🍋 Juul-bye

The FDA is set to order Juul e-cigarettes off the US market. President Biden outlined a plan to lower gas prices by $1 per gallon. Fed Chair Jerome Powell said that a US recession is a possibility. The SEC is proposing new rules for online brokers and their game-like features. For the first time, two women, Janet Yellen and Marilynn Malerba, will have their signatures on the US dollar.

Short Squeez
June 23, 2022

Together With

"What the wise man does in the beginning, the fool does in the end." — Howard Marks

Good Morning! President Biden outlined a plan to lower gas prices by $1 per gallon using a three-month federal gas tax holiday, waiving the federal tax, and calling on the powers that be to increase refining capacity. Fed Chair Jerome Powell said that a US recession is a possibility as the Fed plots its aggressive hikes to reduce record inflation. The SEC is proposing new rules for online brokers and their game-like features, so they're clearly not taking the power of retail brokers lightly at all. For the first time, two women, Janet Yellen and Marilynn Malerba, will have their signatures on the US dollar.

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1. Story of the Day: Juul-bye

The FDA is set to order Juul e-cigarettes off the US market. This has spurred a run on convenience stores, as vapers are stocking up ahead of a Juul Winter. On Twitter, one user wrote, "My husband is out on a Juul run right now. Gonna clear the shelves and hoard 'em like our incandescent bulbs."

E-cigs hit the scene and were immediately the cool thing to have, like fidget spinners or a T-Mobile sidekick (for all my millennials out there). After landing in the FDA's crosshairs four years ago, when underage vaping got out of hand, they've been under attack. In 2019, Juul ceased selling sweet and fruity flavors that appealed to the younger audience as they came under scrutiny.

Last year, Juul reported a net loss of $259 million, which had to have hurt Altria Group, which paid $12.8 billion for a 35% stake in Juul. That deal placed a $38 billion value on Juul, but with the company being made an example, I'm sure that valuation will drop like an empty cartridge.

Some people are happy about the FDA pulling the vapes off the shelves. Will Teasley, a senior at North Carolina A&T State University said, "Juul is the device that opens the door to lifelong addiction. It already got me," hinting that the FDA moved too late.

Short Squeez Takeaway: The ease of smoking an e-cigarette compared to a traditional cigarette, makes it much easier to get addicted to ripping Juuls. Not only are the younger generations hooked but older ones are also getting in on the action (try counting the number of people with vapes in their hands next time you are walking in NYC). The question remains why is Juul being targeted and not its tens of substitutes that could potentially be more harmful than Juul, which apparently the FDA has spent a while studying.

2. Markets Rundown

If red is your favorite color then lucky you, as all markets were down with stocks barely lower after a sideways day trying to continue Tuesday's rebound.

Movers & Shakers

(+) La-Z-Boy ($LZB) +8% after reporting fiscal Q4 results of consolidated net sales up 32% YOY, and net income rising thanks to wholesale sales growth.
(+) Revlon ($REV) +34% continuing their Chapter 11 bankruptcy rally from last week.
(–) Coinbase ($COIN) -10% on news that rival exchange Binance.US is dropping spot Bitcoin trading fees for customers.

Private Dealmaking

Veza, an enterprise cybersecurity startup, raised $5 million in new Series C funding
Alladapt Immunotherapeutics, developing an oral immunotherapy designed to treat food allergies, raised a $119 million round
Ataccama, that develops data management capabilities for enterprises, raised a $150 million round
Cashify, marketplace for gadgets trade-ins and buybacks, raised $90 million in Series E funding
Ledger Investing, New York startup that has created a marketplace for insurance risk, raised a $75 million Series B round
Playter, buy-now-pay later-payment company, raised $55 million in equity and debt funding

3. Top Reads

Thoma Bravo's big tech repricing (Axios)
Dubai becomes new Switzerland for traders of Russian commodities (BB)
Once-dull crypto strategies are now shining in the bear market (BB)
Crypto broker Voyager Digital says Three Arrows Capital hasn’t repaid $666 million in loans (WSJ)
Should you buy now, pay later? Tread carefully (NYT)
Oil prices extend slide with recession fears ramping up (WSJ)
Gold futures tally a third straight session decline (MW)
Stablecoin rules are a hot topic for people in money markets (BB)
Twitter tests 'notes' feature with 2,500 word limit (BBC)

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4. Book of the Day: Best Loser Wins: Why Normal Thinking Never Wins the Trading Game

Best Loser Wins is an intimate insight into one of the most prolific high-stake retail traders in the world. Tom Hougaard is the winner of multiple trading competitions and on one occasion traded the equivalent of $30,000 into more than $1.3 million over the course of a year.

While the average retail trader risks $10 per point in the underlying asset, Tom Hougaard frequently risks up to $3,500 per point. This risk exposure requires a mindset that is out of the ordinary.

This book will guide and inspire you in ways no other trading book has. It is not about strategies and money management. It is about mind management. Tom Hougaard provides a unique and refreshingly personal account of how an ordinary trader elevated his game to incredible heights by focusing as much on his mental approach as on his technical analysis.

Best Loser Wins explains how you, by thinking differently when you are trading, can elevate your game from mediocre and sporadic, to excellent and consistent. No amount of technical analysis will ever do that for you.

Tom Hougaard says, “People don’t fail because they don’t know enough about technical analysis. They fail because they don’t understand what the markets are doing to their minds.”

Best Loser Wins is an antidote to conventional and flawed thinking in trading, and a blueprint for a new belief system for traders who want to elevate their results to levels they never dreamed they could reach.

“Normal thinking leads to normal results. For exceptional results, traders must think differently.”

5. Short Squeez Picks

Michelin awards 11 Dubai restaurants stars for the first time
How to have peace of mind during high inflation
12 paradoxes of wealth including: The more we try to trade our way to profits, the less likely we are to profit

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