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Mexico’s Second Richest Man Reveals 10% of His Liquid Assets Are in Bitcoin

Sebastian Sinclair
·1 min read

Mexican billionaire Ricardo Salinas Pliego just declared 10% of his portfolio is now tied up in bitcoin.

Announced in a tweet on Wednesday, Mexico’s second-wealthiest man responded to questions that “many people” ask him about bitcoin, saying: “YES. I have 10% of my liquid portfolio invested.”

“Bitcoin protects the citizen from government expropriation,” Pliego added as he recommended “El Patron Bitcoin” – a book that is “the best and most important to understand #Bitcoin.”

Related: Crypto Exchange Liquid Says User Data Possibly Exposed in Security Breach

The other 90% of Pliego’s investments are tied up “in precious metals miners,” the billionaire explained in a reply to Dan Held, the Kraken crypto exchange’s growth lead.

Latin American countries, namely Venezuela, have been plagued by hyperinflation in recent years leading to a situation reminiscent of Germany’s 1920’s hyperinflation in the Weimar Republic.

Investors looking to protect themselves from “government expropriation” and inflation have historically turned to alternative assets like gold to hedge against fiat currency devaluation. Now bitcoin looks to be increasingly finding a place as a digital alternative.

Hours before posting his bitcoin tweet, the Mexican billionaire had posted another tweet decrying government-issued fiat as being “worth nothing” and noting that it is always “good to diversify” ones investments.

Related: Alleged Promoter of BitConnect Crypto Scam Charged in Australia

Pliego is the founder and chairman of Grupo Salinas, a collection of companies with stakes in telecommunications, media, financial services, and retail stores, per Wikipedia.

See also: ‘Bitcoin Rich List’ Reaches All-Time High

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  • When Tesla Joins the S&P 500, You Know It’s Game Over

    (Bloomberg Opinion) -- In an anecdote often attributed to President John F. Kennedy’s father, the moment he knew to get out of the 1920s stock market boom was when he started receiving share tips from his shoeshine boy. You can make a similar argument about the moment that leading equity indexes finally give their blessing to an up-and-coming stock. The latest and most dramatic instance of that will happen next month, when the S&P 500  will admit Tesla Inc. through its club doors for the first time.Take Yahoo Inc. The archetypal dotcom business found its way into America’s prime share index in December 1999, just four months before a collapse in internet stocks that took the U.S. more than a decade to recover from. New admissions in the mid-2000s were rich with real estate plays such as CBRE Group Inc., Boston Properties Inc., and Kimco Realty Corp. Those companies were then hammered by the subprime and 2008 financial crises. Is this time really going to be any different?To be sure, it looks like Tesla is on more solid footing than two years ago, when regulators were lobbing fraud charges against Elon Musk and the company was, in his words, “single-digit weeks” away from bankruptcy. Its elevation to the S&P 500 had been predicted ever since second-quarter results chalked up a fourth consecutive period of profit, passing one crucial criterion that keeps a lot of startups out of the index.Looked at from the more exacting perspective of operating cash, it’s doing even better. The $2.4 billion inflow in the third quarter alone was more than total operating cash in the decade through September 2019. The auto industry as a whole seems to be performing remarkably well in the grip of Covid-19, with the S&P’s automobile and parts sub-index Monday hitting its highest level in more than two years.Tesla is already the 11th-largest company by market capitalization on U.S. exchanges, worth about as much as the world's three biggest carmakers Toyota Motor Corp., Volkswagen AG and General Motors Co. put together. Casual investors are likely to see their index-tracking funds turn them into indirect Tesla shareholders whether they like it or not. So what’s not to like?The lingering question is around valuation. Tesla is past the point where it’s at imminent risk of demise, but it’s still very hard to justify the price put on the stock. Returns on equity are only just pulling even with the broader automobiles sub-index. Even analyst estimates that they’ll rise north of 20% over the coming years will only bring them in line with what were, until recently, considered normal levels for an industry that’s been out of favor with investors for years.That sort of pedestrian financial performance is hard to square with Tesla’s eye-wateringly expensive stock. The median price of S&P 500 constituents is 20.89 times blended forward 12-month earnings. Tesla’s price-earnings ratio is 113, which would be enough to give it the richest rating on the index after Under Armour Inc., Boeing Co., and SBA Communications Corp. Comparing forward Ebitda to enterprise value, just six companies have higher valuations than Tesla’s 49.51 times multiple.It’s very hard to see how Tesla will be able to justify those valuations in the long term. That’s the case even if you agree with the most bullish analysts and assume the company will be producing about $10 billion a year of net income by 2022 or 2023, compared with $556 million over the past 12 months. On those numbers, a 20 times price-earnings multiple would produce a business worth not much more than half of Tesla’s current $387 billion market cap.That’s the true lesson for newcomers to the big indexes. For every Yahoo or AOL Inc. that turns into a parable of market excess, there’s a Kimco or CBRE that survives but never recaptures the magic that propelled it into the limelight. Yahoo’s 1999 hype ultimately fell victim to the better search technology being developed by a then little-known startup called Google. The race to dominate electric vehicles over the coming decade will scarcely be less competitive. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Analysts Say These 3 Stocks Are Their Top Picks for 2021

