Bot hates me so here is a link
In the late 90's we had a similar Tech/Digital stock rally (this is not nearly as bad though, so chill, companies are actually destroying the estimates and profits are strong).
Back then it was web page development and internet providers, now it's mainly electric vehicles and some parts of tech.
“St0nks” were only going up, up and up. You heard things like - Dude, its a new economy, this is the new normal. This is the future, you can't use old models to define value. Die all boomers and burn traditional stocks (ok I might be exaggerating on this one).
Anyway, I was a finance major at a prominent university in London, UK. I was destined for greatness and a trainee spot at Deutsche Bank's analyst desk. My friend - let's call him Eli, because his name was actually Eli - was a stock genius.
Everybody is a genious in a bull market, you put some money in to a company in IT and BAM, the new Buffett (or Cathie).
Eli was good for about 350kUSD at one point, not bad for a student. Or I should say, 350kUSD nominal value in stocks. Because, its not money until you sell. Eli learned the hard way.
The "dip" came. Eli figured "st0nks only go up" - I'm gonna "buy the dip". The dip became a slide, then a vortex and finally evolving in to a capital sucking black hole (not an anus ok).
Eli bought and bought, he also had a debt position of about 25% of his portfolio. This increased to 50%. The bank called, Hey Eli - that collateral isn't so hot anymore, pay up dude. Eli paid up. One year later he had -13kUSD on his account for accrued interest rates and trading fees.
So what's there to learn. Well, depends on how risk averse you are, but I see a lot of new investors that ask about when and how to take home profits. There is no rule or best practice, but here's at least an strategy that I'm using myself.

1. I don't let a stock grow beyond 20% of my portolio, if it does I automatically start scaling back profits and weight to other, new opportunities.

Compound that interest, bitch.

1. I always keep a 10-15% cash position so I can take advantage on dips or other opportunities. This capital has had a ridiculous payback over the years. This is not money, this is capital. I have a savings account with 3 months salary. That’s money.
   
2. For every 20% growth I take home for example 20% of the profit. So in G-ME for example I started buying early and by $90 I only had profits invested. By 300 I had sold about 2/3 and on the way down I dropped the last stocks at 115.
   

So let’s say a stock grows from 100 to 120. I take back 4. Then it goes to 140, I take back another 8 so now I have taken 12 total.
Obviously there is some flexibility here, but use it for inspiration. For more secure stocks you may wanna hold on more and longer, but for me it’s a lot about maintaining that cash position.
So what do I do with my profits? Well, I do a few things.

1. I reinvest them in to other stocks, so I make sure I have a short list of alternatives at all times. For example, my G-ME winnings (yes it was a casino) paid for 300 PayPal stocks at $231. They’re now up 15%.

Compound that interest, bitch.

1. I put them in the cash position so I can be opportunistic (but still max 15%). Life saver in March, pure rocket fuel baby.
   
2. I buy my wife or kids presents, I get a nice Rolex or refurbish the house. I turn it in to money. I have money so I can spend it, use it.
   

Moral of the story or TLDR;
Make money, you probably won't see another opportunity like the one of the past 6-10 months. Its not coming back for a while.
Don't step out of the market, pick your stocks wisely, keep some cash to pounce on some disappointing earning calls or dips and remember: IT IS NOT MONEY UNTIL YOU SELL.
Disclaimer 2: I was a licensed financial advisor as in a securities analyst, but do your own research. This is not advice, it’s inspiration.
PS Eli went on to be a very successful entrepreneur and has started a few companies. I believe one of them is going to IPO soon DS
Edit: clarified advisor part
Edit 2: this completely blew up, thanks for all the awards and upvotes but spend the money on stocks instead!

WA Government - Lockdown Information
WA Government Infographic - Summary
WA Health - Locations visited by confirmed cases
HealthyWA - COVID Clinic Locations / Operating Hours
Lockdown Rules Summary (ABC News)
ABC COVID Live Blog - Sunday 31/01
Premier's Annoucement:
--- IMPORTANT UPDATE REGARDING COMMUNITY CASE OF COVID-19 IN WESTERN AUSTRALIA, AND PERTH, PEEL AND SOUTH-WEST FIVE-DAY LOCKDOWN ---
This morning, I convened an urgent meeting of the Emergency Management Team.
We have a serious update to provide the WA community.
This morning we received news of a positive COVID-19 test result.
That positive result has come from a male hotel quarantine security guard, in his 20s.
The information we have is fast-evolving. As you can understand, immediately our teams moved into place to begin contact tracing and put in place emergency response systems.
This is all underway, and I ask everyone to be cooperative and understanding of what is going to take place.
Here is what we know about the male who tested positive:
He was working at one of the State’s hotel quarantine facilities – the Sheraton Four Points in the city. He had tested negative for COVID-19 on January Friday 15, January Sunday 17 and Saturday January 23 – as part of the weekly testing system in place. When the man was working at this hotel, there were four active cases of COVID-19. Of those four cases, we have at least three confirmed variant strains, two UK and one South African. We are told the guard was working on the same floor, as a positive UK variant case. The guard completed two 12-hours shifts on both the 26th and 27th of January. Exactly how the infection was acquired remains under investigation.
The Health Department contact tracing team has pulled together a list of potential exposure sites of where this positive case has been in recent days. These locations currently include:

• Coles Maylands supermarket on 25 January from 8pm to 10pm
  
• KFC Maylands on 27 January from 6pm to midnight
  
• Mitsubishi Motors car dealership in Midland on 27 January from 7pm to close
  
• Spudshed, Coventry Village in Morley on 27 January from 8pm to midnight
  
• ECU Joondalup on 28 January from 11am to 2pm
  
• Consulate General of India on St Georges Terrace in Perth on 28 January from 12pm to 5pm
  
• Halal Grocery Store in Cloverdale on 28 January from 7pm to 9pm
  
• Venus Ladies and Gentleman Hair Design Maylands hairdressers on 29 January from 1pm to 3pm
  
• Perth Convention Centre on 29 January from 4pm to 6pm
  
• Nedlands Family Practice GP surgery on 29 January from 5pm to 6pm
  
• Chemist Warehouse North Perth Pharmacy on 29 January from 5.30pm to 7.30pm
  
• 7-Eleven Ascot petrol station on 29 January from 8pm to 9pm
  
• Coles Maylands supermarket on 29 January from 8pm 9pm
  
• Puma Service Station in Burswood on 30 January from 11am to 12 midday.
  
• Coles Express/Shell Service Station in Cloverdale on 30 January from 12 midday to 3pm
  
• Pharmacy 777 at Maylands Park Shopping Centre 30 January from 2.30pm to 4pm.
  

People who have been to these venues on these dates and times must get tested.
In addition, people who live or work in the Falkirk Avenue, Maylands area including Coles, Liquorland and the Maylands shopping precinct should present for a test. They must then go home and isolate until their negative test results are returned.
The investigation is on-going by our public health team, and it is likely more locations will be added following further discussions with the man.
Close contacts will be contacted by public health officials and asked to quarantine for 14 days.
More information on testing clinics will be available on our website – the WA Health and WA Gov websites.
The man’s immediate household contacts have been contacted, tested and placed in isolation at State managed quarantine facilities to complete a 14-day quarantine period in a quarantine facility.
All three have tested negative this morning. However, we can expect that they will become positive in coming days.
Genome sequencing is underway on the positive case and results will be known by Tuesday morning.
However, based on the information we have, it appears possible that this new positive case has the highly transmissible UK variant.
The past year has been unlike any other – Western Australia has done an incredible job. It’s something I am so proud of.
But as we have always known with COVID – it can change very quickly.
Today – we need to go back to what we know best, to ensure we limit community transmission of COVID-19 in our State.
Even though it was nearly 10 months ago – WA has experienced community transmission of this virus before.
We all did the right thing and we crushed it.
And it worked.
So beginning at 6pm tonight, the whole Perth metropolitan area, the Peel region and the South West region will be going into a full lockdown.
This lockdown will run until 6pm on Friday.
A five-day lockdown.
It’s crucial we act quickly, to keep the community safe.
We cannot forget how quickly this virus can spread, nor the devastation it can cause.
Following our discussions with the Chief Health Officer and Police Commissioner, the following measures will be put in place from 6pm for people in Perth, Peel and the South West:
People in these regions are required to stay home, except for the following four reasons:

• Shopping for essentials like groceries, medicine and necessary supplies.
  
• Medical or health care needs including compassionate requirements and looking after the vulnerable.
  
• Exercise, within their neighbourhood, but only with one other person and only for one hour per day.
  
• Work, where you cannot work from home or remotely.
  

In addition to this Stay Home rule.
If you do leave home, for one of the four reasons you will be required to wear a mask at all times outside and if you need to work indoors, then wearing a mask in the workplace is also mandatory.
To be clear, mask wearing on public transport is also mandatory.
People in the Perth, Peel or South West region need to stay inside their region for the next five days, unless for an essential reason.
We are strongly encouraging that everyone in this area, who is from another WA region, stay here and do not travel further outside of this area until the lockdown is over.
If you do need to travel outside the region you are in now, that can only occur if you need to return to your place of residence or exceptional circumstances.
The transport of essential goods into this region, is permitted, under our existing transport guidelines.
This lockdown means the following businesses, venues and locations in the relevant regions need to close for the next five days:

• Pubs, bars and clubs
• Gyms and indoor sporting venues
• Playgrounds, skate parks and outdoor recreational facilities
• Cinemas, entertainment venues, and casinos
• Large religious gatherings and places of worship
• Libraries and cultural institutions

Restaurants and cafes will close, and provide takeaway service only.
10 people can attend funerals, weddings are cancelled for the next five days.
No visitors are permitted to your home, unless caring for someone vulnerable or an emergency.
No visitors will be allowed in aged care homes, unless exceptional circumstances.
No visitors to hospitals and/or disability facilities, unless exceptional circumstances.
Elective surgery and procedures for categories 2 and 3 will be suspended from Tuesday, 2 February. Category 1 and urgent category 2 surgery will continue.
For a majority of schools in these regions, school was due to start tomorrow.
That has now been put on hold and schools will be closed until next week – following the lockdown measures.
It is, in effect, an extension of the school holidays.
I have been in contact with the Prime Minister and my fellow State and Territory colleagues to advise them of this situation.
I have recommended that they put a stop to any travel into WA – as an extra precautionary measure.
Border controls are important here – and I 100% support them to ensure we can get through this.
All these measures will be reviewed regularly and the Chief Health Officer will continue to monitor the serious situation and provide more ongoing advice. This is an extremely fast-moving situation.
I know for many Western Australians this is going to come as a shock.
Western Australians have done so well for so long but this week it is absolutely crucial that we stay home, maintain physical distancing and personal hygiene and get tested if you have symptoms.
This is a very serious situation and each and every one of us has to do everything we personally can to help stop the spread in the community.
We have acted decisively and swiftly given these circumstances.
I want to thank everyone in advance for their patience.
In effect, for a short period of time, we are going back to what we experienced in March and April.
This is a highly unpredictable virus. But it is important to act calmly and take sensible precautions.
Leaving your home to purchase food and essentials will be permitted during the lockdown.
I say this, so people understand that you do not need to rush to the supermarket today.
Take care of your loved ones and be respectful of others including those who are working, to keep essential services and supplies ticking over.
Our State is well equipped to handle this situation.
We have systems in place throughout the health system that are swinging into action as we speak.
We have the capacity to manage this situation.
Throughout the pandemic, the response of Western Australians has been second-to-none.
The community has done everything we have asked of them.
They have made great sacrifices, and it has kept our State safe.
I could not be more proud and thankful of the way Western Australians have carried themselves.
Now we’re asking for your help once again.
We will provide further updates as they come to hand.
All relevant information will be posted on websites as it comes to hand.
Thank you WA.

Since The Weeknd is performing at the Super Bowl Halftime show, I thought it’d be nice to post a little guide to his discography for anyone interested in looking to do a deep dive into his work. I would’ve posted this the day of the event, but I assume that some people would probably like to go through it over the weekend.
This shares a direct overview of his released material, talking about his career and the background of the music, the videos, the meanings and all. I’ve written this from a pop perspective, keeping in mind that his history might be fairly new for general pop fans.
I also go into the storyline of the red suit character, if your interested in catching up on that narrative before the Halftime show (which will continue the story), I’ve listed the chronological order below followed by an explanation of that narrative.
I wanna be clear that the interpretations/theories are not conclusive. Abel rarely shares the metaphors or meanings behind his music. This is based on widely based on fan discussion/mutual interpretation. Fans can feel free to expand on anything in the comments.
It is important to know about Abel's backstory to get a certain perspective of where he’s coming from, especially when discussing the songs that deal with substance abuse. These recent articles cover his early years really well and share an up-to-date point of view of his success.
Variety 2020
Billboard 2021 - Also a good source for getting to know his team.
So, an essential TL;DR is this: Abel Tesfaye came from a broken home, he was born to Ethiopian immigrant parents who split up when Tesfaye was less than seven. He then lived with his mother and grandmother, only rarely seeing his father but having a nice impression of him. His drug addiction started as soon as he was a high schooler, he turned to shoplifting to pay for this need of various substances. Soon he dropped out of high school, leaving his home the same weekend, which would later inspire his stage name, The Weeknd. The name is reference/homage to the weekend his life changed.
Quick side note, I didn’t think this post would nearly reach the character limit. So I’ve cut out excess detail and lists of producers (with the exception of After Hours since we’re in that era).
Table of contents

1. XO.
2. House of Balloons.
3. Thursday.
4. Echoes of Silence.
5. Trilogy.
6. Kiss Land.
7. King of the Fall.
8. Beauty Behind The Madness.
9. Starboy.
10. My Dear Melancholy.
11. After Hours.

