Tag: finance

Denmark Accuses Iran Of Assassination Attempt On Its Territory, Will Push For EU-Wide Sanctions

Trump’s push for crippling sanctions against Iran got an unexpected supporter on Tuesday, when Denmark accused Iranian intelligence services of trying to carry out a plot to assassinate an Iranian Arab opposition figure on its territory. A Norwegian citizen of Iranian background was arrested in Sweden on Oct. 21 in connection with the plot and extradited to Denmark, Reuters reports citing Swedish security police.

According to Danish intelligence chief Finn Borch Andersen, the assassination was meant to target the leader of the Danish branch of the Arab Struggle Movement for the Liberation of Ahvaz (ASMLA) which seeks a separate state for ethnic Arabs in Iran’s oil-producing southwestern province of Khuzestan.

While both the arrested Norwegian and Tehran have denied the allegations, Sweden is certain it has the right man: “We are dealing with an Iranian intelligence agency planning an attack on Danish soil. Obviously, we can’t and won’t accept that,” Andersen told a news conference.

Andersen said the arrested Norwegian citizen had denied charges in court of helping a foreign intelligence service plot an assassination in Denmark.

Iranian foreign ministry spokesman Bahram Qasemi dismissed the accusations. “This is a continuation of enemies’ plots to damage Iranian relations with Europe at this critical time,” Tasnim news agency quoted him as saying.

Danish Foreign Minister Anders Samuelsen said on Twitter that the reported attack plot was “completely unacceptable”, and that “the government will respond to Iran and is speaking with European partners on further measures,” Samuelsen said.

Danish Foreign Minister Anders Samuelsen

During a subsequent press conference, Samuelsen said that Denmark believes the Iranian government was behind the attempted attack, and that the Danish ambassador has been recalled from Iran. Samuelsen also said that Denmark will push for EU-wide sanctions against Iran in light of the attempted assassination.

During the conference, Samuelsen also said evidence presented to him by Danish intelligence leaves “no doubt” Iran’s government was behind the plan, and said that behavior by Iranian intelligence was not restricted to Denmark, causing alarm across several European nations. At the same time, Samuelsen said that Denmark doesn’t want the EU to withdraw from nuclear deal, a pact which is “in our best interests” and yet it wasn’t clear how it could co-exist with a new round of EU sanctions against Tehran.

The allegations come at an awkward time with European countries still trying to save a 2015 nuclear deal between Iran and world powers after President Trump withdrew the United States from the pact and announced the reimposition of sanctions on Tehran.

While it wasn’t immediately clear what evidence Denmark possessed to make the serious accusations, on Sept. 28, Danish police shut two major bridges to traffic and halted ferry services from Denmark to Sweden and Germany in a nationwide police operation to prevent a possible attack. A few days earlier, the Norwegian suspect had been observed photographing and watching the Danish home of the ASMLA leader, police said.

In November 2017, Ahmad Mola Nissi, an Iranian exile who established ASMLA, was shot dead in the Netherlands. The Danish security service then bolstered police protection of the ASMLA leader in Denmark and two associates.

Following a Sept. 22 shooting attack on a military parade in Khuzestan in which 25 people were killed, Iran summoned the envoys of the Netherlands, Denmark and Britain. Taking the initiative, Iran accused the three countries of harboring Iranian opposition groups.  Another Arab opposition group, the Ahwaz National Resistance, and the Islamic State militant group both claimed responsibility for the parade attack, though neither has provided conclusive evidence to back up their claim.

In an oddly similar situation, last week diplomatic and security sources said France had expelled an Iranian diplomat over a failed plot to carry out a bomb attack on a rally in the Paris area by an exiled Iranian opposition group.

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Contagion

Authored by Jeffrey Snider via Alhambra Investment Partners,

The word contagion is easy enough to understand. Whether the spread of disease or disaster, sometimes it is difficult if not impossible to contain. In financial terms, contagion is often thought of along the lines of 2011; Greece started it and it spread throughout the rest of Southern Europe. The euro was coming apart, and what “it” was didn’t seem to matter.

