Finding Value in Media and Sports Stocks

Time to get back to the basics. I've been laying the ground work for how to build a successful business, but it's time to get back to the basics of investing.  Remember, investing is something every person should consider once you pay down your debts and establish a rainy day fund (savings account).  In my perfect social media world, people would go viral for:

- Paying off their school debt

- Putting off unnecessary purchases

- Improving their credit score

- Hitting their retirement goals 

While I personally turn off the tweets and so-called influencers, I do not deny the irrational impulses of the masses. Everyone wants instant gratification, personalization, and to think they are influencing someone else's opinion.  So I try to keep it simple by recognizing the trend: "Content Is King".  Some of my recent investments over the last few years have been media AND social media stocks:

Social Media - Twitter (TWTR); Facebook (FB); Snap (SNAP)

Media - Time Warner (Acquired); Time Warner Cable (I think Acquired), AMC Theatres (AMC); ROKU (ROKU); Twenty First Century Fox (Recently Acquired); Verizon (VZ); Disney (obtained through FOXA shares)

Sports - Manchester United

My investing logic is simple. With cutting the cord coming and the fact that I DVR record and stream most of my television viewing due to my busy schedule, I want to own the content and pipes.  My influencers love Netflix, Apple TV and Roku and I buy the content that they are paying top dollar for to watch on all their devices.  Because everyone is giving themselves (free content) away for free on Instagram, Snapchat, Facebook, and YouTube for cheap...my investments are focusing on content specifically Sports.  Why!! Because Sports is one of the last few things that people WANT to watch live.  Take March Madness, NFL, NBA, and the English Premier League. This is amazing content bringing lots of viewers to the media stocks listed above. The games and players are the real influencers and it actually drives more business.  You do not have to believe me, just look at the how your favorite politician has flipped in the last decade. Very soon, a majority of states will allow legal sports betting to cash in on the trend.  If you do don't know now ya know: Fan Duel, Draft Kings are partnering with major sports leagues to get everyone betting Billions of dollars.  What am I watching next:

Media - CBS (CBS), Liberty Media, Madison Square Garden

Sports Betting - Ceasars Entertainment (CZR)  

The value is there for good content. I owned and watched Twenty First Century Fox's stock skyrocket as multiple companies fought to buy it out and Disney eventually paid top dollar. Then I inherited a new company with AMAZING content Disney. Every movie my daughter watches 50 times over are Disney movies. And sports is the Top Dog! 

URB Prediction: So I think Ceasars and their big bets on online gambling are good for business and they will be bought out in the next few years. If the NBA, NFL, and MLB were smart...they would form a consortium and purchase Ceasars outright.

A 21 Savage Look Into – Business Income, Risk, & Expenses

A Conclusion to Side Hustle 101 Series 

Income

Music has always played a big part in people’s life.  Reading through my blog over the years, you will see that it is always top of mind for me. So when I drop some knowledge on the subject of income I could reference:

·         21 Savage – A Lot

·         YG – Big Bank

·         Jay Z – Big Pimpin

But I’d rather hit you with a simple rule I learned I learned from Warren Buffett: “Never Lose Money”. His second rule: “Remember Rule #1”. J  This rule is so crucial I use it as a baseline for my other pillars now:

·         “Never Lose Faith”

·         “Never Stop Learning”

·         “Stay Healthy”

Make sure your business and investments make more money than they lose and life becomes a lot easier. Stress over risks to your business and try to get the best return on your investment when you have expenses.

Risk Management

I spend most of my time stressing over things that will derail my pillars in life and my investments. If I’m eating unhealthy, why not cut back on sugar (easier said than done). If I want to reduce stress, why not focus on prioritization, time management, prayer, and meditation. You get the picture, but many people don’t think about risks UNTIL well they hit them in the face. A few examples:

·         Boeing – Recent crashes that have taken hundreds of lives may possibly be linked to not updating airplane software and a lack of pilot training.

·         Equifax – How ironic is it that the company responsible for our credit scores, history, and maintaining so much of our personal data is hacked ( A close second: Ashley Madison’s website hack and they promote discreet relationships for married people)

·         Lululemon – How smart was it for an athleisure company executive to mock curvier women who wear their clothes when that is your primary customer base

·         Netflix – How about when you do nothing wrong like Netflix, but you have the new “risk” that Apple’s new TV streaming service is now dubbed the ‘Netflix killer’

Well I think you get the point…consider all risks and focus on the biggest ones…your company depends on it.

Expenses

This is no one’s favor subject so let’s make it fun by keeping it simple. There is a reason why so many businesses were started in garages…for the free rent J So stop trying to play the part until you actually have money rolling in. Can you work out of your home or garage and forgo that pricey co-working space.? Do you have expensive software when you have one customer? I saw a show where a small business was going to trade shows every year and losing money (why go?).  Don’t get me started on a company car!!. I constantly evaluate: Office Location vs Co-Working vs Home-based; Software vs Spreadsheet; and Personal Car vs Company Car. Grow your business and make sure that next expense helps increase your bottom-line in the future.   After two good years, I decided to pick up the fully loaded BMW X5 e40 company car (I still have my personal SUV because that's for personal use). In the words of J. Cole on 21 Savage’s “A Lot” à ‘How Many Faking They Streams…I Can See Behind the Smoke and Mirrors People ain’t as Big as They Seem”.   Don't fake your streams and get a car you and your business can't support. Stay humble and grow your business smartly. Peace

Pics of my Company Car (and yes I plug in to get roughly 600 mpg...call me cheap)

Side Hustle 101 - Are You Open for Business?

My last post was entirely dedicated to ensuring that you have your legal affairs in order.  Many people get started and don't understand the risks a business may pose to their wallets. That's why business formation and how you choose to legally organize or incorporate is key. So here is my list of items to slowly check off to ensure you "Are Open for Business":

1) Legal Document Setup - If you don't feel comfortable documenting your own articles of organization, make sure you get help from from your local Small Business Association, online legal services (like Legal Zoom), or if more complicated a lawyer.  I went the route of documenting my own articles of organization for the challenge and found many helpful resources on the Internet. AND don't forget to designate who are all of your managing directors are and clearly specify the percentage of ownership within the company.

2) Domain Registration - In the digital world, it's critical to have a unique name and formally register your domain name.  YES, every good name is taken, but get creative why do you think we all have Google, Bing, and Yahoo at the top of our minds when on Internet. Your domain will allow you to have your own email domain address and website.

3) Email and Physical Address Setup - While not easy to setup, use your domain to get a non GMAIL, LIVE, or YAHOO address. It's not an immediate need but this addition to your business helps give you a professional look.  While not critical, many people often use remote mailboxes and co-working spaces to keep the professional look on all legal documents.

4) Taxes, Accounting, Invoicing, Expenses - I spent 3+ months reading the tax code. I personally think this is THE MOST important section of business to understand...but I am biased as I have an accounting background. By reading the IRS tax code, it helped me understand what legal structure I wanted to form, when to pay my estimated taxes, how to form and fund my 401K plan, what expenses I should consider.

Other key items items needing to be setup:
- Website
- Phone
- Logo / Letterhead / Business Cards
- Bank Account Setup
- Methods for accepting payments
- Internet and Connecting your Business
- Computers
- Staffing

My rule of thumb is to crawl first.  Spend a few months and get the first 4 items listed above rock solid. Then add things only as they become necessary. If you are an internet based business add a website immediately. When it is time to expand then you can learn to walk and run. I hope you found this helpful. I'll write one more post of the accounting and expenses and we'll get back investing and other fun subjects.