The Best One Yet - 🐉 “Jamie Dimon = The last Targaryen” — Buffett’s “smart money” stock sale. Constellation’s booze blueprint. JPMorgan’s last dragon.

Episode Date: April 7, 2020

Warren Buffett noticed something in airport data from the TSA that made him rethink his airline investments, so we’re looking at the smart money’s moves. Constellation Brands’ liquors are having a corona-conomy moment, but we’re more fascinated by the powerful slide #12 in its earnings deck. And we’re comparing JP Morgan CEO Jamie Dimon’s experience from the ‘08 financial crisis to the current one — because he’s the last big bank chief still around from the days of Lehman Brothers.Learn 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, April 7. Great to be back. It's actually a short week. I think Friday is a religious holiday that we're using as a public holiday. So we're going and we're going to roll with it. We're going to enjoy snacks four days out of five on this one. Meanwhile, it's Tuesday. This is expected to be an awful week for America and for the world, public health lives. We're talking peak virus infections and deaths this week, sadly in New York City and next week, probably the rest of the country. But yesterday was a great, day to start the week, stocks-wise, after investors are thinking this week we could turn the corner with the virus. The Dow searched 1,600 points to start the week, and Jack and I managed to whip up the best snacks daily we've ever done. Our first story, Nick, you're not bragging about your TSA Pre-check or Clear membership anymore, are you? DSA Pre-Clear used to get me on the plane before I got at the airport. With air travel down 95% in the USA this past weekend, Berkshire Hathaway just sold its stock in its airlines. about what it's like getting dumped by the smart money. For our second story, we have found the last financial Targaryen. Where are my drivetens? J.P. Morgan Chase's Jamie Diamond is the last standing

bank CEO who reigned during the 08 financial crisis. And he's finally commented on the current crisis. For our third and final story, Constellation Brands is the complete booze cabinet. I believe they say liquor before beer, before wine, and you're fine. I don't think that. I don't think That's how it is. Nick. It just rhymes whatever it goes with. We are mostly ignoring its earnings reports because it's irrelevant from pre-coronavirus, and we're focusing on one slide instead from its presentation. We're obsessed with slide number 12, because Constellation understands us, period. But before we get into all that, we noticed something, actually, Nick noticed something funny on Apple TV Plus this past weekend. You know, that's Apple's monthly subscription to its own Apple created shows that, like, no one thought they'd be doing three years ago.

Actually, Apple TV Plus is also one giant and $5 a month Apple Advertisement. Can we talk about episode two of The Morning Show on Apple TV Plus? I watched this six months ago. Nick watched it last weekend. We're talking Steve Correll and Jennifer Aniston. They're the anchors of a morning new show. There's a lot of adorable tension between other people on the show. But then we also noticed some very specific things co-starring in the show.

We actually noticed some very sleek and expensive tech gadgets. It's peppered and salted throughout the episode. We noticed half a dozen iPhones on this show, a couple MacBooks, and even an Apple push notification strategically placed in one scene. We didn't think this was a coincidence. We jumped in snack style. Turns out Apple products are visible in 32 camera shots per episode, on average, for the TV show, The Morning Show.

Not only that, an Apple logo is visible in about a third of those shots, according to the Wall Street Journal. Apple's double-dipping us. They're charging us five bucks a month, and they're making us check out Apple ads every scene. Tim, thank you for snacking with us. Just let us know how you pulled off the most meta-product placement ever.

Let's get to our stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about the hair ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so.

