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The industrial real estate market in the US is experiencing a period of remarkable growth. Clarion Partners’ latest research report examines the strong performance of the sector, which is driven by e-commerce companies, strategic inventory stockpiling and the development of specialized subtypes such as industrial outdoor storage (IOS). Discover top insights on why US industrial real estate continues to outperform.

The IQ Test

I think of certain investments as an IQ test. I thought of GameStop that way in the aftermath of the 2021 rocket ride. Anyone staying long the stock or hoping for a resumption of the big squeeze obviously had no background or experience in the stock market. Lightning never strikes twice in the same spot.

Earlier this year they tried to revive the GameStop mania after Roaring Kitty posted a note that he was about to go live again. The resulting stream on YouTube had millions of people glued to their screen. For about five minutes.

He opened the stream with a skit about being in a full body cast, ha ha so hilarious, and then proceeded to meander through his litany of tired reasons why he still likes the stock. People got bored and turned it off while he carried on about what a genius Ryan Cohen is and the fabled “new business model” people have been waiting to hear about for three years that’s never coming.

As I said at the time, the sequel’s never as good as the original. The impotence of the second go-round has, I think, finally put the last nail in the meme stock mania theme. For now.

The only thing dumber than hanging around the old meme stocks hoping for a revival is investing in this piece of shit, which should have been illegal from day one:

Without going into too much detail, this chart depicts the period of time between which the original SPAC (TICKER DWA) announced its merger with the Trump Media & Technology Corp, which owned Donald Trump’s “Truth Social” Twitter clone. As you can see, it has lost about 85% of its value over the last three years. Insiders, including Donald Trump himself, have been locked up in the stock until this week. This morning brought word that the founder, Andy Litinski, has liquidated his entire stake. Because of course he did.

CNN:

As recently as this past spring, DJT had a market capitalization of over $9 billion. On approximately $4 million in revenue. You could not possibly have bought this stock after having done research on it. It’s entire market cap was composed of people for whom the ticker symbol was good enough. Or people who thought they were helping their hero (or, in some cases, their personal lord and savior) by giving as much money as they could afford to his enterprises. These are the same people who joyously donate to his campaign even after hearing that the money is actually financing the payment of his personal legal bills and lawsuit settlements. They don’t care. And if this goes to zero, they also won’t care. It was someone else’s fault. Not theirs and not Donald Trump’s, who would never do that to them.

Trump has filed for bankruptcy four times in his life - the Trump Taj Mahal in 1991, Trump Plaza Hotel in 1992, Trump Hotels and Casinos Resorts in 2004 and Trump Entertainment Resorts in 2009. The 2004 filing involved a publicly traded corporation he controlled. Do you want to know what the ticker symbol was of that stock that went to zero? It was DJT. True story. The ticker was still available for this new thing after twenty years.

Trump owns half of this company’s outstanding stock and has publicly sworn that he has no plans to sell any of it:

My best guess is that he will sell it or, at a minimum, borrow against it, at some point soon. Especially if he loses the election in November. Then all bets are off and all promises null and forfeit.

I would expect rallies here and there because the short interest is actually rising as the stock falls. As you can below, almost 12% of the float is currently sold short, which will lead to periodic shakeouts here and there. If you’re playing the long side to try to capture those squeezes, well, good luck and you probably have more free time on your hands than I do.

But for everyone else, DJT stock is an IQ test. And it’s pass / fail, no need to assign a number grade. And if you failed this IQ test but you’ve learned your lesson, don’t worry - there are plenty of new IQ tests coming down the pike. In recent months Donald Trump has been selling digital trading cards, Trump-branded bibles (can you imagine?), gold sneakers, diamond-encrusted watches and last week he unveiled his own crypto currency (One last score and I’m out). These are all investor IQ tests too.

Tom Lee Strikes Back

We had Tom Lee on The Compound and Friends today and I am so excited for you to hear the show. It’s up on all podcast platforms right now:

We asked Tom about David Tepper’s reaction to the Chinese monetary stimulus bazooka that happened on Tuesday - “Buy everything” - and that got us into a broader conversation about the big drivers of stock market performance heading into year end (declining inflation, lower rates, earnings growth, economic stimulus in China, etc). We also talked about the small cap catch-up trade, the rise of Argentina’s stock market, the opportunities in technology and away from technology and so much more.

Here’s the David Tepper clip everyone’s talking about, by the way:

I think you’ll love this conversation and if you want to wait for the YouTube version to see the charts, you can subscribe to our channel here: The Compound

The Rate Cut Playbook

I also wanted to mention that we’re giving away the Ritholtz Wealth Management interest rate playbook to anyone who signs up for our Compound Insider email blast. Our chief strategist Callie Cox (along with Sean and Chart Kid Matt) put this pack together for clients and we wanted to give you a chance to download it too. You can go to The Compound Insider and add your email address. You’ll get the drop shortly after your subscribe. And it’s free!

New Nick and Jessica!

Nick Colas and Jessica Rabe came on The Compound this week to talk about the latest market and economic insights from their research. This is rapidly becoming one of the more popular recurring features we do and I am so glad to hear the feedback for it. It’s really special to be able to get regular access to the people behind DataTrek Research on a regular basis and it makes me really happy to be able to share this with you all each month.

You can watch our conversation here:

Okay, that’s it from me this week! Have a great weekend! - JB