The Best One Yet - “The stocks on the ballot” - Presidential stock impact. Pinterest dudes. Spotify & Netflix’s price-punch.

Episode Date: November 2, 2020

We’re breaking down the stocks most affected by a potential Biden presidency and a potential Trump second term (now go vote). Pinterest shares popped as we noticed the rise of the Pin Dude. And Spotify and Netflix plan to hike prices because of media’s willingness-to-pay moment.$PINS $SPOT $NFLXGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. Welcome back. It is Monday, November 2nd. Last month wasn't great. We just finished the worst month for stocks since March. Jack, happy November.

Happy November. It's actually V-Day minus 1 today. And it's a T-B-O-Y. This actually is like way better than the last podcast we did. For our first story, happy election Eve, Snackers. Snackers, we're looking at what stocks could be affected by a potential Biden presidency. And what stocks would be affected by a potential Trump's second term. We're also going to hit our second story.

What do we got, Jack? Pinterest stock surged by 30% on one day alone last week. Honestly, Jack and I noticed it's all thanks to the rise of the Pinterest dude, the pin dude. I confess. Yep, I'm becoming a bit of a pin dude. Full disclosure. Third and final story, Jack. Netflix and Spotify are pretty similar if you think about it.

They're both streaming giants. They both charge about 10 bucks a month. One's video, one's audio, and now they're both jacking up prices on us. This came out of nowhere. But one is much easier to share passwords than the other. You know who we're talking about. But before we jump into that wonderful mix of stories, tomorrow, tomorrow's the day. It is the day.

Tomorrow is the day. But context is king. So let's go back to Philadelphia summer of 1787. Jack was 72 degrees in sunny and the Continental Congress got together four months to draft a business plan for a new nation. Now, what was so unique about the American Constitution, it was the first time democracy was established on that scale. And what was so special about this Constitution is that they drafted it so that our democracy can scale. They preempted the inevitable VC question, but can it scale? Okay, it comes up in every fundraise meeting, real thing, real issue.

Now, they knew the founding fathers did that things would change and evolve, and that would need to be reflected in our Constitution. For example, along with that gorgeous calligraphy we've all seen in the Philadelphia Museums, not so much on the gorgeous inclusion. Yes, at the time when it was ratified, the Constitution only guaranteed white men the right to vote in this country. It wasn't until 1870 after a civil war in the 15th Amendment that black people got the right to vote. They technically got the right to vote, but not really, we'll get to that in a second. And then after the women's suffrage movement, women got to vote too in 1920 with the 19th Amendment to the Constitution. These amendments are looking good.

Also, suffragettes got it done. And then in the 1960s, 100 years after technically getting the right to vote, black people actually got the right to vote. That was with the voting rights. Rights Act of 1965. And today, there's still people trying to prevent certain people from doing actual voting. The early takeaway here, America's not perfect. Our democracy is pretty, pretty damn good. Yeah, let's look at the comparables here. This summer in Russia, the guy who was running against Vladimir Putin was poisoned, probably by Putin's government. Oh yeah, and today in Hong Kong, you'll be arrested for speaking up against the Chinese governing party in Hong Kong. Nick, you know I was a German major in college, the last election of East Germany in 1989, the winning party received

98.5% of the votes. It's a round-up situation. East Germans, they were nudged not so gently by the secret police, you know, to vote for the ruling party. And that's what happened. Snackers, America's democracy is not perfect and change takes time. In fact, Chile is drafting a whole new constitution right now again. We're using the same one from over 200 years ago. Our constitution and Democracy get better every time we vote like tomorrow. Let's hear our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way.

The snacks about the hair ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. We're not recommending any securities. It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible.

Business news for you. Robahood Financial. LLC, member Finra slash SIPC. For our first story, Pinterest stock just popped 30% on one day last week, thanks to the Pindood. We also saw a new competitive advantage for medium tech. For medium tech, for medium tech. You know, Zach is honestly, big tech, it's getting all the attention right now, Jeff. How about like medium tech?

Like not a tiny startup, but also not Amazon. We got a Goldilocks situation going on here. We got to address. Facebook is worth nearly a trillion dollars. and has billions of users. Turns out Pinterest is worth billions of dollars and has millions of users. Everything Pinterest does is one level of magnitude

smaller than Facebook. Pinterest is like, let's look at Facebook's earnings. Just cut off three zeros. It's actually just a game of math. Yeah, basically. Now, Pinterest Snackers, it was already winning the coronavirus because you're going for the creative, high intent activities right now.

