THE DAILYALTS PLAYBOOK

March 13, 2020

Today, the DailyAlts Playbook talks about Buffett Playing to an Empty Room, Disney’s Quiet Period, and China’s Latest Lies.

PRIME OVERVIEW

Good morning:

We start today where we left last night. I was up until around 1 a.m. watching the Futures market tank yet again with the Dow off upwards of 600 points.

Then, up in the morning to see the S&P 500 was at “Limit Up” and the Dow had gained 1,100 in premarket hours.

So, the lesson, it seems, is to get more sleep. As a result, most of the analysis that I had written last night can now go into a folder and wait to see if this rally is real or just a dead cat bounce.

Yesterday was tough from a market perspective. It was also brutal from a cultural perspective. Major League Baseball is now delayed until mid-April, although it’s more likely that this will stretch into the summer. The best annual sports event of the year – the NCAA Tournaments for Men’s and Women’s basketball – is now off. They’re even talking about a cancelation to the NFL Draft, which wouldn’t be terrible given that ESPN has already ruined it in recent years with the sheer amount of overproduction.

Speaking of ESPN – what exactly is that channel going to do for the next two months now that the PGA, MLB, NBA, and every other major sport is shutting down? UEFA is suspending the Champions League. Even the smaller leagues are shutting down. The XFL is canceling its regular season. That was still a thing?

Yes, the UFC plans to continue its schedule and perform in rooms under 100 people (that’s going back to its roots). And Wrestlemania is still on.

But seriously? What is ESPN now?

Walt Disney (NYSE: DIS) – the owner of ESPN – couldn’t be in a worse situation right now. It’s shutting its theme parks, its films are likely delayed for month, and its core media channel in ESPN has nothing to show for the next month except for… coronavirus coverage?

Maybe they’ll start covering Beer Pong tournaments. I think a lot of people sitting at home will watch anything.

Coronavirus will be an interesting case study in that assumption.

We’re going to be brief today because of time constraints…

MORNING MOMENTUM

QUIET ROOM: Warren Buffett has announced that Berkshire Hathaway (NYSE: BRK.A) will host its annual shareholders’ meeting without shareholders in attendance.

CANCELED: Here’s the latest list of things that coronavirus has canceled. Total cases have reached 135,118, while the global death toll increased to 5,056.

LOSSES IN FEBRUARY: “Hedge fund losses picked up in February 2020 with the industry down 2.81% for the month, according to the Barclay Hedge Fund Index compiled by BarclayHedge, a division of Backstop Solutions. By comparison, the S&P Total Return Index was down 8.2% for the month,” says Opalesque. Here’s the Barclay Hedge Fund Index. Meanwhile, the  SS&C GlobeOp Hedge Fund Performance Index for February 2020 measured -0.42%. Hedge fund flows as measured by the SS&C GlobeOp Capital Movement Index advanced 0.70% in March. Here’s more.

BITCOIN BUST: Bitcoin fell to almost $4,000 last night, but has bounced back a little bit. Peter Schiff has spent the better part of a year doing little but fighting people over the useless debate between “gold versus Bitcoin.” He was taking victory laps on Twitter last night over this. Just a reminder: Gold prices still aren’t at $5,000 per ounce. This is the most exhausting debate on Twitter, and I follow a lot of exhausting debates on Twitter. Given that there are probably people on his team who crawl the internet searching his name, I look forward to the email asking that we take down any subtle criticism of his exhausting schtick on gold prices and Bitcoin. It’s time to let this whole thing go. Let’s save his team some time: gbaldwin@dailyalts.com.

CARRIED INTEREST

Here are the other stories that we are watching on Friday.

• Bain Capital is shutting down its office in London for a bit over coronavirus.
• President Trump’s speech on coronavirus didn’t go well.
• The FDA has approved a new test. (If you’re using Bloomberg, and don’t have a subscription, use Incognito).

QUOTES OF THE DAY

“I look back at people who bought stocks after the crash in 1987, people who bought stocks after the financial crisis. For long-term investors, this will be a great investment opportunity,”

That’s Treasury Secretary Steven Mnuchin talking about how this selloff will be short-lived.

“Be transparent! Make public your data! US owe us an explanation!”

That is Zhao Lijian, a foreign ministry spokesman of the Chinese government. For all the people angry that people are pointing out that the virus originated in China, the Chinese government is now pushing a propaganda campaign suggesting that it didn’t. Its social media channels are ablaze with conspiracy theories that the United States is responsible for the virus.

ACTIVISTS

BUYBACK: SoftBank Group announced plans to purchase up to $4.8 billion in company stock – a figure that would represent about 7% of its stock. The company remains under pressure from activist fund Elliott Management, who currently owns about 2.5% of the Japanese conglomerate.

UNCLE CARL: Activist icon Carl Icahn is pushing for the removal of Occidental’s CEO. He’s been doing so since the firm agreed to purchase Anadarko in a $55 billion deal. Given the sharp pullback in oil prices, it’s likely that they would like that money back.

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ABOUT THE DAILYALTS PLAYBOOK

Garrett Baldwin is the author of the DailyAlts Playbook.

An economist and author based in Naples, Florida, Garrett has an extended history of financial analysis, business journalism, public relations and consulting experience in hedge funds, private equity, alternative investments, housing policy, commodities, and public equity coverage. He holds degrees from Northwestern University, Johns Hopkins University, Purdue University, and Indiana’s Kelley School of Business. He also has a Certificate in Global Business from Harvard Business School.

An avid Baltimore Orioles and Buffalo Bills fan, he would prefer to discuss other sports, please.