__You taste them daily...__ but don't know 'em. Back in 1889, a Dutchman with a strong sense of smell founded a flavor company. A century of mergers later, __[International Flavors & Fragrances](https://robinhood.com/stocks/IFF)__ (IFF) is publicly traded and worth $14B. IFF makes your gum taste like mint and shampoo waft of coconut — now it's [merging](https://www.cnbc.com/2019/12/16/dupont-chairman-says-deal-with-iff-gives-new-company-double-the-rd-of-competitors.html) with a way larger company.

- IFF sells its sensory formulas to the consumer goods companies that make what you eat and smell, with sales split between "Taste" and "Scent."
- Its 5,000-square foot greenhouse in New Jersey boasts 1,300 tropical plants whose enzymes end up in that *eau de anything* perfume.
- __*SnackFact*__: IFF sent a rose into space, where lack-of-gravity transformed its scent  — then they brought it back to commercialize the fragrance as "[Space Rose](https://spinoff.nasa.gov/spinoff2002/ch_1.html)."

__Scent of a merger...__ After 123 years, IFF is merging with the nutrition-focused subsidiary of chemical legend __[DuPont](https://robinhood.com/stocks/DD)__ to create a $45B molecular science company. But investors aren't feeling the flavor, dropping IFF shares 9% after the announcement.

_When you're a shareholder in International Flavors & Fragrances_

Senses

__This merger isn’t about synergy — it’s a bet on 1 product...__ *Plant-based meat*. Turns out IFF creates flavors/colors for plant-based meats and DuPont produces plant-based proteins. Their customers are alt-beef icons __Beyond Meat__ and __Impossible Foods__. Together, IFF/DuPont could leverage its supply chain importance to jack up prices, or develop better im-meat-ations at a molecular level. 

Earth's biggest flavor/scent creator just merged (all because of faux meats)

__"We are at the bottom"...__ An actual quote from __[FedEx](https://robinhood.com/stocks/FDX)__'s CFO, or Chief Freakout Officer, who called last quarter's 40% profit drop "[horrific](https://www.cnn.com/2019/12/17/business/fedex-earnings-second-quarter/index.html)" (his words). The fallout:

- FedEx shares __dropped 10%__ after the report.
- Now it's __lost over $4B__ in market value since Tuesday.
- And it cut its projections for the holiday quarter (the __4th-straight quarter__ it's done that).

__FedEx stuffed 2019 with excuses...__ Execs blamed the costs of expanding ground service, global trade disputes, a late Thanksgiving, and the loss of Amazon as a customer (FYI, rival UPS' stock is up 20% this year). The big profit [loser](https://www.wsj.com/articles/fedex-stock-stung-by-the-shift-to-e-commerce-11576688289) for FedEx was ground delivery. Lots of it.

- It __takes big bucks to expand ground delivery__ to 7 days a week (think more trucks, new facilities, and weekend shifts — all cost $$$).
- Typical ecommerce deliveries, like replacing your headphones (again), are generally light-weight, one-off deliveries — __those generate less revenue than bulky business packages__ and require more costly routes/drivers.

_UPS checking out FedEx's earnings report_

Ship

__Getting out of your comfort zone is hard...__ For decades, FedEx's profit puppy has been high-priced, overnight business shipments that you're expensing (like contracts that need to be signed yesterday). Now, you're e-scribling digital John Hancocks, instead. So FedEx execs are cockily optimistic that ground delivery investments to snag more ecommerce packages will pay off in 2021 — they boldly claimed they'd "[start lapping](https://www.cnbc.com/2019/12/18/fedex-says-it-will-start-lapping-amazon-in-2021.html)" Amazon. 



FedEx's profit puppy is disappearing — and the new puppy it's chasing is expensive

Dow Jones

S&P 500

Nasdaq

Bitcoin

10-Yr US Treasury

Who makes the ingredients in plant-based meat?

__Might as well call it Diet-Chella...__ Weight Watchers isn't counting calories when it comes to investing in big names to rep its brand. Shares rose on word __[WW](https://robinhood.com/stocks/WW)__ (the ‘90s health throwback rebranded from "Weight Watchers") [extended](https://www.marketwatch.com/story/weight-watchers-still-banks-on-oprah-amid-competition-from-other-diet-plans-and-its-own-subscription-programs-2019-12-17) its partnership with Oprah through 2025. Check out the resumés of WW stock and Oprah:

- __Oprah:__ In 2015 the TV legend became a board member, advisor, and the 2nd largest shareholder, owning 8% of the company. 
- __Weight Watchers stock:__ Shares had fallen 90% in the 4 years prior to signing Oprah, but are up 500% in the 4 years after Oprah. We call this year "4 AO."

__How do you beat bread-hating Keto diets?...__ Schedule a nationwide 9-city [tour](https://www.weightwatchers.com/us/ambassadors/Oprah) from January to March packed with Oprah. It's called "Oprah's 2020 Vision: Your Life in Focus," and it's WW's most strategic Oprah move — she interviews celebs like Lady Gaga, The Rock, Michelle Obama, and Tina Fey about their health journeys. Paleo can’t fill an arena like Oprah can.


_Brainstorming ways to monetize Amazon Alexa_

Diet

__Oprah has way more pull than Chipotle's "Lifestyle Bowls"...__ WW hopes celeb endorsements will power it through the most critical quarter of the year: *New Year’s Resolution Q1*. And it’s looking good so far — Tickets for Oprah Vision Tour 2020 are over 80% sold out, and investment bank UBS predicts it'll drive 8% WW subscriber growth. Big names bring big bucks.