    The year is winding down, and it’s time for Wall Street’s analysts to start flagging their top picks for the coming year. It’s a time-honored tradition, in most walks of life, to take a sometimes tongue-in-cheek look at what lies ahead, and to start giving advice on the say-so of a metaphorical crystal ball.Analysts have been analyzing each stock carefully, looking at its past and current performance, its trends on a variety of time frames, management’s plans – the analysts take everything into account. Their recommendations provide valuable direction for building a resilient portfolio in the new year.As normal, TipRanks has collected and collated the data on the top picks, and made it available for investors’ use. The stock choices, and their data, make for some interesting choices. Let's take a closer look. UTZ Brands (UTZ)UTZ Brands is a familiar label in the eastern US. The company is known for its range of snack foods, of the salty variety rather than sweet. The company’s line of foods, including pretzels, potato chips, snack mixes, and popcorn, are frequent choices in vending machines. In August, UTZ (then known as Utz Quality Foods) has completed a business combination agreement with Collier Creek, a special purpose acquisition company. The combination brought the venerable snack company into the public trading domain. More recently, UTZ posted strong Q3 results and reported that it has entered an agreement to buy competing snack company Truco. The quarterly results were released first, on November 5, showing $248 million in net sales, a year-over-year gain of 24%, along with a 23% yoy gain in gross profit. One week later, UTZ and Truco announced a $480 million acquisition agreement, which will bring the ‘On the Border’ brand of tortilla chips and salsas into UTZ product line.Covering this stock for Oppenheimer is 5-star analyst Rupesh Parikh, who sees a clear path forward for the company. “[Following] the company's announcement on 11/12 to acquire Truco Enterprises, [we] overall look very favorably upon the deal economics, synergy opportunity, leverage to the attractive tortilla category including ancillary products (salsa and queso), and compelling growth prospects for the brand," Parikh opined. "We believe the company is well positioned to drive at least 3-4% organic sales growth and 6-8% EBITDA growth with upside optionality from strategic acquisitions," the analyst concluded. To this end, UTZ remains Parikh's top small-cap food pick. The analyst rates the stock an Outperform (i.e. Buy) along with a $24 price target. This figure implies a 28% upside from current levels. (To watch Parikh’s track record, click here)Overall, Wall Street loves this stock, earning a stellar analyst consensus rating -- Strong Buy. Out of 7 analysts tracked by TipRanks in the last 3 months, 6 are bullish on UTZ, while only one remains sidelined. With a return potential of ~16%, the stock's consensus target price stands at $21.71. (See UTZ stock analysis on TipRanks)RingCentral, Inc. (RNG)From salty snacks we move on to telecom tech. RingCentral is a cloud-based business communications company. The company’s products are software platform packages that combine telephone and computer systems. The flagship product platform, RingCentral Office, allows compatibility of the communications system with other popular business apps including DropBox, Google Docs, Outlook, and Salesforce. RNG also offers unique features necessary for communications systems: call forwarding, phone extensions, vid calling, and screen sharing.Much of the modern business world is about problem solving, and RingCentral does just that for its customers – and the results are clear in the revenues and stock performance. The top line number has been increasing through 2020, with the Q3 revenues coming in at $303 million for a 9.3% sequential gain. The