The eurodollar system is not a single, monolithic whole. It features many different pieces that sometimes don’t fit together at all. There is always something wrong somewhere, even during the best of times. It is eerie in hindsight, but there was a huge outbreak of repo fails, for example, in 2001 following September 11th. It kept up for months on end, until the middle of 2002. Outside of dot-com stocks, the system didn’t crash.

Quite the contrary, while the repo market was awash in trouble the recession which had begun months before ended. Economic recovery, though tepid and shameful, emerged out of those difficulties which were at times quite severe (there were more than $1 trillion in fails the week of February 13, 2002). The dollar, in fact, would start to fall and keep on falling consistent with rapid, massive eurodollar system growth and inflation.

Contagion is where funding issues in one part of the system spillover into another; and then another. Rather than operate like a seamless global money system, the parts break down and not always one by one. Parabolic contagion, which is what September 2008 really was, can be lurking.

The effects are not always financial and economic. Two examples from this weekend remind us of this fact.

First:

Both the parties in German Chancellor Angela Merkel’s governing coalition have suffered heavy losses in a regional election, early results show.

Her centre-right CDU party and the centre-left SPD were each 10% down on the previous election in Hesse state…

The federal government must find a “reasonable way of working”, after what looks to be the SPD’s worst result in the western state since 1946.

Second:

Brazil has been one of the world’s most exciting emergent nations, yet its evolution over 30 years from dictatorship to hesitant democracy seems to have stalled. Bolsonaro has exploited the oldest politics, that of self-interest, and also the newest, that of anger, polarisation and fear. Voters have stomached his distaste for gay people, feminism, rainforests and the rule of law, to rid themselves of a corrupt leftwing regime unable to contain street violence. A famously tolerant nation has opted for military and economic discipline.

These are the fruits of constant dysfunction. Central bankers keep saying that everything is working again. They aren’t just wrong. When it becomes clear enough to regular people, the everyone-for-himself regime is the least surprising aspect.

It is a systemic breakdown that keeps breaking down. After a brief respite from the middle of 2016 forward, we’re seeing it all again. Since last September, the warnings multiply and escalate. Contagion has been the word, even as things that were going wrong started to go right.

Repo is a perfect example. The outbreak of fails that popped up in September 2017 suggested serious problems. That repo fails haven’t been an issue since March suggests contagion. It may have started with US domestic collateral (or the limited extent of what’s reported to the Federal Reserve by primary dealers) but unlike 2001 and 2002 it sure hasn’t ended there.

I warned at the start of May over the growing but false sense of calm especially in repo that it wasn’t a one-off but instead an evolving wave of global monetary deflation. The word contagion is somewhat misleading in this context.

To be perfectly clear, I’m not suggesting there is a crash looming in stocks or even “dollars.” More realistically, what does seem to be happening is a widening of difficulties in terms of the dollar shortage and the dollar short. Rather than being an anomaly, we keep finding escalation.

That the repo market sat it out in late March and most of April doesn’t necessarily mean anything other than handing off problems into the next segment (FX). It could also be nothing more than the far side of reverberation, with renewed dealer hoarding April 18 indicating the possibility of the boomerang returning on its backward leg.

The big picture is this; whatever “it” is and has been, it doesn’t seem to be going away at least not yet. Instead, it may be snagging other parts of eurodollar and funding markets that were previously in “reflation.”

This is what’s especially concerning about the new shape of the WTI futures curve. If oil capitulates, has capitulated, to the eurodollar squeeze, too, then we can’t help but conclude that “it” is still spreading too far and wide. Repo and collateral may have recovered from the initial bout of the disease, just as in the first half of 2015, but not before they infected too many other parts of the global system. And that may only mean it is a matter of time before they, too, succumb to another round of infection.

Despite a lot that has happened in response since mid-year, there are key indications threatening to break out all over again. China and CNY have reminded everyone of the simple 2015 truth; CNY DOWN = BAD. Though not enough people learned “why” that is from the last outbreak, they at least appreciate this “what.”

