Casual, Informative Conversations: Hidden Gems that could become Mega Brands
I created the Mega Brands podcast too talk about the brands we admire most and to try and identify emerging brands. Through these Hidden Gem conversations, I look forward to introducing you to many hidden gem strategies that could be tomorrow’s Mega Brands.
There are thousands of investment funds and ETF’s to choose from. Figuring out which strategies are the most desirable for how someone invests can be very complex. There’s significant data to suggest smaller asset funds often perform much better than large, bloated asset funds. The bigger a fund gets, the more difficult it can be to navigate different markets. Having a blend of top large asset funds and smaller, differentiated “hidden gem” funds can be the difference between average portfolio performance and stellar performance. As the creator and lead Portfolio Manager for a smaller asset fund with a stellar story and track record, it’s my goal to bring you candid conversations from other hidden gem strategies so you can add some real differentiation into your portfolios. Some strategies are timeless, tracking the global household spending theme via the most relevant brands certainly is, and some are more tactical and timely given the current macro environment. Through these following interviews, I hope to introduce to you many hidden gem funds and ETF’s to help enhance your returns and offer a smoother ride along the way. Please enjoy my conversations with other smart, thoughtful Portfolio Mangers.
In this episode of Mega Brands I caught up with fellow investor and friend, Sean Avory. Sean is the CIO of Avory & Co in Miami and the firm manages $300 million for large institutions and high net worth families. Sean and his team run a highly concentrated portfolio if innovators and transition stories. Some names you will recognize and others you will not. That's what's cool about their portfolio. We hold a few names in common and we both have outperformed the market handily but accomplish it in very different ways. Sean also holds cash and sells puts to collect premium while waiting for their favorite stocks to fall to levels where they want to own the stocks. Sean is a strong outside the box thinker and connects the dots better than most I follow. I love talking to him about markets and the themes that will drive strong innovation into the future. I absolutely love that he's not just another momentum investor, the world is littered with those who just buy the best momentum stocks and use no process for stock selection. We talk about a theme he really likes today which he calls "social commerce" and also the "freelance economy" $FB $SQ $PYPL $PLNT $OMCL $FIVR.
Sean can be reached at https://www.avory.xyz/ and their portfolios are available at $500k minimums.
In this episode of Mega Brands I chatted with veteran tech investor, Paul Meeks. Paul has been a dedicated tech investor for over 30 years. He currently is the Portfolio Manager for the Wireless Fund, WIREX which he took over 11/2018 with very successful results. The fund is very concentrated and is dedicated to technology investing across a variety of industries and thematics driving technology adoption here and abroad. We talked about the stocks we own in common (Brands fund and Wireless Fund) and some of his favorite tech stocks now and for the long-term. We also talked about the tech industry currently given its recent pullback and the sentiment shift away from tech and into value and cyclicals. This is a great conversation for a very important part of the market.
Episode 2 of Mega Brands we talk about 3 things:
1. The new Brands Index after our December re-constitution. I unveil the new consumer and B2B brands that were added. Our goal is to track the important mega themes serving global consumerism over a lifetime of spending. From pampers to starting a family, buying that first house, saving for college and getting your hips replaced, the consumption theme never stops making it the largest investment theme available to investors. We talk about the addition to the genomics revolution, artificial intelligence, digitization, and the consumption supply chain brands helping consumer companies serve their customers better.
2. How to implement an allocation to the global consumer in a portfolio, what a reasonable weight in the portfolio might be and how it can help enhance returns and add some "know what you own and why" logic.
3. The new Top 30 brands using the Brand Relevancy scoring system in aggregate and using the Mega Brands screen which is a sub-segment of the >40 factors I assess.
