Rupert Nicholson

Long-term horizon, portfolio strategy, tech, oil & gas
Rupert Nicholson
Long-term horizon, portfolio strategy, tech, oil & gas
Contributor since: 2012
Company: Georgetown University Student Investment Fund
Well Popcorn Time's TV Shows are back up. I simply cannot agree with you that those who have pirated previously are suddenly going to start paying for a service rather than just going to dozens of other easy to use sources. Most are much easier to use than Netflix as you don't have to signup for anything or put in payment details. I simply think your analysis is very flawed.
Its already backup. The TV shows are working on the app again and the movies are up on the cloud and online. -> look at the latest tweet. I'm just saying it is very naive of you to believe this will effect Netflix's bottom line at all when a) it is already backup and b) there is zero evidence they will go to Netflix and not to numerous other easy to use streaming sites and apps.
I don't think you really understand the coders behind popcorn time. These are the same kind of people who are Anonymous. They are ghosts and incredible coders. Popcorn Time went down due to an internal dispute not because they have been caught or anything. It has already been relaunched and they have published a statement saying everything will be back up and running in the next couple of days. I think it is very naive to suggest they will be down long enough for Netflix to actually profit through this situation.
Paulo Popcorn Time is already back. I doubt it will go down for a significant period of time. Netflix certainly hasn't lost a major competitor.
Michael, I understand what you're saying. I'm not saying its wrong. The price of oil might well go up spurred by demand, indeed I account for growing demand in my analysis. The point of the article was only to show a note of caution. I do not believe I present a bear case but rather a case that oil is fairly valued at current prices. I might well be wrong. Oil could be driven higher by speculation. I simply believe that there are many other commodities I would rather invest in first.
Michael all I am saying is Bloomberg is the industry standard for reliability in finance. Now you might not believe them but I personally would trust them significantly more than OPEC. Especially after OPECs Secretary General has claimed oil could go as high as $200 a barrel.
Michael you are using a biased source of information. Bloomberg is governed by much stricter reporting standards than OPEC yet you seem to trust OPEC more. OPEC has an incentive not to report complete figures, Bloomberg doesn't. Also, Bloomberg gave concrete figures which are easily verifiable by a simple Google search. I really advise you to check the facts.
Michael that's not true at all. Also, I'm not short on oil. I gave a range which suggests it is fairly valued around $55. I hold no position in oil currently.
Michael. Hedge fund managers have the largest short position they have had for a while so with respect I disagree. The smart investors such as Goldman have all lowered their oil price targets to mid 50s. There are plenty of companies on the other side of those positions and, honestly, I would rather put my money with Goldman than speculators.
Leverage this is the most sensible comment I have seen on this article. It is widely agreed that US oil production becomes unprofitable at $40. Therefore, I expect it to dip below $40 to $35 or maybe $30 before it becomes profitable to speculate. Right now the supply is very saturated. Btw, the suggestion that oil could go to $200 is absurd. Also, the only way it could get back to $100 is through wild speculation. I laughed when I read this article
There is a humongeous glut of supply in oil right now. This article is unbelievably misguided. The rally is most likely due to speculation as it is certainly not grounded in fact. The oil rigs which have been put aside for now are almost all smaller rigs. The fact that the author predicts a 125% upside is one of the worst prediction I've ever seen. Btw, only at below $40 does oil become an unprofitable venture for the US producers. The glut in supply from new markets such as US (and possibly Canada) is worrying. Also, the author seems to gloss over the huge production market of Venezuela. The government in in serious trouble there are PDSVA's production is at an all time low. However, what happens when that government leaves and private business moves in? In a couple of years or so, this market (largest oil reserves in the world) might well be exploited again just fueling the glut. The only people who have said oil will go back to $100 or maybe even $200 (totally ludicrous) are those who have a vested interest in the price being high.
Buyout of Netflix is just absurd at anything over $125, the cash flows just don't justify it. EPS has to grow by more than 25% over the next 5 years, plus long term growth of greater than 8% to even get to a fair value of $150. Its utterly rediculous the current momentum wave Netflix is riding.
Bill just a reminder. You were an ardent bear on Netflix before January. I could show you countless articles you wrote arguing people not to invest in Netflix when it was ~$90 a share. So it is the height of hypocrisy for you to criticize the writer of this article for having the same point of view. Also, I was a bull for Netflix from $65 right up to $350 and I was criticized the whole way through, sometimes by people on this site including you and boris. Now I am short Netflix. I don't necessarily have the same arguments as Boris, but it seems clear to me that the stock is ludicrously overvalued and just riding a wave of momentum. Btw, Icahn might well have already dumped the last 4.5% of his shares. The point is he doesn't need to disclose now. So your whole Icahn argument is mute, as he left himself with less than 5%, most likely so he could withdraw the rest of his position with little problems.
