global Allocation Fund.

Gold investors have this year battled against a stronger dollar <a href="/investing/index/DXY?mod=MW_story_quote">DXY, +0.04% </a>, which can make assets priced in the currency, such as gold, more expensive to overseas investors. Also working against gold, has been strengthening economies that could push central banks to tighten accommodative policies sooner than later. Investors are waiting on a Federal Open Market Committee meeting for next week.

moneyandinvestments

Money & Investments

BlackRock fund manager says he’s cut gold holdings to ‘almost zero.’ Here’s why.

Dave Nadig, director of research and CIO at ETF Trends, ETF Database, told ETF Wrap that although the proposal, if it is realized would represent “a significant blow to the advantage ETFs have traditionally enjoyed vs. mutual funds,” he sees ETFs still maintaining a number of benefits.Those benefits include “generally cost, flexibility and tradability, transparency,” wrote Nadig.“So it’s hardly a ‘ETFs are dead’ situation. It just removes one particular advantage,”

ETFs are dead?

Proponents of ETFs make the case that those funds have democratized access to the market, giving investors of all stripes the ability to gain access to areas and strategies that they would not easily get access to without paying hefty fees.Invesco makes the case that more than 50% of those born between 1981 and 1996 consider ETFs the primary investment type in their portfolios.Advocates of ETFs also note that longer-term holders would likely see the greatest harm under the Wyden proposal.

The battle is on

“CFRA believes all things being equal, investors should consider the cheap ETFs in a broad investment style. But with ETF investing, things are usually not equal,” the analyst writes. <ul><li><a href="https://www.etfstream.com/news/vaneck-to-merge-global-equity-etf-into-esg-equivalent-following-string-of-outflows/">VanEck to merge global equity ETF into ESG equivalent following string of outflows </a>(ETFStream.com) </li><li><a href="https://www.fool.com/investing/2021/09/16/this-crypto-etf-could-help-grow-retirement-account/">This Crypto ETF Could Help Grow Any Retirement Account </a>(Motley Fool) </li><li><a href="https://www.bloomberg.com/news/articles/2021-09-14/fidelity-pushed-for-bitcoin-etf-approval-in-private-sec-meeting">Fidelity Pushed for Bitcoin ETF Approval in Private SEC Meeting </a>(Bloomberg) </li> </ul>

Why the $5.4 trillion ETF market faces its biggest crisis since inception

Semiconductor ETFs have been rallying this year and are hitting new peaks on several occasions. This is especially true as the pandemic has bolstered demand for chips in leaps and bounds, leading to the worst global shortage in many years.

The demand is likely to continue to trend higher given the increased digitization in various corners like healthcare, transport, financial systems, defense, agriculture and retail among others.The rapid adoption of cutting-edge technology like cloud, Internet of Things, autonomous cars, gaming, wearables, VR headsets, drones, virtual reality devices, artificial intelligence, cryptocurrencies, 5G and other advanced information technologies should continue to fuel growth.

The global semiconductor market is expected to grow 12.5% year over year to reach $522 billion in 2021, according to the International Data Corporation. Per the World Semiconductor Trade Statistics (WSTS), the worldwide semiconductor market is expected to surge 25% in 2021 following 6.8% growth in 2020. All major product categories will likely see increases with memory set to register the largest revenue growth of 37.1%, followed by 29.1% growth in the analog segment and 26.2% in logic (read: 4 Chip ETFs You Should Not Ignore).

Further, the semiconductor space has also been witnessing mergers and acquisitions, providing a boost to stock prices. Advanced Micro Devices AMD has agreed to buy field-programmable chipmaker Xilinx XLNX for $35 billion while Western Digital WDC is planning to merge with Japan’s Kioxia in a deal exceeding $20 billion. Nvidia NVDA is also in the process of acquiring UK-based chip designer Arm Ltd from Japan's SoftBank Group Corp for about $40 billion.

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. companies that design, manufacture and distribute semiconductors. The fund has amassed $7.4 billion in its asset base and trades in a solid average volume of around 668,000 shares a day. It charges 43 bps in fees a year from its investors (read: Semiconductor ETF Hits New 52-Week High).

iShares PHLX Semiconductor ETF SOXX

This fund provides exposure to 25 securities by tracking the MVIS US Listed Semiconductor 25 Index. The product has managed assets worth $6 billion and charges 35 bps in annual fees and expenses. It is heavily traded with volume of around 3.1 million shares per day.

VanEck Vectors Semiconductor ETF SMH

This fund tracks the S&P Semiconductor Select Industry Index, holding 40 stocks in its portfolio. It has amassed $1.1 billion in its asset base while trades in an average daily volume of about 53,000 shares. It charges 35 bps in fees per year.

