Episode 74: Video Game Stocks for 2021, market cap and more

SIRI: Welcome to Money with Mak and G, finance for you and your family. I am Siri and I will be your assistant. Smiley face.

MAK: Okay, well thank you for that.

DAD: Thank you for that. Welcome back to Money With Mak And G. My name is Ben Jones, wearing a little moolah around my neck. Today we’re going to talk a little bit about the stimulus checks we’re going to get on, we’re talking a little bit about potential video game stocks in 2021. We’re going to ask a couple questions to the kids. Say hi kids. Hi, what’s up? And then we’re going to go through market capital or learn a little bit about market cap, the markets and some things we can do in order to save money. So let’s go ahead and get started. Makenna, what’s your word for the week? What’s going on?

MAK: My word for the week, I’m just really excited because we have a three day weekend. I don’t know if that’s for everyone. But it’s Martin Luther King Day, which is also something to be excited about. So yay.

DAD: And this week are going to show us your medallion too, so we are going to be twinsies?

MAK: I don’t have my medallion. Technically, I’m a triplet.

DAD: With all of us. And we think that this is the first week back to school, so you are extra tired, we know, but you’re going to have that extra day on Monday with Martin Luther King Day. Grant, what’s your word for the week, bud?

GRANT: I’m really it’s mostly just like everyone getting back in school and I’m not ready for it.

DAD: Wow. Okay, so you’re trying to get back to school. You’re going to get a four day week, next week, three day weekend. It’s all good to be sleeping late. That’s so awesome to hear. And one of the things you know that I was thinking about over this past week is guys, where were we, what, a couple summers ago? 

MAK: We were on a cruise and it was amazing. Barcelona!

DAD: And where we go, Barcelona, and what’s the big news this past week in Barcelona?

MAK: It snowed there, people. It snowed.

DAD: And it was crazy snow. I think it was like 22 inches if I remember correctly. 22 inches, guys. That wreaks havoc. It’s the worst snowstorm they’ve had in how long you think? 50 years. Yes.

MAK: Wait, how’s that possible? 22 inches, isn’t that like to your waist?

DAD: Yeah, but it all came down. They moved it out of the way, more came down. But it’s two feet, crazy, huh?

GRANT: Little toddlers dying every day. Not dying. Sorry, sorry. Trudging through the snow. Sorry.

DAD: We had the 21 or 22 inches, but it’s interesting and we were there, right? And when we did our travels, didn’t we go to my fun place Naples? I was going to bring this out to make Makenna feel bad. Went to Naples and why do we go to Naples? For pizza! Because Dad’s favorite is pizza and we went into Naples is where the home of the pizza, the margarita. And guess what happened?

MAK: I can add seasickness.

DAD: Sorry to turn. Right around five minutes on to Naples and go right back to the boat. And Dad, did he get his pizza? Nope. No, thank you Mak. That is your consolation prize and not the one that I actually wanted. So with that, we’re starting to see a lot more of the stimulus checks. And like snow in Barcelona, that snow wreaks havoc and really hits finances, right, because it shuts down the country. Nobody can work. Money’s not moving around. People aren’t earning money. And it’s just crazy. But we’ve got our stimulus checks in, did I get my stimulus check? Yes, you did. Yeah. And I got how much for each one of you guys.? $600. Yeah, so it was a good, good week at the end of the day. And what else happened this week though? We got some money and Dad was feeling good. And where’s the money going out to we talked about this last week?

MAK: It is going towards a car.

DAD: And even after all that analysis, what did we decide on?

MAK: A Tesla which is surprising me because you know…

GRANT: Tesla Y SUV.

DAD: Tesla Y SUV and how much did it cost? A lot. $42,000. Yeah, it’s like the cheapest Tesla they have. Short range came out, which means that it was less expensive, doesn’t go as far too and in 44 miles, but what did we find out about our trade in for our minivan because is what’s important to know, it starts with a D and rhymes with reappreciation? Depreciation. And is depreciation important?

