April picks available soon
I’ll be publishing the Prime and Select picks for the month of March before Tuesday, April 1 (the first trading day of the month). As always, SPC’s performance measurement for the month of March, as well as SPC’s cumulative performance, will assume the sale of the March picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Monday, March 31). Performance tracking for the month of April will assume the April picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Tuesday, April 1).
What we’re reading (3/25)
“Front-Running Target-Date Funds For Fun And Profit” (Barron’s). “No institutional trader would think of telegraphing to the rest of Wall Street that it was about to execute a sizable trade. Yet that, in effect, is what the multi-trillion-dollar target-date fund industry regularly does when executing rebalancing transactions, enabling shrewd traders to front-run those transactions and profit at the funds’ expense.”
“Does Balyasny Have Good — Or Bad — Timing With Its New Venture Fund?” (Institutional Investor). “Venture investing has hit hard times since the 2022 collapse of technology and growth companies in the stock market. As a result, more than 1,200 venture-backed unicorns — companies valued at more than $1 billion — have yet to go public or get acquired, according to CB Insights, which tracks the VC industry.”
“Want To Invest In A Private Company? All It Takes Is $5,000” (Wall Street Journal). “It is getting easier to invest in high-risk, high-reward private companies. Now, all it takes is $5,000 to buy a stake in a firm like artificial intelligence platform Glean or crypto exchange Kraken. EquityZen and Forge Global, which are marketplaces for trading shares of private companies, are lowering the minimum investment from tens of thousands of dollars, the companies said.”
“Let’s Stop The Trade Deficit Blame Game” (Maurice Obstfeld). “Many economists suggest that low US saving, partly due to a federal budget deficit that reached a whopping 6.4 percent of GDP in 2024, could plausibly play a role in causing America’s large and persistent trade deficit. Proponents of tariffs or other trade-limiting measures push back furiously. The United States is a blameless victim, they say. US trade deficits arise from other countries’ mercantilist policies, foisted on a US economy that previous leaders have fecklessly and recklessly left open to external actors. To restore balanced trade, they argue, it is time to take back control. Anyone who points out that the United States borrows abroad because its saving falls short of its investment faces the retort that foreign saving exceeds investment by the same amount (another consequence of arithmetic). But neither observation suffices to determine the origin of the pattern of global imbalances, because saving and investment rates have deeper fundamental drivers. It is only those that can justifiably be labeled as ‘causes’ of the US deficit.”
“The Economics Of Healthcare Fraud” (Jetson Leder-Luis & Anup Malani). “Healthcare fraud imposes a sizable cost on U.S. public healthcare budgets and distorts health care provision. We examine the economics of health care fraud and enforcement using theory and data and connect to a growing literature on the topic. We first offer a new economic definition of health care fraud that captures and connects the wide range of activities prosecuted as fraud. We define fraud as any divergence between the care an insurer says a patient qualifies for, the care a provider provides, and the care a provider bills for. Our definition clarifies the economic consequences of different categories of fraud and provides a framework for understanding the slate of existing studies. Next, we examine the incentives for committing and for prosecuting fraud. We show how fraud is driven by a combination of inadequate (expected) penalties for fraud and imperfect reimbursement rates. Public anti-fraud litigation is driven by the relative monetary, political or career returns to prosecuting fraud and by prosecutorial budgets. Finally, we examine the prevalence of health care fraud prosecutions across types of fraud and types of care, and across the US, by machine learning on text data from Department of Justice press releases.”
What we’re reading (3/24)
“Dow Jumps Nearly 600 Points On Monday As Investors Hope Trump Softens Tariff Stance” (CNBC). “Stocks jumped Monday on optimism that President Donald Trump may hold back from implementing some of his wide-ranging tariff plans and so the U.S. could skirt an economic slowdown from a protracted trade war.”
“Trade War Explodes Across World At Pace Not Seen In Decades” (Wall Street Journal). “Barriers to open trade are rising across the world at a pace unseen in decades, a cascade of protectionism that harks back to the isolationist fervor that swept the globe in the 1930s and worsened the Great Depression. It isn’t just President Trump’s extensive new tariffs, which have set off a barrage of retaliatory measures across Europe, China and Canada targeting hundreds of U.S. goods. Even before Trump retook the White House, many countries were increasing trade barriers, often against China, as they tried to beat back a flood of electric cars, steel and other manufactured goods pressuring their homegrown industries. Now those efforts are proliferating as countries brace for a new wave of goods redirected across the globe by the U.S.’s rising tariff shield.”
“What Does Musk’s ‘Dexit’ From Delaware Mean For The Future Of US Business?” (The Week). “Delaware's capitalist-friendly approach to taxes and regulation has long made it a lynchpin of the American economy: More than 1.5 million businesses from around the world are incorporated in the state. But Elon Musk's ‘Dexit’ to Nevada could change all that, and state legislators are scrambling to respond.”
