1 00:00:00,040 --> 00:00:04,640 ASML just reported earnings and the stock is down 10% on the day 2 00:00:04,920 --> 00:00:09,560 it went from $800 to 743. And we have some of the early 3 00:00:09,560 --> 00:00:12,680 news reports reading into this earnings report, one of them 4 00:00:12,680 --> 00:00:16,200 from fast companies saying that ASML stock price is dropping 5 00:00:16,200 --> 00:00:19,800 today after the semiconductor giant issued a critical warning 6 00:00:20,000 --> 00:00:23,680 about 2026. A critical warning that sounds 7 00:00:23,680 --> 00:00:25,720 really bad. What critical warning did they 8 00:00:25,720 --> 00:00:27,680 issue? We have Barron saying the ASML 9 00:00:27,680 --> 00:00:30,560 stock tumbles after growth warnings and earnings report 10 00:00:30,920 --> 00:00:33,560 tariffs are biting. That's right, according to 11 00:00:33,560 --> 00:00:36,600 Barron's, the tariffs are taking a bite out of ASML. 12 00:00:37,160 --> 00:00:40,920 Then we have Bloomberg saying that ASML falls most since April 13 00:00:40,920 --> 00:00:43,480 after CEO walks back growth forecast. 14 00:00:43,480 --> 00:00:46,360 These articles don't paint a pretty picture about what just 15 00:00:46,360 --> 00:00:49,080 happened to ASML. With the stock being down 10%, 16 00:00:49,080 --> 00:00:51,960 it's reasonable to ask what happened, What were these 17 00:00:51,960 --> 00:00:54,440 critical warnings? What was so bad in this report, 18 00:00:54,680 --> 00:00:56,440 deserving of it to drop this much? 19 00:00:56,440 --> 00:00:58,640 We're going to be going over it in this episode. 20 00:00:58,640 --> 00:00:59,880 Now, of course, we have other news. 21 00:00:59,880 --> 00:01:02,760 The banks reported earnings, like JP Morgan Chase and Goldman 22 00:01:02,760 --> 00:01:04,879 Sachs. President Trump is looking to 23 00:01:04,879 --> 00:01:07,400 maybe fire Jerome Powell, the Fed chair. 24 00:01:07,640 --> 00:01:10,000 Can he even do that? Is he capable of doing that? 25 00:01:10,280 --> 00:01:13,560 And how would the market react? And we have more news on 26 00:01:13,560 --> 00:01:16,320 Amazon's Project Kuyper, their Internet satellite. 27 00:01:16,720 --> 00:01:19,280 They have plans to launch this by the end of this year. 28 00:01:19,440 --> 00:01:21,040 We'll be looking at the details as well. 29 00:01:21,040 --> 00:01:23,560 Now, I start things off by talking about this huge drop in 30 00:01:23,560 --> 00:01:26,160 ASML. The stock is currently down 10% 31 00:01:26,160 --> 00:01:27,520 from where it was just yesterday. 32 00:01:27,520 --> 00:01:30,880 And that is a notable drop for a stock that already seems like 33 00:01:30,880 --> 00:01:33,800 it's at a decent valuation. It's also a very high quality 34 00:01:33,800 --> 00:01:36,320 company. This isn't some meme coin. 35 00:01:36,640 --> 00:01:40,240 ASML is not some small cap, highly speculative company. 36 00:01:40,560 --> 00:01:43,200 This is, after all, one of the companies creating the backbone 37 00:01:43,560 --> 00:01:46,920 of innovation on the front of creating AI chips. 38 00:01:47,280 --> 00:01:51,320 So ASML is a highly profitable, dominant company with a very 39 00:01:51,320 --> 00:01:54,000 wide Moat. It has technological supremacy 40 00:01:54,000 --> 00:01:56,920 over its peers. And yet it's down 10% today. 41 00:01:57,200 --> 00:02:00,360 And these news headlines make it seem like things aren't so good, 42 00:02:00,360 --> 00:02:02,200 like we have something to be concerned about here. 43 00:02:02,720 --> 00:02:06,240 Now, I must start off by saying, even before we go into some of 44 00:02:06,240 --> 00:02:09,560 the details, that I am a proud shareholder of ASML. 45 00:02:09,800 --> 00:02:12,200 I really like the company. I like what they're doing out 46 00:02:12,200 --> 00:02:15,080 there. The the science behind this, the 47 00:02:15,080 --> 00:02:17,240 technology behind it is incredible. 48 00:02:17,400 --> 00:02:20,480 ASML has created something that's so incredibly difficult 49 00:02:20,840 --> 00:02:25,760 to replicate that even huge nations funded by their state 50 00:02:26,000 --> 00:02:28,920 can't figure it out. Nations like China are lagging 51 00:02:28,920 --> 00:02:33,040 behind ASM, LS technology. Now, right now, I do have a 52 00:02:33,040 --> 00:02:36,920 position in ASML that's around $49,700. 53 00:02:36,960 --> 00:02:40,600 Currently I'm in the green by a sliver by only $2000. 54 00:02:40,960 --> 00:02:42,840 So we're barely in the green on this one. 55 00:02:43,080 --> 00:02:48,000 If I look at the one day just today, we're down $5100.00. 56 00:02:48,400 --> 00:02:51,320 So a big red day on the day. And of course that's because of 57 00:02:51,320 --> 00:02:53,200 this drop due to this earnings report. 58 00:02:53,840 --> 00:02:58,080 Now as we look at ASML, when I look at a drop like this after 59 00:02:58,080 --> 00:03:01,960 earnings, I've seen this so many times through so many holdings 60 00:03:01,960 --> 00:03:05,800 that I've held that it doesn't faze me quite as much as as it 61 00:03:05,800 --> 00:03:07,960 used to. You know, when you're first 62 00:03:07,960 --> 00:03:10,680 investing and you see a 10% drop, you think it's a really 63 00:03:10,680 --> 00:03:13,200 big deal. But once you've invested for 64 00:03:13,200 --> 00:03:16,760 five or six years, you followed companies quarter after quarter, 65 00:03:17,080 --> 00:03:18,800 you realize that this is not unusual. 66 00:03:19,000 --> 00:03:21,440 It's really not. If you've been invested in 67 00:03:21,440 --> 00:03:25,040 Netflix for any period of time, you're expecting the stock to 68 00:03:25,040 --> 00:03:27,960 either go up 10% or down 10%. It's going to be one of them and 69 00:03:28,240 --> 00:03:30,920 it's basically a coin flip. You can never really guess 70 00:03:30,920 --> 00:03:33,200 what's going to happen and that's the reason why you're 71 00:03:33,200 --> 00:03:36,400 always told to be a long term investor, to not play quarters 72 00:03:36,680 --> 00:03:40,480 because investing quarter to quarter is highly unpredictable 73 00:03:40,640 --> 00:03:42,960 and will lead you to making bad bets and losing money. 