The Best One Yet - 👟 “Dad Shoe Destiny” — New Balance’s renaissance. Ulta’s Warren Buffett win. Sports Betting vs. Stock Investing.

Episode Date: August 28, 2024

New Balance just passed Under Armour in sales… because of its Dad Shoe pivot.Warren Buffett’s newest investment? $260M in Ulta Beauty… because Ulta changed how ya buy makeup.A wild new study breaks down a big new tradeoff… Every $1 in sports betting is $1 not invested.Plus, only 11 states have a single area code… and 603 New Hampshire is fighting to remain one of them.$DKNG $ULTA $UASubscribe to our Saturday Newsletter: tboypod.com/newsletter  Watch us on YouTube Submit Facts & Shoutouts Instagram, TikTok, LinkedIn (Nick) & LinkedIn (Jack)About Us: From the creators of Robinhood Snacks Daily, The Best One Yet (TBOY) is the daily pop-biz news show making today’s top stories your business. 20 minutes on the 3 business, economics, and finance stories you need, with fresh takes you can pretend you came up with — Pairs perfectly with your morning oatmeal ritual. Hosted by Jack Crivici-Kramer & Nick Martell. Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Wednesday, Wednesday, August 28th. And today's pod, this is the best one yet. It's a T-boy. The top three pop business news stories you need to know today. And Jack, today's podcast, it's very demure. It's very mindful. It's very fantastic, would you say? Well, did you know today is National Red Wine Day? Red wine, also very demure, also very fantastic. But three stories for today's show. What do we got on the pod, Jack? For our first story, New Balance just hit a big sneaker milestone. New Balance passed Under Armour in sales. So Jack and I will tell you how New Balance pulled off a dad shoe pivot that would make your pops proud. For our second story, Warren Buffett just bought nearly $300 million of stock in Alta Beauty. Alta Beauty, because fundamentals, they're like foundation. They make you look beautiful. And our third and final story is a study that honestly,

Nick and I find kind of concerning. Legalized sports betting is replacing the stock market. But Yeties, before we hit that wonderful mix of stories, fantastic mix of stories, hold the phone, Jack, I'm getting the call, baby. Yetis, what's the most meaningful number in your life?

It isn't your birthday, it isn't your address. It is not even your social security number. It's your area code. The most important number in your life is your area code, isn't it, Jack? Your family still has a landline that's 2.1.2.

The original New York City number. 212. That is some valuable phone real estate. We're not letting go to that thing, Jack. Nick, if somebody tells me their phone number starts with 802, I like them already. Okay? I remember when the 917 cell phone came out, I got 646 and I'm still pretty jealous, Jack. But there's one state that may have more pride in their state's area code than any other state. And who is that state, Jack?

The 603. If you know, you know. New Hampshire. 603. It's on the bumper stickers. It's on the T-shirts. If you're from New Hampshire, chances are you have a 603 tattooed on your calf right next to your Red Sox, hoax. Live free or dial, baby. New Hampshire, it's actually one of the 11 states that are single area code states.

All of Alaska is 907 and all of Rhode Island is 401. All of Vermont is 802 and every New Hampshire phone number begins with 603. But here's the news. New Hampshire's population has grown so much in the last few years. they're going to now need a second area code. They're going to need a second area code. And guess what? The granite staters hate this idea.

People from New Hampshire, they're going full Paul Revere trying to resist a second state area code. They're tossing tea into the lakes. It's like, what do you doing? This isn't the Boston Tea Party. Come on. Well, here's the problem, besties. It has gotten so intense over in New Hampshire. The governor is getting involved in the area code.

The governor of New Hampshire says, that remaining 603, purely 603, is a top state priority. But here's the problem. There are only 99,99,99 possible phone numbers with the area code 603. So what solution do you propose New Hampshire? I mean, Jack, am I going to call you up and use a decimal point if you're in New Hampshire? What are you going to do? Oh, yeah?

Decimals. Is that what you want? I don't know about you, Jack, but people in Franconia, they'd rather shout out the window than dial a number that doesn't begin with 603. Hey, Sarah, you got any butter you can spare? We're out over here. So, Yetis, whether you're forever 404 or faithfully 313, respect the area code. Because the area code, it's your most meaningful number.

