Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

When a 4,000% Return is a Mirage

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Editor’s note: This article is part of a series ValueWalk is doing on tail risk hedge funds. The series is based on several weeks of research and discussions with over a dozen experts in the field. All the content will be first available to our premium subscribers and some will be released at a later date for all readers. If you want to  see the full series and support us please click here.

Many tail-risk hedge funds posted astonishing gains during the March selloff, with at least one fund reporting a gain of over 3,000%. However, it’s important for investors to read between the lines when it comes to choosing which hedge funds to invest in.

Whenever looking at the returns of any fund, especially tail-risk funds, it’s important to make sure you’re doing an apples-to-apples comparison by using the same measurement of returns across all the funds you’re comparing.

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Hebron and Grizzly Research

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ValueWalk held its second Contrarian Investors Virtual Conference, and Grizzly Research Founder Siegfried Eggert is pitching Hebron Technology Co Ltd (NASDAQ:HEBT) as a short. He believes Hebron is an “insider enrichment scheme without economic basis.”

In his presentation, Eggert noted that Hebron Technology’s stock has skyrocketed following recent private placements and acquisitions. He believes the company is running an insider enrichment scheme. He also said all of last year’s major transactions were “announced and portrayed as arms-length,” but the Grizzly Research team was able to link all of them back to company insiders.

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Contradiction in BlackRock’s Focuses

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BlackRock’s coziness with China isn’t going unnoticed amid its increased push in favor of (environmental, social, and corporate governance (ESG) issues. China isn’t exactly known for supporting ESG issues, and BlackRock is being criticized as favoring Chinese companies that lack regulatory oversight over their better regulated U.S. peers. Meanwhile, U.S. lawmakers are criticizing the firm’s involvement in coronavirus-relief measures for its focus on China.

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CBDCs May Undermine USD Hegemony

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The past week saw Goldman Sachs and JPMorgan, two traditional finance investment banks, discuss cryptos, their identities as an asset class, and CBDC’s potential threat to the U.S. dollar. Dr. Marc J.J. Fleury, CEO of fintech firm Two Prime, discusses the following topics this week, with full commentary below.

  • GS: Crypto is not a real asset —In a recent investor call, Goldman Sachs spoke about how bitcoin and other coins were unsuitable for investment, with BTC’s run likened to that of the Tulip mania back in the 1600s. When it seems so obvious that crypto is here to stay, what do they still not understand?
  • JPM: CBDCs may undermine the hegemony of the USD — In a report last week, JPMorgan asserted that “there is no country with more to lose from the disruptive potential of digital currency than the United States.” How realistic is it for a digital currency like bitcoin to become the world’s new reserve currency? What conditions should be met for this to occur? How will the global monetary system look if the scenario is impossible?
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Tesla Inc (TSLA) Is A Busted Growth Story

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Tesla Is A Busted Growth Story

We remain short Tesla Inc. (TSLA), which I still consider to be the biggest single stock bubble in this whole bubble market. The core points of our Tesla short thesis are:

  • Tesla has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla­—have a decades-long “experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars.
  • In 2020 Tesla will again lose money, as it has every year in its 17-year existence.
  • Tesla is now a “busted growth story”; revenue growth is flatlining while unit demand for its cars is only being maintained via price cutting.
  • Elon Musk is a securities fraud-committing pathological liar.
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