1 00:00:00,120 --> 00:00:02,720 That's right. I'm done buying stocks, at least 2 00:00:02,720 --> 00:00:05,680 for now, at least for a short time, because I'm trying out a 3 00:00:05,680 --> 00:00:08,840 new cash management strategy. It's nothing too complex, but in 4 00:00:08,840 --> 00:00:12,440 this episode I'll be going over my thoughts on accumulating and 5 00:00:12,440 --> 00:00:14,440 holding cash. Now we have a lot of news today 6 00:00:14,440 --> 00:00:18,000 starting off the day. We have Lulu up 4% on the day 7 00:00:18,000 --> 00:00:19,600 because of their earnings report. 8 00:00:19,920 --> 00:00:22,800 We have the earnings report. We're going to go through it and 9 00:00:22,800 --> 00:00:25,520 see how this company's doing so well when other companies are 10 00:00:25,520 --> 00:00:27,680 struggling. Now as Lulu's doing well, we 11 00:00:27,680 --> 00:00:30,520 have Disney on the other end, which is struggling. 12 00:00:30,880 --> 00:00:33,440 Disney's had such a rough time this year and they seem to be 13 00:00:33,440 --> 00:00:36,720 running into more trouble. They're down nearly 3% on the 14 00:00:36,720 --> 00:00:39,520 day because they're having a big Tossel with Charter 15 00:00:39,520 --> 00:00:41,480 Communication. Charter is a cable Internet 16 00:00:41,480 --> 00:00:45,270 provider and cable TV provider. And right now, Charter has 17 00:00:45,270 --> 00:00:50,030 literally taken off ABC and ESPN off of their cable network 18 00:00:50,030 --> 00:00:51,870 because of this spat with Disney. 19 00:00:51,910 --> 00:00:54,950 And Charter, for lack of a better term, is talking a lot of 20 00:00:54,950 --> 00:00:57,310 crap about Disney. They're basically saying that 21 00:00:57,310 --> 00:00:59,750 they don't need Disney. They in fact, could be better 22 00:00:59,750 --> 00:01:02,270 off without Disney. So this has become a bitter spat 23 00:01:02,270 --> 00:01:04,430 between the two companies. We're going to be looking at the 24 00:01:04,430 --> 00:01:06,910 details here now. I also have an announcement that 25 00:01:06,910 --> 00:01:11,710 I finally opened up a retirement account, a Roth IRA, and I want 26 00:01:11,750 --> 00:01:14,630 to go through the details of how I open this up, what brokerage I 27 00:01:14,630 --> 00:01:18,750 used, what a Roth IRA even is, and what investment I hold 28 00:01:18,790 --> 00:01:21,710 inside this Roth IRA. So we'll be going over all the 29 00:01:21,710 --> 00:01:23,710 details of my retirement account. 30 00:01:23,750 --> 00:01:26,230 And then as we know, it's Friday, which means we looked at 31 00:01:26,230 --> 00:01:29,110 TikTok to get our best financial advice and life advice in 32 00:01:29,110 --> 00:01:31,390 general. And this individual on TikTok 33 00:01:31,390 --> 00:01:34,870 has explained how we can cover one of our most expensive costs, 34 00:01:34,870 --> 00:01:37,950 which is food for free. So as always, we have a lot to 35 00:01:37,950 --> 00:01:39,470 get into. Let's go ahead and jump right 36 00:01:39,470 --> 00:01:41,750 in. Before we get into why I'm done 37 00:01:41,750 --> 00:01:44,910 buying stocks, I want to first do a quick shout out for the 38 00:01:44,910 --> 00:01:48,110 sponsor of this video. The sponsor is qualtrum.com, the 39 00:01:48,110 --> 00:01:50,710 stock analysis tool I've built from the ground up with 40 00:01:50,710 --> 00:01:53,030 developers that I used to work with at my day job. 41 00:01:53,150 --> 00:01:55,550 This is a project I've been working on for years and it's 42 00:01:55,550 --> 00:01:58,550 part of the Patreon membership. When you type in a ticker symbol 43 00:01:58,550 --> 00:02:01,230 to Qualtrum Insights, it gives you all the fundamentals of a 44 00:02:01,230 --> 00:02:03,480 company. You have the valuations, the 45 00:02:03,480 --> 00:02:06,880 cash flow, the margins of the company, the balance sheet and 46 00:02:06,880 --> 00:02:09,759 the dividends, all in a summary at the very top. 47 00:02:09,759 --> 00:02:13,120 So it's very easy to see. And then we have every financial 48 00:02:13,120 --> 00:02:17,200 statement of the company portrayed in a visual way, so 49 00:02:17,200 --> 00:02:20,120 you can see it over time and study the history of how these 50 00:02:20,120 --> 00:02:22,090 companies look. This helps you gauge the 51 00:02:22,090 --> 00:02:24,850 cyclicality. We have a longterm history of 52 00:02:24,850 --> 00:02:27,450 the dividends of a company and the earnings per share. 53 00:02:27,690 --> 00:02:31,130 Most websites only go back to a maximum of 10 years. 54 00:02:31,370 --> 00:02:33,850 Qualterm goes back 25 years plus. 55 00:02:33,850 --> 00:02:37,370 So in longer term companies, ones like Apple, you can see 56 00:02:37,370 --> 00:02:41,370 revenues going way back to 1985. We also have a list of other 57 00:02:41,370 --> 00:02:43,130 features we're continually building out. 58 00:02:43,130 --> 00:02:45,890 We have a watch list here where you can add as many watch lists 59 00:02:45,890 --> 00:02:47,810 as you want. You can see something called the 60 00:02:47,810 --> 00:02:50,850 dip Finder, which is a technical term to show you which of your 61 00:02:50,850 --> 00:02:52,570 companies are in a dip or a price surge. 62 00:02:52,610 --> 00:02:55,690 The watch list shows you all the upcoming earnings in order and 63 00:02:55,690 --> 00:02:58,930 the relevant news for just those companies that you've selected. 