1 00:00:00,080 --> 00:00:02,960 Leading into Black Friday, we saw a lot of videos like this 2 00:00:02,960 --> 00:00:04,200 one, guys. Check this out. 3 00:00:05,680 --> 00:00:08,080 Where is everybody? Like, there's nobody here. 4 00:00:08,080 --> 00:00:11,640 Dude, what the Is this Black Friday for real? 5 00:00:12,360 --> 00:00:14,840 Guys, the line at Starbucks is longer than. 6 00:00:15,600 --> 00:00:20,560 Any other line. Apparently coffee is the hot 7 00:00:20,560 --> 00:00:23,800 ticket item this Black Friday. I'm just absolutely mind blown. 8 00:00:24,680 --> 00:00:26,840 Guys, there's nobody here. Look at the. 9 00:00:26,840 --> 00:00:29,560 Line Starbucks, Starbucks is is busy. 10 00:00:30,240 --> 00:00:33,080 The rest of Target dead. Nothing was selling Black 11 00:00:33,080 --> 00:00:34,760 Friday. It was going to be a failure. 12 00:00:34,920 --> 00:00:37,920 Shopping mall centers are entirely empty on Black Friday, 13 00:00:37,920 --> 00:00:40,640 even the day after Black Friday. We have companies like Best Buy 14 00:00:40,640 --> 00:00:43,040 with too many TV's. They've gone unsold. 15 00:00:43,240 --> 00:00:45,240 They couldn't clear up their inventory. 16 00:00:45,520 --> 00:00:48,760 They literally have stacks of TV's, entire aisles of TV's that 17 00:00:48,760 --> 00:00:50,800 have gone unsold. Now, I saw a lot of these videos 18 00:00:50,800 --> 00:00:53,480 highlighting how slow Black Friday was, how nobody was 19 00:00:53,480 --> 00:00:56,800 excited about the shopping holiday, and how your companies, 20 00:00:57,200 --> 00:00:59,920 your stocks, and the economy are going to be doing poorly. 21 00:01:00,000 --> 00:01:03,200 The consumer is exhausted. They've extinguished all of 22 00:01:03,200 --> 00:01:05,440 their spending power. But what if I told you there's a 23 00:01:05,440 --> 00:01:08,000 different answer here, a different part of the story not 24 00:01:08,000 --> 00:01:10,200 being shared. Here's Amazon, for example, 25 00:01:10,200 --> 00:01:11,920 explaining how their Black Friday went. 26 00:01:12,040 --> 00:01:14,960 We. Had a huge Black Friday last 27 00:01:14,960 --> 00:01:18,480 week and in fact it was our highest sales. 28 00:01:18,480 --> 00:01:22,680 Most items sold Black Friday in Amazon's entire history. 29 00:01:23,000 --> 00:01:25,040 So very excited about that as you said. 30 00:01:25,400 --> 00:01:29,080 On average, customers ordered more than 1000 items per second 31 00:01:29,280 --> 00:01:31,840 throughout the day, she says. This was their biggest Black 32 00:01:31,840 --> 00:01:36,640 Friday ever, and they sold, quote, 1000 items per second, 33 00:01:36,920 --> 00:01:40,080 not per minute, but per second all of Black Friday. 34 00:01:40,120 --> 00:01:42,560 Shopify also has something to say about Black Friday. 35 00:01:43,280 --> 00:01:47,120 We saw peak sales per minute globally on Black Friday was 4.2 36 00:01:47,120 --> 00:01:50,560 million per minute. That was right around noon on 37 00:01:50,560 --> 00:01:54,480 Friday, 12 O1 Eastern Time. And last, just to compare, last 38 00:01:54,480 --> 00:01:56,600 year peak sales permitted globally on Black Friday was 39 00:01:56,600 --> 00:01:59,120 about 3.5 million around the same time. 40 00:01:59,440 --> 00:02:03,640 But in total, in aggregate we saw but $4.1 billion sold on 41 00:02:03,640 --> 00:02:06,400 Black Friday. That's a 22% increase since the 42 00:02:06,400 --> 00:02:08,759 last year's Black Friday, which is about 3.36. 43 00:02:08,880 --> 00:02:11,960 They also hit record high Black Friday sales, and in aggregate, 44 00:02:11,960 --> 00:02:14,400 it does seem like Black Friday shopping was a success. 45 00:02:14,400 --> 00:02:18,080 It was up 7.5% over last year, according to Adobe Analytics. 46 00:02:18,080 --> 00:02:20,880 Now we also have the frustrating news for the bears that the 47 00:02:20,880 --> 00:02:24,160 market is not dropping. It continues to surge upwards 48 00:02:24,160 --> 00:02:26,520 and there's reason to believe that this may be sustained. 49 00:02:26,680 --> 00:02:29,480 Investors today are holding record high cash balances. 50 00:02:29,480 --> 00:02:32,200 And then finally Elizabeth Warren took to X, formerly 51 00:02:32,200 --> 00:02:36,360 Twitter to post that there is now a sandwich shop monopoly. 52 00:02:36,760 --> 00:02:38,720 You heard that right. We're talking about Subway 53 00:02:38,720 --> 00:02:41,560 sandwich and Jimmy John's. They have formed a sandwich shop 54 00:02:41,560 --> 00:02:43,680 monopoly and they need to be stopped by the government. 