How Bill Hwang Blew Up His Archegos Fund

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How Bill Hwang Blew Up His Archegos Fund
<a href="https://pixabay.com/users/mohamed_hassan/">mohamed_hassan</a> / Pixabay

Whitney Tilson’s email to investors discussing how Bill Hwang blew up his Archegos hedge fund; ARK Invest’s new space ETF; newsletter from the Nasdaq peak;how to file for a recovery rebate credit.

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Q4 2020 hedge fund letters, conferences and more

How Hwang Blew Up His Archegos Fund

1) My colleague Enrique Abeyta and his analyst Gabe Marshank continue to educate, entertain, and enrich with their new Hard Money's Million Dollar Podcast.

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Black DiamondCarlson Capital's Black Diamond Arbitrage Partners fund added 1.3% net fees in the first quarter of 2021, according to a copy of the firm's March 2021 investor update, which ValueWalk has been able to review. Q1 2021 hedge fund letters, conferences and more At the end of the quarter, merger arbitrage investments represented 89% of Read More


In their latest episode, $16,432, they do a great job of explaining how Bill Hwang blew up his Archegos Capital Management fund, which sent shockwaves through Wall Street.

ARK Invest's New Space ETF

2) Here's yet another sign of speculation and foolishness in the markets...

Cathie Wood's ARK Invest launched a space-focused exchange-traded fund ("ETF") earlier this week – the ARK Space Exploration & Innovation Fund (ARKX). The problem is that there are almost no pure-play public space companies, so Wood has filled it with stocks that have nothing to do with space, as this Barron's article notes: Why Cathie Wood's Space ETF Has Some Unexpected Holdings. Excerpt:

Investors found some surprises in the fund's portfolio: Some popular firms in space-exploration related fields were not included, while other seemingly unrelated names – including half a dozen internet tech giants – make up a significant weight.

That is because ARK's space fund isn't limited to companies directly involved in the space business, but also other innovations that have indirectly enabled the space boom. The ETF owns Google parent Alphabet (GOOGL), for example, because it's a leader in artificial intelligence. Nvidia (NVDA), another holding, manufactures computer chips that allow rockets to operate efficiently...

The fund also holds companies that are well-positioned to benefit from the development in aerospace-related tech. E-commerce giants like Amazon (AMZN) and Alibaba (BABA) are included because they can save delivery costs and generate revenue from drones if that market matures and scales. Netflix (NFLX), another holding, could potentially unlock millions of new users as satellite broadband connects more people to the internet.

I agree with my colleague Berna Barshay: "What a joke! I wonder how many days it will take Amazon and JD.com (JD) to deliver to the moon colony?"

Newsletter From The Nasdaq Peak

3) Speaking of bubbles... A hat tip to Doug Kass for flagging this newsletter, Walter Deemer's Market Strategies and Insights, which was published on March 3, 2000 – exactly one week before the Nasdaq Composite Index peaked. There are so many similarities to today... Excerpt:

How To File For A Recovery Rebate Credit

4) Here's a Forbes article on how to file for a recovery rebate credit: Did Your Income Drop In 2020? Here's How You Can Still Get Stimulus Checks. Excerpt:

For those whose incomes dropped significantly, the lack of a check is frustrating. So, what are their best next steps to obtain their stimulus checks?

Congress knew this would be an issue when they structured the CARES Act. The stimulus checks were really a rebate against the 2020 income tax return. As a result, they have built in safeguards to protect those whose 2020 income would allow them to qualify versus their 2018 and 2019 incomes.

"Taxpayers who believe they're entitled to a larger stimulus payment can file a Recovery Rebate Credit on their 2020 Form 1040 or Form 1040-SR to claim up to the maximum amount of the credit," explains [Colin] Horsford.

Best regards,

Whitney

P.S. Empire Financial Research and the market are closed tomorrow for Good Friday. Look for my next e-mail on Monday, April 5, after the Weekly Recap. Enjoy the holiday!

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Jacob Wolinsky is the founder of ValueWalk.com, 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)valuewalk.com - 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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