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Welcome back. 
Everyone today's episode. 

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We have something, I think a 
little bit different. 

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I've received. 
I think the most criticism as a 

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YouTuber, by focusing too much, 
on the story of a company to 

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Bunch on the narrative, 
basically the qualitative 

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aspects of it and not the 
valuation. 

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That's the biggest criticism 
that I've received. 

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Now. 
What I want to do in this 

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episode is talk about valuation.
Talk all about valuation for 

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this entire video. 
And what I plan on doing is 

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going over every single company 
in the story fund, which is this

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very much. 
Beaten up growth portfolio. 

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And I'm going to go through 
every single company and give my

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personal valuation of it as well
as the valuation of analysts and

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kind of correlate that and tie 
that in with your guys's 

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valuation. 
Yes, even yours as well. 

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So we'll look at all of them, 
kind of together. 

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What I did was a poll recently 
on my channel, right? 

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At a question. 
I said out of all of these 

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companies, which one is the most
overvalued. 

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So most of you said Salesforce 
is the most overvalued company. 

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My portfolio. 
Then Adobe. 

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Apple then Netflix, Microsoft 
Ali, Baba an Amazon and 

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literally out of like, 300 
people responding. 

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No one voted for Google or 
Facebook. 

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So you guys think that Google 
and Facebook are not overvalued,

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that was not the ones that you 
picked. 

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But regardless we'll be talking 
about all of that. 

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Will be looking at every single 
one of these companies and the 

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valuation of each of them. 
Now, before we jump into the 

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valuation of these individual 
companies. 

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I want to share some thoughts on
valuation in general. 

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One thing is a misconception 
that I see shared quite 

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frequently. 
This is very common amongst 

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investors. 
We See that most any growth 

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portfolio is probably in the red
over the past year. 

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That's just a case. 
The market has sold down like 

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crazy. 
Most of us are taking losses in 

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any growth companies, Great 
companies like Amazon, Google, 

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Microsoft Netflix, Adobe, you 
know, all of these are basically

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trading down over the past seven
months. 

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And one thing that I see, often 
said, in cases, like this is 

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because the company used to 
trade way up here. 

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It was at this price. 
Now, it trades at this price. 

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It had to be overvalued. 
At this price because currently,

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it's trading down here. 
That's what people think. 

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If a company goes down in price.
It had to be overvalued at the 

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price that used to trade at. 
And likewise. 

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I see the same thing during a 
bull market because a company 

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used to trade down here and now 
it trades a pair. 

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It was undervalued down here 
because if you bought it down 

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here you would have made money. 
Well, I don't actually agree 

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with that reasoning at all. 
Here is a true story about Peter

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Lynch that I think illustrates 
the problem with this logic in 

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1972 shares of Taco Bell, we're 
going through a major 

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correction, but the legendary 
investor, Peter Lynch, saw an 

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opportunity in just a short 
amount of time. 

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The stock price had been cut in 
half from $14 to $7 despite. 

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No obvious issues with the 
business Lynch, begin scooping 

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up shares. 
So here we have a case of Taco 

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Bell back in 1972 trading from 
$14 to seven dollars and that 

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catches the attention of Peter 
Lynch. 

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So he sees a company go down by 
half. 

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He starts to load up on Cher's 
at 7:00. 

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There's a share. 
So he's loading up at seven 

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dollars a share thinking. 
He's getting this at 50% off but

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the correction wasn't over 
shares kept sinking eventually 

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hitting. $1 an 85% pull back 
from the $7 at that level. 

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The seven dollars were lynched 
started buying the stock. 

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So imagine this he sees a stock 
fall 50%. 

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He thinks that this is a company
that doesn't really have any big

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issues. 
He starts loading up at seven 

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dollars a share, then it falls 
an additional 85. 

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Five percent. 
Now, in this situation, most 

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investors would conclude that 
they have made a grave mistake 

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that they were wrong in the 
market has proved them has 

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proved them wrong, right? 
Because at the point that they 

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bought at seven dollars, it's 
now traded down to $1 down, 85 

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percent. 
It would seem kind of crazy to 

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conclude that you're still right
in that purchase and most people

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would assume that the stock was 
overpriced at seven dollars a 

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share. 
Because it's now trading at $1, 

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share, Peter Lynch didn't 
operate this way. 

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He said, Rather than chalking it
up to a loss, Lynch kept buying 

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Taco Bell, even at one dollars a
share. 

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You see, Lynch knew the real 
story. 

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The company had no debt continue
to see strong growth, which 

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meant the pullback in the 
Stock's price was a great 

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opportunity for patient 
investors. 

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And as we now know, later Lynch 
was absolutely right. 

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Once the dust settled, Taco Bell
was acquired by PepsiCo for $42 

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per share. 
Making it a five bagger meaning 

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that he earned five hundred 
percent has returned. 

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From his original by in price. 
Meanwhile, the stock going from 

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$1 to $42 is a four thousand one
hundred percent gain, that's the

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stuff of Legends. 
In fact, Peter Lynch consider 

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that one of his best investments
ever. 

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See, Peter Lynch, clearly, 
understood that stock prices. 

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Do not trade in line with the 
company's fair value. 

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They don't just trade right 
there with the fair value. 

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All the time investors are 
incredibly emotional when he 

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bought Taco Bell at seven 
dollars per share. 

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He knew that that was an 
undervalued price. 

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Given the company's fundamentals
and growth prospects. 

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Went down to $1, a share that 
didn't change his opinion. 

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That was the market being 
irrational. 

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He held onto it and eventually 
he made a lot of money and I 

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think this story is incredibly 
applicable right now because 

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there's many great companies, 
especially growth companies that

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are trading down like crazy and 
that doesn't always mean that 

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they were overvalued at your 
initial purchase price. 

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I think many of these companies 
in the market right now that 

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have been sold off over the past
three months, will prove to be 

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some of the best performing, 
stocks over the next 10 years. 

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So that's just something to keep
in mind. 

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Mind on a bigger scale. 
I actually Drew this out because

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I think it's I think it's 
important. 

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This is how I view the fair 
value and the price of a 

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company. 
Still have the fair value which 

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is what the company's actually 
kind of worth the intrinsic 

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value of the company, really 
where it should be trading. 

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Then you have the price that 
it's trading at. 

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The price is trading at is, 
dictated by all sorts of 

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different things. 
Stick dated by emotions by 

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Russia, by inflation, by guesses
of interest rate hikes. 

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It's lots of logistics with 
Doing retirement planning and 

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pulling money out of different 
funds, all different things 

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affect the price. 
The fair value is what the 

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companies actually worth, based 
on its future growth prospects. 

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Now, what I tried to illustrate 
here, with this very crude 

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drawing, is that the blue hair, 
the fair value and the red hair,

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the price. 
They don't really match all that

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often. 
They're not really perfectly in 

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line. 
And I think this is really what 

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it's like. 
The fair value of the company 

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does fluctuate up and down. 
To some degree is a company has 

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its fundamentals change, but the
price is wildly. 

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Oil for a lot of growth stocks, 
especially the price moves up to

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way. 
Overvalued territory, then 

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investors turn bearish. 
Like they are right now and many

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great stocks. 
Just keep selling down, more and

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more and too heavily undervalue 
territory. 

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And it's difficult to know. 
What is the actual value of the 

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company. 
But the goal of us as investors 

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is to wait until companies that 
are really great companies. 

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Get into this undervalue 
territory and buy them while 

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other people are pessimistic and
hold on to them be able to hold 

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on to him, even if Trade down 
into further and further 

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undervalued territory. 
So this may not be the way that 

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you look at valuation. 
But this is the way that I look 

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at it. 
Now having said that, let's go 

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ahead and talk about my 
individual Holdings, and we'll 

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look at a couple different 
things with these valuations, 

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will start off with the top 
holding care, which is Amazon. 

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Amazon is a company that when I 
do valuation on it, I'm always 

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looking at the terminal value of
the company and terminal risks 

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to the company. 
What is terminal value mean? 

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It means the value of the entire
lifetime of the company, not 

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just the next year, right? 
Not how many e profits going to 

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produce next year but the 
profits will produce over the 

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next 30 years. 
That's the terminal value, the 

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present value of all future, 
cash flows from the company. 

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So what I'm attracted to with 
Amazon, the reason why I've 

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bought so much of this company, 
is it really so much of a 

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concern about the present value 
that will talk about but it's a 

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concern about the industries of 
Amazon's in it's in a couple 

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huge industries that I think 
will continue to be huge 

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Industries and bigger Industries
for the long-term future online 

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retail. 
I think Amazon is dominant and 

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will continue to separate from 
other competitors like Shopify 

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and it's in AWS the online it 
Cloud hosting. 

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They have the leadership 
position. 

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They have incredible lock in. 
They have a high rate of growth 

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and the competitors that are 
competing against them will take

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some market share, but I think 
the industry overall will 

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continue to grow at double-digit
rates for a very long period of 

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time. 
So those two industries of 

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online retail and AWS Cloud, 
hosting are the things that are 

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attracted me to Amazon to begin 
with. 

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Now, if we go into the 
valuation, there's a couple 

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things I want to look at first. 
We'll just take a glance at what

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you guys thought were the most 
overvalued companies out of my 

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entire portfolio. 
Only two votes were for Amazon. 

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So, some of you might think it's
overvalued, but you don't think 

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it's the most overvalued company
in my portfolio. 

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Now, let's go ahead and look at 
the analyst first. 

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This is something that will look
at for every holding. 

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This is Morningstar. 
Their analysis firm. 

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They do analysis on all of big 
Tech. 

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For Amazon right now. 
They have it as a five-star by 

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which means that the company in 
their rating system is as good 

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of a bias. 
You can get. 

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It's the biggest by rating, they
put the Fair Value Estimate at 

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3850. 
So they think that this company 

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is heavily undervalued and they 
give it a moat rating of wide. 

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So they also think the company 
has a wide moat. 

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Now, I can also look at Schwab's
reading on this. 

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They also have Equity analysis 
on these companies and they give

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it a market perform, which is 
basically a hold. 

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So they I don't consider a 
strong by a strong cell. 

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They just think that it's a hold
right. 

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Now. 
The last one that we can look at

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is cfra. 
This is another analysis firm 

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and they consider Amazon, a 
four-star rating, which is a by,

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but not a strong by now that 
we've looked at your votes on 

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Amazon. 
We've looked at the analysts 

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ratings on Amazon. 
Let's go ahead and look at my 

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valuation on the company. 
This is going to be using 

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qualtrics insights, which I get 
a lot of questions about this. 

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This entire website, with all 
these graphs here, in this 

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information is available as part
of the patreon. 

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There's no bait and switch. 
It's not Anything extra is just 

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part of the membership. 
So if you want to try this out, 

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you can join the patreon. 
There's a free trial in the link

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00:10:06,800 --> 00:10:09,100
in the description below. 
Now, let's go ahead and look at 

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Amazon's valuation here. 
Companies came down from three 

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thousand dollars per share to 
2000 trades at 2100 right now. 

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And a lot of the things people 
look at when valuing any 

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company, but I think it's fine 
is a forward P/E ratio. 

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Based on this Amazon is 
expensive, you're valuing the 

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company on the narrow term price
to earnings ratio. 

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Amazon is a company. 
That's very expensive. 

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Pensive. 
So I don't blame you, if that's 

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the way that you're looking at 
it, but there's other ways to 

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value a company. 
When you look at the Evita 

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ibadah, the Enterprise Value to 
ebit of the company, that is 

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another proxy for the earnings 
of the company. 

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And if you look at it this way, 
which I think most analysts do, 

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Amazon is much more in line with
the rest of big Tech. 

230
00:10:48,400 --> 00:10:51,900
It trades that an Enterprise 
Value to ibadah of 18.9. 

231
00:10:52,200 --> 00:10:55,100
So it's right there in line with
Microsoft, Apple, Google and 

232
00:10:55,100 --> 00:10:57,200
Facebook, right? 
Little bit more expensive than 

233
00:10:57,200 --> 00:10:59,700
some little bit cheaper than 
others on an Evita. 

234
00:10:59,800 --> 00:11:03,300
That basis, I think the Amazons 
undervalued we can also look at 

235
00:11:03,300 --> 00:11:04,600
the free cash flow of the 
company. 

236
00:11:04,800 --> 00:11:07,100
This is the most controversial 
part of this company. 

237
00:11:07,400 --> 00:11:10,300
If you look at the free cash 
flow over time, I know that 

238
00:11:10,300 --> 00:11:13,800
Amazon has the ability to 
generate growing free cash 

239
00:11:13,800 --> 00:11:15,600
flows. 
I know that they're capable of 

240
00:11:15,600 --> 00:11:18,600
doing that because you've seen 
them prove that to investors 

241
00:11:18,900 --> 00:11:20,000
back. 
In 2015. 

