Reiterating My Bearish Position on Netflix

        The biggest news in the stock market last week was revolved around Disney (DIS) and it's unveiling of Disney +. A video streaming platform that will charge subscribers a $6.99/Month fee. I just don't see any scenario that would make me want to invest in Netflix long term.

         For a long time they owned 100% of market share, if you wanted your content streamed- it was through Netflix' platform. But now there are a lot of different options emerging. Apple TV, Facebook watch, Amazon, and the biggest competition, Disney. When four of the five biggest companies emerge in your market- there's nothing you can do.

         If you want to hang on to the fact that Netflix has original content - you can do that. But who has more content than Disney, who has more money to spend than Amazon (7 billion in original content to be exact), and Apple has great minds working on original content, including Spielberg and Oprah. Plus, how good is Netflix' original content? Out of the 1000+ movies/shows they put out so far, less then 150 have at least an 8 out of 10 stars according to IMDB. I mean, how many shows from Netflix can you actually name? I got stuck around 10. Now, how many Disney movies can you make? How many Disney movies have you spent money on to see in theaters? 

         Aside from the massive cut in market share, based on their financials.. they are in trouble. If you took all of their cash and cash equivalents, all their intangible assets and net income for the next year, you still wouldn't pay off their debt.

The indicators all point down for Netflix, the charts don't look good. Membership has plateaued, prices are rising rapidly- they are panicking and trying to raise more money in a frantic pace.

Plus, they have one source of income. What happens when they strike out on a few originals and content from other providers start getting pulled and moved to Apple, Amazon and Disney?

I have been bearish on Netflix for a few years now.

My $25,000 Robinhood Account

       A few days ago i woke up and checked my portfolio- and i realized something. Almost my entire portfolio is made up of stocks that i have bought in the last year. I was lucky enough to sell a lot of my stocks at the right time last year, which gave me a lot of buying power from September-January. It's been a great year so far and i'm already looking to sell some shares of some companies that i own. Here's what i'm looking at in my Robinhood portfolio right now.

Apple (AAPL)

25 shares @ $151/each
Initial investment $3,775
Today's value $4,975
Return 31.79% or $1200

Facebook (FB)

25 shares @ $149/each
initial investment $3,725
Today's value $4,425
% Return 18% or $700

Etsy (ETSY)

100 shares @ $29.50/each
Initial investment $2,950
Today's value $6,800
% Return 130% or $3850

Coca Cola (KO)

50 shares @ $47.50/each
Initial investment $2,375
Today's value $2,332
% Return (1.81%) or -$43

Proctor And Gamble (PG)

15 shares @ $80/each
Initial investment $1,200
Today's value $1,569
% Return 30.75% or $369

Bank of America (BAC)

17 shares @ $26.28/each
Initial investment $446
Today's value $493
% Return 10.5% or $47

I also own small positions in companies such as Wells Fargo (WFC), Whirlpool (WHR) , Verizon (V), General Electric (GE), Ford (F) and Microsoft (MSFT)

Why I'm Finally Buying Shares of General Electric

              Unless you have been living under a rock for the last two years- you probably heard that one of the largest, and most powerful companies in the world has fallen over 60% in a two year span. It hit a low of $6.45 per share. Which is at the point i thought to myself " this might be a pretty good buy ". I watched it for a while and finally pulled the trigger at about $7.38. I have been buying on dips and selling on highs for about three months now, over all- i am bullish long term. But like to secure profits early.

              But why did it fall so hard so fast? Well their first issue was being massively over leveraged. In 2015 they had over 389 billion dollars in debt and just 25 billion in gross income. But luckily for them, they had been paying a $.24 quarterly dividend- which was yielding over 3%. They had the option to cut the dividend- which they did. And that dramatically helped their debt problem, in 2015 they paid over 9.2 billion dollars worth of dividends, in 2018 they just under 4.5 billion. But they still aren't out of the woods yet- they are still underwater a bit. But moving in the right direction. They have more than doubled their cash and cash equivalents since 2015.

