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Welcome everyone. 
Today on the Joseph Carlson 

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show. 
We have a lot of news Walmart's 

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earnings came in and they were 
very underwhelming. 

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That's what the headlines say 
shares today are just getting 

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crushed their down, nine point, 
six three percent. 

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So investors were really 
disappointed by these earnings. 

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So I want to dive in deeper to 
this Walmart earnings report and

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I actually went ahead and 
annotated a lot of, I think the 

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most important things to look at
Walmart does have some 

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weaknesses right now that I 
think need to be factored in. 

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Now, we have Home Depot doing 
something a bit different, they 

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beat their earnings per share. 
Ash are estimates and they beat 

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their revenue estimates and 
likewise with Home Depot. 

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I went ahead an annotated their 
earnings report as well. 

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And then, lastly, I also want to
give an update on Berkshire, 

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Hathaway's official, 13f filing 
with this filing. 

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We get a clear. 
Look at everything that Warren 

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Buffett did last quarter 
including adding to his 

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portfolio, Paramount, plus 
Citigroup Ally Financial and 

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importantly, we get to see the 
things that he decided to sell 

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out of you sold a lot of his 
store Capital. 

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You sold almost entirely out of 
his Verizon holding. 

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You sold it. 
Blow the big Pharma companies 

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and then he exited Wells Fargo 
in place for Citigroup. 

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So we'll be going over all of 
these changes in this episode. 

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Now, welcome back again. 
Everyone. 

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It's been almost a week since my
previous upload and the 

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portfolio hasn't done too much 
over the past week. 

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In fact, it's basically flat. 
It's up point four percent, but 

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it's actually been a very 
volatile week. 

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There's Been ten thousand dollar
plus swings over that time line.

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So we're weathering some 
volatility overall, the market 

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continues to go down and the 
one-week viewer up point for 3%.

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That's okay. 
And the one-month viewer down 

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8%. 
So we're still down big over the

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previous month, but regardless, 
that's not really what I focus 

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on and I know that this is a 
little bit different. 

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Everyone is focused in a bear 
Market on macroeconomics. 

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Everyone becomes experts on 
upcoming recessions, inflation, 

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food prices, commodity prices. 
Everyone's focused on issues in 

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China. 
What I'm focused on what I 

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continually focus on is the 
businesses that I own their 

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actual fundamentals. 
Their quality of earnings and 

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their future growth prospects. 
Even putting aside how terrible 

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this bear Market has been every 
single company. 

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In my portfolio that is a 
dividend pair has continued to 

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pay dividends as scheduled. 
They're still continuing to 

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provide me passive income. 
We have JPMorgan paying $150. 

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We have apple paying me $77 
Costco's paying me $64 Costco. 

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At some point in time in the 
future will likely to disclose 

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that they're going to do a 
special dividend because there 

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simply to cash flow positive. 
Positive. 

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This stream of passive dividend 
income is something that I've 

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tracked for over the past three 
years, I built it up from 0 to 

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now averaging around $600 a 
month. 

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So what I've built over this 
entire time period is a 

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portfolio with the economic 
power to produce six hundred 

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dollars in excess cash directly 
deposited in my bank every 

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single month that money ends up 
right here under the cash 

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balance where it says buying 
power and then I routinely every

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month, deploy that cash back 
into companies, that will 

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provide even greater dividend. 
Come some of the companies that 

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I'm buying right now are 
different restaurants. 

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Starbucks is one of them that I 
think is undervalued. 

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I've lost some capital 
appreciation on this company, 

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but I continue to dollar cost 
average into it. 

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This is a free cash flow 
positive company. 

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That is growing at a pretty 
decent rate that also pays a two

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point five, nine percent 
dividend yield. 

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So that's basically the strategy
building up a passive stream of 

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dividend income by buying these 
companies over and over and over

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again. 
Come good or bad. 

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Now, this week in particular. 
There's a special group of 

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companies that are getting a lot
of attention. 

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Tension there in the consumer 
category and it's the retailers.

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A lot of retailers are reporting
earnings. 

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This week and retailers are 
often spoken of to be indicated 

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of of the broader economy. 
Meaning that if companies like 

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Home Depot, Costco, Walmart, and
Target are posting really poor 

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numbers that same store sales 
are declining and revenues going

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down. 
That means that the consumers 

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not spending as much money going
out and buying things, which 

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means that we might be headed 
for the recession. 

