So in e-commerce, etsy missed yesterday in our course member live stream. We talked about hey. If etsy misses, there might be an opportunity to buy it and kind of leaning towards the belief that all ecommerce is going to miss. Because, since january, i've been making the argument that we want to be out of consumer discretionaries and get away from people spending money online, because the indicators we're seeing whether it's through web traffic, google search trends, freight information, shipping information or just that e-commerce is slowing down.

And so what have we seen? We've seen amazon miss we saw especially with weak guidance. We saw weak guidance from etsy. We saw a wayfarer down 10 shopify down 16. You know etsy, we'll take a look at what etsy's doing right now here now that the market's open, etsy uh down 17 right now, it's about to be under 90 - i mean it is.

It is straight selling off right now holy moly. Look at that 17 on etsy: let's go to wayfair, just to get the updated number 16 now amazon, now down 2.7 and shopify down 15, roughly the same as what we had during pre-market. This is a sign that the market is like. Oh crap, we should have gotten out of e-commerce in january.

Let's get out of e-commerce. Now now i actually think there could potentially become an opportunity when we get low estimates for q2, maybe even q3 and at some point over the next six months. I wouldn't be surprised if there's an opportunity to really get into these ecom stocks. Super cheap, see, etsy, expects revenue in the range of about 540 million to 590., and this is uh almost 11 to the midpoint below the 628 million dollar target.

Etsy only saw its online sales raise 5.2 percent from a year ago, and the ceo mentions quote we're emerging from an unprecedented time and with that etsy has unprecedented growth in a world of so many more choices. Our guidance implies, somewhere between a decline of low to high single digits in the hc etsy marketplace year over year, in other words, they're forecasting negative growth. It's like that's scary, like nobody wants negative growth in e-com uh, and so obviously, one of the things that's most interesting in my opinion, is anytime you're studying in a sector that's going down what i always recommend is take even just one company, you don't even necessarily Have to go with all of them. Take one company that you really really understand, like etsy, for example, take that one company and go through the earnings call, because in the earnings call you're going to get a sense of what the complaints are, what the issues are.

Uh, what how you know sort of the feeling of the executives and the boards uh board members now? Sometimes people wonder they're like okay, fine, then kevin. Where do you get the transcripts? Because i really don't want to listen to it. You know you'd rather hit like command f and go through them. Personally, i like using seeking alpha, i mean oftentimes i'll use the bloomberg terminal, but you could just use seeking alpha and i'll show you just as an example how you could go through this, so i have not gone through the etsy one yet, but i'll show you Just as an example of what we could do, so the first thing that we could do is we want to look at potentially pricing or or pricing power right.

So, let's see what we have uh, we let's see here uh this has to do with stock based compensation. Okay, if the pandemic has taught us anything, it has really strengthened our conviction even more in the enormous size of the price that we believe we have at etsy and just uh dimensionalizes uh. If, for a second okay, that is like a very weird second uh sentence that they've got over here, usually what i'm looking for is like pricing power in terms of like their the executive's ability to raise pricing, see there. You go look at that when we announce the price increase and keep in mind.

This has actually led to a boycott of etsy over the last few months by a lot of etsy sellers. So you know these are headwinds, but anyway, when we announced the price increase, the price increases takes up our take rate, so it takes up our ability to continue to spend deeper in the roi curve without compromising roi thresholds. Okay, this is like the cfo likes, really big words. What he's saying is hey.

When we increase prices, we can invest more into our marketing budget, which remember, i actually like what etsy does when it comes to their marketing. They do this special thing where they'll advertise not etsy.com they'll advertise one of their stores, which which are other third-party sellers, and if etsy converts a lead to that store, then they split the marketing costs with that store. So it's really like no risk for the store and it's smart spending for etsy, because now they're spending and then actually supporting some of their businesses at the same time rather than just themselves. So i think that's great and that's what they talk about here.

So, okay, interesting talk briefly about the price increases here in mar. Okay, let's see if we could learn something about the consumer here, so let's go to consume all right uh. I personally couldn't be more relieved to see it. It also means that in the near term, here we go they're talking about relieved about all the covet spending that they had right.

It also means that in the near term, okay, here we go we'll have to fight harder and invest more and continue to earn and grow. Etsy share of the wallet with consumers, which is the only way that our much larger base of sellers can keep growing their sales. We're up for that fight. Okay kind of interesting, if you're talking about having to like fight for share of wallet, because that's a way of implying that competition is getting a little bit more difficult right.

Obviously, you're going to have issues for ukrainian sellers. I've actually brought 3d printed stuff from ukraine before and i think to myself. I probably couldn't do that anymore from those stores. Although then again, i haven't tried, because i was really into buying stuff on etsy during the pandemic, and i kind of lately haven't been, which you know, oftentimes, like you're your own best piece of research.

You know you're your own best researcher, which i think is quite interesting. So uh people continue okay, so here this this is interesting to me, because now we start learning about the consumer. Take a look at this we're emerging from an unprecedented time. This year is going to be unpredictable for us.

