Netflix Kicks Off Earnings Season & Hot Sauce Hysteria, Ep. #213

Welcome to the Capitalist Investor podcast, where hot takes on markets meet the heat of hot sauce! In this episode, we are "Spicing Up Finances," your favorite financial aficionados Derek, Tony, and Luke dive into a fiery discussion that blends their love for hot sauce with the latest investment trends. They'll ignite your curiosity with the "Magnificent Seven" stocks driving the S&P’s gains, debate the impact of Netflix's multi-billion-dollar wrestling deal, and analyze Tesla’s potential shake-up during earnings season. The trio even tackles the heavyweight topic of streamlining the tax code. Between financial insights and foodie delights, including Luke's sarcastic allegiance to Taco Bell's Diablo sauce, this episode has all the ingredients for an entertaining and educational listen. Stay tuned for invigorating debates, laugh-out-loud moments, and all the investment tips you need, served up with an extra kick.

1. Netflix's Power Move with WWE Content

The streaming giant Netflix has inked a groundbreaking $5 billion, ten-year deal to air WWE's Monday Night Raw. The hosts weighed in on the strategic move for Netflix, considering the potential to draw massive viewership and bolster subscription numbers. The discussion highlighted how this could change the landscape for Netflix and the implications for competitors in the streaming war.

2. The Buzz Around Big Tech Stocks

During the episode, significant attention was given to the performance of the technology sector, with a particular focus on the "Magnificent Seven" stocks (Facebook, Apple, Amazon, Netflix, Nvidia, and Google) and the consideration of adding Microsoft to this elite group. The hosts articulated how these tech giants drive market gains, a critical point of analysis for investors.

3. Tax Code Complexity and Wealth Strategies

Derek, Tony, and Luke delved into the complicated nature of the U.S. tax code, touching upon the strategies employed by the wealthy to minimize their tax bills. They suggested the idea of a more simple tax system, such as a flat tax, and elaborated on the challenges taxpayers face under the current structure.

4. Cryptocurrency: Bitcoin's Market Influence and Security Concerns

Bitcoin's performance and its effects on the market were subjects of rigorous discussion. Luke shared a bullish outlook on Bitcoin's long-term value, particularly if ETF approval occurs. However, Tony and Luke also highlighted concerns about the cryptocurrency's security, including the risk of hacking and the unease with online platforms that store digital assets.

5. Hot Sauce Hysteria

A lighthearted yet passionate conversation emerged over hot sauces and brand favorites like Tabasco, Frank's Red Hot, and Taco Bell's Diablo sauce. Luke's social media photo, amalgamating hot sauce with finance, sparked talks about marketing and personal branding strategies. The discussion tied into broader deliberations on consumer loyalty and the food industry's impact on culture.

Disclaimer: The content discussed on the podcast is for informational purposes only and should not be taken as financial advice. Please consult with a financial advisor before making any investment decisions.

#CapitalistInvestor #Investing #FinancePodcast #HotSauce #StockMarket #Netflix #Bitcoin #TaxStrategy #StreamingServices #RemoteWork #FAANG #S&P500 #Tesla #WWEonNetflix #HotSauceFinance

