1 00:00:00,040 --> 00:00:01,920 Welcome back everyone. Today on the Joseph Carlson 2 00:00:01,920 --> 00:00:05,000 Show, investors just got to see some of the latest and greatest 3 00:00:05,000 --> 00:00:09,200 in technology with Nvidias new presentation at CES. 4 00:00:09,520 --> 00:00:12,560 CES is where they go to Vegas and they share what they've been 5 00:00:12,560 --> 00:00:14,800 working on and that's what Jensen Wong did. 6 00:00:15,200 --> 00:00:17,720 He revealed some incredible technology. 7 00:00:17,720 --> 00:00:20,920 The new GeForce GPU's are insane. 8 00:00:21,000 --> 00:00:24,520 The 5070 for example, one of their graphics cards, it's only 9 00:00:24,520 --> 00:00:29,160 $500 is more powerful than the 4090, which was $2000. 10 00:00:29,440 --> 00:00:32,880 The leap in technology is incredible and all of this is 11 00:00:32,880 --> 00:00:35,320 being driven by artificial intelligence. 12 00:00:35,640 --> 00:00:38,280 Jensen Wong mentioned some things that are very important 13 00:00:38,280 --> 00:00:41,320 in this presentation. He mentions how not only are the 14 00:00:41,320 --> 00:00:44,840 calculations faster, but also they're doing an entirely new 15 00:00:44,840 --> 00:00:46,880 way of doing graphics cards in general. 16 00:00:47,120 --> 00:00:49,640 Instead of just doing raw calculations, they're now doing 17 00:00:49,640 --> 00:00:53,120 predictive calculations, which are driven by artificial 18 00:00:53,120 --> 00:00:55,640 intelligence. What he showed off in this 19 00:00:55,640 --> 00:01:00,200 presentation was incredible. But regardless of that, the 20 00:01:00,200 --> 00:01:03,040 stock price is down. It's down big today, 5%. 21 00:01:03,040 --> 00:01:06,000 And Nvidia's not the only AI stock that's dropping today. 22 00:01:06,000 --> 00:01:09,960 We also have Palantir, the AI stock itself, down 6%. 23 00:01:10,040 --> 00:01:13,840 We also have Tesla in similar fashion, down 4% more than the 24 00:01:13,840 --> 00:01:15,720 rest of the market. So what is going on with these 25 00:01:15,800 --> 00:01:18,600 AI companies? Is the AI trade already over? 26 00:01:18,880 --> 00:01:20,800 The short answer, of course, is no, but we're going to be 27 00:01:20,800 --> 00:01:22,440 looking at it in more detail today. 28 00:01:22,480 --> 00:01:24,560 Now, we also have news that one of the companies I've been 29 00:01:24,560 --> 00:01:27,200 buying into this is in the passive income portfolio. 30 00:01:27,520 --> 00:01:30,240 It's one of the most significant trades I've made over the past 31 00:01:30,320 --> 00:01:34,920 three months and that is buying into ASMLASML is in the tech 32 00:01:34,920 --> 00:01:37,360 category. Here we go into this, we see it 33 00:01:37,360 --> 00:01:40,280 right there. It is now a $22,000 position. 34 00:01:40,280 --> 00:01:44,040 I bought another $11,000 of ASML on the 3rd. 35 00:01:44,520 --> 00:01:47,720 But what happened after those two buys and making a video 36 00:01:47,720 --> 00:01:50,800 presentation on this is this stock jumped. 37 00:01:50,840 --> 00:01:55,600 Yesterday, ASML stock was up 9%. On the year, it's up 8.72%. 38 00:01:55,600 --> 00:01:58,440 So why did ASML stock price jump right after I bought the 39 00:01:58,440 --> 00:02:00,040 company? Is it just because I'm really 40 00:02:00,040 --> 00:02:02,640 good at timing dips and I know right when to buy into the 41 00:02:02,640 --> 00:02:04,760 bottom? Is it because I made a video 42 00:02:04,760 --> 00:02:06,600 about it and that video got a lot of views? 43 00:02:06,600 --> 00:02:08,400 It convinced a bunch of people to buy the stock? 44 00:02:08,800 --> 00:02:11,480 Or is there an entirely unrelated reason to the stock 45 00:02:11,480 --> 00:02:13,200 going up? We're going to be looking at the 46 00:02:13,200 --> 00:02:16,160 specific instance of ASML and the real reason the stock went 47 00:02:16,160 --> 00:02:19,800 up, as well as the whole idea of timing the bottom and companies 48 00:02:20,240 --> 00:02:23,920 and what I truly use as a measurement of my success in the 49 00:02:23,920 --> 00:02:26,640 thesis of a stock. We'll be going over all of that 50 00:02:26,640 --> 00:02:28,240 in this episode. Now, of course, we have some 51 00:02:28,240 --> 00:02:31,600 other related news that Uber's teaming up with NVIDIA, Meta is 52 00:02:31,600 --> 00:02:34,240 joining the Trump train. We're seeing a lot of 53 00:02:34,240 --> 00:02:38,360 indications that Mark Zuckerberg is expertly pivoting his company 54 00:02:38,720 --> 00:02:41,520 to get on the new administration's good side, and 55 00:02:41,520 --> 00:02:44,880 we have Disney squeezing out yet another company. 56 00:02:45,120 --> 00:02:47,160 This time it's Fubo. We're going to, we'll be taking 57 00:02:47,160 --> 00:02:50,280 a look at the past, at how Disney made this acquisition of 58 00:02:50,280 --> 00:02:53,280 Fubo and what they did to twist the rest of this company. 59 00:02:53,360 --> 00:02:55,240 So obviously we have a lot to get doing this episode. 60 00:02:55,240 --> 00:02:57,560 Let's go ahead and jump into the main story here, which is 61 00:02:57,560 --> 00:03:01,560 Nvidia's new CES presentation where they unveiled all the 62 00:03:01,560 --> 00:03:03,960 things they've been working on, showing off the incredible 63 00:03:03,960 --> 00:03:06,880 progress Nvidia's made. Now of course, with this type of 64 00:03:06,880 --> 00:03:10,720 presentation with Jensen Wong leading it, it wouldn't be a a 65 00:03:10,720 --> 00:03:14,920 true tech presentation with Jensen without some type of kind 66 00:03:14,920 --> 00:03:19,960 of nerdy, awkward, funny bits to it. 67 00:03:20,720 --> 00:03:21,800 This is one of the things he did. 68 00:03:21,800 --> 00:03:23,240 Let's just go ahead and take a listen here. 69 00:03:34,200 --> 00:03:44,280 Wait for it, wait for it. I thought I was worthy. 70 00:03:49,360 --> 00:03:51,360 Apparently Yoner didn't think I was worthy. 71 00:03:53,080 --> 00:03:55,840 All right, there you go. That's the type of thing that 72 00:03:55,840 --> 00:03:57,960 you missed if you weren't at CES. 73 00:03:57,960 --> 00:04:01,720 Is Jensen Wong pretending like he was Captain America there? 74 00:04:01,720 --> 00:04:04,360 I think trying to to act like he's going to catch Thor's 75 00:04:04,360 --> 00:04:08,240 hammer, but really what he has there is the most advanced chips 76 00:04:08,240 --> 00:04:10,440 in the world. So you might make fun of him for 77 00:04:10,440 --> 00:04:12,680 being a bit of a nerd. That's OK because he's worth 78 00:04:12,680 --> 00:04:14,600 hundreds of billions of dollars and he's making the most 79 00:04:14,600 --> 00:04:15,920 advanced technology in the world. 80 00:04:15,920 --> 00:04:18,800 Nvidia's presentation overall was impressive. 81 00:04:18,800 --> 00:04:21,519 There's no other way to say it. They're creating stuff that no 82 00:04:21,519 --> 00:04:24,800 one else is right now. Their newest line of G Force 83 00:04:24,800 --> 00:04:27,920 GPU's, for example, they're commonly used in gaming setups 84 00:04:27,920 --> 00:04:30,400 and for Bitcoin mining, all different applications. 