Leandro's avatar
$113.7m follower assets
Giverny Capital Asset Management Highlights
I read Giverny Capital Asset Management's Q1 shareholder letter over the weekend and some quotes were pretty interesting. First, let me give a bit of context on GCAM.

GCAM is a partnership between Canadian investment firm "Giverny Capital" and David Poppe. David Poppe was President and CEO of Ruane, Cunniff & Goldfarb, a RIA that's best known for managing Sequoia fund. GCAM is fairly new as it started in April 1st 2020. Since inception, the company has managed to provide nice returns (32.2% net) although it has not managed to beat the S&P 500 (34.5%). However, the team's prior track record is one of outperformance.

The company tries to invest in high quality companies where founders have significant stakes (of course, this isn't always possible)

Here's a list of GCAM's top 10:

$GOOG 9.1%
$ANET 6.5%
$PGR 6%
$SCHW 5.9%
$KMX 5.9%
$CSU.TO 5.6%
$SSNC 4.7%
$HEI 4.6%
$BRK.B 4.4%
$CACC 4.3%

Let's go with some of the quotes now!

On Q1's performance:

It was a rough quarter. I don't say that because stock prices declined. That happens. Volatility, after all, is what creates occasional dislocations in the market that allow long-term investors to buy great companies at attractive prices.

On commodities or energy cos:

GCAM doesn't own any energy or materials stocks. That's intentional. About 15 years ago, I did a fair amount of work on the emerging Canadian oil sands companies. I learned three lessons from this project that inform my investing at GCAM. First, never bet on any kind of Malthusian thesis about scarcity, as this is essentially a bet against human ingenuity. Second, no one in the oil industry knows what the price of oil will be in a year. Thus, oil companies spend tends of billions of dollars on capital investments with limited visibility into what the future return will be.Third, oil companies are like derivative securities: their success or failure depends more on the price of an underlying asset than it does on their management teams. Are these companies all run by subpar management teams? Of course not. But they are all ultimately hostage to the oil price.

On predictability of returns on capital and management:

What I am trying to do at GCAM is align with fantastic managers who control their own destiny. Or at a minimum, have more control of their own destiny. I would much rather invest in a business that earns predictably high returns and has a clear growth trajectory than in a business that could earn a superior return if a commodity price remains elevated.

My crystal ball is not better than anyone else's but I'd rather invest in obvious structural growers than probable structural decliners.

On Fed's actions:

The Federal Reserve seems reluctant to do its job, but it is clear that interest rates are going to have to rise at a a much faster rate to tame inflation. The next year or two likely will be bumpy.

On the worst performers of the portfolio:

If there is any good news, I don't believe this group suffered material impairments to their long-term earnings trajectory. Rather, relatively small earnings misses or reductions to ST guidance led to large stock declines.

On $FB spend on RL:

I can't say yet that these investments will pay off, but sales of Meta's Oculus headsets are healthy and reviews are enthusiastic. I feel certain that Meta CEO Mark Zuckerberg won't continue to spend so heavily on R&D if it produces no results.

On $FB health on ad market:

I've heard comments from two large advertising agencies recently that their budgets for Meta Platforms' properties are growing by double digit percentages this year, a signal that Meta remains an important advertising vehicle.

Roughly 2.8 billion people log onto a Meta-owned social media site everyday, and they stay for a while. That makes Meta the best advertising vehicle in the digital world.

On $FIVE:

Five Below arguably has the strongest growth profile in bricks-and-mortar retail and the stock is more reasonably priced after the recent correction. We're very confident in this business and expect to own it for a long time.

On $AMZN's vs $FB's capital spend (controversial):

Owning lots of airplanes to support a marginally profitable retail business does not seem as promising to me as trying to build the metaverse.

On portfolio management:

I don't like owning 1% positions as they consume research time and don't add much value to the portfolio when they do well.

On selling Topicus $TOITF:

It was less than 1% in our portfolio and not very liquid, partly because Constellation continues to own 60%. The company had a great first year, trading at a premium to its parent. We didn't think it was more valuable than $CSU.TO so we sold it.

On volatility going forward:

Given the war in Ukraine, soaring inflation, supply shortages and the expectation of sizable rate hikes by the Fed, I expect volatility to continue.

