Ladies and gentlemen, welcome to the Business Brew.
I am your host, Bill Brewster. As always, thank you for your
time and attention. Much appreciated.
Much love to all y'all. This episode features Jason and
Jeff of the Investing Unscripted podcast.
You are about to listen to three people that were completely
unscripted. Just hop on a mic and have a
conversation. So do remember, everything is
for entertainment purposes only. Nothing is to be taken
seriously. If we say anything that you find
interesting, you should go to the source.
Do your own work, do your own due diligence, consult your
financial advisors before making investment decisions.
And you know this isn't investment advice.
Half of what we say we might change our mind on.
You should know the drill. Either way, I hope it's worth
your time. A number of laughs in this one,
so I think it will be worth your time.
All right, enjoy the show after the sponsor read.
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That was a good episode. Yep, yeah, it was.
We had started doing the same stuff, a lot of the same stuff
on our own, and we knew he was into it.
Plus he's so fucking thirsty. Hopes that I say that out loud.
He's very good at the the attention capture game in a
positive way. I'm not saying that in a
negative light. I think he his his message is
one that's worthy of promotion, but he's quite good at it.
I agree with that. Yeah, no, I've known.
I've known Brian for like 11-12 years.
His heart is in the right place. It is.
That's. Right.
He's got that, that like play the algorithm, do the thing, but
I just can't bring it out of myself.
So yeah, it's. OK, that you you are jealous.
A little jealous. Yeah, I get it.
Yeah, it happens, man. Jealousy is tough, you know, But
it does run a lot of the world, so.
Fairpoint. Fairpoint yeah.
So, So what I mean, what's you want to tell people a little bit
about your podcast to start and then and then we'll get into
whatever discussion. This is a bit of investing
unscripted. So we'll see how it goes.
We've already had Jason's already left.
So that's how good this episode's going to be.
Well, honestly, that's an upgrade.
I'm. Done.
Yeah. You think?
Yeah, absolutely. There's a lot of banter between
the two of you, huh? Well, so all right, here's
here's the that's a perfect segue into talking about what we
try to accomplish. So the reason we started the
podcast is we were constantly texting each other about stock
stuff and investing things. And I reached out to Jason.
I was like, let's start a podcast because we both have a
lot to say and I think it'd be a good conversation.
We have a good rapport, we have a good vibe, and we wanted the
show to sound like exactly what we're doing now.
Right here's three guys speaking into microphones in front of the
screen. But about stuff we're interested
in, it's not really. Familiar with this format.
Yeah, it's not superscripted. Like maybe there's an outline
we're going to talk about, but there's no preconceived thing
we're bringing to the table. It it should sound like we all
met up at a bar and just started talking about a thing we're
interested in, which is investing.
And we don't want to be gurus. We're not trying to have the
answers. We're not trying to tell you buy
this stock, sell that stock. We're not trying to say we have
this the correct 5 point way to invest in the market.
We're not trying to sell a book. It really is just we're nerd to
like this. Want to talk about it and be
honest about what's hard about it, what we struggle with, the,
the way we've evolved as investors, all that kind of
stuff and. Also.
To the degree that it has resonated, I think that's why.
Jason, let Jeff talk. Yeah, also.
I have the perfect answers. OK.
All right. There you go, Jeff.
Shut up. Thank you.
Did you just interrupt me for the hell of a Jason?
Yeah, that's right. I'm like hanging.
It's a cliffhanger for the perfect answers and then he's
just waiting for dramatic effect.
Oh yeah, yeah, I know, I know. Oh, that's why you're on the
show, because you have the perfect answers.
Right. Interesting, I've never had that
problem. I mean, it's a heavyweight to
bear, but you know. Yeah, it's nice.
So do you like when you read something on Gemini, do you
correct it and say you're hallucinating?
Because I'm omniscient, I know this.
I'm the worst about that, Yeah, I'm the absolute worst.
I we've got a house full of Alexa, the Amazon echoes and we
switched because they they started actually feeding it with
an LLM couple of months ago and it switched over to we switched
over to that. It's part of like the there is a
beta test. It's pretty close to consumer
Eddie when we switched over, but like it'll just randomly change
stuff like WGBH is the local PBS station up here, radio station.
And in the morning part of my routines, I go in the kitchen,
I'm making my son's breakfast and kind of getting snacks and
stuff together for the day and I walk in and I say Alexa, play
WGBH. It works fine.
It actually works better than it used to until like 3 days ago.
It thinks I'm telling it to turn on GBH, which is the PBSTV
station. Like something randomly changed
somewhere. It's.
Probably your stupid accent. So stop it.
Well, it understood the stupid accent earlier, so I don't know
it. It did GBH play GBH.
Yeah, there you go. You got to say it like that.
But I told it, I said I'm not telling you to play the TV
station, It's WGBH, the radio station.
And it says, oh, I got my wires crossed, I'll remember that.
But of course it forget the next day.
You almost need to sign into the Alexa, like whatever the home
screen is and just type it in. I don't even know if that
exists, but that's with Gemini. You know you can like create
rules. Yeah, yeah, no, it's it's
supposed to. Amazon says it's supposed to
learn. We'll, we'll see.
I'm going to give it some time. There are other things it does
that are a lot better, but yeah, I'm the absolute worst.
I actually have a shirt my cousin got me that says I hike,
I drink beer, I know things. There you go.
Yeah, it's not bad. That's a pretty decent life.
Not bad, right? Yeah.
Some of those things are true. I do drink beer.
My kid and I were talking about I was trying to figure out he
likes the youngest likes this math YouTube and I was trying to
find him another one like a similar channel.
So I said OK this might be like a good project for Gemini and I
brought it up in the middle looked at me and he goes is that
ChatGPT? And I said, no, it's Gemini.
And he goes, well, what's the difference between ChatGPT in
Gemini? And I said, well, this one's
owned by Google. And he's like, OK, so it's
pretty much ChatGPT. I was like, yeah, I guess so.
And that, you know, through the eyes of a 10 year old,
everything's commoditized. Yeah, yeah.
It might be just that might be the smart insight it probably.
Is, I think it is the smart insight.
I mean, look at to the extent that ChatGPT has become the verb
we all use. I mean, they, they have it
right. And it's the Kleenex, it's the
Band-Aid of, of what, you know, whatever, it's the Zoom.
But I, I think Zoom's a good example of, I thought that was
actually going to be a thing that made that, that stock be a
better investment. You know, if you bought it
during the 20/20/21, it did work for a bit, but it turns out
that, you know, having every computer in the world already
having Teams installed, it was just a, a hill to a hill you
could not get over as, as the, the better product.
I think Zoom's a better product. But yeah, we still say Zoom.
Like I, I say people, hey, let's go on a Zoom.
And it doesn't matter what the platform is.
I say we're using Zoom. I hate when people send me a
teams invite. It's it is a garbage platform.
It's. Awful.
It's so bad. I kind of judge the people that
send it. Yeah, especially if they don't
work for like a big corporation. Yeah.
Yeah, no one should say willingly.
Use Teams. So it's kind of a that's yeah,
you got some issues that you should probably go to shrink
over. Yeah, I have to use it when I
work with a, a government agency in here in my state.
And it's not their fault, right? They that's just what they have
to use. And I so I can excuse it,
whatever it's what you're told to do.
But yeah, personal use of it, I just don't get.
I just don't get. So we mentioned, we mentioned
Zoom. I have to throw this out there
because I always do this, Jeff, can confirm.
Interesting little data points about Zoom, not something a lot
of people would realize. The stock since the IPO, since
the debut trading debut is up 20%.
That was back in 2019. Yeah, mid 2019 free cash flow is
up almost 1700%. Well, there's minuscule then
what's that tiny basis? How much is revenue up?
I mean, revenue's up 700%. There we go.
The stock's up 20%. Yeah, well, it turns out
valuation does matter, you know, But the conversely, I mean, Once
Upon a time I had a bet with Austin Lieberman about this
thing, and I said the QVC was going to perform better.
And I'm pretty sure the QVC is down 90% and Zoom is down like
85. So he won the war of attrition.
He won the toilet bowl. Yeah, it's and you know curate
was like trading it. I don't, I forget now, but maybe
three times cash flow and Zoom was trading at a bajillion times
cash flow and they both imploded.
So what's the lesson there? In the long run, everybody dies.
