Just over a year ago, a pair of interesting ETFs debuted. The Unusual Whales Subversive Republican (KRUZ) and Democrat (NANC) Trading ETFs seek to track the performance of stock investments of sitting Congressional members. The Republican ETF (KRUZ) would track those investments of Republican members while the Democratic ETF (NANC) would track those of Democrats.  As shown below, the past year has seen Democrats come out as winners. The over 30% total return for NANC is almost twice that of KRUZ and is also several percentage points stronger than the S&P 500 ETF (SPY).

Not only is NANC the better performer of the two since inception, but it is also significantly larger.  As shown in the chart below, NANC currently has assets under management (AUM) of $27.89 million compared to only $9.35 million for KRUZ.  While NANC has consistently held a large AUM since inception, we would note that it really took off in the past few months.

Both of these ETF have hundreds of holdings with KRUZ being the smaller of the two with 488 while NANC has 748.  NANC is not only large, but is significantly more top heavy.  The top ten holdings of that ETF account for roughly half of its weight, whereas KRUZ’s top ten holdings are just under 20% of its weight.

As always, what conversation about top-heaviness is complete without a mention of the mega-caps.  That group of stocks are some of the largest holdings in NANC.  Microsoft (MSFT) is the single largest with a 7.44% weighting followed by 6.1% from Amazon (AMZN), 5.1% from Apple (AAPL), and 4.7% from NVIDIA (NVDA). Using our Custom Portfolios tool, below we show the 26 holdings of NANC that currently account for at least 0.5% of weight. Continuing its relentless rise, NVDA is of course the best performing one of those stocks and is deeply overbought alongside most others on this list.

Shifting over to KRUZ, as previously mentioned, weights are distributed a bit more evenly. As such, below we show the 28 stocks with weights that are above 1%. The largest holding is Intel (INTC) at a 2.35% weight. Albeit a big drop down the market cap ladder, HVAC company Comfort Systems (FIX) is the next largest holding at 2.24%.  That comes as the stock has experienced an impressive rally of close to 40% in the past month alone.  ConocoPhilips (COP) is the only other stock with a weight of more than 2%, while Accenture (ACN) is the next largest at 1.99%.  While further down the list in terms of its weight, mega caps also make this list with NVIDIA (NVDA) and Amazon (AMZN) on the board.

NVIDIA (NVDA) is up nearly 2,000% over the last five years, but would you believe that there’s another stock — a non-AI stock — that’s up even more?

As shown below, while NVDA is up 1,937% since February 2019, cosmetics-maker e.l.f. Beauty (ELF) has that number beat with an even bigger gain of 2,639%!

While the two are in completely different industries, one thing they have in common is their penchant for reporting earnings triple plays.  As a reminder, an earnings triple play occurs when a stock reports earnings and 1) beats analyst EPS estimates, 2) beats analyst sales estimates, and 3) raises forward guidance.

As shown in the snapshot from our interactive Earnings Explorer below, NVIDIA (NVDA) has now reported five earnings triple plays in a row.

e.l.f. Beauty (ELF) has that topped, though, with seven triple plays in a row dating back to August 2022!

If you’re interested in reading about more stocks that have recently reported earnings triple plays, start a Bespoke Institutional (All Access) trial today and access our latest Triple Play Report (thumbnail preview below).

After some weakness overnight, prices in the crypto space have seen a significant turnaround today.  Bitcoin, for example, has rallied nearly 5% from its lows earlier in the session and is back to new 52-week highs.  When the Bitcoin ETFs were first launched back on January 11th, prices immediately dropped by more than 20% in what looked like another sell-the-news event surrounding a Bitcoin milestone. As shown in the chart, though, in just the last month alone, the largest cryptocurrency has rallied more than 25%.

The rally in Bitcoin has also helped to dig it out of the hole it has been in for more than two years. After falling just short of $68,000 per coin in November 2021, bitcoin declined by more than 75%, but after more than tripling in less than 15 months, it is now just a little bit more than 20% from its prior all-time high. Will 2024 be the year?

Even more impressive than the recent rally in Bitcoin has been Ethereum’s run. Over the last month alone, the second-largest crypto has rallied 39%. That’s more than Nvidia (NVDA)!  Despite the monster rally over the last month, though, Ethereum remains 35% below its November 2021 high of $4,800.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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On This Day in History:

These Teenagers Know More About Investing Than You Do (WSJ)
Teens, with the help of their parents, are venturing into the world of investing, owning shares in major companies like Tesla, Apple, and Amazon.com. The number of custodial accounts at Schwab is up from 120,000 in 2019 to more than 300,000 in 2023. It’s part of a trend that originated during the pandemic when new investors began trading to capitalize on the market’s downturn. Hot tech stocks that today’s youth know well have also brought attention to the benefits of investing. Many are even learning about investing through the Internet’s influencers on platforms like YouTube. [Link]

