Month: August 2022

#57 – Markets, Student Loans, EVs, TSLA

The Markets

Down 13% YtD.  

I don’t think we’ll see new highs until 2024. Just gonna bounce around.

The Fed. 

Jerome Powell: “Restoring price stability will likely require maintaining a restrictive policy stance for some time,” Powell said Friday in remarks at the Kansas City Fed’s annual policy forum in Jackson Hole, Wyoming. “The historical record cautions strongly against prematurely loosening policy.”

He said restoring inflation to the 2% target is the central bank’s “overarching focus right now” even though consumers and businesses will feel economic pain. He reiterated that another “unusually large” increase in the benchmark lending rate could be appropriate when officials gather next month, though he stopped short of committing to one.

Student loan debt relief

The president’s plan cancels $10,000 in federal student-loan debt for borrowers making under $125,000 a year or couples making less than $250,000 a year. In addition, those who receive federal Pell Grants and make less than $125,000 a year would be eligible for total forgiveness of $20,000. But the plan doesn’t attempt to rein in college tuition, which has outstripped inflation for decades.

From Whitehouse: “Of the 43 million federal student loan borrowers eligible to benefit, about 20 million will have their debt completely eliminated, according to White House estimates, with 90% of help going to those who earn less than $75,000 a year. 

Ultimately, the average cost of tuition has increased more than 144% since 2001 on average, even after accounting for inflation.

  1. It’s not “fair”.  Nothing is though! 
  2. The bigger issue is it doesn’t fix the underlying issue. Let markets drive supply/demand. 
    1. Literature/history major. 
    2. Optometrist example.  
  • Need to fix underlying issue: University costs are rising faster than cost of living and fueled by college administrators that are incentivized to encourage students to borrow. 
  • We should used a market-based approach to student lending. Universities should be on the line. Should approve. Market based. Grades and Major. 
  • Some states are going to levy taxes on forgiven debt.   

Novak Dkokovic 

  • Not competing in US open because he’s not vaccinated. 
  • So many people are getting Covid, including the CEO of Pfizer.  

Electricity Prices

Electric Vehicles

  • California Switch to electric vehicles by 2030. 
  • Tesla Stock split. 900 to 300.
  • Tesla 10.69.2 set to release in a couple of weeks. “Wide Beta” version. 
    • FSD price increased to $15k. Very bullish.  
    • Investment grade rating. 
    • Record Q3 and Q4 deliveries and profits.  
    • Semi release in Q4 and CyberTruck in 2023. 
    • Continued ramping of factories and likely announcement of new Giga.
    • Macro-level: Energy prices driving Solar consumption. 
  • Tesla Virtual Power Plant program. 


Business Development Representative

Company: HathawayFinancial LLC
Job Role: Business Development Representative

HathawayFinancial (HF) is a Wealth Management and Investment Advisory Firm. We specialize in helping working professionals in the technology space build a financial plan for the long term so they can concentrate on their career and family. We do this through detailed financial planning, investment management and ad-hoc real-time advice.

We are looking for a Business Development Representative (BDR) to drive lead generation and ultimately new business. HF will provide the pipeline of leads, but needs a professional to get meetings scheduled with HF Registered Investment Advisor (RIA).

HF will provide a budget for marketing and generating leads. HF will then, in addition, pay a bonus or Sales Progression Incentive Fund (SPIF) tied to clients landed.

Job Responsibilities:

  • Core responsibility is demand and lead generation of qualified leads.
  • Being the first point of contact – email, text and verbal – for qualified leads.
  • Scheduling consultations with the Owner/Manager of HF.
  • Advise HF on most efficient use of funds to generate leads.


  • Experience working with RIA’s, Investment Advisors, Planners, and Wealth Managers, etc…
  • Deep understanding of social media platforms, email marketing, and avenues to generate leads. – Digital and traditional marketing channel optimization.
  • Should have general understanding of stock market and able to discuss at high-level.

The ideal candidate:

  • You’re reading this and thinking “I know exactly what needs to be done here”.
  • Demonstrated interest and knowledge of financial services industry. More specifically
  • stock market.
  • Motivated to make a lot of money working hard.
  • Interested in converting to full-time employee after demonstrated success.
  • Positive attitude. Relentless.

Contact for job inquiries.  

Time for Netflix to fast-follow TikTok

Mission is to “entertain the world”. User Generated content is highly entertaining.

This strategy plays to Netflix tech DNA and prowess.

It’s relatively easy to do, highly profitable and people want it.

Netflix will have 3 segments: (1) Produced content (2) User-generated content (3) Games.

At Netflix, We Want to Entertain the World – Netflix Mission Statement 

TikTok is engaging, entertaining and addictive; full of short-form user generated content (UGC) consuming a significant amount of America’s leisure time. TikTok clearly has hurt Facebook and Netflix. I know because my kids and their friends now choose TikTok over both; this was not the case 2-3 years ago. 

