Happy Friday Everyone đ
Busy week at GRIT. We did a Bitcoin teach-in with a $5B money manager PLUS we spoke to the biggest VC investor of a $50B company weâve been waiting months to BUY⌠and FINALLY DID! Subscribe to our paid newsletter to find out which one!
FIVE things you need to know this week in 60 seconds. If youâre reading this but havenât subscribed, join our community of smart, fun & edgy investors đ
*as of 4pm ET, 7/8/21
1. MACROWhereâs the bitcoin volatility?
One of the biggest knocks on bitcoin has always been its HIGH volatility, but the past few weeks have given us a break from the madness. This finally gives institutional buyers a chance to really study bitcoin, understand its value as an asset, and evaluate how they could fit it into their portfolios.
A couple of days ago I spent an hour one-on-one with a $5B money manager teaching him about bitcoin. And I mean bitcoin 101, the very basics!
So when people say âitâs still too early for bitcoinâ that LITERALLY means itâs still too early for bitcoin.
GRITâS TAKE: During our call, I mentioned to him that although bitcoin isnât truly a currency yet, by market cap itâs actually the 16th biggest in the world. I also pointed out that bitcoin (and ethereum for that matter) is one of the most liquid assets in the world. Even more so than Apple, Amazon, Microsoft, and Facebook.
2. DEALS & IPOsPutting lipstick on a pig
Aeropostale, Forever 21, Nautica, Juicy Couture, JCPenney, Brooks Brothers, Lucky Brand Dungarees, Barneys, Eddie Bauer. What do all of these have in common?
They were all once iconic brands (seriously if you were a pop-star in the early 2000s and there arenât paparazzi pictures of you wearing a Juicy Couture tracksuit were you even a pop-star in the early 2000s?) that went defunct somewhere along the way.
Theyâre also all now thriving under Authentic Brandsâ leadership, which has rehabilitated over 30 iconic brands since opening in 2010.
The brand management company was most recently valued at $4B in 2019 by Blackrock, but more recent reports estimate the company is worth ~$10B. On Tuesday, they filed their S-1 for an IPO.
GRITâS TAKE: The business model: take iconic retailers whose better days are presumably behind them, slap some lipstick on them, and license the intellectual property (IP) to other firms, collecting 4-6% royalties in the process. Rinse, repeat, compound!
3. STOCK MARKETJ-Pow & Co. are inching towards tapering
The minutes from the FOMCâs June meeting didnât tell us too much, other than we might see tapering a tad sooner than expected.
The FED is not going to stop pouring $120B into Treasury and mortgage securities every month, but it seems like some officials are starting to come around to the idea that inflation may not be as transitory as J-Pow would have us believe.
GRITâS TAKE: JOLTs data showed 9.2M job openings in May, but 3.6M employees also quit (2.5%). Remember last week we mentioned how the shortage of truck drivers was putting upward pressure on gas prices? Nearly 860k of those 3.6M were from trade, transportation, and utilities.
The problem remains: ironically, job openings and unemployment are simultaneously up. That should change soon with the combination of unemployment benefits ending in September, and employers countrywide boosting compensation to lure workers.
4. COMMODITIESI found the bitcoin volatility, itâs in OIL
This week, OPECâs talks crumbled and ended in the equivalent of a 2am McDonaldâs brawl. Meanwhile, oil prices seem to have absorbed the missing bitcoin volatility with prices making a 6-year high before coming crashing down after the Cartelâs kerfuffle.
Whatâs the hold-up?
The United Arab Emirates (UAE) wants to produce more oil because theyâve spent billions into boosting production capacity and Saudi Arabiaâs new quotas donât allow them to make full use of those expenditures.
This places the oil market stuck firmly in âno manâs land.â
GRITâS TAKE:Â One of the Biden administrationâs biggest policy goals is combatting climate change by reducing oil and gas production to reduce fossil fuels emissions.
Know what a bigger goal is? NOT having the middle-class upset at you over sky-high gas prices at the pump! The White House has urged OPEC to reopen the taps and boost production in an effort to contain rising prices.
5. ENTERTAINMENTHow to get rich in the stock market: join Congress
Forget immigration reform, affordable health care, civil rights, and climate change, the Pelosis need to open a family office!
This week, Nancy Pelosi disclosed that her husband, Paul, scored big tendies after exercising some Alphabet call options, which were purchased just a week before Congress advanced 6 antitrust bills (of which Alphabet was a target). Shares then increased 3.2% on the decision. Hmmm đ¤
Pelosi also made another big (suspiciously timed) bet in May on Amazon call options expiring in June 2022.
And what do you know? It just so happens that this week the Department of Defense canceled their $10B JEDI cloud-services contract with Microsoft in favor of a âsplit-dealâ that would include both Microsoft and, you guessed it, Amazon! Double hmmm đ¤đ¤
GRITâS TAKE:Â Saying that the Pelosis should start a family office was only a half-joke. Their average return from stocks and options over the last year is 56.15% compared to the S&Pâs meteoric 36%.
Below are all their moves, which look more like a Robinhood HODLerâs and less like a member of Congressâ. YOLO indeed, Madame Speaker!
UNDER THE RADAR...
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*SOURCES
1. Kaiko, Bloomberg, CoinShares
2. Bloomberg, Business Insider
3. Business Insider, WSJ
4. WSJ, Bloomberg
5. Zerohedge. Bloomberg, UnusualWhales
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