1 00:00:00,100 --> 00:00:02,400 Welcome back everyone. We have so much to get into in 2 00:00:02,400 --> 00:00:06,000 this episode of the Joseph Carlson show as you know I made 3 00:00:06,000 --> 00:00:09,200 some changes to the portfolio, the beginning of this year. 4 00:00:09,700 --> 00:00:13,100 I'm basically trying to up the quality of my companies. 5 00:00:13,100 --> 00:00:16,000 I'm trying to trim down on some of the fat and make it so that 6 00:00:16,000 --> 00:00:19,500 every company, my portfolio are really top performers. 7 00:00:19,800 --> 00:00:22,600 Now, what I want to do is actually just do an update, see 8 00:00:22,600 --> 00:00:25,600 what's going on. Year-to-date we're up five point 9 00:00:25,600 --> 00:00:29,500 nine, six percent so far year today, that's 22,000 and we're 10 00:00:29,500 --> 00:00:33,000 going to go By sector by sector and category by category and 11 00:00:33,000 --> 00:00:35,600 just see how these companies are doing and why they're performing 12 00:00:35,600 --> 00:00:37,500 the way they are this year. Then of course, we have some 13 00:00:37,500 --> 00:00:40,500 economic news u.s. GDP came out at two point nine 14 00:00:40,500 --> 00:00:43,100 percent growth is moderating in the US. 15 00:00:43,100 --> 00:00:47,200 Corporate layoffs are spreading Beyond just big Tech into the 16 00:00:47,200 --> 00:00:50,100 entire corporate world and we have some earnings reports 17 00:00:50,100 --> 00:00:52,100 Union. Pacific released their earnings. 18 00:00:52,100 --> 00:00:55,200 Microsoft released their earnings MasterCard released 19 00:00:55,200 --> 00:00:57,900 their earnings. These are all large Holdings in 20 00:00:57,900 --> 00:01:00,300 my portfolio and we're going to be going through all Of these 21 00:01:00,300 --> 00:01:02,500 earnings reports and see how these companies are doing. 22 00:01:02,600 --> 00:01:05,500 And then finally, we have an update on all of those 23 00:01:05,500 --> 00:01:08,900 tick-tocks of a day in the life of a LinkedIn employee or a 24 00:01:08,908 --> 00:01:12,600 Google employee. Now, employees or rather X 25 00:01:12,600 --> 00:01:16,900 employees are making videos of a day in the life of being laid 26 00:01:16,900 --> 00:01:19,300 off from Google. I kid, you not. 27 00:01:19,300 --> 00:01:22,300 This is the new trend, they're making videos about their story 28 00:01:22,300 --> 00:01:24,600 of being laid off. So as always, we have a lot to 29 00:01:24,607 --> 00:01:26,700 get to in this episode. Let's go ahead and start off 30 00:01:26,700 --> 00:01:29,600 with a portfolio update. We gained thousands of new 31 00:01:29,600 --> 00:01:31,300 subscribers. Subscribers in the Joseph 32 00:01:31,300 --> 00:01:34,400 Carlson show every single month so if you're one of the new ones 33 00:01:34,400 --> 00:01:37,600 here welcome we do something a little bit different here. 34 00:01:37,600 --> 00:01:40,800 The most channels we show our actual money, we show it. 35 00:01:40,800 --> 00:01:43,800 Invested we show it transparently with every single 36 00:01:43,800 --> 00:01:45,800 thing that we're buying. Every single thing that we're 37 00:01:45,800 --> 00:01:48,000 selling. I not only show what I'm buying 38 00:01:48,000 --> 00:01:51,000 and selling but I also show what I make mistakes when I have 39 00:01:51,000 --> 00:01:53,700 Investments that don't turn out. Well, one of my worst 40 00:01:53,700 --> 00:01:57,100 Investments right now is Disney. I'm losing money on this 41 00:01:57,100 --> 00:01:58,400 company. So there's a level of 42 00:01:58,408 --> 00:02:01,000 transparency here that you don't get Many other places. 43 00:02:01,400 --> 00:02:03,700 But what I want to do in this video is give an update on the 44 00:02:03,700 --> 00:02:06,800 performance of my portfolio. Year-to-date, we're looking at 45 00:02:06,800 --> 00:02:10,300 the passive income account and what I'll say is this 393 46 00:02:10,300 --> 00:02:14,000 thousand dollars that is real money and that makes up my 47 00:02:14,000 --> 00:02:16,800 largest investment vehicle by far. 48 00:02:17,200 --> 00:02:20,700 I have another smaller Tech portfolio but that one is much 49 00:02:20,700 --> 00:02:24,200 smaller than this portfolio. Four hundred thousand dollars is 50 00:02:24,200 --> 00:02:26,900 a ton of money to me. The only thing that even comes 51 00:02:26,900 --> 00:02:29,800 close is my equity in my house where I live. 52 00:02:29,900 --> 00:02:32,700 Liv and I don't really consider that an investment in the same 53 00:02:32,700 --> 00:02:35,700 way I do the passive income portfolio so this is a 54 00:02:35,700 --> 00:02:38,300 meaningful amount of money. And the goal here is to compound 55 00:02:38,300 --> 00:02:40,200 my portfolio as much as possible. 56 00:02:40,500 --> 00:02:43,800 Frankly, I want to beat the S&P 500 and I want to Beat It by a 57 00:02:43,800 --> 00:02:45,800 large degree over the next 10 years. 58 00:02:45,800 --> 00:02:48,700 In terms of keeping track of progress, I really started 59 00:02:48,700 --> 00:02:51,900 paying attention to it and 2022 and 2022. 60 00:02:51,900 --> 00:02:54,800 The passive income account was down sixteen point, two, two 61 00:02:54,800 --> 00:02:57,800 percent, and that's with dividends being included. 62 00:02:57,900 --> 00:03:01,100 So, with dividends reinvested, we were Sixteen point two, two 63 00:03:01,100 --> 00:03:06,700 percent time-weighted Returns the S&P 500 went down. 18.1 4% 64 00:03:06,700 --> 00:03:10,800 the same year with dividends reinvested so we barely out 65 00:03:10,800 --> 00:03:14,300 performed it in 2022. And that's partially because of 66 00:03:14,300 --> 00:03:16,200 how well, Texas Roadhouse and view cheated. 67 00:03:16,200 --> 00:03:20,100 So a couple Holdings held it up last year, but this isn't the 68 00:03:20,100 --> 00:03:22,100 type of outperformance that I'm wanting. 69 00:03:22,300 --> 00:03:25,500 I don't want to beat the S&P 500 by just a couple percentage. 70 00:03:25,500 --> 00:03:28,700 I'd like to make the Gap much wider over the coming years. 71 00:03:28,700 --> 00:03:31,900 And so, what I want to do is go over my plan for doing that. 72 00:03:31,900 --> 00:03:36,500 If I flip over to a year to date so far were up 6.2 one percent. 73 00:03:36,500 --> 00:03:39,400 The S&P 500 is up, five point seven, seven percent. 74 00:03:39,400 --> 00:03:41,800 So we're basically matching it right now and some of my 75 00:03:41,800 --> 00:03:44,400 companies are performing a little bit better than others. 