On timing the market:

The war in Ukraine is deeply disturbing, but market timing does not work and geopolitical events rarely create lasting market impacts. In any case, the best defense against economic uncertainty is to own high-quality, productive assets.
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Welcome to Earnings Season
Good morning contrarians! Stock futures are dropping along with bonds as investors gear up for a big week of earnings…

Today we’ll hear from Bank of America ($BAC), Bank of New York Mellon ($BK), and Charles Schwab ($SCHW).

Of course Twitter ($TWTR) is also worth watching after the company instituted a poison pill to ward off the efforts of Elon Musk over the weekend.

The state of affairs is discussed in more detail on this morning’s briefing and podcast, now live for premium subscribers:

3/21 - 3/25 Watchlist
As a little background of myself I am an options trader that focuses on trades around market structure.

The strongest sectors going into this week will be $XLF $XLK $XLC $XLY
I won't be trading those sectors themselves but I'll be taking their top holdings and comparing them to how they perform against $SPY in the recent days.

*While all plays are nice for equity I'll be hand selecting my favorite ticker from each section. Feel free to ignore the big list at each section and skip straight to the charts.

Currently my favorite plays will be longs within the FINANCIAL SECTOR
$BAC $WFC $JPM $MS $SCHW $BK are some great stocks to be looking at as we see strength coming in. I'll be picking up calls on demand zones while giving myself 2 weeks of time.

$BAC is holding breakout levels / demand zone very nicely. I'll likely be looking to add right on open assuming no gaps happen. I do believe with financials rotating in we can see financials climb pretty fast.
43c 04/01
45c 04/14

COMMUNCATION SERVICES

Personally my favorite is going to be $FB. Retail doesn't seem to understand that when a large cap runs, it RUNS. This can go on for much longer than expected. I expect small pullbacks but we just played $FB last week and had our cons go from $1.00 to $10.XX

However, do keep in mind we are testing supply zone right now. Although I expect a clean break and that we start making our way towards the gap fill.
220c 03/25
250c 04/14

$TWTR is seeing a breakout and some unusual volume imo. I took a stake in it for fun and as sentiment to Meta.
40c 03/25

$DIS $NFLX are coming along with sentiment to the rest of the market, but still just on watch. Not quite seeing the strength I want.

TECHNOLOGY
I can chart these upon request but honestly there are so many other's charts out there on these stocks. These are all going to be relatively strong right now with $QQQ pushing up.
$NVDA has NVDA day coming up, but I'd rather be playing the sentiment. $AMD is most notable here due to how close it is to breaking out.

CONSUMER DISCRETIONARY

$NKE has earnings and is seeing momentum on it. Would love to pick up calls right on Monday open and ride the IV til close. Otherwise you can choose to lotto calls and reduce your risk with spreads. Personally going to be swinging 2:1 CALL:PUT spreads.

$MCD is seeing buyers behind it once again and I'm ready to enter long. Going to be looking for retest of demand zone and entering when that happens. We do have a gap fill at the bottom but I don't believe we'll fill it. In the case that we do break demand zone I'll sit patiently and wait til we build a base.
250c 04/14

$HD still seeing strength is close to gap filling. I've actually been in this guy since the bottom, however feel free to daytrade this one. On successful retest of 336 it looks good for calls and ready to gap fill.
350c 03/25

Still working on my formatting, but hoping I was properly able to convey what I wanted!
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"Robinhood Readies Feature That Lets Users Lend Out Their Stocks" - Bloomberg
I find it interesting that $HOOD is allowing its users to make passive income from their stocks by lending entire shares of stock to other institutions. Interestingly, I didn't know that other platforms like E-Trade (owned by $MS) and $SCHW offer this type of program to their clients.

This program allows the WSB community and other retail investors to profit off of the growth in short selling. I bet that owners of $TSLA and $QQQ shares will see immense demand for their shares from short sellers.

What are your thoughts on this? Will it create meaningful growth in revenue for Robinhood? Will it be better for the market as this move is a step towards improving liquidity in the stock market?

Earnings Analysis for Banks
The big banks work with many companies in many sectors, so even if you don’t own any stocks in the banking sector, it’s always a good idea to keep track of what the banks are reporting, because they give you an idea of what to expect for the rest of earnings season.

Goldman Sachs reported this morning and shares dropped 8% because of surging expenses and an equities trading slowdown. $GS

Bank of America $BAC and Charles Schwab $SCHW reported as well.

If you you want to know what to look for when banks report earnings, @ayeshatariq wrote a great primer. Start here! 🏦 ⤵

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Upcoming Earnings Calendar (Jan 17-21th)
Hey guys! Here's next week's upcoming earnings calendar!

