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June Monthly - 2022

The following newsletter is sponsored by Grass Clippings. We highly recommend drinking a warm glass of RC Cola before reading. *As always, none of the below information has been fact checked or confirmed in anyway.

"Doohickey"

/ˈdo͞oˌhikē/- North American Origin

1. Pulling a fast one. An act of trickery. 

"Them gals at the bar pulled an ol' doohickey on me last night."

2. a small object or gadget especially when the speaker doesn't know or cannot remember. 

"Hey head out back and grab me one of them doohickeys, so I can fix here Bessie up." 

With that said, welcome to the Grass Clippings Monthly.

________________________________________________________________________

In this issue: 

Billy's Monthly Insights: *observations from the month of May

  1. Show Me The Money
  2. Wedding Watch - Bullish & Bearish 
  3. $25 - Come On Warren
  4. A Star is Born

Updates from the Shop 

  1. Shop Summer Schedule
  2. New Products
  3. "Pay Ya Bets"
  4. Summer Sale

Investing 101  *a Hail Mary approach 

  1. May Misery
  2. CFO Report 
  3. The Splash Brothers

 

1. Show Me the Money

Folks we are witnessing the dawn of a new age. College athletics, predominantly football and basketball, are set to see inflows of new money unlike we've ever seen in sports. It's like turning on the engine of a Mclaren GT3. Zero to 60 in 3.2 seconds. You can argue that money has been luring players to certain schools illegally for years now, but the NCAA has opened the floodgates and athletes are set to be paid like pros. College sports is beginning to look like pro sports free agency. 2022 saw the most college football players enter the transfer portal since it's creation - 2,538 players in total. It's even worse in college basketball - 31% of all mens players entered the portal. Over the next two years, we are going to witness the uprising of the biggest threat to the NFL - Power 5 College Football. 

The NFL continuously sees an influx of talent each year because players are jumping to the pros so they can cash in on their talent. What happens when college players begin making more money than their pro counterparts? It's widely thought that high school quarterback sensation, Archie Manning, could garner between $5 - $10 million dollars per year from whichever school he decides to attend. When you compare that to the 2021 NFL rookie quarterback contracts, you begin to see the problem. #1 overall pick in 2021 Trevor Lawrence signed a 4 year $36.79 million dollar deal. If the projections are 

correct, Archie Manning could make close to $40 million dollars over four years playing for a school like the University of Texas. NFL teams have to abide by salary caps that keep player salaries in check whereas College Athletics are operating in a true free market (for now). When you look at those numbers and then compare the profitability of big time Power 5 football teams against NFL teams you can see where a future problem could unfold. University of Texas was the most profitable college football team earning $104 million in profit last year whereas the number 1 NFL team, the Cowboys, had an operating income of $280 million. The gap is closing. Some pundits have asked the question - what if Power 5 football decided to breakaway from the NCAA. Hell start their own XFL? It might not be as crazy as it sounds. I'd argue college football fans are more passionate than NFL fans and you know what they say "money talks". Nick Saban sure doesn't like what NIL deals are doing to the game. Or the fact that he is no longer the top dog paying players. See below where he roasts Jimbo Fisher and Texas A & M for paying every single recruit in their #1 2022 recruiting class. College coaches rarely take shots at other coaches especially a mentor roasting a mentee and vice versa. Where there's smoke there's fire. Buckle up. This is only the beginning.

 

