Sean Hathaway

I am the owner of this site.

#64 – SpaceX, Tesla, NFLX, etc.

Apr 22. 

Wow. Been awhile. Volleyball. Mexico. 


If you lived thru 2021 you’re a rockstar and welcome to our first year down 

YTD US up 7% and Tech up 20%. 

Since Dec, 2021 US down 14% and Tech down 20%

I know many and myself buying 6 month 5% bonds. But maybe I should pay down the mortgage?

Recession looming. San Francisco vacancy at 33%. 15 sales force towers.??

National Guard in SF


$690 – $166 – $328. 232m paid subs. 

Same analogy I make to legacy media. Disney (closest streaming competitor) lost $1b on streaming. Amazon makes no money except on AWS.

Key statement: “We are pleased with the current performance and trajectory of our per-member advertising economics. In the US for instance, our ads plan already has a total ARM (subscription + ads) greater than our standard plan.”

Winding down


Margins are down. But

  • Ford Motor said Thursday its electric vehicle business lost $2.1 billion last year.
  • Tesla Net Income $2.5b in the quarter! 
  • Punchline: How can these companies scale. Innovators dilemma.
    • Charging network, insurance. Battery tech. Lithium refining! 

Model Y best selling car in Europe. 2nd best in US behind Pickups. 

Cyber Truck in Q3 and FSD this year? Definitely by 2025. “Our growing fleet of FSD Beta users has an exponential impact on total FSD Beta miles driven – with over 150 million miles to date and counting.”

Service and existing fleet. Service is margin. Razors and blades! : 59.08:

Pricing: Sit around in a room and make informed decision 1/week. 


Everyday Astronaut Thread

Antonio Gracias

Mainstream media perspective. 

So you going to bet against this company. Has anyone else landed a rocket? Dec 2015. 8 years ago. Blue Origin in 2021. 

Recommendations: Night Watch, Succession, Full Swing

#63 – TSLA/Twitter (Elon interview), Mkts, Crypto, Xmas songs


S&P 500 -16%, Tech QQQ -30%, Utra tech! ARKK Tech -65%

  • 4.6% on 6 month treasury.
  • Inflation. 7.1% YoY.  
  • Fed raised 0.5%. So now 4.25% – 4.5%. Probably going to 5.0 – 5.5%.
    • Fastest in history. 

My Mortgage. 4.5% and adjusting again to 2.25% + LIBOR. 

Baby its cold outside! 


  • SBF in US and out on bail!  $250 million
  • Caroline and Wang charged. Caroline Ellison, the former chief executive of Alameda Research, a trading firm tied to FTX, and Gary Wang, FTX’s former chief technology officer, both pleaded guilty to criminal offenses similar to those Mr. Bankman-Fried was charged with last week. Ms. Ellison, 28 years old, pleaded guilty to seven counts, including wire fraud and conspiracy to commit securities fraud, according to her plea agreement, which was signed Monday. Mr. Wang, 29, pleaded guilty to four counts, including wire fraud.
  • Caroline interview. 

Tesla & Twitter

  • Twitter Spaces. 1 hour interview with 38,000 listening.
  • Tesla stock down 69% YTD. $400b company. 
  • Now it could triple in 2023. Buffet will probably take a serious look. 
  • Elon has inspired a CEO and silicon valley “builders” renaissance. 
  • Elon to step down as CEO. Mr. Beast!? 
  • San Francisco to investigate worker conditions. Sleeping at work! 
  • From WSJ: Redundant managers, along with managers who have opaque responsibilities, are in essence professional critics. 

Tesla catalysts:

All they want for Christmas is to stop that Mariah Carey song


  • Last week, Netflix said “Wednesday” had crossed 1 billion hours viewed, only the third title to do so within 28 days of its release, joining “Stranger Things 4” and “Squid Game.” 
  • Netflix Training classes 
  • See Rich Greenfields tweet about eyeballs


  • White Lotus.
  • Wednesday
  • The Peripheral on Amazon. 
  • Mr. Beast interview on Rogan. Saw it on a list of most liked podcast episodes. 
  • Country xmas on Spotify. 

#62 – Crypto/FTX/SBF, Twitter


Down 17% was down 25%. 

