1 00:00:00,040 --> 00:00:02,480 Welcome back everyone. We have a busy week to get into 2 00:00:02,480 --> 00:00:03,960 and we're starting it off with a bang. 3 00:00:04,320 --> 00:00:08,160 If we look at the market today, as the kids say, the market is 4 00:00:08,200 --> 00:00:11,080 getting cooked. Everything is just bright red. 5 00:00:11,080 --> 00:00:15,360 It's red across the board. We have NVIDIA down 5%, Apple 6 00:00:15,360 --> 00:00:20,680 down 3%, Amazon's down 3%, Google down 3, Meta down 3.6, 7 00:00:20,880 --> 00:00:24,480 Tesla down 7%. We have one company sticking out 8 00:00:24,480 --> 00:00:26,520 there, this green one that's Netflix. 9 00:00:26,760 --> 00:00:28,280 We'll be going into that a little later. 10 00:00:28,280 --> 00:00:31,320 They just reported earnings. But other than that, overall, 11 00:00:31,320 --> 00:00:33,600 the market is getting crushed today. 12 00:00:33,600 --> 00:00:35,760 Now, as our portfolios are getting cooked, we do have a 13 00:00:35,760 --> 00:00:38,480 chance of redemption here. It's earnings week. 14 00:00:38,760 --> 00:00:41,960 We have a chance for our companies to prove that they're 15 00:00:41,960 --> 00:00:43,680 worth more than what they're trading for. 16 00:00:43,920 --> 00:00:46,120 And they can do that by reporting their earnings and 17 00:00:46,120 --> 00:00:48,160 giving strong earnings and strong guidance. 18 00:00:48,480 --> 00:00:50,920 And this week, we have some of the most important companies in 19 00:00:50,920 --> 00:00:53,680 the market reporting earnings. We have companies like Google, 20 00:00:53,680 --> 00:00:57,760 Tesla, Moodys, Equifax, Chipotle, ServiceNow all 21 00:00:57,760 --> 00:01:01,040 reporting earnings this week, and I'll be going over all of 22 00:01:01,040 --> 00:01:02,400 them. We're going to be going over 23 00:01:02,400 --> 00:01:05,239 some predictions with what Google is going to say, what 24 00:01:05,239 --> 00:01:07,640 Tesla is going to say, what I believe these companies are 25 00:01:07,640 --> 00:01:10,960 going to be doing this week. So we have a lot to jump into. 26 00:01:10,960 --> 00:01:13,240 We have continued news of the political battles, like 27 00:01:13,240 --> 00:01:16,000 President Trump is now really going after Jerome Powell. 28 00:01:16,200 --> 00:01:18,720 He's ramping up his attacks on Powell, saying that he's a 29 00:01:18,720 --> 00:01:21,760 loser, demanding the Fed chair lower rates. 30 00:01:21,840 --> 00:01:25,000 Now we'll be going over what this means, how it impacts the 31 00:01:25,000 --> 00:01:27,960 market and the likelihood of President Trump firing Jerome 32 00:01:27,960 --> 00:01:29,600 Powell. So we have a lot to get into. 33 00:01:29,600 --> 00:01:31,560 Let's go ahead and start off with the biggest earnings 34 00:01:31,560 --> 00:01:33,880 reports of the week. We have a handful of really big 35 00:01:33,880 --> 00:01:35,880 companies that are reporting this week, but I think we should 36 00:01:35,880 --> 00:01:38,480 start off with the most important ones of the week. 37 00:01:38,800 --> 00:01:42,520 Thursday after market close, we have Google reporting earnings. 38 00:01:42,640 --> 00:01:44,920 Now let's go out and bring this up and look at a few things with 39 00:01:44,920 --> 00:01:47,280 Google specifically. Google usually beats on their 40 00:01:47,280 --> 00:01:49,400 earnings per share estimate. We can see that here. 41 00:01:49,560 --> 00:01:52,040 The times they've missed her in red, the times they've beat are 42 00:01:52,040 --> 00:01:54,040 in blue. If we look at how much they beat 43 00:01:54,040 --> 00:01:56,600 by, typically it's by a decent margin. 44 00:01:56,920 --> 00:01:58,880 Now last quarter was really close. 45 00:01:59,280 --> 00:02:01,800 In fact, they they barely beat on their earnings per share. 46 00:02:02,080 --> 00:02:04,920 And last quarter they also missed on their revenue just 47 00:02:04,920 --> 00:02:07,440 barely. Even though this is mostly in 48 00:02:07,440 --> 00:02:10,639 line across the board, Google traded down after their last 49 00:02:10,639 --> 00:02:13,400 quarterly report. So there's no guarantee that 50 00:02:13,440 --> 00:02:16,520 even if Google beats on their earnings per share and they beat 51 00:02:16,520 --> 00:02:18,480 on their revenue, that the stock will go up. 52 00:02:18,680 --> 00:02:21,240 In fact, I believe there's a strong chance that Google will 53 00:02:21,240 --> 00:02:24,240 report a beat on the top and bottom line and the stock will 54 00:02:24,240 --> 00:02:26,720 still trade down. And that's because investors 55 00:02:26,720 --> 00:02:29,880 really aren't too concerned with what the report was over the 56 00:02:29,880 --> 00:02:32,360 past three months. So much has changed in just the 57 00:02:32,360 --> 00:02:35,040 past couple of weeks that they're more concerned about the 58 00:02:35,040 --> 00:02:37,520 future. Everything with these reports 59 00:02:37,760 --> 00:02:40,320 isn't really going to be about what happened, it's going to be 60 00:02:40,320 --> 00:02:42,600 more so about their commentary of the future. 61 00:02:42,920 --> 00:02:46,960 It all depends on if Google can paint a bright future ahead, a 62 00:02:46,960 --> 00:02:49,880 very prosperous future, and one insulated from the many 63 00:02:49,880 --> 00:02:53,760 challenges they're facing. For example, if we look at what 64 00:02:53,760 --> 00:02:57,160 to watch for, this is where we feed Qualtrim a lot of data and 65 00:02:57,160 --> 00:02:59,440 their earnings transcript. We ask it to look for what is 66 00:02:59,440 --> 00:03:02,600 the most important things coming up this quarter, and it outlines 67 00:03:02,600 --> 00:03:05,200 5 different things. The top one here is by far the 68 00:03:05,200 --> 00:03:08,880 most important, which is AI integration into core products. 