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If we have retailers on the 
other hand posting. 

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Good numbers. 
That might indicate that we have

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higher inflation and the 
consumer remain strong. 

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So these companies are looked at
as indicate of of the broader 

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economy. 
Now, I own Target Home Depot in 

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Costco, but we have another huge
company that just recently 

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reported earnings, which is 
Walmart. 

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Walmart, earnings are dented by 
food inflation and Staffing 

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costs after the earnings to 
companies down nine point, six 

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eight percent. 
And the big news here is that 

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the earnings per share was 1.3 
versus 1.48, so they missed 

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pretty big. 
Egg on their earnings per share.

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They also missed on their 
revenue 140 1.5 billion versus 

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138. 
So both the top line and bottom 

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line Miss. 
Now, I want to actually dive in 

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a little bit deeper at Walmart's
earnings report because I think 

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there's some things we can learn
from it. 

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First of all, they have at the 
first page, some of the major 

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highlights of the company. 
The one that stood out to me, 

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the most was the enormous, slow 
down and e-commerce growth 

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e-commerce. 
Their online efforts was 1% 

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growth year over year. 
Now, they In hair, a two-year 

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rolling basis, which was 38%. 
So they're trying to normalize 

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the earnings saying that. 
You know, the e-commerce was 

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really good last year and it's 
not growing as much this year 

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going down even further to page 
2. 

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We also see some weakness or at 
least slowing growth Revenue 

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grew by two point four percent. 
That's pretty slow, even for a 

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company. 
As big as Walmart 2.4 percent 

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growth is not something to get 
excited about now, moving on to 

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this next part here, the free 
cash flow. 

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This part seemed we bad. 
I actually had to take a double 

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take on it to make sure I'm 
reading it correctly. 

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Because what I'm seeing here is 
that they're operating cash flow

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was - 3.8 billion a change of - 
6.6 billion over the last year. 

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Their Capital expenditures grew 
by almost double up to 3.5 

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billion. 
So they made far less money. 

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In fact, it went into the 
negative in terms of cash flow 

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and they had Rising expenses, 
which made their free cash flow 

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- 7.3 billion. 
Know what I bring Walmart up on 

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quality. 
Sites, which this tool in this 

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websites available to patreon 
members. 

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If I look at their history, this
is unusual every single quarter.

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They've posted at least some 
positive free cash, flow back to

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2017. 
It's gotten pretty low on some 

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quarters. 
So we have last year than 

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posting 300 million, but they've
never had a negative quarter in 

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the past five years and this 
one's minus 7.5 billion. 

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That is a big negative quarter 
in free cash flow. 

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Now, if we look at their notes 
and additional commentary on 

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this, they actually meant 
action. 

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The decline here. 
They say, the decline is 

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primarily due to an increase in 
inventory costs and purchases to

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support strong sales, lowering 
operating income and the timing 

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of certain payments. 
So there's not a whole lot of 

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context there. 
But again, that's not something 

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that I really like to see. 
Now side of the free cash flow 

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which looks really ugly this 
quarter. 

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They also continue to pay their 
dividend as per usual. 

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And they did share BuyBacks, 
which is something they've 

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continued to do. 
They bought back 70 million 

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shares last quarter. 
Now, moving on, we get Our 

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guidance for the next year. 
They're guiding for Revenue 

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growth of 4%, very slow. 
But I guess, it's okay, at least

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they're guiding to the positive.
Their same-store sales are 

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guiding 43.5 percent. 
They gained three percent, same 

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store sales, this quarter. 
So I think that seems okay. 

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We have EPS growth that they're 
decreasing, their guidance by 

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1%, So now they're guiding to 
grow their earnings per share by

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four to five percent, which is 
very slow earnings per share 

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growth. 
Now, let's go ahead and compare 

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that earnings report and their 
future guidance. 

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Ins to their current valuation 
right now. 

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Walmart trades at a 21.8 forward
P/E, that to me seems a little 

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expensive that's quite a high PE
for a company. 

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That's a retailer. 
That's growing its online sales 

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by 1% last quarter. 
That's free cash flow. 

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Negative, this quarter and is 
moving their guidance down to 

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fortify percent earnings growth.
You're paying a 20 to 40 PE 

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ratio that right. 
There just looks expensive. 

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The Enterprise Value to eat. 
Is 14 .32, that's not exactly 

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cheap for this company. 
So just based off of the two 

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most fundamental valuation 
metrics. 

