The Sensational Septet

7 Companies are Absolutely Dominating the Stock Market Right Now.

Hey Friends,

For the vast majority of my adult life, I have been endeavouring to get free.

To get to freedom.

I now know that much can be said for spiritual freedom, being free of mind, free of spirit.

Certainly bodily freedom, body autonomy and freedom of movement have proven themselves to be intense flashpoint issues with many people over the last several years.

But financial freedom is the important freedom, in our modern system. Finances underpin everything — and getting to a place financially where you can put serious distance between yourself and daily survival / struggle is the holy grail.

To attain financial freedom, you’re most likely going to have to become an entrepreneur and an investor.

But to live that life, to successfully make bets in the market, to see gaps and opportunities and be able to fund them, to be able to corral together teams of people around a brand or venture, to launch products and services, to successfully sell them season in and season out — you will find that you will need to adopt a governing ethos, to establish guiding principles, to erect shared goals and milestones that everyone rallies around. Three words:

Mission. Vision. Philosophy.

I learned over the years that these are not just silly notions, not just corporate buzzwords to be plastered on office walls and forgotten. They're the lifeblood of truly transformative organizations. The secret sauce, if you will.

Let's break it down:

• Mission: Your reason for existing, the problem you're solving. The "why" that gets your entire team out of bed every morning, even when the going gets tough.
• Vision: The future you're building towards. The big, audacious goal that seems almost impossible. Your picture of what success looks like.
• Philosophy: The principles that guide your decision-making. Your rules of engagement, your non-negotiables. Your worldview, the lines you won't cross, the ethical shortcuts you’re unwilling to take.

I've seen many startups with groundbreaking tech and millions in funding implode because they couldn't articulate these fundamental, inescapable truths. Conversely, I've watched underdogs and runners-up with a fraction of the resources go on to strike their own paths and become industry leaders — all because they had taken the time to establish a sense of team purpose.

It’s almost 100% psychological warfare. Today in 2024, having a solid MVP and deploying some growth hack strategies won’t get you to the finish line. The market is saturated, consumer sentiment down. Talent is far more mobile and mercenary. Consumers are more savvy, informed and discerning.

Many market factors are against you at this moment. Therefore, what will set you apart as a winner, as an entrepreneurial leader who can read the tea leaves of the times, is to hone your ability to rally people — employees, investors, customers — around a compelling mission, an inspiring vision, and a philosophy that resonates.

Would Patagonia be Patagonia without its famous unwavering commitment to environmental stewardship?

Would Ben & Jerry's be Ben & Jerry's without its vocal stance on social justice and ethical sourcing?

Would TOMS Shoes have captured consumers' hearts without its "One for One" giving model?

Would Tesla have revolutionized the auto industry without its relentless push for sustainable batteries and transportation technology?

Would The Body Shop have stood out in beauty retail without its pioneering commitment to cruelty-free products?

Would Whole Foods have grown into a grocery giant without its emphasis on organic and natural foods?

Would LEGO have maintained its iconic status without its dedication to creativity and limitless imaginative play?

Would Google have become a tech behemoth without its mission to organize the world's information?

Would Netflix have transformed entertainment without its data-driven approach to content creation?

Would Apple have achieved its cult-like following without Steve Jobs' obsession with sleek design and user experience?

In the coming weeks we're going to dive deep into this very topic. We'll dissect case studies of companies that have nailed their Mission, Vision, and Philosophy — and also those that have lost their way. We'll explore practical strategies for defining and implementing these elements in your own ventures. And we'll challenge some conventional wisdom along the way.

I want to hear from you. How have you seen these principles play out in your own experiences? What brands do you admire for their clear sense of purpose? Drop me a line — the best responses may find their way into the next edition.

In a world of constant disruption and fleeting attention spans, a strong foundation is your best defence. Successful brands and companies know that longterm viability and defensibility is heavily dependent on the psychological game of seriously buttoning down your Mission, Vision and Philosophy.

Get these right, and you're miles ahead of your competition.

