The Best One Yet - “Puma-fy Harley-Davidson” — Warren Buffett’s $9.7B bet. Chipotle launches e-farmers market. Harley jumps 7%.

Episode Date: July 7, 2020

Harley shares surged 7% because its new CEO is turning the company into Puma (in a good way). Warren Buffett is making his first big corona-conomy bet by buying up Dominion Energy, a natural gas pipeline company. And Chipotle launches a virtual farmers market for its suppliers so you can DIY some barbacoa at home.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, July 7th. Happy T-Boy Tuesday. We happen to be serving up the best one yet. Perfect timing for the T-Boy Jack. First story, what do we got?

What's on deck? Warren Buffett's company, Berkshire Hathaway, just spent nearly $10 billion on oil pipeline. Because when everyone's talking about tech stocks, Warren don't care about tech stocks. Second story, Harley Davidson chairs just surged 7% because it's trying to act more like Puma. Puma?

Puma? Puma. Puma and Timoan. If you've got a classic Harley Bicep tattoo, you may need to contact your tattoo guy. You may need to make a little switch there. What my buddy Nick is trying to say is they changed their logo. At the very least, they changed their logo. Third and final story, Chipotle is cutting out itself to let farms go direct to consumer. Jack, did Chipotle just realize it's its own middleman? Yeah, the burrito beast just created a virtual farmer's market to save its supply chain. We're talking DTC direct to to consumer DT.C. Snackers, before we get into those three great stories, there are currently 3,304 different official emoji in the world. Now, that's if you include like a whole bunch of variations on skin color, gender, et cetera, also the default Simpsons yellow. Right. Every emoji

smiley face has default Simpsons yellow and then like the whole package of Crayola crayons. Jack and I couldn't decide if we go with Crayola crayons or Skittles on that one, but we're going to default to Creola. There are also 117 new emoji arriving this year that we'll give your quick heads up on. You got Woolly Mammoth. You got toilet plunders. And you've got the Italian pinch. The Italian pinch being like, I just made an incredible lasagna. Two fingers, thumbed together, and a little bit of a kiss. Now, this is all regulated by California's mysterious Unicode Consortium, which we assume Mark Zuckerberg has veto power over. It's got to be a bond villain if Zuck's not zucking this thing already. Oh, by the way, the plural of emoji, it's just emoji. Like fish,

like deer and like share and like moose. Now, we've got one question for snackers on this T-Boy Tuesday. When you think of snacks, what's the one emoji you think of? When you think of snacks daily, what is the one emoji that you think of? All right, now that you've thought about it, tweet us at Robin Hood Snacks or tag us on Insta at Robin Hood Snacks. We've got a reason for this, but we're just going to leave it at that. T-Boy Tuesday, let's hit our three stories.

You're tuned in to Snacks Daily. We spoke to the lawyers and we got to get something illegal out the way. For 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. It's not a research report or investment advice. Not an offer or sale of a security.

Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Harley Davidson stock jumped 7% yesterday because it's pivoting out of boomers. Snackers, you're going to love this, though. They picked a creative ticker symbol, one of the few the proud.

For the 486th the year in a row, best ticker symbol goes to Hogg, which is owned by Harley Davidson. H-O-G, which is a nickname for a motorcycle, I'm pretty sure, although I don't know how it's different than a chopper. Full disclosure, Jack Tommy had to ride a bike, and that's the extent of my two-wheeledness.

Bike, actually, bicycle, Nick. Let's be clear for the Snackers here. Now, unfortunately, the ticker symbol hog was the last creative thing that Harley Davidson has done. So true. Harley Davidson sales have been struggling for as long as Jack and I have been snacking, which is many, many years now. Now, Harley Davidson still owns 50% of the U.S. motorcycle market, not bad, but its stock has fallen by 50% in the past two years. That's because extremely loud and incredibly verbose motorcycles are not the kind of thing

that appeals to a generation that likes to keep their foam lattes just right and not be like blown over. It's scary, because it's scary. Now, Harley Stock was just upgraded yesterday by an investment bank because of the new CEO and the early moves that he's made. All right, so Jack and I jumped into the LinkedIn situation here. Jack, did they go with a tough American guy to run Harley Davidson? Shockingly, no, which means they probably went with a Suzuki Motomaster, right? No, Jack, they did not. Instead, can you please take out the envelope? Who is the new CEO of Harley Davidson? Yochen Zeitz from Germany. Sounds like this guy used to run a camera firm. Jack, what's going on with Germany's finest? Yolken Zytes led Puma, actually,

