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In this episode of the Telltales Podcast, hosts Mike Nicoletti, Jason Wallace, and Hunt Lawrence, aka Mr. Cashflow, delve into the crucial role of cashflow in investing, particularly focusing on the oil supply and demand dynamics, the energy sector, and the implications of geopolitical events on market risk. They also discuss U.S. government finances, investment strategies, and the tech landscape, including the competitive developments between OpenAI and Google, Apple's potential moves in AI, and the evolving digital payment ecosystem. Corporate finance strategies, market predictions, and the increasing influence of high-speed internet options like Starlink are also covered. The conversation wraps up with speculation on the future of mobile communication and the role of screens, signaling a shift towards more audio-based and AI-enhanced interfaces. This comprehensive discussion provides insights into current economic indicators, investment considerations, technological advancements, and the ongoing transformations in the business landscape.
00:59 Exhibit C: WORLD OIL SUPPLY / DEMAND
04:11 Exhibit B: US GAS DEMAND / SUPPLY
05:07 Exhibit A: US GOV’T REVENUES AND EXPENSES
05:38 Page 1: Open AI & Google competing for Apple business?
11:46 Is Meta a contender for the Apple deal?
13:22 Page 5: Comcast to offer streaming bundle
14:58 Page 4: Comcast v. Disney Streaming Bundles
15:54 Page 3: Intel Debt Stacking Up
17:25 Page 3: TSMC April Sales Report
19:01 Page 7: MA / V / PYPL
22:39 Page 16: MCD / SBUX / CMG / CELH / HLT
27:00 Page 1: Elon Musk & Tesla News
32:44 Page 1: Are screens going the way of the dodo?
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Welcome to the "Telltales Podcast," where we delve into the intricacies of cashflow and its critical role in driving the economy and investment performance. Join hosts Mike Nicoletti, Jason Wallace, and our co-host Hunt Lawrence, as we explore various facets of financial insights and market dynamics. Below, find detailed summaries of the main topics discussed in each chapter of this episode:
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[00:00:00] Introduction
[00:00:51] Exhibit C: World Oil Supply/Demand
Analysis of the current oil market with a focus on surplus capacity and demand growth.
Impact of geopolitical risks on oil prices, including situations in Gaza, Ukraine, and the Middle East.
Recommendations for oil investors based on the expected changes in the risk premium.
[00:02:59] Exhibit B: US Gas Demand/Supply
Examination of the U.S. gas market, highlighting the discrepancies between supply and demand.
Discussion on the price necessary to overcome the decline curve and add significant supply.
Advice for gas company investors in light of current market conditions.
[00:05:21] Exhibit A: US Government Revenues and Expenses
Predictions on U.S. tax changes depending on the upcoming presidential election outcomes.
Strategies for investors to cope with potential tax increases by investing in long-term holdings.
[00:07:57] The Impact of Political Events on Investments
Reflections on the presidential election's influence on market stability and investment strategies.
Commentary on how U.S. governance might be perceived post-election.
[00:08:52] Tesla and Artificial Intelligence
Discussion on Tesla's role in advancing artificial intelligence and its implications for investors.
Analysis of Tesla's data utilization from vehicle operations and its potential market impact.
[00:16:36] Free Cash Flow Analysis Across Big Tech Companies
Comparative analysis of free cash flow among leading tech giants like Apple, Amazon, Alphabet, Microsoft, and Tesla.
Future projections for Tesla's financial growth and its comparison with other major companies.
[00:22:34] Apple’s AI Challenge
The hosts discuss whether or not Apple is behind on AI
[00:28:25] Closing Remarks
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Thank you for tuning into the "Telltale Podcast." For more insights and detailed analyses, subscribe to our channel and join our email list at telltales.us
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Saknas det avsnitt?
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This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
SHOWNOTES
Welcome to another episode of Telltales. Join our hosts, Hunt Lawrence, Jason Wallace, and Mike Nicoletti, as they discuss cashflow and its pivotal role in investing. Here’s a breakdown of what we covered in this episode:
[00:00:34] Meet Mike & Jason in Omaha at the Berkshire Hathaway Annual Meeting
Discussion on the upcoming Berkshire Hathaway Annual Meeting in Omaha.
Networking opportunities at the event.
[00:01:40] Exhibit C: WORLD OIL SUPPLY / DEMAND
Analysis of the global oil supply with a focus on surplus capacity held off by Saudi Arabia and the UAE.
