1 00:00:00,080 --> 00:00:02,200 Welcome back everyone. Today on the Joseph Carlson 2 00:00:02,200 --> 00:00:07,560 Show, Salesforce has reached an all new high, trading up to $338 3 00:00:07,560 --> 00:00:11,280 per share. Now Salesforce was undervalued a 4 00:00:11,280 --> 00:00:12,880 couple months ago. It's something that I've been 5 00:00:12,880 --> 00:00:15,800 talking about for some time. So the stock could be just 6 00:00:15,800 --> 00:00:18,680 moving up because a pure valuation means, but it seems 7 00:00:18,680 --> 00:00:21,520 like there's more to the story. Just a couple days ago, 8 00:00:21,520 --> 00:00:25,440 Salesforce announced that they're hiring 1000 new 9 00:00:25,440 --> 00:00:29,680 salespeople to sell one product, one single product that Marc 10 00:00:29,680 --> 00:00:32,600 Benioff has been talking about called Agentforce. 11 00:00:33,080 --> 00:00:36,480 And again, they're hiring 1000 people just to sell this one 12 00:00:36,480 --> 00:00:38,600 thing. So what is Agent Force and why 13 00:00:38,600 --> 00:00:40,600 is it making the stock go up 5% today? 14 00:00:40,600 --> 00:00:43,360 We're going to be taking a look. We also have news that Netflix 15 00:00:43,360 --> 00:00:48,840 has surged past $800 per share. It's on its way to $1000, up 71% 16 00:00:48,920 --> 00:00:50,800 year to date. It's one of the best performing 17 00:00:50,800 --> 00:00:53,840 companies in the market. And Netflix is the chameleon 18 00:00:53,840 --> 00:00:55,800 stock. It's ever changing, ever 19 00:00:55,800 --> 00:00:58,080 evolving. Management continually changes 20 00:00:58,080 --> 00:01:01,280 what Netflix is doing from being a pureplay streaming company 21 00:01:01,280 --> 00:01:03,840 where you can share passwords, the one where you can no longer 22 00:01:03,840 --> 00:01:06,480 share passwords because they implemented a password crackdown 23 00:01:06,880 --> 00:01:09,640 to a company where they would never have advertising to. 24 00:01:09,640 --> 00:01:11,640 Now they have a cheaper advertising tear. 25 00:01:12,120 --> 00:01:14,480 And the next thing that this chameleon stock may be going 26 00:01:14,480 --> 00:01:18,960 into and maybe a game changer for this company is live TV. 27 00:01:19,360 --> 00:01:22,480 Now, we've seen little hints of this before, small live things, 28 00:01:22,480 --> 00:01:25,000 but we're going to be taking a look at this new strategy for 29 00:01:25,000 --> 00:01:26,880 Netflix and how it may change the company. 30 00:01:26,920 --> 00:01:29,520 Now we also have news that crypto, specifically Bitcoin is 31 00:01:29,520 --> 00:01:33,160 surged to $82,000. This has created a lot of FOMO 32 00:01:33,160 --> 00:01:35,080 in the crypto markets. Lots of people chasing these 33 00:01:35,080 --> 00:01:37,080 gains. I'll be going over why I'm never 34 00:01:37,080 --> 00:01:39,160 going to own crypto, why I don't buy it. 35 00:01:39,480 --> 00:01:43,240 And then we also finally have take two interactive CEO going 36 00:01:43,240 --> 00:01:47,320 on ACNBC and giving perhaps the best explanation of what 37 00:01:47,320 --> 00:01:49,240 artificial intelligence actually is. 38 00:01:49,240 --> 00:01:52,520 Needless to say we have a full episode, a ton of news to get 39 00:01:52,520 --> 00:01:53,880 into. If you like all this type of 40 00:01:53,880 --> 00:01:56,040 content, just make sure you subscribe to the channel, hit 41 00:01:56,040 --> 00:01:58,200 the like button. Let's go ahead and get started 42 00:01:58,320 --> 00:02:00,520 now we start off the day with news that sales for stock is 43 00:02:00,520 --> 00:02:02,240 surging. It's reached a stock price of 44 00:02:02,240 --> 00:02:06,840 $338 per share. It's up 5% today because of news 45 00:02:07,160 --> 00:02:09,840 that they're launching this new product and hiring 1000 new 46 00:02:09,840 --> 00:02:12,480 salespeople. Now before we jump into today's 47 00:02:12,480 --> 00:02:15,960 news, I just want to give a rewind of my ownership of this 48 00:02:15,960 --> 00:02:18,880 company because it's been a bit of a interesting one. 49 00:02:18,880 --> 00:02:20,400 It's gone through a little bit of drama. 50 00:02:20,400 --> 00:02:22,840 If we look at my ownership of Salesforce, we can jump into the 51 00:02:22,840 --> 00:02:26,280 passive income portfolio. Salesforce is one of my larger 52 00:02:26,280 --> 00:02:30,080 holdings in my main portfolio. So we have it right here in the 53 00:02:30,080 --> 00:02:33,080 tech category and we look how this ones doing now. 54 00:02:33,080 --> 00:02:38,960 It's a 70 around $74,000 position with $13,500 in the 55 00:02:38,960 --> 00:02:40,840 green. So it's a relatively big 56 00:02:40,840 --> 00:02:44,760 position. I'm up around 25% on it, $13,000 57 00:02:44,760 --> 00:02:47,120 in the green. But that wasn't always the case. 58 00:02:47,120 --> 00:02:49,600 Just a few months ago this position was in the red. 59 00:02:49,640 --> 00:02:51,160 So what happened with Salesforce? 