002: Baking Into Netflix

Baking Into Netflix

Busy. Busy busy busy. Only me?

Aaahhh you guys, it’s been SO busy launching The Invested Practice to you darling Founding Members. Welcome to the first scheduled issue. Here we go!

During the holidays, I offered, at separate times, to host in January (a) a girls wine tasting night at my house, for which I carried from New York to Zurich three Napa Valley chardonnays so I could represent for my American wines (like I know anything about American wines, but when you live abroad, you do what you can for your home country YAY PATRIOTISM as expressed through wine purchases at Duty Free) AND (b) throw a complicated Amazing Race-style birthday party for a close friend involving multiple locations, clues, challenges, and birthday cake. In the holiday fog, January seems awfully far away. I hadn’t really looked at the calendar for either one.

About ten days ago, it occurred to me for the first time that both parties had been scheduled on the same weekend. And the weekend was the one after I announced The Invested Practice.


I got a little stressed about fitting in my regular humdrum daily investing practice in the midst of it all. UNTIL I was baking cake for one party and cookies for the other all at the same time – EFFICIENCY! – and I realized a couple of things:

  1. My life is fantastic. I get to bake in the afternoon and work in the evening if I so choose, or go to Pilates in the evening and work during the day, or…you get the point. It’s flexible. I do not take that flexibility for granted and it makes me so physically joyfully happy.
  2. Investing ideas are everywhere, even – or perhaps especially – in non-formal investing practice times.

I’ll explain. I was standing at my counter mixing my Brown Butter Peanut Butter Chocolate Chunk Cookies, watching Project Runway on Netflix on my computer, as you do. I like to bake and cook, and I like to watch shows while I bake and cook. And also while I do yoga, actually. Is that a bad sign, that I’m dividing my attention?

When I was a kid, we were taught in our meditation classes that we should never “divide the mind” by doing two things at once. Never. So I grew up terrible at multitasking. The conventional wisdom is that women are good at multitasking, but I must have missed the day they taught that at lady school because my brain feels scattered and out of control as soon as there’s more than one thing to pay attention to. And yet, somehow, weirdly, I like to have a little something to watch while I’m doing creative activities.


I was staring at the computer screen, absentmindedly letting my hand mixer wrestle with the cookie dough, and I realized “I’m watching Netflix. That’s a publicly traded company. I’ve been seeing stuff online about Marie Kondo’s new organizing show, which I think is on Netflix.” Switched off the mixer, closed Project Runway, found Marie Kondo’s show, “Tidying Up,” and started it.

I LOVE Marie Kondo. Her book, The Life-Changing Magic of Tidying Up, was a huge inspiration for my Investing Practice when I first began because her process was similar to what I wanted to do with investing. Start with a gratefulness practice and meditation. Notice, thankfully, the experience of the process. And make the process joyful, so that I’ll stick with the practice, rather than focusing on only the result (though we all want the result!).

Turns out that, while baking, it’s kind of hard to properly watch Marie Kondo’s show because there are subtitles, and I turned away from the screen a lot to grab ingredients or tools out of a cupboard or reading the cookbook.

I kind of…didn’t love it?

I didn’t think the show did her method justice. She’s all about the beauty of simplicity and the inner moments of sparking joy that lead the a permanent lifestyle change. None of that internal process translated very well to the screen. The couple in the first episode did clean their house and seemed very happy at the end, but that probably would have been true whether they had used Marie Kondo’s method or just spent a few weeks clearing their clutter on their own. So…basically I need to watch another episode when I’m not half-turned away all the time and can pay the kind of proper attention Marie Kondo demands.

I loved finding investing in the midst of cooking. What a boost of energy and joy to see hidden depth in my kitchen, and to do investing research – Investing Practice – while making my cookies by watching a TV SHOW.


Come on! How amazing.

It stayed with me after everything was done: I kept thinking about Netflix. I researched it quite a while ago, when I was first learning, but haven’t looked at it since because the price stayed so hideously high.

I wanted to look at Netflix’s Mission. Do they have one?

A few days later, I sat down when I had an hour and started with the company’s investor-facing materials. I wanted to see how Netflix positions itself and if they talk about Mission at all. I searched online for “netflix investor relations” and found their website, with this statement front and center: “Netflix is the world’s leading internet entertainment service with over 130 million paid memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.”

Newbie Note: That’s helpful to someone who has never heard of Netflix. Let me tell you, most companies don’t bother to present such a succinct statement about what they do. In addition to that paragraph, there were links to “Long-Term View” and “Top Investor Questions” along with accounting, culture, and governance. It’s very unusual to have a “Long-Term View” section outside of the company’s annual report, and I do see FAQ sections sometimes, but usually it’s stuff like “where can I find the latest annual report?”. It’s helpful to be able to quickly read over what Netflix WANTS us to know about them. It’s not exactly the unbiased truth, but it is interesting.

Netflix Approach to Governance. Now that intrigued me. Beyond buzzwords, most companies don’t talk about their governance style. If you’re interested in management and how companies are run, I recommend taking the time to read Netflix’s opinion. It took me about 7 minutes to read, but I’m a fast reader (my one skill! that and cookie baking! My two skills!).

Then, I took a 2-minute break to open a new browser window to review and heavily judge Meghan Markle’s outfit of the day. If you are uninterested in the fashion choices of Prince Harry’s wife, that’s fine, just skip right ahead.

