1
00:00:00,000 --> 00:00:01,100
Welcome back. 
Everyone. 

2
00:00:01,100 --> 00:00:04,600
We're finally add a new year. 
We're finally in 2023 and I'm 

3
00:00:04,600 --> 00:00:07,300
excited about the future. 
Like I said, I had a lot of New 

4
00:00:07,300 --> 00:00:10,400
Year's resolutions for main 
things that I highlighted and 

5
00:00:10,400 --> 00:00:15,300
one of my main goals for 2020, 3
was to strengthen my portfolio. 

6
00:00:15,300 --> 00:00:19,000
I called high grading my 
portfolio which just means I 

7
00:00:19,000 --> 00:00:22,700
raise the quality of it and part
of that is selling off lower 

8
00:00:22,700 --> 00:00:26,200
quality lower conviction 
Holdings and concentrating 

9
00:00:26,300 --> 00:00:29,600
further into higher quality 
Holdings and I've done that in 

10
00:00:29,600 --> 00:00:32,500
my Portfolio. 
I've sold off three different 

11
00:00:32,500 --> 00:00:34,900
companies. 
In my portfolio will be going 

12
00:00:34,900 --> 00:00:37,900
through all three of the sales 
and seeing why I sold those 

13
00:00:37,900 --> 00:00:39,800
companies and where I'm putting 
that money. 

14
00:00:40,200 --> 00:00:43,000
And I actually bought into a 
brand-new company and in the 

15
00:00:43,000 --> 00:00:46,200
process of doing analysis on my 
Holdings and looking over the 

16
00:00:46,200 --> 00:00:50,200
past year, I have to come clean 
and admit a mistake. 

17
00:00:50,200 --> 00:00:54,200
I made I made a mistake in my 
analysis, A year ago, I want to 

18
00:00:54,200 --> 00:00:57,300
go through how I made this 
mistake and what I plan on doing

19
00:00:57,300 --> 00:00:59,400
in the future. 
So we'll be talking about that 

20
00:00:59,500 --> 00:01:01,000
as well. 
Now, we also have some breaking 

21
00:01:01,000 --> 00:01:03,800
news, Bed Bath & Beyond is going
bankrupt. 

22
00:01:03,800 --> 00:01:05,800
This should really surprised, no
one. 

23
00:01:06,000 --> 00:01:08,400
But the problem that I want to 
highlight with this company that

24
00:01:08,400 --> 00:01:11,100
will go into, I want to 
highlight one of the biggest 

25
00:01:11,100 --> 00:01:15,100
abuse has one of the biggest 
misuses of BuyBacks that I've 

26
00:01:15,100 --> 00:01:17,200
ever seen in a publicly traded 
company. 

27
00:01:17,500 --> 00:01:20,700
And it's right here with the 
example of Bed Bath and Beyond. 

28
00:01:20,800 --> 00:01:23,400
And then finally we're going to 
take a look at this new detailed

29
00:01:23,400 --> 00:01:25,900
report on Apple's mixed reality 
headset. 

30
00:01:26,300 --> 00:01:29,100
They're coming out with it 
hopefully by the end of this 

31
00:01:29,100 --> 00:01:32,500
year is the Prediction. 
But we have a lot more details 

32
00:01:32,500 --> 00:01:35,300
on what this actually is. 
And as someone that's a 

33
00:01:35,300 --> 00:01:37,800
shareholder of Apple, It's a 
larger position of mine. 

34
00:01:38,200 --> 00:01:41,200
I have some opinions on this new
product, so we'll be looking at 

35
00:01:41,200 --> 00:01:43,300
that as well. 
So, obviously, we have a lot to 

36
00:01:43,308 --> 00:01:45,300
jump into in this episode a lot 
to go over. 

37
00:01:45,300 --> 00:01:47,800
And let's start off with the 
portfolio update, and where I 

38
00:01:47,808 --> 00:01:49,900
got things wrong, I made a 
mistake like I said, in my 

39
00:01:49,908 --> 00:01:51,500
analysis will get to that as 
well. 

40
00:01:51,600 --> 00:01:54,100
The first one that I want to go 
over is in the financial 

41
00:01:54,100 --> 00:01:57,200
category. 
I sold out of JPMorgan, my 

42
00:01:57,200 --> 00:02:00,600
entire stake in the company I 
used to have Dollars left in 

43
00:02:00,600 --> 00:02:03,400
this investment and around six 
thousand dollars in gains. 

44
00:02:03,400 --> 00:02:05,500
So JP Morgan has been a big 
winner for me. 

45
00:02:05,900 --> 00:02:08,100
Basically what I did with this 
company is I just bought it 

46
00:02:08,100 --> 00:02:11,500
really cheap during the pandemic
lows when everybody was afraid 

47
00:02:11,500 --> 00:02:14,100
that the economy was going to go
in the gutter banks are going to

48
00:02:14,108 --> 00:02:16,300
go bankrupt. 
There's lots of talk about 

49
00:02:16,300 --> 00:02:20,300
crypto, taking over and somehow 
beating out JPMorgan and none of

50
00:02:20,308 --> 00:02:22,800
that stuff happened Banks were 
completely fine. 

51
00:02:23,400 --> 00:02:26,800
JPMorgan recovered, the price 
went up the price to book right 

52
00:02:26,800 --> 00:02:29,800
now is 1.5, which I think is a 
fair value. 

53
00:02:29,900 --> 00:02:32,300
Ation a reasonable valuation for
JP Morgan. 

54
00:02:32,500 --> 00:02:34,600
So I don't necessarily think 
this is a bad holding. 

55
00:02:34,600 --> 00:02:37,400
In fact, I think Jay P Morgan 
does have a wide moat, but I 

56
00:02:37,408 --> 00:02:40,600
also think this company is 
highly cyclical and I don't 

57
00:02:40,600 --> 00:02:44,000
really consider a compounder in 
the same way that I do other 

58
00:02:44,000 --> 00:02:46,400
companies. 
It uses a ton of Leverage. 

59
00:02:46,400 --> 00:02:49,300
It doesn't really consistently 
grow earnings because it's very 

60
00:02:49,300 --> 00:02:51,400
cyclical. 
It's very sensitive to the 

61
00:02:51,400 --> 00:02:54,200
economy and those are all 
characteristics that I'm trying 

62
00:02:54,200 --> 00:02:57,200
to move away from. 
So, I took my gains in this 

63
00:02:57,200 --> 00:02:59,800
company, and I redeployed it 
into other companies. 

64
00:03:00,000 --> 00:03:03,300
That I'll go over in a minute 
but JP Morgan was the first sale

65
00:03:03,400 --> 00:03:06,400
and one thing I think is worth 
mentioning the companies that I 

66
00:03:06,400 --> 00:03:09,800
sell and my portfolio are 
incredibly good companies 

67
00:03:09,900 --> 00:03:13,200
because it companies that I buy 
are usually really, really good 

68
00:03:13,200 --> 00:03:15,200
companies. 
So even the ones that I'm 

69
00:03:15,200 --> 00:03:18,900
dumping even the stocks that I'm
selling are probably going to do

70
00:03:18,900 --> 00:03:20,700
really. 
Well in fact, I think a lot of 

71
00:03:20,708 --> 00:03:23,100
them will probably still 
outperform the market. 

