8-15: Evaluating Stocks, Startup Techniques

hey everyone hope you're doing well on this beautiful Thursday I am Martin scy and I'm here to help I guess answer any questions you have about startups investing and maybe show you how I invest some techniques um I hope you can hear me [Music] okay chat what's going on Nick what's up check check check okay um all right what's going on Vinnie Charles Enthusiast Cole Ken uh lame uh Noah Beantown schmoody um I think academic Finance is important I mean pretty important field o Bob [Applause] all right um let's see here [Applause] [Applause] iance for where is San Carlos California anyway all right three billion market cap $10 300 million shares outstanding that's three billion iovance a midsized biotech company uh let's see 229 million in cash another 800 183 million in cash um so around 400 in cash they actually have a bunch of equipment [Applause] interestingly um Yeahs is crazy right that was just yesterday we were going to look at it um I don't know if you can buy a um Private Stock is non accredit investor in in a big company like that um it's iovance it's on the screen uh can you guys see it yeah you should be able to see it um three billion doll market cap um depreciation is just usually just straight line you know there's rarely salvage value of assets um I mean this doesn't really matter for most publicly traded companies um you want your forecast to be perfect you have to know the exact equipment things like that you could do it as a private company maybe all right does iance have debt yeah 1 million not much okay so basically no debt so around a 2.8 billion Enterprise Value I did want to mention um since I mentioned not just stocks but startups there's great tool I use they're not paying me or anything they should they should uh called crunch base um it's a really great tool um I think you should uh try it out if you haven't it's actually got some free features and the paid version is pretty cheap and I use it to look up investors especially so like if you're I don't know let's pick a recent startup here we go figure figure is 70 million and I will look at something like this like who is Parkway Venture Capital never heard of them they've only made 49 Investments that's not a lot but if you look at some of these other ones like here's a angel investor Angel Investors are usually much easier to get a hold of um these are a lot of like not well-known investors um I don't know I don't know these guys but they've invested in a lot of companies 172 I know a few of these guys but I don't know these guys really small 22 investments in Brooklyn and sometimes it's a lot easier to get a firm like this to invest in your company than maybe a6c or seoa or something like that so just something to kind of think about um yeah I'm not looking for sponsors I don't need sponsors um or ads that's why people watch me because I've actually done it anybody who needs a sponsor or an ad is uh a faker [Music] um I don't know cre Therapeutics I don't care about Bitcoin miners is this the basos funded one gene therapy has just been a [ __ ] BST man Nash gene therapy come on 270 I mean this is a crossover right these guys will be public very soon I assume patient Square Capital literally have not heard of them I wonder what that is patient Square Capital who the KKR guy yeah big team huge team these guys want to be like orbey meded I wonder how much Capital they do have Apollo Therapeutics also led by this firm interesting so it looks like they do PE and just like private maybe like growth capital okay first fund four billion not that big largest private first time private Equity Fund Ever Raised yeah sounds about right six billion AUM interesting patient Square Capital all right thank you for that heads up okay anyway um I Consultants can be valuable oh Korea is of V's brother that that that makes sense I remember when they started this okay so iance has a product approved it's called m tagv i remember when this lless lell was in clinical trials it's selling pretty well M tag V LIF ilel okay so this is for nooma look at the label monitor patients are cytopenia and internal organ Hemorrhage lovely impatient lus means comes from the patient so they take your blood accelerator approval based on response rate so these are for people who failed Kuda so second line metastatic [Applause] melanoma cellular therapy administer lymphodepleting regimen oh okay so you got to wipe out the blood cells replace them administer wow okay it's like a whole regimen so it's made for each patient and you got to give Isle too so you got to give cyclophosphamide you basically have to wipe out the bone marrow and tag the [Applause] it's amazing you have 8% chance of dying just from taking the drug he is a strong sucker 156 patient trial okay so they take the patient tumor for [Applause] [Applause] okay it's 23 days about 34 days to create the drug so you have melanoma you're dying you go to the doctor he says I need a cut piece your tumor I'm going to send it to the lab they're going to make a drug just for you in 34 days the future is here um kind of amazing 32% have response that's not that good only three 4% have a complete response complete response is what it sounds like a full remission but the duration of response is pretty good looks like half the patients have a decent response [Applause] so yeah I would I mean the response rate is low for sure 32% but if you're dying and you basically have at this stage where you've metastatic Moma failing Kuda I mean what do you have months to live you know you don't have a lot to do at that point right um so so you have a 30% chance of response and about a 50/50 that that's going to be any good for you median potential followup for dealers is 19 months that's a little to me that's a little sus because the range here says that it's about 50% at 6 to n months but regardless it's a drug it works and it's I guess