2. Wedding Watch - Bullish & Bearish 

Many schools of thought within the golfing community believe that marriage and kids have a negative impact on a golfer. In fact, it's believed that a marriage adds two strokes to a golfer's handicap, a first child adds another two, and any children or marriages beyond that has less of an impact. Nowhere is this thesis more apparent than on the PGA Tour. Hell, there's a lot of money to be made if you can accurately track wedding season. It truly is fascinating if you look at players performances relative to their weddings and or kids. Rickie Fowler seems to be headed for retirement ever since he tied the knot. Dustin Johnson was fresh off a wedding at the PGA Championship where he missed the cut. Brooks Keopka has become almost irrelevant since proposing. Rory Mcllroy can't get over the hump. Smylie Kaufman is now in the broadcast booth and Spieth has the most brutal preshot routine seen in quite sometime. Marriage isn't for the faint of heart. With all that being said, the next in line for a career decline is the most recent major champion. If you were watching the end of the PGA Championship closely, you would've noticed the order in which Justin Thomas celebrated his win. He hugged his dad, his mom, and then his fiancé. Folks that order is sure to change in short order. JT and his fiancee are scheduled to marry later this year and although I'm a fan of JT he's do for some serious regression. For betting purposes, below are my top 5 bullish and bearish players for the rest of the year now that wedding season is in full swing. 

Bullish 

1. Will Zalatoris - Will is now on the clock. Engaged in April he now has an 11 month window to stack some trophies.

2. Cameron Smith only has a girlfriend. Smooth sailing for the foreseeable future.

3. Patrick Cantaly a proposal may be around the corner, but for the time being he is still unmarried which makes him a dangerous player.

4. Viktor Hovland absolutely zero commitments outstanding. I expect Viktor to fully enter his prime. 

Bearish 

1.Justin Thomas  - set to be married later this year. It was fun while it lasted.

2. Brooks Keopka - the free fall has already begun. Brooks is set to be married this summer and when you pair that with his recent injuries we're looking at the backside of his career. 

3. Dustin Johnson - we're going to find out quick if Dustin really doesn't care about anything. His easy going demeanor is in for a rude awakening. Happy wife, happy life.

4. Rickie Fowler ​I really like Rickie, but I couldn't be more bearish. He now carries himself like a player who is fading into retirement. Gonna have to see some heart out of Rickie before I change my tune. 

 

3. $25 - Come On Warren

The world gathers, tunes in, and gains insight each year when Warren Buffet and Charlie Munger address their shareholders. The two are considered titans of the investing world and its usually smart to heed their advice. With that being said, Warren Buffet went off the rails in his most recent annual meeting. He claimed he wouldn't pay $25 for all the Bitcoins in the world. $25 for an asset that has a market capitalization just below a trillion dollars. Should we be concerned with Warren's health or is there more to this claim than meets the eye?

To answer the question, one must look at the whole picture. Let's dig into the Berkshire Hathaway stock holdings.  His largest portfolio holding (38% or $125 billion dollars which is $90 billion dollars more than their second largest holding) is tied up in Apple a company that literally allows Bitcoin and cryptocurrency to exist in the first place. 

Without smartphones or computers and access to the internet us retail investors wouldn't be able to interact with crypto interfaces. So an Apple permabull should also be bullish on the fastest adopted technology since the advent of the internet that is facilitated by its own devices. They should also be intrigued by the revenue they could make by further facilitating this activity. It's common sense. For an astute investor like Buffet it should be, but for some reason he abandones any rational thought when anything Bitcoin is mentioned. From an institutional perspective, colleges like Harvard, Yale, and Brown have been buying bitcoin and crypto as far back as 2018. So why the disconnect between our finest institutions and our most championed investors?

Well if you continue to investigate Warren's portfolio you'll find that his second largest portfolio holding is Bank of America and furthermore Berkshire Hathaway is the largest shareholder of the following companies: American Express, U.S. Bancorp, Bank of New York Mellon and of course Bank of America. You can begin to understand the conflict between his US Banking holdings and an alternative payment system. Again he claimed he wouldn't pay $25 for the entirety of an asset that has a larger market capitalization than his own company. I have the utmost respect for Buffet, but I ain't taking tech advice from a 91 year old from Omaha, Nebraska that lives off See's candy and Coca-Cola.

4. The Historic PGA Championship

Folks, the PGA Championship was one for the ages. Yes Mito Pereira's chilly dip drive will unfortunately put him in the hall of worst collapses in major championship history, but a silver lining would be that people will most likely remember his collapse rather than Justin Thomas' win. 

