1 00:00:00,040 --> 00:00:02,280 Welcome back to the Joseph. Carlson show, we have a. 2 00:00:02,280 --> 00:00:04,040 Very full episode. Ahead of us. 3 00:00:04,240 --> 00:00:08,320 This is earnings week two. We're going to be doing a review 4 00:00:08,320 --> 00:00:10,200 of every company reporting earnings. 5 00:00:10,200 --> 00:00:12,080 At least the notable ones I'll be. 6 00:00:12,080 --> 00:00:14,200 Giving my thoughts on them what I think is going to. 7 00:00:14,200 --> 00:00:16,920 Happen and how I believe. These companies are positioned 8 00:00:17,360 --> 00:00:19,520 now. Week one was last week. 9 00:00:19,840 --> 00:00:21,520 And that one was exciting because we. 10 00:00:21,520 --> 00:00:24,050 Start off earnings. But really, we only had a. 11 00:00:24,050 --> 00:00:26,210 Couple. Really notable companies report 12 00:00:26,210 --> 00:00:28,410 earnings. Most of the attention was on 13 00:00:28,450 --> 00:00:30,730 Netflix and Tesla. Two very. 14 00:00:30,730 --> 00:00:33,250 Volatile stocks reporting earnings, So we got. 15 00:00:33,250 --> 00:00:36,290 Through that, but this week's. Different as you can see. 16 00:00:36,690 --> 00:00:38,810 There's a whole wall of. Companies, but there's a. 17 00:00:38,810 --> 00:00:41,770 Lot more that are notable. Big companies than last week. 18 00:00:42,010 --> 00:00:43,770 These are much. Bigger, more notable. 19 00:00:43,770 --> 00:00:46,050 Companies and as you can. See, I've gone through this. 20 00:00:46,050 --> 00:00:47,450 List. I've highlighted the ones that. 21 00:00:47,450 --> 00:00:49,770 I think are the most notable. Circle them in red. 22 00:00:50,270 --> 00:00:51,750 And those are the ones. That we're going to be. 23 00:00:51,750 --> 00:00:54,790 Reviewing in this video so. We have Domino's which just 24 00:00:54,790 --> 00:00:56,310 reported their earnings. I'll be giving my. 25 00:00:56,310 --> 00:00:58,190 Thoughts on that? Then tomorrow morning. 26 00:00:58,190 --> 00:01:02,070 We have Verizon this company. I have some thoughts on Verizon. 27 00:01:02,470 --> 00:01:06,590 I and AT&T for that matter. I don't have AT&T selected, but 28 00:01:06,590 --> 00:01:08,230 I'll be grouping. Verizon and AT&T. 29 00:01:08,230 --> 00:01:12,150 Together, but then we have. Spotify We have Microsoft. 30 00:01:12,230 --> 00:01:15,310 We have Google. We have Snapchat and Visa all on 31 00:01:15,310 --> 00:01:17,230 the same day. Tomorrow is going to be a. 32 00:01:17,230 --> 00:01:20,290 Very, very busy day. Spotify is facing a new. 33 00:01:20,290 --> 00:01:22,010 Competitor, I'll be talking about the new. 34 00:01:22,010 --> 00:01:24,650 Competitor Microsoft is one that. 35 00:01:25,130 --> 00:01:28,050 I have a huge. Holding in same with Google. 36 00:01:28,050 --> 00:01:29,970 Some very. Bullish on those companies and 37 00:01:29,970 --> 00:01:31,450 same with Visa. So I like. 38 00:01:31,450 --> 00:01:33,890 Three out of those four. Companies Snapchat? 39 00:01:34,130 --> 00:01:35,810 Not quite as much. But I'll be talking. 40 00:01:35,810 --> 00:01:38,970 About that company as well then we get into Wednesday which we. 41 00:01:39,010 --> 00:01:41,330 Also have highly anticipated earnings. 42 00:01:41,930 --> 00:01:45,130 You have Cocacola. And that's usually the same. 43 00:01:45,130 --> 00:01:47,560 Usually. Cocacola isn't too crazy. 44 00:01:47,680 --> 00:01:49,640 Then we have Union Pacific. That's a stock that I. 45 00:01:49,640 --> 00:01:50,960 Hold so I. Want to share some thoughts on 46 00:01:50,960 --> 00:01:52,280 that? Then we have. 47 00:01:52,280 --> 00:01:54,680 The most highly anticipated. Of the week in my. 48 00:01:54,680 --> 00:01:57,400 Opinion which is meta I think a lot of. 49 00:01:57,400 --> 00:01:59,480 Investors are looking forward. To how this one's doing. 50 00:01:59,560 --> 00:02:01,200 After that, we get into Chipotle. 51 00:02:01,200 --> 00:02:03,560 We'll get into McDonald's. We have some of those food 52 00:02:03,560 --> 00:02:05,240 stocks that I have some. Opinions on? 53 00:02:05,600 --> 00:02:07,520 I really. Like some of these companies. 54 00:02:07,920 --> 00:02:10,199 And then we get into. MasterCard Crocs. 55 00:02:10,360 --> 00:02:12,000 Two companies that I currently. Hold. 56 00:02:12,470 --> 00:02:16,670 And then after that Thursday evening, we have Intel and Roku. 57 00:02:16,830 --> 00:02:19,070 To close out the week. Those are the companies. 58 00:02:19,070 --> 00:02:21,070 That I'm going to be. Reviewing in this video. 59 00:02:21,150 --> 00:02:22,510 And we'll be going. Over all of it, the. 60 00:02:22,510 --> 00:02:24,710 Market position of. These companies the financials. 61 00:02:25,030 --> 00:02:27,030 And whether or not I. Believe they'll post strong 62 00:02:27,070 --> 00:02:29,350 earnings or weak earnings. So we have a. 63 00:02:29,350 --> 00:02:30,950 Ton to get. To in this episode. 64 00:02:31,390 --> 00:02:33,710 Go ahead and get yourself. Situated Grab a drink, because 65 00:02:33,710 --> 00:02:35,550 we're going to dive right in. Let's go ahead. 66 00:02:35,550 --> 00:02:38,190 And start off with. Domino's now Domino's just 67 00:02:38,190 --> 00:02:39,990 reported. Earnings a couple hours ago. 68 00:02:39,990 --> 00:02:43,830 And the results were mixed. They they beat on their. 69 00:02:43,830 --> 00:02:47,550 Earnings per share estimates. But they missed by 50 million on 70 00:02:47,550 --> 00:02:50,230 their revenue. So I'd call this a mixed result, 71 00:02:50,230 --> 00:02:52,190 but overall. When I'm looking at. 72 00:02:52,190 --> 00:02:54,470 Earnings even though a company. Can miss on one. 73 00:02:54,470 --> 00:02:55,830 Or beat on the other. I don't. 74 00:02:55,830 --> 00:02:57,230 Think that's the most important? Thing. 75 00:02:57,470 --> 00:02:59,230 Really when we're looking at earnings, what I'm. 76 00:02:59,230 --> 00:03:01,550 Trying to determine is. Whether or not the. 77 00:03:01,550 --> 00:03:04,230 Company overall is. Moving in the right direction. 78 00:03:04,480 --> 00:03:06,800 Whether it's growing. Its earnings per share growing, 79 00:03:06,800 --> 00:03:09,800 its free cash flow per share. Whether the Moat is widening. 80 00:03:09,800 --> 00:03:12,440 Whether they're opening up more locations I want to see. 81 00:03:12,440 --> 00:03:14,200 Overall the business. Growing. 82 00:03:14,440 --> 00:03:16,120 So I try to. Really look at this as. 83 00:03:16,160 --> 00:03:18,600 If I'm a business owner, not just someone. 84 00:03:18,600 --> 00:03:20,840 Looking at a couple numbers. I want to actually see. 85 00:03:20,920 --> 00:03:22,800 Overall how the business is doing. 86 00:03:23,240 --> 00:03:24,920 When I try to. Assess with this earnings 87 00:03:24,920 --> 00:03:26,440 report. How Domino's is doing? 88 00:03:27,100 --> 00:03:29,060 I think this. Company's really great I think. 89 00:03:29,060 --> 00:03:30,740 It's a great. Company and I do. 90 00:03:30,740 --> 00:03:33,020 Think it's doing well. I think it's going through some 91 00:03:33,020 --> 00:03:35,740 temporary. Struggles with overall growth 92 00:03:36,060 --> 00:03:37,660 simply. Because of a huge pull. 93 00:03:37,660 --> 00:03:40,300 Forward of demand, That it. Experienced a couple years ago. 94 00:03:40,460 --> 00:03:42,220 With everybody being locked in their home. 95 00:03:42,460 --> 00:03:44,380 Pizza was a. Little bit of a goto. 96 00:03:44,380 --> 00:03:46,340 Item. Is a bit like Netflix. 97 00:03:46,340 --> 00:03:49,180 Netflix had some pull. Forward during COVID Domino's 98 00:03:49,180 --> 00:03:50,100 had. The same thing. 99 00:03:50,100 --> 00:03:51,980 So they. Benefited a lot during that. 100 00:03:52,510 --> 00:03:54,910 And now trying to. Resume growth has been a. 101 00:03:54,910 --> 00:03:56,230 Struggle. It's a bit of a. 102 00:03:56,230 --> 00:03:59,350 Grind for Domino's, but I. Believe this company will. 103 00:03:59,350 --> 00:04:00,870 Do it. I think they're going to. 104 00:04:00,870 --> 00:04:02,670 Eventually surpass all time highs. 105 00:04:03,230 --> 00:04:04,910 I look. At Domino's here and they had. 106 00:04:05,270 --> 00:04:08,590 Growth and revenue of 5.8%. That's good. 107 00:04:08,830 --> 00:04:11,030 That's excluding FX, but that's that's. 108 00:04:11,030 --> 00:04:12,310 Decent growth. It's not bad. 109 00:04:12,870 --> 00:04:14,230 The. Problem is, we don't have. 110 00:04:14,230 --> 00:04:17,550 Much same store sales growth. You want to see. 111 00:04:17,829 --> 00:04:20,230 Stay same. Restaurant or same store sales? 