investmentwatchblog--2020-12-03--Charting The Growing Generational Wealth Gap

As young generations usher into adulthood , they inevitably begin to accumulate and inherit wealth , a trend that has broadly remained consistent .
But what has changed recently is the rate of accumulation .
In the U.S. , household wealth has traditionally seen a relatively even distribution across different age groups .
However , over the last 30 years , the U.S. Federal Reserve shows that older generations have been amassing wealth at a far greater rate than their younger cohorts .
As the visual above shows , the older have been getting richer , and the younger have @ @ @ @ @ @ @ .
To examine the proportion of wealth each generation holds , it ’ s important to clearly define each age group .
Though personal definitions might differ , the U.S. Federal Reserve uses a clear metric : Relative to younger generations growing up , the Silent Generation and Greatest Generation before them have seen a decreasing share of household wealth over the last 30 years .
However , the numerical levels have been relatively stable .
For these combined generations , total wealth has gone from $ 16 trillion in 1989 to $ @ @ @ @ @ @ @ peak of $ 27 trillion in 2007 .
Considering this cohort has understandably shrunk over time—from an estimated 47 million to 23 million in 2019—their individual shares of wealth have actually increased .
Immediately following are the Baby Boomers , who held more than half of U.S. household wealth towards the end of 2020 .
At $ 59 trillion , the generation holds more than ten times the amount held by a comparative number of Millennials .
With $ 29 trillion held in 2019 , Generation X has also been gaining in wealth @ @ @ @ @ @ @ ’ s good enough for five times the wealth of Millennials , though at just $ 440k/person , they ’ ve fallen far behind Baby Boomers in rate of growth .
Finally , trying to catch up to their older cohorts are Millennials , who held the least amount of household wealth ( $ 5 trillion ) for the greatest population ( 73 million ) in 2019 , an average of just under $ 69k/person .
For a direct comparison , it took Generation X nine years to climb from their start of @ @ @ @ @ @ @ to above 5 % , while Millennials still haven ’ t crossed that threshold .
But it ’ s not all doom and gloom for Millennials .
Their rate of growth is starting to rise , with the generation ’ s level of wealth climbing from $ 3 trillion in 2016 to $ 5 trillion in 2019 .
Though the generational picture is stark , the difference in U.S. household wealth by age makes the picture of shifting wealth even clearer .
Until 2001 , the shares of household wealth held by different @ @ @ @ @ @ @ aged 40-54 and 55-69 held around 35 % each of household wealth , retirees aged 70+ hovered around 20 % , and younger people aged under 40 held around 10 % .
Since that time , however , the shift in wealth to older generations is clear .
The 70+ age group has seen their share of wealth increase to 26 % , while the share held by ages 55-69 has grown from 35 % to almost half .
But not all ages are seeing an increasing slice of wealth .
The 40-54 @ @ @ @ @ @ @ from 36 % to 22 % between 2001 and 2016 before starting to recover towards the end of the decade , while the youngest cohort now hover around just 5 % .
Breaking down that wealth by components is even more eye-opening .
The 39 and under age group holds 37.9 % of their assets in real estate , the largest share amongst any age group ( and concentrated in the hands of fewer people ) while older age groups have their wealth spread out across real estate , equities , and pensions @ @ @ @ @ @ @ in assets as it is in opportunity .
In 1989 , Baby Boomers and Generation X under 40 accounted for 13 % of household wealth , compared to just 5.9 % for Millennials and Generation Z under 40 in 2020 .
Will the Tide Turn for Generation Z ?
As new and accumulated wealth has been built up in older generations , it ’ s a matter of time before the pendulum starts to swing the other way .
The Millennials age group are expected to inherit $ 68 trillion by 2030 from @ @ @ @ @ @ @ that payout isn ’ t going to be even across the board , with wealthier families retaining the bulk of wealth and the majority of Millennials laden with debt .
And with Generation Z ( born 1997-2012 ) starting to come of age , the uneven playing field is making it hard to begin accumulating wealth in the first place .
Since it is in the best interest of societies to have wealthy generations that can drive economic growth , potential solutions are being examined all over the political sphere .
They include @ @ @ @ @ @ @ , and potentially cancelling student debt .
Whatever ends up happening , it ’ s important to track how the distribution of wealth changes over the coming decade , and begin accumulating your personal wealth as best as you can .

by visualcapitalist
As young generations usher into adulthood, they inevitably begin to accumulate and inherit wealth, a trend that has broadly remained consistent.
But what has changed recently is the rate of accumulation.
In the U.S., household wealth has traditionally seen a relatively even distribution across different age groups. However, over the last 30 years, the U.S. Federal Reserve shows that older generations have been amassing wealth at a far greater rate than their younger cohorts.
As the visual above shows, the older have been getting richer, and the younger have been starting further back than ever before.
By Generation: Baby Boomers Benefit & Millennials Lag
To examine the proportion of wealth each generation holds, it’s important to clearly define each age group. Though personal definitions might differ, the U.S. Federal Reserve uses a clear metric:
Generation Birth Years Age (2020) Silent Generation & Earlier 1945 and earlier 75+ Baby Boomers 1946–1964 56–74 Generation X 1965–1980 40–55 Millennials 1981–1996 24–39
Relative to younger generations growing up, the Silent Generation and Greatest Generation before them have seen a decreasing share of household wealth over the last 30 years.
However, the numerical levels have been relatively stable. For these combined generations, total wealth has gone from $16 trillion in 1989 to $19 trillion in 2019, with a peak of $27 trillion in 2007. Considering this cohort has understandably shrunk over time—from an estimated 47 million to 23 million in 2019—their individual shares of wealth have actually increased.
Immediately following are the Baby Boomers, who held more than half of U.S. household wealth towards the end of 2020. At $59 trillion, the generation holds more than ten times the amount held by a comparative number of Millennials.
Generation Wealth (2019) Population (2019) Wealth/Person Silent Generation & Older $18.8 Trillion 23.0 Million $817,391 Baby Boomers $59.4 Trillion 71.2 Million $834,270 Generation X $28.6 Trillion 65.0 Million $440,000 Millennials $5.0 Trillion 72.6 Million $68,871
With $29 trillion held in 2019, Generation X has also been gaining in wealth over the last 30 years. It’s good enough for five times the wealth of Millennials, though at just $440k/person, they’ve fallen far behind Baby Boomers in rate of growth.
Finally, trying to catch up to their older cohorts are Millennials, who held the least amount of household wealth ($5 trillion) for the greatest population (73 million) in 2019, an average of just under $69k/person.
For a direct comparison, it took Generation X nine years to climb from their start of 0.4% of household wealth in 1989 to above 5%, while Millennials still haven’t crossed that threshold. But it’s not all doom and gloom for Millennials. Their rate of growth is starting to rise, with the generation’s level of wealth climbing from $3 trillion in 2016 to $5 trillion in 2019.
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By Age: A Growing Share for 55+
Though the generational picture is stark, the difference in U.S. household wealth by age makes the picture of shifting wealth even clearer.
Until 2001, the shares of household wealth held by different age groups were relatively stable. People aged 40-54 and 55-69 held around 35% each of household wealth, retirees aged 70+ hovered around 20%, and younger people aged under 40 held around 10%.
Since that time, however, the shift in wealth to older generations is clear. The 70+ age group has seen their share of wealth increase to 26%, while the share held by ages 55-69 has grown from 35% to almost half.
But not all ages are seeing an increasing slice of wealth. The 40-54 age group saw its share drop sharply from 36% to 22% between 2001 and 2016 before starting to recover towards the end of the decade, while the youngest cohort now hover around just 5%.
Breaking down that wealth by components is even more eye-opening. The 39 and under age group holds 37.9% of their assets in real estate, the largest share amongst any age group (and concentrated in the hands of fewer people) while older age groups have their wealth spread out across real estate, equities, and pensions.
Assets Held by Age (Percent of Total, 2020) 70+ 55–69 40–54 ≤39 Real estate 21.6% 20.5% 27.6% 37.9% Consumer durables 3.8% 3.6% 5.2% 9.4% Corporate equities and mutual fund shares 24.6% 23.1% 18.6% 8.1% Pension entitlements 16.3% 25.0% 21.9% 21.0% Private businesses 7.9% 9.7% 12.1% 8.1% Other assets 25.8% 18.1% 14.7% 15.5%
But the difference is as much in assets as it is in opportunity. In 1989, Baby Boomers and Generation X under 40 accounted for 13% of household wealth, compared to just 5.9% for Millennials and Generation Z under 40 in 2020.
Will the Tide Turn for Generation Z?
As new and accumulated wealth has been built up in older generations, it’s a matter of time before the pendulum starts to swing the other way.
The Millennials age group are expected to inherit $68 trillion by 2030 from Baby Boomer parents. Of course, that payout isn’t going to be even across the board, with wealthier families retaining the bulk of wealth and the majority of Millennials laden with debt.
And with Generation Z (born 1997-2012) starting to come of age, the uneven playing field is making it hard to begin accumulating wealth in the first place.
Since it is in the best interest of societies to have wealthy generations that can drive economic growth, potential solutions are being examined all over the political sphere. They include different taxation schemes, changing estate laws, and potentially cancelling student debt.
Whatever ends up happening, it’s important to track how the distribution of wealth changes over the coming decade, and begin accumulating your personal wealth as best as you can.


investmentwatchblog--2020-12-03--Will A Stimulus Help The Economy?

Will A Stimulus Help The Economy?