76 00:03:44,400 --> 00:03:47,500 If we stay on the year-to-date metric here, we can go sector by 77 00:03:47,500 --> 00:03:49,800 sector but we go into the tech category. 78 00:03:49,900 --> 00:03:53,500 I have two companies in this category apple and Microsoft 79 00:03:53,500 --> 00:03:56,400 Apples Up 14% Microsoft is lagging. 80 00:03:56,400 --> 00:03:58,400 The market up only two and a half percent. 81 00:03:58,500 --> 00:04:02,800 I think that Microsoft Right now is heavily undervalued based off 82 00:04:02,800 --> 00:04:06,000 the quality of the company and its future growth prospects. 83 00:04:06,200 --> 00:04:09,500 And I say that, after seeing their last earnings, that were a 84 00:04:09,508 --> 00:04:12,800 bit disappointing to investors. If we look at Microsoft's latest 85 00:04:12,800 --> 00:04:15,900 numbers, they are a little bit lower than last year, the 86 00:04:15,900 --> 00:04:18,399 earnings were down 11% year-over-year. 87 00:04:18,500 --> 00:04:20,700 The ibadah was a little bit lower, that's a little bit 88 00:04:20,700 --> 00:04:23,600 concerning, even the top line, revenue had an incredible 89 00:04:23,600 --> 00:04:26,800 deceleration. It only grew at two percent two 90 00:04:26,800 --> 00:04:29,900 percent year over year. But most of all I think the The 91 00:04:29,907 --> 00:04:32,900 most concerning thing is in the cash flow of the company, the 92 00:04:32,900 --> 00:04:36,100 cash flows plummeted. Look at this last quarter. 93 00:04:36,500 --> 00:04:38,300 Doesn't that put it in perspective? 94 00:04:38,300 --> 00:04:41,600 There the cash flows, like a third of what it was the prior 95 00:04:41,600 --> 00:04:44,200 quarters. Now, over the full year, it was 96 00:04:44,200 --> 00:04:48,000 a pretty good year for Microsoft in 2022 but the fourth-quarter 97 00:04:48,000 --> 00:04:51,200 shows a strong deceleration. Then in addition to all these 98 00:04:51,200 --> 00:04:53,700 slowing Trends with this quarter, we have the CEO of the 99 00:04:53,700 --> 00:04:57,300 company Sachin, Adela he goes on the earnings call and he 100 00:04:57,300 --> 00:04:59,700 basically does everything in his power. 101 00:05:00,100 --> 00:05:02,300 To torpedo the company's stock price. 102 00:05:02,600 --> 00:05:06,300 He talks about how everything slowing down and the company's 103 00:05:06,300 --> 00:05:09,700 going to basically take a break for the next two years that Tech 104 00:05:09,700 --> 00:05:11,400 spending. Slowing down the economy, 105 00:05:11,400 --> 00:05:14,700 slowing down, every time someone talks to him about something 106 00:05:14,700 --> 00:05:17,100 exciting. He basically pores cold water on 107 00:05:17,100 --> 00:05:19,100 it. So he was not enthusiastic in 108 00:05:19,100 --> 00:05:21,100 this earnings report. Now there's something that I 109 00:05:21,100 --> 00:05:24,200 want to mention that I think is an often missed point, but I 110 00:05:24,200 --> 00:05:28,300 think it's very important in regards to CEOs, like such an 111 00:05:28,300 --> 00:05:32,800 Adela talking In negatively about his own company saying 112 00:05:32,800 --> 00:05:36,600 that that growth is slowing. That competition is coming that 113 00:05:36,600 --> 00:05:38,900 they're struggling through the times. 114 00:05:39,000 --> 00:05:43,400 Let me put it this way, once you're the CEO of a company that 115 00:05:43,400 --> 00:05:46,200 is monopolistic and Incredibly powerful. 116 00:05:46,700 --> 00:05:51,000 It's as if you get invited to a secret Club, a secret Club of 117 00:05:51,000 --> 00:05:56,300 CEOs of monopolistic companies and they highlight the rules, 118 00:05:56,400 --> 00:05:58,300 right? When you enter in the club they 119 00:05:58,300 --> 00:06:02,300 say, rule one. Being part of a monopolistic 120 00:06:02,300 --> 00:06:07,000 company is you do not talk about the monopolistic nature of your 121 00:06:07,000 --> 00:06:10,300 company. Rule, two is to not break. 122 00:06:10,400 --> 00:06:14,600 Rule 1, do not talk about the monopolistic nature of your 123 00:06:14,600 --> 00:06:17,400 company. You have to tell the public that 124 00:06:17,400 --> 00:06:19,700 you're a company, that faces lots of competition. 125 00:06:19,700 --> 00:06:21,700 You don't have a Stranglehold on the market. 126 00:06:21,900 --> 00:06:24,300 You are struggling. You're just hanging in there. 127 00:06:24,600 --> 00:06:28,500 That's what you do as the CEO of a monopolistic company. 128 00:06:28,600 --> 00:06:31,000 So with that, in mind, your We're going to hear a CEO like 129 00:06:31,000 --> 00:06:35,000 such an adult, come out and say, Microsoft, basically, controls 130 00:06:35,000 --> 00:06:36,400 everything in the corporate world. 131 00:06:36,500 --> 00:06:39,000 We have all of the most important applications, we Face 132 00:06:39,000 --> 00:06:42,300 minimal competition that we can. Frankly, just by, if they ever 133 00:06:42,300 --> 00:06:45,900 actually threatened us and all things are running as normal, we 134 00:06:45,900 --> 00:06:48,400 basically don't have to do much to maintain our Monopoly. 135 00:06:48,700 --> 00:06:51,100 He's never going to come out and say that you have to read that 136 00:06:51,100 --> 00:06:54,400 between the lines. Tim Cook will never come out and 137 00:06:54,400 --> 00:06:57,900 say that iOS is a monopoly, he'll never come out and say 138 00:06:57,900 --> 00:07:01,100 that even though it kind of is Is you're never gonna have the 139 00:07:01,100 --> 00:07:04,700 CEO of MasterCard which is clearly monopolistic and they 140 00:07:04,700 --> 00:07:07,800 own a duopoly with Visa. The CEO of MasterCard is never 141 00:07:07,800 --> 00:07:11,300 going to come out and say look we control the payment rails. 142 00:07:11,300 --> 00:07:14,100 Everything flows through us, we have a natural monopoly. 143 00:07:14,300 --> 00:07:16,400 People, use our products, we have incredibly little 144 00:07:16,400 --> 00:07:20,500 competition and anyone that tries to go around us, instead 145 00:07:20,500 --> 00:07:23,000 of through US does to their own detriment. 146 00:07:23,100 --> 00:07:25,900 He will never say that. The CEOs of monopolistic 147 00:07:25,900 --> 00:07:29,300 companies are often the ones that talk mostly about all the 148 00:07:29,300 --> 00:07:30,200 challenges. Changes. 