1 00:00:00,000 --> 00:00:01,600 Welcome back, everyone. Today, I'm the jealous of 2 00:00:01,600 --> 00:00:04,700 Carlson show. We're rounding out 2022. 3 00:00:04,700 --> 00:00:07,200 And as we get to the end of the year, I think it's time to do 4 00:00:07,200 --> 00:00:09,200 something that I haven't done for a while. 5 00:00:09,400 --> 00:00:14,400 My goals about the future, I've outlined my 20 23 goals, and 6 00:00:14,400 --> 00:00:18,200 four things in particular that I want to accomplish next year. 7 00:00:18,300 --> 00:00:20,600 In this video, we'll be going over all of them and why I think 8 00:00:20,600 --> 00:00:23,100 these ones are important. Now, we also have a new addition 9 00:00:23,100 --> 00:00:25,900 to the passive income portfolio. It's one that's in the finance 10 00:00:25,900 --> 00:00:29,800 category, the company's SPG I, which is the SP Global remember 11 00:00:29,800 --> 00:00:32,500 in The movie, The Big Short that scene with the lady with the 12 00:00:32,500 --> 00:00:35,400 dark glasses. She worked for SP Global in this 13 00:00:35,400 --> 00:00:39,600 did not illustrate this company in a good light as long as 14 00:00:39,600 --> 00:00:41,300 anybody with it with a credit score in a pool. 15 00:00:41,300 --> 00:00:44,400 So what do you think we do here? All day is not sure, that's why 16 00:00:44,400 --> 00:00:45,600 we're here. That's what we're also going to 17 00:00:45,608 --> 00:00:48,000 try to figure out what does this company do all day? 18 00:00:48,000 --> 00:00:50,700 How does it make money? Why am I investing in it? 19 00:00:50,800 --> 00:00:54,400 Especially when it's portrayed as such an evil company back in 20 00:00:54,400 --> 00:00:56,100 2007? Now, I also have a bit of 21 00:00:56,100 --> 00:00:57,700 research. I want to get into JP Morgan 22 00:00:57,700 --> 00:00:59,800 came out with their research for 2020. 23 00:01:00,000 --> 00:01:03,500 Re this is where they give their Outlook and predictions and part 24 00:01:03,500 --> 00:01:06,100 of this research, they talk about dividends, they call it 25 00:01:06,100 --> 00:01:09,200 defend with dividends and they lay out with a lot of detail and 26 00:01:09,200 --> 00:01:11,900 data why they think companies that pay dividends will do 27 00:01:11,900 --> 00:01:14,700 especially well next year. And then finally, we have 28 00:01:14,700 --> 00:01:17,900 Tick-Tock again, we have a user here, explaining his goals for 29 00:01:17,900 --> 00:01:22,000 2023, and how he plans to turn his situation of only having a 30 00:01:22,008 --> 00:01:25,700 couple thousand dollars into being a millionaire, a million 31 00:01:25,700 --> 00:01:28,100 dollar-plus portfolio in one year. 32 00:01:28,400 --> 00:01:31,500 It's a pretty ambitious plan. An ambitious goal and I want to 33 00:01:31,500 --> 00:01:33,400 see how he does it. So as always, we have a lot to 34 00:01:33,408 --> 00:01:36,100 jump into in this episode. Let's go ahead and start off 35 00:01:36,100 --> 00:01:38,900 with the goals and my portfolio and everything. 36 00:01:38,900 --> 00:01:42,700 I'm wanting to do in 2023. I've always looked at my channel 37 00:01:42,700 --> 00:01:44,800 is basically a window into my finance. 38 00:01:45,100 --> 00:01:47,600 This has never been a place to get the hottest stock tips or 39 00:01:47,600 --> 00:01:49,500 stocks that will go up 5x or 10x. 40 00:01:49,700 --> 00:01:52,900 I've never advertised a channel that way this is always been a 41 00:01:52,900 --> 00:01:56,900 window into what I'm doing with my finances and I never imagined 42 00:01:56,900 --> 00:01:59,200 this YouTube Endeavor would grow to this big of a thing. 43 00:01:59,500 --> 00:02:01,600 And that's I want to first start by thanking. 44 00:02:01,600 --> 00:02:04,800 All of you all the followers, even the silent ones. 45 00:02:04,800 --> 00:02:07,200 That just listen for fun and you don't really comment or 46 00:02:07,200 --> 00:02:09,199 interact. Thank you, as well. 47 00:02:09,500 --> 00:02:11,500 I really do appreciate your support. 48 00:02:11,600 --> 00:02:15,100 I appreciate every subscriber even ones that disagree with me 49 00:02:15,100 --> 00:02:17,600 from time to time. Even ones that leave snarky 50 00:02:17,600 --> 00:02:20,100 comments, I really do appreciate all of you. 51 00:02:20,400 --> 00:02:23,300 The channel has grown beyond my wildest expectations. 52 00:02:23,300 --> 00:02:26,900 When I started this, it has over a quarter million subscribers 53 00:02:27,200 --> 00:02:29,800 which is just incredible when you really think about. 54 00:02:29,900 --> 00:02:33,700 Out that and then not to mention a lot of channels that have 55 00:02:33,800 --> 00:02:37,000 million plus subscribers. Sometimes, they get really low 56 00:02:37,000 --> 00:02:38,700 engagement but that's not the case. 57 00:02:38,700 --> 00:02:43,800 Here, we have videos, getting 60,000 40,000 50,000, many of 58 00:02:43,800 --> 00:02:46,700 them, get above 100,000 on average. 59 00:02:46,700 --> 00:02:50,600 The channels get anywhere between 700 and 1.3 million 60 00:02:50,600 --> 00:02:53,900 views per month on a very consistent basis. 61 00:02:54,200 --> 00:02:56,300 So I appreciate everybody that's involved in this. 62 00:02:56,300 --> 00:02:59,500 It's been a very interesting, very fun thing to do. 63 00:02:59,600 --> 00:03:02,000 And I find Especially interesting to see the channel 64 00:03:02,000 --> 00:03:05,000 grow and the engagement grow even when the stock market's 65 00:03:05,000 --> 00:03:08,600 going down, we're having a tough year in the equity Market, but 66 00:03:08,600 --> 00:03:11,600 we're still gaining progress, overall on YouTube. 67 00:03:11,600 --> 00:03:14,400 The Joseph Carlson show is growing and subscribers and 68 00:03:14,400 --> 00:03:17,500 engagement, and not only that the secondary channel has now 69 00:03:17,500 --> 00:03:20,300 moved to a place where it's getting nearly as many views as 70 00:03:20,300 --> 00:03:23,200 my primary Channel. It has less subscribers, but 71 00:03:23,200 --> 00:03:25,200 that's gone up dramatically this year. 72 00:03:25,400 --> 00:03:29,700 We have 68 thousand subscribers on Joseph Carlson after hours. 73 00:03:29,900 --> 00:03:32,000 This channel was started as kind of a side thought. 74 00:03:32,000 --> 00:03:34,200 Something where I just put in some money into a girlthe 75 00:03:34,200 --> 00:03:37,100 portfolio, I picked more risky stocks that were little bit 76 00:03:37,100 --> 00:03:39,700 outside of my normal investment strategy, and I've been 77 00:03:39,700 --> 00:03:42,100 following along with that smaller portfolio and giving my 78 00:03:42,100 --> 00:03:45,000 opinion on over all these different tech companies and 79 00:03:45,000 --> 00:03:47,700 different related topics. But it's been amazing to see 80 00:03:47,700 --> 00:03:50,500 this channel grow as well. It's now at a point where a lot 81 00:03:50,500 --> 00:03:54,700 of the videos are getting 30, 40, 50 thousand views. 82 00:03:54,900 --> 00:03:58,000 This is a substantial amount of views for channel that has 68 83 00:03:58,000 --> 00:04:00,400 thousand subscribers. It's getting all Almost as many 84 00:04:00,400 --> 00:04:03,700 views as subscribers and every video and every month were 85 00:04:03,700 --> 00:04:06,200 adding thousands of new subscribers outside of the 86 00:04:06,200 --> 00:04:08,100 YouTube channels. We have the podcast growing, the 87 00:04:08,100 --> 00:04:09,900 Joseph Carlson show audio version. 88 00:04:09,900 --> 00:04:12,800 Some of you I know like to listen to the episodes when 89 00:04:12,800 --> 00:04:14,800 you're driving and you don't want to use your data on 90 00:04:14,800 --> 00:04:16,700 YouTube. So a lot of you are listening. 91 00:04:16,700 --> 00:04:19,800 A lot of you are viewing. But either way, I appreciate you 92 00:04:19,800 --> 00:04:21,500 following along. And then, finally, with the 93 00:04:21,500 --> 00:04:24,200 patreon membership, I appreciate all of you that are part of the 94 00:04:24,200 --> 00:04:27,200 patreon, and we've seen some incredible growth with this as 95 00:04:27,200 --> 00:04:28,800 well. It's actually been incredibly 96 00:04:28,800 --> 00:04:30,900 consistent. This What the membership looks 97 00:04:30,900 --> 00:04:34,300 like since starting patreon at. This isn't altered or changed in 98 00:04:34,308 --> 00:04:36,000 any way. That's straight off the patreon 99 00:04:36,000 --> 00:04:39,700 dashboard, we've gained members, basically every month, since the 100 00:04:39,700 --> 00:04:42,300 very start of it. And in terms of timeline, that's 101 00:04:42,300 --> 00:04:44,900 the point where I quit. My job as a full-time programmer 102 00:04:45,100 --> 00:04:47,800 to focus entirely on the YouTube and the patreon. 