Nintendo ($NTDOY), Lyft ($LYFT) and a Timely Re-Reading of Atlas Shrugged
It was another wild week on the stock market, with plenty of volatility as new unemployment numbers rolled in, headlines about expected shortages of meat in the food supply hit the front pages, and many companies pulled their guidance for Q2.
Warren Buffet also announced that he didn’t buy the dip and has been sticking to the sidelines amassing a huge amount of cash. He also sold his positions in airlines at a loss. Weekend chatter about inflation and the long-term nature of this crisis have futures markets signaling a rough start when the market opens tomorrow morning.
On the Covid-19 front, research indicates a newly identified mutation makes SARS-CoV-2 more transmissible and ThePrepared.com gives a helpful overview of the paper.
Nintendo ($NTDOY)
After spending my first ~40 hours playing Animal Crossing on my Nintendo Switch Lite, I bought 1 share of Nintendo stock and look forward to reading much more deeply about the company and exploring building a position. This is the most relaxing game for being stuck at home with social distancing, and my husband is showing me all the awesome resources the community has created, like TurnipProphet.io
Nintendo is profitable, with a market cap of $49.9 billion and P/E ratio of 24.49. The stock is up 20.3% over the past 12 months with gross sales revenue of $1.2 trillion for FY 2019. FY 2020 earnings will be announced this week on Thursday 5/7
What I Purchased: 1 share @ $51.38
Lyft ($LYFT)
After seeing the layoff of nearly 1,000 employees at Lyft (and a furlough for ~300 more) I purchased 10 shares. This move puts the company in a much better position in the medium term. The stock is down 10% since my purchase, so there might be an opportunity to build a larger position in the company. Earnings will be out after hours on Wednesday 5/6 and I will be curious to see how their projections have been modified on the cost side, and how the overall efficiency picture will look. As different states roll out various policies for re-opening business, I will be curious to see the willingness of passengers and drivers to return to using ride-sharing.
To avoid catching the falling knife I need to be in active learning mode. One big question is what Uber will do. Will they also need to let go of 17% or more of their staff? Given the similarity of the two services, and Uber’s brand being much more popular and widespread, I have to believe Uber is in a similar situation. Uber is expected to report earnings one day after Lyft, on Thursday 5/7.
What I purchased: 10 shares @ $32.72
If you haven’t seen it yet, Layoffs.fyi is a great resource for following tech layoffs data.
My track record spreadsheet is updated with these most recent buys, as well as the overall performance update from last week’s market activity.
Atlas Shrugged
I first read Ayn Rand’s masterpiece Atlas Shrugged when I was 19, and have re-read a few times since. Our world’s current situation is the perfect context for revisiting a fictional world where the future is precarious, collectivism threatens to destroy the lives of individuals, and heroes go to incredible lengths to keep things moving.
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