Pinterest isn't the mindless scroll on the toilet. Pinterest is when you need an answer or inspiration on something visual. Jack, are we doing subway tile for the backslash? Are we doing the fig tree next to it, or are we going to go with a cactus? That's right. You go to Pinterest with an intention and eventual plans to buy something. Jack, the answer, by the way, you went with the mosaic tile,

and you're going to end up with a giant succulent we all do. And that is why the stock had quadrupled since March, even before last week's big jump. You got an unprecedented amount of people with an unprecedented amount of time and an unprecedented level of focus on their home spaces right now. And shopping to do. And they're shopping. But what Jack and I found fascinating was one detail within Pinterest earnings,

which is a big shift that they call the post-COVID man. We call it the rise of pin dudes. Yep. The rise of the pinned dudes. Snackers, they will focus on Pinterest on the reality that women were the first to embrace Pinterest and were proud of it. That's what they say at Pinterest. And women still represent 60% of the active user base on Pinterest.

Get these numbers, Snackers. On Pinterest, men searched for the term kitchen storage solutions seven times more in the last quarter than they did a year ago. And in this last quarter, there was a 6x increase in the number of men checking out pins on fashion streetwear. Oh, and there was a 7x increase in men looking up creative makeup looks. And another six times increase in men checking out artisan bread recipes. The post-COVID man, the Pinterest pinned dude, it is more aesthetic, he is more wholesome. He is into baking and he's definitely not gluten-free. He might be gluten-free.

So, Jack, what's the takeaway for our buddies over at Pinterest? Pinterest just searched because of a new competitive advantage. It is a safe space for advertisers. Snackers, the other key numbers from that earning support, Pinterest enjoyed a 37% surge in users that led to a 58% surge in new revenues. The reason revenues outpaced user growth is because Pinterest is a positive corner of the internet with no political ad since 2018. No, no, no, in fact, positive corner of the internet, that's what they're describing it,

and that's what both users and advertisers are thinking, too. If you're a user who is tired of conspiracy theory rabbit holes and all caps rage posts, you went to Pinterest in the last three months. If you're an advertiser who doesn't want your ad to appear next to an anti-vax post by your crazy aunt, you went to Pinterest in the last three months. And that is because brands care about brand sentiment. If your Dove Soap ad is adjacent to some ugly content on social media, media, people are going to remember Dove as ugly. It's psychology. In a world of big tech social media

controversy, Pinterest has become a safe space. For our second story, Netflix and Spotify are facing more competition than ever. So they're doing the opposite of what you'd expect them to do in response. It doesn't make any sense, but it makes so much sense, Jack, are you enjoying Emily in Paris right now? Are you having fun with that Fleetwood Mac album? What are you doing? What are you going on? Yes to the second, no to the first. I'm watching. Stranger Think Season 1. It was a great Halloween weekend activity. Are you watching it again? This is the third time. I'm watching it the third time. No trick or treating. Nope. Just getting afraid from the Demigorgans. At some point we're going to need a disclosure here if you

keep watching that show. In the meantime, Snackers, you are going to notice your monthly bill is about to rise. Netflix announced last week that their standard subscription is going from $13 to $14 a month and their premium subscription, don't know anyone who has that. Nope. is going from 16 to 18. I think my mom actually has that. But Spotify, in the meantime, also said in their earnings last week, they're going to plan to raise some prices too.

Right. Spotify is currently $9.99 for the premium account per month. Yes, it is. So they're going to have to venture into the dreaded double-digit territory. Somewhere at some top 10 business school, a professor is really angry about behavioral psychology right now. Now, Nick and I want to highlight a fundamental truth of the media industry. People have a finite amount of time in their day, just like they have a finite amount of space in their stomach.

