# 644 – 🐈 Two words: Loaf Cat – The Average Joe
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    # 644 – 🐈 Two words: Loaf Cat


    March 4, 2024

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    Good morning. With the cryptocurrency market booming, meme coins are reaching new heights. Dogecoin, Bonk, and Shiba Inu all experienced significant value surges late last week — because as the whole crypto market rises, the taste for risk in the more silly (er, speculative) coins rises.

    Other meme coins gaining traction over the past week include HarryPotterTrumpHomerSimpson777Inu, dogwifhat, and — our personal favorite — LOAF CAT.


    Decoding The Secrets Behind Silicon Valley's Most Mysterious Tech Company

    Named after the “seeing stone” in Lord of the Rings, Palantir truly has its “eye” on everything. This secretive US tech company has stirred significant public interest recently, but despite being around for over two decades, few Americans recognize the name — and even fewer know what it does.

    Hidden in plain sight: Palantir helps customers, including the SEC, CIA, and US military, solve complex problems with big data — even preventing terrorist attacks in Europe, per its CEO Alex Karp. In 2023, the company went from surviving to thriving, turning profitable for the first time ever by embracing a new market.

    • While Palantir used to rely heavily on government contracts, its commercial revenue has been climbing steadily — fueled by growing demand for its AI product.

    • In the last quarter of 2023, its US Government revenue rose 11% compared to the previous year, and commercial revenue grew 32%.

    This success translated into tripled annual profits, reaching a remarkable 20% Q4 revenue increase to $608.4M, beating Wall Street’s expectations. Consequently, Palantir’s stock soared ~226% over the past year — surpassing the tech-heavy Nasdaq-100's ~50% gain.

    What’s the “Big Data” that’s driving investors’ interest?

    Commercial partners use Palantir to gain an edge with AI through its new Artificial Intelligence Platform. Last year, Karp said the product was so powerful that they weren’t sure if they “should even sell this to some” customers. Hype or not, AI isn’t the only thing carrying Palantir. The company has also addressed previous criticisms from Wall Street by tailoring its product to each customer — a costly move for the company.

    • Palantir improved its sales process, automated its product, and began hosting “bootcamps” that trained as many as 70 organizations in a single month.

    • Near the end of 2024, Karp said the revenue it made per employee almost doubled in the past four years.

    Forward-looking: Boasting a $55B valuation and achieving profitability for five consecutive quarters, $PLTR finally meets all the requirements to be a part of the S&P 500. Inclusion could boost the company — but after a tremendous run, analysts are concerned about the stock being overvalued, especially considering its forward price-to-earnings (P/E) ratio of 76x — significantly higher than the Nasdaq-100’s ratio of 31x.


    Three Bullet Elevator Pitch: The Fintech Company Changing American Financing

    Did you know, 92M1 Americans don’t qualify for affordable rates. That’s more than a quarter of the nation.

    ConsumerDirect is a SaaS platform that uses its tech to help American consumers get back billions in savings by providing the tools so they can raise their credit score.

    1/ Massive Market Need: We address the 92M Americans with subprime credit scores, resulting in $130B in mispriced financial products annually, and those who struggle with scams, fraud, and online privacy needs.2

    2/ Proven Performance: Over $91M revenue in 20233, 250K active subscribers, and consistent profitability. Our subscribers have saved $2.9B in interest on just their auto and mortgage loans (~$8,800 / member).4

    3/ Scalable Business Model: 540% revenue growth4 and over $300M in revenue since 2019, with 4,400+ active distribution partners selling our subscription-based services at a LTV/CAC ratio of 8.4X.5


    🏦 Investors finally embrace smaller companies, pushing the Nasdaq to all-time highs

    Megacap tech giants like Nvidia ($NVDA) and Meta ($META) may have kickstarted the rally that propelled the S&P 500, Nasdaq-100, and Dow Jones to all-time highs this year — but now, everybody else is coming along for the ride. The Nasdaq Composite, which tracks the performance of most stocks on the tech-heavy Nasdaq stock exchange, marked its first record close since Nov. 2021.

    • The Nasdaq has surged over 71% from its Oct. 2022 lows, fueled by a run-up in chipmakers and biotech names — lifting the index more than 10% to start the year.

    • Represented by the $QQQ ETF, the Nasdaq-100 includes the exchange’s 100 largest firms, driving significant gains and a ~5051% increase over the past year.

    Rise of the rest: With positive inflation data and interest rates expected to fall soon, investors are circling back to the Nasdaq’s smaller tech, health care, and lifestyle companies. Over the past month, the Composite has narrowly outperformed the highly-concentrated Nasdaq-100, demonstrating investors’ newfound appetite for smaller, riskier names. Finally, a reprieve for those holding a stock that’s down real bad.