149 00:07:30,200 --> 00:07:34,200 They face they talk about all the problems of company has all 150 00:07:34,200 --> 00:07:36,800 the competition they face and they do so because they know 151 00:07:36,800 --> 00:07:38,900 publicly that's what's best to highlight. 152 00:07:39,100 --> 00:07:42,200 Because in many cases the main challenge these companies face 153 00:07:42,500 --> 00:07:46,100 is legislation the government coming in and breaking up their 154 00:07:46,100 --> 00:07:48,900 natural monopolies. Now on the contrary many cases 155 00:07:48,900 --> 00:07:52,100 the CEO's that talked about their company being a monopoly 156 00:07:52,200 --> 00:07:55,600 and facing no competition and they can't even see competition 157 00:07:55,600 --> 00:07:58,600 with a telescope are in many cases, the companies that faced 158 00:07:58,600 --> 00:08:03,100 the most Competition. So a lot of this is completely 159 00:08:03,100 --> 00:08:06,500 in verse to what you would suspect as an investor, when 160 00:08:06,500 --> 00:08:08,800 you're listening to earnings calls and you're listening to 161 00:08:08,800 --> 00:08:11,900 companies, talk about their own company, the ones that are the 162 00:08:11,900 --> 00:08:15,800 most confident in their Market position are the ones that need 163 00:08:15,800 --> 00:08:17,900 to speak. The least amount about how 164 00:08:17,900 --> 00:08:20,900 powerful their business model. Is the companies that have the 165 00:08:20,900 --> 00:08:24,100 least powerful Market positions are the ones that have to 166 00:08:24,100 --> 00:08:27,300 convince investors. They have to talk openly about 167 00:08:27,300 --> 00:08:29,200 how powerful of a company they are. 168 00:08:29,800 --> 00:08:32,299 So keep that in mind when you're listening to earnings reports. 169 00:08:32,500 --> 00:08:36,400 Either way, a lot of investors, don't get this subject and what 170 00:08:36,400 --> 00:08:40,100 such a Nadella did speaking down about Microsoft had the effect 171 00:08:40,100 --> 00:08:42,600 of throwing cold water on the earnings report. 172 00:08:42,700 --> 00:08:45,000 And I don't think that that paints an accurate picture for a 173 00:08:45,000 --> 00:08:47,300 company of this quality. The main thing that I'll mention 174 00:08:47,300 --> 00:08:50,500 about Microsoft's report is even though things are decelerate in 175 00:08:50,500 --> 00:08:53,600 a little bit, they're slowing down the core products. 176 00:08:53,600 --> 00:08:56,600 The most profitable products in the most meaningful ones are 177 00:08:56,600 --> 00:09:00,100 still going really well. The server products, and Cloud 178 00:09:00,100 --> 00:09:03,400 services, they increased Revenue by 20%. 179 00:09:03,700 --> 00:09:06,400 All of their server products still grew at a twenty percent 180 00:09:06,400 --> 00:09:10,100 rate, the Azure business, their primary cloud service. 181 00:09:10,100 --> 00:09:14,600 Revenue growth was 31% and that's with currency being 182 00:09:14,600 --> 00:09:17,300 adjusted. If you held constant currency, 183 00:09:17,300 --> 00:09:20,200 which basically means if you took out foreign exchange rates, 184 00:09:20,500 --> 00:09:24,300 it grew at 38%, that's an astounding level of growth for 185 00:09:24,300 --> 00:09:26,200 Azure. So, their core products are not 186 00:09:26,200 --> 00:09:29,700 decelerate in that much, that is still very strong growth. 187 00:09:29,800 --> 00:09:32,000 'The so my opinion, even though this is a slow down this 188 00:09:32,000 --> 00:09:35,200 quarter, I think we can exercise a little patience here because I 189 00:09:35,200 --> 00:09:37,300 don't think this slowdown is going to last forever. 190 00:09:37,500 --> 00:09:40,600 The core businesses of Microsoft are still doing really well. 191 00:09:40,700 --> 00:09:43,800 A lot of the things that slow down where their Hardware Sales 192 00:09:44,000 --> 00:09:46,800 things that I don't think are as critical for the core business 193 00:09:46,800 --> 00:09:48,800 for Microsoft. Now, moving on, we're still 194 00:09:48,800 --> 00:09:50,600 looking at the year-to-date performance here. 195 00:09:50,600 --> 00:09:52,500 I want to go into the financial category. 196 00:09:52,600 --> 00:09:56,200 This is another one that I've built up heavily this year, SP 197 00:09:56,200 --> 00:09:59,300 Global and MasterCard. If you haven't studied these 198 00:09:59,300 --> 00:10:02,800 businesses, Is I recommend doing so because the more that I look 199 00:10:02,800 --> 00:10:06,900 into them the deeper, I dive the more I like these companies they 200 00:10:06,900 --> 00:10:09,300 fit basically. Every characteristic I look for 201 00:10:09,300 --> 00:10:13,200 in a compounder they have pricing power real pricing power 202 00:10:13,300 --> 00:10:16,600 where they raise prices for 10 years straight and they don't 203 00:10:16,600 --> 00:10:19,100 lose customers. As a consequence, they have 204 00:10:19,100 --> 00:10:22,400 almost no capex requirements. So these companies are 205 00:10:22,400 --> 00:10:25,200 incredibly Capital efficient. They have pricing power their 206 00:10:25,200 --> 00:10:26,900 monopolistic. They're highly entrenched 207 00:10:26,900 --> 00:10:29,600 businesses that I think, will grow their earnings per share. 208 00:10:29,800 --> 00:10:32,900 Air and free cash flow per share at a rate far exceeding. 209 00:10:32,900 --> 00:10:35,300 The S&P 500 over the next 10 years. 210 00:10:35,600 --> 00:10:39,600 I truly believe these companies will trounce the S&P 500 over 211 00:10:39,600 --> 00:10:42,100 the next 10 years. MasterCard, just reported their 212 00:10:42,100 --> 00:10:45,600 earnings and it was basically in line with expectations, which is 213 00:10:45,600 --> 00:10:48,800 exactly what I'm looking for. The CEO had commentary, that's a 214 00:10:48,800 --> 00:10:51,100 little bit different than what we're seeing in the economic 215 00:10:51,100 --> 00:10:53,600 reports. He says that the economy overall 216 00:10:53,600 --> 00:10:56,100 is pretty resilient that consumers are holding up and he 217 00:10:56,100 --> 00:10:58,900 speaks about travel. He said, quote as we look at the 218 00:10:58,900 --> 00:11:01,700 broader economy, We see the continued recovery of 219 00:11:01,700 --> 00:11:05,900 cross-border travel with volumes up 59 percent versus a year ago, 220 00:11:06,100 --> 00:11:09,800 and we're encouraged by Asia opening up further, while macro 221 00:11:09,800 --> 00:11:12,500 economic and geopolitical uncertainty persists, consumer 222 00:11:12,500 --> 00:11:15,300 spending has been remarkably resilient. 