A lot of times, what’s happening in funding markets is just hidden way out of sight. We can see things like repo fails, but what’s driving those fails we may never know. The shadows are deep and very dark.

In Europe, one of the central points of Reflation #3 was European banks. The euro has been hanging by a thread since May, and with a small push over the coming days it will make a new cycle low. It would matter for broad sentiment as much as technical risk and eurodollar money.

DXY, the narrow dollar index, has fractionally bested August 14 to set a new cycle high today. Again, sentiment matters especially in light of what is becoming pretty well-defined contagion.

The warnings still escalate.

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Trump’s Plan For The Caravan; “We’re Going To Put Tents Up All Over The Place” 

The Trump administration will “build tent cities” for thousands of Central American migrants currently making their way north through Mexico to the Southern US border, reports The Hill. 

In an interview with Fox News‘s Laura Ingraham, Trump said that his administration would “hold” the migrants seeking asylum instead of releasing them pending court dates as prior administrations have done, also known as “catch and release.”

“If they applied for asylum, we’re going to hold them until such time as their trial takes place,” Trump told the Fox News host. 

“Where? We have the facilities?” she asked.

“We’re going to put up – we’re going to build tent cities,” Trump responded. “We’re going to put tents up all over the place. We’re not going to build structures and spend all of this, you know, hundreds of millions of dollars — we’re going to have tents.“

“They’re going to be very nice,” he added.

Trump has called the migrant caravan a “national emergency,” and threatened to cut financial aid to Guatemala, Honduras and El Salvador, tweeting last week: “We will now begin cutting off, or substantially reducing, the massive foreign aid routinely given to them.”

Meanwhile, on Monday the Wall Street Journal reported that the US military will deploy 5,000 troops to the Southern border to reinforce the roughly 2,000 National Guard forces already in place. 

On Monday, President Trump warned the caravan, tweeting: “Many Gang Members and some very bad people are mixed into the Caravan heading to our Southern Border. This is an invasion of our Country and our Military is waiting for you!“

Democrats and pro-illegal immigrant activists have accused Trump of invoking xenophobic and racist themes in an effort to scare Republicans into voting during next week’s midterm elections. 

Former President Obama denounced Trump’s rhetoric at a recent campaign event in Florida, saying: “Now the latest, they’re trying to convince everybody to be afraid of a bunch of impoverished, malnourished refugees a thousand miles away — that’s the thing, it’s the most important in this election? … We’re scare-mongering people on the border.” 

When Ingraham asked him to comment, Trump replied that there were “gangs” within the caravan. 

And they will be living in a tent should the choose to cross the southern US border. 

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Why Oil Prices Could Still Go Lower

Authored by Art Berman via Oilprice.com,

Crude markets had a panic attack in August and September that sent prices soaring. Sanity is now returning. Prices have fallen but are likely to move even lower over the next few months.

The panic attack was caused largely by Trump’s August 7 announcement that sanctions would be re-imposed on Iran. Anxiety about the effect on oil supply and prices was reasonable but the reaction was hysterical.

From August 15 to October 1, Brent December futures spreads increased $3.01 (175 percent) from $1.72 to $4.73. Brent prices increased $15.53 (22 percent) from $70.76 to $86.29 (Figure 1).

(Click to enlarge)

Figure 1. Brent Dec spreads collapsed from $4.73 to $1.52 since Oct 1 & are now less than when price rally began after announcement to re-impose Iran sanctions in mid-August. Front-month Brent down from $86.29 to $76.17 but still higher than $70.76 Aug 15 price. Source: Barchart and Labyrinth Consulting Services, Inc.

Then spreads and prices collapsed. By October 24, spreads had fallen from $4.73 to $1.52, less than when the price rally began. Front-month Brent price decreased from $86.29 to $76.17. Prices and spreads recovered slightly on October 24 closing at $76.89 and $1.76, respectively.

It seems unlikely that the correction is over. The timing depends on how long it takes for markets to fully recover from what Vitol’s Ian Taylor calls the supply fear factor. After 6 weeks of fear, markets must adjust to the reality that the “oil market is adequately supplied for now.”