    🗽 Immigration plays a key role in the resilient US economy

    Since the pandemic hit, the US economy has hummed along, to the surprise of many. One reason could be the massive influx of immigrants, with net migration hitting its highest point since 2017. Foreign-born workers now make up 18.7% of the workforce, helping to meet labor demand and keep wage inflation in check. Still, challenges persist.

    • Obtaining work permits for new immigrants is a major bottleneck — and even after completing paperwork, many have trouble getting to areas where jobs are available.

    • To address this issue, state and local governments have organized job fairs and mass paperwork-processing events, reducing the median turnaround time for work permits to under a month — nearly tripling the number of processed work permits from 2022 to 2023.

    Political landscape: Immigration remains a political landmine — and one which will be amplified as we sprint towards the 2024 election. Eighteen percent of Americans rank immigration as their top political concern… trailing only the economy at 19%. Against this backdrop, presumed frontrunners Biden and Trump have both visited the border — with Biden urging Trump to support a bill that would impose the toughest border restrictions in US history.


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    Markets & Economy

    Troubles persist for New York Community Bancorp ($NYCB): Internal issues and a leadership shuffle triggered a sharp decline in the regional bank’s shares on Friday. Despite previous “material weakness” around loan review, new leadership assures investors that a new chapter has begun. [Read]

    What’s the deal with shrinkflation? Social media has been awash with reports of smaller grocery products being sold at the original, non-shrunk price. But as the Biden administration vows to combat this, data reveals shrinkflation was actually even worse in 2016. [Read]

    China surpasses US in patent applications: In a significant shift, China filed about 10K more patents than the US last year, marking the first time in recent history. Economists say it isn’t US stagnation — other countries are catching up, particularly in AI. [Read]

    Business & Wealth

    Job seekers and employers are ghosting each other: What was once a Tinder phenomenon is now moving to LinkedIn as a hot job market makes it easier for either side to abruptly cut off communication during the hiring process. Roughly 78% of job seekers admit they’ve ghosted potential employers — while 40% report being ghosted themselves. [Read]

    Mounting lawsuits for OpenAI: The Intercept, Raw Story, and AlterNet have joined NYT in suing OpenAI for copyright infringement. Additionally, the SEC is investigating Sam Altman’s departure from the AI giant for evidence of investor deception. [Read]

    Posters, beware — your content is being used to train AI: Social media platforms, from Tumblr to Reddit to WordPress, sell user data to train AI systems. Even niche corners of the internet — like World of Warcraft forums — are being fed into LLM datasets. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


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    “Do-Nothing” Vacations Gain Popularity as 21% of US Travelers Prioritize Unwinding

    Ever felt like you need a vacation from vacationing? You’re not alone. Travelers worldwide are ditching tourism for “do-nothing vacations,” focusing on recharging at all-inclusive hotels rather than sticking to a packed itinerary.

    • In February, 21% of US travelers made “rest and relaxation” their primary motivator for leisure travel — a rise from 17% in a Sept. 2023 survey by Longwoods International.

    • In 2024, 72% of Americans intend to maintain or increase their hotel stays compared to 2023, according to the American Hotel and Lodging Association.

    The cost of doing nothing: The hospitality industry is embracing this trend by offering wellness amenities and pre-planning meals and activities to satisfy people's craving for easy relaxation. But there's a catch — escalating prices are making people think twice about booking hotel stays, with 56% expressing hesitancy due to inflation. Plus, with the ongoing staffing shortage, guests may need to shell out more for amenities like housekeeping and room service.


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    1Based on information obtained from the following publications: FICO, Experian.

    2Based on information obtained from Intuit Investor Day 2021 presentation.

    3Based on an Internal financial statements evaluation of gross revenue calculated for the trailing 12 months ending December 2023.

    4Calculation Methodology: Our savings calculations are estimates using historical internal data. It is based on analysing subscribers' credit reports that had an increased credit score, while a current subscriber, for two categories: new auto and new mortgage financings. The calculations assumed precise credit score reporting, a consistent correlation between score ranges and financing rates, uniform loan terms except for interest rates, and steady interest rates over the loan’s term, along with unvarying borrowing behaviors among users. It’s important to note that our calculation estimates rely on accurate credit reporting, average loan data and current interest rates, but may not account for an individual subscriber’s interest rate variations, if any, or significant shifts in users’ borrowing and repayment habits, if any. Additionally, there was an assumed conversion from VantageScore® v3.0 to FICO® v8.0 and then verified by an official FICO® v8.0 calculator to determine savings from starting credit score to credit score before the above mentioned financing occurred. Our calculation is subject to change without notice.

    5Based on Internal Reports, Based on unaudited 2023 financials.

    *Past performance is not indicative of future returns. Investing involves risk. See Important disclosures at www.masterworks.com/cd

    All content provided by The Average Joe is for informational and educational purposes only and should not be taken as trading or investment recommendations.

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