Fact:  I bought 50 shares of Netflix at 69.47 on 11/23/2011.

Fact:  I sold 50 shares of Netflix at 102.47 on 4/23/2012.

Fact: This is 47% gain in a 5 month period.

Fact:  I’m an idiot.

This is the current price of Netflix

Netflix Graph 1/23/2014

Netflix Graph 1/23/2014

If I had never sold my shares, my initial $3,500 dollar investment would have been worth 20k. Normally I wouldn’t be too hard on myself because this happens all the time to people everywhere, every day. I could name a dozen stocks that I’ve owned at one point that would have provided these returns. I could also probably name more than a dozen losers as well. However, I have a special place in my heart for Netflix because I did a college project on it my senior year.

My senior year of college there was a huge project that encompassed 75% of your grade for the class Strategic Mgmt.  The project was to take 3 companies and dissect them and provide an analysis for the future.  Mind you this was back in 05′ when Netflix wasn’t even streaming yet and still delivering their DVD’s by mail.  The 3 companies we picked were Netflix, Blockbuster, and Movie Gallery.  The conclusion of our report was that Netflix was going to triumph and the other two were going to go out of business.  Guess what?  It was pretty spot on.  We ended up getting an A on the project and this should have been a little clue to the beginning of my investing career.

Netflix is now profitable

Netflix is now profitable

I didn’t exactly follow the path of Netflix throughout its life but as you can see, I still have some bitterness left in my brain.  In 2014, I understand why Netflix is making so much money.  Besides the outrage they took for trying to combine streaming and mail delivery packages (which was a smart move it just didn’t jive with the idiots of the world who still get DVD’s delivered), they have done a wonderful job as a low priced alternative to cable.  Why would you pay $150 dollars a month for cable and internet when you can pay $50 dollars a month for internet and Netflix?    I have some thoughts.

I like cable over Netflix.  I like live sports, the movie channels and their series, and selection in general.  Netflix for me doesn’t replace cable.  I find that aside from a few series, I don’t enjoy the content on Netflix.  The movie selection is horrible.  On numerous occasions I’d read about a movie from a while ago and search for it on Netflix and the search would bring up nothing.  I’m a weird person because I either want something new or really old.  I’m always looking for quality and I either want to be on top of the latest trend or brought up to date on what is considered great of the past.  Netflix misses this market segment.  I’m not into watching the 5th season of Family Guy that I watched 6 years ago.  For 15 dollars a month, split between 3 people I’m not complaining about value, I just don’t use it much.

With all that being said, Netflix added 2.3 million US customer and 1.4 million foreign customers in the 4th quarter to bring it’s total to 44.4 million global subscribers.  With 7 billion people in the world, obviously not all potential customers, it’s easy to see that there is still plenty of room for growth.  With streaming being a profitable business and how they have started making money, this company has itself in strong position moving forward.  Are you still purchasing shares at 388?