Sprint + T-Mobile (Hookup Alert)

Right now, my stock portfolio has more hook ups going on than the teenagers in HBO's new hit series Euphoria!  Well, you can see why I am a investor and not a comedian.  But back to the lecture at hand...a few months ago, I alerted you that things may be bubbling with Sprint and that a takeover could be in its future.  👰

How might an investor come to this conclusion? Just listen to Sprint executives themselves.  Sprint for awhile now has been publicly telling the investment community that its business pretty much sucks.  From what I can understand, the money-maker is its pre-paid wireless customers...then the HUSTLE is to convert those customers into post-paying customers like me where they can be up-charged and over-charged for services like unlimited talk, text, and data (post-paying customers). Interestingly, Sprint has publicly acknowledged they are giving out so many incentives that the business model is a money looser.

Now here comes the million dollar question, why do I care about Sprint AND why would I invest in a poor performer.  Well, I often take a contrarian view to life and believe that most things are...well "complicated".  Most people want to call Sprint a dog with fleas and they would just rather stay away.  But most things in life have layers and it's in your best interest to peel back those layers. Like in relationships, you just don't look at what's on the surface you have to look at the whole package.  Sprint's whole package is that it is one of the four leading wireless carriers in the US. I learned in elementary or middle school (can't remember) that this is essentially a cartel (monopoly, duopoly, triopoly...cartel??) haha  I prefer oligarchy but let's not get technical. The point is there is still tremendous value here. As my astute friend pointed out, how can Sprint get taken over and leave only 3 wireless carriers...that means prices go up | less choice | and maybe service declines.

The contrarian in me points out two simple facts: 1) Capitalism - the deal gets done b/c a lot of people stand to make a ton of money (it is convenient Sprint's commercials say they are doing well, but the Execs say the business is declining).  I do not usually have time to listen to quarterly conference calls but I found it MORE interesting that Sprint executives have been putting their houses on the market since the end of last year. How about the fact that the Corporate Office has already been sold. 👀 Strange this has all happened and the deal is NOT even complete as of this post.  2) Less Choice - Prices have been declining ever since T-Mobile took the American wireless industry by storm with good ole "competition". So you go with the contrarian view that Verizon, AT&T, and the market has had enough of its decline in revenue due to T-Mobile's entrance and the smart investment is for them to buy Sprint. The only thing is how do you sell it to the public. 😇 Well, the Department of Justice (DOJ) has supposedly negotiated a deal for T-Mobile to sell excess spectrum to another party to create a new 4th major wireless carrier. Wait for it...who can't wait to buy cell phone service from Dish Network 💪💪

Urb Lesson of the Day: Everything and everyone has layers. Take time to peel those layers and get to the obvious truths in life. I traded Sprint multiple times in the last 7+ months and tomorrow's announcement will eventually lead to the closure of my outstanding trades.  Disclosure: I own Sprint (S) and by trading from the bottom up...I followed everyday clues hidden in plain site to reduce my risk on what some called the "unlikeliest" deal to get done.

Executives Sell Mansions Before the Sprint Deal is Done: Follow the Mansion Money


And My Comments from May 2019:  And Sprint (S), Sprint keeps getting offers to play overseas for T-Mobile but the FTC (like the stock version of the NBA Commissioner) is telling me that the deal is unfair. Funny he doesn't say that to Verizon or AT&T the biggest cell phone carriers. Let a player get his money Commish?!?!  Approve the deal and let me bask in the glory of my draft pick prowess.

Linky: May 2019 Post on Sprint

#investandchill #Sprint #T-Mobile

Invest and Chill – How to Be a Portfolio Player

To be a player you have to learn from a player.  And I’ve read my fair share of books about players or as I call them, Original Investors’ in the stock game.  Please don’t get confused, they are not OGs or Original Gangsters, they are more of what I would call old heads or OIs  à Original Investors.  Ron Baron, Peter Lynch, Warren Buffett, and Mario Gabelli are just a few that come to mind.  In addition, I appreciate successful business people and investors who look like me. Some of those great businesspersons include: LeBron James, Jay-Z, Sean Combs, Dr. Dre, Oprah Winfrey (Sports & Entertainment) and Robert Smith, and John Rogers Jr (Financials and Investments). I remind people some of the same skills come in handy when running a business and investing in businesses. One might say: Game Recognizes Game

But back to the lecture at hand, I want to focus on an Original Investor name Mario Gabelli. He often jokingly calls himself “Dr. Love”.  Our generation might ask is Dr. Love the king of “Netflix & chill” or “swiping right”…no not exactly, he’s a player alright just of the stock market.  So what kind of player is this?? Well he often targets companies that will be acquired by another company.  Acquired/Merged/Bought Out…are just the stock market’s way of saying these two companies plan to hook up.  Companies that hook up in the stock market are usually a good thing because the company being pursued usually requires a lot of cash or stock for this to happen. 