“This Timing System [Allegedly] Beats The Market Using The Calendar. Here’s What It Says Now.” (MarketWatch). “Currently, for example, the [Seasonality Timing System] STS has investors 100% in cash until March 27, after which you would remain fully invested in the U.S. stock market until April 7. Fosback’s system has been successful because the market’s best and worst days don’t occur randomly. Instead they tend to follow a calendar-based rhythm. This year provides a good illustration.”
“The Trump Administration Accidentally Texted Me Its War Plans” (The Atlantic). “U.S. national-security leaders included me in a group chat about upcoming military strikes in Yemen. I didn’t think it could be real. Then the bombs started falling.”
What we’re reading (3/21)
“China Explores Limiting Its Own Exports to Mollify Trump” (Wall Street Journal). “During Donald Trump’s first presidency, China was determined not to yield to American pressure over trade like Japan did in the 1980s. Now, faced with an even greater economic assault from the second Trump presidency at a time of sluggish growth at home, Beijing may take a page from Tokyo’s playbook—on one specific issue it sees as in its own interest. Like Japan decades ago, China is considering trying to blunt greater U.S. tariffs and other trade barriers by offering to curb the quantity of certain goods exported to the U.S., according to advisers to the Chinese government. Tokyo’s adoption of so-called voluntary export restraints, or VERs, to limit its auto shipments to the U.S. in the 1980s helped prevent Washington from imposing higher import duties.”
“AI Wars” (Paul Taylor). “It is hard to know exactly how innovative DeepSeek is. Demis Hassabis of Google DeepMind has said that he doesn’t think it is an outlier, and many of the techniques described as novel in DeepSeek’s reports are similar to those implemented by others. The much quoted figure of $5.5 million for the cost of training the DeepSeek model is taken from a 2024 paper and refers only to the cost of the computation required for the final training run for the model that provided the foundation for R1.”
“A Solution To The Housing Shortage” (City Journal). “Housing is too expensive because its development is overregulated. Yet the regulations that drive up housing costs—arcane local zoning and building codes—are not the kinds that congressional Republicans are best positioned to fight. Moreover, many of the local codes protect suburban single-family-home neighborhoods, a residential ideal that Trump has pointedly defended.”
“Nvidia CEO Jensen Huang Says Every Company Will Become An ‘AI Factory.’ Here’s What He Means.” (Business Insider). “Huang, Rauch, and other technologists think modern companies will succeed by generating the most tokens. They will be AI factories churning out tokens that will be used to improve and run AI systems that help businesses make better products and services.”
“Federal Judge Pushes Back On Acting Social Security Head Over Threat To Close Agency” (Washington Post). “Acting Social Security commissioner Leland Dudek threatened Thursday evening to bar Social Security Administration employees from accessing its computer systems in response to a judge’s order blocking the U.S. DOGE Service from accessing sensitive taxpayer data. Less than 24 hours later — after the judge rejected his argument and the White House intervened — Dudek is saying he was ‘out of line.’”
What we’re reading (3/20)
“Fed Projections See An Economy Dramatically Reset By Trump’s Election” (Wall Street Journal). “Months ago, policymakers presumed they would spend 2025 gradually cutting rates to keep inflation heading down without a big rise in joblessness to achieve the so-called soft landing. The latest projections point to the prospect that tariffs covering a swath of goods and materials will send up prices while sapping investment, sentiment and growth, at least in the short run.”
“U.S. Dollar Stands Tall After Fed Signals No Rush To Cut Rates” (Reuters). “The U.S. dollar was on the front foot against major peers on Friday after its best single-day performance for three weeks with the Federal Reserve indicating no rush to cut interest rates. The risk-sensitive Australian and New Zealand dollars remained on the defensive after steep slides on Thursday as worries about the economic drag from U.S. President Donald Trump's aggressive campaign of global trade tariffs dented sentiment.”
“Is The Stock Market Cheap Yet?” (Morningstar). “The recent selloff in stocks rattling investors has had one major side effect: The market is looking cheaper after pushing into overvalued territory late last year. As stock prices have fallen in the first months of 2025, so too have equity valuations.”
“Anti-Dividend Investing: Yield Matters—But Not How You Think!” (Alpha Architect). “Dividends are the comfort food of investing. Who wouldn’t love feeling like they’re getting a seemingly “free” payout just for holding onto a stock? It’s no wonder so many investors are drawn to the siren call of yield. As with all good things, there’s a little more—perhaps a whole lot more—to the story. Here’s why: it’s possible that even in a tax-free setting, selling stocks before dividend payouts can lead to abnormal returns.”
