1 00:00:00,080 --> 00:00:02,920 At the start of this year I came out with a video titled Big Tech 2 00:00:02,920 --> 00:00:04,680 is Cheap. It was published right at the 3 00:00:04,680 --> 00:00:08,600 beginning of the year, January 6, 2023, and in the video I made 4 00:00:08,600 --> 00:00:11,080 the argument of Big Tech being very cheap. 5 00:00:11,080 --> 00:00:14,400 At the moment, I think Big Tech is currently cheap and I want to 6 00:00:14,400 --> 00:00:16,160 explain why. I went through all the different 7 00:00:16,160 --> 00:00:18,640 companies fundamentals and financials and explained why I 8 00:00:18,640 --> 00:00:21,280 thought each of them individually was selling for 9 00:00:21,280 --> 00:00:23,280 cheap. We talked about Amazon, Apple, 10 00:00:23,280 --> 00:00:25,520 Microsoft. We went over Google and Meta as 11 00:00:25,520 --> 00:00:26,840 well. And after reviewing the 12 00:00:26,840 --> 00:00:29,680 fundamentals and valuation of Big Tech, here is my conclusion. 13 00:00:29,680 --> 00:00:32,600 Even by the numbers. These are pretty cheap companies 14 00:00:32,600 --> 00:00:36,200 and they still have incredibly good core businesses, incredibly 15 00:00:36,200 --> 00:00:39,600 economically powerful companies with strong market positions, 16 00:00:39,840 --> 00:00:42,440 unlikely to be disrupted. I think they have a long runway 17 00:00:42,440 --> 00:00:45,440 of growth and they're trading at valuations they haven't for 18 00:00:45,440 --> 00:00:47,520 years. So my opinion, I think they're 19 00:00:47,520 --> 00:00:48,640 cheap. Let me know you think. 20 00:00:48,680 --> 00:00:50,360 So that was it. Pretty straightforward. 21 00:00:50,360 --> 00:00:52,920 At the beginning of this year I thought these companies were 22 00:00:52,920 --> 00:00:56,360 cheap and I said so loudly, but I didn't just say so. 23 00:00:56,360 --> 00:00:58,560 I also bought into these companies heavily. 24 00:00:58,600 --> 00:01:01,800 In my passive income portfolio. I own a very large stake in 25 00:01:01,800 --> 00:01:04,480 Microsoft and Apple. Each of these companies is well 26 00:01:04,480 --> 00:01:08,880 over a 10% position, so they're far over weighted from what the 27 00:01:08,880 --> 00:01:11,160 index has. I also have a smaller, more tech 28 00:01:11,160 --> 00:01:14,440 centered portfolio where I own a lot of Google, a lot of Amazon, 29 00:01:14,640 --> 00:01:17,080 and even more Microsoft and a little bit more Apple. 30 00:01:17,280 --> 00:01:19,480 These are companies that I'm heavily invested in. 31 00:01:19,800 --> 00:01:22,640 When I'm doing research on companies, they continually pop 32 00:01:22,640 --> 00:01:24,880 up as the best companies in the world. 33 00:01:24,920 --> 00:01:27,160 So overall, I think you'd be hard pressed to find a bigger 34 00:01:27,160 --> 00:01:30,080 advocate of buying big Tech than the Joseph Carlson Show. 35 00:01:30,240 --> 00:01:33,000 I've been long Big Tech for a long period of time and I've 36 00:01:33,000 --> 00:01:35,640 continually added to these companies a long dips, 37 00:01:35,640 --> 00:01:38,600 especially when they get cheap, especially when they sell off. 38 00:01:38,600 --> 00:01:40,920 That's the time periods where I've added the most to these 39 00:01:40,920 --> 00:01:42,680 companies. But a lot has changed since I 40 00:01:42,680 --> 00:01:45,280 released that video 10 months ago saying that Big tech is 41 00:01:45,280 --> 00:01:47,040 cheap. One of the biggest things that's 42 00:01:47,040 --> 00:01:50,120 changed is the price. Let's take Apple for example, 43 00:01:50,240 --> 00:01:54,200 Apples year to date performance is a staggering 48%. 44 00:01:54,240 --> 00:01:58,080 It's gone from $129 now up to 184. 45 00:01:58,120 --> 00:02:00,760 Apple is a far more expensive company now than it was the 46 00:02:00,760 --> 00:02:02,880 beginning of the year. Now Apples performance is 47 00:02:02,880 --> 00:02:04,920 fantastic. It's market beating by a huge 48 00:02:04,920 --> 00:02:07,880 extent, but it's beat out a little bit by Google. 49 00:02:07,880 --> 00:02:11,200 This year Google beats out Apple by a few percentage points with 50 00:02:11,200 --> 00:02:15,240 a 49% return year to date. That is incredible, and as good 51 00:02:15,240 --> 00:02:18,280 as that is, it's beaten out by Microsoft's performance. 