1 00:00:00,200 --> 00:00:02,560 Welcome back, everyone. I know you think you got through 2 00:00:02,560 --> 00:00:05,520 it that you can pat yourself on the back because you got through 3 00:00:05,520 --> 00:00:07,840 earnings season, but not quite yet. 4 00:00:07,880 --> 00:00:10,600 It's not over yet. It is true that we got through 5 00:00:10,600 --> 00:00:13,800 most of the big companies. So the really big ones, the 6 00:00:13,800 --> 00:00:17,600 Apples and Amazons and Googles and Metas, we got through those 7 00:00:17,600 --> 00:00:21,480 and overall they did great. All of them really did great. 8 00:00:21,480 --> 00:00:23,480 Meta, I think, struggled a little bit. 9 00:00:24,280 --> 00:00:27,280 Netflix got knocked down because of a reporting, you know, a 10 00:00:27,280 --> 00:00:30,240 reporting disclosure change. So there is some, a couple of 11 00:00:30,240 --> 00:00:31,480 them that struggled a little bit. 12 00:00:31,800 --> 00:00:34,200 But overall, the majority of big tech companies did great. 13 00:00:34,480 --> 00:00:36,880 Apple did better than investors expected. 14 00:00:37,080 --> 00:00:40,440 Microsoft, the poster child of perfect fundamentals, did 15 00:00:40,440 --> 00:00:42,840 incredibly well. Amazon knocked it out of the 16 00:00:42,840 --> 00:00:45,200 park. Google as well, did incredibly 17 00:00:45,200 --> 00:00:46,960 well. All of these companies are doing 18 00:00:46,960 --> 00:00:50,720 great, but it's not over yet. I'm sorry to tell you, but 19 00:00:50,760 --> 00:00:53,960 earnings season isn't over yet and we still have a huge list of 20 00:00:53,960 --> 00:00:56,920 companies reporting this week. Although they're not the biggest 21 00:00:56,920 --> 00:01:00,440 companies in the market, these are important companies and many 22 00:01:00,440 --> 00:01:02,920 investors hold many of these individual stocks. 23 00:01:03,360 --> 00:01:06,440 Now I highlighted the list like I usually do of the ones that 24 00:01:06,440 --> 00:01:10,080 I'll be covering in this episode and I may have bit off more than 25 00:01:10,080 --> 00:01:12,360 I can chew. If we look at the list here, 26 00:01:12,360 --> 00:01:16,920 there are I believe 13 that I circled. 13 is the most I've 27 00:01:16,920 --> 00:01:19,520 ever selected. If we go from left to right here 28 00:01:19,520 --> 00:01:23,360 Monday to Friday, we of course have Palantir, highly 29 00:01:23,360 --> 00:01:25,760 anticipated Palantir reporting earnings. 30 00:01:25,760 --> 00:01:28,840 Today I'll share some thoughts on Palantir then. 31 00:01:28,840 --> 00:01:33,360 We also have Realty Income. Now Realty Income Corp is very 32 00:01:33,360 --> 00:01:36,960 similar to Vici. I own Vici, I do not own Realty 33 00:01:36,960 --> 00:01:39,520 income, but I'll be sharing thoughts on both of them. 34 00:01:40,000 --> 00:01:43,880 And then moving on to tomorrow, Tuesday, we have Walt Disney, 35 00:01:43,880 --> 00:01:47,640 Celsius, the drink company. We have Crocs, the shoes 36 00:01:47,640 --> 00:01:50,040 company. We have Nicola, the fraud 37 00:01:50,040 --> 00:01:52,440 company. And we have Ferrari, the high 38 00:01:52,480 --> 00:01:56,200 end luxury car company all reporting earnings. 39 00:01:56,560 --> 00:02:02,160 Then on Wednesday we have Uber, Shopify, Robin Hood, Airbnb and 40 00:02:02,440 --> 00:02:05,240 the meme stock AMC reporting earnings. 41 00:02:05,520 --> 00:02:07,760 That's going to be a huge day come Wednesday. 42 00:02:07,760 --> 00:02:11,440 And then finally on Thursday and Friday, I only highlighted one 43 00:02:11,440 --> 00:02:13,840 company that I thought was interesting enough to go over, 44 00:02:14,160 --> 00:02:15,920 which is Warner Brothers Discovery. 45 00:02:16,040 --> 00:02:18,320 We'll be taking a look at Warner Brothers Discovery in the 46 00:02:18,320 --> 00:02:20,520 streaming wars. So like I said, we have a full 47 00:02:20,520 --> 00:02:22,600 list of companies to go over. It's going to be a very busy 48 00:02:22,600 --> 00:02:24,040 week. Let's go ahead and jump in. 49 00:02:24,040 --> 00:02:27,320 And we'll start off with Palantir reporting earnings 50 00:02:27,320 --> 00:02:31,760 after market closed today. Palantir is at almost $25 per 51 00:02:31,760 --> 00:02:36,280 share. It's up 6.7% today after we have 52 00:02:36,280 --> 00:02:39,760 news that Dan I've from Wedbush has reiterated his 53 00:02:39,760 --> 00:02:42,640 outperformance on the stock. So he's pounding the table on 54 00:02:42,640 --> 00:02:45,200 this one saying it's a great buy, saying it's going to 55 00:02:45,200 --> 00:02:47,400 outperform. And I've listened to Dan Ives 56 00:02:47,400 --> 00:02:50,840 talk about Palantir. His big thing, his focus on it 57 00:02:50,840 --> 00:02:54,800 is that it's an AI stock and it's not just an AI stock. 58 00:02:54,800 --> 00:02:59,480 It's like the best AI stock. It is the Tom Brady of AI 59 00:02:59,480 --> 00:03:02,440 stocks, right? So Palantir is like the number 60 00:03:02,440 --> 00:03:06,000 one AI stock according to Wedbush and Dan Ives. 61 00:03:06,080 --> 00:03:09,080 So a lot of people are investing in Palantir as one of their AI 62 00:03:09,080 --> 00:03:10,720 place, which I think is reasonable. 63 00:03:11,080 --> 00:03:15,440 I agree that I view Palantir is a very strong AI company that 64 00:03:15,440 --> 00:03:18,120 makes real money from artificial intelligence. 65 00:03:18,440 --> 00:03:20,760 I also think there's going to be many companies that benefit from 66 00:03:20,960 --> 00:03:23,080 AI, but Palantir is certainly one of them. 67 00:03:23,480 --> 00:03:26,320 But I think overall, the reason that investors are so bullish on 68 00:03:26,320 --> 00:03:29,680 this earnings report is because Palantir has been seeing 69 00:03:29,920 --> 00:03:32,960 fundamental momentum. The fundamentals have been 70 00:03:32,960 --> 00:03:35,200 moving in the right direction across the board. 71 00:03:35,680 --> 00:03:40,760 We have revenue growth, it's around 16%, so not the fastest, 72 00:03:40,760 --> 00:03:45,760 but it's also not very slow. But overall this is organic 73 00:03:45,760 --> 00:03:47,800 revenue growth. They are growing their revenue 74 00:03:47,800 --> 00:03:49,480 without doing major acquisitions. 75 00:03:49,960 --> 00:03:51,560 We have free cash flow generation. 76 00:03:51,560 --> 00:03:54,520 Last quarter it wasn't the most they've ever generated. 77 00:03:54,840 --> 00:03:57,280 It was above the amount of stock based compensation. 78 00:03:57,280 --> 00:04:00,880 So this is actual real true free cash flow they're generating, 79 00:04:01,040 --> 00:04:03,400 which again is another thing in the right direction. 80 00:04:03,640 --> 00:04:05,760 We have net income moving to the positive. 81 00:04:06,000 --> 00:04:08,320 We have earnings per share moving to the positive. 82 00:04:08,640 --> 00:04:10,920 So we have all the fundamentals moving in the right direction. 83 00:04:11,160 --> 00:04:15,440 If I had one criticism for Palantir, it's that they aren't 84 00:04:15,440 --> 00:04:18,040 in a position to do a lot of buybacks right now. 85 00:04:18,399 --> 00:04:20,720 But like I've highlighted before, specifically with 86 00:04:20,720 --> 00:04:24,960 Palantir, the stock price is at such a high, the company's 87 00:04:25,040 --> 00:04:28,200 richly valued right now. So I don't view the dilution as 88 00:04:28,200 --> 00:04:32,520 much of a problem when companies dilute at very high valuations. 89 00:04:32,840 --> 00:04:35,160 I don't necessarily view that as a negative thing. 90 00:04:35,160 --> 00:04:37,120 I think they're actually creating value when they do 91 00:04:37,120 --> 00:04:39,360 that. I'd like them to do buybacks. 92 00:04:39,400 --> 00:04:42,680 If the stock sells off dramatically, that's a great 93 00:04:42,680 --> 00:04:45,960 time to do buybacks. But either way, the primary 94 00:04:45,960 --> 00:04:48,560 thing that I think investors are looking at is they're looking at 95 00:04:48,560 --> 00:04:52,080 a secular AI play, which Palantir represents and a 96 00:04:52,080 --> 00:04:54,960 company that's moving into the more mature, the more 97 00:04:55,000 --> 00:04:58,400 financially mature situation of all the fundamentals moving in 98 00:04:58,400 --> 00:05:00,760 the right direction. Now if we look at this quarter 99 00:05:00,760 --> 00:05:03,560 specifically, Wall Street is expecting the company to report 100 00:05:03,560 --> 00:05:07,840 its commercial segment revenue of 292 million, which would be 101 00:05:07,840 --> 00:05:12,040 up 24%. So Wall Street's expecting 24% 102 00:05:12,400 --> 00:05:15,160 commercial revenue growth. That's an important segment. 103 00:05:15,160 --> 00:05:17,000 In fact, that's the fastest growing segment. 104 00:05:17,440 --> 00:05:19,960 And then the government segment's going to be growing at 105 00:05:19,960 --> 00:05:22,920 least 11%. So if Palantir can hit these 106 00:05:22,920 --> 00:05:27,320 numbers, they can grow commercial 24% and they can grow 107 00:05:27,560 --> 00:05:30,880 government above 11%. They're golden. 108 00:05:30,960 --> 00:05:33,760 The company's going to do really well, I think, especially if 109 00:05:33,760 --> 00:05:35,280 they can grow the commercial faster. 