1 00:00:34,000 --> 00:00:37,200 It's finally here. The highly anticipated, Apple 2 00:00:37,200 --> 00:00:40,000 augmented reality, headset has arrived. 3 00:00:40,000 --> 00:00:42,300 And in this episode, I'm going to be going over this headset 4 00:00:42,300 --> 00:00:45,100 giving you my impressions of it as well, as many of the other 5 00:00:45,100 --> 00:00:47,100 Apple announcements and other news as well. 6 00:00:47,100 --> 00:00:48,900 So as always we have a lot to get into. 7 00:00:48,900 --> 00:00:52,800 Now, they're calling this new device, this new AR headset, The 8 00:00:52,800 --> 00:00:56,500 Vision Pro, that is the name. It was rumored to be the Apple 9 00:00:56,500 --> 00:01:00,200 glasses or apple glass. It's the Vision Pro and this is 10 00:01:00,200 --> 00:01:03,000 highly anticipated, something that we knew Apple has been 11 00:01:03,000 --> 00:01:05,700 working on for years. And they finally got around to 12 00:01:05,708 --> 00:01:07,500 releasing it. No more delays. 13 00:01:07,500 --> 00:01:11,000 It is hair before I go into all the features and what I think of 14 00:01:11,000 --> 00:01:14,100 the look and design and functionality and price point, 15 00:01:14,100 --> 00:01:15,800 and what this means for apples future. 16 00:01:15,800 --> 00:01:18,400 In fact, before looking at any of that, I want to go back and 17 00:01:18,400 --> 00:01:21,900 revisit what's important to pay attention to as investors. 18 00:01:21,900 --> 00:01:25,100 I'm not just an apple consumer. I don't just use their products, 19 00:01:25,100 --> 00:01:27,800 but I invest in the company and that's primarily the way I'm 20 00:01:27,800 --> 00:01:30,400 going to be judging these products with every investment I 21 00:01:30,400 --> 00:01:33,500 have including Apple. There are long-term investments 22 00:01:33,500 --> 00:01:34,600 in companies. Annie's that I think are 23 00:01:34,607 --> 00:01:37,600 incredibly high-quality Apple. Being one of these that I've 24 00:01:37,600 --> 00:01:40,700 owned for over five years, the gains in this company have been 25 00:01:40,700 --> 00:01:43,400 significant. I'm up twenty two thousand nine 26 00:01:43,400 --> 00:01:46,300 hundred dollars. Currently I've been extremely 27 00:01:46,300 --> 00:01:48,700 bullish on Apple investing in the company. 28 00:01:48,700 --> 00:01:51,400 When other people said that it was too expensive, or it was 29 00:01:51,400 --> 00:01:55,500 slow growing because I looked at one key characteristic that I 30 00:01:55,500 --> 00:01:59,800 knew was incredibly strong in this company and that is the 31 00:01:59,800 --> 00:02:02,600 moat. The mo of the company is the 32 00:02:02,600 --> 00:02:05,900 most significant. Deterministic aspect of any 33 00:02:05,900 --> 00:02:09,500 investment and with apple. I have remained in the camp 34 00:02:09,500 --> 00:02:14,900 where I believe apples moat is incredibly wide incredibly wide 35 00:02:15,100 --> 00:02:18,100 and not only is it wide but it's always going in the right 36 00:02:18,100 --> 00:02:20,900 direction. The mo is growing over time. 37 00:02:21,100 --> 00:02:23,600 I've said apples moat was as wide as the ocean. 38 00:02:23,900 --> 00:02:26,700 I would say it was as wide as the Atlantic Ocean. 39 00:02:26,900 --> 00:02:29,400 Now it's becoming as wide as the Pacific Ocean. 40 00:02:29,500 --> 00:02:32,500 The mo is already massive, but many new features that Apple 41 00:02:32,500 --> 00:02:35,300 implements many new iterative Developments, that they do 42 00:02:35,400 --> 00:02:38,100 further the size of their already, massive mode, and I 43 00:02:38,100 --> 00:02:40,600 believe they've done that. Again, this year with this 44 00:02:40,600 --> 00:02:44,500 developer conference, I see the mote ever-expanding for Apple 45 00:02:44,600 --> 00:02:47,100 once again. I don't see any weaknesses here. 46 00:02:47,200 --> 00:02:49,800 I don't see the mote shrinking between them and competitors. 47 00:02:50,100 --> 00:02:54,200 I see them taking a bigger step into solidifying and growing 48 00:02:54,200 --> 00:02:56,600 their ecosystem. So as we're looking at this 49 00:02:56,600 --> 00:02:59,300 apple presentation, keep in mind, the moat and the 50 00:02:59,300 --> 00:03:01,200 direction. This is going now, having said 51 00:03:01,200 --> 00:03:03,800 that, let's take a look at the Apple Vision Pro headset. 52 00:03:04,000 --> 00:03:06,800 We have it right here. It has a lanyard that goes to a 53 00:03:06,808 --> 00:03:09,800 battery pack that you can put in your pocket and then it looks 54 00:03:09,800 --> 00:03:13,100 like a whitehead set. A lot of people have compared it 55 00:03:13,100 --> 00:03:15,900 to ski goggles or scuba diving goggles. 56 00:03:16,100 --> 00:03:20,000 It looks like a VR headset. My impression of it is I don't 57 00:03:20,000 --> 00:03:22,300 think there's any way to make these type of headsets look 58 00:03:22,300 --> 00:03:24,700 super cool. So I don't think it looks 59 00:03:24,700 --> 00:03:28,100 particularly cool but I also don't think it looks bad for 60 00:03:28,100 --> 00:03:30,500 what it is which is a, a our headset. 61 00:03:30,500 --> 00:03:32,400 In fact, out of the different designs. 62 00:03:32,400 --> 00:03:33,900 I don't think this one looks particularly. 63 00:03:33,900 --> 00:03:35,800 Really bad at all. It looks like a pretty 64 00:03:35,900 --> 00:03:39,300 straightforward a our headset so you can criticize the design for 65 00:03:39,300 --> 00:03:41,700 what it is, but it is a simple headset. 66 00:03:41,700 --> 00:03:44,400 It does look like a pair of ski goggles, but this follows the 67 00:03:44,400 --> 00:03:46,500 trend of every single Apple product. 68 00:03:46,500 --> 00:03:49,500 They're typically not that much different than the competition. 69 00:03:49,500 --> 00:03:53,000 It looks somewhat similar to the Oculus but it's all the little 70 00:03:53,000 --> 00:03:56,300 differences that really add up to make an Apple product better. 71 00:03:56,300 --> 00:03:59,200 For example, this one makes it so you can actually look through 72 00:03:59,200 --> 00:04:02,300 the headset. It can become transparent which 73 00:04:02,300 --> 00:04:04,600 is something notably different than the Oculus. 74 00:04:04,600 --> 00:04:06,100 You can't really look through that. 75 00:04:06,200 --> 00:04:09,400 If you're wearing an Oculus, you have it on and you can only rely 76 00:04:09,400 --> 00:04:12,100 on cameras outside to see in front of you where as the Apple 77 00:04:12,100 --> 00:04:15,000 headset, has this weird opaqueness that goes to 78 00:04:15,000 --> 00:04:17,399 transparency. When someone enters the room 79 00:04:17,600 --> 00:04:20,399 that something pretty unique. I haven't seen this anywhere 80 00:04:20,399 --> 00:04:21,700 else. Now, early on in the 81 00:04:21,700 --> 00:04:24,400 presentation, they show some basic features of a, our 82 00:04:24,400 --> 00:04:27,600 headsets that were already used to being able to display 83 00:04:27,600 --> 00:04:31,000 multiple windows and different things and apps in front of you. 84 00:04:31,400 --> 00:04:35,300 Sort of like, a multi-monitor desk, Top set up, nothing too 85 00:04:35,300 --> 00:04:37,000 special. There we've seen this already 86 00:04:37,000 --> 00:04:39,800 with many a our headsets now. Apple is working their 87 00:04:39,800 --> 00:04:42,600 ecosystem, making it integrate with the MacBook. 