Mega-Brands: Investing in Mega Trends Through Mega Brands

Today's interview where we talk about the global consumption theme, why it's an important allocation to a portfolio and what drove outperformance 2017-2021, why we underperformed in a tough 2022, what the current opportunities are, and finally, how the portfolio is positioned currently between offense and defense-related brands.

For more information: https://www.globalbrandsmatter.com/dynamic-portfolio

To reach out directly to me: [email protected]

This is an all encompassing audio presentation that discusses why anyone would want to invest in the theme of global household spending (it's a $40+ trillion a year theme), why the theme is the ideal core holding for a portfolio, why having dedication to the most relevant brands makes sense, and why the HSUTX fund is the easiest way to get the broad "lifestyle spending" allocation you need. I also remind listeners that most portfolios are chronically underweight the consumer stocks, which is a great complement to the growth stocks or growth funds/ETF's one might own. The Brands fund tends to be equal or underweight technology in favor of being overweight Consumer Discretionary and often, Consumer Staples brands. The best performing 2 sectors long-term are tech and consumer discretionary yet theres 3x more money invested in tech than in consumer stocks. That's the opportunity, having exposure to both sectors through the leading brands is an ideal core portfolio and gets you exposure to some of the most powerful beloved brands ever created. I show what a portfolio of great brands would have looked like going back 20 years to highlight how important "brand relevancy" really is. I also talk about the current portfolio of brands, which can change at any time. I describe the holdings through the sub-sectors of consumption we think are most powerful and enduring today.

If you would like to chat about brands and/or the fund, you can reach me at [email protected] or check out the brands page:

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

Like many in our industry, John started investing (studying businesses and valuing stocks) in college so he's been analyzing businesses and following markets for almost 25 years. John graduated Phi Beta Kappa and Magna Cum Laude from the University of Richmond and graduated with his MBA as part of the Beta Gamma Sigma International Honors Society from Tulane University. John published a book on Investing titled "A Manual on Common Stock Investing" in 2013. For the past 9 years John has been the Senior Analyst, Portfolio Lead, and the Head of Investor Training and Development at The Motley Fool. He recently resigned from the Motley Fool so he could focus on joining a new team at an institutional value firm as a senior analyst.

We talked about a handful of John's favorite businesses and stocks including BRK, O'Reilly Automotive, Nextera Energy, CarMax, and Domino's.

We also talked about the private market alternative asset managers via Blackstone, KKR and tried to dispel the myths around taking marks, and the opportunities for the Alt firms as prices get dislocated and dry powder gets put to work at attractive prices. We also talk about John liking energy and banks as sentiment has turned sour. We both like to buy diamonds (great businesses) in the dumpster (hated and with low expectations). We also talk about the JNJ spin-off of its consumer products brand, now called Kenvue.

Great talk, I think you'll enjoy it.

Follow John on Twitter @JRogrow

For more information on the Brands Fund and investing in the worlds leading brands, please go to:

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

This is the audio version of our 2022 Fund Letter for the brands strategy.

I discuss what went wrong in 2022, where sentiment is and what that could mean for 2023, the history of Fed Funds and inflation versus what we have seen since 2009 and what mega themes and brands we are exposed to as we start 2023.

For more information on the brands strategy & portfolio: https://www.globalbrandsmatter.com/dynamic-portfolio

I check in with great investor, Sean Emory CIO of Avory & Co.

We talked about the macro and inflationary environment and when we might see a rate of change tailwind.

We got back into the company fundamentals, that's what really matters. 

We talked about $NTNX growing business case as well as updates on $FVRR $ZG $CPRI

Nutanix is still a mis-understood name and acquisition target cited in the press on numerous occasions.

Capri is still cheap and their brands Kors, Jimmy Choo and Versace remain strong.

Fiverr is still the largest global platform for contract work and technically, the stock looks like a ball under water opportunity.

Zillow has been dragged down with the real estate group and remains the leader in real estate search and services. Founder and CEO Rich Barton owns about 14/15% of the biz and they have $3.5B in cash so the stock looks quite interesting after a massive drawdown.

2023 should be the year where company fundamentals matter and the year when great businesses set themselves apart from the peers.

You can find more information at linker.ee/avoryco

https://www.globalbrandsmatter.com

Today I chatted with a dedicated Cannabis, Consumer and Consumer Tech investor, Paul Cerro from Cedar Grove Capital.