               That's not the only reason, they have had declining free cash flow, which is just basically a measure of how much cash a business has after accounting for capital expenditures. Which lead former CEO Jeff Imlet to cut forecasts for 2018- and it got even worse the farther they cut the dividend and they got hit harder after they missed their estimates. But finally- the market is expecting the new free cash flow to increase in 2019 and 2020.

                General Electric is not for everyone- it's a long term investment. I would say plus ten years. I would like to see them increase net income, revenue as a whole, I would need more debt to be paid off to put more money into it.. and I would like to see the dividend be eliminated until this can be done. But I do have faith that they will be prosperous again- I'm just not sure when. I won't go long until these things are accomplished, but I will have fun playing these dips every time a bonehead analyst says something negative.

Why Buy Crypto? We Already Have Something Better

       For those that know me, you know i'm a long term growth investor. I like investing in companies that i understand, companies that are profitable, have good management and financial statements- I don't like penny stocks, speculation or buying a stock based on hype. To me, that's exactly what crypto currency is. There are no financials to back it up, there is no management, they have no business model and are influenced on just hype and speculation.

      With that being said- why would we do something as crazy as changing the entire global economy and making 195 countries change everything they know about money, and teach nearly 8 billion people something they have no idea about. Plus, 40% of the world doesn't have access to the internet- how would those people use their money? How about people that choose not to use it such as elderly that don't want to adapt to new technology. What about the security aspect of it, who is paying to make sure this stuff is not being stolen, and if it is stolen is it refunded?  What about small mom and pop shops that take cash only, how about small things like a gumball machine or parking meters? Well there may already be a solution out there.

     Apple pay. Apple pay makes it easy to make purchases online or in store with just a tap of the phone. It's fast, it's secure and is backed by one of the largest and innovative companies in the world. They are changing the way we see money, without changing the concept of money. And best of all- you don't have to worry about your money dropping 85% in value over a year span. It is widely accepted by all retailers and can easily be converted to cold hard cash if needed (yes there are still a ton of cash only business')


3 Reasons to Buy Shares Of Etsy Now


           For those who don't know- Etsy is an online platform for entrepreneurs that specialize in handmade or unique vintage goods. The majority of their revenue comes from charging sellers a fee to post an item as well as a commision once the item sells. However they do have additional income from advertised posts, direct checkout and discounted shipping labels. The company was founded in 2005 but recently has it's initial public offering in 2015. It's up 150%s since the initial public offering but is up over 230% in the last year alone. But I don't think the stock is done just yet. I could run and secure my profits- but for a few reasons i'm expecting even more from them over the next few years.

1. Double digit revenue growth
          Incase you missed it, Etsy reported two hundred million dollars in revenue in quarter four of 2018- it's largest single single quarter revenue ever. It marked a 44% increase compared to Q4 of 2017. But it's not just a single instance- they have increased revenue each of the last four years, for a total of 140%. This large jump could be in large part due to their increase in commision rates- originally they charged 3.5% on each item sold- now they charge 5% on each item PLUS shipping. A 40% increase on their largest revenue stream has clearly given their revenue a major boost.

2. Josh Silverman
          I think Josh Silverman has been on of the best CEOs of the last 2 years- and one of the better executives over the last decade. He helped Ebay grow in the early 2000s, he helped ink the lucrative deal of Skype/Microsoft and he also held executive rolls at American Express and ShakeShack. He has been able to increase sellers fees while keeping moral up. They have increased their active sellers by 9% and active buyers 20%. He fixed the website and made the experience for customers smoother- he introduced direct checkout and now 33% of all items are now "free shipping" for customers.

He is hungry for growth- his resume shows it, and his short time at Etsy shows it as well.

