1
00:00:00,040 --> 00:00:02,920
Today on the Joseph Carlson 
Show, you can ignore this sell 

2
00:00:02,920 --> 00:00:04,520
off. 
You don't have to worry about it

3
00:00:04,520 --> 00:00:08,119
because apparently, according to
the Yardeni Research president, 

4
00:00:08,560 --> 00:00:10,360
this bull market's just getting 
started. 

5
00:00:10,760 --> 00:00:12,480
That's right. 
He didn't just say that we're in

6
00:00:12,480 --> 00:00:14,200
a bull market. 
That would be obvious because 

7
00:00:14,200 --> 00:00:17,040
we've had two years now of huge 
gains. 

8
00:00:17,320 --> 00:00:20,320
He said that the bull market is 
just getting started. 

9
00:00:20,680 --> 00:00:22,280
And I want to listen to his 
reasoning why. 

10
00:00:22,280 --> 00:00:26,120
Anytime someone has some type of
outside view where they believe 

11
00:00:26,120 --> 00:00:28,800
that things are going to be 
overly optimistic in the market,

12
00:00:29,240 --> 00:00:32,280
I want to at least listen why? 
And the Yardeni Research 

13
00:00:32,280 --> 00:00:35,080
president is someone that has a 
lot of data behind what he says.

14
00:00:35,280 --> 00:00:39,000
He runs this analysis firm that 
releases tons of economic data. 

15
00:00:39,320 --> 00:00:41,960
So we're going to jump into this
interview, dive into why he 

16
00:00:41,960 --> 00:00:43,520
thinks this is just getting 
started. 

17
00:00:43,960 --> 00:00:45,680
Of course, we also have some 
other big headlines. 

18
00:00:45,920 --> 00:00:49,120
The New York Stock Exchange 
experienced a technical issue 

19
00:00:49,440 --> 00:00:53,720
that caused Berkshire Hathaway 
to be displayed as down 99%. 

20
00:00:54,200 --> 00:00:57,600
So investors in Berkshire woke 
up and their brokerage said that

21
00:00:57,600 --> 00:01:01,040
they lost all of their money, 
all of their money except for 1%

22
00:01:01,040 --> 00:01:02,760
of their Berkshire Hathaway 
holding. 

23
00:01:03,120 --> 00:01:05,800
We'll be looking at the air. 
What caused this, what the 

24
00:01:05,800 --> 00:01:09,080
market does in these situations.
We have news that Gamestop's 

25
00:01:09,160 --> 00:01:13,280
roaring Kitty is back at it. 
And this time, he's not just 

26
00:01:13,280 --> 00:01:15,680
posting memes. 
He's not just posting gifts. 

27
00:01:16,000 --> 00:01:19,960
He has a $116 million position 
in GameStop. 

28
00:01:20,360 --> 00:01:23,320
This is pretty big news and it's
received a lot of criticism once

29
00:01:23,320 --> 00:01:27,160
again from various people 
suggesting that this should be 

30
00:01:27,160 --> 00:01:29,400
illegal. 
Something he's doing is wrong 

31
00:01:29,400 --> 00:01:31,080
here. 
We'll be going over this as 

32
00:01:31,080 --> 00:01:32,520
well. 
And then finally, we also have 

33
00:01:32,520 --> 00:01:35,800
news that Paramount Global and 
Skydance have agreed to terms of

34
00:01:35,800 --> 00:01:37,920
a merger. 
It's not official yet, but we 

35
00:01:37,920 --> 00:01:40,440
have news that they have agreed.
We're going to be going over the

36
00:01:40,440 --> 00:01:43,600
details of this, seeing if it's 
good for Paramount shareholders 

37
00:01:43,600 --> 00:01:46,880
and seeing how this could affect
companies like Netflix or Disney

38
00:01:46,880 --> 00:01:48,360
Plus. 
Now, on top of that, we'll be 

39
00:01:48,360 --> 00:01:50,680
looking at My Portfolio. 
I'll cue you in on what I'm 

40
00:01:50,680 --> 00:01:53,080
doing with my holdings, what 
companies I'm actively buying 

41
00:01:53,360 --> 00:01:55,760
and how I see things right now. 
So we have a lot to get to in 

42
00:01:55,760 --> 00:01:57,520
this episode. 
So before we jump in, just a 

43
00:01:57,520 --> 00:02:01,160
quick mention. qualtrim.com, the
stock analysis tool that I've 

44
00:02:01,160 --> 00:02:03,760
built, is now available for a 
free trial. 

