1 00:00:00,040 --> 00:00:02,040 Welcome back everyone. Today on the Joseph Carlson 2 00:00:02,040 --> 00:00:03,840 Show. This earnings season is coming 3 00:00:03,840 --> 00:00:06,600 to a close and some of my companies, in fact some of my 4 00:00:06,600 --> 00:00:09,720 biggest holdings, just recently reported earnings, one of them 5 00:00:09,720 --> 00:00:12,800 being SP Global, which is up 7% today. 6 00:00:13,000 --> 00:00:15,720 After their report, we also can't forget about Apple. 7 00:00:15,720 --> 00:00:18,200 This stock was in the green today, but they just barely 8 00:00:18,200 --> 00:00:20,720 reported earnings. Apple's also a large holding in 9 00:00:20,720 --> 00:00:23,280 My Portfolio and it's one that I've been in for years. 10 00:00:23,280 --> 00:00:25,640 I've been emphatical about this company and the value that it 11 00:00:25,640 --> 00:00:28,480 presents to consumers and as an investment, and this has 12 00:00:28,480 --> 00:00:30,280 routinely been one of the biggest winners in the 13 00:00:30,280 --> 00:00:32,640 portfolio. Apple is a massive company with 14 00:00:32,640 --> 00:00:35,240 lots of different numbers and different metrics to track. 15 00:00:35,480 --> 00:00:38,320 So in this earnings report I'll be going over what I think are 16 00:00:38,320 --> 00:00:41,360 the key metrics, the biggest things that I'm looking for. 17 00:00:41,400 --> 00:00:42,880 And we also have some other news to get to. 18 00:00:42,960 --> 00:00:45,800 The Target CEO went on to CNBC and he tried to explain the 19 00:00:45,800 --> 00:00:49,480 company's underperformance and why the consumer is slowing down 20 00:00:49,480 --> 00:00:52,800 in discretionary spending. He blames the overall economy 21 00:00:52,800 --> 00:00:55,840 and consumer preferences, but there's a problem with the 22 00:00:55,840 --> 00:00:59,560 Target CEO's excuse. There's a lot of contrary data 23 00:00:59,560 --> 00:01:03,320 and I want to highlight why I see problems with his interview. 24 00:01:03,320 --> 00:01:06,360 We also had an Apple event. It was the scary fast Apple 25 00:01:06,360 --> 00:01:08,520 event where they talked about their Max and as you would 26 00:01:08,520 --> 00:01:10,880 expect, Apple takes you underground to their awesome 27 00:01:10,880 --> 00:01:13,400 offices that have incredibly cool lighting. 28 00:01:13,600 --> 00:01:16,560 You have all these these really cool sets that they film from. 29 00:01:16,760 --> 00:01:20,280 Well, Apple revealed at the very end of this event, something 30 00:01:20,280 --> 00:01:22,520 that I think was the most important thing of the entire 31 00:01:22,520 --> 00:01:26,840 event itself, and that was that the event was shot on an iPhone 32 00:01:26,880 --> 00:01:30,200 and edited on a Mac. The whole event, this entire 33 00:01:30,200 --> 00:01:32,200 thing was shot on an iPhone all along. 34 00:01:32,200 --> 00:01:34,760 And this has actually spurred a lot of controversy. 35 00:01:34,760 --> 00:01:37,360 And the controversy is the extra equipment they used. 36 00:01:37,360 --> 00:01:39,640 A lot of people are saying that they use so much lighting and 37 00:01:39,640 --> 00:01:42,560 they use so many different tools that it makes the iPhone part of 38 00:01:42,560 --> 00:01:44,840 it not as impressive. Some people even go as far as 39 00:01:44,840 --> 00:01:47,400 saying that this is wrong, that Apple's misrepresenting the 40 00:01:47,400 --> 00:01:49,600 iphone's capabilities. So we'll be looking at this 41 00:01:49,600 --> 00:01:52,200 controversy and how impressive this really is for Apple. 42 00:01:52,200 --> 00:01:54,000 Now, that's not where the Internet drama ends. 43 00:01:54,000 --> 00:01:56,040 We also have a debate raging on TikTok. 