1 00:00:00,040 --> 00:00:01,720 Welcome back to the Joseph Carlson Show. 2 00:00:01,720 --> 00:00:04,560 On today's episode we have a lot of news to get to. 3 00:00:04,560 --> 00:00:07,840 The big thing that investors want for 2024 is return to the 4 00:00:07,840 --> 00:00:10,280 long lost normalcy. Wouldn't that be nice? 5 00:00:10,280 --> 00:00:13,200 Things going back to normal? Not having so much craziness in 6 00:00:13,200 --> 00:00:15,440 the market, The Wall Street Journal even highlights what 7 00:00:15,440 --> 00:00:18,760 this normalcy looks like. An economic backdrop of moderate 8 00:00:18,760 --> 00:00:21,800 inflation and middle of the road interest rate policies. 9 00:00:21,800 --> 00:00:24,320 No more stimulus fueled meme stock craziness. 10 00:00:24,320 --> 00:00:27,000 Now we don't want to get greedy. Most investors I know aren't 11 00:00:27,000 --> 00:00:31,000 wishing for 24% returns like we got in 2023. 12 00:00:31,000 --> 00:00:34,720 We just want reasonable and sustainable rise in stocks 13 00:00:34,920 --> 00:00:37,040 powered by improved corporate earnings. 14 00:00:37,040 --> 00:00:39,160 That's what investors want for 2024. 15 00:00:39,600 --> 00:00:42,360 Well, I hate to be the bearer of bad news, but in this episode 16 00:00:42,360 --> 00:00:43,720 that's the role I'm going to play. 17 00:00:43,920 --> 00:00:48,040 I'll be explaining why this return to normalcy is very 18 00:00:48,040 --> 00:00:52,440 unlikely and why all the data and statistics show how unlikely 19 00:00:52,440 --> 00:00:53,880 it is. Now, of course, we have a lot of 20 00:00:53,880 --> 00:00:56,920 other news to get to. Apple for examples, down 3% on 21 00:00:56,920 --> 00:00:59,000 the day. That's a pretty big pullback for 22 00:00:59,000 --> 00:01:01,480 Apple. It came after a downgrade from 23 00:01:01,480 --> 00:01:03,880 Barclays. They have a lot of concerns for 24 00:01:03,880 --> 00:01:05,160 Apple. I'll be going down and 25 00:01:05,160 --> 00:01:07,760 addressing these concerns is an Apple shareholder that's held 26 00:01:07,760 --> 00:01:10,520 the stock for five years. We also have some important and 27 00:01:10,520 --> 00:01:13,560 funny news about Disney. The time has finally come. 28 00:01:13,800 --> 00:01:16,960 Mickey Mouse is now officially public domain. 29 00:01:17,400 --> 00:01:20,960 That means that Disney no longer has exclusive copyright over 30 00:01:21,080 --> 00:01:25,560 Mickey Mouse over that IP. Mickey, Minnie, Tiger and Mac 31 00:01:25,560 --> 00:01:28,280 the Knife are old enough that they're now officially public 32 00:01:28,280 --> 00:01:31,200 domain and Disney can do nothing about other people using these 33 00:01:31,200 --> 00:01:33,040 icons. So we know that other content 34 00:01:33,040 --> 00:01:36,520 creators can now use Mickey and Minnie this IP any way they 35 00:01:36,520 --> 00:01:37,680 want. And they are. 36 00:01:37,920 --> 00:01:40,080 Immediately after this announcement, there is another 37 00:01:40,080 --> 00:01:43,600 announcement that Steamboat Willie, the horror film, has 38 00:01:43,600 --> 00:01:45,240 been announced. And that's not all. 39 00:01:45,240 --> 00:01:48,040 They're not just making slasher films, they're also making video 40 00:01:48,040 --> 00:01:50,920 games featuring Mickey Mouse in the most disturbing ways 41 00:01:50,920 --> 00:01:53,080 possible. So be looking at what this means 42 00:01:53,080 --> 00:01:54,840 for Disney. How does this impact the 43 00:01:54,840 --> 00:01:56,600 company? Does it really affect them 44 00:01:56,600 --> 00:01:58,360 negatively? How should we think about this 45 00:01:58,360 --> 00:02:00,880 as investors? And then finally, it's been long 46 00:02:00,880 --> 00:02:03,200 enough we're finally going back to Tick Tock to get our 47 00:02:03,200 --> 00:02:06,440 investment and wealth building advice, this time from someone 48 00:02:06,440 --> 00:02:09,240 highlighting the differences between the stock market and 49 00:02:09,240 --> 00:02:11,240 sports betting. There's a lot more money to be 50 00:02:11,240 --> 00:02:13,960 made in sports betting than there is in the stock market. 