1 00:00:00,100 --> 00:00:01,700 Welcome back to the Joseph Carlson show. 2 00:00:01,700 --> 00:00:05,700 On today's episode, we have two huge interviews to get into, 3 00:00:05,700 --> 00:00:08,600 first of all, we have the OG, the best investor in the world. 4 00:00:08,600 --> 00:00:12,100 Warren Buffett sitting down for an hour and he reveals many 5 00:00:12,100 --> 00:00:14,700 highlights. Many thoughts on recent moves, 6 00:00:14,700 --> 00:00:18,300 recent trades like buying the companies in Japan selling out 7 00:00:18,300 --> 00:00:21,200 of TSM and many other subjects. I'm going to go through and 8 00:00:21,200 --> 00:00:24,100 highlight what I think are the most important takeaways from 9 00:00:24,100 --> 00:00:26,100 buffets interview. But then, like I said, this is a 10 00:00:26,100 --> 00:00:28,400 two-for-one. We also have the CEO of Amazon, 11 00:00:28,400 --> 00:00:32,000 Andy, Jesse, and a it down interview answering questions 12 00:00:32,000 --> 00:00:33,900 about what's going on with Amazon. 13 00:00:34,100 --> 00:00:37,000 He talks about retail business, he talks about cloud computing. 14 00:00:37,200 --> 00:00:40,600 He talks about the entire media sector, he shares, many thoughts 15 00:00:40,600 --> 00:00:43,200 on what's going on, and we're going to dive into all of it in 16 00:00:43,200 --> 00:00:45,600 this episode. So, as always, we have a lot to 17 00:00:45,600 --> 00:00:47,300 jump into, in this episode, we're going to be going over 18 00:00:47,300 --> 00:00:49,200 both of those interviews. And I'm also going to be 19 00:00:49,200 --> 00:00:52,700 commenting just a bit on the market today and my portfolio. 20 00:00:52,800 --> 00:00:55,200 Now, having said that, let's go ahead and Jump Right In now the 21 00:00:55,200 --> 00:00:58,600 passive income portfolio is a experiment. 22 00:00:58,700 --> 00:01:01,100 It's an experiment and show My finances. 23 00:01:01,100 --> 00:01:04,500 What I'm doing with my investments publicly over the 24 00:01:04,500 --> 00:01:08,500 course of years, I started this portfolio back in 2017 and I 25 00:01:08,500 --> 00:01:11,500 started showing it publicly in 2019 since then. 26 00:01:11,500 --> 00:01:14,200 I've been doing weekly uploads showing what I'm doing with my 27 00:01:14,200 --> 00:01:16,400 money transparently every single week. 28 00:01:16,700 --> 00:01:20,600 So what you're seeing here is a continuation of a portfolio that 29 00:01:20,600 --> 00:01:23,700 I share both the good and the bad I've shown when it's gone in 30 00:01:23,700 --> 00:01:26,500 the red and I'll show when it goes in the green right now. 31 00:01:26,500 --> 00:01:30,000 It's performing really well. The portfolio started off as As 32 00:01:30,000 --> 00:01:32,800 a dividend growth portfolio. My major focus at the very 33 00:01:32,800 --> 00:01:35,700 beginning was on the dividend, the yield of the dividend at the 34 00:01:35,700 --> 00:01:38,500 time. Over time I've shaped my 35 00:01:38,500 --> 00:01:42,700 portfolio, molded it and I've refined it to be a smaller and I 36 00:01:42,708 --> 00:01:45,900 think stronger portfolio with a bigger emphasis on the 37 00:01:45,900 --> 00:01:47,600 underlying economics of the companies. 38 00:01:47,600 --> 00:01:51,300 I'm buying each one of them does pay a dividend currently. 39 00:01:51,600 --> 00:01:54,800 So all of these companies are dividend Growers but instead of 40 00:01:54,808 --> 00:01:58,000 focusing on companies that have very high yields, I'm focusing 41 00:01:58,000 --> 00:01:59,800 on companies that can grow their dividends. 42 00:02:00,000 --> 00:02:02,200 Quickly there's a couple standout companies in the 43 00:02:02,200 --> 00:02:04,800 portfolio. Currently, Texas Roadhouse is at 44 00:02:04,800 --> 00:02:06,900 eleven thousand seven hundred dollars in gains. 45 00:02:07,200 --> 00:02:10,900 This company recently just hit an all-time high yesterday at 46 00:02:10,900 --> 00:02:15,100 $111 per share in the consumer category we have CostCo as the 47 00:02:15,108 --> 00:02:18,100 big stand out here as well. This company's done really well 48 00:02:18,100 --> 00:02:21,100 over the past five years. I think it has a great future. 49 00:02:21,300 --> 00:02:24,400 I'm extremely bullish on. Costco has a company in the real 50 00:02:24,400 --> 00:02:26,300 estate category. Of course we have the G. 51 00:02:26,600 --> 00:02:29,600 This companies pulled back a little bit in stock price over 52 00:02:29,600 --> 00:02:33,000 the Last month, but I think it's still chugging along and one of 53 00:02:33,000 --> 00:02:36,100 my favorite things about this company is the enormous 54 00:02:36,100 --> 00:02:39,000 dividends that it pays. I can bring up my activity feed 55 00:02:39,000 --> 00:02:42,100 hair and look at my recent dividends and right here on the 56 00:02:42,100 --> 00:02:45,000 sixth of April. Just this month we have a 57 00:02:45,000 --> 00:02:48,100 dividend payment for five hundred and ninety seven dollars 58 00:02:48,600 --> 00:02:51,300 nearly $600 from a single company. 59 00:02:51,600 --> 00:02:53,900 That's the biggest dividend payment that I received from any 60 00:02:53,900 --> 00:02:55,900 company VG's a real estate company. 61 00:02:55,900 --> 00:02:58,000 That pays very very big dividends. 62 00:02:58,000 --> 00:03:00,700 I get some other healthy dividends as Also, it's not the 63 00:03:00,700 --> 00:03:02,400 only one that I'm getting income from. 64 00:03:02,600 --> 00:03:05,800 But VT is a big one in the tech category, of course we have 65 00:03:05,800 --> 00:03:08,300 apple and Microsoft to dividend-paying Big tech 66 00:03:08,300 --> 00:03:10,300 companies. I'm currently up 18 thousand, 67 00:03:10,300 --> 00:03:12,900 six hundred dollars, it's been a great performer. 68 00:03:13,200 --> 00:03:15,700 And the thing I like about Apple is it's not just the multiple 69 00:03:15,700 --> 00:03:18,300 increasing that's not what's happening with this company. 70 00:03:18,600 --> 00:03:21,300 Rather the stock is going up because a company is earning 71 00:03:21,300 --> 00:03:23,400 more and more money. Microsoft is another one that 72 00:03:23,400 --> 00:03:25,800 I've been recently, buying a bigger stake into as it's been 73 00:03:25,800 --> 00:03:28,700 selling off, but I'm basically flat on the company. 74 00:03:28,700 --> 00:03:30,800 I'm up just a couple. Thousand dollars on it. 75 00:03:30,800 --> 00:03:32,100 I'm going to give that one more time. 76 00:03:32,100 --> 00:03:35,400 Other notable mentions are the railroads Canadian Pacific and 77 00:03:35,400 --> 00:03:38,100 Union Pacific. I bought into these companies in 78 00:03:38,100 --> 00:03:41,800 2023, so they're brand-new, I think they're going to do great, 79 00:03:41,900 --> 00:03:43,500 but right now, I don't have much to show. 80 00:03:43,600 --> 00:03:45,500 They're basically just flat this year. 81 00:03:45,600 --> 00:03:47,400 And then finally, we have the financial category. 82 00:03:47,400 --> 00:03:49,600 This is another one that I bought into this year. 83 00:03:49,600 --> 00:03:52,900 These companies are unique because they work in finance, 84 00:03:53,200 --> 00:03:55,100 but they don't have any credit risk. 85 00:03:55,100 --> 00:03:57,900 They aren't lending money. They don't operate like a bank 86 00:03:57,900 --> 00:03:59,800 using debt. Instead they make money by. 87 00:04:00,000 --> 00:04:03,200 Selling services, selling data and collecting fees. 88 00:04:03,300 --> 00:04:06,000 And that's a business that I really think is attractive. 