44 00:01:56,080 --> 00:01:59,120 In this case, it's a list that some user came up with, that 45 00:01:59,120 --> 00:02:02,720 these places are not OK to take a girl on the first date. 46 00:02:02,720 --> 00:02:04,400 And we have the entire list right here. 47 00:02:04,760 --> 00:02:07,240 It includes places like Cheesecake Factory, Applebee's 48 00:02:07,240 --> 00:02:08,840 and Chili's. We have a lot of other 49 00:02:08,840 --> 00:02:12,280 restaurants and then different activities that are listed up to 50 00:02:12,280 --> 00:02:14,960 28 different events. Now there's a lot of opinions on 51 00:02:14,960 --> 00:02:16,440 this. So we'll be settling this debate 52 00:02:16,480 --> 00:02:18,160 once and for all. So we have a lot to get to. 53 00:02:18,200 --> 00:02:19,320 Let's go ahead and jump right in. 54 00:02:19,320 --> 00:02:22,240 Now, one thing I have to mention first, if you haven't tried out 55 00:02:22,240 --> 00:02:24,760 the Patreon membership, today is the day to do it. 56 00:02:24,760 --> 00:02:28,480 The Patreon gives you access to qualtrum.com, this website that 57 00:02:28,480 --> 00:02:30,760 I built for stock fundamental analysis. 58 00:02:31,000 --> 00:02:32,800 You can bring up any company like Google. 59 00:02:32,800 --> 00:02:34,400 You can see all of the fundamentals. 60 00:02:34,640 --> 00:02:37,440 You can blow up the revenue and see the compound annual growth 61 00:02:37,440 --> 00:02:39,040 rate over longer periods of time. 62 00:02:39,480 --> 00:02:42,160 You can zoom in to different time periods and see everything 63 00:02:42,160 --> 00:02:44,040 visually. And it does show you an overview 64 00:02:44,040 --> 00:02:46,760 of how the company's doing with all of its core fundamentals. 65 00:02:46,760 --> 00:02:48,480 Qualtrum also comes with a list of tools. 66 00:02:48,480 --> 00:02:50,600 For example, we have an advanced watch list. 67 00:02:50,840 --> 00:02:53,800 It shows you the dip Finder. It'll tell you which companies 68 00:02:53,800 --> 00:02:56,360 are currently on a dip, which ones are in a price surge. 69 00:02:56,400 --> 00:02:59,120 It has a portfolio analysis tool that will show you a lot of 70 00:02:59,120 --> 00:03:01,520 different metrics about your dividend growth, your portfolio 71 00:03:01,520 --> 00:03:04,800 by sector and allocation, your win and loss based on your 72 00:03:04,800 --> 00:03:07,560 holdings and so on. And it has a beautiful dark mode 73 00:03:07,560 --> 00:03:09,680 for those of you that browse your stocks at night. 74 00:03:09,680 --> 00:03:11,680 If you join today, you get the entire month for free. 75 00:03:11,680 --> 00:03:14,040 That gives you time to try it out, and I think you'll love it. 76 00:03:14,040 --> 00:03:15,760 There's a link to it in the PIN comment below. 77 00:03:15,760 --> 00:03:18,080 Now let's go ahead and start off with Apple, which is a very 78 00:03:18,080 --> 00:03:19,880 important holding to My Portfolio. 79 00:03:20,120 --> 00:03:23,400 The company just reported earnings today and on the day it 80 00:03:23,400 --> 00:03:25,560 was up 2% with the rest of the market. 81 00:03:25,920 --> 00:03:29,120 And after this earnings report, the immediate reaction is a less 82 00:03:29,120 --> 00:03:32,600 than 1% trade down. So it's pretty flattish on the 83 00:03:32,600 --> 00:03:34,760 day. We have a minor trade down and 84 00:03:34,760 --> 00:03:37,120 this is what I expected, an inline quarter. 85 00:03:37,120 --> 00:03:39,920 We have all the major segments of Apple's business highlighted 86 00:03:39,920 --> 00:03:41,400 here. And what I did was I highlighted 87 00:03:41,400 --> 00:03:45,200 the parts that beat expectations in green, the parts that came 88 00:03:45,200 --> 00:03:48,320 under expectations in red. The earnings per share was a 89 00:03:48,320 --> 00:03:50,240 strong beat. The revenue was a beat. 90 00:03:50,320 --> 00:03:53,360 The iPhone revenue was a beat. The Mac revenue came in under. 91 00:03:53,440 --> 00:03:56,720 The iPad revenue was a beat. Wearables revenue was slightly 92 00:03:56,720 --> 00:03:59,320 under. I'd say that's mostly in line to 93 00:03:59,360 --> 00:04:02,080 a slight miss. The services revenue, which I 94 00:04:02,080 --> 00:04:05,120 continue to believe is the most important part of this company 95 00:04:05,120 --> 00:04:08,600 right now, that was a beat. And then the gross margins was 96 00:04:08,600 --> 00:04:11,760 also a strong beat. So this wasn't perfect across 97 00:04:11,760 --> 00:04:13,760 the board, but this was pretty good. 98 00:04:13,760 --> 00:04:16,920 They beat on the top and bottom line and in most segments of 99 00:04:16,920 --> 00:04:19,519 their hardware. Most importantly, again, I 100 00:04:19,519 --> 00:04:22,640 emphasize the service revenue. Everyone has their different 101 00:04:22,640 --> 00:04:25,000 ways of analyzing Apple. But the way that I've looked at 102 00:04:25,000 --> 00:04:29,200 this company all along is as a consumer, defensive company, an 103 00:04:29,200 --> 00:04:32,840 entire circular ecosystem of products that once you start 104 00:04:32,840 --> 00:04:35,640 getting in this ecosystem and you get the Apple Watch and the 105 00:04:35,640 --> 00:04:39,640 Airpods and the iPads and the Macbooks, once you start getting 106 00:04:39,640 --> 00:04:43,720 all of those devices, you start inevitably using the services, 107 00:04:43,840 --> 00:04:47,240 the credit card and Apple Pay. I message FaceTime. 108 00:04:47,320 --> 00:04:50,080 You'll probably start paying for iCloud for all of the photos 109 00:04:50,080 --> 00:04:52,440 you're taking and on and on and on. 110 00:04:52,440 --> 00:04:54,880 Apple sells service after service. 111 00:04:55,160 --> 00:04:58,080 When you have all of this hardware on top of all of this 112 00:04:58,080 --> 00:05:02,280 software, all integrated firmly together, it forms this very 113 00:05:02,280 --> 00:05:05,400 strong ecosystem. That ecosystem is their Moat. 114 00:05:05,400 --> 00:05:06,920 It's their competitive advantage. 115 00:05:06,920 --> 00:05:10,280 It's their barriers to entry. The stronger the ecosystem is, 116 00:05:10,360 --> 00:05:13,400 the stronger the investment case for Apple is and the more ways 117 00:05:13,400 --> 00:05:16,680 they have to monetize users within that ecosystem. 118 00:05:16,720 --> 00:05:19,520 We can go down and look at the total revenue of Apple and this 119 00:05:19,520 --> 00:05:21,360 is what most investors are looking at. 120 00:05:21,480 --> 00:05:24,520 Last quarter was slightly under where it was the quarter a year 121 00:05:24,520 --> 00:05:26,480 ago. We have sales decline now if we 122 00:05:26,480 --> 00:05:29,560 breakdown Apple by product category, we can see which part 123 00:05:29,560 --> 00:05:32,760 of the company's in decline over the past year and what part's 124 00:05:32,760 --> 00:05:35,080 growing. We can, for example, see how Mac 125 00:05:35,080 --> 00:05:38,560 sales, specifically Mac sales are doing quarter by quarter. 126 00:05:38,880 --> 00:05:42,680 We can see that during 2020, Apple certainly had some pull 127 00:05:42,680 --> 00:05:45,680 forward in their Mac sales. Lots of people are getting 128 00:05:45,680 --> 00:05:47,680 stimulus checks. Lots of businesses were getting 129 00:05:47,680 --> 00:05:50,080 PPP loans. What do we think they all did 130 00:05:50,080 --> 00:05:52,440 with those stimmy checks and with the PPP loans? 131 00:05:52,720 --> 00:05:54,600 They bought Macbooks for their employees. 132 00:05:54,600 --> 00:05:56,760 They bought them for their work at Home Office. 133 00:05:56,880 --> 00:06:00,280 So we're seeing a decline in Mac sales over the past year. 134 00:06:00,320 --> 00:06:03,000 That's a little bit expected. If we look at the wearables, 135 00:06:03,000 --> 00:06:05,640 this is also grown during 2020, but it's been a bit more 136 00:06:05,640 --> 00:06:08,040 resilient. The iPad shows a similar trend. 137 00:06:08,080 --> 00:06:11,680 Lots of people started buying them around 2020 and it's mostly 138 00:06:11,680 --> 00:06:13,680 held its own. It's slowing down a little bit 139 00:06:13,680 --> 00:06:16,640 over the past quarter. The iPhone, their biggest device 140 00:06:16,640 --> 00:06:20,280 has been their most resilient, growing in 2020, also growing in 141 00:06:20,280 --> 00:06:22,960 2021 and holding strong into this quarter. 142 00:06:22,960 --> 00:06:25,400 But more important than all is the services of the company. 143 00:06:25,400 --> 00:06:28,440 These green bars here represent the highest margin portion of 144 00:06:28,440 --> 00:06:31,400 Apple where they make money off of all the subscriptions they 145 00:06:31,400 --> 00:06:34,760 sell, all the insurances and all the transactions that happen 146 00:06:34,760 --> 00:06:37,400 through the Apple store. This is the tollbooth of Apple 147 00:06:37,400 --> 00:06:40,400 that's well protected and insulated by their ecosystem. 