Momentum Monday – Flat Lining

As it always does, the markets reopens today after the long weekend.

Ivanhoff and I tour the markets and cover a lot of ground. The S&P’s flat 200-day moving average is starting to drag on which makes it harder to gage the direction of individual stocks (at least for me).

You can watch or listen here

Have a great week.

As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

Memorial Day on Coronado

I am on Coronado (San Diego) with the kids today for Memorial Day.

We are lucky to have a home on the island which is a spectacular American piece of real estate with its own unique history.

We share the island with the military.

Here is a map of all the navy bases and facilities on the island:

Here is the wikipedia page on the Coronado Naval bases.

This morning the kids and I will walk over to Star Park at 10 am for Memorial Services.

I hope everyone has a great day.

Google Travel and The Google Maps SuperApp Advantage

It was a really busy week in New York.

I was tempted to head up to Toronto last night to see Game 6 with some friends, but caught my flight home to Phoenix and had dinner with Rachel and Ellen.

I watched the 4th quarter from the comfort of home and it was fun to see The Raptors win.

I am headed to Coronado for the week and then off to Portugal for a cycling with friends.

It seems like all I do is travel and for me, Google Travel continues to get better and better.

Everyone has their own unique travel workflow, but as Skift outlines in this article – ‘Google Travel Is Now One Step Closer to One-Stop Shopping‘.

Other than Hotels Tonight, which AirBnB recently acquired, I am almost exclusively using Google Travel and I am hearing a lot of my friends say the same.

Skift has another great research piece titled ‘Google Maps Is Ready to Transform the World of Superapps: A Skift Deep Dive‘ which helps explain one of the big edges Google has as they grow their travel business.

Have a great Sunday.

Pick Up The Goddamn Phone!

Ellen has to put up with a lot of my financial experiments.

I open so many new financial app accounts and move my money all over the place to see how companies and people behave with our money.

In the last month I have completely closed our Wells Fargo Accounts and Schwab accounts.

I never expected much of a plea for my money to stay at Wells Fargo. The bank is a disaster. I had to physically go into the bank to make the wire (because of the amount…so they say). I was prepared for a final plea for my account and business. Nothing. In fact, all I got was an inappropriate ask about why I was wiring money.

In all my years at the bank, nobody ever thought to pick up the phone and try and find out if I had any needs for my savings or plans for the future.

I feel like a cloud (shaped like a year 1900 stagecoach) has been lifted from my back.

They never really deserved my business, but in the 1990’s, banking was different and retail locations probably mattered.

Closing (doing ACAT’s) for all my Schwab accounts was much different.

For the last decade Schwab has held most of my investable assets. I never negotiated fees. I was a fantastic…dumb customer. They knew everything about me and nothing about me. I have been mad at myself for letting them neglect me, but I am in a spot where I am trying to learn some new aspects of the financial business and I wanted to see how they would react if I were to close my accounts.

I expected some emails or calls wondering why I was leaving.

I got nothing.

Zero friction to leave.

I am not mad, just sad that a company like Schwab (I did well owning the stock for a period) would let a 10 plus year easy to maintain customer digitally walk right out the door with zero effort to keep me.

I can’t imagine a young Chuck Schwab would be happy to hear how easy it was for a long time high net worth, low maintenance customer to wire to a competitor.

Everyone in this new digital economy talks about the costs of customer acquisition. It is incredibly important for startups.

I see very few fintech and ecommerce VC’s, ‘experts’, founders, execs and larger company CEO’s focused on customer satisfaction and retention. I am living proof.

While software can do almost anything in 2019, I still think a creative use of digital and analog customer support is the best way to grow and retain customers.

Marketing and customer support engineering (code, human touch and creativity) matter, not just digital sales tactics and funnels.

In 2019, make sure you hire people that will pick up the phone on the first ring, or be smart enough to pick up the phone and use it when it matters.

I Love New York

The weather this week in the city has been fantastic.

I’ve set some personal records here daily for walking.
Yesterday, my friend Mike Lazerow took me out to Bayonne for a very early morning round of golf. Our friend Ryan Spoon joined.

Bayonne is a beat of a course on a calm day, but yesterday we had Scotland like winds.

Some of my favorite pictures come from the course. Ryan took this one of me that I like:

the city is right behind me…

PS – I have to put to rest my favorite pair of my skinny jeans today. Of the 8 miles I walked around New York City yesterday, 6 were with my fly down. Thanks Frank for calling it out after lunch. Luckily I am in NYC where no one cared about the guy with is hand on his crotch all afternoon.

Some Bitcoin and Some Banking Numbers

I noticed that Bitcoin has held $8,000 and I have been getting a lot of questions about it.

You know who else is getting a lot of Bitcoin questions… JP Morgan!

JP Morgan – according to my friend Pomp is now putting out research reports about “Bitcoin’s intrinsic value.”

I have a bad memory, but I DO remember Jamie Dimon (their CEO and supreme leader) calling Bitcoin a fraud, joke and worthless the last few years.

I agree with Pomp on the following…never listen to what a bank says, watch what they do.

By the way, Bitcoin’s market cap is now twice that of Uber’s $70 billion.

