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There is a lot I want to do with real estate. Condos are something that I have been talking a lot about lately as I believe that it will be very easy to make money off of renting out condos, but I recently realized that the biggest opportunity might be in Cabins. With Cabins, I would not want to rent these out to people who are wanting a home, but I would want to rent these out to people wanting a vacation. I'd probably use something like Airbnb or Verbo or something to do this. \
The reason I want to do this is because people are willing to spend quite a bit on vacations. I could probably rent a cabin out for $200-$300 a night. Let's say that I was only able to get $200. If I ONLY rented out the cabin on weekends, I would make $2400 a month off of these cabins. That is what I would expect to make.
Obviously, I would likely finance the purchase off these cabins, and I believe i'd probably be paying around $1,000 a month for each cabin. This means that each cabin I own would profit $1400 a month. I would, however, have to pay someone for maintenance of the property, and I would have to pay a little for insurance on the cabin as well although I factored that part into the $1,000 payments. I'd realistically only be making around $1,100 a month on each cabin.
However, once the cabins are paid off, I would be looking at around $1,800 dollars a month in profit. This is far more than I believe I would make off of my condo plan.
The cabins really wouldn't be that expensive to build. What would be expensive is the property itself because it would have to be in pretty desirable locations. Of course that is not really a con because the better the location the more people would be willing to pay.
I think that this could be an amazing way to make money.
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I've been reading a book on the life of Warren Buffett called "The Snowball". It's a fantastic read so far. One of the reviews calls it the capitalist Bible, and I think that I have to agree with them. Towards the beginning, there is a speech that Warren Buffett is giving to a lot of other successful businessmen in Sun Valley, Idaho where he is talking about the danger of investing in innovation. This surprised me at first because I thought that of course one would want to invest in innovation. After reading the speech that he gave, I think I have to agree with Warren Buffett. After reading this, I added a lot of his points to my investment strategy.
Warren Buffett showed evidence for this point by showing a few examples. One was cars. The car was probably the most important invention of all time. It drastically changed our entire way of life. How many people, however, made money from investing in car companies. Well, at one point there was 2,000+ car companies that one could invest in. All but 3 went out of business. Most of the companies people were investing money into failed.
Warren Buffett also used airplanes to prove his point. The airplane was another amazing invention that changed the world. Again, one would expect people that bought airplane stocks to have made a nice profit. They didn't. Most people that invested in airplane companies actually lost money. Buffett then essentially said that if he saw the Wright brothers flying their plane he would hope that he would have enough foresight to shoot the plane down to help save capitalists from losing so much money.
The overall point is that a lot of people believe that they should be investing in the future. They believe that they need to find the next big thing. Historically, that has been an amazing way to not make any money though.
I believe that we will see another example that proves this point in the near future. Electric Vehicles (EVs) are believed by many to be the future. I agree with this. We have seen the creation of many EV companies. While I have no interest in trying to predict which of these companies will succeed and which one of these companies will fail, I will say that I believe more than most will go to 0. Most people that invest into EVs will lose money in my opinion. I do believe that EVs are the future, but I believe most EV investors will lose.
I also believe that this will be true for the metaverse. I actually agree that the metaverse is the future. I believe that VR will be the next big thing. Most VR companies, however, will fail in my opinion. Most of the people that invest in VR will lose money.
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Warner Brothers Discovery is a stock that I recently began buying. I stated on a recent post that I was making this investment largely because I see a lot of future growth in the company’s streaming platforms. The company recently had their first quarterly report since the $43 billion dollar merger that combined Warner Brothers with Discovery, and the quarterly report did not go so well.
The first piece of bad news is the fact that the company reported a $3.42 billion dollar loss this quarter. Now, some of this can be explained due to the merger itself, but this is definitely not news that is ideal at all.
Analysts were expecting the company to bring in $11.91 billion in revenue, but the company only produced $9.82 billion in revenue. I admit that I find this pretty surprising, as I did not expect them to miss on revenue.
The company did, however, beat expectations on number of subscribers added which is what I care about the most. The company added 1.7 million subscribers this quarter vs the 1.65 million that they were expected to add. My big bet on Warner Brothers Discovery is that HBO Max and Discovery+ will both grow into pretty big revenue producers for Warner Brothers Discovery although I believe that this will take quite a while.
One thing that this quarter has led me to believe is that there might be a few messy quarters for this company in the near future as the two companies continue to integrate.
