Wall Street vs. FinMEME analyst: who ya got?
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SIX things you need to know this week in 60 seconds.
Wages are surging
Allbirds: a live example of the green premium
Memes stocks are back!
Big money pledges to hit net zero
Miami Mayor: pay me in Bitcoin
Wall Street vs. FinMEME analyst: who ya got?
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1. MACROWages are surging
U.S. wages and salaries increased at the fastest pace on record last quarter with employment costs rising 1.3% (3.7% YoY). Here’s who has been benefiting the most:
Credit intermediation +7.7%
Finance and insurance +3%
Leisure and hospitality +2.6%
Nursing and care facilities +2.1%
Service-providing industries +1.7%
The tight labor market has been forcing companies to sweeten the pot for potential workers with bigger pay and perks like one-time bonuses, flexible schedules, tuition, and in ridiculous cases manicures and free clothes!
Minimum wages are also being raised across the board at companies like Starbucks, Costco, Amazon, Walmart, etc. which means some of them are passing along those costs to the consumer.
GRIT’S TAKE: Workers are earning more, but they’ve also been more productive which has helped absorb some of the wage-driven inflation. We should see wage growth slow as more people return to work (but not to the office ;)
GRIT’S ACTION: Stocks remain the best inflation hedge in my opinion!
Under the Radar
A 20+ Year History of Drone Innovation: After more than two decades, Draganfly continues to revolutionize the drone industry. The award-winning, industry-leading drone solutions and systems developer, has signed a minimum $9 million manufacturing agreement with Digital Dream Labs, Inc. to design and develop an AI companion robot capable of flying*.
*This is sponsored advertising content.
2. DEALS & IPOsAllbirds: a live example of the green premium
Last year, Allbirds had a funding round that valued them at $1.7B. On Wednesday, the sustainable shoe company was worth $4.7B thanks to an impressive trading debut. The highly anticipated IPO didn’t disappoint with shares opening at $21.21 (up from their official pricing at $15) and jumping as high as 116% before closing at $28.64.
Allbirds has yet to turn a profit (they lost nearly $26M last year) but that didn’t stop investors from pouring into the stock, which shows that they’re willing to put a premium on sustainable, green investments.
Another example of a sustainable company taking advantage of the green premium? Mark Cuban’s carbon-neutral food company, Neutral Foods.
GRIT’S TAKE: Get used to hearing about sustainability and carbon-neutrality because these are 2 investment themes that every company in the world will have to align itself with if they want to stay relevant.
GRIT’S ACTION: Long this theme! One of my investments is about to raise $50MM from a syndicate of large banks at a big premium to what I invested at.
3. STOCK MARKETMeme stocks are back!
Like gasoline and fire, meme stocks & EVs make for an explosive combination!
Last week, both Tesla and Hertz shares surged after the companies announced a 100k order (which has yet to be finalized, btw).
On Tuesday, Avis CEO told analysts that the company would be “much more active in electric scenarios as the situation develops”. That was all the WallStreetBets and Stocktwits crowd needed to hear to YOLO Avis shares to an intraday high of $545 (opened at $174) before closing up over 100%.
In related news: the following day, veteran meme stock Bed Bath & Beyond shook off the cobwebs as shares surged more than 70% in extended hours after the company announced the launch of a digital marketplace that will sell third-party goods.
GRIT’S TAKE: The meme stock trading army continues to target stocks with high levels of short interest: approximately 21% and 27% for $CAR and $BBBY, respectively.
GRIT’S ACTION: Meme your heart out, but only meme with money you can afford to lose!
4. COMMODITIESBig money pledges to hit net zero
In 2020, $35.3T was invested in sustainable funds worldwide. This comes out to ~36% of money under professional management. It’s still a minority of total investments, but it’s growing faster than other areas — the total was 28% in 2016.
Financial institutions managing $130T in assets just made a pledge to make sure that that growth continues through 2050. The Glasgow Financial Alliance for Net Zero is made up of 450 banks, insurers, and asset managers from 45 counties, all committed to hit net zero emissions.
The pledge is in line with a growing consensus that the private sector will be essential in the fight to curb global warming.
GRIT’S TAKE: If carbon-neutral and net zero investments weren’t on your radar before, then maybe the interest of the group that controls 40% of all the capital in the world will do the trick!
GRIT’S ACTION: Long carbon deals. And I think I am going to make a lot of $.
5. CRYPTOMiami Mayor: pay me in Bitcoin
Beaches, nightclubs, Cuban coffee, Brazilian butt lifts, and Bitcoin. That’s what Miami does.
Mayor Francis Suarez has been positioning the Magic City as the “crypto capital of the world” ever since his famous “How can I help?” tweet in December of last year. Since then, there’s been a great migration of talent to the city as well as hundreds of millions of dollars invested.
This week Mayor Suarez put his money where his mouth is tweeting that he would be receiving his next paycheck 100% in Bitcoin.
Not to be outdone, yesterday NYC mayor-elect Eric Adams announced plans to take his first three paychecks in Bitcoin as well.
GRIT’S TAKE: This begs the question: which elected official will be next, and what cryptocurrency would they prefer? It’s too bad Mayor Rob Ford is no longer with us, I’m betting he would’ve taken payment in Dogecoin!
GRIT’S ACTION: We are going to start accepting payment in bitcoin soon. And launch a GRIT token too!
6. ENTERTAINMENTWall Street vs. FinMEME analyst: who ya got?
If you needed further proof that FINMeme analysts > Wall Street analysts, then your search ends here!
On December 21, 2020, Grit’s very own Outrageous Chartered FINMeme analyst Dr. Parik Patel, BA, CFA, ACCA Esq. bravely presented his Tesla valuation to the world.
“He’s crazy.”
“That’s ridiculous!”
“I hear he uses community adjusted EBITDA.”
Those were just some of the mean and hurtful comments his bold prediction provoked.
As of this writing, however, Tesla shares sit a mere 2.7% from reaching Dr. Patel’s target price of $1,264 per share.
So I ask you: who’s crazy now!?
GRIT’S TAKE: If you hadn’t heard the big news, GRIT has hired its first brand AMBASSADOR, Sergei Pefiliev, who was recently a Quantitative Analyst at Goldman Sachs!
How long until Wall Street realizes their talent is burning suits to join GRIT?
GRIT’S ACTION: Tune out Wall Street, tune into GRIT.
*SOURCES
1. Bloomberg
2. CNBC
3. Bloomberg, CNBC
4. AP News
5. Coindesk, @FrancisSuarez, CNBC
6. @ParikPatelCFA
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