GRANT: Yes, it is.

DAD: Because what do we do with our minivan guys?

GRANT: Oh, you sold it to Carmax.

DAD: And why did we sell to Carmax Mack

MAK: Because Tesla was offering an amount of money that, we found a better offer basically.

DAD: So what did Tesla you remember offered us G? Like $1300? They did. But they originally offered us what? $3700. And they said, we have to take pictures. Mom went out and took pictures. Makenna, what happened, they came back and…

MAK: They charge $1300.

DAD: They offered. So we couldn’t take that, we went over to Carmax and what did I get this morning? $4,000. What is the lesson to learn guys?

MAK: You do not go with your first choice, because I guarantee there’s always going to be a better one, unless you’re really lucky.

DAD: Well, there’s going to be other offers. So you just got to evaluate them all, right? And if we would have just went with Tesla, we would have got $1300 instead of the $4000. So that’s a big deal. And what else did we learn when analyzing Tesla versus our minivan? How much money will we save as a difference between using gas and electric charge? How much do we save a day on average, do you remember? $3 a day, 30 days in a month, how much in a month? $90. Makenna, how much a year? $1,080. And how long do we have our cars because our minivan, how long we had our minivan?

MAK: About 10 or 11 years.

DAD: 11 years! So we bought the minivan and I think at around $32,000 and it depreciated all the way down to a fourth. Amen. That’s $28,000 when you got used up. So it’s important to look at those numbers. And the Tesla for us, is going to save us about how much a year? $90,000? $90 bucks a month, or $1080 a year.

MAK: I thought you’re asking for nine years, I was like, nine years.

DAD: Well, nine years, how much are we going to save in nine years? But we’ll probably say save it for at least 10 years because we like to keep our cars because of that big bad D word. Yeah. So I’m going to keep them for a long time so that we’re the ones that get it. So that was a very exciting part of the news this week, and a lot of things going on. But one of the items that we wanted to go over, we’re going to do the markets, right? Let’s do the markets. What happened in the markets just overall last week?

MAK: So Dow, it went down by 0.9% and it went up by 0.7% throughout the whole year.

DAD: Since January 1st. So we’re still up for the first two weeks of the year. But we went down for the second week in the Dow are the big companies, little companies, medium companies?

MAK: Dow are the big companies. They are like the top 50 I think.

DAD: Top 30. We’re going to get that knocked into your mind but we think about two weeks ago when we did this, you guys like Dow? What is Dow? And then the s&p 500, Mak the 500, not like the Indy 500. But how many stocks are in the s&p 500? Oh, my gosh. You do this every time. I’m glad you’re here to keep us laughing. So how many stocks, Grant, are in the s&p 500?

GRANT: I think about 500.

DAD: How many Makenna? 500. Excellent and the NASDAQ. What does NASDAQ Tech talk to us about? All the tech companies. Yes. So the Dow is 30 big companies, usually older but we know got Apple, got a lot of other companies in there. But s&p is a broad, looking at all the companies and then NASDAQ is the tech companies. And so how did the NASDAQ do? This one’s important.

MAK: So NASDAQ as we talked about in our last podcast did really well over 2020. But this week, it didn’t do the best. Let’s just say that. How did it do? It went down about $200.

DAD: Or 200 points, because they’re not dollars. But what is the percentage they went down Mak? 1.5%. And if we looked at that over 50 weeks, that’s like 75%. So that’s a huge, huge going down, right? So the NASDAQ got hit, the Dow got hit by 0.9. We’ve got s&p, which is overall pretty much a broad spectrum was 0.7. What did crypto do? Did crypto go up last week? 

GRANT: No, it went down by 5.9%.

DAD: So is crypto volatile, which means it moves up and down quite a bit?

MAK: No, not as much.

DAD: Not as much? Crypto was 37% last week up and then it went down 6%. Those numbers at 6% over an entire year, that’s three 100%. That’s crazy!

MAK: What I meant was, like it goes up and down less than like those little smaller stocks.