52 00:02:18,320 --> 00:02:21,760 Microsoft is up a staggering 53% year to date. 53 00:02:21,760 --> 00:02:26,160 It's gone from prices of $220 per share up to 367 now. 54 00:02:26,160 --> 00:02:29,080 Even as good as Microsoft's performances, it's beaten out by 55 00:02:29,080 --> 00:02:32,760 Amazon. Amazon is up 66% year to date. 56 00:02:32,760 --> 00:02:35,400 This company was trading at around $80.00 per share 57 00:02:35,400 --> 00:02:38,440 announced up to 142. Now of course, even outside of 58 00:02:38,440 --> 00:02:41,600 big tech, we have the new entrance to the Magnificent 7. 59 00:02:41,840 --> 00:02:44,840 In this case we have Tesla, which if you think Amazon's 60 00:02:44,840 --> 00:02:47,080 performance has been good year to date, let's check out 61 00:02:47,080 --> 00:02:50,240 Tesla's. Tesla's up 107% year to date. 62 00:02:50,280 --> 00:02:52,960 It's doubled this year and it's hard to imagine that being 63 00:02:52,960 --> 00:02:54,720 beaten by an even bigger company. 64 00:02:54,920 --> 00:02:57,360 But here we have meta with an incredible recovery. 65 00:02:57,360 --> 00:03:01,680 Meta beats out Tesla by wide margin, being up 165% year to 66 00:03:01,680 --> 00:03:02,920 date. And of course we can't forget 67 00:03:02,920 --> 00:03:06,520 about the last member of the Magnificent 7, NVIDIA, climbing 68 00:03:06,520 --> 00:03:10,120 up a staggering 241% year to date. 69 00:03:10,240 --> 00:03:12,960 NVIDIA now both say market cap bigger than Metas. 70 00:03:12,960 --> 00:03:15,280 It is a $1 trillion plus company. 71 00:03:15,480 --> 00:03:19,320 The reason that the S&P 500 is up 13 percent is simply because 72 00:03:19,320 --> 00:03:21,440 of these companies. But with the incredible 73 00:03:21,440 --> 00:03:24,400 performance they've had with their price increasing, that 74 00:03:24,400 --> 00:03:27,320 does have implications on their valuation. 75 00:03:27,360 --> 00:03:29,920 So I think it's time that we go back to this original question. 76 00:03:30,080 --> 00:03:33,640 Yes, big Tech was cheap ten months ago, but is it still 77 00:03:33,640 --> 00:03:35,240 cheap today? That's what we're going to be 78 00:03:35,240 --> 00:03:37,920 discussing in this episode. Now of course, as always, we 79 00:03:37,920 --> 00:03:39,600 have some other news we'll be covering as well. 80 00:03:39,680 --> 00:03:43,320 This new demo by a company called Humane that made an AI 81 00:03:43,320 --> 00:03:44,960 clip. We'll be looking at this Airy 82 00:03:44,960 --> 00:03:46,760 demo. We also have Moody's down 83 00:03:46,760 --> 00:03:49,280 grading EU s s credit to negative and we have the new 84 00:03:49,280 --> 00:03:52,280 Disney movie, the Marvels struggling at the box office. 85 00:03:52,480 --> 00:03:55,080 What does this mean for the Marvel Universe and for Disney's 86 00:03:55,080 --> 00:03:56,840 content? We'll be discussing that as 87 00:03:56,840 --> 00:03:58,800 well, so we have a lot to get to in this episode. 88 00:03:58,800 --> 00:04:00,000 Let's go ahead and jump right in. 89 00:04:00,080 --> 00:04:04,040 Just today, Dan Ives went on to CNBC and yet again reaffirmed 90 00:04:04,040 --> 00:04:06,760 his opinion that big tech is still cheap. 91 00:04:06,760 --> 00:04:09,680 Now it's the first, second derivative and we believe the 92 00:04:09,680 --> 00:04:13,760 3rd and 4th are going to hit in 2024, which is what in my 93 00:04:13,760 --> 00:04:15,960 opinion, the new tech bull market. 94 00:04:16,279 --> 00:04:18,240 Has begun. Not only are they cheap right 95 00:04:18,240 --> 00:04:21,480 now, but all of this AI stuff being intermingled into big tech 96 00:04:21,560 --> 00:04:24,640 means that these companies are set for a brand new bull market. 97 00:04:24,840 --> 00:04:26,760 They're going to have another big run. 98 00:04:26,760 --> 00:04:29,400 Dan argues that because these companies have such massive 99 00:04:29,400 --> 00:04:32,720 install bases of commercial clients, AI is going to help 100 00:04:32,720 --> 00:04:35,160 them further their profits in the coming years from AN. 101 00:04:35,160 --> 00:04:38,320 Install based perspective. You look at Adobe, you look at 102 00:04:38,320 --> 00:04:40,320 names like Oracle, you could Salesforce. 