SPAC Success Can Hinge on This Single Factor

For founders looking to take their company public, special purpose acquisition companies (SPACs) offer a less risky, shorter alternative to traditional IPOs, if a few best practices are observed. In a SPAC, companies are formed in order to raise capital in an initial public offering and then uses the cash to acquire a private company, thereby taking it public, usually within a two-year time frame.

The process recently has become popular, especially because SPACs allow founders to avoid the extensive disclosures mandated by the traditional IPO process. Often, SPAC investors don’t even know the startup they will be acquiring–earning SPACs the nickname of “blank-check companies.” In 2021, there were 30 percent more SPAC issuances than traditional IPOs, according to The Financial Times.

But if you’re considering a blank-check deal, keep in mind that there’s one factor that is the best determinant of success. According to Wolfe Research, SPACs led by “experienced operators,” or CEOs with direct operating experience in the industry of the company being acquired, had greater returns on average than those that did not. The research found that just one year out, SPACs with experienced operators averaged a 73 percent rally, whereas those lacking an industry veteran suffered a 14 percent loss on average.

As reported by CNBC, a rather volatile market led some SPAC deals to unravel, causing companies to settle for less-than-optimal targets or change the deal all together. For this reason, the U.S. Securities and Exchange Commission warned investors in March to re-consider putting money in SPACs, especially those run by celebrities.

“It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment,” the SEC wrote on its website. That’s why if you’re considering a SPAC, don’t be swayed by big dollar amounts or celebrity names. Instead, think carefully about the experience that the blank-check company leaders are bringing to the table.

By Brit Morse, Assistant editor, Inc.

Source: SPAC Success Can Hinge on This Single Factor | Inc.com

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Critics:

Special Purpose Acquisition Company  also known as a “blank check company“, is a shell corporation listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional initial public offering process. According to the U.S. Securities and Exchange Commission (SEC), “A SPAC is created specifically to pool funds in order to finance a merger or acquisition opportunity within a set timeframe. The opportunity usually has yet to be identified”. SPACs raised a record $82 billion in 2020, a period sometimes referred to as the “blank check boom”.

Because a SPAC is registered with the SEC and is a publicly-traded company, the general public can buy its shares before the merger or acquisition takes place. For this reason they’ve been referred to as the ‘poor man’s private equity funds.’

Academic analysis shows the investor returns on SPACs post-merger are almost uniformly heavily negative (however, sponsors at the flotation of the SPAC can earn excess returns), and their proliferation usually accelerates around periods of economic bubbles, such as the everything bubble in 2020–2021, when the volume and quantity of capital raised by SPACs set new all-time records.

SPACs generally trade as units and/or as separate common shares and warrants on the Nasdaq and New York Stock Exchange (as of 2008) once the public offering has been declared effective by the SEC, distinguishing the SPAC from a blank check company formed under SEC Rule 419. Commonly, units are denoted with the letter “u” (for unit) appended to the ticker symbol of SPAC shares.

Trading liquidity of the SPAC’s securities provide investors with a flexible exit strategy. In addition, the public currency enhances the position of the SPAC when negotiating a business combination with a potential merger or acquisition target. The common share price must be added to the trading price of the warrants to get an accurate picture of the SPAC’s performance.

References

5 Pieces of Money Advice No One Ever Wants to Hear From Me

You know how adults always told you to “eat your veggies” and greens when you were a kid? Well, that nagging advice doesn’t necessarily stop in adulthood. As a financial planner, I’m constantly giving people good advice they don’t want.

I know no one wants to hear this kind of money advice. But those who do listen — and more importantly, implement these ideas — tend to have better control over their cash flow, higher savings rates, and more financial power.

You might not like it, but much like eating broccoli and kale, taking it in is often for your own good.

1. Don’t buy so much house

Buying a home is rarely a data-driven decision. It’s an emotional one, and for good reason. For many people, homeownership represents stability, security, and even status.

These are not unimportant things, but too many people use their emotions as excuses to throw financial reality out the window when it comes to house hunting.

Set a budget and stick to it. We often recommend keeping your total annual housing costs to no more than 20% of your gross annual household income.

This helps ensure you retain flexibility in other areas of your cash flow so that you can own your home and keep pursuing other important goals or have money available for your other priorities.

