Chris Brown’s Aristides Capital Letter: The social fabric that holds us together has taken a beating

Chris Brown’s Aristides Capital Letter: The social fabric that holds us together has taken a beating
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Whitney Tilson’s email to investors discussing Chris Brown’s Aristides Capital monthly letter; Coronavirus poll.

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Q1 2020 hedge fund letters, conferences and more

Chris Brown's Aristides Capital Monthly Letter

1) Chris Brown is one of the smartest investors I know.

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He started his Toledo, Ohio-based fund, Aristides Capital, with $500,000 in 2008 and has put up incredible numbers. Today, Aristides has grown to $135 million.

Chris' strategy mostly focuses on buying a lot of small caps and special situations, but he also shorts obvious frauds. In 2018, he spoke at both of my shorting conferences, pitching Energous (WATT) on May 3, which has crashed 88% since then, and Tilray (TLRY) on December 3, which has fallen 92%. (You can watch the videos of these presentations here and here.)

He writes entertaining and insightful monthly letters. I particularly enjoyed his latest one, which he's given me permission to share (it's only three pages – click here to read it). Excerpts:

The disconnect between the strength of U.S. equity indices versus the economic condition of the typical working-class American has been somewhat stunning of late. In the last 15 years, we've spent trillions of dollars on asinine foreign conquest, recapitalized the banking system after the bursting of a debt-fueled housing bubble, diluted the currency to pay for it, systematically promoted extreme wealth disparities with monetary and fiscal policy, and then, just in the last five months alone, we've suffered a very expensive contagion and diluted the currency again, while protests and riots have broken out in the streets of nearly every major city because of persistent racial injustice.

The stock market, meanwhile, is doing basically fine because it is priced in nominal terms. Three trillion dollars of assets have been recently purchased by the Federal Reserve, and all of the resulting cash has flowed everywhere, like water over a poorly maintained rust belt dam.

The social fabric that holds us together has taken a beating. The last four decades have brought increasing financialization and leverage along with increasing profits to those with easy access to capital and stagnant real incomes for everyone else. Our shared cultural institutions are now less shared. Politicians have become more extreme. Regulatory capture is ubiquitous. Honesty, moderation, integrity, and financial prudence are in a severe downcycle, while alternative facts, extremism, influencers, and privatized profit with socialized risk are quite popular.

Coronavirus Poll

2) A new ABC News/Ipsos poll shows that fewer Americans are concerned that they or someone they know will be infected with the coronavirus.

As such, more of us are willing to do a range of activities like going to work, out to eat, and even to a sporting event at a large stadium.

I suppose there are two ways to read this: good news, because we're returning to normal... or bad news, because we may be getting complacent, which could lead to rising infections.

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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