1 00:00:00,080 --> 00:00:02,320 Welcome back, everyone today on the Joseph Carlson Show. 2 00:00:02,320 --> 00:00:08,039 The market is surging right now. The Dow Jones is up 2.2%, the 3 00:00:08,039 --> 00:00:14,360 S&P 500 is up 2.7%, and the NASDAQ is up a whopping 3.3%. 4 00:00:14,560 --> 00:00:18,280 And all of this comes as a result of the China trade deal. 5 00:00:18,640 --> 00:00:21,240 That is the biggest trade deal. That's the one that really 6 00:00:21,240 --> 00:00:22,800 matters. That's where we do the most 7 00:00:22,800 --> 00:00:26,080 business outside of the US. We buy so much stuff from China, 8 00:00:26,280 --> 00:00:29,280 and China had the highest tariffs and we have a trade deal 9 00:00:29,280 --> 00:00:30,760 announced. Now we're going to be looking at 10 00:00:30,760 --> 00:00:33,600 the details of this deal, trying to get to the bottom of it. 11 00:00:33,800 --> 00:00:36,360 We'll be looking at an interview with Scott Besant where he lays 12 00:00:36,360 --> 00:00:38,880 out the framework. He talks about how the weekend 13 00:00:38,880 --> 00:00:41,560 went in China, how the negotiations are going. 14 00:00:41,560 --> 00:00:44,200 He talks about his experience negotiating with the Chinese 15 00:00:44,200 --> 00:00:47,200 leaders and how they're reacting to this and how we seem to be 16 00:00:47,200 --> 00:00:50,200 closer together in our viewpoints than previously 17 00:00:50,200 --> 00:00:52,600 thought. So this great news of at least 18 00:00:52,600 --> 00:00:55,200 there being a trade deal on the horizon and things going better 19 00:00:55,200 --> 00:00:57,800 than expected is causing this market to surge. 20 00:00:58,040 --> 00:01:01,160 Now, on top of that, we also have big news from President 21 00:01:01,160 --> 00:01:03,240 Trump. He announced, once again, his 22 00:01:03,240 --> 00:01:06,440 effort to lower drug prices within the United States. 23 00:01:06,440 --> 00:01:09,480 He's sick of Americans paying more than their counterparts in 24 00:01:09,480 --> 00:01:11,920 Europe and other places. And so he's implementing an 25 00:01:11,920 --> 00:01:14,600 executive order to combat this. We'll be looking over the 26 00:01:14,600 --> 00:01:17,680 details of this effort to lower drug pricing and what it means 27 00:01:17,680 --> 00:01:19,120 for these pharmaceutical companies. 28 00:01:19,120 --> 00:01:22,400 And then, of course, anytime the market has a massive recovery 29 00:01:22,400 --> 00:01:25,120 like we've seen over the past month, we have the talking 30 00:01:25,120 --> 00:01:26,360 heads. We have people going on and 31 00:01:26,360 --> 00:01:29,120 expressing their opinions, one of which is Mike Wilson from 32 00:01:29,120 --> 00:01:32,680 Morgan Stanley, which I want to highlight today is the biggest 33 00:01:32,680 --> 00:01:37,040 fail over the past month, The person who really got this more 34 00:01:37,040 --> 00:01:40,760 wrong than anyone could imagine. Now we also have a report that 35 00:01:41,000 --> 00:01:44,960 Microsoft Azure, Microsoft's cloud, is growing much faster 36 00:01:44,960 --> 00:01:48,160 than its counterparts with Amazon Web Services and Google 37 00:01:48,160 --> 00:01:49,880 Cloud. How is that the case? 38 00:01:49,920 --> 00:01:52,200 Why is Microsoft Azure growing so fast? 39 00:01:52,560 --> 00:01:56,520 Well, this has stumped many analysts and Bloomberg editors 40 00:01:56,520 --> 00:01:59,160 and different investors, but I have a theory. 41 00:01:59,440 --> 00:02:03,920 I'll be going over my theory of why I believe Microsoft Azure is 42 00:02:03,920 --> 00:02:06,080 growing so fast. So we have all of that to get 43 00:02:06,080 --> 00:02:07,960 into in this episode, plus much more. 44 00:02:08,080 --> 00:02:10,160 Let's go ahead and jump in Now We kick things off with the 45 00:02:10,160 --> 00:02:12,640 headline news that there is a new trade deal being announced 46 00:02:12,640 --> 00:02:15,200 with China. We have many of our diplomats, 47 00:02:15,200 --> 00:02:17,760 Scott Besant and other people going over to China over the 48 00:02:17,760 --> 00:02:21,720 weekend to meet with Chinese officials and to just discuss 49 00:02:21,720 --> 00:02:23,880 things. Now, this is called a trade 50 00:02:23,880 --> 00:02:26,560 deal, but in reality, it's a 90 day pause. 51 00:02:26,880 --> 00:02:29,440 So we have a framework for a deal. 52 00:02:29,640 --> 00:02:32,800 We have a mutual agreeance, and more importantly, it seems like 53 00:02:32,800 --> 00:02:35,680 we have mutual respect between both countries trying to 54 00:02:35,680 --> 00:02:39,120 accomplish a similar goal. The big storyline here, and the 55 00:02:39,120 --> 00:02:42,080 thing that I think investors are so excited about is the fact 56 00:02:42,080 --> 00:02:44,600 that the US and China seem closer together than previously 57 00:02:44,600 --> 00:02:46,800 thought. At one point, it seemed like we 58 00:02:46,800 --> 00:02:48,720 were never going to come to an agreement on anything. 59 00:02:48,960 --> 00:02:51,040 The tariff battle was just going to race higher and higher. 60 00:02:51,040 --> 00:02:53,800 But it seems like that narrative is dissolving quickly now. 61 00:02:53,800 --> 00:02:56,600 The Treasury Secretary, Scott Besant, is the one assigned to 62 00:02:56,600 --> 00:02:59,240 dealing with China. He's the one orchestrating these 63 00:02:59,240 --> 00:03:01,360 deals. And he was in China over this 64 00:03:01,360 --> 00:03:03,360 weekend talking to their top authorities. 65 00:03:03,520 --> 00:03:06,320 And he explains how things are evolving with these discussions. 66 00:03:06,840 --> 00:03:11,600 Look, the, the, the vice Premier is a very skilled negotiator. 67 00:03:12,040 --> 00:03:15,480 He is a high-ranking Chinese official. 68 00:03:16,120 --> 00:03:21,040 We, I had a very good economic briefing beforehand, but that 69 00:03:21,040 --> 00:03:25,840 there was no sense of anxiety. There was a sense of moving 70 00:03:25,840 --> 00:03:28,160 forward. There's a sense of mutual 71 00:03:28,160 --> 00:03:31,120 respect, there's a sense that we had shared interest. 72 00:03:31,560 --> 00:03:35,920 But I have seen what's going on in the Chinese economy. 73 00:03:36,080 --> 00:03:40,480 We can see what's going on with the shipments to the US And 74 00:03:40,600 --> 00:03:43,800 again, we are the deficit country. 