The Best One Yet - 🍖 “Maaaa, the meatloaf” — InstaPot’s bankruptcy. Hospitals’ surgery surge. The Economy’s power pause.

Episode Date: June 15, 2023

InstaPot has gone from the fastest-growing kitchen appliance to a bankrupt company — Because it ignored the art of aspiration. UnitedHealth’s stock fell 6% yesterday because the CEO said old people are getting too many surgeries – And funny thing about health insurance companies… they hope you don’t use their health insurance. And the Fed just announced a big Pause — Because after increasing interest rates for 15-straight months, our economy is at an inflection point. $TUP $UNH $SPY Want merch, a shoutout, or got TheBestFactYet? Go to: www.tboypod.com Follow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypod And now watch us on Youtube _______________________________ 0:00 - Intro 1:09 - Beatles using AI 3:19 - Instapot Bankruptcy 7:45 - Fed Pauses Intrest Rates 12:26 - United Health Stock 15:41 - Takeaways 16:21 - Best Fact Yet 17:41 - Shoutouts 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. It's Thursday, the new Friday, June 15th. And today's pod is just the best one yet. It is a tea boy, Jack. Thursday, the new Friday. Nice to see you, Nick. Oh, and all the Yetis who sent us Sevice Wednesday photos, keep them coming.

No one's sending us those photos. People are sending us those photos. No, they're not. No, they're DMing the photos. Don't encourage. A little bit of shrimp. Jack, first story. What do we got for the show? Our first story is Instapot.

Instapot was the fastest growing appliance. in America, but it just filed for bankruptcy. Because Instapot forgot about the art of aspiration. For our second story, the economy, just had its two most important days of the month. So Jack and I are looking at homes, we're looking at eggs, and we're looking at the Great Paws. And our third and final story is one healthcare stock. It just told us something funny about your health. Yet he's apparently, you're getting too many surgeries.

Scalple! Oh, yeah. More scalples. Too many. surgeries. But Yetis, before we hit that wonderful mix. This is a fantastic mix of stories. What, honestly, a perfect mix for Thursday, Jack. The Beatles, the famous rock band from Britain, they're releasing one more song. Besties, the Beatles are releasing one final album. Can you say encore, Yeties?

Yes, apparently we can. But Jack, can we sprinkle on a little context here? There's only two remaining Beatles from that band left. Paul and Ringgo. Yeah. Sadly, we are. missing John and George. We only got two Beatles left. But get this, the new final Beatles record, it is thanks to artificial intelligence. This is wild. The Beatles are using AI to bring back John Lennon. According to the BBC, years ago, Paul McCartney was given a tape from John Lennon's widow, Yoko owner. And in that tape, John Lennon sang a song, a grainy, low-quality, unfinished song. But now, Paul McCartney is going to use AI to extricate.

John's voice out of that cassette tape. AI just used that voice and turned it into a new Beatles song. The song will be released later this year. Well, Jack, I mean, it does look like Paul got a little help from his friends in the tech department. AI is getting better all the time. All you need is tech. Tech is all you need.

Now, Yeties, when you hear this new Beatles song, it's going to be like he's standing right in front of you. Speaking words of wisdom, let it be. Because there's nothing you can do that can't be done. Nothing you can sing that can't be sung. you can say, but you can learn how to play the game. It's easy. Now, we know what you're thinking, Yetis.

Hey, dude, don't make it all bad. Did they just take a sad song and make it better? Just remember to let AI into your heart. Then you can start to make it better. Better. Better. Three stories. Before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm.

It's a 50%. That's a fat tip. Tea boys. 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. For our first story, Instapot, instant pot, the number one pressure cooker in the entire country just filed for bankruptcy.

Because when you're heating up, you can't stop feeling. Ladies, we are talking about Instapot, the millennial crock pot. Or as I call it, Pepe La Pot. Jack, what do I got to do to get a pulled pork, a fondue, and a giant? Jumbalaya out of you. I'm going to need an Instapot. Instapot, aka the Instant Pot, was invented by a laid-off Canadian tech worker 14 years ago. And the way he put it, it solved a pretty clear problem, actually.

The Instapot was slow cooking, but with no looking. You don't want to leave your beans on the stove and then burn the beans. We've all been there. The Instapot was also a pressure cooker, so they claimed they could cook meat 70% quicker. Ma, the meatloaf. It's already cooked. But the numbers don't look cooked. Or they do look cooked, maybe overcutt. No, they do look cooked.

Yeah, good point, Jeff. They're like a little overcooked. Get this, Yeties. Sales of the Instapot have fallen for seven straight quarters. Last quarter, Instapot sales are down 50% from their all-time high, which was just two years ago. So here's the news. This week, the private equity company that owns Instapot declared bankruptcy. So Jack and I are looking at this and we're like, wow, was the Instapot a one-hit wonder product?

