The Best One Yet - “Goldman’s burn book” — Railroad’s $27B velocity. Zoom’s ZaaS. Goldman’s kingmaker revolt.

Episode Date: March 23, 2021

Straight outta an 1872 headline, we got ourselves the most important day for railroads in years. Zoom’s answer to post-Covid? Un-brand itself — it could stick Zoom in your Tinder video dates instead. And Goldman Sachs’ analysts whipped up an 11-slide pitch deck to Goldman’s CEO… about how much they hate working at Goldman.$KSU $CP $ZM $GSGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Tuesday. Tea Boy Tuesday, March 23rd. To start things, Snackers, please, Jack. The scoreboard of the stock market is best encapsulated by the S&P 500 index. I love the way you put it, Jack. You got a number for us over here? It's a hair away from 4,000 points, which is a record high. Jack and I sprinkle on a little context for you one year ago. S&P 500, 2200 points. Okay, things are double as good as a year ago. I like what you're saying. thinking, and this pod's the best one, yeah. And we're on funch. First story, Jack, what do we got? Guess what stock has

outperformed Facebook in the past year? No one's going to get it. Kansas City Southern Railroad. It has been a great year for tech. It has been a greater year for railroads. For our second story, Zoom's latest strategy, ZAS. Zoom as a service. Zas! Post-COVID, Zoom's going to jump into your Tinder. Real

thing. That's what they're probably going to do. For our third and final story. Goldben Tax's junior analyst just whipped up the most vicious slide deck we've ever seen. Jack, it's got to be vicious if you're pitching the Goldman CEO on how awful it is to work at Goldman. Well, they wanted transparency. They got honesty of transparency. But before we hit that, honestly, wonderful mix of stories today. Jack, last week we were talking about Elon Musk changing his corporate title, more like corporate screen name. Yeah, he's no longer the Tesla CEO. No, he's not.

He is officially the techno king of Tesla. This is like a real HR move. The CFO, by the way, Tesla. The CFO is now master of coin. The HBO writers took over the business cards at Tesla. So Jack and I thought long and hard, and we said, you know what? Snackers will snackify some CEO titles. So we asked you to snackify some CEO titles. And naturally, you didn't disappoint. These are the runner-ups for the best snackified corporate titles in the wake of what Elon did last week.

Jack, first, we got one from Tommy, who wants to retitle Chipotle CEO to Baron of the Burritos. Wade, he gave us two or guru of the guac. Tommy, thanks for the options. They're both great. Carnival CEO, according to David Bounds, the clown Prince of Cruzen. It's a little dark. It's like some dark vibes to that one. That was the most burn of the moment. That was mean. And Duncan Donuts has the Donuts, according to Scott Singer. Everyone's getting a participation trophy for those. Those are solid. Y'all get one. Okay, so I'm icing my core after how great those were, but these finalists will send me to the ER. By the way, Jack kept touching his tummy as he was saying,

Here's the four finalists. First, from Tony DeRusa. The Walmart CEO should be renamed the Discount Viscount. Yes, and from Tara Perswani, the Lulu Lemon chief, should actually be the Lord of the Legging. So I can actually see that one happening, Jack. Like, that could happen. Also, then Tony DeRusa, he is the third entry here. Costco's CEO should be renamed the Incredible Bulk.

When you sell things in packs of 128, the CEO is the Incredible Bulk. And then finally, from Ton Klausing, Oracle's founder, Larry Ellison should be renamed the Oracle of Oracle. The Oracle of Oracle. Snackers, vote today at Robin Hood Snacks on Twitter, on Instagram. The winner gets, Jack, you built it up. What do you think? A handwritten note, not for me, because my handwriting stinks, but from the beautiful

Nick Martel over here. The calligraphers is a side hustle. Snackers, we'll send you that note also. You can change your Twitter profile to Sultan of Snackers for the day. Run with it. Vote at Robin Hood Snacks. Let's hit our three stories. We spoke to the lawyers and we got to get something legal out the way.

The snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible.

Business news for you. Robohood Financial, LLC, member FINRA slash SIPC. For our first story, the sexiest industry on Wall Street on Monday. There's railroads. Railroads were it. I actually live right next to a railroad right now. Humblebag. Do they need to blow that horn at 3 a.m.?

Do they need to? No, they don't have to, but I guess they do. Snackers, this merge stock is the closest thing to NAFTA in a stock. Jack, one second. I'm just getting a telegram from 1887 so we can cover this story. Snackers, we got ourselves a transcontinental railroad merger. Kansas City Southern is the stock that just jumped 11% to a record high on Word.