selling this was this the first quarter of sales let's see I bet you it's a zillion dollars they have an interim CEO [Applause] okay do they sell for Lucan they actually have pran I wanted to buy that drug too when did they get prucan got to buy that thing raise it up okay there's the approval February It's Tricky they have to like get all these centers to [Music] actually do the work to administer the drug it's usually quite expensive looks like this is probably like a front line study or something I mean the checkpoint inhibitor is doing most of the work here and lung cancer is like the big indication probably endometrial endometrial cancer um couple of new potential drugs including a different aisle too so this will be interesting [Applause] [Applause] [Music] [Applause] [Music] the cost of goods is higher than the revenue that's pretty pretty rare uh for anybody that doesn't know so I wonder what the margin at some point will probably get better that's a little bit odd [Applause] [Applause] yeah I would think that over time the margins will be in the 50s to 70s or 80s we know from Kay and those other cell therapy companies Jun know was it for okay so they didn't really have Revenue in q1 so all of this revenue is from M tag B is from this quarter so 13 in Revenue unlike most drugs there's no stocking here right so all of that revenue is demand um but you would still think there's some like pent up demand for people who wanted that treatment although they wouldn't be living that long to be pent up this is I'm just trying to gauge how popular the drug is and we have to look at other cell therapy companies to get a sense for how well those drugs are cuz they's still pain in the ass to administer oh this is definitely one commercial launch worth watching I think probably a lot of the value is going to come in the other indications a beckma is not autologus though right it's off the shelf so beckma just works this is like you got to go make the drug just for Mr Smith or Mrs Williams and they wait for the medicine and it costs a fortune let's see how much it costs actually and tag V price half a mil yeses so let me get this straight this thing is half a million bucks and you've got a 30% chance you got a 30% chance no this is a you got a 30% chance of getting a response oh yeah you're right yeah you got to collect the blood go to a special lab so $515,000 30% chance of it working at all so it's really like $1.5 million to extend your life for six months life is the most valuable thing we have so I'm going to look at um other I'm going to look at the other indications at some point just kind of like get a sense for the efficacy potential in like lung cancer because that's also a big indication be curious what the margins longterm look like probably would be fine you could see it being a decent long possibly I have to keep thinking about it all right somebody asked for Google on the godell platform so I have to listen to the godell people first sorry guys it's my customers okay let us look at the goog I update goog fairly regularly so oh I did not update Q2 alphabet investor liity relations me see here 163 this is not right why are so many CEOs Indian um they work hard man they're really smart they work hard American dream indian-american dream okay so let's do balance sheet for Google look at the capex for Google they've gone from having 100 bill in equipment to 150 that's including depreciation you know they have this uh recent ruling where they potentially will no longer be able to pay Apple for placement product placement I think it's kind of [ __ ] I mean I'm anti- regulation anti- um very anti Anti-Trust um needless to say and I don't think we should break up monopolies just because they're monopolies why punish people for doing their job well that to me is crazy yeah I agree that these bigger companies have risk averse CEOs that's why people like SAA and um Mark uh Zuckerberg are very unusual you know they're really remarkable Risk Takers um I'm just going to hard code this in for a second okay so Google last quarter through 14% I have to go back a quarter real quick it'll only take a second I promise yeah so so Google's um old CEO Eric Schmidt recently um said that the reason the company hasn't been doing well is because of the remote work and pay time off which I completely agree with I think remote work is a non-starter and they basically he was basically saying they they the company no longer has that dog in them and they remove the video from the internet because that's the kind of [ __ ] Google does but he said it he can't take it back I think there's uh a lot of Truth to what he said and you know in generally the bigger the company the lazier it gets you know that's pretty typical it's hard to have that entrepreneurial Drive um what the heck let's look at cash flow you know they call me Fidel cash flow sometimes they call me that you may call me that as well [Applause] Chad is that real chat I have to be like Aiden [Applause] Ross the chat is going crazy right now it's hard it's hard to make financial analysis that fun and that sexy it really is it's just not that easy are these numbers for real right now can you believe this 16% growth whoa that's crazy Bros Kramer you know is the one guy give him credit you know that could kind of make it interesting but you know whole stick was um you know a little bit I don't know not contrived but like maybe even ill informed like you just like you could tell he doesn't know every stock which it's a little foolish to even suggest you could know every stock because like I don't know in my field like I know a lot of stocks in biopharma but it's hard to stay that current on them unless you're like looking at them all day and I know he works really hard and everything but I don't know entertainment is a distant goal for me I'd much rather you be rich than entertained or learn how to become rich because I'm