 Okay, hello and welcome to episode 44 of the market maker podcast where I'm joined by co-founder of amplified peers current and we're going to talk over quite a few things this week to give you a bit of an idea. It's a busy one to unpack we've had Biden's infrastructure bill got signed into law. Cryptocurrencies have had a pretty terrible week from the record high I think it was nine 10 days ago in in bitcoins down about 20% profit taking regulatory developments happening that were actually tied into that bill passage early this week. I've been pointed out as reasons oil prices and some some significant declines have been seen there comes in the US and China talking about tapping reserves apparently the administration US has been tapping up India and Japan to to get involved. I've talked about this plenty of times before, about how he needs to look like he's doing as much as he can, as much as analysts I think are pretty much of the thought that it ain't going to happen. But nonetheless, Biden and she had a virtual date, first time in a while seem to go off without a much of a hitch not that we're expecting a great deal to happen. But of course, it's pantomime season or soon to be. And so Brexit still going, not a lot has changed. I hate you I love you and back again. And we're pretty much at the same point, I won't go into the details but not a lot has changed as you can imagine so for this week, I wanted to focus on three things, kind of like we always do. So if you look at this explosion that we're seeing in the electric vehicle market, these EV pure plays, as they're being named. So I want to talk with peers about that. We're also going to have a chat about policy divergence we touched on this I think a week or two ago where we're talking about what's happening in Europe compared to US UK, but it came it materialized in market prices this week. The euro's got really badly hurt by what is this divergence of timing of when their policies kind of tied to essentially. So we'll delve into that and then we'll finish with a bit of a conversation on a single stock perspective on Netflix, because they made an announcement about changing of strategy that I think actually is very much needed. And I'll explain kind of why but before I get into the first question. I want to get we're on the mission to 100 and that is 100 Apple ratings and reviews. We're on 90 peers at the moment. Okay. We're closing in. 10 to go. 10 to go. So if you're listening if you have not yet rated this podcast and you enjoy it. Thank you. So go one step further for us and leave that rating and review because we just our target has been for the last couple of weeks to get it to 100 by year and then we're well on track but everyone counts so go and do it. All right. First question then. Let me give you peers a bit of what's been going on. You know, I mean we talked about Tesla a lot. I'm probably not going to talk about Tesla much. Actually, however, Tesla obviously is the key ingredient you could probably say of why everyone's obsessed at the moment by these EV moves but kind of to that I want to talk about and then we'll bring in some of the more traditional auto manufacturers Lucid Lucid group market value moved past Ford motor earlier this week Lucid was one of those SPAC deals. There's been many you can't lose count, but so context. So they went past Ford motor in their value to 89.9 billion following a 24% run up in their stock price, after executives are told investors at reservations reservations. Ford's first vehicles had jumped and that its production plans for 2020 were still on track. Of course, the company is not yet profitable. Still very much in the early days are generating revenue. In fact, it's Q3 revenues. What do you reckon? Q3 actual revenue. A quarter revenue yet for Lucid. It's fairly new company. You might need to revise that down a little bit. $232,000 US dollars. Whole quarter whole Q3 revenues 232,000 bucks and they're worth 90 billion. Okay, it goes further. Where did they get that from? Well, they're not selling any cars. Of course, they have made one yet. So where's that coming from? Formula E electric racing league is coming with the deal that they struck with them. They actually reported a net loss of 1.5 billion for the first nine months, including a loss of a half a billion for the quarter. So that was, this is again reignited it this week, but it comes after Rivian company with no revenues, big losses meant public exceeded. It's bigger of course, as we know, 100 billion. There are things there that I heard on a really good podcast I was listening to from the, you know, the FT huge organization they have specialists in these areas so I'm going to lean on him for some facts I think they're good ones as to a couple of things of Rivian, which was deep links with Amazon. So Amazon owns 20%. Yeah. So that's a big chunk. Well, and they ordered pre-ordered 100,000 trucks, wasn't it? Right, so they got 100k trucks and obviously getting into bed with the biggest logistical company in the planet that's growing and growing all of the time has amazing potential of course. One of the things this this analyst was highlighting was something called execution risk. Right. Which I think was just a good way of putting in he was talking about the ramping up of customer services, increasing production, he was talking about managing supply chains. You know, that was an extension of other things I started reading about okay so like lithium batteries like what's the key components of that and all of these car companies keep pumping out these numbers. Surely there's not enough of the material to meet these insane targets that they're putting out. I mean that that was the kind of context and he kind of bookended it with Volvo who listed very recently and Volvo have a electric sub-brand called Polestar. And when that lists, it's going to be bigger than the parent group. Yeah. What do you reckon? I think that we're in. Yeah, we're in insanity world. I think we finally arrived. And I think this EV kind of price