103 00:04:40,600 --> 00:04:43,560 And of course, right now at the top of the mountain is, of 104 00:04:43,560 --> 00:04:46,080 course Microsoft. So you look at what AWS are 105 00:04:46,280 --> 00:04:48,840 doing, that's a huge monetization opportunity for 106 00:04:48,840 --> 00:04:50,640 them. And I believe right now that's 107 00:04:50,640 --> 00:04:53,920 the golden goose, that's what this is going after and we think 108 00:04:53,920 --> 00:04:56,880 it's a trillion dollars of spend over the next decade. 109 00:04:56,880 --> 00:04:58,280 It's going to hit the shores attack. 110 00:04:58,360 --> 00:05:00,440 Now, I don't necessarily disagree with Dan Ives. 111 00:05:00,440 --> 00:05:02,600 I don't think he's crazy with these assumptions. 112 00:05:02,840 --> 00:05:05,600 It is true that a lot of money is going to be spent on AI, and 113 00:05:05,600 --> 00:05:08,760 it's probably true that these companies will eat up the lion's 114 00:05:08,760 --> 00:05:11,520 share of that spend. They do have massive install 115 00:05:11,520 --> 00:05:15,120 bases and we've seen over and over again how quickly big tech 116 00:05:15,120 --> 00:05:18,000 can grow their profits. And ultimately, Dan Ives 117 00:05:18,000 --> 00:05:21,680 believes that the valuation is not as concerning because he 118 00:05:21,680 --> 00:05:24,600 believes a lot of people on the sidelines of the stock market, a 119 00:05:24,600 --> 00:05:27,560 lot of the bears that have been in hibernation are going to want 120 00:05:27,560 --> 00:05:29,800 to jump back in. And I think right now a lot of 121 00:05:29,800 --> 00:05:32,880 bears, they're coming out of hibernation mode and I believe 122 00:05:32,880 --> 00:05:35,760 they go back in, in terms of what I view is just a tech. 123 00:05:36,240 --> 00:05:39,920 That ultimately could be up 8 to 10% more going into year end. 124 00:05:39,920 --> 00:05:42,640 And he finally asserts that the continued momentum in Big Tech 125 00:05:42,640 --> 00:05:46,640 will bring it up another 8 to 10% this year, even before we 126 00:05:46,640 --> 00:05:49,200 get into 2024. So Dan Ives as well as many 127 00:05:49,200 --> 00:05:52,240 other investors are now very excited about Big Tech, 128 00:05:52,240 --> 00:05:54,280 especially after this massive rally. 129 00:05:54,520 --> 00:05:57,400 Seeing the stock price go up that fast draws a lot of 130 00:05:57,400 --> 00:06:01,240 attention and inevitably draws a lot of FOMO. 131 00:06:01,320 --> 00:06:04,480 That's why you get the momentum that you do in stocks, people 132 00:06:04,480 --> 00:06:07,160 wanting to be part of the gains. If we take a minute and look at 133 00:06:07,160 --> 00:06:09,800 the valuation of big tech and what's happened over the past 134 00:06:09,800 --> 00:06:12,560 ten months, it paints a pretty alarming picture. 135 00:06:12,600 --> 00:06:14,120 Let's take a look at Apples valuation. 136 00:06:14,200 --> 00:06:20,880 The PE ratio has gone from a PE of 22 to a Ford PE of 28.6 from 137 00:06:20,880 --> 00:06:24,240 a 22 to a 28 is an expansion in multiple. 138 00:06:24,280 --> 00:06:27,040 Likewise the free cash flow yield of the company netted out 139 00:06:27,040 --> 00:06:31,760 with stock based comp is 3.08%. Now that's OK, but just a year 140 00:06:31,760 --> 00:06:34,840 ago it was 4.5. On a free cash flow basis you're 141 00:06:34,840 --> 00:06:37,600 also getting much less than what you paid for a year ago. 142 00:06:37,600 --> 00:06:40,840 Apple is undoubtedly far more expensive of a company this year 143 00:06:40,840 --> 00:06:43,280 than it was last year. With Microsoft we can see the 144 00:06:43,280 --> 00:06:45,080 same. At the start of the year, the PE 145 00:06:45,080 --> 00:06:47,720 ratio was in the low 20s. Now it's 27. 146 00:06:47,920 --> 00:06:50,760 The free cash flow yield adjusted for stock based comp is 147 00:06:50,760 --> 00:06:54,360 1.95. It's now under 2%. 148 00:06:54,360 --> 00:06:58,120 Microsoft is getting a heavy premium for being the AI king. 149 00:06:58,440 --> 00:07:01,520 A lot of what Dan Ives is talking about when referring to 150 00:07:01,520 --> 00:07:05,040 in the future. All of this AI spend is already 151 00:07:05,040 --> 00:07:08,200 largely baked into this price. Google's one of the big tech 152 00:07:08,200 --> 00:07:11,440 companies is often looked at as still sort of cheap. 