WSO Platinum Banana: Company of the Year

Under the category marked "Company of the Year," the 2023 Platinum Banana award goes to OpenAI Inc! [The Daily Peel... ]() December 28, 2023 | Peel #615 Silver banana goes to... [CapLinked. ]( In this issue of the Peel: - To close off the year, major banks, including Goldman Sachs and J.P. Morgan, have released their market outlook predictions for 2024. - Coinbase and The New York Times had a ripe day, while Iovance Biotherapeutics and Blink Charging suffered a share price decline. - Under the category marked "Company of the Year," the 2023 Platinum Banana award goes to OpenAI Inc! Market Snapshot Happy Thursday, apes. Airport lines were packed, and the passengers were smelly in the closing days of this holiday season. Thankfully, the only thing busy with markets lately has been gain$. But those gains were fairly light on Wednesday. The Russell’s sorry 0.35% effort managed to lead the day as U.S. markets found themselves in choppy waters. The S&P’s 0.14% gain brought up the rear despite all but 3 sectors seeing green on the day. With a performance like that, surely WSO Alpha outperformed on the day, right? Oof, well, you’d be kinda right. The apes were able to put up 0.24% on the board for the day, enough to beat the S&P and Nasdaq but pure trash compared to the Dow and R2K. Over in the world of smart money, treasury yields continued to head lower. The U.S. 10-year is now sitting right around 3.81%, off 10bps from Tuesday. The 2-year moved similarly, hitting as low as just under 4.25%. Let’s get into it. Are You a Memelord? [image](=) CapLinked is gearing up to launch something juicy in 2024. And by juicy, we mean a TikTok account where they can shitpost memes. Because CapLinked isn’t a regular VDR provider, they’re a cool VDR provider. But they need your help to do it. [Fill out this brief survey](=) to help CapLinked name their new page, and they’ll be forever in your debt. Oh, and if you’re doing any actual work this week (to which we have to ask why, you hardo?) CapLinked is still hooking clients up with seriously cool shit with every Enterprise VDR opened. [You can learn more here.]( Macro Monkey Says Guides & Guesstimates Four 2024 “Rizz” may have won the honor of Oxford’s Word of the Year for 2023, but we think “bet” must’ve been right up there as well. Not only has this word become new slang for “okay,” “bet on it,” or “word,” but it also describes the most fun activity we can think of—gambling. Gambling combines the two things we love most: money and degeneracy. Naturally, “bet” was up there for our top choices, but maybe it’ll make another run for it in 2024. In the meantime, we only have two trading days left (including today) in 2023, so it’s time to bet and speculate wildly on what the new year can and/or will bring us. Is there anything more American than wild speculation, too? Probably not, and that’s probably why they call right now the “most wonderful time of the year,” as it’s that time of year banks throw out their own wild speculations for 2024. We don’t make predictions here at the Daily Peel, but thankfully, J.P. Morgan, Bank of America, Goldman Sachs, and Morgan Stanley all did. So did every other bank, of course, but we’re gonna stay focused on the big dawgs of U.S. investment markets outlined above. Alright, enough bullsh*tting, let’s go: "... we only have two trading days left (including today) in 2023, so it’s time to bet and speculate wildly ..." J.P. Morgan: Kicking off with the world’s most valuable bank, J.P. Morgan’s 2024 [Market Outlook]() doesn’t have a fun title like the others, but it does issue a year-end S&P 500 prediction of 4,200—implying ~12% downside from here. Not a very fun way to start things off. This estimate comes from J.P. Morgan’s view that index concentration in the Magnificent 7 reaching highs not seen since the 1970s has led to an overvaluation that will correct itself and return to historical trends next year. They’re still projecting 2-3% earnings growth, implying $225 EPS for the S&P 500 in aggregate. Taken together, this implies a P/E multiple of 18.67x, quite the correction from the near 25x assigned right now. All of this is contained under the caveat of “absent rapid Fed easing”, which is itself wildly open to interpretation, so take this with a fat grain of cocain- I mean, *salt. Bank of America: Meanwhile, the second-largest U.S. bank did give their 2024 outlook a cool, catchy title. Let’s talk about Bank of America’s “[Year of the Landing.]()” Needless to say, this team is much more optimistic than JPMC. Their price target for the S&P suggests an all-time high by year-end at a cool 5,000 level, implying a ~4.5% upside from here. This is driven by a rosier expectation from the national and global macroeconomic point of view. BofA expects manufacturing reshoring to assist on the earnings front, along with suggesting that moves already made by the Fed have led to a change in corporate behavior, which will translate to higher valuations. Plus, they are keen to point out that “EPS can and has” grown rapidly while GDP growth slows. "... stay tuned for any updates to their outlook before." Rate cuts and the manifestation of their impact are expected to come into play by the second half of the year, so stay tuned for any updates to their outlook before. Goldman Sachs: For their part, analysts at Goldman seem to have been writing a love song rather than an equity market outlook, entitling their piece “[All You Had To Do Was Stay.]