DAD: No crypto actually will go up and down like crazy. Oh, great, my bad. So that’s why we’re here because we’re learning right? Yes. Crypto is very volatile. It went up, what do you call it, two weeks ago 38% almost and down 6% in the last week. Those are some big moves. But over the year, crypto is up from January 1st by about 30%. Now, what about our day trading? Kyle and I are doing some day trading. What are we up to last week?

MAK: Your day trade went about 13.6% up.

DAD: Yep. So for the year, the first two weeks, which doesn’t necessarily tell us everything, it’s up about 22% What about Apple? What happened to Apple last week?

MAK: R.I.P. Apple. Oh, it went down by 3.9%.

DAD: So you guys are in the can 5%. Ow! So it’s a big move there. We just don’t want to belabor it.

MAK: Apple, you better come out with that like, iPhone 13 through 20. Something to bring that stock up.

DAD: But that’s the whole thing. You guys know what a ticker symbol is, which is AAPL. We know what the markets are doing. So we’re on top of it. So for 2021, we looked at something called The Motley Fool. The Motley Fool, I believe, is owned by Yahoo. And they come out with suggestions or recommendations for certain stuff. We wanted to do a little something on video game stocks. Look at that face with G Man. The top five at least I found for 2021 from the Motley Fool are here but Makenna what happened to video game stocks in 2020? Were people playing more during COVID?

MAK: Basically, as you can probably guess and as probably some of you guys actually did, during 2020, everyone was really bored in quarantine. They were like hey, let’s try out some video games or play more video games.

DAD: Let’s kill some people with a video game. Bam bam. And so they played a lot more right? Yes, absolutely. So our resident expert right next to me is Mr. Grant Jones. Hello, that’s me. Welcome to the show sir. We got five of them. Capcom, Take Two Interactive, Tencent, Activision Blizzard and Electronic Arts. Which one do you know the most about because you actually invested in?

GRANT: I invested in Activision Blizzard. So that’s Call of Duty, Overwatch, World of Warcraft and Candy Crush Saga.

DAD: And Makenna saw that you’re making so much money and she wanted to be invested in it too, right? She got jealous. So Grant was already up a grand or so and Makenna jumps in, she’s probably made out two-three grand, doubled her money and Grant has done a little bit better than that for sure because he loved it. Because what do we need to know about any investment? How do they…

GRANT: How do they make their money, yes.

DAD: Yeah. So each one of these companies are a little bit different. You know a lot about Activision Blizzard, a lot of Candy Crush, right? Because you don’t get to play Call of Duty. Come on! And EA Sports, what about EA Sports? Tell me a little about that because you had kind of an opinion about that one.

GRANT: Okay, so, EA Sports, it’s like, they charge so much money just for the smallest things like, an expansion pack just to play a level, they charge $5 for it.

GRANT: So if you’re trying to play a sports game, you’re trying to do it on EA Sports. They charge you for all these extra and we talked about Fortnight right? Fortnight is pretty much free, right? Yes, it is free. But they randomly give you a default skin and it’s randomized. It’s randomized. So I think the first time I saw you, you were a girl. Yeah, I was. He was a girl. And Makenna, what were you, are you a boy or girl?

MAK: I’ve got my very first round that I’ve…

DAD: But what do you think about the second round?

MAK: I was probably a boy the first time.

DAD: I’m sorry. So confusing. For the skins, they get you in for free and then how do they charge you money? They charge you money because you get different skins. Because you want to be a boy again, right?

MAK: Yeah. Or you just want to fit in. Some people don’t really care what the gender is.

DAD: And the defaults could be just about anything, right? So you got to know investment especially when you’re investing in a company how do they make money. And if that’s going to work, and in Fortnight, if it’s a $60 game, how much do you think you spent on Fortnight?

GRANT: Probably $100. But I got gift cards, so it’s not like just direct money, but still.

