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Mary953 (39.38)

Netflix at $200?

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November 29, 2010 – Comments (14) | RELATED TICKERS: NFLX

I have heard the speculation that Netflix is overpriced.  It isn't worth the money and will be dropping soon.  The fact is that as an investment,  NFLX is just plain scary.  At the moment, it is a scary $199.26.  I don't actually have a subscription to Netflix.  I just think that theater prices are insane. There has to be a seriously great movie to get me to spend for a theater ticket.  Call this just one more area of sticker shock.  I judge movies as worth owning, worth seeing, or just worth waiting until they hit the TV channels.  My bet on Netflix is that there are enough people out there that either cannot or will not pay first run theater prices to make an alternative a safe bet.  Netflix has the lion's share of that market and they have the name.  (Do you really use Scotch tape or just call it that?  How about Kleenex, just a brand or do you request a facial tissue when you are about to sneeze?  How many languages use 'Coke' as the word for a cola drink?)  Brand names matter.  Thanks to advertising and a fast first start, Netflix is the first one that comes to mind for home rental or streaming movies and that lead has increased in spite of late starting competitors.

And after all, I am investing in it, not marrying it.  ;-)

14 Comments – Post Your Own

#1) On November 29, 2010 at 3:52 PM, Mary953 (39.38) wrote:

"Please pay these prices and Please Pay NO MORE!"

Knee jerk reaction to this sort of silliness bred from listening to that tag line every football Saturday for 30 years.

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#2) On November 29, 2010 at 3:53 PM, Mary953 (39.38) wrote:

$.10 for Thurgood Marshal Academy

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#3) On November 29, 2010 at 5:41 PM, nuf2bdangrus (< 20) wrote:

NFLX is simply rallying because it has a good chart and is likely on the IBD top picks...along with CMG PNRA AMZN CRM etc.  They will all fall hard when liquidity vanishes.  COnsumer and retail have soared as government borrowing has kept the consumption game alive...but as it has failed to stimulate employment (for the obvious reason that most production is offshore) and  when the bond markets eventually put the skids on borrowing,..it will be trouble.  Nothing by hype.  Remember FSLR a couple years ago?  Same hype.  Amatuer retails short this on the obvious valuation, and the obvious trade fails as more shorts get squeezed and more momentum players ride the charts.  When the shorts give up....they fall. 

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#4) On November 29, 2010 at 6:22 PM, Mary953 (39.38) wrote:

Nuf2 - Merry Christmas in advance (or Happy Thanksgivings a bit late)

You seem to forget that 2 years ago I didn't know anything about the market, blogs, CAPS, or anything of the sort.  FSLR?  I hope that it is not a roadmap for NFLX if it rose and then fell.  Two years ago, you were explaining to me what it meant to short the market.  You were one of my first and very respected teachers.

At this point, I have stops set on Netflix to limit the possible loss I might incur.  Every time Netflix goes up another 10 points, I raise the stops another 10 points.  It doesn't matter as long as it stays even or goes up.  If it drops, I have managed a good profit.  The majority of investments are in much safer options.  I do have a nice handful of blue chip dividend plays that can rise, fall, or stay even, just as long as they don't go out of business.  The dividends will be a good addition, but they are long term positions. 

Someone mentioned to me that a good company is still a good company even if the stock is down a bit - as long as you don't sell the stock.  It pretty much depends on how you feel about the company.  As I mentioned, I am not married to any of these stocks.  At one point or another, most hit a difficult patch.  The joy of being an investor is the chance to move from one investment to another. (To spend the money over and over again only to have it returned - a shopper's dream.)

What looks good to you these days?   M

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#5) On November 29, 2010 at 6:25 PM, Mary953 (39.38) wrote:

FWIW, my first comment was a reaction to an outbreak of spam that was removed by TMF.  The comment was prompted by the spammer's sales pitch which reminded me of the stadium announcer on Saturday as he rattled off the "approved" prices for concession items.  With the spam removed, the comment is a bit strange up there by itself.

Did the spam gain 10 cents for Foolanthropy?

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#6) On November 29, 2010 at 10:35 PM, rd80 (99.11) wrote:

If the spam didn't, here's another comment for 10 cents.

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#7) On November 29, 2010 at 11:04 PM, SweetMircha (93.43) wrote:

Netflix ramblings sound a bit like a runaway train or just a Bee in your Bonnet. Why don't you try their 1 month free offer of their service to see if its worth the $9.00 per month subscription fee. At least that 's what the price is here in Canada since it just arrived about a month ago. My free month is just about up and I'm going to cancel because its not worth the monthly fee for crappy old run movies, a few from even the '70s.

I don't understand how the stock price for Netflix worked its way up to around $200. I wouldn't be surprised it it falls down to about $25 a share.  I don't think it's worth more than that, in my opinion.

