Fashology Breakout – Apple, LULU and Nike

Happy Ramadan…or as us Jews like to say…a great month to go to our favorite middle eastern restaurants.

To the markets…

I get excited about stupid things.

Today it is a big breakout confirmed in my ‘fashology‘ part of the portfolio.

Nike, LULU and Apple are all at all-time highs. Fashology is a big part of my 8 to 80 portfolio as all three stocks are in the current 14 stock portfolio.

I must insert the standard arguments against these three leaders:

1. There is no way that LULU, which sells overpriced gear with no visible logo, should be at all time highs.

2. Apple products are too expensive and there is nothing new.

3. Nike is too big and management is a mess!

On the macro side, we keep expecting this bull market to end because you know…length of expansion, valuations,Interest rates (see chart), Trump, Russia, China, trade deficit, health care costs, Penn Station, free trading, Bitcoin, 3rd world airports at LAX and JFK, global warming and of course ‘But Hillary’.

The problem/opportunity with all the fundamental negativity and the above specific opinions on Nike, Apple and LULU is these widespread negative opinions are public and already priced in to markets. Oh…and it is a bull market.

Fashology‘ companies will get hit, they always do, when they miss a season or product launch and that is always the risk with fashion and technology.

There are many other companies worthy of being in a ‘fashology’ index, but it’s my index and I want to select companies that are NOT too reliant on being brand rollups/conglomerates and those that are fashion leaders, not followers. Here is a list of companies I am considering right now:

Estee Lauder – $EL (I am pissed at all the women who read this blog including Ellen and Rachel for not connecting the dots for me 700 percent ago).

Canada Goose Holdings – $GOOS (too Canadian).

Adidas $ADDYY- (The shoes are obviously a smash hit, but I hate stripes).

Louis Vuitton – $LVMUY – (they seem very deserving and are continually on all-time high list).

America Eagle $AEO (too tween and teen, but great turnaround).

Ulta Beauty – $ULTA (not sure if the fashion AND tech are heavy enough, but one hell of a stock).

Deckers – $DECK (some great brands and a great stock, not sure about ‘fashion’).

Tesla – $TSLA (has it all but the financials are way too confusing – so will have to pay up later).

Luxottica – $LUX (too much of a roll up).

V.F. Corporation – $VFC (at $32 billion it is one hell of a rollup and Van’s is always great).

Hit me up with others that I am missing.

As Millennials work their way through the next 6 decades of working, living and spending.. a huge amount of money will be made riding the fashology trend.

R.I.P Good Times (Said Sequoia in October, 2008) and Nobody Knows Anything

David Frankel – a great Venture Capitalist – reminded me that R.I.P Good Times was written by Sequoia Capital almost 10 years ago today.

On Twitter he was pondering whether the $100 billion Softbank Vision Fund was the beginning of the end of this cycle. I replied to him with this tweet:

In October 2008 Sequoia Capital published R.I.P Good times… today Lime is raising $500 million because of the e-scooter wars… carry on.

Yes…e-scooter wars are real!

That same October back in 2008, Satoshi published his whitepaper and Bitcoin was born and the cryptocurrency market is down 50 percent and still at $400 billion!

The powerpoint Sequoia sent around to their CEO’s in the middle of the market panic is probably more valuable to read today. Every founder and investor should. These three slides were REALLY part of the 56 slide presentation:

Let me get to the point…

NOBODY KNOWS much when it comes to timing the markets.

It’s why I like to sell on the way up – or ‘when you can’.

I remember where I was sitting when I read this the first time. I blogged my cynicism at the time as Sequoia trying to scare everyone out of the market to scoop up deals for themselves. I wrote ‘Too Small to Fail‘ and kept pecking away at a few stocks and investing in startups. I was in the middle of starting Stocktwits.

Time sure has flown.

Momentum Monday – The Breadth is Real and Spectacular

It’s Monday, which means it is time for a tour of the markets and momentum.

Something new this week is that Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show and I get to add some creative production over the next few months. All the charts you have been seeing and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

This week’s show is 22 minutes. Click here to watch, or watch right here:

The show has some new ideas. If you watched last week we really liked Baidu and Illumina and both have had monster weeks.

I love this Seinfled clip which is not about Breadth, but definitely on point for today.

The market breadth is spectacular right now:

As Peter Brandt says… Bear mkts in stocks begin when a small portion of stocks prop up general mkt while majority of stocks have begun decline. Just the opposite happening in U.S. equities.