74 00:03:42,960 --> 00:03:46,200 Now, generally speaking, stocks trade based off of two different 75 00:03:46,200 --> 00:03:47,640 things. They trade off of the 76 00:03:47,640 --> 00:03:50,680 fundamentals, the earnings report, having the revenue, the 77 00:03:50,680 --> 00:03:54,760 operating margins, the free cash flow, the KP is the units sold, 78 00:03:54,920 --> 00:03:57,720 so on and so forth. All the things you're seeing are 79 00:03:57,720 --> 00:04:00,280 the fundamentals of the company. But then beyond the 80 00:04:00,280 --> 00:04:03,160 fundamentals, you have another important aspect of every stock, 81 00:04:03,400 --> 00:04:06,520 which is the narrative. The narrative is the prevailing 82 00:04:06,520 --> 00:04:09,640 sentiment on the stock. Whether investors are very hyped 83 00:04:09,640 --> 00:04:12,080 about it, they're excited about it, the future is really bright, 84 00:04:12,520 --> 00:04:15,320 or whether they're looking at it with a bit of concern, a bit of 85 00:04:15,320 --> 00:04:18,760 skepticism, they don't quite believe the bright future of the 86 00:04:18,760 --> 00:04:21,040 stock. That is the narrative and the 87 00:04:21,040 --> 00:04:23,280 combination of those two things, the marriage of those two 88 00:04:23,280 --> 00:04:25,560 things, is the overall story of a stock. 89 00:04:25,960 --> 00:04:29,000 A story is how you believe the narrative and the fundamentals 90 00:04:29,000 --> 00:04:30,920 will play out over long periods of time. 91 00:04:31,280 --> 00:04:35,400 With a company like Netflix or Amazon, I have a a good story 92 00:04:35,400 --> 00:04:37,880 that I've created for these stocks over a long time period. 93 00:04:38,240 --> 00:04:39,640 I think they'll be very prosperous. 94 00:04:39,640 --> 00:04:41,960 I think they'll have great fundamentals and there's a good 95 00:04:41,960 --> 00:04:46,120 narrative behind the companies. So with ASML, there's two 96 00:04:46,120 --> 00:04:48,560 different things that could have gone wrong with this earnings 97 00:04:48,560 --> 00:04:50,560 report. Either the fundamentals were 98 00:04:50,560 --> 00:04:53,400 disappointing and the stock did not perform up to its 99 00:04:53,400 --> 00:04:55,800 expectations. It didn't grow revenue fast 100 00:04:55,800 --> 00:04:57,720 enough. It didn't grow operating margins 101 00:04:57,760 --> 00:05:00,200 high enough. It didn't sell enough machines 102 00:05:00,640 --> 00:05:03,600 either that went wrong or investors have changed their 103 00:05:03,600 --> 00:05:06,280 narrative on the company. And with this reaction, it's 104 00:05:06,280 --> 00:05:08,880 firmly A narrative issue. If we look at the financial 105 00:05:08,880 --> 00:05:12,080 results they just posted for Q2 of this year, just the past 106 00:05:12,080 --> 00:05:14,760 three months, and we check in on how this company's actually 107 00:05:14,760 --> 00:05:17,720 doing, it's very strong. We can look at it highlighted 108 00:05:17,720 --> 00:05:20,160 here by Qualtrim. Summarizing the earnings report, 109 00:05:20,720 --> 00:05:24,800 total net sales was 7.7 billion, the upper end of guidance. 110 00:05:25,200 --> 00:05:27,640 So they hit the high end of their guidance in revenue and by 111 00:05:27,640 --> 00:05:31,040 the way, they beat the revenue expectations boosted by high NA 112 00:05:31,040 --> 00:05:34,000 system revenue and strong upgrades in business. 113 00:05:34,360 --> 00:05:39,640 Net system sales were €5.6 billion driven by 69% logic and 114 00:05:39,640 --> 00:05:41,680 31% memory. Install. 115 00:05:41,680 --> 00:05:45,160 Base management sales exceeded guidance 2.1 billion. 116 00:05:45,640 --> 00:05:49,280 So out of their three revenue segments, which if we look at 117 00:05:49,280 --> 00:05:52,320 FML Heron, Qualtrum, we have these broken down into segments. 118 00:05:53,080 --> 00:05:55,440 They have three major segments, which is the install base. 119 00:05:55,440 --> 00:05:57,840 This is like a subscription type of revenue because it's so 120 00:05:57,840 --> 00:06:00,560 reoccurring. We have logic and we have 121 00:06:00,560 --> 00:06:03,040 memory. Out of these three, two of them 122 00:06:03,040 --> 00:06:05,880 are at the very high end of their guidance and one of them 123 00:06:05,880 --> 00:06:08,840 was within guidance. So overall, they beat on their 124 00:06:08,840 --> 00:06:12,400 revenue and two of the three are doing incredibly well. 125 00:06:12,840 --> 00:06:15,920 This doesn't look bad. There's nothing concerning about 126 00:06:15,920 --> 00:06:17,400 the revenue growth of the company. 127 00:06:17,880 --> 00:06:20,040 And by the way, the revenue growth of a company is a really 128 00:06:20,040 --> 00:06:22,520 big deal. That's one of the major things 129 00:06:22,520 --> 00:06:25,520 we're looking at is how fast the company's growing top line and 130 00:06:25,520 --> 00:06:28,000 overall revenue growth is above 15%. 131 00:06:28,280 --> 00:06:30,960 This company's growing quickly and this last report showed 132 00:06:30,960 --> 00:06:32,480 that. We look at some of the other 133 00:06:32,480 --> 00:06:36,560 financial highlights. Gross margins were 53.7%, again, 134 00:06:36,560 --> 00:06:38,080 above guidance. We're getting a lot of these 135 00:06:38,080 --> 00:06:40,120 things that are at the top end of guidance. 136 00:06:40,120 --> 00:06:42,520 Above guidance. Operating expenses were on 137 00:06:42,520 --> 00:06:45,720 track. R&D of 1.2 billion, you have SG 138 00:06:45,720 --> 00:06:49,280 and A at 299 million. We have net income of 2.3 139 00:06:49,280 --> 00:06:51,440 billion with earnings per share of 5.9. 140 00:06:51,640 --> 00:06:53,600 They beat their earnings per share estimates as well. 141 00:06:53,960 --> 00:06:57,640 They ended the quarter with $7.2 billion in cash. 142 00:06:57,760 --> 00:06:59,760 Now if we look at this information in this recent 143 00:06:59,760 --> 00:07:02,840 report from an ownership perspective, we look at it as 144 00:07:02,840 --> 00:07:05,440 having a vested interest in this business over a longer time 145 00:07:05,440 --> 00:07:07,240 period. That doesn't look bad. 146 00:07:07,240 --> 00:07:10,520 In fact, I would say quite objectively that looked really 147 00:07:10,520 --> 00:07:12,240 good. The report across the board just 148 00:07:12,240 --> 00:07:15,160 seems like business as usual. In fact, business may be doing a 149 00:07:15,160 --> 00:07:17,640 little bit better than usual. Then we look at their capital 150 00:07:17,640 --> 00:07:20,840 return policy. This is the CFO and the CEO 151 00:07:20,840 --> 00:07:24,240 making decisions on where to invest, where to reinvest their 152 00:07:24,240 --> 00:07:27,400 capital and especially how to provide capital back to the 153 00:07:27,400 --> 00:07:29,840 shareholder. We have dividends and buybacks. 154 00:07:29,920 --> 00:07:33,160 They paid a dividend of $1.84 per share in Q2. 155 00:07:33,560 --> 00:07:39,280 The interim dividend in 2025 was $1.60 and we have Q2 share 156 00:07:39,280 --> 00:07:42,560 buybacks that totaled €1.4 billion. 