153 00:07:11,760 --> 00:07:15,680 On APE ratio it only trades at an 18 which granted it is far 154 00:07:15,680 --> 00:07:18,920 less expensive than Apple and Microsoft so this one doesn't 155 00:07:18,920 --> 00:07:21,040 look quite as bad. But when you look at the free 156 00:07:21,040 --> 00:07:24,200 cash flow factoring out all the stock based comp, you get a free 157 00:07:24,200 --> 00:07:28,720 cash flow yield of 3.31%. This is still not that cheap 158 00:07:28,720 --> 00:07:31,680 even for Google. On a free cash flow basis Google 159 00:07:31,680 --> 00:07:33,520 trades around the same price as Apple. 160 00:07:33,520 --> 00:07:36,480 Met is another company that does a substantial amount of stock 161 00:07:36,480 --> 00:07:39,240 based comp dilution. We look at the trailing PE and 162 00:07:39,240 --> 00:07:43,160 it's out of 29. On a Ford PE, it's out of 15, so 163 00:07:43,160 --> 00:07:46,040 it appears mostly cheap on a Ford PE basis. 164 00:07:46,320 --> 00:07:48,960 But again, when we look at the free cash flow yield, at least 165 00:07:48,960 --> 00:07:51,680 on a trailing basis, it's below 3%. 166 00:07:51,680 --> 00:07:53,960 Meta itself is getting more expensive by the day. 167 00:07:53,960 --> 00:07:56,840 Amazon has been consistently one of the most difficult companies 168 00:07:56,840 --> 00:07:58,560 to value. That is because they usually 169 00:07:58,560 --> 00:08:01,560 suppress their earnings power by reinvesting all of their cash 170 00:08:01,560 --> 00:08:04,720 flow in the future properties. Amazon's free cash flow has been 171 00:08:04,720 --> 00:08:08,080 negative over the past year as the company's done substantial 172 00:08:08,080 --> 00:08:10,520 CapEx investments. So the valuation of this one 173 00:08:10,520 --> 00:08:12,640 depends heavily on next year's cash flow. 174 00:08:12,680 --> 00:08:15,720 Now terms of companies reliant on future growth, it only gets 175 00:08:15,720 --> 00:08:17,960 more aggressive. Tesla is currently pricing in a 176 00:08:17,960 --> 00:08:20,480 substantial amount of free cash flow growth in the future. 177 00:08:20,600 --> 00:08:24,040 Tesla is being priced at a 29 four E ratio with a free cash 178 00:08:24,040 --> 00:08:28,640 flow yield of only two 8%, meaning that right now the 179 00:08:28,640 --> 00:08:32,080 company is heavily reliant on growing free cash flow in the 180 00:08:32,080 --> 00:08:33,840 future. And the company with the most 181 00:08:33,840 --> 00:08:38,480 aggressive assumptions of all is NVIDIA priced at a 39 Ford PE 182 00:08:38,480 --> 00:08:42,039 and a free cash flow yield adjusted for stock based comp of 183 00:08:42,080 --> 00:08:45,520 only .6%. NVIDIA bulls are assuming very 184 00:08:45,520 --> 00:08:48,600 fast free cash flow growth and earnings growth and if NVIDIA 185 00:08:48,600 --> 00:08:50,960 does not accomplish that, this company is dramatically 186 00:08:50,960 --> 00:08:52,760 overvalued. Now look, when I review these 187 00:08:52,760 --> 00:08:55,160 companies, I still come to the conclusion that there's some of 188 00:08:55,160 --> 00:08:58,640 the best companies in the world. They are true compounders. 189 00:08:58,880 --> 00:09:01,840 They are growing their earnings and free cash flow overtime. 190 00:09:01,840 --> 00:09:04,560 So I still believe the quality of these companies is superb. 191 00:09:04,560 --> 00:09:07,400 It's the best in their class. But then we get to the question 192 00:09:07,400 --> 00:09:10,520 evaluation. I can't say with exact precision 193 00:09:10,680 --> 00:09:13,680 what every single one of these companies is worth, but I can 194 00:09:13,680 --> 00:09:16,440 say with a high degree of confidence that the price of 195 00:09:16,440 --> 00:09:20,600 these companies this year has raced up far faster than their 196 00:09:20,600 --> 00:09:24,160 intrinsic value and that should cause long term investors to be 197 00:09:24,160 --> 00:09:26,240 cautious. Now, being cautious may mean 198 00:09:26,240 --> 00:09:27,680 different things to different people. 