Postcards: Cradle to Grave... A Love Story

We might oppose "cradle to grave" government programs... but don't discount the marketing and operational strategy when looking at great stocks to buy. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Cradle to Grave... A Love Story]( We might oppose "cradle to grave" government programs... but don't discount the marketing and operational strategy when looking at great stocks to buy. [Garrett {NAME}]( Mar 13   [READ IN APP](   Market Update: Same old, same old. Global liquidity remains at a record; insider buying is in the gutter. And the Russell 2000 suggests the United States isn’t heading into a recession in 2024. This is a trader’s market, so I continue to focus on selling credit spreads on stocks I’d want to own at lower levels with strong insider buying support. Those stocks include Occidental (OXY), American Express (AXP), JetBlue (JBLU), and Devon Energy (DVN). We’re 21-3 on spreads with three winning trades open in our insider buying letter. Our annualized rate of return is north of 550%. We’ll bring this letter over to Republic Research in the coming weeks, and anyone member of the Risk Letter will receive two free months of this service during the transition. So…, hop on board and join Republic Risk. [Just click here to get started](. --------------------------------------------------------------- Dear Fellow Expat: When throwing a game of Uno to a six-year-old, you must focus. You can’t have a wild card in your last two cards. If you do, the game is over. You win, and she will likely throw a fit. So, make sure that you start off badly. Pick up cards when you don’t need to. Shuffle the deck in her favor. She’s six. This isn’t Scrabble… you don’t need to beat her by 500 points. Last night, we played Best of Seven. I won 4-3, but I lost two of the games. Some people might criticize this parenting approach. But… I’d rather spend time with her and talk. We discussed the difference between Taylor Swift and Phish for 45 minutes yesterday (she’s, interestingly… a fan of both). I have to give her a game now and then - instead of having her run off into her bedroom and slam the door. She’s very competitive. I was the same way as a kid. She’ll grow out of it. What won’t she grow out of? A handful of brands and companies that we should buy as investors. [Upgrade to paid]( Cradle to Grave My daughter isn’t very materialistic. She never sees an advertisement for something and asks for the toy or other product. She’s pretty simple. We get her clothes at Carter’s (CRI) as we live near an outlet. Her one vice is popsicles, clearly inherited from me. Our popsicle budget is insane, and I need a bigger freezer. I pay attention to the companies with whom she engages. They have me altering my view on how these businesses operate and the odds of her remaining a loyal customer. She engages with Amazon’s (AMZN) Amazon Prime streaming service, where there are many PBS shows - and all the stuff we get delivered. She engages with the Walt Disney Co. (DIS) The only other companies that I can say that have had a meaningful impact on her in the last year are: - Home Depot (HD) since we painted her room her preferred color and because I’m always fixing something broken in her room or bathroom. - Walmart (WMT) because of groceries and an incredible amount of crap we buy. - Berkshire Hathaway (BRK.B) because of insurance and the stock she owns. - Apple (AAPL) for her schooling and coding games. - Target (TGT) because that’s one of her favorite places just to go (grocery, etc.) So… it got me thinking. Are these good companies? And do they employ a lifetime strategy to engage Americans? Are they “cradle to grave” companies? I’m not talking about the traditional marketing strategy… The term "cradle to grave" in marketing refers to a strategy or analysis that considers the entire lifecycle of a product or service, from its inception (creation) to its ultimate disposal or discontinuation. No… I’m talking about businesses that have very distinct qualities. - They make products for people in all stages of life - from infants to “wisdom” years. - They are part of a natural monopoly, duopoly, or oligopoly. They’re one of the only games in town regarding what they sell. - They have an expanding global presence… That’s it: Keep it simple. From there, we can quantify opportunities. We can find companies with little debt, strong management, excellent capital efficiency, increasing market share, and more. This is a little different from our previous approach since we’re starting with a qualified approach instead of a quantified approach. But in this [environment of rising liquidity and the need to hedge against fiscal repression]( (which I explained yesterday). Let’s take a look at an example. There’s Always Money in Toilet Paper In a market where brand loyalty is hard to win and keep, a small group of companies have mastered the art and science of capturing customers from "cradle to grave" with incredible results. Right now, take a quick walk around your house, and what do you see? Dawn dish soap, Charmin toilet paper, Gillette razors, Pampers diapers, maybe Tide laundry detergent—brands that are constant throughout our lives and all owned by Procter & Gamble (PG).  P&G has positioned itself amongst the leaders in baby, feminine, fabric, hair, home, grooming, and oral care. These products are unavoidable if you're a living, breathing human. The company holds an estimated 79% of the razor market alone. By dominating across various demographics, P&G practically guarantees that it will not just win you over as a customer at some point in your life but at every point. Try as you might to resist, they're likely to get a piece of your wallet sooner or later. On the quantitative front - here’s a stock that is slow and steady. It’s up 17% over the last year, not including dividends. It’s up 58% over the last five years - again, not including dividends.  Sure it’s taken hits when the global economy is under stress. Its biggest selloffs came after the Dot-Com bubble, the 2008 financial crisis, the 2018 bond frenzy, the COVID crisis, and the global bond crisis that sapped liquidity in October 2022.  And then… it ricocheted back… hit new all-time highs and climbed higher.  That’s a good thing. It just means that the company tends to only struggle when global markets are under stress - and it rebounds once central banks pivot to accommodate the world with cheap capital With vast market share, the company is consistently profitable and capital efficient.  PG has a Piotroski F score of 8, little exposure to a credit event, double digit return on invested capital (ROIC) and return on equity (ROE), and amazing net margins at 17.6%.  Procter & Gamble is a prime “cradle-to-grave” name - and one of 10 that we’re currently watching over at Republic Risk Letter. Next month, we’ll be releasing a report that centers on our favorite names that fit the profile.  So, [remember to sign up](. I’ll celebrate my 43rd birthday - and middle age - with a large amount of Proctor and Gamble stock and many other names. Stay positive, Garrett {NAME} Final Thoughts I wrote this during lunch today. Two guys from Boston are sitting to my right. They are both talking about Derek Jeter. One guy said, “Derek Jeter wasn’t a really good leader for that team [the Yankees.] It has taken me 30 minutes not to yell at this man. I am not a Yankees fan. My grandmother - Mary - had a massive crush on Jeter, and she would bring bells to Orioles games to cheer for him. She joined “The Dark Side” because of Jeter, a man whose final hit was against… [the Orioles in a walkoff](. Jeter was—and is—among the Top five leaders in Major League Baseball… ever. Ian O’Connor’s book “The Captain” outlines Jeter’s leadership vision. His philosophy is at the core of what I seek in the management of great companies. They have a strong core of leaders who are passionate about what they do. They Dream Big. They embrace failure and learn from it. Apparently, this guy to my right… and his THICK Southie accent… missed the memo. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()