1 00:00:00,100 --> 00:00:03,200 Welcome, everyone. It is time for another update of 2 00:00:03,200 --> 00:00:05,600 the story fund. I'll show you the damage, what's 3 00:00:05,600 --> 00:00:08,000 going on with. It is a lot of red across the 4 00:00:08,000 --> 00:00:10,100 board as we seen with the markets, we're also going to be 5 00:00:10,107 --> 00:00:13,000 diving into some of the scarier news going on right now. 6 00:00:13,400 --> 00:00:16,200 I've tried to avoid talking about this, mostly because I'm 7 00:00:16,200 --> 00:00:18,700 not a political commentator and I'm not going to be in this 8 00:00:18,700 --> 00:00:20,600 video, but I do want to just highlight some of the things 9 00:00:20,600 --> 00:00:23,700 going on to give context to why the market is reacting, the way 10 00:00:23,700 --> 00:00:25,900 that it is. I think it's somewhat important, 11 00:00:26,200 --> 00:00:29,000 but as we've seen today, we have more red days in the market. 12 00:00:30,000 --> 00:00:32,200 Days across the board, especially for the QQQ. 13 00:00:32,200 --> 00:00:34,900 The high-growth companies. This is largely been a 14 00:00:34,900 --> 00:00:39,900 transition from growth to Value. From speculative to 15 00:00:39,900 --> 00:00:43,600 non-speculative, from cash, losing businesses to cash, 16 00:00:43,800 --> 00:00:45,800 making businesses free cash, flow companies. 17 00:00:46,000 --> 00:00:47,500 That's been the transition going on. 18 00:00:47,700 --> 00:00:49,900 We can just see today across the board. 19 00:00:49,900 --> 00:00:53,100 Most things are in the red. We have Healthcare holding up, 20 00:00:53,100 --> 00:00:55,100 okay? And energy holding up, okay? 21 00:00:55,200 --> 00:00:58,100 So the energy trades doing well, as apparently prices are going 22 00:00:58,100 --> 00:01:01,400 to be going up. We can look at The specific 23 00:01:01,400 --> 00:01:04,099 index is here. We have the S&P 500 year-to-date 24 00:01:04,300 --> 00:01:09,100 down 10.72 percent well into a correction at this point so that 25 00:01:09,100 --> 00:01:12,400 doesn't look too good. That's the S&P 500, the mixture 26 00:01:12,400 --> 00:01:15,300 of value and growth. In this one index, the top 500 27 00:01:15,300 --> 00:01:19,900 companies, then we have the QQQ, this tilts more towards growth 28 00:01:19,900 --> 00:01:23,800 oriented companies, technology companies in this one's down a 29 00:01:23,800 --> 00:01:25,600 lot more significantly, more down. 30 00:01:25,600 --> 00:01:30,800 Sixteen point eight, two percent compared to the S&P 500's 72 31 00:01:30,800 --> 00:01:34,100 percent. So basically right now, no 32 00:01:34,100 --> 00:01:37,600 matter what you're investing in unless you really did some like 33 00:01:37,600 --> 00:01:41,500 specific trades and to a couple commodity Industries, you're 34 00:01:41,500 --> 00:01:44,000 probably trading down, your portfolio is probably going down 35 00:01:44,000 --> 00:01:47,300 across the board, but it's going down a lot more if you're in 36 00:01:47,300 --> 00:01:50,600 these growth oriented companies and that's a situation going on 37 00:01:50,600 --> 00:01:53,400 right now, with my portfolio, I have a portfolio here full of 38 00:01:53,400 --> 00:01:57,100 growth oriented companies and it's currently down ten thousand 39 00:01:57,100 --> 00:01:59,800 five hundred dollars which is sixteen point two. 40 00:01:59,800 --> 00:02:02,900 Four, Sent money, waited, if we calculate this based on a 41 00:02:02,900 --> 00:02:07,000 time-weighted basis with the S&P 500 compared against the story 42 00:02:07,000 --> 00:02:09,000 fund, this is what it looks like. 43 00:02:09,199 --> 00:02:12,300 You can see back in kind of November held up for a little 44 00:02:12,300 --> 00:02:14,500 bit. And then early this year, the 45 00:02:14,508 --> 00:02:17,700 end of last year, the performance started to divert, 46 00:02:17,800 --> 00:02:21,100 that's when I got hit with the cloud companies and I did some 47 00:02:21,100 --> 00:02:24,900 things to try to avoid, try to minimize losses during this time 48 00:02:24,900 --> 00:02:26,600 period. And I'll go through that, but 49 00:02:26,608 --> 00:02:30,100 you can see that my portfolio started to sell off the S&P 500. 50 00:02:30,300 --> 00:02:33,400 Held a better. But now even the S&P 500, and a 51 00:02:33,408 --> 00:02:35,600 lot of the bigger companies started to sell off. 52 00:02:36,100 --> 00:02:39,400 We know that I got hit with companies like Ali, Baba Netflix 53 00:02:39,400 --> 00:02:42,400 was an aggressive sell-off, nothing I've ever seen before 54 00:02:42,400 --> 00:02:45,900 with a company like that. And a lot of people thought, Men 55 00:02:45,900 --> 00:02:48,500 Netflix was terrible. You know, look at you investing 56 00:02:48,500 --> 00:02:51,900 in Netflix at a high valuation and then Facebook got chopped in 57 00:02:51,900 --> 00:02:56,600 half, and then PayPal went down, you know, 70% companies that 58 00:02:56,600 --> 00:02:59,500 were established companies that were at reasonable valuations 59 00:02:59,500 --> 00:03:03,100 are getting depart, you know, their valuation 20% 30% in a 60 00:03:03,100 --> 00:03:04,800 day. And we saw that happen over the 61 00:03:04,800 --> 00:03:08,400 past couple of months. My portfolio has somewhat 62 00:03:08,400 --> 00:03:10,800 paralleled, the S&P 500 on the way down. 63 00:03:11,100 --> 00:03:13,800 It's kind of actually over the past week, just Fallen to the 64 00:03:13,808 --> 00:03:17,300 same extent. The S&P 500 has fallen over the 65 00:03:17,300 --> 00:03:20,700 past couple weeks from 20% to 10%. 