Avoid losers and the winners will take care of themselves.

The point of the Triple Crown of Crap Index was pick the 3 worst public companies I could think of and make them into an index. The defining trait of a game of skill is whether or not it can be lost on purpose. Twitter, GoPro and FitBit were specifically chosen for to lose.

They didn’t disappoint. TWTR, GPRO and FIT have lost an average of 40% since the start of the year. All three stocks have been mercilessly beaten almost without interruption, and for very good reasons.

Some companies just shouldn’t be public and these are three of them. GoPro has dropped $6.6b in market cap over the last 52-weeks. That’s enough to buy 150 of at the party yachts CEO Nick Woodman bought for himself last Christmas.

FitBit is staggering to the wire and looks set to “win” Q1 with a 55% decline. Twitter and GoPro are both down about 30% with only one full day of trading left in the quarter. Whichever stock finishes closest to flat will be replaced in the Index starting April 1st.

You may make your case for the new entrant in Q2’s Triple Crown of Crap Index in the comment section below.

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Over the last 12 hours Donald Trump has used his fingers-of-unusual-size to escalate his war on SuperPacs and Big Media.

 

See also: The President America Deserves

I love Trump openly doing a professional level heel gimmick. Politics has been compared to wrestling for years. Until now that’s been an insult to wrestling and hack writing.

Now it’s finally true. Here’s a compilation of former MN Governor Jesse Ventura cutting promos. Note well the implausible boasts, endless name-dropping and totally unsubstantiated claims:

How is this different than Trump claiming to be self-made gazillionaire with enormous, graceful fingers? Trump isn’t just a Heel. He is a *great* Heel. That makes a decent percentage of the media public Marks. It’s not a compliment.

In wrestling parlance, Marks are the ones not in on the bit. They don’t get that they’re supposed to be calling the Heel a liar. They’re  supposed to be outraged, maybe even a little afraid. That’s how the show works. The Heel barks, the Marks get enraged and there’s fight in the parking lot.

Without a reaction the Heel can’t exist. There is no show if no one cares. Take one fake controversy: How much is Trump worth?

The correct answer is: He’s rich.*Shrug.

Wealth isn’t really a number. It’s how you shop. The richer you are the less often you have to look at price-tags. Trump has enough money to live like an Emir with bad taste. That makes him rich.

There is no practical distinction between having $3billion or $10billion. What matters to Trump is getting people to argue about the number.

If the media is fighting over Trump’s net worth they aren’t doing things like pointing out the Great Wall of China was built using the bones of slave labor and didn’t work as a defense.

Mission Accomplished:

There have always been Heels. Before he became a universally beloved hero Muhammad Ali was  monster Heel. He claimed to be inspired by Gorgeous George, a flamboyant, despised wrestler in the 1950s. “It doesn’t matter if they pay to see me get whupped” Ali shouted, “as long as they come to the arena”.

Ali was also a member of the Nation of Islam, a group that claimed white people were Devils and killed Malcom X for not being militant enough. That was scary. Trump’s plan to build a 2,000 mile wall and bill Mexico for it is just dumb.

When I was 10 Jesse Ventura created a local stir by claiming Carly Simon wrote “You’re So Vain” about him. The children of Ventura Truthers are currently writing 5,000 word blogs about Trump only being worth $2b.

Heels feed on hatred. They need it. If all these media smarts would deign to watch pro wrestling they would have realized this by now.

 

Win or Lose, Trump Has Changed the Game

According to NPR there will be $4.4b spent on campaign ads this year, up more than 15% from 2012. Bet on the under. Thanks in no small part to his phenomenal Twitter and television Heel skills (see also: Trolling) Trump is running his campaign for a fraction of the cost of his rivals. Trump dominates the news cycle. What’s the point of buying a 30 second TV spot when you can get a 15 minute segment for free just by infuriating people?

Here’s what Romney and Obama spent running against one another. At the rate he’s spending Trump getting the GOP nod would cost the networks millions in ad dollars.

Not only has Trump built his lead in the GOP race on the cheap but he’s spending about 1/5th what the Democrats are spending on their race. That’s remarkable considering the degree to which the Democrats are simply going the motions on the way to Clinton’s last big push.

 

Campaign ads are a relic. Trump has completely blown up the old formula of huge donors controlling the election process. That Trump has done it through blunt force only reinforces the magnitude of the shift. By the next election cycle every candidate who makes its this far will have a sophisticated social media ground game. By 2018 every candidate will understand and embrace the power of social media presence in politics. The ones who don’t won’t win. It’s that simple.

They won’t all be angry howlers like Trump. There are plenty of smart, likable people who understand social media. Unfortunately none of them happen to be running for President this year.

In tech terms, Trump is a bit like Napster, rudely clearing the way for the more elegant (and profitable) iTunes quasi-monopoly.