85 00:04:30,600 --> 00:04:32,680 They're also used heavily for artificial intelligence. 86 00:04:33,120 --> 00:04:36,640 But these new GPUs, the level of progress is incredible. 87 00:04:36,880 --> 00:04:40,840 For example, he now says that the 5070, which is the lower end 88 00:04:40,840 --> 00:04:45,040 of this new line, is performing better than the 4090, which is 89 00:04:45,040 --> 00:04:47,200 the very highest end of the previous line. 90 00:04:47,680 --> 00:04:51,360 So now the the low end of the new chips outperforms the very 91 00:04:51,360 --> 00:04:54,440 highest end of the old chips. And of course, the highest end 92 00:04:54,440 --> 00:04:57,760 of the new chips has double the performance of the highest end 93 00:04:57,760 --> 00:05:00,880 of the old chips. So the performance leaps are 94 00:05:00,880 --> 00:05:04,320 doubling and tripling and quadrupling in performance in 95 00:05:04,320 --> 00:05:07,000 just a two year period. It's really incredible to see. 96 00:05:07,080 --> 00:05:10,440 In the presentation, he also talked a lot about specific 97 00:05:10,440 --> 00:05:13,720 chips for different purposes. These purpose built chips are 98 00:05:13,720 --> 00:05:16,680 for all different industries that NVIDIA personally believes 99 00:05:17,200 --> 00:05:19,240 are going to grow substantially in the future. 100 00:05:19,560 --> 00:05:22,120 So they're basically picking out different industries and then 101 00:05:22,120 --> 00:05:24,760 creating chips specific to those industries that they believe 102 00:05:24,760 --> 00:05:28,080 will have rapid growth that's dependent on the chips they're 103 00:05:28,080 --> 00:05:30,600 building. For example, Nvidia's launching 104 00:05:30,600 --> 00:05:34,320 an update to its GeForce GPU's, short for Graphics Processing 105 00:05:34,320 --> 00:05:37,400 units, which were created with the same Blackwell design that 106 00:05:37,400 --> 00:05:39,440 the company uses for its AI accelerators. 107 00:05:39,440 --> 00:05:43,240 So now the AI accelerator GPU's are being used for gaming. 108 00:05:43,640 --> 00:05:45,720 This is a whole new way of doing gaming, and they explain it 109 00:05:45,720 --> 00:05:48,440 further here. New GE Force 50 series cards 110 00:05:48,440 --> 00:05:51,040 will take advantage of Blackwell's capabilities to 111 00:05:51,040 --> 00:05:54,320 create even more realistic experiences for computer gamers. 112 00:05:54,440 --> 00:05:57,400 While traditional graphics chips build an image by calculating 113 00:05:57,400 --> 00:06:00,360 the shade of each pixel in a picture, the new technology will 114 00:06:00,360 --> 00:06:03,640 learn more heavily on AI to anticipate what the next frame 115 00:06:03,640 --> 00:06:05,920 should look like. So what they're doing here in 116 00:06:05,920 --> 00:06:08,000 the way that they explain this is actually incredible. 117 00:06:08,400 --> 00:06:11,240 They're basically changing the entire way that GPUs work. 118 00:06:11,520 --> 00:06:15,120 The old GPUs, like the 4090 for example, just does raw 119 00:06:15,120 --> 00:06:18,600 calculations super fast. So it's doing a ton of math and 120 00:06:18,600 --> 00:06:20,520 it calculates everything frame by frame. 121 00:06:20,760 --> 00:06:23,520 So every pixel you see, all of that's calculated frame by 122 00:06:23,520 --> 00:06:25,800 frame. The new chips in this fifty line 123 00:06:26,120 --> 00:06:29,240 instead use artificial intelligence, the type of LLM 124 00:06:29,240 --> 00:06:32,280 way of doing things where it takes all this information and 125 00:06:32,280 --> 00:06:35,640 then it redicts what's going to happen next and only calculates 126 00:06:35,640 --> 00:06:38,800 that O it can kind of narrow the scoe of what it's working on 127 00:06:38,800 --> 00:06:42,080 because it's now predictive. That's an entirely new way of 128 00:06:42,080 --> 00:06:44,160 redesigning how these chips work. 129 00:06:44,520 --> 00:06:47,440 So they're not just making them faster, but they're also just 130 00:06:47,440 --> 00:06:49,440 changing the way they work all together. 131 00:06:49,520 --> 00:06:51,760 And that new way of doing things is a lot faster. 132 00:06:52,120 --> 00:06:54,200 G force allowed AI to reach the masses. 133 00:06:54,440 --> 00:06:57,120 Now AI is coming home to G force. 134 00:06:57,360 --> 00:07:00,320 So these are truly AI LED G force chips. 135 00:07:00,320 --> 00:07:02,400 Now you get into the numbers here and again they highlight 136 00:07:02,760 --> 00:07:06,000 that their flagship, the 5090 model is the highest end of 137 00:07:06,000 --> 00:07:08,960 their chip and that's going to be available for $2000, which is 138 00:07:08,960 --> 00:07:11,760 the price of the 4090 just like a year ago. 139 00:07:12,120 --> 00:07:15,960 So the price is not really going up for these, but the demand is 140 00:07:15,960 --> 00:07:18,320 is crazy because these are so much more powerful. 141 00:07:18,320 --> 00:07:23,160 The RTX 5070 is going to cost less than $600.00 and it's going 142 00:07:23,160 --> 00:07:26,400 to have better performance than the prior ranges top end model. 143 00:07:26,880 --> 00:07:31,120 So the RTX 5070 being faster than the 4090 is truly a feat 144 00:07:31,120 --> 00:07:33,480 that's astonishing. Now these GPUs of course, are 145 00:07:33,480 --> 00:07:36,440 focused primarily on gaming, which is becoming a smaller and 146 00:07:36,440 --> 00:07:38,320 smaller portion of Nvidia's business. 147 00:07:38,560 --> 00:07:41,080 For example, Bloomberg highlights that gaming now is 148 00:07:41,080 --> 00:07:44,240 only an $11 billion revenue portion of the company. 149 00:07:44,720 --> 00:07:47,800 The other parts, which are like cars and different things are 150 00:07:47,800 --> 00:07:53,280 3.8 billion, but the data centers are now $113 billion. 151 00:07:53,840 --> 00:07:58,160 So gaming is about 10%, maybe a little bit less than 10% of 152 00:07:58,160 --> 00:08:00,600 their total revenue. When we break this down, we can 153 00:08:00,600 --> 00:08:03,320 see it clear on Qualtrim. This just shows you the 154 00:08:03,520 --> 00:08:07,440 evolution of of NVIDIA overall. If we look at just the revenue, 155 00:08:07,800 --> 00:08:10,440 you can't really see it here. You just see everything growing 156 00:08:10,440 --> 00:08:12,560 all at once. We break it down by revenue 157 00:08:12,560 --> 00:08:14,360 lines. We see this more clearly when we 158 00:08:14,360 --> 00:08:17,520 cross out the very small segments like the professional 159 00:08:17,520 --> 00:08:20,920 visualization and automotive. We get to the two main ones, 160 00:08:21,040 --> 00:08:24,520 gaming and data centers. That's what forms NVIDIA now. 161 00:08:24,520 --> 00:08:28,360 Again, right now, gaming is a very small portion, around 10% 162 00:08:28,360 --> 00:08:32,559 of the total revenue. But if you go back to just 2022, 163 00:08:32,960 --> 00:08:38,760 so we're going back two years, 2 1/2 years IN2022Q1, gaming was 164 00:08:38,760 --> 00:08:43,159 bigger than data centers. So it was around 60% of revenue 165 00:08:43,159 --> 00:08:45,080 at the time. And that highlights the 166 00:08:45,080 --> 00:08:48,920 incredible growth of the data center business, going from $15 167 00:08:48,920 --> 00:08:51,600 billion in revenue up to $100 billion. 