What we’re reading (6/7)
“Keith Gill’s Riotous Return To YouTube Had Beer, Charts And A GameStop Pep Talk” (Wall Street Journal). “Keith Gill’s livestream Friday had many of the same ingredients as the 2021 videos that made him a legend to scores of everyday investors eager to strike it big in the stock market. He donned sunglasses. He spoke from his signature red gaming chair. He poured a beer, cracked jokes and cheered on the Celtics. He even had a few props, including his Magic 8 Ball. ‘It’s five o’clock somewhere,’ Gill said. The crowd loved it.”
“Roaring Kitty Rambled About Memes, Guzzled A Beer, And Revealed His E-Trade Account In A Long-Awaited Livestream. It Couldn’t Reverse A 41% Decline In The Stock.” (Business Insider). “Gill also revealed his portfolio, which was worth $350 million as of 1 p.m. ET on Friday. Apart from talking about GameStop, Gill confirmed that he's behind all of his social-media accounts and that he did not sell any, as some on the internet had speculated. Gill told viewers that only his money was behind his $350 million position in GameStop and that he's not working with anyone else.”
“‘Everything Is Not Going to Be OK’ In Private Equity, Apollo’s Co-President Says” (Bloomberg). “‘I’m here to tell you everything is not going to be ok,’ the Apollo co-president said in a session at the SuperReturn International conference in Berlin on Wednesday. ‘The types of PE returns it enjoyed for many years, you know, up to 2022, you’re not going to see that until the pig moves through the python. And that is just the reality of where we are.’ Private equity firms didn’t take significant markdowns during the recent period of rapid rate hikes which means that ‘investors of all sorts are going to have swallow the lump moving through the system,’ he said, referring to assets that private equity firms bought up until 2022. Funds are now holding on to these companies and will eventually have to refinance at higher rates.”
“The Slow Death Of A Fabled Media Empire” (New York Times). “Because Paramount Global’s ownership structure gives all power to its largest voting shareholder, the company’s future comes down to the whims of just one person: the 70-year-old heiress Shari Redstone. She chose to put Paramount on the block, and she alone is deciding between a buyer whose strategy could very well further weaken, or kill, these cultural icons — and one that at least allows for some hope of a creative revival. She could, of course, reject both options, and try to maintain what’s left of the status quo. Is this how we want our cultural future to be decided?”
“Procyclical Stocks Earn Higher Returns” (William Goetzmann, Akiko Watanabe, and Masahiro Watanabe). “We find that procyclical stocks, whose returns comove with business cycles, earn higher average returns than countercyclical stocks. We use almost a three-quarter century of real GDP growth expectations from economists’ surveys to determine forecasted economic states. This approach largely avoids the confounding effects of econometric forecasting model error. The loading on the expected real GDP growth rate is a priced risk measure. A fully tradable, ex-ante portfolio formed on this loading generates a procyclicality premium that is statistically significant, economically large, long-lasting over a few years, and independent of the size, book-to-market, and momentum effects.”