75 00:03:43,920 --> 00:03:47,960 Historically, the deficit country has a better negotiating 76 00:03:47,960 --> 00:03:50,200 position. Now both countries have 77 00:03:50,200 --> 00:03:52,160 interests in saving face on this. 78 00:03:52,360 --> 00:03:55,200 China doesn't want to look like they're weak or being bullied, 79 00:03:55,480 --> 00:03:58,680 even though they have reports that this tariff war is bad for 80 00:03:58,680 --> 00:04:01,120 them. And China is understanding to 81 00:04:01,120 --> 00:04:04,400 some of the concerns the United States has the over reliance on 82 00:04:04,400 --> 00:04:08,400 Chinese production, especially for critical goods, which was 83 00:04:08,400 --> 00:04:11,320 exposed during COVID. We saw during COVID a lot of the 84 00:04:11,320 --> 00:04:15,240 things that we needed to survive were made in China, and once we 85 00:04:15,240 --> 00:04:18,200 weren't able to get them there, that was problematic and a 86 00:04:18,279 --> 00:04:20,160 vulnerability for the United States. 87 00:04:20,519 --> 00:04:24,800 Now, Besant also goes on to highlight simply how the Chinese 88 00:04:24,800 --> 00:04:27,880 have set up their economy. It is not a way that they're 89 00:04:27,880 --> 00:04:30,600 accepting anymore, not a way that the entire world is 90 00:04:30,600 --> 00:04:33,760 accepting anymore. He calls this dual circulation. 91 00:04:34,160 --> 00:04:38,720 Chinese have an economic plan called dual circulation and with 92 00:04:38,720 --> 00:04:44,320 dual circulation our goal is to make sure dual circulation means 93 00:04:44,440 --> 00:04:49,400 export and domestic use. Dual circulation cannot mean 94 00:04:49,400 --> 00:04:54,960 that China overproduces and that only Chinese goods are consumed 95 00:04:54,960 --> 00:04:58,360 in China and then they export the excess to the rest of the 96 00:04:58,360 --> 00:05:01,240 world. So we have had the equivalent, 97 00:05:01,480 --> 00:05:05,080 because of these high tariff rates, of an embargo on China, 98 00:05:05,360 --> 00:05:08,320 and those goods are going to leak to the rest of the world. 99 00:05:08,320 --> 00:05:11,760 So, you know, our negotiations, we don't need to tell other 100 00:05:11,760 --> 00:05:15,640 countries what they need to do. They are seeing this wave of 101 00:05:15,640 --> 00:05:17,640 Chinese goods coming to their shore. 102 00:05:17,920 --> 00:05:22,240 They have to find a home and that could be at a discount 103 00:05:22,240 --> 00:05:24,560 price, undercutting local producers. 104 00:05:24,920 --> 00:05:28,040 So he highlights this dual circulation problem as one where 105 00:05:28,040 --> 00:05:31,720 China allows for massive exports of all their excessive goods. 106 00:05:32,080 --> 00:05:34,520 And then at the same time they don't allow anyone to really 107 00:05:34,520 --> 00:05:37,760 sell within China. Now they allow some companies to 108 00:05:37,760 --> 00:05:41,120 do business in China, mostly retail companies, maybe Costco, 109 00:05:41,240 --> 00:05:45,320 Starbucks, a few manufacturers like Tesla and Apple. 110 00:05:45,840 --> 00:05:48,800 But China bans most American companies. 111 00:05:49,240 --> 00:05:51,280 They don't allow Google. They don't allow Netflix or 112 00:05:51,280 --> 00:05:55,360 Peacock or YouTube or Facebook or Microsoft most of their 113 00:05:55,360 --> 00:05:58,720 products, or LinkedIn or any great tech company. 114 00:05:58,880 --> 00:06:00,640 They're all basically banned in China. 115 00:06:01,040 --> 00:06:04,240 So China has their own companies that they sell to Chinese 116 00:06:04,240 --> 00:06:06,840 people, and then they also have their own companies and their 117 00:06:06,840 --> 00:06:08,920 own production that they sell outside of China. 118 00:06:09,480 --> 00:06:12,440 And that's a little bit unfair. That's basically what they're 119 00:06:12,440 --> 00:06:15,640 trying to balance here is making it so that it goes both ways. 120 00:06:15,920 --> 00:06:18,520 If you want to sell to the rest of the world, we need to be able 121 00:06:18,520 --> 00:06:20,840 to sell to you as well. And as he also highlights, this 122 00:06:20,840 --> 00:06:22,760 isn't only a problem for the United States. 123 00:06:23,080 --> 00:06:25,960 As soon as the US put on these tariffs, Europe realized that 124 00:06:25,960 --> 00:06:28,280 this is a big problem. They didn't want Chinese 125 00:06:28,280 --> 00:06:31,000 manufacturers to dump their products in their country as 126 00:06:31,000 --> 00:06:33,720 well, undercutting their local manufacturers. 127 00:06:33,840 --> 00:06:37,120 Now, Besson goes on to highlight that technically, this is just a 128 00:06:37,120 --> 00:06:39,160 pause. And we need to have an official 129 00:06:39,160 --> 00:06:42,520 trade deal by the end of 90 days for the tariffs not to resume 130 00:06:42,520 --> 00:06:45,840 back on China. So the pressures on, they know 131 00:06:45,840 --> 00:06:47,840 that Trump is willing to put these tariffs on. 132 00:06:47,840 --> 00:06:50,320 He's not just bluffing. He's done it before and he'll do 133 00:06:50,320 --> 00:06:52,280 it again. And that puts significant 134 00:06:52,280 --> 00:06:55,560 pressure on both parties to complete a comprehensive trade 135 00:06:55,560 --> 00:06:57,240 deal. The reason that the market is 136 00:06:57,240 --> 00:07:00,160 surging today, just based off the news that this is a pause, 137 00:07:00,320 --> 00:07:02,880 is that the market now predicts the likelihood of a deal being 138 00:07:02,880 --> 00:07:05,800 made by the end of 90 days is much higher than prior. 139 00:07:06,040 --> 00:07:08,120 It looks like things are headed in the right direction. 140 00:07:08,320 --> 00:07:10,680 Well, again, Andrew, this is just a pause. 141 00:07:11,000 --> 00:07:17,520 The April 2nd tariff level for China was 30, 24%, so we have 142 00:07:17,720 --> 00:07:23,960 moved that down from 34 to 10. We still have the 20% fentanyl 143 00:07:23,960 --> 00:07:27,680 tariffs that were put on in February. 144 00:07:27,880 --> 00:07:33,200 So we just in 2025, we have added 30%. 145 00:07:33,600 --> 00:07:36,640 And again, one, one of the most important things that we're 146 00:07:36,640 --> 00:07:40,440 doing, we do not want a generalized decoupling from 147 00:07:40,440 --> 00:07:42,480 China. But what we do want is a 148 00:07:42,480 --> 00:07:47,000 decoupling for for strategic necessities, which we were 149 00:07:47,000 --> 00:07:51,880 unable to obtain during COVID and we realized that efficient 150 00:07:51,960 --> 00:07:54,640 supply chains were not resilient supply chains. 151 00:07:54,880 --> 00:07:57,120 This is something again that the market can get behind. 152 00:07:57,400 --> 00:08:00,160 The market likes seeing that we're not having an overall 153 00:08:00,160 --> 00:08:03,440 decoupling with China, that we're not becoming overly 154 00:08:03,600 --> 00:08:06,760 protectionist and isolationist. We're still doing business with 155 00:08:06,760 --> 00:08:09,680 China, but we don't want to do it with our critical goods. 