Those who only follow the stock market are confused by emergency measures to help the economy since the stock market is at a record high .
However , the stock market doesn ’ t reflect the economy for three reasons .
Firstly , public companies in trouble can issue cheap debt and shares if they have to .
That opportunity is not afforded to small firms .
Secondly , the stock market is dominated by software stocks which have benefited from this new economy .
Thirdly , the stock market is looking forward to when the vaccines save the economy @ @ @ @ @ @ @ the meantime , people are in big trouble .
The initial bipartisan Senate proposal allocates $ 908 billion to help people .
The plan calls for $ 300 in additional weekly unemployment benefits , $ 300 billion in PPP , $ 250 billion in help to state and local governments which have been laying off teachers , a temporary liability shield ( limitation of COVID-19 related lawsuits against businesses who follow public health guidelines ) , and $ 50 billion for vaccine distribution .
There won ’ t be another round of stimulus @ @ @ @ @ @ @ if the Dems win the Senate by winning the two Georgia seats up for grabs , another round of checks might come .
People who don ’ t own assets ( most of the bottom half of the country ) are in trouble .
32.9 % of Americans live in households that aren ’ t current on rent or mortgage payments where eviction or foreclosure is very likely or somewhat likely in the next 2 months .
The chart above shows the states with the worst results .
33.7 % of Americans are @ @ @ @ @ @ @ somewhat or very difficult to pay for usual household expenses during the pandemic .
Over 1 in 10 people are in households where there was either sometimes or often times not enough food to eat in the last week .
One third of adults expect income loss in the next month ( this is all from the household pulse survey ) .
It ’ s pretty clear from this data a stimulus is desperately needed despite the continual record high in stocks .
The economic data isn ’ t completely disastrous though as @ @ @ @ @ @ @ sales on Cyber Monday .
That ’ s 15.1 % growth .
Sales missed estimates for $ 12.7 billion because of the new discounts earlier in the shopping season .
Amazon had Prime Day from October 13th to the 14th and competitors made their own discounts to compete .
Even with Adobe ’ s revision from expecting $ 189 billion in online sales this holiday season to $ 184 billion , it still expects 30 % growth .
There was less online growth on Cyber Monday than Thanksgiving and Black Friday because it @ @ @ @ @ @ @ Monday is always big for online shopping .
Redbook same store sales growth in the week of November 28th , rose from 2.8 % to 9.2 % .
On the other hand , on Back Friday , Chase card spending was down 18.6 % yearly .
The 7 day average of yearly growth compared to same week of last year was -8.5 % .
There are 30 million Chase credit and debit card holders .
Adobe analyzes traffic on retail websites and transactions from 80 of the top 100 online U.S. retailers .
@ @ @ @ @ @ @ way too much optimism compared to reality .
Small businesses are failing at a high rate , yet the NFIB index has mostly been high .
The IHS Markit/ Paychex data is much more accurate .
The chart below shows the small business jobs index which is based on 350,000 Paychex clients .
The index is at 94.29 which is below the financial crisis trough of 94.87 .
There ’ s little question this recession has been worse for small businesses relative to large ones .
The West has the biggest yearly decline @ @ @ @ @ @ @ is 96.73 , while Washington ’ s index is 91.59 .
Looking at metro areas , Denver ’ s index is 97.31 , while Seattle ’ s index is 91.29 .
In terms of industries , the best was construction at 97.58 partially because of the strong housing market .
Leisure and hospitality was in last at 88.14 .
Small businesses pay hourly wages of $ 28.26 .
Weekly earnings growth was 2.86 % .
The Markit manufacturing PMI rose from 53.4 to 56.7 in November .
That ’ s the 7th increase @ @ @ @ @ @ @ since September 2014. Business confidence was the strongest since February 2015 and cost burdens were up the most since October 2018 .
The Chief Business Economist at Markit stated , “ Most encouraging was the breakdown of the rise in new orders which underpinned the expansion .
Demand for investment goods such as business equipment and machinery rose especially sharply.
” The upturn in new orders was the fastest since May 2018 .
The ISM PMI wasn ’ t as great , but it still signaled the manufacturing sector was doing well .
@ @ @ @ @ @ @ accurate when the industrial production report comes out .
It ’ s clear we ’ re in a cyclical recovery because copper prices just hit a 7.5 year high .
The ISM PMI fell from 59.3 to 57.5 as the chart above shows .
The new orders index was down 2.8 to 65.1 and the production index was down 2.2 points to 60.8 .
The decline in the dollar helped the ISM new export orders index rise 2.1 points to 57.8 which was the highest reading since March 2018 .
The chart below @ @ @ @ @ @ @ exports .
15 of 18 industries reported growth in new orders .
This PMI is consistent with 4.3 % GDP growth .
A machinery firm stated , “ Business continues to be strong , with significant back-orders .
Suppliers have struggled to hire people , as we have to support the increased business.
” It ’ s amazing how the hot parts of the economy have tight labor markets even with the unemployment rate being elevated .
Each industry is different .
Individuals are struggling even though the stock market is at a @ @ @ @ @ @ @ need a stimulus , not even small cap value .
However , unemployed people and state & local governments need all the help they can get .
It would be great if a stimulus passes in December because we are right on the cusp of the vaccines going out .
People just need to be helped a couple more months before the economy reopens .
Online sales growth was solid on Cyber Monday , but below Adobe ’ s estimates .
Small businesses are doing worse than the trough of the financial crisis @ @ @ @ @ @ @ sector was in amazing shape , while the ISM PMI was good but not amazing .

by UPFINA
Those who only follow the stock market are confused by emergency measures to help the economy since the stock market is at a record high. However, the stock market doesn’t reflect the economy for three reasons. Firstly, public companies in trouble can issue cheap debt and shares if they have to. That opportunity is not afforded to small firms. Secondly, the stock market is dominated by software stocks which have benefited from this new economy. Thirdly, the stock market is looking forward to when the vaccines save the economy. That makes sense, but in the meantime, people are in big trouble.
The initial bipartisan Senate proposal allocates $908 billion to help people. The plan calls for $300 in additional weekly unemployment benefits, $300 billion in PPP, $250 billion in help to state and local governments which have been laying off teachers, a temporary liability shield (limitation of COVID-19 related lawsuits against businesses who follow public health guidelines), and $50 billion for vaccine distribution. There won’t be another round of stimulus checks in this stimulus. However, if the Dems win the Senate by winning the two Georgia seats up for grabs, another round of checks might come.
💥 Almost a third of Americans are living under threat of eviction or foreclosure. 🔹 32.9% of Americans are living in households not current on rent or mortgage where eviction or foreclosure in the next two months is either very likely or somewhat likely. pic.twitter.com/0iwhdIwXNI — Michael Goodwell (@MichaelGoodwell) December 1, 2020
People who don’t own assets (most of the bottom half of the country) are in trouble. 32.9% of Americans live in households that aren’t current on rent or mortgage payments where eviction or foreclosure is very likely or somewhat likely in the next 2 months. The chart above shows the states with the worst results.
33.7% of Americans are living in households where it has been somewhat or very difficult to pay for usual household expenses during the pandemic. Over 1 in 10 people are in households where there was either sometimes or often times not enough food to eat in the last week. One third of adults expect income loss in the next month (this is all from the household pulse survey). It’s pretty clear from this data a stimulus is desperately needed despite the continual record high in stocks.
Holiday Shopping Update
The economic data isn’t completely disastrous though as there was $10.8 billion in online sales on Cyber Monday. That’s 15.1% growth. Sales missed estimates for $12.7 billion because of the new discounts earlier in the shopping season. Amazon had Prime Day from October 13th to the 14th and competitors made their own discounts to compete. Even with Adobe’s revision from expecting $189 billion in online sales this holiday season to $184 billion, it still expects 30% growth. There was less online growth on Cyber Monday than Thanksgiving and Black Friday because it had less share to gain. Cyber Monday is always big for online shopping.
Redbook same store sales growth in the week of November 28th, rose from 2.8% to 9.2%. On the other hand, on Back Friday, Chase card spending was down 18.6% yearly. The 7 day average of yearly growth compared to same week of last year was -8.5%. There are 30 million Chase credit and debit card holders. Adobe analyzes traffic on retail websites and transactions from 80 of the top 100 online U.S. retailers.
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Small Businesses Are In Dire Shape
We all know the NFIB survey shows way too much optimism compared to reality. Small businesses are failing at a high rate, yet the NFIB index has mostly been high. The IHS Markit/ Paychex data is much more accurate. The chart below shows the small business jobs index which is based on 350,000 Paychex clients. The index is at 94.29 which is below the financial crisis trough of 94.87. There’s little question this recession has been worse for small businesses relative to large ones.
The West has the biggest yearly decline at -4.91%. Texas’ index is 96.73, while Washington’s index is 91.59. Looking at metro areas, Denver’s index is 97.31, while Seattle’s index is 91.29. In terms of industries, the best was construction at 97.58 partially because of the strong housing market. Leisure and hospitality was in last at 88.14. Small businesses pay hourly wages of $28.26. Weekly earnings growth was 2.86%.
November Manufacturing PMIs
The Markit manufacturing PMI rose from 53.4 to 56.7 in November. That’s the 7th increase in a row and the best reading since September 2014. Business confidence was the strongest since February 2015 and cost burdens were up the most since October 2018. The Chief Business Economist at Markit stated, “Most encouraging was the breakdown of the rise in new orders which underpinned the expansion. Demand for investment goods such as business equipment and machinery rose especially sharply.” The upturn in new orders was the fastest since May 2018.
US ISM Mfg Index for Nov fell to 57.5 from 59.3. That's still a solid pace of growth but the downside bias contrasts with the upside trend for US Mfg PMI through Nov. Overall, the two survey indexes still show the sector's rebound continued last month: t.co/zug6Wg6bvJ pic.twitter.com/bRNa147MqF — James Picerno (@jpicerno) December 1, 2020
The ISM PMI wasn’t as great, but it still signaled the manufacturing sector was doing well. We will see which one was more accurate when the industrial production report comes out. It’s clear we’re in a cyclical recovery because copper prices just hit a 7.5 year high. The ISM PMI fell from 59.3 to 57.5 as the chart above shows. The new orders index was down 2.8 to 65.1 and the production index was down 2.2 points to 60.8. The decline in the dollar helped the ISM new export orders index rise 2.1 points to 57.8 which was the highest reading since March 2018. The chart below shows this signals good things for goods exports.
Good sign for export activity over the next few months. As the dollar continues its descent, the ISM new export orders strengthened to 57.8 in November, the best level since March 2018. pic.twitter.com/lWp0Sy9rkz — RenMac: Renaissance Macro Research (@RenMacLLC) December 1, 2020
15 of 18 industries reported growth in new orders. This PMI is consistent with 4.3% GDP growth. A machinery firm stated, “Business continues to be strong, with significant back-orders. Suppliers have struggled to hire people, as we have to support the increased business.” It’s amazing how the hot parts of the economy have tight labor markets even with the unemployment rate being elevated. Each industry is different.
Conclusion
Individuals are struggling even though the stock market is at a record high. Stocks don’t need a stimulus, not even small cap value. However, unemployed people and state & local governments need all the help they can get. It would be great if a stimulus passes in December because we are right on the cusp of the vaccines going out. People just need to be helped a couple more months before the economy reopens. Online sales growth was solid on Cyber Monday, but below Adobe’s estimates. Small businesses are doing worse than the trough of the financial crisis. The Markit PMI signaled the manufacturing sector was in amazing shape, while the ISM PMI was good but not amazing.


investmentwatchblog--2020-12-03--Arizona Governor Ducey just got served with a lawsuit for certifying the fraudulent election by Sidn

Arizona Governor Ducey just got served with a lawsuit for certifying the fraudulent election by Sidney Powell.

