I have a routine vet appointment for my dachshunds at 3:45 pm.

Thanks for reading my Diary today.

Enjoy the evening.

Be safe.

Adding to shorts in private equity.

* Pure unadulterated genius...

To my cannabis critics on "X" (Twitter):

As I noted a few days ago, the cannabis perma bulls, the "paid advisors", the lobbyists, etc., attacked me for the call to sell weed equities.

They are a bitter and unaware lot having lost so much money for themselves (and retail lemings) over the last several years - I suppose they need a scapegoat.

But they should all look in the mirror to understand how shallow their analysis has been and how dogmatic and non fact based they have become.

It's everyone else's fault.

They can't accept the truth and take ownership of one of the largest takedowns of capital since 2022.

As a result, given so much vitriol and hate, I decided to temporarily leave "X".

This vacation from "X" has been great - and that holiday will now be extended for an undefined period of time.

Solid, Tech Nova:

The Ups and Downs of Technical Analysis.

Part 1.

I have written often of my fondness for TA, and why I believe it is such an important arrow in every traders' quiver. I have read many fundamental analysts deride it, and my favor put down is calling TA - "Horoscope for Men".

While I find that genuinely humorous, it seems to discount the legions of extraordinary women who practice TA, like our very own Helene Meisler, so the saying has perhaps not aged so gracefully. That being said, I decided to focus this piece on WHY so many people are dismissive of TA, and where perhaps, they may be right in their thinking.

The main problem with TA is that it based, and relies on Technical Indicators. A formula, a graph, an extrapolation linked to underlying data. As such, it is maleable, configurable and open to both interpretation and adaptation. So it becomes rather easy to envisage circumstances in which the TA is used to simply re-enforce bias, or to misdirect others into supporting a theme the Analyst has a vested interest in.

In very gross terms, TA seems to manifest in several ways. There are indicators that correlate to active data, where the indicator adjusts daily, creating visible patterns that after study show expected behavior based on past behavior of the same patterns. Moving Averages, MACD, Stochastics, Bollinger Bands, these are the types of indicators that evolve constantly and seem to provide an edge for Intra Day and Swing Traders.

The main reason they seem to be effective, is simply that a very large community of people believe them to be so. They come standard on most trading platforms, and form the basis of almost all Algorithmic trading platforms. If everyone thinks the 200 SMA will provide resistance, then everyone will place their sell order just below that line. Sales will overwhelm purchases and the price will change direction, thus causing confirmation. Over the years here I have posted dozens and dozens of such charts that have had incredible success at being correct. My TSLA Wall and TSLA floor trade below is one such example. 2 hits rejected on the top in 2024, 6 bounces off the bottom since 2023. 

I have covered my Robinhood Markets  (HOOD)  short. 

* Get educated by a pro...

skeptcl

No wonder he begged Uncle Warren to invest in  (TSLA)  this weekend. Elmo knows they've got issues and declining sales. Cutting your way to profitability rarely works.

See you under $100...

I have added to longs -  (PGC)  and  (VVV) .

* From my pal Larry McDonald

Running out for a haircut.

Back in an hour.

Investors, as I have noted over the last twelve months, have misjudged the sustainability of theme parks' sales/profits in the face of a rapid climb in park admission prices.

Stated simply.

This is an integral part of my bearish view on Disney.

Added to shorts:

* SPY $517.32

* QQQ $440.25

View larger here.

View larger here.