64 00:02:58,930 --> 00:03:01,850 And then we also have a portfolio management tool that 65 00:03:01,850 --> 00:03:05,290 shows you all different stats about your portfolio, the sector 66 00:03:05,290 --> 00:03:08,370 breakdown, your dividend income over time, your upcoming 67 00:03:08,370 --> 00:03:11,170 dividends with different charts tracking all different things 68 00:03:11,630 --> 00:03:14,070 and of course your holdings table showing you how things are 69 00:03:14,070 --> 00:03:16,230 trading. And I have big future plans for 70 00:03:16,230 --> 00:03:17,870 this as well. The next thing that we're 71 00:03:17,870 --> 00:03:20,510 building I think is going to be a pretty significant tool. 72 00:03:20,590 --> 00:03:23,030 Now the way that you can join Qualtrum and try this out for 73 00:03:23,030 --> 00:03:25,630 free with a month long free trial is by going to 74 00:03:25,630 --> 00:03:29,830 patreon.com/joseph Carlson and hitting Become a patron. 75 00:03:30,210 --> 00:03:33,410 It's a simple $10 a month and you get a one month free trial. 76 00:03:33,410 --> 00:03:35,690 I've taken the route that being like Costco having a 77 00:03:35,690 --> 00:03:38,330 satisfaction guarantee. If you end up not liking 78 00:03:38,330 --> 00:03:41,130 Qualtrim and you're not fully satisfied with it, you get your 79 00:03:41,130 --> 00:03:42,610 money back. You don't pay a dime. 80 00:03:42,610 --> 00:03:44,490 So try it out Now you have nothing to lose. 81 00:03:44,490 --> 00:03:46,490 I'll throw a link to it in the comments below. 82 00:03:46,570 --> 00:03:48,890 Now let's first start off jumping into the reasons that 83 00:03:48,890 --> 00:03:52,410 I'm not buying stocks right now. I'm trying to adapt my cash 84 00:03:52,410 --> 00:03:56,650 management strategy. Right now I only have $4000 in 85 00:03:56,650 --> 00:04:00,120 cash, which don't get me wrong, $4000 is a lot of money. 86 00:04:00,120 --> 00:04:01,280 You can do a lot with that money. 87 00:04:01,280 --> 00:04:04,320 So I'm not trying to downplay the amount that $4000 is. 88 00:04:04,720 --> 00:04:08,520 But in comparison to my overall portfolio value, which has 89 00:04:08,520 --> 00:04:13,920 reached a high of 508 thousand, $4000 is less than 1%. 90 00:04:14,440 --> 00:04:19,640 So I'm basically 99% plus invested with this portfolio. 91 00:04:19,720 --> 00:04:23,320 Almost 100% invested means I have very little wiggle room of 92 00:04:23,400 --> 00:04:27,460 anything I can do if any of my companies have substantial sell 93 00:04:27,460 --> 00:04:29,500 offs. For example, on Qualtrim, I'm 94 00:04:29,500 --> 00:04:32,460 always looking at the dip Finder, which is a technical 95 00:04:32,460 --> 00:04:35,180 analysis way of looking at what companies in a dip or which 96 00:04:35,180 --> 00:04:38,300 company is in a price surge. Right now with the rest of the 97 00:04:38,300 --> 00:04:42,020 market, My Portfolio overwhelmingly is in a price 98 00:04:42,020 --> 00:04:44,100 surge. All of these companies are going 99 00:04:44,100 --> 00:04:48,180 up dramatically into it being the biggest leader right now. 100 00:04:48,420 --> 00:04:52,540 This company's really, really taken off and right now it's 25% 101 00:04:52,540 --> 00:04:54,990 above it's 200 day moving average. 102 00:04:55,230 --> 00:04:58,670 That simply means that Intuit is just going to the moon. 103 00:04:58,710 --> 00:05:01,070 This company is making substantial gains. 104 00:05:01,390 --> 00:05:05,230 I only put $35,000 into this company and I'm already up 105 00:05:05,230 --> 00:05:09,470 $9200. I've almost surpassed my gains 106 00:05:09,470 --> 00:05:13,550 in Microsoft with Intuit in a single year, and I've owned 107 00:05:13,550 --> 00:05:17,270 Microsoft for years. So this company is in a price 108 00:05:17,270 --> 00:05:21,810 surge that is reflected by this big green bar hair showing how 109 00:05:21,810 --> 00:05:23,890 much it's going up. And you can see the same thing 110 00:05:23,890 --> 00:05:26,170 with the rest of my holdings. Most of my companies are going 111 00:05:26,170 --> 00:05:28,050 up like crazy following the market. 112 00:05:28,490 --> 00:05:31,570 Even the ones that are doing poorly this year, Texas 113 00:05:31,570 --> 00:05:35,730 Roadhouse and Vici, they're really not doing all that bad. 114 00:05:36,010 --> 00:05:39,530 Texas Roadhouse is down 1% below the 200 day moving average, 115 00:05:39,770 --> 00:05:42,210 which basically means it's just flat this year. 116 00:05:42,450 --> 00:05:45,410 It has no momentum really going upwards or downwards. 117 00:05:45,900 --> 00:05:48,340 Vici's the only one that's in a slight dip. 118 00:05:48,620 --> 00:05:51,860 The company's gone down. But keep in mind the dip Finder 119 00:05:51,860 --> 00:05:54,980 tracks price movement. It doesn't track the dividend. 120 00:05:55,300 --> 00:05:58,340 So if you factor in the dividend, Vici's actually flat 121 00:05:58,340 --> 00:06:02,100 this year too. In fact, it's given almost 0% 122 00:06:02,100 --> 00:06:05,700 gains or losses this year, entirely flat overall. 123 00:06:05,700 --> 00:06:09,820 The picture that this paints is that My Portfolio is going up. 124 00:06:10,210 --> 00:06:13,010 Every single holding is either flat or going up. 125 00:06:13,210 --> 00:06:16,050 Now that seems great and it's fun to look back on all the 126 00:06:16,050 --> 00:06:19,330 gains and see all the wealth being created And we can sit 127 00:06:19,330 --> 00:06:22,690 back here and feel great about what we've accomplished, but 128 00:06:22,690 --> 00:06:25,250 that's not really what we should be doing as investors. 