1 00:00:00,040 --> 00:00:02,160 Welcome back everyone today on the Joseph Carlson Show. 2 00:00:02,280 --> 00:00:04,960 Now, it's true that last week we had a lot of companies report 3 00:00:04,960 --> 00:00:06,480 earnings that are massive companies. 4 00:00:06,680 --> 00:00:08,680 We've already heard from companies like Netflix and 5 00:00:08,680 --> 00:00:12,240 Google and Amazon and Microsoft, many of the biggest companies in 6 00:00:12,240 --> 00:00:14,920 the world. But this week we still have a 7 00:00:14,920 --> 00:00:17,760 lot of important companies reporting earnings, including 8 00:00:17,760 --> 00:00:20,960 Palantir today. Is it true that Palantir is the 9 00:00:20,960 --> 00:00:24,640 most overvalued company of all time that's ever existed all 10 00:00:24,640 --> 00:00:27,280 throughout humanity? Or is there more to Palantir? 11 00:00:27,280 --> 00:00:29,440 We'll be looking at that one. It's reporting earnings. 12 00:00:29,760 --> 00:00:32,560 Aftermarket closed today and then throughout the rest of the 13 00:00:32,560 --> 00:00:35,040 week, we have more and more companies reporting earnings, 14 00:00:35,280 --> 00:00:40,880 including Uber and AMD and Spotify and Shopify and DoorDash 15 00:00:40,880 --> 00:00:45,400 and FICO and Texas Roadhouse and even Duolingo, one of the most 16 00:00:45,400 --> 00:00:47,480 viral investments I've ever made. 17 00:00:47,800 --> 00:00:51,200 Duolingo's all anybody wants to talk about, but I'll be telling 18 00:00:51,200 --> 00:00:53,800 you what's really going to be happening with Duolingo's 19 00:00:53,800 --> 00:00:56,000 earnings this week. Now, outside of the earnings 20 00:00:56,000 --> 00:00:58,720 reports coming up this week, we also have big news that Tom Lee 21 00:00:58,720 --> 00:01:01,200 went on to CNBC. He reiterated that he believes 22 00:01:01,200 --> 00:01:04,560 the market's going to continue upwards this week aggressively. 23 00:01:04,760 --> 00:01:06,880 He believes the bull market will continue. 24 00:01:07,240 --> 00:01:10,360 We also have news that Amazon, one of my largest positions, 25 00:01:10,840 --> 00:01:13,560 they announced the big deal, the Open AI deal. 26 00:01:13,560 --> 00:01:16,040 And then finally we have the fail of the week, which in this 27 00:01:16,040 --> 00:01:19,040 case is the leader of Open AI, Sam Altman. 28 00:01:19,360 --> 00:01:22,840 In an interview, one of his biggest investors, one of his 29 00:01:22,840 --> 00:01:25,600 biggest advocates and cheerleaders, Brad Gerstner, 30 00:01:25,960 --> 00:01:30,160 asked a very simple, benign question, simply just asked how 31 00:01:30,440 --> 00:01:33,240 open AI can fulfill on some of its obligations. 32 00:01:33,280 --> 00:01:36,800 And Sam Altman reacted sharply and defensively, rebuking him 33 00:01:36,800 --> 00:01:38,840 and challenging him to short the stock. 34 00:01:39,000 --> 00:01:41,160 We'll be going over this reaction, looking at the video 35 00:01:41,200 --> 00:01:42,560 and why it's the fail of the week. 36 00:01:42,560 --> 00:01:44,720 So we have a ton to get to, a lot to go through in this 37 00:01:44,720 --> 00:01:46,800 episode. And we kick things off today by 38 00:01:46,800 --> 00:01:48,880 looking at the earnings calendar. 39 00:01:49,280 --> 00:01:51,440 Now, if you haven't already, you can try out Qualtrm. 40 00:01:51,440 --> 00:01:53,360 You can sign up directly on qualtrm.com. 41 00:01:53,720 --> 00:01:56,080 And part of this, you get an earnings calendar that shows you 42 00:01:56,080 --> 00:01:59,400 Monday through Friday before market open, after market close. 43 00:01:59,400 --> 00:02:01,560 You can actually filter it by your watch list. 44 00:02:01,560 --> 00:02:05,000 For example, I can say companies that are my top considerations, 45 00:02:05,040 --> 00:02:06,320 these are the ones that I'm looking at. 46 00:02:06,680 --> 00:02:09,919 Or I can say companies that I currently own, these are the 47 00:02:09,919 --> 00:02:12,960 ones that I'm looking at, right? There's lots of controls on this 48 00:02:12,960 --> 00:02:15,600 and it tells you a lot of information about the stock. 49 00:02:15,960 --> 00:02:17,880 In this case, we're going to be looking at Palantir. 50 00:02:18,240 --> 00:02:21,240 Palantir is the first major company of interest to report 51 00:02:21,240 --> 00:02:22,920 this week and it's reporting today. 52 00:02:23,360 --> 00:02:26,480 When I look at Palantir, there are two different stories going 53 00:02:26,480 --> 00:02:28,920 on with Palantir. One of the stories is that this 54 00:02:28,920 --> 00:02:31,520 company is just amazing. It it really is. 55 00:02:31,520 --> 00:02:34,240 You don't see a lot of companies with the revenue line looking 56 00:02:34,240 --> 00:02:36,760 like this on 1/4 to quarter basis. 57 00:02:36,800 --> 00:02:41,280 It seems strong acceleration over the past year and it was 58 00:02:41,280 --> 00:02:44,120 already growing quickly. So when you have a company 59 00:02:44,120 --> 00:02:46,520 already growing really fast and then it starts to accelerate 60 00:02:46,520 --> 00:02:49,840 faster where it's the fastest growing company in the S&P 500 61 00:02:49,840 --> 00:02:53,600 by this revenue size, that's notable and that's why investors 62 00:02:53,600 --> 00:02:56,920 are in on this company. The revenue growth is absolutely 63 00:02:56,920 --> 00:03:00,160 insane and it's driven by strong volume of customers. 64 00:03:00,160 --> 00:03:04,280 You have the US customer count going from 161 to 485. 65 00:03:04,640 --> 00:03:07,280 That's not a lot of customers, but these are very big 66 00:03:07,280 --> 00:03:10,120 meaningful customers. When they sign up a customer, 67 00:03:10,240 --> 00:03:13,240 they get a lot of revenue out of them, every single customer. 68 00:03:13,320 --> 00:03:15,840 It's actually incredible. When we look at any of the other 69 00:03:15,840 --> 00:03:18,120 metrics and I will smooth some of these out because the cash 70 00:03:18,120 --> 00:03:19,640 flows are a little bit more volatile. 71 00:03:19,960 --> 00:03:23,040 But if we look at the free cash flow, this is also the free cash 72 00:03:23,040 --> 00:03:25,800 flow line of a very strong fast growing company. 73 00:03:25,920 --> 00:03:29,000 The free cash flow is less than $200 million in 2022. 74 00:03:29,360 --> 00:03:33,400 The free cash flow is 1.7 billion as of the trailing 12 75 00:03:33,400 --> 00:03:36,200 months of last quarter and it's likely going to continue to 76 00:03:36,200 --> 00:03:37,760 grow. The earnings per share are 77 00:03:37,760 --> 00:03:41,000 growing rather quick from six cents to $0.30 over just the 78 00:03:41,000 --> 00:03:43,960 past year or so. So earnings per share is up, the 79 00:03:43,960 --> 00:03:46,600 cash is up, the margins continue to go up. 80 00:03:46,680 --> 00:03:51,120 So Palantir is a world class AI company, huge customer count 81 00:03:51,120 --> 00:03:53,640 growth and with each customer they're making a fortune in 82 00:03:53,640 --> 00:03:58,120 revenue and they offer a product that is the most hot product in 83 00:03:58,120 --> 00:03:59,680 one of the most hot bull markets. 84 00:03:59,680 --> 00:04:01,880 The other part of the story is the valuation. 85 00:04:02,200 --> 00:04:05,120 The valuation of Palantir is the valuation that I've never seen 86 00:04:05,120 --> 00:04:09,720 before in the stock market ever. And not only have I not seen it 87 00:04:09,720 --> 00:04:12,120 in the past 10 years of me looking at this type of stuff 88 00:04:12,120 --> 00:04:14,840 every single day, but I've also just never heard of it. 89 00:04:15,240 --> 00:04:17,040 I, I've never read about it in a history book. 90 00:04:17,040 --> 00:04:19,399 I've never seen an instance like this ever. 91 00:04:19,920 --> 00:04:22,560 This is genuinely, frankly, new territory. 92 00:04:22,920 --> 00:04:26,720 Palantir investors are stepping in brand new territory with this 93 00:04:26,720 --> 00:04:29,320 valuation. And by that I mean a company 94 00:04:29,640 --> 00:04:32,840 that has over a $400 billion market cap. 95 00:04:33,360 --> 00:04:36,160 So this isn't some $5 billion company trading with wild 96 00:04:36,160 --> 00:04:38,840 expectations. This isn't some little Unicorn. 97 00:04:39,280 --> 00:04:43,280 This is a company almost as big as Netflix, bigger than 98 00:04:43,280 --> 00:04:46,760 Salesforce. It's big it it's a top 20 99 00:04:46,760 --> 00:04:51,960 company, 400 plus billion dollar market cap with a price to sales 100 00:04:51,960 --> 00:04:55,920 of 134 trailing on a forward basis. 101 00:04:55,920 --> 00:05:00,440 The price to sales is about 90. That's something I've just never 102 00:05:00,440 --> 00:05:03,080 seen before ever. And this is being driven by a 103 00:05:03,080 --> 00:05:06,000 strong combination of the fundamentals of the company, 104 00:05:06,000 --> 00:05:09,960 which are again they're phenomenal and the momentum. 105 00:05:09,960 --> 00:05:12,480 Now if we look at a visual hair, this is what Palantir looks like 106 00:05:12,920 --> 00:05:16,800 when you map out the PE ratio from left to right, it's one of 107 00:05:16,800 --> 00:05:20,240 the highest PES in the market. Again, only Tesla and Boeing 108 00:05:20,240 --> 00:05:22,600 really coming close. But then when you map it out on 109 00:05:22,600 --> 00:05:26,880 a price to forward-looking sales and Palantir is nowhere close to 110 00:05:26,880 --> 00:05:29,040 anyone else. It's trading at the most premium 111 00:05:29,040 --> 00:05:31,080 valuation of any company in the market. 