Buffett 🤝 Call Her Daddy

Nike investors are poppin’ bottles on news of a new CEO, while Warren Buffett and Alex Cooper are working together to make SiriusXM great again. FedEx isn’t delivering packages, earnings, or anything else, and the nation’s second-largest homebuilder struggles to monetize its market.                                                                                                                                                                                                                                                                                                                                                                                                                 September 23, 2024 | [Read Online]( Silver banana goes to… In this issue of the peel: - The global central banks are out here playing "copy JPow," with some holding steady, others cutting, and Japan just trying to act like they’re not hungover from the last decade of easy money. Meanwhile, England still hasn’t figured out how to fight inflation (shocker). - Nike investors are poppin’ bottles on news of a new CEO, while Warren Buffett and Alex Cooper are working together to make SiriusXM great again. FedEx isn’t delivering packages, earnings, or anything else, and the nation’s second-largest homebuilder struggles to monetize its market. - Donald Trump went to a digital asset-themed bar and bought a burger using BTC. Yes, that is a real, factual statement of an event that occurred last Wednesday. Read more about—and its implications for BTC and the Presidential election—below. Market Snapshot Banana Bits - Looks like the government—and Secret Service—might soon get the funds needed to [actually operate properly](. - The market’s view of recession odds is [starting to increase](. - According to OpenAI CEO Sam Altman, ChatGPT took AI from level zero to one. Their latest announcement [took AI from one to two](. - …from the same thread as the above link, check out Apple’s [newly released Siri updates](. - 23andMe is on the ropes as all 7 independent directors resign, and the CEO seeks to take the firm private by purchasing [all outstanding shares herself at $0.40/sh](. - Someone check on the entire Danish economy because Novo Nordisk [shares are tanking on bad study data](. - One of Chewy’s largest shareholders is slashing its [holdings in the pet retailer](. The PE Associate’s Guide to Smashing Investment Memos If you are an associate in private equity or venture capital (or want to be), getting your investment memo game in top form is key. There’s a reason for that: great memos justify investment decisions, showcase analytical strengths, and can boost stakeholder confidence. FactSet worked with PE/VC veterans to create a handy guide for PE associates who are eager to streamline their memo process and impress senior management. [Get your free copy of the guide,]( and level up your work today. Macro Monkey Says What Are They Up To? After going undefeated in Super Bowls, NBA Championships, and World Wars, sometimes it’s easy to forget the U.S. isn’t the only country in the world. Especially in economics, given that the U.S. makes up just 4% of the global population yet accounts for ~26% of global nominal GDP. But, my sources tell me other countries exist, and—get this—they have their own interest rates, central banks, and even their own JPows. Let’s get into it. What Happened? It was a busy week for central banks last week. This multiple-choice test seems challenging between cutting, raising, and holding rates steady. A lot of the time, central banks will just copy off of the Federal Reserve. If JPow selects A for “Hold,” most will follow suit. However, JPow might be more of a renegade than the class nerd going forward. [Source]( As we [talked about recently](, when the U.S. cuts rates and other central banks hold steady, the U.S. Dollar will decline relative to the currencies issued by those central banks. As we can see above, this trend has been going on for a while. And it was all in anticipation of what just happened last week. All central banks are equal, but some are more equal than others, of course. That’s why the Fed is the most influential around the world, followed by the ECB (Europe), BOJ (Japan), BOE (England), and the PBOC (China). Each of those central banks met last week to monitor and (potentially) update their monetary policy. Let’s see what they did. Europe: The ECB is the all-time champ of playing follow the leader. Technically, they moved first, cutting rates by 25bps on Thursday, September 12th. Europe’s rate cut was just as anticipated as the Fed’s, but not for the same reasons. GDP growth is a major concern in the Eurozone right now, leading the ECB to cut rates in an attempt to spur more rapid growth. In fact, along with the cut, the ECB lowered its expected full-year GDP growth rate for 2024 down from 0.9% to 0.8%. While the Fed is looking to stop GDP from slowing, the ECB is poking its economy with an interest rate stick to try to make it do something. Japan: Like my blood alcohol level last Saturday night, Japan’s equivalent of the Fed Fund’s rate is at its highest level since 2008… a whopping 0.25%. In fact, the rate actually sits at “around 0.25%” after the Bank of Japan decided to hold interest rates steady. Japan has a weird economy. The ultra-monetary-easing enjoyed over the last decade and a half is coming to an end as the central bank looks to normalize rates as the nation’s economy is growing at “a pace above its potential growth rate.” That’s a recipe for inflationary disaster. So, the BOJ is undergoing an intense pivot from doing the macro equivalent of a rain dance to try and spur some inflation since the GFC to trying to quell the beast before it arrives in 2024. England: Meanwhile, England already has an inflation problem… and it won’t go away. A day following the Fed’s rate cut, the Bank of England decided to hold rates steady in pursuit of a “gradual easing” of monetary policy. [Source]( Headline and core inflation are in roughly acceptable territory, but services inflation has been a b*tch. It doesn’t help that services make up 80% of the U.K.’s economy, but with GDP growth expectations at 0.3% per quarter, trimming inflation without cutting into GDP growth is a challenging tightrope to walk. Cuts are expected to continue in September despite the inflation of aggressive services. Maybe if we got the dental industry booming in this orally underserved country, GDP growth would finally get a real boost! China: Finally, China followed suit in maintaining its current level