66 00:03:20,900 --> 00:03:24,400 My portfolio has fallen from the three or four percent in the 67 00:03:24,400 --> 00:03:28,200 green to 7% in the red so both of them have fallen around 10 68 00:03:28,200 --> 00:03:31,400 percent over the past week. Kind, In parallel, but I'm still 69 00:03:31,400 --> 00:03:33,500 trailing it. So, the hope is over the next 70 00:03:33,500 --> 00:03:35,800 five years. I can close in this Gap. 71 00:03:35,800 --> 00:03:39,400 I'm trailing spy, by around 12% right now, and I need a closing 72 00:03:39,400 --> 00:03:41,900 that Gap eventually. So when I look over the past six 73 00:03:41,900 --> 00:03:44,900 months of my portfolio that performance in the actions I 74 00:03:44,908 --> 00:03:48,300 took, and I try to do some introspection and some analysis 75 00:03:48,300 --> 00:03:50,300 on it. I come to the conclusion that 76 00:03:50,300 --> 00:03:53,100 there's some things, I did write that I did good, that were smart 77 00:03:53,100 --> 00:03:56,300 things to do, and other things that I could do better mistakes 78 00:03:56,300 --> 00:03:59,100 that I've made, I want to go over those the things that I 79 00:03:59,100 --> 00:04:01,500 think I did, right? Right was companies that I 80 00:04:01,508 --> 00:04:03,800 invested in based on their fundamentals and growth 81 00:04:03,800 --> 00:04:08,700 prospects that had enormous price increases enormous 82 00:04:08,700 --> 00:04:12,700 momentum carry their price up even further than their than 83 00:04:12,700 --> 00:04:14,800 their fundamentals. Would imply that last scene is 84 00:04:14,808 --> 00:04:18,600 the best example. In March of 2021, it went from 85 00:04:18,600 --> 00:04:22,400 200 dollars. A share to November being 450 86 00:04:22,400 --> 00:04:26,700 dollars, a share, it went up a hundred percent in the course of 87 00:04:26,700 --> 00:04:29,200 six months. That doesn't happen that often 88 00:04:29,700 --> 00:04:32,300 and it wasn't Because of anything dramatically different 89 00:04:32,300 --> 00:04:34,500 with the company. There's no huge fundamental 90 00:04:34,500 --> 00:04:36,900 shift. Making this company worth twice 91 00:04:36,900 --> 00:04:39,400 as much. So the good thing I did in this 92 00:04:39,400 --> 00:04:41,800 situation and this is where I think I got it, right. 93 00:04:42,100 --> 00:04:44,200 The purpose of investing is making Investments. 94 00:04:44,200 --> 00:04:47,300 Then when they go up in value to wear their overvalued, where 95 00:04:47,300 --> 00:04:49,800 people are giving you very attractive offers for the 96 00:04:49,800 --> 00:04:52,500 company, you got to take some of those offers. 97 00:04:52,500 --> 00:04:55,000 And I did, I took some of the gains with that last and in 98 00:04:55,008 --> 00:04:58,100 fact, the majority of them and that helped preserve the gains. 99 00:04:58,300 --> 00:05:01,500 So then one momentum eventually shifted and it moved the other 100 00:05:01,500 --> 00:05:04,100 direction. I didn't go down with those 101 00:05:04,100 --> 00:05:06,500 losses, right? I preserve the gains that I had. 102 00:05:06,900 --> 00:05:11,400 That is decent investing buying and holding does not mean you 103 00:05:11,400 --> 00:05:13,800 buy a company and you hold it no matter what. 104 00:05:13,800 --> 00:05:16,900 Even if it goes up 300% way above its fundamentals Warren 105 00:05:16,900 --> 00:05:19,000 Buffett to buy a Buy and Hold investor. 106 00:05:19,400 --> 00:05:22,200 But if he gets such a good offer for a company, if they're 107 00:05:22,500 --> 00:05:24,700 willing to give him so much money for it, that it's way 108 00:05:24,700 --> 00:05:28,200 above its, it's overvalued. He'll take those offers you'll 109 00:05:28,200 --> 00:05:31,800 say okay, I'll take that money and I'll Somewhere else and I 110 00:05:31,800 --> 00:05:33,700 think that's what I did. Good, that's where I got it, 111 00:05:33,700 --> 00:05:35,300 right. A lot of them are speculative 112 00:05:35,300 --> 00:05:38,400 companies that I could see. We're moving up just far past 113 00:05:38,400 --> 00:05:40,600 their fundamentals, there's so much momentum. 114 00:05:40,600 --> 00:05:43,300 Carrying them up, I locked in gains on a lot of those 115 00:05:43,300 --> 00:05:46,600 companies and that's the reason that I'm not more in the red, 116 00:05:46,600 --> 00:05:50,300 I'd be far more in the red, I'd be down 20,000, 30,000 if I 117 00:05:50,308 --> 00:05:53,800 didn't lock in gains. Another way of viewing, this is 118 00:05:53,800 --> 00:05:57,000 my current Holdings. I'm down twenty thousand dollars 119 00:05:57,000 --> 00:05:59,300 on. But the reason that my overall 120 00:05:59,300 --> 00:06:03,700 portfolio, Leo is down 10,000 is because the previous Holdings 121 00:06:03,700 --> 00:06:07,300 that I had were in excess of 10,000 dollars in gains that I 122 00:06:07,300 --> 00:06:09,700 locked in. So selling these companies at a 123 00:06:09,700 --> 00:06:13,600 high made it so that I didn't have twenty thousand dollars of 124 00:06:13,700 --> 00:06:15,700 losses. I'm only down 10,000. 125 00:06:15,700 --> 00:06:17,600 So that's something where I think I got it, right. 126 00:06:17,600 --> 00:06:21,200 I think I did the right thing, six months ago by taking a lot 127 00:06:21,200 --> 00:06:24,300 of gains in these more speculative positions as I could 128 00:06:24,300 --> 00:06:27,100 clearly, see the valuation diverged. 