112 00:05:31,080 --> 00:05:33,360 So we have these two sides of Palantir stock, an amazing 113 00:05:33,360 --> 00:05:35,720 company with incredible fundamentals, but we also have a 114 00:05:35,720 --> 00:05:39,480 valuation that prices in a ton of momentum and that puts this 115 00:05:39,480 --> 00:05:42,520 stock in a very difficult spot for me. 116 00:05:42,520 --> 00:05:45,560 This stock, even though the the fundamentals are incredible, 117 00:05:46,240 --> 00:05:49,400 it's far too reliant on far too fast of growth. 118 00:05:49,840 --> 00:05:53,880 I think it's too reliant on it. If you look at Palantir, I 119 00:05:53,880 --> 00:05:56,760 believe if there's any deceleration, any weakness 120 00:05:56,760 --> 00:06:00,360 whatsoever, the stock is is going to be in a lot of trouble. 121 00:06:00,640 --> 00:06:02,520 That's what you you have baked into it. 122 00:06:02,760 --> 00:06:04,480 Now Palantir investors may be right. 123 00:06:04,760 --> 00:06:07,680 Maybe it continues to just accelerate then outperform, 124 00:06:07,880 --> 00:06:10,280 maybe becomes a trillion dollar plus company. 125 00:06:10,480 --> 00:06:14,240 That could be the case, but I just think there's more safe 126 00:06:14,240 --> 00:06:16,560 bets, ones that are a little bit more conservative that don't 127 00:06:16,560 --> 00:06:19,520 rely on a company already pricing in so much future 128 00:06:19,520 --> 00:06:21,800 expectations. Even though I think it's going 129 00:06:21,800 --> 00:06:24,920 to be on its revenue and its earnings, it's not one that I'm 130 00:06:24,920 --> 00:06:27,320 interested in jumping in now at this valuation. 131 00:06:27,320 --> 00:06:30,160 Now if we go back to the weekly calendar, Palantir is really the 132 00:06:30,160 --> 00:06:32,640 only meaningful 1 today. Then we get into Tuesday before 133 00:06:32,640 --> 00:06:35,800 market open, we have Shopify, Uber and Spotify. 134 00:06:35,800 --> 00:06:37,880 Let's go ahead and start off with Shopify here. 135 00:06:38,160 --> 00:06:40,240 This is one that I've had on the watch list for some time. 136 00:06:40,680 --> 00:06:43,600 I really like Shopify. I I really do love this stock. 137 00:06:43,800 --> 00:06:45,640 There's a lot more to it than people think. 138 00:06:46,000 --> 00:06:49,840 People just view Shopify as an online retail hosting website. 139 00:06:50,040 --> 00:06:51,760 Like if you want to start a little business and you want to 140 00:06:51,760 --> 00:06:54,320 sell some merchandise you can sell on Shopify. 141 00:06:54,720 --> 00:06:57,400 That's a very outdated view of this company. 142 00:06:57,760 --> 00:07:01,600 Shopify is hosting massive amounts of sales with large 143 00:07:01,600 --> 00:07:03,680 companies selling big meaningful products. 144 00:07:03,720 --> 00:07:08,000 It has become the go to place for self hosted do it yourself 145 00:07:08,000 --> 00:07:10,320 businesses. Unless you want to sell on 146 00:07:10,320 --> 00:07:13,200 Amazon or walmart.com, you're likely going to be selling on 147 00:07:13,200 --> 00:07:15,200 Shopify. What we'll see with Shopify is 148 00:07:15,200 --> 00:07:17,760 this company continue to talk about how they're growing 149 00:07:17,760 --> 00:07:20,920 generally all throughout the world, including international 150 00:07:20,920 --> 00:07:24,080 and European expansion. They have a lot of momentum in 151 00:07:24,080 --> 00:07:26,240 that category. Growth and adoption of AI 152 00:07:26,240 --> 00:07:29,560 powered commerce tools, recent launches like Universal Cart, 153 00:07:29,600 --> 00:07:33,000 checkout kit, the expansion of Sidekick store builder tools 154 00:07:33,000 --> 00:07:35,600 represent Shopify's push into AI driven commerce. 155 00:07:35,600 --> 00:07:38,040 So they're doing the same thing as every other company, 156 00:07:38,200 --> 00:07:41,040 intertwining their entire company with AI driven products 157 00:07:41,040 --> 00:07:43,480 and services. There's also a big push for 158 00:07:43,480 --> 00:07:47,280 Shopify to get into bigger companies, success in upmarket 159 00:07:47,280 --> 00:07:50,720 and new industry verticals. Shopify's strategy to attract a 160 00:07:50,720 --> 00:07:53,720 larger enterprise merchants and diversify into industries such 161 00:07:53,720 --> 00:07:56,960 as B to B industrial and non traditional retail was 162 00:07:56,960 --> 00:08:00,920 emphasized as a growth lever. So as investors, we should be 163 00:08:00,920 --> 00:08:03,480 looking at whether or not they're they're gaining in that 164 00:08:03,480 --> 00:08:07,320 goal of getting these larger enterprise companies as well as 165 00:08:07,320 --> 00:08:10,080 not even business to customer. They're doing business to 166 00:08:10,080 --> 00:08:12,920 business websites now, performance of merchant 167 00:08:12,920 --> 00:08:14,840 solutions, payments and shop pay. 168 00:08:15,080 --> 00:08:17,040 This is the part that I'm probably the most excited about 169 00:08:17,040 --> 00:08:19,680 with Shopify. This is under Shopify capital. 170 00:08:19,680 --> 00:08:22,720 So they're also growing again as like a company that's like a 171 00:08:22,720 --> 00:08:26,920 PayPal or for or another payment company right within Shopify, 172 00:08:26,920 --> 00:08:28,760 which I think is a really good place to go. 173 00:08:28,760 --> 00:08:31,760 I'd give Shopify about a 70% chance of beating on their 174 00:08:31,760 --> 00:08:33,120 revenue and earnings. Now. 175 00:08:33,120 --> 00:08:36,640 Next up, we have Uber, one of the most popular retail stocks. 176 00:08:36,640 --> 00:08:38,679 This is one that a lot of investors are write about 177 00:08:38,919 --> 00:08:41,200 reporting earnings. At the same time, this is one 178 00:08:41,200 --> 00:08:43,080 that I've always had a positive view on Uber. 179 00:08:43,080 --> 00:08:46,840 I gave it a 90% chance of being a really good investment. 10% is 180 00:08:46,840 --> 00:08:51,200 that Tesla, Waymo, all those companies start to crowd out 181 00:08:51,200 --> 00:08:53,640 Uber and that kind of overshadows the story. 182 00:08:54,400 --> 00:08:57,240 What I like, like I thought that's a minority chance. 183 00:08:57,240 --> 00:09:00,560 That's not likely to happen. I think far more than likely 184 00:09:00,840 --> 00:09:04,080 Uber will find a way to just evolve and fill in the cracks 185 00:09:04,320 --> 00:09:08,600 from what Waymo and and Tesla and Zooks and the other robo 186 00:09:08,600 --> 00:09:12,000 taxis do. For example, Waymo today just 187 00:09:12,000 --> 00:09:14,000 announced that they're opening up in 3 new cities. 188 00:09:14,480 --> 00:09:15,960 Now. We haven't really heard how 189 00:09:15,960 --> 00:09:18,520 that's going to affect Uber, but we're at the point where Uber 190 00:09:18,520 --> 00:09:19,920 investors just aren't concerned about it. 191 00:09:20,200 --> 00:09:23,720 They're not too concerned about the ever growing presence of 192 00:09:23,720 --> 00:09:25,360 Waymo and the expansion of Waymo. 193 00:09:25,640 --> 00:09:29,000 That part of the story is largely baked into the stock 194 00:09:29,000 --> 00:09:31,760 price. For me personally, I do like 195 00:09:31,760 --> 00:09:33,160 Uber stock. I like it a lot. 196 00:09:33,160 --> 00:09:36,640 And again, part of the reason I haven't bought it is it's just 197 00:09:36,640 --> 00:09:38,280 one of those stocks that's not dipping. 198 00:09:38,280 --> 00:09:41,880 It's not giving me that nice juicy opportunity where people 199 00:09:41,880 --> 00:09:44,840 are scared about it, where it's going down like crazy that I can 200 00:09:44,840 --> 00:09:47,520 enter a position since I already own a lot of good companies, 201 00:09:47,520 --> 00:09:50,120 I've just been waiting on Uber. I really like the direction 202 00:09:50,120 --> 00:09:52,920 Uber's going and the enthusiasm from the CEO. 203 00:09:52,920 --> 00:09:54,440 He's always launching new products. 204 00:09:54,440 --> 00:09:56,120 He's excited about the future of the company. 205 00:09:56,440 --> 00:09:58,720 He seems really focused with Uber. 206 00:09:58,720 --> 00:10:01,760 Then we have the big overhang or the hurdle for this company, 207 00:10:02,080 --> 00:10:05,760 which now is not as much of A hurdle as investors thought it 208 00:10:05,760 --> 00:10:07,480 was. Over the past year, Uber has 209 00:10:07,480 --> 00:10:11,320 made significant progress in autonomous vehicles, expanding 210 00:10:11,320 --> 00:10:14,680 operations with Waymo and Austin and Atlanta, and announcing new 211 00:10:14,680 --> 00:10:18,280 partnerships with Neuro, Lucid, Baidu and others. 212 00:10:18,560 --> 00:10:21,440 The focus in the upcoming quarter will be on scaling these 213 00:10:21,440 --> 00:10:24,920 deployments and evaluating the impact on rides utilization 214 00:10:24,920 --> 00:10:26,600 rates and operational efficiency. 215 00:10:26,880 --> 00:10:30,560 Investors should be attentive to any benchmarks in trip numbers, 216 00:10:30,560 --> 00:10:33,680 consumer adoption rates, and further OEM partnerships 217 00:10:33,680 --> 00:10:36,160 announced. Now this is 1 where I look at 218 00:10:36,160 --> 00:10:38,240 what the CE OS doing and he's, he's doing the right thing. 