157 00:07:42,680 --> 00:07:45,120 So we have some numbers of the dividends and buybacks they paid 158 00:07:45,120 --> 00:07:48,240 last quarter and we can put that in context with the return of 159 00:07:48,240 --> 00:07:51,120 capital chart. Return of capital means the 160 00:07:51,120 --> 00:07:54,160 amount of capital money that they're returning back to you, 161 00:07:54,160 --> 00:07:56,160 the shareholder. And we illustrate this through 162 00:07:56,160 --> 00:07:58,800 dividends and buybacks. The dividends are in purple, the 163 00:07:58,800 --> 00:08:00,840 buybacks are in that nice tan color. 164 00:08:01,280 --> 00:08:03,840 Now, if I filter this by the past five years, now if we look 165 00:08:03,840 --> 00:08:07,120 at just the buybacks and we want to compare this compared to Q1 166 00:08:07,120 --> 00:08:11,600 of 2025, we have the buybacks here, which is $3.01 billion in 167 00:08:11,600 --> 00:08:13,600 USD. If we look at this just in the 168 00:08:13,600 --> 00:08:19,360 euro was 2.6 billion, so 2.6. They did 1.4 this quarter right 169 00:08:19,360 --> 00:08:21,000 around there. That's where the new chart will 170 00:08:21,000 --> 00:08:22,720 show. So they're still doing buybacks 171 00:08:22,720 --> 00:08:27,320 aggressively more than they did basically all of 2023 and 2024. 172 00:08:27,560 --> 00:08:29,840 And they're doing that because they have a big cash balance. 173 00:08:29,840 --> 00:08:32,600 Now if we bring up their cash pile, they said that they ended 174 00:08:32,600 --> 00:08:37,360 the quarter with €7.2 billion. Now we translate the steros 175 00:08:37,360 --> 00:08:43,720 here, we have 9.1 in Q1, so 9.1 they will have right about here 176 00:08:44,200 --> 00:08:46,800 in Q2. So the cash balance still went 177 00:08:46,800 --> 00:08:49,320 down a step, but it has a lot further to go. 178 00:08:49,640 --> 00:08:52,960 They can do another massive quarter of buybacks, another one 179 00:08:52,960 --> 00:08:54,760 to $2 billion of buying back shares. 180 00:08:55,040 --> 00:08:56,960 That'll bring them back down to around here. 181 00:08:57,240 --> 00:08:59,320 And that's assuming that their cash balance doesn't increase 182 00:08:59,320 --> 00:09:02,680 because of new inflows of money. So as they're chunking away at 183 00:09:02,680 --> 00:09:05,400 their balance sheet, doing aggressive buybacks every 184 00:09:05,400 --> 00:09:07,600 quarter, they're lowering their cash balance. 185 00:09:07,640 --> 00:09:09,640 And they're intentionally doing this over time. 186 00:09:10,040 --> 00:09:12,520 So if the stock drops at all, they can buy the dip like they 187 00:09:12,520 --> 00:09:14,760 are right now. I'm sure that ASML is doing 188 00:09:14,760 --> 00:09:18,200 aggressive buybacks today. Now they'll be able to do this 189 00:09:18,200 --> 00:09:21,240 again until the end of the year, and eventually they'll have 190 00:09:21,240 --> 00:09:22,800 another big year of free cash flow. 191 00:09:23,080 --> 00:09:25,920 When the free cash flow does spike like we've seen in recent 192 00:09:25,920 --> 00:09:30,520 quarters, We saw in Q4 of 2024 that they gained $10.2 billion 193 00:09:30,520 --> 00:09:32,760 in free cash flow. When you have a big quarter like 194 00:09:32,760 --> 00:09:34,880 that, your cash balance also spikes up. 195 00:09:35,120 --> 00:09:37,080 That's why it went up so much in that same quarter. 196 00:09:37,440 --> 00:09:40,800 So as they use this giant stockpile of cash to buy back 197 00:09:40,800 --> 00:09:43,280 shares, the cash balance will continually go down. 198 00:09:43,560 --> 00:09:46,520 Then it will be restocked after the new year, and then they'll 199 00:09:46,520 --> 00:09:48,800 be able to do it all over again. Now, so far, when looking at 200 00:09:48,800 --> 00:09:51,440 these numbers, the fundamentals of the company, looking at the 201 00:09:51,440 --> 00:09:54,600 revenue growth, the operating margins, the systems sold, the 202 00:09:54,600 --> 00:09:57,640 progress they're making overall and their capital allocation, 203 00:09:57,840 --> 00:09:59,960 how they're buying back shares, returning money to the 204 00:09:59,960 --> 00:10:03,200 shareholder through both dividends and share buybacks, I 205 00:10:03,200 --> 00:10:04,920 don't see anything that's too concerning. 206 00:10:05,160 --> 00:10:07,160 Certainly nothing that makes me want to run out and sell the 207 00:10:07,160 --> 00:10:09,440 company. Nothing that I believe so far 208 00:10:09,680 --> 00:10:12,600 warrants a 10% down day, but that's because it's not in the 209 00:10:12,600 --> 00:10:14,520 fundamentals. Remember, this is a narrative 210 00:10:14,520 --> 00:10:17,760 issue where we get to the problems that ASML ran into. 211 00:10:18,200 --> 00:10:21,320 It was specifically from a statement from the CEO. 212 00:10:21,640 --> 00:10:24,200 This was given on the earnings call and I'll go through and 213 00:10:24,200 --> 00:10:27,080 read his direct remarks. The CEO mentions the top line 214 00:10:27,080 --> 00:10:30,400 growth, all the revenue they're gaining, the gross margins being 215 00:10:30,400 --> 00:10:33,000 above guidance. He also mentions some of the 216 00:10:33,000 --> 00:10:34,800 advancements they're making in the technology. 217 00:10:35,120 --> 00:10:36,880 But then we get to the statements that are future 218 00:10:36,880 --> 00:10:40,320 looking. Quote, looking at 2026, we see 219 00:10:40,320 --> 00:10:43,200 that our AI customers fundamentals remain strong. 220 00:10:43,640 --> 00:10:47,240 At the same time, we continue to see increasing uncertainty 221 00:10:47,240 --> 00:10:50,240 driven by macroeconomic and geopolitical developments. 222 00:10:50,280 --> 00:10:54,320 Therefore, while we still prepare for growth in 2026, we 223 00:10:54,320 --> 00:10:57,760 cannot confirm it at this stage. That last sentence there, 224 00:10:57,760 --> 00:11:00,800 especially that last part of the sentence is the reason the stock 225 00:11:00,800 --> 00:11:04,680 is down 10% today. The CEO commented on macro 226 00:11:04,680 --> 00:11:08,680 uncertainties, increasing unpredictability in this market, 227 00:11:09,160 --> 00:11:12,200 saying that even though they're preparing for growth in 2026, 228 00:11:12,200 --> 00:11:14,720 they can't guarantee it, they can't confirm it. 229 00:11:14,720 --> 00:11:17,680 At this stage, the CEO is basically hedging his bet. 230 00:11:17,680 --> 00:11:19,920 He's giving a little bit more room, a little bit of margin of 231 00:11:19,920 --> 00:11:23,360 error, of downside probabilities due to macro uncertainties. 232 00:11:23,800 --> 00:11:25,600 Now, what macro uncertainties exist? 