Nick, for 18 years, which is one of Germany's top apparel companies behind Adidas. Not too shabby. And point number one in the bullets on his LinkedIn, the stock rose by 4,000% over at Puma while he was leading the company's turnaround. Yolkin Zites co-wrote a business book with a Benedictine monk, which is at the bottom of his resume, but pretty cool. Philosophy guy, maybe. He's probably looking at Harley Davidson now and being like, why are the bike so loud? And then he's being like, what is loud? What is noise? So Jack and I are thinking here, this could be the perfect timing for Zytes to take advantage of the Winnebago effect that Harley could be riding. Snackers, you probably experience it this weekend. The American road trip is back, thanks to its COVID-friendliness. Americans want to hit the road. Maybe they'll try hopping on a bike

instead, and then they can tattoo themselves later. Harley can ride this trend of the American road trip and highlight the actual experience of the road trip. Like actually getting there can be cool on Harley. Apparently, like, a lot of poetry has been written about, like, the saddle between your legs and, like, the wind in your hair and stuff. It's a beautiful thing. A lot of tattoos have been written, too. So, Jack, what's the takeaway for our buddies over at Harley? Harley is trying the impossible, pivoting its brand from Under Armour to Lulu Lemon. That's right, Snackers. Under Armour missed the athleisure trend because it was so focused on, like, performance gear and protecting houses. That's a lot like how Harley missed the efficient and experiential travel trend that millennials have

embraced. So we're thinking to win back young customers, Harley needs to embrace the softer, more welcoming brand like Lulu Lemon has done so well in at leisure. We're already noticing signs of Zites doing that with his turnaround plan at Harley Davidson. Well, Jack and I jumped in snack style, checked out the Harley website. You see it immediately with the brand. The new logo? I dropped my moccuccino and I checked out Harley Davidson.com. They drop the old school lettering famous from seeing on all those bicep tattoos. Harley, you're trying to become a direct-to-consumer like shampoo brand? It's a very aesthetically pleasing like modern design, minimalists. And then when it comes to like new bikes, they're offering a new bike called the Bronx street bike, less rural edge, more urban edge.

They drop the the the, for the Bronx street bike, which is a major disappointment. The only time you shouldn't drop the the, even Justin Timberlake would agree on this. Harley also launched a 24-7 streaming channel, and it's making everything electronic from motorcycles to even an electric bicycle coming soon. Harley's been too much under armor and needs to look more Lulu. For our second story, Berkshire Hathaway just acquired $9.7 billion worth of natural gas pipelines. Right when things look their worst, that's when Warren Buffett wants in. Warren H.W. Buffett wants in the Albus Dumbledore of American Finance. Increase him, stock him.

Warren's actually got a scar on his forehead from this one-time Apple almost cut their dividend, Jack. Nick, whenever Warren Buffett speaks, we all feel a little bit more at ease. You just have to look at the guy and you feel better about whatever it is you're doing right now. The 89-year-old man, Warren Buffett, has a company called Berkshire Hathaway, and it's slurping up an energy drink right now called Dominion Energy. That's right, Dominion Energy, ticker symbol, just D. They got the alphabet, you got to own just the letter. They got D, impressive, Jack.