219 00:10:38,560 --> 00:10:41,680 Any time he talks about autonomous driving, he talks 220 00:10:41,680 --> 00:10:43,640 super bullishly about it. He says it's going to be a big 221 00:10:43,640 --> 00:10:46,760 part of the future. He says he'll, he'll rattle off 222 00:10:46,760 --> 00:10:49,040 a big list of partners that they have. 223 00:10:49,360 --> 00:10:52,920 Oh, we got 20 partners, We got Waymo, we got Lucid, Neuro, 224 00:10:52,920 --> 00:10:55,320 Baidu, so on and so forth. Everybody wants to partner with 225 00:10:55,360 --> 00:10:59,720 Uber to try to paint Uber as the center of attention, that this 226 00:10:59,720 --> 00:11:03,280 is the glue that glues all the AV companies together. 227 00:11:04,000 --> 00:11:07,600 And even though I think that's a good story from the CEO, what I 228 00:11:07,600 --> 00:11:10,040 see is a little different. I think the reality is a little 229 00:11:10,040 --> 00:11:11,840 different. I think a lot of these 230 00:11:11,840 --> 00:11:16,880 partnerships are on paper partnerships like with Neuro and 231 00:11:16,880 --> 00:11:21,040 Lucid and Baidu. We're not seeing them have real 232 00:11:21,040 --> 00:11:24,800 autonomous rides all across the nation in any meaningful amount 233 00:11:25,280 --> 00:11:27,040 so far. Those are just partnerships that 234 00:11:27,040 --> 00:11:30,000 they agreed to work together. The only real robo taxi company 235 00:11:30,000 --> 00:11:34,040 today that offers meaningful rides, weekly rides, ones that 236 00:11:34,040 --> 00:11:36,240 are real, that customers are paying for, that there's no 237 00:11:36,440 --> 00:11:38,760 employee in the vehicles is Waymo. 238 00:11:39,160 --> 00:11:42,000 That's the only one. And Waymo has only partnered 239 00:11:42,040 --> 00:11:44,560 halfway with Uber. Many of the places they're 240 00:11:44,560 --> 00:11:46,680 opening, they're doing it without Uber. 241 00:11:47,120 --> 00:11:51,800 So even though, again, even though the CEO is saying we're 242 00:11:51,800 --> 00:11:54,320 at the center of attention, everybody's, everybody's 243 00:11:54,320 --> 00:11:57,080 partnered with us. He's leaving out that Waymo is 244 00:11:57,080 --> 00:12:00,280 partnering with them halfway. Tesla's not partnering with them 245 00:12:00,280 --> 00:12:02,440 at all. Tesla could get to a point where 246 00:12:02,440 --> 00:12:05,120 in many of the cities they could offer rides without employees 247 00:12:05,320 --> 00:12:07,920 and have a genuine robo taxi service be operational. 248 00:12:08,280 --> 00:12:10,800 And if they do that without Uber, that could cast an 249 00:12:10,800 --> 00:12:12,520 additional hurdle for the company. 250 00:12:12,960 --> 00:12:16,640 Another thing that I think is important is there's again, a 251 00:12:16,640 --> 00:12:19,120 lot of focus on the Uber app, which is great. 252 00:12:19,160 --> 00:12:21,120 The Waymo app is also phenomenal. 253 00:12:21,360 --> 00:12:24,680 It has a five star rating with tons of reviews. 254 00:12:25,120 --> 00:12:28,760 Everybody loves Waymo. They don't just love Uber, they 255 00:12:28,760 --> 00:12:31,560 love Waymo and they love Waymo even without Uber. 256 00:12:32,000 --> 00:12:35,360 So I feel like there's, even though there's progress here, I 257 00:12:35,360 --> 00:12:37,640 still feel like this is a potential concern for the 258 00:12:37,640 --> 00:12:39,640 company. Right now, autonomous vehicles 259 00:12:39,640 --> 00:12:42,720 make up a very tiny insignificant percentage of 260 00:12:42,720 --> 00:12:45,520 total rides. But it will start to eat away 261 00:12:45,520 --> 00:12:49,840 the market share of Uber. It will start to offer delivery 262 00:12:49,840 --> 00:12:52,560 for for food. They'll do that autonomously 263 00:12:52,560 --> 00:12:56,440 like they're doing with DoorDash a VS will control this market. 264 00:12:56,800 --> 00:13:00,240 So personally, right now, even though I love Uber, I, I like 265 00:13:00,240 --> 00:13:03,560 the progress that it's making. I love Google even more. 266 00:13:03,720 --> 00:13:05,560 I'm sorry to say it. I know it's not a shock. 267 00:13:05,560 --> 00:13:07,560 I just love the positioning of Waymo and Google. 268 00:13:07,840 --> 00:13:10,760 I think it's just a little bit more advantageous positioning we 269 00:13:10,760 --> 00:13:12,720 have from the company. And this is something that I 270 00:13:12,720 --> 00:13:15,920 really like is that they're buying back shares like crazy. 271 00:13:16,040 --> 00:13:18,160 I think they'll be on their expectations. 272 00:13:18,160 --> 00:13:22,000 I think the CEO has a lot of great narratives and stories to 273 00:13:22,000 --> 00:13:24,200 sell to investors. And I don't think that they're 274 00:13:24,200 --> 00:13:25,680 false stories. I think they're just good 275 00:13:25,680 --> 00:13:27,960 stories to tell. So I think that Uber has a 276 00:13:27,960 --> 00:13:29,960 bright path. More than likely, I think it's 277 00:13:29,960 --> 00:13:31,920 still going to be a profitable investment for a very long 278 00:13:31,920 --> 00:13:34,080 period of time. Now continuing on, again, this 279 00:13:34,080 --> 00:13:36,560 is a super busy week. Looking at the calendar, we 280 00:13:36,560 --> 00:13:39,280 still have Spotify at the same time as Uber and Shopify. 281 00:13:39,600 --> 00:13:42,480 Then we have AMD. We have Robin Hood and two 282 00:13:42,480 --> 00:13:45,480 companies that are pretty small, but if I filter them out, we 283 00:13:45,480 --> 00:13:48,400 have a Duolingo on Wednesday. That's a company that a lot of 284 00:13:48,400 --> 00:13:50,760 people are interested in. And we have Texas Roadhouse, a 285 00:13:50,760 --> 00:13:53,840 company that I still have as a a fairly large holding, one of my 286 00:13:53,840 --> 00:13:56,120 biggest winners ever. I'll be going over that one as 287 00:13:56,120 --> 00:13:58,360 well. But we continue on with Spotify. 288 00:13:58,360 --> 00:14:00,000 Let's go ahead and just take a look at this one. 289 00:14:00,040 --> 00:14:03,120 What I expect to see with Spotify in this earnings is I 290 00:14:03,120 --> 00:14:05,760 expect to see continued monthly active user growth. 291 00:14:06,040 --> 00:14:11,320 Spotify is the quintessential example of a company that faces 292 00:14:11,320 --> 00:14:13,920 lots of competition. It's it's a company that has so 293 00:14:13,920 --> 00:14:17,640 many places you can listen to music, but because their product 294 00:14:17,920 --> 00:14:22,320 is free, it's more refined, it has a better user interface 295 00:14:22,320 --> 00:14:25,320 experience, and they already have the network effects of many 296 00:14:25,320 --> 00:14:27,840 people already using the product, which allows it to be a 297 00:14:27,840 --> 00:14:29,360 little bit better than the competition. 298 00:14:29,800 --> 00:14:32,600 That equates to exponential scale advantages. 299 00:14:33,040 --> 00:14:37,080 So even though Spotify faces YouTube Music and Apple Music 300 00:14:37,080 --> 00:14:39,880 and all these large competitors, you'd think that that was slow 301 00:14:39,880 --> 00:14:43,320 down Spotify's growth. But again, users will use 302 00:14:43,320 --> 00:14:46,320 whatever product is slightly best as long as they're all 303 00:14:46,320 --> 00:14:49,480 around the same price or free. And that's exactly the case. 304 00:14:49,720 --> 00:14:52,720 Spotify cost the same amount that any other streaming service 305 00:14:52,720 --> 00:14:55,720 cost, roughly speaking. And because of that, users 306 00:14:55,720 --> 00:14:58,440 gravitate to which one they like the most, which is almost always 307 00:14:58,440 --> 00:15:00,800 going to be Spotify. So you have a product now 308 00:15:00,800 --> 00:15:04,520 growing to nearly 700 million active users. 309 00:15:04,800 --> 00:15:08,520 This product will go above a billion active users in less 310 00:15:08,520 --> 00:15:10,440 than a year or so. I think it's going to be there 311 00:15:10,440 --> 00:15:12,280 like less than two years for sure. 312 00:15:12,720 --> 00:15:16,480 It's just such a huge market. We're going to see Spotify lean 313 00:15:16,480 --> 00:15:19,800 into more digital AI ads, leveraging the same playbook 314 00:15:19,800 --> 00:15:21,840 that Meta did. We're going to see Spotify 315 00:15:21,840 --> 00:15:24,840 continue to grow and daily active, monthly active users. 316 00:15:25,120 --> 00:15:28,120 We'll see the company embrace video. 317 00:15:28,120 --> 00:15:30,480 They're now embracing video along with Netflix and along 318 00:15:30,480 --> 00:15:32,560 with YouTube. I see Spotify as more of a 319 00:15:32,560 --> 00:15:34,880 direct competitor to YouTube than Netflix. 320 00:15:35,120 --> 00:15:37,360 But the market's so big for streaming video that all of 321 00:15:37,360 --> 00:15:39,920 these companies can win. We're going to see the 322 00:15:39,920 --> 00:15:44,040 monetization increase, the AI tools like the AIDJ, all that 323 00:15:44,040 --> 00:15:47,440 type of stuff, increase, more podcasts, all of that good 324 00:15:47,440 --> 00:15:49,320 stuff. I'm very excited about this 325 00:15:49,320 --> 00:15:51,720 company. If I was an owner of Spotify and 326 00:15:51,720 --> 00:15:54,560 I'd bought the company earlier, I would just continue to hold 327 00:15:54,560 --> 00:15:55,640 it. But that's such a premium 328 00:15:55,640 --> 00:15:57,440 valuation that I haven't entered a position. 