45
00:02:03,760 --> 00:02:06,920
If you're a first time user, you
can join the Patreon today and 

46
00:02:06,920 --> 00:02:08,880
you get the entire month for 
free. 

47
00:02:09,120 --> 00:02:10,680
So try it out, I think you'll 
love it. 

48
00:02:10,680 --> 00:02:12,400
Now let's first start off with 
the news of the day. 

49
00:02:12,400 --> 00:02:15,040
We know that we've been in a 
bull market for at least a year.

50
00:02:15,280 --> 00:02:21,280
In 2022, the market went down 
18%, so the S&P 500 dropped 18%.

51
00:02:21,280 --> 00:02:23,680
That was really painful. 
It was a difficult time for 

52
00:02:23,680 --> 00:02:25,680
investors. 
Nobody wanted to pay attention 

53
00:02:25,680 --> 00:02:28,160
to the market. 
A lot of people lost all 

54
00:02:28,160 --> 00:02:31,280
enthusiasm in the market. 
And that was the best time to be

55
00:02:31,280 --> 00:02:37,320
buying because the year after, 
in 2023, the market went up 23%,

56
00:02:37,640 --> 00:02:41,800
an enormous gain in the S&P 500,
even more in the QQQ. 

57
00:02:42,160 --> 00:02:46,680
And then in 2024, this year, the
market's up around 10%. 

58
00:02:47,120 --> 00:02:49,440
So we're well into a bull market
at this point. 

59
00:02:49,680 --> 00:02:52,440
Things have been going good. 
And anytime that happens, 

60
00:02:52,440 --> 00:02:55,160
there's lots of people that 
believe that it can't go on 

61
00:02:55,160 --> 00:02:58,120
forever, that inevitably we have
to enter into another bear 

62
00:02:58,120 --> 00:02:59,920
market. 
So there's a lot of people now 

63
00:02:59,920 --> 00:03:03,320
saying that is it time? 
Is it time for the bear market 

64
00:03:03,320 --> 00:03:05,960
to finally arrive? 
But Ed Yardini, the president of

65
00:03:05,960 --> 00:03:08,080
Yardini Research, believes just 
the opposite. 

66
00:03:08,320 --> 00:03:11,240
He believes the data shows that 
we're not about to enter into a 

67
00:03:11,240 --> 00:03:15,120
bear market, but in fact, we're 
entering into a new bull market.

68
00:03:15,360 --> 00:03:18,040
The bull market is just getting 
started now. 

69
00:03:18,040 --> 00:03:21,320
Who is Ed Yardini again? 
He's the president of Yardini 

70
00:03:21,320 --> 00:03:23,560
Research. 
This is a research firm that he 

71
00:03:23,560 --> 00:03:25,800
started. 
You can go online and just 

72
00:03:25,800 --> 00:03:29,080
access these charts, but he has 
tons of data and tons of charts 

73
00:03:29,400 --> 00:03:32,520
about the economy, about the 
stock market, about valuations, 

74
00:03:32,920 --> 00:03:35,160
and it's actually pretty cool. 
You can go through this website.

75
00:03:35,840 --> 00:03:38,400
You can just browse through 
anything, all the different 

76
00:03:38,400 --> 00:03:40,760
sectors and get broad 
information. 

77
00:03:40,960 --> 00:03:43,480
I'm not sponsored by them. 
I have no affiliation with them,

78
00:03:43,760 --> 00:03:45,880
but this is a website that I 
reference from time to time. 

79
00:03:45,880 --> 00:03:48,320
So you can go to like the 
fundamentals here of the the US 

80
00:03:48,320 --> 00:03:51,640
stock market. 
You could go to quarterly 

81
00:03:51,640 --> 00:03:54,600
metrics, write offs, earnings 
and the economy, revenue in the 

82
00:03:54,600 --> 00:03:57,240
economy. 
You could go to dividend and 

83
00:03:57,240 --> 00:03:58,880
buybacks. 
That's a chart that I like. 

84
00:03:59,160 --> 00:04:00,720
So you can see all these 
different things. 

