Thursday, May 14, 2020
My Best Investment
Since then Netflix's business has grown rapidly. It is one of very few stocks to actually benefit from the pandemic since people have to stay home with little to do except watch television. In the first quarter of this year, Netflix gained twice as many new subscribers as Wall Street anticipated. Plus, Netflix has been expanding globally for the past two years; that growth is designed to offset the product's saturation in this country.
Netflix's stock value has moved accordingly. Today, it reached an all-time high of $450. $450! As I said, I got in at $55, which means my money has grown eight times its initial investment. And the crazy thing is everyone now believes Netflix will continue to go up.
I also believe that for multiple reasons: (1) global expansion still has room to grow; (2) streaming is replacing broadcast TV and the company is the streaming leader; (3) Netflix's investment in new content is deep and will pay future dividends (including now, when it has enough completed new shows to last through the year while other places have had to suspend production); (4) pricing for Netflix is still relatively low so the company can raise prices (and profits) in the future; (5) the company is now more valuable than Disney and all other competitors; (6) the company snagged the best talent in entertainment with long-term deals (promising the best show-creators with artistic freedom, unavailable from old media); and (7) the company is benefitting from "vertical integration" (the holy grail of the entertainment business which was previously illegal as antitrust violation).
I don't tell anyone what to do with their money; just saying where mine is. If you have any questions, contact me.