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Holy smokers ladies and gentlemen we got a lot going on out there in the stock market world today we’ve got to talk about some of the biggest news stories in the stock market here today one is involving amazon in a big competitive move amazon has made here today we’ve got to talk about apple in some baddest news regarding apple around the new iphone 10 are also
Some analysts downgrades we’re going to kind of look at all that we got to talk about warren buffett and berkshire hathaway we’re going to kind of view their numbers they just reported over the weekend and also a move warren buffett has made that is a very very big move and then lastly we’ll kind of talk about netflix talk and around a rare double upgrade up in a
Netflix talk here today guys so hope you enjoy so it’s always hit a thumbs-up amazon let’s get started off here with amazon news so amazon just ratchet up the war for holiday shoppers with an unprecedented promotion all right amazon is offering free shipping to all customers for a limited time starting here today on monday it marks the first time in recent memory
That amazon has removed the minimum order requirement for its free super saver shipping tear okay if you didn’t know amazon in the past had you usually like around a $39 price point you had a hit so you basically how to buy $39 worth of stuff then you can get free shipping okay it wasn’t free two-day shipping but it was free shipping in general all right and now
They’ve taken off all that and they had already moved it down to around $25 now they completely removed that in it’s like anything you’ve pretty much order off amazon as especially most popular items you’re literally going to be able to get free shipping regardless if it’s a $5 thing $10 thing $20 thing or anything all right this offer applies to amazon’s delivery
Window of 5 to 8 days from witness item ships prime members will still get their stuff in two days no i i’ve played around with this in the past because my wife has an amazon prime account i don’t have an amazon prime account so in the past i tried to just order some things from my account which is not a prime account and what i found is they still get here within
2 or 3 days most of the time like i find that the things don’t necessarily always get here faster with her account versus my account it’s usually still way faster than like that 5 to 8 days amazon says it takes something just keep in mind there all right we know target just made a similar move about a week ago in regards to the same thing okay so targets battle
Plan for the holidays target for the first time ever will offer free two-day shipping with no minimum purchase requires starting november 1st and running all the way through december 22nd paul right so this is getting competitive now i think honestly this is probably where we’re gonna move long term in the whole retail landscape i think you know it’s just getting
More competitive as far as the shipping goes and i think you know the big retailers like target and walmart are kind of viewing amazon is hey you know kind of realizing how big of a threat amazon really is and they’re like man we gotta just offer free shipping no matter what i think amazon it says hey if they’re gonna offer free shipping no matter what you order we
Gotta pretty much match that we gotta do the same thing we’re not gonna let them undercut us okay amazon’s you know famous for kind of like trying to give a better value than the walmart or target anybody else can if also walmart and target start offering free shipping regardless of what you order amazon’s pretty much gotta match that jeff bezos does not want to
Get beat in any competitive category so this is a very this is shaping up to be a very very interesting retail holidays this is gonna hurt everybody’s profitability and your are if you’re offering free two-day shipping or just free shipping and in general regardless of the item size like these guys are gonna end up getting hurt at least as far as their profitability
Somewhat it’s just it’s a retail war as it is every holidays and it’s just moving more and more onto an online retail world rather than more of a traditional landscape all right now let’s go ahead and talk about netflix so netflix get so rare double upgrade and analyst urges to buy he says the stocks can go up massively from here in a rare move buckingham research
Raised its rating two notches to a buy from an underperform okay so basically you have a market perform which is kind of like in the middle underperform which is you know below a market perform then you have a buy which is above market performed so this is a double upgrade okay these are pretty rare from analysts saying that while it was previously cautious on its
Elevated stock price it still believes it’s a top notch option we have always viewed netflix as a continued top streaming category winner the analysts wrote a note clients on monday we are increasing our price target to 406 dollars from three hundred and forty nine dollars providing 31% upside all right big big upside that analyst is saying there the stock didn’t
Really react much here today as far as netflix talk when you know a netflix has a lot of competitive threats coming in 2019 and if you’re looking at just from a stock price perspective not even talking about the fundamentals of the company just a stock price perspective for netflix in 2019 i think it’s going to shape up to be a super competitive year with apple
Potentially launching you know more streaming services around their video content with disney launching their streaming happing taking that more and more serious i think all these competitive threats coming in in a massive massive way in 2019 if you’re looking at it from a stock price perspective i would say it’s a little scary okay and sometimes these analysts