DAD: Right. We got some discounts on those gift cards, but instead of spending $60 just for the game getting everything, you spent $100 because you keep changing and that gets pretty expensive. So

MAK: Average is like $200 per person. Really $200. Yeah.

DAD: So you’re talking about an interesting way to increase the spend on your product. These guys are finding it in the video game world. And so that’s why they want to do something on video games and Electronic Arts, the sports, they charge you for everything. Do you know what FIFA is? FIFA, that is soccer. Right? So it’s the Federal International Football Association because overseas football is what you play with your foot, which is soccer. Yeah, so EA Sports, we know Activision Blizzard a little bit. What about Tencent? What happened with Tencent? They own a lot of other companies. Tencent is a Chinese company and what do you tell me about them?

GRANT: Okay, so I know a lot about the companies that Tencent owns. League of Legends, apparently, that’s like a huge hit now, a bunch of people got in the past a year or two years or something. Yeah. It’s just like, exploding!

DAD: And how do they earn money that way?

MAK: I’m not that. Sure.

DAD: Okay. Well, tell us about Rocket League because they own some of Epic Games.

MAK: Yeah, Epic Games owns Rocket League and Fortnight.

DAD: Yep. What about Rocket League? What is that? Because people don’t really know that.

GRANT: So Rocket League, it’s like with cars, and basically you hit a soccer ball into the goal. So it’s basically just car soccer.

DAD: But you do all kinds of crazy flips in your car, Makenna, did you play that?

MAK: I played a couple of rounds. I don’t play a ton.

DAD: You don’t like hitting the ball into the goal and seeing it explode and all the cars fly all over the place? For me it’s like, Welcome to Thunderdome. Because Thunderdome, they put a big net over it or big cage over it and you’re inside doing it. And it’s kind of fun to watch. So they opened it up for free, right? Yeah. And then what they do, they got tons and tons of people playing, and then what happened?

GRANT: They have credits basically, like just the currency. It’s like Fortnight, and they ask, like, you need to buy $5 worth of credits, just to trade. So that’s one way they make money.

DAD: So, it’s just a different way to make money. They get you all worked up, and then they say hey, if you want to do anything cool, we’re going to charge you. Yeah, right. So get you for free and then really work on that. So we got League of Legends, the Rocket League. Supercell. What’s Supercell?

GRANT: That’s like, Clash of Clans, I don’t know if you’ve heard of it. Oh, Clash of Clans. Heyday, Brawl Stars, some really good games.

DAD: It’s not the most violent but Mak, you and I played Granton. We played on teams and stuff. So yeah, I don’t know, I can recommend that as far as fun now you get to check out whether or not it’s too violent, but they usually disappear, No blood, no other stuff. Yeah.

GRANT: And Ubisoft. I don’t know too much about it. Like they make mobile games and console games. Ramen legends.

DAD: Ramen legends, like ramen noodles? We’re waiving noodles around, catching people with noodles?

MAK: I think you can get that on a Nintendo Switch and the Wii U but yeah, it’s pretty good.

DAD: What about Take Two Interactive? That’s another one. So we’ve talked about Activision Blizzard, EA or Electronic Arts, Tencent. Now we’re Take Two and then Capcom.

GRANT: Okay, so Take Two Interactive, that is Grand Theft Auto.

DAD: Grand Theft is really violent, right? It’s really, really violent, shooting, running over people, stuff like that.

GRANT: Red Dead Redemption. I don’t know, I think it’s like some sort of cowboy game. I’m really not sure so I should not be guessing.

DAD: But these are different games that these places have. And when they have a really good game, and they just essentially what we say, print money. That means that the game just keeps going on, people love it, they keep playing it online, everything else. So what about Capcom?

GRANT: Capcom? That is a Japanese company. I don’t know much about any of it. I’ve heard of MegaMan and Street Fighter and you probably know more.

DAD: Street Fighter was a long time ago, man. I remember playing that in arcades. And the thing that we’re talking about here is just different stocks, not necessarily recommending them but you know, knowing a little bit about it, knowing how they make their money, looking at the annual report, we’ll keep digging into stuff. But we want to throw a few out there, have a little bit of fun with the video games but we also wanted to, Makenna, what is the term that we wanted to kind of learn for the day?

