Whitney Tilson email to investors discussing Fed Chair Jerome Powell on 60 Minutes; GameStink prediction and update; he hates the stock, not the company or management; why he likes Twitter; the best investments of all time; she gets paid just to humiliate her fans.
[soros]Q1 2021 hedge fund letters, conferences and more
Fed Chair Jerome Powell on 60 Minutes
1) 60 Minutes aired an insightful interview with U.S. Federal Reserve Chair Jerome Powell on Sunday – click here for the video and transcript.
I agree with his assessment that we’re on the verge of the mother of all booms. Excerpt:
A broad economic recovery is suddenly gathering speed, calling millions of Americans back to work. That’s the message tonight of Jerome Powell, the chair of the Federal Reserve. The “Fed,” as it’s known, regulates our economy by controlling the supply of money, setting interest rates and overseeing major banks. We sat down with Chairman Powell in his Washington headquarters this past Wednesday, one year after the COVID crash wiped out 22 million jobs.
Scott Pelley: Is the economy still in jeopardy?
Jerome Powell: I would say this. What we’re seeing now is really an economy that seems to be at an inflection point. And that’s because of widespread vaccination and strong fiscal support, strong monetary policy support. We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly. So the principal risk to our economy right now really is that the disease would spread again. It’s going to be smart if people can continue to socially distance and wear masks.
Scott Pelley: You seem to be saying, not about COVID, but about the economy, that we’re out of the woods.
Jerome Powell: Well, I’d say that we and a lot of private sector forecasters see strong growth and strong job creation starting right now. So really, the outlook has brightened substantially.
Scott Pelley: What are your projections for growth and employment?
Jerome Powell: If you look at what private sector forecasters are saying or what forecasters who sit around this table who are on the Federal Open Market Committee, our rate setting committee, what they’re forecasting is growth for this year in the range of 6% or 7%, which would be the highest level in, you know, 30 years. Or even maybe a little bit higher. And forecasting unemployment to move down substantially from 6%, where it is now, maybe to between 4% and 5%.
Scott Pelley: It seems like you’re not expecting a recovery, you’re expecting a boom.
Jerome Powell: Well, I would say that this growth that we’re expecting in the second half of this year is going to be very strong.
GameStink Prediction And Update
2) In my March 12 e-mail, I predicted:
Mark my words: from yesterday’s close of $260, [shares of GameStink (GME)] will be down by 30% within a week, 50% within a month, and 80% within six months.
Well, I was very right on the direction, but slightly off on the magnitude… After a week, the shares were “only” down 22%, and after a month, they were “only” down 46% – still a disaster for the speculators holding the shares. I stand by my six-month prediction.
To the company’s credit, it’s doing everything right as best I can tell. First, it’s taking advantage of its absurdly overvalued stock by issuing a lot of it: GameStop to Sell Stock After Reddit-Fueled Trading Frenzy… 3.5 million shares issued at today’s share price would raise more than $500 million – more than a company’s entire market cap as recently as seven months ago!
The company is also shaking up its board and management (GameStop to Name Chewy Co-Founder as Chairman) as it tries to become an e-commerce leader in the gaming and consumer-electronics categories. Here’s a good Twitter (TWTR) thread on it, which starts:
In summary, unlike many of the fraudulent companies I blast, I don’t hate this company or the people running it.
I just hate the stock because it’s been hyped up to many multiples of its intrinsic value, with the inevitable result that investors – undoubtedly disproportionately average folks who have no idea what they’re doing – are going to lose billions of dollars. This is what makes me sick…
Why I Like Twitter
3) The Twitter thread I linked to above reminds me of why we recommended buying TWTR shares in our flagship Empire Stock Investor newsletter on August 5 (click here to learn more and subscribe for only $49 for the first year). Since then, the stock is up 90% versus 24% for the S&P 500 Index.
While I prefer Facebook (FB) and Instagram for posting personal pictures and keeping in touch with friends and family, Twitter is invaluable for breaking news and analysis – both in the investing arena and beyond. That’s why one of the main things I ask my analyst Kevin DeCamp to do for me is regularly scan Twitter for news about stocks and industries in which I’m interested.
The Best Investments Of All Time
4) Here’s another Twitter thread that I really enjoyed on the best investments of all time, which begins:
She Gets Paid Just To Humiliate Her Fans
5) After more than two decades in the investing business, I thought I’d seen every possible way people could squander their money. But I was wrong…
Every aspect of this New York Times article blew my mind and left me speechless: She Gets Paid Just to Humiliate Her Fans. Excerpt:
Welcome to the lucrative world of financial domination, a form of B.D.S.M. that has flourished during the pandemic, when many sex workers and their customers have migrated online because of social distancing precautions. The concept is simple, even if the allure is not immediately self-evident: “finsubs” (short for “financial submissives”) send monetary “tributes” to a financial dominatrix, who could be any gender, in exchange for being humiliated and degraded.
“It’s controlling someone through their wallet,” said Mistress Marley. (The Times agreed to identify her only by her professional name to prevent stalkers from finding her.) “I love waking up every day realizing that submissive men pay all my bills and I don’t spend a dime.”
Trysts take place mostly online, though there can be in-person encounters. And the humiliation could be as fleeting as a few moments, or persist for hours during so-called draining sessions, when the dominatrix hurls a barrage of insults and demands that ends only when a monetary cap is reached or a finsub’s bank account hits zero – whichever comes first.
In its purest form, financial domination is not transactional. Sending money is the kink, and finsubs offer tributes without expecting anything in return. “The arousal is in the act,” said Phillip Hammack, a professor of psychology at the University of California, Santa Cruz and the director of its Sexual and Gender Diversity Laboratory. “It’s about that loss of control.”
You just can’t make this stuff up! This is not an April’s Fool’s Day joke on The Onion!
Best regards,
Whitney
