1 00:00:00,200 --> 00:00:01,900 Welcome back, everybody. Thanks for joining. 2 00:00:02,000 --> 00:00:03,800 In this episode. We have a lot to go over. 3 00:00:03,800 --> 00:00:07,200 Like always first of all, there's over 400 companies 4 00:00:07,200 --> 00:00:10,000 reporting earnings this week. It's going to shape a lot of the 5 00:00:10,000 --> 00:00:12,500 market. We've had this huge run-up in 6 00:00:12,500 --> 00:00:15,700 prices of companies, the markets gone up a lot and we're going to 7 00:00:15,700 --> 00:00:17,500 see why there are a lot of this is Justified. 8 00:00:17,500 --> 00:00:20,700 So these companies are going to report earnings if they're not 9 00:00:20,700 --> 00:00:22,900 where they should be. I think that we're going to see 10 00:00:22,900 --> 00:00:25,100 a little bit of a pullback. These companies don't have 11 00:00:25,100 --> 00:00:27,700 perfect earnings. I think we're going to see a bit 12 00:00:27,700 --> 00:00:31,700 of a pullback because we saw what And to Netflix, Netflix had 13 00:00:31,700 --> 00:00:35,500 an awesome quarter, they gained 10 million subscribers and they 14 00:00:35,500 --> 00:00:38,500 still had a huge pull back because their earnings weren't 15 00:00:38,500 --> 00:00:41,300 precisely what estimates had the mat. 16 00:00:41,300 --> 00:00:44,700 So if this is the case, if these companies they can do well but 17 00:00:44,700 --> 00:00:47,300 they just can't do perfect. And the stock price will drop 18 00:00:47,300 --> 00:00:49,700 five or six percent. I think that that's not a good 19 00:00:49,700 --> 00:00:52,100 sign for the market but we're going to see a lot of these 20 00:00:52,100 --> 00:00:53,800 companies are reporting every day of the week. 21 00:00:53,800 --> 00:00:57,600 We have companies like Microsoft American Express, Twitter, so on 22 00:00:57,600 --> 00:00:59,800 and so forth, so we'll see what happens outside. 23 00:01:00,000 --> 00:01:01,400 App. We have my portfolio. 24 00:01:01,500 --> 00:01:03,600 Is that a value of a hundred and five thousand dollars. 25 00:01:04,000 --> 00:01:07,000 The gains are 4700. They've been struggling lately 26 00:01:07,200 --> 00:01:09,900 over the past week. I've gained about half of that 27 00:01:09,900 --> 00:01:13,600 about 1.9 percent, which is two thousand dollars, but, overall, 28 00:01:13,600 --> 00:01:16,800 my portfolio has suffered from being mostly value. 29 00:01:16,800 --> 00:01:20,300 Stocks, mostly dividend growth value stocks. 30 00:01:20,700 --> 00:01:22,900 And most of the attention has been on Tech. 31 00:01:23,000 --> 00:01:27,100 That's where everybody's wanted to be is intact because this is 32 00:01:27,100 --> 00:01:29,400 a little bit of an eye-opening thing mostly. 33 00:01:29,400 --> 00:01:33,000 When you look, At growth stocks and these high P/E ratio stocks, 34 00:01:33,200 --> 00:01:35,800 you're thinking risk, you're thinking these companies have a 35 00:01:35,808 --> 00:01:38,700 high amount of risk, but what we found with the coronavirus is 36 00:01:38,700 --> 00:01:41,300 that the companies that have been growing, a lot seem to have 37 00:01:41,300 --> 00:01:44,300 the least amount of risk as well companies, like Amazon, and 38 00:01:44,300 --> 00:01:48,100 apple, and Microsoft, these ones with these huge balance sheets. 39 00:01:48,100 --> 00:01:51,400 They're doing fine during this this crazy time. 40 00:01:51,400 --> 00:01:53,500 They're doing just fine. Meanwhile, the companies with 41 00:01:53,500 --> 00:01:56,000 the low P/E ratios, the ones with high amount of cash flow, 42 00:01:56,000 --> 00:01:59,900 low P/E ratio, like real estate. Nobody wants to own. 43 00:02:00,000 --> 00:02:02,000 That that's been trading down like crazy. 44 00:02:02,100 --> 00:02:04,500 Nobody wants real estate. Nobody wants to be touching 45 00:02:04,500 --> 00:02:06,800 finances right now. They don't want Banks. 46 00:02:06,800 --> 00:02:09,300 Those are scary. They're highly leveraged, even 47 00:02:09,300 --> 00:02:12,600 utilities, which is mostly a safe play has not done as great 48 00:02:12,600 --> 00:02:14,600 as it usually does. People don't want to own 49 00:02:14,600 --> 00:02:16,200 Telecom. People don't want to own 50 00:02:16,200 --> 00:02:19,600 Industrials, people certainly don't want yucky energy 51 00:02:19,600 --> 00:02:22,300 companies. So this is what we're seeing all 52 00:02:22,300 --> 00:02:26,000 these Dow Jones value stocks have not done. 53 00:02:26,000 --> 00:02:29,600 Well, this year, the Dow Jones is down about 7 percent 54 00:02:29,600 --> 00:02:32,200 year-to-date. Date while the NASDAQ is up 15 55 00:02:32,200 --> 00:02:35,100 percent year-to-date, which is mostly tech companies. 56 00:02:35,200 --> 00:02:38,600 So what I've been doing with my portfolio is I've been trying to 57 00:02:38,600 --> 00:02:41,800 balance things out a bit. I'm trying to expand Tech while 58 00:02:41,800 --> 00:02:46,100 finding the best value in Tech. The ones that have the best 59 00:02:46,100 --> 00:02:49,100 opportunity for the future as well as the lowest multiples. 60 00:02:49,100 --> 00:02:52,800 The ones that I think are the best value within that I've made 61 00:02:52,800 --> 00:02:55,500 a heavy bet on Apple, not everybody agrees with this. 62 00:02:55,700 --> 00:02:58,700 In fact, I received an email shortly after my last episode 63 00:02:58,700 --> 00:03:02,600 saying the In valuation of Apple, that was a subject line 64 00:03:02,600 --> 00:03:04,600 of it. Their argument is that apple is 65 00:03:04,600 --> 00:03:06,900 not worth one point seven trillion dollars. 66 00:03:06,900 --> 00:03:08,600 So we're going to be looking at this email. 67 00:03:08,900 --> 00:03:11,200 I think it's a good argument. He makes you pretty much 68 00:03:11,200 --> 00:03:15,600 Compares Apple to every other leading company in that industry 69 00:03:15,900 --> 00:03:17,900 and he tries to compare the value between the two. 70 00:03:17,900 --> 00:03:20,500 So we'll look at this and see if apples at an insane valuation. 71 00:03:20,700 --> 00:03:22,900 But other than Apple, I have Microsoft. 72 00:03:22,900 --> 00:03:25,400 I have visa and I included, MasterCard. 73 00:03:25,500 --> 00:03:28,100 I like these companies Visa Mastercard because I think 74 00:03:28,100 --> 00:03:30,900 they're mostly tech companies and Secondarily finance 75 00:03:30,900 --> 00:03:33,200 companies. They don't run like Banks. 76 00:03:33,300 --> 00:03:35,900 They're not traditional finance companies that lend out money. 