1 00:00:00,080 --> 00:00:02,080 Welcome back, everyone. Today on the Joseph Carlson 2 00:00:02,080 --> 00:00:05,920 show, inflation falls to 3%. This is more than expected. 3 00:00:05,920 --> 00:00:08,360 The stock market knows that and it's rallying today. 4 00:00:08,360 --> 00:00:10,920 Lots of companies are rocketing to the green and we have the 5 00:00:10,920 --> 00:00:14,480 major indices up 1% today despite the markets rally this 6 00:00:14,480 --> 00:00:15,800 year. So we're going to be going over 7 00:00:15,800 --> 00:00:18,480 this inflation report, what's going down in price, what's 8 00:00:18,480 --> 00:00:21,760 going up in price and overall what this means for our 9 00:00:21,760 --> 00:00:24,920 portfolios and the economy. But we also have some other news 10 00:00:24,920 --> 00:00:28,560 to get to some other big news. We have Microsoft yesterday. 11 00:00:28,920 --> 00:00:34,080 Winning their battle against the FTC, this was a landmark victory 12 00:00:34,200 --> 00:00:37,680 where the judge ruled that they can close their deal of the 13 00:00:37,720 --> 00:00:40,920 Activision Blizzard deal. This isn't the only hurdle they 14 00:00:40,920 --> 00:00:43,680 have to get over, this is the US and they still have other 15 00:00:43,680 --> 00:00:47,200 countries to deal with, but this is a massive victory for 16 00:00:47,200 --> 00:00:50,440 Microsoft and a massive victory for holders of Activision 17 00:00:50,440 --> 00:00:52,440 Blizzard stock. This also has broader 18 00:00:52,440 --> 00:00:55,950 implications. Lina Khan's FTC has not been 19 00:00:55,950 --> 00:00:58,230 successful. She has taken an ideological 20 00:00:58,230 --> 00:01:02,110 fight against big tech companies and judges are not agreeing with 21 00:01:02,110 --> 00:01:03,830 her. So we're going to see what this 22 00:01:03,830 --> 00:01:07,310 means not only for Microsoft, but for other bigger companies 23 00:01:07,310 --> 00:01:10,990 trying to do acquisitions. With Lina Khan leading the FTC 24 00:01:11,070 --> 00:01:14,270 now, we also have Terry Smith releasing an investor update. 25 00:01:14,510 --> 00:01:17,390 He has a letter where he goes over his performance, what he's 26 00:01:17,390 --> 00:01:19,390 sold, what he's bought, and the reasons why. 27 00:01:19,760 --> 00:01:22,160 We'll be going over what Terry Smith is thinking today. 28 00:01:22,200 --> 00:01:24,760 It's also Prime Day. We have some data and stats on 29 00:01:24,760 --> 00:01:26,680 Prime Day that I think are very fascinating. 30 00:01:27,040 --> 00:01:29,040 Some of these stats are very unexpected. 31 00:01:29,040 --> 00:01:32,440 So we'll be looking at how obsessed people are with 32 00:01:32,440 --> 00:01:34,560 Amazon's Prime Day. Now let's go ahead and jump 33 00:01:34,560 --> 00:01:37,160 right in. Obviously, it's a very exciting 34 00:01:37,160 --> 00:01:39,320 day. Portfolios are in the green. 35 00:01:39,320 --> 00:01:42,680 People who remained bullish and long and steady in the market 36 00:01:42,960 --> 00:01:46,720 are having a very fun time. Right now, My Portfolio is at 37 00:01:46,720 --> 00:01:50,160 all time highs. It's bouncing between 99,000 and 38 00:01:50,160 --> 00:01:53,440 100,000 and gains. We finally, for a moment in 39 00:01:53,440 --> 00:01:56,480 time, broke the 100,000 mark just this morning. 40 00:01:56,600 --> 00:01:58,240 But who knows where we'll end up today. 41 00:01:58,320 --> 00:02:01,080 The news that we've received is objectively good. 42 00:02:01,280 --> 00:02:04,600 Inflation is coming down at a pretty brisk pace. 43 00:02:04,880 --> 00:02:08,160 In fact, when we plot this out on a chart, really look at how 44 00:02:08,160 --> 00:02:10,800 fast it's coming down. This is what it looks like. 45 00:02:11,300 --> 00:02:13,660 It was a very, very steep incline. 46 00:02:13,780 --> 00:02:17,220 This got people extremely worried a year ago and for good 47 00:02:17,220 --> 00:02:20,100 reason. If inflation expectations get 48 00:02:20,140 --> 00:02:23,220 anchored, if people believe inflation is going to stay high 49 00:02:23,220 --> 00:02:27,060 forever, then they start to act as though inflation is going to 50 00:02:27,060 --> 00:02:30,180 be high forever and that is a self reinforcing concept. 51 00:02:30,420 --> 00:02:33,260 It becomes more difficult to break inflation, but the Fed 52 00:02:33,260 --> 00:02:35,940 have done a really good job of making it so inflation has not 53 00:02:35,940 --> 00:02:38,000 become anchored. It's actually fallen 54 00:02:38,000 --> 00:02:42,680 dramatically every single month. It continues to fall year over 55 00:02:42,680 --> 00:02:44,640 year. It falls at a very brisk pace. 56 00:02:45,080 --> 00:02:48,840 This is a comparison this month against the same time last year, 57 00:02:48,840 --> 00:02:51,880 which was almost at the peak. Now they say that inflation fell 58 00:02:51,880 --> 00:02:54,200 to its lowest annual rate in more than two years. 59 00:02:54,200 --> 00:02:57,640 During June, the consumer price index, which measures inflation, 60 00:02:57,920 --> 00:03:01,880 increased just 3% from a year ago, which is the lowest since 61 00:03:01,880 --> 00:03:05,730 March of 2021. On a monthly basis, the index, 62 00:03:05,850 --> 00:03:09,130 which measures a broad swath of pieces of goods and services, 63 00:03:09,290 --> 00:03:12,370 rose only .2%. And then we have the two 64 00:03:12,370 --> 00:03:15,370 different categories. We have all items in blue and 65 00:03:15,370 --> 00:03:18,690 then we have all items minus food and energy. 66 00:03:18,930 --> 00:03:21,930 When you strip away the more volatile stuff, food and energy, 67 00:03:21,930 --> 00:03:24,890 that fluctuates a lot more, then it looks even better. 68 00:03:25,130 --> 00:03:26,810 The picture is going in the right direction. 69 00:03:27,130 --> 00:03:29,610 That is the headline, 3% inflation. 