329 00:15:57,440 --> 00:16:00,480 Now moving on down the week, we get to Tuesday after market 330 00:16:00,480 --> 00:16:02,000 close. And the big one we have here is 331 00:16:02,000 --> 00:16:04,600 a MDAMD is done exceptionally well. 332 00:16:04,640 --> 00:16:08,600 It's up 112% year to date. You have them announcing deals 333 00:16:08,600 --> 00:16:11,080 with open AI. They're kind of in the loop in 334 00:16:11,080 --> 00:16:13,040 the game now. The narrative of them being left 335 00:16:13,040 --> 00:16:16,120 behind is kind of faded a bit. So AMD is now a serious 336 00:16:16,120 --> 00:16:19,080 competitor in this AI race. They're betting everything on 337 00:16:19,080 --> 00:16:21,520 these deals with open AI and I think that the leadership has 338 00:16:21,520 --> 00:16:24,800 done a fantastic job there. It trades at a very high 339 00:16:24,800 --> 00:16:28,960 valuation, 46 forward price to earnings, free cash flow yield 340 00:16:28,960 --> 00:16:30,960 below 1%. When you factor in stock based 341 00:16:30,960 --> 00:16:35,000 comp, it's below .7%. So a lot of this is future 342 00:16:35,000 --> 00:16:36,600 bullishness. That's fine. 343 00:16:36,880 --> 00:16:39,000 The company deserves to have some future bullishness. 344 00:16:39,200 --> 00:16:42,320 But just know this is again a company that has a lot of future 345 00:16:42,440 --> 00:16:45,000 priced into it. I expect AMD to be on their 346 00:16:45,000 --> 00:16:47,520 earnings and revenue. It's a company that usually 347 00:16:47,520 --> 00:16:49,400 does. We have the earnings per share. 348 00:16:49,480 --> 00:16:52,200 They beat on every single quarter except for one over the 349 00:16:52,200 --> 00:16:54,200 past four years. We look at the revenue. 350 00:16:54,200 --> 00:16:57,040 This is again the odds are in your favour of this company 351 00:16:57,040 --> 00:16:59,600 coming in above and there's no reason over the past quarter 352 00:16:59,600 --> 00:17:02,760 that they should come in under and even if they do, their 353 00:17:02,760 --> 00:17:04,599 guidance should more than make up for it. 354 00:17:04,640 --> 00:17:07,240 This is again a company that has numerous bullish catalysts going 355 00:17:07,240 --> 00:17:09,720 into this earnings. So I can't see anything going 356 00:17:09,720 --> 00:17:11,880 too wrong this earnings. I'd be shocked if there's a big 357 00:17:11,880 --> 00:17:14,480 sell off, maybe it could happen, but I don't see it. 358 00:17:14,640 --> 00:17:16,800 Now moving forward throughout the week, we get into Wednesday 359 00:17:16,800 --> 00:17:19,520 before market open, there's none too interesting there. 360 00:17:19,640 --> 00:17:22,000 Aftermarket closes, really where we get into it. 361 00:17:22,400 --> 00:17:25,880 We have FICO right down here reporting earnings as well as 362 00:17:25,880 --> 00:17:28,280 way down here, one of the smaller companies, it's in My 363 00:17:28,280 --> 00:17:31,120 Portfolio, which is Duolingo. I'll go ahead and just mention a 364 00:17:31,120 --> 00:17:33,400 few things on FICO before jumping into Duolingo. 365 00:17:33,400 --> 00:17:37,160 My summary of how I feel about FICO right now is I believe the 366 00:17:37,160 --> 00:17:38,640 company fundamentally will do well. 367 00:17:38,640 --> 00:17:40,800 It's going to continue growing. They have a lot of pricing 368 00:17:40,800 --> 00:17:42,960 power. They're competing well against 369 00:17:42,960 --> 00:17:45,760 Equifax and the other credit bureaus, but I believe the 370 00:17:45,760 --> 00:17:48,800 company is not going to be too rewarded by investors because I 371 00:17:48,800 --> 00:17:52,520 I think that this area, the high quality companies, the credit 372 00:17:52,520 --> 00:17:56,080 bureaus, this whole category is a category that the market 373 00:17:56,080 --> 00:17:58,920 hasn't given a lot of love. And markets go through trends 374 00:17:58,920 --> 00:18:00,600 like this. There's momentum factors, 375 00:18:00,600 --> 00:18:02,960 there's different segments of the market that get more 376 00:18:02,960 --> 00:18:05,600 attention at different time periods despite fundamental 377 00:18:05,600 --> 00:18:07,520 performance. So if you're a FICO investor, I 378 00:18:07,520 --> 00:18:09,880 think whatever happens this week, I think it's a company 379 00:18:09,880 --> 00:18:12,440 that you probably hold on to put in the back burner because 380 00:18:12,440 --> 00:18:15,240 eventually as the cash flows and earnings move up, so does the 381 00:18:15,320 --> 00:18:17,080 stock price. Now, Next up, we get to 382 00:18:17,120 --> 00:18:20,280 everyone's favorite to have an opinion on, which is Duolingo. 383 00:18:20,640 --> 00:18:22,880 Duolingo's a stock that everybody knows which direction 384 00:18:22,880 --> 00:18:25,040 it's going. You know for sure the stock is 385 00:18:25,040 --> 00:18:27,920 going up, or you know for sure that this is just an app and the 386 00:18:27,920 --> 00:18:29,840 stock is terrible and it's going to go down. 387 00:18:30,160 --> 00:18:32,840 Everyone has a solid opinion on this company because frankly, 388 00:18:32,840 --> 00:18:35,720 it's just a very popular user app. 389 00:18:36,040 --> 00:18:38,080 It's a company that everybody knows about. 390 00:18:38,080 --> 00:18:40,320 We've all heard about it. Many of us have used it. 391 00:18:40,920 --> 00:18:43,000 So Duolingo is one that everybody has their opinion on. 392 00:18:43,000 --> 00:18:45,520 But I want to kind of share my thought process when looking at 393 00:18:45,520 --> 00:18:48,280 this company. First of all, I own Duolingo. 394 00:18:48,400 --> 00:18:51,360 I have, I have a a little size position. 395 00:18:51,360 --> 00:18:54,360 It's a very small size position that I intentionally position 396 00:18:54,360 --> 00:18:57,120 small because of the inherent volatility. 397 00:18:57,120 --> 00:19:00,560 And I'd see increased risk of this company over most of the 398 00:19:00,560 --> 00:19:03,200 companies that I invest in. For example, in the story fund, 399 00:19:03,200 --> 00:19:08,200 which is now above a $400,000 portfolio, $182,000 in gains. 400 00:19:08,480 --> 00:19:11,800 This portfolio is crushing it. It's just concentrated in 401 00:19:11,800 --> 00:19:14,640 Google, Netflix and Amazon. These companies are are all 402 00:19:14,640 --> 00:19:17,120 doing well. Even Netflix or Amazon rather is 403 00:19:17,120 --> 00:19:19,520 now pulling its weight, going up like crazy in a short amount of 404 00:19:19,520 --> 00:19:21,680 time. We'll get to more Amazon news 405 00:19:21,680 --> 00:19:24,600 here soon, but we have Duolingo right here at the bottom. 406 00:19:24,600 --> 00:19:26,520 This is the only one that I'm in the red on. 407 00:19:26,600 --> 00:19:28,480 It's also my most recent position. 408 00:19:28,800 --> 00:19:33,800 Duolingo's an $18,500 holding as of now, 5400 in the red. 409 00:19:33,840 --> 00:19:36,280 Now, before I jump into this one, I just want to address and 410 00:19:36,280 --> 00:19:39,400 go over the reasons that I own this company, as well as address 411 00:19:39,400 --> 00:19:42,000 many of the bare cases. I've heard a lot of feedback, a 412 00:19:42,320 --> 00:19:44,480 lot of concerns about this company, and I just want to go 413 00:19:44,480 --> 00:19:46,360 through them. First of all, we have the 414 00:19:46,360 --> 00:19:48,200 comments. The Duolingo's just an app. 415 00:19:48,840 --> 00:19:50,480 Like you're going to invest in just an app. 416 00:19:50,560 --> 00:19:52,880 Like just an app, $12 billion for that. 417 00:19:53,640 --> 00:19:57,360 Well, I don't really agree. I mean, I kind of agree with 418 00:19:57,360 --> 00:20:01,240 that assessment. Duolingo's just an app, but just 419 00:20:01,240 --> 00:20:05,120 an app kind of downplays or denigrates something that can be 420 00:20:05,120 --> 00:20:09,600 incredibly profitable. Open AI and Chachi BT is, is 421 00:20:09,600 --> 00:20:13,360 sort of just an app, like most people use Open A IS products on 422 00:20:13,360 --> 00:20:16,920 their app. When you look at Instagram, 423 00:20:17,280 --> 00:20:19,280 where are most people accessing Instagram? 424 00:20:19,440 --> 00:20:22,360 Are they doing it on their big desktop screens or their TV's? 425 00:20:22,600 --> 00:20:24,280 They're accessing Instagram on the phone. 426 00:20:24,400 --> 00:20:26,360 So in that case, you could say Instagram's just an app. 427 00:20:26,760 --> 00:20:30,480 It's a very valuable app. We could say the same for many, 428 00:20:30,520 --> 00:20:34,560 many big companies where their products are primarily accessed 429 00:20:34,560 --> 00:20:36,640 on an app. The next thing is that Duolingo 430 00:20:36,840 --> 00:20:39,840 is a company that's overpriced because it has high churn. 