233 00:11:25,800 --> 00:11:28,480 Well, just in the past week, we've had Trump intensify the 234 00:11:28,480 --> 00:11:33,320 trade war with threats of a 30% tariff on the EU where ASML 235 00:11:33,320 --> 00:11:35,880 resides. Now, we don't know how that will 236 00:11:35,880 --> 00:11:39,800 really affect ASML, how long those tariffs will be in place 237 00:11:39,800 --> 00:11:42,400 or even if they're going to be in place at all, how severely it 238 00:11:42,400 --> 00:11:45,040 will be or if it will be amped up or taken down. 239 00:11:45,040 --> 00:11:48,240 And this is precisely why the CEO of ASML is a little bit 240 00:11:48,240 --> 00:11:51,080 uncertain about next year. He's probably looking at the 241 00:11:51,080 --> 00:11:54,440 headline saying that this is an uncertainty, it's a risk factor 242 00:11:54,440 --> 00:11:57,120 for the company. And a CE OS job is to not only 243 00:11:57,120 --> 00:11:59,920 outline a bright future and direction for a company, but 244 00:11:59,920 --> 00:12:02,680 also to warn investors about probabilities, about different 245 00:12:02,680 --> 00:12:05,520 risk factors to the company. And this is certainly one that 246 00:12:05,520 --> 00:12:07,840 he's warning about. Now, if we actually look at the 247 00:12:07,840 --> 00:12:11,480 wording, does the CEO of ASML say there's going to be no 248 00:12:11,480 --> 00:12:14,440 growth in 2026, we're not going to make any gains, There's going 249 00:12:14,440 --> 00:12:16,120 to be no revenue growth or earnings growth? 250 00:12:16,640 --> 00:12:19,360 No, he never says that. In fact, quite the opposite. 251 00:12:19,720 --> 00:12:24,120 He says we're still preparing for growth in 2026. 252 00:12:24,680 --> 00:12:27,760 We're still preparing for it, but because of specific 253 00:12:27,760 --> 00:12:32,000 geopolitical developments and uncertainties, we can't confirm 254 00:12:32,000 --> 00:12:34,840 it at this stage. We don't know for certain. 255 00:12:34,840 --> 00:12:38,240 This is a very soft warning about the potentials that could 256 00:12:38,240 --> 00:12:41,640 happen if there's some ongoing massive trade dispute. 257 00:12:42,000 --> 00:12:44,520 And you have to look at it from the perspective of ASML. 258 00:12:44,640 --> 00:12:47,080 They're not AUS company. They have many clients that 259 00:12:47,080 --> 00:12:50,400 aren't US either, but they're in the mix of selling their devices 260 00:12:50,400 --> 00:12:52,920 to almost everyone. They want a device that every 261 00:12:52,920 --> 00:12:55,760 country wants a piece of, so they're trying to sell to 262 00:12:55,760 --> 00:12:57,520 everyone. And meanwhile, you have 263 00:12:57,520 --> 00:12:59,760 President Trump, who is very brash. 264 00:12:59,760 --> 00:13:03,440 He has very aggressive negotiating tactics. the US is a 265 00:13:03,440 --> 00:13:06,600 gigantic country. It's just massive economically 266 00:13:06,600 --> 00:13:10,040 and just overall a massive country saying that we're going 267 00:13:10,040 --> 00:13:12,920 to put these big tariffs on Europe, we're going to cause all 268 00:13:12,920 --> 00:13:14,960 these restrictions, we're going to go toe to toe with them. 269 00:13:15,120 --> 00:13:16,240 We're going to do all these things. 270 00:13:16,720 --> 00:13:18,640 And that creates a little bit of uncertainty. 271 00:13:18,680 --> 00:13:21,160 We can look further at the earnings report and the actual 272 00:13:21,160 --> 00:13:24,040 commentary by the CEO, the summary from Qualtrum on the 273 00:13:24,040 --> 00:13:26,120 topic of geopolitical and tariff risks. 274 00:13:26,520 --> 00:13:30,400 It says ongoing trade disputes and tariffs create direct and 275 00:13:30,400 --> 00:13:34,680 indirect risks affecting both cost basis and the end market 276 00:13:34,680 --> 00:13:37,760 demand. So basically, even if these 277 00:13:37,760 --> 00:13:41,960 machines themselves aren't hit by the tariffs, if the US 278 00:13:41,960 --> 00:13:45,200 tariffs, everyone else, all those consumers that would be 279 00:13:45,200 --> 00:13:48,880 buying these phones and devices and different machines that use 280 00:13:48,880 --> 00:13:50,800 the chips would also be impacted. 281 00:13:51,080 --> 00:13:55,120 So it's not just the direct impact, the ASML that the CEO is 282 00:13:55,120 --> 00:13:57,760 warning about, They're also warning about any indirect 283 00:13:57,760 --> 00:14:00,760 impact. Tariffs are a tax on trade. 284 00:14:01,160 --> 00:14:04,080 A tax slows down, it adds friction to whatever you're 285 00:14:04,080 --> 00:14:06,160 doing. So if there's less trading going 286 00:14:06,160 --> 00:14:09,800 on, there's less purchasing of devices that need ASML 287 00:14:09,800 --> 00:14:11,720 technology. They're not saying that this is 288 00:14:11,720 --> 00:14:14,240 for sure going to happen. They're saying that this is a 289 00:14:14,240 --> 00:14:16,120 warning. The management of ASML is 290 00:14:16,120 --> 00:14:19,160 working with customers and suppliers to mitigate direct 291 00:14:19,200 --> 00:14:21,760 tariff impacts. They know that while they have 292 00:14:21,760 --> 00:14:25,080 more control over the direct impact of tariffs, they do not 293 00:14:25,080 --> 00:14:27,520 have as much control over the indirect effects. 294 00:14:27,720 --> 00:14:31,000 The GDP, customer confidence are harder to predict. 295 00:14:31,040 --> 00:14:33,120 So we have a bit more of a framework of why investors are 296 00:14:33,120 --> 00:14:36,320 concerned, the geopolitical uncertainties, the downstream 297 00:14:36,320 --> 00:14:40,000 effects this has on GDP, their customer confidence and so on. 298 00:14:40,000 --> 00:14:42,520 Meanwhile, they're also giving outlook and guidance at least 299 00:14:42,520 --> 00:14:45,720 over 2025. They say the full year 2025 300 00:14:45,720 --> 00:14:49,440 revenue is expected to be up 15% from 2024. 301 00:14:49,520 --> 00:14:52,160 That's fast growth. Where I get concerned about 302 00:14:52,160 --> 00:14:55,880 growth is when it's in the realm of around a a sales force where 303 00:14:55,880 --> 00:15:00,000 it's 7 or 8%, I'd hope companies grow a little bit faster, but 304 00:15:00,000 --> 00:15:04,120 15% is, is very fast growth. Sales force is growing fast in 305 00:15:04,120 --> 00:15:06,040 2025. But one thing they mentioned 306 00:15:06,040 --> 00:15:08,800 here is even though they're giving the guidance for 2025, 307 00:15:09,160 --> 00:15:13,440 they've pulled their guidance for 2026, saying 2026 guidance 308 00:15:13,440 --> 00:15:17,200 withheld due to macroeconomic, geopolitical uncertainty and 309 00:15:17,200 --> 00:15:20,680 customer CapEx timing. AI related demand remains 310 00:15:20,680 --> 00:15:24,440 strong, but visibility is reduced due to ongoing tariff 311 00:15:24,720 --> 00:15:27,040 and trade policy risks. So the story that we get from 312 00:15:27,040 --> 00:15:29,840 ASML today is that the fundamentals remain very strong. 