85
00:04:00,720 --> 00:04:03,560
For example, you could go to 
valuation and look at the S&P 

86
00:04:03,560 --> 00:04:05,480
500's earnings and dividend 
yield. 

87
00:04:05,760 --> 00:04:08,040
We open this up. 
It has a lot of figures and 

88
00:04:08,040 --> 00:04:11,080
breakdowns of historic 
valuations of the stock market 

89
00:04:11,080 --> 00:04:13,880
and future. 
So this is a pretty extensive 

90
00:04:13,880 --> 00:04:16,480
research website. 
A lot of this is just publicly 

91
00:04:16,480 --> 00:04:18,959
available. 
And the the president of this 

92
00:04:18,959 --> 00:04:21,440
wants to make the data more 
available to people. 

93
00:04:21,440 --> 00:04:23,560
Then of course, from that 
research, he tries to draw 

94
00:04:23,560 --> 00:04:25,760
conclusions. 
He tries to draw forecasts of 

95
00:04:25,760 --> 00:04:27,760
the future. 
And in this interview, he lays 

96
00:04:27,760 --> 00:04:29,360
out his thesis. 
Let's go ahead and take a 

97
00:04:29,360 --> 00:04:30,160
listen. 
Well. 

98
00:04:30,160 --> 00:04:33,000
All in all, I'd say that the 
results were better than 

99
00:04:33,000 --> 00:04:35,200
expected. 
The coming into the earnings 

100
00:04:35,200 --> 00:04:37,960
season, the analysts were 
looking at something like a one 

101
00:04:37,960 --> 00:04:43,000
to 2% increase in earnings, S&P 
500 earnings on a year over year

102
00:04:43,000 --> 00:04:46,320
basis and it came in more like 6
to 7%. 

103
00:04:46,320 --> 00:04:49,280
There's still a few more 
companies to report, but clearly

104
00:04:49,280 --> 00:04:51,560
a much better result. 
And we definitely are seeing 

105
00:04:51,560 --> 00:04:55,880
that in analysts estimates of 
earnings for this year, next 

106
00:04:55,880 --> 00:04:58,200
year and in the following year. 
They've been raising their 

107
00:04:58,200 --> 00:05:01,120
numbers. 
So All in all, this certainly 

108
00:05:01,120 --> 00:05:03,440
justifies the bull market. 
So this is true. 

109
00:05:03,440 --> 00:05:05,960
Analysts are raising their price
targets on companies left and 

110
00:05:05,960 --> 00:05:08,720
right because the companies are 
still growing their earnings at 

111
00:05:08,720 --> 00:05:12,880
a healthy pace. 
Not the one to 2% GDP growth. 

112
00:05:12,880 --> 00:05:16,120
They're growing at 6 to 7%. 
As long as these companies 

113
00:05:16,120 --> 00:05:19,440
continue to grow earnings, the 
stock market is justifying its 

114
00:05:19,440 --> 00:05:21,560
increasing value. 
Yeah, you've got year end 

115
00:05:21,560 --> 00:05:27,120
targets, 5400 for the S&P 500 by
the end of this year, 6000 by 

116
00:05:27,120 --> 00:05:30,840
the end of next year and I think
it's 6500 by the end of 2026. 

117
00:05:31,160 --> 00:05:35,000
That is part of your Roaring 20s
analysis. 

118
00:05:35,000 --> 00:05:37,720
We're not talking 1920s, we're 
talking the twenty 20s this 

119
00:05:37,720 --> 00:05:39,400
time. 
So you still see a long way to 

120
00:05:39,400 --> 00:05:42,800
go with this bull market. 
I do, I think it's actually 

121
00:05:42,800 --> 00:05:45,040
fairly early on. 
It's some people are talking 

122
00:05:45,040 --> 00:05:49,960
about it being mid cycle a bull 
market or or getting near the 

123
00:05:49,960 --> 00:05:53,000
end of the story. 
But I don't think that's the 

124
00:05:53,000 --> 00:05:54,880
case. 
I think we're going to continue 

125
00:05:54,880 --> 00:05:58,760
to see surprisingly strong 
productivity. 

126
00:05:58,760 --> 00:06:01,800
We're not seeing that obviously 
in the first quarter numbers, 

127
00:06:02,120 --> 00:06:04,640
but last year we had very strong
productivity and I think that's 

128
00:06:04,640 --> 00:06:06,720
going to continue into this year
and beyond. 

