I’m an Arrested Development fan. I really did love those first three seasons and have watched them more than once. So it would make sense that I should be excited for the new season just out on Netflix. But honestly I’ve been more skeptical than anything else. 

I’ll chalk my skepticism up to any number of reasons. Seven years have passed since the series wrapped up which is a loooooooooooooong time. Part of the genius of the show from the beginning for me was the writing and I just have a hard time coming to grips with the new season being anything more than simply an effort to just get a few more episodes out.

I’m not one to pay much attention to critics, but when I read in The New York Times: “If you truly loved (the first three seasons of ‘Arrested Development’), it’s hard to imagine being anything but disappointed with this new rendition.” I realized that I was thinking that before it ever even came out. Oy…

I’m sure I’ll end up checking it out at some point or another, but it’ll be a while. I’m not even a Netflix subscriber. Netflix has nothing I want, so why subscribe to it? No, I haven’t seen House of Cards. I’ve been busy watching HBO. But this all leads me to my greater point that Netflix may want to seriously rethink their binge-viewing strategy as it could most certainly come back to bite them in the ass.

Here’s the thing: binge-viewing does work…for some shows. Older shows that have already been around the block are perfect for binge-viewing if that’s your thing. But if Netflix’s strategy is to develop more original content in order to differentiate themselves (and I agree with this move…they need to do something because they are becoming less and less special every day given the competition that’s growing out there), they are going to need to think about stretching out the lives of these things.

House of Cards is a good example. I’m sure the show is fine. It certainly received great reviews. But that’s over now. Nobody’s talking about it anymore. Anywhere. Viewers are going to have to wait until like next March to see new episodes. That takes the entire life out of the show as far as I can see it. It was like a season in a week. Doneski.

Now an example on the other end of the spectrum: Game of Thrones (or we can go with Breaking Bad, Sons of Anarchy, American Horror Story, Boardwalk Empire, Downton Abbey, you get my point). These shows are living long and healthy lives as linear shows on a weekly schedule. Of course you can binge-view older seasons. You can also just wait for the stuff to eventually come out on Netflix or Amazon Prime or iTunes. But Game of Thrones et al are shows that I would argue actually benefit from the linear schedule. It gives them (hence their developers) longer lives; it keeps people interested and in tune longer. People talk about these shows every week in my office. House of Cards not so much.

If I can watch all of Arrested Development in one night, then BAM! It’s over. One freaking night and an entire season of original (and not cheap) content is done. So what this potentially leads them to is having to produce more stuff. A lot more stuff. And it costs a LOT of money to produce a lot of stuff (at least stuff worth a shit). This works out great for subscribers because hey, they’re getting more stuff and paying a measly $7.99 a month. But investors may be getting the short end of the stick here. The company will issue more debt to produce more stuff and when they release it all at once then they’ll need to make even more stuff. Again, great if you’re a subscriber paying $7.99 per month. But I’ve got zero interest in investing in Netflix. And by the way I am calling it now; they will be issuing more debt within the year.

Netflix needs to do two things in my estimation (and that may not be all). It needs to start seriously thinking about how it can raise prices and it needs to seriously rethink releasing all of their original content at once. It’s just a nasty pace to have to keep up with and I wouldn’t want to count on being able to do it indefinitely. Again, great for subscribers; but scary as hell for investors.

JMo

It wasn’t all that long ago (March 2013) when Tiffany came out with earnings and guidance that were, well let’s say less than stellar. Here’s a link to that March release:

http://investor.tiffany.com/releasedetail.cfm?ReleaseID=750362

The market didn’t react one way or the other to this one. A couple of excerpts from that call (transcript courtesy Seeking Alpha):

Patrick F. McGuiness, CFO: “We believe that the sales and earnings growth plans that we have constructed for 2013 are achievable and the beginning of a turnaround from our disappointing 2012 results. However, we are not yet back to achieving our long -- longer-term objectives that continue to call for annual 10% to 12% sales growth and at least 15% earnings growth.”

Michael J. Kowalski, CEO: “Clearly, we were not pleased with Tiffany's financial results in 2012, which are not representative of how our company should perform in a more normalized operating environment. We faced more difficult-than-expected comparisons to some very strong sales results in 2012. We dealt with economic conditions in 2012 that were more challenging in some regions. We saw a pronounced softness in sales of entry-level-priced silver jewelry. And overall sales weakness led to a timing lag in realizing the benefit from a moderation in commodity costs.”

Much of what goes on in the market in the short-term is very much an expectations game. Here’s the link to Tiffany’s earnings release for 1Q2013 today:

http://investor.tiffany.com/releasedetail.cfm?ReleaseID=767431

Earnings of $0.70 per share (excluding items) on sales of $895 million smoked expectations of $0.52 per share on sales of $855 million. As such the stock is on an upswing today and based on when I bought shares in my TMF real money portfolio back on June 19, 2012 (http://www.fool.com/investing/general/2012/06/19/1-stock-im-gobbling-up-against-the-grain.aspx?source=irnsitlnk0000001) shares are now up more than 50% and beating the market soundly by more than 27 percentage points. Not only is management running the business well, but they are also managing expectations well and that can make all the difference in the world. Underpromise and overdeliver is far and away better than the opposite.