313 00:15:29,840 --> 00:15:32,520 In fact, they're getting better, the revenues growing, they're 314 00:15:32,520 --> 00:15:35,000 selling more machines. We have operating margins 315 00:15:35,000 --> 00:15:37,760 ticking up year over year. We have a very profitable 316 00:15:37,760 --> 00:15:40,520 business doing immense amounts of buybacks and dividends. 317 00:15:40,520 --> 00:15:42,360 That side of the story looks really good. 318 00:15:42,640 --> 00:15:45,320 But then we get to the narrative part and we have more 319 00:15:45,320 --> 00:15:49,400 uncertainty, more cautionary. We have concerns about trade 320 00:15:49,400 --> 00:15:52,080 policy, geopolitical events, restrictions. 321 00:15:52,440 --> 00:15:56,160 If President Trump ramps things up and amps up the intensity on 322 00:15:56,160 --> 00:15:59,480 Europe, if they're not able to make a deal, that can have all 323 00:15:59,480 --> 00:16:02,040 sorts of downstream effects on ASM LS business. 324 00:16:02,440 --> 00:16:04,960 So we have strong fundamentals and then we have a narrative 325 00:16:04,960 --> 00:16:09,080 that looks very unpredictable. So overall, the entire story of 326 00:16:09,080 --> 00:16:12,080 ASML looks a little bit more unpredictable today. 327 00:16:12,120 --> 00:16:15,200 Now my prediction going into next year is that ASML will do 328 00:16:15,200 --> 00:16:17,080 better than what investors are expecting. 329 00:16:17,440 --> 00:16:19,600 And even though we don't have official guidance, I believe 330 00:16:19,600 --> 00:16:22,760 that ASML will continue to grow. I think they'll grow both their 331 00:16:22,760 --> 00:16:24,480 top line and their profitability. 332 00:16:24,680 --> 00:16:27,280 They'll grow their earnings and free cash flow per share, in 333 00:16:27,280 --> 00:16:29,800 part by being highly profitable and doing immense amounts of 334 00:16:29,800 --> 00:16:31,920 buybacks. But on top of that, I still 335 00:16:31,920 --> 00:16:34,760 think they're going to grow top line revenue at a brisk pace. 336 00:16:35,400 --> 00:16:38,040 When we look at the concerns that ASML lists out, they're not 337 00:16:38,040 --> 00:16:40,760 unfounded. President Trump is being very 338 00:16:40,760 --> 00:16:44,760 aggressive and he's threatening 30% tariffs on Europe. 339 00:16:45,240 --> 00:16:47,240 But we've seen a bit of this story before. 340 00:16:47,240 --> 00:16:50,480 We've seen this play out before. My initial thoughts on the 341 00:16:50,480 --> 00:16:53,240 tariffs was that President Trump would use it as more of a 342 00:16:53,240 --> 00:16:56,000 negotiating tactic. It's more something to get 343 00:16:56,000 --> 00:16:59,600 someone to the table to put a little pressure on him to try to 344 00:16:59,600 --> 00:17:02,600 close a deal. So while the 30% number or 345 00:17:02,600 --> 00:17:05,960 whatever big tariff number President Trump throws out, that 346 00:17:05,960 --> 00:17:08,880 can seem very high, and of course it is, it's also not the 347 00:17:08,880 --> 00:17:11,040 number that's going to be landed on long term. 348 00:17:11,280 --> 00:17:13,280 It's a bit like when you go into a store and they have a 349 00:17:13,280 --> 00:17:17,240 salesperson that says, hey, this item's normally $50.00, but here 350 00:17:17,240 --> 00:17:20,240 I have it for 25. What a deal you're getting. 351 00:17:20,680 --> 00:17:23,440 You know that the first number is not really how much the thing 352 00:17:23,520 --> 00:17:25,680 normally costs. You start off with a big number 353 00:17:25,680 --> 00:17:27,760 to make the other one seem a lot smaller. 354 00:17:28,040 --> 00:17:30,160 And I believe that's a lot of the negotiating tactics that 355 00:17:30,160 --> 00:17:32,680 President Trump uses. He is brash. 356 00:17:32,840 --> 00:17:35,200 He has a very aggressive negotiating style. 357 00:17:35,640 --> 00:17:37,240 It's not something I would endorse. 358 00:17:37,240 --> 00:17:39,320 I would do it differently if I was the president. 359 00:17:39,520 --> 00:17:42,160 But that's just the case. When I look into what's going to 360 00:17:42,160 --> 00:17:45,800 happen over the next couple of years, I do not believe that the 361 00:17:45,800 --> 00:17:50,440 US is going to hamper growth, especially in AI with enormous 362 00:17:50,440 --> 00:17:52,160 taxes. I think that this will get 363 00:17:52,160 --> 00:17:55,400 resolved a lot lower, allowing companies like ASML to continue 364 00:17:55,400 --> 00:17:57,800 growing. Now, the CEO of ASML is correct 365 00:17:57,800 --> 00:17:59,920 and he's being prudent in looking at these headlines, 366 00:18:00,160 --> 00:18:02,960 looking at the threats being given and showing how it could 367 00:18:02,960 --> 00:18:05,600 impact the company's long term profits. 368 00:18:06,080 --> 00:18:09,200 But the probability of these impacts actually being felt is 369 00:18:09,200 --> 00:18:11,400 really low. For this reason, I believe that 370 00:18:11,400 --> 00:18:14,560 ASML is still good value today. I think the company's going to 371 00:18:14,560 --> 00:18:17,040 grow next year. And although, like the CEO, 372 00:18:17,040 --> 00:18:19,640 there's no guarantees in investing, there never was. 373 00:18:19,960 --> 00:18:22,400 Selling the company, based on this report, I believe is a 374 00:18:22,400 --> 00:18:24,080 mistake. So I'm still holding all my 375 00:18:24,080 --> 00:18:24,880 shares. No. 376 00:18:24,880 --> 00:18:27,800 Next we have the big banks that reported earnings earlier this 377 00:18:27,800 --> 00:18:29,560 week. My prediction was that the 378 00:18:29,560 --> 00:18:31,600 earnings would be good, and they're great. 379 00:18:31,600 --> 00:18:34,320 JP Morgan Chase reported earnings, Goldman Sachs did, 380 00:18:34,320 --> 00:18:37,280 Bank of America did, and all of them reported very strong 381 00:18:37,280 --> 00:18:39,480 earnings. If we look at JP Morgan Chase, 382 00:18:39,640 --> 00:18:41,440 this is the biggest bank in the world. 383 00:18:41,480 --> 00:18:43,160 There's multiple parts to JP Morgan. 