Say oh well netflix they could just raise prices and that would help out their profitability and say okay let’s see it happen let’s see netflix go from $12 a month that might charge a customer to $20 a month let’s see how many people stick with that vs. cancel and whatnot let’s just you know let’s see the proof in the pudding at the end of the day so if you’re
Looking at it from a stock price perspective in terms of netflix i think it’s gonna be i think it’s a tough year to get a massive stock price move just because all these competitive threats are gonna come in there’s gonna be a lot of worries around that nevermind that netflix growth is gonna start to slow even more in 2019 so that doesn’t bode well with that all
Right now let’s get into apple stock here so apple fell around 3% today we know you fell you know obviously on the earnings stay around 7% on friday so 7% on friday another almost 3% here today this is on the back of a few things so one rosenblatt securities downgraded apple stock in a note to clients on friday from a buy to a neutral advising the clients that it
Would be difficult for apple to offset weaker volumes with higher selling prices for the second half of 2019 calendar fourth quarter guidance reflects our cautious view on weaker-than-expected sell-through and production reductions for the iphone 10s 10r wrote the analysts ok we downgrade to a neutral alright i wanted to do a few calculations here okay and kind
Of worked out some numbers on the calculator all right so apple sells around 220 million iphones per year let’s assume for a minute that in 2019 apple sells 20 million less iphones in 2019 all right so that would make it for around 200 million iphones sold in 2019 so let’s say apple just which is a pretty conservative number let’s say apple only sells which is a
Ridiculous number she’s authentic apple only sells to 200 million iphones in 2019 okay a very very conservative number all right now let’s keep in mind here if we’re doing this let’s say 20 million less iphones times an average selling price is 650 dollars which was average selling price just a couple years ago all right the average selling price of an iphone was
Around $650 just a few years ago that’s thirteen billion dollars in revenue that apple’s essentially missing out on by you know raising their average selling prices over the past few years all right 13 billion dollars now if we go ahead and we go ahead and take that 200 million number okay the 200 million iphones sold this year and we go ahead and add an extra 250
Dollars of average selling price because average selling price used to be $650 the day in 2019 we’ll hit around $900 that’s a $250 difference we take 200 million iphones times it out buy an extra two hundred and fifty dollars per iphone and we get a fifty billion dollar difference there guys and we can understand why apple doesn’t necessarily care if i phones were
To shrink a little bit or if they just stayed stagnant or they’d be just slightly grew because at the end of the day the average selling prices have gone up so much they’ve helped out revenues and profits so much so it happens in one of those situations really who cares about trying to chase you know and sell 230 million iphones this year or 220 million iphones
This year if we ever sell 200 million it’s still unbelievable an average selling price of $900 or somewhere around there guys so that’s something to keep in mind i don’t think analysts are really paying attention to that these average selling prices they can just keep iphone stagnant like that’s a massive massive win for the company all right now also this is a
News that came out here today apple is told it’s smartphone assembler foxconn in pegatron to halt plans for additional production lines dedicated to the iphone 10 our which hit shelves in october the very end of october thing october 26 to be exact the nikkei reported on monday apple had also asked smaller iphone assembler when strong to stand by for rush orders
But the company will receive no orders for the iphone 10 our this season the report citing for foxconn site is prepared nearly 60 assembly lines for the apple’s 10 our model but recently uses only around 45 production lines as top customer said it does not need to manufacture that many by now okay this is all coming out according to the nikkei now this dropped
All the apple suppliers out there they came back quite a bit but cirrus logic got hit on this you know cuervo guys hit on this bad sky work solutions universal display everybody across the board got hit they came back quite a bit in the trading day most i’m finished around one to three percent type downside moves but needless to say this hit all the apple suppliers
Has hit apple stock again here today and you know we don’t know what how much truth to this is well you know we always hear things about maybe apple reduced we reduced on you know the amount of iphones are gonna make yo something like that we never know how much truth there is to it iphone 10 are in my opinion will be the top volume seller for iphone in 2019 we’ll
Have to see if that comes true but in my opinion in 2019 i think iphone 10 are will be the top-selling iphone that’s the one that starts at $750 6.1 inch display it’s more of a budget-friendly model compared to the other models that started a thousand and eleven hundred dollars so i and also i’ve seen a lot of promotional activity around the iphone as far as our
