Bear! Message Board - Msg: 34653822

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Strategies & Market Trends : Bear!

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To: Harshu Vyas who wrote (246)	5/1/2024 10:57:49 AM
From: Sean Collett	Read Replies (2) of 265

IMO debt isn't so much a concern if there is enough cash to satisfy the interest payments and if it's fixed rate & termed out. It's not ideal by any means but it's not the end of those companies. Either way we must remember what Graham once wrote in that in any sell-off that value will be punished just as much as any other stock so debt or no debt there could be trouble. As for WBD it is likely a mix of a many things. Streaming is proving to NOT be the killer many thought it was and is quickly turning into cable 2.0. Like I wrote on the value thread months ago they're now stuck between being content creators and content distributors which means they're always going to be big spenders to keep up. Throw in challenges like FUBO dropping WBD due to license pricing and that shows it's a tough market to compete in. And for termed out debt, WBD has $13.6B due in the next five years which does make their debt a concern given they will also need to keep spending to stay competitive. What happens if consumers finally do start to cut back? Some of these streamers with stagnant content will get cut and with WBD licensing content already to platforms like Netflix it doesn't look too good here. I did buy some calls on TLT to dip my toes into bonds as I think there may be some rush back into "safety". Risk here is inflation but I am more banking on the "old" mindset rushing in and TLT benefiting in the interim. $100 calls are dirt cheap so risk/reward is there and I keep tight stops. This is a short term game for me here. Chicago PMI below 40 which raises some problems and is setting up a real stagflation situation. I personally don't expect another hike (too much political pressure) and more so if the fed starts to follow through with slowing QT which is in effect a rate cut. Will be critical to see what their messaging is here though. Cash is safer though like I said and not losing money is the goal. -Sean

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