89 00:04:06,100 --> 00:04:09,200 So these ones are brand-new as well and likewise I have nothing 90 00:04:09,200 --> 00:04:12,000 to show for them so far. But I think over the next five 91 00:04:12,000 --> 00:04:14,700 years I'll get really attractive returns with both of these 92 00:04:14,700 --> 00:04:16,800 companies. So we'll see how this turns out 93 00:04:16,899 --> 00:04:18,600 overall. That's the highlight of the 94 00:04:18,600 --> 00:04:20,800 portfolio today. That's all the Holdings. 95 00:04:20,800 --> 00:04:23,400 All the bets, and I'm making and I'll let you know when I 96 00:04:23,400 --> 00:04:25,900 introduce new Holdings, Urban I start adding to another 97 00:04:25,900 --> 00:04:27,800 position. So if you want to see real 98 00:04:27,800 --> 00:04:31,800 investing, which is a parent investing with thorough 99 00:04:31,800 --> 00:04:35,100 follow-ups, every single week and showing what I'm actually 100 00:04:35,100 --> 00:04:37,400 doing with my money, you can follow along the channel for 101 00:04:37,400 --> 00:04:38,700 free. That's what you're going to get 102 00:04:38,900 --> 00:04:41,600 for year after year, after year with this channel. 103 00:04:41,600 --> 00:04:43,500 Now let's go ahead and move on and we'll jump into the 104 00:04:43,500 --> 00:04:45,200 interviews. We're going to start off with 105 00:04:45,200 --> 00:04:46,600 Buffett. Now in this hour, long 106 00:04:46,600 --> 00:04:48,600 interview, they go over a bunch of different subjects. 107 00:04:48,600 --> 00:04:50,500 What I want to do is go over what I think are the most 108 00:04:50,500 --> 00:04:52,600 important highlights. The biggest takeaways. 109 00:04:52,900 --> 00:04:57,600 The first question that buffets asked is regarding his net sales 110 00:04:57,600 --> 00:05:00,000 of banks, Buffett has been selling out a financial She'll 111 00:05:00,000 --> 00:05:03,400 companies specifically banks in aggregate, over the past couple 112 00:05:03,400 --> 00:05:04,900 of years. Some of the banks that you've 113 00:05:04,900 --> 00:05:09,300 sold include USB Wells, Fargo Goldman Sachs, JP Morgan PNC. 114 00:05:09,300 --> 00:05:11,000 Should we think that their banks that aren't run? 115 00:05:11,000 --> 00:05:12,800 Well run because you sold them or no. 116 00:05:13,000 --> 00:05:15,800 Okay, no. But I do think banking you get 117 00:05:15,800 --> 00:05:18,600 in a lot of trouble just because of the kind of things that they 118 00:05:18,600 --> 00:05:22,900 did and that I didn't like the banking business as well as I 119 00:05:22,900 --> 00:05:24,500 did before. He says it pretty 120 00:05:24,500 --> 00:05:27,400 straightforward there, the reason he's selling the banks is 121 00:05:27,400 --> 00:05:29,300 because he thinks they can get into trouble. 122 00:05:29,900 --> 00:05:32,000 And he's changed his mind a little bit. 123 00:05:32,000 --> 00:05:35,000 He just doesn't like them as much as he did previously. 124 00:05:35,300 --> 00:05:38,000 And that is something that Warren Buffett is very good at 125 00:05:38,300 --> 00:05:42,300 now, an egotistical investor one that has a lot of pride. 126 00:05:42,300 --> 00:05:46,700 A lot of ego would be unwilling to admit that they've changed 127 00:05:46,700 --> 00:05:50,100 their mind on a prior investment because they would view that as 128 00:05:50,100 --> 00:05:52,700 a weakness. If you change your mind, that 129 00:05:52,700 --> 00:05:55,000 means that your initial research wasn't as good as it should 130 00:05:55,000 --> 00:05:56,600 have. Been, if you change your mind, 131 00:05:56,600 --> 00:05:59,300 that means that you didn't have a good thesis to begin with. 132 00:05:59,500 --> 00:06:02,500 That's How Warren Buffett thinks he doesn't have ego. 133 00:06:02,500 --> 00:06:05,400 He doesn't have pride. He has an open mind with his 134 00:06:05,400 --> 00:06:08,100 current Investments. If he no longer likes them the 135 00:06:08,100 --> 00:06:11,000 same way that he did when he originally bought in, he sells 136 00:06:11,000 --> 00:06:13,900 them and that's something good. Investors routinely. 137 00:06:13,900 --> 00:06:17,500 Do they have an open mind? They don't make decisions based 138 00:06:17,500 --> 00:06:20,000 off of emotion or attachment to a company. 139 00:06:20,000 --> 00:06:23,100 If their views on a company changes, they sell oftentimes 140 00:06:23,100 --> 00:06:25,600 that's accompanied with the level of criticism from other 141 00:06:25,600 --> 00:06:27,500 people. If you sell a company that you 142 00:06:27,500 --> 00:06:29,700 once liked, you can be criticized for it. 143 00:06:29,800 --> 00:06:31,400 But Buffett doesn't care about that. 144 00:06:31,400 --> 00:06:33,400 He's not there to earn points from the public. 145 00:06:33,400 --> 00:06:35,600 He's there to earn money. Now, the big question is he 146 00:06:35,600 --> 00:06:39,700 still owns a lot of Bank of America so he's picking and 147 00:06:39,700 --> 00:06:41,800 choosing hair. He's a nut seller of banks. 148 00:06:41,800 --> 00:06:43,800 He's been selling off these companies over the past couple 149 00:06:43,800 --> 00:06:48,300 of years, but Bank of America is his second largest holding right 150 00:06:48,300 --> 00:06:51,100 behind Apple. It's still a massive position in 151 00:06:51,100 --> 00:06:53,600 the Buffett portfolio. Marvin, why did you keep Bank of 152 00:06:53,608 --> 00:06:58,700 America? What a they invited? 153 00:06:58,900 --> 00:07:03,100 I mean, I invited Soften many years earlier and they made a 154 00:07:04,000 --> 00:07:07,200 very decent deal for us. And I like Brian Moynihan 155 00:07:07,500 --> 00:07:11,800 enormously and I just don't want to. 156 00:07:12,100 --> 00:07:14,600 I don't want to sell it. He's a little bit Coy when asked 157 00:07:14,600 --> 00:07:17,500 about why he sold all the other ones but not Bank of America. 158 00:07:17,900 --> 00:07:21,100 He says that he likes Bank of America and if you caught it in 159 00:07:21,100 --> 00:07:24,400 his answer, the first sentence, the first thing he went to was 160 00:07:24,400 --> 00:07:27,900 that he got a pretty good deal if you recall Warren, Buffett 161 00:07:27,900 --> 00:07:31,400 did not just by Bank of America. In in the open market like 162 00:07:31,400 --> 00:07:34,400 everyone else, he got a preferential deal by the fact 163 00:07:34,400 --> 00:07:36,900 that he has a lot of money. He has a lot of connections. 164 00:07:36,900 --> 00:07:39,900 So we got a deal that the rest of us as retail investors are 165 00:07:39,900 --> 00:07:42,400 not able to get. And I don't believe that Buffett 166 00:07:42,400 --> 00:07:46,100 would own Bank of America today if he had to buy the company at 167 00:07:46,100 --> 00:07:48,900 the price that it trades that today on the open market. 168 00:07:49,000 --> 00:07:51,300 The next thing that Warren Buffett's asked about is the job 169 00:07:51,300 --> 00:07:53,200 of the FED, how was the FED doing? 170 00:07:53,200 --> 00:07:55,400 And how would he rate their performance? 171 00:07:55,500 --> 00:07:58,400 I do not think I could run the Fed as well as shape our rules. 