or kind of valuation and kind of price behavior is ridiculous. But it's happening and so it's kind of I think the key kind of questions are why is it happening? You know, how is it possible? And then more importantly, I think, you know, what happens next with regards to price? I think I think, you know, we're definitely in an EV bubble. Definitely put Tesla right in that category as well. But it is ridiculous that companies that haven't even generated any revenue yet are getting valued like 100 billion or whatever Lucid was nearly there, right? And Rivian more than 100 billion. And I think it's crazy. I think partially it's to do with kind of if you missed out on the Tesla trade. And it's like, right, I'm not going to miss this next one. You know, it's so I think actually it's a it's quite a lot of psychology in here where investors missed out on the Tesla story and they want to get in early on this one because well they're going to be trillion plus businesses as well because they're going to be like Tesla. I think it's entirely irrational that thought process because a Tesla being over a trillion dollars in my humble opinion is not fair valuation. And I think that's way way overinflated. And number two, I mean at least Tesla are way down the track or way down the road here with regards to actually becoming a car manufacturing company. You know, in the end, as your FT mate was saying, execution risk, I mean, big time execution risk. And it's not easy. And I was, I was reading an article, like when the when the kind of when cars first became a thing, you know, industrial revolution and turn of the kind of 90th century and they were actually in 1910. They were 250 American car manufacturing companies. Wow. Okay. And that's because this new thing came out and now I write everyone scrambling to try and make one try cash in on this this great opportunity and 250 companies. And that's where it peaked about by the end of that century. Kind of basically and I'm going to simplify here but basically went down to three. Ford General Motors Chrysler, the big three US giants. Okay, so you had 250 to three. We're getting another kind of mini episode of that again, with now electric vehicles, and it's like everyone scrambling to get to market it's such a huge sort of opportunity and obviously Tesla has got the first mover advantage on that front and fine that's partially their valuation so high. But you'll get you know there's a lot of companies out there that are trying to scramble scramble for this and it's not just skin it you know your traditional your existing big autos. It's actually then you've got your pure play, you know your revisions of this world which are, you know, brand new companies that are focusing only on on electric vehicles but. Yeah, so there's actually quite, there's quite a few out there and as from an investor's point of view, I guess, you've got to understand that it's about trying to pick the right one or the right ones. And there are many out there. I mean, I know we've been hearing a lot about Rivian and Lucid recently but there's actually, you know, you could say the Chinese. You know, kind of EV manufacturers, possibly have a better advantage than maybe some of these US ones that are just coming to market. And that's just because I think China a bit more. I think it's 50% of electric vehicle cars are sold in China. At the moment, they've been a little bit more progressive from a government policy point of view in pushing that transition to electric vehicles. So you've got some big Chinese players like Iways and Lee Auto and Neo and WM Motor and these lot. You've got some European ones as well like RIMAC in Croatia, Spain you've got Hispano, SUSE, here in the UK there's a company called Arrival, manufacturing electric vans. But, but yeah, I mean, look, basically that in terms of execution risk, you know, is Lucid worth 100 billion? No. Why not? Well, actually, they might not make it. This execution risk, I mean, obviously, firstly, you know, they've got to actually start to produce cars. And so this is the biggest risk of all it's that production really difficult kind of thing. Tesla nearly failed, by the way, when they were going through that what they described as their production hell. And you know, it's about giant presses and paint shops and assembly lines and getting that right is an absolute nightmare. But then you mentioned service centers and you know, it's like it's not just being able to build these cars, it's then actually selling and maintaining them. And that distribution and service network, which just on its own is an absolute minefield and a nightmare to execute and get right. And Tesla aren't even there yet. Do you know how many Tesla servicing centers there are in the US? What do you reckon? 50. 113. Big guns have like 10,000. Yeah. Right. So Tesla got 113. So there's still execution risk on Tesla side as well, by the way. So, yeah, I think that we're in a bubble. I think a lot of it's doing investors missing out on Tesla and wanting, wanting to make up for that. I think obviously these companies, they're not being valued as autos. They're being valued as tech firms. It's like tech and it's like software driven, you know, software defined sort of businesses and that's how they're being valued. And yeah, I think we're in a bubble. And I think it's dangerous because it doesn't mean we can't see these prices carry on going up, by the way. And we may well do. But yeah, I just think in the end the valuations that they are today, I think they will never get. They'll never justify them. And I'm not touching it with a barge pole. Well, one thing that came out overnight was Jim Farley, who's the CEO Ford. Yeah. And he came out and outlined then, I mean, you can imagine the board meetings at Ford and GM and the others crisis at the moment. I mean, they must be thinking that what have we got to do, and somehow they've started plucking numbers out and the CEOs come out with some again unachievable, I will go as far as saying targets, but almost like to