1 00:00:00,000 --> 00:00:02,900 This morning Bill Ackman went on to CNBC and he was asked about 2 00:00:02,900 --> 00:00:05,000 the stock market and what he thought stocks were going to go 3 00:00:05,000 --> 00:00:08,400 back up and he was asked about inflation, we had this 4 00:00:08,400 --> 00:00:14,800 conversation 12 months from now. No, do you think is a Realistic 5 00:00:14,800 --> 00:00:16,800 sense of what inflation could be in this country. 6 00:00:16,900 --> 00:00:19,000 Where is inflation going to be in 12 months? 7 00:00:19,000 --> 00:00:20,800 Well, in this episode, we'll get to Bill ackman's. 8 00:00:20,800 --> 00:00:23,900 Answer to this question where he thinks inflation is going to be. 9 00:00:24,000 --> 00:00:26,600 And when he thinks the stock market will finally start to go 10 00:00:26,600 --> 00:00:29,200 back up again, but we also have some big news in this episode 11 00:00:29,200 --> 00:00:31,300 Church & Dwight. One of the new Holdings in my 12 00:00:31,300 --> 00:00:35,200 portfolio that I've been adding to is down a little bit today, 13 00:00:35,200 --> 00:00:39,000 it's down 4% on the day after they announced a new 14 00:00:39,000 --> 00:00:42,000 acquisition, they bought an acne treatment company, which is a 15 00:00:42,000 --> 00:00:43,800 maker of the product Mighty patch. 16 00:00:43,900 --> 00:00:45,800 I'm going to go through this and try to make sense of it. 17 00:00:45,800 --> 00:00:47,700 And then we also have news that Big Bad. 18 00:00:47,700 --> 00:00:50,500 Apple is added again, apples really? 19 00:00:50,500 --> 00:00:53,000 Just a bully. They bullied Facebook with their 20 00:00:53,000 --> 00:00:56,100 iOS privacy settings. They hurt a competitor and then 21 00:00:56,108 --> 00:00:57,900 they're starting to grow the very same business. 22 00:00:57,900 --> 00:01:01,400 This is rightly so upset a lot of people but I want to go into 23 00:01:01,400 --> 00:01:04,200 these changes and see what Apple's actually doing with 24 00:01:04,200 --> 00:01:06,400 their ad business and then finally, we have something else 25 00:01:06,400 --> 00:01:09,900 I need to respond to which is this video of Mark Zuckerberg 26 00:01:10,200 --> 00:01:13,700 doing this UFC style sparring. I'll be giving my full review. 27 00:01:13,900 --> 00:01:16,200 In reaction to this clip. So we have a lot of news to get 28 00:01:16,200 --> 00:01:19,000 to and a lot of topics to cover. Now, before we do a portfolio 29 00:01:19,000 --> 00:01:20,800 update, and I show you what's going on. 30 00:01:20,800 --> 00:01:23,500 And what companies, I'm buying I want to jump into the headline 31 00:01:23,500 --> 00:01:26,000 news. Bill Ackman went on to CNBC this 32 00:01:26,000 --> 00:01:28,700 morning, and I thought his comments were particularly 33 00:01:28,700 --> 00:01:32,700 interesting because previously, Bill Ackman has been looked at 34 00:01:33,000 --> 00:01:36,000 as the guy that's been making all of these very radical 35 00:01:36,000 --> 00:01:38,400 predictions. And these very dramatic, and 36 00:01:38,400 --> 00:01:41,300 dire predictions regarding inflation saying that it's going 37 00:01:41,300 --> 00:01:43,300 to be like hyperinflation saying that is going to be out of 38 00:01:43,308 --> 00:01:45,400 control. Saying that the FED is way 39 00:01:45,400 --> 00:01:48,300 behind and they need to raise interest rates as much as 40 00:01:48,300 --> 00:01:51,000 possible. He's had many tweet storms, 41 00:01:51,300 --> 00:01:54,800 which is a nice name for saying that you're tweeting a lot, you 42 00:01:54,808 --> 00:01:57,000 have a whole chain of tweets. He's been doing these tweets 43 00:01:57,000 --> 00:02:01,000 storms explaining, how bad and how big of a problem inflation 44 00:02:01,000 --> 00:02:02,500 is. But here we have is interview 45 00:02:02,800 --> 00:02:04,400 and he's changed his tone. A little bit. 46 00:02:04,400 --> 00:02:06,400 At least to me, I think he's actually change what he's been 47 00:02:06,400 --> 00:02:08,000 saying. Let's go ahead and start off 48 00:02:08,000 --> 00:02:10,199 with the beginning of this interview conversation and see 49 00:02:10,199 --> 00:02:13,700 if you have any new ideas about where we are in this economy. 50 00:02:13,800 --> 00:02:15,500 In the markets right now, we sucked. 51 00:02:15,500 --> 00:02:16,700 We talked to you over the summer. 