Onward and upward,

Moshe Modeira

Editor-In-Chief

Commerce & Capital

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Market Alpha: Tech Titans Rule Supreme

Big Tech Earnings Week: Brace yourselves, folks. The tech titans are about to unveil their hands, and the entire market is on tenterhooks. Amazon, Apple, Meta, and Microsoft are set to report earnings , offering us a window into consumer spending, AI advancements, and the digital economy's pulse. Nvidia's recent SIGGRAPH announcements have served to further fuel the AI frenzy, spiking investor expectations to gargantuan levels. This isn't just about quarterly profits; it's a glimpse into the future of technology and its market impact.

?? Key Insight: Consider boosting your exposure to AI-focused tech stocks, but buckle up for volatility. As these earnings reports roll in, we're all in for a wild ride. Stay alert, stay informed — and be ready to pivot at any moment.

Political Landscape Shifts: The political chessboard has been upended, with a Harris vs. Trump 2024 scenario emerging quickly emerging as what’s at stake over the next 90 days. You add in events like Biden's mostly toothless Supreme Court reform proposals and the suspected disinformation being spread about Venezuela's contested election , and you have national and geopolitical machinations that have the potential to reshape entire economic sectors. Healthcare, energy, defence, justice — these are pillars of our economy, and we’re all holding our collective breath, waiting to see which way the political winds will blow.

?? Key Insight: Diversification isn't just smart; it's your lifeline in these turbulent times. Spread your bets across sectors less likely to be blindsided by political curveballs. And keep some dry powder – in the world of politics, today's crisis is tomorrow's opportunity.

Global Economic Indicators: The Golden Arches are reporting declining sales, and that means more than just bad news for the entire fast food sector. McDonald's declining numbers are a canary in the coal mine , signalling persisting inflationary pressures on consumers. Meanwhile, the world's central banks are poised for a high-wire act that could send shockwaves through global markets. Add China's ongoing economic struggles to the mix and we've got a recipe for global economic uncertainty that is making even the most seasoned investors reach for the antacid tablets.

?? Key Insight: Keep your ears pricked for central bank murmurs — as they go, the economy goes because they're the puppet masters of global finance. It may be time to cozy up to some defensive sectors and dividend-paying stocks. When the economic seas get choppy, those steady returns can be your life raft.

Cryptocurrency and Financial Technology: Well, well, well. Look who's finally being invited to sit at the grown-ups' table. With new Spot ether ETFs hitting the market and regulators finally acknowledging the 21st century, digital assets are gaining more mainstream traction than a cat video gone viral. But let's not get ahead of ourselves — this is still the Wild West section of the finance world, so proceeding with caution and a watchful eye is advised.

?? Key Insight: For the risk-tolerant among you, consider dipping your toes in the crypto waters. Remember to only gamble what you can afford to lose.

Labor Market Dynamics: The workforce is flexing its muscles, and corporate America is feeling the burn. From picket lines to negotiation tables, labor issues are taking centre stage in a drama that's largely about shifting economic paradigms. This isn't just about higher wages or better benefits — what’s at stake is a fundamental realignment of the relationship between labor and capital, with ripple effects across every sector of the economy.

?? Key Insight: Keep a weather eye on companies with strong labor relations — they're likely to navigate these choppy waters more smoothly. Don't overlook those investing heavily in automation. In a world where human labor comes at an increasingly premium price, they will be tomorrow's market winners.

Olympics and Global Cooperation: The Olympics are typically a magical time when the world comes together to celebrate human achievement, and war, strife and geopolitical tensions take a brief timeout. But let's not kid ourselves — beneath the veneer of global goodwill lies a complex web of economic opportunities and political maneuvering. From tourism boosts to media rights bonanzas, the Olympics are as much an economic event as they are a sporting one. It remain’s to be seen what kind of boost the event proves for France.

?? Key Insight: Look beyond the medal counts. The real winners are the companies riding the wave of increased global attention and spending. From sportswear titans to broadcasting giants, there's gold to be found for investors who can see past the spectacle to the bevy of business opportunities beneath.

Alpha Recap: There are just about 90 days until the U.S. elections, so buckle up and get ready for extra intensity on the political front. Globally, we're currently standing at a crossroads in Q3 where tech earnings, political shifts and central bank decisions are converging into a perfect storm of market-moving events. Remember, in the world of investing, chaos often breeds opportunity. Stay vigilant, stay diversified and stay curious.

