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- Weekend Investor: The Week That Was
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I hope you had a wonderful week!
Yesterday ended the third calendar quarter of 2023. That means we will start to hear financial results for companies as early as next week. I’ll give a quick preview of what I’m looking for below.
Before we get to the week that was, here’s something you may be interested in!👇
It Took 15 Years to Disrupt the iPhone🤳
Tech Startup With Traction: Turn your phone from a cost to an income source. Intriguing idea, isn't it? This is why, we have our eyes on the launch of Mode Mobile’s Pre-IPO Offering. It’s the latest in a series of impressive raises among smartphone innovators, likely spurred by Apple’s recent $3+ trillion valuation.
Mode saw 150x revenue growth from 2019 to 2022, a leap that has made them one of America’s fastest growing companies. Mode is on a mission to disrupt the entire industry with their "EarnPhone," a budget smartphone that’s helped consumers earn and save $150M+ for activities like listening to music, playing games, and ... even charging their devices?!
Over 11,000 investors already acquired shares — and with only days remaining prior to their bonus tier closing, allocations are limited.
*Disclosure: Please read the offering circular at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation CF Offering.
In case you missed it
Here’s some of the content I put out this week. Enjoy!
Peloton + lululemon: Peloton will become the digital content provider for lululemon’s memberships and lululemon will be Peloton’s apparel partner. For both, a cost center becomes a profit center, which should be good news.
5 Stocks to Buy and Hold Forever: Some stocks you can just set it and forget it.
YouTube is the But Threat to Disney: When it comes to streaming, the biggest challenge to Disney’s ambitions is YouTube.
Compounders Daily: We covered Alphabet, Airbnb, Axon, and Chipotle this week.
Earnings Seasons Mini Preview
Earnings season is starting soon and that means the market gets a clearer idea of financial conditions for the companies we own. There are a lot of moving pieces but the broad theme the market will be looking at is the impact of higher interest rates, resuming student loan payments, and stubborn inflation. Management comments and guidance will be critical to answer these questions.
Broadly, here’s what I’m looking for from Asymmetric Universe stocks.
Strategic progress: Are the companies we own making progress on generating value long-term? I’m less worried about an earnings miss than losing customers or new competitors taking market share.
OpEx: Operating expenses, including stock-based compensation, have come under scrutiny by the market as investors weigh whether growth or profitability is more important. What I’m looking for is each company’s ability to cut/maintain operating expenses to focus on profitability. The balance between spending and growth/margins will tell us how efficiently a company can operate long-term.
Interest rates: Are higher rates a headwind or a tailwind? I would much rather see the latter right now.
The balance sheet: It’s very likely higher rates drive us into a recession in the next two years and companies who have strong balance sheets can not only survive a recession but also scoop up talent and acquire competitors in a downturn. Companies that are preparing their balance sheets now will be well positioned.
I wouldn’t be surprised if Q3 2023 results and Q4 guidance are both weaker than expected for many companies. But I always want to take the long-term view because Wall Street will focus on companies’ beat/miss while we can assess whether a company is becoming better positioned for the next 10 or 20 years.
Expect a lot of earnings coverage here starting in a couple of weeks.
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Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.
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