🍋 Apollo's Shakespearean Tragedy

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Good morning! S&P 500, Nasdaq pulled off one of the greatest comebacks in stock market history yesterday. ("13 second" Mahomes will be proud) Both ended the day in positive territory after being down bad midday (S&P 500 finished +0.3% from -4.0% and Nasdaq ended +0.6% from -4.9%). New York’s mask mandate for schools and other public places was struck down and ruled unconstitutional by a Long Island judge. The magic number for retirement is apparently $1.9 million. According to a study by Charles Schwab that's the number Americans want on average in their bank at retirement, and 53% think they are "very likely" to reach their goal.

Please find the results of the Wall Street compensation survey here. Comments or questions? Email us.

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1. Story of the Day: Apollo's Shakespearean Tragedy

Private equity giant, Apollo, is typically in the news for its deal-making. Not today though. There is some Mean Girls-esque drama taking place over at 9 West 57th Street. The firm’s two co-founders, Leon Black and Josh Harris, long-time besties have had a major falling out. Leon Black has accused Josh Harris of plotting his removal after being passed as CEO.

Black has been embroiled in a rape and defamation case brought by his ex-lover and Russian model, Guzel Ganieva. In a filing last week, he accused Josh Harris of organizing a coup to overthrow Black.

Josh Harris "waged a highly coordinated and orchestrated campaign to destroy Mr. Black’s professional and personal reputation…. whispered to investors, placed articles and ultimately supported and encouraged an effort by Ms. Ganieva to make knowingly false claims in the courts about her relationship with Mr. Black," said Black’s lawyer.

The conspiracy theory goes that Harris had tried to overthrow Black after his ties to late sex-offender, Epstein went public, who he reportedly paid $158 million for "tax advice." Black and Apollo's board instead promoted the 3rd guy in-line, Marc Rowan to be CEO, which lead to Harris’ smear campaign.

"Like Shakespeare’s Iago, enraged by being passed over for promotion, he turned his wrath on his mentor and leader. Harris convened a veritable war cabinet of advisers to take on the founder, the report, and Apollo itself -- his very own company" wrote Black’s legal (or prob art) team.

Josh Harris, who recently stepped down from his day-to-day role at Apollo, denied the claims in a statement. "These allegations are desperate and completely false" but did admit being upfront with Black about his ties to Epstein: "was direct with Black, that his connections to Epstein were damaging the company… Black’s relationship with Epstein was disqualifying, plain and simple."

Short Squeez Takeaway: Maybe Leon Black is spiraling out of control after not only losing the Apollo throne but also his reputation, and now wants to take down his co-founder with him. (@Netflix can we pls get a movie on this asap?) Either way Apollo stock is not liking this ruckus being caused by Leon Black. Since the NYT article was published of Black’s payments to Epstein, the stock has significantly underperformed its competitors.

Source: Bloomberg, NYT, WSJ

2. Markets Rundown

Stocks finally ended the mini recession on Monday, as all major indexes scored sharp intraday reversals to end in positive territory.

Movers & Shakers

• (+) Kohl's ($KSS) +36% following news the company is fielding takeover offers from at least two companies.

• (+) Peloton ($PTON) +10% after activist investor Blackwells Capital called on the company to fire CEO John Foley.

• (–) Netflix ($NFLX) -3% after Jefferies downgraded the stock to hold from buy.

3. Top Reads

• The rise of the 15-minute meeting — and how to run one (CNBC)

• How delivery apps created 'the Netflix of food ordering' (BBC)

• Shopify eases concerns over fulfillment network changes, shares rebound (Reuters)

• GameStop, meme stocks hit by market turmoil (WSJ)

• IBM shares jump after company reports 6% revenue growth in fourth quarter (CNBC)

• The banker who can't stay out of the headlines (BBC)

• Credit Suisse issues fourth-quarter profit warning as legal costs rise (CNBC)

• NJ restaurants go viral for threatening workers with ‘5 star’ review policy (Fox)

• Dalio says US in decline as China rises, warns of election risk (BB)

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4. Book of the Day: The Drunkard's Walk: How Randomness Rules Our Lives

With the born storyteller's command of narrative and imaginative approach, Leonard Mlodinow vividly demonstrates how our lives are profoundly informed by chance and randomness and how everything from wine ratings and corporate success to school grades and political polls are less reliable than we believe.

By showing us the true nature of chance and revealing the psychological illusions that cause us to misjudge the world around us, Mlodinow gives us the tools we need to make more informed decisions. From the classroom to the courtroom and from financial markets to supermarkets, Mlodinow's intriguing and illuminating look at how randomness, chance, and probability affect our daily lives will intrigue, awe, and inspire.

“We all understand that genius doesn’t guarantee success, but it’s seductive to assume that success must come from genius.”

5. Short Squeez Picks

• The NFL’s overtime rule is under attack after a coin flip decided a classic

• Seven money rules

• Gregory Zuckerman on the crazy race to create the COVID vaccine Podcast

6. Daily Visual: US Bank Branch Net Closings

Source: Axios

7. Daily Acumen: Humility and Investing

Being humble in investing isn’t about being doubtful of yourself, or believing that you are untalented, unintelligent, or unworthy. On the contrary, it is about being humble about our own intellect, to question whether what we know is actually correct and even to adjust our beliefs if we are presented with new information. In other words, it is largely to do with intellectual humility.

As Philip Tetlock wrote in Superforecasting, true humility (in investing) is about recognizing that “…reality is profoundly complex, that seeing things clearly is a constant struggle when it can be done at all, and that human judgment must, therefore, be riddled with mistakes.”

Very few investors have the nerve to say, “I don’t know.” But that’s how you build humility in your investment process. If you start with “I don’t know,” then you are unlikely to act so boldly as to get into trouble.

8. Crypto Corner

• No regrets for NYC mayor receiving his first Bitcoin paycheck during dip

• Wharton accepts crypto payments for blockchain program tuition fees

• Traders are complaining about Solana's performance, raising questions about its status as a Wall Street darling

• KKR leads $350M raise for crypto custody bank Anchorage Digital

• Paris Hilton says that the Metaverse will be the ‘future of partying’

9. Memes of the Day

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