Whitney Tilson’s email to investors discussing his CNN interview, why Tesla is not out of the woods; Amazon an Ad Giant; Housing Boom Coming to an End; Dearth of Women in Hedge Funds; World’s Toughest Mudder.
1) I was back at the NYSE yesterday, this time doing two segments with CNN’s Julia Chatterley. In the first, we discussed why I like the FAANG stocks better than the defensive consumer and pharma names investors are rotating into and, in particular, why I think Facebook is a buy. To watch it, click here (4:36). In the second, I outlined why I don’t think Tesla is out of the woods and why they’ll have to do a substantial equity raise. Click here (2:40).
Q3 hedge fund letters, conference, scoops etc
2) This front page story in today’s WSJ captures one of the many reasons I’m bullish on Amazon’s stock: Amazon, With Little Fanfare, Emerges as an Advertising Giant. Excerpt:
Amazon.com Inc. handles nearly half of all online sales in the U.S., giving it a popular platform and a wealth of consumer data. Now it’s on track to become the next juggernaut of online advertising, and its rise threatens to upend Silicon Valley’s ad titans and change the way business is done on Madison Avenue.
The online retailer has ascended to the No. 3 spot in the U.S. digital ad market behind the dominant players, Alphabet Inc.’s Google and Facebook Inc. Though Amazon has just 4% of the market now, the company is expanding its avenues for marketers and hiring aggressively for its ad unit.
3) Another cover story in today’s WSJ that could have important implications for the economy and stock market: The U.S. Housing Boom Is Coming to an End, Starting in Dallas. Excerpt:
The U.S. economy just had one of its best six-month stretches in a decade, as the unemployment rate hovers around its lowest level in half a century. Still, along with a recent swoon in the stock market, the housing market—which makes up a sixth of the U.S. economy—has been a troubling weak spot.
U.S. existing home sales have declined on an annual basis for eight straight months, the longest slump in more than four years, according to the National Association of Realtors report Wednesday. The slowdown has been driven by places that had earlier seen some of the strongest price growth during this recovery, including Seattle, Denver, New York City, Boston and the Bay Area.
4) A good opinion piece in Barron’s about the dearth of women in the hedge fund business: Hedge Funds Have a Missed Opportunity That Could Be Hurting Results. Excerpt:
The hedge fund world is undergoing a period of profound change due to performance headwinds, pressure to lower fees, and increased competition from other alternative-asset classes. Savvy managers are going to great lengths to adapt. But most of the industry is overlooking one the biggest barriers to future success: our massive gender gap.
Less than 5% of the world’s 100 largest hedge funds are currently run by women, and women hold only 10% of portfolio-management and investment-team roles across the industry. This is evidence of a missed opportunity.
5) I wrote about this topic in 2014 in two columns I published on the NYT web site:
a) Evaluating the Dearth of Female Hedge Fund Managers. Excerpt:
A recent report by the consulting firm Rothstein Kass found that hedge funds managed by women performed better than a broad index of hedge funds.
This shouldn’t be surprising, as numerous studies have shown that women take less risk, do more diligent research, suffer less from overconfidence, trade less frequently and are quicker to admit mistakes — all of which lead to higher, and less volatile, returns.
b) A Deeper Conversation on Women in Hedge Funds. Excerpt:
A fundamental problem seems to be the way hiring is done. As several readers pointed out, the job posting and interview process is the first hurdle. One person wrote: “You must either be extremely well educated and well connected, or have gotten lucky to even land an analyst position. Most buy-side shops don’t even post jobs; you need to know someone.”
… The few women who break into the industry face meaningful barriers. Several wrote about the lack of mentorship and apprenticeship programs. “I’ve always envied my peers, all men of course, who have the ability to call their mentors for advice regarding their careers,” said one woman. “Sadly, I’ve never had a mentor in my entire career (shocking!) that I could call to seek advice or for support.”
6) I finished my full write-up of the World's Toughest Mudder, a 24-hour endurance race in which I won the 50+ age group two weeks ago: 47 pages, 87 photos and a description of every obstacle. It's posted at www.tilsonfunds.com/TilsonWTM18.pdf. Enjoy!
