Welcome back, everyone today on the Joseph Carlson Show.
We've had a busy week over the weekend.
Of course, we've had the huge news of the United States
launching Operation Epic Fury. That's the name of it.
But what it really is is a direct attack on the Iranian
government, an effort to overthrow the regime.
Now, this has caused the market to start off a little bit shaky,
but it looks like we're actually entering into the green.
We have some opinions on this as well.
Steve Eisman believes that investors should continue to
buy. He thinks that this isn't going
to be a problem for the markets long term.
We also have Tom Lee giving his his take on this.
We'll be looking at his as well. And then we also have a lot of
other big news that happened just recently.
For example, Duolingo reported their earnings.
Many investors were hopeful, but the stock did what it's known to
do. It dropped and it dropped
significantly, 20% in a single day, and it continues to go
down. What is going on with Duolingo
and where is the bottom for this stock?
After all, it was as high as $500 plus a share.
It dropped to $300 and then to $200, and now it's below $100
per share. Where is Duolingo headed?
Why is it dropping? Is it being disrupted by AI?
We're going to be looking at all of that with this latest
earnings call. And then we also have Netflix
that just recently had a major move upwards.
The same day that Duolingo dropped, Netflix went up 14 plus
percent. It's not plus 27% from the
bottom because Ted Sarandos said that they're walking away from
buying Warner Brothers Discovery.
That's right. They had the deal signed and
agreed upon at one point. Now they've walked away.
What does this mean for Netflix's future?
What does it mean for my position?
What does it mean for Paramount? There's a lot going on with
this. And why did Netflix walk away
from the steel in the 1st place? We're going to be looking at all
of it in this episode as well. And of course, we have the fail
of the week, which in this case is the CEO of McDonald's doing a
taste test review of this new Big Arch burger.
We get to see his reaction to eating McDonald's, which it
appears that this is the first time he's ever done it, and
we'll be going over that together in the fail of the
week. Now to start things off again,
we have this big news. We have a conflict between the
United States, Israel and Iran and it's taken off with a lot of
airstrikes trying to change the regime and change the government
in Iran. Now, one of the people that I
like getting the opinion on this when they have him on is Steve
Eisman because he's typically level headed in most cases like
this. He has a pretty long term
perspective. So go ahead and listen to what
he says that he believes investors should do with this
news. President Trump is a polarizing
figure. There are things that he does
that I completely agree with. There are things that he does
that I disagree with, like like any president.
But on this, he's 1000% correct. And I, I'm befuddled by, by
anyone who who thinks that what he's doing is, is not right.
The the Iranian regime is a death cult and that a death cult
can't be allowed to have nuclear weapons, ballistic missiles.
It can't be allowed to go and kill thousands of Americans over
40 years. And what he's doing is 100%
correct. The only, the only thing I would
just say which, which I don't think a lot of people recognize,
is that this is going to take some time because a a normal
regime in the face of the might of the United States of America
would have surrendered already. But this regime is capable of
absorbing a lot more pain than a normal regime, because they view
pain and death of their own people as a sign of their own
righteousness. So this is the right move
according to Steve Eisman, but it will take time because of how
ideological the Iranian regime is.
He continues on giving his opinion that specifically what
investors should do knowing what's going on right now as far
as the markets. Go would, would would you?
Change anything based on. Based on this, yeah, not a not a
not a single trade. I think long time this is very,
very positive because it means the Middle East will be a a lot.
I think it eventually a lot, not a negative even with oil.
And and and. Volatility react because of
what's happening. Oil prices are obviously up, but
if it goes well, you know, two months from now oil prices will
be back to where they were. He wouldn't do a single trade
based on the events going on, which again is a very level
headed view, especially considering that Steve Eisman is
someone that will exploit systemic problems.
He did so with the banks failing in the United States.
So if you thought that there was something that could be
exploited for investors that we could make an easy trade based
off of this, he would give it. But he just doesn't see 1 here
and the market seems like it's treating it the same way.
