1 00:00:00,000 --> 00:00:04,100 Welcome back, everyone, it's time for a portfolio update will 2 00:00:04,100 --> 00:00:07,800 be looking at every single position in the story fund and 3 00:00:07,800 --> 00:00:10,800 the changes that I've made, I've made some minor changes to 4 00:00:10,800 --> 00:00:14,900 reposition my portfolio with the goal of catching up and 5 00:00:14,900 --> 00:00:20,800 outperforming the S&P 500 by the end of 2025 that is the goal and 6 00:00:20,900 --> 00:00:25,800 so far I'm in a tough situation where down around 13% below spy. 7 00:00:26,100 --> 00:00:29,800 So my portfolios, that blue line, the S&P 500 is the red. 8 00:00:30,000 --> 00:00:34,700 Line and ever since that late December sell-off in Tech and 9 00:00:34,700 --> 00:00:37,700 high growth multiples, high price to sales, companies, and 10 00:00:37,700 --> 00:00:41,300 all the, the money, all the capital moving into into 11 00:00:41,300 --> 00:00:44,700 Commodities and to oil companies and to Consumer defensives, 12 00:00:44,700 --> 00:00:46,000 right? Like the Kroger's type of 13 00:00:46,000 --> 00:00:50,100 stocks, since that transition is happen, this portfolios just 14 00:00:50,100 --> 00:00:54,600 struggled, this was a factor rotation, the factors that were 15 00:00:54,600 --> 00:00:59,800 rotated was out of growth out of potential upside into defense 16 00:01:00,000 --> 00:01:03,200 This that's what the market did. And ever since that's taken 17 00:01:03,200 --> 00:01:07,200 place, my portfolio has trailed the S&P 500 ranging from around 18 00:01:07,200 --> 00:01:12,100 7% to 15% somewhere in there. And even though this looks, you 19 00:01:12,107 --> 00:01:14,600 know it looks difficult like I have a lot of ground to make up. 20 00:01:14,800 --> 00:01:19,500 The truth is 13% can be made up in a very short amount of time. 21 00:01:19,800 --> 00:01:23,000 So I still remain very optimistic that with this 22 00:01:23,000 --> 00:01:24,900 portfolio right now. I have a decent chance of 23 00:01:24,900 --> 00:01:28,100 catching up and surpassing spy. You look at it just to Dam up 24 00:01:28,100 --> 00:01:31,700 1.3 1% This thing can really move in either direction 25 00:01:31,700 --> 00:01:34,900 quickly, and if you look throughout history, there's some 26 00:01:34,900 --> 00:01:38,200 times where I've made up 10% in like, you know, just a couple 27 00:01:38,200 --> 00:01:39,600 months, right? A month or two. 28 00:01:39,600 --> 00:01:43,600 So the fact that we have until the end of 2025, I think gives 29 00:01:43,600 --> 00:01:45,300 me enough time to be able to make up ground here. 30 00:01:45,300 --> 00:01:47,500 But let's go ahead and look at the portfolio. 31 00:01:47,500 --> 00:01:51,500 Now, like I said, this is a gross centered aggressive 32 00:01:51,500 --> 00:01:55,000 portfolio with what I consider to be world-class companies that 33 00:01:55,000 --> 00:01:58,400 I think have the potential to have massive returns to have 34 00:01:58,400 --> 00:02:00,800 massive amounts of Free cash flow. 35 00:02:01,200 --> 00:02:04,100 They are companies that I think are very difficult to compete 36 00:02:04,100 --> 00:02:07,400 with companies that are very difficult to uproot their 37 00:02:07,400 --> 00:02:10,699 position of being a leader. And I'm looking for these 38 00:02:10,699 --> 00:02:14,300 companies to buy them on dips, to buy them an opportune times, 39 00:02:14,700 --> 00:02:17,200 but over the past six months, it's been very difficult. 40 00:02:17,200 --> 00:02:19,200 A lot of these companies have been knocked down, so I'm 41 00:02:19,208 --> 00:02:21,000 excited to go through this. We're going to look at every 42 00:02:21,000 --> 00:02:23,900 single holding, I'll share my thoughts on them as well as some 43 00:02:23,900 --> 00:02:26,300 recent changes. I did to reposition this 44 00:02:26,300 --> 00:02:28,200 portfolio. So first off, let's go through 45 00:02:28,200 --> 00:02:31,800 some recent changes here. I sold out of three positions. 46 00:02:31,800 --> 00:02:35,000 Two of them are tiny positions that I just kind of sold the 47 00:02:35,000 --> 00:02:37,100 remainder of it. And then one of them was a very 48 00:02:37,100 --> 00:02:40,700 large position that I exited. And this might look like a big 49 00:02:40,700 --> 00:02:44,100 change in my portfolio, but this actually isn't as big of a 50 00:02:44,108 --> 00:02:46,000 change as it seems. So let's go ahead and go through 51 00:02:46,000 --> 00:02:48,100 it. The first company that I finally 52 00:02:48,100 --> 00:02:52,600 just exited my position entirely was Facebook and luckily enough, 53 00:02:53,100 --> 00:02:58,000 I exited this one at a decent profit, I made around 460 54 00:02:58,000 --> 00:03:00,700 dollars on it and the reason that I actually Made money with 55 00:03:00,700 --> 00:03:04,200 Facebook is before the huge sell-off in it. 56 00:03:04,200 --> 00:03:08,100 I saw news that Mark Zuckerberg was going into the metaverse and 57 00:03:08,100 --> 00:03:11,600 that was his initial focus. And you know, he did a lot of 58 00:03:11,600 --> 00:03:14,900 plans that I wasn't really a fan of I didn't really love all 59 00:03:14,900 --> 00:03:16,700 these metaverse plans. I didn't get it, I didn't 60 00:03:16,700 --> 00:03:20,400 understand it, maybe I'm behind the curve but I took a lot of my 61 00:03:20,400 --> 00:03:24,000 profits at that time, right then and then Facebook had its 62 00:03:24,000 --> 00:03:28,600 enormous like 30% plunge. So luckily, I I sold most of my 63 00:03:28,600 --> 00:03:30,600 position before. That happened. 64 00:03:30,700 --> 00:03:32,800 That's the only reason that I'm in the green because the 65 00:03:32,800 --> 00:03:35,400 remainder of that position has been a losing position. 66 00:03:35,700 --> 00:03:38,100 Now, in terms of Facebook. Right now, I actually think that 67 00:03:38,100 --> 00:03:40,700 it's probably undervalued. I think it's a good company. 68 00:03:40,700 --> 00:03:43,100 I think if you're heavy on Facebook, you'll be just fine. 69 00:03:43,300 --> 00:03:46,900 So don't take me selling 400 bucks of it as an indication, 70 00:03:46,900 --> 00:03:48,700 that the company is going to do terribly. 71 00:03:49,000 --> 00:03:52,000 I basically wanted to just get rid of the very small positions 72 00:03:52,000 --> 00:03:55,000 and move that into the ones that I have as bigger positions as my 73 00:03:55,000 --> 00:03:57,300 higher conviction. So, I sold out of the remaining 74 00:03:57,300 --> 00:03:59,500 four hundred and seventy dollars of my portfolio. 75 00:04:00,000 --> 00:04:02,600 Around half a percent. So not a big change there. 76 00:04:03,100 --> 00:04:06,400 The next one that I sold completely out of which was also 77 00:04:06,600 --> 00:04:09,700 like a point three percent position at this point was 78 00:04:09,700 --> 00:04:12,400 atlassian. And I sold this one at a pretty 79 00:04:12,400 --> 00:04:15,700 significant profit so I did lock in a lot of gains on this one 80 00:04:16,000 --> 00:04:18,700 and if we bring up the chart here of atlassian, you'll see 81 00:04:18,700 --> 00:04:21,899 the over the year, the stock price quickly doubled, it went 82 00:04:21,899 --> 00:04:25,100 up into territory that I simply could not justify the valuation 83 00:04:25,100 --> 00:04:26,700 of it. So I thought, you know, I'm 84 00:04:26,700 --> 00:04:29,500 going to lock in a lot of gains on this one and so 80% of my 85 00:04:29,900 --> 00:04:31,000 Ian. That's what I did. 86 00:04:31,000 --> 00:04:33,800 It turned out to be a good move because atlassian soon came down 87 00:04:33,800 --> 00:04:37,700 in price. And now that I have around $1400 88 00:04:37,700 --> 00:04:40,900 of gains in that one, I decided to just exit the position until 89 00:04:40,900 --> 00:04:43,300 I really want to go back into it heavily. 90 00:04:43,700 --> 00:04:47,500 And so I sold out of $334 of just the remaining position. 