Meta job cuts. 11000 13%. Brad Gerstner letter. A summary of some of the layoffs this year…

  • Twitter: cutting 50% of its workforce (estimated 3,700 jobs).
  • Facebook ($META): cutting 13% of its staff (11,000 jobs), its largest round of 


SBF is a FRAUD! Bernie Madoff style! 

FTX lends money to Alameda!! $10b loan on $16b in assets.  

 FTX meltdown. FTX. Alameda. Binance. Coinbase. Nothing safe. 

  • FTX has a prominent list of backers such as Sequoia Capital, BlackRock Inc., Tiger Global Management and SoftBank Group Corp.
  • Sam Bankman-Fried. $8b shortfall! He was worth $26b…apparently. 
  •  Tom & Gisele. Hedgefunds
  • FTX Arena in Miami. Home of Heat. FTX on umpire uniforms. 
  • Celeb lawsuits:
    • In the case of Curry, the NBA legend admitted in another tongue-in-cheek-ish TV spot that he was not that knowledgeable about crypto. He added, looking at the camera: “I don’t need to be. With FTX I have everything I need to buy, sell, and trade crypto safely.”
  • FTX’s new chief executive“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,”  “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
  • SBF is 2nd largest democratic donor this election cycle. $37 million. 
  • SBF parents. raised by two Stanford professors who specialize in law and taxes.
  • Caroline Ellison.
  • Related party loans:
    • $300m from last $450m investment to SBF.  
    • Alameda Research had $4.1 billion in related-party loans. Among those were $1 billion to Bankman-Fried, $543 million to FTX Director of Engineering Nishad Singh and $55 million to FTX Digital Markets head Ryan Salam


Lays off ½ of 7500 workers. 

Had to bring some back.  

The whole world shit-posting that the site will go down now. Tesla AI runs with 150 engineers. 
Ligma and Johnson.

#61 – Twitter, Meta, Amazon


Down 20%. Was 25%, but rallied up 5% just this week.  

GDP growth 2.6% (-1.6 and -0.6 in Q1 and Q2). So no recession…currently. 

Apple. +7%

Amazon. -14% 

Meta. -25%

Amazon. AWS insanely profitable. All other biz combined is break-even. Sales of $127b and Operating Income of only $2.5b (2%).

  • Story: AWS $5.4b. All Other: $-2.9b. Everything losing money!! 
  • Tesla: $5b on $21b. 

Meta: meltdown. 

“Meta’s results last night was an absolute train wreck that speaks to pervasive digital advertising doldrums ahead for Zuckerberg & Co. as they make the risky and head scratching bet on the metaverse,” Wedbush analyst Dan Ives said in a report. 

Revenue flat to Q4 20 at $27b. NI 4.3 vs 7.8!! 

Viral Video (Play audio)

Twitter: what “products” does a 23 yr old product manager manage? 

  • 71% off high. 
  • Mkt cap $265b. Was 913b.
  • Headcount growth! The number of employees is up over 3x from 25k to 85k employees in just the last four years! 
  • Wants everybody to work in MetaVerse!? 
  • Brad Gerstner letter.
    • To accomplish this goal, we recommend a three step plan that will double FCF to $40 B per year and focus the company’s teams and investments:
      • Reduce headcount expense by at least 20%;
      • Reduce annual capex by at least $5 B from $30B to $25B; and
      • Limit investment in metaverse / Reality Labs to no more than $5B per year.

The Netflix rebound.

  • Hammered too hard initially. 
  • Reached “profitability” and growing. No one else has.
    • Disney will. 
    • Amazon spending too much! 
  • Advertising more appreciated. Not affected by Apple tracking. A rich ocean to fish in. 
  • Comcast. Peacock has 15m subs and lost $614m in the quarter. 

Twitter takeover. 

  • Walks in with Kitchen Sink. Entering Twitter HQ – let that sink in!”
  • Fires CEO and CFO and head lawyer. $100m in severance pay
  • Denies that he’ll fire 75% of workforce. 
  • Tesla engineers reviewing code. 
  • Employees walking out with boxes. Hoax? 
  • Just tweeted: Twitter will be forming a content moderation council with widely diverse viewpoints. No major content decisions or account reinstatements will happen before that council convenes.
  • People threatening to leave.. Where? Truth Social, Parler? 


