11/5 Tuesday
1. Markets are living their best lives at ALL TIME HIGHS. The Dow hit all-time highs moving nearly half a percent (0.42%). The S&P is still in all-time high territory and moved 0.37%. The Nasdaq is also in all-time high territory and moved half a percent (0.56%). Everyone is drunk off of optimism right now. Relations with China have seemed to chill a little, banks like Morgan Stanley and Bank of America did well yesterday, even Energy companies took off yesterday. Spooky SZN is over and everyone is loving it.
2. The McDonalds CEO Steve Easterbook got fired yesterday because he had a sexual relationship with another co-worker. Boy was WILDIN. Rule number 1, don’t sh*t where you eat my guy. The stripped him of both his CEO position and his board position in the company. His replacement shares the same vision he has (in growing the company) so it’s expected that McDonalds will continue the same course. McDonalds has been UP OD the last few years even though restaurant sales have practically been the same. The company is getting leaner and it’s showing.
Cash is clearly King right now
3. Berkshire Hathaway (Warren Buffett’s company) hit a record in the amount of cash it holds yesterday. They currently have $128 Billion in cash right now. That’s crazy because Apple currently has a little over $200 Billion in cash which leads me to ask…. What are companies about to do with all this extra cash? What are they preparing for? Usually when companies have all this cash they focus on acquisitions (buying other companies) so if this is the trend moving forward i’m hella excited because there’s a ton of opportunities to make some $$$ if you find em.
Biotech LIT
4. Biotech stocks have been doing very well on the low for the last month. Abbvie, Bristol-Myers Squibb, and Biogen have all climbed up at least 20% in the last month. This is after having a year thats not been so hot. They’ve all been releasing new drugs and new regulatory filings. Abbvie specifically has had an incredible 3rd quarter even after announcing their buyout of another biotech company Allegran. I guess you can say that Biotech is boomin.
5. Over the past year the most popular funds have been “low volatility” Exchange Traded Funds (ETF). This is mostly due to the fact that the stock market in general has been so volatile and investors have been looking for something that doesn’t move as crazy but still rises on a steady basis. This year these funds total assets under management reached over $100 Billion. Some downsides though… These funds have never been through a recession, so investors still don’t know how these funds will perform under these environments.
6. Although there has been alot of backlash, some funds have decided to keep their shares in gun companies. Blackrock’s ETF (iShares Core S&P small-cap (ticker symbol IJR)) has held on to their gun stocks in Sturm Ruger and American Outdoor brands Company (owner of Smith & Wesson). Blackrock currently owns about 6% of Sturm Ruger and another fund Dimensional Fund Advisors US Small Cap Value Portfolio (ticker symbol DFSVX) owns about 3.3% of American Outdoor Brands. If you own these ETF’s you own guns. The lesson here? Know what your ETF’s are holding.
7. Under Armour is getting pressed by the government over its accounting practices. The claim is that they may have been shifting sales from quarter to quarter essentially making their company look healthier than it actually was. If you didn’t know, their CEO Kevin Plank resigned recently and now this is happening. it’s all crazy other there right now.
Me giving away mad gems on this podcast
8. Driven Society dropped a new podcast episode yesterday. I’m in it. I’m in there spilling the beans. I talk about my parents, college, my first few years on Wall Street, my small stint in advertising, best real estate moves, I even give up my favorite dividend plays. I was wildin on there. I can’t believe I gave up all that info for free lol.
9. New data suggests that a part of the reason home sales haven’t been as lit is because homeowners are actually staying in their homes longer. Homeowners used to stay in their homes an average of 8 years, now they’re staying much longer (13 years). This lack of movement has contributed to a fall in home sales. currently (when you adjust it for population) we are at the lowest level of homes put up for sale in history. No one wants to go and I don’t blame em. You spend all that time saving for that house… Enjoy that… Make memories in that.
10. Jersey City is about to vote on new regulations that my slowdown residents abilities to do AirBnB’s. This is after many residents have complained AirBnB’s have helped contribute to higher rental prices in the city itself. Part of the rule states that if an owner does not live in the property, they cannot rent the property for more than 60 days a year. You’d have to acquire a city permit to have that ability and caps will be set on the number of units that can perform short term rentals.