55 00:02:43,760 --> 00:02:45,360 So as always, we have a lot to get to. 56 00:02:45,360 --> 00:02:47,400 Let's go ahead and jump in. Now I want to start off by 57 00:02:47,400 --> 00:02:49,680 taking a look at the Black Friday predictions. 58 00:02:49,960 --> 00:02:52,880 We had a lot of videos like the Surface over the weekend. 59 00:02:52,880 --> 00:02:56,320 If you're online, a lot of these type of videos were trending 60 00:02:56,320 --> 00:02:58,760 where. Is everybody like, there's 61 00:02:58,760 --> 00:03:01,960 nobody here? Dude, what the Is this Black 62 00:03:01,960 --> 00:03:05,400 Friday for real? Guys, the line at Starbucks is 63 00:03:05,400 --> 00:03:09,320 longer than. Any other live these videos show 64 00:03:09,320 --> 00:03:13,120 an empty Target at 6:00 AM. This is Black Friday morning and 65 00:03:13,120 --> 00:03:15,800 traditionally this type of holiday brings a lot of 66 00:03:15,800 --> 00:03:17,480 shoppers. They surge in they look for 67 00:03:17,480 --> 00:03:19,120 deals. In fact, I remember back in 68 00:03:19,120 --> 00:03:23,720 2014, 2015, that Black Friday resulted in people literally 69 00:03:23,720 --> 00:03:26,840 struggling for deals. They were reaching over each 70 00:03:26,840 --> 00:03:28,360 other. They're trying to grab packages 71 00:03:28,360 --> 00:03:30,240 from each other. We've all seen them before. 72 00:03:30,240 --> 00:03:33,280 The video and images of people fighting over saving a few 73 00:03:33,280 --> 00:03:36,280 dollars on a smart TV, well, now we're seeing videos of empty 74 00:03:36,280 --> 00:03:38,040 stores and overstocked merchandise. 75 00:03:38,040 --> 00:03:40,680 So what's going on here? Watching these type of videos is 76 00:03:40,680 --> 00:03:43,040 very misleading and it doesn't paint an accurate picture of 77 00:03:43,040 --> 00:03:44,400 what's going on with the economy. 78 00:03:44,640 --> 00:03:47,360 There's a couple key things that have affected Black Friday 79 00:03:47,360 --> 00:03:50,360 shopping this year. The first thing impacting lower 80 00:03:50,360 --> 00:03:53,760 store traffic this year, especially in retail locations, 81 00:03:54,200 --> 00:03:57,360 is the deals have been extended outside of a single day. 82 00:03:57,360 --> 00:04:00,160 A lot of these retailers are offering their deals ahead of 83 00:04:00,160 --> 00:04:02,560 Black Friday. They started on Thursday or they 84 00:04:02,560 --> 00:04:05,160 start Black Friday sales earlier in the week. 85 00:04:05,360 --> 00:04:08,480 This, of course is going to affect in store traffic because 86 00:04:08,480 --> 00:04:10,640 the deals are being extended out of a single day. 87 00:04:10,880 --> 00:04:13,640 It makes it so there's less of a rush in that single day to get 88 00:04:13,640 --> 00:04:15,200 an item. And on top of that, many 89 00:04:15,200 --> 00:04:18,320 retailers like Best Buy and Target are offering price 90 00:04:18,320 --> 00:04:21,360 protection through most of the holiday shopping season as well. 91 00:04:21,360 --> 00:04:24,120 So even if you bought the item earlier at a higher price 92 00:04:24,120 --> 00:04:27,160 outside of the deal, you can retroactively get the deal. 93 00:04:27,200 --> 00:04:29,800 So obviously when Target's offering buyers protection and 94 00:04:29,800 --> 00:04:32,680 expanding the holiday outside of Black Friday, it doesn't create 95 00:04:32,680 --> 00:04:35,000 as much shopping urgency on the day itself. 96 00:04:35,240 --> 00:04:37,520 So in terms of Best Buy and Target, these companies aren't 97 00:04:37,520 --> 00:04:40,440 seeing a rush of shoppers racing for deals because they've 98 00:04:40,440 --> 00:04:42,960 expanded those deals all throughout the holiday season. 99 00:04:42,960 --> 00:04:45,000 Now, I don't invest in Target or Best Buy. 100 00:04:45,000 --> 00:04:47,880 The only physical retailer that I own is Costco. 101 00:04:47,920 --> 00:04:49,840 That's my pick. I think it's the best physical 102 00:04:49,840 --> 00:04:52,320 retailer now. I went to Costco on Saturday 103 00:04:52,320 --> 00:04:55,120 following Black Friday and it was packed, but that was no 104 00:04:55,120 --> 00:04:56,920 surprise because it's packed every weekend. 