60 00:02:51,200 --> 00:02:54,320 Well, Salesforce is a company that I bought in my initial buy. 61 00:02:54,680 --> 00:02:56,520 I don't buy companies all at once. 62 00:02:56,520 --> 00:02:59,760 I usually do a buy of like 1/2 size position and then I see 63 00:02:59,760 --> 00:03:01,960 what happens over the next 30 or 60 days. 64 00:03:02,240 --> 00:03:04,440 The stock rockets up. I just keep it a half size 65 00:03:04,440 --> 00:03:06,920 position. If the stock drops, I typically 66 00:03:06,920 --> 00:03:09,840 add more to it. In this case, right after I 67 00:03:09,840 --> 00:03:13,160 bought Salesforce, the stock dropped 16%. 68 00:03:13,800 --> 00:03:16,720 So that's always an embarrassing situation when I make a video 69 00:03:16,720 --> 00:03:18,360 saying I think a company's undervalued. 70 00:03:18,400 --> 00:03:20,520 I think it's a great company. I think they're going to do 71 00:03:20,520 --> 00:03:22,800 really well. I buy a bunch of the stock and 72 00:03:22,800 --> 00:03:26,160 then the stock price drops 16%. That's always an embarrassing 73 00:03:26,160 --> 00:03:28,760 thing. I look silly after that, but in 74 00:03:28,760 --> 00:03:32,040 this case I didn't think the drop was warranted. 75 00:03:32,280 --> 00:03:36,040 Now if we look at a video rewinding 5 months ago, this is 76 00:03:36,040 --> 00:03:40,640 a video precisely on the day of the 16% drop from Salesforce. 77 00:03:40,640 --> 00:03:44,000 So let's go through my thoughts at that time where Salesforce 78 00:03:44,000 --> 00:03:46,920 dropped down to a stock price of $220.00. 79 00:03:46,920 --> 00:03:50,160 So the stock. Is now down around 17%. 80 00:03:50,440 --> 00:03:54,080 It's getting punished if you're new to the market and you have 81 00:03:54,080 --> 00:03:55,800 added. I'll just freeze it right there. 82 00:03:56,080 --> 00:03:59,280 If we rewind, you can see right there in the video, Salesforce 83 00:03:59,280 --> 00:04:04,120 is $226, down 16 1/2 percent. Again, the stock price today is 84 00:04:04,120 --> 00:04:07,880 338. So it's come a long ways, but 85 00:04:07,880 --> 00:04:11,160 this is my perspective at the time after a massive 86 00:04:11,720 --> 00:04:15,560 disappointing result to this earnings after investors were 87 00:04:15,560 --> 00:04:19,079 just tossing the stock. Aside, it's getting punished. 88 00:04:19,720 --> 00:04:22,000 If you're new to the market and you have to add experience in 89 00:04:22,000 --> 00:04:24,280 companies like this, this can be a little startling. 90 00:04:24,280 --> 00:04:26,080 It can be a little frightening, like you're doing something 91 00:04:26,080 --> 00:04:29,240 wrong. My opinion on this company and 92 00:04:29,240 --> 00:04:32,600 these earnings is I feel no stress in the situation. 93 00:04:32,640 --> 00:04:34,600 I thought that this was actually pretty decent earnings. 94 00:04:34,880 --> 00:04:36,400 I realize they have mixed guidance. 95 00:04:36,400 --> 00:04:39,240 I don't think it's crazy the stock is selling off, but I'm 96 00:04:39,240 --> 00:04:43,000 not concerned about this at all. When I look at Salesforce, it's 97 00:04:43,000 --> 00:04:45,040 pretty simple. I'm just going to be buying more 98 00:04:45,040 --> 00:04:47,160 of the stock, I really am. I'm going to be putting in a 99 00:04:47,160 --> 00:04:49,960 small order tomorrow and I'll be buying it throughout the week 100 00:04:49,960 --> 00:04:52,680 next week. I just think Salesforce is a 101 00:04:52,680 --> 00:04:54,400 winner. I really do this. 102 00:04:54,400 --> 00:04:57,800 Doesn't change my mind. A single quarter of mixed 103 00:04:57,800 --> 00:05:00,960 guidance does not change my thesis overall on the company. 104 00:05:01,360 --> 00:05:05,200 Salesforce is a highly profitable dominant enterprise 105 00:05:05,200 --> 00:05:07,960 cloud business in five different business segments. 106 00:05:08,080 --> 00:05:10,040 Now, again, now it's during a time period where investors were 107 00:05:10,040 --> 00:05:13,160 very bearish on Salesforce, sentiment was negative. 