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hey lauren you want to be in my video you're in it okay uh hey everyone meet kevin here so obviously we've uh well we're back to sort of disaster mode especially since it sort of feels like netflix might be that harbinger again of uh disaster remember q1 netflix started earnings off and everything was a disaster looking towards q4 uh earnings which reporting q1 and uh it was total crap show now i have to say i'm glad i never invested in netflix but i also my heart goes out to the people who are now suffering about a 38 drop on the day from netflix and so a lot of folks are wondering kevin is now the time to buy the dip on netflix what does this mean for the broader market what did procter and gamble say today what are my expectations for tesla am i going to live stream tesla today uh you know why uh like then i get questions people like kevin why isn't your house fancier it's like well because i spend all my money on stocks but anyway so uh let's let's just go through some of the madness going on today mortgage interest rates also hit five percent which has some implications for some stocks actually sold a company that i really really love talk about that here so let's just get into all this uh keep in mind we just spent about 50 minutes together with course members answering a lot of questions and and brainstorming together strategizing it's really fun so if you all love it or say something in the comments if you're not part of it yet check out that coupon code link down below it expires today it's the tesla or cyber kevin coupon code yeah from uh gigarodio which i'm still wearing my bracelet from but anyway so let's get into this so netflix they were expecting two and a half million subscribers and uh such a disaster they were expecting to lose one million from uh from russia and they were still expecting two and a half million of growth they ended up only losing seven hundred thousand accounts from russia only seven hundred thousand uh but uh the fact that overall they reported a loss of 200 000 accounts a company that's a growth company that's contracting makes a lot of sense in terms of why the company's now dropping like 38 on the day now that doesn't mean we can't get a nice bounce off of this but look when a growth company becomes a not growth company it's a terrible terrible thing even if you take out the russia loss or you add that back in so to speak that would be a gain of 500 000 accounts which is really just terrible faltering growth the company is blaming the noise of covid and the pull forward of demand and account sharing uh and also competition which all of those things are terrible for for really the probably the next year or so at least uh is this you know bill ackman was one of the people who bought january's dip on netflix and he probably just lost four to five hundred million dollars today on that bet which is just insane uh netflix actually jumped quite a bit after he announced that he was buying the dip and uh oops anyway uh so you know i wanted to talk a little bit about what two things here one the account sharing thing which i actually think is very very bad uh what netflix is trying to do and then number two i want to talk about what i buy them so netflix is doing this thing where they're like oh let's uh let's try to crack down on account sharing and let's advertise more which i love hearing first of all advertise more because i'm a big fan of investing in companies like trade desk and trade desk is one of the few companies that's green today i just bought a lot more of trade desk right about 60 dollars when it fell just a couple days ago it's like 70 bucks right now so i'm really happy about that that doesn't mean i'm always a winner uh i think who is it rana shout out to rana in the course member live stream this morning says they've been tracking all of our trades and we're at 89 profitability which honestly in this market i'll take so okay this this the advertising thing makes sense maybe trying to get some more ads in on netflix i think that'll be great for advertisers probably not so great for netflix though because i think they're going to piss off their users in addition to pissing off their users i want you to consider this what happens when people like account share like let's say i share my netflix login with ross right i in my opinion if i share my netflix account login with ross gerber i believe i become a more sticky member for netflix i'm less likely to cancel because i have now given ross something of value and if all of a sudden netflix is like well now we're going to charge you for two accounts because you're sharing with ross we see the different ips like we're on to you it's like okay uh then i might get to that point where it's like wait a minute i'm not really watching netflix anymore anyway hey yo ross are you watching netflix ah no not really i don't have time for it anymore let's just cancel it so in my opinion they're they're trying their attempt at trying to monetize all the account sharing is actually just an opportunity for people to say yeah i don't really need netflix right now anyway it is it's almost like a catalyst for people pausing their accounts or canceling their accounts and it's like i'll sign up again in the future uh if if i want to uh so i think that's actually a really bad thing trying to monetize the customer's customer base a lot more i personally do not believe this is a sign of demand destruction i think this is a sign of just netflix destruction it's a growth company that's no longer a growth company and so netflix right now has an eps of 11 which at current the current prices puts them about at a p e ratio of about 20 20 pe for 2022 which seems really good for a growth company but they're only projecting to grow revenues at 10 per year for the next five years and i honestly think those anal the expectations those 10 growth expectations are going to fall after a report like this and so that means you're paying a peg ratio of about two which is a little expensive for the growth that you're getting and that growth is is on a downtrend not an uptrend that's bad so so for me even though i think it would be reasonable to to assume hey you know buy the dip yolo will call option at close at the closing sell-off and and then you know fingers crossed on on a big tende it's not a company for me so it's not what i've been interested in and you know maybe if it's peg ratio got down to like one uh but uh i i think even if it's peg ratio were at one i still think their growth estimates are going to decline and they're realistically probably like a peg of three or four right now it's not great so uh for me netflix is a no but that's for me now let's touch on procter and gamble because this was interesting because that question is coming up about consumer demand destruction and the suits are sort of debating about this on wall street and one of the things that's actually helping give us a little bit more color is procter gamble just like the banks last week told us that we expect incomes to actually rise this year we expect bank balances to rise this year and we expect spending to continue to rise this year not just because things are more expensive but because people are willing to pay more well that brings us to procter and gamble so procter gamble is that company that you probably actually have no idea what procter gamble makes but when i mentioned the brands that procter gamble owns you'll recognize probably all of them let's try tide cascade febreze gain pampers loves the cheap version of pampers bounty charmaine uh tampax gillette braun anyway i'm sure you've