168 00:08:51,600 --> 00:08:54,720 The fact that NVIDIA went from having their gaming be 50% of 169 00:08:54,720 --> 00:08:58,280 their revenue to now 10% shows the incredible growth of their 170 00:08:58,280 --> 00:09:00,960 data center business. Bloomberg is correct in saying 171 00:09:00,960 --> 00:09:03,680 that Nvidia's data center business now dominates its 172 00:09:03,680 --> 00:09:06,520 overall business. It is basically the company at 173 00:09:06,520 --> 00:09:08,280 this point. And although that's a great 174 00:09:08,280 --> 00:09:11,800 thing, when you look at that, of course NVIDIA and everyone has 175 00:09:11,800 --> 00:09:14,520 to be thrilled that they've grown this data center business 176 00:09:14,520 --> 00:09:17,280 to exponential size in only a couple years. 177 00:09:17,680 --> 00:09:19,360 But it also kind of creates an issue. 178 00:09:19,720 --> 00:09:23,000 It's not good for a company to be heavily reliant on one niche 179 00:09:23,000 --> 00:09:25,600 revenue stream. That could change in the future, 180 00:09:26,000 --> 00:09:28,480 even though it doesn't look like it's changing anytime soon. 181 00:09:28,960 --> 00:09:32,360 Being so reliant on just data centers is probably something 182 00:09:32,360 --> 00:09:34,600 that NVIDIA wants to change, and it looks like they're starting 183 00:09:34,600 --> 00:09:37,120 to do that. They recognize that they have 184 00:09:37,120 --> 00:09:40,240 all of this revenue concentrated into one segment and they're 185 00:09:40,240 --> 00:09:43,160 trying to diversify out of it, and they outline different ways 186 00:09:43,160 --> 00:09:46,240 they're doing this, primarily through robotics and cars. 187 00:09:46,240 --> 00:09:49,120 Wang announced that Toyota, the world's biggest vehicle maker, 188 00:09:49,360 --> 00:09:52,240 is now a customer of Nvidia's autonomous driving AI products 189 00:09:52,480 --> 00:09:54,640 and will use it's drive chips for software. 190 00:09:54,760 --> 00:09:57,440 They said that extending AI into more of the physical world will 191 00:09:57,440 --> 00:10:00,080 transform the industry 50 trillion. 192 00:10:00,480 --> 00:10:02,400 But the move will also bring challenges. 193 00:10:02,600 --> 00:10:05,480 Robotics and cars will require software that can handle real 194 00:10:05,480 --> 00:10:09,000 life complexities in a Safeway. The company has created NVIDIA 195 00:10:09,000 --> 00:10:12,200 Cosmos to help make a robot smarter and produce fully 196 00:10:12,200 --> 00:10:14,960 autonomous vehicles. So now NVIDIA is trying to get 197 00:10:14,960 --> 00:10:17,240 into the software game. They don't just want to be a 198 00:10:17,240 --> 00:10:19,760 hardware seller and a hardware vendor. 199 00:10:19,960 --> 00:10:22,000 They want to create the accompanying software that's 200 00:10:22,000 --> 00:10:25,680 more similar to Apple. This is the best decision that 201 00:10:25,680 --> 00:10:29,920 NVIDIA can do is continually diversify away from their data 202 00:10:29,920 --> 00:10:33,080 center business by going into other territories and matching 203 00:10:33,080 --> 00:10:35,880 that with software. Cosmos technology is able to 204 00:10:35,880 --> 00:10:37,920 create video from input such as text. 205 00:10:38,240 --> 00:10:41,360 The video then becomes the basis for virtual training, helping 206 00:10:41,360 --> 00:10:44,840 reduce dependency on expensive and time consuming real life 207 00:10:44,840 --> 00:10:48,000 experimentation. For example, the generated video 208 00:10:48,000 --> 00:10:51,880 can be searched and honed so the important but infrequent events 209 00:10:51,880 --> 00:10:55,440 such as a cars encounter with an emergency vehicle can be tested 210 00:10:55,440 --> 00:10:57,880 repeatedly. So basically what they're doing 211 00:10:57,880 --> 00:11:02,400 is right now you have, Tesla is basically the only big full self 212 00:11:02,400 --> 00:11:05,720 driving company that sees millions and millions of these 213 00:11:05,720 --> 00:11:08,320 outlier events. Tesla has so many vehicles on 214 00:11:08,320 --> 00:11:11,560 the road that they have data for running into an emergency 215 00:11:11,560 --> 00:11:14,040 vehicle or different unique edge cases. 216 00:11:14,400 --> 00:11:18,320 But Nvidia's saying, hey, with our chip, you don't need to have 217 00:11:18,320 --> 00:11:20,160 the millions of vehicles on the road. 218 00:11:20,520 --> 00:11:24,720 We can virtually recreate these instances over and over again so 219 00:11:24,720 --> 00:11:27,160 that you can train your data just running into them a few 220 00:11:27,160 --> 00:11:29,680 times. So they're virtually creating 221 00:11:29,680 --> 00:11:32,360 these edge cases to train the AI faster. 222 00:11:32,560 --> 00:11:35,260 NVIDIA is now also partnering with Uber to develop self 223 00:11:35,260 --> 00:11:38,000 driving technology. We see that new story here. 224 00:11:38,200 --> 00:11:41,080 Uber has an entire press release going over this relationship. 225 00:11:41,080 --> 00:11:43,080 The Uber CEO is incredibly smart. 226 00:11:43,080 --> 00:11:45,120 He knows the challenges the company's facing. 227 00:11:45,320 --> 00:11:48,240 He knows that full self driving and robo taxi is going to be a 228 00:11:48,240 --> 00:11:52,040 real thing in the near future and by partnering with NVIDIA, 229 00:11:52,200 --> 00:11:54,760 he's making moves to pre empt this challenge. 230 00:11:54,920 --> 00:11:58,240 By working with NVIDIA, we are confident that we can help super 231 00:11:58,320 --> 00:12:01,640 charge the timeline for safe and scalable autonomous driving 232 00:12:01,640 --> 00:12:05,440 solutions for the industry. Now of course he's not saying 233 00:12:05,440 --> 00:12:09,240 this here, but implied in this is that Uber is going to have 234 00:12:09,240 --> 00:12:12,080 this technology integrated with their application. 235 00:12:12,200 --> 00:12:15,120 They want to have their app be the go to hybrid of both human 236 00:12:15,120 --> 00:12:18,480 drivers and robotaxis. By partnering with NVIDIA, 237 00:12:18,720 --> 00:12:21,440 making the technology more integrated with their company, 238 00:12:21,680 --> 00:12:23,560 they increase their chances of success. 239 00:12:23,640 --> 00:12:27,280 Jensen and NVIDIA have predictions on how this robotaxi 240 00:12:27,280 --> 00:12:29,680 system and selfdriving will roll out. 241 00:12:30,000 --> 00:12:32,880 They say that mass market car makers are going to shift 242 00:12:32,880 --> 00:12:36,320 towards using one computer, an operating system for their 243 00:12:36,320 --> 00:12:39,960 entire model lineup rather than segment systems by class of 244 00:12:39,960 --> 00:12:42,440 vehicle. So they are predicting that 245 00:12:42,440 --> 00:12:45,920 there's going to be a huge operating system for robo taxis 246 00:12:46,160 --> 00:12:47,760 that basically manages everything. 