#TrendingNow

So this is a bit of a divergence for me posting.  I am constantly awestruck by news I find on my newsfeeds, TV and Investment Newspapers.   Usually not in a good way.  Most of the time I do not find trending topics in the news to be “post worthy” but this week I found three which caught my attention.

1. #Bailout #Millennials #StudentDebt

Survey Says: Nearly 25% (24% to be exact) of all working millennials receive help from their parents for paying bills.

Interestingly, nearly 80% of the working millennials receiving help do not live at home.  My first inclination is the parents are helping to pay for their millennial children’s student-loan debt.  But according to the survey, the breakdown was quite different.

• 53% Cell phone
• 31% Car Insurance
• 30% Car Payments
• 30% Utilities
• 27% Rent or Mortgage

And yes, these totals add up to 171.  So parents, on average, are bailing out for more than one category.

The experts say that the primary reason for this is the sky-rocketing cost of a college education and the increasing reliance on financing this cost through student-loans.  The statistics seem to support this with over 17 million millennial borrowers (under the age of 30) with a total of $376 Billion in debt.  That translates into roughly $22,000 of student-loan debt per millennial.

That is a lot of money to owe when just starting out in the job market. Obviously, by looking at the categories, there is a lot of additional spending going on.

2. #Drunkshopping #Generation-x

Americans are spending billions of dollars shopping while drunk.

Note: I have nothing relatable to say about this.  Not that my wife and I don’t drink, we do, but I can’t say that we ever do anything other than socialize and watch movies when drinking and we don’t frequent bars.

From a Finder.com survey:

• Nearly half of American adults (46%) who drink alcohol regularly admit to making a purchase while under the influence — this translates to an estimated 68 million people, drawn from our study of 2,000 American adults.
• The trend seems to be rising.
• Americans have spent an estimated $30.43 billion on these spontaneous drunk purchases, or about $447.57 per person in 2018. Compare this to just $206 spent on drunk purchases in 2017.

I wonder if this past election and results have any correlation to this?

By the numbers:

• 60.27% of American adults — or an estimated 148 million of us — drink an average 7 alcoholic beverages weekly.
• We spend $5.4 billion on alcoholic beverages a week — an average $36.56 per person.
• The most popular alcoholic drink is beer, with 39.53% of American adults drinking an average 5 beers weekly.
• Men are twice as likely as women to consume beer, with an estimated 53.4% of men enjoying a beer, compared with only 26.48% of women who pick up a can weekly.
• Wine is a woman’s drink of choice, with 37.54% of women enjoying an average 2 glasses a week.
• Millennials are twice as likely as Gen Xers and baby boomers combined to enjoy a glass of moonshine or other liquor.
• Men are twice as likely as women to consume spirits, with an estimated 36.49% of men regularly boozing up on liquor compared with 18.43% of women.

Generational Breakdown:

• Gen Xers spend the most on drunk purchases, averaging $738.87 per haul — more than triple the amount ($206.11) that millennials spent.
• While Gen Xers spend more, millennials are more likely to spontaneously indulge on a spree their next night out, with 61.07% of millennials who drink regularly admitting to drunk shopping. Compared that to Gen Xers at 51.17% and baby boomers at 31.29%.
• On an average week, a Gen Xer spends $36.91 on alcohol, compared with $59.28 a week for millennials. That’s a whopping $1,163.24 extra that millennials spend on booze each year!

Gender breakdown:

• Men spend almost double that of women when under the influence, averaging a total $564.51 per spend, compared to women, who spend an average $282.65. Compounding this, men are also more likely to buy while boozed up, with 48.19% of men who drink regularly admitting to a drunken shop, compared with the 41.36% of women who do so.
• On an average week, men spend an estimated $44.17 on alcohol — much higher than the average $26.77 women spend to drink. That’s an extra $904.80 that men spend on booze than women in a year!
• Spirits and liquor appear more popular with men than women. Men are four times more likely (3.30%) to enjoy a sneaky moonshine than their female counterparts (0.68%). And it’s nearly twice as likely that men (8.45%) will consume cider than women (4.36%).

Marital Status Breakdown:

• Married Americans spend twice as much on spontaneous drunk purchases than their divorced counterparts, with an average $327.62 spent in total compared to a divorcee’s $147.71.

