1 00:00:00,080 --> 00:00:02,280 Welcome back, everyone. Today on the Joseph Carlson 2 00:00:02,280 --> 00:00:04,920 Show, we have a bunch of news to get into that I think is 3 00:00:04,920 --> 00:00:07,920 important. First of all, we have news that 4 00:00:07,920 --> 00:00:13,440 Microsoft is now talking about doing this $100 billion Stargate 5 00:00:13,560 --> 00:00:17,600 Open AI supercomputer. It would be known as the AI Star 6 00:00:17,600 --> 00:00:19,720 Wars moment according to Fortune. 7 00:00:20,160 --> 00:00:23,320 Now to put this in context, they're they're acting like 8 00:00:23,320 --> 00:00:26,520 they're going to spend $100 billion on this last year. 9 00:00:26,520 --> 00:00:30,200 If we look at Microsoft's financials, their entire spend 10 00:00:30,200 --> 00:00:33,480 on CapEx, if we bring that up right here and focus just on 11 00:00:33,480 --> 00:00:37,680 their capital expenditure, last year it was $28 billion. 12 00:00:38,160 --> 00:00:41,800 So they're talking about spending around 3:00 to four 13 00:00:41,800 --> 00:00:46,200 times as much as they did all of last year on this new Stargate. 14 00:00:46,240 --> 00:00:49,600 So what is Stargate and why is Microsoft talking about spending 15 00:00:49,600 --> 00:00:53,280 $100 billion on it with Open AI? Now we also have news that 16 00:00:53,280 --> 00:00:56,360 Amazon is ditching their Just walkout technology. 17 00:00:56,600 --> 00:00:58,200 This is the tech where you could go in. 18 00:00:58,200 --> 00:01:00,840 You could grab something off the shelf, It would have sensors and 19 00:01:00,840 --> 00:01:04,080 cameras determined what you grabbed and then it would charge 20 00:01:04,080 --> 00:01:07,200 you as you walked out of the store with no checkout process. 21 00:01:07,440 --> 00:01:10,320 And I also want to mention on this subject of Amazon ditching 22 00:01:10,320 --> 00:01:13,880 this technology, popular Fintwit accounts and the way that they 23 00:01:13,880 --> 00:01:15,560 twist the news. We're going to be looking at 24 00:01:15,560 --> 00:01:18,960 three very popular tweets over the past week and now all of 25 00:01:18,960 --> 00:01:21,440 these are incredibly misleading and the way that they 26 00:01:21,440 --> 00:01:23,440 intentionally mislead their followers. 27 00:01:23,520 --> 00:01:26,240 We have the ongoing vote from the Disney shareholders of 28 00:01:26,240 --> 00:01:29,480 whether they should elect Trion and one of their members to the 29 00:01:29,480 --> 00:01:30,880 board. You know that there's an 30 00:01:30,880 --> 00:01:34,120 activist investor, Nelson Peltz has been fighting Disney to get 31 00:01:34,120 --> 00:01:37,640 on the board because he thinks that they're well, their board 32 00:01:37,640 --> 00:01:40,200 has not been accountable. They haven't done a good job. 33 00:01:40,200 --> 00:01:42,560 They haven't done well for the stock over the past decade. 34 00:01:42,680 --> 00:01:45,680 I happen to agree with Treon and I want to highlight some of the 35 00:01:45,680 --> 00:01:49,280 decisions that Bob Iger has made over the past decade to hurt 36 00:01:49,280 --> 00:01:51,320 Disney's stock. And then finally, we have Steve 37 00:01:51,320 --> 00:01:54,120 Iseman, one of my favorite commentators, coming on to CNBC 38 00:01:54,360 --> 00:01:56,840 and saying that he doesn't believe the Fed should lower 39 00:01:56,840 --> 00:01:59,120 interest rates at all this year. We're going to look at his 40 00:01:59,120 --> 00:02:01,440 reasoning for the Fed keeping interest rates where they are. 41 00:02:01,440 --> 00:02:04,080 And then of course, we have My Portfolio, the Story Fund, which 42 00:02:04,080 --> 00:02:06,960 is concentrated into a few companies that I've picked out 43 00:02:06,960 --> 00:02:09,160 that I believe will beat the S&P 500. 44 00:02:09,160 --> 00:02:11,800 We'll be doing a performance update of the Story Fund in this 45 00:02:11,800 --> 00:02:13,360 episode. So we have a lot of exciting 46 00:02:13,360 --> 00:02:14,800 news to get to in today's episode. 47 00:02:14,800 --> 00:02:17,560 Now, one thing I have to mention before I jump in, if you have 48 00:02:17,560 --> 00:02:20,160 not tried out the Patreon on the Joseph Carlson show before, 49 00:02:20,520 --> 00:02:22,760 today's the Day, you can try it out risk free. 50 00:02:22,760 --> 00:02:26,440 You get the rest of the month as a free trial, so you pay nothing 51 00:02:26,440 --> 00:02:28,640 if you join today. And that gives you time to try 52 00:02:28,640 --> 00:02:30,240 it out and see if it's something that you like. 53 00:02:30,520 --> 00:02:34,040 We've recently surged to almost 6000 active members on the 54 00:02:34,040 --> 00:02:36,360 Patreon. Huge growth over the past couple 55 00:02:36,360 --> 00:02:38,120 of years because people really like it. 56 00:02:38,320 --> 00:02:41,520 You get access to qualtrum.com. This is something that I've 57 00:02:41,520 --> 00:02:44,160 built from the ground up. It's an awesome tool to analyze 58 00:02:44,160 --> 00:02:46,640 stocks. You also get exclusive episodes, 59 00:02:46,640 --> 00:02:48,600 you get access to a huge Discord community. 60 00:02:48,880 --> 00:02:51,520 There's a lot of things included in this membership that I think 61 00:02:51,520 --> 00:02:53,720 a lot of people like. And as a bonus, it makes it so I 62 00:02:53,720 --> 00:02:56,080 don't have to take on any sponsorships, which is another 63 00:02:56,080 --> 00:02:58,440 nice thing. Now let's go ahead and jump in 64 00:02:58,440 --> 00:03:00,920 and I first want to start off before we get to the big news 65 00:03:00,920 --> 00:03:04,160 with Microsoft and their Stargate investment. 