Weight Watchers puts full weight behind star-studded Oprah-palooza

__First comes puberty, then comes paying rent...__ Tech follows a similar path — Growth 1st, profits 2nd. *__Facebook__ focused its first 5 years on growth, and only started selling ads in 2012.* __[Amazon](https://robinhood.com/stocks/AMZN)__ Alexa grew in its first years to reach 100M Alexa-enabled devices worldwide, selling Echos and Alexa software for near nothing. Now it's time for Part 2: Make money.

__10K Amazonians are on Team Alexa...__ According to reporting from [The Information](https://www.theinformation.com/articles/amazon-learns-a-new-skill-making-money-from-alexa), ten-thousand employees must now figure out how to squeeze $$$ out of your awkward Alexa commands — because the voice assistant only brought in $1.4M in revenues for Amazon this year (that's a measly $140 per employee). Here are some of Amazon's ideas:

- __Premium content?:__ If you order __Spotify__ through Alexa, could Amazon take a cut of that subscription?
- __Premium skills?:__ If you ask Alexa to "translate Spanish homework," could Amazon charge your parents for that feature?
- __"Hey, famous person":__ This one's already happening — Alexa can adopt the voice of Samuel L. Jackson for [99 cents](https://www.amazon.com/Samuel-L-Jackson-celebrity-voice/dp/B07WS3HN5Q). More A-list celebs coming soon for $5.

_"Did that droid just ask me to pay $9.99/month?"_

Pivot

__It’s not 100% clear Alexa is a success...__ Amazon's plan was to disseminate Alexas across every corner of the country to hook people on Amazon Prime (and possibly get them voice shopping on Amazon). But that "vcommerce" feature hasn't taken off (at all). The fact that Amazon is now trying to make revenue *directly* from Alexa could be a signal that it failed its original purpose: Make money *indirectly* for Amazon.

Alexa has new orders from Amazon: Start making money

Weight Watcher's 9-city Oprah-palooza 

__The moth-eaten shirt wasn't a hit in Europe...__ For decades, __H&M__ designers visited fashion shows and flipped through glossy magazines to spot what was on trend, then bulk-ordered cheaper versions for their stores. The result: the same “fast-fashion” styles delivered to H&M's nearly 5,000 stores, cookie-cutter style. That worked (until it didn’t).

- __Wasted fabric:__ The cover-all-bases approach missed for many shoppers, leading to billions of dollars in unsold clothes piling up. H&M sales shrank the past 2 years, and shares plummeted 51% in the last 5 years.
- __Discount rack:__ H&M had to aggressively slash prices (and even [burn](https://www.forbes.com/sites/heatherfarmbrough/2018/04/14/hm-is-pushing-sustainability-hard-but-not-everyone-is-convinced/#321acc7a7ebd) clothes it couldn't sell, donate, or Secret-Santa away).

__Data = dollas...__ On Monday, H&M announced it's on track to increase profits for the [first time](https://hmgroup.com/content/dam/hmgroup/groupsite/documents/masterlanguage/cision/2019/12/2599642.pdf) in 4 years, thanks to a huge strategy shift. A couple years ago, H&M stepped up its [analysis](https://www.wsj.com/articles/h-m-pivots-to-big-data-to-spot-next-big-fast-fashion-trends-1525694400?mod=article_inline) game, hiring hundreds of data scientists to help make savvier predictions of what clothes go to each store. American shoppers probably aren't into the same rompers as Russian shoppers are.

_H&M nails the holiday shopping spree_

Style

__Drop the "Squad Goals" graphic tees...__ H&M stepped back and reassessed before clicking "Add to Cart." Instead of using humans to scout trends (like most retailers do), H&M now combs through social media posts, search queries, and the receipts of returned clothes — it better predicts what's earned a spot on the rack:

- H&M sees that its store in a swanky Stockholm neighborhood is __mostly visited by upper middle-class women__.
- So it __removes bland basics for men and kids__ and swaps them with fashion-forward floral skirts, cashmere sweaters, and $118 leather bags.
- __The end goal?__ *Make less clothing that people don't want. Survive the retail apocalypse.*

















H&M's savvy data-driven moves to save fast fashion are working

__Multi-generational success is rare...__ The Celtics, Yankees, and Jedi all achieved it. Intel's *[sound logo](https://www.youtube.com/watch?v=-ihRPi4wcBY)* reminded us during every commercial that Intel was inside our computers. But as PC sales disappeared, __[Intel](https://robinhood.com/stocks/INTC)__ is searching for its second wave of profits. So it just swiped its corporate card for a $2B [acquisition](https://techcrunch.com/2019/12/16/intel-buys-ai-chipmaker-habana-for-2-billion/) of Israeli startup __Habana Labs__.

- __2016:__ Habana hid in "stealth mode" for 2 years, attracting $120M from venture capital to fund under-the-radar research and development.
- __2018:__ Habana unveiled Goya, a chip that processes almost 4x faster than __[NVIDIA](https://robinhood.com/stocks/NVDA)__, the market leader.
- __Right now:__ Habana's spearheading Intel's efforts to power data centers with fancy machine learning (more on those below). 