247 00:12:48,040 --> 00:12:50,920 That transition will set the table for a wider use of the 248 00:12:50,920 --> 00:12:52,800 chip designers comprehensive offerings. 249 00:12:52,920 --> 00:12:55,760 To speed that up, NVIDIA has had its products certified by the 250 00:12:55,760 --> 00:12:58,000 government Transportation Safety organizations. 251 00:12:58,400 --> 00:13:01,440 So Nvidia's on top of this, they're getting into these new 252 00:13:01,440 --> 00:13:05,320 evolving revenue streams, trying to diversify away from data 253 00:13:05,320 --> 00:13:07,240 center. Cars are the most specific thing 254 00:13:07,240 --> 00:13:09,520 on the road map right now. It's the thing they're actively 255 00:13:09,520 --> 00:13:12,000 developing. But they also have a longer road 256 00:13:12,000 --> 00:13:14,760 map where they believe after autonomous vehicles, there's 257 00:13:14,760 --> 00:13:18,040 going to be robotics with just humanoid robotics. 258 00:13:18,040 --> 00:13:20,760 And they had an entire line of a different humanoid robotics, 259 00:13:21,040 --> 00:13:23,560 which they believe again, that they can be the go to chip 260 00:13:23,560 --> 00:13:27,080 provider for and the operating system for running these robots. 261 00:13:27,080 --> 00:13:29,560 Now, after hearing all of those exciting plans, seeing that 262 00:13:29,560 --> 00:13:32,200 NVIDIA is making huge progress, they're coming out with real 263 00:13:32,200 --> 00:13:35,560 devices, real technology. They're positioned for all these 264 00:13:35,560 --> 00:13:38,520 secular trends. The stock is still down the day 265 00:13:38,520 --> 00:13:40,520 after this event. And that leaves a lot of 266 00:13:40,520 --> 00:13:43,160 investors confused of what to expect. 267 00:13:43,160 --> 00:13:46,240 Why is the company trading down? And I think a lot of this comes 268 00:13:46,240 --> 00:13:49,720 down to simply expectations. Everyone already knows that 269 00:13:49,720 --> 00:13:51,400 NVIDIA is an incredibly good company. 270 00:13:51,600 --> 00:13:53,600 Everyone is very excited about what they're doing. 271 00:13:53,960 --> 00:13:56,160 So the fact that they're creating incredible stuff is 272 00:13:56,160 --> 00:13:59,640 exciting, but it's a problem of what's already priced into the 273 00:13:59,640 --> 00:14:02,000 company. When I look at NVIDIA right now, 274 00:14:02,440 --> 00:14:06,160 or I look at Palantir, or I look at Tesla, the most exciting 275 00:14:06,160 --> 00:14:10,160 companies in the market today, all of them have a common theme. 276 00:14:10,440 --> 00:14:12,720 They trade at really high valuations. 277 00:14:13,000 --> 00:14:16,040 Tesla's at an almost 100 PE ratio. 278 00:14:16,480 --> 00:14:19,160 Now, of course, PE ratios are short term by nature. 279 00:14:19,400 --> 00:14:21,960 They're not the only way that I would do analysis on a company. 280 00:14:22,160 --> 00:14:25,240 It's not a true form of full valuation, but it does just 281 00:14:25,240 --> 00:14:28,680 signify what you're paying over at least the full 12 months 282 00:14:28,680 --> 00:14:31,720 future. And 93 Ford PE ratio is rather 283 00:14:31,720 --> 00:14:33,880 expensive. It's a very high multiple. 284 00:14:34,080 --> 00:14:36,040 The expectations for Tesla are huge. 285 00:14:36,520 --> 00:14:39,960 We have Palantir, a company trading out of 130 PE ratio. 286 00:14:40,240 --> 00:14:43,760 You can even look at the price to revenue, which is 61 times. 287 00:14:44,320 --> 00:14:47,440 I have a difficult time finding any company in the entire market 288 00:14:47,440 --> 00:14:50,040 that's at a more expensive multiple than Palantir. 289 00:14:50,080 --> 00:14:53,120 So NVIDIA shorthand valuations are not outrageous, but they are 290 00:14:53,120 --> 00:14:55,560 pricing in a very bright future for the company. 291 00:14:55,920 --> 00:14:59,400 And the big thing this company needs to do in order to justify 292 00:14:59,640 --> 00:15:04,040 its current valuation is exceed investors expectations by a wide 293 00:15:04,040 --> 00:15:05,760 margin. And there's some analysts that 294 00:15:05,760 --> 00:15:07,240 believe they can accomplish that. 295 00:15:07,480 --> 00:15:10,360 And Dan Ives is one of them. He believes that NVIDIA once 296 00:15:10,360 --> 00:15:12,560 again will exceed investors expectations. 297 00:15:12,640 --> 00:15:14,560 Yeah. I mean, look, to me, I think 298 00:15:14,560 --> 00:15:18,880 Jenton laid out the strategic vision for the coming years when 299 00:15:18,880 --> 00:15:22,600 we look at robotics, autonomous. I mean, I believe ultimately 300 00:15:22,600 --> 00:15:25,320 those are going to be some of the biggest use cases of AI. 301 00:15:25,320 --> 00:15:28,400 And I think what you saw from NVIDIA last night is they're 302 00:15:28,400 --> 00:15:30,960 they're not just sort of going to be a provider that they're 303 00:15:30,960 --> 00:15:32,600 going to. Play a huge role. 304 00:15:33,000 --> 00:15:35,480 In this sort of vision and obviously tests on the 305 00:15:35,480 --> 00:15:38,040 autonomous side continues to be front and center. 306 00:15:38,560 --> 00:15:41,960 I think this is the next step. I think this is a snapshot of 307 00:15:41,960 --> 00:15:45,520 the future and you you look at it incrementally, you go out in 308 00:15:45,520 --> 00:15:47,840 the next few years. I think St's underestimating 309 00:15:47,840 --> 00:15:52,960 growth by by 2530% which is why I think not just 4 trillion, you 310 00:15:52,960 --> 00:15:55,280 could be looking at 5 trillion mark cap under. 311 00:15:55,480 --> 00:15:58,840 He mentions that he believes the Street, the Wall Street analyst 312 00:15:58,840 --> 00:16:02,760 consensus is off by 20 or 30% over the next year. 313 00:16:02,760 --> 00:16:06,120 If that happened, his prediction is that NVIDIA will go from a $3 314 00:16:06,120 --> 00:16:08,840 trillion company. Now it's 3.47. 315 00:16:08,840 --> 00:16:11,480 So it's a massive company. I believe it's now officially 316 00:16:11,480 --> 00:16:13,800 bigger than Apple once again, or at least it's going back and 317 00:16:13,800 --> 00:16:15,960 forth with Apple. But he thinks it's going to go 318 00:16:15,960 --> 00:16:19,840 to 5 or $6 trillion O the company could essentially double 319 00:16:19,840 --> 00:16:21,640 again a market cap from this point. 320 00:16:21,680 --> 00:16:23,800 That's a very bullish stance on this company. 321 00:16:23,800 --> 00:16:25,840 And to come to these conclusions, you have to have 322 00:16:25,840 --> 00:16:28,880 the same type of stars align that caused NVIDIA to go U in 323 00:16:28,880 --> 00:16:31,200 the first place. So if you believe this company 324 00:16:31,200 --> 00:16:34,440 can continue with its trend of just dominating all the 325 00:16:34,440 --> 00:16:37,640 technology, all the processing, and have all these different 326 00:16:37,640 --> 00:16:40,880 things work together to boost NVIDIA stock, then this could 327 00:16:40,880 --> 00:16:42,800 work out for me. There's just a bit too much that 328 00:16:42,800 --> 00:16:44,800 has to work out to justify the valuation. 