I met Paul on Twitter ( @paulcerro )and really enjoy his thoughts and reading his notes on substack  https://www.cedargrovecm.com

We talked about the Fed, ZIRP and consumer behavior. We talked about Pauls current views on consumer spending and markets and when markets might bottom. We then talked about his firms new investment in a private pet grooming business and their plans for that new investment. Then we closed on cannabis and where we are with that business line.

I really enjoyed our chat and Paul is a super smart investor. Check out his substack research, I'm confident you will love it!

If you want more information on the brands portfolios and podcasts: https://www.globalbrandsmatter.com/podcasts

The Dynamic brands strategy info can be found here: https://www.globalbrandsmatter.com/dynamic-portfolio

Today's conversation was really fun. I talked with founder of New Constructs Research, David Trainer.

David has a long career in fundamental analysis and founded New Constructs to enhance the research and data gathering process by harnessing technology.

There's enormously important data hidden in company 10Q and 10K's but 99% of analysts do not read these important reports. I am guilty of that myself. These documents are a painful read and David's robust research extracts the important data from these reports and creates much better snapshots of the current business and places a rating on the business, the quality of earnings (economic versus reported EPS) using important and predictive metrics like ROIC, FCF Yield, etc. From there the team compares that to the current stock price to identify if theres an opportunity for investors.

Sell side research is hard to trust, there are too many hidden agenda's inside ratings and recommendations IMO. 

We talk about their Zombie stock report, aka alot of the meme stocks and likely many that ARK owns today. ZIRP allowed profitless businesses to thrive for much longer than they should have and now we are getting back to what's important: profitability, ROIC, compounding EPS through strong capital allocation decisions, etc.

The fundamentals matter most, even if the market is supremely focused on macro>micro today. In the end, the company and its ability to grow, generate cash, compound earnings and cash flows above its cost of capital. Finally we seem to be getting back to the reality of markets, the business and its profitability matter.

https://www.newconstructs.com is a wonderful site to check out to see if they can help you or your RIA practice build better stock, mutual fund, or ETF portfolios.

For more information on the Mega brands portfolio: https://www.globalbrandsmatter.com/dynamic-portfolio

In today's 30 minute quick update I talk about the macro > micro world we live in today, the Fed, the effects on the economy, and which sectors tend to outperform the most. Hint: Tech, Consumer Discretionary, and Healthcare have been the top 3 sectors outperforming the market over most time periods and 30 years of data.  

I discuss the benefit of having a consumer core equity allocation, and the tremendous benefits that can accrue to investors if they are opportunistic and add to those positions when the market dislocates and a bear market arrives.  We are all programmed to sit on our heels today because the Fed is aggressive, not your friend and stock prices are under assault. Taking advantage of these periods to buy more of great businesses aka brands paid handsomely over time.

The next 6 months will provide some of the best long-term buying opportunities we have seen since the financial crisis.  Don't get shaken out folks, big dips in great companies are for buying.

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

Today's podcast was a treat for me, I have been following Adam for a very long time back to his days at Morgan Stanley.

Adam founded Trivariate Research, which combines fundamental, quantitative, and macro analysis to produce actionable research, practical investment advice and analytically rigorous risk management for our clients. They serve institutions, hedge funds, fund companies, and RIA's family offices through their research platform.

"Winners could be those with above average estimate achievability".

We talked about the market today, where estimates are likely headed, which sectors likely have a better opportunity and which could see a more difficult go of it. 

To learn more about Trivariate: https://trivariateresearch.com

To learn more about investing in the world's most relevant global brands: https://www.globalbrandsmatter.com/dynamic-portfolio

Today's chat was incredibly fun. I talked with Paul Sankey, founder of Sankey Research, an energy consultant and advisor to energy companies and large institutional investors. With many decades of energy industry experience, Paul has become THE expert on energy stocks and the energy industry. 

We talked about energy policy, the current supply/demand imbalance and the new and improved investment opportunities across the energy sector as these companies transition from cash destroyers to free cash generators and big dividend payers. 

Paul highlights E&P names, natural gas opportunities, refining opportunities as well as some in the MLP and pipeline space.

Paul is a wealth of knowledge in this category that is still very under-owned by investors of all kinds. His view has been that energy stocks should make up a much bigger percent of the market and indices and the future is bright for the equities that are strong capital allocators and shareholder friendly.

For more information on Sankey Research: https://www.sankeyresearch.com

For more information on the Global Brands strategy: https://www.globalbrandsmatter.com/dynamic-portfolio