Latest / Stock Picking with Fexingo: Individual Equities, Research, and Building a Concentrated Portfolio / How JPMorgan Made the 2028 Olympics an Investment Thesis
Transcript
- Lucas: You know, Luna, when I saw the headline that JPMorgan is pouring money into the 2028 LA Olympics, my first thought was: what does a bank want with the Olympics? Luna: Honestly, mine too. It feels like a sponsorship you'd expect from a soda brand or a carmaker, not a mega-bank. Lucas: Right. But the more I dig into it, the more it looks like a deliberate bet on JPMorgan's future — not just a branding exercise. We're talking about a bank that's already up nearly a percent this week while the Dow slipped. They clearly have cash to deploy. Luna: So what's the actual thesis? Is it about the LA market specifically, or something bigger? Lucas: I think it's both. LA is a massive wealth hub, and the Olympics are going to flood the city with international visitors, businesses, and capital. JPMorgan wants to be the bank that's synonymous with that moment. Luna: Makes sense. But sponsorships like this are usually a cost center, not a revenue driver. How do you square that with a stock picker's mindset? Lucas: That's the key question. And I'd argue the answer is that this isn't a pure cost — it's an investment in brand equity that compounds. Think about what Visa did with the Olympics and the World Cup. Their brand became the default for cross-border payments. Luna: So you're saying JPMorgan is trying to own the 'global bank' mindshare in the same way Visa owns 'payments'? Lucas: Exactly. And there's a more tangible angle too. JPMorgan Chase is already the largest bank in the US by assets. They don't need the Olympics for name recognition. But they do need to deepen relationships with affluent consumers and businesses, especially in a market like LA where competition is fierce. Luna: I get that. But how does this actually show up in the numbers? I mean, if you're building a concentrated portfolio, you want to know if this is a good use of shareholder capital. Lucas: That's where it gets interesting. JPMorgan has historically been very disciplined about capital allocation. They've been returning billions to shareholders through buybacks and dividends. So if they're willing to commit meaningful money to the Olympics, it suggests they see a return — maybe not in this quarter, but over a decade. Luna: And this fits with the broader rotation we're seeing into value and financials. JPMorgan's up 0.8 percent over five days while the Dow as a whole is down. It's outperforming. Lucas: Precisely. But I want to be careful here — we're not talking about a huge line item. The Olympics deal is probably in the hundreds of millions over several years, which for JPMorgan is pocket change. The real signal is strategic, not financial. Luna: What about the risk? If the Olympics get delayed or something goes wrong, does that hurt the stock? Lucas: Minimal direct impact. The bigger risk is that it signals a shift toward empire-building, which is what killed value at some other banks. But JPMorgan's leadership has been pretty disciplined. I don't see this as a red flag. Luna: So for a stock picker, how do you weigh something like this against the fundamentals? I mean, there's no line in the income statement that says 'Olympic sponsorship revenue.' Lucas: That's the trick. You have to look at it as part of the brand equity and customer acquisition engine. JPMorgan has been investing heavily in technology, in branches, in marketing — the Olympics is just another piece of that. It's about positioning the bank for the next decade, not the next quarter. Luna: And that's why a concentrated portfolio can work — you're placing a bet on management's ability to allocate capital wisely over the long term. Lucas: That's the whole philosophy, isn't it? When you own a handful of companies, you're not just buying a balance sheet — you're buying a management team's judgment. The Olympics deal tells us something about Jamie Dimon's confidence in the global economy and in JPMorgan's ability to win in LA. Luna: Speaking of confidence, let's talk about the energy rally this week. Exxon and Chevron are both up over five percent in five days. That's a huge move. Lucas: It is, and it's a good contrast to the Olympics story. Energy is a classic value sector — you're getting paid to wait for a turn in the cycle. But the recent surge feels more like a rotation out of tech and into old-school cash flow. Luna: I've been seeing that in the data too. The Dow is down while the Nasdaq is up, but the value index is actually up 0.7 percent. The market's broadening out. Lucas: And that's exactly what a concentrated stock picker should be watching. If you're only looking at the S&P 500, you'd think it's a flat week — up 0.1 percent. But under the surface, there's a lot of rotation. Luna: So how do you play that? Do you chase the energy rally or wait for a pullback? Lucas: I'd never tell you to chase a five percent move in a week. But the longer-term story for energy — especially with the global recovery and supply constraints — is still intact. And unlike an Olympic sponsorship, energy companies pay you a dividend to wait. Luna: That's a good point. Dividends are the tangible reward for patience. And in a concentrated portfolio, you want those cash flows to compound. Lucas: Exactly. And that's something we've talked about on this show before — the power of compounding. It's not just about the stock price going up; it's about the total return, including dividends and reinvestment. Luna: Alright, so before we get too deep into the weeds — I want to touch on something you mentioned earlier, about management judgment. That's really the core of this episode, isn't it? Lucas: It is. Whether it's JPMorgan signing up for the Olympics or Chevron managing its capital returns, the stock picker's job is to back the right people. And that theme runs through everything we talk about. Luna: I know we're not a nonprofit, but it does feel like we're building a community of like-minded investors who value that kind of thinking. And if you find value in what we do, you can support the show on buy me a coffee dot com slash fexingo. Lucas: Yeah, it's a simple way to keep us ad-free and independent. No strings attached. But every little bit helps us keep digging into these stories. Luna: Back to the Olympics though — one thing I want to leave with you is this: JPMorgan is making a bet that LA 2028 will be a showcase for global business, and they want to be the financial backbone. That's a long-term statement. Lucas: And for stock pickers, it's a reminder to look beyond the earnings report and think about where a company will be in five or ten years. That's where the real alpha is. Luna: Absolutely. Thanks for joining us, and we'll see you next time on Stock Picking with Fexingo. Lucas: Until then, keep your focus on the fundamentals.