2. And don’t assume your house is a good investment

I often caution people against thinking of their home as an investment. Again, that doesn’t mean buying is a bad idea or your house isn’t worth as much as you think it is. But an investment should provide a return.

A single-family home that serves as your primary residence (and does not provide rental income) may be an excellent utility. It is not, however, what I would consider a good investment.

Home values do tend to rise over time, but the cost of ownership, maintenance, and upkeep often erode most of the “gains” you might see when just looking at the transaction of buying and then selling your home on paper.

A reasonable, real return on single-family homes runs about 2%. That’s not nothing, but it’s also not something you can assume will fund your full retirement, either (especially when you have to live somewhere, retired or not, and most people put the equity from a home sale into their next purchase).

3. Save more than you think you need to

It’s really important to me that I help my clients strike a balance between enjoying their lives in the present while also building assets and future financial security. This would be much easier to do if we had a crystal ball and could accurately predict what life would be like in 10, 20, even 30 years.

We’d know your budget. We’d know what kinds of emergencies you’d have to deal with, and prepare accordingly. And we’d understand what your life would look like (including how long it would be).

With that clarity, it would be possible to say, “you need $X. Save just that and feel free to spend the rest.” That is, obviously, not how life works.

The solution? Save more than you think you need to, because then you give yourself a margin of safety. By saving more than you necessarily must save to “be OK,” you can better:

  • Handle emergencies
  • Take advantage of opportunities when they come up (either to spend on an unexpected trip, for example, or to use money on an investment you feel passionate about)
  • Incorporate new goals into your planning over time

Saving more that you think you need today also buys you more choice and freedom in the future. The usual guideline I give to clients to help them achieve this is to save 25% of annual gross income.

4. Have a backup plan

It might sound like a doom-and-gloom approach to finances, but I preach about always having a backup plan — or those margins of safety, or wiggle room, or contingencies.

No one wants to imagine a worst-case scenario, but if something actually went sideways in your financial life, you’ll be glad you had multiple levels of safety net built into your overall plan.

You can do this in a number of ways, including some we’ve already talked about, like saving more than you think you need to save.

Other ways of building in backups is by maintaining an emergency fund, using conservative assumptions around income, and overestimating your expenses when you do any kind of long-term financial projection, and not counting on any kind of windfall (from bonuses and commissions to inheritances) to make your plan work.

5. Stop trying to time the market

It is so tempting to think we can successfully time the market. Why? Because drops and spikes in the stock market look stupidly obvious with hindsight.

It’s very easy to look back at something like 2008 (or maybe even the spring of 2020 at this point) and feel like you know when the best times to buy and sell would have been… because they already happened. 

Guessing what comes next without the benefit of knowing how things played out is not the same thing. Data shows us that even professionals fail to time the market repeatedly. You may get lucky once, but repeating that performance over and over again for the next few decades is virtually impossible.

Build a strategic investing plan — and then stick to it, regardless of current events.

It’s probably not as fun and may not be as sexy as bragging about your stock picks on Robinhood, but it works a whole lot better in the long run.

By:

Eric Roberge, CFP, is the founder of Beyond Your Hammock. He helps professionals in their 30s do more with their money.

Source: 5 Pieces of Money Advice No One Ever Wants to Hear From Me

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Mental Models: How to Train Your Brain to Think in New Ways

You can train your brain to think better. One of the best ways to do this is to expand the set of mental models you use to think. Let me explain what I mean by sharing a story about a world-class thinker.

I first discovered what a mental model was and how useful the right one could be while I was reading a story about Richard Feynman, the famous physicist. Feynman received his undergraduate degree from MIT and his Ph.D. from Princeton. During that time, he developed a reputation for waltzing into the math department and solving problems that the brilliant Ph.D. students couldn’t solve.

When people asked how he did it, Feynman claimed that his secret weapon was not his intelligence, but rather a strategy he learned in high school. According to Feynman, his high school physics teacher asked him to stay after class one day and gave him a challenge.

