CRA, Netflix, OpenAI, Wall Street Jargon, Die With Zero

Hi folks and welcome to the 2nd edition of Friday Finance Weekly. I am now 2 for 2! Not finance-related, but did you know that the Vatican has a book/guidelines on dealing with all things supernatural? They have updated their policies for the first time in 50 years. For an interesting read, please check the following link. 

CRA uncovered $1.3B worth of unpaid tax bills (hmmm, fraud?) from B.C.’s real estate sector between 2015 and 2023. This includes $957M worth of unpaid income taxes (the rest are fines), which is more than 5x the amount in Ontario ($178M). The audit focused on property sellers illegitimately claiming the principal residence exemption, unreported capital gains, people who reside outside of Canada and invest in property here, share transfer and corporate structures designed to mask a property’s beneficial owners, and the activities of homebuilders and realtors. Let’s look at this another way: the top five percent of Greater Vancouver homes had a median value of $3.7M, while the median owner paid income taxes of $15,800 – the lowest correlation of any North American city (Winning!) For reference, in Toronto the median value of the top five per cent of homes was $1.8M, and the median income taxes paid were $30,700. Ironically, this is the best ROI for the CRA. They invested $50M over 5 years to create a real estate audit team starting in 2019 and plan to recover more than $1B. Let’s put a political spin on this: the Government has a plan to fully recover the $1B invested/wasted on the ArriveCan app by collecting unpaid tax bills. (Source: CBC)

Netflix announced the finalization of a three-year, $150M streaming agreement with the NFL. The deal provides Netflix with exclusive streaming rights for this year's Christmas game and at least one game in both 2025 and 2026. Last year, an average of 28.7 million people tuned in for the Christmas games. This year's matchups will feature the reigning champions, Kansas City Chiefs, taking on the Pittsburgh Steelers, and the Baltimore Ravens facing off against the Houston Texans. A cable bundle, YouTube TV’s NFL Sunday Ticket, Netflix, Peacock (NBC), Amazon Prime and ESPN+ it will cost you a mind-blowing $850+ a year to access every game this season (assuming you aren’t buying Android ‘media boxes’ on Amazon). The NBA is also shaking up its agreement with TNT as well, so let's see where this all ends up. As it pertains to the NBA, I won’t miss clips of Charles Barkley’s awkward golf swing. (Source: Bloomberg)

OpenAI has struck a deal with Reddit, where by it will use content on the social platform to perfect its artificial intelligence chatbot. AI will be in for a treat, because this is also where I discovered diapers before democrats. Seriously Google this! Financial terms of the transaction are not public, but Sam Altman (CEO of OpenAI) had invested heavily in Reddit, so it will be a personal windfall for him. Apparently he didn’t lead the negotiations but, its hard to image a scenario where a CEO didn’t have significant influence on a major partnership. Reddit shares are up almost 11% this week and currently trading at just over $60 per share. OpenAI also has agreements with the Financial Times, Associated Press, Axel Springer, Le Monde and Prisa Media. Including Reddit in ChatGPT “upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit’, said Steve Huffman, Reddit’s co-founder. I for one am excited to ask ChatGPT to sort my NSFW (maybe don’t Google that) content. (Source: Financial Times)

A colleague of mine sent me an interesting article titled Translating Wall Street Jargon. My top 3 are as follows:

• I’m cautiously optimistic. Translation: I have no idea what’s going to happen.

• We prefer to gauge performance over a full market cycle. Translation: We are massively underperforming.

• The easy money has been made. Translation: I didn’t make any of it.

With this newsletter I am also debuting a new section, a book summary. This week here are 5 take aways from Die With Zero, Getting all you can from your money and your life –

• Our lives are fleeting so take a moment to ask yourself what you’re seeking out of life and seize the opportunity to realize your dreams. Do not live to make money, earn money to live the life you desire.

• The best things in life really are free, so invest your earnings into memories, not material possessions.

• Remember that your legacy is more than money and most kids would prioritize experiences with their parents over a larger inheritance check (I question this the most)

• Achieving your dreams requires courage so gamble on your happiness by taking risks when you’re young (20 – 30s).

• Delayed gratification is critical for retirement planning but should not hold you back from experiencing fulfilling live events throughout each phase of your life.

Next week, I’ll pick a book that isn’t so cliché. Note that I don’t read all the books that will be summarized; I have help from fellow teammates. Have a fantastic long weekend, and please don’t hesitate to forward this email to friends and family. Cheers.