📊 Richest Members Of Congress

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Happy Sunday!

Here at Carbon Finance, I’m all about the numbers and using data to tell the story. So, what’s the latest on the U.S. economy?

The U.S. GDP exceeded expectations in Q2, rising 2.8% compared to the 2.1% forecast. This is a considerable jump from the 1.9% growth in Q1.

On the inflation front, the CPI came in below expectations at a 3.0% increase in June.

This mix of strong economic growth and easing inflation is exactly what the Fed wants to see.

Because of this, markets are betting on a 100% chance of a September rate cut, making the Fed's July 30th meeting crucial for clues on their plans.

Some key data bites from this week that you should know:

• Kamala Harris and her husband have assets worth up to $7.36M.

• Spotify $SPOT saw Q2 revenue increase 20% and gross profit increase 45%.

• Chipotle’s $CMG comparable restaurant sales increased 11.1% in Q2.

• Ether $ETH ETFs traded over $1B in debut.

• UPS $UPS operating profit fell 30.1% YoY in Q2.

• Wiz says no to Google’s $GOOG $23B acquisition offer.

• 30% of the U.S. population has a stock portfolio worth more than $500,000.

• Ryanair $RYAAY plummeted after revealing a 46% drop in Q1 profit.

• Warren Buffett $BRK.B sold $2.3B of Bank of America $BAC in 6 days.

• OpenAI, ChatGPT’s maker, could lose $5B in 2024.

• WhatsApp $META hits 100M monthly active users in the US.

• CrowdStrike’s $CRWD cost the Fortune 500 an estimated $5.4B.

• Alphabet $GOOG plans to invest $5B in it’s own self-driving startup Waymo.

In today’s newsletter:

• 🥤 Buffett’s Coca-Cola Dividends

• 🚧 Tesla Hits A Roadblock

• 🔎 Is Google In Trouble?

• 📈 Best Stocks Last 100 Years

• 💰 Richest Members Of Congress

Things are looking sweet at Coca-Cola.

The company exceeded analyst estimates for both earnings and revenue in Q2.

Global unit case volume grew 2% and net revenue increased by 3%.

Coca-Cola also raised its full-year guidance, expecting organic revenue growth of 9-10% and comparable EPS growth of 5-6%.

Arguably the biggest fan of Coke? Warren Buffett.

Berkshire Hathaway holds a massive 400M shares of Coca-Cola, earning around $776M in dividends annually. 

This represents a remarkable 60% yield on the original $1.3B investment.

Tesla nosedived 13% after earnings last Tuesday, dragging most of the market down with it.

The stock, which had surged over 70% since its low in April, couldn’t sustain the momentum as disappointing numbers led to a sharp decline.

Here’s a snapshot of the numbers:

• Earnings: $0.52 vs. $0.62 Est.

• Revenue: $25.50B vs. $24.77B Est.

This marks the company’s fourth straight quarter of missing earnings estimates.

Automotive revenue fell 7% to $19.9B, and operating expenses surged due to AI projects, pushing operating margins down from 9.6% last year to 6.3%.

The drop in average selling prices, combined with restructuring charges and fewer vehicle deliveries, hit profitability.

On the bright side, the energy generation and storage segment saw revenue double, and free cash flow increased by 34% to $1.3B.

Plus, production costs per vehicle are dropping.

With a forward price-to-earnings ratio of 73x, Tesla’s stock is far from cheap.

Investors hoping for a turnaround will need to bank on the company's investments in AI and the delayed Robotaxi business.

As Elon Musk put it during the earnings call, "The value of Tesla overwhelmingly is autonomy…So I recommend anyone who doesn’t believe that Tesla will solve vehicle autonomy should not hold Tesla stock."

Should Google be worried?

This week, Sam Altman, CEO of OpenAI, unveiled plans to revolutionize search with a new prototype called SearchGPT. 

This tool aims to merge AI with real-time web info to deliver fast, accurate answers with clear sources.

Currently, there’s a waitlist for SearchGPT, but OpenAI plans to integrate these features into ChatGPT soon.

Google still leads the U.S. search engine market with an 87.45% share, though this has dropped 1.6% year over year.

Meanwhile, Bing and Yahoo have seen their market shares grow by 13.6% and 16.2%, respectively.

To maintain its lead, Google will need to stay ahead of these rising competitors. 

The company recently reported Q2 earnings that exceeded expectations, showing continued growth in search and cloud services.

The current search landscape shows that while Google currently dominates, rivals like Bing have a chance to capture a bigger slice of the market if they play their cards right.

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I enjoy investing in individual stocks, and I’m sure you do too.

A new study looked at 29,078 publicly traded U.S. companies from December 1925 to December 2023 and the findings were eye-opening.