66 00:03:04,440 --> 00:03:07,640 I want to take a look at the Story Fund because I share this 67 00:03:07,640 --> 00:03:11,160 portfolio publicly and I give updates on its performance about 68 00:03:11,160 --> 00:03:13,320 once a week. Right now it's surged up to 69 00:03:13,320 --> 00:03:16,920 $57,000 in gains. So we're making some significant 70 00:03:16,920 --> 00:03:20,800 gains here year to date on a money weighted return, it's up 71 00:03:20,800 --> 00:03:26,000 17.5% which is beating out the QQQ and the S&P 500 and that's 72 00:03:26,000 --> 00:03:28,880 been the same for the past year. If you look at the past one 73 00:03:28,880 --> 00:03:35,000 year, the returns on this are astronomical, 65%, 65% returns 74 00:03:35,000 --> 00:03:38,280 without owning NVIDIA. So I'm missing the best 75 00:03:38,280 --> 00:03:41,440 performer in the market, but still widely outperforming the 76 00:03:41,440 --> 00:03:44,760 S&P 500 and the QQQ over the trailing year. 77 00:03:45,120 --> 00:03:48,600 Well, how did that happen? It happened through Amazon and 78 00:03:48,600 --> 00:03:51,000 Netflix. We also have other big winners, 79 00:03:51,000 --> 00:03:53,040 Google, Microsoft and S&P Global. 80 00:03:53,560 --> 00:03:56,560 These have all done really well, really well over the past 81 00:03:56,560 --> 00:03:59,240 trailing year. But Amazon and Netflix have done 82 00:03:59,240 --> 00:04:01,720 particularly well, especially Netflix. 83 00:04:02,000 --> 00:04:03,760 This one has made the biggest comeback. 84 00:04:04,080 --> 00:04:06,920 When I look at the performance overall since I started this 85 00:04:06,920 --> 00:04:09,880 portfolio, I track it against the S&P 500. 86 00:04:10,200 --> 00:04:14,920 We have My Portfolio in blue and we have the S&P 500 in red. 87 00:04:15,240 --> 00:04:18,519 And this is as if I put money into both of these at the same 88 00:04:18,519 --> 00:04:20,560 time. So you see kind of a virtual 89 00:04:20,560 --> 00:04:23,840 reality as if I had put my money in the S&P 500. 90 00:04:24,680 --> 00:04:29,040 As you can see, the majority of the time through 2022 and 2023, 91 00:04:29,400 --> 00:04:34,000 I underperformed the S&P 500. That is because Amazon and 92 00:04:34,000 --> 00:04:37,200 Netflix sold off huge. And those are two of my largest 93 00:04:37,200 --> 00:04:39,160 positions. They are my two largest 94 00:04:39,160 --> 00:04:41,560 positions. So that hurt the performance. 95 00:04:41,920 --> 00:04:45,160 But then I held on and in fact, I doubled down on the stocks at 96 00:04:45,160 --> 00:04:48,640 the low and the recovery has been incredible, making it so 97 00:04:48,640 --> 00:04:50,720 that I went up and match the S&P 500. 98 00:04:51,080 --> 00:04:54,600 And then year to date, I've surged ahead of the S&P 500 up 99 00:04:54,600 --> 00:04:58,360 here right now. As it stands, the S&P 500 is at 100 00:04:58,360 --> 00:05:01,720 31.71% returns since the beginning. 101 00:05:01,960 --> 00:05:05,520 My Portfolio is at 39.88. So we're actually surging 102 00:05:05,520 --> 00:05:07,760 further and further above the S&P 500. 103 00:05:07,760 --> 00:05:10,040 Now the major point I want to mention when looking at these 104 00:05:10,040 --> 00:05:12,840 returns is what earned me these returns. 105 00:05:13,160 --> 00:05:16,160 A lot of people like to pretend that it's the research. 106 00:05:16,360 --> 00:05:19,200 It's looking at these stocks and doing analysis that earns you 107 00:05:19,200 --> 00:05:21,080 the returns. Research is an important 108 00:05:21,080 --> 00:05:23,520 ingredient. I looked at Amazon and I looked 109 00:05:23,520 --> 00:05:25,960 at Netflix and Google and I did research on these companies. 110 00:05:26,360 --> 00:05:28,200 You know, I I had a thesis for them. 111 00:05:28,440 --> 00:05:30,800 But that's not really what earned me the returns. 112 00:05:31,080 --> 00:05:34,800 What earned me the returns was not selling during the most 113 00:05:34,800 --> 00:05:37,120 difficult point in holding these stocks. 114 00:05:37,400 --> 00:05:41,880 When Netflix plummeted, When Amazon plummeted and Google was 115 00:05:41,880 --> 00:05:45,880 selling off because of AI concerns and and Jack Chachi BT 116 00:05:45,880 --> 00:05:48,120 ruining their Moat. When Netflix was losing 117 00:05:48,120 --> 00:05:51,400 subscribers, when Amazon was just a big retail company that 118 00:05:51,400 --> 00:05:54,160 was losing money. All of those stocks going down, 119 00:05:54,680 --> 00:05:57,280 all of the sentiment went incredibly negative. 120 00:05:57,600 --> 00:06:00,480 People got talked out of these stocks, even good ones. 121 00:06:00,760 --> 00:06:03,840 Even good investors like Bill Ackman sold Netflix at the 122 00:06:03,840 --> 00:06:06,400 bottom. Had I done that, had I sold 123 00:06:06,400 --> 00:06:09,280 these companies at the Lowe's during a time where there's a 124 00:06:09,280 --> 00:06:12,400 lot of panic, I would have had terrible returns. 125 00:06:12,600 --> 00:06:15,160 I would have underperformed the S&P 500 dramatically. 126 00:06:15,320 --> 00:06:16,760 I would have lost a lot of money. 127 00:06:17,040 --> 00:06:18,880 That would have been a disastrous outcome. 128 00:06:19,280 --> 00:06:22,480 So it wasn't the research that earned me these returns. 129 00:06:22,840 --> 00:06:25,520 It was the research in combination of hanging on to 130 00:06:25,520 --> 00:06:27,760 these companies during a distressed time. 131 00:06:28,360 --> 00:06:30,720 It's easy to hold them now. The stocks are going up, The 132 00:06:30,720 --> 00:06:32,400 story's good. The coast is clear. 133 00:06:32,720 --> 00:06:35,040 Everybody can hold on to Amazon and Netflix right now. 134 00:06:35,400 --> 00:06:37,840 So long as things are going really well, it's easy to hold 135 00:06:37,840 --> 00:06:40,200 on to these stocks. But the point is, things aren't 136 00:06:40,200 --> 00:06:43,680 always going to be easy. Just like we had a panic in 2022 137 00:06:43,680 --> 00:06:46,520 and 2021, we're likely to have one in the future. 138 00:06:46,840 --> 00:06:49,840 If you're not fully convinced of holding your stocks during the 139 00:06:49,840 --> 00:06:53,080 lows, you're playing a dangerous game because you're going to end 140 00:06:53,080 --> 00:06:55,720 up selling out at the worst time possible. 141 00:06:56,160 --> 00:06:59,920 So when I look at what earned me these returns, it wasn't just 142 00:06:59,920 --> 00:07:01,920 the research. It wasn't just the analysis. 143 00:07:02,120 --> 00:07:05,960 The more important thing was having a strong stomach sticking 144 00:07:05,960 --> 00:07:07,920 with these companies during a difficult time. 145 00:07:08,040 --> 00:07:10,280 That's the portfolio update. For now, let's go ahead and take 146 00:07:10,280 --> 00:07:12,240 a look at the news. The first bit of news is this 147 00:07:12,240 --> 00:07:16,520 talk of Microsoft potentially investing $100 billion with Open 148 00:07:16,720 --> 00:07:19,480 AI into creating Stargate, a supercomputer. 