Any stock can be bought because it is undervalued based on its intrinsic value. The first paragraph in the comment above, is perfectly relevant but its simply not what you said in the first place. I completely respect your point of view that my bottom out argument could be wrong, I disagree (obviously). What I think is absurd about your original comment is that I wasn't arguing for dividend or EPS growth, I am simply arguing that its intrinsic value is above its current share price. Might I also remind you that I factor in negative EPS growth in my intrinsic value calculation, so I expected EPS to shrink rather than grow. Also, I still believe the dividend yield is of only marginal importance to my argument, it is not remotely relevant to the underlying thesis.
Do you have any evidence to support what you just said?
Thanks for the comment! Totally agree!
Not arguing for an investment for dividend, I attached it as a side note so I don't see that as a relevant comment. Also, I factored in 0% EPS growth when generating my intrinsic value. Not every good investment has to be due to good EPS growth. Look at what happened with Nokia when it was $2.60, it went up to $4.00 before MSFT announced an acquisition deal. Why? Not because it experience a sudden surge in earnings but rather because it had been sold off too much and the price was depressed below its intrinsic value. That is what I am arguing happened with Exelon. If you had read the article you would realized none of your points are remotely relevant.
And if Netflix drops a lot then my thesis stands. So there is absolutely no need to include a buyout paragraph, if the buyout amount will be less than $142 a share. Therefore, a buyout is irrelevant to my analysis. If you think one of them would be interested in buying out Netflix for more, then please present me with the numbers they would be using to value it at. I think it ludicrous to suggest that they would believe earnings would grow in excess of 20%, with a long term growth rate of more than 7%.
And who would be interested in buying out Netflix? Once you supply me with a name and their 'reason' for buying out Netflix, I will look into and get back to you. I see zero companies out there right now that would be remotely interested in buying it at its current valuation, or even with 50% shaved off its current valuation. Please correct me if I'm wrong.
I believe a buyout of Netflix is totally unrealistic, but thank you for sharing your point of view. Also, I am more than happy to change my mind if you present some evidence as to why you think a buyout is even plausible.
Thanks for the comment! Yes I'm very comfortable with my short position after icahn dumped his shares. My only worry is the high volatility generated by the announcement. Hopefully the share price will settle down as the day goes on.
Where did you get that from?
I'm not talking about just putlocker, I'm talking about streaming illegally in general, of which putlocker is a small part. Also, I've already told you that statistics you get online are not likely to be reliable and give you a good picture of what is going on, due to a natural bias of people saying they are watching shows legally. Also, I have not even mentioned the influence that Amazon prime free viewing is starting to have on college students. Many college students use Amazon Prime for its free shipping, and guess what, it offers free streaming to these people, with a fairly large amount of content. Admittedly, it does have less content than Netflix, but it is free for those with Amazon Prime already.
Yes well I can use the same set of statistics and skew it so it favors Netflix or Putlocker. The point is statistics do not always give a good picture of what is going on, especially when it involves streaming illegally. People will not often admit they stream illegally, especially not when asked about it by someone they have just met conducting a survey. They are also not likely to put info onto social networks and the web which shows them illegally streaming. Therefore, I don't doubt that what you have said is true, but it is simply not a proper portrayal of what is going on in reality. I actually experience the world of a college student every day, you don't. I actually have hundreds of friends who are college students, again you don't. Consequently, I would say I'm rather more informed of this from you, as you are getting your information from a secondary or tertiary source, whereas I am the primary source of my info.
i believe the earnings are already priced in, plus if the stock goes up more than 20% I am quite comfortable doubling my short position.
Tvaddic, I can guarantee you many more college kids are watching these shows on hosting sites like putlocker, where you can stream them, and dont have to wait for a download. I am in college right now, and i would say maybe 95% of my friends use sites such as putlocker rather than netflix.
completely agree, I am shorting Netflix on the basis a selloff is coming.
put the numbers into a dcf with a fair discount rate (11-12%), and a growth rate of around (15-20%-analysts estimates for sales growth), and NFLX's intrinsic value range is significantly below $240 the number stated in this article. apart from this, huge short interest building up in netflix, and youre deluding yourself if you think this will lead to a short squeeze. no it is rather because the stock is so grossly overvalued. but its fine, dont take my advice, just like many people didnt take my advice in buying it at $70.
and as of today, navistar is up more than 60% on the share price I recommended it at
Shorted this stock yesterday, $330 is a rediculous price. Everyone on this site ridiculed me when I recommended buying Netflix for $70 in an article I wrote. Now everyone is defending it at $330??? I just sold it for a 350% profit and now I am shorting it.
No, there is just categorical proof from Rusal that consumption is higher than production. Unless you think Rusal is lying, inventories must be decreasing to satisfy the excess consumption.
Absolutely not true. Take a look at the margins why don't you. They have stayed constant as the price of aluminium have dropped, they actually improved between the last quarter of 2012 and the first quarter of 2013