Tom Lee also expressed a similar sentiment today.
That's right. I mean, nobody likes to see
headlines and images of explosions and war.
And so we know risk premium jumps.
That's why the VIX jumps. But it's not really going to
change the fundamentals of the US So in the past, markets kind
of sell off into the build up and then they tend to do better
once the battle begins. And I think this is going to be
similar. This isn't going to change much
with the United States, but he did mention that this does
increase risk premiums. It increases the chance of a
greater global conflict. Yeah.
I mean, I think a lot of experts are going to worry that this
could, you know, encompass a larger conflict, you know,
something that would be, you know, World War three or
something, right. But in the absence of that, I
think the worst of the sell offs going to happen this week and
you know, I, I would expect actually March to be an up month
for the stock market. And I agree with both of them.
Even though this is huge news internationally, I don't believe
it's going to impact U.S. stocks in the long term to any
meaningful degree. And I I think that investors
should just stick to their plan. These type of events are
expected. The world is chaotic.
There's going to be more of them.
We saw what just recently happened in South America.
Now we see things happening in the Middle East.
Next month it's going to be something different.
There's always something chaotic going on in the world.
My investment strategy remains the same.
I'll continue to build positions and high quality companies.
Part of my investment philosophy already encompasses the idea
that there's going to be global conflict, so nothing about that
changes how I view My Portfolio now.
Overall, this portfolio has been moving up over the past week.
We're back to $320,000 of gains in the passive income portfolio
if we switch over to the story fund.
The story fund is also made a big move upwards from around
$90,000 in the green to around 119,000.
The reason why it's moving back up is primarily because of
Netflix. We have two stocks moving in
different directions. 1 of them is Duolingo.
Duolingo's going down and we have Netflix and Netflix is
going up, but overall, the portfolio is moving up big
because of the weighting of these stocks.
If we look at just the weighting, I want to illustrate
this because I think it's an important principle.
Let me zoom in here and you can see it right there.
This was my weighting of My Portfolio in total prior to the
Duolingo 20% sell off. So as you can see, prior to
Duolingo selling down the most recent 20%, it was a 1.2% total
weighting in My Portfolio. So even though that one's moving
down, which is unfortunate, it's not a massive position.
It's a couple $1000 down of the the whole portfolio.
Duolingo is a smaller market cap, more speculative company
with the lesser proven Moat than the majority of My Portfolio.
Because of that, I intentionally weighted it as a smaller
position. That's why I controlled for
risk. I never made Duolingo a top five
position. It's never been one that's going
to be like the size of Amazon or Meta or MasterCard.
Now the reason for that again is because the dispersion of
possible outcomes, the probability distribution is much
wider for a smaller, more speculative company, one that
has a a much smaller market cap. There's also a smaller amount of
capital to be able to move the stock in either direction.
Short sellers can push it down. Any actives investor can push it
up. There's so many things can
affect Duolingo stock price dramatically that it's a
dangerous one to put as a top position.
So I've tried to control for that risk and I think in a good
way by making it a smaller position, I still have upside if
Duolingo does go up 4 or 5X. If it's a stock that really
compounds well, I can still make some returns with it, but it's
always been one that I've respected the unpredictability
of it by putting it as a smaller position.
Now, one of the companies that did move up massive just over
the past week was Netflix. Netflix is an 8.68% position
before that move, and it moved up another 15% since then.
Because Netflix is such a large position, that move upwards had
a big proportionate impact. When we look at Netflix, the
reason that the stock is moving up is of course because Ted
Sarandos, the Co CEO of the company, said that he's no
longer buying Warner Brothers Discovery.
They're walking away. They're letting Warner Brothers
Discovery sell their company to Paramount after they submitted
what they consider to be a superior offer.
Now, I'll admit, I was a little surprised that Netflix didn't
match the offer or raise their bid at all.
They could have certainly raised it another 5 or 10%.
Netflix has the financial strength to do that.
But like I've always said, Netflix is going to do what's
disciplined. They're going to do what they
believe is the best for the shareholders in the long term,
and they showed that in this response.