Yeah, Snackers, here's how you can think about the media industry. Every day, there are a certain number of hours. You're consuming media, just like you have a certain number of meals. And in the last year, there have been a surge in new options of streamed media for users to indulge. And a wide variety. Let's check out the streaming buffet. In the last year, you got Disney Plus, Apple TV, HBO, Max, Peacock, Quibi for a period. Let's expand our mind a little on this buffet theme. You can also TikTok all day or listen to a lot. a podcast or check out anything on YouTube. Or maybe now you're streaming a Vinyasa flow free on the Nike app or you're hitting a new hit routine on Peloton's new app. Snackers, what Nick and I are

trying to say here is there's a lot of media fighting for your finite time and we're thankful you're listening to Snacks Daily. That's true. That's true. That's the early takeaway here. Now Netflix and Spotify are looking at all that new competition in all new places, including from like fitness apps and they're thinking they can go in one of two directions. The first direction is the path more traveled, the easier path. It is. They cut prices. That's it. Super simple. Forth the other new competition to lower their prices too. Netflix and Spotify can afford to cut prices. But these newcomer competition, maybe they can't so they're thinking they could win in the long run in a price war. But the harder path to take in this case would be doing the opposite, and that would be

raising prices. Don't worry about what the competition is doing. Focus on your company and your customers. Netflix is raising prices to focus on themselves. With this extra revenue coming in, they can pour even more money into content and have even better shows. Jack, have you seen the attention to detail on season five of the Crown? Next year, they can build a whole Buckingham Palace.

An actual one-to-one replica. They're going to do it. They're probably going to do it. Read. So Jack, what's the takeaway for a buy-sover at Netflix on Spotify? For Netflix, the churn is worth the book. Snackers, we got our own case study here, courtesy of Netflix. Last time Netflix raised prices was in January of 2019.

Yeah, Jack and I checked on it. Back then, cancellation rates rose some people were frustrated. Yeah, some people ended their subscriptions. But revenues rose too for those who didn't cut their subscriptions. Revenues rose too. They lost $12 a month for the million or 2 million subscribers who were like, I'm done. Yeah, I'm counseling Netflix. I can't stand these price increases.

But Netflix gained a dollar a month for over $100. million people who didn't quit on Netflix. Because Snackers, if someone told you Netflix was going away, how much would you pay to get Netflix not to go away from your life? Yeah, you're going to pay. You're going to pay an extra dollar too. For our third and final story, tomorrow is election day. So we got to break down the overall impact on election day on stocks. Which is like the number one question we've been getting on Twitter. What's your take on stocks in the election? Jack and I keep getting this. Here's our take on stocks in the election. Yeah, so here it is. By the way, full disclosure, what we think has like, you know, a good plus or minus 50% chance of being totally wrong.

It is hard to predict anything about this election. And 2016 is a good example of that. Cough, cough, I guess it is. Now, the biggest boost of stocks in the last four years came in 2017 with the corporate tax cut from Trump and the Republicans. When that law passed, profits for companies rose by about 25%. Yeah, overnight, like any company. But now, Now you've got a situation where the economy is sick with COVID and stocks, we're kind of getting bumped up by the extraordinary moves of the Federal Reserve. This is a once-in-a-lifetime thing the Fed is doing, and it's boosting the ocean of stocks overall.

So when Jack and I are looking at the wide spectrum of stocks we look at every day that is out there, there are sectors of stocks that may love or hate a progressive or conservative policy. Scenario number one. Let's say Biden wins the election on tomorrow. Yeah, that could be good for car companies, for example, because it would lead to to clarity on fuel emission standards. The number one thing investors and executives love is clarity about the future.

Clarity. And car companies, they're already moving electric, but a Biden election would solidify them having to do electric. The cannabis industry is also likely to benefit because Kamala Harris mentioned legalization as a priority in the vice presidential debate. Yeah, cannabis stocks, they're a long-term bet on federal legalization. They're kind of dependent on that. As it is today, you can't scale a Colorado THC beer business.

because you're not allowed to ship it to Florida because of federal illegal status. And then, if you look at stocks overall, many Wall Street analysts are thinking of Biden presidency would simply bring stability. Imagine an economy with fewer trade wars, less policy volatility, and less social strife. Yeah, you try to put a new countertop that's made in China. The price isn't going to pop 25% when you check it out the next week. Okay, those are some sectors that could benefit with a Biden presidency. But if there's a Trump win, the first sector we're looking at is oil and gas.

