Stocks - The Best Buys 2

[Table 5]

It doesn't hurt to look back at previous high-inflation environments to see how things performed.

[CaptainYooh]

Energy companies should be doing well in the inflationary and interest-rising environment, because they supply necessities in-sync with rising demand (economic recovery) at rising prices (over-compensating their higher production costs), AND they traditionally borrow very little (thus, little affected by capital borrowing costs).

REITs do borrow approximately 50% of their capital on average. This means that they should be negatively affected by increasing interest rates. But they also do well, because real estate tends to appreciate during economic recovery and high inflation more than it loses due to higher borrowing costs.

In the short run, looks like both categories should do well in 2022-23.

In the long run (30 years?), energy stocks could be brought to near-zero, if governments across the world succeed in making fossil fuels magically disappear somehow. REITs are not immune to failure as well. I don't think we will see interest rates in 17-20%, like we did in the late 80's-early 90's (although, this is not impossible). But the whole aspect of shifting paradigms in office and retail real estate asset classes will at some point start devaluing the REITs with those assets in a big way. The question is when.

[burn_this_city]

Hope nobody was NFLX and chilling still.

[Wormius]

Originally Posted by burn_this_city

Hope nobody was NFLX and chilling still.

They could try lowering prices and lowering the amount of C-grade original content if they want memberships to increase.

[DoubleK]

Originally Posted by Slava

Well there are strategies to deal with that though. You can use options, setup swaps and all kinds of things to nullify that volatility and make everyone happy.



It might be irrelevant though, for a few reasons, but one being that it sounds like Twitter is going to adopt a poison pill and that would likely deter a would-be purchaser. Who knows about Musk though.

I can't believe the board adopted a poison pill.

Talk about a case of looking out for their interests vs the common shareholders.

[Slava]

Originally Posted by DoubleK

I can't believe the board adopted a poison pill.

Talk about a case of looking out for their interests vs the common shareholders.

That company is so bizarre though. I love Twitter, and I think it's amazing. It gets used for some incredibly useful purposes and when there is actual news happening, it's phenomenal (not that there are no pitfalls along with that, or course). But they're also completely tone-deaf. Is it really that hard to have an edit button? It can't possibly be, and people have wanted that for years. Could they not have a "subscription" and make it ad-free? Of course. And it would be wildly popular if you priced it right.

Overall though, it's amazing to me that you have this useful, mainstream piece of technology and they've completely failed at monetizing it and responding to user-needs in almost any capacity. I'm not saying that Musk would be the saviour, but what in the world has that board been doing?

And in looking at some of the positions that the board members have in the stock is just hilarious. The percentages are very small, and I think some of them have like 70 shares or ridiculous things like that. No wonder there is no push to improve. That poison pill could let them double their ownership all the way to $7000. It's preposterous.

[Delthefunky]

Originally Posted by burn_this_city

Hope nobody was NFLX and chilling still.

I have some in the $380 range, and I'm just fine holding it long term. I'll probably average at this price too. Great opportunity imo.

[bluejays]

I’m not sure if it’s a falling knife scenario for Netflix but I do know the final season of Stranger Things is soon and that definitely has a cult following to keep subscribers. I’d be more concerned after that to see what they have in store.

Anyway, I never seen them as a giant to begin with. In this mega company age you have to have revenue from different streams, like Apple or Amazon. This single source of revenue seems to quickly become a model that is volatile for investors. With inflation and all I do wonder if the tightening of the belt happens even for $11.99 a month.

[shermanator]

Sold out my remaining meme stocks today that were going to 0 (CENN, IAN, MPXI, MTLO) and picked up NFLX. My Unrealized G/L thanks me, my Realized G/L has regrets.

[Fuzz]

I wonder if it is a good buy opportunity for Netflix. A lot of the "lost" subscribers were form Russia. Perhaps someone makes an offer on the company at this price...

[Slava]

Originally Posted by Fuzz

I wonder if it is a good buy opportunity for Netflix. A lot of the "lost" subscribers were form Russia. Perhaps someone makes an offer on the company at this price...

Is that true though? Russia isn't even in their top ten of revenue exposure, which bottoms at ~2.9%. It seems odd that this decline is largely based on subscribers there being cutoff.

[Fuzz]

Originally Posted by Slava

Is that true though? Russia isn't even in their top ten of revenue exposure, which bottoms at ~2.9%. It seems odd that this decline is largely based on subscribers there being cutoff.

No, the decline isn't largely based on that but...

To be fair, some of this pain was self-imposed. In response to Russia's unwarranted war against Ukraine, the streaming service decided to suspend operations in Russia earlier this year. That alone resulted in a loss of around 700,000 subscribers. Excluding this, the company would have added 500,000 over the past three months.

https://seekingalpha.com/article/450...ortunity-bulls


So it maybe isn't as bad as it sounds. Just wondering if the market maybe over-reacted.

[Slava]

Originally Posted by Fuzz

No, the decline isn't largely based on that but...

https://seekingalpha.com/article/450...ortunity-bulls


So it maybe isn't as bad as it sounds. Just wondering if the market maybe over-reacted.

Yeah, and that could be. The overall earnings report wasn't as bad as the impact on the share price (they did have better than expected cash flow and things of that nature). But, the issue for the share price is that they're not the first company in this position, recently. I think that analysts are looking at things like the increased competition from other services and adding to that the decline in subscribers, which gives a gloomier outlook for them.

[nfotiu]

Where is the growth opportunity for Netflix? They've pretty much tapped out their market and are already starting to look expensive comparted to their competitors.

Also their competitors like Amazon, HBO and Disney have a far broader range of content that they can upsell, like sports, Discovery, news and such.

[Dan02]

Originally Posted by Fuzz

No, the decline isn't largely based on that but...

https://seekingalpha.com/article/450...ortunity-bulls


So it maybe isn't as bad as it sounds. Just wondering if the market maybe over-reacted.

The market expectation was to add 2,5 million subs, so even if we exclude Russia they missed the mark by 2 million. 500k vs 2.5 million.

This is why we're seeing them pivot into trying to limit password sharing recently because they're realizing their organic growth is drying up.

[Strange Brew]

This is not the time to get into Netflix IMO. Wait to figure out if they have a viable plan for recapturing market share. Otherwise you're just investing on hope.

[BlackArcher101]

Originally Posted by Strange Brew

This is not the time to get into Netflix IMO. Wait to figure out if they have a viable plan for recapturing market share. Otherwise you're just investing on hope.

Ah yes, most of the stock market and highly inflated stock prices these days.

[Leondros]

Originally Posted by Dan02

The market expectation was to add 2,5 million subs, so even if we exclude Russia they missed the mark by 2 million. 500k vs 2.5 million.

This is why we're seeing them pivot into trying to limit password sharing recently because they're realizing their organic growth is drying up.

I think that is some pretty low hanging fruit for them to limit multiple households utilizing one account. That alone will do wonders for their numbers.

If they can keep cranking their own content they will be fine. Look at Costco, they don't need to keep increasing their memberships year-over-year. They need to make their membership group price agnostic to slight increases over time and that can only be done by producing content that can't be substituted (ie. Netflix produced content).

[Fuzz]

If they come down to hard on multiple accounts, people will cancel more though. You can't tie it to an IP address, since people may have multiple homes. How about children? Multiple devices? It's not quite as easy as it sounds, and if you piss off your customers, they'll leave you with nothing.

[Azure]

At the end of the day Netflix is loosing out because other streaming services is offering better content at a better price.

Plus, Plex.