Baidu [Ticker: BIDU] is an Incredible Buy!

Big news coming Friday if everything works out well. I’ll keep everyone updated. Also the growth on the Prime Pick is ridiculous. It was barely doing 40 views a day last month, and now it’s doing close to 200 a day since we changed to Thank you so much for the support!

I wanted to write about Baidu [Ticker: BIDU] the day it crashed to $178 from $194, but I held off until I was certain it was done falling. Well it’s done now and it’s actually looking like it’s ready to skyrocket back to its appropriate price.

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A 1 month chart of Baidu showing it’s unprecedented Decline

First let’s talk about why Baidu fell from $194 on April 29 to it’s current price of $167. A college student in China went to go meet a doctor that he found off of Baidu for cheap, and ended up being raped and killed brutally. The Chinese people were up-in-arms, the media spun the story out of control, and the government reprimanded China. When the west heard of it the stock nosedived faster than a plane with a broken engine.

Fortunately the Chinese know what they’re doing and Baidu issued a very impressive public apology in which Baidu CEO Robin Li called for the company to refocus from being completely profit driven to focussing more on quality content and to put ‘values before profits’.

The market eventually responded to Li’s pleas and Baidu hit rock bottom on Friday. Today (May 16), it shot up $8. The stock is extremely profitable and it has to correct back to its appropriate price eventually. A slew of strong buy recommendations and reaffirmations from firms also carried the stock.

Baidu also flared to $205.00 in post-market trading today, and while it may not be significant, there are definitely lots of people with a good amount of money betting on it. Expect to see it rapidly get back to at least $180-ish before growth slows.

Forgetting where Baidu should be valued and all that other analysis, just look at it from a layman’s perspective. The company is almost as diversified as Google – providing just as many services as Google does.

Baidu is also partnered with BMW, and is currently producing self-driven automated cars available for sale in the Chinese city of Wuhu. This means that it’s already beaten out all of the other Silicon Valley tech giants that have been struggling in the field. The market would normally be rewarding advances like this, but combined with its unprecedented (and unnecessary) decline of more than $30, the stock is literally primed for easy pickings.

Sorry for the really short article, but there’s not much to say about Baidu except it’s easy money. It reminds me exactly of how Google was before Google absolutely skyrocketed.

We Have an Official Website Address Now!

Hey guys!

I know its been a couple of weeks since I wrote my last . I know I promised to write 30 Articles in 30 Days; that didn’t work out, but not even managing to write a single article in May so far is pretty bad. No excuses, it’s not that I’ve been busy as much as it has been that I resolved that I would NOT end 10th grade year with anything lower than an A in any of my classes, so I have been fighting tooth and nail to get my grades up to As.

Now that my grades are up I can focus on writing at least 3 articles a week on The Prime Pick again. So to stay committed, I got a new domain:!

Anyways, if you e-Mailed me with any questions or comments re-send the e-Mails and I’ll get around to answering them soon. I’ve kept the views flowing by being slightly active on Quora, by linking people to the Dropshipping, How to Pick a Winner 100% of the Time, and Investing 101 Articles, but the .

I’ve written a lot of half finished articles over the last couple of weeks, but I didn’t feel that it was up to my standards, but I do have a lot of ideas now.

One last thing to note, I found out just now that I made 29% returns last year, and had 42% returns in 2014. I’m feeling slightly more optimistic about how this trading year is going to end now!

Dropshipping – The Art of Making Thousands While You Sleep

          Disclaimer: I am starting a Dropshipping business (soon™) and wrote this from what I know about it so far. Before deciding to start a Dropshipping business I reached out to 11 Dropshipping veterans that I came across while reading about it. This is a cumulative abridged summary of all the knowledge they imparted in me. This means that I have no personal experience in Dropshipping, so I might be oversimplifying things or overstating the importance of others. It’s always best to do your own research and remember, people WANT to help you, all you need to do is ask.

          Chances are, if you told someone 10 years ago that you were thinking about quitting your job and starting a full time eCommerce business, you would’ve been called crazy. Nowadays however, the eCommerce market is one of the sure shot ways to make hundreds of thousands of dollars a year; and the best part is it will at most only take you a couple hours a day for the first 3-6 months.

