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🍋 Where There's Smoke, There's Vapor

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Short Squeez
September 07, 2022

Together With

"We complain about 5-6% mortgage rates today. I cannot imagine borrowing at 18% for the biggest purchase of your life." — Ben Carlson

Good Morning! Bed Bath & Beyond has named an interim CFO, Laura Crossen, after Gustavo Arnal died on Friday. Crossen will also continue to be the company's chief accounting officer for the time being. Another exec, Gautam Adani, who has an empire in India, is closing in on Jeff Bezos' rank in the "World's Richest Person" contest.

For us regular folks, Labor Day weekend travel exceeded pre-pandemic levels this past weekend. I hope you got your trip in, as Wall Street banks are leading the return to office charge, with post Labor Day being a big return to office milestone.

Sweater gives regular investors access to some of the world’s most exciting startups, letting you diversify your portfolio and long-term strategy with venture capital. Download the Sweater app to add venture capital to your portfolio.

1. Story of the Day: Where There's Smoke, There's Vapor

Juul has been caught red handed, and not because their vape ran out of battery. After a two year investigation by 33 states and Puerto Rico, it has been determined that Juul Labs will pay nearly $440 million in a settlement for the marketing of its high nicotine content vapes. The infamous Juuls were said to be the cause of the spark, or lack thereof, in teen vaping.

Connecticut Attorney General William Tong announced the deal yesterday, as the culmination of an investigation into Juuls claims about the products' safety and benefits as a smoking alternative.

While this is one issue resolved, the company still faces nine other lawsuits from other states, plus hundreds of personal lawsuits that were brought on behalf of teenagers who blame Juul for getting them addicted to vaping products and nicotine.

Tong said, "Through this settlement, we have secured hundreds of millions of dollars to help reduce nicotine use and force Juul to accept a series of strict injunctive terms to end youth marketing and crack down on underage sales."

The settlement will be paid out over 6-10 years and puts limits into place on Juul's practices. Juul can not use cartoons, pay social media influencers, depict people under 35, or place ads in places where the audience isn't at least 85% adults, among other limitations. So basically, the only people who will ever see Juul advertising, are old, and probably smoke cigs... I guess that kind of works out!

Short Squeez Takeaway: I can totally see how Juul is at fault here. There's a reason the Marlboro Man was a grizzled old rancher. He wasn't puffing on mango-flavored cowboy killers... He was ripping the rough stuff because cigarettes/nicotine are addicting, bad for you, and for old curmudgeons.

2. Markets Rundown

Stocks were up in the morning after jobs data showed signs that the tight labor market might be seeing some relief. They quickly reversed course thanks to new concerns about European gas supply. Ethereum finished the time frame up, as "The Merge" has begun.

Movers & Shakers

  • (+) Rollins ($ROL) +6% because RBC Capital Markets upgraded the pest control company to outperform for having a "recession resilient" business model.

  • (+) Nextera Energy ($NEE) +3% after Morgan Stanly upgraded the utility company to overweight from equal weight.

  • (–) Digital World Acquisition Corp ($DWAC) -11% after the SPAC that agreed to merge with Trump Media & Technology Group failed to secure enough votes for a one-year extension to close the deal.

Private Dealmaking

3. Top Reads

  • Sorry bankers, you'll never have an easy life (BB)

  • How Bed Bath & Beyond got itself in such a deep financial hole (Yahoo)

  • The 60/40 strategy is on pace for its worst year since 1936 (YF)

  • 67% of pandemic 'boomerang kids' still live with parents (CNBC)

  • No longer a 1970s relic, price controls are back (Axios)

  • Apple event kicks off today - what to expect (CNBC)

  • Bank of America warns of recession shock as Fed doubles down on inflation fight (Fox)

  • Inside the shady economics of buying a car (NPR)

  • MATANA is the new FAANG? (YF)

  • U.S. Treasury yields rise as investors await economic data (CNBC)

A Message from Sweater

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Oh, and one more thing: You can do it all from your smartphone. Genius, right?

Sweater gives regular investors access to some of the world’s most exciting startups, letting you diversify your portfolio and long-term strategy with venture capital. Plus, it’s all managed by their professional VC investment team, so you know your investment is in good, steady, experienced hands.

Bottom line: If you’re looking to get your money involved in companies and opportunities usually reserved for people yachting around the Mediterranean, try Sweater on for size.

4. Book of the Day: Grit: The Power of Passion and Perseverance

“Drawing on her own powerful story as the daughter of a scientist who frequently noted her lack of “genius,” Duckworth, now a celebrated researcher and professor, describes her early eye-opening stints in teaching, business consulting, and neuroscience, which led to the hypothesis that what really drives success is not “genius” but a unique combination of passion and long-term perseverance.

In Grit, she takes readers into the field to visit cadets struggling through their first days at West Point, teachers working in some of the toughest schools, and young finalists in the National Spelling Bee.

She also mines fascinating insights from history and shows what can be gleaned from modern experiments in peak performance.

Finally, she shares what she’s learned from interviewing dozens of high achievers—from JP Morgan CEO Jamie Dimon to New Yorker cartoon editor Bob Mankoff to Seattle Seahawks Coach Pete Carroll.

Among Grit’s most valuable insights:

*Why any effort you make ultimately counts twice toward your goal

*How grit can be learned, regardless of I.Q. or circumstances

*How lifelong interest is triggered

*How much of optimal practice is suffering and how much ecstasy

*Which is better for your child—a warm embrace or high standards

*The magic of the Hard Thing Rule

Winningly personal, insightful, and even life-changing, Grit is a book about what goes through your head when you fall down, and how that—not talent or luck—makes all the difference.”

“As much as talent counts, effort counts twice.”

5. Short Squeez Picks

6. Daily Visual: Influencer Marketing Dollars Flow to TikTok

% of total influencer marketing spending (US)

Source: Insider Intelligence

7. Daily Acumen: How to Get Up Early

“Set two alarms in the morning, three minutes apart.

The second alarm should be set for whatever time you actually need to get up. No more setting a handful of alarms over the course of an hour.

Every time you hear an alarm and know you don't really have to get up, you won't. Instead, just set two alarms, and then get up.

Also, stop hitting snooze. It just doesn't work. Whoever thought that a nine-minute snooze--that you can just keep hitting forever--would help you get out of bed was wrong.

You just end up laying there getting annoyed by the sound of your alarm, but you don't actually get up.

Finally, if you're using your smartphone (which most people are), set the two alarms with different sounds.

Over time, our brains become accustomed to the sound of our alarm, and we end up getting to a point where we can just reach over and turn it off more as a reflex.”

Source: Inc

8. Crypto Corner

9. Memes of the Day

 

 

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