156 00:08:09,680 --> 00:08:12,480 The things that we need, if China doesn't want to give them 157 00:08:12,480 --> 00:08:15,120 to us, we need to be able to produce those things within the 158 00:08:15,120 --> 00:08:17,880 United States. So having this be more targeted 159 00:08:17,880 --> 00:08:21,040 and specific, protecting just the industries of critical 160 00:08:21,040 --> 00:08:23,600 things like steel and pharmaceuticals seems 161 00:08:23,600 --> 00:08:25,360 reasonable. And again, that's something that 162 00:08:25,360 --> 00:08:28,160 the market likes to see. So to summarize the extreme 163 00:08:28,160 --> 00:08:30,000 level, tariffs have been paused on China. 164 00:08:30,320 --> 00:08:33,760 There is mutual respect between both countries now negotiating 165 00:08:33,760 --> 00:08:37,360 towards a more mutual goal. China understands that the US 166 00:08:37,360 --> 00:08:39,919 cannot be reliant on these critical goods that they're 167 00:08:39,919 --> 00:08:42,679 manufacturing, and they understand that they can't be an 168 00:08:42,679 --> 00:08:45,920 export only economy. They have to allow some level of 169 00:08:45,920 --> 00:08:47,640 business in their country as well. 170 00:08:48,000 --> 00:08:50,240 And it seems like they're not only being receptive to that, 171 00:08:50,240 --> 00:08:52,080 but they also completely understand it and they're 172 00:08:52,080 --> 00:08:53,560 working towards these mutual goals. 173 00:08:54,040 --> 00:08:58,760 The optimism is is just emerging in the market because of these 174 00:08:58,760 --> 00:09:00,920 talks. You can fill it with investors 175 00:09:01,200 --> 00:09:05,000 renewed optimism in the United States, in the global markets, 176 00:09:05,000 --> 00:09:07,720 in the equity markets, everywhere, across the board. 177 00:09:07,760 --> 00:09:10,120 And this is all stuff that I must say should have been 178 00:09:10,120 --> 00:09:13,600 somewhat predictable. This was the most likely outcome 179 00:09:13,640 --> 00:09:16,520 from the beginning. On April 11th, I tweeted out my 180 00:09:16,520 --> 00:09:19,040 predictions going forward over the next three months. 181 00:09:19,360 --> 00:09:21,480 So this was during the market recovery. 182 00:09:21,480 --> 00:09:24,040 We're still in a pretty significant dip, around 10% 183 00:09:24,040 --> 00:09:26,680 lower than it is today. But I said what I'd like to see. 184 00:09:26,680 --> 00:09:29,400 Over the next three months, a series of trade deals get 185 00:09:29,400 --> 00:09:31,400 announced. Trump will parade these around 186 00:09:31,400 --> 00:09:34,040 the White House as the greatest deals made in the history of 187 00:09:34,040 --> 00:09:36,520 mankind. Trade deals with some countries 188 00:09:36,520 --> 00:09:39,320 will be made, further incentivizing them to be made 189 00:09:39,320 --> 00:09:42,120 with other countries. Eventually most non China 190 00:09:42,120 --> 00:09:44,960 territories will have made trade deals with the United States. 191 00:09:45,520 --> 00:09:48,840 I believe the market will look optimistically at every new 192 00:09:48,840 --> 00:09:52,080 trade deal being announced and eventually the Chinese tariffs 193 00:09:52,080 --> 00:09:55,120 will be removed as well, giving further optimism. 194 00:09:55,280 --> 00:09:58,000 I give the chance here that things could go South. 195 00:09:58,000 --> 00:10:02,200 We could see further escalation, refusal to make deals out of the 196 00:10:02,200 --> 00:10:04,120 United States, partnering with China. 197 00:10:04,400 --> 00:10:07,440 But I said that I'm very hopeful this is not what will happen. 198 00:10:07,760 --> 00:10:11,480 As frustrated as some leaders are with the US, I don't think 199 00:10:11,480 --> 00:10:15,040 they truly believe that the most rational step is to replace the 200 00:10:15,160 --> 00:10:17,800 US with China. I just never believed that was 201 00:10:17,800 --> 00:10:19,120 the option. From the beginning. 202 00:10:19,240 --> 00:10:21,520 I said that I believe it's most likely that deals are going to 203 00:10:21,520 --> 00:10:24,480 be made with the US and other countries and overall, the 204 00:10:24,480 --> 00:10:27,000 weighted tariff rate will continue to decline throughout 205 00:10:27,000 --> 00:10:28,800 the year. And that's exactly what we're 206 00:10:28,800 --> 00:10:30,400 seeing today. Now, I don't want to get ahead 207 00:10:30,400 --> 00:10:32,600 of myself. We only have the United Kingdom, 208 00:10:32,840 --> 00:10:35,120 but China's a big one. This was the whale. 209 00:10:35,120 --> 00:10:38,560 This is the big one in question. Having this out of the way paves 210 00:10:38,560 --> 00:10:40,440 the way for further deals to be done. 211 00:10:40,760 --> 00:10:43,440 Next up is United Nation. Having all these European 212 00:10:43,440 --> 00:10:46,400 countries make trade deals with the United States will breathe 213 00:10:46,520 --> 00:10:48,600 further optimism into this market. 214 00:10:48,640 --> 00:10:51,280 So overall, this is good news for the market. 215 00:10:51,320 --> 00:10:54,320 The market deserves to be going up today as it seems like a risk 216 00:10:54,320 --> 00:10:56,360 is being reduced. And if we look at the specific 217 00:10:56,360 --> 00:10:59,160 companies that are being impacted, we highlight ones like 218 00:10:59,160 --> 00:11:01,360 Amazon. The reason that I've remained 219 00:11:01,360 --> 00:11:05,280 bullish on Amazon throughout this entire tariff or is, again, 220 00:11:05,560 --> 00:11:10,120 my conviction that this was not an intrinsic problem for Amazon. 221 00:11:10,400 --> 00:11:14,280 It is never core to Amazon. This is a ChatGPT moment. 222 00:11:14,640 --> 00:11:18,120 The trade war with China is something that's macro. 223 00:11:18,120 --> 00:11:21,320 It's not related to the core of the company and in my mind most 224 00:11:21,320 --> 00:11:24,200 macro concerns work themselves out one way or another. 225 00:11:24,240 --> 00:11:27,840 Amazon during this entire time has been incredibly undervalued. 226 00:11:28,120 --> 00:11:31,520 The stock has been trading with so much pessimism, One of if not 227 00:11:31,520 --> 00:11:35,120 the best company in the world, trading at an extreme discount. 228 00:11:35,400 --> 00:11:38,120 This is why I've repeatedly been bullish on the company and I've 229 00:11:38,120 --> 00:11:39,600 bought the company over the past month. 230 00:11:40,000 --> 00:11:44,080 We see it up 8% on the day. In my opinion, it's not done. 231 00:11:44,400 --> 00:11:46,720 I still don't think investors have missed the trade with 232 00:11:46,720 --> 00:11:48,880 Amazon. I believe Amazon's going to go 233 00:11:48,880 --> 00:11:53,480 to 2:20 to 2:40 and up to 260. Just give it some time. 234 00:11:53,600 --> 00:11:56,480 Throughout this, I was lucky to be able to pick up more Amazon. 