1 00:00:00,080 --> 00:00:02,400 Welcome everyone. Thanks for joining on today's 2 00:00:02,400 --> 00:00:03,960 episode. We're going to be talking about, 3 00:00:04,280 --> 00:00:07,040 of course the current sell off that's happening. 4 00:00:07,040 --> 00:00:08,280 We have a little bit of a sell off. 5 00:00:08,280 --> 00:00:11,880 We have the Dow Jones down 1.56% for today. 6 00:00:12,160 --> 00:00:16,600 We have the S&P 500 down 1.7% and we have the NASDAQ down 7 00:00:16,600 --> 00:00:20,520 2.14%. So all three major indexes are 8 00:00:20,520 --> 00:00:23,640 heavily in the red today. And this is more than just a 9 00:00:23,640 --> 00:00:26,160 September sell off. There's an actual catalyst, 10 00:00:26,160 --> 00:00:29,660 There's an actual reason why the markets are concerned today and 11 00:00:29,660 --> 00:00:33,980 that is of course the Ever grand company in China, Ever Grand is 12 00:00:33,980 --> 00:00:37,300 this massive real estate developer and housing developer 13 00:00:37,300 --> 00:00:40,300 in China and it can't pay back its debts. 14 00:00:40,460 --> 00:00:42,580 And we know what that's like. We know what that's like in the 15 00:00:42,580 --> 00:00:45,740 US when we have a big company that has a lot of debt, heavily 16 00:00:45,740 --> 00:00:48,780 leveraged, that develops homes that can't repay its debt. 17 00:00:49,180 --> 00:00:52,340 So this whole situation in China right now with this massive real 18 00:00:52,340 --> 00:00:55,180 estate developer called Ever Grand not being able to repay 19 00:00:55,180 --> 00:00:58,540 their debts is a little reminiscent of the 2008 20 00:00:58,540 --> 00:01:01,060 financial crisis. What I want to do in today's 21 00:01:01,060 --> 00:01:04,500 video is not only do I want to look at My Portfolio, I'll show 22 00:01:04,500 --> 00:01:07,060 you what My Portfolio is doing today, what companies are 23 00:01:07,060 --> 00:01:08,660 holding up and which ones are selling off. 24 00:01:08,980 --> 00:01:12,460 But I also want to look at this ever grand situation and just 25 00:01:12,460 --> 00:01:15,580 look over what's going on and see if it's comparable to what 26 00:01:15,580 --> 00:01:19,190 happened in the US and see if this really poses A systemic 27 00:01:19,190 --> 00:01:21,070 risk and something that we should actually be very 28 00:01:21,070 --> 00:01:22,670 concerned about. So we'll be looking over this 29 00:01:22,670 --> 00:01:24,990 situation as well. And then also on this episode I 30 00:01:24,990 --> 00:01:28,390 want to do a reaction to Ellen Powell's oped in the New York 31 00:01:28,390 --> 00:01:31,190 Times regarding the Elizabeth Holmes trial. 32 00:01:31,430 --> 00:01:35,470 She said it is a wake up call for sexism in tech and she's 33 00:01:35,470 --> 00:01:39,350 saying that part of the reason why Elizabeth Holmes is being 34 00:01:39,350 --> 00:01:42,630 charged with these crimes and other men that have done similar 35 00:01:42,630 --> 00:01:44,950 things aren't is because of sexism. 36 00:01:45,540 --> 00:01:48,420 So as someone who has worked in tech for most of my adult life 37 00:01:48,740 --> 00:01:51,140 as well as someone who has studied this case extensively, 38 00:01:51,420 --> 00:01:54,260 I'd like to give my reaction to Ellen Powell's claim that 39 00:01:54,260 --> 00:01:56,620 Elizabeth Holmes is the victim of sexism. 40 00:01:56,740 --> 00:01:59,380 So we have a lot to jump into in this episode, a lot to cover. 41 00:01:59,780 --> 00:02:02,900 As always, if you enjoy this type of content, you can get 42 00:02:02,900 --> 00:02:06,340 bonus episodes, exclusive content, question and answer 43 00:02:06,340 --> 00:02:10,020 segments, as well as access to a very active Discord community 44 00:02:10,020 --> 00:02:13,660 with well over 1500 members by joining the Patreon using the 45 00:02:13,660 --> 00:02:16,920 link below, it's patreon.com/joseph Carlson. 