What should you do with Netflix?

Last week Netflix released their quarterly report. Unfortunately, even thought they exceeded expectations the stock plummeted quickly on the 18th. This left many investors, including myself stumped. I was pleased to see the great earnings on Monday, but was alarmed to see the stock dropping at a rapid rate on Tuesday and Wednesday. The question is why? Many suspect, including Marketwatch.com that the reason the stock did not continue its previous growth was because Netflix can’t maintain consistent subscriber growth. While Netflix was able to increase revenue they are consistently gaining less and less subscribers.

In the past few years Netflix has tried everything to increase the amount of subscribers. They have created original content for their show that is only available on Netflix. They have attempted to increase international subscribers but fail to reach different cultures due to the fact that they have limited content for different regions. They have attempted to address this by adding new content, but this had little effect. Despite their best efforts, Netflix can’t seem to meet expectations for growth. For investors, this is a big problem. Until Netflix resolves the issue of limited subscriber growth I am pulling my investment. I have made a decent amount of money with them so far, and I am sure that they can resolve this issue. All things considered, they did change television as we know it.

Thats all I have for this week. I hope this blog was entreating and informative for you. As always, if you have any questions or comments feel free to leave a comment or contact me directly. Until next time!

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Is Snapchat A Good Buy?

There has been a lot of talk about Snapchat since they went public last month. Snapchat IPO was $24. They peaked at $27.09, and are currently at $22.53 a share. Hours after their IPO Snap was showing serious promise, but after they peaked at $27.09 it was all down hill. It wasn’t until the middle of March that Snapchat made a come back. Many investors are skeptical as to whether or not snap is a good buy, and if they will continue to go up in value. Fortune.com  believes that Snap will soar 20% in the next month. A bold prediction, but not out of the question by any stretch. In the past few months Snapchat has proven themselves to be an innovative company with a lot of potential. The CEO, Even Spiegel states that Snapchat aims to be the next Facebook, NOT the next Twitter.

Personally I don’t think it’s fair to judge snapchat strictly based on their IPO performance. The stock was highly overvalued, and that caught up to Snap fairly quickly. If we look at what Snap is doing today, they show a lot of promise. Yesterday (April 1st) Snapchat released their first major product since their IPO. It’s called “Our Story.” It works a lot like the event stories Snapchat has had like during the Women’s March, but it is available for anyone to share at anytime, and be searched for my anyone at anytime. In a Snap blog post they stated, “We’ve built a new way to understand what’s happening in snaps that are submitted to Our Story, and to create new Stories using advanced machine learning.”

Chicagotribune.com stated that they believe investors think Snap will continue to rise in price is because they continue to roll out new and interesting products. Snap had great success with Spectacles last year. They brought in great numbers as far as new users and revenue. Snapchat has continued to grow in size as far as employees and shows no sign of stopping. That being said, there is still a lot of risk investing in a company that has only recently gone public. To answer the initial question, I think Snap has the potential to be a great investment, but I would use extreme caution. Watch the ticker like a hawk and do your homework.

That’s all for this week! I hope the blog was informative and helpful. As always, if you have any questions or comments to not hesitate to send me a message or drop a comment.

 

What is a “Safe” Stock?

What is a “Safe” stock? There are many things to consider when picking a low risk stock. Many will say that large companies like Pepsi Co., and Microsoft are safe stocks to invest in, and they would be correct. When looking at large and successful companies they consistently grow each year. So how do you tell if that company will continue to grow? Well there is no sure fire way to know that will continue to grow, or wont go bankrupt, but there are plenty of things to look at to give you a good understand of where the company stands in the terms of growth and stability. The first being the company’s financial ratios. Say you were interested in investing in Walmart. Obviously, Walmart is a very successful company that doesn’t show any signs that they are slowing down anytime soon, but lets say you want to be sure. The website www.morningstar.com is a great website to get financial ratios from. When we search Walmart we found several different ratios to use and compare to Walmart’s competitors. They have ratios all the way back to 2007, so you can use these ratios to monitor a companies growth. They even categorize the ratios to make it easier for investors.

Another great way of determining if a company will continue to grow is if they are evolving, adjusting, and expanding. Take Walmart as an example again. They realized they were losing market share to Amazon.com due to Amazon’s prime membership. The most attractive feature of Amazon Prime is their two day shipping. However, the membership costs $99 a year. This is where Walmart takes back their market share. Walmart will ship select products right to your door in just two days, just like Amazon. This is just one of the Walmart is evolving and continuing to grow. They show exceptional promise for investors.

I hope this weeks blog was helpful for you. As always, if you have any questions or comments please contact me or leave a comment! Until next time, happy investing!

Buy Low, Sell High?

