In this episode of the Left Brain Thinking podcast, host Chuck Jaffe interviews Nolan Langford, CEO of Left Brain Investment Research, to discuss the firm’s newly launched Left Brain Mutual Fund and to explore "reopening plays"—investment opportunities that could benefit from the economic reopening after COVID‑19. Langford explains the fund’s methodology of seeking growth companies capable of doubling in 2‑3 years, while also targeting shorter‑term reopening plays that may deliver rapid price appreciation. He outlines the criteria for such plays—accelerating sales, expanding margins, and category dominance—and evaluates several sectors. Energy is highlighted as a more durable reopening play due to rising demand and under‑investment in oil fields. Travel‑related businesses (airlines, cruises, hotels, and ride‑sharing platforms like Uber) are discussed as having strong near‑term upside, though some (rental‑car firms) may be more temporary. Digital platforms such as Airbnb and online sports‑betting companies like DraftKings are presented as longer‑term winners as consumer behavior shifts toward online experiences. Throughout, Langford stresses the importance of earnings data to confirm whether demand spikes are fleeting or lasting. The episode concludes with a reminder that the conversation is not personalized investment advice and encourages listeners to conduct their own due diligence.
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Welcome to Left Brain Thinking, where creative investment ideas meet logical analysis. That's the hallmark of Left Brain Investment Research, where the analysts are looking for growth companies with the potential to double in 2 to 3 years and high-yield bonds with the potential for dramatic price appreciation. Today we're discussing the growth available in some of the economic reopening plays, and we're doing that with Nolan Langford, chief executive at Left Brain Investment Research. But before we get to reopening plays, we need to talk about an opening, specifically the opening of a new Left Brain Mutual Fund launched this week, and it follows the methodology discussed here on Left Brain Thinking. Now, that's all we're going to say about the fund for now, other than that you can get more information at leftbrainfunds.com. To learn more about Left Brain's investment research and their stock ideas and bond ideas, go to leftbrainir.com, and they're on Twitter @leftbrainir. Nolan Langford, great to chat with you again.
Thanks, Chuck. It's always great to talk to our listeners, and it's always great to be talking stocks, the market, and economic conditions with you, my friend. Happy to be here.
Well, economic conditions right now, the reopening is the story, at least from a stock perspective. You could have inflation and interest rates being there from a bond perspective, but The reopening is the big story, but you're looking for growth companies with the potential to double in 2 to 3 years. The reopening is a story that's much shorter than that. I mean, it's going to be dynamic, it's going to be here right now. So when you're looking at a reopening play, what specifically are you hoping for? Is it the potential to double in a much shorter time? Is it, I'm still looking for that long term, but oh, by the way, I'm getting a great pop right now? What's a reopening play for a growth investor like you?
That's a really good question. We have spent a lot of time and a lot of weeks thinking about it, and some weeks scratching our head, because you're right, we generally like accelerating sales and revenue. We like accelerating margins. We like companies that are category dominant. And in this year, those type of businesses have underperformed dramatically. And the businesses that have done very well and have done much better than the indexes are these reopening plays, a lot of which businesses may have not been great even before the pandemic. But now coming out, you sort of have pent-up demand. And the question is, is it going to be a one-time benefit to a lot of these companies, or is it going to be something more long-lasting? We've been asking ourselves that question. And I think the more past the reopening we go, the numbers are sort of going to show up, not necessarily in the stock prices because they move forward. The truth teller will be the earnings and what the revenues have done a quarter or two past this. So very interesting times. We have some thoughts and sometimes they're a little bit different than the securities that the market is betting on.
So let's get an example. I mean, what fits your idea as a reopening play?