try and keep pace, I guess, with what's going on. Well, and again, the medium used, what do you reckon to communicate this to the market that Jim Farley used to talk about its new targets? Well, social media. Yep. Twitter. Yep. As to as has the VW boss Herbert dace or dice. He's also been using Twitter more frequently as well. I mean, it's borderline slightly tragic. But yeah, that's exactly what I was thinking. I think you're not actually Elon Musk and you will never be Elon Musk stop trying to be. Yeah, it is. I don't know who does the strategy but equally so I don't know who designs these these US trucks like Rivian and that they need speaking to as well but that aside. The other thing I was, you know, for numbers then for Ford, they expect to produce 600,000 battery vehicles a year globally by the end of 2023, which is double their current target. So he's just come out to double that. That number though would still lag Tesla's expected sales volume by 2023, which is to be above a million. So there's still be only about half of Tesla if all forecasting is is met. Ford has gone from selling basically nothing in EV space last year. And they've sold about 19,000 is the figure 18,900 in the first three quarters of this year to give you an idea of where they're at at the moment so they're all right in the infancy of this for this point in time. So my other point that I started looking at when all this is happening earlier this week was there was an EU funded report that was talking about critical raw materials, regarding then different components, Bucksite cobalt lithium natural graphite. I started thinking okay so how do we play this. I don't want to touch these these EV stocks they're just insane. I know a lot of people have been talking about like lithium batteries and how do we get commodity exposure to that I just started looking at geographically. Okay, where do these components kind of these ingredients come from. And so for lithium main global producers, chili, China, Argentina, right. Other top ones chili dominates in China. Yeah, I usually, but yeah Argentina in there interesting. Yeah, we're talking about 85% all coming from Chile and China. If you're looking looking at the EU sourcing, because this then starts in my mind because you know I'm into geopolitics and so on. Like okay so who are the EU dependent on and for their own, their own industries, and actually there's 78% reliant on chili. Right. So the numbers start to skew a little bit in that sense. So yes, it was quite interesting looking at this in different ways and how this could be played and and so on but yeah they're going to have to scale I mean like thinking about numbers in terms of expected electric kind of vehicle sales I mean, like to give you an idea about I think it's about 95. So pre COVID actually because obviously car sales got hammered in code pre COVID. I think it was about 95 million cars per year. Sorry in that one year was sold. Okay, so that's like your, let's call it your run rate right and we're expected by 2025 to get back to that 95 million this is all cars right not not obviously not not EV here. So in 2018 of the 95 million you know you're, you're talking, you know, over 90 million of those are petrol or diesel right and obviously the trend is going to shift we're expecting car sales to go up total but also the EV portion of that to steadily build. So by 2030, for example, they're expecting the total car sales to break through 100 million and they're expecting of that. They're expecting about 25 million of those to be EV. So we're going to go like from 5 million to 25 million. Then by 2035, they're expecting that EV market to be more like 50 million. Okay, 50 million EV car built and sold in 2035. That's the forecast according to the economists. Now, that's given how difficult it is to manufacture these things and just look at Tesla, and they're only now just getting up to a million and I know Elon has ambitions to hit 10 million by, I'm not sure what his date was but you know in the next decade I think. But if Tesla get to 10 million, let's say by 2035 that's another 40 million units that's got to come from somewhere else and given their further down the road here. Just kind of questioning some of these sort of forecasts but like given, you know, talking about execution risk with the likes of Lucid and Rivian and all these players that have no revenue and I haven't really built any cars on scale that these factories. I mean, that's like a million that's a billion dollars a pop right Tesla's building one in Germany the building one in Texas, these are going a billion dollars a piece. So, I mean, I guess given the amount of capital they've raised by going public I guess at the moment, funding is there and fine they and it's cheap. Fine, I guess they can set about this project with a large amount of cash. But it doesn't mean they're going to be successful. Yeah. I won't mention where cobalt, which is in nearly almost every commercial lithium cathode chemistry, what country that comes from, because good luck trying to get consistent supply coming out of there. North Korea, which is no, you know, no, no attempt to have a driver at the Congo it's just an unstable place. And so that is definitely not what you want when there's high demand and dependency as a key product to facilitate the manufacturing process but let's move on let's talk about the shift it to the policy divergence and this was something we were talking about. So, I just really wanted to provide a bit of understanding here of two things, what's happening now so perhaps I can get everyone up to speed. And then perhaps you can talk about then the implication and how to structure then, I guess, a way to think how to structure an investment decision and timing is obviously key to any investment. So, for painting a bit of a picture of what's going on, going to talk about Europe. First, and our conversations this segment is about the divergence of policy emerging between Europe and elsewhere us namely, and the UK. So in Europe