129 00:06:27,100 --> 00:06:30,000 So much from the fair value that it was not even close come. 130 00:06:30,300 --> 00:06:32,900 Like atlassian, where way, overvalued with 50 plus price to 131 00:06:32,900 --> 00:06:35,600 sales ratios. Even companies like Peloton 132 00:06:35,800 --> 00:06:38,300 which I was very excited about the fundamentals of the company, 133 00:06:38,400 --> 00:06:40,900 the future outlook. You know, this Dynamic change to 134 00:06:40,900 --> 00:06:43,800 exercise and that type of thing. But it got to the point where it 135 00:06:43,800 --> 00:06:46,900 was a fifty billion dollar company and I just kept thinking 136 00:06:47,300 --> 00:06:49,200 50 billion dollars for this company. 137 00:06:49,200 --> 00:06:53,500 That's so much money and I realized once demand had any 138 00:06:53,500 --> 00:06:55,500 issues. Once the story would change at 139 00:06:55,500 --> 00:06:58,300 all, I wanted to take gains because I thought that investors 140 00:06:58,300 --> 00:07:00,100 are going to be offering more money for this in the future. 141 00:07:00,200 --> 00:07:03,400 Future and I'm very glad I did. That was a mistake. 142 00:07:03,600 --> 00:07:07,800 I think that Peloton will take years if ever to get back to its 143 00:07:07,800 --> 00:07:09,500 previous highs. There's a good chance. 144 00:07:09,500 --> 00:07:13,100 It will never return. So that part, I think I did 145 00:07:13,100 --> 00:07:14,900 correct. And I think I can even learn 146 00:07:14,900 --> 00:07:16,600 from that and do that more in the future. 147 00:07:16,800 --> 00:07:20,000 If you have a company that you invested in and the fair value 148 00:07:20,000 --> 00:07:23,500 goes like this, and the price goes like this and the price 149 00:07:23,500 --> 00:07:26,600 becomes. So overvalued, take some gains, 150 00:07:26,600 --> 00:07:28,800 it's okay. To even if it's a good company, 151 00:07:28,900 --> 00:07:31,300 you'll have other opportunities. Is there will be time where 152 00:07:31,300 --> 00:07:33,900 people aren't so bullish on that particular company. 153 00:07:34,300 --> 00:07:38,900 And so if the fair value goes up slightly but the price goes up 154 00:07:38,900 --> 00:07:42,300 dramatically, you can take advantage of those mismatches 155 00:07:42,300 --> 00:07:43,800 and that's something that I did do. 156 00:07:43,800 --> 00:07:46,100 Now when I try to determine where I have the most room for 157 00:07:46,100 --> 00:07:48,800 improvement and where I can learn from, there's a couple 158 00:07:48,800 --> 00:07:50,700 different things that I've really hurt my performance of my 159 00:07:50,700 --> 00:07:52,800 portfolio. It's three different Holdings 160 00:07:52,800 --> 00:07:57,100 that have really affected it spotify's one of them, this one, 161 00:07:57,200 --> 00:08:00,000 in my opinion, the company fundamentals have been, oh, 162 00:08:00,100 --> 00:08:04,300 Okay, the problem was valuation. So I bought it after it had kind 163 00:08:04,300 --> 00:08:07,700 of the hype of the podcast in The Joe Rogan joining on board 164 00:08:07,900 --> 00:08:11,300 and now that hype has gone away and it's shifted in the opposite 165 00:08:11,300 --> 00:08:14,300 direction of Joe Rogan being a problem in controversy and 166 00:08:14,300 --> 00:08:18,100 artist leaving, that's cause the stock to trade down 50% for my 167 00:08:18,100 --> 00:08:20,400 by price. So that's been painful for this 168 00:08:20,400 --> 00:08:22,600 holding. I could be buying it at much 169 00:08:22,600 --> 00:08:26,200 cheaper prices today. So at this one, I should have 170 00:08:26,400 --> 00:08:28,700 been a little bit more patient and not bought it when there is 171 00:08:28,700 --> 00:08:32,000 such hype with the company. I was buying in with a lot of 172 00:08:32,000 --> 00:08:34,700 hype of other investors and of course when that leaves you get 173 00:08:34,700 --> 00:08:36,799 hurt. So Spotify in terms of 174 00:08:36,799 --> 00:08:38,799 fundamentals, I remain very bullish on. 175 00:08:39,400 --> 00:08:42,100 In my opinion, the things with Joe Rogan will pass over time. 176 00:08:42,200 --> 00:08:43,700 There's new concerns that will come up. 177 00:08:44,000 --> 00:08:48,200 Spotify is growing their user base by 20%, they're active 178 00:08:48,200 --> 00:08:52,300 users by 20% their premium users by 20%, their revenue by 20%, 179 00:08:52,500 --> 00:08:56,300 they're growing overall, the Outlook looks good, but the 180 00:08:56,300 --> 00:08:59,300 different still stands, I could be buying this company at much 181 00:08:59,300 --> 00:09:01,900 cheaper prices. Today than my initial buys by as 182 00:09:01,900 --> 00:09:04,100 a little bit more patient and look for a little bit more 183 00:09:04,100 --> 00:09:08,300 favorable entry points to it. So, part of the dip finder and 184 00:09:08,300 --> 00:09:10,700 that tool that I've been building allows me to see when 185 00:09:10,700 --> 00:09:13,500 sentiment is actually negative on the company buying in when 186 00:09:13,500 --> 00:09:15,800 it's at a dip, not when it's on a price search. 187 00:09:15,800 --> 00:09:18,200 And I'm going to be more aware of that in the future. 188 00:09:18,200 --> 00:09:21,400 The next one is Ali Baba. I've bought this company, I 189 00:09:21,400 --> 00:09:22,700 think two or three different times. 