The Hall 

It's worth noting that Justin Thomas had a 1.2% chance of winning entering the final round. Hell, he even had a shank on the 6th hole and still managed to win. BUT even with all that a much more important storyline emerged...

"THE MICHELOB ULTRA GUY"

Folks, there are points throughout history where a leader and or a visionary stands out amongst the crowd. Someone who gives hope for tomorrow. You'd think by looking at the picture above it would be Tiger Woods, but no it's "the Michelob Ultra Guy". This man is now the face of Michelob Ultra and hell I'd follow him into battle.

LOOK: PGA Championship fan signs Michelob Ultra Deal after screenshot Tiger Woods goes Viral

 

UPDATES:

Folks, as we enter the dreaded summer months here in Arizona, upper management has decided that we will be closing the shop for the months of July and August. Products will still be available online, but in person transactions will have to wait until September. 

New Product Updates: 

"PAY YOUR BETS"

One thing we take very serious at the Grass Clippings shop is if you make a bet... you pay ya bet. 

Jimmy Hoselton bet Billy Dobson he could chip off the roof and make it in the Grass Clippings parking sign. 

As they say, "a dog always comes home".

 

*A throw the ball investment strategy. Imaginary $10,000 is invested each month and we track the performance. "Chicks dig scars. Glory lasts forever." - Shane Falco. In other words, this is not finical advice.

Holy Mother and Moses. The market and the Phoenix Suns took us out behind the shed and beat the living piss out of us. For starters the stock market saw it's worst declines since March 2020 during the infamous covid sell off. Hell, Target fell by as much as 24% in a day.... Then there was crypto. The Luna/UST saga stole the headlines as people watched in real time as the death spiral wiped out $60 billion dollars of crypto wealth over the course of only a few days. Things couldn't get much worse until they did. The Phoenix Suns had led fans to the alter, Game 7, and completely fled the scene. It was the fourth worst loss for a Game 7 in NBA History. For reference, Luka Donnic had as many points in the first half as the entire Suns team, 27.

Although we went through hell in May, there's something people instinctively do when the going gets rough. They overreact. Yes the Suns had a bad Game 7, but it's worth remembering the Suns beat the Mavs by 30 and 21 earlier in the series. Chris paul went from a first ballot hall of famer to a bumb in less than 2 weeks. They just won the most games in the regular season, yet blowing up the team is the only path forward. Come on now. The same hysterics play out in the stock market. I heard an analyst say crypto was going to zero and another say the stock market would collapse alongside the majority of fiat currencies throughout the world. I guess it's just human nature to predict impending doom. Well there's another camp that sees opportunity amongst the burning buildings. Warren Buffet and crew deployed $51 billion dollars during the May selloff. As seen below, don't miss the forest for the trees.

Message from Killer the CFO:

There's a first for everything, and not everything is good. Billy managed to light all $10k on fire in May betting with his heart on the Phoenix Suns taking down the Mavs. If theres 1 lesson to learn from this, it's not to let your emotions interfere with business. Billy learned this lesson the hard way.

 

Have to admit, it's hard to be optimistic looking forward to June. History tends to repeat itself, and at this point there's enough history to see a very dark pattern emerging. At the time of writing this email, just 9 hours and 8 minutes before Billys cutoff to submit his June investments, we're still not sure where the moneys being placed. Folks, this is gonna come down to the wire. Your going to have to access the investment doc below to see what direction Billy's gut takes him.

 

Investment tracker doc can be accessed here

June Allocation

1. Golden State Warriors - Series NBA Finals Winner (-115) - $10,000

Even though we lost our shorts on the Phoenix Suns last month, we can win it all back here. We're sticking with NBA Basketball. The Warriors/Celtics matchup is a pair of defensive bellwethers reminiscent of the Bad Boy Pistons. Marcus Smart and Draymond Green will have a big impact, but here I'm going with the more prolific offensive team. The likes of Steph Curry, Klay Thompson, and Jordan Poole will be too much for Marcus Smart and company. We're going all in once again this month. 

 

-Billy Dobson

Stay Grassy


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