52 00:02:17,000 --> 00:02:19,200 You would talked about how you felt the FED needed to raise 53 00:02:19,200 --> 00:02:21,400 interest rates. They are doing that. 54 00:02:21,400 --> 00:02:25,100 Yes. The market has been having a, in 55 00:02:25,100 --> 00:02:27,300 terms of equity is a tough time as a result. 56 00:02:28,300 --> 00:02:29,600 What do you think happens is fall? 57 00:02:29,600 --> 00:02:32,900 What are you doing? So we on the same companies, 58 00:02:32,900 --> 00:02:38,700 we've owned really beginning in the year absent, a new 59 00:02:38,800 --> 00:02:40,700 investment. That was very short dated and 60 00:02:40,700 --> 00:02:43,400 Netflix. The first thing that he says, is 61 00:02:43,400 --> 00:02:46,500 that we On the same companies that we did early in the year. 62 00:02:46,700 --> 00:02:49,400 So despite all of his predictions, he's remaining 63 00:02:49,400 --> 00:02:52,000 fully invested. The only caveat there is Netflix 64 00:02:52,300 --> 00:02:54,200 where he invested in it for three months and took a pretty 65 00:02:54,200 --> 00:02:56,500 significant loss. In that time, an Acumen owns, a 66 00:02:56,508 --> 00:02:59,300 concentrated portfolio of companies like Lowe's Chipotle 67 00:02:59,500 --> 00:03:01,700 restaurant Brands International and Hilton. 68 00:03:01,800 --> 00:03:03,900 And I think it's important to look at what investors are 69 00:03:03,900 --> 00:03:06,800 actually doing instead of the things that they say on Twitter. 70 00:03:06,800 --> 00:03:09,400 Because in many cases, I think a lot of things investors say 71 00:03:09,400 --> 00:03:12,200 online and in Twitter is a little bit more dramatic and it 72 00:03:12,200 --> 00:03:14,500 doesn't necessarily match their Emmett decisions. 73 00:03:14,500 --> 00:03:18,100 Now, Bill Ackman goes on laying out what he thinks will happen 74 00:03:18,100 --> 00:03:20,300 with the future of the economy. Coming up, we had this 75 00:03:20,300 --> 00:03:22,900 conversation, 12 months from. Now, what do you think? 76 00:03:22,900 --> 00:03:28,200 Is a, a Realistic sense of what inflation could be in this 77 00:03:28,200 --> 00:03:30,000 country. I think it's come down a lot. 78 00:03:30,300 --> 00:03:32,800 I think it's kind of what what's what's the number to you? 79 00:03:32,900 --> 00:03:37,100 It's 4% 4% three and a half percent hopefully and then they 80 00:03:37,100 --> 00:03:40,200 on his way down on its way down. Am I hearing this correctly? 81 00:03:40,200 --> 00:03:43,600 He just said in one year, his prediction is that inflation 82 00:03:43,600 --> 00:03:47,900 will be three and a half to four percent and on its way down. 83 00:03:48,300 --> 00:03:51,800 So it'll be down less than half of what it is today and it will 84 00:03:51,800 --> 00:03:54,800 continue on its way down, that is now his prediction and a 85 00:03:54,808 --> 00:03:58,200 stone as Evenly changed a lot in a very short amount of time. 86 00:03:58,300 --> 00:04:01,200 Now, he's saying stuff like this starts to come off and you're 87 00:04:01,200 --> 00:04:04,200 seeing I think some some indications that inflation is 88 00:04:04,200 --> 00:04:05,600 coming coming up. We had this now. 89 00:04:05,600 --> 00:04:08,400 Inflation will be three and a half to four percent in a year. 90 00:04:08,400 --> 00:04:10,700 And we're seeing indications right now than inflation is 91 00:04:10,700 --> 00:04:13,600 starting to ease. That is the message we get today 92 00:04:13,600 --> 00:04:15,800 from Bill Ackman. But let's go ahead and Rewind 93 00:04:15,800 --> 00:04:17,300 just a bit. Here's a tweet from Bill. 94 00:04:17,300 --> 00:04:22,200 Ackman dated May 24th, 2022, inflation is out of control 95 00:04:22,500 --> 00:04:24,800 inflation. Expectations are getting out of 96 00:04:24,800 --> 00:04:27,100 control. The markets are imploding 97 00:04:27,100 --> 00:04:29,000 because investors are not confident. 98 00:04:29,100 --> 00:04:32,500 That the Federal Reserve will stop inflation and If the Fed 99 00:04:32,500 --> 00:04:35,800 doesn't do its job, the market will do the feds job and that is 100 00:04:35,800 --> 00:04:39,400 what's happening now. And this goes on in this ongoing 101 00:04:39,400 --> 00:04:42,000 tweet storm, explaining how bad things are now. 102 00:04:42,000 --> 00:04:44,200 I like Bill Ackman. I think he's a great investor 103 00:04:44,200 --> 00:04:47,100 and he's had good returns, but I think this illustrates why we 104 00:04:47,100 --> 00:04:51,100 can't really buy into all the hysteria and everything that 105 00:04:51,100 --> 00:04:54,400 people say when they're in panic mode, when they're tweeting 106 00:04:54,400 --> 00:04:57,300 things out, when they're Hang the Doom and Gloom in just a 107 00:04:57,300 --> 00:05:00,100 couple months time, the tone has changed a lot. 108 00:05:00,300 --> 00:05:02,300 The demeanor has changed, no longer are things. 