#104 - Afterpay & Square Say Buy-Now-Pay-Later For EVERYTHING, Youtube Ad Biz More Valuable than $NFLX + CAD Consumer Health Tech.
In this week's episode of Reformed Millennials, Broc and Joel discuss the Buy Now Pay Later craze, especially the Square / Afterpay deal — they revist some surprising advertising spend numbers released from FAANG, talk a bit about a Canadian startup who has interesting take on consumer health tech, and lastly try to get more context on how AMD fits into the narrative of vehicle chip shortages in Canada.
Listen on Apple, Spotify, or Google Podcasts.
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Johnson & Johnson trying to break out of a 6-month base.
If we're above 172, a trader would want to be long $JNJ with a target up near 210-212.
The risk here is very well defined. If we're not breaking out from this base, then we do not want to own it. It's that simple. And we likely don’t want to be too “risk on” across a lot of the aggregate market.
When it's going, you'll know. If we're not out of this base, then be patient with it.
But the risk vs reward here is very much skewed in favor of the bulls IF we're above 172.
The next one Emerging Markets and Regional Banks losing their 2018 highs:
This is a big one. If you want one chart to watch as we head into August, this is it.
They need to get back above those 2018 highs asap, or else.
There's a lot of downsides if they can't recover. Which could also bleed into our North American markets.
A kick save - and a beauty, if you will, is what's necessary here for Regional Banks and Emerging Markets.
Let's see if we get it.
💸Reformed Millennials - Post of The Week
A must-read from Matthew Ball on the Metaverse
From the article:
How Should We Think About the Metaverse and When Will It Emerge?
With the above in mind, let’s turn to the Metaverse. The Metaverse is often mis-described as virtual reality. This is like saying the mobile internet is the iPhone. The iPhone isn’t the mobile internet; it’s the consumer hardware and app platform most frequently used to access the mobile internet.
Sometimes the Metaverse is described as a virtual user-generated content (UGC) platform. This is like saying the internet is Yahoo!, Facebook, or World of Warcraft. Yahoo! is an internet portal/index, Facebook is a UGC-focused social network, World of Warcraft is an MMO. Other times we receive a more sophisticated explanation, such as ‘the Metaverse is a persistent virtual space enabling continuity of identity and assets’. This is much closer to the truth, but it too is insufficient. It’s a bit like saying the internet is Verizon, or Safari, or HTML. Those are a broadband provider that connects you to the entire web, a web browser that can access/render all of the internet’s webpages from a single screen and IP identifier, and a markup language that enables the creation and display of the web. And certainly, the Metaverse doesn’t mean a game or virtual space where you can hang out (similarly, the Metaverse isn’t now ‘here’ just because more of us now are hanging out virtually and/or more often).
Instead, we need to think of the Metaverse as a sort of successor state to the mobile internet. And while consumers will have core devices and platforms through which they interact with the Metaverse, the Metaverse depends on so much more. There’s a reason we don’t say Facebook or Google is an internet. They are destinations and ecosystems on or in the internet, each accessible via a browser or smartphone that can also access the vast rest of the internet. Similarly, Fortnite and Roblox feel like the Metaverse because they embody so many technologies and trends into a single experience that, like the iPhone, is tangible and feels different from everything that came before. But they do not constitute the Metaverse.
The China Tech Crackdown - MUST READ
Tencent's WeChat has suspended new signups. The $100bn tutoring industry has been told to go non-profit. Didi might delist. Chinese tech indices are down 15% in the last two days. Remember when this was all about Jack Ma? Remember when WeChat was going to go global?
I'm not a China analyst, but there's a lot going on, from the CCP asserting its authority to overdue intervention into some under-regulated spaces, with a dose of turf wars as well (what do the financial regulators think of the cyberspace agency deciding who can list overseas?). This also overlaps with China's intensified push for tech sovereignty, with some people suggesting it wants to rebalance from consumer internet to semiconductors and the other primary tech it depends on foreign companies for today (your iPhone is assembled in China, but all the high-value parts are made elsewhere).
But if it's not clear what's going on inside China, it's even less clear what this means for the rest of us. Will Chinese Internet giants be forced to make serious efforts to expand internationally? Does the creative torrent of Chinese consumer tech innovation slow down? Could it affect consumer electronics supply chains?
If you want to get a feel for whats happening - check out Chinese characteristics
YouTube and Brand Advertising
A big part of YouTube’s growth in recent years has been the growth of direct response ads; the big problem for companies like NBC, though, and the good news for Google, is that YouTube is starting to make major in-roads into attracting the pot of gold at the end of the TV rainbow — brand advertising. First, CFO Ruth Porat reported that “YouTube advertising revenues of $7.0 billion, were up 84%, driven by brand, followed by direct response.”
This was Schindler’s explanation for that brand growth:
Let’s move to YouTube, which had a great quarter with strong growth in both brand and direct response…First, brand. YouTube is helping advertisers reach audiences they can’t find anywhere else. According to Nielsen’s Total Ad Ratings Reach reporting, from Q4 ‘18 to Q4 ‘20, on average, 70% of YouTube’s reach was delivered to an audience not reached by the advertiser’s TV media. In other words, YouTube’s reach is becoming increasingly incremental to TV, an
These numbers, to be clear, are based on surveys — the biggest driver of YouTube’s improved brand numbers is almost certainly the COVID bounceback. At the same time, look again at those Olympics numbers. Sports may still be the linchpin of brand advertising, but that pin sure feels like it is about to pop, and YouTube is better placed than just about anyone to pick up the slack.
🌊 Best Links of The Week 🔮
💉 FDA Allows Pharmacies To Substitute Branded Insulin With Cheaper Biosimilar For The First Time
🏙️ NYC to Require Vaccination for Many Indoor Activities Such as Restaurants and Gyms
🧠 Embodied AI, Superintelligence, and The Master Algorithm
⚖️ The Activision Blizzard Lawsuit Could Be a Watershed Moment for The Business World. Here’s Why.
🌊 Canadian Companies Mentioned 🇨🇦
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