__Machines can learn...__ courtesy of chips made of silicon. As the world puts all its computer files on Google Drive, iCloud, and Amazon Web Services, tech companies need to organize that data ASAP. *Picture this:* Search "dog" in your photos folder:

- The results are actually the pictures you took of dogs. 
- *Your phone's software learned that a 4-legged object with a sloppy tongue who's always smiling is a dog.*
- Intel [thinks](https://siliconangle.com/2019/12/16/intel-shells-2b-high-speed-ai-chip-startup-habana-labs/) this type of artificial intelligence powering will become a $25B industry by 2024.

_Intel not trusting itself to build its own AI chips_

Compute

__Intel's acquiring instead of building...__ because its last DIY job was a disaster. In 2016, Apple selected Intel as its go-to iPhone chip-maker. When it was time to upgrade to 5G (aka right now), Intel couldn't deliver, so __Apple__ [switched](https://snacks.robinhood.com/newsletters/2jd81vF7Iw5vYhvrNZruqK/) to rival __Qualcomm__. After investing $16B in its smartphone division, Intel had to sell it away for only $1B to Apple. This time, it's *acquiring* so it can move faster. That Apple loss still burns Intel's RAM. 

Intel needs another era of profitability — So it's dropping $2B on a chip company

H&M uses the "Moneyball" strategy

__Excuse me, waiter?...__ Markets got served some much-needed sustenance Friday — the long-awaited "[Phase 1](https://www.npr.org/2019/12/13/787531540/u-s-china-trade-deal-phase-1-is-here-december-tariffs-are-scrapped)" trade deal was publicly announced by American and Chinese representatives. Here's what the trade adversaries agreed to at the table:

- __The US gives China tariff relief:__ $156B in new tariffs were scheduled to hit yesterday, which would've increased prices on made-in-China stuff you actually buy (iPhones, Nike shoes, InstaPots). Those tariffs got cancelled and some existing ones were cut in half.
- __China gives the US some soybean orders:__ China stopped buying US agricultural goods in response to those tariffs — that hurt American farmers. As thanks for the tariff relief, China committed to "[massive purchases](https://twitter.com/realDonaldTrump/status/1205509125788098560?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1205509125788098560&ref_url=https%3A%2F%2Fwww.npr.org%2F2019%2F12%2F13%2F787531540%2Fu-s-china-trade-deal-phase-1-is-here-december-tariffs-are-scrapped)" of US agricultural, energy, and manufactured goods.

__How's the meal going?...__ Depends which diner you ask. America's commitments are immediate and specific, while China's are eventual and vague (details to be announced in the future). The Phase 1 pact still hasn't been signed and the official text wasn't revealed, so we're stuck working off public statements from the table of trade negotiators.

_Without trade agreements, you have trade arguments_

Trade Meal

__This was just the appetizer to the trade deal meal — we're still waiting for the entrée...__ Investors were happy for the drop in tension, but they want truly harmonious trade relations between the US and China. Phase 2 will need to address these meatier issues, but Trump said it won't come until after the 2020 election:

- *China's government forces US companies doing business there to share their biz/tech secrets.*
- *China's government subsidizes Chinese companies, while banning or limiting American companies' access to the Chinese market.*
- *America's government is suspicious of Chinese tech, blacklisting made-in-China parts from US infrastructure.*


The US/China Phase 1 trade deal is done — but it's just an appetizer


__Lyft wants to sponsor your weekend getaway...__ Shares rose over 3% last week after the ride-share app [launched](https://snacks.robinhood.com/newsletters/GptbTfH3TGCsKNYjP48YR/articles/lmb7slGzij55qBgTcP9ki) a rental car biz. Starting in LA and SF, carless folks can book __[Lyft](https://robinhood.com/stocks/LYFT)__ wheels for 1-14 days through the app for a trip to Vegas or Napa. To beat OG rental car companies, Lyft cuts annoying gas fillup fees, offers $20 ride credits for pickup/dropoff, and is available to anyone over 22. The low-cost scheme probably won't be profitable — but just like Lyft's core rides biz, it'll probably try to jack up prices long-term if it wins your loyalty.

__Head in the cloud...__ __[Adobe](https://robinhood.com/stocks/ADBE)__ already invented Photoshop and the PDF doc — last week its stock [jumped](https://www.cnbc.com/2019/12/13/adobe-stock-hits-new-record-as-investors-cheer-move-to-cloud.html) 4% to an all-time high after a record $11B in revenue over the last year. It's one of the few ancient software icons that's successfully shifted from old-school CD-ROM licenses to fancy cloud software subscriptions. That's how Adobe can still compete with SaaS-y companies that were "born in the cloud" like __Google__ and __Amazon__.






Highs

Who's up...

__Adorable Baby Yoda nightmares...__ __[Hasbro's](https://robinhood.com/stocks/HAS)__ CEO is sweating them. He's __[Disney's](https://robinhood.com/stocks/DIS)__ official toy-maker for *Star Wars*, *Marvel*, and *Frozen*. But Hasbro [lost out](https://snacks.robinhood.com/newsletters/GptbTfH3TGCsKNYjP48YR/articles/4Dxd9TfAdmR3vc02BBEdSw) big this holiday season thanks to Mickey's secrecy over *The Mandalorian*, a Star Wars-ish streaming show with ridiculously cute Baby Yoda cameos. Since November's Disney+ premiere, desperate parents searched Amazon [90K](https://snacks.robinhood.com/newsletters/GptbTfH3TGCsKNYjP48YR/articles/4Dxd9TfAdmR3vc02BBEdSw) times for Baby Yoda gifts. Hasbro scrambled, but its official version won't hit shelves until May 2020. Multi-million-dollar *sigh*.

