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☕ CrowdStrike is only tough for those who haven’t got game

Jul 19, 2024

Good morning! 👋

The markets are a mess, err, working normally.

It’s everything else that’s apparently a disaster on the heels of a cascading global IT outage caused by a CrowdStrike software update pushed into systems worldwide. Flights, medical records, trains and more.

It’s one of the largest IT blackouts in history.

And... it’ll be in the review mirror shortly.

Here’s my playbook.

1 – The CrowdStrike situation is only tough for those who haven’t got game

Chill.

And if you’d like some help getting your game on, I’ll be here.

OBAers, I will have a special update shortly. 😊

Btw... if you consider yourself a trader and you are not all over this, you need to take a hard look in the mirror. Just sayin.’ Personally, I’m grinning ear to ear.

2 – SunPower's toast: tax credits are not a business strategy

Not that this is a surprise... I’ve repeatedly encouraged investors to avoid stocks like this one that are often built on nothing more than hopium, clickbait, and Wall Street’s fancy. (Read)

You could make the argument for bottom fishing – and some are – but that’s a fool’s errand.

High rates, too much inventory, and super-high installation $$ just aren’t a good mix at any price.

Shares are down almost 90% and likely on their way to $0.

I feel very sorry for the dealers who got sucked in; many are mom and pop shops.

Keith’s Investing Tip: If customers aren’t running to a company’s products before the government gets involved, they’re sure as heck going to be running away shortly afterwards. Buy the best, ignore the rest.

3 – Netflix wants investors to be more business-centric

That’s rich.

The company is phasing out subscriber metrics including membership numbers and average revenue per user, both of which are legacy makey-upey Silicon Valley specials left over from the go-go era when there weren’t real business results to focus on so they cooked up bull feather metrics as a way of distracting everyone.

Still, nice job. (Read)

Revenue is up 17% YoY and advertising supported memberships grew 34%.

MyPOV: Streaming services are going to be in exactly the same position as cable tv shortly; customers will ultimately leave because they don’t like getting carpet bombed by advertising. The only reason we still have Netflix in our house is because it’s provided via our T-Mobile plan. And I hate the fact that it takes several minutes to load now... because of all the BS getting shoved onto our box in the name of “personalization.” Sigh.

Shorting streaming stocks is tough because Wall Street has a vested interest in defending ‘em. For now.

4 – Prime did the time

A new record... $14.2B spent Tuesday and Wednesday for Prime Day.

That’s an 11% increase according to Adobe Analytics which tracks this sort of stuff and CNBC which is reporting it. (Read)

I still won’t touch AMZN because I think there are bigger, better bets for my money. Stuff with actual upside, not legislative and regulatory headwinds. But that’s just me.

AMZN has returned 38.33% over the past 12 months.

Nice!

It’s made a lot of folks a lot of money.

5 – A disconnect in the C-Suite

I place a premium on investing in companies where the CEO dishes up results, not excuses.

That's why I could only shake my head as I watched this interview with Charles Schwab CEO Walt Bettinger who defended his company saying that customers and investors are “confused” after shares tanked following crappy earnings (Watch)

Contrast with JPM CEO Jamie Dimon who leads from the front, speaks bluntly, and who takes responsibility for everything that happens on his watch. He is always sharply focused on the future. (Watch)

JPM shares have returned 40.40% over the past 12 months. Schwab shares are down –5.11%.

You get the idea.