Thursday Deep Dive: Lemonade
Watch on YouTube Listen on Spotify *Follow Ian here. This week for our Deep Dive, Ian, Ryan, and I discussed Lemonade. The company is attempting to disrupt the insurance industry with a product that is digitally-native, AI-powered, and fixed-fee focused instead of the traditional insurance companies who have many offices and human reps selling the product. Right now Lemonade offers home, rental, and pet insurance and onboard customers with “Maya,” their intake chatbot. “Jim”
Episode 89: Interview With Will Hershey
In episode 89 of Chit Chat Money, we had a fantastic chat with the founder of Roundhill Investments, Will Hershey. Roundhill Investments has two thematic ETF products, the first being the NERD or eSports ETF. We discussed the ETF and gaming industry at length during the interview. The second thematic ETF Roundhill sponsors is the BETZ or Sports Betting ETF. It allows investors to get broad exposure to numerous sports betting companies while only having to own one security. Yo
Are We Discounting Cannabis Stocks too Much?
I used to be a major bear on cannabis stocks. It wasn’t a particularly bold stance (remember Tilray trading at an EV/sales of 420 in 2018?), but I was vehemently on the other side of the pot stock bubble of 2018. If you don’t believe me, here is a poorly written blog post to timestamp my take. Since the 2018 peak, the North American Marijuana Index, which tracks the largest public companies in the industry, has fallen from 300 to just above 100. That’s is awful relative to an
Are Subscription Businesses at Risk in a High Inflation Environment?
People are worried about inflation. You can go on CNBC, Bloomberg, or the WSJ and every day there are articles with headlines like this one: “As long-term Treasury yields rise, investor Peter Boockvar warns inflation would spark the ‘market’s worst nightmare’“ The headline is clickbait (and just a tad bit of fear-mongering), but it is telling the truth: investors are worried about inflation. Sure, some have been worried and wrong about it since 2009, but this time it might be
Thursday Deep Dive: Fiverr
Watch on YouTube Listen on Spotify *Follow Ian here. This week for our Deep Dive, Ian, Ryan, and I discussed Fiverr. The company is based in Israel and is an online marketplace that connects freelancers to potential clients. It is called Fiverr (pronounced “Five-er”) because the original idea was to get a service for as little as five dollars. Using Fiverr, independent developers, designers, and other remote workers post their qualifications and what jobs they are looking for
Episode 88: Talking Software with Kermit Capital
In episode 88 of Chit Chat Money, we talked with Kermit Capital, a data analyst and investor we know from Twitter. Kermit has worked at numerous large companies and brought some fantastic insights into the software industry. After talking about his overall investment strategy, the three of us discussed Alteryx and Slack at length. I learned a ton from this chat and think you will too. YouTube Link (Interview is audio-only) Spotify Link Screenshot Summary Brett’s news story: W
Airbnb’s Secret Weapon
Since Airbnb is going public soon, this post is going to stay short. I want to wait for all the financials to become available because I think this new trend is the biggest thing to hit the travel market possibly since AirBnB itself. My thesis for Airbnb’s next catalyst revolves around the growth of a new type of worker called a “digital nomad”. Here is the definition according to Wikipedia: “Digital nomads are people who use telecommunications technologies to earn a living a
Fundamental Analysis of Sony
Watch on YouTube Listen on Spotify On this Sunday’s Fundamental Analysis show we discussed Sony. Here is a screenshot summary of the episode: What is Sony? Sony is a Japanese conglomerate with a focus on video games, electronics, semiconductors, music, and movies. When were they founded? In 1946 by Masaru Ibuka. Valuation: EV of $78.9 billion, EV/FCF of 8.6, EV/EBIT 10.5 (as of recording) Latest Earnings: revenue down 4% YoY, OI down 2.1% Our Future Growth Opportunities: Imag
Thursday Deep Dive: Unity
Watch on YouTube Listen on Spotify This week, Ryan, Ian, and I discussed Unity. Unity, from a thousand-foot view, enables creators to bring things to life using 3D technology. Through their “create” and “operate” business lines they enable software developers of all sizes to more easily build and then monetize interactive content. The company got its start in gaming with the Unity engine but has since expanded to engineering, construction, design, even filmmakers use the crea
Robinhood has Major Problems. Can They be Fixed?