MAK: Market cap, right?

DAD: Yep. And what is the market cap is short for market cap…

MAK: I-TA-LI-ZA-TION.

DAD: Exactly. Market capitalization. Hey, way to go Makadoo! And how do you calculate market cap because you know you got all these fancy people on New York Stock Exchange saying hey, the market cap is this, market cap is that How do you calculate it?

MAK: So market capitalization, just market cap. Cap is basically the number of shares that have been bought and the stock price and then you just multiply those together and then you get the result.

DAD: Outstanding shares of a company times its current price. Yes. Now tell me one company Makenna that’s been doing crazy things over the last year. Tesla. We were just talking about it. A year ago, Tesla’s market cap was about what?

MAK: It was about $80 billion, I think.

DAD: Yep. $80 billion, but that was a year ago. And then the number of shares I don’t think changed much but Grant, what is it like now?

GRANT: Okay, people. $783 billion! From the $80 billion, all the way to $780 billion, so up by $700 billion.

DAD: Yeah. If you think about it, it’s almost 10 times from 80 to almost 800. That’s why Elon Musk is so rich, because he essentially grew that many times, because I don’t think they issued a ton of new shares. And what is the calculation again? The number of shares times the current price. Yeah, but the price has been going up crazy. What’s the current price? It’s $783 billion. Right? Well, that’s the market cap. Current price is how much a share. Let’s get it straight. 900,000 shares, shs is a share or shares. $850 per share. Wow. So about $800 billion. Now, what was the first company Makenna? Yeah. What was the first company to get past a trillion dollar market cap?

MAK: It was in China, I think it was called PetroChina?

DAD: PetroChina. Okay. And how long ago was that?

MAK: It was in 2007. And it was the first in the whole wide world to have a trillion.

DAD: And what does a Petro company do? Petrol company, petro, like Tony Petru! What does a petrol company do? What are we not going to need any more with our Tesla? Petroleum, oil, gas. We don’t need any of that. And that was a trillion dollars back in 2007. What is it worth today?

MAK: But it dropped a ton and it’s now at $100 billion.

DAD: Grant, how much did it lose? 90%. Or how much in dollars?

GRANT: $900 billion.

DAD: Yeah, I like a B because it’s like Ben, Benjamin’s all that fun stuff. So it lost $900 billion. So market cap can go up and down. And what was the first US company G?

GRANT: Apple, September of 2018, August of 2018. Sorry!

DAD: Apple hit a trillion dollar market cap and who was right behind them Makenna?

MAK: Amazon was literally a month behind them. And September of 2018, it went to $1 trillion.

DAD: And so it actually went below a trillion dollars before it came back. So it can go underneath or below and a lot of people who look at stocks and companies say how valuable is the company and they kind of look at market cap because how much are you willing to buy that share for? Times the number of shares that are out there. Who was after Amazon? Microsoft. We learned a lot about Microsoft. Now these are starting to talk a little bit about the fang stocks, right? Facebook, Apple, Alphabet, Netflix, Amazon, Google. Amazon was the one I missed. And then Microsoft is in there. And then Alphabet was in January of when Grant?

GRANT: 2020. So pretty recent. Yeah. And they were thinking

DAD: Facebook was going to be next. I just checked it a few minutes ago. They’re not there yet, they’re about $800 billion. And who was $800 billion who came out of nowhere, which we just talked about? Tesla. Yeah. So Tesla, so pretty interesting stuff, right? Market cap, pretty easy calculation. Outstanding shares times current market price goes up and down, then we have a handful. What was one last, can you guys remember? One last interesting fact about Apple that happened two years, I believe after it hit a trillion dollar market cap. Oh, it hit $2 trillion. 2 years later it hit $2 trillion. That’s a lot. So we talked a lot about trading and we talked about the market cap or sorry, the market, what the Dow, s&p 500 as well as the NASDAQ and some other stuff. And just want to throw out there if you’re looking to just dip your foot in the water, there are some different brokerage houses which are the people that help you trade stocks. Makenna Can you name one brokerage house?

