1 00:00:00,120 --> 00:00:03,480 It was only two days ago that a Wells Fargo analyst downgraded 2 00:00:03,480 --> 00:00:05,680 Amazon stock. He took his price target from 3 00:00:05,680 --> 00:00:10,680 2:20 to 180, which Amazon today trades right around 180. 4 00:00:11,000 --> 00:00:14,640 So he's basically saying that Amazon doesn't have any upside. 5 00:00:14,680 --> 00:00:17,960 It is at its current fair value. That, of course, wasn't great 6 00:00:17,960 --> 00:00:20,520 for Amazon stock. The rest of the market traded up 7 00:00:20,520 --> 00:00:24,200 and Amazon stayed still. Well, only a day later, another 8 00:00:24,200 --> 00:00:27,480 analyst named Mark Mahaney upgraded Amazon stock. 9 00:00:27,760 --> 00:00:30,720 He upgraded it from 2:20 to 2:50. 10 00:00:30,760 --> 00:00:32,400 So we have a bit of disagreement here. 11 00:00:32,400 --> 00:00:35,360 Amazon is a divisive stock. There is analysts down grading 12 00:00:35,360 --> 00:00:37,640 it and analysts upgrading it at the same time. 13 00:00:37,640 --> 00:00:40,160 Since we already went over the downgrade of Amazon stock, I 14 00:00:40,160 --> 00:00:41,960 think it would be good to look at the upgrade. 15 00:00:42,200 --> 00:00:45,200 Luckily for us, the analysts. Mark Mahaney went on to CNBC to 16 00:00:45,200 --> 00:00:49,120 explain why he believes the stock is currently worth 250. 17 00:00:49,440 --> 00:00:51,760 So he sees some major upside in Amazon. 18 00:00:51,760 --> 00:00:55,000 It's his very top pick and I'll be reacting to his appearance on 19 00:00:55,000 --> 00:00:57,160 CNBC today. Now, of course, we have some 20 00:00:57,160 --> 00:00:59,960 other news to get into. Tiktok is once again being 21 00:00:59,960 --> 00:01:02,720 targeted by the US government. This time it's local 22 00:01:02,720 --> 00:01:04,239 governments. The District of Columbia's 23 00:01:04,239 --> 00:01:07,280 Attorney general went on to CNBC and explained that Tiktok is 24 00:01:07,280 --> 00:01:10,680 nicotine for children. We'll be looking into why Tiktok 25 00:01:10,680 --> 00:01:13,000 is so bad for kids according to the government. 26 00:01:13,040 --> 00:01:16,040 We also have news that Costco is expanding into different 27 00:01:16,040 --> 00:01:20,720 concepts like building Costco's underneath apartment complexes. 28 00:01:21,080 --> 00:01:23,920 As a long time Costco shareholder, I'll share you my 29 00:01:23,920 --> 00:01:27,280 thoughts on this new adaption and the ability for Costco to 30 00:01:27,280 --> 00:01:28,880 innovate. And then of course, in a couple 31 00:01:28,880 --> 00:01:31,880 days we have Tesla's robo taxi reveal coming up. 32 00:01:32,240 --> 00:01:35,040 We'll be looking over what to expect and how this is a make or 33 00:01:35,040 --> 00:01:38,040 break moment for Tesla. And then finally, as a little 34 00:01:38,040 --> 00:01:40,680 bit of a bonus, we have some Tik Toks to react to. 35 00:01:41,000 --> 00:01:44,200 This time it's Tik Toks of Google employees and a Day of 36 00:01:44,200 --> 00:01:45,760 the life. We've seen these type of videos 37 00:01:45,760 --> 00:01:47,640 before. We also have someone visiting 38 00:01:47,640 --> 00:01:52,200 the offices of Salesforce and we have, I think this is 1 of a 39 00:01:52,200 --> 00:01:54,880 young person that has like $100,000 that he's putting into 40 00:01:54,880 --> 00:01:56,640 meme coins. We'll be looking at that as 41 00:01:56,640 --> 00:01:58,200 well. I'll give you my reaction. 42 00:01:58,280 --> 00:02:00,680 So as always, we have a lot to get into in this episode. 43 00:02:00,680 --> 00:02:03,000 Let's go ahead and jump in now. We start today off with the main 44 00:02:03,000 --> 00:02:06,000 story, which is Amazon, a stock that I've been following for 45 00:02:06,000 --> 00:02:07,760 years. It's one of the main holdings in 46 00:02:07,760 --> 00:02:09,919 My Portfolio. If we look at the story fund 47 00:02:09,919 --> 00:02:14,840 here, Amazon is a $77,000 position, currently $20,000 in 48 00:02:14,840 --> 00:02:16,600 the green. It's been a great holding so 49 00:02:16,600 --> 00:02:19,040 far. And overall, I feel very bullish 50 00:02:19,040 --> 00:02:22,480 about Amazon, both as a customer and as in Fester. 51 00:02:22,680 --> 00:02:24,600 I use the product, I use the company. 52 00:02:24,640 --> 00:02:27,640 I constantly have boxes of Amazon products on my front 53 00:02:27,640 --> 00:02:29,800 porch. I'm always ordering stuff. 54 00:02:29,800 --> 00:02:32,920 My wife is as well. Our orders per year online seem 55 00:02:32,920 --> 00:02:36,040 to go up every single year as it's just so convenient. 56 00:02:36,040 --> 00:02:38,400 Amazon gets things to your house so quickly. 57 00:02:38,760 --> 00:02:42,480 Not only that, I'm a customer of AWS, which is Amazon's web 58 00:02:42,480 --> 00:02:44,240 services, a major portion of the business. 59 00:02:44,520 --> 00:02:48,560 This website, Qualtrim, is hosted on AWS, so I use multiple 60 00:02:48,560 --> 00:02:51,720 parts of Amazon's business, whether it's Amazon Prime Video, 61 00:02:51,960 --> 00:02:55,640 watching movies, ordering products, or the web service. 62 00:02:55,680 --> 00:02:58,120 I use all of it. And it's grown a bit of a 63 00:02:58,120 --> 00:03:01,200 conviction to where I think this company is on to something. 64 00:03:01,480 --> 00:03:04,080 They play a bigger and bigger role in people's lives every 65 00:03:04,080 --> 00:03:06,160 single year. And I believe the intrinsic 66 00:03:06,160 --> 00:03:09,200 value of Amazon continues to grow over time as they make 67 00:03:09,200 --> 00:03:11,200 lifelong connections with customers. 68 00:03:11,760 --> 00:03:15,040 But regardless, a couple days ago, an analyst from Wells Fargo 69 00:03:15,040 --> 00:03:18,160 downgraded Amazon, asserting that the stock was no longer 70 00:03:18,160 --> 00:03:22,320 worth $220 per share. So we had a price target of 220, 71 00:03:22,760 --> 00:03:26,240 and then he downgraded it back to 180, which is where it trades 72 00:03:26,280 --> 00:03:28,360 right now. So this Wells Fargo analyst 73 00:03:28,360 --> 00:03:30,600 basically said that there's no more upside in Amazon. 74 00:03:30,600 --> 00:03:34,040 And he gave 2 primary reasons. One was that the cloud growth of 75 00:03:34,040 --> 00:03:36,760 Amazon's great, but it's not enough to overcome the 76 00:03:36,760 --> 00:03:40,120 challenges and the investments in the other businesses, the 77 00:03:40,120 --> 00:03:42,360 primary investment being Project Kuiper. 78 00:03:42,880 --> 00:03:45,800 Now this caught my attention when I see the analysts 79 00:03:45,800 --> 00:03:49,040 concerned about Project Kuiper. I wanted to look further into 80 00:03:49,040 --> 00:03:51,400 this. If you're not familiar, Project 81 00:03:51,400 --> 00:03:54,120 Kuiper is the copycat of Starlink. 82 00:03:54,200 --> 00:03:56,600 Now I currently have a Starlink with the Starlink service 83 00:03:56,600 --> 00:03:59,480 because it allows me to go camping way out in a remote area 84 00:03:59,480 --> 00:04:02,800 in the woods next to a lake, a place I normally couldn't stay 85 00:04:02,800 --> 00:04:05,960 because there's no cell phone signal or Internet access. 86 00:04:06,280 --> 00:04:09,680 With Starlink, you can just aim it at the sky and suddenly you 87 00:04:09,680 --> 00:04:12,600 have high speed Internet and I can still manage my business. 88 00:04:13,040 --> 00:04:16,079 Starlink allows for a lot of freedoms to go places you 89 00:04:16,079 --> 00:04:19,680 couldn't go before and still have Internet access, and it 90 00:04:19,680 --> 00:04:22,360 allows a lot of homes in remote areas to have access to the 91 00:04:22,360 --> 00:04:23,800 Internet that they couldn't before. 