69 00:03:09,200 --> 00:03:10,800 We've seen this happening over time. 70 00:03:10,880 --> 00:03:13,920 Google's integrating artificial intelligence into Google Drive 71 00:03:14,480 --> 00:03:17,240 with their spreadsheets. They have AI functionality in 72 00:03:17,240 --> 00:03:19,720 them now. They're integrating AI into 73 00:03:19,920 --> 00:03:22,120 Gmail. They're integrating AI into 74 00:03:22,120 --> 00:03:24,480 search with AI overviews and AI mode. 75 00:03:24,880 --> 00:03:28,520 They're integrating AI into YouTube with AI summaries, and 76 00:03:28,520 --> 00:03:31,880 you can prompt questions about YouTube videos and every single 77 00:03:31,880 --> 00:03:35,400 property of Google. They're now integrating AI into 78 00:03:35,400 --> 00:03:37,280 all of them. Now, of course, it's not just 79 00:03:37,280 --> 00:03:39,280 Google doing this. Every company's trying to 80 00:03:39,280 --> 00:03:41,360 integrate artificial intelligence into all of their 81 00:03:41,360 --> 00:03:43,320 products. You can see basically every 82 00:03:43,320 --> 00:03:46,120 company doing the same thing. But Google has a lot of 83 00:03:46,120 --> 00:03:48,920 properties to be able to leverage AI more than most 84 00:03:48,920 --> 00:03:50,520 companies. So they have a lot of 85 00:03:50,520 --> 00:03:53,000 opportunities for growth here in artificial intelligence. 86 00:03:53,320 --> 00:03:57,240 But this is also probably one of the biggest questions of concern 87 00:03:57,240 --> 00:03:59,560 for Google. We know that one company in 88 00:03:59,560 --> 00:04:03,160 particular, a private company, is growing very, very fast. 89 00:04:03,520 --> 00:04:06,840 Open AI. Chachi PT, I believe, presents 90 00:04:06,960 --> 00:04:09,280 the biggest existential threat for Google. 91 00:04:09,640 --> 00:04:11,400 Now, Google faces a couple threats. 92 00:04:11,440 --> 00:04:13,680 Of course, there's just the normal level of competition that 93 00:04:13,680 --> 00:04:15,400 Google faces. And then on top of that, there's 94 00:04:15,400 --> 00:04:18,399 all the regulatory issues they face with potentially selling 95 00:04:18,399 --> 00:04:20,160 off Chrome and breaking up the company. 96 00:04:20,720 --> 00:04:24,280 But even beyond all of that, I believe the biggest existential 97 00:04:24,280 --> 00:04:27,680 threat that Google faces is the growth of Chachi PT. 98 00:04:28,120 --> 00:04:30,440 I really think that that's the number one thing that investors 99 00:04:30,440 --> 00:04:32,720 are going to be focused on going into this quarter. 100 00:04:32,800 --> 00:04:35,320 Let's take a look at one graph as a piece of evidence here. 101 00:04:35,920 --> 00:04:41,120 Right here we have the ChatGPT VS Gemini monthly active users. 102 00:04:41,240 --> 00:04:43,920 I'll move myself out of the way so you can see the growth in 103 00:04:43,920 --> 00:04:47,120 each of these applications. Gemini, the orange one is 104 00:04:47,120 --> 00:04:50,560 Google's version of ChatGPT. It's the LLM app, and then you 105 00:04:50,560 --> 00:04:52,960 have the blue one there, which is ChatGPT. 106 00:04:53,040 --> 00:04:55,600 Even though Google has all of these properties of owning 107 00:04:55,600 --> 00:04:59,080 YouTube, owning Gmail, owning Google Drive, they haven't so 108 00:04:59,080 --> 00:05:01,880 far launched this product successfully enough to gain 109 00:05:01,880 --> 00:05:05,240 massive traction. Chachi PTS growth is insane. 110 00:05:05,320 --> 00:05:08,920 To put this in perspective, if Chachi PT continue to grow at 111 00:05:08,920 --> 00:05:11,480 the same rate it has for the past six months, it would 112 00:05:11,480 --> 00:05:16,160 surpass Google searches traffic by the end of 2026 in only two 113 00:05:16,160 --> 00:05:18,040 years. Now that's a big assumption to 114 00:05:18,040 --> 00:05:20,360 make that it will continue growing at this rate, but it 115 00:05:20,360 --> 00:05:24,040 just shows how fast it's grown. They now have over 500 million 116 00:05:24,040 --> 00:05:27,480 weekly active users. Sam Altman just said a couple 117 00:05:27,480 --> 00:05:31,600 weeks ago that ChatGPT traffic has caused so much strain on 118 00:05:31,600 --> 00:05:34,760 their server that the usage has nearly doubled in only a couple 119 00:05:34,760 --> 00:05:36,600 weeks. If all these people flock over 120 00:05:36,600 --> 00:05:40,400 to ChatGPT and fall in love with these LLMS, they're consuming 121 00:05:40,400 --> 00:05:42,240 all this information in a different way. 122 00:05:42,480 --> 00:05:45,040 And even though the use cases are different, the way that 123 00:05:45,040 --> 00:05:46,960 they're consuming the content is different. 124 00:05:47,640 --> 00:05:50,720 It does present a relative threat, at least down the road. 125 00:05:51,080 --> 00:05:54,440 ChatGPT could change their service to have greater overlap 126 00:05:54,640 --> 00:05:58,640 with what Google does. So I see that right now as the 127 00:05:58,640 --> 00:06:02,600 number one concern for Google. They need to show their strategy 128 00:06:02,800 --> 00:06:06,720 for how they're addressing so many people using LLMS, how 129 00:06:06,720 --> 00:06:09,760 they're addressing so many people going over to ChatGPT. 130 00:06:10,120 --> 00:06:13,080 They need to stem the flow. They're starting to do that with 131 00:06:13,200 --> 00:06:15,800 AI overviews. They now have an AI mode in 132 00:06:15,800 --> 00:06:18,880 Google, and they're now promoting Gemini to a greater 133 00:06:18,880 --> 00:06:20,920 degree. They're also allowing more 134 00:06:20,920 --> 00:06:23,840 things to be free on Gemini, which I think is all the right 135 00:06:23,840 --> 00:06:25,560 move. They should put Gemini in front 136 00:06:25,560 --> 00:06:27,560 of people more. They should really market this 137 00:06:27,560 --> 00:06:29,080 product to get it into more hands. 138 00:06:29,200 --> 00:06:31,640 Next up, we have the brightest spot for Google, which is the 139 00:06:31,640 --> 00:06:33,880 cloud business growth and expansion. 140 00:06:34,280 --> 00:06:36,720 Alphabet has achieved significant growth in its cloud 141 00:06:36,720 --> 00:06:39,920 business, noting an increase in customer commitments and 142 00:06:39,920 --> 00:06:42,880 strategic deals. The focus on enhancing AI 143 00:06:42,880 --> 00:06:46,160 powered cloud offering is expanding data center capacity 144 00:06:46,160 --> 00:06:49,880 is crucial for meeting growing demand, indicating continuous 145 00:06:49,880 --> 00:06:53,120 revenue growth, market penetration in the cloud sector. 146 00:06:53,480 --> 00:06:56,640 Additionally, they also just purchased a cybersecurity 147 00:06:56,640 --> 00:06:59,800 company specifically for multi Cloud, which is another tool 148 00:06:59,800 --> 00:07:02,760 that they can use to sell cloud to different businesses. 