Latest / The Curve / RTC19: Is the Netflix stock actually a good investment?

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RTC19: Is the Netflix stock actually a good investment? · The Curve

• 0:00
  Welcome to season two of Raising the Curve, a conversation for women who want to
• 0:06
  learn more about money, via money. For the future they want to have. The pursuit
• 0:11
  for financial confidence and increasing your wealth should be a simple one. So
• 0:16
  this is a place for you to learn about investing in finance in a non-scary or
• 0:20
  intimidating way. Thank you for being here and for listening. Because together we
• 0:25
  really can raise the curve. Episode four. Episode four. Okay now let's just have a
• 0:32
  quick check in how you feeling Vic. Oh you know I didn't have a great night's
• 0:36
  sleep last night but that's right. Were you on another date? No. What were you
• 0:41
  doing? I love how this podcast has become about my dating life. Yeah well it's
• 0:45
  much more interesting than most of us so. I mean I do tell people not to fall in love
• 0:49
  with stock so it's kind of easy. And here she is falling in love well that's
• 0:52
  all right that's way too certain. Date one. I'd be concerned if you were like I'm
• 0:56
  falling in love. Absolutely not. Stage five clinging. I mean we met once and he's
• 1:03
  just so great. We're gonna have three children and we've already talked about
• 1:07
  where we're getting married. So today? Yes. We are gonna talk about a stock and we're
• 1:16
  gonna run through if it ticks the five criteria that we've talked about before
• 1:19
  of picking a wedding investment and we're getting run through you know some
• 1:23
  really cool interesting facts about this company. I love these because for me
• 1:27
  it's all good and well to have the theory or talk about the idea of what makes
• 1:33
  a good stock and why or why not but actually using a company and dissecting it
• 1:38
  and looking at the different aspects and then I guess evaluating how that makes
• 1:41
  the stock move the price of it just solidifies what we talk about. I love these
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  ones. You kind of come full circle or like you put it into practice you're like
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  oh my gosh yes okay that's yeah. And I think also every company that we talk
• 1:53
  about in this way they're always so different that each time you learn something
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  new so you know for example the briskos when we looked at briskos as a stock. One
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  of the main things that I remember from that and if anyone hasn't listened to
• 2:05
  that episode it's the episode 14 of season one really really great example as
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  well of dissecting a stock and how it moves and was Rod Duke being the CEO and
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  having such a huge portion and I guess like every stock that we look at there's
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  different highlights and lowlights. Totally yeah there's different strong points
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  and there's weaker points and you're never going to find the perfect
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  investment while we're talking about finding winning investments so investments
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  that will do well over time but yeah what what you might think is a good
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  investment is different for someone else so there's there's not the kind of
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  the perfect investment but as long as it can tick as many boxes as possible then
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  you're lying your risk and you're positioning yourself for a better outcome so
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  lowering our risk while trying to maximize our returns. Well done. Thank you thank
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  you and then it's a podcast done yeah but I think because you've looked at so
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  many companies you've looked at you know all of the different things and like
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  sections and spoken to all of the directors and blah blah blah you have so
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  many examples in your head of different stocks and whether they did well or
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  whether they didn't you know you've got all this history build up but we
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  don't have that and they change you know a company that might have done
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  really well historically you know it's outlook for the next five ten years
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  doesn't actually look as good as it did historically and vice versa it might
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  be a really terrible company it hasn't done very well it's made a lot of
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  changes and now it looks way better going forward and therefore you're going to
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  get a lot of investor interest because it's much better more approved company I