109 00:05:02,300 --> 00:05:06,000 Imploding, were fully invested and in a year we think inflation 110 00:05:06,000 --> 00:05:07,900 will be half of what it is today. 111 00:05:08,100 --> 00:05:09,700 That's the message that we're getting today. 112 00:05:10,000 --> 00:05:13,000 The message that we got just a couple months ago was entirely 113 00:05:13,000 --> 00:05:14,400 different. Now in this interview, Bill 114 00:05:14,400 --> 00:05:17,000 Ackman does give one other interesting prediction and 115 00:05:17,000 --> 00:05:20,100 that's when he thinks the market will make it the turn from being 116 00:05:20,100 --> 00:05:22,600 overall bearish to being overall bullish. 117 00:05:22,600 --> 00:05:25,700 I think, once people realize the FED doesn't have To keep 118 00:05:25,700 --> 00:05:28,700 increasing rates and will soon be taking rates down. 119 00:05:28,900 --> 00:05:30,700 That's kind of a Buy Signal for Marcus. 120 00:05:30,900 --> 00:05:34,000 And so the question is, how far in advance does the market 121 00:05:34,000 --> 00:05:36,800 predict that kind of outcome? I think, if people see inflation 122 00:05:36,800 --> 00:05:38,900 come off, eight and a half. So you start to see a pretty 123 00:05:39,300 --> 00:05:44,200 powerful continuing Trend, then I think people will expect at 124 00:05:44,200 --> 00:05:45,400 some point. The FED to ease. 125 00:05:45,400 --> 00:05:48,500 His opinion is the market will start to go back up when it 126 00:05:48,500 --> 00:05:52,000 becomes clear, that inflation is no longer a problem and the FED 127 00:05:52,000 --> 00:05:53,800 can start easing on the interest rates. 128 00:05:53,800 --> 00:05:56,700 On this point, I actually agree with Take, I think it's very 129 00:05:56,700 --> 00:06:00,800 difficult to have a very bullish and positive sentiment Market 130 00:06:01,100 --> 00:06:03,000 with inflation. Still being a problem and I 131 00:06:03,000 --> 00:06:05,400 think it will probably take numerous month-over-month 132 00:06:05,400 --> 00:06:08,400 incremental decreases in inflation before the market 133 00:06:08,400 --> 00:06:11,600 really starts to go back up, but keep in mind, the market is a 134 00:06:11,600 --> 00:06:14,500 pricing machine. That's what everyone's doing is, 135 00:06:14,500 --> 00:06:17,700 they're baking and expectations of the future, and by the time 136 00:06:17,700 --> 00:06:20,400 inflation, no longer becomes a problem and the market price is 137 00:06:20,400 --> 00:06:23,500 that in, if you're not already in the market, you may miss that 138 00:06:23,500 --> 00:06:25,200 window. So I'm with Bill Ackman that I'm 139 00:06:25,300 --> 00:06:27,800 I'm staying firmly invested in the market throughout this 140 00:06:27,800 --> 00:06:30,200 duration. I also own, very good, companies 141 00:06:30,200 --> 00:06:32,400 in my portfolio and I can wait out this storm. 142 00:06:32,400 --> 00:06:35,000 Now, speaking of good companies, there's one in my portfolio, 143 00:06:35,000 --> 00:06:36,900 that just announced some breaking news. 144 00:06:37,100 --> 00:06:39,400 They're acquiring a new company and it's in my consumer 145 00:06:39,400 --> 00:06:41,300 category, the company's Church & Dwight. 146 00:06:41,300 --> 00:06:43,700 This is a new holding to the passive income portfolio. 147 00:06:43,900 --> 00:06:46,200 It's one that I've done research on in past videos that you can 148 00:06:46,200 --> 00:06:49,800 reference, but they are a consumer discretionary and 149 00:06:49,800 --> 00:06:52,900 consumer staple company. They have a mixture of different 150 00:06:52,900 --> 00:06:55,200 products that go on to either one of those categories. 151 00:06:55,600 --> 00:07:00,000 Now this holding in my portfolio is only valued at 8,500 I'm down 152 00:07:00,000 --> 00:07:03,200 seven hundred dollars so far. But I don't really consider that 153 00:07:03,200 --> 00:07:06,000 too big of a deal because I eventually plan on around 154 00:07:06,000 --> 00:07:07,900 doubling the size of this position. 