91 00:04:47,900 --> 00:04:50,000 Again, I think I'll asking is a great company. 92 00:04:50,200 --> 00:04:53,500 This isn't an indication by me that I'm bearish on the company. 93 00:04:53,700 --> 00:04:56,000 I'm simply trimming those very small. 94 00:04:56,300 --> 00:04:58,800 You know, point three percent positions, point five percent 95 00:04:58,800 --> 00:05:02,400 positions, Now those are the two smallest positions in my 96 00:05:02,400 --> 00:05:06,200 portfolio by far. The next holding that I sold is 97 00:05:06,200 --> 00:05:10,100 a very significant position. It was the large twenty one 98 00:05:10,100 --> 00:05:15,200 thousand dollar ETF igv and I sold this one at a four thousand 99 00:05:15,200 --> 00:05:18,700 dollar loss. So this one actually locked in a 100 00:05:18,700 --> 00:05:21,600 loss. Now this might look bad because 101 00:05:21,600 --> 00:05:24,100 you might think I'm selling at a loss, but let me explain what I 102 00:05:24,108 --> 00:05:26,800 did with this money because it's actually not as big of a change. 103 00:05:26,800 --> 00:05:31,200 As it looks. I GV has three Top Holdings that 104 00:05:31,200 --> 00:05:33,700 make up a large percentage of this ETF. 105 00:05:34,000 --> 00:05:38,600 Those top Holdings are Microsoft Salesforce, and Adobe, they make 106 00:05:38,600 --> 00:05:43,200 up a huge chunk of this ETF. Now, what I did with this money 107 00:05:43,200 --> 00:05:47,500 from the proceeds of the sale is I bought Microsoft Salesforce 108 00:05:47,500 --> 00:05:50,600 and Adobe with a large chunk of this sale. 109 00:05:50,800 --> 00:05:53,300 And then the rest I put into Amazon because I did some 110 00:05:53,300 --> 00:05:56,600 back-testing and check this out, a portfolio, that's an even 111 00:05:56,600 --> 00:06:01,300 split of Microsoft Adobe in Salesforce Paired the igv 112 00:06:01,600 --> 00:06:04,700 performs very similarly, in fact, they go up at the same 113 00:06:04,700 --> 00:06:06,400 times. They go down at the same times, 114 00:06:06,800 --> 00:06:10,100 they have a very close correlation to each other but 115 00:06:10,100 --> 00:06:13,600 Microsoft Adobe in Salesforce have historically over any time 116 00:06:13,600 --> 00:06:17,200 period perform slightly better. So the way that I look at this 117 00:06:17,200 --> 00:06:20,900 is almost like a you know a lateral change I sold out of an 118 00:06:20,900 --> 00:06:24,000 ETF that holds these three companies as major positions in 119 00:06:24,000 --> 00:06:27,600 to just those three companies. And in the process, this has an 120 00:06:27,600 --> 00:06:31,600 immediate tax benefit the The gains that I've incurred for my 121 00:06:31,600 --> 00:06:33,700 recent sales, which I have made gains. 122 00:06:33,700 --> 00:06:37,800 From my recent sales, are going to incur a tax burden by selling 123 00:06:37,800 --> 00:06:41,200 out of igv at a loss and realizing that four thousand 124 00:06:41,200 --> 00:06:44,500 dollar loss, I can use that to reduce my capital gains burdened 125 00:06:44,500 --> 00:06:46,900 by the end of this year, assuming I lock and more 126 00:06:46,900 --> 00:06:50,500 companies at a gain. And in the meantime, I'm not 127 00:06:50,500 --> 00:06:52,500 really selling out of these positions because I'm just 128 00:06:52,500 --> 00:06:55,500 moving them out of an ETF into individual Holdings. 129 00:06:55,700 --> 00:06:57,800 So, even though this is a lateral change, I have an 130 00:06:57,800 --> 00:07:00,400 immediate tax benefit and in my Opinion. 131 00:07:00,700 --> 00:07:03,500 I think there's a decent chance that the three companies, 132 00:07:03,500 --> 00:07:07,000 Microsoft Adobe and Salesforce will continue to perform very 133 00:07:07,000 --> 00:07:10,200 well against IG V, the mixture of those three companies plus 134 00:07:10,500 --> 00:07:14,000 the other companies mixed in. So I think it's a good change. 135 00:07:14,000 --> 00:07:15,700 I think I'll have tax benefits from it. 136 00:07:15,900 --> 00:07:18,700 It's really not as big of a change as it seems on paper, but 137 00:07:18,700 --> 00:07:20,800 that is the last change that I made to my portfolio. 138 00:07:20,900 --> 00:07:22,200 Now that we've gone over those changes. 139 00:07:22,200 --> 00:07:24,800 Let's go ahead and take a look at my portfolio as it stands 140 00:07:24,800 --> 00:07:27,700 right now again it's at a hundred and seventeen, thousand 141 00:07:27,700 --> 00:07:32,100 dollars of value with Dollars in the red, which is down around 142 00:07:32,100 --> 00:07:35,200 six percent. So it's in the red, it's not 143 00:07:35,200 --> 00:07:37,700 where I want it to be but this has been a pretty tough past six 144 00:07:37,700 --> 00:07:39,800 months. Now, let me go ahead and just 145 00:07:39,800 --> 00:07:43,000 kind of give an overview of where we are, the big change 146 00:07:43,000 --> 00:07:45,000 that I've been making or the big thing that I've been doing to. 147 00:07:45,000 --> 00:07:48,400 Reposition. My portfolio is I've grown a 148 00:07:48,400 --> 00:07:52,000 higher conviction in Amazon, a much higher conviction in this 149 00:07:52,000 --> 00:07:54,500 company, I've been reading everything about it, I've been 150 00:07:54,500 --> 00:07:58,100 studying the company I've been looking at a lot of analysis on 151 00:07:58,100 --> 00:08:01,100 it. And when I Can all the options 152 00:08:01,100 --> 00:08:03,300 of different companies to invest in right now. 153 00:08:03,700 --> 00:08:06,900 I feel like there's a ton of value in Amazon, and I know it 154 00:08:06,900 --> 00:08:10,300 has the high P/E ratio, right? The 50 plus PE ratio. 155 00:08:10,600 --> 00:08:14,300 But if you really do a deep dive into this company, and you 156 00:08:14,400 --> 00:08:17,600 realize the assets that they own, it makes more sense in 157 00:08:17,600 --> 00:08:19,800 context. I think the earnings potential 158 00:08:19,800 --> 00:08:23,700 for Amazon are enormous. And I actually think that right 159 00:08:23,700 --> 00:08:26,300 now, it's one of the deeper value companies in the market, 160 00:08:26,300 --> 00:08:29,300 in terms of its ability to pay dividends, do share BuyBacks. 161 00:08:29,800 --> 00:08:33,600 Be highly profitable and show Ridiculous amounts of free cash 162 00:08:33,600 --> 00:08:35,900 flow in the, in the brief future. 163 00:08:35,900 --> 00:08:37,799 I think it will be within the next couple of years. 164 00:08:37,799 --> 00:08:41,500 So Amazon's a company that I've been continually adding to this 165 00:08:41,500 --> 00:08:44,700 position, buying more and more of this stock, as it floats 166 00:08:44,700 --> 00:08:47,400 around its current stock price. I bought it when it's below. 167 00:08:47,400 --> 00:08:51,200 2700, I bought it. When it's above 3,400, I'll keep 168 00:08:51,200 --> 00:08:53,100 buying it. Anywhere within those ranges, 169 00:08:53,100 --> 00:08:55,900 anytime its trading around three thousand dollars, I'll continue 170 00:08:55,900 --> 00:08:58,600 to buy this stock because in my opinion, I think even on a 171 00:08:58,608 --> 00:09:01,500 conservative estimate. It's worth around 4,500. 172 00:09:01,500 --> 00:09:04,800 So Amazon has grown to a very large holding in this portfolio 173 00:09:05,100 --> 00:09:09,100 right now, it makes up around 40 percent of the portfolio. 174 00:09:09,400 --> 00:09:14,900 That's right. 40% in to Amazon. And to put this in perspective, 175 00:09:15,400 --> 00:09:19,300 I took a hit on Netflix, right? This one went down quite a bit. 176 00:09:19,300 --> 00:09:21,500 In fact, a lot of my losses are from Netflix. 177 00:09:21,500 --> 00:09:24,600 This is a big position I bought into at the wrong time and it 178 00:09:24,608 --> 00:09:28,200 took a huge dip because they're their subscriber gains came in 179 00:09:28,200 --> 00:09:29,600 way underneath, what was expected? 