The big short

Quote of the Day

I've done so well in life by using organized common sense that I never wanted to get into fields like AI."

Charlie Munger spent some time fielding questions in downtown L.A. two days ago. The 94-year-old billionaire took a pretty interesting stance on AI and Bitcoin, which he called a "noxious poison."

Market Snapshot

  • The Dow is on a five-day winning streak.
  • China boosted its holdings of U.S. Treasuries in 2017; it's the biggest increase since 2010.
  • Teva and Apple gained, thanks to investments from Buffett.
  • Bitcoin hit $10,000 for the first time in more than two weeks.



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Peter Thiel Is Leaving Silicon Valley for Hollywood

Billionaire investor Peter Thiel is loading up a U-Haul and waving goodbye to his Silicon Valley home (h/t WSJ). Destination? L.A.

Now, we wouldn't normally comment on individual residential patterns in this newsletter (subscribe to "Moving Brew" for that), but Thiel's break with the Valley is not normal.

He's one of the most prominent leaders in tech

1998-Thiel co-founded PayPal, where he worked with many business legends (Elon Musk and LinkedIn co-founder Reid Hoffman, to name a few).

2004-Thiel threw $500,000 at a puny startup called Facebook. He's since cashed out for over $1 billion. Thiel also launched software and analytics company Palantir, now worth $20 billion.

2005-He created Founders Fund, a VC firm that was the first institutional investor in SpaceX.

2016-Thiel helped finance a lawsuit brought by Hulk Hogan against the website Gawker (which Thiel is now interested in buying).

So why would a tech bigwig willingly leave the tech capital of the world?

Simple answer: as someone with more conservative political views, he feels silenced and isolated in liberal Silicon Valley.

Here's one example: Thiel sits on the board of Facebook with Reed Hastings, the CEO of Netflix. During the heat of the 2016 campaign, Hastings sent Thiel an email criticizing his (very vocal) support of now-President Trump:

"I'm so mystified by your endorsement...some diversity in views is healthy, but catastrophically bad judgement (in my view) is not what anyone wants in a fellow board member. I continue to experience you as very honest, well intentioned, and certainly very independent."

Even though Mark Zuckerberg came to his defense, Thiel is now reportedly considering resigning from his post on the board.

And whether you agree or disagree with his political views, there's no denying Thiel has become an outsider in the Bay Area tech scene. Now he's heading south, taking his two organizations-Thiel Capital and the Thiel Foundation-with him.

Tell your friends: 95% of political donations from tech employees or executives went to Hillary Clinton, according to Crowdpac. Donald Trump received 4%.

FCC Chairman Investigated for Role in Mega Merger

The FCC makes headlines almost as often as it regulates them. Chairman Ajit Pai is back in the spotlight as the FCC inspector general (a nonpartisan watchdog role) investigates how Pai's decisions may have benefited Sinclair Broadcasting.

Rewind: In April 2017, Pai led the FCC to dissolve a rule that restricted how much ownership a single company could have over local TV markets.

Fast forward: Just a few weeks later, Sinclair announced a $3.9 billion deal to buy Tribune Media. The merger-only made possible by the rule change-raised concerns of a media giant gutting local TV news coverage in favor of pre-packaged spots. Sinclair-Tribune would become the nation's biggest TV broadcaster, reaching 72% of American homes.

Faster forward: The full scope and timeline of the investigation is undisclosed, but possible points of interest include:

Pai's relationship with Sinclair. The NYT had already discovered multiple meetings between the two-one occurring days before the Trump-appointee took office.
A media report alleging then-candidate Trump's campaign made a deal with Sinclair for favorable coverage.

Ray Dalio and Bridgewater Take Big Position Against European Markets

Radical transparency. Hedge fund manager Ray Dalio believes in it and so does the Eurozone, which made Bridgewater Associates-the largest fund manager in the world-disclose its recent $22 billion bet against European equities.

Ray Dalio? The same guy at the WEF who said, "If you're holding cash, you're going to feel like an idiot"?

Yes, the very same. And apparently, he's not so bullish on every market, shorting some of the largest companies in the Eurozone, as well as a handful of Japanese equities.

But don't call him a bear quite yet-the Street's favorite savant outlined his thoughts (the good and the bad) on the overall economy this week.

Dalio's outlook: It's time to sell-or short-when (1) the economy is strong, (2) it's close to full employment, (3) production capacity to meet demand is constrained, and (4) interest rates start rising.