__We were only trying to buy some Kleenex in bulk...__ __[Costco's](https://robinhood.com/stocks/COST)__ online sales growth shockingly slowed last quarter, dropping shares 2% Friday — blame it on the brutally-timed 16-hour [outage](https://www.foxbusiness.com/retail/costco-cfo-says-thanksgiving-outage-hurt) that hit Costco's site over Thanksgiving *and continued into Black Friday*. Deal-hungry customers stared at error messages instead of order confirmations, costing Costco big sales. Just a few lost hours can kill the most critical retail quarter of the year.

Lows

...And who's down

_Without trade agreements, you get trade arguments_

The trade deal is an appetizer

__*Furious with you, I am*...__ When the CEO of toy company __[Hasbro](https://robinhood.com/stocks/has)__ snuggled into his sofa to watch __[Disney+'s](https://robinhood.com/stocks/dis)__ Star Wars-ish *The Mandalorian* series, he wondered what that adorable miniature Yoda thing was. It was hundreds of millions of should-be dollars for his company.

- __"Baby Yoda"__ is 50-years-old (diaper-age for yoda's species) and the cult star of the series.
- But Disney __kept him a secret__ until the show launched in November — it didn't even tell top toy-making partner Hasbro.
- So parents ended up __searching for "Baby Yoda" toys on Amazon over [90K](https://www.dailymail.co.uk/news/article-7776337/Disney-missed-2-7-million-revenue-lack-Baby-Yoda-toys.html) times__ this past month (and ordered $100K worth of fake/unofficial ones).
- Now Hasbro's unveiled a gaggle of Baby Yoda toys... but __they won't arrive until May 2020__.

__This is "Tickle Me Elmo" money...__ The master of all holiday toys [quintupled](https://www.businessinsider.com/marketing-lessons-tickle-me-elmo-2011-12) 1996 sales for its company (Tyco). The current popularity and undeniable cuteness of Baby Yoda could've driven similar holiday pandemonium, but Disney's stealthy self-serving moves were Hasbro's loss.

_Baby Yoda missing the train to Holiday Season 2019_

Play

__Hasbro is pretty much a Disney toy store...__ Hasbro paid big for the rights to be the official toymaker of Disney franchises Star Wars, Marvel, and Frozen. Now those toys are a huge part of its biz — 27% of Hasbro sales last quarter came from "partner brands." That's corporate-speak for Disney's billion-dollar character franchises, from Elsa to the Skywalkers.

Hasbro misses huge holiday toy opportunity with Disney's "Baby Yoda"

__Lyft or rent? Now, you can sorta do both...__ __[Lyft](https://robinhood.com/stocks/LYFT)__ already changed taxis. Yesterday it [launched](https://www.theverge.com/2019/12/12/21013185/lyft-car-rental-service-pricing-los-angeles-san-francisco-mileage) a rental car service starting in LA and SF. As little as $35 a day gets you wheels for a weekend getaway, right through the app. Here's how Lyft is competing with rental OGs like __Enterprise__ and [Hertz](https://robinhood.com/stocks/HTZ):

- __Car-to-Car service:__ Lyft will actually __pay for your rides__ (up to $20 each) to and from the rental car lot.
- __Lower age:__ You have to be 25 to rent a car in the US (or pay extra) — Lyft is ok with 22-year-olds and up.
- __Tank-friendly:__ You don't have to give away your firstborn child to fill up your tank. Lyft will top-off your tank post-Napa weekend, charging just the local gas price (no fee).
- __Clean machine:__ Lyft also has a leg up over car-share startups like __Getaround__ and __Turo__, since you're not getting someone else's car (and forced to endure their BO).






Ride

__If it sounds too good to be true, it probably is...__ With all these perks at low costs, we're guessing this car rental scheme won't be profitable. Long-term, if they successfully snag your loyalty from Avis or Hertz, Lyft can increase prices to turn a profit. That's also the general plan for its core rides business... which is still unprofitable.

Lyft is launching a car rental service (it's a tough day for Avis stock)

__All remaining passengers may now board...__ It's a pretty un-exclusive group that gets to show up at __[Delta's](https://robinhood.com/stocks/dal)__ Investor Day: Any Delta shareholder. The airline uses the opportunity to humble-brag its most impressive company highlights. Here are some stats investors are proud of:

- __Your legs get less room:__ Average seats per aircraft jumped from 97 to 127 over the last decade. And probably not just because the planes got bigger.
- __At least the planes are more environmentally efficient:__ The company emits 11% fewer C02 emissions overall than it did in 2005.

__Flight update: *Delta is really a credit card company*...__ We couldn't stop staring at [slide #24](https://s2.q4cdn.com/181345880/files/doc_presentations/2019/12/Investor-Day-2019-Presentation.pdf) in the Investor Day deck — Delta's co-branded credit card with __[American Express](https://robinhood.com/stocks/AXP)__ is the airline's true profit puppy:

- __8%__ of all Amex spending in 2018 was on Delta.
- That Delta/AmEx card earned Delta $1.4B in 2010 — and a whopping __$4B this year__.
- *__Now the AmEx card is [estimated](https://thepointsguy.com/news/delta-amex-relationship-profitable/) to bring in 35% of Delta's profits.__*

_Toss it on the ol' Delta AmEx_

Charged

__Delta is a perfect card candidate...__ because its customers spend lots on it. If you splurge on a few LAX-JFK flights home every year, you'd prefer to use the airline card that's boosting your points situation. Delta owns a big chunk of its close to 200M customers' wallets — and the credit card is where it makes money off them.