103 00:04:47,900 --> 00:04:50,600 So looking back over the year I'm very happy with the growth 104 00:04:50,600 --> 00:04:53,100 of the channels with the growth of the patreon and with the 105 00:04:53,100 --> 00:04:55,400 performance of the portfolio, I think things. 106 00:04:55,400 --> 00:04:58,500 Generally speaking are moving in a positive direction, I'm not 107 00:04:58,500 --> 00:05:01,700 near the point or even Close to the point like some YouTubers 108 00:05:02,000 --> 00:05:03,700 that are making millions of dollars a year. 109 00:05:03,700 --> 00:05:07,000 We're a long ways off from that, but we are moving in a positive 110 00:05:07,000 --> 00:05:09,000 direction. Now, with that said, I'm not 111 00:05:09,000 --> 00:05:11,500 satisfied, I'm not becoming complacent. 112 00:05:11,500 --> 00:05:14,000 I think there's a lot more that we can do here, and that's where 113 00:05:14,000 --> 00:05:16,200 these goals, come into place for 2023. 114 00:05:16,300 --> 00:05:18,400 Let's go ahead and start off with gold number one. 115 00:05:18,900 --> 00:05:22,000 Number one, I'm going to substantially increase the 116 00:05:22,000 --> 00:05:25,900 investment into qualtrics quiet room is a website, it's called 117 00:05:25,900 --> 00:05:28,300 from.com, and it's a suite of tools that's available to 118 00:05:28,300 --> 00:05:30,500 patreon members. This is something where it 119 00:05:30,500 --> 00:05:33,700 started off as a little project and it grew into something much 120 00:05:33,700 --> 00:05:36,600 bigger over time now. It has well over 2,500 members 121 00:05:36,600 --> 00:05:39,800 using it every single day. It's become quite popular on the 122 00:05:39,800 --> 00:05:41,600 patreon. And I think a lot of members are 123 00:05:41,608 --> 00:05:43,100 getting a lot of value out of it. 124 00:05:43,100 --> 00:05:46,200 When I started call trim, it was basically an app to take my 125 00:05:46,200 --> 00:05:49,600 spreadsheets off of spreadsheets and put them on a website and 126 00:05:49,600 --> 00:05:50,900 then it started to grow from there. 127 00:05:50,900 --> 00:05:53,300 Where I tracked, different data. With my month-over-month 128 00:05:53,300 --> 00:05:55,200 dividend growth, my year-over-year growth, my 129 00:05:55,200 --> 00:05:57,500 upcoming dividends my year-over-year dividend growth, 130 00:05:57,500 --> 00:05:59,700 so on and so forth. It did a lot of fun little 131 00:05:59,900 --> 00:06:02,300 Things were tracking dividends. The next thing that I difficult 132 00:06:02,300 --> 00:06:05,600 Rim is built something called insights, insights is a data 133 00:06:05,600 --> 00:06:09,300 analysis, tool for stocks where I try to take out all the stuff 134 00:06:09,300 --> 00:06:12,200 that I think, doesn't matter that much and only leave the 135 00:06:12,200 --> 00:06:14,200 data in. That's the most important for 136 00:06:14,200 --> 00:06:17,600 doing valuations of stocks. The entire idea of this website 137 00:06:17,600 --> 00:06:21,500 is to give a 360 view. A full view of the fundamentals 138 00:06:21,500 --> 00:06:26,100 of a company by just looking at one page right here, every 139 00:06:26,100 --> 00:06:29,100 single chart need to see every single graph, every single piece 140 00:06:29,100 --> 00:06:33,400 of data, And most importantly visually Illustrated that is 141 00:06:33,400 --> 00:06:36,500 critical when viewing data. Some people say I'm a visual 142 00:06:36,500 --> 00:06:38,100 learner. I learned things easier when I 143 00:06:38,108 --> 00:06:39,800 look at graphs and charts and visuals. 144 00:06:40,300 --> 00:06:42,800 That's not you you're not unique that way. 145 00:06:42,800 --> 00:06:45,500 We have studies from Vanderbilt University that people are 146 00:06:45,500 --> 00:06:48,500 generally speaking visual Learners that is the easiest way 147 00:06:48,500 --> 00:06:50,000 to learn. So when I build quality trim, 148 00:06:50,000 --> 00:06:53,500 its with that in mind, every bit of data is visually Illustrated 149 00:06:53,700 --> 00:06:56,800 with very easy ways to see progress and see performance 150 00:06:56,800 --> 00:06:58,700 over long periods of times of companies. 151 00:06:58,900 --> 00:07:01,900 And then you do have a National Data to give numbers to those 152 00:07:01,900 --> 00:07:05,400 visuals, but overall that's been a core focus when I looked at 153 00:07:05,400 --> 00:07:08,300 other tools, I was using at the time, things like Yahoo finance, 154 00:07:08,700 --> 00:07:11,800 this just doesn't click. When I look at rows of tabular 155 00:07:11,800 --> 00:07:15,000 data, stacked on top of each other and then trying to 156 00:07:15,000 --> 00:07:17,200 decipher what's going on from this. 157 00:07:17,400 --> 00:07:20,300 It takes literally 10 times the amount of time when I can have a 158 00:07:20,308 --> 00:07:23,100 lot more clarity with a short amount of time with insights. 159 00:07:23,100 --> 00:07:25,400 So insights was a key tool to qual, trim. 160 00:07:25,400 --> 00:07:27,900 And the second one that we built after creating the insights 161 00:07:27,900 --> 00:07:30,800 page, we created the dip finder, which is a Watch list that shows 162 00:07:30,800 --> 00:07:33,300 you, the moving averages of your company, they're currently 163 00:07:33,300 --> 00:07:35,400 trading in a dip or if they're searching in price. 164 00:07:35,400 --> 00:07:36,800 So that's required, term is currently. 165 00:07:36,800 --> 00:07:39,400 But what I've done is hired more developers and I plan on 166 00:07:39,400 --> 00:07:42,700 substantially increasing my investment into qualtrics 167 00:07:42,900 --> 00:07:46,900 because I think I can get a good return on this investment right 168 00:07:46,900 --> 00:07:48,400 now. I plan on doing this with the 169 00:07:48,400 --> 00:07:51,400 price remaining ten dollars a month which one I compared to 170 00:07:51,407 --> 00:07:55,300 virtually any other patreon. Any other data analytical tool 171 00:07:55,300 --> 00:07:58,000 for analyzing stocks, it is far and away one of the cheapest in 172 00:07:58,008 --> 00:07:59,700 the market for the data it offers. 173 00:08:00,000 --> 00:08:03,300 I'd like to go through all of 2023 without a single price 174 00:08:03,300 --> 00:08:06,700 increase, so I'm going to have it remain $10 a month, but I 175 00:08:06,707 --> 00:08:09,900 want to have easier onboarding more intuitive interface. 176 00:08:10,000 --> 00:08:12,800 I want to have international support and Canadians support. 177 00:08:12,800 --> 00:08:15,400 I want to have more features a redesign of a lot of different 178 00:08:15,400 --> 00:08:19,300 pages and a better mobile app on Android and iOS we've hired a 179 00:08:19,300 --> 00:08:21,800 mobile developer that's going to be rebuilding it from the ground 180 00:08:21,800 --> 00:08:23,200 up. And the Hope here is that all of 181 00:08:23,200 --> 00:08:25,900 these investments in the amount of money that this is costing, 182 00:08:26,100 --> 00:08:29,100 will eventually pay off all have high Returns on Capital 183 00:08:29,100 --> 00:08:31,800 employed, So to speak. So I'm going to be building out 184 00:08:31,800 --> 00:08:33,500 all of these tools. I'm going to be refining, call 185 00:08:33,500 --> 00:08:35,100 trim. I'll be making it substantially 186 00:08:35,100 --> 00:08:38,299 better than its competitors and the Hope here is that it adds 187 00:08:38,299 --> 00:08:41,200 more users that will have an influx of users that will help 188 00:08:41,200 --> 00:08:43,100 fund the additional investment here. 189 00:08:43,200 --> 00:08:45,900 Now, moving on, we have goal number two, and this is another 190 00:08:45,900 --> 00:08:49,300 investment goal outside of investing into qualtrics and 191 00:08:49,300 --> 00:08:51,000 hopefully getting a good return on that. 192 00:08:51,300 --> 00:08:54,100 The next place where I think I can get a good return, is the 193 00:08:54,100 --> 00:08:56,900 passive income portfolio. I want to grow it. 194 00:08:56,900 --> 00:08:59,700 I really want to push as hard as I can to grow this. 195 00:08:59,900 --> 00:09:01,800 Portfolio as aggressively as I can. 196 00:09:02,000 --> 00:09:04,300 So I'm going to be increasing the amount of dollar cost 197 00:09:04,300 --> 00:09:08,200 averaging into that portfolio to two thousand dollars per week. 198 00:09:08,400 --> 00:09:11,100 That is Michael, it's more ambitious and it's something 199 00:09:11,100 --> 00:09:13,800 that I'm not sure that I'll be able to do but I think I can 200 00:09:14,200 --> 00:09:17,900 currently I have around 70 thousand dollars saved in the M1 201 00:09:17,900 --> 00:09:20,600 spend account, that should help with that goal. 202 00:09:20,900 --> 00:09:23,600 So I have a bit of a Runway because two thousand dollars per 203 00:09:23,600 --> 00:09:26,800 week is right around, 100 thousand dollars for the year. 204 00:09:27,000 --> 00:09:29,700 So basically my goal is to dollar cost. 205 00:09:29,800 --> 00:09:32,600 Jin a hundred thousand dollars in 2023. 