11/6 Wednesday
1. Markets continue to rally. The Dow Jones is currently killing it and closed slightly higher today at 0.1%. The S&P closed slightly lower but is still in all time high territory finishing the day down 0.1%. The Nasdaq basically even today but is still doing it’s thing at all time high territory. The whole market is trading at these levels because trade deal optimism is high. Investors are looking at the possibility of a good trade deal happening between the US and China possibly leading to an end to this trade war. If it ends…. I see no end to this rally. But don’t get it twisted… There’s still some flaws lurking in these markets so don’t swim naked out here y’all.
2. Xerox is considering buying HP in a deal that will cost $27 Billion. That’s a wholeeeee lotttaa printer money lmfao. They plan on doing a cash and stock deal which should help out the company but some people on the street think its likely that HP is going to reject the initial offer. This whole process is like asking your crush to go on a date (who likes you too) but she says nah because she’s playing hard to get. You love and hate to see it at the same time. Xerox plans on raising some of the cash through its cash out play on fujifilm which its selling for $2.3 Billion. Xerox’s stock is up 84% this year (mostly by cutting its costs) and it plans on implementing the same strategy to HP if the acquisition goes through. I’ll update y’all as more news comes in because this is a legacy, spicy deal.
3. We thought WeWork was Softbank’s only problem, but it’s not. Apparently, there are more companies in Softbank’s portfolio that are underperforming. Shit is looking spooky, there are chinks in the armor and things might not be looking good for the homie Masayoshi Son (CEO of Softbank). A number of ride hailing firms along with dozens of firms are burning through cash in their portfolio and aren’t even close to profitability. It’s looking like off of WeWork and these other firms alone Softbank’s Vision fund will have to take billions of dollars in losses due to mark downs in valuations due to these firms underperforming. The whole Venture capital industry is watching this closely.
4. Apple is making its move and investing in affordable housing. It plans to spend $2.5 billion toward the purpose and decided that it will focus its work on California (where a majority of its employees are located). Apple is the fourth big tech company to make this move following Facebook, Microsoft, and Google. I love how these tech companies are trying to address these social problems. This is not getting enough news y’all. For real. Apple also plans on using another $1 Billion on helping first time home buyers make down payments. $300 Million (of the $2.3 Billion) will go to develop affordable housing in San Jose California, and another $200 Million (of the $2.3 Billion) will go create affordable housing in the Bay area. The tide is turning y’all. Tech is apparently here to save the day (of course after being one of the big catalysts of the problem in the first place).
Uber be like….
5. Uber is getting flamed. BIG TIME. Their 3rd quarter losses added up to over $1 Billion. Their stock is down almost 30% since IPO. It’s all a mess. Through this though they promise a full year of profit for the year 2021. At this point I don’t know if investors can wait that long. Especially when blue chip stocks are out here killing the game. I was waiting for the stock to dip under $30 a share to buy it and its been trading at under $30 for a while but I still haven’t pulled the trigger yet because I’m still seeing a bunch of problems in the company. 1. They’re in too many markets. 2. Uber eats still has to prove itself to me. 3. What the hell happened to the driverless car project? 4. Why y’all doing so much y’all doing driverless trucks too right? I dunno man. It’s much easier to find new/old companies with less problems than me trying to justify buying a “big brand”. I’ve said this on the timeline before that it was overvalued, but tbh I didn’t think the problems were THIS bad.
6. According to a recent poll American workers under 35 are more likely to be victims of discrimination at the office. The poll shows that 3 out of 5 young workers have either witnessed or have been victims of discrimination. This is either based on age, sex, race, sexual orientation, or gender identity. This is a small poll (only 1100 people) but its still alarming to me. WTF. I’m not sure if there are more instances or were just becoming more aware of these instances. Either way were more likely to talk about it, which is good. What’s more interesting is that the survey across the board that young workers see more instances of discrimination than older workers. 50% of young workers saw or were victim to racism compared to 33% of older workers (over the age of 55). 52% of young workers say they have been victim or saw gender discrimination compared to 30% of workers over the age of 55. It’s almost as if we see the world differently than previous generations. This data is a precursor to an entirely new type of work environment. I’m interested to see how companies use this data to improve working conditions for our generation of workers.