  • Cruise vs Tesla FSD in SF. 


  • Upload on Amazon

#60 – NFLX & TSLA Earnings – w/ live interview out-takes


US Stock market is down 22% and the Nasdaq 100 (NDX or QQQ) is down 32% year-to-date. Many large tech companies in Silicon Valley are part of NDX (Apple, Microsoft, Amazon, Tesla, Alphabet, Nvidia…). 

Inflation and Interest

The Fed is on a mission to break inflation, which came in at 8.2% year-over-year for September. The speed at which the Fed is raising interest rates is mind-blowing and we hope it doesn’t cause unforeseen shocks in the system, such as those seen in UK Pensions. (Even more shocking to me is that pensions in the UK can deploy leverage through derivatives!) 

More of my thoughts on the Fed Failure here

Markets expect the Fed to raise again 0.75% in November and then 0.50% in January for a total Fed Funds rate of 4.5%. Could go higher if inflation persists.

The 30 year mortgage rate is up almost 4% year over year, which along with inflation of housing costs has the effect of increasing the monthly payment on the median priced home by almost $1,000 per month. The housing market will continue to cool off as a result. 

Earning Updates:


After 2 quarters of negative subscriber growth Netflix adds 2.4 million subscribers in Q3 and expects 4.5m in Q4. Here are some key takeaways. 

  • Revenue grew 6% YoY or 13% excluding FX. This is a big deal because it shows they continue to scale topline at double digit growth. 
  • Advertising tier launching in November ($6.99 in US). 5 minutes of advertising per hour. As linear TV continues to die, advertising $’s will move to streaming. Netflix is charging top tier rates to advertisers. 
  • Netflix estimates all streaming competitors are losing money and combined losses are north of $10 billion. Why important? Because Netflix has reached critical mass and is generating $5-6 billion in annual operating profit. Very difficult to replicate! 
  • Free cash-flow over $1 billion in 2022 and materially larger in 2023. 
  • Netflix stock was 75% off its high. Now it is trading around $270 or 61% off high.


Tesla is the most exciting company in the world; leading the EV revolution and transition to sustainable energy.

  • Q3 Revenue: $23 billion. Up 56% Year-over-year. 
  • Q3 EBITDA: $5 billion. Up 55%
  • Q3 Storage Deployed (residential and commercial batteries). Up 62% 
  • Full Self Driving (FSD) Beta will roll out to everyone in Q4.
  • Reiterated 50% topline growth for the foreseeable future. 
  • Semi deliveries begin this December and Cyber next year. 
  • Next gen car will be half the cost of 3/Y platform and smaller. Will exceed production output of all other vehicles combined.
  • Elon see’s a pathway for Tesla to exceed the value of Apple and Saudi Aramco combined ($4.4 trillion), excluding accounting for Optimus (the robot). I do too.
  • Tesla stock down 5% 🤔🤣Reminds me of Taylor Swift lyrics: “And the haters gonna hate, hate, hate, hate, hate…”  I’m just gonna wait, wait, wait, wait, wait.  
  • Did you see Tesla AI day? Here’s a short video to give you a taste of Optimus.


Reacher! On Amazon. 

#59 – Mkts, Layoffs, Inflation, Fed, NFLX, TSLA


A key to calming markets is settling war in Ukraine. Pipeline blown up. Donbas annexed. Zelensky pushing for Nato. 

Hurricane Ian. Biden says get vaccinated. Actually, let’s keep it real. As I was Googling this video to queue up, it appears it was cherry picked from something in 2022. $30-$50b.  

Layoffs and Freezes and Downgrades and Upgrades

  • Lyft has frozen hiring. 
  • Meta froze hiring. 
  • Docusign cutting 9% of workforce. 

Apple downgrade: The iPhone maker dropped 4.9% after Bank of America cut its rating to neutral from buy, warning of weaker consumer demand for its popular devices. The selloff erased roughly $120 billion from Apple’s market capitalization.

Nike down 10%. Inventory up 44% QoQ.  Nike’s inventories in North America grew by 65% compared with the prior year, management said, and by 44% on a global scale. The company will be forced to heavily discount its products to get rid of the excess off-seasonal goods, management said, which will have a negative impact on margins.