149 00:07:02,800 --> 00:07:05,240 And while that cloud revenue is growing quickly, we also have 150 00:07:05,240 --> 00:07:08,280 the cloud operating margins moving up substantially to now 151 00:07:08,280 --> 00:07:11,240 17 1/2%. Investors will be laser focused 152 00:07:11,360 --> 00:07:13,080 on what the cloud revenue looks like. 153 00:07:13,120 --> 00:07:15,560 This is going to be a major part of Googles report. 154 00:07:15,920 --> 00:07:18,280 If they disappoint on cloud, if they don't get as many 155 00:07:18,280 --> 00:07:21,200 commitments, if it doesn't look like it's quite as strong, then 156 00:07:21,200 --> 00:07:23,920 the stock will likely go lower. And then finally with Google, we 157 00:07:23,920 --> 00:07:26,240 have to take a look at their commentary regarding 158 00:07:26,440 --> 00:07:29,840 infrastructure and investments. Remember that last quarter they 159 00:07:29,840 --> 00:07:32,600 said they were going to put way more into cloud infrastructure 160 00:07:32,760 --> 00:07:35,680 than investors anticipated. And that's part of the reason 161 00:07:35,680 --> 00:07:38,000 the stock sold off. Investors were a little 162 00:07:38,000 --> 00:07:41,360 concerned with how much money they're flowing into CapEx. 163 00:07:41,680 --> 00:07:43,800 That money takes money out of free cash flow. 164 00:07:43,840 --> 00:07:46,120 So even though Google's a company with fast growing 165 00:07:46,120 --> 00:07:50,360 revenue, fast growing EBITDA and net income, the free cash flow 166 00:07:50,360 --> 00:07:53,440 really isn't growing that fast because the free cash flow 167 00:07:53,440 --> 00:07:56,960 subtracts out CapEx, filter out everything but the capital 168 00:07:56,960 --> 00:08:00,240 expenditures and see it double over just the past year. 169 00:08:00,600 --> 00:08:03,960 We want to know as investors what they're spending this money 170 00:08:03,960 --> 00:08:06,680 on and what the expected return is and when. 171 00:08:06,840 --> 00:08:09,040 We want to know the ROI that we're getting. 172 00:08:09,280 --> 00:08:11,760 So investors need to demand that information. 173 00:08:12,000 --> 00:08:14,520 We'll be listening for it on the earnings call and in the 174 00:08:14,520 --> 00:08:16,560 commentary. Overall, Google investors can 175 00:08:16,560 --> 00:08:20,440 expect a very strong Q1 of 2025. They're going to post some great 176 00:08:20,440 --> 00:08:23,200 numbers, but more importantly, investors will be focused on 177 00:08:23,200 --> 00:08:25,280 what's happening now and the future. 178 00:08:25,440 --> 00:08:28,720 The commentary with four key things to focus on. 179 00:08:28,960 --> 00:08:31,920 One, what is the LLM landscape look like? 180 00:08:32,240 --> 00:08:34,600 What is their plan to deal with Chachi PT? 181 00:08:34,880 --> 00:08:37,880 This is top of mind for investors, and Google has to 182 00:08:37,880 --> 00:08:42,320 answer these questions with very good answers #2 what does the 183 00:08:42,320 --> 00:08:44,760 landscape look like with the amount of lawsuits and 184 00:08:44,760 --> 00:08:46,240 regulations that they're receiving? 185 00:08:46,440 --> 00:08:49,520 What is your expectations with all of this uncertainty with 186 00:08:49,520 --> 00:08:52,600 regulation three? What is cloud look like? 187 00:08:52,920 --> 00:08:55,440 Are they growing in cloud? Is the margins increasing? 188 00:08:55,480 --> 00:08:57,560 Do they still remain very bullish on cloud? 189 00:08:57,600 --> 00:09:00,520 And then #4 what is the CapEx outlook look like? 190 00:09:00,840 --> 00:09:03,040 Are they going to spend the same amount that they already said? 191 00:09:03,120 --> 00:09:04,800 Are they going to raise the amount or lower it? 192 00:09:05,120 --> 00:09:09,080 And what is the expected ROI? We want answers on that as well. 193 00:09:09,440 --> 00:09:11,920 So going into Google's report, I think there's going to be a lot 194 00:09:11,920 --> 00:09:13,400 of questions that need to be answered. 195 00:09:13,520 --> 00:09:16,280 If Google management doesn't answer these questions well, the 196 00:09:16,280 --> 00:09:18,760 stock will struggle. Now Next up, we jump into Tesla, 197 00:09:18,760 --> 00:09:22,120 which is reporting earnings this week Tuesday after market close. 198 00:09:22,120 --> 00:09:25,720 So tomorrow after market close, typically around 20 minutes 199 00:09:25,720 --> 00:09:29,040 after the market close is when Tesla reports their earnings. 200 00:09:29,600 --> 00:09:32,880 And for Tesla investors, this is going to be a really interesting 201 00:09:32,880 --> 00:09:37,200 one because Tesla is really likely to miss on the revenue or 202 00:09:37,200 --> 00:09:38,440 the earnings per share this time. 203 00:09:38,680 --> 00:09:40,880 They just are. There's a lot of unknowns. 204 00:09:40,880 --> 00:09:43,680 There's a lot of uncertainties because there's been some brand 205 00:09:43,680 --> 00:09:46,600 damage by Elon Musk. There's been protests, there's 206 00:09:46,600 --> 00:09:49,800 been outright backlash and attacks on Tesla owners. 207 00:09:50,040 --> 00:09:52,200 There's been a lot of things that's happened with Tesla that 208 00:09:52,200 --> 00:09:54,240 makes it highly unpredictable this quarter. 209 00:09:54,600 --> 00:09:57,080 And when we look at the historical performance of Tesla 210 00:09:57,360 --> 00:10:00,560 with their expected earnings, they miss frequently. 211 00:10:00,680 --> 00:10:03,520 In fact, out of the past six quarters, they've missed on five 212 00:10:03,520 --> 00:10:05,720 of them. So recently, they've missed on 213 00:10:05,720 --> 00:10:08,800 the majority of their reports. Now, missing on your earnings 214 00:10:08,800 --> 00:10:11,400 per share in revenue estimates is not the end of the world. 215 00:10:11,840 --> 00:10:14,160 Investors in Tesla are investing for the long term. 216 00:10:14,400 --> 00:10:17,520 They're investing for step changes in disruptive and 217 00:10:17,520 --> 00:10:20,280 innovative technology. So if you're invested in Tesla, 218 00:10:20,280 --> 00:10:22,280 let's be honest here. Your biggest concern is not 219 00:10:22,280 --> 00:10:24,280 whether or not they meet their earnings per share or their 220 00:10:24,280 --> 00:10:26,680 revenue estimates. Your concern is on the next five 221 00:10:26,680 --> 00:10:29,080 years of Tesla and whether or not they meet some of their 222 00:10:29,080 --> 00:10:31,320 major initiatives. We have a couple really 223 00:10:31,320 --> 00:10:33,120 important things to focus on with Tesla. 224 00:10:33,120 --> 00:10:35,920 One of them is the production and delivery records, and I 225 00:10:35,920 --> 00:10:39,360 would say even more so, the overall demand outlook. 