1 00:00:00,000 --> 00:00:03,200 Welcome everyone. It's time for a look at Amazon. 2 00:00:03,200 --> 00:00:06,300 As I'm sure most of you have heard, they reported their q1 3 00:00:06,300 --> 00:00:08,400 results. They were overall a 4 00:00:08,400 --> 00:00:11,600 disappointment to the market. The market did not receive it. 5 00:00:11,600 --> 00:00:14,500 Well, in fact, we have headlines like this from The Wall Street 6 00:00:14,500 --> 00:00:16,900 Journal from the first page of the front page of the Wall 7 00:00:16,900 --> 00:00:19,100 Street Journal that say Amazon posts. 8 00:00:19,100 --> 00:00:23,000 Its first quarterly loss since 2015 as costs and the ribbon 9 00:00:23,000 --> 00:00:26,200 steak way on results. These headlines look really bad. 10 00:00:26,500 --> 00:00:29,100 We go even further just today they have another headline on 11 00:00:29,100 --> 00:00:31,700 Amazon. They say that the flagship 12 00:00:32,000 --> 00:00:36,900 online shopping business stalls. After Decades of growth Amazon's 13 00:00:36,900 --> 00:00:40,100 basically done growing, right? That's the story that the market 14 00:00:40,100 --> 00:00:43,500 is getting and because of this, we have the stock selling down 15 00:00:43,500 --> 00:00:46,800 its down, twelve point five seven percent today. 16 00:00:46,800 --> 00:00:49,800 That was after hours, after investors saw the earnings and 17 00:00:49,800 --> 00:00:51,300 then, you know, over the past five days. 18 00:00:51,300 --> 00:00:54,000 It's basically down just about that much about 12%. 19 00:00:54,000 --> 00:00:57,200 So, as of right now, Amazon trades around 2,500 dollars a 20 00:00:57,208 --> 00:01:01,500 share, that's after the 12%, drop its trading at 2500 and my 21 00:01:01,700 --> 00:01:04,300 cost basis on my large position in Amazon. 22 00:01:04,300 --> 00:01:07,900 I have an outside position which means I have more allocated to 23 00:01:07,900 --> 00:01:10,300 it, than the, the index, the S&P 500. 24 00:01:10,500 --> 00:01:12,800 My cost basis on that is around three thousand dollars per 25 00:01:12,800 --> 00:01:14,500 share. So, I'm in the red on this 26 00:01:14,500 --> 00:01:18,900 company right now, it's below my cost basis, my discounted cash 27 00:01:18,900 --> 00:01:21,000 flow analysis. My some of the parts valuation 28 00:01:21,000 --> 00:01:23,800 in the research that I've done on the company lead me to 29 00:01:23,800 --> 00:01:26,500 believe that it's worth somewhere around the range of 30 00:01:26,500 --> 00:01:28,500 forty eight hundred dollars per share. 31 00:01:28,700 --> 00:01:29,800 That's what I think the fair value. 32 00:01:29,900 --> 00:01:34,200 Value of Amazon is so it's trading at 2,500 dollars a 33 00:01:34,208 --> 00:01:37,900 share, I think right now today, it's worth forty eight hundred 34 00:01:37,900 --> 00:01:40,600 dollars a share. So there is a massive disconnect 35 00:01:40,600 --> 00:01:43,200 between what the market sees the value in this company. 36 00:01:43,200 --> 00:01:44,800 And what I see the value in this company. 37 00:01:44,800 --> 00:01:47,800 Now, I understand it's difficult to say, hey, the market is 38 00:01:47,800 --> 00:01:49,000 wrong. I'm right. 39 00:01:49,000 --> 00:01:50,800 Right. My fair value estimates correct 40 00:01:50,800 --> 00:01:53,300 in the markets, just getting this wrong, and sometimes that 41 00:01:53,300 --> 00:01:57,100 can sound like you have hubris or you are, you know, you're 42 00:01:57,100 --> 00:01:59,800 overly confident or what not. But what I look. 43 00:02:00,100 --> 00:02:01,800 Is the market we're in right now? 44 00:02:02,100 --> 00:02:03,800 For example, we can look at Google here. 45 00:02:04,100 --> 00:02:06,900 Google is a great company. Most people agree, that Google 46 00:02:06,900 --> 00:02:11,400 is undervalued, it's down 21%, from its recent highs YouTube. 47 00:02:11,400 --> 00:02:15,400 Grew up 14% the ad business grew above 20%, the company just 48 00:02:15,400 --> 00:02:17,900 announced seventy billion dollars in share BuyBacks, but 49 00:02:17,900 --> 00:02:21,000 yet Google still trading down. No matter how good this company 50 00:02:21,000 --> 00:02:24,000 does, the stock price is trading down from where it was. 51 00:02:24,000 --> 00:02:27,200 Just a couple months ago, there is downward pressure on this 52 00:02:27,200 --> 00:02:30,300 Market even companies that are doing incredible, Edible 53 00:02:30,300 --> 00:02:31,300 adobe's. Another company. 54 00:02:31,300 --> 00:02:33,000 That's a cash generating machine. 55 00:02:33,100 --> 00:02:36,000 It has a strong moat. It has high amounts of free cash 56 00:02:36,000 --> 00:02:37,400 flow. It doesn't dilute shareholders, 57 00:02:37,400 --> 00:02:41,100 it does share BuyBacks this company's down 38% from ass all 58 00:02:41,100 --> 00:02:43,200 time highs, just a couple months ago. 59 00:02:43,400 --> 00:02:46,300 In November, it was trading above six hundred eighty eight 60 00:02:46,300 --> 00:02:48,400 dollars, a share. The market doesn't like this 61 00:02:48,400 --> 00:02:51,400 company, no matter the numbers that it's posting the market is 62 00:02:51,400 --> 00:02:54,100 selling out of this company. Even Microsoft beating on the 63 00:02:54,100 --> 00:02:56,900 top line beating on the bottom line, having an incredibly wide 64 00:02:56,900 --> 00:02:59,800 moat this company has Azure growin, like a weed. 65 00:02:59,900 --> 00:03:02,100 Scrolling 50% year-over-year yet. 66 00:03:02,100 --> 00:03:04,100 The market doesn't really love it right now. 67 00:03:04,100 --> 00:03:06,900 It's down. 17 percent from its November high. 68 00:03:07,000 --> 00:03:09,800 Like we're seeing with all these companies, we can look at Apple 69 00:03:09,800 --> 00:03:13,600 Apple beat on literally almost every part of their report. 70 00:03:13,700 --> 00:03:15,800 They beat on their top line, they beat on their bottom line, 71 00:03:16,000 --> 00:03:18,700 they sold more phones than they're supposed to. 72 00:03:18,700 --> 00:03:21,300 They sold more services and they're supposed to, they sold 73 00:03:21,300 --> 00:03:24,600 in every single category except for iPads, iPads was the only 74 00:03:24,600 --> 00:03:27,700 category they didn't beat and the company's down 10 percent in 75 00:03:27,700 --> 00:03:30,900 the month apples down. 10% Despite the fact they just 76 00:03:30,900 --> 00:03:33,700 announced 90 billion dollars in share BuyBacks. 77 00:03:33,700 --> 00:03:35,800 So I look at this and see that it doesn't really matter too 78 00:03:35,800 --> 00:03:37,800 much the type of report you're putting up right now. 79 00:03:37,900 --> 00:03:40,200 The market doesn't seem to be rewarding these companies. 80 00:03:40,200 --> 00:03:42,800 Now I'm not showing this to make excuses for Amazon. 81 00:03:42,800 --> 00:03:45,800 Their report in specific has its own issues that we'll talk about 82 00:03:45,800 --> 00:03:48,400 in just a minute, but I am showing it just to give some 83 00:03:48,400 --> 00:03:52,000 context, whether you're looking at apple or Microsoft or Google, 84 00:03:52,000 --> 00:03:55,800 or adobe, or any real similar company in, that vein, most of 85 00:03:55,800 --> 00:03:57,900 them have traded down over the past week. 86 00:03:57,900 --> 00:03:59,800 There's just a lot of downward pressure right now. 87 00:04:00,000 --> 00:04:03,100 Now Amazon's report had some specific Parts in it that I 88 00:04:03,108 --> 00:04:06,700 think dragged it down even more. And I think that this was by far 89 00:04:06,900 --> 00:04:09,400 the big thing that caused the 10% sell-off. 90 00:04:09,600 --> 00:04:11,200 There's a couple things you could point at. 91 00:04:11,300 --> 00:04:15,100 I think it was this this is their second quarter 20:22 92 00:04:15,100 --> 00:04:17,200 guidance. Net sales are expected to be 93 00:04:17,200 --> 00:04:20,600 between a hundred and sixteen billion and 121 billion or to 94 00:04:20,600 --> 00:04:23,100 grow between three and seven percent. 95 00:04:23,400 --> 00:04:26,300 So they're expected to grow somewhere around 11%. 96 00:04:26,500 --> 00:04:28,600 And now they're saying three to seven percent. 97 00:04:28,800 --> 00:04:31,600 So they're giving low Lowered guidance for next quarter and I 98 00:04:31,608 --> 00:04:34,200 think that's the big reason that investors bailed on the company. 99 00:04:34,400 --> 00:04:36,500 It looks like growth is slowing for Amazon. 100 00:04:36,500 --> 00:04:39,800 They say this guidance anticipates, unfavorable impact 101 00:04:39,800 --> 00:04:42,700 of approximately 200 basis points on foreign exchange 102 00:04:42,700 --> 00:04:44,500 rates. So the foreign exchange rates is 103 00:04:44,500 --> 00:04:46,000 something that does hurt Amazon right. 104 00:04:46,000 --> 00:04:50,300 Now operating income loss is expected to be between 1 billion 105 00:04:50,300 --> 00:04:52,700 and three billion compared with seven point seven billion in the 106 00:04:52,707 --> 00:04:56,300 second quarter 2021, that was also below expectations. 107 00:04:56,600 --> 00:04:59,700 They said this guidance assumes that Prime day occur. 108 00:04:59,900 --> 00:05:04,100 Is in the third quarter of 2022. So that's something that I 109 00:05:04,100 --> 00:05:07,600 didn't realize how big of an impact these one day, like 110 00:05:07,600 --> 00:05:10,800 things like Prime Day and Christmas are on, on Amazon. 