Today on the Joseph Carlson Show, Apple is feeling the
pressure to get into AI, and we have lots of rumors of the
different AI integrations that Apple will be doing with your
iPhone. Netflix has been hit with a $170
million defamation lawsuit for their documentary drama Baby
Reindeer. And Netflix apparently is
testing a UI change that is horrible, something that should
not happen. We'll be going over what they're
doing with their user interface. And then finally, we have the
return of Roaring Kitty himself, live streaming to 600, 1000
concurrent viewers. 600,000 is an enormous number of viewers.
We're going to summarize some of the key points that he's shared
in his stream. Let's first start off with a
portfolio update. This is my personal portfolio
called the Passive Income account.
I've been tracking this one publicly for years.
If you want to see the future of this and different buys and
sells, I'm doing different things I do with this portfolio
and its performance. You can do so for free by
subscribing to the channel. If we look at the holdings,
there's been some that have outperformed this year and some
that have underperformed this year.
The two biggest outperformers have been the food companies,
Texas Roadhouse and Chipotle. Texas Roadhouse is bouncing
around $170 per share. This company not only has
appreciated a lot this year, it's up 41%.
So I have the total performance of $38,000 in gains in this
holding. And Texas Roadhouse has also
paid $2500 in dividends. I continue to hold this one
because I think it's a genuine compounding machine.
A company that has great fundamentals, great future
prospects. It doesn't trade at a crazy
valuation yet, and the company continues to grow with strong
momentum. While other restaurants like the
Red Lobster and Cracker Barrel struggle, Texas Roadhouse
continues to grow its average weekly sales.
To put in perspective of how well Texas Roadhouse has
performed this year, if it was placed into the S&P 500, which
right now Texas Roadhouse is not in the index, but if it was in
the index, Texas Roadhouse would be the 13th best performing
stock this year out of 500. So it's done incredibly well.
Another great performer this year is Chipotle.
Chipotle's now at $3200 per share ahead of its stock split.
Chipotle is an elite tear of top performing quick service
restaurants. The only ones that come close
are companies like Chick-fil-A which are private or other ones
like Cava which are much smaller or ones like Wingstop which are
franchise. Chipotle sits in the mix is a
wholly owned restaurant that continues to put up incredible
sales growth. Their average unit volume
continues to grow while they open up new total locations.
Growing both of these at the same time, both their number of
locations and sales per location is what's causing the stock to
go up. So as long as these two KPI's
continue, this stock will continue to rise.
Salesforce is a new purchase, a company that I was buying in
only two months ago and they had a dramatic fall after their most
recent earnings. It's an unfortunate circumstance
when I'm already building a position in a company and then
it has a huge fall, but I have not lost hope with this holding.
After Salesforce fell in price, I continue to buy the stock.
This is something that I try to do anytime one of my core
holdings falls. I try to pick up more and more
of the company at a cheaper price.
This time I snagged it for $221.00 and the stock has had a
bit of recovery. It went from 2:20 to 2:40 and
it's working its way back up to 300.
Salesforce is currently my only stock in the red and I don't
know for sure. Nothing's guaranteed, but I
think eventually I'll be able to turn this one back into the
green. So overall, all I've been doing
to generate these returns is holding on to good companies and
buying more of them when they dip.
Now, one of the companies that I've held for quite some time is
Apple, and this one has been a huge winner over the years, But
Apple has struggled recently with getting into the AI game.
Apple has been one of the outliers, one of the companies
that's not talked about much in the battle of AI because they
don't have a large language model.
They don't have a chat bot like everyone else, but Apple has
been reportedly working aggressively on their AI
strategy. Let's first take a look at what
Apple's actually done to get into the AI game.
The most interesting thing to me beyond the open AI report that
we keep hearing about, Bloomberg reported last week that you're
there's going to be deeper voice controls for those first party
Apple apps. So not, not third party
necessarily. That to me is a signal of where
they're going. Meaning you can just tell your
phone what to do, that apps can talk to each other better, you
can copy and paste between apps what have you.