172 00:07:58,400 --> 00:08:01,800 And I think Jay Paul's A terrific and you have to act on 173 00:08:01,800 --> 00:08:04,900 insufficient information. And you've got to, you've got to 174 00:08:04,900 --> 00:08:08,700 Ultimate responsibility to the American public and doesn't mean 175 00:08:08,700 --> 00:08:11,400 you can stop recessions. It doesn't mean that you can't 176 00:08:11,400 --> 00:08:13,500 earn battles at the good lungs or anything else. 177 00:08:13,800 --> 00:08:17,700 But it does mean that you got to keep the system working and the 178 00:08:17,700 --> 00:08:21,000 system came close to stopping. If you read a book called 179 00:08:21,000 --> 00:08:24,300 trillion-dollar triage, you can you can get it on a day-by-day 180 00:08:24,300 --> 00:08:30,000 account and people don't know how close it was and and Jay Jay 181 00:08:30,100 --> 00:08:34,700 Powell did not call for studies or position papers and you know 182 00:08:35,400 --> 00:08:37,500 like the debate and everything you just don't do it. 183 00:08:37,500 --> 00:08:41,500 You act there's an overarching bias to not like the FED. 184 00:08:41,500 --> 00:08:45,000 If you go onto social media, one of the biggest punching bags 185 00:08:45,000 --> 00:08:48,100 ever is the Fed. In particular j-pal whoever's 186 00:08:48,100 --> 00:08:50,300 leading the FED part of the reason that the FED is such, a 187 00:08:50,308 --> 00:08:53,000 big punching bag is because what they do is affect monetary 188 00:08:53,000 --> 00:08:57,100 policy and anyone likes an excuse for their stock 189 00:08:57,100 --> 00:09:00,400 performance doing poorly. So what are the feds Anything 190 00:09:00,500 --> 00:09:03,500 that can potentially negatively affect people stocks or their 191 00:09:03,500 --> 00:09:06,700 companies by raising interest rates, who do they go? 192 00:09:06,700 --> 00:09:10,400 As the punching bag, the fed. He's the one to blame, Jay Pals, 193 00:09:10,400 --> 00:09:13,400 the one that caused all of this grief in reality. 194 00:09:13,400 --> 00:09:16,100 When I look at JPL, he strikes me as someone that does have 195 00:09:16,100 --> 00:09:17,600 integrity. That's trying to do the right 196 00:09:17,600 --> 00:09:19,600 thing. He is working with incredibly 197 00:09:19,600 --> 00:09:24,000 limited data at the time, lots of people judge him in hindsight 198 00:09:24,000 --> 00:09:26,000 when he's making decisions in real time. 199 00:09:26,300 --> 00:09:29,500 Overall I agree with Warren Buffett here now moving on 200 00:09:29,500 --> 00:09:31,300 Buffy. It's asked about the overall 201 00:09:31,300 --> 00:09:34,700 economy and what he's seeing and his various companies as we know 202 00:09:34,700 --> 00:09:36,500 Berkshire. Hathaway is a conglomerate that 203 00:09:36,500 --> 00:09:38,900 owns a lot of different companies in different sectors. 204 00:09:39,200 --> 00:09:41,400 So Warren Buffett has day by day data. 205 00:09:41,500 --> 00:09:44,500 You can see day by day data about how all of these companies 206 00:09:44,500 --> 00:09:46,500 are doing, what the revenue looks like. 207 00:09:46,500 --> 00:09:49,200 What consumer habits look like. And he's asked about his 208 00:09:49,200 --> 00:09:52,300 insights on whether or not he thinks we're headed into a 209 00:09:52,300 --> 00:09:55,000 recession or whether he thinks things are still going. 210 00:09:55,000 --> 00:09:58,400 Well, those - 22 percent in February from a year ago. 211 00:09:58,500 --> 00:09:59,700 Exactly. That was going to happen. 212 00:09:59,800 --> 00:10:03,000 Sales profit and sales problems are down a lot more than that. 213 00:10:03,100 --> 00:10:06,200 On the other hand, some of our businesses are still doing fine, 214 00:10:06,300 --> 00:10:10,200 but they all are reporting that the new one, you know, it's 215 00:10:10,200 --> 00:10:13,300 almost her living of Awesomes orders were placed months 216 00:10:13,300 --> 00:10:18,200 earlier, and that sort of thing. But, but it's a tougher world 217 00:10:18,500 --> 00:10:20,600 out there in a great many businesses. 218 00:10:20,700 --> 00:10:24,500 Not in the insurance business people that run our businesses 219 00:10:25,200 --> 00:10:29,600 that do have any sensitivity to. The economy are surprised that 220 00:10:29,600 --> 00:10:31,500 we're Are they are now compared to where they thought they were 221 00:10:31,500 --> 00:10:34,100 going to be six months ago. Things are slowing down a little 222 00:10:34,100 --> 00:10:36,700 bit, especially with economically sensitive 223 00:10:36,700 --> 00:10:39,600 businesses. Some companies are so strong and 224 00:10:39,600 --> 00:10:42,300 resilient, they don't really rely on a strong economy. 225 00:10:42,500 --> 00:10:45,500 Those ones are doing fine, but companies, like the railroads 226 00:10:45,500 --> 00:10:48,700 companies, like companies, like, railroads and Retail companies 227 00:10:48,700 --> 00:10:51,400 are slowing down a little bit. So that's something to be 228 00:10:51,400 --> 00:10:54,200 expected, over the next couple of quarters, the sales and 229 00:10:54,200 --> 00:10:56,800 earnings of your companies might be lower than expected. 230 00:10:57,000 --> 00:10:59,600 But we can see how concerned Warren Buffett is about. 231 00:10:59,800 --> 00:11:03,700 This things are slowing down. Is he's shocked and scared and 232 00:11:03,700 --> 00:11:05,900 frightened, and wanting to sell out of these companies. 233 00:11:06,300 --> 00:11:09,300 Let's hear his answer here. That doesn't mean the world was 234 00:11:09,300 --> 00:11:11,700 coming to an end or anything. These 58 years. 235 00:11:11,700 --> 00:11:14,300 I've been running Berkshire. I mean, we run into all kinds of 236 00:11:14,308 --> 00:11:19,700 problems but but that's that's what business is about and we 237 00:11:19,700 --> 00:11:23,600 run our business so that we don't depend on everything being 238 00:11:25,000 --> 00:11:27,400 Big hunky, dory. Always, we might have saw that 239 00:11:27,400 --> 00:11:31,300 we will be the last man standing and so Warren, Buffett notes 240 00:11:31,300 --> 00:11:34,300 that things are slowing down, but the world's not coming to an 241 00:11:34,300 --> 00:11:35,700 end. And when he's been investing for 242 00:11:35,700 --> 00:11:39,900 over 60 years, he seen this over and over again, little economic 243 00:11:39,900 --> 00:11:42,100 slowdowns, as we go through different Cycles. 244 00:11:42,300 --> 00:11:45,400 The businesses that are the most impacted by, this are the 245 00:11:45,500 --> 00:11:47,600 economically sensitive businesses. 246 00:11:47,700 --> 00:11:50,600 When I look at my portfolio, those type of companies are the 247 00:11:50,600 --> 00:11:52,800 Industrials. They're going to be affected by 248 00:11:52,800 --> 00:11:55,700 an economic slowdown because As they move stuff, when the 249 00:11:55,700 --> 00:11:58,700 economy slows down less stuff is being moved and the company 250 00:11:58,700 --> 00:12:01,400 that's less economically. Sensitive is something like 251 00:12:01,400 --> 00:12:04,700 Costco, a consumer defensive that sells toilet, paper and 252 00:12:04,700 --> 00:12:06,500 water. So if you have an understanding 253 00:12:06,500 --> 00:12:09,100 of the type of businesses you're invested in, it can help gauge 254 00:12:09,100 --> 00:12:11,700 your expectations and make it. So you can whether through 255 00:12:11,700 --> 00:12:13,700 different storms easier for Buffett. 256 00:12:13,700 --> 00:12:17,100 He's not concerned at all about this because he says that he 257 00:12:17,100 --> 00:12:20,100 shaped his company in a way where he doesn't anticipate 258 00:12:20,100 --> 00:12:21,700 things to be hunky. Dory all the time. 259 00:12:21,700 --> 00:12:23,400 Things have been going well with the economy. 260 00:12:23,600 --> 00:12:27,000 He says he wants To be the last man standing that's how he 261 00:12:27,000 --> 00:12:30,400 operates his business being the last man standing means that he 262 00:12:30,400 --> 00:12:35,000 does not take risks with other people's money, he invests it 263 00:12:35,000 --> 00:12:38,100 but he does not take risk and that shatters a lot of people's 264 00:12:38,100 --> 00:12:41,700 perceptions because they view investing as taking risk the way 265 00:12:41,700 --> 00:12:45,400 that Warren Buffett reduces risk in his portfolio is by carrying 266 00:12:45,400 --> 00:12:49,100 in excess of a hundred and ten billion dollars in cash, which 267 00:12:49,100 --> 00:12:52,600 is more than enough money to get through any economic slowdown. 