Theresa’s Chat Magazine – Private Equity, AST SpaceMobile, And Looking at a Bigger Picture

Each week we publish a summary of a few of the articles, topics and ideas found in the MoSI chat. We encourage you to visit chat to read about updates to our investments, share ideas and ask questions. See you in chat (aka investment group feeds). 

What does it mean if private equity goes mass market?

There’s a push afloat that makes private equity markets more available to retail investors. Here’s a question to consider:

Private Markets Are Going Mass Market. Is That a Good Thing?

Pineapple_Paul Sep 18

Read the article and it looks like a minefield.

Kirk Spano Sep 18

yah

I think the introduction of non-sophisticated investors to private equity is going to cause a massive drop in those values at some point. The private debt issuances are largely backwards looking valuations that will lead to 70-90% haircuts on I’d bet around half of them. Packaging commercial real estate and selling to retail investors will also see massive haircuts after they figure out to rent those buildings they’ll have to spend a ton to redesign and remodel. There’s going to be a lot of shit that goes down about 6 or 7 years from now. Maybe they’ll blame Medicare and Social Security for the private finance collapse.

Pineapple_Paul Sep 18

From what i understand the numbers they report are sketchy at best. Hard Pass unless I have an insider.

Kirk Spano Sep 18

like anything else, understand what you’re investing in. Would you buy a house without an inspection? Not unless you planned to tear it down.

AST SpaceMobile Called Madrid from Maui

AST SpaceMobile Achieves Space-Based 5G Cellular Broadband Connectivity From Everyday Smartphones, Another Historic World First – AST SpaceMobile

On September 8, 2023, using an unmodified smartphone located in a wireless dead zone, ASTS used their satellite cell tower in space to place a phone call.

LesRob Sep 19

Really like the fact that everyone has skin the game from T.

Brian Steege 1964 Sep 19

Maybe an interesting note for US cell carriers…as far as I can tell only AT&T an agreement with ASTS, besides all the other’s worldwide…if all goes to plan, would AT&T see some bottom line boost? Verizon and T Mobile don’t appear to have any such access…

Kirk Spano Sep 19

that’s been the thesis I used when I was long. I am selling T puts, but, I am careful. It’ll be H2 2024 before we’d see big progress based on launch and test schedule.

wolfemp Sep 19

ASTS is also still dependent on SpaceX for the 1st Q satellite launch which could see delays

A look at the big picture

Some words from Kirk about a longer term outlook

Kirk Spano Sep 20

So, this is the strong dollar push into fall I talked about in July. I don’t expect it to last very long, but I don’t expect it to come off much more than it did recently either in the next year. When Congress cuts their budget deal, it’s going to be a first step to a U.S. balanced budget in the 2030s that I have talked about to all of your disbelief. That’ll be a floor under the dollar.

I want you to think about what kind of deficit spending we NEED to do in the next 30-50 years. If you think about it, there really isn’t any.

We KNOW that healthcare costs will go down because of AI and that eventually we’ll allow immigration to take care of old Boomers.

We KNOW that EVs and Semiconductors are producing jobs and building at-home supply chains.

We KNOW that companies are choosing to re-shore to be away from the Russians and Chinese.

We KNOW we have the land and tech to grow our own food, produce our own energy.

We mostly KNOW that we will incorporate desalination into the energy equation at the coasts fixing two problems at one point.

We KNOW that America controls something north of $300 TRILLION in assets. I think it’s closer to double that, but, you know, we can stick to what’s reported.

When you think about our debt compared to our assets, it becomes an interesting pie chart, one that says, wow, there’s a lot of pie left.

So, the dollar is going to be in a higher range a long time. Can it break down? Sure. But, never for long. The only 2 crisis I see in the next decade are the Boomers retiring with the last ones in 2029 onto Medicare, and, the private equity lending boom that’s going on right now. The private equity lending boom, where private equity firms lend to companies because banks won’t, will lead to CDOs that are the similar shit as what there was that caused the financial crisis. The difference will be it’s company debt rather than backed by real estate. So, can go to zero versus couldn’t go to zero.

Big warning: stay away from private loan vehicles because you think that fat interest rate is sexy. Because in 5 years or less, they won’t be able to refinance most of the CDO because many of the companies only existed because of ZIRP. We need to hope Gensler loses his rager for Bitcoin and focuses on private equity looting the world and setting up the next financial crisis near decade end.

Articles of interest posted this past week

Spire Global Selected by Estuaire to Monitor and Reduce Aviation Emissions

Thank Eisenhower for “Sell Rosh Hashanah, Buy Yom Kippur”

Electric Hydrogen Announces Its First 100MW Project

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