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Walmart does not look cheap 
based off of their incredibly 

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slow future guidance. 
So this isn't really shocking to

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me that the company selling off 
right now this 11 to 12 percent 

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sell off. 
I don't think it should be two 

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unexpected. 
So ultimately Walmart is a slow 

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growing company, it grows pretty
consistently with the economy 

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year-over-year, the same store 
sales will probably continue to 

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grow at 3%, but Costs are rising
inflation is taking its toll and

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this latest quarter. 
If we look at the latest quarter

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here, the worst free cash flow 
quarter. 

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They've had in recent history. 
Now, that probably will improve.

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You can see that these free cash
flow quarters can move into the 

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positive, but that free cash 
flow hit. 

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I think is also another - to 
factor in overall. 

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I don't think that Walmart's The
Worst by in the market, but 

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right now, it's not really 
tempting me. 

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This isn't something where I 
want to go in and buy the dip. 

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Now, next up. 
We have Home Depot, which also 

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reported. 
Today. 

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I currently have nine. 
Thousand six hundred dollars in 

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value. 
In this company a gain of one 

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thousand, five hundred and 
seventy four dollars. 

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Currently. 
The headline news is at Home 

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00:09:06,600 --> 00:09:08,700
Depot raises. 
Its full-year Outlook as 

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Shoppers, trade up to premium 
products, and fuel record, q1 

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sales. 
We can look at the analyst, 

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expectations earnings per share 
for Home Depot, came in at four 

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dollars and ninety cents verse 
three dollars and sixty eight 

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00:09:20,300 --> 00:09:22,600
cents expected. 
So they absolutely Crush their 

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00:09:22,600 --> 00:09:25,500
EPS. 
The revenue was also a large 

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beat thirty. 
Eight point nine billion versus 

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36.7 expected. 
So they beat on the top line and

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the bottom line. 
That's good. 

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00:09:31,800 --> 00:09:33,300
News. 
Now, I did the same thing an 

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annotated some of the details on
Home, Depot's earnings report 

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right here. 
At the beginning. 

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They say that comparable 
same-store sales for the first 

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quarter in 2022, increased 22.2 
percent. 

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So they grew same store, sales 
2.2%. 

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And I think anything in the 
positive for them was good 

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because they're going against 
very tough comparable sales 

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being one of the biggest 
pandemic winners. 

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So 2.2 same-store sales is not 
Even crazy but investors are 

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just hoping that they don't have
a decline in same-store sales. 

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So 2.2 overall is slow but good 
now they also give guidance here

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and overall they're guiding for 
us, slow down 3%, same store, 

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sales growth and three percent 
total sales growth. 3% is slow 

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growth. 
Even for a company Like Home 

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00:10:19,900 --> 00:10:23,400
Depot, then they also guide 
diluted earnings per share 

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00:10:23,400 --> 00:10:26,300
percent growth to be mid-single 
digits. 

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00:10:26,700 --> 00:10:30,100
So maybe five percent earnings 
growth is what they're Guiding 

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00:10:30,100 --> 00:10:32,600
over the next year, which again 
is slow. 

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They're guiding force, low 
Revenue growth, and slow 

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00:10:34,900 --> 00:10:36,400
earnings growth. 
Now, we can look at some of the 

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more details here on Home Depot 
this quarter. 

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Their net sales grew by 3.8%, 
That was slow, their Costas 

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00:10:42,800 --> 00:10:46,100
sales grew by a quicker pace, 
which isn't a good thing, but 

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00:10:46,100 --> 00:10:49,500
overall you're seeing the theme 
Here Home Depot's growth has 

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00:10:49,500 --> 00:10:51,300
slowed substantially. 
Now. 

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00:10:51,300 --> 00:10:52,900
Another thing that's slowing for
Home Depot. 

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Is there share BuyBacks, you can
see over the course of an entire

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00:10:55,900 --> 00:10:58,300
year. 
They went from one point zero 

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00:10:58,300 --> 00:11:01,700
seven five billion. 
One point zero three four, but 

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00:11:01,700 --> 00:11:04,800
just from most recent quarter. 
They went from one point zero 

231
00:11:04,800 --> 00:11:08,900
three five to one point zero 
three four, that is a big 

232
00:11:08,900 --> 00:11:11,800
deceleration and the level of 
BuyBacks are doing. 

233
00:11:11,800 --> 00:11:13,600
So that's also a slow down on 
the amount of money. 