Transcript

0:01

Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands d. We got the dream team back again. Tony the tiger. Cool hands, Luke. What's going on, guys? Living a dream. Living the dream. That's what I say every morning. I come in and I fist bump two people today. Like, how you doing, Luke? Living the dream. I mean, last week it was zero degrees in Cleveland, and this week and today it's going to be high of 50. Yes, it's a wild time. It's wild times out here. Global warming is great. Yeah, my kids were home Monday, Wednesday, Friday last week, and then yesterday for a fun ice day. Apparently too icy to drive on the roads and pick up the kids. So that's what we've been dealing with. You're always so icy, so fresh. Yes, exactly. But more importantly, I haven't even asked you guys offline. How was the big dinner? Last. Was. It was great. But one of the other, I think Luke and I got. We did not put the herd on. Like, we just didn't order enough expensive things. Really jack that bill up. We were just trying to be nice guys. I don't know. A bottle of wine showed up and another bottle, I'm like, I don't want to drink wine. Why is this wine here? I'm looking couple whiskey Manhattan's. I had the couple of bottles of wine that came. We're like, this has to be pretty expensive. We had a couple of wagoo steaks. I wanted to get it to be kind of expensive. The check came. We're like, wow, this is like half of what it was two years ago. It's what it feels like. And we had an extra person. Yeah. And we had an extra. Just somebody ran the narrative, and it was not Luke nor myself. We'll get it next. You know? And I assume that maybe Nate won't lose, so he'll run the top end narrative like, all right, let's make this dude pay because he'll walk around for a couple of weeks. Oh, Tony's off to bad start this year because of Boeing. Maybe Tony's going to take the l this year. Who knows? I guess a tire fell off. Tony. I guess a tire fell off now, like the other day of another jet and. Jesus, man. But here's the thing. Think about this. When the best time to invest in a company is when you feel like, oh, my God, I'm not catching that falling knife. And this might be the time to do it, but, man, there's a lot of it's. Just such a big company that it's going to take a little while to let this flush out. Spirit, though. Davy day trader Dave Portnoy, I don't know if you've heard about that, but he's been pumping spirit. Is he back to pumping his day trading stocks? He got his hammer and stuff. He's back gambling. Good for him. All right, let's talk about, we got earnings season kicking off. Netflix actually reported today. Tomorrow everyone will hear this show and it'll be a day late, but we'll be talking about Netflix and what's going on. And next week is going to be the big week for earnings. All the big boys, all the tech big boys, I should say, report by next week. We'll talk about everyone's favorite topic, bitcoin. And then we're going to talk about the stay at home people that want to stay at home and work and how they're about to feel the crunch. So we'll hit that. And then we have a nice little bonus, little bonus topic at the end, and we'll keep everyone in suspense for that. So earnings, Netflix, I guess they mashed with their subscriptions, their revenues. They just overperformed on everything in this quarterly call. They also raised their lowest minimum tier to like $12 a month. Right. I think that's very reflective of the overall situation of the economy to where companies now know they're not scared that consumers are going to stop spending money. So they're comfortable. This is where you got to bring back inflation back into the question. They're comfortable raising prices on their consumers because they know their consumers aren't going to cut back. Aren't going to cut back. So I think that's very reflective of what you're going to see. Basically all earnings season. Netflix critical mission or a mission critical software. Are you going to cut that at your home? I've been watching a lot of Netflix recently, actually. I have, too. Really? Yeah. I got Hulu. I'm enjoying it. I feel like I'm not missing cable because I'm not sitting there for hours and hours and hours. I just need something to watch. And it's typically like sports and wrestling and other kind of weird stuff. Have you checked out only murderers in the building that's on Hulu? No. It's an excellent show. God, I just check that out. I don't watch shows. It's a 30 minutes. It's a comedy. It's good. It's a comedy about murders. Yes. All right, then I'll ring you up after the show to figure out. What's it called again? Only murders in the building. Only murders. It's with Steve Martin and Martin Short. The three amigos. Yes. Two of the three. Two of the three amigos. And Selena Gomez. Something for the kids. She's back. I thought she was like gone. She's back. It was a very popular show. Watched it. Check this out. So Netflix, after their earnings, is up 10% walking into Wednesday morning because of all the great news. And here's an interesting thing with Netflix. So remember Fang when Fang was hot? And that was Facebook, Apple, Amazon, Netflix and Google. The Magnificent seven did not include Netflix last year. So are we bringing back the band? Because Tesla's on the out right now. So the Magnificent seven has turned into the six for this year. And the reason I say that is market. The SP is up 2% year to date. So we're off to a good start. 