Tremendous

An angel investor's take on life and business

  • Why I just invested in eyerate, the best online review tool

    If you run a retail business, you know what a royal pain online review sites can be. Get one unreasonable customer, and all of a sudden their bad day is turned into your business nightmare. An angry one star screed torpedoes your average and you’re left to rebuild, bit by bit.

    But what if you could capture ten times as many positive reviews from your happiest customers, cheaply and easily? And at the same time, you could motivate your employees to give the best service ever?

    Well, you can. EyeRate, an innovative software startup from the Sacramento area, has created an incredible tool that both generates awesome reviews and motivates employees.

    Here’s how it works:

    1) Customer gets a haircut (or any other service).

    2) Afterward, the customer gets a text message “You just saw Sarah. How was your experience? Rate us 1-5.” (Customer info pulls from the POS, so no need to enter anything.)

    3) Customer texts back 5.

    4) Customer is automatically prompted to post the review to Google, and does so with a single click.

    5) Sarah gets a cash reward (usually $5-10 each time), which is automatically processed by EyeRate. The business owner doesn’t have to do anything.

    By prompting happy customers to review you, EyeRate generates an average 10x increase in positive reviews for its clients. If a customer rates you less than a 4, the customer has the option to post OR share their feedback privately with the business owner and the message is forwarded to leadership to followup.

    Where would you rather spend your scarce marketing dollars: expensive Google or Facebook ads with questionable usefulness? Or motivating your employees to provide great service and capture the awesome reviews, building your brand online and making your foot traffic skyrocket?

    95% of consumers check online reviews before deciding which store to go to. Online reviews are also critical to your position in Google search. This is the where you will make or break your business.

    I just invested in EyeRate, and the company is growing at warp speed for a reason: it produces reliable, massive increases in revenue for its customers that far exceed its modest monthly fee. Competitors like Podium and BirdEye can prompt a customer for a review and aggregate the data, but they can’t handle payments to employees, which is how you motivate them to give great service and ask for reviews.

    Check out EyeRate today, before your competition does!

    More on tech:

    ONE OF THE HOTTEST TECH STARTUPS IN THE WORLD CALLS HOBOKEN HOME

    WHY I JUST INVESTED IN GAUGE, THE BEST WAY TO SELL YOUR CAR

    KEY METRICS FOR STARTUPS: CONSUMER VS. ENTERPRISE SAAS

    Photo: “Symbols – Daytime, Barber Pole – Trinity Barber Shop, Storefront next to a Walton’s Restaurant, Other Stores, Pedestrians on Sidewalk” by MIT-Libraries is licensed under CC BY-NC 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • Dunkin Donuts: The Definitive Top 3

    Where I live in Northern New Jersey, Dunkin Donuts is an institution on par with the Giants or the Catholic Church. And since I’m willing to accept even the hardest jobs in the service of you, my readers, I decided it was time to clear something up.

    What are the best donuts at Dunkin Donuts?

    I conducted an extensive research program at my local shop. And I’m happy to announce I’ve identified the definitive top 3:

    Number 3: Apple Crumb Donut

    Gooey apple jam gushes out of this pillow of sugar as you bite into it. Not quite sure what the crumbs are, but they’re a great texture contrast. Don’t ask any questions. Just eat it.

    Number 2: Old Fashioned Donut

    I used to think it was boring. No. Classic. Its simplicity and straightforward flavor is the Platonic ideal of a donut. Dunk this in coffee, if you want to fully experience life.

    Number 1: Double Chocolate Donut

    Boston kreme used to be my true love, but now I’m cheating with double chocolate. Don’t tell anyone.

    Its dense, cakey middle absorbs iced coffee beautifully. Together with the satisfying crackle of the chocolate frosting, you’re well on your way to a glorious diabetic coma.

    What are your favorites? Leave a comment and let me know.

    Have a great weekend everyone!

    More on food:

    THE BEST MEXICAN FOOD IS IN…NEW JERSEY?