Impact of reduced Russian oil production due to ongoing conflicts.
Implications on oil prices if withheld supplies were released.
[00:02:24] Exhibit B: US GAS DEMAND / SUPPLY
Examination of U.S. natural gas supply and demand.
Discussion on production curtailment by major producers in the Marcellus Shale.
Insights into the natural gas market dynamics and pricing.
[00:03:49] Exhibit A: US GOV’T REVENUES AND EXPENSES
Overview of U.S. government revenues and expenses.
Discussion on the recent foreign aid package and its impact on the federal budget.
Concerns about the lack of financial offsets in government spending.
[00:04:34] Exhibit A: Taxes
Debate on the feasibility and constitutionality of a proposed wealth tax.
Potential implications of tax changes on investment and economic growth.
[00:05:51] Exhibit A: Federal Funds Rate Held Steady
Commentary on the Federal Reserve's decision to maintain the federal funds rate.
Discussion on real interest rates and their impact on the economy and investments.
[00:11:07] Page 1: AAPL / AMZN / GOOG / MSFT / TSLA
Earnings updates and significant news from major tech companies like Amazon, Alphabet, Microsoft, and Tesla.
Strategic movements within these companies and their market implications.
[00:11:20] Page 1: TSLA 0.00%↑ - Tesla's China Strategy
Discussion on Tesla's data management strategy in China.
Comparison with TikTok's data handling and implications for user privacy and corporate strategy.
[00:13:31] Page 1: TSLA 0.00%↑ , AAPL 0.00%↑ - Consumer Preferences in China
Analysis of consumer behavior in China, particularly regarding domestic vs. foreign brands.
Impact on companies like Tesla and Apple.
[00:14:49] Page 1: TSLA 0.00%↑ Reduces Supercharger Station Growth and Cuts Staff
Tesla's strategic decision to reduce growth in supercharger stations.
Discussion on the economic and strategic factors leading to this decision.
[00:20:23] Page 1: Is Google falling behind OpenAI?
Exploration of Google's position in AI development compared to OpenAI.
Discussion on strategic decisions in technology and AI by major corporations.
[00:21:54] Page 1: GOOG 0.00%↑ - Will Android Steal Marketshare from Apple?
Predictions and analysis on the potential market shifts between Android and Apple devices.
Impact of AI features on consumer preferences and market dynamics.
[00:24:09] Page 1: AAPL 0.00%↑ - When is WWDC?
Announcement of the upcoming Apple Worldwide Developers Conference and expectations.
[00:24:26] Page 1: AMZN 0.00%↑ GOOG 0.00%↑ MSFT 0.00%↑ Cloud Growth on backs of NVDA 0.00%↑
Discussion on the growth of cloud services at Amazon, Google, and Microsoft, facilitated by NVIDIA technology.
Insights into the financial and strategic impacts of these developments.
[00:27:22] Page 3: NVDA/AMD/INTC/TSMC/ASML
Detailed analysis of NVIDIA's financial performance and market position.
Comparison with other major tech firms like AMD, Intel, TSMC, and ASML.
[00:31:19] Page 15: PFE 0.00%↑ turning things around?
Examination of Pfizer's recent financial performance and strategic directions.
Discussion on the broader pharmaceutical industry and market trends.
Thank you for tuning into "Telltales"! Don’t forget to subscribe!
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
SHOWNOTES
00:01:05 Exhibit C: WORLD OIL SUPPLY / DEMAND: Discussion on recent geopolitical events affecting oil prices and their impact on global oil supply and demand.
00:04:03 Exhibit B: US GAS DEMAND / SUPPLY: Analysis of the U.S. natural gas market, including production rates and future demand projections.
00:07:16 Exhibit A: US GOV’T REVENUES AND EXPENSES: Discussion on U.S. government spending, revenue trends, and fiscal policies.
00:08:33 Page 1: TSLA - Earnings Review & FSD 12: Overview of Tesla's earnings, Full Self-Driving technology, and market implications.
00:15:49 Page 1: TSLA - Tesla Full Self Driving Revenue Model: Discussion on Tesla's Full Self-Driving revenue model and pricing strategies.
00:17:12 Page 1: TSLA - Tesla Datacenter: Insights into Tesla's data center strategy and its potential impacts on business efficiency.
