The Sunday Drive - 10/06/2024 Edition [#131]
Musings and Meanderings of a Financial Provocateur
👋🏼 Hello friends,
Greetings from Saratoga Springs, NY. Let’s enjoy a leisurely Sunday Drive around the Internet.
🎶 Vibin'
It’s only in the looking back to the era of great guitar bands that I grew up listening to where we see just how truly talented many of them were when it came to live performances. The vocals on this song are nearly as flawless live as they were in the studio recording.
Oh to back in high school… Those of us who came of age at that time were truly blessed by many timeless tunes.
In keeping with this week’s Long Arm of the Law theme, I’m vibin’ to a live performance of Styx’s 1978 hit, Renegade. Enjoy.
💭 Quote of the Week
“A pessimist complains about the noise when opportunity knocks“
— Oscar Wilde
📈 Chart of the Week
Alrighty then… This week’s Chart was pretty eye opening.
In my three and a half decades as an investment professional, I’ve seen a lot of companies ostensibly brought down by (over)zealous(?) regulators.
Truth be told, those regulators have tended to get most interested in flexing the long arm of the law just about the time that their targets are peaking in influence. The EU has been particularly noteworthy in this regard.
I recall the EU’s investigation into the market power of Microsoft’s Windows operating system just as Apple’s Mac OS was starting to gain major market share as well as the significantly growing presence of Google’s Chrome web browser.
I also recall the EU’s relentless focus on not letting Worldcom gain control of the internet “backbone” - the long-haul fiber optic networks over which internet traffic flows between the U.S. and continental Europe. After forcing the divestiture of MCI’s long-haul network to British Telecom as the price of approving Worldcom’s acquisition of MCI, the prominence of undersea fiber optic networks began to wain as other network avenues came online, such as geosynchronous satellite constellations. Not to mention the fact that Worldcom turned out to be the biggest financial fraud in history - something that EU regulators might have spent at least a little time figuring out.
Why the history lesson?
I’m led to wonder what’s peaking now…
Nvidia? Peak semiconductor as the gating factor for AI growth is now power for data centers.
United Healthcare? Peak corporate healthcare as the focus on health becomes increasingly personalized and localized.
Meta (Facebook)? Peak social media as people more and more limit their socializing to group texts among known and trusted friends, and on in-person experiences.
Amazon? Peak stuff buying as folks spend more on experiences at the expense of things.
Kroger? Peak mega-grocery store as food buying becomes more and more locally sourced.
Alphabet (Google)? Peak internet search as AI takes over the role of finding and understanding things on the internet.
Some of the other investigations I do believe hold merit, such as the cases of Live Nation and Visa. But those investigations have long been underway, which probably means there is something to them.
Am I saying that we should fade those companies under anti-trust investigation because they are under anti-trust investigation? No.
What I’m suggesting is that investors should dive deep into the fundamentals of these businesses to look for signs that the party is winding down.
Regulators are always late to the party.
🚙 Interesting Drive-By's
💰 Remora Fish & U.S. Fiscal Fallout - by my friend & former colleague, Henry Peabody
💡 The Playing Field - by Graham Duncan [Link]
🤔 Artificial Intelligence: The Fifth Paradigm Shift - from William Blair [Link]
😎 Do It Your Way - by Morgan Housel [Link]
💸 Finance as Culture - by John Luttig [Link]
👋🏼 Parting Thought
If you have any cool articles or ideas that might be interesting for future Sunday Drive-by's, please send them along or tweet 'em (X ‘em?) at me.
Please note that the content in The Sunday Drive is intended for informational purposes only, and is in no way intended to be financial, legal, tax, marital, or even cooking advice. Consult your own professionals as needed. The views expressed in The Sunday Drive are mine alone, and are not necessarily the views of Investment Research Partners or Cache Financials.
I hope you have a relaxing weekend and a great week ahead. See you next Sunday...
Your faithful financial provocateur,
-Mike
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