384 00:18:43,160 --> 00:18:45,760 It's very diverse. They have consumer and community 385 00:18:45,760 --> 00:18:48,560 banking, they have commercial and investment services, they 386 00:18:48,560 --> 00:18:51,320 have asset and wealth management, they have corporate 387 00:18:51,360 --> 00:18:53,920 and so on and so forth. So it's a a very diversified 388 00:18:53,920 --> 00:18:56,080 company. If we look at all the different 389 00:18:56,080 --> 00:18:59,320 segments of the business, the commentary on each part of it 390 00:18:59,320 --> 00:19:02,040 shows a very positive picture. For instance, if we look at the 391 00:19:02,040 --> 00:19:05,600 consumer and community banking segment, the revenues were up 6% 392 00:19:05,600 --> 00:19:08,120 year over year. We look at the card services, 393 00:19:08,120 --> 00:19:11,480 this is a big part of JP Morgan. They have I believe Visas, they 394 00:19:11,480 --> 00:19:14,680 have so many Visa cards. Card services and auto revenue 395 00:19:14,680 --> 00:19:18,640 rose 15% due to higher evolving balances and lease income with 396 00:19:18,640 --> 00:19:22,480 cards outstanding up 9% following strong new account 397 00:19:22,480 --> 00:19:25,760 acquisition. So the the whole story about 398 00:19:25,760 --> 00:19:30,440 stable coins and credit cards or cards being antiquated. 399 00:19:30,560 --> 00:19:34,520 Visa cards were up 9% for JP Morgan year over year. 400 00:19:34,600 --> 00:19:37,640 In commercial and investment banking, the revenue was up 9%. 401 00:19:37,640 --> 00:19:40,760 They have net income growth. They see revenue across the 402 00:19:40,760 --> 00:19:43,200 board with commercial investment banking services growing. 403 00:19:43,520 --> 00:19:45,800 With asset and wealth management, the revenue was up 404 00:19:45,800 --> 00:19:49,840 10%, driven by strong management fees, net inflows and higher 405 00:19:49,840 --> 00:19:52,000 market levels. This is great stuff. 406 00:19:52,040 --> 00:19:54,800 If you're AJP Morgan, Chase Holder, you're happy reading 407 00:19:54,800 --> 00:19:56,760 through this report. There's no weaknesses here. 408 00:19:56,760 --> 00:19:59,960 So there's no big surprise here. We have Goldman Sachs basically 409 00:19:59,960 --> 00:20:02,280 saying the same thing. Both of these companies are up 410 00:20:02,280 --> 00:20:05,080 big this year, 21% for Goldman Sachs. 411 00:20:05,080 --> 00:20:08,320 We have JP Morgan up 19%, not counting the dividend. 412 00:20:08,720 --> 00:20:10,560 So the big banks are doing incredibly well. 413 00:20:10,640 --> 00:20:12,680 Now, moving on, we get to the breaking news headline that 414 00:20:12,680 --> 00:20:16,720 apparently Trump has indicated he is likely to attempt firing 415 00:20:17,000 --> 00:20:20,120 Jerome Powell soon. This is from administration 416 00:20:20,120 --> 00:20:21,840 officials and this has been posted around. 417 00:20:21,840 --> 00:20:24,160 It wasn't just a rumor. There are many people saying 418 00:20:24,160 --> 00:20:26,640 that this is being floated around as an idea. 419 00:20:26,640 --> 00:20:28,560 Now, of course, Jerome Powell is the Fed chair. 420 00:20:28,560 --> 00:20:30,760 He's the one deciding the monetary policy of what the 421 00:20:30,760 --> 00:20:33,040 federal funds rate is at. Now, Jerome Powell has two 422 00:20:33,040 --> 00:20:35,200 different mandates. One of them is maximum 423 00:20:35,240 --> 00:20:37,600 employment. People that want to find a job 424 00:20:37,600 --> 00:20:40,360 are able to find a job. The other is stable prices. 425 00:20:40,640 --> 00:20:42,560 So the other is dealing with inflation. 426 00:20:42,960 --> 00:20:45,680 The tool that he has, the federal funds rate, has impacts 427 00:20:45,680 --> 00:20:49,000 on both of these. For example, if unemployment's 428 00:20:49,000 --> 00:20:52,000 really high, a way that you can help out with that is by 429 00:20:52,000 --> 00:20:55,520 lowering interest rates. Lowering interest rates heats up 430 00:20:55,520 --> 00:20:57,200 the economy. It's a catalyst for it. 431 00:20:57,200 --> 00:21:00,280 It's a stimulus for the economy. Lowering interest rates makes 432 00:21:00,280 --> 00:21:03,120 capital cheaper. To get a loan from the bank, you 433 00:21:03,120 --> 00:21:05,040 can do it with a cheaper amount of interest. 434 00:21:05,400 --> 00:21:07,360 So the banks are more eager to loan out money. 435 00:21:07,360 --> 00:21:09,680 People are more eager to take money from the banks. 436 00:21:09,960 --> 00:21:13,120 People are more eager to buy new houses because houses now have 437 00:21:13,120 --> 00:21:16,040 lower interest rates. It spurs growth, it spurs 438 00:21:16,040 --> 00:21:20,080 lending, it spurs hiring, and it lowers the unemployment rate. 439 00:21:20,200 --> 00:21:22,440 But then you have the other half of his mandate, which is stable 440 00:21:22,440 --> 00:21:24,280 prices. If you were to heat up the 441 00:21:24,280 --> 00:21:27,120 economy as much as possible, stimulate it as much as 442 00:21:27,120 --> 00:21:30,800 possible, lower interest rates as much as you can, well, that 443 00:21:30,800 --> 00:21:34,120 has another effect. And we saw that in 2021. 444 00:21:34,520 --> 00:21:36,440 You have inflation starting to pick up. 445 00:21:36,920 --> 00:21:40,760 Inflation grows and grows. As there's more demand than 446 00:21:40,760 --> 00:21:43,960 there is supply, prices become less stable, and people don't 447 00:21:43,960 --> 00:21:47,360 like unstable prices. So Drone Pal's trying to balance 448 00:21:47,360 --> 00:21:49,960 both of these things. And over the past number of 449 00:21:49,960 --> 00:21:51,800 years, I think he's done a decent job. 450 00:21:52,400 --> 00:21:55,200 It's not a perfect job. You can certainly cast 451 00:21:55,200 --> 00:21:58,120 criticism, Adam, but I believe the Fed chair is one of the most 452 00:21:58,120 --> 00:22:01,360 difficult jobs you can do. It's also one of the easiest 453 00:22:01,360 --> 00:22:05,480 ones to be an armchair analyst, to look at what you could have 454 00:22:05,480 --> 00:22:09,200 done in certain situations better, but to look at all the 455 00:22:09,200 --> 00:22:12,080 data, everything holistically and make decisions based upon 456 00:22:12,080 --> 00:22:13,600 that. I think overall, he's done a 457 00:22:13,600 --> 00:22:15,920 decent job. Now, President Trump doesn't 458 00:22:15,920 --> 00:22:18,000 agree with that. He thinks that J pal's done a 459 00:22:18,000 --> 00:22:20,200 terrible job. He's called him all sorts of 460 00:22:20,200 --> 00:22:23,040 names, that he's dumb. He's a slow person, you know, 461 00:22:23,040 --> 00:22:26,760 not an intelligent person. So he's he's kind of branding 462 00:22:26,760 --> 00:22:29,480 them as this bad guy that's not great at his job. 463 00:22:29,480 --> 00:22:32,200 He's in fact incompetent at being the Fed chair. 464 00:22:32,200 --> 00:22:35,080 We're also seeing these reports that President Trump indicated 465 00:22:35,080 --> 00:22:38,000 to Republican lawmakers on Tuesday that he is likely to 466 00:22:38,000 --> 00:22:41,840 attempt removing Federal Reserve Chair Jerome Powell from his job 467 00:22:41,840 --> 00:22:44,800 soon, according to senior administration officials. 