Value Investing

Whitney Tilson “I buy investments that are so hated, you would be embarrassed to say you own them at a cocktail party”

Whitney Tilson’s email to investors discussing his report on Amazon (plus BRK, FB, and GOOGL); his report and interview on Tesla; The “cocktail-party indicator”; Family of Elizabeth Holmes’ fiance worries she has “brainwashed” him.

1) I just posted a report on why I like Amazon (AMZN). To access it, simply sign up here for the webinar for my new newsletter, the Empire Investment Report, which is coming up on Wednesday, April 17, at 8 p.m. Eastern. It only takes a moment to register and then you will get instant access to the website with the report (just click “FREE RESOURCES” at the top of the page).

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In addition, when you register you will also get access to three videos on Berkshire Hathaway, my report on why I think Facebook (FB) shares are a good bet to double, and Glenn Tongue's special report on why Tesla (TSLA) stock is likely to collapse. And if you enter your cellphone number to receive a text reminder before the webinar, you'll also get our report on Alphabet (GOOGL).

Again, click here to immediately access all of this for free. After the webinar, it will only be available to paid subscribers.

2) Speaking of Tesla, my report on it – which echoes the same sentiment as Glenn's – is included as part of an e-mail Porter Stansberry sent to his Stansberry Digest readers recently (along with some kind words about me – thank you!), which you can read here. Excerpt:

Ever since I got burned shorting the stock in 2013 – watching it march higher from $35 to $205 a share – I've warned my readers about betting against CEO Elon Musk and his team. They've simply pulled too many rabbits out of their hat over the years.

Though Musk often behaves like a narcissistic brat, he's also an incredible entrepreneur with a remarkable track record. He has almost single-handedly pushed every major car manufacturer in the world to invest heavily in electric vehicles, and we'll all be better off for it. (The same can be said for SpaceX and the aerospace industry.)

But Tesla has almost done too good of a job. Now, it faces a massive wave of competition. Electric cars from high-end European manufacturers Audi and Jaguar are already vastly outselling Tesla's Model S and Model X cars in Europe. Meanwhile... Toyota, Kia, Hyundai, Volkswagen, Nissan, and Renault are developing their own lower-priced electric vehicles.

As a result of this new competition, I told readers of my free daily e-letter last month that Musk has no more rabbits to pull out of his hat.

I believe Tesla's stock – which closed yesterday around $268 a share – will be trading below $100 by the end of 2019.

3) I did a two-minute interview outside the courthouse last week after the hearing for the SEC's contempt case against Musk, which you can watch here: Musk 'Smart' to Be on Best Behavior, Investor Whitney Tilson Says.

 

4) Leading up to the launch of the Empire Investment Report next week, I've been preparing something called the "Empire Investment Primer," which all subscribers will receive. In it, I share the most important investing lessons I've learned over the last two decades. My friends at Stansberry Research have been including excerpts in e-mails to their subscribers, which I'll be sharing over the next week. Here's one that was part of Dr. Steve Sjuggerud's DailyWealth newsletter: The 'Cocktail-Party Indicator' Can Save (or Make) You a Fortune. Excerpt:

Whether it's your trainer at the gym, a neighbor who has never shown any interest in the markets, or the proverbial shoeshine guy... When you hear these folks talking about how much money they've made in bitcoin, 3D printing companies, or the latest hot IPO... run, don't walk, the other way.

I've found, again and again, that when the least knowledgeable investors among all of the people I know are piling into whatever is hot, it's usually very near the top of a bubble.

Today, I'll give you another example of how you can use the sentiment of average investors to your benefit – instead of riding the bandwagon to disaster...

While the rest of the investment crowd is busy looking for the next way to get rich quick, I strongly suggest taking a different route.

I buy investments that are so hated, you would be embarrassed to say you own them at a cocktail party. 

5) For those of you who (like me) can't get enough of the story about Theranos and its sociopathic founder, Elizabeth Holmes, this New York Post story will be catnip for you! Family of Elizabeth Holmes' fiance worry she has 'brainwashed' him. Excerpt:

People close to Evans, who graduated from MIT in 2015, are trying to make sense of the relationship. Sources told the Post that Evans' image-conscious parents, William and Susan – who own three top hotels in Southern California, including The Lodge at Torrey Pines in La Jolla – are flabbergasted by their son's decision to marry Holmes.

(Evans, his family and Holmes did not respond to requests for comment.)

"His family is like, 'What the f–k are you doing?' It's like he's been brainwashed. [He says,] 'The media has it all wrong about her,'" said one San Francisco techie.

"He's had a lot people very close to him sit him down and have a talk," the colleague said, before cataloging the litany of warnings given to Evans.

"'This could be the biggest mistake you'll ever make.' 'The negativity around her could blow back on you.' 'You've never encountered anything like this.' 'You need to think hard about what you're doing.'"

Still, the couple is undeterred.

"It's kind of like Billy is her shiny new toy. She's super enthusiastic about being with him," the colleague said.

"The relationship is opportunistic for the both of them. Elizabeth needs a lot of support in her life right now, and Billy is looking for whatever way he can raise his profile."

Even if that way is through a pariah.

A relationship with Holmes "will destroy your social value," the colleague added. "But you will get something else in return" – namely, fame.

Before Holmes, the 6-foot-4 Evans was a playboy with a mission.

"I met two of his ex-girlfriends. They were both Instagram models, and he was super proud of that fact," the colleague said. "He would date young, absolutely drop-dead-gorgeous girls [with big followings]."

The colleague added that Evans religiously tracked his social-media followers and likes.