111 00:05:10,800 --> 00:05:13,600 I realize Christmas is a big impact but Prime days, pretty 112 00:05:13,600 --> 00:05:15,800 significant. They actually model the entire 113 00:05:15,800 --> 00:05:18,300 revenue of the company differently, depending on the 114 00:05:18,300 --> 00:05:21,400 day that Prime Day falls in. And since they moved it out of 115 00:05:21,400 --> 00:05:24,600 second quarter into third quarter, they're modeling less 116 00:05:24,600 --> 00:05:27,700 Revenue overall for the quarter. So that's pretty incredible. 117 00:05:27,700 --> 00:05:30,100 This Prime day has such a huge impact, but I think at that 118 00:05:30,100 --> 00:05:32,900 second quarter guidance was a big part of why the company had 119 00:05:32,900 --> 00:05:35,400 the 10 to 12% drop. And I think it's why investors 120 00:05:35,800 --> 00:05:38,600 are just looking at this company is kind of dead money, right. 121 00:05:38,700 --> 00:05:41,500 We have this next quarter coming up it's going to be slow growth, 122 00:05:41,700 --> 00:05:44,800 we're not going to get like any type of huge stock spike in the 123 00:05:44,800 --> 00:05:47,400 next three months. And so a lot of investors that 124 00:05:47,400 --> 00:05:49,900 are looking for gains tomorrow, they're looking to make gains 125 00:05:49,900 --> 00:05:52,400 quickly. They know that Amazon is likely 126 00:05:52,400 --> 00:05:54,500 considered dead money. Meaning it's just going to float 127 00:05:54,500 --> 00:05:57,700 around in the same area for at least the next three months. 128 00:05:58,000 --> 00:06:00,700 And if you're kind of impatient, if Want to get into a company 129 00:06:00,700 --> 00:06:02,500 that's moving along and doing things right now. 130 00:06:02,800 --> 00:06:05,400 You might bail out on Amazon, say look this company's dead 131 00:06:05,400 --> 00:06:06,500 money. They're not really growing 132 00:06:06,500 --> 00:06:08,600 quickly. They gave really soft, guidance 133 00:06:08,600 --> 00:06:11,100 lower than expectations. I'm going to take my money out 134 00:06:11,100 --> 00:06:13,400 of Amazon and move on to a different company. 135 00:06:13,700 --> 00:06:15,800 And I think that's where investors get this, a little 136 00:06:15,800 --> 00:06:18,700 wrong. These top-line estimates of the 137 00:06:19,000 --> 00:06:21,300 three to seven percent Revenue growth. 138 00:06:21,900 --> 00:06:24,600 I don't think is how you should measure growth with Amazon. 139 00:06:24,700 --> 00:06:27,500 I really don't, and I think it's the same mistake that investors 140 00:06:27,500 --> 00:06:30,200 make with apple. Apple has overall All very, 141 00:06:30,200 --> 00:06:33,000 slow, top-line growth. They grew by nine percent last 142 00:06:33,000 --> 00:06:34,900 quarter. It's not a fast growing company 143 00:06:35,200 --> 00:06:37,900 but Apple has other profitable parts of their company. 144 00:06:37,900 --> 00:06:40,900 Underneath that Top Line that are growing at a much quicker 145 00:06:40,900 --> 00:06:42,900 pace. And likewise, when you look at 146 00:06:42,900 --> 00:06:46,400 Amazon with this 3 to 7% growth, there's a lot of other parts of 147 00:06:46,400 --> 00:06:47,800 the company that are growing much quicker. 148 00:06:47,900 --> 00:06:50,000 So, let's go ahead and jump into this earnings report and take a 149 00:06:50,000 --> 00:06:52,600 deeper look of what's going on. Alright, so here we are with the 150 00:06:52,600 --> 00:06:55,400 Amazon earnings report and right off the bat, they have a bunch 151 00:06:55,400 --> 00:06:58,500 of highlights that investors just hate to see they really 152 00:06:58,500 --> 00:07:01,400 don't want to see this stuff at Stan, this Market this bearish 153 00:07:01,400 --> 00:07:04,900 Market, this stuff might be allowed normally, in like a 154 00:07:04,900 --> 00:07:08,200 bullish Market, where people are just concerned about optimism 155 00:07:08,200 --> 00:07:10,200 and future. But when the concerned about 156 00:07:10,200 --> 00:07:13,500 real cash flows right now, today this isn't the stuff they want 157 00:07:13,500 --> 00:07:15,900 to see. For example most value investors 158 00:07:15,900 --> 00:07:17,400 will look at the free cash flow line. 159 00:07:17,600 --> 00:07:20,600 They'll see that it decreased to an outflow of 18 point six 160 00:07:20,600 --> 00:07:22,400 billion for the trailing 12 months. 161 00:07:22,400 --> 00:07:23,900 So that's not just this last quarter. 162 00:07:24,200 --> 00:07:27,700 This is over the past 12 months, the past trailing gear but it's 163 00:07:27,700 --> 00:07:29,700 it operating or a free cash flow. 164 00:07:29,800 --> 00:07:32,700 So outflow of almost twenty billion dollars. 165 00:07:33,000 --> 00:07:35,400 So over the past 12 months, they've lost almost 20 billion 166 00:07:35,400 --> 00:07:37,900 dollars in. This is compared with an inflow 167 00:07:37,900 --> 00:07:40,300 of twenty six point four billion for the trailing 12 months, 168 00:07:40,600 --> 00:07:44,100 ending March 31st 2021. Now we can look at the free cash 169 00:07:44,100 --> 00:07:47,700 flow history on quatrain sites. This website and tools available 170 00:07:47,700 --> 00:07:49,500 to Patron members. If you want to try it out for 171 00:07:49,500 --> 00:07:52,000 free, you can join the patreon. Let's go ahead and bring up the 172 00:07:52,000 --> 00:07:53,400 free. Casual hair again. 173 00:07:53,400 --> 00:07:55,500 Free cash flows. Amount of money in the amount of 174 00:07:55,500 --> 00:07:57,900 money out. That's all no other context. 175 00:07:58,100 --> 00:07:59,700 Doesn't show what the money is going to. 176 00:07:59,900 --> 00:08:01,700 Going to be a creative for the company, what they're paying 177 00:08:01,700 --> 00:08:05,600 for, doesn't, it doesn't even show you if they generated the 178 00:08:05,600 --> 00:08:07,200 free cash flow by selling more shares. 179 00:08:07,300 --> 00:08:08,800 Many companies have free cash flow. 180 00:08:09,000 --> 00:08:11,000 That's just because there are diluting the shareholder or 181 00:08:11,000 --> 00:08:13,300 they're selling Investments or they're selling factories or 182 00:08:13,308 --> 00:08:16,000 something, right. All free cash flow does is tell 183 00:08:16,000 --> 00:08:20,100 you money in Money out that quarter that year with no other 184 00:08:20,100 --> 00:08:21,800 context. So you have to look at the 185 00:08:21,808 --> 00:08:25,700 context of what they're doing with this, but Amazon has this 186 00:08:25,700 --> 00:08:28,500 frustrating thing going on with their free cash flow line item. 187 00:08:28,900 --> 00:08:32,900 We're in 17 when Amazon was like a quarter of the size they 188 00:08:32,900 --> 00:08:36,500 currently, are they posted positive free cash flow, 6.4 189 00:08:36,500 --> 00:08:40,100 billion dollars and then it's only gone up by multiple Stenson 190 00:08:40,500 --> 00:08:45,900 to 17 billion in 2018, 19 or 21 billion in 2019. 191 00:08:46,200 --> 00:08:49,600 And just in 2020, they posted twenty five point nine billion 192 00:08:50,000 --> 00:08:53,400 in free cash flow. Now, you might say this is all 193 00:08:53,400 --> 00:08:55,600 because of the stimulus, they're only a good company. 194 00:08:55,600 --> 00:09:00,300 When there's stimulus, well, before the stimulus back in 19, 195 00:09:00,400 --> 00:09:03,900 they posted 21 billion dollars of free cash flow as before any 196 00:09:03,900 --> 00:09:08,200 stimulus is given out. So Amazon can post positive free 197 00:09:08,200 --> 00:09:12,100 cash flow on a very consistent basis without a stimulus 198 00:09:12,100 --> 00:09:14,400 environment and what we're seeing right now. 199 00:09:14,400 --> 00:09:19,500 Last year in 2021, they posted - fourteen point seven billion 200 00:09:19,500 --> 00:09:22,300 dollars in free cash flow. What's going on here? 201 00:09:22,400 --> 00:09:24,800 Where is this money going? What are you doing with it, 202 00:09:24,800 --> 00:09:26,000 right? This is a question that 203 00:09:26,000 --> 00:09:28,200 investors have and then comparing that to the most 204 00:09:28,200 --> 00:09:31,000 recent quarter they say that that At outflow has increased 205 00:09:31,000 --> 00:09:35,400 from the 14 billion to 18 point six billion for the trailing 12 206 00:09:35,400 --> 00:09:37,500 months. So their free cash flow is just 207 00:09:37,500 --> 00:09:39,400 getting worse and worse. They're paying for a lot of 208 00:09:39,400 --> 00:09:40,900 stuff. They're buying a lot of stuff 209 00:09:41,100 --> 00:09:44,000 and they don't give a lot of transparency into where this 210 00:09:44,000 --> 00:09:46,200 money's going. They don't have a big thing that 211 00:09:46,200 --> 00:09:48,200 says, here's all this free cash flow on exactly where it's 212 00:09:48,200 --> 00:09:50,300 going. You have to kind of dig and find 213 00:09:50,300 --> 00:09:52,800 that out for yourself. But as of right now what we know 214 00:09:52,800 --> 00:09:55,200 right now going through this report is they have a ton of 215 00:09:55,208 --> 00:09:57,400 money almost 20 billion dollars in the last 12 months. 216 00:09:57,400 --> 00:09:59,700 Just going out of the company, we don't really know what. 217 00:09:59,800 --> 00:10:03,400 For and the year, prior to that, in 2020, was much better. 218 00:10:03,400 --> 00:10:04,800 They had positive money coming in. 219 00:10:04,800 --> 00:10:07,400 So it seems like things are moving in the wrong direction. 