Good Morning! Harvard president Claudine Gay resigned after claims of plagiarism and antisemitism backlash, capping the shortest tenure in Harvard’s 388-year history. Stocks opened up the first trading day of 2024 looking for bad news. Barclays downgraded Apple stock, citing cooling iPhone demand. And it’s not just Barclays feeling gloomy - private equity is facing a dark fundraising forecast for 2024. Plus, the best caffeine-free energy hacks, and 3 steps to building more influence at work.

To get in on the private credit boom, sign up for Percent (weighted average APY of 18.83%) and get a $500 sign up bonus.

_{SQUEEZ OF THE DAY}

New Year, Old Debts

Companies and buyside firms alike have a New Year resolution - get rid of their massive debt hangover.

In 2021, everyone was throwing cash and cheap credit around. And over the past five years, Wall Street has seen over $1.3 trillion worth of mergers and acquisitions. But heading into 2024, the party may be over.

As interest rates shoot up and consumer demand cools, companies are in a full-on panic mode, trying to juggle their debt. Leverage ratios, the measure of how much debt companies are carrying compared to their total capital - are not looking great.

Take Walgreens, for example. After the company’s acquisition of Summit Health-CityMD, Moody's downgraded their credit to junk status. And Bayer, after snatching up Monsanto, went from an A- rating to BBB. 

Hedge funds thrived during the low-debt era but now they’re drowning in the same leverage they used for their deals.

Takeaway: 2023 marked a 10-year low in global dealmaking. Why? Because borrowing costs are through the roof, and the antitrust landscape is hostile.  The inflation war might not be over, and we might be entering a phase where inflation and low growth are coexisting together.

_{SPONSORED BY PERCENT}

Diversify Your Portfolio With High-Yield Private Credit

Where can investors find yield and diversification outside of stocks and bonds? Look no further than private credit, a multi-trillion dollar industry that institutional investors have been loading up on for years. 

These loans — which are negotiated privately and are not originated by banks — can command much higher interest rates and offer largely uncorrelated risk profiles. 

Percent is the only platform exclusively dedicated to private credit, making it available to everyday investors. If you’re an accredited investor, you get access to:

• APY: average of 18.83% as of December 31, 2023

• Shorter-term investments: many deal durations are between 9 months to several years, some have liquidity available after the first month

• Low minimums: invest as little as $500 to start

• Welcome bonus: earn up to $500 bonus on your first investment

• Diversification: access to small business lending in Latin America, Canadian mortgages, US merchant cash advances, and more

Visit Percent to create a free account and see all current offerings available. Unlock the asset class that can deliver diversification and greater resistance to inflation and volatility. 

_HEADLINES

Top Reads

• Claudine Gay resigns as Harvard President (BBC)

• The stock market wants some bad news (Axios)

• Apple stock downgraded as Barclays warns of cooling demand (YF)

• Private equity faces gloomy fundraising forecast for 2024 (WSJ)

• Bitcoin tops 45k to kick off the New Year (CNBC)

• Amazon joins flood of streaming service price hikes for 2024 (Axios)

• Quants score gains with value strategy that punished popular funds (BB)

• Health care deals a bright spot in 2023, primed for 2024 (Axios)

• Global equity funds draw robust inflows on rate cut hopes (YF)

• Avangrid scraps its $4.3 billion takeover of PNM Resources (Axios)

• Where the job market is heading in 2024, in 6 charts (WSJ)

_{CAPITAL PULSE}

Markets Rundown

Stocks closed lower as Apple dragged the Nasdaq down.

Movers & Shakers

• (+) Moderna ($MRNA) 13% after an upgrade by Oppenheimer.

• (–) Apple ($AAPL) -4% after a downgrade by Barclays.

• (–) Rivian ($RIVN) -10% because the EV maker posted low Q4 deliveries.

Private Dealmaking

• Blackstone Infrastructure Partners completed its $2.15 billion purchase of a 20% stake in NIPSCO

• TPG sold its 35% stake in Singapore Life Holdings for $1.2 billion

• PAI Partners sold ELITech, an in-vitro diagnostics maker, for $953 million

• American Industrial Partners bought drilling services firm Boart Longyear for $371 million

• Blackstone bought a majority stake in Sony Payment Services for $280 million

• Vestwell, a workplace savings platform, raised $125 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Sea We Swim In

In The Sea We Swim In, Frank Rose leads us to a new understanding of stories and their role in our lives. For decades, experts from many fields―psychologists, economists, advertising and marketing executives―failed to register the power of narrative.

Scientists thought stories were frivolous. Economists were knee-deep in theory. Marketers just wanted to cut to the sales pitch. Yet stories, not reasoning, are the key to persuasion.

Whether we’re aware of it or not, stories determine how we view the world and our place in it. That means the tools of professional storytellers―character, world, detail, voice―can unlock a way of thinking that’s ideal for an age in which we don’t passively consume media but actively participate in it.

Building on insights from cognitive psychology and neuroscience, Rose shows us how to see the world in narrative terms, not as a thesis to be argued or a pitch to be made but as a story to be told.

Leading brands and top entertainment professionals already understand the vast potential of storytelling. From Warby Parker to Mailchimp to The Walking Dead, Rose explains how they use stories to establish their identity and turn ordinary people into fans―and how you can do the same.

“A practical guide to "narrative thinking," and why it matters in a world defined by data.”

_{DAILY VISUAL}

Bitcoin Hits $45k First Time Since April ‘22

_{PRESENTED BY MAG CAPITAL PARTNERS}

Investors: Follow This $2.4T Breadcrumb Trail

While most investors toe the line with standard markets, the savvy among us have zeroed in on what some experts call “the backbone of the American economy.”

Welcome to Industrial real estate (IRE). 

The global supply chain disruption of 2020 revealed a clear need for domestic manufacturing solutions, fueling massive demand in the US. 

While inflation riddled other sectors, IRE remained resilient, delivering instant cash flows, inflation protection, and asset appreciation for investors. 

But here’s the kicker: Not all IRE investments are the same. MAG Capital Partners have over 50 year’s experience of accessing off-market investments that deliver consistent yields (while minimizing risk).

Don’t wait–unearth the industrial real estate market with MAG Capital Partners today.

_{DAILY ACUMEN}

Negative Thinking

The psychology of negative thinking unveils the intricate connection between our thought processes and emotions. Negative thoughts, when pervasive, can contribute to mental health challenges such as social anxiety, low self-esteem, and depression. Psychologist Aaron Beck's work on "negative schemas" in the 1970s emphasized how negative thought patterns reinforce negative emotions, creating a cycle that worsens mental well-being.

Recognizing negative thinking is the first step in managing its impact. Automatic negative thoughts often accompany poor mental health, and identifying them is crucial. These thoughts may include catastrophic thinking, such as fearing failure or imagining loneliness. The principles of managing negative thoughts involve interrogating their truthfulness and helpfulness. If a negative thought provides no value, it's time to shift focus and rewire thought patterns.

Transmuting negative thoughts requires creating distance from them. Labelling thoughts as subjective and observing them without active engagement helps detach from distorted beliefs. Starting a thought diary and practicing de-catastrophizing techniques are practical approaches. Journaling helps name emotions and understand the relationship between external triggers and internal beliefs, breaking the cycle of negative thinking.

_{ENLIGHTENMENT}

Short Squeez Picks

• The best ways to stay awake without caffeine 

• 3 steps to building more influence at work

• Master these productivity swaps to have a better year in business

• 20 of the best historical-fiction books of all time

• Unpacking envy, the emotion nobody likes to talk about

_{MEME-A-PALOOZA}

Memes of the Day