The Daily Update
Today: Bitcoin is soaring, Disney and Netflix, Why you shouldn’t pick stocks, David Tepper, and How Best Buy survived Amazon.
Off the Top
Bitcoin has gained 152% since July 16.
Extreme caution needs to be exercised when investing in Bitcoin or other cryptocurrencies. If you are new to this space, this article should get you started.
This is a good website that tracks all the cryptocurrencies. There are well over 100.
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The retail underperformance vs the S&P 500 is 30%.
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Household debt hits a record thanks to a rise in auto loans and credit card debt. Full story(paywall).
Business Stories
Why the grim reaper of retail hasn’t come to claim Best Buy — LA Times — www.latimes.com
Best Buy, once left for dead, has rebounded and is holding its own against e-commerce rival Amazon.com.
From the article:
That appeals to customers such as Scott Vellman of Los Angeles, who bought the “Battlefield 1” video game for his Xbox One player at Best Buy’s store in Atwater Village last week after Best Buy matched its $50 price on Amazon.
“I bought it here [instead of online] because I didn’t want to wait for it to ship,” Vellman said.
2 Key Takeaways
1. One of the first moves the new CEO did was price match any item from an online competitor, especially Amazon. This took price off the table immediately.
We are impatient. Especially with games and new electronics that we are looking forward to playing with. We will usually opt for getting what we want NOW, all things being equal.
2. People still like to be educated about the products they buy, especially if they are expensive and confusing to use. Best Buy has invested heavily in employee education and training and it seems to be paying off.
For me, the last point(#2) is crucial for brick and mortar retailers to survive and remain competitive. You have to offer a superior experience than online, otherwise, why would we consumers bother coming at all.
For a retailer that did not invest in employees and their stores, look no further than Sears.
Media
Netflix should be afraid of Disney’s OTT play | TechCrunch — techcrunch.com
Disney will begin an over-the-top streaming service. Removing all their content from Netflix.
My Takeaway
Ultimately, we go to the service that has our favorite shows. Whether that is Netflix, Amazon, or Disney.
The switching cost is minimal b/w platforms and quite frankly, there is so much content to sift through, I just wait until other people tell me what is good.
Investing
Hazards Of Individual Stocks | ETF.com — www.etf.com
In this article, you will learn 2 things. (1) Why picking individual stocks is a bad idea and (2) Why diversification is a must.
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Billionaire hedge-fund manager Tepper adds contrarian energy stocks | Reuters — www.reuters.com
Hedge-fund manager David Tepper bought a stake in embattled Wells Fargo Co and several energy companies in the second quarter.
One of his new positions was LBrands, which has been crushed over the past year. They currently support a 6.15% dividend yield.
Retail stocks have been challenged for the past year, expect volatility with this sector. Your time horizon needs to be 5–10 years, not 1–2.
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How Brokerage App Robinhood Got Millennials To Love The Market — www.fastcompany.com
With 2 million users and $75 billion worth of transactions, Robinhood is ushering a new generation into the stock market and beyond.
I use this app and love it. Zero commission on trades and super easy to use.
Corporate News
- Apple is investing $1 billion in original content.
- Amazon is rolling out instant pickups in U.S.
From the article:
Amazon.com Inc is rolling out U.S. pickup points where shoppers can retrieve items immediately after ordering them, shortening delivery times from hours to minutes in its latest move into brick-and-mortar retail.
- Warren Buffet sold his $315 million dollar position in GE.
Quick Hits
Obesity around the world.
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I was shocked to see how little Beyonce earns from streaming services and she is the highest paid.
Thanks for reading,
Caleb