220 00:10:07,700 --> 00:10:11,900 Now, we also have this glaring problem right here, the net 221 00:10:11,900 --> 00:10:14,100 loss. So, this was what Wall Street 222 00:10:14,100 --> 00:10:16,900 Journal highlighted on their big front page, right after the 223 00:10:16,900 --> 00:10:20,700 earnings report, Amazon has the first loss in a decade. 224 00:10:21,200 --> 00:10:23,300 Wow, the company has a first net loss. 225 00:10:24,000 --> 00:10:26,700 A net loss of 3.8 billion for the first quarter. 226 00:10:27,000 --> 00:10:31,100 Now keep in mind to add some context here that includes a 227 00:10:31,300 --> 00:10:35,700 paper loss of their investment in Riven of seven point six 228 00:10:35,700 --> 00:10:37,900 billion dollars. So Amazon invested in this 229 00:10:37,900 --> 00:10:41,000 company revision and the stock price went through the moon at 230 00:10:41,000 --> 00:10:45,500 went to a bubble territory and Amazon had a record, this net 231 00:10:45,800 --> 00:10:49,800 income gain of like billions of dollars because rivi and was 232 00:10:49,800 --> 00:10:51,400 valued at a hundred billion dollars. 233 00:10:51,800 --> 00:10:54,900 Then the bubble popped rivi and came back down in price. 234 00:10:54,900 --> 00:10:58,000 And now Amazon has to record that as a loss from last quarter 235 00:10:58,200 --> 00:11:01,300 seven point six billion dollars, But they really didn't lose any 236 00:11:01,300 --> 00:11:03,800 money on this company. They're still in the green 237 00:11:03,800 --> 00:11:07,300 overall in it and if you exclude, the seven point, six 238 00:11:07,300 --> 00:11:10,100 billion dollar loss the Amazon took on from the ribbon steak, 239 00:11:10,500 --> 00:11:12,600 the actually made about four billion dollars this quarter. 240 00:11:12,700 --> 00:11:16,700 So their net income line would have been positive for billion 241 00:11:16,700 --> 00:11:18,500 dollars. And the Wall Street Journal 242 00:11:18,500 --> 00:11:20,700 wouldn't have been able to run that that scary headline. 243 00:11:20,900 --> 00:11:23,900 Amazon is losing money. A net income loss for the first 244 00:11:23,900 --> 00:11:26,400 time in a decade, right? That is caused because of the 245 00:11:26,400 --> 00:11:29,000 ribbon steak. Now, having said that the 246 00:11:29,000 --> 00:11:32,500 operating income, Um, doesn't include the riveting stake and 247 00:11:32,500 --> 00:11:35,200 that was still only three point seven billion dollars compared 248 00:11:35,200 --> 00:11:38,200 with eight point nine billion for the last year. 249 00:11:38,200 --> 00:11:40,000 So, even excluding for the ribbon steak. 250 00:11:40,000 --> 00:11:42,600 It still doesn't look pretty. They're operating income 251 00:11:42,800 --> 00:11:46,300 decreased by over half year over year down to 3.7 billion. 252 00:11:46,300 --> 00:11:48,900 So that's what we know so far. And I think this is where most 253 00:11:48,900 --> 00:11:52,200 investors kind of stopped their their research, they read some 254 00:11:52,200 --> 00:11:54,900 of the top line information, they look at the next quarter's 255 00:11:54,900 --> 00:11:56,700 forecast. They're looking at these numbers 256 00:11:56,700 --> 00:11:58,500 and seeing that growth is slowing down. 257 00:11:58,700 --> 00:12:01,700 They're moving Prime day. I'm Q2 Q3 it looks like it's 258 00:12:01,700 --> 00:12:04,800 going to be another slow or dead quarter and then they're looking 259 00:12:04,800 --> 00:12:06,500 at the cash flows and they're seeing cash flows. 260 00:12:06,500 --> 00:12:08,900 Moving out of the company doesn't seem like it's stopping 261 00:12:08,900 --> 00:12:11,900 anytime real soon and it just seems like there's better 262 00:12:11,900 --> 00:12:14,700 opportunities and I totally understand if investors see it 263 00:12:14,700 --> 00:12:16,800 that way. But I want to go and dive a 264 00:12:16,808 --> 00:12:18,900 little bit deeper into this report because I think there's 265 00:12:18,900 --> 00:12:21,900 some things that are very very important to highlight that. 266 00:12:21,900 --> 00:12:23,300 I think most investors are missing. 267 00:12:23,600 --> 00:12:28,600 First of all they do give a ray of Hope with their capex spend. 268 00:12:28,600 --> 00:12:31,600 We know that Amazon is Been spending a fortune to build out 269 00:12:31,600 --> 00:12:34,600 all their infrastructure in their delivery Network and 270 00:12:34,600 --> 00:12:37,200 that's where a lot of those billions of dollars of outflows 271 00:12:37,200 --> 00:12:38,500 over the past 12 months have gone. 272 00:12:38,900 --> 00:12:43,000 But they say today as we're no longer chasing physical or 273 00:12:43,000 --> 00:12:45,900 Staffing capacity, they're no longer Staffing up. 274 00:12:45,900 --> 00:12:48,000 That's a huge expense for Amazon. 275 00:12:48,200 --> 00:12:50,900 All those bonuses, they're doing hiring hundreds. 276 00:12:50,900 --> 00:12:53,400 Literally hundreds of thousands of people, they're no longer 277 00:12:53,400 --> 00:12:56,400 doing that. They say our team are squarely 278 00:12:56,400 --> 00:12:59,600 focused on improving productivity and cost efficient. 279 00:12:59,800 --> 00:13:02,200 Is throughout our fulfillment Network. 280 00:13:02,400 --> 00:13:05,300 And Amazon has made multiple statements like this throughout 281 00:13:05,300 --> 00:13:08,100 their earnings call as well saying that they're, they're 282 00:13:08,200 --> 00:13:11,500 going to basically cut back on capex and focus more on 283 00:13:11,700 --> 00:13:14,700 efficiencies and profitability. That's exactly what a lot of 284 00:13:14,708 --> 00:13:18,100 investors are looking at Amazon. Not just spending endless 285 00:13:18,100 --> 00:13:20,400 amounts of money on growth but actually trying to become a 286 00:13:20,408 --> 00:13:22,500 little bit more lean and efficient and having some of 287 00:13:22,500 --> 00:13:24,600 that Revenue some of that cash flow stick around. 288 00:13:24,700 --> 00:13:27,000 So what we're looking at right now is I think one of the most 289 00:13:27,000 --> 00:13:30,300 important parts of this earnings report Which is an actual 290 00:13:30,300 --> 00:13:33,600 breakdown of all the individual parts of Amazon's business. 291 00:13:33,600 --> 00:13:36,000 If you just look at the Top Line, growth just the overall 292 00:13:36,000 --> 00:13:39,500 Revenue, everything will be overshadowed by their first 293 00:13:39,500 --> 00:13:42,300 party retail business. And that is specifically the 294 00:13:42,300 --> 00:13:45,700 lowest margin part of Amazon, that's where they subsidize a 295 00:13:45,700 --> 00:13:48,300 lot of their stuff just to sell more, to make it so that their, 296 00:13:48,300 --> 00:13:50,400 their online store has a complete selection. 297 00:13:50,400 --> 00:13:54,100 There's a lot of services that Amazon has that are much higher 298 00:13:54,100 --> 00:13:57,500 margin that get overshadowed by that top line revenue growth. 299 00:13:57,500 --> 00:14:00,500 So if you just look at the Wall Street, Headlines, you'll see 300 00:14:00,500 --> 00:14:02,300 the Amazons growth is slowing down. 301 00:14:02,700 --> 00:14:05,600 This will actually show you the growth of the individual parts 302 00:14:05,600 --> 00:14:07,800 of the business. So if we look at this, the first 303 00:14:07,800 --> 00:14:11,300 item here that biggest part of Amazon's revenue is their online 304 00:14:11,300 --> 00:14:13,800 stores. Their first party seller, and 305 00:14:13,800 --> 00:14:15,400 they do a monstrous amount of Revenue. 306 00:14:15,400 --> 00:14:19,000 But again, this is the lowest margin part of their company. 307 00:14:19,200 --> 00:14:22,000 It's extremely low margins. So even though the numbers are 308 00:14:22,000 --> 00:14:25,200 enormous and it makes that Revenue figure look, look like 309 00:14:25,200 --> 00:14:28,000 it's slowing overall. This isn't the most important 310 00:14:28,000 --> 00:14:29,600 part of the company in terms of operating. 311 00:14:29,700 --> 00:14:32,900 Eating margins. It went from from sixty six 312 00:14:32,900 --> 00:14:35,300 billion last quarter to 51 billion. 313 00:14:35,300 --> 00:14:38,400 So it's slow down and on a year-over-year basis. 314 00:14:38,400 --> 00:14:42,800 It went from fifty two point nine billion, 250 1.1, so slow 315 00:14:42,800 --> 00:14:46,200 down by around three percent, see how to deceleration in their 316 00:14:46,200 --> 00:14:48,700 first party business. Now let's move on to different 317 00:14:48,700 --> 00:14:50,800 parts of their business. They have physical stores. 318 00:14:51,100 --> 00:14:55,200 This includes Whole Foods, and Amazon Fresh, and Amazon, go and 319 00:14:55,200 --> 00:14:58,300 all the new different store, concepts are opening up this 320 00:14:58,300 --> 00:15:01,400 grew at 17%. That's pretty decent growth. 321 00:15:01,500 --> 00:15:06,100 High teen double-digit growth. We have third-party sellers. 322 00:15:06,100 --> 00:15:09,600 This is the services. So this is where Amazon doesn't 323 00:15:09,600 --> 00:15:11,400 record the entire sale as Revenue. 324 00:15:11,500 --> 00:15:13,000 Just the part where they make money. 325 00:15:13,200 --> 00:15:16,200 So this is much higher much, higher margin than the first 326 00:15:16,200 --> 00:15:19,300 party business third-party, sellers Group by 7%. 327 00:15:19,500 --> 00:15:22,100 That's steady growth, even with a lot of headwinds. 