129
00:06:07,640 --> 00:06:10,800
So yes, I I think there are 
similarities between the twenty 

130
00:06:10,800 --> 00:06:16,520
20s and the 19 and the 1920s and
that's technology LED 

131
00:06:16,520 --> 00:06:19,040
productivity that increased 
standards of living, which I 

132
00:06:19,040 --> 00:06:21,240
think we're seeing now. 
I think it's very refreshing to 

133
00:06:21,240 --> 00:06:24,440
see someone with this positive 
viewpoint because we know by the

134
00:06:24,440 --> 00:06:28,000
data that the media has an 
overall very negative bias. 

135
00:06:28,240 --> 00:06:31,760
The media likes to highlight 
negative news, doomerish news, 

136
00:06:31,760 --> 00:06:33,840
things that are going to be bad 
for the future. 

137
00:06:34,080 --> 00:06:36,240
And they do that because it 
draws more attention, more 

138
00:06:36,240 --> 00:06:39,120
clicks, more eyeballs. 
People love it when they talk 

139
00:06:39,120 --> 00:06:42,600
about the end of the world, the 
end of the stock market, how we 

140
00:06:42,600 --> 00:06:45,760
should be super cautious, how we
should be super concerned. 

141
00:06:46,040 --> 00:06:47,840
Those people get a lot of media 
attention. 

142
00:06:48,120 --> 00:06:50,600
So it's refreshing to see 
someone that's saying, no, 

143
00:06:50,600 --> 00:06:52,760
things aren't so bad. 
No, the market's going to 

144
00:06:52,760 --> 00:06:55,360
continue to go up. 
In fact, I believe we're early 

145
00:06:55,360 --> 00:06:57,800
in the cycle. 
You haven't missed the train. 

146
00:06:57,800 --> 00:07:00,720
You can still be part of this. 
And he justifies this viewpoint 

147
00:07:00,720 --> 00:07:04,880
with a good amount of data. 
For many years prior to the 

148
00:07:05,560 --> 00:07:08,760
maybe past 10 years, everybody 
thought that the profit margin 

149
00:07:09,120 --> 00:07:12,200
was just a very cyclical 
variable, this one sideways, but

150
00:07:12,200 --> 00:07:15,800
the trend's actually been to the
upside, and we're thinking that 

151
00:07:15,800 --> 00:07:20,040
we could be seeing something 
like a 13 to 14% profit margin 

152
00:07:20,040 --> 00:07:22,480
for the S&P 500 in the next 
couple of years. 

153
00:07:22,960 --> 00:07:25,640
I mean, that's pretty amazing 
for the short, maybe even the 

154
00:07:25,640 --> 00:07:28,720
medium term, but we know how the
1920s ended. 

155
00:07:29,000 --> 00:07:32,880
You see a similar sort of crash 
coming. 

156
00:07:32,880 --> 00:07:34,920
And and if So, what? 
What would cause it? 

157
00:07:35,800 --> 00:07:39,480
No, I, I, I, I mean at this 
point it's, it's hard to see 

158
00:07:39,480 --> 00:07:44,280
that that far ahead. 
But if we use that analogy, that

159
00:07:44,280 --> 00:07:48,920
the problem that we had in in 
the 1920s with the reason it 

160
00:07:48,920 --> 00:07:52,520
ended so badly is because 
Congress and the and the 

161
00:07:52,520 --> 00:07:55,760
president at that time, Hoover, 
signed the Smoot Hawley Tariff 

162
00:07:56,160 --> 00:07:58,680
in June of 1930. 
If you look at a chart of the 

163
00:07:58,680 --> 00:08:02,200
Dow Jones industrials average, 
you'll see that, yeah, the great

164
00:08:02,200 --> 00:08:05,200
crash started in October of 
1929. 

165
00:08:05,200 --> 00:08:09,520
But then in early 1930, we 
actually reversed that and 

166
00:08:09,880 --> 00:08:11,520
regained about half of what we 
lost. 

167
00:08:11,520 --> 00:08:16,640
So it was no big deal until the 
the June 3rd, 1930 passage of 

168
00:08:16,640 --> 00:08:19,680
Smoot Hawley and that caused the
Great Crash and I think it was a

169
00:08:19,680 --> 00:08:21,280
big contributor to the 
depression. 