268 00:12:52,700 --> 00:12:55,700 So he's reduced risk. As much as possible in the 269 00:12:55,700 --> 00:12:58,200 Berkshire portfolio. Now the next topic that they ask 270 00:12:58,200 --> 00:13:02,000 about is always cryptocurrencies Bitcoin, that type of thing. 271 00:13:02,000 --> 00:13:04,000 Buffett has said that cryptocurrency specifically 272 00:13:04,000 --> 00:13:08,000 Bitcoin is not only rat poison which Charlie Munger coined that 273 00:13:08,000 --> 00:13:12,900 term but he said that it's rat poison squared buffets no fan of 274 00:13:12,900 --> 00:13:15,300 cryptocurrency. He doesn't like it, it goes 275 00:13:15,300 --> 00:13:18,300 against everything that he preaches, which is investing in 276 00:13:18,300 --> 00:13:20,400 things that have intrinsic value, which means that they're 277 00:13:20,400 --> 00:13:22,900 productive assets and they generate in comes in and of 278 00:13:22,900 --> 00:13:25,600 themselves, Bitcoin. It fit with his overall thesis 279 00:13:25,600 --> 00:13:27,100 in the same way that gold doesn't. 280 00:13:27,400 --> 00:13:31,000 Now, he's asked about an updated opinion on this because Bitcoin 281 00:13:31,000 --> 00:13:32,900 right now is actually performing really well. 282 00:13:33,200 --> 00:13:37,200 So doesn't this prove buffets opinion wrong, that's predicting 283 00:13:37,200 --> 00:13:40,200 when speculation will end. You know, when the gambling 284 00:13:40,200 --> 00:13:44,300 Instinct will go away and one more people want to get out and 285 00:13:44,600 --> 00:13:47,300 are getting in. And I have no way of if I 286 00:13:47,300 --> 00:13:49,600 thought I was good at that. I figure our way to make a lot 287 00:13:49,600 --> 00:13:50,700 of money. Different things. 288 00:13:51,300 --> 00:13:54,500 All I'm trying to do is buy good businesses, but I One thing I 289 00:13:54,508 --> 00:13:57,600 know is I, you know, I didn't like chain letters and when I 290 00:13:57,600 --> 00:14:00,300 was a kid, I thought why in the world should I send along a 291 00:14:00,300 --> 00:14:02,500 chain under the next night when I could start my own? 292 00:14:02,500 --> 00:14:07,700 I mean, I've seen people do stupid things all my life and I 293 00:14:08,000 --> 00:14:11,600 really, I empathize with that. I mean, people like to play the 294 00:14:11,600 --> 00:14:14,200 lottery, they're going to get 60 cents back on the dollar or 295 00:14:14,200 --> 00:14:17,300 whatever the number maybe. And I mean, people love the 296 00:14:17,300 --> 00:14:18,400 idea. They're going to make more money 297 00:14:18,400 --> 00:14:20,500 tomorrow and really drives them crazy. 298 00:14:20,500 --> 00:14:23,100 If their next-door neighbor is making a lot of money, not 299 00:14:23,100 --> 00:14:25,400 knowing what they're doing. Are just sitting there and their 300 00:14:25,400 --> 00:14:29,800 spouses saying, you know, why is that guy getting a second car? 301 00:14:29,800 --> 00:14:32,100 And why are we missing this whole thing? 302 00:14:32,100 --> 00:14:34,700 And the gambling, instinct is so strong. 303 00:14:34,800 --> 00:14:38,200 There's a lot to break down in this, take on cryptocurrency. 304 00:14:38,500 --> 00:14:42,000 He's asked about why it's gone up and he says that he can never 305 00:14:42,000 --> 00:14:44,400 time when these type of things end, he just knows that 306 00:14:44,400 --> 00:14:47,100 eventually something that doesn't have intrinsic value is 307 00:14:47,100 --> 00:14:50,400 going to come to an end and he sees Bitcoin and cryptocurrency 308 00:14:50,500 --> 00:14:52,700 as no different. It holds, no intrinsic value, 309 00:14:52,700 --> 00:14:55,400 and buffets opinion. So he doesn't see it as a 310 00:14:55,400 --> 00:14:59,200 worthwhile investment and he instantly after talking about 311 00:14:59,200 --> 00:15:01,700 Bitcoin. He talks about how people have 312 00:15:01,700 --> 00:15:04,700 done stupid things like this. Their whole life's with chain 313 00:15:04,700 --> 00:15:07,700 emails as something dumb and silly to do with people that 314 00:15:07,700 --> 00:15:11,500 just like to fit in, but then he instantly transitions over to 315 00:15:11,500 --> 00:15:15,100 gambling in buffets mind. He doesn't see any 316 00:15:15,100 --> 00:15:17,600 distinguishment. There's nothing different 317 00:15:17,600 --> 00:15:21,700 between owning cryptocurrencies, and gambling in his opinion. 318 00:15:21,900 --> 00:15:24,300 It's all speculation on something that doesn't Have 319 00:15:24,300 --> 00:15:26,300 intrinsic value with cryptocurrency. 320 00:15:26,300 --> 00:15:29,600 You're trying to time the market and outsmart other people with 321 00:15:29,600 --> 00:15:31,600 gambling. You're trying to beat the odds, 322 00:15:31,600 --> 00:15:33,600 where the odds are not in your favor. 323 00:15:33,700 --> 00:15:36,400 He doesn't like either activity and he sees them as nearly 324 00:15:36,400 --> 00:15:38,800 indistinguishable. And I share the same opinion on 325 00:15:38,800 --> 00:15:41,300 this. I have never owned a Bitcoin and 326 00:15:41,300 --> 00:15:44,400 aside from all the claims of how its revolutionising technology. 327 00:15:44,700 --> 00:15:47,100 I have yet to see how that's really come to fruition. 328 00:15:47,400 --> 00:15:51,000 When I look at Bitcoin or Salon or ether, I don't see these 329 00:15:51,000 --> 00:15:54,000 being used in any meaningful capacity whatsoever. 330 00:15:54,200 --> 00:15:57,600 I don't see blockchain being used in any meaningful capacity 331 00:15:57,600 --> 00:16:00,000 whatsoever. Now moving on we get to a couple 332 00:16:00,000 --> 00:16:03,000 more key pieces of information that Warren Buffett gives us. 333 00:16:03,300 --> 00:16:07,300 The first one is the answer to the mysterious question of why 334 00:16:07,300 --> 00:16:11,800 Warren Buffett's old TSM if you recall Warren Buffett excitedly 335 00:16:11,800 --> 00:16:16,000 purchased a lot of TSM and then only three months later the very 336 00:16:16,000 --> 00:16:19,600 next release of as 13f filing it showed that he had sold the 337 00:16:19,600 --> 00:16:22,000 entire position. So a lot of investors were 338 00:16:22,000 --> 00:16:24,400 wondering what happened. This is typically not Warren 339 00:16:24,400 --> 00:16:28,200 Buffett does Taiwan semiconductor is one of the 340 00:16:28,200 --> 00:16:30,600 best. Well, it's the best in that 341 00:16:30,600 --> 00:16:32,500 field and is one of the best companies in the world. 342 00:16:32,500 --> 00:16:37,000 It's a fabulous Enterprise, and Apple buys a lot of the products 343 00:16:37,000 --> 00:16:39,000 from home. I mean, they, they're good and 344 00:16:39,000 --> 00:16:40,300 they're coming the United States. 345 00:16:40,300 --> 00:16:44,100 And we're, we're actually running maybe even building for 346 00:16:44,100 --> 00:16:47,400 one of our subsidiaries helping build facilities form. 347 00:16:47,500 --> 00:16:54,200 But I do think that there is a danger of their to some, and I 348 00:16:54,200 --> 00:16:56,400 have any idea. There's actually a danger of 349 00:16:56,400 --> 00:17:00,200 seismic in action. I mean, and where they're 350 00:17:00,200 --> 00:17:04,000 located, but I re-evaluated that part of our. 351 00:17:04,000 --> 00:17:07,500 I didn't reevaluate the business to management or anything of the 352 00:17:07,500 --> 00:17:12,400 sort. It is a fabulous company and you 353 00:17:12,400 --> 00:17:16,200 know, you re-evaluated the geopolitical risk of China 354 00:17:16,300 --> 00:17:20,000 stepping in Egypt of Taiwan. Yeah, he re-evaluated the 355 00:17:20,000 --> 00:17:23,400 geopolitical risk of China invading Taiwan and even though 356 00:17:23,400 --> 00:17:27,000 he possesses the Ability of it to be low the consequences of an 357 00:17:27,000 --> 00:17:30,100 invasion in Taiwan. It would materially adversely 358 00:17:30,100 --> 00:17:34,200 impact that company to a huge degree and Warren Buffett does 359 00:17:34,200 --> 00:17:37,000 not like the risk. You notice a theme here with 360 00:17:37,000 --> 00:17:40,000 Buffett, everything he does is centered around. 