“Oxygen Discovered In Most Distant Known Galaxy” (Phys.Org). “Discovered last year, JADES-GS-z14-0 is the most distant confirmed galaxy ever found: it is so far away, its light took 13.4 billion years to reach us, meaning we see it as it was when the universe was less than 300 million years old, about 2% of its present age. The new oxygen detection with ALMA, a telescope array in Chile's Atacama Desert, suggests the galaxy is much more chemically mature than expected.”
What we’re reading (3/19)
“Accusations Of Corporate Espionage Shake A Software Rivalry” (DealBook). “One of the most bitter rivalries in the world of H.R. service providers just took a turn that wouldn’t be out of place in a spy thriller. Rippling on Monday sued Deel, accusing its competitor of hiring a mole in its Dublin office to comb through Rippling’s trade secrets, a scheme that reached its rival’s highest ranks, DealBook’s Michael de la Merced reports. Rippling said it had uncovered the defector through a ‘honeypot’ trap — a Slack channel set up specifically for the ruse that was mentioned in a letter to top Deel executives.”
“Data Broker Brags About Having Highly Detailed Personal Information On Nearly All Internet Users” (Gizmodo). “In 2019, the data broker Epsilon was acquired by French advertising conglomerate Publicis Groupe. Then, earlier this month, Publicis also acquired Lotame, another data and advertising firm, and announced it plans to integrate it with Epsilon’s business. At the time, Publicis CEO Arthur Sadoun said that the new corporate integration would allow his company to deliver “personalized messaging at scale” to some 91 percent of the internet’s adult web users.”
“Director Carl Rinsch Indicted On Charges Of Defrauding $11 Million From Netflix” (Variety). “According to the indictment, Rinsch had quickly transferred most of the $11 million to his brokerage account, where he promptly lost about half of it by speculating on investments such as call options on a biopharmaceutical company and put options on an S&P 500 ETF. At the time he was still reassuring Netflix that the show was ‘awesome and moving forward really well,’ the indictment states.”
“The $7 Billion Defense Contractor Who Became One Of America’s Biggest Alleged Tax Cheats” (Wall Street Journal). “Beyond the charges of tax evasion and misrepresentation, lawyers and accountants are watching the case for implications for other expatriates. The U.S. is unusual in taxing Americans living abroad. In virtually every other country, governments tax people based on residence, not citizenship. Americans generally pay taxes to the government where they are living, and must also file U.S. tax returns, with foreign-tax credits to avoid double taxation. But foreign spouses usually don’t pay U.S. taxes if they aren’t living there. For Americans settled abroad, it can be a no-brainer—and entirely legal—to keep homes and investments in their foreign spouse’s name. Edelman’s case could bring new scrutiny to the practice.”
“Purdue Pharma Files New Bankruptcy Plan For $7.4 Billion Opioid Settlement” (CNN Business). “Purdue Pharma filed a new bankruptcy plan on Tuesday, a major step toward finalizing a proposed opioid settlement of at least $7.4 billion after a setback in the U.S. Supreme Court last year. The payments are aimed at resolving thousands of lawsuits alleging that the company’s pain medication OxyContin caused a widespread opioid addiction crisis in the United States. The headline figure had been previously flagged by Purdue and its owners, members of the wealthy Sackler family.”
What we’re reading (3/18)
“Stock Market Today: Nasdaq Leads Stocks Lower, Nvidia Falls Over 3% As Tech Rout Resumes Ahead Of Fed Decision” (Yahoo! Finance). “US stocks pulled back on Tuesday, led by a nearly 2% decline in the Nasdaq, following two days of gains as investors concerned about an economic slowdown looked to the Federal Reserve's policy meeting for insights.”
“Slower Economic Growth Is Likely Ahead With Risk Of A Recession Rising, According To The CNBC Fed Survey” (CNBC). “Respondents to the March CNBC Fed Survey have raised the risk of recession to the highest level in six months, cut their growth forecast for 2025 and hiked their inflation outlook. Much of the change appears to stem from concern over fiscal policies from the Trump administration, especially tariffs, which are now seen by them as the top threat to the U.S. economy, replacing inflation. The outlook for the S&P 500 declined for the first time since September.”
“Leaked Memo: Inside JPMorgan’s RTO Plan For Its Largest Office” (Business Insider). “The bank told workers of its Polaris campus in Columbus, Ohio — a tech hub that houses roughly 12,000 employees — to return to the office five days a week beginning April 21, according to an internal memo viewed by BI.”