The company is also in the news right now for slashing the releases of two upcoming movies. Batgirl and Scoob! Holiday Haunt have both been pulled from production. Batgirl, in particular, has allegedly been pulled after terrible test screening reactions, and it seems like Warner Brothers Discovery believes that it is best to just not release it.
Obviously as a shareholder of this company, I wish that their quarterly report would have provided higher numbers. The stock is down around 11% so far after hours based off of this news. I am, however, not very concerned. I invest for the long term, and I do not really care about short term performance. The thesis I published on this stock originally is still what I believe today, and until that changes, I will remain a shareholder. I am still in the positive on my investment although I would not be surprised to see that change. Long term, I still believe that this is a good market play.
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Snapchat is not having a good last few days. In the last 5 days, the stock has decreased by 28.52%. This happened after their latest earnings report where they reported that revenue only grew by 13% to 1.1 billion during the quarter. This happened after Snapchat previously warned that they thought revenue would likely be at their low end of their guidance which would have been a 20% increase. They underperformed their warning. A growth company like Snapchat does not necessarily have to be profitable in order to increase valuation, but they do have to be increasing revenue. The fact that their revenue is essentially flat right now is not good.
They also reported that they had a net loss for the quarter at $422 million. Compare this to last year at this time where they lost $152 million. Again, a growth stock like snapchat does not necessarily have to be profitable, but the fact that they spent far more than last year at this time and still were not able to increase their revenue by much is a very bad sign for the company.
Snapchat did, however, report an increase in daily active users. They now have 347 million people using Snapchat every day which is an 18% increase in users for the quarter. While people might look at this as a good thing, I do not. The fact that they had an increase in users and still had a hard time growing their revenue, to me, is a bad sign. What point is there in having 347 million people using their platform if they can’t make any money off of it. I think that a big problem is that Snapchat’s users are primarily young people and that is not necessarily the best market to advertise to. I don’t pay for any ads on Snapchat, and I probably never will. Compare this to Facebook where I do spend money on ads for this site. I do this because advertising on Facebook shows results and is cheaper. Why would I, or anyone, pay more money for less results?
One thing that really confused me was the fact that Snapchat announced a buy back program for its stock. Why would a company that just lost $422 million in a quarter launch a buyback program? Is this really the best use of their money? I can’t imagine this being the case. They’re planning to spend $500 million in buybacks. I believe this money should have gone to paying back their debt.
Lastly, Snapchat refused to give guidance for the next quarter. I believe that this is the worst thing they could have done. When I read this, I couldn’t believe it.
As always, I am not going to tell someone if they should or should not buy this stock. What I am going to say is that I am definitely not buying the dip on Snapchat.
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Netflix announced their Q2 earnings recently. I have been pretty bearish on Netflix as a company, and I wanted to look at the earnings report and reflect on my opinions on the stock. One of the big reasons that I am not buying the stock is because I think that they will continue to lose subscribers because of the influx in competition. I think that many people will cancel Netflix for other platforms.
In their Q2 report, they announced that they lost almost a million subscribers. A lot of people looked at this as positive news as they were projecting a loss of 2 million subscribers. While shareholders should be happy that Netflix did not lose as many subscribers as expected, they still lost almost a million subscribers. That is still not good news for the company.
I am, however, very into the idea of a cheaper subscription with ads. I noticed that a lot of people are against this and think that this is a bad direction for the company, but I am actually a fan of the idea. I think that this will help Netflix make a lot of money. This tier will let Netflix monetize people that would have never otherwise given Netflix any money at all, and it will allow Netflix to report growth in users again. Depending on price, I would probably buy this option myself. I don’t mind ads as much as some people do, and it would be worth paying less money and seeing ads in my opinion.
I am still staying away from the stock though. There are other streaming services that I am far more bullish on like, for instance, HBO Max and Discovery. I recently made an investment into Warner Brothers Discovery who owns these two platforms, and I will be buying more shares over the next while. I previously stated that I am also more bullish on Disney+ than I am Netflix, and while Disney's stock has not performed very well lately, I do believe Disney+ will experience better growth than Netflix. Disney has some very valuable IP that I think will bring in a ton of subscribers.
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Analyzing Anti Fund, a Rolling VC Fund Created by Jake Paul and Geoffrey Woo, After One Year of Existence
My long-term plan with Finance by CWT is to start investing its money into startups. I want this company to help build small businesses into large companies. One of the ways I have considered doing this is through the creation of a fund that would be managed by Finance by CWT.
