Episode 575: Neal and Toby discuss the news of Warren Buffett announcing his retirement that’s happening at the end of the year and who will be replacing him. Then, Starbase, the SpaceX rocket-building city, becomes official in the eyes of voters. Also, Marvel sounds the alarm that’s led to Kevin Feige to step in and clean up the mess from recent box office flops. Meanwhile, the stock market and anti-venom are the weekend’s winners. Finally, what you need to know in the week ahead. 00:00 - Cinco de Mayo! 2:45 - Warren Buffett is retiring 7:20 - Starbase, USA 10:45 - Marvel overhaul 17:00 - Winner: Stock market 19:00 - Winner: Anti-venom breakthrough 22:30 - Week Ahead Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Visit https://planetoat.com/ to learn more! Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative and involves a high degree of risk. Cryptocurrency holdings are not protected by the FDIC or SIPC. APY as of 3/18/25, subject to change. *Terms and Conditions apply. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What is the significance of Cinco de Mayo?
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Warren Buffett is stepping down as CEO of Berkshire Hathaway after making a lot of people a lot of money.
Chapter 2: Why is Warren Buffett retiring and who will succeed him?
Then Elon Musk's rocket base in South Texas has gotten so big, it's officially become its own city. It's Monday, May 5th. Let's ride.
Good morning and happy Cinco de Mayo. When you're out sipping a spicy margarita later, do not tell anyone it's Mexico's Independence Day. That's in September. Cinco de Mayo commemorates the defeat of French forces by the Mexican army at the Battle of Puebla in 1862 and is mostly celebrated now in the United States by people of Mexican descent honoring their heritage.
Of course, beer companies have a lot to do with its popularity. In the 1980s, they began to leverage Cinco de Mayo in marketing campaigns, turning it into an unofficial national drinking holiday.
Yeah, now Mexico accounts for about 30% of all global beer exports and ships more than double the amount of beer as any other country. And of course, a lot of that beer ends up across the border. 97% end up in the United States. And Modelo is the top selling beer in America, not the top Mexican imported beer, the top beer in America where it's been since it surpassed Bud Light back in 2023.
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Chapter 3: What is SpaceX's Starbase and its new city status?
But the keys to the kingdom will be handed off to Abel, a Canada native and big hockey guy who grew Berkshire Hathaway's energy division into one of the leading power producers in the United States. Whatever his achievements until now, he'll have some size 21 shoes to fill. Toby, we all knew this was coming at some point, but still, Buffett retiring doesn't feel real.
It doesn't feel real. I mean, I can't imagine a world without Buffettisms, without tuning into his annual shareholder meeting. It really is just, he defines such an era of capitalism in America. He's been CEO for 55 years. He's the longest serving CEO of any S&P 500 company. And he deserved his 10-minute standing ovation because let's run through the scorecard a little bit.
Berkshire Hathaway has returned. 5.5 million percent since 1964. That's a 20% annual compound growth rate versus 39,000 percent return from the S&P 500 over the same period. So the stat that I have to quote is Berkshire could fall 99%, and he will still have outperformed over the length of his career.
And then talk about the power of compound investing, which is just such a tenet of Warren Buffett's philosophy. 96% of his net worth was accumulated after his 65th birthday. So that's just how compounding works. So there are so many insane stats. You can just keep going down. But I think that just shows how much of an outperformer he really was over his storied career.
Let's talk about one of those investments that Buffett said made more money than any other one. And that is Apple. At the Berkshire Hathaway annual shareholders meeting on Saturday before he announced his retirement, Buffett said, I'm somewhat embarrassed to say Tim Cook, the CEO of Apple, has made Berkshire a lot more money than I've ever made. Berkshire started investing in Apple in 2016.
He bought about $31 billion worth of shares. The value of that investment a couple of years later grew to more than $174 billion before Buffett started investing. selling Apple shares.
That's a neat 6Xer and kind of was a watershed moment for Berkshire Hathaway and Buffett because for so long he stayed away from tech companies and he never really did a huge investment in tech companies besides Apple. And you wonder how much that 5.5 million percent return could have been more if he had invested in, say, you know, a Facebook or a Microsoft or an Amazon.
But yes, he had a lot of good things to say, as he always does, about Tim Cook and Apple.
And then looking ahead, Greg Abel has a lot of questions that he has to answer as he steps into the CEO role. Namely, what are you going to do with this $350 billion pile of cash that Warren Buffett had been reluctant to deploy over these last few years of volatility? Who knows how he's going to actually use that? He's obviously in a good position.
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Chapter 4: How is Marvel planning a comeback after recent flops?
That means Starbase USA now has the power to levy taxes, write zoning laws, and if a pending bill passes, even shut down local public beach access during launch activities. For Elon, the move offers a way to streamline operations and possibly reduce the logistical friction that comes with being a very big private company that has huge ambitions.
For example, SpaceX has not been able to provide enough housing for workers who want to live near its headquarters. especially after a recent attempt to build more was rejected by the county. So its new identity should help fix that since state law gives wide latitude to municipalities in Texas.
Critics do worry about blurring lines between private ambition and public responsibility, especially if Starbase uses its new authority to sidestep environmental concerns or cut residents off from a previously public destination for waves and sunshine. But for many in the area, the trade-off looks to be worth it,
3,400 jobs in a budding tourism economy of people who want to stop by and watch Starship in action were enough to win over most of the dissenters, Neil.
