Hey team,
Happy Monday.
Netflix lost more than 35% of their value on Wednesday, after announcing it had lost more than 200,000 subscribers in the first three months of the year and said it expects to lose 2 million more over the next quarter. The sharp drop wiped $50bn off Netflix’s value and comes as subscribers rethink their commitment to streaming services that grew their numbers sharply across Covid lockdowns. The market is also flooded with rivals, including Stan, Disney, Paramount and more seem to appear every day. Netflix stock, which was already down 40% for the year, has now dropped from $700 in November to $218.22 (at the time of writing this).
This is a sharp lesson in stock concentration or simply having your eggs all in one basket. Whilst the FAANG (Facebook, Apple, Amazon, Netflix and Google) index has been ever so popular, and rightly so considering the booming overall success of these companies. Diversification is undoubtedly key when it comes to where you stash your cash.
In the news: 5 ETFs to help you sleep at night
In this episode of Buy Hold Sell, I sat down with Livewire’s Ally Selby and the talented Felicity Thomas from Shaw and Partners to share our thoughts on three of the best set and forget ETFs so investors can rest easy at night. Click here to get our hot tips.
Upcoming events:
Sign up for our upcoming May events, covering money fundamentals, including – money mistakes, money mindset and investing. Click through to register and join live:
Event schedule and links to book here:
- Money mistakes to avoid – May 5, 12.30pm – 1.30pm
- GA Event: Money Mindset Hacks – May 09, 1:00pm – 2:00pm
- How to build a second income investing – May 26, 12.30pm – 1.30pm
- GA Event: How to Cut Your Tax Bill Before EOFY – June 8, 12:30pm – 1:30pm
- How to buy your dream home without a crippling mortgage – June 16, 12.30pm – 1.30pm
- Cryptocurrency investing 101 – July 7, 12.30pm – 1.30pm
- How to save more money faster – July 28, 12.30pm – 1.30pm
- Buy property the smart way in 2022 – August 18, 12.30pm – 1.30pm
Share market wrap
The S&P/ASX 200 on Thursday firmed within striking distance of last August’s record high, underpinned by a flurry of March-quarter updates. A better-than-expected start to the US earnings season has cushioned shares from the relentless surge in bond yields, however, an underwhelming result from Netflix proved expensive stocks that fail to beat consensus estimates will be duly punished.
Key sharemarket numbers:
- The ASX ‘All Ords’ (top 500 shares in Australia) finished the week 0.6% lower than last Friday, on 7,775.20 points.
- The US ‘S&P 500’ (Top 500 shares in America) finished the week -1.26% lower than last week, at 4,393.66 points.
- The US ‘Nasdaq’ (Top 2500+ mainly tech shares in America) finished the week -3.48 % lower than last week, at 13,174.65 points.
- The Global FTSE ‘All World’ index (largest 3100 companies in the world) finished the week 0.69% higher than last week (Friday AEDT), at 7,627.95
- The S&P Cryptocurrency ‘Mega Cap’ Index (tracking market value of Bitcoin and Ethereum) is currently at 4,528.18 for the month, down -9.07% for the year to date
Investment story of the week: Betmakers Technology Group Ltd (ASX: BET)
Betmakers Technology Group Ltd (BET), together with its subsidiaries, develops and provides software, data, and analytics products for the B2B wagering market in Australia. BET was up 21% on Thursday, on the back of the announcement that they are planning to run a new online wagering product across Australia and New Zealand. It’s expected to launch in the second half of 2022, and is a 10-year exclusive agreement to provide the venture’s platform technology and wagering solutions. The agreement will provide multiple revenue streams over its life and potentially culminate in more than $300 million of revenue. Getting to the nitty-gritty, Betmakers will receive a $2 million platform establishment fee, in addition to annual development fees which will ultimately represent 25% of the company’s net gaming revenue. There’s a lot promising news coming to light for BET.
Smart Money upside #65
Because people don’t often talk about the full ins and outs of their money, it’s hard to learn lessons from hearing what good and bad choices other people make. This story is from one of our clients to help you take your money game to the next level.