SPDR S&P Semiconductor ETF XSD

This fund tracks the Dynamic Semiconductor Intellidex Index, holding 31 securities in its basket. It has AUM of $696.2 million and sees moderate average daily volume of 31,000 shares. The expense ratio is 0.57% (read: Chip Shortages: ETF Winners and Losers).

Invesco Dynamic Semiconductors ETF PSI

This fund offers exposure to the most-liquid U.S. semiconductor securities based on volatility, value and growth by tracking the Nasdaq US Smart Semiconductor Index. Holding 30 stocks in its basket, FTXL has accumulated $77.5 million in AUM. The average trading volume is light at around 7,000 shares and expense ratio is 0.60%.

First Trust Nasdaq Semiconductor ETF FTXL

Semiconductor ETFs have been rallying this year and are hitting new peaks on several occasions.

Semiconductor ETFs Soaring to New Heights

In order to define Blockchain, it is better to explain what problem it solves. In the current system, transfering funds involve a third party (a bank). All a bank does is register an entry. Neither you nor the recipient controls or owns the entry in the register.There is a way to maintain the register among ourselves without involving a middleman - with blockchain.

Blockchain: What problem it solves

The requirement of this method is that there must be enough people who would like not to depend on a third-party.  Only then this group can maintain the register of transactions on their own.

How Blockchain works 

You need a few individuals who want to give up on banks or any third party. By mutual agreement, they have details of each other's accounts without knowing the identity of the other parties.Everybody holds an empty folder with themselves to start with. As they progress, all these individuals will keep adding pages to their currently empty folders. And this collection of pages will form the register that tracks the transactions.

An Empty Folder

In a transaction, one person tells everyone in the group that he wants to transfer money to another person. Everyone writes the transaction down, see that the person can indeed transfer the money and has enough balance.With time, more people want to transfer money to others. Whenever anyone wants to make a transaction, they announce it to everyone, and everyone writes it down on their page. This continues until everybody runs out of space to record transactions, then they take a new page and start again.

When A Transaction Happens

Before the page is put away in the folder, it is sealed with a unique key that everyone in the network agrees upon so that no one can make changes. By sealing it with encryption, no one can make any changes to it. This sealing of the page is the crux of this method. Blockchain can be viewed in the following way: Think of a single page as a Block of transactions. The folder is the Chain of pages (Blocks).

Putting Away The Page

Unless you’re hiding under the rock, I am sure you’d have heard of Bitcoins and Blockchain. After all, they are the trending and media’s favorite topics these days — the buzzwords of the year. Even…

crypto

Cryptocurrency

Discover the world of business and economics.

economics

Economics

technologyandthefuture

Technology & The Future

WTF is The Blockchain?

Success is a lousy teacher. It seduces smart people into thinking they can’t lose.

Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people. Money—investing, personal finance, and business decisions—is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.

habits

Habits

books

Books

Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people. Money—investing, personal finance, and business decisions—is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.

Morgan Housel is a partner at The Collaborative Fund. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers, winner of the New York Times Sidney Award, and a two-time finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism. He lives in Seattle with his wife and two kids.

Morgan Housel

The Psychology of Money

When banker's get together for dinner, they discuss art and when artists get together for dinner, they discuss money

Joseph Benesh suggests artists and bankers can benefit through conversations about art and money.

personaldevelopment

Personal Development

problemsolving

Problem Solving

teamwork

Teamwork

leadershipandmanagement

Leadership & Management

Benefits of Communication Between Artists and Bankers

Saving your money is stupid. Inflation will eat away at your money. You make money when you invest what you have in real assets.

 Invest your money rather than save

You can overcome the attack on your purchasing power when you learn about inflation hedge assets.Governments print money to fight recessions, and fund wars. When they do, they take away the purchasing power of the money you have earned. The only way to repay the huge debt the US Government has racked up for example is by either: 1) Raising taxes 2) Printing money out of thin air.

 Understand the idea of purchasing power

Learn to make a difference rather than a profit.Have money allow you to buy back your time, instead of spending money on things that create a never-ending trail of debt. Make the acquisition of wealth secondary. Focus on how you can be helpful. Get excited by all the people you can meet and do life with.

Lose all of your money

Content creators are part of one of the biggest wealth transfers in history. Everything is content. Storytelling through words, videos, audio, photography and illustrations is a booming business.

Become a content creator

I’ve worked in finance and spent years learning about assets — particularly digital assets. People ask me via social media how I made enough money to face retirement in the next five years. They seem…

career

Career

How To Make Enough Money to Retire in the Next 5 Years

Any coin other than Bitcoin is considered an altcoin.<ul><li>There's a huge variety in the altcoins available, from large-cap coins like Ether and BNB to tokens from newly launched projects. </li><li>Altcoins have traditionally been associated with ERC-20 tokens on Ethereum and the native tokens of other large blockchains.</li></ul>

What is an altcoin?