46 00:02:17,000 --> 00:02:18,800 You can give that a try for free. 47 00:02:19,040 --> 00:02:21,200 The best part is, there's no risk to this. 48 00:02:21,240 --> 00:02:23,440 You get a free trial. If you join today, you'll have 49 00:02:23,440 --> 00:02:26,240 10 days before your first charge so you can put in your 50 00:02:26,240 --> 00:02:28,840 information. Join today, try out the Discord 51 00:02:28,840 --> 00:02:32,080 community, watch some of the exclusive content before ever 52 00:02:32,080 --> 00:02:33,840 paying a dime. And of course, you're not locked 53 00:02:33,840 --> 00:02:37,000 into anything you can cancel any day of the week, so I recommend 54 00:02:37,000 --> 00:02:39,160 giving it a try. It's literally risk free. 55 00:02:39,360 --> 00:02:43,500 You go to patreon.com/joseph Carlson, fill out an account and 56 00:02:43,500 --> 00:02:45,620 you get access to all that exclusive content and the 57 00:02:45,620 --> 00:02:47,540 Discord community. And another thing I'll mention 58 00:02:47,540 --> 00:02:50,460 about the Patreon real quick, when you join the Patreon, you 59 00:02:50,460 --> 00:02:54,300 also get access to qualtrum.com, which is my dividend tracking 60 00:02:54,300 --> 00:02:57,380 software that we built from the ground up and the accompanying 61 00:02:57,380 --> 00:03:00,660 apps on the iOS store and soon to be Android store. 62 00:03:00,660 --> 00:03:03,260 That one's coming out very soon. Something to consider there as 63 00:03:03,260 --> 00:03:04,620 well. If you're looking for a good 64 00:03:04,860 --> 00:03:07,570 dividend tracking app, I think that we're building out the best 65 00:03:07,570 --> 00:03:09,730 one in the market. Now let's go ahead and jump 66 00:03:09,730 --> 00:03:12,610 right into My Portfolio. This is what it looks like on 67 00:03:12,610 --> 00:03:15,410 the all time view. I'm up $56,000. 68 00:03:15,690 --> 00:03:18,290 At one point I was up around $70,000. 69 00:03:18,290 --> 00:03:20,290 So we've definitely had a big pullback. 70 00:03:20,650 --> 00:03:23,410 A lot of my main companies have pulled back as well as the 71 00:03:23,410 --> 00:03:26,610 market over the past two weeks has been on a big downtrend. 72 00:03:27,050 --> 00:03:31,490 Now if we just look at today, if we zoom in and ignore the all 73 00:03:31,490 --> 00:03:34,800 time view and I click on the one day view, this is what it looks 74 00:03:34,800 --> 00:03:36,040 like. It's not pretty. 75 00:03:36,200 --> 00:03:40,560 I'm down 4000 dollars, 1.31%. This isn't the worst. 76 00:03:40,560 --> 00:03:43,440 There's a lot of tech portfolios that are down a lot more today. 77 00:03:43,440 --> 00:03:47,960 For instance, the ARC innovation ETF is down 3.79% today. 78 00:03:48,320 --> 00:03:50,680 So there's things that are struggling a little bit more, 79 00:03:51,080 --> 00:03:53,480 but My Portfolio is down quite a bit nonetheless. 80 00:03:53,720 --> 00:03:56,560 If I look at the actual companies that are down a lot, I 81 00:03:56,560 --> 00:03:58,800 can go into the tech and cloud computing category. 82 00:03:58,840 --> 00:04:01,680 This one's down more than the rest of My Portfolio. 83 00:04:01,920 --> 00:04:04,520 The only other category that's down as much is the Fintech and 84 00:04:04,520 --> 00:04:06,040 banking. So if I go to tech and cloud 85 00:04:06,040 --> 00:04:10,480 computing, we have Apple down 2.29%, that's $1000. 86 00:04:10,600 --> 00:04:14,640 We have Microsoft down 1.63%. That's $300.00 for me. 87 00:04:14,990 --> 00:04:18,550 And then we have the I GV, which is the tech expanded software 88 00:04:18,550 --> 00:04:20,790 ETF. So lots of red across the board 89 00:04:20,790 --> 00:04:22,910 in the tech sector. Then we can go to the consumer 90 00:04:22,910 --> 00:04:25,950 category. We have Disney down 2.33%. 91 00:04:25,950 --> 00:04:28,550 That's not surprising. What is surprising is when 92 00:04:28,550 --> 00:04:31,910 Costco goes down in price, you know when Costco goes down in 93 00:04:31,910 --> 00:04:35,630 price at all or Home Depot that things are bad. 94 00:04:35,910 --> 00:04:38,910 These companies typically go in One Direction and that's up. 95 00:04:39,150 --> 00:04:42,750 Costco continues to go up, Home Depot continues to go up and it 96 00:04:42,750 --> 00:04:47,160 takes a lot to pry these shares out of investors hands. 97 00:04:47,440 --> 00:04:49,160 They don't want to sell these shares. 98 00:04:49,480 --> 00:04:52,320 Some people are selling out of Costco or Home Depot. 99 00:04:52,640 --> 00:04:54,960 I think it's typically the result of people just selling 100 00:04:54,960 --> 00:04:58,960 out of ETF's that happen to hold these companies because I rarely 101 00:04:58,960 --> 00:05:02,240 see individual investors selling their shares of Costco and Home 102 00:05:02,240 --> 00:05:06,840 Depot and I would love for Costco to go down 10%. 