S&P, Nasdaq Close at New Record Highs

Dow: +0.95% | Nasdaq: 0.69% | S&P: +0.58%

Catch Up Quick

• A new company called Space Perspective will take passengers up to see a 19-mile-high view of planet Earth using giant balloons

• Goldman Sachs upgraded electric vehicle manufacturer Magna ($MGA) to buy → sees a staggering 30% upside

• A jet owned by candy giant Hershey made an unusual trip to Omaha → indicating possibility of Warren Buffet / Berkshire Hathaway deal

• Even during the pandemic, in it’s 50 year history, Southwest Airlines ($LUV) has amazingly never laid off (or even furloughed) an employee

• Microsoft’s CEO said “the world needs a more open platform” → potential jab at Apple, which is built on a highly closed platform

• ProPublica leaked that Peter Thiel owns a Roth IRA account worth $5B

• Piper Sandler downgraded Dollar Tree as inflation may erode margins

• John McAfee, the founder of security software giant McAfee, was found dead in his prison cell after a Spanish court agreed to extradite him to the U.S. on tax evasion charges

• Andreessen Horowitz launched a new $2.2B crypto fund

• Citi ($C) is contemplating a move into crypto markets after surging interest in the asset class from clients

• Deutsche Bank upgraded MGM to buy → cited Las Vegas strip comeback and improving margins

• Electronic Arts ($EA) announced a $1.4B purchase of Playdemic, a maker of popular mobile games such as Golf Clash, from Warner Bros

• Tesla opened its first solar charging station in China (the largest automobile market in the world) → shares ($TSLA) are up 9% since announcement

Thought of the Day

• We have previously written that investment ideas do not explicitly need to be linked to fundamental or technical analysis, but simply why asset demand may increase

• Fundamental attributes of a business only sometimes affect demand for its shares → demand always affects price

• For example, GameStop ($GME), AMC ($AMC), and Wendy’s ($WEN) are among meme stocks that have experienced colossal price surges at some point this year → a trend we predicted back in January

• These buying patterns were more so caused by masses of retail traders (everyday people) enabled by frictionless public markets access (Robinhood) as opposed to strategic corporate decisions that increased earnings (to which shareholders in theory have a claim)

• Mechanically, the proliferation of internet-based stock market discussion created demand that skyrocketed stock prices

• And while many associate huge volatility (price swings) with randomness, we believe underlying psychology can be used to approach the meme stock paradigm with a more scientific lens

• To keep it simple, think about what GameStop, AMC and Wendy’s have in common → all are highly consumer-facing companies whose products have brought joy to customers for decades on end

• Positive life experiences are likely to surface alongside these names, in which senses of safety and familiarity may facilitate transmission in the context of retail market participation

• On a related note, it might seem interesting that Krispy Kreme donuts is preparing to enter the stock market, looking to raise up to $640M at a $4B equity valuation → the company is slated to start trading July 1st

• Obviously, picking stocks that could blow up on Reddit and other platforms is highly speculative

• Though with a ticker symbol of $DNUT (lol) and a growing eCommerce delivery model easily digestible by amateur investors, Krispy Kreme is definitely worth watching as internet goers search for investment ideas!

  Other Predictions