What we’re reading (7/10)
“How Is Rent The Runway Still in Business? Founder Moved Quickly, Cut Deep” (Wall Street Journal). Rent the Runway went hard in terms of scaling back in the face of COVID. Per the Journal “[t]he company’s costs were slashed by 51%, and half the workforce was furloughed or laid off.” Apparently, the cuts are paying off (for the shareholders, it should be noted, obviously not for the furloughed).
“Stocks Generate Big Gains and Bigger Questions” (New York Times). The Times isn’t buying the rebound: “[a] powerful rally during drastically deteriorating economic conditions has left the market richly valued and facing great uncertainty.”
“Supreme Court Rules that About Half of Oklahoma is Native American Land” (NPR). In a 5-4 decision (Gorsuch, Sotomayor, RBG, Kagan, and Breyer in the majority), SCOTUS ruled that “about half of the land in Oklahoma is within a Native American reservation.” Huge implications for past and future state criminal cases in regions (including much of Tulsa) occurring in now-explicitly Native American lands.
“When Wall Street Analysts Scream ‘Buy,’ the Smart Money is Already Way Ahead of Them” (MarketWatch). Wall Street analysts (the ones that write research reports in equity research groups at major investment banks and independent research shops) tend to be “followers [rather] than leaders.” Hulbert (the author) points out some good reasons why. Another possible reason he doesn’t mention: the analysts want to stay on executives “good sides” so they get that next call to go golfing or to Tahoe or to Art Basel, et cetera. This ought to be obvious to anyone who’s read an earnings call transcript that starts off with the effusive “before I get to my question, just want to say, really great quarter guys, really impressive” or similar congratulatory nonsense.
“Could the United Kingdom Become an Emerging Market?” (CNN Money). According to CNN, “[s]ome analysts on Wall Street are beginning to wonder whether a volatile currency, declining global clout and a reliance on foreign investors could relegate the United Kingdom to ‘emerging market’ status.” Awfully silly conjecture, in our opinion. See the previous article: said “analysts” are often terribly wrong.