Probably because alimony is so expensive . . .

• However, singletons are the most likely to make a purchase while drunk: 55.78% of single people admitting to making a purchase while under the influence, compared with only 43.63% of married drinkers.

3.  #Bots #Hashtags #Fakenews

Bots are taking over social media and the online world.

• Studies have found that companies are using bots to promote hashtags and trends on twitter and other social media.
• Bots not only promote campaigns but they are also used for attracting and interacting with customers.
• More and more companies are spending money on these bots and paying for promotion.  Often exceeding social media platforms policies.

Trending works by not only tracking the frequency of hashtags in posts but also by the speed or velocity of the hashtag topic appearing in posts.

Again, this is a topic that I cannot relate to.  Yes I am using hashtags, but I neither paid for nor got paid to use them.  They are provide for your entertainment free of charge.

On a related note:

I wonder how many companies use this tactic to attract drunk online shoppers?

 

Bear With The Bitcoin

Just how crazy is this Bitcoin craze?

1. Shares of The Crypto Company (CRCW) have surged more than 1,800% in the past month and 17,000% in the past three months, as investors and traders have bid up the price of bitcoin (XBT) higher and higher. The Crytpo Company describes itself as a business that “offers a portfolio of digital assets, technologies, and consulting services to the blockchain and cryptocurrency markets” with plans for a “rollout of a full scale, high frequency cryptocurrency trading floor.”
   The SEC started an investigating and suspended trading on their stock.
2. A small financial tech company that just went public called LongFin (LFIN) has skyrocketed from a low of $4.69 a share in the past week to a high of $142.82 after it announced it was buying a blockchain microlending company named Ziddu.com
3. And then there’s Riot Blockchain (RIOT), a company that up until recently was a biotech firm and has decided to get into the crypto business. They added “blockchain” to the company name and now its stock is up more than 300% in the past month.

So, maybe I should change my blog’s name to Bear with the Bitcoin and my tag line to An Alternative Cryptocurrency Blog!

My viewership and followers count could literally explode!

Hopefully WordPress will not suspend my account….

But exactly what is this Bitcoin and cryptocurrency thing anyway and is there a safe way to invest in it?

My wife calls it Monopoly Money because it is not backed by anything like gold or a government.

And in that context, she is correct. Bitcoin and cryptocurrency is a worldwide payment system.  Bitcoin is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer and transactions take place between users directly through the use of cryptography, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. This is where blockchain technology comes into play.

What is Blockchain?

Blockchain, the tech behind Bitcoin, is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. The Harvard Business Review describes it as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority. This makes blockchains potentially suitable for the recording of events, medical records, and other records management activities, such as identity management, transaction processing, documenting provenance, food traceability or voting.

All of these computational transactions require a lot of processing power. But more on that later.

Investing in Bitcoin:

For me personally, I first heard about Bitcoin back in the spring of 2016. Back then it was less than $500 a coin and a coworker of mine was telling me all about how he was buying some coins in anticipation of the upcoming split or fork in the code. Last time this happened, he said the price went way up. He tried to convince me how easy it was to invest. Just open a virtual wallet on Coinbase, link it to your bank and fund the wallet with some bitcoin. The security person in me said no way am I putting and linking my bank account money in some unregulated international open (somewhat shadowy) platform.

Now Bitcoin is over $16,000 per coin as of this writing.

UPDATE: OK, it was over $16,000 but has since lost about a third of its value in less than a week because other well-known backers of Bitcoin have recently moved their stash to Bitcoin:Cash which is known as a hard fork and a separate cryptocurrency / blockchain not recognized by Bitcoin. That and many online platforms like Coinbase are now accepting other cryptocurrencies. But still well north of $10,000 per coin.

Not investing in actual Bitcoins is perhaps my biggest missed opportunity . . .

And yet, there have been a whole host of security breaches and entire exchanges shut down because they were hacked and millions of bitcoins were stolen.

Still a risky trading platform. IF you are set on buying any crypto-currency, I would highly recommend buying a physical encrypted hardware wallet to secure your PII and money.