234
00:11:13,600 --> 00:11:14,900
They're returning to 
shareholders. 

235
00:11:15,000 --> 00:11:17,200
Now, we can take a look at the 
balance sheet of Home Depot. 

236
00:11:17,300 --> 00:11:20,600
Another thing I'd point out is 
they gained 500 million dollars 

237
00:11:20,600 --> 00:11:23,200
in cash. 
So they went from 2.3 billion to

238
00:11:23,200 --> 00:11:25,100
2.8., That's a good thing. 
Now. 

239
00:11:25,100 --> 00:11:28,100
The bad news is, is although 
they gained 500 million dollars 

240
00:11:28,100 --> 00:11:30,600
in cash. 
They also, Oh, gained three 

241
00:11:30,600 --> 00:11:33,700
billion dollars of debt, not 
over the entire year, but just 

242
00:11:33,700 --> 00:11:36,600
from last quarter, this change 
from thirty, six point six 

243
00:11:36,600 --> 00:11:41,000
billion to 39.1 that's in 1/4 
over the full year. 

244
00:11:41,000 --> 00:11:45,200
It's from 34 to 39. 
So Home Depot put on another 

245
00:11:45,200 --> 00:11:48,500
three billion dollars of debt. 
Just this last quarter. 

246
00:11:48,500 --> 00:11:50,100
Now, one important note on 
breaking down. 

247
00:11:50,100 --> 00:11:52,300
This debt is any type of 
retailer? 

248
00:11:52,300 --> 00:11:54,900
That has a lot of leases. 
They have a lot of locations. 

249
00:11:55,200 --> 00:11:58,200
They usually break out from 
their long-term debt, their 

250
00:11:58,200 --> 00:12:00,700
Capital operating lease. 
Liabilities. 

251
00:12:00,800 --> 00:12:02,800
So that's not really debt per 
se. 

252
00:12:02,900 --> 00:12:05,600
That is obligations. 
They have for the leases for 

253
00:12:05,600 --> 00:12:07,400
their location. 
And I personally think that 

254
00:12:07,400 --> 00:12:09,100
should be put in a different 
category. 

255
00:12:09,200 --> 00:12:12,100
So in qualitative insights, for 
example, I take out those 

256
00:12:12,100 --> 00:12:15,600
Capital leases, but even outside
of that last quarter, Home Depot

257
00:12:15,600 --> 00:12:17,200
had thirty. 
Six point four billion. 

258
00:12:17,400 --> 00:12:19,700
Now, that's gone to thirty nine 
billion. 

259
00:12:19,900 --> 00:12:23,200
So when this data updates, quiet
rooms going to show them having 

260
00:12:23,200 --> 00:12:25,900
thirty-nine billion dollars of 
debt, which is a lot of debt. 

261
00:12:26,000 --> 00:12:27,000
Now. 
The last thing that I'd point 

262
00:12:27,000 --> 00:12:29,400
out is on the cash flow 
statement, just a simple 

263
00:12:29,400 --> 00:12:31,200
observation. 
Servation here, Home Depot, did 

264
00:12:31,200 --> 00:12:32,300
increase the amount of 
dividends. 

265
00:12:32,300 --> 00:12:36,400
They're paying by 10%, which 
seems good a 10% raise, but at 

266
00:12:36,400 --> 00:12:38,400
the rate that they're growing, 
they're not going to be able to 

267
00:12:38,408 --> 00:12:41,500
maintain growing their dividend 
by 10 percent year over year 

268
00:12:41,800 --> 00:12:44,900
unless their earnings accelerate
faster than they are right. 

269
00:12:44,900 --> 00:12:47,700
Now. 
Home Depot has a 2.57 percent 

270
00:12:47,700 --> 00:12:52,500
yield which is a nice healthy 
yield, their payout ratio is 44%

271
00:12:52,500 --> 00:12:55,600
a little higher than their 
historical payout ratio, but it 

272
00:12:55,600 --> 00:12:58,900
still looks okay? 
A payout ratio of above 40 is a 

273
00:12:58,900 --> 00:13:00,600
little bit on the High-end 
though. 

274
00:13:00,600 --> 00:13:03,300
Most companies I invest in, I 
want that payout ratio to be 

275
00:13:03,300 --> 00:13:05,200
below 40%. 
So look Home. 

276
00:13:05,200 --> 00:13:09,200
Depot's a company overall that 
is guiding 43 percent. 