recognized probably nine out of ten of those so uh they just increased uh their buybacks uh great dividends i'm not so worried about the exact details of the company i want to know what they're telling me about for other stocks right and to me they're reiterating why we've been talking on this channel for the last four months about this transition away from consumer discretionaries and into consumer staples now i'm not a big fan of buying consumer staples myself so for me i've been more of a purchaser of tesla but one of the things that i did do over the last few months is i completely sold out of a firm i completely sold out of etsy i completely sold out of um basically any kind of consumer discretionary stock and i'll even tell you another one that i sold out of through towards the end of the video and i've been increasing my bets on advertising and tesla uh trade desks my advertising play right and the reason i'm i'm betting on those rather than going into the staples or the commodities is because i think these are a temporary safe haven and the staples and commodities will rotate back down and they're creating buying opportunities in other companies that do actually have serious growth trade tesla uh and i'll talk about end phase in a bit but anyway so it's important to remember before i talk to you about what was in the earnings call that if consumers have 100 to spend you you get less product today than you would have if you could buy and i'm just gonna make this up 20 razors with a hundred dollars now maybe you're only getting 18 right that is an example of inflation now if you say well i'm going to spend 110 dollars to still get 20 razors yeah now you're spending more but you are making the choice to spend more uh so this is a very big misconception when it comes to consumer spending more if consumers are willing to spend more that's a good sign and so the information that we actually got in their earnings call reiterated this so here you go listen to this so first of all they expect a margin hit from higher inflation they're only passing on about 50 percent of their cost increases to consumers but listen to this quote shoppers continue to pay for premium items such as fragrance free diapers and high-end razors razors despite rising prices in fact the wall street journal reported that procter and gamble said quote the priciest offerings were in highest demand and are still in the highest demand and they have not seen a trend towards discount products yet in other words people uh who used to be lower income households or are still lower income households switched to premium brands during the pandemic and then did not switch back to discount products or have not yet switched back to discount products this still could right procter gamble is still planning on hiking prices their next big price increases are coming in july which uh obviously not good for inflation that's gonna be another inflation issue there uh it's one of the reasons in my opinion you've got costco killing it they've been killing it all year they're one of the staples that have regularly been cheering uh they're at 600.
they just crossed 600 it's really incredible i mean they've done they did great during the pandemic and they're just killing it now phenomenal company but uh this was interesting guess what else procter gamble is spending a lot of money on to convey their innovation and value advertising they are quote uh increasing well not this is a paraphrase it's not a quote uh strong top-line growth in advertising as we continue to communicate the value of procter gamble anyway so inflation costs are though broad-based and continue to increase with little sign of near-term relief that was not good that was a very very very bad line but the fact that the consumer is still spending is a very good thing but how long does that last well they actually gave us a little bit of guidance they said that they expect all this inflation to be a quote temporary bottom line rough patch that consumers have about 20 to 30 percent more price elasticity than usual that's a way of saying that consumers are willing to spend 20 to 30 percent uh or as prices go up they're losing 20 or 30 percent fewer customers than they thought they would lose as prices go up in other words people are sticking with products and higher and the price increases they do not expect that elasticity to hold into q4 though but right now they are really branding trade up to procter and gamble products and they want to really advertise that pretty heavily kind of interesting so for me this is an incredible measure of the consumer it's basically the consumer saying hey no we're we're willing to spend on the stuff we want we still have the money to do it again we don't know how long that'll last you know today we had the yield curve flattened a bit again we're only at about 28 basis points of a spread we've got tesla earnings today tesla usually turns red after earnings but it's already red you've got steel dynamics reporting after the bell today that that'll be huge uh you know rumors that they're going to be the cyber truck steel company they're a texas company and they've been killing it as a commodity play obviously but i mean golly you look at the market right now anything stay at home related is just getting wrecked now i'm going to talk about real estate and then phase in just a moment but i mean netflix 20 36 roblox 12 shopify 10.5 wayfair 9.6 percent peloton uh end phase all these companies down seven to ten percent and and to me it's just this is a clear sign that anything stay at home related is getting smoked but not just stay at home related uh anything related in my opinion and this is going to come more and more to the real estate market i expect also to get hit so i actually closed my entire end phase position which i feel so terrible about because i love en phase i was just showing my tesla or my end phase but it's not my end phase battery and solar panels to course members and i've i had like i mentioned earlier i already closed all my etsy and the reason for that is as mortgage rates continue to rise now they're over five percent i highly anticipate that we are going to see people spend less money on homes and at home they're going to spend more money on services we already expect that transition to occur and as that happens companies are going to be more inclined to spend more money on advertising now tesla doesn't advertise tesla doesn't need to advertise so i'm optimistic for tesla long term i uh continue to add to tesla and i do expect the stock probably to fall after earnings and if it goes up it'll be a nice treat uh but uh advertising tesla is where i'm at if i was going to play commodities uh and um uh in the staples costco target steel dynamics yeah you know the wheat etf i've been pitching the wheat etf since uh since before the war so uh and that that's just absolutely killed it these are some wonderful things if you're looking for sort of that sector diversification but anyway if you want to ever ask questions or are curious or you want to have some amazing lecture content that you can sort of watch in the mornings or nights weekends whenever you want or on the go 've got that coupon code expiring today we'd love to have you there and i know you'll learn a lot a bit whether it's business formation insurance protection liability real estate uh longer term investing everything is there for you it's absolutely wonderful property management you name it so i think you'll love it thanks so much for being here good luck out there stay strong and we'll see in the next one goodbye
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