00:18:43 Page 1: Will Tesla license FSD to other auto manufacturers?: Discussion on the potential for Tesla to license its Full Self-Driving technology to other manufacturers.
00:20:45 Page 1: Tesla FSD Gross Margin: Analysis of the financial implications of Tesla's Full Self-Driving technology on its business model.
00:22:50 Page 15: Vertex's Promising Pipeline ($VRTX): Discussion on Vertex Pharmaceutical's pipeline and strategic initiatives.
00:26:52 TSLA 0.00%↑ vs VRTX 0.00%↑ - who could double first?: Comparative analysis of Tesla and Vertex Pharmaceutical's market potential and growth prospects.
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Shownotes
This episode of Telltales covers several key topics related to investing, energy markets, and the pharmaceutical industry. Here's a summary of the main discussions with timestamps for the chapters:
[00:00:54] Exhibit C: WORLD OIL SUPPLY / DEMAND
The hosts discuss the ongoing conflict between Israel and Hamas in Gaza, and how the withdrawal of Israeli troops could impact oil prices. Hunt mentions that with Russian oil production down by at least 1 million barrels per day due to the Ukraine conflict, and OPEC countries like Saudi Arabia and UAE holding back supply, the oil market remains vulnerable to supply shocks, keeping prices elevated in the mid-$80s range.
[00:03:45] Exhibit B: US GAS DEMAND / SUPPLY
The conversation shifts to the natural gas market, where prices have been holding up well. Hunt highlights the potential for increased power demand from data centers, especially those with GPUs, which could drive natural gas consumption higher, supporting prices. He also notes the supply discipline from major producers like EQT, which has curtailed production to balance the market.
[00:05:38] Exhibit A: US GOV'T REVENUES AND EXPENSES
The hosts analyze the macroeconomic environment, discussing the impact of higher inflation, continued government deficit spending, and the Federal Reserve's stance on interest rates. Hunt raises concerns about the potential effect of higher interest rates on stock market valuations, as was observed in 2022 when valuations of high-growth companies declined significantly. [1]
[00:08:15] Page 1: Higher For Longer impact on Tesla
The discussion turns to Tesla, with the hosts debating the company's valuation in the context of higher interest rates.
[00:16:27] Page 13: JPM/MS/GS
Hunt analyzes the financial performance and valuations of major banks like JPMorgan, Morgan Stanley, and Goldman Sachs. He highlights their ability to generate consistent free cash flow, buy back shares, and pay dividends, which has resulted in attractive returns for long term holders of the stocks.
[00:22:44] Page 15: PFE / MRNA / LNTH / BNTX / VRTX
The hosts discuss the challenges faced by large pharmaceutical companies like Pfizer in replacing revenue from expiring patents and developing new blockbuster drugs. They also compare the prospects of Moderna and BioNTech, the companies behind the COVID-19 mRNA vaccines, and their efforts to develop personalized cancer vaccines and other therapies. Jason and Mike share their perspectives on which company might be better positioned for success in this area.
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
00:00:39 Exhibit C: WORLD OIL SUPPLY / DEMAND 00:03:08 Exhibit B: US GAS DEMAND / SUPPLY 00:05:25 Exhibit A: US GOVT REVENUES AND EXPENSES 00:06:43 China Risk Discussion 00:07:33 Page 20: UBER / DASH / ABNB / FIVE / ETSY 00:08:24 Page 19: UNH / CVS / REGN / BIIB / LLY 00:09:12 Page 18: FCX / ALB / CF / NEE 00:10:26 Page 17: FDX / UPS / NKE / COST 00:11:23 Page 16: MCD / SBUX / CMG / CELH / HLT 00:12:36 Page 15: PFE / MRNA / LNTH / BNTX / VRTX 00:13:30 Page 14: CAT / DE / GNRC / TDG / FAST 00:15:07 Page 13: JPM / MS / GS 00:15:41 Page 12: AR / EQT / CHK / AM 00:16:13 Page 11: EOG / MGY / PR / FANG 00:16:38 Page 10: KMI / EPD / ET / WES 00:16:44 Page 9: XOM / CVX / COP / OXY / LNG 00:17:37 Page 8: WMT / TGT / LOW / HD / KMX 00:18:28 Page 7: MA / V / PYPL 00:18:51 Page 6: T / VZ / TMUS 00:19:16 Page 5: CHTR / CMCSA 00:19:23 Page 4: NFLX / DIS / META 00:20:49 Page 3: NVDA / AMD / INTC / TSMC / ASML 00:24:40 Page 2: MSFT / CRM / SNOW / ORCL 00:24:59 Page 1: AAPL / AMZN / GOOG / MSFT / TSLA 00:29:33 Page 1: Discussion on whether Tesla could trade down to $100/share valuation. $UBER $DASH $ABNB $FIVE $ETSY $UNH $CVS $REGN $BIIB $LLY $FCX $ALB $CF $NEE $FDX $UPS $NKE $COST $MCD $SBUX $CMG $CELH $HLT $PFE $MRNA $LNTH $BNTX $VRTX $CAT $DE $GNRC $TDG $FAST $JPM $MS $GS $AR $EQT $CHK $AM $EOG $MGY $PR $FANG $KMI $EPD $ET $WES $XOM $CVX $COP $OXY $LNG $WMT $TGT $LOW $HD $KMX $MA $V $PYPL $T $VZ $TMUS $CHTR $CMCSA $NFLX $DIS $META $NVDA $AMD $INTC $TSMC $ASML $MSFT $CRM $SNOW $ORCL $AAPL $AMZN $GOOG $TSLA