329 00:16:44,880 --> 00:16:47,040 Now moving on, we get to the news of ASML. 330 00:16:47,040 --> 00:16:49,320 This stock had a big day yesterday. 331 00:16:49,520 --> 00:16:53,320 The stock was up 9%. I posted about it on Twitter and 332 00:16:53,320 --> 00:16:55,480 this is also a company that I just recently bought into. 333 00:16:55,480 --> 00:16:59,200 About a week or so ago, I bought $10,000 of the stock. 334 00:16:59,200 --> 00:17:00,760 I announced it on my YouTube channel. 335 00:17:01,000 --> 00:17:03,880 In fact, I made a video going over ASML in my bowl case, 336 00:17:03,880 --> 00:17:06,599 Sonnet, observing what I think is going to happen and why I 337 00:17:06,599 --> 00:17:09,319 think it's a good buy. That video got a lot of views, 338 00:17:09,319 --> 00:17:12,839 around 200,000 views. So a lot of attention on that 339 00:17:12,839 --> 00:17:15,640 video on ASML, which I think is great because this is a, a great 340 00:17:15,640 --> 00:17:19,960 company, but I also bought more of the stock a few days later on 341 00:17:19,960 --> 00:17:23,440 the 3rd of this month, I also bought another $11,000 of it, 342 00:17:23,720 --> 00:17:26,960 bringing my total position size to $22,000. 343 00:17:27,280 --> 00:17:30,160 If I look at it now, I go into My Portfolio, we look at the 344 00:17:30,160 --> 00:17:34,640 tech category here. SML is right here, $22,000 and 345 00:17:34,640 --> 00:17:38,560 it's already up 9.3 percent, $1700 in the green. 346 00:17:39,000 --> 00:17:43,200 So after owning it for only a week, this company's up almost 347 00:17:43,200 --> 00:17:45,760 $1700. Now a lot of people commented 348 00:17:46,040 --> 00:17:48,840 that I timed the stock perfectly, that this was buying 349 00:17:48,840 --> 00:17:51,360 the dip at the perfect time. And I must know how to do that 350 00:17:51,360 --> 00:17:54,960 because I did this with ASML and I recently did it again with 351 00:17:54,960 --> 00:17:56,240 Google. That was another one that I 352 00:17:56,240 --> 00:17:58,280 bought and it rocketed up right after buying it. 353 00:17:58,600 --> 00:18:00,800 So people are saying, Joseph, you must know how to time the 354 00:18:00,800 --> 00:18:03,800 dip on these companies or, or you're, you're pumping these 355 00:18:03,800 --> 00:18:05,960 companies, right? I make the video and they do get 356 00:18:05,960 --> 00:18:08,920 a lot of views and that must cause the stock price to go up 357 00:18:08,920 --> 00:18:11,760 10%. But the truth is that neither of 358 00:18:11,760 --> 00:18:15,040 those are correct and I'm sorry to disappoint, but I just want 359 00:18:15,040 --> 00:18:18,720 to come clean here. I want to diffuse some rumors. 360 00:18:19,080 --> 00:18:23,680 I'm not an expert bottom dipping stock timer, and I don't make 361 00:18:23,920 --> 00:18:26,960 quite enough noise to make a company that said $300 billion 362 00:18:26,960 --> 00:18:31,000 market cap surge up 10%. Neither of those are really the 363 00:18:31,000 --> 00:18:34,320 case and I want to explain why. When you do good value 364 00:18:34,320 --> 00:18:37,720 investing, in many cases it looks and appears like you're an 365 00:18:37,720 --> 00:18:41,120 expert at buying the dip or timing a stock when really all 366 00:18:41,120 --> 00:18:44,360 it is is value investing. In the case of Google, this is 367 00:18:44,360 --> 00:18:48,920 one where it was similar to FML. I bought into the company and 368 00:18:48,920 --> 00:18:52,000 almost immediately afterwards, the stock just rocketed up. 369 00:18:52,560 --> 00:18:53,840 Let's take a look at when it was. 370 00:18:53,840 --> 00:18:56,680 So it's three months ago. I bought into it, I think right 371 00:18:56,680 --> 00:19:00,600 here at like 17177. It was right around here. 372 00:19:00,960 --> 00:19:03,800 And then I think it was the next day or a couple days later, I 373 00:19:03,800 --> 00:19:08,280 can't quite remember, the stock went up like 10%, went from 170 374 00:19:08,680 --> 00:19:11,960 up to 196. Lot of people saying that that 375 00:19:11,960 --> 00:19:14,760 was expert timing. Now, the reason why in this case 376 00:19:14,760 --> 00:19:18,160 was because Google had a spree of announcements, the first one 377 00:19:18,160 --> 00:19:20,960 being that they invented a supercomputer or they made a 378 00:19:20,960 --> 00:19:23,800 huge breakthrough with a supercomputer, got investors 379 00:19:23,800 --> 00:19:26,560 very excited. So the stock rocketed up right 380 00:19:26,560 --> 00:19:31,280 after my purchase with ASML. Very similar type of event 381 00:19:31,280 --> 00:19:33,560 occurred. I bought into the company just a 382 00:19:33,560 --> 00:19:35,200 week ago. I made a big video on it. 383 00:19:35,200 --> 00:19:38,240 I bought more of it and then just a bit after. 384 00:19:38,240 --> 00:19:42,440 If we look at it over the past week, it went from $714.00 up to 385 00:19:42,440 --> 00:19:44,960 768. So went up 9%. 386 00:19:45,080 --> 00:19:47,720 Now, the reason the smell jumped was because of a combination of 387 00:19:47,720 --> 00:19:50,040 news. There was a report that Foxconn, 388 00:19:50,040 --> 00:19:52,880 the chip maker, was doing much better than expected. 389 00:19:52,880 --> 00:19:56,200 They have much more demand than expected since ASML works with 390 00:19:56,240 --> 00:19:59,200 the lithography chip making that caused the stock to surge 391 00:19:59,200 --> 00:20:01,160 upwards. And there's the news that 392 00:20:01,480 --> 00:20:04,880 Microsoft announced that they were going to spend $80 billion 393 00:20:04,880 --> 00:20:08,320 on AI data centers next year, or rather, in 2025. 394 00:20:08,840 --> 00:20:11,080 So the combination of this really bullish news on chip 395 00:20:11,080 --> 00:20:13,400 making caused ASML stock to jump. 396 00:20:13,440 --> 00:20:15,760 So in both cases, it appears as though I timed the stock 397 00:20:15,760 --> 00:20:17,480 perfectly with each of these buys. 398 00:20:17,720 --> 00:20:19,360 But that's really not the case at all. 399 00:20:19,640 --> 00:20:22,040 I didn't know when I bought Google that they were going to 400 00:20:22,040 --> 00:20:24,120 announce they had a supercomputer breakthrough. 401 00:20:24,520 --> 00:20:25,800 That wasn't knowledge that I had. 402 00:20:26,080 --> 00:20:29,880 The reason that I bought Google on that dip was because Google 403 00:20:29,880 --> 00:20:33,600 is a great company trading at a low valuation with a very bright 404 00:20:33,600 --> 00:20:35,640 future, and it had negative sentiment. 405 00:20:36,120 --> 00:20:38,440 The fact that there was some good news afterwards that caused 406 00:20:38,440 --> 00:20:41,560 the stock to jump up, although was fortunate timing. 407 00:20:41,600 --> 00:20:43,480 It shouldn't have been unexpected. 