180 00:09:29,800 --> 00:09:33,800 And so this one, I took a big hit on but even with Netflix not 181 00:09:33,800 --> 00:09:37,400 performing well over the next three years I could still 182 00:09:37,400 --> 00:09:40,700 outperform spy. Even with Ali Baba not 183 00:09:40,700 --> 00:09:42,900 performing well over the next three years. 184 00:09:43,200 --> 00:09:46,300 I could still outperform spy. It could still happen. 185 00:09:46,700 --> 00:09:48,900 Even with Spotify not performing. 186 00:09:48,900 --> 00:09:52,000 Well over the next three years, I could still outperform spy 187 00:09:52,400 --> 00:09:56,100 now, if Amazon doesn't perform well over the next three years, 188 00:09:56,400 --> 00:09:59,700 I'm not outperforming spy that is just the message here. 189 00:10:00,100 --> 00:10:03,100 I can survive if Netflix doesn't perform well, if Ali Baba 190 00:10:03,100 --> 00:10:06,200 doesn't perform well and if Spotify doesn't, but I can't 191 00:10:06,200 --> 00:10:10,400 survive against the S&P 500, if Amazon doesn't, because this 192 00:10:10,400 --> 00:10:12,100 just makes up too big of a position. 193 00:10:12,100 --> 00:10:16,500 I can't recover if Amazon dips 50% and never recovers. 194 00:10:16,700 --> 00:10:20,600 If that situation plays out, I've lost the S&P 500 will win. 195 00:10:20,800 --> 00:10:23,100 Now, I don't think that situation will play out. 196 00:10:23,200 --> 00:10:25,000 Now, if we look at Amazon, I just want to go over a couple 197 00:10:25,000 --> 00:10:27,900 things here real quick. If you want a bigger Deep dive, 198 00:10:27,900 --> 00:10:29,700 there is a playlist on my channel. 199 00:10:29,800 --> 00:10:33,500 Channel of three hours of content in depth research, that 200 00:10:33,500 --> 00:10:36,700 go into different parts of Amazon, overall, big Tech, and 201 00:10:36,700 --> 00:10:41,200 valuation goes over the marketplace and how under under 202 00:10:41,200 --> 00:10:45,300 earning it is currently with its potential and it goes over AWS 203 00:10:45,300 --> 00:10:47,100 and the future growth of that company. 204 00:10:47,400 --> 00:10:50,900 So, I would recommend if you're interested or baffled of why I'm 205 00:10:50,900 --> 00:10:53,800 buying so much Amazon. I would watch that playlist. 206 00:10:53,800 --> 00:10:55,600 It's just in the playlist part of this channel. 207 00:10:55,800 --> 00:10:58,000 Now Amazon's an interesting company because a lot of people 208 00:10:58,000 --> 00:11:00,700 don't really realize the Types of businesses. 209 00:11:00,700 --> 00:11:02,400 They actually have and what they make money with. 210 00:11:02,700 --> 00:11:04,700 For example, many people don't know. 211 00:11:05,100 --> 00:11:07,800 The Amazon is in the advertising business. 212 00:11:08,100 --> 00:11:10,200 That's right. They are an ad business like 213 00:11:10,200 --> 00:11:15,000 Facebook like Google. In fact, Amazon makes more from 214 00:11:15,000 --> 00:11:18,900 advertising then YouTube. So if you're investing in Google 215 00:11:18,900 --> 00:11:21,700 because YouTube is growing and you think that ads are good 216 00:11:21,700 --> 00:11:24,500 thing and YouTube's going to benefit from that realize that 217 00:11:24,500 --> 00:11:27,800 Amazon makes more money from their Marketplace ads than 218 00:11:27,800 --> 00:11:30,500 YouTube and they're growing at a Faster Pace. 219 00:11:30,700 --> 00:11:33,100 That's something that a lot of people don't realize, that's 220 00:11:33,100 --> 00:11:35,100 just one part of their business. Now, the next thing that I'd 221 00:11:35,100 --> 00:11:40,000 mentioned is last, we heard in April of 2021 Jeff, Bezos said 222 00:11:40,000 --> 00:11:44,300 that Amazon Prime topped, 200 million members to put that in 223 00:11:44,308 --> 00:11:48,000 perspective. Netflix has 222 million members, 224 00:11:48,800 --> 00:11:53,500 Costco has 67 million members, so 200 million members is a lot, 225 00:11:53,900 --> 00:11:56,400 and Amazon has one of the highest. 226 00:11:56,400 --> 00:11:58,700 In fact, it actually is one of the only companies that beats 227 00:11:58,700 --> 00:12:01,800 out Costco. In terms of retention rate and 228 00:12:01,800 --> 00:12:05,400 customer satisfaction. Basically a lot of people view 229 00:12:05,400 --> 00:12:08,100 their Amazon Prime membership is like a utility bill. 230 00:12:08,200 --> 00:12:09,900 They just pay it they don't even know what they're paying. 231 00:12:10,100 --> 00:12:11,900 They're going to pay it, no matter what like they have. 232 00:12:12,200 --> 00:12:15,500 No thought of ever canceling. It that's how sticky this type 233 00:12:15,500 --> 00:12:18,400 of membership is when I see this type of business, I think that 234 00:12:18,400 --> 00:12:21,700 it's very difficult for another company to uproot this or 235 00:12:21,700 --> 00:12:23,500 disrupt this. I think it will just continue to 236 00:12:23,500 --> 00:12:25,000 grow. The next thing that I'd point 237 00:12:25,000 --> 00:12:28,900 out about Amazon is the way that they work, they always go for 238 00:12:28,900 --> 00:12:31,600 scale first. First then profitability and you 239 00:12:31,600 --> 00:12:33,600 can see this pattern over and over again. 240 00:12:33,900 --> 00:12:35,600 They've done the same thing with AWS. 241 00:12:35,600 --> 00:12:36,900 They've done it with their Marketplace. 242 00:12:36,900 --> 00:12:38,800 They're doing it with their Prime Membership. 243 00:12:38,900 --> 00:12:41,900 They're going for scale, they're going for huge amounts of 244 00:12:41,900 --> 00:12:44,900 customers, and then they start to turn the wheels on how to 245 00:12:44,900 --> 00:12:47,800 monetize, we saw what their Market Place, just over the past 246 00:12:47,800 --> 00:12:50,500 four years. Then make this ad business out 247 00:12:50,500 --> 00:12:52,700 of nowhere, that's now surpassing YouTube. 248 00:12:52,900 --> 00:12:55,800 Well, now, you can see the Amazon is really bolstering 249 00:12:55,800 --> 00:12:59,200 their spend on their Amazon Prime video library. 250 00:12:59,200 --> 00:13:01,000 They're competing. With Netflix directly. 251 00:13:01,400 --> 00:13:05,700 Amazon, spent thirteen billion dollars on Prime Prime video 252 00:13:05,800 --> 00:13:08,700 this year. Netflix, spent 17 billion. 253 00:13:08,900 --> 00:13:12,800 So Amazon is catching up to Netflix in spend on their video 254 00:13:12,800 --> 00:13:15,500 library. Now, there's differences between 255 00:13:15,500 --> 00:13:18,300 Amazon and Netflix and I know this as a Netflix. 256 00:13:18,300 --> 00:13:21,900 Investor Amazon has many ways that they can benefit from their 257 00:13:21,900 --> 00:13:25,700 Prime video and ways that Netflix can't, for example, when 258 00:13:25,700 --> 00:13:29,500 squid game came out, one of the top-selling items where those 259 00:13:29,500 --> 00:13:32,300 values Vans shoes that all of them war with their suit. 260 00:13:32,300 --> 00:13:36,800 This was a squid game show, but Vans benefited and Amazon 261 00:13:36,800 --> 00:13:39,500 benefited because they sold those Vans shoes. 262 00:13:39,500 --> 00:13:42,800 Everybody went online, they bought the Van shoes and that 263 00:13:42,800 --> 00:13:46,400 was Amazon benefiting from from Netflix has content. 264 00:13:46,700 --> 00:13:49,200 Now, Netflix is trying to create a shop where they can sell that 265 00:13:49,200 --> 00:13:51,400 stuff, you know, in and of itself and try to create that 266 00:13:51,400 --> 00:13:54,900 ecosystem. But Amazon has an advantage 267 00:13:54,900 --> 00:13:57,000 here. If they create content that's 268 00:13:57,000 --> 00:13:59,500 very popular, that feature is intriguing. 269 00:14:00,200 --> 00:14:02,400 Intriguing clothing or different things. 