XO.

XO is the record label that The Weeknd and co. created in order to publish the first mixtape (House of Balloons) and the ones that would follow afterwards. XO has a lot of meanings that have to do with what went into the music and what still goes into it. XO is what the fans call themselves, popularly with the phrase XO Till We OD (shortened to XOTWOD); another way of saying “we’re ride or die for The Weeknd and his team.”
While some argue that it could mean anything since there isn’t clear meaning to it, fans continue to associate the abbreviation with ecstasy (X) and oxycontin (O). That definition stems from XOTWOD, fans assume it’s true because of the team’s history of drug usage. While others take it as it’s classical definition “hugs and kisses” because of the consistent lyrical nature of The Weeknd’s songs.
Overtime the definition of XO is simply known as: the fans, the crew, and the label. The Weeknd is more than just one person, he comes with XO. For the sake of clarity in this writeup, I’m going to refer to his crew as XO and the fans as “the fans.”
XO still serves as a record label, the current roster is The Weeknd, Belly, Nav, and Black Atlass. It remains The Weeknd’s record label and was his first label before becoming a subsidiary of Republic Records.
Throughout his career, The Weeknd has worked with Illangelo, a Canadian producer who’s work the fans adore. Carlo “Illangelo” Montagnese was one of main the producers on The Weeknd’s Trilogy, he’s credited on each track. The fan base claims his work to be some of the most notable artistry in The Weeknd’s discography. Their work together continued with Beauty Behind The Madness, Illangelo worked on seven tracks for that album. He then returned for After Hours working on another seven tracks.
DaHeala, another Canadian producer, is another significant factor in The Weeknd’s music. Jason “DaHeala” Quenneville worked as lead producer on Kiss Land. He returned to work on six tracks for The Weeknd’s Beauty Behind The Madness, including the hit Earned It. DaHeala returned as a writer for six of the songs on Starboy. Then DaHeala worked on nine After Hours tracks, and worked as the only producewriter alongside The Weeknd for bonus tracks Missed You and Final Lullaby.

House of Balloons.

Didn't wanna make this NSFW, so here's the super clean edited cover

This is a happy house. We’re happy here. (House of Balloons/Glass Table Girls)

One of the most iconic title tracks of all time. House of Balloons is about a lifestyle of drugs, sex, and partying; all in effort to drown out self-doubt. It comes from a place of wanting to make it big while doing what you can to survive, all while pretending everything’s alright. The mixtape describes various sorts of women, how they’ve had impacted the life of someone who’s already down on his luck.
Fans often refer to House of Balloons as The Weeknd’s best work. The mixtape was the first introduction the world got of XO, and it was one hell of a way to make an impression. It’s personal for the fans and Abel because it’s the only piece of work known to be based on his life. At the end of the day he’s a songwriter, with many of his albums he creates scenarios and world that he likes to explore through the music. But House of Balloons is known to be based entirely on his life. It remains The Weeknd’s most critically acclaimed work.
House of Balloons was crafted through the influences of Hip-Hip/Indie-Rock with the main focus on R&B. Through the genius of Ilangelo, the record was—and is—mesmerizing capturing the essence of a lifestyle that The Weeknd described as “anti-everything.”
House of Balloons assisted The Weeknd in gaining the attention of Republic Records, which would then host The Weeknd’s own label XO. Though hesitant at first, XO decided to partner with Republic after the co-founding brothers Monte and Avery Lipman kept coming back to Toronto solely for The Weeknd.
House of Balloons received three videos, The Knowing, Wicked Games and Twenty Eight. The Knowing was the very first video The Weeknd made, so of course it’d be something other-worldly; it essentially reflects the song itself but in a sci-fi setting. Twenty Eight represents Abel’s life after fame but also his remorse of letting captivating women into his life.
Fun fact— House of Balloons is an actual place in Toronto, it was where him and his crew lived after he dropped out of high school. They’d host parties, call girls, do drugs, and to make it less depressing they’d fill it with balloons.

Thursday.

Valerie on the cover

Welcome to the other side. (Life of the Party)

Thursday consists of the same themes as HoB; sex and drugs. But there’s a twist, he’s in a semi-relationship with this girl Valerie. She’s the only one on his mind, even though they meet only one day of the week, any guesses on what day that could be? Through The Weeknd’s phenomenal voice and the insane production, we’re also presented with this story of a toxic relationship where Valerie used to have the upper hand but she no longer does when she falls for The Weeknd.
While Thursday isn’t entirely about the relationship of The Weeknd and Valerie, it consists of reflections to Abel’s life after the release of House of Balloons. The song Rolling Stone notably has a double meaning, in which Abel asks his fans if they’ll stick with him when he gets mainstream appeal and decides to change his sound.
The track Valerie wasn’t on the original release of Thursday, it added when Trilogy was released. Ending the mixtape with Heaven or Las Vegas meant that The Weeknd’s actions with and without Valerie were a result of his fatherless childhood, making him push anyone away. That meaning behind Thursday doesn’t change when Valerie is added to the track list, it just means that both want the toxic relationship back.
The Zone (feat. Drake) was the first feature The Weeknd had on any of his work, the video for it was released in November of 2012. Rolling Stone had also received a video in October of 2012. Both were directed by The Weeknd and reflect the two different aspects of Thursday. The Zone has Valerie living it up in the House of Balloons. And Rolling Stone has The Weeknd doing a photoshoot for Trilogy, reflective of the song itself.
Fun Fact— the female voice heard in Lonely Star is The Weeknd’s, he pitched his voice to make it sound like a woman’s.

Echoes of Silence.

Diana on the cover

Laisse tomber les filles. Un jour c'est toi qu'on laissera. [Leave the girls alone. One day it’ll be you they will leave.] (Montreal)

Out of a dark introductory into the early life of The Weeknd, Echoes of Silence is the darkest work of his Trilogy. Let’s be honest the story here isn’t entirely ethical at times but makes for one hell of a mixtape.
Similar to Thursday, Echoes of Silence follows a storyline. After accumulating success, The Weeknd gains the attention of various women. There was this one woman (D.D.) who he liked but she initially rejected him (Montreal). The woman came back to him for his fame status and evidently fell in love with him (Outside), but now that he’s got the upper hand he treats him like a groupie (XO/The Host) and lets... bad things happen to her; she’s gotta pass a test before she can get with him. This test is either drugs or his crew (Initiation). He ultimately tells this woman that he’s not exactly longterm-relationship material, perhaps because her love is temporary (Same Old Song), because he’s Next. With the end of Echoes of Silence (originally ending on the title track) the listener is left to wonder why The Weeknd left her if he’d simply want her to stay.
As a side note— Initiation should not be condoned. It remains true that The Weeknd is a songwriter and the progression of time has changed perspectives. But a song that makes such suggestions as Initiation should not be ethically/morally claimed or celebrated.
The mixtape follows The Weeknd’s lifestyle after he’s gained all this success, he’s still the same person but now he’s gotten everything he wanted. Some tracks such as The Fall continue to emphasize his journey into stardom and his acceptance of fame being temporary. With the added Till Dawn (Here Comes The Sun), The Weeknd acknowledges the changes in his life, realizing that the old lifestyle is no longer there for him or his past lovers.
Echoes of Silence is known as an underrated gem of The Weeknd’s discography, it’s well received by fans and critically acclaimed but often brushed under the rug in discussion of his work. A lot of fans and casual listeners play the mixtapes through Trilogy rather than their respective albums. This often leads to people not playing EoS either at all or only the first few tracks, this is predominantly due to the nature of the compilation being nearly three hours long.
Fun fact— D.D. is a cover of Michael Jackson’s iconic Dirty Diana. Fans have named the woman in Echoes of Silence Diana because of this track. Various theories argue that the mixtape itself is based on the Dirty Diana itself with exaggerations of the truth, or whether or not it’s a story The Weeknd crafted based on the song.

Trilogy.

Rolling Stone video doubled as a shoot

You don’t know what’s in store. (High For This.)

Trilogy is a compilation of The Weeknd’s mixtapes, House of Balloons, Thursday, and Echoes of Silence. These three mixtapes were released 3-4 months apart from one another for free digital download in 2011, they gained quite a lot of attention from various industry executives.
Prior to the release of Trilogy, The Weeknd featured on Drake’s Take Care with Crew Love. The song was Abel’s first exposure to a Rap crowd/Rap fans, more people began listening to his music after the release of Take Care. The Weeknd then featured on Wiz Khalifa’s Remember You, which served as the second single off Wiz Khalifa’s O.N.I.F.C. Following those two releases, The Weeknd released Wicked Games as the first single off Trilogy.
Trilogy was formed after The Weeknd came under Republic Records’ management. The compilation album reached a debut/peak position of 4 on the Billboard 200 while reaching number one on the US Top R&B/Hip-Hop Albums chart. It’s a well received album with the highlight said to be House of Balloons, which arguably went on to influence various sorts of R&B music of the 2010s.
Videos for Trilogy

Kiss Land.

Iconic

I went from starin' at the same four walls for 21 years. To seein' the whole world in just 12 months. (Kiss Land)

Kiss Land is based on The Weeknd’s tour life. Visiting unfamiliar places gave Abel horror movie vibes. A guy who used to own the city (Toronto) he lived in is now a small fish in the ocean of the entire world. The Weeknd’s first studio album was a great introduction into the sound he would soon get well acquainted with.
While continuing the R&B sound with the essence of Dark Wave, the album explores emptiness and regret throughout the lyrics—or what pop fans could categorize as dark pop—. The Japanese aesthetic used for various videos and the single covers/booklet reflects the themes of feeling overwhelmed by such a loud world that there’s no point in being if you don’t belong.
The album explores the real-world and the women in it as well as regrets regarding past actions, namely letting go of women who could’ve been the one in Adaptation. The Weeknd attempts to find that satisfaction in other women and past lovers, but accidentally falls for a sex worker in Belong To The World. With Wanderlust he accepts and expresses that love in the modern world isn’t entirely possible. While continuing to tour the world he enjoys these new experiences with XO (Live For feat. Drake), as well as the new women in his life (Kiss Land). And when he’s back home, he accepts the loss of the relationship he cherished.
Kiss Land debuted and peaked at number two on the Billboard 200. It was fairly acclaimed but gained a massive cult following. There were four videos for made for the album, the title track, Belong To the World, Live For (feat. Drake), and Pretty. Those four songs received interesting visuals that kept up with their respective themes while Belong To the World/Kiss Land got visuals that matched the aesthetic of the album. To this day fans ask Abel for a part two to the horror-movie-inspired album after he said it’s the only album he would have a sequel for.
Videos for Kiss Land
Fun Fact— The video for Kiss Land on YouTube is an extremely edited version of the actual video shot for the song. The directors cut further explores the erotic-horror themes if the album.

King of the Fall.

King of the Fall 2020 cover (even though I talk about three other songs here)

Driving by the streets we used to walk through like a triumph. (King of the Fall)

These next few song were released between the Kiss Land and Beauty Behind the Madness era. Some fans would classify them as part of the Beauty Behind the Madness era—I’d say the same tbh—but they stand apart on the basis of success and acclaim. It’s a transition between The Weeknd being an underrated R&B musician to being a mainstream artist with massive recognition and appreciation.
The first of these four songs is King of the Fall. A fan favourite and a standout in The Weeknd’s discography. This is one of The Weeknd’s few Rap tracks, it gained a lot of attention within the Rap sphere. It was the way in which XO would announce that they’ve made it, little did they know that this was just the start.
Prior to the release of Beauty Behind the Madness (BBTM), The Weeknd gained mainstream attention. The Weeknd’s exposure to mainstream music was uphill, it wasn’t overnight. The first taste of BBTM came from Often, a song that reflected the themes of sex that Abel was known for. The track was released more than a year before BBTM’s release and had made it onto the trackless unlike King of the Fall. Slowly but surely The Weeknd gained exposure, his main sources of exposure were through a collaboration and a soundtrack.
Most pop fans heard about The Weeknd through his hit collaboration with Ariana Grande, Love Me Harder. The collab was made through Republic when The Weeknd said he wanted more than what he had gotten through Kiss Land. Ariana and Abel had formed a real bond cough The Hills cough, their bond assisted the song in becoming a memorable hit for both artists. Love Me Harder was a top ten hit on the Billboard Hot 100.
Later that year, The Weeknd was featured on the Fifty Shades of Grey soundtrack with Earned It, as well as Where You Belong. Earned It became a massive hit peaking at 3 on the Billboard Hot 100 and receiving an Oscar nomination for The Weeknd; a massive milestone for XO. Earned It kept up with Abel’s signature lyrics but the production differed heavily from the sort of R&B he was known for.
Videos from that era

Beauty Behind the Madness.