As good as the momentum is, I would not be surprised to see a steep pullback, specifically in software stocks.

Here is Microsoft making fresh ALL-TIME HIGHS today (team Stocktwits says it is up 100,000 percent since the IPO). The technicians are starting to point out divergences in software stocks (here for instance is a chart of Microsoft) as they chug higher. Here is the divergence in the software index:

My goals on this blog, especially Monday’s, is to help people find trends and ride them, but getting off is part of the business as well. Booking some profits along the way is a key to investing for profit and joy.

Have a great Tuesday.

EssilorLuxottica ….The ‘FANG’ Of Your Eyes

Yesterday I was blogging about BIG.

It’s not just the internet giants that have gotten big.

There is a FANG (Facebook, Apple, Netflix, Google) of your eyes. The company is EssilorLuxottica.

My favorite read of the weekend was this piece by The Guardian titled ‘The Spectacular Power of Big Lens‘.

I know quite a bit about Luxottica (here is the Wikipedia page) because I used to love Oakley before they were acquired by Luxottica.

I did not know anything about Essilor but now I do.

Over the last generation, just two companies have risen above all the rest to dominate the industry. The lenses in my glasses – and yours too, most likely – are made by Essilor, a French multinational that controls almost half of the world’s prescription lens business and has acquired more than 250 other companies in the past 20 years.

There is a good chance, meanwhile, that your frames are made by Luxottica, an Italian company with an unparalleled combination of factories, designer labels and retail outlets. Luxottica pioneered the use of luxury brands in the optical business, and one of the many powerful functions of names such as Ray-Ban (which is owned by Luxottica) or Vogue (which is owned by Luxottica) or Prada (whose glasses are made by Luxottica) or Oliver Peoples (which is owned by Luxottica) or high-street outlets such as LensCrafters, the largest optical retailer in the US (which is owned by Luxottica), or John Lewis Opticians in the UK (which is run by Luxottica), or Sunglass Hut (which is owned by Luxottica) is to make the marketplace feel more varied than it actually is.

Between them, Essilor and Luxottica play a central, intimate role in the lives of a remarkable number of people. Around 1.4 billion of us rely on their products to drive to work, read on the beach, follow the whiteboard in biology lessons, type text messages to our grandchildren, land aircraft, watch old movies, write dissertations and glance across restaurants, hoping to look slightly more intelligent and interesting than we actually are. Last year, the two companies had a combined customer base that is somewhere between Apple’s and Facebook’s, but with none of the hassle and scrutiny of being as well known.

Now they are becoming one. On 1 March, regulators in the EU and the US gave permission for the world’s largest optical companies to form a single corporation, which will be known as EssilorLuxottica. The new firm will not technically be a monopoly: Essilor currently has around 45% of the prescription lenses market, and Luxottica 25% of the frames. But in seven centuries of spectacles, there has never been anything like it. The new entity will be worth around $50bn (£37bn), sell close to a billion pairs of lenses and frames every year, and have a workforce of more than 140,000 people. EssilorLuxottica intends to dominate what its executives call “the visual experience” for decades to come.

This is one of the most incredible mergers I have read about in years. These trends sometimes sit right under (in this case OVER) our noses.

Have a great week.

PS – Tomorrow I will dive into a bunch of trends in a new ‘Momentum Monday’.

Big Big Big and Why Decentralization Matters

The big are getting bigger in the tech world and maybe that’s just the way it is meant to be in the era of the internet. I enjoyed the reads below which had me shaking my head at the size, scale and opportunity these companies are both attacking and creating.

Ant Financial…a spinoff from Alibaba is already worth more than Goldman Sachs and raising $10 billion.

This NPR piece on AI and it’s potential to help with cancer and Alzheimer’s is a great read and an exciting frontier.

Could Spotify be a ‘fifth’ horseman of the Nasdaq? I personally spend more time on Spotify each day than any other app.

Why is it that Winners keep on Winning?

Ben Thompson on ‘Tech’s Two Philosophies‘ is a great read.

All this bigness is a big reason why decentralization matters which is a topic that Multicoin takes on in this piece.

Have a great Sunday.

Flying Cars, Braspberries and Deutsche Bank Spam

As Nasdaq claws its way back to all-time highs of 7,500 we are starting to see the fruits of all our efforts.

First Braspberries:

Second and maybe more importantly… underwear that I can wear for THREE weeks straight.

Whenever I write about a successful investment, I get cold emails from ‘ultra’ wealth managers. Goldman stopped bothering me after I shared this cold email.