Upside

 - (FGEN)  +20% (SEC requested additional documents on roxadustat’s pooled cardiovascular safety data)
- (ZETA)  +18% (earnings, guidance)
- (OSCR)  +16% (earnings, guidance)
- (MWA)  +15% (earnings, guidance)
- (HIMS)  +13% (earnings, guidance)
- (SYM)  +13% (earnings, guidance)
- (JMIA)  +13% (earnings)
- (GLDD)  +12% (earnings)
- (FN)  +9.4% (earnings, guidance)
- (VMEO)  +7.9% (earnings, guidance)
- (ATSG)  +7.3% (earnings, guidance; reaches agreement to operate ten additional Boeing 767 freighters for Amazon.com Services LLC in the Amazon Air network by the end of 2024)
- (COHR)  +7.1% (earnings, guidance)
- (BRBR)  +6.7% (earnings, guidance)
- (TTOO)  +5.0% (earnings, guidance; announces commercial expansion through Middle East distributor)
- (IFF)  +4.3% (earnings, guidance)
- (TPX)  +4.1% (earnings, guidance)
- (GFS)  +3.8% (earnings, guidance)
- (EVER)  +3.0% (earnings, guidance)
- (CART)  +2.7% (Uber to bring Uber Eats restaurant delivery to Instacart customers)
- (SEAT)  +2.7% (earnings, guidance)
-KVUE +2.3% (earnings, guidance)

Downside

 - (PLTR)  -12% (earnings, guidance)
- (DDOG)  -11% (earnings, guidance)
- (LCID)  -8.5% (earnings, guidance)
- (ATKR)  -6.4% (earnings, guidance)
- (CELH)  -5.5% (earnings)
- (DIS)  -5.5% (earnings, guidance)
- (JELD)  -4.2% (earnings, guidance)
- (GEO)  -3.7% (earnings, guidance)
- (RACE)  -3.4% (earnings, guidance)
- (ROK)  -3.2% (earnings, guidance; CFO to retire)
- (FMC)  -2.3% (earnings, guidance) 

Freshpet price target raised to $140 from $129 at Wells Fargo Wells Fargo raised the firm's price target on Freshpet to $140 from $129 and keeps an Overweight rating on the shares. The firm notes Freshpet Q1 execution drove strong sales and even stronger EBITDA upside, with shares outperforming. Q1 is proof target gross margin is attainable, says Wells, adding it now looks for proof it is sustainable. The firm sees further upside form here.

Freshpet price target raised to $143 from $128 at TD Cowen TD Cowen analyst Robert Moskow raised the firm's price target on Freshpet to $143 from $128 and keeps a Buy rating on the shares. The firm said its 1Q results far outpaced expectations and the beat reinforces their view that they are well on their way to becoming a mainstream dog food brand.

Chewy price target lowered to $16 from $18 at Citi Citi lowered the firm's price target on Chewy to $16 from $18 and keeps a Neutral rating on the shares. The analyst expects the majority of hardline retailers to report Q1 results in-line or slightly above Street estimates with fiscal year guidance maintained. The firm sees Q1 same-store-sales misses and potential guide-downs for categories at the "losing end of consumer spending," namely pet retail and electronics. Citi continues to believe a "barbell approach" is best given the uncertainty of rates. It tells investors to play defense with O'Reilly Automotive (ORLY) and AutoZone (AZO) and play offense with Home Depot (HD), RH (RH) and Boot Barn (BOOT).

Petco price target lowered to $1.75 from $2.85 at Citi Citi analyst Steven Zaccone lowered the firm's price target on Petco to $1.75 from $2.85 and keeps a Neutral rating on the shares. The analyst expects the majority of hardline retailers to report Q1 results in-line or slightly above Street estimates with fiscal year guidance maintained. The firm sees Q1 same-store-sales misses and potential guide-downs for categories at the "losing end of consumer spending," namely pet retail and electronics. Citi continues to believe a "barbell approach" is best given the uncertainty of rates. It tells investors to play defense with O'Reilly Automotive (ORLY) and AutoZone (AZO) and play offense with Home Depot (HD), RH (RH) and Boot Barn (BOOT).

I haven't discussed shipping rates for a few weeks but will today as I forgot to mention what Maersk said yesterday and has been in the news recently. "The risk zone has expanded, and attacks are reaching further offshore...This has forced our vessels to lengthen their journey further, resulting in additional time and costs to get your cargo to its destination for the time being" said the company. 