190 00:09:22,700 --> 00:09:25,300 I did an initial by knowing that there's a good chance, it might 191 00:09:25,300 --> 00:09:27,600 drop in the short term, then it dropped a lot. 192 00:09:27,600 --> 00:09:30,000 I did another by then it dropped a lot more. 193 00:09:30,200 --> 00:09:33,000 Get another small by. So I've dollar cost average into 194 00:09:33,000 --> 00:09:35,100 this one, the original thesis of Ali. 195 00:09:35,100 --> 00:09:38,300 Baba was to buy when others are fearful to be greedy. 196 00:09:38,300 --> 00:09:41,000 When others are fearful with great companies, like Ali Baba, 197 00:09:41,300 --> 00:09:45,000 that the fundamentals are good, but the sentiment surrounding it 198 00:09:45,000 --> 00:09:47,500 are poor. So my thesis on this was, I'm 199 00:09:47,500 --> 00:09:49,600 buying a company that has terrible sentiment, but the 200 00:09:49,600 --> 00:09:52,500 company is foundationally and fundamentally strong. 201 00:09:52,800 --> 00:09:56,400 That represents Ali Baba, what I didn't give enough Credence to 202 00:09:56,700 --> 00:09:59,400 what I didn't evaluate enough and where I think I made the 203 00:09:59,408 --> 00:10:03,900 mistake With this is how persistent the issues with China 204 00:10:03,900 --> 00:10:06,200 would be. They are not going away quickly. 205 00:10:06,300 --> 00:10:08,400 I thought they would go away much faster than they are. 206 00:10:08,600 --> 00:10:10,600 The Chinese government is still in the way of this whole and 207 00:10:10,600 --> 00:10:12,800 going up. And I think it might persist for 208 00:10:12,800 --> 00:10:17,200 a very long time, so I got that wrong with my analysis, Ali 209 00:10:17,200 --> 00:10:19,900 Baba, although it's a great company and fundamentally sound 210 00:10:20,100 --> 00:10:23,800 has extra risk factors instead of companies within the u.s. 211 00:10:23,800 --> 00:10:26,500 like Amazon, that really don't have this risk factor of the 212 00:10:26,500 --> 00:10:29,400 Chinese government. And so it's just another hurdle 213 00:10:29,400 --> 00:10:32,900 for Another hurdle to go past and I think that makes it a more 214 00:10:32,900 --> 00:10:35,600 difficult investment. Another thing that I do think 215 00:10:35,600 --> 00:10:40,800 affected, this investment was, I was more reliant on external 216 00:10:40,800 --> 00:10:43,500 forces with this investment. I'm more reliant on other 217 00:10:43,500 --> 00:10:45,600 people's research, I don't use Ali Baba. 218 00:10:45,600 --> 00:10:49,500 I don't have any familiarity with the product or services, I 219 00:10:49,500 --> 00:10:52,600 don't really have Hands-On research for the company and I 220 00:10:52,600 --> 00:10:55,600 was Reliant also on Charlie Munger and his thoughts on China 221 00:10:55,600 --> 00:10:59,100 and whatnot. So I was relying on third-party 222 00:10:59,200 --> 00:11:01,700 analysis. And perspective on the company. 223 00:11:01,900 --> 00:11:04,000 And to me, I don't really understand this company as much 224 00:11:04,000 --> 00:11:06,400 as I should. So I violated that rule as well 225 00:11:06,400 --> 00:11:08,900 as not not investing in something that I have direct 226 00:11:08,900 --> 00:11:12,200 Hands-On understanding of like, Peter Lynch. 227 00:11:12,200 --> 00:11:15,100 So often talks about. So, in the future, I'm going to 228 00:11:15,108 --> 00:11:17,400 be investing more in companies where I have a Hands-On 229 00:11:17,400 --> 00:11:20,500 understanding of companies, like Amazon that I really myself. 230 00:11:20,500 --> 00:11:23,800 I use them all the time. The other one is igv. 231 00:11:23,800 --> 00:11:26,500 I'm in the red on this one. I don't really consider this as 232 00:11:26,500 --> 00:11:30,000 much of a mistake because it's just an ETF its Market waited. 233 00:11:30,100 --> 00:11:35,300 It'll rebalance over time and I never try to time ETFs, really? 234 00:11:35,300 --> 00:11:38,800 I don't spend a lot of time trying to time entry points into 235 00:11:38,800 --> 00:11:41,200 ETF. So this one is down five 236 00:11:41,200 --> 00:11:43,300 thousand dollars, right? It could be going better. 237 00:11:43,300 --> 00:11:46,200 It's a software ETF, but I plan on holding this throughout the 238 00:11:46,200 --> 00:11:50,400 duration of this portfolio and I think as momentum shifts away 239 00:11:50,400 --> 00:11:53,000 from it right now, it'll eventually shift back and this 240 00:11:53,000 --> 00:11:54,900 rebalance is market cap weighted. 241 00:11:55,100 --> 00:11:56,500 I think he'll do fine in the future. 242 00:11:57,000 --> 00:11:59,900 The big company that I really made a mistake on was Netflix. 243 00:12:00,100 --> 00:12:02,900 It's apparent by the eight thousand, five hundred dollar 244 00:12:02,900 --> 00:12:05,500 lost so far. Now, Netflix is one that I was 245 00:12:05,500 --> 00:12:10,400 pretty blindsided by, they shared slightly lower guidance, 246 00:12:10,400 --> 00:12:14,100 for a growth company and that caused the stock to sell off 20% 247 00:12:14,100 --> 00:12:17,200 in one day. Now, Netflix is still a highly 248 00:12:17,200 --> 00:12:20,600 debated, highly argued company. There's investors that think 249 00:12:20,600 --> 00:12:23,600 that it's essentially worthless, it'll never be cash flow, free 250 00:12:23,600 --> 00:12:26,500 cash flow generative, it will never give shareholders returns 251 00:12:26,900 --> 00:12:29,100 and that's a valid perspective, they have decent Arguments for 252 00:12:29,100 --> 00:12:30,800 that. There's other Sisters that are 253 00:12:31,100 --> 00:12:32,800 great. Investors like Bill Ackman being 254 00:12:32,800 --> 00:12:34,800 one of them that sees value here. 255 00:12:35,000 --> 00:12:36,800 Out of all the many companies that sold off. 256 00:12:36,800 --> 00:12:40,000 Recently, Bill Ackman bought a billion dollars of Netflix over 257 00:12:40,000 --> 00:12:42,000 the other mini available options. 