103 00:05:07,200 --> 00:05:10,960 That would be a very fortunate event because I've been looking 104 00:05:10,960 --> 00:05:13,790 to buy more and more of this company, but it rarely goes on 105 00:05:13,790 --> 00:05:15,990 sale. So I might take any little dip 106 00:05:15,990 --> 00:05:19,110 that I get with Costco as an opportunity to buy more of this 107 00:05:19,110 --> 00:05:21,270 company. Now regardless, we look outside 108 00:05:21,270 --> 00:05:24,070 of Costco and Home Depot. We have Nike down 1%. 109 00:05:24,110 --> 00:05:27,190 We have Comcast down 1%, Target down 1%. 110 00:05:27,550 --> 00:05:30,430 Disney is the biggest loser today, down 2.3%. 111 00:05:30,470 --> 00:05:33,030 We have the real estate category that doesn't seem to be having a 112 00:05:33,030 --> 00:05:34,430 sell off. Let's take a look at it. 113 00:05:34,510 --> 00:05:37,710 The malls are down a little bit. Sign, the property is down 1.3%, 114 00:05:38,160 --> 00:05:41,720 but then we have Vici and MGM growth properties which is being 115 00:05:41,720 --> 00:05:45,560 purchased by Vici in the green today, which is very interesting 116 00:05:45,560 --> 00:05:49,560 to see as well as Realty income Corp in the green and store 117 00:05:49,560 --> 00:05:51,480 capital just teetering in the red. 118 00:05:51,480 --> 00:05:54,920 So overall real estate is doing OK today. 119 00:05:55,040 --> 00:05:56,720 We can take a look at my income funds. 120 00:05:56,720 --> 00:05:59,840 Jeppy's down 1% today, that's a little bit less than the S&P 121 00:05:59,840 --> 00:06:03,960 500, so it is becoming less volatile than the S&P 500. 122 00:06:04,280 --> 00:06:08,340 And then we have the Schwab US dividend, equity ETFSCHD that's 123 00:06:08,340 --> 00:06:10,940 down 1.2%. So these are both down a decent 124 00:06:10,940 --> 00:06:14,140 amount but nothing extreme. And then we have the Fintech and 125 00:06:14,140 --> 00:06:19,260 banking category, JP Morgan's down 2.86%, that's a lot for one 126 00:06:19,260 --> 00:06:24,620 day, almost down 3% and then T Rowe Price is down 3.52% that's 127 00:06:24,620 --> 00:06:26,700 also a lot for a one day sell off. 128 00:06:27,020 --> 00:06:29,060 In fact, T Rowe Price really got hit today. 129 00:06:29,140 --> 00:06:32,320 Now T Rowe is a smaller holding for me, I've held this for a 130 00:06:32,320 --> 00:06:34,840 very long time. I'm heavily in the green on it 131 00:06:34,840 --> 00:06:38,720 overall, so 3.52% doesn't make too much of a difference. 132 00:06:38,960 --> 00:06:42,440 That's only $76.00. But with JP Morgan this hurts a 133 00:06:42,440 --> 00:06:45,560 little. Going down $750, that's a bit of 134 00:06:45,560 --> 00:06:47,280 a hit. And one thing that I said 135 00:06:47,280 --> 00:06:50,640 continually with JP Morgan, I said in video after video 136 00:06:50,640 --> 00:06:53,560 recently that I don't consider JP Morgan to buy. 137 00:06:53,880 --> 00:06:57,560 I think it ran up so much and was at lofty valuations for the 138 00:06:57,560 --> 00:06:59,480 company. It's trading higher than it's 139 00:06:59,520 --> 00:07:01,880 ever traded before. When I bought JP Morgan, I 140 00:07:01,880 --> 00:07:04,640 bought it down in this area in the 90s in the one hundreds. 141 00:07:04,640 --> 00:07:06,880 And then I even bought a little bit more right here in like the 142 00:07:06,880 --> 00:07:09,600 one 20s. But I wasn't buying it up here. 143 00:07:09,880 --> 00:07:12,960 And I continue to think that JP Morgan isn't a special deal 144 00:07:12,960 --> 00:07:14,880 right now. In fact, I think it does have 145 00:07:14,880 --> 00:07:18,560 some downside pressure because it's ran up so much and it's a 146 00:07:18,560 --> 00:07:20,520 bank. And anytime people become 147 00:07:20,520 --> 00:07:23,480 worried about anything with the economy, banks seem to be the 148 00:07:23,480 --> 00:07:26,320 first thing to sell off. So I haven't added to JP Morgan 149 00:07:26,320 --> 00:07:28,960 anytime recently. If I was to do anything right 150 00:07:28,960 --> 00:07:32,240 now between buy and sell, I would be taking some gains with 151 00:07:32,240 --> 00:07:34,640 JPMorgan and selling a little bit before buying it. 152 00:07:34,720 --> 00:07:37,040 Now moving on, we can go to the healthcare category. 153 00:07:37,200 --> 00:07:41,280 Abby's down .56% and Johnson and Johnson is completely flat 154 00:07:41,280 --> 00:07:43,120 today. So it's really not moving a 155 00:07:43,120 --> 00:07:44,800 whole lot because of any of this news. 156 00:07:44,880 --> 00:07:47,800 Now the renewable and energy categories actually in the Green 157 00:07:47,920 --> 00:07:53,200 Dominion energy is up 1.58% and next era energy is up .6%. 