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  guess so yeah it's constantly changing as well it's not looking at one company
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  thinking oh it doesn't take those boxes and then dismissing it forever you might
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  revisit it and because you've done the research and you know that company and then
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  you're like oh hang on it's now got a CEO who's bought a whole chunk of stock
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  and that was the missing piece now it ticks all those boxes and now I'm going
• 4:02
  to buy it so it's when you research a company it's not wasted research if you
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  don't invest in it because you're also taking those learnings and applying them
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  to other companies as well as potentially revisiting that company effect
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  is changed so yeah that's a great way to look at it so what stock are we looking
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  at today we are going to look at Netflix oh I love the idea that we're looking
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  at an American company yeah so we've been looking at a lot of Australia New
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  Zealand and Netflix isn't as in P500 so it's big it's well known and it's
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  liquid so many shareholders are there would they be like millions millions
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  millions yeah and what number are they on the S and P500 are they quite high
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  up or is it kind of there's no order and changes it changes all the time
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  because obviously the it's based as a percentage of the overall value of the
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  index do you know what I mean so if Netflix does really well then it'll be a
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  greater percentage and then if the next day it doesn't do well then it'll be
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  a lot so it's kind of fluctuates but it is definitely it's definitely up there
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  it's because it is a three hundred billion dollar company three hundred
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  billion yeah how much is Facebook I feel like we've spoken about this and I can't
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  remember Facebook is yeah nearly a trillion trillion oh my god no that's just
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  hard to fathom really yeah imagine the curve being a trillion dollar
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  business I mean I'm not trying to you know just credit ourselves but even the
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  sort of being a million dollar business would be but like when I started
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  Facebook they were young they're a university with that college probably
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  never in the world of streams would they think that they'd have a trillion
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  dollar well I reckon Mark's like that's probably a little bit arrogant
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  yeah probably thought that from the beginning
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  Joe Joe but yeah so Netflix is a three hundred billion dollar company and fun
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  fact I love this fact and it's come it's actually I discovered it on a podcast
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  called Business Wars I find it personally really interesting because it takes
• 5:58
  two competitive businesses so like Eddie that's Nike and goes back in history
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  and like tells explains to you how the rivalry came about and why they now
• 6:07
  competitors and who won on certain things and amazing so interesting like
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  there's McDonald's and Burger King and there's one on Netflix and it goes
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  through how back in 2000 blockbuster video you know where they used to go
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  and bring your videos oh that's such a past time yeah I know Friday night it's
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  just getting some popcorn and going out to the DVD store and you'd sit and stand
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  there and you choose and then I remember with a friend and I'd come back with one
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  and she'd come back with one and we'd then we'd decide between that and it
• 6:37
  smell weird remember the smell of a video shop and then you wouldn't return it
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  and you get late fees my dad would lose it and you put it in the little slot to
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  return
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  the DVDs back all the videos were fun so it's comparing blockbuster with Netflix
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  and what happened back in 2000 was that Netflix went to sell themselves to