The most important thing I'm interested in is if there's a change of character relative to the past earnings season. Growth stocks got hammered last time. Hopefully this quarter the worst has been priced in and companies are evaluated on their actual results.

Some other things I'm interested in:
  • $PG - Are sales numbers still strong? Has supply chain inflation persisted?
  • $NFLX - Streaming trends over the past quarter. (I hold $ROKU and a bit of $FUBO)
  • $UAL and $AAL - Comments on the Omicron variant and corporate travel demand.
  • $PNC $BAC $KEY - Insights on the economy. December retail sales were down, so we'll see if banks also point to weak consumers.

What are you guys interested in?

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.

TUE:
WED:
THU:
FRI:
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Earnings Season Is Upon Us! (Oct 11-15 Calendar)
Earnings season starts next week, and there are several very intriguing earnings calls happening. Here's what I'm interested in:

  • Perspectives and forecasts on the US economy from major banks $JPM $GS $WFC $BAC $C $MS $PNC
  • An update on the semiconductor shortage from $TSM and their outlook for 2022 and beyond. Major clients of the company include $AAPL $AMD $NVDA $QCOM $TSLA
  • More context on the US air-travel recovery from $DAL, particularly on business travel.
  • General update from $DPZ. Although I've never owned the company, their turnaround and continued growth always amaze me.

Comment below what earnings call you're looking forward to next week!

Remember you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

TUE

WED

THU

FRI
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Eric Pelnik's avatar
$266.4m follower assets
Earnings this week
📞Which calls are you most excited about?

Monday, July 12th
None of Interest

Tuesday, July 13th
$FRC First Republic Bank
$JPM JPMorgan Chase & Co
$GS Goldman Sachs Group
$PEP PepsiCo

Wednesday, July 14th
$DAL Delta Air Lines
$BAC Bank of America
$BLK BlackRock
$C Citigroup
$WFC Wells Fargo
$SCHW Charles Schwab
$PNC PNC Financial

Thursday, July 15th
$AA Alcoa
$PGR Progressive
$UNH UnitedHealth Group
$MS Morgan Stanley

Friday, July 16th
$STT State Street

Sources: Business Insider, Google Finance, and Yahoo Finance
Will be cool to see banks guidance for coming quarter, also to see how Delta has been doing with Covid easing
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Eric Pelnik's avatar
$266.4m follower assets
Earnings this week
📞 Which calls are you most excited about?

Monday, April 12th
None of interest

Tuesday, April 13th
$SCHW Charles Schwab (also reported to be on April 15th)

Wednesday, April 14th
$FRC First Republic Bank
$BBBY Bed Bath & Beyond
$JPM JPMorgan
$WFC Wells Fargo
$GS Goldman Sachs

Thursday, April 15th
$UNH UnitedHealth
$DAL Delta Air Lines
$RAD Rite Aid
$BAC Bank of America
$BLK BlackRock
$C Citigroup
$PEP PepsiCo

Friday, April 16th
$ALLY Ally Financial
$MS Morgan Stanley

Sources: Business Insider, Google Finance, and Yahoo Finance
Eric Pelnik's avatar
$266.4m follower assets
Earnings this week
📞 Which calls are you most excited about?

Tuesday, January 19th
$BAC Bank of America
$NFLX Netflix
$SCHW Charles Schwab
$GS Goldman Sachs
$HAL Halliburton

Wednesday, January 20th
$AA Alcoa
$PG Procter & Gamble
$MS Morgan Stanley
$UAL United Airlines

Thursday, January 21st
$INTC Intel
$COST Costco
$INTU Intuit
$CTXS Citrix Systems

Friday, January 22nd
$SLB Schlumberger
$ALLY Ally Financial

Sources: Business Insider, Google Finance, Yahoo Finance
Today, I’m watching $GS (~3% position) pre-market and $NFLX (~5% position) after the close.

$GS is a newish position for me that I put on back in October 2020 (avg. cost $249). It serves as a pro cyclical counterweight to my high beta tech names, and benefits from increased m&a and trading tailwinds. I also like thesecondary exposure to Marcus/wealth management, and Goldman’s strong engineering/tech-forward culture.

$NFLX I’ve owned for a few years now (avg. cost $255), and plan to continue holding long-term. They release earnings after market close, and I’ll be closely watching international subscriber growth.
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