112 00:04:20,230 --> 00:04:21,870 Growth. If you're buying something like. 113 00:04:22,440 --> 00:04:24,920 Like Home Depot? You want to see same? 114 00:04:24,920 --> 00:04:26,760 Store sales growth. If you're buying something like. 115 00:04:26,760 --> 00:04:28,760 Texas Roadhouse. Domino's. 116 00:04:28,840 --> 00:04:30,240 Chipotle. McDonald's. 117 00:04:30,480 --> 00:04:33,000 You want to see same? Restaurant sales growth. 118 00:04:33,320 --> 00:04:35,640 That means they're selling. More, at least in revenue. 119 00:04:35,640 --> 00:04:38,080 Every single year. At the same location. 120 00:04:38,600 --> 00:04:41,560 So with companies that are very. Consistent with this the same. 121 00:04:41,600 --> 00:04:44,360 Store sales growth. They do really well those. 122 00:04:44,360 --> 00:04:47,880 Are companies like Costco Domino's again is struggling? 123 00:04:47,880 --> 00:04:50,360 With this metric ever since 2020. 124 00:04:50,740 --> 00:04:52,220 They did so. Well, they had so much. 125 00:04:52,220 --> 00:04:54,260 Demand temporarily pulled forward. 126 00:04:54,620 --> 00:04:57,580 That now they're struggling against those comparators. 127 00:04:57,580 --> 00:05:00,940 So right now it's been a. Struggle, but I really I. 128 00:05:00,940 --> 00:05:02,500 Really think this company. Can pull through it. 129 00:05:02,820 --> 00:05:03,980 They're. Opening up a lot more. 130 00:05:03,980 --> 00:05:08,500 Locations every single quarter. The company had. 200 and. 53 131 00:05:08,500 --> 00:05:11,260 growth store. Openings and 56 closures during 132 00:05:11,260 --> 00:05:15,100 the second quarter. So they opened up 200 additional 133 00:05:15,100 --> 00:05:17,540 net locations this. Quarter, that's great. 134 00:05:18,060 --> 00:05:19,540 The company's growing now it doesn't look. 135 00:05:19,540 --> 00:05:21,300 Like the market? Is too concerned about this 136 00:05:21,300 --> 00:05:23,260 report either it's. Up 1.51. 137 00:05:23,260 --> 00:05:25,860 Percent I think that's an appropriate reaction. 138 00:05:25,860 --> 00:05:27,740 The one thing that. Really deters me from. 139 00:05:27,780 --> 00:05:29,620 Owning Domino's. And the reason that I. 140 00:05:29,620 --> 00:05:32,300 Really don't have a. Big stake in this company is 141 00:05:32,300 --> 00:05:34,140 because of the amount of debt. I just. 142 00:05:34,140 --> 00:05:35,420 Don't like how much? Debt. 143 00:05:35,620 --> 00:05:38,300 A lot of these franchise companies have Domino's in. 144 00:05:38,300 --> 00:05:43,340 Particular has around 5:00. Billion Dollars of debt 5. 145 00:05:43,340 --> 00:05:47,720 Billion for company. That last year did around 800 146 00:05:47,720 --> 00:05:49,920 million in EBITDA. So they're around. 147 00:05:49,920 --> 00:05:52,560 Five to six times. Debt to EBITDA? 148 00:05:52,560 --> 00:05:55,240 Which is a It's okay. They're not going to go. 149 00:05:55,240 --> 00:05:57,560 Bankrupt, but it's just a lot of debt and I'd. 150 00:05:57,560 --> 00:05:59,880 Rather, I'd rather. Focus on companies, in my 151 00:05:59,880 --> 00:06:01,080 opinion, that don't have as much. 152 00:06:01,080 --> 00:06:02,240 Debt. So that's one of the reasons 153 00:06:02,240 --> 00:06:05,200 that I've ruled Domino's out. But that's not a big. 154 00:06:05,200 --> 00:06:07,840 Concern for most investors? And I think Domino's is doing 155 00:06:07,840 --> 00:06:09,840 great. Now let's move on to companies 156 00:06:10,040 --> 00:06:12,640 that I'm not so bullish on here. We have one of them. 157 00:06:12,640 --> 00:06:15,760 Right here, which is Verizon. Verizon reports tomorrow morning 158 00:06:16,240 --> 00:06:18,440 and all group. In AT&T. 159 00:06:18,440 --> 00:06:22,000 Because my comments are. Basically the exact same. 160 00:06:22,040 --> 00:06:24,440 They apply equally to both. Companies, So let's go ahead. 161 00:06:24,440 --> 00:06:27,360 And bring them up here. We have Verizon hair and by the 162 00:06:27,360 --> 00:06:28,200 way, this. Software is called. 163 00:06:28,200 --> 00:06:29,920 Qualtrim. You can try it out with the 164 00:06:29,920 --> 00:06:33,240 Patreon, but we bring up. Verizon Hair and the company's. 165 00:06:33,240 --> 00:06:34,880 Up a little bit ahead. Of earnings. 166 00:06:35,920 --> 00:06:38,880 These companies Verizon. And AT&T? 167 00:06:39,480 --> 00:06:42,130 I believe are value traps. And I. 168 00:06:42,130 --> 00:06:43,370 Believe that they're value traps. 169 00:06:43,370 --> 00:06:44,650 For a long. Period of time. 170 00:06:45,130 --> 00:06:45,810 Now it's. Easy to. 171 00:06:45,810 --> 00:06:48,210 Say that their value trap. Now because they're doing 172 00:06:48,250 --> 00:06:50,210 really. Poorly, but I believe they. 173 00:06:50,210 --> 00:06:52,930 Have been value traps. Long before they're even doing. 174 00:06:52,930 --> 00:06:55,610 Poorly, as bad as they are. Now but both of. 175 00:06:55,610 --> 00:06:57,730 These companies have a lot. Of shared. 176 00:06:57,730 --> 00:07:00,050 Characteristics that I find incredibly. 177 00:07:00,090 --> 00:07:02,130 Unattractive and investments and the. 178 00:07:02,130 --> 00:07:03,770 Results show. Let's go ahead. 179 00:07:03,770 --> 00:07:04,530 And take a look. At the. 180 00:07:04,530 --> 00:07:06,530 Company's returns over the past. Decade. 181 00:07:06,970 --> 00:07:11,170 Verizon is down 32. Percent in the past 10 years. 182 00:07:11,740 --> 00:07:14,020 32%. It's in the red, even with 183 00:07:14,020 --> 00:07:16,180 dividends. Reinvested over the past 10 184 00:07:16,180 --> 00:07:18,100 years? That is incredible. 185 00:07:18,660 --> 00:07:21,020 It would be. It's it's difficult. 186 00:07:21,020 --> 00:07:24,260 In my opinion, to have. Zero returns for a. 10 year. 187 00:07:24,260 --> 00:07:26,340 Period during a bull market running a company. 188 00:07:26,340 --> 00:07:28,140 As big as this? It's like they had a. 189 00:07:28,140 --> 00:07:29,500 Work. On not having good. 190 00:07:29,500 --> 00:07:33,020 Returns, and the same thing with AT&T. 191 00:07:33,780 --> 00:07:35,940 This is a company. That attracts a lot of dividend 192 00:07:35,940 --> 00:07:37,580 investors. Because of the high yield. 193 00:07:37,860 --> 00:07:39,620 It's a company. That really offers a huge 194 00:07:39,620 --> 00:07:42,520 payout. But it's down nearly 44. 195 00:07:42,520 --> 00:07:46,760 Percent over the past decade. It's suckering investors into. 196 00:07:46,760 --> 00:07:49,480 Buying this company and then. Providing them with a. 197 00:07:49,480 --> 00:07:52,240 Lot of volatility. Income that doesn't make up. 198 00:07:52,360 --> 00:07:53,680 For the total return. Loss. 199 00:07:54,040 --> 00:07:55,880 Even with dividends reinvested, you're still. 200 00:07:55,880 --> 00:07:58,200 In the red over a. 10 year period and the. 201 00:07:58,200 --> 00:08:00,200 Returns don't look good even further out. 202 00:08:00,200 --> 00:08:02,080 If you go back. 15 years or 20? Years. 203 00:08:02,080 --> 00:08:04,320 It doesn't look good either. So neither of these companies. 204 00:08:04,320 --> 00:08:06,280 Are giving good results. And I don't believe that's. 205 00:08:06,280 --> 00:08:08,600 Happened chance. My thoughts on why these? 206 00:08:08,600 --> 00:08:11,600 Companies are not giving good. Returns is because they're bad 207 00:08:11,600 --> 00:08:13,160 companies. Simply put. 208 00:08:13,160 --> 00:08:14,960 They don't have attractive characteristics. 209 00:08:14,960 --> 00:08:16,600 In an investment they have. An. 210 00:08:16,600 --> 00:08:19,400 Incredible. Incredible amount of leverage. 211 00:08:19,640 --> 00:08:23,560 We look at the amount of debt. That this company holds a. 128 212 00:08:23,560 --> 00:08:25,760 billion. That's more than the market. 213 00:08:25,760 --> 00:08:27,920 Cap of most companies that exist in the. 214 00:08:27,920 --> 00:08:30,320 World, They're so. Indebted. 215 00:08:30,360 --> 00:08:32,640 And when you go into an indebted company, you have to deal. 216 00:08:32,640 --> 00:08:35,470 With interest rates going up. You have to deal with. 217 00:08:35,630 --> 00:08:37,669 Debt schedules and payment dates. 218 00:08:37,830 --> 00:08:39,710 You have to deal with. High interest payments. 219 00:08:39,909 --> 00:08:41,590 It eats into the. Earnings of the stock. 220 00:08:41,990 --> 00:08:44,150 AT&T has. A ton of debt, Verizon. 221 00:08:44,150 --> 00:08:47,710 Has a ton of debt. Verizon has 100, I believe 100. 