431 00:20:40,880 --> 00:20:44,480 People don't stick with it. I have not seen the churn rates 432 00:20:44,480 --> 00:20:46,880 for this company. There's third party estimates, 433 00:20:47,440 --> 00:20:52,000 but every single company that's a subscription company has 434 00:20:52,000 --> 00:20:53,880 churn. Every single one of them. 435 00:20:54,360 --> 00:20:57,640 Some companies have less churn because they have like more lock 436 00:20:57,640 --> 00:21:00,760 in or there's higher barriers to entry, but they also don't have 437 00:21:00,760 --> 00:21:02,320 nearly as much growth. Ave. 438 00:21:02,800 --> 00:21:05,680 Duolingo has a nice business model where the reason why it 439 00:21:05,680 --> 00:21:08,560 has this 40% revenue growth, which will probably grow around 440 00:21:08,560 --> 00:21:12,160 35% this quarter, some slight deceleration, which is fully 441 00:21:12,160 --> 00:21:14,400 expected. But the reason why it has such 442 00:21:14,400 --> 00:21:17,120 fast revenue growth is they bring people in on the freemium 443 00:21:17,120 --> 00:21:19,440 tear and then they convert them to the paid tear. 444 00:21:19,440 --> 00:21:22,680 Over time, that creates a nice ease of access. 445 00:21:23,080 --> 00:21:24,960 Duolingo's accessible to everyone. 446 00:21:25,240 --> 00:21:27,240 They bring you in, then they convert you. 447 00:21:27,760 --> 00:21:32,560 So Duolingo does have churn like every subscription company, but 448 00:21:32,560 --> 00:21:36,440 they also have a great organic growth path similar to Spotify, 449 00:21:36,760 --> 00:21:39,400 where they bring in users for free and they convert them to 450 00:21:39,400 --> 00:21:40,960 the more premium tears over time. 451 00:21:41,440 --> 00:21:43,840 That's been proven and you can see it in all the data. 452 00:21:44,200 --> 00:21:47,920 The revenue overall is $885 million. 453 00:21:48,480 --> 00:21:52,320 The subscription revenue is 734. Almost all the revenue they make 454 00:21:52,320 --> 00:21:55,360 is subscription, and you see the subscription revenue growing at 455 00:21:55,360 --> 00:21:58,680 even 47% year over year. As they're increasing the amount 456 00:21:58,680 --> 00:22:00,760 that they're converting over time, they're getting better at 457 00:22:00,760 --> 00:22:03,880 converting free users to paid. So I don't see a lot of evidence 458 00:22:03,880 --> 00:22:05,520 at Duolingo's churning through users. 459 00:22:05,520 --> 00:22:07,560 How would their subscription growth continue to grow at the 460 00:22:07,560 --> 00:22:10,960 skyrocketing pace? Also, there's more data to show 461 00:22:10,960 --> 00:22:13,400 that they're not churning through users all that fast. 462 00:22:13,640 --> 00:22:15,960 Their daily active users grew 40%. 463 00:22:16,240 --> 00:22:18,120 These are people using it every single day. 464 00:22:18,680 --> 00:22:21,960 They have a lot of daily active users, 47.7 million. 465 00:22:22,120 --> 00:22:25,200 That puts them in the top tier of social media companies on the 466 00:22:25,200 --> 00:22:28,000 amount of people that are using this service every single day. 467 00:22:28,480 --> 00:22:30,920 We have monthly active users continuing to grow. 468 00:22:31,120 --> 00:22:34,440 We had one tick downwards because of impact of a viral 469 00:22:34,440 --> 00:22:37,520 social media campaign. But again, the daily active 470 00:22:37,520 --> 00:22:40,280 users are the committed users and the paid users are 471 00:22:40,280 --> 00:22:44,320 continuing to grow as well. Over 10.9 million paid users, if 472 00:22:44,320 --> 00:22:46,880 we take a step back of what we're actually investing in with 473 00:22:46,880 --> 00:22:49,760 Duolingo, I look at it as a company that's not just a 474 00:22:49,760 --> 00:22:52,680 language learning app. Language learning is is a big 475 00:22:52,680 --> 00:22:55,440 segment and it's one that they started in to get fast growth. 476 00:22:55,640 --> 00:22:58,520 But management has made it abundantly clear that they want 477 00:22:58,520 --> 00:23:02,120 to be the digital learning app that has the largest network 478 00:23:02,120 --> 00:23:04,760 effects, the one that everybody goes to as this starting place 479 00:23:04,760 --> 00:23:07,120 for digital learning. There's going to be all sorts of 480 00:23:07,120 --> 00:23:09,960 places to learn. There'll be AI tools, there's 481 00:23:10,200 --> 00:23:14,240 schools and colleges and classes and tutors and everything from 482 00:23:14,240 --> 00:23:17,640 A-Z Learning is is. So is such a big category. 483 00:23:18,040 --> 00:23:22,320 There's also going to be one large digital concentrated 484 00:23:22,640 --> 00:23:27,120 position, one company that dominates for the app based 485 00:23:27,120 --> 00:23:30,920 digital learning environment and that company is Duolingo. 486 00:23:30,960 --> 00:23:33,440 If there's going to be a big winner in this category, it's 487 00:23:33,440 --> 00:23:35,720 Duolingo. Just like there's one big winner 488 00:23:36,080 --> 00:23:40,120 in ride sharing, which is Uber, there's a a big winner in social 489 00:23:40,120 --> 00:23:42,120 media, which is Facebook, There's a big winner in 490 00:23:42,120 --> 00:23:47,040 streaming TV, which is Netflix, There's a big winner in audio, 491 00:23:47,040 --> 00:23:49,920 which is Spotify. There's one big company 492 00:23:49,920 --> 00:23:53,640 dominating Ed tech learning going into new categories, which 493 00:23:53,640 --> 00:23:56,280 is Duolingo. So you can argue that Duolingo 494 00:23:56,360 --> 00:23:59,360 isn't a good investment, but then you're arguing that no 495 00:23:59,360 --> 00:24:01,280 company in Ed tech is a good investment. 496 00:24:01,280 --> 00:24:04,640 No company that really makes their major focus on app based 497 00:24:04,640 --> 00:24:07,520 learning is a good investment because they'll be clouded out 498 00:24:07,520 --> 00:24:11,320 by other companies, other AI companies, other other products. 499 00:24:11,600 --> 00:24:14,040 Maybe that's the case that that could be right. 500 00:24:14,040 --> 00:24:16,000 Maybe maybe the critics are right there. 501 00:24:16,320 --> 00:24:19,160 But at least for now, it's a bet that I'm willing to make that 502 00:24:19,160 --> 00:24:23,000 this company could really have huge network effects and grow 503 00:24:23,000 --> 00:24:26,240 into this massive category. But still believe there's room. 504 00:24:26,560 --> 00:24:30,400 There's a room for a big winner amongst many other smaller 505 00:24:30,400 --> 00:24:32,600 winners in this category. There's going to be lots of 506 00:24:32,600 --> 00:24:35,200 companies that teach language learning, lots of companies that 507 00:24:35,200 --> 00:24:38,920 do live translation, lots of companies that teach chess, lots 508 00:24:38,920 --> 00:24:41,840 of companies that teach math, lots of companies that teach 509 00:24:41,840 --> 00:24:44,040 music. But Duolingo will be a company 510 00:24:44,040 --> 00:24:48,240 that brings all of this together and offers a very streamlined, 511 00:24:48,240 --> 00:24:51,040 easy to use product that teaches all of those things. 512 00:24:51,520 --> 00:24:54,120 Their growth in chess alone, I think is really good. 513 00:24:54,400 --> 00:24:56,640 Their growth in the math segment is good. 514 00:24:56,800 --> 00:24:59,640 They're also growing in music. They're going to offer more 515 00:24:59,640 --> 00:25:01,880 categories over time. I think it's a matter of time 516 00:25:01,880 --> 00:25:03,840 before Duolingo starts teaching science. 517 00:25:04,240 --> 00:25:05,960 I think it's just a natural growth path. 518 00:25:06,520 --> 00:25:08,880 So if you have kids or you want to learn about a scientific 519 00:25:08,880 --> 00:25:11,240 endeavour, you can go through Duolingo and go through the 520 00:25:11,240 --> 00:25:15,040 standardized courses in a very fun and streamlined way that has 521 00:25:15,040 --> 00:25:18,560 ladders, rankings, has encouraging things that keep you 522 00:25:18,560 --> 00:25:20,360 learning. When I look at Duolingo, what I 523 00:25:20,360 --> 00:25:23,640 believe will happen this quarter is I believe that the monthly 524 00:25:23,640 --> 00:25:25,720 active users will be the weak spot. 525 00:25:26,080 --> 00:25:28,680 So the monthly active users like the last quarter, I think is 526 00:25:28,680 --> 00:25:31,080 going to be below expectations, a little bit slower than 527 00:25:31,080 --> 00:25:36,120 expected because I believe the move from hearts to energy is 528 00:25:36,120 --> 00:25:38,920 going to cause some churn. Some of the users that only want 529 00:25:38,920 --> 00:25:41,320 Duolingo for free forever, they want to use it all the time 530 00:25:41,320 --> 00:25:44,040 without paying a dime. They're going to turn off of the 531 00:25:44,040 --> 00:25:45,800 app. But I think that it's going to 532 00:25:45,800 --> 00:25:48,800 cause higher conversions for the existing users. 533 00:25:48,880 --> 00:25:52,280 So my prediction is we'll see a dynamic here where the monthly 534 00:25:52,280 --> 00:25:55,720 active users will struggle, but the daily active users will 535 00:25:55,720 --> 00:25:59,400 continue to go up as well as especially the paid subscribers. 536 00:25:59,480 --> 00:26:02,480 I think paid subscribers will stay very strong, maybe even 537 00:26:02,480 --> 00:26:05,720 come in better than expected because of the conversion rate 538 00:26:05,720 --> 00:26:07,960 going up. But this one is impossible to 539 00:26:07,960 --> 00:26:10,040 tell what direction it's going to trade. 