226 00:10:39,640 --> 00:10:41,840 What does it look like across the globe? 227 00:10:42,160 --> 00:10:44,200 What does demand look like in China? 228 00:10:44,480 --> 00:10:45,880 What does it look like in Europe? 229 00:10:46,160 --> 00:10:48,880 We know that there's been significant backlash against 230 00:10:48,880 --> 00:10:52,040 Elon Musk's politics in Europe, specifically Germany. 231 00:10:52,040 --> 00:10:54,240 Now Elon Musk seems to have responded to that. 232 00:10:54,240 --> 00:10:56,600 He seems a little less politically focused on Europe. 233 00:10:56,600 --> 00:10:59,440 He's not really as involved in it as much, and there's reports 234 00:10:59,520 --> 00:11:02,600 that he's leaving Doge soon. Both of those should help heal 235 00:11:02,600 --> 00:11:06,080 some of the issues caused by the brand damage with Elon Musk in 236 00:11:06,080 --> 00:11:07,800 Europe. But then you also have the 237 00:11:07,800 --> 00:11:11,000 question of China. Tesla does a lot of business in 238 00:11:11,000 --> 00:11:13,680 China, and the tariff battle between the US and China 239 00:11:13,680 --> 00:11:16,760 certainly hurts that business. And investors will want to know 240 00:11:16,760 --> 00:11:19,960 the extent of that damage. How much is it impacting their 241 00:11:19,960 --> 00:11:22,480 sales in China? Tesla has likely suffered both 242 00:11:22,480 --> 00:11:25,280 significant demand decrease in Europe and China. 243 00:11:25,720 --> 00:11:29,040 Not only is Tesla a car company right now, at least a large part 244 00:11:29,040 --> 00:11:30,800 of their sales comes from vehicles. 245 00:11:31,280 --> 00:11:33,280 And that's already a cyclical business. 246 00:11:33,280 --> 00:11:35,200 It's a tough business in and of itself. 247 00:11:35,520 --> 00:11:38,720 When you layer upon that political commentary, feuds 248 00:11:38,720 --> 00:11:42,200 between different countries, it only adds to the intensity of 249 00:11:42,200 --> 00:11:45,000 that cyclicality. So Tesla has had some major 250 00:11:45,000 --> 00:11:48,480 headwinds fighting against it. We want to see clarity on this 251 00:11:48,480 --> 00:11:50,920 going forward. Tesla investors want a brighter 252 00:11:50,920 --> 00:11:54,440 story ahead, one that's less politically involved and one 253 00:11:54,440 --> 00:11:56,360 that has greater clarity with the tariffs. 254 00:11:56,360 --> 00:11:58,600 Hopefully, these large tariffs against China will resolve 255 00:11:58,600 --> 00:12:02,040 quickly so that companies like Tesla can operate with greater 256 00:12:02,040 --> 00:12:03,960 clarity. Elon Musk is likely to talk 257 00:12:03,960 --> 00:12:07,360 about version 13 and 14 of the full Self driving, which 258 00:12:07,360 --> 00:12:10,080 reportedly is much better than previous versions. 259 00:12:10,400 --> 00:12:12,640 A lot of people are raving about version 13. 260 00:12:12,920 --> 00:12:15,960 He's also likely to talk about the future deployment of their 261 00:12:15,960 --> 00:12:18,400 robotaxi network. Elon Musk has promised 262 00:12:18,400 --> 00:12:21,920 driverless rides this year. That means no one sitting in the 263 00:12:21,920 --> 00:12:24,880 driver's seat as you have passengers taken from point A to 264 00:12:24,880 --> 00:12:27,040 point B, no one in the driver's seat. 265 00:12:27,080 --> 00:12:29,880 Even though Elon Musk has repeatedly kind of given 266 00:12:29,880 --> 00:12:33,120 timelines and he's extended those timelines, he's been very 267 00:12:33,120 --> 00:12:35,800 definitive on this timeline of it happening this year. 268 00:12:35,800 --> 00:12:37,960 So that's going to be a real test for Tesla. 269 00:12:38,160 --> 00:12:39,600 What does the progress look like? 270 00:12:40,080 --> 00:12:43,760 The other big thing that they're focused on is humanoid robotics, 271 00:12:43,760 --> 00:12:46,880 specifically Optimus. We see little previews of the 272 00:12:46,880 --> 00:12:49,760 technology that it's now walking more normally. 273 00:12:49,960 --> 00:12:51,720 It's not walking like an old man. 274 00:12:51,840 --> 00:12:54,800 Optimist now looks a little bit more agile, little bit younger, 275 00:12:54,800 --> 00:12:56,600 and this is something that's a bit further off. 276 00:12:56,720 --> 00:12:59,480 This could be 5 to 10 years off, maybe even further. 277 00:12:59,800 --> 00:13:02,680 But investors are excited at the prospect of owning a company 278 00:13:02,880 --> 00:13:04,800 that's working on humanoid robotics. 279 00:13:05,320 --> 00:13:09,200 My expectations are, again, that if Tesla has a poor quarter and 280 00:13:09,200 --> 00:13:11,520 they don't have good numbers this quarter, they'll spend a 281 00:13:11,520 --> 00:13:15,000 lot of time focused on humanoid robotics and robotaxi. 282 00:13:15,080 --> 00:13:17,400 When we look at the differences of these two companies reporting 283 00:13:17,400 --> 00:13:20,560 this week, it's important to know the differences in how they 284 00:13:20,560 --> 00:13:24,280 look going into this week. For example, Google and Tesla 285 00:13:24,280 --> 00:13:27,760 both face many challenges. Google has to deal with LLMS. 286 00:13:28,040 --> 00:13:31,520 Tesla has to deal with all this evolving technology with Waymo, 287 00:13:31,520 --> 00:13:34,480 with disruption as well. So both of these companies have 288 00:13:34,480 --> 00:13:36,840 challenges and risks to their investment thesis. 289 00:13:37,360 --> 00:13:39,600 But when we look at the valuation, one of the key 290 00:13:39,600 --> 00:13:43,400 differences is that Google trades at a 16 Ford PE ratio. 291 00:13:43,400 --> 00:13:46,400 When we look at Tesla stock, I evaluate it as being much higher 292 00:13:46,400 --> 00:13:50,120 risk than Google because it trades at an 80 Ford PE ratio, a 293 00:13:50,120 --> 00:13:53,640 100 PE on a trailing basis. So while you have valuation 294 00:13:53,640 --> 00:13:55,800 support with Google, with Tesla you do not. 295 00:13:55,840 --> 00:13:57,440 And it's more reliant on the narrative. 296 00:13:57,760 --> 00:14:00,840 Elon Musk and the management team needs to paint a very 297 00:14:00,840 --> 00:14:03,120 convincing narrative to keep this stock higher. 298 00:14:03,200 --> 00:14:05,200 Now Next up, we have Moody's and Equifax. 299 00:14:05,200 --> 00:14:07,280 These are two companies that are in My Portfolio. 