199 00:09:27,880 --> 00:09:30,880 When I speak of being cautious, that doesn't mean to race out 200 00:09:30,880 --> 00:09:33,320 and sell all of your big tech holdings. 201 00:09:33,520 --> 00:09:35,280 That's certainly not what I'm doing. 202 00:09:35,520 --> 00:09:38,760 I could lock in a lot of gains and sell out of these positions, 203 00:09:39,160 --> 00:09:41,240 but that also puts you in a difficult position. 204 00:09:41,600 --> 00:09:44,320 When you sell out a big tech, you're basically betting against 205 00:09:44,320 --> 00:09:47,480 the S&P 500. You're excluding yourself from a 206 00:09:47,480 --> 00:09:50,760 massive portion of the overall earnings in the economy. 207 00:09:51,000 --> 00:09:54,280 So much happens within Apple and Microsoft and Meta. 208 00:09:54,520 --> 00:09:57,000 There's so much commerce going on with those companies. 209 00:09:57,320 --> 00:10:01,200 Having no exposure to them whatsoever puts you in a dicey 210 00:10:01,200 --> 00:10:04,400 territory where eventually you may want to get back in. 211 00:10:05,000 --> 00:10:09,440 When I'm cautious, rather than selling out, I simply hold back 212 00:10:09,440 --> 00:10:12,120 on my buys. I wait for better opportunities 213 00:10:12,120 --> 00:10:15,200 to grow my position. So right now, for all of these 214 00:10:15,200 --> 00:10:18,880 companies, for Amazon, for Microsoft, for Apple, for meta, 215 00:10:19,040 --> 00:10:23,320 for NVIDIA, for Tesla, I consider these companies a hold. 216 00:10:23,480 --> 00:10:27,000 I consider some of them at the verge of being overvalued, and 217 00:10:27,000 --> 00:10:30,760 if they do push up in value further, I may trim my positions 218 00:10:30,760 --> 00:10:33,400 to some extent. For example, Microsoft is up to 219 00:10:33,440 --> 00:10:37,200 $367 right now. It's trading at a higher PE 220 00:10:37,200 --> 00:10:40,760 ratio, a higher multiple. If the company raced up even 221 00:10:40,760 --> 00:10:45,040 further above $400.00 this year, I would look to trim my 222 00:10:45,040 --> 00:10:47,040 position. I would still invest in the 223 00:10:47,040 --> 00:10:48,760 company. I would still be bullish on its 224 00:10:48,760 --> 00:10:51,200 fundamentals growing over time. But I feel that this is the 225 00:10:51,200 --> 00:10:54,040 natural course of investing. Momentum is the most powerful 226 00:10:54,040 --> 00:10:55,480 force in the market for a reason. 227 00:10:55,640 --> 00:10:59,200 When investors see companies like Apple or Microsoft making 228 00:10:59,200 --> 00:11:03,480 50 and 60% gains in a single year, they want to be a part of 229 00:11:03,480 --> 00:11:05,440 it. They don't want to miss out, so 230 00:11:05,440 --> 00:11:09,120 they buy into the company, pushing up the price ever and 231 00:11:09,120 --> 00:11:12,160 ever higher, and eventually this can lead to stock prices being 232 00:11:12,160 --> 00:11:14,200 substantially above their intrinsic value. 233 00:11:14,200 --> 00:11:16,880 Stanley Druckenmiller has addressed this very specific 234 00:11:16,880 --> 00:11:19,280 phenomenon before. He says, I'm not going to lie to 235 00:11:19,280 --> 00:11:23,480 you, my first boss had a saying the higher they go, the cheaper 236 00:11:23,480 --> 00:11:25,360 they look. There's something weird and I 237 00:11:25,360 --> 00:11:27,720 know everyone watching this has this experience. 238 00:11:27,960 --> 00:11:31,640 It doesn't make any sense, but when a security goes up, every 239 00:11:31,640 --> 00:11:34,360 bone in your body wants to buy more of it. 240 00:11:34,440 --> 00:11:37,320 And when it goes down, you're fighting and making yourself not 241 00:11:37,320 --> 00:11:39,320 sell it. It's just the nature of the 242 00:11:39,320 --> 00:11:41,160 beast. You can call it the nature of 243 00:11:41,160 --> 00:11:43,200 the beast or the psychology of investing. 244 00:11:43,440 --> 00:11:45,480 The higher they go, the cheaper they look. 245 00:11:45,600 --> 00:11:48,360 If we're disciplined investors, we can't get wrapped up in 246 00:11:48,360 --> 00:11:50,640 momentum. As for me, I'm proceeding with 247 00:11:50,640 --> 00:11:53,480 caution right now. I'm not adding anymore to my big 248 00:11:53,480 --> 00:11:56,480 tech companies and I won't add more until the valuation comes 249 00:11:56,480 --> 00:11:58,680 down. Now moving on, I have to respond 250 00:11:58,680 --> 00:12:02,200 to this new demo of this AI clip product. 