222 00:08:47,710 --> 00:08:51,670 And 30. $6 billion of. Longterm debt Astronomical 223 00:08:51,670 --> 00:08:52,390 amounts of. Debt. 224 00:08:52,870 --> 00:08:55,350 And these companies will never. Get this debt paid off. 225 00:08:55,350 --> 00:08:57,110 It's just. Never going to happen. 226 00:08:57,510 --> 00:08:58,910 So I look. At both of these companies. 227 00:08:59,030 --> 00:09:00,430 They're completely riddled with debt. 228 00:09:00,860 --> 00:09:02,820 And they also. Don't have high returns on. 229 00:09:02,820 --> 00:09:05,260 Capital employed, they're not capital efficient. 230 00:09:05,500 --> 00:09:07,860 They don't have ample growth opportunity they don't have. 231 00:09:07,860 --> 00:09:10,460 Pricing power they don't have. Anything. 232 00:09:10,460 --> 00:09:12,100 Except for maybe a significant. Mode. 233 00:09:12,100 --> 00:09:14,380 But within that mode, they don't have great economics. 234 00:09:14,580 --> 00:09:16,140 So both of these. Companies have very 235 00:09:16,220 --> 00:09:19,380 unattractive. Characteristics all around and. 236 00:09:19,380 --> 00:09:21,060 You can look at the earnings and they might. 237 00:09:21,060 --> 00:09:23,860 Beat They might miss but. Again, that's not the. 238 00:09:23,860 --> 00:09:26,820 Point we should be looking at. It doesn't mean the investments. 239 00:09:26,820 --> 00:09:28,540 Great if they beat their. Earnings. 240 00:09:28,870 --> 00:09:30,430 We should. Be looking at the direction 241 00:09:30,430 --> 00:09:32,150 over. All the companies are going. 242 00:09:32,390 --> 00:09:33,670 And. Neither of these companies 243 00:09:33,710 --> 00:09:36,470 Verizon and AT&T. Neither of them are going 244 00:09:36,550 --> 00:09:40,150 anywhere fast, so in my opinion. I think it's a mistake. 245 00:09:40,150 --> 00:09:42,230 For investors to continually. Try to buy the. 246 00:09:42,230 --> 00:09:44,270 Dip in these companies when there's so many. 247 00:09:44,270 --> 00:09:46,910 Better options? Now another company that's 248 00:09:46,910 --> 00:09:47,790 quite. Different that's. 249 00:09:47,790 --> 00:09:49,670 Reporting Earnings Tuesday Morning. 250 00:09:50,110 --> 00:09:52,950 Is Spotify this is? One that I really. 251 00:09:52,950 --> 00:09:54,230 Like the company? I really. 252 00:09:54,230 --> 00:09:56,870 Like I like a lot. Of things about Spotify. 253 00:09:57,200 --> 00:09:59,960 I like the app. I like the user interface, I 254 00:09:59,960 --> 00:10:02,200 like the algorithms. I like that it's a founder LED 255 00:10:02,200 --> 00:10:04,480 CEO. I do believe that Spotify has 256 00:10:04,480 --> 00:10:05,360 pricing. Power. 257 00:10:05,360 --> 00:10:08,040 They're just raising prices. Again, they're competing with a 258 00:10:08,040 --> 00:10:09,680 big tech and. Doing a really good job. 259 00:10:09,680 --> 00:10:12,480 At it, having said that. Spotify is now. 260 00:10:12,480 --> 00:10:16,320 Facing a brand new competitor. That, I believe, will be a very. 261 00:10:16,320 --> 00:10:19,000 Big competitor. Now if I was sitting. 262 00:10:19,000 --> 00:10:22,440 In Spotify's executive boardrooms and. 263 00:10:22,980 --> 00:10:25,220 Doing discussions on competitive threats. 264 00:10:25,220 --> 00:10:27,820 And trying. To to think of what? 265 00:10:27,820 --> 00:10:29,940 Do I think is the? Worst thing that could happen. 266 00:10:29,940 --> 00:10:31,100 What do? I think is the biggest. 267 00:10:31,100 --> 00:10:32,700 Competitive threat we could face. 268 00:10:33,420 --> 00:10:35,300 TikTok would probably. Be the top thing. 269 00:10:35,420 --> 00:10:37,700 That's probably the biggest single threat. 270 00:10:37,940 --> 00:10:39,700 That I could face in terms of competition. 271 00:10:40,140 --> 00:10:41,980 Because what other? Company has more of a. 272 00:10:41,980 --> 00:10:44,500 Plug. Into younger generation and 273 00:10:44,500 --> 00:10:46,060 music. TikTok. 274 00:10:46,100 --> 00:10:48,180 Really. Controls this industry. 275 00:10:48,340 --> 00:10:50,940 They're the ones that make. Viral hits in music. 276 00:10:51,340 --> 00:10:54,020 If a TikTok goes. Viral on TikTok. 277 00:10:54,300 --> 00:10:56,300 The song. Associated with that TikTok. 278 00:10:56,460 --> 00:10:59,660 Will be trending on, it'll be trending on Spotify. 279 00:11:00,100 --> 00:11:03,540 So this is what I. Think is a really not. 280 00:11:03,540 --> 00:11:05,460 A good. Evolution for Spotify? 281 00:11:05,460 --> 00:11:07,060 I don't. View this as a positive. 282 00:11:07,060 --> 00:11:10,020 Thing at all Tik Tok's launching this new music app. 283 00:11:10,260 --> 00:11:12,020 They're styling it very similar to. 284 00:11:12,020 --> 00:11:14,900 Spotify with a nice album art. The easy. 285 00:11:15,340 --> 00:11:17,140 Interface, right? Very simplistic. 286 00:11:17,340 --> 00:11:19,740 Something that I think a. Lot of younger, younger 287 00:11:19,740 --> 00:11:23,100 generation will really enjoy. Using and combining that right. 288 00:11:23,100 --> 00:11:25,700 In the Tik. T.O.K ecosystem combined with 289 00:11:25,700 --> 00:11:27,100 their. Already huge. 290 00:11:27,100 --> 00:11:30,540 Platform, I think it's just. Another thorn in the. 291 00:11:30,540 --> 00:11:32,980 Side of Spotify. I think it's another problem. 292 00:11:32,980 --> 00:11:36,220 For this company to face. Another big competitor that will 293 00:11:36,220 --> 00:11:38,360 take market share. I believe TikTok. 294 00:11:38,360 --> 00:11:40,560 Will grow to. Millions and millions of users. 295 00:11:40,560 --> 00:11:43,040 In their TikTok music, so Spotify. 296 00:11:43,040 --> 00:11:45,920 Is down over 5%. Today, that is because of. 297 00:11:45,920 --> 00:11:49,080 This news of Tik Tok's Music app and that happens this. 298 00:11:49,080 --> 00:11:51,360 Company's down 5% when the rest of the. 299 00:11:51,360 --> 00:11:53,760 Market is in the green. You can see it refreshing. 300 00:11:53,760 --> 00:11:57,640 There the markets in the green. Spotify is in the red, and I 301 00:11:57,640 --> 00:11:59,360 agree. With this sell off I. 302 00:11:59,360 --> 00:12:01,080 Think that this. Is not a threat. 303 00:12:01,320 --> 00:12:03,160 It's not a threat to be taken lightly. 304 00:12:03,680 --> 00:12:05,600 Now the other issue. I have with Spotify. 305 00:12:06,200 --> 00:12:07,800 Is. Spotify is over a decade. 306 00:12:07,840 --> 00:12:11,440 Old and still not fully. Profitable on a free cash. 307 00:12:11,440 --> 00:12:14,840 Flow stock based comp adjusted basis and if. 308 00:12:14,840 --> 00:12:17,000 A company is not. Profitable after over a. 309 00:12:17,000 --> 00:12:19,200 Decade, in fact over 15. Years. 310 00:12:19,720 --> 00:12:21,680 What are the odds of this? Year them becoming. 311 00:12:21,680 --> 00:12:24,320 Profitable or next year? What is the evidence? 312 00:12:24,320 --> 00:12:26,960 You have when it takes. That long to become profitable. 313 00:12:27,320 --> 00:12:30,000 They have nearly half a billion. Users on their platform. 314 00:12:30,320 --> 00:12:32,080 Why can't they generate a? Profit. 315 00:12:32,550 --> 00:12:35,950 And if they can't generate? A real sizable profit with. 316 00:12:35,990 --> 00:12:40,430 Over 400 million users, What point do they need? 317 00:12:40,430 --> 00:12:42,870 Where do they need to? Get It's a very difficult. 318 00:12:42,870 --> 00:12:44,310 Thing to say that they're going to become. 319 00:12:44,310 --> 00:12:46,870 Profitable at a certain. Time because of how this 320 00:12:46,870 --> 00:12:48,910 business is constructed, they have. 321 00:12:48,910 --> 00:12:52,190 Lower margins. Because the the the people. 322 00:12:52,190 --> 00:12:53,870 That own the. Rights to the music. 323 00:12:54,030 --> 00:12:55,070 All the. Labels. 324 00:12:55,070 --> 00:12:56,030 They're the ones that. Really. 325 00:12:56,030 --> 00:12:58,120 Take the economics. So even though. 326 00:12:58,120 --> 00:13:00,040 Spotify is creating all the. Value the. 327 00:13:00,080 --> 00:13:02,280 Algorithms. The advertising, The promotion. 328 00:13:02,600 --> 00:13:05,000 It's the labels that accrue all the value. 329 00:13:05,400 --> 00:13:07,720 And that's a bad relationship. I think it's unfair. 330 00:13:07,720 --> 00:13:10,360 To Spotify, but that's. Just the way it is. 331 00:13:10,640 --> 00:13:12,960 So as long as that continues on as long as. 332 00:13:12,960 --> 00:13:15,200 Spotify. Continues to just grow in. 333 00:13:15,200 --> 00:13:16,600 Users, but never really has great. 334 00:13:16,600 --> 00:13:19,280 Economics I'm going to remain. On the sidelines. 335 00:13:19,280 --> 00:13:21,720 It's my thoughts on Spotify. I think the company's still. 