()” Right off the bat, they dish out their S&P price target for the end of the year: 4,700. That’s essentially flat from where we closed yesterday (4,781.58). For Goldman, the Presidential election is throwing in some gray that will add a layer of uncertainty to investment and business managers, slowing overall growth as a result of the indecision. But they still expect “modest” GDP growth, leading to an earnings increase of 5%. That’s a bit more bullish than J.P. Morgan’s 2-3% growth, but GSAM’s price target still suggests outsized pessimism in comparison. But, like J.P. Morgan, Goldman spent a lot of time on the deteriorated risk/return outlook facing the S&P, given the concentration of the Magnificent 7. Morgan Stanley: For our final bank outlook and super-creative title of the day, Morgan Stanley’s team published their “[Threading the Needle](=)” piece to describe their own outlook. Here, we see a bank too uncertain to give a straight price target, so instead, they gave us a range. Morgan Stanley expects the S&P 500 to finish 2024 somewhere in the range of 3,850-5,050, implying returns of somewhere between -19.5%-5.6%. Their base case, however, is for 4,500, a 5.8% loss from yesterday’s close. Morgan Stanley essentially agrees with the others outlined above. They didn’t throw in anything too new or surprising in comparison. They did highlight the fact that there “is little room for error” when it comes to valuations, suggesting more trepidation driven by near-universal expectations for policy easing from the Fed. Overall, these banks are about as uncertain as they come. It’s not like that’s different than how it is any other year, but heading into 2024, they’ve actually just been brave enough to admit it… for once. And we can’t really blame them. The good news is that history shows banks tend to have a history of poor guides and guesstimates heading into the new year, but with a range of expectations as wide as 3,850-5,000 or 5,050 for the S&P’s year-end, someone’s gotta be close to right… right? What's Ripe Coinbase (COIN) $185.24 (↑ 7.67% ↑) - Trivia question: what was the top-performing asset class of 2023? Better yet—what did you think would be the top-performing asset class of 2023? - Something tells me a lot of you had “digital assets” for both answers, but the real question is: did you buy at the start of this year? Big BTC buys were on our Platinum Banana shortlist for “Buy of the Year,” so if you did, please shoot me a text… I have a portfolio management job for you. - That rally has only strengthened in the latter half of the year, bringing up alongside it equities exposed to the digital asset space, like our friend Coinbase. - But others like Microstrategy (MSTR, +10.53%), Riot Platforms (RIOT, +5.82%), and Soluna Holdings (SLNH, +12.83%) got in on the fun too. Now, all eyes are on the January 15th deadline for the SEC to give the yay or nay to BlackRock’s spot BTC ETF. Experts expect further delays… so don’t get too hyped until March-ish. The New York Times Co. (NYT) $47.39 (↑ 2.78% ↑) - Oh, it is officially on. A looming issue in the AI/LLM space that’s become a hot topic since OpenAI set the world on fire with the release of ChatGPT, and yesterday, it finally came to the forefront. That’s right, apes. We’re talking about copyright infringement. - These LLMs rely on data, information, and words from third parties found on the internet, including publishers like the New York Times. Just a few weeks ago, OpenAI announced a partnership with Axel Springer to license content from the media powerhouse behind publications like Politico and Business Insider. - But they have not done so with the NYT, and they are pissed. In the lawsuit, the Times accuses Microsoft and OpenAI of building a business model on “mass copyright infringement.” To use a legal term, that’s fightin’ words right there. - This will almost undoubtedly be appealed like hell and may even make its way to the Supreme Court. The Fair Use doctrine in the U.S. complicates the matter, so we’re gonna need some robe and powdered wig wearers to come and tell us what to do. You’ll definitely want to stay tuned on this one. What's Rotten Iovance Biotherapeutics (IOVA) $7.23 (↓ 18.67% ↓) - I’m no doctor, but in my experience, dying is bad and is generally not the outcome anyone wants to see. Unfortunately, Iovance didn’t get the memo. - Tragically, a patient and subject in an Iovance experiment for a potential lung cancer treatment passed during the study. The FDA pumped the brakes on the study immediately as the death was described as “potentially related to the treatment.” - Our deepest sympathies go to the family and, to a much lesser extent, Iovance shareholders, too. This is one of those cases that’s just a big, fat L for everyone… even those of us not involved that might benefit from a treatment like