Parchayi.com - Personal Finance Simplified

Blockbuster is now going to limit in-store exchanges to 5 movies per month - New Plan Structures - or you can pay 24.99 and get unlimited exchanges in a plan called “Total Access Premium”. This will make investors happy but subscribers unhappy. I was wondering what drove the stock up nearly 6% today and this is what it was.

It seems some people got an email from Blockbuster informing them of the changes (and allowing them to keep their original plan for the same price). I have yet to receive the email but my account shows this:

Your current plan…
BLOCKBUSTER Total Access Premium
$17.99 / month (plus taxes)
3 at-a-time, unlimited
unlimited in-store movie exchanges
+1 FREE bonus Movie or Game Rental E-Coupon / Month
Next Billing Date:
August 07,2007

So I do have Total Access Premium and it still says 17.99 a month. After a little digging around, I found that the new plans only apply to new customers. Phew!

Update:: Blockbuster Pulls a Fast One = No more Total Access Premium for me.

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Normally to find financial ratios, earnings etc. for a company, I just visit Yahoo! Finance and generally assume their data to be correct inspite of all the disclaimers. However this may not always be the case. Let’s take an example where things are really messed up at financial sites - e.g. BX - The Blackstone Group, which recently went public and I’m one of the many who actually bought some stock only to see it lose a lot of its value over the last few days but I’m keeping it.

Let’s take a look at what financial sites say about it’s earnings, P/E etc.

Yahoo! Finance - EPS (TTM) = 12.41, P/E=1.91

Google Finance (Reuters) - EPS (TTM) - NM, P/E=8.82

Morningstar - Data Not Available

MSN Money - EPS = 2.68, P/E=11.10

Scottrade - EPS(TTM) = -2.54 (yes that is negative)

Of all the above, I’d say Morningstar is the best since they at least don’t publish something they don’t know. No data is better than faulty data.

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Netflix - NFLX lowered forecasts for the year and said it lost subscribers for the first time ever (down around 55,000 while last year they added around 300,000). This should come as no surprise because Netflix did absolutely nothing to compete with Blockbuster Total Access. They just sat and waited for Blockbuster to raise prices. Instead Blockbuster responded by offering the same plan as Netflix (i.e. without Total Access) for a dollar less than Netflix. This has forced Netflix to lower prices too!

In the words of analyst Michael Pachter of Wedbush Morgan, “Blockbuster is kicking their butts, and they’re not used to that.” Not that Blockbuster is doing great financially, but unless Netflix comes up with something to compete with Total Access, Blockbuster has the upper hand.

What can Netflix do? As I have mentioned before, Netflix could open Kiosks. Or they could buy RedBox or just partner with Redbox to allow Netflix subscribers to return and rent DVDs like Blockbuster does with it’s stores instead of just waiting it out. On a positive note, at least Netflix makes money - unlike Blockbuster. However if the trend continues, the tides may turn especially if Blockbuster does something to improve their (IMHO fancy but not extremely useful website).

Update: I just discovered that RedBox is a joint venture by McDonald’s and Coinstar! Redbox used to use (now they use their own?) rebranded machines from DVD Play, who also operate Kiosks. We have some of these at most of our local grocery stores (Kroger, Giant, Harris Teeter). Now either or both of those would be a great partner for Netflix and DVDPlay could be an acquisition target for them.

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Tata Motors Ltd. (TTM) is going global. Just look at the recent headlines about the stock:

India’s Tata, Mahindra eyeing Jaguar, Rover: report - This is not necessarily something I personally support or like but as a part of global expansion, I would deem it ok.

Report: Tata Motors to Invest in Thailand

Tata Motors plant in S.Africa likely

Tata ventures into Saudi Arabia car market

Foreign shores beckon Tata Motor Finance

With this kind of explosive growth, the stock seems to be a great buy. Even with the 5% increase in the stock price today, the ADR trades at a modest discount (~0.7%).

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I just got a notice when I logged in to Wachovia, that one stop is being discontinued on Aug 22. One-Stop is where you can view all your accounts online in one place. I just called Wachovia customer service to complain and mine was the first complaint that they got. If you dont know what one stop is, it is exactly like Fidelity Full View. Click here for a screenshot.

This service is provided by a company called Yodlee and they do have their own similar free service too at Yodlee Moneycenter. The same service is also offered by many other banks and financial institutions.

Anyway it will probably be a PITA to enter all the information again. If you use one-stop, call Wachovia. If enough people call them, hopefully they will reverse their decision.

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Since my last post about Asset Allocation, I used a nice tool - Morningstar Instant Xray (I always assumed that this is a paid service but some parts are free) to get my asset allocation. It took a minute or two to get all the information needed and Morningstar did the rest. All that was required was all my holdings and dollar amounts in each holding. So it turns out that I’m quite close to the 60/40 US/Foreign allocation. However my portfolio is heavily weighted towards large caps. Large caps have been doing well recently but maybe it is time to move some of my funds into mid/small cap funds.

The X-Ray did not provide an emerging/developed breakdown but it is easy to see that for now my portfolio is heavily weighted towards developed markets. This is because since the last asset allocation post Parchayi and me acquired stock in Intel, Archer Daniels Midland, UPS and Blackstone. Time to make the next stock/fund purchase a foreign one, I guess. Also from the Xray, the cool world map below:

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