Trash Is CASH 💰

1. Genevieve’s Corner

TRASH IS CASH

Hi Everyone! 👋

Another week, another action-packed recap!

THIS WEEK’S MARKET RECAP:

1. S&P 500 hits 4500, above every Wall Street estimate

2. CPI Inflation fell to 3.2% in October, below expectations of 3.3%, coolest since July

3. OpenAI’s Sam Altman exits as CEO because “board no longer has confidence” in ability to lead.

4. Apple, Disney, IBM all stopped advertising on Twitter

5. Fidelity filed for Ethereum ETF

6. Microsoft shares hit record high (again)

7. CEO of Walmart: “We may be managing through a period of DEFLATION in the months to come”

8. Biden calls China’s President Xi Jinping a “dictator” hours after their first meeting in a year

9. U.S. money-market fund assets hit a record high of $5.7 trillion

10. U.S. retail sales fell for the first time in SEVEN months

11. Delinquent commercial real estate loans at US banks hit highest level in a decade

12. Unemployment alert: continuing U.S. jobless claims hit a nearly 2-year high, 8^th week of increases

13. In the $175 billion China property dollar bond sector, $124.5 billion worth of bonds are currently in default

14. U.S. housing starts hit a 3-month high

15. Homebuilders have been on a remarkable run, surging +17% in just the last three weeks

16. Michael Burry closed a “$1.6 billion notional value” S&P and NASDAQ short position

17. Home Depot beats earnings expectations, warns of a bumpy road ahead with first annual sales decline projection since 2009

18. Argentina’s inflation jumps to +143% ahead of the election

19. Amazon will start selling cars on its website in 2024

20. U.S. October producer prices fall 0.5% M/M vs. est. of 0.1%

21. Japan Q3 GDP -2.1% on an annualized basis; est. -0.4%

22. Auto loan delinquencies among subprime borrowers reached a nearly-30-year high in September of 6.1% – the highest rate since 1994

23. Average credit card balance hits a 10-year high at OVER $6,000 – up 15% from last year

24. CBOE will launch margined Bitcoin and Ethereum futures in January 2024

25. Morgan Stanley released their 2024 outlook, predicting FED will make deep interest-rate cuts over the next two years as inflation cools

What a week! 

You can't make this stuff up! 😱

🎯 GEN’S TAKE:

Embracing the timeless wisdom of… Upgrade to GRIT VIP 🚀 for my full TAKE! Get 50% off now for Black Friday. Offer ends November 25th at Midnight! 🎁

Keep an eye out for a more in-depth analysis of this company in the upcoming weeks from the GRIT team!

Genevieve Roch-Decter

2. Matt Allen’s Corner

THREE GENERATIONAL DEFINING TRENDS

In 1994, Jeff Bezos famously left his high-paying Wall Street job to start an online book store. His parents, in-laws, and co-workers were laughing at his idea. They begged him not to quit his job. In fact, his boss at the time said the idea sounded great but for someone else to do, not him.

Jeff Bezos started Amazon in 1994 because of a stat that he heard about the internet. He heard that it was growing by 2,400% a year.

This week, I will share with you insane stats that have inspired people to start companies and inspired other people to invest in companies or trends.

I believe that a great investor should always be on top of the trends that are or will be in the future.

1. Cloud Kitchens

“Cloud Kitchen Market to surpass USD 159.1 billion by 2030 from USD 53.3 billion in 2021.”

Cloud Kitchens had their breakthrough moment during COVID-19.

If you didn’t know, Cloud Kitchens are facilities that provide a kitchen for restaurants to cook food and then have the food delivered. This allows the restaurants to have minimal overhead.

For example, let’s say we want to start an Italian restaurant that is only delivery.

We would rent space from a cloud kitchen to cook the meals, list our restaurant on Doordash/Uber Eats, and then our customers would have the meal delivered to them via the app. We would never see our customers in person.

Travis Kalanick was the founder of Uber. However, he left Uber (against his will) to start a Cloud Kitchen empire.

You might have realized that Chick-fil-A has focused on their drive-thru in recent years. In my opinion, this is the innovation for the future of cloud kitchens.

If you are familiar with the YouTube star Mr. Beast, he created a “Beast Burger” that companies could sell through DoorDash and Uber Eats. They sold millions of them.

This isn’t a cloud kitchen but indicates where the food industry is headed.

2. Electronic Systems Of Cars

In 1970, the cost of an electronic system was 5% of the total car cost. In other words, if you built a car for $10,000, the electronics only cost $500.

However, by the year 2030, the electronic system of a car is expected to be 50% of the total cost of the car.

Self-driving is not going to be the only advancement when it comes to "car computers."

This is due to the code, the semiconductors, malware, app stores, etc.

If you didn’t know, the Ford 150 has 150 million lines of code in the car to allow it to operate.

Some of the great investors around the world are looking for companies that can cut these costs.

3. Shortage of Semiconductor Employees

If you didn't know, semiconductors are the backbone of every single piece of technology hardware that you use, including your car.

The New York Times predicts that in 2025 we will have a massive shortage of semiconductor workers.

In fact, The USA may be short 300k semiconductor workers in 2025.

Intel has earmarked $100B+ to chip fabrication plants in the coming years. Its competitors, Samsung and Taiwan Manufacturing Semiconductor Company, are putting up similar sums. This is an insane amount of money to be putting up for plants.

The skill shortage is a gamut from technicians to run the plants to researchers to design the newest chips.

One big issue: Today, university grads with engineering degrees, especially PhDs, are taking their degrees to software, which often pays better, too.

The other major problem is that semiconductor manufacturing relies on extensive process knowledge based on decades of experience and skilled workers. Producing a single chip takes 1500 steps and up to 6 months.

🎯 GRIT TAKE:

Cyber insurance loss ratios have… Upgrade to GRIT VIP 🚀 for my full TAKE! Get 50% off your first year’s annual subscription until midnight on Black Friday! 🎁

Cheers,

Matt Allen

3. Comin’ Up

EARNINGS AND ECONOMIC DATA

💰 Earnings:

Monday: Zoom, Agilent

Tuesday: Nvidia, Lowes, Baidu, Autodesk

Wednesday: Deere & Company

Thursday: Aegon, NIO

Friday:

📈 Major Economic Events:

Monday: US economic indicators

Tuesday: Existing home sales

Wednesday: Initial jobless claims

Thursday: Thanksgiving Holiday

Friday: Early market close

The author of this newsletter owns ETF’s (exchange traded funds) that may hold ownership interests in the companies discussed in this newsletter as of the published date of this newsletter. An insider to GRIT Capital Corporation currently holds an ownership interest in Microsoft Corp (MSFT), Amazon Inc. (AMZN), Waste Management, Inc. (WM), and NVIDIA Corp (NVDA) as of the published date of this newsletter. The insider to GRIT Capital Corporation does not guarantee that they will maintain their ownership interest in Microsoft Corp (MSFT), Amazon Inc. (AMZN), Waste Management, Inc. (WM), and NVIDIA Corp (NVDA) and may increase or sell such interest at any time.