Delta's Investor Day reveals it's really a credit card company

Hasbro's Baby Yoda toy nightmare

__Feel free to go back to child's pose anytime...__ Investors aggressively dropped shares of __[Lululemon](https://robinhood.com/stocks/LULU)__ after Wednesday's earnings report — they're blaming the future, not the peaceful past:

- __The 3rd quarter:__ Sales rose 17% at existing stores, and 23% overall because it added 53 new Lulus over the past year. All that, plus its profits, beat expectations.
- __This quarter, aka this holiday season:__ Lulu gave investors a heads-up that it's expecting fewer sales than they do: $1.3B.
- __The unhelpful clarification:__ The CEO blamed a late Thanksgiving, awkwardly reminding us that there are 6 fewer holiday shopping days this year than last.

__Return to the top of your mats...__ where Lululemon's stock was enjoying a record high earlier this week. The brunch-worthy athleisure industry is fiercely competitive, but sizing up Lulu to Nike has begun (investment bank Cowen [compares](https://www.cnbc.com/2019/12/03/nikes-valuation-provides-a-map-for-lululemons-future-cowen-says.html) Lulu's growth to Nike's) — and since __[Nike](https://robinhood.com/stocks/NKE)__ is currently 5x as valuable as Lulu, shareholders appreciate the aspirational side-by-side. 

_Lulu's earnings report working on its Warrior 3_

Sweat

__Here's the secret to becoming the next Nike...__ *Be a lifestyle brand.* Lulu [patented](https://www.stites.com/resources/trademarkology/lululemon-a-warrior-in-protecting-its-intellectual-property) "Luon" and "Luxtreme," the technical fabrics that make yoga pants stretchy and sweat-proof. Now it's focusing on some serious lifestyle moves to differentiate itself:

- Stores with __built-in yoga studios__ (like this 20K-square-foot giant in [Chicago](https://shop.lululemon.com/stores/us/chicago/lincoln-park)).
- __Personal care products__ from deoderant to shampoo for post-shavasana shower routines.
- More focus on __including guys__, whose sales jumped 38% last quarter.
- And it calls its customers __"guests"__ — seriously, CTLR + F [this earnings report](http://investor.lululemon.com/news-releases/news-release-details/lululemon-athletica-inc-announces-third-quarter-fiscal-2019-0) to prove it.


Lululemon isn't expecting a peaceful holiday shopping season

__More 200-pound Great Dane than puppy...__ If oil is king, then __Saudi Aramco__ is the king of oil — and the most valuable company to IPO, ever. It [went public](https://www.pbs.org/newshour/economy/making-sense/what-americans-should-know-about-saudi-aramcos-ipo) Wednesday on Saudi Arabia's stock exchange (not the NYSE or Nasdaq) and shares jumped 10% on Day #1 of trading. Let's peep the key numbers:

- __$1.9T:__ That's Trillion with a "T." It's Saudi Aramco's record-breaking valuation after that surge in its stock price (__Apple__, the most valuable US company, enjoys a $1.2T valuation).
- __1.5%:__ The tiny-ish percentage of Aramco shares that were actually publicly listed — the Saudi government is keeping the other 98.5% (at least for now).
- __$111B:__ Aramco's profit last year, making it the most profitable company in the world, by far. 

__Keeping it gassy (at a low-cost)...__ Saudi Aramco squeezes so much profit out of every oil barrel because the [cost](http://graphics.wsj.com/oil-barrel-breakdown/) of producing each one is relatively small. It's not just the oil reserve real estate Saudi Arabia sits on — it also extracts the fossil fuel at a super low cost. 

- As of 2016, the __UK__ has to drop $44 to produce a single barrel of oil. 
- The __US__ shells out $23 per barrel.
- __Saudi Arabia__ spends less than $9. That's less than a Sweetgreen salad. And today oil is selling for $58 per barrel (that's some thick profit margin).

Gassy

__Aramco is a unique combo of risks and rewards...__  Saudi oil is close to home — they don't have to dig deep into the earth as the US does, or go to ocean depths like the UK. But this natural competitive advantage doesn't mean there's no risk... The world's pivot to sustainable energy could speed up, depriving Aramco of oil sales sooner than expected. Or political instability could mess with its largest shareholder: The Saudi government. Bigger isn't perfect.

Saudi Arabia’s profit puppy (finally) goes public: Saudi Aramco

_Guys are getting into Lulu (but still working on Warrior 3)_

Lululemon wants you to be its 'guest'

__6am Shred Report...__ It's actually an earnings report from __[Vail Resorts](https://robinhood.com/stocks/mtn)__, which owns 37 ski resorts that Tom & Gisele would feel comfortable Après-ing at. Plus, another 42 resorts are included in its "Epic" ski pass. Vail shares rose on word it's [sold](https://www.vaildaily.com/news/vail-resorts-reports-pass-sales-are-up-in-its-first-quarter-earnings-report/) 22% more season passes than at this time last year, but we hit ice while running over those numbers.

- *Pro move: Read Vail Resorts' [actual](http://investors.vailresorts.com/news-releases/news-release-details/vail-resorts-reports-fiscal-2020-first-quarter-and-season-pass) earnings report before your next trip — it's subtly packed with intel on your go-to mountains (there's a 6-person chairlift coming to Okemo).*

__Pizza vs French fries. Boarders vs Skiers...__ *Epic Pass vs Ikon Pass*. Society is increasingly divided between the 2 imperial ski passes that all the resorts band together under. Global warming forces them to team up — and that forces skiers and boarders to pick a side early in the season. 