The Arizona Governor has some explaining to do for certifying a fraudulent election .
Recently a sample of 100 random @ @ @ @ @ the 100 – 2 votes were fraudulent .
Taking two votes from Trump and giving @ @ @ @ @ That is a 3 % swing .
Now they have granted a larger inspection .

The Arizona Governor has some explaining to do for certifying a fraudulent election. Recently a sample of 100 random votes were inspected out of the 100 – 2 votes were fraudulent. Taking two votes from Trump and giving one vote to Biden.
That is a 3% swing. Now they have granted a larger inspection.
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Game on.
h/t bmac3434


investmentwatchblog--2020-12-03--Disgraceful: How do you know these witnesses are telling the truth about Democrat intimidation? Beca

Disgraceful: How do you know these witnesses are telling the truth about Democrat intimidation? Because you’re witnessing Michigan LEGISLATORS openly intimidating them on the committee, on national television.

The hearing is still live , 160,000 watching on RSBN , and probably as much on NTD .
MSM no @ @ @ @ @ This is a crossroads for humanity folks , buckle up !
The display from several @ @ @ @ @ one of the most stunningly inexcusable spectacles I ’ ve ever witnessed in decades of @ @ @ @ @ One member LITERALLY DOXXED the brave first witness , while another SLANDERED HER and accused @ @ @ @ @ had the wrong person .
The blood of every decent human being should be boiling @ @ @

How do you know these witnesses are telling the truth about Democrat intimidation? Because you’re witnessing Michigan LEGISLATORS openly intimidating them on the floor of this committee, on national television. — Jenna Ellis (@JennaEllisEsq) December 3, 2020
The hearing is still live, 160,000 watching on RSBN, and probably as much on NTD.
MSM no where to be found.
This is a crossroads for humanity folks, buckle up!
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The display from several of these Michigan legislators is one of the most stunningly inexcusable spectacles I’ve ever witnessed in decades of observing politics. Period.
One member LITERALLY DOXXED the brave first witness, while another SLANDERED HER and accused her of lying and he had the wrong person.
The blood of every decent human being should be boiling right now.


investmentwatchblog--2020-12-03--$1500 to Take the Vaccine? That’s $360 Billion of Taxpayer $$

One of their grand ideas : They want to shell out $ 360 billion of our taxpayer dollars in $ @ @ @ @ @ of Americans for taking the vaccine .
Allegedly 56 % of Americans lean toward getting @ @ @ @ @ me $ 5 million and I would n't get the jab .
t.co/i85r1pqn8g

One of their grand ideas: They want to shell out $360 billion of our taxpayer dollars in $1500 checks to 75% of Americans for taking the vaccine. Allegedly 56% of Americans lean toward getting vaccinated. They could pay me $5 million and I wouldn't get the jab. t.co/i85r1pqn8g
— Corey Lynn – Corey's Digs (@CoreysDigs) December 3, 2020


investmentwatchblog--2020-12-03--And so it begins. Los Angeles city locked down

Garcetti ordering all los Angeles city residents to stay home and will now be fined or imprisoned for WALKING outside @ @ @ @ @ !
You wo n't be able to travel or leave the house without your Vaccine @ @ @ @ @ 've been saying this here for months now it 's not a conspiracy anymore .
@ @ @ @ @ wo n't be able to travel or leave the house without your Vaccine Card in @ @ @ @ @ saying this here for months now it 's not a conspiracy anymore .
# BREAKING @ @ @ @ @ residents were ordered to remain in their homes effective immediately , according to a new @ @ @ @ @ , including travel on foot , bicycle , scooter , motorcycle , automobile , or @ @ @ @ @ t.co/2wns1qOCsV

Garcetti ordering all los Angeles city residents to stay home and will now be fined or imprisoned for WALKING outside their home.
full article from ktla
#BREAKING: All #LosAngeles city residents were ordered to remain in their homes effective immediately, according to a new emergency order.
All travel, including travel on foot, bicycle, scooter, motorcycle, automobile, or public transit is prohibited. t.co/2wns1qOCsV
— KRON4 News (@kron4news) December 3, 2020


investmentwatchblog--2020-12-03--Heads up! Something about to go down with Iran. US embassy in Baghdad evacuated.

US State Department spokesperson declined to comment on withdrawal but said safety of US officials, citizens & facilities in Iraq "remains our highest priority" – via @AFP — Maya Gebeily (@GebeilyM) December 2, 2020
#IRAQ: Around 2 weeks ago, Western official told @AFP that despite dramatic drop in rocket attacks, US was still studying 3 withdrawal options. The least destabilizing, that official said, was a partial drawdown in which ambassador + top diplomats stay. — Maya Gebeily (@GebeilyM) December 2, 2020
#IRAQ: Two Western officials joked to me several weeks ago that if US did decide to leave, skies would get noisy over #Baghdad. We've heard at least 1 helicopter overhead – usually more – every day for the last two weeks. — Maya Gebeily (@GebeilyM) December 2, 2020
Israeli, U.S. armies step up coordination ahead of possible Iranian retaliation t.co/FKpcuM7Q5u — Haaretz.com (@haaretzcom) December 2, 2020
🚨 Currently 🇮🇱 ✈ #IAF Israeli Air Force warplanes over #Lebanon 🇱🇧 and no presence of any #AAR Refueling aircraft or #SIGINT/#ELINT (#AEWC, #SEMA) G550 Nachshon Shavit/Eitam. Usually, during any operation in the conflicts' zones, their Transponders is turned OFF. pic.twitter.com/rkGSqO5yAV — INTELSky (@Intel_Sky) December 2, 2020
AC
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investmentwatchblog--2020-12-03--CNN explains why they won’t air Trump Speech!

This is why civil war is the only way forward .
Talk all the BS you want , keep your @ @ @ @ @ never the answer stupid .
There is peace on the other side of war .
@ @ @ @ @ them prepare for war .

This is why civil war is the only way forward. Talk all the BS you want, keep your ignorant belief that violence is never the answer stupid.
There is peace on the other side of war.
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Whoever desires peace, let them prepare for war.
h/t Kingzzor


investmentwatchblog--2020-12-03--Youtube and Bitchute simultaneous Censorship. Act the same way. This is the new form of Censorship!

Youtube.com does the playback error .
Then bitchute.com loads the video and says its playing .
But it is not @ @ @ @ @ censorship tool being used in the past 2 months .
Exactly the same , like @ @ @ @ @ happens at night 1PM .
Every time .
Zero Day exploit .
Or ddos attack @ @ @ @ @ the actual front end but the back end .
I feel every time this happens @ @ @ @ @ operations or other major happenings .
They are disallowing something from coming out .
these @ @ @ @

Youtube.com does the playback error.
Then bitchute.com loads the video and says its playing. But it is not playing.This is the 3rd simultaneous censorship tool being used in the past 2 months. Exactly the same, like clock work. And it happens at night 1PM. Every time. Zero Day exploit. Or ddos attack on the video servers not the actual front end but the back end. I feel every time this happens when huge movements in military operations or other major happenings. They are disallowing something from coming out. these are not test.
postimg.cc/gallery/qNpCpt3
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h/t nannerknight


