Peer-to-peer lending, or P2P as it’s known, is a juggernaut financial-services Disruptor.
But thanks to its supercharged growth, P2P lending has attracted the attention of regulators and other financial-market overseers. They’re scrutinizing this new form of lending from multiple angles – fearing it may be too disruptive for its own good.
The U.S. Treasury Department, the Consumer Financial Protection Bureau, financial services regulators, bank and finance company lobbyists and, most recently, the U.S. Court of Appeals for the Second Circuit are weighing in on P2P lending.
There’s a lot at stake here…
For borrowers in love with lending platforms that give them access to money that would otherwise be hard – even impossible – to get.
For private lenders who loan money to borrowers at above-average rates.
And for the owners of sites that match lenders and borrowers for a fee, including investors in publicly traded ventures like LendingClub Corp. (NYSE: LC).
There’s even more at stake for the stock market and the economic health of the country.
The issues aren’t complicated, but tackling them will be.
As we’ve said before, P2P lending is one of the biggest new developments in the world of finance.
In a market stuffed with price-shifting financial “Disruptors,” the proliferation of “activist investors” is a front-and-center catalyst we’re going to follow and cash in on.
We’re addressing activist investors today because one of the biggest noisemaking players in the biz is back in the news with his latest move.
I’m talking about Bill Ackman, the billionaire hedge fund manager who runs Pershing Square Capital Management LP. With $20 billion in assets under management, Pershing Square is an activist investor in publicly traded companies. And it was a top-performing fund last year.
Ackman’s latest target is Mondelez International Inc. (Nasdaq: MDLZ), a packaged-food giant and spin-off from Kraft Foods Group Co. with a $76 billion market value.
Unlike most spin-offs – which, as a group, tend to be market-beaters – Mondelez has frustrated analysts and investors by underperforming. Although the stock has accelerated a bit of late, the fact is that since the 2012 breakup, Mondelez shares are up only 20% – versus 50% for the Standard & Poor’s 500.
Companies like this are prime targets for activists like Ackman, former corporate raider Carl Icahn, Nelson Peltz or the late Kirk Kerkorian.
Investors of this ilk take big stakes in moribund or cash-rich companies and lean on management to make changes – pushing the “C-suite” execs to slash costs, boost buybacks or launch or raise dividends.
Investor activism is increasing.
That makes it a Disruptor that’s capable of generating meaningful wealth.
Shah says the “new economy” is here – and you can already see the space growing between the winners and losers.
Walt Disney Co. (NYSE: DIS), Tesla Motors Inc. (Nasdaq: TSLA) and Fitbit Inc. (NYSE: FIT) are taking it on the chin. And Netflix Inc. (Nasdaq: NFLX), Uber and Airbnb are on the rise.
In other words, a new order is in town.
During his latest sit-down with Making Money host Charles Payne, Shah reveals which companies are crumbling and which are crucial for your nest egg. To see Shah’s latest appearance on Fox Business, just watch the video below.
Back in early 1982, I was a clerk for a big market maker on the floor of the Chicago Board of Options Exchange (CBOE). A year later, I had a seat on the exchange, was a market maker and was running a hedge fund.
My first day of trading – for my account – was a disaster.
There was a “fast market” in FedEx Corp. (NYSE: FDX), which means the pit was crowded with traders yelling and screaming, buying and selling options based on an unexpectedly positive earnings report that had just come out. I rushed into the crowd and amassed a position.
I walked back to my booth on the floor, right next to the Salomon Brothers booth, where Norman – the investment bank’s head trader, and without a doubt the smartest guy on the floor – asked what I’d done. I told him I got “long” a bunch of calls.
Norman quickly shot back: “What’s your exit?”
Of course, I hadn’t given that a second’s thought. I was too excited about getting into the position.
Just a few minutes later, a news story said the earlier earnings report was wrong – and that FedEx had actually lost money that quarter.
I lost $30,000 in a Chicago minute.
It took me a week to make that money back, but that’s how I “earned” the first of five trading rules that are the key to getting rich.
These aren’t made-up rules. I earned and learned them from experiences just like this one.
“Big-name stocks are in bad shape,” Shah Gilani told Varney & Co. viewers in his latest appearance.
With Apple Inc. (Nasdaq: AAPL), Walt Disney Co. (NYSE: DIS), Etsy Inc. (Nasdaq: ETSY), Twitter Inc. (Nasdaq: TWTR) and more tumbling, Shah predicts which are destined to stay down and which are heading for major upswings.
The find out which stocks are “Buys” and which ones are “Avoids,” watch the video below.