242
00:11:20,000 --> 00:11:23,200
They had seven billion, then 
nine billion, then back down to 

243
00:11:23,200 --> 00:11:26,600
six billion, then they hiked it 
up a lot in 2018. 

244
00:11:26,800 --> 00:11:29,800
They had 17 billion. 
This was pre covid-19. 

245
00:11:29,800 --> 00:11:34,100
You know, big boost for Amazon, 
2019 pre covid, 22 billion 

246
00:11:34,100 --> 00:11:36,700
dollars in free, cash flow then 
in 2020. 

247
00:11:36,700 --> 00:11:38,800
They update the 26 billion 
dollars. 

248
00:11:38,800 --> 00:11:41,700
So Amazon has the ability to 
grow their free cash flow. 

249
00:11:41,900 --> 00:11:44,600
I think at a very steady rate 
and the company's grown its 

250
00:11:44,600 --> 00:11:49,300
Revenue dramatically since 2019.
It's added 200 billion dollars 

251
00:11:49,308 --> 00:11:52,000
in Revenue so they can grow free
cash flow. 

252
00:11:52,000 --> 00:11:53,700
They have AWS growing like 
crazy. 

253
00:11:53,708 --> 00:11:57,600
They have their revenue on their
retail growing like crazy and 

254
00:11:57,600 --> 00:11:59,500
the free cash flow just goes off
a cliff. 

255
00:11:59,800 --> 00:12:02,900
Right here in 2021. 
It goes down to 14 billion 

256
00:12:02,900 --> 00:12:06,400
dollars in the - the reason. 
Why is because Amazon is doing 

257
00:12:06,400 --> 00:12:09,200
aggressive reinvestments. 
They're throwing all of their 

258
00:12:09,200 --> 00:12:12,200
cash flows into capex. 
Meaning, they're buying so many 

259
00:12:12,200 --> 00:12:14,900
warehouses hiring. 
So many workers, buying all the 

260
00:12:14,900 --> 00:12:17,900
tools and equipment and they're 
just not making any free cash 

261
00:12:17,900 --> 00:12:20,600
flow right now. 
Now as a long-term investor, I 

262
00:12:20,600 --> 00:12:24,500
can't just look at one year, 
just their capex in one year and

263
00:12:24,500 --> 00:12:26,300
base my investment thesis off of
that. 

264
00:12:26,300 --> 00:12:29,100
I'm looking at the long-term 
time Horizon of the company, and

265
00:12:29,100 --> 00:12:32,500
I think that If the company 
chooses to based on my analysis,

266
00:12:32,500 --> 00:12:35,400
I think the company could 
generate 30 to 40 billion 

267
00:12:35,400 --> 00:12:37,200
dollars in free cash flow next 
year. 

268
00:12:37,500 --> 00:12:39,800
That's I think a conservative 
estimate that is incremental 

269
00:12:39,800 --> 00:12:43,300
free cash flow growth since 2020
as the company's expanded 

270
00:12:43,300 --> 00:12:45,300
rapidly. 
So, based off those estimates 

271
00:12:45,300 --> 00:12:47,300
Amazon. 
Right now with this one point 

272
00:12:47,300 --> 00:12:49,000
zero, nine trillion dollar price
tag. 

273
00:12:49,400 --> 00:12:52,200
It's trading around 25 to 30 
times. 

274
00:12:52,200 --> 00:12:55,600
Next year's free cash flow. 
And to me, that seems cheap for 

275
00:12:55,600 --> 00:12:57,500
Amazon. 
It's more expensive than other 

276
00:12:57,500 --> 00:12:59,000
companies. 
That's more expensive than 

277
00:12:59,000 --> 00:13:01,300
Google, or You know, other 
companies in the market that you

278
00:13:01,308 --> 00:13:04,800
can buy but not many companies 
in the market are growing their 

279
00:13:04,800 --> 00:13:06,400
e. 
But I like this, there's just 

280
00:13:06,400 --> 00:13:08,500
not many doing this. 
There's not many companies in 

281
00:13:08,508 --> 00:13:10,300
the market growing their 
revenues like this. 

282
00:13:10,700 --> 00:13:12,200
There's really not many 
companies. 

283
00:13:12,200 --> 00:13:14,700
Pulling in half a trillion 
dollars in Revenue. 

284
00:13:15,000 --> 00:13:18,300
Growing their ibadah at 
incredible speeds and trading at

285
00:13:18,300 --> 00:13:23,000
25 to 30 times free cash flow. 
So overall, I don't have a 

286
00:13:23,000 --> 00:13:26,900
specific dollar number of what 
Amazon is worth. 

287
00:13:26,900 --> 00:13:28,700
And in my opinion, I don't think
that's the way to look at 

288
00:13:28,700 --> 00:13:31,900
valuation. 
I've never once heard Warren 

289
00:13:31,900 --> 00:13:34,600
Buffett or Charlie. 
Munger, say apple is worth 

290
00:13:34,600 --> 00:13:37,600
exactly. 
This dollar amount or Coca-Cola 

291
00:13:37,600 --> 00:13:39,500
is worth exactly this dollar 
amount. 

292
00:13:39,600 --> 00:13:41,300
What they do is they look at 
ranges. 

293
00:13:41,500 --> 00:13:44,600
There's a ranger Amazon becomes 
kind of overvalued, and then it 

294
00:13:44,600 --> 00:13:47,100
becomes very overvalued. 
There's a range where it's 

295
00:13:47,100 --> 00:13:49,300
mostly fair value. 
And then there's a range where 

296
00:13:49,300 --> 00:13:51,900
it's undervalued and a range 
where it's grossly undervalued. 

297
00:13:52,000 --> 00:13:55,000
So based on my estimation of the
company, my valuation. 

298
00:13:55,200 --> 00:13:58,100
I think that fair value right 
now is somewhere in the range of

299
00:13:58,100 --> 00:14:00,600
3402. 
Dollars per share. 

300
00:14:00,900 --> 00:14:03,300
I think that's fairly valued 
based on the mode of the 

301
00:14:03,300 --> 00:14:05,900
company, the growth prospects 
the industries, that it competes

302
00:14:05,900 --> 00:14:09,000
in the ibadah, growth of the 
company and the free cash flow 

303
00:14:09,000 --> 00:14:11,200
opportunity. 
I think that's a fair value. 

304
00:14:11,300 --> 00:14:13,700
I think that if the company got 
up into the range of forty eight

305
00:14:13,700 --> 00:14:16,200
hundred dollars a share, that 
would probably be up into the 

306
00:14:16,200 --> 00:14:19,100
overvalued range right now and 
I'd be looking at taking some 

307
00:14:19,100 --> 00:14:21,700
gains at that point and I think 
the at a range of 2,000 dollars 

308
00:14:21,700 --> 00:14:23,400
per share. 
I think that the company is 

309
00:14:23,400 --> 00:14:25,700
undervalued. 
Now, there's no guarantees with 

310
00:14:25,700 --> 00:14:28,700
this and just as a disclaimer. 
This isn't a buyer sell 

311
00:14:28,700 --> 00:14:31,000
recommendation. 
I'm just showing you my thoughts

312
00:14:31,000 --> 00:14:33,300
and what I'm doing with my 
portfolio, I'm not telling any 

313
00:14:33,300 --> 00:14:35,600
of you what to do with yours. 
Now, the next company on the 

314
00:14:35,600 --> 00:14:39,100
list, the next biggest holding 
in my portfolio is Google and I 

315
00:14:39,100 --> 00:14:40,700
switched over to the Holdings 
page here. 

316
00:14:40,700 --> 00:14:43,200
So you can see the real return 
with Amazon. 

317
00:14:43,200 --> 00:14:47,200
I'm down 30% right now and with 
Google, I'm down 11% over. 

318
00:14:47,200 --> 00:14:50,600
Also, even Google has sold off 
over the past couple of months. 

319
00:14:50,600 --> 00:14:53,300
And it's a great company. 
Largely considered to be 

320
00:14:53,700 --> 00:14:55,100
undervalued. 
By most of you. 

321
00:14:55,300 --> 00:14:58,900
In fact, in the vote of what's 
the most overvalued company, 

322
00:14:59,300 --> 00:15:00,900
literally. 
Nobody voted for Google. 

323
00:15:00,900 --> 00:15:02,100
None of you. 
Thought it was the most 

324
00:15:02,100 --> 00:15:05,500
overvalued company in my 
portfolio and across the web 

325
00:15:05,500 --> 00:15:07,700
right now. 
Most people agree, that Google's

326
00:15:07,700 --> 00:15:09,800
undervalued. 
It's basically a consensus right

327
00:15:09,800 --> 00:15:11,400
now. 
Now, let's go ahead and see if 

328
00:15:11,400 --> 00:15:14,200
the analyst agree. 
Morningstar has Google at a 

329
00:15:14,200 --> 00:15:17,700
four-star by. 
So they actually believe that 

330
00:15:17,700 --> 00:15:21,800
Google is not as good or not as 
undervalued as Amazon. 

331
00:15:21,800 --> 00:15:23,900
They think the Amazons a more 
undervalued company. 

332
00:15:24,000 --> 00:15:27,300
Now, they give Google a Fair 
Value Estimate of 3600 dollars 

333
00:15:27,600 --> 00:15:29,600
and an economic moat that's 
wide. 

334
00:15:30,100 --> 00:15:32,700
So why don't company undervalued
right now? 

335
00:15:32,800 --> 00:15:34,900
Things are looking good. 
According to Morningstar Schwab 

336
00:15:34,900 --> 00:15:38,200
Equity analysis, right now, 
gives us a strong outperform, 

337
00:15:38,200 --> 00:15:42,800
the consider a by, and then we 
have the cfra giving Google a 

338
00:15:42,800 --> 00:15:46,100
four-star by. 
So all the analysis agree that 

339
00:15:46,100 --> 00:15:48,600
Google is undervalued currently.
So if you looked at the analyst 

340
00:15:48,600 --> 00:15:51,200
opinions, all of them across the
board agree that Google is 

341
00:15:51,200 --> 00:15:54,100
undervalued, and I think that 
most people online do, let's go 

342
00:15:54,100 --> 00:15:56,300
ahead and take a deeper. 
Look at this, with quatrain 

343
00:15:56,300 --> 00:15:58,100
sites. 
The first thing is that Google 

344
00:15:58,100 --> 00:16:02,300
has a nineteen point two. 
And forward P/E ratio, so this 

345
00:16:02,300 --> 00:16:06,400
big of a company growing, this 
fast has a 19-4 PE but keep in 

346
00:16:06,408 --> 00:16:09,600
mind, Ford Pease are based on 
analyst estimates. 

347
00:16:09,800 --> 00:16:12,700
There are just estimates that 
it's not set in stone and they 

348
00:16:12,700 --> 00:16:15,800
can be revised downwards. 
If a lot of companies, pull 

349
00:16:15,800 --> 00:16:18,500
their funding, they pull their 
marketing budget because they 

350
00:16:18,500 --> 00:16:21,500
think we're going into a 
recession or if we do enter into

351
00:16:21,500 --> 00:16:23,700
a recession. 
I think that Google will get 

352
00:16:23,700 --> 00:16:25,600
hit. 
The company will have lower 

353
00:16:25,600 --> 00:16:28,200
earnings than its. 
It's analysts forecast right 

354
00:16:28,200 --> 00:16:31,200
now, so that It is something to 
keep in mind. 

355
00:16:31,200 --> 00:16:34,500
Google will get more expensive. 
If we enter into a recession 

356
00:16:34,800 --> 00:16:36,800
with lots of companies pull 
their ad budget. 

357
00:16:36,800 --> 00:16:38,700
But right now, it still looks 
very cheap. 

358
00:16:38,900 --> 00:16:40,500
When you look at the growth rate
of the company. 

359
00:16:40,500 --> 00:16:43,300
It's just absurd. 
The company's growth is 

360
00:16:43,700 --> 00:16:46,300
incredible. 
In fact, it was unnatural growth

361
00:16:46,400 --> 00:16:48,900
from 2020 to 2021, the free cash
flow. 

362
00:16:48,900 --> 00:16:52,000
Growth of the company is absurd 
in 2021. 

363
00:16:52,000 --> 00:16:54,700
Google earned sixty seven 
billion dollars in free cash 

364
00:16:54,700 --> 00:16:56,800
flow. 
So that's not hypothetical. 

365
00:16:56,900 --> 00:16:59,700
That is how much they earned 
based on the free cash flow. 

366
00:16:59,900 --> 00:17:02,900
Well, it's trading at a 22 free 
cash flow multiple. 

367
00:17:03,300 --> 00:17:06,400
So the company is trading above 
some other companies but it's 

368
00:17:06,400 --> 00:17:08,900
still relatively cheap for a 
company like Google and the 

369
00:17:08,900 --> 00:17:11,200
Enterprise Value to e but have 
Google is even better. 