105 00:04:57,040 --> 00:04:59,640 So I'm not sure if Black Friday impacted Costco at all. 106 00:04:59,760 --> 00:05:02,040 But outside of the fact that sales have now been expanded to 107 00:05:02,040 --> 00:05:04,360 multiple days, they're not just on Black Friday. 108 00:05:04,600 --> 00:05:07,720 I think there's another big factor leading to lower traffic 109 00:05:07,720 --> 00:05:10,880 in store, and this is the biggest factor overall. 110 00:05:10,960 --> 00:05:14,520 People are not buying as much stuff in stores as they were two 111 00:05:14,520 --> 00:05:17,600 years ago or five years ago or 10 years ago. 112 00:05:17,680 --> 00:05:19,520 Online sales is taking market share. 113 00:05:19,520 --> 00:05:21,360 We can take a look at Amazon, for example. 114 00:05:21,360 --> 00:05:25,080 If we look at just the revenue incremental gain from 2020 to 115 00:05:25,080 --> 00:05:30,600 2022, the revenue went from almost $400 billion to over $500 116 00:05:30,600 --> 00:05:33,480 billion. So they gained roughly $100 117 00:05:33,480 --> 00:05:37,720 billion in these two years, $100 billion is about the same amount 118 00:05:37,720 --> 00:05:40,400 of revenue that Target does per year. 119 00:05:40,760 --> 00:05:44,760 So they gained an incremental target in a two year period. 120 00:05:44,840 --> 00:05:47,760 Now a portion of this of course is AWS, another portion is 121 00:05:47,760 --> 00:05:50,280 advertising, but most of this revenue comes from online 122 00:05:50,280 --> 00:05:52,440 retail. Online retailers like Amazon and 123 00:05:52,440 --> 00:05:56,080 Shopify continue to gain market share every single year against 124 00:05:56,080 --> 00:05:57,840 their physical retailer counterparts. 125 00:05:57,840 --> 00:06:00,520 That's why these companies are up two and 5% today, and the 126 00:06:00,520 --> 00:06:03,480 statistics that Amazon shares this year are incredible. 127 00:06:03,760 --> 00:06:06,200 Here's one of the spokesperson from Amazon's warehouse. 128 00:06:06,320 --> 00:06:10,120 On average, customers ordered more than 1000 items per second 129 00:06:10,280 --> 00:06:14,040 throughout the day and our top selling categories included 130 00:06:14,040 --> 00:06:18,600 home, kitchen, toys and beauty. I'm going to share a few of our 131 00:06:18,600 --> 00:06:23,840 top selling items as well. Those were Amazon Fire TV 132 00:06:23,840 --> 00:06:25,560 sticks. Those are always popular. 133 00:06:26,040 --> 00:06:28,640 This next one I'm really excited about because it's from a small 134 00:06:28,640 --> 00:06:31,320 business seller. It's a really fun game called. 135 00:06:31,880 --> 00:06:34,880 Taco Cat, Goat, Cheese, pizza. Check it out. 136 00:06:35,200 --> 00:06:37,800 And on Prime Video. Our top selling movies were 137 00:06:37,800 --> 00:06:40,640 Barbie, Oppenheimer, and the latest Mission Impossible. 138 00:06:40,880 --> 00:06:43,000 Now Amazon didn't give a lot of stats here. 139 00:06:43,000 --> 00:06:46,480 They said that they sold 1000 items per second on Black 140 00:06:46,480 --> 00:06:48,840 Friday, which is a stat that I have a difficulty wrapping my 141 00:06:48,840 --> 00:06:50,960 mind around. But they didn't share how this 142 00:06:50,960 --> 00:06:53,640 compares to last year. What does the percentage change 143 00:06:53,640 --> 00:06:55,520 from year over year? But just to put it in 144 00:06:55,520 --> 00:06:58,640 perspective, I mean, when we hear online shopping numbers 145 00:06:58,640 --> 00:07:02,200 from Adobe, they suggest. Sales were up 7 1/2%. 146 00:07:02,200 --> 00:07:06,240 MasterCard says online sales were up 8 1/2%, and Salesforce 147 00:07:06,240 --> 00:07:10,000 says they were up 9%. So how much did Amazon see an 148 00:07:10,000 --> 00:07:12,440 increase over a year ago from Black Friday? 149 00:07:14,240 --> 00:07:17,000 Again, it was our biggest Black Friday ever. 150 00:07:17,000 --> 00:07:18,600 We were all about saving, you said. 151 00:07:18,840 --> 00:07:20,760 That what what percentage increase? 152 00:07:22,320 --> 00:07:24,920 I don't have those numbers handy, but we're just excited 153 00:07:24,920 --> 00:07:27,640 that we had a great season. We're we're geared up for Cyber 154 00:07:27,640 --> 00:07:29,200 Monday. You can tell that Amazons being 155 00:07:29,200 --> 00:07:31,160 careful about what they share and what they don't share. 