108 00:05:13,680 --> 00:05:17,040 But that video showed that you can separate your sentiment from 109 00:05:17,040 --> 00:05:19,720 the rest of the markets, but you don't have to follow the pack 110 00:05:19,720 --> 00:05:22,400 and become gloomy when other investors are selling out of a 111 00:05:22,400 --> 00:05:24,800 company. The reality of the situation is 112 00:05:24,800 --> 00:05:29,000 during that time period where Salesforce sold down 17% after 113 00:05:29,000 --> 00:05:31,880 this earnings report, Salesforce stock was fine. 114 00:05:32,080 --> 00:05:35,440 The numbers were fantastic. In fact, Salesforce during this 115 00:05:35,440 --> 00:05:39,080 quarter, this very quarter posted record high free cash 116 00:05:39,080 --> 00:05:42,400 flow. Investors are overall emotional. 117 00:05:42,840 --> 00:05:44,520 They're overall driven by narrative. 118 00:05:44,840 --> 00:05:46,800 This is why it's important to follow the fundamentals of a 119 00:05:46,800 --> 00:05:49,280 company. Investing back into the company 120 00:05:49,280 --> 00:05:52,440 during this drop of course, lowered my cost basis on the 121 00:05:52,440 --> 00:05:56,600 stock and made it so that the subsequent recovery made me more 122 00:05:56,600 --> 00:06:00,240 gains in the process. In a way, I would have made less 123 00:06:00,240 --> 00:06:03,840 money on Salesforce if the stock went directly up then had it 124 00:06:03,840 --> 00:06:05,720 fallen and I bought more during the dip. 125 00:06:05,800 --> 00:06:08,840 And This is why volatility, if used correctly, often leads to 126 00:06:08,840 --> 00:06:11,720 better returns, not worse. That decision to focus on the 127 00:06:11,720 --> 00:06:14,440 fundamentals and buy more Salesforce during that sell off 128 00:06:14,800 --> 00:06:19,960 is what turned this position from a $4000 loss to a $13,500 129 00:06:19,960 --> 00:06:21,680 gain. Salesforce has always had the 130 00:06:21,680 --> 00:06:24,400 catalyst of a low valuation. In fact, it's always been 131 00:06:24,400 --> 00:06:28,280 cheaper than almost every other enterprise application software 132 00:06:28,360 --> 00:06:30,120 company. In fact, I think it's cheaper 133 00:06:30,120 --> 00:06:32,640 than literally all of them. There's a video where I went 134 00:06:32,640 --> 00:06:36,440 over highlighting that all these companies, ServiceNow, Palantir, 135 00:06:36,440 --> 00:06:40,440 Microsoft, Adobe, DocuSign, so on and so forth, are more 136 00:06:40,440 --> 00:06:43,400 expensive than Salesforce. So this company has always been 137 00:06:43,400 --> 00:06:46,320 discounted to some extent. And the reason for this 138 00:06:46,320 --> 00:06:50,280 discounting has been because of one reason Salesforce has been 139 00:06:50,280 --> 00:06:53,600 unable to sell the narrative that they are an AI company. 140 00:06:53,800 --> 00:06:57,360 Now Salesforce is surging because investors finally might 141 00:06:57,360 --> 00:07:01,080 be coming on board that Salesforce is possibly 142 00:07:01,680 --> 00:07:05,600 potentially an AI play. And that is because Salesforce 143 00:07:05,640 --> 00:07:10,040 is apparently hiring 1000 additional employees to just 144 00:07:10,040 --> 00:07:12,080 sell an AI product. For a company the size of 145 00:07:12,080 --> 00:07:14,080 Salesforce, that is a lot of employees. 146 00:07:14,440 --> 00:07:17,080 To put that in perspective, a company that's an AI company 147 00:07:17,080 --> 00:07:19,920 that's often compared to Salesforce is Palantir. 148 00:07:20,080 --> 00:07:25,880 Palantir's total number of employees is around 33137 149 00:07:25,880 --> 00:07:28,680 hundred in this case. So Palantir has under 4000 150 00:07:28,680 --> 00:07:31,600 employees total for the entire corporation. 151 00:07:31,680 --> 00:07:34,080 So you can see that put in perspective here, Salesforce is 152 00:07:34,080 --> 00:07:39,000 hiring 1000 people just to sell this single product, this one AI 153 00:07:39,000 --> 00:07:42,480 product called Agentforce. But that also raises a question, 154 00:07:42,480 --> 00:07:44,720 what is Agentforce? Part of the difficulty of 155 00:07:44,720 --> 00:07:47,200 investing in a company like Salesforce is figuring out what 156 00:07:47,200 --> 00:07:50,000 the company actually does. In the case of Salesforce, 157 00:07:50,000 --> 00:07:53,440 generally it's ACRMA, customer relationship management tool, 158 00:07:53,800 --> 00:07:56,440 which basically just manages overall your customer 159 00:07:56,440 --> 00:08:00,080 relationships, the billing, the acquisition of customers, 160 00:08:00,320 --> 00:08:03,880 customer support and so on. So that in and of itself is not 161 00:08:03,880 --> 00:08:06,320 too complex. Salesforce is the dominant 162 00:08:06,320 --> 00:08:08,640 player in that sphere. They have some competitors, but 163 00:08:08,640 --> 00:08:11,800 they're by far the biggest. But Agentforce is something 164 00:08:11,800 --> 00:08:16,200 different, something newer, and something apparently AI. 165 00:08:16,640 --> 00:08:19,800 Now, when I looked at different descriptions of what Agentforce 166 00:08:19,800 --> 00:08:23,040 actually is, there's some hair that are a little bit 167 00:08:23,040 --> 00:08:25,760 descriptive. For example, we have the CEO 168 00:08:25,760 --> 00:08:29,440 Marc Benioff explaining on a podcast what Agent Force 169 00:08:29,440 --> 00:08:32,000 actually does. Listen to his explanation. 