So one of the things I challenge myself to ask while researching stocks is whether my stocks are “dateable”.  While it is not my main strategy, it helps to have this as an additional catalyst for a stock to do well.  I try to identify trends in companies being acquired and often ask: “Why is this stock so attractive to other companies?”, “Is this an industry trend that will continue?”, and quite frankly “who might be next”.  While it sounds a really bad dating show, it is important to understand if the company is a diamond in the rough, considered young and attractive, or could the company make company’s pursuing it BETTER.  Here is my Invest and Chill Portfolio:

Possible Themes Uncovered: Healthcare (rationale: all the talk of drug costs coming done??); Media (rationale: Content is king as everyone moves to streaming and online gambling); Technology & Telecom (rationale: young and attractive companies being bought, 5G coming soon??); Value (rationale: strong market means underperformers get bought out??)

Urb Update: Full Disclosure: I’ve owned all of these stocks as noted before; many are currently in the process of being acquired. Feel free to search the site for previous posts and commentary

#investandchill

Did You Say Narcos...Or Anadarko

Interesting?!? When they interview sports stars, is it odd they often say: "If I could do anything else I would be a rapper.   Then the big NBA game comes on and I see E-40 cheering on Golden State, Drake court side in Toronto, and YG and 2 Chains on the court at the end of Los Angeles games.  Well to take a page from their playbook, investors wanna be both!  My investing game in basketball terms feels like I'm in a zone.  Or maybe more like I'm playing zone...like the defense.  The zone defense is known to be safe or even cautious as it does not require the players to exert a lot of energy when defending but requires you be consistent, diligent, and opportunistic.  I am cautious on the markets as they continue to grind higher.  I still think the business climate (due to the tax cuts) and job hiring is trending up. Further, I think the market will melt up even more IF a deal with China (any deal) gets done.  But I think signs in housing and other areas tells me, the dynasty is almost over.  So what does my zone defense look like?  Well here is a run-down of my zone defense portfolio in Game 5 of a 7 game series:

Coaching (Doc Rivers, Phil Jackson, Lenny Wilkens) - Like the great coaches listed here, I try to remain level headed, even zen like, on where the market currently is. I feel like we are in Game 5 or 6 of a 7 game series. So I'm coaching my team (oops my portfolio) to be ready for the downturn...we don't like being blown out.

Guards (Chris Paul, Damian Lillard) - Like CP3 and Dame, my PG is small but packs a punch! So my point guard is Collectors Universe (CLCT), this is a small cap company that I have been overweight for a VERY long time. And they don't seem to disappoint. They had a bad quarter and Wall Street punished them awhile back dropping them from $30 to eventually below $15. If you've been following us here you'll remember when we picked then up during the recession of 2008 at the $4 dollar level. And for us they mint coins...almost literally and grade "mint-condition" baseball cards and collectibles. So that means steady cash streams coming in, a nice dividend and an appreciating stock.  If you read the previous conference calls, part of the bad quarter was slow China demand and a big time investment in a new corporate HQ. Well guess what, those costs related to the HQ are behind them and the last two quarters have been positive. I picked up more shares after the HQ build-out because for a small cap company I felt it made a difference in their earnings. I like my PG so much that I bought more Collectors and put it in my 401K plan for the long-haul. Cheers to CP3, Lillard and CLCT!!

At the other guard position, I rotate the Young Guns. This group is spring loaded and receiving trade offers as other teams want my players. If this were International football (or what Americans call soccer) these players are hitting the the transfer window, or season where other teams pay top dollar for my players:

Anadarko Petroleum (APK) - I picked on Andarko as Chevron was showing interest and now there is a bidding war that has ensued. And look who jumped into the fray... my mentor Warren Buffet is lending money to Occidental Petroleum to outbid Chevron. If was just announced because some investment firm tracks jets and saw that the Occidental jet flew to Omaha...really who has that much free time!!! The Narcos are circling Anadarko. Looks like my draft pick may get bought out soon.  My guess is Occidental wins out with a sweeter bid and the Buffet brand name (we'll see).

Arconic (ARNC) - An earlier trade fell thru but this player has been working on his skills. Dropping down to about $18, and putting up big numbers by bouncing back to the $22 range. I may be getting suitors coming to the table soon and now they pay more than the $23 range to buy this stud out.

Tesla (TSLA)- Like the Nets Guard De'Angelo Russell, everyone has an opinion. So after the terrible earnings call, I took a chance here. Some may second guess my value call, but along with Ron Baron, and others, I just personally think Tesla is a transformation company that will explode. Mr. Russell who was left for dead...is now a NBA All-Star this year due to his hard work and transformation. For example, I drive a Plug-In Hybrid BMW X5 e40 (fully loaded 😎and 600 mpgs) and trust me the experience is nice, I'm sure the Tesla models are even nicer because they dominate the electric vehicle space.

Qualcomm (QCOM) - When I want to play a savvy veteran, I turn to QCOM. Again some questioned the value here when they were battling Apple the goliath of the tech industry. I wish I would have gave QCOM a bigger contract because they went to Game 7 with Apple and won a $4.5B settlement!! A stock in the mid-50s exploded up into the $80s leaving me happy for the player and bummed I didn't invest even more. What a shocker.