270 00:14:02,600 --> 00:14:06,500 They can link that potentially with their Marketplace and have 271 00:14:06,500 --> 00:14:09,100 crossover sales directly. They could say, Hey you like 272 00:14:09,100 --> 00:14:11,200 this show? Here is the shoes that they wear 273 00:14:11,200 --> 00:14:12,800 in this show. Hairs that jacket that 274 00:14:12,800 --> 00:14:15,100 everyone's talking about that they were in the show right 275 00:14:15,100 --> 00:14:17,600 there on the marketplace, right next to the video. 276 00:14:17,600 --> 00:14:20,600 Basically, Amazon has a lot of ways to be able to monetize 277 00:14:20,600 --> 00:14:24,000 their content on Prime Video in the future that I think other 278 00:14:24,000 --> 00:14:27,400 companies can try to do. They can try to mimic it, but it 279 00:14:27,400 --> 00:14:30,200 won't be as successful as Amazon because they have a massive 280 00:14:30,200 --> 00:14:33,200 infrastructure Market Place built directly into their 281 00:14:33,200 --> 00:14:35,800 streaming service. All of it is linked and that 282 00:14:35,800 --> 00:14:38,000 gives them an inherent advantage. 283 00:14:38,000 --> 00:14:40,300 And then, of course, I can't forget to mention AWS, it's 284 00:14:40,300 --> 00:14:42,400 grown to a 71 billion dollar run rate. 285 00:14:42,600 --> 00:14:44,700 It is a massive company in and of itself. 286 00:14:44,700 --> 00:14:47,900 It has around 40% margins, the Tailwind show that this thing 287 00:14:47,900 --> 00:14:50,200 will grow for the next at least ten plus years. 288 00:14:50,500 --> 00:14:52,600 And I think that most analysts aren't understating its 289 00:14:52,600 --> 00:14:54,900 potential growth. So when I look at Amazon, some 290 00:14:54,900 --> 00:14:58,500 people might think Joseph this is you know risky to have 40 291 00:14:58,500 --> 00:15:01,700 percent of your portfolio. And one company, I don't really 292 00:15:01,700 --> 00:15:04,800 think it's as risky as a lot of people think, because I've you 293 00:15:04,800 --> 00:15:08,200 Amazon, not as just one company, but I view it as a huge 294 00:15:08,200 --> 00:15:11,500 advertising business with their Marketplace ads, making up 20 to 295 00:15:11,500 --> 00:15:14,300 30 billion dollars. I view it as a Prime 296 00:15:14,300 --> 00:15:17,000 subscription video business, that has 200 million plus 297 00:15:17,000 --> 00:15:19,700 subscribers. That's like Costco, you know, 298 00:15:19,700 --> 00:15:23,400 and Netflix and then I view it as AWS which has a 71 billion 299 00:15:23,400 --> 00:15:26,300 dollar run rate. It's in web hosting almost an 300 00:15:26,300 --> 00:15:30,000 indestructible business model. I view it as a lot of Different 301 00:15:30,000 --> 00:15:33,700 companies, linked together under one company, kind of like a tech 302 00:15:33,700 --> 00:15:35,900 version of Berkshire Hathaway. Now, if we look at the 303 00:15:35,900 --> 00:15:38,500 fundamentals using qualtrics insights, this is a website 304 00:15:38,500 --> 00:15:40,900 that's available. As part of the patreon, we can 305 00:15:40,900 --> 00:15:43,200 get an idea of how the numbers look for Amazon. 306 00:15:43,400 --> 00:15:46,300 It's currently out of one point. Five seven billion dollar market 307 00:15:46,300 --> 00:15:47,700 cap or trillion dollar market cap. 308 00:15:47,700 --> 00:15:52,400 Rather it has a PE ratio of 54. So that's the part that deters a 309 00:15:52,408 --> 00:15:55,900 lot of investors again. I think the Amazon games, the 310 00:15:55,900 --> 00:15:58,400 bottom line, they don't spend a lot of their cash flow to the 311 00:15:58,408 --> 00:15:59,500 bottom line. They just throw it in. 312 00:15:59,700 --> 00:16:01,100 Other projects and reinvestments. 313 00:16:01,700 --> 00:16:03,600 I think if they wanted to, they could bring this down 314 00:16:03,600 --> 00:16:05,400 drastically. I really think so. 315 00:16:05,400 --> 00:16:08,500 I think overnight, they could Amazon is a Growth Company. 316 00:16:08,700 --> 00:16:10,400 Some people say, the growth is slowing. 317 00:16:10,600 --> 00:16:16,600 Consider the fact that from 2022, 2021, Amazon added more 318 00:16:17,000 --> 00:16:21,100 general merchandise value than what Target revenues in an 319 00:16:21,100 --> 00:16:23,300 entire year. So just in one year of 320 00:16:23,300 --> 00:16:27,900 incremental increases Amazon added, a full Target worth of 321 00:16:27,900 --> 00:16:30,500 general merchandise value. That's How much they added just 322 00:16:30,500 --> 00:16:33,600 last year. So the company is growing in one 323 00:16:33,600 --> 00:16:35,700 year, they grew a targets worth of growth. 324 00:16:35,700 --> 00:16:37,500 The ibadah shows steady growth as well. 325 00:16:37,600 --> 00:16:40,800 Now here's an interesting thing, Amazon's free cash flow again. 326 00:16:40,800 --> 00:16:43,300 This is a one and a half trillion dollar company it was 327 00:16:43,300 --> 00:16:45,000 growing. Its free cash flow steadily. 328 00:16:45,100 --> 00:16:49,200 Like a company of this size should and then in 2021 during 329 00:16:49,200 --> 00:16:52,100 one of their highest growth years, the free cash flow went 330 00:16:52,100 --> 00:16:56,300 into the - by fourteen billion dollars so it from positive 26 331 00:16:56,300 --> 00:17:00,700 billion to negative 14 billion. So A lot of investors are like 332 00:17:00,700 --> 00:17:05,400 what's going on here, right? Cash flow is the amount of money 333 00:17:05,400 --> 00:17:08,400 they're taking in - their Capital expenditures and it's 334 00:17:08,400 --> 00:17:11,900 what's left behind that. So Amazon must have done a lot 335 00:17:11,900 --> 00:17:15,200 of capex. A lot of spending in 2021 to 336 00:17:15,200 --> 00:17:17,900 throw this number into the - and of course we know that they 337 00:17:17,900 --> 00:17:20,599 hired hundreds and hundreds of thousands of new employees. 338 00:17:20,900 --> 00:17:24,200 They open up every single year hundreds of warehouses, they 339 00:17:24,200 --> 00:17:27,099 throw more money into spending on different projects that you 340 00:17:27,099 --> 00:17:29,000 know there's so many of them we don't have time to talk about 341 00:17:29,000 --> 00:17:31,000 all of them. So we don't have the specifics 342 00:17:31,000 --> 00:17:33,300 of every single program. They spent their money on a 343 00:17:33,300 --> 00:17:35,200 2021. But what we do know is they 344 00:17:35,200 --> 00:17:38,000 spent a fortune. They spent a fortune on capex, 345 00:17:38,200 --> 00:17:41,100 in my opinion, it's very unlikely for them to continue 346 00:17:41,100 --> 00:17:44,500 this level of spend throwing their free cash flow perpetually 347 00:17:44,500 --> 00:17:46,800 into the - I think that's very unlikely. 348 00:17:47,200 --> 00:17:50,000 I plan on seeing this number swing back upwards in the coming 349 00:17:50,000 --> 00:17:52,100 years so that's the free cash flow. 350 00:17:52,500 --> 00:17:54,200 The net income has grown over time. 351 00:17:54,400 --> 00:17:57,900 This number is thrown off a little bit by the ribbon steak. 352 00:17:57,900 --> 00:17:59,500 It should be lower than it actually is. 353 00:18:00,500 --> 00:18:03,200 Because the river and steak affected the net income and the 354 00:18:03,200 --> 00:18:04,800 earnings per share. And then if we switch over to 355 00:18:04,800 --> 00:18:07,900 quarterly, the debts pretty low, at forty eight point seven for 356 00:18:08,300 --> 00:18:11,400 the cash, currently continues to climb at 96 billion dollars. 357 00:18:11,400 --> 00:18:14,000 So they have a lot of money, they don't pay a dividend and 358 00:18:14,000 --> 00:18:16,100 their shares outstanding Are Climbing. 359 00:18:16,100 --> 00:18:18,900 Over time, albeit, not by that much. 360 00:18:19,000 --> 00:18:20,400 They're just paying their employees. 361 00:18:20,400 --> 00:18:23,800 It's a minor amount of dilution they just announced 10 billion 362 00:18:23,800 --> 00:18:27,300 dollars a share BuyBacks and that is a miniscule amount for 363 00:18:27,300 --> 00:18:29,600 this company ten billion dollars of BuyBacks. 