51 00:02:14,160 --> 00:02:16,000 We'll take a look at his suggestion and see if there's 52 00:02:16,000 --> 00:02:18,600 really more money to be made in sports betting than the stock 53 00:02:18,600 --> 00:02:20,160 market. So we have a lot to get to in 54 00:02:20,160 --> 00:02:21,960 this episode. Let's go ahead and jump in. 55 00:02:22,160 --> 00:02:24,240 The first thing that needs to be addressed is investors 56 00:02:24,240 --> 00:02:26,760 expectations. We all know that we had a decent 57 00:02:26,760 --> 00:02:30,640 year in 2023. The S&P 500 was up 24%. 58 00:02:30,640 --> 00:02:34,320 The NASDAQ was up a lot more if you invested in high quality 59 00:02:34,320 --> 00:02:37,040 compounders. You also had a great return in 60 00:02:37,040 --> 00:02:40,520 2023. So investors have done well last 61 00:02:40,520 --> 00:02:42,360 year. We're happy about the results 62 00:02:42,360 --> 00:02:45,600 and many of us just want to have a decent year this year. 63 00:02:45,800 --> 00:02:47,520 We just want things to go smoothly. 64 00:02:47,800 --> 00:02:50,080 We're not going to be greedy. We don't hope for the same 65 00:02:50,080 --> 00:02:55,200 outcome as 2023, but we want a normal year in 2024. 66 00:02:55,760 --> 00:02:58,560 Well, this is where investors get into trouble. 67 00:02:58,560 --> 00:03:00,880 My dad always told me the definition of misery is the 68 00:03:00,880 --> 00:03:03,400 difference between expectations and reality. 69 00:03:03,760 --> 00:03:05,600 And that is the same in investing. 70 00:03:05,920 --> 00:03:08,920 If you have different expectations than reality, you 71 00:03:08,920 --> 00:03:11,320 can find yourself having a very difficult time. 72 00:03:11,600 --> 00:03:14,600 So by gauging your expectations, you can actually have a more 73 00:03:14,600 --> 00:03:17,720 enjoyable and even better outcome in investing. 74 00:03:17,960 --> 00:03:21,400 And right now I feel like a lot of investors may not have the 75 00:03:21,400 --> 00:03:25,720 right expectations for 2024. They say the wish list includes 76 00:03:25,720 --> 00:03:29,000 an economic backdrop of moderate inflation in middle of the road, 77 00:03:29,000 --> 00:03:32,320 interest rate policies, seemingly modest aspirations 78 00:03:32,320 --> 00:03:35,960 that would still mark a change from both the recent rate surge 79 00:03:35,960 --> 00:03:39,000 and the stimulus fueled meme stock craziness that preceded 80 00:03:39,000 --> 00:03:41,680 it. Few think the S&P 500 can match 81 00:03:41,680 --> 00:03:46,640 the 24% gain from 2023, which essentially erased all 2022 82 00:03:46,640 --> 00:03:48,840 losses. What investors really want is a 83 00:03:48,840 --> 00:03:52,520 reasonable, sustainable rise in stocks powered by improved 84 00:03:52,520 --> 00:03:54,800 corporate earnings. That doesn't seem that 85 00:03:54,800 --> 00:03:56,920 unrealistic, and it doesn't seem that greedy. 86 00:03:56,920 --> 00:04:00,000 They're just saying investors want stocks to rise in line with 87 00:04:00,000 --> 00:04:02,560 their free cash flow and with their earnings per share. 88 00:04:02,640 --> 00:04:05,240 It seems like after all this chaos we've endured for the past 89 00:04:05,240 --> 00:04:07,720 five years, we should have a return to normalcy. 90 00:04:08,080 --> 00:04:11,800 It's long overdue, but unfortunately the data says 91 00:04:11,800 --> 00:04:14,480 otherwise. This chart shows the S&P 500's 92 00:04:14,480 --> 00:04:19,040 returns by year, every single year, going back to before 1950. 93 00:04:19,120 --> 00:04:21,720 The red bars going down are negative years, representing how 94 00:04:21,720 --> 00:04:25,040 much the S&P 500 fell that year. The green bars are representing 95 00:04:25,040 --> 00:04:27,200 the gains the S&P 500 made that year. 96 00:04:27,200 --> 00:04:29,760 So this chart gives us a nice visual representation of the 97 00:04:29,760 --> 00:04:32,000 market going back a very long period of time. 98 00:04:32,280 --> 00:04:34,360 And from this we can draw some conclusions. 99 00:04:34,840 --> 00:04:38,120 First of all, investors are hoping for a return to normalcy. 100 00:04:38,160 --> 00:04:41,360 If you asked most investors what they consider a normal return in 101 00:04:41,360 --> 00:04:45,360 the market, most of them would say a 7 to 10% return. 102 00:04:45,680 --> 00:04:47,840 That is the average of the S&P 500. 