         So what is Dropshipping? Simply put, Dropshipping is where you sell another person’s product (inventory that you don’t own) to a customer at a significantly marked-up price. Essentially, it makes selling products online completely RISK FREE by removing yourself from the fulfillment process to the customer. The process is as follows:

  1. Customer (A) orders product from YOU (B)
  2. You contact your Supplier (C) and get him to send the product to the Customer.
  3. From Start to Finish: A -> B -> C -> A

              Three questions arise from this. In no particular order, the three I had were: how is this profitable to you (and the supplier), how does the customer find you, and how do you get a supplier?

          Let’s start by talking about how you get a supplier. Before you can even find a supplier you need to find a product. Finding the product is the most important thing that you will do in this entire process. Finding a bad supplier, messing up on sales pages, or just about everything else can be rectified; finding a bad product to invest all your time into selling cannot be.

        So how do you find SELLABLE products? An easy way is to browse Etsy, and look for quality products that sell for under $20, but you can easily list for $40-$80. One article I read talked about how this particular Dropshipper found China Plates on Etsy for $16 and flipped two at a time for $47.50 + Shipping & Handling. Another way is to browse Amazon’s Top Seller’s Section and then choosing a good product from there. If you are looking to fill a specific niche then that shouldn’t be a problem either.

          One of the people I talked too told me he started off by listing an 8 pack of toothbrush he bough from Costco for $4 at $8 plus S&H and it repeatedly sold out. That’s not even drop shipping, but that is representative of how people will buy anything they need without even looking at the cost. It’s a very important lesson to learn early, because I plan on listing stuff I find at at least a 20% mark-up on top of the high margins. After talking to several others, I fully expect it to make as much money as the next guy who’s selling it for cheaper.

          So now you have your product. How do you find a seller? Well if you’re going the Etsy route (or something similar) you can directly contact the seller and let them know of what you plan to do, and ask them how much of the product they have available for sale. Also ask about their costs and negotiate a good price. Needless to say, you don’t need to go just through Etsy. There are thousands of eCommerce websites, hunt around until you find the cheapest one for the product you’re looking for.

           If you’ve found a product you want but it’s manufactured in China or somewhere, then chances are you’re not going to be able to make much in the way of margins. Chances of you making up for lost margins in volume is also unlikely. However, if you do find a product that is made en masse and you can still make a decent margin on it, then the best way to drop ship it would be to contact the factory directly and explain what you’re doing. And then offer them a percentage per sale or a royalty per month for every sale they ship for you. A woman I talked to told me that she made over $100,000 by contacting the makers of a product called Silly Bandz (when it was incredibly popular) and getting them to ship the Bandz to her customers for a royalty fee.

          So this leads directly to the question of why the supplier themselves don’t do this. The reasoning I’ve seen on a multitude of occasions is that the people who make these really nice products don’t know how to effectively market them, and you can market it better (giving both parties exposure), and it’s not like the makers are losing money. It’s not a great reason, but it’s the only one I’ve found.

          Now none of this would be possible if the customer can’t find you. To rope in your customers it’s recommended that instead of going through Amazon, you create your own webpage. Once you create a webpage you should buy a domain name for it unique to the product you’re trying to sell. After that you should get Google AdWords and promote as many relevant keywords as you can for the product you’re trying to sell. If you’re trying to do this without spending a penny then simply sell your product through Amazon and once you generate enough revenue, you can move your platform onto your own website and continue from there.

          I did A LOT of reading before I even thought about starting Dropshipping, but everything became REALLY clear after I read Zach Pinnell’s How You can Make $10,000 a month Dropshipping and How to Start Dropshipping, I highly recommend you read this as soon as possible.

          If you enjoyed this article or found it helpful please give it a 5 star rating and subscribe to The Prime Pick to get e-mail notifications as soon as a new article goes live.

[Investing 101] – How to Start Investing Pt. 1

I’ve been very hesitant to write this post because I know as soon as I write it something’s going to happen and I’m going to want to rewrite this immediately anyways, but I’ll try.  I just wrote down anything I could think of that made sense for an introductory post. I’ll elaborate on and introduce more complex topics in the next part.This is the first article in the How to Start Investing part of the [Investing 101] series. I’m going to just cover the very general stuff and then follow it up with another article soon™.

