The Best One Yet - “Warren Buffett hates oat milk” — Oatly’s beyond playbook. Berkshire’s loss letter. Waste Management’s pure-play trash.

Episode Date: March 2, 2021

Legendary investor Warren Buffett’s legendary Investor Letter shows he lost last year. Oatly’s oat milk is going nationwide in Starbucks before its IPO: It’s the plant-based playbook. And Waste Management’s pure-play trash stock is loving your ecommerce habit’s cardboard box pile.$WM $BRK.A $SBUXGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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, T-Boy Tuesday, March 2nd. Nick, did you see stocks rebounded big yesterday? Jack, are we talking the S&P 500's best day since June? We are, and it's thanks to a Goldilocks situation. Classic Goldie. Investors were excited about the stimulus bill. Yeah, they were. They were excited. But not too worried about inflation. In the meanwhile, Jack and I whipped up the best one yet. Jack, TBOY. What's our first story today? Oatley is going nationwide with oat milk in all year. U.S. Starbucks locations. Here is the thing. You could have seen this coming if you saw the plant-based playbook.

For our second story, legendary investor Warren Buffett just shared his legendary annual shareholder letter. For 56 straight years, this guy's published his stock market score. Jack, score last year, how'd he do? He lost. Yeah, he lost. He lost. Third and final story, Jack.

We found the elusive, rare, pure play trash stock in waste management. Left pocket, right pocket, left dumpster, right dumpster. Snackers, before we hit those three fantastic stories, yesterday we mentioned Domino's Pizza, the best pizza in southeast Michigan, also known as the not best pizza in New York City. Now, a lot of people have a lot of opinions on where you can get the best slice of pizza in New York City. I mean, tip of Manhattan to top of Manhattan, you got Emmy Square, Joe's Big Knicks, the big slices at Big Nix. Down the street from my brother's place in Q Gardens, you got Danys, which has the sweetest sauce. But here's the irony snackers.

The best pizza in New York City is the pizza that can't be bought. How do you kill that which has no life? Which led us to Gabrielle Le Monica, who emigrated from Italy, he's currently living in a nice small apartment up in Harlem. Get this, Gabrielle, turns out three to four Roman-style pizza pies every day from his mini kitchen in Upper Manhattan. He's got the flour shipped in from Italy. He's got the veggies personally picked from the Union Square Farmers Market.

The passion, he doesn't need to import. It's right there. It's the passion of the crust, Jack. Here's the thing, though, you can't buy his pizza. No, you can't. You have to barter for it. Like the ancient Romans, this is how he sells his pizza. The first thing you do is you order from his Instagram account at Unregular Pizza, something the ancient Romans couldn't do. But then there's no cash involved because you got to trade your greatest creation for his greatest creation. That's right. He will not accept cash for his pizza. He will only only Only accept something you created with the same blood, sweat, and tears as he did his little pies. Cashmere scarf or a margarita pie. That's how it goes. Handmade pottery for a Sicilian slice.

Then you meet Gabrieli on the corner of Bower in 4th Street. You bring your goods? He brings his goods. Best pizza in New York City can't be bought. Literally, it can't be bought. I feel like we're missing an opportunity. We give away our three best stories every day to everybody for free. Gabrielli, it's Nick and Jack. Will you take a digestible business news takeaway in exchange for a deep dish pie? What's in our three store? You're tuned in to snacks daily. We spoke to the lawyers and we got to get something legal out the way.

It 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. Right.

Snacks is digestible. Business news for you. Robert Her Financial, LLC, member Finra slash SIPC. For our first story, Jack, are we going with Dumbledora Finance on this? What do we want to say? Yes. Warren Buffett, he's 90. Yeah, he'll do it.

Yeah, he's the Dumbledore Finance. Best shape of his life. Warren Buffett just released his legendary investor letter over the weekend. And it wasn't great. Berkshire Hathaway doesn't understand tech, so it's buying its own stock instead. Yeah, that's the alternative here. Now, we're going to sprinkle a little context on this thing. Berkshire Hathaway, it's in the business.

picking companies, but also in the business and known for two other things. Yes, it has two classes of stock. It has the Class A stock and the class. The Class A stock with ticker symbol BRK. What's the number, Jack? Do you know what it's trading at? It's trading at $37,000 for one share. You want a house? Do you want a Bugatti or do you want one share of the Berkshire Hathaway stock? I used to own a half a share of Berkshire Hathaway, but it was the B shares, which traded $2,000. $250. It still must be pretty nice. Now, that's what one thing they're known for.