149 00:07:19,920 --> 00:07:23,120 Now to put that in context, we know that Microsoft is a very 150 00:07:23,120 --> 00:07:27,040 big company, but $100 billion is more than the amount of free 151 00:07:27,040 --> 00:07:30,880 cash flow they earn per year. So this is more than an entire 152 00:07:30,880 --> 00:07:32,760 calendar year's worth of profits. 153 00:07:33,160 --> 00:07:36,400 This is also a lot more than they spent on Activision 154 00:07:36,400 --> 00:07:38,560 Blizzard. They spent $70 billion on that. 155 00:07:38,920 --> 00:07:43,200 So this would be a massive, unprecedented investment from 156 00:07:43,200 --> 00:07:46,000 even the likes of Microsoft. Apparently this is rumored by 157 00:07:46,000 --> 00:07:48,880 The Information, but Microsoft have been talking to Open AI 158 00:07:49,400 --> 00:07:53,200 because they want this massive supercomputing cluster to 159 00:07:53,200 --> 00:07:56,440 support their Open AI models. At one point there was another 160 00:07:56,440 --> 00:08:01,520 rumor that Sam Altman was asking for $6 trillion investment to 161 00:08:01,520 --> 00:08:05,160 build something that was like a rival to NVIDIA, a chip making 162 00:08:05,160 --> 00:08:07,880 company for specifically AI chips. 163 00:08:08,400 --> 00:08:09,680 This seems like an extension of it. 164 00:08:09,680 --> 00:08:12,520 It seems like they're going to any company they can and asking 165 00:08:12,520 --> 00:08:16,880 for a fortune for them to spend for Open AI future investments. 166 00:08:17,240 --> 00:08:20,360 They say to put this in context, Microsoft is known to have spent 167 00:08:20,360 --> 00:08:23,880 more than several $100 million to build the cluster used to 168 00:08:23,880 --> 00:08:28,560 train Open AIS, current top of the line model for GPT 4, which 169 00:08:28,560 --> 00:08:33,120 open AICEO Sam Altman also has said cost more than $100 million 170 00:08:33,120 --> 00:08:35,919 to train. It's also known that Open AI is 171 00:08:35,919 --> 00:08:40,320 already training a successor model to GPT 4, likely called 172 00:08:40,320 --> 00:08:44,000 GPT 5, on one of Microsoft's existing data centers. 173 00:08:44,320 --> 00:08:47,040 And we know that Microsoft's last year broke ground on a new 174 00:08:47,040 --> 00:08:50,400 $1 billion data center in Wisconsin the analyst believe is 175 00:08:50,400 --> 00:08:53,720 intended to house the chips for training opening eyes next 176 00:08:53,720 --> 00:08:55,920 generation models. The Information reported that 177 00:08:55,920 --> 00:08:58,760 the supercomputing cluster in Wisconsin may eventually cost as 178 00:08:58,760 --> 00:09:02,080 much as 10 billion once the price of specialized NVIDIA 179 00:09:02,080 --> 00:09:04,520 chips used for AI applications are factored in. 180 00:09:04,840 --> 00:09:09,600 So Stargate is anywhere from 10 to 100 times more expensive than 181 00:09:09,600 --> 00:09:12,520 any of the data centers Microsoft currently has on the 182 00:09:12,520 --> 00:09:16,560 books. Anywhere from a factor of 10 to 183 00:09:16,560 --> 00:09:19,720 a factor of 100 times more expensive than their existing 184 00:09:20,080 --> 00:09:22,440 data centers. That is expensive. 185 00:09:22,880 --> 00:09:25,720 Now they go on giving more context to this, pointing out 186 00:09:26,040 --> 00:09:30,160 that a $100 billion investment is a lot of money even for 187 00:09:30,160 --> 00:09:33,520 Microsoft, which is correct. They mentioned that their total 188 00:09:33,520 --> 00:09:37,440 CapEx last year is less than 1/3 of $100 billion. 189 00:09:37,680 --> 00:09:41,120 If we look at it, we know that Microsoft spent around $38 190 00:09:41,120 --> 00:09:44,160 billion in CapEx. The total expenses for the 191 00:09:44,160 --> 00:09:47,240 entire company, their research and development, sales and 192 00:09:47,240 --> 00:09:50,520 marketing, general and administrative, and CapEx did 193 00:09:50,520 --> 00:09:55,560 not add up to $100 billion. So this is a massive fortune of 194 00:09:55,560 --> 00:09:58,400 money that Sam Altman is wanting to spend. 195 00:09:59,000 --> 00:10:03,120 It seems a little bit more risky than most of the things that 196 00:10:03,120 --> 00:10:05,880 Microsoft does. In order for Satya Nadella to do 197 00:10:05,880 --> 00:10:09,800 this, he would have to be completely, 100% convinced he's 198 00:10:09,800 --> 00:10:11,640 going to get a great return on this money. 199 00:10:11,760 --> 00:10:14,840 They say that Microsoft has to hope that whatever Stargate is 200 00:10:14,840 --> 00:10:18,240 being used for, it is not, in fact, to train AGI, since 201 00:10:18,240 --> 00:10:21,760 Microsoft's partnership with Open Eye only entitles the tech 202 00:10:21,760 --> 00:10:25,840 giant to commercialize Open AI's technology, that falls short of 203 00:10:25,840 --> 00:10:27,840 AGI. So basically, Microsoft can 204 00:10:27,840 --> 00:10:32,000 commercialize everything up until AGI, but once Sam Altman 205 00:10:32,000 --> 00:10:35,600 says we've accomplished AGI, they keep all the fruits of that 206 00:10:35,600 --> 00:10:38,200 for themselves, apparently. But there's a lot of skeptics, 207 00:10:38,200 --> 00:10:41,240 both saying that we're not going get returns off of this because 208 00:10:41,240 --> 00:10:44,080 this is an outlandish amount of money, way too much to get any 209 00:10:44,080 --> 00:10:46,320 reasonable ROI on it. And then there's other ones 210 00:10:46,320 --> 00:10:50,560 pointing out if they get to AGI, Microsoft can't even monetize 211 00:10:50,560 --> 00:10:51,640 it. So there's no point for 212 00:10:51,640 --> 00:10:55,120 Microsoft either way, they'd be footing a bill for something 213 00:10:55,120 --> 00:10:56,760 that they're not going to get a return on. 214 00:10:56,920 --> 00:10:59,880 Now normally when I look at a company and I consider them 215 00:10:59,880 --> 00:11:03,360 spending a huge amount of money on some type of investment, that 216 00:11:03,360 --> 00:11:06,760 seems like a bit of a long shot. Training an AI model that 217 00:11:06,760 --> 00:11:10,280 hopefully you can monetize down the road, that raises a lot of 218 00:11:10,280 --> 00:11:12,760 red flags. When I look at this story, it 219 00:11:12,760 --> 00:11:16,760 just raises a lot of red flags. There's just alarm bells going 220 00:11:16,760 --> 00:11:20,000 off. Most massive investments are not 221 00:11:20,000 --> 00:11:21,840 good for companies. Most of them are value 222 00:11:21,840 --> 00:11:24,560 destructive. There's very few instances where 223 00:11:24,560 --> 00:11:27,480 you can do huge investments and have it be a creative for the 224 00:11:27,480 --> 00:11:30,200 shareholder. For the company, there's a case 225 00:11:30,200 --> 00:11:32,600 of Amazon doubling their fulfilment network. 