I have had 80% of my portfolio in ATM: “Any time money”. I have been doing relatively very well in ongoing crash compared to my friends who want to get rich next month.
Long term Problems with Amazon, Facebook and Netflix:
Amazon:
Their prince Bezos is chilling with his girl friend in palace while their engineers are expected to work crazy hours, insist on highest standards and demonstrate great ownership. No great engineers want to work for a leader preaching vision from his hot tub.
They had first mover advantage in cloud but now there are bunch of small and big players catching up with innovative & reliable web services since cloud is not rocket science.
They are doing well in online shopping but margins are not great because it’s less tech and more labor management & customer service, which can’t scale as fast as pure labor free well written non rushed software (Google search, Microsoft office products, gmail, YouTube, Maps, etc)
Also majority of online shopping is third party marketplace who are always scared of cheap knock offs driven by fake reviews and Amazon basics so I don’t think growth there is sustainable.
Facebook:
Just set of dying apps. We all know that no one really spends that much time on Facebook, Instagram, messenger & whatsapp. They might have daily active users but those daily active users don’t really spend more than few mins on the app. Most of the communities and groups in these social media apps are ghost towns. They don’t rally own any mobile or desktop platform.
All the talk about meta verse is just the talks. It’s basically multi player real time game with VR which is not very new. Games (MetaVerse) can do well but it can also easily be very boring.
Netflix:
Yet another streaming app with all content being more than 30 mins. Even if they come up with great content, No one really has attention span of more than 10 mins these days. Netflix also hasn’t even developed a proper search engine in these many years. I watch more content on YouTube and TikTok than all streaming apps combined. No wonder YouTube revenue is similar to Netflix.
What’s the common problem with Amazon, Facebook and Netflix?
They are all tech companies with fear based culture. Engineers are always on their toes cutting corners to meet deadlines for next quarter so they don’t get fired in next performance cycle. So they never take long term risk or invest in big bets because big failure is not an option. Because they cut corners they also accumulate technical debt over time so basically talented engineers eventually spend more time keeping the lights on rather than innovating on new projects.
Facebook and Netflix hire the top most tech talent and they have no rule rule. But none of their engineers ever came up with disruptive new tech and they are still basically a streaming app after so many years. Facebook similarly had to acquire innovations (Instagram, WhatsApp) because their engineers are too scared to get fired to innovate.
I am also not long on Nvidia, AMD and all other companies whose products are not diversified.
Why am I long only ATM?
BRB
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