For the Love of Money

💘 Who else is getting fleeced on Valentine’s Day? February 14, 2024 | Peel #647 Silver Banana goes to... [Dub. ](=) In this issue of the Peel: - 💥 Time to head for the bunkers… inflation is out, and it’s—okay? - 🛒 Did everyone stop drop shipping? Shopify’s stock is down. - 💘 Who else is getting fleeced on Valentine’s Day? Market Snapshot 📸 Banana Bits 🍌 - Stock serial killer [Hindenburg Research is back](… with actual murder allegations this time - Oof… after delivering solid earnings, shares in [Lyft did the opposite]() as the CFO corrected guidance from 5% growth to 0.5% growth… wow - Pack your bags because Airbnb is fired up [after this earnings report](=) - Robinhood shares were given to the rich late Tuesday as the stock surged on a [surprise Q4 profit]() Is copy-trading the next big wave in retail investing? = - Introducing dub - say goodbye to the guesswork of stock picking. Explore a marketplace of seasoned investors, each offering unique investment portfolios ready to copy. When you copy a portfolio, you replicate all existing and future trades of the portfolio in real time and at the same price. - Not only will you learn from investors with a validated track record, you’ll now get their investments in a single tap. dub isn’t just another tool; it’s a whole new way to invest. - So [join dub today pre-launch.](=) Exclusively for WallStreetOasis members. Macro Monkey Says 🐒 CP-Cry? Breaking News: The Daily Peel’s investigative apes were able to obtain access to exclusive images inside the FOMC headquarters right after yesterday’s inflation report. We warn you—the images you’re about to see may be disturbing to some readers: Truly upsetting—especially when I look at my and the WSO Alpha portfolio’s response to the data. It was a bad day to be a stock, so let’s find out why and what’s next. The Numbers In January, consumer prices increased by 0.3% monthly and 3.1% for the year ending in January, both higher than expected. Core inflation—excluding food and energy costs—also increased more than expected in January, gaining 0.4% and 3.9% for the month and year, respectively. Markets immediately dumped on the surprise to the upside, but overall, the trend in inflation hasn’t changed much. [Source]() Here, we can see a continued uptick in the monthly inflation rate. Along with headline and core inflation coming in hotter than expected across the board, these factors are driving much of the toddler-in-the-candy-aisle freakout the market is seeing. However, and as usual, that damn index for shelter costs is much to blame. Shelter costs, which comprised 36.2% of the total headline index, surged 0.6% for the month and 6.0% annually. But, as loyal apes out there are keenly aware, the CPI’s method for measuring shelter costs is about as accurate as [50 Cent’s]() first pitch at the Mets’ game. Owner’s equivalent rent alone made up over 26% of the index last month, and that’s only one component of total shelter costs. OER is ascertained by literally asking homeowners essentially, “Hey, how much do you think you could rent your house for? Nah, any random guess will do.” This portion of the index increased 6.2% for the year, while actual rental costs increased less. Meanwhile, real-time tracking of rental costs from the homies at Redfin shows only a 1.1% increase in asking rent compared to January 2023: [Source]( I know, I know—the market overreacting seems impossible given how rational and chill it usually is, but that may be what we’re seeing here. Digging further, food prices continued to rise in January as well, gaining 0.4% for the month. But, energy costs had the hookup and did the Lord’s work in bringing the index down as much as it could, as energy prices declined 0.9% in aggregate last month. Gas prices, which make up ~3.26% of the index but probably much more of your monthly budget, declined 3.3% alone. The important thing to remember is that—broadly—inflation is still moving in the right direction. Plus, JPow wipes his *ss with the CPI report, but this will only increase the attention paid to January’s PCE report release later this month, the inflation index he and the FOMC actually care about. The Takeaway? Markets were scared—should we be, too? For once, I was actually able to keep the same pair of pants on the entire time while writing this, so no—not yet, at least. Wages continue to outpace inflation, with real hourly earnings (meaning adjusted for inflation) increasing 0.3% monthly and 1.4% for the year. No matter how much wages increase, paying $4.50/gal of gas or $15 for a damn Chipotle burrito makes us want to revert to communism. However, as long as wages continue to outpace inflation thanks to a strong labor market, we’re still moving in the right direction. If we can say the plane has been landed already, it sure has been one soft landing. What's Ripe 🤩 JetBlue (JBLU) 📈21.6% - What a day to have a day—amid all of yesterday’s market chaos, JetBlue shares managed to take off just fine. Carl Icahn saved them from the turbulence. - Shares in the U.S.’s 7th largest airline flew thanks to activist Icahn’s announcement of a 10% stake in the firm he called “undervalued.” - The 87-year-old is looking for board representation for his firm, the embattled Icahn Enterprises, now that the Spirit merger has crashed and burned. Tripadvisor (TRIP) 📈13.8% - Despite the ticker, investors didn’t trip on this firm’s announcement of a potential buyout opportunity. You know it’s getting serious when a “committee” is