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Better than an NFT..:). This morning Space X launched, by far, the largest and most capable rocket ever imagined. Initial launch was successful but the rocket failed before separation. I'm sure they collected lots of good data and will try again soon. This is the rocket that will eventually be used to take astronauts to Mars.
That makes way too much sense..:)
In our ongoing attempt to assist investors in finding the next best investment possible, I offer the Starbucks "First Store" NFT. Launched less than four hours ago it is already more than 50% sold out. At only $100 each and only one to a customer you are assured you'll lose no more than $100. I guess selling mediocre coffee for $5 a cup isn't covering the rent.
https://www.niftygateway.com/collections/starbucks-odyssey-the-first-store
Patrick Byrne is certifiable. He's still financially supporting his girlfriend Maria Butina after she got out of US prison, returned to Russia and tries to run for office in Putin's party. Makes Lindell look almost sane.
Smartmatic is on deck with their $2.7B lawsuit. Also Fox shareholders are suing to ensure Murdoch pays from personal funds. Also Newsmax and OAN face lawsuits from both Dominion and Smartmatic.
Investing in FOX has been it's own punishment over the last decade as the share price has been almost exactly flat with a dividend of 1.6%. I guess that's better than sending investors a pillow..:)
NFLX down in after hours trading.
Netflix Gives a Weak Forecast. Its DVDs Are Going Away.
Shares of Netflix NFLX +0.29% initially fell in late trading Tuesday after the streaming video service forecast a disappointing outlook for the second quarter.
First-quarter profits and revenue were largely in line with Wall Street’s expectations, though the company added 1.75 million net new subscribers in the quarter, about 500,000 less than analysts had projected.
Netflix stock fell as much as 9% in after-hours trading following the earnings report. A half hour later it was trading nearly flat.
For the quarter, Netflix posted revenue of $8.17 billion, up 3.7%, with profits of $2.88 a share. The company had projected $8.2 billion in revenue, and earnings of $2.82 a share. The Wall Street consensus estimates had called for $8.2 billion and $2.86 a share. The company has stopped providing a specific forecast for subscriber growth.
For the June quarter, Netflix sees revenue of $8.24 billion, up 3.4%, with profits of $2.84 a share; that’s below the old Wall Street consensus of $8.5 billion and $3.07 a share. The company said that paid net adds in the quarter should be “roughly similar” to the first quarter, which would be below the Street consensus forecast at 3.7 million.
On the other hand, the company boosted its forecast for full-year free cash flow to at least $3.5 billion, from a previous forecast of at least $3 billion.
Netflix also said that it expects the U.S. launch of “paid sharing,” its program for cracking down on password sharing, in the second quarter. The company launched paid sharing in four countries in the first quarter—Canada, New Zealand, Portugal, and Spain—and said it is “pleased with the results.” The company noted that average revenue per membership globally was down 1% in the quarter from the year-earlier period. The company noted that its subscription base in Canada is now larger than before implementing paid sharing.
The company said that the shift of the paid sharing launch into the second quarter should result in “a better outcome for both our members and our business.”
Operating income in the latest quarter was $1.7 billion, above the company’s forecast of $1.6 billion, reflecting “ongoing expense management and timing of hiring and content spend,” Netflix said. The company sees second-quarter operating income of $1.6 billion, with operating margin declining to 19% from 20%, largely due to appreciation of the dollar against other currencies.
Netflix said it bought back 1.2 million shares in the quarter for $400 million.
Netflix said its long-term financial objectives remain unchanged—it seeks to produce double-digit revenue growth, while expanding operating margins and delivering growing positive free cash flow. The company added that it expects constant currency revenue growth to accelerate during the second half of the year as the paid sharing program rolls out and the advertising business grows. Netflix said it still expects full year operating margin of 18% to 20%.
As for recent price cuts in some markets, Netflix noted that in December 2021 the company cut prices in India by 20% to 60%, spurring better engagement and 24% growth in currency neutral revenue in the country in 2022. Encouraged by that result, the company cut prices in 116 countries in the first quarter, which together accounted for under 5% of 2022 revenue.
On the topic of the recently introduced ad-supported subscription tier, Netflix said that it is “pleased with our progress across all key dimensions: member experience, value to advertisers, and incremental contribution to our business.” The company said engagement with the ads has been above initial expectations. Netflix also said the ad-supported tier now has about 95% content parity globally with ad-free plans.
Netflix today also announced that it will completely shut down its original DVD-by-mail service in September.
“On September 29th, 2023, we will send out the last red envelope,” the company said on Twitter. “It has been a true pleasure and honor to deliver movie nights to our wonderful members for 25 years. Thank you for being part of this incredible journey, including this final season of red envelopes.”