158 00:07:53,480 --> 00:07:56,240 These are both smaller holdings, but it's interesting to see that 159 00:07:56,690 --> 00:07:59,330 when there's trouble in the world and people are looking for 160 00:07:59,330 --> 00:08:03,090 safety, they will start to shift money into these utility 161 00:08:03,090 --> 00:08:05,250 companies. They consider them a safe haven 162 00:08:05,250 --> 00:08:07,250 against trouble. And then we have the restaurant 163 00:08:07,250 --> 00:08:10,090 and delivery category, which is just one company. 164 00:08:10,330 --> 00:08:13,090 It's Texas Roadhouse, that's down 1% today. 165 00:08:13,530 --> 00:08:15,330 I'm still very bullish on Texas Roadhouse. 166 00:08:15,330 --> 00:08:17,730 I think this is a fantastic company, growing revenues 167 00:08:17,730 --> 00:08:21,160 quickly, growing EBITDA quickly. It's buying back shares. 168 00:08:21,160 --> 00:08:23,880 It has no debt. I just think overall everything 169 00:08:23,880 --> 00:08:26,480 with the balance sheet and the growth prospects of this company 170 00:08:26,800 --> 00:08:28,800 is very good. So I remain bullish on this one. 171 00:08:28,880 --> 00:08:31,440 So this is how the portfolio looks overall today. 172 00:08:31,680 --> 00:08:34,320 Lots of red. It's pretty ugly, but as bad as 173 00:08:34,320 --> 00:08:37,240 this is, again, this is nowhere near as bad as a lot of tech 174 00:08:37,240 --> 00:08:39,360 focus portfolios. Those are the ones that are 175 00:08:39,360 --> 00:08:41,760 really getting hit today. Overall, I'm still in the green 176 00:08:41,760 --> 00:08:46,720 by $56,000, but keep in mind we could go back in the red if the 177 00:08:46,720 --> 00:08:51,470 market decided to go down another 15, twenty 30%, all of 178 00:08:51,470 --> 00:08:54,310 these gains would quickly vanish and we'd be back in the red. 179 00:08:54,710 --> 00:08:57,070 And that would be when I would try to buy as many great 180 00:08:57,070 --> 00:09:00,390 opportunities as possible. So I'm not in a situation where 181 00:09:00,390 --> 00:09:03,510 I'm necessarily concerned. If my gains go away and I go 182 00:09:03,510 --> 00:09:06,470 back in the red, I want to accumulate as much ownership of 183 00:09:06,470 --> 00:09:09,630 the best companies as possible and when prices go down, that's 184 00:09:09,630 --> 00:09:12,150 an opportunity to do that. So when I have days like today, 185 00:09:12,390 --> 00:09:13,790 it's not really A cause for concern. 186 00:09:13,790 --> 00:09:16,590 Now, if we go over all the various reasons that investors 187 00:09:16,590 --> 00:09:19,430 could be selling out of their shares today, we have a lot of 188 00:09:19,430 --> 00:09:22,870 different things to choose from. Investors fear a contagion 189 00:09:22,910 --> 00:09:25,910 sweeping financial markets from the troubled China property 190 00:09:25,910 --> 00:09:27,430 market. We're going to be talking about 191 00:09:27,430 --> 00:09:29,710 that more a little bit later. We also have the Fed beginning 192 00:09:29,710 --> 00:09:33,110 their two day meeting Tuesday and investors are worried that 193 00:09:33,110 --> 00:09:36,270 the central banks will signal that it's ready to start pulling 194 00:09:36,270 --> 00:09:39,990 away monetary stimulus amid surging inflation and 195 00:09:39,990 --> 00:09:43,070 improvement in the job market. So investors are concerned that 196 00:09:43,070 --> 00:09:44,910 the feds going to stop propping up the market. 197 00:09:45,380 --> 00:09:48,660 COVID cases, because of the delta variant remain at January 198 00:09:48,660 --> 00:09:51,740 levels as colder weather approaches in North America. 199 00:09:51,900 --> 00:09:54,860 And then also September is just not a good month for investing. 