Axe Cap vs. Mason Cap – Fight, Fight, Fight!
by Lady Trader | Fan Fun with Damian Lewis | May 8, 2020
Welcome back, your dreams were your ticket out
Welcome back, to that same old place that you laughed about
“Welcome Back†– John Sebastian
Welcome back to “From the Trader’s Desk†for Season 5 of Billions!
Before I get into my recap/analysis, let me just say, boy, did I miss these characters from my screen! With everything that is going on in the world right now, having Axe, Wags, Taylor, Wendy, and yes, even Chuck, back and up to their usual shenanigans was like slipping into a comfortable pair of jeans!
Since there was not a lot of fin-speak this week, let’s see where the characters I call the Big Four (Axe, Chuck, Wendy and Taylor) are when we start the new season.
Before I start, I’d like to talk about the school-yard battle between the Axe Cappers and the TMCer’s. There is bad blood between these two camps. One reason is because the ACs see the TMCs as interlopers (and in the case of Taylor and Mafee, traitors). No one likes anyone coming into their “house†infringing on their territory.
I get it – I’ve been in the same situation. At one of the asset management firms I worked for, we had a group of quants from Chicago merged with our fundamental research team. We called them “The Goonsâ€. (Yes, there was no love lost.) Here came this group, with their weird accents (to New Yorkers, that mid-west accent is almost as bad as a Boston one) using our copier! We didn’t pull any practical jokes on them, but we ignored them, and were as uncooperative as possible.
However, the main reason we disliked them was because our group and their group had different philosophies on stocks, and I think that is the same issue at Axe Cap. Dollar Bill, Bonnie, Ben Kim etc. are all fundamental analysts, and believe that research is the key to investing. Taylor and their group are quantitative analysts and look at pure numbers and formulas. What happens when the fundamental analyst thinks a stock should be short, but the quant thinks it should be a long? Both sides will argue their method is best, and whichever side the Portfolio Manager takes, the other side will have bitterness.
I do get what Wendy was trying to do – showing a united front to investors and the rest of the Street is important. However, I did roll my eyes until they almost fell out of my head at Becky’s speech. Wall Street is territorial; everyone is competing for clients, bonuses, recognition. Bad blood between different groups within a firm is common: Large Cap vs Small Cap, Equities vs Fixed Income, etc. But even within groups there are sharp elbows: Tech analysts look down on Consumer Staples analysts; Financials vs Healthcare. In an environment where the pie doesn’t get bigger (and lately has been getting smaller), people are going to fight for the biggest piece. There is unity for now, but for how long?
So where are the Big Four? Let’s find out!
Axe – We find Axe in a place I’d never thought I’d ever see him – in a “spiritual†drug induced journey with Wags. In this haze, he sees himself as a “King†(I’ve been saying that for a while). A King takes – “the village, then the cityâ€. The King masses the troops to wage war (not unlike the God of War) and to “chop headsâ€. Graphic, I know, but in this state, Axe sees who he is and what he thinks he needs to be: always at battle.
After he comes down from that high, Axe realizes he did not necessarily like what he saw. It must be terrifying to realize you are a carnivorous monster. Even amassing $10B to become a decabillionaire doesn’t make Axe feel good. He is searching for something. Could it be that he needs an enemy? He believes that he has Chuck in his pocket, and he’s got Taylor under his watchful eye at Axe Cap. Those were his targets for so long. He needs a new adversary to fight in order to feel anything. The King will have a new combatant entering the ring, and it’s a Prince – Mike Prince. (Very curious to know if the writers did that on purpose!).
The thought of Prince getting a Vanity Fair cover puts Axe back to rights – clean shaven, back on a mission, and back to being Bobby Fucking Axelrod!
Read the rest of the original article at Fan Fun with Damian Lewis