77 00:03:36,200 --> 00:03:38,800 I think they're mostly tech companies now visa and 78 00:03:38,800 --> 00:03:43,100 MasterCard for my duopoly and I think it's a game where they 79 00:03:43,100 --> 00:03:45,100 always win. I don't see scenarios where 80 00:03:45,100 --> 00:03:48,400 Visa, Mastercard, don't win whether PayPal and venmo wins or 81 00:03:48,400 --> 00:03:51,000 Square and cash app. Either way, at the end of the 82 00:03:51,000 --> 00:03:52,800 day, MasterCard. And Visa are going to do really 83 00:03:52,800 --> 00:03:55,500 well. So this is the growth of my tech 84 00:03:55,600 --> 00:03:58,200 portion of my portfolio. I'm going to continue to grow 85 00:03:58,200 --> 00:03:59,800 this out. It has a lower. 86 00:03:59,900 --> 00:04:03,000 Dividend payment. But I'm sacrificing that to have 87 00:04:03,000 --> 00:04:05,500 a better defensive portfolio. I want to have more balance 88 00:04:05,500 --> 00:04:08,800 right now. If I look over all about 70% of 89 00:04:08,808 --> 00:04:11,900 my portfolios and value about 30% is in growth. 90 00:04:11,900 --> 00:04:15,100 And what I want to do is shift it to where it's more 50/50 so 91 00:04:15,100 --> 00:04:18,300 that whether the NASDAQ is doing well or whether the Dow Jones is 92 00:04:18,300 --> 00:04:21,700 doing well, in either case, my portfolio does well because I 93 00:04:21,700 --> 00:04:23,700 have the best companies of each different index. 94 00:04:23,700 --> 00:04:25,600 So, that's the goal. That's the direction. 95 00:04:25,600 --> 00:04:27,700 I've been going. I've been selecting what I think 96 00:04:27,700 --> 00:04:29,900 are the best companies out there in these days. 97 00:04:29,900 --> 00:04:32,100 Different sectors. The best growth companies in the 98 00:04:32,100 --> 00:04:33,900 best. Value companies, for instance, 99 00:04:33,900 --> 00:04:36,200 in finance. I'm doing a heavy bet on JP 100 00:04:36,200 --> 00:04:37,900 Morgan. I'm probably going to be selling 101 00:04:37,900 --> 00:04:40,600 out of some of these companies to put more money into JPMorgan 102 00:04:40,600 --> 00:04:43,200 because because I listened to their earnings report this last 103 00:04:43,200 --> 00:04:46,600 week and they were fine. They were profitable, they put a 104 00:04:46,608 --> 00:04:50,200 lot of money aside for future losses and case that happens. 105 00:04:50,200 --> 00:04:53,600 So even if the economy goes south, I think JP Morgan will 106 00:04:53,600 --> 00:04:56,700 continue to go through this. Okay, they won't destroy Book 107 00:04:56,700 --> 00:04:58,300 value. They won't have to sell off 108 00:04:58,300 --> 00:04:59,800 valuable assets. I think. 109 00:04:59,900 --> 00:05:02,700 Bank will come out very strong. So I'm going to be putting more 110 00:05:02,700 --> 00:05:05,900 money into JP Morgan. This is more of a risky bet but 111 00:05:05,900 --> 00:05:08,100 I think this company will come out strong and eventually be 112 00:05:08,100 --> 00:05:12,000 trading back at 130, 140 dollars a share where it was previous to 113 00:05:12,000 --> 00:05:14,700 this year. So, so that's been the overall 114 00:05:14,700 --> 00:05:16,800 direction. I've been taking my portfolio. 115 00:05:17,000 --> 00:05:19,800 I'm keeping the value. I have a lot of money in value 116 00:05:19,800 --> 00:05:22,300 right now, but I'm trying to build out the growth portion of 117 00:05:22,300 --> 00:05:25,100 it to make it more balanced. So that'll be something I 118 00:05:25,108 --> 00:05:27,300 continue to do in the future building out these growth 119 00:05:27,300 --> 00:05:28,800 Holdings, building out the tech Holdings. 120 00:05:29,100 --> 00:05:32,200 These really E large defensive tech companies that have the 121 00:05:32,200 --> 00:05:35,400 really big cash on hand, like apple that has 200 billion 122 00:05:35,400 --> 00:05:37,400 dollars in cash. I'm trying to buy more of those 123 00:05:37,400 --> 00:05:40,400 companies because I think that we have seen in 2020. 124 00:05:40,700 --> 00:05:42,700 They seem to be the defensive companies. 125 00:05:42,800 --> 00:05:45,800 They seem to be the ones that people go to during a downturn. 126 00:05:46,000 --> 00:05:50,000 So I still have a lot of value. If value does return, if the Dow 127 00:05:50,000 --> 00:05:53,200 Jones does have some kind of surge upwards, you're going to 128 00:05:53,200 --> 00:05:55,500 see these gains go up. So I still have a lot of 129 00:05:55,500 --> 00:05:58,700 exposure to Value but now I have some exposure to growth as well. 130 00:05:58,700 --> 00:06:01,000 And I think this will be over. All a better portfolio. 131 00:06:01,500 --> 00:06:04,400 I also point out if you haven't noticed, I don't have any more 132 00:06:04,400 --> 00:06:06,800 bonds. I sold out of bonds completely. 133 00:06:07,000 --> 00:06:10,600 I put a lot of that money into the tech sector and I did. 134 00:06:10,600 --> 00:06:13,500 So for a couple reasons, one of them, I'll go to Ray dalio an 135 00:06:13,500 --> 00:06:16,000 interview here and he can explain part of the reason why I 136 00:06:16,000 --> 00:06:19,100 don't own bonds anymore. Think of it this way. 137 00:06:19,400 --> 00:06:27,600 You don't want cash. Because and and I don't think 138 00:06:27,600 --> 00:06:35,400 you want bonds because you you get no interest rate, you get a 139 00:06:35,407 --> 00:06:39,300 negative real rates. So you get taxed at that - real 140 00:06:39,300 --> 00:06:44,800 rate and then so from a holding point of view. 141 00:06:44,800 --> 00:06:49,300 It's got no return. And then the central bank's go 142 00:06:49,300 --> 00:06:51,600 to print, plenty more of it and produce it. 143 00:06:51,800 --> 00:06:55,000 Apply. So there's a move to what is a 144 00:06:55,000 --> 00:06:58,400 store? Hold of wealth, you know, think 145 00:06:58,400 --> 00:07:00,900 about it, you know, like all of us. 146 00:07:02,100 --> 00:07:04,900 What is a good store? Hold of wealth. 147 00:07:05,500 --> 00:07:09,600 And if you look at history through times, it's basically 148 00:07:09,600 --> 00:07:12,000 almost the reciprocal of the value of money. 149 00:07:12,000 --> 00:07:16,700 And we see that from financing then it's equities. 150 00:07:16,700 --> 00:07:19,200 It's gold. Its, it is. 151 00:07:19,200 --> 00:07:23,800 What is the thing that is the reciprocal of the value of money 152 00:07:24,000 --> 00:07:28,000 that you have to hold? Hold, you know, your wealth in. 153 00:07:28,100 --> 00:07:31,100 And so that's what we're seeing. He's basically saying that the 154 00:07:31,100 --> 00:07:34,400 return of Hans is negative because of inflation they pay 155 00:07:34,400 --> 00:07:36,300 out less than interest than inflation. 