#67 - Buffet Buys Big Pharma, the Rotation Out of WFH Stocks, and the War On Our Freedoms of Speech.
|Nov 18, 2020|| 3|
In this week's episode of Reformed Millennials, we're talking about the crazy week in the markets and in the news. Buffet buying Pharma. WFH stocks like Peleton getting smoked and the crazy conservative rush to the new social media app - Parlar.
Broc and Joel do their best to help make sense of one of the craziest weeks on Wallstreet.
If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.
👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Markets broke records last week.
Bitcoin is at it again.
$BTC.X ticked $17,880, only 11.5% away from its highest price ever. Riot Blockchain ripped on no notable news. The stock gained 48% and traded more shares today than ever before.
Disney, at podcast favorite, topped revenue expectations. The company now has more than 73 million paid subscribers to its Disney+ streaming service.
Here are the stats: EPS: ($0.20) vs ($0.71) est.Revenue: $14.71B vs $14.20B est.Parks, Experiences, and Products: $2.58B -61% YoY
$DIS CEO Bob Chapek said this:
Even with the disruption caused by COVID-19, we’ve been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater long-term growth. The real bright spot has been our direct-to-consumer business, which is key to the future of our company, and on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers – far surpassing our expectations in just its first year.
$DIS was up 5% after hours.
Moderna’s COVID vaccine is 94.5% effective. This morning, the Company released the results of its Phase 3 study.
$MRNA said the vaccine remains stable for 6 months, can be refrigerated for 30 days, and stays at room temperature for 12 hours.
That’s great news for potential global distribution.
Juan Andres, Moderna’s Chief of Technical Operations, said:
We are pleased to submit these extended stability conditions for mRNA-1273 to regulators for approval. The ability to store our vaccine for up to 6 months at -20° C including up to 30 days at normal refrigerator conditions after thawing is an important development and would enable simpler distribution and more flexibility to facilitate wider-scale vaccination in the United States and other parts of the world.
One day at a time, ladies and gentlemen. Vaccinations could begin in the second half of December, Fauci said. Vaccinations are expected to begin with high-risk groups and to be available for the rest of the population next spring.
Read the press release here
🐣Warren Buffet and Berkshire’s New Bets on Big Pharma🐥
During the third quarter, the holding company revealed new stakes in big pharmaceutical names like AbbVie, Bristol Myers Squibb, Merck, and Pfizer — one of the major companies pioneering a COVID-19 vaccine.
According to a 13-F regulatory filing, Berkshire snapped up approximately 21.2 million shares of AbbVie (ABBV), a stake valued near $2.09 billion based on Monday’s closing price. Berkshire also purchased 29.9 million shares of Bristol Myers Squibb (BMY), 22.4 million shares of Merck (MRK), and 3.7 million Pfizer (PFE) shares during the quarter, the filing shows.
Airbnb seeks to raise $1 billion on the Nasdaq under the ticker “ABNB”. It has more than 4 million hosts that have earned cumulatively $110 billion from 825 million guests.
In 2019, Airbnb generated a Gross Booking Value of $38 billion, a 29% YoY increase from 2018; plus revenue of $4.8 billion, a 32% YoY increase from 2018. In the nine months of 2020, however, it had $18 billion GBV, down 39% YoY, and $2.5 billion revenue, down 32% YoY.
Silver Lake is the biggest holder of Class A shares (23.5%) while Sequoia Capital holds the most Class B shares (16.6%). Sequoia also has the highest percentage of voting power prior to IPO (16.5%).
In the “risk factors” section, Airbnbit lists laws like CDA, Section 230, DMCA, fair use doctrine, and the EU’s E-Commerce Directive as possible areas where the company could face liability.
Joel’s Airbnb Notes:
Airbnb’s biggest competition is Booking.com and on many metrics it’s much less profitable and struggles to scale as well as it should.
Quick comparison of per room night economics of BKNG vs ABNB It appears BKNG generates as much Contribution $/room night as ABNB does GP$/room night. And BKNG generates more EBITDA/room night than ABNB does Contribution $/room night.
🌊 Hottest Links We Read Last Week 🌊
Apple Silicon and the eclipse of Intel. As expected, Apple launched the first Macs using its own custom-designed SoCs (system-on-a-chip), replacing Intel with version of the chips it already creates for iPhones and iPads. These are outwardly identical versions of existing Macs (two laptops and the budget Mac Mini), not new designs (no touch etc), BUT - Apple's silicon is getting at least double the performance of Intel chips, with dramatically better battery life. This is partly the shift to ARM architecture, partly Apple execution, and partly TSMC's shift to a 5nm process. Intel has massively dropped the ball here - Apple designs these chips and TSMC manufactures them with a process Intel can't match. Over the next 18 months Apple will roll this out to the rest of the Mac line-up - expect the higher-end models to have even more dramatic performance leads. Three things to think about:
Apple will take a big bite out of the top half of the PC market, but this doesn't much matter for anyone else - PCs/Macs have not been the playing field for company creation for a long time.
Stellar execution from Apple - out-designing Intel (and Qualcomm) in semiconductors and shifting its operating system to a new platform seamlessly with all current software running unchanged
This is classic disruption: ARM and mobile are overtaking Intel's core PC business from underneath
In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.
Government researchers have confirmed that the steep decline in air traffic during the coronavirus pandemic has affected the quality of weather forecasting models by sharply reducing the amount of atmospheric data routinely collected by commercial airliners.
The top 1% of New Yorkers reported a combined $133.3 billion in income in 2018, according to new data released last month by the city’s Independent Budget Office. They paid $4.9 billion in local income taxes, making up 42.5% of total income tax collected by the city.Those numbers show how the decisions of a tiny number of millionaires and billionaires could have huge fiscal consequences for a city of more than 8 million people. In 2018, 1,786 tax filers earned more than $10 million or more.
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