The Best One Yet - 🌮 “RIP: Choco Taco” — Unilever’s Thin-flation. Puma’s 5th sport strategy. Chips’ love moment.

Episode Date: July 28, 2022

Puma gets no attention as the 3rd biggest sports apparel company, but it’s winning by playing where others don’t want to. Choco-Taco is considered by many the greatest ice cream invention of all time, but it’s now been discontinued. Don’t blame Inflation, blame Thin-flation. And the Senate just passed the biggest chip deal since the computer, because we’re in a “legs race” against China.$UL $PUMSYFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn 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, and today's pot is just the best one yet, Jack. TBOI, Nick. Yeties, if you want to know why stocks popped yesterday, it's because of one word, the Fed. The Fed announced their raising interest rates again, but the Fed sounded optimistic about the economy. However, if you're going to borrow money to buy a car today, you're going to pay 0.75% more in interest. That's how the Fed fights inflation.

Exactly. They yell at you to stop spending money. In the meantime, Jack, what's our first story for? for the T-Bah. Our first story is Puma. The world's third biggest sports apparel brand just announced their earnings. Funny strategy. Puma's winning because they chose a sport. Nobody else wants to play. Our second story is the U.S. Senate. They just passed the biggest chip deal in the history of the computer. Because the U.S. and China aren't in an arms race. They're in a legs race. Our third story is the Chaco Taco. Yep, we're covering it. Chaco Taco. Considered by many the most perfectly shaped ice cream delight ever,

the Chaco Taco is dead. Jack, the CDC just identified a new variant of inflation, and it's called thinflation. But Yetis, before we hit that wonderful mix. Honestly, this is actually a wild mix today. I didn't see this mix coming. As we mentioned earlier, the odds of getting bit by a New Yorker neck? One in 400,000, Jack. The odds of getting bit by a shark?

One in four million. The odds of getting hit by a coconut. Ten times more likely than that. We found Yeties a probability even slimmer. The odds of winning the lottery. Jack, that is 1 in 303 million. Perfect timing, because the biggest lottery drawing of the year happens tomorrow, Friday. Today, Thursday, 10 p.m. is the deadline to buy your Mega Millions ticket.

You should get on that right now. We'll pause the pod. Because the Mega Millions Jackpot has ballooned to a whopping $1.02 billion. What do I got to do to buy like 12 more tickets for this thing? $1 billion.02. Yaddies, we're talking about the third biggest jackpot in the history. of all lot of jackpots it's like a fifth of a lift nick yeah jack what are you going to do if you win that one point oh two billion bucks well you could buy one fifth of lift nick yeah you could probably buy half a twitter too if you win this jackpot yeties you're a human unicorn go wild but one thing we should point out

if you're the lucky winner yes guac is always extra if you win one point oh two billion dollars you don't get one point oh two billion dollars that's true because you really get six hundred and two million dollars in the lottery. Because you owe $400 million in taxes. Here's your lottery check and here's your tax bill. Step on the scale, Jimmy. Step off the scale, Jimmy. And that is why they say there are only two certainties in life, Jack.

Death and taxes. And coconuts that try to bite you. Let's turn our three stars. 13 years before this song, two boys from the Northeast met in the dawn. 50% that's a fat tip. Tea Boy City on your at list. If you know you know, because we. Red to go.

We can't wait no more, so just start the show. Our first story, while Nike and Adidas are shrinking. Puma is not. Puma is ignoring the big four American sports, and it's working. Strap them on. Jack, what's going on over with the Nike earnings? 1% sales shrinkage last quarter. Jack, what's going on with the Adidas earnings?

They grew, but barely. 1% growth last quarter. Besties, the top two athletic apparel companies. on Earth, they are straddling like 0.0% growth, barely. Number three, Puma, on the other hand, just pumped out 26% sales growth last quarter. Like they're dosing NO explode. Yeah, not too shabby. Puma, based in Bavaria, Germany, actually founded by the brother of the Adidas founder.

Now, that's the best fact yet. Ah, so. Rudolf Dossler founded Puma. Adi Dossler founded Adidas. Puma, they're publicly traded. They're about as third as big as Adidas, about as six. as big as Nike. But again, Puma is the only one of the three that is growing right now, and they're growing fast.

