A first look at Clear Secure; China's share of global GDP is shrinking; I just finished Lloyd Blankfein's autobiography
1) Because I travel so much – and am often racing to catch a flight with only minutes to spare – I've long been a member of Clear Plus. It's a service that offers dedicated lanes to expedite going through security at more than 60 airports in the U.S.
This article in last week's Wall Street Journal highlights how Clear Secure (YOU), the company that operates Clear Plus, has benefitted from the partial government shutdown that has created long security lines at airports across the country.
According to the article, the Clear app has had nearly 300,000 downloads since the partial shutdown started earlier this month – more than triple the number from a year ago.
The stock has taken off as a result, soaring nearly 70% since its low in February:
This marks a reversal from its poor performance since the company's IPO in mid-2021.
With the stock hitting a multiyear high recently, is it time to hop on this rocket ship or avoid it? To answer that, let's take a look at the fundamentals...
Clear's revenue and operating income show strong growth, especially since 2022:
Its cash-flow statement shows a similar story:
And its balance sheet is strong, with a healthy net cash position:
Clear's financial picture looks excellent. But what about valuation?
At yesterday's closing price of $49.05, the stock has a $6.6 billion market cap. And adjusting for cash, it has a $6 billion enterprise value.
Analysts expect the company to earn $1.80 per share this year and $2.81 next year. So the stock is trading at 27.3 times current-year earnings estimates and 17.5 times next year's.
Those would be reasonable multiples for the stock if Clear could build on the recent momentum and continue its historical growth trajectory.
But I don't think that will happen...
The wait times at airports are already easing as Transportation Security Administration ("TSA") agents are getting paid again, according to this WSJ article:
After more than five weeks of working without pay due to a funding impasse, most TSA employees received two, full retroactive paychecks on Monday, according to union officials and a Department of Homeland Security spokeswoman. The spokeswoman said the department is working to complete processing for the remaining half-paycheck owed.
Clear will undoubtedly report a blowout first quarter. But I predict investors will correctly discount this as a one-time event.
The real question is, how many travelers are willing to pay $209 annually for Clear Plus going forward? I think this number is likely to decline.
My wife doesn't have Clear Plus because she doesn't travel as much as I do, but she does have TSA PreCheck Touchless ID. So whenever we travel together, we play a little game: We go into our respective lanes and see who gets through security fastest. About half the time, she wins...
Our experience seems to be typical. This WSJ article from last October recounts how a group of coworkers raced through security using different methods, and Clear came in last:
For years, Clear has been the fast lane through airport security – an extra layer of insurance for making your flight. TSA has often been a crapshoot, risking pileups as travelers pulled laptops from carry-ons and novice vacationers struggled to untie their sneakers.
Recently, though, TSA has taken steps to move those snaking lines more quickly.
The TSA has been pushing its PreCheck Touchless ID for more than a year:
Lastly, I think this short report on Clear posted on Value Investors Club three years ago raises issues that are still valid today (a free subscription is required to read):
[Clear is] a glorified labor-intensive airport concessionaire... Clear does not have a reason to exist in the long run. They do not own any particularly proprietary technology, but simply have biometric booths that eliminate the need for an agent scanning your passport and verifying your identity. This job can be done by the airlines during the check-in over time, eliminating the need for Clear to exist. We are already seeing early signs of this...
In summary...
Clear Secure's economic characteristics are good, as highlighted in the charts above. And its valuation, while high, isn't excessive. But given serious concerns about the need for its service in the future, I'm not tempted by the stock... especially after its big run-up.
If it pulls back to the $20-to-$25 range, where it has been for most of its existence as a public company, I'll take another look.
2) There has been a widespread narrative for quite some time that the U.S. is doomed to fall behind China...
But as this WSJ article from earlier this month details, it turns out that China's share of global gross domestic product ("GDP") has been shrinking for the past few years:
By most standards, China's economy has never been stronger. Its exporters have powered the country to a $1.2 trillion surplus with the world. It is the global leader in strategically important industries such as electric vehicles, solar panels, shipbuilding and humanoid robots.
Yet, by one important measure, China's global heft is shrinking. In dollar terms, China's gross domestic product, as a share of the global economy, peaked in 2021 at around 18.5%, when it grew to be around three quarters of the size of the U.S. economy. Many economists predicted China's explosive growth would eventually make its economy bigger than that of the U.S.
As this chart from the article shows, China's share of global GDP was around 16.5% at the end of 2025. By that measure, its economy is now less than two-thirds the size of ours:
Even when China was booming and appeared invincible, I was never tempted by Chinese stocks due to widespread fraud and minimal rule of law. Now I especially don't feel like I'm missing out...
3) I just finished listening to – and enjoyed – Streetwise: Getting to and Through Goldman Sachs, the autobiography of Lloyd Blankfein, who led the bank as CEO from 2006 to 2018.
I love only-in-America stories like his: a Jewish kid from the Brooklyn projects who got a full ride to Harvard and made it big through smarts, burning ambition, and luck.
I think Blankfein is right that Goldman Sachs (GS) was unfairly maligned for its role in the global financial crisis. It was my hedge fund's prime broker for most of its 18-year existence, and I can tell you that it ruthlessly managed risk.
As Blankfein said in this New York Times interview, "If every bank had managed its risk the way we did, we wouldn't have had a banking crisis."
Lastly, here's a WSJ review of the book. I'd highly recommend it!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.