what's going on at the moment, well the main thing is covered. So covered cases are heading in the wrong direction, and rapidly so at this moment in time, Austria is the latest this morning, they're going to go into sports. Full lockdown right, Austria lockdown, yep hard lockdown from Monday, 20 day lockdown for everyone. This is one of those. We won't talk about it here because I know it's a political divisive point. Europe have been very much taking a strategy of locking down unvaccinated people they're segregating the two and treating them differently now which is obviously very divisive from the societal level but that aside. So, Austria are going to enact a full lockdown 20 days for everyone. Absolutely. The lockdown will continue though for the unvaccinated to an unspecified time right point in time. The other one then is Germany. Germany is applying pressure on citizens to get their shots they're restricting certain mobility and so on in unvaccinated areas across pretty much the whole country where that's apparent. So what we're going to do next with Germany is it's less than 70% of it fully immunized at this point, and that puts them quite a bit behind Spain, Italy, Portugal, so on on vaccine uptake Germany's actually lagged a little bit, and they could be deemed to be a little bit slow, because of the political environment on the coalition side at the moment, making decision making quickly quite difficult. Ireland has had quite a big uptick as well, increasing pressure on the infrastructure bars restaurants got a close by midnight, cinemas, theaters. This is very different from Britain which I know there'd be anarchy if this happened. But in Ireland, cinemas and theaters you got to prove that you've had a vaccination. And also, people are being advised in Ireland now to work from home is one of the things and then we could go into Greece, Czech Republic, Slovakia, it's not looking good. So that's Europe. At the other side, the UK. Now the UK has seen an uptick in COVID cases we had almost like a such a great run of declining cases it was inevitable to end probably at some point. It has happened it started to move a little bit higher again once more, but the main things with the UK economy as drivers for this divergence theme is they didn't pull the trigger earlier this month as we discussed with the rate hike big shock, because they were kind of using forward guidance that was leading markets to believe they pulled the trigger and they didn't. Now, one of the main points that they were awaiting was the impact at the end of furlough was going to have on the labor market. In the week, we've had labor data, and we've had also CPI data. Now, the number of workers on UK company payrolls rose sharply last month it came evident, despite the end of the furlough scheme. After record increase in people moving from unemployment and into work ahead of the closure. So they kind of jumped back in before the end has happened and said smoothed out and if anything is actually a little bit lower than people were expecting and coupled that then CPI came in at a 10 year high. People know inflation is going higher. Bank of England telegraph this it's going to go even higher than where it is at the moment, but the point is, it's going higher faster than what markets are expecting, which is what's spooking people a little bit. That's about 0.2% analysts looking for 3.9. Now, the final piece of the puzzle here is the states and obviously the main one because talking about the Federal Reserve US economy. So yesterday, arguably one of the more reliable policy doves, if I can call him that Charlie Evans came out and said, and this is again the nuance of central bank comms. I'm quote more open minded is now what he's saying to raising interest rates next year than I was six months ago. Follow that with the comment the day before by the New York Federal Reserve Bank President John Williams and he said inflation increases are becoming broader based, which they are I mean that's a fact but the fact that they're saying it. And both these guys sit in a more center slightly leaning dovish way. And so saying these things is, you know, getting markets to pay attention and we've had JP Morgan. This week, they've brought forward their rate hike call, not going to wait, they're going to do it next year. They joined city MSGS. So all the banks are realigning themselves now to a more aggressive timeline. But that's the context. Yeah. I mean, I think that while starting with the last one first, the Fed and the US I mean I think that, you know, I think maybe we talked about something a few weeks back and it was that idea or maybe it was even last week where Tim Goldman's actually was saying that they would expect. I know it was your Fed watcher. What was his name. Tim do you right he and he was saying that the fed can really in terms of then getting more hawkish. It's about not touching that tapering. So it's not accelerating tapering. It's starting to talk about maybe hiking rates sooner and bringing that rate hike expectation into the into 2022 end of 2022 and he said that actually they could wait until March, until they start to even talk about that. Right. But, and so I think that's why this is a slightly you know it is a hawkish pivot here because we're thinking well, it is likely, given the current situation that a rate hike by the end of next year. We don't see that happening. But if they're already talking now, then you know often it takes six months to kind of just get the market teed up and prepped and ready. So, I mean, these doves talking like that could bring that rate hike, maybe into the middle of next year. So I think it is hawkish. Obviously here in the UK, you're getting over that that furlough fear, if you want to call it that in terms of the risk that that or the unknown that that kind of unknown risk that presented towards the kind of economic momentum and so on and so that's reduced so yeah fine maybe maybe we should be looking at the Bank of England making a move but December. Additionally, they