Hair of the Dog
- Shot: President Donald Trump donated his Q1 salary – $78,333 – to the National Park Service.
- Shot: Tesla announced record vehicle deliveries that sent its stock surging 7.2% Monday.
Chaser: "Stormy weather in Shortville..." Elon Musk said on Twitter after the report.
- Shot: CNN – The Senate is about to change forever on the filibuster rules.
Chaser: The Atlantic – How Democrats Paved the Way for the Confirmation of Trump's Cabinet.
Today’s Earnings Calendar and Stocks to Watch:
- Companies reporting earnings today that will interest institutional investors include Acuity Brands Inc. (AYI), Conns Inc. (CONN), International Speedway (ISCA).
- Tiger Global Management announced it had taken a 12.5 percent passive stake in private-equity giant Apollo Global Management (APO), according to a new SEC filing. That figure represents a sharp uptick from an earlier stake of 7%.
- David Einhorn’s Greenlight Capital has been in contact with General Motors (GM) about his proposal to establish two separate voting glass structures for the auto company’s stock. General Motors submitted a filing that broke down the schedule of its interactions with the hedge fund. In August 2016, Einhorn’s team first reached out and held some meetings. However, GM turned down the offer, arguing that it could impact credit ratings and affect shareholder value.
- Finally, Marissa Mayer, CEO of Yahoo Inc. (YHOO) will not stay with the company when it is purchased by telecom giant Verizon Communications (VZ). The deal came after a lengthy amount of pressure by Starboard Value on Yahoo to sell its assets or explore other strategic options. According to a report by Recode, Mayer is one of the several executives who are not likely to make the transition in the months ahead. Readers of Modern Trader will recall that Mayer is looking at a very handsome golden parachute, despite the underwhelming years at Yahoo, where she barely moved the needle on culture.
Quotes of the Day
“Mounting evidence shows that hedge funds are a bad bet. Don't just take our word for it. Ask billionaire super-investor Warren Buffett.”
USA Today’s editorial board took time out of its busy schedule of leaving newspapers on hotel doorsteps to crap all over the hedge fund industry.
And how did they do it? By telling the same tired story about Warren Buffett’s passive investment gamble on the Vanguard 500 index fund against Ted Seides over a decade.
Then, a very direct attack on fees. USA Today says that the “2 and 20 model” can’t be justified across the entire industry.
USA Today did allow Richard Baker of the Managed Funds Association to respond in an opposing view, where he argued that hedge funds provide value by managing risk.
However, the message likely won’t resonate with Gannett’s audience.
"And then I made the mistake of losing, and my career fell part."
Our friends at Benzinga offer an interesting anecdote about Bill Ackman’s tennis skills and his big miss on Valeant Pharmaceuticals. Also, it outlines just how expensive it is to join a private club on Fisher Island.
"Asia is producing a new billionaire every three days."
If that figure doesn't grab your attention, it's time to check your pulse.
According to the 2017 Art Market report, a joint publication by Art Basel and UBS, it's a hell of a time to be selling artwork in the East. Our new friends at Arthena offer insight into the six- and seven-figure sales of artwork abroad and some interesting insight on investor sentiment regarding hedge fund investment.
“Regulator punishes whistleblower by forcing him back into old job at Wells Fargo.”
The Labor Department's Occupational Safety and Health Administration (OSHA) said that Wells Fargo must rehire an employee that it forced out for whistleblowing. Also, the firm must pay $5.4 million in damages, back pay and legal fees.
The government agency said that the Wells Fargo manager had been forced out of his job after he told his superiors that two people at the bank were engaged in “bank, mail and wire fraud.”
And now, he’ll return to his office…
What is that (re)on-boarding conversation going to look like?
HR Manager: “Nice to have you back after you ratted us out seven years ago.
So… while you were gone a few things changed in our culture.
We no longer (allegedly) encourage our employees to commit fraud and sign our customers up for products and services they don’t need…
Since you left, our CEO stepped down. You were here back when the (alleged) fraudulent accounts started, but we've since been caught, and it was… well… it was just a wacky time.
Anyway, here’s your desk. The computer runs on DOS because we had to sell a ton of equipment to pay off our massive fines to the U.S. government. Be sure to get here early before the auditors do… Oh, and on Wednesdays, we wear pink.”
“No one is suggesting that we're living in Orwell's world. But the road to that world is people just becoming disengaged and allowing their government to do whatever it wants."
That’s Dylan Skolnick, co-director of the Cinema Arts Centre on Long Island, New York. Today, roughly 200 movie theaters around the globe will be showing the film version of George Orwell's dystopian classic, 1984.
To protest President Donald Trump.
But hold up. No one is suggesting that we’re living in Orwell’s world? That’s exactly where the recent and sudden fascination with 1984 has come from…There’s no shortage of comparisons in the mainstream press today. From Salon… to The New Yorker… and The Guardian.
The American surveillance state though wasn’t created during Trump’s 100 days in office. And thought crime has become more of a problem on college campuses than in the West Wing…
It’s very interesting to watch people look at a book like 1984 and draw comparisons to today’s world. But it’s just more proof that people see fear where they want to see fear. They find totalitarianism in one ideology and completely let the actions of their political heroes slide.
It’s a fascinating social experiment.
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Garrett Baldwin is the voice of the The Daily Alpha, the features editor for Modern Trader magazine, and the author of The Man with The Big Red Balloon.