110 00:05:35,280 --> 00:05:37,240 I think that's what most investors are paying attention 111 00:05:37,240 --> 00:05:40,560 to at this point. The government growth is great, 112 00:05:40,680 --> 00:05:43,440 but investors really want to see this commercial growth growing. 113 00:05:43,600 --> 00:05:46,680 Now the stock is going to produce an adjusted free cash 114 00:05:46,680 --> 00:05:49,200 flow of around $1 billion this year. 115 00:05:49,400 --> 00:05:53,720 That is, the analyst estimates if Palantir produces $1 billion 116 00:05:53,720 --> 00:05:57,280 of free cash flow this year and the company's at a $51 billion 117 00:05:57,280 --> 00:06:00,440 market cap currently, which means the stock today is trading 118 00:06:00,440 --> 00:06:04,720 around 51 times this year's free cash flow, which of course is 119 00:06:04,720 --> 00:06:07,160 expensive. But keep in mind you have to 120 00:06:07,160 --> 00:06:10,120 factor in growth. If the company is able to grow 121 00:06:10,280 --> 00:06:13,520 the free cash flow from 1 billion to 5 billion in just a 122 00:06:13,520 --> 00:06:16,880 short amount of time, then this doesn't look quite as expensive. 123 00:06:17,160 --> 00:06:20,760 So a lot of this comes down to how quickly Palantir can grow, 124 00:06:21,040 --> 00:06:24,600 how quickly it can exercise its operating leverage and increase 125 00:06:24,600 --> 00:06:27,320 its margins. Now overall, I don't see any 126 00:06:27,320 --> 00:06:29,600 evidence of why Palantir should miss earnings. 127 00:06:29,840 --> 00:06:32,360 I see nothing concerning about the commercial revenue or the 128 00:06:32,360 --> 00:06:34,960 government revenue and I think they offer a product that a lot 129 00:06:34,960 --> 00:06:37,080 of companies right now are wanting. 130 00:06:37,320 --> 00:06:40,080 So I would be surprised if Palantir misses earnings now. 131 00:06:40,080 --> 00:06:42,640 Next up, we also have the dividend growth company, Realty 132 00:06:42,640 --> 00:06:44,840 Income Corp reporting earnings. Today. 133 00:06:45,560 --> 00:06:48,400 I don't own Realty Income Corp, but I own a very similar company 134 00:06:48,400 --> 00:06:51,160 called Vici. They're both basically the same. 135 00:06:51,440 --> 00:06:54,440 They take investors capital and then they use that to invest in 136 00:06:54,440 --> 00:06:57,480 real estate and then they, they make money off the real estate 137 00:06:57,480 --> 00:07:00,760 through the rent obligations and they pay that back in the form 138 00:07:00,760 --> 00:07:02,720 of dividends. So both of these companies 139 00:07:02,720 --> 00:07:05,840 function virtually the same except they have different 140 00:07:05,840 --> 00:07:08,000 strategies and what type of properties they buy. 141 00:07:08,360 --> 00:07:12,240 Realty Income Corp owns a lot of like Home Depots and Walmarts 142 00:07:12,240 --> 00:07:15,000 and Walgreens, those type of locations. 143 00:07:15,360 --> 00:07:18,800 And Vici owns basically the entire Vegas Strip. 144 00:07:18,920 --> 00:07:21,880 They own MGM real estate, they own Caesars, they own the 145 00:07:21,880 --> 00:07:24,520 Venetian, they own all of that type of real estate. 146 00:07:24,760 --> 00:07:26,880 So these companies have different strategies and what 147 00:07:26,880 --> 00:07:30,320 their focus is, but they're becoming more similar over time 148 00:07:30,640 --> 00:07:33,640 and both of them are doing poorly over the past year. 149 00:07:33,840 --> 00:07:37,320 If we look at Vici, Vici has done poorly over the past year. 150 00:07:37,320 --> 00:07:40,000 It's down 12%. It's my worst performing holding 151 00:07:40,000 --> 00:07:42,680 in My Portfolio this year, down 12%. 152 00:07:43,120 --> 00:07:45,480 So this one has been a big drag on my performance. 153 00:07:45,800 --> 00:07:49,040 We look at Realty Income Corp again, I don't own this one, but 154 00:07:49,040 --> 00:07:51,440 we can look at the performance very similar. 155 00:07:51,600 --> 00:07:54,560 It's down 12% over the past year, just like Vici. 156 00:07:54,840 --> 00:07:57,640 So both of these companies are struggling and it's for 157 00:07:57,640 --> 00:08:01,360 something that they can't fix. Both of these companies cannot 158 00:08:01,360 --> 00:08:03,480 fix the issue that's causing their stock to go down. 159 00:08:03,960 --> 00:08:06,560 Their stocks are going down because interest rates are 160 00:08:06,560 --> 00:08:08,560 staying higher for longer than expected. 161 00:08:09,000 --> 00:08:12,600 The way these companies earn money is by taking investors 162 00:08:12,600 --> 00:08:15,400 capital at a certain cost of capital. 163 00:08:15,600 --> 00:08:19,360 So they might get money at like 5%, right, and then they 164 00:08:19,360 --> 00:08:22,800 reinvest it and get a 7% return using leverage. 165 00:08:22,800 --> 00:08:26,240 That 2% in between can equate to a lot of money. 166 00:08:26,560 --> 00:08:29,200 That's the way they operate. It's somewhat similar to a bank, 167 00:08:29,400 --> 00:08:31,680 but it's through the mechanism of real estate. 168 00:08:32,120 --> 00:08:34,960 Now when the cost of capital goes up, when interest rates go 169 00:08:34,960 --> 00:08:39,960 up to 5% and it cost them 8% to get money, they have to reinvest 170 00:08:39,960 --> 00:08:43,919 it and get a 10% return to make that make sense and that's a lot 171 00:08:43,919 --> 00:08:46,400 more difficult to do. So the biggest thing that's 172 00:08:46,400 --> 00:08:50,520 changed for these companies is the cost of capital. 173 00:08:50,760 --> 00:08:53,840 That is the biggest differentiator between this year 174 00:08:54,040 --> 00:08:57,880 and years prior. Vici and Realty Income Corp are 175 00:08:57,880 --> 00:09:00,760 having to deal with the reality that the cost of capital is now 176 00:09:00,760 --> 00:09:04,160 higher and it doesn't seem like it's coming down anytime soon, 177 00:09:04,480 --> 00:09:07,560 at least Jerome Powell saying that it may stay higher for 178 00:09:07,560 --> 00:09:10,880 longer and a lot of people think that it may stay higher forever. 179 00:09:11,200 --> 00:09:14,920 The interest rates may just remain at 5% and ultimately we 180 00:09:14,920 --> 00:09:17,520 don't know because we can't predict interest rates. 181 00:09:17,880 --> 00:09:20,240 So that puts these companies in a very difficult position. 182 00:09:20,520 --> 00:09:23,440 They now are dealing with higher interest rates, renewing their 183 00:09:23,440 --> 00:09:26,200 debts more expensive and with the cost of capital, their 184 00:09:26,200 --> 00:09:28,600 future expected returns are more difficult. 185 00:09:28,960 --> 00:09:32,160 So even though Vici's selling off, that's the reason I'm not 186 00:09:32,160 --> 00:09:35,240 buying it more right now. I don't like the fact that the 187 00:09:35,240 --> 00:09:37,040 business is now in a tougher spot. 188 00:09:37,560 --> 00:09:38,880 They're doing everything correctly. 189 00:09:38,880 --> 00:09:42,720 They're they're collecting 100% of rents just like I think 190 00:09:42,720 --> 00:09:45,240 Realty Income Corp will do. I think the company's going to 191 00:09:45,240 --> 00:09:47,840 do fantastic this quarter. But I still think they're 192 00:09:47,840 --> 00:09:50,160 dealing with that big macro concern. 193 00:09:50,600 --> 00:09:54,040 For me personally, even though these are great companies, even 194 00:09:54,040 --> 00:09:57,320 though they're executing well, I can't put more and more money 195 00:09:57,320 --> 00:10:00,320 into a company where the macro environments making it more and 196 00:10:00,320 --> 00:10:01,880 more difficult for them to operate. 197 00:10:02,320 --> 00:10:05,200 So even though I'm bullish on this quarter and I think Realty 198 00:10:05,200 --> 00:10:08,400 Income Corp is great, I'm not going to be buying the dip this 199 00:10:08,400 --> 00:10:10,720 year. Now after Realty Income Corp, we 200 00:10:10,720 --> 00:10:13,520 move into Tuesday, which we have a very full list of companies 201 00:10:13,800 --> 00:10:16,080 and the very top one is Walt Disney. 202 00:10:16,440 --> 00:10:19,280 Now I'm going to go ahead and group together two companies 203 00:10:19,280 --> 00:10:20,760 that are reporting on different days. 204 00:10:21,000 --> 00:10:24,680 We have Disney here and we also have on Thursday Warner Brothers 205 00:10:24,680 --> 00:10:27,320 Discovery. Since they're so similar, since 206 00:10:27,320 --> 00:10:30,120 I'm going to be having very similar thoughts on them, I'll 207 00:10:30,120 --> 00:10:32,560 be grouping these two together. Let's go ahead and just talk 208 00:10:32,560 --> 00:10:36,800 about both of these companies. First of all, my position, the 209 00:10:36,800 --> 00:10:40,240 one that I own a huge position in, is Netflix. 210 00:10:40,600 --> 00:10:44,160 And I have been extremely forthcoming and extremely 211 00:10:44,160 --> 00:10:47,120 transparent and saying repeatedly that I believe that 212 00:10:47,120 --> 00:10:50,480 this battle, the so-called streaming war has been over. 213 00:10:50,800 --> 00:10:52,920 And in my opinion it's been over for over three years. 214 00:10:53,040 --> 00:10:56,000 People are still talking about the streaming wars today as if 215 00:10:56,000 --> 00:10:59,080 they're going on, but they haven't been going on for years 216 00:10:59,080 --> 00:11:01,440 and I think the evidence is in the numbers. 