Whitney Tilson’s email to investors discussing gun sales likely to remain high; China‘s President Xi Jinping personally halted Jack Ma’s Ant Group IPO.
Q3 2020 hedge fund letters, conferences and more
Gun Sales Likely To Remain High
1) Though we thankfully haven't seen any meaningful election-related unrest, as many feared we might, one sector likely to benefit from the Joe Biden win that Enrique, Berna, and I predicted in our September 23 webinar is gun makers like Smith & Wesson Brands (SWBI).
At first glance, it may appear counterintuitive – gun sales are inversely correlated to the perceived gun-friendliness of the administration in power. When the White House is occupied by a Democrat, gun owners scramble to buy more of them because they fear Democrats will try to restrict sales – or take them away entirely.
SWBI is up 272% since we recommended it to readers of our Empire Investment Report just over a year ago, and we continue to think the stock has more upside ahead – especially in light of the election results. (If you aren't already a subscriber, you can find out how to gain access to the rest of the stocks in our "Biden Investment Blueprint" portfolio right here.)
Here's a recent CNBC video report on the sector: Gun sales skyrocket ahead of the U.S. presidential election as fears of unrest grow.
Xi Jinping personally scuttled Jack Ma's Ant IPO
2) When news broke 10 days ago that the Shanghai Stock Exchange had postponed the blockbuster initial public offering of Chinese payments giant Ant Group, I speculated that regulators might have uncovered fraud.
It was a reasonable guess in light of the widespread fraud that pervades China's economy and stock markets (one of the main reasons I've never invested there), but it looks like I was wrong.
This front-page story in today's Wall Street Journal, China's President Xi Jinping Personally Scuttled Jack Ma's Ant IPO, reveals that it was more of a political power play. It's an outstanding piece of journalism and well worth reading if you want to better understand how things really work at the highest levels in China. Excerpt:
Chinese President Xi Jinping personally made the decision to halt the initial public offering of Ant Group, which would have been the world's biggest, after controlling shareholder Jack Ma infuriated government leaders, according to Chinese officials with knowledge of the matter.
The rebuke was the culmination of years of tense relations between China's most celebrated entrepreneur and a government uneasy about his influence and the rapid growth of the digital-payments behemoth he controlled.
Mr. Xi, for his part, has displayed a diminishing tolerance for big private businesses that have amassed capital and influence – and are perceived to have challenged both his rule and the stability craved by factions in the country's newly assertive Communist Party.
