Daily Diary

Doug KassDoug Kass
DATE:

Pot Plays

I haves sold MSOS and I am putting the proceeds Into Green Thumb and Trulieve. And unlike in the MSOS ETF I am planning to weight GTBIF much more heavily than TRLV

 After reviewing the earnings reports on the major cannabis companies – and giving this a lot of thought – I have decided to sell my entire MSOS holdings and to put the proceeds into Green Thumb and Trulieve.  (I am now out of MSOS and I have been steadily adding to GTBIF and have begun to add to TRLV)

As you all know by now this is not the first time that I have moved out of MSOS and back into individual cannabis equities. 

Also noted previously in my Diary, at times I have not been fully supportive of the portfolio management of the MSOS ETF – as it has added to certain  cannabis stocks that I am uninterested in and do not find attractive. At the same time the portfolio manager of MSOS has steadily  subtracted to cannabis stocks (like GTBIF) that I view as “best in class” and favor among any other stock in the cannabis universe ( on a intermediate term basis). 

Currently Trulieve represents about 35% and Green Thumb represents only about 16% of MSOS.  I do not want that ratio of representation in my holdings of cannabis. My current plan is  to switch those ratings around by overweighting GTBIF relative to TRLV on about the exact reverse ratio that exists in the MSOS ETF.

The 3Q2026 top and bottom lines coupled with the high operating margins and cash flows at TRLV and GTBIF suggest to me that they are the premiere companies in the sector and are clearly the eventual winners as the regulatory tighthold is reduced.

*Importantly, upon a likely rescheduling of cannabis, I expect GTBIF to uplist to the NYSE. As such it will be immediately eligible to be included in some of the larger ETFs. In turn, GTBIF’s shares  will benefit from inflows into those passive ETFs. 

I remain long TSNDF, VRNO and GLAS but have no plan to increase those weightings currently as a result of my observations above.  (I eliminated CURLF earlier this week and I have taken a tax loss in a portion of my GLAS position but will likely reestablish that position (subject to the wash sale rule) in early December).

At the time of publication, Kass was long GTBIF M TRLV S VRNO VS.

BY Doug Kass · Nov 6, 2026, 11:17 AM EST

More Bank for My Buck

Adding to the banks

Positions: Long C BAC WFC

BY Doug Kass · Nov 6, 2026, 9:40 AM EST

Programing Note

I have an 8:45 a.m. (research) conference call.

Back on the opening.

Positions: None 

BY Doug Kass · Nov 6, 2026, 8:40 AM EST

Returning to the Land of the Living

* Thursday I pivoted and I have begun to buy selected equities …

“Buy to the sounds of cannons, sell to the sound of trumpets”

– Attributed to Nathan Mayer Rothschild

“Price is what you pay, value is what you get.”

 – Warren Buffett 

Over the last two or three years I have had an ursine market view. 

My concerns, written frequently on the pages of my Diary were multiple. 

Here are some of the major headwinds we previously have expressed: 

* The rising prospects for “slugfation” (sluggish economic growth and sticky inflation)

* The lack of fiscal discipline on the part of both the Republicans and Democrats in Washington, DC.

* Interest rates will likely be higher for longer

* Improvisational foreign policy that had potential adverse social, interest-rate and economic ramifications

* The AI trade has been “the straw that stirs the drink” of the U.S. economy, corporate profits and the U.S. stock market — we saw a wide range of concerns (including political objections to data-center expansion) and have questioned the optimistic ROIC assumptions regarding the massive AI capital spending spree here and here

* Investor optimism seemed extreme as valuations have been elevated — with most traditional valuation metrics in the 90%-tile or higher 

* For years market participants have increasingly acted as if they were at a casino (gambling/speculating and not investing)— as measured by the popularity and proliferation of leveraged ETFs and 0DTE (zero days till expiration) options

* Market structure posed a potential risk should price momentum abruptly reverse

Though our arguments had merit (and most were generally proven accurate), the markets ignored our concerns.

While the price of the S&P index has remained elevated, over the last several months there has been a stealth bear market which has accelerated dramatically over the last week. Since the early summer, many widely-held stocks technology stocks have fallen by -50% or more. 

