Latest / The Curve / TCW29: Reporting season, baby! Highs, lows and Google hash browns.

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TCW29: Reporting season, baby! Highs, lows and Google hash browns. · The Curve

• 0:00
  Hi and welcome to the Curve Weekly. The podcast that keeps you up to date with all the money,
• 0:06
  business and stock market tea. Everyone should experience for us at least once in their lives
• 0:10
  and Annie shouldn't miss out just because she can't afford it. Help me, I'm poor.
• 0:15
  So I just did a quick little bathroom stop before we started recording.
• 0:18
  Oh God. And I feel like I need to confess something that I've done my whole life and I don't know
• 0:23
  why I do it. It's quite straight. You don't wash your hands. No, I definitely wash my hands.
• 0:27
  Quite a germaphobe. But I got you dancing the toilets. I do that. That's actually not it. When
• 0:33
  I'm nervous, I go to the bathroom and dance. It's funny when we're before a really big meeting
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  the other day. So if he was taking forever the toilet and I was like, okay poor girl, either
• 0:43
  something's up or and then I was like, no, I know exactly what she's doing. And starting to get
• 0:49
  to the point where you know me so well, it's weird. It's creepy. Yeah. Like you said something to me
• 0:53
  other than that. Oh, that's right. I was ending a meeting with in a real hurry. I was like, all right,
• 0:58
  this has been a great chat. Thanks so much. And goodbye. And after I didn't, I honestly didn't
• 1:02
  consciously enter the meeting like that's perfect. Look, so he goes, you need to go to the bathroom,
• 1:06
  don't you? And I was like, I do actually. And the weird thing that I've enjoyed. I reckon we
• 1:12
  could start a whole podcast on your bladder. Honestly. No, no, no, that's so boring. Sorry, I'm not
• 1:17
  going to talk about how she's bladder is. No, but it's like, no, the maybe I'll start a montage of
• 1:22
  the times that Sophie's like, we have an hour meeting and halfway through. She's like, I'm just
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  getting my bathroom. I'm like, girl, it's an hour last night. We would present some
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  people and I took my video off and ran to the low mid presentation. Yeah, because you were talking
• 1:37
  and I thought, keep talking back. You got this. You got this. You got this girl. Just hoping you
• 1:42
  wouldn't throw to me. No, sort of thing that I do. And I've done since I was really young and I
• 1:47
  don't know what it means about me. I'm not sure if anyone else can relate to this. Probably not.
• 1:51
  I often in public toilets, it's so weird. I know you're looking at me like, I don't reckon this
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  is one of these things. You should share on the podcast. I sometimes don't close the door
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  and I just, we, and I don't know what it is. I don't, I think it's when I'm in a hurry.
• 2:06
  I've started on doing my pants before I close the door and like, no, no, this is just like,
• 2:10
  it's almost like a thrill of like, is someone going to come in? I don't know what it is.
• 2:14
  The poor person that comes in. I know, I know. It's a very like liberal like that though. But we were
• 2:19
  in another podcast studio and she just starts taking clothes off and he's the poor technical guy's like,
• 2:24
  we're in the audio engineer, and I think you forget that it's like, it's fine for you, but sometimes
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  I need to think of, yeah, yeah, yeah, true. Actually, my brother used to say that to me. I remember
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  we were on a hike. It's like, you know, those mums that are like, I don't care, I've seen it all
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  before. I'm like, no, but I'm like a pubic teenager. No, I think I remember on a hike, we did
• 2:46
  like a family hike for my dad's birthday. Yeah. It was quite cute. Actually, we did the,
• 2:50
  it was one of the great New Zealand walks, the root burn. And we got like, so it's a split family,
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  my mother, my stepmom is also her last name is Stutz of the N H. And so obviously it is mine.
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  And they got team hats made, team H. And we wore them. There was all the kids. Anyway, the point
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  to the story was I remember getting dressed because I was just like, I don't care. Or I walked
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  down the hallway in my bro and I knew something in my brother was like, Sophie, you're so disgusting.
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  Cover up. And I was like, oh my god, get over yourself. It's one of those examples where it's like,
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  yeah, it's fine for you. I don't care. But other people might be like, yeah, yeah.
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  Anyway, anyway, sorry, that was a wrap. So it's been a big week this week. Oh, so much news going on.
• 3:34
  It's just so weird how excited you get about us. I know. But it's good. Thank you for someone does.
