Whitney Tilson’s email to investors congratulating Gabriel Grego & Artem Fokin win SumZero contest; and discussing Bill Ackman; David Einhorn; The Michaels Companies; Fyre Festival & other scams; Munger meeting; CSIMA conference.
1) Congratulations to Gabriel Grego of Quintessential Capital Management (Aphria) and Artem Fokin of Caro-Kann Capital (Burford Capital), two of my students who won the SumZero Top Stocks for 2019 competition! Click here to read their reports and see the other winners. (Artem also won in 2017 for Commercehub and in 2018 for TripAdvisor.)
Mangrove Partners had its worst month for shorts ever
Nathaniel August's Mangrove Partners was down 0.5% in May and 6.8% in April, bringing its quarter-to-date return for the second quarter to -7.2% and its year-to-date return for the first five months of the year to -35%. At the end of May, the fund's gross exposure was 194%, while its net exposure was 7%. Q2 Read More
2) Kudos to Bill Ackman and David Einhorn, whose funds were up 18.3% and 13.4%, respectively in January. And that was only the 2nd best thing that happened to Bill in January, as he got married! Here’s the NY Times article about it: As If by Design, Their Connection Was Inevitable
3) The Michaels Companies (MIK) is down 22% since Keith Rosenbloom of Cruiser Capital pitched it at our shorting conference nine weeks ago. He’s just given me permission to share the video and slides of his outstanding presentation.
4) Over the weekend I watched the new Netflix documentary about the notorious Fyre Festival, Fyre: The Greatest Party That Never Happened. It was a wildly entertaining and fascinating 97 minutes. I can’t believe that the scumbag con man (I can’t remember the last time I used those words not referring to you-know-who – LOL!) behind the debacle, Billy McFarland, only got a six-year sentence. It reminds me of my favorite Shakespeare quote (from King Lear): “Plate sin with gold, And the strong lance of justice hurtless breaks.”
I nearly fell out of my chair during one part, which you’ll have to read about/watch for yourself, as I don’t want to offend anyone: You Haven’t Seen the Last of Fyre Festival’s Andy King (the two-minute video clip is here).
5) I try to study as many frauds/scams as I can, partly because they’re often rollicking good tales, but also in the hopes it might enable me to more quickly identify them in the future so I can: a) avoid getting sucked in; and b) find some short ideas. Along these lines, two of my favorite books like year were Bad Blood: Secrets and Lies in a Silicon Valley Startup (about Theranos; how is Elizabeth Holmes not in prison?! See answer above…) and Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World (about the 1MDB scandal that ensnared Goldman Sachs).
Also along these lines, don't miss the latest story on how Purdue Pharma and the Sackler family nearly single-handedly launched the opioid epidemic that's led to so much death and destruction across the country: Sackler Scion’s Email Reveals Push for High-Dose OxyContin, New Lawsuit Disclosures Claim. Two excellent books on this are Dopesick: Dealers, Doctors, and the Drug Company that Addicted America and Dreamland: The True Tale of America's Opiate Epidemic
6) I just booked my flights to the Daily Journal (Charlie Munger) meeting in LA on Thursday, Feb. 14 – I’m doing it as a day trip, avoiding the dreaded redeye, flying out of JFK at 5:30am and back out of LAX at 4:10pm (look for me in seat 1A both ways). For details and to sign up for the lunch I’m hosting, see my last email here.
7) The next day I’ll be attending the Columbia Student Investment Management Association conference in NYC on Friday, Feb. 15th. For more info and to register, click here. I hope to see you there!