88 00:04:42,600 --> 00:04:46,000 You can drag apps from your MacBook up into the sky. 89 00:04:46,300 --> 00:04:47,600 You can view them right in front of you. 90 00:04:47,700 --> 00:04:50,800 This is Apple leveraging their ecosystem, but again, this is 91 00:04:50,800 --> 00:04:54,700 stuff that we've seen in other a our headsets apple is supposed 92 00:04:54,700 --> 00:04:58,200 to be better, A step above all the rest and they can only do 93 00:04:58,200 --> 00:04:59,800 this first announcement one time. 94 00:04:59,800 --> 00:05:02,600 One thing that they announced, that seems pretty cool is 3D 95 00:05:02,600 --> 00:05:07,200 audio and They call it spatial video so you can actually film 96 00:05:07,200 --> 00:05:10,700 something in 3D and then re watch it in 3D, they mentioned 97 00:05:10,700 --> 00:05:13,400 over and over again that you really can't see how impressive 98 00:05:13,400 --> 00:05:16,100 this is on a 2d screen, but it looks incredible once you have 99 00:05:16,100 --> 00:05:17,600 the headset on. That was something that I 100 00:05:17,608 --> 00:05:19,000 thought was a bit more impressive. 101 00:05:19,000 --> 00:05:21,100 Now, next, they showed off the movie portion of this. 102 00:05:21,100 --> 00:05:24,000 Of course, you can watch TV and movies with your headset on. 103 00:05:24,300 --> 00:05:27,300 You can expand the display to look much larger than just a big 104 00:05:27,300 --> 00:05:29,800 screen TV. And what they showed here was 105 00:05:30,200 --> 00:05:32,900 the cinema mode where you can expand it to make it look not 106 00:05:32,900 --> 00:05:35,900 only like a big screen TV. TV, but like a massive 107 00:05:35,900 --> 00:05:39,600 gargantuan IMAX theater with the huge retina displays at this 108 00:05:39,600 --> 00:05:41,100 has. It's also supposed to be 109 00:05:41,400 --> 00:05:45,200 incredibly high resolution. So as you're expanding it, it's 110 00:05:45,200 --> 00:05:47,300 not supposed to be pixelated or look goofy. 111 00:05:47,400 --> 00:05:49,600 Now, the presentation goes on and I think everything looks 112 00:05:49,600 --> 00:05:54,000 good so far, but then we have a company that gets invited on 113 00:05:54,000 --> 00:05:57,500 stage to show off their integration with the headset and 114 00:05:57,500 --> 00:06:00,500 this is where I believe things got impressive, we have Bob Iger 115 00:06:00,500 --> 00:06:03,800 on the Apple stage. What if all the things that we 116 00:06:03,800 --> 00:06:06,100 thought? Thought were impossible were 117 00:06:06,100 --> 00:06:14,200 suddenly possible, you could experience your favorite stories 118 00:06:15,300 --> 00:06:26,700 in unexpected ways. Unbelievable places. 119 00:06:30,600 --> 00:06:34,500 Could do more than just watch sports. 120 00:06:38,200 --> 00:06:45,300 You could be at the game without leaving your home or be part of 121 00:06:45,308 --> 00:06:54,000 the action, like, never before. What if you could travel on a 122 00:06:54,000 --> 00:07:00,000 National Geographic Adventure from your couch, or if your 123 00:07:00,000 --> 00:07:07,400 imaginary friends weren't quite so, Nari. 124 00:07:10,900 --> 00:07:16,200 What if you could bring Disney World into your world? 125 00:07:20,600 --> 00:07:25,900 What if you could become a superhero and seek the answer to 126 00:07:25,900 --> 00:07:31,000 the ultimate question? What if Disney has a full 127 00:07:31,000 --> 00:07:33,100 integration into the Apple Vision Pro? 128 00:07:33,300 --> 00:07:36,400 And it does look impressive, just as this announcement was 129 00:07:36,400 --> 00:07:38,100 happening. Disney stock, jumped two 130 00:07:38,100 --> 00:07:39,800 percent. But ultimately, what Apple's 131 00:07:39,800 --> 00:07:42,400 doing here is showing all the different various applications 132 00:07:42,400 --> 00:07:45,100 of their new product trying to make it useful for as many 133 00:07:45,100 --> 00:07:47,700 different audiences as possible. Now, the next part of this, they 134 00:07:47,700 --> 00:07:51,300 go into the build quality design of the actual product and like, 135 00:07:51,300 --> 00:07:54,100 you can expect from Apple, it's incredibly high quality. 136 00:07:54,300 --> 00:07:55,800 In fact, it looks like they spared. 137 00:07:55,800 --> 00:07:59,500 No expense Apple had the goal of installing Instantly making this 138 00:07:59,700 --> 00:08:03,200 the number one talked about, number one hyped, a our headset 139 00:08:03,400 --> 00:08:06,800 and by far the highest quality and with their build design, 140 00:08:06,800 --> 00:08:10,000 they did accomplish that the surprisingly compact form 141 00:08:10,100 --> 00:08:12,200 encapsulates. An extraordinary amount of 142 00:08:12,200 --> 00:08:16,900 Technology displays cameras, sensors and even a high 143 00:08:16,900 --> 00:08:20,400 performance computer all kept cool by an efficient thermal 144 00:08:20,400 --> 00:08:23,200 design that quietly draws air through the system. 145 00:08:23,500 --> 00:08:26,100 The design, of course, is highly customizable and Incredibly high 146 00:08:26,100 --> 00:08:27,700 quality. Now, they go on showing 147 00:08:27,700 --> 00:08:29,700 different. Actions of how it can be used in 148 00:08:29,700 --> 00:08:32,700 education and Technology development, different ways to 149 00:08:32,700 --> 00:08:34,799 visualize things. There's all different types of 150 00:08:34,799 --> 00:08:38,100 applications, obviously for leading a our headset, so we 151 00:08:38,100 --> 00:08:41,600 know by now that it's good, it seems really powerful. 152 00:08:41,600 --> 00:08:44,400 The design seems incredibly high-quality the chip for its 153 00:08:44,400 --> 00:08:46,400 custom design and Incredibly powerful. 154 00:08:46,700 --> 00:08:50,200 It seems really good but then we get to the next part of this, 155 00:08:50,300 --> 00:08:54,600 which is the price point for the headset and it's three thousand 156 00:08:54,600 --> 00:08:58,300 four hundred and $99. You heard that right three 157 00:08:58,400 --> 00:09:02,100 $1500. Now, all say that, I'm what a 158 00:09:02,100 --> 00:09:04,200 lot of people consider to be an apple Fanboy. 159 00:09:04,200 --> 00:09:07,100 I really like their products. I like what Apple does, I always 160 00:09:07,100 --> 00:09:10,000 think that it's at the top end, they make the highest quality 161 00:09:10,000 --> 00:09:12,100 stuff. But when you come out with a 162 00:09:12,100 --> 00:09:16,000 product, even one like the headset and you make it above 163 00:09:16,100 --> 00:09:20,000 3,000 dollars, that is incredible. 164 00:09:20,400 --> 00:09:24,700 That's incredible. That is so much money $3500 165 00:09:24,700 --> 00:09:27,000 after-tax. You're paying close to thirty 166 00:09:27,000 --> 00:09:30,600 seven hundred dollars for It just incredible what they're 167 00:09:30,600 --> 00:09:32,700 actually asking for this headset. 168 00:09:32,900 --> 00:09:35,100 That was much higher than my expectations. 169 00:09:35,400 --> 00:09:38,900 I thought it would be somewhere in the mid-2000s maybe two 170 00:09:38,900 --> 00:09:41,100 thousand two hundred dollars. I could see it around there. 171 00:09:41,500 --> 00:09:44,700 But thirty five hundred dollars is a lot of money. 172 00:09:44,700 --> 00:09:48,800 In fact, the put that in perspective $3500 is so much 173 00:09:48,800 --> 00:09:52,300 money that that's how much I spent on my completely upgraded, 174 00:09:52,300 --> 00:09:56,100 specced out, new Macbook Pro. That I use to run this YouTube 175 00:09:56,100 --> 00:09:58,200 channel, to edit different videos too. 176 00:09:58,400 --> 00:10:02,300 Do a ton of business work on. That is my main daily driver, 177 00:10:02,300 --> 00:10:06,000 that's a Workhorse. So you're comparing this headset 178 00:10:06,200 --> 00:10:08,600 to one of their top end computers. 