72
00:03:23,300 --> 00:03:26,700
So I would not be concerned if 
you're still invested in j.p. 

73
00:03:26,700 --> 00:03:30,000
Morgan but that is one that I've
chosen to exit because I Like 

74
00:03:30,000 --> 00:03:32,900
other positions more. 
The next company that I chose to

75
00:03:32,900 --> 00:03:35,000
sell is in the consumer 
category. 

76
00:03:35,000 --> 00:03:38,600
This one is Church & Dwight, a 
company that I recently bought 

77
00:03:38,600 --> 00:03:41,900
into a year ago. 
It's gone down just slightly, 

78
00:03:41,900 --> 00:03:44,500
it's held up a little bit better
based on my bio and points. 

79
00:03:44,900 --> 00:03:47,900
But I've decided to sell this 
company basically because of the

80
00:03:47,900 --> 00:03:50,400
same analysis I've done with my 
other Holdings. 

81
00:03:50,600 --> 00:03:53,700
I've looked over every holding 
and I've tried to assess both 

82
00:03:53,700 --> 00:03:57,200
the moat and the brand strength,
the network effects, and the 

83
00:03:57,200 --> 00:04:00,600
pricing power, and simply put, 
when I put Church, Right next to

84
00:04:00,600 --> 00:04:03,700
other companies. 
I own like, Nike Pepsi Estee 

85
00:04:03,700 --> 00:04:06,800
Lauder even Starbucks. 
I considered those companies to 

86
00:04:06,800 --> 00:04:10,700
have stronger brand value and 
pricing power than Church &. 

87
00:04:10,700 --> 00:04:14,700
Dwight Starbucks is Raising 
prices while growing sales and 

88
00:04:14,700 --> 00:04:18,700
growing customer volume. 
Texas Roadhouse is Raising 

89
00:04:18,700 --> 00:04:22,100
prices while growing the amount 
of customers that visit their 

90
00:04:22,100 --> 00:04:25,900
store, that is pricing power. 
The ability to raise prices 

91
00:04:25,900 --> 00:04:29,200
without losing customers, but 
Church & Dwight doesn't seem to 

92
00:04:29,200 --> 00:04:31,800
have that too. 
Quite the same extent this year,

93
00:04:31,800 --> 00:04:34,700
they've chosen to raise prices 
but their overall revenue is 

94
00:04:34,700 --> 00:04:36,600
declining. 
And they've had other 

95
00:04:36,600 --> 00:04:39,100
competitors that I think have a 
little bit more pricing power 

96
00:04:39,300 --> 00:04:41,800
like Procter & Gamble. 
And I think the problem with 

97
00:04:41,800 --> 00:04:45,800
Church & Dwight for me, is a lot
of their brands are secondary 

98
00:04:45,800 --> 00:04:47,300
there. 
The second biggest in the 

99
00:04:47,300 --> 00:04:50,100
market, share, not the first. 
So even though this company, I 

100
00:04:50,100 --> 00:04:52,600
think is fine. 
I don't see any huge problems. 

101
00:04:52,800 --> 00:04:55,000
I just don't think it's quite as
powerful as some other 

102
00:04:55,000 --> 00:04:57,700
companies, my portfolio. 
So, I decided to cut this 

103
00:04:57,700 --> 00:04:59,700
position. 
Take the small loss on it. 

104
00:04:59,900 --> 00:05:02,700
Five hundred dollar loss and 
move on to other Holdings. 

105
00:05:02,800 --> 00:05:05,400
And then finally, the last one 
that you'll notice missing in 

106
00:05:05,400 --> 00:05:09,000
the consumer category is Target.
This is a company that I've been

107
00:05:09,000 --> 00:05:12,000
saying for a very long period of
time that I'm going to sell. 

108
00:05:12,100 --> 00:05:14,000
It's not going to be my 
portfolio forever. 

109
00:05:14,200 --> 00:05:17,700
When I do analysis on retailers,
there's only a couple that I 

110
00:05:17,700 --> 00:05:20,600
really want to own Costco is one
of them. 

111
00:05:20,800 --> 00:05:23,200
Amazon is the other. 
Those are the two retailers that

112
00:05:23,200 --> 00:05:27,200
I really like, I sold Target 
with a 671 dollar gain. 

113
00:05:27,400 --> 00:05:30,200
I had very little invested in 
this stock so that Is a pretty 

114
00:05:30,200 --> 00:05:32,100
sizeable gain. 
Given the amount of money that I

115
00:05:32,108 --> 00:05:34,800
had invested in the company. 
Now, Target I think is a great 

116
00:05:34,800 --> 00:05:36,300
company. 
I actually think it's one of the

117
00:05:36,308 --> 00:05:38,900
better retailers. 
It'll probably do well over the 

118
00:05:38,900 --> 00:05:42,800
next ten years, but when I 
again, assess the moat of 

119
00:05:42,800 --> 00:05:46,200
companies, the goal here was to 
high-grade, the portfolio, 

120
00:05:46,400 --> 00:05:48,800
increased the strength, and 
durability of it. 

121
00:05:49,100 --> 00:05:53,300
And when I assess Target and the
motive, it, I don't think it has

122
00:05:53,300 --> 00:05:57,600
any significant moat compared to
other retailers like Dollar 

123
00:05:57,600 --> 00:06:00,200
General or Walmart. 
In fact, I think I think 

124
00:06:00,200 --> 00:06:03,400
value-oriented retailers, like, 
Wal-Mart Dollar General and 

125
00:06:03,400 --> 00:06:07,900
Costco, have a stronger value 
proposition and a stronger, moat

126
00:06:07,900 --> 00:06:10,400
than a company, like Target, 
Target's a company that you can 

127
00:06:10,400 --> 00:06:13,400
get some unique items there. 
But a lot of, it just depends on

128
00:06:13,400 --> 00:06:16,800
the shopping experience because 
really, you can buy most things 

129
00:06:16,800 --> 00:06:20,500
at Target at Walmart or Costco 
or Amazon. 

130
00:06:20,500 --> 00:06:23,300
So I think that Target lacks the
considerable value proposition. 

131
00:06:23,300 --> 00:06:25,300
Moat that a company like Costco 
has. 

132
00:06:25,400 --> 00:06:28,000
So those are the three sales 
JPMorgan church and white and 

133
00:06:28,000 --> 00:06:29,700
Target. 
And I just want to point out. 

134
00:06:29,800 --> 00:06:32,200
Out that overall you can look at
the gains and losses. 

135
00:06:32,200 --> 00:06:34,500
I'm taking gains here. 
I've made money with these 

136
00:06:34,500 --> 00:06:37,100
companies over the past two 
years, which has been kind of 

137
00:06:37,100 --> 00:06:39,400
difficult to do. 
There's been a lot of people, 

138
00:06:39,400 --> 00:06:42,500
you can look up online that have
been losing money over the past 

139
00:06:42,500 --> 00:06:44,300
two years. 
So I'm happy to be locking and 

140
00:06:44,300 --> 00:06:48,100
gains and actually made trades 
in different buys into companies

141
00:06:48,300 --> 00:06:50,100
that have done well, over the 
past couple of years. 