540 00:26:10,360 --> 00:26:14,280 It is so volatile. It'll either go up 15% or down 541 00:26:14,280 --> 00:26:16,760 15% or even more. It's one of the most crazy 542 00:26:16,760 --> 00:26:18,160 stocks that I've ever been a part of. 543 00:26:18,280 --> 00:26:21,120 The stock price is interesting with this company, but again, if 544 00:26:21,120 --> 00:26:23,720 you're invested as a fundamental investor, you're looking at the 545 00:26:23,720 --> 00:26:26,400 long term future of it, the revenue growth, the paid 546 00:26:26,400 --> 00:26:28,800 subscribers, and of course the profitability. 547 00:26:29,040 --> 00:26:32,040 This one should continue to grow earnings per share at a very 548 00:26:32,040 --> 00:26:35,280 fast clip and as long as that continues, I'll stay invested in 549 00:26:35,280 --> 00:26:37,240 the company. Now moving on, we get to Texas 550 00:26:37,240 --> 00:26:39,160 Roadhouse reporting earnings on Thursday. 551 00:26:39,600 --> 00:26:42,040 This is one that's in my passive income portfolio. 552 00:26:42,040 --> 00:26:45,760 So if we look at this, this is a a $900,000 plus portfolio, 553 00:26:45,760 --> 00:26:49,440 360,000 of that being gains. We look at Texas Roadhouse and 554 00:26:49,440 --> 00:26:52,160 it's in the restaurant category. Let's go ahead and check it out 555 00:26:52,160 --> 00:26:55,000 here. It is a $42,000 position, 556 00:26:55,160 --> 00:26:59,680 $38,000 in gains. Now this position grew to around 557 00:26:59,680 --> 00:27:03,400 $75,000 and I sold about half of it. 558 00:27:03,760 --> 00:27:05,960 So I've taken a lot off the table on this one. 559 00:27:06,360 --> 00:27:09,600 And part of the reason why is because as good as Texas 560 00:27:09,600 --> 00:27:12,600 Roadhouse is, which I, I believe it's a top tier restaurant, it 561 00:27:12,600 --> 00:27:15,240 really is. I don't like having a small 562 00:27:15,240 --> 00:27:18,240 restaurant as a top three position. 563 00:27:18,280 --> 00:27:21,600 I just don't feel comfortable with it again, and that's saying 564 00:27:21,600 --> 00:27:23,520 a lot because I really like Texas Roadhouse. 565 00:27:23,520 --> 00:27:24,840 I think the company is phenomenal. 566 00:27:25,040 --> 00:27:26,640 It's a genuine compounding machine. 567 00:27:26,880 --> 00:27:29,280 It's outperformed many of the best tech companies over the 568 00:27:29,280 --> 00:27:33,760 past 20 years, but I feel like there's some prudency in taking 569 00:27:34,040 --> 00:27:36,640 a restaurant down in size as a position. 570 00:27:37,000 --> 00:27:40,400 For example, the top position in Bill Ackman's portfolio or one 571 00:27:40,400 --> 00:27:42,840 of the biggest has been Chipotle for a long period of time. 572 00:27:43,160 --> 00:27:45,960 This is also a company that I was very bullish on, but I sold 573 00:27:45,960 --> 00:27:48,800 it at around $55. Around that price point. 574 00:27:48,920 --> 00:27:51,560 I can look at my trading history with this company and I started 575 00:27:51,560 --> 00:27:55,080 exiting Chipotle from July 11th to July 18th. 576 00:27:55,400 --> 00:27:58,680 My sell price was around $52, so that's when I was selling the 577 00:27:58,680 --> 00:28:00,840 company. We look at Chipotle today and 578 00:28:00,840 --> 00:28:03,320 it's it's now at $31.00. The stock price has been 579 00:28:03,320 --> 00:28:06,120 obliterated. So this is the problem with 580 00:28:06,160 --> 00:28:09,280 restaurants in general. Of course, this can happen to 581 00:28:09,280 --> 00:28:13,440 any company, but restaurants are just a bit more risky. 582 00:28:13,440 --> 00:28:16,040 They they're a little bit more volatile because they have such 583 00:28:16,040 --> 00:28:18,080 low margins compared to other companies. 584 00:28:18,400 --> 00:28:22,320 Any changes in revenue trajectory, any changes in input 585 00:28:22,320 --> 00:28:26,480 costs like avocado prices, beef prices, will dramatically affect 586 00:28:26,480 --> 00:28:28,560 their profitability. When I look at Texas Roadhouse 587 00:28:28,560 --> 00:28:31,640 today, I don't expect anything massive from this earnings 588 00:28:31,640 --> 00:28:32,920 report. I think this is going to be a 589 00:28:32,920 --> 00:28:35,600 business as usual week and I think Texas Roadhouse will be 590 00:28:35,600 --> 00:28:38,440 fine. The valuation isn't crazy, It's 591 00:28:38,440 --> 00:28:40,440 not super cheap, it's not super expensive. 592 00:28:40,440 --> 00:28:43,320 It's right in line. The restaurant is doing better 593 00:28:43,320 --> 00:28:45,760 than its peers. It still has a really good value 594 00:28:45,760 --> 00:28:47,960 proposition. So I'm going to continue holding 595 00:28:47,960 --> 00:28:50,600 this one throughout earnings. So there we have this huge week. 596 00:28:50,600 --> 00:28:53,640 Overall, I feel very positive about most of these companies. 597 00:28:54,080 --> 00:28:56,600 I don't think there's any that I'm too overly concerned about 598 00:28:57,000 --> 00:29:00,440 and neither is Tom Lee. Tom Lee was once again on CNBC 599 00:29:00,440 --> 00:29:04,280 making his appearance and you'll be shocked to know what he 600 00:29:04,280 --> 00:29:06,720 thinks. Tom Lee thinks the markets going 601 00:29:06,720 --> 00:29:09,040 up. Now you can criticize him for 602 00:29:09,040 --> 00:29:12,480 just being a permeable, but he has been correct for a long 603 00:29:12,480 --> 00:29:14,880 period of time. And even where other investors 604 00:29:14,880 --> 00:29:17,280 were panicking, Tom Lee said that this stuff is going to be 605 00:29:17,280 --> 00:29:19,240 short lived, that the market's going to go higher, and we'll go 606 00:29:19,240 --> 00:29:21,840 through his main arguments of why the market will continue to 607 00:29:21,840 --> 00:29:24,720 go higher throughout this year. The first reason that this 608 00:29:24,720 --> 00:29:27,640 market will continue to go up is historical presidents. 609 00:29:27,640 --> 00:29:30,840 He outlines how what has happened over the past six 610 00:29:30,840 --> 00:29:33,400 months is a huge indication that we're going to have a strong 611 00:29:33,400 --> 00:29:35,200 close to the end of this year. That's right. 612 00:29:35,200 --> 00:29:38,000 I think the market has a lot of walls of worry because we've got 613 00:29:38,000 --> 00:29:42,560 the shutdown, we've got China, we got the Fed speak, but the 614 00:29:42,560 --> 00:29:47,440 markets been up six months in a row now only 6 times since 1928 615 00:29:47,440 --> 00:29:50,880 that's happened. So it if you look at November, 616 00:29:51,120 --> 00:29:54,280 we're up five or six times and in 1942, it was flat. 617 00:29:54,280 --> 00:29:57,760 So basically November should be really strong, I think at least 618 00:29:57,760 --> 00:30:00,440 200 points on the SMB. So this isn't a fundamentally 619 00:30:00,440 --> 00:30:03,160 related argument, but it's just based off of how market trading 620 00:30:03,160 --> 00:30:05,760 history has worked. Based off of history, we should 621 00:30:05,760 --> 00:30:08,600 continue to go up. The next point he brings up is 622 00:30:08,600 --> 00:30:11,320 how the market is actually negative in its sentiment. 623 00:30:11,320 --> 00:30:14,720 It's not bullish right now, which is a bullish point to 624 00:30:14,720 --> 00:30:17,440 bring up, not positive, is it? You mentioned the wall of worry. 625 00:30:17,840 --> 00:30:21,280 Yeah, I mean, if you look at it like AAII, the average sentiment 626 00:30:21,280 --> 00:30:25,480 this year is still -11.5 like net, sadly bearish. 627 00:30:26,000 --> 00:30:28,880 That's only happened three other times in 35 years, all in the 628 00:30:28,880 --> 00:30:32,200 middle of bear market. So investors feel like it's a 629 00:30:32,200 --> 00:30:36,600 bear market, but we're up 17%, which kind of tells me, I think 630 00:30:36,600 --> 00:30:38,440 there's a big performance chase into your rent. 631 00:30:38,440 --> 00:30:41,280 You know over 80% of fund managers are missing their 632 00:30:41,280 --> 00:30:45,000 benchmark this year. Over 80% of fund managers are 633 00:30:45,000 --> 00:30:48,000 missing their benchmarks this year because all the gains have 634 00:30:48,000 --> 00:30:51,800 been concentrated in a handful of few companies and there's 635 00:30:51,800 --> 00:30:55,280 been widespread bear sentiment. He believes that that's actually 636 00:30:55,320 --> 00:30:57,640 bullish throughout the end of this year because you'll have 637 00:30:57,640 --> 00:31:00,560 the people that have been left out going, oh man, I, I gotta, I 638 00:31:00,560 --> 00:31:03,320 gotta get in this market like the it's racing away from me. 639 00:31:03,720 --> 00:31:06,400 And they will chase the gains. They'll push up prices even 640 00:31:06,400 --> 00:31:09,360 further chasing the gains because they've been left out. 641 00:31:09,400 --> 00:31:12,280 The next point he brings up after that is that inflation 642 00:31:12,280 --> 00:31:14,600 continues to fall. He said it's rapidly falling 643 00:31:14,600 --> 00:31:16,120 inflation. That's right, because, you know, 644 00:31:16,120 --> 00:31:18,600 we have a good Fed futures to look at what's implied for 645 00:31:18,600 --> 00:31:20,360 inflation. You know, the Fed looks at the 646 00:31:20,360 --> 00:31:24,240 bond market, bond market figures things out before the data comes 647 00:31:24,240 --> 00:31:26,920 out. I do think the inflation is 648 00:31:27,120 --> 00:31:30,240 probably falling a lot faster than everyone expects. 