170
00:08:21,280 --> 00:08:24,040
Other factors were important 
too, but that one was a big one.

171
00:08:24,360 --> 00:08:27,680
So he accurately points out that
a policy change was a major 

172
00:08:27,680 --> 00:08:29,760
contributor to the crash in the 
1920s. 

173
00:08:30,000 --> 00:08:32,440
And then of course, that's 
unlikely to be repeated in this 

174
00:08:32,440 --> 00:08:35,280
circumstance. 
So the data we have right now, 

175
00:08:35,520 --> 00:08:39,120
everything that we know right 
now does not point to a bear 

176
00:08:39,120 --> 00:08:40,440
market. 
Now, of course, there's no 

177
00:08:40,440 --> 00:08:42,240
guaranteed of a continued bull 
market. 

178
00:08:42,360 --> 00:08:43,880
That's not the case that he's 
making. 

179
00:08:44,080 --> 00:08:46,760
The case that he's making is 
that a lot of data supports the 

180
00:08:46,760 --> 00:08:48,720
idea that the bull market can 
continue. 

181
00:08:48,720 --> 00:08:50,920
And in fact, we're in the early 
stages of it. 

182
00:08:51,280 --> 00:08:54,560
In terms of My Portfolio, I look
at this the same way. 

183
00:08:54,560 --> 00:08:57,280
I think the market could go 
down, but I'm not concerned 

184
00:08:57,280 --> 00:09:00,240
about that because the companies
I'm invested in can weather 

185
00:09:00,240 --> 00:09:03,400
through a recession or a 
correction or a downturn. 

186
00:09:03,720 --> 00:09:06,560
These are very strong companies 
with very strong financials. 

187
00:09:06,880 --> 00:09:11,040
If you invest this way or if you
buy broad market ETFs, you don't

188
00:09:11,040 --> 00:09:12,960
have to concern yourself with 
sell offs. 

189
00:09:13,240 --> 00:09:16,680
And I would treat every day as 
though it's the new day of a new

190
00:09:16,680 --> 00:09:18,840
bull market. 
I'm buying different companies 

191
00:09:18,840 --> 00:09:21,240
that I think are at good 
valuations and I'm investing in 

192
00:09:21,240 --> 00:09:23,520
companies that I believe are 
high quality companies that have

193
00:09:23,520 --> 00:09:25,200
sold off. 
The company that I bought the 

194
00:09:25,200 --> 00:09:29,440
most recently is Salesforce. 
Of course, with the 20% dip, I 

195
00:09:29,440 --> 00:09:32,160
had to buy some of it. 
I bought another $4000 of 

196
00:09:32,160 --> 00:09:35,480
Salesforce during this dip. 
I now have a $43,000 position. 

197
00:09:35,480 --> 00:09:39,360
It's now $9500 in the red and I 
believe it's only a matter of 

198
00:09:39,360 --> 00:09:41,360
time until I flip this one back 
into the green. 

199
00:09:41,360 --> 00:09:44,040
I'm going to continue to hold it
and buy more of it if it trades 

200
00:09:44,040 --> 00:09:45,520
down. 
Now let's go to move on to some 

201
00:09:45,520 --> 00:09:47,320
news. 
This headline was a bit 

202
00:09:47,320 --> 00:09:49,400
interesting. 
I woke up this morning, checked 

203
00:09:49,400 --> 00:09:52,640
the stock market and saw that 
Berkshire Hathaway had dropped 

204
00:09:52,640 --> 00:09:56,040
99% in price. 
I thought it may have just been 

205
00:09:56,040 --> 00:09:57,760
like like the website I was 
checking. 

206
00:09:58,040 --> 00:10:00,600
Then I check other websites and 
it says the same thing 

207
00:10:01,040 --> 00:10:03,280
everywhere. 
Across every financial website. 

208
00:10:03,280 --> 00:10:06,800
It says Berkshire Hathaway had 
dropped 99% in stock price. 

209
00:10:06,800 --> 00:10:09,080
So obviously something was 
wrong. 