not going to do it for you but I'm happy to share what I know [Applause] notice Google hasn't made a substantial acquisition in a long time I think it's because I mean they considered right uh apparently buying Hub hub spot which would have been interesting they're spending their Capital as you can see here on stock BuyBacks they've put 100 billion in a stock BuyBacks these last seven quarters 100b and they've paid some dividends not much in the dividends it looks like actually they stopped paying dividends I don't get it chat I don't get it okay so trailing no that's single quarter fee cash flow wow okay so TTM FCF trailing 12 months free cash flow it's a pretty good metric I think um it's been pretty steady if you look at that chat take a look line 94 you see that been pretty steady you know the company's been trying to invest um in capex you can see that like from 2022 to 2024 you know it's sort of been this steady 60 to 70 billion this number looks like suspiciously the same almost looks like what are the odds that all three quarters would be 69 495 together that's like impossible what a coincidence these are like all different numbers how crazy is that chat how crazy is that is there any explanation for that wild like how unlikely let's look at the decimals well I didn't have they don't have decimals so they're exactly the three same numbers that's pretty crazy you never see that um all right let's go start looking at the actual [Applause] situation disaggregated Revenue Google search 48509 and so search is growing you know GPT chat GPT was introduced so would you say some point in this period right and I have like the other traffic data and I can tell you from that traffic data as well as this Revenue data like ain't [ __ ] changed for Google um YouTube also growing rest in peace to uh Susan you know if you guys didn't know Susan one of the the great business women in history um you could skip this Sor sorry for the ad I'm on my the other Google account has no ads is a devastating the TCH Community is mning a devastating loss Susan wki the former CEO of YouTube has died at the age of 56 after a battle with lung cancer and her husband Dennis troper takes to Facebook to announce the sad news he writes alongside pictures Susan it is with profound sadness that I shared the news of Susan Wy passing my beloved wife of 26 years and mother to our five children left us today after 2 years of living with non small cell long cancer he continues Susan was not just my best friend and partner in life but a brilliant mind a loving mother and a dear friend to many her impact on our family and the world was immeasurable we are heartbroken but grateful for the time we had with her please keep our family in your thoughts as we navigate this difficult time Susan joined Google in 1999 years before it was acquired by YouTube in 2006 she got that backwards maybe in 2014 she became the media Company CEO leading the charge of video sharing on social media and after 9 years in the position Susan down in 2023 to focus on her quote family health and personal projects according to NBC News and was replaced by YouTube's current CEO Neil Mohan following the news of her passing Neil also expresses his condolence yeah that guy's voice is annoying but rest in peace Susan Tech Legend one of the uh I want to say first employees at Google there she is number 16 I keep track of all the Google employees Susan wety um uh Marissa uh these guys I both know this guy just got reacquired Jeff and Naran nanan so yeah one of the first uh employees over at made a very special company all right so gcp Google Cloud still growing um other bets and hedging okay Tac is traffic acquisition cost pretty important stuff to look at also want to see the [Applause] geography and I want to listen to the conference call for advertising still most of Google's business what are the real big threats to search GPT which Google I think is completely neutered they have their own sort of AI search they're very good at AI despite all the [ __ ] we talk you know they invented half of AI so I think they're going to be fine they're not that great at product anymore but at the end of the day it's very it seems to me very unlikely that there's going to be you know some interloper that comes out of the woodwork and beats Google here's Tac so I guess the idea is like is this where the Apple payments come out of it should right traffic acquisition cost paid to distribution partners they pay Milla they pay Apple that's their main cost of goods right otherwise they would have no cost of goods I like Intel I don't know if it's a buy right now but I do do like Intel ibrx looked really interesting to me actually um I don't I can't say I really like it or anything but um I'm looking into it I don't know zica I haven't looked at that in a long time I can look at it later so buying characters really interesting move for Google um I don't know Starbucks at all I think the character Acquisitions really fascinating they're paying like two billion it'll come out in the cash flow statement I think next quarter if they close the deal character AI so they're changing their CFO too [Applause] [Applause] [Applause] I'm not sure on iance I I only looked at it for a few minutes so in terms of the TTM FCF that's one I want to talk about real briefly so the Enterprise Value chat is roughly two trillion um goop just doing good um so 70 that's around a 27 28 times earnings but that's with a lot of capex that may roll over and not be spent again so that's kind of one way to think about that yeah I talked to nalia of course it's on our website um I talk to most of the famous investors and founders just because somebody's famous doesn't mean they're good by the way nval is very good but you got to decide Whose advice you want to take and for what topic and for me it's just you know information to integrate into your own thinking process goo Google same