4 June Watchlist ๐Ÿ‘€

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Today we are watching…

1. Take-Two Interactiveย (#take2)

This game developer is a world-beater and has been an awesome stay-at-home stock for investors through lockdown. Itโ€™s the studio behind Grand Theft Auto, BioShock, Borderlands, the Civilization series, and NBA 2K. However, it didnโ€™t reach these heights by playing nice. The competition in video games is cutthroat. Take-Two is a master at marketing and financing the creative work of talented devs, which gives them enormous power over those devs. Case and point, the mega-corp just stopped funding a small partner studioโ€™s sole project, setup its own team to work on the project, and told staff at the small studio to work for them or go down with a little company doomed to fail. The small studio is Star Theory. Itโ€™s just shut its doors, and investors in Take-Two are doing the mental math on short-term lawsuit costs and long-term sales of their new game!

2. Zoom Video (#zoom)

Now, those are some numbers โ€“ 246% combined revenue growth and expanding margins! Itโ€™s been a couple crazy quarters for video conferencing outfit, Zoom. However, Xerox also reported some smashing quarters at the turn of the millennium and got obliterated for a decade thereafter. The investor in Zoom today is not investing in a company that trades up and down based on expectations of its discounted future cash flows. The investor in Zoom today is betting on style factor. Itโ€™s true that companies that become verbs tend to do very well. Zoom is like the small Swiss knife of video conferencing, but Microsoft Teams is just better. Tough 2H 2020?

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Market Recap โ€“ September 28th ๐Ÿ’ฐ

After the 10-year Treasury yield bond fell off from its 15-year high, investors added some value back into the market, focusing all short-term attention on Fridayโ€™s PCE price index reading.

The Crude Oil Bust ๐Ÿ›ข

Surging global crude oil prices, driven by factors like OPEC+ production cuts have pushed U.S. West Texas Intermediate futures to over $95 per barrel.

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