- __The passes:__ Vail's __Epic Pass__ covers 79 resorts. Alterra's __Ikon Pass__ offers 41. Your friend group this winter will be the humans who also have your pass.
- __The reality for resorts:__ Just 1 degree warmer could turn a blizzard into rain. Less dependable snow makes owning an independent resort tougher.
- __The insurance policy:__ By joining an alliance like the Epic or Ikon pass, mountains can protect themselves from a lame winter — fellow alliance-members with better weather can provide soft snow cover to fall back on. 

_Should have got the Ikon pass_

__Don't let Vail's acquisitions distract you...__ The number of Epic Season Passes sold jumped 22%. Sounds awesome. But that's because the pass added 17 new resorts this year. *If you had a Mount Snow pass, now you've probably got an Epic one (because Vail [acquired](https://vermontbiz.com/news/2019/september/23/mount-snow-now-part-vail-group-ski-resorts) it and many others).* Sales grew in part because Vail literally absorbed new mountains — that doesn't make its existing biz more profitable. In fact, it lost money last quarter (snowmaking = expensive).

Vail Resorts stock is powered by 17 new ski resorts 

__A Democrat, a Republican, and President Trump walk into a bar...__ and actually agree on something. Nancy Pelosi [announced](https://www.npr.org/2019/12/10/786659436/house-democrats-support-updated-trade-deal-with-mexico-and-canada) that her House of Reps would support the USMCA: The consonant-heavy trade treaty between the US, Mexico, and Canada that the President signed in November last year. It takes awhile, but this bill should become law by January (quick reminder on [how that works](https://www.youtube.com/watch?v=l6MinvU93kI)).

__Stick one of those huge red bows on this car deal...__ Markets celebrated the kumbaya progress on trade cooperation. If you're CEO'ing a company, now you've got certainty on how much cross-border business will cost you (at least within North America). But the USMCA [majored](https://www.washingtonpost.com/business/2019/12/10/winners-losers-final-usmca-deal/) in cars (and it's obsessed with them):

- It requires that 30% of workers on a car sold in the US be __paid at least $16/hour__. That means more work for higher-paid US & Canadian workers and less for lower-wage Mexican ones. 
- That also means the __price of cars will rise__, especially adorable sedans that are mainly made in Mexico (they'll be tariffed unless they achieve that minimum wage requirement).
- In non-car news, __US farmers producing dairy, eggs, and turkeys__ can finally sell up north into Canada now. Great, eh?

Negotiated

__Trade is good, when done right...__ Econ 101 = *Trade benefits consumers and businesses.* Countries should produce whatever they've got a competitive advantage in. From cars to microwaves, Mexico and China have been winning more factories and jobs — American consumers benefited from lower prices and American companies benefited from higher profits. The failure has been in government policy, which hasn't helped US workers who lost manufacturing jobs as a result. This USMCA deal focuses on supporting them (and it does).

A Trade Peace: the USMCA is about to replace NAFTA for the US, Canada, & Mexico

_Should have done Ikon Pass_

Vail buys 17 mountains (then hits Après)

__Bezos pulled a Belichick...__ tossing the ol' red flag and demanding that the ref review the play. The Trump administration granted __[Microsoft](https://robinhood.com/stocks/MSFT)__ an aggressively lucrative contract to manage the Defense Department's critical digital data in the cloud. Big loss for __[Amazon](https://robinhood.com/stocks/AMZN)__:

- __Huge:__ The US Department of Defense is __America's largest employer__, with over 3M employees/contractors handling enourmous amounts of computer files.
- __Sensitive:__ Storing sensitive military data is high-stakes stuff (think secret docs outlining strike targets or secret dinner menus for military mess halls). 
- __Lucrative:__ $10B over 10 years. That's a lot, even for Amazon (its AWS cloud computing division made $26B in revenue last year).

__Unfair call?...__ Analysts expected Amazon Web Services to win the deal because it boasts the biggest cloud in cloud computing — what Kleenex is to tissues, AWS is to fancy digital storage. But it didn't.

- Amazon [claims](https://www.axios.com/amazon-web-services-trump-pentagon-jedi-contract-filing-4b5dddd0-a86c-4d6b-9218-4a628a443814.html) that President Trump sabotaged its bid because he doesn't like __The Washington Post__, which Amazon CEO Jeff Bezos happens to own.
- Amazon's asking a judge to rule the contract unlawful, since military spending shouldn't be influenced by personal beef. 
- __Best-case scenario for Amazon:__ The judge forces the administration to reconsider the contract.


_When you really, really want that JEDI military contract_

Appeal

__Let's talk about business ethics, baby...__ From insider trading to condoning sexual harrassmant, the answer is no to all (always). Those aren't *ethical* dilemmas — there's no gray area. But Amazon's situation smacks personal values against legal profit opportunities. It's the type of ethical challenge that dominates Big Tech right now.

- Should __Google__ — the leader in information transparency — let China block search results that its government doesn’t want its citizens to see?
- Should __Amazon__ — if its employees [oppose](https://www.ft.com/content/b38c5cf6-198a-11ea-97df-cc63de1d73f4) drone strikes — let the government use its servers for controversial military attacks?

