Welcome back to our weekend reading.
Like many people during these trying times – though some would argue that since the last year and half has been “trying”, it’s just become “these times” – the days often seem to roll into one amorphous blob, barely distinct and exhaustingly routine. I tried to nail down a phrase to describe this feeling to my partner, and eventually landed on “aggravating listlessness”. “Being annoyed at existence in general” was a little too wordy…
Let’s look back on the week.
Two of Every Put Option
Michael Burry, the man who needs no introduction besides “the guy from The Big Short”, has taken aim at Cathie Wood’s ARK Innovation ETF in his latest high-profile short position.
Burry’s Scion Asset Management purchased put contracts over 235,000 shares in ARKK at the end of Q2, to a rough value of $31 million USD. Scion has already been short-by-association by having put positions over Tesla, which happens to be ARKK’s largest holding. In fact, Scion increased its short position from 800,100 to 1,075,000 put options over Tesla shares.
Who ever said “high conviction” had to only refer to being long equities?
I’ve Got 99 Investments
Rapper Jay-Z’s investment/entertainment company Roc Nation LLC has joined with sports merchandiser Fanatics Inc. – with the aim of entering the mobile sports betting business.
As context, the state of New York has opened that market and has been attracting attention from opportunistic investors.
Jay-Z will also join the board of directors for the newly formed Fanatics Betting & Gaming.
The rapper’s net worth has rocketed to $1.4 billion this year after investments and sales in his companies have paid off – so perhaps the lyric should now be “I’ve got 99 problems, and being rich ain’t one”.
Chile’s environmental and climate concerns are looking to make a real impact on the global commodities market, with copper miner Antofagasta announcing it would produce approximately ~20,000 tonnes less this year as a decade-long drought impacts its operations.
2021 has been the driest year in what is currently a 12-year drought for the country.
Antofagasta, like other major miners in the area, is looking to build water-protection infrastructure: in this case a desalination plant, which won’t become operational for another year at least.
*All numbers in USD from BofA Securities
Equities: $23.9bn into equities
Bonds: $12.6bn into bonds
Precious Metals: $0.6bn into gold
Cash: $4.5bn out of cash
Flows to Know
Largest inflow to equities in 9 weeks
Largest inflow to emerging markets since April 2021 ($4.3bn)
Largest outflow from Japan since March 2021 ($0.9bn)
Redemptions from small caps and value are easing
RBNZ baulked at raising rates despite home prices being up 30%
ISM index likely turns negative by October in YoY terms
What’s The Opposite of a Baby Boom?
The number of children born in China during 2021.
This may explain part of the severity of the regulatory crackdown on the education sector, as the government seeks to lower living costs and promote larger families.
In some regions the birth rate is expected to have dropped by 17%
ADA Coming in Third
ADA, the digital token associated with the Cardano blockchain, has recently become the world’s third-largest cryptocurrency.
I hadn’t heard of ADA, but it seeks to be a key part of the mammoth development of scalable De-Fi applications, with current price movements driven by the announced goal of having smart contracts available on the Cardano blockchain by the 12th of September.
The market value of ADA is currently $69 billion USD, nudging up against Ether for the number 2 spot.
Our morning calls continue, please do tune in for a daily dose of market insights and access to some leading experts in the funds management field.
Tune in from 9:30-10:00am AEST, Tuesdays and Thursdays.
Have a safe and enjoyable weekend.
Max and the Mason Stevens team.
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The views expressed in this article are the views of the stated author as at the date published and are subject to change based on markets and other conditions. Past performance is not a reliable indicator of future performance. Mason Stevens is only providing general advice in providing this information. You should consider this information, along with all your other investments and strategies when assessing the appropriateness of the information to your individual circumstances. Mason Stevens and its associates and their respective directors and other staff each declare that they may hold interests in securities and/or earn fees or other benefits from transactions arising as a result of information contained in this article.