142
00:06:50,200 --> 00:06:53,200
But just as importantly as 
selling, we have to have a place

143
00:06:53,200 --> 00:06:55,800
to put the money. 
That's hopefully better than the

144
00:06:55,800 --> 00:06:58,400
place, we took it out of. 
So hopefully the buys that I'm 

145
00:06:58,400 --> 00:07:01,300
doing are a better. 
Place for this money to be than 

146
00:07:01,300 --> 00:07:03,700
the companies. 
I just recently sold and I've 

147
00:07:03,700 --> 00:07:06,400
bought a number of different 
companies with this money. 

148
00:07:06,400 --> 00:07:09,900
I further concentrated into 
Microsoft as this company is 

149
00:07:09,900 --> 00:07:12,000
sold off. 
I put 1,000 additional dollars 

150
00:07:12,000 --> 00:07:15,400
into Microsoft, I realized the 
companies in the red, I realize 

151
00:07:15,400 --> 00:07:18,600
it's going down and it looks 
scary right now, in my opinion, 

152
00:07:18,600 --> 00:07:20,600
I think that Microsoft is 
undervalued. 

153
00:07:20,900 --> 00:07:23,500
And I think right now, 
basically, all of big Tech is 

154
00:07:23,500 --> 00:07:26,100
undervalued sighs. 
I'm not concerned about this 

155
00:07:26,100 --> 00:07:27,600
seven thousand dollars in the 
red. 

156
00:07:27,900 --> 00:07:30,800
I think this is temporary and I 
Leave that I'll make this money 

157
00:07:30,800 --> 00:07:32,300
back. 
You'll be able to follow and see

158
00:07:32,300 --> 00:07:35,400
over the upcoming years. 
I'll track it either way, but in

159
00:07:35,400 --> 00:07:37,800
my opinion it's just a matter of
time until the buys I'm doing 

160
00:07:37,800 --> 00:07:39,100
today. 
Pay off. 

161
00:07:39,200 --> 00:07:41,200
I bought a little bit more Vici.
That's right. 

162
00:07:41,200 --> 00:07:43,900
The company has come down in 
price, its trading around 32 

163
00:07:43,900 --> 00:07:46,300
dollars, a share. 
I don't think it's a complete 

164
00:07:46,300 --> 00:07:48,900
still right now, but I think 
it's a better value than it's 

165
00:07:48,900 --> 00:07:52,400
been over a long period of time 
and this company I think we'll 

166
00:07:52,400 --> 00:07:54,400
continue to kick out. 
Massive dividends. 

167
00:07:54,700 --> 00:07:58,000
I think we'll see this number 
grow over time, it'll Zig and 

168
00:07:58,000 --> 00:07:59,700
zag and it will wobble around 
from time. 

169
00:07:59,900 --> 00:08:01,600
A time. 
But overall the gains are going 

170
00:08:01,600 --> 00:08:03,700
to stack up. 
VG is a company that owns a lot 

171
00:08:03,700 --> 00:08:06,100
of Vegas. 
Real estate Vegas is all about 

172
00:08:06,100 --> 00:08:08,300
odds. 
And in this case, the odds are 

173
00:08:08,300 --> 00:08:11,900
highly in your favor that this 
company will collect 100% of 

174
00:08:11,900 --> 00:08:13,600
rents for the foreseeable 
future. 

175
00:08:13,700 --> 00:08:15,800
And those rents are going to end
up in my bank account. 

176
00:08:15,800 --> 00:08:18,000
I bumped up, my Holdings and 
Union, Pacific, and Canadian 

177
00:08:18,000 --> 00:08:20,100
Pacific, a little bit. 
These are going down. 

178
00:08:20,100 --> 00:08:23,200
I'm never going to catch the 
falling price of a stock, right 

179
00:08:23,200 --> 00:08:25,100
at the bottom. 
So I'm not going to be able to 

180
00:08:25,100 --> 00:08:27,400
time it that way. 
I expect these to fall down a 

181
00:08:27,407 --> 00:08:30,000
little bit more, but I'm 
gradually building my In in 

182
00:08:30,000 --> 00:08:31,500
these companies. 
Because again, I think they're 

183
00:08:31,500 --> 00:08:35,299
duopolies monopolistic companies
with Incredible pricing power. 

184
00:08:35,500 --> 00:08:38,500
Lots of efficiency going forward
and the merger with Canadian 

185
00:08:38,500 --> 00:08:40,100
Pacific. 
I think will be very good for 

186
00:08:40,100 --> 00:08:42,500
this company in the long term. 
Those are the companies that 

187
00:08:42,500 --> 00:08:46,200
I've been adding to, but I also 
introduced a new holding to the 

188
00:08:46,200 --> 00:08:48,700
portfolio and this is where I 
can happily admit. 

189
00:08:48,700 --> 00:08:50,000
That I was wrong about 
something. 

190
00:08:50,100 --> 00:08:53,900
I was wrong about MasterCard and
visa and ivory purchased an old 

191
00:08:53,900 --> 00:08:57,200
holding with MasterCard. 
I was wrong about this company a

192
00:08:57,200 --> 00:08:59,700
year ago. 
In fact, I made a video called 

193
00:08:59,900 --> 00:09:02,400
Just sold two stocks completely 
those two stocks. 

194
00:09:02,400 --> 00:09:04,900
As you can see, blurred out 
right, there is Visa and 

195
00:09:04,900 --> 00:09:07,600
MasterCard but the reason that I
was concerned about MasterCard 

196
00:09:07,600 --> 00:09:10,400
and Visa is there. 
So many new companies entering 

197
00:09:10,400 --> 00:09:12,800
into the payments fear a year 
ago. 

198
00:09:13,100 --> 00:09:16,600
If you recall the whole fin 
Tech, boom was just incredible. 

199
00:09:16,900 --> 00:09:19,700
Every single company was coming 
out with different fintech 

200
00:09:19,700 --> 00:09:22,100
products and it may be a little 
bit concerned. 

201
00:09:22,100 --> 00:09:24,500
I thought, what if there's other
companies building out these big

202
00:09:24,500 --> 00:09:28,300
networks that are going to upend
the moat and this big duopoly 

203
00:09:28,300 --> 00:09:31,600
that MasterCard and Visa Has an 
on top of all those new fintech 

204
00:09:31,600 --> 00:09:33,700
companies. 
We also had reports at the exact

205
00:09:33,700 --> 00:09:37,300
same time that Amazon was 
dropping Visa as a partner 

206
00:09:37,500 --> 00:09:40,500
saying that they're going to use
PayPal and different concerning 

207
00:09:40,500 --> 00:09:42,800
reports like this. 
And then while that was 

208
00:09:42,800 --> 00:09:45,700
happening, there is also news 
that apple and big Tech. 