like to wait till the quarterly they have a meeting, which also brings, not only are we changing policy but it's also then refreshing all of their economic models and forecasts and normally they like to change interest rates, alongside those updates to their models, which is why the last meeting was such a shock, because that was that meeting. So that's right to wait till February. Yeah, and so we don't have to wait until February obviously they do have a meeting in December and it is a chance to maybe change policy but you know I think I still can't see it I don't know what your thoughts are but I'm a I'm a February, not a December for a Bank of England rate hike where are you on this now I know you called it well last time. I was just trying to bring up to refresh my memory of what Bailey has been saying this week. I'm not sure we should listen to that. He said this week that he was very uneasy about the inflation outlook, and that his vote to keep interest rates on hold early this month, which would have shocked markets had been a very close call. He's kind of doing that whole thing where he's like, he's not resisting the market movement to price more aggressively so again he's kind of shooing in that he's going to do it I guess. I guess it comes down to the COVID situation for me now and how bad that gets over the winter period. Yeah, right. What's happening in Europe does not scare me on that side. We talked about this before the pattern development where it tends to happen in the UK first like the Alpha Kent variation then Europe catch it and we've kind of led that so I think what Europe is seeing experiencing obviously can have an impact but I think it's less impactful. I also think that the booster rollout has been decreasing in terms of those people who are going to receive it as we know now it's people of your stature and wise years now are available for a jab soon. And, and also they're talking about a double shot then for what was a single shot for under 1816 17 year olds. It's like a pizza strategy on both ends, bring it in. And so, yeah, from what I read from people who are way more intelligent on this stuff than me in the scientific community is that they don't foresee anywhere near the same type of situation as what we've had before. But I do think it warrants caution. Yeah, and actually if you're going to believe of which they're all kind of so scared of the immediacy of the inflation pressures now they're all still saying it's transitory. Yeah. And so, yeah. I mean how does baby come back from not delivering now in December I mean it'll be an utter disaster. But how I mean what's going to push him aside, let's say the market continues to price him back and he doesn't do it. He gets out voted. I mean what is the pushback I mean markets might like it but yeah. I do think, I do think they do want to get at least, they want to get back to rates at 0.5, which was the pre COVID. You know, it was the kind of post financial crisis, low, they've obviously cut to 0.15 so I think they do want to get back there but I think that. It's coming I mean it's, I know we kind of splitting hairs here and markets are obsessed about it. It actually doesn't really matter in the long term to do the Bank of England hike in December do they hike in February. What about the Fed are they going to hike at the end of next year is it going to be in quarter three of next year, you know, in the end that they're going to hike. You know we are on, we're at the start of the hawkish, you know cycle right so it's a monetary tightening cycle, and it started and sure the speed of it is important but but it's not as important as it's starting. We're on that hawkish trajectory now with Europe and kind of going back to the, the point about divergence, you know Europe have not started their kind of hawkish tightening trajectory. And I think that's the key difference and now people are speculating actually, not only if they not started but actually we don't think they're going to start anytime soon and obviously the COVID situation is certainly, you know, making that belief, you know, all the things are likely. And you know economically they haven't recovered from COVID as well. And so I think that from a from a sort of policy divergence point of view, you know it's been relatively easy to predict things like the euro weakening against the dollar. So coming back to the point about you know how do you start to develop sort of investment themes and ideas and strategies. You know it's about, you know it's obviously about you know the way markets behave that they're not pricing in what's going on today. They're pricing in what we think is going to happen in the future. And no better example than the Rivian valuation right so it's about pricing in our future expectations. So, you know you can't come to the table now and go, ah, what hang on the Fed tapering and hang on Europe. I'm not doing anything. Oh right, I'm going to now short the euro dollar, because a lot of the moves happened already. So it's about understanding the main themes that provide the big influences on price. It's then being an expert on those themes. You know you're lacking those themes, you know, as you go along to identify when changes in direction are going to occur or are likely to occur. And then you know it's about spotting doesn't happen often when you get divergence and that's why this opportunity, you know of the last few months and probably ongoing into next year is an unusual situation where you get central to the size of the ECB and the Fed or the Bank of England actually going in opposite directions hardly ever happens. So when it does, this is when you get big swings in those currency pairs. What happened back in kind of 20, well what was it 2014-2015 when euro dollar kind of really kind of opened up to the downside and almost got to parity and got down to 104 in the end. And that was again another moment where the Fed started to hike. And actually the ECB were cutting at the same time. They were literally going, not only