1/ I have spent the past few weeks in the depressing company of high-net-worth investors. The experience has been sobering, alarming, comedic, maddening, frustrating and ultimately cathartic. Here’s my summary conclusions: 2/ (1) Outfits like CNBC are doing untold damage because they feed a hype cycle that will ultimately prove to be disastrous for retail investors; (2) retail only cares about performance it can brag about at cocktail parties;

1/ In addition to the speculation surrounding ARK’s concentrated positions, there also has been much discussion on Twitter of her recent trend toward buying her own funds. You’ll be happy to know the SEC has this covered under Section 12 of the Investment Company Act. 2/ Before getting into Sec 12, many funds routinely purchase shares of other registered investment companies. And for clarity’s sake, a registered investment company is an open-end mutual fund, a closed-end, or an ETF.

1/ Alot has been written about illiquid, concentrated positions in ETF’s and the risk that poses to investors. A lot more will be written. You may be shocked to know that the SEC looked hard at liquidity provisions in RIC’s and actually imposed a new liquidity rule in 2019. 2/ The Rule, 22e-4, is commonly referred to as N-PORT. Complying with the rule was easy, but its costs were enormous ($86,000 annually to my funds in 2019). One of the rules mandated funds establish Highly Liquid Invest Minimums in any portfolio.

1/ Don't mean to speak for our boy, but I believe @Keubiko is saying is that ARK really isn't a serious money management shop. Perhaps even that ARK is deliberately playing to retail for obvious reasons (Narrator: No institution would take anyone that owns $WKHS seriously. 2/ You remember the breathless reporting from Bloomberg and others that discussed ARK's astronomical asset growth relative to the other big industry players, the real shops, and you might have rightly wondered, "where is the growth coming from?"

1/ With markets riveted by the action in $GME, attention has been turned to evil short sellers, which is natural. The action in $GME is made more compelling by the breathless reporting in the media that it was so heavily shorted, with more than 100% of its float short. Ooohhh. 2/ You know why investors get involved in heavily shorted names, and keep shorting them?

Because it works.

From March '08 through March '20, the most expensive to borrow US equities underperformed the least expensive to borrow shares by an average of 1.3% per month.

The con runs deep. Amazing how stupid and gullible people can be.

$TSLA

Covid isolation is negatively impacting the elderly.

Been visiting my 85 y.o. father-in-law this week. A month ago he fell and broke his hip, had surgery the week before Thanksgiving. Was ornery post-surgery and making slow progress on recovery. His only contact has been with my mother-in-law and the in-home nurse/aide. He's been sleeping in a hospital bed downstairs in what used to be the living room. He was spending too much time in the bed and in his wheelchair and grouchy. He wants to be in FL and is mad that he isn't. He's mad that he fell.

1/ For you youngsters that are unfamiliar with the inner workings of our business, let me translate this. All public registered vehicles are required to have a distributor by statute. Your distributor handles your broker dealer relationships (managing the various platform

https://twitter.com/orthereaboot/status/1327673925992591362

2/ requirements and regulatory compliance), and they oversee your factsheets and public communications (as does internal compliance). For that, most statutory distributor relations cost between 5-10 basis points per year. Kelso/Resolute was Ark's distributor.

1/ Here’s an interesting Covid dilemma brought to you by the fucking idiots in local government that can’t think their way out of a paper bag:

85 year old man falls and breaks hip and requires surgery. Leaving aside for the moment the limited to non-existent visiting hours and 2/ the issue that creates (ask any doctor what the typical elderly reaction is to post surgery anesthesia recovery and how being around familiar faces helps), family of said 85 year old is now faced with a dilemma.

What’s the rehab plan?

1/ I just listened to a fascinating call arranged by our friends @TweetMacro with John Fund, the Wall Street Journal columnist and author of books on voter fraud. Here’s the punch line: there was undoubtedly fraud in this presidential election but not enough to move the needle. 2/ Fund’s basic point was this election was rife with improprieties – probably more than most – but it’s too much for Trump to prove it in a short timeframe, and then get the establishment that has attempted to thwart him at every turn for four years to do anything about it.

1/ Last week The Second Biggest Idiot to Occupy a State House (BIOSH2) mandated that all MA residents MUST wear a mask at all times when outside the home, else one risks getting fined $300. You’re probably sitting there wondering, “how stupid can he be?” Allow me to show you. 2/ In the past two weeks, we’ve had 16,000 positive cases and 164,000 total since The Worst Plague of All Time graced our shores. BIOSH2 probably looks at this chart and says: “How many dumb conclusions can I draw from it?”

