👉 Oracle Hits All-Time Highs

Happy Sunday, everyone.

Attention all paid subscribers — I’ll be hosting my first monthly livestream tomorrow, Monday (9/16), at 6pm ET. The stream will last about 45-minutes, and I’ll walk everyone through my portfolio, general investing strategy / playbook, as well as share a mid-month update on the markets.

We’ll also be joined by the legendary Genevieve Roch Decter! We’re excited to have you there with us!

As a reminder, paid subscribers get access to both my Dividend Growth Portfolio + are invited to join these monthly livestreams. Paid subscribers will be emailed instructions as how to join the stream tomorrow after The Investing Week Ahead is published.

If you’re not a paid subscriber — click the link below! We are currently running a massive discount that ends after September.

Portfolio Updates:

During the month of September I’ll be deploying $10,000 into my investment accounts — and I’m eager to share the newest one (shown above).

I just opened an investment account on a platform called Double Finance — essentially they allow investors to build their own investment strategies from scratch, or use their pre-existing ideas. I’m not interested in building one from scratch, so I’m using their “Large Market Beaters” strategy.

According to their website, the strategy is described as:

• Large market cap (over $200B)

• Over the last 12-months delivered 20%+ returns

When this simple strategy was back tested by 10 years, the annual return was +28% with a max drawdown of -27%. Below are the specific holdings inside of this strategy, as well as how my $5,000 is deployed amongst them.

Double Finance isn’t sponsoring this newsletter or telling me to share this with you — I’m just a guy on the internet trying to find interesting ways to outperform the stock market. If you end up building your own strategy — let me know! I’d be happy to check it out.

The other $5,000 was just deposited into my Dividend Growth Stocks portfolio as highlighted above. Essentially all of this money will be invested into Berkshire Hathaway over the coming weeks — as I continue to build a sizable position in the company.

With that being said, I’ll be opportunistically building upon my $1,925 position in DraftKings (DKNG) as well.

Week in Review — Too Long, Didn’t Read:

Oracle’s remaining performance obligations grew by +53%, Adobe’s Digital Media ARR guidance disappoints, Kroger raised their dividend by +10%, another lackluster Apple event, Google’s potential big break-up, Disney finally reaches a deal with DirecTV, the Consumer Price Index (CPI) came in cooler, but the Core CPI was higher than expected, consumer sentiment continues to rise in the short-term, and U.S. imports dropped substantially in August.

Key Earnings Announcements:

Oracle’s remaining performance obligations grew by +53%, Adobe’s Digital Media ARR guidance disappoints, and Kroger raised their dividend by +10%.

• Oracle (ORCL)

Key Metrics

Revenue: $10.5 billion, an increase of +10% YoY

Operating Income: $4.0 billion, an increase of +21% YoY

Profits: $2.9 billion, an increase of +21% YoY

Earnings Release Callout

“As Cloud Services became Oracle’s largest business, both our operating income and earnings per share growth accelerated.

In Q1, 42 additional cloud GPU contracts were signed for a total of $3 billion. Our database business growth rate is increasing as a result of our MultiCloud agreements with Microsoft and Google. At the end of Q1, 7 Oracle Cloud regions were live at Microsoft with 24 more being built, and 4 Oracle Cloud regions were live at Google with 14 more being built. Our recently signed AWS contract was a milestone in the MultiCloud Era. Soon customers will be able use the latest Oracle database technology from within every Hyperscaler’s cloud.”

My Takeaway

• Adobe (ADBE)

Key Metrics

Revenue: $5.4 billion, an increase of +11% YoY

Operating Income: $2.0 billion, an increase of +17% YoY

Profits: $1.7 billion, an increase of +20% YoY

Earnings Release Callout

“In Q3, Adobe delivered cash flows of over $2 billion and exited the quarter with record RPO, demonstrating the power of combining growth with world-class profitability. Given the massive markets we are catalyzing, I’m confident in our ability to drive growth and industry leadership.”

My Takeaway

• Kroger (KR)

Key Metrics

Revenue: $33.9 billion, flat YoY

Operating Income: $815.0 million, compared to -$479.0 million last year

Profits: $466.0 million, compared to -$180.0 million last year

Earnings Release Callout

“Our solid sales results through the first two quarters of the year give us the confidence to raise the low end of our full-year identical sales without fuel guidance by 50 basis points.

