Are consumer preferences shifting?
CPI data comes out this Friday. In preparation for this data, many analysts have been watching the news as Target $TGT lowers earnings expectations once again.

This shouldn't come as a real surprise as retail stocks like Walmart $WMT, Target $TGT, and Amazon $AMZN have all seen a large decline in revenue growth. This would normally be a sign of lower consumer spending and a possible change in the direction of inflation however, another signal is saying the opposite.

Consumer spending on travel seems to be rapidly accelerating as companies like Airbnb $ABNB, Marriot $MAR, Booking $BKNG, and Delta $DAL are all seeing revenue acceleration.

These two indicators seem to suggest consumers are changing their spending habits away from goods and toward services like travel.

Will this data start to show up in Friday's inflation report?
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The shift of consumer spending habits at large, rather than focusing on the slowdown in overall spending exclusively, is fascinating to ponder about imo. Would not be surprised if discretionary plays continue to hold their breath/dip lower over consumer sentiment woes but at least encouraging to see travel demand
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Marriot Earnings Call Highlights!
Marriot International $MAR Earnings Call Highlights!

Revenue still well below pre-pandemic levels:
  • "In December, global ADR was 3% above 2019 levels, and occupancy for the month gained further ground compared to December of 2019, driving global RevPAR to an 11% decline versus 2019. This was a 53 percentage point improvement from the RevPAR decline in January of 2021. In the fourth quarter, global RevPAR was 19% lower than prepandemic levels. Global occupancy for the quarter came in at 58%, 12 percentage points below 2019, while ADR was only 2% shy of 2019 levels."
Rooms pipeline:
  • "Our development team signed franchise and management agreements for approximately 92,000 rooms during 2021, and our year-end global pipeline totaled roughly 485,000 rooms. The composition of our pipeline dovetails nicely with current demand trends."
Owned and Leased Portfolio Profits:
  • "Our owned and leased portfolio generated $19 million of profits, a nice increase from a loss of $50 million in the fourth quarter of 2020 as results improved at hotels in the U.S. and Europe."
Capital Structure and Capital Returns:
  • "We made great progress in improving our credit ratios during 2021 and remain focused on bringing our leverage in line with our target of 3 to 3.5x adjusted debt to adjusted EBITDA. Assuming the recovery continues largely as anticipated, we could be in a position to restart capital returns in the back half of 2022."

Upcoming Earnings Calendar (Feb 14th - 18th)
Hey guys! Here's the upcoming earnings calendar! Three of my holdings report next week.

  • $ABNB - The stock has held up pretty well during the market sell-off. The valuation is still high, but with re-openings the company could see a big boost this year.
  • $TTD - They've said Apple IDFA is a non-issue, so their growth should be great. A key indicator of ad spend.
  • $ROKU - The stock is down almost 64% from ATH, but the fundamentals keep improving. I expect great results from the company, with ARPU growing and margins expanding.

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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February earnings
I think upcoming earnings are going to be really important in this volatile market. Companies will likely get punished (further) on even slightly bad results or outlook, and I'm hopeful strong earnings like we saw with $TEAM or $AAPL will buoy the overall market or at least software sector that I'm playing close attention to.

Personally, I have a handful of companies on my buy list including $CRM, $COUP, $ESTC, $SMAR, $POSH, but will only do so once they make it past earnings either scathed (lower price) or unscathed (peace of mind) :)

So we've put together our most anticipated earnings for all of Feb!


Keep an eye out!
2: $FB $ABBV $TMO $NVS
3: $AMZN $LLY $MRK $TNX
21: $UIS
28: $JLL TGNA $LAZR $SAIL
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Ian Gray's avatar
$34.1m follower assets
The Compounders' Cup 2021
The average underperformance of the tournament field is currently (44.9%).

What a difference a year makes!

Last December, I ran a tournament titled "Compounders' Cup 2021" where Twitter users voted on which company would have the best return in 2021.

$SE beat $TDOC in the final

Despite all of the baskets underperforming the market, picking $SEAS the champion was not a horrible choice.

The correct answer out of this field would have been $NETWITH 55 points of outperformance.

