What we’re reading (8/12)
“The Definitive Guide To The All-Weather Portfolio” (Of Dollars and Data). A nice primer on Bridgewater Associate’s “all-weather” portfolio, so named to reflect the fund’s ambition to perform pretty well in a wide variety of market environments.There’s one nugget in here that is very relevant to our core investment thesis here at SPC: “Since asset prices are determined by market participants’ collective expectations about the future, the only thing that can cause a major shift in assets prices is something unexpected (i.e. a surprise).” The difference between SPC and Bwater is apparently that we actually want a portfolio heavily exposed to surprises, not one that is “indifferent” to them.
“Hertz Selling More New Shares That It Is Renting Cars” (Dealbreaker). “Don’t worry, day traders: Even though you’re already underwater on those new shares—which went for an average of $2 apiece—we’re sure that ‘significant and rapid and currently unanticipated improvement in business conditions’ will come around and save you, once Vladimir Putin’s untested and possibly fictitious coronavirus vaccine saves the world.”
“Uber CEO Says Its Service Will Probably Shut Down Temporarily In California If It’s Forced To Classify Drivers As Employees” (CNBC). Corporate blackmailing of the body politic, or a credible and objective run-down of the basic math for obtuse lawmakers? You be the judge. Uber CEO Dara Khosrowshahi says Uber may have to shut down for at least a bit in CA if a court doesn’t overturn a recent ruling requiring Uber to classify drivers as “employees.”
“A Look At Robinhood Traders’ Favorite Stocks” (Axios). A lot of stocks that our model says are absolute garbage on this list (looking at you, AAL and UAL). But there’s nothing silly about young traders (Robinhood’s cornered market) trading heavily in speculative names—”risk-on” strategies are arguably exactly what traders in their 20s/30s should be doing. There’s a lot of ballgame left before retirement.
“Morgan Stanely Boss Is Frequent Caller To SEC Chairman” (Financial Times). “When [S.E.C. chair] Jay Clayton takes calls from America’s top bankers, more often than not James Gorman of Morgan Stanley is on the line. The chairman of the Securities and Exchange Commission has had more private contacts with Mr Gorman, the Morgan Stanley chief executive, than the head of any other big Wall Street bank, according to the regulator’s public calendar.”