129 00:06:25,610 --> 00:06:28,650 When I look back and see all these companies making record 130 00:06:28,650 --> 00:06:31,690 highs and making gains, what I think is that I need to be a 131 00:06:31,690 --> 00:06:35,090 little bit more cautious. Anytime the market gets a little 132 00:06:35,090 --> 00:06:39,320 bit exuberant and it starts to ignore realistic concerns like 133 00:06:39,320 --> 00:06:41,800 the economy slowing down, student loan repayments 134 00:06:41,800 --> 00:06:45,160 resuming, companies having lots of debt and so on and so forth, 135 00:06:45,680 --> 00:06:48,560 It becomes a time where I get a little bit more concerned, a bit 136 00:06:48,560 --> 00:06:51,240 more cautious. I don't like to celebrate when 137 00:06:51,240 --> 00:06:54,360 other investors are celebrating. I'm trying to remain cold and 138 00:06:54,360 --> 00:06:56,720 calculated. When I look at the situation 139 00:06:56,720 --> 00:06:59,840 right now, I think it's a situation that requires prudence 140 00:06:59,880 --> 00:07:02,080 and caution. So I've been revisiting my 141 00:07:02,080 --> 00:07:06,620 capital deployment strategy and my cash balance strategy right 142 00:07:06,620 --> 00:07:11,260 now being 99% invested is incredibly bullish positioning. 143 00:07:11,460 --> 00:07:14,380 I basically have every bit of free capital that I have 144 00:07:14,380 --> 00:07:17,700 invested in this portfolio. And I think that as the markets 145 00:07:17,700 --> 00:07:21,020 going up, I should become slightly more conservative. 146 00:07:21,140 --> 00:07:23,500 When I look at the strategies that other great investors do, 147 00:07:23,540 --> 00:07:25,580 most of them do hold a little bit of cash. 148 00:07:25,620 --> 00:07:28,540 Warren Buffett, for example, says that he's a believer in 149 00:07:28,540 --> 00:07:30,140 cash. He likes cash. 150 00:07:30,460 --> 00:07:33,220 In fact, Berkshire had a record cash pile. 151 00:07:33,600 --> 00:07:36,080 When we look at the amount of cash that Berkshire had, it was 152 00:07:36,080 --> 00:07:38,520 somewhere in the range of $130 billion. 153 00:07:38,760 --> 00:07:42,920 It ebbs and flows overtime, but if you position that cash pile 154 00:07:43,200 --> 00:07:47,760 against their actual assets, that is a 14% cash pile. 155 00:07:47,880 --> 00:07:51,280 Now to put that in context, if I carried the same amount of cash 156 00:07:51,320 --> 00:07:55,490 that Warren Buffett does 14%, that means that I would have 157 00:07:55,530 --> 00:07:59,970 roughly $71,000 in cash right now. 158 00:08:00,090 --> 00:08:02,890 So that is the cash positioning of Berkshire compared to My 159 00:08:02,890 --> 00:08:06,370 Portfolio 4000 compared to 71,000. 160 00:08:06,610 --> 00:08:09,050 We are worlds apart in our cash management. 161 00:08:09,130 --> 00:08:11,250 Now Berkshire does have extra reasons to hold cash. 162 00:08:11,250 --> 00:08:13,490 They have a much bigger complex company. 163 00:08:13,690 --> 00:08:15,850 They have a lot more liabilities with potential insurance 164 00:08:15,850 --> 00:08:19,800 payouts, but still other great investors have cash balances as 165 00:08:19,800 --> 00:08:21,720 well. One of the things that we notice 166 00:08:21,720 --> 00:08:25,240 is that on the 13 F filings, it does not say their cash 167 00:08:25,240 --> 00:08:28,400 position, but most investors like Bill Ackman with Pershing 168 00:08:28,400 --> 00:08:32,360 Square Capital, he holds a bit of cash, usually 5 to 10% at 169 00:08:32,360 --> 00:08:34,039 least. Other great investors like 170 00:08:34,039 --> 00:08:37,919 Valley Forge Capital typically hold at a minimum 5% cash 171 00:08:37,919 --> 00:08:40,280 balance. So it's not uncommon at all for 172 00:08:40,280 --> 00:08:43,280 great investors throughout all periods of growing their fund to 173 00:08:43,280 --> 00:08:46,400 hold a cash balance in case opportunity arises. 174 00:08:46,720 --> 00:08:49,680 And it's especially not uncommon for them to hold greater amounts 175 00:08:49,680 --> 00:08:53,360 of cash as the market races upwards like it's doing this 176 00:08:53,360 --> 00:08:55,680 year. So what I plan to do is not to 177 00:08:55,680 --> 00:08:59,600 hold 14% cash. I think that that's really high. 178 00:08:59,880 --> 00:09:03,080 That would be me saving up $71,000 in cash and I think 179 00:09:03,080 --> 00:09:06,600 that's a bit aggressive. Where I want to be is around 5% 180 00:09:06,600 --> 00:09:10,800 cash, which is around $25,000. So I need to save up an 181 00:09:10,800 --> 00:09:14,640 additional $21,000 in cash either through the accumulation 182 00:09:14,640 --> 00:09:17,280 of dividends and deposits. It's going to take a while to 183 00:09:17,280 --> 00:09:20,600 get there, but that's the goal. And I'll be holding on to this 184 00:09:20,600 --> 00:09:24,240 cash until I see something that's incredibly attractively 185 00:09:24,240 --> 00:09:27,480 valued within My Portfolio or on my watch list. 186 00:09:27,720 --> 00:09:31,080 If I find something that I think is so good that I can't pass it 187 00:09:31,080 --> 00:09:34,440 up, I will spring and use that cash balance just like I did 188 00:09:34,440 --> 00:09:35,880 with Intuit. But that's the plan. 189 00:09:35,880 --> 00:09:38,600 As of now, I've been trying to find ways to improve my 190 00:09:38,600 --> 00:09:41,160 investing strategy throughout all different parts of it. 191 00:09:41,640 --> 00:09:43,920 And I think improving my cash management and capital 192 00:09:43,920 --> 00:09:46,880 deployment strategy is another way that I can improve and 193 00:09:46,880 --> 00:09:49,200 hopefully this will help improve returns over time. 194 00:09:49,320 --> 00:09:52,200 Now moving on, I quickly want to look at Lululemon's earnings 195 00:09:52,200 --> 00:09:54,160 report because there was a couple of things I thought were 196 00:09:54,160 --> 00:09:56,800 really exceptional about what this company's doing. 