I can hear this image

I'm that ***** with the hair singin' 'bout poppin' pills, fuckin' bitches, livin' life so trill. (Tell Your Friends)

Following the success of Love Me Harder and Earned It, the Beauty Behind the Madness era began with The Hills. This was The Weeknd’s first number one on the Billboard Hot 100. Along with the video, The Hills became an addictive classic. The production and lyrics mirror a mature version of the sound that was originally found on Trilogy. It was truly in keeping with The Weeknd’s character, the only difference was his haircut.
Next came Can’t Feel My Face, a Max Martin production that differed greatly from anything The Weeknd put out in the past. In past songs, Abel had expressed his fear of losing his following if he went mainstream simultaneously asking his fans if they’d stay. He repeats that sentiment in the Can’t Feel My Face video. The sound has changed, the lyrics stay the same but now he’s a pop-star. The song became a hit as it reached number one on the Billboard Hot 100. With this massive bop previous fans still stayed, The Weeknd becoming a pop singer didn’t at all alter his image or sound; he mastered it.
In The Night and Acquainted were released as singles on the same day, the were the only singles to come after the release of Beauty Behind The Madness. The former received a music video treatment that followed the theme of the song itself while also starring Abel’s girlfriend at the time, Bella Hadid. Acquainted was robbed of a video even though Abel had shown off the fact that a video was in development; the song kept in the tone of The Weeknd’s work prior to BBTM.
Beauty Behind the Madness captures a Hollywood-based reality that The Weeknd came to understand: the dark aspects of your life will continue to follow you wherever you are. Real Life, Losers (feat. Labrinth), Tell Your Friends, Dark Times (feat. Ed Sheeran), and Prisoner (feat. Lana Del Rey) all capture a nihilistic view of a dream achieved.
Most of the videos of Beauty Behind The Madness have a mysterious white man. He’s featured in The Hills, Can’t Feel My Face, and Tell Your Friends. That man represents the devil. Throughout his journey in those videos, (The Hills) Abel runs into the devil after his car crash, (Can’t Feel My Face) he’s at the club then lights him on fire. The significance behind the fire could be selling his soul to the devil, BBTM is about Hollywood and a popular Hollywood myth is that celebrities sell their souls to the devil in exchange for fame. So in the Can’t Feel My Face video, Abel changes his sound to Pop (from R&B) thus leaving his signature sound in order to become famous, everyone starts enjoying his music once he’s sold his soul.
Then we see The Weeknd burying himself in Tell Your Friends, perhaps leaving the old Abel behind after the deal with the devil. However, instead of thanking the devil, Abel takes his revenge and shoots him. But wait, there’s more! The album trailer for BBTM features the devil burning a billboard with The Weeknd’s face on it, revealing Beauty Behind The Madness. HOWEVER, the final cut for the video features the devil being arrested while The Weeknd watches. This is a more realistic form of karma that the devil gets.
Videos for BBTM

Starboy.

Filled with bops

If I could, I'd trade it all, trade it for a halo. And she said that she'll pray for me, I said, "It's too late for me.” (Ordinary Life)

After the massive success of Beauty Behind the Madness, there was a lot of hype around what The Weeknd would do next; evidently he decided to explore Pop. The fandom he had gained wasn’t entirely based in the Pop sphere, his fans consisted of general Rap fans, but Starboy attracted the Pop audience.
Initially, most of his older fans couldn’t get behind Starboy, it differed greatly from the previous sound. It was crazy to think that the guy who made Trilogy managed to make such a Pop-centric album. But this was Abel expressing his versatility.
Since this is where most pop fans found out about Abel’s work and became fans I won’t talk too much about the singles, rather more about the album itself. His work with Daft Punk cemented this album in an efficient mix between Pop and R&B, where Beauty Behind the Madness was more R&B with Pop, Starboy was considered Pop with R&B.
Beyond the genres, Starboy explores two evident themes. One being his life with fame and recognition. The next being his love life in Hollywood, this aspect of the album came from his relationship with Bella Hadid which ended after the release of the album.
The cross became the symbol for that era and appeared in the album’s photoshoot as well as the videos. There was never any conclusive word on the use of the cross but there are various theories about it, something to note is that Abel was raised Christian, it could perhaps be a reflection of his past.
The cross he uses to destroy his accolades (Starboy video) is assisting him rather than something that’s holding him back. Abel’s upbringing was rough but now he’s celebrating it rather than feeling bad for himself. The cross continues to come up in the Party Monster video, this time it’s in the party house he’s making his way through. Then it shows up in the video for Reminder, this time in the form of his merch, the people wearing it are perhaps representative of his fans. Then we see it in the False Alarm video, both Abel and the girl are wearing it; the notable thing being that Abel holds his cross up before dying. Then in the brilliant video for Secrets, after giving up on the girl he’s with he leaves the building to find a giant cross. And finally in the I Feel It Coming video, The Weeknd sports a shiny cross necklace, and Daft Punk find it years and years after Abel froze.
The videos tell us that the cross is an evident piece of his story. This could mean that his past will always be with him, no matter what sort of fame he’s experiencing he’ll always be who he once was.
Also, I’m gonna take this moment to once again the genius that is the Secrets (both the song and the video). Yes it’s my favourite song/video off of Starboy but it’s so underrated.
Videos for Starboy, Secrets video bottom right
Fun Fact— Most demos of the tracks on Starboy weren’t as pop as they became, they started off R&B but became pop after production.

My Dear Melancholy.

Note the comma

They said our love is just a game, I don't care what they say. But I'ma drink the pain away, I'll be back to my old ways. (Privilege)

Oof (but in a good way, this whole thing is a bop). For this one I’m gonna talk extensively about The Weeknd’s relationships, which personally feels really invasive but it’s but it’s essential when talking about these sad boy anthems. Beyond that I’d just like to state that though they are part of the narrative both Bella Hadid and Selena Gomez deserve respect/privacy.
So when it comes to Pop music fans I think it’s safe to say that we all know a lot about this one. My Dear Melancholy (MDM) came after the very public relationship of The Weeknd and Selena Gomez. However it’s not just about Selena, some songs reflect his relationship with Bella Hadid (whom he got back with a month after MDM’s release).
My Dear Melancholy consists with The Weeknd’s exploration/mastery of merging Pop and R&B together. The EP was praised by fans for its lyrics and production, many went on to theorize that it was his most personal project since House of Balloons. The EP was the shortest album to reach number one on the Billboard 200.
My Dear Melancholy and fan conspiracies; name a better duo. The first theory being that the EP is entirely about Selena Gomez which wasn’t too much of a mystery since the lyric “I almost cut a piece of myself for your life” exists. Not only did MDM come after Abel’s relationship with Selena Gomez but also after his relationship with Bella Hadid. As far as fans were aware those two relationships were the most important relationships Abel had ever been in.
In theory, the songs about Bella and Selena can be categorized. Call Out My Name, Try Me, and Privilege are likely about Selena. Wasted Times, and Hurt You are likely about Bella. Leaving I Was Never There to act as an introspective look into The Weeknd’s life, basically making him hop back on his vices for comfort.
Another popular theory was that My Dear Melancholy was the first of another trilogy. This rumour was widely believed due to the comma at the end of the title on the album cover. But the fans soon gained a real reason to believe this theory, since the CEO of XO (the record label), Sal had liked an Instagram post that featured the cover and alleged date. Since Trilogy is a fan favourite this conspiracy spread like wild fire, so much so that fake titles and covers were made. The name of this trilogy would be: (1)My Dear Melancholy, (2)We’re Alone Together, (3)Abel.
Only one song served as a single for the EP. Call Out My Name was released nearly two months prior to the actual release of the album, it debuted/peaked at number four on the Billboard Hot 100. The mysterious video captures The Weeknd in various atmospheric places that reflect the tone of the EP, a haunting yet unexplained reality that the listener is to reflect on.
From the cover, to the music, to the video, to lyrics, My Dear Melancholy is an introspective reflection of heartbreak.
Call out my name video

After Hours.

Talented, Brilliant, Incredible, etc.

My darkest hours. (After Hours)

After Hours comes after success but references two lows in The Weeknd’s life. The album welcomes darkness and leads the listener towards a dead-end. The Weeknd’s past two albums (Beauty Behind The Madness and Starboy) ended on hopeful notes, they left the listener with a sense of hope but all hope his lost with After Hours.
Fans compare After Hours to House of Balloons—a rare occurrence considering House of Balloons’ acclaim—arguing that both albums are on the same level. Debate continues on whether or not both albums are on the same caliber. The belief that After Hours stems from reality does a lot to help its side of the argument.
The era began with Mercedes-Benz commercial that featured Blinding Lights, that was our first taste of the everlasting bop. Heartless was premiered on an episode of Memento Mori hours before its release on the 27 of November (2019), Blinding Lights was released two days later. Both videos were as brain melting as promised and the served as the tip of the iceberg.
After Hours was released nine days after COVID-19 was declared a pandemic, there was a massive risk in releasing an album that would not have a lot of promotion after it’s release (other than magazine coverage). There was no telling whether or not people would pay attention to the album during the height of the fear surrounding the pandemic, but it was a massive success. After Hours debuted at number one on the Billboard 200, with singles Heartless and Blinding Lights topping the Billboard Hot 100.
The album is layered with haunting productions that remains predominantly R&B but dives deep into Pop with some of the tracks. Max Martin produced the massive hit Blinding Lights as well as In Your Eyes, Save Your Tears, Hardest to Love, and Scared to Live which samples Elton John’s Your Song. Other notable producers include Metro Boomin who worked on the hit Heartless as well as Escape from LA, Faith, and Until I Bleed Out. With Kevin Parker on the interlude Repeat After Me.
Beyond the production are the narrative driven lyrics. In theory the album references two significant events in Abel’s life, his second breakup with Bella Hadid and his arrest in Las Vegas. The latter was due to his misbehaviour; in January 2015 he punched a cop in Vegas, lmao. Which means that After Hours is a recollection of The Weeknd’s first few years in LA. He merges the concept of his breakup with the idea of being an upcoming star, feeling free in the city of lights all while diving deep into the meaninglessness of those lights.
While After Hours starts with loneliness and a second chance it leads up to Abel returning to his vices of lust. In Alone Again his loneliness caught up to him and he’s asking for a second chance. He acknowledges his mistakes and situation in Too Late/Hardest to Love, in Scared to Live his ex then returns to him for a second time. He remembers his past ways in Snowchild and the way in which it lead to better days, but where do you go after such highs? In Escape From LA he faces the superficial reality of Hollywood, glad that he got that he got back with his ex, while continuing to question if it’s worth it. But he fucks up the second chance when she pulls up to the studio.
Who is she? Much like the other mysteries surrounding The Weeknd’s music, we may never know. Is it all more of The Weeknd’s songwriting ability or is it driven by reality? Fans found a merge between the two to be more accurate, After Hours is about heartbreak and a return to the vices that held The Weeknd back.
Heartless is when The Weeknd is once again back to his ways, he may have been in a serious relationship but after throwing that away he spirals back to the way he once was. It’s sad but it’s one hell of a song. Speaking of brilliant songs, Faith is when Abel admits that he’s back on his vices, he states that he needs his ex back with him till the end; he’s back to self-loathing.
So when he says he’s blinded by the lights, there’s two meanings to it. The Faith outro tells us that he’s in a car with flashing lights, a cop car (as confirmed by Abel) to be exact. Then Blinding Lights tells us that while he’s watching the bright lights of Vegas pass him by he calls out for the girl that he regrets losing. That is the peak of the After Hours narrative. He’s behaving badly over the loss of the girl he loved and is now at the worst position trying to find her and gain her trust for a third time.
Following Blinding Lights is In Your Eyes, this is where The Weeknd vows not to judge her; he can see right through her but will never do anything to make her upset. Does this mean their back together? Not exactly. Save Your Tears details a sort of moving-on that The Weeknd isn’t ready for but tries to help her move on, blind to his own inability to move on. Does it work? Not really. Repeat After Me (Interlude) shows that he’s still trying to convince himself that he’s unfazed by the loss of a meaningful relationship.
Then you hear a true masterpiece. The title track is a spiral into true regret and an apology for his actions, he admits that his ex girlfriend is the only reason he lives. In a dark lonely city she’s the only one keeping him sane. But his pleas fail, Until I Bleed Out is when The Weeknd no longer wants her in his life so much so that he wants to erase his memory of anything related to her. The bonus tracks then echo the final sentiment.
It’s one sad ass album, ain’t it. But here’s where the Red Suit Character comes in.
Shoutout to the makeup department
The album isn’t the only narrative to follow with After Hours. The videos for the album follow their own sort of narrative. The story follows an unnamed guy that goes by “red suit character” according to The Weeknd.
There’s a lot of confusion and endless theories surrounding this character’s story, after The Weeknd confirmed that it’s about a decent into Hollywood culture it makes more sense… kind of. I’m gonna discuss the storyline without talking about the movies that have influenced it, this way the focus remains on the character.
The order of these videos is Heartless / Blinding Lights / Blinding Lights (Live on Kimmel)* / After Hours short film / In Your Eyes / Until I Bleed Out / Snowchild / Too Late / Live at AMAs* / Save Your Tears
*Though all live performances could count as part of the narrative, these one relate directly with the videos that follow.
He’s is first seen in Vegas with Metro Boomin (Heartless), intoxicated on various substances. He dives deeper into his high until he licks a frog, after that he faces the true effects of this high. He’s frightened by the result and runs far away from Vegas. (Blinding Lights) He’s then found in LA, where he’s dancing in the street, hypnotized by the singer, beat up by guards, and races past all those bright lights in his Benz. Ultimately realizing the shallowness of the Los Angeles fantasy.
(Blinding Lights Live on Kimmel) We then find him performing Blinding Lights live, while he attempts to find more reason in within the madness city; he couldn’t find it on the streets so he goes to the stage. (After Hours short film) Even then there’s no meaning to anything in the city, he mindlessly wanders into the depth of the subway where he’s dragged by the reality of it all and ends up possessed. (In Your Eyes) After being possessed he chases the woman whose boyfriend he just murdered, she runs into a club falls deeper into the After Hours fantasy, in a successful attempt to defend herself she beheads the red suit character and dances all over LA with his head, iconic behaviour.
(Until I Bleed Out) Then in an ethereal dreamscape, red suit character finds himself in a House of Balloons. He’s trying to escape, but the people there keep pulling him in; he’s getting higher while observing Glass Table Girls. He spirals into the antarctic, the other side of the world. From Heatless to this point in his story, his vices lead him back to the lowest point in Abel’s life. Is it Hell, Heaven or Las Vegas? (Snowchild) He relives his career up until the point where his story began. Considering he’s dead, his life basically flashed before his eyes.
(Too Late) LA girls find the red suit character’s head and live their best life. They wanna have sex with him so they find the best boy parts by calling up a stripper who could be the body. The stitch the head up with the body and do what they want. But now he’s brought back to life. (Live at AMAs) He’s had work done… He went in to get his nose fixed and the doctor said “you sure that’s all you want?” The red suit character’s face is healing while he tries to celebrate his life on top of a bridge.
(Save Your Tears) Surrounded by a masked cult he debut’s his new face. Do they like it? Are they impressed? Not instantly, their masks translate no expression so how’s he to know? Is any of this worth it? Nope red suit character continues to die inside. He finds a maskless girl in the crowd, she’s lively unlike the rest; but even then, nothing on the inside nothing on the outside. He wants death again, somehow a second chance with this city is still pointless. He tries to kill himself via the girl and himself but it’s all a facade; theatrics.
His story continues but that’s all we know so far.
The videos make a lot of film references. This post by explain these references very well, as well as past album references here (part one) and here (part two).
After Hours is inspired by a lot of movies, since Abel is in fact a cinephile. The main movies that inspired the aesthetic and storytelling are believed to be Fear and Loathing in Las Vegas (1998), Casino (1995), Joker (2019), Uncut Gems (2020), and After Hours (1985). The album tells two sad narratives but remains one of The Weeknd’s best works yet. He’s expanded his videography and enhanced the interest of people who casually enjoy his music and of course his fans.
But the era isn’t over, by the time this is posted his Super Bowl Halftime show is yet to happen. And it’ll continue the red suit character’s story.
Videos for After Hours (so far)
Fun Fact—The Heartless video features a reference to Thursday. When he’s trying to run from Vegas, a sign behind him flashes “Heartless / Heaven or Las Vegas.” This could be a reference to Abel running from his past, after all Heartless is about him returning to his vices.