• 7:00
  blockbuster they went to blockbuster and said hey but you want to buy 20 years
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  ago yeah do you want to buy us for 50 million dollars and blockbuster was like
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  laughed them out of the room and was like oh my gosh you guys are like such
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  small fry absolutely not I've got this big business with lots and lots of
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  stores and videos and now it's actually it's quite amazing because now Netflix
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  is a 300 billion dollar business and blockbuster pretty much doesn't exist
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  anymore so it's just so ironic that you know someone would laugh you out of
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  the room thinking that your business is so insignificant and so it was a
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  boomer for sure yeah and then just couldn't see the riding on the wall in
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  terms of the trends going on and that probably put more fire in the belly of the
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  Netflix founders because they're like hey hang on oh there's a really good
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  episode on Facebook and Snapchat and the same thing happened Facebook tried to
• 7:48
  buy Snapchat and then Snapchat was like no thank you see you later we're gonna
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  try and we're gonna go grow this business ourselves and Snapchat's kind of
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  in the world who really young CEOs who were yeah I guess striving for greatness
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  but a tear on the arrogant side as well and it did put fire in the belly of
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  Snapchat but now Facebook's a lot more I wonder what would have happened if
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  they'd been brought out I probably would still be successful but everything they
• 8:14
  touched into gold does Facebook just did every feature that Snapchat had and put
• 8:18
  on Instagram so there was no right because like story didn't exist yeah the
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  instantaneous quick photos now you've got filters you've got pretty much
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  everything that Snapchat has is on Instagram oh what are the it's yeah so and
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  also quite good from Facebook to be like let's buy you rather than we're gonna
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  copy you yeah obviously tried so it works in some instances like obviously this
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  instance it worked by Netflix not selling to blockbuster and they did it
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  themselves and now they're three hundred billion dollar business versus 50
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  million what was what was Netflix doing 20 years ago though there wouldn't have
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  been online you know it was a DVD rental pretty much yeah yeah they transitioned
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  after that yes on to online and onto streaming video yeah so I didn't even I had
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  no idea Netflix existed before online platforms I thought that that was where
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  they yeah started they started back in would have been 1997 so only 24
• 9:10
  years ago which it's like that no that's ages ago I thought there were five
• 9:14
  years old yeah true I had no idea that's quite that's quite young though for a
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  business of size you know that's pretty significant growth in such a short
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  space of time that that to me is actually quite mind-blowing I just think
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  there's something quite amazing about the CEOs or people who are involved in
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  Netflix to have transitioned so cleverly and pivoted because there are so many
• 9:37
  companies that get left behind as things you know the toll and change and to
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  see a company that is able to adjust it's like code it's pretty amazing codec
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  invented the digital camera but didn't bring it out because they thought
• 9:52
  that it would capitalize their business you yeah joke and then obviously the
• 9:57
  technology came about and someone else did it and it became mainstream and their
• 10:02
  business was why would they not do that because it's it cannibalizes your
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  business so you kind of got to be careful in the sense that I mean good good
• 10:10
  businesses can see the writing on the wall and just do the change anyway whereas
• 10:15
  poorly run businesses are so stuck in their ways that they don't and I think
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  that's the that's the difference between I think investing in a founder
