What do Bitcoin, Abercrombie, and Dick's Sporting Goods have in common?

Great performance can come from the most unlikely of places

The likelihood of finding a stock that outperforms Bitcoin at the right timeframe is incredibly hard. It’s outperformed every asset class in the 15 years since inception.

If you’ve been a member of this newsletter, you also know how outspoken I’ve been about having a % of Bitcoin in your investment portfolio (even if it’s just 1%). Please refer to my latest piece about that here

However, it's also obvious that there's many public companies out there that are great investments outside of Bitcoin. In the last 5 years, there’s been no shortage of companies with great returns. For the most part, the composition comes from your tech and semiconductor companies:

1. Nvidia NVDA 0.00%↑ +1988%

2. Tesla TSLA 0.00%↑ +781%

3. Amazon AMZN 0.00%↑ +103%

4. Facebook META 0.00%↑ +191%

5. Alphabet (Google) GOOGL 0.00%↑ +135%

6. Advance Micro Devices AMD 0.00%↑ +723%

7. Super Micro Computers SMCI 0.00%↑ +5,378%

The nice thing about Bitcoin is that we know with near certainty it will continue to have massive returns over the long run as demand from institutions come forward and the supply shock kicks into full gear. Can't say that about individual stocks.

The following is a visual that needs to be appreciated and shared. We all know that the companies I listed above are innovators and disruptors of frontier technologies that include: digital tech via Internet of things (loT); blockchain; Metaverse / Augmented Reality; Artificial Intelligence (Al), including GenAI; Big Data; Cloud Computing.

Now, what if I told you that the specialty retail store where your dad gets his hunting or fishing gear has outperformed Bitcoin since March 20, 2020 and that the retailer you probably hated as a teen because of its perceived exclusivity, its mascot, the moose, once emblazoned across nearly every garment, has also outperformed Bitcoin since March 20, 2020. Let’s be honest, you’re also probably an adult that shops there now. Some real head-scratchers, huh? I bet you also didn’t know they were publicly traded and investable companies.

Yes, Dick's Sporting Goods DKS 0.00%↑ and Abercrombie & Fitch ANF 0.00%↑ have outperformed BTC with the following % returns:

1. ANF 0.00%↑ +1,355%

2. DKS 0.00%↑+1,156%

3. Bitcoin +1,003%

   

Absolutely incredible job by the management teams of these 2 companies (both ran by women, mind you). Read the Fortune op-eds I’ve linked to the CEOs below

• CEO of Dick’s - Lauren Hobart

• CEO of Abercrombie - Fran Horowitz

CEO of Dick’s

CEO of Abercrombie

Never would have thought consumer discretionary / specialty retail would be such outperformers, especially after the shock the industry enduring during the pandemic. It highlights how important execution is after suffering a setback, these 2 companies took that time period as an opportunity to re-think their business models, which have been seen as favorable by shareholders.

Institutional ownership is an important metric that I recommend you ALL should use when it comes to owning a stock.

• Dicks is 80% institutionally owned

• Abercrombie is 95% institutionally owned

In the world of investing there are 2 parties: retail and institutions. A stock that experiences volatility (meaning price fluctuates up and down alot) is typically majority-owned by retail. Retail is people like you and me. And it’s important to understand no matter how much $ we have invested in a stock, it’s near impossible for retail to actually move the price of a stock with any buying or selling.

A perfect example of this is SoFi Technologies SOFI 0.00%↑, a frustrating stock to own because it experiences wild price fluctuations of +/- 20% often. Why? Institutions only own 39.8% of the stock, meaning that retail owns 61.2%. Any stock that is majority owned by retail is subject to “manipulation” by hedge funds and other large institutions as they know they can control and move the price. It’s just how it is.

Fintel - SoFi ownership % breakdown

Once institutions start to accumulate shares in a company and get to 70-90% institutional ownership it becomes MUCH HARDER for the price of a stock to go down and experience these violent price fluctuations. That’s why the big tech stocks I named above have been so resilient and have continued to go up without any meaningful correction as institutions continue to buy them.

How do you find this information? I use Fintel to look for this metric. It’s a great tool to see public company data. Just type in the ticker symbol of a company/stock you want to research and you can get a clean overview of the financials, ownership, dividends, earnings dates, etc

READ the below if you haven’t yet.