The hottest Equity Substack posts right now

And their main takeaways
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Top Education Topics

Q4 Update: Delinquencies, Foreclosures and REO

CalculatedRisk Newsletter • 33 implied HN points • 13 Mar 24
💰 Finance Real Estate Mortgages Equity Rates
  1. Most homeowners have substantial equity in their homes, which helps prevent a surge in foreclosures that could impact house prices.
  2. The distribution of interest rates on mortgages shows that a large percentage are under 4%, making it easier for homeowners to manage financially.
  3. Understanding key housing terms like forbearance, delinquency, foreclosure, and REO (Real Estate Owned) can help navigate discussions about property ownership.

Tiffany-Ann Taylor on the Past, Present, and Future of Transportation

Exasperated Infrastructures • 14 implied HN points • 29 Nov 23
🇺🇸 U.S. Politics Transportation Diversity Leadership Equity
  1. Small steps are still steps - Even small improvements can make a big difference in transportation projects.
  2. Diversity in leadership is crucial - Having diverse voices and experiences leads to more innovative solutions.
  3. Success means prioritizing equity and intersectionality - A successful future in transportation includes valuing all community needs and voices.
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How to Assess a Job Offer with Equity

Concepts of Finance 🧠 • 1 HN point • 12 Nov 23
💰 Finance Equity Stock Options Negotiation Investment
  1. Check the company's stage and investors to gauge equity value. Knowing if it's early stage or established can help you understand what your equity might really be worth.
  2. Understand the type of equity you're being offered, whether it’s stock options or RSUs. Each type has different rules and tax implications, so it's important to know what you're getting.
  3. Don't hesitate to negotiate your offer. Many people accept the first offer they get, but it's usually possible to get a better deal, especially for equity.

Share Count Confusion: Dilution, Employee Options and Multiple Share Classes!

Musings on Markets • 19 implied HN points • 26 Jul 18
💰 Finance Valuation Equity Options Capital Markets Corporate Governance
  1. Young companies often face expected dilution, which means they will need to issue more shares to raise money. This can affect their value per share, as more shares mean the value is spread thinner.
  2. Stock-based compensation (SBC) can complicate valuations because it adds shares into the mix, affecting overall value. It's important to account for both past options and future grants to get a clear picture of share value.
  3. When companies have different types of shares that carry different voting rights, it can create confusion in valuations. Each share type must be valued separately to accurately determine their worth.

The dangers of relative valuation

Musings on Markets • 0 implied HN points • 27 Sep 09
💰 Finance Valuation Investing Market Analysis Asset management Valuation Investment Market Analysis Financial risk Equity
  1. Relative valuation can be risky because if one company is valued poorly, it can affect the valuations of other companies that are based on it. This is especially true for big companies like Facebook.
  2. Using relative valuation without careful analysis can lead to mistakes and potentially create market bubbles. Just looking at averages can be misleading.
  3. A better approach to relative valuation is to consider differences between companies and analyze the data thoroughly. This way, it can provide useful insights rather than just being a lazy shortcut.

Valuing Young Companies

Musings on Markets • 0 implied HN points • 19 Jun 09
💼 Business Startups Valuation Investment Entrepreneurship Private Equity Startups Valuation Investment Risk management Equity
  1. Young companies often have limited data because they are just starting out. This makes it hard to accurately value them.
  2. These companies usually don't bring in much money yet, which can lead to big losses as they try to get established.
  3. Investors need to be careful with their money because many young companies fail. Only a small percentage survive long-term.

Who uses preferred stock?

Musings on Markets • 0 implied HN points • 22 Mar 09
💰 Finance Investment Stocks Debt Equity Regulation Investment Stocks Debt Regulation Corporate Finance
  1. Financial service firms like preferred stock because it counts as equity for regulatory purposes. This helps them meet capital requirements even though it’s costly.
  2. Young and growth companies often prefer preferred stock because they are not making money. This way, they avoid the downsides of traditional debt and offer investors potential future benefits.
  3. The existence and use of preferred stock are significantly influenced by regulations and tax laws. Poor laws can lead companies to make unwise financing choices.

Enterprise value is negative... Is that possible?