92 00:04:24,160 --> 00:04:27,320 I think that Starlink and satellite Internet is one of the 93 00:04:27,320 --> 00:04:30,360 most incredible innovations over the past decade. 94 00:04:30,840 --> 00:04:33,520 So I wasn't concerned about Amazon moving into this 95 00:04:33,520 --> 00:04:35,720 business. In fact, I was excited that 96 00:04:35,720 --> 00:04:38,840 there's some other competitor moving into this this industry. 97 00:04:39,040 --> 00:04:41,480 But this analyst sees it differently, and he is concerned 98 00:04:41,480 --> 00:04:44,480 that the major investments going into Project Kuiper will lower 99 00:04:44,480 --> 00:04:47,280 the margins of Amazon, at least in the short term. 100 00:04:47,280 --> 00:04:49,880 A recent report from the Wall Street Journal has the same 101 00:04:49,880 --> 00:04:53,360 sentiment, saying that Amazon's earnings machine might take a 102 00:04:53,360 --> 00:04:56,000 breather. For how long is the $2 trillion 103 00:04:56,000 --> 00:04:58,360 question. They note the expected growth in 104 00:04:58,360 --> 00:05:01,200 Amazon's operating income, saying Amazon's operating income 105 00:05:01,200 --> 00:05:06,400 is expected to surge 69% this year and average 24% annual 106 00:05:06,400 --> 00:05:10,520 growth over the next three years, vastly outpacing the 11% 107 00:05:10,520 --> 00:05:13,560 revenue growth the companies expect to average over the same 108 00:05:13,560 --> 00:05:15,440 time. But this might be a challenge 109 00:05:15,560 --> 00:05:17,880 given Amazon's expanding ambitions. 110 00:05:18,120 --> 00:05:21,760 Most notable amongst those is Project Kuiper, a low orbit 111 00:05:21,760 --> 00:05:24,440 satellite network designed to provide broadband Internet 112 00:05:24,440 --> 00:05:26,640 access to underserved parts of the globe. 113 00:05:26,680 --> 00:05:29,360 So Amazon is in the phase of just getting started with this. 114 00:05:29,360 --> 00:05:31,600 They've launched up a couple prototypes and they're set to 115 00:05:31,600 --> 00:05:34,400 launch their actual satellites in 2025. 116 00:05:34,720 --> 00:05:36,280 They're going to launch like 80 of them. 117 00:05:36,560 --> 00:05:39,880 So they are way behind Starlink. They say that Kuiper is a 118 00:05:39,880 --> 00:05:42,360 program near and dear to the heart of Amazon's now 119 00:05:42,360 --> 00:05:46,400 spacefaring founder Jeff Bezos. It is also far from a sure 120 00:05:46,400 --> 00:05:49,680 thing, particularly given the lead of Elon Musk's Starlink 121 00:05:49,680 --> 00:05:53,760 service, which recently sent up its seven thousandth satellite. 122 00:05:54,280 --> 00:05:55,960 So Amazon is launching up how many here? 123 00:05:55,960 --> 00:05:58,400 They're they're planning to launch 83. 124 00:05:58,760 --> 00:06:04,080 And Starlink has 7000 in the air and or low orbit. 125 00:06:04,480 --> 00:06:06,680 And that makes sense because whenever you hook up to whenever 126 00:06:07,000 --> 00:06:10,160 you hook up to Starlink, it literally takes within 10 127 00:06:10,160 --> 00:06:12,360 minutes and you're hooked up to a satellite with high speed 128 00:06:12,360 --> 00:06:16,400 Internet anywhere as long as you can see the sky, it works. 129 00:06:16,400 --> 00:06:19,760 Florida State, Bezos used his last shareholder meeting as a 130 00:06:19,760 --> 00:06:22,680 chief executive in 2021 to drive that point home. 131 00:06:22,960 --> 00:06:25,880 He said, quote, can I stand here and tell you that our $10 132 00:06:25,880 --> 00:06:29,040 billion investment in Kuiper will generate returns on 133 00:06:29,040 --> 00:06:30,880 invested capital? I can't. 134 00:06:31,160 --> 00:06:33,760 I believe it will. And we're working hard to ensure 135 00:06:33,760 --> 00:06:36,440 that that's the case. So even Jeff Bezos realizes how 136 00:06:36,440 --> 00:06:38,720 far behind they are. They're saying that there's no 137 00:06:38,720 --> 00:06:41,040 guarantee of return on capital here. 138 00:06:41,360 --> 00:06:44,440 Now, of course, the CEO should never say that an investment has 139 00:06:44,440 --> 00:06:47,960 a guaranteed ROI, but at least they can give a bit more 140 00:06:47,960 --> 00:06:51,480 confidence than this. This is a very open-ended, maybe 141 00:06:51,480 --> 00:06:53,160 it will, maybe it won't statement. 142 00:06:53,280 --> 00:06:54,840 And here we get to the crux of the problem. 143 00:06:54,840 --> 00:06:57,920 These satellites require a ton of upfront investment before 144 00:06:57,920 --> 00:07:00,480 turning a diamond profit. Several analysts are getting on 145 00:07:00,480 --> 00:07:04,320 the bandwagon that Wall Street's near term estimates for Amazon 146 00:07:04,320 --> 00:07:07,400 aren't fully taking into account these upfront investments. 147 00:07:07,440 --> 00:07:10,000 So we have analysts like Brian Nowak from Morgan Stanley saying 148 00:07:10,000 --> 00:07:13,120 that it is a tactical risk. We have James Lee saying that 149 00:07:13,120 --> 00:07:15,560 there is a chance of downward revisions. 150 00:07:15,600 --> 00:07:17,520 And of course, we have the Wells Fargo analyst that we heard 151 00:07:17,520 --> 00:07:20,640 about two days ago, Ken Garliski, saying, in our view, 152 00:07:20,640 --> 00:07:23,800 Kiper is likely to put a cap on margin expansion in the near 153 00:07:23,800 --> 00:07:25,440 term. So here we see a group of 154 00:07:25,440 --> 00:07:28,440 analysts starting to converge against Amazon because a 155 00:07:28,440 --> 00:07:31,360 company's not going to have quite the earnings expansion and 156 00:07:31,360 --> 00:07:33,760 free cash flow growth that we once predicted. 157 00:07:34,040 --> 00:07:36,480 And this seems to be the ongoing case with Amazon. 158 00:07:36,800 --> 00:07:39,840 Isn't there always something they're doing that dampens their 159 00:07:39,840 --> 00:07:41,800 profits? A couple years ago, it was the 160 00:07:41,800 --> 00:07:44,480 expansion of their retail business, their logistics 161 00:07:44,480 --> 00:07:46,360 network. They doubled the size of it, 162 00:07:46,360 --> 00:07:48,800 major CapEx investments. That was supposed to be the 163 00:07:48,800 --> 00:07:51,520 major investment. Once that's over, then Amazon 164 00:07:51,520 --> 00:07:54,200 was supposed to have record free cash flow growth and profits. 165 00:07:54,800 --> 00:07:57,000 Well, after that, they had the artificial intelligence 166 00:07:57,000 --> 00:08:01,200 investment, major CapEx investments into AI, into their 167 00:08:01,440 --> 00:08:03,720 AWS system. But don't worry, we can wait 168 00:08:03,720 --> 00:08:06,160 until after that, and then they'll have the major free cash 169 00:08:06,160 --> 00:08:08,680 flow growth. But today, it seems like once 170 00:08:08,680 --> 00:08:11,080 again Amazon is chasing down another rabbit hole. 171 00:08:11,320 --> 00:08:15,600 They're expanding into Project Kuiper, once again dampening or 172 00:08:15,800 --> 00:08:19,080 throwing cold water on that dream of Amazon having massive 173 00:08:19,080 --> 00:08:21,200 free cash flow growth and margin expansion. 174 00:08:21,240 --> 00:08:23,680 It seems like it's never going to be the case that Amazon will 175 00:08:23,680 --> 00:08:27,480 finally just focus on profits, grow record free cash flows, and 176 00:08:27,480 --> 00:08:30,240 investors can rejoice with their massive earnings they've made. 177 00:08:30,840 --> 00:08:33,320 Well, there's one investor that thinks that that will be the 178 00:08:33,320 --> 00:08:36,200 case, and this investor is not concerned about it. 179 00:08:36,640 --> 00:08:39,000 He's an analyst and his name is Mark Mahaney, and he went on to 180 00:08:39,000 --> 00:08:43,679 CNBC to explain his $250 price prediction for Amazon. 