Netflix Is Exploding Higher…

Earlier this month we pointed out some interesting price action on Netflix shares:

Today they are trading up over 19% on a great quarter:


It is clear by the degree to which they exceeded analyst expectations that there will be a considerable revising of models over the next little while. Look for NFLX to trade higher on a tide of analyst upgrades. Also, have you seen this trailer for their next ‘big’ show:

Perhaps it might add a few more UK subscribers…

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They’ve Talked The Talk. Can They Walk The Walk?

The price of oil has surged recently on talks of production restrictions by OPEC and Russia:


At the Schroders conference in Lisbon in September, someone made a very interesting remark: “if the OPEC guys actually thought they could pull off production cuts, the price of Brent would be up through $60 on insider trading…” I had never quite thought of that ‘insider trading’ dynamic, but it makes sense:

1) An OPEC minister or a proxy calls his broker in London
2) Buys oil futures
3) Broker gets the hint, piggybacks on the trade.
4) This starts happening at a number of London brokers
5) Oil price gets driven up on evident insider trading

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Are Millennials Switching Off Social Media?

Here’s a link to an article in the Financial Times about millennials switching off social media: Are Millennials Switching Off Social Media?A

I found the authors comments about early adopters of switching off social media to be a bit off the mark. However, what I did find interesting was the following quote:

“One of my friends was rejected from a job as a florist because she didn’t have enough Instagram followers. She had about 300, but they wanted 2,000 to 3,000 as evidence of status. This is not uncommon.”

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The Establishment -vs- The Intangible S&P 500

Our superintern Krista found this chart and link while I was away in London for the past two days:


It shows how the majority of assets for companies in the S&P 500 Index are no longer hard assets such as equipment, inventories and land, but intangible assets such as goodwill and brand recognition: S&P 500 and Intangible Assets

I agree with the author that this dynamic is yet to be fully understood by the political establishment or Wall Street. A rational counterargument might be that this simply means that the current valuations of these companies with such high levels of intangible assets are ridiculous and can not hold. The problem with this argument however, is that these companies continue to make money, and the fundamental underpinning of security valuation is future earnings. The nature of business is changing, and fortune will favour those that accept and identify opportunities caused by this transition.

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