Anyone who has been about people that invest in the stock market have heard the saying, “Buy low, sell high.” That means you should buy a stock when the price is low, say when a company has a poor quarterly report, and then sell the stock when you believe it has peaked. Unfortunately, there are many holes in this method. First being, it is pretty difficult to predict when a stock will truly “peak out.” Second, this is not a sure fire way to guarantee making money. Despite what your uncle tells you, just because you bought a stock at a price that was lower than it was yesterday does not mean you’re going to make money.

Today I was asked by a friend when the right time to buy a stock was. I immediately thought of this say, and in fact used it in my explanation to her. Generally, by looking at the charts you can see when a stock has “bottomed out” meaning it looks to have plateaued  and will not be going any lower. But this is not a guarantee. Just because a stock appears to have leveled out this does not mean it won’t continue to go down. Brad Sherman did an article with CNBC, in it he stated that it was more important to spend your time diversifying you account than it is trying to time the market. I couldn’t agree more. Instead of trying to squeeze every last cent out of a stock before you buy, it may may be more important to put time into researching different stocks and diversifying.

When should you sell? The questions that has many answers. In a perfect would the only time you would sell is when you were ready to cash out. Unfortunately, we can’t always count on our investments being perfect. There are plenty of indicators that you can look to in regards to selling a stock. One of which is rapid price acceleration. While it may be tempting to ride that out as long as you can it is a risky business. Generally a stock will fall in value after a quick price rise. This is due to a stock being overvalued. Another simple method of selling your stocks it setting goals. For example, if you buy a stock at $25 a share you can set a goal of making $5 on each share. Once the stock hits $30 you sell.

I hope this blog was helpful to all of you. As always if you have any questions feel free to ask! Until next time, keep investing!!

Getting Experience

One of the most intimidating part about investing in the stock market is the unknown. Without any pervious experience in investing it’s quite overwhelming for someone to throw their hard earned money at something they do not fully understand. So how can we overcome this lack of confidence and experience? Stock Market Simulators.

Last semester I joined into the Messiah Colleges Stock Market Games through a website called investopedia. If you have never heard of them I strongly suggest you check them out. They are a great resource for investing, but furthermore they have a stock market simulator. The simulator copies exactly what the actual market is doing, but instead of using your own money to invest, you use virtual dollars. Simply put, everything is the same as it would be trading with a company like e-trade. There is commission fees, you have the ability to put stops and limits on trade, and you can even sell and buy stock options. If you are fearful about investing and are looking to get your feet wet, I couldn’t think of a better way to do it. Before I started playing around in the simulator I was investing in big companies, mutual funds, and ETF’s. Anything safe, and they I knew wouldn’t be high risk. But as the saying goes, “No risk, No reward.” This couldn’t be more true. My first week of “risky” investing I made over $200. The next week, I lost almost $250. This was mainly because I got cocky, I was over confidant in my abilities and did’t do thorough research on the companies I was investing with. Never the less, stock market simulators are an excellent way to get some experience with investing, and gain some confidence and skills.  It could also be a great place to learn about new parts of the stock market like stock options, which is what I am currently doing. This gives me real world experience without the financial hardship of my mistakes.

I hope this blog post was informative, and helpful to all of you. Please check out investopia’s stock market simulator, and if you have any questions or comments please feel free to ask! Until next week, happy investing!

Risk, and How to Manage It.

Risk is something that every investor has to consider. Every time you put money into the market there is always the possibility you won’t get some of it back, or potentially all of it back. On the other side of that coin you could get all of it back and much more. One of my friends asked me this week how I know I will make money in the market. When I replied with, “I don’t” this only further confused her. She asked, “Well then why put money in?” I attempted to answer her question by opening my Robinhood app and explaining why I invested in XYZ company, how long I’ve been invested and what to look for when investing.

What do I look for and how do I avoid risk? There is not sure fire ways to avoid risk, but there are plenty of ways to reduce it. When I want to invest in a single stock I do my homework. I look at all the ratios I have available to me. I research company price chart history. Lastly, l look for any resent news stories about the company. Using all of these things if everything checks out and my gut agrees, I make an investment. Something I think is important to note is that just because you find one or two things you are uncertain about in a company, I would not write them off as a bad investment. I have had many investments where there were plenty of warning signs in a company, but they still made for a great investment. NVidia for example, has been all over the place in the resent months. By studying their charts long enough I was able to see a pattern in their stock price, and I played that to my advantage by investing for short periods of time when I thought the stock would be going up. Once I saw signs of the stock price peaking, I sold my shares.

If you are just starting out, or lack confidence in your investing abilities a great option for you would be to diversify in many large stable companies (Apple, Google, etc.). This will provide stability as well as teach you the fundamentals of investing. Another great option is to invest in an ETF. ETF’s are a great way to get your feet wet in the world of investing. They are a stable option, put together by experienced individuals. Another benefit of ETF’s is that they are generally low cost shares. So if you’re looking to invest but don’t have a lot of money to do so, this is a great option.

I hope this was helpful for you and gave you some clarity about risk and how to handle it in your own investing endeavors. Until next time! Thanks for reading.