328 00:15:22,100 --> 00:15:24,700 Even with a lot of consumer issues, the high margin part of 329 00:15:24,700 --> 00:15:26,900 the business grew by 7% year-over-year. 330 00:15:26,900 --> 00:15:29,800 Now moving on, we have the next item here which is another ER 331 00:15:29,800 --> 00:15:33,500 service-oriented business, which is their subscription services. 332 00:15:33,900 --> 00:15:37,300 This is another high-margin important part of their business 333 00:15:37,600 --> 00:15:40,000 and it doesn't just mean Amazon, Prime membership. 334 00:15:40,000 --> 00:15:42,600 That's not all. This is it includes like the 335 00:15:42,600 --> 00:15:44,800 ring doorbell. Those subscriptions and includes 336 00:15:44,800 --> 00:15:50,000 their their fitness watches Kindle Amazon music, so on and 337 00:15:50,000 --> 00:15:53,000 so forth, all that various stuff, they bundle all those 338 00:15:53,000 --> 00:15:55,300 different subscription Services together and they give you a 339 00:15:55,308 --> 00:15:58,200 total number and I can't stress this enough. 340 00:15:58,500 --> 00:16:01,300 The number over I was only eight point, four billion. 341 00:16:01,300 --> 00:16:03,800 Last quarter, seems like a small number, especially compared to 342 00:16:03,800 --> 00:16:07,800 the 51 billion. They did in Top Line or in their 343 00:16:07,800 --> 00:16:10,100 online stores. So if you just compare these 344 00:16:10,100 --> 00:16:13,600 numbers 1 to 1, then it looks like this one is more important. 345 00:16:13,900 --> 00:16:17,100 But again the margins on the subscription services are 346 00:16:17,100 --> 00:16:20,300 dramatically higher. So even though they pull in less 347 00:16:20,300 --> 00:16:23,000 Revenue, they keep far more of it and it's more profitable part 348 00:16:23,000 --> 00:16:25,300 of the company. If I was looking at Apple and 349 00:16:25,300 --> 00:16:29,000 doing analysis on Apple, which I've done, I look at the service 350 00:16:29,000 --> 00:16:31,500 parts of the business. As the most meaningful part of 351 00:16:31,500 --> 00:16:34,800 growth, how much is applicant to grow, their apple music and 352 00:16:34,800 --> 00:16:38,800 Apple TV and their Apple Cloud. Are they going to move to a 353 00:16:38,800 --> 00:16:41,200 hardware as a service, right? That service part of the 354 00:16:41,200 --> 00:16:44,600 business is way more meaningful than if Apple grows their top 355 00:16:44,600 --> 00:16:46,500 line revenue by five or ten percent. 356 00:16:46,700 --> 00:16:48,800 That's great. But the part that you want to 357 00:16:48,800 --> 00:16:51,500 grow the most is the most high margin part of the company. 358 00:16:51,900 --> 00:16:55,800 So when I look at Amazon, I try to apply that same thinking, the 359 00:16:55,900 --> 00:16:59,300 top line revenue is heavily affected by this number here, 360 00:16:59,300 --> 00:17:02,700 from Online store but the subscription services are 361 00:17:02,700 --> 00:17:06,000 growing pretty quickly. It grew by 11% year-over-year. 362 00:17:06,099 --> 00:17:09,700 That's double digit growth for the subscription service and 363 00:17:09,700 --> 00:17:12,500 then that's not the only high-margin part of the business 364 00:17:12,500 --> 00:17:14,800 advertising is incredibly high margin. 365 00:17:15,500 --> 00:17:18,900 It's actually probably more high margin than their AWS business 366 00:17:19,099 --> 00:17:21,800 and their advertising last quarter was seven point eight 367 00:17:21,800 --> 00:17:26,500 seven billion dollars that is a 23% growth year over year. 368 00:17:26,900 --> 00:17:31,800 So the advertising portion of Amazon where they sell ads on 369 00:17:32,100 --> 00:17:36,600 their IMDb TV or their free V, they sell ads on, you know, 370 00:17:36,600 --> 00:17:39,700 amazon.com, the sponsored listings where they're selling 371 00:17:39,700 --> 00:17:43,300 ads, they're growing faster than Google, which is an ad business 372 00:17:43,500 --> 00:17:47,500 that's been their business. All along this 23% growth is 373 00:17:47,500 --> 00:17:51,100 faster than Google and it's double the rate of growth that 374 00:17:51,100 --> 00:17:53,500 YouTube just posted at like 14 percent. 375 00:17:53,500 --> 00:17:57,100 So just shy of double that is very fast growth in their 376 00:17:57,100 --> 00:18:00,100 advertising business. And again, this is Edible a high 377 00:18:00,100 --> 00:18:03,100 margin so the high margin parts of this company. 378 00:18:03,300 --> 00:18:07,000 The 3rd party seller grew at 7% the subscription Services Group 379 00:18:07,000 --> 00:18:11,200 by 11% the advertising so far has grown by 23%. 380 00:18:11,200 --> 00:18:13,700 Those are the high margin Parts, the low margin part shrunk by 381 00:18:13,700 --> 00:18:15,500 3%. Now, moving on, after that, we 382 00:18:15,500 --> 00:18:17,500 have the biggest part of the company. 383 00:18:17,500 --> 00:18:21,200 I think the most meaningful part, which is AWS, Amazon's web 384 00:18:21,200 --> 00:18:23,300 services. Everyone knows that this is a 385 00:18:23,308 --> 00:18:25,300 good part of the company. It's highly debated. 386 00:18:25,300 --> 00:18:26,700 What it's currently worth, though? 387 00:18:27,500 --> 00:18:30,100 What I can see is an AWS continues to grow At a very 388 00:18:30,100 --> 00:18:35,600 steady Pace last quarter, they recorded growth of 37 percent 37 389 00:18:35,600 --> 00:18:39,600 percent slower than Google Cloud Pro, that's correct. 390 00:18:39,600 --> 00:18:43,600 Slower than Microsoft Azure, but it's already much bigger. 391 00:18:43,600 --> 00:18:46,600 It's a much bigger service. So they're, they're growing at a 392 00:18:46,608 --> 00:18:50,800 bigger size still at 37%. I think that's pretty decent in 393 00:18:50,800 --> 00:18:53,600 my opinion. The only one that could catch up 394 00:18:53,600 --> 00:18:56,200 and possibly beat them is Microsoft. 395 00:18:56,200 --> 00:18:58,100 I think they're the only one capable of doing that. 396 00:18:58,400 --> 00:19:01,200 I still think it's unlikely. But if they do, so what I own 397 00:19:01,200 --> 00:19:04,200 about as much, Microsoft stock is, I do Amazon. 398 00:19:04,200 --> 00:19:07,200 I am so bullish on cloud overall, that's why I own 399 00:19:07,200 --> 00:19:11,300 Amazon, Microsoft and Google S, 3 of my biggest biggest Holdings 400 00:19:11,300 --> 00:19:12,800 by far. Now, this is what most people 401 00:19:12,800 --> 00:19:15,300 looked at. Again, just the 37 percent 402 00:19:15,300 --> 00:19:19,000 growth in AWS which in and of itself is just tremendous. 403 00:19:19,000 --> 00:19:23,600 AWS did eighteen point four billion dollars in Revenue last 404 00:19:23,600 --> 00:19:25,200 quarter. That is pretty incredible. 405 00:19:25,800 --> 00:19:28,000 Now, to give this more context, we can look at this nice chart 406 00:19:28,000 --> 00:19:31,100 here, provided by Alex Morse. Twitter, he puts together all 407 00:19:31,100 --> 00:19:35,400 these nice charts and this one is the AWS run rate revenues, 408 00:19:35,400 --> 00:19:38,600 which is how much they Revenue last quarter times 4. 409 00:19:38,600 --> 00:19:41,000 So you just look at how much conservatively they would make 410 00:19:41,000 --> 00:19:43,900 over the next year and this shows that plotted out quarter 411 00:19:43,900 --> 00:19:47,200 by quarter, you can see visualized her AWS is growth. 412 00:19:47,200 --> 00:19:51,300 It is pretty tremendous. This is a growth part of Amazon 413 00:19:51,700 --> 00:19:54,700 and last quarter at grew Again by 37 percent. 414 00:19:54,900 --> 00:19:57,400 Now that will decelerate a little bit, it'll go back to, 415 00:19:57,700 --> 00:19:59,500 you know, 35 percent or 30 percent. 416 00:19:59,600 --> 00:20:02,800 Didn't the high 20s but it will continue to grow. 417 00:20:03,200 --> 00:20:06,800 And even though this Top Line growth from AWS is impressive, 418 00:20:07,000 --> 00:20:09,700 there's more parts of this that are more impressive. 419 00:20:09,700 --> 00:20:13,800 So most investors are focused on that Top Line growth of AWS and 420 00:20:13,800 --> 00:20:16,300 they compared that to Microsoft Azure that compared to Google 421 00:20:16,300 --> 00:20:18,100 Cloud. But I think another thing that 422 00:20:18,100 --> 00:20:21,900 investors are mostly forgetting about with this Top Line number 423 00:20:22,200 --> 00:20:27,400 is profitability, AWS is very, very profitable and the margins 424 00:20:27,400 --> 00:20:31,500 of it, they said went from 29%. Percent to 35 percent. 425 00:20:31,500 --> 00:20:36,000 Now they have 35 percent margins last quarter on AWS, Google 426 00:20:36,000 --> 00:20:38,600 cloud is growing faster but it's still not profitable, the 427 00:20:38,600 --> 00:20:40,700 margins are increasing for Google Cloud. 428 00:20:40,700 --> 00:20:44,300 I think it's a good investment but AWS is not only growing at a 429 00:20:44,308 --> 00:20:48,600 very fast pace, but it's already a massive company and it has 35 430 00:20:48,600 --> 00:20:50,700 percent margins. Now, one last thing that I think 431 00:20:50,700 --> 00:20:55,300 is well worth mentioning on the subject of AWS is in the Q&A 432 00:20:55,300 --> 00:20:57,100 section at the tail end of the call. 433 00:20:57,600 --> 00:21:00,000 The Highlight something important here in this Back to 434 00:21:00,000 --> 00:21:02,900 an accounting rule, that happened in 2018, they made this 435 00:21:02,900 --> 00:21:07,000 new rule that publicly traded companies have to disclose, it 436 00:21:07,000 --> 00:21:10,400 was a disclosure rule that they have to disclose their long-term 437 00:21:10,500 --> 00:21:13,100 commitment. So any commitment that's longer 438 00:21:13,100 --> 00:21:16,000 than one year, they have to disclose the amount and what 439 00:21:16,000 --> 00:21:20,900 it's for and that revealed some information about AWS because 440 00:21:20,900 --> 00:21:23,700 AWS has a lot of customers that have long-term commitments to 441 00:21:23,700 --> 00:21:26,900 get different guarantees and different reductions in price. 