200 00:09:55,180 --> 00:09:59,780 The average return in September for the stock market is .4% 201 00:09:59,780 --> 00:10:01,860 decline. Investors are also concerned 202 00:10:01,860 --> 00:10:05,140 about brinksmanship in DC Congress returned to Washington 203 00:10:05,140 --> 00:10:08,460 from recess, rushing to pass funding bills to avoid a 204 00:10:08,460 --> 00:10:11,220 government shutdown. So we also have some political 205 00:10:11,220 --> 00:10:14,090 stuff going on in the background as well that may concern some 206 00:10:14,090 --> 00:10:16,210 investors. Now to this big list of things 207 00:10:16,210 --> 00:10:18,410 to worry about. I think the ones that investors 208 00:10:18,410 --> 00:10:21,930 are the most concerned about right now is the China ever 209 00:10:21,930 --> 00:10:25,170 grand situation. It's this large construction 210 00:10:25,170 --> 00:10:28,290 development company that took on an enormous amount of debt and 211 00:10:28,290 --> 00:10:30,770 now it's running into a lot of problems paying back its debt 212 00:10:31,130 --> 00:10:33,410 and now they're believing the company is going to go 213 00:10:33,410 --> 00:10:35,370 completely bankrupt. Now they describe what this 214 00:10:35,370 --> 00:10:37,570 company actually is. They say in a risky race against 215 00:10:37,570 --> 00:10:41,130 time that ran for two decades, China Ever Grand Group turned 216 00:10:41,130 --> 00:10:44,470 billions of dollars in borrowed money into the dream of home 217 00:10:44,470 --> 00:10:46,710 ownership for millions of Chinese citizens. 218 00:10:47,070 --> 00:10:50,150 It launched project after project in every Chinese 219 00:10:50,150 --> 00:10:53,270 provenance, selling apartments years before they were completed 220 00:10:53,550 --> 00:10:56,590 and scratching together enough cash to stay just ahead of the 221 00:10:56,590 --> 00:10:59,390 massive interest bills. That is not a business strategy 222 00:10:59,390 --> 00:11:02,910 that I like selling apartments years before they were completed 223 00:11:03,110 --> 00:11:06,030 and then scratching together enough cash to stay just ahead 224 00:11:06,030 --> 00:11:09,790 of massive interest bills? That sounds incredibly risky. 225 00:11:10,130 --> 00:11:12,770 This is the opposite of the type of company that you would want 226 00:11:12,770 --> 00:11:14,730 to own. Well, the party has now ended. 227 00:11:14,970 --> 00:11:17,570 Years of aggressive borrowing have collided with Beijing's 228 00:11:17,570 --> 00:11:20,610 crackdown on debt, leaving the giant developer on the brink of 229 00:11:20,610 --> 00:11:22,610 collapse. Construction and ever grants 230 00:11:22,610 --> 00:11:24,410 projects in many cities has stopped. 231 00:11:24,690 --> 00:11:27,370 The company has faced A litany of complaints and protests from 232 00:11:27,370 --> 00:11:31,090 suppliers, small investors, home buyers who sink their savings 233 00:11:31,090 --> 00:11:33,730 into properties the company promised to deliver. 234 00:11:34,220 --> 00:11:37,060 So people actually bought these properties and now nothing's 235 00:11:37,060 --> 00:11:39,620 being built. Now this story gets so sad, it's 236 00:11:39,620 --> 00:11:42,980 almost comical, the efforts they're going to, to try to 237 00:11:42,980 --> 00:11:46,820 repay this massive debt. They say cash is so short that 238 00:11:46,820 --> 00:11:49,220 this summer the developer said it begin paying bills to 239 00:11:49,220 --> 00:11:53,540 contractors and suppliers with unfinished apartments instead of 240 00:11:53,540 --> 00:11:55,980 actual money. So they have no money to pay 241 00:11:55,980 --> 00:11:58,660 these bills and they're saying, hey, do you want to take a half 242 00:11:58,660 --> 00:12:01,490 finished apartment as payment, right? 243 00:12:01,490 --> 00:12:03,210 That's got to be worth something, this half finished 244 00:12:03,210 --> 00:12:04,890 apartment. Now, they also mentioned that 245 00:12:04,890 --> 00:12:07,010 things like the free meals that they used to provide their 246 00:12:07,010 --> 00:12:09,930 staffers are no longer a thing. They're saying that they're 247 00:12:09,930 --> 00:12:12,850 laying off a lot of people and the situation is unfolding in a 248 00:12:12,850 --> 00:12:14,770 really bad way. Now, the biggest problem with 249 00:12:14,770 --> 00:12:16,650 the story is just the scale of it. 250 00:12:16,890 --> 00:12:19,370 This company was a massive company in China. 251 00:12:19,690 --> 00:12:22,130 The amount of debt they had, the amount of debt that they took 252 00:12:22,130 --> 00:12:27,810 out was $109.56 billion and that doesn't account for the promises 253 00:12:27,810 --> 00:12:30,490 that they made. That was well in excess of $200 254 00:12:30,490 --> 00:12:32,690 billion. So they have people that have 255 00:12:32,690 --> 00:12:36,370 paid for $200 billion worth of construction that they now can't 256 00:12:36,370 --> 00:12:38,250 deliver. And part of what led to this 257 00:12:38,250 --> 00:12:41,490 massive problem is the inefficiency of ever grants 258 00:12:41,490 --> 00:12:43,650 business model. You can compare their growing 259 00:12:43,650 --> 00:12:45,450 revenue to their growing net income. 