156 00:07:31,160 --> 00:07:33,640 She'll not answer the question yet about what the percentage 157 00:07:33,640 --> 00:07:36,440 gain was year over year. We just know it was the biggest 158 00:07:36,440 --> 00:07:38,680 year ever. Now either way, whether Amazon 159 00:07:38,680 --> 00:07:41,960 slightly beat their last year's record or whether they crushed 160 00:07:41,960 --> 00:07:44,720 it with a year over year gain, we don't know that for now. 161 00:07:44,720 --> 00:07:47,040 But we know that the stores were not empty. 162 00:07:47,400 --> 00:07:50,200 It was not what the videos showed online, the anecdotal 163 00:07:50,200 --> 00:07:52,480 footage of people walking through empty locations. 164 00:07:52,480 --> 00:07:54,440 And Amazon isn't the only outlier here. 165 00:07:54,440 --> 00:07:57,720 We can also look at Shopify, which Amazon and Shopify are 166 00:07:57,720 --> 00:08:00,240 similar but different. In a lot of ways, Amazon is the 167 00:08:00,240 --> 00:08:04,080 centralized place for sellers to all sell under the Amazon.com 168 00:08:04,080 --> 00:08:06,400 URL. Shopify everyone sells on their 169 00:08:06,400 --> 00:08:09,160 own unique URLs, their own shopping experience. 170 00:08:09,240 --> 00:08:11,360 They can make the website look and feel how they want. 171 00:08:11,360 --> 00:08:13,920 Both of them have millions of third party sellers selling on 172 00:08:13,920 --> 00:08:16,800 their platform and Shopify, along with Amazon had an 173 00:08:16,800 --> 00:08:18,680 incredible, record-breaking weekend. 174 00:08:18,800 --> 00:08:23,400 We saw merchants crossed the $1 billion mark before midnight EST 175 00:08:23,480 --> 00:08:26,360 on Black Friday, which was a couple hours earlier than last 176 00:08:26,360 --> 00:08:28,160 year. And so you know while it's still 177 00:08:28,160 --> 00:08:30,600 early on Cyber Monday, I think the the, the, the, the thing 178 00:08:30,600 --> 00:08:33,360 we're seeing is that shoppers are voting with their wallets to 179 00:08:33,360 --> 00:08:35,960 buy from brands they love both online and in store. 180 00:08:35,960 --> 00:08:38,320 We can talk about in store too and and those brands are on 181 00:08:38,320 --> 00:08:41,120 Shopify. Shopify is partnered with Amazon 182 00:08:41,120 --> 00:08:44,200 and a lot of social media companies to make what they call 183 00:08:44,200 --> 00:08:46,480 a retail shopping operating system. 184 00:08:46,800 --> 00:08:49,920 And I do think this company has a very good corner of the 185 00:08:49,920 --> 00:08:51,960 Internet. They have really carved out a 186 00:08:51,960 --> 00:08:53,720 terrific business for themselves. 187 00:08:53,880 --> 00:08:56,120 We're creating a retail operating system which means 188 00:08:56,120 --> 00:08:59,160 whatever you want to do from Shopify you can do that. 189 00:08:59,600 --> 00:09:03,200 But but you know the success of this Black Friday is is owned by 190 00:09:03,200 --> 00:09:05,320 our, our merchants and and they're doing really well. 191 00:09:05,560 --> 00:09:08,720 You know something that I just a new stat that I just got is over 192 00:09:08,720 --> 00:09:12,120 30,000 of our merchants. For them, Black Friday was their 193 00:09:12,120 --> 00:09:15,680 best sales day ever on Shopify. Now I'll be getting more data 194 00:09:15,680 --> 00:09:18,840 from Amazon and Shopify after Cyber Monday to see how this 195 00:09:18,840 --> 00:09:22,000 entire weekend panned out. So we have Amazon and Shopify. 196 00:09:22,000 --> 00:09:25,120 And overall, the report from Adobe Analytics is that Black 197 00:09:25,120 --> 00:09:29,640 Friday shopping had a 7.5% increase in online sales year 198 00:09:29,640 --> 00:09:33,960 over year, a total of $9.8 billion, a further indication 199 00:09:33,960 --> 00:09:36,800 that price conscious consumers want to spend on the best deals 200 00:09:37,200 --> 00:09:39,720 and they are looking for those deals online. 201 00:09:39,840 --> 00:09:42,640 It's actually incredible to look at the revenue by day, every 202 00:09:42,640 --> 00:09:44,640 single day. Adobe's tracking the revenue 203 00:09:44,640 --> 00:09:47,800 online with what they can see. And keep in mind these numbers 204 00:09:47,800 --> 00:09:50,360 aren't exactly correct. They are estimates. 205 00:09:50,560 --> 00:09:53,640 MasterCard and Visa will have their own analysis as well. 206 00:09:53,880 --> 00:09:56,440 They show the same trends, but they're not perfectly matched. 