155 00:07:08,100 --> 00:07:11,400 I want it to be at least 16 thousand to twenty thousand 156 00:07:11,400 --> 00:07:13,600 dollars. So I have a long ways to go and 157 00:07:13,600 --> 00:07:15,000 I'm going to continue buying this one. 158 00:07:15,000 --> 00:07:17,500 Now Church & Dwight is what I consider to be a bit of a 159 00:07:17,508 --> 00:07:20,800 sleeper company, meaning that it's had phenomenal performance. 160 00:07:20,800 --> 00:07:24,600 It's a very powerful company, it has fast growth but somehow it 161 00:07:24,600 --> 00:07:26,600 has no buzz. Has its never talked about 162 00:07:26,600 --> 00:07:29,500 because it operates in a very boring industry but I consider 163 00:07:29,500 --> 00:07:32,500 this company to be very similar and this might sound odd but I 164 00:07:32,500 --> 00:07:35,500 consider it to be similar to Berkshire Hathaway meaning the 165 00:07:35,508 --> 00:07:38,200 way that they operate and grow their business, what church and 166 00:07:38,200 --> 00:07:42,000 white does is they own a diversified group of brands or 167 00:07:42,000 --> 00:07:43,700 different companies underneath them. 168 00:07:44,000 --> 00:07:47,000 Those different brands generate free cash flow and they use that 169 00:07:47,000 --> 00:07:49,800 incremental increase in free cash flow to buy additional 170 00:07:49,800 --> 00:07:51,900 Brands which increase their free cash flow. 171 00:07:51,900 --> 00:07:55,000 And they've done this over and over for the past 20 years year 172 00:07:55,000 --> 00:07:58,200 after Year their free cash flow goes up, the use that additional 173 00:07:58,200 --> 00:08:01,900 free cash flow to expand their product, line by other companies 174 00:08:01,900 --> 00:08:03,900 and introduce them. Under the Church & Dwight 175 00:08:03,900 --> 00:08:07,000 company where they integrate. Their back-end operations, they 176 00:08:07,000 --> 00:08:09,700 streamline their processes and distribution and make the new 177 00:08:09,700 --> 00:08:11,800 acquisition a productive thing for the company. 178 00:08:11,900 --> 00:08:14,700 And this is what they continue to do to this day overall. 179 00:08:14,700 --> 00:08:18,500 They own around 80 different brands but they have 14 of them 180 00:08:18,500 --> 00:08:21,100 that are really important. They call these power Brands. 181 00:08:21,300 --> 00:08:24,300 These 14 Brands make up the majority of their revenue and 182 00:08:24,300 --> 00:08:26,400 their free cash flow. Now Church & Dwight just 183 00:08:26,400 --> 00:08:28,200 announced that they're doing the same thing. 184 00:08:28,200 --> 00:08:31,600 Again, they're picking up a new company, a new brand that 185 00:08:31,600 --> 00:08:33,700 they're going to acquire and integrate as part of their 186 00:08:33,700 --> 00:08:36,900 overall company that brand that they're acquiring is the mighty 187 00:08:36,900 --> 00:08:39,299 patch brand and it's owned by the company hero. 188 00:08:39,299 --> 00:08:42,700 They say that the deal is done with 630 million dollars as a 189 00:08:42,708 --> 00:08:45,700 combination of cash and Equity. Now, the reason that they say 190 00:08:45,700 --> 00:08:47,900 they're doing this is because of the brand, they're buying, they 191 00:08:47,900 --> 00:08:51,000 consider it to be a very good strategic acquisition. 192 00:08:51,000 --> 00:08:53,900 They say that the mighty patch brand is a problem solution 193 00:08:53,900 --> 00:08:57,200 product with a Position in a growing category. 194 00:08:57,500 --> 00:09:00,900 The total acne treatment category in tract channels is 195 00:09:00,900 --> 00:09:02,900 approximately 700 million dollars. 196 00:09:03,200 --> 00:09:06,900 The patch has grown to 18% of the acne treatment category as 197 00:09:06,900 --> 00:09:10,500 more consumers, transition away from lotions ointments to the 198 00:09:10,500 --> 00:09:12,500 patch solution. So this Mighty patch brand, is 199 00:09:12,500 --> 00:09:15,500 in a growing category in the acne market and they say the 200 00:09:15,500 --> 00:09:18,600 brand skews towards younger consumers and consistently has 201 00:09:18,600 --> 00:09:21,400 high levels of brand loyalty and repeat purchase. 202 00:09:21,700 --> 00:09:25,100 So right here, I see a lot of things with this acquisition. 