    NYC’S KING OF SUGAR: POSH POP BAKESHOP

    THE BEST BAKERY IN NYC (IT’S NOT LEVAIN)

    Photo: “Dunkin Donuts” by JeepersMedia is licensed under CC BY 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • Squeezes in AMC and Others are Killing Off Short Sellers

    In 2021, stock in heavily shorted AMC Entertainment Holdings, Inc. has increased more than fifteen fold. Short sellers have lost billions in it and other meme stocks like GameStop, and seem to be becoming more gun shy about short selling in general.

    I came across an interesting research note today on this subject from UCLA’s Anderson School of Management:

    …when short sellers abandon their short positions due to some event in the market, this can create a self-propagating circle — if there is less shorting, then there is less lending income for investors with long positions. These long investors now need to be compensated with a higher return to continue holding the stock, and this higher return dissuades short sellers from initiating short positions. This results in a cascade, where fear begets fear: When short sellers see their peers hesitate to initiate short positions, they refrain from shorting, thus propagating the cascade to the point where all short sellers pull back from the market.

    Seeing your peers implode could beget fear as well.

    If hedge funds are becoming increasingly afraid of shorting stocks, they will likely want to close out the short positions they have. They have to buy the stock to do that, and that demand could drive prices higher.

    Were I them, I’d cut my losses and move on.

    More on AMC:

    AMC HAS 35,000 TIMES THE FAILS-TO-DELIVER OF AMAZON

    SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

    HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP

    Photo: “Freshly Squeezed” by Metrix X is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • AMC Has 35,000 Times the Fails-to-Deliver of Amazon

    Investors in AMC Entertainment Holdings, Inc. have long tried to draw attention to the possibility of illegal naked short selling in the company’s shares. One common sign of naked short selling is “fails to deliver,” or trades that are not closed out.

    So I found it interesting that AMC has fails-to-deliver 35,000 times as large as those of Amazon, one of the largest stocks in the market, based on the latest SEC data.

    Fails to deliver can happen for a variety of reasons, some of them benign. But they can also happen when a trader sells short shares he doesn’t own, also known as naked short selling. The shares aren’t delivered because they never existed.

    The example with Amazon may be particularly dramatic, but AMC’s fails to deliver are still about 9 times the size of Apple’s, whose market cap is 150 times greater than little old AMC’s.

    Here is the raw data from the SEC’s latest report. The number right before the company name is the fails to deliver:

    20210701|00165C104|AMC|3519354|AMC ENTMT HLDGS INC CL A COM S|56.68

    20210701|023135106|AMZN|100|AMAZON COM INC;COM USD0.01|3440.16

    20210701|037833100|AAPL|406167|APPLE INC;COM NPV|136.96

    This is nothing new for AMC. Indeed, it has had so many fails to deliver for such a long time that it has repeatedly featured on a special “threshold list” maintained by the NYSE.

    It seems highly likely to me that something fishy is going on here. But will the SEC act?

    More on AMC:

    AMC ON THE THRESHOLD LIST: STRONG EVIDENCE OF NAKED SHORT SELLING

    EXPLOSIVE CLAIMS IN LAWSUIT AGAINST ROBINHOOD

    SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

    Photo: “nothing to see here” by misterbisson is licensed under CC BY-NC-SA 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • China’s Tech Elite Is Running Scared

    China’s government has launched a severe crackdown on its leading tech companies. Didi Chuxing, the equivalent of Uber, has been removed from app stores and ed tech companies are now required to be nonprofit, likely wiping out their investors.

    A major index of Chinese tech stocks is down over 40% since February, even as US tech stocks climb:

    China’s tech elite is responding by placating the government however it can, including a rapid increase in philanthropy in response to government messages that it expects bigger donations from the rich.

    But it doesn’t stop there. Alibaba has been under intense pressure from the Chinese government since founder Jack Ma criticized some aspects of its performance, which led to his disappearance for several months. Alibaba has since created a special app to promote “Xi Jinping thought”.

