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Today's big stories

Nike reported a mixed set of quarterly results after a few issues at America's ports
One leading economics professor thinks the majority electric vehicle stocks are guaranteed to fail – Read Now
Friday might’ve been a turbulent day for investors after multiple options and futures contracts expired

Ship Gets Real

What’s Going On Here?

Nike might not be the diehard ports fan it used to be after reporting a mixed set of quarterly earnings late last week.

What Does This Mean?

Nike’s performance last quarter was an emotional rollercoaster: on the upside, the retail giant turned up a higher profit than analysts were expecting, but on the down, its revenue came up short (tweet this). Likewise, total ecommerce sales grew almost 60%, but sales in North America – its biggest market – dropped 10% from the same time last year.

The shortfall, Nike said, was partly down to shipment delays that have lasted almost a month and left its products sitting around US ports. Clearly, that’s meant neither Nike nor its network of retailers – from department store Macy’s to sports specialists Dick’s – are able to sell them. And even when the goods do finally arrive, they’ll be so last season that those retailers might have to offer profit and brand-damaging discounts to get them off the racks.

Why Should I Care?

For markets: Spare a thought for the little guys.
Nike’s stock dropped 4% on Friday, but it might’ve fallen more if not for its positive outlook: the company is – arguably prematurely – expecting European lockdowns to ease and its stores to reopen next month, and thinks its Stateside port issues will get better as the year goes on. Smaller American companies might not be so lucky, mind you: they don’t have the corporate manpower to navigate the US shortage of drivers or the global shortage of shipping containers.

The bigger picture: Someone has to pick up all those packages.
Over a third of Nike’s sales are made online now, and that surge in demand is being met by the likes of FedEx, which reported stronger-than-expected earnings of its own late last week. The logistics company’s stock jumped 7% on Friday, and investors seem so positive on the sector that they sent rival UPS’s shares up 2% too.

You might also like: The other unstoppable trends you might want to invest in.

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🙋 Ask a question

2. Analyst Take

Why Tesla Is “Way Overhyped”

What’s Going On Here?

When investors pick stocks, plenty of them look to companies in fast-growing markets with a lot of potential. And that makes sense, on the face of it.

But Dr Brad Cornell, professor of economics at UCLA, thinks it’s exactly those stocks that might just fall victim to a “big market delusion”.

In other words, if everything’s priced like a winner, you’re likely to end up paying way too much for a loser. And sure, you might pick the one Amazon, but the odds are stacked against you.

Think about it: over a thousand car companies were started in the States last century, but basically only three were left by the year 2000 – Ford, GM, and Chrysler.

Which ties neatly into what Brad thinks is the next “big market delusion”: electric vehicle stocks – including NIO, Fisker, and, yep, Tesla.

So that’s today’s Insight: why Brad thinks EV stocks are in the middle of a big market delusion, and what happens when investors snap out of it…

Read or listen to the Insight here

Who doesn’t love a productivity hack?

At work, it’s usually a choice between doing things well and doing things fast.

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That’s probably why more than 25,000 teams already use Pitch: join them today.

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Stocks And Scares

What’s Going On Here?

A “quadruple witching day” on Friday saw several options and futures contracts expire, and the resulting volatility might’ve spoooooked the market.

What Does This Mean?

Four times a year, a lot of major derivative contracts on US stocks all expire at once. That leaves investors with a decision to make: buy and keep the related shares, or “roll forward” those contracts by buying ones with a later expiry date.

There were $655 billion worth of single stock options set to expire on Friday, according to investment bank Goldman Sachs – the third-most ever in a month. Throw in the quarterly rebalancing that always tends to happen within and between stocks and bonds, and the scene was set for higher-than-normal volatility.

Why Should I Care?

The bigger picture: Retail investors matter now.
Most institutional investors will have been prepared for the higher volatility, but it might’ve come as a surprise to some retail investors. And while the big-hitters haven’t historically paid much attention to things that unsettle their smaller counterparts, they might want to start doing just that: retail investors now hold 35% of all US stocks and – thanks to the recent surge in popularity of commission-free trading apps – they account for one-fifth of all stock trading.

For you personally: Rebalancing helps you maximize your profits.
Not all professional investors rebalance their portfolios, but those that do might find themselves buying more bonds – whose prices have fallen and yields have risen in the last few weeks – at the end of this quarter. And that might be a smart move, if analysis from East West Investment Management is anything to go by: the firm’s dummy portfolio of Canadian stocks and bonds – split 60/40 – performed better when it was rebalanced than when it wasn’t, and best of all when it was rebalanced on a quarterly basis.

You might also like: How to rebalance your own portfolio.

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🙋 Ask a question

💬 Quote of the day

“Some mornings it just doesn’t seem worth it to gnaw through the leather straps.”

– Emo Philips (an American actor, stand-up comedian, writer, and producer)

Tweet this

Carnot Compression by numbers

You might never have thought of investing in a sustainable, oil-free air compression company like Carnot Compression, but the numbers tell you all you need to know…

12%: the percentage of energy in the industrial sector consumed by air compressors.

$227 billion: the energy cost of electric-motor driven compressors every year.

20%+: the amount Carnot can reduce those costs by.

$40.3 billion: the size of the compressor market by 2025.

$250: all it takes to get invested in Carnot Compression.

So head over to StartEngine, and find out how more about investing in this massive market.

Find Out More

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📚 What we're reading

Surprise: 2020 was bad for mental health (IFL Science)
A cashback no-brainer (Jasper)*
Does digital birth control work? (STAT)
Hotels are bumping up their perks (Eater)

*This sponsored content helps us keep the newsletter free.

🌎 Finimize Events

❓ The Finimize CEO: more myth than man ❓

They say Max Rofagha, founder and CEO of Finimize, bathes nightly in mink oil to keep himself looking young. They say he only sleeps in 10-second bursts with his eyes open, and only ever mid-Zoom meeting. They say that when he has a brainwave about how to improve Finimize, he crawls up the wall and spins his head round 360 degrees.

Is any of this true? Ask him yourself out our Finimize Monthly Town Hall on Friday (and share your ideas with him etc. etc.)

💉 Investing In Healthcare: 6pm UK time, March 22nd
👩‍💻 The Possibilities of a She-covery: 1pm UK time, March 23rd
🤑 A Guide To Crypto In 2021: 6pm UK time, March 25th
🎙 Finimize Monthly Town Hall: 1.30pm UK time, March 26th
🔥 The Wonderful World Of SPACs: 2.30pm NYC time, March 26th
😎 Crowdfund Club: 6pm UK time, March 30th
😡 The Influence of Behavior on Investing: 5pm UK time, March 31st
♻️ ESG: The Environmental Perspective: 6pm UK time, March 31st
⏰ Is It Too Late to Invest in Bitcoin?: 1pm UK time, April 1st
🥕 Crafting a Vegan Portfolio: 6pm UK time, April 6th
🚀 The Rise Of The Retail Investor: 9pm Hong Kong Time, April 6th
👀 How to Spot the Next Bitcoin: 12pm NYC Time, April 7th
💵 The Surge In Digital Payments: 6pm UK Time, April 8th

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Finimize - 🤫 Tesla is "way overhyped"

Today's big stories

Ship Gets Real

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Why Tesla Is “Way Overhyped”

Who doesn’t love a productivity hack?

Stocks And Scares

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Carnot Compression by numbers

❓ The Finimize CEO: more myth than man ❓

Older messages

💰 Accenture's 1 trillion dollar breakthrough

👍 Yes to cheap stocks

🚘 Watch your bumper, Tesla...

🤑 America's new most valuable startup

🤩 Psychedelics are dope

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