Clearly markets are concerned about more than just Iran. Falling or uncertain output from the problem children Venezuela, Libya and Nigeria, and take-away constraints from the Permian basin are critical.

Iran, however, is different because it is a completely artificial supply crisis. It was a choice made by Donald Trump and his advisors. Markets are used to the uncertainty of its problem children but not to the apparent certainty of an executive decision. The reaction was consistent with the cause—certain and linear.

It was also wrong.

World liquids production has, in fact, increased 2.91 mmb/d so far in 2018. Much of that increase came from producers other than U.S. & OPEC (Figure 2).

(Click to enlarge)

Figure 2. World liquids production has increased +2.91 mmb/d TYD 2018. Output from rest of the world excluding U.S. and OPEC increased after May 2018. Source: EIA STEO and Labyrinth Consulting Services, Inc.

That data, of course, includes losses from Venezuela, Iran, Libya, and Nigeria.

Both OECD and U.S. commercial stocks increased in September moving comparative inventory (C.I.) 30 mmb higher and closer to the 5-year average (Figure 3).

(Click to enlarge)

Figure 3. OECD minus U.S. C.I. rose +30 mmb in Sept as both OECD and U.S. stocks increased. Yield curve suggests Brent avg monthly price of $78.89 was ~$4 over-valued. Current front-month Brent price also over-valued at $76.71. Source: IEA, EIA and Labyrinth Consulting Services, Inc.

This data is consistent with the July 2017-through-present yield curve shown in Figure 3. Based on that trend line, the September Brent average price of $78.89 was approximately $4.50 over-valued. Today’s front-month price of $76.23 is still over-valued by about $2.00.

Data further suggests that OECD and U.S. C.I. may have reached a minimum and will continue building later in 2018 and into 2019.

“We expect an oversupply in 2019, we may have to go back to the reduction,” Saudi Energy Minister, Khalid al Falih commented in late September.

Positive oil supply growth began in the first quarter of 2018 and price generally lags the shift to positive growth by several quarters (Figure 4). This is important because it signals a probable lessening of or end to the upward movement of oil prices that began in early 2016.

(Click to enlarge)

Figure 4. Oil prices will probably be lower going forward into 2019. Positive world liquids supply growth began in 1Q 2018. Price generally lags shift to positive supply growth by several quarters. Source: OPEC, EIA STEO and Labyrinth Consulting Services, Inc.

Year-over-year supply growth for the third quarter of 2018 was 2.35 mmb/d according the the IEA latest Oil Market Report. Year-to-date supply growth is about 2 mmb/d.

The last time a secular shift like this occurred was in early 2014. The previous deficit shifted to supply growth in the first quarter of 2014. Prices, however, remained above $100 until the third quarter. Brent begin to fall in earnest and then collapsed during the fourth quarter of 2014.

I am not suggesting that another oil price collapse is going to occur in 2019. I am saying that data indicates that lower rather than higher oil prices are more likely going forward.

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Mueller Says Women Were “Offered Money” To Make “False Claims” Against Him

Special Counsel Robert Mueller has told the FBI that women were “offered money” to make “false claims” about him, according to CNBC. Mueller has referred the allegations to the FBI. 

Special counsel spokesman Peter Carr said the following in a statement: 

When we learned last week of allegations that women were offered money to make false claims about the Special Counsel, we immediately referred the matter to the FBI for investigation.

Conservative commentator, attorney and lobbyist Jack Burkman, meanwhile, tweeted on Tuesday: “On Thursday, November 1, at the Rosslyn Holiday Inn at noon, we will reveal the first of Special Counsel Robert Mueller’s sex assault victims. I applaud the courage and dignity and grace and strength of my client.”

Burkman also posted a teaser video on Facebook:

In a Facebook video also posted Tuesday, Burkman claimed “we will unveil the first of the sex assault victims of Robert Mueller.” In the video, Burkman said the “first” alleged accuser is “coming out this Thursday at high noon.”

He added: “Robert Mueller is a bad guy not just because of what he does inside the courtroom, but because of what he does outside the courtroom.” –CNBC

Burkman previously made headlines when he claimed that a man hired to help investigate the murder of DNC staffer Seth Rich tried to kill him.