206 00:09:33,000 --> 00:09:36,900 I have 70,000 dollars saved that should help out with it and then 207 00:09:37,000 --> 00:09:40,400 that should also increase my dividend income on top of the 208 00:09:40,400 --> 00:09:43,200 reinvested dividends. Remember right now, my dividend 209 00:09:43,200 --> 00:09:46,000 income is at seven thousand three hundred and ninety-three 210 00:09:46,000 --> 00:09:51,900 dollars for 2022 and that is up. 36% my goal is to increase this 211 00:09:51,900 --> 00:09:56,200 once again by over thirty five percent which is right around a 212 00:09:56,200 --> 00:09:58,900 10 thousand dollar a year. So I want to go from five 213 00:09:58,900 --> 00:10:01,300 thousand dollars. The seventy four hundred dollars 214 00:10:01,500 --> 00:10:04,800 to ten thousand dollars plus in dividends in 2023. 215 00:10:04,900 --> 00:10:07,100 Now one thing I want to mention on this goal is that obviously 216 00:10:07,100 --> 00:10:09,700 two thousand dollars per week is a ton of money. 217 00:10:10,000 --> 00:10:11,500 It's a stretch for me to do this. 218 00:10:11,700 --> 00:10:14,800 I'll only be able to accomplish this if things go really well in 219 00:10:14,808 --> 00:10:17,500 2023. So this is a goal that might be 220 00:10:17,500 --> 00:10:20,800 altered or paired back. If I have unexpected expenses, 221 00:10:20,800 --> 00:10:23,400 which often times is a case with something like YouTube, that's 222 00:10:23,400 --> 00:10:26,900 very unpredictable. But I realize that in all 100 223 00:10:26,900 --> 00:10:29,700 thousand dollars being deposited in a portfolios, a ton of money. 224 00:10:29,800 --> 00:10:32,500 Me for single year. If you're not able to deposit 225 00:10:32,600 --> 00:10:36,200 that much money, that's fine. You don't need to, you can build 226 00:10:36,200 --> 00:10:39,300 your portfolio at a slower pace and still have an amazing 227 00:10:39,300 --> 00:10:42,700 retirement, my parents never once, got to the point where 228 00:10:42,700 --> 00:10:46,100 they could put this much per week into their portfolio and 229 00:10:46,100 --> 00:10:49,100 into their Investments, and they still retired in a very good 230 00:10:49,100 --> 00:10:52,200 situation. So this is entirely unnecessary. 231 00:10:52,400 --> 00:10:55,600 You do not have to build up your portfolio at a thousand or two 232 00:10:55,600 --> 00:10:58,300 thousand dollars a week. I'll be sacrificing purchasing 233 00:10:58,300 --> 00:11:01,400 anything like brand new car. Or anything really expensive to 234 00:11:01,400 --> 00:11:04,700 try to make this goal happen. Now, moving on to number three, 235 00:11:04,700 --> 00:11:07,800 I have another goal regarding Investments but this time, it's 236 00:11:07,800 --> 00:11:11,200 not about me building, qual trim or investing more into the 237 00:11:11,200 --> 00:11:14,400 passive income portfolio. This one's about my actual 238 00:11:14,400 --> 00:11:17,300 Investments, the type of things that I'm investing in, in the 239 00:11:17,308 --> 00:11:20,200 passive income portfolio. Everyone's been following the 240 00:11:20,200 --> 00:11:22,800 channel knows that I've been focused on Compounders, I've 241 00:11:22,800 --> 00:11:25,700 been on a bit of a kick with Compounders, some people have 242 00:11:25,700 --> 00:11:29,100 joked and said, when I go to the fast food, drive-thru, I order a 243 00:11:29,100 --> 00:11:31,700 compound And cheese. I get the joke. 244 00:11:31,700 --> 00:11:34,400 I'm really focused on Compounders and I'm going to 245 00:11:34,400 --> 00:11:38,100 relax from this a bit and introduce back higher risk, 246 00:11:38,100 --> 00:11:40,900 lower Quality Companies into the portfolio. 247 00:11:41,000 --> 00:11:43,300 All right, I'm just kidding. I'm not going to be introducing 248 00:11:43,400 --> 00:11:46,100 lower quality higher risk companies in the portfolio, 249 00:11:46,300 --> 00:11:49,100 quite the contrary, I'm doing something called High grading, 250 00:11:49,100 --> 00:11:52,200 the portfolio. That is where you sell off your 251 00:11:52,200 --> 00:11:56,100 weaker higher risk positions and you buy more of your strongest 252 00:11:56,100 --> 00:11:58,800 positions that have strengths in different categories. 253 00:11:59,000 --> 00:12:02,100 I'm looking for When is it have moats, that's an obvious one, 254 00:12:02,100 --> 00:12:05,000 but people use the term moat very Loosely. 255 00:12:05,300 --> 00:12:08,100 I'm looking for real modes, I want outright monopolies in my 256 00:12:08,100 --> 00:12:10,400 portfolio. I know from a consumer 257 00:12:10,400 --> 00:12:13,500 perspective and from a civilization standpoint, 258 00:12:13,600 --> 00:12:15,500 monopolies aren't looked at positively. 259 00:12:15,500 --> 00:12:19,000 Monopolies are looked at as evil companies that own an entire 260 00:12:19,000 --> 00:12:21,800 Market, from an investment perspective, I don't care, I 261 00:12:21,800 --> 00:12:24,600 want to own the companies that have the Monopoly, they have 262 00:12:24,600 --> 00:12:27,600 such a lock in on customers that they basically have no one they 263 00:12:27,600 --> 00:12:29,600 compete with. If I can't find an answer. 264 00:12:29,700 --> 00:12:31,900 Outright Monopoly. I'll move to the next best thing 265 00:12:31,900 --> 00:12:34,700 which is an oligopoly. Basically a monopoly shared 266 00:12:34,700 --> 00:12:36,100 between a couple different companies. 267 00:12:36,300 --> 00:12:38,800 These are the type of notes. I'm looking for companies have 268 00:12:38,800 --> 00:12:41,800 such a Stranglehold on a market that they literally have no 269 00:12:41,800 --> 00:12:43,700 competition at all. I want companies that have 270 00:12:43,700 --> 00:12:45,900 predictability with their earnings and companies that I 271 00:12:45,908 --> 00:12:47,700 consider to be undisrupted Bible. 272 00:12:47,900 --> 00:12:50,800 They're so locked in with their industry and Market position 273 00:12:51,000 --> 00:12:53,600 that they cannot be dislodged. Now, when I look at my current 274 00:12:53,600 --> 00:12:55,500 Holdings, I do have companies that I think meet that 275 00:12:55,500 --> 00:12:58,700 categorization, I've described Union Pacific and Canadian 276 00:12:58,700 --> 00:13:02,000 Pacific as As many times, I think they're locked in, and I 277 00:13:02,000 --> 00:13:04,300 think they're virtually undisrupted able, I've described 278 00:13:04,300 --> 00:13:07,500 apple as basically having a monopoly, it has one of the 279 00:13:07,500 --> 00:13:10,500 widest melts in the market, in my opinion, based off of its 280 00:13:10,500 --> 00:13:12,600 huge ecosystem. And I'd say the same for 281 00:13:12,600 --> 00:13:14,100 Microsoft. I think this is a very 282 00:13:14,100 --> 00:13:16,200 monopolistic company in some ways. 283 00:13:16,200 --> 00:13:18,800 It has such a strong Market position in so many different 284 00:13:18,800 --> 00:13:21,900 aspects of technology that I consider this company to have an 285 00:13:21,908 --> 00:13:24,900 incredibly wide mode and to be very difficult to be disrupted. 