300 00:14:07,480 --> 00:14:08,800 We'll start off with Moody's here. 301 00:14:09,240 --> 00:14:12,440 I think overall, Moody's is going to be much more mundane, a 302 00:14:12,480 --> 00:14:16,560 little bit more boring than the likes of Tesla or Google, but 303 00:14:16,560 --> 00:14:18,440 there's still some interesting things to look at with this 304 00:14:18,440 --> 00:14:20,800 company. My prediction is Moody's will 305 00:14:20,800 --> 00:14:22,840 have a great report. I think they're going to post 306 00:14:22,840 --> 00:14:24,880 some really good numbers. I think there's been a lot of 307 00:14:24,880 --> 00:14:26,920 debt issuance, a lot of companies doing business. 308 00:14:27,400 --> 00:14:30,320 Companies are likely to pull back on that a little bit with 309 00:14:30,320 --> 00:14:32,680 the tariff concerns. So I believe that we're going to 310 00:14:32,680 --> 00:14:35,280 see some commentary there. But overall, when we look at 311 00:14:35,280 --> 00:14:37,960 these different things happening with Moody's, I see them 312 00:14:37,960 --> 00:14:40,240 happening in directionally the right direction. 313 00:14:40,480 --> 00:14:41,960 There's going to be strong revenue growth. 314 00:14:42,360 --> 00:14:45,440 Moody's Investor Services, which is their credit rating business, 315 00:14:45,720 --> 00:14:48,600 is going to get forecast of what they think global debt will be, 316 00:14:48,800 --> 00:14:51,280 what the issuance will be. That's a major part of this 317 00:14:51,280 --> 00:14:53,080 business and a very lucrative part. 318 00:14:53,440 --> 00:14:55,080 This part of the business will do well. 319 00:14:55,480 --> 00:14:59,240 Now, I'm not expecting interest rates to drop anytime soon, but 320 00:14:59,240 --> 00:15:01,680 Even so, I think that Moody's Investor Services is well 321 00:15:01,800 --> 00:15:03,600 position. We also have the expansion of 322 00:15:03,600 --> 00:15:05,760 Mooby's analytics. This is the other half of the 323 00:15:05,760 --> 00:15:08,440 business where they package all of this data and sell it as 324 00:15:08,440 --> 00:15:10,360 analytics. They have decent revenue growth 325 00:15:10,400 --> 00:15:13,240 and they're usually deeply embedded in companies, so it's 326 00:15:13,240 --> 00:15:16,000 not that exciting of a product, but it's one that really is 327 00:15:16,000 --> 00:15:19,240 profitable and growing. When we get to Equifax, this is 328 00:15:19,240 --> 00:15:21,160 another company that's new to My Portfolio. 329 00:15:21,160 --> 00:15:24,160 I have a small position in it, but I'm still building it up. 330 00:15:24,480 --> 00:15:28,120 My prediction for Equifax is that this report is going to be 331 00:15:28,120 --> 00:15:31,400 mostly negative. Equifax has almost every 332 00:15:31,400 --> 00:15:34,720 headwind you could imagine. Almost every aspect of their 333 00:15:34,720 --> 00:15:38,200 business, cyclicality and macro wise, is moving in the wrong 334 00:15:38,200 --> 00:15:41,200 direction. For example, with the mortgages, 335 00:15:41,200 --> 00:15:43,680 the company has seen a significant decline and mortgage 336 00:15:43,680 --> 00:15:47,760 credit inquiries now forecasting a drop of approximately 12%. 337 00:15:47,800 --> 00:15:51,080 This is a credit Bureau offering the raw data of different people 338 00:15:51,080 --> 00:15:53,680 wanting their credit rating whenever they get a mortgage. 339 00:15:54,000 --> 00:15:57,280 So when people are buying homes less frequently, their business 340 00:15:57,280 --> 00:15:59,360 declines. We also have hiring market 341 00:15:59,400 --> 00:16:01,800 weakness. There's already a notable 342 00:16:01,800 --> 00:16:05,880 decline in hiring volumes with expectations of an 8% decrease 343 00:16:05,880 --> 00:16:10,720 in 2025 relative to 2024. I think that Equifax is likely 344 00:16:10,720 --> 00:16:13,920 to say that this decrease will be great, greater than 8%. 345 00:16:13,920 --> 00:16:18,840 It's going to be 10 to 12% because they said this before 346 00:16:18,840 --> 00:16:21,800 tariffs, before all of this economic and political 347 00:16:21,800 --> 00:16:25,680 uncertainty, before a huge trade war with China, before tariffing 348 00:16:25,680 --> 00:16:28,880 all of our allies 10%. With this trade policy rolled 349 00:16:28,880 --> 00:16:32,200 out the way that it has, it's certainly caused companies to be 350 00:16:32,200 --> 00:16:34,440 more cautious about their hiring practices. 351 00:16:34,720 --> 00:16:37,520 If they pull back on their hiring at all, then the work 352 00:16:37,520 --> 00:16:40,480 number one of the key products from Equifax is going to be 353 00:16:40,480 --> 00:16:42,960 impacted. So that's macro effect #2 354 00:16:43,040 --> 00:16:45,080 impacting this company to a greater degree. 355 00:16:45,080 --> 00:16:47,720 Some bright spots with Equifax is they're currently becoming a 356 00:16:47,720 --> 00:16:50,960 more lean business, more efficient with app deployment 357 00:16:50,960 --> 00:16:53,440 and service deployment because they've moved everything to 358 00:16:53,440 --> 00:16:55,280 Google Cloud. That's been a very expensive 359 00:16:55,280 --> 00:16:57,040 thing to do. But now they're mostly through 360 00:16:57,040 --> 00:16:59,400 that process. So we're going to see commentary 361 00:16:59,400 --> 00:17:01,760 on that as well. But overall, my expectations 362 00:17:01,760 --> 00:17:04,880 with Equifax is going into this week, it's going to be a rough 363 00:17:04,880 --> 00:17:06,680 1. The earnings reports going to be 364 00:17:06,680 --> 00:17:08,240 really tough. I believe there's going to be a 365 00:17:08,240 --> 00:17:11,480 lot of negative commentary, negative data pieces being 366 00:17:11,480 --> 00:17:14,400 shown, and the stock is likely to fall further. 367 00:17:14,720 --> 00:17:17,800 If that happens, I'll continue to buy because I'm not buying 368 00:17:17,800 --> 00:17:20,359 this company for the next two months or the next three months. 369 00:17:20,680 --> 00:17:23,640 I want to own this one through this entire market cycle. 370 00:17:23,920 --> 00:17:27,040 Through the other side of this, I believe that intrinsically 371 00:17:27,040 --> 00:17:29,400 Equifax is worth a lot more than it is today. 372 00:17:29,400 --> 00:17:32,800 Now Next up, we have the burrito company Chipotle reporting 373 00:17:32,800 --> 00:17:34,480 earnings Wednesday after market close. 