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  business the Netflix founders they could see these changes they want to
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  build the legacy they wanted Netflix be around forever so they adapted and
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  pivoted and yes going going online and streaming your content versus
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  renting it you know through a DVD rental system you're cannibalizing your
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  business but the it is taking a risk by by changing tech but thank goodness
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  they did because otherwise they would have ended up by pop up so something that
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  you speak about and that we haven't spoken about on the podcast yet but the idea
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  of trends and themes and just looking around you and being aware of what's
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  happening and I guess it's just as an investor and correct me if I'm wrong but
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  always assessing what's going on and like how behaviors changing and and how
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  that's going to affect businesses and therefore your stocks and this is one
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  that we could have all seen you know we could have all seen the fact that we're
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  watching more and more Netflix we're watching we're streaming more content
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  we're watching less traditional TV shows the world is constantly evolving there's
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  going to be so many more opportunities and so many more trends and themes that
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  you can benefit from we always get asked by women oh have I missed the boat
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  oh you know how do I spot opportunities and it's like there's so many around
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  just because you miss out maybe on the most obvious one and you that he runs
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  talking about don't worry don't because the world is constantly changing
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  everything's constantly in motion and therefore there's always opportunities
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  rising so let's go through the five things and see what Netflix takes and what
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  doesn't and okay please shut out a bit more love this so it was found in the 90s
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  right yet 1997 yeah when were you born 1991
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  two three four six years oh my god I'm so bad at mess I've seen my gods so firstly
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  structural growth do you think Netflix is an structural growth industry well it
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  is but I wouldn't have said it was when it first started oh I guess the 90s
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  actually were kind of booming for blockbuster DVD rentals it would be a very
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  very early structural growth then like if you'd if you'd identified that he
• 12:30
  run was going to be streaming videos on demand which we call yes what do we
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  call it east for the streaming video on demand oh really another
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  is that just any online streaming yeah so you're who lose you're neon's yeah
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  prime video does any plus almost yeah okay so in terms of structural growth it
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  was at the very beginning of that big wave yes yes back in the day and now you're
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  well into that structural growth story there's still significant growth to
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  come like streaming videos still taking share off your traditional TV and I
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  think it will continue to going forward I think how we consume content has
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  drastically changed I mean I don't even know I haven't even I can't have the
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  last time I watched actual TV I mean the only reason I've been watching so much
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  TV is because we've been wanting to announce our generation in terms of all
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  of our friends and I think that and younger probably weren't using the
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  television until covert really and I think about my niece who's true to yeah so
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  good and I'm like she won't probably ever watch a TV in the sense that we
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  did how fascinating you're right she won you know how we used to I remember
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  rushing to the TV being like home and always starts in five minutes oh my