226 00:11:32,880 --> 00:11:35,760 That was a massive investment, and investors sold out of the 227 00:11:35,760 --> 00:11:37,240 stock because they were concerned about it. 228 00:11:37,680 --> 00:11:40,000 But it ended up being, I think, a good return. 229 00:11:40,040 --> 00:11:42,080 They're getting good returns on those investments now. 230 00:11:42,080 --> 00:11:43,720 They're satisfying their customer base. 231 00:11:44,080 --> 00:11:48,120 And in the case of Microsoft, I realize that this again raises a 232 00:11:48,120 --> 00:11:51,120 lot of red flags. But there's few CE OS that I 233 00:11:51,120 --> 00:11:55,680 believe I would trust more to only do big investments if he 234 00:11:55,680 --> 00:11:58,720 believes fully, you'll get a high return on those 235 00:11:58,720 --> 00:12:01,480 investments. Satya Nadella is not one to 236 00:12:01,480 --> 00:12:05,520 waste shareholder money. He's not one to spend carelessly 237 00:12:05,680 --> 00:12:08,920 and without any regard to the returns he's going to get, and 238 00:12:08,920 --> 00:12:11,480 he's not one to take astronomical long shots that 239 00:12:11,480 --> 00:12:14,440 don't have predictable returns that doesn't match any of his 240 00:12:14,440 --> 00:12:17,120 history. He's helped build Microsoft into 241 00:12:17,120 --> 00:12:20,920 the powerhouse and profitable company it is, so he's someone 242 00:12:20,920 --> 00:12:24,720 that I trust far more to make the right decision and exercise 243 00:12:24,720 --> 00:12:27,360 the right judgment in this case than most CE OS. 244 00:12:27,680 --> 00:12:30,480 But either way, as a Microsoft shareholder, I'll be following 245 00:12:30,480 --> 00:12:32,920 this, looking at it and seeing the direction they're going. 246 00:12:33,320 --> 00:12:36,080 If they end up going forward with this, it's going to be an 247 00:12:36,080 --> 00:12:38,960 incredible story, an incredible investment for Microsoft. 248 00:12:39,080 --> 00:12:42,520 Now moving on, we have news, it's gone viral for probably the 249 00:12:42,520 --> 00:12:46,280 wrong reasons for Amazon. But Andy Jassy, the CEO of 250 00:12:46,280 --> 00:12:49,520 Amazon, finally decided to pull the plug on their just walkout 251 00:12:49,520 --> 00:12:51,760 technology. Now this is some type of like 252 00:12:51,760 --> 00:12:55,800 futuristic technology where you could walk into an Amazon store, 253 00:12:56,200 --> 00:12:59,440 you could go and take things off the shelf and just walk out, and 254 00:12:59,440 --> 00:13:02,000 then Amazon on your app would charge you for whatever you 255 00:13:02,000 --> 00:13:05,000 picked up without you doing any scanning, without any shopping 256 00:13:05,000 --> 00:13:07,960 carts, without anything, just walking in, grabbing items and 257 00:13:07,960 --> 00:13:10,320 walking out. That's how you paid now. 258 00:13:10,320 --> 00:13:12,200 It seemed really cool and futuristic. 259 00:13:12,200 --> 00:13:15,000 It was driven by AI and a bunch of sensors and cameras and 260 00:13:15,000 --> 00:13:18,480 technology, and they decided that they're going to pivot. 261 00:13:18,840 --> 00:13:22,200 They're going to pivot from the just walkout technology to what 262 00:13:22,200 --> 00:13:25,200 other companies are doing. Where they have the dash cards, 263 00:13:25,480 --> 00:13:28,200 we have a normal shopping cart. And as you put things in the 264 00:13:28,200 --> 00:13:30,720 cart, it scans the item in the cart. 265 00:13:31,240 --> 00:13:33,800 So it's not quite as futuristic, but it's still better than 266 00:13:33,800 --> 00:13:36,280 having a checkout, right? You just put it in your shopping 267 00:13:36,280 --> 00:13:37,960 cart. That's where it scans it. 268 00:13:38,520 --> 00:13:41,160 So that's basically the story. They're doing a major pivot. 269 00:13:41,200 --> 00:13:44,440 They're moving away from the just walk out technology to the 270 00:13:44,440 --> 00:13:46,800 shopping carts. But that's not where the story 271 00:13:46,800 --> 00:13:49,360 went viral. The story went viral for the 272 00:13:49,360 --> 00:13:51,720 wrong reasons for Amazon. Let's go ahead and take a look 273 00:13:51,720 --> 00:13:53,560 at some tweets here. This is from a tweet that got 274 00:13:53,560 --> 00:13:56,640 viewed 300,000 times. Amazon's Just Walkout 275 00:13:56,640 --> 00:14:00,440 technology, which was pitched as a magical AI technology, was 276 00:14:00,440 --> 00:14:05,240 actually 1000 contractors in India working as virtual 277 00:14:05,240 --> 00:14:08,280 cashiers, identifying what people put into their carts and 278 00:14:08,280 --> 00:14:11,000 tracking their purchases. It will likely be replaced with 279 00:14:11,000 --> 00:14:13,040 shopping carts with scanners. Let's go ahead and take a look 280 00:14:13,040 --> 00:14:15,560 at another tweet here. This is Gurgaon on Twitter. 281 00:14:15,560 --> 00:14:20,680 Popular account 4000 likes 593,000 views This is crazy. 282 00:14:20,680 --> 00:14:23,200 A few years ago, Amazon introduced tech that let 283 00:14:23,200 --> 00:14:26,000 shoppers just grab whatever they wanted and just walked out. 284 00:14:26,000 --> 00:14:30,360 Instead of using AI, Amazon just hired 1000 people in India to 285 00:14:30,360 --> 00:14:34,120 manually track their purchases. Amazon today said it's shutting 286 00:14:34,120 --> 00:14:36,680 down this business. That's the tweet. 