217 00:11:01,560 --> 00:11:05,120 We can take a look at Netflix. Netflix was the so-called leader 218 00:11:05,120 --> 00:11:08,480 of the streaming wars three years ago, and then Disney 219 00:11:08,480 --> 00:11:12,120 Warnermedia, Apple TV, Amazon Prime, all of these companies 220 00:11:12,120 --> 00:11:15,960 tried to take what Netflix had. They threw everything at it, 221 00:11:16,400 --> 00:11:18,960 billions and billions of dollars into streaming. 222 00:11:19,440 --> 00:11:21,080 And what did it do? Well, let's go ahead and take a 223 00:11:21,080 --> 00:11:23,760 look at the damage it actually did to Netflix. 224 00:11:24,120 --> 00:11:27,120 We can start off by looking at the total subscribers. 225 00:11:27,400 --> 00:11:30,840 We have that right here. Again, all these companies 226 00:11:30,880 --> 00:11:36,040 funded their battle against Netflix in 2021 right there. 227 00:11:36,360 --> 00:11:39,360 That's where Disney was putting in $8 billion per year. 228 00:11:39,640 --> 00:11:42,400 We had Warner Warnermedia investing more in the content, 229 00:11:42,640 --> 00:11:45,640 all of them trying to offer discounts and offer everything 230 00:11:45,640 --> 00:11:49,280 they could, enticing subscribers to sign up for months of free 231 00:11:49,280 --> 00:11:51,920 content and look at what it did to Netflix. 232 00:11:52,440 --> 00:11:56,160 This is what happened. Netflix lost a couple 233 00:11:56,160 --> 00:12:00,120 subscribers for two quarters, two quarters, right there and 234 00:12:00,120 --> 00:12:01,720 right there. They lost enough that you can 235 00:12:01,720 --> 00:12:04,400 barely even discern that they lost subscribers. 236 00:12:04,560 --> 00:12:08,720 They lost less than 1% of their subscriber base for 1/4 and then 237 00:12:08,720 --> 00:12:11,440 quickly resumed growth. It's barely visible, and even 238 00:12:11,440 --> 00:12:14,400 though it did slow them down a little bit, it did not stop 239 00:12:14,400 --> 00:12:16,680 Netflix. Once they initiated the password 240 00:12:16,680 --> 00:12:20,480 crackdown and they continue to do their playbook, their global 241 00:12:20,480 --> 00:12:23,520 scale kicked in and Netflix continued to gain market share 242 00:12:23,720 --> 00:12:26,200 and gain subscribers. You can see this again through 243 00:12:26,200 --> 00:12:28,080 the revenue by different regions. 244 00:12:28,440 --> 00:12:31,800 The revenue ticked down for 1/4 and then resumed growth 245 00:12:31,800 --> 00:12:34,680 immediately afterwards. I think it's very clear through 246 00:12:34,680 --> 00:12:37,680 the numbers, there's no longer any chance of Disney winning any 247 00:12:37,680 --> 00:12:40,120 type of streaming wars. That ship has sailed. 248 00:12:40,120 --> 00:12:43,080 It's completely gone. Netflix is dominating and will 249 00:12:43,080 --> 00:12:45,000 continue to dominate that market share. 250 00:12:45,360 --> 00:12:47,040 But there is opportunity for Disney. 251 00:12:47,360 --> 00:12:49,320 The company has gone through a lot and I think there is 252 00:12:49,320 --> 00:12:51,880 opportunity for optimization and to make money. 253 00:12:52,440 --> 00:12:54,800 Disney has a lot of ways of making money that companies like 254 00:12:54,800 --> 00:12:57,040 Netflix don't. They have their parks, they have 255 00:12:57,040 --> 00:13:00,120 their Broadways, they have their cruise ships, they have their 256 00:13:00,120 --> 00:13:03,280 merchandise, They have an ecosystem built out that's still 257 00:13:03,280 --> 00:13:06,360 a money making machine. And it's been mishandled for 258 00:13:06,360 --> 00:13:09,600 years, which means there is a chance for Disney to get back on 259 00:13:09,600 --> 00:13:13,240 track to start making blockbuster animated movies, to 260 00:13:13,240 --> 00:13:16,560 start making free cash flow, and I think that's what investors 261 00:13:16,760 --> 00:13:19,600 are looking for. The goal for Disney has shifted. 262 00:13:19,920 --> 00:13:23,720 No longer, I believe, are they looking to become the streaming 263 00:13:23,720 --> 00:13:26,400 leader and regain the lead from Netflix. 264 00:13:26,640 --> 00:13:29,560 That ship has sailed. But they are looking to generate 265 00:13:29,720 --> 00:13:32,720 at least $8 billion of free cash flow per year. 266 00:13:32,840 --> 00:13:35,960 If we look at their free cash flow in the past year, 2023, 267 00:13:36,280 --> 00:13:40,360 they generated 4.9 billion. Now again, what I think Disney 268 00:13:40,360 --> 00:13:44,080 shareholders should look for is generating around 8 billion this 269 00:13:44,080 --> 00:13:46,000 year. That'd be a very good growth 270 00:13:46,000 --> 00:13:49,200 path for the company. That would put them back close 271 00:13:49,200 --> 00:13:52,200 to all time highs during their Marvel era. 272 00:13:52,600 --> 00:13:54,880 If they can pull that off, I think they're in good shape. 273 00:13:55,120 --> 00:13:57,920 I think the stock will move further up and they can do that 274 00:13:57,920 --> 00:14:00,000 by having good blockbuster movies. 275 00:14:00,240 --> 00:14:03,040 That's one of the main ways they need to regain the box office. 276 00:14:03,360 --> 00:14:06,360 They can do that by optimizing their streaming service to be 277 00:14:06,360 --> 00:14:09,360 profitable at a smaller scale and they can do that by 278 00:14:09,360 --> 00:14:11,240 continuing their parks operation. 279 00:14:11,600 --> 00:14:15,400 So at Disney, I think the goal here is not to win streaming 280 00:14:15,400 --> 00:14:17,080 wars. I don't think it's to have the 281 00:14:17,080 --> 00:14:20,000 most subscribers. I think it's to optimize for 282 00:14:20,000 --> 00:14:22,720 cash flows, optimize the margins of the company. 283 00:14:22,880 --> 00:14:25,400 Now my comments are very similar for Warner Brothers Discovery. 284 00:14:25,640 --> 00:14:28,720 Both of these studios, both Warner Brothers and Disney, make 285 00:14:28,720 --> 00:14:30,800 great content. They come out with great movies 286 00:14:30,800 --> 00:14:33,680 and great shows, but they do so rather infrequently. 287 00:14:34,000 --> 00:14:36,840 They're never going to have the fire hose of continued content 288 00:14:36,840 --> 00:14:39,680 every single day like Netflix because they don't have the 289 00:14:39,680 --> 00:14:43,280 income stream to afford that. So these companies have no 290 00:14:43,280 --> 00:14:45,560 chance of surpassing Netflix's subscribers. 291 00:14:45,880 --> 00:14:49,280 Again, that ship has sailed. That that is not in the cards 292 00:14:49,280 --> 00:14:52,000 for these companies but they have other ways to optimize 293 00:14:52,000 --> 00:14:54,920 their business. For Warner Brothers Discovery, I 294 00:14:54,920 --> 00:14:57,800 believe the primary problem and the reason the stock continues 295 00:14:57,800 --> 00:15:01,840 to go down 30% year to date becoming one of the worst 296 00:15:01,840 --> 00:15:05,000 performers this year is because of the balance sheet. 297 00:15:05,440 --> 00:15:08,960 They have one of the worst balance sheets in the S&P 500. 298 00:15:09,320 --> 00:15:12,880 It's as bad as like cruise lines and companies that have massive 299 00:15:12,880 --> 00:15:16,040 CapEx investments. It just looks terrible. 300 00:15:16,400 --> 00:15:22,320 You can see that in 2022 it went to $48 billion in long term 301 00:15:22,320 --> 00:15:25,400 debt, Horrible, horrible amounts of debt. 302 00:15:25,720 --> 00:15:28,960 Now they're paying that down. They paid down $10 billion over 303 00:15:28,960 --> 00:15:32,640 the past seven quarters and it's now down to 38 billion. 304 00:15:33,040 --> 00:15:36,240 They're on track paying down debt and I think that's exactly 305 00:15:36,240 --> 00:15:38,560 what they should do. I believe this company should 306 00:15:38,560 --> 00:15:41,600 continue to prioritize paying down debt for at least the next 307 00:15:41,600 --> 00:15:45,080 couple of years so that they don't have this massive drag on 308 00:15:45,080 --> 00:15:47,120 their company. They don't have this interest 309 00:15:47,120 --> 00:15:49,560 payment ongoing. So between the two, I'm more 310 00:15:49,560 --> 00:15:52,040 bullish on Walt Disney than I am Warner Brothers Discovery. 311 00:15:52,200 --> 00:15:55,120 But out of all the streaming companies, my pick continues to 312 00:15:55,120 --> 00:15:57,360 be Netflix. Now moving on from Walt Disney 313 00:15:57,360 --> 00:16:01,320 and Warner Brothers Discovery, we go to Celsius, also reporting 314 00:16:01,320 --> 00:16:03,280 earnings before market open Tuesday. 315 00:16:03,680 --> 00:16:06,400 Celsius is the energy drink company and it's kind of 316 00:16:06,400 --> 00:16:08,760 advertised as like the healthier version, right? 317 00:16:08,760 --> 00:16:11,440 You have Monster Energy, which is unhealthy, and look at the 318 00:16:11,440 --> 00:16:13,800 cans, Monster Energy just looks unhealthy. 319 00:16:14,160 --> 00:16:17,200 Then you have Celsius, it's light and it's bright and it's 320 00:16:17,200 --> 00:16:19,960 advertised as healthier. This is the energy drink for 321 00:16:20,000 --> 00:16:23,440 athletes, stars, people that want to be healthy and have 322 00:16:23,440 --> 00:16:24,920 energy. Now whether or not you believe 323 00:16:24,920 --> 00:16:27,880 that as a different thing, but the marketing has worked. 