- GRIT
- Posts
- Expectations are high...
Hi Everyone 👋,
Welcome to our Sunday newsletter! Here’s what we’re discussing this week:
GRIT’s BIG News of the Week:
Hottest News This Week 👉 EXPECTATIONS ARE HIGH
Matt Allen’s Corner 👉 THE SALAD OIL SCANDAL
Comin’ Up 👉 EARNINGS AND ECONOMIC DATA
1. Hottest News This Week
EXPECTATIONS ARE HIGH
📣 NVIDIA EARNINGS
Nvidia, a leader in AI, will report earnings after the market closes on Wednesday, wrapping up the tech giants' reports. Expectations are high, with analysts predicting over 400% earnings growth and a 242% revenue increase last quarter, according to Bloomberg.
For the second quarter, analysts expect earnings to grow by more than 120% and revenue by nearly 100%. Since its impressive May 2023 earnings report, Nvidia's stock has jumped over 86% in 2024 and more than 200% in the past year. With Nvidia's impact on AI stocks and the broader market, all eyes are on whether it can meet these high expectations again.
📣 STOCKS HIT HIGH
Stocks ended the week with new records. Signs of easing inflation boosted hopes for Federal Reserve interest rate cuts, leading to a rally. All three major indexes hit record highs on Wednesday.
For the week, the Nasdaq rose over 2%, the S&P 500 gained more than 1.5%, and the Dow closed above 40,000 for the first time, up over 1%. The coming week is expected to be quieter, with manufacturing, services, and consumer sentiment updates.
📣 IRAN PRESIDENT
State media reported that a helicopter carrying Iranian President Ebrahim Raisi crashed on Sunday. Raisi's condition is unknown at this time. Rescue efforts are hindered by harsh weather and heavy fog, with 40 teams, drones, and search dogs deployed. Eight ambulances have been sent, but fog prevents air rescue.
Iran's Foreign Minister Hossein Amir-Abdollahian, East Azerbaijan Governor Malik Rahmati, and Raisi's security detail were also on board. The helicopter belonged to the Iranian Red Crescent.
2. Matt Allen’s Corner
THE SALAD OIL SCANDAL
Hi Everyone! This week, we are discussing a historic and wildly interesting financial fraud from 1963.
One of Warren Buffett’s greatest trades was due to a massive fake vegetable oil fraud. Warren Buffett is one of the greatest investors ever, always sticking with a core set of investing principles. Warren Buffett's core investing principles revolve around value investing, which involves buying undervalued stocks of companies with solid fundamentals. He emphasizes investing in businesses with a durable competitive advantage, competent management, and predictable earnings.
However, from time to time, he would throw those out the door to strike a massive deal. American Express received a tip about a possible fraud and began investigating.
Source: Yahoo Finance
The “Salad Oil Scandal" of 1963 was a significant financial scandal that nearly brought American Express to its knees. Allied Crude, led by Anthony De Angelis, exploited warehousing and inventory certification loopholes. De Angelis falsely inflated the company's inventory of soybean oil by filling storage tanks with water and only a thin layer of oil on top, convincing inspectors that the tanks were full of oil.
Allied Crude then used these fraudulent inventory certificates as collateral to secure massive loans from American Express for up to $150 million. The financial losses were enormous when the fraud was uncovered, causing American Express’s stock price to plummet.
A 30-year-old Warren Buffett purchased a 5% stake in the company for $20 million, a meager price. Recognizing the intrinsic value of American Express despite its tarnished reputation and financial troubles, he invested heavily in the company's stock. The stock eventually rose over 400% in the next four years, making Buffett a massive profit.
Cheers,
Matt Allen
3. Comin’ Up
EARNINGS AND ECONOMIC DATA
💰 Earnings:
Monday: Zoom, Wix, Palo Alto
Tuesday: Lowes, Autozone
Wednesday: Nvidia, Target, Snowflake
Thursday: Workday
Friday: Buckle
📈 Major Economic Events:
Monday: N/A
Tuesday: Fed Gov. Waller speaks
Wednesday: Existing home sales
Thursday: Initial Jobless Claims
Friday: Durable goods
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas
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.
Disclaimer: Grit is a publisher of financial information, not an investment advisor. Grit does not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient. Grit does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.
THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN. INVESTORS SHOULD OBTAIN INDIVIDUAL INVESTMENT ADVICE BASED ON THEIR OWN CIRCUMSTANCES BEFORE MAKING AN INVESTMENT DECISION
No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.
The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and Grit undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.
Grit does not accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.
By using the Site or any related social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.
Please read: Terms of Use, Privacy Policy, Disclosure Policy, State Disclosure Policy, and Disclaimer Policy
If you have any questions please contact us at info@gritcap.io
Reply