Illumina ($ILMN), AbbVie ($ABBV), Gold ($GLD)


Illumina ($ILMN) ◾ Biotech


Since peaking in July, the stock has fallen 25%. In July, Illumina lowered guidance for the year and expects revenue growth of 6% compared with its previous guidance of 13-14%. They blame slowing revenue on problems with its population genomics initiatives, weakness in the direct-to-consumer market, and lower sales associated with its non-high-throughput sequencing systems.

Read More

This is Why Netflix Will Crush the Competition: They Take More Swings Than Anybody

📺Netflix and the Current OTT Landscape

Important: Good, even great companies can make bad investments if the price paid is too high.

Last week, Netflix ($NFLX) missed their subscriber target by 2.3 million. In addition, they lost 100k subscribers in the U.S., and their stock fell ~16% on the week; the largest weekly decline in years.

After the miss, a narrative started to develop: (i) They are losing two of their most popular shows — “The Office” and “Friends.” How will they replace them and keep subscribers from churning? (ii) They have reached the upper limit on their ability to raise prices.

We will address those narratives in a minute. But first, let’s back-up and go over some common terms used when describing various OTT players and get a snapshot of the current landscape.

Read More

🏠Long Zillow. Short Real Estate Agents?😔

👋Hello from the home office. Warning: This is quite long:)

I spent a lot of time this week thinking about Zillow ($Z) and the future of real estate. I will update this post as time goes on and as more information comes in.

And no, I don’t think all real-estate agents will go away. I just think there will be less of them. And the way they are compensated will change or be less than current state (6%).

MUST READ: CNN penned a good article about why a current class-action lawsuit could do away with the 6% real estate commission. It’s really long, but lays out why major changes in the real estate industry could be forthcoming. And what the affect on agents, brokers, and consumers could be.

In the article, they asked Rob Hahn what would happen to the industry if the lawsuit is successful👇

“It kills the industry,” said Rob Hahn, a real estate marketing consultant with the firm 7DS Associates, who predicts the number of people in the profession would drop to just 200,000 if the lawsuit is successful. “A lot of things that we as consumers value go away.”

Some context: There are an estimated 1.36 million real estate agents. A drop to 200,000 would be jarring.

Resources used in this article:

Important: Just because we’re bullish on the long-term potential of a business, doesn’t mean we’re bullish on their stock. Good companies can make bad investments if the price paid is too high:)

Read More

Netflix’s Moat, Lululemon Defies Retail, Disney Breaks Out

👋 Hello from the home office.

Today’s Agenda

  • Netflix might lose its best shows in the next few years. Will people still subscribe?
  • Lululemon has defied the retail carnage. How?
  • Disney breaks out of a four-year base.

What are your favorite shows on Netflix?

I primarily watch reruns of The Office, Friends, and Parks and Rec. The WSJ reports those shows could be removed from Netflix when their contracts expire in 2021.

Two alarming facts for Netflix:

  • Three companies are launching competing streaming services: NBC Universal, AT&T, and Walt Disney. Their T.V. shows and movies make up 40% of the viewing minutes on Netflix.
  • Eight of the ten shows people spent the most time watching in 2018 were reruns and might not be on Netflix in a few years (see chart below).

Source: WSJ

Read More

Apple’s New Products, The Inverted Yield Curve — Explained

👋 Hello, in today’s update:

  1. Apple debuts four new products
  2. What is an inverted yield curve? And what should investors do about it?
  3. What else is happening?

1. Apple Debuts Four New Products

Apple is expanding its service line-up with four new products set to be released throughout 2019.

Watch the keynote

  • Apple TV+: Not many specifics, didn’t say how much it would cost??? They will have original content from Oprah, Spielberg, and Reese Witherspoon. That’s about all we know.
  • Apple News+ (The Netflix of magazines): Cost $9.99 per month. Combination of magazines like Time, Sports Illustrated, and Rolling Stone. In addition, they added publications like the WSJ, The Skimm, and TechCrunch.
  • Arcade: Made for gamers. One subscription, no ads — you can jump from your iPhone to your iPad — to your mac, and pick up where you left off. I took a peek. Their games look cool, but I doubt we’ll be seeing Madden, Call of Duty, and other popular games with this bundle. It seems they are curating the best indie games you find in the app store and sticking them in Arcade.
  • Apple Card: Apple’s take on a credit card. Built on simplicity, transparency, and privacy.
    • Looks great. Just like you would think an Apple product would look. Minimal design, no numbers, and limited text.
    • No fees, no hidden cost.
    • Real-time fraud protection.
    • Coming this summer.

Read More

Video: These oil companies offer attractive dividends; Facebook keeps humming

Good Evening! One housekeeping item before we get to today’s update.

I am trying out shorter emails, delivered two to four times per week, instead of one long email, delivered once a week. Each email will contain two to three items, instead of 10.

Let me know what you think.

Oh, and I am introducing videos!

Oil Companies are Printing Money, Again…



Companies mentioned in the video

  • Exxon (XOM)-Div. yield: 4.74%
  • Shell (RDS.A)-Div. yield: 4.79%
  • Chevron (CVX)-Div. yield: 4.12%
  • BP (BP)-Div. yield: 5.66%

Read More