179 00:10:08,600 --> 00:10:10,300 That's the price point. They have a tad. 180 00:10:10,300 --> 00:10:13,500 Now, when I think of Market fit and who this product could 181 00:10:13,500 --> 00:10:17,800 possibly be advertised for, it's certainly not the average 182 00:10:17,800 --> 00:10:21,500 American, the average American their household income is around 183 00:10:21,500 --> 00:10:24,400 70 thousand per year. That's just normal. 184 00:10:24,400 --> 00:10:28,300 People making 60 to 80,000 per year, working your career. 185 00:10:28,400 --> 00:10:31,500 A job to spend three thousand five hundred dollars on a 186 00:10:31,508 --> 00:10:34,500 headset. Like, this is a major major 187 00:10:34,500 --> 00:10:37,500 investment that would take months of saving for the average 188 00:10:37,500 --> 00:10:40,300 person. So this rules out, 90% of 189 00:10:40,300 --> 00:10:43,900 Americans right off the bat. So, you have a very small 190 00:10:43,900 --> 00:10:46,700 minority of people, making this amount of money that are willing 191 00:10:46,700 --> 00:10:52,100 to dish out $3500 for something. That's pretty discretionary, not 192 00:10:52,100 --> 00:10:53,700 something that they have to have. 193 00:10:54,000 --> 00:10:56,100 The only people that are going to be buying this in the median, 194 00:10:56,100 --> 00:10:58,200 household, income are going to be people. 195 00:10:58,400 --> 00:11:03,200 All that are huge enthusiasts of a are some people like this type 196 00:11:03,200 --> 00:11:05,500 of stuff more than they like a nice car. 197 00:11:05,600 --> 00:11:07,700 More than they like different forms of entertainment or 198 00:11:07,700 --> 00:11:12,000 travel, they'd rather buy this. So to that Niche group, this is 199 00:11:12,000 --> 00:11:14,200 going to be something, they save up for and that they're willing 200 00:11:14,200 --> 00:11:15,800 to dish out some serious money for. 201 00:11:16,000 --> 00:11:19,400 But that is a small group of people that isn't every single 202 00:11:19,400 --> 00:11:22,300 person like they're trying to Market with with the iPhone. 203 00:11:22,700 --> 00:11:26,100 Apple has priced this out of the majority of Americans when I 204 00:11:26,108 --> 00:11:29,700 look at the other group that this product Would appeal to I 205 00:11:29,700 --> 00:11:31,400 think there's a couple different categories. 206 00:11:31,500 --> 00:11:34,300 There's the enthusiasts, there's the Educators I think this 207 00:11:34,300 --> 00:11:37,600 product will be used in universities and schools to show 208 00:11:37,600 --> 00:11:40,100 3D modeling and displays to their students. 209 00:11:40,200 --> 00:11:43,700 So I think this will be a very popular item amongst Educators 210 00:11:44,000 --> 00:11:47,300 and then there's also the developers developers will want 211 00:11:47,300 --> 00:11:50,900 to buy this item, they'll write it off as a business expense and 212 00:11:50,900 --> 00:11:54,300 they'll use it to develop apps and get a head start on when 213 00:11:54,300 --> 00:11:56,800 Apple comes out with another AR headset. 214 00:11:56,800 --> 00:11:58,200 That's at a more palatable price. 215 00:11:58,300 --> 00:11:59,800 Point. So we have a niche group of 216 00:11:59,800 --> 00:12:03,100 enthusiasts, we have Educators and we have developers and we 217 00:12:03,100 --> 00:12:06,400 have anybody that falls into the incredibly High income category 218 00:12:06,500 --> 00:12:08,600 that has a lot of discretionary income as well. 219 00:12:08,800 --> 00:12:12,600 To some people $3500 is not a lot of money so they could pick 220 00:12:12,600 --> 00:12:15,800 up one as well. But this misses out on the huge 221 00:12:15,800 --> 00:12:19,200 Market that Apple typically goes for Apple doesn't want to carve 222 00:12:19,200 --> 00:12:22,500 out some niche market where they can only sell to a very small 223 00:12:22,500 --> 00:12:24,600 group of people. They want to sell to as many 224 00:12:24,600 --> 00:12:28,200 people as possible and what I believe they'll do over time. 225 00:12:28,300 --> 00:12:29,400 Is what they've done in the past. 226 00:12:29,400 --> 00:12:33,000 They initially release a device like this, with the initial aim 227 00:12:33,000 --> 00:12:36,200 of having it be impressive and showing off the wide 228 00:12:36,200 --> 00:12:38,300 capabilities. That the item is able to do. 229 00:12:38,300 --> 00:12:42,100 This is almost like a ongoing advertisement for the new 230 00:12:42,100 --> 00:12:44,400 category. They show the power of what 231 00:12:44,400 --> 00:12:47,200 Apple has designed and they eventually release a lower-cost 232 00:12:47,200 --> 00:12:49,200 version of it that more people are able to afford. 233 00:12:49,200 --> 00:12:52,200 They get to that point. Once they've gone through the 234 00:12:52,200 --> 00:12:55,800 initial release phase, so the Vision Pro, a our headset right 235 00:12:55,800 --> 00:12:58,800 now is not going to be a big game changer for Apple. 236 00:12:58,900 --> 00:13:02,400 It's priced at a point where the majority of Apple customers are 237 00:13:02,400 --> 00:13:04,500 unwilling to buy it. They're simply not going to pay 238 00:13:04,500 --> 00:13:07,100 for it and apple is aware of that. 239 00:13:07,400 --> 00:13:11,100 I believe after this initial phase the initial release going 240 00:13:11,100 --> 00:13:14,400 through a year of iterative development and feedback, they 241 00:13:14,400 --> 00:13:17,800 will make it more accessible based on their feedback in terms 242 00:13:17,800 --> 00:13:19,300 of timeline. I believe they're going to go 243 00:13:19,300 --> 00:13:22,500 through this initial phase at this High entry price point. 244 00:13:22,700 --> 00:13:25,300 And then the next versions of this will have different price 245 00:13:25,300 --> 00:13:27,400 points. Some of which are much cheaper. 246 00:13:27,500 --> 00:13:29,700 That's when Apple I had to really push it to the 247 00:13:29,700 --> 00:13:31,700 mainstream. Now having said all of that with 248 00:13:31,700 --> 00:13:34,100 all of the discussion, we're going to get around this Vision 249 00:13:34,100 --> 00:13:37,200 Pro headset. I want to restate one fact that 250 00:13:37,200 --> 00:13:41,100 I think is significant my investment in the apple and my 251 00:13:41,100 --> 00:13:45,200 thesis on this company has never once been reliant on the Vision 252 00:13:45,200 --> 00:13:48,500 Pro or apples. A, our headset being a success. 253 00:13:48,700 --> 00:13:51,900 Another way that I could State. This is, I believe that Apple 254 00:13:52,100 --> 00:13:55,400 will be a very attractive good investment. 255 00:13:55,500 --> 00:13:58,200 Even if the Vision Pro is an utter disaster. 256 00:13:58,300 --> 00:14:01,400 A complete failure, even if that happens, is Company still a good 257 00:14:01,400 --> 00:14:04,000 investment, The Vision Pro and the Apple car. 258 00:14:04,200 --> 00:14:05,800 Those are potential growth paths. 259 00:14:06,000 --> 00:14:09,300 By Apple has, so many other avenues of growth, they have so 260 00:14:09,300 --> 00:14:12,600 many other levers to pull the monetize, their massive customer 261 00:14:12,600 --> 00:14:14,700 base and you can see them doing that. 262 00:14:14,700 --> 00:14:17,300 And again, when looking at this, we focus on the mode. 263 00:14:17,300 --> 00:14:19,300 Let's Take a look here. First of all, they announced a 264 00:14:19,308 --> 00:14:23,100 new Macbook Air a 15-inch one. This is probably the most 265 00:14:23,100 --> 00:14:25,700 important device for normal users. 