203 00:09:25,200 --> 00:09:27,600 That I like the first thing that I like about this deal is a 204 00:09:27,600 --> 00:09:29,500 category that is sent. It's not in a consumer 205 00:09:29,500 --> 00:09:31,900 discretionary. It's in a consumer defensive, 206 00:09:31,900 --> 00:09:35,500 which is beauty treatment, medical treatment or things like 207 00:09:35,500 --> 00:09:37,500 acne treatment. This Fall's firmly in that 208 00:09:37,500 --> 00:09:40,800 defensive category and within acne treatment, the patches are 209 00:09:40,800 --> 00:09:42,900 growing faster than lotions and ointments. 210 00:09:42,900 --> 00:09:46,700 So they're in the growing part of this defensive category and I 211 00:09:46,708 --> 00:09:48,600 like that. It has consistently high levels 212 00:09:48,600 --> 00:09:50,900 of brand, loyalty and repeat purchase. 213 00:09:51,200 --> 00:09:54,300 So this is a consumer defensive product in a growing category 214 00:09:54,500 --> 00:09:58,400 that has Purchases so far. I like the basics of the deal. 215 00:09:58,500 --> 00:10:00,700 Now in terms of actual growth and distribution, this is where 216 00:10:00,700 --> 00:10:03,600 Church & Dwight can actually help out this brand Heroes 217 00:10:03,600 --> 00:10:06,100 trailing 12 months. Ibadah, as of June 30th was 218 00:10:06,100 --> 00:10:08,500 approximately 45 million dollars with 40%. 219 00:10:08,500 --> 00:10:11,800 Even a margins Church, & Dwight expects to expand Mighty 220 00:10:11,800 --> 00:10:14,400 patches, limited distribution by leveraging. 221 00:10:14,400 --> 00:10:17,500 Its us retail relationship and international footprint right 222 00:10:17,500 --> 00:10:20,600 now, this Mighty patch brand is primarily being sold in places 223 00:10:20,600 --> 00:10:25,000 like Ulta off the shelves in the US and with Church & Dwight, 224 00:10:25,000 --> 00:10:25,900 sorry. Resources. 225 00:10:26,000 --> 00:10:29,200 They can easily expand that relationship outside of the US 226 00:10:29,200 --> 00:10:32,600 internationally, starting off with Canada and across Europe. 227 00:10:32,700 --> 00:10:35,000 So they should be able to continually grow sales, putting 228 00:10:35,000 --> 00:10:36,700 it into a different distribution channels. 229 00:10:36,700 --> 00:10:39,000 Now, they go on to talk more about the product saying that 230 00:10:39,000 --> 00:10:41,900 it's going to be their 15th power brand saying that they 231 00:10:41,900 --> 00:10:45,500 have a unique patented solution that private label Brands cannot 232 00:10:45,500 --> 00:10:48,100 replicate. So the product does have a moat 233 00:10:48,100 --> 00:10:51,300 through brand power distribution and proprietary formulas. 234 00:10:51,300 --> 00:10:53,800 Now, after announcing this deal, the stock is down three point, 235 00:10:53,800 --> 00:10:56,400 seven, three percent. It's almost Down four percent 236 00:10:56,400 --> 00:10:59,000 for the day and the takeaway could be that. 237 00:10:59,000 --> 00:11:02,000 Maybe investors don't like this deal but I don't actually 238 00:11:02,000 --> 00:11:03,400 believe that. That's the takeaway. 239 00:11:03,500 --> 00:11:05,900 What Church & Dwight did was give us some good news and some 240 00:11:05,900 --> 00:11:09,500 bad news in this press release. They also say that they're 241 00:11:09,500 --> 00:11:12,600 cutting guidance quote, we now expect full year, reported 242 00:11:12,600 --> 00:11:15,900 sales, growth of two to four percent and it was previously 243 00:11:15,900 --> 00:11:18,500 for 25 percent. So they're cutting their actual 244 00:11:18,500 --> 00:11:20,700 Revenue growth expectations for the year. 245 00:11:21,000 --> 00:11:24,200 And this all has to do with their discretionary items. 246 00:11:24,200 --> 00:11:28,400 Now, if they're Growing to 24 percent with this acquisition 247 00:11:28,400 --> 00:11:31,500 combined, in that, that means that the discretionary brands 248 00:11:31,500 --> 00:11:34,400 are really hurting their Top Line growth for Q3. 249 00:11:34,400 --> 00:11:37,600 We now expect reported sales, decline of -1%. 250 00:11:37,800 --> 00:11:40,300 Previously, the midpoint of three percent reflecting lower 251 00:11:40,300 --> 00:11:43,500 demand for water pick by diffusion and Flawless earnings 252 00:11:43,500 --> 00:11:47,300 per share affirmed at 65 cents. No change from previous Outlook. 