235 00:11:56,640 --> 00:11:59,480 This was a no brainer. I've increased my position in it 236 00:11:59,480 --> 00:12:02,880 now it's about the same size as Netflix, but it has around half 237 00:12:02,880 --> 00:12:06,240 the gains currently at 33,000. But the gains are starting to 238 00:12:06,240 --> 00:12:09,080 pick up and they're carrying the story fund up further and 239 00:12:09,080 --> 00:12:11,360 further. Right now it's up around 6% year 240 00:12:11,360 --> 00:12:13,080 to date. Another one to highlight here is 241 00:12:13,080 --> 00:12:15,960 ASML. This stock has been undervalued 242 00:12:15,960 --> 00:12:18,440 for some time. I think it's still today 243 00:12:18,440 --> 00:12:22,440 attractively valued at 7:50. Now I own ASML, I'm in the 244 00:12:22,440 --> 00:12:24,720 company. I currently have around $50,000 245 00:12:24,720 --> 00:12:27,760 of value, just a bit in the green, $2200 in the green. 246 00:12:28,120 --> 00:12:30,160 And I still think this one has a long ways to go. 247 00:12:30,600 --> 00:12:34,360 I think we're going to see prices of ASML around $1000 over 248 00:12:34,360 --> 00:12:35,840 the course of the next couple of years. 249 00:12:36,240 --> 00:12:38,760 So we have around 30% a media upside. 250 00:12:39,000 --> 00:12:42,080 And even from there, this company is a monopoly of a 251 00:12:42,080 --> 00:12:45,000 product that is incredibly integral. 252 00:12:45,040 --> 00:12:48,520 In fact, it's core to creating the most impressive chips that 253 00:12:48,520 --> 00:12:51,440 we have today. Salesforce, even this meet up 254 00:12:51,440 --> 00:12:55,240 company, the old Salesforce company that's been talked down, 255 00:12:55,440 --> 00:12:57,800 it's a company that many investors think it's not a great 256 00:12:57,800 --> 00:13:01,320 company. It's up 4.25% on the day. 257 00:13:01,680 --> 00:13:04,240 I believe that Salesforce has traded with far too much 258 00:13:04,240 --> 00:13:06,800 pessimism. It trades at valuations that we 259 00:13:06,800 --> 00:13:10,880 have not seen for this company in some time. 4 1/2% free cash 260 00:13:10,880 --> 00:13:14,840 flow yields 25 PE ratio for a company growing earnings this 261 00:13:14,840 --> 00:13:18,560 fast, Sure, the top line growth has moderated, but this one has 262 00:13:18,560 --> 00:13:20,840 been on a deal. If we look at Salesforce, this 263 00:13:20,840 --> 00:13:22,840 is another company that I have in the tech category. 264 00:13:23,120 --> 00:13:26,320 It's now back in the green and I want to hold this one a bit 265 00:13:26,320 --> 00:13:28,560 further. I think that Salesforce today is 266 00:13:28,560 --> 00:13:31,400 worth around 3:30, so I see a bit more upside. 267 00:13:31,520 --> 00:13:34,040 We even have Google in the green today. 268 00:13:34,400 --> 00:13:37,760 Isn't it incredible to see this company in the green overall? 269 00:13:38,120 --> 00:13:41,040 You know that the the bullishness, the sentiment is 270 00:13:41,040 --> 00:13:45,440 very strong if it can drag this company into the green on the 271 00:13:45,440 --> 00:13:46,840 day. Then we have a company that I 272 00:13:46,840 --> 00:13:49,400 haven't mentioned recently, which is Texas Roadhouse. 273 00:13:49,760 --> 00:13:53,520 This is a surprisingly large position in My Portfolio. 274 00:13:53,800 --> 00:13:55,760 You might think just because it's a restaurant and I hold 275 00:13:55,760 --> 00:14:00,480 companies like ASML or Google or Amazon that Texas Roadhouse is a 276 00:14:00,480 --> 00:14:03,000 smaller position. That's really not the case. 277 00:14:03,120 --> 00:14:06,480 This company has outperformed virtually all these major tech 278 00:14:06,480 --> 00:14:08,840 companies. You name it and it's likely beat 279 00:14:08,840 --> 00:14:10,840 it. Over the five year period, Texas 280 00:14:10,840 --> 00:14:13,640 Roadhouse's performance is astonishingly good. 281 00:14:13,720 --> 00:14:16,160 To just put this in perspective to really highlight it, because 282 00:14:16,160 --> 00:14:19,280 I feel like a lot of people may not actually believe this, but 283 00:14:19,280 --> 00:14:22,520 this is Texas Roadhouse's performance compared against 284 00:14:22,520 --> 00:14:25,360 four other leading tech companies over the past five 285 00:14:25,360 --> 00:14:28,080 years. Google has returned 133%. 286 00:14:28,160 --> 00:14:30,800 Not bad. Amazon is up 73%. 287 00:14:31,080 --> 00:14:33,880 Meta is up to 100%. Really good for Meta. 288 00:14:34,520 --> 00:14:39,800 Microsoft is U 143 and Texas Roadhouse is U 313. 289 00:14:40,040 --> 00:14:43,000 Beating all of them now. Texas Roadhouse also pays a 290 00:14:43,000 --> 00:14:45,000 higher dividend than all of them. 291 00:14:45,520 --> 00:14:48,400 So in capital appreciation, it's crushed them and then you layer 292 00:14:48,400 --> 00:14:50,920 upon the dividend, it's crushed them even more. 293 00:14:50,920 --> 00:14:54,320 The stock is up today, up 4% on the year. 294 00:14:54,320 --> 00:14:56,840 So it's green year to date, plus it's paying a dividend. 295 00:14:56,960 --> 00:15:01,320 It's currently an $82,000 position with $47,000 in gains 296 00:15:01,320 --> 00:15:02,880 when you factor in dividends as well. 297 00:15:03,280 --> 00:15:05,880 And this one has not given me a reason to sell it so far. 298 00:15:05,920 --> 00:15:08,280 Now, it's fun to highlight all the stocks in My Portfolio doing 299 00:15:08,280 --> 00:15:10,360 really well today, but I want to highlight one that's pulling 300 00:15:10,360 --> 00:15:13,840 back a bit, which is Netflix. Netflix has just gone through an 301 00:15:13,840 --> 00:15:16,960 exceptional historic run, one-of-a-kind throughout the 302 00:15:16,960 --> 00:15:20,640 entire company's history where it went up 11 or 12 days in a 303 00:15:20,640 --> 00:15:23,920 row, I forget it, it's 11 or 12. It had a break during the 304 00:15:23,920 --> 00:15:27,400 Hollywood, the Hollywood tariff thing, and then it went right 305 00:15:27,400 --> 00:15:30,080 back up and now it's pulling back a little bit. 306 00:15:30,480 --> 00:15:33,560 Anytime a company goes up for like 12 or 13 days for a row, 307 00:15:34,160 --> 00:15:36,400 you got to expect that it's going to come down a little bit. 308 00:15:36,920 --> 00:15:39,000 I mean, come on, let's not be pigs here. 309 00:15:39,000 --> 00:15:42,080 Let's not be so greedy that we never want the company to come 310 00:15:42,080 --> 00:15:44,800 back down. So this is fully anticipated. 311 00:15:45,080 --> 00:15:47,960 Many investors invested in Netflix because it was a safe 312 00:15:47,960 --> 00:15:49,640 haven during this tariff business. 313 00:15:49,880 --> 00:15:52,640 Now that we have the tariffs coming down, they think maybe we 314 00:15:52,640 --> 00:15:55,440 can take a little bit from this add to beat up companies like 315 00:15:55,440 --> 00:15:58,720 Amazon, maybe a little Google, maybe companies like Salesforce. 