Good Morning! In a bizarre turn of events, Twitter and Elon Musk met yesterday and a sale to Elon could be finalized as soon as this week. Musk spent the rest of his weekend clapping back at Bill Gates for shorting Tesla and posted a NSFW tweet, which amassed 1.1 million likes. Median monthly mortgage payments are wylin' too, and hit an all-time high of $2,318, up 38% from last year. Your piggy bank won't make a dent in a home purchase any time soon. The average worker is not just worried about home prices, but their health as well. Microsoft's 2022 Work Trend Index found that employees are prioritizing health over work, with Latinos in particular (2/3rds compared to the 55% general US average) saying that their well-being is more important than going into an office.
As promised, please find the latest results of the Wall Street compensation survey here.
CEO of Melvin Capital, Gabe Plotkin, is back to the drawing board after announcing a plan to restructure the firm just a few days ago. In a note to investors on Sunday he said, "I am sorry. I got this one wrong. I made a mistake. I apologize. In hindsight, despite our intentions, we recognize now that we focused on future returns and team continuity without sufficient consideration of your investment losses."
The fund, I'm sure you remember, suffered an embarrassing 52% drawdown in the spotlight thanks to Reddit traders leading a short squeeze (ayyy) against GameStop in Jan 2021. In an attempt to correct the course, Plotkin announced an "unheard-of maneuver" involving cutting the fund's payout by 40%, but still requiring any diamond hands investors to pay performance fees again. Bold move considering they're still underwater.
His investors are outraged and confused, and rightfully so. They have lost a ton of money, and have no idea what is going on. One investor told the New York Post the email was "f***ing wacky," and said, "I just want my money back."
The fund was down 21% in Q1 2022, and according to reports, hopes to continue as a small shop (under $5 billion AUM). The strategy will continue to focus on shorting stocks, so meme-stock millionaires, get ready to unite again.
Short Squeez Takeaway: Gabe Plotkin, Bill Hwang, and Bill Ackman are really out here competing for Wall Street Bets all-time degenerate. Plotkin takes the gold medal for the ultimate disregard for his investors though. (Imagine asking investors to pay performance fees for making them whole) Something tells us this is also not the end of Plotkin's bag of tricks. You can read his full letter to investors here.
It's a hat trick as equities were lower Friday making that the third week of declines. Higher bond yields are still on everyone's minds it seems, even though earnings season shows more than 78% of companies that have reported have beaten estimates for profits.
Movers & Shakers
With inflation reaching a 40-year high, investors are looking toward real assets to help safeguard their portfolio. Many are turning to farmland.
Farmland, a recently accessible asset class through platforms like FarmTogether, has consistently provided returns more than double the inflation rate since before 1992; this is due to the fact that farmland’s value is underpinned by its critical role in the global economy: the country’s growing population needs to eat.
…This makes farmland well-positioned to maintain its value over time – no matter the economic condition.
As the supply of arable land in the United States shrinks each year, high-quality farmland should only become that much more valuable in the long run.
Interested in adding farmland to your portfolio?
Invest today with as little as $15k.
Our personal experience is key to who we are and what we do. We judge others by their experience and are judged by ours. Society venerates experience. From doctors to teachers to managers to presidents, the more experience the better. It's not surprising then, that we often fall back on experience when making decisions, an easy way to make judgements about the future, a constant teacher that provides clear lessons. Yet, this intuitive reliance on experience is misplaced.
In The Myth of Experience, behavioral scientists Emre Soyer and Robin Hogarth take a transformative look at experience and the many ways it deceives and misleads us. From distorting the past to limiting creativity to reducing happiness, experience can cause misperceptions and then reinforce them without our awareness. Instead, the authors argue for a nuanced approach, where a healthy skepticism toward the lessons of experience results in more reliable decisions and sustainable growth.
Soyer and Hogarth illustrate the flaws of experience -- with real-life examples from bloodletting to personal computers to pandemics -- and distill cutting-edge research as a guide to decision-making, as well as provide the remedies needed to improve our judgments and choices in the workplace and beyond.
“Experience is a great teacher . . . except when it isn't.”
US PE clean tech deal count, 2011-2021
Have you ever ended up agreeing to something that you felt really wasn’t the best idea?
It’s quite common, and has a name – it’s called the Abilene Paradox, from Jerry B. Harvey’s 1974 article The Abilene Paradox: The Management of Agreement.
In his article, Harvey recounts a story about a family that decided to drive 53 miles for dinner, during which they were uncomfortable, unsuitable, and ultimately unsatisfied. Everyone agreed to go even though they privately preferred to stay at home, since they believed that the others wanted to go. The truth came out after they returned and "the group sat in confusion, not understanding why they all decided to take a trip they didn't want."
Our mistaken belief that our views are in the minority often leads us to refrain from sharing our opinions. Our feelings of being the only voice that says "no" grow uncomfortable when we discover that the group consensus is "yes".
Excel & PowerPoint shortcuts will be sent on 5/16/22 at 6am ET.