181 00:08:43,720 --> 00:08:46,240 Now, he first starts off by giving an overview of Amazon and 182 00:08:46,240 --> 00:08:48,440 why this company is currently his top pick. 183 00:08:48,840 --> 00:08:50,600 That's right. It's a, it's a number one pick 184 00:08:50,600 --> 00:08:53,240 in, in large cap, in in mega cap. 185 00:08:53,680 --> 00:08:57,400 We think we're going to have ongoing margin expansion both in 186 00:08:57,400 --> 00:09:00,360 the retail business and in the AWS, AWS business. 187 00:09:00,360 --> 00:09:01,960 That's for the company as a whole. 188 00:09:02,400 --> 00:09:06,240 I think free cash flow is continuing to improve and we 189 00:09:06,240 --> 00:09:09,040 think we're going to see accelerating growth at their AWS 190 00:09:09,040 --> 00:09:11,840 segment and stable growth, kind of consistent close to double 191 00:09:11,840 --> 00:09:13,680 digit growth in their retail business. 192 00:09:13,680 --> 00:09:16,480 You put all that together and we think there's a lot of valuation 193 00:09:16,480 --> 00:09:18,760 upside to the share. So yeah, we like Amazon right 194 00:09:18,760 --> 00:09:21,440 here and Prime Day is just another feature of it. 195 00:09:21,440 --> 00:09:24,720 It's a, it's a, it's not a needle mover for the quarter per 196 00:09:24,720 --> 00:09:28,840 SE, but it certainly helps. And it'll probably bring in more 197 00:09:28,960 --> 00:09:31,760 Prime members worldwide, which is always a win for Amazon. 198 00:09:32,400 --> 00:09:35,120 He's not focused on Prime Days being a key feature for Amazon, 199 00:09:35,120 --> 00:09:38,000 being worth more. It's not a big part of his story 200 00:09:38,000 --> 00:09:40,000 of Amazon. He's focused on the free cash 201 00:09:40,000 --> 00:09:41,960 flow growth of the stock. Now I know one of the main 202 00:09:41,960 --> 00:09:44,520 drivers of Amazon's free cash flow growth in the business 203 00:09:44,520 --> 00:09:47,960 overall is advertising. Amazon is becoming a bigger and 204 00:09:47,960 --> 00:09:51,200 bigger advertising company. I've said for over a year now 205 00:09:51,200 --> 00:09:54,600 that I believe Amazon has the best advertising product in the 206 00:09:54,600 --> 00:09:58,080 world with their direct ad listings under their searches. 207 00:09:58,520 --> 00:10:02,480 And Harry's asked about how much money Amazon really makes for in 208 00:10:02,480 --> 00:10:04,480 advertising, and he breaks down the math. 209 00:10:04,720 --> 00:10:07,320 Oh, that's a good question. They're doing about 50 billion 210 00:10:07,640 --> 00:10:11,560 now run rate and AD revenue and they don't disclose what the 211 00:10:11,560 --> 00:10:14,280 margins are, but geez, it's got to be pretty high, Joe. 212 00:10:14,480 --> 00:10:17,800 I'm guessing they're doing almost 50% margins on that. 213 00:10:17,800 --> 00:10:21,640 If you look at what Google and Meta are able to do at that sort 214 00:10:21,640 --> 00:10:23,760 of scale, 50 billion a year in AD revenue. 215 00:10:23,960 --> 00:10:28,400 So that's 25 billion in up to 25 billion in operating income. 216 00:10:28,440 --> 00:10:32,680 It's a substantial percentage of their of their overall, it's a 217 00:10:32,680 --> 00:10:36,040 substantial percentage. The two biggest profit drivers 218 00:10:36,040 --> 00:10:38,840 here are AWS and advertising. And by the way, the good thing 219 00:10:38,840 --> 00:10:41,720 for Amazon and for Amazon shareholders is the fastest 220 00:10:41,720 --> 00:10:43,880 growing parts of the business are the highest margin. 221 00:10:43,880 --> 00:10:45,400 It's called a wonderful mix shift. 222 00:10:45,600 --> 00:10:47,080 He's exactly right. Spot on. 223 00:10:47,080 --> 00:10:49,400 Again, something that I've mentioned routinely before. 224 00:10:49,720 --> 00:10:52,600 All the best parts of Amazon's business, all the high margin 225 00:10:52,600 --> 00:10:55,120 portions of the business are the fastest growing. 226 00:10:55,120 --> 00:10:58,840 The dreaded low margin retail business, the first party retail 227 00:10:58,840 --> 00:11:01,600 business is the slowest growing part of Amazon. 228 00:11:02,000 --> 00:11:04,480 So over time Amazon's getting a better shift. 229 00:11:04,480 --> 00:11:06,120 The business is actually improving. 230 00:11:06,360 --> 00:11:09,400 The margins overall in the business is going higher, while 231 00:11:09,400 --> 00:11:11,760 Amazon maintains it's extremely wide Moat. 232 00:11:12,080 --> 00:11:14,800 So overall, I love seeing the developments that are going on 233 00:11:14,800 --> 00:11:18,080 with this business. And as he notes in this, Amazon 234 00:11:18,080 --> 00:11:22,640 is making around $20 billion per year in operating income just 235 00:11:22,640 --> 00:11:25,640 from advertising. And advertising will continue to 236 00:11:25,640 --> 00:11:27,520 grow. We've even heard just a couple 237 00:11:27,520 --> 00:11:30,600 days ago that Amazon is increasing the ad load on their 238 00:11:30,600 --> 00:11:33,520 Amazon Prime Video because nobody's canceling. 239 00:11:33,600 --> 00:11:36,480 And he also outlines the advances Amazon's making in 240 00:11:36,480 --> 00:11:38,560 their media business. Yeah, Joe, I think that's been 241 00:11:38,560 --> 00:11:40,920 one of the biggest kind of, I don't know, strategic pivots at 242 00:11:40,920 --> 00:11:43,560 the company. They've really leaned into being 243 00:11:44,160 --> 00:11:47,040 a media and entertainment empire's a strong word, but you 244 00:11:47,040 --> 00:11:50,960 know, they certainly have a lot of professional content, 245 00:11:50,960 --> 00:11:53,480 licensed content, you know, theatrical content. 246 00:11:53,680 --> 00:11:55,720 And then over the last two or three years, you've really also 247 00:11:55,720 --> 00:11:59,240 seen them lean into sports and where you get these massive 248 00:11:59,240 --> 00:12:04,240 audiences, major reach, major frequency and and you get high 249 00:12:04,240 --> 00:12:06,720 CPMS. And just beginning at the this 250 00:12:06,720 --> 00:12:10,640 year, they started layering in ads into Amazon Prime Video. 251 00:12:10,800 --> 00:12:14,520 It was one of the biggest UN monetized ad platforms out 252 00:12:14,520 --> 00:12:16,320 there, potential ad platforms out there. 253 00:12:16,520 --> 00:12:18,160 We think that'll help with profitability. 254 00:12:18,160 --> 00:12:20,840 Fact, it's probably the single big, the biggest driver of 255 00:12:20,840 --> 00:12:24,000 ramping margins, ramping up profitability at the company. 256 00:12:24,000 --> 00:12:26,320 The other one is on the retail side. 257 00:12:26,320 --> 00:12:31,040 They went through a major CapEx cycle in 2020 and 2021 and even 258 00:12:31,040 --> 00:12:33,160 in going into 2022. And now they've sort of been 259 00:12:33,160 --> 00:12:34,920 leveling that out. So you've got what's called 260 00:12:34,920 --> 00:12:38,240 rising capacity utilization, better usage of all this 261 00:12:38,240 --> 00:12:41,000 distribution centers that they that they may have overbuilt, 262 00:12:41,600 --> 00:12:44,640 rising capital utilization, capacity utilization, there's 263 00:12:44,640 --> 00:12:46,600 another word for that, it's margin expansion. 