156 00:07:36,300 --> 00:07:38,900 Is likely going to be and He suggests putting your money in 157 00:07:38,900 --> 00:07:41,500 equities which have better tools to deal with inflation. 158 00:07:41,900 --> 00:07:43,100 And that's exactly what I'm doing. 159 00:07:43,400 --> 00:07:45,700 My portfolio is now 100% equities. 160 00:07:46,000 --> 00:07:48,400 I don't have any bonds. It'll be interesting to see what 161 00:07:48,400 --> 00:07:50,100 happens. This will make it more volatile. 162 00:07:50,700 --> 00:07:52,800 If you want to hold bonds, that will certainly make your 163 00:07:52,800 --> 00:07:55,600 portfolio a little bit more stable, but I have a longer 164 00:07:55,600 --> 00:07:57,000 Runway. I have decades that I'm going to 165 00:07:57,000 --> 00:07:59,900 be investing. So I'm okay doing 100% Equity. 166 00:08:00,200 --> 00:08:02,900 If we have another big downturn. If the market drops, another 167 00:08:02,900 --> 00:08:04,900 30%, I can make it through it. Now. 168 00:08:05,200 --> 00:08:07,500 There's an updated Link in the description of this video. 169 00:08:07,500 --> 00:08:09,200 If U, want to see all the Holdings that I've been buying 170 00:08:09,200 --> 00:08:12,500 and selling out of, I have every single holding in that link. 171 00:08:13,000 --> 00:08:15,700 Now, moving on to some news. We have to talk about Twitter 172 00:08:15,700 --> 00:08:18,400 being hacked. Here's a clip from CNN Joe 173 00:08:18,400 --> 00:08:20,500 Biden. Today, assured his supporters. 174 00:08:20,500 --> 00:08:23,800 He'll never asked them to send him Bitcoin, cryptocurrency for 175 00:08:23,800 --> 00:08:27,200 donations, that comes after Biden's verified Twitter 176 00:08:27,200 --> 00:08:29,300 account. And those of many other famous 177 00:08:29,300 --> 00:08:31,600 people were compromised by hackers. 178 00:08:31,800 --> 00:08:34,400 A devastating attack. They got to the accounts of 179 00:08:34,400 --> 00:08:38,600 former President Obama. Bill Gates, Elon Musk other 180 00:08:38,600 --> 00:08:42,200 celebrities like Kim Kardashian West, and Kanye West and 181 00:08:42,200 --> 00:08:45,100 companies like apple and Uber, and they did it. 182 00:08:45,100 --> 00:08:48,100 Twitter says, by doing what's called social engineering. 183 00:08:48,700 --> 00:08:52,100 Now, this is actually crazy, Twitter had one of their admin 184 00:08:52,100 --> 00:08:55,600 accounts, one of their employees had access to manipulate and 185 00:08:55,600 --> 00:08:58,500 tweet out basically every single Twitter account. 186 00:08:58,700 --> 00:09:00,500 He got hacked and he got hacked through. 187 00:09:00,500 --> 00:09:03,200 What's called social? Engineering, which is a fancy 188 00:09:03,200 --> 00:09:04,900 term for saying that he was tricked. 189 00:09:05,000 --> 00:09:07,800 He was manipulated into giving up his credentials and to 190 00:09:07,800 --> 00:09:09,600 hackers. Once they got it. 191 00:09:09,800 --> 00:09:14,000 They either used some way of admin dashboard, to tweet things 192 00:09:14,000 --> 00:09:17,200 out or they use password resets, or something like that, the gain 193 00:09:17,200 --> 00:09:20,300 access to all these high-profile accounts, Bill Gates, and Kanye 194 00:09:20,300 --> 00:09:23,500 West, and Elon musk's. And they use that to tweet out a 195 00:09:23,500 --> 00:09:26,300 Bitcoin scam. Here is a screenshot of what 196 00:09:26,300 --> 00:09:28,800 they tweeted out. It says, this one's from Elon 197 00:09:28,800 --> 00:09:31,000 Musk, but a lot of it was the same from all these accounts. 198 00:09:31,800 --> 00:09:34,900 Grateful doubling all payments sent to my Bitcoin address. 199 00:09:35,000 --> 00:09:37,600 You spend $1000. I send back, two thousand 200 00:09:37,600 --> 00:09:40,600 dollars only doing this for the next 30 minutes and then he 201 00:09:40,600 --> 00:09:42,500 linked to bitcoin address that you could send it to. 202 00:09:42,700 --> 00:09:45,500 I have that part blocked out just because I don't want to be 203 00:09:45,500 --> 00:09:48,800 sharing a scammers Bitcoin address, but you might think 204 00:09:49,000 --> 00:09:52,400 this raises some red flags. When I first saw this, I thought 205 00:09:52,900 --> 00:09:55,100 this raises some red flags. That looks a lot like Elon 206 00:09:55,100 --> 00:09:58,300 musk's account was hacked and then you actually see the 207 00:09:58,308 --> 00:10:00,600 replies and many people sending him money. 208 00:10:00,700 --> 00:10:03,700 Here's one from Will. Saying sent and he has a screen 209 00:10:03,700 --> 00:10:06,800 shot of him sending one thousand dollars worth of bitcoin to that 210 00:10:06,800 --> 00:10:08,300 address. It's crazy. 211 00:10:08,300 --> 00:10:11,100 But a lot of people did this. They received hundreds of people 212 00:10:11,100 --> 00:10:13,000 sending it. In fact, it was over a hundred 213 00:10:13,000 --> 00:10:16,400 and forty thousand dollars worth of bitcoin sent to this address. 214 00:10:16,600 --> 00:10:17,900 Here's a screen shot that I took. 215 00:10:18,100 --> 00:10:20,400 When it was only 135 transactions. 216 00:10:20,600 --> 00:10:22,600 It was Thirty one thousand dollars received. 217 00:10:22,800 --> 00:10:27,800 And then it went on for a while 178 transactions, 4.5 Bitcoin 218 00:10:27,800 --> 00:10:30,000 received which was like 40 or 50 thousand dollars. 219 00:10:30,400 --> 00:10:32,900 It went up all the way to Hundred and forty thousand 220 00:10:32,900 --> 00:10:34,300 dollars. That's how many people fell 221 00:10:34,300 --> 00:10:38,700 victim to this scan and Twitter can consider themselves lucky. 222 00:10:39,100 --> 00:10:42,600 They can consider themselves lucky that all these hackers 223 00:10:42,600 --> 00:10:44,800 wanted to do was make a little money. 224 00:10:45,300 --> 00:10:47,400 That's all they wanted to do. And they weren't financially 225 00:10:47,400 --> 00:10:50,700 sophisticated because if they wanted, they could have made a 226 00:10:50,700 --> 00:10:53,400 lot more money and they could have caused a lot more damage. 227 00:10:53,800 --> 00:10:56,300 What I wanted to do was go through some of these accounts 228 00:10:56,300 --> 00:10:59,400 and pretend for a minute that we have access to them where 229 00:10:59,400 --> 00:11:01,600 hackers and we want to make a lot of money. 230 00:11:01,700 --> 00:11:03,800 Money and we want to stir up a lot of trouble. 231 00:11:03,800 --> 00:11:06,800 So let's just go through and make up some pretend tweets. 