210
00:10:09,360 --> 00:10:13,200
They say a technical issue on 
Monday caused a class shares of 

211
00:10:13,200 --> 00:10:15,320
Warren Buffett's Berkshire 
Hathaway to appear to be down 

212
00:10:15,560 --> 00:10:18,280
nearly 100%. 
The New York Stock Exchange said

213
00:10:18,280 --> 00:10:20,680
the problem stem from the price 
bands published by the 

214
00:10:20,680 --> 00:10:24,560
Consolidated Tape Association, 
the organization used by major 

215
00:10:24,560 --> 00:10:27,720
exchanges to jointly provide 
real time stock quotes. 

216
00:10:28,040 --> 00:10:32,480
The New York Stock Exchange said
at roughly 11:45 that the issue 

217
00:10:32,480 --> 00:10:34,640
had been resolved and trading 
was back to normal. 

218
00:10:34,720 --> 00:10:37,360
The CTA said that there was an 
issue with the limit up and 

219
00:10:37,360 --> 00:10:40,680
limit down price bands, a 
mechanism meant to combat market

220
00:10:40,680 --> 00:10:43,120
volatility. 
The issue may have been caused 

221
00:10:43,120 --> 00:10:46,600
by the new software release, and
the organization will revert 

222
00:10:46,600 --> 00:10:50,120
back to prior software programs 
and primary data Centers for 

223
00:10:50,120 --> 00:10:53,000
Tuesday's trading session. 
So this was just a bug, a 

224
00:10:53,000 --> 00:10:55,280
technical issue. 
The Consolidated Tape 

225
00:10:55,280 --> 00:10:58,640
Association released this new 
software update and it caused 

226
00:10:58,640 --> 00:11:02,040
Berkshire stock to go down 99%. 
I think that would be a 

227
00:11:02,040 --> 00:11:04,480
stressful Monday. 
I can't imagine the developers 

228
00:11:04,480 --> 00:11:06,520
working on this. 
Whatever developer was 

229
00:11:06,520 --> 00:11:10,120
responsible for releasing this 
update and testing it, They they

230
00:11:10,120 --> 00:11:13,120
come out with an update, they 
release it, and then all of a 

231
00:11:13,120 --> 00:11:18,480
sudden they caused a stock, a 
Fortune 10 stock to drop 99%. 

232
00:11:19,080 --> 00:11:22,080
Oops, something's wrong. 
Roll it back to the previous 

233
00:11:22,080 --> 00:11:23,960
update. 
No big deal. 

234
00:11:24,280 --> 00:11:27,560
It's, it's OK everyone. 
That would be a a rough start to

235
00:11:27,560 --> 00:11:29,400
your Monday. 
Hopefully those developers are 

236
00:11:29,400 --> 00:11:31,600
doing OK Now. 
The next big news we have is 

237
00:11:31,600 --> 00:11:34,520
that Gamestop's roaring Kitty, 
Keith Gill is back. 

238
00:11:34,840 --> 00:11:36,840
And this time he's not just 
posting memes. 

239
00:11:36,840 --> 00:11:39,000
He's not just doing the little 
GIF video thing. 

240
00:11:39,120 --> 00:11:42,800
The post on Reddit revealed a 
$116 million position in 

241
00:11:42,800 --> 00:11:45,320
GameStop. 
This is a big option bet. 

242
00:11:45,600 --> 00:11:48,320
If you look at the post on 
Reddit, it's nothing 

243
00:11:48,320 --> 00:11:50,600
spectacular. 
It's literally just a post of 

244
00:11:50,600 --> 00:11:52,240
his position. 
This is it. 

245
00:11:52,520 --> 00:11:55,640
The post title is GME Yolo. 
Update with the date. 

246
00:11:55,880 --> 00:11:58,320
There's no other context other 
than the screenshot of his 

247
00:11:58,320 --> 00:12:00,520
position. 
This post on social media has 

248
00:12:00,520 --> 00:12:03,000
caused GameStop to go up 35% on 
the day. 

249
00:12:03,200 --> 00:12:06,480
So obviously he's made a lot of 
money on this trade and this 

250
00:12:06,480 --> 00:12:09,120
raises the question of the 
legalities behind this. 

251
00:12:09,120 --> 00:12:12,440
We know that his post is causing
the stock to go up, so this is 

252
00:12:12,440 --> 00:12:14,640
like a self fulfilling money 
circle. 

253
00:12:14,840 --> 00:12:18,280
He posted, he has a position, it
causes a stock to go up and he 

254
00:12:18,280 --> 00:12:20,440
makes money on the position that
he posted. 

