アンディ・スワン：次のテスラ株を見つけるためにソーシャルデータを使用して (Andy Swan: Using Social Data To Find The Next Tesla Stock)

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hello everybody and welcome to investing with IBD sponsored by Market Smith
today is February 19 2020 I'm your host Irusha Peiris and with me today is Andy
Swan he is the founder of LikeFolio thanks for being here Andy yeah thanks
for having me on on today's podcast we are going to talk
about the current markets how social data can help you in your stock analysis
and then we will end the episode with three current stocks so the current
market the market continues to be in an uptrend we have two distribution days on
the Nasdaq five on the S&P 500 but the market continues to climb that wall of
War II and more importantly leading stocks are acting well in hitting new
highs Andy what are your thoughts on the market yeah I think you nailed it it's
just very strong and continues to just defy expectations I think you know it's
almost like the more negativity is in the in the headlines of the world the
higher the market goes yeah I think there's pretty good reason for that I
think that the economy is strong there's a lot of wealth being created and you
know there's a lot of great companies doing some extremely innovative things
so I think that drives a lot of this and there's excitement around around all
that plus money's pretty cheap that's true and and also you know the US
markets are now like the safe haven right this seems like the money's coming
from everywhere else and let's Park in the US markets because of that
innovation and also where we're not having as many crises as a lot of other
parts of the world that's right yes exactly and and so you definitely want
to make sure you're keeping your watchlist fresh keep an eye on those
leaders because eventually there's going to be a time for a pullback and so
they're gonna set up and give everyone an opportunity to get buy more shares or
start initial positions so Andy let's get into how you got into investing
you've been doing this for a while now and so why don't you walk us down the
path that led you to starting LikeFolio yeah so we actually it's
you know my brother and I have been partners in this since the very
beginning we actually opened our first brokerage account together we were
college roommates oh wow and this was you know this was in
college it was 1998 1999 markets were popping like even at the
gym people were watching CNBC rather than anything else it was just the
dot-com boom and everything was moving and it was a great way to get involved
in it was really like very exciting and it made sense to me the markets did I
understood not necessarily you know valuations and things like that but I
understood supply and demand and how companies can participate in in growing
the economy and that sort of thing and so there was this new era that made
sense to me I was online a lot I understood the dot-com boom and in the
in the ways that I could yeah and so I got very interested in the stock market
started studying it started trading our money and you know really just kind of
learned by going and that I think a lot of times people miss that aspect of it
it's everything's kind of academic until you have real money on the line I think
for a lot of people and it doesn't have to be a lot we started with a couple
grand in a brokerage account and that was you know very real to us and very
fun and you know it's just super interesting from the very beginning in
1998-1999 it sounds like a long time ago now but it doesn't feel like it no not
at all because that that was the time where I got exposed to the markets too
and it was remarkable how everyone was talking about the stock market at that
time let's you touched on an interesting concept here about you know putting real
money on the line and the emotions that people feel a lot of people it you know
especially more analytical people they want to do all the analysis first before
making that move and it's that paralysis by analysis but going to a little bit
more about you know just put some money on the line and learn to feel those
emotions that come out when you start doing well in the markets and then when
you start doing really poorly yeah I think I just think that it's really easy
to pretend that you're doing something and you know it's kind of like I you
know I like to make sports analogies all the time because I play basketball and
you know it's like you can't really read a book on how to shoot a free-throw and
eventually you got a step to the line with a crowd around you and with other
players on the line and the scores going to matter and that changes everything
and all that stuff that you read goes out the window and so I think it is
important because probably the most important part of investing I think is
you know understanding your own emotions and how they can throw you off track and
disrupt a strategy that you might have and so until you have those emotions
engaged you really don't know how to control them and unfortunately I haven't
found anything that really beats a couple of bad losers in terms of
teaching lessons in a really quick way and that's true though the market has a
great way of humbling all of us yeah so after you and your brother started your
brokerage account you started putting real money on the line what were the
next steps that got you more involved and really started you know enabling you
