374- Netflix

InvestED: The Rule #1 Investing Podcast

Phil Town & Danielle Town

Investing, Business

4.6 • 1.6K Ratings

🗓️ 21 June 2022

⏱️ 39 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

After a long-awaited couple of weeks, this week on InvestED, Phil and Danielle are digging into the big investing question mark: Netflix. On the surface, the technology and entertainment company seems to be doing well, however, there’s one big elephant in the room: it doesn’t have free cash flow. This is a huge red flag in the world of Rule #1 Investing, and something that typically leads Warren Buffett and Charlie Munger to avoid investing in a company. But that doesn’t necessarily mean Netflix isn’t a good investment opportunity. Join Phil and Danielle this week as they dig into how to understand a complicated company like Netflix and how to decide if it’s the right investment for your portfolio and long-term success. To learn more about what types of questions to ask and what you need to understand to invest with success, download Phil’s 4 M’s to Successful Investing Guide: https://bit.ly/3zzKVOd Resources Discussed: Netflix 10-K Topics Discussed: Free Cash Flow Debt Earnings Depreciation Schedule For show notes and more information visit www.investedpodcast.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	When you can't quite get the angle, take hands-free selfies with the Samsung Galaxy Z Flip 5,
0:05.2	stand it up, step back, and your photos are also synced to your Chromebook, ready to edit.
0:10.8	The new Samsung Galaxy Z Flip 5 and Chromebook, available on Vodafone.
0:28.2	Hey everybody, this is Phil Town.
0:29.7	And this is Danielle Towne.
0:31.2	Welcome to the Invested Podcast. We're really glad you guys are here, joining us.
0:35.7	Many of you are on your 304th podcast. Oh my gosh.
0:44.4	You're 74.
0:46.6	It's so cool. And we are diving into Netflix today.
0:51.3	Netflix. Everybody's favorite question mark.
0:55.6	This is really fun because Netflix is kind of a technology company. They're kind of a
1:00.1	branding company. They're streaming obviously. It's like, how do we figure out whether this is
1:06.3	a company we can understand? How do we figure out how to understand it? What can we do?
1:10.4	And kind of looking at it through the lens that a Warren Buffet might look through it at,
1:16.0	which is fascinating because of course it's dropped like a brick. And to my knowledge,
1:20.8	Warren Buffet isn't buying any of it.
1:23.2	Well, to your knowledge, because we don't know about these things until later.
1:27.6	Right. Exactly.
1:28.4	But it does not seem like his kind of company. I will say that.
1:32.8	Yeah, it's true. I think the biggest reason it doesn't seem like his kind of company to me that
1:39.0	just leaps off of the page of Netflix is that it doesn't have free cash flow,
1:46.5	which immediately puts it in a very suspect category of companies that Buffet and Munger tend to
	...

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