formed. - And forming a committee is exactly what Tripadvisor did, specifically with the goal of assessing the benefit of selling themselves to the devil or another company (is there a difference?). - Centerview is already in as an advisor to a potential deal. Liberty Holdings is an early contender, but given the >55% fall in the last ~3 years, we’d imagine more suitors could come out of the woodwork. What's Rotten 🤮 Shopify (SHOP) 📉13.4% - After an earnings beat, solid guidance, and good growth overall, the market sent Shopify shares down the toilet. Guess this is why we can’t have nice things. - Revenue came in at $2.14bn vs estimates for $2.08bn in Q4, while EPS beat as well. But higher operating expenses and lower FCF margins killed the vibe. - Shopify’s push to build PoS systems at physical retailers is the key driver of higher OpEx. Last time this happened, layoffs and profitability challenges came with it, so we’ll see how it goes this time. Arista Networks (ANET) 📉5.5% - Turns out that simply being adjacent to artificial intelligence doesn’t guarantee a +10% return on earnings. Arista found that out the hard way. - Despite beating on the top and bottom lines, this AI proxy was down bad on Tuesday. The brutalization includes poor guidance and not beating by enough. - In just the past 3 months leading up to their report, shares had already boomed nearly 70%. So, profit-taking was likely at play here as well. Thought Banana 🤔 Raking In The Love Every year, we ask, “What’s the best way to show my significant other love this Valentine’s Day?” And without fail, every year, the same answer is clear—pay a f*ck ton of money to a bunch of random corporations. Thanks, Cupid. Love is in the air and, soon, in the income statements. Love, Money, and Loving Money Prior to the founding of the Roman Empire, the Februa was a multiday festival celebrated by Greek and other pre-Roman civilizations on the Italian peninsula to celebrate “purification” and the coming of spring. When Rome came to power, the term Februa was incorporated into the Roman calendar, obviously as the month “February,” and on the month’s middle day, the most important ritual of the Februa festival—the Lupercalia—took place. Several centuries later, the reportedly very funny Pope Hilarius demanded the abolishment of the Lupercalia in 467 A.D. Some 30 years later, Pope Gelasius ruined the month for single people for all eternity by ordering February’s middle day to be the official “Feast of St. Valentine.” Bang—now we know that the origins of Valentine’s Day thankfully didn’t take place in Hallmark’s boardroom as most would assume, although undoubtedly, that’s sure what it’s become all about. [Source](=) With all that spending, I guess it’s not just single people who had the second month of every year ruined. Bank accounts can join the club. But there is one thing Valentine’s Day is actually good for—the economy. This year alone, Valentine’s Day spending is projected to rake in $25.8bn in the U.S. That averages out to $185.81/household, which, given the inflation discussed above, might be enough for a card and half a box of chocolates. Of that total spent, the majority (57%) is estimated to go towards candy purchases, as seen here: [Source]() So I guess Valentine’s Day must be pretty damn good for dentists too. Some other crazy Valentine’s Day stats include: - 250mn roses are being sent by florists all across America today, and you’re not gonna get a single one of them - $4bn will be spent on chocolate alone - That $4bn will translate to 58mn pounds of chocolate sold, close to the number on my scale when I depressingly step on it tomorrow morning - 40% of Americans celebrate after Feb 14th to not be suckers like the rest of us - 35mn people are too lazy to actually go out and will order takeout on V-Day Given the decline in headline consumer spending in January, Valentine’s Day could survive as an economic and portfolio rescuer this year, in addition to being the heartbreaker that it usually is. If you’re not getting flowers, roses, dinner, or anything, we, at the very least, wish you a strong gain$ in your portfolio this Valentine’s Day. At least you don’t have to share the profits with anyone… except for Uncle Sam, of course. 💭 The Big Question 💭: How did you contribute to the economy this Valentine’s Day? And how disappointed was your significant other? Is any other holiday more of a shameless ploy to sell more nonsense? Banana Brain Teaser 💡 Yesterday 🗓 David used part of $100,000 to purchase a house. Of the remaining portion, he invested ⅓ of it at a 4 percent simple annual interest and ⅔ of it at a 6 percent simple annual interest. If after a year the income from the investments totaled $320, what was the purchase price of the house? Answer: $94,000 Today 🕐 Andrew started saving at the beginning of the year and had saved $240 by the end of the year. He continued to save and by the end of 2 years had saved a total of 540. What is the approximate percentage increase in the amount Andrew saved during the second year compared to the amount he saved during the first year? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “When I was young I used to think money was the most important thing in life. Now that I'm old, I know that it is.” — Oscar Wilde How Would You Rate Today's Peel? 😁 [All the bananas]() 😐 [Meh](=) 😩 [Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA]( // [ACADEMY]( // [COURSES]( // [LEGAL]( [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353