170 00:08:32,120 --> 00:08:35,679 Releasing Agent Force and we are getting ready to transform all 171 00:08:35,679 --> 00:08:38,080 of these incredible Trail Blazers we have all over the 172 00:08:38,080 --> 00:08:43,200 world into being Agent Blazers. And that idea that we've taken 173 00:08:43,200 --> 00:08:47,840 the community into the cloud, into social, into mobile, into 174 00:08:47,840 --> 00:08:51,920 AI with Einstein, into data, with data cloud, with analytics, 175 00:08:51,920 --> 00:08:54,320 with Tableau, and with collaboration with Slack. 176 00:08:54,320 --> 00:08:58,840 But now we're taking them into a whole new world, which is 177 00:08:58,840 --> 00:09:02,040 building an agentic layer for their companies. 178 00:09:02,720 --> 00:09:07,000 And that idea of an agentic layer, a layer where agents are 179 00:09:07,000 --> 00:09:11,120 doing, acting, taking actions, reasoning, operating on your 180 00:09:11,120 --> 00:09:15,200 behalf, this is a very new component of computer science. 181 00:09:15,400 --> 00:09:16,960 Did you get all that? Neither did I. 182 00:09:17,200 --> 00:09:19,440 It's difficult to understand what these tools actually do 183 00:09:19,440 --> 00:09:21,600 when the CEO talks in such vague terms. 184 00:09:21,840 --> 00:09:23,960 But Marc Benioff, again, is a salesperson. 185 00:09:23,960 --> 00:09:27,280 He's trying to talk in very glowing terms about his tool 186 00:09:27,280 --> 00:09:30,120 rather than descriptive applications of the product. 187 00:09:30,120 --> 00:09:32,400 When we look at what this new product actually does, this 188 00:09:32,400 --> 00:09:34,080 video I believe gives the best description. 189 00:09:35,080 --> 00:09:38,840 Every company has more jobs to be done than resources available 190 00:09:38,840 --> 00:09:42,680 to do those jobs. An agent force helps you build 191 00:09:42,840 --> 00:09:47,000 and customize autonomous AI agents to help with those jobs. 192 00:09:47,600 --> 00:09:51,600 Like an AI service agent that deflects incoming support cases 193 00:09:51,600 --> 00:09:54,920 by responding intuitively and conversationally to resolve 194 00:09:54,920 --> 00:09:57,880 customer inquiries that a chat bot never could. 195 00:09:58,080 --> 00:10:01,640 Or an AI sales development agent that proactively works leads by 196 00:10:01,640 --> 00:10:04,840 contacting customers, responding to their questions, and 197 00:10:04,840 --> 00:10:07,720 scheduling meetings. So one of them is a basically 198 00:10:07,720 --> 00:10:10,080 like a chat bot but enhanced with AI. 199 00:10:10,520 --> 00:10:13,080 But it's interesting they highlight another one here that 200 00:10:13,080 --> 00:10:17,880 proactively goes after leads, the salespeople that Salesforce 201 00:10:17,920 --> 00:10:21,920 are hiring to sell Agentforce. They're selling a product that 202 00:10:21,920 --> 00:10:26,320 in a way replaces salespeople. An interesting conundrum where 203 00:10:26,320 --> 00:10:29,640 they're hiring salespeople to sell something that makes it so 204 00:10:29,640 --> 00:10:33,480 you need less salespeople. We see that going on with these 205 00:10:33,480 --> 00:10:35,880 companies right now. This one is is literally the 206 00:10:35,880 --> 00:10:39,520 application here is Salesforce Agentforce will go after your 207 00:10:39,520 --> 00:10:42,160 leads and start going through the funnel and working the 208 00:10:42,160 --> 00:10:44,960 funnel. Needs by contacting customers, 209 00:10:45,000 --> 00:10:48,320 responding to their questions and scheduling meetings, or an 210 00:10:48,440 --> 00:10:52,280 AI sales coach agent trained on your best practices that attends 211 00:10:52,280 --> 00:10:55,640 calls with your new sales reps and provides helpful real time 212 00:10:55,640 --> 00:10:58,280 tips and objection handling. These are just a few of the 213 00:10:58,280 --> 00:11:01,400 standard agents included with Agentforce, but you can also 214 00:11:01,400 --> 00:11:04,640 create your own custom AI agents, which you'll do by 215 00:11:04,640 --> 00:11:07,840 describing a natural language, the jobs you want those agents 216 00:11:07,840 --> 00:11:11,520 to do, and then equipping those agents to do those jobs with the 217 00:11:11,520 --> 00:11:14,800 workflows and actions you've already built in Salesforce. 