324 00:16:27,880 --> 00:16:31,440 They have a lot of people hooked on Celsius and I'll say this has 325 00:16:31,440 --> 00:16:34,200 been one of the most incredible stories in the market. 326 00:16:34,560 --> 00:16:38,920 There is an insatiable desire for people to have energy 327 00:16:38,920 --> 00:16:40,720 drinks. That is something that is 328 00:16:40,720 --> 00:16:43,760 apparent everyday. We want to have energy, we want 329 00:16:43,760 --> 00:16:47,000 to have a boost and caffeine continues to be the drug of 330 00:16:47,000 --> 00:16:49,000 choice. It is the one everybody wants. 331 00:16:49,440 --> 00:16:53,440 Now I've had my thoughts about the energy drink bubble, the 332 00:16:53,440 --> 00:16:56,800 caffeine bubble as I call it. I made a video on this topic a 333 00:16:56,800 --> 00:17:00,120 month or two ago, but Celsius has been one of the companies 334 00:17:00,120 --> 00:17:01,600 that has really taken market share. 335 00:17:01,920 --> 00:17:05,760 If we look at the performance of the stock over time, we go back 336 00:17:05,760 --> 00:17:10,200 one year up 120%. We go back five years and here's 337 00:17:10,200 --> 00:17:17,720 where it gets crazy, up 5469 percent, 5000%. 338 00:17:17,960 --> 00:17:21,000 This is the type of company that if you bought it, you know, in 339 00:17:21,000 --> 00:17:27,440 2019, you buy it for $1.20 and it's now trading at $78. 340 00:17:27,720 --> 00:17:31,240 So you'd become wealthy buying this company way back in 2019. 341 00:17:31,240 --> 00:17:34,440 Of course, it's very difficult to predict, but there were signs 342 00:17:34,440 --> 00:17:38,960 along the way, especially just in 2021 and 2022, there were 343 00:17:38,960 --> 00:17:42,200 signs that this company was going to be big that I ignored. 344 00:17:42,560 --> 00:17:45,080 One of them was that I sought in Costco. 345 00:17:45,920 --> 00:17:49,760 Now anytime I see a new product from a company that is new, 346 00:17:49,960 --> 00:17:52,080 isn't owned by one of the big companies like Pepsi or 347 00:17:52,080 --> 00:17:55,560 Coca-Cola, it gets my attention. I look at it and I think, wow, I 348 00:17:55,560 --> 00:17:57,200 haven't seen this company in Costco. 349 00:17:57,560 --> 00:18:01,960 I go to Costco rather frequently now with most companies that are 350 00:18:01,960 --> 00:18:05,720 new and they have new products. I see them in Costco for a time 351 00:18:06,000 --> 00:18:08,920 and then I see them go away from Costco because their sales 352 00:18:08,920 --> 00:18:11,680 eventually slow down. And Costco is very quick to 353 00:18:11,680 --> 00:18:14,080 replace you if your sales slow down. 354 00:18:14,400 --> 00:18:16,120 That's what happened to Tattoo Chef. 355 00:18:16,160 --> 00:18:19,320 And a lot of their products, they come in, some of them sell 356 00:18:19,320 --> 00:18:21,400 really well, so they stick around and then some of their 357 00:18:21,400 --> 00:18:23,520 products don't sell, so they go away. 358 00:18:24,040 --> 00:18:26,440 But with Celsius, the products didn't go away. 359 00:18:26,800 --> 00:18:30,400 In fact, Celsius continued to sell very well at Costco pallet 360 00:18:30,400 --> 00:18:32,440 after pallet. And you can ask some of the 361 00:18:32,440 --> 00:18:34,800 employees. One thing you can do is ask them 362 00:18:35,240 --> 00:18:37,680 how much are you selling of this particular item? 363 00:18:37,680 --> 00:18:39,560 Like how many pallets are you moving a week? 364 00:18:40,000 --> 00:18:43,240 And some of them would say that they were selling 1 pallet a day 365 00:18:43,400 --> 00:18:45,640 of Celsius, an incredible amount. 366 00:18:45,640 --> 00:18:48,280 And if you extrapolate that throughout every Costco, you get 367 00:18:48,280 --> 00:18:52,360 an idea of how much this company selling, getting into big, big 368 00:18:52,360 --> 00:18:54,400 places like Costco is a huge advantage. 369 00:18:54,680 --> 00:18:58,280 So this company had a huge advantage a while ago and I 370 00:18:58,280 --> 00:19:00,240 didn't jump in. I still thought it was too 371 00:19:00,240 --> 00:19:04,160 unpredictable, but the stock price raised up going from $13 372 00:19:04,160 --> 00:19:07,240 to now $78. So this has been a huge winner. 373 00:19:07,440 --> 00:19:10,240 A lot of the success has already happened and now the company 374 00:19:10,240 --> 00:19:12,280 trades at, of course, a very high valuation. 375 00:19:12,480 --> 00:19:14,600 Investors are believing it's going to go international and 376 00:19:14,600 --> 00:19:16,440 it's going to continue to gain market share. 377 00:19:16,840 --> 00:19:20,880 We've had some warning signs that energy drinks and the 378 00:19:20,880 --> 00:19:23,440 energy market may be slowing down a bit. 379 00:19:23,720 --> 00:19:26,120 Starbucks has given us those warning signs. 380 00:19:26,200 --> 00:19:28,480 If we look at Starbucks, there are some concerns. 381 00:19:28,480 --> 00:19:32,480 For example, not only did the revenue go down quarter over 382 00:19:32,480 --> 00:19:35,600 quarter by a good amount, you can see it tick down there, but 383 00:19:35,600 --> 00:19:38,920 we can also look at the active reward members, The amount of 384 00:19:38,920 --> 00:19:42,360 reward members dropped as well. So Starbucks had some real 385 00:19:42,360 --> 00:19:46,000 numbers that hurt their company. And the question is, is whether 386 00:19:46,000 --> 00:19:48,680 or not that transfers over to Celsius. 387 00:19:49,040 --> 00:19:51,680 I believe that Celsius earnings are still going to be good. 388 00:19:51,920 --> 00:19:55,080 They're going to be good despite Starbucks is lacking because 389 00:19:55,080 --> 00:19:58,360 Celsius is mostly within the US, which I think has been stronger. 390 00:19:58,640 --> 00:20:02,600 And I think Celsius is simply taking share from Starbucks. 391 00:20:03,000 --> 00:20:06,800 Look at the value proposition. Starbucks is like $6 for a drink 392 00:20:06,840 --> 00:20:09,200 in some cases. If you get a medium or you get a 393 00:20:09,200 --> 00:20:13,200 large drink, whatever they call it, it's like 6 or 7 bucks. 394 00:20:13,560 --> 00:20:17,280 Whereas if you get a Celsius. One can is around $2.00. 395 00:20:17,400 --> 00:20:19,480 So you get around three times the amount of drinks when you 396 00:20:19,480 --> 00:20:21,760 buy a Celsius is when you buy a Starbucks. 397 00:20:21,960 --> 00:20:25,000 Now I know that they're not the same product, but I do believe 398 00:20:25,000 --> 00:20:27,960 they have some overlap. If you look at the Venn diagram, 399 00:20:28,160 --> 00:20:31,320 I believe there is overlap between Celsius and between 400 00:20:31,320 --> 00:20:33,520 Starbucks. So I go into Celsius's earnings 401 00:20:33,520 --> 00:20:36,640 with caution and optimism. I think that more than likely 402 00:20:36,640 --> 00:20:38,880 it's going to be good. Now moving on from Celsius, we 403 00:20:38,880 --> 00:20:42,040 have another really cool company reporting earnings before market 404 00:20:42,040 --> 00:20:43,920 open on Tuesday. Crocs. 405 00:20:44,280 --> 00:20:46,280 Crocs of course, is the Crocs brand. 406 00:20:46,320 --> 00:20:49,240 All the kids are wearing them and a lot of adults, they're 407 00:20:49,640 --> 00:20:51,480 they're supposed to be comfortable shoes. 408 00:20:51,480 --> 00:20:53,840 Now, I have not owned any Crocs myself. 409 00:20:53,840 --> 00:20:57,000 They don't appeal to me, but I do own some Hey Dudes, which is 410 00:20:57,000 --> 00:21:01,080 another brand that Crocs owns. Either way, it is the season to 411 00:21:01,080 --> 00:21:04,200 be buying Crocs. If you have kids, you probably 412 00:21:04,200 --> 00:21:07,080 own some Crocs for them because they're very, very popular. 413 00:21:07,440 --> 00:21:10,720 The reason they're popular for parents buying them for kids. 414 00:21:11,200 --> 00:21:14,240 I'll tell you through personal experience is because the knock 415 00:21:14,240 --> 00:21:17,200 offs of them are not as good. You can buy knock offs that look 416 00:21:17,200 --> 00:21:19,720 just like Crocs at Walmart. They're not as good. 417 00:21:19,960 --> 00:21:22,880 They're made from cheaper plastic that rubs against your 418 00:21:22,880 --> 00:21:26,040 heel causing like Marks and redness on your heels and your 419 00:21:26,040 --> 00:21:28,560 feet. The Crocs material is much 420 00:21:28,560 --> 00:21:30,440 better. They actually have a patent on 421 00:21:30,440 --> 00:21:33,240 the specific type of plastic they use and it's just more 422 00:21:33,240 --> 00:21:35,080 comfortable. It's more flexible, it's more 423 00:21:35,080 --> 00:21:38,280 durable, it's lighter. And so the Crocs really do have 424 00:21:38,280 --> 00:21:41,960 some unique IP causing them to have a really great product. 425 00:21:42,240 --> 00:21:45,240 They're easier to wash, they're easier to clean, kids run around 426 00:21:45,240 --> 00:21:47,680 and they get the shoes muddy. You can just run them under a 427 00:21:47,680 --> 00:21:50,640 hose, wash them off. They're very convenient shoes 428 00:21:50,640 --> 00:21:53,480 for parents and they've established a lot of brand 429 00:21:53,480 --> 00:21:55,880 loyalty. So this company is more than 430 00:21:55,880 --> 00:21:59,280 just a silly shoe company. They own a really good brand. 