305, it's a lifestyle. 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. Our first story. New Balance just hit a major sneaker milestone. New Balance passed Under Armour in sales.

We're exploring how this dad shoe became the shoe. But Jack, can you take us on a little tour of New England for a moment? Let's head over to the Mass Pike Freeway outside of Boston, man. I-90. As he hit Brighton, you can't miss the huge New Balance headquarters building. It's like a giant billboard. Are you saying that the New Balance headquarters is just outside Boston? That's exactly what I'm saying. That is New Balance. It is the only major shoe company that is still private.

It is not a publicly traded stock. And has been that way ever since it was founded in 1906 in Boston. Just outside Boston. But here's the news. New Balance just announced they signed, Cooper Flag, the stud basketball player from Duke University. That's right. The expected number one draft pick won't be wearing Nike's, Adidas, or Under Armors. He'll be playing basketball in New Balances.

Oh, and it's not just Cooper Flag wearing New Balances like your Uncle Bob these days, is it, Jack? Get this. New Balance is suddenly the official shoe of the best baseball player. Shohei Otani. And the best tennis player. Cocoa Golf. And one of the best NBAers, too. Carwee Leonard. Oh, and by the way, what do we have to do to ask for a podcast shoe for our podcasting skills from New Balance, Jack? NewBounce, the official podcasting shoe of podcasting.

Honestly, Jack and I record standing up, so we do need a special shoe for podcasting. New Balance, we should talk. But then there's also this milestone that New Balance gets to boast about. They just passed Under Armour because they're doing $6.5 billion in annual sales. Jack, could you sprinkle on a little more context, please? That's only a quarter as much as Adidas, but it's up 50%. in the past two years. Jack, sorry, quick question. On the EFSI, sir, I feel like it's the opposite. I feel like it's, that is a quarter as much as Adidas. Like, I don't know, for me, that feels like that's a big number as opposed to a small number. That's bigger than we expected. It's a quarter

as big as Adidas, the global sportswear giants. That's up 50% in the last two years, and it's 50 times bigger than Allbirds. Hang on a second. I hear you, Jack. What do you want to pause the pot about? Isn't New Balance the dad shoe? Yeah, I know what you mean, right? Aren't the official sneaker of mowing the lawn? Isn't it like, honey, one sec? I got to put on my new balances so we can run to Home Depot. New Balance is the official dad shoe, but it became the dad shoe by accident. Jack, sorry, it's not New Balance.

It's actually Mr. New Balance. Because in 1990 it is, New Balance was like every other sneaker brand. They paid superstar athletes to endorse their sneakers. But then New Balance's top player, James Worthy, was disgraced by a sex. scandal. New Balance was so scarred by that drama from their endorsed player that they made a major marketing decision. They were going to be the one shoe company that didn't do athlete endorsements. No more athlete deals. So for two decades, no NBA stars wore New Balance. And for decades, while we were growing up, other kids, us, we didn't want New Balance shoes. Because our favorite players

weren't wearing them. And that is how New Balance became the unofficial dad shoe of dads. Their marketing appealed to leaf blowing, barbecue cooking, grass growing, watching dads. Home Depot, loving papas. But then in 2009, New Balance made a pivot, didn't they, Jack? They hired a marketing executive from Nike and decided to give athlete endorsement deals another go. Well, 15 years later, that pivot by New Balance, it looks like it's working. New Balance is rocking dad energy, but also has high fashion appeal, too. It's actually captured by this one New Balance ad that Jack and I have loved for years. New Balance today is worn by supermodels in London and dads in Ohio.

That is a customer dichotomy you just don't get every day. Oh, and breaking news? Yeah, Taylor Swift was just seen wearing new balances. By the way, Jack, it's not New Balance, it's Mr. New Balance. So, Jack, what's the takeaway for our buddy is over at New Balance? New Balance shows that David can beat Goliath through sales. Now, yet it is on paper, elite athletes shouldn't sign with New Balance. They should sign with Nike.