251 00:12:02,200 --> 00:12:04,000 This is interesting for a couple different reasons. 252 00:12:04,000 --> 00:12:06,600 First of all, the product itself is very interesting and I 253 00:12:06,600 --> 00:12:09,480 actually think pretty cool. But this is also interesting 254 00:12:09,480 --> 00:12:12,680 because of their demonstration. The demo video here is just a 255 00:12:12,680 --> 00:12:16,560 bit different. This is the Humane AI pin. 256 00:12:17,040 --> 00:12:20,880 It's a stand alone device and software platform built from the 257 00:12:20,880 --> 00:12:24,600 ground up for AI. This demo video's 10 minutes 258 00:12:24,600 --> 00:12:27,200 long and he talks like that the entire time. 259 00:12:27,600 --> 00:12:30,200 There's no fluctuation, there's no voice variance. 260 00:12:30,520 --> 00:12:34,320 It's just this low, monotone, almost ASMR voice. 261 00:12:34,320 --> 00:12:36,880 And then I have to point out that it does have some Apple 262 00:12:36,880 --> 00:12:38,720 vibes. Feels a little bit like they're 263 00:12:38,720 --> 00:12:42,360 mimicking early Steve Jobs. It comes in three colour ways. 264 00:12:42,840 --> 00:12:48,400 Got Eclipse, Lunar and Equinox. This is what I love seeing in 265 00:12:48,400 --> 00:12:50,440 these demos. It comes in three colour ways, 266 00:12:50,440 --> 00:12:53,520 Eclipse, Lunar and Equinox. You could just say the product 267 00:12:53,520 --> 00:12:55,240 comes in black, white and Gray now. 268 00:12:55,280 --> 00:12:59,600 The battery booster powers a smaller battery inside the main 269 00:12:59,600 --> 00:13:03,360 computer and this is how we achieve our all day battery 270 00:13:03,360 --> 00:13:05,280 life. So if you ever exhaust the 271 00:13:05,280 --> 00:13:08,080 booster, you just reach into your pocket or bag and hot swap 272 00:13:08,080 --> 00:13:10,560 it. This is a perpetual power system 273 00:13:10,640 --> 00:13:13,160 that allows you to use your AI pin for as long as you want. 274 00:13:13,320 --> 00:13:15,920 They really seem to be copying the Apple playbook here instead 275 00:13:15,920 --> 00:13:18,440 of just saying you can carry around an extra battery. 276 00:13:18,680 --> 00:13:20,720 It's called a perpetual power system. 277 00:13:20,720 --> 00:13:23,760 Doesn't that sound much better? And your engagement comes 278 00:13:23,760 --> 00:13:27,800 through your voice, touch gesture or the laser ink 279 00:13:27,800 --> 00:13:29,560 display. So you can talk to this thing, 280 00:13:29,560 --> 00:13:31,280 or you can have it project onto your hand. 281 00:13:31,960 --> 00:13:39,360 OK. Got my clock, whether the date. 282 00:13:40,640 --> 00:13:45,920 If I tilt my hand up got nearby, it tells me everything that 283 00:13:45,920 --> 00:13:48,840 might be around me and where I am at the same time. 284 00:13:49,520 --> 00:13:52,200 It seems pretty cool. It has a little projection thing 285 00:13:52,200 --> 00:13:54,720 that goes on your hand and that's like a control system for 286 00:13:54,720 --> 00:13:56,320 it. Or you can just tap the device 287 00:13:56,320 --> 00:13:58,280 itself and ask it a question directly. 288 00:13:58,280 --> 00:14:01,640 Ultimately what this presentation is is ChatGPT 289 00:14:01,640 --> 00:14:04,680 connected to your chest. That's basically what the device 290 00:14:04,680 --> 00:14:06,440 is. In fact, the system itself costs 291 00:14:06,440 --> 00:14:09,160 $700.00, and then it's an additional subscription for 292 00:14:09,160 --> 00:14:11,920 $24.00 per month. I believe the reason you have to 293 00:14:11,920 --> 00:14:14,200 pay for that additional subscription is because you're 294 00:14:14,200 --> 00:14:17,280 paying for that ChatGPT, or whatever model they're using. 295 00:14:17,360 --> 00:14:19,960 Overall, I honestly thought this was kind of cool, and I like 296 00:14:19,960 --> 00:14:22,240 seeing companies come out with new devices like this. 297 00:14:22,520 --> 00:14:25,240 I think the biggest problem I have with potentially using a 298 00:14:25,240 --> 00:14:29,360 device like this is I almost never like talking to my phone. 