260 00:12:45,730 --> 00:12:48,810 Although the revenue went up multiples of where it was a few 261 00:12:48,810 --> 00:12:51,130 years ago, the net income didn't follow. 262 00:12:51,250 --> 00:12:54,090 It was mostly flat and it went up only slightly. 263 00:12:54,440 --> 00:12:56,720 So this company was taking in a lot more money, but they weren't 264 00:12:56,720 --> 00:12:58,560 profitable. And now, of course, because this 265 00:12:58,560 --> 00:13:01,600 company's collapsing and they can't pay their debts, the stock 266 00:13:01,600 --> 00:13:04,160 is down around 80% from its highs. 267 00:13:04,200 --> 00:13:08,040 It used to be worth over $125 billion and now it's well below 268 00:13:08,040 --> 00:13:10,360 25 billion. Now of course, with the collapse 269 00:13:10,360 --> 00:13:13,640 being a big company with a lot of debt that might pose systemic 270 00:13:13,640 --> 00:13:16,360 risk to the Chinese market, there's a lot of people making 271 00:13:16,360 --> 00:13:20,200 the comparison to the 2008 financial crisis in the US. 272 00:13:20,520 --> 00:13:23,750 Whether this will shake out similar to that is unknown. 273 00:13:23,790 --> 00:13:25,910 Nobody can give you a firm answer on that and what the 274 00:13:25,910 --> 00:13:28,670 Chinese government will do. But what I take away from this 275 00:13:28,670 --> 00:13:31,310 is to always look at the balance sheet of companies that you're 276 00:13:31,310 --> 00:13:34,550 investing in and consider the amount of debt they have. 277 00:13:34,870 --> 00:13:38,030 Every time there's some huge collapse and huge problem with 278 00:13:38,030 --> 00:13:42,350 the company, it's almost always accompanied by excessive debt. 279 00:13:42,510 --> 00:13:45,550 Debt is almost always the primary culprit in every single 280 00:13:45,550 --> 00:13:48,350 financial collapse. Every time this happens, it has 281 00:13:48,350 --> 00:13:50,790 to do with excessive debt. So now every company that I 282 00:13:50,790 --> 00:13:54,300 invest in, I heavily prefer that they have more cash than debt 283 00:13:54,500 --> 00:13:56,660 and if they do have debt that it's not used in excess. 284 00:13:56,780 --> 00:13:59,540 Now moving on, I want to jump into this oped from Ellen 285 00:13:59,540 --> 00:14:01,460 Powell. She writes that the Elizabeth 286 00:14:01,460 --> 00:14:04,660 Holmes trial is a wake up call for sexism in tech. 287 00:14:04,860 --> 00:14:07,900 Now we're going to look at the specific case in the allegations 288 00:14:07,900 --> 00:14:10,540 that Ellen Powell makes and how she connects it to sexism. 289 00:14:10,780 --> 00:14:13,460 Before we jump into this, I just want to mention that I think if 290 00:14:13,460 --> 00:14:17,500 you're just making a general commentary that sexism exists in 291 00:14:17,500 --> 00:14:19,930 tech in general, I would agree with that. 292 00:14:19,930 --> 00:14:22,290 I think there's still a level of sexism that exists. 293 00:14:22,570 --> 00:14:25,130 But what I want to look at is specifically this case if 294 00:14:25,130 --> 00:14:27,930 Elizabeth Holmes in particular is the victim of sexism. 295 00:14:28,050 --> 00:14:30,970 Now this oped starts out with Ellen Powell doing a little 296 00:14:30,970 --> 00:14:34,370 background saying that Theron else was founded in 2003 and 297 00:14:34,370 --> 00:14:37,330 that there's a lot of hyperbole and and different talk about the 298 00:14:37,330 --> 00:14:40,010 grand future. And Elizabeth Holmes raised a 299 00:14:40,010 --> 00:14:43,890 lot of money, $400 million in financing and Theron else was 300 00:14:43,890 --> 00:14:46,890 valued at one point in time at $9 billion. 301 00:14:47,370 --> 00:14:50,530 And then she gets to the main issue here, she says. 302 00:14:50,810 --> 00:14:53,970 But after it was revealed that Theronos was not transparent 303 00:14:54,130 --> 00:14:56,890 when it's blood testing equipment failed, it became 304 00:14:56,890 --> 00:14:59,290 clear that the company would be the exception. 305 00:14:59,290 --> 00:15:02,890 That proves the rule that tech chief executives rarely face the 306 00:15:02,890 --> 00:15:05,730 full consequences of the harm they cause. 