223 00:11:15,500 --> 00:11:18,400 We are well prepared to adjust our investment profile quickly 224 00:11:18,400 --> 00:11:20,900 if needed. That's another thing that being 225 00:11:20,900 --> 00:11:23,300 Capital, light allows you the company has a ton of 226 00:11:23,300 --> 00:11:25,100 flexibility. One more thing that I'd 227 00:11:25,100 --> 00:11:28,000 highlight from this earnings report is their return of 228 00:11:28,000 --> 00:11:30,900 capital to shareholders because MasterCard is such an 229 00:11:30,900 --> 00:11:33,600 efficiently ran business. What they're essentially able to 230 00:11:33,600 --> 00:11:37,900 do is reinvest very little back into their business and return 231 00:11:37,900 --> 00:11:41,000 all of their massive amounts of profits back to the investors, 232 00:11:41,300 --> 00:11:46,100 MasterCard, repurchased, 7.4 million shares at a cost of two 233 00:11:46,100 --> 00:11:49,800 point, four billion dollars and paid four hundred and seventy 234 00:11:49,800 --> 00:11:52,700 three million dollars in dividends if the stock price 235 00:11:52,700 --> 00:11:56,000 ever dips for a company like this, you know, that they're 236 00:11:56,000 --> 00:11:58,900 buying back, the shares aggressively, they will work on 237 00:11:58,900 --> 00:12:00,900 getting that stock. Back up through share 238 00:12:00,900 --> 00:12:04,500 repurchases, MasterCard is such an officially ran business that 239 00:12:04,600 --> 00:12:07,600 aside from some type of horrible disruption to their core 240 00:12:07,600 --> 00:12:09,700 business model. I think the company will 241 00:12:09,700 --> 00:12:13,700 continue to compound, it's free cash flow per share at 15 242 00:12:13,700 --> 00:12:16,500 percent over the next 10 years. And in terms of core risks to 243 00:12:16,500 --> 00:12:19,500 the business model, I believe the biggest one is government 244 00:12:19,500 --> 00:12:21,300 intervention. Now again we're still looking at 245 00:12:21,300 --> 00:12:23,700 year-to-date here and we're going on to the next category 246 00:12:23,800 --> 00:12:26,600 which is consumer. This is a category that I have 247 00:12:26,600 --> 00:12:29,900 not been adding to this year. In fact, all I've done in In 248 00:12:29,900 --> 00:12:33,400 this category so far is trim different positions. 249 00:12:33,700 --> 00:12:37,400 I've trimmed my Nike position by a pretty substantial amount. 250 00:12:37,500 --> 00:12:40,700 I really like Nike as a stock and a company, I think it's 251 00:12:40,700 --> 00:12:42,800 phenomenally. Well ran the metrics are 252 00:12:42,800 --> 00:12:44,900 incredible. The profitability ratios are 253 00:12:44,900 --> 00:12:47,200 incredible. The balance sheet is solid, 254 00:12:47,200 --> 00:12:49,500 there is nothing wrong with this business. 255 00:12:49,900 --> 00:12:52,800 But this stock price is just hard for me to wrap my head 256 00:12:52,800 --> 00:12:54,900 around no matter which way I looked at it. 257 00:12:54,900 --> 00:12:59,000 The stock is just expensive. It trades at a 36 Ford PE ratio 258 00:12:59,200 --> 00:13:01,900 the free cash. Close at like 1 percent right 259 00:13:01,900 --> 00:13:04,300 now, I've even ran through different discounted cash flow 260 00:13:04,300 --> 00:13:06,000 metrics based on different assumptions. 261 00:13:06,000 --> 00:13:08,600 Oh, no matter what way I look at the company, I keep coming to 262 00:13:08,600 --> 00:13:11,000 the conclusion that it's just a bit expensive. 263 00:13:11,000 --> 00:13:13,600 I thought it was time to take some gains and move the money to 264 00:13:13,600 --> 00:13:16,800 other companies that I think, present, a better risk reward in 265 00:13:16,800 --> 00:13:19,700 the restaurant category. Again, this is just year to date 266 00:13:19,700 --> 00:13:23,100 on these companies. I'm up and total over 6,000 on 267 00:13:23,100 --> 00:13:26,600 Texas, Roadhouse and 3,000 on Starbucks and I've not been 268 00:13:26,600 --> 00:13:28,400 buying or selling either of these companies. 269 00:13:28,400 --> 00:13:31,400 I've simply been holding them I'm very bullish on Texas 270 00:13:31,400 --> 00:13:33,300 Roadhouse. I still think this company is 271 00:13:33,308 --> 00:13:36,500 going to widely outperform the market, over the next couple of 272 00:13:36,500 --> 00:13:40,400 years, especially if demand stays relatively strong for 273 00:13:40,400 --> 00:13:42,300 restaurant spending. So we'll see how this one does 274 00:13:42,300 --> 00:13:44,400 the earnings reports. Next month, I'll give an update 275 00:13:44,400 --> 00:13:48,100 on it, but my assumption is it's going to be out growing a lot of 276 00:13:48,100 --> 00:13:50,300 growth companies. I think Texas Roadhouse will be 277 00:13:50,300 --> 00:13:53,800 outgrowing the majority of big Tech once again after the 278 00:13:53,800 --> 00:13:55,800 restaurant category we have my real estate holdings. 279 00:13:55,800 --> 00:13:59,200 These are real estate investment trusts I only hold one company 280 00:13:59,200 --> 00:14:03,000 right now which is Vici so far up, 6.8% year-to-date. 281 00:14:03,200 --> 00:14:06,500 This is a very large holding of mine and I have not bought any 282 00:14:06,600 --> 00:14:09,500 or sold any this year and I don't plan on trimming. 283 00:14:09,500 --> 00:14:12,900 This holding any time soon. I'm still incredibly bullish on 284 00:14:12,900 --> 00:14:16,000 beachy, although the company employs leverage because it's a 285 00:14:16,000 --> 00:14:19,900 real estate company, it has baked in pricing power, every 286 00:14:19,900 --> 00:14:23,000 single year they have contractual agreements to raise 287 00:14:23,000 --> 00:14:25,300 prices above the rate of inflation. 288 00:14:25,600 --> 00:14:28,900 So right there, we have the pricing power question solved 289 00:14:28,900 --> 00:14:30,900 and we also have a growing Oh, that aspect, because they 290 00:14:30,900 --> 00:14:34,200 continue to buy new properties. So, overall, I still like the 291 00:14:34,200 --> 00:14:36,500 valuation of the company, I still like the dividend 292 00:14:36,500 --> 00:14:38,500 payments, I like the growth prospects. 293 00:14:38,700 --> 00:14:41,700 And then last but not least the category, that's performed. 