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Netflix is now worth more than $100B

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Re: Netflix is now worth more than $100B

#201

Post by losteric »

virmundi wrote: post #191
losteric wrote: post #85

Earlier quoted context omitted.

To what degree does income inequality, consumer debt, and rapidly rising barriers of entry to high-income fields contribute slowing GDP growth? Is there research and evidence on the subject? I'm just an engineer with basic financial survival skills... but blind intuition suggests fixing those problems is necessary for a sustainable growing economy. "Trickle-down" theory and growing inequality drains economic activity…

I'm not saying you're wrong. I understand where you're coming from. You raise good points. I think we need to add to this list one simple idea: regulation. Housing costs are terrible. They're getting bad even in small towns like mine. There is no way that my house is worth 172k. For many, especially in California and states that followed their lead, housing cost are largely, not solely, due to regulation on new house…

I'm a strong believer in using minimal but sufficient regulations and taxes to shape market growth.

There are some absolutely unnecessary regulations, like the loopholes Tesla has to go through to sell cars because traditional dealerships don't want to lose money, or unfair taxes against green energy - protectionism must die.

There are also outdated but reasonable regulations, like Seattle's density regulations. Our housing crisis is caused by the market lagging far behind economic growth because it took years for the public to recognize the city was growing, years to change the laws, and then more years for the normal construction timeline. Density regulations as a concept make sense, but we haven't figured out how to auto-scale limits to avoid falling behind.

And then there are areas where we do need more regulations. For example, we absolutely need more regulations on credit cards and loans in addition to better finance education in highschool. Consumers are responsible for being informed, but there's still no excuse for even offering to saddle someone with a high-interest loan that they can never hope to pay off... some people are simply too dumb to understand the math.

I like the phrase "evidence-based regulations", but sometimes the evidence is stale or measuring the wrong thing, and the data doesn't guarantee we implement the right system of incentives.

Re: Netflix is now worth more than $100B

#202

Post by jedberg »

jusonchan wrote: post #167
jedberg wrote: post #106

Earlier quoted context omitted.

Q4 is always big because people get new Netflix capable devices for Christmas.

Getting a device alone is not enough, they need to sign up too! And most devices comes with Hulu, Amazon, HBO, Fandango and a ton of other media apps.

Yes, but most of those devices come with free Netflix. Also, a lot of people get them specifically for Netflix (and not so much the other services).

Re: Netflix is now worth more than $100B

#203

Post by Balgair »

Retric wrote: post #87
eldavido wrote: post #42

Earlier quoted context omitted.

A lot of sophisticated financial people share your thinking. The problem is there's no growth to be found anywhere. People are cheering for 3% GDP growth in the US. Interest rates are at all-time historical lows, meaning discount rates are lower than they've ever been. These macro trends have added up to an environment where people are willing to pay staggering premiums for even a remote shot at growth. It's affectin…

Sustained 3% US GDP growth is overly optimistic. We have 0.7% population growth, and no obvious major investments. The computer boom is mostly over with the low hanging fruit taken. Prior to that we had IC engines and electricity, but nothing on the horizon seems to have that kind of potential to radically reshape society. And to double the economy every 25 years you need regular dramatic shits. PS: Look at the past…

The only things I can think of are:

1) AI. Somehow, we finally get the AI working, and it somehow produces a lot more jobs. I really think the opposite will happen, but who knows.

2) Climate Change. The ever rising waters and the ever worsening storms will cause nations to re/build large infrastructure projects. Think seawalls and repairing the NYC subway. I don't think that will be good, as it'll mostly just be debt spending, but who knows.

3) Biotech. With CRISPR and optogenetics combined, the ability to safely edit in vivo will explode. Change your eye color to pink in a week. New fruits and veggies. Everyone has a really skinny body-type. Etc. The FDA and other nation's agencies will be hesitant, but it'll happen either way. I think this has the biggest chance, though the time horizons are much longer than we are used to, maybe centuries.

Re: Netflix is now worth more than $100B

#204

Post by jjeaff »

kevin_thibedeau wrote: post #103
aphextron wrote: post #62

Earlier quoted context omitted.

>Cryptocurrencies and ICOs. What value is being created here, exactly? There's plenty of idealistic notions being thrown around, but I've yet to see a single, real, useful product or service materialize >Applied neural networks. Same. >Automation. This is way too broad to be invested in. Of course the world is automating at a greater rate, but is this a cause for growth? Will automated factories produce more goods fo…

> What value is being created here, exactly? It's the greatest advance in money laundering ever invented. For that to work the proles need to be conned into participating so there is plenty of transaction volume to hide in.