This is the kick-off episode of the Mega-Brands Podcast Series where we discuss the $44 trillion global consumption investment opportunity with particular emphasis on the Brands that are resonating with global customers. I explain our proprietary Brand Relevance Scoring System, why it was created and what qualitative and quantitative factors are utilized. I'll list the highest ranked 25 Brands from the 2019 Brands Index and talk about the portfolio value these names would have added looking backward. Using some return assumptions going forward, I talk about when some of these great brands could reach the $1 trillion market cap club. Our goal is to invest in the Mega-Trends happening around the world through an allocation in the most relevant brands serving consumers and businesses. We focus on lifetime spending categories and the brands that appear best positioned to benefit from these Mega-Trends. Our goal is to produce strong investment returns primarily by investing in a well recognized, "know what you own" portfolio.
In today’s chat we talked about the travel sector and pent-up demand for travel services, particularly the Airbnb ipomoea coming this week along with Vail Resorts. We also talked about Salesforce’s acquisition of Slack and how we feel about the stock now.
I chatted with Carol & Jason about markets, how we generated strong gains, my views on Netflix and Lululemons purchase of the Mirror and why it’s such a great acquisition.
I chatted with Carol & Jason about markets, volatility and the areas of focus currently. We will continue to see bouts of volatility with short, deep drops followed by strong rallies.
We chatted about what we see next for markets and which brands are resonating with consumers. Being tactical is our focus currently and for the foreseeable future.
My chat with Carol & Jason where we discussed the risks in locking down an economy, short term and long term. Our focus is on defensive business models and using cash to be tactical around the core. For now, it’s hard to be committed to most companies given the uncertainty but volatility allows us to add on dips and trade around the core brands.
I caught up with Carol and Jason at Bloomberg today. We talked about the current market environment, the overbought situation of the Nasdaq at a 12 year channel top and the brands we are focused on today, including my favorite currently, Spotify and a distressed asset play in Fed-Ex.
Volume will continue in a news and algo-driven world. The market is at all-time highs and the consumer continues to offer stability in a slowing global economy. We talk about what stocks look interesting currently: Our focus: Global opportunities, multiple product opportunities, demographic popularity, and high brand love. Lulu Lemon is still a favorite. I give a quick opinion on JNJ as news is delivered after-hours. We focus on the media sector and where we are focused. Hint: the platform versus all the brands creating streaming solutions. We end by talking about Tesla and the short thesis running out of time.
Anthony & I talk about the importance of building a brand as an Advisor. How to resonate better with clients and prospects, how to build a better client service mousetrap, and how to get clients to be their outsourced marketing team. Building a book filled with brand evangelists and a practice that’s highly differentiated puts a team on the road to mega-brand status.
Bloomberg interview: VOL will continue. It presents trading opportunities for contrarians. Algo’s & dark pools drive daily market activity so we need to think like them more than we would like but it allows us to use VOL to our advantage & upgrade the portfolio on big down days.
Bloomberg interview: Talking volatility spasms and the likelihood they will stay with us for a while. We talk about how to navigate through VOL and use it to your advantage. VOL rising due to slower growth, Trump tweets and tariff issues.
Investing City Podcast. Ryan Reeves and I talk about how important brand relevancy is to stock selection and why industry analysts miss this important factor driving customer loyalty. We use RH as an example.
Bloomberg interview: Talking about the return of VOL and deteriorating macro data plus how we are positioned to protect capital in rough seas.
Bloomberg interview: Talking market technical and how we approach a more volatile market from a stock selection & positioning perspective.
Bloomberg interview: Talking sentiment in equities and comparing today to what we saw at January’s peak of euphoria. We talk portfolio names and the brands we like best.
Bloomberg interview: Talking consumer after a scary correction and where we see opportunities today. We also talk about sentiment and the euphoric readings seen in late January.
A Meb Faber podcast. In Episode 88, we talk about the stable consumer spending theme, how to track it via the Brands Index and why a portfolio should hold a dedicated allocation to the primary driver of the economy.
Bloomberg interview: Talking old & new tech and where we see opportunities today. Our focus is on high quality balance sheets, cash cows, and stable growth.
Bloomberg interview: Talking retail stocks from the Schwab Conference in Chicago. The have’s and have not’s of retail and how consumers change behavior at different parts of their life cycle.