The other thing Berkshire is known for is its 90-year-old, famous CEO, Mr. Warren Buffett, the Oracle, Omaha. By the way, Snackers, if you have like an uncle or dad who used to work in finance, he definitely dreamt of owning a Berkshire Class A share. This was like a life goal for pretty much the entire baby boomer generation. Berkshire is also a $600 billion company that's kind of made up of a bunch of other companies. Pretty straightforward.

They buy up stock. entire companies, put in some new managers, typically, cut some costs. This is like the PE private equity playbook. And then all the profits of the companies that Berkshire owns, they flow up into Berkshire Hathaway, and that is the value of the stock. Old school business model, Jack, old school cravings over here. The 90-year-old Warren Buffett, who by the way was born in 1930, Nick, for perspective. Read Great Depression. He seems to favor companies that are also 90 years old. Yeah, Mr. Buffett, can we interest you in a food business? railroad business, a telecom business, or an insurance business. Yes, please, I'll have Coca-Cola,

Kraft Heinz, Geico, and Procter & Gamble. Basically, this is the opposite of SoftBank. This is the anti-South Bank. Yeah, SoftBank's like all of this. They'll like, I'll have the opposite. And on Saturday, Berkshire Hathaway released their annual shareholder letter written by Warren Buffett, Jack. How did the most famous investor in the United States do last year? Well, the first thing he does says he judges himself. And he shows the world whether he was good or bad last year. Jack, I think you're avoiding the question here. How did Berkshire Hathaway and Warren Buffett do last year? He did badly, but everything is relative. And Berkshire Hathaway, they judged themselves depending on how well the S&P 500 did. Well, the S&P 500, the 500 biggest stocks in the United States, it rose a little

over 18% last year. Berkshire Hathaway rose by just 2% last year. So last year was a loss. That means that as an investor, you would have been better off simply putting your money in the S&P 500 index than in giving it to Warren Buffett. Yeah, not a good luck. And Warren was upset. He was ashamed. He was embarrassed. Also, Berkshire Hathaway has over $100 billion in cash to invest. But it hasn't, it's just sitting there. The cash is doing nothing billions. That's right. Last year, Berkshire Hathaway didn't make a single major acquisition like it usually does. So, Jack, what's the takeaway for our buddies over at Berkshire Hathaway? Berkshire invests in what it knows and Berkshire doesn't know tech. All right, this is wild.

Rewind to the same shareholder letter, but all the way back in 1986, Jack, what did we find? Berkshire Hathaway said, we invest in, quote, simple businesses, and if there's a lot of technology, we won't understand it. Yeah, end quote. Now, Berkshire is like dabbled recently in Apple and Amazon and Snowflake stock, but it is overwhelmingly a non-tech focused company. And the issue, our stock markets and our economy right now have become. become incredibly techy. Okay, so Jack and I just mentioned the S&P 500. The whole market was up 18%

last year. Well, the tech heavy NASDAQ, doubled that return. The only major investments Berkshire made in the last quarter were Chevron and Verizon, two companies that aren't techy at all. And since Warren Buffett isn't comfy investing in like frothy tech companies, there is only one thing he will invest in right now. Himself. Himself. Prior to 2018, Berkshire Hathaway, like never bought its own stock. It wasn't a thing. They didn't do it. But last year, Berkshire Hathaway spent $25 billion on their own stock, which made the other stock that you and I can invest in even more valuable. Warren Buffett invests in what he knows, which right now is pretty much himself, just himself. For our second story, Jack, cashew or almond? Um, almond. It's actually a trick

question, Jack. Second story here, Starbucks is bringing an oatly oat milk nationwide today. What is what's going on over here? You probably could have predicted this news if you knew the playbook that he was following. Okay, first of all, dairy milk. Pretty simple formula. You got cow plus milking pasteurization, right, Jack? Yeah, I learned that in kindergarten.