468 00:22:45,240 --> 00:22:47,880 The official said the president asked lawmakers during a meeting 469 00:22:47,880 --> 00:22:51,480 at the White House how they felt about firing the Fed chair, and 470 00:22:51,480 --> 00:22:54,280 several expressed support for attempting to oust him. 471 00:22:54,720 --> 00:22:57,400 Trump then suggested he could move to fire him in the near 472 00:22:57,400 --> 00:23:00,240 future, the official said. Now, there are a number of 473 00:23:00,240 --> 00:23:03,120 issues with this idea. One of them, in fact, I believe 474 00:23:03,120 --> 00:23:06,320 the primary issue is that the president can't fire Jerome 475 00:23:06,320 --> 00:23:08,400 Powell. Jerome Powell is not an employee 476 00:23:08,400 --> 00:23:10,320 of the president. They are separated. 477 00:23:10,320 --> 00:23:13,560 In fact, they're not even supposed to be combined in any 478 00:23:13,560 --> 00:23:15,480 way. They're supposed to be distinct, 479 00:23:15,480 --> 00:23:18,680 separate entities. The president has no power to 480 00:23:18,680 --> 00:23:21,400 directly fire Jerome Powell. And if we look at Jay Powell's 481 00:23:21,400 --> 00:23:25,400 commentary on this, he seems to know his law and his rights in 482 00:23:25,400 --> 00:23:27,800 the role that he's in. He's asked specifically what he 483 00:23:27,800 --> 00:23:30,400 would do if the president decided to fire him. 484 00:23:30,560 --> 00:23:33,960 Some of the president's elect's advisers have suggested that you 485 00:23:34,040 --> 00:23:37,040 should resign. If he asked you to leave, would 486 00:23:37,040 --> 00:23:38,400 you go? No. 487 00:23:39,840 --> 00:23:43,320 Can you follow up on it? Is it, do you think that legally 488 00:23:43,400 --> 00:23:45,120 he did? You're not required to leave. 489 00:23:45,600 --> 00:23:47,120 No. Do you believe that the 490 00:23:47,120 --> 00:23:49,320 president has the power to fire or demote you? 491 00:23:49,320 --> 00:23:53,640 And has the Fed determine the legality of a president demoting 492 00:23:53,640 --> 00:23:55,840 at will any of the other governors with leadership 493 00:23:55,840 --> 00:23:57,760 positions? Not permitted under the law. 494 00:23:58,200 --> 00:24:01,240 There are his answers, and they're rather definitive. 495 00:24:01,560 --> 00:24:05,320 He didn't leave any Gray space. There's no, you know, maybe I 496 00:24:05,320 --> 00:24:07,920 would consider stepping down. The president wanted me to 497 00:24:07,920 --> 00:24:09,480 leave. I, I would put it under 498 00:24:09,480 --> 00:24:11,560 consideration. No, there is none of that. 499 00:24:12,080 --> 00:24:15,400 He says if the president tries to fire him, it's not going to 500 00:24:15,400 --> 00:24:17,400 happen and you'd continue doing his role. 501 00:24:17,400 --> 00:24:20,360 And when someone asks him about whether or not the president can 502 00:24:20,360 --> 00:24:23,640 fire him, he says it's illegally not permitted under the law. 503 00:24:23,840 --> 00:24:26,240 Jerome Powell intends to work the rest of his tenure. 504 00:24:26,320 --> 00:24:29,320 Now, even though the president doesn't have the direct ability 505 00:24:29,320 --> 00:24:32,760 to fire Jerome Powell, he can wage a campaign against him and 506 00:24:32,760 --> 00:24:35,200 maybe oust him through roundabout ways. 507 00:24:35,200 --> 00:24:38,040 There's different legal opportunities to maybe try to 508 00:24:38,040 --> 00:24:40,400 get him out of that position without technically firing him. 509 00:24:41,040 --> 00:24:43,200 But most of that relies on Jerome Powell doing something 510 00:24:43,200 --> 00:24:46,120 extreme, something disqualifying for his position. 511 00:24:46,520 --> 00:24:48,600 And overall, Jerome Powell hasn't done any of that. 512 00:24:48,600 --> 00:24:51,720 In fact, Jerome Powell represents the broad agreement 513 00:24:51,720 --> 00:24:54,280 of the overall Fed, the thousands of people working 514 00:24:54,280 --> 00:24:57,320 there, all the different Fed members are in overall agreement 515 00:24:57,320 --> 00:24:59,760 with them. Some opinions diverge on when we 516 00:24:59,760 --> 00:25:03,080 should lower interest rates, but he has the backing and the 517 00:25:03,080 --> 00:25:06,000 support of his team. So you can't really fire him 518 00:25:06,000 --> 00:25:09,520 based on the premise that he's way out of turn, that he's 519 00:25:09,520 --> 00:25:11,680 acting or behaving way outside of his role. 520 00:25:11,680 --> 00:25:14,480 None of that applies here. Now, just a very recent update 521 00:25:14,480 --> 00:25:16,040 on this. We have President Trump here in 522 00:25:16,040 --> 00:25:19,200 the White House, and he's asked specifically about this news. 523 00:25:19,200 --> 00:25:23,200 This was just an hour ago. But he's he's, I think he does a 524 00:25:23,200 --> 00:25:25,280 terrible job. He's costing us a lot of money. 525 00:25:25,960 --> 00:25:29,360 And we fight through it. It's it's almost the country's 526 00:25:29,360 --> 00:25:32,760 become so successful that it doesn't have a big impact, but 527 00:25:33,680 --> 00:25:35,800 it does hurt people wanting to get a mortgage. 528 00:25:36,960 --> 00:25:41,200 People want to buy a house. He's a terrible, he's a terrible 529 00:25:41,240 --> 00:25:42,800 fetcher. I was surprised he was 530 00:25:43,120 --> 00:25:45,240 appointed. I was surprised, frankly, that 531 00:25:46,280 --> 00:25:50,840 Biden put him in and extended him, but they did. 532 00:25:51,040 --> 00:25:53,800 So no, we're not planning on doing anything. 533 00:25:53,840 --> 00:25:56,320 We're very concerned. Right there he says it. 534 00:25:56,480 --> 00:25:58,840 We're not planning on doing anything, we're just really 535 00:25:58,840 --> 00:26:00,680 concerned. He seems to have completely 536 00:26:00,680 --> 00:26:03,960 walked back the idea of firing him, at least acting upon it. 537 00:26:04,320 --> 00:26:06,880 And maybe this internal report was just incorrect, but it seems 538 00:26:06,880 --> 00:26:09,560 like they tossed the idea around and realized that they don't 539 00:26:09,560 --> 00:26:11,640 have a legal way of accomplishing what they want to 540 00:26:11,640 --> 00:26:13,360 accomplish. So instead of firing him, 541 00:26:13,360 --> 00:26:16,120 they're going to continue to brand him and paint him out to 542 00:26:16,120 --> 00:26:18,480 be the problem here. You can have your opinion on 543 00:26:18,480 --> 00:26:20,000 Jerome Powell. Maybe you agree with President 544 00:26:20,000 --> 00:26:22,720 Trump, maybe you don't. But this is the politics of the 545 00:26:22,720 --> 00:26:25,480 situation. Now, if President Trump really 546 00:26:25,480 --> 00:26:29,360 tried to fire Jerome Powell, I think that'd be really bad for 547 00:26:29,360 --> 00:26:31,200 the markets. It would not be a good look. 548 00:26:31,240 --> 00:26:34,000 The markets would be better served if Jerome Powell served 549 00:26:34,000 --> 00:26:36,080 the rest of his term until early next year. 550 00:26:36,440 --> 00:26:38,400 Then they replaced him with the person they wanted. 