Numbers/Background
Individual; late 30’s, income ~$150k, total assets ~$360k saving~ $5k annually
Frustrations
- Information overload
- Feeling like it’s impossible to purchase a home due to rapid price increases
- Bad spending habits and an overall need to change
- Choosing between investing in shares and saving for a deposit
What they wanted from us / the advice process
- Clarity around purchasing a home
- Clear investment strategy for children in the future
What success looks like for them
- Purchasing a home
- Having savings
- Feeling comfortable
- Having a clear investment strategy set up for children
What money strategy they were following before we went through the planning process
No clear plan or strategy in place.
What money strategy do they choose to pursue from our planning work
Utilised our structured banking framework to plan out spending and stay on track with investments and savings goals.
Key benefits of going through the process
Support from an adviser to help me put in place a clear banking structure, provide advice and guidance on purchasing a home and set up my super with investments I’m comfortable with for the long term.
Value of advice after all advice fees year one: $53k
Year 20 upside after advice fees: $2.7m
If this story resonates and you want to chat about how to get these sorts of results, you can book an intro call here.
Giving update of the week
This week we’ve had the privilege of starting work with a bunch of new clients, and we’ve celebrated by providing 100 underprivileged people in Africa with 365 days of access to clean, llife-saving water. This is all part of our ongoing commitment to make a difference in the lives of our clients and simultaneously make an impact on our world through our partnership with B1G1 (Buy 1 Give 1). You can check out more information about our giving here.
Money Hack of the week: Why uncertainty should be your best friend.
How’s your tolerance for uncertainty? I had an eye-opening chat with Sarah Davidson about her experience with uncertainty and reframing this as an opportunity. We talked about why having firm plans leaves no room to accommodate new and exciting opportunities that might come your way. Check out our full chat here.
Money mistake of the week: When you don’t balance life and business.
You should never overlook your well-being to grow your business. Diem Fuggersberger and I recently talked about the importance of prioritising your well-being while building a business. It’s an eternal balancing act of your personal life and finances versus your time spent building your business’s future. But, when you’re at your best, your business is at its best. Check out our full chat here.
Jargon Buster of the Week: Guarantee (via Macquarie)
A guarantee is a non-cancellable indemnity bond, backed by an insurer. It offers investors the security that an investment will be repaid. A limited guarantee is when the amount the guarantor is responsible for is limited to a set sum or time frame. A non-limited guarantee is when the guarantor is obligated to repay all amounts due.
Podcast from last week: #165 Smart Money Challenge 6 – Setting achievable financial goals
This is episode number six of the Smart Money Challenge all about Setting achievable financial goals and how to set yourself up to make them happen.
In this episode, I talk through a goal-setting framework we used to guide people through the day in & day out, to help them to make better money decisions, and to motivate themselves with the goals that they have. As well as the process that they can go through to turn these goals into outcomes.
Be awesome,
Ben
PS: If you want a hand to get on the front foot with your money in 2021, check out our 45-minute one-on-one sessions here. We’re donating 100% of the money raised to charity, so you can up your money game and do something good on the planet at the same time.
Disclaimer:
I know you’re smarter than someone that would need me to write the words that come next, but our compliance peeps are real hard-asses so here we go… This information is not personal advice, poetry, or a map to where Jimmy Hoffa is buried. It may only be regarded as general advice, and definitely shouldn’t be considered something worthy of inclusion for Donna Hay’s next cookbook or the Archibald prize. This is actually just an email communication that has been sent to a bunch of people and doesn’t even have your name on it. Your personal objectives, needs or financial situation have not been considered when preparing this email, but I want you to know that I have spent a lot of time thinking about the Venn diagram intersection of poetry, landscaping, and essential oils – if you’re fascinated by this same phenomenon please reply so we can compare notes. You should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs, and if necessary, seek advice before acting on it. You should also consider other people when getting on and off public transport, smiling more, eating healthy, and listening to your mum when she tells you that you’ve been working too hard. Where the information relates to a financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product. Where the information relates to a hilarious joke I’ve made, you should consider belly laughing deeply. Worth noting also that past performance is not a reliable indicator of future performance when it comes to investments, and definitely not when it comes to the Wallabies. Financial services guide. All jokes aside and just to be clear, this information may only be regarded as general advice. That is, your personal objectives, needs or financial situations were not considered when preparing it. You should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs, and if necessary, seek advice before acting on it. Where the information relates to a financial product, you should obtain and consider the relevant product disclosure statement before making any decision to purchase that financial product. Past performance is not a reliable indicator of future performance.