When I talk about User Generated Content, think of some combo of YouTube and TikTok. At a minimum it is entertaining videos – usually silly and funny; evolving over time. 

It is NOT a social media platform, but some social elements will emerge over time: liking, sharing, following, etc… 

Why Netflix must copy TikTok (a summary): 

  • Netflix is about engaging videos. Netflix has now moved into reality TV, so short-form UGC is a logical extension of that. 
  • It is HIGHLY PROFITABLE. Content costs are essentially zero. And with Netflix moving to advertising, there is enormous opportunity for monetization. 
  • Netflix was born in Silicon Valley and has tech DNA. This is a technological problem to solve. Traditional studios won’t be able to do this well. Note Amazon is reportedly testing here too! 
  • There are likely 1 billion people with the Netflix App. So the heavy lifting is done; just enable the upload feature. Important to note that many of the same videos appear across TikTok, Reels and now even in Twitter; so might as well be in Netflix too. 

Netflix Mission “to Entertain the World”

Music and Podcasts are both digital forms of entertainment where one could argue Netflix should compete. However, videos have always been and are the core of Netflix. In fact,  arguably, UGC videos are more aligned and strategic with the Netflix platform than gaming! 

Finally, and at risk of repeating over and over, short form UGC videos are so addictive and entertaining, it is simply obvious that Netflix must enter the space.

User Generated Videos Generate Enormous Profits

Initially UGC will increase the stickiness of Netflix; i.e. decreasing churn. 

Eventually though Netflix will monetize these videos in various forms of advertising; similar to YouTube and TikTok, the former earning $7.2b from ads in Q2 2022 (i.e. a similar size business as Netflix). 

Netflix never used to “do” advertising. As Reed explained so eloquently in their Q4 2019 earnings call: Google, Amazon and Facebook do it so well that Netflix can’t efficiently compete. Fast forward a couple of years, and now Netflix will compete. Point here is Netflix needs to and can pivot strategically. 

Technology is core to Netflix and UGC plays perfectly

Netflix disrupted traditional TV with streaming, and they paid the pioneer tax in developing the underlying tech infrastructure: cloud-based, file compression, video delivery, dubbing, algorithms, etc… The list is long. Unfortunately, for Netflix, their technology lead is no longer a formidable barrier. Traditional studios have replicated or licensed the technology, and though still lagging, it’s good enough.

Example: If I really want to watch Yellowstone (one of my favorites and not on Netflix), I don’t care if the content buffers for 10 seconds on start-up or starts over at the beginning when I leave an episode midway. These are annoyances and something you would never experience on Netflix. But other technologically inferior streaming services are rapidly solving these issues; and now “Content is King”. Again. 

However, traditional studios would have technological difficulties creating a delightful app experience to watch UGC. It’s just not in their wheel-house or DNA. Executive leadership would never go for it: they are producers! 

But this is Netflix DNA: Technology. It screams “Silicon Valley”, not Hollywood. 

The Heavy Lifting is Done

New apps will come along and reach global scale. But it is a mammoth feat to reach 1 billion users. Amazon, Facebook, Instagram, YouTube, Google Maps and Search, Safari AND Netflix. There are simply not a lot of apps that count 1 billion downloads and real-estate on the iPhone home screen.  

Point here: Netflix has done the heavy lifting.

Just turn it on. Build it and they will come. 

Addressing the Doubters

Netflix is not a Social Media company. 

Again this should not be construed as a social media play, but simply a move into short-form user generated video content. 

Meta spends billions trying to copy TikTok with Reels. How can Netflix compete?  

Netflix doesn’t need to be nearly as complex. Just let users upload funny content. Many, like myself, do not spend time creating content, but we really enjoy it. Overtime Netflix will iterate: 

  • Improve algorithms.
  • Enable sharing and following.
  • Improve tools for creating content directly on the phone. 
  • Monetizing.  
  • Etc… 

Content moderation will be a nightmare.  

This is a fair concern. But again, just turn it on and see what happens. Maybe you will have to dedicate armies to content moderation. But if it’s generating billions of dollars, then so be it?  TikTok, YouTube, Twitter, etc… are paying the pioneer tax on this front, so Netflix can learn from them.  


Move fast and enable User Generated Content now. UGC makes perfect sense. It will be synergistic with your ad strategy and contribute to broadening and growing the Netflix ecosystem.

Finallyk, Netflix should require their extended management team to use TikTok for 30 days; I’m afraid they’re out of touch.

