Tremendous

Citadel Under Federal Investigation

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Photo: Citadel LLC CEO Kenneth Griffin

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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.

Classic Coffee and Cake in North Jersey

March 22, 2022

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What could be more classic than coffee and cake? After a recent dinner out, my wife and I stopped at Paris Baguette in search of this venerable combo.

We found cases filled with some of the most beautiful, artistic cakes I’ve ever seen. They’re so pretty you almost don’t want to eat them.

Almost.

We ordered a tiramisu cake and cappuccino for her and mocha cake and a small coffee for me. They were ready in no time and we sat down at the handsome marble tables, ready to feast.

The tiramisu cake was novel with a deep espresso flavor. But the star of the show was my mocha cake.

My fork sliced through the rich icing into a deliciously moist, crumbly interior. I closed my eyes as I chewed, transported to chocolate heaven.

The finely brewed coffee was a perfect counterpoint to the chocolate. We sipped and relaxed, content as could be.

As we finished up, I noticed my wife furtively eyeing the dessert case. I mean, you only live once right?

So she grabbed a scrumptious twisty donut thing whose name I don’t know, holding it triumphantly in the air like a trophy. Oh, and a mini cheese cake for the morning, too.

Who’s counting?

In addition to numerous locations across northern New Jersey, you can find Paris Baguette in New York City, Philadelphia, and numerous other locations across the country. Stop in for delicious coffee and baked goods in a relaxing atmosphere!

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If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days.

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

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.

Fathom: the Podcast Player from the Future

March 21, 2022

Let’s say I have a question: “how do angel investors choose startups?” I go to Google and type it in, right?

But what if the best answer is in a podcast? That audio is trapped somewhere in the dark world of RSS feeds, along with great answers to millions of other questions.

Until now! Fathom makes it easy to search podcasts.

Let’s try my search on Apple Podcasts:

Bupkus. Now let’s try it on Fathom:

Right away, Fathom directs me to a highly relevant clip from This Week in Startups, a podcast I love! Jason advises me to diversify my investments and make sure I’m choosing companies with products in market.

Sage advice. Question answered.

Do you see how powerful this is? Tons of smart people are talking on podcasts every day, but unlike text, that info is almost impossible to search.

Fathom grew out of a side project during the COVID lockdown. Here’s co-founder Paul Bloch:

Ken, my cofounder reached out to me and mentioned that during the covid lockdown he’d been working on a prototype AI that could answer questions using podcast content. Ken’s a podcast lover and big Lex Fridman Podcast fan. Ken asked if I wanted to help develop the idea and product with him.
After we started in earnest we felt that there were many more ways we could bring the power of AI to the user and innovate in how people experience podcasts. That’s what brought about the feed of AI-recommended episodes that play AI-generated highlights.
…I believe in January of 2021 Lex Fridman had an interview where he specifically mentions how game-changing it would be to search inside podcasts. That was the moment of kismet that really made us excited about the potential of the product. Months later we had a prototype, incorporated the company, and had our first investor check. Things started moving fast the moment we really committed to bringing our vision to life.

The application is available on desktop or iOS. As a podcast maniac, I’m really excited to be an investor in this great company!

Give Fathom a try and have fun listening to some awesome episodes!

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.

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

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.

Mass Firings at Citadel Right Before Federal Probe

March 18, 2022

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Last October, Citadel LLC’s Surveyor Capital unit suddenly fired several portfolio managers at once.

In the preceding five months, half of Surveyor’s portfolio managers had either been fired or resigned. In May, Todd Barker, the head of Surveyor Capital himself, departed after 16 years at the firm.

His timing was good. All hell was about to break loose.

In November, just after the mass firings at Surveyor, Morgan Stanley’s head of block trading suddenly stopped showing up for work. The trader, Pawan Passi, had been put on leave due to a federal investigation of his conduct, Bloomberg later reported.

Passi and Morgan Stanley are under investigation for allowing hedge funds to front run large block trades of stock. A tip-off from Passi could let a hedge fund buy or sell right before a big institution, locking in profits and giving the institution a worse price.

Also ensnared in the probe: Andrew Liebeskind, Surveyor’s top trader. Passi may have fed him tips on big trades to front run.

So Surveyor suddenly fired a large group of traders right before the federal probe came to light in November. Were they either part of the alleged scheme or, worse, fall guys for top executives like Liebeskind?

We will have to wait for more information to surface in the federal investigation before we know for sure. But I find the timing….convenient.

What do you think is behind the sudden Citadel firings? Leave a comment below and let me know.

Have a great weekend everyone!

More on markets:

Citadel Under Federal Investigation

Melvin Capital Under Federal Investigation

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Photo: Citadel LLC CEO Kenneth Griffin

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Save Money on Stuff I Use:

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

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 great 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.

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

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.

Our Man in Hunan

March 15, 2022

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On a quiet block just south of bustling 42nd Street, my wife and I ducked into a doorway and disappeared.

This isn’t a spy novel. But it is an incredible lunch.