408 00:20:43,760 --> 00:20:46,600 And this is the case in point that I want to make with buying 409 00:20:46,600 --> 00:20:48,720 the dips and timing the bottom of stocks. 410 00:20:49,040 --> 00:20:51,880 The way that I look at it is it's not so much timing the 411 00:20:51,880 --> 00:20:55,200 bottom or trying to time exactly when the stock is going to jump 412 00:20:55,200 --> 00:20:58,480 up in the future. It's more so identifying high 413 00:20:58,480 --> 00:21:01,240 quality companies and buying them when there's negative 414 00:21:01,240 --> 00:21:03,920 sentiment, when there's temporary issues. 415 00:21:04,200 --> 00:21:07,200 When you buy companies that are incredibly high quality, that 416 00:21:07,200 --> 00:21:09,960 generate immense amount of cash flows, that have very bright 417 00:21:09,960 --> 00:21:13,200 futures with secular positive trends and they're trading with 418 00:21:13,200 --> 00:21:16,520 a lot of negative sentiment, it's only a matter of time until 419 00:21:16,520 --> 00:21:19,120 some news comes along and bumps up the stock price. 420 00:21:19,560 --> 00:21:22,520 That news coming along and bumping up the stock price is 421 00:21:22,520 --> 00:21:25,720 eventually what makes it look like you time the dip when in 422 00:21:25,720 --> 00:21:29,080 reality you just bought good companies on a dip and waited. 423 00:21:29,360 --> 00:21:31,240 That's all I'm doing in these situations. 424 00:21:31,240 --> 00:21:35,640 So whether I'm buying Salesforce or Booking or FML or Google, I'm 425 00:21:35,640 --> 00:21:38,040 buying these companies specifically when they have 426 00:21:38,040 --> 00:21:40,800 negative sentiment, when investors aren't focused on 427 00:21:40,800 --> 00:21:43,000 them, when they believe that these companies for one reason 428 00:21:43,000 --> 00:21:45,080 or another are not the buy today. 429 00:21:45,440 --> 00:21:46,920 That's when you buy into these companies. 430 00:21:46,920 --> 00:21:50,200 When the valuation is low, the sentiment is negative, but the 431 00:21:50,200 --> 00:21:52,680 true fundamentals of the company are very strong. 432 00:21:53,280 --> 00:21:56,360 I load up on a position during those time periods and then I 433 00:21:56,360 --> 00:21:58,800 just wait. In some cases, the stock will go 434 00:21:58,800 --> 00:22:02,360 down a little bit further and that's fine, but eventually if 435 00:22:02,360 --> 00:22:06,080 you buy a high quality company at a depressed price point, it's 436 00:22:06,080 --> 00:22:08,520 only a matter of time until there's some catalyst that comes 437 00:22:08,520 --> 00:22:11,000 along. The combination of low valuation 438 00:22:11,000 --> 00:22:14,120 and high quality creates an environment where any positive 439 00:22:14,120 --> 00:22:17,560 news whatsoever will result in a big stock price jump. 440 00:22:17,880 --> 00:22:20,600 And that's the case with Google depressed stock price. 441 00:22:20,720 --> 00:22:22,760 So any positive news caused the lift. 442 00:22:23,040 --> 00:22:26,720 That's the case with FML. It was at a depressed stock 443 00:22:26,720 --> 00:22:28,080 price. It's been trending down for the 444 00:22:28,080 --> 00:22:30,440 past six months. Any positive news is going to 445 00:22:30,440 --> 00:22:32,920 cause a big boost. So these are instances with 446 00:22:32,920 --> 00:22:36,160 these companies where what appears like market timing or 447 00:22:36,160 --> 00:22:39,400 timing the dip in these companies is really just value 448 00:22:39,400 --> 00:22:42,760 investing, buying the highest quality assets when opportunity 449 00:22:42,760 --> 00:22:45,360 presents, and then waiting patiently for different 450 00:22:45,360 --> 00:22:48,800 catalysts to breathe new light and new sentiment into the 451 00:22:48,800 --> 00:22:51,120 stock. If you do this with any company 452 00:22:51,320 --> 00:22:53,960 and you can literally name off any high quality company, if you 453 00:22:53,960 --> 00:22:55,600 did it with Meta, you made huge gains. 454 00:22:55,600 --> 00:22:57,320 If you did it with Netflix, you made huge gains. 455 00:22:57,320 --> 00:22:59,600 If you did it with Amazon, you made huge gains. 456 00:22:59,680 --> 00:23:02,560 Buying the best companies during negative sentiment is a winning 457 00:23:02,560 --> 00:23:04,600 strategy. So I'm sorry to those that think 458 00:23:04,600 --> 00:23:07,920 that I can perfectly time the dip and I can time the bottom of 459 00:23:07,920 --> 00:23:09,120 stocks. I can't. 460 00:23:09,400 --> 00:23:12,200 And I'm also sorry to those that think that I can move the market 461 00:23:12,200 --> 00:23:16,720 cap of a $300 billion company. That's very difficult to do. 462 00:23:16,720 --> 00:23:19,200 I don't think that my videos are really moving the market cap of 463 00:23:19,200 --> 00:23:21,360 these companies in any meaningful way. 464 00:23:21,840 --> 00:23:25,280 And in fact, even with stocks going up soon after buying, I 465 00:23:25,280 --> 00:23:27,560 don't consider that investment success. 466 00:23:28,000 --> 00:23:31,320 If a company just goes up because of positive news, that's 467 00:23:31,320 --> 00:23:33,160 fun and it's exciting to celebrate. 468 00:23:33,600 --> 00:23:36,520 But ultimately the way that I determine success of any of my 469 00:23:36,520 --> 00:23:39,360 investments is the free cash flow per share growth. 470 00:23:39,760 --> 00:23:42,360 I want to buy companies that can meaningfully grow their free 471 00:23:42,360 --> 00:23:45,840 cash flow per share over long periods of time, that can grow 472 00:23:45,840 --> 00:23:48,160 their earnings per share over long periods of time. 473 00:23:48,600 --> 00:23:51,840 For example, if I look at Texas Roadhouse, if this stock just 474 00:23:51,840 --> 00:23:55,320 went up because investors bought it and the multiples expanded, I 475 00:23:55,320 --> 00:23:57,920 would not consider that a successful investment even 476 00:23:57,920 --> 00:24:00,440 though I've made gains. The reason that I consider Texas 477 00:24:00,440 --> 00:24:03,360 Roadhouse a successful investment is because I bought a 478 00:24:03,360 --> 00:24:06,960 company that grew its earnings per share dramatically, creating 479 00:24:06,960 --> 00:24:09,200 real value fundamentally for investors. 480 00:24:09,560 --> 00:24:11,960 I bought it here and it's doubled in its earnings per 481 00:24:11,960 --> 00:24:14,080 share. That is investing success. 482 00:24:14,120 --> 00:24:17,640 So with ASML, I'm not going to be looking for quick stock price 483 00:24:17,640 --> 00:24:19,560 jumps as a measurement of my success. 484 00:24:20,040 --> 00:24:22,400 I'll be looking at the free cash flow per share of this company 485 00:24:22,640 --> 00:24:25,240 over the next three years and seeing how much it grows. 486 00:24:25,600 --> 00:24:28,160 If it stays flat or if it goes down, that's going to be a 487 00:24:28,160 --> 00:24:30,360 failed investment. But if the free cash flow per 488 00:24:30,360 --> 00:24:34,280 share grows dramatically above 20% per year, I'll consider this 489 00:24:34,280 --> 00:24:37,080 a successful investment regardless of the stock price. 