209
00:09:45,700 --> 00:09:47,100
We're getting into payments as 
well. 

210
00:09:47,400 --> 00:09:49,900
Apple pay was taking off like a 
rocket. 

211
00:09:50,100 --> 00:09:53,400
So again, all these things 
swirling around of this fintech 

212
00:09:53,400 --> 00:09:55,600
explosion. 
It just may be concerned. 

213
00:09:55,600 --> 00:09:59,100
I really got scared with 
MasterCard and visa and getting 

214
00:09:59,100 --> 00:10:01,400
scared with. 
Holding is never a good thing. 

215
00:10:01,400 --> 00:10:04,100
This is one of the difficulties 
in investing is not getting 

216
00:10:04,100 --> 00:10:06,400
scared out of good companies. 
In fact, Peter Lynch, once 

217
00:10:06,400 --> 00:10:09,400
famously said, the real key to 
making money in stocks is to not

218
00:10:09,400 --> 00:10:12,600
get scared out of them and that 
is exactly what I did. 

219
00:10:12,600 --> 00:10:14,500
I got scared out of these two 
companies. 

220
00:10:14,500 --> 00:10:17,800
Now what's happened over the 
past year with this fintech 

221
00:10:17,800 --> 00:10:21,700
explosion and all the crypto and
everything that was supposed to 

222
00:10:21,700 --> 00:10:25,400
upend the entire US Financial 
system, put to rest these 

223
00:10:25,400 --> 00:10:28,800
companies of MasterCard and Visa
that hold this duopoly while we 

224
00:10:28,800 --> 00:10:30,900
can see what happened. 
And all of these disruptive 

225
00:10:30,900 --> 00:10:33,800
companies we can name. 
PayPal for example, this company

226
00:10:33,800 --> 00:10:36,800
is completely crushed, its down 
66 percent from its high. 

227
00:10:37,200 --> 00:10:41,000
The user ship has slowed for it 
and it hasn't threatened Visa or

228
00:10:41,000 --> 00:10:44,800
Mastercard really at all Amazon 
quickly, sorted things out and 

229
00:10:44,800 --> 00:10:47,300
still continues to work with 
MasterCard and visa. 

230
00:10:47,300 --> 00:10:49,600
And it's true that big Tech is 
moving into fintech, and they're

231
00:10:49,600 --> 00:10:52,000
building out. 
Things, like, Apple pay, but 

232
00:10:52,000 --> 00:10:55,100
Apple pay uses MasterCard, and 
Visa as part of their Network. 

233
00:10:55,200 --> 00:10:57,500
In fact, most of the 
transactions rely on their 

234
00:10:57,500 --> 00:11:00,400
existing networks Bitcoin, That 
was supposed to Bend the US 

235
00:11:00,400 --> 00:11:04,000
Financial system is down, 61%. 
There's continually people 

236
00:11:04,000 --> 00:11:07,400
moving out of exchanges and 
moving the cold storage and 

237
00:11:07,500 --> 00:11:09,800
selling out of crypto. 
And meanwhile, we can look at 

238
00:11:09,800 --> 00:11:13,000
what's happening with MasterCard
and Visa over the past year 

239
00:11:13,000 --> 00:11:16,800
visas down 3%, a little 
volatility with the stock but 

240
00:11:16,800 --> 00:11:18,700
nothing concerning the 
transactions. 

241
00:11:18,700 --> 00:11:20,300
For the business have hit record
highs. 

242
00:11:20,300 --> 00:11:24,000
The revenue has hit record highs
of seven point eight billion in 

243
00:11:24,000 --> 00:11:26,800
a single quarter and we can say 
the same thing about MasterCard 

244
00:11:26,800 --> 00:11:28,400
their duopoly and share the 
market. 

245
00:11:28,400 --> 00:11:31,600
MasterCard is down. 
Or percent nearly identical 

246
00:11:31,600 --> 00:11:34,600
performance to visa and likewise
the revenues have hit record 

247
00:11:34,600 --> 00:11:37,400
highs as more and more people 
are using their Network every 

248
00:11:37,400 --> 00:11:40,400
single day than a year ago. 
So I concluded that my initial 

249
00:11:40,400 --> 00:11:43,400
concerns for Visa Mastercard 
were largely unfounded and 

250
00:11:43,400 --> 00:11:46,000
unless I see some real 
compelling data show up in the 

251
00:11:46,000 --> 00:11:50,000
numbers, I plan on buying back 
into these companies and really 

252
00:11:50,000 --> 00:11:52,900
owning them as larger positions 
because outside of these 

253
00:11:52,900 --> 00:11:56,200
troubling predictions of their 
duopoly being broken up. 

254
00:11:56,400 --> 00:11:58,600
If you actually look at the 
numbers for these companies, 

255
00:11:58,600 --> 00:12:02,300
they are clearly a Compounder, 
so I decided to buy back in the 

256
00:12:02,300 --> 00:12:05,800
reason that I chose MasterCard 
over Visa was basically the flip

257
00:12:05,800 --> 00:12:08,000
of a coin. 
I had to choose one. 

258
00:12:08,100 --> 00:12:10,800
It's kind of like choosing one 
railroad over another. 

259
00:12:10,800 --> 00:12:12,500
I think they're all good 
options. 

260
00:12:12,600 --> 00:12:16,100
I had a slight Nuance preference
for MasterCard because I like 

261
00:12:16,100 --> 00:12:19,100
some of the deals they're doing 
with companies like apple but 

262
00:12:19,100 --> 00:12:22,400
really I would be just as fine 
owning visa and I may have Visa 

263
00:12:22,400 --> 00:12:25,400
back into the portfolio someday.
And in terms of buying back in, 

264
00:12:25,400 --> 00:12:29,200
I'm glad that in this case, my 
mistake on MasterCard was not a 

265
00:12:29,200 --> 00:12:31,000
costly. 
Mistake because a company's 

266
00:12:31,000 --> 00:12:33,200
down, a couple percentages from 
where I sold it. 

267
00:12:33,200 --> 00:12:36,100
So, I was able to buy back in, 
without this company racing 

268
00:12:36,100 --> 00:12:37,500
away. 
That's all the trades that I 

269
00:12:37,508 --> 00:12:39,100
did. 
I basically sold out a three 

270
00:12:39,100 --> 00:12:42,500
companies and brought back, 
MasterCard, and I've up my steak

271
00:12:42,500 --> 00:12:45,500
and concentration and to what I 
consider to be the higher 

272
00:12:45,500 --> 00:12:47,500
quality, Compounders in my 
portfolio. 

273
00:12:47,800 --> 00:12:50,200
One thing that I'll mention is 
even though this seems like a 

274
00:12:50,200 --> 00:12:53,400
lot of Trades, it's not a lot of
capital compared to my 

275
00:12:53,400 --> 00:12:56,400
portfolio. 
The total turnover from this. 

276
00:12:56,600 --> 00:13:00,100
This trade going on here is 
around 6% of the Leo. 

277
00:13:00,300 --> 00:13:02,800
So this isn't any huge massive 
difference. 