103 00:04:47,840 --> 00:04:50,360 Over decades of time, most investors consider their 104 00:04:50,360 --> 00:04:54,040 earnings go up five or 6%, dividends get paid, buybacks get 105 00:04:54,040 --> 00:04:57,160 bought and stocks gain about 10% in value per year. 106 00:04:57,160 --> 00:04:59,320 Well, let's go ahead and take a look at the historical data 107 00:04:59,320 --> 00:05:00,920 here. Now we can look back through the 108 00:05:00,920 --> 00:05:04,000 years and highlight all the years that we get this normal 109 00:05:04,000 --> 00:05:07,000 return somewhere between 7 to 10%. 110 00:05:07,280 --> 00:05:10,560 For the sake of argument, I'll even expand this to 1 to 10%. 111 00:05:10,880 --> 00:05:15,640 Any year we get above 1% and below 10%, we can consider that 112 00:05:15,640 --> 00:05:18,840 a normal market return. This is after all what investors 113 00:05:18,840 --> 00:05:21,120 are looking for. If we add up all the years in 114 00:05:21,120 --> 00:05:24,480 the stock market over this past 70 years that we get this one to 115 00:05:24,480 --> 00:05:32,520 10% return, that is 14 years out of 7014 / 70 is 20%. 116 00:05:33,160 --> 00:05:38,080 So 20% of the time in the stock market we get normal returns, 117 00:05:38,440 --> 00:05:43,080 which means that 80% of the time we get abnormal returns. 118 00:05:43,680 --> 00:05:45,760 That seems like a little bit of a predicament, right? 119 00:05:45,880 --> 00:05:49,520 How can 80% of the time something happens over a 70 year 120 00:05:49,520 --> 00:05:53,760 period be abnormal? How can 20% of the time be 121 00:05:53,760 --> 00:05:55,960 normal? This flips the entire question 122 00:05:55,960 --> 00:05:58,520 on its head. What investors are really asking 123 00:05:58,520 --> 00:06:03,120 for is for this 20% outcome, the unlikely outcome investors are 124 00:06:03,120 --> 00:06:07,040 wanting hoping for, expecting the abnormal thing to happen. 125 00:06:07,080 --> 00:06:09,920 In reality, the normal thing for the stock market is to have 126 00:06:10,080 --> 00:06:14,920 either above 10% returns, double digit returns or negative 127 00:06:14,920 --> 00:06:17,120 returns. It is unlikely, in fact it's the 128 00:06:17,120 --> 00:06:21,240 huge minority of cases that you get that nice seven to 10% 129 00:06:21,240 --> 00:06:23,720 return that we hear about South frequently. 130 00:06:23,720 --> 00:06:25,720 So the problem here is expectations. 131 00:06:25,720 --> 00:06:29,240 We've heard over and over again that the market averages a 10% 132 00:06:29,240 --> 00:06:32,360 return, which means many investors believe that you're 133 00:06:32,360 --> 00:06:37,400 going to get around a 10% return per year or worse yet that a 10% 134 00:06:37,400 --> 00:06:40,240 return is normal. The data in the history shows 135 00:06:40,240 --> 00:06:43,920 the complete opposite. Getting around that 7 to 10% is 136 00:06:43,920 --> 00:06:46,600 incredibly unlikely. Even years where the market 137 00:06:46,600 --> 00:06:51,040 returned to 1 to 10% is only 20% of the historical returns. 138 00:06:51,120 --> 00:06:56,040 This tells us that the abnormal, the crazy returns in the S&P 500 139 00:06:56,280 --> 00:07:00,480 of going up double digits 20%, thirty percent, or the crazy 140 00:07:00,480 --> 00:07:03,720 returns where we have negative years, this is normal. 141 00:07:03,840 --> 00:07:10,160 These ranges below 0 and above 10% are the normal range for the 142 00:07:10,160 --> 00:07:13,440 S&P 500. This is what investors should be 143 00:07:13,440 --> 00:07:16,520 expecting to have happen 80% of the time. 144 00:07:16,680 --> 00:07:18,880 Another way of saying this is that you should expect the 145 00:07:18,880 --> 00:07:22,640 unexpected and that the abnormal outcome is more normal than the 146 00:07:22,640 --> 00:07:25,520 so-called normal outcome. This means that looking at My 147 00:07:25,520 --> 00:07:29,640 Portfolio, I should have expectations of 80% chance that 148 00:07:29,640 --> 00:07:33,040 I'll have double digit returns or go in the negative. 149 00:07:33,120 --> 00:07:36,440 That's what history tells us. Of course, it would be nice if 150 00:07:36,440 --> 00:07:40,320 the economic backdrop moderated, if interest rates normalized, if 151 00:07:40,320 --> 00:07:43,320 things like the Teamstock craziness ended. 