everyone would love to have a monster dividend portfolio, one
that spits out huge dividends day after day thousands and
thousands of dollars a portfolio of businesses that produces so
much income every single week, every month that you can live
off of it, it completely subsidizes and replaces your
active income dividends after all our passive income, it's
money that you make without having to lift a finger, you
have to do the initial upfront work, you have to buy the
investment, but once you've done that yourself, Set you earn
passive income via dividend. This is not only what my entire
portfolio centered around, but it's also my ultimate goal to
get to the point where I'm no longer reliant on active work.
We're working is an opportunity. It's a choice.
It's not a requirement. That is the goal of passive
income. Now, I've been building this
portfolio publicly for some time.
I do it under public scrutiny, you can see the changes that I
make. You can see the buys that I do
and you can see the cells that I make, but in this episode So I'd
like to do something a bit different than show you just the
most recent trades. I'm making.
I'd rather show you the lessons that I've learned in building a
monster dividend portfolio over the past four years.
I want to go over what I think. Are the biggest mistakes that
divot investors are making what I think are the biggest things
they should be focusing on and how I believe investors today
can get to their goals as fast as possible.
So this is going to be a good one.
We're going to be going over five years of investing and
summarizing my best lessons. In this episode.
Now of course we have some other news to get to as well.
Mark Zuckerberg is on the Move meta has released their initial
plans to compete with Twitter. So metas doing what they do
historically which is copy, other social media competitors.
And they do this very effectively.
I'll be giving you my opinion on this Twitter copycat and on the
subject of meta. And Mark Zuckerberg, we get a
see in detail. What Mark Zuckerberg, initial
response was of the Vision Pro. I have a lot of thoughts.
So we'll be going into this as well, and then it's Friday, the
day where we turn to tick, tock to get the best tips on finance
and investing. And this tip is specifically on
house hacking. This is the all-time best house
hacking hack ever. So, we'll be looking at this and
I'll be giving my reaction here at the end of this episode.
So, as always, if you like this type of content, if you like the
transparency, we have hair. Make sure to thumbs up the
video. Subscribe to the channel.
Now, let's go ahead and Jump Right In first of all, we'll
start off with building a monster dividend portfolio.
This is something that I've been trying to work on for 5 years
now. I've been focusing my portfolio
around building up, passive income that's Remain the
ultimate end goal of this portfolio and while doing that
over the past five years and having the opportunity to run a
YouTube channel and spending an incredible amount of time
studying investing, I've been able to see a lot of things that
work at a lot of things that don't work when trying to do
this. So what I hope to do is is
basically share everything that I've learned along the way.
I want to start off with the basics when we're building a
monster dividend portfolio. There's three basic ways that
this works, three basic ways, that it compounds.
And I've gone over this in previous video so I'll just go
over it. Briefly, first of all, we buy
into companies that pay a dividend.
This is the first way that we grow a dividend portfolio and
along with number one here, I would say that an important step
is having a consistent income to begin with.
You can't leap over to passive income without having Having an
active income. So you need to have a stable
job. You need to have a stable income
and you need to have your budgeting down.
So you have money every single week to add to your portfolio.
But once you have that money, you need to start putting it to
work and put it to work as soon. And as frequent as you can step,
one by companies that pay a dividend that pays you the
initial dividend yield. The initial dividend yield is
what gets the ball rolling. You have money flowing into your
account. For example, in this Folio I've
earned a total of twenty one thousand five hundred and
ninety-four. Dollars in dividends.
These have been growing the entire time that I've been
investing. This number always goes up, it
never goes down. Companies are always paying me?
Dividends step two is pretty basic.
We reinvest the dividend once a company pays you out.
Cash flow. Use it to buy other companies
that you consider to be high return opportunities.
So as you have money, flowing in every single week, and every
month in dividend payments, look through your portfolio.
Oh and see which ones are offering the best opportunity at
a given time. My way of doing this is I use
something called the dip finder. It's a tool that I've built.
We're basically just shows which companies are in a dip at a
given time. I can select different time.
Metrics are like last month, and I can see which companies are
doing really well, and which companies are struggling a bit.
These are all of my core Holdings.
So, when I select, the last month, I can see right here that
Canadian Pacific, MasterCard and Vici are in the red.
They've gone down over The past 30 days, SP Global on the other
hand has gone on a pretty good run.
Microsoft is doing great, apples doing great Costco's doing good,
Texas Roadhouse is doing good. So, these companies that are up
a lot over the past 30 days, I'm going to avoid.