You can put a price tag on the value of a personal finance education: $100,000 (CNBC)
A personal finance class in high school can yield a lifetime benefit of approximately $100,000 per student by teaching crucial financial management skills, such as avoiding high-interest debt and improving credit scores. This knowledge not only benefits the students but also has a positive ripple effect on families and communities. Many school districts are even requiring the classes as research links financial literacy to significant improvements in financial well-being, including higher savings rates, better credit scores, and lower delinquency rates. [Link]

AI & Technology

Generative AI’s environmental costs are soaring — and mostly secret (Nature)
With all the hype behind AI, it doesn’t sound like anyone wants to address the elephant in the room. OpenAI CEO Sam Altman has acknowledged the AI industry’s looming energy crisis, noting the substantial power consumption expected from future generative AI systems. Without a significant energy breakthrough, AI’s energy demands could outpace current systems. The environmental impact of AI extends beyond energy to include significant water use for cooling data centers, as seen with OpenAI’s GPT-4 and other large models from tech giants. There’s tons of work to be done, especially coming from Altman who has proposed massive investment to fund new AI projects. [Link]

AI Will Transform the Global Economy. Let’s Make Sure It Benefits Humanity. (IMF)
The advancement of artificial intelligence (AI) presents a dual-edged sword: it has the potential to significantly enhance productivity and economic growth globally but also risks replacing jobs and exacerbating inequality. According to IMF research, about 40% of global employment could be affected by AI. Within countries, AI could increase income disparities, benefiting those who can utilize AI effectively while disadvantaging others. The IMF has developed an AI Preparedness Index to help countries assess their readiness for AI adoption, highlighting the need for targeted investments in digital infrastructure, education, and regulatory frameworks to ensure AI benefits are broadly shared. [Link]

Foreign Affairs

How U.S. Pressure Helped Save Brazil’s Democracy (Foreign Policy)
Brazil’s federal police recently raided former President Jair Bolsonaro and his allies for allegedly plotting a coup after his 2022 election loss. Amidst these developments, US President Joe Biden’s targeted pressure on key Brazilian officials played a role in upholding Brazil’s democracy, ensuring a peaceful power transition. Foreign policy has had much of the spotlight in the US during this election year, and this was a win for the US in an area that has otherwise faced heavy criticism. [Link]

Megaprojects in the Desert Sap Saudi Arabia’s Cash (WSJ)
Saudi Arabia’s ambitious Vision 2030 projects, including massive property developments, are driving the kingdom to increase its borrowing and consider another sale of Saudi Aramco stock due to dwindling cash reserves in its sovereign wealth fund. These costly initiatives, aimed at diversifying the economy away from oil, are putting financial pressure on the country amid moderate oil prices and high-interest rates. [Link]

Housing

How the housing industry is working to stop energy efficient homes (Washington Post)
North Carolina developer Ron Jackson argues that tightening energy efficiency building codes would make housing unaffordable for many Americans by significantly increasing construction costs. The regulations are claimed to inflate the upfront costs of new homes. However, critics and some green builders contest these claims, pointing out that the proposed energy efficiency measures would increase costs by far less than the industry states and would pay off over the long-term through lower utility bills. [Link]

End of an Era

Death, Lonely Death (Crooked Timber)
Launched in 1977, Voyager 1’s journey through the Solar System is nearing its end as it faces system failures billions of miles from Earth. After surpassing its original three-year mission by decades and making groundbreaking discoveries including the first close-up photos of Jupiter’s moons and entering interstellar space in 2012, the spacecraft began sending back unintelligible data in December 2023, indicating possible software or hardware issues which efforts to resolve haven’t worked. [Link]

Vice Media stops publishing on website and cuts hundreds of jobs (BBC News)
A lot is going on in digital media these days, especially with the rise of AI and more advanced technology. Vice Media filed for bankruptcy in the US in May and is now laying off hundreds. Vice will collaborate with established media firms for content distribution, citing the current model as cost-ineffective. It marks the end of an era in many ways, as Vice had several notable moments including documenting terror groups in Syria and Dennis Rodman’s relationship with North Korea, to name a couple of examples. [Link]

Strawberries

How Driscoll’s Reinvented the Strawberry (The New Yorker)
Driscoll’s, which holds a major stake in the US berry market, is exploring the introduction of unique strawberry varieties to appeal to new consumer segments, such as millennials who are more open to trying unconventional foods. Facing competition from the University of California Davis’s breeding program, Driscoll’s aims to maintain its market dominance by developing proprietary berries and packaging, despite challenges such as labor shortages and diseases. [Link]

Sports

What Happened to Baseball Jerseys? (The Atlantic)
They’re thin, poor fitting, the colors are off, the spacing is wrong, and they look downright fake. Those are some of the concerns with the MLB’s new Nike uniforms for the upcoming season. If you haven’t heard or seen the news and memes online, the new jerseys have become very unpopular, very quickly. Not only do players and fans disapprove, but they’re expensive for fans who would like to purchase them for casual wear. Unfortunately, some of the measures to enhance the performance of the gear, as well as cut costs, have weighed on the quality of the product. [Link]

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