370
00:17:11,300 --> 00:17:13,800
It's at a 13. 
So the Enterprise Value to 

371
00:17:13,800 --> 00:17:18,000
ibadah was brought down a lot as
Google, grew their ibadah again,

372
00:17:18,000 --> 00:17:22,300
unnaturally from 2020 to 2021, 
going from 61 billion dollars in

373
00:17:22,300 --> 00:17:25,099
ibadah to 103 billion dollars in
ibadah. 

374
00:17:25,400 --> 00:17:27,800
That is just incredible. 
So when I look at all of these 

375
00:17:27,800 --> 00:17:30,600
metrics and I try to form a fair
value of Sumption on it. 

376
00:17:30,600 --> 00:17:33,800
I think the fair value of Google
is around 2,800 dollars per 

377
00:17:33,800 --> 00:17:35,400
share. 
That's where I'd be looking at 

378
00:17:35,400 --> 00:17:38,400
it as mostly Fair valued. 
I think at 3,000 or thirty five 

379
00:17:38,400 --> 00:17:40,700
hundred dollars a share the 
company's overvalued and I'd be 

380
00:17:40,700 --> 00:17:43,800
looking at taking gains and I 
know that this is different than

381
00:17:43,800 --> 00:17:45,600
what most people believe, right.
Now. 

382
00:17:45,800 --> 00:17:48,300
A lot of people believe that 
Google is the most undervalued 

383
00:17:48,300 --> 00:17:51,000
company in the market and the 
most obvious by. 

384
00:17:51,400 --> 00:17:54,800
But when I compare Google to 
other companies, I just think 

385
00:17:54,800 --> 00:17:57,700
that the terminal value risk. 
The long-term risk to the 

386
00:17:57,700 --> 00:18:02,400
company are greater than other. 
He's one of them is advertising.

387
00:18:02,500 --> 00:18:05,000
Advertising is a great business 
during good times. 

388
00:18:05,400 --> 00:18:08,300
But when we enter into a big 
recession, if we eventually do, 

389
00:18:08,600 --> 00:18:11,400
I think that Google's ibadah 
their earnings and profitability

390
00:18:11,400 --> 00:18:14,100
will be hit quite a bit. 
It's not as resilient as 

391
00:18:14,100 --> 00:18:17,000
something like Microsoft. 
Another thing that I think is a 

392
00:18:17,000 --> 00:18:20,300
risk for Google is the same risk
for Facebook. 

393
00:18:20,600 --> 00:18:23,400
You saw what Apple did to 
Facebook by doing privacy 

394
00:18:23,400 --> 00:18:25,200
changes. 
Now, just entertain me here for 

395
00:18:25,200 --> 00:18:27,300
a minute. 
Just imagine this hypothetical. 

396
00:18:27,500 --> 00:18:29,100
Let's say that in a couple 
years. 

397
00:18:29,700 --> 00:18:32,700
I will no longer wants to do the
agreement with Google where 

398
00:18:32,700 --> 00:18:36,600
Google pays Apple 12 plus 
billion dollars to be the 

399
00:18:36,600 --> 00:18:39,600
default search engine to be the 
default homepage on Safari 

400
00:18:39,600 --> 00:18:43,200
browser, when billions of people
by their phones, they open it 

401
00:18:43,200 --> 00:18:45,000
up. 
They have the Safari app and 

402
00:18:45,000 --> 00:18:47,600
they see Google as the default 
search engine. 

403
00:18:48,000 --> 00:18:50,000
Google is paying for that, 
right? 

404
00:18:50,000 --> 00:18:52,700
If they had an incredible moat 
and they, they just had no 

405
00:18:52,700 --> 00:18:55,500
competition. 
Why would Google pay Apple? 

406
00:18:55,700 --> 00:18:58,000
12, plus billion dollars to be 
defaulted. 

407
00:18:58,200 --> 00:18:59,700
Clearly. 
They think it's worth that much.

408
00:18:59,800 --> 00:19:03,900
Money now, imagine for a minute,
if Apple decided they no longer 

409
00:19:03,900 --> 00:19:07,700
wanted to do that and then stead
they defaulted their own browser

410
00:19:08,000 --> 00:19:09,600
apples search. 
Right? 

411
00:19:09,600 --> 00:19:12,100
I searched they could call it 
Spotlight, right? 

412
00:19:12,100 --> 00:19:14,600
They could do whatever they want
and it could have a huge privacy

413
00:19:14,600 --> 00:19:17,200
emphasis, just like what they 
did with Facebook. 

414
00:19:17,600 --> 00:19:19,800
This poses. 
I think a very great risk to 

415
00:19:19,800 --> 00:19:21,600
Google's business. 
It's something that I just 

416
00:19:21,600 --> 00:19:23,200
factored in in the back of my 
mind. 

417
00:19:23,300 --> 00:19:26,500
Apple could essentially do that 
sometime in the future and who 

418
00:19:26,500 --> 00:19:29,300
knows what would happen? 
Would people just revert right 

419
00:19:29,300 --> 00:19:31,700
back to Google search. 
Does it have that big of a 

420
00:19:31,700 --> 00:19:34,900
switching cost in a moat? 
Or would people kind of start to

421
00:19:34,900 --> 00:19:37,700
use the Apple search. 
So overall, I do like the 

422
00:19:37,700 --> 00:19:40,400
business of Google and I think 
it's clearly undervalued based 

423
00:19:40,400 --> 00:19:43,600
off its near-term future 
earnings, but there's some long 

424
00:19:43,600 --> 00:19:45,900
tail risks with this company 
that do concern me. 

425
00:19:46,000 --> 00:19:47,200
Now. 
My third biggest holding is 

426
00:19:47,200 --> 00:19:49,000
Microsoft. 
I currently have around 10 

427
00:19:49,000 --> 00:19:52,000
thousand dollars of value. 
And this holding is down, four 

428
00:19:52,000 --> 00:19:54,200
point five percent. 
So it's down just a hair, 

429
00:19:54,500 --> 00:19:58,600
Microsoft is one that about 
seven of you in this poll, so 

430
00:19:58,600 --> 00:20:00,700
not the most but some of I 
thought it was the most 

431
00:20:00,700 --> 00:20:04,100
overvalued company in my 
portfolio and the comments on 

432
00:20:04,100 --> 00:20:06,300
this one. 
We're basically that Microsoft 

433
00:20:06,300 --> 00:20:09,900
trades at a high P/E ratio. 
And the growth isn't too fast. 

434
00:20:09,900 --> 00:20:11,200
So you think it's the most 
overvalued? 

435
00:20:11,300 --> 00:20:12,900
Now, let's go ahead and take a 
look at the analyst here. 

436
00:20:13,100 --> 00:20:16,500
Morningstar has Microsoft as a 
four-star by the fair value 

437
00:20:16,500 --> 00:20:19,900
estimate of 352, and a wide 
economic mode. 

438
00:20:20,000 --> 00:20:22,500
So I agree with everything 
basically here. 

439
00:20:22,500 --> 00:20:25,000
I think that Morningstar has 
this one, right Schwab also has 

440
00:20:25,000 --> 00:20:28,600
this one as a strongly 
outperformed, their strongest by

441
00:20:28,600 --> 00:20:31,300
rating and cfra. 
A also has Microsoft as a 

442
00:20:31,300 --> 00:20:33,400
five-star by so across the 
board. 

443
00:20:33,400 --> 00:20:35,900
The analysts think that 
Microsoft is undervalued. 

444
00:20:35,900 --> 00:20:38,500
Now, let's go ahead and take a 
look at the fundamentals here. 

445
00:20:39,000 --> 00:20:41,700
Microsoft trades at a 23 
forward, P/E ratio. 

446
00:20:41,900 --> 00:20:44,000
So that's where most people 
think that it's overvalued 

447
00:20:44,000 --> 00:20:48,700
because right now, any company 
above a 20 PE ratio is being 

448
00:20:48,700 --> 00:20:51,500
looked at with very skeptical 
eyes, right? 

449
00:20:51,500 --> 00:20:54,100
People are looking at these 
higher PE companies and seeing 

450
00:20:54,100 --> 00:20:57,300
if they really deserve it, 
Microsoft is one that I think 

451
00:20:57,300 --> 00:20:59,600
really deserves it. 
This company deserves. 

452
00:20:59,800 --> 00:21:03,900
Trading at a 25 plus forward P/E
ratio if we look at the other 

453
00:21:03,900 --> 00:21:07,400
valuation metrics, Microsoft 
trades at a 10 price to sales. 

454
00:21:07,700 --> 00:21:10,100
I think that's reasonable. 
That's where it often trades 

455
00:21:10,100 --> 00:21:13,300
right there in that same range 
on an EV to ibadah at trades, 

456
00:21:13,300 --> 00:21:16,100
that an eighteen point seven. 
So, right there, with Amazon, 

457
00:21:16,100 --> 00:21:18,600
now, the thing that I really 
like about Microsoft is, I think

458
00:21:18,600 --> 00:21:21,500
this company has an incredible 
mode. 

459
00:21:21,600 --> 00:21:24,500
I think that unlike Google or 
unlike Facebook. 

460
00:21:24,700 --> 00:21:28,100
If we go into a battery session,
it will hurt, Microsoft's 

461
00:21:28,100 --> 00:21:31,200
earnings to some extent. 
But I have to believe that all 

462
00:21:31,200 --> 00:21:34,700
of its corporate business, 
licenses all the office tools, 

463
00:21:34,700 --> 00:21:36,900
all the things that they sell 
cloud computing. 

464
00:21:37,200 --> 00:21:40,100
I think that that will hold up a
bit better than the advertising 

465
00:21:40,100 --> 00:21:42,300
business. 
So, I think that Microsoft is 

466
00:21:42,300 --> 00:21:46,300
less susceptible to the impact 
of a recession, then companies 

467
00:21:46,300 --> 00:21:48,900
like Google or Facebook. 
That's why I think it deserves a

468
00:21:48,900 --> 00:21:51,600
higher PE ratio. 
Now, on a free cash flow basis, 

469
00:21:51,600 --> 00:21:55,000
Microsoft generates consistent 
and Incredibly fast growing free

470
00:21:55,000 --> 00:21:57,200
cash flow. 
It has incredibly high gross 

471
00:21:57,200 --> 00:21:59,500
margins. 
So as this company grows, its 

472
00:21:59,800 --> 00:22:02,900
Her mental Revenue, it keeps a 
lot of that as free cash flow. 

473
00:22:03,200 --> 00:22:05,600
And right now it's trading on a 
price to free cash flow of 

474
00:22:05,600 --> 00:22:08,700
around 33. 
So 56 billion dollars of free 

475
00:22:08,700 --> 00:22:11,600
cash flow last year, this 
continues to grow on Pace. 

476
00:22:11,600 --> 00:22:15,000
You can see the trend over time.
They're always posting positive 

477
00:22:15,000 --> 00:22:16,600
free cash flow. 
They have. 

478
00:22:16,600 --> 00:22:19,600
I think an unassailable moat. 
I don't think they're ever going

479
00:22:19,600 --> 00:22:23,700
to get disrupted and I think 33 
price to free cash flow is 

480
00:22:23,700 --> 00:22:25,400
reasonable for a company like 
this. 

481
00:22:25,600 --> 00:22:29,500
I think a PE ratio of 24 is 
undervalued side. 

482
00:22:29,700 --> 00:22:32,200
Look at Microsoft and I think 
the fair value of this company 

483
00:22:32,200 --> 00:22:33,700
is right there with Morning 
Star. 

484
00:22:33,800 --> 00:22:36,300
I think it's 350 right now, at 
260. 

485
00:22:36,300 --> 00:22:38,700
I think that the company is just
undervalued and the arguments 

486
00:22:38,700 --> 00:22:42,500
that Microsoft should trade back
into a teens PE ratio, right? 

487
00:22:42,500 --> 00:22:45,300
17 or 18. 
I just think are incorrect. 

488
00:22:45,300 --> 00:22:48,700
This company deserves a large 
premium over other companies 

489
00:22:48,900 --> 00:22:51,700
because of the consistency of 
their cash flow that consistency

490
00:22:51,700 --> 00:22:53,700
of their growth. 
And I think they're incredible 

491
00:22:53,700 --> 00:22:55,100
mode. 
When we look at the shares 

492
00:22:55,100 --> 00:22:57,400
outstanding, you can see that 
they just continually do these 

493
00:22:57,400 --> 00:23:00,000
share BuyBacks. 
And I think that there Do that 

494
00:23:00,000 --> 00:23:02,400
right now. 
So Microsoft is actually a 

495
00:23:02,400 --> 00:23:03,800
company that right. 
Now. 

496
00:23:03,800 --> 00:23:05,900
I think is set up very good for 
the next three years. 

497
00:23:06,100 --> 00:23:09,200
I can see it continually growing
and being impacted in a 

498
00:23:09,200 --> 00:23:11,500
recession to a lesser extent 
than most companies. 