While Bitcoin (BTC) is the largest market cap coin and the most well-known cryptocurrency, you should diversify your investment portfolio as a responsible investor.To do this in the crypto world, you're going to need to purchase altcoins. <ul><li>You can reduce your overall risk by exposing your cryptocurrency portfolio to different coins and sectors in crypto, like Decentralized Finance (DeFi) or GameFi. This way, if Bitcoin crashes in price, your other crypto investments may balance out some of the losses.</li></ul>

Why should I invest in altcoins?

<ul><li>Ethereum (ETH)</li><li>Solana (SOL)</li><li>Polkadot (DOT)</li><li>Binance Coin (BNB)</li><li>Meme coin: Dogecoin (DOGE)</li><li>Stablecoins: BUSD / USDC</li><li>DAI</li><li>Uniswap (UNI)</li><li>PancakeSwap (CAKE)</li></ul>Don’t Risk More Than You Can Afford to Lose!

Altcoins To Diversify Your Portfolio

Want to start investing in altcoins but not sure how? Here are 9 altcoins across DeFi, stablecoins, and more in the crypto space to create a diversified portfolio.

Hiring means we failed to execute and need help. 
First, let me quell a misconception. Hiring is not a consequence of success. Revenue and customers are. Hiring is a consequence of our failure to create enough leverage (see <a href="https://medium.com/@henrysward/eshares-101-e96d792bdc69#.ww37jmxxz">eShares 101</a>) to grow on our own. It means we need outside help. The perfect business is a computer plugged into the internet. Anything more is just overhead.

Hiring Principles

We rationalize this behavior with “lies we tell ourselves.” Here are a few lies people use to keep an ineffective employee: <ul><li>He is trying really hard. </li><li>She deserves another chance. </li><li>People really like her. </li><li>I feel bad for him. </li><li>He’s good at other things. </li><li>He has stuff going on in his personal life </li><li>She is in the wrong role. </li></ul>

Lies We Tell Ourselves

Much like startup performance follows a power law, so do startup employees. The most effective employees create 20x more leverage than an average employee. This is not true in an efficiency company — the best employees might work 2x faster than their peers. But in a high-leverage startup like ours, the effectiveness gap between employees can be multiple orders of magnitude.

Employee effectiveness is a power law

Most companies hire by consensus and committee. In a committee of N, each positive vote is worth 1/N of a hiring decision. However, one negative vote will reject a candidate. No matter how a strong a voter’s conviction, their vote will never count more than 1/N. Conversely, the slightest negative view will kill a hire. Consensus optimizes for employees with the fewest objections (least weaknesses). It works well to reduce False Positives but creates many False Negatives.**

Hire for Strength vs Lack of Weakness

When eShares was a company of one, me, our culture was “my culture”. My culture was quickly replaced by the culture of the first ten employees. I couldn’t stop it if I tried — I was outnumbered 10 to 1. Today, the 37 of you that joined us since have vastly outnumbered the first ten. And thank goodness! Our culture today is far better than it was when we were ten and infinitely better than when it was just me.

Culture-contributors are better than culture-fitters

It is important to note that Trajectory and Experience are not opposites. Trajectory is the first (and second) derivative of Experience. Most candidates have both and both are important. But Trajectory is far more valuable. Our job is not to hire for Experience. That’s what everyone else does. Our job is to hire people whose Trajectory will explode when they join eShares, pulling us along with them.

Hire for Trajectory vs Experience

The best predictor of a successful new hire at eShares is if they like to get their hands dirty. Whether it is writing code, building spreadsheets, calling customers, or stocking the fridge. This is true at every level. Our senior managers are hands-on, care about details, and are not afraid to roll up their sleeves. They don’t last long otherwise.

Hire Doers vs Tellers

This doesn’t mean expertise isn’t important. We are a company of specialists, not generalists. Each of us is an expert, or becoming an expert, in our domain. You cannot be successful at eShares without being an expert at something.

Hire Learners vs Experts

In our short history, our best hires were very Different from the team that hired them. They don’t seem Different now because they expanded our culture. They changed what Different looked like.There is a deep and natural human bias to hire people “like us.” Fight this bias. Hiring Similar means we value repeatability and efficiency over creativity and leverage.

Hire Different vs Similar

For most of this talk, I have talked about signals to hire. I’ll conclude with a signal to not hire. Confidence and ego are opposites. Modesty and humility are traits of the strong. Ego and arrogance is a disease of the weak and insecure. The truly confident don’t need people to know they are great. They are happy to know it themselves. And the truly Great use their greatness to make those around them greater.