294 00:14:41,700 --> 00:14:45,300 The worst this year is the Industrials, which are actually 295 00:14:45,300 --> 00:14:48,800 in the red this year down 1.5 percent year-to-date. 296 00:14:48,800 --> 00:14:52,200 I don't normally love industrial Investments and the reason that 297 00:14:52,200 --> 00:14:55,600 I don't love them is because of their incredibly high amounts of 298 00:14:55,600 --> 00:14:59,200 capex. They require a ton of capital to 299 00:14:59,200 --> 00:15:02,400 run these This is lots of reinvestment back into the 300 00:15:02,400 --> 00:15:06,200 business year over year over year, for example, Union 301 00:15:06,200 --> 00:15:10,600 Pacific, and Canadian Pacific. The average capex that they have 302 00:15:10,600 --> 00:15:14,700 to spend proportionate to their revenue is around 15% per year. 303 00:15:14,700 --> 00:15:19,000 When you look at a company like Mastercard, or VISA or SP 304 00:15:19,000 --> 00:15:21,200 Global, it's less than a percent per year. 305 00:15:21,200 --> 00:15:25,300 So, these companies, spend a fortune in capex, they have lots 306 00:15:25,300 --> 00:15:27,300 of heavy Investments, they have to make back into their 307 00:15:27,300 --> 00:15:29,300 business. The reason why I still invest in 308 00:15:29,300 --> 00:15:31,600 these companies Knees. Despite them having high capex 309 00:15:31,800 --> 00:15:34,300 is because of their monopolistic Market structure. 310 00:15:34,400 --> 00:15:37,000 The fact that they're highly entrenched and I think they face 311 00:15:37,000 --> 00:15:39,800 very little competition and chance of disruption. 312 00:15:39,900 --> 00:15:42,200 I thought the earnings report was fine, it was nothing, 313 00:15:42,200 --> 00:15:45,000 amazing, the market, didn't seem to like it that much. 314 00:15:45,000 --> 00:15:48,100 The stock was down a couple percentage afterwards, but for 315 00:15:48,100 --> 00:15:51,800 the full year of 2020 to the company grew Revenue by 8%, 316 00:15:51,800 --> 00:15:54,900 which I think is good for Union Pacific because they struggle 317 00:15:54,900 --> 00:15:57,500 with that top line, revenue growth and their operating 318 00:15:57,500 --> 00:16:00,000 income was up six percent. Now, what I actually, At the 319 00:16:00,000 --> 00:16:04,300 market didn't like, the most was comments, that the CEO made soon 320 00:16:04,300 --> 00:16:06,900 after the earnings release. He went on to CNBC and he spoke 321 00:16:06,900 --> 00:16:11,400 about the overall economy. Yeah, so unlike say, the past 322 00:16:11,400 --> 00:16:14,700 three or four years, you've got this Dynamic of the FED raising 323 00:16:14,700 --> 00:16:18,700 interest rates very rapidly, which ultimately will destroy 324 00:16:18,700 --> 00:16:23,900 demand across markets and you've got consumers that have been 325 00:16:23,900 --> 00:16:26,500 telling us for quite some time that they're concerned. 326 00:16:26,700 --> 00:16:29,100 But they've been flush with cash. 327 00:16:29,700 --> 00:16:32,300 Mostly about transfer payments from the government, but also 328 00:16:32,300 --> 00:16:36,100 from a very hot jobs market. So you put those two together 329 00:16:36,500 --> 00:16:39,000 and it does appear, that consumers are starting to pull 330 00:16:39,000 --> 00:16:40,900 in their horns. On Goods, consumption. 331 00:16:41,100 --> 00:16:44,400 They're still consuming at a high rate on experiences and 332 00:16:44,400 --> 00:16:48,800 travel and entertainment and it's just not clear yet. 333 00:16:48,800 --> 00:16:52,800 Exactly what the impacts going to be of the FED interest rate 334 00:16:52,800 --> 00:16:55,300 increases. Although clearly, you can see 335 00:16:55,300 --> 00:16:58,100 early Innings, it's having an impact on things like housing. 336 00:16:58,100 --> 00:17:00,900 You see the commonality here another CEO of a company that's 337 00:17:00,900 --> 00:17:04,300 widely considered an oligopoly and has entrenched Market 338 00:17:04,300 --> 00:17:08,700 position is not talking glowingly about the future, he's 339 00:17:08,700 --> 00:17:11,300 saying that things are a little bit less predictable. 340 00:17:11,800 --> 00:17:15,000 We have some employment issues and he's highlighting all the 341 00:17:15,000 --> 00:17:18,099 challenges but he can't highlight the strengths of his 342 00:17:18,099 --> 00:17:20,300 company. The CEO is not going to come out 343 00:17:20,300 --> 00:17:23,000 and say we Face very little competition. 344 00:17:23,099 --> 00:17:25,200 So we can continue to employ pricing power. 345 00:17:25,200 --> 00:17:28,600 We can raise prices because our customers unfortunately can't 346 00:17:28,600 --> 00:17:31,200 really go to anyone else. Yes, you simply not going to say 347 00:17:31,200 --> 00:17:32,300 that. Now, if I go back to the 348 00:17:32,300 --> 00:17:34,900 earnings release, I want to jump to what I actually consider to 349 00:17:34,900 --> 00:17:36,600 be the most important thing to me. 350 00:17:36,700 --> 00:17:38,000 This is what I'm looking for here. 351 00:17:38,000 --> 00:17:41,200 The 2023 guidance, what they outline here is full. 352 00:17:41,200 --> 00:17:44,000 You're operating ratio Improvement, so they're saying 353 00:17:44,000 --> 00:17:46,000 that margins are going to go up there. 354 00:17:46,000 --> 00:17:50,300 Operating efficiency is going to go up and that is the story of 355 00:17:50,300 --> 00:17:53,600 the railroads becoming more and more efficient every single day. 356 00:17:53,900 --> 00:17:57,300 Then we have that next, very difficult thing that I look for 357 00:17:57,300 --> 00:18:01,400 in companies pricing power. The ability to raise the price 358 00:18:01,400 --> 00:18:05,300 of your product, above the rate of inflation for 10 years, 359 00:18:05,300 --> 00:18:09,200 straight without losing customers to competition, they 360 00:18:09,200 --> 00:18:13,100 outline that they're expecting to price dollars in excess of 361 00:18:13,100 --> 00:18:16,000 inflation dollars. So they're raising their prices 362 00:18:16,000 --> 00:18:20,000 in excess of inflation and they state that openly why are they 363 00:18:20,000 --> 00:18:21,800 able to do that? Because their railroads and 364 00:18:21,800 --> 00:18:25,100 their customers frankly don't have many other options and then 365 00:18:25,100 --> 00:18:27,700 in terms of capital allocation like I outlined they spend a 366 00:18:27,708 --> 00:18:29,400 significant amount of their revenue. 