Displaying items by tag: tech

(New York)

The golden age of streaming is over, that is for sure. For the last several years, the combination of Netflix and Amazon Prime have given consumers a wide array of choices at low prices. However, the streaming space is now fragmenting dramatically as Disney and others take their programming off Netflix and others, making consumers pay for more subscriptions to get the same content. NBC, for instance, just launched its own service, Peacock, for its content. However, it did something quite differently—a lot of the content is free for consumers. You only pay for a premium section of the content, but a bulk of its is free when you sign up. If you are already a Comcast subscriber, the whole thing is free, though it does have limited ads.

FINSUM: This is the first time that a major streaming service decided to be free (outside of Prime Video being free for Prime subscribers). This may change the whole pricing paradigm for the industry.

(New York)

Breaking away is one of the biggest moments of an advisor’s lives. So much can go wrong and so much can go right. One of the most daunting aspects of breaking away is losing the infrastructure of a large firm, especially the tech infrastructure. So much of the success of breaking away depends on giving your clients a great experience during the transition, so choosing the right infrastructure is crucial. In order to avoid making a mistake, it is crucial to hire a consultant who specializes in the area. They will be able to tailor the tech you should get to the unique needs of your clients and your firm.

FINSUM: This is a very good idea as one of the biggest headaches (and potential sources of nightmarish stories) is making poor tech choices. Checkout LibertyFi, a specialist consultant in the area.

(San Francisco)

A prominent fund manager has just come out with a bold and bearish prediction—that the big multi-year surge in FAANG stocks will fade. Rob Arnott of Research Affiliates says “Will these stocks produce such impressive growth that they will justify their current market cap, or are these implausible growth expectations? We don’t have a crystal ball, of course, but we would recommend not betting on the momentum continuing”. Overall, FAANGs account for $4.2 tn of market cap, a huge concentration in such a small group of stocks, and a big threat to the overall bull market. Arnott is considered the founder of smart beta and has turned Research Affiliates into a firm that manages $184 bn.

FINSUM: The basic argument here is that FAANG valuations have simply grown too large relative to other sectors and are bound to come down. But what is the catalyst?

(New York)

If there were ever a small cap sector overwhelmed by their larger cousins, it would be in technology. Small cap tech stocks are so overshadowed by FAANGs and the like that one would be forgiven for not even realizing they exist. However, they do, and they may very well be a good buy at the moment. The S&P 600 Small-Cap Technology currently trades at half the valuation of the S&P 500 Technology index, way down from its historical spread. What’s more, profit estimates are healthier too. Calling small cap stocks “mini-fangs”, Leuthold Group argues that “the mini-Fangs offer a significantly higher growth profile at a substantially lower valuation”.

FINSUM: A couple notes here. Firstly, the FAANGs aren’t even really “tech” stocks anymore after the sector realignment, so the valuation comparisons are not perfect. Secondly, what is the catalyst? Leuthold argues that if the economy does a little better than expected then higher inflation will boost tech stocks. That sounds flimsy.

(San Francisco)

It is getting ugly on the left. While big tech companies have always been fairly far-left politically, a new line has just been drawn. In new transcripts just released, Mark Zuckerberg, CEO of Facebook, says he will “go to the mat and fight” with presidential hopeful Elizabeth Warren to stop her plan to break up big tech companies. “If she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge. And does that still suck for us? Yeah. I mean, I don’t want to have a major lawsuit against our own government … But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight”, said Zuckerberg. Warren retorted “What would really ‘suck’ is if we don’t fix a corrupt system that lets giant companies like Facebook engage in illegal anti-competitive practices, stomp on consumer privacy rights, and repeatedly fumble their responsibility to protect our democracy”.

FINSUM: Warren is still a long way from office, but this is a glimpse of what the future would look like should the far-left win the election. Instead of probes and whistleblowers, we would have major courtroom dramas over anti-monopoly measures.