Netflix upgrade:

Netflix up 35% in quarter from $175 to $240. 

  • Advertising $’s. $65/1000 views. 
  • Advertisers may allocate from Meta to Netflix. 

Federal Reserve

The Fed led by Jerome Powell raised the Fed Funds rate 75 bps to 3.0 – 3.25%. Expectation is now 4.0 – 4.5% by year end. Powell is determined to sink the economy to drive inflation to 2%. Why 2 and not 3%. We have a strong economy, strong underlying demand, low unemployment and the Fed is determined to destroy that. Data suggests inflation is retreating. 

CathieDWood (@Cathie Wood) Tweeted: The Fed is basing monetary policy decisions on lagging indicators: employment and core inflation. Leading inflation indicators like gold and copper are flagging the risk of deflation. Even the oil price has dropped more than 35% from its peak, erasing most of the gain this year. 


Commodities are down. 

  • Lumber: $410 down from $1300 in February 2022. 
  • Copper at $334 from high of $494 in March. 
  • Iron Ore $150 to $109.  
  • Oil? Not so much


Housing: 30 year mortgage rate is up from 3% to 7%. This has the effect of doubling the payment on the median house over the last year. 2 years ago: 30-yr mortgage rate was 2.88% & average new home price in the US was $405k. Today: 30-yr mortgage rate is 6.7% & average new home price is $522k.Result: $23k increase in down payment (assuming 20% down) and 100% increase in monthly payment (from $1,345 to $2,694).

Home Sellers are Scarce: Homeowners with low mortgage rates are balking at the prospect of selling their homes to borrow at much higher rates for their next homes, a development that could limit the supply of houses for sale for years to come.The number of newly listed homes in the four weeks ended Sept. 18 fell 20% year-over-year, according to real-estate brokerage Redfin Corp.


Tesla Recall. NHTSA FUD. Tesla is recalling more than a million cars because of defects in their automatic windows that could injure passengers, the nation’s auto safety regulator said. 

  • Great example of why its important to seek the truth and understanding. Stock is down for no logical reason; save market fears. 

FSD Beta. Rolling out to all owners with driving score >80. 

Margin domination: 50% CAGR Revenue and earnings. 

– direct distribution w/o 3rd party dealers

– vertical integration through owning their supply chain

– manufacturing & materials innovations

– higher ASPs

– industry leading output rates

– FSD & software rev

Tesla AI Day.

  • Note, this event is meant for recruiting AI & robotics engineers, so will be highly technical
  • As well as advanced chip & supercomputer engineers for next-gen training & inference

What are Jim and Mary thinking? 

Tesla Twitter:


  • Dahmer?? 
  • Elvis? Maybe. 
  • House of Dragon. Last episode jumped 10 years. 

Quote: Children are happy because: 

  • They’re not self conscious. 
  • They lack a sense of time pressure
  • They’ve no goals. 

#58 Housing, Biden, Ukraine, CA Energy, TSLA, NFLX#58


  • The Text Message I just got.  Crypto and delaying laundry?! 
  • Down 17%. Tech down 25%. 
  • Housing.
  • Homes in August sat on the market an average five days longer than they did a year ago.
  • The median listing price in August dropped to $435,000 from $449,000 in July
  • The average home sold for less than its list price for the first time in more than 17 months during the four-week period ended Aug. 28, according to Redfin
  • Nord Stream Pipeline closed again. Russia booking record profits. 
    • Long cold winter for Germany.   

Biden Speach: 

  • Red lights. Looks like Nazi Germany. Portnoy Rant.  
  • Who are Maga Republicans? 5%, 10% far right? 49%? Far “left” just as dangerous. He just speak to the extremes if he wants to “unite” the country. 

White house seeking $12b for Ukraine. In addition to $40b already approved. 


  • On July 27 Pelosi sells Nvidia stock.
  • Aug 26 Government says can’t sell advanced chips to China. 

Energy (in California)

August 24 CA bans the sale of gasoline cars by 2035. 

August 30: Stop charging electric vehicles. May have rolling blackouts.  

Diablo Canyon Closure and then re-open.LA Times

How much does that plant produce? From PG&E directly:

18,000 gigawatt hours. ~10% of California’s energy needs. 

