Burry

The turkey was fed and sheltered for 1000 consecutive days, but this did not mean the butcher loved him.--anon


Mom went down to West Virginia and saved the deal that was crumbling.
Howison's Neurokinetics is being bought by the owner of the Ottowa Senators with plans of taking it public in an IPO. Interesting deal and Mom has a piece from what she earned a few years ago in a placement she did. She's had a good week.
This Vasquez thing is a PR disaster. Their best starter is in the OR, their best player, an All Star, is in jail.


 In April 2016 most major media outlets ran a story implying that 93% of the Great Barrier Reef, the largest in the world, was “dead”, “nearly dead”, or “dying” Thiswas all based on a report that 93% of reefs in the northern section had “some bleaching”.“Some” could be only 1 percent. And bleaching is not death or even dying. It is a normal occurrence during periods of high heat and the coral usually recovers. Of course, as with all species, some are dying and others are being born at any given time. It is well known that the world’s warmest oceans are in the region of Indonesia, the Philippines, and the Solomon Islands. This area is called the Coral Triangle and it harbors the world’s largest number of coral species and the largest number of reef fish and other reef dwellers. Surely this puts to rest the assertion that the world’s seas are “too hot” for coral reefs due to climate change. Nope.

I am so tired of Snowden.

Deflationary pressures on terrorism and violence. Billions of dollars spent by Saudi Arabia on cutting edge Western military hardware mainly designed to deter high altitude attacks has proved no match for low-cost drones and cruise missiles used in a strike that crippled its giant oil industry.

The destructive strike on Saudi Arabian oil production facilities on Saturday, almost certainly carried out by or on behalf of Iran, brings the Middle East a step closer to general war. The long-anticipated test of President Trump’s crisis-management skills might be at hand. It’s a scary thought. Here’s an even scarier one: Suppose the United States reached this moment without ever having taken advantage of the innovative oil and gas production technique known as hydraulic fracturing, or “fracking,” which enabled drillers to free up previously inaccessible hydrocarbons from shale formations in North Dakota and Texas, among other places.--Charles Lane’s op-ed in Washington Post




On this day in 1975, newspaper heiress and wanted fugitive Patty Hearst was captured in a San Francisco apartment and arrested for armed robbery.



                              Burry

Michael Burry,  the semi-crazy physician hero of “The Big Short,” gave a sort of interview (over emails) to Bloomberg. He has made some new assessments. 

He has sold his water holdings. They have become too popular.

He is looking for Asian stocks. He believes the general group has been unreasonably sold.

Specifically, he likes Japan. He is a big believer in the continued growth of remote and virtual technologies, particularly in Japan. The global retracement in semiconductor, display, and related industries has hurt the shares of related smaller Japanese companies, tremendously. He expects companies like Tazmo and Nippon Pillar Packing, (another holding), to rebound with a high beta to the sector as the inventory of tech components is finished off and growth resumes. About half of all Japanese companies under $1 billion in market cap trade at less than tangible book value, and the median enterprise value to sales ratio for these companies is less than 50%. 

Now this. “Central banks and Basel III have more or less removed price discovery from the credit markets, meaning risk does not have an accurate pricing mechanism in interest rates anymore. And now passive investing has removed price discovery from the equity markets. The simple theses and the models that get people into sectors, factors, indexes, or ETFs and mutual funds mimicking those strategies -- these do not require the security-level analysis that is required for true price discovery.

This is very much like the bubble in synthetic asset-backed CDOs before the Great Financial Crisis in that price-setting in that market was not done by fundamental security-level analysis, but by massive capital flows based on Nobel-approved models of risk that proved to be untrue.”

“The dirty secret of passive index funds -- whether open-end, closed-end, or ETF -- is the distribution of daily dollar value traded among the securities within the indexes they mimic.

“In the Russell 2000 Index, for instance, the vast majority of stocks are lower volume, lower value-traded stocks. Today I counted 1,049 stocks that traded less than $5 million in value during the day. That is over half, and almost half of those -- 456 stocks -- traded less than $1 million during the day. Yet through indexation and passive investing, hundreds of billions are linked to stocks like this. The S&P 500 is no different -- the index contains the world’s largest stocks, but still, 266 stocks -- over half -- traded under $150 million today. That sounds like a lot, but trillions of dollars in assets globally are indexed to these stocks. The theater keeps getting more crowded, but the exit door is the same as it always was. All this gets worse as you get into even less liquid equity and bond markets globally.”

So the small market small caps, bought to mimic a market or group, are not bought for value. And they will be very hard to leave if selling starts.