307 00:15:05,930 --> 00:15:08,570 Yet Miss Holmes is also exceptional for the basic fact 308 00:15:08,690 --> 00:15:11,050 that she is a woman. Time and again we see that the 309 00:15:11,050 --> 00:15:14,530 boys club that is the tech industry supports and protects 310 00:15:14,530 --> 00:15:18,790 its own, even when the costs are huge and when the doors crack 311 00:15:18,830 --> 00:15:22,630 open ever so slightly to let a woman in, the same rules don't 312 00:15:22,630 --> 00:15:25,670 apply. Indeed, as Miss Holmes trial for 313 00:15:25,670 --> 00:15:29,350 fraud continues in San Jose, CA, it's clear that two things can 314 00:15:29,350 --> 00:15:31,310 be true. She should be held accountable 315 00:15:31,310 --> 00:15:34,710 for her actions as CEO of Theranos, and it can be sexist 316 00:15:34,710 --> 00:15:38,110 to hold her accountable for the alleged serious wrongdoing and 317 00:15:38,110 --> 00:15:40,750 not hold an array of men accountable for reports of 318 00:15:40,750 --> 00:15:44,430 wrongdoing or bad judgment. So Ellen Pal Hare is not arguing 319 00:15:44,430 --> 00:15:46,630 that Elizabeth Holmes couldn't be held accountable. 320 00:15:46,870 --> 00:15:49,950 What she's saying is that Elizabeth Holmes is being held 321 00:15:49,950 --> 00:15:53,910 accountable by other guys that have done similar things, are 322 00:15:53,910 --> 00:15:56,630 not held accountable. And so that's where the sexism 323 00:15:56,630 --> 00:15:59,470 comes in, is that Elizabeth Holmes is the victim of 324 00:15:59,470 --> 00:16:01,470 selective enforcement of these laws. 325 00:16:01,790 --> 00:16:04,990 And then Ellen Powell highlights examples of male entrepreneurs 326 00:16:04,990 --> 00:16:08,310 that weren't held accountable. Questionable, unethical, or even 327 00:16:08,310 --> 00:16:11,230 dangerous behavior has run rampant in the male dominated 328 00:16:11,230 --> 00:16:13,840 world of tech startups. Though never charged with 329 00:16:13,840 --> 00:16:18,400 crimes, Weworks, Adam Newman, and Uber's Travis Kalanick hyped 330 00:16:18,400 --> 00:16:21,440 their way into raising over $10 billion for their companies, 331 00:16:21,680 --> 00:16:24,080 claiming they would disrupt their stagnant, tired 332 00:16:24,080 --> 00:16:25,960 industries. And this is where I think Ellen 333 00:16:25,960 --> 00:16:29,040 Powell gets it very wrong. Comparing Elizabeth Holmes to 334 00:16:29,120 --> 00:16:32,880 Adam Newman or Travis Kalanick, she's saying that Elizabeth 335 00:16:32,880 --> 00:16:36,240 Holmes is being prosecuted because she's a woman, and Adam 336 00:16:36,240 --> 00:16:38,880 Newman and Travis Kalanick are not being prosecuted because 337 00:16:38,880 --> 00:16:40,520 they're men. That's inaccurate. 338 00:16:40,900 --> 00:16:44,020 The reason that Elizabeth Holmes is being prosecuted and Adam 339 00:16:44,020 --> 00:16:46,620 Newman and Travis Kalanick aren't is because Adam and 340 00:16:46,620 --> 00:16:50,100 Travis didn't lie about their current technology and their 341 00:16:50,100 --> 00:16:53,380 existing business. They did hype their way into a 342 00:16:53,380 --> 00:16:56,740 $10 billion valuation. But hyping your way to a big 343 00:16:56,740 --> 00:17:00,020 valuation is not illegal. Saying that I'm going to become 344 00:17:00,100 --> 00:17:03,260 a trillion dollar company and I have all these big ambitious 345 00:17:03,260 --> 00:17:06,060 plans and I want to conquer the world is not illegal. 346 00:17:06,300 --> 00:17:09,660 Even if I raise a lot of money to go forward with my ambitious 347 00:17:09,660 --> 00:17:13,099 plan, and even if I lose money in the pursuit of this 348 00:17:13,099 --> 00:17:17,660 ambitious, overly hyped plan. What is illegal is lying about 349 00:17:17,660 --> 00:17:21,060 my current technology, Lying about my current business and 350 00:17:21,060 --> 00:17:23,980 the capabilities of my products that is illegal. 351 00:17:24,099 --> 00:17:26,660 Lying about the present and the past is illegal. 352 00:17:26,819 --> 00:17:30,890 Hyping the future is not illegal and Elizabeth Holmes lied about 353 00:17:30,890 --> 00:17:34,010 the present and the past. Another counterpoint I'd bring 354 00:17:34,010 --> 00:17:36,730 up to what Ellen Powell is arguing here is the story of 355 00:17:36,730 --> 00:17:39,410 Nicola and Trevor Milton. This is probably the most 356 00:17:39,410 --> 00:17:43,050 comparable company and CEO to Elizabeth Holmes and Theranos. 