258 00:12:42,100 --> 00:12:45,300 So, Netflix is a stock that has a ton of disagreement. 259 00:12:45,700 --> 00:12:49,300 Now, in my opinion, the thing that I did wrong on this one was 260 00:12:49,300 --> 00:12:54,400 obviously I was buying into a company that it's questionable 261 00:12:54,400 --> 00:12:57,200 about how much free cash flow. It's going to generate during a 262 00:12:57,200 --> 00:12:59,900 time when liquidity is being moved out of the market and 263 00:13:00,000 --> 00:13:02,500 Investors are becoming more concerned about these very type 264 00:13:02,500 --> 00:13:04,600 of companies. So the time that I bought this 265 00:13:04,600 --> 00:13:07,800 was very poor choice and timing and that hurt my performance 266 00:13:07,800 --> 00:13:10,000 like crazy. I wish I could go back and do 267 00:13:10,000 --> 00:13:11,900 things differently, we can't do that. 268 00:13:12,000 --> 00:13:14,400 When I look at this now and I look at the situation now with 269 00:13:14,400 --> 00:13:16,000 Netflix. I feel like I'm in the same 270 00:13:16,000 --> 00:13:18,600 situation as a lot of Facebook investors that had that as a 271 00:13:18,608 --> 00:13:21,900 major holding your down on the stock and you're trying to 272 00:13:21,900 --> 00:13:24,300 question whether or not this story in the fundamentals have 273 00:13:24,400 --> 00:13:26,600 really shifted. When I look at Netflix and I 274 00:13:26,608 --> 00:13:30,300 assess the beer case, in bulk case, the bear case is that Lex 275 00:13:30,300 --> 00:13:33,000 has never been a free cash, flow generative company. 276 00:13:33,200 --> 00:13:35,300 This is their free cash flow quarter-over-quarter. 277 00:13:35,700 --> 00:13:37,800 You can see that it's not much, and over the past three quarters 278 00:13:37,800 --> 00:13:40,500 are losing more cash, right? So they're never going to be a 279 00:13:40,500 --> 00:13:43,300 business that generates a lot of returns for their shareholders. 280 00:13:43,700 --> 00:13:47,700 The bear cases also that the entertainment and 281 00:13:47,700 --> 00:13:52,200 attention-grabbing economy is overly saturated, you have 282 00:13:52,200 --> 00:13:55,900 Amazon Prime, you have Netflix and Disney, and Comcast and 283 00:13:56,100 --> 00:13:58,500 YouTube, and Tick-Tock and Facebook, and all these things 284 00:13:58,500 --> 00:14:01,700 trying to grab your attention. Ian Netflix is just one of them 285 00:14:02,000 --> 00:14:05,300 and it's overly saturated. There's only so many people only 286 00:14:05,300 --> 00:14:08,100 so many hours in the day. This company can't really 287 00:14:08,500 --> 00:14:10,300 doesn't have a lot of room to grow and it's just way over 288 00:14:10,300 --> 00:14:13,300 saturated with competition. I think that's actually the best 289 00:14:13,300 --> 00:14:16,000 beer case, that's probably the strongest beer case for Netflix. 290 00:14:16,500 --> 00:14:20,500 The Bull case, is that the company's going to be free cash 291 00:14:20,500 --> 00:14:23,400 flow generative that they'll continue to grow their revenue 292 00:14:23,400 --> 00:14:25,300 over time. They'll continue to gain 293 00:14:25,300 --> 00:14:27,100 subscribers. They'll continue to be able to 294 00:14:27,100 --> 00:14:29,900 do price increases, the global Tam remains. 295 00:14:30,100 --> 00:14:31,900 Large. If they get the 350 million 296 00:14:31,900 --> 00:14:35,500 subscribers, their revenue will grow consistently into a large 297 00:14:35,500 --> 00:14:39,000 extent, their ibadah looks very good. 298 00:14:39,100 --> 00:14:42,700 This is their ibadah and the bull cases at the free cash flow 299 00:14:42,900 --> 00:14:45,400 with the scalability of their content and the growth of their 300 00:14:45,400 --> 00:14:48,900 revenue that the free cash flow will start to resemble their 301 00:14:48,900 --> 00:14:52,000 ibadah over time that's the bull case of it. 302 00:14:52,100 --> 00:14:56,300 Now when I do analysis of where I sit down with Netflix I try to 303 00:14:56,300 --> 00:14:58,100 see if the story has really changed. 304 00:14:58,600 --> 00:15:01,300 The price has changed a lot but has the story changed. 305 00:15:01,300 --> 00:15:03,700 I keep coming back to believing that right now. 306 00:15:03,800 --> 00:15:06,800 The story has not changed significantly enough for me to 307 00:15:06,800 --> 00:15:08,800 exit this position and realize the losses. 308 00:15:09,100 --> 00:15:11,800 I don't think All Is Lost. I agree with a lot of the 309 00:15:11,808 --> 00:15:15,000 arguments that Bill Ackman recently made the company still 310 00:15:15,000 --> 00:15:17,600 has a large cam. There's still a lot of people 311 00:15:17,600 --> 00:15:19,900 that want high-quality entertainment across the globe. 312 00:15:20,100 --> 00:15:22,200 Netflix has a good International strategy. 313 00:15:22,500 --> 00:15:25,100 They will have periods of slow growth, but they've had that 314 00:15:25,100 --> 00:15:27,000 before. They'll also have periods of 315 00:15:27,000 --> 00:15:29,600 fast growth, right? If things go good or they have a 316 00:15:29,600 --> 00:15:33,100 break, Series. So in my opinion, the bull case 317 00:15:33,100 --> 00:15:35,800 hasn't changed that much if Netflix continues to grow and 318 00:15:35,900 --> 00:15:40,000 really does get the 350 400 million worldwide subscribers. 