shares recovered easily from the mid-winter COVID swoon, and the stock is trading up 76% so far this year.On the negative side, RingCentral operates at a net loss, and that net loss has been deepening even as revenues rose and the stock appreciated. The Q3 EPS loss came in at 24 cents.James Fish, 5-star analyst with Piper Sandler, wrote the review on RNG, and he is upbeat about the company’s future. “RingCentral is winning new customers and expanding with existing given its ability to converge across the communication software stack, including with contact center… we continue to recommend RingCentral as one of our 'core 4' in our coverage and a name to own for the next few years,” Fish commented. As a result, Fish reiterates RNG as his Top Pick. The analyst rates the stock an Overweight (i.e. Buy) alongside a $362 price target. At current levels, that indicates a possible 21% upside for the coming year. (To watch Fish’s track record, click here)Overall, RingCentral has 10 recent reviews, including 9 Buys and 1 Hold, making the analyst consensus view a Strong Buy. The average price target is $337.22, which suggests a 13% upside from the current trading price of $297.79. (See RNG stock analysis on TipRanks)DraftKings, Inc. (DKNG)The world of fantasy sports helps bring fans into the games, and now that the pro leagues have resumed play – albeit for abbreviated seasons, in deference to the coronavirus – DraftKings, which take fantasy leagues online, has been making gains. In addition to fantasy league creation, DraftKings offers sports betting, and the company’s online model has fit in well with the social distance restrictions put in place to combat the ongoing virus health crisis.In the third quarter, whose results were reported earlier this month, DraftKings had plenty of good news. Revenue, at $133 million, beat the forecast by $1 million, and the net loss per share was not as deep as analysts had feared. The company reported a key metric – monthly unique players – surpassing 1 million, an important milestone. Looking ahead, DraftKings revised its fiscal 2020 guidance upward, by 5.7% at the midpoint of the range, to $540 million to $560 million. The midpoint for 2021 revenue expectations is even more bullish, at $800 million.As noted, these gains come as the major sports leagues have returned to play. But that is not the only key here. DraftKings operates in 19 states plus DC – the jurisdictions which permit legal online sports betting. But an additional 8 states are in various stages of legalizing DraftKings’ niche, and the company looks forward to expanding its operations.Summing up the prospects for DraftKings, Rosenblatt analyst Bernie McTernan writes, “[DKNG] remains a top pick in our Consumer Tech coverage. 3Q results will continue the positive revenue estimate revisions given the better than expected guide for '20E and '21E. We are at the high end of the '21E range which we believe is achievable given our expectation for at least MI and VA coming online."The analyst added, "New state launches will pressure near-term adj. EBITDA but encouragingly the company indicates NJ, their most mature market, is in a similar spot where they had previously hoped it would be for its ramp in profitability.”McTernan rates DKNG a Buy, and his $65 price target implies a robust 41% one-year upside. (To watch McTernan’s track record, click here)All in all, there 19 reviews on record for DraftKings, including 13 Buys and 6 Holds, giving the stock a Moderate Buy rating from the analyst consensus. The shares are currently priced at $46.24 and have an average price target of $59, making the upside potential for the year ahead 38%. (See DKNG stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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  • Boeing, Tesla, NIO, Nvidia, Target - 5 Things You Must Know Wednesday

