May 24, 2021 Sign Up

By Overheard on Wall Street

"You’re free when no one can buy your time." –Shane Parrish

Good morning! Congratulations to Phil Mickelson on winning his 2nd PGA championship (16 years after his 1st one) and becoming the oldest player to win a major at 50 years old. In other good news for America, yesterday the 7-day average of Covid infections fell to 26k, the lowest number since June of last year. (Incoming #Roaring20s)

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1. Story of the Day: The Great Unwind

Being a crypto investor is not for the faint-hearted as the global crypto market has been a blood-bath over the last 12 days, falling nearly 50%, from highs of $2.6 trillion in mid-April to $1.3 trillion at time of writing. Bitcoin traded as low as $32k on Sunday, a steep fall from the high of $63k last month. (Really tho how is crypto any different than meme stocks?) The descent began when the decentralized world’s most centralized figure, Elon Musk tweeted that Tesla would no longer accept Bitcoin over environmental concerns. That was followed by China cracking down on cryptocurrencies, banning financial institutions from accepting them, and pledging further regulations on "bitcoin mining and trading behavior.” The U.S. Treasury also announced that it would require stricter crypto compliance with the IRS.

The crypto world is no stranger to volatility (7 times more volatile than the stock market over the last month) but the latest armageddon lowers the appeal for institutional investors. A J.P. Morgan report highlighted that institutional investors were dumping bitcoin in favor of gold. The “crash” still might not be over as Cathie Wood once said "You never know how low is low when a market gets very emotional."

Short Squeez Takeaway: The recent events have highlighted Bitcoin’s ESG problem and reliance on China (accounts for 70% of the world's crypto supply), and these issues will need to be addressed for Bitcoin to be more widely accepted as a store of value. Separately, for all of you who bought at the top and cannot stop thinking about how much money you’ve lost (e.g. buying Ethereum at $4,200 like we did), we would recommend reading Psychology of Money, which we guarantee will give you some much needed peace of mind in times like these. #HODL

2. Markets Rundown

• S&P 500 posted its first back-to-back weekly losses since February on inflation concerns and potential tightening monetary policy

Movers & Shakers

• (+) Him & Hers ($HIMS) +12% on outperforming earnings estimates and growing revenue by 74% in Q1.
• (+) Oatly ($OTLY) +11% on post-IPO rally.
• (–) VF Corp ($VFC) -9% after reporting lower than expected EPS.

3. Top Reads

4. Book of the Day: Amazon Unbound: Jeff Bezos and the Invention of a Global Empire

Relentless. That’s what Jeff Bezos, the founder and CEO of Amazon.com, originally considered naming the company back in 1994. Fast forward to today and Bezos is the richest man in modern history running a trillion-dollar global empire. It seems like Amazon has intertwined itself into every part of our lives and the name Relentless, seems like the perfect fit.

In Amazon Unbound, the author (Brad Stone), gives us an unfiltered examination of how a small bookstore turned into one of the most feared global companies. This book is for anyone who wants an inside look at the secretive inner workings of Amazon’s global empire.

5. Daily Visual: The Musk Effect on Bitcoin

Source: WSJ

6.  Daily Acumen: When to Say “Yes” and “No”

Do you find it hard knowing when to say “Yes” and when to say “No?” Most people are good at saying one or the other. Being unable to say “no” will give you lots of short-term opportunities but wear you down in the long run. Being unable to say “yes” will eliminate most short-term opportunities, but it occasionally pays off by allowing you to spot something everyone else missed. It’s important to find the right balance between the two.

It’s smart to say yes to every opportunity that comes your way when you’re early on in your career. Why? Because it may open doors to many other opportunities, not only in business but in other areas of life. For example, if you move to a new city and want to make friends, say yes to everything till you find people you jive with; if you're trying to find what you're good at, say yes to everything until you find something you're decent at. In the future, you will arrive at a point where you are forced to say "no" to almost every opportunity. Congratulations! You have officially “made it.”

7. Memes of the Day