Weekend Investor: The Week That Was

I hope you had a wonderful week!

Summer has begun, which means school is out and my writing schedule has been thrown into chaos. I will be back to a more regular publishing schedule next week.

Speaking of next week, free subscribers can expect one post mid-week and the weekly “Weekend Investor” email, while premium subscribers will get a deep dive, one stock update, and the first of a series building a foundation for how we invest asymmetrically. If you aren’t a premium member already, you can upgrade at this link:

In case you missed it

Here’s some of the content I put out this week. Enjoy!

• Peacock is an Albatross: Streaming is the future of media, but that doesn’t mean we will have 47 streaming services. History suggests that 2-4 streaming services will reach scale (Netflix and Disney are there) and survive while other content companies will be better off selling content to the streaming companies. Comcast’s NBC Universal is burning ~$3 billion per year trying to build a streaming business when it could just sell content to Netflix, which is exactly what Sony is doing and is a reason I put a spotlight on the company here!

• Keys to Artificial Intelligence: If you’re interested in investing in artificial intelligence, you have to know what models, inference, AI hardware, and AI products are. This video goes through those components and here I ask whether most of what we see in AI today will simply become a commodity.

• Is Sleep Number Attractive?: My friend Jon Quast and I discuss Sleep Number stock and he makes a compelling case.

• Great Investment Ideas Are Everywhere: Where are some of the best investment ideas? Right in front of your face. I hope this discussion is helpful in showing how finding ideas isn’t as hard as it may seem.

Apple joins the VR race

Apple announced a $3,500 VR headset this week. By all accounts, the product is amazing and includes innovative features like precise eye tracking for “pointing” at objects and “pass thru” displays so good they make it seem like you can really see through the lens (which you can’t).

Even if Apple sells half a million headsets in 2024 ($1.75 billion in revenue), this won’t be a meaningful product to the company’s top or bottom line for quite a while. But it’s a technology risk that I’m excited to see Apple take.

Apple has gone high-end in every sense, which was one of the reasons people were so impressed with the device. Meta Platforms has taken a very different approach to VR, stripping cost out where possible and selling the Quest 2 for $299 in hopes of taking VR mass market. That’s a decent approach and makes sense for Meta’s business.

It’s been a long time since we’ve seen competition in new consumer tech hardware between very different views of the future. Business models matter and while I like Apple’s position starting high-end with a massive distribution network, Meta could end up being the winner if $3,500 is a bridge too far for VR users.

Tesla’s charging “wins”?

One of the shocking news items this week was GM announcing it would adopt Tesla’s charging standard and get access to Tesla’s superchargers (following a similar deal between Tesla and Ford). Since GM is an Asymmetric Investing Universe stock, I think it’s worth thinking about the implications.

• GM just answered a key consumer question about charging availability and plugs.

• After announcing a partnership with 7 charging networks in 2021, GM now adds Tesla as a partner. It’s clear GM isn’t going to be building its own charging network and will lean on partners to do that.

• The Tesla plug will likely become the global EV standard. This may generate a small amount of revenue for Tesla, but getting on one standard is good for EV adoption overall. It’s not clear if this is a step toward open sourcing the design or not.

If the charger network or plug GM had used caused buyers to think twice about getting a GM EV, that risk has been eliminated. That’s an incremental positive for GM this week and with a new plug and new infotainment system coming in 2025 there are big changes coming for GM’s EV future.

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.