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  Yeah. It's like, goodness one person in the world. So there is a lot to talk about. So we're
• 3:43
  going to be able to have a quick fire. Boom, boom, boom, boom, boom, boom. Oh, ritual. You told me
• 3:48
  to remind you we're doing a podcast for you. We'll do it after. Okay, okay. But got apparently
• 3:52
  got an idea that she wants to be really happy with me. Okay. Anyway, okay. So the S&P 500 now
• 4:00
  is only 5% away from its all time highs in December 2021. So we have almost remember how much of
• 4:07
  a shocker 2022 was in terms of stock market performance. Yes. Nope. Yeah, I know it just all
• 4:14
  blurs into what I know it does. And now it's, yeah, it's that year by year, you know, so 2020
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  that's how the world that's how it works. So I just love it. Sometimes you're like, I know what I'm
• 4:23
  saying is boring. I'm just going to stop my sentence. So 2020 was a shocker over a year.
• 4:30
  2021 was really good. So we've now pretty much gained back to where we were. Yeah, which is
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  pretty incredible. So the stock markets are about 20% yesterday. And we're really only in July.
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  So quite quite amazing that we've we're only 5% away from the previous all time high that it's
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  ever, ever been the S&P 500. Yeah, wow. That is pretty good. Yeah. So this is why we say, you know,
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  and we used for the long term zoom out, take a long term view. Yes. All that kind of stuff. Yeah,
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  but it is reporting season at the moment. Yeah, but there is more than 160. So 160 companies
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  reporting this week. How are you going to choose what you talk about? Well, I've got 160 to talk
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  about. Well, imagine. Love their joke. So out of the S&P 500, so the 500 companies, there's
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  about there's over 160 reporting this week. So it's a big, big week. And we've got a lot of the big
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  your household names, the big tech companies, Microsoft, you know, all of those really epic companies.
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  So we recently did a like a big research piece on our audience and something that I thought was
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  quite interesting is that a lot of people have just said a listening to this podcast recently.
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  And they haven't zoomed back to the beginning. Yes. So they will not know. So my favorite stock of
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  all time is good old Microsoft. So this has been like a real ongoing joke for some time now,
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  because it just frothed a boring company. And when I say boring, I mean, obviously they've had
• 6:04
  amazing returns. But Microsoft is a true love of it. So anyone that doesn't know. Yes.
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  Also, if you are new to the podcast, highly recommend zooming back and listening to some old
• 6:15
  podcast. And not because I don't know, it's just we don't we don't touch on those key lessons
• 6:21
  and things that you should know about and understanding the stock market and how things work now,
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  because we're kind of just expecting everyone to be up to date. So if you're like, oh,
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  it'd be really good to have the basics down zoom like right back to the beginning and have a little
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  flick through. Yes. So Microsoft has reported its results. And I'm judging by that little grin.
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  Wow. Oh no. So you know, it's not going to shoot the lights out. You know, it's a slow and
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  steady grower. It's a boring company. It's the it's the tortoise and the tortoise and the here,
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  you know, but it has done. It's up 50% this year. So far. That's huge. Yeah. Considering we just
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  said the market, well, the the index, the S&P 500 is up 20%. So it's outperformed the index by 30%
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  which is pretty incredible. And so that basically means because the index is up. Wow. I just
• 7:06
  realized you can see my underwear because the index is up 20%. Yeah. Today is just said.
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  Microsoft is up 50% but it's basically outperforming what the benchmark is by
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  30. By 30. Yeah. That makes sense. Yeah. So so pretty good. And especially for a company
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  this size, I mean, it's a massive, massive company. We're not talking about a small,
• 7:27
  you know, small company doubling all your huts. But anyway, so it reported its result and it
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  actually didn't do very well. But don't freak out. Don't worry. No, you're worried. So this
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  happens. You report your results four times a year. There's going to be some volatility. There's
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  going to be some sheer price movements. It's really a really good reminder not to get stressed out
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  about the short-term fluctuations and movements of the sheer price. Take a long-term view. I still
• 7:56
  think Microsoft is a really, really good company. And but the reason it's sheer price didn't do too
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  well after it reported its results was a slowdown in its cloud business. And when I looked into this
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  in more depth, so it's a revenue growth didn't hit the expectations or targets.
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  It was all to do with its slowdown in its cloud business and the revenue growth slowing down.
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  But when I looked into this in more depth, it's slowing down from 27% per year growth to 26.
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  So it's like 1% of a slowdown in growth and it's still growing nearly 30%, which is massive.
