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Market Scorecard
US markets fell again yesterday, after another late-day reversal, amid wobbly earnings announcements. The Nasdaq fell more than 3% from its intra-day high, and is now nearly down 12% from its November high. Ouch! Bargain hunters, you're up.
In company news, Netflix reported fourth-quarter earnings after the bell, showing that the streaming giant beat on both revenues and profits, however, the share price plunged in after-hours trade on a muted subscriber outlook. The company said it expects to add 2.5 million new subscribers in the first quarter of 2022, which is less than the 3.98 million it added in the first quarter last year. As you know, we love this company. We will hold!
Here is the bottom line: the JSE All-share closed up 0.07%, the S&P 500 lost 1.10%, and the Nasdaq dropped 1.30%.
Our 10c Worth
One Thing, From Paul
Fridays are for my deeper thoughts and life advice. People seem to like these observations, so here goes. I read recently about the difference between "normal problems" and "real problems".
Normal problems are the usual difficulties in life Things like sub-optimal jobs, poor matric results, annoying politicians, bad boyfriends, being overweight, inclement weather or money shortages. These are mostly solvable, unimportant in the long run, or actually tolerable after a while.
Real problems are when things go wrong in a more fundamental fashion. For example, when people are chronically depressed, get cancer, become addicted to drugs or booze, smash their bodies apart in a car crash, their spouse walks out, their businesses fail or their children die.
As blogger Erik Hoel says, "people can manage an almost infinite number of normal problems provided they don't have any real ones. Humans are paper tigers; the tiniest rip reveals our frailty".
There's an element of luck at work here. Real problems can come out of the left field. It doesn't matter how hard you have worked, or how virtuous you have been, if you have a big bike accident, a brain aneurysm or the death of a close one, you are in deep trouble.
However, there is no doubt in my mind that if you are financially stable, a hard worker, a regular exerciser and a good person, you will encounter fewer "real problems" in life. And if, or perhaps when you do, you'll have the resources to box on better? Take yourself seriously, do your best, but expect a few curveballs. That's life.
Byron's Beats
If you're a Lord Of The Rings fan, this will make your Friday. Amazon Prime has officially unveiled the title of its big-budget series, to be called The Rings of Power.
Amazon bought the rights to the Lord of The Rings in 2017 for $250 million and will spend $1 billion on the 5 season production. This could make Game Of Thrones look like a children's nativity play.
Production of this first series started in New Zealand in 2018, and according to Jeff Bezos' Twitter account the show will be launched on the second of September this year.
I'm a huge Lord of The Rings fan; Amazon Video Prime will have at least one new subscriber when this launches. I cannot wait!
Michael's Musings
When Steve Jobs launched the iPhone in 2007, I wonder if he realised how big the product would become. The iPhone and its associated app store are the central reason that Apple is worth $3 trillion today. Part of Apple's genius was to resist the urge to create all the iPhone apps in-house. Instead, they allowed outsiders to develop them, in a very regulated and secure environment.
During the week, it was pointed out that Apple now makes more money from the app store than the company's total revenues in 2007.
Bright's Banter
ByteDance, the owner of TikTok saw revenues grow by 70% year-on-year, to around $58 billion in 2021. That sounds good, but is actually its slowest growth in years as China tightens its grip on big tech. In 2020, the social media giant grew sales by over 100% to $34.7 billion.
According to app tracker Sensor Tower, in 2021, users spent an estimated $2.3 billion on TikTok and the iOS version of its Chinese-language equivalent Douyin, a 77% increase year-on-year. This is only going to get bigger since TikTok announced the launch of TikTok Business.
ByteDance is one of the most valuable private tech businesses in the world with a valuation of over $300 billion, based on recent private equity trades on secondary markets. Its suite of apps includes Douyin, news aggregator Jinri Toutiao, and video-streaming platform Xigua.
Linkfest, Lap It Up
Google thinks that working from the office is still important. They have bought a second London office, about 2km away from their current HQ there - Google Doubles Down on the Office, Buying London Site for $1 Billion.
At the beginning of 2020, a16z declared that every company would be a fintech company. Howard Lindzon reckons that since the publishing of that paper, the opposite has happened - The fintech crash.
Signing Off
Asian markets are down this morning. Shares in Japan, Hong Kong, mainland China and South Korea are all in the red. Even crypto markets are getting clobbered, with the price of Bitcoin down below the $40 000 mark.
The Rand is hanging on at around R15.20 to the US Dollar. US futures are not looking too good either in early trade, so brace yourself for another disappointing day in the markets. Don't worry, tough times never last. The sun is shining in Joburg, have a good weekend.
Sent to you by Team Vestact.