I'll just let them continue to run and then I'll buy the
companies that I think are really good that have gone down
in value and guess what? Just a couple days ago, I bought
more VG. I bought more because it's
trading down and I think it offers Great Value.
This is me following know, Prior to taking the dividends that I'm
paid. And reinvesting it into the best
high return opportunity. Then we have number three.
The company growing the dividend over time.
So this changes the criteria in which we choose companies to
invest in, we don't only want companies that pay a dividend.
We want companies that pay a growing dividend and by growing,
I mean growing beyond the rate of inflation, we can take a
Verizon as a counter example here.
This company does pay a dividend and the dividend is technically
growing. It's been Rolling by two point
three, nine percent. But unfortunately inflation has
been above two point three, nine percent.
Even if we were really charitable and said that
inflation was only two percent, this dividend is flat, it's
really not growing at all. The dividend payment adjusted
for inflation is the exact same today than it was a decade ago.
So while Verizon pays a dividend it does not pay a growing
dividend. On the other hand, every single
company within my portfolio, every one of them, pays not only
a steady dividend, they pay a a growing dividend.
I can take spe Global. For example, SP Global pays a
consistent growing dividend and it has done.
So for years and the dividend is growing far above the rate of
inflation at 12%. MasterCard pays a very
consistent dividend and it's growing at a very rapid rate 25%
per year. And like I said, this is the
same for every company into it Apple, Microsoft Vici, Texas,
Roadhouse, Costco, so on and so forth.
All of them pay consistent and growing dividends and that step
3 and these are the three basic steps of building a monster.
Dividend portfolio. You buy companies that pay a
dividend, you reinvest that money from the dividends back
into companies that pay dividends and it grows your
dividend income. And then importantly, you try to
focus on companies that not only pay a consistent dividend, but
they pay a growing dividend far above the rate of inflation.
All of these three together are really powerful.
The compounding effect they have is almost magical.
In fact I'm reading this book that's an in-depth study on
Buffett's life called the snowball.
And it extensively goes through his entire history.
And one of the things that points out is that he's
basically a dividend growth investor throughout his entire
life, especially his early life, he was always accumulating
stakes in companies that paid him excess cash flow Buffett,
use that excess cash flow to buy more companies that paid growing
amounts of excess cash flow. That is literally the snowball.
It's Buffett's investing strategy.
The reason that Berkshire doesn't pay a And is because
Buffett is playing the role of the investor reinvesting.
The cash flows but otherwise he's running the company in the
exact same way as a dividend growth investor.
Buying good companies that pay excess cash reinvesting that
cash to buy more companies and focusing on companies that can
really grow that cash pile over time.
The magical effect of this is a strong compounding Snowball
Effect. Now that seems simple enough,
but even given those instructions, what I notice is
Is a lot of dividend investors. Make some very critical errors
and that's where I want to go over where dividend investors
are failing where they're falling short.
And when I give these critiques a lot of these criticisms are
basically criticizing myself. Five years ago, I was making a
lot of these same mistakes that I've since corrected.
So let me go ahead and go through them.
The first thing that I'd say that dividend investors make a
mistake on is the focus on starting yield.
The starting yield is what the company's yield is.
Right now, today, that is the main focus of a lot of dividend
investors. They seek companies that will
instantly give them a high starting yield, and a lot of
companies have a high starting yield are not the best
companies. We can look at a lot of
different examples here, we can look at Verizon again.
As an example of this, this is a company that Learners investors
in with a very high, starting dividend yield, a yield of 7.3
one percent. So you may look at this and
think, wow, I buy $100 of this and I get 7 Dollars and 31 cents
back every single year. That's pretty good.
That's a much higher yield than then a company like MasterCard.
So Verizon is the better bet. I'm getting more cash flow
through owning this company the temptation to buy into companies
with these very Hefty starting yields, without looking at the
fundamental drivers of the company leads to lots of under
performance. Verizon has been a horrible
company to own going down, 28 percent over the past five years
in the past. Ten years, even with dividends
this companies, basically given no returns.
So that's seven percent juicy starting yield.
You're getting has given you absolutely no returns over the
past 10 years as the rest of the market has raised up.
And why is that well for one, Verizon really hasn't grown
Revenue that much in the past. 10 years.
The cash flows look very similar over the past 20 years.
They've been diluting shareholders as well to finance
their operations and they have a breathtaking amount of debt.