431 00:21:59,440 --> 00:22:02,800 They own intellectual property with the specific type of 432 00:22:02,800 --> 00:22:06,240 material they make the Crocs out of, and they have a lot of brand 433 00:22:06,240 --> 00:22:07,920 loyalty. There's a lot of people that 434 00:22:07,920 --> 00:22:13,160 will pay 20 or $30.00 for the Crocs shoes over $10 knockoffs 435 00:22:13,160 --> 00:22:14,760 because they want to own the name brand. 436 00:22:15,200 --> 00:22:18,200 And another thing about this company is the margins are very 437 00:22:18,200 --> 00:22:21,920 high because shoe companies like Nike have to put in all these 438 00:22:21,920 --> 00:22:24,560 different fabrics and textures and different things into their 439 00:22:24,560 --> 00:22:27,440 shoes. Crocs uses molds, they just use 440 00:22:27,440 --> 00:22:29,720 a mold of a specific type of plastic. 441 00:22:30,040 --> 00:22:33,640 So it really is a great company. They've they've really figured 442 00:22:33,640 --> 00:22:35,280 out a good thing for their business. 443 00:22:35,800 --> 00:22:39,680 The valuation is also extremely low typically all the time. 444 00:22:39,920 --> 00:22:44,280 For example, right now it trades at a 10 for PE and a 10% free 445 00:22:44,280 --> 00:22:47,000 cash flow yield, very low valuation. 446 00:22:47,320 --> 00:22:49,560 It's probably undervalued at this point. 447 00:22:50,520 --> 00:22:53,800 I still don't own the stock and that's for a specific reason. 448 00:22:54,280 --> 00:22:57,680 The reason is, is that I still believe the company does not 449 00:22:57,680 --> 00:23:00,520 meet my standards of predictability. 450 00:23:00,960 --> 00:23:03,600 When I look for companies, I need to have a high degree of 451 00:23:03,600 --> 00:23:06,200 predictability. I need Costco like 452 00:23:06,200 --> 00:23:09,120 predictability, right? Companies like Salesforce that 453 00:23:09,120 --> 00:23:12,160 can grow and grow and grow because they have incredible 454 00:23:12,160 --> 00:23:16,720 pricing power with Crocs. After all, after everything is 455 00:23:16,720 --> 00:23:20,200 said and done, it's still a style company. 456 00:23:20,520 --> 00:23:22,640 It's still a company where people have tastes and 457 00:23:22,640 --> 00:23:25,400 preferences and that's what drives their sales. 458 00:23:25,800 --> 00:23:29,080 And if those tastes and preferences shift or they change 459 00:23:29,080 --> 00:23:32,680 over time, which in many cases they do, the sales could 460 00:23:32,680 --> 00:23:35,040 plummet. So for that reason, I think it's 461 00:23:35,040 --> 00:23:39,120 less predictable. An example I would give is VF 462 00:23:39,120 --> 00:23:42,000 Corporation. This is a company that owns many 463 00:23:42,200 --> 00:23:45,320 household name brands. They own Vans, North Face, 464 00:23:45,520 --> 00:23:49,920 Timberland, Dickies, Ultra E Park, Icebreaker, Jansport, all 465 00:23:49,920 --> 00:23:52,280 these great companies, you see them all over the place and 466 00:23:52,280 --> 00:23:55,080 shopping malls and different retail locations. 467 00:23:56,080 --> 00:23:59,000 This stock has been all over the place because tastes and 468 00:23:59,000 --> 00:24:02,400 preferences changed over time. If we look at the 10 year graph 469 00:24:02,400 --> 00:24:06,280 of it, you can see the huge decline as they went out of 470 00:24:06,280 --> 00:24:09,400 style. That's the big concern here is 471 00:24:09,400 --> 00:24:13,640 if Crocs simply go out of style, if another brand comes in and it 472 00:24:13,640 --> 00:24:17,640 trends on TikTok and it trends on on social media and Instagram 473 00:24:17,640 --> 00:24:21,360 reels and YouTube, it could rapidly change the landscape of 474 00:24:21,360 --> 00:24:24,120 competition. So in terms of right now, I 475 00:24:24,120 --> 00:24:25,720 believe Crocs is going to do well. 476 00:24:25,720 --> 00:24:28,160 I think they're going to beat on these earnings with the Crocs 477 00:24:28,160 --> 00:24:30,000 brand. I think the Hey Dude brand will 478 00:24:30,000 --> 00:24:33,000 come in weaker, but I think their name Crocs brand is going 479 00:24:33,000 --> 00:24:34,880 to do well. And I think the company's likely 480 00:24:34,880 --> 00:24:36,840 to see continued momentum throughout this year. 481 00:24:37,240 --> 00:24:40,080 But still I'm not going to be buying the stock because I think 482 00:24:40,080 --> 00:24:43,600 it's too dependent on consumer preferences which are quick to 483 00:24:43,600 --> 00:24:46,720 change. Next up we have Nikola. 484 00:24:47,320 --> 00:24:49,440 I thought it would be fun to just go over this company. 485 00:24:49,440 --> 00:24:52,680 I haven't talked about it in a long time and Nikola and I go 486 00:24:52,680 --> 00:24:55,160 way back. They are, after all, the only 487 00:24:55,160 --> 00:24:59,040 company or the only one ever to strike one of my videos. 488 00:24:59,400 --> 00:25:02,200 They did a copyright strike on one of my videos years ago 489 00:25:02,440 --> 00:25:07,000 because I used a clip, one clip of their own marketing material 490 00:25:07,000 --> 00:25:10,080 in one of my episodes, which of course is completely legal to 491 00:25:10,080 --> 00:25:12,640 use. It's completely protected under 492 00:25:12,640 --> 00:25:15,520 fair use. But Nicola didn't want what they 493 00:25:15,520 --> 00:25:18,120 were doing exposed. So they copyright strike me and 494 00:25:18,120 --> 00:25:21,280 a number of other Youtubers now. I called them, I called the 495 00:25:21,280 --> 00:25:23,600 business saying I was going to bring sue against them. 496 00:25:23,600 --> 00:25:25,800 I was going to challenge this copyright strike and fight it, 497 00:25:26,080 --> 00:25:29,480 because if you're not aware, 3 copyright strikes on a channel 498 00:25:29,480 --> 00:25:33,000 and the channel's deleted and I had every legal standing to use 499 00:25:33,000 --> 00:25:35,720 that clip in my video. But it didn't need to go to 500 00:25:35,720 --> 00:25:38,640 court because Nikola quickly removed the copyright strike 501 00:25:38,640 --> 00:25:42,040 after the Financial Times wrote about them trying to censor 502 00:25:42,040 --> 00:25:44,520 Youtubers. So the problem kind of resolved 503 00:25:44,520 --> 00:25:47,520 itself very quickly. But either way, Nikola is a 504 00:25:47,520 --> 00:25:49,360 company that I haven't talked about in a while. 505 00:25:49,640 --> 00:25:53,440 We know that the founder has been arrested and charged and 506 00:25:53,440 --> 00:25:55,760 convicted of fraud on multiple levels. 507 00:25:56,160 --> 00:25:58,560 I can't remember exactly how many years he got, but it's like 508 00:25:58,560 --> 00:26:01,360 7 or 8 years I think. Because what he was found doing 509 00:26:01,360 --> 00:26:04,440 was misrepresenting Nikola's current technology to investors, 510 00:26:04,720 --> 00:26:07,680 which of course is illegal. Now of course they've done 511 00:26:07,680 --> 00:26:09,560 changes. They no longer have the same 512 00:26:09,560 --> 00:26:11,640 CEO. They've changed management so 513 00:26:11,640 --> 00:26:14,080 companies can evolve and change over time. 514 00:26:14,280 --> 00:26:17,240 One company that's a great company today but historically 515 00:26:17,240 --> 00:26:20,000 did fraud was waste management. You can read about the 516 00:26:20,000 --> 00:26:22,720 accounting fraud they did in 2002. 517 00:26:23,240 --> 00:26:25,520 They did a lot of things that were highly illegal. 518 00:26:25,520 --> 00:26:28,000 They basically lied to investors through their accounting 519 00:26:28,000 --> 00:26:31,080 statements to a huge degree. There's some people that I 520 00:26:31,080 --> 00:26:33,320 believe went to jail. Their accounting team was 521 00:26:33,320 --> 00:26:35,680 switched over. They have new auditing systems 522 00:26:35,960 --> 00:26:38,360 and the companies changed. Waste Management's now a great 523 00:26:38,360 --> 00:26:40,600 company. So things can change and I 524 00:26:40,600 --> 00:26:42,320 believe that Nikola can change as well. 525 00:26:42,320 --> 00:26:45,000 But when we look at this company and I was looking over the 526 00:26:45,000 --> 00:26:49,520 financials, I still believe the most likely outcome for Nikola 527 00:26:49,800 --> 00:26:54,840 is to either be purchased for a small sum by another company or 528 00:26:54,840 --> 00:26:58,480 to go to zero. I think that's the most likely 529 00:26:58,480 --> 00:27:00,280 outcome. Let's go ahead and take a look 530 00:27:00,280 --> 00:27:03,800 at some of the financials here. First of all, revenues declining 531 00:27:03,880 --> 00:27:06,480 and they really don't have any real revenue to speak of. 532 00:27:06,920 --> 00:27:09,840 This is mostly fake revenue where they've like done some 533 00:27:09,840 --> 00:27:12,040 specific deals to try to generate revenue. 534 00:27:12,400 --> 00:27:16,240 So they only have $35 million of revenue in 2023. 535 00:27:16,720 --> 00:27:19,520 But you also look at the other financial metrics, the EBITDA is 536 00:27:19,520 --> 00:27:21,640 negative. They're losing money every every 537 00:27:21,640 --> 00:27:24,520 year, every quarter. The free cash flow is negative. 