thing Okay let's listen a little welcome everyone thank you for standing by for the alphabet second quarter 2024 earnings conference call at this time all participants are in a listen only mode after the speaker presentation there will be a question and answer session to ask a question during the session you will need press star one on your telephone after now conference over your speaker today Jim freedland director of investor relations please go ahead thank you good afternoon everyone and welcome to alphabet's second quarter 2024 earnings conference call with us today are cinder Pai Philip schimler and Ruth par now I'll quickly cover the Safe Harbor some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties actual results could differ materially please refer to our fors 10K and 10q includ the risk factors we undertake no obligation to update any forward-looking statement during this call we will present both Gap and non Gap Financial measures a Reconciliation of non Gap to Gap measures is included in today's earning press release which is distributed and available to the public to our investor relations website located at abc. XY zinvest our comments will be on year-over-year comparisons unless we State otherwise and now I'll turn the call over to thank you Jim and hello everyone I'm really pleased with our results this qu they show tremendous ongoing momentum in Search and great progress in cloud with our AI initiatives driving New Growth search had another excellent quarter and in terms of product Innovation we are seeing great progress with AI abuse in Q2 Cloud reached some major Milestones quar revenues cross the $10 billion Mark for the first time at the same time pass the $1 billion Mark in quarterly operating profit year to date our AI infrastructure and generative AI solutions for cloud customers have already generated billions in revenues and are being used by more than 2 million developers as I spoke about last quarter we are uniquely well position for the AI opportunity ahead our research and infrastructure leadership means we can pursue an in-house strategy that enables our product teams to move quickly combined with our model building expertise we are in a strong position to control our destiny as the technology continues to importantly we are innovating at every layer of the AI stack from chips to agents and Beyond a huge strength we have committed to this leadership long term this was underscored by the announcements we made at IO Cloud next and Google marketing live and we'll touch on many of them here today I'll start with search then move to our AI momentum more generally followed by Cloud YouTube and some closing thoughts let's dive in over the past 25 years we' have continue to reimagine and expand Google search across many technological sheds with AI we are delivering better responses on more types of search queries and introducing new ways to search we pleas pleased to see the positive Trends from our testing continue as we roll out AI overviews including increases in search usage and increased user satisfaction with the results people who are looking for help with complex topics are engaging more and keep coming back for AI overviews and we see even higher engagement from younger users age 18 to 24 when they use search with AI obuse as we have said we have contining to prioritize approaches that send traffic theise across the and we are seeing that ads appearing either about or below AI overs continue to provide valuable options for people to take action and connect with businesses Beyond ai overviews ai expands the types of queries we are able to address and opens up powerful new ways to search visual search via lenses one soon you'll be able to ask questions by taking a video with lens and already we have seen that AI overvie in lens leads to an increase in overall visual search usage another example is circle to search which is available today on more than 100 million Android devices we are seeing tremendous momentum from our AI Investments more than 1.5 million developers are now using Gemini across our developer tools and we recently unveiled new models that are more capable and efficient than ever Gemini now comes in four sizes with each model designed for its own set of use it's a versatile model family that runs efficiently on everything from data centers to devices at 2 million tokens we offer the longest context window of any large scale Foundation model today which Powers developer use cases that no other model can handle gerini is making Google's own product better all six of our products with more than 2 billion monthly users now use jyna this means that Google is the company that's truly bringing AI to everyone G ispiring incredibly helpful features in search workspace Google messages and more at iio we showed new features coming soon to Gmail and Google FS soon you'll be able to ask for questions like what did I eat at that restaurant in Paris last year for a glimp of the future I hope you saw Astra at I it shows multimodal understanding and natural conversational capabilities you've always wanted to build a universal agent and it's an early look at how they can be helpful in daily life our AI product advances come from our longstanding foundation of research leadership as well as our Global Network of infrastructure in Q2 we announced our First Data Center and cl region in Malaysia and expansion projects in Iowa Virginia and Ohio our tpus are key bet here too Trum is the sixth generation of our custom AI accelerator and it's our best performing and most energy efficient TPU today it achieves a near 5x increase in feed compute performance for Chip and A 67% more energy efficient compared to TPU b5d and the latest Nvidia Blackwell platform will be coming to Google cloud in early 2025 we continue to invest in designing and building robust and efficient infrastructure to support our efforts in AI given the many