“Google’s $32 Billion Wiz Deal Is A Natsec Gamble” (Semafor). “Call it an act of Wiz-ardry: a dead deal has come back to life, with a $9 billion bump. Google will buy cybersecurity startup Wiz for $32 billion, its largest acquisition and a signal that the M&A market isn’t so dead for the right kind of company.”
“The Last Decision By The World’s Leading Thinker On Decisions” (Wall Street Journal). “Kahneman was one of the world’s most influential thinkers—a psychologist at Princeton University, winner of the Nobel Prize in economics and author of the international blockbuster “Thinking, Fast and Slow,” first published in 2011. He had spent his long career studying the imperfections and inconsistencies of human decision-making. By most accounts—although not his own—Kahneman was still in reasonably good physical and mental health when he chose to die.”
What we’re reading (3/16)
“A Fed Meeting And Retail Sales Data Greet A Flailing Stock Market: What To Know This Week” (Yahoo! Finance). “In the week ahead, the Federal Reserve and the health of the US economy will remain top of mind for investors. The central bank is largely expected to hold interest rates steady when it announces its next monetary policy decision on Wednesday. Markets will focus on any clues about when the central bank could cut rates again.”
“The Days Of Set-And-Forget Investing Just Ended For Many Americans” (Wall Street Journal). “The S&P 500, which had been delivering hard-to-beat gains, fell into correction territory this past week, with Wall Street fretting that the economy is sliding toward recession. In the first half of March, individual investors have been trading in their 401(k)s at more than four times the normal level, according to record-keeper Alight Solutions. The past month has had the most trading in almost five years. Investors who have dumped U.S. stocks say they are searching for stability in money-market funds, short-term bonds, gold and international markets. European defense stocks have been a popular bet, premised on increased security spending in the region.”
“Home Sellers And Buyers Accuse Realtors Of Blocking Lower Fees” (New York Times). “One year after the National Association of Realtors agreed, as part of a legal settlement, to change a key rule on real estate commissions — a rule that had long upheld a tradition of commissions between 5 and 6 percent, little has changed. What was hailed as a watershed has so far produced a mere drizzle. Some economists predicted the rule change would upend the business model and bring competition to a long-stilted marketplace, breaking the standard 6 percent rate — one of the highest rates in the world — and forcing down home prices as a result. Though average commissions appear to be slipping, industry watchdogs say that Realtors and their brokerages have used workarounds and pressure on sellers like Mr. Chambers to subvert the settlement. So far, they’re finding success.”
“The World’s Deadliest Infectious Disease Is About to Get Worse” (The Atlantic). “Mycobacterium tuberculosis is a near-perfect predator. In 1882, Robert Koch, the physician who discovered the microbe, told a room full of scientists that it caused one in seven of all deaths. In 2023, after a brief hiatus, tuberculosis regained from COVID its status as the world’s deadliest infectious disease—a title it has held for most of what we know of human history.”
“Is Our Universe Trapped Inside A Black Hole? This James Webb Space Telescope Discovery Might Blow Your Mind” (Space.com). “Without a doubt, since its launch, the James Webb Space Telescope (JWST) has revolutionized our view of the early universe, but its new findings could put astronomers in a spin. In fact, it could tell us something profound about the birth of the universe by possibly hinting that everything we see around us is sealed within a black hole. The $10 billion telescope, which began observing the cosmos in the Summer of 2022, has found that the vast majority of deep space and, thus the early galaxies it has so far observed, are rotating in the same direction. While around two-thirds of galaxies spin clockwise, the other third rotates counter-clockwise. In a random universe, scientists would expect to find 50% of galaxies rotating one way, while the other 50% rotate the other way. This new research suggests there is a preferred direction for galactic rotation.”
What we’re reading (3/15)
“A New Economic Power Is Emerging In Europe” (Business Insider). “Polish Prime Minister Donald Tusk took a leaf out of President Donald Trump's book last month, turning to a controversial entrepreneur for support as he pushed for deregulation to help boost the economy. Presenting his government's economic plan in February, Tusk hailed ‘the moment when we can overtake everyone.’”
“Consumers And Businesses Send Distress Signal As Economic Fear Sets In” (Wall Street Journal). “Consumers are starting to freak out.”
“Cancer Patient's $100,000 Bill Shows Chaos Rocking Health Care” (Bloomberg). “Like countless Americans, Simons was caught in a conflict between her insurer and her provider. These clashes, long a fixture of the US health-care system, are intensifying as both care providers and insurers employ supercharged tactics to maximize their financial advantage. They’re turning to a growing brigade of middleman companies that face off over prior authorizations, denials, appeals and payments. Those businesses — sometimes backed by private equity, sometimes units of powerhouse incumbents — police the money insurers pay out or, on the other side, help hospital systems and medical practices boost their revenue.”