286 00:13:24,900 --> 00:13:27,400 But there are some companies that I do think follow into the 287 00:13:27,408 --> 00:13:30,000 weaker category Target being one of Them. 288 00:13:30,000 --> 00:13:32,500 I think this company doesn't really have a monopoly on 289 00:13:32,500 --> 00:13:34,500 anything. It's just another retailer. 290 00:13:34,700 --> 00:13:37,300 It's a great one and I made money with the stock, but I 291 00:13:37,300 --> 00:13:39,700 don't think this company's monopolistic at all church and 292 00:13:39,700 --> 00:13:41,800 white cells. Mostly secondary products. 293 00:13:41,800 --> 00:13:44,200 It's a great company but I don't consider this company 294 00:13:44,200 --> 00:13:46,600 monopolistic at all. So, part of high grading, a 295 00:13:46,600 --> 00:13:48,900 portfolio is making judgment calls. 296 00:13:49,200 --> 00:13:52,500 It means that you're selling off these weaker less monopolistic 297 00:13:52,600 --> 00:13:55,800 less predictable parts of the portfolio and moving that money 298 00:13:55,800 --> 00:13:58,800 to the stronger. More resilient more Modi parts 299 00:13:58,800 --> 00:14:00,800 of the portfolio. That's going to be a big focus 300 00:14:00,800 --> 00:14:03,200 of 2023. Overall, strengthening the 301 00:14:03,200 --> 00:14:06,200 portfolio to the point where I think every single holding in. 302 00:14:06,200 --> 00:14:09,100 It is incredibly strong and I'll let you know about different 303 00:14:09,100 --> 00:14:11,100 changes. I make with the portfolio as we 304 00:14:11,100 --> 00:14:13,600 go along this year, I'll be showing every single thing I'm 305 00:14:13,600 --> 00:14:16,300 doing with transparency like I have from the start. 306 00:14:16,700 --> 00:14:21,700 Now, finally moving on to number for my final goal of 20 23 is to 307 00:14:21,708 --> 00:14:25,500 improve the content quality and this is something I try to do. 308 00:14:25,500 --> 00:14:29,600 Basically, every year I want to remain with the core aspects of 309 00:14:29,700 --> 00:14:31,900 Of the Joseph Carlson show which I think is centered around, 310 00:14:31,900 --> 00:14:34,300 being honest and transparent with everything that I'm doing. 311 00:14:34,500 --> 00:14:36,800 But I also want to make some different improvements. 312 00:14:37,000 --> 00:14:39,600 I want to improve the technical setup, improving, the technical 313 00:14:39,600 --> 00:14:41,000 setup. Literally means I just buy 314 00:14:41,000 --> 00:14:43,300 better tools to be able to create the production of this 315 00:14:43,300 --> 00:14:45,200 show. Last year, the quality of the 316 00:14:45,200 --> 00:14:46,700 videos on the after-hours channel. 317 00:14:46,700 --> 00:14:49,700 For example, look like this and then this year I upgraded the 318 00:14:49,700 --> 00:14:53,100 camera quality, I change the framing a little bit, I added in 319 00:14:53,100 --> 00:14:55,600 new editing and I think overall it makes for a better 320 00:14:55,600 --> 00:14:57,900 production. This is a technical Improvement 321 00:14:57,900 --> 00:15:01,400 to the show over time and That I plan on continuing to do and to 322 00:15:01,400 --> 00:15:04,400 2023 and outside of improving the text set up to produce the 323 00:15:04,400 --> 00:15:06,200 show. I also plan on increasing the 324 00:15:06,200 --> 00:15:07,700 ways to view and follow the show. 325 00:15:07,800 --> 00:15:09,900 I've been putting more content onto Twitter. 326 00:15:10,200 --> 00:15:13,100 I've been creating more content on the secondary Channel and 327 00:15:13,100 --> 00:15:16,400 I've been putting more content more frequently on the podcast 328 00:15:16,400 --> 00:15:20,100 version trying to give followers more ways to follow along with 329 00:15:20,100 --> 00:15:23,700 the journey at your convenience. And I also have a goal to 330 00:15:23,700 --> 00:15:27,100 increase the actual quality of the content that's being 331 00:15:27,100 --> 00:15:30,000 produced. Both in terms of editing, And 332 00:15:30,000 --> 00:15:32,800 the data and insights that's being shared early on in the 333 00:15:32,800 --> 00:15:35,300 channel. I had a strong focus on looking 334 00:15:35,300 --> 00:15:37,500 at the qualitative parts of a company. 335 00:15:37,700 --> 00:15:41,500 The leadership, the mode of the company, the intangible assets, 336 00:15:41,500 --> 00:15:44,200 the business model, the way, the company would try to outplay and 337 00:15:44,200 --> 00:15:47,600 outdo, its competitors. This is the story of a stock, 338 00:15:47,700 --> 00:15:50,500 this is the qualitative analysis, the things that the 339 00:15:50,500 --> 00:15:52,900 numbers, don't tell you then later on in the channel, I 340 00:15:52,908 --> 00:15:55,500 started to emphasize more, the quantitative aspects of a 341 00:15:55,508 --> 00:15:58,000 company. The valuation, the pricing, the 342 00:15:58,000 --> 00:16:00,700 free cash flow yield. The New Growth that ibadah 343 00:16:00,700 --> 00:16:04,000 growth, the free cash flow, the free cash flow subtracting out, 344 00:16:04,000 --> 00:16:06,900 stock-based compensation. And so on and so forth. 345 00:16:07,200 --> 00:16:09,500 This isn't the qualitative aspect of a company. 346 00:16:09,700 --> 00:16:11,800 This is the quantitative aspect of a company. 347 00:16:12,000 --> 00:16:15,400 This is the fundamentals. And what I want to do in 2023 is 348 00:16:15,400 --> 00:16:18,200 combine, both the quantitative data, the things that we can 349 00:16:18,200 --> 00:16:20,900 calculate as well as the qualities of a company. 350 00:16:20,900 --> 00:16:24,600 The intangible aspects and I want to combine them into one 351 00:16:24,600 --> 00:16:28,700 rich, full investment thesis on a company so that you have both 352 00:16:28,700 --> 00:16:31,300 an understanding of Of all of the fundamentals and the 353 00:16:31,300 --> 00:16:34,600 qualities of a company and I think I can accomplish this. 354 00:16:34,700 --> 00:16:37,400 I plan to step up my level of research and Analysis on these 355 00:16:37,400 --> 00:16:40,500 companies and really try to portray the full story of a 356 00:16:40,508 --> 00:16:43,500 company, both the data and the qualities, and a full 357 00:16:43,500 --> 00:16:45,700 well-rounded analysis. So that's really it. 358 00:16:45,700 --> 00:16:49,100 That's my four goals for 2023 and I think these are ones that 359 00:16:49,100 --> 00:16:52,700 I can do, but sometimes things unravel in a way that we don't 360 00:16:52,700 --> 00:16:54,200 predict. So even though these are goals, 361 00:16:54,200 --> 00:16:56,600 they're not guarantees. But this is what I'm hoping to 362 00:16:56,600 --> 00:16:58,400 accomplish next year. So we have a lot. 363 00:16:58,400 --> 00:17:01,400 We're going to be doing in 3. It's going to be a busy year and 364 00:17:01,400 --> 00:17:03,400 I think we're going to have a lot of fun going through it 365 00:17:03,400 --> 00:17:05,800 together. Now, having said that I want to 366 00:17:05,800 --> 00:17:09,900 jump in to the new addition to the portfolio, which is sp GI, I 367 00:17:09,900 --> 00:17:13,400 put it in the financial category because this is a financial 368 00:17:13,400 --> 00:17:16,599 service company. But it's not necessarily like 369 00:17:16,599 --> 00:17:19,400 tiro price or it's just a money manager. 370 00:17:19,400 --> 00:17:22,700 It's not a bank like JP Morgan. Chase VSP Global is known to be 371 00:17:22,700 --> 00:17:24,800 one of the big three credit rating agencies. 372 00:17:24,800 --> 00:17:27,700 They're known as The Big Three because there's just three of 373 00:17:27,700 --> 00:17:31,000 them and they're all really big. This is what a monopoly is, it's 374 00:17:31,000 --> 00:17:33,700 what an oligopoly is. It's when a couple companies 375 00:17:33,900 --> 00:17:37,300 control, a huge market and they have a position where it's 376 00:17:37,300 --> 00:17:40,700 nearly impossible to disrupt them from that position. 