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Today's big stories

SoftBank reported better-than-expected earnings as surging stock markets drove up the value of its investments
Our analyst has laid out three ways to help you get out of the stock market before it crashes – Read Now
Japanese chipmaker Renesas bought Apple supplier Dialog

Dishing For Compliments

What’s Going On Here?

SoftBank reported better-than-expected earnings on Monday after the Japanese conglomerate’s investment in DoorDash really delivered.

What Does This Mean?

SoftBank’s private investments have done well out of both the global rally in tech stocks and the booming demand for initial public offerings (IPOs), and that’s led to a record profit for the company’s Vision Fund – the world’s biggest tech-focused venture capital fund. Two of its holdings did especially well: Uber and DoorDash – the latter having made a barn-storming stock market debut in December.

There’s more to SoftBank than just its Vision Fund, but it’s easy to see why it was such a big deal to investors. Not only did this record profit follow a WeWork-shaped record loss the year before, it offset the losses the company suffered from other investments last quarter – namely listed tech stocks and options.

Why Should I Care?

For markets: SoftBank’s only just getting started.
SoftBank’s Vision Fund makes money by buying stakes in private companies and selling those stakes on to public investors via an IPO (or selling the companies altogether). And seeing as six more of Vision Fund’s companies are planning to list on the stock market this year – and demand for IPOs shows no signs of slowing down – SoftBank might just be getting warmed up.

The bigger picture: There’s value in the Japanese stock market.
Japan’s stocks are up more than 6% this year, outperforming both the US and the global stock markets and hitting their highest level in 30 years. And at 30% below their all-time highs, they could have a lot further to rise (tweet this). That might be why analysts are recommending the country’s stocks over America and South Korea’s – both of which have hit record highs in the last few months.

You might also like: How to invest in startups like a venture capitalist.

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2. Analyst Take

The Bubble’s Going To Burst. So When Should You Get Out?

What’s Going On Here?

There’s little doubt about it among investors now: parts of the stock market – whether tech stocks, individual stocks like GameStop, or the market as a whole – are in a bubble.

But it’s one thing to know a correction is due: it’s quite another to know when that crash will actually happen.

Markets, after all, could collapse tomorrow – or they could go much higher than you ever expected. In any case, you need to get ready before the worst happens.

There are three ways to prepare yourself, and which one’s right for you depends on your objectives, your behavioral biases, and your overall market outlook.

And importantly, these three strategies aren’t mutually exclusive. In fact, the best approach of all may be to combine them.

So that’s today’s Insight: three ways to prepare yourself for a crash, and how to work out which one suits you best.

Read or listen to the Insight here

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Disclaimer: Capital at risk. *Estimated & variable yield as at 31.01.21.
Investengine (UK) Limited is Authorised and Regulated by the Financial Conduct Authority FRN [801128].

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Chip-Chat

What’s Going On Here?

Renesas sure had a lot to say for itself on Monday: the Japanese chipmaker announced it was buying British chipmaker Dialog.

What Does This Mean?

Mergers and acquisitions were all the rage among chipmakers in 2020, doubling in number from the year before. And it looks like Renesas wanted in on the dealmaking: the company’s now broadening its focus beyond chips for cars and picking up one of Apple’s main suppliers.

Investors did seem nervous about the move, mind you: Renesas’s share price dropped 4% on the news, and there could be a couple of reasons why. For one thing, this is its third major deal in four years, and investors could be worried it’s taking on too much debt. And for another, mergers usually help the buyer save money by cutting duplicate costs. But considering there’s not much overlap between the two chipmakers’ business models, that’s not likely to happen here…

Why Should I Care?

The bigger picture: It’s a good day to buy hard.
Dealmaking came back with a vengeance in the second half of last year, and it’s not done yet: the overall value of acquisitions so far this year is 150% higher than it was at the same point in 2020. That’s at least partly down to (what else?) the pandemic: research suggests the strongest-performing companies make twice as many deals during economic downturns as their rivals, just by picking up the businesses other firms are selling to survive.

Zooming out: Tesla’s now accepting bitcoin.
Chipmakers have been benefiting from the surging demand for electric vehicles too. And they’re not alone: Tesla said on Monday that it had invested in bitcoin and that it’ll start accepting the cryptocurrency as payment for its cars. That got investors thinking about the possibility other companies will follow Tesla’s lead, and they sent bitcoin’s price soaring.

You might also like: Here’s how to profit from acquisitions.

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💬 Quote of the day

“We have so much time and so little to do. Strike that, reverse it.”

– Roald Dahl (a British novelist, short-story writer, poet, and screenwriter)

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Disclaimer: Capital at risk. ISA rules apply.
Investengine (UK) Limited is Authorised and Regulated by the Financial Conduct Authority FRN [801128].

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📚 What we're reading

Space crops are the future (NASA)
It’s like sleeping on a cloud (Lunya)*
Hair of the dog is the old-new hangover cure (Thrillist)
The rise and fall of a bitcoin billionaire (Vanity Fair)

*These ads help us keep the newsletter free.

🌏 Finimize Community

🎨 It’s art, darling

Calling all culture vultures and curious investors: find out how to tszuj up your portfolio at our Investing in Art event this Friday. Hear Artiste Culture’s founder tell you everything you need to know about putting your money toward something a little alternative with a lot of potential. Gogh on, grab your ticket.

✌️ Dimensional Investing vs ETFs: 9pm Singapore Time, February 9th
🛍 Investing in Retail Stocks: 6pm UK Time, February 10th
🤖 What’s next for Crypto?: 9pm Hong Kong Time, February 11th
🎨 Investing in Art: 12.30pm UK Time, February 12th
🍃 Key ESG Trends for 2021: 6pm UK Time, February 16th
🎈Navigating a Stock Market Bubble: 1pm UK Time, February 17th
👦 The Millennial Effect: 6pm UK Time, February 17th
🎮 Esports ETFs with VanEck: 6pm UK Time, February 22nd
🙋 Developing a Framework to Invest in Women: 6pm UK Time, February 25th
🌈 Financial Planning for the LGBTQ Community: 2pm NYC Time, February 26th
💪 Q&A with Finimize CEO, Max Rofagha: 1.30pm UK Time, February 26th

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Finimize - 👀 Tesla backs bitcoin

Today's big stories

Dishing For Compliments

What’s Going On Here?

What Does This Mean?

Why Should I Care?

The Bubble’s Going To Burst. So When Should You Get Out?

Give your business cash a boost

Chip-Chat

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Power up your tax-free investing

🎨 It’s art, darling

Older messages

📉 This is America

💡 Six bright ideas for 2021

😭 There are no PS5s left

😨 Jeff Bezos is calling it quits

🧐 Redditors are back at it

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