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20 Feb, 4 tweets, 4 min read
Coming up on @realmoney on Monday

When Short Selling Is Done Right

* Short selling is risky
* Most individual investors would be better off to avoid short selling
* The academic evidence on the effects of short selling on our capital markets is overwhelmingly positive
* Short
selling improves the efficiency of security prices, increases liquidity, and positively impacts corporate governance

"We don’t like trading agony for money"
- Charlie Munger (in his response to my question when I was the "credential bear" at the 2013 Berkshire
Annual Meeting) @jimcramer @tomkeene @lizclaman @andrewrsorkin @BeckyQuick @riskreversal @ScottWapnerCNBC @convertbond @EpsilonTheory @LanceRoberts
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More from @DougKass

Dougie Kass Profile picture
17 Feb
@realmoney

Will The Real TINA Stand Up?
* Is the three hour tour over?
* Has Proud Mary stopped burning?
* I am not sure
* While the "TINA Ripper" I envisioned last April has taken place, I am sure the case for the TINA trade ("there is no alternative") is now vastly
diminished
* The relationship between the ten year US note yield and the S&P dividend yield has flip flopped in the last eleven months - presenting, in all likelihood, a quick death of the TINA argument - see the important chart below!
* So long TINA, it was good to know ya...
and say hello to CITA ("cash is the alternative") @jimcramer @tomkeene @SquawkCNBC @cnbcfastmoney @andrewrsorkin @lizclaman @riskreversal @carlquintanilla @convertbond @EpsilonTheory

Which TINA?
*
Read 4 tweets
Dougie Kass Profile picture
16 Feb
@realmoney
Feb 16, 2021 | 02:10 PM EST DOUG KASS
MicroStrategy's Gimmickry
* If you want to own bitcoin, buy bitcoin and not MicroStrategy!

This move to sell bonds to acquire additional bitcoins could be among the dumbest capital allocation moves I have seen in a long time.
Without rendering a verdict on bitcoin, my point simply is that if an investor likes bitcoin, just buy bitcoin.

There is no reason to buy MSTR to own bitcoin.

In fact, any bitcoin they own should be valued at a discount to its current price, because you have no control
over it. Yet MSTR's stock price has ripped and it means people are valuing the bitcoin at substantially more than what MSTR paid for it.

This is a good gimmick for them for the time being, but if I were an insider there I would be selling stock hand over fist and I suspect
Read 4 tweets
Dougie Kass Profile picture
12 Feb
Up on @realmoney
Feb 12, 2021 | 08:45 AM EST DOUG KASS
We All Live in Cathie Wood's World! (But That Could Change Quickly)
* In this market cycle, ARK Invest is at the forefront of investing in disruptive technology

* But I hear the echoes of the "Nifty Fifty Era"
and The Dot.com Boom in today's current market conditions

* ARK is not the first to shoot lights out in the market and to gain massive assets under management

* We should look at the bank trust departments in the late 1960s/early 1970s and the Janus Funds
(especially the Twenty Fund) during the dot.com era to remind ourselves of boom/busts in money management

* ARK may be an intriguing short for those that believe stocks (and technology in particular) are currently overpriced

In every stock market cycle there
Read 6 tweets
Dougie Kass Profile picture
11 Feb
@realmoney
Supersizing My Disney Short Now
"Price is what you pay, value is what you get."
- Warren Buffett

In late March, 2020 I purchased Disney and placed in on my Best Ideas List at $93. At that time, the herd, fearful of the impact of Covid-19 hated the stock which hit a
multi-year low.
The shares are trading in the after hours above $195 now on top and bottom line beats. Everyone loves Disney as an "opening up trade."
I faded the consensus eleven months ago and I am doing the same today.
The reason I am shorting the shares is that if you
apply conservative multipliers to the cash flow of the company's non streaming business - the balance, streaming, has a ridiculously high valuation.
I have moved to a very large short in this name in the after hours $DIS @Jimcramer @tomkeene @cnbcfastmoney @SquawkCNBC
Read 4 tweets
Dougie Kass Profile picture
9 Feb
@realmoney

Feb 09, 2021 | 12:20 PM EST DOUG KASS
Contrary to the Conventional View, the Case for Short Selling Has Improved
* The unfolding of recent events has created an abundance of short selling opportunities

Bull Markets emerge from adversity and bad news, while bear
markets are borne out of prosperity and good news.

So it is with investing methodologies and styles.

To wit, I can't remember when short selling was such a target as today.

And I can't remember - given the market's structural profile and economic/profit uncertainties -
when the opportunities to short have been so attractive.

It is my view to be greedy when others are fearful (of the short side) especially with the apparent distortion between current share price levels and my calculation of "fair market value."

Frankly, when hedge hoggers
Read 5 tweets
Dougie Kass Profile picture
9 Feb
Coming up on @realmoney an interesting angle on the market meltup not discussed widely...

The Virtuous Cycle of Passive Investing - A Winter's Ball

* The teutonic shift from active to passive investing is an under appreciated reason for the recent market meltup
* Passive
investing has resulted in a massive buyer that is materially insensitive to price and indifferent towards fundamental analysis
* Passive inflows are "stickier" than active inflows - this helps to reinforce the (recent) virtuous market cycle and explains the steady surge in prices
* Passive investing, when accompanied with a period of constant product inflows, reduces the markets' "float" and supply of equities
* Lowered floats (and a reduced supply of equities) combined with unprecedented liquidity-driven demand have been a tasty cocktail that has taken
Read 5 tweets

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