And that's what fascinated Jack and me. But funny thing Jack and I should point out, Puma actually has like a cycle. Like awareness of Puma in the United States, it spikes every four years. Because of the World Cup. Exactly. You got six teams in the World Cup in Qatar this November. They're going to be wearing Puma jerseys with that cute little cat on it. It's a Puma.

And that led to a funny other thing, Nick and I noticed about Puma. Yes. Puma completely ignores the big four American in sports. Exactly, Jack. Like right meow, Puma, like, right meow, Americans are football, baseball, basketball, and hockey obsessed. Can we throw lacrosse in there?

Is that the fifth? We're not going to throw across in there. It's definitely not. But Puma is winning by ignoring those four big American sports. Exactly. Puma, like the good European that it is, has absolutely no interest in America's contact sports. But Puma did just sign the fastest woman on earth. Jamaican sprinter Elaine Thompson-Hara do a big deal.

And Usain Bulk did win all his gold medals with a Puma cat across his chest. It's not just soccer and sprinting. The seven-time Formula One champion, Lewis Hamilton, he's been a Puma guy since 2012. Jack, I'm looking at the equipment here, and these are not Uncle Sam sports. Yeah, Puma's just not that into you, Tom Brady. 12 TB0. So, Jack, what's the takeaway for our buddies over at Puma? Everyone else's secondary business can be your primary business.

Yeti's, Puma is a European company, but the standout star for Puma this year, it's the Americas. The four big U.S. sports dominate the Americas, and yet Puma sales have jumped by 45% here so far this year. And the reason why Puma is focusing where its competition is not. Adidas, Nike, and Under Armour, they put their top people and their top sponsorship deals into football, baseball, basketball, and a little bit of hockey. But here's the key. Puma, they focus on the secondary sports. They're looking at the running, the golf, and the soccer, where no one else is playing in the United States. Puma's biggest basketball moment, by the way? Yeah, it wasn't LeBron.

Was JZ wearing some casual suede Puma's court side at the NBA finals? Buma's primary business is everyone else's secondary business. It's a bold strategy, cotton, and it's working for. For our second story, the U.S. Senate just passed a $280 billion bill to stand up to China, and they did it in a united way. It's called the Chips and Science Act, but it's all about the chips. Yetis, the U.S. Senate just got a kumbaya moment straight out of Lion King II, Return of Rafiki. Remember the chips bill, the $52 billion of government funding to stimulate more made

in USA chips? We talked about it months ago. It wasn't top of mind, but yes. Well, the Senate just finally passed that bill in Washington, D.C. finally. That's why semiconductor stocks like your Intel jumped on Wednesday. On Word, they're going to get some DC dollars. Oh, yeah, a whole lot of dollars. Oh, wait, Nick, there's more.

That's right. There's more. What do we got, Jack? Another $200 billion of strategic funding for crucial made-in-USA industries. The Chips and Science Act, it actually passed smoothly 64 to 33 in the Senate. Like we said, it was a kumbaya moment. Lion King, too. The science part of the bill is artificial intelligence, robotics, and quantum computing.

And the other futuristic stuff that we don't want China to beat us. Nick, let's open it up for a minute, though, to Sun Tzu's Art of War. Ah, let's do it, Jack. The greatest uniter is a common foe, Chapter 6. The enemy of my enemy is my friend. Yeties, here is the wild situation we noticed. Republicans can't stand government spending in general. And Democrats can't stand when profitable corporations,

get government subsidies. But this bill does both of those hated things, and yet both Democrats and Republicans both voted for it. Because of a common foe, China. Because China's government is aggressively focused on technological domination. And that threat from China was the common foe that united our Senate. Now this bill is expected to pass the House and then get signed into law by the president. Someone wake Rafiki. We got a piece pipe to smoke. So, Jack, what's the takeaway from? our buddies over in the entire United States economy. The United States versus Soviet Union was an arms race. The United States versus China is a legs race.

It's a legs race because everything runs on chips. See what we did there? We see what we did there. I'm pretty proud of what we did there. It's poetry. Yeties, whoever dominates chips in the future could dominate the world economy and therefore kind of the world. All those scientific initiatives, Jack and I just mentioned, they all require chips to power.

And so does your car. and so does your fridge and so does your toothbrush these days. And guess what? Today, more than 50% of the world's chips are made in Taiwan. Even scarier, China is expected to someday invade Taiwan, much like Russia is invading Ukraine right now. That's why a divided Congress just united to fund American chips. The U.S. First Soviet Union was an arms race. U.S. first China is a legs race. Because everything runs on chips.