According to Dalio, the Eurozone currently meets that criteria. Although he doesn't feel the same way about the U.S. market just yet. The iconic investor has a strong year penciled in for 2018 and a major setback scheduled for 2019-2020.

After Shifting Strategy, Nestle Still Can't Figure It Out

Sales are melting away at Nestle, which just posted its worst organic growth in more than 20 years. And to top things off, the company has got the world's biggest Gerber baby-hedge fund manager and stakeholder Daniel Loeb-breathing down its neck.

Zoom out: The parent of KitKat, Nesquik, and Poland Spring has been desperately pivoting from its consumer goods catalog to slim down and meet modern-day demands, i.e. offering healthier options.

To do so, new(ish) CEO Mark Schneider sold off its U.S. chocolate business and acquired smaller companies like Blue Bottle Coffee and meal delivery service Freshly. Which is why this latest blow isn't exactly a ringing endorsement for a job well done.

Zoom back in: Now, Loeb and his fat $3.5 billion stake will likely leverage this setback to ramp up company demands, including selling off Nestle's 23% stake in L'Oreal and scaling its massive share buyback program.

What Else Is Happening…

  • Shake Shack (-6.33% after hours) plans to open 32-35 new locations in 2018, its largest yearly expansion as a company.
  • Airbus promised a strong 2018, but it needs to fix manufacturing backlogs.
  • The U.K. blamed Russia for perpetrating a cyber-attack on Ukraine last summer.
  • President Trump seemed to endorse the idea of a gas tax to help fund infrastructure projects, but it's probably DOA in Congress.

Economic Calendar

  • Monday     Earnings: Heineken (+/-), Restaurant Brands International (-)
  •                     Economic Events: Treasury Budget (+/-)

  • Tuesday    Earnings: PepsiCo (+)
  •                   Economic Events: Small Business Optimism Index (+)

  • Wednesday    Earnings: Cisco (+), Marriott (+)
  •                         Economic Events: CPI (+), Retail Sales (-), Business Inventories (+)

  • Thursday   Earnings: No Events
  •                    Economic Events: PPI (+), Industrial Production (-)

  • Friday       Earnings: Allianz, Kraft Heinz
  •                  Economic Events: Consumer Sentiment

Taking Inventory: Top 10 Employers

Fortune released its 21st annual list of the 100 best U.S. companies to work for. We landed at No. 101, in case you were wondering. Here are the top ten that rose to the top in terms of compensation, diversity, PTO, and perks…that we made up.

1. Salesforce-The IT company finds itself at the top of the list for the first time because it's also the first workplace to offer teleporting.
2. Wegmans Food Markets-Catered all-you-can-grab buffet lunches in its stores.
3. Ultimate Software-At this HR software company, employees are entitled to unlimited meetings with HR.
4. The Boston Consulting Group-A Dunkin' Donuts coffee fountain in the breakroom.
5. Edward Jones-The financial advisory firm gives weekly bonuses in the form of buckets of money.
6. Kimpton Hotels & Restaurants-This boutique hotel and restaurant chain offers a complimentary continental breakfast from 4-6 am every morning-to employees, not guests.
7. Workday-A robust calendar of social events called Playnight.
8. Genentech-The subsidiary of Swiss pharma giant Roche distributes free drugs.
9. Hyatt-A free mint on your desk every night before you leave.
10. Kimley-Horn-This design consultancy double-matches all contributions to its employees 401(k) and creative portfolios.

Is your employer on the full list? Tell us what makes them so great.

The Breakroom

Question of the Day

Three children, Peter, Jane and Eric, shared a bag of peanuts. There were 770 peanuts in the bag. For every 4 peanuts Peter took, Jane took 3, and for every 6 peanuts Peter took, Eric took 7. How many peanuts did Peter get?

(Answer located at the bottom of newsletter)

Business Trivia

Red Bull gives you wings...and plenty of sponsorship money for daredevils to attempt some crazy stunts.

Which of these extreme "sports" has the energy drink NOT sponsored?

BASE jumping into a flying airplane, surfing down a volcano, skydiving from space, motorcycling on a roller coaster

(Answer located at the bottom of newsletter)

Stat of the Day

0-The number of female general partners at Andreessen Horowitz, a prominent Silicon Valley VC firm. As its tenth partner, it chose Andrew Chen, head of growth at Uber.

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Breakroom Answers

Question of the Day: 264 (Explannation)

Business Trivia: Surfing down a volcano

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