If the prospect of grass-roots candidates Tweeting their way to election wins doesn’t scare the hell out of the networks it should. In a cord-cutting world Big Media can’t afford to lose its quadrennial Golden Goose.

 

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Twitter shares should be much higher. They aren’t and we need to figure out why.

To get up to speed, last night CEO Jack Dorsey confirmed the departure of 4 executives via midnight emo-Tweet. Dorsey’s note came hours after re/Code first reported the seed of the story, launching rampant speculation in the Twitter-spere itself.

The lag is important. There’s skepticism in some circles regarding Dorsey’s sense of urgency and focus when it comes to Twitter. 4-days ago Jack was Tweeting about an “unconscious bias training” session he’d just completed at Square. “Twitter’s next Thursday!” he added.

To be gentle, it’s awkward to follow that with this news.

Maybe the prospect of taking unconscious bias training with Jack was just too much for the 4 execs (two senior VPs and two VPs). It’s still not clear if they quit or were forced out of Twitter for any number of obvious performance-based reasons (disastrous communications, the perplexing failure of Moments, the disappearance of Vine while SnapChat takes over the world etc ad nausea). At least one of the Departing had been “trying to quit” for while, per a Twitter exchange I had with Kara Swisher (@KaraSwisher) and @CraigScott31:

 

The exchange is everything great and maddening about Twitter. Kara Swisher has 1 million followers. Her company broke the story and she followed-up on it in real time, chatting with her massive audience about what may or may not be happening at Twitter.

Twitter gives anyone who wants one the ability to talk to the world. If you Tweet me (@JeffMacke), I’ll see it. I have 27,000 unread emails. I rarely answer my phone. I roam the earth like Caine by choice but I’ll see your Tweet. That’s kind of messed up. Twitter is insanely useful for investors. Kara Swisher is tied in to the Valley at the highest levels. She’s smart and she knows where all the bodies are buried. 5 years ago there’s almost no way I could have chatted with Kara Swisher about breaking Twitter rumors on a Sunday afternoon. Certainly not in pubic.

Kara is a smart source. She also generally defends Jack Dorsey against critics. That second part matters to me because, if we’re going totally honest here, I’m not sure Jack is up to the task of running two public companies.

.

 

Why Can’t Jack Tweet Good?

Executive turnover should be insanely positive for Twitter.

The company is bleeding share all over the place. It’s past time to get some fresh ideas at Twitter.

I’m willing to bet that had Jack Tweeted out a message remotely resembling the below shares would be pushing $20:

“I have a very specific vision of what [pick a failing product] needs to look like. Others have different views. A company can’t go in multiple directions at once. As CEO I have made the decision getting Twitter to the next level will require a more united view of our strategy. I thank these wonderful people for their contributions. My only regret is they didn’t have time to participate in our Unconscious Bias training. Using terms like ‘you guys’ can make others feel excluded.”

That last part was optional.

What mattered were speed and clarity. Twitter’s mass Exodus was either part of Jack consolidating the company behind his vision or rats leaving a sinking ship. The perception matters. It’s very hard to convince good executives to work for failing operations. Twitter is at a very fragile juncture. It doesn’t want to be seen as Yahoo.

As the hours passed before Twitter released any official response, Finance Twitter chattered away while watching football.

 

Finally @Jack released a sort of screenshot of an email linked to a Tweet:

 

 

Jack starts by blaming media inaccuracy for his having to address the flight of four top executives from his company. It’s a topic he was hoping to save for Twitter employees “later this week”. That’s a bad start. When you point fingers three point back at you, buddy. The media ran with what they had because Twitter didn’t give them anything else.

Jack never says if the execs quit, got fired or are leaving to spend more time with their collective families. “They have chosen to leave the company” implies they quit. But in the second paragraph Jack is gently stuffing all 4 in a pillowcase and throwing them under an oncoming bus. “All four will be taking some well-deserved time off” clearly implies they couldn’t keep up and were fired.

Per Swisher, Stanton has been trying to quit for months. Why couldn’t she just leave? Was Twitter thinking including the respected Stanton in a group Exodus would be more efficient?

Also, Jack didn’t mention the head of Vine who was reportedly overseeing 40 people. The exec, @JasonTorff announced via Twitter that he’s leaving to work for Google’s VR team. That’s a guy finding a better job. Seems worth mention.

Jack needs to hit the right notes. He needs to make it clear Twitter isn’t losing people it wants to keep. There is an underlying message sent when well-paid people leave low-stress jobs in favor of nothing. While execs move on for all sorts of different reasons be very sure of one thing: No one walks away from a huge pay-off. Twitter shares are down 75%. Employees wouldn’t leave unless they think on some level that drop makes sense.