264 00:12:46,600 --> 00:12:48,360 So you got these two kind of really nice. 265 00:12:48,680 --> 00:12:51,360 Tailwinds, so he mentions an overall convergence of different 266 00:12:51,360 --> 00:12:54,120 reasons that Amazons margins will likely expand the 267 00:12:54,120 --> 00:12:58,080 additional ads on Amazon Prime. That is a further monetization 268 00:12:58,080 --> 00:13:02,320 mechanism for Amazon, the use of their unused capacity in their 269 00:13:02,320 --> 00:13:05,040 fulfillment centers. We know that Amazon they 270 00:13:05,080 --> 00:13:08,240 overshot, they built too many fulfillment centers and now 271 00:13:08,240 --> 00:13:10,200 they're finally filling that capacity. 272 00:13:10,360 --> 00:13:12,960 When you fill capacity with fulfillment centers or server 273 00:13:12,960 --> 00:13:17,120 farms, that is margin expansion. So we have all these different 274 00:13:17,120 --> 00:13:19,120 ways that Amazon can push margins up. 275 00:13:19,240 --> 00:13:21,920 But Even so, he also goes on to address Project Kyper and the 276 00:13:21,920 --> 00:13:24,040 investments in that. Now there's some headwinds here. 277 00:13:24,040 --> 00:13:26,480 They're starting to make a big investment in this satellite 278 00:13:26,480 --> 00:13:30,680 system called Kyper and but as long as they break that out and 279 00:13:30,680 --> 00:13:33,280 give us a sense of what those costs are and what they see is 280 00:13:33,280 --> 00:13:36,000 the revenue opportunity, I think the market will give them a 281 00:13:36,000 --> 00:13:37,560 little bit of the benefit of the doubt for that. 282 00:13:37,840 --> 00:13:40,480 I once again agree. I don't see Project Hyper as a 283 00:13:40,520 --> 00:13:43,000 wasted investment with no potential of return. 284 00:13:43,280 --> 00:13:46,560 I think there's a very good chance, proven by Starlink, that 285 00:13:46,560 --> 00:13:49,720 this can be a good business. Starlink has shown in and of 286 00:13:49,720 --> 00:13:52,360 themselves that this is a profitable business and it has 287 00:13:52,360 --> 00:13:55,200 massive demand. The Internet is incredibly 288 00:13:55,200 --> 00:13:57,680 important. People can't get landline 289 00:13:57,680 --> 00:14:00,520 Internet everywhere in the world, so Project Hyper has 290 00:14:00,520 --> 00:14:04,280 massive potential. Starlink should not be the only 291 00:14:04,280 --> 00:14:06,920 single company that offers satellite Internet, so even 292 00:14:06,920 --> 00:14:08,840 though it's not a wasted investment, Project Hyper 293 00:14:08,840 --> 00:14:10,400 certainly is a near term headwind. 294 00:14:10,480 --> 00:14:13,120 Now finally he gets asked about his current price target on the 295 00:14:13,120 --> 00:14:15,200 company. Yes, Yeah, we did, We did. 296 00:14:15,200 --> 00:14:18,800 We're up near 250 now. We're looking on 2026, 6 and 30 297 00:14:18,800 --> 00:14:21,600 * 25 to 30 times. Free cash flow gets you there. 298 00:14:21,600 --> 00:14:25,400 And we think that kind of multiple for a kind of a key, 299 00:14:25,520 --> 00:14:28,080 you know, brand, you know, an enduring brand, you know, 300 00:14:28,080 --> 00:14:31,880 Amazon's going to be around in five, 10/15/20 years, a name 301 00:14:31,880 --> 00:14:34,200 like that that can do premium growth for a substantial period 302 00:14:34,200 --> 00:14:35,320 of time. We think that that kind of 303 00:14:35,320 --> 00:14:37,760 multiple is well warranted. So there we have his price 304 00:14:37,760 --> 00:14:40,000 target of 250 and his reasoning why. 305 00:14:40,320 --> 00:14:42,920 And I believe Mark Mahaney's reasoning for having that price 306 00:14:42,920 --> 00:14:45,960 target is much more compelling than what we've heard with other 307 00:14:45,960 --> 00:14:48,560 analysts down grading the stock over short, short term 308 00:14:48,560 --> 00:14:50,120 investments in the project hyper. 309 00:14:50,440 --> 00:14:52,840 It seems like some analysts can't see the forest from the 310 00:14:52,840 --> 00:14:56,400 trees, but Mark Mahaney looks at the overall picture. 311 00:14:56,640 --> 00:14:59,760 Amazon's growing in their AWS, they're growing in their ad 312 00:14:59,760 --> 00:15:01,680 revenue. They're fulfilling their their 313 00:15:01,680 --> 00:15:04,160 fulfillment centers that they built a long time ago. 314 00:15:04,400 --> 00:15:07,200 Their margins should step up in lockstep. 315 00:15:07,520 --> 00:15:10,400 And this is a company that you can hold for five or ten years 316 00:15:10,640 --> 00:15:12,800 and expect it to be around with a great degree of 317 00:15:12,800 --> 00:15:15,960 predictability. Amazon is currently at 185. 318 00:15:16,280 --> 00:15:20,760 If it went to 2:50 that that would be a 35% increase in the 319 00:15:20,760 --> 00:15:23,360 stock price. Based off my share count right 320 00:15:23,360 --> 00:15:27,800 now, what I currently own of Amazon, I have $78,000 invested 321 00:15:27,800 --> 00:15:30,480 in this company. If the stock price increased by 322 00:15:30,480 --> 00:15:34,640 35% that would mean that it would grow to a $105,000 323 00:15:34,640 --> 00:15:36,960 position. Now I'm going to race against 324 00:15:36,960 --> 00:15:39,760 the S&P 500. I buy every company with the 325 00:15:39,760 --> 00:15:44,680 goal of outperforming the index. If Amazon raced up 35% over the 326 00:15:44,680 --> 00:15:47,720 next year or two, I have to imagine that would outperform 327 00:15:47,720 --> 00:15:50,320 the S&P 500. Now, of course, the S&P 500 328 00:15:50,320 --> 00:15:53,680 could race up another 35%. There's always that possibility, 329 00:15:53,960 --> 00:15:57,200 but I think it's unlikely given the valuation of the S&P 500 330 00:15:57,200 --> 00:15:59,360 overall. Many companies are at stretched 331 00:15:59,360 --> 00:16:03,440 valuations, and given my free cash flow forecast of Amazon and 332 00:16:03,440 --> 00:16:06,880 the resiliency of this business, I think that Amazon is not 333 00:16:07,000 --> 00:16:09,400 overstretched. In fact, I think the company is 334 00:16:09,400 --> 00:16:13,240 still undervalued. So I hold this one with the goal 335 00:16:13,240 --> 00:16:17,680 of outperforming the S&P 500. If Amazon gets anywhere close to 336 00:16:17,680 --> 00:16:23,000 250 and the S&P 500 doesn't race up in lockstep with Amazon, this 337 00:16:23,000 --> 00:16:25,760 is going to propel the story fund further and further away of 338 00:16:25,760 --> 00:16:27,800 the S&P 500. Now, that's the goal. 339 00:16:27,840 --> 00:16:30,520 We'll see if that happens. Now, moving on, as we see more 340 00:16:30,520 --> 00:16:33,560 evidence over time of the damaging effect that TikTok has 341 00:16:33,560 --> 00:16:36,840 on kids, the company's becoming more and more of a target for 342 00:16:36,840 --> 00:16:39,360 lawsuits, especially this time from local governments. 343 00:16:39,600 --> 00:16:42,240 For example, we have here the District Attorney of DC 344 00:16:42,480 --> 00:16:46,080 explaining his lawsuit against TikTok, and some of the 345 00:16:46,080 --> 00:16:48,080 allegations here are pretty damning. 346 00:16:48,200 --> 00:16:52,280 Well, thank you for having me. For young people, the TikTok 347 00:16:52,280 --> 00:16:54,520 platform is like digital nicotine. 348 00:16:55,000 --> 00:16:58,800 It's an addictive, dangerous product that lures young people 349 00:16:58,800 --> 00:17:02,240 into it, keeps their eyes glued to their screens for as long as 350 00:17:02,240 --> 00:17:05,280 possible, and then when young people are able to get off, 351 00:17:05,640 --> 00:17:08,440 lures them back. And that's all in furtherance of 352 00:17:08,440 --> 00:17:12,160 profits. The platform is designed to keep 353 00:17:12,160 --> 00:17:15,160 eyeballs on screens to drive ad revenue, and that's something 354 00:17:15,160 --> 00:17:17,359 that this lawsuit tries to tackle. 