197 00:09:57,240 --> 00:10:00,600 First of all, the company is doing really well, while a lot 198 00:10:00,600 --> 00:10:03,840 of others are struggling. We've seen Nike sell off like 199 00:10:03,840 --> 00:10:07,040 crazy and Lululemon's really not having that issue. 200 00:10:07,320 --> 00:10:09,720 Let's go ahead and take a look at how their performance was 201 00:10:09,760 --> 00:10:12,880 this most recent quarter and this report was just released 202 00:10:12,880 --> 00:10:15,240 today. So we have right here the first 203 00:10:15,240 --> 00:10:18,880 thing is that the net revenue, which is just the overall 204 00:10:18,880 --> 00:10:25,040 revenue, increased by 18% or 20% on a constant dollar basis. 20% 205 00:10:25,080 --> 00:10:29,600 revenue gain is substantial. So Lululemon is growing quickly. 206 00:10:29,600 --> 00:10:32,240 Here's what this looks like. Visualized, very consistent, 207 00:10:32,240 --> 00:10:34,600 steady revenue growth. The only time that it's dipped 208 00:10:34,600 --> 00:10:37,880 in recent history is from COVID. Comparable seam store sales were 209 00:10:37,880 --> 00:10:40,800 up 9% on a constant currency basis. 210 00:10:41,200 --> 00:10:46,240 Direct to consumer which is the online was up 17% on a constant 211 00:10:46,240 --> 00:10:48,680 dollar basis. Lulu's a company that right now 212 00:10:48,680 --> 00:10:50,760 is doing great. They're growing their revenue, 213 00:10:50,960 --> 00:10:52,160 they're growing their cash flows. 214 00:10:52,160 --> 00:10:55,120 Overtime, we see very strong growth across every segment of 215 00:10:55,120 --> 00:10:56,320 their business. Right now. 216 00:10:56,320 --> 00:10:58,920 Lululemon's growing substantially faster than Nike, 217 00:10:58,920 --> 00:11:00,880 but it's priced at a lower valuation. 218 00:11:01,280 --> 00:11:04,040 So as long as this company continues with this level of 219 00:11:04,040 --> 00:11:07,160 growth, lululemon will substantially outperform Nike. 220 00:11:07,240 --> 00:11:09,880 But the biggest reason that investors price companies like 221 00:11:09,880 --> 00:11:13,440 Lululemon at a lower multiple than Nike, despite it having 222 00:11:13,440 --> 00:11:16,240 faster growth and faster fundamental growth, is because 223 00:11:16,240 --> 00:11:20,000 Nike has the longterm proven brand value that is the big 224 00:11:20,000 --> 00:11:21,760 distinction. When I look at the problem with 225 00:11:21,760 --> 00:11:24,320 clothing companies like this, in my opinion, they're very 226 00:11:24,320 --> 00:11:27,320 unpredictable. Most of them have their day in 227 00:11:27,320 --> 00:11:30,400 the sun where everything seems to be going as good as possible 228 00:11:30,400 --> 00:11:33,040 for these companies. And we're seeing this happen 229 00:11:33,080 --> 00:11:36,640 right now with lululemon. It's firing on all cylinders. 230 00:11:36,680 --> 00:11:38,400 Everything's going as good as possible. 231 00:11:38,440 --> 00:11:39,880 But we've seen this type of thing before. 232 00:11:39,880 --> 00:11:42,400 Remember the company called VF Corporation? 233 00:11:42,700 --> 00:11:44,820 You probably don't know the parent company, but you might 234 00:11:44,820 --> 00:11:47,900 recognize some of the brands they have, brands like Vans, The 235 00:11:47,900 --> 00:11:51,700 North Face, Timberland, Dickies. You see all of these brands in 236 00:11:51,700 --> 00:11:55,180 malls all the time. You have Jansport, Supreme, 237 00:11:55,220 --> 00:11:58,500 Smart World, Kipling. This company's a conglomerate of 238 00:11:58,500 --> 00:12:01,340 once incredibly attractive brands that seem to have the 239 00:12:01,340 --> 00:12:04,140 Lulu type of growth. But now we look at it. 240 00:12:04,220 --> 00:12:06,340 The company's down 27% year to date. 241 00:12:06,540 --> 00:12:08,940 We zoom out in the past year, it's down 50%. 242 00:12:09,260 --> 00:12:12,140 The past five years it's down 78%. 243 00:12:12,630 --> 00:12:15,430 So the majority of the market cap has completely evaporated 244 00:12:15,510 --> 00:12:18,190 for this company that owns all of these great brands. 245 00:12:18,230 --> 00:12:21,710 And in the past ten years, it's given -57% returns. 246 00:12:21,870 --> 00:12:24,830 Sure, if you time the company correctly, buying it before its 247 00:12:24,830 --> 00:12:27,830 rise and then selling it when it's at the top, you made a lot 248 00:12:27,830 --> 00:12:30,230 of money. So maybe investors in Lululemon 249 00:12:30,230 --> 00:12:32,870 will be able to accurately time this company, but history has 250 00:12:32,870 --> 00:12:34,750 proven that that's very difficult to do. 251 00:12:34,830 --> 00:12:38,370 In most cases, investors buy at inopportune times and they end 252 00:12:38,370 --> 00:12:40,730 up doing poorly. Another company that once had 253 00:12:40,730 --> 00:12:44,090 premium brand value and clothing category was Under Armour. 254 00:12:44,170 --> 00:12:47,490 Under Armour is in constant competition with Nike as being 255 00:12:47,490 --> 00:12:49,810 one of the premium athletic wear brands. 