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
The episode covers a range of topics around geopolitics, macroeconomics, antitrust regulation of big tech companies, the energy sector, and the healthcare industry. Significant time is spent analyzing the Microsoft antitrust case, potential partnership between Apple and Google on AI, China's push for domestic chip production, and a DoJ investigation into UnitedHealthcare.
[00:00:38] Exhibit C: World Oil Supply/Demand
- Ukraine drones damaging Russian refineries, reducing Russian oil production
- Potential for Saudi Arabia to increase production by 3 million barrels per day
- Threat from Houthis in Yemen to attack Saudi/UAE oil facilities
[00:02:35] Exhibit B: US Gas Demand/Supply
- Lower US gas production forecasts for 2024
- Impact of new pipeline opening in August on Waha gas prices
- Increasing power demand from LNG exports and data centers
- Climate activists opposing fossil fuels and carbon capture
[00:05:13] Exhibit A: US Government Revenues and Expenses
- House Republicans passing spending bills, curtailing spending
- Hopes for reduced deficit of $1.4 trillion in 2024/2025
[00:06:18] Views on Data Center Power Demand
- Potential for higher than forecast power demand from data centers
- Debate on whether power should come from natural gas or nuclear
[00:09:57] Page 1: Microsoft's DoJ Antitrust Settlement and Lost Decade
- Discussing Microsoft's 2001 antitrust settlement with DoJ[1]
- Oversight into Microsoft's software development slowed innovation
- Impact on company's stock performance from 2001-2011
[00:16:28] If Apple partners with Google on AI
- Apple's alternatives if they want to use a large language model
- Preference for running AI models locally vs in the cloud
[00:20:38] Impact of China's move away from Intel/AMD CPUs
- Implications for chip companies as China favors domestic sources
[00:22:35] Is the EU better at policing big tech?
- Comparing EU's antitrust approach vs US DoJ/FTC for big tech
[00:26:35] Page 19: UNH/CVS/REGN/BIIB/LLY
- DoJ investigation into UnitedHealthcare's practices with Optum
- UnitedHealthcare hack impacting healthcare providers
- Comparing UnitedHealthcare's performance to CVS Health
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Shownotes [00:00:00] Introduction [00:01:02] Exhibit C: World Oil Supply/Demand Discussion of rising oil prices due to drone attacks on Russian refineries and potential threats from Houthi rebels in Yemen Analysis of global oil supply numbers for 2023, highlighting oversupply situation if Saudi Arabia increases production Potential for downside in oil prices if Saudi Arabia raises output to 11 million barrels per day [00:03:29] Exhibit B: US Gas Demand/Supply Analysis of US natural gas production running at 102-104 bcf/d currently vs forecast of 104 bcf/d for 2024 Factors like shut-ins impacting production Increasing power demand for natural gas, driven by intermittent wind/solar sources Forecast showing tight supply/demand balance in 2025 [00:06:19] Exhibit A: US Government Revenues and Expenses Discussion of proposed Biden administration budget with higher spending Analysis of deficit trends, with hopes of stabilizing around $1.4 trillion and gradual reduction Factors like curtailed spending, defense budget, and interest payments impacting deficit [00:10:07] Apple + Google AI Deal? Speculation on Apple using Google's Gemini language model for Siri assistant Potential licensing deal between Apple and Google for Gemini Monetization challenges for AI models like Gemini [00:13:44] Microsoft Acquihires Inflection AI Analysis of Microsoft's acquisition of Inflection AI, founded by former DeepMind employee Potential reasons like access to talent, hardware, and reducing reliance on OpenAI [00:16:40] Google Gemini's Impressive Context Window Discussion of Gemini's ability to process up to 1 million tokens (words) for context Advantages of larger context windows for summarization tasks [00:19:19] Nvidia's New AI Hardware