Welcome back, everyone. We have a lot to get into, we
had some news over the weekend, a lot of news.
In fact, on one of my biggest Holdings, which is Apple, Apple
still the top holding right now because it's had a lot of gains.
I'm currently at fifty, four thousand dollars in this
company, with 19,500 of it being gains.
Now, Apple had their Apple event, where they introduced all
their new devices with their small.
Iterative changes changes like, the dynamic Island.
Now that little Notch at the top of the screen, it's Useful.
It can actually do some things. These little changes to many are
being mocked like apples. Not innovating the company's
reached a plateau. It's not going anywhere.
All these type of flat arguments I'm just going to say it right
here. The commentary that I hear from
the majority of investors are wrong on Apple.
There's simply wrong. They believe the company has
plateaued, it's hit a peak, it doesn't have much room for
growth apples. Just an older company that's
matured and it doesn't really have anywhere to go from here.
These comments from investors. The Apple has already matured
and it has nowhere else to go is missing the forest from the
trees. They're missing the main picture
here and why this company eventually we'll get to over
$200 per share. So in this video, I'll be laying
out the case of why Apple will get above $200 a share.
Now, I also just recently had some big news Vici raised their
dividend by 8%. I'll be giving my thoughts on
that as Vici is one of the biggest Holdings in my portfolio
and fact right now, it's my second largest holding so I'll
be going over this dividend. Raise news and You know what?
I think of it and then we also have the subject of inflation to
go over tomorrow. The CPI readings from August are
going to come out and that will dominate the new cycle for the
rest of the week. Everyone will be talking about
inflation. Now the news media takes a very
short term view on this subject. They say falling gas prices are
raising. Hopes that inflation is slowing
down. That's the news right now.
Inflation might be coming down. So what do you know, the market
right now is going up, this is how my yah pick the market is in
the short term, the new Media is focused on day by day week by
week and month by month. They're not focused on a
multi-year period. They don't take an eagle eyes,
view on anything. But on the Joseph Carlson show,
we do take an eagle eyes. You, if we go back five months,
I came out with a video that was kind of a contrarian video most
people at the time, we're worried about inflation, going
up, and up, and up. Because at the time, it was only
going up. And I came out with a video
saying that we hit Peak inflation, we already hit it and
inflation's going. NG to go down.
Here's why? And I want to go revisit that
case because I think this video will prove to be correct.
So as always, we have a lot to jump into in this episode.
Let's go ahead and start off with a quick portfolio update
and then we'll jump into the Apple news.
Now this is my portfolio, the passive income account, it has
three hundred and sixty six thousand dollars of value, 43
thousand dollars in gains and it is a dividend growth portfolio.
So a decent part of the overall returns is going to be the
compounding effect of these great companies paying me
dividends. And then, these dividends being
reinvested into sometimes different companies that offer
better value but are also dividend-paying companies that's
the compounding life cycle of this portfolio.
Great companies that pay dividends the dividends buy more
shares of different great companies that pay dividends.
Now, one of the most important companies in this portfolio is
Apple and apple had their major event last week and I want to
jump in and give my quick take on this event.
The first thing that I want to say is that investors on Apple,
the majority of investors that I see cover.
This stock and commentate on this stock, and different people
on Reddit, and Twitter, and social media, and YouTube, most
of them are wrong. They're dead wrong on Apple, and
they're missing the forest from the trees, they focus on these
little things like this thing right here.
This island that changes and now it's Dynamic.
And they mock it saying the apples no longer an Innovative
company is just doing these little incremental, iterative
adjustments to its phone and it's basically flattened out.
There's no room for the phone to mature or grow.
Any more at this point investors commentary on the Apple watch
Ultra this new more rugged. Big extreme Apple watch was just
as erroneous investors looked at this and said who would pay $800
for a rugged Apple watch and this isn't as good as the Garmin
or name off some other extreme watch that's been doing it for a
while longer. They're doing these direct
comparisons from watch to watch. Investors are looking at this
all wrong. I heard a lot of the same
chatter around the Apple earpod Pro 2's the even though they
have a new case and you can track the case as better,
charging better noise cancelling.
All these little iterative adjustments, most investors take
away is that this wasn't that impressive of an event.
There wasn't anything that blew them away and the apples not
really innovating at the same Pace that they used to.
The company is matured, its kind of washed up at this point.
Apple's no longer the Innovative young iconic company that they
To be and many investors in their series of incorrect
assumptions, go so far as to say that Apple shouldn't be trading
at $160 per share. It shouldn't be trading on a 24,
P/E ratio. The company should be knocked
back down to a 15 PE back down to $100 per share.
All of this is wrong investors. Here are wrong on Apple, and
I'll lay out and explained very clearly why they're wrong.
