🗞️ The Wrap: Designated Survivor
We tune in to what Doc Burry has to say about the state of the markets, look into a quirky characteristic of the world’s biggest ETF and see which stocks are on the move. For the long time readers, we have one of the trickiest Trader Teasers yet.
5 stocks stocks DR Burry is buying
Designated Survivors
According to Bloomberg, the fate of the world’s largest ETF lays in the lives of 11 American millennials. Early ETFs were set up as unit investment trusts, which means they have a termination date when the fund simply ceases to exist.
One of those is SPY (nickname “Spider”) the ETF that tracks the S&P500 and largest ETF in the world. The Spiders trades ~$20BN of value per day — nearly double the amount traded in Apple stock each day.
In the case of SPY, its expiry date if the later of January 22, 2118 or 20 years after the death of the last of 11 particular individuals. There are 3 other ETFs that are also tied to the lifespan of particular people.
Insto volume
Dr Michael Burry, the genius heavy metal drummer from The Big Short, made billions by speculating on the bursting of the US housing bubble. And he’s at it again. In a recent set of comments, Burry called passive investing a “bubble”.
According to Burry, passive funds, with US$4.3t funds under management, are overweight larger stocks, which by virtue of this forced institutional buying are now overvalued. On the flip-side, he believes great small cap stocks are being overlooked.
At least his money where his mouth is….he has a very public and sizeable position in GameStop as well as several other companies he has deemed undervalued. We listed these above if you’re looking to follow the Doc.
And now…..Some data from us. Not one doctorate in the office.
Recent 52 week highs
- Sonic Automotive (SAH) +17.5% in the last week
- Sears (SHOS) +12.9%
- Ardelyx (ARDX) +21.8%
- ACADIA Pharma (ACAD) +65.9%
- Autonation (AN) +8.4%
Most up this week
- Mallinckrodt (MNK) +84.76% in the last week
- ACADIA Pharma (ACAD) +65.9%
- Dean Foods Company (DF) +35.9%
- YRC Worldwide (YRCW) +34.11
- Endo International (ENDP) +30.29%
What we’re reading | Billion Dollar Whale
Half the office has read this one now. And it all started with a recommendation from a customer, Peter from HK!
Get ready for this story to hit theatres because there is now way paragraphs can do it justice.
BDW is the story of a Jho Low, a young graduate of Wharton, who through some serious networking was able to arrange the formation 1MDB, a Malaysian sovereign fund — which is meant to be invested for the benefit of the Malaysian people.
However, by finding his way to the Middle East elites, Hollywood A lister and then bringing Goldman Sachs into the mix, Jho Low was able to raise close to $5BN that never actually got invested …unless you consider buying boats, chartering planes and paying B grade rappers to perform for you an investment….
Ultimately the money raised in the fund was used to fund his lifestyle…..out of control parties in Vegas, flying Leonardo Di Caprio and friends to Sydney for a few hours, buying apartments in Belgravia, London and sending Miranda Kerr a piano. Ironically, even the movie the Wolf of Wall Street was produced with the funds.
The whole story is just insane. You won’t put this book down while you shake your head alarmed at how brazen it was and how far up the chain it all went. Our take….must read!
If you like the sound of this story, find the book here.
Trader teaser
4, 18, ?, 100, 180, 294, 448. Find the missing number in the series?
First 3 to reply with the correct response get a 50% FX rebate on their next AUD to USD funding.
Best buy | Ardelyx (ARDX) +36.9%
$ARDX is our first back-to-back best buy champion! Returning to this section, one trader endured 3 price drops to ride this stock to a 33% gain in a few weeks.