On paper, supermodels shouldn't be wearing New Balances. They should be wearing sambas. And yet, New Balance is winning because sales matter. And New Balance, they know how to sell because they make it personal. Cooper Flagg, that basketball player we told you about, he was sold to join New Balance because he's from Maine. New Balance made an emotional appeal to his home region. Oh, and Shohei Otani, the legendary baseball player,

he was sold to join New Balance because of a personal pitch from the CEO of New Balance. And Cameron Brink was sold to join New Balance because New Balance is sponsoring the entire WNBA. So how can David beat Goliath? New Balance did it through sales. Sales is a personal game, and New Balance knows how to play it. For our second story, Warren Buffett's big new investment, get this. It's Ulta beauty. In Warren Buffett's eyes, there's nothing sexier than fundamentals.

And Alta Beauty has never looked more fundamental. You like how I said that, Jack? You really got sensual. I was going to work on that for a while in the mirror. Anyway, in the meantime, Warren Buffett has a famous quote that, honestly, Jack and I love to share. Be fearful when others are greedy and greedy when others are fearful. Well, apparently Warren Buffett is greedy for eyeliner and lipstick. days. Picture that in your head. I kind of love it too. Because Berkshire Hathaway, his investment fund,

just bought $260 million of stock in Alta Beauty. A quarter billion dollars of Alta Beauty stock. Maybe it's her. Maybe it's Buffett. Alta is the number two retail makeup chain in America behind Sephora. Alta does $11 billion in annual revenue. But Jack and I had to ask, why, is this 93-year-old man who already has great skin covering himself in cosmetics? It's because Alta stock was down by 43%. Yes, it is. And Warren Buffett thinks that that stock is oversold, so he is literally buying the dip. He thinks Alta Beauty is a bargain at this 43% discounted stock price. Well, Basties, once word got out that the world's most legendary investor wanted Ulta Beauty stock, everyone wanted Alta Beauty stock. Once the headline dropped that Warren Buffett was buying

the stock, the stock jumped 15% as everyone else piled in it. That's not Botox on Ulta Stock. That's Berkshire, baby. But Jack, I got to ask you, you know, as a guy who has a 43-step nighttime skin care routine like you do, could you sprinkle on some context to Ulta Beauty stock, please? Dude, my serums have serums. 30 years ago, Alta Beauty actually disrupted how cosmetics were sold in America. Yeah, they did. They broke the beauty business model. So Jack, let's go back to 1990 when Alta Beauty was founded. Back then, Madonna was wearing glitter. Selleck was wearing that luxurious mustache. And the Glossier Boy Brow hadn't even been invented yet. Back then, makeup was a department store business. You could only buy makeup at department stores like

Macy's, Bloomingdale's, and Filene. It was a captive sales strategy. Makeup and skincare products, they were locked up behind these booths at the department stores, right, Jack? You could only try them out if you asked an associate, and then they went over and did it for you. And then they did like a whole routine on your face. Well, then Ulta Beauty pioneered a new concept, the open store DIY makeup concept. They let anyone try out anything and put samples all over the place. Hey, like that hand cream? Well, here's a sample tube right here and here and here and try this one, that one, and this one. They turned makeup from a controlled experience to a discovery experience. And 30 years later, Alta Beauty now has 1,300 locations. They do more revenue than

Hilton Hotels or Chipotle Burritos. Sit down, stand up, and sit back down at the mat counter. But Nick, we still haven't answered the question. You're right, Jack. Why is this guy who invests in oil, insurance, and railroads buying a makeup stock? Jack, that feels like our takeaway. So, Jack, what's the takeaway for our buddy is over at Ulta Beauty? Fundamentals are beautiful. That is, fundamental investors like Warren Buffett, they don't focus on trends and they don't focus on vanity metrics.

Warren Buffett wants to see solid fundamentals, like profitability and consistency. Well, Alta's stock dropped so much that the fundamentals of their business were attractive relative to their stock price. Alta has been profitable for years. Years. And their profit margin is twice as fat as other retailers. And Alta's sales growth has been consistent, 11% sales growth each year for the last five years. If Warren invested in trends, he would have bought stock in like Il Machiaj.

