David J La Placa, Founder | CEO

Founder & CEO of Intellectus Partners, The Entrepreneurs Advisory I fervently believe that Integrity & Innovation are the two keys to success in business

San Francisco

26 posts

Buffet strikes again

As has been his unique habit, Warren Buffet's Berkshire Hathaway has taken an aggressive stake in an industry. Berkshire has filed their Q3 2016 13F filing today and among them was a particularly outstanding item. He has acquired large stakes in an airline, no make that "ALL" four major airline companies, or, the entire industry. Warren Buffet has acquired stakes ranging from $300mm to $1bb in value in each of the legacy carriers, American Air, Delta and United Continental. He also took a stake in Southwest. As we have been stating for quite awhile, the relatively rapid consolidation in the Airline industry, (Continental, Virgin are the latest two) has created a dynamic similar to what the railroad industry went through a decade ago. The

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What now? Take a deep breath.....we have been here before

Now that the American electorate has spoken,it is time to sharpen our focus on how tho think through this political earthquake: A "Republican" mandate? Not like you think...It's more like an Independant and a Republican Congress. Who is DJT? Is he really a Republican in a traditional sense? It depends upon how you define "traditional" I thought I would touch on some helpful historical analogies: 1.Today vs 1968-1980 2. DJT ~ Eisenhower and Teddy Roosevelt Now vs 1968: An argument could be made that we have been in one of the most tumultuous periods in American History over the past decade or so. It is evidenced in the stock market behavior of the last 15 years. We have had two

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So, let's not lose focus on the ecomomy...it's not too bad

Let's start by just looking at market action. After nearly a decade of underperformance US financials are showing relative strength. They are indeed cheap on a book basis. But can there be any visibility into earnings growth? Could the end of the Obama years lead to better banking futures? The bank index is now testing multi year highs and happened to be up big in yesterdays massive rally. Here you have the Dow Jones Transportation index.As you can imagine, this is a very cyclical index and is a forward leaning indicator. As goods and people are transported, ecomomic growth moves along with it. Here is a reinforcing datapoint. This shows US Air traffic. Clearly lots of strength here. As both a consumer discretionary item and

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Could there be a Brexit 2.0, and are the markets prepared?

Just as the Brexit outcome in the United Kingdom had very significant affects on global markets, I view real risk of a similar type of event happening in the United States with our Presidential election on Tuesday, November 8. Going into the vote in the UK, the world was sanguine about the chances of the British Citizenry actually voting for a "Leave". The punditry that nary has an independent thought and so often just writes what they are told, assured the world that the vote would be a non event. Even global betting markets had the odds skewed as if it were a sure thing that the British citizens would never be so dumb as to vote to leave. The scare mongering and independence

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Transfer of assets & business interests: Proposed Treasury Regulations Under IRC Section 2704 Would All But Eliminate Valuation Discounts

by Paul McGloin Client Considering Planning Transfers May Wish to Implement Them Prior to December 1st It is rare that a proposed Treasury Regulation gets much attention from estate planning practitioners, especially ones issued during the vacation month of August. However, on August 4th the IRS issued proposed Treasury Regulations under a little-used section of the Internal Revenue Code that may represent one of the biggest changes in estate planning law in the past thirty years. Planners around the country have spent much of the past month huddled in discussion groups and on conference calls to try to understand what these far-reaching changes mean for their clients. For decades, when making transfers of interests in family-owned businesses, planners have relied on valuation discounts to reduce the

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Of valuations

Not that I want to be the one spinning anything in equities at this point as positive, but, if you look at S&P valuations(courtesy bloomberg) based upon two particular metrics, you find that on a price/book AND a price/cash flow(trailing) you do NOT find overvaluation. In fact, if you consider the price/cashflow metric alone, it appears relatively inexpensive. Next, if you look at both trailing PE and estimated PE, the valuation falls into a mid range. But, this is NOT the case if you look at trailing Price/ebitda. In this case, it shows extreme overvaluation. One last thought, especially as it relates to the P/Book ratio, this metric seems at odds with the continued profit margin strength.

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In spite of ourselves....

It's Your Brain, Man... According to research firm Dalbar, Inc. Behavior is the number one cause of investor underperformance. At Intellectus,along with key partners, we are in the midst of some very extensive work on investor behavior. According to our friend Dr. Thomas Oberlechner, former MIT and Harvard Behavioral economist and Senior psychologist to some of the worlds top hedge funds, more than 25% of an average investor return can be attributed to his or her behaviors. That is more than 2x the cost of "fees" per se. Our work has taken us into the realm of research and technology builds to discover behavioral biases and impact upon investing. This research is being turned into algorithms that can extract amazing insights and hints

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Has China been the only one keeping oil prices from collapsing?

In a great article by Steven Mufson, of the Washington Post, he profiles Orbital Insight, a company of which I am a founding board member. Our CEO, Dr. James Crawford has created a Deep Learning Convolutional Neural Network which is proving to be rather revolutionary to the world. Especially the world of Investing and finance. Based upon data analyzed in the following article, China's Strategic Petroleum Reserves are far larger than what was estimated. https://www.washingtonpost.com/business/economy/china-may-be-stockpiling-more-oil-than-anyone-realized/2016/09/29/69492224-85e4-11e6-a3ef-f35afb41797f_story.html?postshare=4901475169456265&tid=ss_fb-bottom

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A.I., Deep Learning & Neural Nets in investment Management

Deep Investing (from Wired Magazine) "Though evolutionary computation drives the system today, Hodjat also sees promise in deep learning algorithms—algorithms that have already proven enormously adept at identify images, recognizing spoken words, and even understanding the natural way we humans speak. Just as deep learning can pinpoint particular features that show up in a photo of a cat, he explains, it could identify particular features of a stock that can make you some money." https://www.wired.com/2016/01/the-rise-of-the-artificially-intelligent-hedge-fund/

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Welcome to the Intellectus Partners blog

We would like to thank all of you who have so loyally supported Intellectus Partners in our initial year after launch! It may sound trite, but it is only with these incredibly strong relationships with you, our clients and client network that we have been able to sprint out of the gate with such strength. It is our mission to be the trusted partner to our innovative client base in all things related to their wealth and business enterprises. It is our view that entrepreneurs and leaders are different. You are different. With folks like you, we cannot seperate the entrepreneur from his business not her business from her wealth. The reason that we hold to that mantra is because we believe that it drives a

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