Announcements Details on Nvidia's new GPU chips with 2.5x faster performance and optimizations for large language models Importance of Nvidia's NVLink networking technology for connecting multiple GPUs [00:21:57] Lantheus Update Brief update on Lantheus, a radiopharmaceutical company Acquisition of another radiopharmaceutical company in the industry Positive outlook on Lantheus' prostate cancer diagnostic Pylerify and future therapeutics [00:25:44] Vertex Update Update on Vertex Pharmaceuticals and their non-opioid pain medication pipeline Increasing state laws requiring opioid consultation before prescribing Vertex's strong cash flows from cystic fibrosis treatments [00:27:04] Biontech Earnings Discussion of BioNTech's disappointing COVID-19 vaccine sales Analysis of BioNTech's pipeline, including mRNA cancer vaccines and acquired antibody treatments Concerns about BioNTech's strategy for reinvesting cash flows
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
00:00 Introduction This week’s episode draws fascinating parallels between investing in the energy and biotech sectors. 00:02:25 Exhibit C: WORLD OIL SUPPLY / DEMAND If you look at supply of oil, there's clearly 3-4 million barrels a day too much supply capacity, mostly with Saudi Arabia, to meet demand. The question is, what price of oil would cause supply to come down so that it was within demand? The answer is quite a lot lower. If Saudi Arabia decided to produce the additional 3 million barrels, oil prices could drop at least 20% to below $60 per barrel. 00:05:31 Exhibit B: US GAS DEMAND / SUPPLY Moving to exhibit B on gas pricing, production has flattened out in the 102-103 range. The storage change, the difference between demand and supply, was impossibly high at 23. The total surplus was 3 billion a day over 365 days, which is a trillion a year. The total amount of gas storage is only 3.8 trillion. Later this year, there will likely be forced well shut-ins, especially in the Marcellus region. You could see some impossibly low gas prices, which will make headlines, with gas prices received in the Marcellus potentially under $1. 00:07:14 Exhibit A: US GOV'T REVENUES AND EXPENSES The Biden administration has come out with their budget, which is a political document. We cannot run a $1.5 trillion deficit indefinitely. The interest bill is now more than what we spend for defense, which is not sustainable. However, this is an election year, and the Biden administration has added $500 billion more spending than last year. Congress will never go along with it all, but it shows how irresponsible elected politicians can be when facing an election. 00:08:16 Energy Company Analysis Given the potential for a downdraft in oil prices and the storage build-up leading to potential involuntary shut-ins or very low prices, the hosts quickly cover the energy companies. The gas companies on page 12 (Antero, EQT, Chesapeake) are all behaving well, able to keep production flat or inclined a bit while spending about half their EBITDA. The oil companies on page 11 (EOG, Magnolia, Permian, Diamond Back) are doing fine at $75 oil, showing the same pattern of keeping production flat or inclined while spending about half their EBITDA on CapEx. The midstream companies on page 10 (Kinder Morgan, Enterprise, Energy Transfer, Western Midstream) won't be too affected by commodity price swings, as they have pretty predictable cash flows, but their debt levels are fairly high. The integrated companies on page 9 (Exxon, Chevron, Conoco, Occidental, Cheniere) are really good companies that can hold production flat and generate significant free cash flow, trading around 10x free cash flow. 00:10:49 Page 15: PFE / MRNA / LNTH / BNTX / VRTX Shifting to healthcare, the hosts' two favorite names are Lantheus and Vertex Pharmaceutical. BioNTech is a sentimental favorite due to the virtuous Turkish couple that founded it. Both BioNTech and Moderna piled up a lot of cash from their COVID vaccines, but they don't have ongoing cash flows to fund their R&D like Vertex and Lantheus do. The hosts have more confidence in companies financing research out of free cash flow. 00:12:22 Comparing Biotech and Energy Investing There are surprising similarities between biotech and energy investing. A blockbuster drug platform is akin to having a large oil or gas reserve that can be tapped for years. But getting there