Charter Communications is taking a stand against Disney, impacting ESPN viewing. DoorDash battles restaurants over pricing. Canadian banks may be an attractive investment. The bond market and how investors can benefit from higher rates. Companies discussed: CHRT, DIS, DASH
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Quick takeaways
The dispute between Charter Communications and Disney showcases the challenges faced by cable companies and content creators in the changing landscape of the entertainment industry.
DoorDash's initiative to cap delivery prices highlights the tension between maximizing profits and maintaining affordability in the food delivery industry.
Deep dives
The battle between charter communications and Disney over carriage rights
Charter communications and Disney are locked in a battle over carriage rights, with charter wanting to pay less for Disney networks such as ESPN. This dispute is unique as it goes beyond traditional negotiations over fees. The traditional cable model is in decline, and consumers are increasingly turning to streaming services for their entertainment needs. The rise of streaming services has led to an arms race among companies, resulting in an abundance of quality content but also financial challenges for the content providers. The dispute between charter and Disney highlights the changing landscape of the entertainment industry and the challenges faced by both cable companies and content creators.
DoorDash's attempt to bring delivery menu prices in line with restaurant prices
DoorDash, a food delivery giant, is trying to address the issue of inflated menu prices on delivery apps. Restaurants often raise prices on these platforms to compensate for the high commissions charged by delivery services. DoorDash has sent emails to certain restaurant chains, stating that if they cap delivery prices at a 20% markup, their visibility on the app will be maintained. This move highlights DoorDash's desire to maximize its profits while ensuring a positive user experience. However, many customers are already paying significantly more for food delivery compared to dining in a restaurant. This raises questions about the value and affordability of food delivery services.
Understanding the impact of higher interest rates on savings and bonds
Higher interest rates bring both opportunities and challenges to investors. On the positive side, it allows individuals to earn better returns on their cash savings, especially if they explore higher-yielding options online or through money market funds. When it comes to bonds, the inverted yield curve, where short-term bonds outperform longer-term ones, presents a unique situation. Investors may consider favoring short-term and intermediate-term bonds, but not completely abandoning longer-term bonds due to potential yield fluctuations. The type of bonds chosen, such as treasuries, corporate bonds, or municipal bonds, can also impact the risk-reward tradeoff. Understanding the nuances of different bond types and considering individual bonds or bond funds can help navigate the complexity of the bond market. Additionally, investing in TIPS (Treasury Inflation-Protected Securities) can offer a hedge against inflation, although tax implications and individual circumstances should be considered.
The impact of interest rates on the stock market
Interest rates play a significant role in the performance of the stock market. As Warren Buffett famously said, rates are like gravity to asset prices. When rates rise, it generally has a negative impact on stocks. In recent years, higher rates have led to declines in stock markets, particularly hitting growth stocks hard. Conversely, a rising rate environment tends to favor value stocks. However, it is crucial to understand that these trends are not absolute, and the individual holdings within a portfolio should be carefully examined to assess their sensitivity to interest rate changes. Despite short-term market fluctuations, long-term investors should focus on their investment goals and the fundamental strength of their holdings.
If you can’t watch ESPN right now, it’s because one cable company is taking a stand against Disney.
(00:21) Ricky Mulvey and Jim Gillies discuss: - Charter Communications’ problem with the streaming economy. - DoorDash’s battle with restaurants over pricing. - Why investors may want to look at Canadian banks.
Plus, (17:52) Deidre Woollard and Robert Brokamp check in on the bond market, and how investors can benefit from higher rates.
Companies discussed: CHRT, DIS, DASH
Host: Ricky Mulvey Guests: Jim Gillies, Deidre Woollard, Robert Brokamp Engineers: Dan Boyd, Rick Engdahl