Now a word from our sponsor, Robin Hood. Okay, so Jack and I got into the news business with our previous company. Markets now. Our goal was basically to democratize financial news for our generation. Cut the jargon. Talk about the profit puppy. So when we first connected with Robin Hood, there was a chemistry there. We were doing for financial news what Robin Hood was doing for the financial system.

Robin Hood was democratizing finance for all. And it started by eliminating trading commissions and building a beautiful app. Remember, we had the same color green. The green was destiny. Destiny, absolutely. So we sold market snacks to Robin Hood. and we launched Robin Hood Snacks. The equivalent of proposing, getting married,

and building a family together in just three years. Much more to come on why we're thrilled that Robin Hood is our exclusive sponsor. If you're not investing in Robin Hood yet to get started, you can go to robin hood.com slash T-Boy and choose a free stock. That's robin hood.com slash T-B-O-Y. Certain limitations apply for a list of other fees. View the fee schedule at RBNHD.C-O-S-E-O-S-E.

All investments involve risk. Robin Hood Financial LLC, member S-I-P-C. By the way, Robin Hood, no longer affiliated with us or the podcast. For our third and final story, you may want to sit down, stand up, and sit back down again. We've got some sad news. The chaco taco taco has been discontinued.

But the demise of the chaco taco is also the start of an unfortunate economic trend. Full disclosure, I don't think I ever try to chaco taco taco. You know, I've had one of them? The rapper didn't appeal to me. 90% of the people posting out the chaco taco have never had a chaco taco taco. I'm not holding against them.

I was always a Snickers ice cream bar guy. In the meantime, Yetis, a milestone. Over one billion Chaco Taco ice cream tacos were sold in the last 30 years. It is an ice cream truck icon. One billion tacos. Legendary cult following. This thing is like the Burning Man of Gelato. Experts actually consider the Chaco Taco Taco, the perfect ice cream product.

Exactly. Because, Jack, it's got the optimal bite yield. Due to the shape and structure of the Chaco Taco Taco. You get ice cream, cone, and like hard chocolate topping in every single bite. It's like the greatest innovation in dairy since milking the cow. A regular ice cream cone, on the other hand, it's mostly just regular ice cream and then a lot of just regular cone with no mixing in between. It's like creamsicle, get a job.

In the meantime, what many people don't realize is that the founding story of the chaco taco ice cream, it's kind of loco. Yeah. This wasn't cooked up by some marketing group or research and development team. No, no, no, no. No, no. This chaco taco appeared first in a vision in 1983. Yeah, in an interview with Eder, the creator of the Chaco Taco, Alan Drazen said he got lost

on an expedition in Mexico, ran out of water, and was suffering in the desert heat. And then, in a moment of true trial and tribulation, he saw a mirage. True story. An ice cream taco on the horizon rising above. Again, his words. So, Alan Dresen created this ice cream concoction, which is an ice cream shaped like a taco, which really hit an inflection point at a key moment. Unilever bought the licensing and distribution rights of Chaco Taco Taco.

And Unilever is the biggest ice cream company on the planet. Right, they own like Ben and Jerry's right down the street from you, right? And food and beverage brands, they live and die by distribution. So they scaled the Chaco Taco Taco to every freezer they could find. Chaco Taco Taco suddenly went from 1,000 food trucks to 30,000 stores within a year. And then 120,000 stores sold the Chaco Taco Taco. And then Unilever brokered a deal with Taco Bell. to bring the Chaco Taco Taco Ice Cream to over 10,000 Taco Bell restaurants.

Every gas station I've ever stopped at offers the Chaco Taco Taco. Eat that Klondike, although it is a... It is Klondike, isn't it? But here is the sad news after that wild story. Chaco Taco Taco is over. Production is being ended immediately. A moment of silence for the Chaco Taco Taco. So, Jack, what's the takeaway for our buddies over at Chaco Taco Taco?

There's a new variant of inflation. It's called thinflation. Yeties, the Fed just raised interest rates yesterday. We told you another 0.75% and that's to fight inflation. But Chaco's demise represents a new reaction from companies to rising prices. And we're calling it thin inflation. Exactly. Because Chaco Taco Taco, it wasn't killed by a lack of sales or enthusiasm.