Dominion payday: Fox to pay $787MM. Not surprising I don't think anyone left of Joe Arpaio actually believed this nonsense. Let Rupert and his insurance companies bleed a little.
A settlement has been reached in Dominion Voting Systems’ defamation case against Fox News, the judge announced Tuesday. The network will pay more than $787 million to Dominion, a lawyer for the election technology company said.
Fox acknowledged in a statement the court's rulings finding "certain claims about Dominion to be false."
Another good day today. We should be aware that options will expire on Friday so market direction that is often driven by market makers seeking additional profits in the few days before expiration can often change afterward.
I was glad to see this piece focused on the real problem at Fox. They will say anything that keeps their viewer count as high as possible. When they began questioning the Jan 6 uprising and the false claims regarding the 2020 election their viewers just moved over to even crazier outlets. The Dominion lawsuit unearthed evidence of this. At the request of other on-air personalities one of their colleagues was fired for telling the truth about the election. The e-mails and texts are quite funny.
On the contrary, pre-trial documents filed by Dominion show the opposite: Fox's content is determined largely by the audience.
And let me add, there's no such thing as market manipulation..:). I'd love to know which market makers bought all the BK stock to drive up the share price in 15 minutes and who bought all the super cheap calls just before then.
Yes, that's one reason I'm not selling any more calls until after that time. Did you notice that 2/3 of the April $45 volume happened today!?! Glad to be on the winning side of this roller coaster, Someone bought a boatload of those $45 calls this morning for a dime and they're 70 cents this afternoon. Not bad for a day's work.
About 10 minutes after I bought back my calls for a dime, BK popped almost 5% to $44.85. I'd like to take credit for being that smart but the timing was pure luck. It's a real have-your-cake-and-eat-it-too moment.
Thanks, that's really useful data for those of us who use REITs in our income accounts. It's no surprise that San Francisco and Seattle are the two cities hit the hardest. Silicon Valley's other problem is that they're losing companies to Texas and other locations. Since the beginning of the pandemic both of our adult kids are able to work from their homes about 80% of the time. They use Slack, Chatter, Discord and MS Teams to maintain near in-office contact throughout the day. Companies are realizing that most people work more hours from home as they don't have to deal with commute time. New York City, Washington DC and California all have approved major funding to subsidize the transformation of office space to residential housing.
So much for raising cash with BK. My in-the-money April $45 calls are now out of the money calls. With the horrible earnings announcement of State Street, (STT), an asset managing peer, it didn't matter that BK announced excellent earnings this morning, (up 30% YoY). So for now, I'll hold my shares and wait for them to recover.
Bought to close BK April $45 calls @ 10 cents for 94% gain. This sounds good but now my BK shares are only about 30 cents in positive territory. This is always the risk one takes when selling options to add to profits on a planned exit - the exit is always delayed. Three day chart below:
Good day for those of just enjoying the spring weather..:). Income account and preferred account both up over 1/2% today. I would encourage Ms. Market to continue this trend.
This made me laugh. It's certainly a clever interpretation.
Even though lumber doesn’t continue absorbing carbon dioxide, the company takes credit for another 11 million tons of carbon held in those wood products. It reasons that carbon continues to be stored in the lumber after it goes into houses and other structures, which wouldn’t be the case if a tree fell and decayed on the forest floor.
Ocean carbon uptake is the elephant in the room for any plan to remove carbon from the atmosphere. If our plan is to remove carbon from the atmosphere the oceans will begin releasing carbon to mitigate the effectiveness. This seems like a better plan.
To help scale this CO2 problem, the larger test unit being deployed next year will remove 10 metric tons per day. Worldwide we add 1,000,000 metric tons of C02 every 15 minutes. The scale of the problem is one reason I'm skeptical that we'll actually accomplish a solution that matters while we continue to use fossil fuels.
Kind of old news at this point. He's already gotten engaged again to another woman but that was just called off. Apparently he wasn't that busy..:)
I blame you for making me read this article...:) So roughly 15% of land in the US currently planted with corn may need to be repurposed in 20 years or possibly, let me think about it...a new market like China or India may need to be found sometime between now and the 2040s or Deere could find their business challenged.
Even for the Root of drivel, this is the worst spreadsheet logic I've read in a long while.
As I've mentioned before, Al Root is maybe the worst writer at Barron's.
JPM crushed it last quarter, up 7.5% today. Citi also had good earnings and was up almost 5%. I own both of these along with BK. I've sold 4/21 in-the-money covered calls on my BK shares to raise some additional cash in case this exuberance proves to be irrational..:). Have a good weekend.
