I'm a buyer at this point. We'll see how earnings turn out tomorrow, but no matter how bad the macro environment, I think $COIN at 7 P/E is a good buy long-term.
I will not check what it is because I have no intention in investing in coinbase, but from experience from other companies these sharp profits coming from taxes are usually reversals of valuation allowances for tax loss carryforwards. They are non-cash items that do not have much to do with the current operation of the business.
So if you really want to do P/E investing and are using real money, I highly recommend you learn some financial accounting and learn to remove these one time accounting charges/incomes that do not really have much to do with the company's operation.
Furthermore, as it comes to coinbase, I should point out that their source of revenues is highly uncertain, and dependent on uncertain trading of exotic assets. When people talk about P/E there is an unspoken assumption of some business continuity. I am not sure this is present with coinbase, but you may believe differently.
Also this is the chart you've mentioned about the negative tax provision.
https://finance.yahoo.com/quote/COIN/financials?p=COIN
Click on the quarterly link to see the -700M tax provision.
I was saying this 6 months ago on Twitter and was saying it here https://news.ycombinator.com/item?id=29787420
In hindsight stock performance was the biggest advantage they had over competitors, now they have to compete with companies with bigger catalogs and more cash flow (e.g. disney parks)
Netflix was not as aggressive as they needed to be in locking down must-see brands to 1) keep subscribers or 2) better negotiate with the content players.
No point getting into a Netflix original, it won't make it to s02
Admittedly this list includes shows that have ended in addition to those that were cancelled. Those will mostly have more than one season. Pinch of salt.
src: https://en.wikipedia.org/wiki/List_of_ended_Netflix_original...
A credit firm whose customer base is primarily folks who have to finance their small ticket item purchases in order to afford them is going to have a tough time in a rising interest rate environment. Their margins will compress as their cost of capital rises, and their default rate will rise as their borrowers slowly approach insolvency in a recessionary environment. I would be cautious about investing in anyone who is lending to borrowers who don't have sterling credit and/or strong balance sheets and durable cashflows this late in the cycle.
These are 4 week loans, exposure to any given customer is small. And in a recession demand for these loans will increase.
> 43% of Gen Z users have missed at least one payment, according to a survey by the polling site Piplsay. Of Gen Z consumers who used a point-of-sale loan for something they needed, 30% missed at least two payments, according to a survey by Credit Karma.
https://helpcenter.affirm.com/s/article/term-lengths
https://investors.affirm.com/news-releases/news-release-deta...
https://www.sfgate.com/news/article/influencers-lead-Gen-Z-i...
Am I stupid? Or is the world stupid?
But if you have the Peloton Tread treadmill, it's even worse, you literally can't use it without a subscription due to a new "safety feature".
It seems strange to me, but people do this with random online fitness classes, so it's not unheard of.
At this point, returns and people just burning/destroying their Pelotons are the only risk.
In addition two things made me think about it:
- The kind of people who buy pelotons are usually not the people who worry about that amount of monthly charge and may keep it aspirationally
- The new game they put out (kind of guitar hero-y) actually doesn't look half bad, and the product itself is quite polished.
- In addition to buying the bike, people often buy one or two pairs of clip in cycling shoes -- Peloton could actually start becoming a go to for riding gear and have quite the audience to sell to from day one.
Anxious to read their recent earnings report tomorrow.
That's why I went with a Keiser bike instead of Peloton, it was the same price for the bike, but no subscription needed, and I can easily use it with any spinning app. Plus I didn't like having a big expensive display on the bike, the Keiser has a simple 4 line LCD display.
I like the Peloton instructors, so I subscribe to the Peloton service, but I only pay $13/month for it (which makes the $40/mo they charge to Peloton bike owners seem like even more of a ripoff). I track my workouts with my watch, so if they raise the price too much, I'm not tied at all to Peloton and I'll just switch to another service.
I think you’re more of a power user (and willing to tolerate set up pain) than most of the customer base would be, but how easily you’ve found a solution and competitor that works well with your method has been eye opening
I think this is a very limited market that may be getting close to saturation. Most people don’t want to spend $40 a month to own a bike
A bit more of my very basic reasoning was that at current prices the company was being as if it hadn't shown progress at all in the last ~2 years. They have at least sold units, added subscribers, and that's gotta be worth something even if a bunch of it is pulled forward.
Actually for a SaaS service (we'll leave aside whether it's worth it or not :), this is one of the best things that could happen right? If possible you want that LTV to be pulled forward so you can try to reinvest it in the business or make moves earlier rather than later?
I did sell my crypto, which would've been a better story if I had more than $1000 of it.
Thus, transactions will continue to trend down and $COIN will suffer.
what's your time horizon exactly?
also there may be a steeper discount tomorrow, when the forward estimates in the conference call talk about how something related to the macroeconomic environment and declining volumes and empty NFT marketplace, but who knows
its just that its not always about the earnings themselves
That is an actual possibility.
But that was the biggest rally in a very long time, 3% on broad indices, only to erase all gains and continue lower
Somebody created exit liquidity
Any theory or hypothesis that has zero criteria for being proven wrong is not science and has no place being repeated at all
So you’re not wrong about it not contradicting, because nothing does since its a bullshit saying masquarading as a hypothesis, there’s just no point in leaning on it
Any other things that look like good buys under the market crush?
Bet on the long-term for the segment and their position. Their operating condition is sound and they have plenty of cash. Future returns were pulled forward during the pandemic era for things like remoting xyz (eg Zoom is suffering from that beating now as well). Let the bearishness rip these stocks up (a hard swing back from the insane bullishness previously, which is typical of speculators), take advantage of the stupidity that will abound in the selling down (exactly as it did on the way up).
This is when you start looking at buying opportunities, to generate the returns later (even if it takes years). You take advantage of the big runs to sell to the fools chasing stocks like Teladoc at 6x-7x the present valuation. Buy sound companies with good growth horizons, bet longer-term in your calculating, buy cheaply enough to have a great moat / margin of safety. Rinse and repeat over time. It's all about taking advantage of the rampant irrationality, either direction.
Just don't make the mistake of significantly overpaying and the odds are tilted that much more in your favor.
They've got a strong team, strong products, and a lot of users. I think they're in a great position to start making tons of cash if so inclined...
I don't know if edge computing really has the advantage Cloudflare wants it to have though; it reminds me of open source projects with a lot of mirrors thinking you'll carefully pick the one in the city nearest you, as if anyone even notices.
Every company claims to be worldwide, but when their site is down, they tend not to care so much if you just start nuking traffic from random foreign areas to come back up.
Not sure if Cloudflare does this today, but the potential is there.
If you can predict a range for the future earnings and discount them and if it is underpriced , do buy :) .
And the best legal way to do that is to be a customer or prospective customer and observe that there are no other ways to accomplish what you want to.
There're a number of beaten-down tech companies that IMHO would pass that test: NET and COIN are two of them, ZOOM, probably SHOP as well (the small businesses I know on them swear by them). I'd stay away from Affirm, Peloton, Netflix and Roblox, though - those are the ones where, as a customer, I just don't get much value out of them and could easily go elsewhere.
For the last few months my monthly contribution gets swallowed up by the losses and the balance hasn’t moved lol
The broad index will, most likely, be positively skewed and still be around in 20 years. DCA makes a lot of sense.
The single stock may just go bankrupt, or become smaller and never recover (think Kodak or Nokia). DCA does not make as much sense.