Erick Mokaya's avatar
$103.3m follower assets
Our newsletter this week
Check out our weekly newsletter that covers:

  • Data that CEOs are seeing does not suggest that a downturn is imminent
  • PE and VCs with record amounts of dry powder
  • AT&T saw some delays in collections of payments

Companies covered:


Will the baby formula shortage inspire $OTLY to make a pivot in its business?
$OTLY is currently growing fast by selling oat milk to consumers and businesses. Being at the forefront of the consumer products plant-based revolution, one idea that came to mind is creating a plant-based baby formula to help solve the baby formula shortage.

Since most baby formula is created with cow's milk, supply chain issues with the dairy industry could possibly be why we have a baby formula shortage. $ABT is a major manufacturer of baby formula in the US and they've been shutting down baby formula manufacturing plants over the past couple of years as declining birth rates meant less demand for baby formula.

By creating a plant-based baby formula, I see Oatly regaining enthusiasm from investors. Since it will take time for Abbott to restart old baby formula manufacturing plants, it will be a while before the baby formula shortage gets resolved. And with the crisis currently ongoing, I hope that Oatly uses the crisis to start creating a plant-based baby formula.

And if they're able to develop it and get it to market sooner so that Abbott can resolve the baby formula shortage, I can see more parents willing to let their kids consume plant-based baby formula. The returns from this endeavor are questionable, and if the declining birth rate trend reverses, then the endeavor will pay off massively.
Housing Starts, Beige Book, Earnings: Daily Contrarian, April 20
Good morning contrarians! Netflix ($NFLX) is tanking after the company posted disappointing subscriber figures, taking streaming competitors with it…

Several earnings up today: Anthem ($ANTM) just beat on top- and bottom-line estimates. Later this morning we’ll hear from Baker Hughes ($BKR) , Abbott Labs ($ABT), and Procter & Gamble ($PG) .

After the close this afternoon we’ll get Alcoa ($AA) , United Airlines ($UAL), Kinder Morgan ($KMI), and Tesla ($TSLA). Of course Tesla has to report on 4/20.

Read all about it, or listen to the podcast here:
Alberto Wallis's avatar
$23.3m follower assets
Upcoming Earnings Calendar (Jan 24-28th) - BIG week ahead!
Hey guys! Here's the upcoming earnings calendar! Definitely a very busy week ahead. Here's what I'll be looking at:

  • $MSFT - Can Azure keep its growth rate? Will a slowdown cause a sell-off similar to the one $NFLX had?
  • $TSLA - Post earnings reaction. This is one of the few high-growth stocks that has shown relative strength. Let's see if this changes post ER.
  • $LOGI - Is demand for gaming peripherals still strong? May be an early indicator of videogaming strength.
  • $AAPL - It's always interesting to hear what Apple is doing.
  • $V - Data on consumer spending.
  • $CVX - General comments on the energy market.

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

MON:

TUE:

WED:

THU:

FRI:
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What the $JNJ split means
One of the largest multinational corporations in the world, Johnson & Johnson, has announced today that they will be splitting their company into two: one with a focus on consumer products, while the other focuses on pharmaceutical businesses. This split signals what I believe is the forward trend for multinational corporations: “Shrink to grow,” as David Faber put it.

When a company initially lists on the public markets, it is valuable to the market not because it is a jack of all trades, but instead because it’s serving a particular niche that the company figured out how to monetize (or not for some of these other companies, lol). The trend in the past couple of decades has been for large companies to become even larger by expanding their business offerings by acquiring different companies in different (and similar) market segments as a means to extend their scope and hopefully grow their profit margins.

$JNJ has picked up on something—which some other companies have picked up on as well—that focus is key if you want to truly grow and be in it for the long haul. Gone are the days where you have one company that does everything because the pace of technology no longer allows for a company to stay relevant if its energy is scattered. Further evidence of this can be found in J&J’s rationale for the split:

  1. Increase focus, resources, capital allocation
  2. Create more targeted investment opportunities
  3. Align corporate, organizational structures

As mentioned in this video, $ABBV & $ABT provided a great case study as to WHY companies should split, especially when a company’s business offerings diverge as time progresses. There is a natural inclination for things to diverge in nature, rather than to converge, and it's smart for any person or company to bet on that likelihood, over the other. There’s an incredible amount of power in focusing, and focus is perfectly exemplified by what happens when you focus a magnifying glass on one particular point and it starts a fire, versus moving it all around and nothing happens.

Taken from the book Focus, by Al Ries, “Only when a specialist has a chance to compete with a generalist can you see the value of being a specialist. If there are no specialists, then all the winning companies will be generalists.” And when the pace of technology is exponential, it is ONLY the specialist that is well-positioned to take advantage of new technology in a way that unlocks new value for the consumer, rather than the generalist. Conglomerates are not as nimble, and it makes them much more defensive than a smaller startup that is operating on the offensive. “But as a conglomerate grows it falls victim to the flywheel effect. The larger the wheel, the faster the speed at the periphery and the greater the chances of problems developing.”