First of all, the complaints about Innovation, let's just
revisit some investing He's here, stocks do not go up
because of innovation. That is not a reason that stocks
go up in price if a company's more Innovative, it does not
mean the stock will go up. So people saying that Apple's
not innovating enough there for their stock.
Price should go down are making judgments based off of false
premises stocks. Do not go up because of
innovation, and they don't go down because of a lack of
innovation. Innovation is not a driver of
stock prices. If Innovation was the primary
driver of stock prices, Then why is the ark Innovation ETF the
focus is on investing in all the most Innovative companies in the
world down. 62 percent over the past trailing year.
These so-called Innovative companies are innovating at a
faster Pace than the rest of the market yet.
This is the worst performing Fund in the past year in the
entire fund management industry. Well, again, the answers simple
stocks don't go up because of innovation, stocks, go up
because of money, because of earnings.
And because of free cash flow, profits Drive stocks up.
Upward. Not Innovation.
And one thing. Apples, incredibly good at even
better than Innovation is making money last year.
Apple made ninety two point nine, five billion dollars in
free cash flow. That's money left on the table
after paying for all their Capital expenditures for Apple
to do whatever they want with. And the company does put this
money to use in most cases they do it's called BuyBacks, which
is buying their own stock. So, that's the first problem
with the Apple bears with the people thinking the stock is
going to get cut. Half the problem with this
assumption is that you'd have to have a lot of people selling the
stock and not a lot of people buying the stock.
We know that there's going to be one big buyer of Apple stock all
the time and that buyer is Apple.
They are chunking away at their share count, every single year.
Lowering, the amount of shares outstanding apple is the biggest
buyer of their stock. So apples already a highly
profitable company that any time the stock dips, they can simply
buy it back themselves further, putting up.
Upwards pressure on the stock price, but that isn't the
biggest reason that these Apple naysayers are wrong.
There's another thing I want to focus on that again, is left out
of the conversation all the time.
When it comes to Apple, see the problem is, anytime an Apple
event happens, everyone focuses on the hardware.
They focus on the actual devices like the new watch coming out,
the new form factor for the phone.
There's a new camera, the new are pods.
They focus on all the new devices and that isn't the
biggest growth driver for apple and Apples Revenue has been flat
for the past year. It hasn't really been growing
over all the past. Couple of quarters.
It's been it mostly around the same area.
Apple Skeptics will say that. The company's growth is
basically done the company's reached maturity.
It's going to be this old kind of Boomer stock that just pays a
dividend and it won't really have any strong Revenue growth,
the prom with looking at things through this lens of total
revenue without breaking down. The revenue is not all revenue
is the same some revenues worth a lot more than other Revenue
for example, Walmart's Revenue last year was over half a
trillion dollars, it was five hundred and seventy two billion
dollars. This company has massive amounts
of Revenue, but yet a company called Microsoft is worth over
five times what Walmart is despite having less than half
the revenue, how can a company? Have less Revenue be worth five
times as much. It's because of margins,
Microsoft's revenue is more valuable than Walmart's revenue
and likewise we can actually look at Apples Revenue, segment
breakdown. Apple earns Revenue through
different business lines and those revenues are of different
value. The most valuable part of apples
revenue is the highest margin portion of their revenue called
Services. Services includes AppleCare
Apple music. Apple news, Apple Fitness, Apple
TV, plus all of their app store sales, all of the stuff that's
completely digital. That has relatively speaking,
no, marginal cost of reproduction.
These are things that cost nothing to really make but they
can sell it to as many people as they want.
Digital sales has High-margin revenue.
And this is a portion of Apple. That's growing at a very brisk
Pace over the past. Four quarters, their service
Revenue has grown at above 12% per year, that is very fast
growth, and a consistent basis, that's faster than most
companies. And this has gotten to a point
where just last quarter was Nineteen point seven billion
dollars up. 12 percent year-over-year this is just
their service revenue and what is driving all this service
Revenue growth? Will it subscriptions the
reoccurring Revenue that Apple's working on growing?
And I would say that they're doing a pretty good job.
If Morgan Stanley's research on this subject is anywhere close
to correct. They estimate the apples
growing. Their service Revenue
subscribers. The amount of subscribers by 30
to 40 million. New subscribers, every single
quarter last quarter. They estimated that they had 860
million subscribers. This chart is growing fairly
quickly. It looks like a growth company
and this is the most important type of growth that the company
could have. If the He was growing their
hardware sales and their subscribers were going down.
That would spell trouble for Apple.
They'd be going in the wrong direction.
That's not what's happening their phone and device sales are
going along as normal, but more importantly, their subscription
revenue is growing. So when you see investors, look
at the total revenue for apple and say that, the company's
growth is slowing their top line, revenue slowing down and
they've obviously plateaued because they're not innovating.