Commerce & Capital: The “Mag Seven”

The Magnificent Seven: Market Dominance and Systemic Risk

In an era where technology intertwines with every facet of our lives, it's hardly surprising that the biggest tech behemoths have risen to dominate the stock market. However, the sheer scale of this dominance has reached levels that are simultaneously impressive and worrisome. As we navigate the uncertain economic waters of Q3 2024 — it's vital to grasp how we arrived at this point and what it signifies for investors.

A New Market Paradigm: The Seven Titans

Seven companies have emerged as the pillars of the U.S. stock market:

1. Apple (AAPL)
2. Microsoft (MSFT)
3. Alphabet (GOOGL)
4. Amazon (AMZN)
5. Meta Platforms (META)
6. NVIDIA (NVDA)
7. Tesla (TSLA)

These tech giants, often referred to collectively by investors as the "Magnificent Seven" or "Mag 7" due to their outsized market influence, have become the bedrock of the American stock market. As of July 2024, they account for a staggering 30% of the S&P 500's total market capitalization. Their impact extends far beyond their respective sectors, essentially serving as a gauge for the overall market's health.

This concentration of market power in a handful of tech companies represents a significant shift from historical norms. It's a phenomenon that has caught the attention of investors, economists, and regulators alike, sparking debates about market efficiency, systemic risk, and the changing nature of the global economy.

Understanding the rise of these tech titans and their implications for the broader market is crucial for anyone looking to navigate the current investment landscape. Whether you're a seasoned investor or a new entrepreneur, the influence of these seven companies on market trends, innovation and economic policy cannot be overstated.

The Road to Dominance

The ascendancy of the Magnificent Seven didn't happen overnight. It's the result of a perfect storm, a confluence of several factors:

1. Technological Revolution: These companies have been at the forefront of the digital transformation, capitalizing on trends like cloud computing, e-commerce, social media and artificial intelligence.
2. Network Effects: Many of these companies benefit from powerful network effects, creating social ecosystems that are difficult moats for competitors to get beyond and replicate.
3. Pandemic Acceleration: The COVID-19 pandemic accelerated digital adoption, disproportionately benefiting tech companies.
4. Low Interest Rates: A prolonged period of low interest rates made growth stocks more attractive, fuelling the rise of these tech giants.
5. AI Boom: The recent explosion in AI development has further cemented the dominant market position of technology providers such as NVIDIA, Microsoft and Alphabet.

The Current State: A Market on Edge

At this moment in Q3, the market's dependence on the Magnificent Seven has reached dangerous proportions . Some startling statistics:

• On average, these seven stocks are accounting for 50% of the S&P 500's daily price movements.
• The Magnificent Seven's combined market cap is larger than the GDP of all but the top 3 global economies.
• These companies make up 7 of the top 10 holdings in the most popular index funds and ETFs.

This concentration of market power creates a precarious situation. When these stocks sneeze, the entire market catches a cold. A mere 2% decline in the Magnificent Seven can wipe out gains across the broader market , even if other sectors are performing well.

Recession Looms: The Double-Edged Sword

As economic indicators point towards a potential recession, the market's reliance on the Magnificent Seven becomes even more fraught:

Upside: These companies, with their strong balance sheets and dominant market positions, are seen as safe havens in turbulent times. This perception could lead to even more concentration as investors flee to perceived safety.

Downside: Any significant negative news — be it regulatory challenges, earnings misses, or leadership changes — could trigger a cascade effect, potentially exacerbating a broader market downturn.

Navigating the New Normal: Strategies for Investors and Entrepreneurs

1. Diversification — with a Twist: While diversification remains crucial, recognize that traditional index investing may not provide as much protection as it once did. Consider:
2. Stay Informed — But Don't Overreact: Monitor news and earnings reports for the Magnificent Seven closely, but avoid being tempted to knee-jerk react to short-term fluctuations.
3. Look for "Hidden Gems": Seek out companies in sectors underrepresented by the Magnificent Seven. There may be emergent value opportunities in overlooked areas.
4. Embrace Optionality: Use options strategies to hedge against outsized movements in the Mag 7 stocks.
5. For Entrepreneurs: Identify Gaps and Opportunities
6. Prepare for Regulatory Changes: Stay abreast of any and all potential antitrust / regulatory actions that could impact the Magnificent Seven's market dominance.
7. AI Isn't Just for the Giants: Explore how AI and machine learning can give your business a competitive edge, even on a smaller scale. Don’t sit back; the bigs sure aren’t.