Because of my own goals, it interested me when I saw that YouTuber Jake Paul along with serial entrepreneur Geoffrey Woo were creating a rolling fund through AngelList to invest into startups. For those who don't know what a rolling fund is, a rolling fund is a fund that remains open to investors (limited partners) each quarter. They're called rolling because they remain open. People invest money into the fund, and the fund managers invest that money. The fund managers get paid a management fee (normally 2% of the investment), and they collect a fee on profits (normally 20%).
Now that Anti Fund has officially existed for a year, I want to look at how it did. First of all, the fund has grown to 23 million dollars in assets under management across their funds and vehicles. I think that that's pretty impressive. I was surprised to see that they grew that big. Anti Fund has already returned 50% of day 1 investor's investment which is pretty impressive, as well, for a startup investment fund. Anti Fund has also 20xed on paper markups which is impressive, but it is important to note that that is not liquid money. It's just paper value that would be very difficult to realize.
One thing that would make me nervous if I had my money in Anti Fund, however, is that looking at their investments, they have a lot of money tied into web 3, NFTs, and Blockchain companies. I believe in web 3 and have investments in that space as well, but I do not believe in a lot of web 3 companies. I believe that most are going to 0 and only a few will succeed and be super successful. I do not believe in NFTs. I definitely believe in blockchain companies, but I believe most of them will go to 0 as well.
Some of Anti Fund's investments I do believe in but a lot of their investments seem really risky. Investing in Startups itself is very risky as 90% of startups fail, but I believe that a lot of Anti Fund's investments are especially risky.
It'll be very interesting to see how the fund does over the next year.
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When Elon Musk first made his offer to buy Twitter, I stated that this is an amazing opportunity for Twitter but a terrible one for Elon Musk. Twitter just is not a good business. They aren't profitable. They struggle to increase revenue. They struggle to increase users. This is just not a good business. However, Elon Musk did make an offer to buy Twitter at a nice premium for Twitter shareholders. Now, however, Elon Musk wants out of the deal. Twitter does not want Elon to get out of the deal, so they are taking him to court to try and force him to buy the company. In this article, I want to answer the question, should the courts force Elon Musk to Buy Twitter?
When Twitter accepted Elon Musk's offer for the company, a contract was signed. Now, Elon Musk does not want to buy Twitter. The issue is that situations like this are the sole reason that contracts exist in the first place. The contract is signed so that neither party can go back on their word. Elon Musk stating that he no longer wants to buy Twitter doesn't change the fact that he signed a contract to buy Twitter. It is the court's job to uphold that contract.
Many people have been mentioning how there's a one billion dollar breakup fee in place for the deal. This means that Elon Musk can get out of the deal by paying one billion dollars to cancel the deal right? No. I feel like there is a lot of misconceptions going around about this breakup fee. This fee does not give Elon Musk the ability to back out of the deal for any reason and just pay a billion dollars. What it actually was for was if Elon could not secure financing for the Twitter deal, he would have to pay one billion dollars. He did secure financing so the one billion dollar breakup fee is not relevant.
The only real shot Elon Musk has is proving that some kind of fraud was done on Twitter's side. It seems like he is going to try for this by saying that Twitter lied about the amount of bots on their platform. I've heard many people say that this is going to force Twitter to prove that the number of bots on their platform that they stated was the actual number, but this just isn't true. Twitter does not have to prove anything. Elon Musk is the one making the claim that Twitter has more than 5% bots. It is his job to prove that. He must show the evidence he gathered to arrive at that conclusion. The burden of proof is not on Twitter.
So, should the courts force Elon Musk to buy Twitter? Yes. It is their job to uphold the contract unless some kind of fraud on Twitter's part can actually be proven. Now, will the courts actually force Elon to buy it? Maybe. The court in particular that will be looking at this case is an advantage for Twitter as it is a court where billionaires have little sway.
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Warner Brothers Discovery looks very appealing right now. While in this market downturn, I have not been buying very many new stocks. What I have been doing is buying more shares of stocks that I already own so that I can lower my average share price. I basically have been seeing this market downturn as an amazing opportunity to get shares of my favorite stocks at amazing prices. With this being said, when I see a stock with huge growth opportunities at an insanely reasonable valuation, I cannot turn down an opportunity like that.