Dunkin' Donuts. was not happy about that. Now, this company is doing the old-fashioned midstream energy. They are not drilling and they are not extracting oil and gases from planet Earth. They're also not selling those oil and gases to you, the consumer. They're right in the middle of the curve. Dominion is in the juicy, meaty part of the curve. They are midstream, moving natural gas around the country to plants and utilities through pipelines. And they're doing that through not just any pipelines, we're talking 7,700 miles of natural gas pipelines and 900 billion cubic feet of gas storage. Is that a lot? We have no idea. Billion with a B. And is that a lot? Nick, I think a Los Angeles

to New York City drive is 3,000 miles. So this can do that two and a half times with oil pipelines. When we're talking billions and cubic feet, we're just going to go with the fact this seems big. So Berkshire Hathaway is investing in fossil fuels when everyone else isn't. And that's fascinating because executives over at ExxonMobil, Shell, and BP, they're kind of depressed right now. In the past couple weeks, they all admitted to Wall Street that their oil fields have tanked in value. Someone needs to send these guys edible arrangements. In the meantime, Dominion got whacked with two regulatory blows just as oil prices were dropping. They just announced yesterday, actually, that their six-year-old Atlantic Coast Pipeline project,

they had to completely bail on it. They're canceling. And they'd already invested, like, billions of dollars worth in this specific project. really bad news. And the federal government just ordered that the Dakota Access pipeline needs to shut down because of environmental impact. Now that Dakota Access pipeline isn't Dominion's pipeline, but this is just a really bad sign about the future of natural gas pipelines in general. Just as the pipeline industry looks at its worst, Berkshire Hathaway goes and acquires up 18% of the market with Dominion Energy. So, Jack, what's the takeaway for our buddies over

at Warren Buffett's Berkshire Hathaway? Berkshire invests in ships, not rocket ships. Snack, Warren Buffett doesn't invest in like the Falcon Triple X Mars Explore rocket ship that's tying a Tesla up all the way to space. There's way too much hype in those rocket chips and it's a business that Warren Buffett doesn't understand. Warren Buffett's that one guy who's like still doing the Netflix DVD thing. He is the icon of value investing. He buys low-priced things that he believes will climb in value because they're under value. And with so much negative buzz around oil pipelines, Warren Buffett's thinking their stocks are too low right now. He's actually following his own advice right now.

Classic. Be fearful when others are greedy and greedy when others are fearful. Others in natural gas are fearful right now. So Warren's being greedy, aka classic Warren Buffett. For our third and final story, this one's wild. Chipotle is whipping up virtual farmers markets. Think e-commerce, but from your local corn guy in the field you drive by every day. Steve, he's the best.

Now Snackers, Jack and I don't do a. lot of life lessons. You know, you want to be a PFWTM, person familiar with the matter. But we also got to make this very clear point that we've learned from Chipotle. Guac is extra, and it's always extra. It is always extra in life. Chipotle's virtual farmers market is digitizing the farmer's market concept. That's right. They've whipped this up over at Chipotle, and they're kicking off this partnership with four suppliers who've been working with Chipotle for over a decade for the food you eat. Now, it's Farmersmarket.chipote.com, and you'd expect to see, like,

like mushrooms and strawberries and asparagus. Yeah, because that's like, you know, farmers market go-toes. Classic. How old is this asparagus? Oh, is picked this morning. That's delightful. I'll pay $50 for it. But Chipotle, right off the bat, is highlighting Neiman Ranch.

Yeah. Where they breed their pork like their family. The pigs, like, live with the family. I don't know, maybe. We assume that. Until they kill them. Right. And then you got Petaluma Creamery, where the cows are so humanely raised.

They actually milk themselves, Jack. It's a really nice thing. So they got Neiman Ranch pork, Petula creamery cheese, and then they got some rice and some cilantro. But they're showing off the ingredients that fill up your Chipotle burrito. So Jack and I jumped in snack style to this new product launch, and we noticed something really interesting. Each farm is getting its own, separate, luxurious, brand new e-commerce website. The websites look really nice. They show off the farms.

