Netflix: Wine or Milk?
This is more about learning from your insights guys than having conviction myself.
Looking at the $NFLX chart, we’re at a very similar spot compared to four years ago. Back then, the stock had been cut in half, and now we’re asking the same question again:
Will history repeat itself and give us another great buying opportunity? Or will this time be different?
I honestly have no clue. I don’t follow Netflix closely from a fundamental perspective, so I’d have to dig into the numbers before having a strong opinion on which outcome is more likely.
What does seem clear to me, though, is that Netflix’s weakness may be reflecting broader consumer sentiment. Investors appear to believe that consumers will cut back on discretionary spending, and a Netflix subscription is one of those small luxuries that could end up on the chopping block.
Have you been following Netflix’s earnings lately?
I also heard that Michael Burry, the investor who famously bet against the U.S. housing market before the 2008 financial crisis (featured in The Big Short) wrote in his Substack newsletter:
“Disney produces wine. Netflix produces milk.”
His point, as I understand it, is that Disney’s content tends to age like fine wine, while Netflix’s content has a much shorter shelf life.
What do you think? Is Burry right?
I honestly don’t have an opinion since I haven’t watched much content from either platform.
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