Yeah, good point. Which uses AI on the internet to personalize makeup for you. But Warren Buffett isn't into some point. crypto AI cosmetics brand, is he, Jack? No, he's interested in fundamentals, like cash flow and profitable consistency. Alt of Beauty is another reminder that fundamentals are actually beautiful. Now a quick word from our sponsor. For our third and final story, a new study finds that the more America bets on sports,

the less we invest in the markets. We're selling stocks to make bets on the sellbacks. and Nick and I are going to analyze that worrisome finding. Now, Yeti's Jack is reading a book right now, and on page 10 of that book was a statistic that you could not wait to share with me. Why don't you share with the besties, Jack? What was it? It's that new Nate Silver book I was telling you about.

Last year, America gambled $1 trillion on casino games and sports betting. One trillion dollars on gambling. Jack, you got to sprinkle on a little more context for us, please. That's 4% of America's GDP. We are a gambling nation. And it's all because the 2018 Supreme Court decision yetis, where states began legalizing sports betting faster than Reggie Bush. And since the states have legalized sports betting at different times,

it's presented us rich data to analyze and answer a question. The big question is this. How does the legalization of sports betting affect our behavior? One study has one huge answer. And here it is. To place sports bets, we're selling our stocks. We're withdrawing money from brokerage accounts

and depositing that money into betting accounts. Yetis, Jack and I jumped in T-boy style to this study. It was wild, and here's the title. Why don't you share with the besties, Jack? Gambling away stability. Sports betting's impact on vulnerable households. It was conducted by professors at Northwestern, BYU, and the University of Kansas,

and the data was big. Those academics found that the legalization of sports betting reduces net investments by 14%. Now, what that means is that people aren't using their entertainment budgets to play sports bets. Instead, they're using their nest eggs to play sports bets. Sports betting is replacing the stock market for a lot of people. The way Jack and I see it, if instead of going to the movies, you bet $50 on the Pacers, that's fine. That's like a fair trade-off, right, Jack?

That'd be fine, because you'd be trading one form of entertainment for another. It's like if you went to see a Tom Cruise flick or you watch a game that you have money on, either way, that's a form of entertainment. What's not fine is if you spend away your savings and your investments to bet on the Celtics. And that happens to be the exact trend that this study identified. People are taking their down payment savings and putting it on the Dodgers. Oh, and the worst part about this trend? What is it, Jack? Selling stocks to make bets, this phenomenon is most acute in low-income household. So besties, when you add it all up, gambling, it's kind of like alcohol.

It's okay if it's used responsibly, but man, can it be misused? Yes, it can. So, Jack, what's the takeaway that we wanted to share with all the Yetis? Get Rich, Slow. Yeties, an inconvenient truth for anyone who's trying to get rich quick. You know what? Getting rich? It's slow.

It takes years. It takes decades. The S&P 500 has grown 11% per year since 2008. That sounds slow, but it can get you rich. Because $100 invested in the S&P 500 index in 2008, that would be worth $500 today. A thousand bucks invested in 2008 would be worth $5,000 today. But it still feels slow, and slow isn't sexy. And that is why so many people still fall for get-rich-quick schemes that are out there.

We saw it with crypto, we saw it with meme stocks, we see it with lottery tickets, and now we're seeing it with legalized sports betting. Honestly, if someone says you can get rich fast, they're probably not telling the truth to you, and you're probably going to lose money on it. Honestly, you're probably going to lose money, not make money. In fact, on gambling, the $1 trillion that we Americans wagered last year, that resulted in $100 billion in losses.

Because when it comes to gambling or sports betting, the house always wins. You don't win. So the news that Americans are selling their stocks to bet on sports, that is concerning. So here's the unsexy but important reminder. Don't get rich quick, get rich slow. Jack, could you whip up the takeaways for us for Saviche Wednesday? New Balance just signed the best player in college basketball as they pass underarmor in sales.

So how did David beat Goliath? For New Balance, it's through the sales, personal sales. For our second story, Warren Buffett. He likes Alta Beauty. His investment firm just bought a quarter billion dollars worth of their stock. Because fundamentals are beautiful. Profitability and consistency are sexy. And our third and final story.

A study finds that when sports betting gets legalized, investments in the stock market fall by 14%. So, Basties, don't get rich quick, get rich slow. But yeties, this pod's not over yet. Here's what else you need to know today. First, the pod industry is popping right now. The Kelsey Brothers just signed a 100, million dollar podcast deal with Wondery and Amazon.