232 00:11:07,100 --> 00:11:09,700 These are all completely fake. But let's just pretend for a 233 00:11:09,700 --> 00:11:12,800 second that were hackers. And this is what we tweet out. 234 00:11:12,800 --> 00:11:14,400 How do you think people would respond? 235 00:11:14,400 --> 00:11:17,800 The first one is from Elon Musk? And again, this is completely 236 00:11:17,800 --> 00:11:19,600 fictional Ilan, didn't tweet this. 237 00:11:19,600 --> 00:11:21,200 This is somewhat, the hackers tweeted. 238 00:11:21,500 --> 00:11:23,200 This is just something. I think that they could have 239 00:11:23,200 --> 00:11:25,900 tweeted out that would have caused a lot more drama from 240 00:11:25,900 --> 00:11:28,400 Elon musk's account. They could have tweeted. 241 00:11:28,500 --> 00:11:31,400 I'm stepping down from Tesla effective immediately. 242 00:11:31,800 --> 00:11:33,500 What do you think that would have caused with Tesla's share 243 00:11:33,500 --> 00:11:35,900 price? It would have caused it to tank. 244 00:11:35,900 --> 00:11:38,800 They could have opened up a short position on Tesla and said 245 00:11:38,800 --> 00:11:42,100 that Elon Musk is stepping down. Now, imagine this on Brock 246 00:11:42,100 --> 00:11:44,800 Obama's account. They could have tweeted out. 247 00:11:45,000 --> 00:11:47,600 I'm changing my support to President Trump. 248 00:11:47,600 --> 00:11:52,600 Trump 2020 Maga for Joe Biden's. Imagine them tweeting out. 249 00:11:52,800 --> 00:11:56,300 I have tested positive for Coronavirus for Kanye West's. 250 00:11:56,300 --> 00:11:59,800 I actually did try to think of a crazy tweet for Kanye West, it 251 00:11:59,800 --> 00:12:02,700 could cause a lot of problems. And I honestly couldn't come up 252 00:12:02,700 --> 00:12:04,600 with anything. He tweets out so many crazy 253 00:12:04,600 --> 00:12:05,900 things. Anyways that everything I 254 00:12:05,900 --> 00:12:08,600 thought of, I thought, well, I mean he's tweeted out crazier 255 00:12:08,600 --> 00:12:10,400 things in that. So Kanye West I really could not 256 00:12:10,400 --> 00:12:12,800 think of anything that they could have done to cause too 257 00:12:12,800 --> 00:12:15,300 many issues. And then for Jeff Bezos I did 258 00:12:15,300 --> 00:12:16,900 think of on I thought is pretty good. 259 00:12:17,600 --> 00:12:18,800 They could have tweeted out on Jeff. 260 00:12:18,800 --> 00:12:21,500 Bezos is account. Thank you for your continued 261 00:12:21,500 --> 00:12:24,000 support of Amazon. I'm really excited to hit a net 262 00:12:24,000 --> 00:12:25,800 worth of over 200 billion dollars. 263 00:12:26,300 --> 00:12:29,300 Now, I joke around, it's funny to think of what if these tweets 264 00:12:29,300 --> 00:12:30,800 were sent out, what would happen? 265 00:12:31,200 --> 00:12:34,500 But in Ality, this is a significant security concern. 266 00:12:34,500 --> 00:12:37,200 These hackers could have tweeted out all these hypothetical 267 00:12:37,200 --> 00:12:39,200 tweets. That could have been reality. 268 00:12:39,400 --> 00:12:41,600 Luckily. They didn't, luckily, they just 269 00:12:41,600 --> 00:12:45,300 wanted some Bitcoin money and they didn't do this, but that 270 00:12:45,300 --> 00:12:47,900 was the possibility. This is a big enough deal that 271 00:12:47,900 --> 00:12:51,400 not only to Twitter, open their own internal investigation, but 272 00:12:51,400 --> 00:12:53,300 the FBI is also investigating this. 273 00:12:53,600 --> 00:12:55,900 They consider it a national security concern. 274 00:12:55,900 --> 00:12:58,200 They have these type of high-profile accounts, be 275 00:12:58,200 --> 00:13:01,200 hacked, and people able to send any type of message. 276 00:13:01,600 --> 00:13:04,600 Is a little bit scary because Twitter is often used to State 277 00:13:04,600 --> 00:13:08,100 policy or major events. So the FBI is looking into it. 278 00:13:08,300 --> 00:13:09,700 Hopefully, they catch the scammers. 279 00:13:09,900 --> 00:13:11,600 There's not much that I hate worse than scammer. 280 00:13:11,600 --> 00:13:14,800 So hopefully they catch them. But the FBI is investigating it. 281 00:13:14,800 --> 00:13:17,100 The stock price really hasn't been affected that much. 282 00:13:17,400 --> 00:13:19,400 Twitter released a statement saying were embarrassed. 283 00:13:19,700 --> 00:13:21,700 We're disappointed and more than anything. 284 00:13:21,700 --> 00:13:23,400 We're sorry. Okay. 285 00:13:23,400 --> 00:13:26,400 Now before moving on to emails, I want to touch on one subject, 286 00:13:26,400 --> 00:13:28,200 which is Tesla. This is a company. 287 00:13:28,200 --> 00:13:29,800 I talked about in the previous episode. 288 00:13:30,200 --> 00:13:31,800 I think the company has had a Good. 289 00:13:31,800 --> 00:13:34,100 Run up. I think it's priced pretty high. 290 00:13:34,100 --> 00:13:35,900 I think it's kind of expensive right now. 291 00:13:35,900 --> 00:13:39,200 It's worth about 280 billion dollars which is worth a lot 292 00:13:39,200 --> 00:13:42,600 more than Toyota. So it's expensive but it's a 293 00:13:42,600 --> 00:13:44,400 great company. So you're balancing those two 294 00:13:44,400 --> 00:13:47,200 things with each other. Now, Tesla has its earnings 295 00:13:47,200 --> 00:13:48,700 report. This Wednesday. 296 00:13:48,800 --> 00:13:51,500 That's an important day. If it's in the green, if the 297 00:13:51,508 --> 00:13:55,000 company is profitable and it has another profitable quarter, it 298 00:13:55,000 --> 00:13:56,300 could mean a lot for the company. 299 00:13:56,500 --> 00:13:59,700 The people that are Advocates of it that are behind this company 300 00:13:59,700 --> 00:14:02,500 are going to be very excited. I could see the share price race 301 00:14:02,500 --> 00:14:05,600 up even more and it could get up to two thousand dollars a share 302 00:14:05,600 --> 00:14:07,600 with how quickly this company moves. 303 00:14:07,600 --> 00:14:09,600 I could see that happening. So there's a lot of 304 00:14:09,600 --> 00:14:13,100 make-or-break with this company. What I wanted to do was just 305 00:14:13,100 --> 00:14:16,700 highlight how consistently wrong analysts and people have been 306 00:14:16,700 --> 00:14:19,000 around Tesla in the previous episode. 307 00:14:19,000 --> 00:14:22,000 I shared a clip from someone named as W Amador in this is a 308 00:14:22,000 --> 00:14:24,300 valuation expert. This is what he does is he 309 00:14:24,300 --> 00:14:27,300 values companies and in this clip he talks about how he 310 00:14:27,300 --> 00:14:30,400 wouldn't buy Tesla at fifteen hundred dollars a share. 