GBTC:

And yet, I have not been completely out of the “bitcoin” craze. I admit, from time to time I have bought one share of GBTC (Bitcoin Investment Trust) stock with a wide trailing stop whenever I was in. I was stopped out the first day of the latest pull back this past week, but not before more than doubling my money. So all in all I can’t complain.

Note: This is still a risky way to invest in Bitcoin (any stock or investment vehicle that can lose 1/3 of its value in less than a week is definitely risky) and yes, it limits you to investing in just Bitcoin. That is why I definitely had a trailing stop on this bugger to protect my losses and gains.

Another way to invest now is in the futures market through your broker. I find it interesting that many big financial names were calling the Bitcoin craze a bubble, or even not a real currency, and even worse, a type of Ponzi scheme; and yet, they feel the need to get in on the action by allowing trading.

Blockchain by nature eliminates the middle man and any controlling financial institution, so guess who felt left out of all the action….

Then of course, one could also invest in the crypto craze by becoming a miner. Miners are the people / machines in the peer-to-peer network which validate the blockchain transactions. Most miners get paid a small fraction of which ever cryptocurrency they are mining for each successful transaction they complete. The more machines you have and more computing power you have, the more transactions you can do, and, in theory the more money you can make.

There are a whole host of articles such as this one, and this one, which highlight just how much this craze has taken off.

One Consequence:

The world-wide power consumption dedicated just to mining is huge.
And so is the quest for more, affordable, power.
So that got me thinking about another possible investment strategy, loosely based on the blockchain craze.

Power.

Here one usually has two choices. Make your use and consumption of power more efficient or buy more.

DPW is developing and marketing an energy efficient power system for mining computers and datacenters. Their stock has seen similar hype action as those of Bitcoin and GBTC. Still quite risky in my opinion.

A potentially less risky investment strategy is to invest in companies or ETF’s specific to the energy sector.

Miners have already sought out remote locations with cheap hydro-electric power. One could invest in a utility such as POR which runs hydro-electric plants or one could invest in energy companies involved with supply side of generating electric power such as coal.

Datacenters:

Entire datacenters dedicated entirely to the mining of cryptocurrency are being built around the world.

China and Japan are the largest areas of miners and entire datacenters dedicated to mining activities.

In a way, I have already been investing in this indirectly due to The Donald and his tax reform policies with XLE. But BTU and KOL would be viable alternatives as well.

To me, this is a far less risky investment vehicle than trying to time the ups and downs of hyped stocks and currencies, provide potential income (dividends) and are influenced by other stimuli such as tax reform.

The Donald and Tax Reform:

Speaking of The Donald and Tax Reform, I have also put together a list of the most commonly referenced companies expected to benefit from tax reform, re-patriotization of overseas cash and stock buybacks on the right sidebar.

As always, any stock, ETF or fund mentioned is merely a suggestion and IMHO worthy of additional research on your part to see if it fits your investment profile and risk tolerance.

Hope everyone has a safe and happy holiday season.

The Amazon Effect

Amazon is, and has been, transforming the way we do business.  They have been doing this for years.  At the core of this transformation is what I will say is the Online World.  Yes it is a generalization, but from being able to buy books online to a cloud service provider to a mobile payment platform and even a one click buy it now system to most recently high profile deals with NIKE, SEARS, and Wholefoods; Amazon is transforming the way we do business from traditional brick and mortar to online.

According to Millennial Marketing, Amazon rates highest in satisfaction and experience not only with Millennials, but across other generations because of “its consistent ability to reduce friction in the consumer journey and stay at the forefront of market innovation.”

It even beats out other brand names such as Apple and Netflix in customer satisfaction and both Apple and Netflix do an excellent job with online marketing and innovation.

And how has practically the whole retail sector, and investors, reacted?

The retail sector has taken a nose dive.  Both investors and publicly traded companies have stuck their heads in the ground and proclaimed that Amazon is taking over the world and the end is near.

Grocery stores such as Kroger and even Walmart took a dive when Amazon bought Whole Foods.

Blue Apron IPO took a beating because Amazon now has a potentially huge food delivery network.

Home Depot and other similar stores took a dive when Amazon agreed to sell SEARS Appliances.

