Dear Netflix subscribers: Thank you (investment content)

"Ash78, voting early and often" (ash78) 01/26/2018 at 09:38 • Filed to: Investing

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I just looked down and realized the stock was trading at $272.

I paid $8.45. That’s a 3,200% return.

WHY DIDN’T I BUY MORE?!?!

Oh, wait...because at every step of the way, people said it was overvalued.

Other than that and a few others, I’m a pretty defensive investor and I’ve been preparing for a long recession for the past couple years (Netflix is a part of that strategy, actually). I still believe the market is artificially propped up by underemployment, cost-cutting, and the false hopes that the current tax plan will translate into more disposable income for consumers. I’m skeptical, but I’m also not selling much — just keeping a healthy amount in cash, REITs, and blue chips for when the day of reckoning comes.

Full disclosure: this is all in retirement/college accounts. In real life, I’m barely making ends meet. It’s hard to watch sometimes...

rillweid - Now with more TRD and less TDI > Ash78, voting early and often 01/26/2018 at 09:51

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If Powell can get inflation up we might be able to sustain this growth and not overheat. However, I’m feeling some kind of shock coming on that will correct the market, it’s just hard to say what it is.

WilliamsSW > Ash78, voting early and often 01/26/2018 at 09:51

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Same here - I don’t think the economy is bad by any stretch, but it seems to me that all of the good news is already priced in.

One comment though - REIT’s don’t seem to me to be a place you want to be when that day comes?

Ash78, voting early and often > WilliamsSW 01/26/2018 at 09:57

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Good point...they’re already underperforming, but paying decent dividends. But yeah, a lot of potential downside there. It all depends on whether you think all assets will drop at the same time (equities, RE, commodities). I actually think real estate will hold up okay because people will flee to things with tangible, useful value. But I’m just guessing. There is so much foreign, dumb money pouring into Commercial RE out West, who knows (note; the expression “dumb money” isn’t a slight to foreign investors, just that fact that they’re overpaying and not being as critical of the markets as local investors).

fintail > Ash78, voting early and often 01/26/2018 at 10:19

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You should see residential RE in some areas out west. The unvetted foreign money isn’t dumb, but is often dirty. When there’s a local affordable housing crisis, lots of vacant stock just rotting away, and more than half of sales in your zipcode are to offshore cash buyers, something is rotten. Money laundering at the very least. Vancouver repeated.

WilliamsSW > Ash78, voting early and often 01/26/2018 at 10:26

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Yeah those dividends are nice, for sure. The thing about real estate is that it’s very boom/bust - but it does tend to operate on a different cycle from much of the market.

I think the trick here will be in what corporations do with their tax cut - some will be invested in factories, jobs etc; some will be returned to shareholders; some will be used for acquisitions- - the more the $ are skewed toward the first on that list, the better the general public will be.

All of this is reminding me that I need to rebalance my holdings— Apple is to me what Netflix is to you, and I’ve been slowly selling it off for a while to avoid having too many eggs in one basket.

Ash78, voting early and often > fintail 01/26/2018 at 10:29

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I hadn’t even thought about the laundering aspect, honestly. Very true. Funny thing is that while banks are concerned about the source of the funds (for national security reasons), there’s not much to stop foreign investors from showing up and paying cash.

I wonder if the regulations will change to combat this. Imagine it like a giant offshore bank for them, but in hard assets instead of cash.

It makes me sick because it’s like mobsters gentrifying the country and pushing the locals out. Not a great sign.

Ash78, voting early and often > WilliamsSW 01/26/2018 at 10:38

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LOL, Apple is my #2 holding (for individual stocks, that is...I have a lot more in various 401k funds, etc)

And Amazon is #3.

I’ve sold off some of all of them over the years. You could say I’m a little too heavy in “tech” but that sector designation means less and less over time. Amazon especially is already more diversified than most companies their size.

fintail > Ash78, voting early and often 01/26/2018 at 11:15

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For all the talk of “vetting” by the new swamp-filling wannafascists, there’s very little of it when it comes to this money - heck, when son of a conman son in law of a conman Jared is out begging this money to come on board, you know that all backs are turned. I think banks may put on airs of being concerned, but when there’s no enforcement, there’s no reason to care.

I don’t see such regulations coming on board in the near future, not in this anti-regulation regime. At most, there might be a meaningless locally-induced tax on dirty money transactions like exists in Vancouver - but when you’ve embezzled Scrooge McDuck’s vault and are itching for a way to transfer it before the axe falls at home, it doesn’t slow anything down. Much of the lower mainland of BC is now destroyed for normal income buyers, and many areas around Seattle are now in the same boat.

It’s interesting to watch, as the market here looks like a bubble, but there’s so much unchecked non-local demand, combined with a helping of high salary tech types, that a bubble pop might just mean slow growth rather than deflation.

Ash78, voting early and often > fintail 01/26/2018 at 11:23

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I recently heard (insider info, but not sensitive) that for the first time in Commercial RE history, more deals were being done by private equity than by banks. To my knowledge, private funds and investors don’t really have to check into anything — they just lend the money and/or go into joint ventures with anyone (which banks can’t legally do without an OFAC check — terrorism, money laundering, etc)

fintail > Ash78, voting early and often 01/26/2018 at 11:31

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I suspect it’s a similar situation with so many residential transactions in my area going to cash buyers. These people aren’t getting loans to acquire the cash, they just somehow mysteriously have it. Spend millions without a paper trail, now you have residency and a way to cash out ill-gotten gains.

Private equity is no doubt a good vehicle for malfeasance. I also wonder what banks can legally do, and what they actually do.

Mechanically > Ash78, voting early and often 01/26/2018 at 12:39

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Netflix as a defensive investment?

Ash78, voting early and often > Mechanically 01/26/2018 at 13:04

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Absolutely. Cheap and recession-proof. When times get tight, people cut the cable and flock to streaming. They weathered the great recession very well.

Mechanically > Ash78, voting early and often 01/26/2018 at 17:52

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I’ll be danged. Moreover, I like your logic.