367 00:18:29,700 --> 00:18:32,000 On capex. And this case they're aiming for 368 00:18:32,000 --> 00:18:34,900 less than 15%. That's a lot of money spent on 369 00:18:34,900 --> 00:18:36,900 capex. This is a downside of the 370 00:18:36,908 --> 00:18:40,200 company but overall I really liked the fact that they pay a 371 00:18:40,200 --> 00:18:42,400 dividend with a low payout ratio. 372 00:18:42,600 --> 00:18:45,800 And then everything else goes back to share repurchases, which 373 00:18:45,800 --> 00:18:49,100 they repurchased over four percent of the shares 374 00:18:49,100 --> 00:18:52,200 outstanding over the past year. So, even though the railroads 375 00:18:52,200 --> 00:18:55,400 haven't surge like the rest of the market this year so far, I'm 376 00:18:55,400 --> 00:18:57,900 still very bullish on them. And I'm still buying these 377 00:18:57,900 --> 00:18:59,300 companies. I'll be adding to these 378 00:18:59,300 --> 00:19:01,500 positions. And as long as they lack the 379 00:19:01,500 --> 00:19:03,700 rest of the market. So this is what the portfolio 380 00:19:03,700 --> 00:19:05,400 looks like. Year-to-date you can let me know 381 00:19:05,400 --> 00:19:07,700 what you think of it. If you agree with my byes, if 382 00:19:07,700 --> 00:19:11,000 you disagree, I'd be interested to know and I'm happy with the 383 00:19:11,000 --> 00:19:13,000 performance year to date as well as all time. 384 00:19:13,000 --> 00:19:14,600 I think we're headed in the right direction. 385 00:19:14,900 --> 00:19:16,300 Now let's go ahead and move on to some news. 386 00:19:16,300 --> 00:19:18,700 We have the headline news that u.s. 387 00:19:18,700 --> 00:19:23,400 GDP Rose 2.9 percent in the fourth quarter and there's a lot 388 00:19:23,400 --> 00:19:27,900 of different takes on this news like most economic data, you can 389 00:19:27,900 --> 00:19:29,600 look at it positively or negatively. 390 00:19:29,700 --> 00:19:32,500 Lee, I'll give you the basic argument for each side. 391 00:19:32,500 --> 00:19:34,800 The argument that the Wall Street Journal makes and what 392 00:19:34,800 --> 00:19:37,800 most economists are making right now, is that this news really 393 00:19:37,800 --> 00:19:40,200 isn't as good as it. Seems the overall economy 394 00:19:40,200 --> 00:19:43,100 slowing down and we're coming out of an environment. 395 00:19:43,100 --> 00:19:45,500 That was really easy going into environment. 396 00:19:45,500 --> 00:19:48,100 That's really difficult. They say the fourth quarter, 397 00:19:48,100 --> 00:19:51,300 capped a year of economic slowdown in part reflecting a 398 00:19:51,300 --> 00:19:55,000 return to a more normal pace of growth after output surge amid 399 00:19:55,000 --> 00:19:58,300 business, re-openings fiscal stimulus and waning pandemic in 400 00:19:58,300 --> 00:20:01,000 2021. All right, so Just got done with 401 00:20:01,000 --> 00:20:04,400 our pockets, being filled with money and being locked up in our 402 00:20:04,400 --> 00:20:06,300 homes. And finally, we are able to 403 00:20:06,300 --> 00:20:08,600 spend that money. We're able to travel. 404 00:20:08,800 --> 00:20:12,100 So naturally, the economy is rebounding a little bit but then 405 00:20:12,100 --> 00:20:15,400 they go on to highlight that the economic output grew one percent 406 00:20:15,400 --> 00:20:18,700 in the fourth quarter of 2022 compared with a year earlier 407 00:20:18,900 --> 00:20:23,100 down from five point seven, percent growth in 2021 and 2.6 408 00:20:23,100 --> 00:20:27,500 percent growth in 2019. So overall the longer-term 409 00:20:27,500 --> 00:20:30,500 trends are that the economy is slowing. 410 00:20:30,500 --> 00:20:32,400 It's actually moderating and Pace. 411 00:20:32,700 --> 00:20:35,800 Whether you look at that as a good or bad thing is up to you, 412 00:20:36,100 --> 00:20:38,800 in my opinion, I actually think that this is a good thing. 413 00:20:39,100 --> 00:20:42,000 If we have an overheating economy, that would be basically 414 00:20:42,000 --> 00:20:44,500 an invitation to the FED to raise interest rates 415 00:20:44,600 --> 00:20:46,900 dramatically more. So, I think the economic growth 416 00:20:46,900 --> 00:20:49,700 actually, moderating is a good thing in terms of the feds 417 00:20:49,700 --> 00:20:53,300 interactions, and then the other bit of news is the layoffs, this 418 00:20:53,300 --> 00:20:56,300 is the more sad news. I really don't enjoy, seeing 419 00:20:56,300 --> 00:20:59,600 people get laid off from work even when it's Justified from, 420 00:20:59,600 --> 00:21:02,200 Company even when it's responsible move by the 421 00:21:02,200 --> 00:21:05,900 employer, it's still not a fun thing to see people losing their 422 00:21:05,900 --> 00:21:08,100 livelihood, losing their income stream. 423 00:21:08,100 --> 00:21:11,000 That's basically like a worst nightmare for anybody. 424 00:21:11,000 --> 00:21:13,700 That depends on that income stream and that's part of the 425 00:21:13,700 --> 00:21:17,100 reason building this channel is trying to help people find a 426 00:21:17,100 --> 00:21:18,800 different way to find passive income. 427 00:21:18,800 --> 00:21:23,000 The ability to at least survive without your primary job with 428 00:21:23,000 --> 00:21:25,800 enough effort and time we can get to a point where we're not 429 00:21:25,808 --> 00:21:29,200 totally reliant on our primary income but layoffs have been 430 00:21:29,200 --> 00:21:30,900 picking up. Up and they started off with the 431 00:21:30,900 --> 00:21:34,900 biggest companies that are the trendsetters once big Tech does 432 00:21:34,900 --> 00:21:38,000 anything, everyone else follows. That's the way these things 433 00:21:38,000 --> 00:21:39,800 work. A lot of companies simply 434 00:21:39,800 --> 00:21:44,000 modeled their covid policies. After big Tech if big Tech was 435 00:21:44,000 --> 00:21:46,500 working for home, all the other companies would work from home. 436 00:21:46,500 --> 00:21:49,600 If big Tech required wearing masks in the office, other 437 00:21:49,600 --> 00:21:52,200 company said, you had to wear masks in the office other 438 00:21:52,200 --> 00:21:55,800 companies, basically copied their HR policies and their 439 00:21:55,800 --> 00:21:59,000 corporate policies and now other companies have the leeway to do 440 00:21:59,000 --> 00:22:01,200 layoffs. Because big Tech has done 441 00:22:01,200 --> 00:22:03,600 layoffs. So this is a concerning trend of 442 00:22:03,600 --> 00:22:05,900 rising layoffs. In, in my opinion, I think this 443 00:22:05,900 --> 00:22:08,100 is gonna continue. I think a lot of these companies 444 00:22:08,100 --> 00:22:10,700 that did a big round of layoffs are going to be doing another 445 00:22:10,700 --> 00:22:12,200 round of layoffs. When you look at the 446 00:22:12,208 --> 00:22:14,600 fundamentals of them, many of them hired. 