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Good Evening! đź‘‹
Welcome to Sunday’s Bean Breakdown. We have lots to talk about today!
Here’s What You Missed Last Week:
HEADLINES
What You Need To Know
Meta is replacing its president of global affairs, Nick Clegg, with Joel Kaplan, a former Republican staffer and current policy VP. Kaplan, who previously served as White House deputy chief of staff under President George W. Bush, recently appeared with President-elect Trump and Vice President-elect JD Vance at the New York Stock Exchange. He also made headlines in 2018 when he attended the confirmation hearing of his friend, Supreme Court Justice Brett Kavanaugh.
President Biden has blocked Nippon Steel’s $14.9 billion bid to acquire U.S. Steel, citing national security concerns over potential production cuts. Despite Nippon’s concessions to keep U.S. Steel operations in the U.S., Biden upheld his stance that the company must remain domestically owned.
Tesla delivered 495,570 vehicles in Q4 2024, missing Wall Street estimates and marking its first annual decline in deliveries. The company produced 1.77 million vehicles this year, but deliveries fell short of expectations. Tesla shares dropped on the news but later rebounded after a massive 63% stock rally in 2024.
A Jeju Air flight crash-landed at Muan Airport after its landing gear failed to deploy, killing 179 of the 181 people on board. South Korea has ordered an emergency inspection of all Boeing 737-800s as investigators search for answers in the nation’s deadliest air disaster in decades.
A state-sponsored Chinese hacking group breached U.S. Treasury systems using compromised third-party software, accessing unclassified documents. Treasury officials say the threat is contained, with the affected service taken offline. China denies the allegations.
UPCOMING
What You Need To Watch
On Monday, The November Factory Orders report drops, and I’ll be keeping an eye on it. This tells us how much demand there is for stuff being made in U.S. factories—basically a pulse check on the manufacturing sector.
On Wednesday, the Federal Reserve will release the minutes from their last meeting. I’ll be digging in to see what they’re thinking about future rate cuts.
The stock market will be closed on Thursday to honor President Jimmy Carter.
On Friday, the Supreme Court will hear arguments in the TikTok case, with a ruling expected before the ban is set to take effect on January 19th. This decision could shape the future of tech regulation in the U.S. and will be one for the history books. Whether TikTok remains or gets banned, the ruling will set a precedent for how the government handles foreign-owned apps and data privacy concerns.
TIP
Free Cash Flow
Most investors get stuck on a company’s earnings reports—"How much profit did they make?" But here’s the thing: profits on paper don’t always translate to real money in the bank. That’s where Free Cash Flow (FCF) comes in.
FCF shows how much cash a company actually has left after covering its expenses, like operating costs and capital investments. Take Tesla, for example. In 2022, they reported over $12 billion in earnings. But their free cash flow was around $7.5 billion—significantly less. That difference shows how much cash they needed to reinvest back into the business for things like factories, equipment, and R&D. When evaluating companies, focus on FCF. A company with strong free cash flow has the flexibility to weather downturns, invest in growth, and return cash to shareholders. It’s a sign of financial health that earnings alone won’t reveal.
CHART
“Best” Investor Ever
Source: @bean_wealth
TERM
P/TB Ratio
The Price-to-Tangible Book (P/TB) ratio measures how much investors are paying for a company’s physical assets, excluding intangible items like goodwill or patents. It’s calculated by dividing the stock price by the tangible book value per share. For example, if a stock trades at $40 and its tangible book value is $20 per share, the P/TB ratio is 2. This ratio is useful for evaluating companies in industries with significant physical assets, like banks or real estate firms. A low P/TB ratio can signal that a company is undervalued, especially if its tangible assets could be sold for more than its market price.
Actions
Steps to Level Up
Source: @bean_wealth
READ: Mining Bitcoin In Space
LISTEN: Zuck vs. OepnAI
WATCH: A $800K A Month Business
RESEARCH: The Energy Of The Future
EXPLORE: Why Groceries Are So Expensive
See you on Wednesday!
Cheers,
Matt Allen
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