“Feynman,” the teacher said, “you talk too much and you make too much noise. I know why. You’re bored. So I’m going to give you a book. You go up there in the back, in the corner, and study this book, and when you know everything that’s in this book, you can talk again.” 1

So each day, Feynman would hide in the back of the classroom and study the book—Advanced Calculus by Woods—while the rest of the class continued with their regular lessons. And it was while studying this old calculus textbook that Feynman began to develop his own set of mental models.

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What users *think* they know about your system will determine how they interact with the design. Understand users’ mental models to design something that’ll work well in practice. #UX #mentalmodels #userpsychology #HCI

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“That book showed how to differentiate parameters under the integral sign,” Feynman wrote. “It turns out that’s not taught very much in the universities; they don’t emphasize it. But I caught on how to use that method, and I used that one damn tool again and again. So because I was self-taught using that book, I had peculiar methods of doing integrals.”

“The result was, when the guys at MIT or Princeton had trouble doing a certain integral, it was because they couldn’t do it with the standard methods they had learned in school. If it was a contour integration, they would have found it; if it was a simple series expansion, they would have found it. Then I come along and try differentiating under the integral sign, and often it worked. So I got a great reputation for doing integrals, only because my box of tools was different from everybody else’s, and they had tried all their tools on it before giving the problem to me.” 2

Every Ph.D. student at Princeton and MIT is brilliant. What separated Feynman from his peers wasn’t necessarily raw intelligence. It was the way he saw the problem. He had a broader set of mental models.

What is a Mental Model?

A mental model is an explanation of how something works. It is a concept, framework, or worldview that you carry around in your mind to help you interpret the world and understand the relationship between things. Mental models are deeply held beliefs about how the world works.

For example, supply and demand is a mental model that helps you understand how the economy works. Game theory is a mental model that helps you understand how relationships and trust work. Entropy is a mental model that helps you understand how disorder and decay work.

Mental models guide your perception and behavior. They are the thinking tools that you use to understand life, make decisions, and solve problems. Learning a new mental model gives you a new way to see the world—like Richard Feynman learning a new math technique.

Mental models are imperfect, but useful. There is no single mental model from physics or engineering, for example, that provides a flawless explanation of the entire universe, but the best mental models from those disciplines have allowed us to build bridges and roads, develop new technologies, and even travel to outer space. As historian Yuval Noah Harari puts it, “Scientists generally agree that no theory is 100 percent correct. Thus, the real test of knowledge is not truth, but utility.”

The best mental models are the ideas with the most utility. They are broadly useful in daily life. Understanding these concepts will help you make wiser choices and take better actions. This is why developing a broad base of mental models is critical for anyone interested in thinking clearly, rationally, and effectively.

The Secret to Great Thinking and Decision Making

Expanding your set of mental models is something experts need to work on just as much as novices. We all have our favorite mental models, the ones we naturally default to as an explanation for how or why something happened. As you grow older and develop expertise in a certain area, you tend to favor the mental models that are most familiar to you.

Here’s the problem: when a certain worldview dominates your thinking, you’ll try to explain every problem you face through that worldview. This pitfall is particularly easy to slip into when you’re smart or talented in a given area.

The more you master a single mental model, the more likely it becomes that this mental model will be your downfall because you’ll start applying it indiscriminately to every problem. What looks like expertise is often a limitation. As the common proverb says, “If all you have is a hammer, everything looks like a nail.” 3

When a certain worldview dominates your thinking, you’ll try to explain every problem you face through that worldview.

Consider this example from biologist Robert Sapolsky. He asks, “Why did the chicken cross the road?” Then, he provides answers from different experts.

  • If you ask an evolutionary biologist, they might say, “The chicken crossed the road because they saw a potential mate on the other side.”
  • If you ask a kinesiologist, they might say, “The chicken crossed the road because the muscles in the leg contracted and pulled the leg bone forward during each step.”
  • If you ask a neuroscientist, they might say, “The chicken crossed the road because the neurons in the chicken’s brain fired and triggered the movement.”

Technically speaking, none of these experts are wrong. But nobody is seeing the entire picture either. Each individual mental model is just one view of reality. The challenges and situations we face in life cannot be entirely explained by one field or industry.

All perspectives hold some truth. None of them contain the complete truth.