7. It’s expected to be a very very cold winter and because of that Natural Gas is boomin. Natural Gas futures (basically fixed contracts for later deliveries) jumped almost 4% Monday due to the cold weather forecast. I still wouldn’t run and invest in natural gas companies yet. Supplies of natural gas are still high and it is still a fiercely competitive industry in which companies can pull out that resource at a much easier rate.
FREE HOMES FOR THE HOMELESS
8. UnitedHealthCare is giving apartments away to homeless people. What’s the logic? Better, cheaper, and more efficient healthcare. According to their stats due to emergency visits it costs insurers 10 to 20 times more money to care for the homeless due to the illnesses (or lack of care of illnesses) developed through that lifestyle. Being homeless can cause a person to develop many illnesses from heart failure, to drug addiction and many others. So the CEO of UnitedHealthcare is testing a way to prevent (or be more effective in taking care of) all of that by giving away apartments to those who need it most. Sidebar though: why does it feel like were going back to company towns? (google that if you’ve never heard of it).
9. A recent study by the Federal Reserve found that Economic inequality is much bigger in certain parts of the country than others. It’s found that economic inequality is much larger in New York City, Washington DC, Chicago, Houston, Los Angeles, and San Francisco than in many other parts of the country. Economic inequality is also high in the metro areas of Texas, Louisiana and Alabama. The lowest areas of inequality are in the Midwest and the Great Lakes region of the country. The study also found that wage inequality is driven primarily by globalization and technological change. There’s also a bunch of other very specific data in this study that I found very insightful. I can’t wait to share this link with y’all next Sunday.
10. Facebook is rebranding. For the first time in the history of the company we have a logo color changes and a new presentation. Much of the rebranding is focused on all of the other companies facebook owns and will not change the way the current social network looks. The new facebook logo, literally in all caps “FACEBOOK”, is essentially a way for people to know that the products they’re using are part of the facebook ecosystem, which tells me that they plan on expanding even more. The logo itself is basically a gif that changes to the colors of instagram, WhatsApp, and Oculus.
11/7 Thursday
1. Markets remained relatively unchanged today. The Dow inched barely lower. Moved down 0.07 points which essentially meant nothing in real percentages. The Nasdaq inched down 24 points which translated to almost 0.3%. The S&P inched up 2 points which translates into 0.07% which is essentially unchanged. Everyone is waiting on the trade deal. It’s the end all be all of this game right now. If Trump hammers it out we’re looking at some real moves. Until then markets are going to be as quiet as they were today.
2. If you’ve been following me for a while, you now I’ve been building a portfolio prepared for a recession. I personally don’t think the recession will be that bad. We’re not looking at some 2008 shit, we’re really looking at a recession that’s more like 2001. There are some things in the market that don’t look good but they’re not systemic problems. The only systemic issue I see out here right now is the mess that is money markets and the Federal Reserve is doing everything they can to put that fire out before it becomes something crazy. Investors feel the same and they’re actually more optimistic than I am. One of the hallmarks that I see that marks the market as healthy is the amount of cash companies have on hand right now. Apple is sitting on over $200 Billion, Berkshire Hathaway has over $120 Billion, Microsoft got boucoup bucks on hand, if you see some of the stories I have save in highlights you can see some of the stats. Through a tough time these companies can buy back their own stock, or reinvest in Research & Development, layoff less employees, and figure out ways to innovate through a recession. Other Investors have a different perspective. They think that having all this cash actually means that assets are underpriced and that companies will use this cash to buy more assets. It’s a great perspective and I like that it differs from mine. We will see how it pans out.
3. T-Mobile got the green light in a 3-2 vote from the Federal Communications Commission (FCC). This green light means that T-Mobile can officially buy Sprint. This combination will make them the 3rd largest phone company in the country. THIS IS HUGE Y’all. HUGE. I bought Sprint Stock back in 2012 for under $3 a share and now its going pump up and get converted to T-Mobile shares. Verizon and AT&T gotta be shook right now. With 5G rolling out I wonder how crazy the cell phone space is going to get.
