US Housing Market, Netflix and Tesla

This is my first blog post so please forgive me if I fail to deliver on your expectations. I have always wanted to write but never accomplished it because  

1. I did not have anything interesting to write about 
2. I was petrified to write, I was afraid of failure
3. I did not have the time or to be honest I did not make time to write because it was not a priority
4. I wasn't sure who would read my blog (well, even now I am not sure about that) 

But then it hit me that I have nothing to lose if I take the plunge. The worst that could happen is my blog will just go unnoticed. It will just be any other blog among the zillions of blog out there in the internet galaxy.

On the other had, If I decide to face my fears head on (and write), there is no better alternative to overcome your weaknesses. So the risk to reward ratios seems to be in my favor. Furthermore, as Stephen King says –

"Writing isn't about making money, getting famous, getting dates, getting laid, or making friends. In the end, it's about enriching the lives of those who will read your work, and enriching your own life, as well. It's about getting up, getting well, and getting over. Getting happy, okay? Getting happy.”  - Stephen King, On Writing: A Memoir of the Craft

Now that I have gotten the “why this blog” out of the way, what is the blog about? This blog is all about enriching your life with information from the fields of Finance, Economics, Politics, Sports, Media and anything I find will be valuable to you. My goal will be to restrict every blog post so that it will not take more than 5 minutes of your valuable time. To make matters simpler, I will be posting charts, graphs, pictures along with a small commentary that will hopefully make those charts comprehensible.

So, let’s get started with the charts for this week. 

Let’s first talk about the Housing Market in the United States. Mortgage rates have been going up since the beginning of 2017. As shown below, the 30-year mortgage rate now sits at roughly 4.6%, the highest level in nearly 7 years.

But does rising interest rates spell doom for the housing market? Most people you ask will tell you that as rates rise, it becomes expensive to finance a home which means less buyers and hence a correction in prices given the supply remains unaffected. Well, that’s true but there are so many variables that drive housing demand — demographics, mobility for employment, income levels, family circumstances, and maybe most importantly, emotions. Here is a look at the two indicators and it’s hard to see any correlation between the two. Ben Carlson goes further to look at this relation in different periods and the conclusion remains the same. You can read more here.

Switching gears, the next couple of charts show Netflix surpassing both content giant Disney and distribution giant Comcast in market capitalization. Some facts worth mentioning here –

Last year, Comcast did $85 billion in revenues and reported profits of $22 billion.

Last year, Netflix did $11.7 billion in revenues and reported profits of $550 million.

Both companies now have a market value of just under $150 billion dollars. Netflix has seen its market capitalization surpass Comcast, despite the fact that the latter company had roughly seven times higher sales last year and forty times profits.

And finally, some news from the world of Tesla. If you have been following up Elon Musk on twitter, you know he has been acting irrationally off late. He has been tweeting about anything from making candies, boring tunnels, producing a $78K model 3 to creating a news website to rate journalists for credibility and 'core truth'. I found the following charts very interesting. The first shows the trend in Musk’s tweet frequency and the second shows tesla stock price vs the short interest. I am not saying the two are correlated but Musk seems to be losing it by calling the analysts “bonehead” and tweeting all this gibberish.

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