The Best One Yet - 🧋 “Bubble Tea Bubble” — Boba’s breaking point. Apple’s Vision Pro secret. Norway’s phone-ban experiment.

Episode Date: May 6, 2024

Bubble Tea stocks are IPO’ing minting boba tea billionaires — But bubble tea is actually the perfect case study on a financial bubble… The Bubble Tea Bubble.Apple just announced its worst earnings report we’ve ever seen — And we think we discovered its secret numbers on the Apple Vision Pro.Norway banned smartphones in schools and we just got the experiment’s results — Turns out iPhones should be in lockers, not pockets.Plus, one airport in Japan has a perfect record with bags — They’ve never lost a single suitcase in 36 years… and we’ll tell you how.$AAPL $SBUX $SPYSubscribe to the best newsletter yet: tboypod.com/newsletterWant merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.comFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YouTube Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. Welcome back. It is Monday, May 6th, and today's pod is the best one yet it's a T-Boy. The top three pop business news stories you need to know today. Jack, my co-host buddy, how is your sinko to Berkshire Gala Derby weekend, my friend? I went full Stein Erickson. I actually went spring skiing.

It was the last day of skiing at Sugarbuck. T-shirts? What are we talking about here? What kind of wardrobe? Suns out, guns out. I rocked a quarter zip, and that's it. Not too shabby. Well, Jack, Barry's kicked my booty, but I'm back for you, baby.

Was there Velcro? Oh, so much Velcro. Love that cult. Jack, three stories for today's show. What a fantastic show. What do we got, man? For our first story, should smartphones be banned in schools? Well, Norway tested it out, and we just got the results.

Norway's great smartphone experiment makes the question of smartphones in schools an absolute no-brainer. For our second story, the hot new IPO this year. is bubble tea. That's right, boba tea chains are IPOing for billions. But we noticed that bubble tea may actually be facing a bubble tea bubble. And our third and final story is Apple. Apple just announced its worst earnings report we've ever seen from Apple. But Jack and I figured out what every single one of you wants to know and what is that, Jack? Did Apple sell any Apple Vision pros last quarter? How many Vision pros do we sell? We'll tell you in the third story. We got some information. But yeties, before we hit that wonderful mix of stories. I mean, now that's a lot of

you kick off a week. I love the mix today, Jack. Great mix. We've covered some great streaks on this podcast. Some amazing streaks. Yetis, we told you about Joe DiMaggio's 56 game hitting streak. Domino's Pizza's 113 straight quarters of growth. My 36-year streak without a cavity in my teeth, Jack. That is an incredible streak. But yet he's the greatest streak of all. It's over in Kensai, Japan. Ah, Kensai Japan. Because Kensai Japan's Kensai Airport. hasn't lost a piece of luggage in 30 years. That's right. Ken Sai International Airport hasn't lost a single suitcase since 1994.

In fact, this airport opened in 1994. Which means they've never lost any suitcase ever. In the entire history of themselves. Their record is impeccable. Ten million bags last year, every single one got to its own head. Ten million bags. Nobody even lost a toothbrush neck. Yet is your way. It didn't go away.

Your Sampsonite is safe, baby. And your Ramoa is okay. Now, I'll tell you, the bag handler is over to LAX. They hate this headline. Oh, Jack, JFK, they're feeling jealous over there. Because yet, he's for context. On average, for every 1,000 passengers in the U.S., 7.6 suitcases are lost.

And Jack, could you sprinkle out a little more context for us over there? American Airlines is the biggest luggage, a loser of all. So Jack and I wanted to know, we had to know. We got to know how does this one Japanese airport have a perfect baggage record? Here's what they do. They triple check. They got three different bag handlers handling each one of the bags.

They don't single check. They don't double check. They triple check that luggage. So you got six different eyeballs triple checking each suitcase. Yeah, these nobody's perfect, right? Bestie's perfection is unattainable. Except for Japan's Kenzai Airports.

