Michael’s CIO (Check-It-Out) Report on the weeks just past — events, sarcasm, and global macro reflections
February 13, 2023
THEME: Spy vs Spy or Collaboration?
In business, global politics, and economics, there are often elements of confrontation and collaboration. A lot of that seems to be on display recently.
GL🌍BAL BIZNOMIC$
Fahrenheit or ForeignHeight? Four unidentified or Chinese weather/spy balloons have been shot down by U.S. fighter jets (near Lake Huron, Alaska, Canada, and South Carolina) within less than two weeks—This doesn’t do much for foreign relations—Also, I’m not tempted to download the Chinese weather app and see if it provides better forecasts 🎈🎈🎈😒
Balloon MOIC: I estimate that balloons can be launched for anywhere from $2K to $80K. The heat seeking missiles🚀that shoot them down can cost from $60K to $1MM each depending on the type used. That can provide quite a multiple on invested capital (MOIC) for the balloon launcher!💰
Just do iTffany: The Nike x Tiffany & Co Air Force 1 1837 collab featuring a robin’s-egg💙blue swoosh will drop March 7 will include limited-edition sterling silver shoe accessories, including a shoe horn and shoe brush—What recession?👟
Betcha: This weekend’s Chiefs vs Eagles Super Bowl LVII (57) matchup (final score 38 – 35) and Rihanna concert (yes, she is pregnant with baby #2) was the most bet-upon sporting event in U.S. history (over $1B). Expect e-sports, the NBA, and others to capitalize on this gambling shift—Sports betting is legal in 36 states and Washington, D.C. and mobile sports betting is legal in 26 states🏈🎲
Commercial collaboration: Many Super Bowl advertisers co-branded this year to stand out and maximize ad spend: General Motors with Netflix starring Will Ferrell; Michelob Ultra with Instacart, Netflix and Devereux Golf; Molson Coors with DraftKings; and Heineken with Marvel—Mixed messages or a trend to break through the clutter?—And the eternal marketing question: What motivates people and why?🧐
Spirited Away: In other mixed news, spirits—with $37.6B of U.S. sales and 42.1% of the U.S. market for alcoholic beverages—overtook U.S. beer sales. A resurgent cocktail culture along with rising tequila/mezcal and whiskey sales helped 🍸🆚🍺Cheers!
100MM: OpenAI’s generative artificial intelligence (AI) chatbot ChatGPT reached 1MM users 5 days after launching at the end of November 2022 and by January reached 100MM monthly active users ( 3 to 4 times faster than it took TikTok to reach the same number)—Economically, generative AI has the ability to enhance labor, increase productivity, and create efficiencies (while also overwhelming us with content📚🙄)
Tom & Jerry on inflation: In keeping with our 2023 theme of economic data bouncing around and reversing trend, last Friday’s consumer price index (CPI) report revised inflation higher for October, November, and December, swotting some investors’ near-term hopes for deflation🐱🐭—Incidentally, we still don’t see recession on the near-term horizon
CalifornEV: For the first time, an electric vehicle took the top sales slot in California; in 2022, Tesla’s Model Y and Model 3 (in the number 1 and 2 slots) each outsold Toyota’s RAV4 and Camry (in the number 3 and 4 slots)—This trend has wheels⚡
Try me: Hyundai is starting an EV subscription service that includes insurance, maintenance, and 1,000 miles of driving per month—EV charging not included🙄 [see “Subscribe to Mine” from Feb 2022 for more on the subscription economy]
wHEALTH
Family legacy planning: Prepare your family for the conscientious responsibility of inheriting wealth—A comprehensive and unbiased view can help you make informed and strategic investment decisions to preserve capital, grow, and maintain family wealth and health
CONTENT
Neutral Milk Hotel’s indie rock and psychedelic folk album “In the Aeroplane Over the Sea” was released 25 years ago🎶—Also released a little over 25 years ago, the movie “Titanic”🚢
Heart of Glass: The girl in Johannes Vermeer’s “The Girl with the Pearl Earring” is only wearing glass earrings according to the Rijksmuseum’s curator🖼
PERSONAL
Bank of Japan: Japan’s largest financial publication, NIKKEI, quoted Running Point and me regarding Kazuo Ueda’s nomination to be the Bank of Japan’s new governor💴
TECH: Global Finance Magazine (New York), Finance Magnates (Cyprus), and Economy Middle East (Dubai) quoted Running Point and me over the last couple weeks regarding artificial intelligence (AI), generative AI, technology trends, Microsoft, and financial technology (fintech)👨🏽💻
Branded cards: Running Point and our senior financial advisor, Liz deSousa, CFP®, CDFA®, were quoted by Fortune regarding the rise of branded and store credit cards💳
HF & VC: Find me this week at Barclay’s Los Angeles hedge fund outlook and a venture capital trends and perspectives event
Happy Valentine’s Day and make it a great week😊
Michael
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Michael Ashley Schulman, CFA
Partner & Chief Investment Officer
Running Point Capital Advisors, it’s your family office
“We deliver custom investment solutions, family office services, innovations, and unique perspectives to you and your family—it’s your family office—you can emphasize your enjoyments, priorities, and legacy.”
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-15
