Welcome back everyone. Today on details of Carlson
Show, Meta's fast growing competitor to Twitter threads
that reached 100 million users after only a couple of days.
Well, user engagement is now reportedly dropping like a rock.
It's down 70% from its high. We're going to take a look at
what's going on with threads. We also have some interesting
news that Sergey Brin, one of the original founders of Google,
as apparently back in the trenches working again at
Google, specifically focused on AI projects.
Why did he return? Why is he focusing on AI?
What does this mean with Google? We're going to be taking a look
at it now. We of course had this week
kickoff earnings with notable companies, Tesla and Netflix
giving their earnings. We have interviews on Netflix
with Tom Rogers and we have Dan Ives giving his commentary on
Tesla. So be looking at both of these
interviews and seeing what we can learn from this week's
earnings. And then of course, it's Friday,
which means we turn to TikTok and try to get the insights from
the best investors, the best financial advice on the web.
And in this case, this woman here is going to tell us how to
turn an incredibly small amount of money into a much, much
larger amount of money. I show you how I turned my
initial $300.00 investment into well over 6 figures in a span of
two years. A $300.00 investment into over 6
figures in less than two years. That is a rapid rate of growth
that puts her into one of the best investors in the world, so
I'm excited to go through this one.
Now, this has been a really fun week.
I love earnings season because we get a check in on these
companies, see how they're doing, see if they're
compounding or if things go wrong can.
It brings a lot of excitement and fun into investing, but it's
also very informative. Now this week for me has been a
great week. My companies, I think have done
really well. Granted, most of them themselves
have not reported earnings, so next week is going to be the
real test for My Portfolio. But as of the past five days,
this portfolio, my main one, is up 1.73%, outpacing the S&P 500.
I'm very happy with the performance here.
We're making gains, we're layering gains on every single
week. Now if I look at this on a case
by case basis and see what happened over the past week, we
can just take a quick glance. S&P Global made good gains 2%.
MasterCard was one of the outliers, down .4%.
I'll forgive MasterCard for this past week, but it's one of the
worst performers in My Portfolio.
We have Intuit, which is making huge gains over the past month.
It's up 3% just this week. Intuits, one of the newer
holdings in the portfolio. I think it's a wonderful
company. We look at the tech category.
Microsoft is in the green ever so slightly.
We have Apple up 1.32% over the week.
In the real estate category, we have my biggest gainer for the
week, up 4%. In the consumer category, we
have my main holding care, Costco, that's up 2.39%.
Texas Roadhouse is hitting all time highs, going up 1.82%,
hitting prices above $116. Starbucks is also making some
gains. It's up 1.16%.
And then even the railroads. I've been waiting around for
these companies to do something and they're finally making some
gains. Canadian Pacific is up 1%.
Union Pacific is up 2.38% over the past five days.
In the past week, that's the combined $8500.
Now, we don't want to get complacent here.
A lot of these gains are from market momentum, from bullish
sentiment, from people that used to be in cash now piling money
back into the market. So we have to remain cautious
and on guard. And if you know me as an
investor, I become very almost nervous and cautious and
concerned. When things seem too good to be
true, when stock prices are racing up, when the portfolio is
surpassing 10s of thousands of dollars seemingly every couple
of days, that's when I become nervous.
I get a little bit of a grimace face hair when things are going
down, when stocks are going in the red every single day, when
there's continued downward momentum, that's when I become
very greedy. I get excited when that happens.
That's what I'm doing. Big buys.
That's what I'm depositing money that's in my savings account to
buy and scoop up companies at lower P/E's and lower free cash
flow yields. But right now I'm in the nervous
mode. I'm a little bit cautious right
now. I'm just feeling like investors
are a little too bold this week. We're a little too aggressive,
so I'm remaining very cautious. I'm watching my companies
closely. I'm looking at the fundamentals
and the intrinsic values. I refuse to have FOMO or get
swept up with the excitement of the herd.
And if you watched my previous video, you would see that I
created a chart here that had my valuation estimates, what I
assume is the intrinsic value of each of my holdings and my watch
list. And I'm still referencing this.
