2017 Letters, Newsletter Sign Up – Year In ReviewJacob Wolinsky
- UPDATED: 1/7/2017 the page for hedge fund letters can be found here
- Book lists here
- Get our free newsletter here or just enter your email below
- Q1 letters
- The illusion of risk
- Q3 letters
- Klarman Q2
- Lazy analysts
- Buffett formula
- Pitch The Perfect Investment Podcast
- Stanphyl on TSLA
- Earning the great title
- Hugh Hendry closes shop
- Grant Vs. Dalio
- Burry & water
- CIA trained?
I never expected to charge for content - it was a fluke and a hesitant experiment I did on a tiny percentage of material - when I realized people would pay - the membership has grown massively - we are going to continue putting more emphasis on premium and will soon have a dedicated domain for all our subscribers. Shifting premium off ValueWalk will enable us to dd more features and have a better interface without worrying about conflicts with our theme and plugins on this site.
Rupert who writes for us, helped launch a site which focuses on emerging managers with ideas not covered much by the sell-side or even on blogs or closed forums, etc. usually small cap stocks (and we try to focus on ones with some liquidity) We have now reached our goal of members we wanted to hit that it makes more time to invest efforts into it.
I launched a new venture based on a lot of demand related to the above but in a different area. I am officially registered and now going to start seeing if I have any success. I have no idea if it will be successful but if it is I intend to focus more time on it. Stay tuned for updates.
The number of investment conferences has exploded over the past few years. We are trying to cover the interesting quality ones, so we intend to put more focus on that primarily for premium members. Also, if you know of any upcoming ones in your area and want to help out and are competent and honest we can get you a pass and in some cases compensate you - please contact us.
On both a personal and business level 2017 was fantastic. We had a slump in 15/16 but now seem to be making the right strides. I hope you will continue to stay with us.
Additionally, we hope to do a bit more transcriptions this coming year and to highlight more the drastic underfunding of pensions and the role hedge fund allocations (for better worse or in between play) in this area.
We are apolitical and do not take any position on how to reform pensions, but our goal is to highlight how poorly funded many public funds are - what the answer should be is a whole separate area, but first awareness is critical. This is an issue that despite being extremely important and at least a decade in coming seems to get so little coverage IMHO.
Roger Lowenstein wrote an excellent book on the topic in 2009 titled While America Aged. This shows that I am not predicting an immediate crisis (nor would it be worth anything if I was) but it's an issue which must be addressed and has only gotten worse since 2009.
In a 2011 interview which I conducted with Roger, he touched on both the above points:
The point of the book was if you want pensions, then fine. Fund them. If you don’t want them, then cut them out. But, you can’t take the “head in the sand” route. So I’m indifferent as to whether you raise taxes to fund them or whether you cut back on them if you still think you can attract teachers, firemen and so on. But, what you can’t do is to try to have it both ways and award the benefits and then just pass the buck. That’s bad math, and regardless of being A republican or democrat, it just doesn’t work.
I’m glad it’s widely received. The issue has become much more front and center. You don’t want to be too late and sometimes you don’t want to be too early either when it comes to writing a book on a subject. You never know when these things will become hot topics. You may begin to think “When will the time come where people see this topic’s importance?” Then suddenly, something sparks it. For the pension issue, it seemed like the financial meltdown sparked the collapse in state budgets and suddenly the voters are feeling it. They’re feeling it either from the level of services declining or because taxes are going up. The rubber is finally hitting the road. Many are seeing people in the public sector retiring in their mid or late 50’s in some cases, while the rest of us in the private sector are working into our mid or late 60’s. Then additionally, some basic things seem way out of kilter, like we are laying off teachers. So, you can’t predict these things, but at least the issue has very much come into the public consciousness now.
Finally, we like to do more investigative reporting. Many times we forgo crucial stories because we do not have the resources to defend against a major lawsuit (which is always the first step of a company which has something to hide). Additionally, there are growing threats of not only lawsuits but of intimidation, slander, lies, threats and even physical safety risks. I will not go into much detail but Kyle Bass told us on the record what he told us two years ago, in the case of UDF he had real safety fears of going public.
On the record he told us the following:
We were not concerned about lawsuits (in fact the discovery process would have been enlightening if they so chose). We were concerned about threats that journalists received from interested parties and how those threats might lead to violence as the house of cards came crashing down around those perpetrating the scheme.
While I am not brave enough to risk the life of my children for exposing one (of many bad actors), we have a vast network of people who can and we work behind the scenes on a decent amount of fraud (see more on that below). The SEC is incompetent but eventually, they will get to tips we gave to a variety of fraud busters or the public outcry will cause the Government to sanction, shut down and in some cases arrest the parties behind the fraud.
Our most significant resources are the trust that our sources maintain in us and we do everything to ensure that it is supported. One of the proudest moments of my life was being told by my principal I would be expelled from a top private high school if I did not give the name of my friend ... I refused (some of my close friends were not so brave and one of my closest friends ratted me out that is why I was in there the first place). In the past, we also have been threatened by very big institutions (including a bulge bracket bank and a hedge fund with billions in AUM) with lawsuits if we would not name a source - we would not do so despite incredible pressure tactics. I take pride in the trust our sources place with us.
We also face constant risks from immoral trolls looking to make a quick buck regardless of the legal or ethical merits of their case. Some sick people make a living off of what I term legal extortion - I know the template they use, I could do the same thing easily and make a load of money, but I think its immoral and I would not be able to look my children in their eyes after spending my time stealing from innocent people. All it takes is a few people like this thief (or these grinches) to destroy businesses and mess up the entire tort system.
You can support us by sending us legal tips, helping spread the word of our mission and you can also support us in ways which do not cost you a penny and sometimes even save you money (scroll to the bottom).
Ethics in advertising
We get daily pitches usually related to binary options, cryptos, ICOs, forex, etc. We are offered a lot of money but refuse. This is an issue I am still thinking about but we started doing advertisements for more speculative but entirely legal and legit enterprises. Everything is disclosed and we include FTC disclaimers etc. and we only agree if we think it's not fraud but just speculative. In an ideal world, I can think of very financial ads that can add value besides ones encouraging people to invest in low cast Vanguard index funds. I also know stories of big banks pressuring sites to pull negative stories or the bank would pull big ad spend. We will never promote something we think is a fraud even if 100% legal, but if just speculative and legal I see little difference than ads for junky products from bulge bracket banks. I am far from a libertarian but I believe (within a limit, i.e., excluding targeting older citizens who may have dementia or related illnesses) people should not be prevented from speculating on risky investments that could pay off (I there was a zero percent chance of payoff id consider that in the category of fraud). If we made stupidity illegal half of America (and the world) would be in prison. If you think I am exaggerating go to youtube and type in "people jumping off rooves with umbrellas" and see what I mean.
You can see more on that below but otherwise happy holidays and to an even better 2018!
I plan to do article one day on this topic
One reader asked me in regards to an ad and I responded as follows