266 00:14:26,000 --> 00:14:29,600 Normal users of MacBooks. Do not need a They need the air. 267 00:14:29,700 --> 00:14:32,500 It has all the computing power, they would ever need and now 268 00:14:32,500 --> 00:14:34,400 they have a 15 inch version of it. 269 00:14:34,500 --> 00:14:37,800 So, I think that this will be an incredibly good selling product. 270 00:14:37,800 --> 00:14:40,000 It has all the things that you would expect from Apple. 271 00:14:40,000 --> 00:14:43,700 It's then it has good speakers, but they also mention the Apple 272 00:14:43,800 --> 00:14:47,300 M2 Chip, they decided to mock. Intel, just a few more times. 273 00:14:47,400 --> 00:14:49,800 Comparing it against the first Intel Chip saying that. 274 00:14:49,800 --> 00:14:53,000 It's now 12 times faster. No wonder, they continually brag 275 00:14:53,000 --> 00:14:56,200 about their performance in comparison to Intel Apple also 276 00:14:56,200 --> 00:14:58,100 and their chip creating Endeavors created. 277 00:14:58,300 --> 00:15:01,600 The M2 Max, which is another Ultra powerful chip. 278 00:15:01,700 --> 00:15:04,700 They have it as the most powerful Apple chip currently, 279 00:15:04,700 --> 00:15:07,800 they decided to slap that chit in the Max studio. 280 00:15:07,800 --> 00:15:10,300 That's the little. It's like the little dock, the 281 00:15:10,300 --> 00:15:13,100 little Hub, that's an actual computer now and the thing is 282 00:15:13,100 --> 00:15:15,700 incredibly impressive and they mention things that seem 283 00:15:15,700 --> 00:15:19,400 completely absurd. Like, it can hook up to 22 8K 284 00:15:19,400 --> 00:15:22,000 streams at a time. Apple is still making the most 285 00:15:22,000 --> 00:15:26,300 powerful computers for design for editing for audio for all 286 00:15:26,300 --> 00:15:28,100 the different Endeavors that professionals do. 287 00:15:28,400 --> 00:15:29,800 And they show that often illustrate. 288 00:15:29,800 --> 00:15:32,700 That once more hair. They also brought back the Mac 289 00:15:32,700 --> 00:15:34,400 Pro. The Mac Pro is a beast of a 290 00:15:34,408 --> 00:15:36,400 computer. Nobody should be buying this for 291 00:15:36,400 --> 00:15:40,400 a simple personal use. It has stuff like 192 gigs 292 00:15:40,400 --> 00:15:42,600 unified memory. These specs are completely 293 00:15:42,600 --> 00:15:45,900 outrageous and it comes along with that typical outrageous 294 00:15:45,900 --> 00:15:48,600 price point, seven thousand dollars for that device. 295 00:15:48,700 --> 00:15:51,500 Again, these are used mostly for professionals companies, buy 296 00:15:51,500 --> 00:15:55,400 them as business write-offs. Now, as I'm watching this again, 297 00:15:55,400 --> 00:15:58,000 I'm asking myself as Apple's moat getting wider. 298 00:15:58,300 --> 00:16:01,400 Or is it shrinking in my judgment every single time? 299 00:16:01,400 --> 00:16:04,900 I see them come out with leading devices, which are the best in 300 00:16:04,900 --> 00:16:07,900 their given category. I believe the mo is widening for 301 00:16:07,900 --> 00:16:10,200 this company. I think it has a stronger mote 302 00:16:10,200 --> 00:16:13,000 today than it did yesterday. The company continues to 303 00:16:13,000 --> 00:16:16,500 iteratively develop and stay ahead of the competition in both 304 00:16:16,500 --> 00:16:19,900 their chip, making their design, the cohesiveness of their 305 00:16:19,900 --> 00:16:22,900 products and the power of them. Now, I think that Apple's 306 00:16:22,900 --> 00:16:26,000 Hardware division is second to none, they make Hardware, that's 307 00:16:26,000 --> 00:16:28,100 better than any other competitor by far. 308 00:16:28,500 --> 00:16:32,200 But I think what actually gives Apple the most significant moat 309 00:16:32,200 --> 00:16:35,600 is their integration of their software into their Hardware. 310 00:16:35,700 --> 00:16:38,100 Forming, what is called an ecosystem? 311 00:16:38,100 --> 00:16:40,800 Describe the Apple ecosystem, I want to reference a video. 312 00:16:40,800 --> 00:16:45,100 I did back in 2019, this was four years ago, talking about 313 00:16:45,100 --> 00:16:48,000 Apple's mode. In this video, I described apple 314 00:16:48,000 --> 00:16:51,200 as a tent in the ground. Pretend that you're going hiking 315 00:16:51,200 --> 00:16:53,400 out in the woods and you have to stake down a tent. 316 00:16:53,400 --> 00:16:56,300 You're going to be hiking and setting up camp in a place that 317 00:16:56,300 --> 00:17:00,100 has severe wind gusts. 20 30 mile an hour wind gust. 318 00:17:00,100 --> 00:17:02,900 That is the competition that is capitalism. 319 00:17:02,900 --> 00:17:06,099 There is always someone trying to take your mode away. 320 00:17:06,099 --> 00:17:08,800 Someone trying to steal the economics of your business. 321 00:17:08,800 --> 00:17:12,700 And what Apple does is they put down a lot of steaks. 322 00:17:12,700 --> 00:17:16,099 The stakes in the ground are the ecosystem of the company. 323 00:17:16,099 --> 00:17:18,599 You have one steak which is the iPhone. 324 00:17:18,599 --> 00:17:21,800 Then you have another one, which is the MacBook, then you have 325 00:17:21,800 --> 00:17:24,099 the iPad. You have the Apple watch, you 326 00:17:24,099 --> 00:17:26,800 have all the various Hardware products, but then you have 327 00:17:26,800 --> 00:17:28,300 other things that they're trying to address. 328 00:17:28,300 --> 00:17:32,400 Add into their ecosystem, more Stakes to keep their users set 329 00:17:32,400 --> 00:17:35,200 in stone so that they don't leave to a different operating 330 00:17:35,200 --> 00:17:37,700 system. They introduced different things 331 00:17:38,000 --> 00:17:41,100 like the Apple savings account. That's one more thing to keep 332 00:17:41,100 --> 00:17:44,300 you staked into the Apple ecosystem, they added in 333 00:17:44,500 --> 00:17:48,100 iMessage, they made it so that I message worked better with other 334 00:17:48,100 --> 00:17:50,300 Apple devices than it did with Android. 335 00:17:50,500 --> 00:17:53,100 That is another stake in the ground to keep you in the 336 00:17:53,100 --> 00:17:55,400 ecosystem. The same with apple photos, the 337 00:17:55,400 --> 00:17:57,300 same with apple wallet. Now, of course, there's other 338 00:17:57,300 --> 00:17:59,300 companies that try to do the same thing. 339 00:17:59,300 --> 00:18:02,700 They try setting up a tent, but unfortunately, they don't have 340 00:18:02,700 --> 00:18:05,800 as many stakes in the ground. So, when competition comes, they 341 00:18:05,800 --> 00:18:09,400 end up getting blown away. This is Intel a company that 342 00:18:09,400 --> 00:18:12,800 simply does not have the same moat and ecosystem of apple. 343 00:18:13,100 --> 00:18:15,900 As soon as someone came along and made a slightly better 344 00:18:15,900 --> 00:18:19,700 product, Intel stock price, got hammered, so you're looking at 345 00:18:19,700 --> 00:18:23,200 companies here and gauging, how did they keep their customers 346 00:18:23,200 --> 00:18:26,100 long-term with apple? This is always been a point that 347 00:18:26,100 --> 00:18:28,100 I focused on. And what I see is them. 348 00:18:28,300 --> 00:18:31,700 Tingly adding in more and more steaks and some of the biggest 349 00:18:31,700 --> 00:18:34,600 Stakes, they just recently added in our regarding the phone app 350 00:18:34,600 --> 00:18:36,900 and messaging. They added in some cool 351 00:18:36,900 --> 00:18:39,700 features. Like now, you can have an image 352 00:18:39,700 --> 00:18:42,100 of someone calling you to make it more personalized. 353 00:18:42,100 --> 00:18:44,900 This isn't exactly a huge competitive Advantage. 