Bill Ackman's Nike Investment and Market Trends Analysis

Bill Ackman leverages Nike's CEO change for potential profit amid a recovering consumer market.

### The Running Boom and Corporate Leadership Changes: Insights on Nike and Starbucks
* 🏃 Bill Ackman, often referred to as the "little Buffett," made notable investments in Nike, which has recently faced challenges, including a **-2% return this year**, contrasting sharply with Asics' impressive **166% rise**.
* 📈 The running boom has gained traction globally post-COVID, leading to a **surge in demand for running shoes**, with popular brands like Asics and Hoka One One commanding prices **over 400,000 won** due to their popularity.
* 🔄 Nike's stock has seen a **significant drop of 20%** this year, prompting a CEO change after a period of stagnation under John Donahoe, whose leadership resulted in a **-1% return over five years**, failing to keep pace with inflation.
* 💼 The new CEO, a 32-year Nike veteran, is expected to **revitalize the company with a lucrative compensation package**, including performance bonuses tied to **stock price increases**, reflecting the **capitalist nature of American corporate structures**.
* 💡 As interest rate cuts begin, consumer stocks like Nike and Starbucks may experience a resurgence, as lower rates typically **enhance consumer spending power**, encouraging purchases of **discretionary items**.
* 📊 The stock market is showing signs of recovery, with the **Consumer Discretionary ETF gaining momentum**, while companies like Visa and MasterCard are benefiting from **increased consumer spending**, suggesting a **potential thaw in the frozen market**.
* 📚 Investors should remain cautious and avoid blindly following trends, as even prominent investors like Bill Ackman engage in **short-term trading strategies**, emphasizing the **importance of informed decision-making** in volatile markets.
* 🔍 For those interested in navigating the current investment landscape, insights and strategies are available in the **U.S. Stock Masterclass**, which addresses key questions regarding **stock selection during the interest rate cycle**.

Let's talk about Bill Ackman, the little Buffett. Bill Ackman had made a purchase some time ago, which I mentioned not long ago. It's been about a month since he bought Nike back in August, and I believe some of you might remember that. However, Nike has had some issues this week, so I wanted to discuss that briefly. But I won't just talk about Nike; since interest rate cuts have begun, consumer stocks might also perform well, so I'll touch on that as well.

Before we dive in, have you noticed the running boom that's been all over the news lately? There’s been so much talk about running crews. After COVID, people were playing golf, then tennis, and now running is the trend. Everyone is buying running shoes, but it seems that many popular models are sold out. If you look back, I had previously...

When I introduced Nike, I also talked about Asics. Asics is a company listed in Japan, and individuals can invest in it. As you can see, the stock price has increased since then. I think I introduced it around the first half of the year, and now it’s at 166.3. Isn’t that amazing? While Nike’s return this year has dropped by 2%, Asics has risen by 166%. The most recent articles also mention that Asics running shoes are currently gaining popularity in the domestic market. Typically, Nike sneakers are a bit pricey; if we consider them to be around 200,000 won, Asics running shoes, which are on the right side here, and other trendy running shoes like Hoka One One are even over 400,000 won, and people say they have to pay extra to buy them. In places where shoes are traded among individuals, it’s really hard to find them, which is a trend in itself. So, typically, Nike running shoes have also been popular.

On the right, you can see that On Holdings, which owns the brand On Running with a 166% increase, has a stock price that has risen by 85%. Deckers, which owns Hoka, is a well-known company that is publicly listed in the U.S., and its stock has also increased by 35%. This year, both the S&P 500 and Nasdaq have not performed well, with big tech companies struggling as well. The running boom is not just happening in Korea; it seems to be a global trend. The performance has been remarkable, while Nike's stock has fallen by 20%. I was watching how this would unfold, and eventually, with the change in Nike's CEO, the stock surged by over 99% in weekly terms. I wanted to discuss this story because it's quite interesting. If you look on the left, you can see Nike's stock performance over the past five years during the tenure of the current CEO, John Donahoe. Ultimately, while the CEO may feel unjustly treated, the company has experienced a remarkable turnaround.