this someday. Blink Charging (BLNK) $3.60 (↓ 10.80% ↓) - Bang, in the blink of an eye, nearly 11% of your investment is gone. Guess that’s what happens when you run out of charge. - And I mean that’s literally and figuratively—Blink shares crumbled as the company’s battery percentage (aka its customer base) wears thin. - On Wednesday, investors in Blink and other EV charger makers learned that competing with Tesla is hard, especially when you have worse products. Essentially, Tesla’s charging standard is becoming the USB-C for EVs and is now trending toward industry-standard status. - Given that’s only a small part of Tesla’s business and the entirety of these other chumps, investors are (rightfully) spooked. Can’t wait to see how this goes. Thought Banana Platinum Banana: Company of the Year Alright, apes, it’s that time of year. The Platinum Banana awards already bestowed to our lucky winners this year have been astounding, media reports say, but these next two are where the real pedigree can be found. Today’s award, the Platinum Banana for Company of the Year, is awarded to the company that has made the biggest impact on markets and in our lives for the given period. I’m sure most, if not every single one of you, can guess this one, but before we bless the recipient with this life-changing honor, let’s take a look at some sadly disappointed runner-ups. For starters, we’ll focus on a company that’s used to 2nd place. It’s their founders' 2nd favorite company to run and is also widely considered the 2nd most valuable startup in the world, just after TikTok owner ByteDance. And, of course, we mean SpaceX. In 2023, SpaceX officially earned the designation of launching and operating the most satellites of any company or organization ever. They operate more than 50% of all active satellites and have been using this tech to give location-agnostic broadband service to remote locations and other places, like Ukrainians on the battlefield. "... they don’t stand a chance ..." But, even with those accolades, they don’t stand a chance next to our lucky winner. Other honorable mentions include the likes of Meta Platforms for the “cut as much cost as humanly possible” mindset they spread across markets, PDD Holdings for their launch of the hyper-viral app Temu to compete with Shein, and Netflix for officially winning the streaming wars. But obviously, the winner of the 2023 Platinum Banana award for Company of the Year goes to… OpenAI Inc! Does this need an explanation? We’re gonna go ahead and imagine that most of you can already understand why this name took home the title, but for those of us just coming out of a coma… On November 30th, 2022, Microsoft and (formerly) Elon Musk-backed AI startup/“nonprofit” released ChatGPT. To say mass adoption was quick is an understatement—the large language model (LLM) rapidly became the quickest standalone product to reach 100 million users—doing so in just 2 months. The only product that beats that is Meta’s threads, but given that it’s entirely Instagram-driven, we sure don’t care. And now, the LLM and AI craze brought on by OpenAI has taken the world by storm. Many credited the beginning of 2023’s bull market to the release of ChatGPT and the newfound optimism it brought to the semiconductor and tech sectors. "Many credited the beginning of 2023’s bull market to the release of ChatGPT ..." And now, everyone has an LLM. Google’s Bard and Gemini combo rival ChatGPT the strongest, with Meta’s Llama 2.0 bringing the heat as well, and new/younger players like X.AI’s Grok are shaking the game up as well. 2023 was the year that AI became a real thing and wasn’t just an idea anymore—and that’s because of OpenAI. This would be like crowing the company that discovered the wheel as “Company of the Year” in, like, 3,500 B.C. or whenever that was. It’s so obvious it almost hurts, but credit where credit is due. We went ahead and asked ChatGPT who it thought should win, and after some brilliant prompt engineering, we finally got it to give the most unsatisfying answer of all time, obviously giving the title to… “Microsoft. Their advancements in AI, gaming (with Xbox), and productivity software continued to shape both the business world and consumer behavior.” We’ve known that money talks for a while now, but now I guess we mean it literally, too… The Big Question: What other companies should have been contenders for Company of the Year? Who will win next year? Banana Brain Teaser Yesterday — What U.S. state has the name of another U.S. state in it? Answer Arkansas (Kansas). Today — Little Jon is playing with some Pokemon cards. His hit points stand like this: 100 out of 200. He has two cards that will heal him half of his current missing health each. If he uses both cards, how many hit points would he have left? Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “Lower costs are the handmaiden of higher returns” — John Bogle How would you rate today’s Peel? [All the bananas]() [Decent](=) [Rotten AF](=) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend](=). [ADVERTISE]() // [WSO ALPHA]() // [COURSES](=) // [LEGAL](=) Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States