499
00:23:11,500 --> 00:23:15,500
So if Microsoft trades up to the
350 range, that 360s, I'll be 

500
00:23:15,500 --> 00:23:16,900
looking at taking gains at that 
point. 

501
00:23:16,900 --> 00:23:18,600
But right now, it's not even 
close to that. 

502
00:23:18,600 --> 00:23:22,000
And I think in this market with 
the hatred towards any tech 

503
00:23:22,000 --> 00:23:23,600
company, I don't think I'm going
to get there. 

504
00:23:23,600 --> 00:23:26,000
Anytime soon. 
Next, we have Netflix. 

505
00:23:26,000 --> 00:23:28,700
This is the fourth largest 
holding and boy, is this one, a 

506
00:23:28,708 --> 00:23:30,800
tough one. 
It's a Tough one to look at. 

507
00:23:30,900 --> 00:23:34,000
I am down seventeen thousand six
hundred dollars on Netflix. 

508
00:23:34,200 --> 00:23:38,500
That is. 64% some down over half
my initial capital in this 

509
00:23:38,500 --> 00:23:41,800
company. 
This one is not a company like 

510
00:23:41,800 --> 00:23:43,800
Taco Bell, right? 
This wasn't Peter Lynch buying 

511
00:23:43,800 --> 00:23:47,100
Taco Bell and the company fell 
down half in price because of no

512
00:23:47,200 --> 00:23:50,500
fundamental reason. 
Netflix fell down half and price

513
00:23:50,600 --> 00:23:54,200
or 64 percent in price because 
of fundamental related reasons. 

514
00:23:54,400 --> 00:23:57,500
The growth Outlook has 
deteriorated for the company. 

515
00:23:57,700 --> 00:23:59,600
Their total addressable Market 
seems to be much. 

516
00:23:59,700 --> 00:24:03,300
Smaller than investors were 
anticipating and the competition

517
00:24:03,300 --> 00:24:05,000
seems to be having a greater 
impact. 

518
00:24:05,000 --> 00:24:08,100
So I don't think that Netflix 
sold off for no reason. 

519
00:24:08,300 --> 00:24:11,000
I think the company deserved a 
trade down, but the question I 

520
00:24:11,008 --> 00:24:14,700
have to ask myself now is with 
it at its current price. 

521
00:24:14,900 --> 00:24:17,100
Is it still overvalued or 
undervalued? 

522
00:24:17,100 --> 00:24:18,200
And that's what we're going to 
look at. 

523
00:24:18,200 --> 00:24:20,700
Now, in terms of the poles. 
You can see Netflix right here, 

524
00:24:21,000 --> 00:24:24,100
eight of you thought that this 
is the most overvalued company 

525
00:24:24,100 --> 00:24:26,800
in my portfolio. 
When I read your reasoning, many

526
00:24:26,800 --> 00:24:30,500
of you said, Netflix, just has 
to Take the bowl and difficult 

527
00:24:30,500 --> 00:24:32,800
of a path, which I think is a 
fair argument. 

528
00:24:32,800 --> 00:24:35,300
You're basically saying you 
can't predict the future. 

529
00:24:35,300 --> 00:24:38,100
The company might not, you know,
have any free cash on the 

530
00:24:38,100 --> 00:24:40,200
future. 
It might get to disrupted. 

531
00:24:40,200 --> 00:24:42,900
So it's to overvalue too risky. 
And that's a take that I 

532
00:24:42,900 --> 00:24:44,500
understand. 
Now, let's go ahead and look at 

533
00:24:44,500 --> 00:24:46,700
the animals here. 
Morningstar has Netflix. 

534
00:24:46,700 --> 00:24:50,400
Now, as a four-star by, and I 
have to give credit where credit

535
00:24:50,400 --> 00:24:52,800
is due. 
Morningstar was spot-on with 

536
00:24:52,800 --> 00:24:55,700
their assessment on Netflix. 
They've held that this company 

537
00:24:55,700 --> 00:24:59,500
has been overvalued all the way 
since 2017, this Orange. 

538
00:24:59,700 --> 00:25:02,800
Hair is overvalued. 
So they firmly said, this 

539
00:25:02,800 --> 00:25:06,300
company has been overvalued for 
a very long time, year after 

540
00:25:06,300 --> 00:25:09,700
year, after year. 
And after this massive Plunge in

541
00:25:09,700 --> 00:25:12,400
stock price. 
Finally, for the first time in 

542
00:25:12,400 --> 00:25:14,900
like ten years. 
They're saying, now, the stock 

543
00:25:14,900 --> 00:25:17,400
is undervalued, right? 
The price has changed 

544
00:25:17,400 --> 00:25:20,200
dramatically for Netflix and now
they're actually saying that 

545
00:25:20,200 --> 00:25:22,900
it's a four-star by. 
They have the Fair Value 

546
00:25:22,900 --> 00:25:25,600
Estimate as to 80 Schwab has a 
rating of hold on. 

547
00:25:25,600 --> 00:25:28,200
Netflix. 
It's a market perform and cfra 

548
00:25:28,200 --> 00:25:31,100
has a three star rating. 
On Netflix, which again, is just

549
00:25:31,100 --> 00:25:31,800
like a hold. 
Now. 

550
00:25:31,800 --> 00:25:33,700
Let's go ahead and take a look 
at Netflix and my personal 

551
00:25:33,700 --> 00:25:36,300
valuation on the company. 
When I look in terms of 

552
00:25:36,300 --> 00:25:38,300
valuation on Netflix. 
The first thing that I'm looking

553
00:25:38,300 --> 00:25:41,600
at is the PE ratio of the 
company, it used to trade at 

554
00:25:41,600 --> 00:25:44,200
that growth premium. 
The growth premium was a 

555
00:25:44,200 --> 00:25:46,500
40-plus. 
So, while Netflix had a bright 

556
00:25:46,500 --> 00:25:49,400
future, it didn't seem to have 
such a small total addressable 

557
00:25:49,400 --> 00:25:54,000
market and before it had a huge 
indication is that competition 

558
00:25:54,000 --> 00:25:56,800
and internet-connected devices 
was a big problem for it. 

559
00:25:56,900 --> 00:26:00,300
It traded at that growth, 
premium valuation of Got 40 to 

560
00:26:00,300 --> 00:26:02,600
60 for PE. 
Now. 

561
00:26:02,600 --> 00:26:06,000
Look at it, the premiums gone. 
It's trading at a 17. 

562
00:26:06,300 --> 00:26:09,500
This is cheaper than basically, 
all of big Tech right there with

563
00:26:09,500 --> 00:26:11,800
Facebook. 
It trades at the same PE ratio 

564
00:26:11,800 --> 00:26:14,300
as many restaurants and slow 
growing companies. 

565
00:26:14,700 --> 00:26:19,200
So Netflix, no longer is being 
priced by investors as a premium

566
00:26:19,200 --> 00:26:21,200
company. 
It's traded down to a very 

567
00:26:21,200 --> 00:26:23,700
moderate slow growing company 
that has lots of risks. 

568
00:26:23,700 --> 00:26:27,200
So that's the first thing that I
would point out the Enterprise 

569
00:26:27,200 --> 00:26:31,700
Value to ibadah is for .7, And 
now I know that Netflix has some

570
00:26:31,700 --> 00:26:33,800
different accounting with their 
amortization. 

571
00:26:34,100 --> 00:26:37,100
So that eBay doesn't perfectly 
reflect the profitability and 

572
00:26:37,100 --> 00:26:39,400
free cash flow. 
I'm aware of that but that's 

573
00:26:39,400 --> 00:26:42,200
still a pretty incredible even 
at ibadah. 

574
00:26:42,300 --> 00:26:45,300
Even when you discount the 
amortization, which most 

575
00:26:45,300 --> 00:26:49,600
expenses for Netflix, about 80% 
of them are amortized in the 

576
00:26:49,600 --> 00:26:52,500
first two years. 
So on a rolling basis, this is 

577
00:26:52,500 --> 00:26:54,900
still a lot of ibadah for a very
cheap price. 

578
00:26:55,300 --> 00:26:57,200
We look at the price to sales of
Netflix. 

579
00:26:57,500 --> 00:27:00,300
We just saw that Microsoft 
trades at a 10 Used to sales, 

580
00:27:00,600 --> 00:27:05,500
Netflix is creating out of 2.7. 
So 2.7 times its Revenue. 

581
00:27:05,600 --> 00:27:07,100
That's the price of the market 
cap. 

582
00:27:07,400 --> 00:27:10,800
Overall, the picture and 
painting here is that Netflix is

583
00:27:10,800 --> 00:27:13,900
not priced for greatness. 
It's not price to be this 

584
00:27:14,200 --> 00:27:17,400
all-encompassing biggest 
streaming service super 

585
00:27:17,400 --> 00:27:19,500
profitable. 
Now, it's just being priced as a

586
00:27:19,500 --> 00:27:22,500
very moderate kind of slow 
growing company and I still 

587
00:27:22,500 --> 00:27:25,800
believe that Netflix does have a
lot of potential aside from what

588
00:27:25,800 --> 00:27:29,600
the widespread - press has led 
everyone to believe they for I 

589
00:27:29,608 --> 00:27:31,800
casted Mega subscriber gains, 
right? 

590
00:27:31,800 --> 00:27:33,400
They're going to lose two 
million next quarter. 

591
00:27:33,600 --> 00:27:35,700
That's what they're forecasting.
But based off their last 

592
00:27:35,700 --> 00:27:38,300
forecast. 
It could be plus 1 million or - 

593
00:27:38,300 --> 00:27:40,500
5 million, right? 
It's a little bit unpredictable.

594
00:27:40,900 --> 00:27:44,200
But overall, they forecasted 
that they're having a churn and 

595
00:27:44,200 --> 00:27:47,300
subscribers because they're at 
this massive size and many 

596
00:27:47,300 --> 00:27:50,700
people in 2022. 
Are like finally, I can go out 

597
00:27:50,700 --> 00:27:52,300
and go on vacations. 
Finally. 

598
00:27:52,300 --> 00:27:55,400
The covid restrictions are gone.
So this hasn't been a good year 

599
00:27:55,400 --> 00:27:57,600
for Netflix, and I think that 
the rest of this year, will be 

600
00:27:57,608 --> 00:27:59,400
really tough, but I'm still 
looking. 

601
00:27:59,600 --> 00:28:01,400
The terminal value of this 
company. 

602
00:28:01,600 --> 00:28:05,800
The long-term Prospect right? 
Netflix still is the biggest 

603
00:28:05,800 --> 00:28:09,300
streaming service. 
The free cash flow has widely 

604
00:28:09,300 --> 00:28:14,500
been for the past 10 years - 
just money burning all around 

605
00:28:14,500 --> 00:28:16,200
every quarter, burned more and 
more money. 

606
00:28:16,600 --> 00:28:19,700
But now look, they're having 
more and more positive quarters.

607
00:28:19,700 --> 00:28:21,100
And these are meaningful 
quarters. 

608
00:28:21,400 --> 00:28:23,900
Last quarter. 
They beat their free cash flow 

609
00:28:23,900 --> 00:28:26,900
estimate by 100 million. 
So they were expecting to have 

610
00:28:26,900 --> 00:28:28,600
somewhere a little bit over 700 
million. 

611
00:28:28,900 --> 00:28:32,500
They came in with 800 million 
free cash flow that quarter and 

612
00:28:32,500 --> 00:28:34,900
they're projecting their 
forecasting to be free, cash 

613
00:28:34,900 --> 00:28:37,700
flow positive from here on out. 
So looking at the current 

614
00:28:37,700 --> 00:28:41,000
valuation and the situation 
Netflix is in, I still think 

615
00:28:41,000 --> 00:28:43,100
there is a network effect to 
this company. 

616
00:28:43,400 --> 00:28:45,100
Meaning right now. 
They're shedding some 

617
00:28:45,100 --> 00:28:49,000
subscribers because of I think 
temporary issues over the full 

618
00:28:49,000 --> 00:28:52,200
year term in 2022. 
I think that Netflix will come 

619
00:28:52,200 --> 00:28:55,100
out with a net subscriber gain 
going forward. 

620
00:28:55,100 --> 00:28:56,500
If they're continuing to do 
that. 

621
00:28:56,600 --> 00:28:59,500
They will have earnings growth. 
I estimate that their earnings. 

622
00:28:59,600 --> 00:29:02,700
Will be 20 to 30 percent over 
the next five years. 

623
00:29:02,900 --> 00:29:07,300
And I think that in 2025 Netflix
could have free cash flows of 

624
00:29:07,308 --> 00:29:10,400
around 8 to 10 billion dollars. 
That's the case, the company I 

625
00:29:10,400 --> 00:29:13,400
think will be valued above 550. 
So even right now, is 

626
00:29:13,400 --> 00:29:15,700
discouraging, as this company 
has been to hold. 

627
00:29:16,000 --> 00:29:18,900
I think I can make a profit on 
this over the next five years. 