    China’s top entrepreneurs are also looking for an escape hatch in case their appeasement of the government doesn’t work. Interest from wealthy Chinese in moving abroad is increasing amid the government crackdown.

    Sudden donations, new Communist dogma apps, and quiet plans to leave…these are acts of desperation.

    I see a couple results from China’s crackdown:

    1) Major businessmen in tech and other sectors are distracted. They’re worried about appeasing the government and/or emigrating, not building their core business. This will harm the prospects of their companies.

    2) Would-be entrepreneurs are discouraged. Why start a company when it can be so easily appropriated?

    3) Investors are discouraged for the same reason as # 2.

    China is rapidly strangling its economic golden goose. The only question is, who will pick up the pieces?

    More on China:

    CHINA IS CRUSHING ONE OF ITS MOST INNOVATIVE COMPANIES

    HOW CHINA’S TECH INDUSTRY DIES

    CHINA IS KILLING ITS TECH INDUSTRY

    Photo: “Vice President Xi Jinping” by nznationalparty is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • Did COVID Come from a Lab? A Doctor’s Perspective

    In southern China near the border with Laos, there is a mine. To this day, it is heavily guarded by the Chinese government. Any journalist who tries to visit is detained.

    Inside the mine: the possible origin of the COVID pandemic.

    Scientists identified the animal that first transmitted the original SARS virus (SARS-CoV-1) within 6 months. The culprit was the civet cat. But no animal intermediary for SARS-CoV-2, the virus that causes COVID, has ever been found. Meanwhile, we know that bat guano samples from that mine were taken to the Wuhan Institute of Virology and studied. Is that lab the real source of the pandemic?

    In an excellent podcast by the eminent Doctor Peter Attia, he and journalist Katherine Eban dig into the possibility that SARS-CoV-2 escaped from the Wuhan lab. There are many precedents for this: SARS-Cov-1 has escaped from labs several times. And the Wuhan Institute was not very secure: some of its labs had biosafety level (BSL)-2 precautions. This is about the same level of security as an American dentist’s office.

    There is no longer any scientific consensus on whether the virus came from an animal or a lab. But we may never know for sure where SARS-CoV-2 came from, since China has stonewalled international researchers and the Wuhan Institute’s database of virus info just happened to be taken offline in September 2019, shortly before the pandemic began to rage.

    I’m sure it’s just a coincidence.

    More on China:

    IS CHINA USING ITS COVID VACCINES TO CONTROL OTHER COUNTRIES?

    CHINA IS CRUSHING ONE OF ITS MOST INNOVATIVE COMPANIES

    HOW CHINA’S TECH INDUSTRY DIES

    Note: The doctor I’m referring to is Dr. Attia. I have no scientific or medical background.

    Photo: “File:Wuhan Institute of Virology main entrance.jpg” by Ureem2805 is licensed under CC BY-SA 4.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • NYC’s King of Sugar: Posh Pop Bakeshop

    I first passed it about two years ago. The sight of towering, beautifully crafted cakes stopped my wife and I cold. Of course, we had to go inside.

    Posh Pop Bakeshop sits on a quiet block of Bleecker Street in New York City’s West Village. It specializes in dessert bars topped in mountains of buttercream frosting. I particularly love their Butterfinger bar, a gooey chocolate and caramel brownie topped in peanut butter flavored icing.

    Posh Pop also happens to be entirely gluten free, but even for someone like me whose diet is mostly gluten, its sugary treats always hit the spot. Their staff is also very friendly and happy to answer questions about their ever-changing menu of confections.

    Last summer, I loved getting a massive brownie and taking it to nearby Washington Square Park, where passersby would often ask me where it came from. Their creations are so visually stunning you may find yourself making new friends. But don’t worry, you don’t have to share your brownie. 🙂

    Posh Pop has survived COVID and is thriving, turning out tempting treats that will spell the end of any diet. If you’re in the area, give it a try!