277
00:13:09,200 --> 00:13:12,300
Same store, sales growth, five 
percent earnings growth. 

278
00:13:12,300 --> 00:13:15,800
So very slow EPS growth. 
That's below the markets 

279
00:13:15,800 --> 00:13:17,500
average. 
Most companies grow earnings a 

280
00:13:17,508 --> 00:13:20,500
little bit faster than that. 
So Home Depot's guiding for this

281
00:13:20,500 --> 00:13:23,300
very slow growth. 
And in the meanwhile, they're 

282
00:13:23,300 --> 00:13:25,800
stacking on. 
Billions of dollars of debt, 

283
00:13:26,100 --> 00:13:28,900
seemingly, every single quarter.
You can see the trend here. 

284
00:13:28,900 --> 00:13:31,900
Now, terms of Uation. 
The PE ratio for Home Depot is 

285
00:13:31,900 --> 00:13:33,500
eighteen. 
Point four eight. 

286
00:13:33,500 --> 00:13:35,800
That's a little bit above the 
S&P 500. 

287
00:13:35,800 --> 00:13:38,900
It's lower than Walmart, but I 
still don't consider this to be 

288
00:13:38,900 --> 00:13:41,800
a very cheap company based off 
of its growth rate. 

289
00:13:42,000 --> 00:13:45,300
It's trading at an Enterprise 
Value to ebit of 13.4. 

290
00:13:45,600 --> 00:13:49,000
That is kind of expensive. 
It's on the higher end for 

291
00:13:49,000 --> 00:13:52,600
company expected to grow 
earnings by 5% and have very 

292
00:13:52,600 --> 00:13:54,600
slow. 
Same store, sales growth and a 

293
00:13:54,600 --> 00:13:56,300
company that's tacking on more 
debt. 

294
00:13:56,600 --> 00:14:00,100
I see a lot of things slowing 
down for Home Depot, but the Uh,

295
00:14:00,100 --> 00:14:02,800
in still doesn't reflect that 
fully and I think it's telling 

296
00:14:02,800 --> 00:14:05,600
that even though Home Depot 
beyond their earnings and their 

297
00:14:05,600 --> 00:14:08,700
revenue estimates by a wide. 
Margin, the company's only up 

298
00:14:08,700 --> 00:14:12,100
1.45%. 
So barely even a pop when you 

299
00:14:12,100 --> 00:14:14,700
factor in that, the rest of the 
markets in the green right now. 

300
00:14:15,000 --> 00:14:19,100
Basically Home Depot, had a beat
its earnings by a huge margin 

301
00:14:19,300 --> 00:14:21,200
just to keep up with the rest of
the market. 

302
00:14:21,200 --> 00:14:23,800
So, overall, even though 
companies like Home Depot and 

303
00:14:23,800 --> 00:14:26,400
Walmart are down pretty big. 
Year-to-date. 

304
00:14:26,400 --> 00:14:30,200
Walmart's Down, 9.3% Home, 
Depot's down 26, %. 

305
00:14:30,200 --> 00:14:33,200
I don't consider either of these
to be Stills or situations where

306
00:14:33,200 --> 00:14:35,600
I would go out and buy the dip 
aggressively. 

307
00:14:35,800 --> 00:14:38,000
I think both of them are going 
through a lot of troubles. 

308
00:14:38,100 --> 00:14:41,000
They're both stacking on debt. 
Walmart had a hugely negative 

309
00:14:41,000 --> 00:14:43,800
free cash flow quarter Home. 
Depot stacked on three billion 

310
00:14:43,800 --> 00:14:46,700
dollars of debt in the quarter. 
They're both guiding for 45 

311
00:14:46,700 --> 00:14:49,400
percent earnings growth over the
next year and their valuations 

312
00:14:49,400 --> 00:14:51,300
are still on the high end for 
retailers. 

313
00:14:51,300 --> 00:14:53,500
Now, moving on, we have Warren 
Buffett and Berkshire. 

314
00:14:53,500 --> 00:14:57,400
Hathaway's, full 13f statement, 
which shows all the trades they 

315
00:14:57,400 --> 00:15:00,600
made last quarter. 
The official trade In it, we get

316
00:15:00,600 --> 00:15:02,800
a lot of insight into what 
Warren Buffett and Berkshire. 