Side note, Wondery is also our production company. They manage our ads and they help us with distribution and marketing. But this Kelsey deal, it is the second big podcast deal in just the last two weeks. Last week, Call Her Daddy went to Series XM radio for $125 million. And second, Australia just passed its first right to disconnect law. Jack, what is that exactly? It enshrines the right to not be contacted by your boss after us. hours.

Like your boss legally cannot expect you to respond to emails or calls on nights and weekends according to this new Australia law. The right to disconnect. 20 countries in Europe and Latin America have similar laws, actually. Yeah, turn off your phone at five. That's your legal right, Ozzy's. Put another shrimp on the Barbie. And finally, Oasis, the Champagne Supernova.

They are back like Wonderball, baby. The Oasis is doing a 14-date tour in the United Kingdom and Ireland. next year in a huge comeback. This reunion ends a 16-year feud between the brothers Liam and Noel Gallagher, who are members of this rock band. And 30 years ago, Oasis published Definitely Maybe, regarded by many as the best album of all time. Don't look back in anger.

Liam and Noel are finally not looking back in anger. Not too much of that champagne supernova jack. Now, time for the best fact yet. This one sent in by all our besties in the back seats on their way to school right now. Have you ever wondered why there are 180 days of school in the school year? Well, according to Pew Research for grades K through 12, 180 days is actually the national norm. Washington, D.C. and 38 states have 180 days. Just about half the days of the year. But that's the norm. It's not the most and it's not the least, is it? Jack.

Kansas has the most school days in their public school system with 100. 186 days. On the other hand, Colorado folks have the fewest number of school days with just 160 days of the year in class. 160? That is like way fewer than we had in Vermont. Actually, Jack, the Colorado people are not listening right now because they're still on vacation with their kids. True. I just looked it up. Colorado's last day school is June 3rd. And they have a nice long summer the way it should be, to be honest. How exciting was the last day of school when you were in elementary school? Just outrageous exuberance. Well, the last two weeks were kind of a round-up situation, weren't they, Jack? The teachers are just popping a movie into the TV, weren't they?

Colorado. They do recess. Yeah, they do. Yadies, you look fantastic today, especially if you're over in the 603. What do you think their new area code would be? Like, if they had to do a new area code, what numbers would they choose? If it's not 007, then I don't know what you're thinking, Jack. That'd be incredible.

Yeah, it is. If you're loving the show, drop down and give us five stars because we love reading and getting and reading aloud your reviews. I still kicking over this double o seven thing. Wouldn't I mean, it works so well. It works so. Hey, London, don't steal our ideas. Drop a review and Jack and I will see you tomorrow. And before we go, a belated happy birthday to our buddy, Caesar in Tucson, Arizona, who, Jack, he's been listening since the markets.

Snack's Day is Caesar. He's my Caesar. He's been there since episode one. We love Caesar. Congratulations to Josh and Tara. They have a new baby boy, Cooper, in Salt Lake City, Utah. And a happy birthday to Jonathan Labasco from Trumbull, Connecticut, who we met at our live

show in New York City, Jonathan, you were looking fantastic. Happy birthday to Bridget Williamson. In Charleston, South Carolina, she said H-Y-H-T-B-O-I to her husband, yes? And now Tuck is hooked. Tuck, great to have you as a Yetty. And a huge shout-out. to Lila Adler and Greg Cusack. These two just got engaged while surfing on Venice Beach.

Congrats on the ring. And Madison and Grayson down in Atlanta just got married. Congratulations on a huge new life together, guys. Happy anniversary to Katie and Noah Hayden in Fisher's Indiana. These high school sweethearts, they're still sweethearts. And a happy birthday to Cheryl Schallenberger down in Santinez, California, getting some lovely pinos. And congratulations to Emma Cravella, the global scholar, is starting her first year at Northeastern University in London.

You got this. You got this. And to anyone else, celebrating something today, make it a T-Boy. Celebrate the wins. This is Jack. I own stock of Amazon and Berkshire Hathaway. Nick and I both own ETFs of the S&P 500 and some stock at Chipotle. And Nick owns stock in Nike.

And it's 50 times bigger than all birds. The sales? Yeah. Jesus. Wow. Thank you.