It's really not a great way to launder money. To keep it off the books, you will need armies of individuals going out and buying it with cash through forums or whatever. Same to convert it back to cash. Otherwise, you are just buying and selling it through exchanged who, in the US, are going to report it on your 1099k.

Otherwise, you have to have a seemingly legitimate Enterprise that is accepting Bitcoin on a large scale. Which would cause you to stand out like a sore thumb to the authorities because no one in their right mind is using Bitcoin with $40 transaction fees.

Re: Netflix is now worth more than $100B

#205

Post by WalterBright »

anilshanbhag wrote: post #19

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

I figure the Trump corporate tax cuts are good for about 20% growth in the stock market.

(35% to 21% means that profits after taxes jumps about 20% even if nothing else changes. This means the value of the company goes up 20%.)

Of course, the market has gone up much more than that.

Re: Netflix is now worth more than $100B

#206

Post by apetresc »

icelancer wrote: post #94
appleiigs wrote: post #88

Earlier quoted context omitted.

That's how people justify investing in Amazon. But I don't know how they think Amazon can just stop reinvesting one day and make money. Every business line Amazon has is hyper competitive. Can Amazon actually raise prices in any of their businesses?

>> Every business line Amazon has is hyper competitive. Can Amazon actually raise prices in any of their businesses? They have been for some time. Prime memberships, AWS pricing, etc. The lines are "competitive" but Amazon is so far ahead in most that it doesn't matter.

When was the last time AWS prices went up?

Re: Netflix is now worth more than $100B

#207

Post by mathattack »

anilshanbhag wrote: post #19

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

They're trading at 12X revenue. That's not so outlandish for a firm that nobody unsubscribes from, and that can raise prices without taking a revenue hit. (If they raise prices 15% a year for 5 years, that puts them at 6X revenue, and they're stickier than a lot of SaaS companies)

But what do I know? I thought Facebook was overvalued at $30 billion.

Re: Netflix is now worth more than $100B

#208

Post by jjeaff »

whoisjuan wrote: post #89
anilshanbhag wrote: post #19

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

Wall Street is now comfortable with the idea of very long-term tech investing and multiple consecutive years of no profit generation... This is what Amazon has been doing for 20 years. People don't buy Netflix stock because they think it's gonna be profitable tomorrow, but rather because they expect it to be so dominant that when they start generating profits, they would be massive.

Amazon is generating plenty of profit for investors. And the best kind of profit too, capital gains.

Why pay out dividends to your investors with after tax money that will be taxed again at a higher rate when you can just stash it overseas and buy more capital assets and let the stock grow in perpetuity. Same with apple.

As an investor, you don't need dividends, you just sell a few shares each quarter.

Re: Netflix is now worth more than $100B

#209

Post by jjeaff »

samfisher83 wrote: post #37
anilshanbhag wrote: post #19

The entire stock market feels like its in a bubble. Netflix stock gained more than 25% in the past one month. Their free cash flow (FCF) has been negative every single quarter and will be for many quarters to come. Stocks trade based on discounted cash flow(DCF). Netflix however produces no material return for investors and still majority of the analysts keep putting higher and higher price targets, its like they are…

I don't know why you are being downvoted. At some point you have to generate cash to justify your valuation. However if you look at amazon they have never generated cash relative to their valuation and its been like 20 something years. It has returned 10x in the last 10 years so I don't think their investors are complaining. If you look at google, facebook, and apple they are generating cash that would justify their…

Why would you ever need to generate cash flow? Just sell off a few of your ever appreciating shares each quarter.

Re: Netflix is now worth more than $100B

#210

Post by WalterBright »

Balgair wrote: post #203
Retric wrote: post #87

Earlier quoted context omitted.

Sustained 3% US GDP growth is overly optimistic. We have 0.7% population growth, and no obvious major investments. The computer boom is mostly over with the low hanging fruit taken. Prior to that we had IC engines and electricity, but nothing on the horizon seems to have that kind of potential to radically reshape society. And to double the economy every 25 years you need regular dramatic shits. PS: Look at the past…

The only things I can think of are: 1) AI. Somehow, we finally get the AI working, and it somehow produces a lot more jobs. I really think the opposite will happen, but who knows. 2) Climate Change. The ever rising waters and the ever worsening storms will cause nations to re/build large infrastructure projects. Think seawalls and repairing the NYC subway. I don't think that will be good, as it'll mostly just be debt…

> it somehow produces a lot more jobs.

Recall a few days ago some people were trying to reconstruct the genome of the first black man in Iceland. There's no way anyone could have a job doing that in anything but a very wealthy society.

In other words, AI won't create jobs in manufacturing, but it will enable unexpected jobs to be created that would otherwise not be cost-effective.

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