1 00:00:00,000 --> 00:00:02,600 Welcome back everyone. We have an exciting episode to 2 00:00:02,600 --> 00:00:04,600 get into today. We're going to be looking at 3 00:00:04,600 --> 00:00:08,000 this story fund and I'll be going over every single holding. 4 00:00:08,000 --> 00:00:11,400 I own every single position and why I'm still invested in these 5 00:00:11,400 --> 00:00:13,200 companies. Even though the market right now 6 00:00:13,200 --> 00:00:15,400 does not like them. The market selling out of these 7 00:00:15,400 --> 00:00:18,800 companies, I'm buying in, that's the transaction that's happening 8 00:00:18,800 --> 00:00:21,000 right now. And you can see the total 9 00:00:21,200 --> 00:00:24,000 returns right now, the thirty one thousand dollars of losses. 10 00:00:24,000 --> 00:00:26,600 So so far this portfolios in the red. 11 00:00:26,600 --> 00:00:29,800 It hasn't gone great and I'm going to show it anyways. 12 00:00:30,000 --> 00:00:33,500 With complete transparency. Because as I've mentioned, we do 13 00:00:33,500 --> 00:00:36,100 things differently on this channel if you're new here, this 14 00:00:36,100 --> 00:00:39,600 isn't a channel where we only show when things are good and 15 00:00:39,600 --> 00:00:42,100 then we kind of Fade Away into the background when things are 16 00:00:42,100 --> 00:00:44,500 bad, right? I show whether or not things are 17 00:00:44,500 --> 00:00:47,900 good or bad with complete transparency every single week 18 00:00:48,000 --> 00:00:51,700 week by week and I'll continue to throughout now till the end 19 00:00:51,700 --> 00:00:55,300 of 2025, that's kind of the end goal for this little experiment 20 00:00:55,300 --> 00:00:58,400 with this portfolio. Now, right now, like I said, the 21 00:00:58,400 --> 00:01:01,900 market is very difficult, this Portfolio has it's held up. 22 00:01:01,900 --> 00:01:04,099 Okay? It hasn't done really as poorly 23 00:01:04,099 --> 00:01:06,900 as some other ones that are extremely speculative, right. 24 00:01:07,400 --> 00:01:09,500 But it hasn't done as good as portfolios that are very 25 00:01:09,500 --> 00:01:12,100 conservative. For example, I have another 26 00:01:12,100 --> 00:01:14,800 portfolio here called the passive income account, this is 27 00:01:14,800 --> 00:01:18,500 a dividend portfolio with a lot more of these kind of mature 28 00:01:18,500 --> 00:01:22,000 consumer companies that just, you know, sell the same products 29 00:01:22,000 --> 00:01:24,000 they've been around for a long time, they have high amounts of 30 00:01:24,000 --> 00:01:27,600 free cash flow and this one's held up a lot better over the 31 00:01:27,600 --> 00:01:29,400 past year. It's just performed a ton 32 00:01:29,400 --> 00:01:31,000 better. In fact, you can look at just 33 00:01:31,000 --> 00:01:34,600 today as an example today, it's that point seven, seven percent 34 00:01:34,600 --> 00:01:35,700 two thousand six hundred dollars. 35 00:01:36,100 --> 00:01:39,300 Let's go ahead and compare that with the story fund story funds 36 00:01:39,300 --> 00:01:43,000 in the red point six percent. So the passive income accounts 37 00:01:43,000 --> 00:01:44,400 going up the story funds going down. 38 00:01:44,400 --> 00:01:48,900 That's the story for the past past year but regardless, even 39 00:01:48,900 --> 00:01:51,400 though this portfolio is doing poorly even though it doesn't 40 00:01:51,400 --> 00:01:52,700 look good. Right now, I want to be 41 00:01:52,700 --> 00:01:55,600 transparent and show the update because I feel like a lot of 42 00:01:55,600 --> 00:01:59,900 people on social media when they have a bad result they kind of 43 00:02:00,000 --> 00:02:03,900 Of shy away from actually showing it to their audience and 44 00:02:03,900 --> 00:02:07,100 I think that that's a mistake because I'm in investing every 45 00:02:07,100 --> 00:02:11,000 investor goes through periods of time of under performance. 46 00:02:11,300 --> 00:02:14,900 Every single one of them in every single, drawdown, that 47 00:02:14,900 --> 00:02:18,400 Peter Lynch had over his 13 years of outperformance. 48 00:02:18,800 --> 00:02:22,100 Every single time, the market went down, his portfolio went 49 00:02:22,100 --> 00:02:25,800 down more. He said he was 100% on with that 50 00:02:25,800 --> 00:02:28,300 nine out of nine times. When the market went down over, 51 00:02:28,300 --> 00:02:32,100 10%, Peter Lynch's. Portfolio went down 15 or 20%. 52 00:02:32,200 --> 00:02:34,200 It was not a conservative portfolio. 53 00:02:34,400 --> 00:02:37,600 Every time the market took a huge dive, Peter Lynch's went 54 00:02:37,600 --> 00:02:41,000 down more but because he had a level head and he held on to his 55 00:02:41,000 --> 00:02:44,000 company's when the market recovered and it went back into 56 00:02:44,000 --> 00:02:48,000 bullish greedy mode. His portfolio would outperform 57 00:02:48,000 --> 00:02:50,200 to a huge extent. So I look at Peter Lynch's. 58 00:02:50,200 --> 00:02:53,600 And example, we also have the example of Warren Buffett in 59 00:02:53,600 --> 00:02:55,000 2020. Warren Buffett was 60 00:02:55,100 --> 00:02:58,400 underperforming. In fact, all the the exciting 61 00:02:58,400 --> 00:03:01,300 stocks all the consumer stocks, The ark invest type of stocks. 62 00:03:01,600 --> 00:03:04,600 We're going up like crazy and people said that Warren Buffett 63 00:03:04,600 --> 00:03:06,300 is old news. He doesn't know what he's doing 64 00:03:06,300 --> 00:03:10,200 in this new technology driven world and he underperformed in 65 00:03:10,200 --> 00:03:12,800 2020. Now, Berkshire Hathaway is 66 00:03:12,800 --> 00:03:15,300 outperforming, right? So Warren Buffett had to go 67 00:03:15,300 --> 00:03:17,800 through a period of under performance before. 68 00:03:17,800 --> 00:03:21,500 Now outperforming the market and you can see the same thing with 69 00:03:21,500 --> 00:03:24,000 Terry Smith and fun Smith. They're going through a period 70 00:03:24,000 --> 00:03:26,800 of under performance as well. So on and so forth. 71 00:03:26,800 --> 00:03:30,200 There's endless examples of great investors that Beat the 72 00:03:30,200 --> 00:03:33,000 market over a long period of time, but they have to go 73 00:03:33,000 --> 00:03:35,800 through a period of under performance during that process. 74 00:03:35,900 --> 00:03:37,900 Now, another thing that I've done is, I've put together a 75 00:03:37,900 --> 00:03:40,500 timeline of events that I think, will be really fun to go 76 00:03:40,500 --> 00:03:42,100 through. Here's what it looks like. 77 00:03:42,300 --> 00:03:45,900 This is the story fun against the S&P 500 and I've gone an 78 00:03:45,900 --> 00:03:49,600 annotated, every single major event that's happened over the 79 00:03:49,600 --> 00:03:54,000 past year, so that's led to this outcome and I want to go through 80 00:03:54,000 --> 00:03:55,700 this with you. I'll go through each and every 81 00:03:55,700 --> 00:03:58,400 point and kind of give you a better idea of how we got to 82 00:03:58,400 --> 00:04:00,500 this point. So I think This will be a lot of 83 00:04:00,500 --> 00:04:02,000 fun. So with that said, we have a lot 84 00:04:02,000 --> 00:04:05,100 to get to in this episode. And before we jump in, I just 85 00:04:05,100 --> 00:04:07,200 want to mention that I do have a patreon. 86 00:04:07,500 --> 00:04:09,900 It is a community of investors, where we discussed dividend 87 00:04:09,900 --> 00:04:13,800 stocks, growth, stocks, crypto options, real estate, physical 88 00:04:13,800 --> 00:04:16,100 real estate, right? There's lots of different chats 89 00:04:16,100 --> 00:04:18,300 and discussions and people that specialize in all different 90 00:04:18,300 --> 00:04:19,800 things. If you want to check that out, 91 00:04:19,800 --> 00:04:22,200 there's a link in the description and the reason that 92 00:04:22,200 --> 00:04:24,500 I mention it is because if you join right now, you will not be 93 00:04:24,500 --> 00:04:26,800 charged today. You won't be charged today. 