377 00:17:40,700 --> 00:17:43,800 The big three in this case, our SP Global, which is the one I'm 378 00:17:43,800 --> 00:17:46,500 buying into Moody's, which is one Warren Buffett has owned for 379 00:17:46,500 --> 00:17:50,300 decade after decade calling the company, basically bulletproof 380 00:17:50,300 --> 00:17:51,800 and then Fitch group. Now, the thing a lot of 381 00:17:51,800 --> 00:17:54,500 investors don't realize because we don't really have a close 382 00:17:54,500 --> 00:17:57,100 connection with this company. We're not really using it. 383 00:17:57,100 --> 00:18:01,200 Personally is how powerful of a They really have Buffett has 384 00:18:01,200 --> 00:18:04,300 repeatedly talked about Moody's Corporation as having these 385 00:18:04,300 --> 00:18:07,000 qualities that are very attractive to investors. 386 00:18:07,200 --> 00:18:10,200 We pay Moody's a lot of money to write us, you know, I'd like to 387 00:18:10,200 --> 00:18:13,600 not pay him that money. So I've seen their position, the 388 00:18:13,600 --> 00:18:18,000 competitive position and, you know, they operate in a business 389 00:18:19,000 --> 00:18:22,600 with very wide profit margins. Very high Returns on Capital and 390 00:18:22,600 --> 00:18:24,900 it's a business that will probably grow over time. 391 00:18:24,900 --> 00:18:27,400 This is it a conflict of interest that you pay them to 392 00:18:27,400 --> 00:18:31,500 rate you? Well, I wish it were so that we 393 00:18:31,500 --> 00:18:37,100 didn't have to pay him but as a practical matter, you know, we 394 00:18:37,100 --> 00:18:38,900 need their ready. We shouldn't need to ready. 395 00:18:38,900 --> 00:18:41,100 I mean, anybody should be able to look at Berkshire Hathaway's. 396 00:18:41,100 --> 00:18:44,000 That's a wonderful credit, but the world in the way, the world 397 00:18:44,000 --> 00:18:46,600 exists, we need, they're ready. And we need standard Poor's 398 00:18:46,600 --> 00:18:48,800 rating. And we are not in a position to 399 00:18:48,800 --> 00:18:52,100 negotiate on price and I hate to say that on National Television, 400 00:18:52,100 --> 00:18:54,500 where the guy listening, maybe the guy that determines my 401 00:18:54,500 --> 00:18:57,200 buildings time. But that is a position where we 402 00:18:57,200 --> 00:18:58,900 live in a world where we need their rating. 403 00:18:59,000 --> 00:19:00,800 They have. Have it and they're not in a 404 00:19:00,808 --> 00:19:03,500 position to negotiate on price. Now, even though the credit 405 00:19:03,500 --> 00:19:07,000 rating agency is a very big moat market and it's a nice one to 406 00:19:07,000 --> 00:19:10,600 control, it is very cyclical and that is something that I've said 407 00:19:10,600 --> 00:19:14,600 many times, I don't like I don't love highly cyclical companies 408 00:19:14,600 --> 00:19:18,400 and we can see what's happening right now as a lot of companies 409 00:19:18,400 --> 00:19:21,300 are preparing for recessions. You can see that they're issuing 410 00:19:21,300 --> 00:19:23,900 less debt. They don't like to issue debt. 411 00:19:23,900 --> 00:19:26,500 If we're going into a slowing economy so we can even see with 412 00:19:26,500 --> 00:19:29,000 companies like Moody's. The amount of free cash flow 413 00:19:29,000 --> 00:19:30,900 every community. Quarter for the past year, has 414 00:19:30,900 --> 00:19:34,000 been going down because remember these companies make money by 415 00:19:34,000 --> 00:19:36,200 rating debt, they rate the bonds. 416 00:19:36,400 --> 00:19:39,000 And if there's not as many bonds issued, they don't make as much 417 00:19:39,000 --> 00:19:40,600 money. So the amount of earnings per 418 00:19:40,600 --> 00:19:44,900 share is also gone down 30 or 40 percent year over year because 419 00:19:44,900 --> 00:19:48,600 there's less bonds being issued now than there was a year ago in 420 00:19:48,600 --> 00:19:51,700 this time period in excitement and cheap debt. 421 00:19:51,800 --> 00:19:54,600 There is bonds being issued left and right, companies were taking 422 00:19:54,600 --> 00:19:58,200 out record amounts of debt so Moody's and S&P Global were 423 00:19:58,200 --> 00:19:59,500 benefiting greatly from all that. 424 00:19:59,600 --> 00:20:01,900 Tapping issued. And when we flip over to SP 425 00:20:01,900 --> 00:20:03,700 Global, we can see the very same thing here. 426 00:20:04,000 --> 00:20:06,600 Earnings per share are dropping because the amount of bonds 427 00:20:06,600 --> 00:20:09,600 being issued is going down. And that's a problem with these 428 00:20:09,600 --> 00:20:12,100 companies. Something that I don't like what 429 00:20:12,100 --> 00:20:16,000 I do like to see is this company actually addressing this problem 430 00:20:16,000 --> 00:20:18,700 with their stock, in their company, see what SP Global has 431 00:20:18,700 --> 00:20:21,700 done over time as Diversified their revenue stream, the try to 432 00:20:21,700 --> 00:20:25,700 make it a less cyclical company. Since 2021, the ratings portion 433 00:20:25,700 --> 00:20:27,800 of the business made up 49 percent of the income. 434 00:20:27,800 --> 00:20:29,900 So, roughly half comes from Ratings. 435 00:20:30,100 --> 00:20:32,900 But then we have 27 percent coming from their Market 436 00:20:32,900 --> 00:20:36,600 intelligence applications, we have eleven percent coming from 437 00:20:36,600 --> 00:20:38,800 Platts. That's like market indicators 438 00:20:38,800 --> 00:20:40,800 and things that a lot of Traders and big Banks use. 439 00:20:41,100 --> 00:20:44,100 And then we have the indices, they control things like the S&P 440 00:20:44,100 --> 00:20:47,700 Global, and they get kind of a franchise fee from anybody that 441 00:20:47,700 --> 00:20:50,000 makes ETFs based off of their indexes. 442 00:20:50,000 --> 00:20:53,300 So they also get residual income from their indices and the 443 00:20:53,300 --> 00:20:56,000 growing passive income trend has benefited them. 444 00:20:56,300 --> 00:20:59,500 So what we see here is a level of diversification, even though, 445 00:20:59,500 --> 00:21:01,100 Their business is highly cyclical. 446 00:21:01,100 --> 00:21:04,900 This part of the business is far less cyclical and still they're 447 00:21:04,900 --> 00:21:08,100 using this additional income to smooth out the revenue and the 448 00:21:08,100 --> 00:21:11,100 free cash flow over time. Now SP Global has even done 449 00:21:11,100 --> 00:21:12,400 more. The try to diversify their 450 00:21:12,400 --> 00:21:15,800 income and make their business setup for more future growth. 451 00:21:15,800 --> 00:21:18,600 They don't want to be hampered down by just a credit rating 452 00:21:18,600 --> 00:21:20,900 portion of their business. They want to have stronger 453 00:21:20,900 --> 00:21:24,600 secular Trends and so they purchased a company called IHS 454 00:21:24,600 --> 00:21:28,900 Market, which is a market data company, providing data that 455 00:21:28,900 --> 00:21:30,800 everyone needs. Needs to invest in the market. 456 00:21:30,800 --> 00:21:34,100 Do research build ETFs, all of that type of stuff. 457 00:21:34,100 --> 00:21:36,400 There is a ton of data this company owns. 458 00:21:36,400 --> 00:21:39,600 Now, the effects of this merger will even diversify their income 459 00:21:39,600 --> 00:21:44,000 more where now the ratings make up roughly 30% of the revenue, 460 00:21:44,200 --> 00:21:47,100 going down from fifty percent and then the financial info and 461 00:21:47,100 --> 00:21:51,100 services make up 32%. And this is a good business to 462 00:21:51,100 --> 00:21:54,500 be in everything that they purchased with this acquisition 463 00:21:54,500 --> 00:21:56,600 is almost entirely reoccurring Revenue. 464 00:21:56,700 --> 00:21:59,400 So the company they purchased is all data driven. 465 00:21:59,600 --> 00:22:02,100 Option based Revenue with very high margins. 466 00:22:02,400 --> 00:22:06,100 They have 14% going to transportation and energy, 15% 467 00:22:06,100 --> 00:22:10,000 going to commodity, and energy, and the 9% going to the indices. 468 00:22:10,100 --> 00:22:12,900 So, when I look over this transaction of SP, Global buying 469 00:22:12,900 --> 00:22:16,600 IHS Market, I really like it. I think this is a good decision 470 00:22:16,600 --> 00:22:19,200 for management. It is true that the largest moat 471 00:22:19,200 --> 00:22:22,100 part of their company. The ratings part is becoming a 472 00:22:22,100 --> 00:22:25,700 smaller portion of the company but they're sacrificing a little 473 00:22:25,700 --> 00:22:28,700 bit of moat to make it so that they have way more secular 474 00:22:28,700 --> 00:22:30,400 growth trends. And the thing that they're 475 00:22:30,400 --> 00:22:34,800 buying is still pretty wide mode Financial info, and services is 476 00:22:34,800 --> 00:22:38,100 a very good Market to begin with high margins and reoccurring 477 00:22:38,100 --> 00:22:40,800 revenue and it has strong secular Trends. 