Tune in on Thursday; Inflation report; Three more lessons; Trump Media Gets Aggressive With Regulators Over Delayed Merger; Elon Musk Lawyer Cites Twitter's Whistleblower Payment as New Reason to Drop $44 Billion Takeover; Tennis stories
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2) Stocks are tumbling today on a slightly higher than expected inflation report...
Expectations were that the year-over-year increase in the Consumer Price Index ("CPI") would be 8.1% and core CPI, which excludes often volatile energy and food prices, would be 6.1%, but the figures came in at 8.3% and 6.3%, respectively. Here's a Wall Street Journal article with further details: U.S. Inflation Remained High in August. Excerpt:
Inflation has recently shown signs of easing for some goods and services. Gasoline prices declined sharply in August. The national average price of regular gasoline was $3.71 a gallon on Tuesday, down 26% from the peak in June, according to OPIS, an energy-data and analytics provider owned by Dow Jones & Co., publisher of the Wall Street Journal.
"Consumers are getting relief at the pump and there should be further relief coming at the gasoline station and the grocery store, since one of the biggest costs of food is transporting it," said Ryan Sweet, senior director of economic research at Moody's Analytics.
Broad price pressures have proven resilient, causing the Federal Reserve to keep raising interest rates to fight inflation, said Kathy Bostjancic, chief U.S. economist at Oxford Economics.
"Inflationary dynamics are improving and moving in the right direction," she said. "But they're still running way too hot for comfort, either for individuals and businesses or the Federal Reserve."
I'm surprised the number wasn't lower, as extensive data and anecdotes show that inflation is falling fast. It makes me suspect that there's a lag effect in the data the Bureau of Labor Statistics is collecting...
It certainly underscores how hard it is to predict macro things like inflation and interest rates, which is why I focus nearly all of my attention on bottoms-up stock picking.
3) Picking up on where I left off in five prior e-mails about my recent presentation to two groups of high-net-worth investors... After outlining my investment philosophy and five big lessons, I shared three additional ones:
4) I don't know which is more ridiculous, this... Trump Media Gets Aggressive With Regulators Over Delayed Merger. Excerpt:
The upstart social media company backed by former President Donald J. Trump appears to be taking a more aggressive approach with regulators as it seeks approval for its delayed merger with a cash-rich shell company.
Trump Media & Technology Group issued a statement Thursday evening that said the Securities and Exchange Commission had "needlessly delayed its review" of the proposed merger with Digital World Acquisition Corporation, a special purpose acquisition company, or SPAC. Trump Media also said the SEC "needs to set aside any improper political considerations" and swiftly approve the merger.
Devin Nunes, the former Republican congressman and chief executive of Trump Media, added more criticism in a post on Truth Social, the company's flagship social media platform. In a post that linked to the company's statement, Mr. Nunes wrote: "No more BS!"
Or this: Elon Musk Lawyer Cites Twitter's Whistleblower Payment as New Reason to Drop $44 Billion Takeover. My friend's comments:
You can read the legal experts duke it out on this one, but in summary my take on it is a variant of theirs: You may remember this being spelled out already in Twitter's (TWTR) original complaint against Musk in early July. Twitter pointed out already at that time that Musk agreed in the April merger agreement – after having initially requested otherwise – that Twitter can hire and fire anyone as they please without having to obtain Musk's input.
Then, Musk complained publicly that Twitter had too many employees and that Twitter really ought to get rid of many of them. One could argue, and I think Twitter is arguing, that this public complaint itself put Musk in breach of the merger agreement, seeing as Musk agreed to apply his best efforts to close the deal, and abstain from criticizing the company.
Then, Twitter actually did let a tiny number of people go. Even though it had negotiated the right to do this without any consultation whatsoever with Musk, it asked to consult him anyway, in an extreme case of caution. Musk refused to even talk to Twitter about it!
It is now well beyond absurd that Musk, after having negotiated away all his rights on this subject, and refused to talk to Twitter voluntarily about it even though Twitter asked nicely, should claim injury based on a relatively standard single employee termination that Twitter made.
In any case, for Twitter to pay a senior executive a severance is totally normal, and $7 million as part of a $44 billion ticket is in any case immaterial even if the payment had been somehow abnormal. It is, as we say, to the right of the decimal point.
Another friend added: "I'm waiting for him to sue because, despite him violating terms of service, they didn't sufficiently censor his tweets."
5) After withdrawing $7,334 in profits and losing my various bets on the Boston Celtics to win the NBA championship, my accounts at the sports betting sites were empty, as they're no longer offering free money and/or special deals that, when they first launched, I exploited to the max.
But then I remembered that earlier this year, just for fun, I bet $50 each on 19-year-old phenom Carlos Alcaraz to win the French Open, Wimbledon, and the U.S. Open. Obviously, the first two didn't pay off, but I made a tidy profit on the last one Sunday...
As I was driving home yesterday with two of my teammates, we all made predictions about the match (when they weren't napping – see funny picture in yesterday's e-mail). Mine was that Alcaraz would win 7-6, 4-6, 6-4, 6-3 (the actual: 6-4, 2-6, 7-6, 6-3) – not bad!
My friend was getting coffee yesterday morning and snapped this picture of runner-up Casper Ruud, who was in line behind him!
Lastly, here's a funny story from my last match on Sunday. After Brendan and I met our opponents, I checked out their World Tennis Numbers (lower is better – you can look up anyone here) and it looked like we were going to have a cakewalk as they were 21.3 and 26.3 (Brendan and I are 18.0 and 17.1, respectively).
And then the match started and the 21.3 guy, Dylan Davis, started SMACKING balls. At the first changeover, I whispered to Brendan, "There's no way he's a 21.3. We really gotta target the other guy."
Fortunately, we did – and we both played out of our minds – so we cruised to a 6-3, 6-3 win – but there were some super points when Dylan, Brendan, and I were hitting to each other.
So why was Dylan misrated so much? Because when I re-checked the World Tennis website, it turns out that there are four guys with the same name, which I hadn't realized, so I'd pulled the rating for the wrong guy.
Here's the Dylan Davis we played – he was a 13.4, the highest-rated guy in the entire tournament!
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.