This is an incredible display of a disciplined management team,
one that had a framework for what they thought the asset was
worth and what they thought it wasn't worth.
They didn't have greed overtake them.
It wasn't a buy at all costs. It wasn't a buy now and figure
it out later. No, they modeled it out.
They did a discounted cash flow analysis.
They looked at what it would be worth and what they're willing
to offer, and when it went past that point, even by a penny,
they stepped out. That is the reason that the
stock is up so big. That is the reason that Netflix
is now traded back up to $96 per share.
Before they even announced they're buying Warner Brothers
Discovery, Netflix was only $103.00 per share.
It's almost back to that stock price.
And keep in mind, the market has been crushed over this time
period, so Netflix has held up proportionately very well.
And that is because of this new confidence that investors have
in Netflix's management. Again, I can't stress this
enough. When I looked at the different
possibilities of what may happen in the future with Netflix
buying Warner Brothers Discovery, I thought it was a
win win and well, a win win win. But the third option wasn't as
good. The first win is that Netflix
ends up with the asset. Netflix would have done great
with Warner Brothers Discovery because they have the financial
support to be able to support that asset in that scenario that
Netflix owned them. I think that would have been a
win for the shareholder long term.
The other win was that Netflix gets out competed after they've
already signed the deal and that the company that out competes
them has to pay a no shop fee of $2.8 billion.
That is exactly what happened. The deal had already been signed
by Netflix, so they were supposed to have the asset.
But they said you can entertain other offers as long as you pay
us that breakup fee if you go with a different offer.
And that is exactly what they did.
Warner Brothers Discovery said that Paramount's offer was
superior. Netflix decided that they didn't
want to match it. That means that Paramount and
Warner Brothers Discovery, one of them, they owe Netflix $2.8
billion. And Paramount already sent the
check. They've already paid it.
So Netflix got to walk away from this, not take on the
complexity, not take on the debt, not take on the regulatory
burden or the hassle, the year and a half of it being dead
money, not take on any of that and get as a consolation price,
$2.8 billion that will be immediately returned back to the
shareholders through buybacks. That's equivalent to a $0.65 per
share dividend given to the shareholders.
So Netflix wins in that scenario.
They just won just by bidding on it, winning the asset, pushing
up the price for a competitor, making it so that Paramount has
to pay literally billions of dollars more for the asset, plus
Paramount has to pay billions of dollars more to Netflix
investors directly. Netflix killed two birds with
one stone. They won in multiple ways in
this scenario. The worst scenario for Netflix,
the worst outcome, was that they go through with this all the way
through the end. They get to the regulatory
process and it gets blocked by regulators.
Then they have to pay a massive $5 billion breakup fee.
That would be a lose because Netflix wouldn't get the asset
and Netflix would have to pay money directly to a competitor,
which is Warner Bros. So that would have been the
worst case scenario. Even then, they would have
blocked Paramount from having the asset for a year,
presumably, but again, that one was a toss up.
That would have been the worst case scenario.
That didn't happen. In any case, when I look at
Netflix and what happened over the past couple of months, it
gave investors an opportunity to exploit the short term view of
the market. Investors look at stocks very
short term. They try to say that they're
long term, but investors were looking at Netflix and calling
this stock dead money just a couple of months ago.
It's dead money. Who's going to want to invest in
this? They're going to have to go
through a years of regulations. They're going to be scrutinized
by politicians in the Department of Justice.
Even when they're done with that, they're going to be paying
off debt and integrating businesses.
It's going to be dead money now. It's not dead money All of a
sudden, a couple weeks later, Netflix is alive and well, up
27% in two days. The stock's surging now.
It's one of the better performers here today.
It's in the green by 6% and it still has momentum.
Netflix immediately went from dead money to not dead money
very quickly. And the investors that bought in
during these time periods, of which I hope you're all one of
them, you got in a deal on Netflix.
You're already up nearly 30% on this stock.
