All things STOCKS

#10,678
#10,678
Wife and I are getting ready to start gift accounts for each other. You can gift them to others in amounts larger than $10,000 and they start drawing interest immediately, but the gift can only be received at the usual $10,000 per year. So if you already bought $10,000 this year, and you should have already done that, you can consider piling on using a gift account.
 
#10,680
#10,680
Velo Vol said:
I haven't followed it at all except they keep talking about how horribly it has performed on The Compound podcasts. Good luck.
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Maybe a bit overpriced right now (30x earnings multiple). But it’s well branded, has a huge footprint, and is peeling off a huge percent of every transaction. It’s a LT hold for me and a possible hedge against MA. It would have been less risky to buy a FinTech ETF, but PYPL was on sale. It hasn’t dropped enough from my entry point to double down yet. It probably will though. It usually takes a LOOONG time to get back to pre-drop levels as many buyers tend to cash out if they get back to even once prices trend up. The selling pressure holds shares back for an unpredictable period of time. PYPL is down to $100 from over $300, but it has had a profit which isn’t always the case for newish companies.
 
#10,681
#10,681
Thunder Good-Oil said:
Maybe a bit overpriced right now (30x earnings multiple). But it’s well branded, has a huge footprint, and is peeling off a huge percent of every transaction. It’s a LT hold for me and a possible hedge against MA. It would have been less risky to buy a FinTech ETF, but PYPL was on sale. It hasn’t dropped enough from my entry point to double down yet. It probably will though. It usually takes a LOOONG time to get back to pre-drop levels as many buyers tend to cash out if they get back to even once prices trend up. The selling pressure holds shares back for an unpredictable period of time. PYPL is down to $100 from over $300, but it has had a profit which isn’t always the case for newish companies.
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Kind of rhetorical, but it fascinates me how people were buying at $300 last summer, and sell it at $100 now. What changed abut the company (other than the obvious interest rate outlook)?
 
#10,683
#10,683
Velo Vol said:
Kind of rhetorical, but it fascinates me how people were buying at $300 last summer, and sell it at $100 now. What changed abut the company (other than the obvious interest rate outlook)?
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FOMO. Amazon. Tesla. Facebook/Meta. Netflix. All went up fast and kept going. PayPal has the connection to Elon Musk. The vision of management is a huge factor. It’s different than the surfer dude at GoPro or the shady investor bro at WeWork.
 
#10,684
#10,684
Actually I’m in PYPL at $102.77 so I’m up almost 4% instead of having dropped from my entry point as I stated in my earlier post. Still keeping it for the long haul (unless it’s up 50% or more by summer). The markets will take off again eventually. There are multiple things holding domestic equities back. COVID heading into year 3. Putin. Our administration’s energy policy. Socialists holding seats in Congress. Manufacturing having been incentivized for decades to go off shore while now facing a disrupted supply chain with issues as de-globalization is now slowly trending. Interest rate hikes expected for many coming quarters.
 
#10,686
#10,686
Velo Vol said:
Cordcutting coming to cord-cutters.

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Cordcutting not really saving people money was one of the most predictable things of all time. I don't know how more didn't see it. Content simply isn't as cheap as most people think it should be - they really thought everything they wanted to watch was going to end up on a single streaming service priced at $19.99/month?

Wasn't it completely obvious from the beginning that popular shows would end up on any number of different streaming services due to competition, and if you wanted to watch all of them you'd need all the streaming services? Thinking everything you wanted to watch would be on 1-2 streaming services is like thinking everything you wanted to watch on TV would all be on the same channel.

That's not good for NFLX, or any of the streamers. Plus the country appears to be moving on in earnest from any COVID self-isolation that remained.
 
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#10,687
#10,687
05_never_again said:
Wasn't it completely obvious from the beginning that popular shows would end up on any number of different streaming services due to competition, and if you wanted to watch all of them you'd need all the streaming services?
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Maybe. Seems there's a tragedy of the commons problem here--from the standpoint of every streamer, it makes economic sense to start a channel. But eventually there are too many, and then they all take a hit.
 
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#10,689
#10,689
BP4Prez said:
Wish Disney would get their crap together. Been a brutal month.
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DeSantis is deciding whether or not to crush them at Disney World. AT&T putting Time Warner assets with Discovery creates an enormous competitor in content. COVID / stay at home was a windfall for their TV programming operation - opening the country back up hurts that business. Also à la carte streaming options have to be trouble for the ESPN channels that have been extorting content delivery companies with enormous affiliate fees for decades.
 