490 00:24:37,240 --> 00:24:39,680 Now moving on, we get to some breaking news that Mark 491 00:24:39,680 --> 00:24:43,920 Zuckerberg and Meta seem to be fully joining the Trump train. 492 00:24:44,480 --> 00:24:47,400 They're now realigning their business to be more in line with 493 00:24:47,400 --> 00:24:49,800 the new administration. This headline from the Wall 494 00:24:49,800 --> 00:24:52,000 Street Journal highlights just a part of it. 495 00:24:52,320 --> 00:24:55,440 Meta is ending their fact checking on Facebook, Instagram, 496 00:24:55,720 --> 00:24:59,320 in a free speech pitch. So they're no longer going to be 497 00:24:59,320 --> 00:25:02,920 the arbiters of truth where Meta designated this group of people 498 00:25:02,920 --> 00:25:06,320 that can determine what stays on the platform and what doesn't. 499 00:25:06,880 --> 00:25:10,200 Now, this was a point of criticism for the past couple of 500 00:25:10,200 --> 00:25:12,120 years. In fact, Donald Trump said that 501 00:25:12,120 --> 00:25:15,120 it was election interference because it was under the guise 502 00:25:15,120 --> 00:25:17,840 of fact checking. But in many cases, it seemed as 503 00:25:17,840 --> 00:25:20,440 though they were just censoring different pieces of information. 504 00:25:20,760 --> 00:25:24,040 For example, criticisms towards the medical field during COVID 505 00:25:24,040 --> 00:25:26,840 in 2020 or different political discussions that had right 506 00:25:26,840 --> 00:25:29,000 leanings. In fact, the most critical part 507 00:25:29,000 --> 00:25:31,400 of the criticism was the acknowledgement from Mark 508 00:25:31,400 --> 00:25:34,440 Zuckerberg a year ago that they were pressured from the Biden 509 00:25:34,440 --> 00:25:36,920 administration to delete specific posts. 510 00:25:37,360 --> 00:25:39,800 So they're doing the bidding of the central government. 511 00:25:40,240 --> 00:25:42,040 Now we're seeing a transition here. 512 00:25:42,040 --> 00:25:45,160 We're seeing Meta realign themselves, and Mark Zuckerberg 513 00:25:45,160 --> 00:25:46,920 himself explains the change here. 514 00:25:47,520 --> 00:25:50,520 Hey everyone, I want to talk about something important today 515 00:25:50,720 --> 00:25:53,040 because it's time to get back to our roots around free 516 00:25:53,040 --> 00:25:56,000 expression. On Facebook and Instagram, I 517 00:25:56,000 --> 00:25:58,560 started building social media to give people a voice. 518 00:25:58,960 --> 00:26:01,520 I gave a speech at Georgetown five years ago about the 519 00:26:01,520 --> 00:26:04,440 importance of protecting free expression, and I still believe 520 00:26:04,440 --> 00:26:06,920 this today. But a lot has happened over the 521 00:26:06,920 --> 00:26:09,760 last several years. There's been widespread debate 522 00:26:09,760 --> 00:26:12,080 about potential harms from online content. 523 00:26:12,560 --> 00:26:15,680 Governments and legacy media have pushed to censor more and 524 00:26:15,680 --> 00:26:17,720 more. A lot of this is clearly 525 00:26:17,720 --> 00:26:20,800 political, but there's also a lot of legitimately bad stuff 526 00:26:20,800 --> 00:26:23,240 out there. Drugs, terrorism, Child 527 00:26:23,240 --> 00:26:25,280 Exploitation. These are things that we take 528 00:26:25,280 --> 00:26:27,680 very seriously, and I want to make sure that we handle 529 00:26:27,680 --> 00:26:30,280 responsibly. So we built a lot of complex 530 00:26:30,280 --> 00:26:33,720 systems to moderate content. But the problem with complex 531 00:26:33,720 --> 00:26:37,440 systems is they make mistakes. Even if they accidentally censor 532 00:26:37,440 --> 00:26:41,600 just 1% of posts, that's millions of people, and we've 533 00:26:41,600 --> 00:26:44,560 reached a point where it's just too many mistakes and too much 534 00:26:44,560 --> 00:26:47,760 censorship. The recent elections also feel 535 00:26:47,760 --> 00:26:50,640 like a cultural tipping point towards once again prioritizing 536 00:26:50,640 --> 00:26:52,600 speech. So we're going to get back to 537 00:26:52,600 --> 00:26:56,240 our roots and focus on reducing mistakes, simplifying our 538 00:26:56,240 --> 00:26:59,840 policies, and restoring free expression on our platforms. 539 00:27:00,480 --> 00:27:03,200 You'll notice that he references the elections in A Tipping point 540 00:27:03,200 --> 00:27:05,280 on free speech, and I'll have more to say on that in just a 541 00:27:05,280 --> 00:27:07,920 minute. More specifically, here's what 542 00:27:07,920 --> 00:27:10,640 we're going to do. First, we're going to get rid of 543 00:27:10,640 --> 00:27:14,120 fact checkers and replace them with community notes similar to 544 00:27:14,120 --> 00:27:18,480 X, starting in the US. After Trump first got elected in 545 00:27:18,480 --> 00:27:22,160 2016, the legacy media wrote non-stop about how 546 00:27:22,160 --> 00:27:24,320 misinformation was a threat to democracy. 547 00:27:24,920 --> 00:27:27,640 We tried in good faith to address those concerns without 548 00:27:27,640 --> 00:27:31,360 becoming the arbiters of truth, but the fact checkers have just 549 00:27:31,360 --> 00:27:34,760 been too politically biased and have destroyed more trust than 550 00:27:34,760 --> 00:27:36,480 they've created, especially in the US. 551 00:27:37,120 --> 00:27:39,880 So over the next couple of months, we're going to phase in 552 00:27:39,880 --> 00:27:42,200 a more comprehensive community notes system. 553 00:27:42,640 --> 00:27:45,000 Now Zuck continues on explaining all the different ways they're 554 00:27:45,000 --> 00:27:48,040 improving the content moderation in favor of free speech, 555 00:27:48,240 --> 00:27:51,160 modeling it after Elon Musk's Twitter or X. 556 00:27:51,320 --> 00:27:53,280 But what is Mark Zuckerberg really doing here? 557 00:27:53,280 --> 00:27:55,120 What changes is he really making? 558 00:27:55,680 --> 00:27:59,040 What he's doing is he's turning a powerful enemy into a friend, 559 00:27:59,360 --> 00:28:01,760 a powerful adversary into an advocate. 560 00:28:02,200 --> 00:28:06,400 Donald Trump so far has been incredibly critical of Meta, 561 00:28:06,760 --> 00:28:08,840 even saying that some of the things that they've done and 562 00:28:08,840 --> 00:28:11,720 some of the things that Mark Zuckerberg has done should lead 563 00:28:11,720 --> 00:28:14,600 him in jail if he does again, because he calls it election 564 00:28:14,600 --> 00:28:16,800 interference. But now Trump is becoming more 565 00:28:16,800 --> 00:28:19,280 complimentary of Meta and the changes that they've made. 566 00:28:19,360 --> 00:28:21,600 And Mark Zuckerberg has successfully made this pivot 567 00:28:21,600 --> 00:28:24,200 from getting his company out of criticism from the central 568 00:28:24,200 --> 00:28:26,040 government. And one of the most impressive 569 00:28:26,040 --> 00:28:28,360 ways that I've seen, another thing that he's done to make 570 00:28:28,360 --> 00:28:31,320 friends with Donald Trump and the new administration to get 571 00:28:31,320 --> 00:28:34,280 his companies out of the crosshairs is to bring Dana 572 00:28:34,280 --> 00:28:38,040 White from the UFC onto the board of directors from Meta. 573 00:28:38,360 --> 00:28:41,320 So now Dana White from the Ultimate Fighting Championship 574 00:28:41,680 --> 00:28:44,560 joins Meta's board. This is such a smart move. 575 00:28:44,560 --> 00:28:47,280 He's befriended Dana White to the point where now he's willing 576 00:28:47,280 --> 00:28:49,080 to accept this executive board seat. 577 00:28:49,240 --> 00:28:52,080 Dana White is one of Donald Trump's biggest supporters. 