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  god and you'd sit down and you're so fun and you had to be there at 5.30 for
• 13:50
  just start otherwise you missed it whereas now I can be like I want to start
• 13:53
  that in five minutes or I'll watch that tomorrow I'll pause it I'll go do
• 13:56
  something else yeah it's just the convenience is amazing the live in the
• 14:00
  moment excitement I actually really miss those days it's like when the phone
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  would ring and I'd run down the hall and answer it quickly before it stopped
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  ringing and now it's like I'll call you back yeah oh my gosh my sister calling
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  I don't want to talk to her quickly yeah everything so instantaneous now and so
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  I think as the streaming video on demand platforms become more dominant and
• 14:22
  have more and more great content we're going to have less reliance on
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  traditional TV and TV NZ and TV 3 and all those you want your felt
• 14:32
  pivot you know will they pivot to being online well they are online TV NZ
• 14:37
  on demand yeah but do you use that I that's what I use all right do you do
• 14:41
  actually watch them and they're starting to use it starts at 6pm for the news
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  kind of thing it's not yeah yeah but in terms of their content they produce it's
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  no in there as good as Netflix Netflix spent last year 14 billion dollars on
• 14:56
  original content 14 billion yes I almost thought it would be more than that
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  just for the amount that they're producing the high caliber of actors that
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  they have there's just no way that traditional media companies can keep up with
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  that and it's it's a flywheel effect and so this is this is coming into like
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  this the secret sauce part but it's a flywheel in terms of the more money you
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  spend on content then the better content you you produce and then you get
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  more subscribers and then that money from those subscribers means you can put
• 15:25
  that back into producing more content so it's like the bigger get bigger it's
• 15:28
  like snowball effect the network effect the same thing that we talked about
• 15:32
  with with trade me or with seek the main company where people go to look for jobs
• 15:36
  yes the gap between competitors just continues to grow yes and so yes we do
• 15:41
  have there's a lot of streaming video on demand companies out there now you've
• 15:45
  got Hulu Disney plus you know we've got a lot of a lot of them but Netflix
• 15:49
  still has over 50% market share and the next closest competitor has 12 so you
• 15:55
  know there's just there's just miles miles ahead and now they've actually become
• 15:59
  a verb yeah like Netflix and Shirley mate yeah it's like when people go I'm
• 16:04
  gonna go I'll get an Uber home but they might be getting a lift or they might
• 16:07
  be getting Uber but they're not gonna be like I'm just gonna get a lifetime
• 16:09
  more yeah or an older Netflix has become a part of our colloquial
• 16:13
  even if we're gonna sit down and and and Hulu and chill we're gonna say
• 16:19
  Netflix and chill it's like when I was younger and my parents would be like
• 16:22
  that can you do the hoovering and I just thought that that was another word for
• 16:26
  vacuuming I didn't realize who brings an actual brand hoovering is a brand it's
• 16:31
  like saying can you do the dysoning yeah it's quite when you become a verb
• 16:35
  that means that you're the go to brand and that's that's really powerful
• 16:40
  yes and there's another trend over I remember when I was in Sydney what
• 16:46
  have been like five years ago yeah and I was visiting a friend in Sydney it's
• 16:51
  not when I lived there and he was like oh he's just getting Uber from the airport
• 16:54
  and I was like sorry what and he was like it's like a ride sharing service
• 16:58
  he was explaining to me and I was like he sounds dodgy not gonna fly so yeah
• 17:03
  with Netflix I guess the other thing is that they are launching into games
• 17:07
  are they so that's just another additional multi-billion dollar
• 17:12
  opportunity for them so you kind of game so you can just play online games
• 17:15
  through Netflix so they've obviously mastered the fact that they can produce
• 17:19
  really great TV and movie content and they've got people on the platform so
• 17:24
  they're like hey let's just introduce games as well games as such a bad
• 17:27
  market yeah yeah my flatmate place Katana on his
• 17:32
  iPad and I'm so awesome I don't even know what that is
• 17:36
  it's like can I try to a bit of wood for a bit of clay do you have a bit of a
• 17:41
  clay can have some wood I'm like this is the weirdest game at that
• 17:44
  but yeah that's a huge market and there's so many gamers yeah it's addictive
• 17:50
  and this is this is kind of the best type of investment when they are growing
• 17:54
  again yeah they've got they've been benefiting from one trend and then they're