336 00:13:21,720 --> 00:13:23,480 Growing it's growing daily active. 337 00:13:23,480 --> 00:13:27,070 Users, it'll grow its podcast. It'll grow its revenue, but. 338 00:13:27,070 --> 00:13:29,270 Revenue growth without great economics. 339 00:13:29,430 --> 00:13:32,310 Doesn't really amount to much. And that's the big question mark 340 00:13:32,310 --> 00:13:33,750 there. So what I'll be looking? 341 00:13:33,750 --> 00:13:35,990 For with. Spotify is are the actual. 342 00:13:35,990 --> 00:13:38,830 Economics improving. Now let's go. 343 00:13:38,830 --> 00:13:40,430 Ahead and move. On to the big ones. 344 00:13:40,430 --> 00:13:43,430 Here we have. Microsoft and Google reporting 345 00:13:43,470 --> 00:13:45,870 earnings. Tuesday after market close. 346 00:13:45,990 --> 00:13:47,590 Now I'm going. To make a prediction here. 347 00:13:47,590 --> 00:13:49,630 And I can't. Guarantee if this is correct. 348 00:13:49,630 --> 00:13:51,750 So I wouldn't. Bet on this, but this would be 349 00:13:51,750 --> 00:13:52,710 my. Prediction. 350 00:13:53,180 --> 00:13:55,780 If I was forced to. Try to guess the outcome here. 351 00:13:56,220 --> 00:13:59,180 I believe that Microsoft. I believe it will beat. 352 00:13:59,260 --> 00:14:02,140 On its earnings per share. And I believe it will beat on 353 00:14:02,140 --> 00:14:04,180 its revenue top and bottom line beat. 354 00:14:04,660 --> 00:14:05,940 And. I believe the company will. 355 00:14:05,940 --> 00:14:08,660 Sell off ever so slightly. I think it that's going to be 356 00:14:08,660 --> 00:14:09,140 the. Outcome. 357 00:14:09,140 --> 00:14:11,460 If I had a guess. Now the reason I say that is 358 00:14:11,460 --> 00:14:12,820 because Microsoft. Has a. 359 00:14:12,980 --> 00:14:15,780 Strong history of rarely missing. 360 00:14:15,780 --> 00:14:18,220 Their earnings per share and rarely missing their revenue 361 00:14:18,220 --> 00:14:19,940 estimates. They typically beat them. 362 00:14:20,220 --> 00:14:21,980 So they beat the analysts estimates. 363 00:14:22,390 --> 00:14:24,110 But in this situation, Microsoft. 364 00:14:24,110 --> 00:14:25,630 Has had such a. Good run if we look. 365 00:14:25,630 --> 00:14:28,590 At how the stock is traded, it's up. 43%. 366 00:14:28,590 --> 00:14:30,550 Year to date in the. Past one year, it's. 367 00:14:30,550 --> 00:14:33,270 Up 33%. We've had a really. 368 00:14:33,310 --> 00:14:35,390 Miraculous recovery with this company. 369 00:14:35,630 --> 00:14:38,030 Huge Bull. Run with this company. 370 00:14:38,510 --> 00:14:40,910 And now the. Stock is trading at valuations. 371 00:14:40,910 --> 00:14:43,790 That are, they're quite. High the valuations and 372 00:14:43,790 --> 00:14:45,910 expectations. Are higher than most companies. 373 00:14:46,230 --> 00:14:48,270 In fact, Microsoft. Is one of the companies. 374 00:14:48,270 --> 00:14:50,070 In the market. That, I believe has. 375 00:14:50,530 --> 00:14:53,570 The highest. Expectations of investors A20. 376 00:14:53,570 --> 00:14:56,410 74 P/E ratio. A 2% free cash. 377 00:14:56,410 --> 00:14:58,130 Flow yield. These are very high. 378 00:14:58,130 --> 00:15:00,850 Expectations even for Microsoft. So I could. 379 00:15:00,850 --> 00:15:02,850 See this company. Beating on its earnings per 380 00:15:02,850 --> 00:15:05,730 share, Beating on its revenue. But if any. 381 00:15:05,730 --> 00:15:07,530 Little weakness happens if there's. 382 00:15:07,610 --> 00:15:08,850 Any part. Of the report. 383 00:15:08,850 --> 00:15:10,290 That's weak. If. 384 00:15:10,290 --> 00:15:14,370 The cloud is growing slightly slower than expectations then 385 00:15:14,370 --> 00:15:15,530 the stock. Could trade down? 386 00:15:15,530 --> 00:15:18,290 3 or 4%? I could see that outcome. 387 00:15:18,290 --> 00:15:20,450 Easily now in terms of what investors are going to be 388 00:15:20,450 --> 00:15:23,210 focused on with Microsoft. I think the big one is going to 389 00:15:23,210 --> 00:15:23,770 be. Cloud. 390 00:15:24,050 --> 00:15:27,290 That is the new Microsoft. The thing generating, growing 391 00:15:27,290 --> 00:15:29,250 free. Cash flows is the cloud. 392 00:15:29,250 --> 00:15:31,050 Business that's integrated into the rest of the. 393 00:15:31,050 --> 00:15:32,770 Company SO. That's going to be the. 394 00:15:32,770 --> 00:15:34,970 Biggest focus is what did Azure do? 395 00:15:34,970 --> 00:15:37,210 What did the cloud? Part of the business do. 396 00:15:37,650 --> 00:15:39,410 There's going to be. Some questions about the 397 00:15:39,410 --> 00:15:41,170 acquisition. There's going to be questions. 398 00:15:41,170 --> 00:15:43,490 About the other. Businesses about the gaming 399 00:15:43,490 --> 00:15:45,840 division. But I still believe the cloud 400 00:15:45,840 --> 00:15:47,720 will be the. Biggest thing investors focus 401 00:15:47,720 --> 00:15:49,200 on? So another thing that could. 402 00:15:49,200 --> 00:15:52,320 Send Microsoft stock down. Is if cloud. 403 00:15:52,560 --> 00:15:55,080 Underperforms. I don't believe that will 404 00:15:55,080 --> 00:15:56,440 happen. I think cloud is going. 405 00:15:56,440 --> 00:15:58,600 To come in strong. And I do think that if. 406 00:15:58,600 --> 00:16:00,840 Cloud comes in. Very strong or above 407 00:16:00,840 --> 00:16:02,640 expectations. The stock will go. 408 00:16:02,640 --> 00:16:06,450 Further high so. Overall I am bullish on 409 00:16:06,450 --> 00:16:07,770 Microsoft. Even with these high 410 00:16:07,770 --> 00:16:08,970 expectations. I think. 411 00:16:08,970 --> 00:16:10,090 The earnings will be. Fine. 412 00:16:10,090 --> 00:16:12,090 I think they'll be. Passable, but I'm aware. 413 00:16:12,090 --> 00:16:14,890 There's a really good chance that even with good earnings, 414 00:16:15,090 --> 00:16:17,530 Microsoft could have a. Little bit of a Netflix. 415 00:16:17,530 --> 00:16:21,050 Or Tesla situation because? It's recently done, so well now 416 00:16:21,050 --> 00:16:23,690 of course after Microsoft. We have Google on other. 417 00:16:23,690 --> 00:16:25,450 Highly anticipated big tech earnings. 418 00:16:25,690 --> 00:16:28,690 Google's a major holding. In My Portfolio, a company that 419 00:16:28,690 --> 00:16:31,370 I'm bullish on, I love the. Properties of this company. 420 00:16:31,890 --> 00:16:33,930 Now it trades at a much. Lower valuation than. 421 00:16:33,930 --> 00:16:36,570 Microsoft, we have a 17. .84 P/E. 422 00:16:36,570 --> 00:16:40,570 Ratio and a 4%. Free cash flow yield but. 423 00:16:40,570 --> 00:16:43,330 This company does face challenges it faces. 424 00:16:43,330 --> 00:16:44,850 Challenges that Microsoft doesn't. 425 00:16:45,130 --> 00:16:47,850 One of them is that it has a. Much higher percentage of its 426 00:16:47,850 --> 00:16:50,290 cash flows. Going to stock based comp and 427 00:16:50,290 --> 00:16:52,450 investors. Especially activist investors 428 00:16:52,450 --> 00:16:54,850 like Chris. Hohn have wrote into Google and 429 00:16:54,850 --> 00:16:56,970 said. That you're basically not 430 00:16:57,090 --> 00:16:58,370 managing. Your costs well. 431 00:16:58,570 --> 00:17:00,050 You're paying developers too much. 432 00:17:00,370 --> 00:17:02,330 You have way too much stock based comp impact. 433 00:17:02,570 --> 00:17:05,490 You need to cut cost. So one thing that investors. 434 00:17:05,490 --> 00:17:07,730 Are going to be looking. At is if this company is 435 00:17:07,730 --> 00:17:10,130 effectively. Cutting costs and growing their. 436 00:17:10,130 --> 00:17:13,530 Revenue more than their expenses, that's going to be a 437 00:17:13,530 --> 00:17:14,970 big. Thing is the margins of the 438 00:17:14,970 --> 00:17:17,569 company and if they're cutting. Costs the other thing of. 439 00:17:17,569 --> 00:17:19,369 Course is the free. Cash flow of the company. 440 00:17:19,770 --> 00:17:21,890 It's been a little bit flat for the last. 441 00:17:22,290 --> 00:17:24,930 Couple of years and that's. Again, a lot of the. 442 00:17:24,930 --> 00:17:27,050 Pull for it from COVID. You can see the huge. 443 00:17:27,050 --> 00:17:29,040 Spike up here. They need to resume. 444 00:17:29,040 --> 00:17:31,760 Growth from that point. So we'll be looking at the core 445 00:17:31,760 --> 00:17:33,240 businesses, we'll be looking at the. 446 00:17:33,240 --> 00:17:35,840 Growth and free cash flow. The other storyline and. 447 00:17:35,840 --> 00:17:36,880 Narratives of Google is going to. 448 00:17:36,880 --> 00:17:41,080 Be a lot of a I. Questions ChatGPT barred all the 449 00:17:41,080 --> 00:17:42,160 new. A I stuff that they're. 450 00:17:42,160 --> 00:17:43,960 Creating. I think all that stuff is. 451 00:17:43,960 --> 00:17:47,680 Exciting, but for me I. Still believe the core? 452 00:17:47,680 --> 00:17:51,440 Drivers of this company overall. Is going to be controlling. 