That's the lesson. That's right, the the take away
is just index. Yeah, well, you know, The thing
is I Zoom's a fast Zoom was a good learning experience for me
because I, I, I forget if we talked about this when you were
on our pod Bill, but you know, I've been an investor in the
sense that I've had work retirement accounts for 25
years, but I only started buying individual stocks in 2020.
And I bought Zoom before I kind of knew what I was doing.
And I, I was convinced at that point that it's such a good
product. Like I was a user of it and I
could see how well it was, how, how well it worked and, and how
successful it navigated, you know, basically the whole world
jumping on its platform in a week.
And then I, I, I learned very quickly, like you can't get
caught up in the story or how well the product works, right?
The whole lesson of a good product doesn't always make a
good investment. But yeah, to Jason's point, some
of the metrics when you look at them, if you, if you were
blinded to the name of the company, you would certainly
guess it was up more than 20% since it's IPO.
Yeah, yeah, it's, I mean, that one was a wild one.
I remember that one, the 1/4 that they reported and the I, I
mean, just the growth in the free cash flow was unlike anyone
that had ever seen. Now I guess what, according to
the fiscal AI machine, it's trading at 12.7 times cash flow.
So wouldn't that be interesting if it turns out to be a good
stock? Yeah, that's the thing.
I mean, but I've been looking at it and trying to find the
opportunity for it to be like the deep value, hey, this can be
a compounder over the next four or five years, buy back some
stock, grow cash flow, grow cash flow per share, but through
those buybacks even faster, maybe pay a dividend at some
point plus gets a multiple expansion.
Like I've looked and looked and looked.
But like I remember when they announced that big like the big
stock buyback program, it was like $5 billion.
It's probably been over a year ago, year and a half or so ago
and like in the first two quarters after they announced
it, the share count went up. That's tough.
That you're not doing it right. I mean, I, I get, I appreciate
that their founder has been smart about not rushing out to
buy growth, you know, and buying $0.90 of growth for a dollar.
But they haven't bought any growth.
Like they haven't delivered any value, right?
Sitting on the money, canceling out dilution, barely growing
revenue against inflation, and clearly like losing enterprise
customers to Microsoft. Well, that's the thing like this
goes back to my best product argument.
They don't, you don't need to do as well as Zoom does for 90% of
what enterprises are using video conferencing for.
You know, it's can I, can I see and hear you like all the stuff
they've added, like the annotating slides and the, and
I, I just, I, I don't think the use case is that compelling.
And by the way, you know, this, this is what I think really
killed them during the pandemic. You know, I'm guessing Microsoft
didn't put a whole lot of resources into Teams.
And I assume that because it's a trash product, but I'm sure Zoom
becoming the place everyone went during the pandemic got them to
put a little more attention and make Zooms at least passable.
And then once it became a little better, I think if you're an
enterprise, you're already paying for it.
You just go like, we're going to use Teams.
You know, I'm not going to, why would I pay for Zoom?
And I, I don't think they're ever going to get over that.
I, I, I, I wouldn't be shocked if someone just acquires them.
Not necessarily like Microsoft to become what Teams is, but I
don't know some other big conglomerate type business just
buys them. So they're just a feature within
a different companies, you know, pro portfolio versus a
standalone company. I just don't see how it
outperforms from here. Yeah.
Well, to your point, what number of enterprise customers has
decreased from 220,000 in January of 24 to 185,000, which
is not the direction that you want to go?
Stock buybacks don't usually offset that.
In fairness, they did change how they calculate that number a
little bit, OK. I believe partly was like
legitimate. Yeah, it was companies that they
had their sales team engaged with that really weren't big
enough. They should have been an online
just going through their website to manage their account but
probably also to wallpaper a little bit over.
Yeah. I mean to your point customers
greater than 100,000 in revenue is growing and actually
reasonably substantially, but it is not a time.
Here's the thing, like I, I think we can look back like one
of the lessons that I've learned with companies like this is it
like history is like littered with examples of how this sort
of thing has played out where just to your, like you were
saying, Jeff, just because your product is better doesn't mean
that there's value in paying more for it.
And distribution always wins, I think is the big, the big lesson
that I've learned. And that's like the Microsoft
case versus Zoom. And one of the earliest examples
that I know of where distribution wins is I don't
even know if you guys are really old enough to remember Betamax
versus VHS. No, I'm not nearly as old as you
so. Yeah, you are really old.
Just like incredibly old. Incredibly old.
I don't remember Betamax, but I do remember VHS.
So of course videotapes for those that are.
I remember laser discs. Yes.
Yeah, they were. Those did not win, and they were
theoretically better. Yeah, well, they were all so
gigantic. They were.
Massive. And that's like a convenience
factor thing playing in. So Betamax and VHS Betamax,
these were both cassette tape, videotape formats.
Betamax cassettes were smaller. They were about 1/3 smaller.
They were higher resolution. They had better audio quality.
It was the better products. But VHS was backed by like 2/3
of the studios, including the two largest movie studios at the
time. And that was, I mean, that was
the nail in the coffin right there.
That's why the better product died in the marketplace, because
the the films that people wanted to watch, they wanted to rent
from Blockbuster, they wanted to buy, they were on VHS.
They weren't available on Betamax.
So I mean, that's, that's just the reality.
That's how these things play out.
And of course, Laserdisc. I mean, those things were like
the size of a large pizza. Yeah, I do remember watching Top
Gun on laserdisc at my buddy's house, and that was sweet.
You remember having to flip it over to watch the second-half of
the movie. I do.
Yeah. It was sweet.
I loved it. It was great.
Yeah. You can hold.
Now I'm getting nostalgic. 500 copies of Top Gun in higher
quality on this little thing that I'm holding right here.
Yeah, but that looks a lot nerdier.
Oh, totally, 100 percent, 100%. And anyone can do that now.
You know, back then, not everybody had the access to
laser disc, myself included. That's why it was such a treat
when I'd watch it at his house. Man, we were talking about
something and then I got think of the Top Gun and now it's
gone. It must have been super
important. My, my big thought.
No, I think it was about distribution.
Oh, you guys have a thought on the liquor companies Speaking of
distribution and winning and and maybe challenger brands getting
attacked. This no is a fine answer.
You don't have to have thoughts. It is a.
It's a I'm trying to figure out if this is just a cycle or if
this is a durable trend of reduction in consumption.
Yeah. That's what I'm trying to figure
out. Santori like that's then they
cut a bunch of their bourbon production.
Yeah, well, bourbon's way over over inventoried.
There's too much of it. Way over.
Inventoried. I'm doing my best to to try to
resolve that, but. Out there production, yeah,
you're doing, you're doing your part there.
I mean the beer. The beer industry's a mess.
It's I, this is the same thing I'm struggling with.
I 'cause you know, the part, part of me is like, we've been,
we as a species have been drinking for what, thousands of
years? Yeah.
So I, I find it hard to believe that we'll stop, but I, maybe it
is just going to be a lot less. Maybe it is a durable downward
trend. But in that case, I, I think
everything just sort of normalizes and we get back to
where we were. It's just the unknown of, of if
it's, if it's going to keep decreasing or level off it at
some point. I think what's a bigger, what's
really interesting is when and if we get, because you know,
the, the, the thing that is not slowing down or that is
increasing is use of cannabis. So I'm curious when and if that
becomes federally legal and the, you know, the doors are blown
off that that's got to impact drinking, I would think.
I mean, the, the people that I know in in my life who used to
drink a lot and now take gummies or smoke weed, they just, they
hardly ever drink anymore because it's, it's, they prefer
the other thing. And, and I don't know, maybe
that's a generational shift. I mean that that is the thing
that is very different about now versus the last thousand years
in terms of like how easy it is to get get it and all that kind
of stuff. Yeah.
Here's some other things that correlate with those trends that
frankly concern me a little bit. The use of social media, of
course, has spiked. Mental illness levels have have
also continued to increase. Maybe some of that is the fact
that we just diagnosed those sorts of things better than we
did 20 or 30 years ago. But also like the the rates, the
unmarried rates are higher. Men are going to college less,
men are getting married less. Women have historically married
up like at at higher rates. That's not happening as much
just because there's not as many well educated young men growing
up in the world. And I just, I do think that
there's maybe something too young people just aren't going
out enough to bars, getting drunk and getting laid.
