The latest email from Whitney Tilson in which he cannot stop obsessing over Trump, says he is buying Goldman Sachs, and seems to be selling shaving razors with his own affiliate link -> http://onebladeshave.go2cloud.org/aff_c?offer_id=16&aff_id=1000&aff_sub=KASE – Email below.
) I’ve been reading dozens of articles about Brexit over the weekend and this morning. Below are the two best I’ve read, representing both sides of the argument. The first, favoring exit, from today’s WSJ, is written by Fraser Nelson, the editor of the Spectator and a columnist for the Daily Telegraph:
Here, the Brexit battle lines ought to be familiar: They are similar to the socioeconomic battles being fought throughout so many Western democracies. It is the jet-set graduates versus the working class, the metropolitans versus the bumpkins—and, above all, the winners of globalization against its losers. Politicians, ever obsessed about the future, can tend to regard those left unprotected in our increasingly interconnected age as artifacts of the past. In fact, the losers of globalization are, by definition, as new as globalization itself.
To see such worries as resurgent nationalism is to oversimplify. The nation-state is a social construct: Done properly, it is the glue that binds society together. In Europe, the losers of globalization are seeking the protection of their nation-states, not a remote and unresponsive European superstate. They see the economy developing in ways that aren’t to their advantage and look to their governments to lend a helping hand—or at least attempt to control immigration. No EU country can honestly claim to control European immigration, and there is no prospect of this changing: These are the facts that led to Brexit.
2) Here’s the opposite perspective by a columnist in The Guardian:
The real division in Britain is not between London and the north, Scotland and Wales or the old and young, but between Johnson, Gove and Farage and the voters they defrauded. What tale will serve them now? On Thursday, they won by promising cuts in immigration. On Friday, Johnson and the Eurosceptic ideologue Dan Hannan said that in all probability the number of foreigners coming here won’t fall. On Thursday, they promised the economy would boom. By Friday, the pound was at a 30-year low and Daily Mail readers holidaying abroad were learning not to believe what they read in the papers. On Thursday, they promised £350m extra a week for the NHS. On Friday, it turns out there are “no guarantees”.
If we could only find a halfway competent opposition, the very populist forces they have exploited and misled so grievously would turn on them. The fear in their eyes shows that they know it.
3) I could be persuaded otherwise, but I am currently in the “this is likely to prove to be a big mistake” camp (assuming the Brits actually go through with it, which I think is only 50/50). I hear all of the rational arguments – but I worry a lot about the many possible unintended/unexpected consequences – the unraveling of the EU, a rise in racism (http://www.independent.co.uk/news/uk/home-news/brexit-eu-referendum-racial-racism-abuse-hate-crime-reported-latest-leave-immigration-a7104191.html), etc.
4) I think John Oliver likely has it right in this hilarious song: https://www.youtube.com/watch?v=pQtd9X4UO8k&feature=share. It starts with a proper British kid singing, “F**k you, European Union…” and continues by mocking lots of European countries, but concludes by singing, “But we must admit without these countries we’d be really screwed…Even though we must admit we would all be batsh*t crazy if we vote for leaving it!”
5) The financial sector has been hit the hardest by the Brexit vote, so today I’m adding to the only financial stock I own (unless you count Berkshire), which is Goldman Sachs. At the current price of ~$139, it’s now trading at a 15% discount to tangible book, which his much too cheap I think. Below is an article from this weekend’s Barron’s, echoing this view:
Bargain hunters eyeing the Brexit selloff should consider picking up some vampire squid. That’s Goldman Sachs Group, famously likened in a 2009 Rolling Stone article to the deep-sea cephalopod “wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Lately, Goldman (ticker: GS) has been jamming its, um, funnel into things that smell like stable income to offset volatile trading, including asset management and lending. Yet shares have slumped. They fell 7% on Friday to $141.86 following the United Kingdom vote to leave the European Union, and are now down 34% in a year. While the broad market remains fairly close to all-time highs, Goldman recently traded at its May 2006 price, even though its book value per share has roughly tripled since then.
In fact, with Goldman now trading at a sizable discount to its book value, one investment the company can buy cheaply is its own shares, which it’s doing. Business is far from booming. Revenue from fixed income, commodity trading, and stock underwriting has been weak across Wall Street. But Goldman shares could nonetheless rise 30% over the next year from depressed levels.
6) Speaking of batsh*t crazy, let’s turn to my favorite topic… I want to acknowledge that it’s unfair for me, a Democrat, to criticize a Republican like Trump because that’s obviously partisan. So, in the interests of being fair and nonpartisan, I’ve compiled a list of statements that fellow Republicans about made about him:
- Marco Rubio: a “fraud,” “con man” and “lunatic”
- Ted Cruz: a “serial philanderer” and “pathological liar” for whom “morality doesn’t exist”
- Jeb Bush: “the guy needs therapy”
- Mitt Romney: Trump in the White House could “change the character of the generations of Americans that are following” and might result in “trickle-down racism,” “trickle-down misogyny” and “trickle-down bigotry.” “Just seeing this breaks your heart.” “If Donald Trump’s plans were ever implemented, the country would sink into a prolonged recession.”
- Lindsey Graham: a “race-baiting, xenophobic, religious bigot” and “a con artist”
- Bobby Jindal: a “madman who must be stopped”
- Rick Perry: a “barking carnival act”
- Susan Collins: “contentious and bizarre”
- Senator Mark Kirk of Illinois: “I think he’s too bigoted and racist for the Land of Lincoln.”
- Paul Ryan: “Claiming a person can’t do their job because of their race is sort of like the textbook definition of a racist comment.”
- George Will, conservative columnist and prominent Republican pundit for 40+ years, has left the Republican party due to disgust over Trump, saying: “This is not my party.” He added: “Only he knows what he is hiding by being the first presidential nominee in two generations not to release his tax returns. It is reasonable to assume that the returns would refute many of his assertions about his net worth, his charitableness and his supposed business wizardry. They might also reveal some awkwardly small tax payments.”
- Mark Salter, longtime chief of staff and confidant of John McCain: “He’s just unfit for the office.”
- Ed Rogers, Republican lobbyist and veteran of the Reagan and George H.W. Bush White Houses: “Hillary isn’t the frightening offensive character that Trump is.”
- Meg Whitman, CEO of Hewlett Packard Enterprise, compared Trump to Hitler and Mussolini and said: “Look at the comments he’s made about women, about Muslims, about reporters. It’s just repugnant.”
- Henry “Hank” Paulson, former Secretary of Treasury under Bush II: “Let’s