218 00:11:14,960 --> 00:11:17,720 Your agents will then work inside the guardrails you've 219 00:11:17,720 --> 00:11:21,960 established to do these jobs, reasoning intuitively to respond 220 00:11:21,960 --> 00:11:26,200 reliably to complex request. So here you can build new agents 221 00:11:26,280 --> 00:11:29,200 based on plain text descriptions, and it will look 222 00:11:29,200 --> 00:11:32,360 at your overall CRM, which Salesforce already has all that 223 00:11:32,360 --> 00:11:33,720 data. Because if you're using 224 00:11:33,720 --> 00:11:36,120 Salesforce, you're going to have all your company's information 225 00:11:36,120 --> 00:11:40,200 already in the CRM and it uses all of that context with your 226 00:11:40,200 --> 00:11:42,720 description to carry out any task you want. 227 00:11:43,040 --> 00:11:46,520 So it's like you can make many employees within your own system 228 00:11:46,920 --> 00:11:49,400 to do different tasks and you can give them different 229 00:11:49,400 --> 00:11:51,200 guardrails. Now whether or not this makes 230 00:11:51,200 --> 00:11:54,560 Salesforce an AI company or whether they're still a non AI 231 00:11:54,560 --> 00:11:57,440 company at the end of the day doesn't really matter. 232 00:11:57,440 --> 00:11:59,360 And this is something that investors often miss. 233 00:11:59,360 --> 00:12:01,160 I've highlighted this over and over again. 234 00:12:01,480 --> 00:12:04,400 Artificial intelligence in and of itself is not what generates 235 00:12:04,400 --> 00:12:07,360 returns. Returns can be amplified by 236 00:12:07,360 --> 00:12:10,920 newer technologies, but at the end of the day, being able to 237 00:12:10,920 --> 00:12:14,600 get a return on your investment, being able to generate real cash 238 00:12:14,600 --> 00:12:17,440 flows, is what gives investors true returns. 239 00:12:17,680 --> 00:12:20,640 So it doesn't matter whether a company is Texas Roadhouse and 240 00:12:20,640 --> 00:12:23,880 they have nothing to do with AI, they can still have amazing 241 00:12:23,880 --> 00:12:26,200 returns. Whether or not Salesforce is an 242 00:12:26,240 --> 00:12:30,200 AI company or not an AI company is not my primary concern here. 243 00:12:30,680 --> 00:12:34,000 The concern is that Salesforce can make money from this tool. 244 00:12:34,080 --> 00:12:35,920 The reason that I believe Salesforce is going to make a 245 00:12:35,920 --> 00:12:38,520 bunch of money from this is because they already maintain 246 00:12:38,520 --> 00:12:42,080 the dominant market position in the CRM category. 247 00:12:42,280 --> 00:12:46,440 They have well in excess of 150,000 businesses using their 248 00:12:46,440 --> 00:12:47,800 product. So these thousand new 249 00:12:47,800 --> 00:12:50,600 salespeople are already going to have a huge existing customer 250 00:12:50,600 --> 00:12:52,760 pool to sell to. And I think that's going to make 251 00:12:52,760 --> 00:12:55,800 the job a lot easier than cold calling different businesses. 252 00:12:55,920 --> 00:12:59,200 So ultimately, time will tell if Agentforce becomes a successful 253 00:12:59,200 --> 00:13:01,880 tool for Salesforce. But if I had to guess right now, 254 00:13:01,880 --> 00:13:03,520 I think they're going to make a lot of money with it. 255 00:13:03,560 --> 00:13:07,040 Now moving on, we have news that Netflix surpassed $800 per 256 00:13:07,040 --> 00:13:08,880 share. This, of course, has been one of 257 00:13:08,880 --> 00:13:10,800 the core holdings in My Portfolio. 258 00:13:11,120 --> 00:13:12,800 It's really carried a lot of weight. 259 00:13:12,840 --> 00:13:15,200 This one has done the heavy lifting in this portfolio. 260 00:13:15,520 --> 00:13:18,920 Now it's an $85,000 position. It's done really well. 261 00:13:18,920 --> 00:13:21,360 I'm really proud of Netflix. It's one that I'm really glad 262 00:13:21,360 --> 00:13:23,560 that I decided to double down on and hang in there with. 263 00:13:23,920 --> 00:13:27,400 But Netflix is a company that overall I would describe as the 264 00:13:27,400 --> 00:13:30,480 chameleon, and it's been described that way many times, I 265 00:13:30,480 --> 00:13:33,560 think accurately. So because Netflix evolves, they 266 00:13:33,560 --> 00:13:35,720 change over time. They change their strategy. 267 00:13:35,720 --> 00:13:38,680 They evolve from renting DVDs to doing online streaming. 