investmentwatchblog--2020-12-03--Options Explained – The Intermediates

Options Explained – The Intermediates

Alright Neanderthals , ( if you understand CCs , CSPs , The Wheel , Debit Spreads , move along ) I ’ m back with a second post explaining option things .
I was overwhelmed by the positive feedback from the first post , which can be read here .
Before proceeding , you need to have a fundamental understanding of the following topics ( if you can answer these questions you ’ re set ) : • What is the difference between Selling to Open and Buying to Open ?
Which has more inherent risk and why ?
• @ @ @ @ @ @ @ of the Money for both calls and puts ?
• What is intrinsic value ?
• What is extrinsic value ?
If you can ’ t answer any of these please read the first post or simply Google/YouTube the things you do not understand .
If you are really struggling with any of them and you ’ ve tried these resources please don ’ t hesitate to message me or ask your question in the comments of the first post .
In this post , we are going to cover : Grab your @ @ @ @ @ @ @ and follow along .
I encourage the consumption of bourbon on the rocks and the listening of Mac Miller during the reading of this post .
• Credit – any money that a trader collects as a result of selling an option .
For selling calls/puts , if the seller places an Ask and the order gets filled , they will be credited with the money , meaning that it will immediately be placed into your account .
• Debit – any money that a trader pays as a result of buying an @ @ @ @ @ @ @ the buyer places a Bid and the order gets filled , they ill pay the money for that option , and now they own that option .
Covered calls are an option strategy where the trader uses 100 shares of the underlying as collateral to sell calls .
The sold calls should be out of the money and always needs to be above the cost basis of the owned stock to avoid loss .
This is a safer strategy than selling naked calls ( selling a call when you do NOT own 100 @ @ @ @ @ @ @ the price of the stock breaks through the strike price and the buyer exercises you will not realize an immediate loss by buying shares above the strike and selling them for the strike .
Lots of words , lets take a look .
I , again , am going to use $ MSFT as an example .
This is only an example , any sentiment towards this stock expressed is solely hypothetical .
We ’ re neutral to bearish on $ MSFT and don ’ t think there will be any significant price @ @ @ @ @ @ @ ll look at selling naked calls first .
Below is the 12/31 options chain for $ MSFT Calls .
We think $ MSFT is going to trade sideways or decrease in value , so we are going to sell the 12/31 $ 220.0C .
You put in an ask for $ 4.05 and it is filled , so that $ 4.05 is technically immediately credited into your account .
Robinhood will not immediately show this in your account because it is an open contract but as the option price changes those changes will @ @ @ @ @ @ @ .
• Best case scenario for you : $ MSFT trades sideways or decreases in value , resulting in the option decreasing in value .
At any point when the option is under the price you paid for it you could Buy to Close the call and that would be your realized profit .
For example , on 12/15 $ MSFT is trading at $ 200.0 , the call is now worth $ 2.05 , so you could buy to close your contract and your gain would be $ 4.05 – $ 2.05 @ @ @ @ @ @ @ .
• Worst case scenario : You go to sleep in the evening , smiling because you think you made an easy $ 4.05 , you ’ ve figured out how to beat the market .
BUT $ MSFT announces that it has been contracted by NASA to put computers on the Moon .
$ MSFT rockets up to $ 300 .
The person that bought your calls decides to exercise , this means that you would have to BUY 100 shares of $ MSFT at the current market price and sell them @ @ @ @ @ @ @ 220.0 .
Your max loss would be [ ( $ 300 – $ 220 ) x 100 ] – $ 405 = $ 7,595.0 .
If the price went higher or you had more than 1 open contract you could see how this is insane risk .
THIS IS WHY I HIGHLY RECOMMEND NOT SELLING NAKED CALLS .
Covered Calls – Now lets say we have 100 shares of $ MSFT that we bought during a dip at $ 205.0 .
We are bullish on the stock and are holding long but don @ @ @ @ @ @ @ to $ 220.0 from $ 214.0 so we sell the same call .
Again , the money is credited to the account .
• Best case scenario the stock finishes just below the strike on the expiration date and you can sell another call further out for more premium .
If the stock is at $ 219.0 on the day of expiration , you can just sell a $ 230.0 call further out and collect more premium .
You can continue this until you are assigned the stock .
• Worst case ?
@ @ @ @ @ @ @ $ 225 .
Your total gains for the trade would be [ ( $ 220.0 – $ 205 . )
x100 ] + $ 405 = $ 1,905.0 .
Now , if you hadn ’ t sold the call you would have realized more gains if you sold the 100 shares at $ 225 , but only by $ 95 .
THE IMPORTANT PART IS THAT BECAUSE YOU HAVE 100 SHARES AS COLLATERAL YOU DO NOT HAVE TO BUY THEM AT THE CURRENT MARKET PRICE .
• Cost basis is the price you @ @ @ @ @ @ @ you have received for selling covered calls , receiving dividends , etc .
This is done at the single stock level .
• Example : • We buy 100 shares of $ WSB at $ 100.0 per share • We Sell to Open an OTM Covered Call on $ WSB for $ 1.00 .
• Our 50 % profit trigger is hit , and we Buy to Close the contract at $ .50 .
• Our new cost basis is ( $ 100.0 – $ .50 = $ 99.5 ) • We Sell @ @ @ @ @ @ @ $ WSB for $ 1.00 , but this time we let it expire worthless .
Our new cost basis is ( $ 99.5 – $ 1.0 = $ 98.5 ) .
Cost Basis is important when selling covered calls because you should not sell covered calls for a strike price that is less than your cost basis .
• Example : Our cost basis on $ WSB after a few CCs is now $ 90.0 and is trading at $ 110.0 • $ WSB takes a little nose dive with the market and @ @ @ @ @ @ @ sell an $ 85.0 CC for $ 1.00 , we reduce our Cost Basis to $ 89.0 , but if we are assigned , we realize a total loss of $ 400.0 if the stock finishes anywhere above the strike price and is exercised .
The risk associated with selling naked puts is the same as selling naked calls , but reverse .
If you sell a put , the stock tanks , you are now obligated to buy from the owner of the option the stock on the higher price than market @ @ @ @ @ @ @ $ 20 put , the stock falls to $ 10 and the owner decides to exercise the option , you are now OBLIGATED to buy 100 shares at $ 20.0 , when they are selling on the open market for $ 10 .
Your loss would therefore be [ ( 20.0-10.0 ) * 100 ] – credited premium = Max Loss .
Selling a cash secured put is selling a put with an adequate amount of cash available to buy the shares if the underlying does drop below the strike and the option @ @ @ @ @ @ @ to bullish on $ MSFT so want to collect premium by selling a put .
Look at the option chain for 12/31 $ MSFT below .
We can sell the $ MSFT 12/31 $ 205.0P and be credited $ 2.41 , or $ 241.0 .
There are a few things that can happen .
When you do this , you will need $ 20,500 to be a cash secured put .
( Strike Price * 100 = Necessary Collateral ) • The price of the underlying goes up , and the seller of @ @ @ @ @ @ @ to Close the contract .
We have no further obligation to sell any shares at the strike price and the money that was held for collateral is released .
The profit of the contract is simply the difference in the premium when we Sold to Open and the now lower premium when we Buy to Close .
• The price of the underlying trades sideways .
This will result in theta decay of the option and we can Buy to Close once we hit our desired exit price or % gain .
• @ @ @ @ @ @ @ the strike price .
If this happens you can : • Buy to Close at a loss to release your collateral .
This might be a significant loss • Be assigned the stock .
By doing so you have now aggressively entered $ MSFT at a lower price than it was on the day you sold the OTM Put .
As soon as you get assigned the shares , guess what we can do ?
Sell to Open a Covered Call Some quick notes on the CSP , you should only sell CSPs @ @ @ @ @ @ @ assigned and ones that you are bullish on .
Selling CSPs and CCs are the fundamentals of doing a strategy called the wheel , but not a strategy I am going to get into with this post .
Debit spreads are a way to bet on the directional movement of a stock while reducing both your maximum loss and your potential profit .
This is done by Buying to Open a call while Selling to Open a call with a higher strike price .
This allows us to use the credit received from @ @ @ @ @ @ @ to help lower the cost of the option we Buy to Open ( +1 ) .
Look at the $ MSFT 12/31 options chain below .
We want to Buy to Open the $ MSFT 12/31 $ 220.0 call , which would cost us $ 4.15 if we do not use a debit spread .
BUT if we simultaneously Sell to Open the $ 225.0C for $ 2.56 , we can lower the DEBIT we would need to open this trade .
• This lowers the debit we need to pay for our @ @ @ @ @ @ @ 4.15 – $ 2.56 = $ 1.59 ) • This limits our max profit we can receive from the trade to the difference in the strike prices , so [ ( $ 225.0 – $ 220.0 ) * 100 ] – $ 159 = $ 341 .
Check out this example put into Robinhood desktop below .
Notice my absolutely God Awful drawings .
We need to confirm that we have selected the right strike prices on the right expiration , and that we are DEFINITELY Buying to Open the lower strike and @ @ @ @ @ @ @ strike .
Robinhood helps us autists by putting a “ Call Debit Spread ” by our order .
If it says anything but this , you fucked up .
Notice circle 2 , where we can see the strikes of the Calls we have chosen to Buy/Sell .
Below is what it looks like in mobile .
Below is a P/L chart I created with optioncreator.com .
This chart is only applicable on the day of expiration and will change depending on DTE and volatility .
Notice how our max loss is realized @ @ @ @ @ @ @ long call , increases , then it flattens out and is capped regardless of the price of the underlying at our max profit at stock prices $ 225.0 and beyond .
The process is exactly the same but inverted .
You are Buying to Open a put and Selling to Open a put with a lower strike price , but the principles are all the same .
If you don ’ t understand this , let me know and I can type out a full example like the one above .
I hope @ @ @ @ @ @ @ one have been helpful .
I think these strategies will give everyone on this sub an advantage over the house we are trying to beat .
Again , best of luck .
Trade well .
Trade with passion .
YOLO but YOLO smart .
P.S .
Due to the positive response from last one I will continue to create these until told to royally fuck off .
I am also creating a YouTube to explain these as best as I can and share my portfolio and my trading strategy .
If you ’ @ @ @ @ @ @ @ a message and I ’ ll send it out when its off the ground .
I will not solicit on this page ever .
If you are smarter than me and find errors ( which I ’ m sure there are ) comment so I can fix .
Edit 1 : Fixed a problem with one of the pictures not uploading .
Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article .
Do you own due diligence or consult @ @ @ @ @ @ @ decision .

via WSB:
Alright Neanderthals, (if you understand CCs, CSPs, The Wheel, Debit Spreads, move along)
I’m back with a second post explaining option things. I was overwhelmed by the positive feedback from the first post, which can be read here. Before proceeding, you need to have a fundamental understanding of the following topics (if you can answer these questions you’re set):
What is a call/put?
What is the difference between Selling to Open and Buying to Open? Which has more inherent risk and why?
What are At the Money/In the Money/Out of the Money for both calls and puts?
What is intrinsic value?
What is extrinsic value?
If you can’t answer any of these please read the first post or simply Google/YouTube the things you do not understand. If you are really struggling with any of them and you’ve tried these resources please don’t hesitate to message me or ask your question in the comments of the first post.
In this post, we are going to cover:
Credit vs. Debit
Selling Covered Calls vs. Naked Calls
Cost Basis
Selling Cash Secured Puts
Debit Spreads
Grab your phone, open up your brokerage, and follow along. I encourage the consumption of bourbon on the rocks and the listening of Mac Miller during the reading of this post.
Credit vs. Debit
Credit – any money that a trader collects as a result of selling an option. For selling calls/puts, if the seller places an Ask and the order gets filled, they will be credited with the money, meaning that it will immediately be placed into your account.
as a result of selling an option. For selling calls/puts, if the seller places an Ask and the order gets filled, they will be credited with the money, meaning that it will immediately be placed into your account. Debit – any money that a trader pays as a result of buying an option. For buying calls/puts, if the buyer places a Bid and the order gets filled, they ill pay the money for that option, and now they own that option.
Selling Covered Calls vs. Naked Calls
Covered calls are an option strategy where the trader uses 100 shares of the underlying as collateral to sell calls. The sold calls should be out of the money and always needs to be above the cost basis of the owned stock to avoid loss. This is a safer strategy than selling naked calls (selling a call when you do NOT own 100 shares of the underlying) because if the price of the stock breaks through the strike price and the buyer exercises you will not realize an immediate loss by buying shares above the strike and selling them for the strike. Lots of words, lets take a look. I, again, am going to use $MSFT as an example. This is only an example, any sentiment towards this stock expressed is solely hypothetical.
We’re neutral to bearish on $MSFT and don’t think there will be any significant price spikes in the underlying. We’ll look at selling naked calls first. Below is the 12/31 options chain for $MSFT Calls.