END.

Thank you for reading this, again, I didn’t realize it would end up being this long. But I hope this this served as a nice refresher for any fans who wanted to revisit Abel’s work before the Super Bowl.
And I really hope that anyone interested in getting into his music finds this helpful. Once again, the theories/interpretations mentioned aren’t conclusive, they’re widely based on fan discussion/mutual interpretation.
Due to the character limit I couldn’t add too links to the albums, so here are some artist links.
Apple Music | Spotify | YouTube | The Weeknd’s Shop | Tidal | Genius

Imagine you’re a hedge fund CEO or senior executive.
You’ve always had an inflated ego, and going to Wharton for an MBA definitely didn’t help in that regard. You interned at GS for the summer of 2003 and told all your friends about it, probably even brought it up oh so casually on dates. When you were hired as a trader by a moderately good to great fund, you probably lost a good deal of friends from your previous life, because they “just don’t get you now.” You’re in a different league than them, even your classmates that now work at lesser funds. You act friendly, liking Facebook posts, returning their calls, but there’s a nagging feeling that they’re holding you back. That you’ve made it, and you don’t need some loser that doesn’t even work on the East Coast.
Jump ahead a few years
It’s September 20th, 2008. Bear Stearns closed months earlier, Lehman went bankrupt a few days ago. "Buddies" of yours from both funds have been texting you, some you know from college. Maybe you’ll take pity on them and put in a good word, maybe you’ll tell them nothing’s available right now and that you’re sorry. You don’t tell them you were part of your fund's effort to short sell theirs into oblivion. Maybe you really are sorry though. What you’re more sorry about, however, is that your bonuses are probably going to be shit for a few years. They could even dip into five figures, god forbid. Your thoughts are of course directed to the millions of people losing their jobs across the country by the news, but inevitably your bonus reduction resurfaces as your biggest concern. “It’s not like I can do anything,” you say, after downing some wine. You go to sleep fairly easily, while across the country, innumerable people are forced to contemplate moving.
Let’s jump ahead a few more years
It’s mid-March, 2020. At this point, its become evident that COVID-19 is going to ravage the world, in some capacity (not gonna put politics into this because that’s not the point). As either a CEO or senior executive at a mid-range hedge fund, your thoughts gravitate towards your craft. It’s clear the market is going to tank, so you do what you do best. You short the shit out of several clearly sinking industries (https://www.cnn.com/2020/03/31/investing/short-sellers-market-coronavirus/index.html). But you don't stop there. You go on CNBC, Fox Business, maybe even the BBC, and announce doom and gloom. Doing this will get people to dump their stocks, meaning your shorts print even more money. Oh well, if there’s a positive to be gained from this whole thing it’s your fund making good money, right? By late March or early April, your wife convinces you that going with the kids to the Hampton’s would be the best choice, since the upper east side is getting a little claustrophobic. You’ll need to cancel your two week St. Barts vacation, what a bummer. You rent out a nice beach house in Sag Harbor for 125k a month, managing to beat out the other bidder by upping them by 10k. Once again, millions of people are losing their jobs, and you’re shorting the companies they work for. What else should you do?
Only a few months forward this time
It’s October. Weeks turned into months, and while you’ve started getting back to the city more and more, you’re still staying in Sag. Sometimes you have family friends over for an ostensibly socially distanced wine + cigar. You don’t think much of the events of the summer, aside from that one tweet you had PR send out in July. Your kids might have thoughts, you haven’t asked.
Just a few more months, I promise
It’s January. For really no other reason than the prospect of making more money, you along with a few other funds have decided to open naked shorts on GameStop. While technically not allowed, there are loopholes. Why would the loopholes be there, if not to be exploited, right? Not like you don’t do the same thing with your taxes.
Then, the unthinkable happens
A bunch of retail investors, led by a specific part of Reddit, decide to fuck your position by dramatically raising the share price. Since you firmly believe these people incapable of sticking to such an audacious play, you do nothing. Before long though, you start to become slightly unnerved by how steady the growth of the stock is. It's approaching $100, and you're losing hundreds of thousands to millions every day on short interest. So, you decide to take action. You get on CNBC, and cry about fundamentals. About volatility crushing these people. They don't listen, and keep buying. A week passes with you and your rich friends trying various strategies, none of it working. You're aware of another fund leaning on a popular trading app to force them into not accepting buy orders for GME, amongst others. You're not above sacrificing pride for money, so you announce your fund has closed its shorts. You're lying, of course. What kind of looks what you get at future parties if you cowed to these people? No, fuck that. You've read all the right books, been to the right schools, made the right friends, networked at the right parties and functions. You will not close, everything in your life has conditioned you not to. In fact, you'll double down. You go on CNBC some more. Artificially lower the stock price by trading between a few other funds. None of it's working, and you're intensely aware of another potential gamma squeeze on Friday. Restrictions on buying help during the day, but after hours, the stock jumps. That momentum carries it into a solid Friday. You won't budge, but at this point you're losing millions of dollars a day.
So, here we are
These people do not care about you. You're the least of their concerns, actually. They care about money and fund image, in that order. We have a real chance to make guys exactly like this hurt where it counts (for them), and I want people to understand that. I'm not saying throw your rent into GME. I'm saying you have the chance to really be a part of something, to screw the people that have been doing the screwing for your whole life. The house has been running a fixed casino, and you have the chance to hit back.
Do not close. We have them, and they know it. We're winning, and if we keep winning they will give in.

