How Lyft’s IPO Proves the Dominance of Amazon

  • Lyft recently filed their IPO prospectus, drawing attention to the 2019 Public Offering Class, which includes their rival, Uber
  • Lyft uses the cloud to support their ride-sharing platform and has gone all-in with AWS
  • The Cloud is growing increasingly important in determining the success of the companies that use it
  • Companies that offer cloud hosting services are growing quickly
  • Amazon is dominant in the cloud space, but Microsoft is catching up

Going Public: The 2019 IPO Class

Lyft filed for an IPO on March 1st, with a valuation ranging between $20 and $25 billion. With a mission to “improve people’s lives with the world’s best transportation”, the company wrote a $911M loss against $2.1B in revenue for 2018. However, they have more than doubled their revenue from their 2017 metric, so if they continue on that growth trajectory, their financials should look more promising.

Continue reading “How Lyft’s IPO Proves the Dominance of Amazon”

The Boeing Company: Keeping it Plane Simple

  • Boeing has been one of the “Darlings of the Dow” for a long time
  • The company has a lot of growth opportunities, both in the commercial plane space and the defense industry
  • The stock price has almost doubled over the past year, and the company actively buys back shares and pays out strong dividends
  • The space has several key players, but Boeing is continuing to gain ground on most of the competition
  • Geopolitical tensions could weigh down the company’s performance over time

On February 19th, 1982, the Boeing 757 flew for the first time. 37 years later, on February 19th, 2019, the company’s 787 hit 801 MPH, supported by a jet stream that pushed it to record-breaking speeds, helping it to move faster than the speed of sound. For comparison, the ordinary cruising speed is 561 MPH.

Boeing always seems to be going full-throttle ahead, 250 MPH faster than everyone else. They have been a force to be reckoned with for a long time, both in terms of innovation and market performance. The stock returned 11.5% over a very dismal 2018, and has already returned 30.3% YTD for 2019. It has provided key support to the Dow Jones Industrial Average index, serving as both a market and industry leader.

Continue reading “The Boeing Company: Keeping it Plane Simple”

Microsoft: Reaching for Infinity and Beyond

  • MSFT is an industry leader in software services, and has been a strong company for many years
  • They are allocating a large amount of resources to their cloud segment
  • The industry as a whole is constantly evolving, but could be prone to a slowdown if the economy contracts

Microsoft is one of the most well-known companies in the entire world. In a perpetual race against Apple and Amazon for “Most Valuable Company”, Microsoft has been able to make a name for themselves over the past 44 years based on their product line and their openness to growth and innovation.

Continue reading “Microsoft: Reaching for Infinity and Beyond”

The Key to High Returns: Ignoring all the Data

  • The economy and the stock market are two different entities, but the impact that one has on the other is extremely important
  • The stock market has trended upward since its December lows
  • The hard data shows slowdowns, consumer sentiment is waning, but the market continues higher
  • The market trends to the upside over time, and getting exposure to the positive drift is beneficial for portfolios.

Economic reports have been delayed. The government exited a 35 day shutdown a few weeks ago, and are expected to enter another one February 15th if things don’t get resolved. March 2nd is the final day to figure things out with China, or tariffs go up to 25%. To say that there is uncertainty would be an understatement.

Continue reading “The Key to High Returns: Ignoring all the Data”

The Fourth Estate: The Future of the Media Industry

  • “If the product is free, you are the product.”: Advertising dollars speak volumes, and data collection on consumers is driving the bottom line
  • The newspaper industry has experienced a contraction in advertising revenues, and have to find other sources of cash
  • Subscription services will become more prevalent over time
  • It is vital to community success and engagement that local newspapers remain afloat
  • Digital media companies have strong growth prospects

The newspaper industry has been undergoing an evolution, and the economic challenges that the industry faces have been well-documented over time. Employment in newsrooms has declined by 45% since 2004. BuzzFeed, Huffington Post, and Gannett all let go a percentage of their workforce in late January 2019. Vice Media announced that they are cutting 10% of their workforce on February 1st, and more companies are expected to follow suit. Gannett owns USA Today, among other circulations, and many local newspapers. The local newspapers in particular have been slammed over the past several years, and the most recent round of layoffs were just another slap in the face.

Continue reading “The Fourth Estate: The Future of the Media Industry”

The Overleveraged University: The Crisis In Higher Education

  • Both universities and their students are becoming increasingly more indebted
  • Public and private universities have different exposure risks, with public schools more reliant on tuition fees and private schools reliant on market returns.
  • Alternatives to traditional higher education are on the rise
  • The higher education industry is long overdue for an operational overhaul

The Debt Crisis: How Higher Education Operates

Universities and colleges for a long time, have operated on a very successful business model. They provide an incredible resource to each generation of students, enabling development from both a personal and professional perspective. They operate as non-profits and essentially have control over their own universe of supply and demand.

Continue reading “The Overleveraged University: The Crisis In Higher Education”

The Boy’s Club: Podcast

Wanted to jump back into the podcast world, since it’s been a few minutes since my last one. Also, wanted to provide some voice to the written word of my most recent blog.

Click Here to hear some more perspective, and as always, comments, feedback etc welcome and encouraged.

The Boy’s Club: Discussing Gender Disparity in the Financial Industry

  • The efforts that the industry has made to include female representation are very visible, but they do not appear to be enough
  • The number of females in top positions have contracted over the past year and there is a persistent pay gap
  • Women are underrepresented as fund managers, despite equal performance
  • Thought leadership is the most important asset a company can invest in, and the value stems from having diverse perspectives

Over ten years ago in regards to the Great Financial Crisis, Christine Lagarde, the current managing director and Chairwoman of the International Monetary Fund said that “if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today“. Her reasoning was the following:

Continue reading “The Boy’s Club: Discussing Gender Disparity in the Financial Industry”

Running Out of Gas: The Direction of the Auto Industry

  • The auto industry is showing signs of weakness, through compressed sales figures and job losses
  • Automakers didn’t pay enough attention to consumer demand for SUVs, and they have to be careful not to repeat that error with electric vehicles
  • There are several things disrupting the industry, such as autonomous vehicles, ride-sharing, and Tesla

The auto industry always seems to be a predictive measure of weakness in the economy. If auto sales fall, we can use that to project consumer spending, which represents 2/3rds of the overall economy.  However, auto stocks have moved downward the past year, despite ideal economic conditions. There has been a slump in sales figures, even with a boost from fleet sales, especially across American automakers. There are several reasons for this decline, including quantitative tightening, job losses, heightened competition, weakness overseas, and the trade war.

Continue reading “Running Out of Gas: The Direction of the Auto Industry”

The Power Of Monopoly: PG&E’s Plan To Keep The Lights On

  • PG&E is currently under investigation for their potential involvement in several wildfires, including the costliest one of 2018.
  • The company cannot afford the liabilities from the fires and are in talks of declaring bankruptcy.
  • PG&E got their rating cut to junk by S&P, and are under examination by the other rating agencies.
  • The company is 84% institutionally owned, and several of the top hedge funds have increased their stake.

News about PG&E has been almost impossible to avoid recently. They are under investigation for their role in several wildfires throughout California, most notably the Camp Fire, which resulted in 86 deaths and was the costliest natural disaster of 2018. For all of the fires, PG&E could face liabilities that total a minimum of $30 billion.

Continue reading “The Power Of Monopoly: PG&E’s Plan To Keep The Lights On”