It was killed because Unilever is thinning its portfolio. Rising costs in this economy have added $5 billion. to Unilever. So they have to focus on their most profitable products. A complex folded ice cream with a chocolate filling, a nut topping, and a waffle shell that has to be like orchestrated, like some kind of a sculpture jack. Chaco Taco's complexity makes it not a profit puppy. That thing is costly to make. So Chaco Taco Taco, it's getting thinned out of Unilever's ice cream portfolio. That's a new type of inflation. Instead of raising prices, you just cut the product from the portfolio altogether. Thinflation. Thin out the unprofitable

products. So you can prioritize the profit puppies. Jack, can you whip up the takeaways for us for the new Friday? Puma just announced 26% growth for the past quarter. Everyone else's secondary business could be your primary business. For our second story, the Chips and Science Act. Just past Congress, it's expected to become lawsuit. The U.S. First China is a legs race because everything runs on chips. Our third and final story is the Chaco Taco Taco. It's been discontinued. The inflation killed the Chaco, Taco Taco. Get a job, creamsicle. Now, time for the best fact yet. This one sent in by Austin Johnson from Salem, Oregon. Get ready for all the geography buffs. Your head's about to explode, okay?

Oh, yeah. Jack and I this week, we said Maine is the easternmost state in the U.S., in the continental U.S. We also said Maine is the closest state to Africa. That's true, but the easternmost part, that's up for debate. Yeah, because Alaska is all the way in the northwest. You wouldn't think it's the Easternmost state, no, you would have. Of course not, but you'd be wrong, technically. Because while Alaska is super west, its islands cross over the international date line. The international date line is where a new day begins. Exactly.

It's sort of like the referee. So facto, Alaska is the easternmost and westernmost state at the same time. Hard to fathom. Yes. But Alaska is so far west, it's also technically east. Because it's so far west. Yetis, you look fantastic today. And if you see a buddy, remember, H-Y-H-T-B-O-I.

Have you had the best one yet? That's how we grow the pot. And if you win the lottery tomorrow, by the way, maybe you could buy the chaco-taka. Have a vision in the desert. And before we go, shout out to Yeti Tucker Mossad in Boston, who just launched his very first web app. It's called Financial, the Financial Whartle.

The Whartle of Finance. And congratulations to Gabby Huasso, who just bought her first home down in Atlanta. And happy 31 year anniversary to Paula Golding in Colorado. And a happy chocolate milkshake day to Lizzie Frost, legendary bestie. Happy birthday to Daniel Briscoe, the Louisville Slugger over in Kentucky. And Hunter Ladner, happy birthday down the street in San Francisco. Happy birthday to Ali Wanner in Atlanta, Georgia.

And Nate Taskers turn to 28 over in Denver. Happy birthday to Sam, the discolfer, Surrug, in Great Falls, Montana. And Mani Patel, happy birthday down in Orlando. Many, by the way, has dibs on T-Boy stock if we ever IPO. We know the ticker. It's a Yeti. This is Jack. I own stock of Unilever, and Nick and I both own stock of Robin Hood. Now a word from our sponsor, Robin Hood.

So four years ago, we sold our company and we joined Robin. A lot of people asked, when did we decide that selling was the right move? So it was actually in our meeting with the co-founders, that's what sold us. Vlad and Bejou, also former roommates, also met in college, also. So we're hanging out in New York City's East Village after the financial crisis. And they just figured out how the financial system works. So Vlad and Bejou saw that Wall Street bigwigs, they were getting their fees waived. And they figured out a way to waive commissions for everyone else, too.

So we saw a big bold vision and decided to join these guys. That's where we spent the last three years until now. It makes sense now that Robin Hood would sponsor our newly independent podcast. If you're not investing in Robin Hood yet, you can get started by going to robin hood.com slash T-boy choosing a free stock. That's Robinhood.com slash TBOY. Certain limitations apply for a list of other fees. View the fee schedule at RBNhd.co slash fees. All investments involve risk.

Robin Hood Financial LLC, member SIPC. By the way, Robin Hood is no longer affiliated with us or this podcast. Did you laugh yesterday, last night when you watched your show? Oh, yeah, totally. I've like listened to our pot three times. I know exactly what lines coming. I'm like, save puppy, save puppy. He said puppy.

I love when we used to drive to work together. Oh, that was really fun. We were like high-fiving. Those were fun. People would like see this work. What are you guys doing? We just listen to our show. It's like, but you created it.