✨ 13 May 2022 | Value Investing Substack NEWS
CFA Accounting Red Flags free webinar, Interview with Markel's CEO, Inflation Getting Sticky, Carvana Lays Off 2,500, Jack Ma Reappears, North Korea's 1st COVID cases, Raoul Pal blocks Hedgeye's Keith
HIGHLIGHTS
SUBSTACKS + LONG-READS + TWITTER
1) Super bullish on megacap tech here - great inflation hedges, broadly growing revenue/gross profit over 10% with high ROICs, generally trading at all-time low EV/FCF and P/E multiples and almost all aggressively buying back stock.
All-time is a long time. This isn’t 08. Or 00.
@KeithMcCullough Here’s @RaoulGMI’s portfolio for Pro Macro subscribers. Quit dunking it’s bad Karma old man
LINKS
Finance:
BlackRock's Star Trader Goes Short as Hedge Fund Loss Mounts | Bloomberg
Tiger Global, hit by $17B in hedge fund losses, has nearly depleted its latest VC fund
SoftBank Faces Record Loss as Masayoshi Son's Bets Tumble Again
SoftBank reports record $27.5 billion loss on crashing tech stocks
SoftBank's mega tech funds lost more than $27 billion in the last fiscal year, by far their worst performance on record.
The world's biggest tech investor said Thursday that its Vision Funds had recorded a loss of 3.5 trillion yen ($27.5 billion) in the year ended March. That was a significant reversal from the unit's performance from last year, when it had logged a healthy profit.
At an earnings presentation in Tokyo, CEO Masayoshi Son acknowledged the losses and pledged to start taking a more conservative approach.
"We, SoftBank, should be taking defense," he said.
Going forward, the Japanese conglomerate will be more selective about which deals to take on, roll out stricter criteria for new investments, and focus on improving returns from its portfolio companies, he added.
Macro
ASEAN:
Eurozone:
Finland must apply to join NATO ‘without delay’: Finnish leaders
Sweden’s ruling party to decide on NATO membership on May 15
USA:
Meanwhile, the unemployment rate in April stood at 3.6%, near a half-century low.
“The history is that every time we’ve had inflation above 4% and unemployment below 4%, we’ve had a recession in the next two years,” said Mr. Summers. “It’s definitely odds off that we will have a soft landing.”
Several times on Thursday, Mr. Powell said he was realistic about the challenges of raising rates to cool demand and bring down inflation without higher unemployment. “It will be challenging. It won’t be easy. No one here thinks that it will be easy,” he said.
One concern is that the surge in prices becomes intense enough or lasts long enough to change consumers’ and businesses’ inflation psychology, making those expectations self-fulfilling. If workers anticipate a robust inflation rate in a year’s time, they could seek higher wages now.
“The one thing we really cannot do is fail to restore price stability,” Mr. Powell said Thursday. “The economy doesn’t work for anyone unless you do that.”
News & Other:
Worldwide, menstrual leave is currently offered only in a small number of countries including Japan, Taiwan, Indonesia, South Korea and Zambia.
"It is important to clarify what a painful period is, we are not talking about a slight discomfort, but about serious symptoms such as diarrhoea, severe headaches, fever," she added.
MEDIA
Stock Markets & Business
My summary:
- We're not seeing the same buy/sell volume as beginning of the year; so when selling pressure comes in, it has an outsized impact on crypto prices. But that doesn't automatically mean a lot of absolute selling volume.
- He doesn't think he can time bottoms, but he's looking to ride cycles.
- He thinks the macro picture is ugly and there might still be 6 months of downside remaining; but he's also buying the dip now as he's aware he doesn't have a crystal ball.
- USDC is unlikely to depeg the way Terra did; but if the "blue-chip" cryptos like Bitcoin and Ethereum continue to slide, it might spell more pain for smaller coins.