453 00:17:51,440 --> 00:17:54,800 Expenses and having discipline to control the stock based comp 454 00:17:55,000 --> 00:17:56,680 so it. Doesn't rise up and eat. 455 00:17:56,680 --> 00:18:00,360 Half the free cash flows and then continuing to grow the core 456 00:18:00,360 --> 00:18:02,040 businesses. Growing Google Search. 457 00:18:02,040 --> 00:18:03,920 Growing YouTube. Growing Google Cloud. 458 00:18:03,960 --> 00:18:06,000 The way that I believe. Google could outperform current 459 00:18:06,000 --> 00:18:07,880 investors. Expectations is by cutting. 460 00:18:07,880 --> 00:18:11,440 Expenses more than expected. And by having Google cloud. 461 00:18:11,720 --> 00:18:14,160 Lose. Less money than expected if. 462 00:18:14,160 --> 00:18:16,880 Google Cloud comes in with better economics than expected. 463 00:18:17,200 --> 00:18:19,480 I think that this stock is going to go much higher. 464 00:18:20,000 --> 00:18:21,480 Google's in a. Situation I really like. 465 00:18:21,600 --> 00:18:24,600 I like the set up for earnings. I like the valuation. 466 00:18:24,760 --> 00:18:26,600 I feel completely fine going into it. 467 00:18:27,120 --> 00:18:29,440 I'll be shocked. If it has a major sell off, 468 00:18:29,440 --> 00:18:31,080 something will. Have to go really wrong. 469 00:18:31,080 --> 00:18:32,280 For this. Company to have a sell. 470 00:18:32,280 --> 00:18:33,760 Off. So right now I'm very. 471 00:18:33,760 --> 00:18:35,600 Positive on the direction of Google. 472 00:18:36,080 --> 00:18:38,680 Next up we have Snapchat. This company I have. 473 00:18:38,680 --> 00:18:40,360 Not liked for a long. Period of time. 474 00:18:40,920 --> 00:18:42,680 I don't, generally speaking, like. 475 00:18:42,680 --> 00:18:45,400 Social media companies as investments that much to begin 476 00:18:45,400 --> 00:18:47,080 with. Snapchat's a company. 477 00:18:47,280 --> 00:18:49,880 That over the history of. It it really hasn't given. 478 00:18:49,960 --> 00:18:53,320 Any returns, we're. Looking since 2017. 479 00:18:53,320 --> 00:18:56,880 And it's down 48%. And while this has happened. 480 00:18:56,880 --> 00:18:58,320 While the stock. Is down nearly. 481 00:18:58,320 --> 00:19:01,520 Half and the retail investor has been burned in the. 482 00:19:01,520 --> 00:19:04,160 Stock all the. Executives all the C. 483 00:19:04,160 --> 00:19:06,240 EO's have had. Major paydays with stock. 484 00:19:06,280 --> 00:19:10,160 They've given themselves massive compensation packages as this 485 00:19:10,160 --> 00:19:11,450 has happened. That's not a. 486 00:19:11,450 --> 00:19:14,010 Relationship I like. I like the relationship where. 487 00:19:14,250 --> 00:19:16,810 It's like Buffett. Where the executives and the. 488 00:19:16,850 --> 00:19:19,250 Owners of the company get paid with the rest of the. 489 00:19:19,250 --> 00:19:21,810 Investors in the company. So this isn't a company? 490 00:19:21,810 --> 00:19:23,450 That I like how it's been managed. 491 00:19:23,530 --> 00:19:24,730 I don't like. How it's been treating 492 00:19:24,730 --> 00:19:27,210 investors. And I think it's deceiving. 493 00:19:27,210 --> 00:19:30,330 The way that they've done this by having incredible amounts of 494 00:19:30,330 --> 00:19:32,810 stock based comp. Eating into the free cash of the 495 00:19:32,810 --> 00:19:35,010 company and they. Try to act like that's not an 496 00:19:35,010 --> 00:19:37,210 expense. So we look at this company. 497 00:19:37,910 --> 00:19:39,310 We look at the cash. Flows we compare. 498 00:19:39,310 --> 00:19:41,430 It to the stock based comp and it continually. 499 00:19:41,430 --> 00:19:44,270 Dilutes. Now, that's not to say things. 500 00:19:44,270 --> 00:19:47,110 Can't turn around, I believe. Snapchat. 501 00:19:47,350 --> 00:19:50,710 For once, is actually. Headed in the right direction, I 502 00:19:50,710 --> 00:19:53,150 think that they're going to actually try to make free. 503 00:19:53,150 --> 00:19:56,150 Cash flows that exceed. The amount of stock based comp. 504 00:19:56,510 --> 00:19:58,790 You can see this happening. Over the past couple of. 505 00:19:58,790 --> 00:20:01,070 Quarters, the management has indicated. 506 00:20:01,070 --> 00:20:03,150 That they're trying to become truly profitable. 507 00:20:03,670 --> 00:20:06,990 So maybe I'll get surprised. Maybe things will actually go. 508 00:20:06,990 --> 00:20:09,750 Well, for Snapchat. I'm open to that surprise. 509 00:20:10,190 --> 00:20:13,030 But as of right now, for me, this is a company that I'm not. 510 00:20:13,030 --> 00:20:15,230 Bullish on I, I. Think it's in a void. 511 00:20:15,310 --> 00:20:17,470 I think there's much better. Companies in the market. 512 00:20:17,590 --> 00:20:20,910 Now after Snapchat. We have Visa a company. 513 00:20:20,910 --> 00:20:22,470 I really, really. Love. 514 00:20:22,710 --> 00:20:26,110 I don't own Visa, but I do own. MasterCard in my opinion. 515 00:20:26,110 --> 00:20:28,070 It's a flip of. A coin of which one you want to 516 00:20:28,070 --> 00:20:29,750 own. They're both great, and they're 517 00:20:29,750 --> 00:20:31,510 both. Duopoly in the credit card 518 00:20:31,510 --> 00:20:34,140 processing. So Visa and MasterCard I. 519 00:20:34,140 --> 00:20:36,100 Believe are just amazing companies. 520 00:20:36,300 --> 00:20:37,660 I think so many. Investors are. 521 00:20:37,660 --> 00:20:40,940 Missing out on these companies because they view them as. 522 00:20:41,660 --> 00:20:44,300 Boring, outdated companies that don't. 523 00:20:44,300 --> 00:20:45,580 Offer a lot. Instead of. 524 00:20:45,580 --> 00:20:48,140 Exciting tech companies in reality. 525 00:20:48,180 --> 00:20:51,220 MasterCard and Visa are. Both digital tech. 526 00:20:51,220 --> 00:20:53,020 Companies transferring huge amounts of. 527 00:20:53,020 --> 00:20:54,820 Data with massive network effects. 528 00:20:55,020 --> 00:20:58,060 MasterCard in particular has a lot of actual. 529 00:20:58,660 --> 00:21:01,620 They have a lot of tech. Stuff they sell Security, 530 00:21:01,620 --> 00:21:03,700 identification. Lots of different things. 531 00:21:03,700 --> 00:21:05,620 They sell to companies. So these are both. 532 00:21:05,620 --> 00:21:07,660 Exciting tech. Companies reporting earnings 533 00:21:07,660 --> 00:21:09,380 this week. And I believe the earnings are 534 00:21:09,380 --> 00:21:11,580 going to be great if. I had to give a guess for both. 535 00:21:11,580 --> 00:21:13,340 Of these companies I. Think they're going to have 536 00:21:13,340 --> 00:21:17,020 strong earnings results? Good revenue, good free cash 537 00:21:17,020 --> 00:21:18,700 flow. I think everything will be on 538 00:21:18,700 --> 00:21:20,420 point. I'll be shocked. 539 00:21:20,420 --> 00:21:22,180 If these companies post horrible. 540 00:21:22,180 --> 00:21:23,660 Earnings. When I look at the. 541 00:21:23,660 --> 00:21:26,580 Consistency. Of Visa and MasterCard. 542 00:21:27,240 --> 00:21:29,360 There's nothing else like it. There's companies that are 543 00:21:29,360 --> 00:21:31,160 consistent and then there's Visa and. 544 00:21:31,160 --> 00:21:33,440 MasterCard look at the free cash flow. 545 00:21:33,440 --> 00:21:36,320 Growth of this company? Isn't that just phenomenal? 546 00:21:36,560 --> 00:21:38,960 It's like a 40. Five degree angle for over a 547 00:21:38,960 --> 00:21:41,480 decade. There's some ebbs and flows. 548 00:21:41,600 --> 00:21:43,280 Year over year. That's how free cash flow. 549 00:21:43,280 --> 00:21:45,360 Works. But overall we have incredible 550 00:21:45,360 --> 00:21:47,640 growth and then. Adjusted for stock based. 551 00:21:47,640 --> 00:21:50,880 Comp on a per share. Basis it's even faster. 552 00:21:51,080 --> 00:21:53,280 Growing at 18. Percent over the past five 553 00:21:53,280 --> 00:21:55,410 years. The growth rates of these 554 00:21:55,410 --> 00:21:57,610 companies. Free cash flow is. 555 00:21:57,690 --> 00:22:00,170 Incredible. MasterCard is the exact. 556 00:22:00,170 --> 00:22:03,130 Same I look at Mastercards. Free cash flow growth. 557 00:22:03,130 --> 00:22:05,170 And it makes me want to own more of this company. 