There's multiple wrong assumptions there.
First of all Innovation doesn't drive stock price appreciation.
Prophets Drive, stock price appreciation, apples, top line,
revenue is slowing. That's correct.
But their most important form of Revenue.
The highest margin portion is continuing to grow at a very
high pace and that is their subscription Services.
That's the reason that we can look at different ratios from
Apple like their gross margins and even though they kept the
prices, the same during a time of high inflation, they will
continue to keep gross margins of 42 to 43 percent without
increasing price. Isis at all.
That is because of service Revenue subscription revenue and
higher efficiency with their products.
Apple stock isn't going to hit two hundred dollars because
they're the most Innovative company in the world.
The reason that Apple will hit two hundred dollars per share is
because they're going to make more money than any other
company in the world. So as of right now, I do have a
heavy bed on this company I could sell and take profits.
But I'm going to continue to hold it until I see the story
change right now. I consider Apple to be a
consumer defensive company like, Kellogg's or Oh soup, but they
have better economics, they lock and customers.
They keep them in their ecosystem and they eventually
slowly push them into subscriptions where they get
very high margin Revenue. That's the story of apple.
And so far, I don't see that changing now, there's always a
chance with every bad I make, and every company invest in
that, I could be wrong. So, maybe in this case, the
Bears are right. And Apple stock will go down to
a hundred dollars a share, but I don't think that's going to
happen in my opinion. My thoughts on this and where my
He is I think the stocks going to $200 per share.
So as of right now, I'm staying invested.
Now, we do have to talk about Vici here for a minute because
we had some great news from this company.
This has been one of the stories that I think has been one of the
cleanest investing stories in my portfolio.
Meaning the company operationally has been
fantastic. The leadership has executed
perfectly, in my opinion, they haven't made really any seeming
mistakes. The stock price is appreciated.
The dividends have grown the operating.
In the company's profits, have grown.
And just recently, they announced an eight point, three
percent increase to their dividend bringing it to 39 cents
per share per quarter from 36 cents per share per quarter.
Now, I know if you're new to investing an eight point three
percent increase doesn't seem like anything fantastic, but
that is a substantial passive income increase for doing
nothing. I literally did nothing for this
stock to pay me more. And these profits aren't just
because the company's paying out a higher and higher amount.
It's because the company is actually growing their rents.
They're growing their income and then the returning that from the
company's, paying them rent to me the shareholder.
So when I look at Vici, it meets all the qualifications.
I look for for a dividend Growth Company.
It pays me a growing dividend on an incremental basis.
It has stability, I think it has a wide mode, it has great
leadership and the stock is continuing to increase the
dividend over time without me. Even reinvesting.
Right now I have 42 thousand dollars in this company.
That's around 1240. Is so I am heavily invested in
Vici. It's my second largest holding
because of the appreciation, the company has had, and I've really
enjoyed the dividends that it's paying.
Here's the company's dividends over time.
The first one was $77. That's the first month that I
was buying into the company. Heavily.
I made a trip to Vegas. I saw how completely packed it
was. I looked at different
opportunities to invest there because I wanted to own a part
of it. And that's when I started doing
my initial research back in July 8th, I bought in heavily in the
company buying 20. A thousand dollars worth.
And then the more research I did, the more I invested in the
company, even though the stock price at this time October, it
started to Trend downwards and I was receiving those, those
criticisms on YouTube, I continue to invest in the
company at one point over doubling my position, the
dividends went from two hundred and sixty two dollars per
quarter to four hundred dollars then 406 and then the last one
was for 45. Now I've done the math on what
this 8% increase. Will be and it will add around
two hundred dollars per year to my Vici position.
So roughly around $50 per quarter.
So, now without me doing anything with my share count
being the exact same with, no drip, no reinvestment.
My dividend will go from $445 to around 500 dollars per quarter.
That is a significant amount of income from one company to
thousand dollars per year from Vici alone.
So even though I'm not actively buying Vici right now and when
they pee A dividend. I don't reinvest it back into
beachy, I'm very happy about this.
Raise that 8% increase. Bumping the dividend up to $500,
makes it so that every three months I get to pick out what
company, my portfolio deserves, this Capital, which one is
presently the most undervalued and that further compounds, the
portfolio. And in terms of VG's, dividend
raises and my expectations. This is well in line with my
expectations, the company is a dividend grower.
They've grown their dividend every single year, since 2007,
15. Since they first started, I
think they'll do the same next year.
A seven to ten percent dividend raise.
So thank you, Ed Pitonyak and the team at Vici.
I appreciate your hard work. Now, moving on we have to talk
about inflation and I'll give you my prediction of the
inflation reading tomorrow as well as a call.