311 00:14:30,500 --> 00:14:35,200 I'll play the quick. /. I would not buy Tesla at at 1400 312 00:14:35,200 --> 00:14:39,100 1450 wherever its trading. It's like a moving Target, but I 313 00:14:39,100 --> 00:14:41,900 would not call somebody advice test like crazy. 314 00:14:42,300 --> 00:14:44,500 He says that he wouldn't buy it at fifteen hundred dollars a 315 00:14:44,508 --> 00:14:46,900 share, but he wouldn't say the people that are buying are 316 00:14:46,900 --> 00:14:49,000 crazy. He just doesn't buy into the 317 00:14:49,000 --> 00:14:52,200 narrative at esli. He doesn't think the story has a 318 00:14:52,200 --> 00:14:55,300 really solid chance of playing out the way people expect. 319 00:14:55,300 --> 00:14:57,300 Now. He says that he wouldn't buy at 320 00:14:57,300 --> 00:15:00,600 fifteen hundred dollars a share, but let's rewind a little bit 321 00:15:00,600 --> 00:15:02,700 and look at his thoughts on Tesla at the beginning of the 322 00:15:02,700 --> 00:15:03,200 year. Here. 323 00:15:03,200 --> 00:15:05,500 He is. February 13th of 2020. 324 00:15:05,700 --> 00:15:09,500 We have Tesla brought up again. And as with gives his current 325 00:15:09,500 --> 00:15:12,800 thoughts on the valuation of Tesla, which at the time, the 326 00:15:12,800 --> 00:15:15,500 share price was 781 dollars. A share. 327 00:15:15,600 --> 00:15:18,300 So roughly half of what it currently trades at, listen to 328 00:15:18,300 --> 00:15:20,000 his thoughts. And keep in mind. 329 00:15:20,000 --> 00:15:21,500 This is half. The current price. 330 00:15:21,500 --> 00:15:25,400 Tesla currently trades at that said, though, for this dog to 331 00:15:25,400 --> 00:15:27,600 justify the price. You need to tell a really, 332 00:15:27,600 --> 00:15:30,000 really big story. The way I've described it is, 333 00:15:30,000 --> 00:15:33,400 you need to give it Volkswagen. Revenue 300 billion about 10 334 00:15:33,400 --> 00:15:34,900 years. You need to give it margins like 335 00:15:34,900 --> 00:15:38,000 apple and you need to have a company that invests like no 336 00:15:38,000 --> 00:15:40,000 other manufacturing company has before. 337 00:15:40,400 --> 00:15:44,000 He says that the story is possible but implausible that 338 00:15:44,000 --> 00:15:46,900 they would need the revenue of Volkswagen and the margins of 339 00:15:46,900 --> 00:15:50,800 Apple that was early this year. So this wasn't too long ago. 340 00:15:51,000 --> 00:15:53,000 When Tesla was seven hundred eighty one dollars a share. 341 00:15:53,400 --> 00:15:55,100 Now. Let's go back, even further. 342 00:15:55,300 --> 00:15:57,900 Let's go all the way back to 2017. 343 00:15:57,900 --> 00:16:01,400 This is May 5th of 2017. This is as W, giving. 344 00:16:01,600 --> 00:16:04,100 His opinion on the valuation of Tesla during that time. 345 00:16:04,200 --> 00:16:06,400 And whether he would buy the stock, let's listen to this 346 00:16:06,400 --> 00:16:08,100 audio. There's a value game and I'm 347 00:16:08,108 --> 00:16:12,200 going to surprise you while I wouldn't buy Tesla at 295 at 348 00:16:12,200 --> 00:16:14,800 300. There are plausible ways of 349 00:16:14,800 --> 00:16:16,700 getting there. I mean, it's not a slam dunk 350 00:16:16,700 --> 00:16:19,600 over valuation from that perspective but to get there 351 00:16:19,600 --> 00:16:22,200 it's going to take some work. I mean, here's what they have to 352 00:16:22,200 --> 00:16:23,200 do. They have to deliver about a 353 00:16:23,200 --> 00:16:25,800 hundred billion dollars in revenues in a decade. 354 00:16:26,200 --> 00:16:28,900 They've got to be able to do that while delivering tech 355 00:16:28,900 --> 00:16:31,500 company margins and investing like a tech company. 356 00:16:32,100 --> 00:16:34,500 Can they pull it off? Well, some people seem to 357 00:16:34,500 --> 00:16:37,500 believe they can. I am skeptical, but I think 358 00:16:37,500 --> 00:16:40,100 there is a way to get to that that valuation. 359 00:16:40,500 --> 00:16:44,900 So even back in 2017 as with was basically saying the same thing 360 00:16:45,000 --> 00:16:47,700 that Tesla had to have all of these remarkable things happen 361 00:16:48,000 --> 00:16:51,600 in order to justify its value. And that's when it was currently 362 00:16:51,600 --> 00:16:53,400 two hundred ninety, six dollars a share. 363 00:16:53,700 --> 00:16:55,800 That'd be a complete still right now with it being fifteen, 364 00:16:55,800 --> 00:16:57,200 hundred dollars a share. Now. 365 00:16:57,200 --> 00:16:59,500 The reason that I bring this up is not to pick on as with 366 00:16:59,700 --> 00:17:02,300 there's plenty of people like him that are Smart people that 367 00:17:02,300 --> 00:17:05,200 have been skeptical of Tesla over the past couple years. 368 00:17:05,599 --> 00:17:09,400 What I want to point out is that Tesla has consistently proven 369 00:17:09,400 --> 00:17:11,300 people wrong. This is a stock that people have 370 00:17:11,300 --> 00:17:14,900 been skeptical of and it's just continued to perform really 371 00:17:14,900 --> 00:17:16,500 well. So, I hope that continues. 372 00:17:16,800 --> 00:17:19,099 I don't own the stock, but I hope it the best. 373 00:17:19,099 --> 00:17:22,099 I hope this Wednesday that they blow away their earnings report 374 00:17:22,099 --> 00:17:23,700 and the stock goes up to two thousand dollars. 375 00:17:23,700 --> 00:17:25,599 It would be pretty incredible to see. 376 00:17:25,900 --> 00:17:27,300 Okay. Let's get into some emails and 377 00:17:27,300 --> 00:17:30,300 Joseph at Joseph Carlson show.com., That's the email 378 00:17:30,300 --> 00:17:33,500 address Joseph. At Joseph, Carlson show.com. 379 00:17:33,800 --> 00:17:36,000 If you want to email in and ask different questions or bring up 380 00:17:36,000 --> 00:17:38,700 different subjects or stocks will talk about it here. 381 00:17:38,700 --> 00:17:40,100 Now. The first one is from Jack. 382 00:17:40,400 --> 00:17:44,300 He writes in with the subject line, the insane valuation of 383 00:17:44,300 --> 00:17:46,500 apple. He says, in your last episode 384 00:17:46,500 --> 00:17:49,400 episode 103 you stated. The Apple was worth one point. 385 00:17:49,400 --> 00:17:52,300 Seven trillion dollar market cap because it is not only a 386 00:17:52,300 --> 00:17:54,700 hardware company. It is a Healthcare Company. 387 00:17:55,100 --> 00:17:57,900 It is a finance company. It's a movie production company. 388 00:17:57,900 --> 00:18:00,300 It's a wearables and activewear company and it's a phone 389 00:18:00,300 --> 00:18:02,000 company. That's correct. 