319 00:15:40,500 --> 00:15:43,700 The company will generate free cash flow and the investors 320 00:15:43,700 --> 00:15:46,200 looking for that free cash flow will probably jump back on 321 00:15:46,200 --> 00:15:49,500 board. So as of right now, I think it 322 00:15:49,500 --> 00:15:52,100 was a mistake to put so much money in this company, right? 323 00:15:52,100 --> 00:15:54,100 As this transition was happening to more free cash flow, 324 00:15:54,100 --> 00:15:56,900 generative businesses. But in terms of where I stand 325 00:15:56,900 --> 00:15:59,500 right now, I don't plan on exiting this. 326 00:16:00,000 --> 00:16:03,600 Ian, I have to get more of a real confirmation that the 327 00:16:03,608 --> 00:16:05,600 Dynamics have changed. There's things I didn't see in 328 00:16:05,600 --> 00:16:08,200 the company, there's too much competition and they're really 329 00:16:08,200 --> 00:16:11,200 never going to grow free cash flow if that happens and I get 330 00:16:11,200 --> 00:16:14,300 confirmation that the company's fundamentals really have 331 00:16:14,300 --> 00:16:17,100 deteriorated and the company really will never grow to be 332 00:16:17,100 --> 00:16:19,700 free, cash flow generative and that case, I'll realize the 333 00:16:19,708 --> 00:16:21,700 losses and look for other Investments. 334 00:16:21,900 --> 00:16:25,200 So that's a quick update on my portfolio, looking back over the 335 00:16:25,200 --> 00:16:27,500 past three to six months in summary. 336 00:16:27,500 --> 00:16:30,600 The thing that I think I did right was when the Price moved 337 00:16:30,600 --> 00:16:33,100 up way past the fundamentals of many, of my companies. 338 00:16:33,600 --> 00:16:35,600 Taking gains, that's important to do. 339 00:16:35,900 --> 00:16:38,800 If the price surge has passed the fundamentals in the 340 00:16:38,800 --> 00:16:41,100 valuation that supports the price. 341 00:16:41,500 --> 00:16:44,300 That's a time to take gains when everyone else is being greedy. 342 00:16:44,400 --> 00:16:47,200 That's when you can take gains and protect your gains for that 343 00:16:47,200 --> 00:16:52,200 company and conversely over time that price will start to move 344 00:16:52,200 --> 00:16:55,300 back to the fundamentals either. The fundamentals will surge up 345 00:16:55,300 --> 00:16:58,000 and match the price or the price is going to come back down. 346 00:16:58,200 --> 00:17:01,400 And for all the companies that I took As on the price, went back 347 00:17:01,400 --> 00:17:03,500 down to more closely match, the fundamentals. 348 00:17:03,800 --> 00:17:07,500 So that's just another way of saying, be fearful, when others 349 00:17:07,500 --> 00:17:10,700 are greedy, when sentiment is so positive on a company and the 350 00:17:10,700 --> 00:17:13,500 price is just surging and you're looking at the price to sales 351 00:17:13,500 --> 00:17:16,700 ratio in the PE ratio in you're going, wow, this is really 352 00:17:16,700 --> 00:17:18,099 something else. These companies are going up 353 00:17:18,099 --> 00:17:20,900 like crazy. That's a time to be a seller and 354 00:17:20,900 --> 00:17:23,700 take gains. You can get 20 30 percent gains 355 00:17:23,700 --> 00:17:26,599 and companies that are going up. Because a positive sentiment the 356 00:17:26,599 --> 00:17:29,900 time to be greedy and start buying is when the price is way. 357 00:17:30,000 --> 00:17:32,500 All the fundamentals when it's selling off like crazy when 358 00:17:32,500 --> 00:17:34,100 nobody wants to touch these companies. 359 00:17:34,400 --> 00:17:37,200 I look at days like today. This is the dip finder. 360 00:17:37,400 --> 00:17:39,900 This comes with the patreon membership, but look at my 361 00:17:39,900 --> 00:17:42,200 portfolio today. For instance, we added in a 362 00:17:42,208 --> 00:17:45,600 thing that shows you the current percent change on every holding 363 00:17:46,000 --> 00:17:48,400 updated every five minutes. And this is the daily percent 364 00:17:48,400 --> 00:17:51,100 change. So I jeebies down 2%. 365 00:17:51,200 --> 00:17:54,500 Netflix is down, 1.7% Google's down point, eight percent, 366 00:17:54,700 --> 00:18:00,800 Amazon's down 2.8% Ali, Baba's down. 2.4% Microsoft is down 2% 367 00:18:00,800 --> 00:18:04,700 and look over all the momentum with these companies twillie is 368 00:18:04,700 --> 00:18:06,500 down 48 percent from its 200-day. 369 00:18:06,500 --> 00:18:10,900 Moving average Facebook is down, 39 percent, spotify's down, 36 370 00:18:10,900 --> 00:18:14,900 percent, Baba's down 32%. These are all in substantial 371 00:18:14,900 --> 00:18:17,400 dips. The only company out of my 372 00:18:17,400 --> 00:18:19,400 entire portfolio in the story fund. 373 00:18:19,500 --> 00:18:24,000 That's not in a massive dip. Is Apple, Microsoft is holding 374 00:18:24,000 --> 00:18:27,700 up, okay, it's only down three percent but apples, the only one 375 00:18:27,700 --> 00:18:32,400 that's not in a dip this show. You, how much momentum swings 376 00:18:32,400 --> 00:18:34,700 from one direction to the other six months ago? 377 00:18:34,700 --> 00:18:38,200 These would have all been above the zero, x axis, they would 378 00:18:38,200 --> 00:18:41,300 have all been searching. That's the time to take gains 379 00:18:41,600 --> 00:18:44,900 when positive momentum is heavily baked into the price of 380 00:18:44,900 --> 00:18:47,300 the stock. When sentiment is so incredibly 381 00:18:47,300 --> 00:18:49,600 positive. That the price is just soaring. 