70 00:03:29,690 --> 00:03:31,610 Now that's great. That inflation is coming down. 71 00:03:31,610 --> 00:03:34,170 I think that we can celebrate. That's good for the broader 72 00:03:34,170 --> 00:03:36,370 economy. But the question remains, why is 73 00:03:36,370 --> 00:03:39,410 that so good for stocks? Why do investors love this news 74 00:03:39,410 --> 00:03:42,290 and why do they push up stock prices so much whenever we get a 75 00:03:42,290 --> 00:03:45,410 report where inflation falls more than expected? 76 00:03:45,730 --> 00:03:49,530 Well, the simple equation here is that inflation being higher 77 00:03:49,770 --> 00:03:52,410 means that the Fed has to raise rates higher to combat 78 00:03:52,410 --> 00:03:55,170 inflation. And the interest rates are 79 00:03:55,170 --> 00:03:59,670 described by Warren Buffett. As being gravity on all other 80 00:03:59,670 --> 00:04:02,590 investments pushing down the value of everything else. 81 00:04:02,870 --> 00:04:05,750 This is what happens when interest rates go higher and the 82 00:04:05,750 --> 00:04:09,310 math simply works out this way. If we have a treasury yield a 83 00:04:09,310 --> 00:04:12,630 risk free rate of 1%, that is the equivalent of buying a 84 00:04:12,630 --> 00:04:16,430 company with APE of 100. But then if the treasury rate 85 00:04:16,430 --> 00:04:21,149 goes to 2.5%, that's like buying a company with APE of 40 when 86 00:04:21,149 --> 00:04:26,070 the treasury goes up to rates like it is right now, 4% or 5%. 87 00:04:26,440 --> 00:04:30,440 That's like buying a company with no risk and APE ratio of 88 00:04:30,440 --> 00:04:33,000 20. You're paying 20 times next 89 00:04:33,000 --> 00:04:37,120 year's earnings for that coupon. So as you can see, the dramatic 90 00:04:37,120 --> 00:04:40,120 rise in interest rates creates the dramatic rise in Treasury 91 00:04:40,120 --> 00:04:42,160 rates. The dramatic rise in Treasury 92 00:04:42,160 --> 00:04:45,040 rates makes it so that there's a reasonable alternative to 93 00:04:45,040 --> 00:04:47,320 stocks. The reasonable alternative to 94 00:04:47,320 --> 00:04:50,120 stocks means that stocks are not worth as much. 95 00:04:50,470 --> 00:04:52,790 When you can buy treasury rates that are yielding these 96 00:04:52,790 --> 00:04:55,510 percentages, you're getting a pretty good return without 97 00:04:55,510 --> 00:04:58,990 taking any real risk. And that's why it's gravity for 98 00:04:58,990 --> 00:05:02,190 everything else. So if this is the logic going 99 00:05:02,190 --> 00:05:05,870 up, if stocks become worth relatively less while interest 100 00:05:05,870 --> 00:05:09,030 rates are going up, the same logic follows when they go down. 101 00:05:09,030 --> 00:05:11,550 So there we have it. Inflation is coming down. the 102 00:05:11,550 --> 00:05:13,750 Fed has some room to breathe. They don't have to raise 103 00:05:13,750 --> 00:05:16,510 interest rates as much. In fact, they may start looking 104 00:05:16,510 --> 00:05:19,350 at lowering interest rates if inflation keeps going this 105 00:05:19,350 --> 00:05:21,690 direction. Investors are excited and 106 00:05:21,690 --> 00:05:23,930 they're celebrating because we're going back into an 107 00:05:23,930 --> 00:05:26,770 environment that's better for stocks and we should be seeing a 108 00:05:26,770 --> 00:05:30,370 lot of gains in our portfolio. When I look at My Portfolio now, 109 00:05:30,370 --> 00:05:33,370 I have some big gains even in newer companies. 110 00:05:33,370 --> 00:05:39,210 S&P Global's up $8700, Mastercard's now up 5500 into 111 00:05:39,210 --> 00:05:41,290 it, which is my most recent holding. 112 00:05:41,290 --> 00:05:42,810 I've just been adding to this one. 113 00:05:43,190 --> 00:05:46,990 Is now in the green by $3200. The ones that I've held longer 114 00:05:46,990 --> 00:05:50,350 are big winners. Now Microsoft is up $11,000, 115 00:05:50,350 --> 00:05:53,750 Apple's up $25,000. Viji's having a good day today, 116 00:05:53,750 --> 00:05:56,510 and overall I'm up $10,000 on this one in the restaurant 117 00:05:56,510 --> 00:05:58,430 category. Texas Roadhouse, one of my 118 00:05:58,430 --> 00:06:01,510 favorite companies here, has had an incredibly Goodyear. 119 00:06:01,510 --> 00:06:04,150 I'm up $13,000 on this company as well. 120 00:06:04,190 --> 00:06:08,950 Costco, one of my core consumer holdings here, is up $9700 and 121 00:06:08,950 --> 00:06:11,830 the industrials have finally worked their way out of the red 122 00:06:11,830 --> 00:06:14,600 this year. To be up just a couple $100. 123 00:06:14,840 --> 00:06:18,040 These ones are still 2 laggards in the portfolio. 124 00:06:18,200 --> 00:06:20,320 They've been trailing along, mostly trading flat. 125 00:06:20,360 --> 00:06:22,400 And if we look at the performance year to date, we're 126 00:06:22,400 --> 00:06:26,960 up 18.8%, which is a very strong total return so far this year. 127 00:06:27,400 --> 00:06:30,200 So I'm thrilled about the way things are going, but this 128 00:06:30,200 --> 00:06:33,240 doesn't make me complacent. It doesn't make me feel like the 129 00:06:33,240 --> 00:06:35,480 job is done and I can just rest here. 130 00:06:36,010 --> 00:06:39,290 As investors, I believe we have to have a certain mentality to 131 00:06:39,290 --> 00:06:41,530 be able to outperform the market, to be able to have 132 00:06:41,530 --> 00:06:44,490 continually strong performance. And while other investors become 133 00:06:44,490 --> 00:06:47,770 excited when the market goes up, they become sad and nervous when 134 00:06:47,770 --> 00:06:50,930 the market goes down, they become emotionally attached to 135 00:06:50,930 --> 00:06:53,010 stocks. We want to be the complete 136 00:06:53,010 --> 00:06:55,530 opposite. We don't have excitement when 137 00:06:55,530 --> 00:06:58,770 the market goes up. We don't become sad or nervous 138 00:06:58,850 --> 00:07:00,690 or depressed when the market goes down. 139 00:07:00,770 --> 00:07:03,610 And we need to be cold, calculated and systematic and 140 00:07:03,610 --> 00:07:07,250 tracking the fundamentals of the company, not becoming overly 141 00:07:07,250 --> 00:07:10,810 attached to the story of the company or exciting news, but 142 00:07:10,810 --> 00:07:13,490 tracking the fundamental intrinsic value drivers. 