Speaking of ‘banks’, here is a chart of Deutsche Bank :

Elsewhere in the financial world, Goldman Sachs seems to be doing a lot of smart (and evil) things in fintech, but their stock can’t get over $200 and remains over 20 percent off their all-time highs. It’s not easy building and buying legitimately into software service banking business with genz and millennial customers.

Welcome to 2019 brokerage and banking valuations.

Of course it could mean Goldman Sachs is undervalued. I continue to keep a close eye on their acquisitions, products and stock price.

Lindzanity – Podcast 5 – Doug Horlick Worked At Goldman Sachs and I Like Him

Today on my podcast I sit down with Doug Horlick to talk about life on Wall Street with Goldman and the thundering herd at Merrill. Doug spent his whole career on Wall Street leading sales on the FX side. He then headed west to Scottsdale where he will never have to run into another Wall Streeter. Unfortunately for him, my good friend Paul Traub thought we should meet.

Doug and I became quick friends over a round of golf at the incredible Scottsdale National Golf Club which was founded by Bob Parsons, the legendary Phoenix entrepreneur who also founded Go Daddy and PXG.

On this podcast, we talk about life on the street, working through the 2008 crisis while with Goldman, fintech, machines and indexing, Bitcoin, the markets and even Tesla.

I hope you enjoy.

You can listen/watch the podcast here on YouTube

You can also click here to listen to the audio

The podcast is also available on the Apple podcast app or on Spotify. Just search my name.

Momentum Monday – Weak!

Good Monday everyone.

Ivanhoff and I did a tour of the market last night and at one point Ivanhoff called me too negative.

I call the tape as I see it and I do not like how narrow a market it is for winners.

You might as well just watch/listen to the episode. It is short and to the point.

Click here to watch/listen.

Have a great week.

As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

The Streaming Wars

The streaming wars are in ‘global thermal confusion’ mode.

This week Disney took FULL control of Hulu.

Luckily Ben Thompson and Peter Kafka broke it down for us. Here is Peter Kafka on the Hulu/Disney/Comcast Divorce.

Ben dives in to the subject:

As a general rule, any product that involves high-fixed costs but minimal marginal costs is more valuable the more customers it reaches; after all, more customers means more leverage on those fixed costs. At the same time, there are different types of products that fall into the category of “high-fixed cost low-marginal cost”; some are pure infrastructure, like telecom, and thus relatively commoditized. On the other extreme are things like movies, which must appeal to consumers, and doing so, may repel some subset of them. The most valuable companies in the world do both: they are effectively infrastructure, yet also are highly differentiated from a consumer perspective. Think Google, or Facebook, or even Apple and Amazon.

What is notable about Disney’s approach is that they have identified this bifurcation, and taken different approaches as appropriate. On the consumer side, there are three streaming services: Disney+, ESPN+, and Hulu. Each is very well defined: Disney+ is family-friendly and built around Disney’s best brands; ESPN+ is about sports; Hulu is about more adult-centric entertainment. Each is free to appeal to customers on their own, yet there are clearly plans to offer them as a bundle to customers that want all three. This all makes sense when it comes to balancing the need to leverage the fixed cost of content development with driving differentiation and pricing that appeal to consumers.

Meanwhile, the technology between the three doesn’t need any segmentation at all: streaming is streaming, account management is account management, etc. Now, because Disney fully controls all three, they can fully control the entire underlying stack for all of them. This is not only cost-effective, it also helps drive adoption across the consumer facing offerings: after all, if you already have an account, and Disney already has your billing information, adding a subscription (at a bundled rate!) is only a tap away.

As for me, the consumer AND Investor?

Indeed, part of this deal is that Comcast reserves to the right to place some shows on a soon-to-be-coming NBCUniversal streaming service, and pull them from Hulu entirely after three years. That is in addition to AT&T’s upcoming streaming service, Apple’s upcoming service, Amazon, CBS, etc. Frankly, it’s probably going to be pretty annoying for a while. Kafka notes:

It’s hard to see how any of this is good for consumers, as they’ll be asked to either pay for more services than they are paying for now or, at a minimum, to pay attention to multiple services and watch those services’ ads.

That customers are going to pay more, or at best the same, as they do now, has long been clear to me: the disruption of entertainment is not leading to lower prices but to a redistribution of profits. At the same time, I do expect customers to push back: Netflix will likely be a baseline, along with the cable bundle for sports fans, but the other services will wax and wane according to whatever content they have that breaks through (this will be good for resellers like Apple and Amazon).

This will in the long run drive a shakeout: I think that the vast majority of content companies are ill-suited to go direct-to-consumer. They have neither the expertise nor a sufficient library and content creation capability to actually hold onto hard-to-acquire customers in the long run; in other words, all of these streaming efforts are going to be a very expensive lesson in understanding comparative advantage.

In other words, the next five years are going to see an explosion in streaming offerings, and the five years after that a contraction. Disney has positioned itself well to be one of those left standing.

Since we are on the subject of streaming wars, I wanted to also link to a new interview with Jason Hirschhorn who lives to watch content and follow the streaming wars. In this podcast he covers how Netflix outsmarted everyone.

Have a great Sunday.

I am off to Nee York for the week.