255
00:12:20,840 --> 00:12:23,560
This is something that obviously
anyone would love to have. 

256
00:12:23,800 --> 00:12:26,120
Everyone would love to have the 
influence to just be able to 

257
00:12:26,120 --> 00:12:29,400
post a position. 
It causes a stock to up 35% and 

258
00:12:29,400 --> 00:12:32,640
you make a fortune. 
And there's not many people in 

259
00:12:32,640 --> 00:12:35,280
that position. 
There's only a few, only a few 

260
00:12:35,280 --> 00:12:37,920
with big enough influence. 
Warren Buffett's one of them. 

261
00:12:38,160 --> 00:12:41,960
Major hedge funds and Roaring 
Kitty or Keith Gill with 

262
00:12:41,960 --> 00:12:43,920
GameStop. 
The difficulty in arguing of 

263
00:12:43,920 --> 00:12:47,160
whether or not this is illegal 
is answering the question of how

264
00:12:47,160 --> 00:12:50,840
this is any different than what 
people do on CNBC Every single 

265
00:12:50,840 --> 00:12:53,120
day. 
Every single day on CNBC, people

266
00:12:53,120 --> 00:12:56,080
go on and talk their book. 
They talk about their stocks, 

267
00:12:56,080 --> 00:12:59,240
they talk about their thesisis. 
They want their stocks to go up.

268
00:12:59,600 --> 00:13:02,800
It's just the case that most of 
them don't have the influence of

269
00:13:02,800 --> 00:13:04,960
Keith Gill. 
If they had the influence of 

270
00:13:04,960 --> 00:13:07,240
Keith Gill, does that make it 
illegal suddenly? 

271
00:13:07,400 --> 00:13:09,920
Those are important questions. 
But when I look at this, I don't

272
00:13:09,920 --> 00:13:12,160
see any problem. 
From what I can tell, he's not 

273
00:13:12,160 --> 00:13:14,960
trading with any insider data or
exclusive knowledge. 

274
00:13:15,160 --> 00:13:18,000
He's just posting his positions,
which is what professional 

275
00:13:18,000 --> 00:13:20,960
investors do every three months.
Now, finally, we get to the news

276
00:13:20,960 --> 00:13:23,480
of the Paramount Global and 
Skydance merger. 

277
00:13:23,680 --> 00:13:25,400
We know that Paramount has been 
struggling. 

278
00:13:25,600 --> 00:13:27,720
It's a stock that I have 
considered a value trap for a 

279
00:13:27,720 --> 00:13:30,520
while because they have assets 
that are not at scale. 

280
00:13:30,720 --> 00:13:33,600
It's a company that's weighed 
down by a lot of legacy assets. 

281
00:13:33,840 --> 00:13:36,960
They have some great studio 
content, but they don't have the

282
00:13:36,960 --> 00:13:39,720
subscribers, they don't have the
eyes on them, they don't have 

283
00:13:39,720 --> 00:13:42,120
the scale. 
When companies lack scale, they 

284
00:13:42,120 --> 00:13:44,920
need to merge. 
They need to try to buy scale or

285
00:13:44,960 --> 00:13:47,480
at least dilute and merge with 
scale, they say. 

286
00:13:47,480 --> 00:13:50,320
The agreement term comes after 
weeks of discussion and recent 

287
00:13:50,320 --> 00:13:53,440
competing offers from Apollo 
Global Management and Sony 

288
00:13:53,440 --> 00:13:56,160
Pictures. 
Now they've had multiple people 

289
00:13:56,160 --> 00:13:58,840
they're talking to, talking 
about different agreements, 

290
00:13:58,840 --> 00:14:01,080
different arrangements. 
But one thing that has been 

291
00:14:01,080 --> 00:14:04,920
important to Paramount is to try
to keep what they've created 

292
00:14:05,200 --> 00:14:07,320
together. 
They don't want to just sell it 

293
00:14:07,320 --> 00:14:09,560
off for parts. 
A lot of it is kind of like 

294
00:14:09,560 --> 00:14:12,560
their pride and history of 
creating this company. 

