Mega-Brands: Investing in Mega Trends Through Mega Brands

More assets are migrating from public bond and equity markets to private markets each year. Why? The volatility profile and return profiles have been better and the private markets can act as a solid diversifier to public markets. Institutions have known this for decades, they have 25-50% of total assets in private markets across Private Equity, Infrastructure, Real Estate, Energy Transition, Private Credit, Growth Equity, etc. HNW retail investors are in inning one of this transition. The best part: the mega brands get the lions share of the asset flows which makes them great investments. These are some of the smartest, most savvy investors around the world and they have $trillions of dollars of dry powder to put to work over time and at attractive prices. This drives better earnings for the asset managers, which drives the stocks over time. Here's the rub: very few investors have private market exposure and even fewer own these stocks. Blackstone recently was added to the S&P 500, I feel confident KKR and Apollo will be added in due time. Currently, about 12% of the brands portfolio is BX, APO, KKR, we love these companies and we love them as investments that also pay a dividend and grow it over time.

Mercado Libre is the Amazon of Latin America. They provide an e-commerce marketplace along with the ancillary products and services to keep consumers engaged and merchants selling products. Those include payments, loans, e-comm, logistics. The have a loyalty program membership similar to Prime which consistently adds new products and services to keep customers loyal and using the services more frequently. The stock has been a monster outperformer since the 2007 IPO and they are just getting started.

Draftkings has become the #1 market share brand in the sports betting and iGaming industry. We love the company, the app, and the stock has been a monster over the last year. The company has made the inflection from unprofitable to profitable and is growing fast. That drives significant revenue, FCF, and margin expansion. In a world where growth is hard to come by, Draftkings stands out over lots of other companies. The sportsbetting TAM by 2030 is estimated to be about $167B from roughly $81B today. If Draftkings gets its fair share, there's a significant revenue ramp from here. The stock can be volatile so use the VOL to your advantage.

Important: this is NOT advice, please do your own research to determine what investments are right for your personal circumstances.

Live Nation and the experience economy is a key theme and holding in the Brands equity strategy. In today's video, I review the live entertainment trends and the record quarter reported by this 800lb gorilla of a Mega Brand.

This is NOT advice, please do your own research and identify investments that make sense for your personal situation.

For more information on the Dynamic Brands equity strategy:

https://www.globalbrandsmatter.com/dynamic-portfolio

Today, I review Amazons earnings, supply some fun facts and remind investors, core retail is worthy of paying attention to. Sum of the parts warrants 50% upside and retail, Ads, AWS inflecting positively offer bigger punch than any other Mega Cap Brand.

I talk about Spotifys earnings report and their cross-over into sustainable profitability. They are well on their way to having 1 billion global subscribers and profitability has a catch-up coming. The stock is +100%+ already YTD but plenty of room to re-rate ahead with the new profits and growth focus.

Weekly NFL sports betting episode: Niners & Eagles discussed.

We are investors of Mega Brands and emerging Mega Brands. Names like Apple, Amazon, Google, Meta, Nike, Lululemon, Visa, Costco come top mind.

The thesis is: Brands Matter. In investing, in life, and in sports betting.

Why mess around with "wanna-be brands" or teams, just focus on the dynasties and emerging dynasties of the NFL.

This week we talk Niners and Eagles, the two only unbeaten teams at 5-0.

Enjoy.

This is not advice, this is for fun.

A quick update on why it's important to own sufficient consumer discretionary and tech exposure and why mega brands are such great investments. I also provide an update on the portfolio and performance along with a quick inflation, rates, and consumer spending trends.

The options markets have become enormous and are large enough that even long-term investors have to pay attention. There's a ton of madness that happens in options markets and its a favorite for traders. Watching the large and unusual options trades being placed every day can offer traders and investors an edge but its costly, time consuming, and complicated. If you have the skill, congratulations, if you do not but want to gain an edge, considering subscribing to an options trading and research service could be an answer.

Today, I discuss the craziness that happens in the options markets and how to sift through all the volume to uncover great investment and trading ideas. I use this service as a compliment to our internal research on Brands and the information is very helpful when I'm looking for active trading around the core brands portfolio, to see when the big money is beginning to get more bearish, and to identify when strong options flows can add more confidence to adding to core long ideas in the fund.

You can check out James' options and commentary service here:

⁠https://jamesbulltard.substack.com/⁠

You can follow him on Twitter @jamesbulltard7

For more information on building a portfolio of the most important, blue chip brands and the emerging brands that could become the next Mega Brand, go to:

⁠https://www.globalbrandsmatter.com/dynamic-portfolio⁠

This is the audio version for the Q2 Brands commentary and portfolio positioning. This is not investment advice, just one mans opinion on markets, brands, and the consumer! Enjoy!