Whitney Tilson in his email to investors discusses, hot-stock rally tests the patience of a choosy lot: value investors; Anson Investments: bucking the crowd; robots are coming, this time to rural WI; Martin Shkreli; poker; Bill Miller; Chickenshit Club; Cyprus conference; Bezos.

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1) More evidence re. the tough time value investors are having right now, all over the world. Hot-Stock Rally Tests the Patience of a Choosy Lot: Value Investors. Excerpt:

Value investing is mired in one of its worst stretches on record, prompting concerns that the investment style favored by generations of fund managers is losing its effectiveness.

…Stocks that look cheap relative to traditional fundamental metrics such as profit or cash flow have fallen so far out of favor that Goldman Sachs in June questioned whether the markets are witnessing the death of value investing. With value investments in Europe and Asia also struggling, value funds globally are on track to post their worst performance this year relative to growth funds since before the financial crisis.

…Investors have pulled $116 billion from U.S. large-cap value funds over the past 10 years, according to Morningstar, with more than one-fourth of that outflow occurring over the past 12 months.

…Value fund managers have felt the pinch. The median value fund around the world lagged behind the median growth fund by 7 percentage points in the first half of the year, on pace for the worst underperformance since 2007, according to eVestment. The data and analytics firm measured actively managed value and growth funds in the U.S., Europe and Asia—which collectively have $8.8 trillion in assets under management—and found that so far this year value funds have lagged behind growth in all three regions for the first time since 2010.

2) Short sellers are also getting hammered, so it’s nice to see one guy bucking the trend: Anson Investments: Bucking the Crowd. Excerpt:

Moez Kassam got his start shorting stocks back in 1999, while studying for a degree in political science at the University of Western Ontario. He borrowed the Canadian equivalent of about $6,700 from a Russian classmate who had spirited his family’s savings out of his volatile homeland. Kassam’s timing was excellent: He sold short stocks like Pets.com and Mamma.com just prior to 2000’s dot-com crash. His winnings covered his tuition and repaid the 4% loan from his friend.

3) A very interesting story: The robots are coming, this time to rural Wisconsin. Excerpt:

In factory after American factory, the surrender of the industrial age to the age of automation continues at a record pace. The transformation is decades along, its primary reasons well-established: a search for cost-cutting and efficiency.

But as one factory in Wisconsin is showing, the forces driving automation can evolve — for reasons having to do with the condition of the American workforce. The robots were coming in not to replace humans, and not just as a way to modernize, but also because reliable humans had become so hard to find. It was part of a labor shortage spreading across America, one that economists said is stemming from so many things at once. A low unemployment rate. The retirement of baby boomers. A younger generation that doesn’t want factory jobs. And, more and more, a workforce in declining health: because of alcohol, because of despair and depression, because of a spike in the use of opioids and other drugs.

In earlier decades, companies would have responded to such a shortage by either giving up on expansion hopes or boosting wages until they filled their positions. But now, they had another option. Robots had become more affordable. No longer did machines require six-figure investments; they could be purchased for $30,000, or even leased at an hourly rate. As a result, a new generation of robots was winding up on the floors of small- and medium-size companies that had previously depended only on the workers who lived just beyond their doors. Companies now could pick between two versions of the American worker — humans and robots. And at Tenere Inc., where 132 jobs were unfilled on the week the robots arrived, the balance was beginning to shift.

4) What a scam! Wall Street Profits by Putting Investors in the Slow Lane. Excerpt:

Wall Street has developed a new way, clouded in obscurity, to fleece the hundreds of millions of Americans who have money invested in company pension plans, mutual funds and insurance policies.

Institutional brokers are legally obliged to execute trades on the exchange that offers the most favorable terms for their clients, including the best price and likelihood of executing the trade. The 12 exchanges, most of which are owned by New York Stock Exchange, Nasdaq and Better Alternative Trade System (BATS), along with the Chicago Stock Exchange and the Investors Exchange (IEX), are supposed to compete to offer the best opportunities.

But that’s not what is happening. Instead, brokers routinely take kickbacks, euphemistically referred to as “rebates,” for routing orders to a particular exchange. As a result, the brokers produce worse outcomes for their institutional investor clients — and therefore, for individual pension beneficiaries, mutual fund investors and insurance policy holders — and ill-gotten gains for the brokers.

Although the harm suffered on each trade is minuscule — fractions of a cent per share — the aggregate kickbacks amount to billions of dollars a year. The diffuse harm to individuals and the concentrated benefit to Wall Street create yet another way in which the system is rigged, justifiably eroding public confidence in the fairness of the financial system.

5) This is a crazy story! Can you imagine the poor guys with the same name as the most hated man in America??? In 'Pharma bro' Martin Shkreli's courtroom, another defendant named Martin Shkreli makes an appearance. Excerpt:

A man with the same name as the notorious "Pharma bro" Shkreli was arraigned in the same courthouse, in the same courtroom, with the exact same judge on different criminal charges as those facing Shkreli on Friday.

And here’s where the story gets even crazier: five years ago, I co-hosted a charity poker tournament at which Martin Shkreli (the notorious one) bought a $10,000 table and, by all accounts, had a great evening with nine of his friends.

But when our Executive Director tried to collect from him, he didn’t reply to her numerous calls, emails and letters over many months, so she asked me to try.

I looked up “Martin Shkreli” on Bloomberg and called the number I found. When the guy answered, I told him who I was and that he’d better pay us the $10,000 or else I was going to go public with a story headlined “Forbes 30 Under 30 Winner Stiffs Charity”.

He said: “I don’t know what you’re talking about. You must

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