316 00:15:58,800 --> 00:16:01,440 So I think a lot of this is trading, a lot of it is taking 317 00:16:01,440 --> 00:16:03,680 games. So we see this huge reversal. 318 00:16:03,680 --> 00:16:06,640 Stocks are now approaching all time highs at the start of the 319 00:16:06,640 --> 00:16:09,640 year. The S&P 500, the QQQ are just 320 00:16:09,960 --> 00:16:11,640 very close to it. They're now making a full 321 00:16:11,640 --> 00:16:14,160 recovery. And This is why I've routinely 322 00:16:14,160 --> 00:16:17,800 said, even if you don't like what's going on, if you don't 323 00:16:17,800 --> 00:16:20,200 like the tariffs, if you don't like the policies, if you think 324 00:16:20,200 --> 00:16:23,480 things are going in a bad position or a negative way, you 325 00:16:23,480 --> 00:16:26,800 should still buy stocks and you should especially buy them. 326 00:16:27,000 --> 00:16:28,920 The worst that it feels to buy them. 327 00:16:29,320 --> 00:16:33,000 Around April 7th, April 8th, that was the time to buy 328 00:16:33,000 --> 00:16:35,800 companies. Now we see a complete reversal 329 00:16:35,800 --> 00:16:38,560 of the sentiment that was going on during that time period. 330 00:16:38,840 --> 00:16:42,600 We have from Bloomberg. Buy America sweeps across global 331 00:16:42,600 --> 00:16:46,160 markets after trade talks. This is the exact opposite, the 332 00:16:46,160 --> 00:16:48,200 complete opposite of what we heard a month ago. 333 00:16:48,280 --> 00:16:51,840 A month ago, there were professionals on TV instructing 334 00:16:51,840 --> 00:16:54,920 you to sell America, that the trade was to move elsewhere, to 335 00:16:54,920 --> 00:16:56,440 move outside of the US companies. 336 00:16:56,680 --> 00:16:59,600 American exceptionalism was under siege that things were 337 00:16:59,600 --> 00:17:02,760 headed in a dramatically bad position, and now we see that 338 00:17:02,760 --> 00:17:05,960 I'll reverse The people that ignored those professionals made 339 00:17:05,960 --> 00:17:08,200 a lot of money in the process by buying this dip. 340 00:17:08,760 --> 00:17:12,520 When we look at the biggest example of this possibly in the 341 00:17:12,520 --> 00:17:17,400 market today, it is Mike Wilson. This is what I consider the 342 00:17:17,400 --> 00:17:20,880 biggest fail over the past year, someone who has been on the 343 00:17:20,880 --> 00:17:22,960 wrong side of every single trade. 344 00:17:23,359 --> 00:17:26,720 And here he is on CNBC downplaying his history a bit 345 00:17:26,880 --> 00:17:29,680 and going on about how he's now bullish on this market. 346 00:17:29,840 --> 00:17:31,880 Let's go ahead and hear some of his remarks. 347 00:17:32,200 --> 00:17:34,560 But now the markets are saying in six months are things going 348 00:17:34,560 --> 00:17:36,480 to be more uncertain or less uncertain? 349 00:17:36,480 --> 00:17:38,520 Are they going to be probably more constructive and less 350 00:17:38,520 --> 00:17:40,400 constructive? And that's before we even take 351 00:17:40,400 --> 00:17:42,520 it to an account. Some of the positive things from 352 00:17:42,520 --> 00:17:44,600 an administration standpoint that are probably going to flow 353 00:17:44,600 --> 00:17:46,520 through, the most important being deregulation. 354 00:17:46,600 --> 00:17:49,000 You know, if we're going to err on the side of policy, it's 355 00:17:49,000 --> 00:17:52,160 probably to help the growth side, then maybe the tariff side 356 00:17:52,320 --> 00:17:54,160 or the inflation side. The tariffs aren't going to be 357 00:17:54,160 --> 00:17:54,840 as. Bad then why? 358 00:17:55,800 --> 00:17:59,600 So there he is now optimistic on the future, saying that there's 359 00:17:59,600 --> 00:18:03,960 ample growth paths that even J pal may lower interest rates, 360 00:18:04,240 --> 00:18:07,600 that it seems like the risk is is reduced and investors should 361 00:18:07,600 --> 00:18:09,800 become optimistic and bullish now. 362 00:18:10,720 --> 00:18:14,160 Now let's go ahead and highlight what he was saying during the 363 00:18:14,160 --> 00:18:17,880 exact bottom of this dip, April 7th. 364 00:18:18,160 --> 00:18:22,720 April 7th was right here, this dot right on the chart right 365 00:18:22,720 --> 00:18:25,280 there. So that big dip in the S&P 500, 366 00:18:25,560 --> 00:18:28,720 the one really only big dip, the only really great time to be 367 00:18:28,720 --> 00:18:31,440 buying stocks this year. This is what he was saying. 368 00:18:31,600 --> 00:18:35,720 Investors should brace for another 7 to 8% drop in the S&P 369 00:18:35,720 --> 00:18:38,920 500. Morgan Stanley says this is on 370 00:18:39,080 --> 00:18:43,040 April 7th, that exact day. And this is from Mike Wilson, 371 00:18:43,040 --> 00:18:45,400 that exact analyst that is now bullish on the market. 372 00:18:45,480 --> 00:18:48,320 The commentary here always has a negative bent towards the 373 00:18:48,320 --> 00:18:50,320 bottom. Barring the White House backing 374 00:18:50,320 --> 00:18:53,000 down on its tariff plan are signs of easing from the Federal 375 00:18:53,000 --> 00:18:55,280 Reserve. Investors should brace for 376 00:18:55,280 --> 00:18:59,720 another for the S&P 500 to slide another 7 or 8%. 377 00:18:59,840 --> 00:19:02,600 The professionals at Morgan Stanley like Mike Wilson go on 378 00:19:02,600 --> 00:19:05,600 to say that the sector has rich opportunities under the surface, 379 00:19:05,920 --> 00:19:09,520 but it's still too early for bottom picking, they say. 380 00:19:09,520 --> 00:19:12,080 So there you have Mike Wilson being bearish at the bottom and 381 00:19:12,080 --> 00:19:14,800 bullish at the top. And not only that, this actually 382 00:19:14,800 --> 00:19:16,320 gets worse, if you can believe it. 383 00:19:16,960 --> 00:19:19,160 One of the things that they highlight in this article is 384 00:19:19,160 --> 00:19:22,160 specific stock recommendations. One large cap name they're 385 00:19:22,160 --> 00:19:25,480 adding to is American Tower Reed AMT. 386 00:19:25,800 --> 00:19:29,640 They added this to their Fresh Money buy list, upgrading it to 387 00:19:29,640 --> 00:19:33,120 overweight and replacing EN Corp ETN. 388 00:19:33,200 --> 00:19:37,480 So their recommendation as professionals is to buy into AMT 389 00:19:37,600 --> 00:19:40,080 and to sell ETN AM T. The one that they're 390 00:19:40,080 --> 00:19:43,360 recommending to buy is down 2% and ETN, the one that they 391 00:19:43,360 --> 00:19:47,080 recommended to sell, is up 28% from that date. 392 00:19:47,320 --> 00:19:49,720 Now, even though this is one of the biggest fails of the year, I 393 00:19:49,720 --> 00:19:52,040 don't mean to pick particularly on Mike Wilson. 