354 00:18:44,900 --> 00:18:47,400 Other companies can do this as well, but it's a fun little 355 00:18:47,400 --> 00:18:49,300 feature. They added in collocate, so you 356 00:18:49,300 --> 00:18:51,600 can now have live voicemail transcription. 357 00:18:51,600 --> 00:18:53,100 You can see what people are saying. 358 00:18:53,100 --> 00:18:55,200 As they're leaving. You voice messages and then you 359 00:18:55,200 --> 00:18:58,200 can decide then to pick up. This is a feature that I really 360 00:18:58,300 --> 00:19:01,600 We love because I do not answer calls of unrecognized numbers. 361 00:19:01,700 --> 00:19:04,300 But again, these are flashy features but I don't think 362 00:19:04,300 --> 00:19:06,100 they're massive stakes in the ground. 363 00:19:06,100 --> 00:19:08,800 These features in and of themself, I don't believe really 364 00:19:08,800 --> 00:19:10,700 grow apples mode another feature. 365 00:19:10,700 --> 00:19:14,500 That's cool and it adds to the Apple ecosystem slightly is 366 00:19:14,500 --> 00:19:18,600 leaving voicemails that are now video messages where I believe 367 00:19:18,600 --> 00:19:22,300 that Apple has the most to gain from their ecosystem Advantage 368 00:19:22,300 --> 00:19:25,000 is in messages. This is already been highly 369 00:19:25,000 --> 00:19:28,900 debated, but apples messages creates an Crowd. 370 00:19:29,000 --> 00:19:32,300 Once you're part of that and if you're an Android User, you are 371 00:19:32,300 --> 00:19:35,200 on the outside. Apple users have different 372 00:19:35,200 --> 00:19:38,200 functionality. Android has the green bubbles 373 00:19:38,400 --> 00:19:41,400 that come in slowly, and they seem disjointed from the 374 00:19:41,408 --> 00:19:44,200 conversation. And Apple has used this to their 375 00:19:44,200 --> 00:19:48,500 advantage, knowing that it is a massive part of their ecosystem. 376 00:19:48,600 --> 00:19:51,700 It is one of the big stakes in the ground that keep people on 377 00:19:51,700 --> 00:19:54,700 Apple's ecosystem out of Androids, and they've added in a 378 00:19:54,708 --> 00:19:57,800 lot of specific functionality like this new check-in feature. 379 00:19:58,200 --> 00:20:00,200 King it so that you can tell people when you're going to 380 00:20:00,200 --> 00:20:03,600 arrive and they can get specific information on your traveling. 381 00:20:03,600 --> 00:20:06,000 So they know right? Where you are that feature does 382 00:20:06,000 --> 00:20:08,600 add to the Apple ecosystem. It's another stake in the 383 00:20:08,600 --> 00:20:12,200 ground, but it's not as significant as this new one. 384 00:20:12,600 --> 00:20:16,400 This new one, I believe, is a much overlooked feature. 385 00:20:16,600 --> 00:20:19,000 People are just going to look at this and kind of scoff at it and 386 00:20:19,000 --> 00:20:21,200 move on to the next thing. But I believe it's one of the 387 00:20:21,200 --> 00:20:25,000 most significant updates in this entire developer conference. 388 00:20:25,000 --> 00:20:28,100 It's called stickers. Here's what Apple stickers are. 389 00:20:28,200 --> 00:20:32,000 Let me show it to you. By tapping the plus button. 390 00:20:33,100 --> 00:20:37,100 And then tapping stickers, you'll see the brand new drawer. 391 00:20:37,100 --> 00:20:39,200 That brings all my stickers into one place. 392 00:20:39,200 --> 00:20:42,400 Like my recently, used stickers from emoji and any sticker 393 00:20:42,400 --> 00:20:45,100 packs. I've downloaded and we've made 394 00:20:45,100 --> 00:20:49,400 all the Mochi into stickers. I can peel and stick an emoji 395 00:20:49,400 --> 00:20:54,000 sticker. And I can rotate and resize it 396 00:20:54,000 --> 00:20:59,200 to You can literally grab a sticker from the tray there at 397 00:20:59,200 --> 00:21:02,200 the bottom, you can drag it to wherever you want on the 398 00:21:02,200 --> 00:21:04,500 iMessage feed, even in group messages. 399 00:21:04,800 --> 00:21:07,200 And then you can twist and expand it to different sizes, 400 00:21:07,200 --> 00:21:09,100 specifically on the messages you want. 401 00:21:09,100 --> 00:21:10,600 And this is something that a lot of investors. 402 00:21:10,600 --> 00:21:13,600 Don't give enough credit to having these seemingly 403 00:21:13,600 --> 00:21:18,200 insignificant almost frivolous. Social media functionality is a 404 00:21:18,200 --> 00:21:21,400 big deal. People use these all the time. 405 00:21:21,500 --> 00:21:25,100 Look how popular memes are. Look how popular emojis are. 406 00:21:25,300 --> 00:21:28,100 Look how popular social media is within messaging. 407 00:21:28,400 --> 00:21:32,700 Expanding this toolkit of user messaging is significant, people 408 00:21:32,700 --> 00:21:34,700 want to be on the In Crowd and to do that. 409 00:21:34,700 --> 00:21:38,300 You have to own an iPhone. Best of all, you can now react 410 00:21:38,300 --> 00:21:41,400 to messages by adding stickers directly to any bubble from the 411 00:21:41,400 --> 00:21:44,300 tap back menu. And the fun doesn't stop in 412 00:21:44,300 --> 00:21:46,700 messages. We've added stickers system 413 00:21:46,700 --> 00:21:49,900 wide, so you can access your full Sticker Collection in 414 00:21:49,900 --> 00:21:53,900 markup and anywhere you can access Emoji today, including in 415 00:21:53,900 --> 00:21:56,300 third-party apps. I believe that this feature may 416 00:21:56,300 --> 00:21:59,400 be overlooked by most, but it is a massive feature. 417 00:21:59,500 --> 00:22:02,400 It brings Apple closer to competing directly with social 418 00:22:02,400 --> 00:22:05,500 media companies because you have more ways of expression and 419 00:22:05,500 --> 00:22:09,500 social media right within apples ecosystem. 420 00:22:09,500 --> 00:22:11,600 And there we have yet. Apple putting another stake in 421 00:22:11,600 --> 00:22:14,400 the ground, holding their tent down and increasing their mode. 422 00:22:14,400 --> 00:22:17,300 Now, one interesting thing about this entire presentation is 423 00:22:17,300 --> 00:22:21,500 Apple really didn't mention a. I at all, they mentioned 424 00:22:21,500 --> 00:22:25,000 slightly some machine, learning some language. 425 00:22:25,200 --> 00:22:28,800 Modeling when it came to autocorrect that was where they 426 00:22:28,800 --> 00:22:31,100 really mentioned that, they're using a lot of machine learning. 427 00:22:31,400 --> 00:22:34,600 But that was basically it and they didn't repeat the term aii 428 00:22:34,600 --> 00:22:37,800 over and over again. Apple knows that most people 429 00:22:37,800 --> 00:22:40,700 don't really care all that much about AI. 430 00:22:40,900 --> 00:22:43,600 All people want is something to work really well, and that's 431 00:22:43,600 --> 00:22:45,900 what they focus on the end-user affect. 432 00:22:46,200 --> 00:22:49,100 A lot of companies are focused on trying to boost their stock 433 00:22:49,100 --> 00:22:51,500 price and show how involved they are on the latest thing. 434 00:22:51,800 --> 00:22:55,100 Apple focuses on what users want apples trying to put more. 435 00:22:55,200 --> 00:22:57,800 Stakes in the ground by having a new Journal feature, where you 436 00:22:57,800 --> 00:23:00,900 can Journal out your entire life and tie it into videos, 437 00:23:01,100 --> 00:23:04,000 timelines Maps photos, everything who knows, how 438 00:23:04,000 --> 00:23:06,400 successful Journal will ultimately be, but this is 439 00:23:06,400 --> 00:23:09,200 another way to keep people tied into the Apple ecosystem. 