256 00:12:50,050 --> 00:12:53,650 They try to sponsor athletes and half their stores have the same 257 00:12:53,650 --> 00:12:57,010 level of pricing power as Nike. And the company had a very 258 00:12:57,010 --> 00:13:00,290 similar story. It's down 22% year to date, down 259 00:13:00,290 --> 00:13:03,970 5.8% over the past year. In the past five years, it's 260 00:13:03,970 --> 00:13:07,610 down 62% with a tremendous amount of volatility. 261 00:13:07,980 --> 00:13:12,140 And in the past decade, Under Armour has given returns of 262 00:13:12,140 --> 00:13:15,260 -57%. And this is a clothing company 263 00:13:15,260 --> 00:13:18,260 that once had great brand value. So even though a company like 264 00:13:18,260 --> 00:13:21,300 Lulu has everything going well for it right now, it makes me a 265 00:13:21,300 --> 00:13:24,140 little concerned when I view the history of other similar 266 00:13:24,140 --> 00:13:26,220 companies. For that reason, this is going 267 00:13:26,220 --> 00:13:28,540 to be one that I don't own. Now moving on, we have some 268 00:13:28,540 --> 00:13:31,900 breaking news that Charter is having a dispute with Disney. 269 00:13:32,340 --> 00:13:35,100 Now that's the euphemism. A dispute or the other 270 00:13:35,100 --> 00:13:38,580 euphemism, which is negotiation. But the true way of describing 271 00:13:38,580 --> 00:13:41,220 this is they're having a bitter disagreement. 272 00:13:41,620 --> 00:13:45,620 And I'm not going to sit back and pretend like I don't enjoy 273 00:13:45,620 --> 00:13:48,860 seeing two giant companies go after each other. 274 00:13:48,860 --> 00:13:51,860 I think it's just nice to see two companies battle to the 275 00:13:51,860 --> 00:13:53,620 bitter end. And that's what we're seeing 276 00:13:53,620 --> 00:13:55,900 with Charter Communication and Disney. 277 00:13:56,100 --> 00:13:57,500 Let's look at some of the details here. 278 00:13:57,780 --> 00:14:00,540 NFL season is kicking off this Sunday. 279 00:14:00,620 --> 00:14:04,950 So right now NFL season is starting and as that's starting 280 00:14:04,990 --> 00:14:10,870 we have ABC and ESPN and FX, all Disney owned content being 281 00:14:10,910 --> 00:14:13,830 booted off of Charter. So right now these channels are 282 00:14:13,830 --> 00:14:15,430 gone. They're not accessible on 283 00:14:15,430 --> 00:14:18,430 Charter. ABC, ESPN, FX, all gone. 284 00:14:18,670 --> 00:14:21,030 The most important one is probably ESPN. 285 00:14:21,270 --> 00:14:24,030 Having this channel booted off right as football season is 286 00:14:24,030 --> 00:14:27,550 starting is really something that puts pressure on Disney. 287 00:14:27,830 --> 00:14:31,350 Now Charter Spectrum TV service has roughly 14.7 million 288 00:14:31,350 --> 00:14:35,210 customers across 41 states with some of its top TV markets being 289 00:14:35,210 --> 00:14:38,650 New York, Los Angeles, Dallas, Fort Worth, TX and Atlanta. 290 00:14:38,730 --> 00:14:41,130 So they're dealing with 14 and a half million customers that have 291 00:14:41,130 --> 00:14:44,530 lost access to Disney content. This Friday, the Charter 292 00:14:44,530 --> 00:14:48,330 executives called the pay TV ecosystem quote broken. 293 00:14:48,610 --> 00:14:51,290 They said that they push for a revamp deal with Disney that 294 00:14:51,290 --> 00:14:54,130 would see Charter cable customers receive access to 295 00:14:54,130 --> 00:14:57,450 Disney's ad supported streaming services like Disney Plus and 296 00:14:57,450 --> 00:15:02,210 ESPN Plus at no additional cost. So basically Charters trying to 297 00:15:02,710 --> 00:15:05,830 rewrite the deal and what they believe is updating it for 298 00:15:05,830 --> 00:15:09,230 modern times. Disney's trying to stick to the 299 00:15:09,230 --> 00:15:12,990 old times of charging high fees for having their content on 300 00:15:12,990 --> 00:15:15,790 cable TV. Basically Disney's wanting to 301 00:15:15,790 --> 00:15:20,150 preserve the old cable economics and Charter saying no you're 302 00:15:20,150 --> 00:15:22,390 not, this isn't going to fly anymore. 303 00:15:22,510 --> 00:15:25,350 Charter believes that Disney has offered a traditional longterm 304 00:15:25,350 --> 00:15:28,390 deal and has not seriously engaged on charters 305 00:15:28,590 --> 00:15:31,960 transformational partnership proposal insisting on high 306 00:15:31,960 --> 00:15:35,320 penetration payment minimums despite its own a la carte 307 00:15:35,320 --> 00:15:37,520 offerings. Forcing Disney channels into 308 00:15:37,520 --> 00:15:40,920 packages where they are not included today against customers 309 00:15:40,920 --> 00:15:42,800 will. So basically Charter saying that 310 00:15:42,800 --> 00:15:46,680 Disney wants Charter to force their content on every customer 311 00:15:46,840 --> 00:15:50,720 and charge every customer more for their content even the ones 312 00:15:50,720 --> 00:15:55,440 that have no interest in the ESPN or ABC or FX. 313 00:15:55,720 --> 00:15:57,840 They want to force them to have that content anyway. 314 00:15:58,160 --> 00:16:01,080 A lot of people complain that streaming is expensive, but All 315 00:16:01,080 --> 00:16:03,360 in all, at least you get to choose and pick what you pay 316 00:16:03,360 --> 00:16:05,440 for. You can pay for Netflix and you 317 00:16:05,440 --> 00:16:07,760 can pay for Max. You can pay for Amazon Prime 318 00:16:07,760 --> 00:16:11,960 Video or Apple TV Plus, or you can mix and match any of them. 319 00:16:12,240 --> 00:16:15,280 That is the streaming way, where you can segment and pay for the 320 00:16:15,280 --> 00:16:17,160 specific streaming services you want. 321 00:16:17,360 --> 00:16:21,200 With cable TV, you have to buy everything all at once, all the 322 00:16:21,200 --> 00:16:23,160 time. There's no picking and choosing 323 00:16:23,160 --> 00:16:25,440 what you want. Charters trying to update their 324 00:16:25,440 --> 00:16:27,880 offering to make it so you can pick and choose what you want. 325 00:16:28,200 --> 00:16:29,880 Disney does not want them to do that. 326 00:16:30,270 --> 00:16:32,670 They say Disney's traditional approach would result in a 327 00:16:32,670 --> 00:16:36,030 dramatic increase in cost to customers, many of whom don't 328 00:16:36,030 --> 00:16:39,590 view, want or even subscribe to Disney and ESPN content. 