The amount of debt is Is literally over 100 billion
dollars. So this giant Telecom company,
that's luring investors in is really nothing more than a value
trap. The company has caught investors
and kept them there in a company that's producing zero returns
over extended periods of time. And this isn't the only one to
do this. We have Investments like AT&T,
this is one investment that I was in.
I barely eked out a return on this company by simply luckily
timing the buy and sell of it. But overall 18, he was not an
attractive investment. What really lured me into AT&T
was the same thing that lured. Many other investors into this
company. The starting dividend yield of
nearly seven percent the high very high starting yield that
was so it's just so tempting to buy into companies where you
think you're going to get paid back that much every single
year, what it really turns out to be where you're waiting
around hoping that the company will at least maintain its value
while it pays out this cash flow and the case of Verizon and AT&T
AT&T the company's fundamentals are very poor.
The competitive Dynamics are very poor, the profitability,
the balance sheet are very poor, and the Investments, as a
result, stumble AT&T is down 41 percent over the past decade.
And they recently just slash their dividend to half of what
it used to be. Making it.
So that even the people that were in this company, for the
dividend are not getting their payday anymore.
So the number one mistake here is crucial to avoid for every
investor don't focus on. The starting yield if your major
focus is finding companies with high starting yields, most of
those companies are Pathways their roads down to companies
that are many cases value traps. In fact, I would argue that the
higher the starting yield, the more likely the company is to
become a value trap. It's not the case in every
company. Some companies do have that
magical mix of a high starting yield while still being an
attractive Growth Company. But in most cases, High starting
yields mean value trap. Soooo.
Ironically, one of the things that I get criticized the most
on my channel is that I'm a dividend investor that focuses,
too much on companies with low. Starting yields, I recently
bought into SP Global, SP Global only has a point. 95 percent
starting yield, very low, this isn't any AT&T or Verizon?
I also bought into Master card. MasterCard, has even a lower
starting yield Point 61 percent. No, not all companies that I buy
have very low. Starting yields, some of them
are a bit higher in the restaurant category.
Roadhouse was a company that I bought the at the time, I was
buying, it had a two point, five percent starting dividend yield.
This one has a decent yield but it's still no Verizon or AT&T
but either way a lot of my companies have a lower starting
yields than most dividend investors and this is done
intentionally. The companies that I'm focusing
on are not value traps, they're not companies that have flat
risky or low growth dividends they are companies that have the
economic capability to grow their dividends at very Rapid
rates. While Texas, Roadhouse only has
a starting dividend. Yield of 2%, that's nowhere.
Close to Verizon or AT&T. It has something different than
Verizon or AT&T the dividends growing.
And it's growing at a very, very fast rate back in. 2011, the
dividend was only eight pennies per share, eight cents per
share. And then, the most recent
dividend, 10 years later is 55 cents per share, it's compounded
at an annualized rate of 16.4% per year.
So the dividends for five times bigger than it was a decade ago,
four or five times bigger. That means that the investors
that bought 10 years ago. Now have a yield on cost of over
eight percent higher than the Verizon or AT&T dividend.
And while they've had that incredible dividend growth four
or five Xing their dividend payment, they've also had
massive capital appreciation 347 percent so investors in Texas
Roadhouse are sitting much more pretty than the investors and
Xander AT&T the ones that were suckered in to the high starting
yields have flat dividend payments or ones that are being
cut companies that haven't made any gains.
And they overall have total returns that are negative.
The investors it instead focused on companies that can grow their
dividend. Payment have a dividend payment,
that's four or five times what it was 10 years ago and gains
and capital appreciation that are 350%.
The evidence routinely favors companies that focus on dividend
growth, not companies that Focus.
Sun-hi starting yields, we can take MasterCard as another
example. This is one that a lot of
dividend investors will criticized for having a very low
starting yield only Point 61 percent, it seems insignificant
at first look. But when you consider the actual
growth of the dividend over time, it puts things into
context back in 2011. The dividend payment was two
pennies per share over the past five years, like, Texas
Roadhouse. They've been growing the
dividend at around 18 percent per year when you Compound.
Something even at a low starting base at 20% per year.
The growth is astronomical. That compounding turns a very
low, starting yield into a very high dividend payment.
In a short amount of time going from two pennies to half a
dollar in 10 years. What this reminds me of is the
experiments with Children of delayed gratification whether
they can wait a minute to get a marshmallow or two marshmallows,
a couple minutes later, the kids that were willing to delay
gratification a little bit longer had overall better.