394 00:19:52,360 --> 00:19:56,080 He is, after all, one of many institutional investors that 395 00:19:56,080 --> 00:19:58,080 they just don't have a clue. And this is something that 396 00:19:58,080 --> 00:20:00,600 you'll realize the more that you invest, the more that you do 397 00:20:00,600 --> 00:20:03,840 this, the more that you watch these people on TV is as nice as 398 00:20:03,840 --> 00:20:06,880 they dress with their ties and their suits, with their big 399 00:20:06,880 --> 00:20:10,120 titles, their fancy titles that they have from different firms. 400 00:20:10,680 --> 00:20:13,400 You'll realize that none of that means anything when they don't 401 00:20:13,400 --> 00:20:16,480 have a clue what they're doing. And that's the case in many of 402 00:20:16,480 --> 00:20:20,000 these instances. These investors are recommending 403 00:20:20,000 --> 00:20:24,200 to become more defensive at the bottom after a dip has already 404 00:20:24,200 --> 00:20:27,200 happened. After they're down already 20% 405 00:20:27,200 --> 00:20:29,840 in a couple weeks, that's the point where they start trading 406 00:20:29,840 --> 00:20:32,960 up for defensive stocks. Then when there's optimism 407 00:20:32,960 --> 00:20:36,200 abounding, when prices go higher, when everything surges, 408 00:20:36,520 --> 00:20:40,160 then they become more bullish. The exact opposite of good 409 00:20:40,160 --> 00:20:43,360 investment behavior, something that Warren Buffett would never 410 00:20:43,360 --> 00:20:44,880 do. Warren Buffett would never 411 00:20:44,880 --> 00:20:47,840 become scared about his holdings at the bottom and then become 412 00:20:47,840 --> 00:20:51,000 super bullish on them when they go up 20 or 30%. 413 00:20:51,480 --> 00:20:54,440 That's not the behavior we see from incredibly good investors. 414 00:20:54,680 --> 00:20:57,880 It is the behaviors that we see all the time from these 415 00:20:57,880 --> 00:21:00,040 different institutional investors that make regular 416 00:21:00,040 --> 00:21:03,640 appearances to sell their stock strategy services, where they 417 00:21:03,640 --> 00:21:05,720 feel like they're always forced to give different 418 00:21:05,720 --> 00:21:08,480 recommendations and different calls of what direction the 419 00:21:08,480 --> 00:21:10,400 market's going. And of course, there's no 420 00:21:10,400 --> 00:21:12,960 evidence that they outperform the market in doing so. 421 00:21:13,280 --> 00:21:16,040 Now moving on, we get to another Trump announcement that seems 422 00:21:16,040 --> 00:21:18,640 like a daily occurrence, that he's announcing some big thing 423 00:21:18,640 --> 00:21:20,640 for the markets that we have to be concerned about. 424 00:21:21,000 --> 00:21:23,200 In this case case, it was another truth. 425 00:21:23,360 --> 00:21:25,560 I think they call it a truth being posted here. 426 00:21:26,400 --> 00:21:28,720 And this one is about the Pharmaceutical industry. 427 00:21:29,040 --> 00:21:32,280 He believes that we're paying too much as Americans and it's 428 00:21:32,280 --> 00:21:35,680 unfair that other countries pay far less than us for drugs that 429 00:21:35,680 --> 00:21:38,800 we develop. Now, this post is a mouthful, so 430 00:21:38,800 --> 00:21:40,040 I'm not going to read through the whole thing. 431 00:21:40,040 --> 00:21:43,200 I'll just skip to the punchline here where he really nails down 432 00:21:43,200 --> 00:21:44,960 exactly what they're trying to implement. 433 00:21:45,040 --> 00:21:49,000 He says I will be instituting a most favored nation policy 434 00:21:49,000 --> 00:21:52,960 whereby the United States will pay the same price as the nation 435 00:21:52,960 --> 00:21:55,440 that pays the lowest price anywhere in the world. 436 00:21:55,440 --> 00:21:58,480 So this is a price cap being given to pharmaceutical 437 00:21:58,480 --> 00:22:02,000 companies that they can't charge U.S. citizens more than they can 438 00:22:02,000 --> 00:22:05,560 charge foreign countries for the same drug, or at least that's 439 00:22:05,560 --> 00:22:07,960 the intent of it. Now, as we jump into the story 440 00:22:07,960 --> 00:22:11,040 and go over some of the details and the likelihood of this 441 00:22:11,040 --> 00:22:14,240 actually happening, I just want to highlight that this is 442 00:22:14,240 --> 00:22:17,760 something that Trump has overwhelming universal support 443 00:22:17,760 --> 00:22:19,840 on, at least within the United States. 444 00:22:20,200 --> 00:22:23,400 If you go to the United States and talk to anyone, almost 445 00:22:23,400 --> 00:22:27,800 anyone, there is overwhelming agreement amongst Americans that 446 00:22:27,800 --> 00:22:29,920 we pay too much for healthcare, we pay too much for 447 00:22:29,920 --> 00:22:32,600 pharmaceuticals. It's insanely expensive. 448 00:22:32,600 --> 00:22:36,120 Just overall, it's crazy how much things cost and it's one of 449 00:22:36,120 --> 00:22:38,720 the biggest concerns that Americans have now. 450 00:22:39,040 --> 00:22:42,360 I believe the issue is far more on the billing side and how we 451 00:22:42,360 --> 00:22:45,880 pay for things than the actual healthcare and the type of 452 00:22:46,080 --> 00:22:49,200 specialists and the people working in healthcare. the US 453 00:22:49,200 --> 00:22:52,040 has great healthcare providers. We have people that are 454 00:22:52,040 --> 00:22:54,080 incredibly knowledgeable. They do the highest end 455 00:22:54,080 --> 00:22:55,960 surgeries. It's where I would want to have 456 00:22:55,960 --> 00:22:58,600 my healthcare done. I have people like my brother 457 00:22:58,680 --> 00:23:00,840 that's a surgeon, highly skilled. 458 00:23:00,880 --> 00:23:04,240 He's someone very capable. We have people like my wife 459 00:23:04,240 --> 00:23:06,520 that's a nurse. These people give incredible 460 00:23:06,520 --> 00:23:09,640 health care to others. So the skill involved is not 461 00:23:09,640 --> 00:23:13,440 lacking in the United States. What's lacking is our system for 462 00:23:13,440 --> 00:23:15,560 paying for things. It is broken. 463 00:23:15,560 --> 00:23:19,680 The insurance system is broken. Doctors don't like it, patients 464 00:23:19,680 --> 00:23:22,120 don't like it. Our country fiscally can't pay 465 00:23:22,120 --> 00:23:24,520 for it. It is a broken system overall. 