649 00:31:30,240 --> 00:31:33,800 I mean, you can look at true flation and we're down to sub 2% 650 00:31:34,200 --> 00:31:36,360 inflation. So we get a lot of conflicting 651 00:31:36,360 --> 00:31:38,280 reports on this. Some people are saying inflation 652 00:31:38,280 --> 00:31:40,480 is ticking back upwards. Tom Lee's saying there's 653 00:31:40,480 --> 00:31:43,240 actually a lot of evidence that it's plummeting, it's going 654 00:31:43,240 --> 00:31:45,440 down, and the bond market has already figured out this 655 00:31:45,440 --> 00:31:47,680 dynamic. Tom Lee continues on in this 656 00:31:47,680 --> 00:31:50,440 appearance, making his case for why the market's going higher 657 00:31:50,720 --> 00:31:52,520 this time. He points to record 658 00:31:52,720 --> 00:31:55,120 profitability that margins are actually moving up for 659 00:31:55,120 --> 00:31:56,440 companies. Yeah. 660 00:31:56,600 --> 00:31:58,640 I mean, I think there is something the market's trying to 661 00:31:58,640 --> 00:32:03,080 figure out, which is AI is consuming jobs, but that's 662 00:32:03,080 --> 00:32:04,720 turning it into profits for corporate. 663 00:32:04,720 --> 00:32:09,360 So like profits are expanding and then we have profit margins 664 00:32:09,360 --> 00:32:11,480 have actually been going up in the middle of tariffs. 665 00:32:11,480 --> 00:32:15,800 So how are companies able to take 70% of the tariff hit, but 666 00:32:15,800 --> 00:32:18,320 margins are going up. So there must be a productivity 667 00:32:18,320 --> 00:32:20,960 boom somewhere. And then we have, like you said, 668 00:32:20,960 --> 00:32:24,080 7 trying to cash on the sidelines, but we have high 669 00:32:24,080 --> 00:32:27,400 rates. And so the Fed, I kind of think 670 00:32:27,520 --> 00:32:30,040 is trying to not overheat the economy. 671 00:32:30,040 --> 00:32:32,440 But we know that you just point out like housing's in big 672 00:32:32,440 --> 00:32:35,200 trouble. So I would say it makes sense if 673 00:32:35,200 --> 00:32:38,640 inflation's in a good place and jobs aren't really strengthening 674 00:32:39,120 --> 00:32:41,240 for cuts to happen, and that would be really dovish. 675 00:32:41,240 --> 00:32:43,960 So I think that sort of comes together before the end of the 676 00:32:43,960 --> 00:32:45,040 year. So there we have it. 677 00:32:45,040 --> 00:32:47,920 Tom Lee is once again bullish. We've seen it before, but he 678 00:32:47,920 --> 00:32:50,440 typically gets this right and I think he might be right once 679 00:32:50,440 --> 00:32:51,960 again. Now moving on, we have some big 680 00:32:51,960 --> 00:32:54,400 news for Amazon. They were officially invited to 681 00:32:54,400 --> 00:32:56,880 the party. They're part of the the big Boy 682 00:32:56,880 --> 00:32:59,440 club. Now they have an Open AI deal 683 00:32:59,440 --> 00:33:01,800 officially announced. Now, this one is actually a 684 00:33:01,800 --> 00:33:04,480 small deal, which is funny because Open AI announced a huge 685 00:33:04,480 --> 00:33:07,920 deal with Oracle, but they announced a small, a small deal 686 00:33:07,920 --> 00:33:10,000 with Amazon. But in any case, this is a 687 00:33:10,000 --> 00:33:13,760 positive, a positive sentiment announcement for Amazon. 688 00:33:13,840 --> 00:33:16,840 The stock is up 4.7%. And we look at the deal. 689 00:33:16,840 --> 00:33:21,240 It's a $38 billion multi year partnership to run and scale its 690 00:33:21,320 --> 00:33:24,840 AI workloads and Amazon Web Services, a move that investors 691 00:33:24,840 --> 00:33:28,400 read as a major win for AWS in the AI compute race. 692 00:33:28,440 --> 00:33:31,160 And AWS even previewed that this is going to happen. 693 00:33:31,160 --> 00:33:32,840 They gave you a little bit of a heads up. 694 00:33:32,840 --> 00:33:35,800 In fact, we have here, if you were paying attention, the 695 00:33:35,800 --> 00:33:39,120 earnings transcript summary from Qualtrim, where we highlighted 696 00:33:39,120 --> 00:33:43,360 that the backlog grew to 200 billion, not including several 697 00:33:43,360 --> 00:33:46,200 significant deals signed in October. 698 00:33:46,720 --> 00:33:48,600 What could those significant deals be? 699 00:33:48,800 --> 00:33:51,400 Well, it might have been this deal that they just announced. 700 00:33:51,560 --> 00:33:54,880 Here we have another massive deal that wasn't represented in 701 00:33:54,880 --> 00:33:58,960 this previous backlog number. I'm so bullish on Amazon and 702 00:33:58,960 --> 00:34:01,320 Google and Microsoft. I think these companies are such 703 00:34:01,320 --> 00:34:03,640 solid bets. I'm not selling a single share 704 00:34:03,640 --> 00:34:06,120 of the hyperscalers that I own and I don't think investors 705 00:34:06,120 --> 00:34:08,400 should. Now moving on, we get into the 706 00:34:08,480 --> 00:34:10,560 fail of the week. Here we have Brad Gerstner. 707 00:34:10,600 --> 00:34:13,000 And Brad Gerstner, somebody that I've liked for a long period of 708 00:34:13,000 --> 00:34:14,440 time. He's a tech investor. 709 00:34:14,639 --> 00:34:18,120 He is an investor in open AI, is a private company. 710 00:34:18,440 --> 00:34:22,679 So he's very bullish on open AI and he continually, and I would 711 00:34:22,679 --> 00:34:25,159 say I've been a little bit critical of this, but Brad 712 00:34:25,159 --> 00:34:29,679 Gerstner has continually shared the, the thought or the story 713 00:34:30,000 --> 00:34:34,199 that Open AI and Chachi BT is the new way that every kid is 714 00:34:34,199 --> 00:34:37,400 consuming information and Google's basically dead. 715 00:34:37,880 --> 00:34:42,320 Google's just an old stodgy 10 blue link economy company. 716 00:34:42,800 --> 00:34:45,560 And that narrative didn't turn out to be correct. 717 00:34:45,719 --> 00:34:48,199 Now, a lot of people shared in that thought process as well, 718 00:34:48,440 --> 00:34:51,520 but Brad Gerstner was invested in the company competing with 719 00:34:51,520 --> 00:34:53,400 Google. Now it's, it's known that 720 00:34:53,400 --> 00:34:55,480 Google's all right. They're not just a 10 blue link 721 00:34:55,480 --> 00:34:57,120 company. There's a lot more going on to 722 00:34:57,120 --> 00:34:58,960 it. So I've been a little critical 723 00:34:58,960 --> 00:35:00,280 of Brad Gerstner because of that. 724 00:35:00,280 --> 00:35:03,040 But overall, I really like them. That's a minor disagreement. 725 00:35:03,640 --> 00:35:07,000 And here we have Brad Gerstner, who again is a huge promoter, 726 00:35:07,040 --> 00:35:12,000 advocate, investor in Open AI, and he's talking to Sam Altman. 727 00:35:12,560 --> 00:35:16,400 And listen to the way that Sam Altman responds to a simple 728 00:35:16,400 --> 00:35:19,320 light question. So Brad Gerstner is about to 729 00:35:19,320 --> 00:35:23,040 give a a little question, a slight criticism to Open AI just 730 00:35:23,040 --> 00:35:25,560 to ask if they can really fulfill on the deals they're 731 00:35:25,560 --> 00:35:28,640 making a very reasonable, simple question. 732 00:35:28,920 --> 00:35:31,200 Listen to how Sam Altman responds. 733 00:35:31,560 --> 00:35:35,040 Hanging over the market is how you know, how can the company 734 00:35:35,040 --> 00:35:40,080 with 13 billion in revenues make 1.4 trillion of spend 735 00:35:40,080 --> 00:35:42,600 commitments. You know, and, and, and you've 736 00:35:42,600 --> 00:35:45,480 heard the criticism saying we're doing well more revenue than 737 00:35:45,480 --> 00:35:47,520 that. Second of all, Brad, if you want 738 00:35:47,520 --> 00:35:49,000 to sell your shares, I'll find you a buyer. 739 00:35:50,960 --> 00:35:55,120 I just enough like, you know, people are, I, I think there's a 740 00:35:55,120 --> 00:35:57,400 lot of people who would love to buy open air shares. 741 00:35:57,440 --> 00:36:00,280 I don't, I don't think you want including myself, including 742 00:36:00,280 --> 00:36:04,480 myself who talk with a lot of like breathless concern about 743 00:36:04,480 --> 00:36:07,040 it. So here we have Brad Gerstner 744 00:36:07,040 --> 00:36:10,400 saying, you know, you're, there's reportedly like $12 745 00:36:10,400 --> 00:36:13,800 billion in revenue. How do you fulfill on $600 746 00:36:13,800 --> 00:36:16,040 billion of spend commitments, right? 747 00:36:16,520 --> 00:36:19,120 He's just talking about the gap between the revenue Open AI 748 00:36:19,120 --> 00:36:23,360 earns today and the gaps in the the big headline commitments. 749 00:36:23,360 --> 00:36:26,080 They're making a totally reasonable question. 750 00:36:26,600 --> 00:36:30,160 The way that Sam Altman responds to it is he's indignant 751 00:36:30,960 --> 00:36:33,600 immediately saying, Brad, we make way more than that. 752 00:36:33,600 --> 00:36:36,040 And if you want to sell your shares, I can find buyers for 753 00:36:36,040 --> 00:36:37,280 him. You want you want to sell your 754 00:36:37,280 --> 00:36:39,520 shares, Brad, go ahead. You can sell your shares. 