94 00:04:26,800 --> 00:04:29,800 In fact, your first charge will be the beginning of next. 95 00:04:29,900 --> 00:04:31,900 A month. So you get a free trial from now 96 00:04:31,900 --> 00:04:33,700 till next month. So check that out. 97 00:04:33,700 --> 00:04:35,000 The link in the description below. 98 00:04:35,000 --> 00:04:36,200 All right. Now, let's go ahead and jump 99 00:04:36,200 --> 00:04:39,000 right in this again, is the story fun, it's an aggressive 100 00:04:39,000 --> 00:04:42,400 growth centered technology. Focus portfolio, where I'm 101 00:04:42,400 --> 00:04:45,200 investing in these companies for a minimum of five years. 102 00:04:45,200 --> 00:04:48,400 That's my timeline, that's how I'm underwriting them is how I 103 00:04:48,400 --> 00:04:50,900 think events will unfold over the next five years. 104 00:04:50,900 --> 00:04:53,900 So these aren't like, quick short term trades. 105 00:04:54,200 --> 00:04:57,100 I'm not trying to do timely Market trades of where the 106 00:04:57,100 --> 00:04:58,500 market will go. The next three months. 107 00:04:58,500 --> 00:04:59,800 That's not the goal of this portfolio. 108 00:04:59,900 --> 00:05:03,200 Now I track it every single week week by week and show the 109 00:05:03,200 --> 00:05:07,100 performance and so far, it's underperformed, the S&P 500 and 110 00:05:07,100 --> 00:05:10,500 we'll get into the reasons why. Now, before going into all of 111 00:05:10,500 --> 00:05:13,200 this, there is one thing I want to mention a lot of people have 112 00:05:13,200 --> 00:05:15,400 said, this is why you invest in index funds. 113 00:05:15,400 --> 00:05:18,700 And this is why you invest in, you know, ETFs and I completely 114 00:05:18,700 --> 00:05:22,200 agree with diversification. And I think it needs to be 115 00:05:22,207 --> 00:05:23,500 pointed out, time and time again. 116 00:05:23,500 --> 00:05:26,700 I am Diversified, I do have another portfolio. 117 00:05:26,700 --> 00:05:29,000 That is a dividend growth portfolio. 118 00:05:29,000 --> 00:05:31,500 That invest in an entire By early different type of company. 119 00:05:31,800 --> 00:05:35,800 So I do have companies like apple and Microsoft is Big 120 00:05:35,800 --> 00:05:39,000 Holdings in this one. I have companies like, you know, 121 00:05:39,000 --> 00:05:42,300 Costco Disney Home Depot Nike Target in this one that I don't 122 00:05:42,300 --> 00:05:45,100 have in the story fund, and I even have large positions in 123 00:05:45,100 --> 00:05:49,800 ETFs like s CH D and S CH G. So I am Diversified, I don't 124 00:05:49,800 --> 00:05:51,900 have all my money in the story fund. 125 00:05:52,000 --> 00:05:55,000 And in general, if you're just looking at personal financial 126 00:05:55,200 --> 00:05:58,800 Financial tips, my thoughts are you should always max out your 127 00:05:58,800 --> 00:06:01,800 401 k. So Your employer has a 401k 128 00:06:01,800 --> 00:06:06,500 match max out that 401k match. Next, you do your Roth IRA maxed 129 00:06:06,500 --> 00:06:08,900 out every single year because that's tax free money. 130 00:06:09,300 --> 00:06:12,400 After that, you can start doing the individual portfolios and 131 00:06:12,400 --> 00:06:14,500 even then you should have probably the majority of your 132 00:06:14,500 --> 00:06:16,800 money in ETFs. There's lots of good ones. 133 00:06:16,800 --> 00:06:20,200 So that's all the advice. I'd give to anyone generally 134 00:06:20,200 --> 00:06:24,200 speaking, this portfolio is all individual companies, but again, 135 00:06:24,200 --> 00:06:26,300 I'm already heavily Diversified. I have a lot of different 136 00:06:26,300 --> 00:06:29,600 companies so I'm not taking an extreme amount of concentrated 137 00:06:29,600 --> 00:06:31,500 risk. Ask with just the story fund. 138 00:06:31,500 --> 00:06:33,300 That's not where all of my net worth is. 139 00:06:33,400 --> 00:06:36,500 Now, let's go ahead and look at how this has worked. 140 00:06:36,500 --> 00:06:39,700 So far, here is an overview of everything that's happened over 141 00:06:39,700 --> 00:06:42,400 the past years, since starting this portfolio. 142 00:06:42,500 --> 00:06:44,700 Let's go ahead and zoom in to where it all started. 143 00:06:45,100 --> 00:06:48,600 The purpose of this portfolio. The reason that I started it was 144 00:06:48,700 --> 00:06:50,800 I'm a content creator at create YouTube videos. 145 00:06:50,800 --> 00:06:54,400 I have one channel that tracks the dividend portfolio and that 146 00:06:54,400 --> 00:06:56,600 one has grown to be a very successful Channel. 147 00:06:56,900 --> 00:06:58,800 It has about a quarter million subscribers. 148 00:06:59,400 --> 00:07:01,800 It gets A lot of views every single video and it's been fun 149 00:07:01,800 --> 00:07:05,700 to do that, but I have had a lot of people asked, Joseph, what 150 00:07:05,707 --> 00:07:07,600 are your thoughts on these different tech companies? 151 00:07:07,600 --> 00:07:09,300 These different growth companies, right? 152 00:07:09,300 --> 00:07:11,700 Not just the dividend ones that you usually invest in. 153 00:07:11,700 --> 00:07:14,100 So I started giving my thoughts on different growth companies 154 00:07:14,100 --> 00:07:16,900 and tech companies. And I decided, you know what, 155 00:07:16,900 --> 00:07:20,000 this might make for an interesting content to see my 156 00:07:20,000 --> 00:07:23,800 investments in tech companies over a five-year time Horizon 157 00:07:23,800 --> 00:07:27,600 and see how they turn out and that was when the story fund as 158 00:07:27,600 --> 00:07:29,600 we know it was kind of kind of born. 159 00:07:29,600 --> 00:07:33,500 That's Where it started. So I start off the story fund, 160 00:07:33,800 --> 00:07:37,900 its 100% tech companies and at the beginning, I had many of the 161 00:07:37,900 --> 00:07:40,100 smaller more speculative tech companies. 162 00:07:40,400 --> 00:07:44,200 Speculation means companies that are not Blue Chip companies. 163 00:07:44,400 --> 00:07:47,200 They're not your Coca-Cola's and Walmart's their companies that 164 00:07:47,200 --> 00:07:49,000 don't really have a lot of free cash flow. 165 00:07:49,300 --> 00:07:51,100 They might have a lot of growth, but they're deluding 166 00:07:51,100 --> 00:07:54,200 shareholders there, in industries that are even more 167 00:07:54,300 --> 00:07:58,400 more Niche or in general, they're just not as established, 168 00:07:58,500 --> 00:08:01,000 you're speculating on your Taking more risk on them. 169 00:08:01,100 --> 00:08:04,500 The outcome of them is less certain and my portfolio had 170 00:08:05,000 --> 00:08:07,300 some big tech companies that were not speculation in my 171 00:08:07,300 --> 00:08:09,400 opinion, but a lot of the smaller ones that were 172 00:08:09,400 --> 00:08:11,300 speculation. I had a lot of companies like 173 00:08:11,300 --> 00:08:17,300 Peloton crowdstrike, atlassian cltd Shopify doordash, right? 