What we’re reading (7/18)
“One Hedge Fund Is Up 223% This Year Thanks To A Big Bet Against Tech Stocks” (Wall Street Journal). “In late 2020, Mandeep Manku made a big contrarian bet. His hedge fund, Coltrane Asset Management, had already been hit hard when markets plunged because of Covid-19. He decided to swing Coltrane’s portfolio from favoring cheap European companies to betting against tech and other fast-growing companies in the U.S. Markets with so many stocks trading at more than 10 times their revenues, with fervor concentrated in a few sectors, “always end poorly for investors,” Coltrane told clients in a September 2020 presentation.”
“China’s Homebuyers Are Running Out Of Patience With The Real Estate Slump” (CNBC). “China’s real estate market desperately needs a boost in confidence, analysts said, after reports of homebuyers halting mortgage payments rocked bank stocks and raised worries of a systemic crisis. The size of the mortgages isn’t as worrisome as the impact of the latest events on demand and prices for one of the biggest financial assets in China: residential housing.”
“Costco’s Inflation-Proof $4.99 Rotisserie Chicken, Explained” (Vox). “The roasted birds have been hailed as an economic lifeline — most rotisserie chickens will run you $6 to $10 — but the chicken isn’t cheap because of corporate benevolence. In 2015, Costco said it was able to maintain its low price because the company considers the rotisserie chicken a “loss leader.” That means its purpose isn’t to bring in profits, but rather to bring in customers to buy more of the wholesale retailer’s bulk toilet paper and five-packs of deodorant. And it works. The item is so popular among Costco members that it has its own Facebook fan page with 19,000 followers.”
“We Were Wrong About The Great Resignation. Workers Are Still Powerless And The Looming Recession Will Make It Worse.” (Insider). “The Great Resignation — or Great Reshuffle — has been hailed as a reclamation of worker power, including by this publication. But as recession fears throw cold water on the excitement of saying, "I quit," economists told Insider that the truth about the Great Resignation isn't as rosy. Only certain workers have gained any true bargaining power, and even though the lowest-wage workers have seen raises, soaring inflation has largely canceled them out. As the economy and wage growth continues to cool, they'll be the first to see their upper hand slip away.”
“The Latest In Litigation Hotness? Pure Pettiness.” (Dealbreaker). “Madison Square Garden Entertainment is in the midst of some shareholder litigation, in which plaintiffs allege the merger between MSGE and MSG Networks Inc. devalued the stock value to the benefit of MSGE CEO James L. Dolan and his family. But this securities case is the mere background over the real story, which is just how petty some parties can get. You see, Hal Weidenfeld, senior vice president for legal and business affairs at MSGE, sent a letter to the shareholders’ counsel banning them from all MSE venues — including Madison Square Garden, Radio City Music Hall, and the Chicago Theater — until the matter is resolved[.]”
