🍋 REITs Are So Back

The hottest hedge fund investment of 2023, plus a record Barbenheimer box office, and a new Twitter logo.

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“Don't cling to a mistake just because you spent a lot of time making it." — Ray Dalio

Good Morning! Elon Musk is renaming Twitter to X and also ditching the iconic blue bird logo for an ‘X’. Zuck’s Threads is down bad - user engagement has plummeted 70% since Meta released the platform. And prosecutors are accusing FTX’s Sam Bankman-Fried of leaking his ex-girlfriend’s diary to the New York Times.

On another note, the Barbenheimer hype raked in $235 million at the box office, eyeing the second-highest weekend on record. And if you weren’t at the Hamptons this weekend, it turns out you weren’t alone. The summer rental market has cooled in popular areas like Cape Cod, the Hamptons, and Martha’s Vineyard - owners are having trouble finding takers this summer.

If you are interested in getting in front of a smart, young audience of business leaders, bankers, investment professionals, policy influencers of over 500,000 people, then fill out this form, we’ll be in touch.

SQUEEZ OF THE DAY

REITs Are So Back

Hedge funds are placing their boldest bets of 2023 on an unexpected target - battered commercial real estate investment trusts (REITs). These seemingly sleepy stocks, once relegated to the portfolios of mom-and-pop investors, have now become the focal point of competition among hedge funds, particularly those specializing in distressed investing.

As the commercial real estate market faces a significant selloff, hedge fund managers have been closely monitoring the situation. Sensing an opportunity too good to pass up, they are diving headfirst into REITs, vying for shares and even engaging in intense power struggles to control management teams.

But why the sudden fascination with REITs? For some investors, they represent one of the few bargains left in the current stock market landscape. While the S&P unexpectedly surged in 2023, distressed investors are flocking to these once-overlooked assets, particularly those caught in the whirlwind of the broader selloff.

REITs function as property aggregators or mortgage lenders, generously distributing most of their rental or mortgage income as stock dividends (hence why retirees and mom-and-pop investors love them). Originally popular among individuals seeking to partake in real estate investments without the burdens of direct ownership, REITs were traditionally seen as a shield against inflation. Now, with the influx of hedge funds, the prices of these assets are starting to skyrocket.

Takeaway: With the S&P 500 up almost 19% YTD, hedge funds are getting creative with how to beat the market. REITs were thought of as a favorite for retirees. But with shares battered since the pandemic, hedge funds are starting to vie for control over REITs.

CAPITAL PULSE

Markets Rundown

Stocks closed higher ahead of a busy week of earnings.

Movers & Shakers

  • (+) Scholastic ($SCHL) +11% after the publisher expects 5% revenue growth.

  • (–) Herc ($HRI) -6% after Bank of America downgraded the equipment rental company over Hollywood strike concerns.

  • (–) AutoNation ($AN) -12% after the car seller’s net income fell 28%.

Private Dealmaking

  • Aeroseal, an aeroseal-based sealant for air ducts, raised $67 million

  • Neura, a cognitive robot developer, raised $55 million

  • Futureverse, an AI and metaverse technology startup, raised $54 million

  • Hightouch, a data infrastructure startup, raised $38 million

  • Jirav, a financial planning and analysis startup, raised $20 million

  • Alluvial, an Ethereum staking company, raised $12 million

SPONSORED BY RYSE

When AI Meets… Your Window Shades?!

Comfort and convenience are reasons why smart home titans like RING and Nest have been acquired for $1.2B and $3.2B respectively.

But when it comes to Smart Shades, comfort and convenience are just the beginning.

Powered by advanced sensors and AI, RYSE's patented shade automation tech is also providing:

  • Privacy & Safety: Smart Shades can keep your home or workplace private and safe — RYSE recently outfitted a school with 50+ Smart Shades as part of their safety policy.

  • Energy Savings: Businesses are now saving on energy costs thanks to RYSE SmartShades optimally controlling the amount of sunlight that enters their buildings.

  • Disabled & Elderly Assistance: In care homes, RYSE provides the disabled and the elderly with the simple ability to control their window shades.

These initial deals showcase how massive the potential for Smart Shades really is, and this is just the beginning…

RYSE is preparing to launch their product in over 100 Best Buy stores, securing the type of distribution that lead to the success of RING and Nest.

HEADLINES

Top Reads

  • 3 ways to build A.I. skills even if you don’t work in tech (CNBC)

  • What AI means for growth, incomes, and inflation (Axios)

  • Zuckerberg has led the comeback story of the year (YF)

  • Amazon will make some employees relocate for RTO (YF)

  • How Texas became the capital of chipmakers (CNBC)

  • Why Bezos is paying attention to his newspaper again (NYT)

  • The bear market has nearly been reversed (BB)

  • How much you’d need to buy the Barbie Malibu Dreamhouse (CNBC)

  • ChatGPT is getting worse over time (Fortune)

BOOK OF THE DAY

Happier Hour

Our most precious resource isn’t money. It’s time. We are allotted just twenty-four hours a day, and we live in a culture that keeps us feeling “time poor.” Since we can’t add more hours to the day, how can we experience our lives as richer?

Based on her wildly popular MBA class at UCLA, Professor Cassie Holmes demonstrates how to immediately improve our lives by changing how we perceive and invest our time.

Enlivened by Holmes’s upbeat narrative and groundbreaking research, Happier Hour is filled with loads and loads of practical, evidence-based advice for how to live better by investing in what really matters. It’s the kind of book that can change your life for the better.

“Learn how to reframe your time around life’s happiest moments to build days that aren’t just full but fulfilling.”

ENLIGHTENMENT

Short Squeez Picks

  • Why America stopped building public pools

  • 10 daily habits to boost your eye health

  • The horrible performance review that set him on the road to CEO

  • What Mark Cuban thinks $1.08 billion Powerball winner should do next

  • 11 ways to keep your brain young

DAILY VISUAL

Median US Chase Account Balance

Checking and savings account combined; in inflation-adjusted 2023 dollars.

Source: Axios

DAILY ACUMEN

For The Love of The Game

Days after losing in the 2010 French Open, Novak Djokovic told his coach, Marián Vajda, that he decided to quit playing tennis.

He was No. 3 in the world, a grand slam winner, and a favorite to win Wimbledon.

Vajda asked, “Why did you start playing this sport?”

He immediately sensed the problem:

Djokovic was focusing on rankings, titles, and external expectations. As a result, Djokovic said, “I was mentally at one very messed up place.”

As Djokovic thought about Vajda’s question, he realized: many of his childhood memories include his “most beloved toy”—a mini tennis racket and a soft foam ball.

He started playing, answering Vajda’s question, “because I just loved holding that racket in my hand.”

“Do you still love holding a racket in your hand?” Vajda asked.

Djokovic thought about it, got excited, and said:

“I do. I still love holding a racket in my hand. Whether it’s a grand slam final on center court or just playing around on a public court, I like playing for the sake of playing.”

Vajda nodded, “That’s your source. That's what you need to tap into. Put aside rankings, what you want to achieve and what you think others are expecting of you.”

Djokovic agreed that he would.

“And I never looked back ever since that moment.”

The following season, Djokovic enjoyed one of the greatest seasons in sports history. He won 43 straight matches, including his first Wimbledon title. And he finished the year as the No. 1 player in the world.

“I started to play freely,” he says. “I became the kid that I was when I started playing.”

MEME-A-PALOOZA

Memes of the Day

 

 

 

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