“How do I start investing?” I get this question a lot on Quora, from my classmates, and (mostly) whenever I ever bring up stocks and investing around people under 25. My answer changes from person to person, but the gist of my answer stays about the same. At its core investing in stocks is pretty simple. You just have to understand a few things and you’ll have a really good chance from the get go to make some money on the side. After that, it’s going to be up to you to put in the time and effort to learn what works best for you.

If you’re looking for a different investing method than the norm, or just want to try something a little different, consider checking out an article I wrote earlier this month: [Investing 101] – How to Pick a Winning Stock 100% of the Time.

  1. What is a stock?
    • A stock is, in essence, a title that you own a percentage of a company.
      • If You’re Interested: Capital One (Ticker: COF) is a great stock to get into right now. It’s a multinational banking conglomerate that is looking to revolutionize banking in the 21st century. Let’s say for example that you own 10,000 shares in Capital One. To find out the percentage of COF you own, you would simply do the following calculation: 10,000(shares you own)/519,070,000(total shares issued by COF) or 1.9265224^e-5%. Your “ownership” in the company is so minuscule that it doesn’t matter at all.
    • The entire purpose of a company is to make money, and once it has IPO’ed (when a company goes public and releases shares to the public) it solely exists to make you money.Where the skill factor for a beginner comes in is when they have to find and wisely invest in corporations that 1). aren’t hemorrhaging money, 2). will report profitable earnings, and 3). aren’t involved in anything shady. Rule 2 is probably the most important rule, but also the hardest to follow. How do you know that a company isn’t going to fall flat on it’s face? Either it’s obvious (i.e. Company X released a new product, or there is a cry public growth catalyst), or chances are you don’t know. For this reason, most beginners choose to invest in tried and true companies such as Apple (Ticker: AAPL), Visa (Ticker: V), Facebook (Ticker: FB), Microsoft (Ticker: MSFT), Google (Tickers: GOOG, GOOGL), Adobe (Ticker: ADBE), Amazon (Ticker: AMZN), Wells Fargo (Ticker: WFC), Bank of America (Ticker: BAC), Coca-Cola (Tickers: KO, CCE), Discover (Ticker: DFS), and many more are stocks. Almost all these companies give a dividend (discussed below), and have survived multiple market failures and recessions and are still enduring.
    • Investing in companies like the above will give you a good feel for how investing  in a stock works. These are low risk stocks that WILL yield good percentage returns.
    • What’s a Dividend?
      • According to Investopedia, a Dividend is:

        A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders.

  2. The 1 Cardinal Rule of the Entire Stock Market:
    • Buy Low, Sell High. This rule seems obvious enough, but people often get dragged into market hype and aren’t looking at a stock critically, or even questioning what growth catalysts are and whether or not the stock has already run up or not. Now I’ve made (almost) all my money off of stocks that have completely run-up, but still have enough juice in them to make money. In years past I’d invest in Netflix every January, and every time all the analysts would saying that it was going to report a bad earnings report and such. It never reports a bad Q4, and I make sure I snag it every January (except this year because the market was just in free fall) – at least for a couple of days. The best way for a newer investor to enter the market isn’t during times where every stock is having a heyday. The chance of buying a stock at an overbought price during bull markets are decently high. Rather, wait to enter the market until it starts going down a little bit. If you can find a stock trading 10% below what it normally trades at, stocks are losing value, and it’s something that’s been through a lot and has a stable business, then it’s almost never a bad bet to get into the market. Stocks devalue below where they should be trading at least twice a year, so it’s always best to gauge your timing and be patient before entering the market your first few times.
  3. Use Public Opinion as a Tool:
    • The day after a terrible act of violence involving guns happens, personal security stocks surge while gun stocks drop like a brick. If you read the article I linked above you would know that this is the best time to buy gun stocks. Like this every stock has a trigger for when it declines on external factors it was not responsible for, and you should try to find that and capitalize on it.
  4. Create a Spreadsheet and Track Your Investments for 6 Months.
    1. If you can track your gains and losses and identify exactly why you made a trade and why the stock went up or down, then you will already be ahead when you invest your actual money into the market. Even if you stick with low risk stocks, or stocks that I mentioned above, this will still be a good exercise, and it will help you raise your investing IQ. I did this everyday for about 2 years as well as maintaining my own Google Finance Portfolio. I recommend you go to How the Market Works and create your own portfolio.