89% of that gain is from the Magnificent seven. And now Netflix, I would say Fang is back, but here's what it is. Facebook, Apple, Amazon. Netflix. Nvidia. Nvidia, Google. So it's Faanng. Yeah, that's the new fang. That's the new Fang. Right? Because Microsoft. Where's the M Fang? Fang. Where Microsoft needs to be part of that. Nah, I'm just kidding. It doesn't work with the acronym. Fang among. We'll think of something. We'll works out that. All right, but Netflix, we wanted to transition into this. I don't know, guilty pleasure watching some fake wrestling. Some wrestling. Some wrestling. Royal rumbles. This mean. So when Vince McMahon sold the company, what, maybe six within the last year? I don't know exactly when he sold it, but he sold the whole company, made billions of dollars. And now you have this big PE firm running the wrestling and they're doing a little bit more marketing and now they added the rock, Dwayne Johnson, to their board of directors. A smart move. I mean, that dude is just like probably the best wrestler up there with Hulk Hogan, I would imagine. Has he trumped? I mean, depends on what era you're watching and how you really feel. Yeah, it depends on who you're talking to. Normal people know wrestling fans online, but the rock is, he's the most popular. I'm not going to go down the wrestling history, but he didn't really wrestle that long because he went to Hollywood and he's going back and forth there for a while, but he made it into mainstream and then took his movie career. He was an a lister there for a while. He didn't say no to any of the movie scripts, and they started going downhill. But there was a period there where he could save your movie franchise. Didn't he dress up as a fairy. Or a princess or something in the tooth fairy? I think that was like his first film, his first feature film. You got to get your feet wet somewhere. But, yeah, it's TKO sports, and it's basically the WWE and MMA together. So that was the deal. And then yesterday it was announced that Netflix is going to get into live, quote unquote, sports. They're going to air Monday night Raw on Netflix starting next year in a $5 billion deal, which is crazy to think about. It's a lot of money. Yeah. For how long? Ten years? 500 mill a year. But wrestling is not a sport. But it's entertainment, and that's fine. But it'd be interesting how many people are going to switch over. I don't know if I'm going to just get Netflix to watch wrestling. Your son will. I don't see myself doing, but. Well, this is where the growth initiatives have to happen. Companies, you have to think of new things to bring to the table to get investors and shareholders happy. Right? So it's like when you have streaming, you kind of have old shows streaming, then you kind of are making new shows. It's like, what's the next thing besides just making your own shows? Is it live entertainment, sports, is it live? Whatever. Is it something else? These are questions that Netflix will continue to have to answer. If it wanted to remain this top. Mean, you would imagine Netflix did the math, like, how many WWE fans already have Netflix and how many don't? So by doing this, how many people are we going to attract that aren't Netflix subscription holders? But at the end of the day, I feel that Netflix really turned the corner. When they crack down on that login sharing, no wonder their subscriptions are up because you can't get people to log in. I mean, that's just like technology 101, right? And marketing and all that. Thank God they clean that up. But why wasn't that part of the launch? I don't know. Because you're getting people addicted first. That's the whole company mentality. You get everyone addicted. You don't really worry about the revenue side and sharing passwords. And then when everyone's addicted, you take it away and they're like, well, I'll sign up anyway. And what's it cost? $12 a month? Yeah. What's $12 a month? Mine is days I don't have the $12.01. Mine's 24, I think. Okay. But, yeah, that's what I'm down. So I'm down to Netflix and the Disney bundle, which has Hulu in it, not the live. And then my live tv right now is YouTube tv, and I only had that because I bought the Sunday ticket or whatever. When you parlay all those three together, like, how much are you spending? Yeah, so it's about $100. Okay. I mean, that's what I'm paying for Hulu, but I get everything I think I want. I still try to password share, but there we go. All right, so the new fang is minus. Tesla is on the outs right now. We'll see. I think they're lowering prices, trying to move units, and cars are freezing in the middle of the winter. So I don't know. We'll see what happens with Tesla. I think they're reporting soon and we'll. Hear all about earnings season. It's here. So let's see how this happens. But I think, like I said, netflix is a telltale story of how this is going to go this quarter. If you're hurting, if you don't think that your revenues are down, then just raise prices. If your profitability is down, raise prices. People will spend on the credit cards and everyone knows it. Yeah. Great. Any other things on that topic? I don't think so. All right, let's talk about bitcoin. I think we were right, too. I mean, we know, but we'll keep it short. But I think we nailed it. I think we don't nail much stuff on this show, but, man, we nailed this one. It's going up and it's going to sell the news. And exactly what happened when they came out with the ETF. That thing's down, I don't know, 20%. Yeah, at least 20%. It's down at least 20% since the etfs are now active. So what I wanted to talk about. So there's been a lot of discussion about bitcoin being like the new gold. So like digital gold, like a flight to safety. You can't have a flight to safety investment asset that can drop 20% in a week. You just can't have it. So what do you guys think of now that people can buy into bitcoin, even though they're not really doing it in the proper way through an ETF? People have been selling off on that news, basically. Do you think bitcoin long term is going to be a flight to safety, or do you think it's going to be more of a speculative asset. I was at a cigar lounge this past weekend. Here we go. Keep it on the rails. My dad and my brother, we walked in the cigar lounge down in Canton and there was no private room in there. We thought that it