opportunities we see ahead of course as we do this we'll continue to create capacity by allocating resources towards our highest priorities we are relentlessly driving efficiencies in our AI models for example or the past last quarter we made quality improvements that include doubling the core model size for AI overviews while at the same time improving latency and keeping cost per AI overview sell flat and we have focused on matching the right model size to the complexity of the query in order to minimize impact on cost and latency separately on our real estate Investments we are taking a measured approach to match the current and future needs of our hybrid Workforce as as our local communities next Google Cloud we continue to see strong customer interest wining leading Brands like Itachi Motorola Mobility and KPMG our deep partnership with Oracle significantly expanded our joint offerings to their large customer base our momentum begins with our AI infrastructure which provides AI startups like essential AI with leading cost performance for models and high performance Computing applications we continue to drive fundamental differentiation with new advances since Cloud next this includes Trillium which I mentioned earlier an A3 Mega powered by Nvidia h100 gpus which doubles the networking bandwidth of A3 our Enterprise AI platform vertex helps customers such as Deutsche Bank King Fisher and the US Air Force built powerful AI agents last month we announced a number of new advances Uber and wpp are using Gemini Pro 1.5 and Gemini flash 1.5 in areas like customer experience and marketing we broaden support for thirdparty models including anthropics CLA 3.5 Sonet and open source models like Gemma 2 llama and mistol we are the only cloud provider to offer grounding with Google search and we are expanding grounding capabilities with moodies msci zoom info and more our AI powered applications portfolio is helping us win new customers and drive upsell for example our conversational AI platform is helping customers like Best Buy and Garden Food Service Gemini for workspace helps click Therapeutics analyze patient feedback as they build targeted digital treatments our AI power agents are also helping customers develop better quality software find insights from their data and protect their organization against cyber security threats using Gemini software engineers at Vio are using Gemini cesses to develop test and document software faster and data analysts at merar Libre are using big qu and looker to optimize capacity planning and fill shipments faster cyber security risks continue to accelerate and the number of reaches continue to grow something we all see in the news every day and that our M teams help manage a strong track record of uptime quality control and reliability May Google Cloud The Trusted security choice for organizations like Fel and Mar International in Q2 we infused AI throughout our security portfolio helping tell us strengthen its proactive security fure turning next to YouTube YouTube is focus on a clear strategy connecting creators with a massive audience and enabling them to build successful businesses through ads and subscriptions while helping advertises reach their desired points we had a great brandcast this quarter in Philip same I'm pleased at the progress Here YouTube is remained number one in US streaming watch time according to n use of YouTube shots and connected TVs more than double last year and we are making it easier for creators to add Cs and turn regular videos into shorts next on Android and pixel we joined Samsung for the Galaxy unpacked event a few weeks ago and we shared that Samsung's new devices will include the latest AI powered Google updates on Android it was a great event I'm looking forward to our made by Google event happening in August we'll have lots to share around Android and the pixel portfolio devices our pixel line is doing well we recently introduced a new pixel a part by latest Google 10 surgy feature it provides beautiful AI experiences like Circle to search best tap and a Gemini power AI assistant in other bet I'm really pleased with the progress B is making a real leader in the space and getting R revenues from users weo served more than 2 million trips today and driven more than 20 million fully autonomous miles on public grows weos now Gathering well over 50,000 weekly paid public rights primarily in San Francisco and Phoenix and in June we removed the weight list in San Francisco so anyone can take a ride fully autonomous testing is underway in other Bay Area locations without a human in the driver's seat before I close I want to acknowledge that today is R's final earning score let me take a moment to thank her for all she has done for Google and alphab as um somebody asked if everything's priced in in the stock market well uh I think that um yeah investing is tricky there's a lot of benefits to studying companies independent of whether or not they're it's priced in or not obviously if you're solely an investor that's largely all you really care about but let's say you're an investor in um just AI or search or software in general you probably have to pay attention to Google if that makes sense um you know so that's sort of the first thing there um it's a good barometer for all of Tech you're right that a big market cap stock like this is fairly well um arbitraged so my quick and dirty numbers tell me the Stock's worth 161 and the Stock's trading at 163 obviously my forecasting ability isn't that specific and sensitive but it kind of tells you that the markets assuming this kind of uh thing will happen now I do think it it looks sort of attractive because in my model starting in 2030 the business goes into decline which is probably not going to happen my guess is there'll be some growth instead and that gets you to 230 which is you know quite a bit more than 160 but you're not going to make a fortune