Edit 1: More ARKQ buying today (~50k shares). Thank you everyone for the positive feedback and discussion!
Bottom Line Up Front (BLUF) or TL;DR for the non-military types:
LMT is a good target if you want to literally go to the moon, and my PT is $690.26 in two years (more than 2x from current levels). Justification and some possible trade ideas are listed below, just CTRL-F “Trade Ideas”. I hope you guys enjoy this work and would appreciate any discussion or feedback. I hope to catch you in the comments.
Team,
We interrupt today’s regularly scheduled short squeeze coverage to discuss a traditionally boring stock, LMT (Lockheed Martin), with significant upside potential. To be clear, this is NOT a short squeeze target like many reddit posts are keying on. I hope that this piece sparks discussion, but if you are just looking for short squeeze content, all I have to say is BUY, HOLD, and GODSPEED.
The source of inspiration for me writing this piece is threefold; first, retail investors are winning, and I believe that we will continue to win if we continue to identify opportunities in the market. In my view, the stock market has always been a place for the public to shine a light on areas of innovation that real Americans are excited about and proud to be a part of. Online communities have stolen the loudspeaker from hedge fund managers and returned it to decentralized online democracies that quickly and proudly shift their weight behind ideas they believe in. In GME’s case, it was a blatant smear campaign to destroy a struggling business. I think that we should continue this campaign by identifying opportunities in the market and running with them. It may sound overly idealistic, but if reddit can take on the hedge funds, I non-ironically believe that we can quite literally take good companies researching space technology to the moon. I think LMT may be one of several stocks to help get us there.
Second, a video where the Secretary of State of Massachusetts argues that internet boards are full of a bunch of unsophisticated, thoughtless traders really ticked me off. This piece is designed to show that ‘the little guy’ is ready to get into the weeds, understand business plans, and outpace analysts that think companies like Tesla are overvalued by comparing them to Toyota. That is a big reason that I settled on an old, large, slow growth company to do a deep-dive on, and try my best to show some of the abysmal predictive analysis major ‘research firms’ do on even some of the most heavily covered stocks. LMT is making moves, and the suits on wall street are 10 steps behind. At the time of writing this piece, Analyst Estimates range from 330-460 (what an insane range).
Third, and most importantly, I am in the US military, and I think that it is fun to go deep into the financials of the defense sector. I think that it helps me understand the long-term growth plans of the DoD, and I think that I attack these deep-dives with a perspective that a lot of these finance-from-day-one cats do not understand. Even if no one ever looks at this work, I think that taking the time to write pieces like this makes me a better Soldier, and I will continue to do it in my spare time when I am feeling inspired. I wrote a piece on Raytheon Technologies (Ticker: RTX) 6 months ago, and I think it was well-received. I was most convicted about RTX in the defense sector, but I have since shifted to believing LMT is the leader in the defense space. I am long both, though. If this inspires anyone else to do similar research on other companies, or sparks discussion in the community, that is just a bonus. Special shout-out to the folks that read more than just the TL;DR, but if you do just read the TL;DR, I love you too!
Now let us get into it:
Leadership
I generally like to invest in companies that are led by people that seem to have integrity. Jim Taiclet took the reins at LMT in June of last year. While on active duty, he served as a C-141B Starlifter pilot (a retired LMT Aircraft). After getting out he went to work for the American Tower Corporation (Ticker: AMT). His first day at American Tower was September 10, 2001. The following day, AMT lost 13 employees in the World Trade Center attack. He stayed with the company, despite it being decimated by market uncertainty in the wake of 9/11. He was appointed CEO of the very same company in 2004. Over a 16 year tenure as CEO of AMT the company market cap 20x’d. He left his position as CEO of AMT in March of last year, and the stock stagnated since his departure, currently trading at roughly the same market cap as to when he left.
Jim Taiclet was also appointed to be the chairman of the board this week, replacing the previous CEO. Why is it relevant that the CEO came from a massive telecommunications company?
Rightfully, Taiclet’s focus for LMT is bringing military technology into the modern era. He wants LMT to be a first mover in the military 5G space, military application of AI space, the… space space, and the hypersonic glide vehicle (HGV) space. These areas are revolutionary for the boomer defense sector. We will discuss this in more detail later when we cover the company’s P/E multiple and why it is absolute nonsense.
It is not a surprise to me that they brought Taiclet on during the pandemic. He led AMT through adversity before, and LMT’s positioning during the pandemic is tremendous relative to the rest of the sector, thanks in large part to some strong strategic moves and good investments by current and past leadership. I think that Taiclet is the right CEO for the job.
In addition to the new CEO, the new Secretary of Defense, Secretary Lloyd Austin, has strong ties to the defense sector. He was formerly a board member for RTX. He is absolutely above reproach, and a true leader of character, but I bring this up not to suggest that he will inappropriately serve in the best interest of defense contractors, but to suggest that he speaks the language of these companies effectively. I do not anticipate that the current administration poses as significant of a risk to the defense sector as many analysts seem to believe. This will be expanded in the headwinds section below.
SPACE
Cathie Wood and the ARK Invest team brought a lot of attention to the space sector when the ARKX, The ARK Space Exploration ETF, Form N-1A was officially filed through the SEC. More recently, ARK Invest published their Big Ideas 2021 Annual Report and dedicated an entire 7-page chapter to Orbital Aerospace, a new disruptive innovation platform that the ARK Team is investigating. This may have helped energize wall street to re-look their portfolios and their investments in space technology, but it was certainly not the first catalyst that pushed the defense industry in the direction of winning the new space race.
In June 2018, then President Trump announced at the annual National Space Council that “it is not enough to merely have an American presence in space, we must have American dominance in space. So important. Therefore, I am hereby directing the Department of Defense (DoD) and Pentagon to immediately begin the process necessary to establish a Space Force as the sixth branch of the Armed Forces". Historically, Department of Defense space assets were under the control of the Air Force. By creating a separate branch of service for the United States Space Force (USSF), the DoD would allocate a Chairman of Space Operations on the Joint Chiefs of Staff and clearly define the budget for space operations dedicated directly to the USSF. At present, this budget is funneled from the USAF’s budget. The process was formalized in December of 2019, and the DoD has appropriated ~$15B to the USSF in their first full year of existence according to the FY21 budget.
Among the 77 spacecraft that are controlled by the USSF, 29 of them are Lockheed Martin GPS satellites, 6 of them are Lockheed Martin Space-Based Infrared Systems (SBIRS), and LMT had a hand in creating and/or manufacturing for several of the other USSF efforts. The Next Generation Overhead Persistent Infrared Missile Warning Satellites (also known as Next-Gen OPIR) were contracted out to both Northrup Grumman (Ticker: NOC) and LMT. LMT’s contract is currently set at $4.9B, NOC’s contract is set at $2.37B.
Tangentially related to the discussion of space is the discussion of hypersonic glide vehicles (HGVs). HGVs have exoatmospheric and atmospheric implications, but I think that their technology is extremely important to driving margins down for both space exploration and terrestrial point-to-point travel. LMT is leading the charge for military HGV research. They hold contracts with the Navy, Air Force, and Army to develop HGVs and hypersonic precision fires. The priority for HGV technology accelerated significantly when Russia launched their Avangard HGV in December of 2019. Improving the technology for HGVs is a critical next-step in maintaining US hegemony, but also maintaining leadership in both terrestrial and exoatmospheric travel.
LARGE SCALE COMBAT OPERATIONS (LSCO)
The DoD transitioning to Large-Scale Combat Operations (LSCO) as the military’s strategic focus. This is a move away from an emphasis on Counter-Insurgency operations. LSCO requires effective multi-domain operations (MDO), which means effective and integrated strategies regarding land, sea, air, space, and cyberspace. To have effective MDO, the DoD is seeking systems that both expand capabilities against peer threats and increase the ability to track enemy units and communicate internally. This requires a modernizing military strategy that relies heavily on air, missile, and sensor modernization. Put simply, the DoD has decided to start preparing for peer or near-peer adversaries (China, Russia, Iran, North Korea) rather than insurgencies. For this reason, I believe that increased Chinese and Russian tensions are, unfortunate as it may be, a boon to the defense industry. This is particularly true in the missiles/fires and space industry, as peer-to-peer conflicts are won by leveraging technological advantages.
There are too many projects to cover in detail, but some important military technologies that LMT is focusing on to support LSCO include directed energy weapons (lasers) to address enemy drone technology, machine learning / artificial intelligence (most applications fall under LMT’s classified budget, but it is easy to imagine the applications of AI in a military context), and 5G to increase battlefield connectivity. These projects are all nested within the DoD’s LSCO strategy, and position LMT as the leader in emergent military tech. NOC is the other major contractor making a heavy push in the modernization direction, but winners win, and I think a better CEO, balance sheet, and larger market cap make LMT the clear winner for aiding the DoD in a transition toward LSCO.
SECTOR COMPARISON (BACKLOG)
The discussion of LSCO transitions well into the discussion of defense contractor backlogs. Massive defense contracts are not filled overnight, so examining order backlogs is a relatively reliable way to gauge the interest of the DoD in a defense contractor’s existing or emerging products. For my sector comparison, I am using the top 6 holdings of the iShares U.S. Aerospace & Defense ETF (Ticker: ITA). I hate this ETF, and ETFs like it (DFEN) because of their massively outsized exposure to aerospace, and undersized allocation to companies like LMT. LMT is only 18% smaller than Boeing (Ticker: BA) but is only 30.4% of the exposure of BA (18.46% of the fund is BA, only 5.62% of the fund is LMT). Funds of this category are just BA / RTX hacks. I suggest building your own pie on a site like M1 Finance (although they are implicated in the trade restriction BS… please be advised of that… hoping other brokerages that are above board will offer similar UIs like the pie design… just wanted to be clear there) if you are interested in the defense sector.
The top 6 holdings of ITA are:
Boeing Company (Ticker: BA, MKT CAP $110B) at 18.46%
Raytheon Technologies (Ticker: RTX, MKT CAP $101B) at 17.84%
Lockheed Martin (Ticker: LMT, MKT CAP $90B) at 5.62%
General Dynamics Corporation (Ticker: GD, MKT CAP $42B) 4.78%
Teledyne Technologies Incorporated (Ticker: TDY, MKT CAP $13B) at 4.74%
Northrop Grumman Corporation (Ticker: NOC, MKT CAP $48B) at 4.64%
As a brief aside, please look at the breakdowns of ETFs before buying them. The fact that ITA has more exposure to TDY than NOC and L3Harris is wild. Make sector ETFs balanced how you want them to be balanced and it will be more engaging, and you will likely outperform. I digress.
Backlogs for defense companies can easily be pulled from their quarterly reports. Here are the current backlogs in the same order as before, followed by a percentage of their backlog to their current market cap. All numbers are pulled from January earning reports unless otherwise noted with an * because they are still pending.
Boeing Company backlog (Commercial: $282B, Defense: $61B, Foreign Military Sales (FMS, categorized by BA as ‘Global’): 21B, Total Backlog 364B): BA’s backlog to market cap is a ratio of 3.32, which is strong, but most of that backlog comes from the commercial, not the defense side. Airlines have been getting decimated, I am personally not interested in having much of my backlog exposed to commercial pressures when trying to invest in a defense play. Without commercial exposure, their defense only backlog ratio is .748. This is extremely low. I understand that this does not do BA justice, but I am keying in on defense exposure, and I am left thoroughly unsatisfied by that ratio. Also, we have seen several canceled contracts already on the commercial side.
Raytheon Technologies backlog (Defense backlog for all 4 subdivisions: 67.3B): Raytheon only published a defense backlog in this quarter’s report. That is further evidence to me that the commercial aerospace side of the house is getting hammered. They have a relatively week backlog to market cap as well, putting them at a ratio of .664, worse off than the BA defense backlog.
Lockheed Martin backlog (Total Backlog: $147B): This backlog blows our first two defense backlogs out of the water with a current market cap to backlog ratio of 1.63.
General Dynamics Corporation backlog (Total Backlog: $89.5B, $11.6B is primarily business jets, but it is difficult to determine how much of their aerospace business is commercial): Solid 2.13 ratio, still great 1.85 if you do not consider their aerospace business. The curveball here for me is that GD published a consolidated operating profit of $4.1B including commercial aerospace, whereas LMT published a consolidated operating profit of $9.1B. This makes the LMT ratio of profit/market cap slightly in favor of LMT without accounting for the GD commercial aerospace exposure. This research surprised me; I may like GD more than I originally assumed I would. Still prefer LMT.
Teledyne Technologies Incorporated backlog (Found in the earnings transcript, $1.7B): This stock is not quite in the same league as the other major contractors. This is an odd curveball that a lot of the defense ETFs seem to have too much exposure to. They have a weak backlog, but they are a smaller growing company. I am not interested in this at all. It has a backlog ratio of .129.
Northrop Grumman Corporation backlog ($81B): Strong numbers here. I see NOC and LMT as the two front-runners in the defense sector. I like LMT more because I like their exposure to AI, 5G, and HGVs more than NOC, but I think this is a great alternative to LMT if you like the defense sector. Has a ratio of 1.69, slightly edging out LMT on this metric. LMT edges out NOC on margins by ~.9%, though, which has significant implications when considering the depth of the LMT backlog.
The winners here are LMT, GD, and NOC. BA is attractive if you think anyone will have enough money to buy new planes. BA and RTX are both getting hammered by commercial aerospace exposure right now and are much more positioned as recovery plays. That said, LMT and NOC both make money now, and will regardless of the impact of the pandemic. LMT is growing at a slightly faster rate than NOC. Both are profit machines, but I like LMT’s product portfolio and leadership a lot more.
FREE CASH FLOW
Despite the pandemic, LMT had the free cash flow to be able to pay a $2.60 per share dividend. This maintains their ~3% yearly dividend rate. They had a free cash flow of $6.4B. They spent $3.9 of that in share repurchases and dividend payouts. That leaves 40% of that cash to continue to strengthen one of the most stalwart balance sheets outside of big tech on the street. Having this free cash flow allowed them to purchase Aerojet Rocketdyne for $4.4B in December. They seem flexible and willing to expand and take advantage of their relative position during the pandemic. This is a stock that has little downside risk and significant upside potential. It is always reassuring to me to know that at the end of the day, a company is using its profit to continue to grow.
HEADWINDS
New Administration – This is more of an unknown than a headwind. The Obama Administration was not light on military spending, and the newly appointed SecDef is unlikely to shy away from modernizing the force. Military defense budgets may get lost in the political shuffle, but nothing right now suggests that defense budgets are on the chopping block.
Macroeconomic pressure – The markets are tumultuous in the wake of GME. Hedgies are shaking in their boots, and scared money weighed on markets the past week. If scared money continues to exert pressure on the broader equity markets, all boomer stocks are likely weighed down by slumping markets.
Non-meme Status – The stocks that are impervious to macroeconomic pressures in the above paragraph are the stonks that we, the people, have decided to support. From GME to IPOE, there is a slew of stonks that are watching and laughing from the green zone as the broader markets slip deeper into the red zone. Unless sentiment about LMT changes, I see no evidence that LMT will remain unaffected by a broader economic downturn (despite showing growth YoY during a pandemic).
TAILWINDS
Aerojet Rocketdyne to the Moon – Cathie Wood opened up a $39mil position in LMT a few weeks ago, and this was near the announcement of ARKX. The big ideas 2021 article focuses heavily on satellite technology, deep learning, and HGVs. I think that the AR acquisition suggests that vertical integration is a priority for LMT. They even fielded a question in their earnings call about whether they were concerned about being perceived as a monopoly. Their answer was spot on—the USFG and DoD have a vested interest in the success of defense companies. Why would they discourage a defense contractor from vertical integration to optimize margins?
International Tensions – SolarWinds has escalated US-Russia tensions. President Biden wants to look tough on China. LSCO is a DoD-wide priority.
5G.Mil – We still do not have a lot of fidelity on what this looks like, but the military would benefit in a lot of ways if we had world-wide access to the rapid transfer of encrypted data. Many units still rely on Vietnam-era technology signal technology with abysmal data rates. There are a lot of implications if the code can be cracked to win a DoD 5G contract.
TRADE IDEAS
Price Target: LMT is currently at a P/E of ~14. Verizon has roughly the same. LMT’s 5-year P/E ratio average is ~17. NOC is currently at a P/E of ~20. TSLA has a P/E Ratio of 1339 (disappointingly not 1337). P/E is a useless metric because no one seems to care about it. My point is that LMT makes a lot of money, and other companies that are valued at much higher multiples do not make any money at all. LMT’s P/E ratio is that of a boomer stock that has no growth potential. LMT’s P/E is exactly in line with the Aerospace and Defense Industry P/E ratio standard. LMT’s new CEO is pushing the industry in a new direction. I will arbitrarily choose a P/E ratio of 30, because it is half of the software industry average, and it is a nice round number. Plus, stock values are speculative and nonsense anyway.
Share price today: $321.82
Share price based on LMT average 5-year P/E: $384.08 (I see this as a short term PT, reversion to the mean)
Share price with a P/E of 30: $690.26
Buy and Hold: Simple. Doesn’t take much thought. Come back in a year or two and be happy with your tendies (and a few dividends to boot).
LEAPS Call Debit Spread (Based on last trade prices): Buy $375 C 20 JAN 23 for $26.5, Sell $450 C 20 JAN 23 for $12. Total Cost $14.5 for a spread width of $75. Max gain 517% per spread. Higher risk strategy.
LEAPS: Buy $500 C 20 JAN 23 for $7.20. Very high-risk strat. If the price target is hit within two years, these would be in the money $183 per contract for a gain of 2500%. This is the casino strat.
SOURCES
https://www.lockheedmartin.com/en-us/news/features/2020/james-taiclet-from-military-pilot-to-successful-ceo.html
https://www.warren.senate.gov/newsroom/press-releases/in-response-to-senator-warrens-questions-secretary-of-defense-nominee-general-lloyd-austin-commits-to-recusing-himself-from-raytheon-decisions-for-four-years
https://news.lockheedmartin.com/2019-08-30-Lockheed-Martins-Expertise-in-Hypersonic-Flight-Wins-New-Army-Work
https://www.lockheedmartin.com/en-us/capabilities/hypersonics.html
https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK%E2%80%93Invest_BigIdeas_2021.pdf?hsCtaTracking=4e1a031b-7ed7-4fb2-929c-072267eda5fc%7Cee55057a-bc7b-441e-8b96-452ec1efe34c
https://www.deseret.com/2018/6/19/20647309/twitter-reacts-to-trump-s-call-for-a-space-force
https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2021/fy2021_Budget_Request_Overview_Book.pdf
https://www.airforcemag.com/lockheed-receives-up-to-4-9-billion-for-next-gen-opir-satellites/
https://spacenews.com/northrop-grumman-gets-2-3-billion-space-force-contract-to-develop-missile-warning-satellites/
https://www.lockheedmartin.com/en-us/capabilities/directed-energy/laser-weapon-systems.html
https://emerj.com/ai-sector-overviews/lockheed-martins-ai-applications-for-the-military/
https://www.defenseone.com/business/2020/07/new-ceo-wants-lockheed-become-5g-playe167072/
https://www.wsj.com/articles/defense-firms-expect-higher-spending-11548783988
https://www.etf.com/ITA#efficiency
https://s2.q4cdn.com/661678649/files/doc_financials/2020/q4/4Q20-Presentation.pdf
https://investors.rtx.com/static-files/dfd94ff7-4cca-4540-bc4b-4e3ba92fc646
https://investors.lockheedmartin.com/static-files/64e5aa03-9023-423a-8908-2aae8c7015ac
https://s22.q4cdn.com/891946778/files/doc_financials/2020/q4/GD_4Q20_Earnings_Highlights-Outlook-Final.pdf
https://www.fool.com/earnings/call-transcripts/2021/01/27/teledyne-technologies-inc-tdy-q4-2020-earnings-cal/
https://investor.northropgrumman.com/static-files/6e6e117f-f656-4c68-ba7f-3dc53c2dd13a