447 00:22:14,600 --> 00:22:17,700 So many more employees than the fundamentals of the companies 448 00:22:17,700 --> 00:22:19,600 justify. And I think we're going to see a 449 00:22:19,600 --> 00:22:22,100 pretty big reversion over the next year. 450 00:22:22,100 --> 00:22:24,500 Now on the subject of layoffs with these companies like 451 00:22:24,500 --> 00:22:26,700 Google, one of the things that I've been highlighting over the 452 00:22:26,700 --> 00:22:29,500 past year are these videos of a day in the life. 453 00:22:29,600 --> 00:22:32,800 Life of a Google employee. And the reason I've been 454 00:22:32,800 --> 00:22:35,300 highlighting this is because I think they're so incredibly 455 00:22:35,300 --> 00:22:39,400 revealing of the problems with the culture of these companies, 456 00:22:39,800 --> 00:22:42,600 you can even see from watching any of these videos basically 457 00:22:42,600 --> 00:22:45,500 all they're doing or at least all they're showing here is 458 00:22:45,500 --> 00:22:48,700 eating tons of good food hanging around and doing minimal. 459 00:22:48,700 --> 00:22:51,600 Work it to the office at around 6, a.m. to beat the traffic and 460 00:22:51,600 --> 00:22:53,100 just get a nice workout and around 7:00. 461 00:22:53,100 --> 00:22:54,400 A.m. I'm getting ready to the locker 462 00:22:54,400 --> 00:22:55,700 room. Getting breakfast at this really 463 00:22:55,700 --> 00:22:56,900 cute. Cafe at ADM. 464 00:22:56,900 --> 00:22:59,500 Got some Crepes iced Americano, which is so. 465 00:22:59,800 --> 00:23:01,900 And at around eight, Twenty Eight got to work. 466 00:23:01,900 --> 00:23:03,700 I usually get a snack at around 10 a.m. 467 00:23:03,800 --> 00:23:05,100 And today, I forgot a charging cable. 468 00:23:05,100 --> 00:23:07,800 So I went to the vending machine to get one and 11:30 is usually, 469 00:23:07,800 --> 00:23:10,000 when I eat lunch, I got a whole hodgepodge of things including 470 00:23:10,000 --> 00:23:12,800 pizza and this is the view that I like to eat with at 12:00, I 471 00:23:12,800 --> 00:23:14,800 guess some more caffeine and just spend the afternoon doing 472 00:23:14,800 --> 00:23:16,400 some more work. I like to do stress at the end 473 00:23:16,400 --> 00:23:17,800 of the day. And today I booked a massage 474 00:23:17,800 --> 00:23:19,300 appointment. So I have it for an hour and 475 00:23:19,300 --> 00:23:21,800 then go home at 5:30. These are the type of videos 476 00:23:21,800 --> 00:23:24,300 that we've looked at. And I've repeatedly said, I 477 00:23:24,300 --> 00:23:26,200 don't think these videos are a good idea. 478 00:23:26,500 --> 00:23:29,000 I think they represent the company poorly. 479 00:23:29,200 --> 00:23:32,400 It's bad PR for the company because it makes it look like 480 00:23:32,400 --> 00:23:34,300 the employees. There are wasting money and 481 00:23:34,300 --> 00:23:36,400 resources and I think if employees are going to make 482 00:23:36,400 --> 00:23:39,400 these videos, they should focus more on the work that they do. 483 00:23:39,400 --> 00:23:40,700 What do they actually do at work? 484 00:23:40,700 --> 00:23:43,100 I think that'd be very interesting to see, I'm sure 485 00:23:43,100 --> 00:23:45,000 they do. Lots of high-level things things 486 00:23:45,000 --> 00:23:46,600 that are very important highlight. 487 00:23:46,600 --> 00:23:49,800 Some of that stuff, it would look a lot better to people that 488 00:23:49,800 --> 00:23:51,400 are watching this on the sidelines. 489 00:23:51,500 --> 00:23:54,100 Now, this employee hair gets to the end of this day in the life 490 00:23:54,100 --> 00:23:56,000 of video. And then she has an important 491 00:23:56,000 --> 00:23:59,400 update for us at 5:30 Big Life Update. 492 00:23:59,700 --> 00:24:04,000 Got laid off yesterday. So, that's the end of that. 493 00:24:04,100 --> 00:24:05,600 And now we're seeing more and more of these videos. 494 00:24:05,600 --> 00:24:07,800 Pop up of people getting laid off from Co. 495 00:24:07,800 --> 00:24:10,900 I started off with a cinnamon Galaxy churro and so she gets 496 00:24:10,900 --> 00:24:13,300 laid off from Google and heads to Disneyland for the day. 497 00:24:13,400 --> 00:24:16,000 Now, what she said here was correct as far as I can tell, 498 00:24:16,000 --> 00:24:19,500 there was no performance-based layoffs at Google. 499 00:24:19,700 --> 00:24:22,700 Lots of people that had very high marks got laid off. 500 00:24:22,800 --> 00:24:25,200 Lots of people that were tenured that worked at Google for a long 501 00:24:25,200 --> 00:24:28,700 period of time, got laid off and the CEO of Google. 502 00:24:28,700 --> 00:24:32,200 Sundar pichai, is taking a lot of heat right now for the way. 503 00:24:32,300 --> 00:24:34,300 At this happened. In fact, Google just recently 504 00:24:34,300 --> 00:24:37,300 held a town hall where they described it as animated because 505 00:24:37,300 --> 00:24:41,100 there's a lot of very frustrated employees and in this case I 506 00:24:41,100 --> 00:24:44,000 actually agree with many of the employees complaints in the town 507 00:24:44,000 --> 00:24:45,000 hall. Sundar pichai. 508 00:24:45,000 --> 00:24:47,500 Is taking a lot of heat and a lot of different accusations and 509 00:24:47,500 --> 00:24:51,500 questions and he tries to justify the reason that they 510 00:24:51,500 --> 00:24:55,500 over hired and he tries to explain why Google over hired 511 00:24:55,500 --> 00:24:58,700 and this is an explanation that I just don't understand. 512 00:24:58,800 --> 00:25:03,000 Pichai said that 20:21 marked quote, one of the Longest years 513 00:25:03,000 --> 00:25:06,000 we've ever had in the history of the company. 514 00:25:06,300 --> 00:25:10,300 With 41 percent Revenue growth Google increased headcount to 515 00:25:10,300 --> 00:25:14,100 match that expansion and pichai said that the company was 516 00:25:14,100 --> 00:25:19,300 assuming growth would persist. Now, first of all, did Sundar, 517 00:25:19,300 --> 00:25:23,100 pichai really believe? That growth would continue at a 518 00:25:23,100 --> 00:25:26,800 rate of forty one percent for a company, the size of Google 519 00:25:27,100 --> 00:25:29,700 because I have a very difficult time believing that any 520 00:25:29,700 --> 00:25:32,200 reasonable person would believe that growth would? 