152 00:07:43,640 --> 00:07:46,520 All of that would be preferable. But investors should not expect 153 00:07:46,520 --> 00:07:49,840 any of this to happen. The normal state of the world 154 00:07:49,840 --> 00:07:53,440 and of the economy is to have abnormal events happen. 155 00:07:53,520 --> 00:07:57,160 In 2023, we had many so-called abnormal events happen. 156 00:07:57,360 --> 00:08:00,280 Silicon Valley Bank going under war, breaking out in the Middle 157 00:08:00,280 --> 00:08:02,280 East, Interest rates rising rapidly. 158 00:08:02,400 --> 00:08:05,440 All of this chaos is seemingly unexpected and abnormal. 159 00:08:05,960 --> 00:08:09,080 Well, the truth is, if you highlight any of these years, if 160 00:08:09,080 --> 00:08:12,160 you go back through history and look at any time point, all of 161 00:08:12,160 --> 00:08:14,280 these time periods, people are going through similar 162 00:08:14,280 --> 00:08:16,560 circumstances. They weren't the same. 163 00:08:16,680 --> 00:08:18,720 In fact, every single time it's different. 164 00:08:18,840 --> 00:08:21,680 But the constant here, the thing that's common across all stock 165 00:08:21,680 --> 00:08:25,280 market history and all of world history is constant change, 166 00:08:25,280 --> 00:08:29,280 unexpected events and chaos. That is the normal state of the 167 00:08:29,280 --> 00:08:31,920 world and the stock market. So can we predict with 168 00:08:31,920 --> 00:08:34,240 precision, accuracy what's going to happen this year? 169 00:08:34,240 --> 00:08:36,120 Of course not. None of us know what's going to 170 00:08:36,120 --> 00:08:38,280 happen. But what we should be expecting 171 00:08:38,280 --> 00:08:42,880 is further chaos for things to be abnormal, which is the normal 172 00:08:43,080 --> 00:08:46,960 for the 80% chance that the market goes up above 10% or 173 00:08:46,960 --> 00:08:50,960 below 0 and we lose money. If we have these expectations 174 00:08:50,960 --> 00:08:54,480 ahead of time, it makes it less painful, makes it more 175 00:08:54,480 --> 00:08:56,120 tolerable. When we're in these 176 00:08:56,120 --> 00:09:00,040 circumstances, if we set our expectations correctly, if we 177 00:09:00,040 --> 00:09:03,160 expect the unexpected, we'll have a much more enjoyable time 178 00:09:03,160 --> 00:09:05,520 investing. Now moving on, we have news that 179 00:09:05,520 --> 00:09:08,640 has caused Apple to sell off. Apple's one of my longest held 180 00:09:08,640 --> 00:09:10,200 holdings. I've held it since the very 181 00:09:10,200 --> 00:09:13,200 beginning of My Portfolio. I've made some significant gains 182 00:09:13,200 --> 00:09:15,160 in this holding. It's been a great one so far. 183 00:09:15,440 --> 00:09:19,560 It's currently down at 3 1/2% after the news that Barclays has 184 00:09:19,560 --> 00:09:22,640 downgraded the stock and they've written about their concerns for 185 00:09:22,640 --> 00:09:23,960 Apple. So I want to go through the 186 00:09:24,040 --> 00:09:26,440 concerns and give some input as a long term investor of this 187 00:09:26,440 --> 00:09:28,880 company. Barclays noted that the latest 188 00:09:28,880 --> 00:09:33,040 sales checks showed softness in the iPhone 15 sales in China and 189 00:09:33,040 --> 00:09:35,160 developed markets. There was more strength in 190 00:09:35,160 --> 00:09:37,360 emerging markets but not enough to compensate. 191 00:09:37,640 --> 00:09:40,720 They also said growth in services such as the App Store 192 00:09:40,720 --> 00:09:43,040 will slow this year. They say, quote the continued 193 00:09:43,040 --> 00:09:46,040 period of weak results coupled with multiple expansion is not 194 00:09:46,040 --> 00:09:50,240 sustainable and that is true. Apple has been flat in their 195 00:09:50,240 --> 00:09:52,880 earnings for a long period of time, even having declining 196 00:09:52,880 --> 00:09:55,040 earnings while the multiple has gone up. 197 00:09:55,040 --> 00:09:57,440 For example, if we use Qualtrum to look at Apple's earnings per 198 00:09:57,440 --> 00:10:01,040 share over time, you can see if we zoom in over the past five 199 00:10:01,040 --> 00:10:04,360 years that the earnings per share shot up a lot. 200 00:10:04,360 --> 00:10:07,000 In 2020, we had a nice jump right here. 201 00:10:07,280 --> 00:10:10,800 Everybody went out and bought their new iPads and IMAX and and 202 00:10:10,800 --> 00:10:12,920 every Apple product as they got the stimulus. 