207 00:09:56,560 --> 00:09:59,920 On a normal given day, we have anywhere from 2 to $4 billion in 208 00:09:59,920 --> 00:10:03,640 revenue, and then on Black Friday it spikes up to 9.8 209 00:10:03,640 --> 00:10:05,600 billion. So this is almost like a week's 210 00:10:05,600 --> 00:10:08,160 worth of sale in a single 24 hour period. 211 00:10:08,160 --> 00:10:10,680 Another interesting thing to look at is the actual deals on 212 00:10:10,680 --> 00:10:13,000 Black Friday. There's some people that suggest 213 00:10:13,000 --> 00:10:15,080 that there's not really any good deals. 214 00:10:15,320 --> 00:10:18,000 The companies aren't marking down their products and that is 215 00:10:18,000 --> 00:10:20,920 not accurate, at least judging by Adobe Analytics. 216 00:10:21,160 --> 00:10:23,880 They track the price of each item and we can see the 217 00:10:23,880 --> 00:10:27,680 electronic toys and apparel typically have anywhere from a 218 00:10:27,720 --> 00:10:31,160 zero to 5% discount leading up to Black Friday. 219 00:10:31,560 --> 00:10:35,080 Then going into the week, we have toys discounted around 9%. 220 00:10:35,480 --> 00:10:38,040 And then on Black Friday itself, the prices plummet. 221 00:10:38,200 --> 00:10:42,920 Electronics on average are 26% cheaper, toys are 28% cheaper 222 00:10:43,160 --> 00:10:46,200 and apparel's 24% cheaper. So customers are actually 223 00:10:46,200 --> 00:10:47,800 getting good deals on Black Friday. 224 00:10:47,840 --> 00:10:50,560 Now, after seeing all the objective data of how successful 225 00:10:50,560 --> 00:10:53,560 Black Friday was both in physical retail and online 226 00:10:53,560 --> 00:10:57,000 retail, what do we make of these type of anecdotal videos 227 00:10:57,280 --> 00:11:00,520 illustrating how empty all these retail locations are? 228 00:11:00,800 --> 00:11:04,160 And many people, hundreds of comments saying that the economy 229 00:11:04,160 --> 00:11:07,080 is going down the tubes, that nobody has money to spend, that 230 00:11:07,080 --> 00:11:09,200 nobody's buying anything this weekend. 231 00:11:09,200 --> 00:11:12,400 I think this is a clear illustration of being careful 232 00:11:12,400 --> 00:11:15,960 with the anecdotal evidence you're receiving online, because 233 00:11:15,960 --> 00:11:18,320 in many cases it lacks full context. 234 00:11:18,760 --> 00:11:22,680 Target, for example, expanded their Black Friday sales prior 235 00:11:22,680 --> 00:11:26,040 in the week, so there's multiple days of it as well as most of 236 00:11:26,040 --> 00:11:29,480 these companies do a lot of the selling online, they price 237 00:11:29,480 --> 00:11:32,200 match, they fight aggressively for your sales. 238 00:11:32,480 --> 00:11:35,280 So if you're just looking at some pieces of evidence, like an 239 00:11:35,280 --> 00:11:38,480 opening of a company at 6:00 AM and concluding that the 240 00:11:38,480 --> 00:11:41,600 economy's in trouble, I think you're going to be mistaken. 241 00:11:41,640 --> 00:11:44,840 I don't have any problem with anecdotal research and looking 242 00:11:44,840 --> 00:11:47,800 at things on the ground in person for yourself. 243 00:11:48,200 --> 00:11:50,160 In fact, I think that's an important part of doing 244 00:11:50,160 --> 00:11:52,240 research. Part of the reason that I first 245 00:11:52,240 --> 00:11:55,320 looked at Texas Roadhouse was because I've gone to the company 246 00:11:55,480 --> 00:11:59,240 over the years, for the past decade, and I've just seen how 247 00:11:59,240 --> 00:12:02,200 busy this company is every single weekend. 248 00:12:02,200 --> 00:12:05,840 Without fail, it's packed. And I noticed that trend over 249 00:12:05,840 --> 00:12:08,120 time. So that got me my initial 250 00:12:08,120 --> 00:12:11,560 research on the company. That was anecdotal evidence that 251 00:12:11,560 --> 00:12:13,360 was taken from first hand account. 252 00:12:13,400 --> 00:12:15,320 But the research can't end there. 