• 17:57
  like hang on let's let's branch out to this and then we're going to
• 17:59
  grow with this trend as well so it's what's the term when you get double
• 18:02
  bounced on a wave you know oh like double bounce on a trampoline
• 18:05
  that's what you're thinking but you know when you get two waves at once and you
• 18:08
  go yeah I don't know what that's cool but I yeah what am I envisioning so that
• 18:15
  that kind of means that even though Netflix we maybe didn't invest in the
• 18:18
  first wave of online streaming yeah this next wave it doesn't mean that
• 18:23
  they're not still in another structural growth industry or at the start of
• 18:26
  another wave yeah there's like another there's another leg of the
• 18:30
  investment oh I want to invest Netflix and this is the great thing about
• 18:33
  investing in these kind of companies is that they they see opportunities they
• 18:37
  pivot they take advantage of opportunities you know they're not just sitting
• 18:42
  on their laurels or if that's the phrase and just riding the streaming video
• 18:47
  on demand wave they're like okay what what's next what's next and I think
• 18:50
  that's the difference when you're investing in a
• 18:52
  Founderly business they're constantly thinking what's next what's next what's next and
• 18:56
  and growing and and thinking it's not like a short term CEO who's only in
• 19:00
  there for a couple years and trying to make the most of it it's it's a founder who's
• 19:03
  looking he's looking 10 20 years down the track he wants his grandchildren
• 19:07
  his grandchildren's grandchildren's grandchildren he wants to be the guy that
• 19:10
  or the girl that's like isn't that bad that we keep doing that accidentally
• 19:15
  just going oh the guy it's so subconscious they want to be the person
• 19:19
  yes that is like you're like oh that guy and he started that and you know
• 19:25
  the Steve Jobs or the Jeff Bezos yeah Jeff Bezos Jeff Bezos you know they
• 19:31
  want to be household names and and and be be part of a legacy I guess yeah and so
• 19:37
  structural growth industry so that's obviously ticked massively with Netflix
• 19:41
  definitely you know people have on average 2.2 streaming providers now I think
• 19:46
  how many do you have I feel like about seven I think I you've got prime neon netflix
• 19:54
  you've got all of them don't I think I've got probably about four so I was
• 19:58
  having with that for a while during lockdown it was fun because we had access to
• 20:02
  all of the things I do the whole oh yeah we'll watch the series on this and then I'll cancel
• 20:07
  it in the next never do so you've got Amazon Prime I'm not sure if we mentioned that
• 20:10
  yeah so so on average cancel now but what one would you cancel they're also good yeah
• 20:16
  and that's the good thing this is the great thing about from a Netflix point of view it's
• 20:20
  it's not that great it's probably one of the risks we need to be aware of is that
• 20:23
  there is increasing competition and you know these companies are producing these other companies
• 20:28
  are producing great content but do you want to be the platform that everyone sticks with
• 20:33
  not the platform that you go to to watch a series and then you cancel sure yeah you know you
• 20:36
  want to be there the solid one throughout yeah you want to be the number one not the number two
• 20:41
  subscription yes yeah do you know what I was talking to some friends about last night was
• 20:47
  slight off-topic but you know if you think about the chip industry and use your
• 20:53
  tablet yeah yeah like there's there was kettles there's all these really yummy chip brands and
• 20:58
  you would never have thought oh another chip brand could come in and make something even better
• 21:03
  but you know the snack your chingies whatever they're called yeah they are revolutionary chips
• 21:09
  there's this perception I think sometimes that there's so much good in an industry and therefore
• 21:13
  don't bother and trying to come up with something new it's like 42 below the vodka and they got
• 21:19
  turned away and turned away and turned away constantly because everyone was like oh we've got
• 21:24
  vodka we've got absolute why do we need another one and then they just made this beautiful premium
• 21:29
  brand and it did really well and it's there's always a space for competitors and I think this is
• 21:33
  interesting because I know one of the tics that we need to get is like the secret sauce yes
• 21:38
  and also strong competitive advantage but I think it's good to remember that even though
• 21:44
  you obviously want to be aware of that it doesn't mean that there's not still opportunities
• 21:47
  in those areas totally for people to start new brands new businesses do things better than they've
• 21:53
  been done before and the secret sauce one I think is quite key here as well because now that Netflix
• 21:59
  has its own original content so it only had four original Netflix shows in 2012 that was only nine
• 22:06
  years ago yeah it had four Netflix original shows wow and now it's got over 400 when you own the
• 22:12
  content then you can start licensing you know there's so many opportunities when you own the content
• 22:17
  you don't have to pay away royalties to have certain movies or TV shows on your platform and you can
• 22:23
  only access them there it becomes what we talked about with that competitive mode Netflix dominated
• 22:29
  the Golden Globes they were nominated for over 40 nominations across TV movie and when you
• 22:36