329 00:16:39,830 --> 00:16:42,870 Charter has also offered a shorter extension of the current 330 00:16:42,870 --> 00:16:45,870 contract to further discuss the benefits of Charter's proposal, 331 00:16:46,110 --> 00:16:48,950 which Disney declined. Now, that last one's surprising. 332 00:16:49,150 --> 00:16:51,390 Basically, Charter just said that they want to extend the 333 00:16:51,390 --> 00:16:54,700 contract temporarily while they're in negotiations so they 334 00:16:54,700 --> 00:16:57,780 don't disrupt their customers. And then the big take away here 335 00:16:58,020 --> 00:17:00,900 is that Charter seems done with Disney, they say. 336 00:17:00,900 --> 00:17:04,500 In summary, while we believe content is valuable and Disney 337 00:17:04,500 --> 00:17:07,420 is an excellent content creator, we have already reached the 338 00:17:07,420 --> 00:17:11,780 point of economic indifference. With the current model, Disney 339 00:17:11,780 --> 00:17:15,560 and Charter will either create value for the video consumer or 340 00:17:15,560 --> 00:17:18,200 we will pivot to an alternative video solutions. 341 00:17:18,319 --> 00:17:20,760 Charter is done with Disney's tactics. 342 00:17:20,760 --> 00:17:23,520 Disney's trying to strong arm Charter and Charter saying that 343 00:17:23,520 --> 00:17:25,720 they don't care. Now you might ask who's going to 344 00:17:25,720 --> 00:17:28,640 win and who's going to lose in this situation, and the truth 345 00:17:28,640 --> 00:17:30,840 is, is that both of them are losing. 346 00:17:30,880 --> 00:17:33,200 That's why both of their stock prices are lower. 347 00:17:33,440 --> 00:17:37,840 Disney's down 2.2%, Charter's down 2.8%, and when it comes 348 00:17:37,840 --> 00:17:40,720 down to it, what they're trying to do is fight over the 349 00:17:40,800 --> 00:17:43,520 economics of an ever shrinking pie. 350 00:17:43,880 --> 00:17:46,720 Less and less people watching cable TV every single year, 351 00:17:47,040 --> 00:17:49,440 Charter knows that, so they're not too concerned about it. 352 00:17:49,720 --> 00:17:53,120 They provide Internet as well. But Disney seems to be set in 353 00:17:53,120 --> 00:17:55,120 the past. They want to have the same type 354 00:17:55,120 --> 00:17:58,440 of relationship, the same type of distribution, and the same 355 00:17:58,440 --> 00:18:01,040 type of arrangements and agreements that they had ten 356 00:18:01,040 --> 00:18:03,040 years ago. And it doesn't seem like that's 357 00:18:03,040 --> 00:18:05,160 going to work now. Moving on, I've had a lot of 358 00:18:05,160 --> 00:18:07,960 requests of people wanting to know about my retirement account 359 00:18:08,440 --> 00:18:11,680 and I've recently just started a retirement account this year, so 360 00:18:11,680 --> 00:18:13,680 I want to go over all the details right now. 361 00:18:14,160 --> 00:18:17,720 First of all, I decided to start what's called a Roth IRAA. 362 00:18:18,240 --> 00:18:21,240 Roth IRA is an individual retirement account where the 363 00:18:21,240 --> 00:18:25,560 contributions, what you put in, that's from taxable income. 364 00:18:25,880 --> 00:18:29,160 But when you pull the money out later in retirement, you can 365 00:18:29,160 --> 00:18:32,760 pull that money out and any of the gains taxfree. 366 00:18:33,080 --> 00:18:36,270 So it is a tax advantage account, and it's an individual 367 00:18:36,270 --> 00:18:38,790 account that's not linked to your employer. 368 00:18:39,030 --> 00:18:42,070 Now, it does have all sorts of limitations and cash 369 00:18:42,070 --> 00:18:45,550 contribution limitations based on your income and your marriage 370 00:18:45,550 --> 00:18:48,990 status and all of that stuff. In my case, I was above the 371 00:18:48,990 --> 00:18:52,270 income contribution limit, which means that I had to do something 372 00:18:52,270 --> 00:18:53,950 extra. I had to do what's called a 373 00:18:53,950 --> 00:18:57,030 backdoor Roth IRA, which means that I had to create two 374 00:18:57,030 --> 00:19:00,150 accounts, a Traditional IRA and a Roth IRA. 375 00:19:00,470 --> 00:19:04,790 And then I had to 1st put the money in the Traditional IRA and 376 00:19:04,790 --> 00:19:07,750 then I had to do an account transfer where I move the assets 377 00:19:07,750 --> 00:19:09,870 from the traditional into the Roth. 378 00:19:10,150 --> 00:19:13,310 That is a backdoor Roth IRA. Now, why does the government 379 00:19:13,310 --> 00:19:16,070 force you to do this extra step if you're above a certain level 380 00:19:16,070 --> 00:19:18,270 of income? There's really no rhyme or 381 00:19:18,270 --> 00:19:21,070 reason to it. The end is the exact same, but 382 00:19:21,070 --> 00:19:24,070 it's just one additional step you have to do if you make a 383 00:19:24,070 --> 00:19:26,670 certain amount of money. Now as you can see, this isn't 384 00:19:26,670 --> 00:19:28,950 on M1 Finance. It looks a little bit different. 