Over the past two weeks container shipping rates for the Shanghai to Rotterdam trip has rebounded by $114 after 12 weeks of declines following the January spike. The Shanghai to LA route has continued to fall but the drop in the week ended 5/2 was the smallest since mid February.

World Container Index Shanghai to Rotterdam

Shanghai to LA

Here were the notable comments from the Fed's Senior Loan Officer Survey for April:

"Regarding loans to businesses, survey respondents reported, on balance, tighter standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes over the first quarter. Meanwhile, banks reported tighter standards and weaker demand for all commercial real estate (CRE) loan categories."

"Banks also responded to a set of special questions about changes in lending policies and demand for CRE loans over the past year. For all CRE loan categories, banks reported having tightened all queried lending policies, including the spread of loan rates over the cost of funds, maximum loan sizes, loan-to-value ratios, debt service coverage ratios, and interest-only payment periods."

"For loans to households, banks reported that lending standards tightened across some categories of residential real estate (RRE) loans while remaining unchanged for others on balance. Meanwhile, demand weakened for all RRE loan categories. In addition, banks reported tighter standards and weaker demand for home equity lines of credit (HELOCs). Moreover, for credit card, auto, and other consumer loans, standards reportedly tightened and demand weakened."

Bottom line, if you don't have access to the capital markets, this sure sounds like a credit crunch to me and the high cost of money is also further dissuading both businesses and households from borrowing. Specifically on the lending side, there was a sharp rise in 2023 in the number of those banks that were tightening standards and so far in 2024 they are pretty much holding those standards, though most not tightening them further.

The Reserve Bank of Australia kept its cash rate at 4.35% as expected and seems pretty intent on sitting there for a while longer.

Governor Bullock said, "What the most recent data do reinforce is we must continue to be vigilant about the continued risk of high inflation...Right now we believe that rates are at the right level to achieve this, but there are risks and at this stage, the board is not ruling anything in or out." While they likely won't be raising rates, Bullock did not rule it out, "I hope that we don't have to raise interest rates again but having said that if we think we have to, we will."

The market doesn't believe they will hike, as they shouldn't right now, and similar to how US rates responded here last week to Powell saying they won't hike, the 2 yr Aussie yield dropped 10 bps overnight and the Aussie$ is a bit weaker vs the US dollar. There was also a broad rally in Asian bonds helping too, that was followed in Europe and the US today.

On Semiconductor and NXP Semi last week reminded us that most areas outside of AI is more challenging when it comes to selling semi chips. Microchip Technologies echoed the same thing last night with its earnings.

"We experienced a major inventory correction in fiscal 2024, leading to a 9.5% decline in revenue to $7.6 billion...We believe we are under shipping to end market demand, as customers and channel partners continued to reduce inventory. This situation has required us to implement ongoing austerity measures, including taking actions to reduce factory utilization, that will persist into the June quarter...

"As we enter fiscal 2025, we see early signs of demand stabilization but are experiencing low business visibility due to our short lead times and the continued macro uncertainty." They think their June 2024 quarter will mark "the bottom of the cycle" and sequential growth will resume in the September 2024 quarter. To this, "We are seeing early signs of green shoots in our business."

"Now for some color on the March quarter and the general business environment. All regions of the world and most of our end markets with the exception of aerospace and defense and the AI subset of data centers were weak...Our broad base of customers continued to lower their inventory and adjust their business plans in the midst of a weak macro environment and an uncertain outlook. 

"With no major supply constraints, coupled with very short lead times and a weak macro environment, we believe there is inventory destocking as well as reduction in target inventory levels that is underway at multiple levels, at our direct customers and distributors who buy from us, our indirect customers who buy through our distributors, and in some cases, our customers' customers."