talking about going in opposite directions, they actually were. And that's the only time that's ever happened in my entire career was to see the ECB and the Fed literally changing policy in opposite directions simultaneously. So now it's about the Fed are moving they're tapering but the ECB stood still. So you still got that divergence it's not quite as dramatic as both going in opposite directions but yeah in terms of, you know, it's bad. You've got to be on top of these major macro themes understand them really well, and then start to predict and build in, you know, a thesis in your head about how it's going to play out and then right if I'm right how will prices move between now and that moment in the future. And right then I'm going to position myself accordingly. And again from an investment strategy point of view going back to what we talked about with EVs, then it's about okay so what's the risk profile of this view that I have and how do I express that view in as low risk way as possible. So I can have a directional bias but quantify and manage that risk and so like thinking about okay not outright position in an EV like Lucid. And I play this in a different way to play the same investment theme. Right, and you're looking into those commodities that are key to that kind of EV battery manufacturing is definitely one way I mean, other ways you know it's about and diversification is really really important, really important, especially in this case, as I said, not all these companies going to make it, I don't care what valuation they've been given, some of these aren't going to make it so they might be worth 100 billion, some of them will be worth zero in five 10 years time. So you've got to kind of spread it around you know and it's investing in in an around that space like I've been invested for well well over a year in a lot of EV charging businesses. And because the infrastructure there is woefully inadequate and is gonna, you know, has to kind of build and so you know it's kind of there's plenty of ways to play the EV space, I mean I wouldn't be punting around buying Lucid. But you know, making sure that, yeah just kind of second and third sort of derivatives away from the actual vehicle, and then making sure you're getting nice and diversified by, you know, investing in lots of different things in that area. Well, let's let's move on and talk about the final installment if you like which is Netflix and Netflix the reason to speak about them is they'll begin regularly reporting viewership numbers for its top programs and films. And that's quite a distinct shift in their strategy and bit of context here as well so streaming, generally watching television online obviously change the industry and immense amount over the last decade. But the problem that Netflix is facing at the moment is the fact that signups are drying up, they're coming off this monumental pump in their subs, their subscriber rate because of the pandemic. Someone was forced at home at 2020 hugely shot up. And it's not the investors don't know that that is never going to be sustained. It's just the fact that they've seen the company achieve such lofty heights. It kind of anchors now to, okay that's success, even though we know that that's not kind of able to contain that kind of momentum market saturation increase competition. There's a lot of reason for strategic change, I guess. And before I kind of talk more about what I think this means and why they would have done that. I mean I was looking at Apple. I know we talked many, many episodes ago about Apple at length but one of the things I was looking at with Apple is about how it tried to maneuver itself away from kind of its Achilles Hill which is a dependency on iPhone sale revenues. And I was reading about pull push strategies which in simple terms was talking about using set products like your Apple laptop for example. And then using that as an avenue then to hook people in as a pull strategy to then seldom subsequent add on types of products and services. But it was all channeled to a singular products, whereas now they've moved to a push strategy, which is that every unique element of the business now has its own strategy to push out the products as their own products in their outright. So wearables, app stores, subscriptions, TV, laptops, iPads, all the rest of it. I would have done a successful job at doing this and you know it's a component of why, again diverse, we go back to diversification, diversification of a corporation to offset, and this then leads us back as a hook to Netflix. Because if you ever watch Netflix, when they release their quarterly earnings. I mean, could go up 10% could go down 10%. Down 10% might sound, you know, I guess if you're trading penny stocks or or meme stocks, you might think 10% that's nothing. But, you know, for matured businesses, this is not a sustainable kind of approach. You don't, you don't shareholders don't want to see that type of price volatility. They've got to kind of think about, okay, so how do we address declining signups, saturated market. And what, what can we do and now one of the things I was talking about in the piece I put out earlier this week is about fighting a battle that you know you can win and creating a distraction that starts to then take away the community's obsession with a singular metric of your firm, kind of like Apple people used to go screw everything. What's the iPhone number, and I'll try and the stock will move accordingly with Netflix is the same with the subscription and that's unhealthy place to be so hence the rationale to try and to try and shift. So, yeah, finding a battle that you can win what I mean by that statement is, start reporting your, your numbers you've just come on the back of squid game, which was an insane success. Like the second one isn't even a country mile like a far apart it's it's crazy. So, when you actually think of the Netflix originals, squid game, Bridget and Richard, these sorts of things. And then you think about firepower that Netflix has, because don't forget Disney plus and things like that big companies but they're fairly new arms and divisions of those businesses. And so, Netflix is set to spend 17 billion on content, 17 billion on content. And during the third quarter alone. How many Netflix programs do you think they released in the third quarter alone. I'm going to say Netflix episodes of Netflix originals. So it's from a Netflix originals within one quarter. 