Trump is opposed to a transition away from fossil fuels. BP, though, is already transitioning away from fossil fuels so they may want a Biden presidency, and so would like, you know, a first solar, who we just talked about. Yes. But the oil and gas industry, like Exxon Mobil, Chevron, the oil companies, the gas companies, they are rooting for a Trump president. Then you've got the defense companies, which tend to get a lot more funding under Republican administrations. Lockheed Martin manufactures the F-16 fighting Falcon Air Force jet.

And Trump loves pitching that, like when he visits Saudi Arabia. So when you see stocks overall under a potential Trump victory, that could preserve corporate tax cuts, which would probably benefit stocks. You're noticing, Snackers, we think stocks overall could gain in a Trump or a Biden presidency because we can't predict this. But then there are the fascinating sectors where it's totally unclear right now. Healthcare, on the one hand, more people will likely be covered and paying for health care under a Biden presidency. But this is where it gets funky because on the other. other hand, pre-existing conditions will be forced to be covered, and then there'd be public competition, which would also come. Those are both under the Biden administration. There's good

and there's bad for the health care industry. Then let's look at the big banks for a moment. A Biden administration may lead to higher infrastructure spending, which would require a lot of borrowing. Yep. Which would likely increase interest rates overall, which is good for banks. But a Biden administration could also come with tougher financial regulations, which could harm big banks. Lastly, let's take a look at big tech. They're likely facing higher scrutiny, no matter who's elected. Yeah, for different reasons, from both sides. So, Jack, what's the takeaway for our buddies over in the entire United States of America? If you own stocks, you signed up for risk. Yeah, if Snackers, maybe you're super worried about your investments based on the election

right now, you might be in too many stocks if that's the case. I'm not doing anything with my stocks based on the election. Full disclosure, Jack, I'm not doing anything over the next week of stocks either. We're in stocks for the long term and we're not trying to time our buys and sales based on politics. But a little exercise you can go through over the next 24 hours is imagine a bad scenario where your stocks, your portfolio fell by 20% because of the election. If that is unacceptable to you and you'd be in like major, major trouble, then you're probably in too much stocks right now. Stocks can be a good investment if you're willing to accept the risk that comes with them. If you're not willing to accept the risk, then there are less

risky things to invest in. Yeah. Like bonds, true, mutual funds, even just keeping it in cash. An extra takeaway here, you should probably just vote tomorrow. Jack could to whip up the takeaways or something over there. Pinterest is benefiting because guys are pitting more. And it's a safe space for advertisers. For our second story, Netflix is jacking up prices again. Jack, can you say it with me? Here we go. One, two, three. The churn is worth a burn. Because Netflix is investing in itself. For our third and final story, stock markets will probably be more volatile this week than other weeks. And when you invest in stocks, you're signing up for risk.

Now, time for our snack fact of the day. This one tweeted in by Charlie Cleman in Lovely Denver, Colorado. WD40 is both a publicly traded company and the thing you spray on door hinges so that it stopped squeaking so much. It's awesome WD on that thing. Now, it first appeared on store shelves back in 1958 in Lovely San Diego. But before that, WD40 was used to prevent rust on military missiles. But if you're curious where the name comes from, here's the breakdown. The WD Jack, water displacement stands for water displacement.

And the 40 stands for the fact that they didn't perfect the recipe until the 40th try. It's actually a great life lesson. WD 40. Keep trying. It's like Johnny 5. Yeah, it's like Johnny 5. Snackers, that's it. Tomorrow's election day? Make a plan. Make sure you vote. We'll see you there. We can hang out online with you. If you got a buddy who needs transportation and it's COVID-friendly, maybe you can give a ride. You may as well. Both of you should vote.

Nick and Al, see you tomorrow. And before we go, Snackers. Congrats to Snackers Enrique and Zara. They're moving in together down in Houston. And Meredith Her is getting a new job in Atlanta, Georgia. And Justin and Chelsea celebrating the one year over in Nashville, Tennessee. Catherine and Ricardo are celebrating seven years in Miami Beach, Florida. And I'm in Salé getting married over in Riyadh, Saudi Arabia.

And happy birthday to Luke Nagashima in Honolulu. Hawaii. And to Colton Penning in Peck in Illinois. And Jake, aka Baby Einstein in New York City. And Abby Reisner over in Brooklyn. And Grace in San Diego, California. And happy birthday to DeNitra Hayes in Olap, Kansas. This is Jack. I own stock of Spotify. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is

not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC, member FINRA SIPC.