287 00:14:37,040 --> 00:14:40,760 Instead of using AI and using the sensors, Amazon just had 288 00:14:40,760 --> 00:14:44,960 1000 people from India watching you shop in these stores and 289 00:14:44,960 --> 00:14:46,520 tracking your purchases manually. 290 00:14:46,680 --> 00:14:49,280 We have Max Byrne. This is another one that got a 291 00:14:49,280 --> 00:14:52,600 lot more views. This one has 8.1 million views, 292 00:14:52,840 --> 00:14:55,400 40,000 likes. Amazon build. 293 00:14:55,400 --> 00:14:58,400 It's just walk out stores as some triumph of AI. 294 00:14:58,800 --> 00:15:02,200 In reality, it was powered by thousands of low paid Indian 295 00:15:02,200 --> 00:15:06,200 workers manually adding up items in your cart as you shopped. 296 00:15:06,600 --> 00:15:09,560 How insanely dystopian. That's the tweet. 8 million 297 00:15:09,560 --> 00:15:11,000 views. The reason I go over these 298 00:15:11,000 --> 00:15:14,480 tweets is to highlight the type of punchy news you get from 299 00:15:14,480 --> 00:15:17,680 different online sources. These type of tweets not only 300 00:15:17,680 --> 00:15:20,720 are completely inaccurate, but in sometimes they're just making 301 00:15:20,720 --> 00:15:24,280 up stuff like out of thin air. They make it up, people look at 302 00:15:24,280 --> 00:15:27,880 it, they they reply based off of the made-up tweet and they 303 00:15:27,880 --> 00:15:30,320 criticize companies based off of things that aren't true. 304 00:15:30,640 --> 00:15:32,240 And this type of thing is commonplace. 305 00:15:32,560 --> 00:15:36,080 They use the most provocative language possible to get the 306 00:15:36,080 --> 00:15:39,480 most engagement, but none of it is actually accurate. 307 00:15:39,480 --> 00:15:42,640 This tweet, for example, says that this whole system, this 308 00:15:42,640 --> 00:15:46,600 walkout tech, was powered by thousands of low paid Indian 309 00:15:46,600 --> 00:15:48,920 workers. Now, just on a side note, he 310 00:15:48,920 --> 00:15:51,920 says low paid, but there's no evidence to suggest that he's 311 00:15:51,920 --> 00:15:54,920 just thrown that in because he must assume if they're Indian 312 00:15:54,920 --> 00:15:57,360 workers, Amazon must be underpaying them. 313 00:15:57,760 --> 00:16:00,560 For all we know, Amazon could be paying them above market value, 314 00:16:00,560 --> 00:16:03,440 so we have no evidence of that. But the other part of this that 315 00:16:03,440 --> 00:16:06,200 I think is more important is the suggestion that this entire 316 00:16:06,200 --> 00:16:09,920 tech, the just walkout tech, is solely powered by these workers 317 00:16:09,920 --> 00:16:12,680 in India, like they were just watching every purchase. 318 00:16:12,920 --> 00:16:16,320 And that's how the system works, that there really was no AI, no 319 00:16:16,320 --> 00:16:18,680 technology. This walkout technology was in 320 00:16:18,680 --> 00:16:20,760 fact powered by artificial intelligence. 321 00:16:20,760 --> 00:16:24,680 That was a system behind it. They hired a firm in India to 322 00:16:24,680 --> 00:16:27,600 review some of the footage and make sure that the AI system was 323 00:16:27,600 --> 00:16:29,920 working appropriately. The same way you could have 324 00:16:29,920 --> 00:16:32,880 manual reviews of Tesla's full self driving data. 325 00:16:33,160 --> 00:16:36,640 You have AI be the primary system powering it, and then you 326 00:16:36,640 --> 00:16:40,040 have humans reviewing and checking and labeling to help 327 00:16:40,040 --> 00:16:43,120 train the AI that is the system they had in place. 328 00:16:43,440 --> 00:16:46,520 Amazon said that this entire characterization that people are 329 00:16:46,520 --> 00:16:49,280 trying to make is inaccurate. They disputed how many of the 330 00:16:49,280 --> 00:16:52,880 purchases even required reviews. Quote The primary role of our 331 00:16:52,880 --> 00:16:56,840 Machine Learning Data Associates is to annotate video images, 332 00:16:57,080 --> 00:16:59,400 which is necessary for continuously improving the 333 00:16:59,400 --> 00:17:01,520 underlying machine learning model powering. 334 00:17:01,880 --> 00:17:04,480 The spokesperson acknowledged that these associates validate 335 00:17:04,720 --> 00:17:08,680 quote a small minority of shopping visits when AI can't 336 00:17:08,680 --> 00:17:12,000 determine a purchase. So basically this whole system 337 00:17:12,000 --> 00:17:15,480 was powered by AI, but when some purchases were a little bit 338 00:17:15,480 --> 00:17:18,200 vague or the system couldn't predict what was going on, 339 00:17:18,440 --> 00:17:20,560 that's when they sent it over for manual review. 340 00:17:21,240 --> 00:17:24,319 But according to social media people, that's not good enough 341 00:17:24,319 --> 00:17:26,680 to reflect reality. They have to say the whole 342 00:17:26,680 --> 00:17:28,760 system was powered by people in India. 343 00:17:29,120 --> 00:17:31,480 That's the tweet because it gets more engagement. 344 00:17:31,480 --> 00:17:33,680 Now we get to the news that I think is important for Disney 345 00:17:33,680 --> 00:17:36,320 shareholders to know what is going on with this company 346 00:17:36,320 --> 00:17:39,000 because I've been following Disney for a long period of time 347 00:17:39,000 --> 00:17:42,400 as an investor in media with Netflix, Disney's considered one 348 00:17:42,400 --> 00:17:45,000 of the primary competitors. And there's a vote going on 349 00:17:45,000 --> 00:17:48,640 right now of whether or not Trayon Partners that has Nelson 350 00:17:48,640 --> 00:17:51,080 Peltz can get seats on the board. 351 00:17:51,560 --> 00:17:53,760 Every company has a board. They're the ones that are 352 00:17:53,760 --> 00:17:56,840 supposed to kind of work for the shareholders, to make sure the 353 00:17:56,840 --> 00:17:59,960 executives and the company are working on behalf of the 354 00:17:59,960 --> 00:18:02,480 shareholders. So the board of a company is 355 00:18:02,480 --> 00:18:06,680 elected in order to keep the CEO in check, in order to represent 356 00:18:06,680 --> 00:18:08,680 the shareholders, to make sure they're not being taken 357 00:18:08,680 --> 00:18:11,800 advantage of and everything's done in their best interest. 