Here was a lay of the commercial real estate land from Jones Lang Lasalle yesterday:

"The year started with some positive momentum highlighted by an increase in bidders and the closing of several large deals in North America. These green shoots encapsulate investors' willingness to deploy capital when market conditions warrant. However, once inflation data came in higher than expected and the hope for several interest rate cuts later this year diminished, real estate capital markets became much quieter again."

Some more, "Debt market conditions improved in early 2024, both in terms of pricing and liquidity. However, CRE markets have taken a pause over the last several weeks as lenders and investors adapt to a shift in the interest rate outlook. Lender confidence remains buried and it's strongest for industrial living and data centers, especially for high quality assets at smaller deal sizes."

On office, "Both the US and Asia-Pacific saw increases in demand as occupiers continue to upgrade to premium quality, sustainable space that improves the employee experience. In Europe, limited available space continues to dampen transaction activity. A number of large lease transactions improved in the quarter, but it's still well below pre-pandemic levels. The global office vacancy rate ticked up 30 bps to 16.5% in the 1st quarter, driven mainly by North America where the market continues to process leases that require 10% to 15% less space."

On industrial, "first quarter leasing activity declined globally as decision making slowed amid geopolitical and economic uncertainty. In the US, occupiers continue to manage through the record amount of space that was leased following the pandemic."

"Finally, in the retail sector, consumer spending and international tourism remains resilient, supporting demand for space in prime locations."

Back overseas, German factory orders in March were softer than expected, down by .4% m/o/m vs the estimate of flat and February was revised lower by 100 bps to a drop of .8%. Order weakness came domestically and from non Eurozone countries. Capital goods were soft while consumer goods did tick up. Nothing market moving here but highlights the challenges still in the German economy.

German trade data for March also came out and exports were up .9% m/o/m, 3 times expectations but follows the February drop of 1.6%. Some of this was a pick up in exports to China after their February holiday.

* We remain short of WGO

Sticking with the post-pandemic era for a moment, do you remember when droves of seniors retired early by beginning to draw on their social security as the youngest age that qualifies to hit the open road in a recreational vehicle? Some nasty essentials inflation later, seniors are trying, but not all succeeding, to rejoin the workforce. Vis-à-vis March, in April, those 55 years and older saw their Labor Force Participation Rate decline from 38.4% to 38.6% and their unemployment rate rise from 2.6% to 3.0%, the highest since February 2022 and appreciably higher than the 2.3% January 2023 bottom.

Ergo, it shouldn’t shock that aggregate hours worked in the world of RVs topped in January 2023; they’ve been in rapid decline since November 2023. The relatively short series history to 2006 means the Great Recession is the only true comparison. It’s noteworthy that the current path traces the March 2007 peak, a cooling through January 2008, and the sharp drop off thereafter (purple line).

As for RV dealers, they’ve sustained a body blow as the weaker discretionary signal flashes red, bolstering the recession narrative. However, those with RVs will travel and travel they have, if aggregate hours worked at RV parks is any approximation. This metric reached a post-pandemic peak last September (lilac line). In the six subsequent months, however, it’s slowed to a six-month annualized rate of -10.2%, the weakest pre-pandemic point since the 2015-16 industrial recession.

In that we’re not in the Winnebago set quite yet here at QI, we found it to be of immense interest that the “less” expensive, towable RVs range in price from $20,000 to $100,000 on average. Meanwhile, RV motorhome prices average between $50,000 and $600,000. As reported by homeguide.com, some luxury units cost upwards of $2,000,000. But of course (!) the importance of leisure travel for those who can foot the bill for a multi-million RV is of the highest priority, at least according to Morgan Stanley. A combined 58% of those earning $150,000 or more place travel as one of their key priorities when compared to other discretionary purchases. We find it notable that those with the biggest declines in travel plans are skewed toward the high end. The canary of RV worker hours might continue to chirp as spring turns to summer.

I will have an update on my market view later in the week.

Here is a snippet:

I am respectful of the market's momentum and changing market structure, but we have no issue - when appropriate - with adopting contrarian positioning today. and, in general, going against the tide. This may be especially appropriate now - particularly in the face of higher/inflated equity prices coupled with accumulated fundamental headwinds.

