Itâs my #1 âexperienceâ stock⦠[RiskHedge Report] How to profit from Taylor Swift’s $1 billion tour Taylor Swift fans are hardcore. Three million people queued in the virtual line to buy tickets for the superstarâs upcoming gigs in Buenos Aires. The concerts are five months away. But âSwiftiesâ are already camping outside the stadium in tents to get front-row seats! Whatâs an analyst like me doing talking about a pop singer? Well, friends, investment ideas often come from the strangest places. And as Iâll show you, Taylor Swift is at the bleeding edge of an ultra-profitable, disruptive megatrend. - Records are made to be broken⦠Superstar Taylor Swift is performing live shows across America right now. Her âErasâ tour is hitting crazy numbers. Swift is selling out 50,000-seat stadiums every other night. And tickets ainât cheap⦠$200, on average. Back-of-the-napkin math shows Swift is raking in roughly $10 million per night. Multiply that by the 130-odd shows she will perform over the next year, and âErasâ is on track to be the first $1 billion tour. - âStephen⦠what does this have to do with investing?â Iâll answer that question with a question. How many hours a day do you spend staring at a screen? I spend at least 12 hours a day in âcyberspace.â I often talk to colleagues who are half the world away more than I talk to my wife! And like me, you also probably shop on Amazon⦠share insights on Twitter⦠and watch âTVâ on YouTube. Hereâs why this matters: As we spend more and more time online, real-world experiences like concerts and vacations will become increasingly valuable. And itâs sending âexperienceâ stocks to new highs. The experience boom is why Taylor Swift is raking in $10 million per gig. Itâs also why America has turned into vacation nation. - Iâve been working with Americans for years. Iâve never seen them take so many vacations. Over 2.8 million travelers passed through TSA checkpoints across the US on June 30. It was the single busiest day for US airports, ever. Delta Air Lines (DAL)⦠United Airlines (UAL)⦠and American Airlines (AAL) all achieved record revenues last quarter. Remember when folks predicted cruises would be dead forever during COVID? Royal Caribbean Cruises (RCL) is on track to hit record passenger numbers this year. Oops! Its stock has outperformed artificial intelligence chip leader Nvidia (NVDA) over the past year: Planning a crazy weekend in Sin City? Youâre not alone. Las Vegasâs MGM Resorts International (MGM) has rocketed 50% this year, and is trading at its highest levels since 2021: This isnât just post-COVID ârevenge travel.â The experience boom started long before a pandemic couped us up for over a year. Check out this 2019 photo taken at the highest peak in the world. Youâd think the number of people willing to fork out $50,000⦠spend two months away from family⦠and risk their lives to climb Mount Everest would be small. Yet there was a queue to summit Mount Everest! Source: Project Possible - Think about what makes you truly happy. I doubt itâs that new-car smell or a crisp $3,000 suit. Itâs experiences like vacations with your kids and laughing over dinner with friends. When you spend all day, every day, staring at a screen⦠it feels great to walk outside and touch some grass. I often joke that some of my colleagues secretly find manual labor refreshing. As our lives become increasingly digital, experiencesâgoing places and doing things in the real worldâwill become ever more valuable. And that means people will spend ever greater amounts of money on those experiences. There are right waysâand wrong waysâto profit from this trillion-dollar trend. Here are my top tips for investing in the experience economy. - Avoid airlines. Americaâs âBig Threeâ airlines are booming right now. But air travel isâand always has beenâa crappy business. As Warren Buffett quipped: âInvestors have poured their money into airlines [...] for 100 years with terrible results. [â¦] Itâs been a death trap for investors.â Buying airline stocks is like frequent flying. It seems glamorous from the outside. But do it, and youâll soon wish you hadnât. - If you buy Live Nation, watch out⦠Ticketmaster owner Live Nation Entertainment (LYV) controls roughly 70% of the ticketing and live events market. Ticketmaster sells over 20 million stubs each month. And it earns a fat fee on each sale. So when a superstar like Taylor Swift tours, Live Nation makes millions of dollars. But there are several threats to Live Nationâs ticketing stranglehold. The US Department of Justice is investigating it for monopolistic behavior. And without getting into the weeds, my research suggests blockchain technology will capture the ticketing market within a few years. - My #1 experience stock is⦠Before the internet, the only way to find the best hotels was to walk into a travel agency. Then, online disruptor Booking Holdings (BKNG) burst onto the scene. With a few clicks of a mouse, you could compare any hotel in the world. I use Booking all the time. Itâs taken the guesswork out of booking hotels. Today, Booking is the worldâs largest online travel agent. It processes about 35% of global travel sales and earns billions from commissions in the process. Booking is the biggest winner from the experiences boom. Every vacationer needs somewhere to rest their head. Bookingâs sales recently surpassed their pre-pandemic highs. Its stock took off like a rocket, and it hasnât looked back: You may be wondering if âroom sharingâ pioneer Airbnb (ABNB) is a threat to Booking. Airbnbâs business has almost doubled since 2019. But our insatiable appetite for travel means both companies can win. If I could only own one, Iâd pick Booking every day of the week. Itâs far more profitable⦠has tens of millions of loyal customers⦠and its stock is outperforming. What do you think is the best âexperienceâ stock right now? Let me know at stephen@riskhedge.com. Stephen McBride
Chief Analyst, RiskHedge Suggested Reading... [ICYMI: Buy this stock... but not until August 3rd](
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