148 00:06:40,720 --> 00:06:42,920 We can see the growth of this overtime as well. 149 00:06:43,040 --> 00:06:46,760 Back in 2018 the services were just over $10 billion, now 150 00:06:46,760 --> 00:06:49,440 they're over 20 billion, so they've doubled over that time 151 00:06:49,440 --> 00:06:51,280 period. The services in this most recent 152 00:06:51,280 --> 00:06:55,080 quarter grew again to 22.31 billion, so a noticeable growth 153 00:06:55,120 --> 00:06:57,480 over the previous year and the past quarter. 154 00:06:57,520 --> 00:06:59,800 The rest of Apple's business is slightly cyclical. 155 00:06:59,800 --> 00:07:02,640 The harbor sales come and go but the service revenue is far more 156 00:07:02,640 --> 00:07:04,680 secular. This last quarter's earnings per 157 00:07:04,680 --> 00:07:07,480 share would put the bar right around there. 158 00:07:07,520 --> 00:07:10,320 So a nice improvement over the previous year, mostly due to 159 00:07:10,320 --> 00:07:12,360 Apple being all to buy back a lot of their shares. 160 00:07:12,600 --> 00:07:15,120 They said on this most recent earnings report that their 161 00:07:15,120 --> 00:07:18,560 active install base has again reached an all new high across 162 00:07:18,560 --> 00:07:21,840 all geographic segments and they attribute that to their 163 00:07:21,840 --> 00:07:24,560 ecosystem and unparalleled customer loyalty. 164 00:07:24,800 --> 00:07:27,560 I think they're being truthful in that people are in the Apple 165 00:07:27,560 --> 00:07:29,280 ecosystem and they're not leaving. 166 00:07:29,760 --> 00:07:32,320 During the September quarter, our business performance drove 167 00:07:32,320 --> 00:07:35,480 double digit earnings per share growth and we returned nearly 168 00:07:35,480 --> 00:07:39,360 $25 billion to shareholders while continuing to invest in 169 00:07:39,360 --> 00:07:43,440 our long term growth plans. So a $25 billion dividend and 170 00:07:43,440 --> 00:07:46,000 buy back in this quarter. I believe there's two main 171 00:07:46,000 --> 00:07:48,160 takeaways in this latest Apple report. 172 00:07:48,400 --> 00:07:51,320 The first thing is that the ecosystem is in good standing 173 00:07:51,520 --> 00:07:54,600 and that should be music to the Apple shareholders heirs. 174 00:07:54,920 --> 00:07:58,560 The ecosystem again is the most important part of the Moat of 175 00:07:58,560 --> 00:08:01,400 the barriers to entry. As long as they can maintain 176 00:08:01,520 --> 00:08:05,120 their ecosystem and grow that ecosystem, Apple shareholders 177 00:08:05,120 --> 00:08:08,440 will reap the rewards and it's getting stronger by the day. 178 00:08:08,480 --> 00:08:11,840 They're active install base of devices reached an all new high 179 00:08:11,840 --> 00:08:15,480 and all geographies that is a very positive development in 180 00:08:15,480 --> 00:08:18,760 terms of the Apple mode. The second thing is that the 181 00:08:18,760 --> 00:08:22,760 most important segment of Apple, the highest margin portion of 182 00:08:22,760 --> 00:08:27,560 Apple, the Apple services grew at 16% year over year. 183 00:08:27,960 --> 00:08:31,880 So underneath the surface of the gloomy year over year decline in 184 00:08:31,880 --> 00:08:36,120 revenue, you have a nice juicy business growing in double 185 00:08:36,120 --> 00:08:38,120 digits, in fact, in the high teens. 186 00:08:38,280 --> 00:08:42,000 Getting people in the ecosystem and keeping them happy there is 187 00:08:42,000 --> 00:08:43,799 the way they'll profit in the future. 188 00:08:43,919 --> 00:08:47,000 As long as Apple can continue to do that, which this report shows 189 00:08:47,000 --> 00:08:50,320 they can, they'll continue to give good shareholder returns. 190 00:08:50,480 --> 00:08:54,200 Now am I going out of my way to actively buy ale hair hand over 191 00:08:54,200 --> 00:08:56,120 fist? No, I'm not right now. 192 00:08:56,120 --> 00:08:59,360 I think it's mostly fair valued. I think the stock has more 193 00:08:59,360 --> 00:09:02,840 upside in it, but with the holding that I have already, I'm 194 00:09:02,840 --> 00:09:05,040 not in a position where I want to go out and buy a lot more 195 00:09:05,040 --> 00:09:07,080 Apple. I was buying the company at 196 00:09:07,080 --> 00:09:10,400 $90.00 per share and 1:20, and if we do get a dip in the 197 00:09:10,400 --> 00:09:13,320 company, I'll buy more of it. But as of right now I consider 198 00:09:13,320 --> 00:09:15,720 Apple a hold. Now another huge company in My 199 00:09:15,720 --> 00:09:18,800 Portfolio that recently reported earnings is S&P Global. 