And I did take advantage of this.
I did buy more Netflix during this time period.
There's a $5000 buy at $85 per share.
That was one of the the most recent ones that I've done.
So we have Netflix here moving back upwards.
We have Ted Sarandos saying that they're going to step away, and
I think that this speaks very positively of both Netflix and
their management. Again, overall, part of the
reason that I'm I'm so confident in Netflix is because I have
confidence in their management. I do think that they look at
what's best for the shareholder. They gave up a lot and not
bidding for Warner Bros. The management could have owned
Netflix plus Warner Bros together.
Can you imagine the power that you would feel owning all of
that, the esteem, going to red carpet events, knowing that you
control all of HBO and all of Netflix?
I mean, you must feel like you're like the most powerful
person in all of Hollywood, basically the whole world at
that point, right? You control so much media.
That's how it would fill to some people and their greed would
make it so that they would want that.
And the shareholders that would come second place.
That's what many management teams do, but not Netflix's
management. When it didn't make sense, they
immediately stepped out of the deal.
And that's what Ted Sarandos highlights here.
Let's go ahead and just take a look at this interview with Ted
Sarandos where he he goes through some of the reasons and
some of the questions of why they stepped away and the
motivations behind it. First, he mentions that we had
done all the scenario planning so we didn't have to go back to
the board. We knew what we wanted to do.
Sarandos says that we had a very tight range of what we'd be
willing to pay and made that offer back when we close the
deal. We hadn't moved much from that
except for moving to cash, which served to move the deal faster.
I'm happy that we got where we we are in and happy where we got
out. Now there's some speculation
that it was the meeting with Trump that caused Netflix to get
out of the deal, and Ted Serranos addresses this.
He says that he doesn't believe there was any growing political
resistance. It was a growing narrative of
political resistance, but we were on a normal regulatory
path. I was in DC on Thursday for a
scheduled meeting with the Department of Justice from a
couple weeks ago to go through some questions about the deal.
It was very productive meeting. Nothing out of the ordinary.
Nothing had shifted or changed dramatically that hauled me to
DC. So he's basically saying that
the meeting in DC had nothing to do with this.
It was an already pre planned meeting from weeks earlier.
There is nothing that shifted or changed the deal in that
meeting. When asked about what he thinks
will happen with the business, Warner Bros after being owned by
Paramount, he says that there's going to be a lot of firings, a
lot of layoffs. The deal is dependent on a lot
of cost cutting. We were in the books of Warner
Bros and the biggest cost centers are people and
productions. There will be cuts in excess of
$16 billion. They are telling people who lend
them money, That's going to happen within 18 months.
It'd be less production, less people working.
So a lot of people that were concerned about Netflix buying
in the media industry, now they have to contend with the fact
that a far less profitable companies buying Warner Bros.
And because of that, they're going to have to cut costs
aggressively. 16 billion is an astronomical amount of cost to
cut. So we'll see what happens, but
that does not look good for the industry.
In any case, it's not Netflix's problem now.
Now, in this interview, Ted Serranos does take one big shot
at Paramount, and that is with the question of an unusual
buyer. He says unusual.
Yeah. Unusual or irrational?
Whatever word you want to use in that, it'll be fascinating to
see the next steps. I have been on the record a lot
in the last two weeks talking about what I think the future
looks like. I'm confident in our future that
we're not impacted by by this at all.
In fact, maybe it's to our advantage, but I hope I'm wrong
for the sake of the industry. He is obviously concerned about
the industry. He believes that Paramount is
way over their skis. They're paying way too much.
They are at 7 times EBITDA leverage.
Seven times is at the point where you're so leveraged at
that point you have to cut costs like crazy.
You have to optimize for years. It'll be a a decade of Paramount
trying to just get their costs under control.
One of the questions or one of the potential impacts of
Paramount owning Warner Bros is maybe they could bully Netflix
now and no longer license them content, right?
Netflix likes licensing content from Warner Bros.
You in some cases will have HBO shows on Netflix.