It's getting bought. It's getting bought by Canadian Pacific Railway, another publicly traded company. And once this merger is done, the headquarters will be in Calgary, Canada, $27 billion later. So, Jack, I think I figured out the formula for these railroad names. It's your hometown and then a random direction on a compass. Now, there's actually going to be 19,000 miles of railroad track between these two companies across the United States, Mexico, and Canada. Again, they got Toronto to Mexico City round trip four times in all that track, not too shabby. Now, that sounds enormous, but it's not going to dominate the industry with that size.

Now, apparently this merger is only going to make this new company the number six largest railway in North America, which isn't even in the top five. surprising industry with some surprising metrics they have over in railroads. Jack, if you're like sitting down and you want to impress your buddy who works in the railroad industry, ask them about velocity. Velocity's an official term for how fast the box cars and local motives are traveling because speed is money. But Jack, if you really want to get a railroad guy or girl talking, ask them about the average train length. Okay, the longer, the more efficient. And get this.

Kansas City Southern's railroads, on average, their trains are over a mile long and they're really loud at 3 a.m. in the morning. All right. So Jack and I jumped in snack style and both stocks closed their record highs because the pandemic, it's been bad for salons. It's been good for cement. Spending on services during the pandemic tanked. But we've bought physical goods instead. You're buying scarves. You're not like getting manicures. Right. Or you're buying like RVs, workout gear, televisions, home improvement supplies. and all that stuff starts as raw materials. And all that stuff got lugged around in trains from port to port, terminal to junction. And that's why Kansas City's southern stock more than doubled from one year ago.

So, Jack, what's the takeaway for our buddies over in the railroad industry? Sometimes you have the opportunity to invest in a public policy. Cannabis stocks, they're an investment in states legalizing cannabis. Draft Kings and Penn Gaming, those are investments in states legalizing gambling. Electric vehicle stocks. Those are investments and subsidies for electric vehicles and eventually banning gas. This merger is if you took the trade deal from last year and reincarnated it into one stock. So the U.S. also trades with China and Russia and some friends in Europe, but those trading partners, it's been frosty lately. Trade with the close neighbors on the other hand, Canada and Mexico, is hotter than ever thanks to the U.S.MCA, the United States-Mexico-Canada agreement.

And that trade deal is really naft to 2.0. It's a trade deal Trump signed last year. International trade for the U.S. right now is all about trading with our neighbors. And the more we trade with our neighbors, the more prosperous, the railroads. For our second story, Goldman Sachs's young bank analysts, they just revolted. It's the closest thing to a banking burn book. Yeah, it is. And it shows how much Goldman employees hate Goldman right now. Jack, I mean, I think we should talk. Should we tell our horror stories? I think we could tell our horror story.

All right, so we both worked at Banks right after college, like 2011. Jack, horror story? What do you got? No, you're first. All right, first. Show up. It's like week number two. Walk it to the office and they're like, you didn't shave today.

I'm like, I didn't shave today. But you know what? I'll shave tomorrow. So I go, we'll go back to my desk. You shave right now. You shave right now. Pulled out the razor. I had to go like back into the bathroom.

No shaving cream. Redneck for like three weeks. Wait, you had a razor in the office? It was someone else's razor. That is brutal. My story is a little different. I was at a German bank, and to save money, they wanted to turn down the heat in the winter, so they instituted a sweater policy. They went less Audi, a little more Volkswagon on you, Jack. Yeah, exactly. That's how you get the best quality products. Snackers, for most young bankers, you're going to get brutally long hours. Kind of a right of passage is what they say to work at a top investment bank. Yeah, it's kind of institutionalized corporate hazing.

what we're talking about. It's not a good thing and probably doesn't make that much sense these days. But in the past year, funny things happen with Goldman Sachs. Their stock has doubled. And very related to Goldman's stock doubling is the fact that SPACs have exploded. There's like four SPACs happening per day so far in 2021. So SPACs, they involve IPOs and M&As. That is Goldman's bread and butter. Chicago does logistics. Goldman does deals. So every time Nick and I report news of a back that just happened. Every other day. Behind that headline, there's a team of Goldman Sachs analysts who probably worked like 500

hours to make it happen. And that is how the managing director affords the third Hampton home. That's how it happens. Exactly. So 13 junior analysts at Goldman Sachs, they made an 11 slide presentation that leaked for us all to see. And it was all about the brutal working conditions at Goldman Sachs the past year. Honestly, PowerPoint would be proud of this thing, Jack.