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  So snapchat, which is actually called snap, so the sheer price fell about 20%.
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  Yes, because no one gives a shit about snapchat. It's crazy. It's still a $20 billion business.
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  Why? And I just honestly don't know. I mean, there might be younger people listening going,
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  I use it. I use it, but I honestly can't remember the last time I even used years ago.
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  It's like fuckboy app central. You know, up to the photo of a beard or something.
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  Degpig. Maybe I need to get on it. What you want to. So the sheer price was actually $83
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  in September, 21. And it's now $12. So it's highest point that the sheer price ever reached
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  was $83 and it's come all the way down to $12. The only reason I would consider buying snap
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  would be if some tech giant like Facebook bought it and thought I'm going to give it a come back.
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  But that's the thing, when that is announced, or if that is announced, it's already gone.
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  So if you have some kind of hope that someone's going to come in and like,
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  you could just buy a few just to see what happened. If you think their technology or their reach
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  or their platform is really, really good, then you'd buy some shares. But it's kind of,
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  it's a bad investment strategy to buy something and the hope that it's going to get bought out
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  by something else. Because you could be waiting a couple of months, you could be waiting 10 years,
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  it could never happen. The other one that reported was Alphabet, so that's just Google.
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  And we went into the offices the other day. It was so cool. But interesting.
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  The free food, they have like buffet breakfast every day. And that was just like so cool girl
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  about it. She went on quite like a tiny bit of like porridge and a coffee and I was like,
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  I'm going to get hash brown. I've got all the carbs. I think I even got some sweet treats.
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  It was so exciting. It was quite like, I was actually thinking about this in the
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  jar this morning. I was like, I love how you're so excited about everything. And it's so like,
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  it's like the, I don't know, I can't remember the word I was thinking, but it's like the realist in
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  me and I'm just like, yeah, whatever, yeah, this is, yeah, this is nice, yeah, cool. Call me whatever
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  you want. Peasimus poly, I don't know. But it's like the realist and all the rest of the dreamer.
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  Yeah. Because you're like, oh my gosh, when we can do this and we can do that. And I'm like,
• 10:44
  yeah, but what about this? Yeah, I know. It's so funny. Sometimes I'm just like,
• 10:47
  can we just get excited for a second? I'm excited. We've got a cool email the other day,
• 10:52
  which I probably can't say what, what about. But I was like, oh my god, she's like, well,
• 10:57
  hasn't happened yet. I'm like, oh, just bloody hell. Give me a bit of a smile, would you?
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  We're just realists, you know, I'm just realists. I'm trying to work well together. Yes,
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  exactly. So anyway, Google really, really good result. And it was all around its ad business. So
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  you know, Google ads doing really well. It's search business doing really well. And again,
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  this, this company's up 40% this year so far. So again, outperforming that benchmark by 20%.
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  And like, it's a 1.6 trillion dollar business, which is absolutely nuts. It's like crazy.
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  I forgot what we're talking about. Google. Okay, thanks.
• 11:35
  Wow, next Spotify. So Spotify had a really bad result. Oh, shit. Yeah. It's
• 11:42
  super high. It fell about 11% of one day, which is the biggest drop its head since December.
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  So it added, so it's all around subscriber growth with Spotify really, because that leads to
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  revenue growth and profitability. But they have this, they have paid users and unpaid users. So
• 11:59
  it added 10 million net new subscribers. And when I say net, thank you. Just give me
• 12:05
  me the please explain eyes. It's all around you can add customers and you can lose customers.
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  So it's that offsetting. Is it a net positive or is it a net negative in terms of have you added
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  more or have you lost more? So if you had net negative 10 subscribers, which means you've lost
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  10 million more than you've gained, if that makes sense. So you may have gained 100, but you lost
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  110. So therefore your net negative 10. So this is net positive 10, which is really, really good,
• 12:34
  but not going enough. 10 million. 10 million. Sorry. It's not just 10 people, yeah. But they have,
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  they have now half a billion people using Spotify, which is up 30% year over year,
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  half a billion people in this world. Yes. Why would I have gone down? Because it's all about
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  growth and future. You know, we're always thinking about the future. We're investing in companies.