558 00:22:05,770 --> 00:22:08,690 So when I look at these stocks, I see companies that have. 559 00:22:08,690 --> 00:22:11,890 Incredibly good fundamentals. Huge network effects, Wide 560 00:22:11,890 --> 00:22:13,210 moats. They they have. 561 00:22:13,210 --> 00:22:17,770 Very limited competition, this. Isn't like Spotify the faces? 562 00:22:17,770 --> 00:22:22,690 Apple Music and YouTube Music and TikTok Music and a million 563 00:22:22,690 --> 00:22:23,530 Other. Competitors. 564 00:22:24,050 --> 00:22:26,930 MasterCard and Visa are very. Insulated in the. 565 00:22:26,930 --> 00:22:29,690 Business that they run. So they have a limited amount of 566 00:22:29,690 --> 00:22:33,090 competition, great economics. I think they're going to post. 567 00:22:33,090 --> 00:22:35,330 Very strong earnings now after. Visa. 568 00:22:35,330 --> 00:22:37,090 We move on to Wednesday. Morning. 569 00:22:37,090 --> 00:22:39,330 And we have Union Pacific. Reporting earnings. 570 00:22:39,570 --> 00:22:41,610 This is one of the. Companies that I currently own. 571 00:22:42,090 --> 00:22:44,930 It's not exciting, there's. Nothing exciting about Union 572 00:22:44,930 --> 00:22:46,330 Pacific. It is a boring. 573 00:22:46,330 --> 00:22:48,770 Company that does the same. Thing, day in and day. 574 00:22:48,770 --> 00:22:51,210 Out as. Very little disruption and very. 575 00:22:51,210 --> 00:22:54,090 Little news overall. And those are the type of 576 00:22:54,090 --> 00:22:56,810 companies I love. Ones where they just start 577 00:22:56,810 --> 00:22:58,650 business. As usual, making. 578 00:22:58,650 --> 00:23:00,490 Money day in and day out that go to my. 579 00:23:00,490 --> 00:23:02,610 Pockets, now the. Thing that I really. 580 00:23:02,610 --> 00:23:05,770 Like in particular about the. Earnings set up for Union? 581 00:23:05,770 --> 00:23:09,050 Pacific is that. There's not a lot priced into 582 00:23:09,050 --> 00:23:10,330 the stock. It has. 583 00:23:10,330 --> 00:23:13,290 Pretty subdued expectations, in fact. 584 00:23:13,290 --> 00:23:15,090 When I look at the. Multiples of this company. 585 00:23:15,490 --> 00:23:17,250 It's trading out of 17. Ford P. 586 00:23:17,250 --> 00:23:19,850 E That's not crazy. It's trading out of free. 587 00:23:19,850 --> 00:23:22,810 Cash flow yield of four. Percent that's not crazy either. 588 00:23:23,270 --> 00:23:25,150 This is pretty. Low. 589 00:23:25,150 --> 00:23:27,430 Expectations for this company Which? 590 00:23:27,430 --> 00:23:30,750 Means that the company. Just needs to report OK earnings 591 00:23:30,750 --> 00:23:33,270 and it should be fine and it. Has a lot of wiggle. 592 00:23:33,270 --> 00:23:34,550 Room. There's a lot. 593 00:23:34,550 --> 00:23:37,030 Of wiggle room for. Upside surprises in the 594 00:23:37,030 --> 00:23:38,590 earnings. So I like the. 595 00:23:38,590 --> 00:23:42,150 Setup of Union Pacific. I think it's less risky than 596 00:23:42,150 --> 00:23:44,870 companies with higher. Expectations, if you consider 597 00:23:44,870 --> 00:23:46,590 the. Expectations that Microsoft has. 598 00:23:46,990 --> 00:23:51,450 Very high expectations. Or Visa or MasterCard or. 599 00:23:51,450 --> 00:23:53,250 Meta. It's had a huge run up. 600 00:23:53,250 --> 00:23:55,730 So it has higher expectations. Chipotle. 601 00:23:55,850 --> 00:23:59,050 The same thing as well, a lot. Of these companies the market. 602 00:23:59,050 --> 00:24:02,410 Has raised up this year. A lot of these companies have. 603 00:24:02,410 --> 00:24:04,930 Very high expectations. But if you look at. 604 00:24:05,210 --> 00:24:08,810 Union Pacific year to date. It's only up 5%. 605 00:24:09,210 --> 00:24:11,730 So it's really trail. Behind the rest of the market. 606 00:24:12,240 --> 00:24:14,120 And that typically? Means that there's just. 607 00:24:14,120 --> 00:24:16,480 Not as much priced into it. So if I had to give a guess. 608 00:24:16,480 --> 00:24:18,080 Here I think. That Union Pacific's earnings 609 00:24:18,080 --> 00:24:20,000 will be right in line and I think there's a chance that will 610 00:24:20,000 --> 00:24:21,400 trade up after. Earnings Now let's. 611 00:24:21,400 --> 00:24:23,280 Move on from Union Pacific. And we're going to talk. 612 00:24:23,280 --> 00:24:25,640 About meta for a minute. This company I believe. 613 00:24:25,640 --> 00:24:28,200 Has the most anticipated. Earnings of the week. 614 00:24:28,680 --> 00:24:30,720 Meta is a company that. So far. 615 00:24:30,720 --> 00:24:33,240 Over the past couple of. Years it's been a heavily. 616 00:24:33,240 --> 00:24:35,480 Narrative driven company meaning. 617 00:24:35,840 --> 00:24:38,360 That what the CEO? Mark Zuckerberg talks about. 618 00:24:38,600 --> 00:24:42,480 What the company's focus is and. How he creates the narrative has 619 00:24:42,480 --> 00:24:45,320 really moved the. Stock when Mark Zuckerberg. 620 00:24:45,520 --> 00:24:50,040 A couple years ago started. Yapping about the Metaverse and. 621 00:24:50,040 --> 00:24:52,040 Saying that, he's going to focus a ton of. 622 00:24:52,480 --> 00:24:54,840 Energy a ton of. Effort all this time. 623 00:24:55,120 --> 00:24:57,280 And a ton of. Capital in the metaverse 624 00:24:57,680 --> 00:24:59,360 investors. Did not like that. 625 00:24:59,640 --> 00:25:02,160 Because the Roc. E The Return on Capital 626 00:25:02,160 --> 00:25:04,760 Employed. Of the metaverse is unknowable. 627 00:25:05,000 --> 00:25:07,380 And likely very low. Some investors. 628 00:25:07,380 --> 00:25:08,860 Bailed out of the. Company when he said. 629 00:25:08,860 --> 00:25:10,900 That that was his. Primary focus and the north. 630 00:25:10,900 --> 00:25:15,460 Star, but then Mark Zuckerberg. Got wise, he decided to pivot. 631 00:25:15,500 --> 00:25:18,140 He said that. We're going to shift over to 632 00:25:18,140 --> 00:25:20,540 having the year of efficiency when we had. 633 00:25:20,540 --> 00:25:23,060 The Year of Efficiency start right here. 634 00:25:23,340 --> 00:25:25,580 All of a sudden. Investors were like Okay. 635 00:25:25,580 --> 00:25:27,980 My opinion has changed, Mark. Zuckerberg is now. 636 00:25:28,180 --> 00:25:31,140 Being sensible, he's focusing on costs and things that drive 637 00:25:31,460 --> 00:25:33,620 actual growth in the company's economics. 638 00:25:33,990 --> 00:25:36,590 So the stock zooms back up. So this is largely been. 639 00:25:36,590 --> 00:25:38,830 Narrative driven meta is no. Longer talking about the 640 00:25:38,830 --> 00:25:39,950 Metaverse. Now. 641 00:25:39,950 --> 00:25:41,870 Mark Zuckerberg is focused on. A I. 642 00:25:41,870 --> 00:25:44,590 Focused on their core. Businesses focused on building. 643 00:25:44,590 --> 00:25:46,910 Properties like threads. That compete with Twitter. 644 00:25:47,190 --> 00:25:49,910 They're focusing on the things that they're best at, not these 645 00:25:49,910 --> 00:25:52,030 unknowable. Projects with unknowable 646 00:25:52,030 --> 00:25:54,790 returns. So as long as Mark Zuckerberg 647 00:25:55,150 --> 00:25:57,590 continues on. Talking about these things. 648 00:25:58,120 --> 00:26:00,800 Focusing on that as well as driving incremental. 649 00:26:00,800 --> 00:26:03,640 Growth and revenue and free. Cash flow, I think that meta is 650 00:26:03,640 --> 00:26:04,840 going. To continue to have good. 651 00:26:04,840 --> 00:26:08,480 Results this earnings. I believe Meta will do fine. 652 00:26:08,640 --> 00:26:10,640 I don't have any. Reason to believe the earnings. 653 00:26:10,640 --> 00:26:12,400 Results will be. Bad, but I will. 654 00:26:12,400 --> 00:26:14,680 Say, I think it's a. Little bit more of a risky 1. 655 00:26:15,200 --> 00:26:17,160 Just because of the massive. Run up it's. 656 00:26:17,160 --> 00:26:21,560 Had anytime a company's up. 135% year to date and. 657 00:26:21,880 --> 00:26:25,190 It's basically a straight line. I think there's a chance. 658 00:26:25,190 --> 00:26:27,030 You get a. 5 to 10% sell. Off. 659 00:26:27,230 --> 00:26:28,910 That's just the risk you. Take with a company. 660 00:26:28,910 --> 00:26:31,350 That's run up that quickly. Now moving on, we have. 661 00:26:31,350 --> 00:26:33,310 Chipotle reporting earnings Wednesday. 662 00:26:33,310 --> 00:26:34,310 After market. Close. 663 00:26:34,830 --> 00:26:37,590 This is a company I really. Really like I've been. 664 00:26:37,590 --> 00:26:39,870 Talking about this company. For years I've been following it 665 00:26:39,870 --> 00:26:40,990 for a long. Time period. 666 00:26:41,230 --> 00:26:42,870 I've become convinced that Chipotle. 667 00:26:42,870 --> 00:26:45,190 Is a true compounder A compounding machine? 668 00:26:45,630 --> 00:26:47,070 It has an investment. Thesis. 