Quick Fashion Review of the Duchess of Sussex’s outfit on January 14, 2019: The COLORS they are so bright. That lipstick red doesn’t work on her, but I think she could have gotten away with it without the matchy-matchy shoes and brown (why brown!?) bag that adds nothing. Meghan, girl, I know everyone’s been complaining that you wear too many neutrals and are too boring. This is NOT THE WAY BACK. Please. Also, her new country is going through a lot of uncertainty right now with Brexit, so would it kill her to wear a few more British designers to support the British fashion industry? I don’t get it. This outfit alone had not one British designer (American and Canadian clothes and bag; I didn’t bother to check provenance of the jewelry) and it screams missed opportunity to me. I should say something nice…the dress pretty much fits her, so that’s good.


Refreshed, I went back to Netflix’s Approach to Governance document: This was a great piece of corporate strategy and positioning. I believed them that their directors are more engaged, interested, and efficient in meetings because management has helped them prepare in a smooth and transparent way. It directly says on page 1: “it is not clear that [non-Netflix] directors receive the information they need to make fully informed decisions on all key matters. Partly, this is due to an “information gap” that exists between management and the board: Directors have a less-complete understanding of the company and the market than executives because of their limited exposure to day-to-day activities and their independence from the business.” I agree. That information gap leads to directors overly trusting management, which often gives management the leeway to develop too much power without oversight.

It’s ironic that this statement comes from a company with as powerful a founder/CEO as Reed Hastings. I do wonder if all this excellent talk would hold up if the Netflix Board moved to fire Mr. Hastings.

It also says Netflix believes directors must provide an “extreme duty of care” to the company. I agree.

When I read “extreme duty of care,” also on page 1, it sparked joy! To have someone writing about fiduciary duties in a zealously supportive tone? As something to be forcefully and structurally supported? That is RARE. It warmed my cold lawyer heart with so much joy, I felt like I was fluttering.

In the US, Boards of Directors have two primary duties as fiduciaries to the company:

(a) duty of care, and
(b) duty of loyalty.

It will not surprise you that both duties have been extensively tested in the courts, because real-life decision-making is messy and people are terrible sometimes, but the basics are pretty well established.

Duty of care means that the Board member must act in good faith in the company’s best interest, and that she must have reasonably informed herself before making such decisions.

Duty of loyalty means that the Board member must act in her best judgment for the success of the company, not by self-dealing nor for her own benefit (often also called the business judgment rule).

Funny story: when I was in law school and my professor started talking about the business judgment rule, I decided that avoiding self-dealing as a director was extremely obvious and therefore probably not something we were going to talk about a lot…until about three class sessions later, when we were still talking about the business judgment rule, and I realized that actually a LOT of directors and executives have a LOT of trouble not acting in their own interest when they’re supposed to be shepherding a company as a fiduciary. Irritating.

Charlie Munger, Warren Buffett’s less-famous investing partner, is a lawyer. He tells the story of how he and Buffett were involved with Solomon Brothers in the early 1990’s when the CEO was told of an illegal bid made by one of the company’s traders, which the CEO hadn’t know of and didn’t cause. Solomon Brothers’ general counsel tried to convince the CEO to report the impropriety even though it probably wasn’t legally required, because it was the right thing to do. Instead, the CEO did not report it for months, it eventually blew up into a huge scandal which got him fired, and Warren Buffett stepped in to successfully restore the company’s reputation (and his investment). (Poor Charlie’s Almanack, 3rd Ed., p.259-260.)

Munger’s point? It’s not about technically avoiding cheating or strictly staying on the right side of the law. Behaving well is about doing the right thing with integrity.

Netflix focusing on specific actions to engender their directors upholding an extreme duty of care gives me sparks of joy because it’s so unusual. Well done to them.

I thought a bit more about Mission. There was nothing on Netflix’s front page about stakeholders, being useful to the world, or the tenets of conscious capitalism. Instead, I had the sense I was learning about Netflix’s values, which, frankly, also matter to me quite a lot. Are values and Mission the same? Or different?


  • Look at your hands, right now. What company makes the device you’re reading this on?
  • Look up their investor relations website and check out what they write for you, their potential investor, on their front page. No need to go crazy researching in depth, just observe and read what their PR team wants you to see.
  • If you’re in the market for a Napa Valley chardonnay at JFK’s Duty Free, I recommend the Beringer Private Reserve over the Stag’s Leap…but what I actually learned was that oaky wines are not really my thing. Successful educational wine tasting!


The man who gave us low-fee index funds, John Bogle, passed away on Wednesday. His contribution to investing cannot be overstated; before he created them at Vanguard, there was no low-fee option for passive investing, which means people with smaller amounts of money, like me, would have been stuck with only high-fee funds (or doing it myself, as I’m doing now). But beyond that, though he could have been one of the world’s wealthiest people, instead he chose to share the wealth with others. This is an opinion piece in Bloomberg about Bogle’s influence beyond index funds, and it’s well worth reading as we position ourselves to be truly wealthy one day, and make these same kinds of decisions about our own wealth.

1 thought on “002: Baking Into Netflix”

  1. After a year of following along and not really putting my nose to the grindstone everyday, I’m going back and re-engaging all the newsletter’s. This was a great one, which forced me to learn new things about multiple companies I had previously looked into. Great guidance was given and received. I really liked checking Apples Investor Relations and finding a lot more about them and the respectable things they do to make the world a better place.

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