Again, next week is when most of the companies report their
earnings. So we're going to get an update
on this and maybe we'll get a big sell off, maybe we'll have a
big pull back. I'll be looking at which company
pulls back and I might buy an aggressive amount of that
company. Maybe it's on my watch list.
If all the companies in My Portfolio do really well and we
don't have any type of pullback and we have a good one and one
of these companies on the watch list, I may add these as a new
position to the passive income portfolio.
So this next week is going to be a very busy one.
You're going to want to tune in. I'm going to have a lot of
videos on earnings reports, reactions to them, what I think
has happened with these companies, the intrinsic value,
the fundamental direction, we're going to be covering a ton and
ultimately I'll decide what I'm going to be doing with this
cash. So make sure you're tuned in
next week, make sure you're subscribed with the Bell
notification. So I look forward to the busy
earnings week ahead. Now moving on to some news we
have, we have some a little disappointing news for meta
investors. I'm sure this one's not going to
be met with a lot of enthusiasm by meta investors, but
unfortunately Threads, the socalled Twitter killer, is
having a bit of a pullback in engagement and usage.
The report states that for the second week in a row, the number
of daily active users has declined on threads, falling to
13 million, down from around 70% from the July 7th peak.
It shows the initial peak of the honeymoon period of excitement
and curiosity. What is this new threats?
Is it better than Twitter? How does it function?
Does it have a nice animation? It all looks interesting at the
beginning, but then people started to go right back to what
they're using before. If they came from Instagram,
they went back to Instagram. If they came from Twitter, they
started going back to Twitter. It's down 70% from its peak,
down to 13 million daily active users.
It raced up to 100 million registered users, which was
incredible growth and a lot of people thought it would overtake
Twitter right away. But the amount of daily active
users is much more important than the total number of
registered users. Registering just takes one step.
Using the app every single day is what's really difficult to
accomplish. The average time spent is also
declining on threads. It's decreased by 4 minutes down
to 19 minutes on average. Twitter, on the other hand, has
daily active users remaining steady at around 200,000,000.
So Twitter has around 15 times the daily active users that
Threads has. So a lot of people that thought
it would instantly overtake it. It doesn't seem like that's
happening. And even though Twitter has 15
times the daily active users currently the average time spent
on Twitter is 30 minutes a day, which is a good 10 minutes over
threads. So people are using Twitter more
and they're using Twitter longer.
So let's just do an examination of what went right here and what
went wrong. The first thing that went right
here is Mark Zuckerberg timed the release of threads really
well. He saw weakness in Twitter.
Twitter was rate limiting people at the time.
It caused a lot of bad blood with Twitter users.
They did not like being rate limited.
Even though the rate limiting affected less than 1% of Twitter
users, it was still frustrating to a lot of people.
Threads was released right during that time period.
They took advantage of a weakness in Twitter and they got
the influx of users. But the big problem is they
rushed it out ahead of schedule and they don't have many of the
features in parity with Twitter. They don't have advanced
searches, They don't have chronological feeds, They don't
have tickers that you can search in and out.
They don't have a lot of the basic support that Twitter has.
For a lot of those reasons, including stuff like not being
able to direct message people, Twitter became preferred again
very quickly after trying out threads and that's where we see
the decline and users now. A lot of this is expected with
any type of huge viral boom. Typically, it doesn't just
continue to go up in a straight line.
You can see some big pull back after the initial reaction,
after the initial interest in the app.
And in my opinion, if I was a met investor, I would not be too
concerned about this. I think it's just a temporary
thing for them. They'll continue to build usage
over time as they stabilize and grow new features in the app.
But the big message here is that network effects are real.
They are very, very difficult to overcome.
When a lot of people use a certain thing, it's very
difficult to get them to stop using that certain thing.
Twitter has stood up to many competitors.
Many new Twitter clones have come out.
Meta has positioned themselves as by far the biggest threat,
and even Meta is struggling at fighting against those strong
network effects. So when you look at your
companies and your portfolio, consider the network effects
your companies have. Why is MasterCard such a great
company with such a significant Moat The network?
They literally have network effects.
So many people use them because so many people use them.
The same thing with S&P Global, The same thing with Intuit.
And their software network effects are everywhere.