to become an entrepreneur yeah well we had we had really good success and you
know a lot of people a lot of people did at that time because it was the dot-com
boom and everything was going up but you know we had some unique advantages we
figured out we figured out like simple things like real time quotes and level 2
quotes and things like that that were kind of unique at the time so we were
always looking for that little edge and we were able to find someone exploit
them and eventually you know through the chat rooms and other message boards of
the time had actually built up a little bit of a name for ourselves through what
we were posting both in terms of picks but more importantly educationally
online and so about a little ways through law school about six weeks into
law school in fact I decided this this is not for me I don't necessarily want
to work with and surround myself with lawyers for the rest of my life
I really have something good going in the stock market and people are coming
to me constantly not for my picks but more for you know
how to get started in that educational component
so that's when land and my brother and I got together and decided let's start
something where people can actually pay us to help them get started investing we
did that we we eventually turned that into I think it was the world's first
live-streaming you know content and educational channel for that was that
was going across the internet throughout the market day and you know people
subscribe to that and we built that into a nice little business that eventually
we sold and and that got us kind of kicked off on the entrepreneurial path
that's very very cool and so now your latest venture and and is like folios
your brother involved in that one - yeah we're partners on that as well this is
our third fin tech company together and yeah we're having a lot of fun with this
the the reason that we started LikeFolio kind of goes back to those roots
and its pivoted since then but back at the beginning the idea behind LikeFolio
and the name was really we wanted to help people create portfolios based on
the companies and products that they actually liked in real life and so we
use social media to figure out what they and their friends were talking about
online and actually created a portfolio based on those products called a like
folio the the idea was to get people interested in investing it didn't take
long though for us to realize that there was a lot of value in the data itself
and in figuring out what brands and products people were talking about we
were able to see some really interesting correlations between that data that we
saw in social media and upcoming future earnings reports and savings store sales
numbers yeah and I I saw you speak in the traders Expo in Las Vegas back in
November and it was a really fascinating presentation because for us a lot of
times we're looking for stocks that aren't strong up trends you're looking
for the purchase intent in strong up trends but the stocks might be getting
hit and might be you know falling off a lot of people's radar so that's what I
liked about it it's like okay this is another way to get some of those stocks
that might have fallen off my radar back on my
yeah a great example of that would be you know last summer the our great call
on Crocs the maker of the ugly shoes and what we start you know that stock had
fallen off everybody's radar it was down around fifteen or sixteen bucks and
really kind of dead money but what we saw was a massive uptick and a really
pretty fast and accelerating uptick in the number of people talking about
buying Crocs and liking Crocs shoes and the new models that they had and there
was some influencer action behind that I think Ariana Grande and Justin Bieber
were caught in public wearing Crocs and not necessarily paid to do so and that
just started this this trend and Crocs were on a comeback and we were able to
see that through the mining of social media data you know well before the
stock made the move from I think 16 to you know forty dollars yeah and and in
the end you know the large concept that we're all looking for here is you know
that supply and demand whether you see it in the stock market or in the
products that can eventually lead to those Rises and in stocks yeah that's it
I mean I think what everybody's looking for is an edge right we don't claim to
have the golden goose that produces profits every single time no one should
ever claim that you know but what we can provide and what we do you know work
really hard to discover are those small little edges that can add up to a
distinct advantage for the investor over the rest of the market and once you get
that you start exploiting it over and over and you know those those what were
small gains can start to turn pretty large absolutely so the markets continue
to remain in a strong uptrend and we're almost done with earnings season let's
take a quick break but when we return we'll go more into this and we'll talk
more about the social data and how it can help you with your investing stay
tuned I am here with Scott st. Clair Scott's
one of our senior product coaches at MarketSmith now Scott there are a ton
of publicly traded stocks just on the US I think it's over five thousand stocks
who has the time to go through all these stocks and find the very best one yeah
