Cannabis and EV/AV sectors; My $200,000 Sushi Dinner; Bank stocks are ripping; The Journalist and the Pharma Bro; Playing tennis with the No. 327 player in the world

1) Picking up where I left off in Friday's and yesterday's e-mails on why I think buying bitcoin and other cryptocurrencies is nothing more than speculation...

My best advice is not to speculate at all. But if you're going to do it with a small part of your portfolio, I'd suggest considering the cannabis or electric/autonomous vehicle ("EV" and "AV") sectors, where there are at least real companies with real products and revenues.

For guidance on the former, I highly recommend the Cannabis Capitalist newsletter from my friend Tom Carroll over at Stansberry Research.

Tom spent nearly two decades as an analyst and managing director at Legg Mason and Stifel Financial. With his deep knowledge of the health care market, he's the one to turn to for analysis of the cannabis industry and for finding the winning stocks in it.

You can learn more about Cannabis Capitalist right here.

As for EVs and AVs, earlier this year, I put together this video on why I'm so bullish on the sector. It's gotten an extraordinary response.

2) I got a kick out of this story: My $200,000 Sushi Dinner. Excerpt:

The hell year that is 2020 has wreaked havoc on life as we know it. But you know what it's been good for? Bitcoin.

The cryptocurrency has been soaring, hitting a high of over $20,000 per coin this week. There is now more than $350 billion worth of Bitcoin in the world, an incredible appreciation for a virtual money that was worth basically nothing a decade ago.

It's a great time to be a longtime owner of the currency, and a painful time to be a person who once spent 10.354 Bitcoin (including tip) on a dinner for strangers. Yes, that person is me.

Back in May 2013, I spent in one night what would be worth approximately $200,000 today on raw fish and shrimp tempura rolls for people I had just met...

Indeed, I wondered: Had I just cheated this restaurateur?

Fast forward to 2020. This month, with Bitcoin surging, I called Yung Chen to check in. He and his wife retired from the restaurant business a few years back, tired of the long hours, he said. They were able to thanks in part to their cryptocurrency earnings of about 41 Bitcoin in total.

3) For the last couple of months, my friend Doug Kass of Seabreeze Partners and I have been pounding the table on bank stocks, which have been ripping higher lately... They did so again yesterday after this news broke on Friday: Fed allows banks to resume share buybacks.

I haven't sold any of my financials, but Doug used the recent strength to trim his exposure to the sector "from very large- to medium-sized," as he explained in this missive:

For the first time in almost a year, I am scaling back some of my bank stock holdings now.
 
Though a bit unexpected (from the standpoint of timing), the buyback news after the market's close likely marks a near-term top in the shares of the major money center banks, which have gotten extended and overbought.
 
Given my sour market view and assessing the sector's near term (three to six month) reward versus risk, the move from November, culminating in yesterday's move higher, has produced a less attractive upside versus downside.

I remain enamored with the intermediate to longer term outlook for bank stocks, but I am taking my XLF, BAC, C, WFC and JPM holdings from very large- to medium-sized now.

This move is a bet that I will be able to add back to my bank holdings at lower prices than the stocks are now trading in the after hours.

4) One of the reasons I rarely read fiction is that the real world is filled with wild stories that no one could make up – like this one...

Longtime readers may recall my July 24, 2019 e-mail, in which I told the story of when notorious "Pharma Bro" Martin Shkreli tried to stiff me. I made sure he didn't get away with it – but he appears to have duped someone else over the past few years, as this article documents: The Journalist and the Pharma Bro. Excerpt:

Almost every weekday for six years, Christie Smythe took the F train from Park Slope downtown to her desk at Brooklyn's federal court, in a pressroom hidden on the far side of a snack bar. Smythe, who covered white-collar crime for Bloomberg News, wore mostly black and gray, and usually skipped makeup. She and her husband, who worked in finance, spent their free time cooking, walking Smythe's rescue dog, and going on literary pub crawls. "We had the perfect little Brooklyn life," Smythe says.

Then she chucked it all.

Over the course of nine months, beginning in July 2018, Smythe quit her job, moved out of the apartment, and divorced her husband. What could cause the sensible Smythe to turn her life upside down? She fell in love with a defendant whose case she not only covered, but broke the news of his arrest. It was a scoop that ignited the Internet, because her love interest, now life partner, is not just any defendant, but Martin Shkreli: the so-called "Pharma Bro" and online provocateur, who increased the price of a lifesaving drug by 5,000 percent overnight and made headlines for buying a one-off Wu-Tang Clan album for a reported $2 million. Shkreli, convicted of fraud in 2017, is now serving seven years in prison.

"I fell down the rabbit hole," Smythe tells me, sitting in her bright basement apartment in Harlem, speaking publicly about her romance with Shkreli for the first time. The relationship has made her completely rethink her earlier work covering the courts, and as she looks back on all of the little decisions she made that caused this giant break in her life, she says she has no regrets: "I'm happy here. I feel like I have purpose."

This story has spread like wildfire, as this USA Today article notes: Martin Shkreli wishes 'best of luck' to former reporter who left her job, husband for him.

I feel badly for Ms. Smythe, who's clearly been conned by a master con man. I hope she realizes it and breaks the hold Shkreli appears to have on her before her life is further ruined.

5) Last weekend, I played tennis for the first time with Matija Pecotić, who works as an analyst for my colleague Enrique Abeyta, writing up investment ideas for our Empire Elite Trader, Empire Elite Growth, and Empire SPAC Investor newsletters.

Like our colleague Berna Barshay, Matija is a graduate of both Princeton and Harvard Business School – but very much unlike Berna, he's currently ranked No. 327 in the world in singles!

We rallied a bit and then played a 10-point tiebreaker. I put up a good fight, but he eventually squeaked out a 10-8 victory.

That score does not, however, reflect our relative abilities! If he wanted, he would win 100 consecutive points – trust me, I'm not exaggerating! But he was kind, took a lot off his shots, and we had fun. What a treat even being on the court with someone of his level!

Here's a picture of us...

You'll never guess who he hit with two days prior to hitting with me: the world's No. 1-ranked Novak Djokovic (in Belgrade, just before he flew to New York). And the week before that, he was in Mallorca, hitting with the world No. 2-ranked Rafael Nadal.

From Nadal to Djokovic to Tilson – that cracks me up!

Best regards,

Whitney