    Have a great weekend everyone!

    More on food:

    THE BEST MEXICAN FOOD IS IN…NEW JERSEY?

    THE BEST BAKERY IN NYC (IT’S NOT LEVAIN)

    I ATE THE BEST BURGER OF MY LIFE OUTSIDE IN THE DEAD OF WINTER

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • Hedge Funds Get Special Treatment During Margin Calls

    A major feature of the run-up in stocks like AMC has been a battle between short selling hedge funds and bullish retail investors. The small investors have often sensed they’re not being treated fairly.

    And when it comes to margin calls, it turns out they’re quite right.

    A margin call happens when a trader borrows to fund a trade and the trade moves against him. If he doesn’t post more funds, the broker will close out his trade, whether he likes it or not.

    An average investor generally gets two to five days to resolve a margin call. But the rules for the big boys are very different.

    According to a new report from Credit Suisse, it gave troubled hedge fund Archegos Capital Management weeks to meet a margin call. The tactic Archegos used to deflect the demands for more cash was incredibly simple: claim they were too busy to respond.

    On February 23, 2021, the PSR [Prime Services Risk] analyst covering Archegos reached out to Archegos’s Accounting Manager and asked to speak about dynamic margining. Archegos’s Accounting Manager said he would not have time that day, but could speak the next day. The following day, he again put off the discussion, but agreed to review the proposed framework, which PSR sent over that day. Archegos did not respond to the proposal and, a week-and-a-half later, on March 4, 2021, the PSR analyst followed up to ask whether Archegos “had any thoughts on the proposal.” His contact at Archegos said he “hadn’t had a chance to take a look yet,” but was hoping to look “today or tomorrow.”

    No retail investor would ever get away with this. If Robinhood or any other retail broker didn’t get a response in an exact time window, they would liquidate the shares. And the special treatment extended to Archegos here would likely apply to any big client, like Citadel, Melvin Capital, or others.

    This gives hedge funds a systematic advantage. They can borrow money and magnify their bets, and if the trades go against them, they can stall indefinitely and hope their position recovers.

    All I can tell you is what I do: never buy on margin. Investing is risky enough without adding to the risks with borrowed money. But whatever strategy one chooses, hedge funds and small investors should at least be treated equally.

    More on AMC and hedge funds:

    EXPLOSIVE CLAIMS IN LAWSUIT AGAINST ROBINHOOD

    AMC SHORTS LOST $642 MILLION YESTERDAY

    SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

    Photo: “Bank Robbery In Progress” by foilman is licensed under CC BY-SA 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • Explosive Claims in Lawsuit Against Robinhood

    As it prepares to IPO this week, Robinhood Markets, Inc. is facing several class action lawsuits from its users. Inside those lawsuits, an explosive claim:

    High level executives and employees of Robinhood and Citadel Securities were in contact around the time Robinhood restricted trades, according to the complaint.

    This lawsuit grows out of buying restrictions that Robinhood imposed on stock in AMC, GameStop, and others this January as their prices skyrocketed:

    Retail investors suing Robinhood Market Inc and others over trading restrictions in the wake of a social media-fueled rally that squeezed short sellers have filed complaints seeking potentially billions in damages.

    One of the proposed class actions filed on Tuesday in Miami federal court accuses Robinhood and clearing brokerage Apex Clearing Corp of acting negligently in cutting off trades in late January. The other lawsuit alleges they and others were part of an antitrust conspiracy with Citadel Securities LLC to spare the market maker losses on short bets.

    Citadel plays an interesting dual role here. Citadel Securities handles many of Robinhood’s trades, but its hedge fund arm invested money in Melvin Capital, a fund that was imploding due to losses shorting meme stocks.