200 00:09:19,000 --> 00:09:21,960 This company I've talked about routinely as being a compounder, 201 00:09:21,960 --> 00:09:26,240 having a diversified set of businesses within its name, and 202 00:09:26,240 --> 00:09:28,280 all of them are high quality businesses. 203 00:09:28,720 --> 00:09:30,560 So I have high expectations for this company. 204 00:09:30,800 --> 00:09:34,520 They recently reported earnings. They're U-7 on the day because 205 00:09:34,520 --> 00:09:37,280 they beat expectations. Now, I'm not going to spend a 206 00:09:37,280 --> 00:09:39,680 lot of time on this earnings result because I've gone over 207 00:09:39,840 --> 00:09:43,600 and global in detail in numerous episodes, but I just want to 208 00:09:43,600 --> 00:09:45,960 highlight a couple things here. First of all, the earnings per 209 00:09:45,960 --> 00:09:49,440 share grew 10% year over year, strong growth in EPS and the 210 00:09:49,440 --> 00:09:52,160 revenue increased 8%. We can look at this chart here 211 00:09:52,160 --> 00:09:54,200 to get a breakdown of the different segments of the 212 00:09:54,200 --> 00:09:56,680 business. The market intelligence grew 8%, 213 00:09:56,680 --> 00:10:01,920 ratings grew 20%, Commodity insights 11%, mobility 10%, and 214 00:10:01,920 --> 00:10:05,760 the indices portion 6%. Overall, in aggregate and 215 00:10:05,760 --> 00:10:08,480 weighted by the business segments, that's 8% growth. 216 00:10:08,840 --> 00:10:10,880 You can look at the margins of these businesses. 217 00:10:11,200 --> 00:10:14,160 These are all high margin businesses diving into the 218 00:10:14,160 --> 00:10:16,560 report even more. It's as boring as you would 219 00:10:16,560 --> 00:10:18,720 expect. The CEO of the company 220 00:10:18,720 --> 00:10:21,400 reiterated their previous guidance that they've reiterated 221 00:10:21,400 --> 00:10:23,560 before that they've reiterated before. 222 00:10:23,880 --> 00:10:26,280 They're very good at making projections and they've held 223 00:10:26,280 --> 00:10:29,040 firm to those projections the entire year. 224 00:10:29,480 --> 00:10:32,680 So there should be no surprises with S&P Global. 225 00:10:32,800 --> 00:10:35,640 They're doing exactly what they said they would do earlier this 226 00:10:35,640 --> 00:10:36,920 year. So the two companies that 227 00:10:36,920 --> 00:10:40,240 reported today did really well. And overall I've had a great 228 00:10:40,240 --> 00:10:42,800 earning season. I've avoided any type of 229 00:10:42,800 --> 00:10:46,320 disaster with my companies. None of them have dropped 10 or 230 00:10:46,320 --> 00:10:49,160 20% like you're seeing with a lot of other lower quality 231 00:10:49,160 --> 00:10:51,360 companies. And I attribute this success and 232 00:10:51,360 --> 00:10:54,680 earning season to the quality selection of the companies in 233 00:10:54,680 --> 00:10:57,080 this portfolio. We can go through just some of 234 00:10:57,080 --> 00:10:59,760 the numbers here. S&B Global grew by 8%, 235 00:10:59,760 --> 00:11:03,720 MasterCard by 13%, Microsoft grew by 13%. 236 00:11:03,920 --> 00:11:06,520 Apple's revenue was flat, but their net income grew by double 237 00:11:06,520 --> 00:11:09,520 digits and the company's services are growing by 16%. 238 00:11:09,520 --> 00:11:13,240 Texas Roadhouse grew by 14%, Chipotle by 11%. 239 00:11:13,320 --> 00:11:15,800 Now, Costco hasn't given their official report yet, but they 240 00:11:15,800 --> 00:11:17,840 released sales results every single month and they're 241 00:11:17,840 --> 00:11:19,360 trending up like they always have. 242 00:11:19,440 --> 00:11:24,200 VG grew its revenue by over 20% and it's AFFO per share by 11%. 243 00:11:24,360 --> 00:11:27,440 Strong growth out of VG as well. Well, Canadian Pacific is 244 00:11:27,440 --> 00:11:30,440 growing fast after the merger and Union Pacific is one of the 245 00:11:30,440 --> 00:11:32,840 only companies that's struggling with revenue growth. 