4. Chicken sandwich wars has caused collateral damage. That collateral damage is Shake Shack. The stock has been beaten down over 20% this week because of weak sales. They need the Popeyes social media team because they’re burgers are hella good but their marketing is type lame. I know it’s supposed to be a “better quality” burger/chicken sandwich but they gotta learn how to get in on this action. Popeyes chicken sandwich done took a break and came back and shake shack sales are down and are expected to continue down this trend til the end of the year. Now the stock is still way up (up 47% this year) and performing better than McDonald’s and other burger chains but there’s still room for growth here in my opinion and what they lack is…. Marketing.
5. Bond interest rates are increasing because markets think a good trade deal is going to happen. 10 year treasury bonds are up 4.3% today compared to its price 2 days ago. There’s a good feeling coming down the pipe and everyone is hoping Trump doesn’t f*ck this up like he f*cks everything else up lol. Bring the deal home so we can get this chedda big fella.
6. On the other end China’s currency hit a 3 month high this week on high trade hopes. I hope China takes note of this and plays it cool next meeting. The world wants this beef to end so we can make some money. The Yuan gained 0.5% against the dollar (which is a big move) on yesterday and markets are loving it. Let’s keep the optimism rolling. I’m trying to get more of this Pork/Chicken money. LETS GOOOO.
PELOTON SHORT SQUEEZE
7. Something interesting is happening over at Peloton. So i’ve been watching the stock closely since it’s IPO (mostly because I don’t understand the hype) and some technical indicators are telling me that HELLA INVESTORS are shorting the stock. 27 Million shares of Peloton stock is being shorted right now. Yet only 38 Million shares are currently available for trading. That means over 70% of the available shares are being shorted at the moment. Investors really see Peloton doing horrible in the short term. These are some wild numbers. I think if some really good news comes out of Peloton right now we’re going to see alot of those shorts get SQUEEZED. But if they’re right, its probably the biggest “I don’t give a f*ck about your tech” move i’ve seen in a while in markets. I’m actually shocked that these stats aren’t bigger news. WILD.
8. AT&T paid $60 Million to settle a data case in which the company was accused of slowing down the speeds of phones who’s customers had unlimited data plans and still charging them for unlimited data plans. You know how tight I would be if I was paying for unlimited and y’all were slowing my phone down on purpose? WOW. The settlement money is going to be deposited into a fund that AT&T is going to partially refund customers who had signed up before 2011 and had their speeds throttled.
CHINA MOVES
9. The Pharmaceutical company AstraZeneca is following the Raising Benjamin play and heavily investing in China. AstraZeneca is raising $1 Billion to invest directly in Chinese Startups as they gear up for entry into the worlds largest population aka the worlds largest pharmaceutical market. The firm plans on raising this money over 4 years and has interested some Venture Capital firms like Sequoia Capital. Their competitor Merck recently reported that their sales in China grew by 90% and as the population becomes more Obese and Overweight more pharmaceutical companies plan on entering the market to take advantage of the many illnesses attached to obesity. Like I said last week and two weeks ago FITNESS TRAINERS… CHINA IS YOUR NEW MARKET. I DON’T KNOW HOW MANY TIMES I HAVE TO SAY THIS.
10. China’s real estate market is getting TOO HOT and now its starting to cool off has banks in China start to lay back on lending to individuals. If you’re a follower of The Dime💰 you probably saw that there’s been a run on China’s banks lately. Some of China’s biggest banks are currently short on cash which explains why lending is starting to get tight. Because of this the real estate market is getting a little cold and now people in China are starting to look at smaller/more affordable cities to live in because the cost of living is too high in some of China’s biggest cities. See how one problem at the bank can cause a problem right on your block? It’s crazy how interconnected our financial system is.
11/8 Friday
1. Markets are experiencing a slight pull back right now after Trump done went and said he doesn’t plan on rolling back Tariffs. We still have a month out til the next meeting with China so maybe he can change his mind between now and then.