278
00:13:03,100 --> 00:13:05,800
I've moved around 6% of my 
portfolio positions. 

279
00:13:06,000 --> 00:13:08,800
Out of those three companies 
into some different ones and 

280
00:13:08,800 --> 00:13:11,400
hopefully my portfolio will be 
stronger as a result. 

281
00:13:11,500 --> 00:13:13,900
Now, moving on, I want to jump 
into this Bed Bath and Beyond 

282
00:13:13,900 --> 00:13:16,700
news because I think it's 
relevant to investors to be 

283
00:13:16,700 --> 00:13:21,300
aware of both the good uses of 
capital allocation and the bad 

284
00:13:21,300 --> 00:13:24,300
uses of capital allocation 
basically. 

285
00:13:24,300 --> 00:13:28,700
An executive sits in the role of
being an investor on your 

286
00:13:28,700 --> 00:13:31,300
behalf. 
If I invest money in a company 

287
00:13:31,300 --> 00:13:35,300
like Amazon, for instance, let's
bring up Amazon here. 

288
00:13:35,400 --> 00:13:38,300
We can look at it on qual trim, 
and we can see that this company

289
00:13:38,600 --> 00:13:41,800
makes a lot of different 
Investments when I invest in 

290
00:13:41,800 --> 00:13:45,700
Amazon, I'm handing over capital
of mine and I'm saying, hey, 

291
00:13:45,700 --> 00:13:49,300
Andy, jassy, and the executive 
team at Amazon, you make 

292
00:13:49,300 --> 00:13:53,400
investments with capital on my 
behalf, I'm giving you 

293
00:13:53,400 --> 00:13:55,600
Investments, and you can now 
invest on my behalf. 

294
00:13:55,800 --> 00:13:59,300
So you have to have confidence 
in the executive team to make 

295
00:13:59,300 --> 00:14:01,300
good. 
Investments on your behalf that 

296
00:14:01,300 --> 00:14:03,900
are going to have a high return 
on investment. 

297
00:14:04,200 --> 00:14:06,600
And that's a little bit of your 
judgment that makes it so that 

298
00:14:06,600 --> 00:14:09,300
you have a little bit of risk 
with any investment that is 

299
00:14:09,300 --> 00:14:11,700
called the agency risk of the 
executives. 

300
00:14:12,100 --> 00:14:15,200
Now, some businesses are less 
risky than others because they 

301
00:14:15,200 --> 00:14:18,600
do very minimal reinvestment. 
They basically just run their 

302
00:14:18,600 --> 00:14:20,300
Core Business and do nothing 
else. 

303
00:14:20,600 --> 00:14:23,400
And those ends are very 
predictable, both companies like

304
00:14:23,400 --> 00:14:25,600
Amazon, it's a little bit more 
risky, they're making a lot of 

305
00:14:25,608 --> 00:14:28,400
different Investments and you 
have to have some level of Faith

306
00:14:28,400 --> 00:14:30,800
or some level of research. 
That the management is going to 

307
00:14:30,800 --> 00:14:32,800
make smart Investments with your
money. 

308
00:14:32,900 --> 00:14:36,300
Now we bring up a counter 
example here, the company Bed 

309
00:14:36,300 --> 00:14:38,600
Bath and Beyond. 
And this is a company that I 

310
00:14:38,608 --> 00:14:42,600
think has made dramatic Miss A 
locations with their 

311
00:14:42,600 --> 00:14:44,900
Investments. 
And this is a huge risk for 

312
00:14:44,900 --> 00:14:48,500
investors beyond the fact that 
the retail business is 

313
00:14:48,500 --> 00:14:50,700
difficult. 
And I think it's highly 

314
00:14:50,700 --> 00:14:53,300
competitive and I would avoid 
investing in a lot of these 

315
00:14:53,300 --> 00:14:54,600
companies. 
I think there's going to be 

316
00:14:54,600 --> 00:14:57,900
swaths of them going bankrupt. 
I think Macy's will, I think 

317
00:14:57,900 --> 00:15:00,000
Dillard's will. 
I think some of the Companies 

318
00:15:00,000 --> 00:15:04,300
like Staples, will I think a lot
of retailers that we know about 

319
00:15:04,300 --> 00:15:07,700
are gonna go bankrupt over the 
next 10 years and it was only 

320
00:15:07,700 --> 00:15:10,300
really a matter of time with Bed
Bath and Beyond. 

321
00:15:10,700 --> 00:15:15,200
But the actions that these 
Executives took, I think are not

322
00:15:15,200 --> 00:15:18,700
only bad Capital, allocation, I 
would consider it Financial 

323
00:15:18,700 --> 00:15:20,700
malpractice. 
Now, let me go over the 

324
00:15:20,700 --> 00:15:23,800
illustration of why I think this
company was so egregiously 

325
00:15:23,800 --> 00:15:26,700
mismanaged and how investors can
avoid this in the future. 

326
00:15:27,100 --> 00:15:29,200
First of all, we have the 
businesses Top Line. 

327
00:15:29,400 --> 00:15:32,500
It's been going down for well 
over six years now and it's 

328
00:15:32,500 --> 00:15:34,500
going down at an aggressive 
clip. 

329
00:15:34,500 --> 00:15:37,300
So this is a company that is 
getting desperate. 

330
00:15:37,400 --> 00:15:38,600
It doesn't really know what to 
do. 

331
00:15:38,600 --> 00:15:40,600
They're having to come up with 
all these different strategies 

332
00:15:40,600 --> 00:15:43,900
to try to stabilize their 
revenue because they're losing 

333
00:15:43,900 --> 00:15:46,600
market share quickly. 
That's not their only problem, 

334
00:15:46,600 --> 00:15:48,600
though. 
They have problems with cash 

335
00:15:48,600 --> 00:15:51,000
flows. 
It should have been apparent to 

336
00:15:51,000 --> 00:15:53,300
this company Bed Bath and Beyond
that. 

337
00:15:53,300 --> 00:15:56,600
Their cash flows were declining 
over the past five years and 

338
00:15:56,600 --> 00:15:59,600
especially in 2019. 
That's what it really. 

339
00:15:59,700 --> 00:16:02,200
Came apparent that they're 
having cash flow issues. 

340
00:16:02,600 --> 00:16:04,500
Now we look at the balance sheet
of the company. 

341
00:16:05,100 --> 00:16:07,000
What is this company doing 
there? 

342
00:16:07,100 --> 00:16:10,200
Minimizing their cash? 
Balance cash balance? 

343
00:16:10,200 --> 00:16:13,300
Since 2020 has gone down 
dramatically to just a hundred 

344
00:16:13,300 --> 00:16:18,100
million dollars from 1.4 billion
so they're very low on cash. 

345
00:16:18,500 --> 00:16:22,300
Their debt has spiked back up as
they're taking out emergency 

346
00:16:22,300 --> 00:16:24,200
debt. 
This debt is getting more 

347
00:16:24,200 --> 00:16:26,800
expensive as SP Global has 
recently. 