most people don't right so what you need is a tool like MarketSmith we have
decades of research and what makes a great winning stock so we've done all
the research for you so we're gonna try to highlight those specific stocks with
those great data points so if you're looking for that next great potential
big winner orange stock ideas button you just click on it and you've got some of
the main reports that we use including the growth 250 yeah and the grow 350 is
the first list that I go through on the weekends yeah it's the most popular one
but there are others there's the breaking out today stocks near a pivot
and then the blue dot list right which is very popular it's going to show you
the stocks with the best relative strength so we've done a lot of the work
for you what you have to do is review these lists you're going to come up with
some of the best ideas in that current market environment perfect MarkSmith
saves you time and makes investment research that much easier for more
information go to investors comm slash podcast 2020
and II Swan is our guest on investing with IBD sponsored by MarketSmith okay
Andy let's go over how we can use social data to help us with our stock analysis
and I think maybe the best way to start off is with how Tesla came on your radar
because that was a pretty cool story that I heard back in Vegas when you gave
your presentation yeah back in November I was a little
nervous to give that because Tesla was going through a little bit of a rough
patch it started to move higher at that point but you know was was widely hated
I want to just I think it's a great opportunity to make clear that what
we're doing it LikeFolio has nothing to do with tracking investor chatter about
the stock itself we're not concerned with that at all in fact a lot of times
we found that that can be a contrarian indicator and rather what we're doing is
focused on what consumers are saying about the brands and products that the
company makes and all of that information is you know it's publicly
available on Twitter we have a great feed directly from Twitter we're
partners of theirs and so this is you can kind of think of it as a real-time
consumer poll that runs 24/7 you know and is looking at the the opinions and
experiences of people that don't necessarily know that they're being
watched so you can trust the data a little bit and so with Tesla what we saw
was a really nice spike and very sustained in purchase intent mentions
and so that's what we call it when people are talking about actually making
a purchase of the product they're leasing a Tesla they're buying one
they've pre-ordered that sort of thing and so we saw a really nice sustained
acceleration and purchase intent mentions especially around the Tesla
Model 3 which was what Elon Musk had essentially bet the company on right and
we so at that point we're able to see that consumer demand for this product is
extremely high and is growing rapidly at almost a you know kind of an insane pace
what we don't know is whether or not Elon Musk and the company is going to be
able to deliver what their production issues might be their debt structure all
those types of things still have to come into play but
we could say with certainty on that stage was that consumer demand for Tesla
vehicles and especially the model three was through the roof and for me that's a
great starting point when you're looking at a company especially one with the
short interest that Tesla has yes exactly
and and as we know I mean probably tussles around 350 at that point when
you were talking about it and who could have imagined that it would have gone on
the amazing run that's gone but when you are heavily as shorted as Tesla was you
know that the shorts have to learn a lesson too about not fighting the trend
yeah I think you know it's it's kind of one of those you know perfect storms in
a lot of ways because you know you had a huge short interest on the stock that
had to come off at some point and it just seemed like with the data that we
had on on consumer demand for the products that at some point the dam was
likely to break to the upside now did I see it going to $900 no but but I did
but we did think that it had room to run in a very meaningful way over the course
of a you know two or three years it just happened to happen much faster than that
and a lot of that was due to the you know the demand that had to come into
the stock once it started moving higher and those shorts started having to cover
right and and and that's where that's that little bit of an edge that that you
give and you get a few of these edges that's that can make all the difference
in the world because you take that edge and then you apply it to your own stock
strategy and your own setups and when you know whatever stock is actually now
buyable for according your strategy now you can put that plant in a place so
that's what I like about it is that okay here's a little bit more insight that I
did not have before yeah I think that I think that's the whole key and that's
why you know most of our clients and most of our revenue you know ninety
percent plus comes from institutions and institutional investors who are looking
to put this into their formulas and into their processes and the biggest
component here that we can offer is that we can say
I don't know about the debt structure I don't know about their ability to