There were periods of increase, but now, after five years, the return is not only stagnant but also at -1%. From the shareholders' perspective, if you think about it, that means it hasn't even kept up with inflation. Over five years, there are stocks that have doubled, and when you consider the rate of price increases, this five-year stagnation is obviously a significant loss. You could have just put your money in a savings account. This is a retrospective observation, but that's why the shareholders are frustrated. They are so upset that, in the end, they decided to replace the CEO as an extraordinary measure. However, this new CEO is actually someone who has nothing to do with Nike. From the moment he took office, there were questions about why Nike chose a CEO who knows nothing about sports. This person is a typical consultant from a consulting firm. For instance, there's a consulting firm called Bain & Company, which deals with online payment and electronic commerce companies like eBay.

They hired someone who had gone through a consulting firm at a high price. At that time, they were brought in with a total compensation of 50 billion won, including salary and bonuses, but it is now evaluated as a somewhat failed recruitment. Recently, there was an assessment in the foreign press calling him the man who made Nike look uncool. This means he is seen as the one who turned Nike into an unattractive company, and the criticism has been quite intense. Ultimately, the CEO was replaced. It's not just talk; if you look at the performance, you can see the growth rate has been steadily declining. As the growth rate fell into negative territory, it seems the board decided to let him go. The new replacement is a veteran from Nike who knows the business well. Previously, they had brought in an external hire, but now they have appointed someone who has worked at Nike for 32 years. Starting as an intern, they have overseen brand marketing.

Do you know Nike well? The person who used to manage Nike's famous Jordan brand and even served as the head of the consumer division has been brought back after retiring in 2020. Nike is now offering a base salary of 1.5 billion to 2 billion won, performance bonuses, long-term incentives, and stock options worth 3 million dollars. They are providing an enormous amount of money to bring him back. If you look at this, you can see that American companies strictly adhere to capitalism. Performance bonuses are tied to specific metrics; if the stock price rises above a certain level, bonuses are awarded, and if the company's performance improves, bonuses are given as well. Since they even offer stocks, it’s natural for executives to want the stock price to rise. So, you could say that this is a way to boost stock prices. The CEO’s expectation is clear: improve performance and raise the stock price.

They must be doing this. They brought in someone with an enormous amount of money. So now, we have a 32-year veteran, but can the Nike man really make a difference? This is what happened this week. Also, the topic that is being discussed in the market again is Bill Ackman's involvement with Nike. I noticed that this was mentioned in a video I introduced on August 11. At that time, I pointed out that Bill Ackman made a purchase, and after he bought shares, there would be expectations of a CEO change and an increase in shareholder value. This is typically why hedge funds buy shares. They purchase undervalued stocks, then flood the media with articles about their purchases or apply pressure on the board to engage in a management battle, or replace the CEO or executives. When the stock price rises, they take their profits.

Let's run away. It can now be referred to as a 'scam' and we can just take our profits and leave. If we interpret this, it is highly likely that they were informed about the CEO change a month in advance. I don't want to speculate recklessly, but if they weren't aware, it’s also possible that they applied pressure for the CEO change. Wouldn't that be possible? Now that they have become shareholders, they might have colluded or persuaded members of the board, discussing that if they want to raise the stock price, they need to replace the management. In any case, it seems quite likely that they were aware a month in advance since they bought the shares then. So, we can see that Little Buffett is currently making decent profits from buying Nike. Thus, we should also keep an eye on the buying trends of hedge funds and investment moguls.

There is a reason for observing this. That's why I'm looking into it like this. In fact, when I introduced it back then, I mentioned that Starbucks was the same. If I briefly talk about Box, at that time, Elliott, a typical hedge fund, quietly accumulated shares after selling off Starbucks. These activist funds are often referred to as eagles on Wall Street. They gather their shares quietly, like eagles pecking at their prey, and then suddenly, they explode the news in the media, putting pressure on the management to change the CEO. At that time, Starbucks also changed its CEO. Since then, the stock price has continued to rise. The CEO change back then led to a 20% increase, and now there is renewed interest in this CEO, who is set to receive an annual salary of 100 billion won.