628
00:29:19,000 --> 00:29:21,500
The downside of this company is 
if they just cannot regain 

629
00:29:21,500 --> 00:29:24,400
growth, if the company's just 
fizzling out, they have no 

630
00:29:24,400 --> 00:29:27,500
bigger total addressable Market.
They can't figure out the India 

631
00:29:27,500 --> 00:29:30,600
market, the Asia Market, they 
Can't continue to grow in South 

632
00:29:30,600 --> 00:29:33,000
America. 
If that's the case, then the 

633
00:29:33,000 --> 00:29:35,500
share price will either stagnate
or just Trail off. 

634
00:29:35,500 --> 00:29:37,300
So that's the upside and 
downside right now. 

635
00:29:37,300 --> 00:29:38,900
For me. 
Netflix is a whole. 

636
00:29:38,900 --> 00:29:41,300
Now after Netflix. 
We have my next largest holding,

637
00:29:41,300 --> 00:29:44,500
which is a Dobby. 
I'm down 8% on this. 

638
00:29:44,500 --> 00:29:46,300
Holding. 
So out of five thousand, three 

639
00:29:46,300 --> 00:29:47,800
hundred dollars invested. 
I'm down. 

640
00:29:47,800 --> 00:29:51,000
Roughly four hundred and sixty. 
Now adobe's one of the companies

641
00:29:51,400 --> 00:29:55,700
that you voted as one of the 
most overvalued in my portfolio.

642
00:29:55,700 --> 00:29:59,400
So right there behind 
Salesforce, we have 20 votes 

643
00:29:59,400 --> 00:30:01,400
that Dobby is the most 
overvalued. 

644
00:30:01,400 --> 00:30:02,900
Let's go ahead and take a look 
at what the analysts. 

645
00:30:02,900 --> 00:30:05,000
Think, morning start believes 
that adobe's. 

646
00:30:05,000 --> 00:30:07,300
Actually, a by the consider, a 
five-star by. 

647
00:30:07,400 --> 00:30:10,200
So a better buy than Google. 
I think that that's probably 

648
00:30:10,200 --> 00:30:12,800
shocking to a lot of people. 
They have the Fair Value 

649
00:30:12,800 --> 00:30:16,000
Estimate at 6:15. 
They have the economic moat of 

650
00:30:16,000 --> 00:30:19,400
the company rating as wide. 
And I agree with the moat 

651
00:30:19,400 --> 00:30:21,700
rating, but we'll talk about the
valuation in a minute. 

652
00:30:21,900 --> 00:30:24,700
We have Schwab giving Adobe a 
hold. 

653
00:30:24,700 --> 00:30:26,300
So they don't consider a strong 
by. 

654
00:30:26,600 --> 00:30:27,700
They're just saying, hold on to 
it. 

655
00:30:27,700 --> 00:30:29,400
And we have the cfra giving this
one a four. 

656
00:30:29,500 --> 00:30:30,800
Star by. 
So let's go ahead and look at 

657
00:30:30,800 --> 00:30:33,400
adobe's valuation. 
This company has come down like 

658
00:30:33,400 --> 00:30:36,000
crazy and price. 
We can see from the beginning of

659
00:30:36,000 --> 00:30:39,700
this year. 
Year-to-date adobe's down $165 

660
00:30:40,100 --> 00:30:42,400
and over the past year. 
You can see the huge spike in 

661
00:30:42,400 --> 00:30:45,500
price is up to nearly $700 per 
share. 

662
00:30:45,800 --> 00:30:46,900
Now. 
It's down to four hundred 

663
00:30:46,900 --> 00:30:49,500
dollars per share. 
But again because a company came

664
00:30:49,500 --> 00:30:52,900
down in price doesn't mean that 
it's now undervalued necessarily

665
00:30:53,200 --> 00:30:55,900
because a company moved up in 
price doesn't mean that it was 

666
00:30:55,900 --> 00:30:58,000
undervalued previously, fair 
value. 

667
00:30:58,000 --> 00:31:00,300
Estimates can vary widely from 
Actual price. 

668
00:31:00,800 --> 00:31:03,600
If we look at Adobe, we have a 
company that trades at a 

669
00:31:03,600 --> 00:31:07,100
premium. 
The premium is 29 forward P/E. 

670
00:31:07,400 --> 00:31:08,900
That's what most of you are 
saying. 

671
00:31:09,200 --> 00:31:11,800
Means this company is overvalued
it, trades at a premium 

672
00:31:11,800 --> 00:31:15,200
valuation, in terms of forward, 
P/E ratio and the Enterprise 

673
00:31:15,200 --> 00:31:18,200
Value to ibadah. 
Even on a price to sales basis, 

674
00:31:18,300 --> 00:31:22,100
Adobe seems expensive. 
It trades at a 12 price to sales

675
00:31:22,500 --> 00:31:24,900
where Microsoft trades at a 10. 
Right? 

676
00:31:25,100 --> 00:31:26,500
Those are both software 
companies. 

677
00:31:26,500 --> 00:31:30,400
Microsoft has incredible gross 
margins, but Adobe Demands, even

678
00:31:30,400 --> 00:31:32,800
a higher price to sales than 
Microsoft. 

679
00:31:32,800 --> 00:31:36,400
So so far at a quick glance at 
these valuation metrics overall.

680
00:31:36,400 --> 00:31:39,100
I'm starting to agree with you. 
That adobe might be the most 

681
00:31:39,100 --> 00:31:41,400
overvalued company in my 
portfolio. 

682
00:31:41,700 --> 00:31:43,900
Let's go ahead and take a look 
at why investors might be 

683
00:31:43,900 --> 00:31:45,700
valuing this company, to this 
extent. 

684
00:31:45,900 --> 00:31:49,000
First of all, let's look at the 
annual free cash, flow growth 

685
00:31:49,000 --> 00:31:51,800
because I think this will be 
revealing, this company is 

686
00:31:51,800 --> 00:31:54,100
growing, its free cash flow to 
an insane amount. 

687
00:31:54,100 --> 00:31:56,100
Let's go ahead and blow this up 
because I want to look at the 

688
00:31:56,100 --> 00:31:58,300
free cash flow of this company. 
Over time. 

689
00:31:58,700 --> 00:32:01,400
This is what I Investors are 
really looking at and really 

690
00:32:01,400 --> 00:32:04,400
paying for with this company. 
Try to find another company, 

691
00:32:04,700 --> 00:32:08,600
with this explosive level of 
consistent, growing free, cash 

692
00:32:08,600 --> 00:32:10,200
flow. 
See if you can find another 

693
00:32:10,200 --> 00:32:12,300
software company that has it to 
this extent. 

694
00:32:12,600 --> 00:32:16,600
We have a company that for 2002 
to 2014. 

695
00:32:17,100 --> 00:32:20,100
It did grow its free cash flow 
substantially, you know, but 

696
00:32:20,100 --> 00:32:23,500
then in 2013, it was like a 
switch flipped, right? 

697
00:32:23,500 --> 00:32:26,400
Something happened. 
What happened was they switch to

698
00:32:26,400 --> 00:32:28,700
SAS? 
They switch to the cloud model 

699
00:32:29,000 --> 00:32:30,900
no longer. 
Could you go on and just pirate 

700
00:32:30,900 --> 00:32:33,300
the whole Adobe suite? 
They switch to that nice Cloud 

701
00:32:33,300 --> 00:32:35,000
Model that stopped all the 
piracy. 

702
00:32:35,200 --> 00:32:38,400
They have incremental updates. 
They build people monthly lots 

703
00:32:38,400 --> 00:32:41,300
of professionals, use it for 
photography, for video editing, 

704
00:32:41,500 --> 00:32:45,300
for all different applications. 
They have very tough switching 

705
00:32:45,300 --> 00:32:46,900
costs. 
So if you learn everything on an

706
00:32:46,900 --> 00:32:49,500
adobe piece of software, you 
don't really want to switch over

707
00:32:49,500 --> 00:32:51,200
to something else. 
Even if it's cheaper. 

708
00:32:51,300 --> 00:32:54,000
You just have so much energy. 
Tie it into Adobe. 

709
00:32:54,400 --> 00:32:58,900
So since 2013, they started to 
see this explosive growth in 

710
00:32:58,900 --> 00:33:01,700
there. 
Out Create a seat subscriptions 

711
00:33:01,900 --> 00:33:04,900
and their free cash flow and you
saw it go from. 

712
00:33:05,200 --> 00:33:08,000
Let's see, less than 1 billion 
dollars in free cash flow per 

713
00:33:08,000 --> 00:33:13,300
year to 6.8 billion. 
So they 6 x 7 x their free cash 

714
00:33:13,300 --> 00:33:17,800
flow from 2013 to 2020 one. 
That is dramatic and simply put 

715
00:33:17,800 --> 00:33:19,200
not many companies are doing 
this. 

716
00:33:19,200 --> 00:33:22,000
So, I think, the biggest reason 
that investors are paying a 

717
00:33:22,000 --> 00:33:25,700
premium for Adobe, is this 
consistent growth of free cash 

718
00:33:25,700 --> 00:33:29,000
flow consistent growth of 
ibadah, explosive growth of 

719
00:33:29,000 --> 00:33:30,800
Revenue. 
New, the company has every 

720
00:33:30,800 --> 00:33:32,400
metric moving in the right 
direction. 

721
00:33:32,700 --> 00:33:35,200
It has high gross margins. 
It's highly profitable. 

722
00:33:35,400 --> 00:33:38,500
The net income looks fantastic. 
The earnings per share. 

723
00:33:38,500 --> 00:33:40,300
Growth is very consistent, and 
growing. 

724
00:33:40,700 --> 00:33:42,900
And unlike a lot of software 
companies. 

725
00:33:42,900 --> 00:33:44,900
They're not diluting you. 
In fact, they're doing the 

726
00:33:44,900 --> 00:33:47,700
opposite, you can see the shares
outstanding going down over 

727
00:33:47,700 --> 00:33:50,200
time. 
So adobe's now in the situation 

728
00:33:50,200 --> 00:33:51,900
where they generate so much free
cash flow. 

729
00:33:52,200 --> 00:33:54,400
They can use that to buy back 
their shares of manufacture 

730
00:33:54,400 --> 00:33:56,000
their earnings. 
So when I look at all these 

731
00:33:56,000 --> 00:33:58,800
metrics of adobe, I'm looking at
a company that I consider to 

732
00:33:58,800 --> 00:34:01,600
have a pretty. 
I'd mode there is competition. 

733
00:34:01,600 --> 00:34:03,500
There are people moving away to 
other products. 

734
00:34:03,700 --> 00:34:06,700
But Adobe still has a pretty big
Moe and it has lots of markets. 

735
00:34:06,700 --> 00:34:09,500
It can actually grow into lots 
of international markets. 

736
00:34:09,900 --> 00:34:12,900
Now, having said that, we have a
company that trades at a price 

737
00:34:12,900 --> 00:34:16,300
to free cash flow of around 30 
based on last year's earnings 

738
00:34:16,300 --> 00:34:18,600
2021. 
I think that the free cash flow 

739
00:34:18,600 --> 00:34:20,800
will continue to grow, you know,
the pasted. 

740
00:34:20,800 --> 00:34:24,000
It has been ten to twenty 
percent per year and based on 

741
00:34:24,000 --> 00:34:24,900
that. 
I don't think it's too 

742
00:34:24,900 --> 00:34:26,600
expensive. 
I think that adobe's right there

743
00:34:26,600 --> 00:34:29,199
around fair value. 
So, this is actually a company 

744
00:34:29,199 --> 00:34:31,600
that II do think is sitting 
around fair value. 

745
00:34:31,600 --> 00:34:33,699
My estimates are around 450 for 
it right now. 

746
00:34:33,699 --> 00:34:38,000
So if Adobe does trade up to 
like, 600 dollars a share, 650, 

747
00:34:38,300 --> 00:34:41,900
I'll be taking gains if it 
trades down to 32, 250. 

748
00:34:42,100 --> 00:34:44,400
I'll be buying more of the 
company because I look at this 

749
00:34:44,400 --> 00:34:49,199
one is almost a certainty. 
It's a bond like company that it

750
00:34:49,199 --> 00:34:52,400
will generate free cash flows. 
That's for certain the amount. 

751
00:34:52,400 --> 00:34:55,300
That's a variable is how fast 
those free cash flows will grow.

752
00:34:55,300 --> 00:34:57,900
So this company I think is a 
safer bet. 

753
00:34:57,900 --> 00:34:59,300
It's more of a bond like 
company. 

754
00:34:59,500 --> 00:35:01,600
You have to pay up for the 
premium of adobe. 

755
00:35:01,900 --> 00:35:04,000
But right now I think it's just 
under Fair Value. 

756
00:35:04,000 --> 00:35:06,800
Now, next up after Adobe. 
We have Ali Baba. 