produce but what I do know is that the demand has never been higher and is
growing in an exponential pace and that a lot of times is enough because if you
remember back in the summer of 2019 and even into the fall when I was speaking
on that stage there was a lot of chatter online that maybe people weren't going
to buy these cars that they weren't popular enough that they were sitting on
you know in the parking lots of the production facilities going unsold and
it was you know kind of that ability to tap into social media data that it led
us to say that's absolutely not true we know that with a high degree of
certainty because the sample size is really nice and and the data was very
clear in terms of trend yeah and I definitely remember seeing pictures
going through Twitter all these parking lots and all these model threes and
saying see they're not selling any of them so this is a little bit more
objective way to look at the data and see what a buyers are actually doing now
one other thing that I noticed when I was looking at your site another trend
that's I've been doing pretty well and something that yeah you spoke about in
in November - is the the plant-based trend and and beyond meat was one of
those that did well but that that trend seems to be getting pretty strong and
and I guess I've been coming a little bit more aware of it too because I've
been trying it a lot more you know sticking to I'm trying to stay away from
the meat a little bit more but I think with the younger generation some like
that it's a lot more popular there and it just seems to be growing and your
data is picking that up yeah this that's one thing we do look at as well as not
just at the company and product level what we do look like these consumer
macro trends and what is what is really trending you know in terms of consumer
behavior shifts and you know switching to a plant-based diet or at least trying
to like you're talking about you know that I think the new term might be
flexitarian or something like that where you might have some meat here and there
but you're trying to avoid it and that is that is
trend that we saw you know really taking off it started you know near the end of
2018 beginning of 2019 it was a huge New Year's resolution at the beginning of
2019 we saw that sort of pop in terms of a trend and and that's the kind of thing
that you can just use to say all right I don't know what beyond me it should be
valued at you know thinking back in 2019 I don't know what beyond me it should be
valued at but I know that there are enormous cultural tailwinds behind this
company and sometimes that's all it takes in order for a company to ride
away for quite a while you know we saw we see that with the
streaming space and the cord-cutting space which I think you know we've got a
couple stocks in the next segment that we'll get into that are based on that
but that's the idea is can we figure out big cultural shifts and consumer
behavior and then tie that off into its impact on specific companies by looking
at how the brands and products are doing in the marketplace know that that's
perfect now one other thing that is very important is finding a strategy that
works for you that's most importantly aligned with your personality we talked
a little bit about that you've been doing this for a while and talk about
how you aligned your strategy with your own personality yeah I this is so
important and I think it's part of the part of the process of having a little
bit of real money on the line it's figuring out you know how your your
strategy might align with your personality because it's pretty easy to
go by the book until you know your own personality starts to get in the way and
I think for me it was quite a process right I had to go through a lot of
different ideas and systems and then finally I've I figured out that I like
to swing for the fences I like hire more risky plays I like to involve options in
doing so in order to kind of get the risk side of it pared down to some
reasonable level yeah but it but but essentially my personality is one that
it's I think I'm right I feel like if I don't get the maximum gain out of being
right I can handle losses really easily it's not
problem for me they roll right off of me and so what has to happen is that I have
to maximize the return when I do when my edge does pay off and so that's just a
personality thing that's the way that I look at it and so I'm able to create a
strategy that says I'm going to use options I'm gonna use them really smart
I'm gonna take as many swings as I can with a high amount of leverage and
understand that forty forty-five percent of the time I'm going to be wrong and
lose but on that fifty fifty five percent sixty percent that I'm right I
really want to make a considerable amount more now other people like to win
eighty percent of the time and there's you know there's ways to do that and a
lot of people get very disturbed when they start to lose a little bit of money
and so you just have to understand that about yourself it takes a little time
but I encourage people to try to figure out a way to balance that risk versus
reward but more importantly that percentage of losers because I think the
main key for a lot of people is they can't some people can't handle hardly
any losers at all it just really bothers them and so when you're when you're in
