Luckin “is conducting what is probably the most remarkable turnaround we have ever seen,” said John Zolidis, an independent retail analyst at Quo Vadis Capital in New York who predicted in the summer of 2020 that there would be no value left in the company following its accounting scandal.
Alphabet’s (aka Google’s) shares have been selling off recently, together with other technology shares, in response to rising interest rates. But that isn’t a reason to sell the company’s shares, according to Quo Vadis President John Zolidis. “It is not low interest rates that make technology companies attractive. They are attractive because they are changing the world,” Zolidis said. “Of course, it is not sufficient to drive change. A technology company becomes an attractive investment if its innovation is attached to a highly profitable and durable business model.
Tech stocks (the Nasdaq) dropped 5% in the first week of 2022, and nearly 40% are more than 50% below their recent highs. The bloodshed has torched the portfolios of investors who focus on high-growth “idea” stocks that promise revolution but have yet to demonstrate more mundane abilities, like turning a profit. It’s worth asking: Are we at a peak?
Will valuations, rising interest rates, fewer stimulus payments, labor shortages, & inflation stop the consumer and wreck returns in 2022? We discuss what we believe the worriers are missing and why we’re bullish even with Charlie Munger saying that valuations are “crazy”. Stock idea discussed: Upwork, Inc. (UPWK).
“Target is outperforming its competition, bringing in huge numbers of new customers,” said analyst John Zolidis, president of Quo Vadis Capital in a research note. “Target did not drive traffic with discounts, traffic growth is organic and therefore should be sticky.”
Inflation is supposed to be very scary for investors, but we believe there’s a way to position to benefit from it. What characterizes stocks that are attractive to own now, based on what we know about wages and prices? Ideally, a business that has pricing power for its goods or services (customers will pay up, rather than substituting an inferior good or just putting off the purchase altogether) AND is not as exposed to structural labor cost increases.
Another factor likely driving the sandwich’s creation, says restaurant-industry analyst John Zolidis: the constant need for innovation among fast-food and fast-casual chains. “Novelty is super-important with customers,” he says, noting how Starbucks SBUX, -0.22% has practically built its entire business upon new and seasonal menu items (think the Pumpkin Spice Latte and this year’s new addition to the fall lineup, the apple crisp macchiato).
Foot Locker (FL) Closer to the GOAT Cyprus Value Investor Conference Oct 4-5 2021
Boluan Fanzheng is a Chinese idiom meaning “to bring order out of chaos” but also to “return to the rectitude of the past”. Today, the U.S. markets are receiving more chaos than order from China. How should you position your portfolio for China macro risk?
“These results reflect FL’s position at the intersection of consumer secular interest in health, the strength of this branded offering (notably Nike and Brand Jordan), and its customers’ increased purchasing ability due to higher wages and numerous economic policies,” writes Quo Vadis Capital’s John Zolidis. “We believe the effects of this heady cocktail will continue and the market is underestimating the company’s resulting changed earnings profile.”