More Life
2. Drake just made a move to get himself into the Weed Game. Drake just partnered with Canopy Growth Company (Ticker symbol CGC) to create the More Life Growth Company. Drake will own 60% of the company and Canopy Growth will own the other 40%. The company itself was a subsidiary of Canopy Growth Company and has already acquired its licenses to cultivate, process, and sell cannabis. Canopy has done this before. They have partnered several celebrities (Seth Rogen, Evan Goldberg, Snoop Dogg, and Martha Stewart). It’s great positioning for Canopy Growth especially because their stock is down 28% this year due to the mass exodus out of marijuana companies this year. I’m hoping this turns out to be a great venture for the boy. Would be dope to get an OVO Dime bag at OVOFest next year.
PRIVATE EQUITY PULLIN UP TO CHINA LIKE WHATS GOOD
3. China has a history of saving its companies from bankruptcy. When they reached close to death literally the state would inject money to keep them alive. Now they have changed their tune. They’re becoming more like us. China has revamped their bankruptcy system and has created 90 bankruptcy courts that will deal with companies who file for bankruptcy. This is alarming to me. It tells me that China is about to embark a bunch of failing companies and has decided that they’re not going use government funds to save them. Instead they’re going to allow lawyers, foreign investors, and bankers to jump in and make some cash. The system is going to operate very similar to chapter 11 bankruptcy in the US which allows companies to restructure under the protection of the courts. With this, companies can keep their businesses alive and pay off their debtors.
4. The USA is gettin PAID. The country took in $7 Billion in Tariffs. This is a record y’all. Most of the money came from Chinese electronics, apparel, tools, and other consumer goods. I never though China would cough up the cash to be honest but hey… business is business. Tariff revenue is up 59% from 2018. I hope they’re using this tariff money for social programs (probably not). A big boost came from a tariff that came into effect on September 1st that focused solely on consumer goods which probably hurt China hard. All those t-shirts etc made in China? Yeah in September they all paid an extra tax to get that here. I’m thinking that this first tariff China is going to want to get Trump to repeal. We will see though.
UBER LOCKUP PERIOD DONE
5. Uber’s stock is getting beat down some more. The lock up period is over and now the insiders (people who owned the stock before IPO) are selling the stock. For those who aren’t familiar, a lockup period is a contract that investors sign when they buy shares of a stock before going public to promise that they won’t sell the stock for a certain period of time. Uber had their early investors to do the same thing. The stock closed down 45% from its IPO price on Tuesday (disgusting). It looks like it’s going to get worse. My previous buy in for Uber was under $30 a share but now its trading in the $25 range. I think it could dip down below $20.
6. Chinese exports fell less than imports for the month of October. Which is kind of expected with the heights that the trade war reached. Another interesting thought though.... what if China pivoted into a consumer nation? Much like the US. I wonder what the economic effect would be, globally.
BLOOMBERG FOR PRESIDENT?
7. Mike Bloomberg is planning on throwing in his bid to run for President. A part of me thinks he’s doing this because he cares. A part of me thinks he’s doing this so he can fracture the party and Elizabeth Warren can lose. This is all OD spicy. I never thought Elizabeth Warren would have billionaires this rattled.
8. Juul will no longer sell mint flavored pods. The flavor era is over. The only flavors left are tobacco and menthol. They did this of course to gain favor with the FDA. But it’s going to hurt the bottom line seriously. Mint was their most popular flavor period. In the private markets a share of Juul stock used to go for $300 a share, now it goes for about $90.
9. Sears and Kmart are closing 96 more stores by February. Amazon is eating everyone’s lunch. This is nuts bro. It’s really crazy to watch a company like Sears that was huge in Brooklyn culture go down like that. This business game has no sympathy. None.
10. Pension plans, who were known for the investments in only safe products, have been trending toward riskier investments as of late. They’re trading in private markets, real estate projects, riskier bonds, basically these Pension fund managers are with the With interest rates so low, it’s tough to get a return in the safest assets so in order to get a return you need to take on higher risk.