JD.com (JD) - This stock is like a chance on the player suspended for taking performance enhancing drugs, TWICE. First, the tariff issues with China took all the steam out of this stock. Then the 2nd item was the CEO was accused of assault and battery. The stock was hovering around $30 and then tanked into the low 20s. It appears the Minnesota prosecutors did not choose to prosecute after new videos surfaced recently appearing to help the CEOs case.  Now basically breakeven, this player may spring back into Player of the Year discussions if the China negotiations with Trump are finalized.

On the bench: I have one player preparing to pack his bags: Celgene (CELG) - they were acquired and soon we'll part ways with a nice contributor.

And Sprint (S), Sprint keeps getting offers to play overseas for T-Mobile but the FTC (like the stock version of the NBA Commissioner) is telling me that the deal is unfair. Funny he doesn't say that to Verizon or AT&T the biggest cell phone carriers. Let a player get his money Commish?!?!  Approve the deal and let me bask in the glory of my draft pick prowess.

Next time, I will go into my Development League team: Newell Brands (NWL), Stitch Fix (SFIX), and Colony Capital (CLNY)

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.

Side Hustle 101 - Own Your Business

I wanted to continue my Side Hustle series with a discussion on owning a business.  The series kicked off with a previous post on "Starting Your Business" which serves as a reminder take your time to find a business that is unique, fills a need, and can profitably grow over time.  If it's not unique, it could eventually be copied one day and you don't want to compete by having to lower your price. If it does not fill a need, customers may not see the value in repeatedly buying your product or service. If your business does not turn a profit in 2-3 years, then you may have a hobby (instead of a business) that is exciting but will also suck you dry over time.  Again my challenge to you is to spend an enormous amount of time developing a business plan then find people from all different backgrounds to poke holes in your ideas which will make you and your plan stronger.

I joke, if you can't explain to me what you do in one or two sentences THEN you may not even know exactly what your business is.  I didn't truly appreciate the value of a well-thought out mission statement until I listened to recently retired PepsiCo CEO Indra Nooyi on a podcast simply describe how she viewed and chose to run PepsiCo's various businesses. The company's products range from salty snacks and sugary sodas to juices, water and breakfast food.  On the podcast, I was memorized by how she artfully danced around the conflicting products by saying: "We make things that are Fun For You (salt and sugar), Better for You (Oatmeal, diet), and Good for You (water). In those few words, I could envision how they brought Doritos, Mountain Dew, Diet products, water, and breakfast foods all together under one umbrella.  The genius in this vision is they want you to have a Pepsi product in your hand NO matter the event NOR time of day.

Owning Your Business
Take calculated risks and get your business up and running without trying to spend tons of money. I can't believe how often I ask someone: "Why do you have a fancy business card, calendars, computers, and chairs if your business is not making money?" Our challenge is NOT to worry about looking the part, simply hustle until you are doing so well that the business forces you to become more efficient. This theme applies to many things in life: Spirituality, Sports, Volunteering, Business...just compete | just serve | just do work. 

I'll end with make sure you "Own Your Business". This is a crucial step in setting up your business, also called business formation.  You must determine what business structure fits best for you:

• Sole Proprietorship
• General Partnership
• Limited Liability Company (LLC) - Solo Member or Multi-Member
• Limited Liability Partnership (LLP) 
• Corporation structure - C Corp or S Corp

Invest in yourself and know the difference from a legal and tax perspective so that you can simply focus on your business.  Many people forget that you can change the business structure over time as your company grows. My personal example is I have a very simple business and was perfectly fine being a Sole Proprietor because finding work as a consultant wasn't difficult and I wasn't taking on lots of risk.  Well two years later, things are going well and talk of expansion and more growth means a different structure may be needed to manage the new risks I see on the horizon (bigger clients, more services, personal liability).

Why do I do this: Because a long time ago I told myself if I were to bet on anything, I would bet on myself. I know my strengths and weaknesses. Growing up not well off, I decided if I'm going to lose anything (especially money) I only want one person to blame: Me. This was reinforced over time through the greats like Warren Buffet, Oprah Winfrey, Michael Jordan, Jay Z, Dr. Dre, Sean Combs, Master P and now even J. Cole. They've talked about being independent, owning your own masters, negotiating your own deal, being bout it bout it. That what drives me because I've been working most of my life to get to a point where I can make deals on my own terms. Reducing debt, passing up on "wants" as much as possible, valuing every dollar, and investing in yourself will put you on the path that says: If I ever feel like my salary isn't right, my offer is too low, or I'm being disrespected, I'm gonna GO OUT AND NEGOTIATE A BETTER DEAL FOR MYSELF.  And if you can do it better: GO BUILD THAT NEXT BUSINESS AND YOU CALL THE SHOTS.  If the timing is not right, don't worry...be patient and improve your skills constantly until you're ready to take the next leap.