Relying on a narrow set of thinking tools is like wearing a mental straitjacket. Your cognitive range of motion is limited. When your set of mental models is limited, so is your potential for finding a solution. In order to unleash your full potential, you have to collect a range of mental models. You have to build out your decision making toolbox. Thus, the secret to great thinking is to learn and employ a variety of mental models.

Expanding Your Set of Mental Models

The process of accumulating mental models is somewhat like improving your vision. Each eye can see something on its own. But if you cover one of them, you lose part of the scene. It’s impossible to see the full picture when you’re only looking through one eye.

Similarly, mental models provide an internal picture of how the world works. We should continuously upgrade and improve the quality of this picture. This means reading widely from the best books, studying the fundamentals of seemingly unrelated fields, and learning from people with wildly different life experiences. 4

The mind’s eye needs a variety of mental models to piece together a complete picture of how the world works. The more sources you have to draw upon, the clearer your thinking becomes. As the philosopher Alain de Botton notes, “The chief enemy of good decisions is a lack of sufficient perspectives on a problem.”

The Pursuit of Liquid Knowledge

In school, we tend to separate knowledge into different silos—biology, economics, history, physics, philosophy. In the real world, information is rarely divided into neatly defined categories. In the words of Charlie Munger, “All the wisdom of the world is not to be found in one little academic department.” 5

World-class thinkers are often silo-free thinkers. They avoid looking at life through the lens of one subject. Instead, they develop “liquid knowledge” that flows easily from one topic to the next.

This is why it is important to not only learn new mental models, but to consider how they connect with one another. Creativity and innovation often arise at the intersection of ideas. By spotting the links between various mental models, you can identify solutions that most people overlook.

Tools for Thinking Better

Here’s the good news:

You don’t need to master every detail of every subject to become a world-class thinker. Of all the mental models humankind has generated throughout history, there are just a few dozen that you need to learn to have a firm grasp of how the world works.

Many of the most important mental models are the big ideas from disciplines like biology, chemistry, physics, economics, mathematics, psychology, philosophy. Each field has a few mental models that form the backbone of the topic. For example, some of the pillar mental models from economics include ideas like Incentives, Scarcity, and Economies of Scale.

If you can master the fundamentals of each discipline, then you can develop a remarkably accurate and useful picture of life. To quote Charlie Munger again, “80 or 90 important models will carry about 90 percent of the freight in making you a worldly-wise person. And, of those, only a mere handful really carry very heavy freight.” 6

I’ve made it a personal mission to uncover the big models that carry the heavy freight in life. After researching more than 1,000 different mental models, I gradually narrowed it down to a few dozen that matter most. I’ve written about some of them previously, like entropy and inversion, and I’ll be covering more of them in the future. If you’re interested, you can browse my slowly expanding list of mental models.

My hope is to create a list of the most important mental models from a wide range of disciplines and explain them in a way that is not only easy to understand, but also meaningful and practical to the daily life of the average person. With any luck, we can all learn how to think just a little bit better.

James Clear

 

By: James Clear

 

Source: Mental Models: How to Train Your Brain to Think in New Ways

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Warren Buffett Says You Should Practice the 4 Habits That Separate The Best From The Rest

Berkshire Hathaway CEO Warren Buffett.

Warren Buffett, the chairman and CEO of Berkshire Hathaway, turns 91 in August. Remarkably, at an age where most people’s cognitive functions have entirely regressed, where many are now at the hands of caretakers, Buffett still captures the world’s attention as the fifth richest person on the planet.

The greatest investor of this generation has amassed a following of millions who’ve learned, like Buffett, that long-term success is achieved by making smart decisions — in investing and in life.

Here are four Buffett lessons that will yield good returns when you choose to act on them.

1. Master the practice of “boundaries”

With all the demands on him every day, Buffett learned a long time ago that the greatest commodity of all is time. He simply mastered the art and practice of setting boundaries for himself. That’s why this Buffett quote remains a powerful life lesson. The mega-mogul said:

The difference between successful people and really successful people is that really successful people say no to almost everything.

Buffett’s advice is a bull’s-eye to our conscience. We have to know what to shoot for to simplify our lives. It means saying no over and over again to the unimportant things flying in our direction every day and remaining focused on saying yes to the few things that truly matter.

2. Invest in your personal development

What assets should you be investing in the most? In a 2019 interview, Buffett said: “By far the best investment you can make is in yourself.”