“How Elon Musk Lost The Plot: The Tycoon Is Flailing In Politics” (Richard Hanania). “To say Musk is biased in his posts or that he shows a disregard for the truth doesn’t come close to capturing the constant stream of nonsense he blasts out to the world. This isn’t a matter of being biased or getting things wrong like CNN occasionally does. His feed is more in the neighbourhood of InfoWars, where Alex Jones will typically point to a document that actually exists to make wild extrapolations about what Democrats or ‘globalists’ are up to. Musk is somehow more reckless: the things he regularly promotes lack even that kind of nexus to something based in reality.”
“Have Humans Passed Peak Brain Power?” (Financial Times). “In one particularly eye-opening statistic, the share of adults who are unable to ‘use mathematical reasoning when reviewing and evaluating the validity of statements’ has climbed to 25 per cent on average in high-income countries, and 35 per cent in the US.”
What we’re reading (3/12)
“Inflation Cooled To 2.8% In February, Lower Than Expected” (Wall Street Journal). “Inflation cooled last month, but the latest data may offer less comfort to U.S. businesses, consumers, and Federal Reserve policymakers than it otherwise would because tariffs are threatening to raise some prices in the months ahead.”
“The Curious Surge Of Productivity In U.S. Restaurants” (Austan Goolsbee, et al.). “We document that, after remaining almost constant for almost 30 years, real labor productivity at U.S. restaurants surged over 15% during the COVID pandemic. This surge has persisted even as many conditions have returned to pre-pandemic levels. Using mobile phone data tracking visits and spending at more than 100,000 individual limited service restaurants across the country, we explore the potential sources of the surge. It cannot be explained by economies of scale, expanding market power, or a direct result of COVID-sourced demand fluctuations. The restaurants’ productivity growth rates are strongly correlated, however, with reductions in the amount of time their customers spend in the establishments, particularly with a rising share of customers spending 10 minutes or less.”
“The Internet Is In Awe Of Warren Buffett’s Perfectly Timed Cash-Out” (Business Insider). “Warren Buffett has sparked a raft of comments and memes on social media after the legendary investor sold most of his massive Apple stake and built a record cash pile before the stock market tumbled earlier this week.”
“Dimon: ‘Uncertainty Is Not A Good Thing’” (Semafor). “‘I don’t think the average American consumer who wakes up in the morning and goes to work…changes what they’re going to do because they read about tariffs,’ Dimon said in an interview with Semafor’s Gina Chon at a Washington, D.C., summit on retirement hosted by BlackRock and the Bipartisan Policy Center. ‘But I do think companies might,” he said. “Uncertainty is not a good thing.’”
“Short-Term Pain For... Long-Term Malaise?” (Drezner’s World). “As Catherine Rampell notes in her latest column, Trump ‘has already positioned America to lose the 21st century, in three simple steps. 1) Alienate your friends. 2) Destroy your business environment. 3) Slaughter your golden goose (i.e., science and research).’”
What we’re reading (3/10)
“Stock Market Today: Nasdaq Falls 4% After Trump Doesn’t Rule Out Recession” (Wall Street Journal). “Stocks slid Monday as concerns about the U.S. economy tipping into a recession grew. The Dow gave up nearly 900 points, the S&P 500 fell 2.7% and the Nasdaq Composite tumbled 4% as shares of big tech companies extended their selloff. Tesla's stock lost 15%. Shares of the other Magnificent Seven stocks—Apple, Microsoft, Alphabet, Amazon.com, Nvidia and Meta Platforms—fell between 2% and 5%.”
“Tesla Shares Plunge 15%, Suffering Steepest Drop In Five Years” (NBC News). “Tesla’s selloff on Wall Street intensified on Monday, with shares of the electric vehicle maker plunging 15%, their worst day on the market since September 2020. On Friday, Tesla wrapped up a seventh straight week of losses, its longest losing streak since debuting on the Nasdaq in 2010. The stock has fallen every week since CEO Elon Musk went to Washington, D.C., to take on a major role in the second Trump White House.”
“Are Palantir’s Passive Bona Fides Hurting The Stock?” (Institutional Investor). “[W]hile passive investment facilitates momentum investing and pushes stocks up because of regular buying for retirement accounts, it also can create ‘wild swings’ due to the lack of active managers to take the other side of the trade if things start to go south. (Green previously worked for Thiel’s macro hedge fund.)”
“Fed To Deliver Rapid-Fire Rate Cuts If Economic Downturn Happens, Traders Bet” (Reuters). “The Federal Reserve won't lower interest rates at its policy meeting next week, but could deliver the first of a set of rapid-fire reductions in borrowing costs in June if rising fears of an economic downturn triggered by a trade war materialize. At least that's where the betting is in futures markets, where contracts that settle to the Fed's policy rate were increasingly priced for quarter-percentage-point reductions in June, July and October following U.S. President Donald Trump's remarks last weekend about a "period of transition" as he ratchets up tariffs on China, Canada and Mexico. U.S. stocks and Treasury yields also dropped on Monday on concern that his comments signaled a coming recession.”
