Private equity firms are rolling in it | Brexit continues to deliver |

Hi Finimizer, here's what you need to know for September 20th in 3:14 minutes.

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Today's big stories

  1. Private equity firms have been breaking dealmaking and fundraising records left, right, and center this year
  2. There could be an even better way to profit from the EV boom than Tesla, Nio, and the rest – Read Now
  3. Retail sales fell in the UK for the fourth month in a row in August, suggesting the country’s recovery isn’t as strong as it looked

Filthy Rich

Filthy Rich

What’s Going On Here?

Private equity (PE) firms have been breaking dealmaking and fundraising records this year, and suddenly they have more money than they know what to do with.

What Does This Mean?

Private equity firms use a mix of investor money and debt to buy out a target company, in hopes of improving day-to-day operations and selling it on for a profit a few years later. And that business model has never looked more appealing: record-low interest rates have made it super cheap for them to raise the funds they need, while sky-high stock prices have put them on the scent of market-beating returns. That might be why the PE industry has accounted for a record 30% of all deals made this year globally (tweet this). And the rush isn’t slowing down anytime soon either: the sector’s built up a record $3.3 trillion of unspent cash in the first half of the year, meaning it still has plenty in the tank for even more acquisitions.

Why Should I Care?

The bigger picture: Yep, regulation again.
PE’s rapid growth does come with a downside: it’s been attracting more and more attention from global regulators. China announced last month that it would be cracking down on the way private equity funds raise money from retail investors, while the US is thinking about limiting how much debt they can use for deals and ending tax breaks for fund managers. All this intervention could knock the amount PE firms are able to fundraise and, by extension, the number of private equity deals they’re able to strike.

For you personally: Don’t get left out.
You probably aren’t able to invest directly in PE funds unless you happen to have a family fortune after spending a night in a spooky mansion, but you can get in on the action: there’s an exchange-traded fund that tracks the performance of nearly 70 private equity firms around the world – and it’s up 37% this year alone.

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Analyst Take

Forget Tesla. There's An Even Better EV Play Right Now.

Forget Tesla. There's An Even Better EV Play Right Now.

What’s Going On Here?

It’s no secret that electric vehicle (EV) sales are booming.

That word gets bandied about a lot, but it’s true: they’re expected to rise from 3 million in 2020 to 14 million in 2025.

It’s hardly surprising, mind you: the world’s governments are going out of their way to offer tax breaks to incentivize the transition, if not banning fossil fuel-powered vehicles altogether.

But while you could invest in Tesla, or Nio, or Xpeng, you could also look toward something all those EV-makers rely on to produce their batteries, vehicles, and charging stations.

So that’s today’s Insight: the must-have materials for every EV-maker, and how to use them to bolster your portfolio.

Read or listen to the Insight here


A picks-and-shovels crypto play

There are more than a few crypto plays out there: bitcoin, ether… dogecoin.

But The Motley Fool doesn’t think a meme-inspired crypto token is the one investors should have their eye on right now.

If you want to do well with your crypto investments, The Motley Fool thinks it’s best to be positioned to make money whichever way a particular token is moving on a particular day.

And that’s what The Motley Fool has for you: a long-term picks-and-shovels solution that could give investors a simple way to potentially benefit from the entire crypto market.

In other words, an opportunity to profit even if the crypto bubble pops tomorrow.

Find Out More

Please Drink Responsibly

Please Drink Responsibly

What’s Going On Here?

The UK’s going to need to break open the hard stuff for this one: data out on Friday showed British retail sales fell for a fourth month in a row in August.

What Does This Mean?

Things have been tough for the UK’s stores lately, which the country itself bears at least some of the blame for: there’s been a shortage of workers since Britain Brexited the European Union. But there are other, more global factors at fault too, from the rise of the Delta variant to the disruption of supply chains. 7% of British retailers even said they couldn’t get hold of the materials, goods, or services they needed in August.

Those handicaps saw the number of goods sold online and in store fall 0.9% between July and August. That added insult to injury after the 2.8% drop of the month before, and it was the first time the country’s retail sales have fallen four months in a row since 1996…

Why Should I Care?

For markets: Cue the course correction.
The Bank of England (BoE) had been mulling over a raise in interest rates next year, especially after Wednesday’s announcement that inflation was much higher than expected in August. But that’s suddenly looking less likely after Friday’s data stoked concerns that the UK’s recovery isn’t as robust as it looked. That’ll come as a relief for at least one group: UK investors might’ve been worried about the dent higher rates would leave in stock prices.

The bigger picture: … or not.
The BoE might be rethinking its plans, but the UK government isn’t: it’s continuing to roll back support for workers put in place last year. Add in the tax hike it announced earlier this week, and Brits are about to have less disposable income to throw around. And with price rises putting more pressure on what they do have, retail spending isn’t likely to improve anytime soon.

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💬 Quote of the day

“Anyone who takes himself too seriously always runs the risk of looking ridiculous. Anyone who can consistently laugh at himself does not.”

– Václav Havel (a Czech statesman, writer, and former dissident)
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That picks-and-shovels play we mentioned?

Yep, The Motley Fool has found one picks-and-shovels company that’s positioned itself perfectly as a possible long-term solution for the entire crypto market.

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In fact, you’ve probably used its technology in the past few days, even if you’ve never heard the company’s name. That’s how prevalent it’s become.

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🌎 Finimize Live

👀 Crypto catches the eye

Like it or not, your bitcoin is a shiny object that’s going to attract a lot of attention from the wrong sorts of people. That’s why we invited Casa co-founder Nick Neuman to join us for Navigating The World Of Bitcoin Security, and help you make sure people with untoward intentions never get their grubby hands on it.

🚗 How To Profit From The EV Boom: 5pm UK time, September 20th
🔒 Navigating The World Of Bitcoin Security: 6pm UK time, September 21st
🚀 Should You Jump On The NFT Bandwagon?: 1pm UK time, September 22nd
📱 How To Be A Diligent Tech Investor: 4pm UK time, September 22nd
♻️ How To Turn Your Portfolio Green : 6pm UK time, September 23rd
🛢 How To Build A Commodities Portfolio: 6pm UK Time, September 27th
🤠 How To Win Big With Fractional Shares: 5pm UK time, September 28th
💰 Does It Make Sense To Own Bonds In 2021?: 3pm UK time, September 29th
🤖 The Pros And Cons Of Algorithmic Trading: 6pm UK time, September 29th

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