A one-hit wonder, like Chumbabumba, the Macarena, or something? Civece Wednesday. Don't encourage him, Yetis, don't encourage him. But Yetis, here's what Jack and I found fascinating about this story. Us consumers, we buy in cycles. Never forget it. And Instapot forgot that cycles don't just go up, they also go down. Case in point, Jack, we whip out the whiteboard and talk about the appliance

de jour of every decade. There's a long history of appliance de jures. For example, in the 90s, the appliance de jure was the blender. In the 2000s, the appliance de jure was the blender. In the 2000s, the appliance de jure. was the soda stream. And in the 2010s, it was the Instapot. You got it from every ant you have for Christmas. Jack, the Curry K Cup, that fits in there somewhere. True. But yet he's recently, we have seen a new appliance DeJure. And what is that appliance, Jack? The air fryer. Yeah, we're in the air friar era. 60% of American

homes now have air friars. Full disclosure, I recently got air friard. Full, full disclosure, this is Nick. And I have air friar fomo. I asked Jack to send me air friar picks all the time. And as Nick and I both know, and you know as well, we're living in a zero-sum cabinet. Yeah, that's the issue at this industry, because if you're using an air fryer, you're not using an Instapot. If you whip up your short ribs in an air friar, then the Instapot's staying in the pantry, collection dust. So Yetis, let's add it all up here. On the up cycle, Instapot was the fastest growing kitchen appliance in America for the last decade. But sales were so hot, the company forgot that a down cycle is also part of the cycle. Yeah, Instapot got blinded by its own heat.

It got blinded by the air friar. Civece Wednesday. So, Jack, what is the takeaway for our buddies over at Instapot? Instapot's other big mistake was ignoring the art of aspiration. Yeti's the car industry. The car industry is the master of aspiration. That's how they get you to buy a new car every few years. Every few years, it's the same core product.

There's just new features, colors, and designs you got to have. For example, Toyota wants you to start with a Toyota, but aspire to buy a Lexus, which they also own. And if you do stick with Toyota, you gotta get the all-new 2025 model. But here's the problem. For Instapot, they didn't do that. For years, they just sold one basic type of Instapot. Instapot didn't launch new features, new colors, or a high-end premium version to aspire to. Ifso facto, you never had a reason to buy a new Instapot to trade up for your Instapot or to care about the brand.

Think about it. Instapot could have developed an expensive marble pot that blended in with your high-end marble countertop. Or Jack, they could have done a collaboration with like Bobby Flay and done a fancy Bobby Flay kitchen Instapot. If it did some of these things, maybe Instapot would have remained more relevant, more fresh for a longer period of time. But Instapot never built a product hierarchy. Instapart missed the art of aspiration. For our second story, the great pond. After a year and a half of raise in interest rates, yesterday the Fed finally pressed pause. Because we're at a critical inflection point in the economy.

Yeties, back in March, Jack and I told you about the most powerful force in the economy. It's not Batman. The most powerful force in the economy is interest rates. It is interest rates. And high interest rates over the last one and a half years, they have changed everything. High interest rates are why stocks were down. It's why there were no IPOs in the past couple of years. why tech companies have been laying off people on mass. It's why you're buying less stuff. It's all because of high interest rates. And thanks to a major inflation problem, high interest rates is all we've known for the past 15 months. They've been getting higher and higher and higher. It's frankly all CNBC ever wants to talk about, actually, Jack. The 10-year bond yield.

CNBC just loves, loves interest rates. But yet, everything we just said changed yesterday. For the first time in 15 months, our central bank pressed pause. Just pressed pause. Like, breathe in? Breathe out. The Fed's benchmark interest rate is going to stay at 5.25%, which means for the first time in 10 meetings, the Fed decided not to increase interest rates again. So, Yetis, if you're borrowing money right now, throwing it on the Amex, this could mean

a lower interest rate. If you're hoping to buy a house sometime soon, this could mean a lower mortgage rate. And if you're a startup hoping to go public, this could mean it's a tad easier to raise money right now. This pause means something for every part of the economy. This pause is like a really big deal. This is a big pause. But the big question is, what happens next? So Jack and I whipped up a takeaway.

So Jack, what's the takeaway for our buddies who are all of us in the economy? This economy is at a critical inflection point. Okay, Yeties, let's just pause the pod for a second, too. This was a really big week. we are seeing signals that the worst of inflation could be over. This week, we learned that airline ticket prices fell 13% in May from last year. And we learned that egg prices fell 14% from last month. Plus, stock markets just hit a bull market.

