📈 Sam Bankman-Fraud

Plus: Weightloss drugs show FAT returns

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First up, U.S. stocks have been charting an unusual path, trailing international equities, a departure from the usual scenario where the S&P 500 consistently outperformed global markets.

In a significant legal development, a Kansas City jury swiftly reached a verdict in a case with potential long-term implications for the housing market. The verdict, which reached a staggering $1.8 billion, centers on allegations that the National Association of Realtors conspired with two major brokerages to maintain high commissions on home sales, potentially impacting home prices in the future.

And In the world of crypto, Sam Bankman-Fried, who once shone brightly in the industry, has now faced conviction for fraud.

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International equities are beating U.S. stocks (3 minute read)
Over the past year, U.S. stocks have been trailing international equities, which is an unusual deviation from the broader trend where the S&P 500 index has consistently outperformed global markets. This is an atypical scenario, where international stocks have outpaced the S&P 500 in a one-year holding period. To put this into perspective, the iShares ETF (ACWX), which encompasses a diverse array of international companies while excluding U.S. stocks, has shown a 10% increase in value over the last 12 months up to Tuesday, whereas the S&P 500 has recorded an 8.3% gain during the same period. However, when examined over a more extended time frame, U.S. stocks have consistently demonstrated superior performance, and this discrepancy cannot be solely attributed to the influence of the Big Tech sector.

The $1.8 billion verdict that could lower home prices (2 minute read)
A Kansas City jury's swift three-hour verdict finding the National Association of Realtors conspired with two major brokerages to maintain high commissions on home sales carries significant long-term implications. With U.S. homebuyers collectively spending approximately $100 billion annually on broker fees, the upheld verdict is likely to reduce this figure and potentially lead to lower home prices. The defendants now face a potential $1.8 billion liability, along with the possibility of treble damages, potentially reshaping the landscape of real estate transactions. Presently, sellers typically incur a 5%-6% fee of a home's sale price, which is divided between the seller's agent and the buyer's agent. The plaintiffs argued that NAR and its co-defendants colluded to maintain these high rates, thereby hindering negotiations to lower fees for sellers and buyers.


Sam Bankman-Fried found guilty of fraud (3 minute read)
Former cryptocurrency luminary Sam Bankman-Fried has been convicted of fraud. On November 2nd, a New York jury reached its verdict, marking the culmination of a lengthy trial where Bankman-Fried defended himself against accusations of criminally mishandling his cryptocurrency exchange FTX and trading company Alameda Research. After more than a month of proceedings, the jury deliberated for four and a half hours before pronouncing Bankman-Fried guilty on all seven charges, which include wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. His sentencing is scheduled for March 28th of the following year, with the potential for a lengthy prison term. Check out our Crypto newsletter to stay up to date.

Visualizing The Investments Of The Ultra-Wealthy (3 minute read)
According to a global survey encompassing more than 500 wealth managers, family offices, and private bankers responsible for overseeing a collective $2.5 trillion in assets, a significant portion of their fortunes is allocated to various investment avenues. Primary and secondary homes, accounting for 32% of total wealth, constitute the largest share across assets, with the average Ultra High Net Worth Individual (UHNWI) owning 3.7 residences. Additionally, investments in stocks represent nearly 20% of UHNWI wealth, with the Americas holding the highest proportion of wealth in equities at 33%, followed by Europe at 28%, and Asia at 26%. Furthermore, the survey reveals that in 2023, almost six in ten UHNWIs plan to acquire art as part of their luxury investments.

A huge quarter for Ozempic (2 minute read)
Strong demand for weight loss injectables has significantly driven up Danish pharmaceutical company Novo Nordisk's third-quarter sales, marking a 29% year-over-year increase, resulting in revenues of $8.58 billion. Novo Nordisk's prominent weight loss medication, Wegovy, experienced an astonishing 734% surge in sales when compared to the same period last year. Wegovy, which induces a feeling of fullness by simulating a hormone, has garnered attention from junk food companies. With the escalating demand for weight loss solutions, pharmaceutical companies are working diligently to boost production to alleviate supply shortages. According to Morgan Stanley analysts, it is estimated that approximately 7% of the U.S. population, or 24 million Americans, will be using these drugs by 2035.

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A Blind Spot About Private School Families: They Aren’t All Rich! (6 minute read)
There's a common misconception that all families sending their children to private schools are affluent, akin to paying for bottled water when tap water is readily available. Yet, after engaging with over a hundred private school families over three years, Financial Samurai discovered a different reality. For many of these families, the situation was quite the opposite. Opting for private education often strained their finances, leading to tighter cash flow, and consequently, more modest lifestyles with cheaper cars and homes. In essence, private school attendance was actually having the unexpected effect of diminishing the financial well-being of some parents compared to if they had enrolled their children in public schools.

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