355 00:17:17,599 --> 00:17:20,880 Now obviously the goal of every company is to make as much money 356 00:17:20,880 --> 00:17:23,240 as possible. I don't like the phrasing here 357 00:17:23,240 --> 00:17:26,280 where he's saying, you know, TikTok just wants to make a lot 358 00:17:26,280 --> 00:17:27,720 of money. Of course they do. 359 00:17:27,720 --> 00:17:29,560 Every company wants to make a lot of money. 360 00:17:29,880 --> 00:17:32,240 But I do like that he's outlining that some of the ways 361 00:17:32,240 --> 00:17:35,360 they're doing it is at the expense of the general public. 362 00:17:35,360 --> 00:17:36,720 Now let's go ahead and listen on. 363 00:17:37,040 --> 00:17:40,480 We know that the impact on young people is severe in terms of 364 00:17:40,480 --> 00:17:44,760 mental health, in terms of loss of sleep and attention, rising 365 00:17:44,760 --> 00:17:48,400 levels of depression, anxiety. So this is a dangerous public 366 00:17:48,400 --> 00:17:51,600 health risk for our children across the country and certainly 367 00:17:51,600 --> 00:17:52,880 here in the District of Columbia. 368 00:17:53,400 --> 00:17:57,000 The lawsuit that I filed here in DC in addition raises the fact 369 00:17:57,320 --> 00:18:00,960 that TikTok is engaged in an illegal, unlicensed money 370 00:18:00,960 --> 00:18:04,120 transmission business. That is something that was new 371 00:18:04,120 --> 00:18:07,000 to me. TikTok has these different games 372 00:18:07,000 --> 00:18:10,600 or you can send money from 1 user to another as a gift. 373 00:18:10,760 --> 00:18:13,560 Now, I don't really understand it or the mechanics of it, but 374 00:18:13,560 --> 00:18:16,080 they heavily incentivize gifting other people money. 375 00:18:16,080 --> 00:18:18,920 And then it's in an ecosystem where you gift it back and it 376 00:18:18,920 --> 00:18:20,760 becomes this money transfer scheme. 377 00:18:20,800 --> 00:18:24,080 And this is something that Tiktok has monetized that 378 00:18:24,080 --> 00:18:26,440 they've created into a big thing on the platform. 379 00:18:26,840 --> 00:18:28,920 And now it's moving a large sum of money. 380 00:18:29,000 --> 00:18:31,000 Tiktok is actually managing a large amount of money that's 381 00:18:31,000 --> 00:18:33,360 being transferred from some users to others. 382 00:18:33,840 --> 00:18:36,960 And what he's bringing up here is that none of this is 383 00:18:36,960 --> 00:18:39,760 sanctioned or licensed. It's not regulated. 384 00:18:39,920 --> 00:18:42,640 Tiktok is just doing this without any real regulation. 385 00:18:43,400 --> 00:18:47,320 In real time, money is being transmitted between people, and 386 00:18:47,320 --> 00:18:51,640 that TikTok coin function, when coupled with TikTok Live, is 387 00:18:51,640 --> 00:18:54,960 lending itself to dangerous behavior, unregulated behavior 388 00:18:54,960 --> 00:18:59,120 that other money transmission companies like Venmo or PayPal 389 00:18:59,480 --> 00:19:03,040 have a requirement for safety and oversight that TikTok is 390 00:19:03,040 --> 00:19:05,600 evading. So he lays the premise for this 391 00:19:05,600 --> 00:19:08,120 lawsuit, saying that TikTok is like nicotine. 392 00:19:08,120 --> 00:19:11,240 It's highly addicting and it's harmful, especially to children. 393 00:19:11,480 --> 00:19:13,760 They can't regulate how much time they've been on it. 394 00:19:14,040 --> 00:19:16,960 It causes them to lose sleep. It causes all these depression 395 00:19:16,960 --> 00:19:18,920 problems. And of course, it's overall a 396 00:19:18,920 --> 00:19:21,400 waste of time. Nobody goes away from TikTok 397 00:19:21,400 --> 00:19:24,200 after scrolling for two hours and says that was a good use of 398 00:19:24,200 --> 00:19:25,760 my time. I feel much better now. 399 00:19:26,120 --> 00:19:28,920 Most of the time, it's regretful behavior from the user. 400 00:19:29,280 --> 00:19:32,280 Not only that, he says it's a money transfer scheme, a legal 401 00:19:32,280 --> 00:19:34,400 one that's without regulation. And of course, they're 402 00:19:34,400 --> 00:19:37,120 benefiting from that. But ultimately, what he wants to 403 00:19:37,120 --> 00:19:38,680 change is very interesting. Here. 404 00:19:39,120 --> 00:19:42,760 The big thing he wants to change is the infinite scroll. 405 00:19:43,080 --> 00:19:47,160 He alleges that TikTok wants to keep users on the platform in a 406 00:19:47,160 --> 00:19:51,080 harmful way to the users and community, and in particular, 407 00:19:51,240 --> 00:19:53,960 the infinite scroll feature on social media. 408 00:19:54,360 --> 00:19:57,920 If he's successful in getting that feature changed on TikTok, 409 00:19:58,000 --> 00:20:00,640 that could have major implications for every infinite 410 00:20:00,640 --> 00:20:03,120 scroll feature on every social media website. 411 00:20:03,280 --> 00:20:06,560 Most importantly, we want Tik Tok's dangerous functions to 412 00:20:06,560 --> 00:20:08,200 end. We want to make sure that young 413 00:20:08,200 --> 00:20:11,600 people are kept safer when they're using social media, that 414 00:20:11,600 --> 00:20:15,640 there are reasonable constraints on the time and on the ways in 415 00:20:15,640 --> 00:20:18,520 which young people are sucked into spending so much time on 416 00:20:18,520 --> 00:20:20,560 screen. We certainly think the money 417 00:20:20,560 --> 00:20:23,480 transmission business, as currently it being operated is 418 00:20:23,480 --> 00:20:26,880 illegal, needs to come into compliance with the requirements 419 00:20:26,880 --> 00:20:30,960 of DC law and consumer protection laws, and generally 420 00:20:30,960 --> 00:20:33,840 speaking, we want the exploitation and the lack of 421 00:20:33,840 --> 00:20:37,720 candor to children and their parents and to regulators to 422 00:20:37,720 --> 00:20:40,000 end. TikTok has not been straight 423 00:20:40,000 --> 00:20:43,000 with the public and with parents and with kids about how 424 00:20:43,160 --> 00:20:46,800 dangerous its product is, how dangerous it knows its product 425 00:20:46,800 --> 00:20:51,000 is, and the long term impact of the addictive behaviors that 426 00:20:51,000 --> 00:20:53,880 it's algorithm creates. That's a long list of demands 427 00:20:53,880 --> 00:20:56,800 for TikTok to end the money transfer scheme, to end the 428 00:20:56,800 --> 00:20:59,880 infinite scroll feature, to make it so that they can't buzz your 429 00:20:59,880 --> 00:21:02,680 phone with vibrations telling you to get back on the app every 430 00:21:02,680 --> 00:21:05,280 5 minutes. If TikTok did that, they would 431 00:21:05,280 --> 00:21:07,920 lose engagement on the app. Of course, that'd be worse for 432 00:21:07,920 --> 00:21:10,680 their shareholders and owners, so it's unlikely they're going 433 00:21:10,680 --> 00:21:13,280 to willingly do any of this. And that's the reason he's 434 00:21:13,280 --> 00:21:15,080 suing. Now, one thing I'll point out in 435 00:21:15,080 --> 00:21:18,680 this report and over and over again by these attorney generals 436 00:21:18,680 --> 00:21:21,320 is a damage that's happening to children by TikTok. 437 00:21:21,920 --> 00:21:24,880 They're talking about 10 year olds, 9 year olds, 13 year olds 438 00:21:24,880 --> 00:21:28,680 using Tiktok and being damaged because of it, having all these 439 00:21:28,680 --> 00:21:30,640 psychological issues because of Tiktok. 