preview.redd.it/3ogjfcs7iw261.jpg?width=885&format=pjpg&auto=webp&s=6b2cc8b36f737034b0f1945b8b5f46d4e72bc8b2
We think $MSFT is going to trade sideways or decrease in value, so we are going to sell the 12/31 $220.0C. You put in an ask for $4.05 and it is filled, so that $4.05 is technically immediately credited into your account. Robinhood will not immediately show this in your account because it is an open contract but as the option price changes those changes will be reflected on your daily P/L chart.
Best case scenario for you: $MSFT trades sideways or decreases in value, resulting in the option decreasing in value. At any point when the option is under the price you paid for it you could Buy to Close the call and that would be your realized profit. For example, on 12/15 $MSFT is trading at $200.0, the call is now worth $2.05, so you could buy to close your contract and your gain would be $4.05 – $2.05 = $2.00, or $200.
Worst case scenario: You go to sleep in the evening, smiling because you think you made an easy $4.05, you’ve figured out how to beat the market. BUT $MSFT announces that it has been contracted by NASA to put computers on the Moon. $MSFT rockets up to $300. The person that bought your calls decides to exercise, this means that you would have to BUY 100 shares of $MSFT at the current market price and sell them at the strike price, or $220.0. Your max loss would be [($300 – $220) x 100] – $405 = $7,595.0. If the price went higher or you had more than 1 open contract you could see how this is insane risk. THIS IS WHY I HIGHLY RECOMMEND NOT SELLING NAKED CALLS.
Covered Calls – Now lets say we have 100 shares of $MSFT that we bought during a dip at $205.0. We are bullish on the stock and are holding long but don’t think that it will go to $220.0 from $214.0 so we sell the same call. Again, the money is credited to the account.
Best case scenario the stock finishes just below the strike on the expiration date and you can sell another call further out for more premium. If the stock is at $219.0 on the day of expiration, you can just sell a $230.0 call further out and collect more premium. You can continue this until you are assigned the stock.
Worst case? The underlying goes through the strike to $225. Your total gains for the trade would be [($220.0 – $205.) x100] + $405 = $1,905.0. Now, if you hadn’t sold the call you would have realized more gains if you sold the 100 shares at $225, but only by $95. THE IMPORTANT PART IS THAT BECAUSE YOU HAVE 100 SHARES AS COLLATERAL YOU DO NOT HAVE TO BUY THEM AT THE CURRENT MARKET PRICE.
Cost Basis
Cost basis is the price you paid for a stock minus any credit you have received for selling covered calls, receiving dividends, etc. This is done at the single stock level.
Example: We buy 100 shares of $WSB at $100.0 per share We Sell to Open an OTM Covered Call on $WSB for $1.00. Our 50% profit trigger is hit, and we Buy to Close the contract at $.50. Our new cost basis is ($100.0 – $.50 = $99.5) We Sell to Open another OTM Covered Call on $WSB for $1.00, but this time we let it expire worthless. Our new cost basis is ($99.5 – $1.0 = $98.5).
Cost Basis is important when selling covered calls because you should not sell covered calls for a strike price that is less than your cost basis.
Example: Our cost basis on $WSB after a few CCs is now $90.0 and is trading at $110.0
$WSB takes a little nose dive with the market and falls to $80.0. If we sell an $85.0 CC for $1.00, we reduce our Cost Basis to $89.0, but if we are assigned, we realize a total loss of $400.0 if the stock finishes anywhere above the strike price and is exercised.
Selling Cash Secured Puts
The risk associated with selling naked puts is the same as selling naked calls, but reverse. If you sell a put, the stock tanks, you are now obligated to buy from the owner of the option the stock on the higher price than market. For example, you sell a $20 put, the stock falls to $10 and the owner decides to exercise the option, you are now OBLIGATED to buy 100 shares at $20.0, when they are selling on the open market for $10. Your loss would therefore be [(20.0-10.0) * 100] – credited premium = Max Loss.
Selling a cash secured put is selling a put with an adequate amount of cash available to buy the shares if the underlying does drop below the strike and the option is exercised.
Suppose we are neutral to bullish on $MSFT so want to collect premium by selling a put. Look at the option chain for 12/31 $MSFT below.

preview.redd.it/uk00p9qj3w261.jpg?width=882&format=pjpg&auto=webp&s=8e785e8ae40260339e52dc44034187fbc63551e9
We can sell the $MSFT 12/31 $205.0P and be credited $2.41, or $241.0. There are a few things that can happen. When you do this, you will need $20,500 to be a cash secured put. (Strike Price * 100 = Necessary Collateral)
The price of the underlying goes up, and the seller of the option (us) can Buy to Close the contract. We have no further obligation to sell any shares at the strike price and the money that was held for collateral is released. The profit of the contract is simply the difference in the premium when we Sold to Open and the now lower premium when we Buy to Close.
The price of the underlying trades sideways. This will result in theta decay of the option and we can Buy to Close once we hit our desired exit price or % gain.
The price of the underlying drops below the strike price. If this happens you can: Buy to Close at a loss to release your collateral. This might be a significant loss Be assigned the stock. By doing so you have now aggressively entered $MSFT at a lower price than it was on the day you sold the OTM Put. As soon as you get assigned the shares, guess what we can do? Sell to Open a Covered Call
Some quick notes on the CSP, you should only sell CSPs on stocks you are comfortable with being assigned and ones that you are bullish on.
Selling CSPs and CCs are the fundamentals of doing a strategy called the wheel, but not a strategy I am going to get into with this post.
Debit Spreads
Debit spreads are a way to bet on the directional movement of a stock while reducing both your maximum loss and your potential profit.
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Call Debit Spreads
This is done by Buying to Open a call while Selling to Open a call with a higher strike price. This allows us to use the credit received from Selling to Open (-1) contract to help lower the cost of the option we Buy to Open (+1). Look at the $MSFT 12/31 options chain below.

preview.redd.it/k20t4uy48w261.jpg?width=888&format=pjpg&auto=webp&s=cde6714f5d20c7a86651e713b226fbfe4f0b624f
We want to Buy to Open the $MSFT 12/31 $220.0 call, which would cost us $4.15 if we do not use a debit spread. BUT if we simultaneously Sell to Open the $225.0C for $2.56, we can lower the DEBIT we would need to open this trade.
This lowers the debit we need to pay for our trade from $4.15 to ($4.15 – $2.56 = $1.59) This limits our max profit we can receive from the trade to the difference in the strike prices, so [($225.0 – $220.0) * 100] – $159 = $341.
Check out this example put into Robinhood desktop below.

preview.redd.it/fl46ylb3bw261.jpg?width=1317&format=pjpg&auto=webp&s=f49eba1d7ceaf4ad64aebe85fd765aad426ac3cc
Notice my absolutely God Awful drawings. We need to confirm that we have selected the right strike prices on the right expiration, and that we are DEFINITELY Buying to Open the lower strike and Selling to Open the further OTM higher strike. Robinhood helps us autists by putting a “Call Debit Spread” by our order. If it says anything but this, you fucked up. Notice circle 2, where we can see the strikes of the Calls we have chosen to Buy/Sell. Below is what it looks like in mobile.

preview.redd.it/3y4e47tlew261.png?width=828&format=png&auto=webp&s=1c87ee245fac4ac48067bb8ea8c7b4d10612218a
preview.redd.it/iltws7tlew261.png?width=828&format=png&auto=webp&s=54325eb21995aeb479c90f4f759d92fc56082155
Below is a P/L chart I created with optioncreator.com. This chart is only applicable on the day of expiration and will change depending on DTE and volatility.

preview.redd.it/ivge56pwew261.jpg?width=1407&format=pjpg&auto=webp&s=44946041b92c31004c74fb4807d95cb7f1e2bb0e
Notice how our max loss is realized until the stock price passes through our long call, increases, then it flattens out and is capped regardless of the price of the underlying at our max profit at stock prices $225.0 and beyond.
Put Debit Spreads
The process is exactly the same but inverted. You are Buying to Open a put and Selling to Open a put with a lower strike price, but the principles are all the same. If you don’t understand this, let me know and I can type out a full example like the one above.
Conclusion
I hope that this in addition to the first one have been helpful. I think these strategies will give everyone on this sub an advantage over the house we are trying to beat. Again, best of luck. Trade well. Trade with passion. YOLO but YOLO smart.
Panda.
P.S. Due to the positive response from last one I will continue to create these until told to royally fuck off. I am also creating a YouTube to explain these as best as I can and share my portfolio and my trading strategy. If you’re interested in seeing them send me a message and I’ll send it out when its off the ground. I will not solicit on this page ever.
If you are smarter than me and find errors (which I’m sure there are) comment so I can fix.