551 00:26:38,600 --> 00:26:40,880 But firing him in advance would be such a bad look for the 552 00:26:40,880 --> 00:26:42,960 markets, it would cause a huge red day. 553 00:26:43,560 --> 00:26:46,600 Now finally we get into some news about Amazon. 554 00:26:46,600 --> 00:26:48,840 This is a company that they have so many different projects 555 00:26:48,840 --> 00:26:50,760 they're working on, it's hard to keep track of it all. 556 00:26:50,760 --> 00:26:53,160 We have project hyper. This is very similar to 557 00:26:53,160 --> 00:26:57,040 Starlink, where Amazon plans to offer satellite Internet service 558 00:26:57,040 --> 00:27:01,240 in late 2025 S by the end of this year, there could be 559 00:27:01,240 --> 00:27:04,240 customers hooked up with their new satellite service. 560 00:27:04,240 --> 00:27:07,240 They'll have the the dishes like the Amazon ones and they can 561 00:27:07,240 --> 00:27:08,680 have it very similar to Starlink. 562 00:27:08,760 --> 00:27:11,320 Amazon is planning on offering three tiers of their broadband 563 00:27:11,320 --> 00:27:13,360 service. There is the ultra compact 564 00:27:13,360 --> 00:27:17,320 satellite antenna the manages speeds of up to 100 megabits per 565 00:27:17,320 --> 00:27:19,560 second. So this is like this is like the 566 00:27:19,600 --> 00:27:23,360 the Starlink roam the mini, right, the ultra compact. 567 00:27:23,720 --> 00:27:26,120 Then you have the standard antenna speeds up to 400 568 00:27:26,120 --> 00:27:28,640 megabits per second. Then you have the large model 569 00:27:28,840 --> 00:27:31,080 what speeds up to 1 Gigabit per second. 570 00:27:31,160 --> 00:27:34,520 That's incredible that you'll have satellite Internet that is 571 00:27:34,520 --> 00:27:37,000 far faster than broadband Internet. 572 00:27:37,360 --> 00:27:38,760 That's the world we're living in now. 573 00:27:38,840 --> 00:27:40,640 Analysts are now saying that they see a compelling 574 00:27:40,640 --> 00:27:44,040 opportunity here, potentially strong long term margins given 575 00:27:44,040 --> 00:27:47,320 the high upfront cost. There's only two companies so 576 00:27:47,320 --> 00:27:49,920 far that have done this. One is SpaceX, the other is 577 00:27:49,920 --> 00:27:52,600 Starlink. The cost of actually making this 578 00:27:52,600 --> 00:27:55,680 happen is so extensive that there's not many companies in 579 00:27:55,680 --> 00:27:58,440 the world that have the financial situation or the 580 00:27:58,440 --> 00:28:01,280 investor base patient enough to make these type of investments. 581 00:28:01,640 --> 00:28:04,120 You have a private company, which is Starlink, which has 582 00:28:04,120 --> 00:28:07,320 very long term investors, private company, but then you 583 00:28:07,320 --> 00:28:10,800 have Amazon, one of the rare public companies that has the 584 00:28:10,840 --> 00:28:13,680 investing discipline and the base to be able to wait out 585 00:28:13,680 --> 00:28:17,160 these long term gains. So a very unique situation for 586 00:28:17,160 --> 00:28:20,040 Amazon here. It gives you access to something 587 00:28:20,040 --> 00:28:22,360 similar to Starlink, although not the same. 588 00:28:22,440 --> 00:28:24,320 They don't have the Rockets they're launching themselves. 589 00:28:24,320 --> 00:28:26,320 They just have the satellite Internet. 590 00:28:26,360 --> 00:28:28,720 Amazon has a lot of synergies that would happen with Project 591 00:28:28,720 --> 00:28:30,560 Kyper. There's a lot of ways that they 592 00:28:30,560 --> 00:28:33,240 could use Project Kyper to advance the rest of their 593 00:28:33,240 --> 00:28:35,800 businesses. You have data transfer for AWS 594 00:28:35,800 --> 00:28:37,800 clients. Project Kyper will be able to 595 00:28:37,800 --> 00:28:41,000 offer clients private connectivity to AWS without 596 00:28:41,000 --> 00:28:44,120 routing data through public Internet so they can link this 597 00:28:44,120 --> 00:28:46,440 tool with every other aspect of their business. 598 00:28:46,440 --> 00:28:48,200 And it highlights Amazon Logistics. 599 00:28:48,560 --> 00:28:51,360 Amazon will be able to better manage its own logistic assets 600 00:28:51,360 --> 00:28:53,400 with its always on connected network. 601 00:28:53,400 --> 00:28:57,040 While mobile networks cover most of the USA, Satellite network 602 00:28:57,040 --> 00:29:00,600 could offer better connectivity on the ground and airborne 603 00:29:00,720 --> 00:29:03,000 assets. Amazon could connect to its 604 00:29:03,000 --> 00:29:06,600 future robots and drones through Project Kyper, so if you have 605 00:29:06,600 --> 00:29:09,960 robots delivering packages and in places where you have spotty 606 00:29:09,960 --> 00:29:12,800 Internet, Amazon could have a solution there with their own 607 00:29:12,840 --> 00:29:14,720 Project Hyper. It's exciting to see the 608 00:29:14,720 --> 00:29:18,200 progress of this Project Hyper and I believe it is going to be 609 00:29:18,280 --> 00:29:21,000 a revenue generating and even a profit generating aspect of the 610 00:29:21,000 --> 00:29:24,040 company very soon. I could see next year that 611 00:29:24,040 --> 00:29:26,840 Amazon also has advantages in marketing and selling this 612 00:29:26,840 --> 00:29:29,200 product. While Starlink has to sell it 613 00:29:29,440 --> 00:29:32,920 indirectly, they have to make marketing campaigns for it and 614 00:29:32,920 --> 00:29:35,240 word of mouth. Amazon can plaster it on their 615 00:29:35,240 --> 00:29:37,520 homepage. You go to Amazon.com to do your 616 00:29:37,520 --> 00:29:40,240 normal shopping and then you have a satellite there with 617 00:29:40,280 --> 00:29:43,320 Project Hyper discounted for members included as part of 618 00:29:43,320 --> 00:29:45,800 Amazon Prime. They'll do what they can to get 619 00:29:45,800 --> 00:29:48,840 you owning one of their devices. So I believe they have a lot of 620 00:29:48,840 --> 00:29:51,320 ways to market this as well. We'll have to continue following 621 00:29:51,320 --> 00:29:53,240 it and see how this ultimately turns out. 622 00:29:53,600 --> 00:29:55,320 That's all for this episode. Hope you enjoyed. 623 00:29:55,520 --> 00:29:56,280 See you in the next one.