I want to preface that the contents of this post is for informational purposes. I do not condone or approve of any harassments or witch-hunting or the attacking of anybody.
 
Richard Lewis recently did a stream talking about the terrible state of CS esports and I thought it was an important stream anyone who cares about the CS community should listen to.
Vod Link here: https://www.twitch.tv/videos/830415547
I realize it is 3 hours long so I took it upon myself to create a list of interesting points from the stream so you don't have to listen to the whole thing, although I still encourage you to do so if you can.
I know this post is still long but probably easier to digest, especially in parts.
Here is a link to my raw notes if you for some reason want to read through this which includes some omitted stuff. It's in chronological order of things said in the stream and has some time stamps. https://pastebin.com/6QWTLr8T

Intro

• "The last month has convinced me, that we are going to be heading into a dark place for Counter-Strike esports in 2021."
  • "I think I've seen the scene essentially kill itself."
• "For the past 5 to 6 years, we've basically been in a holding pattern of people coming into our game wanting to run it, wanting to run all of the esports and wanting to profiteer and its been sort of a concerted effort to drive them off and push them away."
  • "We're spread way too thin."
• "If Riot don't get involved and stop the scumbags that have moved over to Valorant from getting their feet under the table, Valorant is going to have real problems."
• RL thinks too much has happened all at once for us to do anything except watch it play out, like:
  • Recent CSPPA strike against BLAST
  • ESIC failures and them not being supported enough
  • Teams cheating i.e. coaches/bugs
  • Widespread match fixing
  • The Pandemic
    • "People who try to hold bubble events are so incompetent and fuck up and people get the 'rona and its their fault."
    • "People who say Flashpoint is a bubble is full of shit and is a lie and people are now suffering for that lie."
      • "To save money they let people go home and break the bubble for a week."
      • "Not just Flashpoint peoples decision, they have a partner that handles the production." (hinting FACEIT)
      • "People are trapped in hotels essentially under house arrest because of COVID restrictions and has fucked peoples lives up."
• "It's all too much, all of this incompetence, all of this greed, maybe we ride it out."
  • RL says he has talked to the Riot devs (the ones working on Valorant) and says, "They are so cognizant of all the fuck ups and all the problems we have in Counter-Strike."
    • He continues to say that this is factored into their business plan and that we never had a competitor, but just so happens to have one coincide, when we are at our worst.

CSPPA - Counter-Strike Professional Players' Association

"Who does this union really fucking serve?"

• RL believes that the CSPPA is a mockery.
  
  • He points out the hypocrisy that they wouldn't strike for the pros who were kicked out of ESL Pro League, or for Jamppi or dream3r.
    • He also says ESL paid CSPPA and are racketeering and many other TOs have to pay them to get their "seal of approval"
      • He says they would strong-arm TOs saying "well if you don't give us the money, these guys are so we'll just have to commit to playing their event."
    • Also points out that they will strike against a competitor they are not in agreement with (Flashpoint)
    • RL: "It's what it says about every other time you haven't done it and it's about every time you don't do it now moving forward." "The issues they've chosen to ignore this year alone are embarrassing."
    • Then he points out that there was no strike for Valve qualifiers even if we have no major but Jamppi and dream3r can't play in them.
      • "and Valve have said 'Oh yeah we know actually their stories are accurate, Jamppi didn't cheat, now in a legally binding document. Yep dream3r did have his account hacked in a LAN café', but they still can't play. Where is the fucking solidarity? Gone. Doesn't exist. It's not important [because] it doesn't affect you." "That's what the union does right now, it looks after all the tier 1 people."
• He says the CSPPA doesn't represent all players all the time and has driven a divide where you have the haves and have-nots
  
  • "We have a tier of players that operate with impunity and do not help their tier 2 or tier 3 players out at all." "If you are not a tier 1 player you do not matter, they don't event ask your opinion."
  • He tells chrisJ to admit and own the fact that the reason he didn't speak up during the ESL Pro League debacle is because it didn't affect him
  • "They are looking after some players at the expense of other players. How the fuck is that a union?"
• He says the BLAST situation is a reasonable dispute and supports the players but is not the right time for a strike and have not even identified the correct enemy
  
  • He thinks players are lashing out now due to previous incidents and are upset that BLAST are working with ESIC
    • He stated that CSPPA shouldn't beefing with ESIC and they should be working in harmony
  • He says what they need to do is talk with the teams/organizations that have sold that right to BLAST
    • RL: "Your employers, the people who pay you that massive exorbitant salaries, when you don't stream and you don't do interviews and you offer no value beyond your ability to click heads and you get 25k dollars a month." "Why don't you talk to them about it? Oh right. You're happy to take away BLAST's paper, but you don't want to risk your own."
  • "I am seeing such unbelievable cowardice from the players here with the battles you choose."
  • "Where was the strike action when in the qualifiers for the world championship, there were teams and players engaged in huge conflicts of interest?" "Where was the strike action when your image rights were taken and sold to every league you've ever been in every union type organization you've ever been associated with like, WESA, to your org every time you sign a contract, to the leagues you play in."
    • "Your image rights are essentially worthless now, there's about 10 fucking separate parties that have them, and how many of them are giving you anything for it? Not much pretty much your org by the way."
    • "That's a big issue. Your image is you, your image is your brand. What are you doing about that? Nothing."
• He is also angry at SirScoots who is "popping off" at people on Twitter who all want the same thing, which is 'A unified Counter-Strike scene for everybody, that works for everybody, that has a sustained ecosystem that nourishes everybody.' "We don't have that now."
  
• He also says their rankings are a joke
  
  • "Just so happened, oh look TACO, that very important prominent member of the board, we pushed his team artificially up when they weren't even in the fucking top 20, not by a long shot."
• He also says the ineptitude of the CSPPA cost Flashpoint a monitor sponsor
  
• "Is it really a player association or is it like a fucking agency at this point"
  

ESIC - Esports Integrity Commission

"They have been put in an impossible position."

• RL says that Ian Smith, the founder of ESIC and who was done work in mainstream sports, is a good and honorable man who has dedicated his life to integrity and sports. He takes on both sides, ensuring match fixers are punished, but also doing appeals and ensuring those punishments were fair.
• "ESIC is a tiny organization" and are in need of money, "They didn't run a grift like the CSPPA did."
  • "Saying 'you want our support and you want the players to turn up you better pay us.' They don't do that."
  • "Had startup seed money from MTG and since then they've been pecking shit with the hens."
    • Ian Smith made sure that the money given by MTG (Modern Times Group, parent company of ESL, ESEA, DreamHack) was nothing more than startup money and wouldn't be in debt to them
      • Ian Smith sat down with other TO's not part of MTG and wanted to partner with them. They declined and called ESIC "ESL spies and we will never align ourselves with you"
  • "They only were just able to afford, hiring a PR guy on a full time salary to deal with the press and send out those releases you've seen, this year."
    • "They have a tiny group of staff investigating these things and they have taken on the biggest problems in our scene: the cheating, the match fixing."
• ESIC have had "unprecedented levels of cheating to deal with, because there's something wrong with our scene ever since we went online. There's something wrong with it, everyone's lost their fucking pride and self-respect and they got no passion for it anymore, so they think fuck it, what's in it for me?"
  • He calls out coaches who are talking about players rights when they would rob and steal from them.
    • Also says more coaches being banned are coming
    • He also points out flaws in community's reaction to the punishments to coaches bans: "Half of the cunts still have jobs and some of the cunts got new jobs. We didn't even shun the cheating coaches."
• ESIC have "found I think another 2 or 3 exploits like that one and they are investigating them all right now, it's going on right now."
  
  • "I know that there are going to be more names getting banned, again."
  • "So they're doing that on a skeleton crew while, investigating 3 continents worth of match fixing in MDL and semi-pro level CS." "They're doing this with half a dozen people." "They don't have any money or any help. People barely even fucking cooperate with them, they are treated like pariahs. It's ridiculous."
    • "Why are the CSPPA popping off at ESIC on my Twitter timeline, when you should be working together." "because its all about what's in it in for me." "2020, the online era of CS: 'What is in it for me?' How can I cheat, how can I get my paper, how can I bleed this scene one last time before I fuck off and play shooty shooty bang bang Riot Games babys first fps."
• RL says that in the CIS region, teams have gone to tournaments and have been eliminated multiple times by the same team. We found out they were cheating and those players who lost, have been cut from their roster, careers ended because of cheaters.
  

Stream Sniping

"They're all at it in the online era, they're all at it, they're all cheating, they're all using exploits, probably that see through smoke bug got used a bunch of times"

• RL talks about how there is no integrity from dead (the player), always denying when caught doing something
  • On the topic of 'BLAST never said we couldn't stream snipe': "Lies, BLAST never said you could do that, they had to sort of retcon it." "because what happened after that they fucking started snitching and squealing"
    • "Suddenly you had like, 10 of the top 15 teams in the world, staring into the abyss of being banned for 6-12 months in line with ESIC recommendations."
      • He says that ESIC was put in a tough situation and couldn't enforce the bans because it would have resulted in killing CS. What resulted was, BLAST, ESIC, and teams came together and gave them a warning and told them, in RL's words "don't do this again or you're gonna get got."
        • He then says the top teams brushed this off and didn't give a fuck
        • The new MiBR team playing Flashpoint, that wasn't involved in the previous incidents are doing it again (stream sniping). He gave credit to Flashpoint for the quick resolution and punishment and respect for cogu's response to the situation.
        • "ESIC came out and said, once more, 'Guys, zero tolerance from now on.'" RL then got upset at community's reaction calling ESIC "pussies" for their non enforcement and said if we want competitive CS we cant ban the top 10 teams.
• He points out how players have no integrity and will do anything for an edge as long as they won't get detected or banned or it's within a grey area.
• "All of this shit was mad avoidable, even in the pandemic era."
  • He talks about why aren't we filming them. Why aren't there representatives for leagues and tournaments making sure players aren't cheating?