that situation you have to start thinking about putting a bunch of stocks
together in a bunch of positions together at once and and thinking more
long-term but you know for me it was a process I think it's gonna be a process
for a lot of people but I do think it's extremely important because there's no
such thing as a good strategy if you don't stick to it and your personality
eventually will win out ya know that that's a great great advice there yeah
you always have to make sure that that risk reward ratio is there right and
yeah and you also said it another thing I mean you've been doing this for a long
time too it's funny it losses don't bother me at all now
I've just taken so many of them right that it's a gig it's just part of the
game right it's like yeah it's a numbers game in the end and then how you how big
the reward you want to get you know you're figuring that out too yeah I mean
what what bothers me it still does bother me when I have you know something
going that looks like I hit it out of the park and then it
versus and you know like too quickly to even capture my profits I thought it was
gonna run like that still makes me mad yes you know it's still I still don't
like that but the idea that I'm down some money doesn't bother me
you know I do I do zoom out and look at the longer-term and think about how my
winning positions are paying off or could multiply and so I think that's it
I think that's for a lot of people finding that match between strategy and
personality it takes a little time it takes some experimentation and then
definitely I think takes a little bit of real money on the line in order to
figure it out absolutely so purchase intent with social media can
give you a nice edge on your stock analysis and also identify some of those
stocks that may have fallen off your radar and then also remember know
yourself and that way you can find a strategy that works best for you coming
up next we will discuss a number ideas that are worth looking into
we'll be back I'm here with Scott st. Clair and Scott is one of the senior
product coaches at MarketSmith now Scott we bumped in doing this for a long
time and we know that investment research takes a lot of time there are
so many factors that you want to look into to try to figure out whether this
is a stock to buy or not quarterly earnings huge sales growth hey our
institutions buying it the list goes on and on yeah it's a common question I
hear it all the time I don't have time to do this work
so you don't have to spend that much time if you have a tool like Market
Smith we do a lot of that work for you right there on the chart earning sales
group strength institutional sponsorship like you just mentioned it's all there
in the chart so it allows you to make a decision much easier yeah and the beauty
is that we have in Al's analysts that go through the SEC filings they pull out
those numbers and they put it right on the markets mic chart and all you have
to do is analyze them yeah I couldn't imagine having to go to the SEC website
and look at the income statement etc that sounds like a lot of work yeah and
and that would take hours and hours and in that time you can go through hundreds
of stocks and find the best ones so don't miss out on a big winner because
you don't have enough to research it for more information go
to investors comm slash podcast 2020 we are back with Andy Swan on investing
with IBD sponsored by MarketSmith okay Andy let's talk about a few current
stocks and the first one is Roku and obviously Roku is in the middle of this
huge cord-cutting trend that you guys are also seeing unlike folio yeah that's
what initially got us into Roku and interested in looking at it was that
consumer macro trend of cord-cutting of moving away from cable or traditional
TV and streaming programs through devices and kept popping up Roku did as
a product that consumers actually really liked and that bridged the gap between I
know I want to get rid of cable I know I don't want to be paying all this stuff
for content I don't use I know there's better stuff on my laptop but really I
don't understand how to get that onto my TV and Roku was the one to step in and
do that and so I think it was about a year ago the stock was at 40 bucks we
loved Roku purchasing - it had pulled back I think you know by 50 percent or
something right the purchase intent mentions unlike folia we're just
absolutely going through the roof and to top it off consumer happiness levels
which we also also measure that kind of sentiment of the consumer was also very
high which is honestly pretty rare normally when companies see a large
purchase intent move to the upside it means that you know there's a lot of
demand coming in to the products and a lot of times that gets strained and the
consumer experience starts to dwindle okay with Roku that didn't happen so we
knew that they had a very high quality product and so it's nice to get into a
stock when it has those macro tailwinds of consumer behavior plus it's a Best of
Breed product that holds up well under growth conditions yeah and and when you
guys were seeing that and really what your seniors I am ager divergent between
the purchase and ton and and they did not being displayed in the stock price
it was around 40 at that point and it only went up to 170 or so it's pulled
back now it's 125 but the thing about it is this this cord cutting movement is