The Path Forward: Balancing Opportunity and Risk

The dominance of the Magnificent Seven presents both unprecedented opportunities and systemic risks. For investors and entrepreneurs alike, the key lies in respecting their influence while not becoming overly reliant on their performance.

As we navigate this new landscape, agility and adaptability will be paramount. The companies and investors who can strike the right balance — leveraging the innovations spearheaded by the Magnificent Seven while carving out their own unique value propositions — will be best positioned to thrive, regardless of market conditions.

CTA: While Keeping Track of the Mag 7 — Stay Ready For Change

Remember, every market concentration eventually faces a reckoning. Whether through regulatory action, technological disruption, or simply the cyclical nature of markets — change is inevitable. The question is not if, but when and how. Until we meet next time, ponder these questions: what aspect’s of the meteoric rise of the Mag 7 has really jumped out at you the last several years? What other stocks and companies are you keeping track of that can prove to be complementary or disruptive to the Mag 7’s dominance? Drop us a comment and let us know ??????

Thought of the Week: Logan Paul’s PRIME Revolution

In the cutthroat world of hydration beverage marketing where established giants like Pepsi (Gatorade) and Coca-Cola (Powerade) have reigned unquestioned for many years, the recent meteoric rise of PRIME stands as a testament to the power of audacity, vision and modern marketing savvy.

Promoted by internet personalities Logan Paul and KSI, PRIME has accomplished the near-impossible: overtaking Gatorade in sales in less than two years , carving out a significant slice of the frothy $59 billion electrolyte beverage market.

The PRIME story is a social media case study for the modern age, a tale of calculated risk and unprecedented reach. Paul and KSI, both YouTube sensations with millions of followers, were brought into the ownership group especially because of their massive online presences and ability to create hype and brand recognition.

But it wasn't just about slapping the names of two social media influencers onto a product. The PRIME team understood the importance of quality and market positioning. PRIME's success can be attributed to several key factors:

1. Influencer Marketing on Steroids: Paul and KSI didn't just endorse the product; they became the product. Their personal brands, controversies and all, became inextricably linked with PRIME, creating a style of engagement traditional advertisers struggle to compete with
2. Strategic Partnerships: From UFC to Arsenal FC to a plethora of top-level athletes, PRIME secured high-profile partnerships that expanded its reach beyond it’s spokesmen’s core social media audience.
3. Scarcity Marketing: By initially limiting supply, PRIME created a frenzy of demand, with fans lining up for hours just to get their hands on any new flavour they released.
4. Product Diversification: Expanding from hydration drinks to energy drinks with a range of fiercely fruity flavours between the two, PRIME capitalized on multiple taste segments in their target category.
5. Youth Appeal: With playful, vibrant packaging and bold flavours tailored for younger tastes, PRIME smartly tapped into a demographic often overlooked by traditional sports drink brands.

The audacity of PRIME’s vision cannot be overstated. In a market dominated by decades-old brands with massive marketing budgets, the brand dared to believe social influence could translate into real-world sales. It appears that their gamble is paying off.

For entrepreneurs and investors, PRIME's ascent offers valuable lessons:

• The power and impact of digital influence is especially necessary for physical products.
• Exclusivity / scarcity still drives demand to unprecedented levels.
• Traditional industries with rich, monied incumbents are very ripe for disruption, especially by those willing to challenge conventions.
• Choosing the right partnerships and collaborations will exponentially expand a brand's reach and credibility.

As we continue to observe PRIME's ascent, one thing is clear: in today's marketing world, audacity paired with strategic vision can topple giants. It's a reminder that no market is too saturated, no competitor too entrenched for a bold idea executed with precision and passion.

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Trending Now

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how to come up with a killer youtube idea (to blow up your channel) — Aprilynne Alter: ?One of my favourite YouTubers, Aprilynne Alter outlines a formula for creating successful YouTube content, emphasizing that the base idea is crucial for a video's success. Her formula involves selecting a validated topic with proven view potential, choosing an effective format (or combination of formats), and applying engaging angles to elevate interest. Alter explains that top YouTubers evaluate their ideas using six criteria: feasibility, audience interest (both new and existing), view potential, brand alignment, and package-ability. While she stresses the importance of strategic idea development, Alter also encourages creators to balance this approach with personal creativity and self-expression. For those of you really seeking to understand the creator economy and how to thrive, look no further than anything I ever post from Aprilynne. She is so special.