DOJ spokeswoman Sarah Isgur Flores referred all inquiries back to the special counsel, however we imagine the “all survivors must be believed” standard applies.  

Developing…

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Is GE Facing Another Commercial Paper “Moment”?

In addition to being a poster child for how far a formerly iconic name can crash when it is no longer able to “adjust” results, General Electric’s ongoing collapse, catalyzed today by the news that the SEC and DOJ have expanded their ongoing investigation to include a $22-bln writedown of goodwill from the conglomerate’s power division, is also a case study of how tighter financial conditions – in this case via 90 Day Commercial Paper – are hurting equity returns. This is shown in the chart below, in which GE stock has been tracking the rise in 90 Day CP almost rick for tick over the past 2 years (h/t Charlie McElligott).

Or perhaps there’s a less innocuous explanation that than just the correlation between 90D CP rates and GE’s price.

Recall that between GE and GE Capital, there is some $42 billion in debt maturing through 2020. Of this, a material portion is in the form of commercial paper – the type of short-term debt that caused a cash crunch for the company when the market froze in 2008. The number is fluid and varies depending on when in the quarter/year the company is, but indicatively ended 2017 with $3 billion in such paper outstanding, even as the average balance was $17.3 billion during the year’s fourth quarter.

The problem for GE – in addition to higher rates and its its latest accounting woes that have dragged its stock price to the lowest level in decades – is that it it is facing an old, familiar and potentially deadly ghost.

According to the grapevine, GE is finding itself unable to plug a growing commercial paper “hole” and as a result it has quietly been drawing on its revolver with the largest US bank to pretend that all is well, and keep shareholders fooled that it’s liquidity is adequate.

This will only be exacerbated if and when GE is downgraded, and the company’s dirty CP laundry is exposed. But while GE will likely find alternative sources of funding in a world that is still drowning in excess liquidity, the bigger question is how will the market respond when it emerges that the former industrial conglomerate is facing the same liquidity crunch that emerged during the last financial crisis, and will that become the real canary in the coalmine for the US funding market?

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Apple Store Expansion In China Hits “Massive Brick Wall” 

While Apple aggressively expands its retail presence globally, Chinese store growth severely wanes.

Apple Storefronts Tracker shows in 2015 and 2016 that its retail presence in China added 30 new stores. Since early 2017, the company opened five new locations in the country, as it appears – store growth has hit a massive brick wall.

Apple noted in July’s 3Q18 earnings call that it recently opened its 50th retail store in greater China. According to the newly published report from The Information, this achievement would have come sooner if not for changes in the market.

Apple ditched China in 2018 and pushed for new countries, including South Korea, Austria, and Thailand. The shift in strategy could be due to Chinese customers gravitating to domestic brands like Oppo, Vivo, or Xiaomi.

Ben Cavender, a senior analyst at Shanghai-based consultancy China Market Research Group, said the iPhone attracted Chinese shoppers to Apple stores a decade ago, but not so much anymore, as they now have local smartphone brands that are more powerful and or cheaper.

Cavender added: “At that time, Apple was offering a product that was so much better and so different that it made sense for people to show up at the store to buy something. In 2018, it’s not clear what Apple is selling that’s dramatically different or better than anything else on the market.”

The report also explores Apple’s struggle with red tape, fraud, and other factors.

On government bureaucracy:

“Apple had to navigate a maze of government bureaucracy to obtain everything from business and tax licenses to construction, fire and customs permits for imported building materials, former employees say. The regulatory framework in China is far more complicated than in the U.S., with many more layers of government, these former employee say, and it’s far more opaque. Employees frequently scrambled to chase down permits and local approvals to keep store openings on track, ” said The Information. 

On scalpers:

“Apple, too, had to contend with scalpers, known as “yellow cows” in colloquial Chinese. These scalpers swarmed its stores and elbowed out other customers during product launches and in-store promotions.