440 00:21:31,280 --> 00:21:33,680 And even though I think the company has a big role to play 441 00:21:33,680 --> 00:21:37,640 there, they should lock down and have better protections 442 00:21:37,840 --> 00:21:40,360 restrictions from young kids using their app. 443 00:21:40,920 --> 00:21:43,600 I think some responsibility has to fall on the parent hair. 444 00:21:43,600 --> 00:21:45,160 And I, I don't give parenting advice. 445 00:21:45,160 --> 00:21:48,200 I know it's very difficult. I'm a a parent of three so I 446 00:21:48,400 --> 00:21:52,680 understand the difficulty of it but kids should not have Tiktok. 447 00:21:52,680 --> 00:21:56,280 I think it's crazy that young kids, 9 year olds are able to 448 00:21:56,280 --> 00:21:59,040 have Tiktok accounts. Lock your phones down. 449 00:21:59,080 --> 00:22:01,920 Lock that App Store down. They have features to do that. 450 00:22:02,480 --> 00:22:06,840 I'll never allow Tiktok on any of my kids phones at any point 451 00:22:07,360 --> 00:22:08,960 and I'll lead by example. I don't have it either. 452 00:22:08,960 --> 00:22:12,240 So if you have kids that are using TikTok, the best thing to 453 00:22:12,240 --> 00:22:15,240 do is just to get rid of it, make their childhood better in 454 00:22:15,240 --> 00:22:17,280 the process. Now again, the bigger picture 455 00:22:17,280 --> 00:22:20,520 here is if these lawsuits are successful against TikTok 456 00:22:20,520 --> 00:22:23,240 removing things like the infinite scroll and limiting the 457 00:22:23,240 --> 00:22:26,880 amount of notifications that could also be replicated across 458 00:22:26,880 --> 00:22:30,200 different social media companies like Instagram or Twitter. 459 00:22:30,600 --> 00:22:33,120 Instagram and Twitter both have infinite scroll. 460 00:22:33,120 --> 00:22:35,800 They don't stop the user from using reels after a certain 461 00:22:35,800 --> 00:22:38,480 amount of time even though, so that would probably be a healthy 462 00:22:38,480 --> 00:22:40,440 thing to do. So we're going to see if these 463 00:22:40,440 --> 00:22:43,120 lawsuits are successful and what potential impacts they'll have 464 00:22:43,120 --> 00:22:45,680 on different companies. Now moving on, we get to one of 465 00:22:45,680 --> 00:22:47,800 the most innovative companies in the world. 466 00:22:48,240 --> 00:22:51,640 We have companies like Tesla making robo taxis. 467 00:22:51,640 --> 00:22:54,920 We have NVIDIA making GPU's that people can't even dream of how 468 00:22:54,920 --> 00:22:57,240 powerful they are. And then we have perhaps the 469 00:22:57,240 --> 00:23:01,080 most innovative company, which is Costco, one of my long term 470 00:23:01,080 --> 00:23:04,600 holdings here. Costco, the innovative long term 471 00:23:04,600 --> 00:23:08,280 compounder, is once again added again with their major 472 00:23:08,280 --> 00:23:12,560 innovations and this time it's putting an apartment complex on 473 00:23:12,560 --> 00:23:15,480 top of the warehouse. This is thinking outside of the 474 00:23:15,480 --> 00:23:17,560 box and I like, I like what I see here. 475 00:23:17,760 --> 00:23:20,760 It won't be long before a select few Costco fans in Los Angeles 476 00:23:20,760 --> 00:23:23,560 will be able to live just a few flights above their favorite 477 00:23:23,680 --> 00:23:25,120 retailer. Thrive Living, a 478 00:23:25,120 --> 00:23:27,920 california-based developer, is converting a vacant lot in 479 00:23:27,920 --> 00:23:31,280 Baldwin Village neighborhood of a city into an amenity rich 480 00:23:31,280 --> 00:23:35,400 apartment building complete with 800 rental units, a rooftop 481 00:23:35,400 --> 00:23:37,600 pool, gyms and a basketball court. 482 00:23:38,320 --> 00:23:39,600 Sounds like they're doing this well. 483 00:23:39,640 --> 00:23:43,920 They're doing it the Costco way. Very high quality, but maybe not 484 00:23:43,920 --> 00:23:46,640 quite as cheap as Costco likes to to keep things, but at least 485 00:23:46,640 --> 00:23:48,880 it's high quality. The most appealing amenity, 486 00:23:48,880 --> 00:23:52,520 however, might just be the Costco warehouse that is slated 487 00:23:52,720 --> 00:23:56,000 to take up the ground floor, complete with the pharmacy and 488 00:23:56,000 --> 00:23:59,160 optical services. How great would that be? 489 00:23:59,920 --> 00:24:02,840 You get you get a live on top of Costco. 490 00:24:03,360 --> 00:24:07,600 Anytime you want a hot dog and a drink for $1.50, all you do is 491 00:24:07,600 --> 00:24:10,440 you take the elevator down right right in the Costco. 492 00:24:11,000 --> 00:24:14,200 So you, you can literally at any point in your life think I'd 493 00:24:14,200 --> 00:24:17,800 like to go for $1.50 hot dog and drink and you go to the 494 00:24:17,800 --> 00:24:20,960 elevator, you're in the Costco. 5 minutes later you got yourself 495 00:24:21,240 --> 00:24:23,200 your hot dog. You could get the chicken bake. 496 00:24:23,280 --> 00:24:27,960 You could even impulsively buy a 100 inch LEDTV only 50 feet from 497 00:24:27,960 --> 00:24:30,000 your house. Or else would you be able to do 498 00:24:30,000 --> 00:24:32,800 that anytime you want? You can go down an elevator and 499 00:24:32,800 --> 00:24:35,720 walk right through a Costco. That'd be a pretty unique 500 00:24:35,720 --> 00:24:38,960 experience. Getting Costco on board is a 501 00:24:38,960 --> 00:24:41,440 significant win for Thrive, experts say. 502 00:24:41,760 --> 00:24:44,000 Everyone loves to be next to Costco and have Costco 503 00:24:44,000 --> 00:24:48,720 associated with their project, so this shows you a little bit 504 00:24:48,720 --> 00:24:52,600 of the reputation for Costco. Everyone wants to be part of it. 505 00:24:52,800 --> 00:24:55,720 Everyone wants to be next to it. They want to be as close as a 506 00:24:55,720 --> 00:24:58,080 close proximity to Costco as possible. 507 00:24:58,200 --> 00:25:00,400 People talked about this as the Starbucks effect. 508 00:25:00,760 --> 00:25:03,000 Being next to a Starbucks is viewed as a good thing. 509 00:25:03,280 --> 00:25:06,280 That's no longer the case. Costco has taken the mantle. 510 00:25:06,520 --> 00:25:10,120 When Costco opens up central to a city, you know that's the 511 00:25:10,120 --> 00:25:13,000 place to be and there's no closer place, literally, that 512 00:25:13,000 --> 00:25:15,600 you can be than living on top of Costco. 513 00:25:15,600 --> 00:25:18,080 The retailer's move could set a new precedent for the urban 514 00:25:18,080 --> 00:25:21,400 expansion strategies, giving Costco more flexibility to tap 515 00:25:21,400 --> 00:25:24,880 into densely populated areas and position itself closer to where 516 00:25:24,880 --> 00:25:27,160 shoppers live. So the big upside for Costco 517 00:25:27,160 --> 00:25:29,920 shareholders is if this concept is successful. 518 00:25:30,240 --> 00:25:33,240 If Costco says this turned out great, having an apartment 519 00:25:33,240 --> 00:25:36,840 complex on top of our warehouse, then that opens up a whole new 520 00:25:36,840 --> 00:25:40,280 world of opportunities. No longer at Costco's landlocked 521 00:25:40,360 --> 00:25:43,920 to open acres of field where they can buy a big plot of land 522 00:25:43,920 --> 00:25:46,600 that can build their warehouse and have a huge parking lot. 523 00:25:47,080 --> 00:25:50,040 But now they'll be able to open up in densely populated areas 524 00:25:50,240 --> 00:25:53,480 where they have apartments above them and parking garages below 525 00:25:53,480 --> 00:25:55,080 them. The experience will be slightly 526 00:25:55,080 --> 00:25:57,040 different, but it will still be Costco. 