Oat Milk, you actually just take oats and milk. Sorry, you take oats and water and you put it in a blender. And out comes milk. I feel like you could do the oats and milk thing and just kind of quickly get from A to C. Yeah. But, Nick, don't try to make it yourself because it's not going to be extra smooth. Jack sent me some photos, and it is a hard process. This is a lot harder than it looks. Despite all that, oat milk is having a moment. In the U.S., sales nearly tripled for oat milk last year as people search

for dairy alternatives. Yeah, and honestly, Sweden's Oatley has been due in dairy alternatives since before, like, cauliflower pizza crust was the thing. Oatley was founded in Sweden by the Oatsie Brothers in 1994. Real name. Started with oat milk. Now they do ice cream and yogurt too. Yeah, they do. And last month, they made a lot of headlines because the Oatley Super Bowl ad. They splurged on a Super Bowl app. You saw the ad? A hundred million people heard about Oakley. And last week, they reportedly filed to IPO at a valuation of $10 billion. And if this IPO at $10 billion is successful, we're talking about an Oat Liquid company that would be worth half a lift. Now, there's some celebrities already in Oatley that bought stock, including Oprah and Jay-Z. Yeah, oh, and also Howard

Schultz, the founder of Starbucks, Jack. Which leads us nicely to this week's headline. Yes, it does. Starbucks has already been testing Oatley as an option for a creamer with your coffee at 8% of U.S. locations. But today, they're going nationwide in a particularly important way for a. They're not just going nationwide. They're getting the premier seasonal beverage at Starbucks.

So you got cold brew summer, you got PSL fall, you got eggnog latte winter, Jack, process of elimination. In the spring. You're going to get iced brown sugar. Oatly oat milk, shake an espresso, with Oatley in the name. It's a long order. It's a long order. That's why for Oatley, this deal is one part sales driver, because they're going to get sales

at thousands of locations. But it's also importantly, one part marketing deal. And that's the key. Oatley's brand is actually going to be on the menus. This is also for Oatley, one part you could have seen this coming. You maybe even could have predicted this move. Which leads to our takeaway, Jack. What's the takeaway for our buddies over at Oatley?

Similar companies follow similar playbooks. Okay, so Oatley and Beyond Meat. One is leading the plant-based beverage industry. One is leading the plant-based food industry. But it looks like Oatley is following Beyond Mead's plant-based marketing playbook. All right, Jack and I jumped in snack style, Beyond and Oatley. Both started in grocery stores with one product.

Beyond beef and oat milk. And then both expanded to new products. Beyond sausage and oat yogurt and oat ice cream. And then Beyond, Beyond, went on. a partnership tear in the last two years, signing up with Dunkin' Donuts, Tim Hordons, and finally McDonald's last week. Lo and behold, this week we see Oatley's major partnership with Starbucks. But then last year, Beyond created cheaper value packs to go from like their early adopters

to the mass market. Oatley hasn't done that yet, but it may be the next step on the plant-based marketing playbook. All right, so Jack and I are thinking you're going to see Oatley yogurt and OatMil combo packs for 25 percent off, aisle six. Because this stuff's expensive right now, and to get mass market, you've got to come down in price. We may be able to predict Oatley's moves by looking at Beyond's playbook. For our third and final story, waste management, a pure play trash stock just reported earnings last week. Turns out trash during the pandemic, it moved from a Chili's dumpster to the bin in your garage. They made a trash,

different dumpster situation. We're talking about Houston's finest. Yes, we are, Jack. The last time we covered waste management was in April 2019. Jack, I remember it well. They just acquired advanced disposal, merger of the number one and the number four solid waste companies in the United States. It was basically the royal wedding of trash. Yeah, and the highlight back then basically were the numbers. The combined company had 25 million trash customers, 50,000 employees, and I'm no expert, but 310 landfills sounds like a lot of landfills. It does sound like a lot of landfills, Jack. That's a big ratio. The number one theme, though, of the trash industry is extremely predictable trash demand. All right, here's how the math breaks down. The amount of trash created is pretty much a constant

function of the number of people on planet Earth. So as long as the number of people grows, it's pretty safe, the trash business. But a couple of trends right now are not good for the U.S. waste industry. First, birth rate in the United States is at a historic low. Fewer diapers getting trashed, less future business. Second, awareness of climate change is at a historic high. People are recycling more. That means less for the trash biz to take care of. Your buddy's also composting, which he loves to tell you about always, which is even less trash for waste management. I love to tell you about it. Now, this is not good for waste management, which collects and sorts and dumps trash in just about all of the 50 states. Despite those struggles, though, waste management has managed to boost revenue slightly the past few years by about 4% each. And to accelerate waste management's trying to convert methane from landfills into electricity, but they haven't totally.

