"You are never too smart to be confused.” — Bill Gates
Good Morning! Goldman is bullish on IPOs - it sees the market reopening if the Fed slashes rates next year. And that’s great news for fashion brands - Alo Yoga hired Moelis to raise capital at a $10 billion valuation, and Shein is gunning for a $90 billion IPO valuation. KKR and Carlyle released earnings, and they’re all-in on private credit as LBOs dry up. The Fed thinks the U.S. has two million retirees too many. And Vivid Seats bought Vegas.com for $240 million.
Today’s edition is brought to you by hear.com - the device ushering in a new era of hearing clarity.
SQUEEZ OF THE DAY
Barbarians at the BnB
Your next Airbnb host could be a…private equity firm.
TPG is one of the largest megafunds in the game, with $135 billion in assets under management. Their latest bet is snatching up single-family homes and turning them into your next Airbnb hotspot.
Private equity firms gobbling up single-family homes isn't exactly new. But what sets TPG apart is that they're specifically doing it to become short-term rental landlords.
Texas-based TPG sees massive opportunity in Florida. Since the pandemic, travelers have mixed business with pleasure, extending their stays by days or even weeks. And they don’t want to stay in a cramped hotel suite.
Execs at TPG are betting big on what they call "bleisure" travelers - flexible remote workers and families who want space, a kitchen and privacy.
Takeaway: Right now, TPG says they’re just testing it out in Florida, but could be open to expanding its market reach. If other big investment firms decide to copy this playbook and start renting out homes nightly in major tourist markets, it could disrupt the hotel industry even further. They're already battling it out with the Airbnb and Vrbo crew, and now private equity is joining the party.
Stocks closed higher, scoring their longest win streak in 2 years.
(+) Planet Fitness ($PLNT) +13% after the gym chain hiked its forecast because of a boost in membership and store growth.
(+) Tripadvisor ($TRIP) +11% after beating profit estimates, selling more travel packages.
(–) Re/Max ($RMAX) -9% after Morgan Stanley downgraded the real estate company.
Vivid Seats bought Vegas.com, a Las Vegas entertainment website, for $240 million
Better Collective bought Playmaker Capital for $188 million
Enable, a rebate management platform, raised $120 million
May Mobility, a micro-transit company, raised $105 million
Xpressbees, an e-commerce logistics firm, raised $80 million
Volante Technologies, a cloud payments company, raised $66 million
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Carlyle CEO says firm working with urgency to grow, cut costs (YF)
IBM debuts $500 million enterprise AI venture fund (Axios)
Why the U.S. won’t change physical cash (CNBC)
Why higher U.S. unemployment is a worry (Axios)
Frustrations over housing market bleed into Americans’ view of economy (YF)
Bridgewater had believability issues (BB)
Americans turn to credit cards for everyday expenses, balances jump to $1.08 trillion (CNBC)
Apple delays work on next year’s iPhone, Mac software (YF)
A $5B recipe for success in private equity M&A (BB)
The price of money is going up, and it’s not just because of the Fed (YF)
BOOK OF THE DAY
The Big Fail
In 2020, the novel coronavirus pandemic made it painfully clear that the U.S. could not adequately protect its citizens. Millions of Americans suffered—and over a million died—in less than two years, while government officials blundered; prize-winning economists overlooked devastating trade-offs; and elites escaped to isolated retreats, unaffected by and even profiting from the pandemic.
Why and how did America, in a catastrophically enormous failure, become the world leader in COVID deaths? In this page-turning economic, political, and financial history, veteran journalists Bethany McLean and Joe Nocera offer fresh and provocative answers.
With laser-sharp analysis and deep sourcing, they investigate both what really happened when governments ran out of PPE due to snarled supply chains and the shock to the financial system when the world's biggest economy stumbled.
In the tradition of the authors’ previous landmark exposés, The Big Fail is an expansive, insightful account on what the pandemic did to the economy and how American capitalism has jumped the rails—and is essential reading to understand where we’re going next.
“First-rate reportage with astute big-picture analysis.”
Short Squeez Picks
11 little mindset changes anyone can make
Google’s CEO on hindsight and avoiding regret
6 universal practices of great managers
New York is too expensive
Inside James Comey’s bizarre $7 million job at a hedge fund
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Charlie Munger on achieving success:
It's so simple: you spend less than you earn.
Avoid toxic people and toxic activities.
Try to keep learning all your life.
And do a lot of deferred gratification.
If you do all those things, you are almost certain to succeed.
And if you don't, you'll need a lot of luck.
And you don't want to need a lot of luck.
You want to go into a game where you're very likely to win without having any unusual luck.
Memes of the Day