358 00:18:12,200 --> 00:18:15,440 Well, Tryon Partners or Treon, however you say it, they're 359 00:18:15,440 --> 00:18:18,560 trying to get board seats because Nelson Peltz has 360 00:18:18,560 --> 00:18:22,000 criticized the way that Disney has run the company in the past. 361 00:18:22,440 --> 00:18:25,240 Disney doesn't like that. Disney doesn't want to change 362 00:18:25,240 --> 00:18:27,360 their board. Disney does not want Nelson 363 00:18:27,360 --> 00:18:30,920 Peltz or anyone else from the outside on their board. 364 00:18:31,200 --> 00:18:33,440 They want to run things exactly like they have. 365 00:18:33,560 --> 00:18:36,520 So Disney's doing everything they can to keep Nelson Peltz 366 00:18:36,520 --> 00:18:38,560 off the board. They don't want this activist 367 00:18:38,560 --> 00:18:41,680 investor that's been critical of them to have any type of 368 00:18:41,680 --> 00:18:43,720 influence over running the company. 369 00:18:44,040 --> 00:18:45,920 So they're fighting this as much as they can. 370 00:18:46,080 --> 00:18:49,960 This rumor was released from insiders at Disney that Disney's 371 00:18:49,960 --> 00:18:53,160 winning the proxy fight against Trion with more than half the 372 00:18:53,160 --> 00:18:54,920 votes. This is another showing of bad 373 00:18:54,920 --> 00:18:57,040 behavior by the executive team at Disney. 374 00:18:57,240 --> 00:18:59,960 They intentionally leaked this information that they're winning 375 00:18:59,960 --> 00:19:03,000 the vote in order to try to influence the remaining voters 376 00:19:03,200 --> 00:19:06,520 saying, look, we're winning, if you don't vote with us, you're 377 00:19:06,520 --> 00:19:08,320 going to maybe face repercussions. 378 00:19:08,320 --> 00:19:11,800 Once this vote goes through and we win, we'll know who voted 379 00:19:11,800 --> 00:19:15,240 against us. So they're trying to unfairly 380 00:19:15,240 --> 00:19:18,520 and legally influence the remaining part of this vote by 381 00:19:18,520 --> 00:19:21,400 leaking this information halfway through before the vote is 382 00:19:21,400 --> 00:19:23,200 complete. This is something that should be 383 00:19:23,200 --> 00:19:26,960 investigated by the SEC to see why this leak happened and how 384 00:19:26,960 --> 00:19:28,600 it influences the remainder of the vote. 385 00:19:29,000 --> 00:19:33,600 But regardless, we have Bob Iger running the show now, the CEO 386 00:19:33,600 --> 00:19:36,560 that's been with this company since 2005, He's morphed the 387 00:19:36,560 --> 00:19:39,480 company into what it is today, and he's trying to protect his 388 00:19:39,480 --> 00:19:42,880 influence at the company and get rid of any type of harsh critic 389 00:19:42,880 --> 00:19:47,000 of his performance over the past 10 years by trying to get Nelson 390 00:19:47,000 --> 00:19:50,000 Peltz out of Disney. Now just to review some of the 391 00:19:50,000 --> 00:19:53,200 things that Bob Iger has done. He's extended his contract 392 00:19:53,200 --> 00:19:55,520 repeatedly. You can see how many times it's 393 00:19:55,520 --> 00:19:57,440 been extended over and over again. 394 00:19:57,480 --> 00:20:01,440 So he's been the CEO from 2005 to 2020 when he stepped down, 395 00:20:01,720 --> 00:20:05,440 that's when Chapeck took over. But Bob Iger was still in a 396 00:20:05,440 --> 00:20:08,560 position of control. He was looking over Chapeck's 397 00:20:08,560 --> 00:20:11,040 shoulder. He was undermining him as he was 398 00:20:11,040 --> 00:20:13,320 the CEO. And then he ended up filling 399 00:20:13,320 --> 00:20:17,160 back in and firing Chapeck after his succession plan didn't go as 400 00:20:17,160 --> 00:20:20,040 well as planned. If we look at Bob Iger's 401 00:20:20,240 --> 00:20:23,040 performance in history, Disney stock today. 402 00:20:23,640 --> 00:20:29,200 Over a 10 year period, full decade from 2014 is up 51%. 403 00:20:29,800 --> 00:20:32,320 Now if we compare that against the S&P 500, let's just take a 404 00:20:32,320 --> 00:20:35,400 look at the market. We can go back 10 years here. 405 00:20:35,920 --> 00:20:40,720 The market's up 180%, Disney's up 50% and the market pays a 406 00:20:40,720 --> 00:20:43,960 bigger dividend than Disney. So Disney has dramatically 407 00:20:43,960 --> 00:20:47,440 underperformed the market. That is the performance of the 408 00:20:47,440 --> 00:20:50,320 current CEO. That was the CEO 10 years ago. 409 00:20:50,920 --> 00:20:54,920 Bob Iger owns this performance. This is his performance and he 410 00:20:54,920 --> 00:20:58,080 can't blame anyone else for it during this time period. 411 00:20:58,080 --> 00:21:01,200 It also wasn't just a mistake that Disney underperformed. 412 00:21:01,560 --> 00:21:04,560 One of the best performing stocks in the market during this 413 00:21:04,560 --> 00:21:06,960 time period was Netflix. Let's go ahead and take a look 414 00:21:06,960 --> 00:21:09,120 at Netflix performance over the past 10 years. 415 00:21:09,520 --> 00:21:14,800 It is 1199%. Netflix has grown from a small 416 00:21:14,800 --> 00:21:19,480 company ADVD rental business back in 2007, switching over to 417 00:21:19,480 --> 00:21:21,800 streaming around 2013. So the beginning of this 418 00:21:21,800 --> 00:21:24,480 timeline, and now it's grown into the biggest media company 419 00:21:24,480 --> 00:21:27,120 in the world. It has a larger market cap than 420 00:21:27,120 --> 00:21:31,600 Disney without having any parks, any cruise lines, any broadways, 421 00:21:32,000 --> 00:21:34,560 all from streaming, all from media alone. 422 00:21:34,960 --> 00:21:39,320 Disney is a smaller company than Netflix, even counting its 423 00:21:39,320 --> 00:21:42,240 parks. What caused this over the past 424 00:21:42,240 --> 00:21:45,560 10 years? Well, what caused this is Bob 425 00:21:45,560 --> 00:21:48,400 Iger. He is the reason that Netflix is 426 00:21:48,400 --> 00:21:51,520 the size it is today. You can thank him for helping 427 00:21:51,520 --> 00:21:54,560 build up Netflix during the early phases of Netflix's 428 00:21:54,560 --> 00:21:57,000 streaming journey. They didn't have any content and 429 00:21:57,000 --> 00:21:59,200 they didn't have the budget to create their own content. 