Like, I know that's kind of a crass way to put it, but like,
like that's the social lubrication and being proximate
with people. I, I'm concerned that we have a
generational shift that's losing that and those other things that
they're consuming more of instead are absolutely not
filling that same place in like society's need.
And like, that concerns me as a person and as a father, but that
also concerns me as an investor and somebody that wants to see
the economy continue to grow and businesses generate, you know,
growing earnings over the long, long term.
So to here's my take on that. I, I agree those are trends that
are heading in the wrong direction, but that feels to me
like a pendulum that will swing back at some point.
Like, I think we're already starting to see the very, very
beginnings of a realization that both cell phone, you know,
smartphones and social media were sort of societal tests or
like experiments with no control, with no control group.
Like we just unleashed this crazy different new thing on the
whole world and and just we're like, well, let's see what
happens. Good.
News is we're not doing it now with trillions of CapEx that
could create a superhuman, I mean, at least we learned.
But that's what so like, you know, what has changed in 2026
versus even 2020, just in the past five and a half, six years,
is you hear more and more people talking about the whole idea
that maybe this was all not the best thing to have done, right?
So I don't think it's overnight, but I could see a world in in,
in where 20 years from now we we look back at, you know, the
social media and smartphone time and say, like, well, that was
kind of like smoking, right? Like, you realize now not good
for us. And in that world, you know, we
get back to going out, being on screens, less social,
lubrication and everything you just talked about, Jason.
So maybe that saves the booze industry.
But I wouldn't be surprised if it never comes back to the
levels of consumption that we've seen historically, just because
there's other options out there. But yeah, it's not a space I've
ever invested in. So I, I, this is just my, my
looking at the whole world kind of assessment on it.
Yeah, I don't know. I mean, I don't have any like
really good thoughts on it. I I do know if I had to buy or
if I could buy any of them, it'd be Sazerac's brands, but those
are private, so that doesn't really help me.
Yeah, I don't know. I look at, I'm very uninspired
by some of the big brands. It reminds me of big big Big
beer and like we see a lot. Of that same consolidation, you
know, we saw ABN Bev and some of the others swallow up the whole
market over the previous 25 years and we've seen some of the
same thing happened in liquors over the past decade.
Yeah. And you can, you know, I mean,
the other thing that's different and this is not a unique
thought. I mean, it's going on in shoes,
it's going on and everything. But to the extent the
distribution used to be the only, the only way to get liquor
was going to a liquor store. I mean, people can release a
tequila brand reasonably easily these days.
I don't know how easily they used to be able to do it, but I
know that the the ability to get attention appears to be easier.
Maybe it's more expensive. I mean maybe the the CAC doesn't
make sense, but at the end of the day people are spending it.
So it's still dollars fighting for share of your liver I guess.
It's, I mean, but it's the emergence of contract, it's the
emergency of contract, the emergence of contract
manufacturing. It's, it's done the same thing
in the booze industry because every new brand they're using
some contract provider along the value chain for multiple things
and they're really not doing a lot besides maybe some aging and
some blending for the finished products.
So. Yeah, coupled with like the
influencer economy, right? Well, but that's the
distribution model that's changed.
That's, that's, that's the thing that's changed.
You know, we used to have, when I was very young, we had three,
three choices of ways to consume content.
And one of them required you to make your brother go outside and
turn the antenna to, to get the different ones.
And the grocery stores owned the shelves and the big brands paid
to have the eye level spots on the shelf.
Amazon has disrupted that model. And of course, they're making
tons of money from advertising the brands that are buying the
eye level on the shelf, right? They're buying the ad space
above the 3rd when you do a search, So.
Go ahead. This is why I was just going to
say this is just to take it kind of big picture about investing.
Generally an irony I have found in in how I think about the
market and investing is I often say businesses like liquor
companies, beer companies, fast casual restaurants, anything in
retail. I just, I put on my 2 hard pile
as an investor immediately, which is ironic because from a
understanding how the business works standpoint, they are some
of the simplest businesses to like wrap your head around,
right? So if you're like, if you're
like, and, and, and you know them.
So like, if you're a new investor, you're someone who's
just gotten interested in buying individual stocks, you're going
to be drawn to Chipotle because you like to eat there, Target
because that's where you shop, Lululemon because your wife
likes their pants. And you look at your life in
their pants. OK, fair.
A liquor store or a beer company, right, because they're
products you use and they're easy to understand.
They make the product, they sell the product.
Yeah. You know, you learn about
distribution, you learn about marketing, all those things.
But from a picking the winning one perspective, I think it's
infinitely harder now than it was 10 or 15 years ago, for all
the reasons we just talked about.
Peter Lynch's process doesn't work the same way it did when
he. And I think it's going to keep
getting harder. Like, will there be winners in
there? Like, sure.
Like I would never have thought Kroger would have been like a
random grocery store would have been a big winner.
But it has been. I just, I stay away from all of
that 'cause I just, it feels like you're chasing fads
constantly. And like, to your point, Bill,
about the liquor companies, like, sure, maybe this, this
tequila that this celebrity makes gets hot, it that gets
bought by one of these big publicly traded companies, their
stock goes up for a little bit until that celebrity is no
longer hot. And now their liquor is not hot.
And now it's someone else's liquor, you know, so it's just,
I don't know. I, I, I've, I've just stayed
away from those stocks, mostly because I just, I can't, I don't
feel any, I have any confidence in knowing who's going to win
and for how long. Yeah.
The thing that makes me nervous though, is the more businesses
I'll know, the more I know I don't want to invest in.
And then I'm like, so the ones that I invest in, is it because
I don't know them? Yeah.
Like am I? Do I just not see the warts yet
and I got to learn them? Probably.
Well, This is why I like another thing that I've another sort of
trope in investing that I don't know that I agree with is like,
invest in what? You know, like you said, Jason,
like the whole, the whole Peter Lynch thing, like, I don't know,
I don't really understand how cybersecurity works, but I'm
glad I bought Crowdstrike, Crowdstrike shares five years
ago. That's worked out well for me,
right? Like I understand the business
on a, on a investing level, but I can't tell you that their
specific thing that they do is much better than Z scaler or
Sentinel one. I, I'm not in that industry.
It's not my expertise, but I'm much more comfortable rolling
the dice on a company in a cyber, in the cybersecurity
space for reasons that I that are the opposite of what I just
talked about. Like I don't think that's a fad.
I think it's an ever growing Tam.
I think it's going to grow forever.
So like I find myself more comfortable buying companies in
place in sectors and and parts of the investing world that I
don't really understand from like a professional standpoint
than McDonald's, which I understand very easily from a
how it works standpoint. Well, there's probably two
thoughts there. One is, if you understand it
really well, everybody else probably like especially
consumer products I mean. Unless you have.
What's your edge? You have no edge?
Yeah. Yeah, in your in your industry
and it is a specialized industry, there is a very good
chance exactly what you just said is absolutely the case.
And then Sean Standard Stockton from used to used to be of
ensemble, but he wrote a, a piece Once Upon a time about
like I'd, I'm probably going to misremember it, but it was
somewhere in that 33 to 5% revenue growth range.
Like when you go from that to 1:00 to 3:00, you can get some
really ugly results in the stocks.
Yeah. Well, all of all of your
expenses start to outrun your ability to grow through them and
generating, you know, to get any sort of operating leverage,
right. I mean, everything goes
backwards at that point. Got to cut your way to
prosperity. Yeah, that doesn't work.
That's always worked. And buy back shares while you do
it. It's a winning formula.
It works, still it doesn't. Yeah.
Well, the thing about the buybacks, you know, I mean, I
don't know, I I follow cable and now that now a debate that's
going on is should they pay dividends or should they, you
know, to keep buying back shares?
I mean, the problem is buybacks only really add value if you're
buying below intrinsic value. Right.
And they almost never do. Yeah, nobody ever like I
shouldn't say nobody ever does, but the I I'd be interested, I
should read an updated study on the management teams that
actually create value via buy buybacks.
I mean it's the list is short. Yeah, you've read The Outsiders,
right? Yeah, yeah.
Yeah, You just don't get. I mean, there's a reason why
there's only a handful of companies that were described in
that book is because there's tons of businesses that generate
excess cash flows. The problem is that there is a
tiny pool of talented capital allocators that also have the
chops to run a business, right? There's plenty of people that
can run a business, but not very many of them are actually very
good at allocating capital. Like they do the other things
well enough. And the businesses are good
enough to wallpaper over the fact that most of them just
aren't really good at deciding how much money they should spend
to buy whatever they need to buy.
