Friday, September 15, 2023

My interview; 11 WTF Moments From the New Biography 'Elon Musk'; The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend; A 3% Mortgage Rate in a 7% World? This Startup Says It Can Do That; Give Ukraine ATACMS

By Whitney Tilson

1) I just did a 30-minute interview with Money Life With Chuck Jaffe, which you can listen to here. Summary:

Whitney Tilson, founder and chief executive officer at Empire Financial Research, says he expects the market to be flat to slightly up for the remainder of 2023 – gaining about 5% on top of the 17% gains thus far – and then gaining another 10% to 15% in 2023.

He expects the "sanguine, strong" economic environment to continue despite the skepticism that has been present – but which hasn't really slowed anything – this year.

2) Susan got annoyed with me this morning at the end of our morning walk in Central Park with Rosie (the Wonder Dog) and Phoebe (the Wonder Pup), picking up trash (why do smokers think it's okay to throw their butts on the ground??), because she caught me secretly listening (at 3x speed) to Walter Isaacson's new book, Elon Musk...

It's that good. Trust me, whether you love Musk or hate him (there appears to be nobody in between), read – or listen – to the book. Like its subject, it's endlessly fascinating, inspiring, and infuriating...

I'll do a full review next week after I finish it, but in the meantime, here's a Rolling Stone article to whet your appetite: 11 WTF Moments From the New Biography 'Elon Musk' Excerpt:

Tuesday saw the release of Elon Musk, author Walter Isaacson's mammoth new biography of the controversial tech mogul, and hardly a chapter of the nearly 700-page book goes by without a weird anecdote about the Tesla and SpaceX CEO's eccentric, sometimes self-destructive behavior.

We are treated to insights about volatile relationships with family and partners, his caustic managerial style, and the toll that burnout takes as Musk struggles to deliver on promises of a fantastical future. Isaacson had total access to Musk himself, and, throughout the narrative, features perspectives from dozens of people in Musk's inner circle (or formerly close with him) on exactly what makes the man tick.

Along the way, there are details that will make you wonder (as Musk himself is known to muse) if we're living in a computer simulation. But this, apparently, is just the reality of being a billionaire with the power and influence of a sovereign nation. Here are just a few of the items from Elon Musk that will leave you in awe – for better or worse:

3) Speaking of biographies of interesting characters, I look forward to reading this book and judging for myself how accurate it is: Ray Dalio tries to silence tell-all that pierces veil of 'benevolent business titan' Excerpt:

Hedge fund titan Ray Dalio – who has famously promoted "radical transparency" as a management mantra – hired a team of high-priced lawyers to threaten the publication of a new book that claims to reveal some ugly truths about the investment firm he started.

The new book by reporter Rob Copeland, The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend, is slated for release by Macmillan Nov. 7...

According to a source, however, the book contains "reams of scenes of Dalio and others acting harshly toward underlings, and wielding the so-called 'Principles' as a weapon."

The book also gets into former FBI Director James Comey's tenure as general counsel at the firm from 2010 to 2013.

A source told On The Money the book includes several chapters on Comey "putting underlings on videotaped trials, installing a wild security apparatus and kissing up to Dalio for multimillion-dollar paychecks."

The 352-page book claims it "punctures this carefully-constructed narrative of the benevolent business titan," according to promotional materials.

4) This article on the front page of yesterday's Wall Street Journal, A 3% Mortgage Rate in a 7% World? This Startup Says It Can Do That, caught my eye for two reasons...

First, it's the first time I've seen a chart showing how many mortgages are fixed at certain rate levels:

Of 53 million mortgages, a quarter are below 3% and another 36% are in the 3% to 4% range – making it prohibitively expensive for any of these homeowners to sell if they have to buy elsewhere because they face mortgage rates today above 7%.

As I have written many times before, this explains why housing prices have been strangely resilient despite affordability plunging: supply has dried up.

The second reason this article caught my eye is because I didn't know that some mortgages are transferrable. These "assumable loans," including those "extended through the Department of Veterans Affairs and the Federal Housing Administration programs," account for 22% of active mortgages.

Yet few people – either buyers or sellers – appear to be aware of this, so sellers are giving up an extraordinarily valuable asset for nothing!

Hopefully this article is the start of a lot of publicity that will raise awareness, and other companies will join the new company profiled in the article, Roam, to help sellers through this process.

5) I continue to follow the war in Ukraine closely, both for personal/philanthropic reasons (I've raised $16 million and traveled there twice earlier this year) as well as investing ones.