382 00:18:49,800 --> 00:18:51,900 That's when you should be more fearful and take gains with 383 00:18:51,900 --> 00:18:54,100 these companies. Now's the Time to actually be 384 00:18:54,100 --> 00:18:56,200 buying them. This is the time to be greedy. 385 00:18:56,400 --> 00:18:59,300 People are fearful right now. There's lots of bad news going 386 00:18:59,300 --> 00:19:01,000 on. All these companies are in 387 00:19:01,000 --> 00:19:03,600 massive dips, they're selling off more and more every day. 388 00:19:03,700 --> 00:19:06,100 And, in my opinion, I think every one of these companies is 389 00:19:06,100 --> 00:19:09,000 oversold, they're all Cloud companies have been punished for 390 00:19:09,000 --> 00:19:10,900 the past year. Now that doesn't mean that the 391 00:19:10,900 --> 00:19:12,300 price can't continue to move down. 392 00:19:12,500 --> 00:19:15,800 There's a high likelihood of it. Momentum moves One Direction for 393 00:19:15,800 --> 00:19:18,900 a long period of time. But what we're seeing right now 394 00:19:18,900 --> 00:19:21,700 is instead of the price way up here, way above the 395 00:19:21,700 --> 00:19:23,900 fundamentals. Now the price for many of these 396 00:19:23,900 --> 00:19:26,900 companies is way below the fundamentals, way below their 397 00:19:26,900 --> 00:19:29,500 fair value. So Now's the Time to be greedy 398 00:19:29,500 --> 00:19:31,400 6. To go was a time to be fearful. 399 00:19:31,400 --> 00:19:33,900 Now, moving on from that, I want to also share some thoughts on 400 00:19:33,900 --> 00:19:35,900 current events with the Ukraine crisis. 401 00:19:35,900 --> 00:19:38,400 What's going on with the world? How this ties in with China and 402 00:19:38,400 --> 00:19:42,700 Russia and how I view this in terms of investing if I make any 403 00:19:42,700 --> 00:19:45,700 changes to it. So this is a good summary of the 404 00:19:45,700 --> 00:19:47,200 situation. I want to read through this. 405 00:19:47,200 --> 00:19:48,700 Which summarizes what's going on? 406 00:19:49,100 --> 00:19:52,300 I think in a very concise way, Russia's audacious military 407 00:19:52,300 --> 00:19:55,400 mobilization in and around, Ukraine is the first major 408 00:19:55,400 --> 00:19:58,900 'scrimish of the New Order in international politics with 409 00:19:58,900 --> 00:20:01,900 three major powers. Is jostling for position in 410 00:20:01,900 --> 00:20:03,800 ways. That threaten America premise. 411 00:20:03,800 --> 00:20:07,000 See the challenges are different than those the US and its 412 00:20:07,000 --> 00:20:10,500 network of alliances faced and the Cold War Russia and China 413 00:20:10,500 --> 00:20:14,100 have built up a thriving partnership, based in part on a 414 00:20:14,100 --> 00:20:17,800 shared interest and diminishing the u.s. power. 415 00:20:17,900 --> 00:20:20,600 Now they also go on to highlight how things have changed 416 00:20:20,600 --> 00:20:24,500 dynamically between now in the 1950s, Russia is a critical gas 417 00:20:24,500 --> 00:20:26,700 supplier to Europe. So they're actually supplying 418 00:20:26,700 --> 00:20:28,600 fuel to all of Europe. That's a pretty powerful 419 00:20:28,600 --> 00:20:31,600 position to be in. China isn't impoverished 420 00:20:31,600 --> 00:20:34,400 war-ravaged partner but rather the world's manufacturing 421 00:20:34,400 --> 00:20:38,100 Powerhouse with an expanded military in deploying a huge 422 00:20:38,100 --> 00:20:42,100 Force against Ukraine. President Vladimir Putin is 423 00:20:42,100 --> 00:20:46,000 demanding that the West rewrite, the post-cold war security 424 00:20:46,000 --> 00:20:49,000 agreement for Europe and demonstrating that Russia has a 425 00:20:49,008 --> 00:20:52,100 military capability to impose its will despite Western 426 00:20:52,100 --> 00:20:54,000 objections and economic sanctions. 427 00:20:54,500 --> 00:20:56,200 So he's basically saying that we're going to be doing this 428 00:20:56,200 --> 00:20:58,100 whether you like it or not to do this mr. 429 00:20:58,100 --> 00:21:01,100 Putin shifted military units from Russia border to China 430 00:21:01,400 --> 00:21:03,600 showing confidence in the relationship with Beijing. 431 00:21:03,900 --> 00:21:07,400 The two powers and effect are coordinating to reshape the 432 00:21:07,400 --> 00:21:09,400 global order to their advantage, though. 433 00:21:09,400 --> 00:21:11,900 Their ties, stopped short of a formal alliance. 434 00:21:12,100 --> 00:21:14,900 So I think it's clear that Russia and China do have shared 435 00:21:14,900 --> 00:21:17,000 interests with each other. They both want to be more 436 00:21:17,000 --> 00:21:19,500 powerful and they can leverage their relationship to accomplish 437 00:21:19,500 --> 00:21:22,300 that. But it also says it stops short 438 00:21:22,300 --> 00:21:24,500 of the formal alliance. I don't think they have 100% 439 00:21:24,500 --> 00:21:26,700 trust with each other. The probably still a little bit 440 00:21:26,700 --> 00:21:29,300 skeptical. This emerging order leaves the 441 00:21:29,300 --> 00:21:32,600 u.s. can Ending with two adversaries at once in 442 00:21:32,600 --> 00:21:35,900 geographically, disparate parts of the world where America has 443 00:21:35,900 --> 00:21:39,100 close partners and deep economic and political interests, the 444 00:21:39,100 --> 00:21:42,600 Biden Administration now faces, big decisions on whether to 445 00:21:42,600 --> 00:21:46,200 regear its priorities Step Up military spending demand allies, 446 00:21:46,200 --> 00:21:49,400 contribute more station additional forces abroad and 447 00:21:49,400 --> 00:21:51,900 develop more diverse energy sources to reduce Europe's 448 00:21:51,900 --> 00:21:54,700 dependence on Moscow. It's a lot of different options 449 00:21:54,700 --> 00:21:56,700 that they're trying to take. So that's a quick summary of 450 00:21:56,700 --> 00:21:59,000 what's going on right now. It doesn't sound good. 451 00:21:59,000 --> 00:22:00,400 It sounds like a lot of Bad news. 452 00:22:00,400 --> 00:22:02,400 It's a lot of scary news, frankly. 