442 00:21:26,900 --> 00:21:30,000 So a company might sign up and say, look, we love AWS. 443 00:21:30,000 --> 00:21:32,500 We're going to build our company on it, we want a three or four 444 00:21:32,500 --> 00:21:35,100 year contract for like a 20% discount, right? 445 00:21:35,200 --> 00:21:37,700 Just hypothetically, that type of thing, happens all the time. 446 00:21:38,100 --> 00:21:40,900 So you have these commitments, many of them are longer than one 447 00:21:40,900 --> 00:21:44,300 year and this new accounting rule back in 2018 made it so 448 00:21:44,300 --> 00:21:47,600 that every company has to reveal and disclose what those 449 00:21:47,600 --> 00:21:50,200 commitments are. Now, in this question, they say 450 00:21:51,300 --> 00:21:55,000 that it's an increase of AWS customers making long-term 451 00:21:55,000 --> 00:21:57,500 commitments. So again, this doesn't count any 452 00:21:57,500 --> 00:22:00,800 customer this month over month or Contract within one year's 453 00:22:00,800 --> 00:22:03,500 length, this is just one year, plus they say at the March 454 00:22:03,500 --> 00:22:07,400 period ended, we had eighty eight point nine billion balance 455 00:22:07,400 --> 00:22:09,400 for that. That's the current commitments 456 00:22:09,400 --> 00:22:14,300 Beyond one year so that's up around 68 percent year over year 457 00:22:14,600 --> 00:22:18,100 and the weighted average ranking kind of in life term is three 458 00:22:18,100 --> 00:22:21,600 point eight years. So AWS has this guaranteed 459 00:22:21,600 --> 00:22:25,300 revenue of at least eighty eight point nine billion with an 460 00:22:25,300 --> 00:22:29,200 average life span of three point eight years and on top of that, 461 00:22:29,500 --> 00:22:33,000 The growth in their long-term commitments year over year was 462 00:22:33,000 --> 00:22:36,300 up 68%. This is something people glanced 463 00:22:36,300 --> 00:22:37,600 over, they don't even look at this. 464 00:22:37,800 --> 00:22:40,500 This is like the bookings for the company, their long-term 465 00:22:40,500 --> 00:22:42,900 commitments. And they have, you know, if you 466 00:22:42,900 --> 00:22:44,900 break these commitments to companies have to pay. 467 00:22:44,900 --> 00:22:47,200 So it's also has customer lock in. 468 00:22:47,300 --> 00:22:50,600 So AWS has this continual growing forward Revenue stream 469 00:22:50,900 --> 00:22:52,500 right now. That's eighty eight point, nine 470 00:22:52,500 --> 00:22:56,200 billion, that's up 68 percent year over year, they're locking 471 00:22:56,200 --> 00:22:59,400 in more and more customers for longer and longer durations. 472 00:22:59,600 --> 00:23:01,800 And they're moving up this commitment to a bigger and 473 00:23:01,800 --> 00:23:03,700 bigger number. What I want to do is actually 474 00:23:03,700 --> 00:23:05,800 look at this number and see how it progresses over time. 475 00:23:05,800 --> 00:23:08,500 Because I think I think next quarter it could be over a 476 00:23:08,500 --> 00:23:10,400 hundred billion. So that's what I would point out 477 00:23:10,400 --> 00:23:12,800 on AWS. I think the business is stronger 478 00:23:12,800 --> 00:23:15,400 than investors, are giving it credit for the margins are 479 00:23:15,400 --> 00:23:17,400 improving. The growth rate is incredibly 480 00:23:17,400 --> 00:23:19,500 healthy, the amount of bookings and commitments. 481 00:23:19,500 --> 00:23:23,500 For the future is growing at a very rapid Pace 68 percent year, 482 00:23:23,500 --> 00:23:26,000 over year. Now, on the other category, I'm 483 00:23:26,000 --> 00:23:29,900 not really even sure what this includes, but it's 600. 61 484 00:23:29,900 --> 00:23:31,800 million dollars and it grew at 26 percent. 485 00:23:31,800 --> 00:23:33,500 So it's a small part of the company. 486 00:23:33,500 --> 00:23:35,900 So again, when I look over all the different various aspects of 487 00:23:35,900 --> 00:23:38,600 Amazon, and then I look at the headlines in the narrative, that 488 00:23:38,600 --> 00:23:41,200 Amazon is no longer growing and the growth is basically 489 00:23:41,200 --> 00:23:43,400 stagnated. I don't necessarily agree with 490 00:23:43,400 --> 00:23:45,500 that. It's true that the online retail 491 00:23:45,500 --> 00:23:49,000 portion, the low-margin part of the business is Contracting and 492 00:23:49,000 --> 00:23:52,400 we see the GDP numbers, right? Consumers are probably spending 493 00:23:52,400 --> 00:23:54,700 Less on online retail. And if they are spending money, 494 00:23:54,700 --> 00:23:57,300 they're going out and doing more experiential stuff. 495 00:23:57,600 --> 00:24:00,600 But we look at the services part of this Beneath the high margin 496 00:24:00,600 --> 00:24:03,800 part of the company. We have the 3rd party seller 497 00:24:03,800 --> 00:24:06,900 Services. That's high margin that gret 7%, 498 00:24:06,900 --> 00:24:10,500 the subscription services that great 11% the advertising 499 00:24:10,500 --> 00:24:14,100 Services grew faster than Google and almost double the rate of 500 00:24:14,100 --> 00:24:19,300 YouTube at 23%, we have AWS growing at 37%, these are all 501 00:24:19,300 --> 00:24:22,600 growing at a pretty steady Pace far more than the stagnant 502 00:24:22,600 --> 00:24:24,900 company that the median, the headlines would have you 503 00:24:24,900 --> 00:24:26,400 believe. And if you add up, the total 504 00:24:26,400 --> 00:24:29,300 revenue of these service part of the company and the non server, 505 00:24:29,500 --> 00:24:33,100 Sparked Services now, make up 52 percent of total revenues. 506 00:24:33,100 --> 00:24:36,400 So, now, over 50% of Amazon is service-based revenue. 507 00:24:36,400 --> 00:24:38,400 So when I look over this earnings report and try to dig 508 00:24:38,400 --> 00:24:41,300 down on it, I, you know, I'm biased. 509 00:24:41,300 --> 00:24:44,800 I I own a lot of Amazon stock. I love the company. 510 00:24:44,800 --> 00:24:47,800 I have a big investment in it. I think this company is heavily 511 00:24:47,800 --> 00:24:50,600 undervalued and will be worth much more in three or four years 512 00:24:50,600 --> 00:24:53,900 when Market sentiment changes from the very bearish bearish 513 00:24:53,900 --> 00:24:57,500 sentiment that it's in. And so I didn't see this as 514 00:24:57,500 --> 00:25:00,600 quite as bad as most investors, Now, that's my take on. 515 00:25:00,600 --> 00:25:02,200 I realize a lot of people disagree. 516 00:25:02,500 --> 00:25:04,500 They think that Amazon is heavily overvalued. 517 00:25:04,500 --> 00:25:07,300 And if you think that, then that's fine, don't invest in it. 518 00:25:07,300 --> 00:25:09,700 I'm not, you know, I'm not telling anyone to invest in 519 00:25:09,700 --> 00:25:12,200 Amazon, I'm just showing you what I'm doing with my money, 520 00:25:12,200 --> 00:25:17,300 but when I look at Amazon, what I see is the top line revenue 521 00:25:17,300 --> 00:25:20,800 growth being shaky and the low-margin retail business 522 00:25:20,800 --> 00:25:22,900 Contracting a bit because of GDP. 523 00:25:23,200 --> 00:25:27,600 I also see that they're AWS business, highly profitable wide 524 00:25:27,600 --> 00:25:31,700 moat, very difficult to compete with Grew up 37%, the margins, 525 00:25:31,700 --> 00:25:36,100 improved on it, by 29 percent to 35 percent the backlog. 526 00:25:36,100 --> 00:25:39,400 The commitments went up 68 percent to eighty nine billion. 527 00:25:39,600 --> 00:25:43,900 That's a massive increase in one year plus commitments, that free 528 00:25:43,900 --> 00:25:47,000 cash flow, the big red number, right. 529 00:25:47,000 --> 00:25:50,000 The 18 billion dollars of cash out flows over the trailing 12 530 00:25:50,000 --> 00:25:51,200 months. I look at that. 531 00:25:51,200 --> 00:25:53,900 And I say, well, we don't really know what that's going to write. 532 00:25:53,900 --> 00:25:55,700 We know that they did a ton of capex. 533 00:25:55,700 --> 00:25:58,400 They bought more warehouses. They doubled their delivery 534 00:25:58,400 --> 00:26:00,700 network. Over the last But they also just 535 00:26:00,700 --> 00:26:03,600 did things like by MGM. That was an eight point five 536 00:26:03,600 --> 00:26:05,900 billion dollar deal that closed last quarter. 537 00:26:06,200 --> 00:26:08,800 So that's eight point five billion of that, 18 billion 538 00:26:08,800 --> 00:26:11,700 almost half of it. So Amazon isn't just wasting 539 00:26:11,700 --> 00:26:14,200 money, they're buying valuable assets. 540 00:26:14,200 --> 00:26:18,700 Like MGM to prop up their, their value proposition and Amazon 541 00:26:18,700 --> 00:26:22,600 Prime and take more market. Share their advertising, grew by 542 00:26:22,600 --> 00:26:26,900 23%, which is faster than Google and almost double the rate of 543 00:26:26,900 --> 00:26:29,600 YouTube's at growth. And that has a lot of Growth 544 00:26:29,600 --> 00:26:31,800 ahead of it, my opinion, they have the Freeview Channel which 545 00:26:31,800 --> 00:26:34,300 is going to compete with Roku Originals. 