253 00:12:15,320 --> 00:12:18,680 You can't buy and sell just based off of your own anecdotal 254 00:12:18,680 --> 00:12:21,080 experience. What if the Texas roadhouses 255 00:12:21,080 --> 00:12:24,640 around my home are unusually busy and they're not as busy 256 00:12:24,640 --> 00:12:26,880 other places? That's why I look at the actual 257 00:12:26,880 --> 00:12:30,800 fundamentals of the company and see if my experience aligns with 258 00:12:30,800 --> 00:12:33,360 the overall fundamentals of the company, the direction it's 259 00:12:33,360 --> 00:12:36,800 going, see if what I'm seeing is an outlier or the norm. 260 00:12:37,200 --> 00:12:40,320 So I not only look at how busy it is in my current locations 261 00:12:40,320 --> 00:12:43,400 around my home, but I also check different area codes and see 262 00:12:43,400 --> 00:12:47,360 what the wait time is over in Texas, over in California, all 263 00:12:47,360 --> 00:12:50,120 across the US Anecdotal experience can lead us into 264 00:12:50,120 --> 00:12:52,640 great investments. It can initiate our start into 265 00:12:52,640 --> 00:12:55,400 doing research on a company, but we should have formed final 266 00:12:55,400 --> 00:12:58,280 conclusions about a subject based on five second clips 267 00:12:58,480 --> 00:13:00,520 posted online. And unfortunately, that's what a 268 00:13:00,520 --> 00:13:03,040 lot of people did. In order to spread fear and doom 269 00:13:03,040 --> 00:13:05,400 and gloom about the economy, they took a couple of video 270 00:13:05,400 --> 00:13:08,000 shots of empty stores and concluded that that's how the 271 00:13:08,000 --> 00:13:11,400 entire U.S. economy is doing, and obviously that's not the 272 00:13:11,400 --> 00:13:13,160 case. So even though people love to be 273 00:13:13,160 --> 00:13:15,680 pessimistic, it sounds smarter to be pessimistic. 274 00:13:15,880 --> 00:13:18,080 You sound like you're more educated and you're looking at 275 00:13:18,080 --> 00:13:19,960 things with this nice skeptical bent. 276 00:13:20,240 --> 00:13:23,000 I'll continue to have my optimistic approach because I 277 00:13:23,000 --> 00:13:25,960 think it's correct. Overall, right now, people are 278 00:13:25,960 --> 00:13:28,840 spending money, they're employed, they're making money, 279 00:13:29,080 --> 00:13:31,200 people have extra money to spend. 280 00:13:31,360 --> 00:13:33,960 And I believe investors that continue to buy good companies 281 00:13:33,960 --> 00:13:37,080 that offer great products and are very competitive, they'll do 282 00:13:37,080 --> 00:13:39,640 better over time than the investors that continue to be 283 00:13:39,640 --> 00:13:41,800 skeptical, pessimistic and dumish. 284 00:13:41,840 --> 00:13:44,680 Now, during all of this news and chaos over the weekend, we also 285 00:13:44,680 --> 00:13:48,920 heard that Amazon has officially passed up both UPS and FedEx to 286 00:13:48,920 --> 00:13:51,840 be the biggest delivery business in the US. 287 00:13:51,960 --> 00:13:55,600 A decade ago, Amazon was a major customer of UPS and FedEx, and 288 00:13:55,600 --> 00:13:58,560 some executives from the incumbents and analysts mocked 289 00:13:58,560 --> 00:14:02,280 the notion mock the Amazon could someday supplant them. 290 00:14:02,360 --> 00:14:04,600 And if we put up the growth here over time, it's actually 291 00:14:04,600 --> 00:14:08,520 incredible to see how fast Amazon has caught up to UPSU. 292 00:14:08,520 --> 00:14:12,240 PS: went up a little bit from 2019 to 2020, then it basically 293 00:14:12,240 --> 00:14:16,840 had a flat year from 20 to 21. While UPS was having that flat 294 00:14:16,840 --> 00:14:20,680 year, Amazon delivered over a billion extra parcels year over 295 00:14:20,680 --> 00:14:22,440 year. So Amazon made substantial 296 00:14:22,440 --> 00:14:26,000 gains. And then from 2021 to 2022, UPS 297 00:14:26,000 --> 00:14:28,960 actually had a down year, while again Amazon made substantial 298 00:14:28,960 --> 00:14:30,840 gains. Now I can't say that I'm shocked 299 00:14:30,840 --> 00:14:32,720 by this trend. I've said for a while that 300 00:14:32,720 --> 00:14:35,320 Amazon will engulf UPS and FedEx. 301 00:14:35,680 --> 00:14:38,160 Right now, I think there's going to be a strategic shift. 302 00:14:38,160 --> 00:14:40,880 UPS and FedEx are going to move away from delivering standard 303 00:14:40,880 --> 00:14:43,040 packages and items that Amazon delivers. 