They provide tremendous moats. The moats can be broken, but
it's very, very difficult. Now, we also have a bit of
surprising news here that Sergey Brin, one of the original
founders of Google, a guy that's worth nearly $100 billion, is
back in the trenches working at Google.
He has worked closely with a group of researchers building
Google's long-awaited AI model, Gemini.
They have discussed technical matters such as lost curves, a
way of measuring an AI program's performance, overtime and Brim
has convened weekly discussions of new AI research with Google
employees. He also has intervened in
personal matters, such as the hiring it sought after
researchers, according to people familiar with this matter.
Now, obviously something around this project has caught Bren's
attention because if you're worth $100 billion, you don't
have to do anything that you don't want to do.
So he's doing this just because he's interested in it.
He wants to help out with this. Gemini is Google's attempt to
build the general purpose AI program that can rival Open Ai's
ChatGPT 4 model. And they're saying that this
program will be available later this year.
Now, I don't know that Brin's presence here will be extremely
impactful. I don't know if he's an AI
expert. He's obviously very intelligent,
so he's probably going to help out with the effort.
But I also think it's a show of support of how important this
project is, Something cool enough to make it so that
someone that's retired worth a ton of money, has a great deal
of interest in this and is willing to go back to work.
So Google's still pushing forward heavily with AI, and I'm
excited to see what they come out with later this year.
Now, Next up, we have Netflix's earnings report.
I've made a previous video about this because I thought that the
earnings report was very good overall.
I thought it was a very strong report.
Netflix gained 5.9 million new subscribers.
That's a very good number of subscribers.
They beat on their earnings by a decent margin.
They slightly missed on their revenue estimate.
But when a company has this big of expectations going into
earnings, when it has the type of run up that Netflix has had
this year, it's very difficult to surpass expectations.
The company's literally up 50% just over the past couple of
months. So it's trading down a little
bit, giving up some of the prior gains going back just a couple
weeks. So despite the sell off, I
actually believe that Netflix's earnings report was pretty
strong overall. Now we have Tom Rogers on CNBC
who has been someone that so far has been spot on on Netflix.
He's really made all the right calls with this company.
Let's step back a minute. Contrast that earnings call with
the Eiger interview with David Faber last week and it's it's.
Night and day, you're talking about a company with Netflix
that just doesn't have to deal with the burden of decline.
And what happens when your current business model is thrown
up in the air and you have to recreate a new one.
This was all forward-looking. It was about accelerating
revenue. It was about increasing margin
increase. Using cash flow, it was all
about growth. And you can really contrast that
with the very difficult situation of the legacy media
companies made worse by the strike, as you say, he points
out something that's been a struggle for Netflix's
competitors, Disney having the legacy media business being a
huge problem for the company, to the point where Disney's Bob
Iger says that he's considering selling off that portion of the
business. Netflix doesn't have to worry
about that. Netflix is just worrying about
future growth, future profits, future margins.
Well, I didn't have any question about the Netflix model and
obviously as you know on this show I pointed out the, the
problems on the legacy side for a long time even as those stocks
were we're doing much better I think the.
View here on Netflix was that they had let a problem grow well
beyond that they should have with 100 million viewers around
the globe taking the product for free and they finally decided to
crack down and I think the the headline coming out of that is
the crackdown. A lot less noise to it than many
people expected, meaning it's implemented.
There isn't a huge amount of pushback.
They obviously got a lot more Subs out of that than people
thought they would at first. And with that, to Joe's point,
hey, is this A1 not time phenomena or is this something
that's recurring? What you got to remember about
streaming services is that they all have a lot of churn.
Netflix a lot less churn every month and most, but still on an
annual basis close to 25% of subscribers come off.
But they do come back when they want to watch something.
And now when they come back, that lowcost ad free tier at 999
isn't going to be there for him. And so the thinking is that
they're going to come into the ad tier.
And the ad tier, because of the additional ad revenue that comes
with it, has a lot more revenue behind it.
And so there's something going here that looks like they can
really grow revenue substantially and that's
something that the other guys can't easily point to.
That's a great insight there and something that I didn't put
together myself. Subscription companies like
Netflix have constant churn. Churn is the amount of people
that leave every single month or every single year.
So they're always losing customers every single day, but
they're also always gaining customers every single day.