I mean, we are so back in terms of company towns. I thought this was going to be a relic of something you just read in your history textbooks of the United States. I mean, I think we all learned in high school about George Pullman, who was the rail car magnate who started this company town called Pullman, Illinois, after himself, which was just south of Chicago. Gary, Indiana was created by U.S.
Steel in 1906. You have Corning, New York, Benville, Arkansas, with Walmart. And Elon Musk has sort of reinvented the concept of the company town for the space age. And it's a very interesting development with a lot of possibilities and also a lot of pitfalls that local residents are certainly, you know,
excited about the opportunities in terms of economic development, but also wary of, you know, SpaceX gaining control of this particular area that had been very rural, very remote, not a lot of people there. And now it's turned it into, you know, the frontier of Mars colonization, essentially.
This incorporation isn't just this get out of jail free, free pass to do anything you want, any regulations that you want, but it does give you a lot of unique authority to kind of set the rules in your developmental area, so zoning, building projects, even just... more normal aspects of life, all fall under the purview of now a mayor who is a vice president at SpaceX.
So that's where people say, is this really like this? There has to be a conflict of interest here when the literal mayor of a town is also a VP at this private company. But one of the big sticking issues was I mentioned this beach because beach access is something that should be available to a wider population.
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Chapter 5: What are the weekend's stock market winners?
So a local judge has said, hey, we've been working with you, SpaceX. There's no need to go to this step. So expect that to be kind of a hallmark issue in this push to make a public place into a private enclave for a company like SpaceX. Let's move on. When is the last time you went to see a Marvel movie? Or better yet, when was the last time you went to see a Marvel movie and actually enjoyed it?
Unfortunately for Disney, your answer probably dates back to Avengers Endgame in 2019, if you had an answer at all. But Kevin Feige, the brainchild behind the whole interconnected web that makes up the Marvel Cinematic Universe, thinks he's figured out a plan to make Marvel good again. Stop making TV shows and start making good movies.
Chapter 6: What advancements have been made in anti-venom?
According to the Wall Street Journal, Feige had recently told colleagues that keeping up with all the company's new movies and TV shows was starting to feel less like entertainment and more like homework. As the latest Marvel film, Thunderbolt, debuted to a tidy $165 million worldwide, you can see the inklings of that strategy starting to pay off.
Thunderbolts doesn't feel like most of the rest of the heavily CGI'd fare that MCU typically serves up. It's a smaller fare both in terms of feel and in name recognition. Gone are Captain America and Iron Man and in their place steps Florence Pugh as Yelena Belova in a JV squad of anti-heroes that even the most ardent of comic book fans would be hard-pressed to recognize.
But critics and fans actually like this new Marvel movie precisely because it feels distinct. Thunderbolts director Jake Schreier said, when I first started on the movie, Kevin Feige said, make it different.
Chapter 7: What should we expect in the week ahead?
It all adds up to a movie that feels like a breath of fresh air for a cinematic universe that was becoming woefully stale and represents a glimmer of a new Marvel, one that makes fewer TV shows and more standalone stories that don't require an encyclopedic knowledge of previous MCU fodder released on Disney Plus to actually understand.
You're probably wondering how I got here. Well, in 2008, Marvel releases Iron Man, and that sets off one of the greatest cinematic runs in history. From 2010 to 2019, they churned out 21 movies. Every single one of them was a smash hit. They averaged in the box office about $1 billion. And the apex of this was the crowning achievement of Avengers Endgame.
That was also the year around that time when Bob Iger, the CEO of Disney, started rolling out plans for Disney Plus, their streaming service. And he looked at Marvel and said, wow, people really like that. We should put a ton of Marvel content on Disney Plus. So he went to Kevin Feige at Marvel and said, Give me a lot of content.
So Kevin Feige and his team worked really hard to produce a ton of content, and they just got stretched too thin, and the quality deteriorated not only on TV but also in the movies. So they need to hit the reset button. It looks like we're starting to see the fruits of that labor start to come with this particular movie, Thunderbolts.
And part of the greatness of the MCU is also its biggest vulnerability in that Feige had immense creative control over everything that went through the Marvel Cinematic Universe. And so he would have the final creative say. He would have the final editorial say. He would be in the edit bay with people and saying, hey, we need to reshoot this. We need to cut this.
And so as you expand, you start to see these demands on his attention where quality starts to fall. And the quote that came out of this big Wall Street Journal piece was, The strategy just became expansion, expansion, expansion. And when there's only one Kevin Feige, that becomes an issue because he's a major bottleneck as well.
And he has told friends that he felt that the need to be an excellent corporate citizen and step up to the plate when they want to execute this expansion strategy. And it was just very obvious to anyone who went to see a Marvel movie that the quality just went off a cliff. I was talking about my experience seeing Ant-Man and Quantumania, and it was like the worst movie I've ever seen.
And that was supposed to be this next big setup for its next big expansion, set up the big bad villain. So it's just one of those things where it was too much of a good thing. And so Thunderbolts is trying to be a much different feel, a much different strategy, stop relying on the – on the big named characters of Yor and try something different.
That being said, they do still have, you know, the heavy hitters waiting in the pipeline. Robert Downey Jr. is coming back as Dr. Doom somehow in their next movie. So they are trying to recapture some of that old magic, but it's been a rough couple of years for Marvel to say the least. Up next, we have our winners of the weekend coming your way.
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