Or is it? Is it time to to buy a small
distributor instead of investing and building at your own
distribution? Like most, They're just not, you
know, they have other people telling them what makes the most
sense. They don't.
They're not wired to really know how to make those decisions best
and a lot of them are listening to consultants that are advising
them what to do. Right, well, and the incentives,
the incentives are the incentives are screwy too.
Look how many times you see a stock pop because they announce
a buy back plan, not that they've actually bought any
shares back, but so and so company has it, you know,
announced a $6 billion stock buy back plan, right?
Doesn't mean they're going to do it, doesn't mean they're going
to do it smartly. There's a, there's a, there's
companies that I, you know, I look at their quarterly results
every every three months. And one of the bullet points,
it's like always in there because you know, the format
doesn't typically change is, you know, we bought back X billion
dollars worth of shares this quarter, every quarter.
And I'm like, but your stock was really overvalued this last
quarter. Like I, but that's, so there's
not a brag in my book. Like I'd rather see our stock
was overvalued last quarter. We bought back no shares, you
know, or are we? Or it was undervalued.
We bought back more than we usually do.
Like that's what you want to see.
But people hear stock buybacks and the stock goes up.
It's. Yeah.
I'm so I'm sort of sympathetic to the idea that management
should just return excess cash all the time.
I, I just my, my gut, I, I need to know what the gate, what the
data actually says. I have a sense of what it says,
but I'd like to actually see it. But you know, it's just that
like one company that I'm thinking of, I've been noodling
on and mentioned it a couple times on this, but is Olin,
they, they are basically a commodity company.
They have a, an ammunitions unit that's not as commodity, but
they had a, a huge run up in like 2022.
And I, I mean, the bowl pitch is, oh, they, you know, they're
buying back shares, yadda, yadda.
It's like, yeah, but they bought all the shares when they were
really high. And the shares were high because
the company had a huge cyclical boom and was on business
breakdowns. And then it became a cyclical
again. And now they don't have the cash
to buy back the shares. And they're talking about we're
going to pay the dividend. And it's like, why don't you
just kind of have a variable dividend and just let the shares
be? I like the I I don't know if
I've heard you say this before or or like.
Who gives a shit, right? Just tell people you're going to
make 3 1/2 percent, we're going to protect that.
Everything else we're just going to pay out.
It's not the most tax advantage thing, but it's probably going
to work out better in the long term.
Yeah, I'd like to see practice be here's here's a, here's the
set dividend, right? Like you said, here's your
guaranteed X percent. And then the excess cash flow we
have after that, we're going to make, we're going to make one of
three decisions. We're going to keep it.
We're going to buy back shares if they're cheap or we're going
to just issue special dividends when we have the cash and the
stock's too expensive, right. Like I'd, I'd, I would sign up
for that, give me my monthly, but then every once a year,
every other year, you give me like a big $15 per share.
You know, here's the excess cash.
We we couldn't find anything better to do with it and the
stock was overvalued like. I don't know that they can tell
you if the stock's overvalued though.
All right, but that would be the reason.
Like I, I don't think it's like a goldfish in a fishbowl, like
just no. You're saying they don't have
the ability to, not that they can't.
Yeah, Like, I don't, I don't think that I, I, they're not
hedge fund managers, right? They're just like CF OS.
And when things are going well, they're going to get comp tables
and everything's going to be elevated and they're going to be
like, oh, are stocks reasonable? And I don't really want them
holding cash waiting for a downturn because then all of a
sudden their market timers like I, I don't know, I realized that
the counter to this and the academic answer is, well, you
can just sell into the buyback. I don't think many people do
that. No.
Well, and it's not, you know, the here's the thing, the
buyback authorizations come from the board.
The board is fiduciaries, right? So they have a legal obligation
and how they think about doing buybacks.
So that's that's that's I mean. I mean, you're not wrong, but I
don't know that. You're right, either you're not,
you're not going to see a lot of congressional inquiries that
that actually move to like civil charges against board members,
right? That's not, that's not
accountability and responsibility are two different
things. So that's I think is the point.
But I'll say this, Jeff, so you were talking about like the idea
of variable dividends. There is an industry that over
the past probably decade now has has adopted that the idea of
variable dividends and the way they do share buybacks to some
degree of success and that's independent oil and gas
producers. The pukey is to pukey,
absolutely. Absolutely.
Gross. How dare you, even it is gross,
say that someone could invest in such nonsense.
I didn't say anybody should invest in that shit.
That's good. Just.
So we're on the same page. Devon Energy, EOG Resources,
Diamondback, they, they did this because you go back to like the
salad days, you know, the early 20 teens, oil was over 100 and
$120.00 a barrel for two years straight, 2013 starting 2012 and
then mid 2014 that summer oil started a price to fall and a
year later it was in the 20s. I mean, it was insane.
But all of these companies like they were paying this dividend
and growing it every year and growing it every year.
And that doesn't work in an industry.
Yeah. No, it doesn't.
That's not that's that volatile. Yeah.
Yeah, it does. It doesn't work.
So they've adopted that and you you look overseas, you see a lot
more variable dividends, you see a lot more twice a year
dividends because the expectation is very different
than it is in capital markets in the US where it's about growth
and it's grow that payout raise the dividend.
You know constantly that the idea of being able to constantly
do that and it's dis aligned with, you know the realities of
the market. One thing I like about the idea
of forcing management's to return capital, like you were
talking about the vast majority of capital on a regular basis,
keep them on the edge of their chair, right?
All of a sudden, that $2 billion that you've got sitting there in
the bank, all of a sudden it's $200 million and you basically,
you basically have a year's worth of working capital.
You're going to behave, right? You're going to.
The problem is those sort of things are this goes.
So against everyone's incentives.
Well, that's the thing, man, the God incentives matter so much.
Yeah, look at the comp plan. Reading the proxy statements
more important than reading the annual report.
Yeah, that's not wrong. It's not always right, but it's
not not wrong. Yeah, well, yeah.
I mean, nothing's always right. Not even you All right, close.
close. Yeah, I don't, I don't know.
It's really interesting. I the you know, the the longer I
I follow investing and invest, the the less I know for sure,
which probably means I'm starting to get smarter.
Funny about that. Yeah, yeah.
So when did you guys like you, when did you start investing?
You want me to go first? Jeff?
You. Want to go ahead?
So the the I'll give this short version of of my story.
Since you're so old, like you lived through 2000 and 2008,
right? It's crazy.
Yeah, I did. Yeah, I did too.
That shit's scarring. So The funny thing about 2000
for me was I was at a period in my life where I was as unplugged
from the idea of investing or even just responsible financial
management. Is anybody you could possibly
imagine. Jeff, how many times have I told
the the golf trip story? Oh, you should tell it now.
It's pretty good, but try to keep it short.
So like down to like 35 minutes. Yeah I can tell this in like 5
minutes. I actually, I had a rollover
from a company and had a buddy and he had a couple of friends
that I didn't really like him very much, but he's like, hey,
let's go play golf at this thing tomorrow.
I'm like, all right, I'll blow off work, go play golf.
I don't have any money. Had a credit card.
I knew my wife would kick my ass if there was a balance on the
credit card. I logged into that rollover.
I cashed it out. Oh man.
To go play. Golf, this is good priorities.
I like it. Yeah, yeah, like, no, this
really this really happened. I I I you know, I caso reminder
for those taking notes at home. I took a long term asset and I
pissed it away on a short term thing.
I. Paid Did you avoid the crash?
Please say that you avoided the crash because of this and it
turned out to be a good. This was in 2004.
Oh, OK, so no. No, no, So like worst time to be
selling this asset sort of time. So remember you're take a 20%
penalty, right, because I'm cashing it out.
It now counts as income because originally this was pre tax
contributions. So I take that double hit.
I go play golf with a bunch of people.
That you don't like, but you don't like I.
Don't like to piss? Your wife off this is like real
man shit. I like this.
Like real man shit, right? So I do this, I do this.
So round figures, I haven't done the math on this in probably a
year or two, but the way the market's been running, if I had
of just left this and just follow Buffett's advice for all
of us regular people and just index it, it probably would be
$55,000 today. Yeah, round figures.