317
00:15:02,800 --> 00:15:05,800
Hathaway are thinking, first of 
all, I went through and 

318
00:15:05,800 --> 00:15:08,800
highlighted some of the most 
interesting buys here and the 

319
00:15:08,800 --> 00:15:10,900
most interesting cells. 
So, let's go ahead and go 

320
00:15:10,900 --> 00:15:13,600
through those. 
We have H PQ, which is he lit 

321
00:15:13,600 --> 00:15:16,000
Packard, even though this 
represents a very small portion 

322
00:15:16,000 --> 00:15:18,000
of Berkshire. 
They added to this position. 

323
00:15:18,100 --> 00:15:21,100
HP is for sure, a value company 
trades at a very low forward, 

324
00:15:21,100 --> 00:15:24,800
P/E ratio as very slow Revenue 
growth, but pretty consistent 

325
00:15:24,800 --> 00:15:26,700
overall. 
It's free cash, flow generative 

326
00:15:26,700 --> 00:15:28,600
and does share BuyBacks and 
they've been growing their 

327
00:15:28,600 --> 00:15:31,300
earnings consistently. 
Now, HP is not a company that 

328
00:15:31,300 --> 00:15:32,900
really interests me. 
So I'm not going to be doing 

329
00:15:32,900 --> 00:15:35,800
much research on this one. 
It does however feel very much 

330
00:15:35,800 --> 00:15:38,000
like a typical Warren Buffett 
purchase. 

331
00:15:38,000 --> 00:15:41,100
We also have Warren Buffett 
selling out of Wells Fargo 

332
00:15:41,100 --> 00:15:43,300
completely. 
So, he dumped Wells Fargo, what 

333
00:15:43,300 --> 00:15:47,200
little amount he had and then he
purchased Citigroup City. 

334
00:15:47,200 --> 00:15:50,600
Stock is bumped up 7% after the 
Buffett bump. 

335
00:15:50,600 --> 00:15:53,400
And if we look at the valuation 
here, Citigroup is undoubtedly. 

336
00:15:53,400 --> 00:15:55,400
The cheapest of the big four 
Banks. 

337
00:15:55,400 --> 00:15:57,900
It trades at a price to book of 
point five. 

338
00:15:57,900 --> 00:16:00,700
We can compare that to j.p. 
Morgan for 'Well, even after JP 

339
00:16:00,700 --> 00:16:04,300
Morgan has traded down 
substantially from 1.8 it. 

340
00:16:04,300 --> 00:16:07,400
Now sits at one point three 
seven, so it's still valued at 

341
00:16:07,400 --> 00:16:09,300
over double the valuation of 
Citigroup. 

342
00:16:09,300 --> 00:16:13,600
So Citigroup by the numbers is 
very cheap, but overall it's a 

343
00:16:13,600 --> 00:16:16,600
less Diversified less insulated 
Bank than one like Bank of 

344
00:16:16,608 --> 00:16:19,300
America or JP Morgan. 
That's another one that I 

345
00:16:19,300 --> 00:16:21,600
probably won't be following them
into, but I think it's a decent 

346
00:16:21,600 --> 00:16:24,100
value play. 
We also have Paramount Global, 

347
00:16:24,100 --> 00:16:25,400
he added this one to the 
portfolio. 

348
00:16:25,400 --> 00:16:29,100
Paramount Global is the 
Paramount plus streaming service

349
00:16:29,100 --> 00:16:31,300
the company. 
It is a smaller company. 18 

350
00:16:31,300 --> 00:16:34,100
billion dollar market cap 
forward, P/E ratio of a 9 point,

351
00:16:34,100 --> 00:16:36,400
4 3, So based on future 
earnings. 

352
00:16:36,400 --> 00:16:39,000
It has very low expectations. 
Baked into it. 

353
00:16:39,200 --> 00:16:42,200
It has an Enterprise Value to 
ibadah of 5.19. 

354
00:16:43,100 --> 00:16:45,700
So it's a very cheap company on 
paper. 