You know, we're not recommending any securities. Nope. It's not a research report or investment. advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Warren Buffett just dumped airline stocks really aggressively. It's the biggest smart money move this crisis so far. Now, Berkshire Hathaway, you may have heard of it, elusive name, sounds like more like a meat company. It's actually a company with a publicly traded stock. And it's also including a lot of

publicly traded stocks within a publicly traded stock. This thing is like a really fancy smoothie, like when you march on down to Project Juice and whip up the extra fancy like assaye bowl with the free range B-Pone and like the Chiaflax hybrid blend. It's really expensive and there's a lot of ingredients. Well, we're getting it as we had a bad experience getting a really expensive smoothie once and then we had to save it for like a week. Warren Buffett is the leader of Berkshire Hathaway. He is 89 years old and he's a famous stock picker, perhaps the most famous stock picker ever. With Berkshire's money, he's able to buy the stock. So if you own Berkshire, you indirectly own a lot of companies that Warren's all over. You own companies in the insurance industry like

Geico. You own companies in the food industry like Kraft Heinz or Oreo Maker Mondalus. If you own Berkshire Hathaway, you also own some finance companies like MasterCard and Goldman Sachs. And you own shares in tech, which actually, it's basically just Apple. It's the only thing they own its app. Yeah, Warren's like, where's the CD-ROM in this iPod? It's the only thing he could plug in, so it was the only thing he bought shares of it. Now, if you own Berkshire, you also also owned stock of airlines like Delta Southwest and American Airlines. Jack, what's going on with the last part of Warren's investments? Last week, Berkshire Hathaway sold $400 million of the Delta Airlines and the Southwest Airlines stock that I own. Now, you may be thinking the reasons are obvious, but the data reveals something even more shocking.

TSA, the Transportation and Safety Administration publishes every single day how many people are flying and going through TSA security. This is actually incredible they do this and they don't take their belts off for it. It's quite diligent. On Sunday, 122,000 Americans went through TSA security. But a year ago, 2.4 million Americans went through TSA security at the same date. That's right. This past Sunday, compared to the Sunday a year ago, there was a 95% drop in air travelers. And that makes it emphatically clear why Delta stock is down 64% in the last month and a half, and Southwest Airlines is down 47%. So if Berkshire is selling after a 64% drop for Delta,

that means Berkshire is taking a huge loss on this investment. And if Warren Buffett's Berkshire is willing to take a huge loss, that means they didn't think the rebound in airline stocks was probably going to happen anytime soon. They basically accepted a loss. So, Jack, what's the takeaway for our buddies over at Berkshire Hathaway and our friend Warren Big Time Snacker? Warren Buffett is the biggest financial influencer there is.

Snackers, when you hear a term associated with Warren Buffett, like smart money, that's referring to experienced investors. We're talking hedge fund managers, mutual fund managers, venture, traders. Smart money can also just be your buddy who's smarter than you and you want to know every time they're about to make an investment so that you can make it too. But the funny thing with institutional smart money like all those funds we just mentioned is you can't typically see whatever it is they're trading. No, but Warren Buffett is an exception because he runs Berkshire Hathaway, a publicly traded company, and they're forced to disclose publicly when they sell big things like Delta or Southwest stocks. So that way we know what the

smart money is doing. And unshockingly, word that Warren was bailing on airline stocks, that made other investors bail on airline stocks too. We're looking for signs that the smart money is buying stocks, not selling. For our second story, people are aggressively buying Constellation Brands's booze right now. But we're focused on one slide from the earnings report that perfectly illustrates what consumers want right now. No joke. Jack and I printed this thing out, sent it to get framed. We're going to throw it up on the snacks fridge. But in the meantime, can we talk about beer, wine, and spirits? According to Constellation Brands research, 56% of American consumers are drinking all three right now. I'm only doing two out of three. I'm

not telling you which one I'm not. Well, isn't that convenient? Because funny thing about Constellation brands, they make all three of those. How convenient. Oh, by the way, Constellation doesn't judge what you're into. So they also invested in a cannabis company. I think they need to morally balance themselves by selling produce, juice, cleanses, and a few kombuches. In the meantime, we checked out the earnings last Friday. Sales rose 6% last quarter. Honestly, though, we don't care because last quarter's earnings were from the pre-corone economy world, and that doesn't matter for companies anymore. One thing we did notice, though, is that if you look at the data coming in on liquor sales right now, Constellation's entire liquor cabinet is uniquely fit for the coronavirus. Alcohol sales overall in the