374 00:17:34,760 --> 00:17:37,520 This company typically beats on the earnings per share because 375 00:17:37,520 --> 00:17:39,640 they have a, they have a huge degree of control over their 376 00:17:39,640 --> 00:17:42,720 margins, but it's iffy whether or not they'll beat on the 377 00:17:42,720 --> 00:17:45,240 revenue. So the top line is, is very 378 00:17:45,240 --> 00:17:47,040 iffy. I think there's a 50% chance of 379 00:17:47,040 --> 00:17:49,640 them beating the earnings per share they're likely to beat. 380 00:17:50,120 --> 00:17:52,920 My concern for Chipotle is in their guidance. 381 00:17:53,080 --> 00:17:56,000 I think they're going to be a bit cautious because we've seen 382 00:17:56,000 --> 00:17:57,720 what's happened with other food companies. 383 00:17:58,080 --> 00:18:02,120 Texas Roadhouse noted A notable slowdown the past few weeks 384 00:18:02,120 --> 00:18:03,600 prior to them reporting earnings. 385 00:18:03,760 --> 00:18:06,400 So overall, I'm cautious about Chipotle this quarter. 386 00:18:06,440 --> 00:18:09,360 I think there's a good chance that management will warn about 387 00:18:09,360 --> 00:18:11,040 demand. Now finally, we have a company 388 00:18:11,040 --> 00:18:13,440 that I've mentioned a few times, it's reporting earnings this 389 00:18:13,440 --> 00:18:15,840 week, but it's one that I've never invested in. 390 00:18:16,040 --> 00:18:19,680 It's ServiceNow. ServiceNow is very similar to 391 00:18:19,680 --> 00:18:22,360 Salesforce in a lot of ways. In fact, if I just give a brief 392 00:18:22,360 --> 00:18:25,560 summary of it, Salesforce is more for like the marketing 393 00:18:25,560 --> 00:18:29,800 salespeople, customer service. It's your communication between 394 00:18:29,800 --> 00:18:33,360 your company and the customer. It tracks all your leads and all 395 00:18:33,360 --> 00:18:36,400 the interactions you've had and it has a lot of marketing tools. 396 00:18:36,560 --> 00:18:40,000 ServiceNow is like the other side of things where it's more 397 00:18:40,000 --> 00:18:44,360 on the IT side, the process side, the HR side, all the back 398 00:18:44,360 --> 00:18:45,960 end things that happen with the company. 399 00:18:46,280 --> 00:18:49,720 So while Salesforce is more outwards customer facing, 400 00:18:49,920 --> 00:18:51,960 ServiceNow is more internal facing. 401 00:18:52,160 --> 00:18:55,240 Both of them serve different parts of organizations, but 402 00:18:55,240 --> 00:18:57,960 ServiceNow is a company that I've been looking at because on 403 00:18:57,960 --> 00:19:02,040 paper it matches the philosophy of the compounding machines 404 00:19:02,040 --> 00:19:04,400 better than Salesforce. They don't do as many 405 00:19:04,400 --> 00:19:07,760 acquisitions, More things are organically grown within the 406 00:19:07,760 --> 00:19:10,200 company. The company has substantial 407 00:19:10,200 --> 00:19:13,720 revenue growth, it has margin expansion, and it's even shown 408 00:19:13,720 --> 00:19:16,920 to have more operating leverage than even Salesforce. 409 00:19:17,440 --> 00:19:20,400 So this company in terms of compounding machines, looks like 410 00:19:20,400 --> 00:19:23,120 it has better overall characteristics than even 411 00:19:23,120 --> 00:19:26,360 Salesforce. The only issue with this one is 412 00:19:26,360 --> 00:19:28,800 it's substantially more expensive than Salesforce. 413 00:19:28,960 --> 00:19:31,480 So while I'm evaluating both of these companies, the 414 00:19:31,480 --> 00:19:34,280 characteristics and the valuations, I'm making judgement 415 00:19:34,280 --> 00:19:37,360 calls. And right now, even without good 416 00:19:37,360 --> 00:19:40,280 ServiceNow is how incredible the characteristics of this business 417 00:19:40,280 --> 00:19:42,200 are. I believe there's just better 418 00:19:42,200 --> 00:19:45,440 opportunities in this market, companies that are still really 419 00:19:45,440 --> 00:19:47,360 good that are selling quite a bit cheaper. 420 00:19:47,840 --> 00:19:50,320 But ServiceNow is just an incredible company. 421 00:19:50,320 --> 00:19:53,560 For example, if we look at what to expect this earnings report, 422 00:19:54,160 --> 00:19:57,120 we can see the history. This isn't a mistake. 423 00:19:57,240 --> 00:19:59,520 They never miss on their earnings per share. 424 00:19:59,560 --> 00:20:02,920 So statistically speaking, based on history, they have a very low 425 00:20:02,920 --> 00:20:05,160 likelihood to miss. Now with ServiceNow, I'm going 426 00:20:05,160 --> 00:20:07,680 to be looking at this report and seeing what type of new products 427 00:20:07,680 --> 00:20:09,840 are coming out with and specifically how they're 428 00:20:09,840 --> 00:20:13,160 leveraging AI because like all of these companies, they are 429 00:20:13,160 --> 00:20:15,760 implementing AI into every aspect of their business. 430 00:20:16,080 --> 00:20:18,880 But ServiceNow is a highly. Integrated product. 431 00:20:19,080 --> 00:20:22,800 Last quarter, ServiceNow reported a remarkable 150% 432 00:20:22,800 --> 00:20:26,200 quarter over quarter deal with their growth in their Pro Plus 433 00:20:26,280 --> 00:20:28,760 AI offering. So this is their version of 434 00:20:28,760 --> 00:20:31,480 implementing AI. It grew 150%. 435 00:20:31,840 --> 00:20:34,920 Obviously, that's from a very small base, so we want to see 436 00:20:34,920 --> 00:20:38,160 how that grows throughout 2025. Investors, of course, will be 437 00:20:38,160 --> 00:20:40,280 looking at their growth prospects for their top and 438 00:20:40,280 --> 00:20:42,000 bottom line. For example, ServiceNow is 439 00:20:42,000 --> 00:20:44,400 leaning more heavily into HR capabilities. 440 00:20:44,600 --> 00:20:46,960 We want to see whether or not they're able to continue taking 441 00:20:46,960 --> 00:20:49,920 market share there. Overall, I'm more bullish on 442 00:20:49,920 --> 00:20:52,560 these type of companies. I actually think that Salesforce 443 00:20:52,600 --> 00:20:55,200 and ServiceNow alike will have a decent report. 444 00:20:55,480 --> 00:20:58,560 They're not directly impacted by the tariffs, and if there's not 445 00:20:58,560 --> 00:21:02,120 significant economic weakness with people being laid off left 446 00:21:02,120 --> 00:21:04,720 and right, these companies should be able to still grow. 447 00:21:04,720 --> 00:21:06,400 But we'll see how things go this Wednesday. 