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  • Soros Regrets Early Investment in Peter Thiel’s Palantir

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  • Is Nvidia a Buy Ahead of Earnings? This Is What You Need to Know

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  • SEC Pushes Urgent Plan That Could Delist Chinese Companies

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It’s unlikely the rule will be finalized before President Donald Trump’s term ends on Jan. 20. Clayton, who plans to step down by the end of the year, will also be gone before any regulation is finished. That would leave completing it to an SEC chief picked by President-elect Joe Biden.The Nasdaq Golden Dragon China Index fell 0.9% Tuesday, compared with a 0.5% drop for the benchmark S&P 500 index. The gauge, which tracks Chinese companies listed in the U.S., closed at a record high at the end of last week. China’s main stock index was little changed on Wednesday. At issue is the problem that has vexed U.S. regulators for more than a decade: China’s refusal to let inspectors from the Public Company Accounting Oversight Board review audits of Alibaba Group Holding Ltd., Baidu Inc. and other firms that trade on American markets. It has gained added urgency due to rising tensions between the two countries and following this year’s high-profile accounting scandal at Luckin Coffee Inc.By pushing through a vote, Clayton would force the SEC’s Republican and Democratic commissioners -- all of whom have years left on their terms -- to go on record in stating whether they support tougher rules for Chinese companies. Issuing a proposal also requires the SEC to seek public comment and investor advocates would be expected to flood the agency with letters backing Clayton’s plan.Plus, unlike many policies in this era of heightened partisanship, cracking down on China appeals to both Republicans and Democrats on Capitol Hill. In May, the U.S. Senate approved a bill without opposition that directs the SEC to start the process of delisting Chinese companies whose audits aren’t inspected by American regulators. All of these factors could put pressure on Clayton’s Democratic successor.The SEC declined to comment on the rulemaking plan.Fang Xinghai, the vice chairman of the China Securities Regulatory Commission, sounded a positive note on resolving the issue at a panel discussion earlier this week, saying it’s important to ensure that Chinese companies have access to international capital markets.“I think during the Biden administration we should be able to resolve that problem because it’s not an intractable problem,” Fang said at the New Economy Forum. “All it takes is good will on both sides and a willingness on both sides.”At a briefing on Wednesday in Beijing, Foreign Ministry spokesman Zhao Lijian said China believes that it’s “important to improve” the qualities of the securities market and regulators and that cross-border regulatory mechanisms are “essential.”He added that China has in the past reached out to the SEC and other authorities and has never prevented any auditing because it’s committed to building a sound environment.Chinese stock listings have attracted Trump’s attention, as he ratchets up his attacks on China over the coronavirus pandemic and other grievances. Last week, he signed an order barring American investments in Chinese firms owned or controlled by the military. The SEC’s work on a proposal was reported earlier by the Wall Street Journal.The fight over audit inspections dates back to the 2002 Sarbanes-Oxley Act, which overhauled regulation of public company audits after the collapses of Enron Corp. and WorldCom Inc. The law set up the PCAOB and required it to conduct regular inspections of the firms that review companies’ books. Though it applies to businesses across the world if they tap the U.S. markets -- and more than 50 foreign jurisdictions permit the reviews -- China has refused to comply, citing strict confidentiality rules.U.S. and Chinese officials have repeatedly failed to come up with a compromise. In the meantime, Chinese companies have continued to go public via U.S. stock exchanges even though American law is being ignored. They’ve raised about $12 billion in IPOs this year, the highest since 2014 when Alibaba debuted.The President’s Working Group report that’s driving SEC action recommended that exchanges such as the New York Stock Exchange and Nasdaq establish enhanced standards to prevent the listing of companies that don’t adhere to U.S. rules. The report called on the SEC to pass new rules, but said they shouldn’t take effect until January 2022 to prevent market disruptions.U.S. investors’ exposure to Chinese stocks is growing, according to the SEC. More than 150 of the country’s companies, with a combined value of $1.2 trillion, traded on American exchanges as of 2019.HomecomingsA further clampdown by the U.S. could provide a boost to China’s stock exchanges and the one in Hong Kong. The financial hub has already seen a spate of homecomings from Chinese juggernauts such as Netease Inc. and JD.com., which have sought secondary listings in the city amid increased tension.Companies looking to tap the U.S. for customers or added visibility are likely to want to comply, but those who don’t consider America to be a target market could move listings to places like Hong Kong, said Benjamin Quinlan, chief executive officer of Quinlan & Associates, a strategy consultant in Hong Kong.“I do think Hong Kong exchange in particular as well as some of the local and domestic exchanges in China will be key beneficiaries,” said Quinlan.Analysts also say there’s plenty of cash in Asia to back listings, both in the region and from abroad. “Some of these Chinese companies are highly competitive, have been growing strongly and leveraged to some very exciting themes of the future,” said Chetan Seth, Asia-Pacific equity strategist at Nomura Holdings Inc. “I expect that there will always be interest from global investors in some of these names. Potential delistings from U.S. exchanges shouldn’t materially impact the fundamentals of the companies.”(Updates with China comment in 11th paragraph, analyst in third to last paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tuesday's Market Minute: Costco Announces $10/Share Special Dividend

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  • Palantir stock rockets to record highs as hedge funds disclose stakes

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