348
00:16:26,800 --> 00:16:31,200
Just labeled it as lower credit.
So Now their cost of capital is 

349
00:16:31,200 --> 00:16:34,700
increasing and meanwhile, they 
still have these price you 

350
00:16:34,700 --> 00:16:37,200
Capital leases because they are 
retail business. 

351
00:16:37,700 --> 00:16:41,500
So they're a heavily indebted 
company that has far more 

352
00:16:41,600 --> 00:16:45,200
long-term debt than cash. 
On top of that they have the 

353
00:16:45,200 --> 00:16:48,200
ongoing operating expense of 
capital leases and what is 

354
00:16:48,200 --> 00:16:52,800
management doing during this 
dire desperate time in their 

355
00:16:52,800 --> 00:16:54,700
business. 
Well, what they're doing is 

356
00:16:54,700 --> 00:16:56,500
BuyBacks. 
That's what this company's been 

357
00:16:56,500 --> 00:16:59,400
doing for the past decade 
without any hiccup. 

358
00:16:59,700 --> 00:17:04,200
Since 2013, they knew that their
business was in Decline instead 

359
00:17:04,200 --> 00:17:07,400
of really working to fix the 
business instead of bolstering a

360
00:17:07,408 --> 00:17:11,000
huge cash pile for rainy day 
ahead, they reduced the shares 

361
00:17:11,000 --> 00:17:13,300
outstanding. 
In fact, they reduced it at an 

362
00:17:13,300 --> 00:17:17,700
aggressive clip, buying back 21%
of their shares outstanding in 

363
00:17:17,700 --> 00:17:20,900
just the past year in 2019. 
When it became clear that their 

364
00:17:20,900 --> 00:17:22,200
free cash. 
Flows were going down 

365
00:17:22,200 --> 00:17:25,000
dramatically. 
They halted the buyback program 

366
00:17:25,000 --> 00:17:28,600
for a couple of quarters and 
then they resumed it buying back

367
00:17:28,600 --> 00:17:33,700
shares all through. 2020 and in 
2021 they're buying back their 

368
00:17:33,700 --> 00:17:36,900
own stock using their precious 
cash balance. 

369
00:17:37,100 --> 00:17:40,100
That could save them from 
bankruptcy to buy back their own

370
00:17:40,100 --> 00:17:43,100
shares and hopes to boost the 
stock price their efforts to 

371
00:17:43,100 --> 00:17:44,900
boost the stock price. 
Didn't even work. 

372
00:17:44,900 --> 00:17:48,700
It's down 24%, just today. 
So all that money that they 

373
00:17:48,700 --> 00:17:51,600
bought back was completely 
wasted and the investors got 

374
00:17:51,600 --> 00:17:53,700
burned on that as well. 
And again I just wanted to go 

375
00:17:53,700 --> 00:17:56,000
over this because I think it 
highlights a key risk for the 

376
00:17:56,000 --> 00:17:59,100
stocks are invested in. 
That is the capital allocators 

377
00:17:59,100 --> 00:18:02,700
of the Which are the executives 
they're in control of doing 

378
00:18:02,700 --> 00:18:05,100
sound Investments. 
And if you see a company doing 

379
00:18:05,100 --> 00:18:08,200
BuyBacks while taking on massive
amounts of debts, while the 

380
00:18:08,200 --> 00:18:11,000
company's fundamentals are 
eroding, that is a clear sign 

381
00:18:11,000 --> 00:18:13,900
that the company is very much 
focused on the short term and 

382
00:18:13,900 --> 00:18:15,400
not on the long-term strength of
the company. 

383
00:18:15,400 --> 00:18:17,800
Now, the next piece of news that
I thought was very interesting 

384
00:18:17,800 --> 00:18:21,500
and relevant is Apple's new 
mixed reality headset. 

385
00:18:21,500 --> 00:18:24,200
We've heard rumors of this for a
long period of time, but it 

386
00:18:24,200 --> 00:18:27,900
seems like it's getting closer 
and closer as we know Apple, 

387
00:18:27,900 --> 00:18:32,200
rigorously tests all Of its 
devices before releasing, I 

388
00:18:32,200 --> 00:18:34,300
won't name any names, but 
there's a lot of other tech 

389
00:18:34,300 --> 00:18:37,300
companies that throw products 
out in the market and they use 

390
00:18:37,300 --> 00:18:39,500
their customers as the test 
dummies for it. 

391
00:18:39,700 --> 00:18:42,900
This is not the case with Apple.
So before they release 

392
00:18:42,900 --> 00:18:45,100
something, they have to have a 
good idea that it's very 

393
00:18:45,100 --> 00:18:48,200
rigorously tested and it's going
to have a very good outcome for 

394
00:18:48,200 --> 00:18:51,000
the general audience. 
Now, we do have some details 

395
00:18:51,000 --> 00:18:53,900
about Apple's, mixed reality. 
Headsets first of all, the looks

396
00:18:53,900 --> 00:18:57,100
of it, they say the headset 
resembles a pair of ski goggles 

397
00:18:57,400 --> 00:18:59,400
and we'll use an array of 
cameras to allow people to 

398
00:18:59,700 --> 00:19:03,200
Variants both augmented and 
virtual reality so you can do it

399
00:19:03,200 --> 00:19:05,600
both ways, it's going to look 
like ski goggles. 

400
00:19:05,600 --> 00:19:07,900
That doesn't really give us a 
lot of information there but we 

401
00:19:07,900 --> 00:19:10,000
do get more specifics into how 
this works. 

402
00:19:10,200 --> 00:19:12,700
They say the headset will use 
motors that automatically adjust

403
00:19:12,700 --> 00:19:15,500
its lenses ensuring that the 
where has the best possible 

404
00:19:15,500 --> 00:19:18,400
viewing experience a physical 
dial on the headset will allow 

405
00:19:18,400 --> 00:19:22,600
users to quickly toggle between 
complete immersion and VR and 

406
00:19:22,600 --> 00:19:24,500
the ability to see their 
surroundings. 

407
00:19:24,800 --> 00:19:27,700
And Apple has quietly included 
technology in the latest version

408
00:19:27,700 --> 00:19:30,600
of its Ear Pod pros. 
And Tended to make them work 

409
00:19:30,600 --> 00:19:32,800
better with the headset and 
there it is. 

410
00:19:33,100 --> 00:19:36,300
There's the motive Apple, always
looking to integrate their 

411
00:19:36,300 --> 00:19:40,000
existing technology and their 
existing ecosystem into every 

412
00:19:40,000 --> 00:19:41,800
new product. 
They're not just going to 

413
00:19:41,800 --> 00:19:44,700
integrate it with the are pods. 
It'll be integrated with the 

414
00:19:44,700 --> 00:19:46,600
iPhone. 
It'll be integrated with the 

415
00:19:46,900 --> 00:19:49,900
iPad and with Apple TV plus with
everything. 

416
00:19:50,100 --> 00:19:52,300
All of this is going to work 
seamlessly together. 