#10,690
#10,690
05_never_again said:
Cordcutting not really saving people money was one of the most predictable things of all time. I don't know how more didn't see it. Content simply isn't as cheap as most people think it should be - they really thought everything they wanted to watch was going to end up on a single streaming service priced at $19.99/month?

Wasn't it completely obvious from the beginning that popular shows would end up on any number of different streaming services due to competition, and if you wanted to watch all of them you'd need all the streaming services? Thinking everything you wanted to watch would be on 1-2 streaming services is like thinking everything you wanted to watch on TV would all be on the same channel.

That's not good for NFLX, or any of the streamers. Plus the country appears to be moving on in earnest from any COVID self-isolation that remained.
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I cut the cord about 10 years ago. And while it was a financial move at the time, we also weren't happy with the options Cable/Satellite offered. You had to lock yourself into a 2 year contract, at which point they jacked up the prices after year 1. You had rent the equipment or buy them outright, along with service charges for set up, etc. And the TV packages they offered were often times not very good unless you splurged for the elite packages.


For several years, the only TV provider we had was Netflix at 11 dollars a month. And Netflix used to get content from active popular cable network shows a season later. Now it seems like they lost the rights to most of the popular shows that I used to binge all the time. It's only been the last 3-4 years they we've gotten live TV again with YTTV, Hulu, or FUBO. And their prices are still considerably better than most DISH/DirectTV/Comcast when you factor in all the extra charges those big companies hit you with. And the streaming providers tend to have better overall content, imo. And I can cancel anytime.
 
#10,691
#10,691
Carp said:
I cut the cord about 10 years ago. And while it was a financial move at the time, we also weren't happy with the options Cable/Satellite offered. You had to lock yourself into a 2 year contract, at which point they jacked up the prices after year 1. You had rent the equipment or buy them outright, along with service charges for set up, etc. And the TV packages they offered were often times not very good unless you splurged for the elite packages.


For several years, the only TV provider we had was Netflix at 11 dollars a month. And Netflix used to get content from active popular cable network shows a season later. Now it seems like they lost the rights to most of the popular shows that I used to binge all the time. It's only been the last 3-4 years they we've gotten live TV again with YTTV, Hulu, or FUBO. And their prices are still considerably better than most DISH/DirectTV/Comcast when you factor in all the extra charges those big companies hit you with. And the streaming providers tend to have better overall content, imo. And I can cancel anytime.
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I’ve been saying it for years. Netflix has been SPENDING on programming, not INVESTING in a catalog of content. Disney owns their content. Time-Warner/Discovery owns their content. Even when Netflix started spending big dollars to develop programming they were only buying exclusivity for running it first and only having the exclusivity for a year or two. They’ve been more of a content delivery platform. They need to start running advertising to replace the lost revenue from the subscriber churn. It won’t surprise me if the stock price falls by 90% off of the ATH before stabilizing.
 
#10,692
#10,692
Carp said:
I cut the cord about 10 years ago. And while it was a financial move at the time, we also weren't happy with the options Cable/Satellite offered. You had to lock yourself into a 2 year contract, at which point they jacked up the prices after year 1. You had rent the equipment or buy them outright, along with service charges for set up, etc. And the TV packages they offered were often times not very good unless you splurged for the elite packages.


For several years, the only TV provider we had was Netflix at 11 dollars a month. And Netflix used to get content from active popular cable network shows a season later. Now it seems like they lost the rights to most of the popular shows that I used to binge all the time. It's only been the last 3-4 years they we've gotten live TV again with YTTV, Hulu, or FUBO. And their prices are still considerably better than most DISH/DirectTV/Comcast when you factor in all the extra charges those big companies hit you with. And the streaming providers tend to have better overall content, imo. And I can cancel anytime.
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IMO the only obvious benefit now of the streamers is being able to cancel anytime. If you are a huge TV watcher (which I am not - 95% of what I watch on TV is live sports), in all likelihood you have to buy multiple streaming services if you want to watch all your stuff (or just have cable). The streaming services been getting more expensive, both in terms of price increases and password crackdowns. My local cable provider also doesn't lock you into a contract and doesn't charge any setup fees, so I've never had a strong desire to leave.

Netflix's content in particular has seemed to go downhill. Instead of a smaller number of quality shows, they seem to have a large number of filler junk shows now of MTV-like content. I watched House of Cards, Bloodline, and Narcos when they were running, but those shows have ended and been replaced with shows where people get engaged to people they've never seen.
 
