💋 Dating Stocks: Swipe Left or Right?

Join us this Thursday for a LIVE masterclass where you’ll learn our best strategies to build wealth in 2024!

You’ll learn:

  • Proven growth hacks tailored for small, medium, and BIG accounts

  • The absolute BEST (and worst) accounts to park your money

  • How to pick the perfect mix of assets tailored to your account size

  • Uncover hidden gems for 10x gains—our step-by-step approach revealed

  • The no-nonsense guide to proper position sizing

What’s on the Menu 🍴

This week is HOT!

From record-breaking AI news to dating apps, we’ve got you covered.

Let’s jump into the latest and greatest investing themes and trends!

Here’s what’s on your plate:

  • Create Your Own ChatGPT Now 🤖

  • Dating Stocks: Swipe Left or Right? 💋

  • 3 Reasons NOT To Invest In Dividend Stocks 🚫

Today’s newsletter is a 5 minute read.

Create Your Own ChatGPT Now 🤖

Every now and then, something happens that changes everything.

We think one of those events just happened.

OpenAI are the creators of artificial intelligence tools like ChatGPT and Dall-E.

And this week they announced some MASSIVE upgrades to their products—along with the ability to create your own chat bot.

Why it matters: “GPTs” allows users to tailor ChatGPT for individual or business-specific tasks. You’ll even be able to make money if you create a chat bot that becomes popular!

What you need to know:

  • User-Friendly: Building a GPT requires no coding, widening accessibility for non-technical users.

  • For Early Adopters: ChatGPT Plus and Enterprise users currently have access to example GPTs.

  • Community Creation: OpenAI anticipates the best GPTs will originate from community members’ contributions.

  • Monetization: A GPT Store will soon launch, allowing creators to potentially earn from their GPTs.

  • Next-Level Help: GPTs act as ‘agents’, aiming to perform real-world tasks with increasing complexity and usefulness over time.

  • Enterprise Solutions: Companies can create internal GPTs for specific business functions, already adopted by early customers like Amgen and Square.

More Meat & Potatoes

In addition to custom chat bots, here are a few upgrades to OpenAI’s products:

  • Upgrade to GPT-4 API: Includes improvements even for non-coders, to be used in ChatGPT web interface.

  • Assistance Feature: Users can ask the computer to perform tasks, indicating a move towards AI native agents.

  • Up-to-Date Knowledge: As of the announcement, it contains knowledge up to April 2023 and will continue to be updated.

  • Developer Improvements: There’s a massive context window increase to 128k tokens, allowing for more extensive conversations and data processing.

  • Protection for Users: OpenAI will defend customers against legal claims of copyright infringement involving GPT-4 API and ChatGPT Enterprise.

  • Reduced Costs: GPT-4 Turbo is 2-3 times cheaper to use than its predecessor.

  • Auto GPTs (Assistant API): Allows creation of autonomous agents (not officially named as such yet).

  • Functionalities: Includes code interpretation for executing Python code, data analysis, and file processing capabilities.

Don’t sleep on this - We think this next evolution in chat bots is going to disrupt companies at light speed!

Dating Stocks: Swipe Left or Right? 💋

If you grew up playing the board game Monopoly, you’ve felt the satisfaction that comes from taking over all the properties on the board and getting rich off everyone else.

The game is a direct analogy for what happens when a company takes over its industry and eliminates most of its competitors.

It’s why regulators try to stop monopolies from developing, and why investors seek out these tremendously profitable & defensive businesses.

There aren’t many publicly traded monopolies, but the online dating app company Match Group is pretty close. It operates mostly in a duopoly alongside Bumble.

Match Group owns most of the top dating apps including:

According to a Stanford study published in 2019, dating apps have quickly become the most common way that couples meet (and more recent data seems to confirm):

So it’s no surprise that Match Group and Bumble have grown revenues and profits tremendously in recent years:

Yet, surprisingly, the stocks are hitting fresh lows and are both down nearly 80% in the past three years!

So what gives?

The issues are several:

  • Valuations got too frothy in 2021

  • User growth has slowed

  • Growth in the top apps is being offset by declines in others

  • Profit margins are still below investor expectations

  • MTCH has significant debt on the balance sheet

Despite these issues however, the stocks have been beaten down to seemingly cheap levels: today MTCH trades for roughly 10.5X free cash flow and BMBL for under 20X FCF.

The biggest worry for MTCH seems to be flat to declining user growth. Yet, much of that is self inflicted as the company has raised premium pricing significantly this year.

Thankfully for MTCH, it has a fast growing app with Hinge, which is also currently under-monetized. This could be a key driver of growth & profitability in the future.

Stepping back and looking at the bigger picture: the network effects of the two largest players render this an oligopoly industry for the foreseeable future.

That should ensure pricing power and stable growing margins to go along with it in the years ahead.

The companies themselves think further growth can come from new feature development, different pricing tiers, and global economic recovery at some point.

If one can stomach some shorter term issues & price volatility, this looks like it could be an opportune moment to start accumulating one or both dating company stocks.

In other words, we’re swiping right!

3 Reasons NOT To Invest In Dividend Stocks 🚫

Dividends have been put on a pedestal in the investing world...

In today’s video, Nikki outlines 3 reasons why you may not want to invest so heavily in dividend stocks.

Delicious Bites 😋

Food For Thought 🧠

"Business opportunities are like buses,
there's always another one coming.”
- Richard Branson

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DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.