390 00:18:02,000 --> 00:18:05,600 That's part of my argument for apple, is that I see them as 391 00:18:05,600 --> 00:18:07,500 somewhat of a Healthcare Company because they have the Apple 392 00:18:07,500 --> 00:18:09,400 watch. They monitor your health, a lot 393 00:18:09,400 --> 00:18:12,400 of people justify, buying the Apple watch specifically for 394 00:18:12,400 --> 00:18:14,100 their health. They're going to be doing sleep 395 00:18:14,100 --> 00:18:16,400 tracking and different things like that, that I think people 396 00:18:16,400 --> 00:18:19,100 will really value. They also are a finance company 397 00:18:19,100 --> 00:18:20,800 because they're going into online payments. 398 00:18:21,200 --> 00:18:23,800 They have the Apple card, you know, there are movie production 399 00:18:23,800 --> 00:18:26,700 company because they have Apple TV, plus their wearables and 400 00:18:26,700 --> 00:18:29,500 activewear company because they have the are pods and the Apple 401 00:18:29,500 --> 00:18:31,100 watch. And of course, there are phone 402 00:18:31,100 --> 00:18:33,100 company. So that was my main argument. 403 00:18:33,100 --> 00:18:35,600 I'm saying apples more than just a phone company. 404 00:18:35,900 --> 00:18:37,700 They control a lot of different segments. 405 00:18:37,700 --> 00:18:41,300 Now it goes on with this email and he says the market cap of 406 00:18:41,300 --> 00:18:43,900 the top companies in each of these industries. 407 00:18:44,100 --> 00:18:46,900 So he takes the biggest company in each of the industries. 408 00:18:46,900 --> 00:18:49,900 I listed and lists off their market cap. 409 00:18:50,200 --> 00:18:52,700 Intel has a point to four trillion dollar market. 410 00:18:52,700 --> 00:18:56,800 Cap. J&J has a .38, JPMorgan has a 411 00:18:56,800 --> 00:19:00,300 point two nine. Disney has a point to Spotify 412 00:19:00,300 --> 00:19:04,400 has a point zero. 05 Lululemon has a point zero four and 413 00:19:04,400 --> 00:19:07,800 Samsung has a point three and he says, so if Apple was a 414 00:19:07,808 --> 00:19:10,900 conglomerate made up of all the leaders in each of these spaces, 415 00:19:10,900 --> 00:19:13,100 you defined by combined Book value. 416 00:19:13,100 --> 00:19:16,300 It would be only worth 1 Point 5 3 trillion dollars. 417 00:19:16,500 --> 00:19:19,600 He says, what's even more absurd about this valuation is when you 418 00:19:19,600 --> 00:19:24,800 compare post tax profits of this year, 2019 with apples post, tax 419 00:19:24,800 --> 00:19:27,600 profits of the same year, which was 55 billion. 420 00:19:28,000 --> 00:19:31,200 The post tax profits of the companies was until was 21 421 00:19:31,200 --> 00:19:33,400 billion. J&J was sixteen billion. 422 00:19:33,800 --> 00:19:36,800 JP Morgan was 36 billion. Disney was seven billion. 423 00:19:37,100 --> 00:19:41,800 Spotify was .15, Lululemon was point 64 and he doesn't have any 424 00:19:41,800 --> 00:19:45,100 data for Samsung. He says so let's say you have 425 00:19:45,100 --> 00:19:47,800 one point seven trillion dollars laying around and you wanted to 426 00:19:47,808 --> 00:19:51,300 buy either apple or these seven separate companies. 427 00:19:51,600 --> 00:19:54,300 You would earn fifty five billion a year by buying apple 428 00:19:54,600 --> 00:19:57,500 and you would earn over a billion dollars a year by buying 429 00:19:57,600 --> 00:20:00,300 the seven companies with Samsung making no money. 430 00:20:00,500 --> 00:20:02,700 It says sorry I couldn't. Find the data for Samsung. 431 00:20:03,200 --> 00:20:04,900 My question. How in the name of God? 432 00:20:04,900 --> 00:20:08,000 Satan and Zeus everything. That is Holy Unholy and in 433 00:20:08,008 --> 00:20:09,900 between. Can you justify the valuation of 434 00:20:09,900 --> 00:20:12,700 Apple at one point seven trillion dollars, sincerely in 435 00:20:12,700 --> 00:20:16,300 the name of your loyal fan Jack. Well Jack, this is a good email. 436 00:20:16,300 --> 00:20:18,900 So I appreciate you writing in and I appreciate you being a 437 00:20:18,908 --> 00:20:20,400 loyal fan. So I'll try to give you a good 438 00:20:20,400 --> 00:20:23,500 answer. Basically, when I compare Apple 439 00:20:23,500 --> 00:20:27,000 to the different companies, you listed off like Intel and J&J 440 00:20:27,000 --> 00:20:29,400 and JP Morgan. I think that those are all great 441 00:20:29,400 --> 00:20:32,000 companies, but I don't think that they have the Team moat 442 00:20:32,000 --> 00:20:35,900 that Apple has Apple has this enormous moat a lot of people 443 00:20:35,900 --> 00:20:39,100 that I know their decision when they're buying a new phone is 444 00:20:39,100 --> 00:20:41,700 not what new phone. Am I going to get? 445 00:20:41,900 --> 00:20:45,100 That's not their decision. Their decision is what new 446 00:20:45,100 --> 00:20:48,400 iPhone am I going to get? That's really their question is 447 00:20:48,400 --> 00:20:51,400 what new iPhone am I going to buy most of the people that I 448 00:20:51,400 --> 00:20:55,400 know that own an iPhone have literally zero interest in 449 00:20:55,400 --> 00:20:58,000 moving over to Android no interest at all. 450 00:20:58,200 --> 00:21:00,800 Android could come out with almost anything and they will 451 00:21:00,800 --> 00:21:04,000 stay with the eye. IPhone, because the iPhones been 452 00:21:04,000 --> 00:21:06,300 consistent. They already have the ecosystem. 453 00:21:06,300 --> 00:21:08,500 They have the apps. They're familiar with the tools. 454 00:21:08,500 --> 00:21:11,300 They like the customer support. They like everything about it. 455 00:21:11,400 --> 00:21:14,300 So they end up staying and iPhone can just continue to 456 00:21:14,300 --> 00:21:17,200 iterate a little bit of a better version with a better camera 457 00:21:17,600 --> 00:21:20,600 with a better screen and so on and people continue to buy them. 458 00:21:20,700 --> 00:21:23,000 So I think that's a big part of it. 459 00:21:23,100 --> 00:21:26,900 Is Apple has this enormous brand loyalty that keeps people in its 460 00:21:26,900 --> 00:21:30,400 ecosystem. Compare that to Intel this Intel 461 00:21:30,400 --> 00:21:33,900 have this enormous. Note this enormous fan loyalty 462 00:21:33,900 --> 00:21:36,200 of their products. I don't think so. 463 00:21:36,200 --> 00:21:39,300 There might be some tech junkies that really like Intel for some 464 00:21:39,300 --> 00:21:42,200 reason but I think for the most part people, just buy whatever 465 00:21:42,200 --> 00:21:45,800 processor is the best. So I don't think Intel has 466 00:21:45,800 --> 00:21:48,600 nearly the same type of loyalty or moat that Apple does. 467 00:21:49,000 --> 00:21:51,500 And you could say the same for Jay and Jay, Jay Jay is a great 468 00:21:51,500 --> 00:21:53,900 company. I have it in my portfolio, but I 469 00:21:53,900 --> 00:21:58,100 don't see anybody saying I have to by J&J health care products 470 00:21:58,300 --> 00:22:01,500 and nothing else. They have some brand loyalty. 