was going to be kind of more secluded, like we all be able to have a nice discussion. It was right during the football games, and we couldn't talk quietly. There was a whole room, like 25, 30 people were trying to be quiet, talking about the world, talking about politics, talking about my dad's investments, which he owns some bitcoin. We're talking about bitcoin. And everyone started eyeing me when I started talking about bitcoin. My thoughts, and I truly think that this ETF approval is going to be a very bullish thing for bitcoin in the long term, because every asset allocator out there, every money manager, including probably us, at some point for some of our clients, will allocate a very small percentage, maybe 1%, maybe 2%, whatever it be, to their portfolio. So you have every institutional manager out there allocating one or 2% to this ETF when there's only a limited supply of bitcoin out there, and most people that hold bitcoin are holding it for the 500,000, a million dollars. Anyway, that's going to drive bitcoin up a lot over the long term. So I don't really don't care about the price action the past couple of weeks. And at some point down the road when there's economic turmoil, we saw it back in March in Silicon Valley bank when that started collapsing, bitcoin rose. It's not even economic. It's more like financial crisis. Whenever there's another financial cris, bitcoin is going to absolutely rocket. There has not been a financial cris since bitcoin has been around. Besides, you can call Covid maybe right when the stimulus and bitcoin rocked during then it went from like 13 to 20 to 60,000 during COVID Right, right. So I think that bitcoin is a great long term hold for a small portion of your portfolio. The only way it gets absolutely knocked is if America says fu bitcoin, right? We create our own digital currency or something along those lines. But that's how I feel about it. So speculative asset then still? Yeah, absolutely. Because the pros are what Luke and I just talked about. The con is that the government shuts it down or whatever, but it would just be the american government. You can still trade it outside the United States. It's just here. But that's probably a large percentage of bitcoin holders, I'd imagine. Well, it's going to become the same thing it was back in 2010 eleven when it was created. Like, it's a black market. No one knew about it type stuff, if that ever happened. But because there's no liquidity, an american market wouldn't support it. It would not be worth owning at that point. Yeah. The only other thing that I'll mention on this topic, because I did talk to one of my clients who owns actual coins, more of a safety thing. So if you're going to, you can buy it through an ETF, but he actually owns the coins. And so he and I had a good discussion about safety of the coins. So, like, getting a ledger, things like that. So there's a whole nother topic of owning it's one thing, and then getting hacked and watching your digital currency flutter away. And then when they do, they already have 20 different accounts set up and the trail will go cold very quick. The money will move so quickly through all these different wallets. And so I'm like, you got to go get a ledger and something to just store those. It's like a digital thumb drive. I wouldn't trust either. Wherever you hold bitcoin online, I wouldn't trust whoever holds your bitcoin that you own to hold your bitcoin safely. What if there's some breakthrough russian hacker that comes through and steals all? How many people are trying to hack into coinbase on a day to day basis? Because I'm sure that's where most people buy their bitcoin, at least for if I were too. And they say they have like 99% cold storage, too. But you don't know who I wouldn't trust somebody with, especially if you have a decent portion. I mean, heck, if you have a million dollar portfolio and you have 5%, it's 50 grand in bitcoin that you have on coinbase or something like that. That's a lot of money. There's another con. Like, how secure is it? It's digital. At least with gold, you can actually buy the bar and put in your basement. Right? And then when the world crashes, you can go, like, take your bar and cut a little piece off and trade it for some pigs and corn through the old barter system. Yeah, like, cut it off a little saw. I mean, that's my question. When the Zombie apocalypse comes, how are you going to spend your bitcoin? Golden bullets. That's what you're going to need a zombie copoly? I've watched the walking dead. I know what's coming. I've been playing resident evil, too, on that. All right, moving on. Stay at home workers. I found this pretty interesting, actually. I never really thought about it. So, basically, long story short, remote workers, I think, are more likely than just the part time stay at home. So, specifically, if you're living in Ohio, but you're working for a company in California working remote the whole time, there could be a potential gotcha. Yeah, I call it the gotcha section. I have some other words behind it, but I'll just say we got you. Basically, if you're living one place for a company in a different municipality, you can face the double taxation from at least the local portion of it. If not just to say, my company is based in Cleveland, Ohio, and I live in Akron. That's what we're talking about. Or, man, maybe my company's in New York and I live in Ohio and I'm working from home. They're figuring out the layers of tax to make sure that everyone's getting paid. Most importantly, the IRS. Uncle Sam is the best business out. Like, somebody brought it to my attention again. It's like, how many times can you get, like, you make your paycheck, then you get taxed, and then what falls to your checking account is yours. But then when you go out and buy, you get to pay sales tax. The double taxation is bananas, dude. Yeah, it's the same thing. It's like, what's