143 00:07:13,490 --> 00:07:16,170 So when I look at My Portfolio, that's continually what I'm 144 00:07:16,170 --> 00:07:17,930 doing. I'm keeping a level head. 145 00:07:18,240 --> 00:07:21,160 And although I think it's OK to become happy, you can enjoy your 146 00:07:21,160 --> 00:07:24,040 portfolio going up, it's incredibly important to remain 147 00:07:24,040 --> 00:07:27,320 rational, thoughtful and the valuations, the intrinsic value 148 00:07:27,320 --> 00:07:30,000 of the companies because investors time and time again 149 00:07:30,000 --> 00:07:32,480 tend to get lost in euphoria and optimism. 150 00:07:32,600 --> 00:07:35,000 So keep that in mind when you're looking at your portfolio. 151 00:07:35,000 --> 00:07:38,240 We're all susceptible to human biases and human errors of 152 00:07:38,240 --> 00:07:42,120 having FOMO, the fear of missing out, trying to race in and buy 153 00:07:42,120 --> 00:07:45,120 companies that just recently rallied, don't get caught up in 154 00:07:45,120 --> 00:07:47,210 it. When I look at My Portfolio, I'm 155 00:07:47,210 --> 00:07:50,650 actually holding a bit of cash and I'm saving more cash as time 156 00:07:50,650 --> 00:07:55,090 goes on because we have earnings season coming up and in my next 157 00:07:55,090 --> 00:07:58,130 episode I'm going to be going over my strategy of how I plan 158 00:07:58,130 --> 00:07:59,530 on going through earnings season. 159 00:07:59,570 --> 00:08:01,810 Now of course, whenever we have one of these big events, 160 00:08:01,810 --> 00:08:04,890 whenever we have inflation coming down big or a big CPI 161 00:08:04,890 --> 00:08:07,970 reading, we have the talking heads and pundits that go on to 162 00:08:07,970 --> 00:08:11,810 CNBC to give their take and their predictions of what's 163 00:08:11,810 --> 00:08:14,650 going to happen with inflation and. 164 00:08:15,070 --> 00:08:18,670 Typically, they they try to sound smart by being super 165 00:08:18,670 --> 00:08:21,230 negative all the time. This is one of them. 166 00:08:21,230 --> 00:08:24,590 His name's Mohammed El Erin. Here's what he said just this 167 00:08:24,590 --> 00:08:27,790 morning. I worry a little bit that people 168 00:08:27,790 --> 00:08:31,430 are jumping to the conclusion that goods disinflation will 169 00:08:31,470 --> 00:08:34,309 immediately translate into service disinflation. 170 00:08:34,590 --> 00:08:36,909 That's not where we what we're seeing in the rest of the world. 171 00:08:37,309 --> 00:08:39,510 So we just got to keep a really close eye on that. 172 00:08:39,669 --> 00:08:41,830 So we need to keep an eye on service inflation. 173 00:08:41,830 --> 00:08:43,309 It's not going to come down quickly. 174 00:08:43,659 --> 00:08:46,780 Then he goes on to say that the Fed has made a lot of mistakes 175 00:08:46,780 --> 00:08:49,660 over the past couple of years. You know, the Fed has made many 176 00:08:49,660 --> 00:08:52,460 mistakes on inflation in the last few years, and one of them 177 00:08:52,460 --> 00:08:54,820 has been not to look at enough scenarios. 178 00:08:55,060 --> 00:08:58,100 And we've got to keep our mindset open to various 179 00:08:58,100 --> 00:08:59,820 scenarios. There he is giving heed and 180 00:08:59,820 --> 00:09:03,420 caution, criticizing the Fed and saying that service inflation is 181 00:09:03,420 --> 00:09:04,980 not going to dissipate so quickly. 182 00:09:05,100 --> 00:09:07,300 Now the problem with these type of pundits that continually go 183 00:09:07,300 --> 00:09:10,260 on to CNBC whenever these type of big news events happen. 184 00:09:10,700 --> 00:09:14,140 Is they've proven time and time again that they have no credible 185 00:09:14,300 --> 00:09:19,100 ability to predict the future on a consistent or accurate basis. 186 00:09:19,380 --> 00:09:22,980 Here is the same Mohammed El Erin six months ago and this is 187 00:09:22,980 --> 00:09:27,260 when inflation was a lot higher. We're going back six months with 188 00:09:27,260 --> 00:09:29,260 this interview. Inflation is not going to come 189 00:09:29,260 --> 00:09:31,620 down in an oddly fashion. We're going to get sticky 190 00:09:31,620 --> 00:09:34,420 inflation. When we get to 4%, there's going 191 00:09:34,420 --> 00:09:37,280 to be a major. Decision to be made by society 192 00:09:37,280 --> 00:09:40,480 as to what to do next. He says completely confidently 193 00:09:40,480 --> 00:09:43,200 that inflation's not going to come down in an orderly fashion. 194 00:09:43,440 --> 00:09:46,240 And once we get to 4%, it's going to be sticky. 195 00:09:46,280 --> 00:09:50,000 And here we are with inflation at 3% and it went down past 4% 196 00:09:50,000 --> 00:09:52,520 with ease, almost a complete vertical drop. 197 00:09:52,520 --> 00:09:54,840 So when you're trying to listen to people predict the future 198 00:09:54,840 --> 00:09:58,440 with macroeconomic events that have thousands, even millions of 199 00:09:58,440 --> 00:10:01,800 variables that cannot be fully accounted for, just keep in mind 200 00:10:01,800 --> 00:10:03,600 that they're giving their thoughts, they're giving. 