The net new subscribers is simply that loss and that gain
netted out. Hopefully they gain more than
they lose, but as people churn and they turn away from that $10
per month non ad version of Netflix, if they ever come back,
that plan no longer exists. For new signups, they have to go
with the ad tear version at $7.00 a month that has an
average monthly revenue of 15 with the ads.
So Netflix knows that they can make more money this way and
they're using the churn cycle to their advantage.
It's almost like a sneaky way of doing a price hike.
They're basically hiking the price but only for new
customers. So I think Netflix will be able
to reaccelerate some revenue growth.
I think that they have immense operating leverage.
I still remain very bullish on this company.
Now let's go ahead and move on to Tesla.
We also had their earnings report this week.
The stock has, likewise with Netflix given up some gains
after earnings. So investors weren't they
weren't fully satisfied with it. Although Tesla's another company
that's up huge this year, so giving up a little bit of gains
is not a huge concern for Tesla investors right now.
But we have Dan Ives reaction to the earnings report 3. 50 so you
actually raise. Even though the stock is down
and the market's worried about more price.
Cuts Why I think investors aren't seen far should be trees
right off the bat. Dan Ives actually raises his
price target for Tesla after the company reports earnings and the
shares drop in value. This is something that I like to
see from an analyst, because it means that they're actually
sticking to their guns. They're not simply following
momentum. They're not simply following the
current price of the company. He's raising his price target
even though the price of Tesla's going down.
Because often what's happening here, we're seeing a
stabilization from margin perspective better than
expecting in terms of auto gross margins.
Now I'm going to pause it right there, he says that we're seeing
a stabilization in the gross margins of auto.
This is always my big concern for Tesla, the margins of the
company. Auto companies do not have great
margins and if Tesla's like an auto company, we should see the
margins decline overtime. Now we are seeing that over the
past year it's declined from 25% down to 18%.
So margins are declining as they have to lower prices to deal
with the interest rates going up and further competition.
But he notes that the decline is starting to stabilize, only
moving from 19% to 18%. So going down 1% quarter over
quarter is not quite as bad. It's not two or three percent
drops every quarter, but we also have the operating margins of
Tesla coming in at 9.6%, dropping from 11.4 last quarter
and all the way down from 17.2 and Q3 of 2022.
So it's a pretty sizable drop in operating margins year over
year. Now to the Tesla bear, these
drop in margins are an indication that Tesla is
overhyped, that it's really a car company subject to all the
market forces, all the extrinsic factors that normal car
companies are. This is further confirmation to
the Tesla bear that their thesis is playing out.
Tesla cannot remain with its pricing power while it has these
competitive and economic forces. To the Tesla bull, this is
simply margin stabilizing. The forward outlook looks really
good and this is also the troth margins.
Margins from here are going to continue going up in the back
half of the year. So this is one of those
situations where whether you're a Tesla bull or a Tesla bear,
you can get from this report what you want.
You can look at the good or look at the bad and form a logical
conclusion. Either way, Dan Ives is
obviously still bullish. We're seeing a stabilization
from margin perspective better than expecting terms to auto
gross margins. You look at units right now,
they aren't introjectory toward 2,000,000 and then this is the
drum roll the Super Bowl to now what I believe is monetization
of supercharger battery. And I think last night the
biggest thing from the conference call, FSD talking to
another OEM because this from an A I perspective is ultimately
how I see Tesla getting to a trillion and 1/2. 2 Trillions So
there he goes, outlining the bull case.
This is troth margins. You have full self driving which
is going to be the big gainer for Tesla.
What's going to turn this company into a multi trillion
dollar stock? Now one thing that stuck out to
me that Elon Musk specifically said on the earnings call of
this latest Tesla quarter is something.
I just can't let him off the hook for it.
I have to call this out on the earnings call.
He says that autonomy will make all of these numbers look silly.
I recommend looking at ARC Invest.
I think their analysis is very good.
It's the best. And generally Fin Twit or the
finance smart finance people on Twitter follow their accounts.
They're great. So that's in my opinion where
you'll get the best info. He directly mentions ARC invests
research as being the place to get the best info on Tesla.
Arc Invest now is the best place to get our research.
ARC Innovation ETF has been a disaster.
