Welcome to Beating the Odds. Our goal is to create and curate content on investing, strategy, tech, fashion and anything else we find interesting.
With encouraging therapeutics and vaccine news continuing to surface, it feels like we should get back to some level of normalcy around mid-2021 (fingers crossed). Gavin Baker mentioned this earlier in the week and I think it’s an increasingly likely outcome:
⚡️ Quick links
CNBC — Retail trade group sees holiday sales up 3.6% to 5.2%, posting ‘strong finish’ to 2020 in spite of pandemic
Protocol — Snapchat is TikTok is Instagram is Facebook is Snapchat. What do we do now?
Bloomberg — Electric Carmakers Are in a Stock Market Bubble
Mining Weekly — US rare earths miner MP profit surges in first results post listing. MP released a video that does a good job explaining their business. Here's the Q3 earnings report showing strong, profitable growth
SF Business Times — Metromile to go public through 'blank check' company. The deal includes funding from Mark Cuban and SPAC King Chamath Palihapitiya. Additional details in the investor presentation
Barron’s — The Dow Broke 30K Because Biden Is Bringing Yellen and Stimulus. For equity owners, Jerome Powell leading the Fed and Yellen heading the Treasury is a duo we haven’t seen since the likes of Shaq & Kobe (RIP Bean)
📊 Charts of the week
From Ryan Detrick:
Some small caps I own and am currently digging into, along with research links:
InfuSystem Holdings Inc. (INFU) — the leading provider of infusion pumps and related services to hospitals, oncology practices, surgery centers, and other alternate site healthcare providers
3Q’20 earnings + webcast and earnings call transcript
InfuSystem (INFU) - Sidoti Virtual Conference Presentation November 2020
PAR Technology Corporation (PAR) — a leading global provider of software, systems, and service solutions to the restaurant and retail industries. Also supplies the US Government with intelligence, surveillance, and reconnaissance solutions and mission systems support
3Q’20 earnings & 3Q earnings call transcript (the Q&A with Adam Wyden was especially great)
CEO Savneet Singh’s June 2020 letter to investors & August 2020 Investor Presentation
Greenhaven Road Capital’s Q1 2019 investor letter explaining their investment thesis
Voss Capital’s investment thesis from August 2019
Adam Wyden owns a 10% stake through his hedge fund and frequently posts about PAR on his Twitter
Nekkar ASA (NKR.OL) — Oslo-based company that offers handling solutions, port equipment, and access systems for the marine and offshore industries
High-quality write up from Jörns Bullmarknad on Twitter
Nordstrom is back from the dead as money continues to flow into reopening stocks. Nice 100% move over 3 weeks after announcing better than expected Q3 earnings last Tuesday.
One of the most interesting quotes from Nordstrom’s earnings call :
Our third driver of growth is to increase the velocity of our digital business. In 2019, digital made up 33% of sales and accelerated to 54% this year. We view this as a fundamental shift in shopping behavior and we are well positioned to support our customers across both Nordstrom and Rack with a scalable platform that has been built to support many years of growth. We also know that we must translate the heritage of service that defines us more effectively in this digitally connected world. This means delivering personalization at scale by creating greater linkages between the digital and the physical experience.
During the quarter, virtual styling accounted for roughly 30% of all styling appointments. And sales from personalized looks created by our salespeople tripled in volume from the second quarter. Going forward, we see opportunities to further leverage these digital capabilities to increase the connection between our salespeople and customers.
Similar themes come to mind when I think about the growth drivers of retailers successfully navigating the “new normal”—Nike, Target, and lululemon for example. Even digital-first players like Alibaba are adding offline outlets to adjust accordingly.
Gavin Baker’s Medium post on category leading brick and mortar retailers as the biggest long term covid beneficiaries is a must-read if you haven’t already.
📚 Good reads
Of Dollars And Data — We Begin Our Lives as Growth Stocks, But End Our Lives As Value Stocks
Outliers — Anthony Wood of Roku Inc. What makes Roku's Anthony Wood an outlier CEO? For a while, Roku has been competing with three big tech companies (Google, Amazon and Apple) and staying ahead in that race despite being much smaller
Rowan Street Capital — Q3’20 Investor Letter. Includes their investment thesis on Alibaba
Mule’s Musings — The Tech Monopolies Go Vertical. Mule’s Twitter account is a great follow if you want to stay updated on the tech and semiconductor space
Om Malik — Why we are underestimating Zoom & its impact
MIT Investment Management Company — MIT’s endowment managers reflect on their accomplishments and mistakes and provide some thoughts about the future. Published in February 2017, but packed with relevant ideas
Bain — Technology Report 2020. Examines how technology companies are investing in AI & automation, the hybrid cloud, IoT, flexible supply chains and virtual sales
VentureBeat — Nvidia CEO Jensen Huang interview — Antitrust, openness, and the PC-console war
🎧 Press play
Masters in Business — Dennis Lynch on Global Portfolio Management
Great discussion on finding great companies, portfolio management, culture & investing across industries. Dennis and the Counterpoint Global team have a long track record of outperformance.
Wall Street Journal recently crowned Dennis the best U.S. mutual fund manager. Check out Morgan Stanley’s website for their holdings and investment insights.
Invest Like the Best — Todd McKinnon – Creating and Defining a New Market Category – [Founder’s Field Guide, EP.7]
In this episode, Patrick spoke with Todd McKinnon, co-founder and CEO of Okta, the leading provider of identity management for enterprises. Enjoyed their conversation, especially Todd’s stories reflecting on Okta’s early days and his vision for the company and digital identity more generally.
Panic with Friends - Howard Lindzon — Invesco’s John Hoffman and Nasdaq’s Sean Wasserman On the Mother of All ETFs and Investing in Innovation
Really cool to hear from the guys behind some of the most prominent investment products out there. QQQ & QQQM > SPY!
📺 Videos of the week
The Knowledge Project — Semiconductors: The Ultimate Bargaining Chip
Must see TV for anyone interested in understanding semiconductor manufacturing, the closest thing to magic in this world. History, geopolitics and technology converge in one of society’s most important industries.
Lululemon founder on athleisure wear: Covid and digital has moved things forward 10 years
Netflix vs. the World
I watched this on Amazon Prime Video (lol) and thought it was one of the best documentaries I’ve seen in a while. Lots of insider interviews and it was interesting to hear former Blockbuster executives’ side of the story.
Big earnings week coming up for the cloud names. Does Zoom pull off another blowout quarter? We’ll also see Snowflake’s first report as a public company.
One last stock idea to wrap up this week’s note.
Disclosure: None of this is investment advice. I own MP, INFU, PAR, JWN, BABA, LULU, ROKU, OKTA, and PAGS shares.
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