requires early success and skillful capital allocation, just like in energy. Vertex has done an amazing job out-innovating itself in treating cystic fibrosis, similar to an energy company replacing reserves. Their "drug platform" treating this disease is a huge reserve they can tap for years to come. 00:18:16 Vertex's Advantages Over Moderna and BioNTech While Moderna and BioNTech had tremendous COVID-related cash flows, that has largely dried up, whereas Vertex is able to fund R&D from ongoing free cash flow. Vertex spends $3.1B on R&D compared to Moderna's $4B, but Moderna will likely burn through cash quickly unless they have a new hit drug soon. BioNTech is a bit more cash-efficient with partnerships on pipeline products. 00:27:28 Sponsor Break: Oakcliff Sailing 00:28:31 Challenges of In Vivo vs Ex Vivo Gene Editing The hosts discuss the challenges and timelines of in vivo gene editing (directly in the body) vs ex vivo (outside the body). With in vivo, you can't test for off-target edits that could potentially cause cancers or other side effects. So the clinical trials will need to be very long to observe cancer rates over time. Most companies working on this are still in early stage trials. So in vivo gene editing treatments have a low probability of reaching the market in the next 3-5 years due to the complicated trial design and potential for concerning side effects. Ex vivo approaches are further along.
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
[00:00:00] Intro
Mike set the stage for an episode packed with energy, tech, biotech analysis and a special guest from the OakCliff Sailing Center.
[00:01:14] Exhibit C: World Oil Supply/Demand
Hunt discussed Saudi Arabia's potential to unleash 3 million barrels per day of held-back oil production to flex on cheating OPEC nations. A simple move with profound market implications.
[00:01:58] Exhibit B: US Gas Demand/Supply
Warm weather had depressed natural gas prices lately. But the team saw prices firming if production is curtailed.
[00:03:06] Exhibit A: US Gov't Revenues and Expenses
Progress inched forward on the U.S. budget process. The government machine lurched onward.
[00:03:38] Page 1: AAPL/AMZN/GOOG/MSFT/TSLA
Dissecting tech titan free cash flows revealed insights: Amazon's logistics build-out, Google's bloated hiring, Tesla's software potential. Following the money trail leads to understanding.
[00:13:23] Oakcliff Sailing Update
Dawn Riley inspired with tales of Oakcliff alumni sailing victories worldwide. The lure of the open water summons all.
[00:14:57] Investing in Healthcare & Biotech
Mike and Jason outlined their approach to biotech at Top Mark Capital: growing free cash flows, moats, innovating in stagnant sectors, funding R&D internally. A straightforward but potent strategy for asymmetric returns.
[00:16:43] Page 15: PFE/MRNA/LNTH/BNTX/VRTX
Vertex exemplified the ideal - spending half its cash flow on R&D for a new non-opioid pain drug, its cystic fibrosis franchise providing a strong moat.
[00:21:02] Page 19: UNH/CVS/REGN/BIIB/LLY
Larger biotechs like Lilly were assessed, but smaller innovators offered more potential upside per the team's criteria. Risk and opportunity in equilibrium.
[00:23:10] What is RNA?
Jason eloquently explained RNA technology's role in COVID vaccines and vast future cancer treatment potential. Knowledge is indispensable.
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
[00:00:00] Intro
[00:01:44] World Oil Supply and Demand:
Hunt provides an update on the oil market, cautioning about the potential impact of increased production from Saudi Arabia and the UAE.
[00:02:12] U.S. Gas Demand and Supply:
Discussion on the natural gas oversupply and the potential for wells in the Marcellus to be shut in due to low gas prices.
[00:03:52] U.S. Government Revenues and Expenses:
The hosts explore the financial challenges facing the U.S. government, including the risk of a shutdown and the need for a budget resolution.
[00:04:24] AI Market Update:
A deep dive into the market for general AI and large language models, with a focus on the role of hyperscalers and the sustainability of the AI market's growth.
[00:06:14] Klarna Replaces 700 Staff with AI & Saves $40 Million/Year:
Jason shares the news of Klarna's use of OpenAI's virtual assistants to replace customer service representatives, saving the company $40 million annually.
