Berna Barshay's daily starts next week; If I were czar...; 'The Managers of These Companies Are Corporate Sociopaths'; Akazoo; A kind note from a reader
1) I've been so impressed with my new colleague Berna Barshay's experience and insights that I've asked her to create a new daily newsletter, which will launch next week.
It will arrive after the market close every weekday, and you'll automatically receive it. Nothing will change regarding my newsletter, other than the name – going forward, it will simply be Whitney Tilson's Daily (Berna's newsletter will assume the name Empire Financial Daily).
Just as I do already, Berna will, in 100% her own voice, comment on the most important and relevant topics of the day – including stocks she's looking at, articles of interest, and updates on upcoming events. And she too will try to be provocative and let her personality shine. Heaven forbid either of us be yet another boring market report!
2) Roughly one in six Americans have lost their job and, as a result, many will soon start missing payments to various lenders.
If I were czar, one of the many things I'd do is prevent banks and other consumer lenders (mortgages, credit cards, student and auto loans, etc.) from profiting from the economic hardship of tens of millions of folks. Specifically, starting retroactive to March 1 and extending at least through June if not the end of the year, I'd ban all financial fees and penalties, and limit annual interest rates on any new debt added to existing accounts to 5%.
Why Congress and the Trump administration haven't agreed on legislation along these lines is beyond me. Maybe some states could do it – like California and New York...
3) Here's a nice profile of my friend and former student, Gabriel Grego of Quintessential Capital Management. 'The Managers of These Companies Are Corporate Sociopaths.' Excerpt:
The denouement was worthy of a TV crime series.
With blue lights flashing, Italy's Guardia di Finanza piled out of their Alfa Romeo squad cars on the outskirts of Bologna and stormed the campus of Bio-On. Pistol-toting agents rushed the offices of the bioplastics company, seizing files and documents. Stunned office workers looked on.
Across the Atlantic, Gabriel Grego breathed a sigh of relief upon hearing the news. As managing partner of New York-based Quintessential Capital Management, the Italian native had become a target of lawyers, media, and internet trolls since posting research months earlier accusing Bio-On of accounting fraud and lying to investors. He was wagering big-time that the stock would tank.
Much of the Italian press at the time rallied around Bio-On. Grego's wife, Maya, was hit with obscene Facebook messages. Bio-On chief executive and chairman Marco Astorri filed a police complaint for defamation against him and then a criminal one alleging market manipulation and insider trading.
"I didn't sleep properly for three months," says Grego, decked out in a striped, blue Brioni suit, well-weathered Rolex watch, white shirt, and tie in a conference room in the Flatiron district of Manhattan. "The guy kept lying."
"I was probably seen as the bad guy by 60% of them," Grego adds, with the slight lilt of an Italian accent. "Until you are proven right, you are the magnet of evil. Then when the fraud is proven it's, 'Thank you, thank you, thank you.'"
Today, Grego stands vindicated. Astorri was arrested on orders of a Bologna judge on the same day as the raid, October 23. Trading in shares of Bio-On was suspended.
4) Gabriel exposed yet another likely fraud on Monday, music streaming company Akazoo (SONG), and the stock is down more than 40% since last Friday's close. You can read his report here:
5) I've been getting many nice e-mails like this one from Polly F.:
I am a lifetime charter member of Empire Financial Research and a Stansberry Alliance member.
At first, I was not a big fan of you... lost $ on Lumber Liquidators, lost interest and didn't pay attention for a while.
However, now my trust and belief in you is growing by the day, on numerous levels.
The past few weeks have shown me who you truly are ==> one awesome human being and one awesome American!
Your volunteer work to help erect the field hospital in Central Park, your carloads of food donations to the healthcare workers of NYC, your recent hire of a woman (woohoo!), your sharing of communications with your broad network of relevant professionals and now your initial rebuttal to Porter's 4/17 article... all are making me one huge fan of you!
I also respect your athleticism and the crazy competitions you train for and participate in... what grit and determination!
On the investment side, really liked your perspective on autonomous and electric vehicles, so have invested in all you have recommended that sells on a US stock exchange.
Had I jumped on your recommendations at the end of March, would have benefitted significantly, but unfortunately missed out.
I will be paying closer attention going forward.
Please keep all this up... America needs more like you!
Thank you, Polly!
Best regards,
Whitney
This newsletter has been updated to remove a link to a report published by Hindenburg Research.