Click on the link below to read my recap:
Participants ranked in order of relative performance:

$NET 55.49%
$DAL 33.51%
$RBLX 19.48%
$TSLA 4.65%
$MAR -3.52%
$SHOP -4.26%
$TTD -9.47%
$SE -13.43%
$RCL -20.37%
$APPS -20.83%
$CRWD -26.29%
$LUV -34.05%
$OKTA -34.35%
$PLTR -43.60%
$SQ -46.79%
$OZON -47.55%
$MELI -50.36%
$ROKU -54.90%
$OPEN -57.46%
$FVRR -62.34%
$ZM -64.89%
$LSPD -65.16%
$PINS -68.13%
$FTHM -74.17%
$TDOC -74.68%
$FSLY -77.09%
$SKLZ -80.82%
$NNOX -82.93%
$BFLY -85.43%
$JMIA -91.13%
$ATY -92.15%
$PTON -96.40%
$OTRK -111.73%
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The Travel Sector Needs Corporate Travel Back
The travel sector continues to be hit by COVID-19. Almost two years into the start of the pandemic and most companies in the travel sector are still well-below their pre-pandemic levels. However, there's optimism among the industry executives that travel will come back strong in the coming year.

The latest Fincredible MacroTalk goes over what company executives are seeing regarding the demand for travel. Here are three quotes that stood out to me:

  • $HLT: “Business travel continued to gain momentum, with midweek occupancy and rates improving meaningfully versus the second quarter. In the quarter, business transient room nights were roughly 75% of prior peak levels. Studies show that nearly 70% of U.S. businesses are back on the road, up 28 points from the end of the second quarter. With roughly 80% of our typical corporate mix coming from small- and medium-sized businesses and with the lagging recovery of larger corporate travel, we've taken the opportunity to continue our work from before COVID to further increase our focus on this segment of demand.”

  • $ABNB: “On October 15, I believe it was that date that President Biden announced the reopening of the borders for international travelers come to the United States. Within 1 week of that announcement, we saw a 44% spike in nights booked for stays, crossing borders coming into the United States on Airbnb for stays November 9 and later, which is when the borders would open. So what we are seeing kind of across the board is evidence of pent-up demand.”

  • $DAL“We hear regularly from our corporate customers that they're ready to get back to travel, see their clients face-to-face to renew business relationships and develop new ones. That sentiment is coming through loud and clear in our most recent corporate surveys. More than 90% of our respondents mentioned that they expect travel volumes in the December quarter to either be the same or outpace September quarter. Nearly 60% of our accounts are telling us that they've already reopened their offices with an additional 10% expected to open their offices before year-end.”

It's clear that demand for leisure travel is strong. All of the quotes in the MacroTalk point towards pent-up demand for leisure travel. When allowed, people are going on vacation and traveling.

However, corporate travel is still lagging. The decision to travel or not is a lot more complicated for companies, which has resulted in muted demand for corporate travel this year. There's hope that next year the demand for corporate travel will pick up, but there's no guarantee it will. Without corporate travel, a lot of travel stocks face an uphill battle.

If you'd like to read the whole post, here's the link: Fincredible MacroTalk December 15: Travel Demand.
Hi Alberto this is a great memo ! I am curious to know which companies you believe are best equipped for the uphill battle if corporate travel were to take longer to pick up?
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ParrotStock's avatar
$256.5m follower assets
Preparing for 2022
We’re just a month away from 2022. Now’s the time many people start rebalancing and trying to figure out how to align their portfolio’s for the new year.

There’s a lot of talk about how interest rate hikes will affect growth, and if I plan to change my investment style. So this is my attempt to answer these questions, and what I “currently” plan to do going into the new year.

2020, The first style change

I first want to re-cap where I’ve been on my investment journey. You can get the full picture by reading my first newsletter: “An Introduction

I started out in February 2020 primarily focused on Index & ETF’s with a few large caps added to the mix. Over a few months after the March ‘20 crash, I rotated out of those index and ETF’s and into individual names to take advantage of the historic post-crash bull market.

Whether smart or lucky, that strategy paid off well. I assumed, and have stated before, that when I saw a shift in the market I would change my investment style to match…

2021 A year of learning

In 2021, I failed to recognize the extreme valuation’s and looming correction we would get in February ‘21, and basically rode the market up… and back down. I recovered from the low’s of 2021, but have not seen the high’s of February '21 since.