304 00:14:43,240 --> 00:14:45,560 I think they'll still focus on delivering furniture and home 305 00:14:45,560 --> 00:14:48,960 appliances, big and bulky things that Amazon isn't focusing on. 306 00:14:48,960 --> 00:14:51,920 But I predict over time UPS and FedEx will have their growth 307 00:14:51,920 --> 00:14:55,720 halted and be stagnant over the next five years as Amazon 308 00:14:55,720 --> 00:14:57,800 continues to grow. Now moving on from all the Black 309 00:14:57,800 --> 00:15:01,000 Friday news, we also have news of the overall economy and stock 310 00:15:01,000 --> 00:15:03,280 market. For example, the stock market 311 00:15:03,280 --> 00:15:06,440 this year is up around 18%. It's been a great year to be an 312 00:15:06,440 --> 00:15:08,920 investor. My Portfolio for reference is 313 00:15:08,920 --> 00:15:13,080 around 22% time weighted return this year and 23% money 314 00:15:13,080 --> 00:15:15,000 weighted. So it's had a great performance 315 00:15:15,000 --> 00:15:19,080 year to date. That's $93,000 in the green now. 316 00:15:19,080 --> 00:15:21,840 Anytime the stock market races up in a year like this, 317 00:15:22,320 --> 00:15:25,160 investors can become apprehensive about buying. 318 00:15:25,160 --> 00:15:28,520 Now they can become a little bit more restrictive, but in some 319 00:15:28,520 --> 00:15:30,400 cases, that's not the best decision. 320 00:15:30,760 --> 00:15:34,520 There's a lot of people that predicted that 2023 would be a 321 00:15:34,520 --> 00:15:38,080 bad year to be an investor, that the stock market was going to go 322 00:15:38,080 --> 00:15:42,040 down, the bear market was going to continue, the valuations were 323 00:15:42,040 --> 00:15:44,280 far too high and there would not be a rebound. 324 00:15:44,680 --> 00:15:48,880 And they've all been proven incredibly wrong on this topic. 325 00:15:49,320 --> 00:15:53,640 But despite being objectively proven wrong for 2023, they 326 00:15:53,640 --> 00:15:56,600 don't admit they're wrong. They just say that it's going to 327 00:15:56,600 --> 00:15:59,640 happen next year. That's when the big stock market 328 00:15:59,640 --> 00:16:02,840 crash is going to happen. Bears are never wrong. 329 00:16:02,880 --> 00:16:06,320 They're always just a bit early and they always push back their 330 00:16:06,320 --> 00:16:09,520 claims The next year. We're seeing that happen yet 331 00:16:09,520 --> 00:16:11,120 again. Right now, we actually have 332 00:16:11,120 --> 00:16:13,760 evidence that investors can continue spending more. 333 00:16:13,840 --> 00:16:17,320 This year, investors are plowing cash into stocks and bond funds. 334 00:16:17,600 --> 00:16:20,920 Invesco's QQQ exchange traded fund, which tracks the tech 335 00:16:20,920 --> 00:16:24,920 heavy NASDAQ 100 index, reported its largest weekly inflow in 336 00:16:24,920 --> 00:16:27,120 history the week of November 13th. 337 00:16:27,120 --> 00:16:29,760 Funds that track the high yield bond indexes, the higher risk 338 00:16:29,760 --> 00:16:32,680 portion of the corporate bond market, reported two highest 339 00:16:32,680 --> 00:16:35,480 weekly inflow records in the middle of November. 340 00:16:35,480 --> 00:16:37,800 So we know right now a lot of investors are buying stocks. 341 00:16:37,800 --> 00:16:41,240 That's why prices are going up and a lot of investors have huge 342 00:16:41,240 --> 00:16:44,480 cash balances and money market funds earning A yield there. 343 00:16:44,760 --> 00:16:48,600 They say for the first time in a long time, cash is a competitor 344 00:16:48,680 --> 00:16:50,080 quote. But I think as soon as short 345 00:16:50,080 --> 00:16:52,760 term rates start to tick down, you're going to see large 346 00:16:52,760 --> 00:16:56,200 inflows to other assets. So people are parking their 347 00:16:56,200 --> 00:16:59,000 money in cash right now, but they're not going to want to sit 348 00:16:59,000 --> 00:17:01,240 it there forever. I think there's multiple ways to 349 00:17:01,240 --> 00:17:04,000 view this data, but I think it's ultimately bullish for stocks 350 00:17:04,000 --> 00:17:06,640 that people have a lot of cash. That means that there's more 351 00:17:06,640 --> 00:17:09,960 money sitting on the sidelines for if a dip happens in the 352 00:17:09,960 --> 00:17:12,680 future. If we do have some type of 5% or 353 00:17:12,680 --> 00:17:16,240 10% pull back, a lot of people have a cash balance to buy up 354 00:17:16,240 --> 00:17:19,880 that pullback, making a long sustained bear market less 355 00:17:19,880 --> 00:17:22,560 likely. So even though right now cash is 356 00:17:22,560 --> 00:17:25,760 a competitor, I still see it as a positive thing that so many 357 00:17:25,760 --> 00:17:27,839 people have cash. Now moving on, we have to 358 00:17:27,839 --> 00:17:30,800 address this post from our favorite senator, Elizabeth 359 00:17:30,800 --> 00:17:33,280 Warren. Elizabeth Warren has become a 360 00:17:33,320 --> 00:17:35,800 bad take machine. Most recently, she's gone on a 361 00:17:35,800 --> 00:17:38,360 campaign against buybacks, illustrating that she doesn't 362 00:17:38,360 --> 00:17:41,360 understand how they function in the capital markets or the 363 00:17:41,360 --> 00:17:43,720 consequences of them. But out of all the bad takes 364 00:17:43,720 --> 00:17:46,400 she's given, I think this one might finally take the cake. 365 00:17:46,760 --> 00:17:49,560 Let me go ahead and read this, and this is a direct quote. 