This article should be interesting for you Nick. As you know the best modern processors generate massive amounts of heat which require liquid cooling to manage. All processors are also inefficient like an incandescent light bulb where portions of energy consumed are lost to heat. Scientists at USC have tested a substance that doesn't follow standards for thermal conductivity - it cools as pressure is applied. From SA:
Feeling the Heat
Strange material breaks a classic rule of physics
A basic tenet of college physics is that as pressure increases, thermal conductivity—a material’s ability to conduct heat—increases, too, because atoms that are squeezed together interact more. More than a century of research has confirmed this rule. But engineers have now found an exception: when they applied intense pressure to boron arsenide, a recently discovered semiconductor material, thermal conductivity decreased.
The finding, described in Nature, challenges established theory and potentially upends current models of how substances behave under extreme conditions. “Now that we’ve made this first discovery, we think this can’t be the only material with abnormal behavior,” says study senior author Yongjie Hu, a chemist and mechanical engineer at the University of California, Los Angeles. If other substances show this property, “the established understanding of thermal conductivity might not be correct.”
In prior studies, Hu and other researchers identified boron arsenide as having exceptionally high thermal conductivity. The scientists also calculated that conventional thermal conductivity rules might not apply to it in certain circumstances. To test those predictions, Hu and his colleagues placed a tiny piece of boron arsenide less than 100 microns thick in the gap between two diamonds. They applied pressure to the diamond sandwich to create a force on the boron arsenide hundreds of times greater than that at the bottom of the ocean. The researchers used ultrafast optics, spectroscopy and x-rays to document how boron arsenide’s thermal conductivity begins to decrease as heat propagates across the sample and it is subjected to intense pressure.
They observed that the decrease comes from similar types of heat waves overlapping and canceling one another out—a phenomenon predicted by quantum mechanics. If Hu and his colleagues can show this behavior generalizes to other materials, he says, physicists may have to revise established models for environments such as outer space or planetary interiors, including Earth’s. The latter could alter predictions about climate change because terrain temperatures are affected by what happens inside the planet.
The new study provides “the first and best experimental evidence that I know of to show that thermal conductivity can be tuned,” says University of California, Berkeley, geophysicist Raymond Jeanloz, who was not involved in the research. The finding, he adds, “opens up the possibility” of advanced technologies that save energy and cool electronics by controlling thermal conductivity.
Added to FUN @ $41. These shares are lightly traded and require limit orders.
Libre 3 is much improved over Libre 2. Transmitter functions for 15 days and does not require patient interaction to download data. Both application and removal of the device are much easier. Most importantly it allows patients or care givers to right size daily insulin doses and keep patient's glucose levels in range.
My understanding is that this is a stand alone monitor without internet connectivity. It's a good option for someone who is capable of self monitoring and does not have a smart phone. The downside to using a stand alone system is that data cannot be downloaded to a centralized database. That would be useful in a hospital or nursing home environment.
Due to recession concerns, Cedar Fair LP, (FUN), has dropped a bit over 10% in the last two months. It closed today at $42.40. This is a core investment for me and I'll be adding here. It's currently trading at ~12X 2023 earnings as they continue to pay down debt accumulated during the pandemic when they were shut down. The dividend is still low at 30 cents a quarter. Barring a new pandemic, I expect FUN to reach $60 a share in the next 2-3 years. A good amusement park is almost recession proof.
Thanks for the reply. I should have said the energy component was very similar and your point is an important one. When inflation began the PPI numbers were much higher than CPI numbers as companies were initially reluctant to pass on all the cost increase to consumers. It's like a wave peaking first for business, then the consumer, then back to business as consumers want an income adjustment, then business raises prices again and begins to lay off workers to mitigate profit declines. Then, maybe a recession.
Looking at inflation costs to investors the CPI has moved up 16.5% since January of 2020 so more than half or our average ~8% gains have been eaten by inflation. As many others do, I measure the SPX from January 1, 1950. That cuts out the WWII gains and the late 1940s market malaise while the economy adjusted to a post war reality. Looking at the pre-pandemic peak of 3,386 the SPX was running behind the expected 3,664. By January 2022 the SPX had peaked at 4,796, well ahead of the expected 4,274. If we're right on target by the end of this year the market will end at 4,985. I don't expect that as we'll still be working though inflation this year but we may well hit 5,383 by January 2025. If anyone is curious, we should hit SPX 10,000 in January of 2033 if this 73 year relationship holds. And one more note, since January 1950 inflation has averaged ~3.7%.
Data source, Macrotrends:
https://www.macrotrends.net/2324/sp-500-historical-chart-data
Very similar to the CPI numbers and related to a sharp fall in the cost of oil and nat gas.
Good news for the Southwest. There should continue to be additional moisture for the next couple of years.
I agree with the writer. I sold my holdings in O earlier this year to raise some money for a new rental property, (our own little REIT..:), and kept NNN. I think it offers better value. I would retake a position in O if it moves into the lower 50s.