299 00:14:29,760 --> 00:14:32,440 I don't like speaking into it because I noticed that a lot of 300 00:14:32,440 --> 00:14:36,080 times I'm around other people. If I want to check something 301 00:14:36,080 --> 00:14:39,320 real quick, I don't want to be tapping on my chest and speaking 302 00:14:39,320 --> 00:14:42,480 into a device while I have friends around or other people 303 00:14:42,480 --> 00:14:44,840 around. It just seems a little odd. 304 00:14:44,840 --> 00:14:47,840 So I prefer having a display rather than having it primarily 305 00:14:47,840 --> 00:14:50,240 through audio or through a hand projection. 306 00:14:50,440 --> 00:14:52,360 But I think this gives you a glimpse of what the future is 307 00:14:52,360 --> 00:14:53,880 going to look like. There's going to be a lot of 308 00:14:53,880 --> 00:14:55,640 interesting devices released soon. 309 00:14:55,800 --> 00:14:58,520 Now moving on, we have the big news that came out Friday after 310 00:14:58,520 --> 00:15:01,560 market close. the United States credit rating outlook was 311 00:15:01,560 --> 00:15:05,240 changed to negative by Moodys. Overall, there's three main 312 00:15:05,240 --> 00:15:08,680 credit rating agencies. The two big ones are S&P Global 313 00:15:08,680 --> 00:15:10,920 and Moodys. And then there's the 3rd place 314 00:15:10,920 --> 00:15:14,360 one, which is Fitch. Both S&P Global and Fitch have 315 00:15:14,360 --> 00:15:17,440 already removed the United States from the highest credit 316 00:15:17,440 --> 00:15:20,240 rating possible. Now we have Moodys threatening 317 00:15:20,240 --> 00:15:22,280 to do the same thing with this downgrade. 318 00:15:22,720 --> 00:15:24,960 Moody's Investor Service signaled it was inclined to 319 00:15:24,960 --> 00:15:28,160 downgrade the nation because of wider budget deficits and 320 00:15:28,160 --> 00:15:30,800 political polarization. So Moody's hasn't officially 321 00:15:30,800 --> 00:15:33,480 downgraded the US, but it's putting the US on notice. 322 00:15:33,720 --> 00:15:37,040 Then, unless these things improve, unless budget deficits 323 00:15:37,040 --> 00:15:39,800 improve and political polarization improves, it's 324 00:15:39,800 --> 00:15:41,560 going to be downgraded eventually. 325 00:15:42,080 --> 00:15:45,080 And let me first say that I agree with this move from 326 00:15:45,080 --> 00:15:48,280 Moody's and I agreed with it from SMB Global, I agreed with 327 00:15:48,280 --> 00:15:50,600 it with Fitch. I think it's necessary that the 328 00:15:50,600 --> 00:15:53,360 United States gets treated like any other institution. 329 00:15:53,640 --> 00:15:56,640 As the United States grows in its amount of debt, it becomes 330 00:15:56,640 --> 00:15:59,120 less credible. This chart clearly illustrates 331 00:15:59,120 --> 00:16:01,200 the problem. The orange line is the 332 00:16:01,200 --> 00:16:03,880 cumulative debt growth. So that's the debt going up over 333 00:16:03,880 --> 00:16:06,040 time. And the blue line is the 334 00:16:06,040 --> 00:16:10,280 cumulative real GDP growth. Now, debt growing overtime is 335 00:16:10,280 --> 00:16:13,120 not an issue if your income grows as well. 336 00:16:13,160 --> 00:16:16,280 In fact, if your income growth outpaces the debt growth, that's 337 00:16:16,280 --> 00:16:20,480 not a problem at all. Ever since around 2009, the GDP 338 00:16:20,480 --> 00:16:23,920 growth has far trailed the debt growth, and every single year 339 00:16:23,920 --> 00:16:26,200 the debt and the deficit are accelerating. 340 00:16:26,200 --> 00:16:28,840 Here's an even more specific breakdown of the trailing year. 341 00:16:29,120 --> 00:16:33,240 The underlying US budget gap doubled in the past year alone. 342 00:16:33,320 --> 00:16:36,120 Expenses are increasing at an incredible rate, and same with 343 00:16:36,120 --> 00:16:38,120 the deficit. To complicate this problem, 344 00:16:38,120 --> 00:16:39,800 nobody in charge wants to address it. 345 00:16:39,960 --> 00:16:43,000 Biden officials rejected Moody's shift to negative outlook 346 00:16:43,240 --> 00:16:45,080 pointed to Republican dysfunction. 