Even NIKE has agreed to add Amazon as a delivery channel for their product.  But NIKE is smarter than some of the other retailers.  Part of their agreement is for Amazon to crack down on fake NIKE knock offs.  Not only do these cheap imitators take revenue away from NIKE, but they also damage the NIKE Brand and the NIKE reputation.  So the NIKE deal with Amazon is actually a good thing for them.

Home Depot does sell appliances.  So does Lowes and Best Buy.  HHGregg went out of business because they failed to adapt and could not compete.  But stores like Home Depot and Best Buy are more than just appliances and they happen to have good online presence and customer loyalty.  A fellow blogger recently wrote about this here.  Check it out.

I think the entire retail sector has over reacted and the recent Amazon effect on the retail industry has created some good potential bargains.

The key to retail success today is how well do you market to and retain the mobile online consumer?

A company basically has three options.

• Agree to be bought out by Amazon.
• Develop a successful one stop shop and buy mobile campaign and customer loyalty program similar to Amazon.
• Or join Amazon to make your product and your brand stronger and more available to the online world making it easier to buy.

I’ve already mentioned how NIKE has taken advantage of Amazon.  Here is another company which I have written about in the past and has done remarkably well recently.

GRUBHUB.

They make online ordering, and reordering, quick, simple and easy.  It fits the millennial mobile mode of online shopping perfectly.

However, on the surface, their business could appear to be threatened by Amazons move into the food and food delivery business much like Blue Aprons.   But they too have “joined” Amazon in a very interesting way.

You can use Alexa to order food from GRUBHUB.  They have taken advantage of the Amazon effect and incorporated it into their business model with hands free ordering.   This is not without possible risk.

Amazon has been accused of poaching sales from retailers.

“A study by Upstream Commerce, a retail intelligence firm that tracks pricing, suggests that Amazon will use the pricing data from outside merchants who sell through it to ultimately compete with them.  In women’s apparel, 25 percent of the top products initially offered by marketplace vendors were sold by Amazon within 12 weeks, according to the report.”

Other retailers have directly and indirectly acknowledge “competition” as a future risk and as a result, many good quarterly reports have sent stock prices down instead of up solely because of this “competition” in the market.

GRUBHUB reports this week.  They had an outstanding report three months ago.  It will be interesting to see if the Amazon effect is viewed as a boost or a bust for their business.

Disclaimer:  This post is meant for informational and conversational purposes only.  It should not be viewed as a recommendation to buy a particular stock or fund.  As always, please do your own additional research before buying stocks.

Will Prime Day Be A Good Day For Amazon Stock?

What is Prime Day?

Amazon started Prime Day in 2015.  It is typically a one day special event of deals and discounts on just about everything available to amazon prime members. This year, It will be held July 11th.

However, as it is with most special commercial celebrations, and yes – Prime Day was started to celebrate the anniversary of Amazon, this year Amazon Prime Day starts at 6pm the day before, July 10th.

Of course the real reason for Prime Day is to generate more Prime memberships, to build a base of consistently returning customers and, therefore, reoccurring revenue. Amazon is even expanding their event to more international customers to the count of 13 countries around the world.
Many consumers will use this day to test Amazon’s Prime service, and many of those customers will remain Prime members once their trial membership is done.

Studies have shown that Prime customers spend more than twice what nonmembers do, so it’s no wonder Amazon is trying to spread the Prime love as much as it can.

I’m sure Jeff Bezos would say it is a “Win + Win” deal.

How popular is it really?

Amazon doesn’t disclose precise numbers, but some analysts estimate that Prime Day 2016 may have generated $525 million in sales for Amazon, up 26 percent from Amazon’s projected sales of $415 million in 2015.

According to Amazon, the company sold more than 90,000 TVs, over 1 million pairs of shoes, 200,000+ headphones, 23,000+ iRobot Roombas, and more than 14,000 Lenovo laptops on Prime Day alone. That beats the number of sales the retailer generated on Black Friday, which for most retailers is considered to be the biggest shopping day of the year.

How easy is it to find deals, shop and buy?

This year, with the added global access and even greater push for trial access to Prime, the Amazon App (which is always free) and Amazon gadgets (Echo – Echo Dot w/Alexa, Kindle, Audible, Dash, etc) there promises to be yet more Prime Day records broken. Amazon will be running specials not only online but through their mobile channels (Echo, Kindle, Audible) with specific deals targeted for users of these devices.