253 00:11:47,600 --> 00:11:50,800 So both the full-year guidance and this next quarter had their 254 00:11:50,800 --> 00:11:53,600 revenue cut, although their EPS looks the same. 255 00:11:53,600 --> 00:11:56,600 So I don't think this 4% move. Work today has anything to do 256 00:11:56,600 --> 00:11:58,900 with this acquisition. Actually think this is a good 257 00:11:58,900 --> 00:12:02,200 product and a good category, I like the acquisition and this is 258 00:12:02,200 --> 00:12:05,800 the type of thing I expected from Church & Dwight to 259 00:12:05,800 --> 00:12:08,600 continually buy more of these defensive companies. 260 00:12:08,900 --> 00:12:11,700 And in the management call they said they're going to be 261 00:12:11,700 --> 00:12:15,100 focusing on consumer defensives. Not consumer discretionary. 262 00:12:15,100 --> 00:12:18,100 He's so overall I like the acquisition and I still like the 263 00:12:18,100 --> 00:12:21,300 company even though it's having temporary difficulties with 264 00:12:21,300 --> 00:12:23,500 their discretionary items in my opinion. 265 00:12:23,500 --> 00:12:25,800 And this is just a guess. I think that Church & Dwight is 266 00:12:25,800 --> 00:12:28,500 going through a transition period of difficulty with this 267 00:12:28,500 --> 00:12:31,400 High inflation and I think that will weigh down on their growth 268 00:12:31,400 --> 00:12:34,900 in the short term but if Bill Ackman is correct and inflation 269 00:12:34,900 --> 00:12:38,100 is down, considerably in a year, I expect them to do what they've 270 00:12:38,100 --> 00:12:39,900 done in the past and continue to grow. 271 00:12:40,000 --> 00:12:44,000 Now, we also have news that apple is a giant bully picking 272 00:12:44,000 --> 00:12:46,700 on other kids, like Facebook and Google. 273 00:12:47,100 --> 00:12:49,400 And a lot of people are frankly upset about this. 274 00:12:49,400 --> 00:12:51,700 They don't like that Apple's picking on poor Facebook and 275 00:12:51,700 --> 00:12:54,700 poor Google by beating them at their own game and building out 276 00:12:54,700 --> 00:12:57,000 their own a Business. Now before I jump into the 277 00:12:57,000 --> 00:13:00,800 story, I have to do the quick shout-out for FTX u.s., they are 278 00:13:00,800 --> 00:13:03,900 a sponsor of this Channel and FTX u.s., finally released their 279 00:13:03,900 --> 00:13:05,400 stock brokerage app. It's live. 280 00:13:05,400 --> 00:13:08,200 Now you can sign up using one of the links in the pin comment 281 00:13:08,200 --> 00:13:09,900 below. When you sign up, make sure to 282 00:13:09,900 --> 00:13:12,400 use a referral code Carlson because that will credit your 283 00:13:12,408 --> 00:13:16,300 account $10 once you complete your first 100 dollar trade. 284 00:13:16,600 --> 00:13:19,800 So if you sign up deposit $100 then you do a hundred dollar 285 00:13:19,800 --> 00:13:23,000 trade and buy some fractional shares of some company you'll 286 00:13:23,000 --> 00:13:25,000 get ten dollars credited to your account so far. 287 00:13:25,200 --> 00:13:27,900 Are all the feedback that I've received personally has been 288 00:13:27,900 --> 00:13:30,000 positive everybody so far as enjoyed using it. 289 00:13:30,000 --> 00:13:31,600 So sign up now and let me know what you think. 290 00:13:31,600 --> 00:13:33,600 Now, moving on, we have to talk about Apple for a minute. 291 00:13:33,600 --> 00:13:36,700 It's the largest holding in my portfolio so I have a lot 292 00:13:36,700 --> 00:13:39,600 invested in apple. And apple is a company that I 293 00:13:39,600 --> 00:13:42,300 think is misunderstood still to some degree. 294 00:13:42,500 --> 00:13:46,900 For example, a lot of investors consider Apple to have a smaller 295 00:13:46,900 --> 00:13:49,200 mode than many of the other big tech companies. 296 00:13:49,400 --> 00:13:53,000 They say that Facebook has a large competitive Advantage 297 00:13:53,000 --> 00:13:55,700 because of the network effects associated with Social media 298 00:13:55,700 --> 00:13:59,100 networks, they say that Google and the search industry is 299 00:13:59,100 --> 00:14:02,300 basically a monopoly where Google has this massive moat. 300 00:14:02,600 --> 00:14:05,600 They say the Amazon has a bigger moat, they say that Microsoft 301 00:14:05,600 --> 00:14:08,500 has bigger mode, lots of investors you apple as having a 302 00:14:08,500 --> 00:14:11,400 smaller mode. Now, when we talk about Apple, 303 00:14:11,600 --> 00:14:13,100 we can look at a couple of the actions. 304 00:14:13,100 --> 00:14:16,900 They've done to assess, who is at the top of the food chain 305 00:14:16,900 --> 00:14:19,800 here and this news is just one more thing. 