“Trump Wants To Kill Carried Interest. Wall Street Will Fight To Keep It.” (DealBook). “Nearly a month has passed since President Trump last spoke publicly of his desire to kill the carried interest loophole. (Yes, we know, some of you don’t consider it a ‘loophole.’) And yet the private equity industry, which stands to lose big if the president upends the tax break, is still bracing for a fight.”
What we’re reading (3/9)
“Dow, S&P 500, Nasdaq Futures Fall Following S&P’s Worst Week Since September” (Yahoo! Finance). “US stock futures fell solidly Sunday evening as investors took the weekend to process the February jobs report and prepared for a busy week of economic data, headlined by a report on inflation amid concerns over its resurgence under President Trump's unpredictable trade policy.”
“Mark Carney To Be Canada’s Next Prime Minister” (NPR). “Mark Carney, the former central banker-turned-centrist politician, triumphed over Chrystia Freeland in Sunday's Liberal Party leadership race, paving the way for him to succeed Justin Trudeau as Canada's next prime minister. He is expected to be sworn in early this week.”
“Markets Finally Woke Up To Tariff Reality. Is This A Buying Opportunity?” (Wall Street Journal). “The case for thinking the selloff is overdone is that markets have broadly dropped back to where they were at the election. Some falls are extraordinary: Tesla is down 45% from its high in mid-December. Since its IPO Tesla has fallen more in such a short period only in 2022, when the Federal Reserve was aggressively raising rates.”
“Zuckerberg’s Meta Considered Sharing User Data With China, Whistleblower Alleges” (Washington Post). “Meta was willing to go to extreme lengths to censor content and shut down political dissent in a failed attempt to win the approval of the Chinese Communist Party and bring Facebook to millions of internet users in China, according to a new whistleblower complaint from a former global policy director at the company.”
“US Measles Cases Jump 35% In A Week; Now Found In 12 States” (Bloomberg). “US measles cases jumped by a third over the past week, according to Centers for Disease Control and Prevention data, a worrying sign in the outbreak that’s already linked to two deaths.”
What we’re reading (3/6)
“Trade Stress Slams U.S. Stocks” (Wall Street Journal). “Declines were broad-based, with financial and tech stocks notching some of the largest losses. The dollar weakened, heading for its lowest close since election day and its worst four-day stretch since 2022. Investors continued their flight from some of the artificial intelligence shares that only two months ago were market favorites.”
“Stock Market Today: Nasdaq Enters Correction, S&P 500 Sinks To Lowest Since November As Stocks Get Clobbered On Trump Tariff Whiplash” (Yahoo! Finance). “Trade-war uncertainty has persisted as investors weighed how far President Donald Trump would be willing to negotiate on tariffs. On Thursday, Trump said he would pause tariffs on some Mexican goods, and the White House later said the delay also includes goods from Canada.”
“Walmart Asks Chinese Suppliers For Major Price Cuts On Trump Tariffs” (Bloomberg). “Walmart Inc. has asked some Chinese suppliers for major price reductions, with the US retail giant’s efforts to shift the burden of President Donald Trump’s tariffs facing strong pushback from firms in the Asian nation, according to people familiar with the matter.”
“More Americans Tapping 401(k)s To Pay For Financial Emergencies” (The Hill). “Hardship withdrawals let savers tap their retirement funds early for an “immediate and heavy financial need” but are widely seen as a last resort. The most common reasons for taking them are preventing foreclosure or eviction and covering medical bills. Before the pandemic, about 2 percent of account holders took hardship withdrawals annually — less than half the latest share, according to Vanguard data.”
“Country Club No More: Inside Microsoft’s Move To Cull Staff On Performance” (Business Insider). “In 2023, a Microsoft employee asked to take on a lighter workload when his wife was found to have terminal cancer. His managers were supportive, and they appeared happy with his performance during his wife's illness as recently as late 2024, when they told him to expect 120% of his bonus. Then, on January 22, the employee said, an HR representative unexpectedly joined his weekly manager meeting. The employee was fired without severance and was told his health insurance would expire that night. The employee’s wife had to skip chemotherapy treatments for a month after.”
What we’re reading (3/5)
“Tariff Twitches Causing Wild Stock Market Swings” (Axios). “The market's nerves were on full display Wednesday, as stocks whipsawed with every change in the narrative on the Trump administration's tariffs on Mexico and Canada.”
