Amazon Vs Starbucks -- May 13, 2023

Locator: 44639C.  

I took this photo earlier today. It is the slide-out tray where our K-cups are stored, under the coffee-maker.

It's always stocked 1/2 with Starbucks and 1/2 with Amazon brand. Both my wife and I drink coffee. 

Today I noted that except for the last Starbucks K-cup we were out of Starbucks but the original stock (minus one) of Amazon brand remained.

I buy Amazon because it is by far the least expensive. I buy Starbucks because both my wife and I enjoy Starbucks. 

Very interesting.

Four Selected Equities -- One Month Action -- May 13, 2023

Locator: 44638BUD.  

For the month:

• F: down 6%.
• T: down 15%.
• BUD: down 5%.
• GM: down 6%.

CPI: 1913 - 2023

Locator: 44637ECON.  

Updates

May 15, 2023: Liz Sonders -- too many charts -- here's one -- 

May 14, 2023: no inflation? Link here. Hard landing?

Original Post

What is the first thing you note on the chart below regarding "peaks" and "valleys"?

Hint: there are exceptions, but none significant, and all inconsequential in hindsight:

• 1917, but just barely; in hindsight, inconsequential
• 1926, just barely; in hindsight, inconsequential
  
• 1937, a better example; in hindsight, very inconsequential
• 1982, again, but just barely; and, again inconsequential
  

Link here.

Profitability Of EVs -- May 13, 2023

Locator: 44636EVS.  

More and more articles talking about the difficulty making a profit in renewable energy.

This has been obvious among EV manufacturers for years. 

Exhibit A: Ford.

Link here.

Ford's EV sales grew a sizable 41% during the first quarter to 10,866 EVs, and its Model e segment lost $722 million in adjusted earnings before interest and taxes (EBIT) during that same time frame.

That essentially shows each vehicle that Ford's EV segment produces loses more than $66,000.

It's also fair to note that Ford's EV profitability is expected to get worse before it begins turning a profit in 2026. In fact, Ford Model e losses jumped from roughly $900 million in 2021 to $2.1 billion in 2022. Those losses are expected to reach $3 billion in 2023 as the company heavily invests in new models and factories to build scale and eventually turn billions in losses into billions in profits.

What does this mean?

It's now May 2023.

Ford's goal: 8% margin by YE2026.

YE2026 earnings call will be be mid-1Q27.

Three more quarters in 2023. Let's hope we have a soft landing.

Four quarters in 2024. Let's hope there's no recession.

Four quarters in 2025. Let's hope lithium plunges in price.

Four quarters in 2026. Let's hope no other EV manufacturers emerge.

That first quarter in 2027.

There will be sixteen earnings calls between now and the end of 1Q27 when Ford hopes to show margins of 8%. 

And analysts suggest the next few calls could be worse before they start to get better.

To put that in perspective, AAPL's margins:

• overall: 42%
• hardware: 37%
• services: 71%

Apple services will grow over time; hardware will have less growth but the percent that the services sector contributes to overall AAPL profits will increase proportionately more.

Accuracy And Tone In Media -- May 13, 2023

Locator: 44635MEDIA.  

Accuracy and tone in the media.

Link here.

Near the bottom of that short article is an interactive graph. 

To read the graph:

• the higher on the graph: the more "factual" based on the site's criteria;
• the farther right on the graph, less biased.

Example:

• ABC News: moderate left, "unbiased, well-researched," least opinionated of all media on the chart; 0.85 and 65%
  
• The Atlantic: moderate left, "unbiased, well-researched," l(as "unbiased" as ABC News but among the most opinionated, even more so than The New Yorker
• The New Yorker: left; very opinionated, as noted, and slightly less biased than The Atlantic
• Harvard Business Review: to the left on the chart
• MIT Technology Review: to the right on the chart
• New York Times: moderate left; 0.62 and 70%
• Axios: moderate left; 0.79 and 68% 
• Breitbart, Fox News: right; 0.66 and 55% (almost identical to CNN, left)
  

The interactive graph:

Sources closer to the top of the graph score higher in terms of their average Factual Grade. For example, those sites were more likely to use extensive evidence, be written in a neutral tone, and come from authors with topical expertise.

Part of our study also involved mapping out how each source scored in terms of our metric Writing Tone. This is a measure of how opinionated or neutral the language is. In this case, sources with scores closer to 1 (the right side of the graph) were more likely to use unbiased, neutral language in their reporting. Conversely, articles closer to 0 (the left side of the graph) were more likely to be opinionated.

How they determined the dot placement: 

To identify which news sources consistently produce the very best articles, The Factual used its news-rating algorithm to compare the publication output of 240 major sources. The Factual scores individual articles based on four metrics: writing tone, cited evidence, author expertise, and publication history. When combined, these metrics produce a score from 0 to 100 that we call a Factual Grade. Essentially, an article that is well researched, minimally opinionated, written by a topical expert, and from a reputable source will score highly.

Next, we analyzed ~1,000 articles for each source. These samples are enough to create a reliable estimation of each site’s typical article output. When mapped out spatially, this data produces an interactive picture of the entire English-language news ecosystem.