I nailed it on the day the market bottomed; What to do with your money now; 'EBITDAC is the new EBITDA'; Facebook and Tesla earnings; Two secular New Yorkers visited the Samaritan's Purse field hospital. One volunteered, one was arrested

1) As I wrote almost daily in my e-mails in March, I was buying aggressively as the market tumbled.

And the very day the market bottomed, on March 23 (a mere five and a half weeks ago – though it seems like a lifetime!), I wrote:

We've come to the firm conclusion that this is the absolute best time to be an investor in more than a decade. To borrow a phrase from one of my friends, "we're trembling with greed" right now.

There are five main reasons why. I've been covering the first one for the past few weeks already...

My in-depth analysis – most importantly, studying how China, Japan, South Korea, Taiwan, Hong Kong, and Singapore have managed to beat the coronavirus – tells us that we too are likely to stop the rapid spread of the virus much sooner than investors are anticipating.

I'm optimistic that the measures we started taking a couple of weeks ago – and especially the stronger measures in the past week – are working. When we look back months from now, we'll see that the number of newly infected people across the U.S. has already slowed down dramatically and will soon plateau and then start dropping, as the latest measures kick in – exactly along the lines of what happened in China two months ago.

But I believe that the expectations built into stock prices today are that the virus will keep spreading at a high rate for another one or two months at least, and that hundreds of thousands of Americans die from it this year.

If this doomsday scenario doesn't come to pass, stocks will likely go nuts.

I was exactly right – both on the pandemic and the market – as the S&P 500 Index is up a stunning 34.1% as of yesterday's close since its intraday low on March 23 (it now sits a mere 13.4% below its all-time intraday high in February).

After such a huge rally, I'm getting the question frequently about what to do now.

My short answers are: with your long-term money, nothing... But with your trading account, you might want to trim a bit to generate some "dry powder" to take advantage of the volatility I expect in the markets in the next few months. That's what I'm doing with my personal savings.

I'll be writing more about this in coming days, so stay tuned...

2) As earnings season kicks off in full force, this cracked me up: "EBITDAC is the new EBITDA"...

3) Social media giant Facebook (FB) reported strong earnings last night.

Along with Alphabet (GOOGL) and two others, the company is an anchor stock in multiple Empire Financial Research portfolios. Facebook boasted excellent growth in active users and average revenue per user across all geographies, leading its stock to solid gains today. Here's a quick take by my friend and former student Angelo Martorell of Martorell Capital Partners:

Facebook crushed it, with 19% constant-currency revenue growth.

What's interesting is that they said March was very weak (revenue decline), but April is stabilizing (flat year over year). This means that maybe FB grew 30% in January and February and then was down 3-5% in March, resulting in 19% growth. The fact that FB was growing 30% is huge.

Users ("monthly active people," including Facebook, Instagram, Messenger and/or WhatsApp) are now up to 3 billion, up 11.2% year over year – that’s an insane number!

Monetization of WhatsApp seems to come closer.

Even Oculus grew at 80% and they wish they could make them faster!

Not a secret that FB is trying to own the WhatsApp of India.

We'll have a full update in our upcoming newsletters... but in short, we like the company more than ever.

4) My friend and former partner Glenn Tongue shared his take with me on Tesla's (TSLA) earnings:

Tesla announced Q1 2020 earnings last night and, as usual, both bulls and bears saw what they wanted... After hours, the bulls were in control, as the stock rose approximately 10%.

The headline number of $16 million of net income beat estimates, which delighted bulls while bears pointed out this beat was simply a result of booking $350 million in regulatory credits and, without this one time item, the company would have missed earnings badly. In other words, nothing new in Tesla world!

Personally, I'm not impressed. The conference call was a rambling gibberish session filled with CEO Elon Musk's prognostications, similar to what we've seen in recent calls. For example, about a year ago he forecasted a million robotaxis in a year. It took one year for that target to be pushed out one year. In other words, zero timeline progress – but never a shortage of promises of a bright future. These comments were interspersed with expletive filled commentary regarding shelter in place, which Musk likened to "fascism." Is this a prelude to moving production offshore? Time will tell...

Interestingly, the company filed its 10-Q this morning, which it easily could have done before the conference call. The likely reason it didn't is the disclosures raise questions that the company preferred to avoid during the earnings call. There will be plenty to analyze, but in one of my favorite disclosures, cash balances ended the quarter at $8.1 billion. It doesn't take a math major to recognize this is entirely inconsistent with reported interest income of $10 million in the quarter. These inconsistencies continue to be glossed over by both the company and its sycophants (I mean "analysts").

I fully expect that the company filed the 10-Q as preamble to an imminent capital raise that it consistently insists isn't needed (until the moment of the announcement).

My bottom line: the company is minimally profitable despite extremely aggressive accounting. Though perceived (and priced) as a growth company, it's showing anemic growth at best, as you can see in the upper left in the chart below. The solar roof business is so small it's not worth discussing. Important employees continue to leave the company in droves (the deputy general counsel just departed – I believe that makes four in the last two years). And the market valuation of nearly $160 billion is totally disconnected from the economic reality of the business, so buyer beware!

That said, the Cult of Musk is strong, so I'd also add short seller beware!

P.S. This chart posted on Twitter by TeslaCharts sums up Tesla's numbers nicely:

5) This was a nice article. As a former hedge-fund manager, it's rare that I'm the good guy – LOL! Two secular New Yorkers visited the Samaritan's Purse field hospital. One volunteered, one was arrested. Excerpt:

Within a week after the evangelical organization opened its emergency field hospital – usually deployed to war-torn cities like Mosul, Iraq – in Manhattan's Central Park, it had attracted two locals who each made their own splash.

Whitney Tilson, a retired hedge-fund manager who publishes an investment newsletter, was walking his dog with his wife, Susan, in late March when they noticed tents being set up on the park's East Meadow across the street from their Upper East Side apartment building. A friend told Tilson about the Christian relief organization behind the effort and encouraged him to get involved.

Tilson did just that, spending the next eight days there helping to prepare the site for its operations. The 68-bed pop-up facility started taking overflow COVID-19 patients from Mount Sinai Hospital four days after the build started. Tilson made regular trips to Costco for food and drinks, spending about $2,000 each trip.

"I buy these bottles of Starbucks frappuccino, you know, Diet Coke, regular Coke, Pepsi – things with caffeine so when they're working the night shift and they're tired, caring for patients, I want them to come in and have a pick-me-up," Tilson said.

On April 5, Billy Talen hopped a police barricade and walked across the East Meadow in a pink suit and clerical collar. He planted a small rainbow flag near the perimeter of the field hospital, shouting, "Get out of New York. We don't want your racism here."

He was promptly forced to the ground by two NYPD officers and arrested.

Best regards,

Whitney