What we’re reading (9/2)
“U.S. Debt Is Set To Exceed Size Of The Economy For Year, A First Since World War II” (Wall Street Journal). “Policy makers have compared the fight against the coronavirus to a military war effort, and approved roughly $2.7 trillion in spending since March for testing and vaccine research, aid for hospitals and economic relief for businesses, households and state and local governments. Federal revenue fell 10% from April through July, compared with a year earlier, as fears of the virus and widespread business shutdowns brought economic activity to a standstill, and firms laid off millions of workers.”
“DraftKings Shares Pop 5% After Michael Jordan Joins Betting Company As Board Advisor” (CNBC). MJ—current chairman and owner of the Charlotte Hornets—is joining DraftKings as a special advisor to the board. Apparently he got equity in the deal. Per the DraftKings CEO: “Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur…[t]he strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team.”
“Why Buffett’s Bet On Japan Could Turn On Higher Inflation, Weakening Dollar” (Reuters). Surely, the Oracle of Omaha would never describe his investment strategy as a “global macro” strategy, but in some sense that’s exactly what his latest big trade looks like: “Berkshire Hathaway Inc's $6.2 billion (4.6 billion pounds) foray into Japan's five largest trading houses [conglomerates that own an extremely diverse range of businesses] may signal billionaire Warren Buffett's expectation that inflation and a falling U.S. dollar may make international equities more attractive when economies worldwide recover from the coronavirus pandemic.”
“Apple More Valuable Than The Entire FTSE 100” (BBC). New-world tech is in, old-world oil companies and banks are out. Obviously, AAPL had an absurdly good August. At the same time, according to the chief market analyst for Markets.com, “[t]he FTSE 100 is a dinosaur, full of rather lumbering old-world stocks with precious little growth to offer…[but it is also] a very good proxy for the global economy, which we know is on its knees.”
“Nerds Send Kodak Shares Back On Lift Hill Part Of The Roller Coaster” (Dealbreaker). “Whatever’s happened to Kodak shares over the past month-plus, one’s things very clear: None of them had anything to do with fundamentals. First it was rumor. Then it was Peter Navarro. All along, it was powered by day traders who know the name ‘Kodak,’ saw it was going up and gave into their crippling FOMO. Indeed, Kodak’s fundamentals remain exactly the same or worse today than they were before some self-serving and eventually untrue whispers about something that would ‘change the course of history for Rochester and the American people’ began to emanate from Kodak’s press office. And yet, Kodak shares nearly jumped back into the double digits yesterday. What gives?” Turns out hedge fund D.E. Shaw & Co. took a 5.2 percent stake in the company.