361 00:17:40,000 --> 00:17:42,900 Reducing risk. He's never trying to maximize 362 00:17:42,900 --> 00:17:44,600 upside. He's never saying this is the 363 00:17:44,600 --> 00:17:46,300 best bet. This is the one that's going to 364 00:17:46,300 --> 00:17:49,600 double or triple. His primary focus is being 365 00:17:49,600 --> 00:17:53,100 risk-adverse focusing on things that are sherbets focusing on 366 00:17:53,100 --> 00:17:55,800 things that don't have. Of a percent chance of it going 367 00:17:55,800 --> 00:17:58,100 into destruction. Now, this leads into the next 368 00:17:58,100 --> 00:18:01,100 question. If he's avoiding TSM because of 369 00:18:01,100 --> 00:18:05,200 concerns about China, invading Taiwan, then why is he still 370 00:18:05,200 --> 00:18:08,000 invested in apple? What is the difference there? 371 00:18:08,000 --> 00:18:12,800 If somebody, if you're an Apple user and somebody offers you ten 372 00:18:12,800 --> 00:18:16,700 thousand dollars but the only provides lose you'll never be 373 00:18:16,700 --> 00:18:21,200 able to take away your ass, your iPhone and you'll never be able 374 00:18:21,200 --> 00:18:23,400 to buy another. You're not going to take it. 375 00:18:24,600 --> 00:18:28,800 If they tell you, if you buy another Ford motor car, they'll 376 00:18:28,800 --> 00:18:30,700 give you ten thousand dollars not to do that. 377 00:18:31,000 --> 00:18:33,400 You'll take the time to $1000 by shall be. 378 00:18:33,400 --> 00:18:36,700 Instead of it, is the hypothetical that Warren Buffett 379 00:18:36,700 --> 00:18:41,200 just presented was that if you were paid ten thousand dollars, 380 00:18:41,300 --> 00:18:44,800 would you accept that to never use an Apple product again? 381 00:18:44,800 --> 00:18:47,000 So you get paid ten thousand dollars one time. 382 00:18:47,100 --> 00:18:50,000 But the agreement is you can no longer use any Apple product for 383 00:18:50,000 --> 00:18:52,100 the rest of your life. I wouldn't accept that. 384 00:18:52,100 --> 00:18:55,700 I would never accept that deal. I Like too heavily on Apple 385 00:18:55,700 --> 00:18:59,100 products to me, the use of the products themselves between the 386 00:18:59,100 --> 00:19:03,300 MacBook and the iPhone, and the iPad, and the watch, and all the 387 00:19:03,300 --> 00:19:06,800 technology that they develop all the services, they develop is 388 00:19:06,800 --> 00:19:09,500 worth more than ten thousand dollars in my life. 389 00:19:09,700 --> 00:19:12,700 Now there is a portion of people that would say sure I'll take 390 00:19:12,700 --> 00:19:15,900 that I'll take that exchange but it's not many. 391 00:19:16,100 --> 00:19:19,300 Most people want to be able to use Apple products and I'd say 392 00:19:19,300 --> 00:19:22,900 the majority of Apple users in agreement with Warren Buffett 393 00:19:23,200 --> 00:19:26,100 would not accept Ten thousand dollars to never be able to use 394 00:19:26,100 --> 00:19:28,400 an Apple product, again, in their lifetime. 395 00:19:28,500 --> 00:19:30,800 I've actually done a very similar poll except for, with 396 00:19:30,800 --> 00:19:33,500 Apple, it was with Google. I made a poll on my Twitter 397 00:19:33,500 --> 00:19:36,400 following that said, would you agree to never being able to use 398 00:19:36,500 --> 00:19:40,600 YouTube again? If you were paid 25,000 dollars, 399 00:19:40,600 --> 00:19:45,000 sixty, seven point five percent of respondents said, no, they 400 00:19:45,000 --> 00:19:49,900 would turn down 25k. That is the Staggering value of 401 00:19:49,900 --> 00:19:52,200 these type of companies. YouTube has so much value in 402 00:19:52,208 --> 00:19:53,900 people's lives that they can't be paid. 403 00:19:54,100 --> 00:19:56,500 To stop using it. Apple products have so much 404 00:19:56,500 --> 00:19:58,700 value in people's lives that it's unlikely. 405 00:19:58,700 --> 00:20:01,300 They would accept a large one-time payment to never be 406 00:20:01,308 --> 00:20:03,600 able to use their products. Again, it's a company that makes 407 00:20:03,600 --> 00:20:06,300 too many good products that too many users like using. 408 00:20:06,700 --> 00:20:09,900 So this is the motive Apple. Now, if you ask the same 409 00:20:09,900 --> 00:20:13,100 question about Ford, for example and say, would you accept 410 00:20:13,100 --> 00:20:15,200 10-thousand dollars to never buy another Ford car? 411 00:20:15,200 --> 00:20:18,500 Again, the exact same question, at Warren, Buffett asked, he is 412 00:20:18,500 --> 00:20:21,400 accurate and saying that the majority of people will accept 413 00:20:21,400 --> 00:20:24,000 it, they will easily move over to another car. 414 00:20:24,100 --> 00:20:25,800 Facture. There's lots of good options to 415 00:20:25,800 --> 00:20:28,000 choose from and they don't have the same type of attachment to 416 00:20:28,000 --> 00:20:31,600 the customer that something like apple or YouTube does Buffett. 417 00:20:31,600 --> 00:20:33,900 May not understand all the technology behind Apple 418 00:20:33,900 --> 00:20:36,700 products, but he understands human behavior. 419 00:20:36,700 --> 00:20:38,900 He understands the durable competitive advantage of 420 00:20:38,908 --> 00:20:41,900 companies and you can see that at play with this simple 421 00:20:41,900 --> 00:20:43,800 comparison. Now, the final question, I want 422 00:20:43,800 --> 00:20:46,700 to go over is Warren Buffett being asked about Paramount, 423 00:20:47,100 --> 00:20:50,800 this is a company where I have not understood the investment 424 00:20:50,800 --> 00:20:55,600 thesis hair Paramount's low. Ian, I think that that's part of 425 00:20:55,600 --> 00:20:58,600 it, but it doesn't really fit in with the Warren Buffett 426 00:20:58,600 --> 00:21:00,400 Investments. Paramount is a streaming 427 00:21:00,400 --> 00:21:02,200 business, it's much more volatile, it's highly 428 00:21:02,200 --> 00:21:05,900 competitive and it's a lot of Hit and Miss based a lot of 429 00:21:05,908 --> 00:21:08,800 things that Warren Buffett himself has said in the past 430 00:21:08,800 --> 00:21:11,300 that he doesn't like. So why did Buffett by Paramount? 431 00:21:11,300 --> 00:21:13,900 That's framing that you know, it's not really a very good 432 00:21:13,900 --> 00:21:15,800 business. Let's pause right there. 433 00:21:16,100 --> 00:21:18,600 First sentence out of his mouth. After being asked about 434 00:21:18,600 --> 00:21:21,600 Paramount is streaming is really not a good business. 435 00:21:21,900 --> 00:21:25,000 So we're off to a good start. Why did he Best in Paramount. 436 00:21:25,000 --> 00:21:27,600 Well, streaming the whole company that that's just not a 437 00:21:27,600 --> 00:21:29,700 good business to be in. And then over time of the made, 438 00:21:29,700 --> 00:21:32,300 lots of money to shareholders. Really haven't done that rate 439 00:21:32,300 --> 00:21:38,800 over time and supplied the many it's a glamorous business and 440 00:21:40,000 --> 00:21:42,000 had some breads are not all, I would get o. 441 00:21:42,000 --> 00:21:45,300 And they they look for pigeons show man and they find them. 442 00:21:45,300 --> 00:21:49,900 I mean, it's like attracts people and meet suckers. 