1.  Consider, for example, shares of Dell Technologies (DELL), which traded at $595 on October 8, 2026, and less than a month later on Thursday, November 5, 2026, were at $319, when we initiated a long position. 

2. We are finding plenty of emerging value opportunities outside of technology. As an example, we initiated a long in “best of class” Morgan Stanley (MS) Thursday at $181 compared to its share price of $235 less than four months ago.

3. We have other examples developing that we will share in the future. 

No Longer a Cassandra

My hedge fund, Seabreeze Partners, is a long/short fund and not a short or short-biased fund. 

I recognize that I have sounded Cassandra-like in my bearish views but, as mentioned, many of our concerns were valid and on target. Specifically, interest rates rose rapidly (absolutely and relative to expectations), inflation was sticky, economic growth was disappointing, improvisational policy led to an unwanted war and the efficacy and profitability of AI is now suspect.

We have often written that being long stocks can generate wealth and being short stocks (and/or having large cash reserves) can help to preserve capital.  

Until recently, most stocks failed to meet our standards for investing. This is changing rapidly — as Thursday the major indices each fell by about -5%.

The concerns expressed above have largely been accepted by most investors and some have begun to be discounted (“second level thinking”) in an increasingly greater number of stocks.   

Importantly, some of the major concerns (discussed above) are likely to moderate:

* While the cumulative or “stacked” inflation since 2021 remains problematic, we now see signposts (e.g. lower energy prices) that inflation will moderate relative to consensus expectations

* If inflation does retreat, the domestic economy (fueled by the consumer) may exhibit better growth than we previously expected

* Interest rates may have peaked for the cycle

* The current Administration’s potential impovisational policies are likely to be diluted by the stronger-than-expected showing of the Democratic Party in this week’s elections and the president’s “lame duck” status

* Tuesday’s Blue Wave likely means that the AI capital spending spree will probably be moderated — reducing our fears and smoothing the AI capital spending cycle (serving to reduce the chance of a boom-and-bust cycle)

* Equity valuations in a number of sectors (particularly technology) have declined considerably as “fear” and panic have replaced greed 

* With the rise in “fear” and heavy (recent) trading and investment losses, there has been a diminished interest in 0DTE call options and leveraged ETFs  are suffering from outflows — moreover, several large hedge funds have apparently been forced to liquidate (and have contributed to this week’s sharp market decline)

We Have Begun Buying Stocks That Now Meet Our Selection Standards

That is not to say we are wildly or even mildly bullish — we are not.

However, as an expression of the increased investment opportunities that appear to be emerging, I have moved from a small net short exposure to a 20% net long exposure by Thursday’s close of trading.

Should the current decline in stocks accelerate we are likely to increase our invested position if the fundamentals and other factors continue to stabilize or improve.

We welcome the chance to return to “the land of the living” and buying equities — with our current intention of buying and holding… and not trading. 

To paraphrase Warren Buffett:

It may be time to consider being greedy when others are panicking and are feeling fearful.

We are, as we now see emerging value in selected equities that have been decimated over the last 3-4 months.

Position: Long DELL (M), MS (M)
 

BY Doug Kass · Nov 6, 2026, 6:35 AM EST

My Tweet of the Day

Position: None

BY Doug Kass · Nov 6, 2026, 6:25 AM EST

Tweet of the Day (Part Deux)

Position: None

BY Doug Kass · Nov 6, 2026, 6:10 AM EST

Tweet of the Day

Position: None

BY Doug Kass · Nov 6, 2026, 5:55 AM EST

Oscillator Finally Moves to Oversold

The S&P Short Range Oscillator finally moved into a small oversold at -0.14% vs. 2.14%.

I pivoted and purchased SPY and QQQ yesterday afternoon and added in the evening session:

Dougie Kass

In the after hours, with S&P futures -45 handles and Nasdaq futures -221 handles I have added to my SPY $729.22and  QQQ $643.06 longs.

Position: Long SPY (S), QQQ (S)

BY Doug Kass · Nov 6, 2026, 5:45 AM EST