268 00:13:38,920 --> 00:13:41,520 They evolve from just licensing other people's content to 269 00:13:41,520 --> 00:13:44,600 original content. They evolved from just doing a 270 00:13:44,640 --> 00:13:48,800 subscription only sharing plan to just a no sharing plan. 271 00:13:49,120 --> 00:13:51,840 They evolved from doing no advertising to now having an ad 272 00:13:51,840 --> 00:13:53,960 tear. And the next evolution in 273 00:13:53,960 --> 00:13:57,560 Netflix may be live TV. Netflix, home of the binge 274 00:13:57,560 --> 00:13:59,000 watch. Try something new. 275 00:13:59,000 --> 00:14:01,320 Live TV Now. They note that a lot of people 276 00:14:01,320 --> 00:14:04,120 aren't quite used to this. The presence of live programming 277 00:14:04,120 --> 00:14:07,160 at Netflix is still a bit strange and disorienting, even 278 00:14:07,160 --> 00:14:10,280 for the people who work there. After all, the company created 279 00:14:10,280 --> 00:14:13,000 its streaming service as an alternative to live TV. 280 00:14:13,280 --> 00:14:16,680 While cable asks viewers to show up at a certain time and place, 281 00:14:16,920 --> 00:14:19,760 Netflix allows customers to watch what they want, when they 282 00:14:19,760 --> 00:14:22,200 want, and without obligatory advertising. 283 00:14:22,240 --> 00:14:24,480 But they note that there's a specific reason why Netflix 284 00:14:24,480 --> 00:14:26,280 might be pushing into live programming. 285 00:14:26,520 --> 00:14:30,520 Live programming is particularly complementary to advertising. 286 00:14:30,960 --> 00:14:34,120 So as they're trying to grow their ad tear that only has like 287 00:14:34,120 --> 00:14:37,640 40 million users, they also want to grow out their live 288 00:14:37,640 --> 00:14:39,920 programming to complement that ad tear. 289 00:14:39,920 --> 00:14:42,360 So basically what Netflix has been doing for the past two 290 00:14:42,360 --> 00:14:45,520 years is perfecting their live streaming technology. 291 00:14:45,680 --> 00:14:48,160 And they're kind of doing this secretly in the background. 292 00:14:48,440 --> 00:14:52,000 They're doing small live tests with small shows that don't 293 00:14:52,000 --> 00:14:55,400 really have big consequences if there's problems just as tests. 294 00:14:55,400 --> 00:14:58,120 And they're even testing big events happening, like big 295 00:14:58,120 --> 00:15:00,360 adverse events. For example, during the live 296 00:15:00,360 --> 00:15:03,360 taping of Gad and Khalif, Netflix intentionally shut off 297 00:15:03,360 --> 00:15:06,800 its servers on the West Coast to replicate a system failure. 298 00:15:07,080 --> 00:15:10,000 And they said the transfer to the East Coast was seamless. 299 00:15:10,080 --> 00:15:13,040 Once they get this tested and they get it perfect, then they 300 00:15:13,040 --> 00:15:16,280 feel more comfortable doing the events like the Jake Paul Mike 301 00:15:16,280 --> 00:15:19,800 Tyson fight or the WWE. That's going to be every single 302 00:15:19,800 --> 00:15:23,360 week coming in 2025. This is another move, another 303 00:15:23,360 --> 00:15:26,240 directional move that I think will benefit the Netflix 304 00:15:26,240 --> 00:15:28,400 customer. They'll create more value, more 305 00:15:28,400 --> 00:15:32,000 pricing power for Netflix and a broad swath of customers to 306 00:15:32,000 --> 00:15:33,680 begin with. They're still going to have 307 00:15:33,680 --> 00:15:37,080 their huge on demand library, but now they're sprinkling in 308 00:15:37,080 --> 00:15:39,840 these fun live events every so often. 309 00:15:39,880 --> 00:15:42,400 And I think the more that they can do this, the more successful 310 00:15:42,400 --> 00:15:45,640 the company will be. Netflix is headed towards $1000. 311 00:15:45,640 --> 00:15:47,000 It's going to get there eventually. 312 00:15:47,240 --> 00:15:50,040 It's just a matter of time. Now moving on, we have news that 313 00:15:50,040 --> 00:15:53,320 crypto markets are doing well. Bitcoin is surging. 314 00:15:53,320 --> 00:15:57,920 It's now at 85,000, almost $86,000 for a single Bitcoin. 315 00:15:58,400 --> 00:16:00,040 And a lot of people point this out. 316 00:16:00,040 --> 00:16:02,360 They go, Joseph, have you noticed crypto? 317 00:16:02,360 --> 00:16:03,920 Have you noticed Bitcoins going up? 318 00:16:04,560 --> 00:16:06,000 And in most cases, I just ignore it. 319 00:16:06,160 --> 00:16:08,720 It's not something that I'm really that interested in. 320 00:16:08,720 --> 00:16:10,520 It's not something I do analysis on. 321 00:16:10,800 --> 00:16:13,800 It's not something that I really commentate on all that often. 