478 00:22:40,800 --> 00:22:43,400 There's going to be a far bigger need for these Financial info 479 00:22:43,400 --> 00:22:46,300 and services in the future than there is right now. 480 00:22:46,600 --> 00:22:49,000 So, I think management is setting the company up very 481 00:22:49,000 --> 00:22:51,200 well. For the next decade of growth, I 482 00:22:51,200 --> 00:22:55,300 view this type of transaction. As similar to Google, not just 483 00:22:55,300 --> 00:22:58,300 relying on their course, search engine, but trying to grow and 484 00:22:58,300 --> 00:23:01,400 things like cloud. Things like YouTube and other 485 00:23:01,400 --> 00:23:03,100 bets. It's a way of a company that has 486 00:23:03,100 --> 00:23:06,300 an incredibly wide moat with one part of their business, using 487 00:23:06,300 --> 00:23:09,100 that moat to buy other growth pass for the company. 488 00:23:09,200 --> 00:23:12,100 And in this case, every single aspect of this company, that it 489 00:23:12,108 --> 00:23:15,100 competes in does have strong secular growth Trends. 490 00:23:15,300 --> 00:23:17,800 Ratings has Revenue growth over the past five years. 491 00:23:17,900 --> 00:23:21,000 Their Market Intelligence Division has Revenue growth over 492 00:23:21,000 --> 00:23:23,900 the past five years. Market, indicators, has Revenue 493 00:23:23,900 --> 00:23:27,000 growth through both pricing power and expansion of customers 494 00:23:27,000 --> 00:23:29,700 and not only are they growing of the top line revenue with Every 495 00:23:29,700 --> 00:23:32,500 individual division, but they're growing their operating profits. 496 00:23:32,600 --> 00:23:35,700 Every single division is they're growing their operating margins. 497 00:23:35,900 --> 00:23:39,200 Their margins are either consistent or slightly growing 498 00:23:39,200 --> 00:23:41,400 over time. So this company here is 499 00:23:41,400 --> 00:23:44,800 service-based, reoccurring Revenue, High margins with 500 00:23:44,800 --> 00:23:47,100 growing revenues throughout every part of the company, 501 00:23:47,100 --> 00:23:50,000 growing operating profits and growing margins. 502 00:23:50,000 --> 00:23:52,500 It's very difficult to find something so far at this company 503 00:23:52,500 --> 00:23:55,100 that I really don't like. And then not to mention the 504 00:23:55,100 --> 00:23:57,500 first thing that they actually go through and their earnings 505 00:23:57,500 --> 00:24:00,900 report, the very first thing, Is there free cash flow? 506 00:24:01,200 --> 00:24:03,700 I look at a lot of earnings reports and I don't see many 507 00:24:03,700 --> 00:24:06,900 companies that want to highlight their free, cash flow, right up 508 00:24:06,900 --> 00:24:09,200 front. But this company is so focused 509 00:24:09,200 --> 00:24:13,300 on growing real free cash flows, undiluted free cash, flows that 510 00:24:13,300 --> 00:24:17,100 they put it front and center. This is Page, 8 of the investor 511 00:24:17,100 --> 00:24:19,500 relations. This is at the very beginning of 512 00:24:19,500 --> 00:24:22,700 their 100-page report because they're proud of the growth. 513 00:24:22,700 --> 00:24:25,100 They've had in free cash flows. So when I look at quatrain, we 514 00:24:25,100 --> 00:24:28,400 can see they're very same free cash flows, their massive free 515 00:24:28,400 --> 00:24:31,000 cash flow growth. Over the past five years and 516 00:24:31,000 --> 00:24:33,900 very consistent before that for literally, two decades. 517 00:24:33,900 --> 00:24:36,700 So this company is a first and foremost, free cash flow, Focus 518 00:24:36,700 --> 00:24:40,600 company, but they also focus on returning Capital to 519 00:24:40,600 --> 00:24:43,700 shareholders that something. They highlight right up front. 520 00:24:43,700 --> 00:24:47,100 They're focused on resulting in strong, total shareholder 521 00:24:47,100 --> 00:24:49,000 returns. And that is something that they 522 00:24:49,000 --> 00:24:52,100 have successfully done. The irony with SP Global is the 523 00:24:52,100 --> 00:24:55,100 company benefits from people moving to passive investing 524 00:24:55,100 --> 00:24:57,800 buying the S&P 500. They're the company that's 525 00:24:57,800 --> 00:25:02,200 basically selling you. The S&P 500 selling you passive 526 00:25:02,200 --> 00:25:05,300 investing. But had you invested in Sp 527 00:25:05,300 --> 00:25:08,000 Global instead of the passive investing ETFs? 528 00:25:08,200 --> 00:25:10,800 You would have done far better, buying the company creating the 529 00:25:10,800 --> 00:25:13,800 passive investing than buying the passive investing itself. 530 00:25:13,800 --> 00:25:17,100 SP Global's returns without dividends is five hundred and 531 00:25:17,100 --> 00:25:20,600 twenty-two percent over the past decade, and they are a big 532 00:25:20,600 --> 00:25:22,700 dividend payers. In fact, this is one of the most 533 00:25:22,700 --> 00:25:26,100 well-respected dividend payers because of their long history in 534 00:25:26,100 --> 00:25:28,100 2023. They're going to become a 535 00:25:28,100 --> 00:25:31,000 dividend aristocrat. At if they do one more dividend 536 00:25:31,000 --> 00:25:33,500 rays, which they will, that will make it so that they have 50 537 00:25:33,500 --> 00:25:35,500 consecutive years of dividend raises. 538 00:25:35,700 --> 00:25:38,600 And, in the past five years, they've average dividend raises 539 00:25:38,700 --> 00:25:42,000 not at this. Puny one cent raise every year, 540 00:25:42,000 --> 00:25:45,400 like, companies trying to just hang on to some record and 541 00:25:45,400 --> 00:25:47,200 they're doing it as a symbolic raise. 542 00:25:47,200 --> 00:25:51,100 They've averaged 15.7% of and raises for the past five years. 543 00:25:51,200 --> 00:25:53,500 I only have a couple other companies in my portfolio that 544 00:25:53,508 --> 00:25:56,300 have raised dividends that fast. So this should be one of the 545 00:25:56,300 --> 00:25:59,300 faster dividend increase in companies in my entire 546 00:25:59,300 --> 00:26:00,000 portfolio. Folio. 547 00:26:00,000 --> 00:26:02,300 Now, of course, the fundamentals of this company scream that it's 548 00:26:02,300 --> 00:26:05,400 a compounder and basically every aspect growing net income over 549 00:26:05,400 --> 00:26:08,800 time, growing earnings per share over time, very consistent and 550 00:26:08,800 --> 00:26:11,500 growing free cash flow. That's exploded recently, I 551 00:26:11,508 --> 00:26:14,200 think this will become even more consistent with their latest 552 00:26:14,200 --> 00:26:16,200 acquisition. If we look at the balance sheet 553 00:26:16,200 --> 00:26:19,100 of the company, they've taken on a lot of debt, it's nearly 554 00:26:19,100 --> 00:26:21,700 tripled, but that is for this new purchase and they've 555 00:26:21,700 --> 00:26:24,900 committed to paying this debt down aggressively and you can 556 00:26:24,900 --> 00:26:27,200 see that they're already doing that their debt for the 557 00:26:27,200 --> 00:26:32,400 acquisition, went up to 11 .33. Billion down to 10 .78, down to 558 00:26:32,400 --> 00:26:34,800 10 .73. Every quarter they're slashing 559 00:26:34,800 --> 00:26:36,400 away. More of their long-term debt and 560 00:26:36,400 --> 00:26:40,000 likewise they also funded this acquisition in part by shares 561 00:26:40,000 --> 00:26:42,000 outstanding. You can see that they issued a 562 00:26:42,008 --> 00:26:45,100 lot of new shares to pay for this new company, but what are 563 00:26:45,100 --> 00:26:48,100 they doing right away? They're aggressively buying back 564 00:26:48,100 --> 00:26:50,400 the shares. They just issued with their new 565 00:26:50,400 --> 00:26:55,100 income stream, 338 million shares, outstanding 1/4 later, 566 00:26:55,100 --> 00:26:58,800 it's 329 million. That is a huge share reduction, 567 00:26:58,900 --> 00:27:00,400 right? An acquisition. 