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Recall me once, shame on you, recall me twice... | Sony saves its progress |

Hi Reader, here's what you need to know for August 5th in 3:11 minutes.

😎 Head to our next Crowdfunding Club on August 11th to meet two extraordinary founders: Troy from bamboo lumber company Rizome (right?) and Will from early-stage investment firm Chisos. It’s your chance to ask them all your burning questions. Get your free ticket here

Today's big stories

  1. General Motors’ profit came in below expectations last quarter, but the carmaker’s still optimistic about its full-year prospects
  2. Most retail traders lose money because of their own brokers, but you can make sure you're not one of them – Read Now
  3. Sony reported better-than-expected quarterly earnings and raised its profit forecast for the year

Horror Show

Horror Show

What’s Going On Here?

General Motors announced on Wednesday that its profit came in below expectations last quarter, and it's not the only carmaker getting the heebie jeebies right now.

What Does This Mean?

Rumor has it that if you say the words “chip shortage” five times in a Finimize newsletter, a semiconductor with a hook hand appears and drags you away. So we’d better be careful, because the chip shortage was precisely to blame for General Motors’ production issues and weaker-than-expected profit. So was the $1.3 billion earnings hit from warranty costs, mind you – most of which were tied to the Chevrolet Bolt, the electric car that’s twice been recalled in the past year due to defective batteries.

Still, GM is optimistic about its full-year prospects, and it raised its forecasted 2021 earnings by around 20%. The carmaker, after all, is seeing strong demand and soaring prices for its pickup trucks, which – given their high profit margins – are helping boost its bottom line.

Why Should I Care?

The bigger picture: Carmakers get a break.
The chip shortage is crippling plenty of industries, but none more-so than carmakers. They reportedly pay less than other chip-dependent companies, which sends them to the back of a very long line. The good news is that TSMC – the world’s biggest contract chipmaker – told carmakers last month to expect a sharp improvement, forecasting its production of auto chips to be 60% higher this year than it was in 2020 (tweet this). That should help, but it’s no silver bullet: GM still sees the chip shortage lasting into next year.

Zooming out: Kraft kuts the krap.
Kraft Heinz – of ketchup fame – reported better-than-expected sales and profits on Wednesday, thanks to strong demand for its snacks and packaged meals. That encouraged the company to reinstate its quarterly dividend to shareholders, which is certainly a lot easier to do when you don’t have a chip shortage to contend with. Wait – w... was that really five? No, no, nooooooo…

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2. Analyst Take

How Robinhood Makes You Lose Money

What’s Going On Here?

Here’s a not-so-fun fact: 70-75% of retail traders today lose money.

That should be surprising, but it actually stands to reason: beloved brokers like Robinhood are designed to make you trade as much as possible, even if that means making you trade badly.

They’re remarkably good at it too, with users of new platforms trading as much as 40 times as many shares as users of more traditional ones.

But fatter profits for them can mean deeper losses for you, and that’s not cool.

So that’s today’s Insight: how to make sure you’re in the safe 25%, and how you could even turn Robinhood’s tricks your advantage.

Read or listen to the Insight here

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Missing In Action

Missing In Action

What’s Going On Here?

Sony reported better-than-expected quarterly earnings on Wednesday, even if the entertainment giant’s friendly neighborhood PlayStations are still nowhere to be seen.

What Does This Mean?

Nature is healing: lockdowns are receding, doors are reopening, and… well, turns out people are still just kind of staying indoors. That’s fine by Sony, whose sales and operating profit – which grew 15% and 26% respectively compared to the same time last year – benefited from continued demand for its PS5s, TVs, movie and music services, and more. It was the confidence boost the company needed to raise its profit forecast for the year, but hitting that target will ultimately come down to its ability to produce enough PS5s to meet demand. And that’s not a given: Sony’s been struggling with the same supply issues that have been affecting everyone else.

Why Should I Care?

The bigger picture: The ghost of hardware past.
Sony wants to use the PS5 to bridge the gap between its long-standing consumer electronics business and its high-margin (and growing) content business, which it plans to do via game downloads and subscription sign-ups. So it’s no wonder that it’s trying to diversify the content it has to offer: the company recently agreed to buy Crunchyroll – AT&T’s anime business with 3 million global subscribers – and intends to spend more than $18 billion over the next three years on other content acquisitions.

Zooming out: SoftBank sneaks up on us.
Sony isn’t the only Japanese company on a spending spree: new data out on Wednesday showed SoftBank has quietly built a $5 billion stake in pharmaceutical giant Roche. That’s not a typical investment for the Japanese conglomerate, which has historically focused on tech firms or early-stage biotech companies. SoftBank, though, might argue that it’s exactly in keeping with past investments: the firm thinks Roche’s Genentech division – which uses data to develop drugs – is highly undervalued, which means there’s money to be made.

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💬 Quote of the day

“How wild it was, to let it be.”

– Cheryl Strayed (an American writer and podcast host)
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🎯 On Our Radar

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  2. Hands up if you want to pay less tax. Here’s how to build a tax-free portfolio – and pocket £50.*
  3. $250,000 for “digital love”. This Polish influencer is cashing in on the NFT craze.
  4. Only humans cry. And the science behind tears is still blurry.
  5. “I f***ing hope he sues me”. The Twitter explosion that nearly sunk Elon Musk.

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🌎 Finimize Live

🏠 Swap house bricks for stock picks

God knows it’s not easy to buy a property these days: house prices are sky high because the market just. keeps. rallying. But what if we told you you didn’t have to own a property to benefit from the boom? Incidentally, have you heard about our How To Buy Property Without Buying Property event?

🎨 Are Collectibles Worth All The Hype?: 6pm UK time, August 9th
🏡 How To Buy Property Without Buying Property: 6pm UK time, August 10th
🤖 What’s Next For DeFi in 2021? 1pm UK time, August 11th
🔥 How To Invest In The Next Big Thing: 5pm UK time, August 11th
🤑 How To Value Ethereum: 5pm UK time, August 12th
How To Be Greener About Bitcoin: 1pm UK time, August 17th
💥 How To Profit From The Commodities Boom: 5pm UK time, August 18th
🔌 Strategies To Supercharge Your Investments: 1pm UK time, August 20th
😎 How To Invest In Smart Contracts: 5pm UK time, August 24th
🤔 Are You An Investor Or A Trader?: 12pm UK time, August 25th
🙌 How To Create A Diversified Portfolio: 1pm UK time, August 26th
🚀 How To Profit From Open Banking: 5pm UK time, August 27th
💰 How To Value Any Company: 6pm UK time, August 31st
♻️ How To Turn Your Portfolio Green : 6pm UK time, September 23rd
🤠 How To Win Big With Fractional Shares: 5pm UK time, September 28th

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