417
00:19:52,500 --> 00:19:55,600
That's the way Apple does 
everything they say as of last 

418
00:19:55,600 --> 00:19:58,800
year the headset used an 
extended battery pack tethered 

419
00:19:58,800 --> 00:20:01,400
by a cable. 
Well, as opposed to a battery 

420
00:20:01,400 --> 00:20:04,500
integrated into the headband. 
The design Choice has been 

421
00:20:04,508 --> 00:20:08,100
controversial among apples 
Engineers, given the company's 

422
00:20:08,100 --> 00:20:10,100
preference for cable free 
designs. 

423
00:20:10,100 --> 00:20:11,800
This is something that I can 
see. 

424
00:20:11,800 --> 00:20:15,200
Apple getting made fun of having
a cord, go down from the headset

425
00:20:15,200 --> 00:20:17,600
to your waist and then having a 
battery pack. 

426
00:20:17,600 --> 00:20:19,900
There is basically like a fanny 
pack. 

427
00:20:19,908 --> 00:20:24,400
So you have a fanny pack battery
which is not the most flattering

428
00:20:24,400 --> 00:20:27,700
or seamless design and apple 
being known for the design. 

429
00:20:27,700 --> 00:20:31,300
I think this could cause a A 
little bit of a stir, but you 

430
00:20:31,300 --> 00:20:32,800
have to consider the options 
here. 

431
00:20:33,200 --> 00:20:36,900
Batteries are heavy, having them
sit on your head for an extended

432
00:20:36,900 --> 00:20:41,100
period of time, causes fatigue 
on your shoulders and your neck.

433
00:20:41,400 --> 00:20:43,200
So they're making judgment calls
here. 

434
00:20:43,600 --> 00:20:46,600
And at some point there has to 
be a little bit of give and 

435
00:20:46,600 --> 00:20:50,200
take, you have to sacrifice some
Design Elements to make the 

436
00:20:50,200 --> 00:20:52,000
product. 
Actually work, can be feasible 

437
00:20:52,300 --> 00:20:54,600
in this case. 
I think, if you have a heavy 

438
00:20:54,600 --> 00:20:57,300
battery, I rather have that 
sitting on my waist, then 

439
00:20:57,300 --> 00:20:59,800
sitting on my head, they say, 
apple appears to be Getting 

440
00:20:59,800 --> 00:21:03,000
closer to the launch of the 
product as of early last year. 

441
00:21:03,100 --> 00:21:06,800
Taiwanese manufacturer pegatron 
has assembled a headset outside 

442
00:21:06,800 --> 00:21:10,000
of Shanghai, it passed multiple 
prototype stages and entered 

443
00:21:10,000 --> 00:21:13,700
production, Milestone known as 
the engineering validation test.

444
00:21:14,000 --> 00:21:17,300
This is where they make 
thousands of the product to see 

445
00:21:17,300 --> 00:21:19,300
if it's suitable for mass 
production. 

446
00:21:19,600 --> 00:21:22,600
Now, despite reaching that 
stage, Apple could still scrap 

447
00:21:22,600 --> 00:21:25,600
elements of the design and the 
headset all together. 

448
00:21:25,900 --> 00:21:28,400
Again, they're going to want to 
come out with a good product. 

449
00:21:28,500 --> 00:21:31,700
Apple doesn't want to. 
Sacrifice its reputation by pre 

450
00:21:31,700 --> 00:21:34,500
releasing a product before it's 
ready for prime time, this thing

451
00:21:34,500 --> 00:21:37,300
is going to be expensive, all 
the estimates, I've seen and 

452
00:21:37,300 --> 00:21:39,500
even the most current estimates 
are that it's going to be around

453
00:21:39,500 --> 00:21:43,300
three thousand dollars or more, 
and it just seems like, there's 

454
00:21:43,300 --> 00:21:46,600
no other way to price it lower 
with the technology, it has the 

455
00:21:46,608 --> 00:21:49,000
sensors, it has the cost of 
making. 

456
00:21:49,000 --> 00:21:51,600
This is going to be much higher 
than an iPhone or much higher 

457
00:21:51,600 --> 00:21:55,600
than their other devices, and 
that price range does price out 

458
00:21:55,600 --> 00:22:00,400
most people, but it will still 
be a nice range for Or people 

459
00:22:00,600 --> 00:22:03,900
that really are interested in VR
and mixed our headset. 

460
00:22:04,100 --> 00:22:06,900
And I think the route this will 
take is it will simply get 

461
00:22:06,900 --> 00:22:10,200
cheaper over time, it will start
off super premium and they'll 

462
00:22:10,200 --> 00:22:12,000
come out with cheaper models 
over time. 

463
00:22:12,000 --> 00:22:15,100
The display in Optics of this 
device, I think are the most 

464
00:22:15,100 --> 00:22:17,100
compelling part of it. 
And I think is what's going to 

465
00:22:17,100 --> 00:22:21,700
set this above and beyond what 
metas doing I fully believe. 

466
00:22:21,700 --> 00:22:24,000
When I look at the differences 
between Apples, accompany a 

467
00:22:24,000 --> 00:22:27,400
meta, I think that Apple has a 
much better engineering design 

468
00:22:27,400 --> 00:22:30,800
and Hardware team than meta. 
Mehta has a better social 

469
00:22:30,800 --> 00:22:33,300
engineering team. 
Apple has a better Hardware 

470
00:22:33,300 --> 00:22:36,000
engineering team, so when I look
at the differences between their

471
00:22:36,000 --> 00:22:39,200
designs and what they're talking
about here, this one seems like 

472
00:22:39,200 --> 00:22:41,500
a massive step ahead of the 
Oculus. 

473
00:22:41,600 --> 00:22:45,100
They say display for each eye 
has a resolution of 4K combine, 

474
00:22:45,100 --> 00:22:47,900
they form an 8K image. 
That's four times, the pixels of

475
00:22:47,900 --> 00:22:50,400
an ultra high-definition TV. 
The displays which are 

476
00:22:50,400 --> 00:22:53,100
manufactured by Sony will be 
among the first to use 

477
00:22:53,100 --> 00:22:57,100
technology known as Micron OLED.
That means the displays are 

478
00:22:57,100 --> 00:22:59,400
fabricated directly on a silicon
wafer. 

479
00:22:59,600 --> 00:23:03,200
Instead of, on glass, allowing 
it to be extra tiny and thin. 

480
00:23:03,600 --> 00:23:06,600
But still contain a high density
of pixels. 

481
00:23:06,600 --> 00:23:08,500
Sounds pretty impressive. 
When the user puts on the 

482
00:23:08,508 --> 00:23:11,500
headset will automatically 
adjust the lenses using small 

483
00:23:11,500 --> 00:23:15,600
motors so that they match the 
users interpupillary distance, 

484
00:23:15,600 --> 00:23:19,100
the space between the users 
pupils which varies from person 

485
00:23:19,100 --> 00:23:21,200
to person. 
That's important because your 

486
00:23:21,200 --> 00:23:24,500
eyes need to be perfectly 
aligned with the small displays 

487
00:23:24,500 --> 00:23:28,700
inside the headset to give you 
the largest observable area and 

488
00:23:28,700 --> 00:23:32,000
filled a view. 
You, I also think something that

489
00:23:32,000 --> 00:23:34,800
they don't mention here as I 
think the fact that many 

490
00:23:34,800 --> 00:23:37,800
headsets are not perfectly 
aligned with your face and eyes,

491
00:23:38,300 --> 00:23:41,600
I think that's what causes 
people to have nausea and people

492
00:23:41,600 --> 00:23:45,300
to get dizzy when they use 
headsets and that's a constant 

493
00:23:45,300 --> 00:23:47,400
complaint for people using VR 
headsets. 