only gaining steam and I think a lot of times we get caught up in valuations and
you know companies what I found you know through a 22-year career is the best of
breed companies that have consumer tailwind at their back like the Amazon's
of the world like the Google's the Facebook's they're expensive for a
reason and they tend to get more expensive over time and that can last
for a really long period of time and so when I look at Roku I mean one of the
most amazing stats on Roku to me is that currently 30% of all TV viewing time is
done via streaming but only 3% of advertising dollars are going to
streaming right so that that gap has to close and there's a 10x gap in there and
when your best to breed like Roku that's a lot of revenue potentially capturing
so I don't know is it worth 125 is it worth 60 or could it or could you just
say this could be worth 500 or a thousand dollars five years from now and
it doesn't really matter what it's at today right and yeah the nice thing
about Roku it's kind of the neutral player - it's gonna you know it can have
Apple on it Amazon Disney Plus everyone and they're also integrated in a lot of
TVs - TCL TVs maybe some of the Samsung TVs I think are integrating it now - and
of course that customer experience would just learn leading to the happiness
mentions on your site yeah I think it's another crazy said I I think a majority
of televisions sold in the United States have a Roku built into them that's great
at this point like it's it it's insane they're they're the perfect neutral
player they're like you know the the perfect neutral player for this and I
just think you know with the consumer tail wind at their back I just like it I
think it's something to have in it's an expensive stock so you got to be ready
for some serious volatility but the upside could be considerable right and
and I think the biggest part of that story is only 3% of the advertising
revenue it's kinda streaming which that that's
gonna obviously close now Roku on the marksman charts it's it's building a big
a couple of handle here it's finding support around the 200-day and and so it
is taking some time off after that monster monster run that it had in 2019
okay let's go to the second stock and this is Canada goose ticker symbol GOOS
and what is what are you guys seeing on this with the purchase intent yeah so
what's cool about this company this company is you know very easy one for us
to track because they essentially have one product it goes by a single brand
that is very popular that people tend to talk about when they do buy the product
it's expensive it's a one-time purchase it kind of has
all of those elements that makes a company really nice for like photo and
to top it off it's extraordinarily seasonal because they sell very
expensive cold weather friendly jackets and coats yeah and so every year around
January around the end of December we're able to look into like folio purchase
intent mentions and just see alright how much are people talking about Canada
Goose jackets and from 2015 and 2018 every year that spiked in the winter was
bigger and bigger and bigger Wow and then this past you know six
months or so actually three months we've seen that this year's peak although
still you know much larger than what you see in the fall or spring and of course
summer is considerably lower than in prior years and so you know we put out a
bearish signal on this I think that the stock was something like 36 or 37 bucks
and you know what we saw in the last earnings report was very much in line
with what we expected to see from the like fuller data and that was a
softening of sales but what's interesting about it to us at least
going forward it's been a nice play I think it's a 20 percent gainer from a
bearish position right now but I still think they're significantly more to this
because the way the company explained their soft sales was
aiming it on the coronavirus in China oh wow and to me that to me that just
doesn't ring true yeah I think an easy scapegoat but we were seeing a softness
in consumer demand for Canada goose coat coats as early as Black Friday and all
the way through and and none of this coronavirus stuff had even hit the radar
at that point so I don't think you know I don't think Canada goose is telling
the full story I do think that there is a softening of consumer demand and
they've got a lot to try to overcome over the next year and so from a
long-term perspective I think you know I think the stock somewhere right around
30 right now I could easily see this in the upper teens if we talk again next
year at this time yeah and so there's a softening in the consumer demand and
there's also a softening and demand in the for the stock this is and a very
consistent downtrend for quite a while right now it almost
seems like it's been about maybe below the 200-day moving average for a year
yeah it's so it's like so any way you look at it this has been a you don't
want to be owning this stock at all and if you want to bet against it now that
that's a different story but the trend is clearly down here and it's being
backed up by the purchase intent that that you guys are seeing yeah it's just
you know it's just a it's a it's a one trick pony type of company yeah where
that one-trick pony is not performing so well anymore
yeah you know and and there are plenty of stocks like this that there are more