322 00:16:14,320 --> 00:16:17,400 And the main reason why if I'm looking at any type of Bitcoin 323 00:16:17,560 --> 00:16:21,120 crypto, any type of asset like this, I don't have anything 324 00:16:21,120 --> 00:16:23,280 against them. I have no ill will for them. 325 00:16:23,280 --> 00:16:26,960 I don't really care if they go up or down in value, but it goes 326 00:16:26,960 --> 00:16:29,960 against my investing philosophy of where I put money to generate 327 00:16:29,960 --> 00:16:32,480 wealth. What I do with My Portfolio is I 328 00:16:32,480 --> 00:16:37,280 invest in assets where I would make money even if other 329 00:16:37,280 --> 00:16:39,040 investors never invested in them. 330 00:16:39,480 --> 00:16:41,880 Meaning that they're things that in and of themselves have 331 00:16:41,880 --> 00:16:45,360 intrinsic value, that the thing that I'm buying in and of itself 332 00:16:45,440 --> 00:16:48,600 has intrinsic worth. Now, when we look at crypto or 333 00:16:48,600 --> 00:16:52,120 Bitcoin, the value that you're getting is derived off of what 334 00:16:52,120 --> 00:16:53,720 other people are willing to pay for it. 335 00:16:54,280 --> 00:16:58,800 So the reason that it's at $85,800 is a lot of people are 336 00:16:58,800 --> 00:17:02,240 trying to buy the same thing. There's not a lot of supply and 337 00:17:02,240 --> 00:17:03,840 there's a lot of demand for the same thing. 338 00:17:04,160 --> 00:17:07,400 With stocks, it's different. Of course, stocks can go up. 339 00:17:07,400 --> 00:17:09,800 If a lot of people try to buy the same stock, they can push 340 00:17:09,800 --> 00:17:13,040 the price up. But if a stock goes down far 341 00:17:13,040 --> 00:17:16,160 enough and it generates cash flow, it doesn't really matter 342 00:17:16,160 --> 00:17:18,160 if other people buy the stock or not. 343 00:17:18,400 --> 00:17:21,079 It has an intrinsic value floor of what it's actually worth. 344 00:17:21,560 --> 00:17:24,960 For example, if everybody was to hypothetically sell out of a 345 00:17:24,960 --> 00:17:29,320 company like Salesforce or like Netflix, if every single person 346 00:17:29,320 --> 00:17:33,120 sold out of it and I was the sole owner of it, I'd be super 347 00:17:33,120 --> 00:17:35,680 wealthy. I'd have $5 billion or $7 348 00:17:35,680 --> 00:17:38,800 billion of cash flow every year that I could extract out of 349 00:17:38,800 --> 00:17:41,320 those companies. Being the sole owner makes me 350 00:17:41,320 --> 00:17:44,000 wealthier. In those cases, having less 351 00:17:44,000 --> 00:17:45,560 ownership, it makes me less wealthy. 352 00:17:45,560 --> 00:17:48,560 If you compare that to Bitcoin, if everyone else sold you all of 353 00:17:48,560 --> 00:17:52,280 their Bitcoin, if they sold 100% of theirs and you owned all the 354 00:17:52,280 --> 00:17:56,280 Bitcoin in the world, 100% of it, it wouldn't really be worth 355 00:17:56,280 --> 00:17:58,920 anything. The value in and of itself is 356 00:17:58,920 --> 00:18:02,200 derived by the fact that other people own it and are willing to 357 00:18:02,200 --> 00:18:04,600 buy it. That's what creates the value. 358 00:18:04,600 --> 00:18:07,720 With Bitcoin, I don't like owning assets where the sole 359 00:18:07,720 --> 00:18:11,240 value of it is derived on what other people are willing to pay. 360 00:18:11,560 --> 00:18:14,600 With stocks, the sole value of them are not derived on what 361 00:18:14,600 --> 00:18:17,800 other people are willing to pay. That can cause temporary price 362 00:18:17,840 --> 00:18:21,240 fluctuations, but the cash flows determine the true value of the 363 00:18:21,240 --> 00:18:23,720 stock. So I invest in assets that have 364 00:18:23,720 --> 00:18:26,240 intrinsic value derived by cash flows. 365 00:18:26,600 --> 00:18:29,400 I don't invest in Bitcoin, I don't invest in gold. 366 00:18:29,720 --> 00:18:32,960 I don't invest in any type of speculative asset like paintings 367 00:18:32,960 --> 00:18:35,520 or anything. We have to resell it to gain 368 00:18:35,520 --> 00:18:37,520 value. I invest in productive companies 369 00:18:37,520 --> 00:18:40,080 that grow their cash flows and they can return those cash flows 370 00:18:40,080 --> 00:18:41,680 back to shareholders. Now moving on. 371 00:18:41,680 --> 00:18:44,400 Finally, we get to the news that one of the companies that's best 372 00:18:44,400 --> 00:18:47,120 position to take advantage of artificial intelligence, of 373 00:18:47,120 --> 00:18:49,800 course, gaming companies. One of the companies that has 374 00:18:49,800 --> 00:18:53,800 the most anticipated game of the past decade is Take Two 375 00:18:53,800 --> 00:18:56,440 Interactive, which is the creators of Grand Theft Auto 376 00:18:56,760 --> 00:18:59,000 Grand Theft Auto 6 is coming out next year. 377 