They made a decision, and isn't it amazing that it's with Starbucks? The base salary is around 2 billion won, which is similar, but they also provide cash and stock options worth 75 million dollars as performance incentives. What I mean is, if you raise Starbucks' stock price, you'll receive a tremendous amount of money as an incentive. Now, this is a star CEO who has previously increased the stock price of a company called Polera several times over. In his previous company, he earned around 20 to 30 billion won, but they brought him in with a salary of 100 billion won. It's interesting because the U.S. has a professional management system, so these situations are quite fascinating. They have recruited someone who can raise the stock price. To win his favor, they even included in the contract that a private jet would be provided for commuting. This means he can freely travel between the West and East coasts of the U.S., with a private jet capable of flying up to 1,600 kilometers, all to secure his recruitment.

Now that it has happened, shareholders are quite expectant, thinking that something will be done. So, the new Starbucks CEO has sent out a message saying that we should completely return to our original ways and change everything. This will also raise expectations. I have introduced companies like Nike and Starbucks, which have both changed their CEOs, but the issue is not just about the CEO changes. It's actually about these representative consumer goods benefiting from interest rate cuts. Why are consumer goods benefiting from interest rate cuts? When interest rates go down, it tends to have a stimulating effect on the economy, increasing liquidity, which in turn improves consumers' financial situations. This means that people might buy an extra cup of coffee they wouldn't have otherwise, or when meeting friends, they might enjoy a coffee from Starbucks. They might also consider buying Nike shoes or clothes during gatherings with friends.

The frozen consumer market may start to thaw, and representative consumer goods stocks are Nike and Starbucks. This is not something I have decided; it is how they are actually classified. Therefore, both Nike and Starbucks are experiencing CEO changes, coincidentally suggesting a fresh start. With the current interest rates and the cycle in the U.S. starting, these stocks, which have seen significant declines, also have good recovery potential and momentum. It seems like a growth engine is developing, and I cautiously think that the worst may be behind us. Additionally, other representative consumer goods companies like Tesla and Amazon are very sensitive to interest rates. Naturally, as Amazon is an e-commerce company, if people don't have money, they won't consume. However, if they have a bit more financial flexibility, they might buy one or two items, which will positively impact Amazon's performance.

It will get better. The companies I have listed here are part of the consumer ETF, and their performance has started to improve this year after being quite sluggish. It is gradually getting better, so it is worth paying attention to. Payment companies like Visa, MasterCard, and Max are also starting to rise. Why is that? Naturally, as consumer spending increases, people will use their cards more, which could improve the performance of card companies. But if a recession hits, isn’t that the end? It could be, but if a recession does not occur, the chances of continued growth are higher. Even if a recession does happen, interest rates might be lowered more quickly, leading to more liquidity in the market. Just like during the COVID-19 pandemic, consumer-related stocks could perform better in a liquidity-driven market. It would be good to keep this in mind as well. So while AI stocks could also be good, interest rates and...

Since the cycle has started, it is important to continuously monitor economic consumer goods, interest rates, or beneficiary stocks from a distribution perspective. It wouldn't be a bad idea to allocate some funds. I'm not saying to buy everything, but it's fine to diversify by investing in one or two economic consumer goods that you like, which could also include ETFs. Of course, even big names like Bill Ackman often engage in short-term trading, so just because Little Buffett bought something, it doesn't mean you should blindly follow suit. You need to be very cautious about such indiscriminate trading. What I introduce is for your reference, and I do not recommend a strategy of blindly following others. This is something I mentioned in my previous video: Bill Ackman, for instance, has a history of buying Nike when it dropped in 2017 and selling it all off just three months later. So now that it has recently risen, he might sell it all again and make a quick exit.