Burns. I think as investors we get
tested in the same way, are you really needing that high
starting yield right now today? Or can you delay that
gratification a little bit invest in, very good companies,
will 5x your dividend payment, over the next 10 years.
Give you capital appreciation and a boosted amount of income
at the same time the way Ted judge.
If a company is able to pay you a growing dividend over.
The next decade is all about the financials of the company.
If you use qual trim.com as an example, to look at a company,
we have Texas here, Road House. How do I judge of Texas
Roadhouse can pay me a growing dividend over time?
Well, there's a couple important things I can.
Look at first of all, is the growth profile of the company.
We look at the revenue. Growth is the revenue growing on
a consistent basis above the rate of inflation.
In the case of Texas Roadhouse, that is a yes and it's growing
organically not through Acquisitions.
So it's growing every single year year over year at twelve
point five six percent without doing major acquisitions.
Next thing that we look at is the free cash flow.
Growth of the company in the case of Texas Roadhouse, is this
growing on a semi consistent basis?
Yes, it is. In fact, it's growing at a very
fast speed 15 percent over the past 10 years, the cash flows
are the initial thing. The company has to pay the
dividend. So if the free cash flow is not
growing and the dividend is growing, that just means that
the company's paying you a higher percentage of their free
cash flow and eventually, they cannot maintain that they'll
have to cut it like they did with it.
Until wild Texas Roadhouse is growing the free cash flow over
time leading to a fast. Growing dividend companies like
Intel had cash flows that were shrinking.
They were flat for a long period of time.
Then they went down and so did the dividend the dividend
follows the cash flows. If the cash flows grow very
fast, the dividend will grow fast.
If the cash flows shrink, the dividend will shrink.
So back to Texas Roadhouse. We look at the cash flows.
We look at the net income growth.
We look at the earnings per share growth.
This is a good growth profile. It gives me confidence that this
company has a long history. They have the recipe of growth,
the management has been able to do this on a consistent basis
and aside from a lot of things, you hair past results in
specific, companies is oftentimes indicated of of
future results, especially if the same situation and
environment exists. Nothing has really changed
competitively in terms of Texas Roadhouse.
So I expect similar levels of growth in the future.
And then finally, the balance sheet is a huge indicator of a
country's. Company's ability to pay future
dividends. In the case of Texas Roadhouse,
we can take a look at their cash and debt.
They have more cash than debt right now.
In fact, last quarter, Texas Roadhouse paid off the remainder
of all of their long-term debt. So they have zero long-term
debt. The only thing they have in
terms of liabilities is their Capital leases which are
basically rental payments on their restaurants, but this is
it, they have a lot of cash, they have no long-term debt
which gives them an incredible amount of The in their Capital
allocation so not only do I have incredible confidence that this
company can continue to pay a dividend.
I have lots of confidence that they can grow at a continually
attractive rate and this all comes down to the financials and
economics of a company invest in companies that are paying a
dividend that have growing revenues cash flows, net income
earnings per share companies that have declining share count
and strong balance sheets. Those are ones that will be able
to continually pay growing dividends in the future.
So I believe David investors would be Well, served to stop
focusing, their efforts so much on high starting guilds instead,
focus on companies that have everything in place to have,
strong organic dividend growth for a long period of time in the
future companies that can do this.
Have great economics, good competitive Dynamics companies
that have very strong balance sheets.
These are ones that lead to Alpha 2 out performance.
These are the strong dividend companies that pay year after
year, after year, the ones that have the high starting yields,
the ones that are value traps, they Often lead investors down
the worst route where they're stuck in a company where the
only reason they own, it is a dividend and they eventually
capitulate and end up selling it.
We've all been in those companies at one point or
another, so it's time to focus on better companies.
Now, the next big mistake that I see a lot of different investors
making is over diversification. Now diversification is not all
bad, I don't think you should be all inning a single company.
That is overall, very risky. There's two different types of
basic risks in the stock market. There's Specific risk.
What are specific to a company, meaning the management team.
The chance, the company does fraud the chance to company,
gets out competed by a different company.
Those are all specific risks to a specific company, but then
there's systemic risk. Systematic risk is the risk of
the overall World economy. Things like pandemics things,
like Wars things, like famine. These are systemic risks that we
really can't diversify away from so diversification.
Is an opportunity for us to lower the amount of risk of
specific risks, specific to any singular company, but the data
shows empirically that. Once you have over seven to 10
different companies, the specific risk is basically
Diversified away to the max extent.