174 00:08:17,500 --> 00:08:20,000 He's more, you know, they're just more speculative, they're 175 00:08:20,000 --> 00:08:22,300 more risky companies, they're smaller tech companies that are 176 00:08:22,300 --> 00:08:24,100 less established. And when I started the 177 00:08:24,100 --> 00:08:27,400 portfolio, I had a lot of those companies, as well, as a lot of 178 00:08:27,407 --> 00:08:30,800 Blue Chip companies like apple, Microsoft, Amazon On Google in 179 00:08:30,800 --> 00:08:34,400 the portfolio. So I had a decent mix but a good 180 00:08:34,400 --> 00:08:37,600 amount of the portfolio was speculative and again this is 181 00:08:38,000 --> 00:08:42,600 this is at the tail end of 2020. At this time you could pick a 182 00:08:42,600 --> 00:08:45,700 basket of speculative companies they didn't need to have strong 183 00:08:45,700 --> 00:08:48,300 fundamentals and it didn't really matter at the tail end of 184 00:08:48,300 --> 00:08:51,500 2020 and all through 2020. Those companies just went up 185 00:08:51,500 --> 00:08:55,000 every single day right away my portfolio, even though it was 186 00:08:55,000 --> 00:08:58,100 really volatile. Begin to steadily outperformed, 187 00:08:58,100 --> 00:09:01,900 the S&P 500 and even the QQ it outperformed both of them for 188 00:09:01,900 --> 00:09:04,600 like the first four months. So a lot of people thought I was 189 00:09:04,600 --> 00:09:06,800 a genius investor than I'm investing. 190 00:09:06,800 --> 00:09:08,600 In these companies. They're going up every single 191 00:09:08,600 --> 00:09:10,600 day. People are saying I'm picking 192 00:09:10,600 --> 00:09:12,300 out good stocks because they're going up every day. 193 00:09:12,700 --> 00:09:16,400 When in reality, the reality of the situation is it was mostly 194 00:09:16,400 --> 00:09:18,400 momentum. These stocks just had a lot of 195 00:09:18,400 --> 00:09:22,500 money piling into them pushing the prices Higher and Higher and 196 00:09:22,500 --> 00:09:26,400 then it hit a peak right around the beginning, like February of 197 00:09:26,400 --> 00:09:31,900 2021 speculation at this time. Those type of companies, hit an 198 00:09:31,900 --> 00:09:34,200 all-time high and you can see this. 199 00:09:34,200 --> 00:09:37,300 I outline it right here. This is right when the ark 200 00:09:37,300 --> 00:09:41,700 invest ETF the flagship one hit, it's almost ultimate Peak that 201 00:09:41,700 --> 00:09:44,500 was right here. The most speculative companies 202 00:09:45,000 --> 00:09:48,900 started to correct very sharply. So like a month later you can 203 00:09:48,900 --> 00:09:50,900 see the dramatic decline here in price. 204 00:09:51,200 --> 00:09:55,000 And with Arc invest in, even the more speculative portfolios this 205 00:09:55,000 --> 00:09:58,700 correction was even sharper. So I have my portfolio, it 206 00:09:58,700 --> 00:10:01,400 starts climbing up. Above the S&P 500 because of 207 00:10:01,400 --> 00:10:04,100 massive momentum. In all of these stocks in the 208 00:10:04,100 --> 00:10:07,100 market starts to get a little spooked out of the valuations 209 00:10:07,100 --> 00:10:09,700 and the speculative nature of these companies and the 210 00:10:09,700 --> 00:10:12,700 long-awaited correction for these type of companies, 211 00:10:12,700 --> 00:10:15,800 including especially the ones like in Ark, invest it finally 212 00:10:15,800 --> 00:10:17,300 happened. I think that was the most 213 00:10:17,300 --> 00:10:21,400 notable time period of 2021. When this Bubble at least the 214 00:10:21,408 --> 00:10:24,600 first bubble of the most speculative companies started to 215 00:10:24,608 --> 00:10:26,800 correct. My portfolio shot down and 216 00:10:26,800 --> 00:10:27,900 performance. Quite a bit. 217 00:10:28,100 --> 00:10:31,800 In fact, it went down and Oz below the S&P 500, then quickly 218 00:10:31,800 --> 00:10:35,100 back up and then it started to trade more in line with the S&P 219 00:10:35,100 --> 00:10:38,100 500. This is where we move on to, I 220 00:10:38,100 --> 00:10:40,500 think another important part here, see this Arrow right here 221 00:10:40,500 --> 00:10:43,400 is pointing to where cloud computing companies and the more 222 00:10:43,400 --> 00:10:47,200 speculative companies hit an all-time low, the speculation 223 00:10:47,200 --> 00:10:50,400 again, hit a peak right here. This is one like the ark ETF is 224 00:10:50,400 --> 00:10:53,400 way at its Spike minute, traded down steeply. 225 00:10:53,800 --> 00:10:56,400 And the companies that really got hurt the most in April of 226 00:10:56,400 --> 00:10:59,100 2021 where the cloud computing companies. 227 00:10:59,400 --> 00:11:03,100 But Interestingly, there is this big rally with these companies 228 00:11:03,300 --> 00:11:07,100 and they moved up 40% over, just the next couple of months and 229 00:11:07,100 --> 00:11:09,800 this is where things get really critical for my portfolio. 230 00:11:09,800 --> 00:11:12,800 So we'll move into that in just a second but I just want to go 231 00:11:12,800 --> 00:11:14,100 through and review this for a minute. 232 00:11:14,500 --> 00:11:17,800 Again, I start my portfolio off the last trailing couple of 233 00:11:17,800 --> 00:11:19,800 months of 2020. So right at the tail end of 234 00:11:19,800 --> 00:11:24,300 2020, I started up and it has a mixture of Blue Chip, tech 235 00:11:24,300 --> 00:11:29,000 companies like big Tech Plus Salesforce and Adobe but I also 236 00:11:29,000 --> 00:11:31,500 have a lot of other companies that are at very lofty 237 00:11:31,500 --> 00:11:35,300 valuations. They trade up with momentum to 238 00:11:35,300 --> 00:11:38,400 outperformed the S&P 500 by huge extent. 239 00:11:38,400 --> 00:11:41,500 I was up above spy by like 25 percent, right? 240 00:11:41,600 --> 00:11:44,700 So, that is momentum carrying these smaller companies into the 241 00:11:44,700 --> 00:11:46,700 green further and further every single day. 242 00:11:47,100 --> 00:11:50,400 And then the big speculative bubble starts to pop these 243 00:11:50,400 --> 00:11:54,000 companies shift back down. My big blue, chip companies are 244 00:11:54,000 --> 00:11:57,700 not popping at this point. So my portfolio is faring, okay? 245 00:11:57,700 --> 00:11:59,500 It move down a little bit but not anything. 246 00:11:59,800 --> 00:12:02,000 Cool. And then we move right here 247 00:12:02,100 --> 00:12:04,700 where the cloud computing companies traded down too much. 248 00:12:04,700 --> 00:12:08,000 They start to Rally to the point where they again get to this 249 00:12:08,000 --> 00:12:10,500 valuation of where they were at the beginning of the year. 250 00:12:10,900 --> 00:12:13,600 And that's where we are throughout all this time. 251 00:12:13,600 --> 00:12:15,600 Period. And keep in mind, while all of 252 00:12:15,600 --> 00:12:18,300 this is happening. While all this is playing out, 253 00:12:18,700 --> 00:12:20,600 I'm reading more headlines about inflation. 254 00:12:20,900 --> 00:12:23,400 And the FED becoming more and more aggressive at raising 255 00:12:23,400 --> 00:12:25,600 interest rates. And I know that speculative 256 00:12:25,600 --> 00:12:28,400 cloud computing companies that trade at really lofty price to 257 00:12:28,400 --> 00:12:31,800 sales valuations. Way above their historical Norm 258 00:12:31,900 --> 00:12:34,900 are probably going to do really poorly if interest rates start 259 00:12:34,900 --> 00:12:37,400 to rise like crazy. And that's what I'm starting to 260 00:12:37,400 --> 00:12:40,800 think. As these companies trade up 40% 261 00:12:40,800 --> 00:12:44,100 in a couple of months, I'm thinking, man they're way above 262 00:12:44,100 --> 00:12:47,400 their historical valuations. What I did was I looked at all 263 00:12:47,400 --> 00:12:50,300 these companies that I own that are the more speculative ones 264 00:12:50,900 --> 00:12:53,300 and I look at the valuations compared to their historical 265 00:12:53,300 --> 00:12:56,400 Norm over the past 10 years and these type of companies like 266 00:12:56,400 --> 00:12:59,500 crowdstrike atlassian, doordash Facebook cltd. 267 00:13:00,400 --> 00:13:06,100 They were trading at price to sales on average of 17, 17, 268 00:13:06,100 --> 00:13:09,500 price to sales when their historical Norm is about 9 or 269 00:13:09,500 --> 00:13:12,300 10. So historical Norm 9 or 10. 