471 00:22:01,600 --> 00:22:04,200 They have some brand awareness, but I don't see everybody's 472 00:22:04,200 --> 00:22:06,100 saying they only need J&J products. 473 00:22:06,100 --> 00:22:08,600 They don't get wrapped into an ecosystem of J&J. 474 00:22:09,100 --> 00:22:11,900 The same thing for JPMorgan. It's a great bank. 475 00:22:12,000 --> 00:22:14,100 It's well Diversified. As a lot of different parts to 476 00:22:14,100 --> 00:22:16,700 it, that make money is definitely not going to be 477 00:22:16,700 --> 00:22:19,600 making 36 billion dollars over the next year. 478 00:22:19,900 --> 00:22:22,700 That was 2019. Just their quarterly earnings 479 00:22:22,700 --> 00:22:26,200 was cut in half. So, the volatility of banks is a 480 00:22:26,208 --> 00:22:29,200 lot more than Apple, but even so if they did make 36 billion 481 00:22:29,200 --> 00:22:32,000 dollars, JP Morgan, I still don't think has the same type of 482 00:22:32,000 --> 00:22:34,600 Customer Loyalty that Apple has. There's not as many people. 483 00:22:34,600 --> 00:22:38,800 I see that say they just love JPMorgan and they have to have 484 00:22:38,800 --> 00:22:40,300 every product they come out with. 485 00:22:40,900 --> 00:22:43,400 I don't see that at all and I see that all the time with 486 00:22:43,400 --> 00:22:46,100 Apple. So again, huge differences there 487 00:22:46,500 --> 00:22:48,500 with Disney. This is one company where I 488 00:22:48,500 --> 00:22:51,400 actually do, see the same level of brand loyalty as Apple. 489 00:22:51,700 --> 00:22:54,100 There are a lot of people that have to see everything that 490 00:22:54,100 --> 00:22:56,600 Disney comes out with. So I think that is one where 491 00:22:56,600 --> 00:22:59,600 they have comparable brand loyalty, but Disney's operating, 492 00:22:59,700 --> 00:23:01,500 A business right now. That's really struggling. 493 00:23:01,500 --> 00:23:04,000 So, that companies going through a lot Spotify. 494 00:23:04,000 --> 00:23:05,900 I think, is a good comparison to Apple music. 495 00:23:06,100 --> 00:23:10,200 I think Spotify is worth more than the Apple music segment of 496 00:23:10,200 --> 00:23:12,100 their business. So that's what I think is a fair 497 00:23:12,100 --> 00:23:15,200 comparison Lululemon. I don't even think is closed. 498 00:23:15,500 --> 00:23:18,600 That's an active wear company but apples making watches in are 499 00:23:18,600 --> 00:23:21,500 pods, which I don't really see comparable to Lululemon. 500 00:23:21,700 --> 00:23:24,400 So to answer your main question, if I had one point seven 501 00:23:24,400 --> 00:23:27,100 trillion dollars just laying around and I wanted to buy 502 00:23:27,100 --> 00:23:29,600 either apple or all these individual companies. 503 00:23:29,800 --> 00:23:32,800 What would I buy? That would really be a difficult 504 00:23:32,800 --> 00:23:33,800 question? I don't know. 505 00:23:33,800 --> 00:23:35,100 What I would do in that situation. 506 00:23:35,500 --> 00:23:37,100 I might want to own Apple though. 507 00:23:37,300 --> 00:23:39,800 I just think that it has an enormous amount more so than 508 00:23:39,800 --> 00:23:43,800 companies like like JPM or J&J or Intel. 509 00:23:43,900 --> 00:23:46,100 I think apple has a better moment than those companies. 510 00:23:46,400 --> 00:23:49,100 It still makes a lot of money. 55 billion dollars is a lot of 511 00:23:49,100 --> 00:23:52,400 money and it has 200 billion dollars in cash. 512 00:23:52,600 --> 00:23:55,100 It's in Tech, which is a good sector to be in right now. 513 00:23:55,500 --> 00:23:58,400 So I would feel fine owning Apple, but I'm glad I don't have 514 00:23:58,400 --> 00:24:00,500 to be in that situation. That'd be a tough choice. 515 00:24:00,700 --> 00:24:02,500 I think diversification is a good thing. 516 00:24:02,700 --> 00:24:04,600 I do. Hold a lot of these companies. 517 00:24:04,700 --> 00:24:07,700 I hold J&J. I hold JP Morgan and I hold 518 00:24:07,700 --> 00:24:09,100 Disney. So I like being able to have my 519 00:24:09,100 --> 00:24:12,500 exposure to all these companies and not have all my wealth in 520 00:24:12,500 --> 00:24:14,800 one place. Jeremy says, hi Joseph. 521 00:24:14,800 --> 00:24:16,800 I really love your show and the work that you do. 522 00:24:17,000 --> 00:24:19,500 I was surprised to hear that you work in software development. 523 00:24:19,500 --> 00:24:22,900 I recently graduated at 31 with my degree in computer, science 524 00:24:23,100 --> 00:24:25,300 after working as an electrician for a few years. 525 00:24:25,700 --> 00:24:29,200 Congratulations on graduating. Since firstly, my wife and I 526 00:24:29,200 --> 00:24:32,100 have Recently started investing in M1 and following the same 527 00:24:32,100 --> 00:24:34,000 style of investment strategy that you espouse. 528 00:24:34,300 --> 00:24:37,700 We are both in our early 30s and I find it kind of frustrating to 529 00:24:37,700 --> 00:24:41,100 know that none or very little of this information that you and 530 00:24:41,100 --> 00:24:44,500 others provide online isn't part of the standard education. 531 00:24:44,500 --> 00:24:48,400 Curriculum and the public school system that makes you and me 532 00:24:48,400 --> 00:24:51,700 both Jeremy. He says we routinely talk about 533 00:24:51,700 --> 00:24:54,200 how much better off our finances would be right now. 534 00:24:54,300 --> 00:24:57,600 Had there been mandatory classes in high school specifically 535 00:24:57,600 --> 00:25:01,100 geared towards personal finance. We live in a capitalist Society. 536 00:25:01,300 --> 00:25:04,600 So to us, it stands to reason that the public education system 537 00:25:05,000 --> 00:25:07,800 in that Society should teach the basics of how to operate 538 00:25:07,800 --> 00:25:10,800 financially within the confines of such a society. 539 00:25:11,200 --> 00:25:13,100 I'd be curious to hear your thoughts on this idea. 540 00:25:13,400 --> 00:25:15,000 Secondly, in your previous episode. 541 00:25:15,000 --> 00:25:16,900 You mentioned. That apple is transitioning from 542 00:25:16,900 --> 00:25:19,200 being a hardware company to being a software company. 