While it's taking longer than I had hoped, Ukraine's counteroffensive is starting to pick up steam and I continue to believe Ukraine will win a decisive victory on the battlefield, leading to a peace agreement, sooner than almost anyone believes, which would lower food and energy prices and provide a boost to stocks.

This outcome will become significantly more likely if, as is rumored, the Biden administration approves sending Ukraine long-range ATACMS missiles, which are launched from the same vehicles that fire HIMARs missiles, but have 4 times the range (190 miles versus 48).

I think the announcement will come when Ukrainian President Volodymyr Zelensky visits Washington next week to address Congress and meet with President Joe Biden. Here's a WSJ article this morning about this: Ukraine Closer to Acquiring ATACMS Long-Range Missiles From U.S. This Fall. Excerpt:

The U.S. is moving closer to providing Ukraine with a ground-based missile Kyiv has long sought to conduct longer-range strikes at Russian forces.

President Biden has yet to approve the transfer. But administration officials said they are taking a fresh look at supplying the Army's Tactical Missile System, or ATACMS, this fall to boost Ukraine's counteroffensive as its forces make slow progress toward overcoming Russia's extensive defenses in the south.

I strongly support this, so I just sent this note to six Senators and two House members I know:

I heard Biden is (finally) considering giving Ukraine ATACMS missiles, which would make a HUGE difference. I hope you'll encourage him to do so.



One replied (in part):

When the President returns from his trip to India and Vietnam, I will certainly advocate for longer range missiles to be provided as soon as possible from our stockpiles.

I think this is a critical period for Ukraine and that their tireless and brave fight against Russian aggression deserves all the support we can provide. Thanks for all you're doing!

One of my readers, who has many years of experience as a U.S. national security official (and who today identifies politically as a non-partisan centrist), sent me these thoughts:

Thanks Whitney for all you are continuing to do. It seems there is a perception in Washington that the Administration is close to approving ATACMS. I don't have any more concrete info beyond that, but will share my thoughts.

It is a good decision. My thought is that if part of the integrated Ukrainian warfight, this would enable Ukraine to suppress Russian longer-range fires that are impeding their front lines trying to demine.

It would presumably also make Russia's logistical and mobilization nodes vulnerable. All of which would increase the timetable for opening lanes for the armored units to move deeper and destabilize the occupation. So yes, it seems to be important to Ukraine's defense.

How to justify it (and how not to talk about it). The Administration needs to hold a tougher public line when explaining the decision to send ATACMS. The question is not will Ukraine use these to fire across into Russian territory. The justification should be threefold:

1) Russia has been using long-range missiles indiscriminately against Ukrainian cities and civilian infrastructure, without being exposed to Ukrainian fires; clearly Ukraine needs and can manage this system which may save a lot of lives and property.

2) Russia is trying to suppress and destroy Ukraine's agriculture sector, which is a key source of food for many foreign countries (some of which were at the G20), and this is an appropriate step to sustain food security

3) Much was made of the G20 communique this year, but it clearly reinforced the unacceptability of acquiring territory by force. Ukraine is defending its sovereign land against an illegitimate invasion that blatantly violated the UN Charter.

Back to basics on this conflict – to stem creeping isolationist rhetoric on the right. The Administration should deflect efforts to be drawn into commenting on whether the counter-offensive is not achieving its objectives.

First, Ukraine doesn't discuss sensitive military plans and neither should its friends, including the U.S.

Second, the U.S. has been very clear that it supports Ukraine's effort to defend its territory and people; no further justification is necessary.

Third, while of course everyone would like this war to be over, the inescapable reality is that it will end only when Russia concludes that withdrawal of its forces is in its national interest. No one wants this to be over more than Ukraine, which is why they are valiantly fighting to compel Russia to end its aggression. Pulling back on our assistance to Ukraine will increase, not decrease, casualties and damage, and extend rather than ending the most destructive land war in Europe since World War II.

You are better versed than anyone about the state of this conflict. My point here is not only to release this system for good cause, but to use the occasion to reclaim the narrative here at home, clarifying that this policy is the embodiment of principled national interest shared with friends and allies, and pushing back hard on doubters and (seeming) Putin sympathizers. Putin is betting on a cold winter with fewer stored energy supplies in Europe, and secondarily a possible return of Trump to the White House.

It is a good time for the Administration to lead a bit with its chin and show Ukraine, NATO, and Putin that the U.S. is not wavering. Once Europe gets past the winter energy price/supply spike, the trend lines all work against Russia. Energy transition will be underway away from Russian oil-gas, Western-armed and -trained Ukrainian units will get to the front lines, and it's possible that the prospect of another Trump presidency will have dimmed. Time for a fresh dose of American resolve.

Best regards,


P.S. I welcome your feedback at [email protected].