Warner Brothers Discovery (Ticker WBD) is trading at a p/e ratio of 6.59 which is amazing. Normally, when one sees a p/e ratio this low, it’s with a stock that has very little growth potential. This, however, is not the case at all with WBD. WBD has a lot of potential for growth. I personally believe that this company will grow by quite a bit over the next decade or two. The company is currently trading at a 35 billion dollar valuation. The company owns a lot of stuff notably DC, HBO, HBO Max, CNN, CNN+, HGTV, Discovery+, Animal Planet, and Cartoon Network. They also, of course. own Warner Brother’s Entertainment and the discovery channel. When one looks at all the valuable things that they own, does it really make sense for all that to be trading at a 35 billion dollar valuation. To me, it doesn’t make sense at all.
With that being said, there are two aspects of the business that I am very interested in which are HBO Max and Discovery+. I think these two streaming services have a lot of potential for growth. WBD has some very powerful IP (intellectual property). This means that they can make, and have already made, content featuring some of the most iconic fictional characters of all time. They already have a lot of plans to do this with DC characters. This could bring a lot of people over to HBO Max which they will then receive reoccurring revenue from. I think that this will lead to massive growth for HBO Max. I also believe that discovery+ has barely even begun to reach its potential. They feature some of the most recognized daytime television shows, and I believe that they have a very large market as well.
I believe that this stock could be a very good long-term play, and I plan to start buying shares of this company soon. I don’t know how the stock will perform over the short-term, so my plan is to dollar cost average into this company over a period of time.
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Intuit is a stock I have been watching for quite awhile. They own some absolutely amazing companies that I personally use, and I have been debating purchasing shares of this company for quite some time. Some iconic brands that they own that I am also a fan of are Quickbooks which is an amazing tool for small businesses, TurboTax which is an amazing tool for taxes, Mint a personal finance tool that I personally use for budgeting, CreditKarma which helps people with their credit score, and Mailchimp which you will see a subscription form for below as Finance by CWT personally uses them. All of these services have one thing in common, I believe they are in a good position for even more growth.
Shares of Intuit currently sell at a pretty hefty premium. They trade at 44.08 times their earnings. While that is a pretty large p/e ratio, it is important to realize that they are growing their revenue at pretty large rates. In 2019, revenue for Intuit rose by 12.6% followed by a rise of 13% in 2020, and 25% in 2021. This is a pretty large revenue increase which helps justify the hefty valuation. Intuit currently has a valuation of almost 110 billion dollars.
Intuit does offer a small dividend of .70% which is actually pretty large for a high growth company like Intuit. Intuit has a really high price to book ratio at 6.42. They also have a high price to sales ratio at 8.48 which is not ideal considering that a p/s ratio of around 1-2 is what is considered good.
Intuit is trading at a very high valuation but it is growing very quickly, and if it continues to grow very quickly, then buying the stock at a very high valuation will become a justified valuation in the future.
While I love the businesses under Intuit and want to own them, I do believe the stock is currently overvalued and will personally be waiting for the stock to fall a little bit more before I am willing to buy it. I do think that this company could be a good long-term play, so I will be watching the stock for awhile more and hoping it gets to a price that I am more comfortable with.
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I think that this bear market that we are currently in has opened up an amazing opportunity right now in dividend ETFs. Dividend ETFs have taken a hit so far this year along with essentially everything else, but the downtrend has been minimal compared to most. This is because dividend ETFs are usually pretty stable. People don't buy into these ETFs to see a huge increase in share price; people buy these ETFs because of the passive income opportunity.
My goal with dividend ETFs is to use them to get cashflow for Finance by CWT that can be used to give us more money to invest into startups with. Investing into cashflow producing businesses will basically fund our more risky investments. With this in mind, one can see why it is so important that we invest as much as possible into dividend producing ETFs. One can also imagine how ecstatic I must be to get shares in these ETFs at a nice discount thanks to this bear market.
Right now, SCHD, a dividend ETF from Schwab, is providing a 3.10% dividend yield which is absolutely incredible. Right now, SCHD is down 12.10% year to date but compare that to the S&P which is down 22.52% year to date and see why I claim that dividend ETFs are more stable. This does mean, however, that when things recover the S&P will grow by far more than dividend ETFs like SCHD, and I am investing a far larger amount into the S&P than dividend ETFs right now because of this reason, but I feel like the cash flow opportunities of dividend ETFs make these ETFs look like a very smart investment play to make.
If one is looking for an investment that will remain more stable than others while also producing revenue for themselves, than ETFs like SCHD will probably look pretty attractive to them. This is especially true during a market downtrend like we are in now.