In doing so, I am reminded of a famous quote from Larry McCarthy - a trader of fearless resolve and one of the most respected junk bond traders on Wall Street:

“Higher prices bring out buyers. Lower prices bring out sellers, and size opens eyes. Time kills trades. When they’re cryin’ you should be buyin’. When they’re yellin’ you should be sellin’. Takes years for people to learn those basics – if they ever learn them at all.“

"Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats." 

- Howard Aiken

Bonus - Here are some great links:

Back on Top    

A Typical May (from "Jazzy" Jeff Hirsch)    

Sentiment No Longer a Headwind  

Non Farm Price  

From November, 2023:

The Mouse No Longer Roars

* I continue to support the view that buying Disney on weakness will continue to be an unprofitable investment endeavor

* Threats to Paramount Global - with its overleveraged balance sheet - are even more formidable than Disney's headwinds

Under normal conditions I would be a buyer of Disney - after all, its consumer franchises (movies, theme parks, cruises, etc.) are among the most unique and iconic in the world. And, its share prices ($88) has more than halved from early 2021 when the shares traded above $200/share.

However, as I have documented, below, Disney faces multiple challenges throughout its entire suite of products. Those threats have no clear short term solutions and will take years to address.

These challenges, as I have warned, are not something that an activist can remedy - as Dan Loeb and Nelson Peltz have learned - in that they are sitting with large unrealized losses on their Disney stock positions.

The greatest challenge, of course, is transitioning from profitable legacy/linear television to unprofitable streaming with all its attendant costs and marketing dilemmas. But that metamorphosis is but one of the multiple headwinds.

As a vivid example, some of Disney's older and successful movie franchises have apparently not adapted to the times.

On Sunday it was announced that box office receipts for Disney's new "The Marvels" fell dramatically short of expectations.

"Disney's Marvel Cinematic Universe is no longer a bulletproof box office franchise. That much is clear after "The Marvels" misfired with $47 million in its opening weekend to land the worst debut in MCU history. Initial tracking was closer to $75 million to $80 million, but those projections shrank dramatically in recent weeks to $60 million to $65 million. With bad buzz and actors like Brie Larson unable to promote the film due to the SAG strike (which finally ended on Friday), "The Marvels" didn't even match those disappointing estimates.

Only two other films in the sprawling series ("The Marvels" is the 33rd installment in 15 years) have opened to lower than $60 million: 2008's "The Incredible Hulk" with $55.4 million and 2015's "Ant-Man" with $57.2 million, not adjusted for inflation. Although the MCU has been showing rare signs of wear and tear in its Spandex, the franchise's other two big-screen adventures to open this year, February's "Ant-Man and the Wasp: Quantumania" ($106 million) and May's "Guardians of the Galaxy Vol. 3" ($118 million), still managed to hit triple digits in their respective debuts. The third "Ant-Man" wasn't labeled a bust until the end of its box office run. "The Marvels" is the rare MCU movie to flop out of the gate."

- Variety

"This is an unprecedented Marvel box office collapse"

- David A. Gross, Franchise Entertainment Research.

It should be noted that the overall cost of the movie "The Marvels" has exceeded $300 million - with production costs of $220 million and marketing expenses of approximately $100 million!

Here is more from past columns:

Paramount Global and Disney Remain Value Traps

* I continue not to be tempted by lower share prices of these two popular entertainment companies

My contribution to your investment performance is not only aimed at providing the analysis and demonstrating the investment rationale why I am buying, selling and/or shorting - but, importantly, to explain why certain individual equities and sectors that I am avoiding.

Paramount and Disney have been viewed widely as value plays over the last several years. I have demurred and have raised serious doubt of their value, even as several activists initiated and expanded their ownership.

In actuality the shares of (PARA) and (DIS) have served as hedges against profits - as both stocks are now making or are near multi-year lows today.