with Google um that's a 40% return or so um you know the discount rate um you know is it's something you can decide for all your other equities um I kind of feel like if the 10e is trading at 4% maybe 8% is still a little too conservative maybe seven or seven and a half is more likely and I think the risk for Google is kind of way to the upside like I do think that they'll continue to grow um I don't think the risk is way to the downside where you know um as much as I like perplex and open ai's product and claud's product uh anthropic product you know it it it still feels like Google's not going anywhere you know if Apple did search that would be interesting but Microsoft tried with Bing and couldn't get anywhere Google responded very quickly in search um and their product right now is pretty good so Cloud for Google I think is going to could work out with tpus it's one of the few serious competitors to Nvidia um they haven't done a great job of evangelizing tpus but given nvidia's success like it could be like another trillion for Google's market cap it's like the risk seems to be weigh to the upside but it's still a very big company that's not going to [Music] be not going to to be moving like a swift small company right um I also think they they can it's weird like they're not a very honest company in the sense that they'd rather you not use their AI stuff and they'd rather not give it to you they only started to do that when they were pressured by open Ai and other companies meta specifically and so now we have some open source products from Google but they'd rather kind of keep it in house and that's the sort of the character AI story and sort of the um llm story in general right Google had llms before anyone um and I actually briefly hired one of the guys involved in that kind of [ __ ] show um I think it was called Lambda at the time now it's called Gemini but um the first Google l that people thought was like alive um so again too it's a little hard to foresee too much but this big capex spend that they've had like you could argue okay like look at this capex chat um they kind of started this boom in 2022 and I guess like they tapered a little bit but like assuming this I don't know maybe it's like it should be 80 or 90 I don't know that's kind of what I'm thinking in which case it's like somewhat attractive like it's fairly I'd rather buy it you know if I could buy it at 130 or something that'd be like the dream it's just hard for them to grow that fast like you can see the last two two years have been pretty tepid and it's sort of a recession it would be kind of a problem stock in a recession like they could have in 08 I think they had still did they grow an 08 I forgot that's actually a good thing to look at I think they did grow an 08 but was still a much smaller company then I don't like SAA I've said that many times I think he's kind of a fool um so if he gets replaced at some point I do think that would uh be bullish they need an agile leader you know they're very risk averse like very very risk averse so it seems like a decent holding for portfolio but it's not the kind of thing that I'd be jumping up and down about buying um you know you could make the case if they make some really great Investments if they grow a lot faster for some reason you can get a double which is a lot for a big cap stock like that um can you get to four trillion yeah maybe but it's going to require quite a good outcome for them and I think they're delivering right so I think the made lever they can pull his tpus if they can make tpus like Nvidia uh as success as exciting as Nvidia I do think that you know Cloud This Cloud business can be as valuable as Nvidia by itself um that's something that people don't understand YouTube could also be monetized more effectively and I think they're doing that but it's not going to move the needle that much um same thing with weo like Whos really amazing company and interesting but like what's the most it could be worth 100 Bill 200 Bill like does that really move the needle for two trillion not really um 51% and don't forget grock is out there with AI and and that's a threat meta is out there with AI you could see people doing Google searches on meta I guess a little bit more it's kind of this weird thing where because of the lock in on these devices there is some serious risk for Google there but I think most people are going to search with Google regardless yeah I think it's okay it's like this this sleepy giant if if the market sells offer something you get a chance to buy much cheaper it's you know could could be attractive but let me reset some of these numbers to something more realistic to zero so seven's fine I guess okay uh okay so 20% upside in [Applause] this okay let's see what else godell wants me to look at ACB is that the Cannabis company uh there's some biotech ones here ZM that's Zoom kind of want to look at Zoom rocket for sure me that's 23 and me um which of those should I look at I think I I want to look at Zoom so Zoom is a weird weird software company I kind of consider them to be an Enterprise company um 58 bucks a share by the way all these models are available on my GitHub uh terminal value depends on the company right so like I want to for a certain company like a drug company they have very rough terminal value it's sort of ends for a software company depending on the kind of software the terminal value can be pretty good um like Google's you know going to be around a long time no matter what happens yeah I I don't know the meeting space that well um obviously like everyone else I use the product but that's not in and of itself enough to have an opinion this is like one of my first times ever looking at Zoom okay it looks like 18 billion market cap pretty big market cap not a small company this Zoom do you remember in Co when the stock just went crazy that was wild right chat oh they have a ton of