And that's really good for Netflix consumers time to time.
And the thought process is maybe they they box Netflix out, make
it so that they can't have access to any of their content.
But he says that that's not likely specifically because of
their financial position. If they are 6 or 7 times
levered, they need to make some money and we're buyers.
So I can't imagine that's going to be a problem.
He's basically calling Paramount broke.
He's saying that they're too broke to not license content to
us. We're a good buyer.
They're going to license content because they have to.
Now the reaction from employees, apparently at Netflix, a lot of
the employees are simply just relieved.
It was going to be a very difficult challenge to try to
integrate the two businesses and make it work.
So they're a little bit relieved that they can continue to just
build out from their own business and not take on this
huge endeavour. I I've heard from a lot of
employees the the vibe there is just one of relief.
And from Warner's side, theirs is 1 where they're not happy
about this. I've heard rumors from a lot of
employees that they'd preferred Netflix as a buyer, which of
course makes sense because there's far less likelihood of
them getting fired if Netflix is the buyer.
But ultimately the market speaks.
Paramount is the buyer. They've already signified that
they're going to be combining both services, Paramount and
HBO. So you'll have those under the
same login, the same service in the future.
So we'll see what happens in the future in terms of Netflix
investors, things are back on track.
They'll continue to build out their business.
They'll continue to compound. We'll see if they try to pick up
any smaller studios in the process or what their strategy
is going forward. Because I believe Netflix does
need to try to build out their own cinematic universes, their
own Westeros, those type of things.
And we'll see how they do that in the future.
Now moving on from Netflix, we get to another stock that went
the total opposite direction, which is Duolingo.
Let's go ahead and talk about Duolingo Hair.
Duolingo's earnings report has two major parts to it.
There's the guidance, which is the primary reason that the
stock dropped 20% was because of the guidance that they gave.
The other aspect to it is everything else, the questions
about the Moat, the questions about market saturation, the
questions about their growth and their future.
So when we look at Duolingo, let's go ahead and just take a
look at some of the numbers here.
We have the revenue which it it grew rather fast year over year,
35%. So that's still very fast
revenue growth, slight deceleration, but somewhat
expected. The problem is in the guidance
they're guiding for growth around 18 to 20%.
Earnings per share growth around the same.
So this is much slower growth, a deceleration.
Bookings growth of 20% is a huge deceleration.
It shows that they're, they're growing their revenue aspect
much slower than previously. And we'll get into that in just
a minute. But when we look at the rest of
these numbers, we look at the daily active users.
This came into 52.7 million, which was actually above where
the expectations were. So they gained daily active
users a little bit above their guidance, which is good.
And you can see overall they're still gaining a lot of daily
users. This is a lot of users using
Duolingo everyday, 52.7 million. When we look at the monthly
active users, a lot of people point to this to show that
there's problems with Duolingo because the monthly active is
down quarter over quarter. It's up 14% year over year, but
the monthly active has flat lined now.
They're not as concerned about this.
They've kind of shifted away from even really being too
concerned about monthly. They're primarily focused on the
daily active users. Overall, the biggest problem
that they highlighted on the earnings call was that they're
seeing a deceleration in daily active user growth.
This number which they do care about, they care about this one
deeply. This is their primary number
that they look at is decelerating and they believe
it's going to further decelerate in 2026.
And the CEO of the company is doing everything he can.
He's re changing everything in the company to make this number
re accelerate. And they launched a new goal.
Their goal is to get above 100 million daily active users, 100
million, which is roughly double where it is now by 2028.
So in three years they want to double the amount of users that
would be very strong growth and they gave some numbers of what
will happen if they get there. For example, if we look at the
EBITDA, if they don't go across this path, if they don't try to
get to 100 million, then their EBITDA will probably be at
around $400 million by 2028. So they believe they'll have
$400 million EBITDA 2028 under like a normal path.
If they continue what they're doing today, they continue on
along the same path. If they get to 100 million daily
active users in 2028, then they believe that EBITDA is more
around the ballpark of 700 million by 2028.