Musings on Markets • 0 implied HN points • 08 Dec 08
💰 Finance Investment Market Analysis Investment Market Analysis Equity Debt Valuation Equity Debt Business valuation
  1. Enterprise value can be negative when a company's cash surpasses the combined market values of its debt and equity. This situation could create an arbitrage opportunity for investors.
  2. Calculating enterprise value can be tricky because it may not include all the company's debts, like lease obligations for retail firms.
  3. The cash figures used in enterprise value calculations can be outdated, which means they might not accurately reflect the company's current cash situation.

Is preferred stock equity?

Musings on Markets • 0 implied HN points • 16 Oct 08
💰 Finance Investing Stocks Equity Banking Debt
  1. Preferred stock is a mix of equity and debt. It has a fixed dividend like a bond but is treated differently for taxation.
  2. Investing in preferred stock impacts common stock holders, especially in banks. They may see lower earnings because of the preferred dividends that need to be paid first.
  3. Different countries have different rules for preferred stock in banks. The UK's approach can be tougher on common stockholders compared to the US approach.

Boosting Gender Diversity: What Really Works?

Voohy Leadership Insights • 0 implied HN points • 06 Jun 24
💼 Business Diversity Leadership Organizational Culture Equity
  1. Organizations really need to check if their diversity practices are effective. Just doing lots of activities isn't enough; they need to lead to real change in gender representation.
  2. Flexible work options alone don’t guarantee more women in leadership roles. It's important to tackle underlying cultural biases that can affect women's career advancement.
  3. Sometimes, the most impactful diversity practices are less visible, like using diverse interview panels. Focusing on hidden processes can make a big difference in promoting gender equality.

Dead equity makes your company uninvestable

The Founder Memo • 0 implied HN points • 29 Feb 24
💼 Business Startups Equity Investing Legal issues Entrepreneurship
  1. Vesting schedules are crucial for co-founders to avoid problems with 'dead equity.' If a co-founder leaves, they shouldn't keep their shares unless they earned them over time.
  2. Equity is limited, unlike cash, so if someone has a large share without contributing, it can hurt company morale and deter investors. They want to see all founders actively working.
  3. If dead equity happens, fixing it can be difficult and costly. It's better to prevent these issues from the start with clear agreements on equity and vesting.

Lightning Network financial statements

bolt.observer • 0 implied HN points • 23 Mar 23
💰 Finance Accounting Assets Equity Standardization
  1. Financial reporting provides valuable insights for businesses and helps external stakeholders make informed decisions.
  2. The balance sheet is a key financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific time.
  3. In the Lightning Network, node operations are currently 100% equity-based, but in the future, liabilities such as capital borrowing/lending may emerge.

1% Equity for Founding Engineers is BS

serious web3 analysis • 0 implied HN points • 06 Feb 25
💼 Business Startups Compensation Equity Technology Crypto
  1. The current equity model for Founding Engineers is unfair, offering them much less than the founders for similar risks and work. It's broken and needs a change.
  2. Many startups give low equity but this doesn't motivate skilled engineers, who have better options elsewhere. Fair compensation is crucial to attract and keep talent.
  3. Using crypto tokens for compensation could solve liquidity issues and provide fairer stakes for engineers, but it may scare off some candidates due to the risks associated with crypto.

AI and the Displacement of Minority White-Collar Workers: Confronting the Challenges and Ensuring Equity

This Is Wilson Dávalos-Nieves • 0 implied HN points • 15 May 23
🕹 Technology AI Job Market Automation Equity
  1. Artificial intelligence (AI) can displace minority white-collar workers leading to job loss and exacerbating existing inequalities.
  2. It is crucial for policymakers, business leaders, and educators to work together to ensure that minority workers are not left behind in the AI revolution.
  3. Investing in education and training programs, inclusive hiring practices, and equitable workplace policies are essential to address the challenges posed by AI.

Time to adjust your assessment

Joshua Gans' Newsletter • 0 implied HN points • 06 Nov 20
🚌 Education Assessment Online Learning Diversity Equity Inclusion
  1. When transitioning to online assessments, consider the implications of privacy when using surveillance software - it can invade students' personal spaces and raise trust issues.
  2. Using surveillance software can signal a lack of trust and respect towards students - consider alternative assessment methods to avoid creating a disruptive and distrustful environment.
  3. Surveillance software for exams may disproportionately impact students of color and other protected classes, highlighting the importance of considering diversity, equity, and inclusion in assessment approaches.