This was just part 1. I wrote this article because people kept asking for it. There’s still a lot left to do, and I know it was pretty disorganized, but I threw in the 3 most important things you need to know, as well as the definition of a stock. If this was helpful please leave a 5 star rating.

[Reader Requested] – How to Profit off of a Recession

This is a follow-up on yesterday’s article about the recession that’s sure to come within the next year or two.

In bear markets people obviously flock to Gold and Bonds – that’s a no brainer after all, but did you ever imagine that you could turn incredible profits by investing in stocks as well?

At some point in time, the powers that be decided to make bull stocks and bear stocks for a lot of markets in the world. Most of Latin America, Europe, Asia, and America is represented pretty well in these stocks. The stocks are called Direxion Daily (Country/Region Name Here) (Bull/Bear) 3x Shares.

If you believe that a country is going up you would buy the Bull shares, and if you think the country is going to spiral down then you would buy the Bear shares. The 3x in front of it indicates that the stock increases and decreases 3 times that of the market it is made to model.

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TNA’s Chart – It’s Been Around Since 2008

In my opinion it’s definitely not smart to bet against a country for an indefinite time period because the way markets are designed, they’re meant to go up over the long term – not collapse into bureaucratic nothingness. For this reason, you have to be smart about when you buy the bear shares, and timing is everything. The bull shares will EVENTUALLY get back to whatever price you paid for it, but it could take years. For example, let’s take a look at China’s Bull and Bear stocks – aptly named the YINN and the YANG.

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The YINN – the Chinese Bull Stock

Direxion Bull stocks are excellent to invest in during uptime’s, but when things go south it takes an awful lot of time for it to recover.

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The YANG – the Chinese Bear Stock

Direxion Bear stocks on the other hand are stocks that you can never recover from if you time it wrong. If you suspect that a market (s) going downhill, it’s almost never a bad idea to buy the Direxion Bear stock. It’s the FASTEST and MOST PROFITABLE way to make money during recessions. If you get in on it even after the initial few days/weeks of turbulence you can easily see profits still.

I mentioned earlier that when times get rough, the rough (and the rich) put all their money into gold and bonds. Why? The dollar is paper, it can lose its value at any time. Stocks are just certifications that prove you “own” a company that could be worth nothing tomorrow, and real estate can go from being a hundred million dollars to hundred thousand dollars faster than you can get an agent out to list it on the market.

Gold, however, lasts. It’s monetary value never fades, it’s sought after by the people with money at all times, and it’s stood the test of time – the notorious Rothschild family, for example, has been known to convert a majority of their assets into gold during trying times, and they’ve managed to make a large amount of their fortune in the later centuries by correctly buying and selling gold.

Rather than buying gold – which buying any substantial quantity of would cost a small fortune – consider buying the gold mining companies. After all, someone needs to keep producing gold or the price would skyrocket, right?

Gold mining companies have long had a soft spot in my investor heart, after all, Goff Corp. (Ticker: GOFF) – a gold mining company that struck gold (literally) by getting a permit to mine in South America, was my first penny stock. It went from a little under 14 cents to 64 cents in something like two weeks. Personally, I laid my entire hand on the table and won, but I don’t recommend anyone ever goes into penny stocks, it’s just too unstable.

Back to the topic of gold miners. The entire sector is having a dream year – just as it should be. After all, we’re coming off the first down year since 2011, and even in 2011 it fell just -.02%. After a year like last year, and the rocky start we had to start 2016, people started getting queasy and put their money in gold mining and gold. Two stocks in particular soared, and will continue to soar: Market Vectors Gold Miners ETF (Ticker: GDX), and Market Vectors Junior Gold Miners ETF (Ticker: GDXJ). It’s already run-up, but if you time it right, there’s no reason that you can’t make even more money. I’ll leave you with the beautiful charts of GDX and GDXJ.

