What you should read today

Bitcoin, Steve Young, Trusting your financial advisor, and Jim Chanos on Tesla.

Chart of the Day

• Bitcoin was down 10% this morning before we in the U.S got out of bed. I am not in the business of picking tops, but the price action on this chart is unsustainable.

Good Reads

• Steve Young, the quarterback and private equity partner. From the article: Young turns out to be the rare ex-jock who’s actually good at private equity — doing original research to find takeover targets, learning how to model deals in Microsoft Excel, and helping to manage the companies after acquisition. [Bloomberg]
• Can you trust your financial adviser? From the article: A perfect illustration of this phenomenon occurred just before the financial collapse of 2008. Researchers conducting a study sent “mystery shoppers” into 284 Boston-area financial advisers. When clients walked in with the kind of low-cost, diversified portfolio independent experts recommend, only 2.4 percent of advisers approved of it and some 85 percent recommended making a change. Financial advisers were eight times more supportive if clients had a less-than-ideal strategy of chasing returns — one that was more likely to generate commissions. [Bloomberg].
• Softbank, the Japanese conglomerate, has purchased Boston Dynamics from Google. I included this because the videos Boston Dynamics put on youtube were incredible. [Techcrunch].

• Executive departures at Tesla are biggest since Valeant[video]. This according to Jim Chanos, the famous Enron short seller. I have heard Jim make this point multiple times. Executive departures are one of the red flags he looks for when researching short ideas. [Bloomberg].
  BTW-Executives are fleeing Uber at a record pace. If Uber was publicly traded, I believe it would be a prime target of short sellers like Jim Chanos.

How is the economy doing?

• U.S business loan growth is continuing to slow.

Source: WSJ Daily Shot

• Retail employment is off to a bad start in 2017.

Source: FiveThiryEight

Another Chart:

Source: Axios

• The components of growth in household net worth. Stocks seem to be a dominant factor.

• U.S companies international sales growth is outpacing growth in the homeland.

• This chart shows what funds are benefiting from inflows into international stocks. Fund flows are not a great timing tool, but I do watch for extremes. Extreme flows can be valuable clues, they can show what trades are getting crowded and which ones have been left for dead.

Have a great day,

Caleb