Silver banana goes to…

In this issue of the peel:

• 🎄 Christmas is capitalism’s favorite child—Americans spent $964.4B on gifts, lights, and probably questionable eggnog last year. Forecast for 2024? A cool $1 trillion.

• 📈 B*tcoin rallies; banks beef with the Fed. Meanwhile, American Airlines and Quantum Computing both flopped harder than your last-minute holiday plans.

• 🏆 Drumroll, please... This year’s Platinum Banana Award celebrates a stealthy superstar that quietly crushed 2024 with insane growth, AI dominance, and private market magic. And the winner is... 

Market Snapshot

Banana Bits

• President Joe Biden will decide if U.S. Steel is allowed to sell to Japanese steel producer Nippon Steel.

• The mortgage isn’t the problem for many homeowners—it’s the taxes and insurance.

• Starbucks baristas are on strike.

The Daily Poll

Previous Poll:

Which factor is most crucial for improving the U.S. housing market?

Lower mortgage rates: 25.5% // More affordable home prices: 30.2% // Increased inventory of new homes: 36.8% // Government intervention: 7.5%

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Macro Monkey Says

The Economics of Christmas

2,024 years after a baby was born in a manger, billions of people around the world celebrate by waiting for a bearded fat man in a red suit to climb down their chimney, break into their house, eat all their cookies, and leave a few boxes under an indoor tree.

Makes perfect sense. And it only makes more sense that the holiday season and the spirit of giving is one of the most profitable, shareholder-value-creating of them all.

Let’s get into it.

The Numbers

The Holidays are a great opportunity to tell all your friends and family exactly how much you care about them, calculated down to the penny on your receipt.

In 2023, Americans cared about their friends and family dearly, so much so that all that caring was worth approximately $964.4bn. That’s how much Americans spent on Christmas in 2023, which amounted to approximately 3.52% of last year’s GDP.

This year, forecasts anticipate Americans will love each other even more in 2024, approximately 3-4% more, in fact, as this year’s spending is expected to dance around the $1tn mark, plus or minus ~$10bn.

Individually, the average American is expected to dish out $1,063 on Christmas this year, according to the Conference Board. 

Of that, ~64% ($677) is expected to be spent on gifts for friends, family, and colleagues. I don’t know how many coworkers you’re buying gifts for this year, but if you are, I sure wish I was one of your coworkers.

The remaining ~36% of spending, or $387, is expected to be spent on other bullsh*t, I mean things like trees, lights, decorations, food, and expired eggnog-triggered hospital visits, presumably. 

To power all that spending, Christmas has put together its own little Ponzi scheme.

In addition to the jump in spending, Christmas carries a jump in employment. Roughly 700k new jobs are created during the Holiday season, according to the National Retail Federation.

400k of those new jobs are in retail stores—ranging anywhere from Target to the local Christmas tree farm—and the remaining 300k work for Jeff Bezos, I mean, works in warehousing and logistics for the season.

This additional employment powers further Holiday spending, ideally allocated to their gift budget for you. 

All those additional hours help Americans continue to prove that we value relationships with each other more than almost any other country, as we can see below.

No surprise to see a bunch of kind Canadians at the northernmost point on the list, but it will be interesting to see who loves their friends and families most in 2024.

The Takeaway?

Simply put, Christmas is a beast. And the above shows that the more you love your friends and family, like in the U.S., the better it is for your economy. 

Hope everyone had a Merry Christmas and Happy Holidays. Back to your regularly scheduled programming tomorrow.

Career Corner

Question

What are some good subject lines that work for cold emailing? Looking for advice on how to get a good hook for a subject line.

Answer

When crafting subject lines, try focusing on personalization and relevance to capture attention. For example:

• Mentioning your school and purpose, like “Coffee Chat with [School Name] Undergrad” or “Introduction from [School Name] Undergrad.”

• Highlighting your interest in a specific company or role, such as “Interested in [Firm Name] [Role] - [School Name] Undergrad.”

Head Mentor, WSO Academy

Check out WSO Academy

What's Ripe

MicroStrategy (MSTR) 7.81%

• It’s a green Christmas for BTC holders. Like the bell Santa gave that annoying *ss kid in The Polar Express, BTC over $100k was truly the first gift of Christmas.

• The King of Digital Assets has fallen from an all-time high of $108,135 on Dec. 17th down to as low as $92,628 on Monday, only to roar back to $98,583 at the time of writing (12:09pm Tuesday).

• After a big decline on Monday driven by dilution from yet another equity sale, MicroStrategy took off on Tuesday to reclaim its gains on the back of BTC’s rise.

Big Banks (BKX) 1.23%

• There’s a mutiny going on in Fed Chair JPow’s house as the kids have initiated an organized rebellion against mom and dad. It’s the Big Banks vs the Fed.

• The Bank Policy Institute, a researcher and policy advocate representing the U.S.’s largest banks, is suing the Federal Reserve over the central bank’s stress test practices.

