A Complete Washout

This Week on The Compound

May 11, 2025

This Week on The Compound

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This week on TCAF, Josh and Michael were joined by Carson Block, founder of Muddy Waters Research. They discussed how activist short-sellers expose fraud, Carson's biggest shorts, and the problem with CEO compensation. (Listen)

INSIDE THE COMPOUND

The rebound is the only thing more surprising than the stock drop post-’Liberation Day’. Josh Brown noted six reasons why the stock market bounced so quickly, almost making up the prior losses. One of the reasons was the spike in negative investor sentiment. Josh writes:

As Trump began to turn his attention toward trade, the stock market didn’t wait. Way before Liberation Day on April 2nd sentiment was already plunging, ultimately to levels not seen since the Great Financial Crisis. The Vix spike was accompanied by a complete washout in every survey, from the old people who answer landline phone calls to weigh in for AAII to the portfolio managers who answer to Merrill Lynch’s Global Asset Allocation report. It was bad, bad, bad across the board.

Josh Brown

OUTSIDE THE COMPOUND

Prior TCAF guest Kyla Scanlon has an interesting post up this week looking at the role friction plays in the economy, business, and life. Instead of thinking of friction as something bad, she posits that it could provide us with necessary information. Scanlon writes:

This is the economy now. Not a distribution of opportunity. A redistribution of friction. But friction isn’t the enemy!!!! It’s information. It tells us where things are straining and where care is needed and where attention should go.

Kyla Scanlon

MERCH

You can now pre-order the new Markets in Turmoil t-shirt (in three colors) at idontshop.com.

COMING SOON

This week on TCAF, Josh and Michael will be joined by Chris Davis, Chairman and Portfolio Manager, at Davis Funds, and John Authers of Bloomberg.

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