the law if you travel a lot for work and you have different office locations? It's the same thing. If you make money in different states, there's potential for you to get double tax. That's why athletes are athletes. Like, if they play a game in Washington, they live in New York. Like, this is why the tax code is so complicated. And it's like they're hiring all these IRS agents. Well, why don't they just make the tax code more simplistic in some ways so that we can actually understand the tax code? We don't get double taxed, and everyone's treated fairly for the most. I just. I don't understand. We make the tax code more complicated. We use more of our money to then hire more IRS agents, which becomes even more efficient. We live in a world job creation. If we make it more complicated, we just need more people to run it to switch to some type of flat tax. Like, hey, everyone pays 20%. Man, that would really jam up. A lot of tax strategies are in place right now, it would jam up some of the low income earners. Now they would be paying more tax. The rich would maybe pay less tax. Some already pay low tax because of the complexity that they have figured out and mastered on how to keep their taxes low. I always said this, if you make, I don't know, I'm just going to throw out numbers. These aren't exact, right? If you make over a million dollars a year taxable income, there's a lot of ways you can start doing a lot of very unique strategies to really lower your tax burden over the long term. Right. If you make less than 100 grand a year, usually you're not paying much in taxes anyway because you have high standard deduction. You have all these other kind of things, right? Really, the people that get paid the most amount of tax and that gets screwed the most are the people making somewhere between that 150 to a million dollar range. Anyone in between there, it's like the true middle class. It pays the most amount of tax. It's so complicated. I mean, Chappelle had told a joke, stand up joke, and I just giggle every time I hear it. When Hillary and Trump were debating, and Hillary goes, pay your taxes. And he goes, why don't you pay your taxes? Trump goes, because I'm smart. I have figured out the tax code to help me in my situation. 7000 tax advisors. And Trump goes to Hillary, you have the power to change it, but that messes with all your donors and people that support you to be a congresswoman and all this. The, the web is too spun and thick and wide and everything that. Good luck blowing up our tax code. You'd have to do it over decades to unwind some of it. It's like college football. You just need to start over. You just got to start over, man. Yeah. Or the Browns just got to blow. It up and got to blow it up. Joe Flacco, stay in the Browns? I don't know. I think he would be great for the long term. Everyone wants him to stay now. It's going to be like, well, how much do you want? And can we fit him in the thing? But we had a great season. Like, for example, Najoku is going to the Pro bowl, but yet we fired the tight ends coach, we fired the running backs, we fired all these coaches. Why? Again? Just blow it up. Why not blow it up? Blow it up. All right, I digress. All right, let's final section. Give me that bonus. Yeah, bonus section. Today, the 22nd, was national hot sauce day. So Mark and I talked about this a long time ago, so I thought we'd bring it back because it's obviously. They were making fun of me. What's wrong? Came in here. You guys were making fun of me. Yeah. I'm like, we're talking about hot sauce today. And I'm like, I got. How are we making fun of was. I posted a picture of hot sauce on my instagram because it was, like, high yield hot sauce. And you guys were, like, making fun of me for posting. I gave you a like, and I said, did you get that from Nate? And you said, yes. If you call that making fun, you know what? Then I'm a bully. All right, well, Luke's feelings aside, let's go, Chris. Chris, our engineer, like, he's sitting there. He's, like, crying. Oh, yeah. Could have a hot mic moment there. Come back and get you. So, favorite hot sauces. Surprising to me. Number one, Frank's red hot by a wide marching. There's nothing else to make buffalo chicken dip with other than Frank's hot sauce. Yeah. And, man, what a creation. What a discovery. Because it always existed. Just no one ever thought about it. But what a great discovery. Buffalo chicken dip. It really is. It's such a staple at many parties. I love it. This is my wife's go to. She loves them. I was a crowd pleaser. Make it on a random week, and then I mix in. I eat them with veggies, like carrots and celery. Oh, yeah. Get rid of the chip part. Tasty treat tasties. Tasty treat chalula. I don't cook anything. And Tabasco. Number three. And sriracha all the way down to number eight. Now, I believe this is just from an Instacart delivery tally. So it's not like a nationwide survey or anything like that. But what I also found interesting is, know, probably thanks a lot to Tony. It is probably the biggest Frank's red hot state out there. Really? Yeah. There's not too many people in Ohio that don't enjoy hot food for some reason. I don't know what it is. Because we need to feel something. We don't feel anything in Ohio. Every day is the same. We need to need to feel burning in our mouth to feel. So. All right, so we're talking about hot sauces. Here's my hot take. And everyone should enjoy this because I'm a big fan. It's not necessarily hot sauce, but, man, the Diablo sauce at Taco Bell is so good. I buy it in the bottle, but you can't find it in the store. So you just get it on Amazon. They'll deliver it, whatever. But, man, that's some good stuff. So I've never had that is. It's. I'll have to check that out. It's money. I would know because I do keep taco Bell in business. I think I'm one of the highest account holders, like, point holders out there. Every Tuesday,