With the current wave of decentralization washing through, it’s just not good business for a company to be a conglomerate anymore. Better to be known and respected for providing quality goods and/or services to a particular niche, than to get lost in the proverbial sauce and not have an identifiable brand. This is one of the major reasons why even though J&J does have many products, they are all under the J&J umbrella; their products don’t all share the same name. “The more products and services that you hang on a name, the less focused and less powerful it becomes.” Put another way, “…in a competitive environment, more is often less because with more you lose focus.” With this info in hand, when a company boasts that they’re getting into a bunch of different markets that have no real relation to their core offering, that is a sign to RUN.

I could go on and on about how important it is to have focus in business and in really, any area of your life, but I’ll leave you with this quote: “The power in business doesn’t derive from your products or your factories. It derives from your position in the mind. And a specialist, or focused company, is in a much stronger position than a generalist.”

Welcome to the era of the specialist!
Featured earnings for the week of Oct 18
Earnings season (finally) getting into full gear!

So many interesting companies announcing earnings next week. Here are is the Fincredible Featured list. View all here.

Here are some I own / or particularly interested in

$JNJ - very interested to see results in the medical devices segment. Specifically are their signs of closing the gap with $ISRG with their new platform and are elective surgeries coming back

$ISRG - flip side of the $JNJ narrative. I love it when competitors announce close to each other :)

$NFLX - international subscriber numbers

$T - update on discovery spin-off, dividend and 5G capex

$XM - $MNTV is my top 3 holding based on thesis they are making inroads in enterprise market, which $XM dominates. Big enough market for both but want some context.

A few companies like $PG on inflation numbers, but I suspect @awallis will be kinda enough to provide a MacroTalk update on this topic again

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The "Happy Husband, Happy Life" Portfolio ;)
This is a playful take on https://share.commonstock.com/TdNqd2Y10db by @zm1

Reading what he wrote, I realized that almost word-for-word, I could have written the exact same memo, merely substituting "husband" for "wife," and swapping out pronouns etc. So I did :)

Everything below are his words exactly, with only substitutions for husband/wife, him/her, he/she. Any other changes are bold. It's funny but it's also 100% true!

~~~~~

Today on Commonstock I came across a memo by @zm1 that made me stop and think. He was writing about constructing his wife's portfolio, and wanted to ensure he was picking businesses that she knew. It made me wonder, "am I the only one doing the same for my husband?"

My husband is a rock star--he's a super dad, prudent psychologist, and member of multiple professional leadership teams--but he doesn't know the first thing about investing. He knows I love it, so he lets me do it for him. In his portfolio, are only businesses he knows. ... I want him to feel invested in the businesses that he owns. I would argue it's hard to do that for businesses you don't really know. Another thing about my husband is that he's more risk averse than I am—another reason why knowing his investments will help during large drawdowns.

To help him feel good about my investing journey, I've come up with a portfolio of stocks I'm calling the "Happy Husband, Happy Life" Portfolio.* The goals are:
  • Outsized returns relative to low-cost S&P 500 index fund
  • Within my husband's circle of competence and within his "best vision of our future" (shout-out David Gardner, The Motley Fool)
  • 0% that he needs to "take my word for" **(although he takes my word on everything ;)**
  • Not too many stocks but not too few
  • 1 year minimum holding period

***Note: I never actually named mine - any ideas?? :)**
**These are holdings, in alphabetical order:**

--> Anyone else do stuff like this, or is it just me and Zach?? (big smile emoji)

-Rachel
This is totally relatable but in my particular case, I'm actually doing this with my 7 year old son! Each morning he knows I do "Finance" and of course he sees notifications on my phone. It may be a set alert, but he was finally curious, so I took the opportunity to explain the basic of stocks to him. I then proceeded to ask him what companies he would like to invest in with his money that he has received from birthdays or Christmas. Asked him to invest in the things he loves and what he's passionate about.

Here was his initial list not knowing that all companies are not publicly traded, but I think it's hilarious and worth sharing:

Lego (Private)- Loves all thing Lego related
In-n-out (Private) - Favorite Burger Joint
Chick Fil A (Private) - Favorite Chicken Strips
Barnes and Nobles $BNED - Loves reading
Subaru $FUJHY - Favorite car is WRX

It was a good opportunity to explain the difference between private versus publicly held! Hope you all enjoyed this as much as I did doing this with him!
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Eric Pelnik's avatar
$283.9m follower assets
Some earnings this week
Monday, July 13th
$PEP PepsiCo

Tuesday, July 14th
$DAL Delta Air Lines
$JPM JPMorgan Chase
$C Citigroup
$WFC Wells Fargo

Wednesday, July 15th
GS Goldman Sachs

Thursday, July 16th
$ABT Abbott Labs
$BAC Bank of America
$DPZ Domino’s Pizza
$NFLX Netflix
$JNJ Johnson & Johnson
$MS Morgan Stanley

Friday, July 17th
$BLK BlackRock
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