Charlie Munger Passes, What’s in Warren Buffett’s Will With Gary Pulford, Year End Stock Rally
Nov 29, 2023
01:12:49
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Advisor Gary Pulford joins the podcast to discuss Warren Buffett's philanthropy and impact. Topics discussed include Charlie Munger, market euphoria, record corporate profits, holiday sales, Amazon's advantage over FedEx and UPS, small cap tech in bull markets, volatility analysis, impact of a recession on spending habits and the labor market, performance of individual stocks, and the changing landscape of online commerce and its threat to credit card companies.
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Quick takeaways
Strong corporate profit growth challenges narrative of economic slowdown.
Holiday retail sales surge contradicts expectations of economic downturn.
Amazon's success in package delivery disrupts logistics industry and raises antitrust concerns.
Deep dives
Record High Corporate Profits in Q3
Q3 of this year saw a 5.6% growth in corporate profits compared to the same period last year, marking the end of a three-quarter earnings recession. This indicates a rebound in corporate earnings and challenges the narrative of an economic slowdown. The strong performance in corporate profits supports the rally in stock prices, reinforcing the correlation between earnings and market performance.
Holiday Weekend Spending and Retail Sales
The holiday weekend saw a significant increase in online retail sales, with a 5.5% year-over-year growth on Thanksgiving and a 7.5% growth on Black Friday. This was driven by deep discounts, particularly in categories like electronics, which contributed to lower online prices. These trends challenge the narrative of an economic downturn and highlight the continued consumer spending and confidence. The strong performance in retail sales is supported by various data sources, including MasterCard and Salesforce, confirming the positive momentum.
Amazon Dominates Package Delivery
Amazon has become the largest logistics company in the world, surpassing FedEx in parcel volumes and set to overtake UPS. Amazon's success in package delivery was unexpected, with leaked documents from 2013 predicting this outcome. Amazon's growth in logistics has disrupted the industry and raises questions about its dominance and antitrust concerns. The company's expansion into shipping and logistics has contributed to its strong performance in the stock market.
Rise of Small Cap Tech in Bull Markets
Small cap technology stocks have historically outperformed during bull cycles, making them an attractive option for investors. This trend is evident in the Russell 2000 technology index, which is showing signs of breaking out relative to the rest of the Russell 2000. While investing in small cap tech may carry some risks, the current market environment presents opportunities for traders as these stocks have the potential to rally.
Amazon's Disruption in Shipping Industry
Amazon's foray into the shipping industry has disrupted the dominance of companies like FedEx and UPS. Despite initial skepticism from competitors, Amazon's investments in infrastructure and automation, as well as its ability to offer cost savings to customers, have enabled it to become a major player in the logistics space. This highlights the importance of not underestimating the potential for a major customer to become a significant competitor, especially if they can offer significant cost savings and operational efficiencies.
On this episode of TCAF Tuesday, Josh Brown is joined by advisor Gary Pulford to discuss Warren Buffett's philanthropy and how he plans to make an impact long after he's gone. Then, Josh joins Michael Batnick for an all-new episode of What Are Your Thoughts. This episode's topics include: Charlie Munger, market euphoria, record corporate profits, holiday sales, how Amazon jumped FedEx and UPS in the delivery game, and much more!
Thanks to US Benchmark Series for sponsoring this episode! Learn more about F/m Investments and US Benchmark Series at www.ustreasuryetf.com.
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