TOP STORY
😢 Charlie Munger, A Titan of Investing Passes at 99

Legendary investor Charlie Munger, Warren Buffett’s right-hand man at Berkshire Hathaway, has sadly passed away at 99.

Munger's death marks the end of an era, with a rich legacy of wisdom, philanthropy, and a unique investment philosophy.

Countless members took to Blossom to mourn the loss of the legend, with Brandon calling him “a great role model for investors across the world”.

Munger played a key role in Berkshire Hathaway's success, with a knack for finding and investing in high-quality, underpriced companies. In 2016 Buffet told CNBC that “Munger weaned me away from the idea of buying very so-so companies at very cheap prices, knowing that there was some small profit in it, and looking for some really wonderful businesses that we could buy in fair prices”.

One example of this philosophy in action was Berkshire’s investment in See’s Candies, the makers of the peanut brittle Munger was known to munch on throughout the Berkshire AGMs. Munger convinced Buffet to buy the company for $25 million, and to date, it has produced over $2B in sales for Berkshire.

🫶 A Legacy Beyond Finance: In addition to his financial acumen, Munger was a dedicated philanthropist and an untrained yet passionate architect. His donations to universities like Stanford, Harvard Law School, and the University of Michigan often came with unique architectural inputs.

🔮 Berkshire Hathaway's Future: With Munger's passing, Berkshire Hathaway faces a new chapter. The legacy left by Munger sets a high bar for his successor Greg Abel, the 61-year-old chief of Berkshire’s non-insurance businesses.

🥲 A trip down memory lane

Earlier this year, Brandon, Marc, and myself (Max) flew out to Omaha for Berkshire’s Annual Shareholder Meeting and had the unforgettable privilege of seeing Munger’s last shareholder meeting ever 😢. Read our experience and takeaways from Munger and Buffet.

While Munger is no longer with us, his wisdom and famous ‘mungerisms’ will live on forever.

FROM OUR FRIENDS @ HAMILTON ETFS
🏦 History Favours the Canadian Banks in 2024

The Canadian banks had a negative return of more than 10% for the 2-year period ending October 31st ¹. In this 5-minute video, Rob Wessel of Hamilton ETFs discusses just how rare of an event this has been over the last 20+ years, what it has meant in the past, and what this could mean for the Canadian banks in 2024.

As the #2 provider of Canadian bank ETFs by AUM, Hamilton ETFs offers a range of popular Canadian bank ETFs:

Growth & Income – Hamilton Enhanced Canadian Bank ETF ($HCAL)

• Enhanced equal-weight exposure to Canada’s Big-6 banks

• Modest 25% leverage to enhance growth potential & yield

• 8.31% yield² – monthly distributions

Low-Cost – Hamilton Canadian Bank Equal-Weight Index ETF ($HEB)

• Equal-weight exposure to Canada’s Big-6 banks

• Low-cost (0.19% management fee)

• 5.52% yield² – monthly distributions

Mean Reversion – Hamilton Canadian Bank Mean Reversion Index ETF ($HCA)

• Exposure to Canada’s Big-6 banks using a mean reversion strategy

• Overweight the 3 oversold banks & underweight the 3 overbought

• 5.91% yield² – monthly distributions

For timely updates on the sector, sign up to receive Hamilton ETFs’ newsletter

1. As at October 31, 2023, based on the S&P/TSX Canadian Diversified Bank Total Return Index. Source: Bloomberg, Hamilton ETFs.
2. An estimate of the annualized yield an investor would receive if the most recent distribution remained unchanged for the next 12 months, stated as a percentage of the price per unit on November 30, 2023.

BIG TECH
💔 Are Apple and Goldman Sachs Breaking Up?

After only 4 years since Apple introduced the Apple Card, WSJ reported that Apple has sent Goldman Sachs a ‘breakup proposal’, that would end the high-profile partnership between the two companies in the next 12-15 months.