306 00:14:19,800 --> 00:14:23,100 I think to clearly illustrate what companies, at the top of 307 00:14:23,108 --> 00:14:26,100 the food chain and which ones aren't apple is gaining on 308 00:14:26,100 --> 00:14:28,700 Facebook and Google and online ads. 309 00:14:28,700 --> 00:14:32,900 After iOS change the report shows apple is pushing heavily 310 00:14:33,100 --> 00:14:35,700 into the ad business. The first place to Apple showing 311 00:14:35,700 --> 00:14:38,900 you ads is in the stocks app. They can simply display an ad 312 00:14:38,900 --> 00:14:41,100 whenever you pull up the business news, you can have 313 00:14:41,200 --> 00:14:43,600 banner ads there you can have advertisements for different 314 00:14:43,800 --> 00:14:45,700 things, related to the stock you're looking at. 315 00:14:45,700 --> 00:14:49,100 So that's one place to Apple can display ads, but they're doing 316 00:14:49,100 --> 00:14:51,900 this in more than one place. Apples also going to be showing 317 00:14:51,900 --> 00:14:55,500 ads in the Apple news app, they can have people Ads for 318 00:14:55,500 --> 00:14:58,400 different magazines ads for different products in between 319 00:14:58,400 --> 00:15:01,100 different news stories, so on and so forth, but probably the 320 00:15:01,100 --> 00:15:04,100 biggest place the Apple can make money through ads is in their 321 00:15:04,100 --> 00:15:08,400 App Store, similar to Amazon, controlling amazon.com, and the 322 00:15:08,400 --> 00:15:10,800 mobile app, and being able to have sponsored ads, to put your 323 00:15:10,800 --> 00:15:13,400 product in front of others. Apple can do the same thing. 324 00:15:13,500 --> 00:15:16,800 They can charge people to advertise and show their app 325 00:15:16,800 --> 00:15:21,000 before competitors. So this blade idle game shows up 326 00:15:21,100 --> 00:15:22,700 when you just search game before. 327 00:15:22,700 --> 00:15:25,500 Stumble guys, even though, stumble guys, is Much more 328 00:15:25,500 --> 00:15:28,200 popular game with 40,000 reviews, you can pay to get 329 00:15:28,200 --> 00:15:30,100 ahead of competitors in the App Store. 330 00:15:30,100 --> 00:15:32,000 Now, why does this make apple a bully? 331 00:15:32,000 --> 00:15:34,600 And why does this show that they have a bigger moat than Facebook 332 00:15:34,600 --> 00:15:36,500 or Google? Well, in this case, it is ironic 333 00:15:36,500 --> 00:15:39,600 because Apple recently just made some policy changes that 334 00:15:39,600 --> 00:15:41,600 dramatically affected Facebook's business. 335 00:15:41,600 --> 00:15:45,100 Apple created their app, tracking transparency, pop up 336 00:15:45,100 --> 00:15:47,800 which makes users decide whether or not they want to be tracked 337 00:15:47,800 --> 00:15:51,200 by apps like Facebook, not being tracked makes it so they can't 338 00:15:51,200 --> 00:15:54,000 have as targeted of ads which makes their whole advertising 339 00:15:54,000 --> 00:15:58,100 business, not as This is reportedly cost Facebook or meta 340 00:15:58,100 --> 00:16:02,600 around 10 plus billion per year in operating income and a lot of 341 00:16:02,600 --> 00:16:05,500 headache outside of that. So this has been a big blow to 342 00:16:05,500 --> 00:16:07,400 Facebook and other smaller developers. 343 00:16:07,500 --> 00:16:10,700 So, Apple simultaneously hurting met as advertising business 344 00:16:10,700 --> 00:16:14,600 while growing their own and they surveyed. 100 different customer 345 00:16:14,600 --> 00:16:17,800 app companies and found that Apple's ad business has 346 00:16:17,800 --> 00:16:21,700 benefited from the company's major iOS privacy update in 347 00:16:21,700 --> 00:16:24,800 2021. So they're pushing advertisers 348 00:16:24,800 --> 00:16:26,400 off. Off of companies like meta 349 00:16:26,400 --> 00:16:29,300 because it's more difficult to track and now they're attracting 350 00:16:29,300 --> 00:16:33,100 advertising dollars on to their channels like the app store, 351 00:16:33,200 --> 00:16:35,300 that's one of the changes it's happening here and I think it 352 00:16:35,300 --> 00:16:38,200 shows what company is more an advantage position than the 353 00:16:38,200 --> 00:16:41,800 other Apple controls more Facebook's Destiny than the 354 00:16:41,800 --> 00:16:44,300 other way around. Now, with Apple and Google, 355 00:16:44,300 --> 00:16:46,600 there's a lot of people that still consider Google to have a 356 00:16:46,600 --> 00:16:49,400 bigger moat than Apple. And I think that's a fair 357 00:16:49,400 --> 00:16:51,500 argument. But still a lot of the data 358 00:16:51,500 --> 00:16:55,000 doesn't support that Apple and Google have a deal together. 