[00:09:18] Meta's GPU Monetization Strategy:
The hosts examine how Meta (Facebook) is using AI algorithms for ad tracking to maintain ad revenue in the face of Apple's privacy changes.
[00:12:41] The Gemini Blunder:
A critical look at Google's rebranding of its AI model to Gemini, the model's biases, and the impact on user trust and Google's reputation.
[00:21:08] AI in Healthcare: Lilly Doubles IT Budget on Internal AI Demand:
Discussion on the pharmaceutical industry's investment in AI, with Lilly doubling its IT budget to meet the demand for AI tools.
[00:27:31] The Importance of AI for Talent Retention:
The hosts conclude with the idea that businesses may need to invest in AI and provide access to dedicated servers with GPUs to attract and retain top talent.
[00:33:21] Disclaimer:
The episode wraps up with a disclaimer, reminding listeners that the podcast is for informational purposes only and not to be taken as investment advice.
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Join Hunt Lawrence, Jason Wallace, and Mike Nicoletti as they delve into the latest trends in the energy sector, government fiscal policies, and a special focus on Nvidia's remarkable earnings. This episode also explores the competitive dynamics within the AI chip industry, highlighted by the emergence of startups like Groq.Show Notes & Timestamps:
[00:00:00] Intro/Outro: Introduction to Telltales, an investing podcast that covers geopolitics, macroeconomics, energy, and technology. Reminder of the informational purpose of the podcast.
[00:00:38] World Oil Supply/Demand: Discussion on the current state of oil demand, particularly in China, and the role of Saudi Arabia and Abu Dhabi in managing oil supply.
[00:01:02] US Gas Demand/Supply: Examination of the natural gas market, highlighting the supply problem and its impact on prices.
[00:02:18] US Government Revenues and Expenses: Insights into the political landscape affecting government spending and the implications for the energy sector.
[00:03:24] Energy Earnings Roundup: Analysis of earnings from various energy companies, including gas and oil producers.
[00:05:32] Oil Companies - EOG/MGY/PR/FANG: Overview of the performance and strategic moves of key oil companies.
[00:09:11] Midstream Companies - KMI/EPD/ET/WES: Evaluation of midstream companies, their valuation, and debt challenges.
[00:09:57] Major Oil and Gas Players - XOM/CVX/COP/OXY/LNG: Discussion on the prospects and performance of major oil and gas companies.
[00:11:47] Nvidia Earnings: Deep dive into Nvidia's earnings, its valuation surpassing Amazon and Alphabet, and the sales growth driving its market capitalization.
[00:14:19] Competitive Landscape of AI Chips: Exploration of the AI chip market, focusing on startups like Groq challenging Nvidia's dominance.
[00:29:54] Closing Remarks: Recap of the episode's key points and a reminder of the informational purpose of the podcast.#InvestingPodcast #EnergyMarkets #OilSupplyDemand #NaturalGas #GovernmentSpending #EnergyEarnings #MidstreamCompanies #OilGasIndustry #NvidiaEarnings #TechInvestments #MarketTrends2024 #ValueInvesting #StockMarketInsights #OilAndGasMarket #TechGiantsValuation #AIInnovation #FinancialAnalysis #InvestmentStrategies #EconomicOutlook #CorporateEarnings
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
In the latest episode of Telltales, the investing podcast hosted by Hunt Lawrence, Jason Wallace, and Mike Nicoletti, a rich array of topics were explored with their usual blend of insight and wit. Here's a taste of what went down:
The trio kicked off with a deep dive into the oil markets, highlighting the delicate balance between supply and demand. They pointed out the Saudi's production cuts and pondered over the potential ripple effects of increased production from other major players like Russia and the U.S.
Switching gears, the conversation moved to the U.S. natural gas market. They discussed the impact of recent cold snaps on prices and production levels, and debated the Biden administration's stance on the future of LNG facilities, hinting at the broader implications for the energy sector.
The discussion took a turn towards government fiscal policies, scrutinizing the U.S. government's revenue and expenses. The hosts analyzed the deficit trends and the challenging road ahead in managing national debt, emphasizing the need for a cautious approach in these uncertain times.
In a vibrant segment, the hosts dissected the media and tech giants - Netflix, Disney, Amazon, and Meta. They chewed over each company's strategic moves, market positions, and the evolving landscape of content consumption and production. The potential for partnerships and the future of streaming services led to intriguing predictions and insights.
