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Doug Helton
$3M follower assets
Real estate, competitive advantages, and logic-based reasoning. Unapologetically swayed by high-quality investing memes.
132 following84 followers
Banks getting smacking around by Moody's
If Goldman Sachs came out and said they were going to downgrade 10 or so smaller banks to sell, that would make sense. They could say it was because of higher cost of capital, higher default risk. That I can understand.

But Moody's is downgrading based on the expectation of a 2024 recession, and therefore reduced profitability.

I'm not sure I understand this.

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Palo Alto Networks -7% today
Today's $PANW drop is because of Fortinet $FTNT

Palo Alto Netwroks is a really good company. They are different than Fortinet. When Fortinet talks about sales cycles elongating... that sounds like a Fortinet problem. Not a Palo Alto Networks problem.

This feels like a Snapchat vs. Google rivalry. One is known for being the company that should have taken the buyout offer. The other is Google.

Earlier this week Palo Alto Networks dropped because announced that they will host their earnings call two weeks today after the market closes.

They are going to report after. market. on. a. Friday. 😤

Sorry, what?

Has any company ever released good news on an after-market Friday?

Morgan Stanley put out a note this morning saying they had done their channel checks and they still think Palo Alto Networks is a buy. Ok great. But still. Why the release on a Friday?

Nikesh Arora (the CEO and former Google executive) is not a moron. He knows this.

Why are they doing post market Friday earnings?

That caused this first dip.

$PANW has lost 11% in the last month.

Palo Alto Networks is the best cyber security company not named Microsoft.

Keep in mind, Palo Alto networks is a company that is doing something that all cybersecurity companies should be doing.

This company is going towards profitability.

We at least get to use P/E. There are actually earnings and they are actually earning.

Do we need an Okta and a Zescaler and a Crowdstrike, and a Fortient? Let's get some consolidation going!

Final thought: if Fortinet's woes are indeed just a Fortinet problem (as is my intuition), then this is a great dip to buy Palo Alto Networks on.
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Lemonade and AI
Rule of thumb: If you're using AI for decisions a human could make, you will get sued in the future.

Storytime: Amazon's AI resume reader was really, really good at preferential treatment to white dudes and Asians.

In order to actually do AI and deep learning models, you start with data and train your AI on that data. In this case Amazon trained their AI from all their own past employment data.

Amazon historically employed and promoted white dudes and Asians. Amazon's culture was great for these people.

So the data the AI was trained on just perpetuated the bias Amazon already had.

And when they tried to stop the AI from being biased, it found ways to derive what someone's race was by using other data points like area codes.

The result: Amazon got sued.

Lemonade uses AI to determine insurance

I predict in the future they will get majorly sued, when it comes out that their AI is biased on attributes such as age, gender, and ethnicity.

Takeaway: Any decision that has to do with approving/selecting people, and that can be made by a human, should be made by a human.

Using AI is a really effective way to get sued in a future.

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If something f's up at a company, you always need to know who is responsible in order to correct it. But using AI abstracts the decision making logic away. So internally no one can be held accountable. Externally, the whole company will be held accountable.
Which type of substitute milk will have the most traction in 5 years?
Are there investible businesses in this industry? $OTLY
Which type of substitute milk will have the most traction in 5 years?
15%Oat Milk
10%Almond Milk
21%Soy Milk
52%Coconut Milk

19 VotesPoll ended on: 8/3/2023

Oatly down -24% today
Oatly cut its sales outlook and announced an improvement plan in Asia as consumers in the region moved away from its drinks post-Covid.

Full-year revenue growth is expected between 7% to 12%, down from 23% to 28% previously. Oatly's Q2 revenue missed analyst estimates.

$OTLY is down -24% today, the most it has ever fallen in a single day since it was listed in May 2021.

Oatly is planning on simplifying their portfolio of products in order to reduce operating costs.

CEO Jean-Christophe Flatin said that consumers behaved differently than they expected post-Covid. Oatly is downsizing corporate functions and overhead in the Americas because of this.

The wrong move: Oatly made significant investments in new products, distribution, and promotions with the assumption that they had traction. They did not.

Oatly will save ~$85 million from the downsizing efforts in 2024, but there will be some new impairment charges such as severance.
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How social media companies copy each other's features
It is not only Mark Zuckerberg who does it — he just does it better:

Nearly every major social media feature has been copied or iterated on by rival apps, causing most major social media platforms to begin to look the same.

Social media giants have a long track record of adopting popular features and integrating them into their own apps to stay competitive. Their key points of differentiation are increasingly becoming their philosophies, values and use cases.

Meta, for example, says Threads — its Twitter, or now "X," rival — is meant to be "a friendly public space for conversation" that won't focus on news and politics.

TikTok on Monday debuted a set of new text features akin to Twitter and Threads that lets users share written thoughts and updates.

$META $SPOT $TWTR $GOOG — Youtube, $MSFT — LinkedIn $PINS $SNAP
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Instagram Threads is very global, with 16% of users coming from the U.S.
cc @andybuchanan @fernando_medrina and @chip_lunderburg who were talking about how Twitter's user base is 17% from the US. Instagram has a similar US user base.

Why would advertisers exclusively advertise on Twitter? Why not spread their dollars over multiple platforms? The existence of Threads is bearish for Twitter. Its a more competitive environment for them now.

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Tattooed Chef files for bankruptcy
Tattooed Chef is an example of how a company’s management can sound confident even while the business is failing. The red flags were there for Tattooed Chef, and now $TTCF stock is in trouble as the plant-based food start-up files for Chapter 11.

What contributed to their downfall?
• Persistent inflation paired with higher cost products
• The market was very tolerant of unprofitable start-up businesses... and then all of a sudden it wasn't. That shift (mostly from 2021 to 2022) was too quick of a change to adapt.
• On a year-over-year basis, the company’s net revenue declined 12.7%
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As recently as March of this year, CEO Sam Galletti said that he saw “early indications of our progress on a sequential quarterly basis, with material improvements expected to manifest beginning in Q1 2023 and continuing throughout the year.”
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