Edit 1: Fixed a problem with one of the pictures not uploading.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.


investmentwatchblog--2020-12-03--Up to 40 states plan to sue Facebook for antitrust next week – CNBC

• A group of U.S. states led by New York is investigating Facebook Inc for possible antitrust violations and plans @ @ @ @ @ the social media giant next week , four sources familiar with the matter said on @ @ @ @ @ would be the second major lawsuit filed against a Big Tech company this year .
@ @ @ @ @ Inc ’ s Google in October .
A group of U.S. states led by New @ @ @ @ @ possible antitrust violations and plans to file a lawsuit against the social media giant next @ @ @ @ @ with the matter said on Wednesday .
The complaint would be the second major lawsuit @ @ @ @ @ company this year .
The Justice Department sued Alphabet ’ s Google in October .

A group of U.S. states led by New York is investigating Facebook Inc for possible antitrust violations and plans to file a lawsuit against the social media giant next week, four sources familiar with the matter said on Wednesday.
The complaint would be the second major lawsuit filed against a Big Tech company this year. The Justice Department sued Alphabet Inc’s Google in October.
A group of U.S. states led by New York is investigating Facebook for possible antitrust violations and plans to file a lawsuit against the social media giant next week, four sources familiar with the matter said on Wednesday.
The complaint would be the second major lawsuit filed against a Big Tech company this year. The Justice Department sued Alphabet’s Google in October.
We are primarily funded by readers. Please subscribe and donate to support us!
www.cnbc.com/2020/12/02/us-states-plan-to-sue-facebook-next-week-sources-say.html?source=content_type%3Areact%7Cfirst_level_url%3Anews%7Csection%3Amain_content%7Cbutton%3Abody_link


investmentwatchblog--2020-12-03--Roblox – A first look into valuation before the IPO

With news of a Roblox IPO , I decide to dive into this company to see what the hype is about .
When Roblox was first brought to my attention , I thought they were some sort of gimmick legos .
Full disclosure , I have never played this game , but I did play Runescape many , many years ago .
Chopped the hell out of some Yew trees .
This makes me not the least qualified to gauge Roblox as a video game , but we are gauging its potential as a stock instead .
• Roblox is @ @ @ @ @ @ @ gather together to imagine , create , and share experiences with each other in immersive , user-generated 3D worlds • Roblox plans to IPO before Christmas , so we take a look at the rumored valuation of $ 8bn • Covid-19 has generated a huge boost to traffic with Daily Active Users ( ( DAUs ) ) growing 82 % , hours engaged growing 122 % , revenue growing 68 % , bookings growing 171 % , and a large $ 292.6 mm in free cash flow in the nine months ended Sept @ @ @ @ @ @ @ depends on Roblox ’ s ability to continue growing once the Covid pandemic is in the rear-view mirror Roblox Business and Technology : Roblox was founded in 2003 and has hit many milestones before the planned IPO launch .
The most important recent developments being the Joint Venture with Tencent to establish Roblox China and re-launching Roblox Premium to develop a subscriber base with steadier cash flows .
The Roblox business model is based on the underlying technology and infrastructure that support the 31.1 million average DAUs .
Roblox defines a DAU as @ @ @ @ @ @ @ and visited Roblox through our website or application on a unique registered account on a given calendar day .
If a registered , logged in user visits Roblox more than once within a 24-hour period that spans two calendar days , that user is counted as a DAU only for the first calendar day ” ( source : company S-1 ) .
This business is based on three elements : • Roblox Client : The underlying app that allows users to explore 3D worlds • Roblox Studio : The toolset that enables developers @ @ @ @ @ @ @ and operate 3D experiences and content • Roblox Cloud : The services and infrastructure that power the platform We think this is what Roblox players do , but we can ’ t be sure The Roblox platform and the key technology characteristics are as follows : • Identity : The Roblox avatar system allows users to create and personalize their unique 3D identities .
There are a wide variety of character styles .
• Friends : The Roblox Client allows users to connect through various means , including detecting nearby players or meeting @ @ @ @ @ @ @ graph created by these connections is stored in the Roblox Cloud .
The Roblox Platform supports text-based chat among users sharing the same 3D experience and between users connected through the social graph .
• Immersion : The Roblox platform allows developers to build deeply immersive 3D environments where users can share experiences .
• Low friction : Users have the ability to interact with experiences almost instantly , on most popular client devices , and from anywhere in the world over existing broadband and cellular networks .
When a user joins an @ @ @ @ @ @ @ that user to a particular game instance based on the user ’ s social graph , geographic location , spoken language , and age group .
• Variety of content : Roblox provides developers with reference material , tutorials , community forums , and analytics to build their creations .
Developers and creators build nearly all of the content for the Roblox Platform .
Once content is built , it can be replicated and shared across multiple experiences giving developers the ability to scale their efforts and make rapid updates .
There were @ @ @ @ @ @ @ of Sept 30 , 2020 .
• Global : The Roblox Platform serves a global audience .
In the nine months ended September 30 , 2020 , developers from over 170 countries and users spanning over 180 countries accessed the platform .
• Economy : Roblox has a vibrant economy built on a currency called Robux , which can be purchased .
Developers and creators earn Robux by selling access to virtual content or by driving engagement of Premium subscribers through an engagement-based payout system .
When Premium subscribers spend time in a @ @ @ @ @ @ @ earns a prorated share of the user ’ s monthly subscription fee .
Robux , the currency of the online Roblox world , buying options Developer Incentives : With nearly the entire Roblox online universe being built by the ingenuity of developers and creators , Roblox has developed a system to incentivize natural development expansion .
Roblox currently offers developers and creators four ways to earn Robux : • The sale of access to their experiences and enhancements to these experiences • Engagement-based payouts – rewarding developers for the amount for time that @ @ @ @ @ @ @ The sale of content and tools between developers • Sale of items to users through the Avatar marketplace As users purchase and spend their Robux on Roblox , developers receive 70 % of the Robux spent within their experiences and 70 % of the items that appear in the Studio marketplace .
Creators receive 30 % of the Robux spent for their items on the Avatar marketplace .
Example of a store from Mining Simulator by Runaway Rumble within Roblox These earned Robux are deposited into virtual accounts where developers can convert Robux @ @ @ @ @ @ @ of 1 Robux to $ 0.0035 .
In the nine months ended Sept 30 , 2020 , developers and creators earned $ 209.2 mm , up from $ 72.2 mm in the nine months ended Sept 30 , 2019 .
Clearly , the Roblox developers and creators are also benefiting from the massive spike in users on Roblox .
Current Roblox Business Profile : When users sign up for Roblox , they can create an avatar and explore the vast majority of experiences for free , although the business model for any experience @ @ @ @ @ @ @ Users can purchase Robux either as one-time purchases or via Roblox Premium , a subscription service billed monthly .
For one-time purchases , users can purchase the virtual currency through various channels including the Apple App Store , Google Play Store , credit cards , prepaid cards , Microsoft app store , PayPal , and others .
For the nine months ended September 30 , 2020 , 34 % and 18 % of Roblox revenue was generated on Apple App Store and Google Play Store , respectively .
For operations through both the @ @ @ @ @ @ @ , Roblox must pay the customary 30 % to Apple or Google .
Roblox has managed to rapidly expand its DAU base .
Roblox has grown its DAU count by 94.9 % and 96.9 % in Q2 and Q3 of this year , respectively .
DAUs are up in every geographic region with the Rest of the World segment growth being particularly impressive .
However , Roblox acknowledges that this upsurge in growth during the pandemic may not be sustainable when they say , “ We do not expect these activity levels to @ @ @ @ @ @ @ we expect growth rates for our revenue to decline , and we may not experience any growth in bookings or our user base during periods where we are comparing against COVID-19 impacted periods ” ( source : company S-1 ) .
The growth profile and future look of Roblox as an attractive investment hinges on their ability to keep the surge in DAU growth they ’ ve experienced as a result of the pandemic and then continue to grow their DAUs ( albeit at a slower pace compared to 2020 ) .
The @ @ @ @ @ @ @ DAUs in the nine months ended Sept 30 , 2020 are under the age of 13 .
DAUs drive spending , and Roblox has seen the average bookings per DAU increase as well .
Bookings are defined as “ equal to the amount of virtual currency purchased by users in a given period of time ” ( source : company S-1 ) .
Therefore , we can expect bookings to be the most widely watched metric every quarterly earnings release , not revenue .
DAUs and average bookings per DAU growth are the @ @ @ @ @ @ @ • Cost of revenue – 3rd party payment processing such as Apple and Google app stores – 12.5 % of Bookings YTD • Developer exchange fees – amount earned by developers and creators on the Roblox platform – 16.9 % of Bookings YTD • R & D , G & A , and Sales and marketing – 19.8 % of Bookings YTD As you can see from the chart above , the Loss from Operations has widened significantly the past 4 quarters .
However , this is slightly misleading because the company is @ @ @ @ @ @ @ been generating more cash flow , not less .
The reason for this is the method the company uses to recognize revenue vs bookings .
On revenue recognition , “ We generally recognize revenue from users ratably over the average lifetime of a paying user , which for the years ending December 31 , 2018 and 2019 was 23 months .
Therefore , much of the revenue we report in each quarter is the result of purchases of Robux during previous periods ” ( source : company S-1 ) .
And bookings – @ @ @ @ @ @ @ generated from sales of our virtual currency which we record as deferred revenue and then recognize that revenue over the estimated average lifetime of a paying user ” ( source : company S-1 ) .
So these accounting losses don ’ t necessarily matter because the company is free cash flow positive .
As we can see in the table of bookings and revenue , revenue as a % of bookings declined from 70 % in 2019 to 38.4 % and 48.8 % in Q2 and Q3 2020 respectively .
Roblox Growth strategy @ @ @ @ @ @ @ strategies in order to achieve growth : • Platform extension : Roblox is continually investing in the platform including in avatars , experiences , technology , and other social features .
These efforts can further drive bookings per DAU .
• Age demographic expansion : Roblox and developers are working on building higher quality experiences and content that appeal to an older age demographic .
These efforts can drive DAU growth as well as bookings per DAU as older people don ’ t have to beg mom and dad for their credit card @ @ @ @ @ @ @ with Tencent in China is a testament to Roblox ’ s ability to grow internationally into new markets .
• Further monetization : Roblox is working with their developer community actively to help improve monetization .
Efforts such as Roblox premium being introduced in August 2019 as well as working with leading brands to build unique marketing opportunities on the Roblox platform can further drive monetization .
Massively Multiplayer Online Gaming Market : The MMO market has increased rapidly and has hit over 16 million total players .
( source ) We take @ @ @ @ @ @ @ growth to get a sense of the growth that Roblox may be able to achieve in the near future and beyond .
The total number of players dipped in 2019 , but the trend is clear with around a 28.5 % CAGR in total MMO players over the past 3 years .
We also take a look at the MMO arguably most similar to Roblox , Minecraft .
Minecraft is owned by Microsoft and they have released intermittent data points on the number of active players on the platform .
The number of @ @ @ @ @ @ @ 40 million in June 2016 to 126 million as of May 2020 .
We have only 5 total data points in this time-frame , but this indicates a 33 % CAGR over the period and it has accelerated from October 2018 to May 2020 .
Can Roblox experience a similar level of growth in active players ?
Roblox Forecast : The basis of our valuation is Bookings per user growth , DAU by region growth , and expenses as a % of Bookings .
Bookings per User have grown 68.6 % and 52.5 @ @ @ @ @ @ @ respectively .
We think they continue to grow at a high pace in Q4 and Q1 of next year .
However , growth will then decelerate as the populations are vaccinated and people start to live their lives as normal once again , thus removing a tailwind for online gaming .
We have Bookings per user growing 20.6 % in 2021 , 10 % in 2022 , 7.5 % in 2023 , and 5 % in subsequent years .
For example , this deceleration in each DAU spend gives us a quarterly spend @ @ @ @ @ @ @ 2024 .
DAUs have grown rapidly during the pandemic , and likewise we expect this growth to decelerate as the pandemic draws to a close .
We forecast that Roblox will consolidate its Covid user-base gains , and grow an additional 12.5 % in DAUs in 2021 , 7.5 % in 2022 , and 5 % every subsequent year .
This means that Roblox will pass 50 million DAUs in 2024 and will have close to 60 million in 2030 .
We forecast that Roblox ’ s costs and expenses will increase , @ @ @ @ @ @ @ decrease as a % of Bookings in the future .
We anticipate that Roblox will be able to consolidate its cost profile so far experienced in 2020 and will have a cost profile ~60 % of Bookings in the future , with the largest contributors to cost being cost of revenue , developer exchange fees , and infrastructure where it is more difficult to create efficiencies through scale .
For some scenario analyses of what the company bookings will be in 2025 , we look at different ranges of DAU growth and Bookings @ @ @ @ @ @ @ averaged 31.1mm DAUs in 2020 , and we run scenarios from 22mn to 92mm DAUs in 2025 .
Likewise , we grow average bookings anywhere from 0 % to 17.5 % a year .
We estimate the likeliest bookings range to be $ 2.9bn to $ 5.4bn in 2025 , compared to the estimated $ 1.8bn in bookings for full-year 2020 .
Valuation : We value Roblox through a Discounted cash flow model with a weighted average cost of capital ( WACC ) of 8 % and a perpetual growth rate of 4 @ @ @ @ @ @ @ get an equity value per share of around $ 26.50 .
With the rumors of Roblox seeking a valuation of ~ $ 8bn ( source ) , we get 114 % upside .
Just for fun , we run a scenario where we give Roblox decrease DAUs -5 % and give 0 % growth in bookings per DAU , while keeping the same cost profile , for the final three quarters of 2021 ( when the pandemic winds down ) .
We then grow at an anemic rate in DAUs in the future @ @ @ @ @ @ @ % a year onward , we get a price target of ~ $ 18.30 and an equity value close to $ 12bn .
Younger audience : With 55.6 % of DAUs under the age of 13 , how likely is it that they stay on the Roblox platform , we don ’ t have a definitive answer .
Kids so young move to the next hottest game very easily and quickly and therefore it is crucial that Roblox continue to capture and keep their attention in order to grow their DAU count .
@ @ @ @ @ @ @ of the first risk , the MMO gaming market is incredibly competitive and Roblox will need to continue to innovate and develop its platform to stay ahead of the competition .
We aren ’ t aware of any new releases that directly challenge Roblox ’ s position as one of the most widely played games in the world , but new video games and revamps of old games happen all the time .
We look forward to seeing how Roblox continues to differentiate itself in the gaming market from competitors and whether these @ @ @ @ @ @ @ consolidate Covid user-base gains : Once the pandemic ends will the majority of DAUs gained no longer play Roblox or play/spend less ?
Our model assumes that the company is able to keep the majority of its DAUs and continue to grow , but this is truly a risk without a real precedent .
If you would like to see the model yourself and change assumptions as you see fit , you can download it for free here : millennialmkts.com/2020/12/02/roblox-valuation-a-first-look/ TLDR ; This stock has a very positive story and a lot of @ @ @ @ @ @ @ consolidated and future growth can be achieved .
We look to the pricing of the IPO .
I ’ ve already seen it hyped on here and been asked about it so this will surely pop to moon *rocket ship emoji* Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article .
Do you own due diligence or consult your financial professional before making any investment decision .