568 00:27:00,600 --> 00:27:03,400 And this company says that they're doing an accelerated 569 00:27:03,500 --> 00:27:05,800 aggressive, repurchasing of shares. 570 00:27:06,000 --> 00:27:09,500 They want to get this dilution back under control as fast as 571 00:27:09,500 --> 00:27:12,400 possible and of course we can look at that defining metric of 572 00:27:12,400 --> 00:27:16,000 a high quality company Returns on Capital employed, we have a 573 00:27:16,008 --> 00:27:20,000 company here, that consistently has above 30% often getting up 574 00:27:20,000 --> 00:27:22,700 into the forty percent Returns on Capital employed. 575 00:27:22,900 --> 00:27:25,600 That is topped hair. That's getting up with companies 576 00:27:25,600 --> 00:27:28,700 like Estee Lauder. This is the Terry Smith metric. 577 00:27:28,800 --> 00:27:32,400 The number One where he defines a good company from a bad one. 578 00:27:32,500 --> 00:27:35,500 And in terms of valuation, it's hard to do valuations right now, 579 00:27:35,500 --> 00:27:37,800 without the full impact of their acquisition. 580 00:27:38,000 --> 00:27:41,400 But the company has the risked, a lot in terms of valuation, 581 00:27:41,500 --> 00:27:43,800 it's come down in price 26 percent this year. 582 00:27:44,000 --> 00:27:47,000 So, it's had a substantial drop as investors are a little bit 583 00:27:47,000 --> 00:27:50,700 concerned about the slowing economy, and the slowing credit 584 00:27:50,700 --> 00:27:53,500 rating agency business. But like I said before, that's 585 00:27:53,500 --> 00:27:55,400 going to make up a smaller portion of their overall 586 00:27:55,400 --> 00:27:57,600 company. And I think the secular trends 587 00:27:57,600 --> 00:28:01,000 of this company will outweigh Any short-term problems. 588 00:28:01,200 --> 00:28:05,800 So right now I'm looking at it as an opportunity to buy in at 589 00:28:05,800 --> 00:28:08,600 less inflated prices buying it over here. 590 00:28:08,700 --> 00:28:10,700 I think is a mistake. You're just getting a very 591 00:28:10,700 --> 00:28:14,600 frothy company high prices but it's D risked a lot coming down 592 00:28:14,600 --> 00:28:16,900 into this Zone. Maybe this company will go lower 593 00:28:16,900 --> 00:28:18,700 over the next year but that's fine for me. 594 00:28:18,700 --> 00:28:21,100 This is a multi-year holding which I plan on dollar cost 595 00:28:21,100 --> 00:28:24,400 averaging in over 20 23. So I'm not saying you should buy 596 00:28:24,400 --> 00:28:27,700 this company but for me this is exactly what I'm looking for a 597 00:28:27,700 --> 00:28:30,500 wide moat service based. P'nay with secular growth 598 00:28:30,500 --> 00:28:33,200 Trends, high amounts of consistent, free, cash flow and 599 00:28:33,200 --> 00:28:34,500 a company. That doesn't dilute the 600 00:28:34,500 --> 00:28:36,800 shareholders through massive amounts of stock-based 601 00:28:36,800 --> 00:28:39,500 compensation. And a company that also pays a 602 00:28:39,500 --> 00:28:42,700 growing dividend and has done that for 49 years. 603 00:28:43,000 --> 00:28:45,200 It checks all the boxes. I'm happy to have it in the 604 00:28:45,200 --> 00:28:46,900 portfolio. Now, moving on, I was reading 605 00:28:46,900 --> 00:28:49,200 through a lot of different investment Outlook write-ups 606 00:28:49,200 --> 00:28:52,500 from different companies and Banks like Goldman Sachs and JP 607 00:28:52,500 --> 00:28:54,000 Morgan. And I was reading through 608 00:28:54,000 --> 00:28:57,500 jpmorgan's investment outlook for 2023 and something caught. 609 00:28:57,500 --> 00:28:59,300 My attention JPMorgan has an entire section. 610 00:28:59,500 --> 00:29:01,900 In here called defend. What dividends they say that our 611 00:29:01,900 --> 00:29:04,600 base case sees a moderate recession and most major 612 00:29:04,600 --> 00:29:07,700 developed economies in 2023. That's pretty consistent with 613 00:29:07,700 --> 00:29:09,400 the consensus. They say that we believe that 614 00:29:09,400 --> 00:29:12,800 the equity markets have already priced in a lot of the bad news 615 00:29:12,800 --> 00:29:17,100 in 2022, but stocks which provide an attractive income 616 00:29:17,200 --> 00:29:20,500 appear, more reasonably valued than those with little, or no 617 00:29:20,500 --> 00:29:24,300 income investors, who are more cautious than us about the 618 00:29:24,300 --> 00:29:26,300 Outlook. May want to focus on this 619 00:29:26,300 --> 00:29:28,900 cheaper segment of the market to hopefully limit further 620 00:29:28,900 --> 00:29:29,700 downside. Side. 621 00:29:29,700 --> 00:29:32,200 Of course, the income stream from Dependable dividend. 622 00:29:32,200 --> 00:29:35,300 Payers can also help buffer returns strong dividend-paying 623 00:29:35,300 --> 00:29:37,500 companies. Often go to Great Lengths to 624 00:29:37,500 --> 00:29:40,100 maintain dividends. Even when the earnings are under 625 00:29:40,100 --> 00:29:43,600 pressure with payout ratio, is relatively modest at present, 626 00:29:43,600 --> 00:29:46,600 maintaining current dividends looks more feasible than, in 627 00:29:46,600 --> 00:29:49,700 some prior recessions. So what they're saying there is 628 00:29:49,700 --> 00:29:53,200 right now, companies have a lot of leeway, they have a lot of 629 00:29:53,200 --> 00:29:57,000 flexibility with their dividends because of the low payout ratio. 630 00:29:57,100 --> 00:30:01,800 For example, a company like, SP Global has Payout ratio of 27%, 631 00:30:01,800 --> 00:30:04,500 they have a lot of flexibility. They could raise that to double 632 00:30:04,500 --> 00:30:06,700 and still be able to safely cover their dividend. 633 00:30:06,700 --> 00:30:09,300 Now, next JP Morgan goes on to highlight a point that I've been 634 00:30:09,300 --> 00:30:12,600 making over and over again. So JP Morgan's late to the game 635 00:30:12,600 --> 00:30:15,100 here but they're pointing out something that I really think is 636 00:30:15,100 --> 00:30:17,400 important. Dividends are far more 637 00:30:17,400 --> 00:30:21,100 consistent and reliable a reliable form of returns in the 638 00:30:21,108 --> 00:30:24,000 stock market than any other form of return. 639 00:30:24,300 --> 00:30:27,900 Dividends tend to fall less than earnings in recessions. 640 00:30:28,200 --> 00:30:30,700 So on this chart, there's Two different, graphs are two 641 00:30:30,700 --> 00:30:33,500 different colors. The blue is the EPS drawdown in 642 00:30:33,500 --> 00:30:35,900 different companies and the Orange is amount of dividends 643 00:30:35,900 --> 00:30:38,200 being paid. Notice that the Blue Line, the 644 00:30:38,208 --> 00:30:41,100 amount of earnings of companies goes up and down way more 645 00:30:41,100 --> 00:30:43,900 dramatically and volatile than the amount of dividends being 646 00:30:43,900 --> 00:30:45,400 paid. This is because dividend 647 00:30:45,400 --> 00:30:48,200 companies are not only more resilient more full 648 00:30:48,200 --> 00:30:51,000 weatherproof, they're more recession resistant but they 649 00:30:51,000 --> 00:30:53,900 also give a strong priority to continually paying the dividend 650 00:30:54,100 --> 00:30:57,300 even during difficult times. Unless they really think it's a 651 00:30:57,300 --> 00:30:59,300 long-term problem. They will continue. 652 00:30:59,400 --> 00:31:01,800 Need to pay the dividend now, they say in conclusion, even 653 00:31:01,800 --> 00:31:04,600 though we expect a challenging macroeconomic environment in 654 00:31:04,600 --> 00:31:08,500 2023 and downward corporate earnings revisions we think 655 00:31:08,500 --> 00:31:11,900 income stocks could have a good year with dividends proving more 656 00:31:11,900 --> 00:31:15,300 resilient than earnings for investors that are tentatively 657 00:31:15,600 --> 00:31:19,400 looking to increase their Equity exposure on income tilt could 658 00:31:19,400 --> 00:31:23,100 prove relatively resilient in the worst case scenario, while 659 00:31:23,100 --> 00:31:26,000 also providing the potential for outperformance and a more 660 00:31:26,000 --> 00:31:29,200 optimistic scenario for markets, given the attractive valuations. 661 00:31:29,600 --> 00:31:31,900 So they see both upside with dividend payers. 