201 00:10:04,050 --> 00:10:06,450 Their ideas. But they have no way of knowing 202 00:10:06,450 --> 00:10:09,970 for certainty, and they often, frequently give the wrong 203 00:10:10,010 --> 00:10:13,010 predictions. I would not base any of my buys 204 00:10:13,010 --> 00:10:17,370 or sells in My Portfolio off of pundits like this on CNBC. 205 00:10:17,410 --> 00:10:20,610 Now moving on, we have some big news for both Microsoft and 206 00:10:20,610 --> 00:10:23,490 Activision Blizzard. We have big news for the entire 207 00:10:23,490 --> 00:10:26,970 gaming industry, for gamers themselves, and, I believe for 208 00:10:26,970 --> 00:10:29,850 people that just like courts to be accurate and give good 209 00:10:29,850 --> 00:10:32,460 judgments. The judge ruled that Microsoft 210 00:10:32,460 --> 00:10:36,300 can now close its $75 billion Activision Blizzard merger. 211 00:10:36,700 --> 00:10:40,100 This is a defeat for the FTC. They say that Microsoft can 212 00:10:40,100 --> 00:10:43,100 close the deal, a federal judge ruled Tuesday, delivering a 213 00:10:43,100 --> 00:10:46,820 major set back to the Biden administration's attempt to rein 214 00:10:46,820 --> 00:10:49,060 in big mergers. The deal would combine 215 00:10:49,060 --> 00:10:52,660 Microsoft's Xbox video gaming business with the publisher of 216 00:10:52,660 --> 00:10:56,100 popular franchises such as Call of Duty, World of Warcraft and 217 00:10:56,100 --> 00:10:58,350 Candy Crush. The ruling means that there is 218 00:10:58,350 --> 00:11:01,790 no current US obstacle to the two companies merging. 219 00:11:01,870 --> 00:11:03,630 Now that last sentence is important. 220 00:11:03,830 --> 00:11:08,070 The ruling means that there is no current US, US obstacle to 221 00:11:08,070 --> 00:11:10,430 closing the merger. The companies are still seeking 222 00:11:10,430 --> 00:11:13,910 the UK merger approval and it's not immediately clear whether or 223 00:11:13,910 --> 00:11:16,150 not the hold up there would delay closing. 224 00:11:16,190 --> 00:11:18,750 So right now the UK is really the only standout. 225 00:11:18,750 --> 00:11:21,550 They're the odd man out. With the US giving approval. 226 00:11:21,550 --> 00:11:26,070 This even puts more pressure on the UK to let this be approved 227 00:11:26,310 --> 00:11:27,720 and. They highlight the faults in the 228 00:11:27,720 --> 00:11:30,120 court case here. The FTC had not shown that 229 00:11:30,120 --> 00:11:33,000 Microsoft's ownership of Activision Blizzard games would 230 00:11:33,000 --> 00:11:36,760 hurt competition in the console or cloud gaming markets. 231 00:11:36,840 --> 00:11:39,640 To the contrary, the record evidence points to more 232 00:11:39,640 --> 00:11:43,120 consumers having access to Call of Duty and other Activision 233 00:11:43,120 --> 00:11:45,240 content. So the judge literally wrote 234 00:11:45,240 --> 00:11:49,720 that not only does this not hurt competition, but she agrees with 235 00:11:49,720 --> 00:11:51,480 Microsoft this helps competition. 236 00:11:51,560 --> 00:11:54,200 Now the FTC can appeal the ruling, but they're likely not 237 00:11:54,200 --> 00:11:57,710 going to do that. So this case as of right now is 238 00:11:57,710 --> 00:12:00,150 dead within the US. So what does this mean for 239 00:12:00,150 --> 00:12:03,150 investors in Microsoft and Activision Blizzard, and for us 240 00:12:03,150 --> 00:12:06,110 generally speaking in the case of Microsoft? 241 00:12:06,190 --> 00:12:09,470 As an investor in Microsoft and having this as one of my largest 242 00:12:09,470 --> 00:12:12,670 holdings in My Portfolio, I believe this is good news. 243 00:12:12,910 --> 00:12:16,470 Microsoft is struggling with their gaming division to have it 244 00:12:16,470 --> 00:12:20,270 be relevant, to have it stay as a major competitive threat. 245 00:12:20,810 --> 00:12:23,250 And they're struggling in that capacity because they so far 246 00:12:23,250 --> 00:12:25,730 have not done really well with mobile games. 247 00:12:25,770 --> 00:12:30,610 So Microsoft has been looking at bolstering their IP, buying more 248 00:12:30,610 --> 00:12:33,410 titles so that they can make the content more ubiquitous on 249 00:12:33,410 --> 00:12:35,650 different platforms. And they're especially looking 250 00:12:35,650 --> 00:12:38,370 for ways to get into mobile gaming, which is something that 251 00:12:38,370 --> 00:12:40,690 Activision Blizzard has access to. 252 00:12:40,690 --> 00:12:44,010 They do own mobile games, so this is a case of Microsoft 253 00:12:44,010 --> 00:12:47,730 rounding out their portfolio, building up an IP library of 254 00:12:47,730 --> 00:12:49,720 games. They can bolster their gaming 255 00:12:49,720 --> 00:12:51,600 division for years into the future. 256 00:12:51,960 --> 00:12:55,160 I view this very positively for Microsoft, even though they're 257 00:12:55,160 --> 00:12:58,200 paying $70 billion for the acquisition. 258 00:12:58,520 --> 00:13:01,000 We use Qualtrum here, which this website's available to all 259 00:13:01,000 --> 00:13:03,720 Patron members. We can take a look at what this 260 00:13:03,720 --> 00:13:05,640 really means for Microsoft's financials. 261 00:13:06,080 --> 00:13:10,280 First of all, right now Microsoft has cash of $56 262 00:13:10,440 --> 00:13:12,800 billion. That's a lot of money that's 263 00:13:12,800 --> 00:13:15,600 doing nothing, earning maybe 4 or 5%. 264 00:13:16,000 --> 00:13:19,120 Microsoft wants to look for ways to put that cash to work. 265 00:13:19,200 --> 00:13:22,720 Now if we do some quick math there and we minus the 70 from 266 00:13:22,720 --> 00:13:26,800 the 56 we get, let's take a look here, we get 14, I believe 267 00:13:26,800 --> 00:13:30,080 that's correct. So we have $14 billion left 268 00:13:30,080 --> 00:13:32,120 over. If they used all of their cash 269 00:13:32,120 --> 00:13:35,560 balance, now of course they're not going to use 100% of their 270 00:13:35,560 --> 00:13:37,480 cash balance. They'll probably take out some 271 00:13:37,480 --> 00:13:39,960 debt as well. But let's just assume that this 272 00:13:39,960 --> 00:13:42,760 simple math work, they have $14 billion that they have to make 273 00:13:42,760 --> 00:13:45,450 up for this. Assuming Microsoft has to take 274 00:13:45,450 --> 00:13:48,490 out some debt to make up for this acquisition, look at how 275 00:13:48,490 --> 00:13:50,730 fast they would be able to pay back that debt. 276 00:13:51,170 --> 00:13:57,050 Microsoft last year made cash flows free cash flows of $65 277 00:13:57,210 --> 00:14:01,930 billion, meaning that in 12 months they can almost pay for 278 00:14:01,930 --> 00:14:04,170 the entire company, Activision Blizzard. 