You can reach me at

#56 Markets, Trump Raid, IRS Agents, Tesla, Streaming Wars


  • Yes, We’re in a recession, but White House attempting to change the definition after …centuries…forever? Recession is 2 quarters of negative GDP. 
  • Inflation at 8.5%. 
  • US stocks down 24% and Tech down 31% on June 17. Now: 12% and 18%, respectively. 


  • Nancy Pelosi visits Taiwan. Prompts drills and missile tests by China. Do we really need this right now? Is that a good idea? Does it advance American interests? Since 1979 and under many administrations – left and right – we’ve maintained a policy of “Strategic Ambiguity”.
  • Raid on Trump’s Mar a Lago. 
    • Could be Nuke materials…in that case…kind of serious. 
    • Why not just make photo-copies. Or take pics on iPhone. So easy!? 
    • Could there be a master plan. I thought the locker room talk would lock him out of the presidency.  
  • IRS
    • 70000 new agents. Requirements: 
    • 37 yrs old requirement. 
    • Adhere to the highest standards of conduct especially meeting honesty and integrity.
    • Work a minimum of 50 hours per week which may include irregular hours and be on call 24/7 including holidays and weekends. 
    • Maintain a level of Fitness necessary to effectively respond to life-threatening situations on the job.
    • Carry a firearm and be willing to use deadly force if necessary.
    • Be willing and able to participate in arrest and execution of search warrants and other dangerous assignments.
  • IRS Math: 
    • Elon on National Debt: “US national debt is ~$28,900 billion or ~$229k per taxpayer.Even taxing all “billionaires” at 100% would only make a small dent in that number, so obviously the rest must come from the general public. This is basic math.Spending is the real problem.”


Elon 18 years. And running 3 others:  Including SpaceX, which landed first rocket in 2015 no one has done so since.  

Streaming Wars: 


  • Obstacle is the way. Ryan Holiday. 
  • Happiness corresponds to how much you think about yourself vs. others! 
  • Terminal List. Chris Pratt
  • Old Man w/ Jeff Bridges

Review your 529 Plans and consider funding now

Funding your 529 plans in down market can be a good strategy

529 plan allocations and fees can be outrageous!!

Know what you’re invested in. Have a strategy.

I was just digging into the underlying investments of my kids 529 plans at Fidelity. Obviously, I should know exactly what’s in there; I’m a financial advisor after-all. Well it wasn’t exactly what I expected and I was shocked.

BTW, I previously wrote about the importance of 529 savings due to the outrageous cost of education.

529 Plan Contributions

The ideal method to contribute to your 529 plan is to have a fixed amount automatically withdrawn from each paycheck and deposited to your child’s 529. Simple. No thought involved. And you invest smoothly overtime catching downtrends and uptrends (dollar cost averaging).

Some people choose to lump-sum the contribution once or twice a year. When I say “Fund your 529’s now” I’m talking to those people. Markets are still down about 15% year-to-date so by investing now you are theoretically “buying low”. Markets may still go lower, but you’re likely going to get a nice return over the next few years.

Reviewing my 529s

I made the allocations 10 years or so ago. I chose the most aggressive allocation profile and set it to “static” and “aggressive growth”. There are 40+ options so it can be very confusing for an inexperienced investor. I’m very risk tolerant, so aggressive it was. “Static” means the portfolio allocation doesn’t change based on age/timing; consistent with my aggressive philosophy.

Now that my daughter is 3 years from college, I figured I’d better give the plan a visit.


Turns out there are about 40 different options — information overload. Below is a screenshot of some.

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529 Plan Fees

Digging into the “Aggressive Growth” strategy. There are two: Index and Mutual funds. Turns out I was invested in the Mutual Funds. Big mistake! I was paying almost 1% in fees. That is a lot! My guess is “index” was not available when I initially allocated. The Index fees are only 0.13%. Still high, but 87% lower than mutual funds. Always choose Index.

529 Investment Allocation

This is what shocked me even more! Their definition of “aggressive” was 44% foreign equities: I call that asinine. Aggressive to me, means Technology and growth stocks and maybe 20-30% foreign equities. Foreign equities have underperformed the US markets during the last decade; so our 529 investments underperformed.

BTW, S&P 500 companies derive 40% or more of their revenue from foreign markets, so owning “foreign” stocks as diversification has become less important.

My Solution

I just moved both my kids’ holdings and future allocations to the S&P 500. Simple, great returns and inexpensive. And BTW, the fee is still 0.11%, which is bananas, considering Fidelity’s S&P 500 Index fund available to the public only charges 0.02%. So its 5x more expensive! But it’s still the best option.

Red circles below: Bad.

Green circles: Good

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Much of the finance world exists by simply extracting money from the less informed. 529 plans are no different; they are riddled with inefficiencies and non-sense.

This is not a broad recommendation for most people. Consult your advisor. But, do review your 529 strategy periodically.