Sprint’s doing a mover bears t-mobile’s making a move there as far as offering the phones for free if you you know straight in a certain phone for forty dollars a line and whatnot so i think that one will still sell well the question is maybe apple got to polish on it or maybe this report is just a bunch of fud we don’t know at the end of the day unfortunately you
Know i would say there’s some credibility to this this report you know as far as me looking at it from apple stock perspective if they had 60 lines 40 lines 50 lines like it’s all good sales in the end and like we talked about literally as long as i keep apples you know iphone sales stagnant or if they just shrink a little bit it’s phenomenal okay and if i look
At the competitive landscape there’s no one out there really taking market share from apple samsung’s numbers have been horrible for their smartphones okay google is trying to come in the game a little bit but they’re just taking some android market share so the whole smartphone industry right now is kind of in a drought and honestly it probably will be like i
Said until 5g hits when 5g hits that’s the next growth vector in my opinion for the smartphone category all this you know let’s increase the screen size a little bit let’s make faster chips i don’t think any of that’s causing mass amounts of people to say i’ve got to get that iphone or i got to get that samsung i get that google pixel or something like that people
Now are just kind of upgrading when they need to upgrade and until 5g hits we don’t really have a massive growth vector for smartphones all right now let’s talk about warren buffett and some moves out there okay so billionaire investor warren buffett was putting money to work this in stocks this summer including berkshire hathaway’s own shares the omaha nebraska
Conglomerate bought nearly 1 billion dollars of its own shares in august alone okay in august alone they bought a billion dollars worth of shares all right their earnings came out and these were pretty amazing earnings out of berkshire berkshires total earnings in the quarter came to eighteen point five billion dollars we’re near record for any company trailing
Only apples 20 billion dollars in the corner they reported back in the christmas quarter okay the huge earnings reflected paper profits on burt shares 218 billion dollar equity portfolio that must be reflected in the quarterly results under the new accounting rules that took effect this summer all right ceo buffett urges investors to focus on the operating earnings
Excluding the realized and unrealized investment gains which i agree with buffett on that those results were stellar as berkshires insurance operations benefited from a relatively mild hurricane activity season this season versus last season when three major storms hit including hurricane harvey insurance operations swung to a 2.1 billion dollar profit from a 1
Billion dollar loss the year ago burlington northern railroad they’re big railroad they own showed a 10% gain and operating profit to one point nine billion dollars absolutely amazing numbers there as far as berkshire stock price it moved up a little under 5% today a nice move for berkshire hathaway stock they’re off it is kind of looking at this right now and
He’s saying okay you know i got all this money around right now i get he’s spending it on buying other companies i could be buying other company stocks that are public companies or maybe my company is the best deal out there and i think warren buffett kind of view and warren buffett historically has not been a buyer of his own stock ok berkshire hathaway he very
Rarely has ever went out there and bought a lot of his own shares of berkshire hathaway stock but i think the way he views it right now is he he fused his company as one of the best deals out there and i think that’s a bullish sign for a couple of reasons one obviously buybacks should help bps over time as long as a company can produce the same type of net income
Or net income can go up but not just that if both the the great investor himself is viewing his own company as one of the best stocks to buy right now and he’s actively putting his money to work buying his own stock back right then that’s probably a pretty bullish time for berkshire hathaway in general that you have you know warren buffett who’s historically is
Not a big buyer of his own stock say you know what right now we’re at a very very good deal and if you’re looking at this from a long-term basis this is a steel that these shares right now so i think that’s very interesting berkshire hathaway’s kind of been one of those stocks that has kind of been pushed to the side one of these tech giants have kind of risen
Over the past few years you know amazon apple google facebook those big tech giants have just kind of been going up and going up and in parks your hathaway just kind of been pushed off to the side because it’s not really a tech company but then you start to look at some of these earnings and they’re absolutely amazing then you start to view how many you know great
Investments he’s made over time that are on the balance sheet but don’t really show up on the income statement because they’re just kind of sitting there as fabulous fabulous investments so a very interesting company needless to say berkshire hathaway i’ve actually never bought berkshire stock but i only really need to look into it deeply because if buffett’s out
There buying shares left and right then maybe it makes sense for me to as well guys let me know if you got a pinion on any of these stocks talk about here today apple amazon netflix berkshire hathaway warren buffett in general i would love to hear from you guys in that comment section as always thank you for watching and have a great day
Transcribed from video
AMAZON, NETFLIX, WARREN BUFFETT, APPLE BIG NEWS By Financial Education