279 00:14:04,520 --> 00:14:08,040 With just their free cash flow from that one year of cash 280 00:14:08,040 --> 00:14:11,440 flows, they bought a company that increases their cash flows 281 00:14:11,440 --> 00:14:14,080 significantly. Activision Blizzard has its 282 00:14:14,080 --> 00:14:16,040 problems. The company has internal 283 00:14:16,040 --> 00:14:17,680 problems. They have management problems. 284 00:14:17,720 --> 00:14:20,480 They have some culture problems as well, but those are things 285 00:14:20,480 --> 00:14:23,200 that are fixable. Microsoft will fix those issues. 286 00:14:23,200 --> 00:14:25,400 When we look at the cash flows that Activision Blizzard 287 00:14:25,400 --> 00:14:27,320 generates, they're very significant. 288 00:14:27,680 --> 00:14:30,760 They generated $2 billion in free cash flow last year, so 289 00:14:30,760 --> 00:14:34,200 Microsoft is paying $70 billion to bump up their free cash flows 290 00:14:34,200 --> 00:14:37,080 by $2 billion per year. But beyond just merging the 291 00:14:37,080 --> 00:14:39,920 financial economies of these companies, there's also 292 00:14:39,920 --> 00:14:43,680 significant strategic benefits to Microsoft in their cloud 293 00:14:43,680 --> 00:14:46,040 gaming and in their vast product offering. 294 00:14:46,120 --> 00:14:48,680 So I think this is both good news for Activision Blizzard 295 00:14:48,680 --> 00:14:51,920 investors and Microsoft investors if this deal goes 296 00:14:51,960 --> 00:14:54,000 through. Now, it's not a certainty yet, 297 00:14:54,000 --> 00:14:57,400 but it's looking very close now in terms of the arbitrage play 298 00:14:57,400 --> 00:14:59,960 for investors that are in Activision Blizzard right now, 299 00:15:00,280 --> 00:15:02,640 one of the most notable ones being Warren Buffett. 300 00:15:02,920 --> 00:15:06,000 In his portfolio, Activision Blizzard is one of the largest 301 00:15:06,000 --> 00:15:09,360 holdings at 1.3%. He bought a lot of the company 302 00:15:09,880 --> 00:15:14,200 because if you study Buffett's history, he has a very long. 303 00:15:14,640 --> 00:15:18,400 Good record of arbitrage play. That's something that he's done 304 00:15:18,600 --> 00:15:21,400 throughout his entire investing career, seeing little 305 00:15:21,400 --> 00:15:25,280 differences in prices of two companies being acquired, buying 306 00:15:25,280 --> 00:15:27,560 the one that's being acquired and making the difference. 307 00:15:27,840 --> 00:15:32,040 He really likes arbitrage plays, so he has a lot of experience 308 00:15:32,040 --> 00:15:34,800 doing this now. In my case, I've never done an 309 00:15:34,800 --> 00:15:37,320 arbitrage play before. I've looked at this one and I 310 00:15:37,320 --> 00:15:40,520 was incredibly close to buying into Activision Blizzard. 311 00:15:40,640 --> 00:15:42,280 I even came out with an episode saying. 312 00:15:42,640 --> 00:15:45,360 That I'm buying $15,000 of this company. 313 00:15:45,840 --> 00:15:47,920 I changed my mind. I went against it. 314 00:15:47,960 --> 00:15:51,800 And the reasons why is because one of the things I'm focusing 315 00:15:51,800 --> 00:15:55,600 on the most with My Portfolio is predictability. 316 00:15:55,720 --> 00:15:59,320 Judges are unpredictable. I never know what a judge is 317 00:15:59,320 --> 00:16:01,840 going to rule. Are they going to rule with 318 00:16:01,840 --> 00:16:04,600 logic and reason and the facts of the case? 319 00:16:05,090 --> 00:16:08,370 Or is a judge politically motivated or ideologically 320 00:16:08,370 --> 00:16:10,210 biased? For that reason, I stayed out of 321 00:16:10,210 --> 00:16:12,210 it. I missed out on maybe a 5 to 10% 322 00:16:12,210 --> 00:16:15,170 rally from hair, so there's some missed gains. 323 00:16:15,170 --> 00:16:18,210 But that comes with sticking to your plan, and I don't have any 324 00:16:18,210 --> 00:16:21,250 regrets by sticking to my plan. So what does this ruling mean 325 00:16:21,250 --> 00:16:23,610 for companies outside of Microsoft and Activision 326 00:16:23,610 --> 00:16:25,410 Blizzard? Well, the first thing I'll say 327 00:16:25,410 --> 00:16:28,730 here is I think this is a win for everyone because it's a good 328 00:16:28,730 --> 00:16:32,810 thing whenever a judge gives a ruling that's based on logic, 329 00:16:32,930 --> 00:16:36,630 the facts of the case. And the law, not a ruling based 330 00:16:36,630 --> 00:16:40,430 off of ideological motivation. And the problem with the FTC is 331 00:16:40,430 --> 00:16:43,710 having right now, the reason that they're losing cases like 332 00:16:43,710 --> 00:16:47,350 this and so many other cases is because of ideological 333 00:16:47,350 --> 00:16:50,390 motivation. It's become very clear over Lena 334 00:16:50,390 --> 00:16:53,310 Khan's history and her appointment to a position that 335 00:16:53,310 --> 00:16:56,230 she has something against big tech. 336 00:16:56,510 --> 00:16:58,910 She does not like Amazon. She does not like these 337 00:16:58,910 --> 00:17:01,830 companies being as big, as powerful as they are. 338 00:17:02,270 --> 00:17:05,470 And that's her motivation behind these type of rulings, to 339 00:17:05,470 --> 00:17:09,349 curtail and to prevent Big Tech from becoming more powerful. 340 00:17:09,750 --> 00:17:13,750 Although that might be a noble goal, there is nothing illegal 341 00:17:13,790 --> 00:17:16,310 about a company being big and powerful. 