366 00:17:49,920 --> 00:17:52,440 We don't need another private equity deal that could lead to 367 00:17:52,440 --> 00:17:54,240 higher food prices for consumers. 368 00:17:54,600 --> 00:17:58,320 The FTC is right to investigate whether the purchase of Subway 369 00:17:58,640 --> 00:18:01,880 by the same firm that owns Jimmy John's and McAllister Deli 370 00:18:02,280 --> 00:18:05,040 creates a sandwich shop monopoly. 371 00:18:05,560 --> 00:18:08,280 Yes, you heard that right. That is the exact words. 372 00:18:08,680 --> 00:18:12,000 She's concerned that a company that owns both Subway and Jimmy 373 00:18:12,000 --> 00:18:15,400 John's is going to create a sandwich shop monopoly. 374 00:18:15,520 --> 00:18:18,200 So no longer is Congress concerned about the industrial 375 00:18:18,200 --> 00:18:21,040 military complex. No longer are they concerned 376 00:18:21,040 --> 00:18:24,080 about abusive billing practices from pharmaceutical companies 377 00:18:24,360 --> 00:18:26,800 that hold products that are available nowhere else. 378 00:18:26,800 --> 00:18:30,360 But they're concerned about one of the most commoditized items 379 00:18:30,360 --> 00:18:34,680 in the world, a sandwich. A deli sandwich, which is 380 00:18:34,680 --> 00:18:37,880 available at every retail location, available at every 381 00:18:37,880 --> 00:18:41,440 deli, the most purchased food item in the world being a 382 00:18:41,440 --> 00:18:44,240 monopoly because two chains are owned by the same owner. 383 00:18:44,360 --> 00:18:46,520 Now you know me, I'm a big fan of monopolies. 384 00:18:46,520 --> 00:18:49,200 In fact, I try to invest in monopolies when I can. 385 00:18:49,280 --> 00:18:51,720 A lot of the companies that I own, like S&P Global and 386 00:18:51,720 --> 00:18:55,200 MasterCard and Intuit, have very monopolistic characteristics. 387 00:18:55,200 --> 00:18:57,880 They have dominant market share. They have very concentrated 388 00:18:57,880 --> 00:18:59,760 industries. They're at the very top of the 389 00:18:59,760 --> 00:19:01,800 food chain. Their companies have incredibly 390 00:19:01,800 --> 00:19:04,680 high barriers to entry, and you can't really get their products 391 00:19:04,680 --> 00:19:07,120 many other places. That's the characteristic of a 392 00:19:07,120 --> 00:19:08,880 monopoly. Out of all the companies that I 393 00:19:08,880 --> 00:19:10,920 own, most of them are monopolistic. 394 00:19:10,920 --> 00:19:13,840 But there's a couple that are not monopolistic at all. 395 00:19:13,840 --> 00:19:17,560 Food joints are not monopolies, and I've never referred to Texas 396 00:19:17,560 --> 00:19:21,280 Roadhouse as a monopolistic company, or Chipotle for that 397 00:19:21,280 --> 00:19:23,760 matter. They have brand value, they have 398 00:19:23,760 --> 00:19:26,520 name brand recognition. They offer a good product at a 399 00:19:26,520 --> 00:19:29,000 good price, so people are willing to pay for it. 400 00:19:29,360 --> 00:19:33,160 They do have rapid store expansion, but they also have a 401 00:19:33,160 --> 00:19:36,240 characteristic that many monopolies do not have, which is 402 00:19:36,240 --> 00:19:40,640 intense, fierce competition every single day at every single 403 00:19:40,640 --> 00:19:43,680 location. There are many alternatives to 404 00:19:43,680 --> 00:19:46,480 Chipotle and Texas Roadhouse, just like there's many 405 00:19:46,480 --> 00:19:48,520 alternatives to Subway and Jimmy John's. 406 00:19:48,600 --> 00:19:51,280 Even in the sandwich category alone, there's many 407 00:19:51,280 --> 00:19:53,240 alternatives. But outside of the sandwich 408 00:19:53,240 --> 00:19:56,240 category, there's literally thousands of food joints to go 409 00:19:56,240 --> 00:19:58,600 to. But there you have in 2023, the 410 00:19:58,600 --> 00:20:02,440 big concern for Elizabeth Warren is the quote sandwich shop 411 00:20:02,440 --> 00:20:04,200 Monopoly. That's all for this time. 412 00:20:04,280 --> 00:20:05,040 See you in the next one.