203 00:10:13,200 --> 00:10:17,120 But then since that bump up from 2020, things have been 204 00:10:17,120 --> 00:10:19,920 relatively flat, even down a little bit. 205 00:10:20,320 --> 00:10:23,280 The earnings per share are not growing for Apple. 206 00:10:23,440 --> 00:10:26,640 On top of that, they say, we also believe 2024 will bring 207 00:10:26,640 --> 00:10:29,280 more service risk to light. This is something that I've 208 00:10:29,280 --> 00:10:30,880 highlighted with Apple's business. 209 00:10:31,120 --> 00:10:34,200 The crown jewel of the company is the service business. 210 00:10:34,200 --> 00:10:35,800 Now there's a lot of different lines of business. 211 00:10:35,800 --> 00:10:38,720 We can look at the Mac, the wearables, the iPad, the iPhone. 212 00:10:39,040 --> 00:10:41,600 But if we cross all of these out and we just focus on the 213 00:10:41,600 --> 00:10:44,080 services here, this is the most high margin part of their 214 00:10:44,080 --> 00:10:46,160 business. This is the insurances, the 215 00:10:46,160 --> 00:10:49,440 subscriptions and that toll booth sitting on the busy Rd. 216 00:10:49,440 --> 00:10:52,760 which is the Apple App store, all of the transactions run 217 00:10:52,760 --> 00:10:55,880 through that are incredibly high gross margins for Apple. 218 00:10:56,160 --> 00:11:00,240 They've grown the services from around $10 billion per quarter 219 00:11:00,560 --> 00:11:03,240 to around $22 billion per quarter. 220 00:11:03,240 --> 00:11:05,960 So we've seen substantial growth in their high margin services 221 00:11:05,960 --> 00:11:08,240 over the past few years, but they're now saying that that's 222 00:11:08,240 --> 00:11:10,440 going to slow down. Barclays noted that the App 223 00:11:10,440 --> 00:11:14,440 Store sales look to have a 10% decrease from a year earlier in 224 00:11:14,440 --> 00:11:16,760 the fourth quarter. They see them decelerating by 225 00:11:16,760 --> 00:11:19,480 the third quarter of this year. And while we're looking at these 226 00:11:19,480 --> 00:11:22,720 fundamentals of the App Store slowing down, services being at 227 00:11:22,720 --> 00:11:25,400 risk, the earnings per share being flat and the revenue 228 00:11:25,400 --> 00:11:29,640 barely growing, we also contrast that with the astronomical rise 229 00:11:29,640 --> 00:11:34,400 that Apple shares had in 2023. Ale rose almost 50 O. 230 00:11:34,920 --> 00:11:37,520 We had a massive multiple expansion with the fundamentals 231 00:11:37,520 --> 00:11:40,520 staying relatively flat. A lot of times I criticize banks 232 00:11:40,520 --> 00:11:43,320 for down grading stocks when it's not deserved, but in this 233 00:11:43,320 --> 00:11:45,240 case I think they have a valid reason. 234 00:11:45,320 --> 00:11:47,680 They have a valid argument. We can look at some of the 235 00:11:47,680 --> 00:11:49,760 fundamentals here. We look at the revenue and the 236 00:11:49,760 --> 00:11:52,600 revenues basically flat for the past two years. 237 00:11:52,680 --> 00:11:54,680 The EBITDA also looks very similar. 238 00:11:54,680 --> 00:11:58,600 We had a massive spike in EBITDA in 2020 and then it's completely 239 00:11:58,600 --> 00:12:00,520 flat since then. The free cash flow of the 240 00:12:00,520 --> 00:12:04,120 company also looks very similar. We see the same spike that 241 00:12:04,120 --> 00:12:06,960 happened around 2020 and then the free cash flow has been 242 00:12:06,960 --> 00:12:09,640 mostly the same sense there and we see the same thing in their 243 00:12:09,640 --> 00:12:12,760 earnings per share notice right here, the massive spike in their 244 00:12:12,760 --> 00:12:16,360 earnings per share in a single quarter, it literally doubled 245 00:12:16,360 --> 00:12:18,600 and then since then it's been basically flat. 246 00:12:18,640 --> 00:12:20,480 So now investors don't know what to expect. 247 00:12:20,480 --> 00:12:22,600 Looking at Apple, we see a company that's trading at a 248 00:12:22,600 --> 00:12:26,800 relatively high PE ratio, 29 is not a low PE for Apple. 249 00:12:27,160 --> 00:12:30,720 The free cash flow yield looks a lot better at 3.4%. 