I'd say keep a close eye on the Coronavirus situation. If a vaccine is found and is effective, likely the market will calm down and hit the bottom. After that its about keeping the companies afloat until they can get their revenue back up again. Most likely the quantitative easing programs from the Fed will help in this regard.
I'm surprised how this made it into HN front page. Looking up the author, it seems it's someone who graduated in 2018 throwing out his theory about bonds and how it's all a bubble with a nice click bait title.
The reality is very different though. Bonds are how most large companies finance themselves. And when they can issue a bond that people buy for < 5% yield, it's almost like free cash. Assuming in 2027 - Netflix has say conservatively 220M members paying an average of say $11 (which is less than the average price today, not accounting any price increases). That will be a whopping 29B in revenue. Way more than enough to pay off debt + some in a single year. This is even after accounting for a massive spend on making movies. For context Disney+ spent 1B this year and planning to spend up to $2.4 billion by 2024.
Regardless of veracity of the conclusions, one key issue is that the author is looking at absolute yields, when they should be looking at credit spreads.
They state:
>Higher rates mean higher returns. A junk bond historically hovered around a high yield of 10%. This attracted investors to the bond despite the risk of the company defaulting
Broadly true, but it's the spread above the risk free rate that is important. If US government bonds yield 15% and some BB rated bond yields 16%, one would be unlikely to invest it in regardless of the high absolute yield.
That differential is called the credit spread - the amount you are paid in excess of the "risk-free" rate to take the credit risk of the bond issuer (i.e. the risk that they don't pay you back). The reason BB bonds are at 4% is not because the credit spread is at a historic low, but because the risk free rate is around 1.5%.
Current BB spreads are low, around 2.5%, but not historically so. They were at 2% in the late 90's, at the current level in the mid 2000's, and actually haven't moved a lot in the last 2 years. This earlier period is the time the author refers to when absolute BB yields were ~10%:
Looks like that was likely a typo. Seems like the author holds a license from 2008. My key point is about the debt though. I'm sure there are different takes to it, but this is just my own opinion.
I don't understand your criticism thou.
Netflix already had 167M paying subscribers in the final quarter of 2019 increasing roughly by 10-20M subscribers each year, so they will probably be up to 220M in year 2023-2024. They are soon there and still have debt.
And 220M times $11, I only get to 2.4B, then you also have account for the expenses before you can call it a revenue.
As I understand Netflix has a debt of roughly 12B and their operating expenses for 2019 was roughly 17B, so that's also why Netflix need to lend, can easily escalate.
I can understand the fear from investor's.
I wish they would release this into the supermarkets sooner than the end of the year though. I would love to include this in my weekly dinner options at home. I am not a vegetarian but I do like to mix things up and this will help to make one more dinner at home a veggie version.
The price is the key part right now. Hopefully they can scale this fast and reduce the prices. My guess is that they are doing a controlled release to ensure a better chance of success for the product. Early feedbacks should help to correct issues.
This is a great point. Solve it one step at a time.
But the problem is Uber's business plan is to replace drivers with autonomous vehicles ferrying passengers. i.e. take the driver cost out of the equation. Same goes for Waymo and others trying to enter/play in this game. It's always about monetization which kills/slows innovation.
Just highway-mode is not going to make a lot of money except in the trucking business and I bet they will succeed soon enough and reduce transportation costs. But passenger vehicles, not so much. May help in reducing fatigue related accidents but not a money making business for a multi-billion dollar company.
That being said, really sad for the victim in this incident.
Seems like a baseless article that is pulling fake facts out of thin air to supplement a couple of real ones like the cost basis and failures of large government projects.
It's not uncommon for large government projects to fail with all the bureaucracy and politics that is in play. I am not saying IBM is great, but this article is just not worth it.
I've used two services from IBM: Notes and node DB2 package. Both of them were pretty low quality, the db2 package was so unstable that it constantly segfaulted the entire node process. It's not fixed for years since the issue was reported with reproducible code. Needless to say I wouldn't recommend IBM even to my enemies.
Can anyone share a good IBM experience? I'm honestly interested.
> Can anyone share a good IBM experience? I'm honestly interested.
The IBM pc we bought in the 90ies was fantastic.
It had working suspend resume many years ahead of other computers and came with 365/24 free phone support for a year (and the next years was about 50USD). This being was very useful since I didn't have Internet access.
The support team had unlimited time, patience and knowledge and would walk me (15-16 y.o) through any procedure including if necessary: backup, reconfigure disk with fdisk, restore os from backup etc etc. I learned a whole lot from them both technical stuff as well as how to deal with customers ;-)
(And yes, old IBM ThinkPads were very popular IIRC.)
They bought SoftLayer a few years ago and haven't ruined it. Not sure if that really counts or not, but I was really worried. I've been there for quite a few years, and nothing went downhill after they got bought.
Not the person you are replying to but I'd say no.
As the supplier you should back yourself as to whether its likely that your changes will cause an issue or not. If so, issue a warning, otherwise don't.
The reason I say this is not for your customer's benefit but for yours. I've seen people get all knotted up with process because someone had the bright idea that the customer should be notified when absolutely anything changes behind the scenes - just in case. This abundance of caution will make your life a misery, and stops any rapid movement. It also desensitizes the customer, who gets used to your notifications and eventually decides they can ignore them.
Those appear to be products - which is different than hiring IBM to develop something for you. IBM has had a storied history in tech from developing/popularizing the PC to OS/2 to their thinkpad laptops, to designing systems for the space shuttle, and natural language projects like the Watson. I don't think IBM lacks talent.
Its almost seems like when you can get away with milking the system, nobody seems to have any moral qualms in selling the government a $200 screwdriver.
>Unfortunately IBMs history doesn't really provide any evidence of their current competency.
I gave current examples of competency. Its trivial to find others. In any case, my point was merely to differenciate services from products, so I'm not sure what you were replying to anyway.
I'll share another bad experience. AstraZeneca pulled out of a $1.4 billion/7-year deal with IBM a couple of years early, because of dissatisfaction with IBM's service.
I remember hearing about it then, but I cannot now find details of the problems.
Why should they avoid? I sort of liked it. And also about 86% of Rotten Tomatoes reviewers out of about 17,620 did. Not every movie has to be liked by the elite movie reviewers or editors in media news media. Some of the movies just works for folks. I'd say keep them coming. I'm only paying a fixed price and I can always choose what I want.
I’m with you in that all too often pro reviewers are just jaded or pushing an agenda, but I should be clear that I personally disliked Bright. I didn’t however, mean to offend, and I should have simply said that I didn’t enjoy it, rather than make a generalization about it.
Edit: the third thing professional reviewers are, is hungry for clicks.