Match Fixing

"How many years have we let our scene be fucking pillaged by these greedy cunts?" "We just let it happen."

• RL says that gambling and skins betting which existed in moderation was "accelerated and blown up by the Call of Duty greedy fucks."
  • "Never forget TmarTn was on the board of EnVyUs." "His website, CSGOLotto, they had a bunch of off-the-books sponsorships." "NBK promoted them. People forget."
• "Those people who had access to the skins, go to the players" "Even people like s1mple, best player in the world, even he scammed knives and skins off fucking fans."
• Owners of skin casino sites would approach pros and lend them skins to use in tournaments and possibly keep them after reaching a deal
  • Players would tip off inside info about matches and teams in exchange for skins. Info such as: roster changes, how they played in scrims
    • They would use this info to bet and subvert the odds on their sites. "That happened religiously, I can't even tell you how many times it happened."
      • "I had access to the biggest database of information, from an inside betting circle in NA, and it would take information and screenshots from other pro players, who were feeding them info in exchange for money or skins."
        • "Some of these players are still playing." "Incredibly, there are players still in the CSPPA today, complaining about the BLAST recordings, that were embroiled in this murky shit back then."
• RL also says that there were tournaments where teams contrived with each other, who should throw, who should win.
• "There's a handful of people that are trying to fucking clean it up, and you think you get something over the line and you see something like the CSPPA and it's run by corrupt fucking chuckle heads, and now you've got another corrupt body you have to fight on a fucking daily basis, it's demoralizing."
  • "It's too far gone. Our entire semi-professional scene is compromised."
• "It's rife guys, I'm not going to lie any more. It's not just China, it's not just Russia, it's here, it's NA, it's Europe, it's Australia, so much more than you think, so much more than we can prove."
  • "I get sent chat logs all the time […] and they're morons, these players, short-sighted, amateur, morons and they're doing it on WhatsApp." People would get cut from the bets because they want to make more money, then they leak the logs. He says, from the chat logs, they spread "little" bets across every site they can (400 to 1k dollars) to prevent shifting odds
• He says the scumbags who've fucked off to Valorant will do the same there if Riot doesn't do something and says Valorant "is an esports scene heading for a very early fall based on the sheer volume of scumbags that are already there."
• "That's tier 2 CS in a nutshell these days. They know they're never going to play in a major, so what's the punishment?"
  • "All of these tier 2 fucks that are fixing games now they are like the fucking mafia compared to iBuyPower" "These guys are working with organized criminals to fix entire seasons worth of games. That's what's going on in your tier 2 CS."
• "I'm literally being told that there are players fixing games at all levels of Chinese esports and motherfuckers with guns are turning up to team houses and stuff."

North America

"Everyone in NA has left we've lost a continents worth of support during this pandemic and Valve haven't said a fucking word."

• RL says the Call of Duty "goblins" that destroyed CS for years are the same people who are now trying to leave CS. "The nerve to treat a game where the fans, and the community, and the TO's were nothing but good to you." "To just kick the players out now and go and leave and say 'It just doesn't make financial sense.' Oh you'll slither back when we have a major though for them stickers won't you."
• There's a cascading effect in NA where people don't bother with CS anymore and people like Chaos suffer.
• He says NA team owners are incompetent for always wanting it easy and always wanting a guarantee on their investment without skill or nuance.
  • RL says he would be able to market a team correctly and would have a good ROI and also points out how TSM wouldn't even be bothered to tweet that their team, which was one of the best in the world, was playing at the Major.
  • He also says not all NA owners are like that, compliments and respects Jason Lake who nearly lost everything to keep Complexity going.
• He then calls out the incompetence in Infinite Esports when they acquired OpTic Gaming and bought an Indian CS team.
  • He says HECZ is not to blame here and that they couldn't tell forsaken was cheating when it was so obvious.
    • They measured his reaction time to the likes of dev1ce and s1mple
    • When an enemy showed up on his screen he won that duel something like 44% of the time
    • "was like the number 1 player in the world statistically"
    • He brought a laptop to their bootcamp and refused to use the high end PCs that hey provided
• He respects Andy Miller (NRG CEO) and HECZ but says that the attitude of not being able to easily monetize their teams is "piss weak" and there needs to be a risk.
  • He says Chaos EC shouldn't be cutting their roster and should be competent enough to be able to figure out how to make money off their team.
• He says there are still opportunities in NA and people are panicking and pulling out, and says Valorant will be the same if not worse.
  • He also says "bums" who couldn't even get out of groups in NA competitions, are making crazy money in Valorant and says it will continue to inflate.
• He also said that he heard rumors that EG (Evil Geniuses) are done.
• He also thinks that the rumors of a Valve franchised league from before was sparked up from "these lazy fabled weak NA fucking team owners basically trying to see if Valve would bite at the hook if it was dangled and they didn't"
  • Slasher says NA team owners are really in favor of franchised leagues because they want to make more money. "Most of the powerful team owners right now are on board with ditching this third party organization structure, or they are trying to play this power politics with all the TOs, and that is contributing to a lot of the problems there"
• RL says that Riot has proved they can run a franchised league (LCS) and will be profitable in 2021 which is what a lot of team owners care about and says the competition will only serve to snatch people away from CS.
• RL continues to say, "I am so sick and tired of what we have done to this scene, I am just exhausted with it." "I think we have legitimately fucked it, I really think we have. I think we're staring into almost like a CGS (Championship Gaming Series) wasteland in NA." "Counter-Strike esports is a fucking joke."

Talent

"TO's have treated CS talent like absolute human garbage for years now."

• RL says that people like Sean Gares and ddk switching over to Valorant isn't for financial reasons because they are making less over there.
• He points out that TO's can't even give talent a 3 month in advance calendar.
• Because of the pandemic TO's won't hire certain people and some people are working more hours for the same money.
• He says we as a community don't respect journalists enough which is why we don't have good journalists.
  • He also says DeKay is leaving the scene soon and that Thorin is close to leaving also
• He says he had to talk a caster down from quitting and was struggling to find reasons.
• He says that DreamHack told Vince they would hire him but not if he wants to stick with dusT and says that this is the norm in esports. "Constant leveraging of people against each other." and says this is why we don't have a talent union.
• New gen casters are getting put into shit situations and the community's reaction to them is adding fuel to the fire
• He says the reason Moses left was because of the terrible conditions
• He says that Anders had to constantly leave his family and kid because someone fucked up or broke promises and had to constantly tell his kid to their face that "daddy can't be home this weekend."
• He says that esports has always been a lie to sell you this dream, "Meanwhile there's about 2% of the cunts getting all the checks."

Valve

"Anything that Riot does, is better than Valve's inaction"

• Slasher says that the larger aspect of esports as a whole compared to other entertainment mediums and Valve's lack of inattention are the bigger problems. He continues saying that the fact that Valve let their game be ran as an esport, they need to take on the responsibilities of it.
  • Both Slasher and RL wants Valve to take control but not on the level of Riot Games, there needs to be a balance.
• In case it was ever a question: Gabe Newell has been to 0 CSGO Majors.
• RL calls Valve out saying they could have done something during the gambling era.
• He says Valve used to come to the majors, but doesn't think they do anymore.
• RL had met with Valve at the Cluj-Napoca Major and had tried to appeal iBP's indefinite punishment and had also gave Brax's life story:
  • A recent family member passed away, they had lost a lot of income, they had to live in trailer, iBuyPower did not pay any salaries, and was pressured by family to make money who didn't support his career.
  • RL said that Valve told him, "How dare you try and make us feel guilty." "We shouldn't feel bad about enforcing the only thing that matters that we need to make players afraid of: cheating and match fixing"
  • RL also tried to share other info about match fixing and nothing came of it
• RL points out that Source 2 or a new engine is not something you will want based on the experience of transitioning from CS 1.6 to CS:S. "Valve's track record with brand new engines being launched, not fucking great from what I remember."
• Slasher says "If there is anything the community should do, is pressure Valve to hire a community manager."
  • They say that we need a commissioner, a community manager (not the person who runs the Twitter who posts memes all day), then we need to have a circuit
• RL reiterates that Valve doesn't care about CS esports and says they need to change the culture at Valve to make them care about CS esports
  • Slasher says a systemic problem is making it so working on CSGO would be a bad decision for you as an employee for Valve
• He also hasn't talked to Valve in ages and have sent over bugs and cheats and doesn't get emails back anymore
• Slasher says we should be directing attention at the developer leads, pointing out Ido Magal, if he even is still the project lead
  • RL thinks that Ido and Brian are the only people that "vaguely even give a fuck about CS" and were the only people that RL recalled that actually read Reddit and paid attention from time to time
• "It is really fucking precarious. Somebody has got to step the fuck up and start giving a shit"
  • Slasher suggests org owners, with CSPPA, with ESIC, with TOs have a concerted effort against Valve
• "Riot Games are doing better things than Valve in the esports space" which is something RL didn't think he'd say.
• "People who used to be talent, working with unions, arguing with other talent, when the unions fucked them over, can't understand their perspective, TOs fucking over broadcast talent, broadcast talent wanting to leave and go and work for orgs, orgs having no money, Valve might take coaches away because all the coaches are cheating, ESIC has about 4 people in a fucking call doing the investigations, everyone thinks they're spies for ESL, ESL are just the evil fucking overlords wanting to rule the scene and will just somehow, like cockroaches outliving a nuclear bomb, and Valve are in a fucking holiday in Hawaii thinking about the next Dota character because they don't give a fuck about us."

Closing Statements

"We've peaked. If we want to sustain and exist, now is the time to figure it out. No esports lasts as long as this, we've already done 8 years. We've already broke the records. We have got to figure out a way to coexist and drive the negative forces out and we need to do it as a collective and we're not doing that."

• RL compared the Counter-Strike scene to the people on the Titanic who ran around with guns robbing people while the boat was sinking.
• "We have given up on being a respectable esports scene." "We are now a conduit to make money for those who want to just milk it, just have one last ride, one last roll of the dice. It's done." "What a fucking mess. What have we done to our fucking scene?"
• "There's just too much self-interest driving all of this." "I don't see a way we stop the dominoes." "When it's that bad, when there's that many dishonest people that ESIC have to come out and say that if we punish them all there's no one left. What does that tell you?"
• "How many opportunities have we had to clean house? How many times have we said, 'this must never happen again', and another scandal." "The entire skins betting operations was the biggest criminal conspiracy in esports ever executed and no one has been punished for it." "The people who could be driving that don't want to."
• "Right now people are fans of those organizations because the scene has value. It is worth being a fan of Astralis because they are excellent at Counter-Strike. It is worth being a fan of s1mple because he is the best player in Counter-Strike, maybe the exception of ZywOo. If the scene is devalued, if the scene loses its meaning, those things lose its meaning too, and people will leave, people will stop tuning into the games. I have seen it happen in multiple esports, this is not my first time at the rodeo. I am getting big Brood War vibes right now and I don't like it."
• "The role you play in all of this as fans, as viewers, as listeners, as consumers of esports content, it's absolutely imperative that you know who the good guys are. It's absolutely imperative that you use your voice. It's absolutely imperative that when things are bad, you know who, at least, is trying to make them good, and you have to apply your criticism to the right targets."
  • He continues saying it's no good in continuing to attack ESIC and saying how they are bad, ESIC have it hard
• He says CSPPA are on the right side of the argument on BLAST but have been on the wrong side of many arguments many times.
  • "If you are not willing to stand along side the weakest member of the union, with the least amount of influence, and the least amount of power, then it is not a union at all and you shouldn't pose as one." "You wanna serve a bunch of special interest do it, everyone else in esports fucking does, but do not pose as something you are not." "We love the players. I've been fighting for players rights for as long as I've been able to, but the CSPPA is not what we needed."
    • "They are not applying the pressure to the right people, they are not fighting the right battles, they are not helping their weaker members."
• He says what orgs have done by keeping or hiring coaches is bad. "When you give up on holding an appreciable standard, you've lost the scene" "Competition matters, rules matter, punishments matter, achievements matter, excellence matters" "If you start stripping that away, you have nothing" "You guys need to take that knowledge and apply it sensibly."
• "Valve has sold you all down the river, they sold everyone in the esports scene down the river, tournament organizers are selling their talent down the river. Don't hate on them for sounding tired after a 16 hour day. Don't hate on them because the hype for a matchup they've seen for the 20th time in the past 3 months, they can't be as excited or it sounds contrived. Support your guys, they're there for you, these are your people."
• "This community has got to start acting like one for the first fucking time. Just put the petty shit away, let's try and fix this fucking scene while we still have one to save."
• "You can't rely on Valve, you can't rely on ESL, you can't rely on the CSPPA, you can't rely on anyone." "Once again, it's gonna be the likes of us, the amateurs, the people who give a fuck, rolling up our sleeves and grafting." "I'm old and tired and I don't want to have to do it again. People need to pick up the torch and do it."
  • "Like Michal did, like Dudenhoeffer did. You see something wrong, fix it. You see somebody doing something wrong, call it out. If you think something could be better, let people know."
• "Vote with your wallets if you're not happy with the direction Valve goes in. If when we do get to the Major, they serve up another subpar, same old bullshit stickers and signatures package again, do not buy it."
  • "You're a powerful block and if you use it correctly we can fucking avert this disaster."
• "I'm not doing another year in this broken, bust-up fucking scene, where everyone is miserable, everyone is broke, everyone is tired, and everyone is trying to fucking rob everyone else, blind, while the fucking people who are meant to be protecting you, are just fucking enhancing it and lining their own pockets."
  • "I'm not doing it anymore and you shouldn't want to do it either."
• "I stand by every fucking thing I said. I mean it, because this game fucking matters to me, this scene fucking matters to me. I put my life into this, my adult life, and to see it in this state is fucking sad."