cash holy [ __ ] I need that ton of cash wow no debt so it's really like a 10 billion do company is this real chat can you believe that 18 billion market cap with 8 billion in cash what that's crazy I can't believe that that means when I buy the stock half of it I'm getting is cash I know wow it's like great downside protection but you also don't get that much beta if that makes sense okay here's the revenue pretty slow growing company [Applause] we'll look at a cash flow stock base comp all that stuff in a second I don't know what calendar quarter this is I'm just going to do put it over here [Applause] [Applause] I can't type today at all I had a beautiful woman over last night I that's probably the first time in I don't know I work too hard weeks months um and I even got some champagne not cap it's not cap at all don't don't do that to me McNugget don't do that not capping it wasn't AOC come on beautiful women can't resist the nerd you got to see me all swaave with a deep voice what's up baby it's big scr yeah um yeah no petruse this time but but we had a nice bottle of champagne and I'm still feeling it a little bit I don't drink much these days um but a lovely young woman you know I answer all kinds of questions like Skelly why are you so great well baby girl you know I'm just that guy I'm him himothy um it's not that important though um let's talk about I'm just telling you why I can't type today you don't need to know about my personal life that's my personal time bro please give me some space bro [Applause] I'm just a little slower than I normally am alcohol does that to you I think imagine if it was Kamala Nancy Pelosi let's go I'm getting those stock picks I do whatever you want for those stock picks [Applause] girl tell me what you long okay so Zoom a billion a quarter looks like 200 in reeven in earnings cash flow could be wrong but just off the cuff oh could be cheap I like this I like it it's a sleeper stock it's beat up down depressed nobody cares about Zoom just a [ __ ] [Applause] dog oh man I love the godell the god delians this guy asked me to look ATS two days ago and you know it's not my day job to look at stocks I just do it for you guys uh my day job is writing software like um give you an example um um yeah here I'm just writing software all night um this is a program I've been working on for a long time and um that's what I do for living that's my day job and I help create godell of course with my amazing team of Engineers but you know looking at stocks isn't my thing so anyway the story is this guy is like hey look at this stocks and I'm like okay okay and I'm working working I'm like finally I have to go to work I have to rest I have to do something else I can't look at stocks like 10 hours a day anymore because I'm not a professional investor anymore and he says look ATS and that was the last one that I just missed and it's a [ __ ] 45% today I was like oh I never heard of this company looks interesting so the godell Chad is on fire the other guy recommended Chipotle which made a lot of sense I wish I made that trade because the CEO of Chipotle left to become the CEO of Starbucks which is a major upgrade and it almost so so Chipotle stock went down but it's actually bullish for Chipotle that they had such a damn good CEO that Starbucks wanted him it means like their operations have to be really great and it's not going to like fall off a cliff because he leaves um It's actually kind of to me at at worst neutral but it's actually kind of bullish because you never want great talent to leave but it's still like strip's cool um yeah I don't know the numbers on stripe but you can definitely buy the stock um it's out there um there's accredited platforms uh what am I I'm a part of one of them called Hive um let me see if I can get the on hive I forget which of my accounts I'm logged into here but like I'll find it real quick but I like Hive again none of these companies pay me for promotion not that they would but okay yeah I use this one for Hive so you can actually buy androll you know all the really cool companies with hive yeah I buil Odell with my my colleagues um I can't log in for some reason but they're actually a broker dealer too which is interesting someone said I should write a Pharma investing book I wish I had the time I don't any time to write books yeah I don't know if I have the right Hive thing I want to see if stripe stripe should be on there stripe will go public too at some point okay yeah I can't log in but you should be able to create um a hive account I think you might need to be accredited but I'm not sure so let's keep looking at Zoom um day trading is really difficult I don't know that I would uh um do that I write a lot of software brother they test me don't ever make me mad that's the number one thing you should never ever do we have like every data vendor that you would expect direct uh exchange relationships Etc I thought lxrx looked really interesting actually yeah explain higher order functions stop I explain everything don't [ __ ] with me talk about functional programming first class functions talk about recursion complexity come on by the way not everyone's a computer scientist monads monads I know monads from math and computer science you guys sleep on scr bro you don't ever sleep on scr [Applause] I was writing lisp in jail and I could tell you how to hustle on the Block yeah the accredited investor thing is kind of [ __ ] you can par up here sure we do it godell does it ny's old lady she's going to be attracted to different types of [ __ ] you know you gota you got to end with Nancy Pelosi you got to be real sharp how you approach [Applause] link lists uh B trees uh there's tries you know if you know the try data structure this is one of my favorites I've been doing some Quantum Computing data structures those are really interesting hadamar Gates Tor you have all these interesting operations