Amazon appeals the Trump administration's $10B "JEDI" contract (which Microsoft won) 

*__Slayer of inflation. Protector of the consumer...__ Chairman of the Fed.* From 1979 to 1987, Paul Volcker ruled America's central bank. When he saw inflation winter was coming (prices across the economy rose 13% in 1979) he fought back by jacking up interest rates (to a whopping 19%). Inflation hasn't been a worry since the '08 financial crisis, but the Jersey native left us another [legacy](https://www.npr.org/2019/12/09/659908267/former-fed-chairman-paul-volcker-dies-at-92):

__Banks shouldn't gamble with your $$$...__ That cash in your bank account? Your bank makes money with it. Thankfully, account balances in American banks are protected by the Federal Deposit Insurance Corporation (FDIC) — the government agency that insures your money. If your bank goes bankrupt, you get up to $250K of your cash back, thanks to FDIC's taxpayer-funded program. That's where __"The Volcker Rule"__ comes in:

- It prevents banks from __aggressively playing__ with customers' FDIC-insured cash.
- Banks __can't invest customer funds in Netflix stock for their own benefit__ or __make risky hedge fund bets__ with your savings.
- It __wouldn't be fair__ for banks to benefit from the upside of risky investments with your cacsh, but then ask taxpayers to bail them out through FDIC insurance if those bets go wrong.

__That Volcker Rule could've helped prevent the last financial crisis...__ which is why we're happy the then-82-year-old Volcker pushed for it after Lehman Brothers collapsed in 2009. Preventing banks from engaging in "proprietary trading" with customers' cash is Paul's legacy — and it protects all of us daily without our even realizing it.

Former Fed Chairman Paul Volcker passed away — but his legendary "Volcker Rule" remains

No JEDI cloud deal left behind

__Excuse me driver, can you slow down on the ads?...__ Self-driving cars are the most-talked about things that don't exist yet since the "phase one" US-China trade deal. But __[Alphabet](https://www.theverge.com/2019/12/5/20995334/waymo-ride-hail-app-ios-apple-self-driving-car-robot-taxi-service-phoenix-arizona)__ geared up to  make robotaxis a reality last week by [launching](https://robinhood.com/stocks/GOOG) its Waymo app in Apple’s App Store (it's been chilling already in the Google Play store since April).

- __1 year ago:__ People in Phoenix (aka Phoenixians?) could become early adopters of Waymo, but they first had to sign Non-Disclosure Agreements. About 1,500 people have taken 100K+ rides so far, usually with a human safety driver behind the wheel (just in case).
- __Today:__ Both iPhone and Android users can download the Waymo app and join a waitlist. It's still only available in the Phoenix area, but they've started doing rides __with nobody behind the wheel at all__.

__Whoever offers Robotaxis first will probably win a ton of business...__ Our rough math estimates that *a $10 ride becomes a $5 ride* with self-driving cars:

- __$10:__ The fare of our simulated __Uber__ ride.
- __$7:__ The rough amount the driver gets to keep. 
- __$2:__ The amount needed to cover gas, insurance, and the car payment.
- __$5:__ The cost of the driver. This is the number that vanishes with robotaxis — *roro-rides could become __half the price__ of human-driven __[Lyft](https://robinhood.com/stocks/lyft)__ or __[Uber](https://robinhood.com/stocks/uber)__ rides*.

_Dodging Google's self-driving cars

Robo

__This could be Google's last moonshot...__ Waymo was born in Project X, which is a lab for Googlers to dream up "moonshot" projects that have nothing to do with Google’s core business of online search ads.

- __But Google's co-founders [retired](https://www.theverge.com/2019/12/4/20994361/google-alphabet-larry-page-sergey-brin-sundar-pichai-co-founders-ceo-timeline) last week__, and its new leaders could focus on profit-making businesses only — not the kumbaya projects that ex-leaders Larry Page and Sergey Brin championed.
- __Yet it looks like they raised a profit puppy with Waymo__ — the robotaxi service is estimated to be [worth](https://www.cnbc.com/2019/09/27/waymo-valuation-cut-40percent-by-morgan-stanley-to-105-billion.html) $105B. That's 8 times as much as Lyft.

Waymo's robotaxi app is now available to all (beware of the waitlist)

__Otis made skyscrapers possible...__ The 166-year-old elevator company is big enough to be its own Fortune 500 company, with $13B in revenue, 69K employees, and 2M elevators in service worldwide. In April, owner __[United Technologies](https://robinhood.com/stocks/utx)__ is [spinning off](https://fortune.com/2019/12/04/on-leading-otis-elevators-judy-marks/) Otis into its own publicly-traded company to unlock its value. __Otis__ makes serious bank in China, where all that new city construction needs vertical help, so it's praying the trade war doesn't get too bad.

__That partnership looks good on you...__ __[Marriott's](https://robinhood.com/stocks/mar)__ __W Hotel__ chain found a cost-effective, well-dressed marketing move — hook up with __Rent The Runway__ so that guests don't have to pack as many clothes. For an extra $69, your room could come with 4 wardrobe options to rent during your W stay. The brand move keeps the W relevant — and [snags](https://snacks.robinhood.com/newsletters/5LS2e4bEkOUDKVsAmvVZaO/articles/57CSSSJvOGEpnNKdVNHaLM) exposure for Marriott to Rent The Runway's younger customer base.