by 2021mba_throwaway
With news of a Roblox IPO, I decide to dive into this company to see what the hype is about. When Roblox was first brought to my attention, I thought they were some sort of gimmick legos. Full disclosure, I have never played this game, but I did play Runescape many, many years ago. Chopped the hell out of some Yew trees. This makes me not the least qualified to gauge Roblox as a video game, but we are gauging its potential as a stock instead.
Roblox is a global platform where millions of people gather together to imagine, create, and share experiences with each other in immersive, user-generated 3D worlds
Roblox plans to IPO before Christmas, so we take a look at the rumored valuation of $8bn
Covid-19 has generated a huge boost to traffic with Daily Active Users ((DAUs)) growing 82%, hours engaged growing 122%, revenue growing 68%, bookings growing 171%, and a large $292.6 mm in free cash flow in the nine months ended Sept 30, 2020
The valuation story depends on Roblox’s ability to continue growing once the Covid pandemic is in the rear-view mirror
Roblox Business and Technology: Roblox was founded in 2003 and has hit many milestones before the planned IPO launch. The most important recent developments being the Joint Venture with Tencent to establish Roblox China and re-launching Roblox Premium to develop a subscriber base with steadier cash flows.

Source: company S-1
The Roblox business model is based on the underlying technology and infrastructure that support the 31.1 million average DAUs. Roblox defines a DAU as “a user who has logged in and visited Roblox through our website or application on a unique registered account on a given calendar day. If a registered, logged in user visits Roblox more than once within a 24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day” (source: company S-1).
This business is based on three elements:
Roblox Client: The underlying app that allows users to explore 3D worlds
The underlying app that allows users to explore 3D worlds Roblox Studio: The toolset that enables developers and creators to build, publish, and operate 3D experiences and content
The toolset that enables developers and creators to build, publish, and operate 3D experiences and content Roblox Cloud: The services and infrastructure that power the platform
We think this is what Roblox players do, but we can’t be sure
The Roblox platform and the key technology characteristics are as follows:
Identity: The Roblox avatar system allows users to create and personalize their unique 3D identities. There are a wide variety of character styles.
Friends: The Roblox Client allows users to connect through various means, including detecting nearby players or meeting in the Roblox world. The social graph created by these connections is stored in the Roblox Cloud. The Roblox Platform supports text-based chat among users sharing the same 3D experience and between users connected through the social graph.
Immersion: The Roblox platform allows developers to build deeply immersive 3D environments where users can share experiences.
Low friction: Users have the ability to interact with experiences almost instantly, on most popular client devices, and from anywhere in the world over existing broadband and cellular networks. When a user joins an online experience, the Roblox Cloud assigns that user to a particular game instance based on the user’s social graph, geographic location, spoken language, and age group.
Variety of content: Roblox provides developers with reference material, tutorials, community forums, and analytics to build their creations. Developers and creators build nearly all of the content for the Roblox Platform. Once content is built, it can be replicated and shared across multiple experiences giving developers the ability to scale their efforts and make rapid updates. There were over 18 million experiences on Roblox as of Sept 30, 2020.
Once content is built, it can be replicated and shared across multiple experiences giving developers the ability to scale their efforts and make rapid updates. There were over 18 million experiences on Roblox as of Sept 30, 2020. Global: The Roblox Platform serves a global audience. In the nine months ended September 30, 2020, developers from over 170 countries and users spanning over 180 countries accessed the platform.
Economy: Roblox has a vibrant economy built on a currency called Robux, which can be purchased. Developers and creators earn Robux by selling access to virtual content or by driving engagement of Premium subscribers through an engagement-based payout system. When Premium subscribers spend time in a developer’s experience, that developer earns a prorated share of the user’s monthly subscription fee.
Robux, the currency of the online Roblox world, buying options
Developer Incentives: With nearly the entire Roblox online universe being built by the ingenuity of developers and creators, Roblox has developed a system to incentivize natural development expansion.
Roblox currently offers developers and creators four ways to earn Robux:
The sale of access to their experiences and enhancements to these experiences
Engagement-based payouts – rewarding developers for the amount for time that Premium subscribers spend in their experiences
The sale of content and tools between developers
Sale of items to users through the Avatar marketplace
As users purchase and spend their Robux on Roblox, developers receive 70% of the Robux spent within their experiences and 70% of the items that appear in the Studio marketplace. Creators receive 30% of the Robux spent for their items on the Avatar marketplace.
Example of a store from Mining Simulator by Runaway Rumble within Roblox
These earned Robux are deposited into virtual accounts where developers can convert Robux into U.S. dollars at an exchange rate of 1 Robux to $0.0035. In the nine months ended Sept 30, 2020, developers and creators earned $209.2 mm, up from $72.2 mm in the nine months ended Sept 30, 2019. Clearly, the Roblox developers and creators are also benefiting from the massive spike in users on Roblox.
Current Roblox Business Profile: When users sign up for Roblox, they can create an avatar and explore the vast majority of experiences for free, although the business model for any experience is ultimately up to the developer. Users can purchase Robux either as one-time purchases or via Roblox Premium, a subscription service billed monthly.
For one-time purchases, users can purchase the virtual currency through various channels including the Apple App Store, Google Play Store, credit cards, prepaid cards, Microsoft app store, PayPal, and others. For the nine months ended September 30, 2020, 34% and 18% of Roblox revenue was generated on Apple App Store and Google Play Store, respectively. For operations through both the Apple App Store and Google Play Store, Roblox must pay the customary 30% to Apple or Google.
Roblox has managed to rapidly expand its DAU base.