355
00:16:46,000 --> 00:16:48,100
It is growing its Revenue. 
It is free, cash, flow 

356
00:16:48,100 --> 00:16:51,600
generative and it does have some
dilution but not enough to be 

357
00:16:51,600 --> 00:16:55,200
concerned with overall though. 
I look at this company and I 

358
00:16:55,208 --> 00:16:59,000
think the biggest bull case for 
Paramount plus is a simply be 

359
00:16:59,000 --> 00:17:02,700
acquired by Another company to 
have apple or Amazon, or 

360
00:17:02,700 --> 00:17:06,400
Netflix, or Disney. 
Another big company that wants a

361
00:17:06,408 --> 00:17:10,000
lot of content could come in and
buy this company, and that would

362
00:17:10,000 --> 00:17:12,400
give a little bit of a premium. 
So I think Warren Buffett is 

363
00:17:12,400 --> 00:17:15,599
kind of doing this on the 
possibility of an Arbitrage. 

364
00:17:15,700 --> 00:17:18,000
He's buying a company that's 
trading at a discount. 

365
00:17:18,000 --> 00:17:20,900
There's some chance that it will
be purchased by another company.

366
00:17:21,200 --> 00:17:22,900
And in the process, he could 
make some money. 

367
00:17:23,000 --> 00:17:24,400
That would be my guess after 
that. 

368
00:17:24,400 --> 00:17:27,300
We also have a very interesting 
new addition to the portfolio. 

369
00:17:27,599 --> 00:17:30,800
Ally Financial Ally is a company
that I've Interested in for a 

370
00:17:30,800 --> 00:17:34,800
very long time, if I'm going to 
buy another bank, it'll probably

371
00:17:34,800 --> 00:17:39,400
be a lie trades at a 5-4, PE 
ratio The Price to Book is point

372
00:17:39,400 --> 00:17:41,900
nine. 
So not as cheap as City, not as 

373
00:17:41,900 --> 00:17:45,700
expensive as JP Morgan, but this
bank is very well managed and 

374
00:17:45,700 --> 00:17:49,300
it's running in an incredibly 
inefficient way and it's growing

375
00:17:49,500 --> 00:17:52,500
the revenue growth overall is 
steady and consistent. 

376
00:17:52,500 --> 00:17:54,100
Their debts being reduced over 
time. 

377
00:17:54,100 --> 00:17:57,000
They pay a growing dividend and 
the shares outstanding are 

378
00:17:57,000 --> 00:17:58,700
declining as they're doing 
BuyBacks. 

379
00:17:58,800 --> 00:18:02,200
This been currently pays a 3% 
dividend yield with a 12 percent

380
00:18:02,200 --> 00:18:04,600
payout ratio. 
So it has a healthy and growing 

381
00:18:04,600 --> 00:18:06,800
dividend along with doing share 
BuyBacks. 

382
00:18:07,100 --> 00:18:09,200
And I think that when you look 
over the entire Financial 

383
00:18:09,200 --> 00:18:12,800
metrics of this company, it's a 
very strong company overall. 

384
00:18:12,800 --> 00:18:15,700
I think it's going to do well, 
the biggest concern with Ally 

385
00:18:15,700 --> 00:18:19,000
Financial is if we go into a 
recession, this Bank in 

386
00:18:19,000 --> 00:18:22,100
particular is very much 
concentrated into auto loans, 

387
00:18:22,100 --> 00:18:24,400
but overall, I do like the 
purchase of Ally Financial. 

388
00:18:24,400 --> 00:18:26,600
I think it's one of the better 
ones that he bought this last 

389
00:18:26,600 --> 00:18:30,200
quarter now, but look at the 
companies that he sold or Just, 

390
00:18:30,200 --> 00:18:32,600
I think it's just as much 
telling he's sold out of the 

391
00:18:32,608 --> 00:18:35,100
pharmaceutical companies. 
So he dumped a V and 

392
00:18:35,100 --> 00:18:38,600
Bristol-Myers Squibb. 
He also sold out of Wells Fargo.

393
00:18:38,600 --> 00:18:42,400
So you replace that one with 
Citigroup and then he also 

394
00:18:42,400 --> 00:18:46,500
dumped 99.1 percent of his 
Verizon stake. 

395
00:18:46,500 --> 00:18:48,400
And this was a pretty 
significant stake. 

396
00:18:48,400 --> 00:18:51,100
This made up two point, two 
eight percent of berkshire's 

397
00:18:51,100 --> 00:18:53,100
portfolio. 
I've called this one for a long 

398
00:18:53,100 --> 00:18:55,700
time. 
I think Verizon is a value trap.

399
00:18:55,700 --> 00:18:58,000
I think it's mostly a dud. 
I think it's going to be 

400
00:18:58,000 --> 00:19:01,700
basically dead or next to dead 
money for a very long time, 

401
00:19:01,700 --> 00:19:03,300
going forward. 
And every time I look at the 

402
00:19:03,300 --> 00:19:05,300
numbers, I come to that same 
conclusion. 