578 00:28:52,080 --> 00:28:53,880 He spoke at his convention rally. 579 00:28:53,960 --> 00:28:56,280 And Dana White is also a uniquely great pick for the 580 00:28:56,280 --> 00:28:59,360 board seat because unlike many people in these positions that 581 00:28:59,360 --> 00:29:01,960 are influenced by money, Dana White is not. 582 00:29:02,160 --> 00:29:04,240 He's at a point where he cannot be bought. 583 00:29:04,240 --> 00:29:06,760 I truly believe that he's not someone that's going to be 584 00:29:06,760 --> 00:29:08,880 influenced by money to compromise his principles. 585 00:29:09,120 --> 00:29:13,640 He will tell anyone and he sponsor anything in very harsh 586 00:29:13,640 --> 00:29:16,520 terms to go away before he's influenced by them. 587 00:29:16,520 --> 00:29:18,800 So he's someone that sticks firmly to his principles. 588 00:29:19,000 --> 00:29:21,800 Now, he's a key figure in being on the board of Meta and being a 589 00:29:21,800 --> 00:29:24,240 close ally with Trump. So Meta investors should be very 590 00:29:24,240 --> 00:29:27,480 happy with how Mark Zuckerberg was able to expertly pull off 591 00:29:27,480 --> 00:29:29,600 this political pivot. Now, next we get to news that 592 00:29:29,600 --> 00:29:33,640 Disney has bought yet another TV media asset and this time it's a 593 00:29:33,640 --> 00:29:37,360 beaten down company called Fubo. Fubo is an Internet TV provider 594 00:29:37,360 --> 00:29:39,600 that focuses on sports. They have a lot of sports 595 00:29:39,600 --> 00:29:41,400 statistics as you're watching the games. 596 00:29:41,840 --> 00:29:43,160 And it's been a struggling company. 597 00:29:43,160 --> 00:29:46,200 In fact, the stock is down like 90% from its highs. 598 00:29:46,480 --> 00:29:49,160 It's really gone through a lot. And part of the reason it's down 599 00:29:49,160 --> 00:29:51,560 so much is Disney. But now Disney will become the 600 00:29:51,560 --> 00:29:54,840 majority owner of Fubo with a 70% ownership stake. 601 00:29:54,960 --> 00:29:57,760 Fubo shareholders will own the remaining 30% of the company. 602 00:29:57,960 --> 00:30:00,840 The deal is expected to close in the next 12 to 18 months. 603 00:30:00,920 --> 00:30:03,280 Now, big companies buying smaller struggling companies is 604 00:30:03,280 --> 00:30:05,560 nothing new. But how did Disney get into this 605 00:30:05,560 --> 00:30:07,440 position? How are they able to pick up 606 00:30:07,440 --> 00:30:11,040 Fubo for a really cheap price? 10 months ago, the Fubo CEO went 607 00:30:11,040 --> 00:30:13,800 on to CNBC to explain what Disney was doing to their 608 00:30:13,800 --> 00:30:14,720 company. You know it's. 609 00:30:14,880 --> 00:30:19,640 It's pretty simple. 10 years ago, or roughly 10 years ago, we 610 00:30:19,640 --> 00:30:25,960 set off on a path to create an affordable alternative to cable, 611 00:30:26,480 --> 00:30:30,760 a skinny bundle around sports. And for the last nine years, 612 00:30:30,960 --> 00:30:33,640 we've been blocked from doing so. 613 00:30:35,200 --> 00:30:38,680 This sports cartel has used different tactics. 614 00:30:38,680 --> 00:30:42,680 They use their marketing power, market power to impose bundling 615 00:30:43,640 --> 00:30:47,560 of channels that obviously don't fit, you know, the bundle that 616 00:30:47,560 --> 00:30:50,560 we were looking to build. And that has led to, you know, 617 00:30:50,560 --> 00:30:55,240 hundreds of millions of dollars of, of costs related to that, 618 00:30:56,120 --> 00:31:00,000 which has been become a tax, a heavy tax and burden on 619 00:31:00,000 --> 00:31:02,560 customers. They have forced us to pay 620 00:31:02,840 --> 00:31:07,960 egregious licensing fees in the order of 30 to 50% plus above 621 00:31:07,960 --> 00:31:11,640 market. They force us to include all 622 00:31:11,640 --> 00:31:15,200 channels in our basic bundle. We call that penetration rates 623 00:31:15,200 --> 00:31:18,640 and our penetration rate is around 100% for most of the 624 00:31:18,640 --> 00:31:21,080 content and then they also have. You know what I would. 625 00:31:21,080 --> 00:31:25,920 Describe as tyrannical contractual terms that really 626 00:31:25,920 --> 00:31:31,240 limit our ability to create, you know, different packages and 627 00:31:31,240 --> 00:31:33,920 product features that are in line with, you know, some of 628 00:31:33,920 --> 00:31:38,640 their offerings such as Hulu. So all in this has really 629 00:31:38,640 --> 00:31:41,400 created a difficult situation not only for us but for 630 00:31:41,400 --> 00:31:44,200 customers at large. I mean, this makes you know, 631 00:31:44,200 --> 00:31:46,640 junk fees look like a walk in the park, so. 632 00:31:46,640 --> 00:31:49,800 Ten months ago, the Fubo CEO referred to Disney and other 633 00:31:49,800 --> 00:31:54,560 cable TV companies as the cartel that imposed tyrannical 634 00:31:54,560 --> 00:31:58,520 contracts on them, forcing them to bundle a huge tax on their 635 00:31:58,520 --> 00:32:00,240 customers. That's the way that they were 636 00:32:00,240 --> 00:32:03,160 describing the company. But Disney continued to beat 637 00:32:03,160 --> 00:32:07,000 down Fubo, causing the stock price to decline and decline by 638 00:32:07,000 --> 00:32:10,080 forcing them with these huge bundles until Disney could 639 00:32:10,080 --> 00:32:11,640 consume them. And that's what you're seeing 640 00:32:11,640 --> 00:32:14,320 happen here. Now, Disney owns 70% of the 641 00:32:14,320 --> 00:32:15,880 company. After this latest agreement, 642 00:32:16,200 --> 00:32:19,680 Fubo's getting a little stock surge up to around $5 per share. 643 00:32:20,160 --> 00:32:22,920 But ultimately, this is going to be Disney taking over one of 644 00:32:22,920 --> 00:32:25,320 their competitors through the ways that they know how. 645 00:32:25,480 --> 00:32:27,640 But ultimately, I don't believe this is going to have much of an 646 00:32:27,640 --> 00:32:30,000 impact on Disney or the media landscape. 647 00:32:30,480 --> 00:32:33,560 These bundles and acquisitions and consolidation have been 648 00:32:33,560 --> 00:32:35,800 happening for years, and this one likely doesn't move the 649 00:32:35,800 --> 00:32:37,280 needle. That's going to be it for this 650 00:32:37,280 --> 00:32:38,480 episode. Hope you enjoyed. 651 00:32:38,560 --> 00:32:39,400 See you in the next one.