246 00:11:32,960 --> 00:11:35,360 The railroads have been the slowest part of My Portfolio the 247 00:11:35,360 --> 00:11:38,280 entire year, but being flat on them hasn't been too bad. 248 00:11:38,280 --> 00:11:40,680 When I look at My Portfolio overall, having this 249 00:11:40,680 --> 00:11:43,920 concentrated group of high quality companies has led to 250 00:11:43,920 --> 00:11:45,960 really good results this earning season. 251 00:11:46,200 --> 00:11:48,520 And I think if I stick with these type of companies, I'll 252 00:11:48,520 --> 00:11:51,000 continue to see the games. Now moving on, we get to an 253 00:11:51,000 --> 00:11:54,800 interview of the CEO of Target. He went on to CNBC to explain 254 00:11:55,120 --> 00:11:58,000 what he believes are the problems that Target is facing. 255 00:11:58,000 --> 00:12:01,120 Now keep in mind, during this time period Target's not having 256 00:12:01,120 --> 00:12:03,480 a good year. The company is massively 257 00:12:03,480 --> 00:12:05,080 underperforming the broader market. 258 00:12:05,240 --> 00:12:09,040 It's down 26% year to date. The financial performance has 259 00:12:09,040 --> 00:12:12,160 also looked pretty grim and during difficult times with 260 00:12:12,160 --> 00:12:14,200 companies. What I like to see from the 261 00:12:14,200 --> 00:12:18,560 management is leadership, true leadership, which is properly 262 00:12:18,560 --> 00:12:21,920 identifying the problems the company's facing, even if the 263 00:12:21,920 --> 00:12:25,280 company is at fault. If the company's underperforming 264 00:12:25,280 --> 00:12:29,000 because of poor execution or self-made errors, then they 265 00:12:29,000 --> 00:12:32,680 should identify that what we see here from the target CEOI 266 00:12:32,680 --> 00:12:35,160 believe is something different. Meaning they're they're buying 267 00:12:35,160 --> 00:12:38,200 less stuff, they're buying less stuff even within food and 268 00:12:38,200 --> 00:12:40,640 beverage. Again, we look at overall retail 269 00:12:40,640 --> 00:12:42,200 spending, just look at the top line. 270 00:12:42,200 --> 00:12:44,280 You say, all right, a really healthy consumer and they are 271 00:12:44,280 --> 00:12:47,240 spending. But even in food and beverage 272 00:12:47,240 --> 00:12:50,960 categories over the last few quarters, the units, the number 273 00:12:50,960 --> 00:12:53,000 of items they're buying has been declining. 274 00:12:53,360 --> 00:12:55,480 So they're even tightening up their spending in those 275 00:12:55,480 --> 00:12:58,360 categories. But in discretionary goods, 276 00:12:58,720 --> 00:13:03,880 we've seen 7 consecutive quarters of both dollars and 277 00:13:03,880 --> 00:13:07,680 units declining. So you're buying less apparel, 278 00:13:08,360 --> 00:13:10,840 less items for your home, fewer toys. 279 00:13:11,240 --> 00:13:13,000 You're seeing some of the pressure in those categories. 280 00:13:13,360 --> 00:13:14,880 Now those cycles are going to change. 281 00:13:14,880 --> 00:13:19,240 And you've been reporting about categories like toys seeing 282 00:13:19,240 --> 00:13:21,920 pretty significant declines. He mentions that for seven 283 00:13:21,920 --> 00:13:25,320 consecutive quarters, consumer discretionary spending has been 284 00:13:25,320 --> 00:13:28,200 in decline. So consumers are no longer 285 00:13:28,200 --> 00:13:31,040 spending on discretionary items at Target. 286 00:13:31,040 --> 00:13:33,400 What I wanted to figure out was how much of this is overall 287 00:13:33,400 --> 00:13:36,280 economics and how much of this is specific to Target. 288 00:13:36,360 --> 00:13:38,040 We have some conflicting evidence here. 289 00:13:38,280 --> 00:13:41,520 For example, the first day of Prime Day this year, the most 290 00:13:41,520 --> 00:13:46,240 recent Prime Day just in July was a record for Amazon record 291 00:13:46,240 --> 00:13:50,880 spending on Prime Day in 2023. Amazon mentions the top selling 292 00:13:50,880 --> 00:13:55,040 deals on their Prime Day, the Fire TV Stick, Lanage, Lip Glowy 293 00:13:55,040 --> 00:13:57,680 Bomb Airpods and the Bizzle Carpet Cleaner. 