With interest rates kissing the zero-bound and market participants briefly pricing in negative fed funds rate in early 2021, the possibility of negative rates reaching the US financial shores is building. In this article, we discussed the possibility of NIRP, its investment implications, the outlook for interest rates and how to position for it.
As shares of Norwegian Cruise Line continued to sink like the Titanic—down 80% from the end of 2019 to $12 per share by late April—Scott Dahnke and his team at L Catterton were quietly eyeing the wreckage. The partners at his Greenwich, Connecticut, private equity firm had already made a killing by taking a cruise ship-based beauty chain public and they were focused on high-end brands. After all, the “L” in their name comes from their financial backing by LVMH, the French luxury goods giant and they had already scored a string of successes from investments in the upscale home decorator Restoration Hardware, Lily’s Kitchen, a London-based organic dog food maker and Peloton, the Internet-connected stationary bicycle concern.
But this was new territory. Never before had they seen such a rapid reversal of fortune of a well-regarded brand. Dahnke decided the time was right to pounce, despite the fact that in a best-case scenario, Norwegian wouldn’t be expected to sail any of its fleet’s cruise ships for at least two months.
Latin America has been one of the biggest losers this year so far, as the region struggles helplessly with the Covid-19 crisis. Brazil, the largest economy within the region, has been on the headlines recently for the wrong reasons – President Bolsonaro stubbornly refuses to exercise proper quarantine measures. In this article, we take a closer look at the region, to determine if they are worth the bargain.
Warren Buffett announced in its 1Q20 briefing that the conglomerate, in a stunning move, has sold all its airline stakes in the current quarter, worth slightly north of US$4 billion (S$5.7 billion) as of end 2019.