Happy Sunday.
Wow! The S&P 500 closed above 5,000 for the first time in history.
Before we dive into the details of last week’s market results, I want to quickly remind everyone that the S&P 500 hitting all-time-highs is not a bearish indicator.
I’m sure you’re thinking to yourself, “I don’t want to buy the top! There’s only downside from here.” In actuality, history tells us that 78% of the time when the S&P 500 experiences a new all-time-high, we experience another new all-time-high sometime over the next 6-months.
As you can see below, 2022’s all-time-high fell inside of the 22% side of that statistic — but we’re now back on top after only 24-months! If you were like me and dollar cost averaged throughout those 24-months, your portfolio is very well in the green.
Thank you, everyone, who attended the Rich Habits Covered Call Webinar last week! We had over 800+ people join us live, with another 450 of you having already gone back to watch the replay.
In case you missed the event, here’s a link to the replay.
For those of you who are now selling covered calls on your own positions, please reply to this email and let me know what you’re doing! I’m always curious to see how other people generate income for their own portfolios.
Portfolio Updates:
2024 has seen a monumental start! Despite having only deployed $2,357 into the Dividend Growth Portfolio — it’s up nearly +$6,500.
As you all can see, my “Long Risky” subsection of the portfolio is performing the best as non-profitable technology names either 1) allude to flipping profitable in the near future or 2) become profitable now for the first time.
It’s wild to see YTD returns of nearly +16% — a wonderful annual return for anyone’s portfolio. At the moment, it’s impossible to predict as to where the markets are headed — but when you take the Magnificent 7 out of the equation the valuations begin to look more and more reasonable.
Cryptocurrency
The Cryptocurrency portfolio is up +$6,700 or so YTD — and nearly +$30,000 since I began dollar cost averaging into Bitcoin and Ethereum early last year. As you all might remember, I shared the follow chart with you last week — alluding to the fact a Bitcoin price run might be around the corner.
Good news for us, this chart was spot on! The price of Bitcoin has rallied +12% over the last 7 days — pushing us into new recent all-time-highs. $50K is just around the corner!
Week in Review — Too Long, Didn’t Read:
Uber One hits 19M subscribers, ARM Holdings is not Nvidia, Cloudflare lands their biggest customer yet, the Super Bowl could see 114M+ viewers, Snapchat sinks, Disney soars, Consumer Credit halts, and the services sector outperforms.
Key Earnings Announcements:
Uber One hits 19M subscribers, ARM Holdings is not Nvidia, and Cloudflare lands their biggest customer yet.
Uber Technologies (UBER)
Key Metrics
Revenue: $9.9 billion, an increase of +15% YoY
Operating Income: $652.0 million, compared to -$142.0 million last year
Profits: $1.4 billion, an increase of +140% YoY
Earnings Release Callout
“2023 was an inflection point for Uber, proving that we can continue to generate strong, profitable growth at scale. Uber’s platform advantages and disciplined investment in new growth opportunities resulted in record engagement and accelerating Gross Bookings in Q4.”
My Takeaway
Uber has been one of my public winners in a very long time. Literally this month last year I tweeted about Uber’s upside opportunity assuming they were able to flip FCF positive — and they did. The stock has doubled since this tweet.
I know I say it all of the time, but it’s because it’s true — if you can predict the cash flow, you can predict the stock price. This phrase worked perfectly for Uber.
Mobility gross bookings increased +28%, catalyzed by strength in Latin America and APAC. Wall Street remains encouraged by Uber’s fundamental operational trends — accelerating mobility and delivery bookings growth in Q4 and guidance to +20% additional acceleration in Q1 of 2024.
Uber One was rolled out to seven additional countries (now being supported in 25 total countries) increasing their total membership base to 19M, up from 15M last quarter. The service continues to drive higher frequency and retention among users — catalyzing 30% of the company’s quarterly revenue.
Looking toward 2024, Uber One will be the backbone to Uber — allowing the company to bundle Delivery and Mobility under a single loyalty umbrella, limiting churn and driving wallet share.
I’ll continue to expand my Uber position over the coming months as a very happy shareholder.
Arm Holdings (ARM)