MAK: We don’t actually use this but it’s called Robin Hood.

DAD: Robin Hood. Yeah, Robin Hood is very easy, it came on the scene not too long ago, has exploded with the number of people that are using it, I hear it’s super easy. It doesn’t have a ton of functionality from my perspective because I need some international markets, some foreign exchange stuff, got some other tools, bonds, mutuals, short selling, but the thing is it’s super easy if you just want to get in get a stock and what’s cool about Robin Hood, G right? When you sign up you get some free stocks. Yeah, you might get one, I don’t know if you get more than one but at least get one Yep. So Robin Hood, Makenna, do you want to name one other brokerage before we go to G?

MAK: I think it was called Charles Schwab.

DAD: Charles Schwab! I’m so proud of you honey, all right. That was the first brokerage house that I actually used. And he was kind of a trendsetter because he was one of the first out there to get like average people to invest in the stock market because he could do it through them. What’s the one we use G? AmeriTrade, like American and Trade. So yeah, we use that, it has a lot of functionality. But we just wanted to bring it up especially because if you’re kind of scared, don’t be scared, get out there, get on Robinhood you know, just get started. I wouldn’t say start you know, investing a ton without looking at it but it at least opens your eyes and Robin Hood actually lets you get into crypto because crypto, which one are we talking about Makenna normally when we do crypto or crypto quote?

MAK: Bitcoin. I was going to say that but I was a little bit hesitant.

DAD: We like to be. So Robinhood is definitely just a great place to start. And before we leave there are two quick things. For your budget, things are getting tight, we just got our stimulus checks in and look at your budget, look for your savings. Makenna’s doing a little dance, do a little dance! So the budget for your savings. Hey, now that we’re a little slow down, make sure to look at your subscriptions you pay every month, which are just like a little prick of blood every month. And if you’re not using those subscriptions, you should cancel them. Which one did we just get hit with Mak?

MAK: We got Disney plus over quarantine.

DAD: And we said we’d use it for how many months? Like, two or three months. And how long has it been now? It’s like 7, 8, 9, 10. Right? So we’re going to go watch the Mandalorian and then we’re going to can Disney plus. So yeah, let us know about that, because you help us stick to it. But check out your subscriptions. And the other thing that we can look at Makenna, which we were just talking about, is that we might need to cut out Grant, what were some of the things that we did, we did at home a while ago where they sent us the food? Blue Apron or Hello, fresh. And we paid for that or going out to eat because we get kind of lazy. So when you’re looking at your budget, you know, if we need to tighten up, let’s tighten up, dump those subscriptions, dump that extra cooking stuff at home meaning the stuff you order to cook because it’s more expensive, or the carryout stuff and add to your browser software a way to check your savings which you say what Mr. Man was that guy’s name? Mr. B. Mr. B’s the honey man, he’s always saying Honey, if you haven’t looked at Honey, look at honey because it could check your price.

MAK: This is not sponsored.

GRANT: Sponsor us!

DAD: This is not sponsored by honey. So it’s not sponsored by honey and you don’t have to necessarily use them. It’s just to make sure that when you’re ordering stuff that you’re getting the best price that’s out there. Lastly, I want to say, limited edition coming up entrepreneurial attitude, your money mindset, we’re going to have some entrepreneurs, some other successful people talking about the ups and downs of their experiences, which led them to be both successful and to be rather wealthy normally. So you’re going to hear those on Fridays for the next handful of weeks depending on how good they go. And we really thank you for being here and really enjoy your Monday off right guys? Yeah, hopefully this gets out before Martin Luther King day is over, but it probably will come out on Tuesday. Maybe you really enjoy MLK. Thanks for being here. We’ll see you next time on Money with Mak and G. Time to say goodbye. Bye!