440 00:23:09,400 --> 00:23:12,500 If you start journaling an apple, that's One Less Reason To 441 00:23:12,500 --> 00:23:15,200 Leave Your Journal halfway through and switch to an 442 00:23:15,200 --> 00:23:16,500 Android. And when it comes to, what I 443 00:23:16,500 --> 00:23:19,100 believe is the weakest part of this presentation, I think I'd 444 00:23:19,100 --> 00:23:21,200 have to give that to the iPad portion. 445 00:23:21,500 --> 00:23:24,700 All they really said, is that they're making new widgets, and 446 00:23:24,700 --> 00:23:27,800 they have A new home screen that I don't think is particularly 447 00:23:27,800 --> 00:23:30,800 all that great to me, the home screen, just looked like a photo 448 00:23:30,800 --> 00:23:33,100 with the time on, it doesn't seem like anything. 449 00:23:33,100 --> 00:23:36,500 That revolutionary nothing really to get excited about. 450 00:23:36,600 --> 00:23:38,700 It didn't really change my opinion, one way, or the other. 451 00:23:38,800 --> 00:23:42,100 In a more exciting announcement. Apple did have their new Mac OS, 452 00:23:42,100 --> 00:23:45,300 which is Sonoma apples, working on changing the widget drawer, 453 00:23:45,300 --> 00:23:48,000 which I honestly believe is a very weak point of the operating 454 00:23:48,000 --> 00:23:50,700 system. The widget drawer just seems 455 00:23:50,700 --> 00:23:54,300 messy and cluttered I might use it for a couple apps like the 456 00:23:54,300 --> 00:23:56,400 weather app. So I do like what they're doing, 457 00:23:56,400 --> 00:23:58,900 trying to improve that aspect of the Mac. 458 00:23:58,900 --> 00:24:01,300 They announced a new toolkit for game developers to be able to 459 00:24:01,308 --> 00:24:03,800 develop upon them. This is a weak point of Apple. 460 00:24:03,900 --> 00:24:06,900 Most people do not buy their devices for gaming purposes and 461 00:24:06,900 --> 00:24:09,000 they're really trying to get into this category. 462 00:24:09,000 --> 00:24:11,700 They want to make it so that their devices can be called 463 00:24:11,700 --> 00:24:13,800 gaming devices. But I still believe they have a 464 00:24:13,808 --> 00:24:16,300 long ways to go to be able to accomplish that, but I think 465 00:24:16,300 --> 00:24:18,600 they had more significant announcements when it comes to 466 00:24:18,600 --> 00:24:21,500 Safari Apple wants you to use Safari. 467 00:24:21,600 --> 00:24:24,500 They want you to move from Google Chrome into Safari when 468 00:24:24,500 --> 00:24:25,900 you're using. Devices. 469 00:24:26,100 --> 00:24:28,100 They've improved the security of it, making it so that it 470 00:24:28,100 --> 00:24:31,900 actually locks Incognito Windows after browsing if left on idle 471 00:24:31,900 --> 00:24:35,200 and they added in a new password manager, there's an entire 472 00:24:35,200 --> 00:24:37,600 category of product. And fact, a lot of companies use 473 00:24:37,600 --> 00:24:40,100 subscriptions to different products that are entirely 474 00:24:40,100 --> 00:24:42,700 centered around managing passwords. 475 00:24:43,000 --> 00:24:46,100 In fact, a lot of companies charge anywhere from four to 476 00:24:46,100 --> 00:24:49,600 seven dollars per month, just to manage your passwords and even 477 00:24:49,600 --> 00:24:51,500 more money to manage your family passwords. 478 00:24:51,800 --> 00:24:55,800 Now, apples building out a tool that could potentially Replace 479 00:24:55,800 --> 00:24:58,500 those type of products. The Apple password manager that 480 00:24:58,500 --> 00:25:01,500 works with your entire family. Now, all of these features again 481 00:25:01,500 --> 00:25:05,900 seem minor but they add a little bit to the Apple ecosystem and I 482 00:25:05,900 --> 00:25:08,300 still think there's a decent chance to Apple can continue to 483 00:25:08,300 --> 00:25:11,400 take market share from chrome into Safari now. 484 00:25:11,400 --> 00:25:13,400 Moving onto the watch. They announced a couple new 485 00:25:13,400 --> 00:25:16,300 features here. One's a new way to measure your 486 00:25:16,300 --> 00:25:19,800 overall health and strength. When doing exercise, which is 487 00:25:19,800 --> 00:25:23,000 something that I really have never heard of until now using 488 00:25:23,000 --> 00:25:27,700 power heart rate and Motion data Apple watch will estimate your 489 00:25:27,700 --> 00:25:32,200 functional threshold. Power known as FTP which is the 490 00:25:32,200 --> 00:25:35,100 highest level of cycling intensity that you could 491 00:25:35,100 --> 00:25:37,400 theoretically maintain for an hour. 492 00:25:37,500 --> 00:25:39,900 That doesn't seem like a huge game changer, but it does seem 493 00:25:39,900 --> 00:25:42,100 interesting. The other thing that they went 494 00:25:42,100 --> 00:25:46,600 on and on and on about with the watch was hiking, this is where 495 00:25:46,600 --> 00:25:50,100 they made a lot of adjustments. I don't know how big the market 496 00:25:50,100 --> 00:25:52,700 is for hiking, but it seems sizable enough for Apple to 497 00:25:52,700 --> 00:25:54,600 focus on it for a decent on a time. 498 00:25:54,900 --> 00:25:58,700 They Have trailheads, they now have different map locations. 499 00:25:58,700 --> 00:26:00,900 They now have different heights for your hike so you can see 500 00:26:00,900 --> 00:26:04,800 your altitude and the expanded this into work out apis where 501 00:26:04,800 --> 00:26:07,900 now you can use the Apple watch to do even things like improving 502 00:26:07,900 --> 00:26:10,300 your golf swing. All of this stuff was cool, but 503 00:26:10,300 --> 00:26:12,400 it's not a game changer. These aren't things that are 504 00:26:12,400 --> 00:26:14,200 really going to move the needle all that much. 505 00:26:14,200 --> 00:26:17,300 With the Apple watch people that already have their mind made up 506 00:26:17,300 --> 00:26:20,400 on it are likely going to be unchanged by these additions. 507 00:26:20,400 --> 00:26:23,300 The big thing that Apple still needs to develop in their watch 508 00:26:23,300 --> 00:26:26,700 is the glucose monitoring. And that would be a massive Game 509 00:26:26,700 --> 00:26:28,400 Changer. Of course, they don't have it 510 00:26:28,400 --> 00:26:30,000 yet, they didn't announce it here. 511 00:26:30,100 --> 00:26:32,500 Now, the presentation went over a lot of different things in a 512 00:26:32,508 --> 00:26:35,700 lot more detail, but that's basically the gist of it Apple 513 00:26:35,700 --> 00:26:37,300 added, in more stakes in the ground. 514 00:26:37,300 --> 00:26:39,900 They widen their moat and they announced the new feature, which 515 00:26:39,900 --> 00:26:42,900 is the AR headset which is going to be sold to a very Niche 516 00:26:42,900 --> 00:26:45,100 audience to start because of its price point. 517 00:26:45,100 --> 00:26:46,800 In terms of what investors are going to be the most 518 00:26:46,800 --> 00:26:49,600 disappointed of, I believe it's going to be the headset price 519 00:26:49,800 --> 00:26:52,800 that's going to get the most negative attention, who will 520 00:26:52,800 --> 00:26:54,900 ever be able to afford that headset. 521 00:26:55,300 --> 00:26:58,000 Looking at it long term, I don't think that's a problem. 522 00:26:58,100 --> 00:27:01,000 I think Apple will come out with more affordable versions down 523 00:27:01,000 --> 00:27:05,600 the road outside of that, Apple Still Remains with an incredibly 524 00:27:05,600 --> 00:27:09,200 wide moat, which should be the central thesis for owning this 525 00:27:09,200 --> 00:27:11,600 company. You can try to look at next 526 00:27:11,600 --> 00:27:15,400 year's earnings and next year's PE ratio, but that really hasn't 527 00:27:15,400 --> 00:27:17,800 been the best gauge a couple years ago. 528 00:27:17,800 --> 00:27:22,000 Apples P/E ratio was 20 to 25, the company remains around the 529 00:27:22,000 --> 00:27:24,700 same and the stock has been up 100%. 