Expensive round of golf. You're like the guy who bought a
pizza. Would play well.
What's that? What's that do?
You play well. I don't even remember.
Probably not. I probably played terribly.
You at least want to be flush in it if you're going to take that
kind of. Risk, that's the thing.
I mean, that's like. I hope you're enjoying this
conversation. I wanted to interrupt the
program to give you a little sense of what Trata may have for
you and I'm going to read you a a little excerpt of a transcript
as a 1/21/26. The analyst says.
I don't think of Duolingo as an education or an Ed tech in the
traditional sense. I think of it as a habit forming
consumer platform, something closer to Spotify or TikTok in
terms of engagement, but with very different monetization
constraints. I don't think the Moat is
content to me. The content could be
commoditized. It could be built by somebody
else, especially with generative AII think the Moat is admin
brand and distribution. If you line up Duolingo against
other consumer apps in terms of growth rates, user base, and
engagement time, I don't know if it has a peer in those
categories. Roblox is a really good example,
but Roblox hasn't figured out how to make money.
I'm not sure. I as a side, I'm not sure I
agree with that, but I digress. Duolingo has significant
operating leverage and it's pretty clean cash flow to as you
mentioned, if you break that habit loop, I think the entire
model degrades very quickly. That's why I'm cautious around
what they're doing. Again, these are the kind of
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There's a weekend in Vegas. And like, there were actually
parts of the weekend in Vegas that were great stories that
we'd be sharing over beers. That'd be one thing.
But the great story is how stupid it was.
Yeah, so. But that's like a microcosm of
who I was, you know, 20, call it, you know, 2223 years ago.
See, I had friends whose parents were day trading in 99.
So like I I had a pretty close seat to what the implosion would
do. That's like family destroying.
Yeah, it was not good. Yeah.
And then you get to 2008 and it's like the world almost ends,
right? So I don't know how to trust
like, like the market. I just don't know how to.
Do it well, All right, so I don't want to enter Jason's
story, but but let me let me, I think this is this ties into
what you just said, Bill. So I was not buying stocks,
picking stocks or really paying close attention to the market.
I was just like a guy going to work every two weeks, paycheck
money goes into my retirement account.
I get the statement in the mail quarterly, right?
That was me from age 22 to 40. Your opportunity cost was the
other opportunity. Cost, yeah, but but this is what
I want to get at as it pertains to the 2008 crash, because I was
aware enough of the news, like I knew that it was happening and
all the bad things and stuff, but I would get my statement
every quarter, right? So I was only getting an update
really on. I don't even think I logged into
the website at that point. I was just like, that's how
checked out I was. And I remember like, you'd get
it and it would be like, wow, that's a lot less money.
And then three months later, that's still less.
And then eventually three months later, oh, it's a little more.
Three months later it's a little more.
And I only bring that up because what I learned from that, and I
didn't have the fear because I wasn't like day trading or
picking individual stocks, but what I learned from that is
like, oh, if you just wait, it comes back.
Yeah. Right, I know that's a
simplistic, easy way to look at it, but that helped me immensely
because when I bought my I bought my first stock in mid
February of 2020, right? So like as I was stepping into
this new found obsession of mine in terms of paying really close
attention to the markets and buying stocks and things like
that, I was on, I was about to get on a pretty wild ride as it
pertains to market volatility, right over the next five years.
And I think what helped me not freak out as a brand new stock
investor was the fact that I knew that if you wait long
enough, the things come back right.
And so to me, like, that's the lesson of the 2008 crash, not
not the fear. And again, that's because I
wasn't paying close attention to it.
I, I would have been in a totally different headspace if I
was, you know, doing what you were doing or what Jason was
doing. But.
Well, I would, man. I was in school at that time.
But, you know, I mean, I was, I don't, I've, I've always paid
attention. So yeah, I don't know.
And I and I just remember, I remember people panicking around
me in a big way. Yeah, Yeah, yeah, yeah.
But anyway that I'll just since Jason left again again improved.
Yeah, I know. He didn't mute himself when he
left. I had to mute him.
Yeah, this is I make a podcast with him weekly.
So I'm this I'm used to this. When he comes back, maybe I'll
make him sit muted, I think, right, like in the penalty box.
Honestly, it'll improve the show if we're being, if we're being
honest. But to answer your question, so
like, yeah, I, I started buying individual stocks in, in 2020.
I just became obsessed with it. I don't know why.
It was just like a thing I had time to pay attention to over
the pandemic and became, it just became like the thing I thought
about pretty much all the time. So I got a late start in that
aspect of it, but. Has this been a positive to your
life? Yes, because I think I don't
want to be like a nerdy educator here, but I think like anytime
you find something you're passionate about learning about
that's just good for you as a, as a human being, as a person.
And I don't think it's that often that in your 40s you come
across a completely new thing and then dive complete, like
dive head first into it and try to like learn as much as you
can. You know, 'cause we're all guys
who go to school, get a job, you do that career, and I still do
that career, but then I have this whole other thing.
I got to be really interested in learning about South from that
perspective, yes. And honestly, the obsession
about learning about it made me realize that a lot of stupid
things I had done earlier, like I was much more responsible with
my money than Jason was, but my initial.
Contract very, very low bar. True.
My initial contribution to my retirement account when I first
got out of college was like, I think literally $100 a paycheck,
which is like what, $76 out of my pocket pre tax and
everything. And I don't think.
Better than nothing. I don't, yeah, but I didn't
increase it for like a decade 'cause I, I did a dollar amount,
not a percentage, right. And so I, I've been doing a lot
of catch up over the past five or six years trying.
To well, you have, you have a pension too.
I mean, that's. That's true.
That's what saved my having a pension and being married to
someone who's who who worked for a company, had a match and got
that match from age 22 on really has helped.
Yeah. But yeah, I net positive in my
life for sure for a bunch of different reasons.
Well, the good news is you'll know that the lessons to teach
your children. Unless AI takes all our jobs, in
which case hopefully we live in Elon's abundance reality.
And he said it's better to be an optimist and wrong than a
pessimist and wrong. So I'm just going to have a
utopian view of all this. There you go, utopian hellscape.
Yeah. Getting a late start with it and
and learning that you have to contribute more earlier has made
me be a little bit more comfortable.
Like talking to younger people who I come across who are like
getting out of college and just being like, listen, I'm not a
financial advice guy, but start. Yeah.
And yeah, I've, I, I told I have AI have two kids.
The oldest is a senior in high school, so he's going off to
college next year and he got his first job a couple years ago in
the summers. And I said, and he's has no
interest in any of this, doesn't like talk to me about it.
He makes fun of me. I said this is the only thing,
the only lesson I want you to take away from what I've
learned. I said if you just take 10% of
everything you make ever, starting with his very first
paycheck, put it in your Roth, and do nothing else, you'll have
more money at my age than I do. Yeah.
And and I was like, that's the only thing you have to do just
that anything you do above and beyond that, God bless you.
But that's the minimum. And to his credit, every
paycheck he got with his summer jobs, he he keeps track like 10%
puts it aside couple months a year.
I take it, I steal it. I stick it in his Roth for him
and just put it in a in ASAP 500 ETF and he can do more with it
later. But God, I think back like if I
had done just that when I was 1516 years old, I'd be in a
completely different spots. But.
You need to log on to his phone and then open YouTube and just
like press investing videos so that the algo starts
recommending it. I was recently, I was recently
told to do that and I was like, that's a pretty good idea.
That's awesome. Got incept thoughts into these
children's brains? Well, it's like typical kids
stuff. He came when he was in like 8th
grade, I think he came home one day and he's like, hey, my math
teacher, they do this thing where like, I don't know,
there's some period in the day where you, you go to, it's like
extra learning that they do. So he went to this, he would
went to the math teacher that day and the guy was talking
about investing stuff. And he comes home all fired up
about it. He's like, ah, he's talking
about, you know, saving your money for the future and
investing. And I'm like, also, do you want
to talk more about it? And he's like, no.
Yeah, not to you. Not to you.
I was like, all right. Well, I tried.
Yeah, that's fine. Yeah, at least it's getting in
there somewhere. The seeds are getting planted.
I mean, look, I would have been the same way when I was a
teenager. Like I, I had no interest in any
of that. If anyone tried to talk to me, I
would have been like, stop, you know, I so he'll.