00:18:59,080 --> 00:19:03,640 Now the CEO of Take Two Interactive went on the CNBC and 378 00:19:03,640 --> 00:19:06,000 although I think he has some interesting thoughts overall in 379 00:19:06,000 --> 00:19:08,320 the company, the biggest thing that stuck out during this 380 00:19:08,320 --> 00:19:11,520 interview is his assessment of what artificial intelligence 381 00:19:11,560 --> 00:19:15,200 actually is and what it's not. Here's his thoughts on AI. 382 00:19:15,800 --> 00:19:18,240 In terms of AI, look, the interactive entertainment 383 00:19:18,240 --> 00:19:21,640 business has been in AI forever. And let me just remind you, AI 384 00:19:21,640 --> 00:19:24,040 stands for artificial intelligence, which is an 385 00:19:24,040 --> 00:19:25,880 oxymoron. There is no such thing. 386 00:19:26,320 --> 00:19:29,280 It's just a description of a digital tool set, and that 387 00:19:29,280 --> 00:19:33,400 digital tool set will affect every part of our lives in the 388 00:19:33,400 --> 00:19:37,800 same way that when we got smartphones, they affected every 389 00:19:37,800 --> 00:19:40,480 part of our lives. So how does it affect us right 390 00:19:40,480 --> 00:19:43,640 now with Take Two interactive games and what will it in, let's 391 00:19:43,640 --> 00:19:46,040 say 2-3 years? I would love to say that it's 392 00:19:46,040 --> 00:19:48,720 going to make things cheaper, quicker, better or easier to 393 00:19:48,720 --> 00:19:50,400 make hits. I don't think that's the case. 394 00:19:50,440 --> 00:19:54,240 All of our tools do help us become more efficient and that's 395 00:19:54,240 --> 00:19:56,520 a part of our three-part strategy, creativity, 396 00:19:56,520 --> 00:20:00,200 innovation, efficiency. That said, it'll be 397 00:20:00,200 --> 00:20:01,880 commoditized. Everyone's going to have access 398 00:20:01,880 --> 00:20:03,960 to the same tools. That is the history of tool 399 00:20:03,960 --> 00:20:05,680 sets. What it means though, is our 400 00:20:05,680 --> 00:20:09,600 creative people will be able to to do fewer mundane tasks and 401 00:20:09,600 --> 00:20:11,720 turn their attention to the really creative tasks. 402 00:20:11,720 --> 00:20:13,280 But they'll be the ones doing the creative. 403 00:20:13,280 --> 00:20:14,920 Decisions on this? Absolutely. 404 00:20:14,920 --> 00:20:17,600 You know the machines can't make the creative decisions for you. 405 00:20:17,760 --> 00:20:20,000 It seems like he's throwing a little bit of cold water there 406 00:20:20,000 --> 00:20:22,840 on many of the things said about artificial intelligence, but I 407 00:20:22,840 --> 00:20:25,440 think he's right. He says that it overall is a 408 00:20:25,440 --> 00:20:28,320 commodity, and I think that's going to be the case with AI. 409 00:20:28,640 --> 00:20:31,520 Most of the things that you can benefit from AI are going to be 410 00:20:31,520 --> 00:20:33,680 commoditized. We've seen that with so many 411 00:20:33,680 --> 00:20:36,800 different things from chat models and LLMS. 412 00:20:36,800 --> 00:20:38,480 We've seen it with image generators. 413 00:20:38,720 --> 00:20:40,640 We've seen it with things that can answer questions. 414 00:20:41,160 --> 00:20:42,880 It's getting quickly commoditized. 415 00:20:42,880 --> 00:20:45,640 The things that artificial intelligence do, you're finding 416 00:20:45,640 --> 00:20:47,840 more and more examples of different companies doing it. 417 00:20:48,240 --> 00:20:51,520 But he is correct in saying it's taking away more mundane tasks 418 00:20:51,640 --> 00:20:53,840 at different companies. They're simply going to be 419 00:20:53,840 --> 00:20:56,720 iteratively more efficient. And if I had to think of a group 420 00:20:56,720 --> 00:21:00,120 of companies that likely aren't commodities with AII, think the 421 00:21:00,120 --> 00:21:03,320 most difficult ones to replicate are the ones that require heavy 422 00:21:03,320 --> 00:21:05,600 CapEx. The companies like Amazon, 423 00:21:05,600 --> 00:21:09,360 NVIDIA, companies like Google Cloud, and of course Microsoft. 424 00:21:09,680 --> 00:21:13,200 The ones that are the big cloud hyperscalers are the most 425 00:21:13,200 --> 00:21:16,160 difficult to replicate because it requires the most capital. 426 00:21:16,480 --> 00:21:19,320 But other companies that are using different AI products to 427 00:21:19,320 --> 00:21:22,200 enhance their customer experience, that can be easily 428 00:21:22,200 --> 00:21:23,960 replicated. I think it gives a good nuanced 429 00:21:23,960 --> 00:21:26,280 take on AI. That's it for this episode. 430 00:21:26,280 --> 00:21:28,000 Hope you enjoyed. See you in the next one.