Hunan Manor in midtown Manhattan serves outstanding Chinese food firmly rooted in the traditions of the motherland. You’ll find American dishes like an excellent General Tso’s, but also traditional recipes like scallion pancakes.

We sat down today in the surprisingly spacious dining room and within minutes, our waiter brought my wife’s spicy hot and sour soup and my enticing spring roll. Biting down with a satisfying crunch, I could tell this torpedo of flavor was freshly fried.

A few minutes of conversation later, out came the entrees. For the lady: ginger shredded beef with peppers. For me: Hunan style shrimp in a thick, piquant sauce.

The shrimp were cooked perfectly. Their texture was springy and yielding, unlike the little overcooked stones so many restaurants pass off as shrimp.

But the missus’ beef stole the show. The char on the thin strips of flesh, coupled with the perfume of ginger and tender peppers, made for a perfect dish.

I found myself wishing for tortillas to put the beef in, fajitas style. It’s interesting to see how different cultures approach similar ingredients and put their unique stamp on them.

We both ordered off the lunch combo menu, which I highly recommend. Everything is between $9.50 and $12.50, and that includes rice and either soup or a crispy spring roll.

You’d be hard pressed to find a better deal in town!

There will be no blog tomorrow. I have an acting gig. 🙂

See you Thursday!

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.

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

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.

Manhattan’s Burger Baron

March 14, 2022

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I’ve been going to this restaurant so often, I might have to move in and save the bus fare.

Schnipper’s in New York City is American food done right. Done with respect.

On Thursday, my wife and I rushed in for the third time in two weeks. From a mouthwatering burger to artistic salads, everything they make uses the best ingredients and technique.

I had a massive, juicy bacon cheeseburger. The meat is incredibly fresh.

It’s telling that even the lettuce isn’t some sad, wilted vegetable. Instead, they use crisp bib lettuce that snaps as you bite into it.

You might even be able to convince yourself the burger is health food.

My wife had a beautiful fried chicken salad. It was topped with beets, sweet corn, and housemade sourdough croutons.

A triumph!

I also heartily recommend the tuna melt. I made sourdough for years and alas, the bread in that sandwich is better than anything I ever produced. 🥲

Schnipper’s also makes an outstanding milkshake. I had sip after sip of the one my wife ordered.

For research purposes.

You’ll notice that the food takes a little longer to come than most fast food places. It’s worth it; they’re actually making your meal from scratch!

For years, I walked past Schnipper’s and smelled ambrosial odors wafting forth. Why I never stopped in until now is beyond me.

Schnipper’s has two locations in midtown Manhattan, both east and west. If you’re in the city, stop in for a reliably outstanding meal.

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.

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

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.

Ken Griffin Makes $2.5 Billion in 2021 as Investigation Looms

March 11, 2022

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Citadel LLC CEO Kenneth Griffin made $2.5 billion in 2021. That was enough to give him third place among hedge fund managers in the list just released by Institutional Investor.

For Griffin, its unclear how long the good times will last. His firm is under federal investigation.

Investigators are examining the communications of Andrew Liebeskind, one of his top traders, among others. And if that weren’t bad enough, other investigators are looking into Melvin Capital, in which Citadel invested billions.

That probe too could lead to Citadel.

I found it interesting that Griffin was bested by Jim Simons of Renaissance Technologies LLC, who earned $3.4 billion, putting him in first place. Simons’ firm has been a buyer of meme stocks including AMC Entertainment Holdings Inc.

Perhaps it’s easier to swim with the current than against it.

Not being under federal investigation probably helps too.

Have a great weekend everyone!👋

More on markets:

Citadel Under Federal Investigation

Melvin Capital Under Federal Investigation

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Photo: Citadel LLC CEO Kenneth Griffin

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

Save Money on Stuff I Use:

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

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 great 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.

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

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.

Why High Oil Prices May Not Matter for Stocks

March 10, 2022

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You don’t need me to tell you that oil and gas prices are through the roof these days.

Gas stations are changing numbers faster than slot machines. And the explosion in prices is sowing fear in the stock market.

But I think this huge spike in oil prices won’t matter much for stocks in the long term.

Looking at some historical data today, I noticed that big advances in oil prices are actually associated with above average returns for stocks.

Let’s look back at some major oil price spikes and see what happened to stocks.

A Trip Down Memory Lane

Our first stop takes us back to the late nineties. That was the last time I saw gas under a dollar!

Indeed, oil was a mere $12.36 a barrel in February of 1999. Just one year later, it had shot up to $28.28, a 128% increase.

Surely a stock market crash was next, right?

Wrong. Stocks increased 11% that year, an above average return.

Our next stop takes us to the depths of the financial crisis. At the beginning of 2009, oil traded for $46.17.

By April of 2011, the price had jumped to $107.55, an advance of 133%.

Market meltdown? Hardly.

Stocks surged 48% as the economy rose again from the ashes.

Why would stocks go up even as oil, a major cost center, rises?