Oh yeah. They're perfect. They're perfect. And we appreciate perfection. Jack, let's hit our three fantastic, maybe not perfect. Story. 15 years before this song.

Two boys from the Northeast met in the dorm They had an idea to cause a cultural storm It's the best one yet but the best is an norm Jack Nick, that's it I don't even think they need to practice 50% that's a fat tip T-boy City on your at list If you know you know because we're ready to go

We can't wait no more so just start the show Start the show First a quick word from our sponsor For our first story A major study in Norway just measured what happens when schools ban smartphones. The results were amazing, and they confirmed everything you thought they would confirm. Oh, Yadies.

You know, Jack and I recently became parents. But Jack, I don't know. When do you give kids a cell phone these days? What's the deal? I didn't get a cell phone until freshman year of college, Nick. But Jack, the evidence shows that in developed countries throughout the world, what percentage of teenagers own smartphones? 90% of teenagers in developed economies own smartphones.

And Jack, how often and how much a lot of the world? those teenagers using those smartphones. On average, three hours a day outside of school and an undisclosed number inside of school. We're going to round up on that one. Yet he's back in 2006, Jack and I passed handwritten notes desk-to-desk risking detention.

But kids these days are air-dropping memes of each other's avatars on the cloud. You get that one, Jerry? Oh, Jerry got it. But yet he's to keep kids focused and behaved. Some schools have started to ban phones in the classroom. But according to UNESCO, only one out of four schools

globally have done that. Only one out of four schools has rules limiting cell phones. So in 75% of the schools in this world, kids are scrolling instead of learning. They're scrolling instead of learning. They're lo-o-ling instead of spelling. They're poking instead of working. Ladies, here's the story that Jack and I found fascinating over the weekend and we could not wait to whip up for you. One PhD student in Norway just published a paper at the Norwegian Institute of Public Health. And here's what she did. She looked at the schools in Norway. that banned smartphones. And then she measured the impact of that ban four years later.

And the results were exactly what you would expect. The smartphone ban was hugely beneficial across the board. Four big ways how. First, the phone ban resulted in a 60% drop in doctors related to psychological issues. And girls visited their primary care doctors 29% less often after the smartphone ban because their mental health was better without social media in the classroom. The second big win with the smartphone ban, a huge drop in bullying for both boys and girls, down 43% and 46%. The third big benefit of banning smartphones, girls had higher academic performance, especially girls from lower socioeconomic background. And finally, the fourth big win of the smartphone ban. What was it, Jack? The stricter the smartphone ban, the more amplified and the more positive

the results. Sussie, swoop out the whiteboard. What we're saying here is that the more they banned the phone, the better off the kids. By that logic, schools should say, no phones within a mile of the school. And then you'd have like a utopia of learning in there. If we see a single phone here, we're losing pizza Fridays, people. Now, honestly, this isn't a surprise,

but it's still refreshing to see official results confirm our hypothesis. It also happens to be Zuck's worst nightmare, doesn't it, Jack? Adam Grant, a Wharton professor, summarized the study with this. Smartphones belong in locker. Smartphones, they may belong in your locker, not in your pants pockets.

And definitely not in your hand when you're in school. Okay, kids? Oh, it's our Uncle Jack over there with the phone lecture. Now we know what you're thinking. What comes next? Well, Norway is making some icy moves right now. Norwegian politicians read the paper from that PhD student, and they're already making moves to ban smartphones nationwide in all of their schools.

You can't DM your buddies until after supper. So, Jack, what's the takeaway for our buddies who are everyone with a smartphone? We've actually experienced a phone ban firsthand. And guess what? It worked. Yeties, five years ago, Jack and I were at business school. Jack was at University of Michigan and I was at Warden in Philadelphia. And on the first day of Warden, I got a shocking surprise.