453 00:22:02,800 --> 00:22:05,400 And I don't want to diminish it in any way, this is really 454 00:22:05,400 --> 00:22:08,900 important stuff. It changes the Dynamics and it 455 00:22:08,900 --> 00:22:11,800 changes our future. It changes the positioning of 456 00:22:11,800 --> 00:22:13,800 all the super powers and world powers. 457 00:22:14,100 --> 00:22:16,100 So I think this is incredibly important stuff. 458 00:22:16,100 --> 00:22:20,300 I don't want to diminish that in any way, but one thing that is I 459 00:22:20,300 --> 00:22:24,400 think always the case with investing is there is always 460 00:22:24,400 --> 00:22:28,100 something to be concerned about all the time that never changes. 461 00:22:28,100 --> 00:22:30,800 That is something that is going to The case forever. 462 00:22:31,100 --> 00:22:33,400 We look at this advice again from Peter Lynch and I reference 463 00:22:33,400 --> 00:22:36,000 him all the time. He has this advice that I think 464 00:22:36,000 --> 00:22:39,800 is classic and it just lives on throughout every single year, 465 00:22:39,800 --> 00:22:42,600 every generation. Because it's so consistently 466 00:22:42,600 --> 00:22:46,400 true, in the stock market, the most important organ is this not 467 00:22:46,400 --> 00:22:51,800 work, it's not the brain. There's always on the way to 468 00:22:51,800 --> 00:22:55,300 work the amount of bad news you can hear is on for the infinite 469 00:22:55,300 --> 00:22:58,000 now. So question is can you take 470 00:22:58,000 --> 00:23:00,200 that? I mean, do you really have faith 471 00:23:00,800 --> 00:23:04,100 that 10 years, 20 years, 30 years from now, Common Stocks 472 00:23:04,100 --> 00:23:08,200 replace the be do you have the stomach to invest in companies 473 00:23:08,300 --> 00:23:11,600 through all the bad news because we know from now on the way to 474 00:23:11,600 --> 00:23:14,100 work, we're going to hear an infinite amount of bad news. 475 00:23:14,400 --> 00:23:17,900 What's going on right now with Russia, Ukraine, China, all the 476 00:23:17,900 --> 00:23:21,600 positioning, The Invasion, all Is incredibly bad news that 477 00:23:21,600 --> 00:23:24,500 again, I don't want to diminish but have you noticed something 478 00:23:24,900 --> 00:23:28,300 over the past month? Have you heard a thing about 479 00:23:28,300 --> 00:23:31,800 Omicron about a pandemic? That was literally killing 480 00:23:32,200 --> 00:23:35,700 hundreds of thousands of people, the virus spreading has gone 481 00:23:35,700 --> 00:23:38,700 down to almost, you know, below where it has been historically. 482 00:23:38,800 --> 00:23:41,500 It's almost not even an issue anymore, nobody even mentions it 483 00:23:41,500 --> 00:23:43,900 anymore. The news seemingly overnight 484 00:23:43,900 --> 00:23:46,500 shift it from Omicron to the next scariest thing. 485 00:23:46,500 --> 00:23:49,600 The new scary thing, Russia, and an invasion in China. 486 00:23:49,800 --> 00:23:53,600 Now, the 24-hour cable companies and all the news are reporting 487 00:23:53,600 --> 00:23:56,800 on that issue, 24/7. Because this one's done. 488 00:23:56,800 --> 00:24:00,200 It's old news, even though just a couple months ago, this was 489 00:24:00,200 --> 00:24:03,400 the scariest thing going on and the News was emphatic about this 490 00:24:03,400 --> 00:24:04,900 as well. So the only thing that's really 491 00:24:04,900 --> 00:24:08,300 consistent here is a fact that there is always something to 492 00:24:08,300 --> 00:24:10,100 worry about. There's always something bad in 493 00:24:10,100 --> 00:24:13,200 the news and you don't want to diminish any of these individual 494 00:24:13,200 --> 00:24:15,300 things. This month, it's Russia, 495 00:24:15,300 --> 00:24:18,000 Ukraine. It's China and World economic 496 00:24:18,000 --> 00:24:19,600 powers and positioning and politics. 497 00:24:20,000 --> 00:24:22,500 Last month, it was Omicron and a deadly pandemic. 498 00:24:22,900 --> 00:24:25,000 You know, the next couple months is can be something different. 499 00:24:25,000 --> 00:24:27,400 It will transition back to interest rates that will be the 500 00:24:27,400 --> 00:24:29,900 big scary thing. The news makes money selling the 501 00:24:29,900 --> 00:24:33,700 stuff, they make money talking about it, 24/7 all the time, and 502 00:24:33,700 --> 00:24:35,300 getting everyone else to talk about it. 503 00:24:35,400 --> 00:24:37,900 That's how they generate money. That's how they run their 504 00:24:37,900 --> 00:24:39,600 business. When you're investing in these 505 00:24:39,600 --> 00:24:42,900 companies, the time to be buying is when people are fearful. 506 00:24:43,000 --> 00:24:44,700 Those are when the opportunities exist. 507 00:24:44,700 --> 00:24:46,900 So, that's my thoughts for now. I'll see you in the next one.