October 20, 2021
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The Financial Times Wants You To Invest In Britney Spears (Go With Us On This)

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The Financial Times, which we once held in high regard for its excellent business coverage (and charitable donations to this very website), goes Live Journal on us today. With the new editorial direction comes exactly what you’d expect: oversharing, misinformation, and horrible (and unsolicited, we might add) advice. And Britney Spears. Not surprisingly, it can all be traced back to Jim Cramer.

James Altucher, president and founder of Stockpickr, managing partner at Formula Capital, and weekly columnist for the FT uses the first three-quarters of the page to discuss the fact that he was a sore loser as a kid. Back then, he identified himself as a “strong chess player” and anything that “got in the way of that [label]” made him feel “less worthy.” Like when, for example, James lost a game of chess against the chess captain from a neighboring school. He was so upset that in one fell swoop, he knocked all the pieces to the floor. (Not to make this a pissing contest, but, honestly—big whoop. Call us when you can take responsibility for scratching someone’s retina by flipping a Monopoly board off the table and causing a plastic hotel to (barely) graze another player’s eye.)
James didn’t go back to school for an entire week, out of shame. Instead, he would take the bus to Princeton, NJ, and play chess with John Nash’s son, who’d recently received his PhD in mathematics and figured the best thing to do next was play board games with a sensitive teenage boy all day.
The discussion of chess abruptly ends there (this is standard LJ format), and James starts talking about how later in life, he would “establish” himself by how much money he gained or lost. And he found that it was the constant “quest for more that could trigger the conclusion of a life lived without consequence when lying on one’s deathbed.” Then James—who one should note favorably reviewed Tim Sykes’s book, “An American Hedge Fund”—segues to Britney Spears by saying, “This brings me to Britney Spears.” Though he hasn’t much followed her career, or seen the VMA appearance, James did catch the news that the old girl has, lately, been letting her career as a “brilliant businesswoman and manager of her own brand” slide. But that’s okay—“she’s 24 and we all remember what that was like.” (No, that’s not okay, James—she’s 25, about to be 26 in December. Wikipedia! It knows stuff.)
Anywho, as a project for thestreet.com, James recently stood on Wall Street asking random people, “Britney, buy or sell,” the most common answer being “sell.” Yes, this assignment was something thestreet.com paid money for. But James knows that when everyone says “sell,” it’s time to buy. Which is why he recommends adding Skechers (-2.74%), Jakks Pacific (makers of the Britney doll, +5.51%), Elizabeth Arden (-2.81%), Pepsi (+0.20%), and Sony (-1.82%) to your portfolio, all Britney-approved stocks. Unfortunately, FTLV does not yet have the technology to upload videos, but after a forthcoming deal with Facebook is completed, we’ll all get to enjoy the clips of Mr. Altucher lip synching “I’m a slave for you” that were supposed to run with this post.
Next week: Hank Blodget’s diary entry on why you should buy shares of products endorsed by Michael Vick (PetSmart, PETM; Monarch Casino & Resort, Inc., MCRI; Bad Newz Kennels, BNK.A and BNK.B), and a story about a young boy who just wanted to dance.
On a more serious note, we're hearing rumors that Global Alpha's -22.5% August might have something to do with heavy investments in the lady of the night (Mark Carhart has been a devotee since "Crossroads" came out). Anyone want to provide confirmation? Thanks.
Britney’s not as toxic as you might think [Financial Times]

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Having said that, T2 Partners will be "monitoring" the situation. The op ed in today’s New York Times by retiring Goldman Sachs Executive Director Greg Smith is the talk of Wall Street. We think we know Goldman well, as the company has been our prime broker for the past seven years and Goldman (both stock and call options) is one of our largest positions, so we wanted to add our comments. Our direct experience as a client of Goldman has been universally positive. The many people we have dealt with there have all been exceptionally talented and high-grade, and never once have we had a negative experience in which we felt that they took advantage of us or didn’t do what they said they would do. That said, we are not naïve. In all of our dealings with Wall Street firms, we assume that they are looking out for their own bottom lines, not ours. And we are certainly aware that the old, gentlemanly culture in which integrity and a customer-first attitude generally prevailed is long gone – not just at Goldman, but across all of Wall Street – and, in fact, across the entire financial industry (the reasons for this and what should be done about it are the subject for another day). When we think about investing in any company – especially a financial one, which is heavily regulated, leveraged, and particularly difficult for an outsider to analyze – we factor into our investment equation our assessment of the company’s culture and values, and, if we have any concerns, what the potential associated risks are, such as unexpected losses and regulatory action. In light of our view of the moral decay across the U.S. financial sector, we aggressively haircut our estimates of intrinsic value in the sector – some companies more so than others. But at some price, of course, any stock is a buy, and last August and September we felt that the negativity surrounding the financial sector was way overdone and hence made a big – and, so far, very profitable – bet on Goldman and a number of other U.S. financial firms. With the run-up in Goldman’s stock – after falling below $90 as recently as December, it’s now over $120, just above tangible book value of $119.72 as of 12/31/11 – we’ve been debating whether to trim or exit our position, so today’s op ed is timely. But is it relevant to our investment thesis? We think probably not, for two reasons: 1) The argument that Goldman has become increasingly profit driven, sometimes at the expense of clients’ best interests, and that some employees use vulgar and disrespectful language is hardly news. What’s the next “shocking” headline: “Prostitution in Vegas!”? 2) We highly doubt that Goldman is as truly corrupt as Smith makes it out to be. Goldman has more than 30,000 employees (including nearly 12,000 vice presidents, of which Mr. Smith is one) and has gone through wrenching changes in the past year, including savage cuts to bonuses and extensive layoffs, so it doesn’t surprise us that there are many disgruntled employees, especially those who are leaving. Is Smith one of them? It’s hard to tell, but here’s an email sent to me this morning by a former partner at Goldman (who generally agrees that the firm’s culture is not what it once was): There are a couple of things out of place. 1) This guy has been at firm for 12 years and is only a VP…a piss ant of sorts. He should have been an MD-light by now, so clearly he has been running in place for some time. 2) He was in U.S. equity derivatives in London…sort of like equities in Dallas…more confirmation he is a lightweight. Somewhere along the line he has had sand kicked in his face…and is not as good as he thinks he is. That happens to a lot of high achievers there. In summary, we think it’s likely that Goldman does the right thing for its clients the vast majority of the time – but not as certainly as it used to in the old days. Times have changed and the trend is unfortunate, but it is not unique to Goldman. In fact, we believe that Goldman still has a better culture and is more ethical than most of its competitors – though this is a very low bar to be sure. Our investment thesis on Goldman is simple: when all the dust settles, it will remain the premier investment banking franchise in the world – and, if so, will be worth a substantial premium to tangible book value. Smith’s column is a warning flag that we’ll be monitoring closely, but we believe our investment thesis remains intact and the stock is still cheap, so we’re not selling.

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