347 00:16:45,400 --> 00:16:47,960 So rather than coming up with specific solutions, they're 348 00:16:47,960 --> 00:16:49,800 pointing the finger to the other side. 349 00:16:49,920 --> 00:16:52,480 At the same time, the current batch of Republican candidates 350 00:16:52,480 --> 00:16:54,320 seemingly never talk about the debt. 351 00:16:54,680 --> 00:16:56,440 They don't act as though it's a pressing issue. 352 00:16:56,440 --> 00:16:59,520 So my hope is with all of this that the downgrade from Fitch 353 00:16:59,520 --> 00:17:03,000 and SP Global and Moody's moving this to negative will put 354 00:17:03,000 --> 00:17:05,440 further emphasis on it. I think it's good to have 355 00:17:05,440 --> 00:17:08,720 greater focus and pressure on this issue, and hopefully that's 356 00:17:08,720 --> 00:17:11,079 what it accomplishes. Now finally, we have some good 357 00:17:11,079 --> 00:17:13,200 news and bad news. The bad news is if you're a 358 00:17:13,200 --> 00:17:16,000 Disney investor, the new Marvel's movie did not perform 359 00:17:16,000 --> 00:17:17,599 well. It was the worst performing 360 00:17:17,599 --> 00:17:21,400 opening weekend of a Marvel movie ever with only $47 361 00:17:21,400 --> 00:17:23,599 million. If we put that in context with 362 00:17:23,640 --> 00:17:25,880 the other lowest gross Marvel movies, we can see the 363 00:17:25,880 --> 00:17:28,440 scoreboard right there. We have the marvels at 47 364 00:17:28,440 --> 00:17:31,960 million above The Incredible Hulk, Ant Man, Captain America, 365 00:17:31,960 --> 00:17:34,880 Thor and the Eternals. Now, film analyst said. 366 00:17:34,880 --> 00:17:39,000 The initial prediction saw the film opening at between 75 367 00:17:39,000 --> 00:17:41,720 million and 80 million domestically, but those figures 368 00:17:41,720 --> 00:17:44,560 have shrunk to a range between 60 and 65,000,000. 369 00:17:44,800 --> 00:17:47,200 Ahead of Friday's opening, this movie is going to make a lot 370 00:17:47,200 --> 00:17:49,800 less than previously expected. Now, I said that this is both 371 00:17:49,800 --> 00:17:51,840 bad news and good news. This is bad news. 372 00:17:51,840 --> 00:17:54,360 If you're invested in Disney and you want every single film to 373 00:17:54,360 --> 00:17:56,480 perform well for you. That might be a little bit of 374 00:17:56,480 --> 00:17:59,840 negative news. But I think overall that this is 375 00:17:59,840 --> 00:18:03,480 good news. It may force Disney to focus on 376 00:18:03,480 --> 00:18:07,040 something other than superhero movies from the Marvel Universe, 377 00:18:07,440 --> 00:18:10,440 and it may finally waken them up to the fact that people are 378 00:18:10,440 --> 00:18:13,240 getting a little bit Marvel fatigue. 379 00:18:13,640 --> 00:18:17,000 This is something that's been happening year after year after 380 00:18:17,000 --> 00:18:20,120 year, and Disney does not seem to get the message. 381 00:18:20,480 --> 00:18:23,560 They're coming out with dozens of more Marvel movies, more 382 00:18:23,560 --> 00:18:26,640 superhero movies, more movies where people have flashy hands, 383 00:18:26,640 --> 00:18:29,400 can fly across the screen, can throw each other through 384 00:18:29,400 --> 00:18:32,160 buildings and brick walls with zero consequences. 385 00:18:32,200 --> 00:18:35,040 And for a lot of people that I think were at one point, Marvel 386 00:18:35,040 --> 00:18:38,040 fans, I think right now they're just getting fatigued. 387 00:18:38,160 --> 00:18:40,800 They're over it. This movie has a 6.1 rating on 388 00:18:40,800 --> 00:18:43,280 IMDb. That's pretty low for a Disney 389 00:18:43,280 --> 00:18:44,960 movie. People are tired of seeing the 390 00:18:44,960 --> 00:18:47,920 same CGI story over and over and over again. 391 00:18:47,960 --> 00:18:51,360 They want original storytelling. So I think the glass half full 392 00:18:51,360 --> 00:18:54,840 here is that maybe, just maybe, if they continue to have low 393 00:18:54,840 --> 00:18:57,960 performance of churning out the same Marvel movies, they'll 394 00:18:57,960 --> 00:19:00,760 change plans and at least make them more unique, more 395 00:19:00,760 --> 00:19:02,640 rememberable with original stories. 396 00:19:02,920 --> 00:19:05,080 That's all for this episode. See you in the next one.