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Greetings from seat 9D as I wing my way back home!

Apr 06, 2023

Good morning! 👋

The markets performed about as expected yesterday, with the Dow gaining footing even though the S&P 500 and Nasdaq both fell. This morning, though, they’re down a bit as more economic news weighs on traders.

The conjecture is that the markets are coming to terms with signs that the US economy is weakening.

Is??!!

That’s a foregone conclusion—and, of course, an opportunity.

Here’s my playbook.

State of the freight

Businesses are split on the ongoing inflationary impact from supply chain challenges, but interestingly, there is NO doubt whatsoever about storage costs.

Only 1/3 of supply-chain managers expect warehouse inventories to return to normal before 2024, according to a recent CNBC survey. (Read)

More than 50% say supply storage costs are negatively impacting margins—which, logically, they intend to pass on to consumers.

Ordinarily, I’d be thinking about UPS/FedEx... but in this case, there’s another problem.

Cargo theft.

All that schtuff sitting around is an easy target for those with nefarious motives. The average loss is $214,000, with Food and Beverage items now at the top of the list, according to Travelers. Perhaps not surprisingly, Los Angeles is the top target, but the crime is spreading to so-called “internal” distribution systems, meaning those across the rest of the US. (Read)

Hmmm.

Amazon axes its online bookseller

Wow!

I never thought I’d see the day when Amazon would shut down Book Depository, a global online bookseller it owns. Founder Jeff Bezos, in case you don’t recall, began Amazon by selling books. (Read)

But here we are.

CEO Andy Jassy said that the cost-cutting will allow AMZN to “invest robustly in the key long-term customer experiences that we believe can meaningfully improve customer’s lives and Amazon as a whole.”

I’ve got two questions:

A) Who writes this crap and thinks it passes as meaningful??!! Buzzword bingo does not pass for management competence.

B) Just how bad is it that Amazon is ready to gut what has been a foundational business? I get that businesses change, but Amazon bought Book Depository in 2011 (which was founded in the UK in 2004).

Which is why I won’t be buying shares anytime soon. In fact, I think there’s a growing case to be made that shorting Amazon could be remarkably effective. Or simply buying put options.

Jassy isn’t Bezos.

Stocks that hike dividends tend to do better

The data is as straightforward as it sounds. Companies that boost their dividends tend to outperform over the next six months. (Read)

That’s why a) owning dividend producers is critical and b) dividend stocks are a foundational element in One Bar Ahead®, my paid research journal.

I’ve recently recommended two. Upgrade to Paid

Google says “We can beat NVIDIA AI supercomputers”

NVIDIA dominates the AI market with a 90%+ share when it comes to training AI models and their deployment. But Google says its Tensor Processing Units (TPUs) are 1.2–1.7X faster and use 1.3–19X less power. (Read)

It’s spin control.

NVIDIA CEO Jensen Huang notes that Google didn’t compare results to their latest chip—the H100. What’s more, NVIDIA chips are still the most efficient on the planet.

Long NVDA/short GOOG.

Hawaii’s paradise will come at a higher cost

I lived in Hawaii for a few years in the early 1990s and loved every minute of my time on the islands. Yes, it was expensive even back then, but things could really take a hike now.

Hawaii is reportedly considering a year-long “eco” tax—not unlike Venice, Italy, or Ecuador’s Galapagos Islands—to pay for marine management and ecotourism.

Not that I’m surprised. Paid golf bookings are down 30% over the past decade. Hiking, especially in rural areas, is up 50%. The once peaceful trails I loved so much are anything but that these days.

I wonder if there’s a way to short stupidity and go long hiking boots?

Doh!