359 00:16:55,200 --> 00:16:59,600 Where Google pays Apple reported 8 to 12 billion dollars per year 360 00:16:59,800 --> 00:17:03,700 to keep their search bar. Defaulted to keep Google search 361 00:17:03,700 --> 00:17:06,700 as the default search engine. If Google's, moat was wider than 362 00:17:06,700 --> 00:17:09,900 Apple and Google was a more powerful company, why is Google 363 00:17:09,900 --> 00:17:14,300 forking over 12 billion dollars per year to Apple just to keep 364 00:17:14,300 --> 00:17:16,800 their search bar defaulted? What would the reason be for 365 00:17:16,800 --> 00:17:19,500 doing that unless they were unsure about their position? 366 00:17:19,599 --> 00:17:21,700 The truth is that Google has calculated that. 367 00:17:21,700 --> 00:17:25,800 It's worth it to pay Apple 12 billion dollars that be Faulted 368 00:17:25,800 --> 00:17:29,000 to continue to keep their moat as wide as possible, but that's 369 00:17:29,000 --> 00:17:32,600 at the mercy of apple and that could change at any time, they 370 00:17:32,600 --> 00:17:35,300 change the rules with meta and they could change this agreement 371 00:17:35,300 --> 00:17:38,100 with Google in the future. The one company that I think has 372 00:17:38,100 --> 00:17:43,100 its ad business protected from Apple is Amazon apples, rise and 373 00:17:43,100 --> 00:17:46,400 online ads for developers mirrors, Amazon's position, and 374 00:17:46,400 --> 00:17:49,300 e-commerce, as retailer spend more money to promote their 375 00:17:49,300 --> 00:17:52,500 product on the site, they rely on for customers Apple. 376 00:17:52,500 --> 00:17:55,000 Can't really do too much about Amazon's ad. 377 00:17:55,200 --> 00:17:57,600 Business because Amazon's ad business isn't reliant on 378 00:17:57,600 --> 00:17:59,500 tracking. Now, a lot of meta investors 379 00:17:59,500 --> 00:18:03,500 will say that, this isn't fair, what Apple's doing is bowling, 380 00:18:03,500 --> 00:18:06,100 they're picking on Facebook in a very unfair way. 381 00:18:06,300 --> 00:18:09,600 And to those investors I agree. I don't necessarily think this 382 00:18:09,600 --> 00:18:11,900 is fair but investing is not about what's fair. 383 00:18:11,900 --> 00:18:15,200 It's about finding companies that have a moat which in many 384 00:18:15,200 --> 00:18:19,400 cases is an unfair Advantage. Now, moving on we have a video 385 00:18:19,400 --> 00:18:23,400 that was posted about Mark Zuckerberg training like a UFC 386 00:18:23,400 --> 00:18:26,500 trainer he's doing sparring I'm with this trainer here and they 387 00:18:26,500 --> 00:18:28,900 released this little clip showing some of the things he's 388 00:18:28,900 --> 00:18:48,100 doing. Now I watch this tonight was 389 00:18:48,100 --> 00:18:50,500 impressed by Zuckerberg straining. 390 00:18:50,500 --> 00:18:52,900 I think he's actually you actually looks pretty good in 391 00:18:52,900 --> 00:18:54,100 this. Now there's a lot of people 392 00:18:54,100 --> 00:18:57,600 making jokes saying Mark Zuckerberg must be planning on 393 00:18:57,600 --> 00:19:00,000 getting a divorce because he's putting up videos of him 394 00:19:00,000 --> 00:19:03,400 training in the gym, right? Or there's people saying, That 395 00:19:03,400 --> 00:19:06,300 Mark Zuckerberg is wanting to save money on its five million 396 00:19:06,300 --> 00:19:09,000 dollar, defense budget, but I think the answer is more simple. 397 00:19:09,000 --> 00:19:12,200 I think this is just an outlet for some anger, just some 398 00:19:12,200 --> 00:19:14,700 venting, and a way to cool things down. 399 00:19:14,700 --> 00:19:17,600 I think what he does is he just imagines Tim Cook as the 400 00:19:17,600 --> 00:19:20,300 opponent and that's really where the ferocity and intensity in 401 00:19:20,308 --> 00:19:22,800 his training comes. Now, for me, personally, I'm no 402 00:19:22,800 --> 00:19:24,700 Pro. But I was impressed by this. 403 00:19:24,700 --> 00:19:26,000 I thought he looks pretty good here. 404 00:19:26,000 --> 00:19:27,300 Now, that's all for this episode. 405 00:19:27,300 --> 00:19:29,800 I hope you enjoyed and I'll see you in the next one.