I hope you have a good day tomorrow and a nice night tonight.

Mary K.

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#8) On November 29, 2010 at 11:29 PM, Mary953 (39.38) wrote:

I don't understand it either - unless it is just that $9 per month beats $15 per ticket.  That is the reason I originally bought in at around 50-60 per share.  The rest is profit which makes up for the FAZ and some of the other educational experiences I have had in the market.

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#9) On November 29, 2010 at 11:58 PM, SweetMircha (93.43) wrote:

Mary, I'm all for the profit end of it too. I'd bought some shares but sold them to early. No regrets though, afterall I did make some profit just not enough.

These days most of my investments pay between a 2% and up to 11% dividends. It allows me to make a profit in two ways;  as a capital gain and also as dividends.  Since I'm a Canadian I have a larger holding of TSX traded stocks which pay me some of the highest dividends along with US and a few EUR company stocks, also dividend payers. I do though have a few that don't pay dividends on all Cdn, US, China holdings.

The dividends give me more cash to further invest in more stock, and so on.

I hate the Chinese stocks; I've lost my shirt with the few that I own.  Can't wait to sell shortly & claim Capital Loss for the year.

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#10) On November 30, 2010 at 10:06 AM, Mary953 (39.38) wrote:

I think that dividend stocks are the safe way to go, much safer than NFLX and AAPL.  The two-edged sword here is that all of my dividend stocks are down by just a little bit.  No real losers in the group, but no real winners.  The dividends offset the paper loss, but it still bothers me.  NFLX and AAPL are the two stocks that bump my gains higher - at least on paper.  The portfolio that I work with is sort of split between the safety of the dividends and the risk of the other 2 (with stops set to keep me from losing out if the entire market falls.)

The rest ride along with no stops because I am not interested in selling them.  At least not now.  The closest thing to a Chinese stock that I own is YUM - Kentucky Fried Chicken, Taco Bell, Pizza Hut, etc.  They saturate the landscape here, but in China, new stores are opening daily.  My experience with the true "Chinese stocks" mirrors yours.

I would love to invest in Canadian stocks, but one of the lessons I have learned is this:  If you don't know anything about it, don't invest.  With Netflix, I am actually betting on the sheer number of people who want to see movies but just will not pay theater price.  Or am I the only cheap one in this forum?  I refuse to pay more to see a movie once than it will cost to buy the blasted thing in 5-6 months time.

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#11) On November 30, 2010 at 10:40 AM, lemoneater (87.47) wrote:

I think that NFLX has too much competition now and is too narrow of a company.

I have never used it because I can watch a lot of old favorites for a minimal fee off of Amazon. I'm still regretting that I didn't buy AMZN when it was selling for $33.

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#12) On November 30, 2010 at 12:17 PM, Evlampius (23.30) wrote:

I think Netflix is the best company in that industry - you can streamline HD wirelessly right into your TV without annoying adds and any stupid 20 cable boxes and spagetti of cables. 

 The second they will make Sports games available for online streaming i think Netflix will go to 500 and all dish networks go out of business because cable/dish companies will be obsolete.

Even now you can watch Sunday night game online streaming from yahoo in HD it will take maybe a year or two to make all this content available online even for a fee. That would be the end of cable. 

But streaming online movies/shows at your convinience without having a stupid monstrous gygabytes of data stored at your humongous dvd drive - that is such a convinience that I dont know why every person in us wouldnt do it. for 7.95 a month? Isnt that a no brainer?  and also streaming for other contries for extra fee? that is the future!!.

Buy  Netflix  and in big quantities!

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#13) On December 05, 2010 at 7:42 AM, hanginout (53.01) wrote:

Owning Netflix stock is a great deal like surfing.  You have to ride the waves (a margin account helps greatly)  Netflix got up to 209 right after this article.  The various ratings agencies moved it to a "sell" recommendation and I sold  (no, I did not catch the high, but my stop protected me.)  It is now 185.  It will begin to rise again because it t is a good stock with a good moat and - well, there is no need to repeat everything above.  I will miss the lowest point, just as I missed the highest point.  I will not  be out of Netflix for long. 

This stock ALWAYS needs a stop on it.  It is too volitile otherwise.  With a stop set, it will reward you handsomely.

 Mary

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#14) On December 06, 2010 at 6:08 PM, prhea1st1 (49.83) wrote:

Netflix has what other are missing 'All you can eat " in the world of videos, movies, series , etc... They have only begun to add to the list. That is why Comcast is fighting with LVLT right now because of Netflix taking the cables market share of on demand videos for 1/10 the cost of on demand. Netflix will continue to move forward because they will continue to add programming. What I see is a the younger generation in touch with where they are headed vs. the older generation or mindset that says "what's all the fuss about" the fuss is simple... you see it on every wireless blue ray/ roku/ computer coming out these days. 

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