364 00:18:29,800 --> 00:18:32,200 One and a half trillion dollar company not a lot. 365 00:18:32,200 --> 00:18:35,400 So I really don't take that into account overall Amazon. 366 00:18:35,600 --> 00:18:38,700 In my opinion, again, I think this company has so much 367 00:18:38,700 --> 00:18:42,400 profitability potential in the near term and the near future. 368 00:18:42,600 --> 00:18:45,000 I think we could see enormous amounts of free cash flow. 369 00:18:45,000 --> 00:18:47,800 So I'm very bullish on it. I think that these metrics will 370 00:18:47,800 --> 00:18:50,700 look funny in hindsight, but time will tell. 371 00:18:50,800 --> 00:18:53,700 That's a company that I have 40 percent of my portfolio in. 372 00:18:53,700 --> 00:18:56,200 Now next up we have Netflix, one of my favorite companies 373 00:18:56,200 --> 00:18:58,500 obviously. But so far this one has been a 374 00:18:58,500 --> 00:19:00,000 terrible stock. Tone. 375 00:19:00,200 --> 00:19:04,100 I have it as 15% of my portfolio, I'm down 9600 dollars 376 00:19:04,400 --> 00:19:06,400 and the current value is 18,000 dollars. 377 00:19:06,400 --> 00:19:11,000 So this is one where the story for Netflix basically is that 378 00:19:11,500 --> 00:19:14,600 the, the street investors in it were expecting a certain amount 379 00:19:14,600 --> 00:19:16,300 of subscriber growth for this quarter. 380 00:19:16,300 --> 00:19:18,600 They're expecting Netflix to say that they're going to grow five 381 00:19:18,600 --> 00:19:21,400 million subscribers, Netflix said that they're expecting two 382 00:19:21,400 --> 00:19:23,900 million and when you give half or less than half of the 383 00:19:23,900 --> 00:19:27,900 expected growth in a forecast that stock tends to fall and 384 00:19:27,900 --> 00:19:31,300 unfortunately, I was part of that false I've lost some money 385 00:19:31,300 --> 00:19:34,300 so far with Netflix, but I remain bullish on this company. 386 00:19:34,600 --> 00:19:38,400 In fact, after it fell in price, I bought more of the company on 387 00:19:38,400 --> 00:19:41,900 the dip, or at least, hopefully, the dip, and then Bill Ackman 388 00:19:41,900 --> 00:19:43,400 entered into the position as well. 389 00:19:43,400 --> 00:19:45,700 And here we are, we're still invested in Netflix. 390 00:19:45,700 --> 00:19:49,800 Now, as of right now, Netflix has a forward P/E ratio of 30:2, 391 00:19:50,300 --> 00:19:53,500 so it's not way up there in the astronomically High area. 392 00:19:53,700 --> 00:19:57,000 It's come down a little bit more to reality in 32, but it's still 393 00:19:57,000 --> 00:19:59,200 an elevated PE. So there's still high. 394 00:19:59,700 --> 00:20:02,300 Stations of this firm. And I think that Netflix has a 395 00:20:02,308 --> 00:20:06,400 decent chance of really proving that they're deserving of this 396 00:20:06,400 --> 00:20:08,600 higher multiple. Keep in mind that even though 397 00:20:08,600 --> 00:20:12,300 the projections were below, what the street wanted the stock is 398 00:20:12,300 --> 00:20:14,600 still doing well. Look at the revenue growth, this 399 00:20:14,600 --> 00:20:17,500 is a growing firm and it's growing very quickly. 400 00:20:17,600 --> 00:20:19,500 That's a good thing for investors in Netflix. 401 00:20:19,900 --> 00:20:23,300 The ibadah also looks really good, the free cash flow. 402 00:20:23,300 --> 00:20:25,800 We look over annually here. This paints a little bit 403 00:20:25,800 --> 00:20:28,500 different of a picture. The big concern for Netflix has 404 00:20:28,500 --> 00:20:31,400 historically been Losing money, they're losing money. 405 00:20:31,500 --> 00:20:32,800 They're going to be swamped by debt. 406 00:20:32,800 --> 00:20:34,000 They're never going to be profitable. 407 00:20:34,100 --> 00:20:36,100 Their business model. Doesn't allow them to ever be 408 00:20:36,100 --> 00:20:39,300 free cash, flow generative clearly, they've proven the 409 00:20:39,300 --> 00:20:43,400 Skeptics wrong there. They lost money in 2017. 2018, 410 00:20:43,400 --> 00:20:46,700 2019, then they turn positive in 2020. 411 00:20:47,000 --> 00:20:51,900 Now, 2020 was unique and that reversed slightly back to barely 412 00:20:51,900 --> 00:20:55,000 in the - 130 million dollars in 2021. 413 00:20:55,300 --> 00:20:59,000 But Netflix has reiterated many times, they are going to be free 414 00:20:59,000 --> 00:21:01,500 cash, flow positive. Positive from here on out in 415 00:21:01,500 --> 00:21:03,800 2022. This should be a positive 416 00:21:03,800 --> 00:21:05,700 number. So we'll be looking for that to 417 00:21:05,700 --> 00:21:09,300 be positive in the future and that's the whole idea of buying 418 00:21:09,300 --> 00:21:11,600 these companies. Every company that I'm doing 419 00:21:11,600 --> 00:21:16,400 research on, I'm looking for how they're going to be a massive 420 00:21:16,500 --> 00:21:18,600 free cash flow generative machine. 421 00:21:18,900 --> 00:21:22,400 That's what I'm looking for. So I'm buying Amazon, I might be 422 00:21:22,400 --> 00:21:24,600 buying all these companies with these great stories and 423 00:21:24,600 --> 00:21:26,900 different aspects. But really, at the end of the 424 00:21:26,900 --> 00:21:29,500 day, I want a company that can do a lot of this. 425 00:21:29,700 --> 00:21:32,800 A lot of cash flow I think Netflix will get there. 426 00:21:33,100 --> 00:21:36,300 I think they're on the verge of turning that corner and going 427 00:21:36,300 --> 00:21:39,000 from a money-losing company to a free cash, flow generative 428 00:21:39,000 --> 00:21:41,500 company. They've leveraged debt with low 429 00:21:41,500 --> 00:21:44,100 interest rates for a long time, to grow their library and to 430 00:21:44,108 --> 00:21:46,700 grow their subscriber base. And now they're turning that 431 00:21:46,700 --> 00:21:49,200 corner. So whenever I do analysis on any 432 00:21:49,200 --> 00:21:52,000 of these companies, I'm wanting the free cash flow. 433 00:21:52,100 --> 00:21:54,500 That's the big thing that I'm looking for because that's what 434 00:21:54,500 --> 00:21:57,700 funds paying down debt. Doing share, BuyBacks growing, 435 00:21:57,700 --> 00:21:59,400 the cash balance, growing the earnings. 436 00:21:59,700 --> 00:22:02,200 Paying dividends right? All of that comes from the free 437 00:22:02,200 --> 00:22:04,700 cash flow. So this metric right here is 438 00:22:04,700 --> 00:22:06,800 Paramount it's incredibly important. 439 00:22:06,900 --> 00:22:09,700 Now let's go ahead and move on the net income. 440 00:22:10,200 --> 00:22:12,900 It's growing over time. Netflix has always had a very 441 00:22:12,900 --> 00:22:16,800 quickly growing net income. If we look at the, let's move 442 00:22:16,800 --> 00:22:18,700 over to quarterly. If we look at the debt here, 443 00:22:19,400 --> 00:22:23,300 Netflix has a reduction in their debt over the last five quarters 444 00:22:23,600 --> 00:22:25,900 because they're becoming more free cash flow generative. 445 00:22:25,900 --> 00:22:28,600 Now they have fourteen point six nine billion dollars of debt 446 00:22:28,800 --> 00:22:30,700 their cash. Gone down a little bit. 447 00:22:30,900 --> 00:22:33,800 They have six billion dollars of cash right now and then if we 448 00:22:33,800 --> 00:22:36,500 look at the earnings per share, this is pretty interesting. 449 00:22:36,800 --> 00:22:40,600 This Paints the picture of when a company that's been leveraging 450 00:22:40,600 --> 00:22:43,800 debt and growing and trying to reach scale finally reaches 451 00:22:43,800 --> 00:22:45,600 scale. See how much their earnings 452 00:22:45,600 --> 00:22:51,000 exploded late 2017 and they've climbed very rapidly if we move 453 00:22:51,000 --> 00:22:53,100 over to annually here. I think this paints a clear 454 00:22:53,100 --> 00:22:55,900 picture. Look at this growth in EPS. 455 00:22:56,100 --> 00:22:58,800 This is pretty impressive. Even if you're not a Netflix 456 00:22:58,800 --> 00:23:01,300 investor you have Admit that this earnings per share growth 457 00:23:01,300 --> 00:23:07,400 is impressive in 2021. They had $11 of earnings $11.24. 