We're up 20%. Not too shabby jack. But the Fed thinks that inflation could flare up again. So it's playing, wait and see. If inflation gets worse, the Fed could raise rates again, which would mean more financial pain could. be coming. So the way Nick and I see it, the economy is at a critical inflection point. For our third and final story, healthcare stocks, they dropped big yesterday for actually a kind of

funny reason, right, Jack? They dropped because you're going to the doctor. Yeah, you're going to the doctor. And that's bad for health insurance. Because there's a big difference between customers and members. Yeties. Let's kick it off with a little trivia here. Jack, fifth largest company in America. What is it? You're thinking tech company. But it's actually United Healthcare. Yeah, United Health Care. They're the fifth biggest company in America. They insure 53 million people for their health. And from those 53 million insured people, United Health collects $257 billion a year in health insurance premiums. Which they turned into $20 billion of profit. But the stock fell by 6% yesterday because of one surprising line from the CEO. All right, here's that line. Here's that line. Older Americans are getting more non-urgent surgeries than expected. Jack, we can

translation on that thing? Yeah, sure, Nick. More grandpas and gam gams are getting expensive hip and knee replacements. Nana's got a new kidney and she's loving every minute of it, Jack. Yeti's during the pandemic, older people, they avoided non-urgent surgeries because they didn't want to go to the hospital and see any germs. They're making up for lost time and they're getting that scalpel out and having the surgeries done ASAP. Yeah, they got to play pickleball ASAP. Now, here's the wild thing about this situation, Yeties. That single line yesterday, it triggered a musical chairs of healthcare stocks. First, United Healthcare.

Their stock dropped, and it raised $42 billion of stock market value. Let's sprinkle on a little context here. That is 10 lifts worth of value. Disappeared in one day. Because every month, money from your paycheck goes to your health insurance. And United keeps that money. But when you get expensive surgery, United doesn't keep that money anymore. They pay that money to the hospital.

So if you're hitting up the hospital for a new knee, that's great for medical products and great for the hospital. Right. But it's bad for the health insurance company. Yes, it is. So yet these hospital stocks, they actually popped yesterday because that expensive surgery, it's a profit puppy. But health insurance stocks dropped on the news that people are getting more surgeries.

Because they pay for that expensive surgery. Jack, does this thing on my thigh look bad to you? Let me get you some thigh to astrosol. Perfect. I'll take two. So Jack, what's the takeaway for our buddies over in the health? industry. There's a huge difference between customers and members. Funny thing Jack and I noticed, Jadis, companies love customers, but ironically, they hate members.

A customer is someone who buys a product and businesses love them. Yeah, like the more coffee customers Starbucks gets, the more profits Starbucks makes. But members is a different story. If a company has members, they actually don't want to see you ever. Like gyms, here's what Jim's love. Jim's love when paying members never actually show up, but keep on paying. And health insurance companies love when they're paying members never show up to the hospital, but they keep paying for health insurance. So, Yetis, there's actually a huge difference between customers and members. Companies love customers, but ironically, they kind of hate members. Jack, first of all, your voice is sounding great. It's back to beautiful.

It's back. And can you whip up the takeaways for us over that? Instapot was once the fastest selling appliance in America. But Instapot is old news. because it ignored the art of aspiration. For our second story, after increasing interest rates for 10 meetings in a row, the Fed paused yesterday. Because inflation and the economy are at an inflection point. And our third and final story is United Health. This insurance company fell on where their members are getting more surgeries than expected.

That thing on your thigh, because companies love customers, but they kind of hate members. They kind of do. Now, time for the best fact yet. one sent in by Kara from lovely San Diego, California. Yesterday, we told you about a family that found a million pennies in the basement of their dad's house. Yeah, a million pennies. It was kind of a penny problem. A million pennies, though, is $10,000. But not all pennies are worth one penny. Not all pennies are worth one cent. The most valuable penny ever made is actually worth $1.2 million. A $1 million penny, and it just happened this year. It's a collectible. It's a collectible. It's a

rare copper penny from 1958 with double lettering. Yeah, ironically, it accidentally says the word liberty twice on it. So, like, it's not a perfect penny, but it's also like kind of the world's most perfect penny. Liberty, liberty, liberty, liberty. Yeties, there's one cent penny.

Just sold an auction for $1.2 million. Jay, it's actually a really nice lesson for kids. This feels like a Disney story, actually. Imperfection. It can be a good thing. Yeah, imperfection is perfection. Yetis, you look fantastic today. And by the way, if you want to help grow the show, best thing you can do, talk to someone

today and say, hey, H-Y-H-T-B-O-Y. Tell your buddy, have you had the best one yet? Have you had the best one yet? The best way to grow the show. If you know, you know. And we know. And before we go, a happy birthday to Yeti, Katie, Katie Wiseheart, who's dancing to our jingle and celebrating that birthday down in Chicago, doing logistics.

And happy birthday to Joanne Park from West New York. New Jersey. And Thomas Kurtzinger, enjoy that 25th birthday down in Louisville, Kentucky. Congratulations to Margo and Ian DeBrono, who got married in Philly, but are now honeymooning in St. Lucia. And congratulations to Peyton Steinfeld, who's kicking off three weeks of summer school right now. And to anyone else celebrate something today, make it a tee boy. Celebrate the wins. This is Jack Iron Stock of Disney, and Nick never takes a penny. He only leaves a penny. That's true. It's true. Here we go. Three, two.

This is Nick. This is Jack. It's Thursday. Dude, I just punched my mic. This is Jack. Let me give you a fresh start. Let me give you a fresh start that Mike can recover over there.