Your Guess Is as Good as Ours!

Risk Hedge

The Industry for Those Who Dream Only of Money

Stephen McBride is the editor of RiskHedge Report — a stock analysis company. You know the kind of thing: a must-read website (used to be a newsletter) for people who are bigtime stock traders who are inexplicably not rich. How could following widely circulated tips not be a foolproof way to beat the competition?

McBride is such a successful stock trader that he is the editor of the modern equivalent of a tip sheet and a writer for another magazine of the inexplicitly non-rich, Forbes.

Netflix Is Shockingly Not a Good Investment Anymore

Thus, you might not be surprised when McBride reported, Netflix’s Worst Nightmare Is Coming True. I read the article because I thought McBride might have something to say about the increasing cost of bandwidth. But no, his point was that you shouldn’t buy Netflix for the same reason you shouldn’t by IBM: it seems to have peaked in its current state.

I don’t doubt him. This is the reason I don’t trade stocks: by the time I hear about a good company, everyone else knows. Netflix has been streaming video since 2007. And that is when the company really started raking in the money.

Disney Will Destroy Netflix

McBride’s main point is that Netflix is now getting major competition. So it’s dead. The problem is that Netflix has had competition since, well, 2007. Like Hulu. And Amazon Prime has been nipping at Netflix’s heals for years.

The big change is that Disney is coming out with a streaming system, Disney+, next year. (McBride knows it will be successful because he has a child so McBride will be Disney+.) Disney is planning to pull all of its content off Netflix at that time. That will cost Disney $300 million per year.

More Like Consumers’ Worst Nightmare Than Netflix’s

This move will require most people who want to keep streaming Disney films to buy Disney+. But if they want to continue to watch what are mostly exceptional Netflix-original shows and films, they will still need to continue their Netflix subscriptions. Most people will rightly blame Disney’s usual greed.

Side Note: Porno Mickey Is Coming!

McBride also claimed that Disney still had exclusive use of Mickey Mouse. Either he doesn’t realize that this annoying rodent goes out of copyright in 4 years, or he thinks that Disney will again be able to get the copyright term extended. I’m highly skeptical. At 95 years, no one without a major financial stake can think that a longer term will do anything but hurt creative work.

McBride’s Worthless Data

Netflix NASDAQ

But McBride’s only real data is that Netflix stock went up at a very high rate for the first 6 months of this year and has since gone down. Now it is back to its trend line from 2014 until the beginning of 2018. In other words, his big scoop is… nothing.

McBride Might Have Been Right!

It is clear that the only purpose of this article is to allow McBride to brag about what an awesome company RiskHedge Report is since it has been skeptical (for reasons so obvious I know them) for some time. If McBride were really secure, he would have waited another 6 months to publish this when the data would be clear. Right now they aren’t at all. So I suspect that he published now because he knew there was roughly a 50 percent chance that in that time the data would show the opposite.

In the article, he also recommends that people buy Disney stock because of Disney+. But I’ve already mentioned a couple of reasons to be skeptical. Another one is that Disney has never run a streaming company. This could all be a catastrophe. But what do I know? Maybe all start-ups prefer to start each year $300 million in the hole.

Stock Analysts Aren’t Worth Much for Society

My point in discussing this is not to say that Netflix is a better investment than Disney. Or vice versa. Rather it is to note that places like RiskHedge Report are more dream factories than Disney and Netflix. The argument by Stephan McBride is so facile that only someone desperate to believe would.

And on a broader level, how is any of this good for our society? This isn’t a situation where Disney+ will make costs go down. Oh sure, maybe each one will cost less than they now do. But most consumers will end up paying slightly less than twice what they now pay. And it’s all because $12.5 billion per year in net profits just isn’t enough for Disney. And note, they make so much because they’ve been so successful in manipulating the government into forcing consumers to pay much more by enacting unconscionable IP laws.

No one can ever say of me, “If you’re so smart, why aren’t you rich?” I really don’t care about money. Even making the little I do, I still end up giving a sizable percentage of my income to people even poorer than I am.

But Stephan McBride clearly cares a lot about money. But there is no reason to ask that question of him either. He clearly isn’t smart. He’s nothing more than a professional psychic. It’s just that the people who listen to him are richer than those who call The Psychic Hotline. And they think the fact that the drones at RiskHedge Report can push numbers around in a spreadsheet makes their proclamations any more believable.

It’s just a bunch of people with big but shameful dreams.