added to broadcast As for NFLX, today it is up over 6% and trading at 83x trailing earnings. Someone on Bloomberg TV just jubilantly proclaimed that Wall Street's new price target for NFLX is $316. Now, without examining NFLX's earnings, let me just state that the quality of NFLX's earnings is likely very questionable. GAAP requirements for accounting for fulfillment costs, thanks to Jeff Bezos and Amazon.com, are very "loose." In brief, the cost-accounting for fulfillment costs are similar to that of a ponzi scheme, and as long as revenues keep growing, a company with heavy fulfillment expenses, like NFLX, can hide the cash flow and earnings from what in effect are hidden cash expenses that don't run through the income statement. Just ask Bezos why he's on a program to unload stock every month if he really thinks AMZN stock is cheap. Same deal in terms of the accounting with NFLX.
But the big question for me is how come Wall Street's anti-christ, gold, is continually labelled a bubble and ponzi stocks like NFLX get more adoration and cult status the more overvalued they become? Yes, this question is strictly rhetorical in nature. But here is a daily price performance chart of NFLX vs. GLD. You tell me which one is in an investment mania/bubble: http://truthingold.blogspot.com/