530 00:27:25,100 --> 00:27:28,600 So Apple has grown cash flows much, much faster than the 531 00:27:28,600 --> 00:27:30,500 market. Anticipated for me. 532 00:27:30,500 --> 00:27:32,600 Apple Still Remains a hold outside of Apple. 533 00:27:32,600 --> 00:27:35,400 There's one other company I want to talk about in my portfolio 534 00:27:35,400 --> 00:27:39,800 that recently reported earnings and this entire category of 535 00:27:39,800 --> 00:27:42,200 company has been doing terrible recently. 536 00:27:42,500 --> 00:27:46,400 It's the retail category. So in my consumer pie, we have 537 00:27:46,400 --> 00:27:49,800 CostCo right here. And this is the only physical 538 00:27:49,800 --> 00:27:52,400 retailer that I own. I don't own Lowe's or Home 539 00:27:52,400 --> 00:27:54,100 Depot. I don't own Target. 540 00:27:54,100 --> 00:27:56,700 I don't own Ulta. I don't own Dollar General or 541 00:27:56,700 --> 00:27:59,500 any other retailer. I decided to pool all of my 542 00:27:59,500 --> 00:28:01,700 money. That would go into retail and 543 00:28:01,700 --> 00:28:05,200 put it into Costco, and this is frustrating for a lot of 544 00:28:05,200 --> 00:28:09,400 investors because Costco stock has been doing really well and 545 00:28:09,400 --> 00:28:12,300 the stock price never seems to drop. 546 00:28:12,300 --> 00:28:15,400 Even though the company is optically, expensive cost, goes 547 00:28:15,400 --> 00:28:18,400 up, 14 percent. Year-to-date the company's done. 548 00:28:18,400 --> 00:28:21,900 Okay, it's beat the S&P 500. So far this year Target on the 549 00:28:21,900 --> 00:28:25,000 other hand is down 14 percent. Year-to-date Dollar General. 550 00:28:25,100 --> 00:28:27,600 Generals down a staggering 36 percent. 551 00:28:27,600 --> 00:28:30,800 Year-to-date Ulta is down 10 and a half percent year-to-date. 552 00:28:30,800 --> 00:28:33,000 And then we have Walmart which is holding up better, but it's 553 00:28:33,000 --> 00:28:36,200 still only up four percent, year-to-date lagging behind the 554 00:28:36,200 --> 00:28:38,900 major index. So why is Costco doing so much 555 00:28:38,900 --> 00:28:41,600 better than other retailers. I don't believe that this is a 556 00:28:41,600 --> 00:28:43,700 result of happened chance, or luck. 557 00:28:43,700 --> 00:28:46,100 The reason that Costco continually does well, is 558 00:28:46,100 --> 00:28:49,400 because of its results. The company has continually 559 00:28:49,400 --> 00:28:52,900 operationally good results better than other retailers and 560 00:28:52,900 --> 00:28:54,900 their specific reasons specific things. 561 00:28:55,100 --> 00:28:58,200 Do that drive those results. All of these companies have to 562 00:28:58,200 --> 00:29:00,000 deal with something called shrinkage. 563 00:29:00,100 --> 00:29:02,100 And what we're talking about here is not the type of 564 00:29:02,100 --> 00:29:04,800 shrinkage that's popularized by Seinfeld. 565 00:29:09,100 --> 00:29:12,700 The women know about shrinkage. What do you mean like laundry? 566 00:29:14,400 --> 00:29:16,800 No. No, that is not the shrinkage. 567 00:29:16,800 --> 00:29:19,500 We're talking about hair. Shrinkage is a term used in 568 00:29:19,500 --> 00:29:24,200 retail to describe product loss. Losing out on valuable 569 00:29:24,200 --> 00:29:26,900 merchandise. Either through employees 570 00:29:26,900 --> 00:29:30,600 stealing it customer stealing it, or it's simply being lost in 571 00:29:30,600 --> 00:29:32,800 transit. This has been such a massive 572 00:29:32,800 --> 00:29:35,500 issue in the retail category that it's hitting the bottom 573 00:29:35,500 --> 00:29:38,100 lines of these companies. Luckily, we can take Dollar 574 00:29:38,100 --> 00:29:40,500 General. For example, here's the CEO on 575 00:29:40,500 --> 00:29:43,200 the earnings call and he describes a problem, they're 576 00:29:43,200 --> 00:29:47,900 having these were partially offset by an increase in shrink. 577 00:29:48,000 --> 00:29:51,200 Markdowns, and inventory, damages, as well as greater 578 00:29:51,200 --> 00:29:54,800 proportion of sales coming from consumable categories, right 579 00:29:54,800 --> 00:29:58,000 there, he mentions that they're seeing an increase in shrink 580 00:29:58,000 --> 00:30:01,300 products being stolen or lost. Now we have the Target, CEO, and 581 00:30:01,300 --> 00:30:03,500 their last earnings call Beyond safety. 582 00:30:03,500 --> 00:30:06,500 Concerns were standing shrink rates are putting significant. 583 00:30:07,000 --> 00:30:10,300 Are on our financial results, more specifically based on the 584 00:30:10,300 --> 00:30:14,400 results we've seen so far this year, we expect that shrink will 585 00:30:14,400 --> 00:30:18,200 reduce profitability by more than point five billion dollars 586 00:30:18,200 --> 00:30:20,600 compared with last year. He just said, that product, 587 00:30:20,600 --> 00:30:24,500 shrink is going to impact targets, bottom line by 500 588 00:30:24,500 --> 00:30:27,400 million dollars massive impact from shrink. 589 00:30:27,600 --> 00:30:30,400 And while we're doing everything we can to address the problem, 590 00:30:30,600 --> 00:30:33,800 it's an industry and Community issue that can't be solved by a 591 00:30:33,800 --> 00:30:36,800 single retailer, that's why we're actively. 592 00:30:36,900 --> 00:30:40,000 Ting with legislation law enforcement and retail industry 593 00:30:40,000 --> 00:30:43,500 Partners to advocate for Public Policy solutions to combat 594 00:30:43,500 --> 00:30:45,200 organized. Retail crime. 595 00:30:45,600 --> 00:30:49,000 People are going into targets and stealing products, whether 596 00:30:49,000 --> 00:30:52,400 this is Target's fault for having a messy store having 597 00:30:52,400 --> 00:30:55,200 items off the shelf not having good security. 598 00:30:55,400 --> 00:30:57,700 Or it's a product of the communities that they operate 599 00:30:57,700 --> 00:30:59,500 in. The bottom line is investors 600 00:30:59,500 --> 00:31:02,000 profits and Target are being robbed by thieves. 601 00:31:02,000 --> 00:31:05,200 Walmart said in their last earnings, call on shrink it is a 602 00:31:05,208 --> 00:31:07,300 factor. And we've said in the past, It's 603 00:31:07,300 --> 00:31:09,900 been challenging for us. It's been challenging really for 604 00:31:09,900 --> 00:31:12,200 all of retail. So we're going to actively 605 00:31:12,200 --> 00:31:15,400 manage this issue. We always do we always have and 606 00:31:15,400 --> 00:31:18,100 we're going to continue to take steps that are reasonable and 607 00:31:18,100 --> 00:31:21,100 required to make sure we're protecting our customers and 608 00:31:21,100 --> 00:31:24,300 protecting our Associates and protecting our assets and 609 00:31:24,300 --> 00:31:26,600 inventory. We know a lot of communities 610 00:31:26,600 --> 00:31:30,100 have been affected by this but it's also important to note that 611 00:31:30,100 --> 00:31:33,800 retail can't solve this issue. All on its own it will take 612 00:31:33,800 --> 00:31:37,500 communities stepping up and enforcing laws That are able to 613 00:31:37,500 --> 00:31:39,700 bring the issue back under control. 