The surprise that Nick called and told me about, phones were banned in all of his classes at Warden. In fact, all tech was banned in the Warden Business School classrooms. Like, you could only take notes with pen and paper, Jack. Like, we went full Amish for all the classes. And the reaction? Actually, Jack, people were kind of outraged at first because people were coming from like a work environment. They're like, how am I not going to be typing right now? Yeah, really stress tested your cursive that you learned in third grade. Those S's getting me every time. But yeties, just a couple weeks into the first semester, it became clear.

The smartphone ban in business school worked. Nick and all of his classmates saw the light. They turned from phone ban critics to phone ban converts. Honestly, Jack, the class was more engaged. The comments were more thoughtful. And your brain just felt better afterwards because he'd actually focus the whole time. What would you have been doing on your computer if you had it? Booking a vacation? Checking Twitter? Scroll on your email? Probably booking a ski trip for like President's Day weekend, to be honest.

And that's not why you spent $80,000 a year at war. Yeties, Jack and I were fascinated by this study because of the results, but also because of our experience. A phone ban sounds extreme. But from experience, we can tell you it works. Once you turn it off, you don't need to turn it back on. The challenge is the turning it off part. Oh, Uncle Jack with the lecture.

I was 18 years old. For our second story, bubble tea isn't just taking over your block. Bubble tea is pouring all over Wall Street right now. Boba tea brands are IP on. But now Starbucks is joining that bubble. Jack, are we saying it's a Bubba tea bubble? Yes, we are. And I don't even know what a boba tea is.

Oh, well, Jack, oh, and then we've got to start this story like this. Educate me, Nick. Educate me. If I go on Google Maps right now in San Francisco and search for boba tea, you know what I see, Jack? A lot of boba teas. 18 places in a one mile radius. That is boba saturation. Yeah, it is bubble tea, a.k.a. is a tea with some bubbly balls. That's what it is.

You've seen it before you tasted it. And it's the fastest growing refreshment in the United States right now. Get this. In the last five years, there's been a 60% surge in the number of boba shops bubbling up across American cities. Kung Fu tea is the name of the last. largest boba chain here in the United States. They're making 250 million a year in revenue. Now, like me, Yeti's, you might have seen one of these. It looks like a glass of milk with a bunch of marbles at the bottom of the glass. I'm very intimidated by what those balls are. Nick, are they squishy? Do they pop when you bite them? Jack, when I dive in tea boy style to my mango jasmine boba tea,

with extra bubbles, by the way. Always get the extra bubbles. What are those balls, dude? The balls are tapioca balls, my friend. And what is tapioca? Tappioca is a rice, like starch from the cassava plant. And yes, it is filled with carbs, but delicious carbs. So when you chew it, is there liquid inside the balls? Or is it just like a solid ball? No, it just kind of hits your throat. It makes you a little uncomfortable. But Yeti's Boba was invented back in 1980 on the island of Taiwan and it took off from there. And since it took off so much, tapioca for the Boba balls is now Taiwan's number one food export. Yetis, Boba tea has become so popular that Boba has its own emoji. That's when you know you've made it. And

Boba tea has gotten so popular that Starbucks is adding bubble tea to its summer drink menu. Starting today, you can order a boba tea at Starbucks. And in fact, and I'm running, I'm running out of octaves here, Jack. Bobo tea has gotten so, so popular that six Chinese boba tea companies are going public. I'll repeat it so that Nick doesn't have to because he might injure himself. I'm going to take a breath and drink some tea. Six different boba teas have IPOed on the stock market this year. Boba tea brands. They're going public right now. Don't pop your champagne. Pop some pearls.

Bova tea is pouring onto Wall Street and investors are just discovering what the heck this is. All right, Jack, let's jump in T-boy style. Last quarter, two of the biggest boba brands on earth IPO. One's named Mik Tzu and one is named Gouming, both in China. Both of those companies are worth over a billion dollars based on their stock price. All right, let's look at Mik Su. Mik Tzu, whose name means sweet snow like honey in Chinese, has how many stores in China? 36,000. Could you pour on some context for us over there, please? There are nearly as many Mixu stores just in China as there are McDonald's and Starbucks stores globally.