So significantly higher. The company's much bigger at
that point, which if that happens, it's just a bigger
company, more profits, higher market cap.
So they're going for what they believe is the bigger prize.
They're, they're focusing on user growth, quality of teaching
and taking advantage of this big opportunity.
And because they're doing that, they're less focused on
monetization today. They're less focused on
converting people from the pro tear to the Max tear.
That's really not what they're doing.
In fact, what they're doing is they're getting a lot of the
benefits from the Max tear down to the pro tear.
They're just increasing the quality of their service.
They're giving more of the AI benefits, more of the one-on-one
teaching. They're giving that to everyone.
They're making it so that Duolingo is a far more
personalized tutor than it's ever been before.
Typically Duolingo's been looked at as like advanced flash cards,
and now it's going to be a highly interactive AI tutor
combined with flash card elements, which increases the
quality of teaching, the engagement, and the daily active
users, because the more they get value, the more they'll use the
app. So that is the route they're
going. They're focusing solely on this
DAU. They're trying to grow it as
much as possible. They want to get to that 100
million mark. They want to make Duolingo an
incredibly powerful, personalized tutor, better and
more engaging and more interactive and more fun than a
real life tutor. And that requires some short
term pains. So when we look at Duolingo,
there's still a big misconception of what's going on
here. Many bears on the stock will
insist that the reason the stock is going down and the reason
that Duolingo's struggling to grow is because of competitive
forces. They'll say that competition is
caught up. The Duolingo can't compete.
In a world with AI tutors with chat, GBTS, with Gemini's, with
vibe coding, you can easily replace Duolingo.
And of course, that's the reason the stock's going down and the
revenue's decelerating. A lot of investors are having
their biases confirmed looking at Duolingo's revenue slow down.
The problem with that is that none of the actual data supports
that. And that is exactly what the CEO
of the company says in the earnings call with real data
points. OK.
So your first question is about market saturation and
competition. We're worried about neither one
of those in terms of competition, if you look at
language learning apps, we have about 85% of the daily active
uses of language learning apps in the world and that number has
remained, you know pretty flat over over over a while.
But basically we're we're just not particularly concerned about
that you. Just addressed AI competition in
one sentence with one data point.
He completely destroyed the whole narrative.
The Duolingo's being out computed by AI with a single
data point. The data point is that Duolingo
has 85% of the daily active language learners in all of the
market. They hold around 85% market
share. That percentage of market share
has remained consistent for a long time now.
How could their market share hold the same if they're being
out competed? How does that make any sense?
The way that you see if you're being out competed is by your
market share of users going down, by users leaving your
application, leaving whatever you're doing and going somewhere
else. And that they're growing is a
bigger proportion of the pie, but that's not happening.
They're maintaining the same market share while growing.
So the revenue growth or the daily active user growth going
down is for different reasons. And he highlights the different
reasons in this call. Another concern is market
saturation. He also says that he's not
concerned about market saturation at all.
Why is he not concerned about saturation?
Let's go ahead and listen to him here.
In terms of market saturation, you know, we're for example, we
look at things like the, the, the percentage of daily active
users in a given country compared to the size of the
Internet base of that country. So for example, in the United
States, 2% of all Internet users on a given day use Duolingo.
So 2% penetration in the US for daily users in the UK that's 3%,
in Germany that's 4%. And Germany is not the highest
country we have, we actually think we can get much higher
than that. But even if we only assume that
every country got to 2%, which is the US penetration, we would
more than double our daily active users.
So I I just don't think we're, we're near saturation at all.
That answers the saturation question.
In the US they're at 2%. That's that's how many people
use use Duolingo everyday is 2% of people with Internet access
in the United States. They use that same benchmark in
all the countries that they operate in based on the
proportion of Internet enabled users.
If they got to 2%, they would over double their market size,
they'd over double their amount of daily active users.
So there's also ample room for this company to grow ample user,
50 million plus users just to get to 2%.