538 00:27:24,560 --> 00:27:26,920 They're losing hundreds of millions of dollars per year. 539 00:27:27,320 --> 00:27:29,680 Their earnings and net income are both negative. 540 00:27:30,120 --> 00:27:33,360 And the reason they're able to afford this, the reason they can 541 00:27:33,360 --> 00:27:37,840 continue to have negative cash flow and still be alive today is 542 00:27:37,840 --> 00:27:40,080 because they're issuing more and more shares. 543 00:27:40,600 --> 00:27:42,080 I don't know who's buying these shares. 544 00:27:42,360 --> 00:27:45,680 I don't know who's scooping them up or who's, who's adding to 545 00:27:45,680 --> 00:27:47,920 their cash pile, but they're doing it. 546 00:27:48,280 --> 00:27:52,400 They increased their share count from roughly 480 million to 547 00:27:52,400 --> 00:27:57,280 around 1 billion in one year. So they over doubled their share 548 00:27:57,280 --> 00:28:00,920 count, diluting investors by double in a single year. 549 00:28:01,400 --> 00:28:03,920 So they're trying to raise as much cash as they can because 550 00:28:03,920 --> 00:28:06,160 cash is the only thing keeping them alive. 551 00:28:06,240 --> 00:28:08,560 So going into earnings with Nikola, I'm going to be seeing 552 00:28:08,560 --> 00:28:11,560 if they actually make any money. They have to eventually because 553 00:28:11,560 --> 00:28:14,560 the cost of capital has gone up. They no longer can survive 554 00:28:14,560 --> 00:28:17,840 indefinitely with cheap capital. So they're either going to have 555 00:28:17,840 --> 00:28:20,600 to continue to dilute shareholders until finally that 556 00:28:20,600 --> 00:28:24,040 no longer works because the stock price tanks too much or 557 00:28:24,040 --> 00:28:27,760 they have to really make money. One of those two outcomes so 558 00:28:27,760 --> 00:28:30,600 far, I think they're more likely to try to continue to dilute, 559 00:28:30,880 --> 00:28:33,240 but we'll see. Either way, it's going to be an 560 00:28:33,240 --> 00:28:35,240 interesting earnings from Nikola now. 561 00:28:35,240 --> 00:28:39,160 Next up, also reporting earnings at the same time is Ferrari. 562 00:28:39,520 --> 00:28:41,680 Now a lot of people misunderstand Ferrari. 563 00:28:41,680 --> 00:28:44,840 They believe it's a car company, but I would actually categorize 564 00:28:44,840 --> 00:28:48,680 this company as more of a luxury company than a car company. 565 00:28:48,960 --> 00:28:53,080 I put it in the same category as Louis Vuitton, the same type of 566 00:28:53,080 --> 00:28:55,640 thing. Even though Louis Vuitton sells 567 00:28:55,640 --> 00:28:59,000 bags, it's not a bag company, it's a luxury company. 568 00:28:59,240 --> 00:29:02,600 So even though Ferrari sells cars, it's not a car company, 569 00:29:02,600 --> 00:29:05,120 it's a luxury company. And that's because of the way 570 00:29:05,120 --> 00:29:08,960 that the company strategically prices and evaluates its 571 00:29:08,960 --> 00:29:11,360 vehicles. If you looked at Ferrari and you 572 00:29:11,360 --> 00:29:14,560 asked them what is a Ferrari? What are you really selling? 573 00:29:14,840 --> 00:29:17,240 They would not just say they're selling cars, they'd say that 574 00:29:17,240 --> 00:29:19,600 they're selling something that's a prized asset. 575 00:29:19,880 --> 00:29:22,680 It is something that's like a spectacle, something that you 576 00:29:22,680 --> 00:29:25,480 own that you're proud of. It's different than just a 577 00:29:25,480 --> 00:29:28,920 utility that has certain metrics that gets you from point A to 578 00:29:28,920 --> 00:29:31,600 point B. And we can see this illustrated 579 00:29:31,600 --> 00:29:33,960 in the numbers. For example, if we look at a 580 00:29:33,960 --> 00:29:37,720 normal car company, we can look at some of the margins of the 581 00:29:37,720 --> 00:29:40,120 company. Normal car companies have 582 00:29:40,120 --> 00:29:45,440 margins of around 2 to 8% operating margins, They're very, 583 00:29:45,440 --> 00:29:48,520 very low. When we look at race, which is 584 00:29:48,560 --> 00:29:52,640 Ferrari, the operating margins are all the way up to 25%. 585 00:29:53,120 --> 00:29:55,520 These are incredibly high operating margins. 586 00:29:55,800 --> 00:29:59,000 This is unlike any car company. This is higher than Tesla, 587 00:29:59,040 --> 00:30:02,600 higher than Ford, higher than GM, higher than any other car 588 00:30:02,600 --> 00:30:05,480 company you can name off. There's not really any other car 589 00:30:05,480 --> 00:30:08,920 companies that have operating margins reaching 30% on a 590 00:30:08,920 --> 00:30:11,760 consistent basis. That just is not happening 591 00:30:11,760 --> 00:30:14,000 anywhere else. And again, this is what happens 592 00:30:14,000 --> 00:30:17,520 when you can charge an extreme amount for your vehicle, way 593 00:30:17,520 --> 00:30:19,800 more than the cost of creating the actual vehicle. 594 00:30:20,200 --> 00:30:22,520 When we look at the profit margins, again this is 595 00:30:22,520 --> 00:30:28,320 incredibly high profit margins of 20% For a car company, that 596 00:30:28,320 --> 00:30:31,160 doesn't make sense because what they're selling is not just a 597 00:30:31,160 --> 00:30:33,240 car, they're selling an experience. 598 00:30:33,480 --> 00:30:37,080 They're selling an item that wealthy people use to signal to 599 00:30:37,120 --> 00:30:40,400 other wealthy people how wealthy and great they are. 600 00:30:40,640 --> 00:30:43,880 Whenever you buy an item that's used for signaling to others how 601 00:30:43,880 --> 00:30:46,200 wealthy you are, that is a luxury item. 602 00:30:46,200 --> 00:30:48,920 So I'm looking at Ferrari. I actually find this company 603 00:30:48,920 --> 00:30:51,600 rather attractive. I think it's a great stock now, 604 00:30:51,600 --> 00:30:54,280 trades at a very high valuation and that's the downside of it. 605 00:30:54,560 --> 00:30:56,880 As investors have caught on, they've bid the company up to a 606 00:30:56,880 --> 00:31:00,440 54 PE ratio, a free cash flow yield of 1%. 607 00:31:00,800 --> 00:31:03,640 So it's very expensive on any way that you're looking at it, 608 00:31:03,960 --> 00:31:05,560 but it has the metrics to back it up. 609 00:31:05,640 --> 00:31:07,960 From everything I can see Ferrari's earnings are going to 610 00:31:07,960 --> 00:31:09,680 be good. There's still so many wealthy 611 00:31:09,680 --> 00:31:12,760 people that want these vehicles. They have enormous demand. 612 00:31:12,760 --> 00:31:14,280 They have enormous pricing power. 613 00:31:14,320 --> 00:31:16,560 And I think at this point they can basically pick what their 614 00:31:16,560 --> 00:31:18,800 bottom line is going to be. Now moving throughout the week, 615 00:31:18,800 --> 00:31:22,040 we move on to Wednesday before market open, we have Uber and 616 00:31:22,040 --> 00:31:23,720 Shopify. Let's go ahead and start off 617 00:31:23,720 --> 00:31:25,840 with Uber. This is another one that I view 618 00:31:25,840 --> 00:31:29,160 very positively right now. I think the earnings this season 619 00:31:29,160 --> 00:31:31,440 are going to be good for Uber because they have a lot of 620 00:31:31,440 --> 00:31:35,120 positive fundamental momentum, their revenues growing, the CE 621 00:31:35,120 --> 00:31:38,200 OS focused on profits. The business I believe is doing 622 00:31:38,200 --> 00:31:40,480 really well. They do have some competitors 623 00:31:40,480 --> 00:31:44,160 down the road, but so far that isn't manifesting itself today. 624 00:31:44,400 --> 00:31:46,880 I think the company's earnings are going to be very strong this 625 00:31:46,880 --> 00:31:49,280 quarter. In terms of the valuation. 626 00:31:49,800 --> 00:31:52,880 It's at a valuation now where investors are expecting a lot of 627 00:31:52,880 --> 00:31:55,000 growth. So I think there's more room for 628 00:31:55,000 --> 00:31:58,160 downside, disappointment if they are weak on any part of it. 629 00:31:58,480 --> 00:32:02,080 But again, overall with Uber right now, I'm bullish on it. 630 00:32:02,080 --> 00:32:04,640 I think the company's going to do really well now with Shopify. 631 00:32:04,640 --> 00:32:07,080 This is another company that I think is fantastic. 632 00:32:07,320 --> 00:32:09,440 It's another great company from Canada. 633 00:32:09,480 --> 00:32:13,240 Shopify is secretly growing into different business segments and 634 00:32:13,240 --> 00:32:15,720 a lot of investors aren't quite paying attention to this, I 635 00:32:15,720 --> 00:32:19,040 think as much as they should. For example, Shopify is becoming 636 00:32:19,040 --> 00:32:22,440 a little bit of a secret. PayPal, They're doing this by 637 00:32:22,480 --> 00:32:25,960 offering their customers, people that have built their businesses 638 00:32:25,960 --> 00:32:29,560 on Shopify, lines of credit. They're offering them different 639 00:32:29,560 --> 00:32:31,560 ways of paying using Shopify Pay. 640 00:32:32,080 --> 00:32:35,000 One example is if you have a business that's doing millions 641 00:32:35,000 --> 00:32:38,280 of dollars in revenue on Shopify, Shopify of course has 642 00:32:38,280 --> 00:32:40,680 all the analytics. They'll identify your business, 643 00:32:40,920 --> 00:32:43,520 the revenue that you're doing, and then they'll just contact 644 00:32:43,520 --> 00:32:45,840 you and say, hey, you need a line of credit. 