Apple executives worried they were losing control of the customer experience in their stores, and along with it opportunities to interact with real consumers. The scalpers showed little interest in the accessories and add-on services Apple likes to offer customers,” said The Information. 

Other factors, according to The Information, include government officials asking for free products as a form of bribery, tax issues with Beijing and Shanghai, and a massive black market for iPhones.

Earlier this month, new details emerged about Apple’s struggle with iPhone repair fraud in China, that has cost the company billions of dollars.

The Information notes that return rates have been extremely high, fueled, in part, by the black/grey markets of iPhone resellers.

As a result of these difficulties, Apple is said to have “abruptly changed” its retail expansion plans in mainland China, resulting in a slowdown of retail store openings.

Last quarter, Apple achieved $9.5 billion from the Greater China region, which accounted for 17.9% of the company’s revenue in the quarter, making it the company’s third largest market, behind the United States and Europe.

On Thursday, Apple will release its 4Q18 earnings report, where more insight into Apple’s dealings in China will be uncovered, along with the effects of the trade war.

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Why The 2018 Stock Market Corrections Are Different

Via Global Macro Monitor,

Just a quick note and some data to bolster our last post and concern that Treasury yields are not coming in  during this stock market correction.

The table illustrates that the this year’s two S&P 10 percent corrections have coincided with a rise in the 10-year  Treasury yield. 

 This is very rare, at least in recent history, and has happened only once in the last 20 years, and that was a special case due to a massive flight to quality and complications around the Russian Debt Default and LTCM crisis.

Flight To Quality

In general, when stocks fall by 10 percent, there is a flight to quality and yields fall on Treasury securities.

Yes,  the 10-year is down from its peak of 3.25 percent but higher than when the S&P500 peaked in September.  One can fiddle with the data and use intraday highs and lows, but you get our point, we hope.

The Gathering Storm In The Treasury Market  

If you haven’t read our beast of a post on the structural changes in the Treasury market, we suggest you run to it now!   Click right here:  The Gathering Storm In The Treasury Market 2.0

We also recommend our most recent piece,  Where The Next Financial Crisis Begins.

Keep this on your radar folks,  we think it signaling there are structural changes taking place in the global capital markets.

Updated:  October 29 @  4:06 pm Eastern

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Long New York Times, Short FAANG: Here’s What Hedge Funds Pitched At Last Night’s Sohn Conference

A legion of Stanford MBAs descended on the ballroom of the Hyatt Regency in San Francisco on Monday for the ninth annual Sohn San Francisco Investment Conference, where their employers paid thousands of dollars a ticket for them to listen to a roster of A-list hedge fund managers share their latest big investment plays. As stocks erased most of their early gains in afternoon trading, the steady patter of calls failed to elicit the same boost to the company’s shares as is often seen at Sohn New York, a phenomenon that has been described by some as the “Sohn effect”. As one might expect given the location, tech plays were prominently featured in presentations, though one investor had the temerity to advise the audience to short tech as volatility climbs.

Bloomberg compiled a list of highlights from the event, which featured Gil Simon, CIO at SoMa Equity Partners, and Kevin Oram, co-founder of Praesidium Investment Management among the crowd of A-list speakers (see the full roster below):

  • Mayor London N. Breed, Mayor of the City and County of San Francisco
  • Alex Gleser, Portfolio Manager, TPG Public Equity Partners
  • Glen Kacher, President and Chief Investment Officer, Light Street Capital
  • Mick McGuire, Founder and Managing Partner, Marcato Capital Management
  • Dan Morehead, Chief Executive Officer, Pantera Capital/Chairman, Bitstamp
  • Kevin Oram, Co-Founder and Co-Portfolio Manager, Praesidium Investment Management Company, LLC
  • Jeff Osher, CFA, Portfolio Manager, No Street Capital
  • Andrew Parmentier, Partner, Chief Strategy Officer, and Head of Thematic Investing, Highland Capital Management, L.P.
  • Michael McLochlin, Portfolio Manager, Highland Capital Management
  • Shashin Shah, Founder and Portfolio Manager, Think Investments
  • Jeff Shen, PhD, Managing Director, Co-CIO of Active Equity and Co-Head of Systematic Active Equity, BlackRock
  • Gil Simon, Chief Investment Officer and Managing Partner, SoMa Equity Partners
  • Vineer Bhansali, PhD, Founder and CIO, Long Tail Alpha
  • Marcelo Desio, CFA, Portfolio Manager, Lucha Capital Management L.P.
  • Daniel Kozlowski, Founder and CIO, Plaisance Capital, LLC
  • Franklin Parlamis, Chief Investment Officer, Aequim Alternative Investments