270 00:13:12,400 --> 00:13:15,900 They're trading at a 17 and I'm starting to feel very uneasy 271 00:13:15,900 --> 00:13:18,300 about carrying these companies in my portfolio. 272 00:13:18,700 --> 00:13:21,600 Then I also see some really bad news with certain companies like 273 00:13:21,600 --> 00:13:24,100 Peloton Peloton, for example, had this report that they're 274 00:13:24,100 --> 00:13:27,800 losing demand and as soon as I saw the report that Peloton was 275 00:13:27,900 --> 00:13:31,100 having troubles with demand, I knew We might be in a bubble at 276 00:13:31,100 --> 00:13:33,300 the stock. So I sold off a pellet on 277 00:13:33,800 --> 00:13:36,400 Facebook. I also sold because we had Mark 278 00:13:36,400 --> 00:13:38,600 Zuckerberg spooking investors saying that he's putting 279 00:13:38,600 --> 00:13:41,600 everything into reality labs and he's going to do this full 280 00:13:41,600 --> 00:13:45,200 metaverse change with the name change and I sold Facebook at 281 00:13:45,200 --> 00:13:47,500 350, that was one of my best cells. 282 00:13:48,100 --> 00:13:51,300 All of these companies were in my portfolio at one point 283 00:13:51,300 --> 00:13:55,500 crowdstrike, atlassian doordash, Facebook cltd, palette on 284 00:13:55,500 --> 00:13:59,900 Shopify and Snowflake and I sold every single one of them, right? 285 00:14:00,000 --> 00:14:03,800 Right around this time, period. This is around, you know, 286 00:14:03,900 --> 00:14:07,500 september/october of of last year of 2021. 287 00:14:07,700 --> 00:14:10,800 I'm selling out of all the speculative companies and the 288 00:14:10,800 --> 00:14:13,400 only non-speculative company that I sell is basically 289 00:14:13,400 --> 00:14:16,400 Facebook because I don't like the future metaverse plans. 290 00:14:16,400 --> 00:14:19,100 And I explained that in a video. Now, these turned out in 291 00:14:19,100 --> 00:14:22,000 hindsight to be very good cells for my portfolio. 292 00:14:22,300 --> 00:14:24,800 I didn't know that they'd be so good when I was selling them. 293 00:14:25,000 --> 00:14:27,300 I thought I was just being cautious and taking some gains 294 00:14:27,300 --> 00:14:30,900 and companies that have run up to locked evaluation But in 295 00:14:30,900 --> 00:14:34,300 hindsight, these were tremendously good, fortuitous 296 00:14:34,300 --> 00:14:37,200 cells for my portfolio. I took gains and crowdstrike, 297 00:14:37,200 --> 00:14:38,900 atlassian. I made a lot of gains in that 298 00:14:38,900 --> 00:14:41,400 company doordash. I was pretty neutral and I don't 299 00:14:41,400 --> 00:14:43,700 really lose a lot of money or make gains in that company. 300 00:14:43,900 --> 00:14:46,600 Facebook, I locked in a lot of gains on at 350. 301 00:14:46,600 --> 00:14:50,300 A share, that was a good one to sell cltd, I locked in gains on 302 00:14:50,300 --> 00:14:53,000 that one Peloton. I even turned out to be one of 303 00:14:53,000 --> 00:14:55,200 the few investors that made gains on this stock. 304 00:14:55,400 --> 00:14:57,500 I bought it when it was much lower and sold it at a decent 305 00:14:57,500 --> 00:15:01,700 valuation, then Shopify and I think I did okay in both of 306 00:15:01,708 --> 00:15:03,500 those as well. So while I sold out of these 307 00:15:03,500 --> 00:15:06,300 companies and I'm feeling good about it at this point because I 308 00:15:06,300 --> 00:15:09,900 sold them, I think at a good valuation, and in hindsight, 309 00:15:09,900 --> 00:15:11,600 these are all very good cells, right? 310 00:15:11,600 --> 00:15:13,600 They all took a nosedive after I sold them. 311 00:15:13,800 --> 00:15:15,700 So I locked into ten thousand dollars of gains. 312 00:15:15,700 --> 00:15:18,700 I'm feeling good at this point. My portfolio still kind of 313 00:15:18,800 --> 00:15:21,800 keeping up with the S&P 500 even though it's a tech portfolio. 314 00:15:21,800 --> 00:15:24,800 So it should be under performing at during this time, but I was 315 00:15:24,800 --> 00:15:27,100 doing okay. And I felt good up until this 316 00:15:27,100 --> 00:15:29,700 time. But unfortunately, even though I 317 00:15:29,700 --> 00:15:33,700 dodged the All the Facebook selling down 40% and PayPal 318 00:15:33,700 --> 00:15:37,400 selling down, you know, 70%, there is one company I kept in 319 00:15:37,400 --> 00:15:40,900 My Portfolio that would go on to hurt my performance a lot which 320 00:15:40,900 --> 00:15:44,000 was Netflix and we'll get into that in just a minute here. 321 00:15:44,700 --> 00:15:47,700 After this point, we have the beginning of 2020. 322 00:15:47,700 --> 00:15:49,800 The end of 2021. That's right. 323 00:15:49,800 --> 00:15:53,700 Where we are right now. Concerns of recession inflation 324 00:15:54,000 --> 00:15:58,100 and the FED raising interest rates continues to grow the fear 325 00:15:58,100 --> 00:16:00,200 and greed M moves to an even more fair. 326 00:16:00,300 --> 00:16:02,900 Awful stance. At this point, sentiment starts 327 00:16:02,900 --> 00:16:06,300 to become very bearish overall and technology companies in 328 00:16:06,300 --> 00:16:09,200 general, start to trade down pretty aggressively the 329 00:16:09,200 --> 00:16:12,300 companies that are doing good at the beginning of the year are 330 00:16:12,300 --> 00:16:14,700 the Berkshire. Hathaway companies, this is 331 00:16:14,700 --> 00:16:17,900 where it's buffets time to shine because he has a lot of the 332 00:16:17,900 --> 00:16:20,400 consumer defensive companies. He has a lot of the oil 333 00:16:20,400 --> 00:16:23,000 companies that are just going through the roof at this point. 334 00:16:23,200 --> 00:16:26,200 People love the oil companies, the commodity companies, they 335 00:16:26,200 --> 00:16:29,300 love the defensive consumer companies and those are trading 336 00:16:29,300 --> 00:16:33,200 up while Tech companies start to sell off and this is where we 337 00:16:33,200 --> 00:16:35,600 get to wear my portfolio starts to get damaged. 338 00:16:35,600 --> 00:16:38,600 Okay. Now we get to Netflix before 339 00:16:38,600 --> 00:16:41,200 this time period of Netflix. I wasn't really feeling too bad. 340 00:16:41,200 --> 00:16:44,400 In fact, I wasn't concerned at all because you look at this, 341 00:16:44,400 --> 00:16:47,700 we're like three or four percent below, the S&P 500, and that's 342 00:16:47,700 --> 00:16:51,100 being invested in a tech portfolio, which I should be far 343 00:16:51,100 --> 00:16:53,600 below, right? We have like Arc, invest, its 344 00:16:53,600 --> 00:16:56,300 down a ton. We have tiger Global, that's 345 00:16:56,300 --> 00:16:58,600 down a ton. We have cacao and all these 346 00:16:58,600 --> 00:17:01,400 different hedge fund manager. Is that are down a ton when 347 00:17:01,400 --> 00:17:03,200 they're focused on tech companies. 348 00:17:03,400 --> 00:17:05,500 But because I'm mostly hiding out in big Tech. 349 00:17:05,900 --> 00:17:08,700 My performance is doing okay, I have Google that's doing okay. 350 00:17:08,900 --> 00:17:11,700 I have Microsoft and Apple is doing okay, and they're keeping 351 00:17:11,700 --> 00:17:14,599 my portfolio, pretty much in line with the S&P 500. 352 00:17:14,800 --> 00:17:18,200 Maybe a couple percent below it, but then we get to Netflix and 353 00:17:18,200 --> 00:17:21,000 things start to change. This is a doozy. 354 00:17:21,000 --> 00:17:25,300 This is where it just. I got my one that caused me some 355 00:17:25,300 --> 00:17:27,200 pain hair, and everybody has that stock. 356 00:17:27,200 --> 00:17:30,500 If you do individual investing, whether it's Facebook, that Is 357 00:17:30,500 --> 00:17:33,800 the off guard or PayPal. Most people have a stock that it 358 00:17:33,800 --> 00:17:35,200 just doesn't go the way that you want. 359 00:17:35,200 --> 00:17:37,700 And for me, this one so far is Netflix. 