• The BPI isn’t alone; it has joined the American Bankers Association, the U.S. Chamber of Commerce, and other smaller bank groups in filing the suit.

• Basically, the allegations allege that the Fed allegedly has obfuscated and overcomplicated the stress test process to the point where it “produces vacillating and unexplained requirements and restrictions on bank capital.”

What's Rotten

Quantum Computing Inc (QUBT) 6.02%

• Hmm… I wonder what this company does? I’ll look it up in a sec, but as of right now, all I know is that a share price falling this much can’t make for a Merry Christmas.

• Oh, okay, now I get it. Like most companies that don’t actually sell anything and trade on loose affiliation to some esoteric technology, shares are off after a huge run-up.

• Investors could be taking profit, but the lack of volume on Christmas Eve lends itself to a correction following the stock’s 3,600% run from October through December.

American Airlines (AAL) 0.29%

• Are they gonna try to blame CrowdStrike too? American Airlines shares suffered during one of if not the, busiest travel week of the year thanks to flight groundings.

• All U.S. flights for the country’s largest airline were ground to a halt on Tuesday morning due to a “technical glitch” from “a platform provided by a vendor.”

• As of 7:55am ET, all flights had been resumed, and not a single cancellation occurred. But Mr. Market was still spooked he might miss his flight, sending shares into descent.

Thought Banana

Platinum Banana Awards: Sneaky Winner of the Year

Hope everyone had a Merry Christmas, Happy Holidays, and a great whatever else you need to do not to go full Luigi Mangione on the rest of us.

In keeping with this lovely holiday spirit, today’s edition of the world’s most coveted award show will focus on the company who, much like Santa Claus, flew under the radar but delivered a big reward in 2024.

Let’s dive in.

Sneaky Winner of the Year

We all know way too much about Nvidia. The firm’s 193% YTD return is no doubt impressive but so widely covered that I think “Nvidia” will be my son’s first word.

We’re looking for the sneakier players. For example, does anyone hold TSS Inc (TSSI)? I have no idea what they do, but they’re up almost 3,600% in 2024. Rigetti Computing, AppLovin, Red Cat, and more also returned 10x that of Nvidia, as you can see here.

But even still, none of these capture the zeitgeist of the investment world in 2024, nor do they capture our champion. That’s why the winner of the 2024 Platinum Banana Award for Sneaky Winner of the Year goes to…

Anthropic PBC!

Congratulations to the entire Anthropic team on this indescribable honor. CEO Dario Amodei, who I’m sure is reading this through gratefully tearful eyes, was a close contender for our CEO of the Year, so I hope this award makes up for it.

Anthropic, OpenAI’s top competitor and the maker of the Claude LLM family, had a hell of a year in terms of investment return, business expansion, and public awareness.

If OpenAI is to Microsoft how Venmo is to PayPal, then Anthropic is like Zedge is to all the banks. This AI firm has received investments from all the big dawgs, including $550mn from Google, $2bn from Microsoft, and a total of $8bn from Amazon.

In 2023, Anthropic raised $300mn at a $4.1bn valuation. By March of 2024, the firm was valued at $18.4bn following an investment round led by Amazon, and, as of December, Anthropic is in talks with firms like Amazon and a chorus of VCs to raise at a $40bn valuation.

That would represent nearly a 10x return in just over 20-months. And it’s not just the firm’s valuation that’s going stupid.

Of all the major LLM developers, Anthropic dominated market share growth in 2024, doubling from just 12% in 2023 to 24% of a much larger market in 2024. Meanwhile, OpenAI fell from 50% dominance to just over 1/3rd of the market.

Finally, in addition to the seemingly AI-generated growth levels in valuation and market share, Anthropic wins this prestigious, estimable award because it represents investments in 1) AI and 2) private markets.

The investment narrative throughout 2024 has been dominated by this nascent technology, so it was only right that a company in this space win the Platinum Banana. 

Plus, Anthropic is, as alluded to above, a private company. The decline in the number of public companies has been faster than in Zach Bryan’s female audience, so to capture the culture of investing, we had to bless a private firm with this vaunted award.

The Takeaway?

Congratulations to Anthropic on the valuation gains, insane business expansion in an unimaginably competitive market, and for becoming so popular that my mom asked me a few weeks ago if she should be using Claude instead of ChatGPT to help make lesson plans for her 4th graders.

Now, don’t f*ck it up in 2025. I don’t want this award to be another version of when my dumbass gave Sam Bankman-Fried CEO of the Year in 2021.

The Big Question: Who else should have won sneaky winner of the year? Who are your early guesses for 2025?

Banana Brain Teaser

Previous

Kevin invested $8,000 for one year at a simple annual interest rate of 6% and invested $10,000 for one year at an annual interest rate of 8% compounded semiannually. What is the total amount that Kevin earned on the two investments?

Answer: $1,296

Today

The harvest yield from a certain apple orchard was 350 bushels of apples. If x of the trees in the orchard each yielded 10 bushels of apples, what fraction of the harvest yield was from these x trees?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
David, Vyom, Ankit & Patrick

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