FAANG Earnings Week Woes

We are halfway through FAANG financial earnings week! There has been an audible sigh felt around the bay area each afternoon as numbers were released.

Meta

Meta was down nearly 20% after hours Wednesday on top of an already rough week following SNAP’s earnings last week bringing the year over year drop to a painful 68%. This brings Meta back to 2016 price levels ahead of the last vesting period of 2022. Now everyone gets to play the game of wanting the stock to recover… but secretly hoping that it waits until 2023 refreshers get priced in February.

Not commenting on any specific financials but was interesting to hear headcount guidance from the CFO “as we curtail non-headcount related expense growth and keep 2023 headcount roughly at with current levels (Headcount was 87,314 as of September 30, 2022, an increase of 28% year-over-year)”. Which points to balancing out any attrition with some amount of overall hiring.

Apple

Earnings come out Thursday afternoon. They are currently flat year over year (must be nice).

Amazon

Earnings come out Thursday afternoon. They are currently down 31% year over year.

Netflix

The only FAANG to have earnings last week. Mostly positive news with 2.4MM subscriber growth after their first down quarter. They are up 22% since releasing while still down 50% year over year.

Google

Alphabet released earnings on Tuesday sending the stock down 8% and down 31% in the past year. Via nytimes “Alphabet executives said on a call with analysts that they had seen less ad spending for insurance, loans, mortgages and crypto, as well as fewer gaming ads.” Meta CFO could have cut and paste the majority of Alphabet’s guidance with this part sounding particularly familiar; Ms. Porat said Alphabet would “realign resources to fuel our highest growth priorities.”

Microsoft (Honorary FAANG)

Not wanting to buck the trend, our honorary FAANG member was also down 8% after releasing earnings on Tuesday pointing towards economic slow downs and a strong USD. They are down only 25% over the past year.

With earnings also comes open trading windows and new stock vests. As usual I plan on selling my META shares and diversifying as soon as I am able to. I am sticking to this plan even though the amounts are now 56% lower than they were back in February when I received my last refresher.

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Open Enrollment

The decisions you make this month can lock you in for all of 2023! PPO, EPO, HSA, HDHP, and the rest of the acronym soup of details and mailers are hitting your mailbox soon.

I have my Meta details (slightly more $$ across the board) but am waiting on my partners Uber ones. Last year we saved over $1,000 by consolidating both our insurance plans under Meta's due to some changes in drug coverage. The frustrating thing is the math changes every year so it is worth re-running the numbers each time.

For the young and healthy the HDHP with HSA can be a magic combination. The HSA can double as a super Roth where you enjoy a "triple tax advantage" of tax-free contributions, tax-free growth, and tax-free withdrawals for qualified expenses (just save those receipts). Even better if your company is like Meta and contributes to your HSA on your behalf.

iBonds

You have probably been bombarded by iBond posts this past month. This week is the final week to lock in 9.62% over the next 6 months (rates change next week and are expected to come in around 6%). There is a $10k limit per tax id. I already purchased earlier in the year but think they make a great addition to someone's bond portfolio or even an emergency fund if you have other reserves given the 1 year minimum hold period. The main gotcha is needing to deal with Treasury Direct’s terrible website.

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Thanks for making it to the end—I try and save some personal ramblings for this space.

I spent 3 nights last week on a boat off the coast of Santa Barbara with 20 strangers. We were all brought together through one shared commonality, we follow the same chef turned fishing youtuber.

I have never struggled with quantifying the value of saving money or investing. I understand the value of saving early and often. For most of my working career I approached life with a scarcity mindset. Viewing delayed gratification as a key tenant of FIRE.

What I struggled with was spending money. I couldn’t break free of that scarcity mindset that forged my early FIRE perspective. I think that mindset helped me establish a strong financial base much earlier than most people. But it was holding me back and preventing me from living my life. 

I have started making a conscious effort to spend a few % more per year. When I calculated to impact on my FIRE date it ultimately ended up only extending things by a few months, if that.

-André