360 00:17:38,200 --> 00:17:42,200 Netflix reports their Q4 report of 2021. 361 00:17:42,700 --> 00:17:45,400 And if you recall, this is when they're supposed to have a lot 362 00:17:45,400 --> 00:17:48,200 of subscribers gained, they had squid game blow up. 363 00:17:48,400 --> 00:17:52,900 They had don't look up the Leonardo DiCaprio movie, right? 364 00:17:52,900 --> 00:17:55,600 And it's the holiday season. So they're supposed to get a lot 365 00:17:55,600 --> 00:17:58,000 of subscribers. They missed their subscriber 366 00:17:58,000 --> 00:18:00,100 gains, or at least they barely match them. 367 00:18:00,600 --> 00:18:03,600 And not only that they gave really weak guidance for q1 of 368 00:18:03,600 --> 00:18:05,700 2022. They said that they're only 369 00:18:05,700 --> 00:18:08,400 going to gain 2 million subscribers compared to the 370 00:18:08,400 --> 00:18:10,700 street expecting five million because that's normally a good 371 00:18:10,700 --> 00:18:15,900 quarter for them. The stock Falls 30% After Hours 372 00:18:15,900 --> 00:18:19,700 the next day because of Netflix is really poor report and keep 373 00:18:19,700 --> 00:18:23,100 in mind that out of all the companies reporting Netflix is 374 00:18:23,100 --> 00:18:25,700 the first one to report. It's the first big company to 375 00:18:25,700 --> 00:18:29,300 report which makes its report very volatile because investors 376 00:18:29,300 --> 00:18:33,300 don't know what to expect. So false 30%, then Bill Ackman 377 00:18:33,300 --> 00:18:35,500 jumps in with a billion-dollar by of Netflix. 378 00:18:35,700 --> 00:18:37,800 It goes up like sixteen percent plus. 379 00:18:37,800 --> 00:18:39,800 A lot of my other stocks jump as well. 380 00:18:40,100 --> 00:18:42,400 The performance almost goes right back up to where it was 381 00:18:42,700 --> 00:18:45,900 and then it starts to trade down again and I really volatile way, 382 00:18:46,300 --> 00:18:49,200 but even up till this point my portfolio is doing okay. 383 00:18:49,400 --> 00:18:52,900 I was still in the green. I was, you know, like 10-15 384 00:18:52,900 --> 00:18:56,300 percent below, the S&P 500, but that Gap can be made up very 385 00:18:56,300 --> 00:18:58,200 quickly, right? So, I'm not really worried at 386 00:18:58,200 --> 00:19:01,700 this point, and I realize that in the The short term with the 387 00:19:01,700 --> 00:19:04,700 FED being hawkish and interest rates going up that these tech 388 00:19:04,700 --> 00:19:07,500 companies are going to have a difficult time, but Netflix was 389 00:19:07,500 --> 00:19:10,200 a huge surprise. So that hurt my portfolio 390 00:19:10,200 --> 00:19:12,300 Netflix. Now, I'm in the red, they had 391 00:19:12,300 --> 00:19:16,500 their first really bad report stocks down 30% and I bought a 392 00:19:16,500 --> 00:19:18,800 little bit of the dip Bill. Ackman is in on the stock. 393 00:19:18,800 --> 00:19:21,700 Now he bought a billion dollars of it and I'm thinking okay 394 00:19:21,700 --> 00:19:24,800 there's still a chance with Netflix said you know they 395 00:19:24,900 --> 00:19:27,600 sandbag their guidance and they'll have an outperformance 396 00:19:27,600 --> 00:19:30,100 next quarter and that's not what happens. 397 00:19:30,300 --> 00:19:32,800 So Netflix at this point is still down a lot from its 398 00:19:32,800 --> 00:19:36,000 all-time high and I still have it as a significant portion of 399 00:19:36,008 --> 00:19:38,500 my portfolio. I have like 13 or 14 thousand 400 00:19:38,500 --> 00:19:43,500 dollars in it and then they have their their q1 of 2022 report 401 00:19:43,500 --> 00:19:47,100 come out and they actually lost subscribers in. 402 00:19:47,100 --> 00:19:50,200 This is something that I don't care who you are, if you are an 403 00:19:50,208 --> 00:19:54,200 investor in Netflix, you are not expecting them to lose net 404 00:19:54,200 --> 00:19:56,400 subscribers. It's never happened in, like the 405 00:19:56,400 --> 00:20:00,100 last 10 years, they forecasted to million gain and the loss. 406 00:20:00,200 --> 00:20:04,300 Us 200,000 a massive Miss on their forecasts and Bill. 407 00:20:04,300 --> 00:20:09,500 Ackman me the rest of the street investors are shocked at it and 408 00:20:09,600 --> 00:20:14,700 deservedly the stock cells down 40%, an additional 40%. 409 00:20:15,000 --> 00:20:18,700 So now overall I'm down 50, 60 percent on Netflix. 410 00:20:18,900 --> 00:20:22,100 I've lost over half of my money on this individual holding. 411 00:20:22,100 --> 00:20:24,900 So Netflix has hurt my portfolio, a lot, but just in 412 00:20:24,900 --> 00:20:27,100 general, a lot of the companies that I was in the green on 413 00:20:27,100 --> 00:20:30,100 adobe's, Salesforce Microsoft, Apple, Google. 414 00:20:30,400 --> 00:20:32,900 They're starting to give up some gains as well and trade back 415 00:20:32,900 --> 00:20:35,300 down. So the portfolio just at this 416 00:20:35,300 --> 00:20:39,300 point with this Netflix Miss again, it just crushes the 417 00:20:39,300 --> 00:20:42,400 performance right now. Now to add on to this, I had a, 418 00:20:42,500 --> 00:20:44,600 you know, this is a double whammy here because right after 419 00:20:44,600 --> 00:20:47,600 Netflix gives this awful report, I mean, this is just a 420 00:20:47,600 --> 00:20:51,300 fundamentally terrible report by Netflix and the stock deservedly 421 00:20:51,300 --> 00:20:55,200 fell 40 percent. We have Amazon right afterwards, 422 00:20:55,200 --> 00:20:58,400 just a couple weeks later giving their first quarter report, 423 00:20:58,400 --> 00:21:01,500 which was disappointing. Now, There is some significant 424 00:21:01,500 --> 00:21:03,600 differences, here. I think that Netflix is was 425 00:21:03,600 --> 00:21:07,000 really fundamentally bad, like the report was just awful, 426 00:21:07,500 --> 00:21:10,200 Amazon's I don't think so. I think this street is, is 427 00:21:10,200 --> 00:21:13,600 overreacting in my opinion. I think the Amazon is not 428 00:21:13,600 --> 00:21:16,500 fundamentally in a bad bad position here, but regardless, 429 00:21:16,800 --> 00:21:20,300 Amazon sold down 12%. And since I have a significant 430 00:21:20,300 --> 00:21:23,100 portion of my portfolio on Amazon, it has an outsized 431 00:21:23,100 --> 00:21:26,400 effect on my performance, causing it to drop down a little 432 00:21:26,400 --> 00:21:28,400 bit more hair. So, this is what it looks like 433 00:21:28,400 --> 00:21:30,600 overall. Obviously, it looks Ugly right 434 00:21:30,600 --> 00:21:34,100 now, I'm under performing as of right now, but keep in mind, 435 00:21:34,100 --> 00:21:36,500 this is gone both ways. In fact, the majority of the 436 00:21:36,500 --> 00:21:40,000 past year, my portfolio has been above the S&P 500. 437 00:21:40,200 --> 00:21:42,500 So it's gone through time periods of outperformance. 438 00:21:42,700 --> 00:21:45,300 Just over the past four months, it's been hit a lot. 439 00:21:45,300 --> 00:21:48,200 There's been huge sell-off in different companies and Tech in 440 00:21:48,200 --> 00:21:50,200 general, is having a very difficult time because of this 441 00:21:50,200 --> 00:21:53,600 Market rotation. So, while I'd like to outperform 442 00:21:53,700 --> 00:21:57,000 preferably over every single time, period that would require 443 00:21:57,000 --> 00:22:00,700 me to do a lot of Swing trading, a moving into different Trades 444 00:22:00,700 --> 00:22:04,800 like the oil consumer defensive trade instead of just dollar 445 00:22:04,800 --> 00:22:07,600 cost averaging in and focusing on companies that I think are 446 00:22:07,600 --> 00:22:09,900 really good value within the tech portfolio. 