342 00:17:16,310 --> 00:17:18,750 What's not being presented here is how these companies are 343 00:17:18,750 --> 00:17:21,550 actually breaking the law with these antitrust cases. 344 00:17:21,910 --> 00:17:25,630 I believe one of the biggest winners from this court case are 345 00:17:25,630 --> 00:17:28,310 the companies that are constantly being targeted by 346 00:17:28,310 --> 00:17:32,160 Lena Khan and the FTC. Specifically, companies like 347 00:17:32,160 --> 00:17:35,040 Amazon. Amazon has been on her radar for 348 00:17:35,040 --> 00:17:38,080 years, ever since even college. She hasn't liked Amazon. 349 00:17:38,400 --> 00:17:41,840 This sets the president that the FTC is beatable, and I think it 350 00:17:41,840 --> 00:17:45,840 makes it unlikely for the FTC to keep pushing with these cases as 351 00:17:45,840 --> 00:17:48,760 they're getting knocked down. So my assessment when I look at 352 00:17:48,760 --> 00:17:52,080 this between this victory and Microsoft, I also consider it. 353 00:17:52,490 --> 00:17:55,130 A victory for other big tech companies like Amazon. 354 00:17:55,170 --> 00:17:57,010 Now we also have some exciting news here. 355 00:17:57,010 --> 00:17:59,290 We have a little update from Terry Smith. 356 00:17:59,330 --> 00:18:00,810 He's one of my favorite investors. 357 00:18:00,810 --> 00:18:03,890 I think that he's he's an interesting person to follow and 358 00:18:03,890 --> 00:18:05,650 to look at his investment philosophy. 359 00:18:05,930 --> 00:18:09,130 He's all about the three-step simplistic strategy of buying 360 00:18:09,130 --> 00:18:12,570 good companies, not overpaying for them and then holding them 361 00:18:12,610 --> 00:18:14,530 longterm. That's the goal. 362 00:18:14,530 --> 00:18:17,010 So he tries to accomplish those three simple steps. 363 00:18:17,290 --> 00:18:20,130 The strategy gets a lot more in depth, but that's the basis of 364 00:18:20,130 --> 00:18:22,430 it. And Terry Smith has outperformed 365 00:18:22,430 --> 00:18:26,070 the market for a great deal of time, but he's recently run into 366 00:18:26,070 --> 00:18:28,950 some issues. He's he's actually not doing too 367 00:18:28,950 --> 00:18:31,190 great this year. So I want to give an update on 368 00:18:31,190 --> 00:18:33,350 his performance and some of the trades that he's made. 369 00:18:33,430 --> 00:18:36,310 Now he provides a table here of performance that shows the first 370 00:18:36,310 --> 00:18:39,950 six months of performance from the Terry Smith portfolio and 371 00:18:39,950 --> 00:18:44,390 it's 8.5% which is underperforming the S&P 500 this 372 00:18:44,390 --> 00:18:47,400 year. Even the MSCI World Index, which 373 00:18:47,400 --> 00:18:52,360 is also not doing as well as the S&P 500, is only up 8.9%. 374 00:18:52,680 --> 00:18:54,680 So that's what he uses as a comparator. 375 00:18:54,880 --> 00:18:57,960 I use the S&P 500. I think the S&P 500 is more 376 00:18:57,960 --> 00:19:01,680 difficult to beat than the MSCI World Index, so I'm using a more 377 00:19:01,680 --> 00:19:05,040 difficult comparator. But either way, the returns here 378 00:19:05,040 --> 00:19:10,600 this year so far are not great. 8.5% is sizable under 379 00:19:10,600 --> 00:19:13,840 performance, but we can't judge Terry Smith just by a short 380 00:19:13,840 --> 00:19:16,530 period of time. Over a longer stretch of time, 381 00:19:16,530 --> 00:19:20,130 he has very strong performance, beating out most hedge funds, 382 00:19:20,290 --> 00:19:25,170 most super investors with an annualized return of 15.6% since 383 00:19:25,170 --> 00:19:29,130 inception of his fund. That is very strong performance. 384 00:19:29,370 --> 00:19:33,090 Performing over 15% for that long of a period of time is 385 00:19:33,090 --> 00:19:34,890 difficult for most investors to do. 386 00:19:35,350 --> 00:19:37,190 So we have to give credit where credit is due. 387 00:19:37,190 --> 00:19:40,110 He's been doing great so far, but he's running into a little 388 00:19:40,110 --> 00:19:42,270 bit of trouble this year. Now he goes over the companies 389 00:19:42,270 --> 00:19:45,270 that have helped the gains the most over the past six months, 390 00:19:45,510 --> 00:19:47,470 Meta platforms being the first one. 391 00:19:47,750 --> 00:19:51,470 This one has added 3% to its portfolio gains over that time 392 00:19:51,470 --> 00:19:54,030 period. Now he says, at this stage last 393 00:19:54,030 --> 00:19:57,150 year Meta was one of our largest detractors and we wrote that 394 00:19:57,150 --> 00:20:00,950 Meta stock now trades at a free cash flow yield of 8.7%. 395 00:20:01,310 --> 00:20:04,510 At this level, it's either cheap or a socalled value trap. 396 00:20:04,800 --> 00:20:07,880 We will let you know when we find out, but we are inclined to 397 00:20:07,880 --> 00:20:10,880 believe it is the former. We have now had at least a 398 00:20:10,880 --> 00:20:14,200 partial answer to that question with the stock up 70% over the 399 00:20:14,200 --> 00:20:16,960 past year, although we are too paranoid to ever declare 400 00:20:16,960 --> 00:20:19,920 victory. So he's pointing out that he 401 00:20:19,920 --> 00:20:23,240 held on to meta, which I think is it's important to point that 402 00:20:23,240 --> 00:20:25,080 out. He invested in meta, it went 403 00:20:25,080 --> 00:20:27,080 down a lot and then the company recovered. 