Monday, December 5, 2022

Inflation continues to trend downward; The only Sam Bankman-Fried interview you should believe; More possible bad news for Bankman-Fried; Day trip to Toronto; The best way to get to Newark Airport from NYC

By Whitney Tilson

1) A week from tomorrow (December 13), the U.S. Labor Department will release its latest inflation report for the month of November. After peaking at 9.1% in June, inflation has been declining (as I predicted) for the past four months: 8.5% in July, 8.3% in August, 8.2% in September, and 7.7% in October. I believe inflation is almost certain to continue declining, even though wage growth was 5.1% in November – slightly higher than expected. Here's a chart showing both inflation and wage growth over the past four years (from this New York Times article: U.S. Job Growth Remains Strong, Defying Fed's Rate Strategy): The government's inflation number is based on roughly three equal factors: wages, shelter, and goods and services (gas, food, etc.). As you can see from the chart above, wage growth, while substantial (a good thing for workers!), is pulling inflation down. As for shelter, the government measures this on a blended historical average, which doesn't yet fully reflect the sharp

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Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to more than $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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Whitney is one of the most connected investors I’ve met. He’s been able to tap into an infinitely deep and unique network of people to come up with great insights into ideas and develop them that other people just can’t do because they don’t have the kind of network he does.

—John Petry