Telecom was next on the docket, with a focus on the major U.S. carriers. The conversation revolved around the capex strategies, the 5G rollout, and the ambitious leaps towards space-based networks, highlighting the innovative, yet competitive nature of the industry.
The semiconductor sector wasn't left out. The hosts discussed recent earnings updates from industry behemoths, touching on the significance of AI in driving future sales and the strategic implications of the global chip shortage.
In an unexpected twist, the episode also covered groundbreaking developments in biotech, spotlighting a gene therapy that's making waves in treating genetic hearing loss in children - a testament to the breathtaking pace of innovation in the field.
Wrapping up, the episode couldn't avoid the gravitational pull of politics. The hosts deliberated over the potential investment implications of a Trump vs. Biden rematch, offering a nuanced view on how political landscapes can influence market dynamics.
From oil barrels to gene editing, from silicon chips to the corridors of power, Telltales once again delivered a whirlwind tour of the investing landscape, all while keeping it light, informative, and utterly engaging. Tune in, stay sharp, and as always, make your investment moves with wisdom and wit!
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
Welcome to Episode 2403 of the Telltales Podcast, your essential guide to the world of energy, technology, and market trends. In this episode, we dive deep into the dynamics of the energy sector, compare it with tech industry giants, and explore the intriguing potential of AI in various sectors. Here's a breakdown of what we cover: 00:00:00 Introduction 00:00:25 Disclaimer and Information Notice 00:00:42 Exhibit C: World Oil Supply / Demand 00:02:18 Exhibit B: US Gas Demand / Supply 00:02:49 Exhibit A: US Government Revenues and Expenses 00:04:06 Page 9: Energy Majors (XOM/CVX/COP/OXY/LNG) 00:05:35 Page 10: Midstream (KMI / EPD / ET / WES) 00:06:19 Page 11: Oil Companies (EOG / MGY / PR / FANG) 00:07:27 Page 12: Gas Companies (AR / EQT / CHK / AM) 00:08:47 Page 11: Oil Companies (EOG / MGY / PR / FANG) - Part 2 00:09:03 Page 10: Midstream (KMI / EPD / ET / WES) - Part 2 00:09:28 Page 9: Energy Majors (XOM/CVX/COP/OXY/LNG) - Part 2 00:09:50 Energy Valuations (Pg 9-12) vs Tech (Pg 1-4) - A comparative analysis highlighting the valuation disparities between energy companies and tech giants, offering insights into market perceptions and investment trends. 00:11:26 Sponsor Section - Top Mark Capital 00:11:51 Page 3: Can NVIDIA Sustain Its Current Run Rate Free Cash Flow? - An in-depth discussion on NVIDIA's financials, the sustainability of its cash flow, market risks, and growth projections. 00:16:36 Page 2: How Many Customers Does Microsoft Need to Sell Copilot To? - Analysis of Microsoft's Copilot product, its market impact, customer acquisition targets, and its overall contribution to Microsoft's valuation. 00:17:36 Will AI Copilots Be Good Enough? And What We Learned From CES! - A conversation on the potential and current limitations of AI copilots, enriched with insights and key takeaways from the recent CES event. 00:23:36 Page 1: Will Apple Need a ChatGPT or Rabbit Like Capability? - Exploration of the need for advanced AI capabilities in Apple's product line, the competitive landscape, and the implications for the tech giant. 00:25:13 The Implications of Generative AI on Healthcare & Drug Discovery - A thought-provoking segment discussing how generative AI is reshaping healthcare and drug discovery, highlighting potential breakthroughs and challenges. 00:27:52 Wrap-up and Next Episode Preview: Healthcare Focus 00:28:07 Legal Disclaimer and Non-liability Statement
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com -
This podcast and the information herein are intended for informational purposes only. The views expressed herein are the author’s alone and do not constitute an offer to sell, or a recommendation to purchase, or a solicitation of an offer to buy, any security, nor a recommendation for any investment product or service. While certain information contained herein has been obtained from sources believed to be reliable, neither the author nor any of his employers or their affiliates have independently verified this information, and its accuracy and completeness cannot be guaranteed. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, timeliness or completeness of this information. The author and all employers and their affiliated persons assume no liability for this information and no obligation to update the information or analysis contained herein in the future.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit telltales.substack.com - Visa fler