With the benefit of hindsight, it’s easy to see the extreme valuations, and how obvious it was I should have trimmed/sold more near the top. As good as 2020 was, it also ingrained some very bad habits.

Through that experience I learned to trade options, first as a potential hedging strategy, then as a supplement to my long term investments. This added both tools to the toolbox, and also gave me an outlet for the “need to do something”, while leaving my long term investments intact to compound over time.

Until last weeks sell-off, I’d been able to tread water with an average year (roughly +10%) despite having huge drawdowns in many of my larger holdings; including $MGNI from the $60’s to under $20. After last week, I’ve dropped to a slightly negative return on the year.

Rotating back to index’s in February would have paid off much more in the short term, but I believe staying the course with my conviction holdings and learning a new skill (options) will benefit me more in the long run.

Outlook for 2022?

Now the million dollar question… What’s in store for 2022?

I think we’ve already seen some of it:

  • Multiple contraction
  • Inflation
  • Tighter monetary policy
  • Interest rate hikes
  • Return to work
  • Return to travel
  • Increase in fossil fuel demand

So what does it all mean for the market?

We’ve already seen multiple contraction in small/mid cap names, I think we see a similar contraction in larger cap names as well; either due to lower prices or higher revenue’s. We got a big taste of that last week.

Is inflation transitory? Some of it is, caused by lack of workforce participation and other supply chain issues. Some of it is here to stay, due to higher wages and fuel costs.

Tighter monetary policy? Whether you believe in the underlying companies or not, there is no doubt the run up in speculative assets has been due to the unprecedented liquidity in the market. All that “free” money has to go somewhere, along with growth stocks a lot of it flowed into crypto, NFT’s, and meme stocks. Less liquidity will likely see a correction in these type’s of assets.

Rate hikes are going to make the cost of capital more expensive, whether that’s funding a new business, buying a new home, or servicing existing debt. With home price’s at record highs, interest rate hikes could dampen home sales (although there might be a rush before the rate hikes).

Return to work has already started, there are many positions that won’t ever go back, but in general we should see more face to face interactions. How is that going to affect WFH stocks next year? But more importantly, what stocks will benefit?

Return to travel has picked up as well, but we are no where near peak travel. With each Covid variant we will continue to get volatility in the sector. Who’s going to benefit?

Despite the popular theme of ridding the world of fossil fuel, it’s not going anywhere, and demand will only pick up in 2022. Without fossil fuel you would be naked, hungry, and afraid. Work from the office, travel, and current administration policies will only increase demand and reduce supply in 2022.

The Plan for 2022

I expect to see more pain in the short term, but believe patience will pay over the long haul.

I’m re-evaluating my positions to be very selective in holding companies who are not profitable. Especially small & mid Cap companies.

I’ll be looking to add to my growth companies as their multiples contract. Revenue growth and profitability will be rewarded… eventually.

I’m not going to overthink my “market disruptor” positions, and will accept they could remain beaten down for the majority of 2022. This includes companies such as $NNOX & $LMND.

I will try and catch the prevailing trends with my allocation for trading.

Some noteworthy trends I’ll be watching:

Travel: I have a position in $ABNB that I expect to do well, and I could see $MAR & $CCL catching bids in 2022 among others.

Advertising: As supply chain issues resolve, and travel opens up, I expect advertising to pick up with it. Even if the economy is suppressed in 2022 due to inflation & interest rates, if businesses have merchandise, they will be vying to sell it to you. $TTD, $MGNI, $ROKU, $ATY, $CTV, $ZMDTF, $EGLX, $PUBM, $APPS and many more should do well.
  • According to the WSJ today 12/6/21, global advertising will increase by 22.5% to $763.2 billion this year (excluding political ad spend). That’s up from a 19.2% expected growth rate in June, and only 12% expected last December. The growth rate is accelerating faster than expected.

Fossil Fuels: I’ve already traded $OKE & $RRC this fall for natural gas & propane. I think refiners could get a boost in 2022. $XOM & $PSX are solid options to keep an eye on.