It's mostly gone at that point and Beyond then layering on more
and more companies can companies, 15 companies, 20
companies, 25, 30, 35 40 45, you're getting no more.
If it's of reduced risk at that point all you're doing is
cluttering a portfolio. Full of tons of different
companies without the benefit of any measurable risk reduction.
Not only are you not really getting any additional benefit
of reducing specific risk. But you're also getting the
downside of having an overly complex portfolio of a group of
companies that you can't possibly pay attention to
extensively. So you're making individual
Investments but you're spreading them out across so many
companies that you really can't keep up.
All of them in my portfolio, I've tried to mimic it where I'm
getting the most bang for my buck.
I have ten core positions SP Global MasterCard into it
Microsoft and Apple. That's 5vg, Costco Texas,
Roadhouse Canadian Pacific and Union Pacific right at ten core
positions. I'm getting the maximum benefit
of reducing specific risk. I'm right in that nice.
Part of the curve there, but I also don't have so many
companies that I can't possibly keep track of them I can.
Keep track of 10 companies so I do believe in being Diversified
but not being over Diversified at a lot of portfolios, I see
from dividend vestries, our portfolios with 50 different
companies. So many companies that half the
time. I think these investors can't
even remember the amount of companies they have in their
portfolios. If you're doing that, you're
just lazily investing putting money into dozens and dozens of
companies without properly doing research on them.
And then finally, the last thing that I see a lot of dividend
investors doing that I think is Mistake is investing into bad
Industries, bad companies and bad Industries.
Now this can come off as a very harsh.
Criticism me saying that these are bad companies but this is
just my opinion. I do think a lot of the
Investments That dividend investors by are in companies
that are a lot of Industrials their Capital intensive.
They're overly complex, a lot of these industries are incredibly
difficult to operate it and I've made this same mistake before.
So when I'm criticizing other people's Investments, I'm
criticizing. My previous Investments as well.
I used to own three hundred dollars of Boeing.
It was one of my first Investments, I viewed the
company as this big duopoly with Airbus, it was just one of the
big companies that seemed like, it was unbeatable to me.
But what I quickly learned is, that Boeing is an incredibly
complex company. It has an entire chain of events
that has to happen. Huge manufacturing processes
tons of quality assurance tons of liability potential lawsuits.
Long-term contracts, the amount of complexity in this business
Is incredible running, it would be trying to run a small
country. So, Boeing's, one of these
companies, it's incredibly complex difficult to understand
very Capital intensive, and has tons of various risk factors
that investors can't properly put into their analysis.
There's no way you can accurately quantify the amount
of risk in this company. And I see the same thing with a
lot of other industries that I considered a not be the greatest
Industries to invest in Intel being an example of how
unpredictable it is to be a chip maker and videos leading the
race. Right now and videos what's
drawing everybody's attention. But in tell what's King not too
long ago they controlled the world with chips and now how far
they've fallen and I see so many investors getting drawn into
these companies 3M. Another company having a high
dividend yield that's been one. That's so far, has been a value
trap for a long period of time down nine percent over the past
10 years. The companies that I've been
gravitating to and I've been trying to urge investors to
gravitate to are ones that are more simple and have it.
An onyx that are better for longer periods of time.
SP Global shares, a monopoly between them and Moody's.
Both companies benefit mutually, I've been bullish on Microsoft
for a long period of time. A company that has great
competitive Dynamics by virtue of its massive, monopolistic
mode, even Costco's a company that seemingly more expensive,
but it's more predictable and it has a more simple business model
that's easier to operate and easier to execute.
It's much easier to open up a new warehouse and sell some
memberships than it is to try to.
Create the next big aircraft. So my final piece of advice for
dividend investors is to focus on industries that are overall.
Good Industries, where everybody's winning in that
industry where you're fishing in a good Pond.
Not trying to pick winners. Among the losers focus on
companies that aren't Capital intensive or overly complex ones
that are simple and predictable. If we do this I think we'll have
better returns overall and I think that dividend investing
will be looked at more favorably.
Overall, it won't be so associated with buying Boeing
complex companies that are many cases value traps.
This is what I've been doing with my portfolio.
It's the strategy that I've been merging over to and I think it
more closely mimics and aligns with what Warren Buffett did his
entire career, especially his early career focusing.
On companies that not only paid him cash loads but they had
strong organic growth profiles. That would pay him growing cash
flows in the future and then reinvesting those cash flows
into other good opportunities. So that's my thoughts overall on
this issue and my biggest Advice of what I've learned over the
past five years. Let me know what you think.