“Hiring Slowed In February As Economic Uncertainty Created ‘Hesitancy’ To Add Jobs Last Month, ADP Data Shows” (Yahoo! Finance). “New data revealed that private sector hiring slowed significantly in February and fell short of Wall Street's expectations, adding to concerns that the US economy is losing steam.”
“The Two-Headed Monster Stalking The Economy Has A Name: Stagflation” (Wall Street Journal). “Fed officials thought they might have engineered a soft landing over the past 18 months. A few are publicly warning of a stagflationary scenario.”
“Chatbots Are Cheating On Their Benchmark Tests” (The Atlantic). “[O]ver the past two years, researchers have published studies and experiments showing that ChatGPT, DeepSeek, Llama, Mistral, Google’s Gemma (the ‘open-access’ cousin of its Gemini product), Microsoft’s Phi, and Alibaba’s Qwen have been trained on the text of popular benchmark tests, tainting the legitimacy of their scores. Think of it like a human student who steals and memorizes a math test, fooling his teacher into thinking he’s learned how to do long division.”
“Discord in Early Talks With Bankers For Potential I.P.O.” (New York Times). “Discord, the social chat app popular with the video game community, has met with investment bankers in recent weeks to discuss preparations for an initial public offering as soon as this year, two people familiar with the talks said.”
What we’re reading (3/4)
“Trump’s Tariffs Plunge Global Markets Into A Sea of Red” (New York Times). “Global markets plunged on Tuesday after U.S. tariffs went into effect on roughly $1.5 trillion worth of imports from Canada, Mexico and China, with another, and even broader, wave set to kick in as soon as next week. China and Canada have already responded, with Beijing targeting the American heartland with sweeping levies on imported food and halting log and soybean shipments from select U.S. companies. Mexico is expected to retaliate, too.”
“Trump Could Scale Back Canada, Mexico Tariffs Wednesday, Lutnick Says” (CNBC). “President Donald Trump will “probably” announce tariff compromise deals with Canada and Mexico soon, Commerce Secretary Howard Lutnick said Tuesday…Lutnick’s comments came minutes after the U.S. stock market limped to a close for a second day of sharp declines, spurred at least in part by investors’ fears that Trump’s aggressive policies will ignite a crippling trade war.”
“American Farmers Brace For Harm From Retaliatory Tariffs” (New York Times). “Agricultural producers of all sizes, from part-time farmers and small family farms to large ones, could take a hit as prices fall and some costs go up. Soybeans accounted for about half of U.S. agricultural exports to China last year, according to the Agriculture Department, but American soybean exporters to China compete with companies from Brazil. U.S. soybean futures fell about 1 percent on Tuesday. Futures on U.S. corn and wheat also fell.”
“Hong Kong-Based Company To Sell Panama Canal Ports” (BBC). “A Hong Kong-based company has agreed to sell most of its stake in two key ports on the Panama Canal to a group led by US investment company BlackRock…[t]hrough a subsidiary, CK Hutchison Holding operates ports at the Atlantic Ocean and Pacific Ocean entrances to the canal. It said Tuesday that it would sell its interests as part of a deal worth $22.8bn (£17.8bn). CK Hutchison is not owned by the Chinese government but its base in Hong Kong means it operates under Chinese financial laws. It has operated the ports since 1997.”
“This Scientist Left OpenAI Last Year. His Startup Is Already Worth $30 Billion.” (Wall Street Journal). “Silicon Valley’s hottest investment isn’t a new app or hardware product. It’s one man. AI researcher Ilya Sutskever is the primary reason venture capitalists are putting some $2 billion into his secretive company Safe Superintelligence, according to people familiar with the matter. The new funding round values SSI at $30 billion, making it one of the most valuable AI startups in the world.”
What we’re reading (3/3)
“Trump Says Canada-Mexico Tariffs Will Take Effect, ‘No Room Left’ For Talks” (Wall Street Journal). “President Trump said the U.S. would go ahead with 25% tariffs on goods from Canada and Mexico effective Tuesday, declaring there was ‘no room left’ for negotiations with America’s neighbors…U.S. stocks fell in afternoon trading after Trump said the tariffs would move forward.”
“Hedge funds’ Growing Divide” (Business Insider). “For the first time, scale benefits both the manager and the LP, and the result is four managers with overwhelming clout. Business Insider talked to more than a dozen fund founders, allocators, and industry experts, such as top prime brokers and recruiters, to understand how smaller platforms plan to survive the unprecedented concentration of capital and talent and where allocators are turning in this new reality.”
