"Ellison is wildly wealthy and plans to give almost all of what he has made away, to help other folks. And that friends is when people appreciate money, they work hard making it, they are strangely a lot more giving. Encouraging entrepreneurs and allowing capital to grow at a fast rate leads to adding to the national fiscus, creates jobs and opportunities and inspires many. Less state and more private enterprise, thanks very much!"
To market, to market to buy a fat pig. A day after the Spanish got booted, their pride was somewhat restored with a new king. I wonder what is going to happen in England this morning? Oh well, it is not for us to make any snide remarks about football teams that are in attendance at the world cup when our team did not even make it there. Heck, we did not even get close. So, it is left for us to talk about the place we love, the markets and more importantly the associated companies that are listed on the exchange.
Yesterday was a massive day, it was huge for local equity markets, following on from markets overnight which were, I guess boosted by the Federal Reserve's outlook that inflation would not be a problem for a long time. And as such we were in a low rates environment for a while, perhaps another four odd years. In the EU about the same could be said. I remember when the term ZIRP (Zero Interest Rate Policy) was first brought forward, many were convinced that by 2012, the end thereof, we would see rates start to tick up. Well, here we are, nearing the end of the first half of 2014 and the ECB has gone lower, with negative interest deposit rates, albeit small and the Fed indicated that because inflation was pretty benign that they would be in a position to keep rates low.
However in the developing world it has not been that easy, with currency ructions forcing central banks to act against inflation even though the economic outlooks (most of them) are not as favourable as we/they would have liked, domestically that is. Higher commodity prices have meant higher energy prices and higher food prices. But back to the scoreboard for an instant, the local market ended the session off at a record high, up over a percent at 51264. From a volumes point of view it was also huge as it was futures closeout. Was that right, did I see 26.86 billion go through the market, in terms of value of trade. Gosh that is a lot.
Over the seas and far away on Wall Street, stocks ended the day barely unchanged but that masked a half a percent down at one point for the nerds of NASDAQ, Oracle weighing on the tech heavy index. Not the Oracle, the one that bakes Neo the muffins in the Matrix, but rather the business that is run by that fellow Larry Ellison. Larry is 69 years old and still has a lot of energy, he clearly looks after himself. Larry cofounded Oracle Corporation with Ed Oates and Bob Miner. Bob died sadly nearly twenty years ago, he would be marginally older than Larry now, Ed apparently is a budding scale model builder with H0 scale trains. That is 1 to 87 scale, why that number I have no idea.
Equally, why Larry Ellison sees fit to pay himself so much when he owns so much of the business is a little baffling, admittedly most of the compensation is stock based. He did however stick the most money in at the beginning, according to his Wikipedia page, investing 1200 (1977 Dollars - out of a total of 2000 Dollars) to establish Software Development Laboratories, the original Oracle. 1200 Dollars in 1977 would be 4549.82 Dollars today.
Larry Ellison owns 1,112,434,580 Oracle shares, by one measure that I saw -> Ownership. At the closing price that is worth 47.289 billion Dollars. Yowsers. But with the Oracle share price indicated down 5 percent and a bit at 40.38 USD, that stake is worth 44.9 billion Dollars. I hardly think that Larry Ellison is going to lose any sleep over the company that he still runs.
Now we do not have any interest in Oracle Corporation, but what I find very interesting about a whole bunch of technology titans that saw their valuations stretched during the go-go days of 1998-2000 is that many of these businesses were founded in the 1970's. As the hardware improved, the software improved alongside at an absolute rapid rate. And because Moore's Law possibly still applies, we should continue to see this trend continue. Moore himself was the co-founder of Intel alongside Robert Noyce. Intel was founded in 1968, it makes sense that the big hardware manufacturers are older than the software ones.
The other thing that interests me is how an idea and a small investment of 1200 Dollars in 1977 turns into 45 odd billion Dollars in 2014. A company that employs 120 odd thousand people. And no doubt contributes handsomely to the US economy. And Ellison has joined the giving pledge to give 95 percent of his wealth when he dies to the charity founded by Bill Gates (a competitor) and Warren Buffett, whom everyone knows well. It is a moral agreement and nobody is bound by this.
Ellison is wildly wealthy and plans to give almost all of what he has made away, to help other folks. And that friends is when people appreciate money, they work hard making it, they are strangely a lot more giving. Encouraging entrepreneurs and allowing capital to grow at a fast rate leads to adding to the national fiscus, creates jobs and opportunities and inspires many. Less state and more private enterprise, thanks very much! Pity that Oracle missed the streets number last evening in fourth quarter numbers post the bell, in other words the analyst community was a bit heavy in their estimates. The company did not miss, the company reported what they did, the analyst community missed. Fear not, Oracle shares have risen with the rest of the market, up 25 percent over the last 12 months.
Home again, home again, jiggety-jog. The market is trading at another record high. This morning. I see many people talking about bubbles. Perhaps it is market vertigo. Perhaps it is warranted. Biz Stone, the Twitter cofounder reckons that stock valuations in his sector are not in bubble territory. I guess he expects (not like everyone I tell you) earnings to grow at a breakneck speed to justify the current prices. Time will prove him right or wrong!
Sasha Naryshkine, Byron Lotter and Michael Treherne
Follow Sasha, Byron and Michael on Twitter
011 022 5440
No comments:
Post a Comment