Motley Fool Money

What’s Next for 2023?

Fri Jul 07 2023

UnemploymentJob MarketFederal ReserveInterest RatesMetaThreadsAppleVision Pro HeadsetVRStreaming ServicesCommercial Real EstateOnline ContentNews PlatformsGolfingIPO

Description

The episode covers a range of topics including unemployment and job market trends, the Federal Reserve and interest rates, Meta's Threads platform, Apple's Vision Pro headset, investments in VR and streaming services, commercial real estate performance, the evolution of online content, transformation of news platforms, personal experiences and stock radar, and trends in golfing with an IPO watchlist.

Insights

Job market mixed results

Unemployment numbers showed mixed results with job growth slowing down but wage growth remaining high.

Discrepancy in employment reports

The discrepancy between the ADP and Labor Department reports highlights the difference in methodology.

Stressed job market

The rate of people leaving their jobs is decreasing, indicating a potentially more stressed job market.

Expectations of rate hikes

Expectations of additional rate hikes by the Fed are high, with the possibility of a third rate hike before year-end.

Meta's Threads platform

Meta's new platform, Threads, has seen impressive numbers with over 50 million sign-ups. It may be complementary to Instagram but is unlikely to replace Twitter due to free speech concerns.

Challenges for Disney's streaming service

Disney's streaming service had a great start but is now facing challenges with theatrical releases and ESPN.

Concerns about financial contagion

The first half of 2023 saw concerns about financial contagion and commercial real estate, but these risks have not materialized.

Underperformance of commercial real estate

Commercial real estate has underperformed for the past 18 months.

Evolution of online content

Social media changed blogging by shifting traffic and energy away from websites to platforms like Twitter and Facebook. BuzzFeed recognized this shift and evolved accordingly.

Transformation of news platforms

Facebook and Twitter initially mixed news and other content on their platforms, but it eventually turned into a toxic stew that consumers didn't want. Publishers and Facebook never recovered from this toxic mix, leading to the removal of news from the platform. The New York Times reinvented itself by preserving its core value proposition of great journalism and launching a subscription business.

Summary

Transcript

Unemployment and Job Market

00:05 - 06:25

Unemployment numbers and employment numbers showed mixed results, with job growth slowing down but wage growth remaining high.
The discrepancy between the ADP and Labor Department reports highlights the difference in methodology.
The rate of people leaving their jobs is decreasing, indicating a potentially more stressed job market.

Federal Reserve and Interest Rates

00:05 - 06:25

Expectations of additional rate hikes by the Fed are high, with the possibility of a third rate hike before year-end.
Investors need to adjust to a world where rates may stay high for an extended period of time.

Meta's Threads Platform

06:03 - 12:15

Meta's new platform, Threads, has seen impressive numbers with over 50 million sign-ups.
However, compared to Instagram's 2 billion users, the numbers are not surprising.
Twitter is currently in a chaotic state and vulnerable, making it a good time for Meta to launch Threads.
Threads may be complementary to Instagram but is unlikely to replace Twitter due to free speech concerns.
Meta's focus on free speech means they need alternative monetization methods beyond advertising.
Instagram aims to make Threads part of the Fediverse, expanding their user base and monetization opportunities.
Meta is a more flexible competitor than Twitter due to its cash cow business and multiple platforms.

Apple's Vision Pro Headset

06:03 - 12:15

Apple's Vision Pro headset production targets are being reduced due to complexity issues.
The expensive first device sets the tone for future affordable versions that will target mass market consumers.

Investments in VR and Streaming Services

11:52 - 18:20

Companies like Microsoft, Unity, and Adobe are investing in developing experiences with VR headsets.
Disney's streaming service had a great start but is now facing challenges with theatrical releases and ESPN.
Disney's stock value compared to Netflix raises questions about its potential as a value play or trap.
The first half of 2023 saw concerns about financial contagion and commercial real estate, but these risks have not materialized.
Student loan payments restarting in October may impact consumer spending in 2024.
Commercial real estate has underperformed for the past 18 months.

Commercial Real Estate Performance

17:55 - 24:46

Commercial real estate has underperformed for about 18 months and is trailing the market by about 1,500 basis points.
Industrial, hotels, retail, self-storage, data centers, and multifamily markets are performing well.
Barron's report highlighted values in the commercial real estate space.
Office real estate is a small part of the $1 trillion public REIT market.
The Renaissance for commercial real estate is expected to start in the second half of the year.

Evolution of Online Content

17:55 - 24:46

Ben Smith discusses the cycles in digital media and his book Traffic.
Blogging was revolutionary at the time as it allowed direct communication with sources and readers.
Social media changed blogging by shifting traffic and energy away from websites to platforms like Twitter and Facebook.
BuzzFeed recognized that social content was moving into professional content and evolved accordingly.
There was a period when mixing serious news with viral content on platforms like Facebook was popular.

Transformation of News Platforms

24:16 - 31:13

Facebook and Twitter initially had a clear logic of mixing news and other content on their platforms, but it eventually turned into a toxic stew that consumers didn't want.
Publishers and Facebook never recovered from this toxic mix, leading to the removal of news from the platform.
BuzzFeed, Vice, and other companies failed to adapt successfully to the changing digital landscape.
The New York Times reinvented itself by preserving its core value proposition of great journalism and waiting for the right time to launch a subscription business.
The Times merged with a strong subscription business and reassembled the old news bundle in a digital format.
Lessons can be learned from online content evolution, such as not over-learning lessons from the past war and being open to different revenue streams.
Short video is currently dominant, but text and audio remain useful technologies for delivering information.
News is not likely to be at the forefront of building elaborate three-dimensional spaces in the metaverse.

Personal Experiences and Stock Radar

30:46 - 37:18

The speaker is an activist and enjoys journalism
They covered the advertising conference in Cannes
They were editing a newsletter at 1.30 in the morning
They would do it even if nobody paid them
Amazon Prime Day is coming up next week
Amazon Prime has over 200 million members worldwide
$12 billion in sales during Prime Day in 2022
The average prime subscriber spends about $1,400 per year
Prime is available in only 23 countries, indicating further growth potential
Amazon Prime is a loyalty play with high retention rates
Costco is an example of a business with strong membership ranks and reliable cash flow
Customer experience and focus are crucial for success
Matt's radar stock is a developer and operator of industrial real estate in Mexico
There's a growing need for industrial space due to near-shoring and supply chain redundancy
The company pays a nice dividend and is well-positioned for US investors
Jason's radar stock is Topgolf Callaway Brands (ticker MODG)
The number of off-course golfers has surpassed on-course golfers for the first time ever
Off-course golfers prefer hitting golf balls rather than playing rounds on the course

Trends in Golfing and IPO Watchlist

37:00 - 38:51

There are 13.2 million on-course golfers and half a million off-course golfers.
Topgolf is a driving force behind the trend of off-course golfing.
Callaway acquired Topgolf a couple of years ago, expanding their reach beyond traditional on-course golfing.
Topgolf offers a different experience for golfers, similar to Dave and Buster's.
The hosts have personal experiences with Topgolf and find it interesting.
Vesta, a new IPO, is going on Dan's watch list.