404 00:20:27,440 --> 00:20:30,600 Microsoft has also performed really well over the past six 405 00:20:30,600 --> 00:20:32,400 months, so he points that out as well. 406 00:20:32,850 --> 00:20:34,690 L'Oreal continues to impress them. 407 00:20:34,930 --> 00:20:37,650 We have other companies in their portfolio that aren't doing so 408 00:20:37,650 --> 00:20:40,690 well. Waters, Estee Lauder, ADP 409 00:20:40,690 --> 00:20:43,730 Mettler, Toledo, Phillip Morris. All these companies have been 410 00:20:43,730 --> 00:20:46,930 detractors from the portfolio. Now, one of the areas where I 411 00:20:46,930 --> 00:20:50,090 believe that Terry Smith messed up, this was something that I 412 00:20:50,090 --> 00:20:54,250 think was a mistake was he sold out of Amazon at nearly the 413 00:20:54,250 --> 00:20:58,090 bottom of the Amazon dip. So Amazon went down like crazy 414 00:20:58,410 --> 00:21:01,290 and he held on to meta, but he sold out of Amazon. 415 00:21:01,700 --> 00:21:04,700 He says the most noteworthy item of turnover was probably our 416 00:21:04,700 --> 00:21:09,260 sale of Amazon, which had begun purchasing only in July of 2021. 417 00:21:09,620 --> 00:21:12,860 The immediate cause for the sale was our concern over the 418 00:21:12,860 --> 00:21:16,060 potential capital misallocation. The relatively new CEO Andy 419 00:21:16,060 --> 00:21:18,740 Jassy enunciated some principles of investments. 420 00:21:18,940 --> 00:21:22,340 So these were the things that Andy Jassy points out of where 421 00:21:22,340 --> 00:21:24,900 they like to invest in as Amazon. 422 00:21:24,980 --> 00:21:28,020 He says that our view was that there's a lot to like about this 423 00:21:28,020 --> 00:21:30,700 statement. And it gave us common comfort in 424 00:21:30,700 --> 00:21:33,460 purchasing the stock we had SHIELD away from before. 425 00:21:33,740 --> 00:21:37,100 However, it always is easier to talk the talk than it is to walk 426 00:21:37,100 --> 00:21:39,820 the walk and the CEO's pronouncement that he wanted 427 00:21:39,820 --> 00:21:43,700 Amazon to seek routes a bigger investment in grocery retail 428 00:21:43,980 --> 00:21:45,900 round. Counter to all these principles, 429 00:21:46,220 --> 00:21:48,940 in our view, grocery retail has none of these characteristics, 430 00:21:48,940 --> 00:21:52,780 and Amazon has already stubbed its toe in the sector with the 431 00:21:52,780 --> 00:21:56,320 Whole Foods acquisition. So that's the first argument 432 00:21:56,320 --> 00:21:58,200 Terry Smith gives against Amazon. 433 00:21:58,200 --> 00:22:00,280 And I just want to comment on a few things here. 434 00:22:00,440 --> 00:22:02,680 Obviously, there's the indication it was a mistake 435 00:22:02,680 --> 00:22:05,960 because Amazon is up 51% year to date. 436 00:22:06,160 --> 00:22:08,240 This company has been a massive winner. 437 00:22:08,480 --> 00:22:12,000 If Terry Smith had kept it within his portfolio, it would 438 00:22:12,000 --> 00:22:15,520 be one of the top five contributions to his gains this 439 00:22:15,520 --> 00:22:17,360 year. So that stings a little when you 440 00:22:17,360 --> 00:22:20,240 sell a company like that before a huge rally in the stock. 441 00:22:20,560 --> 00:22:24,500 He also mentions that. The CEO of the company is 442 00:22:24,500 --> 00:22:28,780 relatively new and that's true. He is a relatively new CEO, but 443 00:22:28,780 --> 00:22:31,340 he leaves out that Andy Jassy has been with the company for 444 00:22:31,340 --> 00:22:34,220 over 20 years. Andy Jassy was the one running 445 00:22:35,180 --> 00:22:36,700 AWS. He was the one that built that 446 00:22:36,700 --> 00:22:40,260 business into what it is today, the most profitable portion and 447 00:22:40,260 --> 00:22:42,580 most important portion of Amazon. 448 00:22:43,080 --> 00:22:46,440 So I think just describing him as a relatively new CEO, it's 449 00:22:46,440 --> 00:22:48,960 true that he's a new CEO, but there's a lot more context 450 00:22:48,960 --> 00:22:51,400 behind that. And it is true that Amazon has 451 00:22:51,400 --> 00:22:53,760 stubbed its toe in grocery retail. 452 00:22:54,080 --> 00:22:55,720 That's a phrase that he uses there. 453 00:22:56,080 --> 00:22:59,840 But this phrase could be applied to the entire history of Amazon. 454 00:23:00,160 --> 00:23:03,040 When is Amazon not stubbed their toe doing something? 455 00:23:03,080 --> 00:23:04,560 That's something that you have to get used to. 456 00:23:04,560 --> 00:23:07,520 With Amazon, they will go into different bets that won't 457 00:23:07,520 --> 00:23:09,960 workout because they're always trying new things. 458 00:23:10,280 --> 00:23:13,080 But when they do work out, they work out big, where companies 459 00:23:13,080 --> 00:23:16,000 choose to invest outside of a powerful core franchise in which 460 00:23:16,000 --> 00:23:18,920 they already have expertise. We believe they are likely to 461 00:23:18,920 --> 00:23:22,840 destroy value, and especially so when they're entering A sector 462 00:23:22,880 --> 00:23:26,320 which already has poor returns. A similar thought process has 463 00:23:26,320 --> 00:23:30,000 led us to exit Adobe. Adobe's another one where I 464 00:23:30,000 --> 00:23:33,360 believe that Terry Smith made a huge mistake exiting this 465 00:23:33,360 --> 00:23:35,680 company. He missed out on another company 466 00:23:35,680 --> 00:23:38,880 that's rose up 50% in just the past couple of months. 467 00:23:39,210 --> 00:23:42,570 Because he exited this position off of concerns about capital 468 00:23:42,570 --> 00:23:44,730 allocation. So Terry Smith missed out on 469 00:23:44,730 --> 00:23:48,410 both the gains in Adobe and Amazon, two of the biggest 470 00:23:48,410 --> 00:23:50,970 winners that would have been in his portfolio because he sold 471 00:23:50,970 --> 00:23:53,650 out of them this year. And my criticism for Terry Smith 472 00:23:53,650 --> 00:23:56,330 would be the rule #3 that do nothing. 473 00:23:56,370 --> 00:23:59,930 It seems like he's trying to analyze these companies a lot. 474 00:23:59,930 --> 00:24:02,610 He's making quick changes on them based on minor 475 00:24:02,610 --> 00:24:05,450 disagreements and capital allocation, and he's selling 476 00:24:05,450 --> 00:24:08,170 core businesses at attractive valuations. 