295
00:14:12,840 --> 00:14:14,800
And if you have a family that 
you've created a company like 

296
00:14:14,800 --> 00:14:17,200
Paramount, you don't want to 
have it stripped down and sold 

297
00:14:17,200 --> 00:14:20,200
for parts to something like 
Apollo Global Management or Sony

298
00:14:20,200 --> 00:14:22,200
Pictures. 
You want to try to keep what 

299
00:14:22,200 --> 00:14:25,280
you've created together so that 
your legacy lives on. 

300
00:14:25,560 --> 00:14:28,680
But in many cases, that's not 
what's best for the shareholder.

301
00:14:29,040 --> 00:14:32,440
The shareholder may have done 
better by selling Paramount to 

302
00:14:32,440 --> 00:14:36,240
Sony Pictures or Apollo Global 
Management, but part of this 

303
00:14:36,240 --> 00:14:40,000
deal is motivated by the family 
wanting to keep what they've 

304
00:14:40,000 --> 00:14:42,720
created together. 
So that creates a little bit of 

305
00:14:42,720 --> 00:14:45,680
a a difference in interest. 
But we see the deal working out 

306
00:14:45,680 --> 00:14:47,920
with Skydance. 
They say that Skydance would buy

307
00:14:47,920 --> 00:14:52,320
out nearly 50% of the Class B 
Paramount shares at $15 a piece,

308
00:14:52,560 --> 00:14:56,560
or $4.5 billion, leaving the 
holders with equity in the new 

309
00:14:56,560 --> 00:14:59,120
company. 
Skydance and Redbird would also 

310
00:14:59,120 --> 00:15:02,560
contribute 1.5 billion in cash 
to Paramount's balance sheet to 

311
00:15:02,560 --> 00:15:04,680
help reduce debt. 
The deal is valued at $8 

312
00:15:04,680 --> 00:15:08,320
billion, an increase from the 5 
billion offer on the table 

313
00:15:08,320 --> 00:15:10,640
earlier. 
Under those earlier terms, the 

314
00:15:10,640 --> 00:15:13,800
Redstone family, which is the 
ones that own Viacom, they're 

315
00:15:13,800 --> 00:15:15,600
the ones that own the majority 
stake in this. 

316
00:15:15,600 --> 00:15:18,320
And again, they're wanting to 
like, keep things together. 

317
00:15:18,320 --> 00:15:21,120
They want to keep a legacy. 
They would have received less 

318
00:15:21,120 --> 00:15:24,640
than $2 billion for her stake in
the Class B shares would have 

319
00:15:24,640 --> 00:15:28,480
been bought out at nearly a 30% 
premium at $11.00 per share. 

320
00:15:28,520 --> 00:15:30,680
So they actually upped the bid 
on this transaction. 

321
00:15:30,680 --> 00:15:33,160
The family's making more money 
and they're keeping the company 

322
00:15:33,160 --> 00:15:34,800
together. 
I think they have to be happy 

323
00:15:34,800 --> 00:15:36,920
with this deal. 
I look at Paramount now and I 

324
00:15:36,920 --> 00:15:38,800
think it's going to be a great 
studio. 

325
00:15:39,080 --> 00:15:41,680
Paramount with Skydance, I think
is going to make some awesome 

326
00:15:41,680 --> 00:15:43,880
content. 
But they still have the trouble 

327
00:15:43,880 --> 00:15:47,840
of scale and lots of content 
still can't buy you scale. 

328
00:15:48,040 --> 00:15:50,440
That's something you have to 
earn over a long period of time.

329
00:15:50,760 --> 00:15:54,240
So I think Paramount Global and 
Skydance, after this merger, I 

330
00:15:54,240 --> 00:15:56,320
think they'll continue to be a 
bit of an arms dealer. 

331
00:15:56,560 --> 00:15:58,640
They'll make content, they'll 
produce really good stuff. 

332
00:15:58,640 --> 00:16:01,800
It'll go to the theaters and 
then it will end up on Netflix. 

333
00:16:02,000 --> 00:16:04,440
And I know I'm a shareholder of 
Netflix, so this is coming from 

334
00:16:04,440 --> 00:16:07,080
a buy standpoint, but if I had 
to choose at this point, I'd 

335
00:16:07,080 --> 00:16:09,680
still rather own Netflix. 
That's all for this time. 

336
00:16:09,680 --> 00:16:11,400
I hope you enjoyed. 
See you in the next one.