645 00:32:46,120 --> 00:32:48,800 We'll give you a loan. Since they know how much you 646 00:32:48,800 --> 00:32:52,560 make on a continual basis, they can underwrite the risk better 647 00:32:52,560 --> 00:32:54,680 than a bank. A bank doesn't really know your 648 00:32:54,680 --> 00:32:57,240 business. A bank has to take your word for 649 00:32:57,240 --> 00:32:59,560 it in different financial documents you provide. 650 00:33:00,000 --> 00:33:02,680 Shopify already knows your business because you built your 651 00:33:02,680 --> 00:33:06,400 business on their platform. So Shopify can more confidently 652 00:33:06,400 --> 00:33:10,240 loan their customers money and know what to expect in return. 653 00:33:10,600 --> 00:33:14,320 And they do this by repaying themselves, not with you going 654 00:33:14,320 --> 00:33:17,680 and paying them back, but by siphoning off some of your 655 00:33:17,680 --> 00:33:19,800 revenue. So Shopify will give a loan of 656 00:33:19,800 --> 00:33:24,040 like $500,000, but then they'll say they'll take 3% of your 657 00:33:24,040 --> 00:33:26,280 revenue until that loan is paid back. 658 00:33:26,680 --> 00:33:29,840 So as you run your business that you already have on Shopify, 659 00:33:30,200 --> 00:33:32,840 they pay themselves back by taking a portion of your 660 00:33:32,840 --> 00:33:35,160 revenue. That way they can basically 661 00:33:35,160 --> 00:33:38,480 ensure that they get paid back as long as you're using your 662 00:33:38,480 --> 00:33:42,360 same business on their website. It's a pretty incredible little 663 00:33:42,360 --> 00:33:45,200 niche they've carved out. I think it's incredibly smart 664 00:33:45,200 --> 00:33:47,880 what they're doing and I think it's a good revenue generator 665 00:33:47,880 --> 00:33:50,200 for the company. And this is not the only thing 666 00:33:50,200 --> 00:33:52,240 they're doing. Shopify has really moved into 667 00:33:52,240 --> 00:33:55,360 this fintech category. I view Shopify as a little bit 668 00:33:55,360 --> 00:33:59,080 of an e-commerce company and then a fintech company on top of 669 00:33:59,080 --> 00:34:01,520 that. So I really like Shopify. 670 00:34:01,600 --> 00:34:04,840 I think it's a great company. The reason that I still choose 671 00:34:04,840 --> 00:34:09,120 to invest in Amazon over Shopify is for a couple of reasons. 672 00:34:09,560 --> 00:34:13,440 One of them is whenever you're trying to sell something to a 673 00:34:13,440 --> 00:34:17,520 customer, it's always more important to have an active 674 00:34:17,600 --> 00:34:21,040 audience, an active customer base, than it is to have your 675 00:34:21,040 --> 00:34:26,199 own flexibility and control. For example, with Amazon, if you 676 00:34:26,199 --> 00:34:30,000 sell on Amazon as a third party seller, sure, they take some of 677 00:34:30,000 --> 00:34:32,280 your fees and it costs more to sell on Amazon. 678 00:34:32,639 --> 00:34:36,360 But with Amazon, you have access to hundreds of millions of 679 00:34:36,360 --> 00:34:40,600 active shoppers already searching products already right 680 00:34:40,600 --> 00:34:43,440 there ready to buy. They're ready to go. 681 00:34:43,600 --> 00:34:45,800 You have the customer base already built in. 682 00:34:46,120 --> 00:34:49,760 That customer base from Amazon is insanely valuable. 683 00:34:49,960 --> 00:34:54,000 There's nothing else like it with Shopify, even though you 684 00:34:54,000 --> 00:34:56,679 have lower fees, even though you can build your own, even though 685 00:34:56,679 --> 00:34:59,520 you can do it yourself and you have more flexibility and you 686 00:34:59,520 --> 00:35:01,400 don't have to deal with big bad Amazon. 687 00:35:01,800 --> 00:35:05,040 The truth is, with Shopify, you have to have your own customer 688 00:35:05,040 --> 00:35:07,480 base. You don't simply just inherit it 689 00:35:07,520 --> 00:35:10,720 from Amazon's fulfilment center. You don't inherit it from 690 00:35:10,720 --> 00:35:13,320 Amazon's website. You have to build your own. 691 00:35:13,600 --> 00:35:15,680 And doing that is very, very difficult. 692 00:35:16,080 --> 00:35:19,000 Shopify stores have to find advertising. 693 00:35:19,240 --> 00:35:22,080 They have to advertise on Meta and Google to get people to 694 00:35:22,080 --> 00:35:25,200 their store. Amazon sellers don't really have 695 00:35:25,200 --> 00:35:27,160 to advertise. They just have to have a great 696 00:35:27,160 --> 00:35:30,560 product that does well and it trends well and they make sales 697 00:35:31,040 --> 00:35:33,520 and if they do advertise, they can advertise to an already 698 00:35:33,520 --> 00:35:35,800 existing customer base on Amazon. 699 00:35:36,320 --> 00:35:40,320 So I think that Amazon even on online retail has a massive 700 00:35:40,320 --> 00:35:44,080 advantage over Shopify and Shopify sellers and I think 701 00:35:44,080 --> 00:35:47,040 that's because of the existing customer base on Amazon. 702 00:35:47,440 --> 00:35:50,080 So that's the reason that I prioritize Amazon along with a 703 00:35:50,080 --> 00:35:52,480 couple other reasons. I really like the AWS business 704 00:35:52,480 --> 00:35:55,360 and other things. But I think that Shopify is 705 00:35:55,360 --> 00:35:59,160 second place with online retail. I think it's the 2nd place 706 00:35:59,160 --> 00:36:01,760 company to be. I'm a little more concerned 707 00:36:01,760 --> 00:36:04,760 about this quarter with Shopify. We've heard from Amazon that 708 00:36:04,760 --> 00:36:07,600 people are trading down from expensive items to cheaper ones 709 00:36:07,920 --> 00:36:10,880 and Shopify in many cases I think sells more expensive 710 00:36:10,880 --> 00:36:13,040 items, more unique ones. So I'm a little bit more 711 00:36:13,040 --> 00:36:16,080 concerned about Shopify, this earnings report, but I'm not 712 00:36:16,080 --> 00:36:17,920 concerned. Overall, I think the business is 713 00:36:17,920 --> 00:36:20,600 going to continue to do fine. Now moving on, we get to another 714 00:36:20,600 --> 00:36:23,120 very popular company, Robin Hood's reporting earnings 715 00:36:23,120 --> 00:36:26,440 Wednesday after market close and Robin Hood has been on A roll 716 00:36:26,440 --> 00:36:29,120 with new product development. They came out with their gold 717 00:36:29,120 --> 00:36:31,120 credit card. I think that that was a 718 00:36:31,120 --> 00:36:33,000 brilliant move. I think they implemented it 719 00:36:33,000 --> 00:36:35,080 really well. They advertised it and built it 720 00:36:35,080 --> 00:36:37,680 up really well. I would have no complaints as a 721 00:36:37,680 --> 00:36:40,240 shareholder of how they rolled out these new products. 722 00:36:40,520 --> 00:36:44,840 I also think that their Roth IRA and their brokerage matches are 723 00:36:44,840 --> 00:36:47,680 very smart. They're basically saying that if 724 00:36:47,680 --> 00:36:49,960 you put your money in Robin Hood, they're going to give you 725 00:36:49,960 --> 00:36:54,240 a little bonus, like a little 1% bonus or a 3% bonus on your 726 00:36:54,240 --> 00:36:55,720 money. And that's big. 727 00:36:55,720 --> 00:36:58,080 It entices a lot of people to move their money over to Robin 728 00:36:58,080 --> 00:37:00,720 Hood, and I do believe this earnings is going to be good. 729 00:37:00,720 --> 00:37:02,960 I don't think they're going to have strong financial 730 00:37:02,960 --> 00:37:05,880 performance because they're not at that phase of focusing on 731 00:37:05,880 --> 00:37:08,120 profitability. But I think what Robin Hood is 732 00:37:08,120 --> 00:37:11,960 going to have is strong user engagement and performance. 733 00:37:11,960 --> 00:37:14,760 They're going to have a lot of people using their platform, a 734 00:37:14,760 --> 00:37:17,560 lot of new people moving to their platform, a lot of people 735 00:37:17,560 --> 00:37:18,880 signing up for their credit card. 736 00:37:18,880 --> 00:37:21,680 They're going to have a lot of these specific performance 737 00:37:21,680 --> 00:37:24,240 indicators for the company that are all moving in the right 738 00:37:24,240 --> 00:37:26,200 direction. And I think that's going to give 739 00:37:26,320 --> 00:37:29,000 investors in Robin Hood increased confidence in the 740 00:37:29,000 --> 00:37:31,560 company. So as far as I can tell right 741 00:37:31,560 --> 00:37:34,840 now, Robin Hood's doing a wonderful job competing with the 742 00:37:34,840 --> 00:37:38,400 bigger brokerages, stealing customers from Fidelity and 743 00:37:38,400 --> 00:37:40,320 Schwab. And I think if they continue to 744 00:37:40,320 --> 00:37:43,880 execute this way, I see a lot of momentum moving towards this 745 00:37:43,880 --> 00:37:46,120 stock. So I feel very bullish about 746 00:37:46,120 --> 00:37:48,360 this quarter. Now after Robin Hood, we get to 747 00:37:48,360 --> 00:37:50,720 another company that I really like, which is Airbnb. 748 00:37:51,240 --> 00:37:54,000 This company has a lot of qualities of a compounder, it's 749 00:37:54,000 --> 00:37:56,640 capital light, it has huge network effects, it has organic 750 00:37:56,640 --> 00:37:59,560 revenue growth, It has a lot of things I find very attractive. 