As Buffett has repeatedly taught us, it means to never stop acquiring knowledge — the kind of knowledge that betters yourself as a whole person, not just as an investor.

Buffett’s lifelong pursuit of learning, which he shares with his longtime Berkshire Hathaway partner and colleague Charlie Munger, is the secret sauce of his success.

3. Model the leadership behaviors of the best managers

In Buffett’s 2015 letter to shareholders of Berkshire Hathaway, he summarized how one arrives at leadership greatness in a few words:

Much of what you become in life depends on whom you choose to admire and copy.

The quote was in reference to Tom Murphy, who taught Buffett everything he learned about managing a company. Murphy, who was Buffett’s biggest admirer, gave plenty of lessons on the best management practices that Buffett has adapted for his own companies, including:

  • Give autonomy to workers.
  • Delegate your authority effectively and wisely.
  • Hire for integrity.

4. Build a positive reputation

Buffett’s reputation is founded on his principled and level-headed approach to his personal and professional life. When it comes to building a good reputation, these are some things worth prioritizing:

  • Establishing trust, transparency, and fairness
  • Offering good value and high-quality products and services
  • Treating people with dignity and respect
  • Communicating clearly and promptly
  • Providing a service to the community

You should treat your business practice as a reflection of yourself, and that means being thoughtful and considerate of how your decisions affect others. If you embrace professional opportunities as a chance to add value to your community, your reputation will reflect your own personal growth.

Source: Warren Buffett Says You Should Practice the 4 Habits That Separate the Best From the Rest | Inc.com

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“Poor People Should Do This!” Warren Buffett ***SUBLIMINAL PROGRAMS*** – http://bit.ly/2jVoXRb ►If you struggle and have a hard time, consider taking an online therapy session with our partner BetterHelp. https://tryonlinetherapy.com/dailymot…. We receive commissions for referrals to BetterHelp. We only recommend products we know and trust. ►MOTIVATIONAL CLOTHES Be a Dreamer http://onlydreamersallowed.com ____________________ 👉Follow us on: https://twitter.com/dailyM_channel https://www.facebook.com/dailyMOTIVAT… https://www.instagram.com/dailymotiva…
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Millionaire Mindset: 6 Steps to Think and Act Like a Millionaire

6 Steps to the Millionaire Mindset

Why I don’t make Millions?

Steps to Think and Act Like a Millionaire

Millionaire Lessons

Rules of the Millionaire Mindset

1. Invest At Least 10% Of Your Income In Yourself

The next step

The Lesson

2. Invest At Least 80% of Your “Off” Time into Learning

Millionaire Mindset: Becoming more productive

3. Don’t Work For Money, Work to Learn

How to have a millionaire mindset when you have a average job?

Don’t Focus on the money.

4. Don’t Learn For Entertainment, Learn To Create More Value

Nurture the passions you make pay.

Get rid of hobbies that are bad.

5. Invest At Least 10% Of Your Income Into Vehicles That Will Generate More Money

Advantages of Investing

6. Shift Your Motivation From Getting To Giving

Ethics of the Millionaire Mindset

Contribution is the ultimate purpose.

Now I have the Millionaire Mindset:

Joseph Brown

 

Source: Millionaire Mindset: 6 Steps to Think and Act Like a Millionaire | by Joseph Brown | The Startup | Medium

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I think you’ll agree with me when I say that everybody wants to know how to become a millionaire and get rich. Unfortunately, some people just don’t know where to start. Would you be surprised to learn that you can get rich in your own way, starting today? http://bit.ly/2ZBFdpX The following 6 tips will help you visualize the road ahead of you and enable you to set goals to make more money than you ever dreamed.
Learn how to think like a millionaire with my FREE download. Click the link above! ___ Learn more: Give me a follow on Clubhouse! @briantracy — see you there! Subscribe to my channel for free offers, tips and more! YouTube: http://ow.ly/ScHSb Facebook: http://www.facebook.com/BrianTracyPage Twitter: http://www.twitter.com/BrianTracy Google+: +BrianTracyOfficialPage Pinterest: http://www.pinterest.com/BrianTracy Instagram: @TheBrianTracy Blog: http://bit.ly/1rc4hlg
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