#153 -Traditional Music is dead ft. Bad Bunny, Kim Kardashian, and Kylie Jenner
Kim K and Kylie are sooo like mad at instagram
Millennials still live at home but not like you think
Amazon is buying primary care clinics!
Traditional Music is dead ft. Bad Bunny
North Americans Confidence In Higher Ed Drops Sharply
LVMH Luxury is still absolutely BOOMING
Nobody Wants to work… and they never ever wanted to in the past
In this week's episode of Reformed Millennials, Joel and Cam talk music virility, millennial housing trends, Amazon taking on healthcare and the incredible ability for Bernard Arnault’s LVMH to grow revenues.
PS: The links at the bottom of the newsletter are fantastic this week.
If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.
👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
“These past few yrs has been a big pain in the ass and a total distraction. It made no sense on the way up. It makes no sense on the way down
We’ve been the same business the whole time. Just have to ignore it”
One advantage of this insane market is that companies/leadership teams showed their true colors.
It’s a minority, but the teams who have kept their heads while being absolutely whipsawed by the market during a brutal operating and capital environment are the ones you want to own
Thin markets can move fast. We saw it last week. Quite a few stocks went up 10-15% on little volume only to give most of it back. The few stocks near 52-week highs that tried to break out failed, only to find support near their rising 10 and 20-day EMAs. Typical bear market action.
The indexes had a good run since the last CPI was released about ten days ago. Now it’s time to test the validity of this rally.
If QQQ cannot hold 295, this rally can be considered over.
The same can be said if Russell 2k IWM doesn’t hold 175.
The next week is likely to bring extra volatility to the tape.
There’s an FOMC meeting on today.
The Fed is expected to raise interest rates by 75bps.
Anything more or less would be considered a surprise that it is probably not priced in. The market will also pay attention to Fed’s future intentions.
We also have earnings season which has just begun. Snapchat fell 40% after missing estimates and citing that the margins in the advertising business are starting to shrink due to companies cutting their marketing budgets.
Will find out if this was just a Snapchat problem or something much more widespread. Big Tech reports next week and everyone will be paying attention. If Apple, Google, Facebook, Microsoft, and Amazon mention troubles and cutting costs, it will be felt everywhere.
What will matter the most is the market reaction. When sentiment is improving, the market is looking for the slightest reason to go up and vice versa.
If people want to put money to work, it will be seen in the price action – stocks will have high-volume breakouts and low-volume pullbacks that will resolve higher.
Downside gaps won’t last long and they will be faded as we saw in financials in the past week or so. If the market has further to go down, the good news is not going to bring a sustained move higher.
You Need These 8 Mental Models For Investing Success - from steady compounding
Buffett says that Munger has the best 30-second mind in the world.
He sees the essence of everything before you even finish the sentence.
That’s because Munger has a robust latticework of mental models in his mind.
These 8 mental models will help your investment process:
1. Occam’s Razor
It states that “it is futile to do with more what can be done with fewer”.
The simplest explanation is most likely the right one.
Similar to Peter Lynch’s 2-min drill: If truly understood, the thesis could be summed up in 2-min.
2. Loss Aversion Bias
The pain of losing is twice as immense as the pleasure of gaining.
We tend to avoid losses over earning gains.
This can lead to an overly conservative portfolio that does not deliver the returns needed for an investor to achieve their financial goals.
3. Mean Reversion
Most things revert to the mean.
In investing, this usually refers to profitability, growth & valuation. If an industry is high profitability, it’ll start attracting competition. Unless there’s an economic moat, excess profits will be competed away.
4. Economic Moat
A strong economic moat exists when there’s a long-term competitive advantage.
Moat protects a company’s profitability and growth from competition.
•High switching costs
•Economies of scale
5. Luck-Skill Continuum
Unlike chess, investing is more like a game of poker.
Success in investing is partially determined by luck.
A good outcome may be the result of either a good or bad process.
Evaluate your investments by your process, and less on outcomes.
6. Survivorship Bias
Without considering companies that have failed, we assume that a company’s success represents the entire industry.
It is common for investors to cite Salesforce’s success as a yardstick for what other loss-making SaaS companies can accomplish.
7. Parkinson’s Law
Work expands based on the time allocated for its completion.
Ever heard of analysis paralysis?
Sometimes investors spend way too long analyzing a company.
Or worse, spend way too much time reading investing books.
Without actually investing 😅
8. Authority Bias
Blindly believing the opinions of authority figures and attributing greater accuracy to them.
E.g. Jim Rogers sounds the bells of pessimism every year.
He’s wrong WAY more often than he is right. But some folks buys it.
💸Reformed Millennials - Post of The Week
Netflix Talks about ad-based models, killing the password share, and laying off its workforce.
FROM THE EARNINGS CALL:
Co-CEO Ted Sarandos:
On losing 200k subs in Q1 2022:
"Consumer reactions are taking place in an inflationary context. Every customer asks themselves the question of the value of a subscription in relation to its cost."
Netflix have 10m subs in France:
"We have 222 million subscribers worldwide. In France – and this is a figure that we have not revealed since 2020 – we now have more than 10 million households (instead of 6.7 in 2020)."
On laying off 3% of the workforce:
"We are adjusting to slower growth relative to projections. Without limiting expenditure on content production: it will reach £17 billion in 2022"
On competitors like $DIS:
"The market has always been tough. Disney was already a rival long before launching its platform when its films were shown in cinemas and on DVD"
On offering an ad-based tier:
"By offering it to customers who want to pay less and who are not put off by advertising...The date is not fixed yet. But the launch will be worldwide. This will complicate our model but will allow us to broaden our audience"
"Our subscription was designed on the basis of one sub per household...We're testing a new billing system for additional profiles not living under the same roof...Customers who share passwords will have to pay a little more to continue doing so"
The greatest single stock market chart.
🐦 Twitter Thread of The Week 🐦
Genius that failed - museum from Trung Phan
🔮Best Links of The Week🔮
Study: Millennials didn’t stray far from where they grew up - AP News
Oil Slips Revert as Demand Outweighs Recession Fears - Bloomberg
Pension manager AIMCo paid $3.6-million to departing executives after $2.1-billion loss - Globe and Mail
Adopting multi-generational homes in Canada - Globe and Mail
Shopify Cuts 10% of their Staff - News @ Shopify