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- Weekend Investor: The Week That Was
I hope you had a wonderful week!
Before getting to the week that was, I want to let you know that a premium spotlight article will be coming to premium members on Tuesday along with an Asymmetric Universe stocks update on Friday. Free subscribers can expect an article on Wednesday and the weekly Saturday article.
In case you missed it
Here’s some of the content I put out this week. Enjoy!
The Smattering Podcast: I was on The Smattering this week with Jason Hall and Jeff Santoro. We discussed asymmetric investments and dug into a few of my ideas. Listen if you get a chance and follow their podcast!
Horizontal and vertical: Understanding horizontal business models and vertical business models is key to analyzing stocks.
Target gets thrown out with the bathwater: Pride has been rough on Target, but does a company that sells essentials deserve to be down 20% because of a PR mishap? I think the future is still bright.
Has Disney lost it magic?: I see less to be bullish about from Disney’s Pixar after the release of Elemental. If you don’t know what Elemental is, that’s my point!
HBO to Netflix?
HBO is reportedly considering selling some of its content to Netflix. That seems shocking, but the streaming landscape is maturing and not every company will be able to produce content AND have a streaming subscription business model. It makes more sense for a few companies to be the streaming subscription platforms (distributors) and everyone else be content producers, selling to the highest bidder.
If HBO does go to Netflix, it would be HBO acknowledging its role as a content company and Netflix solidifying its leadership as a distributor, while Netflix also acknowledging that it needs to acquire tentpole content that it has failed to produce in-house. In other words, it’s good for everyone.
Asymmetric Universe company Sony didn’t waste time building an app, it went straight to the content sales business model. From the spotlight:
A strategic alternative every legacy studio had was to simply sell its content to other streaming services, which is what Sony and Fox have done. Given the uncertainty around streaming economics — even at Netflix — I like the idea of selling content to the highest bidder every few years. And Sony has great filler content for streamers like Spider-Man, Jumanji, Men in Black, and Ghostbusters movies along with TV shows like Shark Tank, The Blacklist, Octonauts, and Creature Cases.
Russia’s Market Disruption
Some sort of coup or something is going in in Russia as I write. It will likely lead to a decline in the stock market next week.
Russia’s GDP was $1.8 trillion in 2021, according to the World Bank, about 2% of the $80 trillion global economy.
Russia’s biggest asset is oil. Before invading Ukraine, Russia was the third largest producer in the world behind the U.S. and Saudia Arabia, producing about 11 million barrels per day, or about 13% of global supply.
After invading Ukraine in early 2022, Russia’s energy exports and general economy has been shut off from most of the western world. China imports oil, but the economic impact of a potential collapse has likely been muted by 18 months of work cutting Russia off from the rest of the globe.
I write this to put the reaction that may happen by the market into context. Would any collapse of Russia be scary? Yes. Would it impact Spotify’s earning? Probably not.
Any Russia-related drop could be a buying opportunity for investors and I don’t see it as a reason to panic.
Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.
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