Okay. Well, that's also bad, because right now, you're signaling, that hey uh, we might have no idea what's to come well and that there are many moving parts, including both tailwinds and headwinds, and then this is interesting. I don't like this: people continue to be nervous about global events and the economy and we'll have to fight harder for that consumer's time and money. So i'd like to see you know other than just like overall sale metrics.

What are what do they see because see? Looking at the last quarter is lagging, but when the executives are like yeah we're gon na have to fight harder, yeah we're gon na have to try harder and i'm not actually getting like concrete info. It makes me think they're going to miss again next quarter. As you outread between the lines remember, these are sales pitches and when a sales pitch is weak, it's a red flag, see like end phases. Sales pitch last quarter was like.

We don't have supply chain issues in asics, we're going to kill it. That's basically the tone of the ceo last quarter and i'm like i, you know i looked at the morning of the end phase earnings call we went through it with uh course, members uh in the old earnings called the morning of their their second quarter, earnings, uh Or well, we went through their fourth quarter, earnings uh right before their first quarter, earnings which come out in the second quarter uh and we're like look look how like bullish these things are. This is this is like a good leading indicator for how it might perform or the stock might perform after earnings or how their earnings might go. And that's that's exactly what happened.

Uh, the stock ran from like 150 bucks to 188 bucks, that's great, okay, so uh the deceleration we started to experience in feb, oh okay, this is this is terrible. This is terrible. This is the opposite of what you have seen in the travel sector. This is the opposite of what you've seen in the banking sector, with arguments that consumers are spending more look at what they're saying the deceleration in sales we experienced in february.

Listen to this line, folks worsened throughout the quarter! Well, crap! You know if you're on, if you're like declining throughout the quarter like this, then where are we now like if we're here now, you know, what's ahead of us, that you know like even more of a decline, so uh oops uh yeah, i mean that's, that's quite Crazy, so uh, then you've got from a graphic geographic perspective. 45 of etsy's marketplace in the first quarter was from transactions where either uh the buyer or seller were outside the united states, see that's actually terrible it, and so, let's, let's touch on for a second, why that's terrible? Well, it's terrible! Because what happens? What happens when you have uh, when you have a situation where the global economy is slowing down, everything's slowing down in uh europe? We just talked about that at the beginning of this livestream things are slowing down in china. No doubt you can't get etsy sales in ukraine because you got a freaking disaster going on in ukraine, so of course uh. This is a terrible thing for for etsy.

I have been enthused by etsy's valuation coming down, but i said i would wait to earnings and i'm telling you so far. This reiterates to me that there's pain coming to e-commerce and it is not stopping anytime soon. Uh. You know look at this year over year.

They had strength because of germany dude that's bad. I do not want to hang my hat on germany right now. We just saw that massive manufacturing myth. We just uh heard what the what the uh you know with the higher levels over at the ecb are saying.

This is a disaster, so the etsy marketplace, category performance was marked by strength and paper and party supplies for in-person events. How interesting look at that? People are actually spending more money on the etsy marketplace right now for in-person events and stuff. Consistent with reopening trends, i mean look, i hate to say it, but if we're worried like if we're focused on reopening trends, people are going to spend more of their money in stores, because they're traveling right, not so great on the consumer, let's see what else they Say about the consumer despite there being more options for consumers, time and money? Okay, great uh, let's see here, the strength of the second quarter of 2021 was driven by the tailwinds of economic stimulus which hit consumer bank accounts in april of 2021.. Contrast that with uh with where we are now mobility indices are approaching 2019 levels and pent-up demand may drive this even higher, meaning the possibility of more movement and travel and less time for home shopping dude.

This is a horrible earnings call like i mean like i'm all for like buying companies when they go down, but i'm not just going to buy a stock. That's down. You know 17, because i'm like oh yeah, yolo by the dip. This is a terrible earnings.

Call! That's telling me things are just getting even worse: the reopening and macro uh headwinds and experiences as a company and, of course, are being felt in households and wallets of independent sellers, yeah, okay uh. What else do we have here? So here's a question from an analyst you're uh. To what extent are you in a relatively favorable position compared to your e-commerce peers, like you know, shopify or amazon, or whatever great question uh, so they say to be clear: etsy sellers set their own prices, not something etsy is involved in uh, let's see here. Obviously, it's tougher for them to compete against something, that's mass-produced.

You know etsy's a little bit more custom. We know that already. That's why etsy's interesting in the first place - and let's see here if you look at a basket of goods analysis, not chosen, wait. Etsy sellers set their own prices.

It's not something etsy's involved in, we have said in the past, and it continues to be true that our sellers have so far on average. If you look at a basket of of goods, uh not chosen to take their prices up by much at all. Okay, that's actually a bad sign and far less than what you're reading in terms of consumer inflation. So, in other words, if you want to find less inflation go to etsy, because people aren't raising their prices well, golly.