So, Jack, I got to ask, how did all these Boba T IPOs do over the last few months? They've done Boba Bertle. They're down big. Yeah, it is. The new boba stocks, they have plummeted, and it has not been delicious out there. One fell by 40%, another is down 88%. This is a tapioca travesty. So, Jack, we got to ask, you got to ask, everyone who's in line for Boba tea over here has got to ask, what is going down in that thick straw? I don't know because I still haven't tried one. But I know the business behind it now.

I got to get you some mango Jasmine. So, Jack, what's the takeaway for all our buddies sipping on Boba tea? Boba is the perfect example of a bubble. This is a bubble tea bubble. But yet, Jack and I should make something clear. There is huge demand for Boba. There has been for years, and this is not a fad. Boba is not going away.

So the problem for boba isn't lack of demand. The problem over in Asia, where the majority of boba sales are, is too much supply. It's not demand, it's supply. Because usually we see bubbles in the stock market. The price of a stock outgrows the underlying value. That's a bubble. But this is an economic bubble. The number of physical boba shops simply outgrew the underlying demand for boba tea.

Here's the cycle that happened. First, to chase demand, there was a surge in new boba stores that just got out of control. 36,000 Mixu stores, that is so many stores, and it's just in China. And then there was so much competition among those boba stores that the prices started dropping. One chain sells everything on the menu for $1. Just $1. And the result of too many boba chains selling drinks for way too cheap? What was it, man?

The result was a price war, and none of the Chinese boba chains are profitable right now. That cycle is why we're seeing so much thirst for boba, but none for boba stocks. It doesn't matter how much you love boba. We're in a bubble-tee bubble. And I promise I'll try my first one soon. Now a quick word from our sponsor. For our third and final story, Apple, just announced the worst earnings we've ever seen from them. And yet the stock rose because Apple wagged the dog.

Yeties, 10 years ago, when Jack and I launched our media startup, Jack, what was like the highlight everyone was talking about those days? Every time Apple announced earnings, we had to cover it. It was like must-see TV. iPhone, it was taken over the world. iPad, it was also taken over the world. Sales for Apple seemed to be doubling every single year. It was insane.

So when we saw on Friday, the Apple's revenues shrank? Last quarter? Wait, not just shrink. Shrank by 10%. We were shocked. Yeties, we're talking George Costanza shrinkage. Shrinkage, a word that was not even in Steve Jobs' vocabulary, Jack. Steve Jobs doesn't know what the definition of decline even means.

I'm sorry, you're going to have to come up with a new English term. But Nick and I checked the numbers. Last quarter was the worst sales shrinkage for Apple since 2016. So Apple shockingly shrank last quarter and we identified two specific reasons why. First, iPhone and iPad sales fell pretty big. iPhone sales fell. Because honestly, iPhone 15 and iPhone 14? Like, what's the difference between these two things exactly?

If you have an iPhone 14, I can't tell you why you need a 15. I think the camera is more camrier, Jack. I think that's the difference. There's more pixels for sure. but like, is there a limit to the number of pixels? The camera's more camrier. But the reason number two why Apple's sale shrank was actually something surprising. The Apple Vision Pro failed to save the day.

Yet is the Apple Vision Pro. The headset that everyone's been talking about was the boldest product Apple's launched since the iPhone. That wasn't Steve Jobs' vocabulary. And Apple just announced their first quarter. It was the first quarter that showed the sales of this new product. It's kind of like at a wedding. This was like the first look. We get to see the Apple Vision Pro sales.

