Madness:

Cramer Thinks Netflix’s price bump means Amazon, Apple’s stocks are bargains

Saw that dumb headline and I couldn’t believe it. The FANG pumper is at it again.

“Every month I pay Apple to back up my photos and insure my phones. Don’t you? Every month I pay [for] Apple Music,” Cramer said. These are services that will decline in cost rapidly if Cramer took an economics class in high school. Its a consumer attitude like Cramer’s that makes me shake my head. Why should consumers give in? Why should someone give toxic advice to accept whatever the vendor charges. You don’t say, company X did this therefore company Y is this. Netflix created value, and is taking a RISK in raising prices. Price wars don’t happen in the opposite direction. Soon, users of NFLX will flock to Hulu and networks can drop prices on their streaming service or add package deals.

As for the stock, all I see here is Cramer being late to yet another rally, a relief rally at that. With earnings a few days from here, I’d stay far away from NFLX since rallies like these tend to have the price increase already baked in, and if they disappoint on the conference call, then the downside is much more powerful.

As for the other FANGs… AAPL is fat, and will look attractive when it breaks 10-15% from its low of 142. FB trying to be a hardware company makes me puke. And Google, is basically a utility stock, quite boring and probably not worth trading long or short.

The real winners will be content makers, since now those with pure talent (a rare and valuable intangible asset) will be in such high demand services like NFLX will just dump money in their lap. We simply have peaked in the streaming service market, and though it will continue to prosper, its growth and popularity will normalize.

One thought on “Madness:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s