• 12:55
  We don't really care about what they did in the past, to be honest. It's more around can they
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  keep that momentum? And so if you see a growth rate slowing like we did with Google and sorry,
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  like we did with Microsoft in their cloud business slowing, a lot of people are going, oh gosh,
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  is this mean that it's peaked? You know, you can't keep growing at this rate. You're going to
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  keep you're going to be growing much lower. And so this is what they're thinking with Spotify is
• 13:16
  around, you know, okay, well, your growth rate, your growth rate is slowing, you know, all that
• 13:22
  kind of stuff comes into it. But I get a bit annoyed with this chat, to be honest, because I'm like,
• 13:26
  I really believe Spotify is like, what are the main, like what other streaming service is
• 13:32
  even somewhat close to Spotify? Exactly. And I'm in the same camera. I'm like, you've got half a
• 13:37
  million billion, sorry, half a billion customers effectively. What you can do with that is so powerful.
• 13:43
  Yeah, I just, I think I understand the pessimistic approach or forward looking blah, blah, blah. But
• 13:49
  I just, and this is why it quarterly, sorry, this is why when you report your results four times a year,
• 13:54
  it kind of frustrates me because it creates noise and people look at the results and it makes
• 13:58
  businesses short-term focus because they're like, well, we want to do well when we report our results.
• 14:02
  It's like, no, no, you should be reporting your results once every five years, in my opinion.
• 14:06
  So therefore you can actually work on your business, not focus on, you know, reporting good results
• 14:11
  to investors, you can actually, but do you think maybe the best way to look at it is in reporting
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  season, when some big information's coming out, i.e. one of the CEOs is left or, you know,
• 14:22
  something genuinely bad. Yeah. And then we're even like, okay, five. We've been used fallen by
• 14:27
  between each other. Yeah, or like heaps and able to cancel their membership. So it's not increasing
• 14:30
  or like whatever, then obviously that's a different scenario. And maybe could be a chance to think
• 14:35
  about, oh, is this company not doing well? But I think Netflix is a really good example of that,
• 14:39
  because last year I think it was, they had a slowdown in users when customers, because all these
• 14:47
  people got Netflix during COVID, and there was kind of a big lag because most people had had it.
• 14:53
  And so their share price fell a lot. And then that's when you bought shares.
• 14:56
  Yeah, yeah. And then, but your view was very much that it's going to dominate and streaming
• 15:03
  services and in content. And then now it's rebounded. And so that's why it's really good to not
• 15:09
  get too focused on the short-term movements. Yeah. And finally, to finish off the curve weekly for
• 15:16
  this week, oh no, we've actually got one more little segment. Sorry, there's a bit premature.
• 15:21
  Fixed it into the content creator. It's like, I've got a new ritual that we're going to do every
• 15:24
  podcast. I'm like, oh no, I've actually come up with some great content. You have, you've actually,
• 15:29
  when I'm in my zone, in my zone, anyway, there, there has been some revisions to like global
• 15:36
  economic growth. So there's this, it's called the International Monetary Fund. Don't get too
• 15:39
  hung up on the name, but they come out every year with a growth forecast for the globe, like for the
• 15:44
  world. And this is all economies combined. All countries, all kind of yet. And so they have, I guess,
• 15:52
  updated their expectations for 2023. And they're saying that it's going to be 3% growth this year,
• 15:59
  which, which has an increase from what they predicted in April. So it's a really, really good
• 16:04
  sign because it means that the world is doing better than what they expected. Still a slowdown
• 16:09
  from 3.5% last year, but it's a really good sign. And if the, if the countries and economies and
• 16:15
  the world is growing, that means that we're not going into recession. So all of these revisions
• 16:20
  of growth upwards, you know, like numbers going from being revised from 2.8 to 3 is really,
• 16:25
  really good news. So fingers crossed, no countries in different recession. Well, New Zealand is,
• 16:31
  sorry. Yeah. Is there any other countries around the world that are in recession?
• 16:34
  Not yet. Not that I'm aware of. Not an economist though, but I will.
• 16:39
  Could you work on that? Yeah, sure. Okay. So this one. So as you guys, hello, I have a question.
• 16:46
  I've been investing for a while on a platform like Sharesys, but my portfolio is super fragmented.
• 16:51
  IE, I have shares in like 20 companies or funds. So it's very diversified and I've picked some good
• 16:57
  stocks, but have gone, they've gone up a lot, but also some that haven't done very well. So it's
• 17:02
  very diversified and I've picked up some good, and I've picked some good stocks that have gone up,
• 17:05
  but also some that haven't performed very well. Welcome to the world investing. And she goes,
• 17:11
  I was wondering would Vic recommend to just double down on like two to six stocks?