Which brings us to the awkward larger point raised by Jack’s indifferent Twitter feed. Mostly he re-Tweets banal basketball pictures. Occasionally he interacts with Twitter celebs like VC Capo Marc Andreessen. The nature of the conversations don’t inspire confidence. The last Tweet from @Jack prior to the executive emo missive was this exchange:

 

 

Twitter shares are down 50% in the last 6 months. It’s down more than 20% just in 2016. Jack’s tenure his given us the hype release of Moments, some lay-offs and now this debacle. These are all problems that speak to the core user experience. Shouldn’t the CEO of such a company be, if not expert, at least able to exhibit basic understanding of the appeal of his product?

Without the weird emotional disconnect from the top Twitter getting rid of this team would be good news. The stock would be higher. No offense but none of these products has been killing it. Clearing the deck makes some amount of sense.  The stock should be higher. Instead Twitter is getting downgraded at Stifel and down 80-cents early.

I remain long only because flogging myself like an ancient monk draws stares. Later Twitter is going to announce a new celebrity board member and possibly a new product manager. Rumors are eveyone from Iger to Katie Couric. The world breathlessly awaits Jack’s next Tweet.

 

 

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On the opening trading day of 2016 I suggested making some charts to take the emotion out of the then-looming crash.

For those of you who’ve been understandably avoiding your portfolio, the crash is here. At least it for some stocks it is (RIP: GoPro).

As I type futures are higher but yesterday started strong and ended in tears. Bear markets, and we are in a bear market, don’t so much have “trends” as thrashing convulsions. Deal with these things as one would an enormous living fish in the bottom of a canoe. It’s caught you as much as you’ve caught it. Caution is advised.

Here are some charts from earlier this year, updated to represent the ongoing nightmare. Back later. Try not to rock the boat…

S&P500: Support at 1860 is too obvious… Headed for 1,700?

1708 is an official Bear Market. If you wait for someone on TV to tell you when a bear market has started you’re going to end up in the Bear’s stomach. I’m telling you it’s a Bear. I’m as qualified as anyone.

 

Amazon: Filling gaps, as it does…

“Peak Amazon” was pretty good, as graph titles go. Shares are off 16%. History suggests about $525 is a decent spot to start building positions.

 

 

Apple: Honk if you’ve lowered your Q4 iPhone estimates!

 

 

Rough Day for Facebook

 

Twitter is like GoPro without the cool cameras… (Yes, I’m still long)

The Red Menace at Summer Lows

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Every rally needs a “tell”. Apple and Disney are fine but if you want to check the Animal Spirits of the market look to the beaten down crap.

Here’s a chart of Twitter, FitBit, GoPro and Shake Shack over the last 5 days. Don’t enlarge it in front of the children unless you want them to have night terrors for 60 years.

 

 

4 stocks that lived and are now dying by hope. In a screaming, stupid, straight-up 10% face-ripping rally you’d want to own at least a few of these.

Here’s those same 4-stocks as of 8:14 hippie-time:

 

All way off where they opened. GoPro is a rat-infested pit of despair. You couldn’t sell enough GoPro to bid for the Silence of the Lambs house without dropping GoPro 10%. there is no demand.

That’s both rational and a warning sign for this bounce. Don’t be piggy.

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Welcome to the Month of Macke on iBankCoin!

We’ve got all kinds of exciting things planned but at the moment we have more pressing matters.

The S&P500 is down about 1.5% after everything that could go wrong did over the weekend. In the unlikely event the pace of this sell-off continues throughout the year the S&P will finish 2016 down more than 97% at around 50.  For the record, I am a buyer in size anywhere under 100.

If your 2016 investing plan hinged on Peace in the Middle East and unfettered Chinese capitalism you should probably sell. For every hour the Chinese have spent as capitalists they’ve got 100 days of experience being tyrants. Experience matters because it informs decision making under stress. When the Shanghai Comp fell 7% overnight the Chinese had a choice. They could let the free hand of capitalism find a price level for the $SSEC or go with their gut slam the market shut and execute some bears in public.

Obviously the Chinese went with the latter. It won’t work because government manipulation never works. (Longer form musings on the topic here: Brief History of Manipulation)

For now just know the Shanghai Comp is a disaster but still slightly better than where it was last summer:

 

Sell-Off 101:

 

As I said, we’ll get to more formal introductions over the next few weeks. Right now we have opportunity in front of us but only if you have a plan better than “Pretend I’m a long-term investor then puke up all my stocks at noon”.

The chances are very low you’re an expect on both China and the Middle East. Don’t trade off what you don’t know. Stick to your stocks. Go through your book. Look at levels.

Here’s a non-comprehensive list of stocks I’m watching into the new year. It’s a shopping list with the prices I’m willing to start putting money to work.

I don’t give advice. I tell you in real time what I’m doing with my real money. In 20 years I’ve never made money selling an open this ugly. I’m looking to buy where noted below. More later…

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