430 00:21:59,520 --> 00:22:02,280 So they decided they would purchase license content from 431 00:22:02,280 --> 00:22:04,400 other companies. One of them, in fact, one of the 432 00:22:04,400 --> 00:22:07,840 biggest ones being Disney. Disney licensed Marvel content. 433 00:22:08,080 --> 00:22:12,800 They licensed Star Wars content. They licensed Disney Animation 434 00:22:12,800 --> 00:22:15,240 content. All of their key content being 435 00:22:15,240 --> 00:22:19,600 put on this small streaming service because Bob Iger thought 436 00:22:19,600 --> 00:22:23,680 the best decision was to make a little bit extra cash, just make 437 00:22:23,680 --> 00:22:26,320 a little bit extra cash, putting your streaming content on this 438 00:22:26,320 --> 00:22:28,640 different platform, some of your key series. 439 00:22:29,040 --> 00:22:31,640 Meanwhile, Netflix at the same time period was gaining millions 440 00:22:31,640 --> 00:22:33,640 and millions of subscribers every single quarter. 441 00:22:33,880 --> 00:22:36,160 You can look at the numbers every quarter they gained 442 00:22:36,160 --> 00:22:38,760 millions and millions of subscribers, of course, growing 443 00:22:38,760 --> 00:22:41,200 their reach and their revenue over time. 444 00:22:41,200 --> 00:22:44,840 Netflix realized far before Disney did that Netflix was 445 00:22:44,840 --> 00:22:47,320 going to grow to a size where the competitors would become 446 00:22:47,320 --> 00:22:49,720 scared, where they would take away their content. 447 00:22:50,080 --> 00:22:52,000 But by that point, it was too late. 448 00:22:52,000 --> 00:22:55,880 By the time Bob has realized his mistake of building Netflix into 449 00:22:55,880 --> 00:22:58,640 this unstoppable juggernaut, it was too late. 450 00:22:59,080 --> 00:23:02,000 Netflix was already in position to create their own content. 451 00:23:02,040 --> 00:23:04,320 They had a bunch of key series like Orange is the New Black, 452 00:23:04,320 --> 00:23:07,880 Stranger Things, House of Cards, all these different shows to 453 00:23:07,880 --> 00:23:12,000 finally replace Disney content. But the thing that built Netflix 454 00:23:12,000 --> 00:23:15,520 into what it is today is a combination of Bob Iger at 455 00:23:15,520 --> 00:23:19,240 Disney licensing Netflix all of the content they needed to build 456 00:23:19,240 --> 00:23:21,280 their service. Now he wasn't the only one to 457 00:23:21,280 --> 00:23:23,640 blame. There is also Comcast with NBC 458 00:23:23,640 --> 00:23:26,760 content like The Office, but Disney played a huge role. 459 00:23:26,960 --> 00:23:30,240 Netflix would not be as powerful and big today without Disney's 460 00:23:30,240 --> 00:23:32,200 help. So just to recap, the reason 461 00:23:32,200 --> 00:23:36,000 that Disney is in the situation it is today as being the second 462 00:23:36,000 --> 00:23:39,520 largest media company behind Netflix, showing that it cannot 463 00:23:39,520 --> 00:23:42,240 compete in streaming with Netflix and having this other 464 00:23:42,240 --> 00:23:43,800 company surpass them dramatically. 465 00:23:43,800 --> 00:23:47,400 And market cap and performance is because of the actions of the 466 00:23:47,400 --> 00:23:50,560 leadership of Disney. Unwittingly building up there 467 00:23:50,560 --> 00:23:54,200 would be biggest competitor. That is the leadership and the 468 00:23:54,200 --> 00:23:57,280 returns that Bob Iger has earned for his company. 469 00:23:57,320 --> 00:23:59,880 And now that there's someone else stepping in, a loud and 470 00:23:59,880 --> 00:24:03,520 critical voice, Nelson Peltz, to point out that this has been a 471 00:24:03,520 --> 00:24:05,520 disaster. Returns have been horrible for 472 00:24:05,520 --> 00:24:07,880 Disney shareholders. The company has been mismanaged 473 00:24:07,880 --> 00:24:11,160 and they're losing to Netflix. Well, Bob Iger doesn't want to 474 00:24:11,160 --> 00:24:13,240 hear it. He wants to remain at his 475 00:24:13,240 --> 00:24:16,680 leadership position in Disney with no critical voices. 476 00:24:17,000 --> 00:24:20,160 Bob Iger wants to assure you that he's got it under control. 477 00:24:20,400 --> 00:24:23,640 He knows what's best for the company and its future, and we 478 00:24:23,640 --> 00:24:25,800 don't need that. Nelson Peltz, he doesn't have 479 00:24:25,800 --> 00:24:28,480 any experience in media. What does he have to offer? 480 00:24:28,480 --> 00:24:31,120 That's not the point. The point isn't that Nelson 481 00:24:31,120 --> 00:24:33,680 Peltz is some perfect solution to Disney's problems. 482 00:24:34,040 --> 00:24:37,160 The point is that Nelson Peltz represents accountability. 483 00:24:37,440 --> 00:24:39,320 Accountability to the shareholders. 484 00:24:39,440 --> 00:24:42,160 The point that Bob Iger can't continue to run the company as 485 00:24:42,160 --> 00:24:45,280 Aceo indefinitely without getting returns for the 486 00:24:45,280 --> 00:24:47,920 shareholders. He either needs to get returns, 487 00:24:48,040 --> 00:24:51,400 strong returns for the company or needs to get let go one or 488 00:24:51,400 --> 00:24:53,480 the other. And Nelson Peltz brings that 489 00:24:53,480 --> 00:24:56,080 accountability. So in this proxy fight, I hope 490 00:24:56,080 --> 00:24:58,520 that Treon Partners wins. I hope that Nelson Peltz gets 491 00:24:58,520 --> 00:25:02,000 his board seat because I I think Disney lacks accountability, but 492 00:25:02,000 --> 00:25:05,000 it looks like they may not. So far it looks as though 493 00:25:05,000 --> 00:25:07,400 Disney's going to win, and that's a shame for the Disney 494 00:25:07,400 --> 00:25:09,320 shareholder. Now finally, we have Steve 495 00:25:09,320 --> 00:25:13,120 Eisman, the Big Short Investor, going on to CNBC and making his 496 00:25:13,120 --> 00:25:16,360 case of why he believes the Fed should just keep interest rates 497 00:25:16,360 --> 00:25:17,960 where they are for the rest of the year. 498 00:25:18,880 --> 00:25:22,120 I feel that ever since Greenspan was in charge of the Fed, the 499 00:25:22,160 --> 00:25:27,280 Fed has always been extremely insensitive to its own impact on 500 00:25:27,280 --> 00:25:31,200 markets. And you know, when Powell said 501 00:25:31,760 --> 00:25:33,480 that was it last, I think it was last week. 502 00:25:33,480 --> 00:25:36,880 It feels like an eternity ago that financial conditions are 503 00:25:36,880 --> 00:25:40,240 tight. I was like, what planet do you 504 00:25:40,240 --> 00:25:44,160 want? So I mean, my view is the 505 00:25:44,160 --> 00:25:48,120 economy is fine. There should be. 506 00:25:48,840 --> 00:25:51,440 I personally think there should be no Fed cuts this year. 507 00:25:51,680 --> 00:25:54,640 He doesn't think there should be any Fed cuts this year, and I 508 00:25:54,640 --> 00:25:56,800 must agree with him. the Fed is saying one thing. 