Both are responding to an improving economy. Stronger economic growth means better prospects for companies, raising stock prices.

A stronger economy also means more demand for oil as families go on vacations again and buy bigger and shinier SUV’s. That increases oil prices.

Indeed, you’ll notice that during periods of increasing oil prices, economic growth also increased rapidly:

What About Today?

In April 2020, oil prices stood at just $20.28 a barrel, the lowest in over 20 years. Today, West Texas Intermediate oil has increased to $119.26 a barrel, a staggering 488%.

Sure enough, a similarly massive upshift in economic growth happened during that time. US GDP went from falling 31% year over year to growing 34% year over year, as lockdowns were implemented and then lifted.

Since lockdowns began to ease in later 2020, economic growth has remained strong, routinely clocking around 7%.

That roller coaster for growth resulted in a roller coaster for oil prices as well. We shouldn’t be unduly alarmed that oil is recovering along with the economy as a whole.

While geopolitical events have contributed to higher prices this year, you’ll note that most of the increase in oil prices happened well before Russia’s invasion of Ukraine.

High prices or no, I’ll be holding my stocks.

More on markets:

How Did High Dividend Stocks Perform In the Last Crash?

Is Russia’s Google Finished?

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Photo: “Gas Prices. WTF?” by kristiewells is marked with CC BY-NC-SA 2.0.

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You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

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 great 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.

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

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.

Short Squeezes Could Get Much Easier Under This New Rule

March 9, 2022

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A new proposed rule by the Securities and Exchange Commission could make creating short squeezes much easier.

The proposed rule would require reporting of large short positions. From The National Law Review:

Under Proposed Rule 13f-2, managers would be required to report on a monthly basis — for equity securities in which the manager holds certain minimum short positions — the manager’s end of month gross short position and certain daily short-selling activity affecting the growth short position.

This data will be made public, letting traders see which firms own large short positions in certain stocks. Those traders can then target a firm specifically, buying up those shares:

As the SEC notes, if market participants can ascertain which short positions belong to only one manager — something the SEC estimates may occur in as many as 32% of the stocks for which there would be reporting under Proposed Rule 13f-2 — traders may seek to orchestrate a short squeeze targeting that particular manager.

And if that weren’t bad enough, the SEC plans to use this data to increase enforcement against short sellers:

From an enforcement perspective, the submissions required by Proposed Rule 13f-2 will be used by the SEC to more efficiently police fraud related to short selling activity. In its justification for Proposed Rule 13f-2, the SEC emphasized that data collected under the new rule could help detect and deter fraud.

Short sellers lose twice: first to other traders who target their positions, and again if regulators crack down. Indeed, this rule could be a powerful tool in the DOJ’s ongoing investigation of fraud by short sellers.

I expect to see both hedge funds and individual traders carefully combing these reports. Once they find a firm that’s overexposed, they could target its entire book of short positions.

Such an attack could take down a short selling firm, fast.

I’ll be eagerly watching the SEC to see if this new proposed rule becomes law. It could change markets forever.

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More on markets:

How DTCC Makes Fails to Deliver Disappear

Melvin Capital Under Federal Investigation

Photo: Prominent short seller Gabriel Plotkin

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

Save Money on Stuff I Use:

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

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 great 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.

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

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.

Is Russia’s Google Finished?

March 8, 2022

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Yandex NV dominates the Russian market, with a majority of all Russians visiting its platforms every month. It offers the nation’s most popular search engine, an e-commerce portal, and even ride sharing.

But now Russia’s premiere tech company’s days may be numbered.

Yandex’s stock is down 75% from its peak last fall. Partnerships with Uber and Grubhub are being wound down since Russia invaded Ukraine.

Yandex’s ambitious expansion overseas is dead in the water. A plan to offer cloud computing in Europe has been shelved.

Indeed, it will be hard to do any business overseas with the banks Yandex relies on within Russia facing crippling sanctions.

But the most immediate threat to Yandex may lie in obscure covenants on its debt.

The Securities and Exchange Commission has suspended trading in its Nasdaq-listed shares. A long enough suspension may trigger a requirement for Yandex to immediately repay $1.25 billion to owners of its convertible bonds.

Yandex does not have the money.

Meanwhile, the company’s staff are nervously eyeing the exits.

Yandex employees’ compensation is largely in stock, which has lost most of its value. This will make it hard to motivate and retain employees.

Those who can are likely to move abroad. In a red hot market for engineers, finding a new position should be easy for them.

In all, Yandex is losing key markets, dealing with staff panic, and facing imminent insolvency. Absent help from the Kremlin, it’s hard to see how this company survives.

Yandex’s woes spell trouble for Russia as a whole.

The nation is heavily dependent on resource extraction. Companies like Yandex represented a chance to diversify and join the lucrative tech industry dominated by the West.

But Russia’s authoritarianism is making that transition harder and harder.

Oil prices are high right now, but as the world transitions to renewable energy, Russia may be left with resources the world no longer wants.

And not much else.

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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.