Figure the extent the extent of my parents financial education
for me was when I was in 10th grade.
I want a raffle like $200 raffle and I had this old pickup truck
and I needed to replace some speakers in it.
So I went to Walmart to get speakers.
My dad took me to get speakers. I hadn't even turned 16 yet but
I was going to be turning 16 in like 2 months and I wanted to
have my truck ready to go. And my dad's like you should
really be smart with this money. At least go buy some new
underwear too. There you go, that makes sense.
That was it. That was the last conversation
me and say. Dad, with these speakers, I'm
not going to be wearing underwear when these ladies get
in here. Yeah.
Nice. Nice, I got different was.
Clever enough to wasn't even clever enough to think about a
witty response like that back then.
Yeah, well, now you are. There is no there is no more
typical like what does a teenage boy who has a truck want to
spend his money on than speakers for said truck like that?
Is makes perfect sense. Oh, yeah, yeah.
I mean, that's how basic I will. I've, I've, I've always been.
So now the irony is I, as my dad got older and retired and he had
a little bit of, he got a little inheritance money and had a few
things, he actually did start to come to me for advice about
investing in that kind of thing. And luckily.
He didn't. He didn't follow any of your
stock tips. No, actually one of those that
was, it was in the spring of 2020.
There you go. Talking about lucky timing.
Dude, the the portfolio I suggested to my father-in-law
right around that time. Yeah, he like, he thanks me all
the time and I'm like, I just wish that I had done what I told
you to do and never touched it. It'd have been great.
Yep, Yep. The problem was I touched it.
Right, right. That's the thing, right?
We meddle. We we meddle with with a good
thing. Here's a great example of that.
And it's even better than spring of 2020.
So when I got interested in all this, my, my father, who's a
little bit more of a gambler kind of guy than I am like likes
to go to Atlantic City, likes to do the scratch offs, likes to
play the lottery. Like that's, that's his thing.
He he's like, how many picks? On so much.
He's like, he's way cooler than me.
He's like, I got a little bit of money.
Help me pick some stocks. We'll do a little portfolio.
I was like, OK, so I gave him he he came to me with ideas and I
was just like, sure, like I know a little bit that sounds good.
He bought 15 or 20 stocks in November of 2021, like right at
the peak of like that, that run up we saw after the bottom in in
early 2020. And he brought like growthy,
growthy stuff. Like he bought Zoom.
He bought like if it was hot and popular on like Fintwit in 2020
and 2021. Like that was this portfolio
like work, the growthiest stocks overvalued and like the worst
timing ever. And then neither of us logged in
and looked, looked at it for years.
But one of the stocks he bought was NVIDIA and that's.
And so I logged back in again like.
Sweet, sweet NVIDIA money. Like a year ago and the the
whole portfolio was up like 80 or 90%, I don't know.
What Gardner talks about. Right.
And his NVIDIA is was up like I don't know 900% or something and
it's just so it's like. You just gotta be comfortable
with the outcome of that, you know, You gotta be comfortable
being so concentrated. Yeah, well, it actually it it
wasn't, it wasn't equal weighted.
So like the amount he put into the NVIDIA portion was a little
bit smaller than some of the others.
So even with that huge growth and he put some of it into just
an index fund. So it didn't do the funky thing
where it became like a 90% of the portfolio, but it proved
that whole it proved 2 points. So the whole like your winners
can, you know, swallow the losses of all your losers, but
also the whole idea of like buying at the worst time, buying
the growthiest companies. If you just leave it, leave it
the hell alone for three or four years.
Like it's like if I, if I had been there trying to be a
genius, I I would have destroyed all of that growth.
I probably would have, you know, lessened the performance
significantly. But we just left it alone and it
and it did well so. Yeah.
Jeff, I don't know when last time you looked at Nick's picks
was. Oh, I haven't looked in a while
actually. All right, I've got the latest
numbers. So, Nick's picks, this is you,
you explain. It So I won a raffle and it was
a $500 thing and it was a raffle for a, a, a non profit that my
dad's involved with. So he said you should buy.
He's like, you should do a thing on your podcast where you buy
stocks you would never buy with this money just to be funny.
And I was like, no, let's do something different.
You pick five stocks based on what you've learned listening to
our show, right. Oh.
Nice. So he did.
I put $100 in each. We called it Nick's Picks.
We threw a spreadsheet up on on the website and I have not
looked at it in a while. Jason, what is it doing?
It's up 134.6%. And what's the?
What's it compared to the S? And P's up 64, so it's it's more
than double the S&P. Look at pops, he's a fucking
savant. What were the five?
I read them, I forget what they are.
Applied Materials. Nice.
ASML. Nice.
Tesla. Nice.
I mean it worked as a stock no? Well, it's, it's, it's done
about as well as the market and Old Dominion, which is actually
down. It's the only one that's down.
Company, yeah, it's. A great company, great company.
And I can explain his thinking on all these, just without even
asking it. But go ahead and.
And NVIDIA. NVIDIA.
So that we did that shortly after we had.
October of 2023. So we had Nick Rossellillo on
our show. I don't know if you know Nick,
he, he has a YouTube channel and a newsletter called Chip Stock
Investor or Chip Stock Investing really knows the semiconductor
and and that space really well. And he came on the the show and
we talked a lot about those companies.
I think that's where he learned about Applied Materials and that
was the inspiration for, I think, most of those picks.
Old Dominion, I think it's just 'cause he really likes baseball
and he sees the ads on Mets games.
But hey, it worked out. He's crushing the market.
Yeah, yeah. Let me.
See, I think my kid, I'll see what he what he picked because
he picked, he picked like 3 stocks, JP Morgan International
Paper and like I think maybe it was Amazon.
Wait, your kid picked JP Morgan International Paper?
Yeah, he, he liked International Paper because of all the boxes
that come to our house. And I think maybe he liked
Amazon because they delivered. Because of all the boxes.
I might I might be misremembering on Amazon and JP
Morgan he likes because I actually talk about JP Morgan
all the time. I like Chase, makes me happy.
I even go in the branches. My I think my.
Mom Boomer at heart. I think my mom owns
International Paper because she inherited some IP stock from her
father. My grandfather, I think, was
like a International Paper stock investor in the 50s and 60s and.
Yeah. So like International Paper
hasn't done that. Well, when did he buy it?
He bought it in April of 2023, but it's up 10% and he's got a
couple dividends. JP Morgan Chase, but May 30th,
2023 up 123.75%. Nice.
Yeah. So I don't know, I should just
outsource my thinking to him. So we do.
We do. But he's one like I bought.
I bought him Transdime. Never looked at it.
March 17th, 2020. Yeah.
I mean, that's, you know, that's what I should have done for me.
But why be successful? Then you have nothing to strive
for. Well, all these little stories
are go ahead, Jeff. All these stories are funny.
Like we're, we have a yearly stock picking contest that we do
with the web with our podcast. Just listeners send us the
stocks they want. We put up a spreadsheet.
It's how you did over the course of the year.
We give money to charities every quarter, whoever wins, right?
It's just, it's fun to have just to have stocks talk about and to
give money to charities. I was on a trip with some
friends skiing over the Christmas break and a 7th grader
and a fourth grader in the family that we were skiing with
decided to put some stock picks into our contest.
And it it's exactly if you knew these kids like they picked all
the companies that make perfect sense.
Like the 4th grade boy, He's like, I want Volvo because his
parents have a Volvo and he wants great car.
The companies that make jet skis and boats because he loves jet
skis and boats and he and he wanted.
That's been a tough space. I know he wanted his
grandfather's got an AR so he wanted so I who's that
Stalantis, I think is so we we put that in, you know, and the,
the 7th grade girl, you know, Lululemon, Chipotle, like the
things that she knows. So it's only obviously what a
not even a month into the year. So, but I'm I'm very interested
to see how these two kid portfolios do throughout the you
know, and beyond we'll. Keep well, there's a wisdom in
it. Yeah.
You know, I think of you, I think of you somewhat have like
some rational valuation overlay. I don't know how you define that
term, but there is a wisdom that children have, right?
I mean, like my kids saying Amazon's constantly coming to
our house, how can I get exposure to that is a pretty
smart thought. Right.
So we did it. We did an episode years ago
called is being a lazy investor better?
