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As reported by Investopedia:

After releasing expectation-busting quarterly earnings and boosting its outlook for 2010, shares of DVD rental company Netflix (Nasdaq:NFLX) soared more than 20% in after-hours trading on Wednesday.

The strong “thumbs-up” from investors was in response to a 36% jump in fourth-quarter net income to 56 cents per share, up from 38 cents a year earlier. The result also handily sailed past the Street’s expectations of 49 cents for the quarter.

Underlying the company’s strong profit growth has been its surprisingly strong subscriber growth. Netflix’s subscriber tally at the end of the quarter came to 12.3 million, up 31% from its year-end total in 2008, and up 10% in the last quarter alone.

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I picked this up over at Investopedia. This is a great article about losing money using Leveraged ETFs (Exchange-Traded Funds). While there are some investment vehicles that make sense (such as index funds) there are some that simply don’t work out once you understand them.  This is the case with leveraged funds.  Rather than re-explain the math here, I suggest that you jump over to Investopedia to read it.  Below are some hightlights:

Have you ever wondered how you can make sure that your portfolio loses money? For those of you who are tired of that extra cash weighing down your pockets and would rather just lose it aimlessly than give it to a worthy cause, I found the ideal investment: levered [sic-leveraged] exchange traded funds.
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Consider a hypothetical stock that is tracked by two double-levered [sic] ETFs, one bull, one bear. Since the debt portion of the instrument must consistently be rebalanced to ensure a proper debt-to-equity ratio, the funds track the daily performance of the stock rather than the overall annual percent change. Suppose this stock, with an initial value of $100 experiences a 25% price decline, followed by a 25% increase and then a 6.67% increase to bring its price back up to $100. A double-levered bull ETF would have a terminal value of $85 ($100*1.50*0.50*1.133) while the inverse fund would be worth only $65 ($100*0.50*1.50*0.87). This is, of course, before we factor in the management expense ratio. Essentially, despite the trend in the market, these instruments will lose value due to the daily volatility of the underlying asset.

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Glenn Curtis of Investopedia recently suggested that it was time to leave the casino stocks. In his article he discusses 4 companies:

  1. Las Vegas Sands Corp.
  2. MGM Mirage
  3. Boyd Gaming Corporation
  4. Wynn Resorts, Limited

I haven’t done a stock analysis post on these four companies but I did a quick check on each one. Frankly, none of them pass the test as a decent company. I would never suggest that anyone invest in these companies in their present condition. They just aren’t that well run to justify an investment compared to other companies on the Good list!

A few of Glenn’s comments (more here):

The space was in the spotlight earlier this month, thanks in large part to upbeat revenue numbers from Macau during December. Macau has become a hot destination in recent years and is located in China. But if you think all this means I’m bullish on some of the bigger casino names, you’re mistaken. In fact, I think many stocks in this space are ripe for a fall.

Why My Reels Aren’t Spinning
Many of the big names have had a huge run since the spring of 2009. For example, MGM Mirage has seen its stock rise from the low single digits, under $2 per share in the spring, to currently trading at around $11.50. Las Vegas Sands has seen its stock rise from under $1.40 per share to its present position, hovering around the $18 mark. But again, I think the run is severely overdone.

My No.1 concern is that I don’t see many average people traveling, or even pondering expensive vacations in the months to come. And I’m not convinced that placing money into a slot machine or laying it on a hand of poker or “21” will sound too attractive to many, particularly until the job market shows some real life. In essence, the macro picture doesn’t seem to match the rise in the escalating stock prices.

You can lose your shirt at the casino or investing in them!

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From CNBC’s Mad Money:

Jim Cramer (text from Newsbusters.org):

The number you need to watch is the number that Scott Brown racks up against Martha Coakley in this amazing Massachusetts Senate race. I say amazing ’cause this was supposed to be a walkover. I mean, even a few weeks ago it was a lock for Democrat Coakley. But now everything’s up in the air, and a Brown win would be devastating for the president’s agenda. Let’s put Brown, okay, and I don’t mean UPS which I happen to own for my charitable trust. Particularly on healthcare reform, because Republican Brown has said he will definitely vote against the plan.

Brown in the Senate? That wrecks the 60-vote supermajority the Democrats have been counting on. It could spell the end for this almost year-long nightmare of a piece of healthcare legislation.

What does a Brown election mean larger than this? Well, first you’re going to get a knee-jerk rally in all the so-called penalized stocks — the HMOs, the drugs, the medical device-makers. I call it “knee-jerk,” though, because these stocks have been on fire for months. Look at Cramer fave WellPoint, or United Health. 52 week high. 52 week high. Merck, 52 week high. It’s been clear as a bell that the healthcare reform wasn’t going to affect most healthcare stocks. That’s versus what we thought last year.

More important, though, I think investors who are nervous about the dictatorship of the Pelosi proletariat will feel at ease, and we could have a gigantic rally off a Coakley loss and a Brown win. It will be a signal that a more pro-business, less pro-labor government could be in front of us. Hey, would you say it is more China like perhaps? No, we can never be as capitalist as the Communist Chinese. But how about a little bit less like the old Soviet Union? Yeah, that would be a bit more like it. Pelosi politburo emasculation! Everything from the banks, which are usually in the Democrats’ penalty box, or the oils which are despised by this administration for being carbon, could be propelled dramatically higher all of this Tuesday night.

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I had discussed this in my earlier posting but Comcast really needs to fix some things at NBC. Anybody associated with this mistake needs to go flip burgers for a living.

From the Wall Street Journal:

Comedian Jay Leno will return to his 11:35 p.m. timeslot on NBC and end his nightly 10 p.m. comedy-talk series, NBC Universal chairman of television entertainment Jeff Gaspin told reporters on Sunday. “[‘The Jay Leno Show’] did not meet our affiliates’ needs and we realized we needed to make a change,” Mr. Gaspin told reporters gathered at a Television Critics Association conference in Pasadena, Calif.

Mr. Gaspin said the network hopes to move Conan O’Brien’s “Tonight Show” to 12:05 a.m. and Jimmy Fallon’s “Late Night with Jimmy Fallon” to 1:05 a.m. But those arrangements have not been confirmed and talks with the hosts and their management teams are ongoing, Mr. Gaspin said.

http://online.wsj.com?mod=djemalertNEWS