669 00:26:47,070 --> 00:26:48,910 That's very simple. They create a. 670 00:26:48,910 --> 00:26:50,590 Box. The box has. 671 00:26:50,830 --> 00:26:52,890 Food in it. They have a way of distributing 672 00:26:52,890 --> 00:26:54,730 the food. Creating the food, processing 673 00:26:54,730 --> 00:26:57,610 the food and marketing the food, that's very efficient. 674 00:26:57,610 --> 00:26:59,650 And makes a lot of. Money and then the great thing 675 00:26:59,650 --> 00:27:01,050 about the Chipotle business model. 676 00:27:01,050 --> 00:27:03,050 Like these fast casual restaurants? 677 00:27:03,250 --> 00:27:05,610 Is they can take that? Box they can replicate it, they 678 00:27:05,610 --> 00:27:08,210 can replicate it again, they can replicate it again, and then 679 00:27:08,210 --> 00:27:09,930 they can measure the returns that they're getting on. 680 00:27:10,050 --> 00:27:13,530 Each new restaurant and. Once they get that down, they. 681 00:27:13,530 --> 00:27:16,530 Can just repeat the strategy and grow it all across. 682 00:27:16,530 --> 00:27:19,170 The globe This is exactly what Starbucks did. 683 00:27:19,590 --> 00:27:22,230 Starbucks. Has 33,000 locations. 684 00:27:22,470 --> 00:27:25,670 Chipotle only has 3000. Locations Chipotle. 685 00:27:25,670 --> 00:27:28,510 Has had such good success. They have such good unit. 686 00:27:28,510 --> 00:27:31,550 Economics, they have such good execution that I believe. 687 00:27:31,550 --> 00:27:33,950 This company is going to. Replicate their strategy. 688 00:27:34,430 --> 00:27:36,670 Over and over again. Growing to double. 689 00:27:36,670 --> 00:27:39,470 And four times the size. So Chipotle is a. 690 00:27:39,470 --> 00:27:41,190 Company I. Really love the business. 691 00:27:41,190 --> 00:27:43,230 Model I. Really like the situation. 692 00:27:43,230 --> 00:27:45,550 Of the stock. I like the future growth outlook 693 00:27:45,550 --> 00:27:47,750 of it the big. Question is the valuation. 694 00:27:47,750 --> 00:27:50,750 On the company. With earnings reports, it's not. 695 00:27:50,750 --> 00:27:52,550 Just about whether or. Not they beat or miss. 696 00:27:52,550 --> 00:27:53,350 It's whether. Or not. 697 00:27:53,350 --> 00:27:55,470 They have. Incredibly high expectations in 698 00:27:55,470 --> 00:27:56,630 this stock. And. 699 00:27:56,630 --> 00:27:59,510 This company has high expectations. 700 00:27:59,830 --> 00:28:01,830 We look at this. The P/E ratio. 701 00:28:01,830 --> 00:28:04,910 Right now is 35 and the free cash. 702 00:28:04,910 --> 00:28:07,790 Flow yields 1.7. So the company appears. 703 00:28:07,790 --> 00:28:09,790 Expensive based on the multiples. 704 00:28:09,910 --> 00:28:12,390 We have a high P/E. Ratio A low free cash. 705 00:28:12,390 --> 00:28:14,220 Flow yield. And that's something that. 706 00:28:14,220 --> 00:28:14,860 Investors. A lot. 707 00:28:14,860 --> 00:28:16,300 Of times don't like we like to get. 708 00:28:16,300 --> 00:28:18,660 Deals, so we don't want to buy. Companies like Chipotle that 709 00:28:18,660 --> 00:28:20,180 are. Growing fast but have high. 710 00:28:20,180 --> 00:28:21,940 Expectations. My guess is. 711 00:28:21,940 --> 00:28:23,420 Chipotle will have good. Earnings. 712 00:28:23,700 --> 00:28:26,860 That's my prediction. I think that Domino's had. 713 00:28:26,860 --> 00:28:28,620 OK, earnings. I think there's a. 714 00:28:28,620 --> 00:28:30,580 Chance that Chipotle could slightly. 715 00:28:30,580 --> 00:28:32,860 Miss on the top or bottom? Line, but they're. 716 00:28:32,860 --> 00:28:35,180 Opening up new locations. They're going to be growing 717 00:28:35,180 --> 00:28:38,020 earnings very quickly, my. Guess is that. 718 00:28:38,020 --> 00:28:40,020 They're going to be on the top and bottom line. 719 00:28:40,340 --> 00:28:42,820 And have very good. Growth, very good margins. 720 00:28:43,190 --> 00:28:44,830 I think this company's executing. 721 00:28:44,950 --> 00:28:47,030 On all fronts. So I'm very bullish on. 722 00:28:47,030 --> 00:28:48,790 Chipotle I really like. The company. 723 00:28:49,790 --> 00:28:55,630 Next up we have McDonald's. Now, like Chipotle, I'm bullish 724 00:28:55,630 --> 00:28:58,150 on McDonald's. As well, I still believe. 725 00:28:58,310 --> 00:29:00,710 That all these companies. All the fast. 726 00:29:00,710 --> 00:29:02,950 Food highly optimized companies have. 727 00:29:02,950 --> 00:29:05,390 So many things going for it. I've said this. 728 00:29:05,390 --> 00:29:08,030 For a while, I think. These companies are basically. 729 00:29:08,030 --> 00:29:10,830 Advanced vending machines for convenient. 730 00:29:10,830 --> 00:29:13,920 Access to hot meals. So you look at McDonald's and 731 00:29:13,920 --> 00:29:15,480 it's the same thing. It's just a box. 732 00:29:15,480 --> 00:29:16,960 You go to you. Get a hot meal. 733 00:29:17,080 --> 00:29:19,000 It's very consistent and with. People. 734 00:29:19,000 --> 00:29:21,960 Value and convenience more than. Ever, I continue to believe. 735 00:29:21,960 --> 00:29:24,400 That there's a lot of. Growth runway with same. 736 00:29:24,400 --> 00:29:26,760 Store sales from McDonald's. In the future. 737 00:29:27,480 --> 00:29:29,440 So I think. McDonald's, like Chipotle, will 738 00:29:29,440 --> 00:29:31,480 again have good. Earnings, I don't see any. 739 00:29:31,480 --> 00:29:33,400 Reason it's going to have. Really terrible earnings. 740 00:29:33,750 --> 00:29:35,070 It offers great. Value it's very. 741 00:29:35,070 --> 00:29:36,670 Consistent. I think they have. 742 00:29:36,670 --> 00:29:39,390 Great execution and. I believe that people right now 743 00:29:39,390 --> 00:29:41,430 have enough money to. Afford these services. 744 00:29:41,470 --> 00:29:44,030 Now Next up we have. Crocs, this is a great. 745 00:29:44,030 --> 00:29:47,990 Company the shoe company really trendy shoes right now they. 746 00:29:47,990 --> 00:29:50,230 Also own Hey Dude. And a lot of people. 747 00:29:50,230 --> 00:29:52,830 Don't realize that the company's named after their name brand. 748 00:29:52,830 --> 00:29:53,910 Crocs. But they do. 749 00:29:53,910 --> 00:29:55,630 Own Hey Dude as well, which is a. 750 00:29:55,630 --> 00:30:00,150 Very fast growing, really comfy shoes, so I think they own 2. 751 00:30:00,150 --> 00:30:01,070 Great. Brands. 752 00:30:01,070 --> 00:30:03,070 I think the company has a lot of brand value. 753 00:30:03,640 --> 00:30:05,440 I do think that Crocs isn't as much of A. 754 00:30:05,440 --> 00:30:07,840 Meme, as people believe. And I have. 755 00:30:07,840 --> 00:30:10,360 Made money on this company. I invested $1000 into. 756 00:30:10,360 --> 00:30:14,280 It it quickly went up. 80% I sold out most of my. 757 00:30:14,280 --> 00:30:17,120 Holdings. So I made eight. $100 on $1000 758 00:30:17,120 --> 00:30:19,160 investment. So Crocs has been a great 759 00:30:19,160 --> 00:30:21,440 investment for me. I really like the company. 760 00:30:22,120 --> 00:30:24,440 If I was to give. A hesitation on this company. 761 00:30:25,000 --> 00:30:28,960 My big hesitation is simply. How it's traded the company. 762 00:30:28,960 --> 00:30:31,960 Traded up like crazy. During the peak of. 763 00:30:32,350 --> 00:30:35,230 Meaning and Tik. T.O.K and the COVID. 764 00:30:35,230 --> 00:30:38,030 Boom, 2021. And then it had a huge. 765 00:30:38,030 --> 00:30:39,790 Falloff way. Too much of A sell? 766 00:30:39,790 --> 00:30:43,230 Off during this time period I became interested in the company 767 00:30:43,630 --> 00:30:45,750 and I was looking at what the insiders of the. 768 00:30:45,750 --> 00:30:48,110 Company were doing. All the insiders. 769 00:30:48,190 --> 00:30:51,350 Literally almost all of them. Were buying up as many shares. 770 00:30:51,350 --> 00:30:53,390 As they could. Spending millions of dollars. 771 00:30:53,390 --> 00:30:56,190 On buying their own stock. Now, when insiders are doing 772 00:30:56,190 --> 00:30:57,670 that, they're buying their own stock. 773 00:30:57,670 --> 00:30:58,790 They're not. Cashing out. 774 00:30:59,240 --> 00:31:01,200 That is a hugely. Positive sign. 775 00:31:01,360 --> 00:31:03,240 That they are very. Bullish on the company? 776 00:31:03,680 --> 00:31:05,320 And of. Course, they knew best they knew 777 00:31:05,320 --> 00:31:06,840 that things were. Going well with the company, 778 00:31:06,880 --> 00:31:09,600 they know it better. Than anybody the company raced. 