I don't want the blog to get too far afield of the Bakken, so a lot of my political, earnings, non-Bakken posts will be posted elsewhere. I will link them later. But I have to post this here just to get started. Much of the rest will be posted elsewhere. I will provide the links when posted.
This is not an investment site.
Everything below pertains to investing, not trading. Investing means having a 30-year horizon, not a 30-day horizon, or for some, a 30-hour or 30-minute horizon.
Earnings: there were some common themes coming out of the earnings reports from yesterday afternoon: AAPL; Amazon, Roku, Robinhood, and Intel.
- getting crushed
- even with good earnings, share prices of great companies are being crushed;
- with bad earnings, share prices of great companies are really being crushed;
- with no earnings being reported by meme companies, shares are imploding; some could go to zero
- moats:
- meme companies most at risk: those with no moats; great examples of companies with no moats:
- DoorDash, UberEats, GrubHub
- Teledoc: having no moat will kill this company
- Zillow, Rocket Mortgage,
- the NASCAR analogy:
- great companies are lapping the also-rans
- at least a couple of analysts are patting themselves on the back for "warning" us about Amazon; but think about this:
- one assumes Amazon has some of the brightest logistics folks on board
- if Amazon is struggling, imagine the others
- companies like Amazon have really, really deep pockets; they will spend their way out of this and lap those companies without that money
- like NASCAR, the great companies will keep getting better; the gap between the great companies and the others will widen
- the-bear-chasing-two-runners analogy:
- if Apple is having supply chain problems, imagine how tough it is for their competitors
- what does not kill you, will make you stronger
- a lot of meme companies are going to get killed
- great companies will only get stronger
- the faster runner survives; the slower runner gets eaten by the bear
- energy: if there was one huge mistake by delivery companies like Amazon:
- it was not transitioning to EVs fast enough;
- even transitioning to CNG (if they did) appears to have been a mistake;
- last mile (more appropriately, last ten-mile) delivery companies were perfect niches for EVs.
- they didn't switch quickly enough -- and I'm talking about ten years ago -- before Covid and China and Ukraine and Biden and whatever else comes next
- Robinhood: another company with no moat
- Roku: another NASCAR analogy company: Roku.
- Seems to me Roku is the Danica Patrick or the Bubba Wallace of the streaming companies.
- Roku, Danica, and Bubba get/got a lot of headlines; once in awhile they even do great, but in the big scheme of things, they always finish, at best, near the middle, and generally at the end of the pack
- there was a reason Danica left racing when she did;
- Bubba's backer (yes, singular) has deep pockets so Bubba will be around for awhile;
- Roku? time will tell.
- so those are the four themes coming out of yesterday's earnings from five well-known tech names:
- meme stocks will get lapped when times are challenging (the NASCAR analogy)
- companies with no moats will disappear
- the bear-chasing-two-runners analogy: if companies like Amazon, Apple are challenged with supply chain issues and price of energy, imagine how their competitors are being affected
- energy
- Cathie Wood memes have jumped the shark. Just to throw that in so folks don't think I missed it.
- oh, by the way, there's another theme that is bubbling to the surface, impacted Amazon and Ford: EVs
- EVs are going to be kill some of these companies
- this is going to be a hard nut to crack
- a reader sent me a note regarding CNN+ yesterday, suggesting that was the worse business decision since Edsel and New Coke. I was confused by the note; I will come back to it later, but it has a great tie-in with the EV story.
Something to think about: share buybacks --
- over the past year, Amazon actually issued $10 billion in more shares; that was over the past year;
- Apple announced another $90 billion in share buybacks; adds to previous buyback programs
- speaks volumes; links here for Apple:
- speaks volumes; for Amazon, from March 22, 2022 --
- Amazon approved a $5 billion repurchase program in 2016.
- Over 2016, 2017, 2018, 2019, 2020 and 2021, Amazon spent … nothing. It made no repurchases.Mar 22, 2022:
- remember, Tesla has done the same thing: has issued more shares over the years
- whatever one thinks about share buybacks, it's a huge discriminator between companies when deciding where to put one's investing dollars
- all things being equal including a hunch that both Apple and Amazon will be huge companies thirty years from now, what one metric might help you decide between Apple and Amazon? Stock buybacks?
Something to think about: dividends --
- Apple pays a dividend (albeit not much)
- Amazon: has never paid a dividend and is likely to never pay a dividend
Something to think about: AAPL and dividends and buybacks
- think about all the money Apple is not sending out in checks every quarter -- buying back shares and really, really being disciplined when it comes to dividends in the first place -- but all those shares being bought back -- dividends not being paid on those
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