Whats the one thing that people want? Entertainment.

Whats the one thing that people want, even during a recession, perhaps even more during a recession to take their minds off their crappy finances and lives? Entertainment. Relatively cheap entertainment where they can just stay at home and not have to pay for gas, parking, dinner and tip somewhere downtown. They want 'House of Cards', 'Bloodline', 'The West Wing' and 'Heroes'. People want to binge watch. And in the event that they can no longer afford cable and lose their HBO and 'Game of Thrones', they are going to have the lower cost Netflix.
Home entertainment is extremely cheap vs what it actually costs to create a show. A single episode can run over a million dollars. Take Game of Thrones. All the actors, the location shoot, the special effects. Ever watch a big budget movie and then hang out to see if there is a special scene after the credits in the theater and watch the 5 minutes of credits that roll past? There are people and departments and divisions that you would never guess that goes into support of making the movie. Everything that you can see in the movie compared to the people that work on it behind the scenes is like the tip of the iceberg.
This humongous cost is defrayed and broken up among millions of people who are just paying 10-20 dollars a month. A show (one episode!) that cost over a million dollars to make, to your private viewing screen for almost nothing. Its a tremendous leveraging of entertainment for the dollar.

People will trim a lot off their monthly budget but the last thing they want to give up is good TV. Its relatively low cost and highly entertaining. What else are they going to do at the end of a hard work day? Pretend its 1895 and read a book? Write their memoirs? Play backgammon?

Consider this article: http://www.marketwatch.com/story/netflix-will-win-back-lost-us-subscribers-with-expanded-content-2015-10-15

Now lets take a look at NetFlix's weekly chart:

What do you notice? Long term Growth. Netflix figured it out. Not only do they put existing shows on there as a rental service, but now they are developing original shows as if they were their own network. If you want to watch the hit show House of Cards you have to subscribe. Like HBO. Also, netflix is going to keep developing thier brand of original shows and more subscribers are going to flock to the service. Note during the drop there was a corresponding drop in the stock price a month ago, but again, here come the subscribers.

What I want to do is purchase Costco calls and Netflix calls. But go out there, say next year strikes and just sit on them. However, I feel that the market is a little shaky right now and is looking to do some more dropping. I also have triple D puts hanging out there so we are going to sit tight on this for about a week or so. If the market does drop/mini correct it will give us much more value to get in during a pullback.

Tradinginsider