If you disagree. That's fine.
But let me know, either way, I'd be happy to discuss in the
comments. Now, moving on we have some big
news from Mark Zuckerberg, making some big moves.
He's now competing directly with Twitter meta, has unveiled two
employees, a standalone app at plans to launch through
Instagram to compete with Twitter.
Now it's interesting wordage. There they say it's a standalone
app but they're going to launch it through Instagram.
We'll get to what That means in a minute here.
They say that this was revealed by Chris Cox, the chief product
officer Cox told employees that meta has heard from creators and
public figures. Who want a quote sanely run
platform. The people that I think want a
sale iRun platform are a lot of. I think politicians that don't
like the Elan is running Twitter, they don't like that.
He's running the platform. It's a highly political thing.
So people have very, very strong views on Ilan.
Some people don't like them if they don't like Him.
They don't want to support the platform so they want an
alternative. Those people are the one that
are saying that elon's, not saying he's not running the
company saying lie, so they want an alternative and met as their
to the rescue. The company is in talks to have
people such as Oprah Winfrey, and Dali Lama commit to using
the app. Adding that meta hopes to launch
it. Quote as soon as we can, and the
app is internally codenamed, project 92, a person.
Familiar with the software said, why they named it that I have no
clue, it sounds kind of Cool. But we don't know anything about
the name there. So we don't have much details on
this. But let me make a very early
judgment here based on the history that I've studied with
meta. This is what they're best at.
This is right in their wheelhouse.
This is what they consider to be their super power.
They can take different features from different social media,
they can integrate it or rebuild it.
And then they can push major usage and engagement on.
It Mehta has proven their ability to do this over and over
and over again. Reels and stories were features
that they took from different platforms.
They integrated it onto an existing platform, to great
success. But this is a bit of a more
aggressive challenge. They're not only trying to just
integrate a new feature. They're trying to completely
replicate Twitter and do it better and build it to a
successful platform. So this is what they're good at,
but I think this is a bit more aggressive.
I think it's a bit more risky, but I'm still going to side on
the side of meta. I think they'll be able to pull
this off. I think they'll be able to push
Major engagement and usage on the Twitter competitor.
And the reason being is that they've proven again, that
they're incredibly good at this, what they're doing is they're
launching it through Instagram. So what I assume they're going
to be doing with this, is there going to be using your
information? You've already given them on
Instagram to Auto populate accounts on this new Twitter,
competitor. Now that you have your account
already made you already have the onboarding process done.
All you have to do is just log in and open it up.
Up. You have your Twitter copy
account? Some meta is removing all the
friction by using all the information.
They already have to bridge. The gap between Instagram and
the Twitter competitor if they did it that way, that would be a
brilliant move by meta and make the chances of success even
greater for this. So we don't know if this is
going to be ultimately successful so far, but if I was
a meta investor I would be pretty bullish on this.
I do think it's something that's going to be a likely success.
Now, on the same subject of meta and Mark Zuckerberg We get to
see his initial first public reaction to the Apple Vision Pro
headset. A little bit of background
between Mark Zuckerberg and apple.
Mark Zuckerberg is very calm, and he's very level-headed in
the way that he talks about Apple and the way that he talks
about Tim Cook, but I believe strongly the underneath, this
very calm demeanor, there is a certain hatred that he has for
Apple. I don't think that he only
dislikes the company and has a friendly competition with him.
I think he has utter disdain for them.
Apple has Been bullying meta mercilessly.
Doing add changes doing things that hurt his business and take
billions of dollars out of his company, his employees and his
wallet. And he doesn't like that.
Mark Zuckerberg is incredibly competitive, he shown that in
both his personal life and his business life.
He doesn't like being beholden to Apple in order to circumvent
apple and their App Store policies.
Mark Zuckerberg has been looking for ways to go around the
hardware Monopoly that Apple has and his way of doing that is not
The phone, not through the laptop but through the headset
he believes that this is the next generation of computing.
He's come out with the Oculus. He's made massive investments
into this category and hopes to have his own physical platform
where he no longer has to operate through Apple's App
Store Monopoly, but then we have apple releasing The Vision Pro
in my estimation. I think that Apple did what they
do best. They came out with a premium
item as higher. Resolution lower latency has
very good specs. It's very good.
Build quality and overall seems like a highly polished device.
It comes in at a more expensive price point and that's the major
Focus. But here we have the
head-to-head battle between meta and Oculus in all of his various
headsets and the Apple Vision Pro.