How easy is it? Just ask Jeff Bezos . . .

Just kidding, but it is getting easier and easier to purchase not only what you need for day to day living but for all those impulsive moments as well.

The power of ecommerce has even forced the worlds largest sport and leisure shoe manufacturer, NIKE, to re-think their strategy and start selling directly to consumers thru Amazon and Instagram. It’s an online world and most consumers have mobile devices which they care with them for instant online access.

Mobile ecommerce only makes sense.

I wonder if NIKE will be “online” in time for Prime Day? As of this writing (July 4th) I did not see their direct link listed on Amazon yet.

Are there Prime Day issues?

Yes, with this popularity there have been issues with finding good deals on products you actually want as well as general supply and demand. There have been many instances of consumers complaining that many of the special deals are not always on things they want, or are of cheaper quality than they expect, and for the items they are searching for, difficult to find and then when they do find them the deal is either over or sold out.

This year Amazon is helping you out by suggesting to download their app from which you can look up the schedule of daily deals and place a watch on the ones you want. This way the app will alert you when the special is about to start.

You can even download an Amazon Assistant to your desktop to help you stay up to date on your wish lists and orders.

How does Amazon stock react to Prime Day?

This one is a bit more difficult to answer. For one, this is just the third year that Amazon has hosted Prime Day. And two data points, or data sets, does not a pattern make – other than a straight line.
However, in 2015 the stock price increased the week before and kept increasing the week after.

In 2016, the stock price increased the week before but then went down the following weeks.

So what will happen this year?

Lately tech stocks, including Amazon, have been beaten down by the market. Will Amazon’s stock price continue its downward trend or will prime day provide the opportunity for investors to look at Amazon stock as another online bargain and reverse the trend?

My personal opinion is that Amazon, as well as many other tech stocks, has a bit more to fall. There may be a few fake reversals but to date the stock is only down 5%. Hardly the correction needed to inspire investors to scoop up a bargain.

What are your thoughts?

EA vs ATVI and Options

A gaming colleague of mine at work asked me this question the other day.
Which is the better stock, EA or ATVI?

He is a gamer.  Not and investor.  But that does not prevent him from asking very interesting questions.

Gaming wise, I like many of the products both companies have.  Both are readily expanding their online and mobile business and EA has been developing more and more eSports related opportunities than ATVI.  IMHO, eSports gaming and competition is going to be big business.  EA also has the Star Wars branded games that ATVI does not.

Value and management wise, I think EA is better.

Chart wise, I find both intriguing.  ATVI could be a good reversal candidate.

EA has shown better strength and is in the process of staging a breakout after a consolidation since last October.  This breakout could very well be in anticipation of earning.  EA reports January 31 AMC.  ATVI reports February 9 AMC.

Option wise, I like ATVI better.  If EA reports well, there is not only more time with the February 17 options but also a lot more interest which could drive up ATVI before they report.

What do you, think?  EA or ATVI?

OPTION Update:

Since this is the end of the month and I am most likely going to wait and see what EA does, here is my Option activity and accounting for the Month of January.

Stock	Cost	Sold	Gain/Loss
GOOGL	410	756-102.5	243.5
MSFT	336	456	120
MS	105	180	75
DIS	306	TBD	TBD
PROFIT / LOSS			438.5

My biggest mistake (I actually have two) was I held on to one of my four call options on GOOGL through earnings.    I was really on the fence regarding Google but when it started make its move I bought four to take advantage of the pre report hype.   Very much a buy the rumor sell the news strategy.   I have come to use this strategy quite a bit during earnings season.

Of the two, my confidence level was good only for MSFT.  I for one see the growth of their AZURE cloud solutions on a daily basis.  So I let MSFT ride through earnings and sold all but 1 of GOOGL (just in case if I was wrong).

That lonely call expired worthless.

MS I bought when it hit the lower Bollinger band support strictly for the bounce.

My second mistake (sort-of) was I a bit too quick on the trigger closing out MSFT when it dipped early morning which made me miss out on some later gains.  But hey.  A profit is a profit and I can’t complain. . . much.

I’m still holding the February 17 DIS 110 Call Options.

Until next time Happy Trading.