What is that signal to you? Folks? That's it's a very simple thing: there's one thing that signals to you: when sellers don't raise prices, when sellers don't raise prices, what does it mean? You should be telling yourself this right now lack of pricing power right, like that's a bad thing like like look. I've only been going through this earnings call for five minutes and i'm devastated like this is bad. I honestly don't even want to read any more of the etsy earnings call. I i got.

I got enough of the etsy earnings called like i. I got it. Your sellers. Don't have pricing power.

Y'All uh are on a declining trend of e-commerce sales, which makes me even less interested in remotely considering uh the other uh. You know online uh retailers, whether that's wayfair or or shopify. I'm curious, though, because of i kind of want to know like hey well, like does wayfair, for example, have pricing power? Is this just etsy? My suspicion is usually what you see is these sorts of issues are industry-wide they're, usually not uh, sort of just relegated to one company. It's usually an industry trend.

This is why you see like on cnbc all the time that institutional, oh we're rotating here, now we're rotating here now or whatever right. Let's try it! Let's, let's here i got uh wayfair right here: let's do it together really quickly, all right, but just in the last two months, since a lot is transparent and transpired and rising prices across the retail universe at troubling geopolitical events, our mass customers in the us and Internationally appear, understandably, more focused on where they are spending their money. Okay, this is a horrible thing. Our customers appear more focused in where they're spending their money, okay, so in other words, our customers ate shopping at wayfair.

It's a terrible thing. Uh, let's see here while raising well rising energy prices, are headwinds to shipping and fulfillment. Some of the biggest pain from last year. Uh pains are dis, dissipating, okay.

Well, that's actually a good thing. I, like i like to hear that some of so that's kind of like some of the supply chains and logistic problems are getting better. That's a good thing for the broader economy doesn't necessarily mean it's better for e-commerce right. So, let's see here, price points.

Okay, doing so cut the distance okay they're trying to i mean they've, always been talking about adding more fulfillment centers and therefore lowering the distance that they have to ship stuff to lower costs. Okay, we see customers respond. Okay, interesting here we go so we are already benefiting just as availability was getting better now, availability is getting better at a very fast rate. This is very cathy woodyan actually right here, availability going up at a faster rate means inventories are going up right.

This is your kathy woodian inventories and it's something to pay attention to, because that can actually lead to prices coming down. If you have too high of inventories uh, okay, so let's see what happens is our competitive retailers. What they've done is they've brought they've bought their inventory for the next few months already and they bought it at a certain price and they've locked in that price. Oh, my gosh they're now low to discount.

Oh no, oh, no they're now low to discount because it could put them in a bad position on retail relative to cost, while on our platform. Okay, this is a very confusing line here. The suppliers sitting there price ever setting their price every day and that price is driving retail, wait that i don't know if that is just a bad transcription, but it is a horrible sentence, but i i think roughly what they're saying here is: you know like you? Don't necessarily want to drop the price, because that signals bad things for the consumers, but basically you might have to drop prices, and so look at that right after they talk about having excess inventory. Look at what they talk about.

If you have extra inventory, you just want to turn it into cash or focus uh or cash or less focused or be less focused on the profit margins. This transcription is horrible right. So basically, let me transfer. Let me re-transcribe this transcription more inventory focus less on margin, just get the cash.

That's essentially what he's saying here or her whatever i have no idea who it is: they uh so uh, okay, also not good. So what else do we have here, as well as an argument to enrich and ensure accurate and complete product intuition? This enables us to respond to customer needs, uh doing so can significantly okay. Well, that was the distance thing. We already read that we read this section here: okay, it's just the opening price point, which is where these folks do their business.

At home. We have a logistics network, that's optimized! For deliveries. We can build okay, whatever y'all just yapping over here. We're not oh look at this.

Look at this aha wow. Look at the word they're using this is terrible. This is actually like all just like bad news so far like it's no surprise to me actually, now that the qqq is selling down, because it's like sorry, this is just bad news. Uh look at this okay, if we think uh, okay, right here right here.

This part now that said, if there is a transitory change in the piece of a cost structure that we manage uh and we think that's going to abate soon, we're not necessarily going to pass it through and raise the price of the item and then drop it Little by little thereafter: okay, what? What does this mean? Folks, it's literally the same thing as the etsy call they're, basically like wayfair, is literally telling us. Inflation is transitory, so we won't raise prices because we can't this is terrible uh. I laugh because it's painful uh. It's it's quite painful anyway.

I was gon na put that there we go yeah. No, this is this. Is these are bad? These are bad earnings calls. These are not good, not happy here so uh, quite bad uh, okay wow, so consumers are sucking and if, like those little samples there, you can see it doesn't take a lot of time.

Those little samples there are just an example of disaster. So sorry, consumers things are not good, but it is. You know when we start seeing this sort of ecommerce uh pain. It is a little bit of an indicator that maybe we will start seeing the kathy woody in price drops.

Maybe she's right, we'll see. We shall see.