__*Buffering... Buffering...*__ Remember when __[Zoom](https://robinhood.com/stocks/zm)__ was the most profitable tech company to IPO in 2019, and its shares jumped over 50% on the first day of trading? The video conferencing leader's stock dropped 15% last week on word  that growth is slowing. Zoom’s CEO wants to “focus on [*existing*](https://www.cnbc.com/2019/12/05/zoom-zm-earnings-q3-2020.html) customers” — but shareholders crave new ones and some crystal-clear user growth.

__Any press = Good press...__ Debatable. __[Peloton's](https://robinhood.com/stocks/PTON)__ new [viral TV ad](https://www.thecut.com/2019/12/peloton-stock-drops-9-percent-following-widely-criticized-ad.html) is jacked with controversy. Sexist and elitist? *Arguably and most definitely.* But it also has everyone chatting Peloton during the at-home fitness company’s most important sales season. Peloton shares dropped 8% last week — then the ad’s actress owned the drama by jumping into [a commercial](https://www.adweek.com/brand-marketing/peloton-girl-stars-as-herself-in-the-greatest-sequel-ever-an-aviation-gin-ad/) for Ryan Reynolds' gin brand, drinking her cycling-induced worries away (new trend = post-controversy sequel ads).

_Hiding from Google's self-driving cars_

Google's robotaxi moonshot is worth 8 Lyfts

__Take the toiletries. Leave the blouse...__ __[Marriott's](https://robinhood.com/stocks/mar)__ W Hotels is partnering with subscription clothing pioneer __Rent The Runway__ to deliver vacay gear [straight](https://www.cnbc.com/2019/12/04/rent-the-runway-partners-with-w-hotels-so-you-can-pack-lighter.html) to your suite. For an extra $69, you get 4 Rent The Runway garments for the duration of your stay. And it's available at 4 W hotels: Aspen, South Beach, DC, Hollywood. Here's how "don't BYO clothes" goes down:

- __Ready-to-strut:__ A RTR romper is waiting for you on the Queen bed in room 207 after check-in. Wear it whenever, and leave it on the mattress when you check-out.
- __Location-appropriate:__ W's Aspen hotel offers sweaters for Après, while W's South Beach spot has cover-ups for poolside.
- __Size-insured:__ Medium too small? Rent The Runway stocked the Ws with "mini-closets" full of size options as backups (please add the elusive "marge").

__2019 didn't fit right...__ Good timing on the partnership, because this year challenged Rent The Runway. First, retailers __Urban Outfitters__, __Banana Republic__, and __Bloomingdale's__ launched their own subscription clothing services. Then, Rent The Runway's logistics systems [broke down](https://www.vox.com/recode/2019/9/27/20887017/rent-the-runway-new-customer-freeze-subscribers-delivery-delays-warehouse-issues), causing a freeze in the service and no new subscribers for weeks.

_When they tell you you didn't need to pack clothes for the trip_

Worn

__Partnerships are hacky marketing — and that’s smart...__ Facing all that fresh competition, Rent The Runway has pursued partnerships (aggressively): They've got drop-off boxes for your worn dresses at Nordstroms and WeWorks. Now add the W to the partnership mix. Partnerships are a hustling way to snag new customers:

- __TV ad__ = Spend big on televised ads to show potential customers your product.
- __Partnership__ = Spend less to cross-pollinate your user base with another company's.
- __W Hotels customers__ get an email about Rent The Runway's new hotel-outfit offering. __Rent The Runway customers__ get an email about W Hotels. *Symbiosis for the win.*

Rent The Runway partners up with W Hotels so you don't have to pack clothes

__Power Couple...__ __[General Motors'](https://robinhood.com/stocks/GM)__ new partnership with __LG__ isn't about sticking LG phones into GM sedans. We're talking batteries. The South Korean tech icon makes batteries too, and GM needs hundreds of thousands of them for its electric car fleet. This [partnership](https://www.reuters.com/article/us-gm-lg-chem-jv-exclusive/gm-lg-chem-to-build-2-3-billion-electric-vehicle-battery-plant-in-ohio-idUSKBN1Y90C6?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28Business+News%29) is a win for the Midwest: 

- __Lordstown, OH:__ GM and LG will invest $1B each into a new battery factory that'll employ 1,100 workers.
- __Detroit, MI:__ GM is building its electric pickup there (Silverado and/or Sierra), and their batteries will come straight outta the Buckeye state.

__Batteries are what make electric cars expensive...__ Without gas, the horses need to be powered by batteries. Big ones. Thousands of times bigger than the battery in your iPhone. The price of those batteries is the main reason electric cars are about [50% more](https://qz.com/1695602/the-average-electric-vehicle-is-getting-cheaper-in-the-us/) expensive than gas ones.

- __In 2010,__ electric cars were so new that an average battery [cost](https://www.marketplace.org/2019/12/03/battery-prices-falling-good-for-evs/) __$110K__.
- __Today__, the price of batteries for electric vehicles has come way down, but is still __$15K__ (and still the most expensive part of the car, by far).
- GM wants to lock down its own battery source for the 20 electric cars it plans to introduce by 2023.


_GM and LG are targeting the high cost of batteries_

Charge

__Joint ventures are like workout buddies...__ They help you train better, keep you accountable, and push you to lift more (always have a spotter). GM brings the car expertise while LG owns the battery mastery — together, they each own 50% of the new company. JVs can help do more at lower costs, but only if the 2 companies overcome trust issues:

- __You lose control__ within a JV - both companies own half the new one, so decisions gotta be made (peacefully) together.
- __You need trust__ with your JV partner — you're now sharing biz secrets.