The DailyAlts Playbook – January 27, 2020

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THE DAILYALTS PLAYBOOK

January 27, 2020

Today, the DailyAlts Playbook talks Kobe Bryant’s legacy, the Monday meltdown, insider trading, and impeachment.

PRIME OVERVIEW

We start today with a later-than-usual publishing time as we honor Kobe Bryant. The correct words have been elusive since the news of his death.

The NBA legend passed away Sunday in a helicopter crash in California that claimed nine victims, including Bryant’s 13-year-old daughter. Bryant sits atop a shortlist of the greatest players in NBA history and leaves behind a remarkable legacy both on and off the court.

Bryant won NBA titles, an MVP award, and two Olympic gold medals. His competitiveness was on the next level. And his determination spilled over to the business world following his retirement.

I will remember Bryant for an interview he gave in 2016 at the SALT Conference in Las Vegas. At the time, he was departing basketball and facing the challenge of transitioning away from the court. In that interview, he spoke of his love for writing – a passion that would earn him an Academy Award.

He spoke about his new goals, his novels, and hinted more about his pending ventures. He not only earned $200 million for his venture in BodyArmour, but he was also writing and co-directing the brand’s ads. He was also quietly building a venture capital firm Bryant Stibel, which had invested in companies like LegalZoom and Epic Games.

That interview was one of the hundreds of Kobe Bryant conversations, but it was personal and intimate as I watched it. It was a reminder that everyone should do what they love. I wouldn’t be up pointing a camera at the world and writing as much as I do on the markets unless I’d heard Bryant’s message that day.

Bryant was 41. The NBA has lost a legend. For the world of alternative investments, it lost an inspiring entrepreneur just entering his prime.

MORNING MOMENTUM

THE SELLOFF STARTS: Momentum signals broke down on Friday, and today a massive selloff is underway. The Dow and S&P 500 are off 1.5% each as the number of cases of coronavirus rise around the world. At least 81 people have died in China, and the government has confirmed 2,862 cases. Leaders of the World Health Organization are traveling to China to meet with officials. An unnamed nurse said that the number of actual cases is north of 90,000. Meanwhile, videos on Twitter show nurses complaining about knock-off medical supplies. CNN has also reported that the disease has affected more than a dozen hospital staff members.

CRUDE REALITY: Oil prices have plunged to a five-month low as economic worries rattle broader sentiment. Analysts expect that oil will remain lower for longer as a result of the outbreak. Meanwhile, China stocks are plunging in premarket hours. So too are commodities like copper, aluminum, nickel, and iron ore.

EARNINGS MOMENTUM: This will be a very busy week on the earnings front. We’ll be eyeing reports from Apple, Facebook, Samsung, Caterpillar, Unilever, Exxon Mobil, Boeing, GE, United Technologies, Lockheed Martin, and Chevron.

ACCRUED INTEREST

YOU DON’T SAY: A new study has confirmed that it’s “not what you know, but who you know.” In the cast of startups, success is highly influenced by employees’ existing professional connections.

BOLTON BOMBSHELL: The ongoing impeachment trial continues in Washington, even if people aren’t paying much attention. Over the weekend, the New York Times cited a book by former NSA adviser John Bolton that claims President Donald Trump sought to freeze aid to Ukraine until it agreed to investigate his political rivals.

CARRIED INTEREST

GETTING PASSIVE: The U.S. ETF business finished 2019 with an AUM of $4.4 trillion. That figure represents a 30% jump from 2018, according to etf.com. The market also saw an 8% jump in the number of ETFs to 2,302. That same report indicates that active management and ESG funds helped fuel the uptick in all of the listed figures.

BLACKROCK PRESSURE: If BlackRock thought that its shift on ESG investment would stave off protestors and buy goodwill, they were likely wrong. French protestors have taken to the street to protest pension reform across the country. BlackRock has been made a major scapegoat for its lobbying role that helped influence reform.

JOB TROUBLE: It appears that U.S. hiring showed signs of cooling in Q4.

QUOTES OF THE DAY

“Climate change presents an immediate systemic and material risk to the ecological, societal and financial stability of every economy and country on the planet. It is therefore a strategic investment priority for us.”

That’s a policy document from Brunel Pension Partnership. The firm said that asset managers must make changes that align with the group’s climate goals or they will pull their investments.

“It’s bittersweet. I’ve had a phenomenal career.”

That’s Glenn Dubin to Reuters. The hedge fund billionaire announced his retirement after 4o years in the money management business.

ACTIVE MANAGEMENT

ENERGY EFFORT: ARCM has boosted its campaign against Premier Oil. The fund has opposed the firm’s goal of buying North Sea assets from U.S. firm Dana and BP.  ARCM has a large short position in Premier and said it could try to block the deal in court.

TACO PARTY: AREX Capital Management has taken an 8.5% stake in Fiesta Restaurant Group, according to filings. Fiest owns fast-casual restaurants Pollo Tropical and Taco Cabana. The activist is reportedly meeting with the company to discuss its operational strategy.

LIABILITIES

INSIDER OVERSIGHT: Preet Bharara’s task force is pushing for tighter restrictions on insider trading. Influential lawyers now want to make insiders liable for insider trading even if they don’t personally benefit from the sharing of non-public information.

SUNSHINE DISINFECTANT: Jeff and Paulette Carpoff owned DC Solar, a firm that would take on investments from companies like Berkshire Hathaway. On Friday, they pled guilty to operating a massive Ponzi Scheme that netted them $1 billion.

SOCIAL RESPONSIBILITY

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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.

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