Tuesday, 24 April 2012

Flicking European governments and businesses in decline . . . Lets go skiing . . .

I missed the collapse of the centre right coalition in the Netherlands over the weekend that led to the Dutch CDS widening over the last two days. It's fast becoming obvious that Europe is losing the will and ability to hold fast to the German line of austerity at all costs. The French have no stomach for it and Sarkozy's likely defeat in my mind will be the nail in the Euro's fiscal coffin. The QE bulls will say this will trigger a new round of money printing, but I can see a time when the Germans will veto this, even though they have been a huge beneficiary of the slackness over the last two years.

Netflix doesn't mean much to me as a company because they really didn't get much of a business going outside the US. Their original business filled a gap in the market when digital downloading was in its infancy. Mailing DVDs directly to people too lazy to get off their butts and go a store was good . . . after all it was a simple logistics business that benefited from the increased competition of the various delivery companies and their increasing sophistication in respect of their computer tracking and management systems. The problem for them is that they failed to erect and barriers to entry for their potential competitors . . . I mean competing with Apple's closed end system was always going to be a suicide mission without some kind of monopoly agreement with various studios. So slowing streaming subscriber growth is and DVD renters are in terminal decline. Avoid?

So more rain here and a fierce wind. My support crew chief didn't really like her daily walk through the park and up into the old town.

"I'm over this weather - pack up the car and the bike and lets go to Italy."

I did an hour in the gym and now have the pleasure of dusting off the ski gear and loading the car for tomorrow. I'm not sure what to expect, but it could be worse ... I could be an analyst with a buy recommendation on Netflix.

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