They show a lot of nice pictures to show the fields and the sunsets. And there's only one reference to Chipotle. The focus is completely on like the... food products that are being sold. Yeah, you go to Neiman Ranch's pork, and what you're staring at is like the Apple, Cinnamon Bacon from Neiman Ranch. You're not looking at like a whole ad from Chipotle, interestingly. And then you can buy up the ingredients from the farm to recreate your own Chipotle burrito bowl DIY style at home. DIY, because you're always complaining that someone wrapped your burrito incorrectly, well, why don't you do it yourself? Now, behind the scenes,

Chipotle is the corporation financing this whole operation, and they're partnering up with Shopify. That's right. set up an e-commerce shop for each of the farmers through Shopify, and then they're going to actually pay the Shopify fees for the next two years on behalf of the farmers. Chippole is like your generous grandpa. Yeah. He agrees to pay for your greens fees and even a cart if you just go and show up and play. He just wants to spend some time with you. He'll even buy you a driver. No big deal. Now, it's a nice little deal because a lot of the farms that supply Chipotle, they're struggling because of the restaurant lockdown associated COVID-19. You've got, you know, pedaling. You've got, you know, petalil. Luma Creamery's probably been like dumping away Gouda cheese for the last two months because no

restaurants are buying the stuff. So with a virtual farmer's market put together by Chipotle, maybe they can boost sales, maybe they can bring in more money and waste less cheese. And if you're Chipotle, you get a nice little PR press release out of this thing. Because you're being a friend to your farmers, but it's really more than that that Chipotle is getting. Perfect segue, Jack. So what's the takeaway for our buddies over a Chipotle? What Chipotle really wants is supply chain insurance. Snackers, Chipotle is, competitive advantage is really its ability to scale sustainable ingredients. Why do people go to fast casual instead of fast food? They pay a little bit more because of the fresh ingredients. Sweet green,

Panera, ShakeShack, they're all growing, but Chipotle is the one that's leading this fast casual initiative. Chipotle's strength is its reliable supply chain for consistent fresh produce. But when that supply chain is not working, Chipotle suffers, and we've seen that in the past. In 2015, after their biggest food illness scare, they had to cancel carnitas from the menu and make you order the other stuff. Now they're warning that the average price of burritos is going to go up because of tariffs on Mexico. Chipotle lives and dies by its very particular, very carefully selected supply chain of farmers. And this new move helps their farm suppliers survive COVID. Kind of like a landlord discounting your rent until like COVID's over.

Jack, can you whip up the takeaways for us over there? Harley Davidson is making valiant moves to modernize its. It's brand. Less under armor, more Lulu Lemon. Berkshire Hathaway is buying fossil fuels, 9.7 billion of it. Because Warren Buffett invests in ships, not rocket ships. Chipotle is trying to boost sales for its farm supply chain. Its virtual farmer's market is like a supply chain insurance policy.

Not too shabby. And the guac is always extra. Now, time for our snack fact. This one sent in by Vibeov in New Delhi, India. Nick, you know I'm a Vermonter. I know a thing or two about IP. Jack, I know well. I've heard when you cut a Vermont are open, Hetty Topper actually comes out.

We actually had sip of sunshine at our wedding, which is an IPA with an alcohol by volume of 8%. IPAs are known for high alcohol levels. It was a special day. We should point that out. Now, India Pale Ale IPA comes from when Britain was colonizing India, and so they were like pumping in a lot of hops to the beer so it could travel all the way overseas from England to India. That's right. It's not called IPA because of an ingredient in India

that was used or the brewing process that occurs in India. No. These were brewed in the UK, but being sent to India, so they loaded up with hops so it wouldn't spoil on the trip. That also made the beer incredibly alcoholic and incredibly more bitter. So 200 years ago, an IPA was just like extra preservative hoppy beer. Now it's what every hipster insists on drinking, and they won't drink anything else. Crazy story about the history of the IPA.

Now, before we go, happy 10-year wedding anniversary to Mark and Melanie Rummel. of Fort Roth, Texas. Jack's is only five months old, already listening to Snacks, already a Snacker. And happy birthday to Julia Osterery, who listens with her mom in Australia. Snacker is fantastic to have you with us today.

Remember, we all want to grow snacks, so tell your friends, H-Y-H-Y-S-D. Also, tweet us the one emoji you think of when it comes to snacks at Robin Hood Snacks. If you know, you know. This is Jack, Nick and I both on stock of Lulu Lemon, Nick on stock of Chipotle, Shopify, and ShakeShack, and I own a half share of Berkshire Hathaway.

Its name is Warren. 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.