357 00:17:43,250 --> 00:17:46,970 What Trevor Milton did, like Elizabeth Holmes, was lie about 358 00:17:46,970 --> 00:17:49,730 the current and previous technology of the company. 359 00:17:50,090 --> 00:17:52,850 He didn't only boast a big vision about the grand future of 360 00:17:52,850 --> 00:17:56,530 Nicola, but he lied about their current technology, which is 361 00:17:56,530 --> 00:17:57,930 illegal. That is fraud. 362 00:17:58,240 --> 00:18:01,080 So like Elizabeth Holmes, he lied about current technology 363 00:18:01,400 --> 00:18:04,320 and like Elizabeth Holmes he's being charged with fraud, 3 364 00:18:04,320 --> 00:18:07,480 counts of it, and he could face up to 60 years in prison with 365 00:18:07,480 --> 00:18:09,560 these charges. So I don't see Trevor Milton 366 00:18:09,560 --> 00:18:12,040 hair being treated any differently than Elizabeth 367 00:18:12,040 --> 00:18:13,840 Holmes. Both of them lied about their 368 00:18:13,840 --> 00:18:16,440 technology and both of them are getting charged with fraud. 369 00:18:16,480 --> 00:18:19,680 And even more specific to Theranos itself, even at the 370 00:18:19,680 --> 00:18:23,360 specific company, Elizabeth Holmes is not the only one being 371 00:18:23,360 --> 00:18:25,600 charged. They also charged the former 372 00:18:25,600 --> 00:18:29,560 president of Theranos, Sonny Balwani, who I'm fairly certain 373 00:18:29,560 --> 00:18:32,480 he's a man. He identifies as a man and they 374 00:18:32,480 --> 00:18:34,920 have raised charges against him as well for fraud. 375 00:18:34,920 --> 00:18:37,960 So even at this company, Elizabeth Holmes is not being 376 00:18:37,960 --> 00:18:39,800 singled out. They charged a man with similar 377 00:18:39,800 --> 00:18:41,600 charges. And one more thing that I'd 378 00:18:41,600 --> 00:18:45,000 point out in regards to Ellen Powell's arguments is one of the 379 00:18:45,000 --> 00:18:47,440 points that she brings up is that Elizabeth Holmes was 380 00:18:47,440 --> 00:18:50,960 singled out because of her weird mannerisms, her voice and her 381 00:18:50,960 --> 00:18:52,760 eyes and the way that she dressed. 382 00:18:52,760 --> 00:18:55,760 That she got all this attention that males don't get. 383 00:18:56,120 --> 00:18:58,200 Well, that's not exactly accurate either. 384 00:18:58,400 --> 00:19:02,360 Smirks, silence and nerves. A recap of the drug pricing 385 00:19:02,360 --> 00:19:05,320 hearing with Martin Shkreli. Martin Shkreli is serving A7 386 00:19:05,320 --> 00:19:08,490 year prison sentence for wire transfer fraud, but the big 387 00:19:08,490 --> 00:19:13,090 focus of this trial was his behavior, his smirks and silence 388 00:19:13,090 --> 00:19:15,330 and the way that he looked, the way that he acted. 389 00:19:15,370 --> 00:19:18,410 His behavior and mannerisms got more media attention than the 390 00:19:18,410 --> 00:19:21,610 actual crimes he committed. So again, if the overall message 391 00:19:21,610 --> 00:19:25,010 here is that there's still some sexism in the technology 392 00:19:25,010 --> 00:19:28,130 industry, a male dominated industry, I would agree with 393 00:19:28,130 --> 00:19:29,410 that. I think there's a lot of 394 00:19:29,410 --> 00:19:31,930 progress we can make and ruling out different instances of 395 00:19:31,930 --> 00:19:35,530 sexism, but trying to say that Elizabeth Holmes is being 396 00:19:35,530 --> 00:19:39,570 treated Biasly and other CEO's aren't being treated the same I 397 00:19:39,570 --> 00:19:41,810 think is incorrect. I can find plenty of examples of 398 00:19:41,810 --> 00:19:45,330 male CEO's being charged and going to jail for the very same 399 00:19:45,330 --> 00:19:47,130 things that Elizabeth Holmes is being charged with. 400 00:19:47,130 --> 00:19:50,330 So in my opinion, so far, I don't see any examples of 401 00:19:50,330 --> 00:19:53,450 biasness or extra scrutiny on Elizabeth Holmes. 402 00:19:53,650 --> 00:19:56,210 Now that is all for today. I hope you enjoyed the episode. 403 00:19:56,450 --> 00:20:00,410 I'll do another update this week relatively soon to see how all 404 00:20:00,410 --> 00:20:04,770 of this shakes out, because so far today we're down one. 69% 405 00:20:04,850 --> 00:20:06,570 and the losses keep accumulating. 406 00:20:06,570 --> 00:20:09,610 So I'll give you some more updates later on this week of 407 00:20:09,610 --> 00:20:12,130 how this pans out, but that's all for now. 408 00:20:12,130 --> 00:20:13,010 I'll see you next time.