And they believe that they can get higher than that.
Countries they have right now, like Germany are at 4%.
So obviously it can get higher than that.
Think about it, if we get more people on math, on music, on
chess, there's lots of opportunities to grow that daily
active user. And then he gives one additional
data point to actually explain where these users go when they
stop using Duolingo, and it's not to a competitor.
You know, in general, we're not seeing anything different.
For example, we survey our our our churned users, and the
answers to the surveys of return users haven't really changed in
years. And the most common answer, by
the way, when people stop using Duolingo about where they go is
that they stop learning. People quit Duolingo and they
just stop learning. They don't go to an alternative
service. They don't go to a different
language learning tool. In some cases they can.
I'm sure that that happens. But the most common reason is
people just quit. They just give up.
That's the problem they're addressing.
They're competing in a race of their own.
They have 85% market share. They maintain that market share
for a long time. They have a huge total
addressable market to grow into. Duolingo needs to figure out how
to make their service a bit more engaging.
They need to make the teaching more personalized and AI
enabled, and they can offer tremendous value to users.
So a lot of the concerns that investors have, like AI
competition, are not showing up in the numbers, and it's not
what management is even worried about.
Now, of course, they're always trying to preempt competition
and make sure they're ahead of it.
And that's part of the reason I believe that they're releasing
all of these AI features. They're making Duolingo far more
of an AI adaptive interactive learning tool where now you can
talk to the app and practice language and it will give you
feedback and it's bilingual, can talk back and forth with you.
It can do that while having all the other mechanisms for
engagement. So this is a great direction to
go long term for the company. The big question is if you
believe that they have an opportunity to grow into a
bigger business here, or if you think that their growth will
continue to slow down and ultimately just stall.
If Duolingo's growth just stalls, if it really can't grow
100 million users, if they really can't become a highly
engaging AI enabled platform, then the stock will stall out.
It won't really bounce back, but I still believe there's a chance
that this one could bounce back very strong if they start
executing correctly on their plan of doubling their users
over the next three years. If they get to $700 million in
EBITDA in a year, that's massive.
The stock will move up if that happens, especially because over
those three years, it will become clear whether or not AI
is really disrupting the company or not.
Right now it's not, but we'll see over the next three years
and if investors become convinced that that's not much
of a problem, they may give the stock a better bid.
So as of right now, my plan is that I'm not buying more into
Duolingo. I'm not going to continue to
throw money into this position, but I will hold it because I
believe that there is huge potential upside here in the
future. I think there's still a chance
for growth and having the position be a 1% position.
It it just is an easy one to hold.
It's not difficult for me to hold.
My Portfolio isn't reliant on Duolingo performing.
So in the meantime, I'm going to hold on to it and continue to
follow it. Now moving on, we get to the
fail of the week, which in this case is the CEO of McDonald's
doing a food review of one of their newer, apparently
impressive burgers that they made.
This is the Big Arch burger. It's a new burger from
McDonald's, and the CEO is supposed to give us a review of
it to show us how good it is. Here we have it.
Let's go ahead and jump in. Chris K here with you've heard
about it. Here it is, the big arch.
This is something that we have tested already in Portugal,
Germany, Canada. I love this product.
It is so good. I'm going to do a tasting,
right? He can't help it.
The guy's so corporate, like he's just, this guy is just like
a walking spreadsheet of corporate vocabulary.
So you just can't even help it. It says that we've tested it,
We've already tested the product and the product is tested well
and the geographies that we've tested it.
We've made some food that people love.
I mean, why doesn't he talk like a human?
He has to talk like corporate, but his whole mind is just
corporate jargon at this point. So instead of saying this is a
a, a burger that we've made, we've made it so tasty.
People around the world really love it when they get their
hands on it. They say this is a a well tested
product. It's a well tested product.
That we have tested already in Portugal, Germany, Canada.
I love this product, it is so good.
I'm going to do a tasting, right?
Really good product, guys. He's going to taste this product
that they've tested. Right now, But I'm going to eat
this for my lunch, just so you know.