there's a Tuesday drop at 05: 26:54

00 p.m. You can get, like, swag, like swirt shirts and stuff. Or like, they have the cinnamon toast crunch. They have the cinnamon twist crunch. They're, like, giving out limited edition

cereal. Anyway, I do that every 05: 27:04

00 p.m. So talk about the Diablo sauce while we're talking about that real quick. It's, like, not hot. It's, like, spicy. There's a difference. So hot lingers, like, in your mouth, and it's like your mouth is on fire. To me, diablo sauce is, like, spicy to where it gives you, like, a kick of just spice down your lingering hot. So I had a debate with somebody else about hot cocktail sauce, and st. Elmo's has, like, a fire, like, cocktail sauce that will clean out your sinuses, man. And I was the first person in this, and my face was instantly like, tony, how's that hot sauce? And I'm like, I'd suggest no one else eat that. And yet a couple of guys went into it, and they're like, wow, that is the hottest thing you can buy. But there's that kind of hot, the diablo sauces. Now that I kind of think about it, I agree with that. That's why it's not going to open up my sinuses. It's just a burning hot, like, spicy sauce. This is why I have vasid reflux, though, because I know this stuff too well. I eat too much spicy stuff. I will say sriracha is probably my favorite. I put that on a lot of things. And derek, and every time, just so the viewers know, my office is right next to derek. And the whole office smells every single day because the vinegar smell of his hot sauce, he puts on his eggs, tabasco, and it makes me so hungry every time. Tabasco is the best, man. I put it on everything. All right. But I hope everyone enjoyed national hot sauce day. And you can give me my. Or if anyone wants to know, I had some high yield hot sauce picture I posted, because it goes finance and hot sauce combined. There's nothing better than hot sauce and finance combined. Yep. Check that out on luke's ex account instagram. Instagram. All right, take us home. D all right, well, thanks, everyone, for listening. Enjoy the show this week. If you have any questions, comments, show ideas, hit us up at info@swpconnect.com and we'll talk to you next week. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs. He said instead of what did you say? No, he was joking. He said, you, can't have my eagle rare, but you can have my hot sauce. So I walked in there, I'm like, you have hot sauce just chilling there. He's like, yeah, I'm not going to eat it. He's like, do you want it? And I'm like, no, I'm good. Are you sure? I'm like, I'll take it. Why not? And now we're talking about hot sauce. High yield hot sauce.