447 00:22:09,900 --> 00:22:12,100 So I'm not really doing that swing trading. 448 00:22:12,400 --> 00:22:14,600 I realize I'm going to underperform As Long As interest 449 00:22:14,600 --> 00:22:17,800 rates are the main headline but I'm willing to go through that 450 00:22:17,900 --> 00:22:19,500 in the meantime. So I know a lot of you are 451 00:22:19,500 --> 00:22:21,600 looking at this and think and thirty thousand dollars in 452 00:22:21,600 --> 00:22:23,800 losses. There's no way I can put this 453 00:22:23,800 --> 00:22:27,100 back into the green and catch up against the S&P 500, right? 454 00:22:27,100 --> 00:22:29,300 And I don't blame you if you think that that's fine, but 455 00:22:29,300 --> 00:22:32,200 again I'm going to be Rocking this every week week by week 456 00:22:32,200 --> 00:22:35,000 until the end of 2025. So if you want to see how this 457 00:22:35,000 --> 00:22:38,100 turns out, and if I'm able to catch up against pie, just 458 00:22:38,100 --> 00:22:40,100 subscribe to the channel and you can follow along for free. 459 00:22:40,400 --> 00:22:43,300 You can find out with me because I don't know the future, maybe 460 00:22:43,300 --> 00:22:46,000 I'll catch back up, maybe I won't either way, we'll find out 461 00:22:46,000 --> 00:22:48,700 together. Now, I want to go through what I 462 00:22:48,708 --> 00:22:52,200 think has gone on right now and the valuation of the companies 463 00:22:52,200 --> 00:22:55,600 that I own in my portfolio, like I said, I only own nine 464 00:22:55,600 --> 00:22:57,700 companies. Now, one of which I consider to 465 00:22:57,708 --> 00:23:01,200 be speculative, which is Spotify and it's a A very small holding. 466 00:23:01,500 --> 00:23:04,200 So basically, what I've done is, I've moved out all the 467 00:23:04,200 --> 00:23:07,900 speculative tech companies and I've piled into companies that I 468 00:23:07,908 --> 00:23:10,200 consider to be a lot less speculative. 469 00:23:10,200 --> 00:23:12,900 These are the Blue Chip tech companies that I think are 470 00:23:12,900 --> 00:23:15,900 trading at a very, very attractive valuations, 471 00:23:16,200 --> 00:23:18,300 especially considering the recent sell-off in these 472 00:23:18,300 --> 00:23:20,200 companies. I think some of them have been 473 00:23:20,200 --> 00:23:22,900 heavily oversold, so let me try to go ahead and illustrate this 474 00:23:22,900 --> 00:23:24,800 point evaluation. The first thing that I want to 475 00:23:24,800 --> 00:23:28,600 point out is again, we are in a fearful posture right now. 476 00:23:28,800 --> 00:23:30,600 Everyone's afraid of drones, Alan what? 477 00:23:30,600 --> 00:23:33,000 He's going to say. An interest rates and inflation 478 00:23:33,300 --> 00:23:35,700 and the big recession. That's going to happen, right? 479 00:23:35,900 --> 00:23:37,400 Everyone. Generally right now is 480 00:23:37,400 --> 00:23:40,200 pessimistic and bearish, and that is something that is 481 00:23:40,200 --> 00:23:42,400 objectively, clear? In fact, if we look over at a 482 00:23:42,400 --> 00:23:45,300 time line, we're still in the fair category, and we've gone 483 00:23:45,300 --> 00:23:48,400 from times of extreme greed, when companies were trading 484 00:23:48,400 --> 00:23:51,300 really high down to this Fair full category. 485 00:23:51,300 --> 00:23:53,200 So that's where we sit right now. 486 00:23:53,500 --> 00:23:58,300 The S&P 500 on a forward-looking basis is trading at an 18.6 Ford 487 00:23:58,300 --> 00:24:01,500 PE, so we can round. That up to like a 19, right? 488 00:24:01,500 --> 00:24:04,100 It's trading at a 19-4 PE. Let's go ahead and look at some 489 00:24:04,100 --> 00:24:06,900 companies in their valuations that aren't in my portfolio. 490 00:24:07,300 --> 00:24:12,100 We have Procter & Gamble trading at a 26 forward, P/E consumer 491 00:24:12,100 --> 00:24:16,100 defensive company, very mature, not really going anyplace real 492 00:24:16,100 --> 00:24:18,200 fast but it's a defensive company. 493 00:24:18,400 --> 00:24:20,300 That's good to hold during recessions, right? 494 00:24:20,300 --> 00:24:23,500 It'll it'll maintain the amount of money that you have trading 495 00:24:23,500 --> 00:24:26,600 at a 26 for PE. We have Kimberly Clark, very 496 00:24:26,600 --> 00:24:30,400 similar company trading at a 24. So these are both Trading A very 497 00:24:30,400 --> 00:24:32,800 much premium to the rest of the market, the rest of the markets 498 00:24:32,800 --> 00:24:37,000 trading on an 18 or 19, and we have Procter & Gamble at a 26 499 00:24:37,400 --> 00:24:40,500 Kimberly-Clark. A day 24, we have the Clorox 500 00:24:40,500 --> 00:24:43,300 company at a 26.6 forward. P/E. 501 00:24:43,500 --> 00:24:46,000 All of these companies are trading at a premium to the rest 502 00:24:46,000 --> 00:24:48,200 of the market. We have McDonald's trading at a 503 00:24:48,200 --> 00:24:52,400 25 for PE and we have CostCo trading on a 40 Ford PE because 504 00:24:52,400 --> 00:24:56,600 Costco is the ultimate defense company that still is growing at 505 00:24:56,600 --> 00:24:59,400 a somewhat decent pace, but you look at these type of companies, 506 00:24:59,400 --> 00:25:03,000 Costco McDonald's Clorox, Kimora Lee, Clark. 507 00:25:03,100 --> 00:25:05,900 And if you are invested in those type of companies, you are doing 508 00:25:05,900 --> 00:25:07,700 fine. You're not having any trouble. 509 00:25:08,000 --> 00:25:10,000 The investors that are having trouble right now are the ones 510 00:25:10,000 --> 00:25:12,200 invested in tech companies because these are the ones that 511 00:25:12,200 --> 00:25:14,600 you sell off when interest rates, go higher. 512 00:25:14,900 --> 00:25:16,900 So, let's go ahead and take a look at some of these companies. 513 00:25:17,000 --> 00:25:19,400 Amazon is my top holding my biggest conviction, over the 514 00:25:19,400 --> 00:25:21,900 next five years. The company on paper still looks 515 00:25:21,900 --> 00:25:24,500 expensive right now, so if you're basing this company off 516 00:25:24,500 --> 00:25:27,900 of just a normalized PE ratio, if that's the way that you're 517 00:25:27,900 --> 00:25:30,100 trading it, it should trade down another 50%. 518 00:25:30,200 --> 00:25:33,700 That if you're just basing off a PE, but Amazon's one of these 519 00:25:33,700 --> 00:25:37,300 companies that is clearly still in the investment stage. 520 00:25:37,400 --> 00:25:39,900 They did massive amounts of Investments last quarter and 521 00:25:39,900 --> 00:25:42,600 throughout the last year, in fact, just last quarter. 522 00:25:42,900 --> 00:25:45,400 This is almost comical how much free cash flow. 523 00:25:45,400 --> 00:25:51,100 They had - - 17.7 billion free cash flow in a three-month 524 00:25:51,100 --> 00:25:53,800 period that is a massive amount of free cash flow. 525 00:25:54,100 --> 00:25:57,300 The earnings of course were in the - a terrible headline 526 00:25:57,300 --> 00:26:00,000 because of the rivi in steak, the big right down there so they 527 00:26:00,100 --> 00:26:04,300 Had - 3.8 billion dollars in in earnings are the balance sheet 528 00:26:04,300 --> 00:26:08,100 is fine of the company but even the EPS shot into the - because 529 00:26:08,100 --> 00:26:11,100 of The Ravines takes. So this is a very scary way to 530 00:26:11,100 --> 00:26:12,700 look at Amazon. But the thing that I pay 531 00:26:12,700 --> 00:26:15,400 attention to and the reason that I'm still bullish on this 532 00:26:15,400 --> 00:26:20,300 company is because they did over 60 billion dollars of capex 533 00:26:20,300 --> 00:26:23,800 Investments over the trailing 12 months over 60 billion dollars 534 00:26:23,800 --> 00:26:26,800 which is more than any other big tech company, Apple and 535 00:26:26,800 --> 00:26:29,600 Microsoft included and they did that. 536 00:26:30,200 --> 00:26:31,500 Out the Looting, the shareholder at all. 537 00:26:31,800 --> 00:26:34,300 Their shares outstanding didn't go up at all. 538 00:26:34,600 --> 00:26:38,500 Meaning they invested 60 billion dollars into growing their 539 00:26:38,500 --> 00:26:41,900 Network, to double the size hiring, hundreds of thousands of 540 00:26:41,900 --> 00:26:45,100 new employees to keep up with demand and they did that without 541 00:26:45,100 --> 00:26:48,100 diluting the shareholder at all. That is pretty incredible. 