totally figured it out yet, Jack. They're trying to pivot. But last week, waste management told us how their trash business is doing during the pandemic. Yeah, because another important driver of trash is just straight up economic activity. Yeah, and economic activity straight up shrank last year in the U.S. by 3.5%. Less economic things led to less trash and waste management's overall revenue declined by 1.5%. Jack, what's the takeaway for our buddies over at waste management? Trying to figure out what a company actually does, look at its segments. Snackers, we told you waste management does trash collection, does trash sorting, and does trash dumping. For the snackers who want a little more nuanced than that, you can look at the company's publicly published segment results.

Okay, so you scroll down, you're going to see the segment results or, as are also known, operating results, which are just the total revenues broken down into the actual business lines of what it actually does. For waste management, we saw that the key segments were commercial, residential, and industrial. It makes sense. You switched from chicken wings of chilies to the takeout wings. The number of wings consumed was the same, just a different bin. That's why commercial trash collection dropped by 3% because restaurants weren't open, but residential trash jumped by 4% because you're eating at home. To understand what a company actually does, you'll look at the segment results. Jack, and you'll whip up the takeaways for us. over there. Warren Buffett's Berkshire House

the way did less last year than normal. Yeah, when everything on the menu is techie, Berkshire prefers investing in itself, just does its own thing. For our second story, we may soon have a pure play oat milk stock. Thanks to following the Beyond Meat, plant-based playbook. It's all about the playbooks. For our third and final

story, waste management business is a function of people, climate change, and economics. You look at the segments, aka the operating results. By the way, every company, every publicly traded company has these. Time for our snack factor the day. This one tweeted in by Ben Harrison from lovely snowy, Rochester, New York. We told you last week that Jay Z's Champagne company had been acquired by LVMH. We also pointed out that,

you know, Jack and I noticed their most expensive bottle, it's going to cost you $65,000. That's what it's going to cost you. Sixty-five thousand is nothing compared to the number of bubbles in a flute of champagne. Great point. Turns out there are a million bubbles in a single flute of champagne. And it turns out, turns out that 80% of the carbon diet, dioxide bubbles, they explode when you pop the cork. That's why you can like create a dent in the ceiling with that then. Snackers, you looked fantastic to start the week. Happy T-Boy Tuesday, tell your friends, H-Y-H-Y-S-D. Have you had your snacks daily? And we'll see you tomorrow. That's how we grow. If you know, you know. And before we go, we're wishing our best to snacker Ashley in Charlotte,

North Carolina. She tore ACL skiing. Her first PT session is today, Jack. Ashley will be back on skis in no time. You will. You will. And happy birthday. birthday to Chuck's Amika over in Lagos, Nigeria, and Nikiel in Jammu, India, and Ryan Beckwith in St. Paul, Minnesota, and Erdicee in Haddon Heights, New Jersey, and Caroline Oglander in Naples, Florida, and Aguna Isacola in Marietta, Georgia, and Skyler Louise down the street in San Francisco, and Gabby Pensari in Sandy, Utah, and Jose Mania, down unknown. Congrats to Sebastian and Oriana for having a new baby in D.C. And CJ and Haley got the anniversary over in Rockwall, Texas.

to Virginia Miles for getting a new house Michigan. And congrats to James Zeph, who left the Lower East Side for Austin, but just returned back to New York City from Austin. Ryan and Matt Aline, congrats on getting engaged in Los Angeles. And Ryan Safer and Murray Hill starting a new job in tech sales. This is a great one. Riley Quigley had his best sales month ever as a former Arle of Garden waiter. I respect it. It's impressive.

And Henry Myers and Virginia Myers, congrats on both moving this week. Happy belated birthday to Marco Gera and Sarah. Tocke, California. And happy first birthday to Isabella Singh in New York City. And to anyone else who is celebrating something today, make it tea boy. Always celebrate the wins. This is Jack. Nick and I both own stock of Beyond Meat. Nick own stock of Apple. I own stock of Amazon. 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.