543 00:25:19,500 --> 00:25:21,800 The my eyes, they aren't transitioning at all. 544 00:25:22,100 --> 00:25:24,200 Given the fact that they just announced that they're moving 545 00:25:24,400 --> 00:25:27,500 all of their Max to their own silicone over the next two 546 00:25:27,500 --> 00:25:30,200 years, which will mean, almost all their Hardware is 547 00:25:30,200 --> 00:25:34,200 specifically designed by them. I'm not sure that's a signal 548 00:25:34,200 --> 00:25:35,700 that they're transitioning to software. 549 00:25:36,000 --> 00:25:37,300 Did you mean that they're transitioning? 550 00:25:37,300 --> 00:25:39,400 Their largest source of income towards software? 551 00:25:39,700 --> 00:25:41,800 Can you explain? And clarify this point? 552 00:25:41,900 --> 00:25:45,800 Well Jeremy as far as your first point goes, I agree 100%, It is 553 00:25:45,800 --> 00:25:47,600 frustrating. If you look back and you didn't 554 00:25:47,600 --> 00:25:50,200 have the proper knowledge and you make huge mistakes because 555 00:25:50,200 --> 00:25:51,900 of that. And you talk about the public 556 00:25:51,900 --> 00:25:54,200 school system, not teaching enough about Finance. 557 00:25:54,900 --> 00:25:58,800 Think about people as well, many times the cases is that kids 558 00:25:58,800 --> 00:26:01,200 that are 18 years old. Old, they go to college, they 559 00:26:01,200 --> 00:26:04,100 take out the biggest loans, they can because they have no concept 560 00:26:04,100 --> 00:26:06,600 of high interest loans. They have no concept of 561 00:26:06,600 --> 00:26:08,900 compounding interest. So they take out these 562 00:26:08,900 --> 00:26:11,900 high-interest loans from banks that give them the money. 563 00:26:12,200 --> 00:26:14,700 They don't do any verification, what they're actually studying 564 00:26:14,700 --> 00:26:18,100 is going to make any money. So in many cases, these students 565 00:26:18,400 --> 00:26:21,400 have a huge amount of debt that they can't bankrupt out of them. 566 00:26:21,600 --> 00:26:24,900 And then they go to school and they get a job, that makes an 567 00:26:24,900 --> 00:26:27,400 okay wage, not really enough to pay back their loan. 568 00:26:27,600 --> 00:26:30,700 They had no concept of how Called it was going to be to pay 569 00:26:30,700 --> 00:26:32,600 back. They have no concept of 570 00:26:32,600 --> 00:26:35,300 compounding interest. None of this was taught. 571 00:26:35,300 --> 00:26:38,100 So I feel like we're setting up a lot of people for failure. 572 00:26:38,300 --> 00:26:40,800 Letting them go into college taking out, huge amounts of 573 00:26:40,808 --> 00:26:43,100 debt, that they're going to be strapped with for the next 10 574 00:26:43,100 --> 00:26:44,700 years. So there's a lot of things I 575 00:26:44,708 --> 00:26:46,800 would change. I would teach a lot more Finance 576 00:26:46,800 --> 00:26:49,900 in high school to prepare people for college to say. 577 00:26:49,900 --> 00:26:53,100 Hey, as you're going to college, take out, a modest amount of 578 00:26:53,100 --> 00:26:56,200 debt only take out a lot of debt if you're going into extremely 579 00:26:56,200 --> 00:26:59,400 high paying Fields. So yeah, there's a lot of things 580 00:26:59,400 --> 00:27:00,400 out. Change with that. 581 00:27:00,400 --> 00:27:02,700 Now, as far as your second question, you say that you don't 582 00:27:02,700 --> 00:27:05,400 think that apple is transitioning to software and 583 00:27:05,400 --> 00:27:09,100 services because they decided to make their own silicone. 584 00:27:10,000 --> 00:27:11,900 I don't think that that's a big deal. 585 00:27:11,900 --> 00:27:14,700 I think apples doing what they have done previously, which is 586 00:27:14,700 --> 00:27:17,200 they're going to design this and they're going to push the market 587 00:27:17,200 --> 00:27:18,800 to use it. The same type of thing. 588 00:27:18,800 --> 00:27:21,400 When they decided they're not going to use Adobe Flash. 589 00:27:21,900 --> 00:27:23,400 They just said they're not going to do that. 590 00:27:23,400 --> 00:27:25,400 And the rest of the market adapted around them. 591 00:27:25,600 --> 00:27:28,400 This is the power of Apple. They can decide to do something 592 00:27:28,400 --> 00:27:30,800 and the rest of the market. We'll work around it. 593 00:27:30,900 --> 00:27:33,700 They will migrate over to whatever Apple decides to do. 594 00:27:33,700 --> 00:27:35,400 So that's what they've done before. 595 00:27:35,600 --> 00:27:36,700 I think they're doing the same thing. 596 00:27:36,700 --> 00:27:38,400 Now. I actually think this is a good 597 00:27:38,400 --> 00:27:40,700 thing for Apple. They don't have to rely on until 598 00:27:41,300 --> 00:27:42,900 they can do all of this in house. 599 00:27:42,900 --> 00:27:46,100 They don't have to rely on Intel for deadlines or anything or for 600 00:27:46,100 --> 00:27:48,100 Innovation. They can do all of it 601 00:27:48,100 --> 00:27:50,200 themselves. So I think this will make it a 602 00:27:50,208 --> 00:27:51,600 little bit more controlled for them. 603 00:27:51,800 --> 00:27:53,600 They're really good at designing Hardware. 604 00:27:53,600 --> 00:27:57,300 So I don't think it will be any different for this and as far as 605 00:27:57,400 --> 00:28:00,300 the growth of their software and services, This is what I'm 606 00:28:00,300 --> 00:28:05,300 talking about and 2014, Apple had 4.4 billion dollars in 607 00:28:05,300 --> 00:28:08,600 quarterly revenue from their services in 2019. 608 00:28:08,600 --> 00:28:10,900 They had thirteen point three five billion. 609 00:28:11,000 --> 00:28:13,300 So they've been growing this overtime at a pretty good Pace. 610 00:28:13,300 --> 00:28:16,400 They've been growing their services at about 13 percent 611 00:28:16,400 --> 00:28:18,500 year over year. So I think it will become a 612 00:28:18,508 --> 00:28:20,800 bigger and bigger portion of their company. 613 00:28:21,300 --> 00:28:22,500 Okay. Well, I'm going to go ahead and 614 00:28:22,500 --> 00:28:24,700 end this episode there. I appreciate all of you for 615 00:28:24,700 --> 00:28:26,900 listening for sharing the channel, thumbs up, and the 616 00:28:26,900 --> 00:28:29,500 videos and subscribing. All of that good stuff. 617 00:28:29,900 --> 00:28:31,900 Thanks for everybody. That does that if you want to 618 00:28:31,900 --> 00:28:34,800 chat between now and the next episode, I'm on the Discord 619 00:28:34,800 --> 00:28:36,800 basically every day. So you can check that out. 620 00:28:36,800 --> 00:28:38,100 There's a link in the description. 621 00:28:38,600 --> 00:28:40,500 Otherwise, I will see you guys next time.