Institutions are only concerned about generating profits, so I won't morally judge whether they are good or bad; I will just point out that these individuals are engaging in activities to make profits. So, you should keep that in mind. Next, the U.S. interest rate cut cycle has finally begun. It has been a whopping two years and six months since the last one. The interest rate hike cycle lasted from March 2022 to September 2024, and now we are entering a period where rates are starting to decrease. According to the chart I have shown, this corresponds to the period of interest rate cuts. From an investor's perspective, what many are likely curious about is how much stock to buy during these interest rate cycles. This is what I have included in my recently launched Somong's U.S. Stock Masterclass, which addresses the questions that subscribers are most interested in. Additionally, we are currently experiencing increased volatility due to concerns about economic slowdown.

There may be times when you want to distinguish whether the stock market is undergoing a correction or if a real crisis is beginning. Some people say one thing, while others say another. To help determine whether the market signs are genuinely unfavorable, I strongly recommend a crisis forecasting indicator. I have included it in the U.S. Stock Master Class. This will allow you to discern whether we are facing a real or fake crisis, especially as interest rates rise and during the correction phases that come intermittently. I have packed this know-how into the U.S. Stock Master Class. If you want to study these aspects properly and try investing, I will leave a link in the video description and comments for you to check out. Lastly, having invested in U.S. stocks for nearly ten years, I have noticed what my subscribers are particularly curious about and what assistance they need.

하시는지 잘 알고 있기 때문에 이 실전 투자에 꼭 필요한 내용 위주로 이 강의에 담았습니다. 그래서 이 영상의 더보기 댓글 링크를 참고하셔서 한번 살펴보시면 투자에 도움이 되지 않을까 생각합니다.

월가 큰손들의 베팅 결국 맞았다? 금리인하주 부활 시작일까

비즈니스/협업 문의 : somongmanager@gmail.com
카페 : 소몽 라운지(cafe.naver.com/sosumonkey)


소수몽키

Bill Ackman's Recent Investments and the Running Boom

Bill Ackman recently purchased Nike, but the company has faced challenges, while Asics' stock has surged by 166% since the first half of the year.

The running shoe trend has become popular globally, with high demand and sold-out popular styles.

Other brands like On Holdings and Deckers have also seen significant stock price increases, while Nike's performance has been lagging behind.

Nike's CEO Turnaround: From Stagnation to Rehire

Nike's stock return has been stagnant at -1% over the past five years, failing to keep up with inflation and causing frustration among shareholders.

The company's decision to hire a CEO with no sports background from a consulting firm was met with criticism, and his tenure was marked by a declining growth rate.

Nike has now rehired a veteran with 32 years of experience at the company, offering a substantial salary and performance incentives to boost the stock price and improve overall performance.

Nike's Leadership Change and Hedge Fund Influence

Nike has brought in a new CEO with a significant financial investment, raising questions about his ability to revive the company.

Bill Ackman's recent investment in Nike has sparked discussions about a potential CEO change and increased shareholder value.

The tactics of hedge funds, including accumulating undervalued shares and pressuring for management changes, suggest they may have played a role in the CEO transition at Nike, similar to their previous influence at Starbucks.

Starbucks has offered a new CEO a package worth 100 billion won, including cash and stock incentives, to boost the company's stock price.

The CEO, known for increasing stock prices at Polera, is being attracted with a private jet for commuting between the U.

The leadership changes at Starbucks and Nike, along with potential interest rate cuts, are expected to improve consumer spending and drive a recovery in their stock prices.

Positive Trends in Consumer Discretionary Stocks

The Consumer Discretionary ETF is showing positive returns this year, with companies like Visa and MasterCard benefiting from increased consumer spending.

The potential for a recession could impact these companies, but a quick interest rate cut may provide market liquidity and support consumer-related stocks.

interest rate cut cycle has begun, raising questions for investors about which stocks to buy and how much to invest.

Distinguishing Stock Market Corrections from Crises

It's challenging to determine if the stock market is in a correction or a real crisis, with differing opinions making it confusing.

A crisis forecasting indicator is recommended, available in the U.

Stock Master Class, to help discern the interest rate cycle's impact on the market.

The lecture focuses on essential content for practical investing, with links provided in the video's description and comments for further assistance.