🍋 College Kid Makes $110 Million
Good Morning! Unless you're in the UK, as inflation hit double digits for July (10.1%), signaling a rough time ahead. Over in the UK as well, Elon Musk joked about buying legendary "football" club, Manchester United (who have had their worst start to a season in 100 years), sending shares up 17% in premarket trading. Back on our side of the pond, Fed meeting minutes show that it will keep raising rates until inflation cools down. (RIP millennials trying to buy a house)
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1. Story of the Day: College Kid Makes $110 million
Most of y'all reading this probably have a personal brokerage/trading account. Some of y'all reading this probably think you're pretty good at making money. None of y'all reading this (well, maybe one person) are as good as Jake Freeman.
Who's Jake Freeman you ask? He's a 20-year-old applied mathematics and economics major at USC (Southern California, sorry Gamecocks) who has made roughly $110 million after selling a stake in Bed Bath & Beyond.
According to regulatory filings, Freeman bought almost 5 million shares in BBBY in July, after terrible earnings and the dismissal of the CEO sent the stock cratering. Buying at under $5.50 a share, Freeman has sold more than $130 million worth as the price has recently surged to over $27 a share thanks to retail investors and meme stock enthusiasts.
Freeman said, "I certainly did not expect such a vicious rally upwards. I thought this was going to be a 6 months plus play... I was really shocked it went up so fast." After essentially hitting the lottery, Freeman went to dinner with his parents in the suburb of NYC where they live, and then flew back to LA to get back to campus.
Jake has interned at Volaris Capital, a New Jersey hedge fund, for a few years, and published a paper with the founder, Vivek Kapoor, called "Irreducible Risks of Hedging a Bond with a Default Swap." That was done before he turned 17.
Short Squeez Takeaway: Freeman's initial stake cost roughly $25 million, which was raised from friends and family. I didn't mean to discredit him, he's got some serious investing chops. For example, he and his uncle who he's been investing with for years, built an activist stake in a public pharma company called Mind Medicine.
Anyway, Jake, if you're reading this, sincere kudos to you. Best of luck with your fund, Freeman Capital Management, and feel free to send us some tips if you want to spread the wealth.
2. Markets Rundown
All markets were down as what might be a bear market rally took a bit of a pause.
Movers & Shakers
- (+) Bed Bath & Beyond ($BBBY) +12% as retail meme stock enthusiasts try to get the share price to the "beyond."
- (+) Agilent Technologies ($A) +7% after the company reported better than expected revenue and profit for its most recent quarter.
- (–) Krispy Kreme ($DNUT) -12% thanks to quarterly results including lower than expected profits and revenue.
- DriveNets, a cloud-based networking startup, raised $262 million
- Orna Therapeutics, an RNA biotech company, raised $221 million
- Guesty, a property listing platform, raised $170 million
- HiBob, an HR software company, raised $150 million
- AtoB, a payment system for truckers, raised $80 million
- SAIC Mobility Robotaxi, a Chinese state-owned automobile arm, raised $148 million
3. Top Reads
- Retail sales flat in July amid fall in gas prices and drop in auto sales (CNBC)
- Citibank’s latest battle over accidental $500 million Revlon loan payment (Axios)
- WallStreetBets founder explains how subreddit ‘speaks a language’ that makes finance accessible (YF)
- Bed Bath & Beyond snatched meme crowd with blistering 300% August rally (YF)
- Halloween expected to be immune to inflation (Axios)
- Wall Street analysts bet on another red-hot commodity rally before year-end (CNBC)
- Fed’s rate hikes hammer housing affordability (Axios)
- Chinese property developers’ cash flows have plunged by more than 20% (CNBC)
- Why peak inflation is ambiguous for the U.S. dollar (Reuters)
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4. Book of the Day: Toxic Positivity: Keeping It Real in a World Obsessed with Being Happy
Every day, we're bombarded with pressure to be positive. From "good vibes only" and "life is good" memes, to endless advice, to "look on the bright side," we're constantly told that the key to happiness is silencing negativity wherever it crops up, in ourselves and in others.
Even when faced with illness, loss, breakups, and other challenges, there's little space for talking about our real feelings--and processing them so that we can feel better and move forward.
But if all this positivity is the answer, why are so many of us anxious, depressed, and burned out?
In this refreshingly honest guide, sought-after therapist Whitney Goodman shares the latest research along with everyday examples and client stories that reveal how damaging toxic positivity is to ourselves and our relationships, and presents simple ways to experience and work through difficult emotions.
The result is more authenticity, connection, and growth--and ultimately, a path to showing up as you truly are.
“Allow yourself to experience what it means to be a human, the good and the bad.”
5. Short Squeez Picks
6. Daily Visual: Employee Happiness Trumps Pay
Job aspects that contribute to well-being; survey of 5k+ US adults
7. Daily Acumen: Size Matters
When it comes to the brain, size matters. You do not want a smaller brain.
Smoking constricts blood flow to the brain. It prematurely ages your skin and it prematurely ages the brain.
As your blood pressure goes up, the blood flow to your brain goes down. So, you need to know your blood pressure on a regular basis, and if it's high, take it seriously.
Diabetes, standard American diet, environmental toxins, lack of exercise, and ANTs - Automatic Negative Thoughts, the thoughts that come into your mind automatically and ruin your day. They are the seeds of anxiety disorders and depression.
So, if this is true, it is, what are the things you can do to help your brain?
Positive social connections. The people you spend time with determine your longevity.
Isn't that interesting?
If you spend time with people who have healthy health habits, you pick those up, because people are contagious. If you spend time with people who do not have healthy habits, you die early.
Become very serious about who you spend your time with.
Whenever you learn something new, your brain makes a new connection. When you stop learning, your brain actually starts to disconnect itself.
Diet is absolutely essential. You are consuming the nutrients that are helping you, or the toxins that hurt you.
The SAD diet, the Standard American Diet, is not only associated with heart disease, cancer, and diabetes. It's associated with depression, attentional problems, and Alzheimer's disease. Food is medicine, or it is poison.
Sleep is absolutely essential. Because you know, in 1900, we got, on average, nine hours of sleep at night. In 2022, we get six hours of sleep at night, if we’re lucky.
Less than seven hours of sleep, you get lower overall blood flow to the brain. Your brain cannot go through that kind of transition in such a short period of human history, without there being very serious consequences.
And as sleep goes down, weight goes up, because your cravings get out of control. So, being physically healthy is very important.
Source: Daniel Amen
8. Crypto Corner
- Crypto.com gets UK regulatory approval
- Crypto is transforming the green finance universe
- Distrust in state-backed currency sows crypto adoption in Latin America
- Losses from crypto hacks surged 60% to $1.9 billion from January to July
- ECB steps in as banks dip toes in crypto pool
- Bankrupt crypto lender Celsius considers restructuring finance proposals
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9. Memes of the Day
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