Why Latin America is “Tax Hell” — Nomad Capitalist: The video discusses the concept of "tax hells" in Latin America while also highlighting tax-friendly options in the region. While countries like Venezuela, Argentina, Nicaragua, and Bolivia are labeled as tax hells, others offer more favourable conditions for international residents. Uruguay stands out with its 11-year tax-free option for new residents. Panama, Costa Rica and Paraguay are noted for their territorial tax systems, potentially allowing for tax-efficient living with proper structuring. Mexico's complex ties-based system can be advantageous depending on individual circumstances. Nomad Capitalist’s Andrew Henderson introduces the "Trifecta" concept of splitting time between three countries to avoid triggering tax residency. Henderson emphasizes understanding specific tax rules, proper structuring of affairs, and the potential for tax-friendly living in Latin America despite the region's reputation.

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Creative Director Oren John strikes again with a banger of a tweet , highlighting what one e-commerce brand is pulling off with a 12-second iPhone video ad that is really the blueprint for how all DTC brands should be thinking about online content:

?? Book Shelf

Pitch Anything by Oren Klaff. Oren Klaff presents a novel approach to pitching ideas and closing deals. Klaff introduces the STRONG method (Setting the Frame, Telling the Story, Revealing the Intrigue, Offering the Prize, Nailing the Hookpoint and Getting a Decision), arguing that traditional pitching methods often fail because they appeal to the wrong parts of the brain. Klaff advocates for creating a sense of intrigue and scarcity, controlling the frame of the interaction, and presenting information in a way that engages the listener's primitive "croc brain." Pitch Anything offers practical techniques to make pitches more compelling and increase the likelihood of success in various business situations.

Radical Candor by Kim Scott. This book kept getting recommended to me and I finally bit the bullet and start reading. Author Kim Scott introduces the concept of "radical candor," which involves caring personally about your team members while also challenging them directly. The book outlines a framework for giving and receiving feedback effectively, encouraging leaders to avoid what Scott calls "ruinous empathy," "manipulative insincerity," and "obnoxious aggression." Scott provides practical advice on implementing radical candor, giving tips on holding effective one-on-one meetings, giving praise and criticism, and fostering a culture of open communication.

The War on the West by Douglas Murray. Douglas Murray proffers a controversial critique of what he perceives as an attack on Western civilization, its values, and its cultural heritage. Murray has leapt onto my radar with his impassioned, articulate arguments for the preservation and upholding of Western values at a time in history when many are questioning them. Murray argues that there's a growing trend, particularly in academia and progressive circles, to denigrate Western achievements and history while overlooking its positive contributions to the world. The book challenges many of the current narratives on diversity, equity, and inclusion, arguing that they often go too far in criticizing Western societies while being overly lenient on non-Western cultures.

?? Article Of The Week

New York’s Largest Hospital System Is Setting Its Sights on the Entertainment Business: A very unique story caught my eye this week. A large New York State hospital system known as Northwell Health has announced the launch of Northwell Studios, an innovative yet potentially problematic venture into filmmaking entertainment.

While the move demonstrates the very adaptability in a changing economic landscape that we have been pointing to — it raises a number of concerns.

The medical drama genre is already oversaturated, with shows like Grey's Anatomy and ER having thoroughly explored hospital settings. Can Northwell really hope to bring anything genuinely novel to the table? The move could also be interpreted as a sign of financial desperation. The timing, amidst great economic uncertainty and evolving business models across all sectors, makes this venture particularly unorthodox and potentially indicative of the financial pressures facing healthcare providers.

If executed thoughtfully, Northwell Studios could very well provide a unique platform for health education and awareness. By leveraging real medical expertise and experiences, the hospital system has the potential to produce content that is both entertaining and informative, possibly filling a niche for accurate, engaging health-related media. The success and impact of this venture will largely depend on how Northwell navigates complex issues such as the ethical implications of using real patients' stories for entertainment, even with consent.

While innovative and potentially beneficial for health awareness, a hospital moving into entertainment production raises significant questions about the state of healthcare financing, the saturation of medical dramas, and the ethical considerations of merging healthcare with entertainment.

See y’all next week ???Would love to hear your thoughts! Leave your comments below.