Stocks Thread (A/K/A STONKS THREAD)

[goofy]

Levine with a wonderful story today about how absurdly rich people have to waste their money to feel alive or something

Here is a hilarious Bloomberg News article about JAB Holding Co., which is roughly speaking the family office of the Reimann family, heirs to the Benckiser chemical fortune. (Roughly but not quite: “JAB evolved into a company resembling less a family office — with an ultra-long-term vision and the mundane goal of wealth preservation — and more an ambitious investment firm,” and has money from some other wealthy families.) The thesis of the article is that JAB has not been all that lucrative for the Reimanns, but it has been exceptionally lucrative for its managers:

If the Reimanns, the reclusive family behind JAB, had instead invested in a low-cost fund tracking that index, they would be worth more than $50 billion, richer than the dynasties behind Hyatt Hotels, Anheuser-Busch InBev and Ferrero chocolates, according to data compiled by Bloomberg. Instead, JAB’s mixed track record means they’re worth about half that.

But JAB’s consumer gambits have proven highly lucrative for [Peter] Harf, 78, who has advised the family for 43 years, and [Olivier] Goudet, 59, who was chief executive officer of JAB until last year. They’re each worth more than $1 billion, partly thanks to payouts and stakes in scores of JAB investments they accumulated over the years, according to the Bloomberg Billionaires Index. It’s a rare example of executives who’ve made 10-figure fortunes by managing another family’s riches.

Man, I don’t know. You go to a party and people ask you what you do with your billions of dollars and you say “oh I own Krispy Kreme and am a major global player in the coffee industry, and our business is so good that it has made the guys who manage my money billionaires”: That’s cool. Making those guys billionaires is itself impressive. You say “oh I own diversified index funds and the guys who manage my money make one basis point”: Ehh fine whatever.

At the highest levels, it is can be hard to distinguish investment from consumption. Owning a sports team, or a Leonardo, is clearly both. Having a family office that makes its employees billionaires and owns “dozens of beauty labels” is less obviously both, but it is also both. If I had $25 billion and you offered me the choice of (1) index funds or (2) this whole thing, with the underperformance and the billionaire managers and the pet insurance and the coffee empire, I would unhesitatingly take this whole thing. This is a better story! If you have $25 billion you don’t need a few extra basis points of performance. You need to have some coherent, or entertainingly incoherent, story of what you’re up to with your money.

I do not have $25 billion, though. If you do and would like me to manage your family office for you, I cannot promise good financial results, but I think I can promise that (1) we’ll have fun and (2) you’ll pay me a billion dollars.

[riverman]

I would be very surprised if even 10% of family offices beat the Buffet 90/10 portfolio. Hell, Buffett can’t even beat it anymore.

[Namath]

There’s aren’t many people alive today who somehow managed to wind up bag holding the most successful stonk of the past 2+ years, but one of those dumbasses is about to by god click reply on this post.

[goofy]

Matt Levine wrote something this week about how holding the leveraged daily ETFs for a long time period is bad: https://archive.ph/3GLc1

The point of these funds is to give investors two or three times a stock’s daily returns, and they come with grim health warnings telling you not to hold them for the long term: LMI3 does a good job of giving you three times the daily return of MicroStrategy, but a horrific job of giving you three times the year-to-date return of MicroStrategy. (It gives approximately negative 0.8 times the year-to-date return.) “The funds offer amped-up exposure only to a stock’s one-day return,” writes Greifeld, “given that the daily rebalance of the options book erodes returns over time.”

[d10]

Oof. Yeah don’t hold leveraged ETF’s that long. Or ever unless you have a really good reason. You’re effectively putting in orders to buy high and sell low every day. You’re mathematically guaranteed to fail. It’s actually pretty amazing how green the NVDL chart is over most of its life.

[Namath]

Trust me they were assigned to me against my will.

Also:

SOXS = $31.07

SOXL = $25.73

This is not good. I can’t recall ever seeing S higher than L, let alone this much.

[Namath]

Barron’s guy yesterday was saying that 5420 is a big support level for SPX. We busted through that earlier like a wet paper sack.

Next stop 5200

[feedthabeast]

These things do weird reverse splits all the time. The gap on TQQQ VS SQQQ is massive.

[Namath]

The horror…the horror…

[Namath]

yeah it’s mostly been SOXS reversing to stay above zero while SOXL mooned

those were the days

[BriansHat]

DJT stock up 18% today based on Trump saying he’s not selling his stock.

How much do we wanna bet he immediately sold some of his stock after that pump? Because nothing matters.

[Jman220]

lol, the man got away with a literal armed coup, I don’t think SEC charges gonna stick.

[BasicBlue]

That was my first thought. If not today, he’s pulling out the rug in a few days. Just to add a few more bucks and screw his peeps a little more.

[Namath]

it’s back down in the toilet where it belongs

[Namath]

So I became a gold bug today

It should at least go back up to $2600 with this rate cut, the real gold bugs will be buying like crazy because muh inflation etc. I was surprised to see it drop as steeply as it did today (you can see the carnage on the left of the screen cap) but it seems to be creeping back up.

[feedthabeast]

There’s an unlock coming later this week too. Should be fun!

[Namath]

2601.02 keep doing the thing

[Namath]

the laughter died at 2610

[feedthabeast]

Carpenter claims he made $415 million on Tesla, then lost it all