An interest rate increase may bring banks back into the spotlight. I’m leaning more towards staying with alternative investments in this area such as Fin Tech names $SQ, $SOFI, & $UPST for now, but banks should do well.

I’ll be staying away from housing and work from home names such as $ZM, $UPWK, $FVRR, $DOCU etc. for now. Although they may all be great long term investments, I could see some short term pain in 2022. I’ll also be cautious adding anything with a high sales multiple like $NET & $SNOW.

Summary

In short, I don’t expect to make any wholesale style changes like I did in 2020 unless something fundamentally changes in my life (I lose the time I have available now to dedicate to trading/investing).

The market is likely to do what is least expected. Everyone expected a Christmas rally, and then a pullback in early 2022. So naturally we got an early pullback instead of a rally. We are now hearing everyone scream the crash is here, and it’s going to get much worse. Maybe… or maybe we rally instead. No one really knows for sure.

Traders are sitting on the sidelines looking for market direction, young investors are dollar cost averaging into great companies, and many long term investors are just sitting tight knowing over time the market will recover.

I expect to see more red days ahead, but I know I’m not smart enough to time the market (especially with how it’s been acting in 2021). Maybe the downside of 2022 is getting priced in as we speak, and we will continue our bull run, or maybe we are in for another 35% correction (I’ve been through 2 in 18 months, and honestly getting close again). Either way, I’m investing in companies I believe in long term, and I’m going to do my best to continue holding them through the volatility until the thesis changes.
And the thesis will change on some of them. I’ll lose money on some and take profits on others. It’s the nature of the game.

If you can weather the volatility, I still believe growth is the best long term strategy, but there is something to be said for having those stable slow & steady growers in your portfolio as well. There may come a time where I decide to add more of them back into mine. For now, I’m going to ride this out like I have the other corrections, and continue to position myself for what I believe to be winners in 2022 and beyond.

You can find the full newsletter here: "Stock Squawk: Preparing for 2022"

I look forward to hearing what you guy's have planned for 2022 in the comments. Where do you think we're going? How are you positioning? 👇

🦜
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Some really great thoughts here Parrot! This current pullback/correction/whatever has made me think about if being so aggressively into growth stocks is really the right thing for me. For now, I will be patient, but going into 2022 I will start slowly going back into some ETFs and index funds to get some stability back. And then maybe do some crypto shorting (like your options), to “do something fun”.
Thanks for always inspiring. It’s definitely a fun “hobby” we have 😊
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Hedge Vision's avatar
$115.1m follower assets
Gabe Plotkin's Melvin Capital got crushed by $GME, but the fund still has a massive $14B in AUM with a record of outperformance.

Here's what Melvin Capital did during Q3:

-Increased: $LYV $MA $BILL $SNAP $HLT
-New Buys: $AFRM $MAR $SQ $MCD $ASML. Call options on $MA $HLT $SNAP
-Sold Out: $V $TGT $M $HUBS $PYPL. Call options on $ADSK $JD $AMZN

Top 10 Positions ⬇️
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It's interesting to see $MCD alongside the likes of $SQ, $AFRM, $BILL. I like the company and think the have decent pricing power (though they should take care not to raise prices so high as to kill their value prop!)
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Upcoming Earnings Calendar! (Nov 1-5)
Hey guys! Here's next week's earnings calendar! Several very interesting companies set to report earnings. Here's the one's I'm most excited about and why:

  • $APPS: any sign of iOS ad dollars shifting to android (Digital Turbine's revenues are mostly from android).
  • $Z: an update on the real estate market and iBuying
  • $LYFT and $UBER: is mobility in the US back to pre-pandemic levels?
  • $COIN metrics on the NFT market.
  • $PENN and $DKNG update on the mobile sports betting market.
  • $ATVI number of Call of Duty Warzone players. The last reported number was 100MM.
  • $CRSR: comments on the supply chain issues they're experiencing.
  • $MELI: update on the Brazilian e-commerce market. Relevant for $SE's expansion.
Comment below which earnings report you are looking forward to the most!
Friendly reminder: you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

MONDAY

TUESDAY

WEDNESDAY


THURSDAY

FRIDAY
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