448 00:21:06,520 --> 00:21:10,160 Now moving on, as we look at today's market that's deeply in 449 00:21:10,160 --> 00:21:13,000 the red, it continues to just go down further and further. 450 00:21:13,000 --> 00:21:16,600 Right now, it looks extremely red across the board. 451 00:21:16,600 --> 00:21:19,000 Even Netflix is just hanging on by a thread. 452 00:21:19,360 --> 00:21:22,760 Even Netflix is now just .3% in the green. 453 00:21:23,200 --> 00:21:25,920 So across the board, we have deeper and deeper red numbers. 454 00:21:26,400 --> 00:21:29,320 And most of this is spurred by commentary from President Trump 455 00:21:29,360 --> 00:21:32,400 over the weekend from CNBC. President Trump on Monday 456 00:21:32,720 --> 00:21:35,360 ratcheted up his pressure campaign against Federal Reserve 457 00:21:35,360 --> 00:21:39,360 Chair Jerome Powell, calling him, quote, a major loser and 458 00:21:39,360 --> 00:21:42,120 warning that the US economy could slow down unless interest 459 00:21:42,120 --> 00:21:45,240 rates are lowered immediately. Trump has said that there's 460 00:21:45,240 --> 00:21:48,280 virtually no inflation and that the cost for energy and most 461 00:21:48,280 --> 00:21:51,520 other things are on the decline. Quote, with these costs trending 462 00:21:51,520 --> 00:21:54,040 so nicely downward, just what I predicted they would do. 463 00:21:54,280 --> 00:21:56,880 There can be almost no inflation, but there can be a 464 00:21:56,880 --> 00:22:01,000 slowing of the economy unless Mr. Too late, a major loser 465 00:22:01,080 --> 00:22:03,840 lowers interest rates. Now, End Quote. 466 00:22:04,120 --> 00:22:08,400 Trump is ramping up the attacks on Jerome Powell, and the market 467 00:22:08,400 --> 00:22:10,400 doesn't like this for a couple of reasons. 468 00:22:10,760 --> 00:22:13,360 One of them is that Jerome Powell is a good Fed chair. 469 00:22:13,560 --> 00:22:16,560 He's actually been decent in terms of what Fed chairs are 470 00:22:16,560 --> 00:22:18,960 able to do. Now, it's very easy to criticize 471 00:22:18,960 --> 00:22:22,080 the Fed chair from a standpoint of sitting on the sidelines and 472 00:22:22,080 --> 00:22:23,760 looking at data after it comes in. 473 00:22:24,200 --> 00:22:26,440 But the Fed has to make very difficult decisions, and they 474 00:22:26,440 --> 00:22:28,920 incorporate a lot of data into those decisions. 475 00:22:29,240 --> 00:22:32,600 The Fed also is supposed to remain apolitical, not giving in 476 00:22:32,600 --> 00:22:35,200 to political pressures like what the president is doing now. 477 00:22:35,800 --> 00:22:37,880 And the market is concerned about this for a couple of 478 00:22:37,880 --> 00:22:39,880 reasons. First of all, the market does 479 00:22:39,880 --> 00:22:43,760 not like the idea of President Trump firing Jerome Powell. 480 00:22:44,040 --> 00:22:46,960 And it seems like it's getting set up that way a bit more and 481 00:22:46,960 --> 00:22:51,680 more as the criticisms get more ramped up, more ratcheted up, it 482 00:22:51,680 --> 00:22:54,680 seems like he's getting closer to actually taking steps to fire 483 00:22:54,680 --> 00:22:56,720 him. And that would cause chaos in 484 00:22:56,720 --> 00:22:59,040 the market. The market would look at that is 485 00:22:59,040 --> 00:23:01,600 another unpredictable thing happening now. 486 00:23:01,600 --> 00:23:04,680 We don't even know who the Fed chair is or what their history 487 00:23:04,680 --> 00:23:06,360 is. We know that Jerome Powell's a 488 00:23:06,360 --> 00:23:08,240 very stable, level headed person. 489 00:23:08,240 --> 00:23:10,760 That's data dependent. Who would be the new person 490 00:23:10,760 --> 00:23:13,680 that's put in as a Fed chair if Jerome Powell gets fired. 491 00:23:14,080 --> 00:23:17,320 So that's a big uncertainty. And I believe that if President 492 00:23:17,320 --> 00:23:20,200 Trump fires Jerome Powell that it will cause the market to go 493 00:23:20,200 --> 00:23:23,120 much lower. Scott Bessent knows that and I 494 00:23:23,120 --> 00:23:26,560 believe that he's advising Trump to not fire Jerome Powell. 495 00:23:26,600 --> 00:23:29,160 Another thing that investors are concerned about in particular 496 00:23:29,160 --> 00:23:32,320 with these attacks on Jay Powell is that it lays the framework, 497 00:23:32,320 --> 00:23:36,240 the pretext for if the US economy goes into session, it 498 00:23:36,240 --> 00:23:40,080 can be blamed on Jerome Powell, on him not lowering interest 499 00:23:40,080 --> 00:23:42,480 rates fast enough, him being too late. 500 00:23:42,840 --> 00:23:46,040 When in reality, the biggest factor going into that would be 501 00:23:46,040 --> 00:23:49,080 the tariffs, the additional tax, the friction that that puts on 502 00:23:49,080 --> 00:23:51,840 businesses. So it's also a little bit of a 503 00:23:51,840 --> 00:23:55,400 blame game, Saying this is going to be Jerome Powell's fault, 504 00:23:55,440 --> 00:23:58,960 he's too slow, it's going to cause economic slowdown are the 505 00:23:58,960 --> 00:24:02,120 words that President Trump used. In reality, these massive 506 00:24:02,120 --> 00:24:04,560 tariffs are causing businesses to slow down as well. 507 00:24:04,680 --> 00:24:07,320 So while there's multiple factors here, this also sets up 508 00:24:07,320 --> 00:24:10,240 for playing the blame game if we get into a recession. 509 00:24:10,320 --> 00:24:12,800 Now, even though President Trump is attacking Jerome Powell on 510 00:24:12,800 --> 00:24:15,720 these different Truth Social posts and tweets, it is still 511 00:24:15,720 --> 00:24:18,200 unlikely that he's going to take the action of firing Jerome 512 00:24:18,200 --> 00:24:21,160 Powell because he's likely been informed that that will cause 513 00:24:21,320 --> 00:24:24,400 more significant uncertainty and the stock market to react 514 00:24:24,400 --> 00:24:27,800 negatively in a very big way. I believe that this is more of a 515 00:24:27,800 --> 00:24:31,680 concern of setting the pretext of laying any type of upcoming 516 00:24:31,680 --> 00:24:34,120 slow down in the economy on Jerome Powell. 517 00:24:34,320 --> 00:24:36,600 Now moving on, we get to the report that Netflix reported 518 00:24:36,600 --> 00:24:39,040 last Thursday before the long weekend in the market. 