One thing that's mentioned there, I think goes deeper into
Apple's AI strategy. You noticed that he said that
the AI is reportedly going to work better than with other
random apps. Apple has done this time and
time again. They have deeper integrated
options with their core apps like FaceTime, Photos,
Messenger, than they have with other third party apps.
That creates a unique value in the Apple ecosystem.
So Apple's going to be integrating all of this AI stuff
deeply into all of their core applications.
But what exactly does that mean? They're of course planning on
revamping Siri. Siri right now is pretty bad.
The assistant doesn't do much for you.
It can answer basic questions, but it feels very rudimentary
and very old. So of course Siri's going to be
dramatically enhanced with artificial intelligence.
Apple's also reportedly calling their AI systems Apple
Intelligence. There's going to be new OS
features for the iPhone, iPad, and Mac, new software for Vision
Pro, Apple Watch, and Apple TV. They're also going to be
wrapping AI into every bit of functionality in the device.
Customizable emojis, photo app editing, Safari webpage
summaries, automatic message reply suggestions, voice memo
transcriptions, catch up features for notifications.
Apple's reportedly working on a password app.
This has become a big business. There's lots of companies like
One Pass that have made a business out of selling a
subscription to a password app. Apple will build this into their
ecosystem, not to charge users, but just as an additional thing
to keep you glued to their ecosystem.
They're reportedly working on a new calculator app for the iPad,
a health app with improved blood pressure monitoring, and so on.
The answer for Apple was pretty obvious.
They already own the most OP device in the world, which is
the iPhone. It has been incredibly difficult
for anyone to come out with a better device than the iPhone.
With that device, they're now going horizontally, integrating
different applications, different functionalities like
they have for the past couple of years.
Apple is simply further expanding the playbook they've
done, but this time accelerated by AI.
Apple's currently facing a lot of challenges, including
increased competition in China, increased regulation in the US
and Europe, and a stock that has a higher valuation.
So there's a list of challenges for Apple stock.
But the reason I continue to hold it is I still believe they
have a Moat. I still believe the company does
have a decent Moat, and if artificial intelligence can
enhance that Moat, it'll make the company more powerful.
So I'm going to continue to hold this as a $43,000 position,
currently up $26,000 in it. Now we also have the epic return
of Roaring Kitty where he had a live stream with over 600,000
concurrent viewers. That is an incredible amount of
viewership for a YouTube live stream.
For any live stream, but especially one for someone doing
stock analysis. Obviously the amount of retail
investors and the amount of public interest following
Roaring Kitty or Keith Gill is massive, but putting on display
on YouTube really showed the extent of how big it is. 600,000
concurrent viewers is really incredible.
And he went over a couple different things, but I think
the biggest take away was GameStop analysis.
GameStop is ultimately an antiquated business, is a
company that sells physical copies of games and game
merchandise. That's something that Amazon,
Microsoft, Sony, all these other companies have taken their
market share. So Gamestop's existing business
is not good, but Keith Gill realizes that.
He knows that their current business strategy isn't great,
and he highlights a different path for GameStop.
If we look at the fundamentals of this company, you'll notice
that they have one thing. Although GameStop does not have
a great business strategy, they have a lot of cash.
This company is cash rich. They have only $386 million in
capital leases. They have debt of only $17
million and then a cash balance of $1.2 billion.
So Keith Gill's thesis on GameStop has moved from
investing into a legacy antiquated game company now to
investing in something that sounds a bit more like a venture
capital investment. You hand your money over to
people that are executives, that have different ideas of what
they want to do with the money, their founders and business
people, and then hopefully they can create value with the money
you're giving them. That is the thesis for GameStop.
It's no longer a game company. It's a company that has billions
in cash where the management has time to figure something new
out. So all of this boils down to
100% trusting that the management team can figure out
something creative to do with this money, which of course is
not a great investment strategy. The reason that VCs invest in so
many different companies and they have so much
diversification is because there's such a high probability
that their investments go to 0 that the management team cannot
figure out something productive to do.