757
00:35:06,800 --> 00:35:09,900
The Chinese e-commerce giant. 
This company has been one of my 

758
00:35:09,900 --> 00:35:13,900
biggest losses in the portfolio.
Overall retail in general has 

759
00:35:13,900 --> 00:35:16,600
just been hit any company 
connected with retail and 

760
00:35:16,600 --> 00:35:19,100
especially online. 
Retail has been hit hard over 

761
00:35:19,100 --> 00:35:22,600
the past couple of months, but 
Ali Baba has its own specific 

762
00:35:22,600 --> 00:35:25,300
unique concerns. 
I have five thousand one hundred

763
00:35:25,300 --> 00:35:28,400
dollars worth of value in this 
company, and I'm down currently 

764
00:35:28,400 --> 00:35:31,800
5700. 
So 53% I bought this one 

765
00:35:32,100 --> 00:35:34,400
thinking, it was a value play, 
the numbers look good on. 

766
00:35:34,400 --> 00:35:38,100
It looked like a fast growing 
company and people were fearful 

767
00:35:38,100 --> 00:35:41,700
of China, but not to the extent 
that they are currently right. 

768
00:35:41,700 --> 00:35:43,400
Now. 
People are very skeptical of the

769
00:35:43,400 --> 00:35:46,100
Chinese government, and most 
investors, want nothing to do 

770
00:35:46,100 --> 00:35:48,500
with it. 
So when we look at your guy's 

771
00:35:48,500 --> 00:35:52,000
opinion on the most overvalue 
companies, two of you voted for 

772
00:35:52,000 --> 00:35:54,700
Ali, Baba, and your comments 
were that Ali. 

773
00:35:54,700 --> 00:35:58,100
Baba basically can't be valid 
because it presents too many 

774
00:35:58,100 --> 00:35:59,300
risks, right? 
The Chinese. 

775
00:35:59,500 --> 00:36:02,300
Is the biggest one. 
Now, we look at this and we look

776
00:36:02,300 --> 00:36:05,700
at the analysis here. 
Morningstar has a five star by. 

777
00:36:06,000 --> 00:36:09,600
They have the Fair Value 
Estimate at 179 and they have it

778
00:36:09,600 --> 00:36:12,900
as an economic wide mode. 
And while Morningstar is correct

779
00:36:12,900 --> 00:36:15,400
on many of these companies. 
They've been very incorrect on 

780
00:36:15,400 --> 00:36:16,100
Ali. 
Baba. 

781
00:36:16,400 --> 00:36:19,100
They had this company at a fair 
value of 300. 

782
00:36:19,200 --> 00:36:20,800
Now they have the fair value at 
180. 

783
00:36:21,400 --> 00:36:23,700
So they keep adjusting down the 
fair value. 

784
00:36:23,700 --> 00:36:25,800
Cfra has this one as a cell as 
well. 

785
00:36:25,800 --> 00:36:29,000
So they have it as a 2 Star 
which is a cell they say that 

786
00:36:29,000 --> 00:36:31,700
they're Risks of assessment, 
reflects, our view of 

787
00:36:31,700 --> 00:36:34,600
considerable oversight and 
interference by the Chinese 

788
00:36:34,600 --> 00:36:36,800
Communist Party notable 
competitors. 

789
00:36:36,800 --> 00:36:39,700
And dynamic market for 
e-commerce and other digital 

790
00:36:39,700 --> 00:36:42,100
offerings. 
We also have some concerns 

791
00:36:42,100 --> 00:36:45,100
related to corporate governance.
So that's their thoughts on it. 

792
00:36:45,107 --> 00:36:46,400
They think that this one is a 
cell. 

793
00:36:46,600 --> 00:36:49,300
There's this too many extrinsic 
risks to the company. 

794
00:36:49,300 --> 00:36:52,000
Now, with every company that I 
look at, I'm always trying to 

795
00:36:52,008 --> 00:36:55,100
separate the company, the 
fundamentals and the fair value 

796
00:36:55,100 --> 00:36:57,000
of the company from the stock 
price. 

797
00:36:57,000 --> 00:36:59,300
The stock price can trade, very 
volatile can go any direction. 

798
00:36:59,400 --> 00:37:00,900
In. 
But we want to look at the 

799
00:37:00,900 --> 00:37:03,300
actual company in the 
fundamental and future outlook. 

800
00:37:03,400 --> 00:37:07,000
Right now. 
The valuation of Ali Baba is 

801
00:37:07,000 --> 00:37:09,100
it's creating out of ten price 
to earnings. 

802
00:37:09,300 --> 00:37:11,900
So it's cheaper than any other 
big Tech in the u.s. 

803
00:37:11,900 --> 00:37:14,600
It's cheaper than Facebook 
cheaper than Amazon cheaper than

804
00:37:14,600 --> 00:37:17,400
basically everything cheaper 
than Netflix, you know cheaper 

805
00:37:17,400 --> 00:37:19,800
than a lot of restaurants here 
on paper Ali. 

806
00:37:19,800 --> 00:37:23,300
Baba's like the cheapest company
if it was a US based company, 

807
00:37:23,700 --> 00:37:27,000
but looking at the actual 
fundamentals of the company, we 

808
00:37:27,000 --> 00:37:29,200
have growth actually to 
celebrating Revenue. 

809
00:37:29,400 --> 00:37:32,300
Growth is decelerating a lot and
it's kind of unknown. 

810
00:37:32,300 --> 00:37:35,500
If it's going to re-accelerate. 
We have all the margins, gross 

811
00:37:35,500 --> 00:37:38,400
margins profit, margins 
operating margins decelerate, in

812
00:37:38,408 --> 00:37:41,300
a moving down over time as well.
We have a company that is facing

813
00:37:41,300 --> 00:37:45,700
increasing competition and it 
has a lot of factors at play 

814
00:37:45,900 --> 00:37:48,700
that I don't think are directly 
fundamentally related, but I 

815
00:37:48,700 --> 00:37:51,300
think they're close enough. 
The Chinese government can 

816
00:37:51,300 --> 00:37:54,800
affect the profitability of the 
company and their interference 

817
00:37:54,800 --> 00:37:58,100
over the past year has been 
pretty aggressive way more than 

818
00:37:58,100 --> 00:38:01,300
I actually anticipated. 
So I'm looking at this company 

819
00:38:01,500 --> 00:38:03,800
looking at the concerns going 
forward and I'm going to be 

820
00:38:03,800 --> 00:38:06,100
tracking this company over the 
next two quarters. 

821
00:38:06,300 --> 00:38:07,900
Because as of right now, Ali 
Baba. 

822
00:38:07,900 --> 00:38:10,400
And my opinion is a hold on 
paper. 

823
00:38:10,400 --> 00:38:13,600
It's undervalued. 
It should be trading at 150 $200

824
00:38:13,600 --> 00:38:16,800
a share right now. 
But if the fundamentals, if the 

825
00:38:16,800 --> 00:38:20,400
actual growth rate margins 
competition, continue to 

826
00:38:20,400 --> 00:38:23,000
actually deteriorate over time, 
I'm going to be moving out of 

827
00:38:23,008 --> 00:38:25,400
this company. 
Now after Ali Baba, we have 

828
00:38:25,400 --> 00:38:27,800
Salesforce. 
This company is enterprise 

829
00:38:27,800 --> 00:38:29,200
software. 
It's grown massively. 

830
00:38:29,400 --> 00:38:33,500
Over the past decade and I have 
currently 47 hundred dollars of 

831
00:38:33,500 --> 00:38:36,900
value in it. 
I'm down 21% and that's twelve 

832
00:38:36,900 --> 00:38:39,200
hundred dollars. 
So first of all, just take a 

833
00:38:39,207 --> 00:38:41,900
look at the graph here. 
Salesforce is very volatile, it 

834
00:38:41,900 --> 00:38:45,700
traded up like crazy and 2020. 
Then in November with the rest 

835
00:38:45,700 --> 00:38:48,400
of all the other Cloud companies
it traded on a lot. 

836
00:38:48,400 --> 00:38:51,500
It's down 48 percent from its 
recent all-time highs. 

837
00:38:51,800 --> 00:38:55,100
Now, out of all the companies 
that you voted on, as the most 

838
00:38:55,100 --> 00:38:58,900
overvalued, the majority of you 
picked Salesforce right here. 

839
00:38:59,400 --> 00:39:01,200
28. 
People said that this is the 

840
00:39:01,200 --> 00:39:04,600
most overvalued, so at one by an
overwhelming extent. 

841
00:39:05,000 --> 00:39:07,600
Now, funny enough. 
Most of you think that 

842
00:39:07,600 --> 00:39:10,800
Salesforce is overvalued, when 
we look at the analyst hair, 

843
00:39:10,900 --> 00:39:13,100
they disagree. 
They think that this company is 

844
00:39:13,100 --> 00:39:16,000
actually like a still right now.
It's a really strong by 

845
00:39:16,400 --> 00:39:19,700
Salesforce by morningstar's 
estimate is worth three hundred 

846
00:39:19,700 --> 00:39:22,000
and twenty dollars. 
That's their Fair Value Estimate

847
00:39:22,000 --> 00:39:23,600
Schwab doesn't like it quite as 
much. 

848
00:39:23,600 --> 00:39:26,400
They consider it a hold and the 
cfra analysts agree with 

849
00:39:26,400 --> 00:39:28,100
Morningstar. 
They consider this one a strong 

850
00:39:28,100 --> 00:39:29,900
by so we have the Audience. 
Here. 

851
00:39:29,900 --> 00:39:33,100
Most of you think that this 
company is overvalued and a lot 

852
00:39:33,100 --> 00:39:35,200
of analysts think that the 
company's undervalued. 

853
00:39:35,300 --> 00:39:38,000
So having said that, here's how 
I look at the valuation. 

854
00:39:38,400 --> 00:39:43,500
We have sales force at a 34 Ford
PE ratio, 34 Ford PE is 

855
00:39:43,500 --> 00:39:45,800
expensive. 
If you're just looking at that 

856
00:39:45,800 --> 00:39:49,100
in today's market, it probably 
looks over valued, even looking 

857
00:39:49,100 --> 00:39:52,200
at the Enterprise Value to 
ibadah that looks even worse. 

858
00:39:52,200 --> 00:39:54,800
It's out of 41. 
So both of those metrics don't 

859
00:39:54,800 --> 00:39:57,800
paint a good picture, you look 
at it on a price to sales 

860
00:39:57,800 --> 00:40:00,800
because it's a software company.
It has high gross margins. 

861
00:40:00,900 --> 00:40:03,400
That's at a six. 
So that's very reasonable. 

862
00:40:03,400 --> 00:40:06,200
I think that's actually kind of 
historically cheap for a company

863
00:40:06,200 --> 00:40:08,500
like Salesforce. 
So we have some different 

864
00:40:08,500 --> 00:40:11,700
metrics are on a price to 
earnings on an Enterprise Value 

865
00:40:11,700 --> 00:40:15,000
to ibadah Salesforce looks 
expensive on a price to sales. 

866
00:40:15,000 --> 00:40:18,100
It doesn't look that expensive. 
Now the big thing that I've been

867
00:40:18,100 --> 00:40:20,800
focusing on and I've been 
stressing over the past three or

868
00:40:20,800 --> 00:40:24,500
four months is the free cash 
flow of the company and this is 

869
00:40:24,500 --> 00:40:26,700
the big thing that Salesforce 
has going for it. 

870
00:40:26,700 --> 00:40:30,900
I think this is like Adobe and 
The investors are paying for 

871
00:40:30,900 --> 00:40:33,800
this rapid increase in the free 
cash flow per share. 

872
00:40:34,200 --> 00:40:36,900
We look at this company. 
Here's the free cash flow growth

873
00:40:36,900 --> 00:40:39,900
over the past while since 2004, 
right? 

874
00:40:39,900 --> 00:40:41,600
It had essentially, no free cash
flow. 

875
00:40:41,900 --> 00:40:46,400
Then you see since 2015, the 
rapid increase in free cash flow

876
00:40:46,400 --> 00:40:49,300
every single quarter and every 
single year if we flip this over

877
00:40:49,300 --> 00:40:51,300
to annually, this is what it 
looks like. 

878
00:40:51,600 --> 00:40:54,300
See these type of charts when 
you see a company that's able to

879
00:40:54,300 --> 00:40:57,700
leverage its scale and grow its 
free cash flow at these rates. 

880
00:40:58,000 --> 00:40:59,200
This is what investors are 
paying. 

881
00:40:59,400 --> 00:41:03,400
For now, the 2022 hair. 
This is based off of an estimate

882
00:41:03,400 --> 00:41:06,500
of the most recent quarter, plus
the past three quarters beyond 

883
00:41:06,500 --> 00:41:09,500
that. 
So this isn't exactly like 

884
00:41:09,500 --> 00:41:11,300
perfect. 
This is the trailing 12 months 

885
00:41:11,300 --> 00:41:13,100
of free cash flow. 
Either way. 