542 00:26:48,400 --> 00:26:51,600 And in my opinion, I think that Amazon will be one of the 543 00:26:51,600 --> 00:26:54,100 biggest free cash flow generating machines over the 544 00:26:54,108 --> 00:26:57,800 next five years that thesis has not change because they're doing 545 00:26:57,800 --> 00:27:00,000 lots of Investments over the next couple of quarters. 546 00:27:00,100 --> 00:27:02,700 Has or they've done them in the past year, that doesn't change 547 00:27:02,700 --> 00:27:04,900 the amount of free cash flow that they'll generate in the 548 00:27:04,900 --> 00:27:06,700 future unless it's to the positive. 549 00:27:06,700 --> 00:27:10,600 So I see the Investments to Amazon's doing even though it 550 00:27:10,600 --> 00:27:12,800 causes short-term pain, and investors are running for the 551 00:27:12,800 --> 00:27:15,300 exits. I see it as an opportunity and I 552 00:27:15,308 --> 00:27:17,100 remain very bullish on this company. 553 00:27:17,100 --> 00:27:21,100 Over the next five years, I feel very confident personally and 554 00:27:21,100 --> 00:27:23,500 again, you don't have to follow me into these Investments but I 555 00:27:23,500 --> 00:27:26,100 feel very confident personally that I make a lot of money on 556 00:27:26,108 --> 00:27:28,400 this company. I will not end up in the red 557 00:27:28,400 --> 00:27:32,700 with it and I'm using This dip, this opportunity to buy more 558 00:27:32,700 --> 00:27:35,200 shares of the company. So I'll continue adding to my 559 00:27:35,200 --> 00:27:37,800 position as Amazon trades down this year. 560 00:27:37,800 --> 00:27:39,500 Now, just to go over these next ones quickly. 561 00:27:39,500 --> 00:27:42,600 My next biggest bet is Google, which I also think is heavily 562 00:27:42,600 --> 00:27:44,700 undervalued and it's being sold off. 563 00:27:44,700 --> 00:27:46,200 In these basket of tech companies. 564 00:27:46,400 --> 00:27:50,600 Google trades at a 24 and PE ratio while the S&P 500 trades 565 00:27:50,600 --> 00:27:55,000 at a 19-0, paying one PE ratio higher for Google. 566 00:27:55,300 --> 00:27:58,200 Knowing that it's a company that has a massive moat, they're 567 00:27:58,200 --> 00:28:00,000 doing massive amounts of share BuyBacks. 568 00:28:00,300 --> 00:28:03,400 They have 100 billion dollars of cash, over the amount of debt 569 00:28:03,400 --> 00:28:05,300 they have. And again, keep in mind that 570 00:28:05,300 --> 00:28:08,300 Kimberly-Clark Procter & Gamble, McDonald's. 571 00:28:08,300 --> 00:28:10,900 All these companies that are Laden with debt, and they don't 572 00:28:10,900 --> 00:28:14,500 have much growth are trading at almost double the PE ratio of 573 00:28:14,500 --> 00:28:16,100 Google. So, when I look at this, I think 574 00:28:16,100 --> 00:28:17,700 this company is probably undervalued. 575 00:28:18,000 --> 00:28:20,100 We have Microsoft another company that I think is 576 00:28:20,100 --> 00:28:22,600 undervalued, Microsoft is my third biggest, holding it trades 577 00:28:22,600 --> 00:28:25,300 at a 26, P/E ratio. It grows its free cash flow 578 00:28:25,300 --> 00:28:28,600 consistently while buying back shares consistently and I see a 579 00:28:28,600 --> 00:28:31,100 lot of growth in the future of my Soft with their cloud 580 00:28:31,100 --> 00:28:34,300 service, growing up, 50% year-over-year, we have Netflix. 581 00:28:34,300 --> 00:28:37,300 This is the one that struggling right now, Netflix is story has 582 00:28:37,300 --> 00:28:40,300 been terrible for the past year. It's traded down like crazy. 583 00:28:40,300 --> 00:28:42,800 I'm in the red, and it would be easy just to sell out of this 584 00:28:42,800 --> 00:28:45,700 company, but have to keep in mind that now it trades that an 585 00:28:45,700 --> 00:28:49,400 18 forward P/E ratio. So it's literally cheaper than 586 00:28:49,400 --> 00:28:52,600 the S&P 500, your pricing this based on a price to earnings 587 00:28:52,600 --> 00:28:55,000 basis. I think this company is just, 588 00:28:55,000 --> 00:28:57,200 it's just too cheap for me to sell out right now. 589 00:28:57,700 --> 00:29:01,300 And even though I expect a very Terrible earnings report next 590 00:29:01,300 --> 00:29:03,000 quarter. I could easily see Netflix 591 00:29:03,000 --> 00:29:06,000 trading down even more. I think that over the full year 592 00:29:06,000 --> 00:29:08,900 basis, they might actually be able to grow subscribers when we 593 00:29:08,900 --> 00:29:11,900 factor in Q4. So right now, this company looks 594 00:29:11,900 --> 00:29:13,800 like, you know, a broken company. 595 00:29:13,800 --> 00:29:15,700 Lots of competition, it's no longer growing. 596 00:29:16,100 --> 00:29:18,000 But again, it's priced at an 18 now. 597 00:29:18,000 --> 00:29:21,200 Next up, we have Ali Baba. This company has just traded 598 00:29:21,200 --> 00:29:25,000 down, basically, on General fears of China, and the Chinese 599 00:29:25,000 --> 00:29:28,900 government and the whole conflict with Ukraine has not 600 00:29:28,900 --> 00:29:30,500 helped this. Action. 601 00:29:30,500 --> 00:29:33,200 It's not helped investors become more confident and investing in 602 00:29:33,200 --> 00:29:35,500 Chinese companies and you can see that by what it's being 603 00:29:35,500 --> 00:29:39,800 priced at its being priced with a forward P/E of 10.6. 604 00:29:39,800 --> 00:29:42,600 So right around 10:50 and this is a company. 605 00:29:42,600 --> 00:29:46,300 Again that's being priced at around half of what the average 606 00:29:46,300 --> 00:29:49,200 company is in the US while growing around twice, the speed 607 00:29:49,200 --> 00:29:50,600 of the average company in the u.s. 608 00:29:50,600 --> 00:29:55,400 So this is a very cheap price company on paper, but I think as 609 00:29:55,400 --> 00:29:58,900 long as the the issues with China Loom over investors, I 610 00:29:58,900 --> 00:30:01,100 think that will overshadow The company and what the 611 00:30:01,100 --> 00:30:03,600 fundamentals are doing. So, this is one that I've just 612 00:30:03,600 --> 00:30:05,400 held onto. I haven't doubled down on it. 613 00:30:05,400 --> 00:30:07,700 I don't have the guts to just continue pouring money into this 614 00:30:07,700 --> 00:30:09,500 company. You know, I am putting more 615 00:30:09,500 --> 00:30:12,400 money on Amazon, but not Ali Baba for right now. 616 00:30:12,400 --> 00:30:14,700 I'm just holding on to it. I think there's a good chance 617 00:30:14,700 --> 00:30:18,000 that it will recover over time, but I just don't want to risk 618 00:30:18,000 --> 00:30:19,200 more and more money on this company. 619 00:30:19,500 --> 00:30:22,800 Now, there are two companies that I've up my positions in 620 00:30:23,100 --> 00:30:26,100 which are these next to Salesforce and Adobe because I 621 00:30:26,100 --> 00:30:29,900 considered these companies to be very much blue chip technology. 