477 00:24:08,590 --> 00:24:11,270 That have incredibly good fundamentals because of these 478 00:24:11,270 --> 00:24:15,190 minor disagreements and in so he's missing out on 50% plus 479 00:24:15,190 --> 00:24:17,390 gains. Now finally the last bit where I 480 00:24:17,390 --> 00:24:20,710 disagree with Terry Smith here is he says where these companies 481 00:24:20,710 --> 00:24:23,510 choose to invest outside of their powerful franchise in 482 00:24:23,510 --> 00:24:26,150 which they have already expertise in, we believe they 483 00:24:26,150 --> 00:24:30,220 are likely to destroy value. That is a phrase that I do not 484 00:24:30,220 --> 00:24:33,780 believe applies to Big Tech. They've all invested outside of 485 00:24:33,780 --> 00:24:37,060 their core franchises into various products and still have 486 00:24:37,060 --> 00:24:39,620 had high returns. Now, I don't want to be overly 487 00:24:39,620 --> 00:24:41,580 critical. It's always easy to judge in 488 00:24:41,580 --> 00:24:44,980 hindsight, but if I give what I believe is an honest critique of 489 00:24:44,980 --> 00:24:47,340 Terry Smith's investments in performance this year. 490 00:24:47,790 --> 00:24:50,630 I think he's he's done a couple things right for the most part. 491 00:24:50,830 --> 00:24:52,870 He also has had a couple notable fumbles. 492 00:24:52,870 --> 00:24:57,510 He really sold Adobe and Amazon at the worst time possible. 493 00:24:57,550 --> 00:25:00,590 Now moving on, we have news about Amazon's Prime Day event, 494 00:25:00,630 --> 00:25:03,350 and the numbers here are just crazy. 495 00:25:03,630 --> 00:25:08,870 US consumers spent 6.4 billion on the first day of Amazon's 496 00:25:08,870 --> 00:25:13,030 Prime Day event. 6.4 billion in a single day. 497 00:25:13,030 --> 00:25:15,630 Let's go ahead and just do some fun comparisons here. 498 00:25:15,910 --> 00:25:20,350 Palenter's revenue for all of 20/22 was 1.9 billion. 499 00:25:20,430 --> 00:25:24,230 Amazon made more revenue than three times all of the revenue 500 00:25:24,230 --> 00:25:27,630 that Palenter made in 2022. We can look at it compared 501 00:25:27,630 --> 00:25:31,030 against Texas Roadhouse. Texas Roadhouse in 2022 did 4 502 00:25:31,030 --> 00:25:35,630 billion of revenue, meaning that Amazon just yesterday did 50% 503 00:25:35,670 --> 00:25:37,910 more revenue than Texas Roadhouse. 504 00:25:37,910 --> 00:25:41,470 All of their restaurants, every location for the entire year of 505 00:25:41,470 --> 00:25:43,910 2022. We can even compare to something 506 00:25:43,910 --> 00:25:45,830 more comparable like Target which is. 507 00:25:45,910 --> 00:25:49,510 Financial retailer competing in the same category as Amazon 508 00:25:49,590 --> 00:25:52,830 Target in 2022 did around $100 billion of revenue. 509 00:25:53,230 --> 00:25:56,950 That means that Amazon yesterday did around the same amount of 510 00:25:56,950 --> 00:26:01,110 revenue as what Target normally does in three weeks, so three 511 00:26:01,110 --> 00:26:02,870 weeks of revenue in a single day. 512 00:26:02,910 --> 00:26:05,550 So the numbers are remarkable. A lot of people spending money 513 00:26:05,550 --> 00:26:07,950 on a lot of items on Amazon during the prime day. 514 00:26:08,270 --> 00:26:10,670 But some of the research study here I think is even more 515 00:26:10,670 --> 00:26:13,110 remarkable. We have a report here, this 516 00:26:13,110 --> 00:26:15,800 indepth research. That goes over some basic 517 00:26:15,800 --> 00:26:19,960 statistics and some of these are just are really, really crazy. 518 00:26:20,160 --> 00:26:26,160 The average American spends $91.75 on Amazon purchases every 519 00:26:26,160 --> 00:26:30,240 month, almost $100 per month. And that's the average American 520 00:26:30,600 --> 00:26:34,560 Prime members spend $110.00 on Amazon each month versus non 521 00:26:34,560 --> 00:26:37,880 members who only spend 38. Tennessee residents spend more 522 00:26:37,880 --> 00:26:40,280 than any other state, 124 dollars. 523 00:26:40,600 --> 00:26:43,280 I've looked at the map of which states have spent money on 524 00:26:43,280 --> 00:26:45,840 Amazon. And I can't find any rhyme or 525 00:26:45,840 --> 00:26:47,600 reason behind. It has nothing to do with 526 00:26:47,600 --> 00:26:50,760 political ideology. It doesn't seem to be connected 527 00:26:50,760 --> 00:26:53,040 to income levels. So I'm not sure why the states 528 00:26:53,040 --> 00:26:55,440 break down the way that they do Now they say that 1/4 of 529 00:26:55,440 --> 00:26:57,960 Americans shop on Amazon once a week or more. 530 00:26:58,440 --> 00:27:03,520 Americans spend $117.00 on Prime day on average. 1/3 of Americans 531 00:27:03,640 --> 00:27:06,160 think the dollar amount they spend on Amazon this year is 532 00:27:06,160 --> 00:27:08,680 higher than what is currently in their savings account. 533 00:27:09,090 --> 00:27:12,170 Which is incredible. And then the most ridiculous 534 00:27:12,170 --> 00:27:15,130 stat of all of these. And I'm not sure how they even 535 00:27:15,130 --> 00:27:17,730 got around to asking this question in this survey, but 536 00:27:17,730 --> 00:27:21,570 they say right here, I'm not making this up. 34% of women 537 00:27:21,570 --> 00:27:25,490 would rather give up sex for a year than Amazon for a year. 538 00:27:25,610 --> 00:27:29,090 That is a real stat. The obsession with Amazon is 539 00:27:29,090 --> 00:27:31,370 real. So I'm sure we'll get more data 540 00:27:31,370 --> 00:27:34,450 and analytics after the second day of Prime day today. 541 00:27:34,950 --> 00:27:37,670 That's what we know so far. The big question for Amazon is 542 00:27:37,670 --> 00:27:39,870 if this company can actually make some money with that 543 00:27:39,870 --> 00:27:42,430 obsession. That's all for this episode I 544 00:27:42,430 --> 00:27:44,270 hope you enjoyed and I'll see you in the next one.