For years, Diablo Canyon has continued to safely produce clean and reliable energy without greenhouse gases (GHG), avoiding 6 to 7 million tons per year of GHGs that would be emitted by conventional generation resources. Built to withstand extreme natural disasters, including earthquakes, Diablo Canyon’s design features state-of-the-art seismic supports

Russia throttling gas to Germany

We need energy independence, which means mining too.   



  • Advertising live Nov 1!? 
  • $7-9 pricing. 
  • Sources confirmed the new Nov. 1 launch date, which was previously reported by the Wall Street Journal. Netflix and its exclusive ad partner, Microsoft, have requested ad buyers submit initial bids next week, with a “soft $65 CPM” — the cost per thousand views — meaning that the company is open to negotiating the ad rates. That’s well above industry CPMs of sub-$20.


Joe Rogan: Tim Dillon and Zuckerberg

Pam and Tommy. So dumb! But can’t stop watching. Sex and Rock n Roll.  

The Fed Failed Us

The Fed’s job is to promote economic stability via:

  • Low and stable inflation, and 
  • Maximum employment. 

This is done primarily by adjusting interest rates and through open market operations (purchasing securities) also known as Quantitative Easing (QE).

Not a lot of tools, but VERY powerful ones: small movements reverberate through global markets. The most significant of late is the UK pension system, which was on the verge of collapse as a result of dramatic increase of interest rates and employing derivatives for leverage?!

The Fed is our driver: no hard braking, no jack-rabbit acceleration and definitely no drunk driving.

So why did the Fed run rates up on us 3.0% in 6 months; the fastest rate in 40 years? It’s worse than that! They were still buying securities in the open market (QE) in March 2022, the same month they first raised interest rates! One hand saying STOP the other saying GO. This is ludicrous and irresponsible.

From Josh Brown referring to Jerome Powell: “If you’re buying mortgage and treasury bonds to stimulate the economy in the month of March and then deliberately trying to crash the markets and create a recession in September, you’re probably not the right person to have in charge of the money supply. You may not be the “price stability guy.” 

Our Treasury Secretary Janet Yellen was still calling inflation transitory in October 2021. That’s when stocks were peaking, bitcoin was at $56,000 and NFT’s were still selling for millions of dollars. 20/20 hindsight, but with inflation at 6% it’s hard to understand why there wasn’t a small rate hike or pull-back on QE in 2021. Obviously, nobody wanted the music to stop; a party of epic proportions. 

Also consider that the Fed basically NEVER raised rates from 2009 thru 2016. 7 years of free-money. 

The Fed had to act, but they could have acted sooner and more responsibly. And now they are proclaiming that they will defeat inflation at any cost. At the cost of your 401k, your job and who knows what else they’ll break along the way. Again, not saying a market pull-back and correction was not warranted, but the Fed could have and still can act more prudently.  

The Fed has handled the last 12 months poorly. If Jerome Powell and Janet Yellen were public company CEO’s they’d be fired. Ironically, Ben Bernanke, who led the Fed from 2006 – 2014 was just awarded the Nobel Prize. He and team were responsible for near zero interest rates from 2009 – 2016.

Keep in mind, the Fed does not have the tools to fix “supply” side inflation. Raising interest rates and controlling the money supply does not fix supply chains and OPEC controlled oil prices

In Conclusion 

Cathie Wood of ARKK laid out some good arguments for the Fed to slow down a little and look to some leading indicators. Inventories are rising and many commodity prices are falling. Unfortunately, oil and energy prices are not falling, but does crushing demand and driving up unemployment help? 

I’ll add that it’s ridiculous in this day and age of technology that the Fed is looking at lagging economic indicators – including surveys – and applying so much judgment to determine interest rates. Arguably they should be plugged into real-time banking, FinTech and other feeds and have an algorithm guiding the approach. 

And Finally, each member of the FOMC needs to stop soapboxing their opinions. Remember the days when the Fed gave a speech once per month and that was it.  

If the Fed has to reverse course by more than a 1% in 2023, that’s probably a decent sign of failure in policy. 

#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. 


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.

No alt text provided for this image

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

No alt text provided for this image

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.