I was excited. I was excited to see how sales were. So, Jack, tell me, how many headsets did Apple just sell? Apple didn't say. In fact, Apple didn't even mention the words Apple Vision Pro a single time in their earnings report. Instead, Apple buried the results of Apple Vision Pro into the wearables category, along with the Apple Watch and the AirPods. And they didn't tell us how many Apple Vision pros they sold. They declined to tell us.

Oh, and that's not all, is it, Jack? Get this. Sales of that category with the Apple Vision Pro, wearables, shrink. Sales shrink for wearables. For the first quarter that wearables included the Apple Vision Pro, it turns out the Apple Vision Pro didn't help the wearables. It hurt the wearables. Now, Tim Cook did say one thing on the call with analysts and reporters about the Apple Vision Pro. Tim Cook, the CEO of Apple, did say that more than half of the Fortune 100 companies in America

have already purchased a Apple Vision Pro. Tim's trying to convince us that spatial computing is best used at work by these companies rather than at home because, like, you don't know anyone who uses them at home. But I'm sorry, Jack, can we jump in T-boy stop to that quote? He said half of Fortune 100 companies purchased a Apple Vision Pro. Can you translate that? All that actually means is that they've sold 50 headsets. Like, maybe Apple only sold 50 of these things yeties. That could be true. Hey, Siri, is 50 a lot of headsets or a little headsets? Actually, Jack, let me try this.

Hey, Siri, how many Apple Vision Pro headsets did you? you sell? I found this on the web. Yeah, I didn't see anything here, Jack. Did he give us a good answer? So Jack, what's the takeaway for our buddies over at Apple? Apple just wagged the dog. Yeties, Apple's leadership, they knew weeks ago they had a bad first quarter.

So they asked each other a big question. How can we wag the dog? Wag the dog when you create an attention-grabbing diversion to distract people from the damaging news. Besties, you may know wagging the dog from politics or from the 1997 movie with Robert De Niro and Dustin Hoffman. But you might also know Wag the Dog from Wall Street, because Wall Street companies have been wagging the dog recently. For example, Tuisco, Tesla announced their worst quarter in years,

and yet the stock still rose. Because Elon said, look over here. We're working on self-driving robotaxis. That's Wagging the Dog. And last week, Apple announced their worst quarter in years, but the stock still rose. Because Tim Cook said, look over here. We're doing the biggest stock buyback in corporate history.

That's Wagging the Dug. dog. And in the long term, Tesla and Apple eventually, they got to start growing again in order to keep their stocks up. But in the short term, they can distract investors with, look over here, announcements. That's wagging the dog. It happens in politics, and it's happening in business too. Hey, Siri, are you wagging the dog? Classic. Jack, can you whip up the takeaways for us to kick off the week? Norway is moving to banned smartphones in schools after a study showed the huge benefits to students. Yeah, we've experienced a phone ban in school, and we can tell you it works. For our second story, it's Boba T's. They're the fastest growing drink in America, but Boba T's

stocks are down. Boba T, it's living through a bubble tea bubble. And our third and final story is Apple. Apple announced its worst sale shrinkage since 2016, and they didn't even tell us how many headsets they've sold. But Apple wagged that dog with a flashy stock buyback, so the stock rose anyway. But Yeties, this pod's not over yet. Here's what else you need to know today. First, we got the April jobs report came in on Friday. It wasn't too hot. It wasn't too cold.

It was just right. 175,000 new jobs last month. 175,000 new jobs is actually a slowdown from previous months, which means there's less hiring happening. But investors loved it. They loved it. Because in order to slow down rising prices of inflation, we need the economy to slow down a bit, too. So that Goldilocks jobs report boosted stocks on Friday on hopes that inflation will come down. And second, Florida has officially banned lab-grown meat. Real meat, grown in a lab,

cannot be sold in Florida. Florida officials made that announcement at the top cattle-producing county in the state. So, Jack, it sounds like lab-grown beef isn't necessarily a health issue, maybe a bit of a political issue. It's a decision that'll win votes for the cattle ranch and crowd. Oh, cattle farmers will love it. And finally, the number one free app in the app store on Friday. Get this. It was Krispy Cream. Krispy Cream Donuts was beating TikTok, Instagram, Gmail, you name it. Krispy Cream. They launched a giveaway last week where you had to download their app.