US stored 55% in the US at the end of March. And there are a few in particular that are living their best lives. Case in point, let's talk about ready-made cocktails up 106%. Not totally sure what this means. Is this canned margarita next? It's kind of like a vodka rosé sprits hard lemonade thing. I believe they say a Smearnoff ice before rosé, you'll be okay. So ready-made cocktails, Constellation's winning. Now, in the beer category, beer has been losing shelf space for years, but mainstream beer sales are up 90% right now. Which fits really nicely for Constellation because they're highly hortable 24 packs of Modelo and Corona

are flying off shelves by people hurting their backs lifting those things. Did you need 24-24 packs? You're supposed to lift with your legs, not your back. Finally, craft beer sales, they're actually down 70% during the coronavirus because so many bars where most of their sales occur are closed. We're talking 70% of the income for craft beer comes from those bars. And Constellation isn't selling the pony kegs of the extra heady stuff that you pretend to understand what all those metrics mean.

Hey, Tony, what's the hops density on the quadruple IPA again? I'm taking notes over here. All right, so beer trends, wine trends, booze trends, they're all working for Constellation. So, Jack, what's the takeaway for our buddies? over at Constellation. Constellation knows the five keys to a millennial consumer's heart. Snackers, Jack and I fell in love with slide 12 of their earnings report so much so. We will tweet this out when we're done getting it off of our fridge. Funny thing about this slide, it's pretty amateur PowerPoint work. It is. Like there's a lot of overlapping lines. There was no designer

involved. The interns over at Constellation may want to step up their game. But this slide is entitled Understanding the Consumer. It's broken down into five elements better than any company we've ever seen understand our generation of consumers. The first element to understanding the consumer is the universe. People want to feel understood. The second is betterment. You want to be consuming things that are both functional and emotional in their benefits. The third is what Constellation calls the new value equation. It's not just price and quality. It's social responsibility, sustainability, and ultra-convenience that matters. The fourth is experience is everything. They want their brand encounters with their products to break up the monotony and stress of everyday life.

consumers want trusted transparency. Basically, give me some honesty, not corporate BS. Now, we've seen other companies reported on snacks do some element of this, like Nike or Patagoni or Glacier or Albert. They do some part of it. We'll be watching to see if Constellation can capitalize on all five of those elements in a single drink. The ultimate mixed drink. If you're on a Snacks challenge on a run right now, you've got to turn around because we're halfway done. For our third and final story, Jamie Diamond, AKs, The last Targaryen just spoke out about COVID-19. And his bank, J.P. Morgan Chase, shows why this isn't a financial crisis that we're in.

Key word there, by the way, financial. Nick, all the dragons are dead. I'm looking around. I don't see any over here, Jack. Nobody has seen a dragon in 300 years. Actually, there's one still left. The name is Jamie D. as in Dragon Diamond. Correct. Jamie Diamond is the only big bank CEO during the financial crisis who is still in charge of one of America's top banks. We're talking about the kind of guy who's got a heart tattoo on his left calf. Ben Bernanke's got one too. If you went through the 08 financial crisis, you got one. He saw the financial system break in 2008. Yep. Then he saw the economy tank a year later. Oh yeah. And then he watched 10 years of a slightly slow recovery. He did it all as CEO of J.P. Morgan. Oh, by the way, he is recovering from a fresh heart surgery. But he finally spoke yesterday in a letter to shareholders about the corona economy.

Nothing better than a good old-fashioned right on the paper letter to shareholders, right? That's right. It wasn't a tweet. It wasn't a Zoom. It was a letter to shareholders. My old school Atticus Fingstad in Vermont would be proud. Keep it classy, Jamie. Now, here was the key thing, Jack, and I notice in this. He referenced a bad recession potentially coming, but he pointed out that his bank is ready for that battle, and that's important. J.P. Morgan has simulated a quote-unquote extremely adverse scenario. doesn't sound versed at all, very adverse. If the economy shrinks 35% this year, which would be big, J.P. Morgan would still be able to lend to businesses. That was encouraging, and that is why