There is a mix of solid bar charts and I think a Bain big idea arrow that made its way in there. A lot of big arrow ideas. But there was a lot of scary numbers too. Like the average 105 hour work weeks that these Junilanos have. Or how about like the five hours of sleep? Or how about the average bedtime? 3 a.m. for these guys. I crunched 105 hours divided by seven days.

I think it's like 14 hours per day. And divided by six days is like 17 hours per day. You're not leaving much. much time for like sleep and food. But then you get the life numbers. Honestly, these were the raw numbers. Like, these were disturbing. All 13 of these anonymous junior analysts, they said that their friendships had been hurt due to this working condition. Okay, and then get this, 77% say they would consider themselves victims of workplace abuse. And 75% said they had considered or taken up the offer to take therapy because of this trauma. And we should point out, I mean, I actually have a therapy

appointment later tonight. If anyone can get therapy, this is a moment when you should get therapy. 17 hours of work a day is incredibly raw. That was a pretty straightforward reason here why the work-life balance is so imbalanced over at Goldman. Goldman doesn't want to over hire. Goldman's axe likes their teams of lean, mean spreadsheet crunching machines. If Goldman had 50% more analysts during this SPAC explosion, then the burden could be spread out. That's what they could do. But Nick, then what happens when the deal flow slows down? Fair question. They can like set up a ping pong table for analysts waiting for a deal to come in. They don't like that. Goldman would rather you be working overtime than under time. So Jack, what's the takeaway for our buddies over Goldman? This is a test of

Goldman's kingmaker promise. Goldman does billions of dollars of deals, millions of dollars of bonuses, but here's the secret about Goldman Snackers. It's not just about the money. Goldman's analysts get paid a lot. But if you divide that by the number of insane hours they work, it's not as lucrative as it looks. Yeah, Goldman manages to hire like the top talent who's under 25 years old because of their kingmaker promise. The kingmaker promise. You grind away with us for a few years.

You don't go on any dates. You don't get a puppy. Uh-uh. But we will crown you at the end. And then when recruiters read, oh, uh, Goldman Sachs Investment Banking Analyst, 2019 to 2021 on your resume, boom, this person's a machine. They're running with you. They love you.

Goldman Sachs alumni are incredibly hireable. because they survived the Goldman Sachs analyst program. Jack, can we talk about this Goldman Sachs statement after this deck came out? The CEO basically said, this is messed up, so we're going to hire more people, and we're going to enforce the no-saturday work rule. Jack, we mean it. We really mean it this time. We're going to enforce that rule.

Not exactly industry-shaking changes at Goldman in response to this news. No, but even if nothing changes, the top talented people have always accepted Goldman's Kingmaker promise. For our third and final story, the most important move by Zoom in an entire year. We're talking ZAS, baby. We're calling it ZAS. We are calling it ZAS. Zoom as a service. We think Zoom should call it that, too.

Yeah, you're going to see Zoom, but you're not going to see Zoom. Now, Zoom's stock is up nearly 10X since its 2019 IPL. Oh, Jack. It's been a good year. It's been a good year. It's going to be a good year. But here's the thing, Snackers. You've known it's been up.

but it's fallen almost 40% from that high in just the last few months. The big question that Wall Street and all the investors are asking, your mom wants it now. Will Zoom continue to be a verb post-pandemic? Honestly, maybe for work it will, but not necessarily for play. You'll have the Zoom conference call probably in a couple years, but you're not having a Zoom happy out. Let's be honest.

2020, the last call for all Bachelor Rap Party, there was a Zoom call with like 14 people, and we couldn't even see what Dana was even doing. It was brutal. 2022 last call for mall, the Bachelorette party, is actually a Nashville in real life. You're going to be splitting the hot chicken. Now, here's what Jack and I find fascinating about Zoom. Zoom has a new strategy to thrive in a post-Zoom world. ZAS, Zoom has a service. Honestly, they should run with it. That's what they should call it. I think they should own it.

The reason they're launching ZAS, social apps are expected to have video in 2021. That's why Instagram added Instagram live video and video chat within DMs. But not every company has Zuck's infinite resources to copy. I'm sorry, to build their own video products. And that's where Zoom is stepping in. They're going to license their video conferencing technology to other apps to use. But here's the key. You're not going to see the Zoom brand.

