Tilson’s email to investors discussing a liquidity-driven market; slowly taking profits; the bankruptcy bubble; Chesapeake Energy is a zero
Whitney Tilson’s email to investors discussing a liquidity-driven market; slowly taking profits; the bankruptcy bubble; Chesapeake Energy is a zero; Jeff Bezos is happy to lose a customer.
Q1 2020 hedge fund letters, conferences and more
1) Despite the unprecedented job losses and massive recession, the Nasdaq Composite Index closed at an all-time high yesterday, up more than 40% from its March lows… and the S&P 500 Index is now in positive territory this year.
It’s hard to believe that we’re only two and a half months removed from the utter panic of late March, when I took my personal account from 15% cash to more than 80% invested and was pounding the table that it was the best buying opportunity since the global financial crisis…
On the day the market bottomed on March 23, under the headline “Why this is the best time to be an investor in more than a decade,” I wrote in my daily e-mail:
I’ve been spending every waking moment over the past week preparing for the free webinar that my colleague Enrique Abeyta and I are hosting tomorrow night at 8 p.m. Eastern time on the coronavirus crisis and its implications for investors.
I’ve given hundreds of presentations over the years, including many in which I warned investors about the great financial crisis long before the storm hit.
But I think this presentation is the most important of my life…
During the webinar, we’ll explain, in great detail, why we’ve come to the firm conclusion that this is the absolute best time to be an investor in more than a decade. To borrow a phrase from one of my friends, “we’re trembling with greed” right now.
Had you told me then that our recovery from the coronavirus crisis would be as halting and tepid as it’s been (which I covered in last Tuesday’s and yesterday’s e-mails), I would have guessed that the market might be up 10% to 20%, not 30% to 40%…
This certainly underscores the adage, “Don’t fight the Fed.” By that I mean that this rally is primarily being driven by the unprecedented liquidity being pumped into the market rather than a strong economic rebound (notwithstanding Friday’s stunning jobs report).