458 00:23:07,900 --> 00:23:10,800 When I was doing my analysis on Netflix and my discounted cash 459 00:23:10,800 --> 00:23:12,100 flows and research on the company. 460 00:23:12,500 --> 00:23:18,000 I came to the estimation that they will have $33 of eps in 461 00:23:18,000 --> 00:23:22,900 2026. So in 2025, by my goal, by by 462 00:23:22,900 --> 00:23:26,800 the end of 2025, to beat the S&P 500, I think that Netflix will 463 00:23:26,800 --> 00:23:32,900 have a four deep Us of $33 that seems aggressive but I think 464 00:23:32,900 --> 00:23:36,500 that they can do it. And on a 27, Ford PE ratio, for 465 00:23:36,500 --> 00:23:40,900 example, that is $890 per share. So that's my estimate. 466 00:23:41,100 --> 00:23:45,300 I think that Netflix will be worth around 800 to 900 dollars 467 00:23:45,300 --> 00:23:49,600 in 2025, based on a thirty three dollars per share earnings in 468 00:23:49,600 --> 00:23:52,000 2026. Now there's some variables maybe 469 00:23:52,000 --> 00:23:55,300 they'll trade at a lower PE than 27, but in my opinion, I think a 470 00:23:55,308 --> 00:23:58,300 27 is a pretty decent multiple on a company. 471 00:23:58,700 --> 00:24:01,300 If it has Chained to grow for the next five years. 472 00:24:01,300 --> 00:24:03,500 And it really has hundreds of millions of subscribers. 473 00:24:03,500 --> 00:24:05,900 So that's my valuation on the company, their shares 474 00:24:05,900 --> 00:24:08,700 outstanding have been going up, but it's decelerating. 475 00:24:08,700 --> 00:24:12,300 And in fact, we look over at quarterly hair, their shares 476 00:24:12,300 --> 00:24:15,900 have basically topped out and this should start to go down 477 00:24:15,900 --> 00:24:17,700 because they announced share BuyBacks. 478 00:24:17,900 --> 00:24:20,800 So again they are becoming free cash flow generative. 479 00:24:20,900 --> 00:24:23,100 That's the big thing. I'm looking for every one of 480 00:24:23,100 --> 00:24:25,900 these Investments, I think Netflix will have enough free 481 00:24:25,900 --> 00:24:29,300 cash flow to start doing, share BuyBacks to start improving 482 00:24:29,300 --> 00:24:31,700 their What she and improving the standing of their company 483 00:24:31,700 --> 00:24:34,000 reducing risk in it. And that's the reason that I'm 484 00:24:34,000 --> 00:24:37,100 investing in this company. Now, after Netflix, just shy of 485 00:24:37,100 --> 00:24:41,300 Netflix, we have Google at a 14.7% waiting, so around the 486 00:24:41,300 --> 00:24:44,600 same size as Netflix now, nobody's strangers to Google, so 487 00:24:44,600 --> 00:24:46,400 I won't go over. Just the basics of the company 488 00:24:46,600 --> 00:24:48,800 but if we look at the fundamentals here, Google's 489 00:24:48,800 --> 00:24:53,200 basically on paper like almost the perfect fundamental company 490 00:24:53,400 --> 00:24:55,500 almost as close as Microsoft, right? 491 00:24:55,800 --> 00:24:59,300 Except it's a lot cheaper than Microsoft on paper so it has 492 00:24:59,300 --> 00:25:01,600 nearly Early perfect fundamentals and it's trading at 493 00:25:01,600 --> 00:25:05,600 a very reasonable PE ratio a 23. That's the story with the 494 00:25:05,608 --> 00:25:07,700 company. You're buying an incredibly high 495 00:25:07,700 --> 00:25:10,000 quality company that has multiple monopolies, that 496 00:25:10,000 --> 00:25:13,600 continues to grow faster than many smaller companies that has 497 00:25:13,700 --> 00:25:18,700 a perfect balance sheet with 140 billion dollars in cash and only 498 00:25:18,700 --> 00:25:21,900 twelve billion dollars in debt. So they're not at risk of any 499 00:25:21,900 --> 00:25:25,100 kind of default or anything happening to it, their earnings 500 00:25:25,100 --> 00:25:29,200 per share grew rapidly in 2020, which is kind of a concern 501 00:25:29,200 --> 00:25:31,800 because Certainly some pull forward, so it's not going to be 502 00:25:31,800 --> 00:25:34,400 growing this rapidly in the future, but even at very 503 00:25:34,400 --> 00:25:37,500 conservative estimates, they're going to continue to grow and 504 00:25:37,500 --> 00:25:41,000 like I pointed out I'm investing in free cash flow looking for 505 00:25:41,000 --> 00:25:44,000 highly profitable, free cash, flow generative companies, 506 00:25:44,200 --> 00:25:47,200 they'll be able to use all of this money to continually pay 507 00:25:47,200 --> 00:25:50,500 dividends or do share BuyBacks, and in the case of Google, they 508 00:25:50,500 --> 00:25:53,600 throw and a share buyback. So they are completely 509 00:25:53,600 --> 00:25:56,600 eliminating. Their share count over time and 510 00:25:56,800 --> 00:25:59,400 it's pretty dramatic. They've gone from 694 m. 511 00:25:59,600 --> 00:26:04,500 Million to 662 million and the course of two and a half years 512 00:26:04,700 --> 00:26:06,800 that is a dramatic level of share buyback. 513 00:26:06,800 --> 00:26:08,900 So, the bowl case for Google is extremely simple. 514 00:26:09,100 --> 00:26:12,200 It's an incredibly powerful well-established Monopoly that's 515 00:26:12,200 --> 00:26:14,900 trading at a 22 PE ratio. Now, moving on, we have 516 00:26:14,900 --> 00:26:19,500 Microsoft just under Google with a 9.1% waiting which is ten 517 00:26:19,500 --> 00:26:22,300 thousand seven hundred dollars. Now if we bring up Microsoft 518 00:26:22,300 --> 00:26:26,000 hair, much like Google, it has Flawless fundamentals. 519 00:26:26,000 --> 00:26:28,400 I mean, it's just fundamentally almost the perfect company. 520 00:26:28,400 --> 00:26:31,100 If we look at any of them, Tricks are the revenue is 521 00:26:31,100 --> 00:26:33,700 growing steadily. It's in fact growing almost 522 00:26:33,700 --> 00:26:35,500 perfectly. It looks like it's made up. 523 00:26:35,700 --> 00:26:37,300 We have the E better hair. That's growing. 524 00:26:37,300 --> 00:26:40,400 Dramatically free cash. Flow growth is exceptional. 525 00:26:40,500 --> 00:26:45,100 Look at this free cash flow in 2020. 156 billion dollars from 526 00:26:45,100 --> 00:26:49,700 2020 which was 45 Microsoft is growing their free cash flow way 527 00:26:49,700 --> 00:26:52,900 faster than analysts expect. So if you think analysts can 528 00:26:52,900 --> 00:26:55,900 easily do analysis on, big companies like Microsoft, 529 00:26:55,900 --> 00:26:58,500 they've been wrong time and time again on the free cash flow. 530 00:26:58,600 --> 00:27:01,200 It continues to be Beat analyst, expectations. 531 00:27:01,500 --> 00:27:03,800 You look at the net income, that's growing like crazy. 532 00:27:04,100 --> 00:27:07,000 The debts declining over time, they have way more cash than 533 00:27:07,000 --> 00:27:08,700 debt. They're growing their dividend 534 00:27:08,700 --> 00:27:11,800 over a long period of time. Never they don't have a chance 535 00:27:11,800 --> 00:27:14,500 of canceling, the dividend and the shares outstanding is 536 00:27:14,500 --> 00:27:17,000 declining as they do rapid share BuyBacks. 537 00:27:17,000 --> 00:27:19,500 So again, the fundamentally perfect company. 538 00:27:19,700 --> 00:27:23,000 It trades at a slightly higher PE ratio than Google, which I 539 00:27:23,008 --> 00:27:26,900 think makes sense a little bit. You might consider Microsoft and 540 00:27:26,900 --> 00:27:30,600 Google on even terms and they should trade The exact same PE 541 00:27:30,600 --> 00:27:34,200 ratio, I don't necessarily believe so Google is in the 542 00:27:34,200 --> 00:27:36,500 advertisement business, which I think is a little bit more 543 00:27:36,500 --> 00:27:39,300 volatile than Microsoft's. Microsoft's is in a lot of 544 00:27:39,400 --> 00:27:42,600 subscription businesses which are not volatile at all. 545 00:27:42,800 --> 00:27:45,500 So I think investors are slightly giving a premium to 546 00:27:45,500 --> 00:27:47,200 Microsoft which I think is warranted. 