  you know that's when you know you've got such strong position or such such strong power you're
• 22:41
  dominating a Golden Globes like I don't think you can get an Oscar still there's a few things
• 22:46
  that haven't changed yet like in terms of it might be like the best movie or something you still
• 22:51
  can't be an online but they're not just producing content for content sake they're actually producing
• 22:55
  super high caliber content so that just it just adds to their strength and that kind of that
• 23:01
  flywheel or the network effect and then the other key points so yes founder led so who are the founders
• 23:07
  there's two co-founders and Reid Hastings is the main guy he's he's still there Reid Hastings
• 23:13
  Reid Hastings he's like 60 so he's a bit that's still super young yeah and he doesn't own a lot of
• 23:19
  shares he only owns a couple of percent but really but still because they would have sold out for
• 23:25
  IPOs and whatnot yeah and they probably sold down over time but he's still there which is a which
• 23:29
  is a box tick for me and still very much involved the balance sheet so yes they do have a little bit
• 23:35
  of debt which how do you still have debt because they're they're reinvesting to grow you know and
• 23:41
  cash isn't the be all an end all it's a nice to have and it is it is a good box to tick but because
• 23:46
  they're growing so fast they're reinvesting and so I'm kind of happy with that you don't need to
• 23:51
  have cash if you're growing so strongly and in the fourth point the visible revenue so obviously
• 23:56
  subscription based of course how many subscriptions 200 million subscribers what is that and they
• 24:02
  just put through a price increase in New Zealand I know that 200 million at say what 15 dollars
• 24:07
  18 so you've got revenue of 40 billion dollars whoa that's a lot of money and all you have
• 24:16
  to do is go we're going to increase that by 10% this year and that just drops straight to the bottom
• 24:22
  line with visible revenue we mean your does management have visibility on the revenue that's
• 24:27
  coming in the door and with subscription based revenue this is the best type of visible revenue
• 24:32
  because you know that you've got say 200 million subscribers that are paying 18 20 dollars per
• 24:39
  month coming through the door it gives you such a great great power to to plan and forecast and
• 24:44
  reinvest and reinvest and grow and when you know that you're not going to wake up tomorrow and have
• 24:50
  and have to go out and find revenue and then and subscription based is great because I mean gosh
• 24:55
  I don't even I don't even notice it just goes out every month yes they increase it but
• 25:00
  and if it was super bad I mean like I think about for example apps that I've subscribed to
• 25:05
  you know and it's not a lot maybe it's like $10 a month sometimes way less than that
• 25:10
  but unless something is really bad yeah it takes a lot I think to unsubscribe
• 25:16
  especially if it's a small amount it's when you start getting bigger bigger and when they increase
• 25:19
  prices they do get a bit of churns so people you know opting out but they're still growing they're
• 25:24
  adding 20 to 30 million subscribers a year that's huge yes they're in over 200 countries now
• 25:30
  there's such a mammoth business that's quite quite crazy it does tick most of these boxes
• 25:36
  so it's got definitely got structural growth it's found a lead use this balance sheet there's
• 25:40
  probably not as strong as I would like it to be but hey it has visible revenue and a sick
• 25:45
  a very very strong secret source as well so it only takes probably four or five but because
• 25:50
  one half I would say yeah okay but even but even the founder led I mean yes there's a founder there
• 25:57
  is it worrying that they only have a low percentage of shares I mean ideally if this was like
• 26:01
  the best case scenario yes that they would own own tons they'd be like Mark Zuckerberg or Jeff
• 26:06
  Bezos but I think the fact that they're still there as a co-founder is is enough of a box sick for
• 26:12
  me it's like having a CEO who's not the founder but owns lots of shares pitfalls with both say for
• 26:18
  example with Reid one of the co-founders of Netflix you're saying you know he only has a
• 26:23
  quite a small percentage what happens when Reid's old past his point of being able to really
• 26:28
  help the business grow and he's like 75 and so it's not found a lead anymore then you should yeah
• 26:34
  you reassess the investment and think okay who's there now who's there now do they have the same
• 26:41
  drive and ambition as the business changed are they taking in a different direction so with that
• 26:46
  to say it wasn't a new CEO and they when you are when you go into a business like Netflix as a new
• 26:54
  CEO are you generally given the option to buy some shares is that how it would work yes it was
• 26:59
  they're given like some kind of incentive yes you can buy them on on market I just like you and
• 27:04
  me can you and I yeah but I guess I'm just wondering there's there's a pure enough it's a part of
• 27:09
  your package so you get options which means okay you're going to get paid 70% in cash and then 30%
• 27:15
  I think Google does that yeah so it's but I mean with the company this size you're going to have to
• 27:21
  Reid's stake is like his share holding is something like over three billion dollars and it's like
• 27:27
  one or two percent so for a new CEO to come in he's not going to buy five percent of the company