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Market Vectors Gold Miners ETF – GDX

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Market Vectors Junior Gold Miners ETF – GDXJ

In this article I went over 4 ways to make money in a Recession:

  • Direxion 3x Bear Stocks
  • Gold
  • Bonds
  • Gold Miners

If this article answered any of your questions or interested you please leave a like and rate it 5 stars. I really appreciate all the support, thank you so much for 300 e-mail followers already.

Market Correction Incoming? More Like Recession!

I’ve never been as bearish in my life as I have been over the last couple weeks when writing this blog, but the more I look, the scarier it gets for me to take risks as I’m not able to do the same volume of trades as I have in the past. I’ve never been the one to be able to happily put my money in a stock for a month or two and get the money back


History Repeats Itself

This might come as a shocker, but we’re about due for a recession or some sort of market crash anytime now. Before I go on, take a look at this table with the dates of every single recession since The Great Depression. Look at each of the Start dates. They’re each anywhere from 7-9 years apart.

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With the exception of the Recession in ’73, there has been one very predictably every 7-10 years, with an interval of eight years being the most common.

In between these bigger recessions, there are smaller market declines. We have seen several market corrections, between China falling to recession-esque levels, to the American Market correction we had to kick the year off in January and February.

Just like everything else in life, the market gives warning signs before doing anything radical (with the exception of the Flash Crash in 2010, that was almost impossible to predict when it would happen, and whether or not it would happen). Now I’m going to go over to London here and take a look at the FTSE because it’s a FANTASTIC indicator of an impending crash.

To see what I mean, all you have to do is look at the FTSE before the last two big crashes (’99 and ’07), and then you’ll realize how we are potentially in the midst of another recession.

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FTSE peaked for a THIRD time right below 7000 (this time at 6948), and then sharply declined.

But everything’s going great right? I thought we were done with all that recession stuff, the market looks great!

Actually, no. There are two more things to consider here. First of all, a bull market only lasts for 6 years, and that “bull” market has already come to an end. The S&P500 was DOWN 3% last year. Now most people can make more money in down markets than in a bull market, but the fact still remains that the market was down, PERFECTLY correlating with the 6 year bull market (look back on the table I made above and you’ll see that the last recession ended in 2009).

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July 2015 wasn’t kind to any market, but the US certainly got out the Lightest

The other factor is that a recession is defined as two consecutive quarters of negative GDP growth. While American markets don’t look to be going into negative GDP territory anytime soon (although exports have slowed down incredibly and basic rules of mercantilism state that a country should export more than it imports, the US looks like it’ll make it just fine), a quick look across the pond to Europe will tell you that the entire Euro is failing. In fact, almost every other country is doing worse than the FTSE.

After all, how can they not? They have to support hundreds of thousands to millions of refugees from Syria and the rest of the Middle East, whether they want too or not. Political unrest and uncertainty have left the economy in flux in much of Europe. Being separated by two bodies of water certainly helps London, making it a little bit more stable and a better indicator than something like Germany.

If we look over at Asia, the Nikkei (NI225/Japan) is down -12.72% y/y, the Shanghai SE (SHComp/China) is down -32.72%, the Hang Seng (HSI/Hong Kong) is down -23.15%, and Sensex (SENSEX/India) is down -7.36%. I used CNN Charts for this, but here’s a better visual representation (minus China, because the chart got REALLY cluttered) courtesy of Google.Screen Shot 2016-04-23 at 2.11.30 AM.png

If the entire rest of the world is struggling to break even, how much longer can the US sustain this image of everything being alright and a great economy?

After all, markets only truly start crashing when people stop making money, and start selling off or withholding their money. One or two years of slightly negative markets won’t start a recession.

The true recession, in my opinion, started in July 2015, but it’s going to take something else, a negative catalyst of some sorts for American markets to truly feel it, and when it hits, it’ll be nothing short of devastating.

I hope you liked this article. If you did please rate it 5 stars and comment or e-mail me with any questions!

Electronic Arts or Activision – Which Should You Hold Through 2016

I found Activision (Ticker: ATVI ) when it was at around $17. I think I even wrote about it on here when I bought it (Edit: I actually didn’t write about it, looking back at my emails it was bought in September of 2013, I started this sometime in November).

Since then it’s run up to the mid-high $30s and has proved to be quite a profitable stock for just about everyone who’s ever bought it.