100. That's a good guess. And that's actually what Disney plus did. They did about 150 right HBO Max did 200 Netflix did 824 original content. And so to counter at this is they're only going to report, and this is where the massaging comes in. They're only going to report on the top 10 programming right because you don't need to know about the rubbish ones of course. And so, I mean, the top 10 is probably going to smash nearly everything the other competitors have even got as their best performing. Just given the gap that exists so it's kind of like they're not going to lose reporting on these metrics. And if you're first I think to market to really push the narrative in that direction. I think you control that conversation and Disney and the rest of them will have to report these numbers and they will look rubbish. And thus you have first to market advantage in, as I've described about you're not going to lose, you know, I like it. I mean, what I would say is that I'm looking at their subscriber numbers the chart now and you know obviously the strategy is to to mask the fact those the number of growths, slowing as you were saying and there's 213 million paying streaming subscribers. That's as of the end of quarter three 2021 so 213 million that's up from 2020s number of 203 million so they've added 10 million this year. Last year, I mean, it's hard because obviously COVID I'm not even going to talk about the growth last year. Well, I'll say it was what was it 30 36 million were added in 2020 versus 2019. 2019 growth from 2018 they went from 139 to 167. So that's 28 million. So yeah 10 million growth this year is slowing decelerating growth rates and when these tech stocks trade at crazy multiple valuations. It's based on the idea that you've got an exponentially growing business and that's how these tech firms get these inflated valuations right but when you're having declining growth rates unfortunately that's not exponential anymore and so you know clearly from a share poison of a valuation point of view that's bad news so deflecting that is a good strategy. I mean what I would say with Apple. You know, I, people still do look at the iPhone number, it is still the most important. It's not the be all and end all, but it's definitely still the most important so I think Netflix strategy here is a good one but it's not it doesn't mean that we're no longer going to be interested at all in subscriber numbers because in the end that's what pays them the money and can they afford to pay all those billions in producing content well yes, as long as obviously their subscriber numbers are strong and they can afford that and I think in the end and look with all these rivians and all the rest of it, you know, in the end, they all kind of all get bundled together and they get these crazy prices but look long term, they've got a product that they're selling to the end user and unless the product's good, the company's not going to do very well. And I think Netflix have done the right thing in big time investing in content investing in their product and squid games, you know, 2021 is just a phenomenal example of that paying off 1.6 billion. That's the viewing hours of squid squid games 1.6 billion hours of viewing time. The next most popular was Bridgeton. I don't know I didn't really like Bridgeton anyway Bridgeton. I didn't bother 625 million. That's number two on the list. So Bridgeton got 625 million viewing hours squid games 1.6 billion. Now that's the kind of stuff by the way that draws subscribers so it'll be interesting to see next year if all this investment into content. If they can pull off some more squid games then actually you may well see that that subscriber number reaccelerate but so therein lies your your downside. So like with anything I don't want to sound like uber ball on Netflix because there is a definite downside I think it was on LinkedIn where I was engaging with someone who interacted with my post. And yeah the degradation of quality programming that will definitely happen. Yeah, the producer director squid game I think as a script first came about could be wrong. But I think it was about a decade ago got shot down not interested. The guy brought it back and it just became a mega hit. Of course this guy just say he wrote the script and he's really passionate. This is my script. It's such a great script. Hence the success the global phenomenon comes around every now and again. Yeah this is a unique moment in cinema some would say. Now what's going to happen is like you can't just pull these out of thin air but what will happen is Netflix will say okay we've got 17 billion for content for the year. How about I give you one piece current how about I give you scriptwriter a billion because worth it for us makes business and I'm going to give you a billion write me write me a second series and don't make it an eight part series. Make it a 10 part one because I calculated it early in the week to more episodes. Well you do the math right of 1.6 billion over eight and so you're talking multiple hundreds more hours spent and people downloading these episodes. So it makes business sense. The problem is there. You haven't even conceptually thought of script yet, and you're already getting the business directing you to tell you how to how to do that. That's a surefire way of disaster as far as the quality of programming so for sure. I think that this might not have a degree of longevity, but it is a necessity to be doing it and I think they will win they'll be best in class for a foreseeable future. But yeah, what will happen as well is that I