779 00:31:09,600 --> 00:31:12,480 Up in stock price. The sales were great, it. 780 00:31:12,480 --> 00:31:15,760 Wasn't just a passing trend, Crocs is around to stay. 781 00:31:15,760 --> 00:31:17,960 So for me currently I think the company's trading at a more 782 00:31:17,960 --> 00:31:19,960 reasonable. Valuation and I don't expect. 783 00:31:19,960 --> 00:31:22,040 Quite as much. Outperformance from here on out. 784 00:31:22,040 --> 00:31:24,120 So looking at Crocs. Today I do believe this. 785 00:31:24,120 --> 00:31:26,240 Is one that has more. Unpredictable earnings. 786 00:31:26,630 --> 00:31:28,590 I can't guess what. Direction it's going to go and 787 00:31:28,590 --> 00:31:29,550 that's. Part of the reason I. 788 00:31:29,550 --> 00:31:32,750 Really have a hard time putting a ton of money into this 789 00:31:32,750 --> 00:31:36,070 company. It's just too unpredictable I 790 00:31:36,070 --> 00:31:37,670 really feel. Confident in companies like 791 00:31:37,670 --> 00:31:39,470 Microsoft. And Visa and MasterCard. 792 00:31:39,750 --> 00:31:41,990 I don't have the same. Degree of confidence in Crocs. 793 00:31:42,190 --> 00:31:45,270 So this earnings report. It's going to be a mystery. 794 00:31:45,390 --> 00:31:47,390 It'll be a surprise. Hopefully it's good. 795 00:31:47,590 --> 00:31:49,750 Next up we have Intel reporting earnings. 796 00:31:50,120 --> 00:31:51,880 This is a company. That I've been bearish on for a 797 00:31:51,880 --> 00:31:53,480 while. I haven't liked Intel. 798 00:31:53,480 --> 00:31:56,520 I think it's an incredibly. Complex company, huge CapEx. 799 00:31:56,520 --> 00:31:58,720 Expenses. Tons of intense competition. 800 00:31:59,000 --> 00:32:02,400 Not a lot of pricing power. It's just in an unfavorable. 801 00:32:02,400 --> 00:32:05,840 Situation as a company. Having said that, the stock. 802 00:32:05,840 --> 00:32:08,560 Price has been hit. Over the past five years, it's 803 00:32:08,560 --> 00:32:10,440 come down. Dramatically and the C. 804 00:32:10,440 --> 00:32:12,920 EO right now is. Determined to make a comeback. 805 00:32:12,920 --> 00:32:14,890 With this one. So even though it's. 806 00:32:14,890 --> 00:32:17,530 Down right now. I wouldn't count Intel out. 807 00:32:17,730 --> 00:32:18,570 I do. Think there's? 808 00:32:18,570 --> 00:32:21,690 Room for a recovery? They could get their cash. 809 00:32:21,690 --> 00:32:25,170 Flows moving in the right direction again, so this. 810 00:32:25,170 --> 00:32:28,850 Is one that I'm still. To this day, telling investors 811 00:32:28,850 --> 00:32:31,610 it's not one I would invest in, it's not one that I would buy. 812 00:32:31,770 --> 00:32:34,610 It doesn't fit My Portfolio or my investment thesis. 813 00:32:34,930 --> 00:32:37,250 I don't like recovery. Plays I don't like. 814 00:32:37,250 --> 00:32:38,690 Companies with weak fundamentals. 815 00:32:38,690 --> 00:32:41,490 That I'm hoping and crossing my fingers that they turn around. 816 00:32:41,920 --> 00:32:43,360 If a company shows it has a weak. 817 00:32:43,400 --> 00:32:45,560 Fundamentals. It's getting invaded by 818 00:32:45,560 --> 00:32:48,080 competition. It doesn't have pricing power, 819 00:32:48,240 --> 00:32:50,360 has a lot of debt. It has a lot of CapEx. 820 00:32:50,600 --> 00:32:52,960 Those are companies that I. I sell out of. 821 00:32:53,280 --> 00:32:55,440 I wish them well. And then I put my money in 822 00:32:55,440 --> 00:32:56,800 companies. Where things are. 823 00:32:56,800 --> 00:32:59,560 Moving in the right direction. So Intel for me is. 824 00:32:59,560 --> 00:33:01,480 Still in that situation where I'm. 825 00:33:01,480 --> 00:33:04,320 Not betting on it. But in terms of this week's 826 00:33:04,320 --> 00:33:05,120 earnings. Report. 827 00:33:05,890 --> 00:33:07,610 I think it could beat expectations. 828 00:33:07,610 --> 00:33:10,370 It already has priced very low expectations. 829 00:33:10,530 --> 00:33:11,490 Now the last one. We're looking. 830 00:33:11,490 --> 00:33:14,690 At This week is Roku. Roku's an interesting company. 831 00:33:14,730 --> 00:33:18,010 This is one of those Trojan. Horse companies, that's really 832 00:33:18,010 --> 00:33:18,450 what. It is. 833 00:33:18,450 --> 00:33:20,810 It's a Trojan horse. Roku's a company. 834 00:33:21,130 --> 00:33:22,810 That they. Try to sell their TV. 835 00:33:22,810 --> 00:33:26,130 'S the Roku TV's for As cheap as possible. 836 00:33:26,410 --> 00:33:27,930 Just to get them. Into your house. 837 00:33:28,210 --> 00:33:30,090 And then when they get. The TV in your house. 838 00:33:30,250 --> 00:33:32,610 For basically break. Even they're not even making. 839 00:33:32,610 --> 00:33:35,010 Money on selling you the TV. Or the Roku device. 840 00:33:35,300 --> 00:33:37,340 That's why they're like $10 or $20. 841 00:33:37,660 --> 00:33:40,140 When they get them. In your house, then they 842 00:33:40,140 --> 00:33:41,900 monetize. You through advertising on the. 843 00:33:41,900 --> 00:33:44,620 Roku home screen. Then they monetize you through. 844 00:33:44,620 --> 00:33:46,860 Getting you into the. Ecosystem of using the apps on 845 00:33:46,860 --> 00:33:48,900 the Roku system. And advertising. 846 00:33:48,900 --> 00:33:52,060 You on the Roku system? So that's the Trojan. 847 00:33:52,060 --> 00:33:54,700 Horse play of this company. Sell device hardware for 848 00:33:54,700 --> 00:33:56,540 extremely cheap. Just try to break. 849 00:33:56,540 --> 00:33:58,300 Even on it. Get it into as many. 850 00:33:58,300 --> 00:34:00,700 Households as possible. And then make money on. 851 00:34:00,700 --> 00:34:03,140 The software. I think they're executing their. 852 00:34:03,140 --> 00:34:05,990 Strategy Well. But there is. 853 00:34:05,990 --> 00:34:08,110 Competition. Even within the strategy they're 854 00:34:08,110 --> 00:34:10,590 competing with Apple, they're. Competing with Amazon doing the 855 00:34:10,590 --> 00:34:11,949 same thing with. The Fire TV. 856 00:34:12,190 --> 00:34:15,510 So they do face. Fierce competition and I 857 00:34:15,750 --> 00:34:17,190 overall. I think the company is. 858 00:34:17,190 --> 00:34:19,550 Okay, I think Roku. Is an okay bet. 859 00:34:19,750 --> 00:34:21,230 If someone owned this. Company. 860 00:34:21,230 --> 00:34:24,429 I wouldn't think they're crazy. The company right now is at. 861 00:34:24,429 --> 00:34:26,830 Too immature of a stage. For me to invest in. 862 00:34:27,070 --> 00:34:28,550 When I look at the financials of it. 863 00:34:28,790 --> 00:34:30,350 And I see the free cash flows negative. 864 00:34:30,350 --> 00:34:33,620 For multiple quarters. I'd be having to guess when is 865 00:34:33,620 --> 00:34:35,020 this. Company actually going to make 866 00:34:35,020 --> 00:34:37,420 money and for me. That's a little bit. 867 00:34:37,420 --> 00:34:39,820 Difficult to say, right? Now they're going for. 868 00:34:39,820 --> 00:34:41,340 Scale. They're going for size. 869 00:34:41,340 --> 00:34:43,540 They're still. Trying to grow but for. $10 870 00:34:43,540 --> 00:34:45,300 billion for company, that's still. 871 00:34:45,300 --> 00:34:47,219 Free cash flow negative. Is just. 872 00:34:47,219 --> 00:34:49,300 Not a mature enough. State So. 873 00:34:49,300 --> 00:34:53,340 Roku right now I think is, I think it's a fine strategy, I 874 00:34:53,340 --> 00:34:55,100 think a fine. Investment now in terms of. 875 00:34:55,100 --> 00:34:57,060 This week's earnings report. I do believe it will be a 876 00:34:57,060 --> 00:34:58,100 strong. One from Roku. 877 00:34:58,140 --> 00:35:00,280 That would be my guess. No guarantees. 878 00:35:00,280 --> 00:35:02,800 I can't see the future. But Netflix reported their. 879 00:35:02,800 --> 00:35:04,440 Earnings and they gained. Subscribers. 880 00:35:04,440 --> 00:35:07,480 They had great engagement. They're a big streaming service. 881 00:35:07,480 --> 00:35:10,000 That's often used on Roku. And if Netflix? 882 00:35:10,000 --> 00:35:11,800 And all the streaming services are doing really. 883 00:35:11,800 --> 00:35:13,800 Well, Roku should be doing, really. 884 00:35:13,800 --> 00:35:16,120 Well, so. So Roku should do well. 885 00:35:16,120 --> 00:35:18,320 So that wraps up my. Predictions for the week. 886 00:35:18,440 --> 00:35:21,360 And if you want to see analysis after these companies report 887 00:35:21,360 --> 00:35:22,920 earnings, make sure you subscribe to the. 888 00:35:22,920 --> 00:35:24,920 Channel with the bill notification. 889 00:35:25,240 --> 00:35:26,720 That's all for now. See you in the next one. 890 00:35:27,090 --> 00:35:31,770 I don't know what's going on.