Cost of fuel will be going up, it has to.
While this is an interesting response, affluence or poverty is obviously a false dilemma. My concern is quite different from your takeaway. As the world is becoming more affluent traditional companies like MCD, MSFT and WMT are more likely to grow their profitability than any company spending money on sustainability efforts that are not required by law or that increase profitability. It's not unlike a prisoners dilemma. We humans will continue to choose what's best for us individually and the outcome will very likely be sub-optimal. I'm not judging, just observing a 60 year climate trend, the ho-hum response and adjusting my investing and family location accordingly.
Agree completely. Most 'sustainable' companies of any size are simply green washing and I'm not trying to blame them, heck, I invest in plenty of them. ESG is not on my list of a dozen or so basic requirements before I invest. I and every successful investor I know invests to make money, not to save the world - that would be a fools errand.
With the nickel guidance from AAL and a 9%+ drop today, gamblers could buy slightly out-of-the-money April 14, $13 AAL calls for 24 cents a share and hope for a bounce up on good news from DAL tomorrow which may lift all boats. Not my kind of investment but DAL is a better run company than AAL. How did they manage to make so little money in this environment?
Another idea is to stick with DAL and buy April 14 $33.50 for 92 cents. Both of these are pretty much all or nothing bets, just like Vegas..:)
While I agree that the board's premise has value and the investing ideas discussed here are compelling, I would suggest that this level of growth in affluence is unsustainable unless one accepts the idea that the environment in which we become more affluent does not matter. Possibly we should define what 'a sustainable manner' means and begin searching for those companies. To my mind only a carbon and resource neutral company is sustainable. Others may disagree and I'd like to hear those ideas.
Delta Airlines, (DAL) is reporting tomorrow. Expectations are that they'll have a good report since the cost of fuel is down sharply and the cost of airline tickets are up.
The SPX is directionless this morning. It dipped below 4,100 for about 10 minutes and buyers came back in. Looking at sectors, consumer discretionary is down 3/4% and real estate and industrials are up 1/2%. Everything else is just muddling along.
The root of inflation is energy cost. As it moves up the cost of everything else begins to move up. As it moves down everything else begins to move down. There has been about a 3-month lag in this inflation cycle as you can see in the BLS chart below. What's happening now is that business and employees are trying to catch-up to the inflation from several months ago. Medical services were up .6%, transportation services 1.4%, (think the cost of an airline ticket), shelter up .6%. On the other side gasoline dropped 4.6% and nat gas 7.1%.
More specifically on the inflation front airline tickets moved up 4%, auto insurance 1.2%, bakery products 1.9%, meats/eggs 2.8%, women's clothing 4.3%, children's footwear 2.9%, auto parts 1.2%, hotels and other lodging 3.1% and financial services 1.8%. These price increases will begin to moderate and if there's a recession, they'll fall.
I'll take it. At this point if we get another chance to do some buying below 3,900, that's a gift. Although CPI came in low at .1% for all items, less food and energy it was .4% so the market is still cautious and looking forward to earnings for JPM, WFC, C and BLK among others on Friday. I suspect this quarter will be a mixed bag.
Since I have a couple of outstanding calls my preference is for the market to move down through April options expiration but Ms. Market doesn't often listen to me.
Apologies as I've posted this before but sometimes it takes more than one iteration of thought before I give up an old idea and accept a new one. I'm not sure how long I've been posting on this board but I've found the board name intriguing since I was first introduced to it. For me the core question has been; if climate change is a problem we should solve, is affluence more problematic than population growth? I've always thought population growth is the core issue and that was likely correct 20+ years ago. As population grows, incremental changes in middle class consumption of fossil fuels have always been more than off-set by a larger population. We can confirm the veracity this hypothesis by measuring the growth or lack thereof, of CO2 in the atmosphere. No one needs to look this up, growth is unrelenting.
The problem in the 21st Century is that we in the Western world have expanded the idea of the middle class life style to the ROW and it's growing exponentially faster than the overall population. So is affluence now the primary climate problem? If so, I would suggest we've created a problem no one of any standing will even try to solve over the next 20 years because the right to affluence is the fastest growing 21st Century religion and it's about to grow even faster over the rest of the decade according to a 2018 Brookings study, (link below).
So the question is; if the study is reasonably correct and the middle class will grow ~40% over this 12 year period how can we expect atmospheric CO2 to moderate? Should we care when it's clear almost no one does, including the rather righteous Tesla driver? And that's a first world issue. How do you tell a newly middle class person in China who's parents worked in a rice field that their affluence is a problem? How about India? Their economy is only beginning to take off. I might be short sighted but I don't see a solution other than ensuring you're more affluent than the great majority of people seeking affluence. Crass of course but it seems to me that's what the majority of people in the world are doing.
Brookings repost