Apple is disputing the headline, saying the two companies remain focused on providing “an incredible experience”.

While Apple is reportedly the one initiating the break-up, Goldman has been unhappy for a while now, losing billions of dollars on its consumer services business (including the Apple partnership) due to a higher-than-usual loss rate on credit card loans.

🍎 What’s next for the Apple Card?

The breakup would mean Apple will need a new financial partner for its popular Apple Card and high-yield savings accounts, which are both integrated into the iPhone's wallet app with Goldman Sachs managing the banking backend. Some potential suitors include Synchrony Financial and American Express.

🚧 A Snag in Apple’s Financial Services Strategy

While Apple’s hardware businesses provide the bulk of Apple’s revenue, its services businesses like iCloud, Apple TV+, Apple Music, the App Store, and Financial Services, are core growth drivers. Apple has repeatedly highlighted the success of its Financial Services products and benefited from headlines calling it “The Future of Banking”.

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2024 IPO RUMOURS
📆 Reddit, Kim Kardashian's SKIMS, and Chinese fast fashion giant Shein Eyeing IPOs in 2024

Investors have been stirring after rumours that several high-profile IPOs are coming in 2024.

The IPO climate was tough in 2023. This year’s largest IPOs, including companies like Arm and Instacart, saw an average 2% drop from their initial listing price.

The IPO market is a great indicator of market sentiment, so many see it as a good sign that some big names are filing to list in the new year. Here are some of the IPOs to look forward to in 2024:

Reddit

In 2022, Reddit filed the paperwork to go public however, the 2022 economy wasn’t as strong as the company had hoped so they decided to hold off on their IPO.

Apparently, 2023 wasn’t what they were expecting either but hope is in the air for 2024. The company expects to go public at an estimated $15 billion valuation.

SKIMS

SKIMS, known for its shapewear and now venturing into lounge and activewear, achieved a valuation of $4 billion in its last venture round. Co-founder Jens Grede hinted at an IPO being part of the brand's future trajectory.

Shein

Shein, the Chinese fast fashion giant, reportedly filed for an IPO in the US, eyeing a massive $80-90B valuation.

BATTLE OF AI
🤖 Amazon Announces New AI Chip, Intensifying Rivalry with Microsoft and Deepening Relationship with Nvidia

At its annual re:Invent conference in Las Vegas, Amazon announced major AI advancements, introducing powerful AI chips, deepening its partnership with Nvidia, and launching its new AI chatbot, 'Q'.

Here are some of Amazon’s biggest announcements from the conference:

🤖 AI Chatbot 'Q': A new business-focused chatbot, aimed at streamlining work and customer service tasks, Q integrates with various enterprise systems and applications. Currently in preview mode only, Q will soon be available for a monthly fee.

🤝 Nvidia Partnership: AWS strengthened its relationship with Nvidia, offering access to the latest H200 AI GPUs and operating Nvidia GH200 Superchips for R&D.

💾 Trainium2 Chips: Designed for AI model training, Amazon claims its chips offer four times faster performance and improved energy efficiency.

🖥️ Graviton4 Processors: Amazon claims these general-purpose AI processors bring a 30% performance boost and are more energy-efficient. Available in preview, with a wider release expected soon.

These announcements show Amazon is dedicated to being a top contender in the AI race against players like Microsoft, while also keeping its lead position in cloud computing against rivals like Google and Alibaba.

 FROM THE BLOSSOM COMMUNITY

🎙 Top Discussions This Week

🗞️ What else you might’ve missed:

• Tesla ($TSLA) cybertruck launch causes stock to fall over 2%

• Robinhood ($HOOD) CEO asserts payment for order flow (PFOF) is here to stay

• Apple ($AAPL) and Paramount ($PARA) are discussing streaming bundle

• Enbridge ($ENB) Wins Commission Sign Off on Great Lakes Tunnel

• Kinepolis ($KIN) Shelves Potential Bid for Canada’s Cineplex ($CGX)