Always pass on ego

Simple tips to determine if your candidates have the behavioural traits and skills needed for the role

business

Business

communication

Communication

Hiring the Best in Class

Below is an excerpt from a talk I gave at the eShares Town Hall in November 2015. I hope it is helpful to other CEOs struggling with hiring. Hi everyone. As you know, I have opened 27 new headcount…

productivity

Productivity

corporateculture

Corporate Culture

How to Hire

From a venture capitalist’s point of view, the ideal entrepreneur:<ul><li>delivers sales or technical advances such as FDA approval with reasonable probability,</li><li>tells a compelling story and is presentable to outside investors,</li><li>recognizes the need for speed to an IPO for liquidity,</li><li>has a good reputation and can provide references that show competence and skill,</li><li>understands the need for a team with a variety of skills and therefore sees why equity has to be allocated to other people,</li><li>works diligently toward a goal but maintains flexibility,</li><li>gets along with the investor group.</li></ul>

An Ideal Entrepreneur

Venture capital plays only a minor role in funding basic innovation. In 1997, VCs only invested 6%, or $600 million, went to startups. Around $1 billion of the total venture-capital pool went to R&D.The majority of VC capital went to follow-on funding for projects originally developed through the far greater expenditures of governments ($63 billion) and corporations ($133 billion).A venture capitalist buys a stake in an entrepreneur’s idea, nurtures it for some time, and then exits with the help of an investment banker.

VCs(Venture Capitalists) : A Primer

VC funds have investors in large institutions like pension funds, insurance companies and financial giants. They place only a small fraction of their funds into startups and high-risk investments. More than good people or good ideas, VCs look for good industries to invest in.

Sufficient Returns at Acceptable Risk

The initial period in a company’s life cycle in a profitable industry is a time of accelerated growth, except for the concept stocks that are experimental and require a lot of burning capital.By investing in areas with high growth rates, VCs allocate their risks to the ability of the company’s management to execute. VC investments in high-growth segments are likely to have exit opportunities because investment bankers are continually looking for innovative high-growth issues to bring to the market.

Timing Is Everything

Any basic deal structure has the same logic: Giving the investors in the VC fund both ample downside protection and a favourable position for additional investment if the company proves to be a winner.

Logic In The Deal

The venture capital industry has four main players: entrepreneurs who need funding; investors who want high returns; investment bankers who need companies to sell; and venture capitalists who make money for themselves by making a market for the other three. The VC firms protect themselves from risk by investing with other firms, enabling portfolio diversification.

How The VC Industry Works

Funds are structured to guarantee partners a comfortable income while they work to generate those returns. The venture capital partners agree to return all of the investors’ capital before sharing in the upside. However, the fund typically pays for the investors’ annual operating budget—2% to 3% of the pool’s total capital—which they take as a management fee regardless of the fund’s results. The real upside lies in the appreciation of the portfolio. The investors get 70% to 80% of the gains; the venture capitalists get the remaining 20% to 30%.

Attractive Returns for the VC

Assuming that each partner has a typical portfolio of ten companies and a 2,000-hour work year, the amount of time spent on each company with each activity is relatively small.  If the total time spent with portfolio companies serving as directors and acting as consultants is 40%, then partners spend 800 hours per year with portfolio companies. This allows the VCs only 80 hours per year per company—less than 2 hours per week.

How Venture Capitalists Spend Their Time

Venture-funded companies attract talented people by appealing to a “lottery” mentality. Despite the high risk of failure in new ventures, engineers and businesspeople leave their jobs because they are unable or unwilling to perceive how risky a start-up can be.  Their situation may be compared to that of hopeful high school basketball players, devoting hours to their sport despite the overwhelming odds against turning professional and earning million-dollar incomes.

The Upside for Entrepreneurs

By understanding how venture capital actually works, astute entrepreneurs can mitigate their risks and increase their potential rewards. Many entrepreneurs make the mistake of thinking that venture capitalists are looking for good ideas when, in fact, they are looking for good managers in particular industry segments.

Minimizing Risk

The value of any individual to a VC is a function of the following conditions:<ul><li>the number of people within the high-growth industry that are qualified for the position;</li><li>the position itself (CEO, CFO, VP of R&D, technician);</li><li>the match of the person’s skills, reputation, and incentives to the VC firm;</li><li>the willingness to take risks; and</li><li>the ability to sell oneself.</li></ul>

The Value Of An Entrepreneur To VCs

Before you can understand the industry, you must first separate myth from reality.

entrepreneurship

Entrepreneurship

startup

Startups

How Venture Capital Works

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