886
00:41:13,100 --> 00:41:16,600
You see the rapid increase in 
this is what you're paying for 

887
00:41:16,600 --> 00:41:18,800
with Salesforce. 
Remember, when you're buying a 

888
00:41:18,800 --> 00:41:21,300
company, you're not buying the 
future earnings, you're not 

889
00:41:21,300 --> 00:41:24,200
buying the future ibadah. 
You're buying the future, cash 

890
00:41:24,200 --> 00:41:27,400
flows of the company. 
A company is worth the present 

891
00:41:27,400 --> 00:41:29,200
value of all of its future cash 
flows. 

892
00:41:29,300 --> 00:41:31,100
Those. 
So this is really what you're 

893
00:41:31,100 --> 00:41:33,900
buying and this is really what 
they can return to investors. 

894
00:41:33,900 --> 00:41:35,800
Now, Salesforce is still in 
growth mode. 

895
00:41:35,800 --> 00:41:38,500
So, if we look at the shares 
outstanding, you can see this 

896
00:41:38,500 --> 00:41:40,600
trend of them, issuing more and 
more shares. 

897
00:41:40,900 --> 00:41:43,400
And this is something that I 
hate to see with any company 

898
00:41:43,400 --> 00:41:46,100
that I own in both of my 
portfolios, the passive income 

899
00:41:46,100 --> 00:41:47,100
account in the story. 
Fun. 

900
00:41:47,300 --> 00:41:50,200
I have exactly two companies 
that do dilution just to 

901
00:41:50,500 --> 00:41:52,800
Salesforce didn't Amazon. 
Those are the only two 

902
00:41:52,800 --> 00:41:56,500
exceptions I've made because I 
hate to see dilution Salesforce 

903
00:41:56,500 --> 00:41:58,600
did some dilution right here 
when they bought slack. 

904
00:41:58,600 --> 00:42:01,300
And then they To do it for 
stock-based compensation. 

905
00:42:01,600 --> 00:42:05,000
Now, the big takeaway here 
though, is that the free cash 

906
00:42:05,000 --> 00:42:08,300
flow growth is heavily 
outpacing, the share, dilution, 

907
00:42:08,500 --> 00:42:10,600
meaning, over the past couple of
years. 

908
00:42:10,700 --> 00:42:14,400
They've grown, their, their 
share count by about 40% and 

909
00:42:14,400 --> 00:42:17,000
they grown their free cash flow 
by a hundred and sixty percent. 

910
00:42:17,200 --> 00:42:19,900
So, as an investor, even though 
they're deluding me, they're 

911
00:42:19,900 --> 00:42:22,200
growing the free cash flow at a 
much quicker pace. 

912
00:42:22,500 --> 00:42:25,100
And I think that this company 
has huge Network effects. 

913
00:42:25,300 --> 00:42:27,600
I think that it has a huge lead 
in its industry. 

914
00:42:27,800 --> 00:42:29,100
I think it does have a wide 
amount. 

915
00:42:29,400 --> 00:42:32,100
And you can see this Illustrated
in the growth of the company. 

916
00:42:32,200 --> 00:42:34,700
You don't see many Revenue 
growth charts like this, with 

917
00:42:34,700 --> 00:42:37,800
this type of consistency. 
This type of speed with these 

918
00:42:37,800 --> 00:42:40,200
type of margins. 
So other companies like twilio 

919
00:42:40,200 --> 00:42:43,500
can grow their revenue at PACE 
but they don't have the margins 

920
00:42:43,500 --> 00:42:45,900
of Salesforce. 
They don't produce a consistent 

921
00:42:45,900 --> 00:42:48,400
growing free cash flow per share
like Salesforce. 

922
00:42:48,500 --> 00:42:51,700
So when I look at Salesforce on 
a price to free cash flow basis,

923
00:42:52,000 --> 00:42:55,900
it's trading at a 30 right now 
and that is only expensive if 

924
00:42:55,900 --> 00:42:58,500
you think that this free cash 
flow, growth is going to come to

925
00:42:58,500 --> 00:43:00,500
a complete stop. 
If you don't think it's going to

926
00:43:00,500 --> 00:43:03,800
grow its free cash flow, all any
more that 30 price to free cash,

927
00:43:03,800 --> 00:43:06,100
flow is kind of expensive but I 
don't think that's going to 

928
00:43:06,100 --> 00:43:07,100
happen. 
I think they're going to 

929
00:43:07,100 --> 00:43:10,400
continue to grow their free cash
flow 1020 percent per year. 

930
00:43:10,600 --> 00:43:13,000
So right now I do think that 
Salesforce is undervalued on a 

931
00:43:13,008 --> 00:43:16,000
price do free cash flow basis 
based on the assumptions I have 

932
00:43:16,000 --> 00:43:18,600
for this company because I 
consider to be a very wide mode 

933
00:43:18,800 --> 00:43:20,600
and I think it will have 
considerable growth in the 

934
00:43:20,600 --> 00:43:22,800
future. 
I think that the fair value is 

935
00:43:22,800 --> 00:43:26,300
around $200 right now, I'd be 
looking at selling this company,

936
00:43:26,500 --> 00:43:29,000
if it trades back up to 250 to 
270. 

937
00:43:29,300 --> 00:43:31,900
That's where I think it enters 
overvalued range and I think it 

938
00:43:31,900 --> 00:43:34,200
will eventually get there. 
We'll see how long it takes. 

939
00:43:34,300 --> 00:43:35,800
But that's what I'd be looking 
to sell now. 

940
00:43:35,800 --> 00:43:37,500
Next up. 
We have apple. 

941
00:43:37,500 --> 00:43:39,900
This is a company that I own in 
both portfolios. 

942
00:43:39,900 --> 00:43:42,700
I'm incredibly bullish on it, 
but it's a smaller holding in 

943
00:43:42,700 --> 00:43:45,400
this portfolio. 
So we have apple has a four 

944
00:43:45,400 --> 00:43:47,200
thousand dollar position right 
now. 

945
00:43:47,300 --> 00:43:49,400
And I'm in the green. 
This is one of the rare ones 

946
00:43:49,400 --> 00:43:50,600
are. 
I'm actually in the green with 

947
00:43:50,600 --> 00:43:54,200
my current Holdings. 
I mean, the green by 8.3%, $300.

948
00:43:54,200 --> 00:43:57,900
So this is actually one of the 
ones that many of you voted as 

949
00:43:58,100 --> 00:44:01,100
overvalued. 
It was Behind Adobe with 15 

950
00:44:01,100 --> 00:44:02,900
votes. 
A lot of people are convinced at

951
00:44:02,900 --> 00:44:05,700
Apple's. 
Overvalued you all disagree with

952
00:44:05,700 --> 00:44:07,400
the Warren Buffett. 
He's been recently buying this 

953
00:44:07,400 --> 00:44:09,400
company. 
Now, let's go ahead and take a 

954
00:44:09,400 --> 00:44:12,200
look at the analyst here. 
This is one where the analyst 

955
00:44:12,200 --> 00:44:15,500
actually kind of agree with you.
All they have apple as a 

956
00:44:15,500 --> 00:44:17,500
three-star, which is just kind 
of a hold. 

957
00:44:17,700 --> 00:44:19,900
They actually think that it's 
overvalued to some extent. 

958
00:44:19,900 --> 00:44:23,800
They think the fair value is 130
and it currently trades at 142. 

959
00:44:24,100 --> 00:44:26,600
We also have Schwab's saying the
opposite. 

960
00:44:26,600 --> 00:44:28,700
They say that this one is a 
strong buy-in. 

961
00:44:29,200 --> 00:44:32,500
We have cfra saying that this 
one is a buy with a four star 

962
00:44:32,500 --> 00:44:35,100
rating. 
So we have some disagreement 

963
00:44:35,100 --> 00:44:38,000
amongst the analyst, two of them
saying it's a by one of them 

964
00:44:38,000 --> 00:44:40,300
saying it's overvalued. 
So when I look at this company, 

965
00:44:40,300 --> 00:44:43,300
I look at the valuation of it 
and I try to buy it on a good 

966
00:44:43,300 --> 00:44:45,700
deal. 
But I consider Apple to have a 

967
00:44:45,700 --> 00:44:49,400
very high terminal value very 
unlikely to be disrupted and to 

968
00:44:49,400 --> 00:44:51,800
have an incredibly wide mode. 
And I think there's lots of 

969
00:44:51,800 --> 00:44:55,900
opportunities that are just long
shot beds like the augmented 

970
00:44:55,900 --> 00:44:57,700
reality or virtual reality 
headset. 

971
00:44:57,700 --> 00:45:00,500
So having said that That's the 
frame that I look at this 

972
00:45:00,500 --> 00:45:02,600
company from a qualitative 
standpoint. 

973
00:45:02,600 --> 00:45:04,400
Then I look at the PE ratio of 
it. 

974
00:45:04,700 --> 00:45:09,200
It trades at a 22 forward P/E. 
So it's slightly more expensive 

975
00:45:09,200 --> 00:45:11,600
than the S&P 500. 
So what I'm looking at from my 

976
00:45:11,600 --> 00:45:14,400
perspective is a company that's 
substantially better than the 

977
00:45:14,400 --> 00:45:17,900
average company in the S&P 500. 
But it trades at a slight 

978
00:45:17,900 --> 00:45:21,900
premium, a 22 compared to an 18.
So you're paying a little bit 

979
00:45:21,900 --> 00:45:25,700
more to have apple over the 
other companies in the S&P 500, 

980
00:45:25,900 --> 00:45:28,300
the Enterprise Value to ibadah 
is a 17. 

981
00:45:28,300 --> 00:45:30,700
So we look at just the The basic
valuation metrics. 

982
00:45:30,700 --> 00:45:33,900
I think that Apple's pretty 
cheap, just by its PE ratio, and

983
00:45:33,900 --> 00:45:37,100
it's Enterprise Value to ibadah.
And I see no reason that Apple 

984
00:45:37,100 --> 00:45:40,000
should trade down back to the 14
or 15 forward. 

985
00:45:40,000 --> 00:45:43,400
P/E ratio that it was creating 
it when it didn't have nearly 

986
00:45:43,400 --> 00:45:46,700
the moat that it now has, Apple 
has changed over the past five 

987
00:45:46,700 --> 00:45:48,300
years. 
They have Apple TV. 

988
00:45:48,300 --> 00:45:52,300
Plus they have apple music. 
They have way more devices that 

989
00:45:52,300 --> 00:45:56,600
entangle you in their ecosystem.
Like the watch, like the are 

990
00:45:56,600 --> 00:45:58,200
pods, right? 
All these different devices 

991
00:45:58,200 --> 00:46:01,100
people use I think the company 
has a bigger moat. 

992
00:46:01,200 --> 00:46:04,200
It has more Network effect. 
It has higher switching costs 

993
00:46:04,500 --> 00:46:06,400
and I think it should trade at a
bigger premium. 

994
00:46:06,700 --> 00:46:08,500
When I look at the Enterprise 
Value to ibadah. 

995
00:46:08,800 --> 00:46:11,100
I see that the Ebola is growing 
steadily over time. 

996
00:46:11,400 --> 00:46:14,700
I see that the free cash flow is
absolutely incredible growing 

997
00:46:14,700 --> 00:46:16,600
steadily over time. 
Look at this over the past 

998
00:46:16,600 --> 00:46:18,300
couple of years. 
We don't see any other company 

999
00:46:18,300 --> 00:46:20,500
in the world. 
Posting, these type of free cash

1000
00:46:20,500 --> 00:46:23,700
flow numbers in 1/4. 
Forty four point, six billion 

1001
00:46:23,700 --> 00:46:26,200
dollars of free cash flow in a 
single quarter. 

1002
00:46:26,400 --> 00:46:28,800
Now after looking at the free 
cash flow, I think another 

1003
00:46:28,800 --> 00:46:31,100
thing. 
Attention should be drawn to is 

1004
00:46:31,100 --> 00:46:34,300
the shares outstanding because 
you want to adjust the free cash

1005
00:46:34,300 --> 00:46:37,300
flow growth of the company on a 
per share basis. 

1006
00:46:37,300 --> 00:46:40,700
And I'm going to be adding that 
specific graph into qualtrics in

1007
00:46:40,700 --> 00:46:43,100
the next week. 
So we'll have a free cash flow 

1008
00:46:43,100 --> 00:46:46,100
per share graph here. 
But right now, the best we can 

1009
00:46:46,100 --> 00:46:49,500
do is compare the free cash flow
against the shares outstanding. 

1010
00:46:49,900 --> 00:46:52,300
This is what the shares 
outstanding of apple look. 

1011
00:46:52,300 --> 00:46:55,300
Since the beginning of the 
company, isn't this incredible? 

1012
00:46:55,500 --> 00:46:57,100
There's not many companies like 
this. 

