I feel like I'm taking crazy pills

Quick Hits From Grit

Happy Friday Everyone đź‘‹

FIVE things you need to know this week in 60 seconds. If you’re reading this but haven’t subscribed, join our community of +27k smart, fun & edgy investors 👇

*as of 4pm ET, 5/13/21
1. MACRO

I feel like I’m taking crazy pills!

On Tuesday, legendary investor Stanley Druckenmiller called out J-Pow and the echo chamber of loose policy. He said their strategy was “out of step” with current conditions and endangering the U.S. dollar.

But the Fed continues to insist that shortages are temporary. They truly BELIEVE that these inflationary forces are transitory! Meanwhile, we’re all hunkered down and buying stuff while production and services fall to the wayside and prices rise persistently.

GRIT’S TAKE: CPI rose 4.2% YoY (sharpest increase since 2008), 5-yr inflation outlook now highest since 2016. Let’s play a game of “which YTD hasn’t worked"?

2. DEALS

Heavy lies the (SPAC) crown

SPACs have lost their luster, down to levels we haven’t seen since December. Right now, almost 90% of pre-deal SPACs are trading below $10.

SPAC “king” Chamath Palihapitiya is DEFINITELY not having a good time. His pre-deals aren’t doing so hot YTD: IPOD (-23.68%), IPOE (+23.36%), and IPOF (-19.07%). His other babies are getting dragged through the mud as well: CLOV (-50.16%), SPCE (-30.72%), and OPEN (-36.78%).

GRIT’S TAKE: In fairness to SPACs, the entire market has been getting hit hard lately. BUT I did warn in this video from March 16th 2021 to be careful on this “over-celebrity-heated” asset class!

3. STOCK MARKET

Guess who’s back, back again ? The VIX is back, tell a friend…

The entire market got hammered this week, but one look at the VIX and you’d think they had a great earnings call (lol!). The Fear Index is back to mid-March levels on inflation concerns as money rotates out of growth and hedge funds take risk off the table!

GRIT’S TAKE: Mega caps like Amazon and Apple grew earnings last quarter by +300% and +200%, respectively, compared to last year but even they can’t outrun this little thing called the 10-year yield.

4. COMMODITIES

Gas is the new toilet paper

The Coastal Pipeline came back online Wednesday afternoon after coughing up $5M in ransom money paid in crypto.

And DO NOT even get me started on the acts of digital terrorism Elon Musk has committed against BITCOIN over the last 48 hours.

The cordial hackers apologized (sort of) for the inconvenience that left nearly 70% of gas stations in N.C. dry, but not before crude spiked to $66/barrel. That’s the highest since early March.

The jump to $3 a gallon has people hyper-hoarding like the genius above. Don’t be that guy!

GRIT’S TAKE: Oil went on a 4-day gain that was snapped Wednesday on broader markets puking. BUT, inventories are trending lower on rising demand from the re-opening the economy expectations.

5. ENTERTAINMENT

The Roblox flywheel is SPINNING!

Some lighter news to take you into the weekend. Roblox missed earnings, but the numbers beneath the surface show that the flywheel is spinning! They nearly 4x their cash from operating activities YoY to $164.5M, increased daily active users (DAUs) by 79%, increased bookings per DAU by 46%, and hours engaged nearly DOUBLED!

GRIT’S TAKE: Do YOU think kids give a $#!@ about inflation? Not only are they still playing inside (see hours engaged), now they’re using NFTs to decorate their metaverse games!


UNDER THE RADAR...

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SOURCES:
1. CNBC
2. BloombergTheStreet
3. Seeking Alpha
4. Fox BusinessAxios
5. Venture Beat