I’ve also invested in Electronic Arts (Ticker: EA), and I’ll be the first to tell you, I was on my hands and knees everyday praying that I wouldn’t have to sell for a loss. I had timed it so that I could buy before they announced (through official channels) that they would be making Starwars Battlefront. I had planned to hold the stock until the hype was feverishly high, and then was going to sell it. What ended up happening was, EA crashed because the SIZE of SW:B was too big (16 GB I think). I got lucky and the stock pulled back up, but I would never go into it again.

EA rises and fall’s on a dime, because its flagship games aren’t stable. When I say Flagship, I mean games like NBA 2K, Fifa, and Madden Ultimate Team. As you can see, it’s got the three biggest sports games in the world, but it has no shooters, or anything close to an eSport. That’s where ATVI comes in. Activision’s full name is ActivisionBlizzard, and while they have nice money makers coming in from the Activision side, the Blizzard side of the company is where all the eSports games you hear about on a day-to-day basis, and all the loyal fans come from.

With these game companies, if they can build a good product, and develop a dedicated fan following around it, they can make money and become profitable. Right now, if you want to be successful as a game maker, your company better be churning out a product that can fit the mold of what an eSport game should look like (lots of cash tournaments, organized tournament structure, easy to watch, and interesting to non-players, high levels of skill required, etc.), and is also in a genre that isn’t totally dominated already by companies like ActivisionBlizzard, Valve (company that owns Steam – the world’s biggest game distribution platform as well as developers of two of the biggest eSports currently, DotA 2 and CS:GO), and Riot (creators of League of Legends – the biggest eSport).

While people like to play 2K and Madden for nostalgia and fun, there isn’t much incentive to keep buying $60 games when they release, with little to no reward at the end. Unlike previous generations of gaming, we’re in an era where people expect to have some sort of goal to work towards, and if there isn’t something set in stone, then there is no point. EA doesn’t offer that to its fan base, ATVI does.

Additionally, FPS (First Person Shooters) games and MoBA (Massive Online Battle Arena) games have taken over the gaming industry as a whole. To be successful as a game developer making anything other than that, you need to have a fan base, or an interested group of people looking for games in said genre. Luckily for EA, their main games are sports games, something that no other game dev out there does.

Activision regularly pushes out content for all their games – from Call of Duty (yes they own that multi-billion dollar franchise), to World of Warcraft (the only game analysts of ATVI seem to know on the Blizzard side, trust me, WoW is dead, Blizzard knows it), Blizzard has built up a system where they can easily charge players over $250 a year for micro transaction after micro transaction, and no one every notices.

One of their newer games – Hearthstone, generates over 20 million dollars a month for ATVI according to Polygon. In reality, Hearthstone easily makes at least 50% more than that now. At the time the article was published, Hearthstone had less than 30 million players, now it has over 40 million (and growing). This can only mean that the game, which is relatively cheap to make, has a very small dev team, and is on phones as well as computers, is one of Blizzard’s biggest cash cows.

The incredible success that Hearthstone has seen recently still pales in comparison to how much WoW is making Blizzard ($10-$20 a month per player base subscription fee alone for 6.5 million players), but it’s tremendous success has greatly lead to ATVI running up.

Blizzard has 5 games live currently with one in Open Beta currently. Hearthstone also makes them the least amount of money!

Activision owns Call of Duty, a series in which each game initially retails for $60, and requires AT LEAST another $60 in after-purchase investments to play. The game boasts over 50 MILLION unique players per month. The franchise Activision’s main bread winner. Along with CoD they have other games as well, but this is really the only notable one.

While I’m not a particularly big fan of EA, it does have some pretty solid numbers. I don’t like EA because fundamentally (not fundamentally as in numbers, rather logistically), it just isn’t as good a company as ATVI, and since they both do the same thing in essence (sell games), Activision should be the better company to buy.

While EA may have had a 100 million dollars less in sales/revenue than ATVI, it’s gross margin actually came out ahead – about 120 million dollars ahead. It’s also increased y/y sales by about a billion dollars! Screen Shot 2016-04-21 at 3.18.32 AM

That’s a tremendous increase, and EA has an even more exciting and interesting line-up of games coming this year (genres that ATVI isn’t even going next to yet). Look at ATVI’s numbers real quick:

Screen Shot 2016-04-21 at 3.18.19 AM

Compared to Activision’s y/y growth slowing down and fewer growth catalysts, EA is technically the better stock. I feel like it’d be worth it to buy equal positions in both EA and ATVI heading into the summer time as that’s when the companies REALLY make money.