Robinhood’s slogan is “Investing for Everyone.” I have a revision that actually fits their business strategy: “Robinhood: Gambling for Everyone.” The company has turned investing, a way to build wealth through the power of compound interest, into a gamified app that treats the market as a virtual casino. Users are nudged to act irrationally through the same psychological tricks social media companies implement to keep us glued to our devices. Trust me when I say this is not g
Fundamental Analysis of Stitch Fix
Watch on YouTube Listen on Spotify On this Sunday’s Fundamental Analysis show we discussed Stitch Fix. Here is a screenshot summary of the episode: What is Stitch Fix? An online styling service that combines algorithms with a human touch to “style” clothes for its customers. When were they founded? In 2011 by Katrina Lake. Basic Valuation: EV of $2.6 billion, gross margin 44%, current ratio 2.2 Latest Earnings: Net loss of $44.5 million, revenue growth of 10.6%. Our Future Gr
Own Companies That Feel Inevitable
I saw a tweet the other day that said “invest in companies that feel inevitable.” The author is slipping my mind, but whoever it was, thank you, but I have an addendum to improve it: “Invest in companies that feel inevitable but are misunderstood by the market” “Inevitable” companies (or, maybe, Thano’s companies?) have historically treated investors kindly if bought at the right price. But what do I mean by an inevitable company that is misunderstood? That’s a tough question
What is Spotify’s Endgame?
Big news out of Sweden this week. Spotify, everyone’s favorite audio streamer, has gotten exclusive rights to the number one podcast in the world, the Joe Rogan Experience (JRE). This is a huge deal. Not just for Rogan, who will likely net over 100 million on the deal (exact numbers are not public), but for Spotify’s long-term ambitions. CEO Daniel Ek started talking in 2019 about the company’s strategy outside of music – “owning the ear,” as he has called it – but nobody tho
The Three Levels of Compounding
Someone on fintwit once said: “Compounding is the highest form of living” I can’t remember who exactly said it, and it has probably been repeated many times before, but for some reason, that quote has stuck with me. I probably think about it once a week. The definition of compounding money is “the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.” But compounding doesn’t just apply to money.
Why I Sold My Shares of Disney
I used to be a big fan of Disney stock. I thought because they had a tremendous moat and little-to-no competition that they would be a market outperformer. The “monopoly on happiness” as people like to say. But when the facts change you have to allow your opinions to change with it, and the pandemic has changed a lot about Disney’s business. In this post, I’ll go through Disney’s four business segments (Media, Parks and Products, Studio, and Direct-To-Consumer) and analyze ho
Shopify Has Gotten Ridiculous
I sent out this tweet Friday morning: “$SHOP now with an EV/sales of 36, meaning like 5 years of 50% growth is already priced in. Why would anyone hold shares here?” $SHOP now with an EV/sales of 36, meaning like 5 years of 50% growth is already priced in. Why would anyone hold shares here? https://t.co/QRFEV8BGfP — Brett Schafer (@CCM_Brett) April 17, 2020 I expected some interesting responses, both bullish and bearish, to this question. What I did not expect was an onslaug
Why I’m Not Selling My Shares of Teladoc
I got lucky. Heading into this crisis, 5% of my portfolio was in one of the few companies that would benefit from a pandemic: Teladoc Health (ticker: TDOC). The stock is up 71% in the past month due to a huge increase in demand for virtual healthcare, and it has officially become one of the “hot” stocks talked about on CNBC. I didn’t buy shares for either of those reasons, but hey, I don’t mind the returns. (Twitter thread on Teladoc’s conference call) Teladoc’s business has
The Too Hard Pile
“Charlie says we have three boxes: “In,” “Out” and “Too hard.” You don’t have to do everything well. At the Olympics, if you run the 100 meters well, you don’t have to do the shot put…” – Warren Buffett Investing in individual companies is easy to do but hard to be good at. Online brokerages with zero commissions have made it so you can buy stocks at the click of a button. But it doesn’t guarantee you will make money doing it. Statistically, very few investors will outperform
Why I Sold My Shares of JD.com
“Only when the tide goes out do you discover who has been swimming naked” – Warren Buffett. Buffett likely wasn’t the first person to ever say something like this (as with all vague quotes), but the meaning holds true nonetheless. What he is eloquently saying is, that, in financial markets, when shit hits the fan, you realize who has just been bullshitting this entire time. At this point in the cycle, those bullshitters reside in China. Last week, Luckin Coffee, one of the ho
Revolve: The New Macy’s
We all know traditional retail is dying. Well, specifically, traditional department stores won’t be around much longer. Macy’s, JC Penny, even Nordstrom’s. They’re all dead stocks trading. They didn’t evolve for the digital age and are now left with giant empty stores in giant empty malls across America. But just because these department stores are going out of business doesn’t mean people are going to stop shopping for clothes. Yes, in 2020 there will be a slowdown in appare