Rising Interest Rates & Discovery Inc. (DISCA)

Interest Rates Rising!? Discovery Channel Stock Pick Analysis

Today we’re going to review the broader market (SPY), see what rising rates (TLT) mean, and then we’ll also go over our long Discovery (DISCA) thesis.

The broader market is looking strong. Small-caps just hit new highs and overall breadth is solid. Sentiment reset itself and now it’s acting as a neutral to bullish tailwind for the market.

The main hurdle markets have to face going forward is rising rates. The yield on the 10-year is hovering just below 3.1% and the rate of change in yields is at levels that usually precede stock market volatility. There’s a circular relationship between yields and equities. When yields rise fast, we see stock market volatility, which in turn causes people to flood into bonds which lowers bond yields again. So it’s a self correcting process. We’ll probably see this cycle play out again soon with another small sell off in stocks. But that will hopefully put an intermediate ceiling on yields and clear the way for a more sustained stock rally.

A stock our team is digging into to play this trend is Discovery (DISCA). You guys are probably familiar with the Discovery channel with programs like Shark Week and MythBusters. Discovery Inc is a global media company that owns Discovery channel and more including TLC, Animal Planet, HGTV, Food Network, and the Oprah Winfrey Network. They have 400 distribution feeds in 40 different languages around the world.

The stock has been beaten down the last few years because of the “old media” narrative and the rise of cord cutting. These are legit reasons, but now the stock is trading 50% below its price from a few years ago and it’s looking like the market has overdone it. We are now looking at going long.

If you’d like to learn more, make sure to watch the video above.

And as always, stay Fallible out there investors!



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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.