🍋 Hedge Fund's Big Bet Paying Off

Together With

Good Morning! As crypto markets have fallen, Anthony Scaramucci's Skybridge Capital has halted redemptions from its Legion Strategies fund. Crypto may have cooled down, but the UK is experiencing a record breaking heat wave, as temperatures push past 40 degrees Celsius (104 Fahrenheit).

Also heating up is the Twitter v Elon Musk saga, as a Delaware Court granted Twitter's request to jump start the proceedings, with the trial set to start in October. October is going to be exciting for another reason... Toys R Us is coming back! The childhood favorite will be opening up shops in Macy's stores this fall.

Sweater is a fintech platform providing everyday investors access to venture capital investing. If you're looking for a simple way to gain access to the VC asset class, Sweater is the way to go.

1. Story of the Day: Hedge Fund's Big Bet Paying Off

Hedge funds seemed to have gone out of favor in recent years thanks to lackluster performance despite being paid juicy fees. Well, one fund can justify its fees, and then some.

Mandeep Manku and his fund, Coltrane Asset Management, placed a huge contrarian bet in late 2020. His fund was hit hard when markets fell because of COVID. So, he decided to adjust his strategy from buying cheap European companies, to shorting tech and other companies seeing quick growth in the US.

The bet has paid off as Coltrane is now up 223% through June this year, but the prize didn't come without a sweat. After putting on the short, markets rallied and the fund lost 56% in 2020. A slight recovery for the fund of 19% in 2021 didn't do much for investors, who began exiting the fund. This caused AUM to drop from more than $1 billion, to less than $200 million in January 2022.

That's when the parlay hit though, and stocks crashed. Total gains amount to several hundred million dollars. Declines in pandemic era golden children like Netflix and Peloton contributed to performance. Other contributors included shorts on Meta, Roblox, Rivian, and Carvana.

Short Squeez Takeaway: Watch out Michael Burry, there's a new strong-willed sheriff in town. Holding on to those positions for two years, despite everything going seemingly against must have been just a tad bit frustrating to say the least. Stuart Roden, an early investor and ex-chairman of Lansdowne Partners said, "He's a conviction manager. He didn't get out at the wrong time. That's extremely difficult."

2. Markets Rundown

Never fear, corporate earnings are here! Corporate earnings today helped spark a rebound from yesterday that was caused by Apple's negative outlook and decision to slow hiring.

Movers & Shakers

• (+) Boeing ($BA) +6% thanks to multiple deals for plane orders being announced.

• (+) Carnival ($CCL) +7% as all cruise and airline stocks traded higher on continued strong demand.

• (–) IBM ($IBM) -5% after the company warned the strong dollar could serve up a $3.5 billion hit, stealing the spotlight earnings and revenue beats.

Private Dealmaking

• Delfi Diagnostics, a liquid biopsy company, raised $225 million

• Stori, a credit card startup, raised $150 million

• Flip, a social commerce start-up, raised $60 million

• The French government offered to take over power company EDF for $9.8 billion

• Meow, a crypto treasury firm, raised $26.3 million

• The United Arab Emirates launched an $800 million fund for space initiatives

3. Top Reads

• Banks’ snubbing of junk-rated loan funds worsens financial logjam (Reuters)

• Why the US Treasury recommends ‘friend-shoring’ in boosting supply-chain resiliency (CNBC)

• Google will once again test augmented reality glasses in public (CNBC)

• Goldman warns it may slow hiring, cut expenses as deals slump (Reuters)

• Microsoft president sees new era for stagnating labor pool (Reuters)

• Why India’s world-beating growth isn’t creating jobs (BB)

• UK inflation hits new 40-year high of 9.4% as cost-of-living crisis deepens (CNBC)

• Advertisers locked out of Netflix for years now have big plans (WSJ)

• People have money but are forgetting to pay bills (WSJ)

A Message from Sweater Ventures: The Venture Capital Fund for Everyone

Sweater opens venture investing for everyday investors, regardless of accreditation status.

The venture capital ecosystem was begging for change. The majority of investors—even founders, analysts, and venture insiders—couldn’t meet the requirements for most of the existing paths into venture investing, so we decided to reshape the landscape for everyone, for you.

With the Sweater app, you can start investing in venture capital at a low minimum investment and grow your position in the fund with automatic recurring investments. We report on the investments we make right back to you through the app.

Venture capital shapes the future, and here at Sweater, we believe the right to shape that future belongs to everyone.

Sweater VC has officially launched. Download the app.

4. Book of the Day: Uncharted: How To Navigate The Future

How can we think about the future? What do we need to do—and who do we need to be?

In her bold and invigorating new book, distinguished businesswoman and author Margaret Heffernan explores the people and organizations who aren’t daunted by uncertainty.

We are addicted to prediction, desperate for certainty about the future. But the complexity of modern life won’t provide that; experts in forecasting are reluctant to look more than 400 days out. History doesn’t repeat itself and even genetics won’t tell you everything you want to know. Tomorrow remains uncharted territory, but Heffernan demonstrates how we can forge ahead with agility.

Drawing on a wide array of people and places, Uncharted traces long-term projects that shrewdly evolved over generations to meet the unpredictable challenges of every new age. Heffernan also looks at radical exercises and experiments that redefined standard practices by embracing different perspectives and testing fresh approaches. Preparing to confront a variable future provides the antidote to passivity and prediction.

Ranging freely through history and from business to science, government to friendships, this refreshing book challenges us to mine our own creativity and humanity for the capacity to create the futures we want and can believe in.

“When we trade the effort of doubt and debate for the ease of blind faith, we become gullible and exposed, passive and irresponsible observers of our own lives.”

5. Short Squeez Picks

• Who’s wearing $420 men’s socks?

• Why 20,000 delayed flights a day isn’t going away soon

• Will employers scale back perks like PTO as economy sours?

• New study reveals ages when drinking may be most damaging

• How putting your face in airplane mode can provide safety

6. Daily Visual: How Cities & Counties are Budgeting their COVID Relief Funds

Includes submitted project data from 329 local governments through Dec. 31, 2021; Analysis as of July 12, 2022

Source: Axios

7. Daily Acumen: 7 Smart Questions to Ask During A Job Interview

1. What does “success” mean in this role?

2. Am I a good fit for the company? 

3. What challenges did my predecessor face? 

4. What was the last person in this role missing? 

5. Do you have any doubts about my profile? 

6. Where will this role go in the future?

7. What is the company culture like?

Source: Michael Page

8. Crypto Corner by Bonkalytics.com

• Crypto is making a big comeback. Will it last?

• Former Celsius employees say issues plagued crypto company years before bankruptcy

• On holding your breath for a Bitcoin bounce

• Dutch central bank fines Binance $3.3 million Euros

• Is the Ethereum merge driving this rally?

• Spot Bitcoin ETF approval hinges on big ask

For more crypto-focused content, sign-up here.

9. Memes of the Day

*****

*****

Want to reach an audience of 100,000+ business leaders, young professionals, and policy influencers? Advertise in Short Squeez.