Reading List - January 27, 2010

Deal Book was just awesome today!  Maybe what made it a good day is all the IPO's.

Congressional report on financial crisis

Ask any two people and you'll get a whole list of responses as to whom was responsible for the financial crisis.  The moral is a lot of people were involved.  Today, the Financial Crisis Inquiry Commission finally released its report.  Deal Book summed it up the best:

"The blow-by-blow chronicle of the Wall Street recklessness that led to the financial crisis is reminiscent of a legendary house party.  The booze was flowing. Nobody wanted to leave. And the police didn’t bother to shut it down. While the bash is often great in the moment, the morning after usually isn’t pretty."

Everyone was to blame, Crisis Commission Finds (click here)
Full report (click here)

Ally IPO

It looks like the government is going to take another step from ridding itself of commitments made during the financial crisis and ensuing bailouts.  The latest move is Ally Finanical (the former GMAC) starting the stages for an initial public offering.  By being valued at over $20 billion, it appears the government is poised again to make a profit.

Banks Prepare to Compete for Ally Financial Stock Sale (click here)
Valuing Ally Financial (click here)

BankUnited IPO

In a coup for private equity investors, one of the banks private equity helped turnaround is going public shortly.  Bank United was one of the more costly bank failures in U.S. history. 

BankUnited Prices I.P.O at $27 a share (click here)

Prada IPO

Prada appears to be completing an IPO.  As the article states, luxury retailers are at or near all-time high valuations.  Looking at earnings from retailers like Tiffany & Co. or Nordstrom's, it appears the high end retailer is back.  As a value investor, these are all great companies to invest in (although not at these valuations).  Whether it be Tiffany's, Hermes, or now Prada, each has a distinguishing characteristic about its brand consumers are willing to pay a premium for creating an economic moat, pricing power, and thus high returns on equity.  This is a perfect industry to be fearful when others are greedy and greedy when others are fearful, as Buffett says.

The interesting side note to the deal is Prada is listing in Hong Kong versus Europe or the U.S., as it is an European company.  This deal is significant as it continues to point to Asia as the places for Western retailers to expand.

Prada Plans I.P.O in Hong Kong (click here)

Colonel Sanders Goes to China

Ok, this article is not from Deal Book, but rather Bloomberg.  Either way, the article is about how YUM and McDonald's are going after the hearts and minds of the Chinese consumer.

McDonald's No Match for KFC in China as Colonel Rules Fast Food (click here)

Demi Moore

On a lighter note, Demi Moore is starring in a new film about Wall Street.  She is going to play a female risk officer at a Wall Street bank.

Chief Risk Officer, Hollywood's New Sex Symbol (click here)