614 00:31:40,000 --> 00:31:44,100 Walmart has a huge problem with shrink Ulta set in their last 615 00:31:44,100 --> 00:31:46,200 earnings call. Now, similar to what other 616 00:31:46,200 --> 00:31:49,000 retailers have shared, we continue to see pressure from 617 00:31:49,000 --> 00:31:51,800 inventory, shrink this quarter. And we have updated our 618 00:31:51,800 --> 00:31:55,200 full-year guidance to reflect the Persistence of this trend 619 00:31:55,300 --> 00:31:57,900 while shrink is a result of various factors theft 620 00:31:57,900 --> 00:32:01,200 specifically organized. Retail crime, especially as 621 00:32:01,200 --> 00:32:03,600 we've seen a rise in violence and aggression during these 622 00:32:03,600 --> 00:32:06,800 incidents, our first priority is the safety and well-being of our 623 00:32:06,900 --> 00:32:09,300 It's and our guests. We are committed to ensuring a 624 00:32:09,300 --> 00:32:12,800 safe working environment and investing in fixtures training, 625 00:32:12,800 --> 00:32:16,000 support and structure to increase Staffing and security 626 00:32:16,200 --> 00:32:18,800 to aggressively address this concerning Trend. 627 00:32:18,900 --> 00:32:21,700 All of these companies are dealing with shrink, in many 628 00:32:21,700 --> 00:32:23,300 cases. It's violent criminals going in 629 00:32:23,300 --> 00:32:26,300 and robbing these stores, but then we finally have Costco's 630 00:32:26,300 --> 00:32:29,300 earnings report call. This is what Costco had a say 631 00:32:29,300 --> 00:32:32,000 this last quarter. Our shrink is intact. 632 00:32:32,000 --> 00:32:35,000 We haven't seen any major change in trinka JH. 633 00:32:35,200 --> 00:32:38,900 It fluctuated a couple of Three basis points up, really before 634 00:32:38,900 --> 00:32:41,800 covid, as we rolled out self checkout and since then it's 635 00:32:41,800 --> 00:32:44,200 come back down a little bit. And so it's been a very tight 636 00:32:44,200 --> 00:32:47,300 range and we've been fortunate in that regard while every other 637 00:32:47,300 --> 00:32:50,500 major retailer is worried about the safety of their employees. 638 00:32:50,500 --> 00:32:55,100 Talking about violent, criminals and increase in Theft Costco 639 00:32:55,100 --> 00:32:57,100 says that. There's literally been no 640 00:32:57,100 --> 00:32:59,300 change. They don't mention any violent 641 00:32:59,300 --> 00:33:01,200 incidents. And they don't mention any 642 00:33:01,200 --> 00:33:03,400 change in shrinkage. Now, how could this be? 643 00:33:03,400 --> 00:33:06,600 What could make Costco different than the rest of the pack? 644 00:33:07,100 --> 00:33:09,500 Well, I have a couple simple observations that I think 645 00:33:09,500 --> 00:33:12,900 heavily impact, why Costco stands out from the rest. 646 00:33:13,100 --> 00:33:15,500 The first is a simple layout of their story. 647 00:33:15,600 --> 00:33:18,100 If you go to a Costco, you notice they have two basic 648 00:33:18,100 --> 00:33:21,200 doors. One of them is the entrance and 649 00:33:21,200 --> 00:33:25,500 the other one is the exit. They check all receipts at the 650 00:33:25,500 --> 00:33:28,100 exit. So it would be very difficult to 651 00:33:28,100 --> 00:33:30,600 steal from a Costco. You'd have to sneak by the 652 00:33:30,600 --> 00:33:32,700 receipt Checker. If you did that, they would 653 00:33:32,700 --> 00:33:35,200 track down who you are through the camera, and they would ban 654 00:33:35,200 --> 00:33:36,600 your membership. So you can never buy. 655 00:33:36,800 --> 00:33:39,200 Something from Costco. Again you would never be allowed 656 00:33:39,200 --> 00:33:42,600 in the warehouse ever again a punishment in my opinion that 657 00:33:42,600 --> 00:33:45,300 would be worse than jail time but the receipt checking is not 658 00:33:45,300 --> 00:33:47,900 the only thing that mitigates theft and Costco's. 659 00:33:48,100 --> 00:33:51,500 The other aspect is everything they sell for the most part is 660 00:33:51,500 --> 00:33:55,300 huge, its massive, large quantities big boxes. 661 00:33:55,600 --> 00:33:59,200 This would be difficult stuff to still consider the logistics of 662 00:33:59,200 --> 00:34:02,100 trying to really still anything from a Costco. 663 00:34:02,100 --> 00:34:04,900 Can you really sneak out of the store with one of these boxes? 664 00:34:05,100 --> 00:34:06,700 Can you really go unnoticed loading? 665 00:34:06,900 --> 00:34:10,699 Things in the car you might be able to but it would be very, 666 00:34:10,699 --> 00:34:13,600 very difficult and thieves realize this. 667 00:34:13,800 --> 00:34:16,900 They're looking at potential victims of theft and they go to 668 00:34:16,900 --> 00:34:20,400 the easiest victim possible. Costco is not the easiest 669 00:34:20,400 --> 00:34:21,900 victim. The only Thief that goes to 670 00:34:21,900 --> 00:34:24,600 Costco is one that wants to make things a lot more difficult for 671 00:34:24,600 --> 00:34:26,500 themselves. And then finally, the last 672 00:34:26,500 --> 00:34:29,199 aspect that I'd highlight is a major reason that Costco's 673 00:34:29,199 --> 00:34:31,699 different from all of these other retailers is their 674 00:34:31,699 --> 00:34:33,699 membership. Based system. 675 00:34:34,000 --> 00:34:37,500 Most retailers, you can go in and just buy a A gallon of milk 676 00:34:37,500 --> 00:34:40,699 if you want but the way the Costco initially made their 677 00:34:40,699 --> 00:34:43,800 business was focusing on which customers, they did not want, 678 00:34:43,800 --> 00:34:47,500 not which customers they did. Want Costco didn't want just 679 00:34:47,600 --> 00:34:49,500 anyone to be able to shop at their business? 680 00:34:49,800 --> 00:34:53,400 They wanted loyal customers that pay a membership for the 681 00:34:53,400 --> 00:34:55,699 privilege to be able to shop in their warehouse. 682 00:34:56,000 --> 00:34:59,000 If members are not willing to pay that membership, they're not 683 00:34:59,000 --> 00:35:02,000 able to shop at Costco. This in and of itself is a 684 00:35:02,000 --> 00:35:04,000 natural filter against criminals. 685 00:35:04,000 --> 00:35:06,500 They're far, more likely to go to places where they don't have 686 00:35:06,500 --> 00:35:08,800 any The membership base, the ones that they do. 687 00:35:08,800 --> 00:35:11,900 So when I get questions about other retailers, whether it be 688 00:35:11,900 --> 00:35:15,500 old te or Dollar General or Target, or whatever, retailer 689 00:35:15,500 --> 00:35:18,400 has recently sold off the questions of whether or not I'm 690 00:35:18,400 --> 00:35:22,200 going to buy it is likely. No, I chose Costco because I 691 00:35:22,200 --> 00:35:24,300 think it's Superior to these other retailers. 692 00:35:24,300 --> 00:35:25,500 Now that's going to be it for this episode. 693 00:35:25,500 --> 00:35:28,000 If you enjoyed this style of content, make sure you subscribe 694 00:35:28,000 --> 00:35:30,400 to the channel. I'll have more content out soon. 695 00:35:30,400 --> 00:35:34,000 If you want to join the patreon, you can join today with a free 696 00:35:34,000 --> 00:35:36,000 one-month trial, so, check it out. 697 00:35:36,000 --> 00:35:39,100 I think you'll Like it it gives you access to Quality trim, 698 00:35:39,100 --> 00:35:42,500 which is this stock analysis website as well as a lot of 699 00:35:42,500 --> 00:35:46,000 exclusive videos on an entire Discord community. 700 00:35:46,300 --> 00:35:49,500 So try it out risk-free with the link in the pin comment. 701 00:35:36,800 --> 00:35:39,700 Like it it gives you access to Quality trim, which is this 702 00:35:39,700 --> 00:35:44,200 stock analysis website as well as a lot of exclusive videos on 703 00:35:44,500 --> 00:35:48,100 an entire Discord community. So try it out risk-free with the 704 00:35:48,100 --> 00:35:49,500 link in the pin comment.