294 00:13:57,680 --> 00:13:59,880 These items sound very discretionary and if you go 295 00:13:59,880 --> 00:14:03,000 through the rest of the items, most of these I would categorize 296 00:14:03,000 --> 00:14:05,600 as discretionary. So Amazon doesn't seem to be 297 00:14:05,600 --> 00:14:08,000 having the same issue with discretionary spending. 298 00:14:08,160 --> 00:14:10,680 We also had Netflix gaining 9,000,000 subscribers. 299 00:14:10,800 --> 00:14:13,640 Spotify reached an all time high as well and their subscriber 300 00:14:13,640 --> 00:14:15,880 base. Consumers seem to be spending on 301 00:14:15,880 --> 00:14:18,000 these subscriptions. I could also name off companies 302 00:14:18,000 --> 00:14:20,520 like Starbucks. It's up 10% after earnings 303 00:14:20,520 --> 00:14:22,760 today. Is Starbucks discretionary? 304 00:14:22,760 --> 00:14:25,680 Do people really need Starbucks? I consider it sort of 305 00:14:25,680 --> 00:14:28,480 discretionary, but it seems like they're doing just fine. 306 00:14:28,480 --> 00:14:30,720 I believe what we're seeing here is really important. 307 00:14:30,720 --> 00:14:33,040 We're having it revealed which companies are really 308 00:14:33,040 --> 00:14:36,440 discretionary and which ones aren't, what products customers 309 00:14:36,440 --> 00:14:38,160 will give up and which ones they won't. 310 00:14:38,480 --> 00:14:41,120 We get to see that clearly illustrated over the next six 311 00:14:41,120 --> 00:14:42,680 months. Now moving on, we have a 312 00:14:42,680 --> 00:14:47,040 controversy brewing, a debate over the shot on iPhone of the 313 00:14:47,040 --> 00:14:49,920 Apple scary fast event. Now, if you're out of the loop, 314 00:14:49,920 --> 00:14:53,920 Apple just recently had an Apple event like they normally do, and 315 00:14:53,920 --> 00:14:55,960 it looks like it's professionally shot. 316 00:14:55,960 --> 00:14:59,240 In fact, during the event, no one was the wiser. 317 00:14:59,240 --> 00:15:02,920 No one had any idea that the entire event was filmed by an 318 00:15:02,920 --> 00:15:04,480 iPhone. And the reason why is because it 319 00:15:04,480 --> 00:15:07,160 looks professionally produced. It looks indistinguishable from 320 00:15:07,160 --> 00:15:10,480 any other Apple event. Now of course, the big secret 321 00:15:10,480 --> 00:15:13,760 here, the reason this looks so good and indistinguishable, is 322 00:15:13,760 --> 00:15:16,120 because of all the other stuff that Apple does to help out the 323 00:15:16,120 --> 00:15:17,840 production. They have a giant balancing 324 00:15:17,840 --> 00:15:19,400 gimbal to make everything look smooth. 325 00:15:19,400 --> 00:15:21,720 And of course, they have incredibly expensive and amazing 326 00:15:21,720 --> 00:15:24,120 lighting. The combination of set design, 327 00:15:24,120 --> 00:15:27,200 the gimbal and the lighting create an amazing production 328 00:15:27,200 --> 00:15:30,360 where it looks studio quality, even filmed on an iPhone. 329 00:15:30,360 --> 00:15:33,120 So some people are trying to discredit or at least downplay 330 00:15:33,120 --> 00:15:36,400 the effect of the iPhone filming it because it had so much other 331 00:15:36,400 --> 00:15:38,480 equipment. In reality, Apple has always 332 00:15:38,480 --> 00:15:41,040 used expensive production design and everything they've done. 333 00:15:41,280 --> 00:15:44,640 The fact that they were able to swap out a big professional 334 00:15:44,640 --> 00:15:48,240 camera with the iPhone and make it so nobody can notice until 335 00:15:48,240 --> 00:15:50,680 after the event, that is impressive. 336 00:15:51,000 --> 00:15:53,640 And even the people that are haters trying to downplay it 337 00:15:53,720 --> 00:15:56,400 have to believe that that's impressive, that you cannot tell 338 00:15:56,400 --> 00:15:59,200 this was filmed by an iPhone. This proves that phone cameras 339 00:15:59,200 --> 00:16:02,240 are so good and with proper lighting, with a little bit of 340 00:16:02,240 --> 00:16:05,240 set design you can make a professional looking production 341 00:16:05,320 --> 00:16:07,560 with a phone camera. Now, finally, we move on to 342 00:16:07,560 --> 00:16:10,640 another debate raging right now. It's in the cultural zeitgeist. 