250 00:12:30,960 --> 00:12:34,320 We exclude stock based comp, it's at 3%, but Apple has traded 251 00:12:34,320 --> 00:12:36,440 as high as 4 to 5% throughout its history. 252 00:12:36,920 --> 00:12:39,720 So it doesn't look either extremely expensive right now or 253 00:12:39,720 --> 00:12:42,360 extremely cheap. The big problem with Apple is 254 00:12:42,360 --> 00:12:44,680 that it's not growing. Now for me personally, this may 255 00:12:44,680 --> 00:12:47,360 be unsurprising, but I'm not going to be selling my Apple. 256 00:12:47,640 --> 00:12:50,200 I don't necessarily think that Apple's the Best Buy in the 257 00:12:50,200 --> 00:12:52,760 market today. I'm not buying more of it, but I 258 00:12:52,760 --> 00:12:54,840 also don't think it's worth selling at this point. 259 00:12:55,040 --> 00:12:58,320 As long as their marketplace in their Moat stays intact, I'll 260 00:12:58,320 --> 00:13:01,080 continue to hold this company. I'll sell the company when I 261 00:13:01,080 --> 00:13:03,680 start to see issues with the Moat and durability of its 262 00:13:03,680 --> 00:13:05,640 future. But as of right now, I see most 263 00:13:05,640 --> 00:13:07,400 of these concerns as temporary ones. 264 00:13:07,520 --> 00:13:10,240 Slight multiple expansion and earnings per share slowing down 265 00:13:10,440 --> 00:13:12,480 are things that can change very quickly. 266 00:13:12,560 --> 00:13:15,800 So I believe Barclays has valid concerns but temporary concerns. 267 00:13:15,840 --> 00:13:18,360 Now moving on, we have some exciting news and concerning 268 00:13:18,360 --> 00:13:21,920 news for Disney shareholders. The time has finally come after 269 00:13:21,920 --> 00:13:25,760 nearly a century. The iconic figure Mickey Mouse 270 00:13:26,000 --> 00:13:29,960 is officially public domain, meaning that Disney's graphs of 271 00:13:29,960 --> 00:13:32,720 this intellectual property, their ownership of it, their 272 00:13:32,720 --> 00:13:36,440 ability to enforce copyright of their exclusive use of it has 273 00:13:36,440 --> 00:13:38,600 ended. They no longer have exclusive 274 00:13:38,600 --> 00:13:42,320 rights to this icon as well as Mini Tiger and Mac the knife. 275 00:13:42,360 --> 00:13:44,960 Now this is a big deal in and of itself because Disney's known as 276 00:13:44,960 --> 00:13:47,560 one of the most litigious companies in protecting their 277 00:13:47,560 --> 00:13:50,920 IP. If you use Disney Content Disney 278 00:13:50,920 --> 00:13:55,560 IP without permission, you'll be quickly met with a copyright 279 00:13:55,560 --> 00:13:57,520 notice. Disney's one of the most strict 280 00:13:57,520 --> 00:14:00,560 companies with using their content or IP, but after a 281 00:14:00,560 --> 00:14:03,440 certain amount of time, the copyright lapses and becomes 282 00:14:03,440 --> 00:14:05,720 public domain. Now, there are a few caveats 283 00:14:05,720 --> 00:14:07,360 here. For ongoing characters like 284 00:14:07,360 --> 00:14:10,440 Mickey Mouse, copyright law is particularly complicated. 285 00:14:10,760 --> 00:14:14,200 The public domain version of the character does not include 286 00:14:14,200 --> 00:14:17,520 significant design changes made in later works like The 287 00:14:17,520 --> 00:14:20,840 Sorcerer's Apprentice, Mickey or Fantasia 1940. 288 00:14:21,280 --> 00:14:24,560 And you can't produce a work that falsely represents itself 289 00:14:24,800 --> 00:14:27,760 as a Disney production or a piece of official merchandise 290 00:14:28,000 --> 00:14:31,200 since Mickey Mouse is also registered Disney trademark. 291 00:14:31,320 --> 00:14:34,080 So there is some caveats here. You can't use the new Mickey 292 00:14:34,080 --> 00:14:37,280 Mouse like The Apprentice or Fantasia, but I don't think 293 00:14:37,280 --> 00:14:39,480 that's a big deal. Mickey Mouse looks roughly the 294 00:14:39,480 --> 00:14:42,840 same as he did 100 years ago. The Mickey Mouse Airs look 295 00:14:42,840 --> 00:14:46,480 roughly the same as they did 100 years ago, and this green lights 296 00:14:46,600 --> 00:14:50,640 everyone to be able to have access to this IP to sell under 297 00:14:50,640 --> 00:14:53,760 the name of Mickey Mouse. They can't pretend to be Disney 298 00:14:53,760 --> 00:14:57,360 while doing it, but they can sell Mickey Mouse now. 299 00:14:57,360 --> 00:14:59,640 I think this brings a lot of issues for Disney. 