Transcript
Ann Berry (0:01)
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Co-host (possibly a financial analyst or commentator) (0:17)
Protein waffles, protein drinks, protein. Well, everything yet one protein OG shares are down over 75%. We survey what's happening at the parent company of PowerBar, Mario said. Let's go to the theme theatre. AMC just posted its biggest Easter weekend in its history. We explore why the success relied on more than simply ticket sales and shareholder letter or election manifesto. There's a lot to unpack in Jamie Dimon's annual letter as we break it all down. Monday, April 6th it's Brew Markets Daily and I'm Ann Berry. Well, more market details to come, but first annual shareholder letters. Missives from the most powerful market movers in the world, eagerly awaited by investors and meme makers alike. And until now, with Warren Buffett as the undisputed king of these letters, with his candor about mistakes, detailing capital allocation or strategic errors, emphasis on long term focus in his case with troves of cash held at Berkshire Hathaway and of descriptions of internal operations, at least at Berkshire, best summed up as just exceptionally lean. Jeff Bezos letters were scanned with eagle eyes when he wrote those for Amazon. Howard Marks notes from the top of investment firm Oaktree are followed closely. And the writing of blackrock's Larry Fink always makes a splash. But there is one person to whom Buffett's baton has passed and it is, in my opinion, JP Morgan CEO Jamie Dimon with relative youth but wisdom at the age of 70, a voice known to be tracked by President Trump. Viral social media moments from calling crypto a quote pet rock to slamming back to office complaints. And with a more than 3 1/2 trillion dollar balance sheet, Wall Street's proxy for power Dimon's global sway is hard to overstate, which is why his annual shareholder letter, which came out today, caught our eye. We thought to share not only the highlights of its 49 pages, but most importantly, our suspicion that the document portends a path to somewhere else. I'm going to get back to that in just a moment. Well, Diamond's letter is heavy on historical context. In the Same Year of America's 250th Birthday, J.P. morgan celebrates the 227th anniversary of its founding in April 1799. Heritage and longevity to applaud. But there's a lot of focus in the letter on looking forward, looking ahead to innovation as well Dimon gives a nod to what he calls new challenges in his competitor set, explicitly calling out block, revolut and Stripe as amongst those who scaled in digital and blockchain. On the other end of the spectrum, IRL is back gets emphasized as an edge in banking, with JP Morgan expanding branch networks in rural markets to capture share. Meanwhile, though, one urban center gets a warning. In the same paragraph that Dimon highlights JP Morgan's expansion in Texas, he writes, I'm reminded that in the 1970s, nearly half of the 125 Fortune 500 companies based in New York City left. While mergers accounted for some departures, the price of doing business in New York City accounted for most cost of taxes, office rents, labor and so on. No city or company or country has a divine right to success. While moving through the letter, AI does get a shout out, though it's a little bit generic, described as likely to do great things like cure cancer and to create new jobs while displacing others, though diamond does explicitly call for policies to quote properly incent retraining, income assistance, reskilling, early retirement and relocation for those whose job might be adversely impacted by AI. Well, this quotation is in the spirit of what really caught my eye about this entire letter, because it reads like one big policy document, first calling out major issues. Those would be geopolitical instability, high sovereign deficits globally lofty asset prices and mispriced risk, notably in the $1.8 trillion private credit market. As a side note, Dimon does explicitly say that in the great scheme of things, his words, private credit probably does not present a systemic risk. Trade battles, US China strain and cyber risk pop up in the diamond survey of things to fix, as do US Government waste and spending, restrictive mortgage rules that hamper housing affordability, unreliable R and D frameworks for innovation, bank regulations that sprout shadow lenders, and weakness in Europe, especially weakness in Europe. And I'm almost out of breath because he covers so much in terms of what he thinks needs to be remediated. But the really noticeable thing about this letter, diamond goes on to make policy recommendations to solve several of these issues. Yes, he describes some actions for JP Morgan to take on directly, such as providing capital to strategic sectors like frontier Technologies, or to support training, community engagement and financing. Again, all for JP Morgan to get involved with with commercial opportunity there, of course, but all in the cloak of a policy belief that, quote, the United States must maintain its preeminent economic position in the world, which also requires reigniting the American dream. Many of the policy ideas in his letter are just too big for any one bank or even the markets as a whole to enact. He says America needs Europe to succeed, to rebuild its military and defence industrial base. So Dimon says in his letter, quote, we need one big beautiful trade deal for Europe and that the United States must maintain the premier military force in the world. Most notably, Jamie Dimon gives the shareholder letter OG a shout out. He says, quote, as my friend Warren Buffett points out, that his company's success is predicated upon the extraordinary conditions our country creates. He is right to have said to his shareholders that when they see the American flag, they all should say thank you. Dimon is talking about saying thank you by corporations paying their fair share of taxes, but he clearly has a view on the military, foreign policy and trade conditions that the US Creates as well. Well, JP Morgan's investors certainly like the results that came out today and they liked what they read because shares in America's biggest bank did come up around 1% up by the way, a bit more over the course of the trading session. But my own personal read of all this is Diamond 2028. That shareholder letter to me reads like an election manifesto. Coming up, a listener wants to know why the stock price of protein giant Bell Ring brands is in steep decline. So we take a look. And another day, another twist in Paramount's takeover of Warner Brothers Discovery, this time with new backing from across the globe. But first, a word from our sponsor, Charles Schwab. Trading at Schwab is powered by Ameritrade, unlocking the power of Think or Swim. 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