So here we go first, Holy cow, God, that is a big burger.
We've got a very unique kind of sesame poppy sort of bun on it.
He opens it up. Wowzers.
Holy cow. Boy am I shocked to look at how
big this burger is. It's it just doesn't sound
natural. I don't know man, maybe just I
don't know why it's so difficult for people to give a genuine
review. We could just open it up and say
this is a a good looking burger but instead it's wow geez look
at how big it the the burger is. Something about this whole
review just from the beginning feels incredibly unnatural, and
it keeps getting worse. We've got two quarter pound
patties, a delicious big orange sauce, and of course, some
lettuce. So, oh, there's so much going on
with this. First of all, let's try to get
this thing I don't even know. How to attack it got?
So much to it. Oh, there's also some crispy
onion. What do you mean how to attack
it? It's a burger it with two
patties. What guy this is?
This is something everybody, every.
I've ate a million of these. Who hasn't?
How do you not know how to hold a hamburger?
It's not complicated. He's acting like this is such a
crazy burger, he can't even figure out how to hold it.
How do you hold the hamburger? How's that difficult?
It's just a hamburger. So, oh, there's so much going on
with this. First of all, let's try to get
this thing. I don't even know how to attack.
It got so much to it. Oh, there's also some crispy
onions on here as well. I see those kind of coming out.
All right, the moment of truth. That is so good.
That's a big bite for a big. That's a big bite, guys.
That that this is, this is what this is a big bite.
Now, just to put that in perspective, this is the big
bite he took. You can't even see where he bit
the burger. It looks almost completely
round. That is so good.
To him, that's a big bite of a burger nibbling on one.
One tiny part of the burger. Huge bite.
I, I this guy, I don't think he's, he's, he eats salads.
That's what he eats. He eats healthy.
He's eating really mixed greens, healthy salads with avocado and
maybe some salmon. I mean, this guy is not eating
McDonald's every day. There's, there's just a million
giveaways pretending like this is a difficult burger to to
have. Most guys would be grabbing this
burger with one hand on their way to work while driving,
pretending that it's incredibly unique.
Obviously he's doing for marketing, but just the whole
way that he's going about this feels like he's never actually
eaten a burger before. It's really, really quite odd.
It's distinctively McDonald's. Only McDonald's could do this
type of burger. But it also was unlike anything
else on our menu. So they didn't show him actually
like chewing and swallowing it. Notice how they just cropped
that out. It went straight from the bite
that he took out and then no chewing it's.
Distinctively, McDonald's, only McDonald's could do this type of
burger. But it also was unlike anything
else on our menu. It's a delicious product.
You know, you've got sort of. It's a delicious product.
The product is well tested. We had good, good return
estimates on the product and it's a delicious product.
It's a delicious product. You know, you've got sort of the
cheeses and the gooeyness, but those crispy onions as well
gives a nice texture. And of course we've got the
Pickles. So I'm going to enjoy the rest
of my lunch. But big arch, try it when you
can get. It he's so happy, he can be done
pretending to eat this and he can go back to eating his
extremely well balanced meal that he's going to eat after
this. And this of course has blown up
online. It's gone viral because it shows
it's not good when you try to do something and it's totally
inauthentic. He doesn't like McDonald's
burgers. It's easy to tell that.
You can just tell that watching it.
He doesn't like it. So I don't publish a a review of
him eating a burger. It's not good for the brand.
They should pick McDonald's customers that are there eating
every day and say, what do you like about it?
They probably find people that genuinely just love McDonald's
burgers that eat it every day and their reactions would be
very natural. Not this.
This is not natural at all. The fake commentary, the fake
compliments, how insincere this review comes across, how
uncomfortable it is, how he's referring to it is a tested
product. All of it just comes across as
inauthentic. And if there's one thing the
Internet will see through immediately is inauthenticity.
And that is why this little review from McDonald's is the
fail of the week. That's it for this episode.
Hope you enjoyed. See you in the next one.