300 00:15:00,200 --> 00:15:03,640 Disney makes a fortune to this day by selling Mickey Mouse 301 00:15:03,640 --> 00:15:07,520 merchandise, and now they're competing with other people 302 00:15:07,520 --> 00:15:09,760 selling Mickey Mouse merchandise. 303 00:15:10,200 --> 00:15:12,080 The other people can't pretend to be Disney. 304 00:15:12,200 --> 00:15:15,640 They can't put the Disney trademark or logo or the Disney 305 00:15:15,640 --> 00:15:19,160 approval on it, but they still can sell Mickey Mouse. 306 00:15:19,640 --> 00:15:22,400 So now Disney's going to have a harder time competing with IP 307 00:15:22,400 --> 00:15:24,560 that was formally exclusively theirs. 308 00:15:24,560 --> 00:15:26,960 Another thing that Disney has to be worried about is negative 309 00:15:26,960 --> 00:15:29,240 brand equity. How will this impact their 310 00:15:29,240 --> 00:15:31,520 brand? To see Mickey Mouse used in 311 00:15:31,520 --> 00:15:34,960 disturbing ways, there's already an untitled horror comedy based 312 00:15:34,960 --> 00:15:38,680 on Mickey Mouse's cartoon debut. In it, a sadistic mouse will 313 00:15:38,680 --> 00:15:41,320 torment a group of unsuspecting fairy passengers. 314 00:15:41,600 --> 00:15:43,560 Production is set to begin in spring. 315 00:15:43,560 --> 00:15:46,160 There's also a new trailer released today for a game called 316 00:15:46,160 --> 00:15:47,880 Infestation 88. Thanks. 317 00:15:47,920 --> 00:15:50,640 For coming out, we got a bit of an infestation here at the 318 00:15:50,640 --> 00:15:57,080 storage facility. I thought it was just rodents, 319 00:15:57,080 --> 00:15:58,480 but. There's something else. 320 00:15:58,600 --> 00:16:00,800 You can see the shadow of Mickey's ears in here. 321 00:16:00,800 --> 00:16:06,040 There's. Nests. 322 00:16:07,040 --> 00:16:09,800 They're everywhere. Tried to take care of it 323 00:16:09,800 --> 00:16:12,160 ourselves, but things have escalated. 324 00:16:14,440 --> 00:16:18,120 Exterminators are our last hope. Please help us before. 325 00:16:34,520 --> 00:16:38,120 It took approximately 10 hours from the release of Disney's IP 326 00:16:38,120 --> 00:16:41,400 Mickey Mouse to public domain to have games like this be 327 00:16:41,400 --> 00:16:44,800 presented. 10 hours total. Now, of course, that's not all. 328 00:16:44,800 --> 00:16:47,200 There's even more movies being announced, more trailers being 329 00:16:47,200 --> 00:16:49,000 released. This one's called Mickey Mouse 330 00:16:49,000 --> 00:16:49,720 Trap. Put the phone. 331 00:16:50,440 --> 00:16:52,160 Down, please. I'd like a dude. 332 00:16:53,200 --> 00:17:09,720 I've already stopped. 333 00:17:09,720 --> 00:17:13,520 Gina, turn it around please. Now of course, these are mostly 334 00:17:13,520 --> 00:17:16,040 low budget indie projects and they're probably not going to be 335 00:17:16,040 --> 00:17:19,359 massive successes, but this does show what people intend to do 336 00:17:19,359 --> 00:17:21,359 with Disney's formerly exclusive IP. 337 00:17:21,359 --> 00:17:24,160 It'll be interesting to see ultimately the impact this has 338 00:17:24,160 --> 00:17:26,440 on Disney stock from an investment perspective. 339 00:17:26,760 --> 00:17:30,080 I can't see these indie projects and small budget games having a 340 00:17:30,080 --> 00:17:33,520 major impact on Disney overall. It's funny, it's silly. 341 00:17:33,520 --> 00:17:36,600 And I think most of the people playing or even building these 342 00:17:36,600 --> 00:17:39,120 games do like Disney and they like Mickey Mouse. 343 00:17:39,120 --> 00:17:40,480 That's part of the reason they're doing it. 344 00:17:40,680 --> 00:17:43,920 They're just having fun with an iconic character in a different 345 00:17:43,920 --> 00:17:46,120 setting is always something interesting to see. 346 00:17:46,120 --> 00:17:48,640 I think the bigger issue Disney's facing is now people 347 00:17:48,640 --> 00:17:52,400 can monetize the sale of Mickey Mouse merchandise directly, and 348 00:17:52,400 --> 00:17:55,160 that's a bigger issue for Disney as they make a lot of money 349 00:17:55,160 --> 00:17:57,600 selling that merchandise. But either way, it'll be 350 00:17:57,600 --> 00:17:59,720 interesting to see how this impacts the company. 