And it was basically, it was this premise that I had come up
with, which is basically what you're talking about, Bill,
which is if you just picked stocks based on the simplest,
most obvious things that you think of, Amazon is always
coming to my house. I'm just going to buy Amazon
stock. My mom spends.
My mom goes to Target for deodorant and comes home with
$250 worth of stuff, right? You know, when you go to Costco
and the parking lot's always packed, you're going to end up
landing on consumer brands because that's where you go and
experience the world. But I wonder if you just did
that and left it alone, if you could beat the market
consistently? Yeah.
Well, I mean, yeah, you are going to get on.
You're you're not going to have enterprise software for sure.
But I mean, you could find yourself in some techie things
by doing that. Right, if you had followed that
for the past, all right, and, and to be fair, we've had an
incredible bear market, I mean bull market for almost 20 years.
But like, if you just did that over the past decade, you'd pick
things like Amazon and Apple and Alphabet and, and you know, some
consumer brands that have done well, Starbucks, Chipotle,
Lululemon before recently, right?
Like I, I think you'd come up with a pretty good, you know,
it's, it's all, it's a, it's a version of like the Peter Lynch
thing, but. You know, yeah, And I.
And I, you're going to buy Tesla 10 years ago, right?
You're, if you're a young person, if you're a dude and
you're a video gamer, Nvidia's on your radar, right?
There's a lot of exposure that things you might not necessarily
think about. Yeah.
I mean, then the hard part comes into how do you size things when
you know like that kind of thing?
But. No, it's simple.
You buy 100 bucks every month. I mean, you know, like.
Yeah, I mean, a lot of people weighted or whatever.
It's just simpler. It's just, it's just simpler.
Yeah, and then you don't sell it to go play golf unless it's a
really sick course. And it's cool ass people that
you want to hang out with. If you ever played, if you ever
played golf with Jason, you'd know that there's there's no
amount of money worth spending to play golf like Jason does.
Well, as long as you enjoy it, that's the key.
I do, I absolutely do. I got AI got a new putter for
Christmas I was pretty excited about.
That Did you come over to Team Lab?
It's no, it's what's Callaway's putter brands.
Odyssey, yeah. Yeah, yeah, Love it.
Absolutely love it. Good friend of mine that I play
golf with pretty regularly. He texted me, he replies.
Sent a picture to him, He texted me.
He's like, dude, that is going to look so good in your bag when
you're in the woods trying to find your drive.
Is it a mallet? Yeah.
Oh yeah. Yeah, so it's like the jailbird
or something. That's exactly it.
Yeah, Yeah. That's a good putter.
Yeah, I'm not a good putter, but I have a good putter.
Well, you've got a step one is believing that you're a good
putter, and Step 2 is practicing a little more.
And that's why I'm not a good putter.
Yeah, I mean, I got. 2 feet of snow on them.
Yes. See, Bill lives in a state where
you can play golf year round a little harder here.
Yes, yeah, it's true. It's true.
I did move to make that my reality, but there you.
Go. It's I don't know that that
we'll see if that was a good thing or a long, you know, long
term. It's I wish that there was more
industry around here. It's kind of hard.
You, like everyone where I live, is either an insurance
salesperson in financial services or takes care of old
people. Right.
Or as an old person. Right.
It's funny. Yeah, that's it.
Or as being taken care of. Waiting room.
You know that's the way it goes. Yeah, so, so, but you know, I
mean, so Speaking of this lazy thing, what watching my grandma
pass away made me realize it's like, this is not a unique
thought, but the amount of time and resources that is going to
be required to help the boomer generation pass away in a decent
manner is going to be insane. There is definitely a huge
investable theme there. It's kind of interesting that
that that like healthcare isn't loved right now because it does
seem like one of those 40 year runs and boomers last I checked
have a decent amount of money to spend on dying gracefully.
Have you ever have you ever looked at Care Trust REIT?
Ctr. I will check it out, yeah.
OK. Yeah.
Talk about that, Jason. That's one that you you have a
lot of conviction in. Yeah, I've, I've followed it
since it went public. It was spun out of Ensign, which
they're they operate nursing homes and seniors care
facilities. This is This is Tate, by the
way. This is Tate, I hope you're OK
being on YouTube sometime. Yeah, you're, you show up on my
channel all the time, don't you, buddy?
I cut myself. You cut yourself.
Uh oh, you need to. Can't see it, but I can see
that. Yeah, the people listening to it
on There you go. Yeah, it looks bad.
You might have to cut it off. You need a Band-Aid.
Yeah, no, I got it. You got it.
OK, All right, Say bye. Bye.
Have a good one. So nice to meet you, Tate.
So Ensign is an operator of like skilled nursing and seniors
housing facilities, that kind of stuff.
And they had a big portfolio, not big couple 100 units that
they owned and they spun it out as a read as care trust.
And one of instance Co founders was the CEO when it was spun
out. And the whole idea was we're
going to just deal with good operators.
We're going to find more opportunities to buy like the
two trends that were good for them are the aging right, the
silver tsunami, I mean just some specific numbers around that
from 2010 to 2040 or 2010 to 2030.
We're going to, we're going to move from I think 40 million to
80 million Americans over 65, right?
I mean, that's a massive shift. And the same period is going to
double the number of Americans that are over 80.
Like all of those trends are really big.
The funny thing is in that industry, the majority of the
inventory of those seniors facilities are small businesses.
Basically you've got, you know, a founder that owns the built
one and owns it, or you might have three or they may have 10
in two states, right? So because Care Trust started
from a small place with, I don't know, it might have been 100 to
150 when they were spun out. Those small deals can be, you
know, needle moving for them where for like the big players,
like the well towers, that kind of thing, there's little deals.
They don't move the needle. Right, yeah, that makes sense.
You can actually do a roll up and have it matter.
Yeah, yeah. And they have been pretty
disciplined capital allocators and they've also been really
smart about managing their balance sheet because the way
you grow a Reed is dead. And yeah.
Share issuance. Yeah.
So they've been really, really smart about that.
And they came through the pandemic, they were able to like
keep their, they didn't have to cut their dividend.
They paused growth for a year and a half.
And then they've raised it a couple times since then.
They're like, it's an ugly industry.
It's a it's. Horrible.
Yeah, the operators. Are sad.
It really is. The operators are garbage.
They make the the, the margins are thin.
They can't keep staff because they don't.
So hard to find skilled labor that is capable of taking care
of these people. There's going to be a massive
shortage. Maybe the robots bail us out.
Hopefully. I really think that's going to
be part of the solution. But but care Trust is one of
those like, you know, the the Amazon's founder, what's his
name? Bezos.
Yeah, Bezos is, you know, your margins, my opportunity thing,
it's that's not a space that anybody's interested in
competing in. And that makes it a good space
if you can find a really good disciplined operator and the
timing is right when you buy them when they are small and
there's an opportunity to roll up because nobody's coming in to
get the kind of margins that they're going to that they're
going to have. So those are those are the
stocks that I love to find. Yeah.
Well, it's, it's nice to have a true secular tailwind, Yeah.
And a reasonable valuation that that.
You got to get through the cycles too, though, right?
It's yeah, no doubt. Yeah, yeah.
No doubt. Oh, that's the joy of of
business and investing and not not puking when the cycle occurs
and convincing yourself that it's secular and not cyclical
and all these other things. Yeah, that's that's it.
I asked the question I'm trying to figure out for the Trade
Desk. Yeah, well, I don't have, you're
not coming to the right place for any insight on that.
I just know that guy did a podcast and I was like, this is
an incredible podcast. And then the stock absolutely
ripped and now there's questions about whether or not the
business is what people thought it was.
Yeah, yeah, I, I. I'm voyeuristic on
Constellation. My freaking Twitter feed is just
like full of constellation people I don't tend to interact
with. I mean.
I know so the software company, the Bran constellation.
Branch no the software. Company, Yeah, yeah.
I mean, like, you know, I'm friends with like Jerry Cap and
and Willis and these people that like have talked about it in the
past, but now I'm just like, it's just a tsunami of
constellation debates in my Twitter feed.
It's that and copper and I'm like, I don't I I mean I don't
know what I touched, but I touched something and I and now
I'm just getting this. That's so.
That's funny. Anyway, apparently according to
Druckenmiller, copper is the tightest it's ever been.