755 00:36:40,040 --> 00:36:43,760 This guy is a cheerleader for your company, a huge advocate 756 00:36:43,960 --> 00:36:46,920 all day long on social media. He's talking about open AI and 757 00:36:46,920 --> 00:36:48,920 negatively talking about your competitor, Google. 758 00:36:49,320 --> 00:36:52,680 And here he is with one simple, totally reasonable question, 759 00:36:53,160 --> 00:36:57,000 telling Brad, if you have any, any criticisms whatsoever, any 760 00:36:57,000 --> 00:36:59,760 questions whatsoever for me, just get out of the stock. 761 00:36:59,960 --> 00:37:02,640 I'll, I'll find you a new buyer. Brad, why question me? 762 00:37:02,760 --> 00:37:06,360 I'm Sam Altman, why question me? I'd rather you just get out of 763 00:37:06,360 --> 00:37:07,640 the stock if you have any questions. 764 00:37:08,480 --> 00:37:10,400 OK, well, and this is just part of it. 765 00:37:10,400 --> 00:37:13,760 We'll continue on with this. Our compute stuff or whatever 766 00:37:14,000 --> 00:37:16,680 that would be thrilled to buy shares so I think we we could 767 00:37:16,680 --> 00:37:18,920 sell you know your shares or anybody else's to some of the 768 00:37:18,920 --> 00:37:21,080 people who are making the most noise on Twitter whatever about 769 00:37:21,080 --> 00:37:23,720 this very. Brad never said he wanted to 770 00:37:23,720 --> 00:37:25,600 sell shares. What? 771 00:37:25,600 --> 00:37:30,000 Why is Sam Altman, why is he yapping on about how we can find 772 00:37:30,000 --> 00:37:33,000 you a new buyer for your shares, Brad, when he never said he 773 00:37:33,000 --> 00:37:36,560 wanted to sell his shares? He had a small question that was 774 00:37:36,560 --> 00:37:39,040 a reasonable question. Well, I can tell you why I'll 775 00:37:39,040 --> 00:37:40,960 answer. I'll answer why Sam Altman does 776 00:37:40,960 --> 00:37:42,640 this in just a minute. Twitter, whatever about this 777 00:37:42,640 --> 00:37:46,200 very quickly, we do plan for revenue to grow steeply. 778 00:37:46,200 --> 00:37:49,040 Revenue is growing steeply. We are taking a forward bet that 779 00:37:49,040 --> 00:37:53,120 it's going to continue to grow and that not only will chat to 780 00:37:53,120 --> 00:37:56,320 BT keep growing, but we will be able to become one of the 781 00:37:56,320 --> 00:37:59,000 important AI clouds. That our consumer device 782 00:37:59,000 --> 00:38:02,680 business will be a significant and important thing. 783 00:38:02,680 --> 00:38:06,480 That AI that can automate science will create huge value. 784 00:38:06,800 --> 00:38:11,720 So, you know, there are not many times that I want to be a public 785 00:38:11,720 --> 00:38:14,440 company, but one of the rare what times it's appealing is 786 00:38:14,440 --> 00:38:16,640 when those people are writing these ridiculous open the eyes 787 00:38:16,640 --> 00:38:18,600 about to go out of business and you know, whatever. 788 00:38:18,920 --> 00:38:21,040 I would love to tell them they could just short the stock and I 789 00:38:21,040 --> 00:38:22,520 would love to see them get burned on that. 790 00:38:23,280 --> 00:38:27,920 There we have it. So in summary, an investor 791 00:38:27,920 --> 00:38:31,560 that's been a huge advocate complimenting Sam Altman in his 792 00:38:31,560 --> 00:38:34,520 leadership, putting open the eyes one of his prized 793 00:38:34,520 --> 00:38:37,400 investments that he hasn't privately over and over again on 794 00:38:37,400 --> 00:38:41,720 Twitter ask Sam Altman, the executive running the company 795 00:38:41,720 --> 00:38:44,120 that he's the owner of. Now, keep in mind, Sam Altman 796 00:38:44,120 --> 00:38:45,680 doesn't own a lot of shares of Open AI. 797 00:38:45,960 --> 00:38:48,000 That's the way it's structured. Brad Gerstner does. 798 00:38:48,160 --> 00:38:50,800 So Brad Gerstner is like an an owner of this asking an 799 00:38:50,800 --> 00:38:54,520 executive a question that's a very realistic, reasonable 800 00:38:54,520 --> 00:38:57,440 question. And Sam Altman responds by 801 00:38:57,440 --> 00:39:01,040 attacking that investor, telling them we don't need you and if 802 00:39:01,040 --> 00:39:03,360 you'd like to sell your shares, I'll find another buyer. 803 00:39:03,960 --> 00:39:06,800 This is the the weakest response. 804 00:39:07,080 --> 00:39:09,840 And by the way, this is more general than just this here, but 805 00:39:09,840 --> 00:39:12,440 if your immediate response, anytime someone lightly 806 00:39:12,440 --> 00:39:16,040 criticizes a stock that you own, if your immediate gut reaction 807 00:39:16,040 --> 00:39:18,680 is to say, well, short it, just short the stock. 808 00:39:19,160 --> 00:39:21,280 Like if, if you're so confident, if, if you don't like it, if 809 00:39:21,280 --> 00:39:24,400 you're questioning this thing, then just short it that is. 810 00:39:24,400 --> 00:39:27,080 That is the weakest response you can give. 811 00:39:27,120 --> 00:39:30,080 And there's a bunch of reasons why you may not believe a stock 812 00:39:30,080 --> 00:39:33,280 is the best investment. You may have some criticisms for 813 00:39:33,280 --> 00:39:35,880 it, but it's still not a good idea to short it. 814 00:39:36,280 --> 00:39:40,320 One of them being that companies can run up far past what their 815 00:39:40,320 --> 00:39:43,720 fundamentals would warrant. Bubbles can last for a long 816 00:39:43,720 --> 00:39:46,400 period of time. The market can remain irrational 817 00:39:46,400 --> 00:39:48,560 much longer than you can remain solvent. 818 00:39:48,840 --> 00:39:51,600 When you short a stock, you can't just be correct. 819 00:39:51,800 --> 00:39:53,480 You have to be correct right away. 820 00:39:53,600 --> 00:39:56,800 You have to time the market. You have to time human behavior. 821 00:39:57,240 --> 00:39:59,240 That's nearly an impossible task. 822 00:39:59,640 --> 00:40:03,800 So Sam Altman wanting to to say he he wants his company to be 823 00:40:03,800 --> 00:40:06,520 public just to have the right to say. 824 00:40:07,040 --> 00:40:10,200 If anybody has a criticism for open AI, just short the stock. 825 00:40:10,480 --> 00:40:12,440 Just short it. And it's ironic that he's not 826 00:40:12,440 --> 00:40:14,960 even public, so he can't say that, but he's complaining that 827 00:40:14,960 --> 00:40:16,880 that's what he would say if he was public. 828 00:40:17,320 --> 00:40:21,240 But in any case, that would be a ridiculously weak response if 829 00:40:21,240 --> 00:40:24,800 you were a public company. By asking people to short the 830 00:40:24,800 --> 00:40:28,240 stock, you are discrediting their valid criticisms and their 831 00:40:28,240 --> 00:40:30,240 valid questions. You're saying that those 832 00:40:30,240 --> 00:40:32,240 questions aren't valid. I'm not going to answer them. 833 00:40:32,320 --> 00:40:35,120 If you have any criticisms whatsoever, just short the 834 00:40:35,120 --> 00:40:37,000 stock. So I think we need a, we need to 835 00:40:37,000 --> 00:40:39,000 stop this act. And I think it's more than just 836 00:40:39,000 --> 00:40:41,000 Sam Altman, but especially him in this case. 837 00:40:41,320 --> 00:40:43,680 We need to stop this act. If if anybody has a question 838 00:40:43,680 --> 00:40:47,200 about a stock, immediately defensively becoming indignant 839 00:40:47,520 --> 00:40:50,680 and challenging them to short the stock, it is the weakest 840 00:40:50,680 --> 00:40:53,440 response you can give. Anytime somebody does that, 841 00:40:53,440 --> 00:40:56,520 they're not operating in good faith and it's more of a defense 842 00:40:56,640 --> 00:40:58,280 mechanism. It's more of a reflection on 843 00:40:58,280 --> 00:41:00,240 yourself than the person asking the questions. 844 00:41:00,600 --> 00:41:03,960 Sam Altman could have responded kindly to one of his favorite 845 00:41:04,240 --> 00:41:07,760 one of the the best investors in open AI, one of the most notable 846 00:41:07,760 --> 00:41:09,800 ones in the company. He could have explained how it's 847 00:41:09,800 --> 00:41:12,560 a minor misunderstanding about the company's financials. 848 00:41:12,560 --> 00:41:15,280 It happens all the time with private companies and they're on 849 00:41:15,280 --> 00:41:18,240 a healthy path to profitability. But instead he chose to answer 850 00:41:18,240 --> 00:41:21,640 it rudely, defensively, with indignation against one of his 851 00:41:21,640 --> 00:41:24,800 own advocates, one of his own investors, someone that's on his 852 00:41:24,800 --> 00:41:28,240 side, he treated this way, and at the same time revealing that 853 00:41:28,240 --> 00:41:31,640 these articles showing that open AI has a lot of obligations get 854 00:41:31,640 --> 00:41:34,080 to him. It also is a weak point. 855 00:41:34,080 --> 00:41:37,760 It's something that he feels a real criticism that he doesn't 856 00:41:37,760 --> 00:41:41,720 like hearing, so he attacks anyone that even mentions this 857 00:41:41,720 --> 00:41:44,520 news. This is not the way an executive 858 00:41:44,520 --> 00:41:47,000 of a company should be answering questions of their own 859 00:41:47,000 --> 00:41:49,320 shareholders. For that reason, this is the 860 00:41:49,320 --> 00:41:51,440 fail of the week. That's all for this episode. 861 00:41:51,440 --> 00:41:53,160 Hope you enjoyed. See you in the next one.