'Big Short' Steve Eisman likes two FANG stocks

Steve Eisman (of "big short" fame) was on CNBC talking about the auto market, bank system leverage, student loans, housing, and rents in New York and San Francisco.

He is long Facebook (FB) and Amazon (AMZN) and short Simon Property (SPG). He continues to like bank stocks.

Big Short' Steve Eisman likes two FANG stocks

 

Not a recommendation to buy or sell securities. Not a recommendation or solicitation for any fund or partnership. Please read our Disclaimer!

Notes from SALT: Hedge funds seek redemption in Sin City

Head over to LinkedIn where Lawrence Delevigne shares his thoughts on this year's SALT hedge fund conference. 

"But SALT also showed signs of change. Energy levels felt a notch lower, perhaps a reflection of a more subdued hedge fund industry that has struggled in the bull market. The side rooms reserved for private pitch meetings seemed thinner."

"If there was a theme, it seemed to be a quest for redemption."

Notes from SALT: Hedge funds seek redemption in Sin City

 

 

Used Vehicle Values - The Perfect Storm

Check out this long and detailed blog post on used car values by automotive industry observer Daniel Ruiz.

The auto industry is grappling with falling used car prices, oversupply on the dealer lots and a glut of leases coming due. 

Below are a few excerpts of his detailed analysis. I highly recommend you follow Daniel on Twitter and on his blog, if you invest in the automotive space.

Used Vehicle Values - The Perfect Storm

Jim Chanos at SALT: Short Mallinckrodt (MNK) and Express Scripts (ESRX)

Watch Jim Chanos of Kynikos explain his short positions on healthcare companies Mallinckrodt (MNK) and Express Scripts (ESRX). Chanos talks about the escalation of drug pricing and the relationship between drug companies and PBMs.

Jim Chanos at SALT: Short Mallinckrodt (MNK) and Express Scripts (ESRX)

 

Chanos also talks about the automotive sector, retail (Sears, SHLD) and Tesla (TSLA).

 

Germany's Lidl to price groceries up to 50 percent below U.S. rivals

America's grocers are getting a new competitor. After Aldi, another German discount grocery chain is entering the United States. Lidl will open its first twenty stores this summer and is looking to start a price war.

Germany's Lidl to price groceries up to 50 percent below U.S. rivals

"Lidl, which runs 10,000 stores in 27 countries, and German rival Aldi have already upended Britain's grocery retail market, hurting incumbents"

"[the company]  said its products would be up to 50 percent cheaper than competitors"

"Analysts estimate the company will have more than 330 U.S. stores by 2020"

"The stores will be 20,000 square feet in size and have only six aisles. The retailer's in-house brands will account for 90 percent of the products"

Ray Dalio: The Big Picture

Ray Dalio (of Bridgewater) shared his outlook on the markets and the economy on LinkedIn. The piece has some great long-term charts. He believes the short-term outlook is benign, while there there are significant risks lurking long-term.

Ray Dalio: The Big Picture

His key points:

  • The economy is now at or near its best, and we see no major economic risks on the horizon for the next year or two,
  • There are significant long-term problems (e.g., high debt and non-debt obligations, limited abilities by central banks to stimulate, etc.) that are likely to create a squeeze,
  • Social and political conflicts are near their worst for the last number of decades, and
  • Conflicts get worse when economies worsen.

Paul Singer’s Flagship Fund Raises $5 Billion in 24 Hours

It reached its goal of $5 billion in commitments the next day and is now turning away requests from investors to allocate more money

“Markets may be in a situation somewhat akin to a coiled spring,” the firm wrote. “We don’t know exactly what factor, event or combination of actions could release the possible pent-up revaluation of markets, but we think that there has never been a larger (and more undeserved) spirit of financial market complacency in our experience.”

Elliott currently runs $32.8 billion, not including the $5 billion in new commitments.

Paul Singer’s Flagship Fund Raises $5 Billion in 24 Hours

 

 

Einhorn Says Tesla Investors ‘Hypnotized’ in Dot-Com-Like Bubble

Greenlight's David Einhorn has long been critical of the "new tech bubble".

“We are skeptical that the company will be able to mass market its Model 3 at volumes and margins that justify the current valuation.”
“The enthusiasm for Tesla and other bubble-basket stocks is reminiscent of the March 2000 dot-com bubble.”

Einhorn Says Tesla Investors ‘Hypnotized’ in Dot-Com-Like Bubble

Hotels Plan Lobbying Push Over Priceline-Expedia ‘Monopoly’

Hotels Plan Lobbying Push Over Priceline-Expedia ‘Monopoly’

“The Expedia and Priceline duopoly hurts consumer choice and the small businesses in our industry, which represent some 60 percent of all hotels in the U.S., who are struggling to compete as a result of the gouging commission rates” charged by the online travel agencies, she said.

Apple's China Problem

Check out the latest stratechery post on Apple (AAPL)

Apple's China problem

Some striking quotes on how China may be different:
"The fundamental issue is this: unlike the rest of the world, in China the most important layer of the smartphone stack is not the phone’s operating system. Rather, it is WeChat"

"For all intents and purposes WeChat is your phone, and to a far greater extent in China than anywhere else, your phone is everything"

"That, by extension, means that for the day-to-day lives of Chinese there is no penalty to switching away from an iPhone."

Not a recommendation to buy or sell securities. Not a recommendation or solicitation for any fund or partnership. Please read our Disclaimer!

 

Low Volatility and the Risks of Crowded Trades

Dean Curnutt writes at Bloomberg:

"Over the most recent six-month period, the realized volatility of the S&P 500 has been lower than at any time since before the financial crisis." (see chart)

Low Volatility and the Risks of Crowded Trades

He has an excellent quote by Victor Haghani of former hedge fund Long-Term Capital Management:

"The hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing."

Brookfield's Bruce Flatt: Billionaire Toll Collector Of The 21st Century

 

Forbes profile of Brookfield Asset Management's Bruce Flatt.

Brookfield's Bruce Flatt: Billionaire Toll Collector Of The 21st Century

"All told, Brookfield has 2,000 projects across 30 countries on five continents, encompassing $250 billion in assets and 70,000 employees. President Trump talks about an infrastructure plan--Bruce Flatt is actually executing one."

"Flatt has been called Canada's Warren Buffett not only because he's a contrarian, long-term investor but also because his investment strategy relies less on price than on patience and the power of compounding income streams. "We will pay more for quality because in the fullness of time, real assets will generally always go up in value," Flatt says. "We'd rather earn a 12% to 15% net return over 20 years than a 25% return over three.""

Amazon Strategy Teardown: Building New Business Pillars

CB Insights came out with a long post on the recent strategic moves by the tech and e-commerce giant.

The post covers M&A, strategic venture investments, patents, and the new initiatives in AI and other fields.

Amazon Strategy Teardown: Building New Business Pillars

To quote Jeff Bezos:

“We’re in the middle of an obvious [trend] right now: machine learning and artificial intelligence. Over the past decades computers have broadly automated tasks that programmers could describe with clear rules and algorithms. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder. At Amazon, we’ve been engaged in the practical application of machine learning for many years now.