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You don’t get off a winning horse in the middle of the race

Jan 05, 2022

Good morning!

The Dow and S&P 500 are trying to hold ground after the Nasdaq got hammered yesterday as investors fled big tech. Talk about a gift!

Here’s my playbook.

1 – You don’t get off a winning horse midrace

For ten years I’ve heard “tech’s expensive, tech’s passe, tech’s overpriced, tech’s this or that. Yet Apple is up 509.62% over the past 5 years. Microsoft is up 423.57%. Tesla has tacked on 1,936.09%.

Now I’m hearing a fresh round of hand-wringing as investors bail on tech.

Next, a few years down the road I’ll hear “gee, I wish I’d bought that.”

It makes no sense.

Tech is the single largest executive spend for the next 5 years in the C-suite with A.I., digital payments, medical tech, robotics, operations and more coming online. 75-90% of executives in survey after survey say they’re going to spend trillions.

If you bail on tech, you are making the single largest investment mistake of your lifetime.

‘Nuff said. (Watch my take with the fabulous Dagen McDowell on Mornings with Maria earlier this morning)

2 – I’d be on the warpath if I were a GM exec

Toyota just became America’s top-selling automaker ending GM’s 91-year streak at the top. Industry insiders are circling with all sorts of defences this morning saying that the Japanese automaker shouldn’t get too comfortable. (Read)

What – exactly – GM are you going to do about it?

Toyota just outsold you because customers wanted to buy more of their vehicles than yours. Toyota outsold you because they managed the chip crisis better. Toyota just outsold you because customers perceive it’s an innovative brand. Toyota outsold you because they think they get better value.

Call me if you’d like some help.

Give me a car to drive that’ll change my mind.

I’d love to drive a GM product and be proud to do it.

3 – Beyond chicken

KFC is piloting Beyond Meat’s plant-based chicken for a limited time. An earlier test run in Atlanta in 2019 sold out in less than 5 hours. Other chains are testing “flexitarian” diets too. (Read)

Bacon without pigs. Burgers without meat. Now, chickens without chicken??

What kind of a world do we live in?

Answer … a hungry one.

Buying a few shares of Beyond Meat makes sense if you’re interested in next-generation foods like I am.

4 – Inflation so bad even Little Caesars is raising prices

The much-loved chain is raising prices on its $5 pizza for the time in 25 years much to the chagrin of college students and those with the munchies everywhere. The move is apparently to balance rising labour costs and commodities – read ingredients prices. (Read)

Inflation may not be transitory, but on a good note, it apparently does have more pepperoni.

5 – Peak real estate?

Adam Neumann – remember him? - said WeWork would shake up the world and it did … when it blew up spectacularly. Now he’s apparently got a new gig. Reports are surfacing that entities tied to Neumann have apparently purchased more than $1billion in apartment properties around the country. Friends say he’s told ‘em that he wants to build a company that “shakes up the rental housing industry.” (Read)

I’ll bet. Wish I could find a way to short this.