443 00:21:49,900 --> 00:21:53,400 It's great way to meet girls, you know, for why do I but the 444 00:21:54,600 --> 00:21:57,100 It isn't fundamentally that would have business. 445 00:21:57,100 --> 00:22:01,100 Whether it was Distributing producing movies or and and 446 00:22:01,400 --> 00:22:04,200 you've got some people that I've Got Deep Pockets that aren't 447 00:22:04,200 --> 00:22:07,400 going to quit. And the product are offering 448 00:22:07,400 --> 00:22:10,600 people a chance to watch all the movies, you know, for peanuts 449 00:22:10,600 --> 00:22:13,000 and all that. But he's been talking for a 450 00:22:13,008 --> 00:22:16,000 while now and I'm still waiting for the punchline here. 451 00:22:16,400 --> 00:22:19,400 Buffett you are asked, why do you invest in Paramount? 452 00:22:19,600 --> 00:22:22,000 His opening sentence was streaming is a bad business and 453 00:22:22,000 --> 00:22:25,000 then he goes on for a minute, talking about Tire industry, and 454 00:22:25,000 --> 00:22:28,400 how he's basically load. Some of it, it's an industry 455 00:22:28,400 --> 00:22:31,900 which has embellishment and Grandeur has lots of people that 456 00:22:31,900 --> 00:22:34,400 dress up, and it makes them feel good about themselves. 457 00:22:34,700 --> 00:22:38,400 They themselves become rich and wealthy, but the investors so 458 00:22:38,400 --> 00:22:40,300 far haven't done well in aggregate. 459 00:22:40,300 --> 00:22:42,800 So are still waiting to see why Warren Buffett bought this 460 00:22:42,800 --> 00:22:45,200 company so far. He's making a nice bear case 461 00:22:45,200 --> 00:22:47,700 against the entire industry. Then they rarest prices will 462 00:22:47,700 --> 00:22:49,600 find out but so far they haven't been able to. 463 00:22:49,600 --> 00:22:52,100 They've been able to attract subscribers but they have talked 464 00:22:52,100 --> 00:22:54,300 about a terrible price. All right, you give A whole lot 465 00:22:54,300 --> 00:22:55,800 of reasons why not to buy Paramount. 466 00:22:55,800 --> 00:22:57,800 Why did you buy it? Well, we'll see what happens. 467 00:22:59,800 --> 00:23:01,800 Now, usually if Warren Buffett does not want to answer a 468 00:23:01,800 --> 00:23:05,100 question directly. He gives a very vague answer, a 469 00:23:05,100 --> 00:23:09,800 very non answer answer in this case he just says, we'll find 470 00:23:09,800 --> 00:23:11,800 out. He doesn't answer the question. 471 00:23:11,900 --> 00:23:14,800 We still don't know why he bought Paramount and were left 472 00:23:14,800 --> 00:23:17,800 to our speculation. I think that this was likely a 473 00:23:17,800 --> 00:23:21,200 purchase as an acquisition play. He knows that there's big time 474 00:23:21,200 --> 00:23:23,900 investors trying to scoop up as many streaming. 475 00:23:24,100 --> 00:23:25,800 As possible. He knows it Paramount was 476 00:23:25,800 --> 00:23:28,100 trading at a very cheap price and I think that there's a 477 00:23:28,100 --> 00:23:30,400 chance that Warren Buffett was thinking the company was going 478 00:23:30,400 --> 00:23:32,500 to be acquired by another larger company. 479 00:23:32,600 --> 00:23:33,900 Now, of course, we don't know this for sure. 480 00:23:33,900 --> 00:23:36,600 He doesn't give a direct answer but that would be my guess but 481 00:23:36,600 --> 00:23:39,100 that is the Buffett interview. I think a lot of insights have 482 00:23:39,100 --> 00:23:40,600 come from that singular interview. 483 00:23:40,700 --> 00:23:43,800 He has a strong focus on minimizing risk on remaining 484 00:23:43,800 --> 00:23:46,200 financially, stable, investing in companies with solid 485 00:23:46,200 --> 00:23:49,600 fundamentals, very strong free cash flows as overall focus is 486 00:23:49,600 --> 00:23:52,400 always growing Berkshire without putting the investors in 487 00:23:52,400 --> 00:23:54,200 Jeopardy. Now moving on from the Buffett 488 00:23:54,200 --> 00:23:56,400 interview. We have another interview with 489 00:23:56,400 --> 00:23:59,900 another CEO of a massive conglomerate company. 490 00:24:00,200 --> 00:24:03,200 It's not technically a conglomerate but Amazon may as 491 00:24:03,200 --> 00:24:07,000 well be a tech version of Berkshire, it has a series of 492 00:24:07,008 --> 00:24:09,100 different businesses, all generating different amounts of 493 00:24:09,100 --> 00:24:12,400 cash flow, and it runs on the edge of losing money, some 494 00:24:12,400 --> 00:24:15,300 years, some years, it has massive negative cash flows and 495 00:24:15,300 --> 00:24:16,700 making a lot of money other years. 496 00:24:16,900 --> 00:24:20,700 But the trend right now, for Amazon is one, that's a 497 00:24:20,708 --> 00:24:23,400 struggle. Amazon is losing a massive 498 00:24:23,400 --> 00:24:26,300 amount of Money every single year and it's actually 499 00:24:26,300 --> 00:24:28,600 staggering if you see this visualized. 500 00:24:28,800 --> 00:24:32,700 I want to show you a series of three charts, three, charts to 501 00:24:32,700 --> 00:24:36,600 illustrate, how big this problem is for Amazon hairs chart number 502 00:24:36,600 --> 00:24:40,200 one, we've all seen this one before, this is the free cash 503 00:24:40,200 --> 00:24:44,900 flow of Amazon, over time, going back to 1996, but this right 504 00:24:44,900 --> 00:24:48,200 here, illustrates a problem in and of itself, but this is not 505 00:24:48,200 --> 00:24:51,600 the only problem that Amazon is facing if we look at chart to 506 00:24:52,100 --> 00:24:55,700 this shows the free cash flow And then alongside it the 507 00:24:55,700 --> 00:24:59,800 stock-based compensation. We can see the total cost to the 508 00:24:59,800 --> 00:25:04,200 shareholder as if the stock payments were done in cash like 509 00:25:04,200 --> 00:25:06,600 a cash bonus. So this gives you a more 510 00:25:06,600 --> 00:25:10,000 accurate picture of what the financial situation looks like. 511 00:25:10,100 --> 00:25:14,500 Not only did the free cash, flows turn - in 2021 and 2022. 512 00:25:14,800 --> 00:25:18,600 But the stock based compensation is exploding upwards. 513 00:25:18,700 --> 00:25:21,200 It's growing at an incredibly rapid Pace. 514 00:25:21,300 --> 00:25:25,100 Now, in the new version of qual, trim, we net He's out to see the 515 00:25:25,100 --> 00:25:27,200 total impact on the free cash flow. 516 00:25:27,500 --> 00:25:31,700 If stock-based compensation was treated like cash, I call this, 517 00:25:31,700 --> 00:25:35,500 the adjusted free cash flow. This is what Amazon's adjusted 518 00:25:35,500 --> 00:25:39,500 free cash flow looks like they had - thirty six point five 519 00:25:39,500 --> 00:25:41,800 billion dollars of free cash flow. 520 00:25:42,000 --> 00:25:45,600 If you net out the stock-based compensation - thirty six point, 521 00:25:45,600 --> 00:25:48,400 five billion is the most any company has ever lost in the 522 00:25:48,400 --> 00:25:51,100 history of the world. There is no other recorded loss 523 00:25:51,100 --> 00:25:53,400 that big. Now, Amazon stock, as a result 524 00:25:53,400 --> 00:25:55,200 Has Fallen. On precipitously over the past 525 00:25:55,200 --> 00:25:59,000 two years, it's been a struggle and the CEO Andy jassy, he 526 00:25:59,000 --> 00:26:01,400 hasn't had a great run in terms of stock performance. 527 00:26:01,400 --> 00:26:04,800 So what he's trying to do in this interview is show the plans 528 00:26:04,800 --> 00:26:08,100 of how he's going to fix this. And the first question is on 529 00:26:08,100 --> 00:26:11,000 this subject, where does he see Amazon in terms of future 530 00:26:11,000 --> 00:26:14,300 Investments and layoffs? I'm very optimistic but what 531 00:26:14,308 --> 00:26:16,800 lies ahead for Amazon and I think there are a lot of reasons 532 00:26:16,800 --> 00:26:18,700 for I'd start with just a couple of data points. 