And apparently everyone downloaded it and everyone got a glazed. I would download an app for a free donut. Diet starts tomorrow, baby. But budget diet starts today because it's free. Yeah, you still Krispy Cream shareholder by the way? Yeah, pretty random investment I have. But I'm proud of it. I'm glad those glazed are some profit puppies for you.

And now time for the best fact yet. This one's from our weekly newsletter that goes out every Saturday morning at 7 a.m. Pacific. What do we got, Jack? The Wall Street Journal just published an article helping us figure out how to sleep better. The ROI on sleeping, Jack, what kind of investments do you got to make so you can get a full eight hours out there? According to Uma Nidu of the Mass General Hospital, the optimal meal for sleep is a mushroom omelet with a side salad topped with flaxseed and walnuts. How are we going to wash this down, Jack? A warm glass of milk.

Yeah, it turns out a warm glass of milk. milk actually does help you sleep just like your nana taught you. Now, since that's such a random meal, it's not that useful. Like, I'm not going to start eating that. You're not going to have that every night? But I have thought of a great use case. Airlines should serve this to passengers right before red eye flights. Help them sleep on the plane.

Hey, Delta, let's make it happen. I would trade out comfort plus for this alma. Yeties, you look fantastic to kick off the week. Jack, you know what I'm thinking right now, man? What are you thinking? I'm thinking we're going to Los Angeles next month and we've got to get you some boba team, man. I'm looking at you right now. I feel like you're like a taro milk kind of a guy.

Maybe a little horchata. Maybe we throw some coconut in there with the bubbles. I mean, I was very into Mixu's Japanese translation. What is it? Snow that tastes like honey? That sounds wonderful. You know what? You're a mango Jasmine kind of girly.

And I'm here for it, baby. Yeah, it is if you've got an idea of what Boba Jack should try when we're in Los Angeles, answer right now on Spotify or YouTube. And let me know. Am I supposed to swallow the, like, ball things, or bite into them? Yeah, of course you're supposed to swallow. Well, no, do I buy it?

I didn't do him first or do I swallow him like a pill? Oh, this may not go well. Yetis. Extra tapioca, if you know, you know, Jack and I will see them all. And before we go, a happy birthday to my fantastic wife, Molly Martel, who's celebrated with all her friends doing a flower-making class today, Jack. That's what's happening on Cinco de Molly. And the only thing I have to say about Molly, great girl.

She loves peonies and a great girl. She lived down the hall from us in college. It's amazing story. And we've got an anniversary here. Andre and Daisy are celebrating five years together in Jefferson, Georgia. Congratulations to Preston Stevens in Salt Lake City, Utah, who just landed a brand new job. And LeVar Williams in lovely Los Angeles just launched a marketing consulting business. Get this guy your marketing.

And congratulations to Dia Thakar in Jersey City, who just got promoted to manager over at Omnicom. And Jack, we got more birthdays. Aralia Singh in Arcadia, California, is graduating from UCLA with a whole bunch of PhDs and is celebrating a birthday while she does it. Happy 13th birthday to Dominic D'Cure in Culver City, California. During 13 years old and just having a fantastic day. And Aska in Billings, Montana is the best wife yet also having a birthday. And happy birthday to the beautiful, talented Alexandria Toh in Valhalla, New York.

And finally, a happy birthday to Hayden Cole in Nashville, Tennessee, who's celebrating with the cutest family year. This is Jack. I own stock of Krispy Cream and Nick and I both on stock of Apple. That was really funny. Can I have a fork a knife bleed? We're going to get kicked out of there. I've got a reputation in these joints, Jack.