They're going to let the app that they license to take all the credit for the video capability. For example, Tinder has already launched a feature that lets you video date so that you can like, video day. Figure out if the person's worth it before. meeting them in person. Right now, Tinder's doing it themselves, but in the future, they could let Zoom. The experts, handle their video conferencing. Zoom does the tech. Tinder gets the brand recognition. Or Walgreens, let's say they start selling prescriptions online. They may still need one-on-one pharmacist to patient video conferences to check on that thing on your thigh. Yeah, because they got to prescribe the

thytastrosol. Or take best buy, for instance. They're selling you TVs online, but you need to book the appointment to troubleshoot what that damn input was, and you're going to do that with the Zoom thing. The last use case for Zoom as a service that we want to share, education, Middlebury College, Enviro 101, J-Term class. You could do it through the Middlebury app via Zoom. It's going to be in the Middlebury app with the Middlebury logo, but the technology is going to be Zoom. I'm sure Brown University could try it to. So Jack, what's the takeaway for our buddies over at Zoom? Don't let brand become ego. Don't. Do you use video calls on Slack when you're aiming at the office?

Jack and I are pretty much doing this all day. Yeah, we do like every day when we're deciding what stories to cover. But Jack, that's Slack video call you and I are doing every day? This is wild. It's not Slack's technology. It's actually Amazon's tech branded as Slack's. If Amazon required that Slack put a big Amazon logo in the corner, Slack probably would have said, we're going to find another video provider.

Yeah. Well, brand recognition, it's critical. You've got to have it for any consumer-facing business. But white labeling your product, in other words, letting another company take credit and having your brand nowhere to be seen. Yeah, that could strengthen the business-facing part of the biz, and that seems to be what ZAS would be. Zoom isn't letting its desire for brand presence get in the way of another huge business

opportunity. Don't let brand become ego. Jack, can you whip up the takeaways for us over there? Rail, it's a century-old technology that's still got huge value. In the latest real merger, it is the USMCA deal. Reincarnated, honestly, is a stock, which is kind of crazy. You can invest in policy. For our second story, Goldman Sachs' analysts are publicly shaming Goldman Sachs.

They're testing Goldman's decades-old Kingmaker promise. For our third and final story, Zoom is looking to bake itself into our culture post-pandemic. Zoom, not letting its brand ego get in the way of its business. Time for our snack fact of the day. This one sent in by like a legendary multi-year snacker Richard, Philbin and lovely United Kingdom. There are officially more realtors in the United States than there are available homes for sale right now. Yeah. Now, a lot of that has to do with like surging home prices and like people obsessed with Trulia. What do I have to do to get you in this two-bedroom,

mid-century modern colonial farmhouse? Also, you're working from home and you just realize you could probably side hustle selling home. Snackers, don't forget, Nick and I are now the Maharajas of the microphone. So go to at Robin and Snacks on Twitter on Instagram. We got to have a winner for this poll because we got to write a letter to someone. What is the most best snackified corporate title? We'll see you tomorrow. And before we go, happy birth, not birthday, birth to Willemina, Patricia DeSoto Hewitt. She goes by Willa Hewitt. Yes, she says. And it's also her birthday, by the way. Technically, I guess zero. I guess that's what we're going to go with you. Grant and Clara, congratulations on the baby girl. They're going to be decked out in like the best athletic year in the state.

to New Jersey. You know, they call it a birthday because it's the day you were born. If you can't do a candle, I don't know if it counts yet. Good, good reply. Happy Cat Aversory to Tyler Stringham and his cat, three-year anniversary together in Portland, Oregon. It's normal. You know, I'm coming up on my one year with River. We'll give you a shout down on the pot.

Happy anniversary to Lindsay and Miguel at Seattle, Washington. And Kristen Solano just got promoted in Rancho Cucamonga. Happy 54th birthday to Caitlin and Cody in San Francisco. Yeah, combined the 20s. Sevens in Dolores Park. We'd like what you did. Always fair to round up. 27 plus 27 equals Caitlin and Cardi. Britt Award. Happy birthday in Dallas. And Josh Pollard in St. Petersburg, Florida.

And Danny Coffton in Cleveland, Ohio. And Satya Shediger in Columbus, Indiana. And Nancy Ejke in Philadelphia. And Alex Ardela in Deland, Florida. And Sadie Mae and Hennepin, in Minnesota. Great snacker right there. And Yvette Pallifax in Chicago. And Dorsey Campbell, happy birthday down in Baltimore.

Baltimore. And big shout out to the Snacks fans fan club on Twitter and Instagram who turned Nick and me into Ironman and Captain America. We've never felt better in Spandex. This is Jack. I own stock of Amazon and Nick on stock of Chipotle and Lulu Lemon. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA, SIPC.