• 17:16
  Obviously more recipe, but more upside potential. What are the considerations? I should be thinking
• 17:21
  about here and what's normal. Thank you. I just heard you say on the podcast, your Netflix are
• 17:25
  doubled and mine's at the same price, but I only had $50 to start with. So I'm wondering what
• 17:30
  a good strategy is. I'm confused. What's the question? So she's saying, so she's got,
• 17:37
  she's got shares in like 20 different companies or funds. And she's saying, is she too diversified?
• 17:43
  Should she just pick two to six stocks? Would Vic recommend just doubling down, so putting more
• 17:49
  money into just two to six stocks? Obviously more risky, but more upside potential. So she's talking
• 17:56
  about is 22 diversified or because some haven't done well and some have done well,
• 18:01
  should you just pick two to six really, really good ones? My argument would be, how do you know
• 18:06
  that those two to six that you're going to pick are going to be really good? You know, they could
• 18:10
  be the two to six stocks that are really bad. And then you've just done yourself, you've put yourself
• 18:15
  in an even worse position. So 20 is a good number for a diversified portfolio. If you're picking stocks,
• 18:23
  she says she's got some funds in there, so that's diversifying even more. So funds made managed funds,
• 18:28
  so giving it to a professional like what you use to do. Yeah, yeah, yeah. So she's got, she's got some
• 18:35
  great diversification in there. The thing is, and she says it's obviously more risky to put it in a
• 18:40
  smaller number of stocks, but more upside potential. And I tend to disagree with that. How do you know
• 18:45
  that there's going to be more upside? You know, that there could be more downside. You could have
• 18:51
  in those 20 companies that you're already invested in. Yeah, there's obviously going to be some
• 18:56
  plonkers in there, but there's going to be some really good ones as well. It's really just because
• 19:00
  you invest in a smaller number of companies, doesn't mean that it's going to do good ones. Yeah. So it's
• 19:05
  kind of, it's a question for yourself to think, do I really want to invest in these 20 companies?
• 19:12
  Or is there some in there that I don't want to invest in there for? You can pull back.
• 19:15
  You can pull back. Like, 10 companies, to be honest, 20 companies and getting your head around and
• 19:21
  and and following and managing and being aware of what's going on in 20 companies is a lot.
• 19:26
  You know, I would say. Could you set up Google alerts or something?
• 19:28
  Yeah, but even though yeah, yeah, figuring it going through like four times a year when they
• 19:33
  report their results and having to go through. Yeah, it's a lot of work. So if you don't feel like
• 19:37
  you want to do that, then yeah, ETFs and funds are a really good way of getting that diversification.
• 19:43
  We've got it on that if you don't know what I'm saying. Yeah. And yeah, so there's no right
• 19:50
  number of what is a good diversified portfolio. But you're essentially saying having lots is not
• 19:56
  a downside. No, exactly. That's probably the least doesn't mean better in terms of performance.
• 20:02
  It could mean worse because you could pick two stocks that fall 20%. Yeah. So it's just,
• 20:08
  there's no, there's no right number. But yeah, it's don't think that if you're holding less stocks,
• 20:14
  they're going to do better because they might not. Yeah. Great question. Yeah. Great question.
• 20:19
  Thanks. Did we have a ritual we needed to do? We've talked about three times. Oh, after.
• 20:24
  So not even on the podcast. Why do I keep bringing it up then? I don't know. Oh my god,
• 20:29
  how embarrassing. So this is like a cute little Sophie that ritual is happening off air that no one
• 20:33
  should really know. Okay. Yeah. Good. No, I needed more of a breeze. It's going to be like,
• 20:42
  okay, thanks for joining in. That's a joining in.
• 20:48
  While you wait, sorry, I had one more thing I wanted to say. We have thousands of people that
• 20:53
  listen to this podcast. Yeah. Every episode. However, you know, I was looking at how many people
• 20:58
  have rated or reviewed. It's like not that many in the hundreds. And then I go on like other
• 21:04
  podcasts and they have heaps of can you guys not be so lazy? Yeah, please. I don't even know how
• 21:09
  they do it. I don't know. Can you please figure out how to rate the show because we want we need
• 21:15
  we want ratings. Yeah. We want ratings. We're not about thriving. So like if you need something
• 21:20
  from us, you just let us know. Yeah. Okay. That was all. Bye. Love you. Bye.
• 21:45
  And we hope you have a good week and see you next Monday. Bye. Bye.
• 21:50
  Sweet. Yeah. See you next Tuesday. Well,
• 21:55
  see you next Tuesday. I mean Monday.