European sales growth of 8%, robust Asia numbers and a healthy showing in the Americas are all good indicators of spending maintaining at least a decent enough pace for the company to continue to grow. The drop in gross margin to 56.2% from 57.3% from a year ago is due to a shifting product mix to higher priced items that crimp the gross margin line a bit due to higher costs. Inventories are at a healthy level and management is maintaining guidance for the year; a smart move in my estimation. It would be really easy for them to come off of a decent quarter like this and up their guidance to cheerlead themselves. Plus it isn’t to say that conditions can’t or won’t change on the downside as the year goes on. That would more than likely hammer the stock from today’s levels of around 23 times full year estimates.

The bottom line is that Tiffany is not a buy at today’s prices. The buying should have been done back when I did it in June of 2012. Those who did are sitting on a nice 51% gain right now. But Tiffany is a solid business with an unbelievable global brand and a management team that seems to get it. I’d have this business perpetually on my watch list to buy in times of greatest pessimism.

JMo

I ran across some interesting research recently conducted by the Pew Research Center:

http://www.pewinternet.org/Reports/2013/Teens-Social-Media-And-Privacy/Summary-of-Findings.aspx

Here's an article worth reading if for no other reason than to at least create awareness that we have a genuine saving problem in this country and the long-term implications of it are downright scary:

Gen X to be worse off than Boomers in retirement, study finds

Gen X (yeah at 40 years old that's me) could be really screwed when it comes time to retire. We've known for years now that Social Security isn't going to come close to cutting it for our post-retirement years. But it still seems like saving, investing and living within one's means are foreign concepts tantamount to a can that just keeps getting kicked down the road. I suppose that's why my wife and I are so enthusiastic about teaching our young daughters these concepts so early in life. We can't control what they do when they grow up. But we can at the very least make sure they have all of the information to make educated decisions.

The chart above is a snapshot of the S&P 500 dating back to 1950. The point of this is very simple: the market goes up over time. It's the most phenomenal wealth generator in the world. And it's accessible to anyone in this great country willing to participate. All you need is patience and the will to save and invest consistently over long periods of time. 

My family's not going down with this ship. And neither should you. It's never too late to get started. But there's for sure a huge advantage in getting started early.

JMo

Here's a look at the comps Whole Foods has put up on a quarterly basis since 2008. Pretty impressive and you can see that the market's happy to pay up for it today. Can it last though?

They see a market holding 1,000 of their stores and they have 349 open today. At the pace of 10-20 new stores per year that they currently maintain it'll take a loooooong time to get there. When does the market's patience run thin? My bet is when (if) that comps line starts falling over a longer stretch of time we'll know.

It's pretty simple really: In the grand scheme of things I am a net-buyer of stocks. Now I know not everyone is a net-buyer of stocks. So I don't fall under the misguided notion that this is for everyone. But as it stands I am 40 years old and anticipate a lot of happy years ahead doing what I love. So when I find great companies that I'm interested in holding on to for a long time, I'm OK in the short-run if prices fall for whatever reason. If the fundamentals are still there, why not buy more? And if you diversify yourself sufficiently (it's different for everyone), you can actually find yourself smiling on those days when the market is taking it in the shorts.

Think about it this way: If the sellers come out en masse due to the calendar striking May, prices may just fall (in theory at least). That's short-term thinking and for those of us with a longer time horizon in mind it can spell opportunity.

Sell in May assumes that you can't pick stocks. I can. If you are hanging around here then you can too. So don't be scared to actually buy in May for a change. Given the fact that free money is going to be the name of the game for some time to come, I'm skeptical that we'll see sell in May take hold this year. The stock market is where it's at, period. Of course that can all change with one press release. But there's not much anyone can do about that. You can't win if you don't play. We'll probably see some stocks get hit for one reason or another though. And while earnings season just wrapped up, it's just three short months around the corner from hitting us again. So make sure you have your watch list ready. I'm gonna start throwing some ideas down over in "Stocks That Make Money" just to make sure I don't sleep on it.

JMo

What the hell is JMo Capital? Well, before you start getting too excited, I'm not opening a fund...at least not yet. The idea behind this was simply to get my own place to do my thing. No question this is all going to mostly revolve around investing; it's what I do. The "Capital" part is a tip of the cap to not only what may happen in the future, but also to what's happening right now. Today, tomorrow, my job, my life; it's about my human capital. What I'm doing and why I'm doing it.

I gained a lot of perspective at work running a real money portfolio for The Motley Fool. What started out as a nervous experiment turned into a great experience and it gave me the confidence that one day if/when I choose to do so I can manage money. It'll be on my terms and in line with how I invest.

I shut that portfolio down a little while back as it was eating into too much time that I needed to devote to Motley Fool One and, to a lesser extent, Stock Advisor. Those are what bring home the bacon and I couldn't let 'em slip. But I did well up to that point running neck and neck with the market and chalking up absolute returns of better than 25% for the two years I ran the portfolio.

This is me making sure I keep myself in check. Learning more, embracing my mistakes, finding some great ideas, having fun, and hopefully helping some good people out along the way. I may very well be talking to nobody. But if anyone out there is keeping up, I hope you enjoy.

JMo