51.6% of these companies lost money for their investors.

While the median stock had a compound annual growth rate (CAGR) of -7.4%, the average return was a staggering 22,840%. 

This indicates that a handful of outperformers drove most of the market’s returns.

17 companies, in fact, saw total returns exceeding five million percent.

Despite these jaw-dropping figures, the annualized returns of these huge winners were a more modest 13.47%, demonstrating the importance of long-term investing.

The king at the top of the hill?

Altria, the cigarette company, which boasted a cumulative return of 265,528,900%.

A $10,000 investment in Altria would have ballooned to $26.5B (yes, you read that right), thanks in part to its famous “Marlboro Man” advertising campaign.

The rest of the top 10 features a diverse mix of construction materials, railroads, aerospace, and beverage companies.

Should Congress be allowed to trade stocks?

Even some members of Congress don’t think so.

This week, a Senate panel approved a new bipartisan bill aimed at banning lawmakers from trading stocks.

The majority of Americans support this move.

For instance, since 2014, Nancy Pelosi’s stock trades have yielded about 700%, based on data from our friends over at Quiver Quant.

Pelosi’s returns are over three times the market average, which has returned 190% during the same time period.

Pelosi is among the wealthiest Congress members, ranking third with an estimated net worth of $248M.

Vern Buchanan is second with $249M, while Rick Scott tops the list with $327M.

Note, these are rough estimates and do not include the value of the individual’s primary residence.

To put things into perspective, Congressional members earn an average salary of $174,000, according to Statista.

Notable Companies Reporting Earnings This Week:

• Monday (7/29):

  • McDonald’s $MCD

• Tuesday (7/30):

  • Microsoft $MSFT, Procter & Gamble $PG, AMD $AMD, Pfizer $PFE, Starbucks $SBUX, PayPal $PYPL, Pinterest $PINS, Match Group $MTCH, SoFi $SOFI

• Wednesday (7/31):

  • Meta Platforms $META, Mastercard $MA, T-Mobile $TMUS, Qualcomm $QCOM, Boeing $BA

• Thursday (8/1):

  • Apple $AAPL, Amazon $AMZN, Intel $INTC, Ferrari $RACE, Coinbase $COIN

• Friday (8/2):

  • Exxon Mobil $XOM, Chevron $CVX

All of the companies that are reporting earnings next week can be viewed here.

📚 Recommended Reading

If the Wall Street Journal and the Sunday Comics had a kid...it would look a lot like Sunday Money.  

Sunday Money is a weekly newsletter that delivers 10 quick ideas on money, investing, and entrepreneurship.

It's free and you should totally subscribe.

Buys

• Michael McCaul (R)

  • Company: Apple ($AAPL)

    • Amount Purchased: $400K - $1M

  • Company: Sensata Technologies ($ST)

    • Amount Purchased: $200K - $575K

  • Company: Vishay Intertechnology ($VSH)

    • Amount Purchased: $187K - $505K

• Victoria Spartz (R)

  • Company: Simon Property Group ($SPG)

    • Amount Purchased: $50K - $100K

Sells

• Buddy Carter (R)

  • Company: Ameris Bancorp ($ABCB)

    • Amount Sold: $400K - $1M

• Michael McCaul (R)

  • Company: Oshkosh ($OSK)

    • Amount Sold: $332K - $830K

  • Company: Nvidia ($NVDA)

    • Amount Sold: $300K - $700K

Buys

• Truist Financial ($TFC)

  • Insider: William Rogers Jr. (Chairman and CEO)

    • # of Shares Purchased: 57,300

    • $ Amount: $2,518,908

    • SEC Forms: [1]

• UPS ($UPS)

  • Insider: William Johnson (Director)

    • # of Shares Purchased: 5,000

    • $ Amount: $643,034

    • SEC Forms: [1]

Sells

• Best Buy ($BBY)

  • Insider: Richard Schulze (Chairman Emeritus)

    • # of Shares Sold: 1,000,000

    • $ Amount: $88,521,841

    • SEC Forms: [1], [2]

• Nvidia ($NVDA)

  • Insider: Jensen Huang (President & CEO)

    • # of Shares Sold: 360,000

    • $ Amount: $43,537,789

    • SEC Forms: [1], [2]

• Airbnb ($ABNB)

  • Insider: Brian Chesky (CEO and Chairman)

    • # of Shares Sold: 115,385

    • $ Amount: $17,204,888

    • SEC Forms: [1]

  • Insider: Aristotle Balogh (CTO)

    • # of Shares Sold: 80,000

    • $ Amount: $11,929,174

    • SEC Forms: [1]

🤝 Review of the Week