751 00:37:59,880 --> 00:38:03,680 And I have been very positive on Airbnb for a while. 752 00:38:03,840 --> 00:38:08,520 I view this company as a long term secular trend winner and I 753 00:38:08,520 --> 00:38:11,920 view the biggest advantage that Airbnb has as its long term 754 00:38:11,920 --> 00:38:15,000 network effects. So let me go ahead and just talk 755 00:38:15,000 --> 00:38:16,520 about those network effects for a while. 756 00:38:16,760 --> 00:38:20,160 When we look at Airbnb and we look at competitors like Expedia 757 00:38:20,160 --> 00:38:23,160 or whatever companies offer a similar service, you'll notice 758 00:38:23,160 --> 00:38:25,320 that Expedia's earnings are continually a little bit 759 00:38:25,320 --> 00:38:28,920 disappointing and Airbnb's earnings are usually good. 760 00:38:29,000 --> 00:38:31,840 They're usually growing faster than the competitors, which 761 00:38:31,840 --> 00:38:33,400 doesn't make sense to most people. 762 00:38:33,400 --> 00:38:35,640 When you look at that, you think, why can't the smaller 763 00:38:35,640 --> 00:38:38,280 companies take more market share from Airbnb? 764 00:38:38,800 --> 00:38:41,160 They offer more perks. They offer more gimmicks and 765 00:38:41,160 --> 00:38:43,480 freebies. Why can't they compete with 766 00:38:43,480 --> 00:38:46,200 Airbnb? And the truth is network 767 00:38:46,200 --> 00:38:48,760 effects. We see this with other large 768 00:38:48,760 --> 00:38:52,320 scale companies like Uber, and we've seen it historically with 769 00:38:52,320 --> 00:38:55,600 companies like Meta. Meta is one of the poster 770 00:38:55,600 --> 00:38:58,960 child's of network effects. Look at Facebook, there's many 771 00:38:58,960 --> 00:39:02,600 alternatives to Facebook. Early on, there was Google's 772 00:39:02,600 --> 00:39:05,120 social circle. Whatever it was, they were 773 00:39:05,120 --> 00:39:07,200 competing with meta and it didn't work out. 774 00:39:07,360 --> 00:39:10,360 There's a lot of competitors trying to take market share from 775 00:39:10,360 --> 00:39:14,640 Facebook, and they never could because everyone used Facebook, 776 00:39:14,640 --> 00:39:17,160 which caused everyone else to use Facebook. 777 00:39:17,400 --> 00:39:21,240 That is network effects, and we still see those with Airbnb. 778 00:39:22,080 --> 00:39:26,120 The way that everyone uses Airbnb is a reinforcing Moat of 779 00:39:26,120 --> 00:39:28,360 everyone else being forced to use Airbnb. 780 00:39:29,040 --> 00:39:31,880 So even though they do have a list of competitors, companies 781 00:39:31,880 --> 00:39:35,040 that are trying to edge away at their lead, I don't think 782 00:39:35,040 --> 00:39:37,640 they're going to be able to. I think Airbnb is going to 783 00:39:37,640 --> 00:39:41,600 continue to grow organically and have a continued dominant 784 00:39:41,600 --> 00:39:44,560 network effect mode. So when I look at this earnings, 785 00:39:45,000 --> 00:39:47,840 I don't know if this specific quarter will be great. 786 00:39:47,920 --> 00:39:49,920 My opinion is that I think it will do well. 787 00:39:50,240 --> 00:39:53,160 But I think what you're going to continue to see is Airbnb 788 00:39:53,280 --> 00:39:57,240 continue to protect its market share from competitors, continue 789 00:39:57,240 --> 00:40:01,040 to gain overall scale and size because it's already the 790 00:40:01,040 --> 00:40:04,480 commanding leader in this category and it's very difficult 791 00:40:04,480 --> 00:40:08,120 to uproot and disrupt the current leader with an industry 792 00:40:08,120 --> 00:40:10,040 that has this huge of network effects. 793 00:40:10,120 --> 00:40:13,800 Now after Airbnb, we also have another stock reporting earnings 794 00:40:13,800 --> 00:40:18,440 after market close on Wednesday, AMC, the Meme stock itself. 795 00:40:18,920 --> 00:40:21,240 I thought it would be fun to just check up on this one and 796 00:40:21,560 --> 00:40:23,720 I'll be honest, I have not looked at this stock or the 797 00:40:23,720 --> 00:40:25,800 fundamentals of it in a very long time. 798 00:40:26,160 --> 00:40:28,600 So I thought it would be fun to just look at it together to see 799 00:40:28,600 --> 00:40:31,360 what we're looking at here and what to expect from AMC. 800 00:40:32,040 --> 00:40:36,120 We'll see if any of the the apes as they call themselves are 801 00:40:36,120 --> 00:40:39,320 still holding on to this stock. We can take a look at the stock 802 00:40:39,320 --> 00:40:44,640 price here, down 45% year to date, not off to a great start, 803 00:40:45,200 --> 00:40:46,520 right. That's a a little bit of a hit. 804 00:40:46,520 --> 00:40:49,160 It seems like the apes are having a a tough time this year, 805 00:40:49,880 --> 00:40:54,040 go out a year and it's down 94%. That's rough. 806 00:40:54,040 --> 00:41:00,160 If we zoom back five years, it's only down 97.77%, so not bad. 807 00:41:00,160 --> 00:41:02,520 You still have 3% of your invested capital. 808 00:41:02,880 --> 00:41:05,400 Not bad. It could have been worse. 809 00:41:05,600 --> 00:41:08,520 It could have gone to 0. So at least be grateful that you 810 00:41:08,520 --> 00:41:12,120 still have 3% of your money. Ultimately though, we can take a 811 00:41:12,120 --> 00:41:14,640 look at the financials and see if there's any upside in the 812 00:41:14,640 --> 00:41:18,040 stock. It doesn't look good at first 813 00:41:18,040 --> 00:41:20,320 glance. There's no PE ratio, which means 814 00:41:20,320 --> 00:41:24,040 the company isn't earning any earnings and the free cash flow 815 00:41:24,040 --> 00:41:26,880 yield is negative, which is never a great sign as well. 816 00:41:27,920 --> 00:41:30,640 We look at this and the revenue stagnant over the past couple of 817 00:41:30,640 --> 00:41:33,360 years. I personally think theaters are 818 00:41:33,360 --> 00:41:36,000 are are going to have a little bit of a comeback, but not much. 819 00:41:36,000 --> 00:41:39,440 I think that we're we're getting some good movies but streaming 820 00:41:39,440 --> 00:41:42,360 is just so convenient. It's it's difficult to go to a 821 00:41:42,360 --> 00:41:46,040 theater and pay like 50 bucks to see a movie when you can just 822 00:41:46,040 --> 00:41:49,000 wait a couple months and have it come out on your big TV at home 823 00:41:49,120 --> 00:41:52,200 and much, much cheaper. So a lot of people are still 824 00:41:52,200 --> 00:41:54,920 waiting for big movies to come out on streaming. 825 00:41:55,520 --> 00:41:58,280 For me personally, the movies that I see in person are either 826 00:41:58,280 --> 00:42:01,320 ones that I go to see with my kids or they're ones like a dune 827 00:42:01,320 --> 00:42:04,800 where they're so big and epic I have to experience it in IMAX. 828 00:42:05,040 --> 00:42:08,040 But other than that, a lot of the movies I see are ones that 829 00:42:08,040 --> 00:42:12,160 I'm seeing at home. The free cash flow is negative, 830 00:42:12,160 --> 00:42:15,120 but I will say it's moving in the right direction. 831 00:42:15,520 --> 00:42:19,320 Maybe in another two or three years it can become positive. 832 00:42:19,320 --> 00:42:20,760 Overall, they can be making money. 833 00:42:20,760 --> 00:42:22,960 So there is something to look up to there. 834 00:42:23,880 --> 00:42:27,360 Overall, this is the tale, another tale and a long list of 835 00:42:27,360 --> 00:42:30,800 tales of how meme stocks eventually end. 836 00:42:31,560 --> 00:42:35,240 The market is a voting machine in the short term. 837 00:42:35,720 --> 00:42:38,440 We had the portion of it that was driven by votes. 838 00:42:38,880 --> 00:42:41,360 People voted right there. They're buying it because they 839 00:42:41,360 --> 00:42:43,960 wanted to be a part of something, a part of a movement, 840 00:42:43,960 --> 00:42:46,120 a part of something that was bigger than themselves. 841 00:42:46,240 --> 00:42:48,760 And this is normal. With investments, investors find 842 00:42:48,760 --> 00:42:51,880 comfort in being invested along with other investors. 843 00:42:52,160 --> 00:42:55,040 So when you have that social proofing, when you have other 844 00:42:55,040 --> 00:42:58,800 investors saying buy, buy, buy on social media, it makes you 845 00:42:58,800 --> 00:43:01,840 feel safer. Buying the same thing, even when 846 00:43:01,840 --> 00:43:05,320 buying it, is not supported by the fundamentals and is a very 847 00:43:05,320 --> 00:43:07,680 dangerous thing to buy from this point. 848 00:43:07,680 --> 00:43:11,680 The stock of course had its epic collapse and it's getting closer 849 00:43:11,680 --> 00:43:16,480 and closer to its intrinsic value as overtime stocks go from 850 00:43:16,480 --> 00:43:18,680 the voting machine to the weighing machine. 851 00:43:18,960 --> 00:43:20,960 Now that's going to be it for this earnings season. 852 00:43:20,960 --> 00:43:23,160 If you like this type of content, would like to see more, 853 00:43:23,400 --> 00:43:25,760 you can check out the Patreon. It comes with a free trial. 854 00:43:25,760 --> 00:43:28,360 It's money back guaranteed. I think you'll really like it, 855 00:43:28,360 --> 00:43:31,200 and it also gives you access to qualtrum.com, which is the 856 00:43:31,200 --> 00:43:33,720 analysis tool I use. Other than that, I'll see you in 857 00:43:33,720 --> 00:43:34,280 the next one.