GameStop is far more likely to burn investors capital than to
create long term value. We can see the same result with
AMC, another company where investors were counting on the
management. The value that the management
test created is a stock price that went from $600 to $5.
I believe it's Keith Gill's right to have this case, to have
this position and to express his case to a large audience.
That's what people do on CNBC every single day.
But I do not believe he's correct in his assessment of
GameStop. This is a stock not reliant on
fundamentals or future cash flows.
It's a stock reliant on a social movement.
And as such, it's an incredibly dangerous investment.
Now, we also have news that Netflix is being sued for $170
million in a defamation lawsuit. This is for the show Baby
Reindeer Fiona Harvey, a Scottish attorney living in
England, who says the character Martha on the widely viewed
limited series is clearly based on her.
She filed a lawsuit in federal court in Los Angeles.
It alleges that Netflix was negligent and intentionally
subjecting her to emotional distress and violated her right
to publicity. She goes on explaining that
Netflix told lies in the documentary that things were
exaggerated, which puts this documentary in line with every
other documentary. She said the defendants told
these lies and never stopped because it was a better story
than the truth, which should be surprising to no one.
Documentaries on every service, including Netflix, are shown
with an incredible amount of bias, limited information,
selective truths, and exaggerations.
Netflix said that they took great lengths to hide her
identity, but Internet sluice eventually get to the bottom of
everything. Netflix also responded saying
that we intend to defend this matter vigorously and to stand
by Richard Gad's right to tell his story.
Now this may seem like just a one off lawsuit, something
that's frivolous, but if she actually wins this lawsuit and
gets this ridiculous amount of money, $170 million, that would
set a precedent that would make it difficult for any other
companies to make documentaries. Companies like Netflix would
have to calculate into the production and the ROI of their
documentaries the potential for paying out incredibly expensive
lawsuits, which would ultimately result in a huge reduction in
documentaries made. Knowing that Netflix could be
held liable even after taking great lengths to hide her
identity could set a dangerous precedent.
So this is something I'm going to continue to follow.
Now, we also have news from Netflix that they're redesigning
the homepage, and they say that they're going to simplify it.
At first this sounds good, A simplification's OK.
But then you see how they're doing this and how it's similar
to what Amazon's doing. Netflix apparently is testing
out and finding success in the user interface, where if you
freeze on a different tile, so you're looking through the
shows, and if you pause on any of them, it blows it up to like
full screen, and then it starts to autoplay, which I believe is
the worst user interface possible.
This is what Amazon and HBO Max already do.
Both of them have it so that you have to continually scroll
through the tiles, otherwise if you freeze at all, that single
one takes up your entire screen. Netflix says that we see members
doing gymnastics with their eyes as they're scanning the
homepage. Netflix's senior director
product tells The Verge We really wanted members to have an
easier time figuring out if a title is right for them.
Even the comments highlight the problems with this user
interface design that everyone's switching to.
Resizing a window on hover is a terrible UI choice, in my
opinion. One person says.
This is infuriating. It forces you to keep moving the
cursor to be able to keep visually browsing what's on the
screen. If you ever pause just for a
tattoo long, it'll maximize the icon you're on, even though you
may be looking somewhere else. It kind of makes you look at one
thing at a time. I'm usually a fan of the
different changes Netflix does, and this is the first one that
causes me alarm by moving to an inferior user interface.
Hopefully they don't make this move, but ultimately they'll
make the move they believe is right, which they test with
engagement metrics and with lots of data that we can't see.
Now, that's all for this time. If you like this type of content
and you want to see more of it, you can check out the Patreon in
the link in the description below.
We also have over 100 exclusive episodes, and the Patreon
membership also includes full access to qualtrum.com, which is
the stock analysis tool that I've built and use.
That's all for this time.