January 2017 Data Update 6: A Cost of Capital Update!

Musings on Markets • 0 implied HN points • 26 Jan 17
💰 Finance Investment Corporate Finance Valuation Equity Debt
  1. The cost of capital is a key number in finance that helps companies decide if they should invest. It's important because it serves as a hurdle rate, a discount rate, and influences how much to return to investors.
  2. Calculating the cost of capital involves understanding both equity and debt. The cost of equity reflects what investors expect to earn, while the cost of debt shows how much it costs to borrow money.
  3. The cost of capital can vary by country and industry due to factors like risk and tax rates. Analysts often focus too much on refining these numbers, while the real challenge lies in accurately estimating earnings and cash flows.

Myth 4.3: The D cannot change (over time) in a DCF

Musings on Markets • 0 implied HN points • 04 Nov 16
💰 Finance Valuation Investing Cash Flow Equity
  1. Discount rates in a DCF can change over time, so don't think you need to stick with one forever. It's important to adjust them based on the company's growth and risks.
  2. Adjusting discount rates makes valuations more accurate, especially for young or transitioning companies. Big changes in these firms mean their risk should be reflected in the discount rate.
  3. To estimate changing costs of capital, begin with the current rate and make adjustments based on planned changes in the company's debt and business mix, moving towards stable growth if the company matures.

Yahoo! A puzzle, a mystery and an enigma

Musings on Markets • 0 implied HN points • 11 May 14
💼 Business Valuation Investing Equity Market Analysis Corporate Finance
  1. Yahoo is really hard to value because it has parts of other companies, like Alibaba and Yahoo Japan, that aren't shown clearly in its financial numbers. This makes it tough for investors to see the real worth of Yahoo.
  2. Yahoo has been declining in the U.S. while Yahoo Japan is doing well in Japan. This contrast raises questions about why Yahoo hasn't been able to replicate that success domestically.
  3. There are a lot of uncertainties around Yahoo's future, especially concerning how it will manage its investments in Alibaba. Investors are waiting to see if they will sell shares after Alibaba's IPO and what the resulting tax implications will be.

A tangled web of values: Enterprise value, Firm Value and Market Cap

Musings on Markets • 0 implied HN points • 29 Jun 13
💰 Finance Valuation Investment Equity Debt Market Analysis
  1. Different types of value, like market cap and enterprise value, can give you different views of a company's worth. Investors should know which measure makes more sense for their situation.
  2. Measuring value isn't straightforward because you might need to consider things like non-traded shares and off-balance sheet debts. Mistakes in these measurements can lead to the wrong conclusions about a company's value.
  3. The best value measure can change based on what you're trying to figure out; different situations, like buying a company or investing in stocks, might call for different approaches to valuing a company.

How much are you paying for growth?

Musings on Markets • 0 implied HN points • 29 May 12
💰 Finance Valuation Investment Growth Equity Market Analysis
  1. There are different views on how much growth in a company is worth. Some think it's not worth much, while others believe it's priceless.
  2. To understand the value of growth, you look at what a company is earning now versus what it could earn in the future if it reinvests its profits.
  3. By comparing a company's market value to the value of its current assets, you can see how much of its price is based on expected future growth.

Alternatives to the CAPM: Part 4: Market-Implied cost of equity

Musings on Markets • 0 implied HN points • 30 Apr 11
💰 Finance Equity Investment Valuation Risk Models Investing Valuation Equity Risk management Market Theory
  1. You can calculate the market-implied cost of equity using a simple dividend discount model, which helps you understand if a stock is fairly priced. This method allows you to figure out the expected return on a stock based on its price and future dividends.
  2. Comparing the market-implied cost of equity to a conventional one can help you decide whether to invest in a stock. If the market-implied cost is much higher than your estimate, it might mean the stock is riskier or less attractive.
  3. You can use the market-implied cost of equity for an entire sector so that you have a uniform measure for evaluating companies in that sector. This approach can make it easier to compare different companies without getting lost in individual risks.