Bitcoin, and cryptocurrencies in general, were all the rage in 2017. Bitcoin went from around $1k to a peak of around $20k during 2017 before the bottom fell out and it proceeded to lose around 80% of its value in 2018. Entering 2019 it was above its 2018 lows but still hanging out below $4k and the past few months have seen another resurgence as bitcoin is currently sitting around $11k.
Lately, I’ve been giving a lot of thought to Shopify (SHOP), a company I scored late last year. At the time it was an Enterprise level holding in the Freedom Portfolio. That was before the stock price went absolutely bonkers in 2019.
One of my hopes when I created Paul vs The Market was that I could use it as a teaching tool. This article is part of that goal. My intention is to write a three part series where I do my best to explain the basics of investing in the stock market and why I think it’s so important.
Two Freedom Portfolio holdings made news last night and this morning: Twitter (TWTR) and Tesla (TSLA). Here are some quick thoughts on each.
Netflix (NFLX) announced their Q1 numbers yesterday, and there was a lot to like. It’s especially nice to see them continue to beat expectations on subscriber growth despite a price increase in the United States. Similarly, the revenue increase was impressive considering the strong dollar has been pressuring their international revenue (reported in dollars). Nearly 60% of Netflix’s paid subscribers are international now, and as you can see above, that’s also where most of their growth is coming from. As time goes on, the strength of the dollar will play a bigger and bigger role in Netflix’s revenue.
Disney (DIS) is up huge today (and nearing an all-time high) the morning after holding their investor day, where they unveiled not only a ton of information about their upcoming streaming services, but also new content that they are producing for those services. There had already been a plethora of rumors surrounding much of the new content, so there weren’t a ton of surprises there, but Disney still had a number of notable announcements.
The S&P 500 was up 14% this past quarter. The Freedom Portfolio? It was up 25%. Since inception (October 1st, 2018), the Freedom Portfolio is down 2% compared to the S&P 500 being down 3%. In other words, the Freedom Portfolio has won the Q1 2019 battle and is currently winning the war.
One tricky thing with investing is that things are always changing. An indestructible monopoly one day (can you believe that Microsoft (MSFT) was almost broken up by the government over the bundling of Internet Explorer with Windows?) can find itself suddenly behind the times and struggling to catch up a mere decade later. Similarly, sometimes all it takes is one or two amazing products to turn a tiny and irrelevant company like Apple (AAPL) into the largest publicly traded company in the world over the same time period.
Mercado Libre was a Serenity level holding in the Freedom Portfolio, but after last week’s huge jump it has now been promoted to an Enterprise level position. Despite its (originally) relatively modest size, it’s one of my favorite positions and it’s well past time that I give the company its due and provided a proper write-up.
There were two interesting pieces of news for Disney (DIS) this week. The first was that Disney is supposedly in talks with AT&T (T) to buy out the latter’s 10% stake in Hulu. Disney currently owns 30% of Hulu, and once the Fox acquisition goes through, will own another 30%, giving them 60% total. Comcast (CMCSA) owns the remaining 30% of Hulu. Getting another 10% of Hulu when they are already on track to own a majority might not seem like a huge deal, but I believe it shows that Disney is serious about building up Hulu as a contender in the streaming video wars.