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Brand and company watch list

By January 19, 2017February 24th, 2017Thoughts

Best brands – There is no true fundamental or technical analysis here, just a gut feeling from a combination of news about the companies corporate strategy (new products, divestment, new focus areas, capex, etc.) and personal product experience, if applicable. If there is a relatively constant stream of news that I think represents good management decisions, the brand is likely to make the list.

  • Patagonia – This is a mass market company ($600mm revenue) that makes market leading outdoor gear while also maintaining incredibly progressive values. Doing this at a small scale with success is commendable but doing it at a very large scale and for decades is extremely impressive. Every piece of Patagonia clothing is not just good but great. The price you pay is comparable to other brands yet they also are market leaders in sustainability and environmental protection. Go watch 180 Degrees South if you haven’t seen it.
  • McDonald’s – Bring up McDonald’s and I will start raving. Without question, everyone’s faces will start to contort into some form of horror and shock. Yes, I really like McDonald’s. So does MB Kanye. McDonald’s impresses the hell out of me and I study them as a company as much as I can. No, they don’t make the healthiest food, duh. But they have been the market leaders in fast food forever and there is a reason for that. They are consistent despite the chaos of managing 36000+ stores in every corner of the world. They are constantly innovating while their competitors can’t even figure out how to do breakfast. If you are wondering, these are the items that I occasionally get at McDonald’s and am never let down: coffee, vanilla sundae, egg and cheese on a biscuit, french fries.
  • Verizon – They have the best mobile network, that’s clear. What people don’t realize is that they also have a gigantic fiber network that is very important. Where their competitors always seem to be grasping at straws to maintain or grow their footing, Verizon makes it look like selling their premium product is easy. Their branding and products are a little stale but I still think they are one of the best brands out there.
  • Netflix – they have made a ton of tough decisions and it seems like all of them have worked out in a positive way. Their switch from a DVD lending company to a streaming focus was incredibly courageous and visionary. Their investment into original content was equally insane. Both of these big steps have kept Netflix well ahead of any competitor. With Reed Hastings at the helm, I think they will continue to crush it.
  • HBO – They make the best of the best video content, no question about it. Netflix makes very very good stuff but HBO makes the absolute best stuff (Sopranos, Band of Brothers, Game of Thrones). And they push culturally interesting content too, not just huge features.
  • Tesla – I am so bullish on Tesla it’s painful. Elon Musk is one of the best entrepreneurs and visionaries right now and I have full confidence that Tesla will become one of the world’s largest companies one day, if not THE largest. Transportation and energy are two of the most important problems the world has and they aren’t going anywhere.
  • Amazon – Everyone uses Amazon so it is hard to imagine that anyone doesn’t know how incredible they are. They also make a lot of aggressive strategy moves like their investment in hardware, AI (Alexa), and original content. However, I will never forgive them for co-branding their e-readers and tablets under the Kindle moniker. That was a huge mistake and will probably kill the e-reader, eventually.
  • Starbucks – I don’t come across a ton of news about Starbucks but their market dominance is unquestionable. Also, people tend to forget, or not know, their progressiveness as a company. They were one of the first large companies to offer health insurance to all of their employees, all at great corporate expense. That was in 1988! Then in 1991 they were the first private company to offer stock options for eligible part-time employees. Now they are offering funding for their employee’s college education! I also recently had a cup of Ethiopian sun-dried coffee brewed on a Clover at a Reserve location in NYC and it was one of the best cups of coffee I think I have ever had. It was $4.95 for the cup though.
  • Facebook – It’s got 1.8 billion people and it isn’t even allowed in China. I joined the ‘Book grudgingly on March 18, 2004 when my gf at the time signed me up. MIT was the one of the first schools allowed on the platform so there must have been only a couple thousand users by the time I joined. [I just looked it up and FB was launched on Feb 4, 2004]. Since then Facebook has changed a lot but the pace of their growth has never faltered. Facebook has literally transformed our world and I can’t imagine us going backwards. It also has some of the smartest people in the world working there.
  • Costco – they take care of their employees, have super cheap prices, an insane return policy, and a curated selection. If they have it at Costco, you can be sure that it went through a selection process. Because they only carry one or two of any one item, the buyers take a lot of care. The result is that you can buy something there and know it is good quality. If it happens to break on you, take it back! Costco’s CEO is a strong leader and has built the company to the megalith it is today. My only complaint is that they have Pepsi products in thecafé.
  • In-N-Out – They don’t make the news much but in their business its probably a good thing. The food is always delicious and fresh. The staff are all painfully nice. And the prices feel like they were set 30 years ago and nobody remembered to update them for inflation. I respect their very deliberate growth strategy as well even though they completely neglect us east coasters.
  • Dominos – When the current CEO, J. Patrick Doyle, took over in March 2010, Domino Pizza was just another shoddy pizza chain. It was actually terrible. Ever since he came in, there have been a large string of real improvements and a continuous stream of smart decisions that are well publicized. Here are a few: an incredible app, the pizza tracker, the one button app, the Domino’s car, the new pizza sauce recipe, upgrading the cheese, insane cheesy bread, a much larger menu that is not just pizza, dropping the ‘pizza’ from their name as a result, renovating all of their locations, upgrading the cleanliness, making a wedding registry, and more. They just don’t stop innovating and most importantly, the food is much better and walking into a location is not nearly as sad as it used to be.

Very bullish

  • Microsoft – Ever since Ballmer left and Satya Nadella took his place, the company has been making a ton of right moves. Even though Microsoft under Ballmer’s reign only made extremely mediocre products and flopped major opportunities (mobile, AI assistants, etc.), they maintained their market position and huge cash reserves. Now that there is a true visionary and product guy in charge, they have every opportunity to do some truly disruptive things. One of the most amazing things is that Windows and Office are auto updating now and they are actually adding useful features! I have always been a good computer maintainer and upgraded my software throughout the past 20 years of using a computer but NEVER has a Microsoft minor update added anything valuable. More likely it would break something. That changed! The irony is that the one thing that doesn’t work in Windows for me is actual windows management. Clicking on a background window or alt-tabbing to a window brings that window to focus only about 50% of the time. I still have problems with windows going outside of my monitor’s desktop area so I have to shift+right click and use the archaic move command to bring them back onto the desktop. It’s a joke that these things don’t work in 2017 but whatever. Microsoft is on the way up!
  • Xiaomi – most Americans don’t know this company yet but watch out. They are a Chinese electronics company that is crushing it. I bought a Xiaomi phone for my use in China for $200 unlocked and it was really really good. Surprisingly good. All of their new products are interesting and seem to be innovative at a very low price. I think these guys are going to be the Samsung of China and will soon be a household name worldwide.

Notable absences

  • Google – generally speaking I think Google’s products are stuck in the past. Aside from Android, the rest of their stuff is languishing and in desperate need of a redesign. I am alone on this but I think it is high time for someone to make a real run at their search business. The UI/UX hasn’t changed in a decade!
  • Apple – My whole life I was very anti-Apple. Mostly because their customers and marketing were obnoxious, not because their products were terrible. The first Apple product I ever owned was an iPhone 6s not so long ago. No, I never had an iPod. Prior to that I had Blackberry’s and Android phones. Now I have an iPhone 7 and it is great. However, I am worried about Apple’s long term innovation potential. The fear is that Tim Cook is the new Steve Ballmer. It’s probably not the case but there is reason for concern (Macbook Pro flop?). I do love my Airpods though so there is that. Hopefully they can continue creating new categories and focusing on product.



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