Here's what Zuckerberg said, in his initial reaction, seeing the
Vision Pro release a few high-level thoughts.
I mean first you know, I do think that this is A certain
level of validation for the category, right?
Where, you know, we were the primary folks out there before
saying hey, I think that this virtual reality augmented
reality mixed reality. This is going to be a big part
of the next Computing platform. I think having Apple come in and
share that vision We'll make a lot of people who are fans of
their products really consider that.
And then, the first one that he makes is one of product and
category validation by Apple entering, in to the a, our VR
headset game. They have thus validated that
category of product is being a valid product.
And that logic seems simple. I think this is a very good.
Go to reaction by Mark Zuckerberg.
The problem is, this is the reaction that literally, every
CEO says, when Apple steps into their category and competes
directly with them, take, for example, when Apple stepped into
fitness, they offer a fitness service called Fitness Plus,
Peloton, was already in this game.
They're the biggest ones by far in this category.
The Peloton CEO was one of optimism saying that it's quote,
quite a legitimization of Fitness content.
That is the big headline their apple entering into the category
is a good thing. It Is this Fitness content and
its overall going to lead to Greater sales for Peloton, but
the stock price since this was posted for Peloton is down
around 70% and there's no evidence whatsoever that Apple
entering in to Fitness. Content has helped Peloton
whatsoever. All it's done, is created a
massive competitor to something that they uniquely owned,
companies should be able to legitimize their own products
without having the biggest, most powerful company in the world
compete directly with them. When Apple Competed with Amazon
with the fire phone. It didn't help them and it
certainly didn't help the zoom when they competed with
Microsoft when Apple steps in and competes headfirst with a
separate company saying it. Legitimizes a category is a nice
thing to say but I don't see a lot of evidence that that's the
case. The next thing that he moves on
to is the big price point, really consider that.
And then of course the thirty five hundred dollar price you
know on the one hand to get it forward.
All the If they're trying to pack in there on the other hand,
a lot of people aren't going to find that to be affordable.
Apples headset. At $3500 is unaffordable way too
expensive for most people. This reminds me a little bit of
Steve Ballmer being asked about the iPhone.
They let me ask you about the iPhone and the Zune.
If I may Zoom was getting some traction, then Steve Jobs goes
to macworld and he pulls out this iPhone.
What was your first reaction when you saw that $500?
The first thing that comes out of his mouth and criticism of
Apple being a legitimate competitor to Microsoft was five
hundred dollars at the time. That was extremely expensive for
phone far more expensive than any competitor or any existing
phone on the market. And apple was likewise scoffed
at and mocked for being way too expensive and far Out Of Reach
of other people. Now, Mark Zuckerberg doesn't say
this with as mocking of a tone but the concern is very similar.
So I think there's a chance that that them Again, actually
increases demand for the overall space.
That Quest 3 is actually the primary beneficiary of that.
Because a lot of the people who might say, Hey, you know, this,
like I'm going to give another consideration to this or, you
know, now I understand maybe what mixed reality is more.
An inquest 3 is the best one on the market that I can that I can
afford and it's great. Also, right?
It's, I think that's and, you know, in our own way.
I think we're in there. A lot of features that we have
where we We're leading on, maybe in a way, the Vision Pro will
create more demand for meta, but I don't typically see that the
case throughout history, when people want an Apple device,
they don't say you, I want an iPad but the iPads a little too
expensive. So I'm going to go get a Kindle.
I'm going to go get, I'm gonna go get a Fire tablet.
That's not often the case. There's always a secondary
Market, maybe that will happen in some cases.
But in most cases, when real users want to pay for a real
device, they get the That they want, they have different ways
of financing different ways of saving different ways of paying
for it. If someone really wants to get
an iPhone, they're going to find a way to get it.
And then obviously over time, the companies are just focused
on somewhat different things, right?
Apple has always, you know, I think focused on building really
kind of high-end things, whereas our Focus has been on it's just
we've a more democratic ethos. We want to build things that are
Are accessible to a wider. Number of people, we've sold
tens of millions of quest devices.
My understanding just based on rumors I don't have any special
knowledge on this is that apple is building about 1 million of
their of their device, right? So the next thing he brings up
is one of accessibility. His company is building stuff.
That's accessible by many, many people, it's not priced out of
them. This is another argument that
looking at the data, it falls flat.
He's painting apple as this company that only sells premium
devices to only a very small number of users apples.