622 00:30:30,100 --> 00:30:33,800 Please Salesforce and Adobe are two companies that again, 623 00:30:33,800 --> 00:30:37,500 they're blue chip tech companies that will post good earnings in 624 00:30:37,500 --> 00:30:41,400 any Market environment, I think, even during recessions, and even 625 00:30:41,400 --> 00:30:43,700 though they trade at a high P/E ratio, keep in mind what you're 626 00:30:43,700 --> 00:30:46,900 buying is the free cash flow from the company, the amount of 627 00:30:46,900 --> 00:30:50,300 actual money, they're able to generate and free cash flow and 628 00:30:50,300 --> 00:30:52,200 Salesforce knows how to grow free cash flow. 629 00:30:52,500 --> 00:30:55,100 Look at this free cash flow growth over the past five years, 630 00:30:55,400 --> 00:30:58,100 they've grown their share count. It's true that they've diluted 631 00:30:58,100 --> 00:30:59,900 shareholders by around 40 percent. 632 00:31:00,200 --> 00:31:03,000 But over that same time, period, that they've deluded 633 00:31:03,000 --> 00:31:06,300 shareholders over 40%, they've grown free cash flow over a 634 00:31:06,300 --> 00:31:09,600 hundred and sixty percent. So, on a per share basis, 635 00:31:09,600 --> 00:31:13,200 they're growing your free cash flow at a rapid pace, and I 636 00:31:13,200 --> 00:31:15,100 think they'll continue to do that in the future. 637 00:31:15,400 --> 00:31:18,000 I consider this company to be undervalued right now. 638 00:31:18,000 --> 00:31:21,300 I think again, the sell-off is largely due to macro Trends and 639 00:31:21,300 --> 00:31:24,900 I feel the same way about Adobe. Adobe is a company that trades 640 00:31:24,900 --> 00:31:28,300 at a 28 forward P/E ratio in line with companies like 641 00:31:28,300 --> 00:31:31,800 McDonald's and Clorox. Kimberly Clark even cheaper than 642 00:31:31,800 --> 00:31:35,200 a lot of them and it's growing its Revenue faster, much faster 643 00:31:35,200 --> 00:31:38,300 than those companies, it has a bigger motor in my opinion, a 644 00:31:38,300 --> 00:31:41,700 better balance sheet and it's a free cash flow generating 645 00:31:41,700 --> 00:31:43,600 machine. This company is growing, its 646 00:31:43,600 --> 00:31:47,500 free cash flow like crazy. Literally five Xing it over the 647 00:31:47,500 --> 00:31:51,500 past five years and it's doing that while doing share Buybacks. 648 00:31:51,700 --> 00:31:54,700 In my opinion, Adobe is an outstanding deal right now in 649 00:31:54,700 --> 00:31:56,500 the market and to me it makes perfect sense. 650 00:31:56,500 --> 00:31:59,900 That during this time period, even q1 at a higher price than 651 00:32:00,000 --> 00:32:04,300 It is right now fun Smith. Terry Smith has added Adobe to 652 00:32:04,300 --> 00:32:06,600 his portfolio. So he thought this was a high 653 00:32:06,600 --> 00:32:09,600 quality company to add to its portfolio and I agree with him 654 00:32:09,600 --> 00:32:11,900 here and I would not be surprised if Terry Smith bought 655 00:32:11,900 --> 00:32:13,500 more Amazon after the sell-off is. 656 00:32:13,500 --> 00:32:16,100 Well I think in fact there's a very good chance you will. 657 00:32:16,100 --> 00:32:17,900 So Salesforce in Adobe are two companies. 658 00:32:17,900 --> 00:32:20,900 I'm very bullish on right now. I like the valuation and I 659 00:32:20,908 --> 00:32:22,900 consider them to be very dependable. 660 00:32:22,900 --> 00:32:25,900 Blue-chip free, cash flow growing companies. 661 00:32:25,900 --> 00:32:28,500 I think they'll grow consistent free cash flow in the future 662 00:32:29,000 --> 00:32:31,600 Apple obviously, Already know this company is a great company. 663 00:32:31,900 --> 00:32:35,000 We look at the valuation of it, even apples traded down to a 664 00:32:35,000 --> 00:32:37,900 price where Warren Buffett just recently, bought more of it. 665 00:32:37,900 --> 00:32:42,000 You bought six hundred million dollars, more of Apple at 150 666 00:32:42,000 --> 00:32:44,800 dollars a share. So this company is trading at an 667 00:32:44,800 --> 00:32:48,200 attractive enough price that even Warren Buffett is upping 668 00:32:48,200 --> 00:32:52,800 his stake in it while owning 40% of his portfolio just an apple 669 00:32:53,000 --> 00:32:56,800 and that's creating out a 2006 Ford PE there's no validation on 670 00:32:56,800 --> 00:32:59,900 the value of a company other than Warren Buffett upping his 671 00:33:00,000 --> 00:33:02,200 It's taken it after you already has 40%. 672 00:33:02,300 --> 00:33:04,300 I don't know what it is. I think that's pretty good, 673 00:33:04,300 --> 00:33:06,400 validation, that apples, attractively valued. 674 00:33:06,500 --> 00:33:09,300 Now, the last one I have is Spotify and this is one. 675 00:33:09,300 --> 00:33:12,300 That's a very small holding. I've decided to keep it into the 676 00:33:12,300 --> 00:33:16,800 portfolio as my only speculative play, meaning this one is not a 677 00:33:16,800 --> 00:33:20,200 very established free cash flow generating company. 678 00:33:20,500 --> 00:33:24,500 In fact, Spotify generates roughly, no free cash flow. 679 00:33:24,600 --> 00:33:27,300 And by that, I mean, if you look at their free cash flow, it is 680 00:33:27,300 --> 00:33:29,900 positive quarter-over-quarter but they're delicious. 681 00:33:30,100 --> 00:33:32,100 Loading the shareholder at a faster speed. 682 00:33:32,300 --> 00:33:35,400 So if you adjust for dilution this company really is not it 683 00:33:35,400 --> 00:33:39,300 not making any free casual gains for the investor despite that 684 00:33:39,300 --> 00:33:41,700 the company continues to grow. I think that they have a 685 00:33:41,700 --> 00:33:43,900 long-term thesis. So I've decided to hold on to 686 00:33:43,900 --> 00:33:46,700 this one but honestly Spotify is a very difficult company to 687 00:33:46,700 --> 00:33:48,100 hold. I've considered selling this 688 00:33:48,100 --> 00:33:50,900 one, along with the rest of the speculative companies and moving 689 00:33:50,900 --> 00:33:54,600 the money into Adobe, or Salesforce or Microsoft one of 690 00:33:54,608 --> 00:33:57,600 these companies. So overall excluding Spotify as 691 00:33:57,600 --> 00:34:01,200 the only remaining speculative small bet in my portfolio 692 00:34:01,700 --> 00:34:04,700 outside of Spotify, every single company in my portfolio is 693 00:34:04,700 --> 00:34:07,100 focused on companies that are blue chip. 694 00:34:07,100 --> 00:34:10,000 Technology companies that generate meaningful amounts of 695 00:34:10,000 --> 00:34:12,100 free cash flow and I think they'll be able to grow their 696 00:34:12,100 --> 00:34:14,500 free cash flow. They generate considerably over 697 00:34:14,500 --> 00:34:17,000 the next five years. I look at Amazon as an example 698 00:34:17,000 --> 00:34:19,699 of that, investors are concerned about how much free cash flow. 699 00:34:19,699 --> 00:34:22,300 This company can generate. And I feel very confident over 700 00:34:22,300 --> 00:34:25,199 the next five years you'll see that number go up considerably, 701 00:34:25,400 --> 00:34:29,500 so that has been the major focus in the change over the past six 702 00:34:29,500 --> 00:34:31,500 months. Is moving my portfolio from the 703 00:34:31,507 --> 00:34:34,400 more speculative tech companies into the more free cash, flow 704 00:34:34,400 --> 00:34:36,500 generative ones and focusing on that. 705 00:34:36,500 --> 00:34:40,300 As being the major output free cash flow is a major output that 706 00:34:40,300 --> 00:34:42,500 I'm putting emphasis on. So there's a little look at the 707 00:34:42,500 --> 00:34:44,500 performance and what's happened so far. 708 00:34:44,699 --> 00:34:46,400 I'll have more of these updates out in the future. 709 00:34:46,400 --> 00:34:48,699 So, again, you can subscribe and follow along for free. 710 00:34:49,100 --> 00:34:50,800 That's all for this time. See you in the next one.