SPAC Attack
SPAC Attack
A wave of Special Purpose Acquisition Companies (SPACs) has hit the market this year. Also known as “Blank Check Companies,” a SPAC is created with the express purpose of making a future unknown acquisition. Typically, a SPAC’s management team has a certain amount of time (usually two years) to complete a transaction or all money (minus certain fees) must be returned to its investors. Because of the time limits, management teams are incentivized to get a deal done, regardless of the price paid. The pressure to complete a transaction often results in overpriced and poorly conceived acquisitions. Usually, the shareholder returns from these deals are lousy, and SPACs have earned deservedly poor reputations as an asset class. Since the targets of most SPACs are a combination of privately-held, low-quality companies, or companies with no revenue yet, the investment risk is very high. SPAC targets are able to avoid the enhanced scrutiny involved in the initial public offering (IPO) process. Therefore, going public via a SPAC is the preferred route for companies not yet ready for “prime time.” In past market cycles, a boom in SPACs tended to coincide with higher risk tolerance and increased optimism, two investor characteristics observed at market tops. Similarly, today’s near-zero interest rates have coaxed many investors to reach for outsized returns. At First Fiduciary, we do not invest in SPACs. In our view, it makes significantly more sense to invest in a diversified portfolio of high quality companies that can grow and compound value over many years. By sticking with our investment process, we strive to enable our clients to meet their investment goals without undertaking imprudent risk.
Bill Henry named Five Star Wealth Manager
First Fiduciary Portfolio Manager, Bill Henry, was recently honored as a 2020 Five Star Wealth Manager. Bill’s selection was announced in The Plain Dealer, which partnered with Five Star Professional, a third party research firm tasked with finding wealth managers who go above and beyond to provide quality services to their clients. Client retention rates, client assets administered, firm review, and a favorable regulatory history are a few of the criteria used to identify the best of the best. Self-nominations are not accepted. 1,548 Cleveland area wealth managers were considered for the award; 62 (4% of candidates) were named 2020 Five Star Wealth Managers.
In today’s volatile environment, it is harder than ever to navigate one’s financial world. Whether it is determining the optimal asset allocation to suit a client’s needs, carefully investing and monitoring investment holdings, implementing an effective tax minimization strategy, or creating and following an achievable financial plan, Bill devotes his efforts to the services deemed most important to each client. In addition, Bill offers his opinions and creative suggestions to help clients solve their unique problems and situations.
Link to announcement.
Articles We Liked:
Master of None?
MasterClass is a popular e-learning company that lets personalities like Steph Curry and Spike Lee teach classes in their fields of expertise. An enterprising writer took all 81 classes and reported on his results.
Boss of the Beach
Interesting profile on the man who was in charge of the lifeguards for New York City area beaches for 40 years. He was equal parts politician and field general.
Poker Champion
Can someone with no poker experience quickly become a champion by learning from an all-time great? One journalist and aspiring poker pro tried to find out.
Carl Reiner Obit
The legendary comedic writer and actor Carl Reiner died in June at age 98. Long-time pal Steve Martin shares some of his favorite memories of his friend and colleague.
Plant-Based Vaccine
The tobacco plant may be helpful in stopping the coronavirus.
Microsoft and Work-from-Home
Microsoft analyzed work-from-home data to see how companies and employees were changing their workflow. In a remote world, work meetings are getting shorter (majority under 30 minutes), but they’ve been replaced by social meetings (such as “virtual happy hours”) as people still seek human connections.
Notable Reads:
The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company
by Robert Iger
Don’t be fooled by the first few pages of Disney Chairman Robert Iger’s autobiography. This engaging quick read is not primarily a “how-to” guide for aspiring leaders. Rather, it is an insightful account of Iger’s rise from a studio supervisor at ABC to the helm of the world’s largest entertainment company. Iger’s smarts, patience and skill at building relationships guided him to become the head of Disney in the wake of Michael Eisner’s diminishing status as CEO. The company Iger took over was in need of a rapid turnaround and Iger engineered a brilliant revival of Disney’s fortunes. The book is of particular interest because it details the inner workings of Disney’s transformative acquisition of the entertainment assets of 21st Century Fox. At the time of the purchase, both Disney and Fox were First Fiduciary portfolio holdings as was Fox’s other major suitor, Comcast. I hope that Iger writes a second autobiography focused on passing the CEO reins to Robert Chapek and navigating the challenges of launching Disney’s direct-to-cable offering, Disney+, just as Covid-19 forced the closure of Disney’s theme parks, stopped production of most live-action entertainment and shuttered the sports that are the life blood of Disney’s ESPN. – BH
The Dark Forest
by Cixin Liu
The second book in Liu’s Remembrance of Earth’s Past trilogy picks up years after when the previous book ended with a mostly new cast of characters. What does not change is the focus on how a disparate group of people can come together in a battle against a (potentially) unbeatable force. I’m very intrigued to see how the story ends. – AG
Recipes We Enjoyed:
Falafel is a traditional Middle Eastern favorite made from ground chickpeas. We hope you like this Mexican twist creating a tasty fusion of flavor.
Falafel Tacos with Sriracha Tahini Sauce
Yield: 6 tacos
for the falafel:
1 15 oz. can of chickpeas, rinsed and drained
½ cup loosely packed fresh cilantro or fresh parsley
juice from ½ a lemon
1 ½ teaspoons dried dill
1 ½ teaspoons dried oregano
1 teaspoon smoked paprika
1 teaspoon cumin
several dashes of black pepper
salt to taste (I used about 3/4 tsp)
3 tablespoon chickpea flour
for the tacos:
6 taco shells
1-2 cups lettuce
tomato slices
other taco fillings
for the sriracha tahini sauce:
¼ cup tahini sauce
¼ cup water
1-2 tablespoon Sriracha
juice from 1 lemon
1 clove garlic, minced
1 teaspoon dried dill
Directions for the sriracha tahini sauce:
Combine all ingredients in a food processor or if using an immersion blender, a small bowl. Blend the ingredients until smooth. Chill until ready to use.
Directions for the falafel:
Preheat the oven to 350˚F. Line a baking sheet with parchment paper. Set aside.
Combine all falafel ingredients in a food processor and process until you have a mostly smooth ball of “dough.”
Use a tablespoon to scoop the dough and use your hands to roll the scoop into a ball. Flatten it slightly and place on the prepared baking sheet. Repeat until there is no more dough left. You should have about 18-20 falafel.
Bake in the oven for about 20 minutes, flipping halfway through to ensure even cooking. Remove from oven.
Stuff a little lettuce in each taco shell, then stuff about 3 patties into each taco shell. Top with tomato slices and any other taco fillings you would like to use (cucumber, avocado, bell pepper, etc.). Drizzle the taco with the Sriracha Tahini Sauce (recipe above) and serve warm. Enjoy!
Source: Keepinitkind.com
– MA
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