547 00:27:47,200 --> 00:27:50,600 So Microsoft right now I think is under undervalued. 548 00:27:50,700 --> 00:27:53,700 I think the company should be trading mid-30s, multiple that's 549 00:27:53,700 --> 00:27:55,400 what I think this company deserves, but that's just my 550 00:27:55,400 --> 00:27:56,600 opinion. I think Microsoft is 551 00:27:56,600 --> 00:27:59,400 undervalued, and I think that this company will outperform the 552 00:27:59,500 --> 00:28:02,600 broader Market from now until the end of 2025. 553 00:28:02,600 --> 00:28:06,800 Now after Microsoft, we have Ali Baba at a 5.3 percent holding. 554 00:28:07,100 --> 00:28:09,500 I'm not going to go into this one because I've recently made 555 00:28:09,500 --> 00:28:12,600 so much content about it. So if you want to see Ali, Baba 556 00:28:12,600 --> 00:28:15,200 just gone view, one of the previous videos, but I haven't 557 00:28:15,200 --> 00:28:18,400 sold any of this company. My last purchase of it was in 558 00:28:18,400 --> 00:28:21,700 October of 2021. So I haven't been buying it. 559 00:28:21,700 --> 00:28:23,300 I haven't been focusing on it anymore. 560 00:28:23,700 --> 00:28:25,900 I'm just kind of holding this company and seeing how it plays 561 00:28:25,900 --> 00:28:28,800 out. It's 5% of my portfolio, so it's 562 00:28:28,800 --> 00:28:30,000 still a decent. Amount. 563 00:28:30,000 --> 00:28:32,900 And in my opinion, there's still a decent chance. 564 00:28:32,900 --> 00:28:35,900 This one will make a comeback and I know everyone hates it 565 00:28:35,900 --> 00:28:37,900 right now. Everyone disagrees with that. 566 00:28:37,908 --> 00:28:42,000 Charlie Munger apparently sold. 50% of the holding in my 567 00:28:42,000 --> 00:28:43,600 opinion. I think that skeptical. 568 00:28:43,600 --> 00:28:46,500 I think Charlie Munger, this is just my guess, but I think he's 569 00:28:46,500 --> 00:28:48,500 just as bullish on Ali, Baba as ever. 570 00:28:48,500 --> 00:28:52,100 But regardless there's just so much layered - news on this 571 00:28:52,100 --> 00:28:54,700 company that I don't see it. Moving up in the short term. 572 00:28:54,700 --> 00:28:57,100 I think it's going to be it's going to have its stock price 573 00:28:57,100 --> 00:28:59,900 suppressed in the short term but over the next five years Years, 574 00:28:59,900 --> 00:29:02,600 things, may change. Now, next up, we have Salesforce 575 00:29:02,600 --> 00:29:05,400 many Microsoft making up five percent of the portfolio. 576 00:29:05,700 --> 00:29:08,900 This is a great company that the market sold off with all the 577 00:29:08,900 --> 00:29:11,300 other tech companies. So they kind of just sold this 578 00:29:11,300 --> 00:29:13,600 one off in the bucket of the text sell-off. 579 00:29:13,900 --> 00:29:16,200 And I think it's a little bit, undeserving, because Salesforce 580 00:29:16,200 --> 00:29:18,800 is, it's a very high quality company. 581 00:29:18,800 --> 00:29:20,500 It's not like most Cloud companies. 582 00:29:20,900 --> 00:29:22,100 We look at the fundamentals here. 583 00:29:22,900 --> 00:29:26,400 The big thing that we're looking for again is a growing free, 584 00:29:26,400 --> 00:29:29,400 cash flow. We look at Salesforce and what 585 00:29:29,600 --> 00:29:31,900 Sure. Does this paint, this is growing 586 00:29:31,900 --> 00:29:36,000 free, cash flow and 2019. They had 2.8 billion in 2020. 587 00:29:36,000 --> 00:29:40,600 They had 3.7 billion in 2021, they had four point six five 588 00:29:40,600 --> 00:29:42,800 billion. This number is growing steadily. 589 00:29:43,000 --> 00:29:45,400 That's the main thing that I'm focusing on is I'm building 590 00:29:45,400 --> 00:29:49,100 positions and firms that I think will have this free cash flow 591 00:29:49,100 --> 00:29:53,200 growth for over a decade. Just continual expansion of 592 00:29:53,200 --> 00:29:55,800 their free cash flow. Now, Salesforce has leverage 593 00:29:55,800 --> 00:29:57,800 cheap debt to buy things like slack. 594 00:29:57,800 --> 00:30:00,800 They leverage sheep debt to grow Ow, but they do not need it to 595 00:30:00,800 --> 00:30:02,400 grow. They are very much free cash 596 00:30:02,400 --> 00:30:04,300 flow generative. They have 11 million dollars of 597 00:30:04,300 --> 00:30:07,100 cash on the balance sheet. Right now, they are doing some 598 00:30:07,100 --> 00:30:10,100 dilution as they're paying their developers that way, but I 599 00:30:10,100 --> 00:30:13,300 suspect in the future, they'll be a very free cash flow 600 00:30:13,300 --> 00:30:16,100 generative company even more so than now, they'll pay down the 601 00:30:16,100 --> 00:30:18,600 debt and they'll be doing aggressive, share BuyBacks. 602 00:30:18,600 --> 00:30:20,700 I really see that in the future sales force. 603 00:30:20,900 --> 00:30:23,500 So in my opinion, I think this company is a steal right now. 604 00:30:23,800 --> 00:30:25,500 I'm excited to have it in my portfolio. 605 00:30:25,800 --> 00:30:27,600 I think it will outperformed the S&P 500. 606 00:30:27,700 --> 00:30:31,200 Now after that, we have Adobe At a 4.7 waiting. 607 00:30:31,200 --> 00:30:34,200 That's $5500. This company has all the things 608 00:30:34,200 --> 00:30:37,200 that I just mentioned that I look for it has a massively 609 00:30:37,200 --> 00:30:39,500 growing free cash flow. You can see the trends over 610 00:30:39,500 --> 00:30:43,100 time, the company has everything you look for growing revenues 611 00:30:43,100 --> 00:30:46,400 ibadah free cash flow, net income, very stable and low 612 00:30:46,400 --> 00:30:48,300 debt, it's not an indebted company at all. 613 00:30:48,300 --> 00:30:50,200 In fact, they have more cash than debt currently. 614 00:30:50,500 --> 00:30:52,700 They don't currently pay a dividend, but they're growing 615 00:30:52,700 --> 00:30:55,500 their earnings per share at a pretty substantial rate. 616 00:30:55,900 --> 00:30:58,600 You don't see EPS growth like this, that often that is when 617 00:30:58,600 --> 00:31:00,700 they switched over to To the subscription model. 618 00:31:01,000 --> 00:31:03,400 And then, of course they are actually doing aggressive share 619 00:31:03,400 --> 00:31:05,900 buyback. So they have enough free cash 620 00:31:05,900 --> 00:31:08,500 flow to basically engineer their earnings for the long-term 621 00:31:08,500 --> 00:31:11,500 future and my opinion. Adobe doesn't have that many 622 00:31:11,500 --> 00:31:13,800 real competitors. I've looked at this space and 623 00:31:13,800 --> 00:31:16,000 there's some applications that compete with some parts of the 624 00:31:16,000 --> 00:31:19,400 company but no company really. Competes with all of adobe just 625 00:31:19,400 --> 00:31:23,200 doesn't exist. So I see this company as as 626 00:31:23,200 --> 00:31:27,000 outperforming, the S&P 500, the broader index, and I also see it 627 00:31:27,000 --> 00:31:29,400 as a very risk kind of off-balance. 628 00:31:29,600 --> 00:31:31,800 Like I think the company is going to be very difficult to 629 00:31:31,800 --> 00:31:35,200 disrupt, so that's another one that I'm excited to have in my 630 00:31:35,200 --> 00:31:37,900 portfolio. Now, we're moving to the next 631 00:31:37,900 --> 00:31:40,100 two. Smallest ones, which are Apple 632 00:31:40,100 --> 00:31:41,900 and Spotify. Apple. 633 00:31:42,300 --> 00:31:43,900 I have so much content on this one. 634 00:31:44,000 --> 00:31:46,800 If you want to see my bull case in apple, go watch any of the 635 00:31:46,808 --> 00:31:49,000 videos on both my channels about apples. 