527 00:25:57,360 --> 00:26:00,360 And this may be an opportunity for Costco to continue opening 528 00:26:00,560 --> 00:26:02,680 in all these important cities they want to be in. 529 00:26:02,960 --> 00:26:05,440 They mentioned that California in and of itself remains a 530 00:26:05,440 --> 00:26:09,440 massive growth path for Costco. The city that is home to the 531 00:26:09,440 --> 00:26:12,520 biggest percentage of their warehouses continues to be one 532 00:26:12,520 --> 00:26:15,400 of their biggest strengths and opportunities for a long runway 533 00:26:15,400 --> 00:26:18,480 of growth. The company has 140 warehouses 534 00:26:18,720 --> 00:26:21,320 throughout the state and a little over a third of them are 535 00:26:21,320 --> 00:26:24,880 concentrated in Los Angeles. The Baldwin Village Costco will 536 00:26:24,880 --> 00:26:27,560 be the company's 53rd store in the city. 537 00:26:28,120 --> 00:26:32,400 So Costco is not yet saturated even in California, even with 538 00:26:32,400 --> 00:26:36,280 140 warehouses in the state, they're still having to cram 539 00:26:36,280 --> 00:26:39,160 them into different buildings and different concepts because 540 00:26:39,160 --> 00:26:42,120 people love Costco that much. So we're going to see how this 541 00:26:42,120 --> 00:26:45,240 turns out and what this concept does over the upcoming years. 542 00:26:45,680 --> 00:26:48,360 Now moving on to a company that's also innovative, maybe 543 00:26:48,360 --> 00:26:51,800 slightly more innovative than Costco, which is Tesla. 544 00:26:52,280 --> 00:26:56,080 We know that in two days Elon has his robotaxi day. 545 00:26:56,320 --> 00:26:59,040 There's going to be a big presentation and hopefully this 546 00:26:59,040 --> 00:27:01,520 will be impressive to the shareholders because Tesla has 547 00:27:01,520 --> 00:27:04,200 gone nowhere for around four years now. 548 00:27:04,280 --> 00:27:07,200 Now they note that even though Tesla has increased competition 549 00:27:07,200 --> 00:27:09,680 from companies like Waymo, it still commands a premium 550 00:27:09,680 --> 00:27:12,800 valuation at almost 90 times earnings estimates for the next 551 00:27:12,800 --> 00:27:15,760 12 months, putting it among the high flying tech companies like 552 00:27:15,760 --> 00:27:18,680 Palantir and Snowflake. Whether the stock will regain 553 00:27:18,680 --> 00:27:22,200 its previous highs or sink back to its lows is now up to Musk as 554 00:27:22,360 --> 00:27:25,560 prepares to stand before investors at Teslas Robo Taxi 555 00:27:25,560 --> 00:27:29,400 Day in Hollywood, CA. Ostensibly an event to highlight 556 00:27:29,400 --> 00:27:32,000 the self driving technology that would allow the company to 557 00:27:32,000 --> 00:27:36,120 compete with the likes of Waymo and G Miss Cruise, Musk needs to 558 00:27:36,120 --> 00:27:39,240 convince investors that Tesla remains the hotbed of innovation 559 00:27:39,480 --> 00:27:42,320 and still deserves to be thought of as a tech company like Apple, 560 00:27:42,320 --> 00:27:44,640 Amazon or Alphabet. The outcome could determine 561 00:27:44,640 --> 00:27:48,200 whether Tesla regains its place among the Magnificent 7 or is 562 00:27:48,200 --> 00:27:51,560 relegated to fight it out with the dozens of automakers for EV 563 00:27:51,680 --> 00:27:54,560 market share. So they're building this up to 564 00:27:54,560 --> 00:27:56,960 be a pretty big event. Saying that if Tesla doesn't 565 00:27:56,960 --> 00:28:00,520 nail this, if they don't show anything impressive and it seems 566 00:28:00,520 --> 00:28:03,280 more and more like they're just another car company, the stock 567 00:28:03,280 --> 00:28:04,720 is not going to continue to do well. 568 00:28:04,720 --> 00:28:07,920 It should go down to a lower valuation because even though 569 00:28:07,920 --> 00:28:10,760 Tesla has not gone far for the last four years in terms of 570 00:28:10,760 --> 00:28:13,720 stock price, it's still at a high valuation. 571 00:28:14,120 --> 00:28:17,400 The company's still trading with a lot of downside if things 572 00:28:17,400 --> 00:28:19,440 don't go well. Tesla stock has always been 573 00:28:19,440 --> 00:28:22,360 dependent on the future narrative of Full Self Driving 574 00:28:22,360 --> 00:28:25,400 and the robotaxi. Right now, Tesla's a company 575 00:28:25,400 --> 00:28:27,720 that has some level of full self driving. 576 00:28:27,720 --> 00:28:30,600 It's impressive technology, but it's not quite enough to have a 577 00:28:30,600 --> 00:28:33,920 human enter into the back seat of the car and simply tell it to 578 00:28:33,920 --> 00:28:36,480 drive somewhere. It can't do that with enough 579 00:28:36,480 --> 00:28:40,320 reliability or safety. So Elon Musk has some convincing 580 00:28:40,320 --> 00:28:43,600 to do in this presentation. The biggest thing that they note 581 00:28:43,600 --> 00:28:45,760 here is the differences in strategy. 582 00:28:46,160 --> 00:28:50,160 Elon Musk is trying to make it so that cameras alone are enough 583 00:28:50,160 --> 00:28:53,640 to have a robo taxi or full self driving just cameras. 584 00:28:54,000 --> 00:28:56,160 And that's different than the approach that Waymo and others 585 00:28:56,160 --> 00:28:58,280 have taken. So the stakes are very high for 586 00:28:58,280 --> 00:29:00,080 Tesla. The valuation remains high and 587 00:29:00,080 --> 00:29:02,200 the expectations high for this meeting. 588 00:29:02,560 --> 00:29:05,120 Now it's going to be interesting what Elon Musk says, the 589 00:29:05,120 --> 00:29:06,960 timelines he gives, what he reveals. 590 00:29:07,200 --> 00:29:10,040 As always, this is going to be a massive spectacle, one of the 591 00:29:10,040 --> 00:29:12,520 biggest events for any stock in any industry. 592 00:29:12,760 --> 00:29:15,960 And of course, I'll be covering the event on this channel now as 593 00:29:15,960 --> 00:29:17,800 tradition. Every once in a while, at least 594 00:29:17,800 --> 00:29:21,160 before TikTok gets banned, I look at clips from TikTok of 595 00:29:21,160 --> 00:29:23,800 different financial people or people related to the companies 596 00:29:23,800 --> 00:29:25,840 I invest in to see what they're up to. 597 00:29:25,840 --> 00:29:28,680 And here we have three different clips I'll be reacting to. 598 00:29:29,200 --> 00:29:31,120 The first one is a Google employee. 599 00:29:31,200 --> 00:29:33,800 This one is an employee of Google in New York City saying, 600 00:29:33,800 --> 00:29:36,440 come work with me in Google New York City. 601 00:29:36,440 --> 00:29:39,680 So we get to see what they do for work, the tasks they're 602 00:29:39,680 --> 00:29:42,200 doing, the problems they're solving, how they're making the 603 00:29:42,200 --> 00:29:44,560 world better and, and the challenges they're facing. 604 00:29:44,560 --> 00:29:46,240 Let's go ahead and take a look at this New York. 605 00:29:46,400 --> 00:29:49,680 Google and Chelsea. I did not dress business casual 606 00:29:49,680 --> 00:29:51,920 at all, even had my little kit kneels on. 607 00:29:51,920 --> 00:29:54,160 Badged in and went straight up to the 14th floor for some 608 00:29:54,160 --> 00:29:55,800 lunch. Started off with some shrimp 609 00:29:55,800 --> 00:29:57,760 salad and it was delicious and then some coffee. 610 00:29:57,760 --> 00:30:00,120 Obviously the vibe here was so much more so. 611 00:30:00,680 --> 00:30:03,880 So we got our our shrimp salad to start the day and our nice 612 00:30:04,480 --> 00:30:07,160 our nice coffee or our drink to start the day. 613 00:30:07,520 --> 00:30:09,240 One so much more fun and I kind of loved it. 614 00:30:09,240 --> 00:30:11,080 And then we would we we skip the lunch. 