494
00:23:47,800 --> 00:23:50,900
So if they can solve that 
problem where people don't get 

495
00:23:50,900 --> 00:23:54,100
dizzy or don't get nauseous 
using these, I think it 

496
00:23:54,100 --> 00:23:57,300
dramatically broadens, the use 
case and apples headset will 

497
00:23:57,300 --> 00:24:01,100
also allow people who wear 
glasses Magnetically clip in 

498
00:24:01,100 --> 00:24:04,200
custom prescription lenses. 
So they've solved that issue as 

499
00:24:04,200 --> 00:24:06,200
well. 
It uses a number of processors, 

500
00:24:06,200 --> 00:24:08,300
but the most notable one is 
called Statin. 

501
00:24:08,500 --> 00:24:11,700
It's the brains of the headset, 
it's more powerful than the M2 

502
00:24:11,700 --> 00:24:14,000
Chip, and it's custom-made for 
this headset. 

503
00:24:14,000 --> 00:24:16,300
They say in terms of design, 
it's going to be composed of 

504
00:24:16,300 --> 00:24:19,700
aluminum and glass. 
While also using carbon fiber to

505
00:24:19,700 --> 00:24:23,100
reduce the size and weight, 
making it lighter and thinner 

506
00:24:23,400 --> 00:24:27,400
than the meta Quest Pro. 
So it'll be more powerful, have 

507
00:24:27,400 --> 00:24:30,800
better lenses and be lighter and
Thinner, as an apple 

508
00:24:30,800 --> 00:24:32,800
shareholder. 
I like what I'm reading so far. 

509
00:24:32,800 --> 00:24:36,800
And then finally, in terms of 
content, apple has a significant

510
00:24:36,800 --> 00:24:40,100
Advantage here over competitors,
like a met as well because they 

511
00:24:40,100 --> 00:24:43,200
have 30 million developers 
actively building apps on the 

512
00:24:43,200 --> 00:24:46,200
Apple App Store. 
Apple is a money-making machine 

513
00:24:46,300 --> 00:24:49,000
for these developers. 
They make a fortune even with 

514
00:24:49,000 --> 00:24:51,700
the Apple tax included in that. 
So they're going to be happy to 

515
00:24:51,708 --> 00:24:55,300
develop on a new Apple device 
and try to be first to Market, 

516
00:24:55,500 --> 00:24:57,900
get that first mover's advantage
on the new apps. 

517
00:24:58,400 --> 00:25:01,800
Apple may also be Adding virtual
or mixed reality experiences 

518
00:25:01,800 --> 00:25:04,500
around live sports they've been 
buying up a lot of sports 

519
00:25:04,500 --> 00:25:06,700
rights. 
They say the New York Times also

520
00:25:06,700 --> 00:25:09,600
reported in June that apple is 
working with Hollywood producers

521
00:25:09,600 --> 00:25:13,600
to make content for the headset 
that will tie into its Apple TV 

522
00:25:13,600 --> 00:25:17,300
Plus shows so they're they're 
tying in their ecosystem with 

523
00:25:17,300 --> 00:25:19,500
Apple TV. 
Plus it's going to somehow 

524
00:25:19,500 --> 00:25:20,800
connect with the headset as 
well. 

525
00:25:20,800 --> 00:25:24,100
This is where everything ties 
together with this headset. 

526
00:25:24,100 --> 00:25:27,400
It's going to tie into Apple TV,
plus it'll tie into their app 

527
00:25:27,400 --> 00:25:30,700
store, it'll tie into even the 
The earpods, that's what they're

528
00:25:30,700 --> 00:25:34,400
using for audio for the headset.
Probably, the earpod pros, 

529
00:25:34,800 --> 00:25:37,700
everything ties back into the 
Apple ecosystem. 

530
00:25:37,700 --> 00:25:40,800
Now, I've said this many times 
before I'm an apple Fanboy I 

531
00:25:40,800 --> 00:25:43,500
like basically every product 
this company comes out with. 

532
00:25:43,800 --> 00:25:45,800
Sometimes they do come out with 
flops though. 

533
00:25:45,800 --> 00:25:50,400
I'll admit it and I think the 
mixed reality headset is it's a 

534
00:25:50,400 --> 00:25:52,400
risky one. 
I don't think this one is like 

535
00:25:52,400 --> 00:25:55,800
the next iPhone that just has 
some small iterations and has 

536
00:25:55,800 --> 00:26:00,200
very low risk of execution, I 
consider this to be a very Hi 

537
00:26:00,400 --> 00:26:02,800
execution, risk release for 
Apple. 

538
00:26:03,200 --> 00:26:06,300
Probably one of the more risky 
ones over the past decade, 

539
00:26:06,500 --> 00:26:09,700
because there's just so much 
Tech and so much to consider 

540
00:26:09,900 --> 00:26:12,600
with a VR headset. 
I don't think it's been going 

541
00:26:12,600 --> 00:26:16,500
quite as well, for meta, I think
they've had struggles, we've had

542
00:26:16,500 --> 00:26:19,200
VR headset, slow down and sales 
over the past year. 

543
00:26:19,600 --> 00:26:22,900
So Apple really needs to nail 
this and I think they only get 

544
00:26:22,900 --> 00:26:24,700
one shot to make a first 
impression. 

545
00:26:25,300 --> 00:26:29,800
So there is some execution risk,
but in my opinion, Even though 

546
00:26:29,800 --> 00:26:32,400
the stock is trading down a 
little bit right now, this VR 

547
00:26:32,400 --> 00:26:35,500
headset is not part of my 
investment thesis for Apple this

548
00:26:35,500 --> 00:26:38,200
company generates. 
So much cash flow even without 

549
00:26:38,200 --> 00:26:40,800
this headset that I think it 
would be completely fine. 

550
00:26:41,100 --> 00:26:44,500
So, if they are able to have 
another success, another big 

551
00:26:44,500 --> 00:26:48,400
premium item to add to their 
apple ecosystem of products. 

552
00:26:48,800 --> 00:26:51,500
I think that's all the better. 
So we'll see what happens. 

553
00:26:51,500 --> 00:26:54,200
I'm personally excited about it.
I think Apple has good odds of 

554
00:26:54,200 --> 00:26:57,000
making this work, but it's not 
something core to my thesis. 

555
00:26:57,200 --> 00:26:59,300
Now, that's all for this update.
I hope you enjoyed the show. 

556
00:26:59,400 --> 00:27:00,700
Show, and I'll see you in the 
next one. 

557
00:26:59,400 --> 00:27:00,700
Show, and I'll see you in the 
next one.