“A Stock Market Rotation Is Underway. Will It Last?” (Morningstar). “The big rally in the stock market may have stalled, but there’s been lots of churn under the surface. The Morningstar US Market Index has slipped into the red this year, falling 0.25% since the beginning of January. Technology stocks, which were far and away the largest contributor to the big bull market in 2023 and 2024, have been the biggest drag on stock returns in 2025. Meanwhile, sectors like financial services, basic materials, and healthcare are seeing new investor interest. Non-US markets such as China, the United Kingdom, and Germany have also staged significant rallies. ‘Overall, there’s this subtle transition in leadership,’ says Michael Arone, chief investment strategist at State Street Global Advisors.”
“How Big Is The Stock Market’s America Bubble?” (Financial Times). “US stocks’ huge surge since the global financial crisis means they account for almost two-thirds of the world’s investable market, raising concerns about whether such dominance creates too much risk for investors’ portfolios. Wall Street has raced ahead of international rivals over the past decade and a half, driven largely by a rally in the tech sector — and particularly companies linked to artificial intelligence — which is now worth almost as much as all the stocks in Europe combined. But a recent pullback in tech shares has underlined the growing nervousness around soaring valuations in a market that has swallowed an ever larger share of global investors’ allocations.”
“BridgeBio Oncology To Go Public In SPAC Deal Bringing $450 Million-Plus For Trio Of Cancer Drugs” (Dealbreaker). “BridgeBio Oncology Therapeutics, a company working to advance the field of therapies addressing a validated but elusive group of cancer targets, has reached a deal to go public in a SPAC merger that brings more than $450 million to support clinical testing of three drug candidates. The merger agreement announced Friday is with Helix Acquisition Corp. II, a SPAC sponsored by affiliates of Cormorant Asset Management. When the deal closes, the combined company will take the BridgeBio Oncology Therapeutics name and is expected to trade on the Nasdaq under the stock symbol ‘BBOT.’”
What we’re reading (3/2)
"How Wall Street Pros Are Looking At Fears Over A US Economy Slowdown” (Yahoo! Finance). “‘The fear here among a lot of investors now [has] become that the economy could be slowing down faster than the Fed is willing to react, which is a tough situation,’ Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance an interview on Friday.”
“Why This Spot-On Consumer-Confidence Measure Should Concern Stock-Market Bulls” (MarketWatch). “…[A] far bigger cause for concern is the gap between the Conference Board’s and the University of Michigan’s sentiment measures. Historically, this spread has widened considerably in the months prior to recessions. Not surprisingly, given this historical tendency, the S&P 500 has performed worse in the wake of higher spread levels than lower ones.”
“Big Consulting Bosses Meet With Trump Officials To Save Contracts” (Wall Street Journal). “In recent days, top executives at professional services firms including Ernst & Young and Guidehouse have met with officials including Josh Gruenbaum, the Federal Acquisition Service commissioner within the General Services Administration, according to people familiar with the discussions. A Booz Allen executive has also been in touch with Gruenbaum, who is a former director at the private-equity firm KKR…[i]n the meetings with consultants, Gruenbaum has emphasized to executives that the government sees value in consulting—particularly in rolling out advanced technology and modernizing government agencies.”
“Justice Department, FTC Antitrust Enforcement May Merge” (Dealbreaker). “One factoid that should be in every antitrust outline is that both the FTC and the DOJ can bust up monopolies. The DOJ tends to handle the criminal side of antitrust while the FTC handles civil, but there is some undeniable overlap in the work that they do. So why keep both? Musk can’t seem to find a persuasive enough answer to maintain the apparent redundancy.”
“AI Will Upend A Basic Assumption About How Companies Are Organized” (Bloomberg). “For most of history, hiring a dozen PhDs meant a massive budget and months of lead time. Today, a few keystrokes in a chatbot summon that brainpower in seconds. As intelligence becomes cheaper and faster, the basic assumption underpinning our institutions — that human insight is scarce and expensive — no longer holds. When you can effectively consult a dozen experts anytime you like, it changes how companies organize, how we innovate and how each of us approaches learning and decision-making. The question facing individuals and organizations alike is: What will you do when intelligence itself is suddenly ubiquitous and practically free?”
February performance review
Prime: +3.96%
Select: +3.77%
SPY ETF: +0.25%
Bogleheads portfolio (80% VTI + 20% BND): +0.30%
March picks available now
The new Prime and Select picks for March are available starting now, based on a model run put through Today (March 1). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, March 3, 2025 (at the mid-spread open price) through the last trading day of the month, Monday, March 31, 2025 (at the mid-spread closing price).
March picks available soon
I’ll be publishing the Prime and Select picks for the month of March before Monday, March 3 (the first trading day of the month). As always, SPC’s performance measurement for the month of February, as well as SPC’s cumulative performance, will assume the sale of the February picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, February 28). Performance tracking for the month of March will assume the March picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Monday, March 3).