466 00:23:24,600 --> 00:23:27,880 So Trump is tapping into something that has overwhelming 467 00:23:27,880 --> 00:23:30,920 agreement amongst Americans. All of us feel like we're 468 00:23:30,920 --> 00:23:32,800 getting ripped off. All of us feel like we're paying 469 00:23:32,800 --> 00:23:34,680 too much. Everyone feels like the 470 00:23:34,680 --> 00:23:37,640 healthcare system and the pharmaceutical system needs an 471 00:23:37,640 --> 00:23:39,440 overhaul. Now, Trump addressed this in the 472 00:23:39,440 --> 00:23:42,640 White House by bringing on doctors and economists that 473 00:23:42,640 --> 00:23:45,360 spoke on this subject as well. And they to share the same 474 00:23:45,360 --> 00:23:48,280 concern. President, on behalf of the many 475 00:23:48,280 --> 00:23:51,400 doctors I've talked to about this very issue, thank you for 476 00:23:51,400 --> 00:23:54,840 taking the bull by the horns. Presidents on both sides of the 477 00:23:54,840 --> 00:23:57,600 aisle have talked about this and floated it and said they've 478 00:23:57,600 --> 00:24:00,560 wanted to do it, so you've had the courage to do it. 479 00:24:00,960 --> 00:24:03,120 Thank you. I've been a surgical oncologist 480 00:24:03,120 --> 00:24:07,840 at Johns Hopkins for 22 years, and I have seen patients suffer. 481 00:24:08,000 --> 00:24:11,760 We didn't take an oath to heal patients and then watch their 482 00:24:11,760 --> 00:24:17,280 life get ruined financially with their home mortgage retirement 483 00:24:17,560 --> 00:24:21,320 going down the drain with GoFundMe campaigns raising money 484 00:24:21,320 --> 00:24:24,160 from church communities and synagogues and friends they 485 00:24:24,160 --> 00:24:28,400 haven't seen in 20 years to try to raise money for what? 486 00:24:28,400 --> 00:24:32,840 For a system where Americans have been getting ripped off by 487 00:24:32,840 --> 00:24:36,560 10/12/15 times higher prices than we see in other countries? 488 00:24:36,800 --> 00:24:39,160 The fundamental problem in Healthcare is that we've had non 489 00:24:39,160 --> 00:24:41,960 competitive markets. We can do little things around 490 00:24:41,960 --> 00:24:45,760 the edges or we can transform those markets to competitive 491 00:24:45,760 --> 00:24:47,600 markets. And that's what this executive 492 00:24:47,600 --> 00:24:51,760 order does today. Imagine buying a Ford for 493 00:24:51,760 --> 00:24:57,800 $175,000 a regular car and then hearing that people in London 494 00:24:57,800 --> 00:25:01,360 are buying it for $10,000 every day, all day long. 495 00:25:01,600 --> 00:25:03,400 That is the craziness of this system. 496 00:25:03,720 --> 00:25:06,840 We're going to do everything we can at the FDA to support this 497 00:25:06,840 --> 00:25:09,480 executive order. It's transformative. 498 00:25:09,480 --> 00:25:13,000 Thank you, Mr. President. OK, so he gives a comparison 499 00:25:13,000 --> 00:25:17,280 there, and even though it's a bit exaggerated, saying 10,000 500 00:25:17,280 --> 00:25:21,360 to 150,000, it's not exaggerated as much as you'd think. 501 00:25:21,840 --> 00:25:24,600 When looking into this issue, you find that the United States 502 00:25:24,840 --> 00:25:28,600 over and over again, by every study, pays two to four times as 503 00:25:28,600 --> 00:25:31,480 much as any other country for prescription drugs that we 504 00:25:31,480 --> 00:25:34,800 develop in the United States, and a lot of Americans find that 505 00:25:34,800 --> 00:25:36,640 unacceptable. Now, why is this the case? 506 00:25:36,640 --> 00:25:40,160 Why is it that in many cases Europeans are paying 1/4 what 507 00:25:40,160 --> 00:25:42,800 Americans are for the same drugs that Americans develop? 508 00:25:43,280 --> 00:25:46,480 It's because of competition in the United States. 509 00:25:46,720 --> 00:25:49,320 There are so many different healthcare industries, different 510 00:25:49,320 --> 00:25:52,040 hospital networks, different healthcare providers, different 511 00:25:52,040 --> 00:25:54,320 insurance companies. It's all segregated, It's all 512 00:25:54,320 --> 00:25:55,880 broken up. We have all these different 513 00:25:55,880 --> 00:25:58,480 businesses, and the pharmaceutical companies can be 514 00:25:58,520 --> 00:26:01,240 aggressive with pricing. It's just the structure of the 515 00:26:01,240 --> 00:26:04,440 United States's system. Then you go over to Europe and 516 00:26:04,440 --> 00:26:07,360 it's much more coordinated and organized, and it's much more 517 00:26:07,360 --> 00:26:10,480 consolidated. For example, for one country, 518 00:26:10,480 --> 00:26:14,680 they'll have one single entity, a buying entity for a drug. 519 00:26:15,080 --> 00:26:18,840 And since they work as a a big union almost, they can barter 520 00:26:18,840 --> 00:26:22,480 down with negotiating leverage because of their buying power. 521 00:26:22,840 --> 00:26:24,800 That makes them much more unified against the 522 00:26:24,800 --> 00:26:26,760 pharmaceutical companies, meaning that those 523 00:26:26,760 --> 00:26:29,120 pharmaceutical companies have to compromise and lower their 524 00:26:29,120 --> 00:26:32,640 prices or they're excluded from the market entirely, meaning 525 00:26:32,640 --> 00:26:35,800 that Europe is a far less competitive, more dominant 526 00:26:35,800 --> 00:26:38,480 market when it comes to bartering for drug prices. 527 00:26:38,520 --> 00:26:41,600 So with Europe having the single payer systems, these buying 528 00:26:41,600 --> 00:26:44,800 agents and negotiating power, they get great deals for their 529 00:26:44,800 --> 00:26:49,040 citizens, which results in this huge imbalance of drug pricing, 530 00:26:49,040 --> 00:26:51,400 making it so that even though the United States is a place 531 00:26:51,400 --> 00:26:54,560 putting up this risk capital of developing these drugs, even 532 00:26:54,560 --> 00:26:57,760 though the majority of drugs fail and it's highly risky, even 533 00:26:57,760 --> 00:27:00,120 after taking out that risk, they're paying the highest 534 00:27:00,120 --> 00:27:02,120 price. And this is what many Americans 535 00:27:02,120 --> 00:27:04,960 believe is unfair. It has overwhelming support. 536 00:27:05,280 --> 00:27:08,560 And I think even from a European perspective, I understand around 537 00:27:08,720 --> 00:27:11,320 half my audience is from Europe. It's a huge portion. 