521 00:25:32,300 --> 00:25:35,600 Would persist at anywhere close to this level that there would 522 00:25:35,600 --> 00:25:39,200 be no reversion to the mean, I'm not Sundar pichai. 523 00:25:39,200 --> 00:25:42,200 I'm not as knowledgeable as him, I'm not as smart as him but I've 524 00:25:42,200 --> 00:25:45,400 highlighted many times of my channel, the anomaly of growth 525 00:25:45,400 --> 00:25:49,400 they had in 2021 and how that was likely not going to continue 526 00:25:49,600 --> 00:25:52,000 when things like that happen. There's almost always a 527 00:25:52,000 --> 00:25:54,500 reversion. So surely Sundar pichai knew 528 00:25:54,500 --> 00:25:57,500 that this growth was not going to persist and him saying that 529 00:25:57,500 --> 00:26:00,600 he hired thirty thousand extra employees on the assumptions, 530 00:26:00,600 --> 00:26:04,100 growth would just continue In perpetuity I think is a little 531 00:26:04,100 --> 00:26:07,300 bit upsetting, I don't buy that excuse at all but that was the 532 00:26:07,300 --> 00:26:09,500 decision that was made in that context. 533 00:26:09,500 --> 00:26:12,100 We made a set of decisions that might have been right? 534 00:26:12,200 --> 00:26:17,100 If the trends continued again if the trends continued if Google 535 00:26:17,100 --> 00:26:22,200 kept growing at 40%, if YouTube Revenue kept growing at 40% per 536 00:26:22,200 --> 00:26:24,800 year, there's no way these Trends were continuing at that 537 00:26:24,800 --> 00:26:27,800 rate of speed aside from that. There's another problem. 538 00:26:27,800 --> 00:26:30,000 I have with Sundar pichai, is assumptions here. 539 00:26:30,200 --> 00:26:33,000 He says, you have to remember that if If the trends had 540 00:26:33,000 --> 00:26:36,700 continued and we had not hired to keep Pace, we would have 541 00:26:36,700 --> 00:26:39,200 fallen behind in many areas of the company. 542 00:26:39,800 --> 00:26:42,700 Now this part I'm a little bit baffled at as well. 543 00:26:42,800 --> 00:26:45,900 I don't understand it. Google is a highly scalable 544 00:26:45,900 --> 00:26:49,400 business with a ton of operating leverage with an extremely 545 00:26:49,400 --> 00:26:52,800 efficient Core Business in Search and YouTube, the 546 00:26:52,800 --> 00:26:56,300 properties that they own are not like Amazon's they don't have to 547 00:26:56,300 --> 00:26:59,500 hire warehouse workers. They're not like Union Pacific. 548 00:26:59,500 --> 00:27:02,100 They don't have to lay Railway to grow their business. 549 00:27:02,700 --> 00:27:06,100 Their company, that is incredibly efficient, Google 550 00:27:06,100 --> 00:27:09,000 searches one of the best highest margins most efficient 551 00:27:09,000 --> 00:27:11,600 businesses on Earth. So I have a difficult time 552 00:27:11,600 --> 00:27:14,700 understanding, why they would have fallen behind if they 553 00:27:14,700 --> 00:27:18,100 didn't hire, as many employees. So I think a lot of this is the 554 00:27:18,100 --> 00:27:20,400 fault of a management. And I think it's something that 555 00:27:20,400 --> 00:27:23,700 a lot of the bigger tech companies did Amazon over hired 556 00:27:23,700 --> 00:27:26,900 as well, Microsoft, probably over hired in parts of their 557 00:27:26,900 --> 00:27:29,000 company. But Google I think was the one 558 00:27:29,000 --> 00:27:31,400 that did this to the most extreme now for those of you 559 00:27:31,408 --> 00:27:33,900 that might accuse me A of having hindsight bias and saying 560 00:27:33,900 --> 00:27:37,600 everything's 20/20 in hindsight. I wasn't just saying this. 561 00:27:37,600 --> 00:27:41,800 In hindsight, I have videos mid last year over six months ago, 562 00:27:41,800 --> 00:27:44,400 questioning why the company was still hiring. 563 00:27:44,400 --> 00:27:47,800 So many employees, this has been an ongoing problem that I've 564 00:27:47,800 --> 00:27:50,200 highlighted time and time again with Google. 565 00:27:50,200 --> 00:27:52,200 And they say, in terms of the employees, that was laid off. 566 00:27:52,200 --> 00:27:55,200 There was a lot of things considered their skillset, how 567 00:27:55,200 --> 00:27:58,800 crucial, their role Buzz, their experience, their relationships, 568 00:27:58,800 --> 00:28:00,700 their performance, so on and so forth. 569 00:28:00,700 --> 00:28:04,300 So there is no one Saying that determined it, I think a lot of 570 00:28:04,300 --> 00:28:06,900 it just came down to where they could cut costs the most. 571 00:28:06,900 --> 00:28:09,000 Now, the last thing that I want to mention is a note from 572 00:28:09,000 --> 00:28:12,300 Morningstar, and I want to give Morningstar an award hair for 573 00:28:12,300 --> 00:28:15,900 this note, the award that I'll give them is being latest to the 574 00:28:15,900 --> 00:28:18,000 game. The latest one to figure 575 00:28:18,000 --> 00:28:21,100 something out that the last person to actually figure out 576 00:28:21,100 --> 00:28:24,700 the obvious, they have apple here, which they currently give 577 00:28:24,800 --> 00:28:27,500 a three star rating. And then just recently, they 578 00:28:27,500 --> 00:28:31,900 decided to upgrade Apple from a narrow economic moat to a wide 579 00:28:31,900 --> 00:28:33,600 economic. Anomic mode and they've raised 580 00:28:33,600 --> 00:28:36,900 the fair value to $150. So, there you have it from 581 00:28:36,900 --> 00:28:39,700 Morningstar. They finally acknowledge the 582 00:28:39,700 --> 00:28:42,200 obvious and I thought we should take some time and appreciate 583 00:28:42,200 --> 00:28:44,000 them for doing that. Now, that's all for this 584 00:28:44,000 --> 00:28:45,800 episode. I hope you enjoyed and I'll see 585 00:28:45,800 --> 00:28:33,600 you in the next one. Anomic mode and they've raised 586 00:28:33,600 --> 00:28:36,900 the fair value to $150. So, there you have it from 587 00:28:36,900 --> 00:28:39,700 Morningstar. They finally acknowledge the 588 00:28:39,700 --> 00:28:42,200 obvious and I thought we should take some time and appreciate 589 00:28:42,200 --> 00:28:44,000 them for doing that. Now, that's all for this 590 00:28:44,000 --> 00:28:45,800 episode. I hope you enjoyed and I'll see 591 00:28:45,800 --> 00:28:46,500 you in the next one.