1/ Why I Hate Lawyers

with apologies to all you lawyers.

Back in the day there were really just two big off-the-shelf Order Management Systems (OMS) that most mid-sized shops used. Big firms often have their own customized solution. We used one of the two big ones. 2/ These things ain't cheap: $200k/yr for us for the Full Monty (compliance, accting etc.). These systems are 28(e) eligible (soft-dollar safe harbor in '34 Act), so we paid using commission credits. And in our heyday, we'd generate $300-400k annually in soft dollar credits.

13 F's out. That's F for Fraud.

Here's page 1. Lots of sellers. Some updates not filed yet (they have until tomorrow). Baron bought 1,800. Big of him. Jennison unloading 450k. Citadel has not yet filed. That's options related shares. Page 2. T Rowe a big seller again. Whale Rock is a Boston hedge fund, ex-Fidelity. Advisor Group is a new holder. Here are their top holdings.

1/ In the podcast referenced below, @profplum99 makes the excellent point that passive investing is having an outsized impact on price discovery; distorts it, and results in these seemingly blind v-shaped market recoveries (if I may paraphrase).

https://twitter.com/Paul91701736/status/1287470957918068736?s=20

2/ We agree with Michael on this subject and have had conversations w him about it. Still we all need context around the amounts in question. Passives have a role for sure, but don’t underestimate how much money is sloshing around in the hands of idiots (RobinHODLr’s).

1/ There is an easy way for $TSLA to boost its annual free cash flow and, more importantly, net income: eliminate interest expense.

With its converts in the money and Tesla owning calls, it could just let the bonds mature in normal course and pay the converts off in equity. 2/ Obviously, the net inc impact would be muted by dilution from newly issued shares, but wiping $641mm per year in interest expense would, one would think, be easy for a company with a $275bn mkt cap. Issue shares, tender for the bonds at a negotiated make-whole premium, voila.

1/ I’ve repeatedly told my children what we are seeing now in terms of violence and unrest is nothing compared to what we’ve seen before, 1968 in particular. 1968 was significantly more violent and significantly more global. In chronological order: 2/ March. The Polish 1968 political crisis was a series of major student, intellectual and other protests against the communist regime of the Polish People's Republic. At least 2,725 people were arrested between 7 March and 6 April.

1/ My objection to our COVID response (in MA) is the rigid, unthinking application of the restrictions. Last night, my 19 y.o. suffered a seizure at midnight. He was unresponsive at first, incoherent,next and acting like I stroke victim. Here were the 911 policies: 2/ Neither my wife nor I could ride in the ambulance. We could not go into the ER with him. We could not visit. A kid, who started out unconscious, and progressing to dazed and incoherent, in an ER by himself. We had to communicate with the doctor via phone calls and texts.

1/ This Tweet by Bill Fleckstein is worthy of comment because Mr. Fleckstein is thoughtful and successful and he has earned our attention. The sentiment he expresses here is obviously not new and not just his.

https://twitter.com/fleckcap/status/1267272148340490241

2/ Indeed, our feed is swamped by almost identical viewpoints from hundreds of others. Just try investing in Tesla since 2017 and you’ll know what we mean.

1/ I received many DM's from people asking what I meant by this post and asking me to elaborate. Happy to. As you know, we have long maintained Eleon has no real investor support, as evidenced by his shareholder list. He needs to raise and hasn't and he hasn't because. . .

https://twitter.com/cppinvest/status/1263944323042873344

2/ There is no one real willing to pay these prices for Tezzler shares. ETF's cannot participate in secondaries. So, he has to go to the broader market for support. And the broader market is telling him to stick it next to Vern's sub. Don't believe me? Here's a picture. . .

1/ I almost don't know what to say about what follows:

I had a conversation today with a guy I respect a great deal. A truly impressive intellect and experienced in our industry. Was the Chief Strategist for a $5bn RIA that sold to someone else, so a track record of success. 2/ We were discussing our new joint business venture, the details of which I will spare you. Just that a cornerstone of it is incorporating "shorting frauds" into portfolios we are crafting for this new business. We are leading with our ability to identify garbage.

Okay here are the relevant findings:

Finding 3. The Tesla electric vehicle posts crash fire and related damage to the lithium ion battery presented unusual electrical hazards to first responder. Finding 4. The Tesla's autopilot lane keeping steered the spotter utility vehicle into the left into the neutral area of the gore without providing alert to the driver due to limitations of the Tesla autopilot visions processing to maintain the appropriate lane of travel.