662 00:31:32,200 --> 00:31:36,200 If things go south next year. And if things go well because 663 00:31:36,200 --> 00:31:39,100 evaluations in both cases, they're suggesting a tilt 664 00:31:39,100 --> 00:31:42,200 towards income stocks. Now enough about my plans and my 665 00:31:42,200 --> 00:31:44,300 ambitions. I want to hear the input and 666 00:31:44,300 --> 00:31:47,400 plans with someone else, this individual here who highlights 667 00:31:47,400 --> 00:31:51,200 his plan of how to break out of the situation, he's in he's 668 00:31:51,200 --> 00:31:54,500 working at a gas station and by the end of 2020 3 he wants to 669 00:31:54,500 --> 00:31:58,300 have a million dollar portfolio and he lays out in just a minute 670 00:31:58,300 --> 00:32:00,900 Thirty hair. He plans on accomplishing that. 671 00:32:01,100 --> 00:32:02,300 Let's go ahead and Jump Right In. 672 00:32:02,400 --> 00:32:04,500 This is my step by step plan on how I'm going to get rich from 673 00:32:04,500 --> 00:32:07,500 working at my gas station job. So first, let's break down my 674 00:32:07,500 --> 00:32:10,700 expenses. I spend $1500 a month on rent. 675 00:32:10,700 --> 00:32:13,200 The first thing I want to do is pause right there and just say I 676 00:32:13,200 --> 00:32:17,500 feel bad for people in the situation, paying $1500 for rent 677 00:32:17,500 --> 00:32:20,800 is crazy. I pay less for my entire Home 678 00:32:20,800 --> 00:32:23,600 Mortgage. I bought a home back in 2017. 679 00:32:23,800 --> 00:32:26,800 I paid a lot down to get the payment down and it's actually a 680 00:32:26,800 --> 00:32:29,200 lesser mortgage than his entire rent. 681 00:32:29,300 --> 00:32:31,200 Meant. So I feel bad for people having 682 00:32:31,200 --> 00:32:34,000 that much of their income eaten Away by rent payments. 683 00:32:34,000 --> 00:32:36,300 That's, that's crazy. It's been $100 a month on 684 00:32:36,300 --> 00:32:38,800 electricity. I spend like 30 dollars a month 685 00:32:38,800 --> 00:32:43,900 on Wi-Fi and another 34 cellular data and then food I spend like 686 00:32:43,900 --> 00:32:47,100 30 dollars a day. So that's $900 a month. 687 00:32:47,800 --> 00:32:53,400 And so that brings us to a total of what 2560 and also got like 688 00:32:53,400 --> 00:32:55,000 insurance and Hulu. So I'm gonna add another two 689 00:32:55,000 --> 00:32:56,100 hundred dollars just to be accurate. 690 00:32:56,100 --> 00:32:57,800 So two thousand, seven hundred sixty bucks. 691 00:32:59,400 --> 00:33:02,300 Dollars for a single person. It sounds like it's just him. 692 00:33:02,700 --> 00:33:04,600 It's a lot of money. I think that's normal. 693 00:33:04,600 --> 00:33:07,000 If you have, like, a family but that seems like a lot for just 694 00:33:07,000 --> 00:33:10,000 one person so every month. So that's a lot of money right 695 00:33:10,000 --> 00:33:11,400 now. I'm working 40 hours a week at 696 00:33:11,400 --> 00:33:13,500 this job and I'd get paid 1150 an hour. 697 00:33:13,500 --> 00:33:17,400 So that brings us to 460 dollars a week which is 800 a month. 698 00:33:17,900 --> 00:33:21,200 So even if I'm working 40 hours a week, I'm still going to be 699 00:33:21,200 --> 00:33:24,400 losing like nine hundred twenty dollars a month, yikes. 700 00:33:24,400 --> 00:33:26,800 So the first thing I'm going to do is stop spending $30 a day on 701 00:33:26,800 --> 00:33:29,600 food and cut that down to 10. And if I do that then, I'm only 702 00:33:29,600 --> 00:33:32,600 losing like 300 bucks a month. This is crazy to me. 703 00:33:32,700 --> 00:33:34,600 He's working 40 hours out of job. 704 00:33:34,600 --> 00:33:36,900 That doesn't even afford what he's currently paying in all of 705 00:33:36,900 --> 00:33:39,700 his expenses, he's cutting down on his food budget, which I 706 00:33:39,708 --> 00:33:42,900 think is good, but I think that housing cost is a lot. 707 00:33:42,900 --> 00:33:44,700 I'd be looking for anywhere cheaper to live. 708 00:33:44,700 --> 00:33:47,400 If I was him, cancel my mint Mobile Cellular, and I stopped 709 00:33:47,400 --> 00:33:48,900 using Netflix and Hulu and all that shit. 710 00:33:48,900 --> 00:33:51,300 I think I can get to the point where I can live just off of 711 00:33:51,308 --> 00:33:54,100 this job so I'm gonna do that. So that brings us to Net Zero 712 00:33:54,100 --> 00:33:55,800 but I'm still making forty dollars a day from crypto 713 00:33:55,800 --> 00:33:57,500 mining. So that's twelve hundred dollars 714 00:33:57,500 --> 00:34:00,500 a month so I'm gonna get another job. 30 hours a week, the pays 715 00:34:00,500 --> 00:34:03,900 at least $15 an hour and off that brings me up to 800 plus 716 00:34:03,900 --> 00:34:06,100 the 1200 from crypto mining. That breaks me up to three 717 00:34:06,100 --> 00:34:09,199 thousand dollars a month and I'm a doordash and shovel snow to so 718 00:34:09,199 --> 00:34:11,000 I'll probably be making about thirty five hundred dollars a 719 00:34:11,007 --> 00:34:14,600 month so he's working 40 hours per week at one job. 30 hours a 720 00:34:14,600 --> 00:34:17,699 week at another job and then doing doordash on top of that 721 00:34:17,699 --> 00:34:20,300 and shoveling snow. If that's true. 722 00:34:20,300 --> 00:34:23,199 I have to give him credit. That is that is hustling my take 723 00:34:23,199 --> 00:34:25,500 all that money invested. I think I can get at least 100 K 724 00:34:25,500 --> 00:34:28,100 by the end of 2020 3. Alright so he wants to save at 725 00:34:28,100 --> 00:34:31,800 least 100,000 Dollars by the end of 2020 3, which I think is 726 00:34:31,800 --> 00:34:33,900 something he could do. If you really does cut down on 727 00:34:33,908 --> 00:34:38,000 his expenses and works basically all day every day you can save 728 00:34:38,000 --> 00:34:40,300 up a hundred thousand dollars. I've seen people do that, I've 729 00:34:40,300 --> 00:34:42,900 seen people write on doordash forums, how they're, they're 730 00:34:42,900 --> 00:34:45,400 making an extra Thirty forty thousand dollars a year just on 731 00:34:45,400 --> 00:34:47,199 that side gig. So I think you could accomplish 732 00:34:47,199 --> 00:34:49,400 this, but how does he get to the million dollars? 733 00:34:49,400 --> 00:34:52,100 He says he wants to get that to a million dollars and I'll take 734 00:34:52,100 --> 00:34:54,400 that hundred K, invest into a stock that will 10x and then 735 00:34:54,400 --> 00:34:57,100 I'll Be A Millionaire boom easy. So that answers it. 736 00:34:57,200 --> 00:34:59,200 He's going to take the hundred thousand dollars. 737 00:34:59,300 --> 00:35:04,700 Worked all year for invest it in a stock that will 10x easy and 738 00:35:04,700 --> 00:35:07,700 then he's a millionaire. Just the simple 10x, which I 739 00:35:07,707 --> 00:35:10,300 think is the most simple step to any investment strategy. 740 00:35:10,600 --> 00:35:13,100 You save up the money. You work really hard for one 741 00:35:13,100 --> 00:35:15,800 year and then you just simply 10 exit, you get your million 742 00:35:15,800 --> 00:35:18,400 dollars and you're done, you've saved up enough for life. 743 00:35:18,400 --> 00:35:21,300 Now, I genuinely wish him the best and hope that he does find 744 00:35:21,300 --> 00:35:24,000 a stock that 10x is because of how much it work, how much 745 00:35:24,000 --> 00:35:27,400 actual work he's putting into this, but this just makes me so 746 00:35:27,400 --> 00:35:29,100 nervous to think of someone working. 747 00:35:29,300 --> 00:35:32,300 All year around the clock and then putting all of their 748 00:35:32,300 --> 00:35:36,300 savings into a single stock in of itself is extremely risky. 749 00:35:36,500 --> 00:35:39,400 The amount of concentration that has the amount of risk implied 750 00:35:39,400 --> 00:35:41,500 in it. Not something that I would do, I 751 00:35:41,500 --> 00:35:43,500 think there's a better path but best of luck. 752 00:35:43,500 --> 00:35:45,600 Hopefully, you find a good stock that's all for now. 753 00:35:45,600 --> 00:35:47,900 I hope you enjoyed the show. If you want to share your goals 754 00:35:47,900 --> 00:35:49,400 with me as well. Leave them in the comments 755 00:35:49,400 --> 00:35:51,000 below. I will read over them. 756 00:35:51,000 --> 00:35:52,800 Having said that, I'll see you in the next episode.