615 00:30:11,680 --> 00:30:12,720 I swear it. I didn't. 616 00:30:12,720 --> 00:30:17,920 Fast forward here, we went from we went from shrimp salad to 617 00:30:17,920 --> 00:30:22,720 drink and then the next thing without skipping any is lunch. 618 00:30:23,400 --> 00:30:26,680 So apparently something must have happened before then. 619 00:30:26,680 --> 00:30:30,600 Maybe she edited out all the big challenges she solved, but 620 00:30:30,680 --> 00:30:33,560 we're, we're, it seems like it, we're on a food tour here more 621 00:30:33,560 --> 00:30:35,800 than a day in the, the work that we do. 622 00:30:36,000 --> 00:30:37,320 Much more fun and I kind of loved it. 623 00:30:37,320 --> 00:30:40,040 Got some Indian food and went outside and then adventured the 624 00:30:40,040 --> 00:30:41,760 building a little bit. Went into the game room. 625 00:30:41,760 --> 00:30:43,320 This Lego micro kitchen. Amazing. 626 00:30:43,440 --> 00:30:45,960 A few apples. And in between the the drinks, 627 00:30:45,960 --> 00:30:49,720 so we went from lunch, we have pool. 628 00:30:49,960 --> 00:30:53,600 So there's a a cool Google pool table there that's fun. 629 00:30:54,240 --> 00:30:57,560 And then there's Legos with candy and different treats in 630 00:30:57,560 --> 00:30:59,360 them, and then we're back to drinks. 631 00:30:59,640 --> 00:31:01,800 So yummy and then a wheat grass juice. 632 00:31:02,120 --> 00:31:03,840 Delicious. My intern friend from last 633 00:31:03,840 --> 00:31:05,880 summer. My feet are kind of killing me. 634 00:31:06,160 --> 00:31:09,120 So pretty. That's the whole thing. 635 00:31:09,200 --> 00:31:11,040 We didn't skip any of there. That was it. 636 00:31:11,320 --> 00:31:14,120 That is, come work with me in Google in New York City. 637 00:31:15,120 --> 00:31:18,000 Now, of course, I mean, she must do something like there's got to 638 00:31:18,000 --> 00:31:21,160 be some work she does that she must have edited out. 639 00:31:21,720 --> 00:31:23,440 But how does this represent the company? 640 00:31:23,440 --> 00:31:26,920 Well, when you share videos like this of the the job that you 641 00:31:26,920 --> 00:31:30,960 work at, showing what food you eat and then what food you eat 642 00:31:30,960 --> 00:31:34,520 and then what games you play and then how you relax at the top of 643 00:31:34,520 --> 00:31:38,400 the building with a great view with no work whatsoever, with 644 00:31:38,400 --> 00:31:40,600 nothing shown that you've accomplished anything for the 645 00:31:40,600 --> 00:31:43,520 day, how does that represent your employer? 646 00:31:43,520 --> 00:31:45,680 Well, how does that represent you as an employee? 647 00:31:45,680 --> 00:31:49,480 Well, how does that do anyone any good in this situation? 648 00:31:50,160 --> 00:31:52,360 If I was Google, I would be frustrated with these employees. 649 00:31:52,640 --> 00:31:55,480 If I was a hard working employee at Google, I would especially be 650 00:31:55,480 --> 00:31:59,080 frustrated with these coworkers that are creating this image of 651 00:31:59,080 --> 00:32:00,760 Google. And of course every comment 652 00:32:00,760 --> 00:32:03,640 under this video are deservedly so criticisms of it. 653 00:32:04,000 --> 00:32:06,520 That we need more rate hikes, that Google can do more cost 654 00:32:06,520 --> 00:32:09,440 cutting efforts at their company, that Google is a 655 00:32:09,480 --> 00:32:11,960 playground for adults, and so on and so forth. 656 00:32:12,280 --> 00:32:14,960 So you see the response these videos make, but yet somehow 657 00:32:15,200 --> 00:32:17,320 they keep happening. More and more employees at 658 00:32:17,320 --> 00:32:19,200 Google think that this is a good idea. 659 00:32:19,440 --> 00:32:21,960 Now we move on to Salesforce. This isn't an employee at 660 00:32:21,960 --> 00:32:24,280 Salesforce, but someone visiting the office. 661 00:32:24,440 --> 00:32:26,800 People are obsessed with the food that these companies serve. 662 00:32:27,040 --> 00:32:29,640 Everything I ate at the Salesforce office in SF. 663 00:32:29,760 --> 00:32:32,240 Welcome to Week 2 of visiting a different tech office. 664 00:32:32,240 --> 00:32:35,160 Last week I visited Google and now we're at Salesforce. 665 00:32:35,160 --> 00:32:37,840 They also have very unique and yummy orders. 666 00:32:38,320 --> 00:32:41,080 Obviously good hors d'oeuvres. Why is everybody obsessed with 667 00:32:41,080 --> 00:32:43,600 the food at these companies? It seems like the only reason 668 00:32:43,600 --> 00:32:46,480 they work there. But but here we go, we continue 669 00:32:46,480 --> 00:32:48,080 on with it. Some work done and now for the 670 00:32:48,080 --> 00:32:49,800 taste test. They had this honeycomb mochi 671 00:32:49,800 --> 00:32:52,840 waffle which was delicious, and this crispy fried potato with 672 00:32:52,840 --> 00:32:55,680 locks that I accidentally spilled on my laptop and we got 673 00:32:55,680 --> 00:32:57,480 some Italian ice and visited the game room. 674 00:32:57,480 --> 00:32:59,360 And work. Now I will give her a defense at 675 00:32:59,360 --> 00:33:01,000 least. She's a food creator, so she's 676 00:33:01,000 --> 00:33:03,560 going around blogging about food specifically, which makes sense 677 00:33:03,560 --> 00:33:05,720 that most of the focus is on the food at Salesforce. 678 00:33:06,280 --> 00:33:08,760 But the first one with the Google employee is also focused 679 00:33:08,760 --> 00:33:11,840 almost entirely on the food. And I'm pretty sure her job at 680 00:33:11,840 --> 00:33:14,240 Google is not to be a food critic for the company. 681 00:33:14,880 --> 00:33:16,600 Now finally, we get to the last TikTok here. 682 00:33:16,800 --> 00:33:18,200 This is one that I wanted to react to. 683 00:33:18,840 --> 00:33:23,160 It's very short and it's a a video of a kid that apparently 684 00:33:23,160 --> 00:33:27,240 has a $100,000 trading account and it looks like he's in high 685 00:33:27,240 --> 00:33:28,320 school. So let's go ahead and take a 686 00:33:28,320 --> 00:33:30,560 look at this. So he has a six figure account 687 00:33:30,560 --> 00:33:33,920 in high school and he's trading hippo meme coins. 688 00:33:34,120 --> 00:33:36,120 The situation he's in is incredible. 689 00:33:36,120 --> 00:33:40,360 He has $100,000 in high school and I like what he's doing here. 690 00:33:40,360 --> 00:33:42,800 At least he's trying to make more money with it, but I think 691 00:33:42,800 --> 00:33:44,280 he needs a little bit more direction. 692 00:33:44,560 --> 00:33:47,480 Imagine if instead of trading meme coins where there's a high 693 00:33:47,480 --> 00:33:51,440 likelihood of losing capital, instead focus this $100,000 on 694 00:33:51,440 --> 00:33:54,080 buying compounders, companies that were growing free cash 695 00:33:54,080 --> 00:33:56,680 flow, that positive future expected returns. 696 00:33:57,160 --> 00:34:00,600 That $100,000 could turn into millions in his 40s. 697 00:34:00,920 --> 00:34:04,200 He could be set with that amount of money he already has by the 698 00:34:04,200 --> 00:34:07,440 time he's 50 just by using it wisely and investing it 699 00:34:07,440 --> 00:34:09,600 properly. But hopefully he gets that 700 00:34:09,600 --> 00:34:12,400 guidance along the way. He may have to learn some hard 701 00:34:12,400 --> 00:34:15,199 lessons in the meantime. That's all for this episode. 702 00:34:15,320 --> 00:34:16,159 See you in the next one.