I have been reading on SVB to figure out what happened and why?
It's important to me for two reasons:
1) I'm an investor (not in SIVB). Always be learning!
2) I'm a customer (of SVB), which directly impacts us (not critical).
Let's dive in!
Interest Rates (Part I)
SVB had a bunch of bonds. Those bonds' values declined as the interest rate went up. That's just what bonds do. SVB could have held the bonds and gotten paid the coupon value at maturity.
But instead, SVB sold tons of bonds at a loss! WHY?
Interest Rates (Part II)
You need to know that lots of the banks' customers started moving their cash to interest-bearing accounts, which means higher costs for SVB. According to SVB, each % point decrease in non-interest-bearing deposits would reduce its net interest income by $3M.
Didn't SVB have cash on the balance sheet?
Interest Rates (Part III)
Context: banks hold their securities in two buckets: Available to Sales (AFS) and Hold to Maturity (HTM).
With HTM, if the value of your securities goes down, you don't take any loss on the balance sheet. It's held to maturity.
With AFS, you take the loss on the balance sheet if the value goes down.
As the interest rate increased, the value of those lovely "secure" assets SVB held dropped rapidly.
Technically, any bank can be insolvent, but the balance sheet doesn't show.
Now, we hit the real story!
My educated guess: SVB realized that with the deposits not coming as fast, VCs not investing, everyone wanting interest & their assets losing value by the minute, they may be insolvent.
What to do:
Market Phycology & Mechanics
The madness began, and market mechanics took over:
Some Observations (3/10/2023)
That's what I have learned so far. Thanks for reading! Things may change, and new information may impact my conclusions. Here are some observations and lessons:
Hope you found this helpful!
Fortune favors the intelligent!
Hoda, Founder and CEO of StockCrd.io
New Year Investing Resolution
Welcome to 2023! What's your investing resolution for the new year? Here are some tips to help you get started:
1. Set clear financial goals for the year.
Whether it's saving for a down payment on a house or growing your retirement savings, having specific targets will help you stay on track.
2. Don't let your emotions drive your investment decisions.
It's easy to get caught up in the excitement of hot stocks or panic when the market dips. But research shows that a long-term, diversified investment strategy is the best way to grow wealth.
3. Take advantage of tools and resources to help you make informed decisions.
Many websites, apps, and other resources can help you research and track your investments. Don't be afraid to use them!
4. Seek out new investment opportunities.
Don't be afraid to branch out and try new things. Expanding your horizons can lead to new opportunities and higher returns, whether it's a new sector, a different asset class, or a new investment strategy.
5. Remember, investing is a marathon, not a sprint.
Keep going if you see immediate results. Building wealth takes time, but you can achieve your financial goals with patience and persistence.
So make this the year you improve your investing skills and remember all your life as the year you made the best investment decisions.
And, when you are ready, Stock Card can help you achieve your new year investing resolution in four ways:
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Terms: You must insert promo code "2023adventure" in the promo code box. The offer is valid until the end of Jan. 1st, 2023. Your subscription auto-renews if you do not cancel during the subscription period. The 50% discount is only valid for new VIP users and applies to your subscription's first year or month, depending on your plan.
The End of The Year Song
In December of 2018, we published our adaptation of Frank Sinatra's "My Way" song after quite a brutal December for the stock market! While 2022 has been a much more challenging year for investors, the song resonated with us again, and we wanted to reshare it with you!
If you read it back in 2018, we are delighted to still have you with us!
And if you are reading it for the first time, may you sing it with a smile and enjoy the last trading (investing) day of the year.
Happy New Year to every one of you!
And, now ...
And now, the end of the year is near
And so we face the final day of the market
Our friends, we'll say it clear
We'll state our case, of which we're certain
We've lived a year that's full
We went through each and every market up and down-way
And, more, much more than this, we did it the Stock Card way!
Regrets of buying, we've had a few
But then again, too few to mention
We did what we had to do and saw it through without
We planned each investment pick, each careful decision
along the byway
And more, much more than this, we did it the Stock Card way
Yes, there were times, we're sure you knew
When we got scared more than we could chew
But through it all, when there was doubt
We used Stock Cards and validated it out
We faced it all, and we stood tall and did it the Stock Card way
We've watched, we've bought and held
We've had our wins and our share of losing
And now, as prices subside, we find it all so amusing
To think we did all that
And may we say, not in a shy way
Oh, no, oh, not us, we did it the Stock Card way
For what is an investor, what has he got?
If not patience, then he has naught
To stay with the facts, he truly receives and not the words
of one who panics
The records show we took the blows and did it the Stock Card way
Yes, it was the Stock Card way
And now, the final verse of the song by the Stock Card team:
And, now the end of the year is near
Our community grew to more than 80,000
We loved having you all, near and far,
and, more importantly, much more than this, the VIP users of our Stock Card tool.
And, through it all, we knew one thing for sure:
Time is your most valuable asset.
So, we did what we had to do
Save you all the time we could
in discovering and validating investments,
The records show, we released so many updates and did it all the Stock Card way
Yes, it was the Stock Card way!
2022: A Year of Investing Adventures
2022 has been a challenging year, undoubtedly! However, we are confident in a few years, we will look back at 2022 with fondness.
Challenging times bring learning opportunities and higher long-term returns if we manage our emotions and keep investing based on research.
We are proud of many of you who have been doing just that -- learning, researching, and investing!
To celebrate our users' investing adventures in 2022, we just published a mini-comic story.
We hope the comic brings a smile and inspires you in your investing adventure in the years to come. And, as the comic's story goes, we hope Stock Card has been or will become your tool in the journey to wealth and prosperity.
Once upon a time, it was easy to make money in the stock market ...
Fortune favors the intelligent! Happy Holidays!
– Hoda, Founder and CEO, StockCard.io
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We're taking a new approach in the startup world: an open investment campaign. Instead of relying entirely on traditional Silicon Valley investors, we're opening up the investment opportunity for anyone interested in owning a stake in our growing business with as little as $150.
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Republic, a leading private investment platform, is hosting our campaign. I'd like to invite you to check out our deal page, and I'd love to have you on board in any number of ways:
Thank you once again, and I look forward to telling you more about Stock Card and our vision for the future of individual investing.
Fortune favors the intelligent,
– Hoda, Founder and CEO, StockCard.io