533 00:26:18,700 --> 00:26:23,500 If you, if you look at our two largest businesses, if you look 534 00:26:23,500 --> 00:26:25,900 in our Doors business, which our retail business. 535 00:26:26,300 --> 00:26:29,100 We still only have even though it's about a four hundred thirty 536 00:26:29,100 --> 00:26:32,600 four billion dollar business, we still only have about one 537 00:26:32,600 --> 00:26:36,100 percent of the worldwide Market segment, share, and in retail, 538 00:26:36,100 --> 00:26:39,200 and 80% of it still lives in physical stores. 539 00:26:39,700 --> 00:26:43,000 And if you look in our AWS business, which is about an 85 540 00:26:43,000 --> 00:26:46,700 billion, dollar Revenue run rate business about, 90% of that 541 00:26:46,800 --> 00:26:49,900 Global, it spend is still on premises, not in the cloud. 542 00:26:49,900 --> 00:26:53,300 So if you believe that those equations are going to flip over 543 00:26:53,300 --> 00:26:56,500 time which What we do and we're seeing we have a lot more growth 544 00:26:56,500 --> 00:26:58,600 in front of us. One of the biggest criticisms 545 00:26:58,600 --> 00:27:01,600 that you hear about investing in large companies like apple and 546 00:27:01,600 --> 00:27:04,200 Amazon, is that they're so large. 547 00:27:04,200 --> 00:27:06,900 That the law of large numbers means that their growth is going 548 00:27:06,900 --> 00:27:08,800 to essentially go down to nothing. 549 00:27:08,900 --> 00:27:11,400 Now I'm an investor in Amazon and I've heard this same 550 00:27:11,400 --> 00:27:13,700 argument continually for a long period of time. 551 00:27:14,000 --> 00:27:17,100 One of the time periods where I heard the Amazon is already very 552 00:27:17,100 --> 00:27:18,400 large. The growth is going to 553 00:27:18,400 --> 00:27:22,800 decelerate it's going to slow down was around 2020 around this 554 00:27:22,800 --> 00:27:25,600 time period right? Here, the revenue at the time, 555 00:27:25,600 --> 00:27:28,100 Amazon did was around 80 billion dollars in Revenue. 556 00:27:28,200 --> 00:27:32,000 Now, Amazon's revenue in the last quarter is nearing 160 557 00:27:32,000 --> 00:27:35,000 billion. The retail segment is massive 558 00:27:35,000 --> 00:27:38,100 and like he notes, most of retail is still physical. 559 00:27:38,300 --> 00:27:40,900 It's moving online every single year. 560 00:27:41,000 --> 00:27:44,100 Now, next up, you gets into the talk about the subject of the 561 00:27:44,100 --> 00:27:47,000 year which is AI. That is the buzzword of the 562 00:27:47,000 --> 00:27:49,200 Year. Unlike a lot of other buzzwords. 563 00:27:49,200 --> 00:27:52,200 I do think there's a lot behind a II think it's real. 564 00:27:52,200 --> 00:27:54,100 I think it's meaningful. I think it will have Major 565 00:27:54,100 --> 00:27:56,400 impacts. So it's both a buzzword and a 566 00:27:56,408 --> 00:27:59,200 very meaningful term. Amazon is big into AI. 567 00:27:59,200 --> 00:28:01,900 They've, they've done this in a sense with machine learning for 568 00:28:01,900 --> 00:28:04,900 a long period of time, but now they're getting directly into a, 569 00:28:04,900 --> 00:28:08,300 I like many of their competitors and they launched a new service, 570 00:28:08,300 --> 00:28:11,500 a new product called Amazon Bedrock. 571 00:28:11,500 --> 00:28:13,400 Would they want to do, is they want to work off of a 572 00:28:13,400 --> 00:28:16,500 foundational model, it's big and great already, and then have the 573 00:28:16,500 --> 00:28:18,900 ability to customize it for their own purposes and that's 574 00:28:18,900 --> 00:28:22,100 what Bedrock is, which we now stay, which is it'll give you 575 00:28:22,100 --> 00:28:26,200 access to go. Language models, from anthropic 576 00:28:26,200 --> 00:28:29,600 from stability, I from AI 21. And from ourselves, we're 577 00:28:29,600 --> 00:28:31,500 externalizing. Some of our own models, we call 578 00:28:31,500 --> 00:28:33,800 tighten, and then it lets you not consider models. 579 00:28:33,800 --> 00:28:35,200 These are models to build software. 580 00:28:35,200 --> 00:28:39,100 Yeah, they're big large language models that you can build these 581 00:28:39,100 --> 00:28:41,900 generative AI experiences on top of and you just have to 582 00:28:41,900 --> 00:28:44,700 fine-tune them for what specific about your application. 583 00:28:44,700 --> 00:28:47,800 So that's Bedrock, which I think will change the game for people. 584 00:28:47,800 --> 00:28:49,700 What Amazon is trying to accomplish here? 585 00:28:49,700 --> 00:28:53,800 Ultimately is making it so that once again Developers. 586 00:28:53,900 --> 00:28:58,000 An Enterprise customers have no reason to leave AWS. 587 00:28:58,200 --> 00:29:00,400 They want to bring everything in house. 588 00:29:00,400 --> 00:29:03,400 They want to be the solution for all technical needs. 589 00:29:03,500 --> 00:29:06,100 That's Bedrock, which I think will change the game for people. 590 00:29:06,100 --> 00:29:09,800 And then you know they're going to be these applications built. 591 00:29:10,100 --> 00:29:13,000 On top of these large language models chat GPT is an example 592 00:29:13,000 --> 00:29:16,600 that we now say is something called code whisper which is for 593 00:29:16,600 --> 00:29:19,100 developers. And so if you're writing code, 594 00:29:19,100 --> 00:29:21,300 instead of having to write everything and do all the art 595 00:29:21,300 --> 00:29:25,200 and the science yourself, you can in a For language way, just 596 00:29:25,200 --> 00:29:28,600 say what you want to do and could whisper will generate the 597 00:29:28,608 --> 00:29:32,300 code for you and that will substantially change developers 598 00:29:32,300 --> 00:29:34,600 productivity. Now, Amazon has a tool that 599 00:29:34,600 --> 00:29:38,400 mares Microsoft's co-pilot, both of them have text to code while 600 00:29:38,400 --> 00:29:40,100 Amazon is a biggest cloud provider. 601 00:29:40,100 --> 00:29:42,800 They have the most customers which they can use to bundle 602 00:29:42,800 --> 00:29:45,800 these products together. As I mentioned earlier, we have 603 00:29:45,800 --> 00:29:48,800 been using machine learning in a very deep way and every one of 604 00:29:48,800 --> 00:29:51,700 our businesses, we have our own large language models that we've 605 00:29:51,700 --> 00:29:53,700 been working on for multiple years. 606 00:29:53,900 --> 00:29:57,000 And that fueled out of our experiences and I think you 607 00:29:57,000 --> 00:30:00,400 should expect in general. I think you should expect that 608 00:30:00,500 --> 00:30:03,200 generative, AI has the chance to transform every customer 609 00:30:03,200 --> 00:30:05,600 experience that. You know, we are using it 610 00:30:05,600 --> 00:30:08,700 investing in a very deeply across all of our businesses and 611 00:30:08,700 --> 00:30:11,700 Amazon, and then for AWS, we're going to make sure that every 612 00:30:11,700 --> 00:30:13,000 other company can use it as well. 613 00:30:13,100 --> 00:30:15,400 Now he's talked a little bit about the retail business. 