And All base. Over the past seven years has
estimated Lee doubled from 1 billion installed devices to
over 2 billion installed devices.
If Apple's devices are so undemocratic.
And so inaccessible, then why do they have an installed base of
devices that exceeds 2 billion that doesn't stack up?
Obviously, lots of people are able to get apples devices.
Lots of people from various income levels, we kind of come
at it from different places. We're very focused on social
interaction, communication. Being more active rights as
Fitness, there's gaming, there are those things now whereas I
think a lot of the use cases that you saw in and apples
launch material were more around people sitting, you know, people
looking at screens which are great I think that you will
replace your laptop over time with with a with a headset.
But but I think in terms of kind of how the different use cases
that the companies are going after and they're there.
They're a bit different for for where we are right now.
This is another reaction that I think is a little soft.
I think it's a bit weak. He's trying to paint apples
devices, being antisocial and his devices being very, very
social. But when we looked at the actual
presentation, there's not much distinction in terms of social
capability, Apple demonstrated, plenty of social apps with
FaceTime 3D videoing, looking at a wall of people and friends and
real time, there's lots of this type of thing of them, standing
up and being active as they're working, and a big thing.
To keep in mind is the hardware and device.
Capability is just the product that's able to launch the apps.
The app Builders will get into the Vision Pro now and build,
many social apps, I anticipate that on the Vision Pro on
Apple's devices, there will be just as many social capabilities
as there are on metas. Now overall, I like the fact
that Mark Zuckerberg will sit down and speak.
So candidly about his reaction and about his goals and
Ambitions. I think it's good that he's
competing with happel, but if I have to pick the overall, Or of,
who I think would dominate this Market.
My vote still stands with apple. I think they'll have much bigger
market, share of the overall, economics of this device
category, similar with how they do with the tablet, with the
MacBook, with the phone with the are pods with every other
device, category that they're in.
I see no big distinction with headsets now.
Finally, we get to the most important part of the show, this
is where we get our best tips, our best advice financially,
this is what on the best house hacking tip ever, which comes
He's at a very important time because right now it's difficult
to get into homes. They're very expensive.
This person right here, has a solution for it.
People are always complaining about how expensive housing as
they say. It's so unaffordable, they can't
afford it. 20% down is just as too much for them.
I think they're just making excuses in my opinion, but let
me tell you what, how much is a 20% down payment on a 1 million
dollar house? Two hundred thousand dollars,
two hundred thousand. Okay, let me ask you this.
How many kidneys do you have to? Alright, that caught me off
guard. They're a little bit.
He went from, what is the down payment on a million-dollar
home? A 20% down payment?
And now we're talking about, I think I heard kidneys.
How many kidneys do you have? We went from house hacking to
now human biology. Let's go ahead and keep
listening here. I think I know what direction
he's going but let's let's take a look now.
How many kids? Is, does the average person need
to survive? One.
How much do you think that you could sell a kidney for in the
black market today? 250 300 350 will say to you take
your kid and you sell it 200. I thought this is a house
hacking tip, not a human hacking tip.
He's saying that you can hock your kidney on the black market
for a quarter million. Now I have no way of verifying
this. I have not looked into the price
of a kidney maybe this is correct.
That's a lot of money. Two hundred fifty thousand
dollars but I'd still rather have my Kidneys and instead of
trying to do some type of illegal surgery.
But regardless let's just assume for a minute.
This is accurate information, fifty thousand dollars take that
50 thousand dollars, you put it in your pocket, you don't even
look at it. You take that two hundred
thousand dollars, you put it on a down payment on a 1 million
dollar house. You rent that house for three
years. Three years.
You make your money back you by your kidney back.
You reinsert it back into your body.
Now what now you have two kidneys and And you have a 1
million dollar asset. I don't know what to say, I
normally am critical of these type of tick-tocks.
I think that some of them are a little silly but this one's
pretty genius. I must admit you only have to
risk death twice by taking your kidney and selling it on the
black market. A surgery that I can't imagine
being done with the best doctors or surgeons, but then you also
have to reinsert it back into your body and reconnect it,
which I can't imagine as well as being a great surgery.
And by the way, I I think surgeries are somewhat expensive
so out of that 250,000 dollars. Some of it's probably going to
the surgeon or whoever's doing the surgery.
It seems like he may be leaving out a few details there but
there we have it, the most extreme house, hacking tip I've
ever heard. That's all for this episode.
Have a great weekend. I'll see you in the next one.