My analysis to avoid these stocks has been contrary to the near universal optimism that we have seen from the sell-side and from cheerleaders in the business media towards these very popular stocks.

Over the last decade, every bull on Disney has relied on the hackneyed phrase that the company "is a unique franchise consisting of irreplaceable content" without thinking about the burden of its debt nor the diminished prospects for both legacy broadcasting and the difficulties associated with the transformation towards a streaming business model.

My negative thesis on the prospects for profitless prosperity for streaming and other factors, was expressed in my Diary over the last two years. I repost a recent summary of my continued ursine outlook:

Jul 06, 2023 ' 09:18 AM EDT DOUG KASS

Why Disney and Paramount May No Longer Be Wonderful Companies or Investments

* Disney and Paramount may be instructive examples of high profile investing and activist mistakes from several market legends

* Rapid secular shifts in consumption, operating challenges and large debt loads have likely taken DIS and PARA out of the ranks of the "wonderful" class of American corporations

* The near to intermediate term outlooks for the share prices of Disney and Paramount look, for now, problematic... despite the large share price declines both may still represent value traps

"It's far better to buy a wonderful company at a fair price, than a fair company at a wonderful price."

- Warren Buffett

There is less than meets the eyes with regard to the futures of Disney (DIS) and Paramount Global (PARA) - two companies with a lot of debt and declining fundamental fortunes, as the media landscape undergoes a difficult, unprofitable and painful shift from linear to (content expensive) streaming.

Investment in these two companies appear to be examples how even some of the greatest money managers (Warren Buffett/Berkshire Hathaway (BRK.A) (BRK.B) , Michael Dell (DELL) ) and activists (Nelson Peltz and Dan Loeb) might have made meaningful mistakes by failing to recognize that the wonderful financial and operating profiles of the past are becoming a distant memory.

DISNEY

Despite an extensive list of well-recognized and popular product offerings - movies, theme parks, merchandise etc. - Disney's fortunes have deteriorated under the weight of legacy debt (from the Fox (FOX) deal), an historically bloated cost structure and other operational challenges - mainly the transition from previously profitable linear media to now unprofitable and capital/content intensive streaming:

Jun 22, 2023 ' 01:08 PM EDT DOUG KASS

The Mouse Isn't Roaring

* I continue to avoid Disney despite its sharp share price drop and serial underperformance

Under $90 I would normally be buying Disney (DIS) - especially with several activists as vocal and significant stakeholders.

But there is nothing normal about the accumulating threats to the company's near and intermediate term prospects:

* The legacy broadcasting business is deteriorating much faster than expected - for Disney and its competitors.

* The transition from formerly high margined linear broadcasting to streaming has become unexpectedly more difficult with, among other issues, content expenses out of control.

* A series of theatrical disappointments are raising red flags - particularly with the threat of AI oriented peers.

* Even the company recently admitted that the ridiculously high price of admission prices to Disney's theme parks has likely approached or is at the limit.

* Disney's future leadership is uncertain.

* To offset some of the above, the company has embarked on a cost cutting effort - but the low hanging fruit of cuts have likely been picked.

* The shares are "over owned" and given the erosion in fundamentals (2023-24 EPS estimates are too high) I don't know where the marginal buyer comes from.

PARAMOUNT GLOBAL

Paramount also faces the dual challenge of a large debt load and the formidable challenge of transition from linear to streaming:

Apr 25, 2023 ' 03:08 PM EDT DOUG KASS

My PARA Exposure

I have shifted down in my exposure to Paramount Global (PARA) - from medium to small sized.

I did this based primarily on the likely weakening profit and cash flow picture at the company and at other streamers. As mentioned previously, despite cutting content expenditures, PARA will have to go into its cash account to cover the quarterly dividend.

I am also importantly influenced by the weakness in the share prices of PARA's streaming peers.