614 00:30:15,400 --> 00:30:18,400 He's talked a lot about AWS and the next thing that he's asked 615 00:30:18,400 --> 00:30:22,400 about is the advertising business, which is adjacent to 616 00:30:22,400 --> 00:30:24,200 retell. That's a big part of the Sizing 617 00:30:24,200 --> 00:30:26,500 business. But it's not the only aspect of 618 00:30:26,500 --> 00:30:29,700 the advertising business Amazon's advertising includes 619 00:30:29,700 --> 00:30:33,300 both retail and sponsored listings, but it also includes 620 00:30:33,300 --> 00:30:35,900 Twitch TV. It also includes Amazon Prime 621 00:30:35,900 --> 00:30:40,200 video, they sell ads all over the place and this is a massive 622 00:30:40,200 --> 00:30:42,800 growing business. I personally believe that 623 00:30:42,800 --> 00:30:46,500 Amazon's advertising business is superior to both Google's and 624 00:30:46,500 --> 00:30:48,300 metas. It is more direct than either of 625 00:30:48,300 --> 00:30:51,200 those companies and the growth rates so far of the advertising 626 00:30:51,200 --> 00:30:55,300 business has been staggering even when When most advertising 627 00:30:55,300 --> 00:30:58,000 Focus businesses have it, I think slowed, over the last 628 00:30:58,000 --> 00:31:00,800 several quarters. And a lot of that is just our 629 00:31:00,800 --> 00:31:06,400 advertising is uniquely effective as we're able to, if 630 00:31:06,400 --> 00:31:10,500 you think about on Amazon, when you're an Advertiser, we have 631 00:31:10,500 --> 00:31:12,700 the ability with the machine learning algorithms that we've 632 00:31:12,700 --> 00:31:15,100 built, and we continue spend most of our resources on that 633 00:31:15,500 --> 00:31:18,600 because we understand shopping behaviors were able to when 634 00:31:18,600 --> 00:31:20,500 customers search for something, we're able to place 635 00:31:20,500 --> 00:31:23,100 advertisements there that are relevant to what their search 636 00:31:23,100 --> 00:31:25,000 are. So MERS respond better to them, 637 00:31:25,000 --> 00:31:26,500 which means they're more effective, which means 638 00:31:26,500 --> 00:31:28,100 advertisers like advertising there. 639 00:31:28,100 --> 00:31:32,400 So, it's, you know, most of our resource continues to be in 640 00:31:32,400 --> 00:31:35,400 making those machine learning, algorithms, more targeted, and, 641 00:31:35,400 --> 00:31:38,100 and more relevant for customers. I think we've done a pretty good 642 00:31:38,100 --> 00:31:40,200 job with more. We can do he highlights again. 643 00:31:40,200 --> 00:31:43,300 The main reason I think Amazon has the superior advertising 644 00:31:43,300 --> 00:31:47,200 business when you search in a term in Amazon, they know 645 00:31:47,200 --> 00:31:50,500 exactly what you're looking to buy and they can use machine 646 00:31:50,500 --> 00:31:53,700 learning to prompt you with sponsored listings that are the 647 00:31:53,800 --> 00:31:56,000 The perfect fit for what you're searching for. 648 00:31:56,000 --> 00:31:57,800 That's the most direct form of advertising. 649 00:31:57,800 --> 00:32:00,500 You can get you can compare this to both Google and meta when 650 00:32:00,500 --> 00:32:02,900 you're watching a YouTube video or you're searching something on 651 00:32:02,900 --> 00:32:06,000 Google search, oftentimes you're not looking to buy something. 652 00:32:06,200 --> 00:32:08,500 So they're going to have to convince you to buy something. 653 00:32:08,500 --> 00:32:11,100 When you're not looking to buy something when you're scrolling 654 00:32:11,100 --> 00:32:13,800 through Instagram or you're scrolling through Facebook and 655 00:32:13,800 --> 00:32:16,900 most cases, you're also not looking to buy something so 656 00:32:16,900 --> 00:32:19,600 they're doing a lot more work to get the customer to buy 657 00:32:19,600 --> 00:32:22,300 something, it requires more tracking, it requires more 658 00:32:22,300 --> 00:32:26,000 effort when you go to Dot-com, you are looking to purchase 659 00:32:26,000 --> 00:32:27,900 something. I think you should also remember 660 00:32:27,900 --> 00:32:32,500 in our advertising business, that most of it is in our owned 661 00:32:32,500 --> 00:32:35,700 and operated properties. We still have a lot of 662 00:32:35,700 --> 00:32:38,700 opportunity to thoughtfully integrate advertising into our 663 00:32:38,700 --> 00:32:43,700 video, into our lives Sports, into our audio products, and to 664 00:32:43,700 --> 00:32:45,900 groceries. So it's still pretty early days 665 00:32:45,900 --> 00:32:48,200 for us with respect what's possible and advertise you 666 00:32:48,200 --> 00:32:49,800 mentioned. Now, this next part, he 667 00:32:49,800 --> 00:32:52,400 addresses something that he never addressed in his letter. 668 00:32:52,600 --> 00:32:55,500 In the letter, he went over the Retail business, he went over 669 00:32:55,500 --> 00:32:59,300 AWS he went over Kuiper, he went over the advertising business, 670 00:32:59,500 --> 00:33:03,300 but he never went over media and Harry's asked directly about 671 00:33:03,300 --> 00:33:07,000 Amazon Prime video, what does Amazon trying to accomplish with 672 00:33:07,000 --> 00:33:11,000 their video service? We're trying to build the best 673 00:33:11,000 --> 00:33:13,800 destination and the best collection of streaming video 674 00:33:13,800 --> 00:33:17,500 content, anywhere and and live sports turns out to be something 675 00:33:17,500 --> 00:33:20,900 that people really like, you know, it draws a lot of people 676 00:33:20,900 --> 00:33:24,000 are, you know, our Thursday Night Football had the Just 677 00:33:24,000 --> 00:33:28,000 number of new Prime, customers signing up for and live. 678 00:33:28,000 --> 00:33:33,200 Sports has been successful for us in Europe to with with EPL 679 00:33:33,200 --> 00:33:35,000 and UEFA. So I think you can expect that 680 00:33:35,000 --> 00:33:37,400 we'll do more sport but now it seems like a lot of the bigger 681 00:33:37,400 --> 00:33:39,500 companies and media are going into sports. 682 00:33:39,600 --> 00:33:42,100 Apple wants to own sports. Google wants to own sports. 683 00:33:42,100 --> 00:33:45,000 Amazon does the same thing with Comcast and Disney? 684 00:33:45,000 --> 00:33:47,600 Every Major Video content platform wants to have their 685 00:33:47,600 --> 00:33:50,300 hands in sport? Except for the notable standout, 686 00:33:50,300 --> 00:33:53,200 which is Netflix. Now, finally the final question 687 00:33:53,200 --> 00:33:56,700 for jazz See is about the stock and the stock price. 688 00:33:56,700 --> 00:33:59,400 How much does he spend of his time focusing on the stock 689 00:33:59,400 --> 00:34:01,700 price? I don't spend a lot of my time 690 00:34:01,700 --> 00:34:04,800 focused on the stock price, its kind of it Amazon. 691 00:34:05,000 --> 00:34:07,700 Remember, I've been Amazon almost 26 years now. 692 00:34:07,700 --> 00:34:12,000 So I kind of grew up here and we have always had this perspective 693 00:34:12,000 --> 00:34:14,600 that you can't be 24. First of all, we tend to be 694 00:34:14,600 --> 00:34:19,300 long, term, Focus. We there's that adage that in 695 00:34:19,300 --> 00:34:22,400 the short term, the stock market is a voting machine in the long 696 00:34:22,400 --> 00:34:23,500 term. It's a weighing machine and 697 00:34:23,500 --> 00:34:25,500 weave. Really seen that over 26 years 698 00:34:25,500 --> 00:34:28,400 in any one period of time. It may be, you know, further up 699 00:34:28,400 --> 00:34:30,500 or further down but it really matters what you do for 700 00:34:30,500 --> 00:34:32,300 customers over long periods of change. 701 00:34:32,400 --> 00:34:35,000 It's the answer you would expect from any good CEO that they 702 00:34:35,000 --> 00:34:37,400 don't spend all their day looking at the stock price much 703 00:34:37,400 --> 00:34:39,699 better at focus on the things you have direct power over, 704 00:34:39,699 --> 00:34:41,699 which is the long-term growth of the company. 705 00:34:41,900 --> 00:34:43,300 So there we have, both interviews. 706 00:34:43,300 --> 00:34:45,000 Let me know what you think of what they said. 707 00:34:45,000 --> 00:34:46,800 And I will see you in the next one.