351 00:17:59,760 --> 00:18:02,560 Now, moving on, we finally have to get back to TikTok investing 352 00:18:02,560 --> 00:18:04,280 advice. This time, it's someone 353 00:18:04,280 --> 00:18:06,760 highlighting the difference between the stock market versus 354 00:18:06,760 --> 00:18:08,680 sports. Bet he's going to show us a 355 00:18:08,680 --> 00:18:11,080 better way to make money than the stock market. 356 00:18:11,080 --> 00:18:14,440 When you're betting on sports, you know the team, you know the 357 00:18:14,480 --> 00:18:18,080 players, you know the point spread and you get paid right 358 00:18:18,080 --> 00:18:20,280 after the game on the stock market. 359 00:18:20,560 --> 00:18:22,200 Do you really know these companies? 360 00:18:22,520 --> 00:18:24,480 Do you know the day-to-day operations? 361 00:18:24,680 --> 00:18:26,520 Do you even know where the company's at? 362 00:18:26,720 --> 00:18:28,480 Do you know who's running the company? 363 00:18:28,720 --> 00:18:31,120 No you don't. Now I'm going to pause it there. 364 00:18:31,120 --> 00:18:33,440 He brings up an interesting contrast here. 365 00:18:33,840 --> 00:18:35,560 He says. When you're betting on sports 366 00:18:35,560 --> 00:18:37,840 betting, you know everything about the teams and the 367 00:18:37,840 --> 00:18:40,160 statistics and the payouts. But then he goes through the 368 00:18:40,160 --> 00:18:42,360 stock market and asks the same questions. 369 00:18:42,560 --> 00:18:45,200 We know these companies. Do you know the day-to-day 370 00:18:45,280 --> 00:18:47,240 operations? Do you know the day-to-day 371 00:18:47,240 --> 00:18:50,040 operations of the company? Now when I'm asked this 372 00:18:50,040 --> 00:18:52,360 question, I think the answer should be yes. 373 00:18:52,360 --> 00:18:55,760 If you're invested in companies, you should know their day-to-day 374 00:18:55,760 --> 00:18:58,200 operations. Do you even know where the 375 00:18:58,200 --> 00:19:00,720 company's at? You should definitely know where 376 00:19:00,720 --> 00:19:02,880 the company's located. That should be one of the first 377 00:19:02,880 --> 00:19:05,200 things you find out. Do you know who's running the 378 00:19:05,200 --> 00:19:07,080 company? You should absolutely be 379 00:19:07,080 --> 00:19:09,640 familiar with the leadership of the company, the type of 380 00:19:09,640 --> 00:19:12,880 executives that run it, the CEO, what their goals are, what their 381 00:19:12,880 --> 00:19:14,720 ambitions are, and what their history is. 382 00:19:15,080 --> 00:19:17,440 No you don't. Now he says no, you don't. 383 00:19:17,440 --> 00:19:20,880 But I believe the answer should be yes to every one of those 384 00:19:20,880 --> 00:19:23,280 questions. All those questions he posed to 385 00:19:23,280 --> 00:19:25,920 stock market investors are things that you can easily get. 386 00:19:26,360 --> 00:19:28,920 In fact, all of those are pretty simple things to answer. 387 00:19:28,960 --> 00:19:30,680 Just want you guys to really think about it. 388 00:19:30,840 --> 00:19:33,280 If you're going to invest, there's a lot more money to be 389 00:19:33,280 --> 00:19:36,040 made in sports betting than there is in the stock market. 390 00:19:36,240 --> 00:19:38,160 And I know there's going to be guys that come in and put 391 00:19:38,160 --> 00:19:41,640 comments on making tons of money in in the stock market. 392 00:19:41,800 --> 00:19:44,560 Well, you obviously aren't betting sports, because if you 393 00:19:44,560 --> 00:19:47,800 were and you were to compare the two, I can show you how to make 394 00:19:47,800 --> 00:19:50,800 a lot more money betting sports than you're getting in the stock 395 00:19:50,800 --> 00:19:52,560 market. So there you have it, the stock 396 00:19:52,560 --> 00:19:55,560 market versus sports betting. What does he have to back up 397 00:19:55,560 --> 00:19:59,000 these huge claims of the stock market being a worse investment 398 00:19:59,000 --> 00:20:01,840 vehicle, a worse wealth creation tool than sports betting? 399 00:20:02,200 --> 00:20:05,280 Well, the big evidence, like most of these videos is trust me 400 00:20:05,280 --> 00:20:07,520 bro, so you can trust them if you want. 401 00:20:07,800 --> 00:20:09,960 That's all for this episode. See you in the next one.