Wow, this is the second 1000 word article I’ve written in a week, I hope you liked it. Please rate and comment if it was good!

A Secret About Netflix (aka BUY IT)!

It’s been a couple days since I posted my last article, but I’ve been really busy. Still working on the second article in the [Investing 101] series (honestly should’ve been the first one I put out, but oh well).

Thanks for all the support! I’ve gotten a ton of emails from you guys (85 of them according to my gmail search bar), and I honestly sent essay responses back to about 4 of you, and then didn’t respond to anyone else because I have no time. It’s been incredible getting all this support from everyone. When I say everyone, I mean just about every age range from 14 year olds to 44 year olds contacted me. I almost got roped into a, “We love your website so much we’ll give you free domain hosting (for a couple dollars a month of course),” scam which sort of killed the vibe, and I never got back to responding to the emails.

Send them again and I’ll try to get back to you this time.

The 30 for 30 challenge (30 articles in 30 days) just isn’t realistic anymore as Fridays and the weekends are the only time I have any breathing room, and even then I’m putting in like 20+ hours on doing Math just to stay afloat in the class.

I’ll try to get to 20 articles by May 6 (30 days after I started this). Right now I’ve got 7 including this.

Anyways, enough about me, I decided to just drop everything and write an article because it’s been a bit too long. I have articles I start and stop, never to finish, at least two times a day, but Netflix is easy to write about so I’m going to just vomit it out.

Netflix didn’t just beat earnings, it smashed it. It grew in every sector the stock is tracked in, and although growth in America did slow down a little, it didn’t decline. They’ve also reached something of a saturation point in America where fewer and fewer people are going to be able to subscribe to Netflix because they already are subscribed.

International growth was incredible as well, and if Netflix had done even a little better in China, the Netflix bears would have had NOTHING to say against it, even with Amazon offering Amazon Prime (2 day shipping, music streaming, and live-stream shows, along with a host of other amenities) at $8.99 per month if you didn’t want to pay $99 per year for Amazon Prime.

I must say though, Netflix is the only one with Orange is the New Black, How to Make a Murderer, House of Cards, Daredevil, and SO MUCH MORE. Their catalog of original shows itself is VERY impressive and beats out Amazon.

Additionally, here are some highlights from Netflix’s earnings report:

  • Gained more than 600,000 new subscribers (81.5 million up from the expected 80.96 million)
  • Added 4.51 million new international customers.
  • Earnings were also up to $1.8 billion up from $1.67 billion the previous quarter.
  • They’re down based on future expectations of only 2 million new international subscribers because of slowed American growth.

Netflix is down to $94 from $111 on Friday at the close. You have to keep in mind that Amazon timed their announcement perfectly and it was in order to interfere with Netflix’s Earnings Report.

As I said before, Netflix has reached a point close to the carrying capacity of what they’re going to be able to penetrate in the American market. They should be looking for international growth. They’re in 190 countries, Amazon isn’t in even half that many.

Netflix is eyeing China to be a growth catalyst for it. Rumors of Disney (DIS) being in the late stages of a merger with NFLX is also a very large potential announcement. However, if you have to be dependent on a merger announcement to make a profitable stock, it’s not a good stock.

Netflix is valued at close to 50x more than its book value, but if they continue dominating the market, they should have no problem bouncing back. I myself snagged a lot of shares of Netflix today and am waiting for the inevitable bounce back.

Yes, Netflix is going to bounce back to eel over $100, whether that’s in the high to low 70s-80s, or $92, it’s bouncing back, and I intend to profit off of this.

Let’s see what happens now. 🙂

Is Under Armour a steal? Maybe, Maybe Not.

Finally got an early post in so enjoy.

While I’ve had nothing but praise for the better part of two years for Under Armour, I thought that it was time I took a more critical look at Under Armor, and I’m glad that I did.

After taking a second look at Under Armour, I’m not exactly sure that it’s a stock I’m comfortable investing in. I’ve long thought that UA was going to be an incredible stock to buy and hold, but I did something that I’ve rarely done before with most other stocks, and looked into their financials.

