You have definitely called it with Uber, and I applaud your analysis of Nike…all we can ever do is follow a plausible thesis and react to future events as they occur. Just do it!
I agree with your positions in Uber and SentinelOne, as well as your decision to exit American Express. I don't know enough about Goldman Sachs to have a view. I also respect and salute your willingness to put it all out there.
However, Nike seems a mistake. Even at $70 they'll have a hard time sustaining the earnings required for their over-stretched PE. Shifting from direct to retail further presses their margins, meaning sales need to grow that much more just to keep earnings flat. Nike needs significant earnings growth just to sustain its current valuation.
I don't think a turn around is likely. It is even less likely if the new CEO keeps talking about consumer weakness. Nike is full of Boeing and Intel levels of internal management speak excuses and the new CEO is not calling it. Nike is being hammered by 'consumer weakness' in China while Lululemon with the same consumers was up over 20% last quarter in China. Plus, being an obviously American consumer brand these days isn't going to help Nike in non-US markets. China, for instance.
I see Nike as more of stock in transition to being valued like General Motors. Still has a fabulous brand (Cadillac) but needs a PE under 10 to sustain the dividends and buy-backs.
You have definitely called it with Uber, and I applaud your analysis of Nike…all we can ever do is follow a plausible thesis and react to future events as they occur. Just do it!
I agree with your positions in Uber and SentinelOne, as well as your decision to exit American Express. I don't know enough about Goldman Sachs to have a view. I also respect and salute your willingness to put it all out there.
However, Nike seems a mistake. Even at $70 they'll have a hard time sustaining the earnings required for their over-stretched PE. Shifting from direct to retail further presses their margins, meaning sales need to grow that much more just to keep earnings flat. Nike needs significant earnings growth just to sustain its current valuation.
I don't think a turn around is likely. It is even less likely if the new CEO keeps talking about consumer weakness. Nike is full of Boeing and Intel levels of internal management speak excuses and the new CEO is not calling it. Nike is being hammered by 'consumer weakness' in China while Lululemon with the same consumers was up over 20% last quarter in China. Plus, being an obviously American consumer brand these days isn't going to help Nike in non-US markets. China, for instance.
I see Nike as more of stock in transition to being valued like General Motors. Still has a fabulous brand (Cadillac) but needs a PE under 10 to sustain the dividends and buy-backs.