Jamie Diamond refers to his bank as a port in the storm. Jamie Diamond loves saying things that you have to Google, like old school expressions. We're like, you spend it a little too much time trying to become a Hemingway during this whole work-from-home situation, Jamie. A port in the storm is apparently like a refuge from chaos where you can like find common comfort. It's a lot. It's It's beautiful. We love the metaphor. Next time, let's put this into more poetic pros. We like where you're going. Jamie Diamond also stressed the importance of planning right now. Yeah. How and when the economy is going to get started because people need to get back to work. If you're a J.P. Morgan employee right now, you probably want to hit up your team and say, hey, I'm going to need to expense a lot of things if I'm going to be comfortable in this office in a couple months. Now, he also stressed, of course, because he loves to brag about his institution, that J.P. Morgan is so strong, he is not even going to consider.

Cutting the dividend. No. Unless that terrible, extremely adverse scenario we just described, happens for the rest of this year. Quick reminder, the dividend is that quarterly cash check that shareholders get sent from a company just like Nana would give you in the mail. But you'll only send dividends if you financially can, if you have like profits and plenty of money. Also a reminder, J.P. Morgan is the second biggest bank in the U.S., the number one most valuable bank in the U.S., and the number one most profitable bank in the United States. By the way, before we hit the takeaway, we should mention J.P. Morgan Chase has been criticized for not ordering work from home sooner. They probably could have saved more employees from catching the virus. Spoiler alert on that takeaway. Oh, yeah,

J.P. Morgan was a little too busy making record stock trading during that period. So, Jack, what's the takeaway for our buddies over at J.P. Morgan? Banks make our dollars go further, and we need that more than ever. Snackers, if you're trying to picture banks right now, picture them like the heart that pumps money through the entire economy so it can get to where it needs to go. But Nick, last crisis in 2008 and 2009, banks were broken. They crumbled under losses, and then they needed bailouts, and then those hearts couldn't put money throughout the economy. Now, the silver lining to the terrible banks from the last crisis needing a bailout. Yeah. Is that intense regulation followed, and now, because of that, the banks are stronger than ever.

We're talking fewer risky loans, more cash on hand-to-hand on another crisis. They've got their mojo back. They've undone their ties, and it's a little more casualty office. Right now, while they're the virus is here, banks are crucial to lend out rescue loans so that businesses can survive until this is over. And when the virus is gone, banks are crucial for loaning out to businesses so they can rebuild. One of America's biggest strengths to survive this crisis is our strong banks. Jack, can you whip up the takeaways for us over there, please? Berkshire Hathaway is a stock that owns lots of other stocks. It's also the smart money, and the smart money just sold off its airline stocks. Yeah, bad sign for airline stocks.

Our second story, Constellation Brands, is serving up just the right drinks that people want in the coronavirus. They also know millennial consumers better than millennials know themselves. Whoa. Very true. Third and final story, J.P. Morgan Chase has the same CEO today as it had in the last crisis, Jamie Diamond. His name's Jamie Diamond, and he's proud that his bank is strong enough to support the economy when it needs it most. The last Targary. Now, time for our snack fact of the day. This one came in a little battered with some chips on the side, a little bit of cod, and maybe some Worcestershire. Are you running out of British food things? I didn't know how to pronounce Worcester.

This one's from Henrik Kane of Canterbury, England, who is a 16-year-old snacker. We are so thankful you're listening. Any relation to Harry Kane, the English soccer player. Well, wait for him to answer on that. The answer sounds like a maybe. And I believe up there it's pronounced Canterbury, England. Adam Newman's fortune. according to Henrik Kane, has plummeted by 97% in the past year. We're talking about the co-founder

of WeWork who went from having a $13.5 billion fortune last year to about $450 million today. Snackers, you all looked fantastic today. If you're wondering what was that squeaky toy noise in yesterday's pod, yes, that was the official profit puppy of Robin Hood Snacks. And you can check out a picture of River at T-Boy Jack. That's my Twitter handle. I'm going to tweet out of I'm at Nick of New York, and we'll make sure we get you those consolation slide number 12. 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, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, 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.