509 00:25:56,800 --> 00:25:59,200 They're saying financial conditions are very tight, 510 00:25:59,200 --> 00:26:00,920 right? We have interest rates at 5%. 511 00:26:01,400 --> 00:26:04,280 I guess if you're looking at some parts of the economy with 512 00:26:04,280 --> 00:26:07,480 the housing market that's frozen up, the car market doesn't seem 513 00:26:07,480 --> 00:26:09,680 to be doing too well. Tesla didn't hit their numbers. 514 00:26:09,960 --> 00:26:13,320 E VS are going down. You have like solar companies 515 00:26:13,320 --> 00:26:16,160 that I think are struggling, pool companies selling big 516 00:26:16,160 --> 00:26:17,760 expensive things like that are struggling. 517 00:26:18,120 --> 00:26:20,560 But the financial markets, if you look at the stock market, 518 00:26:21,120 --> 00:26:23,000 it's going up. This year has been a great year. 519 00:26:23,000 --> 00:26:25,800 It's one of the best starts to the year of any year in history. 520 00:26:26,200 --> 00:26:27,880 So I agree with him. When the Fed is saying the 521 00:26:27,880 --> 00:26:31,240 financial markets aren't looking great, what is he talking about? 522 00:26:31,240 --> 00:26:33,640 The financial markets overall are doing really well. 523 00:26:33,800 --> 00:26:36,800 You know, the market will do whatever the market does, but 524 00:26:36,800 --> 00:26:38,880 the economy is fine. Why would you cut? 525 00:26:38,880 --> 00:26:42,240 You know, my my actual fear is that if the Fed were actually to 526 00:26:42,240 --> 00:26:45,920 cut rates, the market goes into so it becomes, I guess 527 00:26:45,920 --> 00:26:50,040 bubblicious and then and then we have a real problem, so. 528 00:26:50,760 --> 00:26:53,680 So Steve Iseman is concerned that if we have interest rate 529 00:26:53,680 --> 00:26:56,680 cuts the end of this year, the stock market will go up ten 530 00:26:56,680 --> 00:27:01,800 2030% and we'll have another bubble territory just like 2021 531 00:27:02,000 --> 00:27:05,720 where stocks are so far above any relevant intrinsic value 532 00:27:06,200 --> 00:27:09,480 that you can't even own stocks without fear of the bubble 533 00:27:09,480 --> 00:27:12,240 collapsing, of everything imploding which will eventually 534 00:27:12,240 --> 00:27:14,840 happen if you're in a bubble. So I agree with them. 535 00:27:14,960 --> 00:27:16,920 I don't think stocks going up is always a good thing. 536 00:27:17,160 --> 00:27:19,800 I like my stocks to go up because their free cash flow 537 00:27:19,800 --> 00:27:22,960 goes up, because their earnings per share goes up, because their 538 00:27:22,960 --> 00:27:25,920 organic revenue grows, because they do buybacks and pay 539 00:27:25,920 --> 00:27:28,400 dividends. I do not like them to go up just 540 00:27:28,400 --> 00:27:31,320 because investors are buying more and more of them in a a 541 00:27:31,320 --> 00:27:35,400 fervourish excitement. So I agree I don't want a 542 00:27:35,400 --> 00:27:37,560 bubble. And if the Fed lowering interest 543 00:27:37,560 --> 00:27:40,560 rates this year causes a bubble, I wouldn't think that's the best 544 00:27:40,560 --> 00:27:42,680 thing to do. But I'm not convinced that 545 00:27:42,680 --> 00:27:44,960 lowering interest rates this year would cause a bubble. 546 00:27:45,200 --> 00:27:47,840 I think that's what's already priced in and I think that's 547 00:27:47,840 --> 00:27:49,920 what's causing stocks to go up already. 548 00:27:49,920 --> 00:27:52,360 In fact, I believe the Fed comes out and says they're not 549 00:27:52,360 --> 00:27:53,680 lowering interest rates this year. 550 00:27:53,680 --> 00:27:57,120 The stock market will go down, So what he's saying will cause a 551 00:27:57,120 --> 00:27:59,600 bubble I think is already priced in. 552 00:27:59,880 --> 00:28:02,600 Investors are expecting interest rates to be lowered. 553 00:28:03,080 --> 00:28:03,880 So why? What? 554 00:28:03,880 --> 00:28:08,520 What's causing the Fed to talk about six rate cuts six months 555 00:28:08,520 --> 00:28:11,360 ago? My personal opinions. 556 00:28:11,360 --> 00:28:13,840 I think Powell is as deep down as just a dove. 557 00:28:14,920 --> 00:28:18,160 Just he's always been a dove. He, you know, raising rates was 558 00:28:18,160 --> 00:28:22,160 out of character for him. He had to do it and he he wants 559 00:28:22,160 --> 00:28:22,680 to cut. Rate. 560 00:28:22,720 --> 00:28:25,320 So he thinks the right thing to do is to keep interest rates 561 00:28:25,320 --> 00:28:26,880 where they're at. But he believes the Fed will 562 00:28:26,880 --> 00:28:29,200 probably lower them just because they're a dove. 563 00:28:29,480 --> 00:28:31,600 And a dove is a way of describing a Fed that likes an 564 00:28:31,600 --> 00:28:34,880 easy monetary environment, low interest rates and lots of 565 00:28:34,880 --> 00:28:38,280 stimulus, the best environment to have business and commerce. 566 00:28:38,600 --> 00:28:40,840 And I agree with him. I think the Fed and the 567 00:28:40,840 --> 00:28:43,600 administration is very dovish. And that's part of the reason I 568 00:28:43,600 --> 00:28:47,400 believe it's so important to own assets right now because if you 569 00:28:47,400 --> 00:28:51,080 have a dovish environment, assets typically go up in value. 570 00:28:51,080 --> 00:28:52,920 So that's going to be it for this episode. 571 00:28:52,920 --> 00:28:54,840 I hope you enjoyed. Again, if you want to check out 572 00:28:54,840 --> 00:28:57,600 the Patreon, today's to do it, you can try it out risk free. 573 00:28:57,880 --> 00:28:59,440 That's all for now. See you in the next one.