538 00:27:11,720 --> 00:27:13,960 You can understand the unfairness here. 539 00:27:14,160 --> 00:27:17,200 He gives the analogy of selling a car that's probably a little 540 00:27:17,200 --> 00:27:18,960 bit exaggerated, the numbers he gave. 541 00:27:19,360 --> 00:27:21,880 But you can just imagine if you had a system where you put up 542 00:27:21,880 --> 00:27:25,240 all the CapEx, you develop these vehicles, you design them, but 543 00:27:25,240 --> 00:27:28,640 then for specific geographical reasons and government reasons, 544 00:27:28,800 --> 00:27:31,360 they were sold to the United States for 1/4 of the price that 545 00:27:31,360 --> 00:27:33,960 they are in Europe, you'd probably be upset about that or 546 00:27:33,960 --> 00:27:35,880 at least think it's unfair. And that's what's being 547 00:27:35,880 --> 00:27:37,960 addressed here. So there's a growing chorus of 548 00:27:37,960 --> 00:27:40,360 people supporting this, even more government agency 549 00:27:40,360 --> 00:27:42,560 supporting it, and it's something that probably should 550 00:27:42,560 --> 00:27:45,440 be looked at. Now, having said that, this is 551 00:27:45,440 --> 00:27:48,920 also something that's not exactly legal for the president 552 00:27:48,920 --> 00:27:51,400 to do. As much power as the president 553 00:27:51,400 --> 00:27:55,520 has with the executive orders right now, the president cannot 554 00:27:55,520 --> 00:27:58,240 set prices of a company. Nowhere in the Constitution does 555 00:27:58,240 --> 00:28:01,840 it give the president the ability to set or cap prices of 556 00:28:01,840 --> 00:28:04,880 different companies. So this executive order, if it's 557 00:28:04,880 --> 00:28:08,480 implemented like he says it is, it'll be immediately challenged 558 00:28:08,480 --> 00:28:10,320 in court. And that's exactly what happened 559 00:28:10,320 --> 00:28:12,880 back in 2020. He tried to implement this exact 560 00:28:12,880 --> 00:28:16,240 same policy back in 2020 and the courts immediately shot it down. 561 00:28:16,240 --> 00:28:18,680 So while this may be an important issue for President 562 00:28:18,680 --> 00:28:22,400 Trump to look at and address, unfortunately just solving this 563 00:28:22,400 --> 00:28:24,800 problem by executive order probably won't work. 564 00:28:24,960 --> 00:28:27,800 Now, next we get to this mystery, the mystery of why 565 00:28:27,800 --> 00:28:32,280 Microsoft Azure is growing so fast, especially against Amazon 566 00:28:32,280 --> 00:28:34,840 Web Services and Google Cloud. Now, this is especially 567 00:28:34,840 --> 00:28:37,880 interesting because we have Microsoft Azure, Microsoft's 568 00:28:37,880 --> 00:28:40,920 clouds in the middle. We have Amazon that's a bigger 569 00:28:40,920 --> 00:28:43,000 cloud, and we have Google, that's a smaller cloud. 570 00:28:43,480 --> 00:28:46,360 And Microsoft in the middle of size is growing faster than the 571 00:28:46,360 --> 00:28:48,880 other two. So investors are wondering, why 572 00:28:48,880 --> 00:28:51,840 is it outgrowing both of them even when it's not smaller or 573 00:28:51,840 --> 00:28:54,560 bigger than them? Core sequential dollar growth 574 00:28:54,560 --> 00:28:58,560 was particularly strong, UBS analysts said Monday, to the 575 00:28:58,560 --> 00:29:01,920 point where Azure materially outperformed rivals Google Cloud 576 00:29:02,200 --> 00:29:05,280 and Amazon Web Services. UBS noted that this was the 577 00:29:05,280 --> 00:29:08,120 second consecutive quarter that combined sequential dollar 578 00:29:08,120 --> 00:29:10,320 growth that was up more than 10%. 579 00:29:10,680 --> 00:29:14,040 Most significantly, the progress occurred against a challenging 580 00:29:14,040 --> 00:29:17,200 macro backdrop, and it's difficult to establish why. 581 00:29:17,360 --> 00:29:20,520 It's true that Microsoft saying they're executing well, but 582 00:29:20,520 --> 00:29:24,480 Google Cloud Management and Amazon AWS management will also 583 00:29:24,480 --> 00:29:26,240 tell you that they're executing well. 584 00:29:26,680 --> 00:29:30,040 They say what's surprising is that on Prem to Azure migration 585 00:29:30,040 --> 00:29:33,920 activity would pick up smack in the middle of one of the more 586 00:29:33,920 --> 00:29:36,280 uncertain macro periods in memory. 587 00:29:36,440 --> 00:29:38,640 And the analysts here are stumped of why Microsoft 588 00:29:38,640 --> 00:29:41,280 continues to grow so fast. When we look at the strategy 589 00:29:41,280 --> 00:29:44,960 that Microsoft's pursuing, it's one of extreme integration. 590 00:29:45,240 --> 00:29:48,400 Microsoft already has all these connections, all these products 591 00:29:48,400 --> 00:29:51,960 in corporate America, and their cloud has seamless integration 592 00:29:51,960 --> 00:29:55,240 with these products. So they're leveraging their 593 00:29:55,240 --> 00:29:58,560 existing stuff like Microsoft Excel, for example, if you're an 594 00:29:58,560 --> 00:30:02,280 accountant and you have the option to use their AI services, 595 00:30:02,360 --> 00:30:05,920 you're always going to pick to use their AI services over some 596 00:30:05,920 --> 00:30:08,720 external service. For example, I have a buddy 597 00:30:08,720 --> 00:30:11,920 that's an accountant and he prepares financial statements 598 00:30:11,920 --> 00:30:15,160 for a publicly traded company. The company uses many Microsoft 599 00:30:15,160 --> 00:30:18,120 products and he feels comfortable using their AI 600 00:30:18,120 --> 00:30:20,240 services. He feels comfortable using their 601 00:30:20,240 --> 00:30:22,960 cloud. He would never take information 602 00:30:23,120 --> 00:30:26,000 off of Excel or financial information that's important to 603 00:30:26,000 --> 00:30:29,440 the company out of the Microsoft ecosystem, to a random third 604 00:30:29,440 --> 00:30:31,800 party company. He's not going to take financial 605 00:30:31,800 --> 00:30:35,360 statements and put it into Grok to run run estimates or anything 606 00:30:35,360 --> 00:30:39,400 like that or put it into Chachi. He will keep it within the 607 00:30:39,520 --> 00:30:42,000 ecosystem that the company's already using, that all the 608 00:30:42,000 --> 00:30:45,000 information is already secure on so many companies. 609 00:30:45,000 --> 00:30:49,320 In terms of trust, in terms of security, Microsoft already has 610 00:30:49,320 --> 00:30:52,240 that brand so much with these big companies. 611 00:30:52,480 --> 00:30:55,040 They're already highly integrated with all these Office 612 00:30:55,040 --> 00:30:58,360 products that given the choice between Microsoft and other 613 00:30:58,360 --> 00:31:01,600 third party companies, they will have a preference for Microsoft. 614 00:31:01,760 --> 00:31:04,400 And we see this bundling effect work again and again. 615 00:31:04,680 --> 00:31:07,960 If Microsoft builds the tools, even if they're not as good as a 616 00:31:07,960 --> 00:31:11,440 competitor, most companies will use them anyways because they're 617 00:31:11,440 --> 00:31:13,160 already using so many of their systems. 618 00:31:13,160 --> 00:31:15,480 They already trust their data. They're already part of their 619 00:31:15,520 --> 00:31:17,520 ecosystem. So I think we're going to see 620 00:31:17,520 --> 00:31:21,600 continued strong performance with Microsoft in both AI and 621 00:31:21,600 --> 00:31:23,000 cloud. Now, that's going to be it for 622 00:31:23,000 --> 00:31:24,440 this episode. If you like this type of 623 00:31:24,440 --> 00:31:26,280 content, make sure you subscribe to the channel. 624 00:31:26,520 --> 00:31:28,680 If you want to see more exclusive content, you can check 625 00:31:28,680 --> 00:31:30,520 out the Patreon in the description. 626 00:31:30,840 --> 00:31:31,640 See you in the next one.