kind of the faddish kind of that they have there runs for a year plus and then
after that they're done you know I mean gold immediately comes to mind on that
when all the competitors come out in Crocs you know like I talked about Crocs
last year last summer we got the great run we got it all the way through the
fall the stock is doubled and then some and now what we wait for on Crocs is
another seasonal development just like on Canada goose there's no that we have
no edge right now on Crocs there's nothing going on but once we start into
the warm winter months and we start picking up whether or not you know if
the teenagers continue to go back out or you know you know the
the KFC crocs that just came out like those are gonna be ahead like they have
some weird stuff that they do but they bring attention to themselves so what
I'm what I'm getting at is Crocs is also seasonal and so we have to wait for a
rat somewhere around the spring to start to see if what we saw last summer can
continue into 2020 or if like Canada goose it's a fad whose time has come and
gone so we just have to wait on that one but historically our date has been very
good on it so I'm excited about seeing what the data show yeah exactly
let's go to the third stock and this is Adobe and and so what are you guys
seeing on this yeah Adobe I like it's something bullish we put out I think of
somewhere around 300 it's climbed with the market really nicely I think that
Adobe's it kind of reminds me of Microsoft a bunch of years ago because
you know Mike what Adobe's done is they've transitioned into this
subscription business model they have a Best of Breed product line up in all of
their you know Photoshop and all of their video editing software things like
that they have a subscription model that gives them very comfortably recurring
revenue and so what that does is it allows them to kind of take some bets
that are moonshots and one of those bets that we're seeing that I don't think the
markets really picked up on I'm not sure yet if it's going to be a success is
their bet on again the streaming ad technology and so Adobe has built out a
really unique personalized you know down to the individual but still you know
still anonymous advertising technology that works on roku that they can that
they can provide to all of their fortune 500 brand customers and so I think that
kind of like Microsoft where they built that subscription revenue base for their
core products and then took this moonshot bet on cloud computing yeah I
see the same type of thing happening with Adobe right now and it's pretty
exciting in that they have a great subscription business
daka's and the company's fine just based on their product their core products
alone but the moonshot that they're taking on streaming ad technology I
think is one to pay attention to and that could pay off big for the company
yeah I mean that that's very interesting because they're there there's gonna be a
big fight for all those advertising dollars on the streaming devices like a
rope yeah and you know that brings up to mine because another one that I'm I keep
an eye on I do have shares of his trade desk trade desk is almost that kind of
the neutral player versus you don't want to go for Google or Facebook you want to
advertise and trade that's where the rest of the Internet as they say and
they're also poised to do well as more streaming dollars ad dollars go and so
that that's kinda know about Adobe that they could become a pretty big
competitor to trade desk I think there's complementary services
for each because a lot of its the the automated mechanical buying of these ads
yeah it's very reminiscent of what happened with how Google came on to the
scene and kind of disrupted the the advertising space online and took
everybody from banner ads to you know search based and and individual based
ads I think the same things happening and streaming and it's probably too
early to call the winners but the ones that are showing progress right now and
they're showing real promise are those Roku's trade discs and now kind of Adobe
with this moonshot play which I like if you don't want a pure play if you want
to have something with a little bit more of a diversified revenue stream
Adobe's definitely in the mix yeah and Dobby broke out of a couple of handle
back-end late this up and it back in mid-december after their poor their
their earnings they're up twenty percent from that and you know that's nice about
having a diversified mix of revenue streams this has just been kind of a
nice smooth ride off not a lot of volatility
yeah and they and they have you know when we look at consumer happiness
around Adobe's products it's off the charts high so that tells us when you
have that combined with a subscription revenue service that means you have
pricing power yep and so anytime Adobe wants to drop a little more money to the
bottom line they have the opportunity to do that so
that's that's a nice safety valve for the company going forward for sure
that's awesome so there are a few ideas that are worth looking into and
considering adding to your watchlist thank you Andy for joining us today well
thanks for having me I appreciate it love the podcast that's it for this week
on Investing with IBD sponsored by MarketSmith next week we will have
Besime Nawaz on he is also known as Trader Stewie on Twitter so that's it
I'm Irusha Peiris and thanks for listening