Q2 2022 – Finance Market Update

July 17, 2022

Stocks & Markets

Painful first 6 months of year…worst start for US Stocks in 50 years. If you read nothing else from here forward, this short video sums up the quarter nicely. 😂

Times like this reinforce the need to have a financial plan in place and stick with it. 

Let’s take a step back though and consider the following: If you invested $10,000 on Jan 1, 2017, you’re still doing VERY well. Hard to believe, but it’s true. If you were in technology, you’re killing it, and even if you were in conservative value stocks, you’re doing just fine. 

* FATMAANN = Facebook, Apple, Tesla, Microsoft, Amazon, Alphabet, Netflix, Nvidia

Government stimulus and Fed actions drove massive market mania in the last couple of years. Many (including me!) feel a huge sense of loss recently, but if you step back and just look over the last ~5 years, returns are healthy and markets appear to be normalizing.  

Said another way. 


I wrote about inflation being a concern in my Oct 2021 newsletter and at that exact time our Treasury Secretary was still calling it “transitory”. The Fed didn’t begin raising rates until March 2022! AND the Fed was still buying securities in the open market (i.e. Quantitative Easing) to the tune of $20 billion in March 2022! Here’s their last purchase

Why am I showing you this? Because it’s crazy. The Fed was still buying Treasuries when inflation was rampant. The government issues debt (i.e. treasuries) to fund expenditures, and then the government (the Fed) buys them. Printing money. 

Now we are all paying the price…high prices!

Below is year-over-year inflation in June compared to September:

Our government overspent and the Fed fell asleep at the wheel. 20/20 hindsight I suppose. I like Ray’s Dalio’s take. My favorite punchline: 

“…while tightening reduces inflation because it results in people spending less, it doesn’t make things better because it takes buying power away. It just shifts some of the squeezing of people via inflation to squeezing them via giving them less buying power. The only way to raise living standards over the long term is to raise productivity and central banks don’t do that.”

In short, The underlying US economy and demand is strong and that’s a great long-term outlook for markets. Job openings of 6.9% continue to exceed the unemployment rate of 3.6%; a very healthy economic indicator.

What Happens Next? 

Many experts predict a prolonged bottom and more pain to come. Why? 

So much uncertainty: (1) war in Ukraine, (2) supply chains (3) inflation and recession worries and (4) Fed actions. Now there may be a (5): Emerging Market Debt Crisis. Did you see the videos in Sri Lanka? More to come in other countries.   

Action Items for Investors 

  • Have a plan, stick with it and don’t try to time the markets. 
  • That said, historically we see big down turns every ~10 years: 2000, 2008 and 2022. These are historically great times to invest. 
  • Dollar Cost Average in NOW. Keep buying slowly and consistently. We may not be at the bottom, but 5 years from now you’ll look back and be glad you were buying!

Other stuff


The median U.S. home price rose from $160k in 2010 to $418k!! Bubble? Stay tuned and be careful. 


Crypto is not a hedge to equities, as many promoters claimed. Seems it was more a speculative investment for excess capital. Check out the correlation of crypto exchange company Coinbase to Bitcoin value below.  

Countless stories if you’re interested from the collapse of Terra Luna to one of Crypto’s most important hedge funds 3 Arrows. In retrospect, this all seems so obvious. 


Elon backs out of his purchase of Twitter. I think they’ll simply negotiate a lower price and he ends up buying it. He did waive due diligence, but Twitter likely disclosed inaccurate data in public filings around DAU’s and fake/bot accounts. We’ll see what the Delaware Chancery Court decides. 

On a related note, it is clear that Elon sincerely cares about Twitter and its importance as the public town square. Further, he essentially provides an MBA course on how he is going to turn the company into a powerhouse during the Elon Musk all-hands meeting here


Near and dear to my heart. And boy has Netflix been in rough waters losing subscribers and stock down 73%! But, there are reasons to be hopeful: 

  • Ads. They have partnered with Microsoft to roll out an ad-supported tier. 
  • Password sharing. Ads will also facilitate their crackdown on the 100+ million password sharing accounts. Now they can gently nudge non-paying households to the ad-supported tier.
  • User-generated Content. Finally, with advertising, and TikTok eating their lunch and others’, there are strong arguments to move into “user-generated content”. 
    • User-generated content will drive billions in ad revenue. $6.9b for YouTube last quarter alone. The content is “free”, so the margins are enormous. 
    • It’s an engineering challenge, which is why it’s a perfect area for Netflix to engage; and near impossible for traditional studios to follow.
    • 100’s of million, maybe a billion, people already have the Netflix app on their phone! Heavy lifting done.
    • Netflix lost my teenagers and a lot of Gen Z. The mission to “Entertain the World” should logically include user-generated content. 