We now expect identical sales without fuel to be in the range of 0.75% to 1.75%. Our positive customer trends are driving sales momentum that we expect to continue in the second half of the year.”

My Takeaway

Investor Events / Global Affairs:

Another lackluster Apple event, Google’s potential big break-up, and Disney finally reaches a deal with DirecTV.

• Apple (AAPL) Event Recap

At Apple’s latest event, the company unveiled the iPhone 16 and 16 Pro, both designed to leverage new AI features called "Apple Intelligence." The new iPhones come with faster processors, action buttons, and improved battery life — with Pro models offering enhanced cameras for creative tasks.

Apple also introduced slimmer, brighter Apple Watches, including a new sleep apnea detection feature, pending FDA approval.

AirPods received a significant software update allowing them to function as hearing aids, though this too awaits regulatory clearance. The event highlighted Apple’s continued focus on integrating AI across its hardware lineup. Lastly, all updated devices will now feature USB-C charging.

• The Path to Breaking Up Google (GOOG)

Google is facing increasing pressure from dual antitrust cases, sparking concerns about potential breakups. A federal judge ruled last month that Google engaged in illegal practices to maintain its dominance in search, and a second trial now targets its ad-tech business. While a breakup isn't imminent, investors are starting to price in the risks, with Alphabet's stock down nearly 14% this quarter.

Analysts see the ad-tech case as less damaging, but the search case could have far-reaching implications, including the possibility of divesting Android or Chrome. Uncertainty looms, and the final outcomes may take years to resolve, adding long-term risk to Google’s valuation.

• DirecTV (T) and Disney (DIS) Finally Reach Deal

Disney and DirecTV have reached an agreement to end a two-week blackout just in time for college football on Saturday morning. This restored access to ESPN and other Disney channels.

The blackout had deprived DirecTV's 11 million customers of live sports, including the U.S. Open and "Monday Night Football." The dispute centered around fees and bundling structures, with DirecTV seeking more flexible, genre-specific bundles, which Disney initially resisted. The new deal includes "market-based terms" and allows DirecTV to offer Disney's streaming services, including ESPN+, Disney+, and Hulu, as well as a future ESPN streaming service.

Major Economic Events:

The Consumer Price Index (CPI) came in cooler, but the Core CPI was higher than expected, consumer sentiment continues to rise in the short-term, and U.S. imports dropped substantially in August.

• Consumer Price Index (CPI)

In August 2024, consumer prices increased by +0.2% — placing the annual inflation rate at +2.5%. This marks the lowest annual inflation level since February 2021.

Core inflation (excluding food and energy) rose by +0.3%, slightly above expectations, holding the 12-month core inflation rate at 3.2%. Housing costs remained a concern, with the shelter index rising 0.5% for the month, contributing to 70% of the core increase and showing a +5.2% year-over-year rise.

Energy prices decreased by -0.8%, while food prices rose by +0.1%. Average hourly earnings outpaced inflation, rising +0.2% in real terms for the month. Traders priced in an 85% likelihood of a 25 basis point interest rate cut at the Federal Reserve’s September meeting.

• Consumer Sentiment

The University of Michigan Consumer Sentiment reading rose to 69 in September from 67.9 in August. This marked the second consecutive monthly improvement, and the measure’s highest level since May.

The increase was attributed to lower prices for durable goods like cars and furniture, as well as expectations of future interest rate cuts from the Federal Reserve. Despite this improvement, the index remains significantly below pre-pandemic levels — having risen about 40% since inflation peaked in June 2022.

• U.S. Import Price Index

Imported fuel prices dropped -3.0% in August, with petroleum products down -3.2%. In contrast, fuel prices had risen +1.1% in July. Food prices edged down -0.1% after a sharp +1.5% jump the previous month. Excluding fuel and food, import prices decreased -0.1%, following no change in July.

The strong dollar against key trading partners' currencies has helped keep imported inflation in check. Core import prices were up +1.1% year-on-year in August.

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