546 00:26:34,300 --> 00:26:35,900 It's one of those free little apps. 547 00:26:35,900 --> 00:26:38,600 We're going to be putting a lot of content on it and I see a lot 548 00:26:38,600 --> 00:26:41,300 of future growth just in their advertising business and their 549 00:26:41,300 --> 00:26:44,400 subscription Services Group by 11% their physical store growth 550 00:26:44,400 --> 00:26:47,200 was 17% there. Third-party sellers were seven 551 00:26:47,200 --> 00:26:49,000 percent. So overall, I look at this and I 552 00:26:49,000 --> 00:26:51,600 really don't see it as as bad as the media's portrayal it. 553 00:26:51,700 --> 00:26:53,700 Now, having said that, let's go ahead and look at the damage to 554 00:26:53,700 --> 00:26:55,800 the portfolio. We know that Amazon is down like 555 00:26:55,800 --> 00:26:59,300 12% today, Major holding of mine, so I'm down. 556 00:26:59,500 --> 00:27:02,300 Thirty thousand dollars overall and I have a ninety seven 557 00:27:02,300 --> 00:27:05,400 thousand four hundred in value by just flip to the one day 558 00:27:05,400 --> 00:27:07,600 here, it's down. Six thousand dollars. 559 00:27:07,600 --> 00:27:10,800 Five point nine percent which is kind of sad because the day 560 00:27:10,800 --> 00:27:14,300 before, Amazon's or the day of Amazon's earnings report, I was 561 00:27:14,300 --> 00:27:17,800 up five thousand dollars and then Amazon, tanked 12% or 562 00:27:17,800 --> 00:27:19,600 whatever. So, I'm back down to where I was 563 00:27:19,600 --> 00:27:21,700 the day before. Now, if we look at this just 564 00:27:21,700 --> 00:27:24,600 today, it's down five thousand seven hundred dollars. 565 00:27:25,000 --> 00:27:29,900 Google's down 1.6, 4%, Microsoft's down 2% Sit down, 566 00:27:29,900 --> 00:27:33,100 1.45% Ali, Baba's up. I don't know what's going on 567 00:27:33,100 --> 00:27:38,000 there, but it's up, 500 bucks 9.5% and then Salesforce in 568 00:27:38,000 --> 00:27:40,800 Adobe and apple. All of these companies are 569 00:27:40,800 --> 00:27:43,100 moving down right now. The market does not like this 570 00:27:43,100 --> 00:27:46,400 portfolio, Amazon included. And that doesn't necessarily 571 00:27:46,400 --> 00:27:50,100 surprised me. We have GDP, turning - we have 572 00:27:50,100 --> 00:27:52,400 interest rates Rising. We have a lot of talk of 573 00:27:52,400 --> 00:27:56,200 recession coming up, and people run for the exits from tech 574 00:27:56,200 --> 00:27:57,400 companies. When that happens. 575 00:27:57,400 --> 00:27:59,300 Now, I have the choice of either. 576 00:27:59,500 --> 00:28:01,600 Staying invested in these companies that I think are 577 00:28:01,600 --> 00:28:04,200 undervalued and I think they'll have very good five-year returns 578 00:28:04,600 --> 00:28:06,600 or going into the very defensive companies. 579 00:28:06,600 --> 00:28:11,000 I realize, I could go on to Clorox and oil companies and you 580 00:28:11,000 --> 00:28:14,500 know, pile into Costco and all the defensive companies, but I 581 00:28:14,500 --> 00:28:16,300 just don't think that's the best. 582 00:28:16,300 --> 00:28:18,800 Move to go. Where everybody's going right 583 00:28:18,800 --> 00:28:21,600 now. Everyone seeking safety in other 584 00:28:21,600 --> 00:28:24,800 companies, besides these ones and I'm just going to stay put, 585 00:28:24,800 --> 00:28:26,800 I'm going to stay put in these companies and continue to dollar 586 00:28:26,800 --> 00:28:28,200 cost average in. Now, when we look at these 587 00:28:28,200 --> 00:28:30,300 returns the money, wait. It looks a little odd. 588 00:28:30,500 --> 00:28:32,200 Let me go ahead and go to the earnings page here. 589 00:28:32,300 --> 00:28:37,000 This might make it a little bit easier to see, I'm down 34800 590 00:28:37,100 --> 00:28:40,000 with my current Holdings. So my current Holdings are 591 00:28:40,000 --> 00:28:43,100 actually down more than my portfolio. 592 00:28:43,100 --> 00:28:46,600 Overall, with my actual realized gain or loss. 593 00:28:46,700 --> 00:28:49,000 I've realized about five thousand dollars in gain. 594 00:28:49,000 --> 00:28:53,100 So, all of my losses right now, literally, 100% of my losses are 595 00:28:53,100 --> 00:28:55,500 unrealised, and so far, the selling I've done with this 596 00:28:55,500 --> 00:28:57,800 portfolio, has been at a net gain. 597 00:28:57,800 --> 00:28:59,800 So if we look at this on a holding by holding Sis. 598 00:28:59,800 --> 00:29:03,200 We have the top holding which is Amazon, My Average share price 599 00:29:03,200 --> 00:29:08,200 is 3072 and I'm down 18 percent. As of right now, which is eight 600 00:29:08,200 --> 00:29:11,500 thousand two hundred dollars. Now, Amazon is down around 30 601 00:29:11,500 --> 00:29:15,800 percent from its all-time highs. I'm down 18 percent and I 602 00:29:15,800 --> 00:29:18,000 wouldn't be surprised in this market if it continues to just 603 00:29:18,000 --> 00:29:21,600 kind of Trail off and, and trade down for a while, I think it is 604 00:29:21,600 --> 00:29:25,100 likely the Amazon will be kind of dead money for the next next 605 00:29:25,100 --> 00:29:27,400 quarter. So, if you're looking for a 606 00:29:27,408 --> 00:29:29,900 quick gains or you're not willing to be patient with 607 00:29:29,900 --> 00:29:32,800 Amazon, then it's probably not a good company to hang around 608 00:29:32,800 --> 00:29:35,100 with, but I haven't changed my thoughts on Amazon to me this 609 00:29:35,100 --> 00:29:38,100 earnings report was not nearly as bad as the market reaction. 610 00:29:38,300 --> 00:29:41,800 Google's down also over 20 percent from its all-time highs. 611 00:29:41,800 --> 00:29:45,600 I'm down 1.9 5% now. So I've entered back into the 612 00:29:45,600 --> 00:29:49,500 red even on Google another company that I think is very 613 00:29:49,500 --> 00:29:51,600 undervalued. I think that Google is probably 614 00:29:51,600 --> 00:29:55,300 just a cleaner, kind of safer bet than Amazon. 615 00:29:55,500 --> 00:29:58,300 There's less moving Parts there in profit mode. 616 00:29:58,300 --> 00:30:01,200 They've already shifted. Two prophets in just returning 617 00:30:01,200 --> 00:30:03,700 money through share BuyBacks. So I think this will be less 618 00:30:03,700 --> 00:30:07,100 volatile going forward. But even with Google, I'm now 619 00:30:07,100 --> 00:30:10,100 entering into the red, Microsoft was another one that I was 620 00:30:10,100 --> 00:30:12,100 heavily in the green. It's given up a lot of its 621 00:30:12,100 --> 00:30:14,500 gains. It's down about 15 16 percent 622 00:30:14,500 --> 00:30:18,300 from its all-time highs and I'm only in the green by 3% Netflix. 623 00:30:18,300 --> 00:30:21,100 Of course is the the one that hit my portfolio the hardest. 624 00:30:21,500 --> 00:30:24,100 This one has been disastrous. The company seems to be 625 00:30:24,100 --> 00:30:26,900 contracting. I continue to hold it because I 626 00:30:26,900 --> 00:30:29,200 think there's a decent chance that the damage is already. 627 00:30:29,400 --> 00:30:31,200 Priced in. But this one by far has been the 628 00:30:31,200 --> 00:30:32,900 most damaging part of the portfolio. 629 00:30:33,000 --> 00:30:36,700 I'm down seventeen thousand dollars which is 62% Ali. 630 00:30:36,700 --> 00:30:40,600 Baba's down 43%. It went down quite a bit to 40%, 631 00:30:41,600 --> 00:30:45,300 then to 50% down. Now it's back to 43% and 632 00:30:45,300 --> 00:30:48,200 honestly it's kind of floated around this territory of me 633 00:30:48,200 --> 00:30:52,000 being down 40% for like three or four months I don't think it's 634 00:30:52,000 --> 00:30:55,300 really gone too far so I think there's a chance we've kind of 635 00:30:55,300 --> 00:30:58,200 leveled out with it but Ali Baba's one that I'm going to 636 00:30:58,200 --> 00:31:00,400 continue to hold over the next Five years, I think there's a 637 00:31:00,400 --> 00:31:02,100 chance. This one will continue to grow. 638 00:31:02,500 --> 00:31:05,700 And if anything actually moves in the positive for a change 639 00:31:05,700 --> 00:31:09,000 with the US and China and relationship, I think this one 640 00:31:09,000 --> 00:31:12,600 could see some upside so I'm not giving up on Ali Baba, as of 641 00:31:12,600 --> 00:31:14,800 now. Now moving on we even have 642 00:31:14,800 --> 00:31:17,900 Salesforce. This is a great company and I'm 643 00:31:17,900 --> 00:31:23,700 down 12% on it. $776 we have Adobe another highly profitable, 644 00:31:23,700 --> 00:31:25,300 free cash flow generative company. 645 00:31:25,300 --> 00:31:26,800 That doesn't dilute its shareholders. 646 00:31:26,800 --> 00:31:29,200 It buys back his shares and it's down nine. 647 00:31:29,300 --> 00:31:31,900 Point eight one percent. These two companies are down 648 00:31:31,900 --> 00:31:34,300 over 40% from their all-time highs. 649 00:31:34,400 --> 00:31:36,200 It's an incredible sell-off on what I think. 650 00:31:36,200 --> 00:31:38,300 Are two of the best assets in the market. 651 00:31:38,300 --> 00:31:41,400 We have apple, obviously, like the best company in the world. 652 00:31:41,400 --> 00:31:47,200 I'm up 23% on this, which is, you know, $897 and even this one 653 00:31:47,200 --> 00:31:50,500 has given up a lot of its gains as of recent the earnings report 654 00:31:50,500 --> 00:31:53,400 on Apple. I literally thought was as 655 00:31:53,400 --> 00:31:55,800 perfect as it gets. They beat on everything Top 656 00:31:55,800 --> 00:31:58,700 Line, bottom line, they impress on growth and press on Revenue. 