Breakaway Podcast. Check it out and come be a guest.

Take care! 

Be kind. Be positive. Persevere.


Twitter: @seanjhathaway

#55 – Mkts, Inflation, War, Politics, Energy, NFLX, Twitter, Musk, TSLA

Markets, Inflation, War in Ukraine, Politics, Energy, Netflix, Twitter, Musk, Tesla


Inflation print

CPI at 9.1%

What now: 

War, Supply Chains, Inflation (supply driven), and Fed actions.  

Are we in a recession? Yes.


  • 70-80% of americans in general agreement. Then the wacko’s come out and ruin everything. 
  • Climate change or die! 
  • Energy. 50% st fix and 50% lt strategy. Solar. Nuclear. 
  • Abortion.


  • Bad guide. Stock down 75%. 
  • Partnering with Microsoft for ads
  • TikTok kicking Netflix’s ass…so why not compete head on. 

Cheap Stocks

StitchFix down 95%. Bill Gurley buys $5m of StitchFix. 20x return if it goes back. That’s the good news. Not a recommendation but lots of depressed stocks like this.


As for Musk himself, the CEO had said in an email a few days earlier that he would spend six days a week in the factory, “seven if physically possible.” In the email, which The Information reviewed and which hasn’t been previously reported, Musk added, “BTW, anything I ask others to do, I do myself even more.”


  • All automakers down today. Watching this guy say that Tesla will “revert to mean” of other company valuations. No they wont. 
  • Solar, Battery, Cars, AI, HVAC, Semi’s, 


  • TopGun
  • Tour de France. 
  • British Open for Golf. Tiger shot a 78. 

#54 – Austin, Markets, Housing, Elon/SpaceX, Elon/Twitter!

Austin Texas bachelor party. I love that town. 

Dr. Emperor of masks and vaccs Fauci has Covid; and he’s been vaccinated 4 times. 

Chesa Boudin the progressive DA of the most progressive city was recalled. Are people actually getting tired of crime? 


  • S&P down 23% and Nasdaq 100 down 30%. 
  • Fed just raised 0.75% this week. First time since 1994. Now we’re at 1.75%. 
  • Inflation. Gas. War. 8.6% 100% up for gas. News flash: interest rate hikes don’t drive gas prices down. 

Credit card companies make a lot more money when gas prices double. Their revenue doubles. Buy Visa and Mastercard?


  • In Jan 2021 30 yr mortgage rate was 2.65%. Avg home price $402k. 
  • Today. 5.78% and $570k. 
  • 20% down payment. Monthly payment is $1,294 to $2,671. 106% increase. 
  • Rates are 3% higher. So $500k loan. $15k/year or $1,250/mo. 

I personally just saw more houses for sale on Zillow in my neighborhood, more than ever. 

USA Today removes 23 articles after a reporter fabricated sources. USA today is allegedly a “fact checker” for Facebook and possibly Twitter. Musk at Twitter All-hands.  

Elon Musk: 

SpaceX fires employees. No woke ass bullshit!! 

NYT reporting on letter. Brian Armstrong

“The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views,” Ms. Shotwell wrote. “We have too much critical work to accomplish and no need for this kind of overreaching activism.”


  • So casual. Looks like he is on iPhone and some dude walking around in kitchen in background. 200m daily users. 7.8b Gap. 8b in world. Wants 1b at least. 
  • How to verify. $3/month. 
  • Payments. 
  • Entertaining advertising.
  • Video: Talk about how to make Twitter better!
  • Video 2: How do you define success. 

Netflix take some lessons! TikTok!! 

Electrician and immigration. 3 strategies: 

  • PHD’s. 
  • Lower labor. 
  • Refugees. 
  • AND Strong borders. 

Tesla stuck in the mountains.