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Today's big stories

Sony reported better-than-expected earnings and upped its expectations for the rest of the year
Here’s the real reason Robinhood blocked you from trading on GameStop last week – Read Now
Morgan Stanley thinks emerging market stocks may have already peaked for the year

Cheat Code

What’s Going On Here?

Sony pressed up, down, triangle, R2, square, left, R1 on Wednesday, and – congratulations! – the gaming heavyweight unlocked better-than-expected quarterly earnings!

What Does This Mean?

Some of you have spent your lockdowns baking sourdough, others have dabbled in Zoom-based yoga, but loads of you have picked up a games controller. That demand – as well as the launch of the PlayStation 5 in November – drove revenue in Sony’s gaming division 40% higher than the same time the year before. Throw in a record number of PlayStation Network subscribers and blockbuster sales of its Spider-Man game, and the company’s earnings came in well ahead of analysts’ expectations. It did so well, in fact, that it was confident enough to up, up, up its profit expectation for the rest of the year by more than 30%.

Why Should I Care?

For markets: Chips make the world go round.
PlayStation 5s may be flying off the shelves, but Sony’s been struggling to meet demand. There’s a pandemic-driven shortage of microchips right now, and since they’re used in everything from smartphones to, yep, games consoles, there’s serious competition for the little supply there is. Sony might be hoping the delays won’t impact its lead on its biggest rival: data last week showed it’s sold twice as many PS5s as Microsoft has its XBox Series X console.

Zooming out: You’ve had your fun, Spotify.
This gaming uptick has likewise worked out well for Nintendo, which posted strong quarterly earnings earlier in the week. But the home entertainment boom giveth and taketh away: Spotify, for one, “pulled forward” so many new customers earlier in the pandemic that its outlook for new subscriber numbers fell well short of investors’ expectations. And while the number of last quarter’s premium subscribers – which account for the majority of its revenue – topped estimates, investors – who are all about the future, not the past – initially sent the audio streaming giant’s shares down 10%.

You might also like: How to pick the best gaming stocks.

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🙋 Ask a question

2. Analyst Take

The Real Reason Robinhood Blocked Trading On GameStop

What’s Going On Here?

Investors weren’t best pleased when broker Robinhood blocked investors from buying stakes in certain stocks last week.

Actually, that’s a nice way of putting it: they were 100,000-one-star-reviews, dozens-of-lawsuits angry.

Internet sleuths have been trying to work out why Robinhood did it, with plenty of theories focusing on the market-making firm that pays the broker to process its customers’ trades.

But here’s the thing: those firms have no real incentive to stop trading shares unless volatility grows so extreme.

And even then, they wouldn’t stop just one side of a trade. That would quickly tilt their inventory in one direction, which isn’t what market makers are about.

So why did Robinhood do it? The answer’s probably pretty simple, and it’s in today’s Insight.

Read or listen to the Insight here

Here’s a neat investment opportunity…

Alternative investments are exploding in popularity across the US right now.

A lot of that’s to do with companies like Caliber, which is giving investors exclusive access to private real estate investment opportunities.

In 12 years, Caliber has already secured $400 million in assets under management. That’s an average of $520k per investor.

It’s doubled its client base since 2016 too, and has been named Inc 500’s “Fastest-Growing Private Companies in America”.

In other words, Caliber’s tapped into a market that’s as fast-growing as it is far-reaching.

And since Caliber is doing a fundraising round on SeedInvest at the moment, you can invest in that potential.

The investment opportunity closes on February 26th: find out if it’s right for you.

Find Out More

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Guilt Trip

What’s Going On Here?

So much for investors going abroad to "find themselves": Morgan Stanley announced on Wednesday that emerging market (EM) stocks might’ve already peaked for the year.

What Does This Mean?

EM stocks have been doing well lately: one of the key EM indexes has climbed 80% since March, and it reached an all-time high just last month. That might be because the dollar has been weakening relative to the stocks’ underlying currencies, which makes them worth more to US investors. Or it could be because EM stocks tend to mirror global economic performance, which has been looking more promising ever since the vaccines were announced.

Enter Morgan Stanley with a reality check: it pointed out that the key EM stock index is already higher than the bank expected it to be at the end of this year, which means it probably doesn’t have much further to climb…

Why Should I Care?

For markets: There’s method behind Morgan’s madness.
There were a host of reasons Morgan Stanley came to this conclusion, but here are three of the biggies. First, the firm pointed out that the US dollar’s value has actually stopped falling relative to other currencies. Second, copper – which is mostly produced in emerging markets – tends to see its price move in line with EM stocks, and that price is currently on the decline. And third, investors have been pouring a serious amount of money into EM funds – a move that’s historically come just before a fall in those regions’ stock prices.

For you personally: India might be your best bet.
If you are going to take a chance on emerging markets, Morgan Stanley thinks India’s the best place to go looking for opportunity (tweet this). The bank reckons the Indian government’s recently announced budget could do a good job of boosting the country’s economy, which should have a positive effect on company earnings and might, in turn, send the country’s stocks up by as much as 10%.

You might also like: How to start investing in India.

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🙋 Ask a question

💬 Quote of the day

“You know everybody is ignorant, only on different subjects.”

– Will Rogers (an American stage and film actor)

Tweet this

Give the gift of luxury this Valentine’s Day

There are more ways to say I love you than chocolates and roses this Valentine’s Day.

Here’s what to do: cook her favorite meal, run her a bath, and treat her to luxury sleepwear from Lunya.

It’s not just incredibly soft: it’s made from naturally thermoregulating silk that’s machine washable, so you’ll be racking up brownie points all night long. You’re welcome.

Lunya’s already picked out what your Valentine will love: check out the gift guide today.

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🌏 Finimize Community

📚 Flashbacks to sixth-grade book reports

How does dimensional investing work? How do you invest in dimensional funds? What’s the difference between dimensional funds and exchange-traded funds? Uh… dimensional investing is… mumble mumble. We really like the part where… mumble mumble. Honestly, no one briefed us. Guess we’d better all get up to speed at the Dimensional Investing event then?

👾 Bitcoin vs Ethereum: 7pm France Time, February 5th
✌️ Dimensional Investing vs ETFs: 9pm Singapore Time, February 9th
🛍 Investing in Retail Stocks: 6pm UK Time, February 10th
🤖 What’s next for Crypto?: 9pm Hong Kong Time, February 11th
🍃 Key ESG Trends for 2021: 6pm UK Time, February 16th
🙋 Developing a Framework to Invest in Women: 6pm UK Time, February 25th
🌈 Financial Planning for the LGBTQ Community: 2pm NYC Time, February 26th
💪 Q&A with Finimize CEO, Max Rofagha: 1.30pm UK Time, February 26th

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Finimize - 😭 There are no PS5s left

Today's big stories

Cheat Code

What’s Going On Here?

What Does This Mean?

Why Should I Care?

The Real Reason Robinhood Blocked Trading On GameStop

Here’s a neat investment opportunity…

Guilt Trip

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Give the gift of luxury this Valentine’s Day

📚 Flashbacks to sixth-grade book reports

Older messages

😨 Jeff Bezos is calling it quits

🧐 Redditors are back at it

😬 5G did it

📉 Tesla’s got it all wrong

🌤 Microsoft’s on cloud nine

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