1013
00:46:57,300 --> 00:47:01,800
That have devoured this much. 
Shares outstanding since 2013, 

1014
00:47:01,800 --> 00:47:04,700
they've just continue to do 
share BuyBacks with their 

1015
00:47:04,700 --> 00:47:08,400
massive growing pile of cash, 
every single quarter, and they 

1016
00:47:08,400 --> 00:47:12,000
buy back more and more of the 
stock as an equity owner and 

1017
00:47:12,000 --> 00:47:15,000
apple, you own a greater and 
greater portion of this company,

1018
00:47:15,100 --> 00:47:17,700
every single quarter. 
And with the stock price falling

1019
00:47:17,700 --> 00:47:20,600
right now into the 140s. 
You better believe that Apple's 

1020
00:47:20,600 --> 00:47:23,900
doing share BuyBacks the 
allocated ninety billion dollars

1021
00:47:23,900 --> 00:47:26,300
for share BuyBacks. 
So, you know, that this company 

1022
00:47:26,300 --> 00:47:29,900
is going to manufacture their 
earnings by Buying back their 

1023
00:47:29,900 --> 00:47:32,400
shares making that PE ratio go 
down. 

1024
00:47:32,400 --> 00:47:35,600
So on a price to free cash flow 
basis, you're paying around a 34

1025
00:47:36,000 --> 00:47:38,200
Apple based off their 20 21 
years. 

1026
00:47:38,200 --> 00:47:40,300
So in the future, it's probably 
a bit cheaper. 

1027
00:47:40,300 --> 00:47:42,700
But as of last year, you're 
paying a 30 multiple on that 

1028
00:47:43,000 --> 00:47:44,700
overall. 
I look at the metrics of Apple, 

1029
00:47:45,000 --> 00:47:47,900
the 22 for PE ratio. 
I think is undervalued. 

1030
00:47:47,900 --> 00:47:50,600
I think this company should be 
trading at a 26 plus. 

1031
00:47:50,600 --> 00:47:53,100
So right now I do think the 
Apple slightly undervalued. 

1032
00:47:53,100 --> 00:47:56,100
I think that fair value is 
around 150 for it at 120. 

1033
00:47:56,100 --> 00:47:58,100
I think the company's 
undervalued all be, buying more 

1034
00:47:58,100 --> 00:48:00,800
of it at that point. 
As I don't think, I really don't

1035
00:48:00,800 --> 00:48:03,200
think the Apple should be 
trading in line with the rest of

1036
00:48:03,200 --> 00:48:04,900
the market. 
Just doesn't make sense. 

1037
00:48:04,900 --> 00:48:07,300
This is a dramatically better 
company bigger. 

1038
00:48:07,300 --> 00:48:10,600
Moat generates more free cash, 
flow can engineer its earnings. 

1039
00:48:10,800 --> 00:48:14,500
It has I think the least at 
least low risk of Regulation 

1040
00:48:14,500 --> 00:48:16,700
compared to other big tech 
companies because they're so 

1041
00:48:16,700 --> 00:48:19,300
privacy focused. 
And I don't think it has as much

1042
00:48:19,300 --> 00:48:22,100
terminal value risk to its 
long-term story than other 

1043
00:48:22,100 --> 00:48:24,300
companies. 
So right now, I do think the 

1044
00:48:24,300 --> 00:48:28,500
apples undervalued, but not to a
huge extent, if it gets to 120. 

1045
00:48:28,600 --> 00:48:30,300
I'll be looking. 
At scooping up more shares. 

1046
00:48:30,300 --> 00:48:32,200
Now. 
The last holding in my portfolio

1047
00:48:32,200 --> 00:48:34,700
is Facebook. 
This is one that I bought back 

1048
00:48:34,700 --> 00:48:38,000
into, I used to hold it and I 
sold it at 350 per share. 

1049
00:48:38,000 --> 00:48:39,500
So that was very fortunate 
timing. 

1050
00:48:39,800 --> 00:48:43,200
Then it fell like 40 to 50 
percent and it got to a 

1051
00:48:43,200 --> 00:48:45,800
valuation. 
I just thought was to oversold. 

1052
00:48:45,800 --> 00:48:47,700
So I bought back into the 
company. 

1053
00:48:48,000 --> 00:48:52,800
I currently have 2400 dollars 
into it and I'm down 10.6% now, 

1054
00:48:53,100 --> 00:48:56,900
out of the companies that we 
voted on as the most overvalued 

1055
00:48:57,200 --> 00:49:00,200
Google and Facebook were the 
only two that Nobody voted for 

1056
00:49:00,300 --> 00:49:02,000
so. 
None of you think that this is 

1057
00:49:02,000 --> 00:49:05,800
the most overvalued company in 
my portfolio and the analysts 

1058
00:49:05,800 --> 00:49:08,300
here. 
Mostly agree with you meta has a

1059
00:49:08,300 --> 00:49:10,700
five star rating by Morningstar 
analysis. 

1060
00:49:10,900 --> 00:49:14,300
They think the fair value is 384
and it trades at 193. 

1061
00:49:14,700 --> 00:49:17,200
I think that it has a wide moat 
that looks good. 

1062
00:49:17,200 --> 00:49:20,800
We have Facebook from Schwab and
they give a by reading so that's

1063
00:49:20,800 --> 00:49:23,200
good news from that. 
And then we have the cfra here, 

1064
00:49:23,500 --> 00:49:25,500
giving it a hold writing. 
So they're a little bit more 

1065
00:49:25,500 --> 00:49:28,000
cautious with Facebook. 
Now, in terms of my thoughts in 

1066
00:49:28,000 --> 00:49:30,500
the valuation. 
I I really didn't think too hard

1067
00:49:30,500 --> 00:49:32,500
about Facebook. 
This was a pretty simple 

1068
00:49:32,500 --> 00:49:34,500
decision. 
The company sold down to the 

1069
00:49:34,500 --> 00:49:37,500
point where it was a 17 PE ratio
right now. 

1070
00:49:37,500 --> 00:49:40,200
It trades at a 16. 
So it's treating their right at 

1071
00:49:40,200 --> 00:49:43,600
a 16 forward, P/E ratio, which 
is heavily discounted that's 

1072
00:49:43,600 --> 00:49:45,100
cheaper than the rest of the 
market. 

1073
00:49:45,200 --> 00:49:48,600
So investors are discounting 
Facebook more than the average 

1074
00:49:48,600 --> 00:49:51,800
of the S&P 500. 
The price to sales is 4.4. 

1075
00:49:51,800 --> 00:49:54,300
The Enterprise Value to ibadah 
is below 10. 

1076
00:49:54,700 --> 00:49:58,200
Those all look really cheap. 
The free cash flow looks 

1077
00:49:58,200 --> 00:50:00,100
incredible. 
Growing free cash flow like 

1078
00:50:00,100 --> 00:50:02,300
crazy. 
It has 40 billion dollars of 

1079
00:50:02,300 --> 00:50:05,600
free cash flow in 2021 and that 
makes the free cash flow 

1080
00:50:05,600 --> 00:50:09,000
multiple of 13. 
So this company is creating at a

1081
00:50:09,000 --> 00:50:12,900
very low multiple in every way 
that you slice and dice it a low

1082
00:50:12,900 --> 00:50:16,600
price to sales, a low P/E ratio,
a low price to free cash flow, a

1083
00:50:16,607 --> 00:50:17,800
low ev2. 
Ibadah. 

1084
00:50:18,000 --> 00:50:21,100
Everything looks cheap just all 
around the board, Facebook looks

1085
00:50:21,100 --> 00:50:24,400
cheap. 
So the only bearish take that 

1086
00:50:24,400 --> 00:50:27,400
you could have on Facebook is if
you think the company is just 

1087
00:50:27,400 --> 00:50:30,400
going to have fundamental. 
Duration, like the fundamentals 

1088
00:50:30,400 --> 00:50:31,500
are going to fall out 
underneath. 

1089
00:50:31,500 --> 00:50:33,400
It Tik. 
Toks going to run away with 

1090
00:50:33,400 --> 00:50:36,000
everything, right? 
Everything will go wrong for the

1091
00:50:36,000 --> 00:50:37,900
company. 
If you don't have that type of 

1092
00:50:37,900 --> 00:50:40,400
thesis on paper. 
And every way that you look at 

1093
00:50:40,400 --> 00:50:42,500
this company, my opinion, it 
looks cheap. 

1094
00:50:42,500 --> 00:50:44,400
So I bought back into the 
company. 

1095
00:50:44,400 --> 00:50:46,600
I think it's well, below its 
fair value and my opinion, it 

1096
00:50:46,600 --> 00:50:48,900
should be trading at a low 20s 
multiple. 

1097
00:50:49,200 --> 00:50:52,200
So, Facebook gets up to a 22-4 
PE ratio. 

1098
00:50:52,400 --> 00:50:55,500
I'll look at taking gains. 
But as of right now, anytime 

1099
00:50:55,500 --> 00:50:57,200
below that, I'm going to 
continue to hold it. 

1100
00:50:57,200 --> 00:50:59,000
So there you have it. 
There's a look at every holding.

1101
00:50:59,200 --> 00:51:01,100
A portfolio, the valuation of 
it. 

1102
00:51:01,100 --> 00:51:03,100
How I view the valuation. 
Right now. 

1103
00:51:03,100 --> 00:51:05,100
I think every company in my 
portfolio. 

1104
00:51:05,100 --> 00:51:06,500
And this is the reason that I 
hold them. 

1105
00:51:06,700 --> 00:51:08,800
If I thought that they were 
overvalued, I would no longer 

1106
00:51:08,800 --> 00:51:11,100
hold the companies, and I've 
sold out of ones that I think 

1107
00:51:11,100 --> 00:51:13,800
are overvalued. 
So, the more speculative ones 

1108
00:51:13,800 --> 00:51:17,100
ones that I think traded up to 
Big multiples, like, atlassian 

1109
00:51:17,100 --> 00:51:19,400
or crowdstrike. 
I sold out of those companies. 

1110
00:51:19,400 --> 00:51:22,000
I think that they were probably 
in the overvalued range, the 

1111
00:51:22,000 --> 00:51:25,600
ones that I currently hold. 
I think, are at a minimum close 

1112
00:51:25,600 --> 00:51:28,600
to fair value or undervalued. 
And in most cases, I think that 

1113
00:51:28,600 --> 00:51:31,900
many of Mr. Heavily undervalued,
they start trading up into that 

1114
00:51:31,900 --> 00:51:34,000
overvalue territory that I 
outlined. 

1115
00:51:34,400 --> 00:51:37,000
I'll be looking at taking gains 
more aggressively. 

1116
00:51:37,100 --> 00:51:39,600
So if Apple goes up to 200 
dollars a share I'll be looking 

1117
00:51:39,600 --> 00:51:42,400
at taking gains. 
If Microsoft goes up to 350. 

1118
00:51:42,400 --> 00:51:45,100
I'll be looking at taking gains 
and so on and so forth. 

1119
00:51:45,200 --> 00:51:47,800
I don't predict. 
I don't expect that in this 

1120
00:51:47,800 --> 00:51:50,800
market, that wants nothing to do
with these companies that 

1121
00:51:50,800 --> 00:51:52,600
they're going to race up the 
high valuations. 

1122
00:51:52,800 --> 00:51:55,200
And in the meantime, I just have
to be patient. 

1123
00:51:55,200 --> 00:51:57,800
I realized this could take a 
very long time, until these 

1124
00:51:57,800 --> 00:52:00,500
companies move back. 
In the favor by investors. 

1125
00:52:00,500 --> 00:52:03,700
Because right now, everybody 
wants to Consumer Staples. 

1126
00:52:03,900 --> 00:52:05,300
They want nothing to do with 
Cloud. 

1127
00:52:05,400 --> 00:52:06,900
Nothing to do with online 
retail. 

1128
00:52:07,100 --> 00:52:08,500
Nothing to do with tech in 
general. 

1129
00:52:08,500 --> 00:52:12,000
So I'm going to be patient, keep
dollar cost averaging in look at

1130
00:52:12,008 --> 00:52:14,400
the valuations of all these 
companies, but overall. 

1131
00:52:14,400 --> 00:52:16,600
I hope this gave a little bit 
more insight into how I look at 

1132
00:52:16,607 --> 00:52:19,000
these companies. 
So that's all for this episode. 

1133
00:52:19,000 --> 00:52:21,400
I hope you enjoyed. 
If you want to have more content

1134
00:52:21,400 --> 00:52:24,400
and exclusive content. 
I have amas and lots of 

1135
00:52:24,408 --> 00:52:27,500
different videos on the patreon.
So if you join that, you get 

1136
00:52:27,500 --> 00:52:30,300
access to a Discord community 
You get access to the qual, trim

1137
00:52:30,300 --> 00:52:33,100
Insight software suite, and a 
bunch of other fun stuff. 

1138
00:52:33,100 --> 00:52:34,800
So, other than that, I'll see 
you in the next one.