Whitney Tilson’s email to investors discussing inflation surged the most since 2008; July issue of Empire Investment Report; 15th anniversary of Tesla’s Roadster; how did the Sacklers pull this off?; Wally Funk is defying gravity and 60 years of exclusion from space.
Q2 2021 hedge fund letters, conferences and more
Inflation Surged The Most Since 2008
1) Inflation surged 5.4% year over year in June, the biggest jump since 2008.
At first glance, this appears to bolster the case that we have an inflation problem. But upon closer examination, the major drivers are likely temporary, as this Bloomberg article notes: U.S. Consumer Prices Jump Most Since 2008, Topping All Estimates. Excerpt:
Used vehicles accounted for more than a third of the gain in the CPI [Consumer Price Index], the agency said. The outsize increase was also driven in large part by the pricing rebound in categories associated with a broader reopening of the economy including hotel stays, car rentals, apparel, and airfares.
Expectations that those increases will normalize help explain the Fed's view that inflation is transitory.
"Inflation surprised substantially to the upside in June but, once again, owing to outsized increases in prices in a few categories," said Michelle Meyer, head of U.S. economics at Bank of America (BAC). "This reinforces the idea of transitory inflation."
Taking a closer look at used-car pricing, you don't see charts like this very often:
July Issue Of Empire Investment Report
2) Later today, after market close, we'll be publishing the July issue of Empire Investment Report.
In it, we explain a "picks and shovels" investment that takes advantage of a massively successful industry: self-storage. The COVID-19 pandemic has only accelerated the booming trend of self-storage construction... And we think we've found the best way to take advantage of this explosion in capital spending.
If you aren't already a subscriber, click here to find out how to get access to this issue once it's published later today.
The 15th Anniversary Of Tesla's Roadster
3) Monday was the 15th anniversary of Tesla (NASDAQ:TSLA) unveiling its Roadster sports car. Here's a 42-second video from that day back in 2006.
Both the company and the stock have been on a crazy ride since then... but at the end of the day, you gotta tip your hat to founder and CEO Elon Musk.
How Did The Sacklers Pull This Off?
4) The Sacklers and their company Purdue Pharma bear much of the responsibility for creating the opioid crisis that has killed hundreds of thousands of Americans.
They pocketed billions in the process, yet are walking away basically scot-free. How infuriating and sickening that, once again – to quote King Lear – "plate sin with gold, and the strong lance of justice hurtless breaks."
I think the Sacklers should be bankrupted by having to repay every penny of the blood money they took out of Purdue Pharma, which they've mostly tried to hide offshore, and that every family member and other senior executives during the decades that the company was creating the opioid crisis should go to prison for a long, long time... How Did the Sacklers Pull This Off? Excerpt:
As the death toll associated with OxyContin grew, Purdue continued to argue in its marketing campaign that the drug was rarely addictive. When journalists raised tough questions, the company sent its lawyers to intervene with their editors.
This "can I see your manager" approach works even with law enforcement. In 2006, federal prosecutors in Virginia were preparing to charge Purdue with felonies. They focused on three senior lieutenants who worked for the company, expecting them to flip on the Sacklers – the ultimate target, according to the lead prosecutor – when faced with potential prison time. But Purdue had enlisted two former U.S. attorneys, Rudy Giuliani and Mary Jo White. Ms. White telephoned Paul McNulty, who was then the deputy attorney general. "It's Mary Jo White," Mr. McNulty recalled recently. "It's somebody who thought of herself as having access."
Wally Funk Is Defying Gravity
5) I have mixed feelings about the billionaire space race between Virgin Galactic's (NYSE:SPCE) Sir Richard Branson, SpaceX's Elon Musk, and Amazon's (AMZN) Jeff Bezos. I applaud their entrepreneurial spirit and I'm open to the idea that humanity will someday benefit from this, but aren't there better uses for billions of dollars here on Earth?
But I don't have any mixed feelings about Wally Funk – I love her! She's the pioneering aviator who, at age 82, achieved her lifelong goal of going into space when she flew with Jeff Bezos yesterday morning – and, in the process, became the oldest person ever to go into space. A credit to Bezos – not to mention it's very clever of him – to invite her...
Here's a short video Bezos posted about her, and here's a New York Times profile: Wally Funk Is Defying Gravity and 60 Years of Exclusion From Space. Excerpt:
Ms. Funk is one of the few people who has directly participated in both eras of human spaceflight so far – the one that started as an urgent race between rival nations, and the one that we are now transitioning into, in which private companies and the billionaires who finance them are in fierce competition for customers, comeuppance and contracts. That she was ultimately excluded from the first phase because she is a woman, and will now be included in the next one, also highlights difficult questions of whom space is for...
"Seeing her finally get to go into space decades after proving that she was not only capable, but perhaps more capable than the men she was essentially up against during the Mercury program is so incredible," said Tanya Harrison, a planetary scientist and director of science strategy at Planet Labs.
"Her enthusiasm and attitude are positively infectious," Dr. Harrison added, "and so I hope her flight into space gives her a renewed platform to inspire a whole new generation of girls to pursue space or aviation."
Best regards,
Whitney
