THE DAILYALTS PLAYBOOK

February 20, 2020

Today, the DailyAlts Playbook talks about Bloomberg’s Debate, “Summer” as a Verb, Victoria’s Secret Sale, and Goldman’s Warning.

PRIME OVERVIEW

Good morning,

We start in Las Vegas, where Michael Bloomberg’s debate survival lasted less time than Ben Askren against Jorge Masrivdal in UFC fight.

Bloomberg made his first appearance in the Live Democratic Debates, and pundits think his best moments came when he was dead quiet.

Bloomberg railed against “communism.”

Then he spent two hours being publicly owned by Elizabeth Warren, who had her strongest showing yet.

She took Bloomberg to the woodshed over NDAs, his previous statements on employees, stop-and-frisk, and more. The other four candidates treated him like the frontrunner, even though he hasn’t received a single vote yet.

However, Warren might have had her “Chris Christie against Marco Rubio” moment that takes them both out of the contest.

The under-the-radar moment came when Bloomberg snickered about Bernie Sanders that America’s most famous socialist was a millionaire with three homes. That wasn’t a knockout line. It was clearly rehearsed and didn’t quite land with the Las Vegas audience.

But Sanders didn’t handle this well.

He went on to explain that he had a home in Washington, where he works; a home in Vermont, where he lives; and a “summer camp” like many other people in the region.

He was defensive, and the mask slipped a little. Bloomberg couldn’t quite deliver another punch to the “Summer Camp” line.

It was the type of line that would leave his jaw hanging out for Trump in a national debate.

Sanders also got quite defensive when Bloomberg mentioned communism – and went on to talk about democratic socialism in nations like Denmark.

No one on stage took the time to explain that Denmark is a capitalistic economy with a large social safety with a homogenous population of six million.

In fact, Denmark has a freer economy than the U.S. These are the types of statements that aren’t going to perform well in debates down the road as people continue to investigate Sanders’ standard talking points.

Overall, I’d give the win to Elizabeth Warren, but she has to be kicking herself because she needed this type of performance in New Hampshire. It’s probably too late for her campaign to energize donors and help her beyond Super Tuesday.

MORNING MOMENTUM

WARNING SIGNS – The Dow Jones projected a 55-point decline this morning after U.S. markets continued to chase new highs. Goldman Sachs Group (NYSE: GS) is warning that a “correction is looking much more probable” in the face of coronavirus. U.S. hospitals are reportedly preparing for an outbreak of the illness here in the United States.

CHINESE CONDITIONS – This morning, Chinese officials confirmed that the death total rose another 114 victims to 2,118. It has now confirmed nearly 75,000 cases. Gold has just hit a seven-year-high after the Chinese central bank slashed its interest rates yet again to provide support to its economy.

OUCH – A headline under a website banner is worth a million words, especially when the banner is to your own website.

ACCRUED INTEREST

BUYING PATTERNS – TCI founder Christopher Hohn has made a name for himself over the last year. In addition to taking companies to task over climate change, he was also the industry’s highest-paid manager of 2019. Here’s a breakdown of what he’s buying and holding for the year ahead.

HERD MENTALITY – These are the biggest holdings among top managers today.

PRIVATE AFFAIR – The long sage of Leslie Wexner and the public markets will come to a close. Private equity giant Sycamore Partners will purchase L Brands (NYSE: LB) in a deal worth $1.1 billion. The company behind Victoria’s Secret will also see its CEO Wexner step down from his role at the firm after 50 years.

CARRIED INTEREST

FOREIGN FLOWS – Bond yields continue to fall in the face of cuts by central banks. But there’s a huge wave of capital sloshing around that is looking for a home – particularly from areas where interest rates are already negative. Here comes the incoming wave of capital from Japanese investors into the U.S. bond markets, says Vineer Bhansali over at Forbes.

WHAT APOCOLYPSE – Some people argue that robots will take our jobs. But a new PwC report indicates that artificial intelligence will be a gamechanger for the global economy. According to reports, AI can contribute at least $15.7 trillion to the global economy by 2030. The report says that $6.6 trillion of that money will come from increased productivity, while another $9.1 trillion will come from the side effects of human consumption.

QUOTES OF THE DAY

“No one is going to Mars that I know of, but it can’t be stopped right now, and these things tend to end badly.”

That’s Jim Cramer talking about the recent surge in Virgin Galactic Holdings (NYSE: SPCE). Shares have gone from $12 to more than $37 in a matter of weeks.

“The number of pages will probably be thousands of pages. I can’t go to TurboTax.”

That’s Michael Bloomberg stumbling through a question about his tax returns. The mention of TurboTax helped the accounting software giant’s name start trending on Twitter (NYSE: TWTR).

ACTIVE MANAGEMENT

ALL THAT GLITTERS – Hedge fund manager Crispin Odey has criticized the takeover attempt by Anglo-American for Sirius Minerals. Odey’s fund doesn’t think that 405 million pounds are enough for shareholders.

DIVESTING – Hedge funds DeepCurrents Investment Group and Sunriver Management are cutting ties with the Sackler family and its investment firm, Kokino. The Sacklers are behind Purdue Pharma, which has faced incredible scrutiny over the opioid crisis in the United States.

SOCIAL RESPONSIBILITY AND THE DAILYALTS PLAYBOOK

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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.