of the one-year loan prime rate at 3.35% and the five-year at 3.85%. This was unexpected. China has been lowering rates for some time as the country faces debt and demographic challenges, so market watchers were expecting another cut, especially on the heels of the Fed’s 50bps cut. Not cutting threatens a spike in the Yuan compared to the USD, deteriorating China’s competitive position on exports. Growth overall has slowed as well, with recent data on the consumer and industrial side of the Chinese economy all entering near-zero or negative growth territory. The Takeaway? Now that the pandemic is gone, unique macro challenges are presenting themselves in economies around the world. The Fed is in a fortunate position as the issuer of the global reserve currency. However, the Fed’s cuts only make the problem harder for other countries. But China’s total exports and England’s GDP growth rate, surprisingly, aren’t part of the Fed’s dual mandate. JPow is locked in on inflation and unemployment, and other central banks have to figure it out from there. What's Ripe Nike (NKE) 6.84% - When a shakeup in the CEO position triggers a big stock move, we usually wonder if it's a middle finger to the person leaving or a celebration of the new top dawg. - In this case, there’s no question. Shareholders are giving a yuge middle finger to exiting CEO John Donahoe after shares fell >15% during his tenure and are off >50% from their peak. - Nike is in the midst of a sales slump, down 2% YoY in Q2, as the legendary sneaker firm sheds market share to upstarts around the world. The latest quarterly earnings are only a week and a half away, and damn, I can’t wait. SiriusXM (SIRI) 3.87% - Apparently, Warren Buffett is a big fan of Alex Cooper’s Call Her Daddy and some of Sirius XM’s other notable assets. - After inking a deal with the “Barbara Walters of Gen Z,” Berkshire Hathaway just increased its ownership stake in SiriusXM to 31%. - Shares trade at a heavy discount, and while growth remains low, the potential is there driven by podcasting. I wonder if Charlie was part of the #DaddyGang too. What's Rotten FedEx (FDX) 15.23% - FedEx exited its traditional shipping business for sh*tting the bed last quarter. The company’s ongoing restructuring hasn’t helped much so far. - Net income fell 26% YoY while revenue slipped 0.4%, or $102mn. Margins fell, operating cash flow dropped 47%, and—needless to say—results missed across the board. - The company lowered earning guidance for FY’25 by 4% while cutting revenue estimates from a “low to mid-single digit” to a “low single-digit” increase. Yikes. Lennar (LEN) 5.33% - Mr. Market could use a therapist. Then, they’d be able to enjoy the moment once in a while instead of focusing solely on the future, which would’ve helped Lennar on Friday. - The nation’s second-largest homebuilder saw its shares get demolished despite meeting expectations on strong orders, deliveries, and upbeat commentary. - Analysts cite anticipated margin declines amid rising demand for lower-priced homes, increasing as a % of Lennar’s revenue mix for the selloff. Thought Banana A Former President and a BTC Walk Into a Bar… …and a band of sexually frustrated meme-coin maniacs go crazy as the former President trades HODLing BTC for HODLing a burger. This spread trade of Trump shorting BTC to go long a slab of red meat will go down as either one of the most pivotal or most cringe-inducing stories in the history of currency. Let’s dive in. What Happened? Wednesday evening, after a long day of rescuing pets and avoiding assassination, former President Trump made a campaign stop at a “cr*pto-themed bar” in New York’s Greenwich Village. Can’t believe that’s a factual statement, but what unfolded next could be history in the making.  At PubKey, the spot for the future Warren Buffetts and Ben Grahams among us, the bar deco sports digital asset trading advice and vandalized dollar bills. So, when the former President went in, announced, “Who wants a burger?” and proceeded to pay for the food in BTC, the place went wild. Being a digital asset-themed bar in New York, I can only imagine the “burger” was one of those vegan, soy, testosterone-depleting, Geta Thunberg things Beyond Meat tries to pretend tastes like real food, but that’s not the point here. The point is this: a former holder and candidate for the office of the U.S. President just bought something on American soil without using the U.S. Dollar. Wow. The implications are endless, but the reason is clear. Trump has pivoted from a position viewing BTC as something that “seems like a scam” to a full-throated enthusiast in a bid to get this disaffected, futuristic cohort to check his name at the ballot box in November. If he’s bullish on the asset class, Wednesday may not have been the ideal moment to execute this trade, given that BTC has had quite the run-up since the Fed cut rates earlier that day. [Source]( The Takeaway? This is further evidence of the staying power of BTC and other digital assets, demonstrating how these assets can actually be useful outside of pump-and-dumps. It’s also insane that a former and hopeful U.S. President used a competing currency to the U.S. Dollar to effect his purchase at a time when dollar dominance has never been called more into question. It was one small payment for man but one (potential) giant leap in the legitimacy of digital assets. The Big Question: What role, if any, will BTC play in our lives in 5, 10, 50, or 100 years? Can the cr*pto vote really help push a candidate over the finish line? Banana Brain Teaser Previous Half of a large pizza is cut into 4 equal-sized pieces, and the other half is cut into 6 equal-sized pieces. If a person were to eat 1 of the larger pieces and 2 of the smaller pieces, what fraction of the pizza would remain uneaten? Answer: 17/24 Today A rope 20.6 meters long is cut into two pieces. If the length of one piece of rope is 2.8 meters shorter than the length of the other, what is the length, in meters, of the longer piece of rope? Send your guesses to vyomesh@wallstreetoasis.com ❝ The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Satoshi Nakamoto How Would You Rate Today's Peel? [All the bananas]( [Meh]( [Rotten AF]( Happy Investing, David, Vyom, Ankit & Patrick [Free Month of Access to WSO Company Database]( Share The Peel You currently have 0 referrals, only 1 away from receiving Free Month of Access to WSO Company Database. [Click to Share]( Upcoming Rewards For each referral you drive, you will unlock rewards when you hit milestones. 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