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#10,693
#10,693
Thunder Good-Oil said:
I’ve been saying it for years. Netflix has been SPENDING on programming, not INVESTING in a catalog of content. Disney owns their content. Time-Warner/Discovery owns their content. Even when Netflix started spending big dollars to develop programming they were only buying exclusivity for running it first and only having the exclusivity for a year or two. They’ve been more of a content delivery platform. They need to start running advertising to replace the lost revenue from the subscriber churn. It won’t surprise me if the stock price falls by 90% off of the ATH before stabilizing.
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Which would be incredibly ironic considering (at least in the early days) that was a huge reason people turned to streaming in the first place...to get away from ads.
 
#10,694
#10,694
05_never_again said:
IMO the only obvious benefit now of the streamers is being able to cancel anytime. If you are a huge TV watcher (which I am not - 95% of what I watch on TV is live sports), in all likelihood you have to buy multiple streaming services if you want to watch all your stuff (or just have cable). The streaming services been getting more expensive, both in terms of price increases and password crackdowns. My local cable provider also doesn't lock you into a contract and doesn't charge any setup fees, so I've never had a strong desire to leave.

Netflix's content in particular has seemed to go downhill. Instead of a smaller number of quality shows, they seem to have a large number of filler junk shows now of MTV-like content. I watched House of Cards, Bloodline, and Narcos when they were running, but those shows have ended and been replaced with shows where people get engaged to people they've never seen.
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Content is king, but Netflix has apparently dropped the ball. Maybe they should have tried to get the CBSs, ABCs, ESPNs, CNNs, NBCs, etc as customers to use their platform instead of trying to compete with them for viewers. But the business model for those content providers has been getting paid BY the delivery platforms (cable, dish) rather than paying for it. Netflix didn’t leverage their streaming technology. The pure content companies have two main sources of revenue. Advertising sales has been the primary source. Affiliate fees from the cable providers and other delivery platforms has been secondary.
 
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#10,696
#10,696
Thunder Good-Oil said:
Netflix successfully transformed from DVDs in the mailbox to the premiere streaming service. They may not have a third act.
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Both NFLX and FB are at a major crossroads. Previously seen as wildly innovative companies, growth has slowed, and they don't immediately appear to have a follow-up act. When does FB report?
 
#10,697
#10,697
05_never_again said:
Both NFLX and FB are at a major crossroads. Previously seen as wildly innovative companies, growth has slowed, and they don't immediately appear to have a follow-up act. When does FB report?
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Both have created valuations priced a decade or more ahead of P&L expectations. The valuations were based on near perfection of environment and execution. Now they are stumbling - Netflix sub growth is at the saturation point and competition is ramping up. Facebook is denying that they are a publisher while controlling content. FB is at risk of losing their premium pricing of targeted ads with the pushback from users over privacy concerns. Facebook also has a demographic concern as the younger demo prefer other platforms (although Meta also owns Instagram and Whats).
 
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#10,698
#10,698
Since I’m newer to this and trying to learn as much as possible, can someone explain to me why the feds raising interest rates affects the market so much? I don’t understand why there’s so much volatility. Thank you.
 
#10,699
#10,699
ninerplaya57 said:
Since I’m newer to this and trying to learn as much as possible, can someone explain to me why the feds raising interest rates affects the market so much? I don’t understand why there’s so much volatility. Thank you.
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I think that is as simple as it’s more expensive to conduct business. Also consumers have less money to buy stuff when their mortgages and credit card (and other) loans cost more. Companies that sell bonds to finance their operations pay more. Municipalities and other government entities pay more for their borrowing which leads to higher taxes (which also drags on commerce). So higher interest costs reduce bottom lines of public companies and a multiple of their earning per share (measured as p/e ratios) is the most basic method for determining the valuation of a company.

As far as equity securities (stocks), owning bonds becomes a more desirable option to invest in as interest rates increase. Some companies must pay higher dividends to keep pace with investors deciding whether to buy stocks or owning debt alternatives. Also, when borrowing costs more - the demand for stocks and their derivatives falls when it is more expensive for investors and speculators to buy securities using margin.

I think that one of the big ones is the higher cost to borrow for governments. Each quarter point interest hike at the federal level costs billions annually which leads to higher taxes or bigger deficits which is a drag on the economy.

Another really big aspect is the higher mortgage costs. Home construction is a huge component of the economy. Higher rates slow down the purchasing and if the home buyers can only afford $xxx per month, the cost of the units must go down to keep the selling activity up.

Higher interest rates contribute to more inflation as well from the cost angle. But rising rates will also cool off the economy which could reduce inflation. However if production falls, less supply can keep the inflation levels high.

Much of it is just noise in the investment universe. Rates have been really low for a long time. Higher interest rates from here aren’t really historically oppressive. Things should stabilize as the rate hikes level off.
 
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