519 00:24:39,360 --> 00:24:41,840 The report overall was really strong, being on the top and 520 00:24:41,840 --> 00:24:44,760 bottom line, giving very strong guidance, very optimistic 521 00:24:44,760 --> 00:24:47,000 management. Another thing the management did 522 00:24:47,200 --> 00:24:49,920 was they talked about the different rumors, the different 523 00:24:49,920 --> 00:24:52,720 reports, reports from the Wall Street Journal, the report that 524 00:24:52,720 --> 00:24:56,400 they're aiming for a $1 trillion market cap by the end of 2030. 525 00:24:56,680 --> 00:24:59,600 They're aiming to double their revenue, triple their operating 526 00:24:59,600 --> 00:25:02,520 profits, become a substantially bigger company. 527 00:25:03,040 --> 00:25:06,640 And they basically, without saying so, confirm the report. 528 00:25:06,920 --> 00:25:09,640 They said it was disappointing that it was leaked, deeply 529 00:25:09,640 --> 00:25:11,960 disappointing. But overall, they're long term 530 00:25:11,960 --> 00:25:13,480 thinkers. And I think there's a lot of 531 00:25:13,480 --> 00:25:16,320 room for Netflix to grow and become a more global company. 532 00:25:16,760 --> 00:25:19,120 And that brings us to phase two of this company. 533 00:25:19,720 --> 00:25:22,240 I've been invested in Netflix for some time. 534 00:25:22,280 --> 00:25:25,720 And in fact, right now, I must admit, Netflix is basically 535 00:25:25,720 --> 00:25:28,160 carrying My Portfolio. It's, it's just carrying the 536 00:25:28,160 --> 00:25:29,680 whole thing on its back at this point. 537 00:25:29,880 --> 00:25:33,320 If I didn't have Netflix in the story fund as a major position, 538 00:25:33,680 --> 00:25:36,000 the story fund would be doing dramatically worse. 539 00:25:36,240 --> 00:25:38,680 So this stock has been one of the best picks. 540 00:25:39,080 --> 00:25:43,480 It's now become my biggest position, $56,000 in gains, 541 00:25:43,800 --> 00:25:47,120 which is more than the entire rest of this portfolio combined. 542 00:25:47,520 --> 00:25:51,640 As Amazon, Google continue to plummet, Netflix continues to 543 00:25:51,640 --> 00:25:55,040 soar. Year to date, Netflix is U past 544 00:25:55,040 --> 00:25:58,320 13%. Over the past one year with the 545 00:25:58,320 --> 00:26:02,080 QQQ being up 3%, Netflix is up 80%. 546 00:26:02,400 --> 00:26:06,600 So the relative performance of Netflix against the QQQ or the 547 00:26:06,600 --> 00:26:10,360 S&P 500, it's not even close. It's dramatically better and 548 00:26:10,360 --> 00:26:13,360 that's the reason that this portfolio has outperformed the 549 00:26:13,360 --> 00:26:18,000 S&P 500 to the degree it has. But so far, up until this point, 550 00:26:18,400 --> 00:26:22,960 my thesis on Netflix has been that it is the best position to 551 00:26:22,960 --> 00:26:26,040 win the streaming war. The whole debate is over all of 552 00:26:26,040 --> 00:26:30,880 these different streamers like Disney, HBO Max, Peacock, Apple 553 00:26:30,880 --> 00:26:33,760 TV and Amazon. The whole debate was what will 554 00:26:33,760 --> 00:26:37,240 win, who will come out on top. And I made a heavy bet that 555 00:26:37,240 --> 00:26:40,040 Netflix would be that winner. And about a year ago, I made the 556 00:26:40,040 --> 00:26:41,480 call. Netflix is 1. 557 00:26:41,520 --> 00:26:44,760 They beat the competition and now I think that that's become 558 00:26:44,800 --> 00:26:47,840 more clear over the past year, almost indisputable. 559 00:26:48,040 --> 00:26:51,040 Nobody even argues that Netflix won the streaming war. 560 00:26:51,400 --> 00:26:53,840 And I think it's time to move on to phase two of this battle. 561 00:26:54,280 --> 00:26:57,400 So far the battle has been Who Will Win the streaming war. 562 00:26:57,720 --> 00:27:02,400 Now the next phase of Netflix's story, I'll call it Phase 2, is 563 00:27:02,400 --> 00:27:06,040 global domination. Which company in entertainment 564 00:27:06,040 --> 00:27:09,040 will become the globally dominant, total addressable, 565 00:27:09,040 --> 00:27:12,640 market saturated company? Which one will offer global 566 00:27:12,640 --> 00:27:16,640 entertainment to every country, every single culture and be the 567 00:27:16,640 --> 00:27:20,160 one that everybody turns to? There's going to be huge network 568 00:27:20,160 --> 00:27:22,200 effects that carry one of these winners. 569 00:27:22,360 --> 00:27:25,440 And now Netflix has moved firmly on from that phase one category 570 00:27:25,440 --> 00:27:28,560 of just winning the streaming wars, becoming the first scaled 571 00:27:28,560 --> 00:27:31,440 streamer to be profitable to much bigger and larger 572 00:27:31,440 --> 00:27:33,920 aspirations. Now they've moved into the 573 00:27:33,920 --> 00:27:38,360 category of chasing the entire world as their market, becoming 574 00:27:38,480 --> 00:27:41,760 a total addressable market, saturated company in streaming 575 00:27:41,760 --> 00:27:45,080 and entertainment, expanding their value proposition, being 576 00:27:45,080 --> 00:27:49,040 just as saturated in all over the world minus China and Russia 577 00:27:49,360 --> 00:27:50,880 as they are in the United States. 578 00:27:51,280 --> 00:27:52,840 They have a huge task ahead of them. 579 00:27:53,120 --> 00:27:57,040 The reports right now show that Netflix has around 300, maybe 580 00:27:57,040 --> 00:28:00,000 310 million subscribers after this most recent quarter. 581 00:28:00,400 --> 00:28:03,880 And the total addressable market of broadband enabled households 582 00:28:04,120 --> 00:28:07,440 X China and Russia is 750 million. 583 00:28:07,840 --> 00:28:11,720 So they're only 40% of the way through their total addressable 584 00:28:11,720 --> 00:28:13,760 market. And as they work their way 585 00:28:13,760 --> 00:28:16,720 through that market, that total addressable market will continue 586 00:28:16,720 --> 00:28:20,040 to grow as more households become Internet connected. 587 00:28:20,480 --> 00:28:24,040 So Netflix is now into phase two global domination. 588 00:28:24,360 --> 00:28:26,760 I'm going to continue to hold the stock throughout that 589 00:28:26,760 --> 00:28:29,480 journey. But this report was fantastic. 590 00:28:29,560 --> 00:28:31,560 Netflix deserves to be at the price that it is. 591 00:28:31,920 --> 00:28:34,920 And I think over the fullness of time, the next 5 to 10 years, 592 00:28:35,280 --> 00:28:37,240 this stock will still outperform the market. 593 00:28:37,240 --> 00:28:38,480 That's going to be it for this time. 594 00:28:38,520 --> 00:28:39,320 See you in the next one.