343 00:16:10,640 --> 00:16:14,200 It's the debate raging on Twitter and on Tiktok. 344 00:16:14,560 --> 00:16:17,000 And it's over. This list that someone came up 345 00:16:17,000 --> 00:16:20,400 with somewhere of different events or different places. 346 00:16:20,920 --> 00:16:23,000 But you cannot take someone on your first date. 347 00:16:23,320 --> 00:16:25,040 And I have the complete list right here. 348 00:16:25,040 --> 00:16:26,400 So let's go ahead and go through this list. 349 00:16:26,400 --> 00:16:29,080 We have The Cheesecake Factory. Can't take a date there. 350 00:16:29,440 --> 00:16:30,840 Applebee's. Chili's. 351 00:16:30,920 --> 00:16:33,040 Chipotle. Olive Garden, The movies, Your 352 00:16:33,040 --> 00:16:35,000 house. Any fast food chain. 353 00:16:35,360 --> 00:16:37,240 So any fast food chain is off limits. 354 00:16:37,240 --> 00:16:38,840 Buffalo Wild Wings. Wingstop. 355 00:16:38,840 --> 00:16:40,640 Red Lobster. A buffet. 356 00:16:40,720 --> 00:16:41,920 IHOP. Denny's. 357 00:16:41,920 --> 00:16:43,000 The gym. Church. 358 00:16:43,160 --> 00:16:44,640 Starbucks. Coffee. 359 00:16:44,640 --> 00:16:45,680 Dates. Ice cream. 360 00:16:45,760 --> 00:16:48,200 Family functions. Movie nights, Somewhere that 361 00:16:48,200 --> 00:16:52,000 requires a long drive, bowling, nightclubs, hookah bar, a bar 362 00:16:52,000 --> 00:16:54,840 for just drinks, the Waffle House and sport events. 363 00:16:55,200 --> 00:16:58,720 That is all 28 places apparently that you can't take a date. 364 00:16:58,840 --> 00:17:01,960 Now when I look over this, the answer that's left the obvious 365 00:17:01,960 --> 00:17:05,520 place that you can still take a date on the first date is Texas 366 00:17:05,520 --> 00:17:07,040 Roadhouse. It wasn't on the list. 367 00:17:07,119 --> 00:17:09,560 Technically it was not on the list, so I'm going to throw in 368 00:17:09,560 --> 00:17:11,960 Texas Roadhouse there. Apparently that's OK to take a 369 00:17:11,960 --> 00:17:15,359 date on your first date. Now, in all seriousness, when I 370 00:17:15,359 --> 00:17:19,000 see this type of list passed around, the idea that a girl 371 00:17:19,000 --> 00:17:22,160 would not be willing to go to The Cheesecake Factory on a 372 00:17:22,160 --> 00:17:25,640 first date to me is insane. That's crazy. 373 00:17:26,000 --> 00:17:29,720 The one thing that I think that that would serve useful as is if 374 00:17:29,720 --> 00:17:33,560 I was going to take a girl on a first date and she refused to go 375 00:17:33,560 --> 00:17:36,520 to The Cheesecake Factory because that wasn't up to her 376 00:17:36,520 --> 00:17:39,240 standards, that would be very informative. 377 00:17:39,360 --> 00:17:41,320 I would have gained a lot of new information. 378 00:17:41,400 --> 00:17:43,720 The information that I gained there is that this is not a 379 00:17:43,720 --> 00:17:46,440 person I want to be dating. Now some of these I do agree 380 00:17:46,440 --> 00:17:48,480 with. Fast food chains are probably 381 00:17:48,480 --> 00:17:50,000 not a good idea for a first date. 382 00:17:50,320 --> 00:17:52,640 Your house is also probably not a good idea. 383 00:17:53,080 --> 00:17:55,040 Going to church on a first date's a little much. 384 00:17:55,040 --> 00:17:56,640 Going to the gym is really weird. 385 00:17:56,800 --> 00:17:59,560 Going to family functions could wait until a second or third day 386 00:17:59,560 --> 00:18:01,400 at least. So some of these I do agree 387 00:18:01,400 --> 00:18:03,160 with. But overall this list is 388 00:18:03,160 --> 00:18:06,200 ridiculous and the most ridiculous one I believe is The 389 00:18:06,200 --> 00:18:08,520 Cheesecake Factory. I say this is someone who has 390 00:18:08,520 --> 00:18:09,960 been married for 10 years strong. 391 00:18:10,000 --> 00:18:12,360 If a girl doesn't want to go on a date to The Cheesecake Factory 392 00:18:12,360 --> 00:18:15,280 because it's not up to her standards, I think that's a 393 00:18:15,280 --> 00:18:18,280 major red flag I would avoid. That's all for this episode. 394 00:18:18,280 --> 00:18:20,600 If you want to see more content, check out the Patreon in the 395 00:18:20,600 --> 00:18:21,240 link below.