* * *

Here’s a quick rundown of the various calls:

Marcato Capital Management Founder Mick McGuire (CorePoint Lodging Inc. and Extended Stay America Inc.): McGuire expects to see price-to-earnings multiples expand for lodging and hospitality focused brands. They could also present attractive acquisition targets as a wave of consolidation in the hotel industry continues. 

Praesidium Investment Management Co-Founder Kevin Oram (Cornerstone OnDemand Inc.): Oram is pushing both companies to improve corporate governance and overhaul sales practices, which he believes that, if successful, would help both companies draw interest from potential acquirers. Oram named Microsoft Corp., Oracle Corp. and Salesforce.com Inc. as possible suitors.

Lucha Capital Management Portfolio Manager Marcelo Desio (Talend SA): Continuing with the merger-arbitrage theme, Desio pitched the big data-focused software company as an attractive acquisition target that should benefit from increasing demand for data integration. He believes the stock could climb 80% by 2020.

Light Street Capital Management President Glen Kacher (Farfetch Ltd): Kacher believes the company is poised to benefit as luxury apparel buying migrates online. The stock may double over the next several years as margins rise and the total market expands.

Highland Capital Management Portfolio Manager Michael McLochlin (Marvell Technology): McLochlin said sales will likely expand faster than Wall Street expects, as will gross margins. Marvell’s return to strong secular growth could lead the stock to double in the next 12 months.

Think Investments Founder Shashin Shah (Radico Khaitan Ltd.): Shah believes Radico is well-positioned to benefit from rising alcoholic-beverage consumption in India as the country’s culture changes and the market for branded alcoholic beverages expands. Radico could even be an attractive acquisition target for a larger company that wants to enter the Indian market.

TPG Public Equity Partners Founder Alex Gleser (Royal Philips NV): Gleser believes Royal Philips is undervalued compared with peers and projections for margin expansion. He sees the stock rising 85% in the next two years.

Plaisance Capital Founder Daniel Kozlowski (Pure Cycle Corp.): The Denver-based utility could rise more than 10-fold in the next 10 to 15 years, Kozlowski believes.

SoMa Equity Partners’ Gil Simon (the New York Times): Simon touted the company’s evolution into a subscription Internet platform from an advertising dependent broadsheet newspaper. He projected the stock could double in the next two years as total subscribers rise and recurring revenue accounts for a larger share of total sales.

No Street Capital Portfolio Manager Jeff Osher (Trupanion Inc.): Osher recommended shorting the pet insurance company, which he said is in the first inning of a “rate spiral.” Osher criticized the company’s distribution model and said the stock could fall as much as 77%.

Longtail Alpha Founder Vineer Bhansali (short FAANG): Bhansali recommended avoiding technology stocks as market volatility could rise further, he said. Financial and small cap stocks with low leverage ratios would make good long plays as they’re poised to benefit as the yield curve steepens.

* * *

After Simon’s presentation, he sat for an interview with CNBC’s Leslie Picker (herself a former Times employee), where he explained how the rising interest in political news and the NYT’s shift toward more stable subscription revenue would ultimately benefit its business model.

“Newspapers are mostly dead, but the news isn’t dead,” Gil Simon, SoMa’s founder and chief investment officer, said during an interview with CNBC’s Leslie Picker at the Sohn conference in San Francisco.

“What you’ve actually seen is a pretty significant evolution in the business model of news, and really, The New York Times is at the forefront of that.”

Watch that interview below:

Praesidium founder Kevin Oram explains his bet in the cloud software industry from CNBC.

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