Yesterday Deutsche Bank hit me up with this beauty. Proof they are struggling if I am still on the call list.

In a classic thread on Twitter, my old friend ‘The Fly’ also pitched me:

My money would be safer with The Fly.

Have a great Saturday.

Robinhood at $5.6 Billion…Hoo-Ah!

Today Robinhood announced a $360 million series ‘Hoo-Ah’ today. Here is Fortune with the details.

Tom, Gary and I at Social Leverage are thrilled. So are our LP’s. We are proud angel investors (series A and B as well).

Robinhood is an amazing company, founded by crazy smart Baiju and Vlad, who built a great team and insanely good product. Forget the valuation for the moment and try and appreciate the scale of the growth story. The Company was founded in just 2013.

I have been saying this is day one for do it yourself investing since 2008.

We are now officially in Day 2.

This ‘Silicon Valley Is The New Wall Street‘- post from February 2014 now looks pretty good. For those too lazy to click:

In 2008, my vision for Stocktwits was as a lead generation for all the brokerages. Stocktwits would be the water cooler and the brokerage API’s would allow our users to enter orders right from their web or mobile conversations to their favorite broker. Roger Ehrenberg would join me on brokerage pitches back in the day. It was not a lot of fun explaining our vision.

The big online brokerages are ruled by the compliance departments, not API’s. Legacy lawyering.

I figured, much like I figured web video advertising would be solved in 2006 when I started Wallstrip, that one broker would break ranks and do something innovative.

NOPE.

The good news is things are changing in 2014. I was only 6 years early. Robinhood is solving a big, but simple problem and they have a hungry, young, mobile and social group of loyal customers banging on their door.

It is my belief that with API’s and the likes of Robinhood and Stocktwits, that people will be able to turn messages into trades/investments in three clicks from whatever device they are using and from whichever app they choose.

It is fun and fulfilling to see things really come together.

Back to work.

The Magic of Sapho

My partner Gary and I are in the valley for a couple of days seeing founders and a few portfolio companies.

We stopped by the Sapho offices (portfolio company) and were blown away by the product and the growth since our last visit.

Sapho’s mission – like all great enterprise companies – is to increase employee productivity.

Sapho has now built the only employee experience portal designed for the digital workplace. It is easier to see it in action rather than me trying to explain it. Just click the blue ‘see it in action’ button on the home page.

The company was founded by two amazing entrepreneurs Fouad ElNaggar (former head of strategy at CBS and reformed Venture Capitalist) and Peter Yared (former CTO at CBS interactive and five previously acquired enterprise software companies). Peter is the kind of genius, (and friendly) CTO that helps guys like me understand software and solutions. I met them during my time at CBS.

All great enterprise companies take time to hit a stride. For Sapho, the stride is now.

For context into the market size and opportunity that Sapho’s product is already winning customers – Service Now was founded in 2004 and is now a $31 billion employee and customer experience platform and public company.

Founded in 2015, Sapho is already knocking down huge 1,000 person companies and the future is bright.

If you are a CIO or CEO of a 1,000 plus person company, please hit me up and I will intro you to the team.

Software Ate The World and $SWAMP is the New AT&T Stock Symbol

Marc Andreesen famously said ‘Software is eating the world’ back in 2001 or so and than wrote an essay on it in 2011. Here it is. Take the time and read it.

It’s 2018 and software is still hungry.

Here is a chart of the software ETF $PSJ since 2009:

You did not have to get fancy to make money in the markets. You should follow and listen to the people that actually build the things we use everyday. It’s working for me.

Momentum Monday …The Only Thing Not Working is Complaining

Ivanhoff and I did our regular weekly tour of the markets looking for momentum and it is not hard to find.

Click here for the video (22 minutes).

Biotech is working. Oil is above $70. Chinese internet is working. Weed is working. All sorts of technology companies are breaking out. For specific ideas…watch the show.

In other news…

Everyone flew to see Warren Buffett in Omaha. He told everyone a big secret…Apple is a great company.

I am not as diplomatic as Fred Wilson when it comes to Warren Buffett.

Here is the Nasdaq 100 vs. Berkshire the last 15 years (thanks Charlie):

I like that I am on the same team as Warren Buffett with Apple, but it also just makes me feel old and cranky.

At Warren’s tech investing pace I expect Berkshire’s 2026 annual meeting to be at the Moscone center in San Francisco.

By that time I should be 100 percent focused on cryptocurrencies in Switzerland.

Have a great week.