Hello everyone! I have only been on Reddit for a few months but I learned so much from it that I figured I should try and give back to the community. English is my second language and this is the first time I ever write a full-length article, I hope you will enjoy reading it and I would be very thankful if you could provide some feedback about my writing, about the topic, or about anything else really… So here goes!
Why you should learn poker and game theory:
My story is similar to that of many: I learned about the game 10 years ago (during the golden age of online poker) when some friends of mine invited me to play a home game. Although I initially thought of poker as just another game of chance akin to playing slots or roulette in a casino, I quickly came to realize that there is a lot more to it as my more experienced friends would repeatedly get the best of me during these home games, which led me to start watching videos and reading strategy books to improve my skill… Little did I know it’d be the start of a journey that would impact many different aspects of my life way beyond the game itself, as most of the fundamental principles learned through poker can be applied to your decision-making outside of the game, especially when it comes to money management and investing. Now, let’s dive into a few of these principles:
​
- Risk management (i.e. Bankroll management)
When learning about how to be successful playing poker, the first big piece of advice most people come across is bankroll management or BRM. To understand BRM, you must first realize that poker has a lot of variance: you might be vastly ahead in a given hand but there is almost always a slim chance that you will lose in the end if one specific card hits. This implies that you will sometimes lose even though you were a 99% favorite, and that you will sometimes get unlucky and lose 2, 5 or maybe even 20 such encounters in a row. THIS is variance. It doesn’t mean that you played bad or that you made bad decisions, but rather that you got unlucky. Over time you will have lucky streaks and unlucky streaks, and these will average out in the long term… It’s just the way the game goes.
Now that we understand variance, let’s get back to BRM. What is it exactly? Let’s say you are the best poker player in the world but you only have 1000$ that you can EVER use to play with. Taking your whole 1000$ on one table and multiplying your stack at an exponential rate might seem like a good idea. Surely nothing can go wrong since you’re the best player in the world right? But variance can be a bitch ;) Even if you’re the best you will lose regularly and you will sometimes get unlucky, it’s just part of the game. The correct move here is to apply BRM, which means only using a small % of your available capital for each game you play in order to reduce the risk of going broke. Using only 100$ per game would already be a lot safer, but you still run the risk of going under on a streak of bad luck. If you only allocate 10$ per game you play, then it becomes virtually impossible for you to ever go broke, even on a huge streak of bad luck. Sure it’s not as exciting and you won’t be making money quite as fast as you could, but this is the way to go to make sure you don’t go broke…
This approach to risk management translates very well to investing:
- Only invest what you can afford to lose. Once the money is on the table it’s as good as gone, which is why you should only use your “spare” cash and never invest with your living expenses or worse, borrow money to invest.
- Diversify your investments. There is always a chance, however slim it might be, that you will lose most of your investment. This is why going all-in on a specific investment is generally a bad idea (this applies particularly well in the crypto space).
Proper BRM allows you to make sure that you will come out ahead in the long run if you play well, which basically comes down to making more good decisions than bad ones. But that’s assuming you don’t let emotions come in the way of your decision-making, which brings us to our next point…
​
- Emotional management (i.e. Handling tilt/Positive mindset)
Nobody likes losing… In the same way we enjoy winning because of the dopamine rush, we feel bad when we lose which is totally natural. Overcoming this and avoiding tilt (irrational decisions made out of angefrustration) is an essential skill for any successful poker player. You might play a sound game of poker and apply good BRM, but you will still lose if you let your emotions get the best of you.
After a loss, rather than being angry and frustrated, you should evaluate your decision-making. If your decision-making was good, you just got unlucky and you shouldn’t worry about it since you are playing for the long run (remember that variance teaches us that anything can happen in the short-term). If your decision-making was bad, you need to learn from your mistakes and move on. The key here is to always have a positive mindset: making mistakes is part of the learning process and should be seen as an occasion to improve. Being angry and ranting, on the other hand, rarely result in anything positive.
Again, this translates very well to investing:
- Don’t be impulsive, don’t let your emotions cloud your judgment. You should not FOMO because the price is pumping, nor should you sell because of FUD or price corrections. If you believe in a project, short-term price changes (did I hear someone say “variance”?) shouldn’t bother you.
- Don’t get stuck up on losses. You bought the top and it crashed immediately after? You sold the bottom right before a huge rally? Don’t let this bother you: what’s done is done and you just need to move on and make the best of your current situation.
- Have a positive mindset. Anger and frustration lead to nothing. Yes you could have bought in 2009 when you first heard about it, hindsight is always 20/20. Stay positive and keep learning/improving yourself.
The good thing about all this is that it goes way beyond poker or investing. Being aware of your emotions and how they affect you, learning how to handle losing even when you were “supposed” to win, etc… All this can tremendously help you in all aspects of life by making you less impulsive and more rational in your decision-making. Now, this leaves us with our last fundamental principle of a sound poker strategy:
​
- Basic stats and probabilities (i.e. Expected value/Odds)
To become an accomplished player, you will inevitably have to learn about these simple mathematical tools that poker players use all the time in their decision-making process, such as odds and expected value. To make it very simple, the expected value (EV) of any bet is (REWARD \ WinRate - RISK), meaning that if you can bet 1000$ with a chance to win 10k$ half of the time, your EV is *(10000\0.5)-1000 = +4000$**. Obviously these are great odds to take as long as you have enough capital to overcome variance. But things would be very different if the odds of winning were only 5% as your EV would then be negative *(10000\0.05)-1000 = -500$.*** Now this is clearly a bet you should not take…
Now that you know probabilities, statistics and game theory are useful decision-making tools in poker, guess what? They are also extremely useful in investing! Even better, the study of game theory with problems such as the “Byzantine generals” or the “Three prisoners” has been, along with cryptography, the foundation on which blockchain technology was built, enabling the trustless and decentralized services that are about to revolutionize our world…
Assuming this was enough to pique your interest and make you want to dig deeper, I’ll just add that just like the other topics we discussed and as you might have guessed, this translates very well to investing and also to pretty much anything in your life:
- Learn how to break down complex situations. Logical thinking paired with a statistical approach will help you break down any complex problem into several easier problems, making the whole thing a lot easier to approach/comprehend.
- Base your decisions on a methodical and rational approach. List every possible outcome along with its associated upside/downside, estimate the probability of each outcome to occur and make the best decision based on the information available.
My point here is that risk management, emotional management and statistics/game theory are all awesome tools that you should definitely add to your arsenal. Not only will it improve your money-management and investing, it will also be beneficial to your decision-making and to your life in general. Of course poker is not the only way to learn about these, but I personally found it to be the best practice ground to refine and improve them, which is why I strongly encourage you all to try it out and study the game.
I hope you enjoyed the article, and I wish you all a happy 2021 bull run! May we all come closer to retirement and financial independence!
​
TL;DR: more than a game, poker is a school of thought. It teaches you to be reasonable, to assess the risk of every single choice you make, to overcome you emotions, to play the long game rather than the short game, to make informed decisions, etc… This has made me a lot wiser in every aspect of my life, which is why I strongly encourage to try it out and read about poker strategy.

Alright you smooth brain degenerates, here’s some shit I’ve learned along the way which probably wont help you but if it even remotely helps one of you, then I have achieved the goal of this post.
To quote that old guy: price is what you pay, value is what you get. But how do I value a company? I’ve seen it posted a bunch of times. Its more of an art than science, so let’s discuss this dark art.
It constantly boggles my mind at how many cunts dive into buying shares but do not even attempt at trying to think of a realistic valuation, backed up by some sort of financial measure. “What price should I exit at” is almost the equivalent of setting off on a road trip before you have decided on a destination. I accept this view could, and should, evolve over time so asking the question in itself is not unreasonable provided you have your own view. I know this is a casino and this shit is irrelevant for gambling but I’ll continue regardless.
One thing I also see a lot of which I’d like to debunk is the concept of a $5 share price being “cheaper” than a $6 one. Companies, at IPO or any time afterwards, can make their share price whatever they want. A market cap of $100m with 100m shares gives a SP of $1. If they issue less shares, the share price goes up, and the company’s equity value has not changed. Likewise when you do a stock split / consolidation you can adjust the per share price without changing the market cap. If this doesn’t make sense, get off this sub and do not invest in anything until you grasp this, seriously. The concept of “cheapness” comes from the amount of cashflows you expect to receive for a given price. As Wu-Tang told us; C.R.E.A.M. literally all we care about is cashflow, so keep that in mind when you’re thinking about future value as well.
Before I launch into valuation, there needs to be a high-level understanding of the difference between equity value (share price, market cap) and firm/enterprise value (market cap + net debt). You should also adjust firm value for minorities and associates, but let’s keep this as simple as possible. This is relevant when looking at ratios.
The other thing to understand is: valuation (and therefore share price) is a forward-looking beast. If you imagine the hypothetical situation where a company announces a record earnings year in conjunction with a plan to cease all operations, share price would obviously tank – no one gives two fucks that they had a record year if they are closing next year.
Let’s dive in. Broadly, there are two valuation methods: fundamental and relative.
Fundamental:
Few of ways to do this, but main one you’ll see finance cucks talk about is a DCF. This is all about calculating the NPV of future expected cashflows. People shy away from these because they think they are hard. DCFs aren’t complicated, but there are a shitload of subjective assumptions that go into them which, unless you’re prepared to think at a highly granular level about, these aren’t worth the paper they are written on. IRR is just the discount rate required to achieve a NPV of 0.
There’s other ways like dividend discount models but they require stable AF dividends to work.
Relative:
This is referring to multiples like P/E, EV/EBITDA, PEG, EV/FCF, P/sales etc etc. These are quick and dirty and will give an answer in seconds. They’re only truly useful when comparing similar companies. i.e “is afterpay good value compared to zip?”. Rarely will using one in isolation give you an accurate or useful view of a company.
Again, no one gives a flying fuck about what historical multiples are. So, the slightly nuanced thing here is ideally you need a forward-looking number. Historical numbers usually do provide the best guide/context available for future numbers, so we can’t say they are completely irrelevant, but always have your eyes on the road ahead, not in the rear vision.
Examining the P/E multiple, I touched on why historical ‘E’ could be irrelevant for major changes in operations (acquisitions, divestments etc.), but as the capital structure changes this can also impact ‘E’, so you would also need to adjust for any permanent changes in that regard. Point is, be wary of the traps in historical numbers, they’re the easiest to find but not always the most useful.
Generally speaking, people aim to use a denominator as low down on the income statement as possible, as its closest to what you receive as a shareholder. EBIT and EBITDA are sometimes used as a proxy for cash. Equity markets most commonly look to NPAT (P/E), however if its loss making you might need to go to EV/EBITDA, if its capital intensive you should look at EV/EBIT. Note that you use EV as the numerator for EBIT and EBITDA for capital structure neutrality. If it’s a meme stock with no EBITDA then maybe you are looking at a sales multiple, if no sales, well, you have to have a compelling thesis as to what you are buying if they can’t sell their products to anyone else. Some are industry specific (e.g you can’t use EV/EBITDA on a bank, and you wouldn’t value BHP on a P/sales or you’ll look like an idiot pretty quickly).
The higher the multiple, the more growth the company has to deliver on to justify the price. If two identical companies had different multiples, you could (sort of) fairly say that the higher one was “more expensive”. Given multiples change depending on growth (i.e in a company with positive growth, multiples decline the further you look into the future), it’s easy to then understand that these must be time sensitive. If you are comparing a multiple in 12 months time, it should only be compared with other multiples in with the same time frame.
Sometimes, if you can’t be fucked doing a heap of work it can be useful to reverse the question and ask, “what do I actually need to believe for a valuation of $x to be true?”.
Doubt anyone is reading by now so I’ll stop there. If there’s any interest in diving further into these concepts, shout out and I will gladly help. If all the fundamental shit gets you excited there’s a bunch of better resource out there, don’t trust reddit and go read Damoderan or something. This is a very brief intro, so before someone comments “you forgot to include bullshit method xyz that my great grandad used when he was doing a leveraged buyout of Dildos Anonymous Pty Ltd in 1969”, I’ll get in first and highlight it is not even close to being exhaustive.
Peace out and stay retarded. Here’s a rocket 🚀
TLDR; boring valuation shit discussed above. Not relevant to gambling.