• 27:32
  because that's like ridiculous so businesses evolve and a lot of small businesses you've got
• 27:39
  founders that have a large share holding and then obviously as they IPO like you said or
• 27:45
  the business evolves and you get different leaders and CEOs and then the share holding structure
• 27:51
  changes so because this business has been around for 24 years it's obviously evolved over time
• 27:55
  he's he's probably sold down shares but the fact that he's were he's still there and he's still
• 28:00
  there in the business is enough for me cool tick tick tick so drum roll okay is it my time do I get
• 28:07
  issues your time to share okay as I buy hold or sell I would say it's a buy I want to buy
• 28:13
  I just put it on my list of things to invest in I would say if you have it there's no red flags
• 28:20
  from what we went through and the only red flag I would say is the balance sheet is to watch watch
• 28:25
  watch competition because there is a lot of and this happens with any structural growth
• 28:30
  industry really if it's really attractive industry then a lot of people want to get be be of
• 28:35
  heart of it so that would be one thing that I would would watch is that if any other companies
• 28:40
  are really really really aggressively growing and you know you start to see that netflix is
• 28:46
  it's not growing less cool yeah and you start that you know people might start saying let's
• 28:51
  does me plus and chill oh yeah that's not red flag red flag it doesn't flow off the tongue
• 28:57
  I'm not as easy to be overtaking but that's a really good advice so basically also if a guy asked
• 29:02
  me to come up for a date and does he plus oh I'd be like sorry how old are you oh good lord
• 29:08
  there is actually a really good movie on that called soul or something which is cartoon it apparently
• 29:12
  it's about mute anyway I was trying to get my bubble to watch and and lock down a normal skin
• 29:18
  I've got a feeling that does he's not going to be rapidly overtaking netflix but that's really
• 29:23
  good so just thinking about and I guess in the next couple of years looking at other online streaming
• 29:28
  platforms what's happening in that space and just evaluating well we're on the topic of
• 29:32
  Disney they're actually listed as well so again you could diversify and put some in netflix and
• 29:37
  some in Disney plus that way of Disney plus does take market share off Netflix you will be in a
• 29:43
  fit in that way as well so there's so many different ways to play it pop that on my list
• 29:48
  Disney plus so yeah so by hold or sell I when would be a time that so the only time you would
• 29:56
  maybe consider selling shares of netflix not that you know this is not advice however
• 30:01
  would be the competitive side or something huge happened around CEO leaving a selling this
• 30:07
  years or they were a massive debt or these would all be thanks to kind of reassess and maybe
• 30:13
  you decide if it was a sell and I think the the biggest one would be the competition because then
• 30:18
  if they started losing market share then they don't have the ability to put up prices because
• 30:22
  they're losing subscribers therefore they can't be some content and that there's the unraveling
• 30:27
  of that network effect or that flywheel so well the amount of heat now that's just it's something
• 30:32
  to watch cool okay amazing that is a good one that is a good one that's a real good one
• 30:39
  yes speaking of also good games I haven't finished watching it I got a bit anxious it was just
• 30:44
  it's too aggressive for me that was the best performing TV show either
• 30:49
  over 140 million households 140 million in the first four weeks that's just absolutely
• 30:56
  wowed and also I mean I'm sure probably the most juiced up Halloween costume
• 31:02
  most most people would have seen this on social media but the guy who wrote it
• 31:06
  it was something it was something like he wrote it 10 years ago or 15 years ago and he's been
• 31:10
  shopping around for that whole time to sell us a laptop I mean maybe it was you know slightly
• 31:15
  exaggerated for a good story but the idea that people said no to him so many times and then it
• 31:20
  became one of the most watched television shows in history I know it's like don't give up on your dreams
• 31:24
  it sounds cheesy but I actually think it's so true oh it's like with the chip analogy with
• 31:29
  being able to come out with a great chip that even though there's heaps of good ones already
• 31:33
  it comes back to the boxbuster story you know if Netflix had given up then and sold to blockbuster
• 31:38
  for a lower price we wouldn't even have this good games um um believe in your dreams kids believe in
• 31:44
  your dreams what are we talking about next time we are talking about a structural growth industry
• 31:52
  so another structural growth industry but not not a stock we're going to talk about the industry
• 31:56
  and then there's lots of different companies within that industry that you can invest in invest in
• 32:01
  yeah so it's basically a big trend something that's growing yeah it's not one specific company but
• 32:07
  it's actually just an area of which is trending upwards we are consumers of and we can also
• 32:13
  invest in cool thank you so much for joining us for today's episode of raising the curve please
• 32:20
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• 32:24
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• 32:28
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