I made earlier this year. Now, before we jump into this
news on inflation, I have to give a shout out for today's
sponsor, which is the Joseph Carlson patreon.
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Developed with a previous co-worker.
That's a suite of software for investors.
One of the big features on this is qual term, insights.
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displayed on a single page. You can blow up any of these
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includes a portfolio dividend, tracking tool called qual term,
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Like I'm going to get $183 from Texas Roadhouse on the 23rd.
It shows you your growth and dividends over time.
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Now, getting back to this, major news, we have inflation data
coming in for August tomorrow, that's when we find out.
What inflation was like last month?
It's trailing data, but it's still very important.
It affects the interest rates. It affects the feds actions.
And ultimately, it affects Equity stock prices.
So this is going to be the big piece of news that investors
talk about for the rest of the week.
The inflation data will be on the front page of Barons and
Wall Street Journal and financial times and everywhere
you look and I want to give a couple predictions and overall
give more of an eagle eye view of what direction I think
inflation is going now. One thing that I'll mention is
that the market overall investors and especially the
news media are very myopic meaning that they don't take an
eagle eye view. They look at everything from
month to month week to week, and day-to-day their short-term
Focus, because that's what generates clicks and money.
But if you actually back up and take an eagle eye view, we can
see a clear Trend in the way that inflation is turning out,
this is what inflation looks like, overall, this is the core
CPI, which is when you rule out some of the more All tol
portions of inflation. And you look at the core basket
of consumer goods for inflation. This is what it looks like since
January of 2020, it was normal at that.
Point going from 2 percent down to 1.3 percent.
Then, of course, we had covid, it actually went down a little
bit when covid first started, but then quickly, when the
stimulus came out and Supply Chains, Got disrupted and
everything happened. Inflation started to spike going
up to three percent, three point, eight percent 4 percent,
and then climb, Among all the way to six point five percent in
March of 2022 inflation, hit its peak which was six point.
Five percent. Now at this time, inflation was
only going up if we erase the right half of this graph after
March, or 2022, there was nothing but seven consecutive
quarters of inflation going up. It looked like the future is
pretty Grim. But I made a pretty contrarian
video at that time saying that I thought it was the peak.
I thought that inflation was going to go down.
After this point, the video that I released in March of this year
was called inflation. Is going down here is why the
thumbnail of it said we hit the peak.
A lot of people say that these type of videos are clickbait or
that I'm just trying to get clicks there.
But what I actually said in the title and the thumbnail of this
video were my thoughts on where inflation was going.
Now my thought process in arguments in this video that I
released in March, we're pretty simple.
I thought that inflation has ran up to the max extent commodity
prices were coming down. Whew.
Oil prices were starting to crack and the overall
year-over-year comps for inflation the previous year.
We're going to become much easier based off of last year's
core inflation data side out. There's a very good chance that
inflation would start to go down and that's really what we
started to see. Just to put this in perspective,
here's what the call looked like.
This is when I said that inflation at hit a peak, it was
exactly on the highest month. Now I don't say this to brag and
I know that this is me highlighting one.
Correct call that I've had. But this is a pretty significant
call. All highlight when I get things
wrong when I make mistakes, but I'm also going to highlight when
I make a correct call, this is the exact month so far that core
inflation. Hit its peak every single,
subsequent months, since March 20, 22 inflation has come down
incrementally even by just a small amount.
Now there's different analysis and projections on what the data
will be released. Tomorrow.
Most people believe that the overall inflation rate will be
around 8% and that quorum. Inflation.
This number here will go back to 6.1% Soul actually tick back
upwards a little bit. That's where the consensus lies.
But there are some people that think that it's going to
continue to go down at least the core inflation.
So we'll have to wait to see what happens tomorrow, but even
if it goes up a little bit in August, I still think overall
most of these projections are correct over the upcoming six
months inflation and core inflation.
Should tick downward. If that happens, it'll give the
More leverage to be able to do what they want.
They may not have to raise rates as aggressively as they're
projecting right now and if the inflation data comes in
underneath expectations for both overall inflation and core
inflation, I could see investors really liking that news and
stocks going up for another day. We had a green day today in
anticipation of the inflation data if it does do.
Well, if inflation comes down quite a bit, I think we'll see
another big green day. So that's my prediction in the
short term. Nobody knows for sure.
Sure, but I think overall inflation will continue to tick
downward and I think overall my prediction that inflation peaked
in March will prove to be correct.
Now, that's all for this episode.
I hope you enjoyed it and subscribe.
If you haven't already, I'll have more commentary on upcoming
news, and I'm going to have more research on different companies,
that I'm actively buying. So if you want to see some
in-depth research on these different dividend-paying
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