It's had incredibly high levels of volatility with incredibly
poor risk adjusted returns by almost any measurement.
The returns have been haphazard unpredictable over the past five
years. It's returned 7.65% in a five
year period where the S&P 500 has done 61% with dramatically
less volatility. And he's pointing to ARC Invest
is where you get the most credible research on Tesla.
So maybe in the future autonomous vehicles will make
all of these numbers look silly, but I can't predict that, and
neither can ARC Invest. They've shown for a long period
of time that their predictions are akin to throwing darts at a
board. Now, of course, as it's Friday,
we have to turn to TikTok to get the best financial advice.
This is where you get it. This corner of the Internet is
full of different ways to generate massive amounts of
wealth, and this woman has a way for us to generate a lot of
wealth very quickly. Let's go ahead and listen to her
plan. I show you how I turned my
initial $300.00 investment into well over 6 figures in a span of
two years by simply doing compound trading.
Now this is embarrassing for me because I've never heard of
compound trading before. I've never heard that term.
I have heard of compounding machines, companies that build
their earnings and their cash flows over long periods of time
that have resilient business models, but they certainly don't
give the returns that she's talking about here.
You're not going to turn $600 into 100,000 in a couple years
buying compounding companies. So let's go ahead and see
specifically what she's talking about.
So if you. Started with $300.00 and you
grew it 2% every single day for 260 days.
You're going to end up with over $11,000 in your trading account.
Let me go ahead and just pause it right there and rewind just a
bit. She just outlined the plan right
there and I'm surprised I didn't think of this.
I feel like a fool for missing out on this very simple,
reasonable, achievable plan. All I had to do all this time
was simply grow my account by 2% every single day for 260 trading
days. That's it.
How did I not realize this a long time ago?
Why am I worrying about investments that grow earnings
and intrinsic value when all I had to do is make 2% gains every
single day for 260 consecutive trading days?
That seems like a much easier path.
Now you might be saying, Joseph, that's crazy.
That's statistically impossible to accomplish, but that's where
you'd be wrong. She explains how to get these 2%
daily gains. And I know you're like, OK, but
that's not six figures. Let's take that initial
investment plus the gains that we made in year one and reinvest
it for a second year. But we took that 11,000, almost
12,000, and we throw it back in to compound it again for a
second year. We don't take out any of our
profits and we keep trading for 2% every single day.
The second year we end up with over 6 figures.
That's over 400 K compounded into your trading account.
It seems like she understands the principle of compounding
really well. She's outlining it right here.
What we're lied on so far is details of how to accomplish
that 2% daily compounding you're.
Probably sitting there like OK that's cool, but I have no idea
how to trade like 0 knowledge ground level beginner.
There are softwares out there that you can leverage to
actually give you those type of results being a complete
beginner having zero knowledge in the financial markets.
One of them is called Menara and I talk about it all the time on
my platform. OK, so you have to sign up for
this platform that will enable you with 0 knowledge to get
these 2% daily gains. Now she also goes on to outline
that you need certain characteristics to accomplish
this 2% gain per day. You need to have a lot of grit,
a lot of stick to itiveness. You need to have a very
motivated personality. But if you think that you're
disciplined enough and you're willing to stick to a trading
plan that you build for yourself, or you want access to
my Tuesday trading call where we take trades together, mark up
the charts together, I show you how to utilize the softwares,
shoot me a message on Instagram, and drop your questions in the
comments. Now, I'm personally very excited
to start this daily, compounding this trade, compounding that
she's talking about and starting with $500,000, that gives me a
little bit of a head start. For example, if I compound my
money one year, 2% every day for 260 days, that leaves me with
$86 million after a single year. That's pretty exciting.
That's probably enough that I can finally retire on that
money. And if I implement this strategy
with my 86 million for another single year, just another 260
days, I'll have $14 billion. Fourteen billion.
I'll be one of the richest people in the world.
And if I do it for a third year, only after three years, I'll
have $2.5 trillion. I can get to the point with this
daily compounding strategy of being able to pay off the
national debt. So I'm very excited about this.
If I implement this strategy for three or four years with these
returns, I can start to pay off the US national debt.
That's all for this episode. I'll see you in the next one.
I can't believe it.