Now this video could be AI from two years ago or legit right
now, but I do know a lot of people are citing it.
Yeah, I mean metals, that's the thing.
Isn't that what the South Korean day traders are all trading
right now? It's so hot right now, Yeah,
it's like. Hansel, So you know what that
means. That means we should leave it
the hell alone. Correct.
You don't think that it means that we should jump in, right,
as all the companies are trading at like 3 times cash flow on
current numbers and we know nothing about the cycle?
You don't think that that's what that means?
Oh, that always works out, doesn't it?
Yeah, screens cheap, baby. Yeah, yeah, yeah.
Take your four. Take your 4-O1K money.
Yeah, cash it out. That's right.
Put it in a brokerage I. Learned that lesson the hard
way. Although I do gather that if
you, I I think statistically, if you were to buy something like
that that's cheap, and then you had like a technical overlay
that got you out, I think that that strategy could work.
Yeah. It's not exactly how I'm trying
to live my life. Well, but that's the thing.
You, I mean, you're talking about a strategy where you're
going in with a specific return profile in mind.
It's a finite investment. You're going to trade your way
out. Yeah.
And you're going to move on, right.
That's that's not how most people want to live their lives.
Yeah, I don't think so. Now, traders would say that
investors are just traders on a different time horizon, right?
But. Yeah, and it's true for the ones
that suck. Oh, snap.
Shots fired. Well, it's it's, it sucks
sometimes. I'm not going to.
Lie. Yeah, yeah.
For the bad for the bad for. The video two years ago.
It's just it having like a plan like that is just hard because I
think where people go wrong just generally as a species is like
you go in with a plan and then you don't stick to it.
Yeah. Right.
Like, oh, I'm going to get out at this price that gets to that
price and you go like, well, maybe I can get another 5% out
of this, you know, and then you stick around too long.
And end up looking at the ones that you sold and being like,
oh, I should have held them. Held holding some too long.
I don't know. The human part of the whole
thing is tough. Yeah, but it is.
It's what we all enjoy. Weird.
That's why we're here, yeah. That's right.
That's exactly it. Yeah, well, I'm, I'm, I'm a
little talked out. I mean, I can continue to talk
if you guys want to talk, but this is I feel like a good.
Place to. If you guys are good with it,
yeah, that's fine. Where can people find you?
Anywhere you get podcasts is the primary place.
Just search for investing unscripted.
We also have a YouTube channel. Those are the two primary
things. And if you find our podcast or
the YouTube channel, you can just look in any show note and
you'll find a link to everything else that we have going on.
But we're trying to grow the pod.
So we appreciate you having us on.
Bill, we're glad you came on our show.
So if people liked this banter, had a good time listening, check
out the podcast, listen to a couple episodes, share it with a
friend, give a rating, give a review.
That would be. That'd be awesome.
How's your YouTube stats do you guys?
Do you do well on YouTube? I don't do very well on YouTube.
It, it's, it's hard to say because we, we use it for two
things. It's, it's a place we put all of
our podcast episodes, but we also do short videos on stocks
that are sponsored by The Motley Fool.
We have a, a Jason has an affiliate agreement with them.
So it's a it, it's hard to parse out what is a, a really good
stock video that someone is excited about versus content for
the podcast. But if it leaves people to the
podcast eventually, that's a win for us.
Yeah, it's all on the channel. Yeah, it's, it's, it's it's
worth doing and for especially for people that are looking for
a little more for stock ideas, it's it's useful.
And but I would say in terms of like how people use it in the
real world that are looking for podcasts, it's probably 1015% of
our podcast traffic. That's still pretty good.
I think it's like 5% of mine or even lower.
Yeah. I just don't have many people
that that engage. But I do have a couple, like
rabid YouTube viewers. They comment.
And I appreciate you all. Thank you for wanting to look at
my beautiful face. I think that's the reason why we
don't have a lot of volume on YouTube is because they don't
want to see us. Speak for yourself, I am
beautiful. Well, at least you have a lot of
self esteem there is that. I actually, I think people, I
wish people watched the videos more because I what I've learned
listening when we edit and stuff is we'll take shots at each
other, as you noticed, and we're laughing and smiling, but
sometimes like it's under the breath laugh just come through
the mic because when we first started we would actually get
people. We, we've received a couple
emails from, I'm just assuming older gentleman and it's always
a gentleman, by the way, just statistically and this we, we
got like admonished a little bit like you guys really, you guys
should be nicer to each other, you know, and just they didn't
get the they didn't get the joke, but you.
Should be right back. You should write back.
We would be nicer, but we hate each other, right?
Yeah. It's hard to be nice when you're
across the screen from such an asshole.
That's right. That's why we do a podcast,
because we figured how can we introduce as much stress into
our life as possible? And we said we could do this
together. Yeah, No, that's.
Exactly. Right now we have a lot of fun
doing it. We do as as you can tell, we we
really do enjoy it. It's fun.
We we like each other despite the fact that we have to work
together to make the Do you ever?
Do you ever get a little nervous like I, I don't know.
I don't do my own stock pitches very often anymore.
I didn't love, I didn't love the the feeling that people were
hanging on it. And then I didn't like when
things went wrong, people asking me whether or not they should
sell. I said I told you not to listen
to me in the first place. I wrote my first article in
2012, Bill. I'm so thick skinned about that.
At the at the end of the day, like I get it, especially for
new people that just don't know and they're naive, but at the
end of the day people have got to take some fucking personal
responsibility for stuff. Yeah.
Yeah, we're also pretty, I think we're pretty careful about
stopping short of making it seem like it's something you should
go do. Like we'll say what we think,
we'll share our conviction, we'll say like I, I think this
is a market beating stock over the next five years, but at
least. We're not over the top.
Pound the table, Yeah. Yeah, and we've also done a
decent amount of videos and talked a lot on the podcast
about all the times we've been incredibly wrong.
And I think part actually just going back to the whole like,
yeah, mostly me, right. Yeah, as we've established.
But even going back to the, you know, giving each other crap and
making fun of each other, I think that just, I think that
actually helps the whole like, look, we just like this.
We're not, we're not saying we're right.
Like this is what we we talk about what we do in our own
portfolios too. So there's a little bit of, you
know, money where our mouth isn't in some sense.
Like we'll talk about stocks when we bought them, how they
did, if they didn't went down poorly.
We talk about our losses all the time.
So, yeah, but I agree with Jason, like at some point, you
know, if you're if you're buying a stock just because you heard
anyone talk about it, you know, unless you're like paying for
like a research service or something like that where they.
Even then, you don't know when they're going to sell.
True, but also even then, but like at least at that point,
you're going into that knowing This is why I'm paying for this
thing. But if you're just finding a
podcast, a YouTube channel and someone saying that they have
high conviction in a stock, I mean.
We're talking about incentives, right?
That's, I mean, the, the bottom line is that it's an attention
economy and the incentives for so many people making content is
for more people to see it because that's the monetization
engine, right Well. That's the other way.
Well, that's the thing about YouTube.
I mean, we, I won't say what tickers, but we know if we do a
video on certain stocks, it'll get thousands of views no doubt.
And it's always the same couple and it's never usually ones we
highly recommend. But we could talk about Care
Trust REIT all day long and ain't no one clicking on that
so. Well, there's probably some
signal there. Yeah, that probably means it's
good. Yeah.
Yeah, Yeah. All right, gentlemen.
Well, thank you for stopping by. I hope that.
I hope people enjoyed the conversation.
I did as I as did I the last one which is why I wanted to have
another one with you. This was fun.
Hopefully we make this a semi regular thing.
I don't want to see you guys too much though, that would be
upsetting. Oh yeah, I agree.
I agree. No, I mean.
Mostly Jason, Jeff, you're invited back anytime.
I appreciate you. Jason gets up and leaves.
That's I I got rude. In sometimes.
'S home these times. I got up and left.
It's absolutely true. Bill, he's old.
He's got a small bladder. That's fair.
OK, I will forgive it. That's.
True, Bill, this was a lot of fun.
And yeah, I just, I'm going to promote our podcast too.
It was a lot of fun having you on folks come over and and and
check out our conversation with Bill over there that it's great.
I hope we do get to come back on more often and talk about more.
You did not ruin future invites, despite your rudeness.
Despite my best efforts. Yes, correct.
All right, guys. Have a good one.
Thanks, Bill.