385 00:19:29,070 --> 00:19:31,910 That's because this is on a brokerage called Schwab, one of 386 00:19:31,910 --> 00:19:34,230 the big ones, along with Fidelity and Vanguard. 387 00:19:34,670 --> 00:19:37,470 The reason that I chose to do this on Schwab instead of M1 388 00:19:37,470 --> 00:19:41,550 Finance was simply because I have almost all of my finances 389 00:19:41,630 --> 00:19:46,550 on M1 Finance. I currently have over $650,000 390 00:19:46,550 --> 00:19:49,750 in value on M1 Finance, and I thought it might be good just to 391 00:19:49,750 --> 00:19:52,990 have a bit of diversification and have one retirement account 392 00:19:53,070 --> 00:19:56,030 on a different brokerage. So I'm not really concerned 393 00:19:56,030 --> 00:19:58,230 about M1 Finance. I have no reason to be concerned 394 00:19:58,230 --> 00:20:01,110 about it, but I thought it's good practice to have more than 395 00:20:01,110 --> 00:20:03,700 one brokerage. Now as you may also notice, I 396 00:20:03,700 --> 00:20:06,460 only have one position in this portfolio. 397 00:20:06,740 --> 00:20:10,340 I made it very simple. I just purchased an ETF called 398 00:20:10,340 --> 00:20:12,100 SCHG. That's it. 399 00:20:12,340 --> 00:20:16,180 I put $6500 into the account. That's the most I can do This 400 00:20:16,180 --> 00:20:22,260 year I bought 87 shares of SCHG. It's gone up to $150.00 already. 401 00:20:22,460 --> 00:20:27,420 So it's around $6750 so far, which is less than 1% of my 402 00:20:27,420 --> 00:20:30,620 total investments if you added up all of my portfolios. 403 00:20:31,030 --> 00:20:34,510 So this still is a very small amount of money compared to what 404 00:20:34,510 --> 00:20:38,110 I have going into my other portfolios, but I've decided to 405 00:20:38,110 --> 00:20:42,230 put all of that money into SCHG and I want to go over that ETF 406 00:20:42,230 --> 00:20:44,430 for a second. First of all, the age at which 407 00:20:44,430 --> 00:20:48,310 you can start withdrawing money from your Roth RA is 59 1/2, 408 00:20:48,750 --> 00:20:53,670 meaning that as a 33 year old, I have 26.5 years until I'll be 409 00:20:53,670 --> 00:20:58,070 able to touch this money. 26 1/2 years of time for this, the 410 00:20:58,070 --> 00:21:02,590 compound before I even start to do a single cell, a single 411 00:21:02,590 --> 00:21:04,790 withdraw. So that's a lot of time. 412 00:21:04,790 --> 00:21:07,270 Now when I was thinking about that amount of time and the 413 00:21:07,270 --> 00:21:09,590 amount of compounding that can happen over that amount of time, 414 00:21:09,910 --> 00:21:12,790 I wanted to focus on companies that I think will move a great 415 00:21:12,790 --> 00:21:15,550 distance between now and then growth companies. 416 00:21:15,550 --> 00:21:17,270 So I looked over a lot of different funds. 417 00:21:17,590 --> 00:21:21,230 There are ones like QQQ, which has done phenomenally well, but 418 00:21:21,230 --> 00:21:23,590 there's things that I didn't like about the QQQ. 419 00:21:23,790 --> 00:21:27,110 The thing that I really didn't like about the QQQ is it's based 420 00:21:27,110 --> 00:21:30,480 upon the NASDAQ. Meaning every company that the 421 00:21:30,480 --> 00:21:33,920 QQQ holds has to be listed on the NASDAQ. 422 00:21:34,000 --> 00:21:36,160 Otherwise it simply doesn't hold that company. 423 00:21:36,440 --> 00:21:38,600 For example, we can look at MasterCard. 424 00:21:39,040 --> 00:21:42,480 MasterCard is not listed on the NASDAQ, it's listed on the New 425 00:21:42,480 --> 00:21:45,760 York Stock Exchange. So MasterCard, despite being an 426 00:21:45,760 --> 00:21:49,040 incredibly powerful company, one that's growing tremendously 427 00:21:49,040 --> 00:21:52,240 fast, it's not listed on the QQQ. 428 00:21:52,760 --> 00:21:56,160 QQQ doesn't hold MasterCard. The QQQ doesn't hold visas well 429 00:21:56,160 --> 00:21:58,360 because it's listed on the New York Stock Exchange. 430 00:21:58,770 --> 00:22:01,970 So both of these companies are in the SP500, but they're not on 431 00:22:01,970 --> 00:22:06,490 the QQQ simply because the QQQ is biased towards its own 432 00:22:06,490 --> 00:22:10,250 exchange, which is the NASDAQ. That's its selection criteria. 433 00:22:10,290 --> 00:22:12,770 And I believe that that artificial boundary of only 434 00:22:12,770 --> 00:22:16,970 picking between an exchange is not good portfolio construction. 435 00:22:17,130 --> 00:22:21,090 Now schg is different. It is Schwab's US Large Cap 436 00:22:21,090 --> 00:22:24,410 Growth ETF and its selection criteria is far less biased than 437 00:22:24,410 --> 00:22:26,930 the QQQ and it's far more logical. 438 00:22:27,010 --> 00:22:30,210 Here's a description from FactSet of how SCHG works. 439 00:22:30,530 --> 00:22:33,890 SCHG is a diverse ETF for large cap growth exposure. 440 00:22:34,210 --> 00:22:37,690 It selects growth companies from the 750 largest companies by 441 00:22:37,690 --> 00:22:41,290 capitalization based on 6 fundamental factors, which 442 00:22:41,290 --> 00:22:44,450 include projected earnings growth as well as trailing 443 00:22:44,450 --> 00:22:47,210 revenue and earnings growth. Because it's drawing from a 444 00:22:47,210 --> 00:22:50,810 larger selection universe than our benchmark, SCHG has a 445 00:22:50,890 --> 00:22:54,050 significant mid cap tilt. Nevertheless, it provides 446 00:22:54,050 --> 00:22:56,530 similar exposure across broader set of holdings. 