mean the algorithm already updated for me I don't know about you but I watched Squid Game I smashed it the day after it came out I just literally flipped it for a couple of days and done it. And so, all of a sudden the algo updated, and I start seeing Korean about this Korean movies here. So I can imagine what the content. Count the rates who would have done it Netflix got right just go out to career bang spend 100 million buy them all. Plug them in the algo and start pushing it all because people will start clicking around. Yeah, the other thing here is that as much as Far East cinema makes movies at a rapid pace compared to say an expensive and timely Netflix original, they will gobble up all of that industry. But the problem you have there is that I think a UK European market is more open to the prospect of foreign film. Yeah, that that that goes down like a lead balloon in the US I mean Squid Game is unique. But I would say it's a you it is unique by case and can they get foreign film into the US main market. I don't think so not anytime soon. Well, I don't know about that. I think they did such a good. I don't know how you watched Squid Games whether you watched it. Did you have it the dubbing on so it was in English dubbed or did you go for some time. I mean if you did you're an idiot. I mean who does that. I mean who watches like a foreign movie in dubbed English. My point is you're a jerk if you do that. My point is though, turn it on go and have a look turn on the dub the dubbing for Squid Games was unbelievably well done. To the point where I know someone who watched the whole series and thought they were speaking in English. Okay, define well done for me. The Korean dialect. Yeah, very nuanced and obviously the shape of the mouth movements don't map across to the sound that's coming out. But I think what is acting as well right the person doing the dubbing. They're an actor and they need to make sure that the expression in the voice and the you know is perfect and on point to match the the imagery as it's moving and I think the way they did that was phenomenally good. Hence why it's so popular by the way, and by the way, money heist is the is number two, so it's number three on the list. That's a Spanish film right so you're saying it's not working in America but it is. The numbers are there money heist is actually, it's the season four was the third most popular season three was like the fifth most popular or something anyway. So I think it's like, if I was Netflix, I'd be hunting around Asian, you know, movie theaters and finding what are low budget movies that are super slick scripts great. Actually this is amazing and then basically plucking that throwing a load of money at it and making it visually. And then putting some budget behind it and then parking on Netflix I think that's a great strategy and there's got to be plenty of little gems out there that can be plucked already is the departed Leonardo DiCaprio you remember that one. Yeah, that's a Hong Kong movie. What's that right came out 15 years before the party it's way better than the departed, but that doesn't matter as long as people go to cinema and you stick Leo's name on the badge. Yeah, people people get involved but and I guess the other thing I was going to say about Netflix is it's it's it's cheap. It's like cheap enough that you just don't think about it I did I probably didn't watch Netflix for probably six months, then squid games. And then after squid games I've watched more on Netflix than any other channel for the last three months. But while enjoying that six month period where I'm not watching it I'm not thinking I need to cancel that need to cancel that it's just not in my mind at all because it doesn't because the price of so I'm wondering. You know those subscriber numbers, you know how many of those are actual active subscribers and they're actually watching content and what I would be reporting files Netflix is reporting on the convert, you know active subscriber viewers. You know because that's surely gone up now. Well I mean I think I think it's the same thing right the viewership numbers. They would have seen them massively strike post squid game. Yeah, serves the same purpose I guess that's good point away so they're just like yeah we need this is like insane we need to report this. And I guess they're comfortable with as I said the content that they're doing. It's good and the key and the key the beauty of the strategy, as you said, the most important point here is that it's going to force others to follow suit. And that's where they're going to really shine. You know it's their ace card. And if others are forced to follow up competitors are forced to follow with issuing their kind of viewer hours figures then then yeah this is where Netflix have pulled a pulled a smart one. Yeah. And for any like movie buffs. I sympathize. The foreign language is a very complex dialects are very confusing. And the Korean people I talked to say the dubbing was horrendous, and actually you miss a huge proportion of the nuance of the narrative the story, because it's, you cannot translate it into English. Without giving an overly expressive then long dialogue to explain simple feelings but anyhow, we're not movie buffs, we had to talk about markets and strategy but just saying. You shouldn't watch it in dubs. Anyhow, we'll conclude the episode. And yeah, well we'll be back next week as per usual. I'm still doing the career hack series with my colleagues out. We've had great conversations we've had so far so we've got two more and then that's it microseries is done. So stay tuned because next week we're going to be talking about how do you tackle different types of interviewer kind of personalities so he's got ones called like incredible Hulk, the king and queen, the yes man the no man like he's got some funny stories so worth tuning in for if you're a student to get you best prepared for any interviews coming up. If that appears thank you as ever, and have a great weekend everyone. Cheers. See you.