    I see two possibilities:

    1. Citadel Securities handles a lot of Robinhood’s trades, so Robinhood naturally talked with them about issues it was facing holding enough money to back trades in volatile stocks like AMC and GameStop.
    2. Citadel tried to influence Robinhood to stop its users from driving up the price of meme stocks, which would hurt its positions in Melvin (and perhaps elsewhere)

    I don’t think we have enough information yet to determine which it is. We need to find out what was said in conversations between Citadel Securities and Robinhood, and what contact Citadel Securities staff had with people on the hedge fund side of the firm. The lawsuit will likely expose phone records, e-mails and more that could shed light on what really happened.

    That said, we definitely have at least the appearance of impropriety here. Citadel is exposing itself to a huge risk of regulatory crackdown and legal judgments. And Robinhood customers may be skeptical enough that they move on to any of the countless other brokerages available.

    Major financial institutions are in the habit of saying “just trust us.” What they don’t understand is that after decades of bailouts and conflicts of interest, that’s a very hard sell.

    More on AMC:

    AMC SHORTS LOST $642 MILLION YESTERDAY

    HEDGE FUND LOSSES COULD TAKE DECADES TO RECOVER

    SHORT SELLERS LOSE $44 BILLION IN 30 DAYS

    Photo: “Fruit of the fireball machine” by SiamEye is licensed under CC BY-NC-ND 2.0

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

  • At the Sopranos Convention! (Part 2)

    We all know The Sopranos is the greatest television show of all time. And yes, I’m a little obsessed. So when I had the opportunity to the attend Sopranoscon on Saturday in Atlantic City, NJ, I had to do it!

    The best part about the convention was seeing the show come to life right in front of me. There were the characters I loved, just a few feet away! I even got to sit in Tony’s seat in his Cadillac Escalade. The car that’s pumped full of bullet holes in the final season as Patsy and Sil desperately try to escape New York’s hitmen was there too!

    In Tony’s Escalade!
    Patsy and Sil’s car!

    One of the biggest highlights of the day was the costume contest: the winner did a perfect impression of Sil’s “Just when I thought I was out, they pull me back in!” I haven’t smiled as wide in a long time.

    A very convincing Tony Soprano look-a-like who was actually a stand-in for Gandolfini in the series, bookable here!

    Since this was Mobmoviecon in addition to Sopranoscon, there were actors from other gangster classics. One of my favorites was Armand Assante, who played a pitch perfect John Gotti in the 1996 HBO movie. Since I’ve done some extremely minor acting myself, I had to ask him: what makes a great actor?

    Armand Assante, interviewed by real-life former gangster Michael Franzese

    “Will,” he told me. Like when a baseball player says “I’m going to hit this out of the park,” an actor has to will himself to deliver a great performance, whatever it takes. When we connect our will to our talent and imagination, we can become great actors, Assante added.

    The convention also had a major announcement: there will be a Gotti 2, starring Assante, and production is beginning now!

    You’re at the precipice of an enormous crossroads.

    To top it off, I took second place in The Sopranos trivia competition! The prize: a signed copy of a fascinating book about the series written by another big fan!

    I’m a winner, baby!

    About the only negative of the convention is that you have to pay $20-40 extra to meet any of the actors or get a picture/autograph. But this may be the only way to make the economics work: paying dozens of high profile actors and renting out a major resort isn’t cheap! Perhaps in the future, they can host a mixer for everyone to allow more interaction.

    The organizer of the convention, Michael Mota, has huge plans for the future: not only is he producing Gotti 2, he hopes to buy Tony Soprano’s house and turn it into an Airbnb for fans of the series. If he does, I’d love to visit!

    More on The Sopranos:

    AT THE SOPRANOS CONVENTION!

    WELCOME TO SAL “BIG PUSSY” BONPENSIERO’S HOUSE FROM THE SOPRANOS

    VISITING UNCLE JUNIOR’S HEADQUARTERS FROM THE SOPRANOS

    If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

    iHerb

    The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

    Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

    Misfits Market

    My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.