Not only is Disney's (DIS) share price lower but I am especially concerned about the weak price performance of Warner Discovery's (WBD) common shares - despite the strong buy issued at Goldman Sachs over the last few trading sessions.

May 04, 2023 ' 07:51 AM EDT DOUG KASS

Not Unexpectedly... Paramount Global Spits the Bit

* Good sale back in April

Back in late April I reduced my (PARA) long position dramatically - from medium sized down to tag ends:

Apr 25, 2023 ' 03:08 PM EDT DOUG KASS

My PARA Exposure

I have shifted down in my exposure to Paramount Global (PARA) - from medium to small sized.

I did this based primarily on the likely weakening profit and cash flow picture at the company and at other streamers. As mentioned previously, despite cutting content expenditures, PARA will have to go into its cash account to cover the quarterly dividend.

I am also importantly influenced by the weakness in the share prices of PARA's streaming peers.

Not only is Disney's (DIS) share price lower but I am especially concerned about the weak price performance of Warner Discovery's (WBD) common shares - despite the strong buy issued at Goldman Sachs over the last few trading sessions.

My concerns were fulfilled this morning as the company reported an operating loss and reduced its dividend.

Paramount Global misses by $0.09, misses on revs (22.89)

· Reports Q1 (Mar) earnings of $0.09 per share, excluding non-recurring items, $0.09 worse than the S&P Capital IQ Consensus of $0.18; revenues fell 0.9% year/year to $7.26 bln vs the $7.42 bln S&P Capital IQ Consensus.

· Pluto TV Hit 80M Monthly Active Users (MAUs) and is the #1 Free Ad-Supported Streaming Television Service Globally. Total Direct-to-Consumer (DTC) Revenue Grew 39% Year-Over-Year to An Annual Run Rate of More Than $6B. Total Global Viewing Hours Across Paramount+ and Pluto TV Increased Over 50% Year-Over.

· Paramount+ reached 60M total subscribers with the addition of 4.1M subscribers in the quarter. Global subscriber growth was driven by a strong content slate including top originals like 1923, Tulsa King and the returns of Mayor of Kingstown and Star Trek: Picard, hit film franchises in Top Gun: Maverick and Teen Wolf: The Movie, as well as the NFL Playoffs.

· Quarterly Cash Dividend Reduced to $0.05 Per Share (prior dividend $0.24/share).

Bottom Line

For the reasons mentioned in this morning's opening missive, I am still materially avoiding the shares of Disney and Paramount.

Position: Long DIS (VS)

BY DOUG KASS

NOV 13, 2023 9:15 AM EST

* Beware of company managements that are focused on short-sellers (and who blame short-sellers for weak share price performance) ...

"I love burning short-sellers."

- Alex Karp, Palantir CEO

Palantir's  (PLTR)  CEO has been on a continued tirade against short-sellers over the last month.

Let's go to the tapes! Here and here. 

Last night Palantir reported quarterly results.

The shares are trading -$2.50 (or -10%) lower in the premarket.

Another lesson learned.

Disney  (DIS)  beats estimates and raises year's guidance.

However, a disappointment in subscriber adds may limit gains for the shares today.

I continue to avoid all streaming companies — and that includes DIS.

In fact on the gap higher following the EPS report (just now) — I took a small trading short rental at $117.06.

I remain short Warner Bros. Discovery  (WBD)  (after covering my Paramount Global  (PARA)  short on Monday).

* Over the last two months several large institutional investors are consistently creating meaningful new share positions in MSOS...

By contrast, here is a potential cannabis positive:

From the laser-eyed and analytical folks at Hedgeye:

And this detailed and devastating Wall Street Journal column this morning. 

The S&P Short Range Oscillator is more overbought — at 4.81% vs. 4.45%.

Note that the forward P/E multiple now exceeds 20x (or about 20% to 25% above the historical mean).

Markets ripped on Monday — but on lower volume:

This tweet likely impacted  (MSOS)  negatively towards the close of trading on Monday: