A new real-estate mogul

By Hoda Mehr Tue, Jun 25, 2019

What you need to know?

At the company’s latest annual shareholder meeting, Alphabet – the parent company of Google (Ticker: GOOG and GOOGL) announced that the company plans to invest $1 Billion in affordable housing in the Bay Area, California. This news doesn’t really say much about the company’s aspiration to rein the real-estate market. It’s just a part of Alphabet’s plan to be a good corporate citizen and take care of its community. Right?

Well, that might be true. But, read this:

On Monday, a sister company of Google, known as Sidewalk Labs, released its 1,500-page plan to build a high-tech, futuristic smart city in Toronto, Canada. The company plans to invest $1.3 billion, raise another $38 billion investment from other private investors, and recoup its investment in the form of property rental income. It seems that Google has its eyes on the future of real-estate and soon, we will all be sending our monthly rent checks to the new king of real-estate.

What does it mean for investors?

Investors have been getting lukewarm about the future of tech. The recent foray of regulatory interventions into the big tech is scaring the investors off. You can see its evidence in the technology stocks’ prices these days. However, read through the 1500-page document presented by the Sidewalk Labs, and you can see how one may consider investing in Alphabet now and let it grow on the side for 10, 20, or even 30 years. This is about investing in the next generation of real-estate moguls.

• U.S. markets: It was another relatively calm day in the stock market. The Dow finished Monday slightly higher, and the S&P 500 index wrapped up the day slightly lower than where they both started the week. Scroll down to the Overall Market section to read more about what happened. 
• Cryptocurrency: Bitcoin is back, baby, and its price passed $11,000 over the weekend. Are you ready for another crypto craze? Ready or not, here it comes. The price increase is mostly attributed to the launched of Libra by Facebook that is considered as a vote of confidence by one of the largest companies on earth. When money flows in, the excitement follows.

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The oil story continues. 

What happened on Monday?

President Trump slapped another round of sanctions on Iran, and the Oil related securities didn’t wait too long to respond. U.S. prices ended higher, while global benchmark Brent crude fell lower. The market is split about how to respond to this new round of sanctions on Iran. Even OPEC decided to postpone their meeting by one week to see what will come out of the G20 summit conversations between the U.S. and China. It’s a wait-and-see type of a vibe in the market.

Now, what?

Typically, several moving parts impact the direction of the stock market. Add political uncertainties, and predicting the market becomes an impossible task. This can be the calm before the storm. Stay cautious, but don’t panic.

Shares of Caesars Entertainment Corp (Ticker: CZR) were up more than 14% on Monday, after the news that the company is being acquired by Eldorado Resorts Inc (Ticker: ERI). The combined company will continue to use Caesars’ name but the management suite will be occupied by Eldorado’s current leadership.

Now, What?

As the gambling industry is getting ready to accommodate sports betting, bigger and more powerful brands and companies have the scale to serve the pent up demand in the U.S. While Eldorado’s shareholders didn’t like the deal; based on the stock’s reaction on Monday, the joint entity will have a better chance to compete and dominate the market in the years to come.

FTC broke the pharmaceutical investors’ hearts. 

The Federal Trade Commission (FTC) rejected the pending merger of Bristol-Myers Squibb and Celgene (Ticker: CELG) due to antitrust concerns related to Celgene’s blockbuster psoriasis drug Otezla. Shares of the two companies fell more than 5% on Monday, as they postponed the merger date to the end of 2019 or early 2020, and also announced the divestment of Otezla from the joint entity.

Now, what? 

Mergers are never sealed until the FTC and shareholders’ approvals. This is yet again another lesson to be learned. Overexcitement over mergers is never justified. You can never be too sure about the future unless it is signed and sealed.

Fresh is better than frozen … for our pockets.

So, what happened? 

Apparently switching from frozen ground beef to fresh was the biggest and boldest move McDonald’s (Ticker: MCD) has made since the launch of its all-day breakfast in 2015, and it is paying off. The company announced the switch from frozen to fresh beef has increased the sales of its quarter-pound burgers by 30% in the past 12 months. Ha?

If you thought the food industry is no good place to invest your money, think again. Switching from frozen to fresh meat makes the sales go up by 30%. You don’t have to build an internet-connected burger to win in this industry.

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card