657 00:31:59,400 --> 00:32:02,400 Because they gave a little bit of soft guidance for next 658 00:32:02,400 --> 00:32:05,400 quarter saying that they're going to have some, some issues 659 00:32:05,400 --> 00:32:08,900 with manufacturing similar to Amazon, they gave soft guidance 660 00:32:09,200 --> 00:32:11,800 and the stock still traded in the red. 661 00:32:11,800 --> 00:32:15,200 After hours, I could not believe that Apple gave the perfect 662 00:32:15,200 --> 00:32:17,800 report announced ninety billion dollars and share BuyBacks. 663 00:32:18,200 --> 00:32:19,500 A company. Still goes in the red. 664 00:32:19,700 --> 00:32:21,300 Now, after Apple, we have Spotify. 665 00:32:22,000 --> 00:32:25,900 This is one that the market has completely given up on down 65%. 666 00:32:26,200 --> 00:32:29,200 It's going to be trading at a one price to sales soon the 667 00:32:29,300 --> 00:32:32,900 Company is really difficult to hold, because they continue to 668 00:32:32,900 --> 00:32:36,000 do share dilution, do not posting real free cash flow. 669 00:32:36,600 --> 00:32:39,000 They need to find a way to become profitable and I think 670 00:32:39,000 --> 00:32:41,300 that's very difficult. So this one I'm not as 671 00:32:41,300 --> 00:32:44,400 optimistic on as is Amazon or Google or Microsoft. 672 00:32:44,400 --> 00:32:47,700 It's a much smaller position and I haven't continue to add to 673 00:32:47,700 --> 00:32:49,700 Spotify. I want to see if there's really 674 00:32:49,700 --> 00:32:52,400 positive developments before putting any more money into this 675 00:32:52,400 --> 00:32:54,800 position. Now, if we compare the S&P, 500 676 00:32:54,800 --> 00:32:59,000 to the story fund, which I've been doing for over a year now, 677 00:32:59,000 --> 00:33:02,400 and I'm A continue to do this all the way through 2025. 678 00:33:02,700 --> 00:33:07,000 The goal is to outperformed, the S&P 500 by the end of 2025. 679 00:33:07,000 --> 00:33:10,800 So, at the end of 20 25, I want to have this blue line, be above 680 00:33:10,800 --> 00:33:13,800 the red line. Now, it's gone through a journey 681 00:33:13,800 --> 00:33:15,000 here. We've gone through some High 682 00:33:15,000 --> 00:33:17,400 Times and through some low times right now. 683 00:33:17,400 --> 00:33:21,500 We're definitely through a lot of time the sell-off here or 684 00:33:21,500 --> 00:33:24,100 rather the dramatic drop in the story. 685 00:33:24,100 --> 00:33:27,100 Fun. Right here is actually not 686 00:33:27,100 --> 00:33:29,900 mostly due to Amazon. It's mostly due to To Netflix. 687 00:33:29,900 --> 00:33:33,700 So we have the Netflix drop right here and that continued to 688 00:33:33,708 --> 00:33:35,800 sell off. This is where the majority of 689 00:33:35,808 --> 00:33:38,500 this is and then Amazon took me down a little bit further, it 690 00:33:38,500 --> 00:33:40,800 was five thousand dollars which is roughly five percent. 691 00:33:41,000 --> 00:33:44,300 Now, the S&P 500 has actually gone down a bit, so it's down to 692 00:33:44,700 --> 00:33:47,700 six point nine percent. And the story fund now is down, 693 00:33:47,700 --> 00:33:50,100 - 21%. Now, most people look at this 694 00:33:50,100 --> 00:33:52,400 chart and probably think there's no way to come back from this. 695 00:33:52,400 --> 00:33:56,700 I'm down 26% from the S&P 500, right? 696 00:33:56,700 --> 00:34:01,000 That's an insurmountable lead. That the S&P 500 has over the 697 00:34:01,000 --> 00:34:04,100 next three or four years, I don't think that's the case at 698 00:34:04,100 --> 00:34:05,800 all. I look at the market right now 699 00:34:05,800 --> 00:34:09,199 and it's rewarding a lot of companies in the S&P 500 that I 700 00:34:09,199 --> 00:34:12,199 think are getting to the point of being highly overvalued. 701 00:34:12,400 --> 00:34:14,800 A lot of consumer, defensive companies are trading at higher 702 00:34:14,800 --> 00:34:17,800 valuations than tech companies, and I don't think that that's 703 00:34:17,800 --> 00:34:21,100 going to go on forever. Another thing that I look at is, 704 00:34:21,100 --> 00:34:23,600 although this fall looks really dramatic. 705 00:34:23,600 --> 00:34:26,600 It's a dramatic fall and performance here, if you go back 706 00:34:26,600 --> 00:34:30,100 to just right here, the performance was minus 10. 8% and 707 00:34:30,100 --> 00:34:32,699 within one month. In fact, two weeks later, I was 708 00:34:32,699 --> 00:34:36,500 at positive 3 percent. So I did a 10 percent gain in 709 00:34:36,500 --> 00:34:39,100 two weeks, we have other times in the portfolio. 710 00:34:39,100 --> 00:34:42,699 Like right here, I was at 4.5 high percent and I went up to 711 00:34:42,699 --> 00:34:47,600 24% in gains in a one month period, That's a 20% performance 712 00:34:47,600 --> 00:34:49,199 difference. In one month, if we look at 713 00:34:49,199 --> 00:34:52,199 another example right here, as that point 78 percent and 714 00:34:52,199 --> 00:34:54,900 performance. So not even 1% and I went all 715 00:34:54,900 --> 00:34:59,200 the way up to 27 percent within a 40 day period. 716 00:34:59,400 --> 00:35:02,800 So, a little bit over a month, we jumped up over 25 percent. 717 00:35:02,800 --> 00:35:05,500 So even though I'm trailing the S&P 500 right now, we've had 718 00:35:05,500 --> 00:35:08,600 this big drop, I've seen multiple times where things can 719 00:35:08,600 --> 00:35:10,600 change very quickly for the positive as well. 720 00:35:10,600 --> 00:35:13,300 And just to be clear, the company's I'm buying right now 721 00:35:13,400 --> 00:35:16,400 have no momentum. They all have negative momentum 722 00:35:16,400 --> 00:35:18,900 their trading down further, and further and further. 723 00:35:19,100 --> 00:35:22,100 And I'm never going to be able to time the negative momentum 724 00:35:22,100 --> 00:35:24,200 right at the bottom. This is not something that's 725 00:35:24,200 --> 00:35:26,600 going to happen. If you want quick immediate 726 00:35:26,600 --> 00:35:29,000 gains then you have to buy companies with positive 727 00:35:29,000 --> 00:35:29,600 momentum. Item. 728 00:35:29,800 --> 00:35:32,000 Go buy your oil trade. Go by Costco. 729 00:35:32,000 --> 00:35:34,400 Right now those companies have positive momentum. 730 00:35:34,400 --> 00:35:36,900 They've been moving upwards. They're the ones to get into 731 00:35:36,900 --> 00:35:38,700 right now but I'm not looking at. 732 00:35:38,700 --> 00:35:41,800 What's going to have the positive momentum to get a nice 733 00:35:41,800 --> 00:35:44,200 bump this month, what I'm looking for, a companies that 734 00:35:44,200 --> 00:35:47,100 are being sold off because of fear that I think will be worth 735 00:35:47,100 --> 00:35:49,800 more in the next five years and I really think the Amazons one 736 00:35:49,800 --> 00:35:51,300 of them. And on that note, I want to 737 00:35:51,300 --> 00:35:54,200 highlight a couple other things with my other portfolio. 738 00:35:54,200 --> 00:35:57,200 This is a dividend portfolio, but I want to highlight a couple 739 00:35:57,200 --> 00:36:01,400 companies that I bought that I I had a very similar experience 740 00:36:01,400 --> 00:36:05,800 with when I originally purchased Apple which has gone up 18 741 00:36:05,800 --> 00:36:08,400 thousand five hundred dollars in value, its outperformed, the S&P 742 00:36:08,400 --> 00:36:11,500 500 to a large extent. When I first purchased this 743 00:36:11,500 --> 00:36:14,300 company you can go back and look at the comments. 744 00:36:14,300 --> 00:36:17,100 I received a year ago go ahead and take a look at those 745 00:36:17,100 --> 00:36:18,900 comments. My first video when I said I was 746 00:36:18,900 --> 00:36:23,000 purchasing twenty thousand dollars of Apple - comment. 747 00:36:23,000 --> 00:36:25,900 After - Comet Joseph you don't know what you're doing. 748 00:36:25,900 --> 00:36:28,800 Invest in the S&P, 500 by the index. 749 00:36:29,200 --> 00:36:33,000 Apple's overvalued Buffett, bought it at a lower price on 750 00:36:33,000 --> 00:36:35,900 and on and on. And on the Comets were very, 751 00:36:35,900 --> 00:36:38,200 very intense. There's lots of people that were 752 00:36:38,200 --> 00:36:41,100 highly critical and many of those comets still exist today 753 00:36:41,300 --> 00:36:44,200 criticizing the Apple by. And I've noticed that similar 754 00:36:44,200 --> 00:36:48,600 Trend any time I do a by of a company, a big buy into it. 755 00:36:48,900 --> 00:36:52,300 If the stock doesn't immediately go up right afterwards, then it 756 00:36:52,300 --> 00:36:55,100 was a bad buy if it goes down in the next month because it has 757 00:36:55,100 --> 00:36:58,400 downward momentum, it was a bad buy and I'm not doing a good 758 00:36:58,400 --> 00:37:00,600 job, buying that. Benny, I've noticed that same 759 00:37:00,600 --> 00:37:03,100 thing over and over again. I've seen it with Costco with 760 00:37:03,100 --> 00:37:06,000 Disney, with Home, Depot with Nike with Target, even though 761 00:37:06,000 --> 00:37:09,400 most of the companies that I'm buying are doing very well 762 00:37:09,400 --> 00:37:12,500 actually, they're performing, well, Costco is one of them that 763 00:37:12,500 --> 00:37:15,200 I bought a year ago. And at the time I received so 764 00:37:15,200 --> 00:37:18,100 many comments that was overvalued the valuation was 765 00:37:18,100 --> 00:37:20,100 more for Costco than it was for Walmart. 