403
00:19:05,500 --> 00:19:08,800
It's a cheap company on paper, a
9 forward, P/E ratio. 

404
00:19:08,900 --> 00:19:10,200
But what are you getting for 
that? 

405
00:19:10,200 --> 00:19:14,200
You're getting almost no 
Revenue, growth back in 2017. 

406
00:19:14,200 --> 00:19:19,000
They had 126 billion. 
Now, they have 133, so a couple 

407
00:19:19,000 --> 00:19:21,800
billion dollars of Revenue 
growth over the course of five 

408
00:19:21,800 --> 00:19:26,900
years on the size of 130-plus 
Revenue, that is not a lot of 

409
00:19:26,900 --> 00:19:28,900
Revenue growth. 
So their revenue growth is 

410
00:19:28,900 --> 00:19:31,400
really almost. 
Nonexistent, it's really not 

411
00:19:31,400 --> 00:19:34,000
that meaningful at all. 
And their debt growth is 

412
00:19:34,000 --> 00:19:38,300
actually meaningful in 2019. 
They had 111 billion dollars of 

413
00:19:38,300 --> 00:19:41,700
debt. 
Now, they have 150 150 billion 

414
00:19:41,700 --> 00:19:43,700
dollars of debt. 
They're actually growing their 

415
00:19:43,700 --> 00:19:46,300
debt more consistently than 
their revenue. 

416
00:19:46,500 --> 00:19:48,900
This is not something that I 
want to see with any company 

417
00:19:48,900 --> 00:19:50,600
that I own. 
And the amount of debt that 

418
00:19:50,600 --> 00:19:54,800
Verizon has is just staggering 
150 billion dollars of debt for 

419
00:19:54,800 --> 00:19:57,500
a company with a 205 billion 
dollar market cap. 

420
00:19:57,500 --> 00:19:59,500
So, every time I look at 
Verizon, I just come back. 

421
00:19:59,600 --> 00:20:03,600
To the same conclusion that this
is a wide moat company, but it 

422
00:20:03,600 --> 00:20:06,300
has very little growth, very 
little earnings growth. 

423
00:20:06,400 --> 00:20:09,300
It has a very large payout ratio
and it's going to be weighed 

424
00:20:09,300 --> 00:20:12,900
down by a massive staggering 
pile of debt for the long-term 

425
00:20:12,900 --> 00:20:14,700
future. 
It's not the type of company 

426
00:20:14,700 --> 00:20:17,000
that I want to make individual 
investments into. 

427
00:20:17,100 --> 00:20:19,500
So, if I was a Berkshire 
shareholder, I'd be happy to see

428
00:20:19,500 --> 00:20:21,900
them exit this position. 
So there's my thoughts on Warren

429
00:20:21,900 --> 00:20:24,700
Buffett's changes to the 
Berkshire Hathaway portfolio. 

430
00:20:25,000 --> 00:20:28,000
Overall. 
He still has that massive 43% 

431
00:20:28,000 --> 00:20:31,000
waiting in apple alone. 
And it doesn't look like he's 

432
00:20:31,000 --> 00:20:34,100
intending to sell this anytime 
soon, because he recently just 

433
00:20:34,100 --> 00:20:35,800
added a little bit more last 
quarter. 

434
00:20:36,000 --> 00:20:39,800
He's, of course, adding still, 
to financials and heavy to oil 

435
00:20:39,800 --> 00:20:42,000
companies. 
So Warren Buffett has built out 

436
00:20:42,000 --> 00:20:45,600
a massive energy business, which
he continually adds more and 

437
00:20:45,600 --> 00:20:47,800
more to, it's a pretty 
incredible business that 

438
00:20:47,800 --> 00:20:49,500
Berkshire own. 
So, that's all for now. 

439
00:20:49,500 --> 00:20:51,700
Later this week. 
I'll have more reaction videos 

440
00:20:51,700 --> 00:20:54,500
on different earnings reports 
like this one, as well as 

441
00:20:54,500 --> 00:20:57,000
commentary on different things. 
I'm doing with my portfolio. 

442
00:20:57,000 --> 00:20:59,800
So if you haven't already, 
subscribe to the channel, And 

443
00:20:59,800 --> 00:21:00,600
I'll see you next time.