3. Lack of competiton
          Plus, who can compete with Etsy anyways? what online retailer exclusivley sells handmade goods? I don't suggest competing with Amazon- but that's Etsy's biggest competitor.. but Amazon handmade is minor compared to Etsy. It is burried in the Amazon website behind cell phone cases and used books. They don't have as many active buyers or sellers, to be honest I wasn't even aware Amazon handmade existed until I started researching Etsy. When I think of Etsy I think of one thing- a bottomless pit of manufactured inventory. A definition that is not exactly synonomis with the handmade movement.

Facebook Massive Earnings Beat

      Could Facebook's earning beat finally be the boost that tech stocks need? They are up 6% today after crushing earnings... Other companies have beaten earnings and fell flat on their faces the next day... But could Facebook be different? Microsoft beat earnings and fell 9%, Amazon fell short and has dropped 13% in a week, Netflix knocked earnings out of the park and fell 23% in the last month and 13% in the last week.

      So will Facebook be more of the same or the anomaly? Let's look at their earnings.

      Their financials are highlighted by a 33% growth in advertisement revenue- compared to quarter three of 2017. That's on top of the 1% growth in revenue in other payments and fees. The growth in revenue has increased earnings per share by 11%, to $1.76. It also helped their assets, cash, cash equivalents, and marketable securities increased to over 41 billion... But revenue has never really been Facebooks issue, going back to quarter two the sharp decline in stock price was due to their users.

      They crushed user totals on almost every measurable scale. Daily active users (DAUs) increased to 1.49 billion, an increase of 9% year over year. Monthly active users (MAUs) increased to 2.27 billion, an increase of 10% year over year. The increase in the users has resulted in the increase in ARPU, or average revenue per user. Every region except " Other " have expanded their ARPU. Worldwide their average revenue per user increased from $5.97 to $6.09.

      Overall, I was very impressed with Mark Zuckerberg's honesty and ability to easily explain who, what, where, when and why... He had an answer for all questions and was easily able to elaborate on what the company is planning on doing in the future... Including better monetization of Instagram stories, Instagram shopping, upgraded Facebook stories, and even more expansions into Facebook TV, Facebook marketplace, Jobs (which has already helped connect 1million people with new careers) and even in dating (Maybe a new Facebook acquisition is on the horizon?)

       Overall, Facebook is a buy for me. In my few years of investing, I have never felt this good about a company, I love Mark Zuckerberg and his vision, they have the goodwill and reputation to be the most recognizable and profitable brands in the world.


IBM Closes Deal to Purchase Red Hat For $34 Billion

       First off, a massive congratulations are in order for all owners of Red Hat(RHT) shares- Your shares are going to be purchased at a 63% premium, thanks to International Business Machine Corporation, better known as IBM.

       IBM announced on Sunday that they came to an agreement to buy Red Hat, the multinational software company that provides open-source software products to the enterprise community. IBM, one of the largest and most reputable technology services company will purchase all outstanding shares of Red Hat for a premium of $190. That number represents a $73 upgrade on the Friday closing price for a total of $34 billion.

        The acquisition, which is IBM's biggest acquisition ever and the third largest tech acquisition ever is much needed for the company, as they have lost about 17% of their share value in the last year. But could this really be the boost the company needs? IBM chairman seems to think so, stating " The acquisition of Red Hat is a game-changer. It changes everything about the cloud market. Most companies today are only 20% along their cloud journey, renting compute power to cut cost, the next 80% is about unlocking real business value and driving growth. This is the next chapter of cloud."

       IBM has been trying to get into cloud service but have been bumped by Amazon web services, Google cloud, and Microsoft Azure. Who Red Hat already has a partnership with, one that will be continued even after this move.  

       IBS said that it will halt its share buyback program, but the dividend will remain untouched. 

Reiterating My Bearish Position on Netflix

        The biggest news in the stock market last week was revolved around Disney (DIS) and it's unveiling of Disney +. A video streami...