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Paulo Santos
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I am a Portuguese independent trader, analyst and algorithmic trading expert, having worked for both sell side (brokerage) and buy side (fund management) institutions. I've been trading professionally for about 16 years and also launched www.thinkfn.com in 2004. Thinkfn (Think Finance) carries... More
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  • How Wealthy Will Mark Zuckerberg Be?
    Since Facebook's S-1 is already out, we can do some math and come up with interesting facts.

    For instance, the number of diluted shares will be around 2.395 billion shares. This allows us to calculate the following market capitalizations, given the price where Facebook trades at:

    And the price for a $100 billion market capitalization? $41.75. Which would also be our best guess for the level at which the IPO will price. But obviously it will trade much higher once trading begins.

    Now, we also get to know how many shares Mark Zuckerberg has, including his stock options. The number is 0.5338 billion shares.

    And thus, this is how wealthy Mark Zuckerberg will be and his position on the Forbes list of billionaires:

    Not bad for 6 years' worth of work, I must say! At any rate, Mark Zuckerberg will be wealthier than Google's (GOOG) Larry Page and Sergey Brin, which tie for 24th in Forbe's list. But he won't menace Oracle's (ORCL) Larry Ellison over in 5th, and much less Microsoft's (MSFT) Bill Gates in 2nd. Not, that is, unless Facebook really surprises and goes up more than 67% from a $100 billion initial valuation.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GOOG, MSFT, ORCL, ipo-analysis
    Feb 02 1:52 PM | Link | 4 Comments
  • Portugal In The Spotlight
    For a few months, the European Central Bank's LTRO had a considerable effect on Portuguese yields, much like it did on the Italian and Spanish ones. Since the LTRO gives out loans with a maturity of up to 3 years, it was no surprise that this effect was concentrated on the shorter maturities.

    This effect created a significant divergence in Portugal's yields, with the shorter maturities managing to record lower interest rates, while the longer (5, 10 years) maturities continued their upward trend, in line with the CDS and showing that the market still believed that in due time, Portugal too would be forced to restructure its debt.

    Portugal, 10 year yield

    Portugal, 5 year yield

    In the last few days, however, something changed. In spite of the approaching February LTRO, the Portuguese 2 year yields shoot up as well.

    Portugal, 2 year yield

    This is worrying. It means that the market is now starting to discount the likelihood of a debt restructuring within the next 2 years, whereas for a while the yields implied that even if such restructuring was to take place, it would take place in a longer timeframe.

    Conclusion

    The debt market is moving towards discounting that Portugal will be in Greece's present position within the next 2 years.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: market-outlook
    Feb 01 12:51 PM | Link | Comment!
  • The War On Iran Has Already Started
    A lot has been written on how the U.S., or perhaps even more likely, Israel, might hit Iran's nuclear facilities in an attempt to delay or destroy Iran's nuclear ambitions.

    It's not a secret that Israel can't have an unstable neighbor bent on its destruction getting nukes. It's also not unprecedented for Israel to strike at that same threat, with strikes on Iraq's Osirak reactor back in 1981, and similar attacks on Syria's nuclear program during 2007.

    However, Iran's program is much larger, much more dispersed, farther away, and Iran has a lot more military might, if not to strike back at Israel, at least to try and disrupt oil commerce in the region, namely through attempts to close the Strait of Hormuz.

    If strikes on Iran do occur, a large, negative, stock market impact can be expected. Likewise, a large spike on crude prices can also be expected.

    The war has started already

    While open military strikes cannot be ruled out, their consequences are grave enough that considerable political resistance is to be expected. On the other hand, however, we might also say this war has already started.

    Why do I say this? Because in the last few years an epidemic of bomb blasts has been hitting Iran's key personnel working on its atomic project. Surely, these are not coincidences, and as such we can already speak about the war having started, even if through a low-level engagement.

    This has not gone unnoticed in Teheran, and now talk has started about retaliation. Still, market-wise one would expect that only a hot, open, visible war would have impact. Yet, what sometimes starts out as a silent conflict can also escalate into a full-blown war.

    Conclusion

    The Iran war has already started even if the conflict is not on mainstream news. As long as it remains a silent war, its impact on markets will probably amount to nothing.

    However, beware of possible escalation into a hot war, and the spike such could bring to crude USO, as well as the negative impact it would have on the stock market. I would rate the likelihood of such event as still low, but would recommend against writing puts on the market, namely the main ETFs SPY, DIA and QQQ, as well as against writing calls on USO or other crude ETFs.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: USO, SPY, DIA, QQQ, market-outlook
    Jan 19 11:04 AM | Link | Comment!
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  • The $299 Prime Fresh program gives you the right to buy groceries ... lol. Yes, people will really pay $299 for the right to buy groceries.
    Jun 10, 2013
  • I think MSFT priced the XBox One too high, PS4 is surely coming in well below $499.
    Jun 10, 2013
  • $5 instant spike on AMZN, someone really wants to take that price higher.
    Jun 7, 2013
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