source: Company and our estimates
Roblox has grown its DAU count by 94.9% and 96.9% in Q2 and Q3 of this year, respectively. DAUs are up in every geographic region with the Rest of the World segment growth being particularly impressive. However, Roblox acknowledges that this upsurge in growth during the pandemic may not be sustainable when they say, “We do not expect these activity levels to be sustained, and in future periods we expect growth rates for our revenue to decline, and we may not experience any growth in bookings or our user base during periods where we are comparing against COVID-19 impacted periods” (source: company S-1).
The growth profile and future look of Roblox as an attractive investment hinges on their ability to keep the surge in DAU growth they’ve experienced as a result of the pandemic and then continue to grow their DAUs (albeit at a slower pace compared to 2020).
The DAU metrics show that 55.6% of DAUs in the nine months ended Sept 30, 2020 are under the age of 13.
source: company S-1
DAUs drive spending, and Roblox has seen the average bookings per DAU increase as well. Bookings are defined as “equal to the amount of virtual currency purchased by users in a given period of time” (source: company S-1). Therefore, we can expect bookings to be the most widely watched metric every quarterly earnings release, not revenue. DAUs and average bookings per DAU growth are the primary drivers in our valuation model.
Roblox Cost Profile: The major Roblox operating costs consist of
Cost of revenue – 3rd party payment processing such as Apple and Google app stores – 12.5% of Bookings YTD
Developer exchange fees – amount earned by developers and creators on the Roblox platform – 16.9% of Bookings YTD
Infrastructure – Data centers and technical support – 19.8% of Bookings YTD
R&D, G&A, and Sales and marketing – 19.8% of Bookings YTD
source: company and our estimates
As you can see from the chart above, the Loss from Operations has widened significantly the past 4 quarters. However, this is slightly misleading because the company is cash flow positive and the company has been generating more cash flow, not less.
source: company S-1
The reason for this is the method the company uses to recognize revenue vs bookings. On revenue recognition, “We generally recognize revenue from users ratably over the average lifetime of a paying user, which for the years ending December 31, 2018 and 2019 was 23 months. Therefore, much of the revenue we report in each quarter is the result of purchases of Robux during previous periods” (source: company S-1). And bookings – “Substantially all of our bookings are generated from sales of our virtual currency which we record as deferred revenue and then recognize that revenue over the estimated average lifetime of a paying user” (source: company S-1).
source: Company S-1
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So these accounting losses don’t necessarily matter because the company is free cash flow positive. As we can see in the table of bookings and revenue, revenue as a % of bookings declined from 70% in 2019 to 38.4% and 48.8% in Q2 and Q3 2020 respectively.
Roblox Growth strategy: Roblox is focused on four core strategies in order to achieve growth:
Platform extension: Roblox is continually investing in the platform including in avatars, experiences, technology, and other social features. These efforts can further drive bookings per DAU.
Age demographic expansion: Roblox and developers are working on building higher quality experiences and content that appeal to an older age demographic. These efforts can drive DAU growth as well as bookings per DAU as older people don’t have to beg mom and dad for their credit card.
International growth: The JV with Tencent in China is a testament to Roblox’s ability to grow internationally into new markets.
Further monetization: Roblox is working with their developer community actively to help improve monetization. Efforts such as Roblox premium being introduced in August 2019 as well as working with leading brands to build unique marketing opportunities on the Roblox platform can further drive monetization.
Massively Multiplayer Online Gaming Market: The MMO market has increased rapidly and has hit over 16 million total players. (source) We take a look at the market’s growth to get a sense of the growth that Roblox may be able to achieve in the near future and beyond. The total number of players dipped in 2019, but the trend is clear with around a 28.5% CAGR in total MMO players over the past 3 years.
Source: mmo-population.com/charts/players
We also take a look at the MMO arguably most similar to Roblox, Minecraft. Minecraft is owned by Microsoft and they have released intermittent data points on the number of active players on the platform. The number of active players on Minecraft has increased from 40 million in June 2016 to 126 million as of May 2020. We have only 5 total data points in this time-frame, but this indicates a 33% CAGR over the period and it has accelerated from October 2018 to May 2020. Can Roblox experience a similar level of growth in active players?

Source: Statista
Roblox Forecast: The basis of our valuation is Bookings per user growth, DAU by region growth, and expenses as a % of Bookings.
Bookings per User have grown 68.6% and 52.5% in Q2 and Q3 y/y, respectively. We think they continue to grow at a high pace in Q4 and Q1 of next year. However, growth will then decelerate as the populations are vaccinated and people start to live their lives as normal once again, thus removing a tailwind for online gaming.

source: company S-1
We have Bookings per user growing 20.6% in 2021, 10% in 2022, 7.5% in 2023, and 5% in subsequent years. For example, this deceleration in each DAU spend gives us a quarterly spend on over $20 a quarter in 2024.
DAUs have grown rapidly during the pandemic, and likewise we expect this growth to decelerate as the pandemic draws to a close. We forecast that Roblox will consolidate its Covid user-base gains, and grow an additional 12.5% in DAUs in 2021, 7.5% in 2022, and 5% every subsequent year. This means that Roblox will pass 50 million DAUs in 2024 and will have close to 60 million in 2030.
We forecast that Roblox’s costs and expenses will increase, but as a result of scaling will decrease as a % of Bookings in the future. We anticipate that Roblox will be able to consolidate its cost profile so far experienced in 2020 and will have a cost profile ~60% of Bookings in the future, with the largest contributors to cost being cost of revenue, developer exchange fees, and infrastructure where it is more difficult to create efficiencies through scale.

source: our estimates
For some scenario analyses of what the company bookings will be in 2025, we look at different ranges of DAU growth and Bookings per user growth. Roblox currently has averaged 31.1mm DAUs in 2020, and we run scenarios from 22mn to 92mm DAUs in 2025. Likewise, we grow average bookings anywhere from 0% to 17.5% a year. We estimate the likeliest bookings range to be $2.9bn to $5.4bn in 2025, compared to the estimated $1.8bn in bookings for full-year 2020.

source: our estimates
Valuation: We value Roblox through a Discounted cash flow model with a weighted average cost of capital (WACC) of 8% and a perpetual growth rate of 4%. With these assumptions, we get an equity value per share of around $26.50. With the rumors of Roblox seeking a valuation of ~$8bn (source), we get 114% upside.

source: our estimates
Just for fun, we run a scenario where we give Roblox decrease DAUs -5% and give 0% growth in bookings per DAU, while keeping the same cost profile, for the final three quarters of 2021 (when the pandemic winds down). We then grow at an anemic rate in DAUs in the future, 5% in 2022 and 2.5% a year onward, we get a price target of ~$18.30 and an equity value close to $12bn.
Risks to our View:
Younger audience: With 55.6% of DAUs under the age of 13, how likely is it that they stay on the Roblox platform, we don’t have a definitive answer. Kids so young move to the next hottest game very easily and quickly and therefore it is crucial that Roblox continue to capture and keep their attention in order to grow their DAU count.
MMO gaming market competition: An extension of the first risk, the MMO gaming market is incredibly competitive and Roblox will need to continue to innovate and develop its platform to stay ahead of the competition. We aren’t aware of any new releases that directly challenge Roblox’s position as one of the most widely played games in the world, but new video games and revamps of old games happen all the time. We look forward to seeing how Roblox continues to differentiate itself in the gaming market from competitors and whether these efforts will be successful.
Inability to consolidate Covid user-base gains: Once the pandemic ends will the majority of DAUs gained no longer play Roblox or play/spend less? Our model assumes that the company is able to keep the majority of its DAUs and continue to grow, but this is truly a risk without a real precedent.
If you would like to see the model yourself and change assumptions as you see fit, you can download it for free here: millennialmkts.com/2020/12/02/roblox-valuation-a-first-look/
TLDR; This stock has a very positive story and a lot of price upside if Covid-induced growth can be consolidated and future growth can be achieved. We look to the pricing of the IPO. I’ve already seen it hyped on here and been asked about it so this will surely pop to moon *rocket ship emoji*
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.


investmentwatchblog--2020-12-03--Elon Musk warns employees Tesla’s stock could ‘get crushed like a soufflé under a sledgehammer’

Tesla CEO Elon Musk is telling his employees they need to cut costs or they can kiss its lofty stock @ @ @ @ @ TSLA ) shares have been among the best performers in 2020 , rising nearly 600 @ @ @ @ @ making it among the most valuable stocks in the country , worth more than any @ @ @ @ @ of losses Tesla has now reported five straight quarters of positive net income .
But @ @ @ @ @ Musk acknowledged that Tesla ’ s actual profit margin is fairly low , only about @ @ @ @ @ the stock price is due to investor expectations of future profits rather than recent results @ @ @ @ @ any point , they conclude that ’ s not going to happen , our stock @ @ @ @ @ a soufflé under a sledgehammer !
” he wrote in the email , which was @ @ @ @ @ Tesla did not respond to a request for comment about the email .

Tesla CEO Elon Musk is telling his employees they need to cut costs or they can kiss its lofty stock price goodbye.
Tesla (TSLA) shares have been among the best performers in 2020, rising nearly 600% through Tuesday trading, making it among the most valuable stocks in the country, worth more than any major automaker. After years of losses Tesla has now reported five straight quarters of positive net income. But in an email to employees Musk acknowledged that Tesla’s actual profit margin is fairly low, only about 1%, and that the stock price is due to investor expectations of future profits rather than recent results. “If, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!” he wrote in the email, which was first reported by Electrek. Tesla did not respond to a request for comment about the email.