There's a few. We have been really attracted to energy and for a lot of reasons. This isn't necessarily a reopening play. Obviously we all remember last year in March or April when oil prices went negative. And at that point we weren't using very many barrels of oil because everybody was stuck at home. Now that everybody's coming out from their shells and people driving and flying and taking cruises and operating factories again, the demand for oil and energy has increased. Now, we're not back to pre-pandemic levels yet, but we're really close. And what really piques our interest is even before COVID we were woefully underinvesting in our oil fields. You know, if you go back a decade or so, we were investing over $200 billion. In finding new barrels of oil. And that number had been cut dramatically by the time COVID has happened. You add to that the administration's position on fossil fuels and oil permits. It's not too hard to think of a situation where oil prices— I'm not saying they're going to spike, but it's hard to believe they won't stay in this $60 to $70 per barrel range, particularly when you look at the oil rig counts. They haven't gone up at all. So there's been a lot of discipline on the side of oil producers. So that is one area that we think is likely to last, unlike some of these reopening plays like the movie theaters and rental car companies. And I think they might be a little bit more dubious or hard to tell.
So energy, which is a partial reopening play. What else is a reopening play to you? Because like you said, it's not the movie theaters.
That's exactly right. Well, so a lot of people like experiences, and as people get out, you're starting to see the airlines and the airports have a lot more activity. Even the cruise lines, you know, I'm in Miami and I look out at the bay. The cruises are getting ready to fire up here in the next 30 days. And if you take a look at those share prices, they've moved up in anticipation, as has the airlines, the rental car companies, and the movie theaters. And maybe they will continue to do well, but there's an awful lot of questions with all of those groups. In our mind, a better way to play the reopening are businesses that were doing well before. They got a real shot in the arm by the reopening. So a couple of names we like as an example, Uber. You know, if you look at Avis Rent-A-Car and Hertz getting ready to come out of bankruptcy, a lot of people have been buying those shares. There's a shortage of used cars. And I think that's more of a temporary play. That business was already in a secular decline owing to Uber. I don't think that changes one year hence. And so Uber is a little bit more interesting to us as a reopening play, as is, you know, a lot of the hotels are really in the vacation spots are really starting to do very well. The dynamic name that we like in the space, something that's more interesting to us is something like Airbnb, which I think is gonna find an audience and a continuing growing audience because it'll be the new way to search for and to travel as they increase their listings and their experience businesses. So those two fit our criteria and they're more interesting to us.
We've got time for one more.
The other thing that I think a lot of people, or at least in the newspaper this weekend, Barron's spoke a lot about the casino casinos, the fact that Vegas is starting to come back. But I'm not sure that the earnings numbers are ever going to get back to what they were. The casinos in Vegas already were suffering from attendance. The convention business and even leisure travel has stopped going there to gamble. It's been the experiences. But if you take a look and you take a look at the sportsbook that's going online now, we can bet a game. You don't have to be in Vegas or New Jersey. You can pretty much bet, not anywhere, but more and more states are legalizing sports betting online. You add to that fantasy sports is online. So instead of the old-school casinos, companies like DraftKings, a lot more interesting to us, even as the economy reopens. And so that would be another idea that we think even as the reopening continues to happen and the pace quickens, We think these will continue to be winners 1, 2, 3 years out.
Noland, really interesting. Look forward to watching how it plays out and to talking with you about it down the line.
Always a pleasure, Chuck. Can't wait to get out here for the summer, and I'm glad that we're all vaccinated, and I'm sure we're all looking forward to having some fun in the sun again.
Absolutely. Left Brain Thinking is a joint production of Left Brain Investment Research and Money Life with Chuck Jaffe. Our conversations are not personalized investment recommendations but are designed to engage your brain. Please do your diligence before making any financial transaction. I'm your host, Chuck Jaffe, and you can learn more about my weekday podcast at moneylifeshow.com. Thanks to my guest, Nolan Langford, chief executive at Left Brain Investment Research. Learn more about the firm and its analysis at leftbrainir.com, and they're on Twitter at Left Brain IR. And you can learn Learn about the new Left Brain Mutual Fund by going to leftbrainfunds.com. Left Brain Thinking is available every other Wednesday. Please subscribe on your favorite podcast app and plan to put your left brain thinking cap on with us again when we resume in 2 weeks. Until then, stay safe, everybody, and happy investing.