636 00:31:49,000 --> 00:31:51,800 So I've gone over extensively, the bull case on Apple. 637 00:31:51,800 --> 00:31:54,200 I won't go over that right now. Spotify is one. 638 00:31:54,200 --> 00:31:56,800 That is just tough. I'll be honest. 639 00:31:56,800 --> 00:31:59,300 This one's a tough one to hold. Let's go ahead and look at the 640 00:31:59,400 --> 00:32:03,600 The numbers of Spotify, the company trades at a price to 641 00:32:03,600 --> 00:32:07,200 sales of two point seven, two point seven. 642 00:32:07,200 --> 00:32:10,000 So investors don't expect much out of Spotify. 643 00:32:10,000 --> 00:32:13,500 This is a bottom of the barrel price to sales and they're 644 00:32:13,500 --> 00:32:16,200 basically saying this company will never really be profitable 645 00:32:16,200 --> 00:32:19,300 in the future, and I think that there's valid Arguments for 646 00:32:19,300 --> 00:32:20,800 that. So even though Spotify has 647 00:32:20,800 --> 00:32:24,500 continually grown its Revenue, a lot of the revenue is eaten up 648 00:32:24,500 --> 00:32:26,900 by the music labels. So, a lot of it goes to that 649 00:32:26,900 --> 00:32:30,100 they are starting to grow podcast which is Higher margin 650 00:32:30,100 --> 00:32:32,300 business. So there is some light at the 651 00:32:32,300 --> 00:32:35,400 end of the tunnel. The problem is, they're facing 652 00:32:35,400 --> 00:32:38,300 off against big Tech. They're facing off against 653 00:32:38,600 --> 00:32:41,400 YouTube and YouTube premium. With YouTube music, they're 654 00:32:41,400 --> 00:32:44,700 facing off against Amazon, and Amazon music with Audible, and 655 00:32:44,700 --> 00:32:47,400 all of their podcasts are buying and they're facing off with 656 00:32:47,400 --> 00:32:50,000 apple, with apple music, and apple podcasts. 657 00:32:50,300 --> 00:32:53,300 And the honest truth here is all those companies are so 658 00:32:53,300 --> 00:32:56,600 profitable with their other businesses that they could price 659 00:32:56,600 --> 00:32:59,600 their music service at zero, they could have them Isaac 660 00:32:59,600 --> 00:33:02,800 service perpetually be free and still be fine as a company, just 661 00:33:02,800 --> 00:33:05,700 to attract customers Spotify, can't do that. 662 00:33:05,900 --> 00:33:09,300 So I look at the potential pricing power that Spotify has. 663 00:33:09,600 --> 00:33:11,900 And I don't think that it's anywhere close to as much as 664 00:33:11,900 --> 00:33:15,200 Netflix because Netflix has a lot of unique content, you can't 665 00:33:15,200 --> 00:33:17,600 get anywhere else, like the next season, a stranger things. 666 00:33:17,900 --> 00:33:21,500 Spotify really doesn't have that much unique content at this 667 00:33:21,500 --> 00:33:23,600 point. I think that Spotify is a 668 00:33:23,600 --> 00:33:26,100 company that does potentially have a good future. 669 00:33:26,300 --> 00:33:29,900 The are generating some free cash flow but what spot Really 670 00:33:29,900 --> 00:33:33,200 needs to do is grow their creator Community, they need to 671 00:33:33,208 --> 00:33:36,100 make it, so people can discover podcast, they can discover new 672 00:33:36,100 --> 00:33:39,100 creators, and they can grow that Creator Community the same way 673 00:33:39,100 --> 00:33:41,800 that YouTube has. And unless they're able to do 674 00:33:41,800 --> 00:33:45,100 that and get tons of craters on, with tons of kind of exclusive 675 00:33:45,100 --> 00:33:48,400 content on Spotify, the same way that YouTube has done it on 676 00:33:48,400 --> 00:33:50,300 their platform. I think this company will 677 00:33:50,300 --> 00:33:52,100 continue to struggle. So that's the reason that 678 00:33:52,100 --> 00:33:54,800 Spotify is not a company that I've been continually adding to. 679 00:33:55,000 --> 00:33:59,000 I've been adding new money into Amazon and Netflix and Google. 680 00:33:59,400 --> 00:34:03,100 And Salesforce and Adobe, I have not been adding it to Spotify. 681 00:34:03,300 --> 00:34:06,300 I put my initial investment in this so far, it hasn't turned 682 00:34:06,300 --> 00:34:08,000 out. Well, I'm going to let this one 683 00:34:08,000 --> 00:34:10,199 ride and see how it goes, over the next five years and see if 684 00:34:10,199 --> 00:34:11,900 there's any real developments that I like. 685 00:34:12,199 --> 00:34:15,000 But right now, the timeline is just too long in the company, 686 00:34:15,199 --> 00:34:18,800 too far out for the prophets, I'm looking at companies that 687 00:34:18,800 --> 00:34:21,300 can generate profits and real free cash flow. 688 00:34:21,699 --> 00:34:23,699 A little bit quicker. I think a Netflix is one of 689 00:34:23,699 --> 00:34:25,400 them. Obviously, Adobe is, and 690 00:34:25,400 --> 00:34:28,900 Salesforce is with Spotify, the prophets are just way out in the 691 00:34:28,908 --> 00:34:30,800 future. And I'm a little bit impatient 692 00:34:30,800 --> 00:34:33,300 so that one, I'm not selling but I'm just holding in my 693 00:34:33,300 --> 00:34:36,000 portfolio. So that's a portfolio as of now, 694 00:34:36,000 --> 00:34:40,199 we have nine Holdings overall, the top three positions, Amazon 695 00:34:40,199 --> 00:34:43,400 Netflix and Google make up around 55 percent of the 696 00:34:43,400 --> 00:34:47,800 portfolio combined, and then the last six make up the other 45%. 697 00:34:47,800 --> 00:34:50,900 So that's the breakdown. And again, my main focus with 698 00:34:50,900 --> 00:34:53,500 every one of these companies, when I'm doing analysis, what 699 00:34:53,500 --> 00:34:56,800 I'm looking for are, which companies are going to be able 700 00:34:56,800 --> 00:35:00,200 to leverage their their platforms or Or their, their 701 00:35:00,200 --> 00:35:04,000 Marketplace, to be able to generate significant upside and 702 00:35:04,000 --> 00:35:06,700 their free cash flow. That is a major Focus that I'm 703 00:35:07,000 --> 00:35:09,200 that I'm focusing on now, especially moving into higher 704 00:35:09,200 --> 00:35:11,600 interest rate environments. I think these companies will do 705 00:35:11,600 --> 00:35:14,500 very well and the companies that I think will actually surprised 706 00:35:14,500 --> 00:35:16,600 to the upside with the amount of free cash flow. 707 00:35:16,600 --> 00:35:18,800 They'll generate I think are these ones that I have the 708 00:35:18,800 --> 00:35:22,300 biggest waiting to Amazon Netflix, Google and Microsoft. 709 00:35:22,300 --> 00:35:25,400 These companies already generate a lot of free cash flow while 710 00:35:25,400 --> 00:35:27,700 all but Netflix does. But I think that they'll 711 00:35:27,700 --> 00:35:31,400 surprise to the upside I think Netflix And Amazon will generate 712 00:35:31,400 --> 00:35:33,400 an incredible amount of free cash flow in the future. 713 00:35:33,400 --> 00:35:36,000 So that's the major focus of the portfolio. 714 00:35:36,300 --> 00:35:39,500 I think these companies are very hard to disrupt and unroot and 715 00:35:39,500 --> 00:35:42,100 compete against. I think they'll be around in ten 716 00:35:42,100 --> 00:35:45,200 years even though some of them haven't worked out. 717 00:35:45,300 --> 00:35:48,300 If a few of these bets do work out over the next four or five 718 00:35:48,300 --> 00:35:51,500 years which I expect they will. I have a very good chance of 719 00:35:51,500 --> 00:35:54,400 actually catching up to the S&P, 500 and surpassing it. 720 00:35:54,400 --> 00:35:57,500 So don't count me out yet. I still think I have a chance in 721 00:35:57,500 --> 00:35:59,600 this, and if you want to see how this turns out, Out. 722 00:35:59,600 --> 00:36:02,200 I'll be tracking this every single week week by week, so, 723 00:36:02,400 --> 00:36:04,700 just make sure you subscribed. We can look at this together. 724 00:36:04,900 --> 00:36:06,600 That's all for now. I'll see you next time.