766 00:37:20,100 --> 00:37:23,100 For example, what Costco is out performed, the other companies 767 00:37:23,100 --> 00:37:26,200 that people listed, and it's outperformed the S&P 500 over 768 00:37:26,200 --> 00:37:28,500 that time. And I think the best example of 769 00:37:28,500 --> 00:37:32,500 this The best example of receiving a lot of criticism, 770 00:37:32,800 --> 00:37:36,400 right after buying a big position in a new company was 771 00:37:36,400 --> 00:37:38,900 Vici. I was extremely excited about 772 00:37:38,900 --> 00:37:41,900 this company, I made in-depth research on it, I made multiple 773 00:37:42,200 --> 00:37:45,200 45 minute videos on it. I was even so excited about this 774 00:37:45,200 --> 00:37:47,300 company that I actually interviewed the CEO. 775 00:37:47,400 --> 00:37:48,700 That's how much I like this company. 776 00:37:49,000 --> 00:37:52,200 Big real estate company every single valuation metric of it. 777 00:37:52,200 --> 00:37:54,500 Led me to believe that was heavily undervalued. 778 00:37:54,700 --> 00:37:58,400 It was great unique properties, that are hard to replicate it. 779 00:37:58,400 --> 00:38:00,800 Paid a hefty. Dividend and I bought this 780 00:38:00,800 --> 00:38:04,500 company at around thirty dollars per share in the stock price 781 00:38:04,500 --> 00:38:09,300 just went down, went down to 29 when down to 28, when down to 27 782 00:38:09,600 --> 00:38:12,200 and it went down for a month after month after month. 783 00:38:12,200 --> 00:38:14,900 Right after I bought it the comments I received were Joseph 784 00:38:14,900 --> 00:38:16,900 put 30,000 dollars into this company. 785 00:38:16,900 --> 00:38:20,300 Now, he's in the red and I'm so glad I didn't follow Joseph into 786 00:38:20,300 --> 00:38:22,100 this by. He doesn't know what he's doing 787 00:38:22,200 --> 00:38:24,900 the whole stock market's up, and Joseph doesn't know what he's 788 00:38:24,900 --> 00:38:26,500 doing. In fact, let me go ahead and 789 00:38:26,500 --> 00:38:28,000 just highlight one of those comments. 790 00:38:28,100 --> 00:38:30,400 Let me go ahead and throw. One of the comments, this is 791 00:38:30,400 --> 00:38:32,900 from five months ago. Let me go ahead and put this one 792 00:38:32,900 --> 00:38:36,200 on the screen and again, you can look at any of the, the old 793 00:38:36,200 --> 00:38:38,600 videos on VG when I was first buying this company and see the 794 00:38:38,600 --> 00:38:41,900 criticism and the comet similar to this because this is not a 795 00:38:41,900 --> 00:38:44,700 unique. One Adele said Vici was a 796 00:38:44,700 --> 00:38:47,700 mistake, I'm glad I didn't get a board Joseph's hype train. 797 00:38:47,900 --> 00:38:49,300 He's been bending over backwards. 798 00:38:49,300 --> 00:38:51,800 For months, to try to justify his bullish stance on this 799 00:38:51,800 --> 00:38:54,200 company. The entire Market is up and be 800 00:38:54,200 --> 00:38:57,900 cheese down and it has six thumbs up, 10 replies, many 801 00:38:57,900 --> 00:39:00,500 people saying the same thing. So glad I didn't follow him into 802 00:39:00,500 --> 00:39:03,000 it, you know, he's your whatever, he should have just 803 00:39:03,000 --> 00:39:05,400 bought the S&P 500, those type of comments. 804 00:39:05,500 --> 00:39:09,000 Well since my purchase in Vici and since that comment was left 805 00:39:09,000 --> 00:39:12,800 VG, has closed their acquisition deal with MGP, investors have 806 00:39:12,800 --> 00:39:14,400 become more bullish on the company. 807 00:39:14,600 --> 00:39:16,800 Exactly. Like I anticipated they would 808 00:39:16,800 --> 00:39:20,400 with this type of catalyst going forward, the company's it's now 809 00:39:20,400 --> 00:39:21,800 in the green. It's outperformed. 810 00:39:21,800 --> 00:39:25,500 The S&P 500 is outperformed the QQQ by a large extent and all 811 00:39:25,500 --> 00:39:29,000 this is taken is for me to wait longer than a couple months. 812 00:39:29,200 --> 00:39:31,700 Just to wait a little bit to give it time for the company to 813 00:39:31,700 --> 00:39:34,400 actually do its thing and for the story to play out. 814 00:39:34,400 --> 00:39:37,300 So I sure it's you the example of Vici as well as other 815 00:39:37,300 --> 00:39:40,500 examples, just to highlight that this is not anything new to me. 816 00:39:40,700 --> 00:39:43,900 Anytime I buy a company right away, all receive a lot of 817 00:39:43,900 --> 00:39:47,300 people criticizing the purchase for XYZ reason. 818 00:39:47,300 --> 00:39:50,700 Either will be overvalued like my purchase of a Costco and 819 00:39:50,700 --> 00:39:54,000 apple which have both been Market beating returns or the 820 00:39:54,000 --> 00:39:56,900 company is just a bad company. Now, it's change gears, like my 821 00:39:56,900 --> 00:39:59,100 purchase a Starbucks, it's gone down a little bit. 822 00:39:59,500 --> 00:40:02,300 I'm the criticism is, especially intense. 823 00:40:02,600 --> 00:40:07,100 If when I buy the company, it falls in price upon buying it. 824 00:40:07,100 --> 00:40:08,500 Right. It continues to go on a downward 825 00:40:08,500 --> 00:40:11,800 Trend because I didn't time the bottom with my purchase. 826 00:40:12,000 --> 00:40:15,800 I'll receive a lot of criticism and with the purchase of Amazon 827 00:40:15,800 --> 00:40:18,300 and this last quarter, you're going to see the exact same 828 00:40:18,300 --> 00:40:21,000 thing. The truth is that most investors 829 00:40:21,000 --> 00:40:23,900 are very short-term focused whether they like to admit it or 830 00:40:23,900 --> 00:40:27,100 not the price of the company dictates their sentiment. 831 00:40:27,200 --> 00:40:30,100 Because Amazon went down in price I think the company is 832 00:40:30,100 --> 00:40:33,700 bad, if they didn't have the price change in the mix, they 833 00:40:33,700 --> 00:40:35,500 probably look at these results and think that they're pretty 834 00:40:35,500 --> 00:40:39,400 decent, but because the price went down, the company must be 835 00:40:39,400 --> 00:40:42,300 doing poorly. This is the exact same attitude. 836 00:40:42,300 --> 00:40:45,800 I saw with my VG purchase, I purchased Vici for an 837 00:40:45,800 --> 00:40:48,400 undervalued price at $30, a share. 838 00:40:48,900 --> 00:40:53,800 And the stock went down to 29 to 28 and 27 because the stock 839 00:40:53,800 --> 00:40:57,200 price went down with literally. No, fundamental changes. 840 00:40:57,200 --> 00:40:58,900 People became bearish on the company. 841 00:40:59,200 --> 00:41:02,000 Sentiment move lower and that caused a lot of people to leave 842 00:41:02,000 --> 00:41:04,100 these comments. That Vici was a terrible 843 00:41:04,100 --> 00:41:06,700 purchase which now it's outperformed, the S&P 500, and 844 00:41:06,700 --> 00:41:10,900 the qqq's since purchasing it. So when I look at Amazon, I know 845 00:41:10,900 --> 00:41:13,100 I'll receive the same things. A stock has moved down since 846 00:41:13,100 --> 00:41:15,200 purchasing it, my average cost basis. 847 00:41:15,200 --> 00:41:19,300 Right now is 3000 a share, but I still remain just as bullish as 848 00:41:19,300 --> 00:41:21,500 I used to be. This hasn't changed my opinion 849 00:41:21,700 --> 00:41:23,900 or my thesis on the company at all. 850 00:41:24,100 --> 00:41:26,500 I still think it's worth forty eight hundred dollars a share. 851 00:41:26,500 --> 00:41:28,200 So that's how I view this. I think the fundamental 852 00:41:28,200 --> 00:41:30,600 developments of Pretty positive overall. 853 00:41:30,900 --> 00:41:34,000 And I still believe, I still believe that over the next five 854 00:41:34,000 --> 00:41:38,600 years by the end of 2025, I think Amazon will outperformed 855 00:41:38,600 --> 00:41:41,200 the S&P 500. Those are my thoughts, there's 856 00:41:41,200 --> 00:41:43,500 no guarantee things could go wrong with it. 857 00:41:43,500 --> 00:41:46,300 But even now, after looking, at this most recent report, I still 858 00:41:46,300 --> 00:41:48,700 believe that now having said that I have no clue of where 859 00:41:48,700 --> 00:41:50,300 it's going to trade in the next three months. 860 00:41:50,300 --> 00:41:53,100 So as I'm giving these week-by-week, portfolio updates, 861 00:41:53,100 --> 00:41:54,900 I don't know where Amazon's going to be next week. 862 00:41:55,200 --> 00:41:56,900 It'll probably have more negative momentum. 863 00:41:56,900 --> 00:41:58,300 Maybe trade down a little bit further. 864 00:41:58,400 --> 00:42:00,700 I don't know. I'm not a short-term Trader, I'm 865 00:42:00,707 --> 00:42:03,200 not looking at technicals, I'm looking at fundamental 866 00:42:03,200 --> 00:42:05,600 valuation. And even though I have a strong 867 00:42:05,600 --> 00:42:08,600 belief will be worth a lot more in five years have no clue, it's 868 00:42:08,600 --> 00:42:09,600 going to be in the next three months. 869 00:42:09,600 --> 00:42:12,900 So that's my thoughts on this earnings report doesn't change. 870 00:42:12,900 --> 00:42:15,700 My thoughts at all the price. Moving down doesn't change my 871 00:42:15,700 --> 00:42:17,900 sentiment to the - a doll in the company. 872 00:42:18,700 --> 00:42:21,700 I still remain bullish on it, but that's all for now. 873 00:42:21,700 --> 00:42:24,000 I hope you enjoyed the little update and I'll see you in the 874 00:42:24,008 --> 00:42:24,500 next one.