Personally, it just didn’t sit well with me that UA opted to release Class C stocks instead of going for a 2-1 Split. This had the effect of diluting the number of UA shares on the market and caused the stock to drop 50% on Friday.

While uninformed Under Armour investors would have panicked, UA didn’t do anything to hurt their investors. The class C shares were distributed to the owners of Under Armour stock. UA calls this a stock dividend.

The problem I have with this is that it basically secures UA’s leadership a job for a long time. It also makes it vulnerable to a hostile take over. If they keep diluting their shares by releasing more and more Class C shares or split their stock 2-1, it will decrease the stock price immensely and allows investors to gobble up large portions of the stock.

Now I’m not scared of Under Armour going through a hostile takeover or anything, all this just made me question what UAs end game was, they must have had something to hide.

Immediately something stood out to me – they’re valued at 30x-32x above where they should be valued. Their stock price isn’t remotely justified by anything other than hype and good performance.

It bets heavily on its athletes. After Jordan Spieth failed to win the Masters, the stock fell over 5.5%. It’s a similar story with all of its other athletes. Under Armour is expected to issue a positive earnings report, but with all the hype around Adidas (Courtesy of your friendly neighborhood Kanye West) and Nike products, there really hasn’t been much room this year for UA to sell anything impressive.

Oh and here’s one more stat that should worry you. Under Armour’s expenses have risen 9% Q/Q, while sales have only risen 2.5%. If costs continue to increase, and sales don’t go up dramatically, things aren’t going to look good. Nike has managed to successfully cut costs by over 6% and sales have gone up. Similar story with Adidas. With such stiff competition unless Under Armour sees some radical changes I just don’t think the stock is worth it.

I’ll make another post if my stance on UA changes.

Amazon’s the BEST Investment You Could Ever Make

I finally got my MacBook back, more articles coming now. So I know what I want to write about for the next twenty something days, but I just can’t find the time to do it, so here’s another late night article.

Let’s talk about the one investment you could make to take you into retirement. I think, wait scratch that, I KNOW, that it’s Amazon.

Wait, Amazon? They run razor thin margins, you don’t know what you’re talking about. They have competition everywhere, and once again, they barely make a profit.

The numbers you’ve heard about Amazon for years now only encompasses less than one half of their business. The other half of Amazon (and one of the MOST PROFITABLE products in the world used by just about everything on the internet) is called Amazon Web Services or A.W.S.

A.W.S. single handedly makes Amazon one of the best stocks to buy this decade. And then you find out that Amazon has spent over $7 billion in buying out their competitors for A.W.S. and you start seeing Jeff Bezos’ (the GENIUS CEO of Amazon) end game.

Bezos has spent billions of dollars (Amazon’s as well as his own) on R&D of everything from the utilization of drones to deliver packages to self driving cars and self landing rockets. He is truly an Elon Musk type CEO and knows exactly what to do to get the new “must have” before everyone else.

So when Amazon expanded into brand new fields, it was clear that they were expanding their target audience from just people looking to shop on their site to everyone possible. They offer a MUCH CHEAPER Netflix video streaming program, which is paired with free 2 Day Express shipping on any of the items bought from Amazon for $99/year, have expanded into Virtual Reality, sports, online gaming, drones, robotics, self driving cars, everything in between, and now finally, the internet itself.

A.W.S. is revolutionary because Amazon offers a host of programs and amenities that most other cloud based and website hosting companies do not. It’s so good and such a genius idea, and Bezos and his team at Amazon has capitalized on it. If they spun off A.W.S. into its own company, it would easily have a market cap of $150 billion (half of Amazon’s $300 billion market cap), and would only grow because it wouldn’t be bogged down by the retail side of Amazon.

I’m clearly not doing it justice by not explaining its game changing capabilities and how it is revolutionizing the internet, but just leave with this, Amazon will be that one stock five years from now that you wish you’d bought even at this high price.

Amazon is at $620 right now. Over the last 5 years the stock had increased about $80 y/y, but last year it broke out to close to $300 in profits, and you can only expect it to go up, or at least maintain the same level of performance, because most of the growth was generated by A.W.S.