447 00:22:56,770 --> 00:22:59,930 The index rebalances quarterly and undergoes an annual 448 00:22:59,930 --> 00:23:02,730 reconstitution in September. So when we look at the amount of 449 00:23:02,730 --> 00:23:07,290 holdings in SCG, it's around 240 holdings and the names in this 450 00:23:07,290 --> 00:23:10,210 portfolio are really fast growing names. 451 00:23:10,370 --> 00:23:14,650 We have Apple, Microsoft, Amazon, NVIDIA, Google, Tesla, 452 00:23:14,650 --> 00:23:19,090 Meta, United Health Group, which is also not in the QQQ, but 453 00:23:19,090 --> 00:23:21,680 that's a fast growing company. We have Eli, Lilly. 454 00:23:21,680 --> 00:23:24,960 We have Visa, Broadcom, MasterCard, Adobe, Costco, 455 00:23:24,960 --> 00:23:28,760 Salesforce, Thermo, Fisher, Scientific, Netflix, so on and 456 00:23:28,760 --> 00:23:30,960 so forth. As you go down this list, you 457 00:23:30,960 --> 00:23:33,200 have many recognizable growth companies. 458 00:23:33,200 --> 00:23:36,200 So what I plan on doing with this Roth RA is pretty simple. 459 00:23:36,520 --> 00:23:40,120 Every year I'm going to put $6500 in it, I'm going to buy 460 00:23:40,120 --> 00:23:43,960 more schg and that's it. There's going to be nothing else 461 00:23:43,960 --> 00:23:46,760 I do with this portfolio, and if I do things correctly, I'll 462 00:23:46,760 --> 00:23:49,520 literally never concern myself or look at this account. 463 00:23:49,930 --> 00:23:52,450 I want it to silently be building in the background. 464 00:23:52,570 --> 00:23:55,610 So even though I have my primary investment portfolios, I think 465 00:23:55,610 --> 00:23:57,570 it's good to have a retirement account working in the 466 00:23:57,570 --> 00:24:00,490 background as well. The way that I think about it is 467 00:24:00,490 --> 00:24:02,610 I'm trying my best with this portfolio. 468 00:24:02,930 --> 00:24:05,530 I'm putting my best behind the research with these companies, 469 00:24:05,770 --> 00:24:08,450 trying to find the best investments possible, and I do 470 00:24:08,450 --> 00:24:10,050 think I'll have really good performance. 471 00:24:10,370 --> 00:24:13,890 But if I screw things up or things don't go well with this 472 00:24:13,890 --> 00:24:16,970 portfolio, then I have my retirement account working in 473 00:24:16,970 --> 00:24:19,150 the background. So even if things go 474 00:24:19,150 --> 00:24:22,030 dramatically wrong with my individual investments, I'll 475 00:24:22,030 --> 00:24:24,350 still have a retirement with my Roth IRA. 476 00:24:24,590 --> 00:24:26,150 Now moving on, you know what day it is? 477 00:24:26,150 --> 00:24:28,430 It's Friday. Every Friday we look to TikTok 478 00:24:28,430 --> 00:24:29,790 to get the best financial advice. 479 00:24:29,830 --> 00:24:33,950 And this individual has some input on how to save money on 480 00:24:33,950 --> 00:24:35,230 food. Let's go ahead and hear his 481 00:24:35,230 --> 00:24:38,110 strategy. Your biggest expense in New York 482 00:24:38,110 --> 00:24:40,710 City is going to be food, and I got away. 483 00:24:40,870 --> 00:24:42,710 You could eat for free the best food. 484 00:24:43,110 --> 00:24:45,870 You got love it what you do, you stand in front of a nice 485 00:24:45,910 --> 00:24:49,110 building, people that work at nice buildings eat food, they 486 00:24:49,150 --> 00:24:51,950 order delivery guys and you act like you're on your phone. 487 00:24:51,950 --> 00:24:54,270 You, you know, hey, you save a bunch of big numbers. 488 00:24:54,430 --> 00:24:56,670 You know, I want the compound interest, dividends. 489 00:24:56,670 --> 00:24:59,350 And when you see these delivery guys pull up, you give them that 490 00:24:59,350 --> 00:25:04,590 sign and interest on it. Now that's brilliant. 491 00:25:04,590 --> 00:25:06,510 You just stand in front of a building, pretend like you're 492 00:25:06,510 --> 00:25:08,830 one of the workers there, and then you flag down one of the 493 00:25:08,830 --> 00:25:11,070 delivery people. They hand you the food. 494 00:25:11,890 --> 00:25:15,010 Now, I might be critical of this and you might think that this is 495 00:25:15,010 --> 00:25:19,290 a joke, but this type of thing has actually been happening a 496 00:25:19,290 --> 00:25:20,970 lot. In fact, when I was doing my 497 00:25:20,970 --> 00:25:23,970 research on Chipotle and looking into that company before making 498 00:25:23,970 --> 00:25:26,850 the purchase, one of the things I came across was a lot of 499 00:25:26,850 --> 00:25:29,930 people mentioning that the mobile pickup shelves that they 500 00:25:29,930 --> 00:25:33,770 have in every store, well, a lot of people are just going in and 501 00:25:33,770 --> 00:25:37,670 grabbing random meals and leaving ones that they that 502 00:25:37,750 --> 00:25:39,910 weren't theirs and ones that they didn't pay for. 503 00:25:39,990 --> 00:25:41,830 They weren't even pretending like it was theirs. 504 00:25:41,870 --> 00:25:44,470 But people walking away with other people's orders is so 505 00:25:44,470 --> 00:25:48,190 commonplace now among Chipotle pickup that a lot of the 506 00:25:48,190 --> 00:25:51,190 locations are putting the meals behind the counter and you have 507 00:25:51,190 --> 00:25:53,270 to give them your name to confirm you're the one who paid 508 00:25:53,270 --> 00:25:55,150 for it. So this tip seems accurate. 509 00:25:55,190 --> 00:25:57,270 If you want some free food, stand in front of a building 510 00:25:57,270 --> 00:25:59,270 like this and pretend that you order DoorDash. 511 00:25:59,350 --> 00:26:01,430 That's all for this episode. I'll see you in the next one.