Ein Einstein matrix multiplication at the end of the day a lot of this stuff doesn't matter I mean if you're writing react like literally like the core the core Library it [Applause] matters but if you you know it doesn't really matter if you're creating some kind of front end or something you know and you know look I mean a lot of the advantage in technology is just quick product iteration not so much um yeah uh B I don't know who you are but you know you don't come into my chat room testing me I was one of the first react users I heard Facebook react dudes I can you know when they when they Chang the Dom they ask me first they asked me first right get element ID get element by ID I made that I made that they asked me I'm just joking around obviously Brendan Ike that's my homie Kanye West that's my homie web RTC one of the first users kubernetes one of the first users Docker we made Docker before Docker they copied us you get me all [ __ ] up right now you turning me back to the old scr man turn me back to [Applause] that uh I invest a little bit but I mostly focus on my own company Bridge capital or Bridger capital I think Bridger capital is closed now I'm not sure though [Applause] okay so cash flow for three months Ed was 600 obviously that's not annualize um or Zoom would be the cheapest stock on the face of the Earth but maybe it is we'll keep looking [Applause] [Applause] okay okay so they called this that's August 21st that's next week they call this first quarter fiscal 25 for pretty amazing margins this could be a huge long I'm loving it and it's not even McDonald's I'm hungry this is really cool yeah this is a press release Big O notation little O notation Quantum complexity is what I interested in all that [ __ ] is [ __ ] Quantum Zoo this is Scott Aronson well this is a different guy Stephen Jordan but these are you want to do some real mine [Applause] [ __ ] here's is this Scott arenson one of these is Scott Scott Aron you want to talk about real crazy complex here he is Zookeeper Scott arenson all right wrong one although this one looks interesting too counterfeit coins suppose we are given n coins K of which are counterfeit the real coins are all of equal weight and the counterfeit ones are all of some other weight we have a pan balance and can compare the weight of any subsets of the coins any pair of subsets of the coins class Bally we need Omega K log n over K weightings to identify all the counterfeit coins we can induce introduce an oracle Oracle such that the Hat given a pair of subsets of equal cardinality it outputs one bit indicating balance or unbalance building on prior work they have shown that on a quantum computer one can identify all the counterfeit coins using Big O K to the one4 one over four which is the quad quad rot I guess uh the core technique behind the speed up are amplitude amplification and The Bernstein vasani algorithm so in Quantum Computing there's a very important thing called amplitude uh which I won't bother talking about but lots of cool things that change in Quantum Computing now Quantum Computing is still largely theoretical but uh still amazingly mindbending to study if you haven't read this book um I was actually talking to the chick about it last night uh Quantum Computing since democratus um probably one of the best books I've ever read really Advanced took me years to read um I think Scott is one of the smartest guys in the world um there's some wild stuff in here about like like I said time travel and stuff like that but no I don't want to retire um I should have this book on my here is I've got it on my desktop sorry Scott love you man Scott Scott is in open AI now which if that's not interesting enough I don't know what is there's some interesting problems here I'll walk you through a few of them [Music] all these like complexity classes like P space um time travel is funny okay here's the puzzle Dr eil is on his moon base and he is a very powerful laser pointed at Earth of course he's planning to obliterate the Earth being evil and all at the last minute Austin Powers hatches a plan and sends Dr Evil the following message back in my lab here on Earth I've created a replica of your moon base down to the Last Detail the replica even contains an exact copy of you everything is the same all the atoms all the momenta all everything given that you actually don't know if you're in your real moon base or in my copy here on Earth so if you obliterate the Earth there's a 50% chance you'll be killing self the puzzle is what should Dr Evil do should he fire the laser or not interesting right so there's lots of little anthropic principle ideas around this here's another parad Yuk's Paradox suppose that a super intelligent predictor shows you two boxes the first box has $1,000 the second box has either a million dollars or nothing well in classical reality this is an easy choice right you don't know which is the case but the predictor has already made the choice and either put the money in or left the second box empty you the Chooser have two choices you can either take the second box only or both boxes your goal of course is money and not understanding the universe here's the thing what's the trick the predictor made a prediction about your choice before the game started if the predictor predicted you'll take only the second box then he put a million bucks in it if he predicted you'll take both boxes then he left the second box empty the predictor has played this game thous of times of four thousands of people and he's never been wrong once every single time someone picked the second box they found a million dollars in it every single time they picked both boxes they found the second box was empty what is O why is it obvious that you should take both boxes well whatever is in the second box you'll always get $1,000 more the decision of what to put in the second box has already been made you're taking both boxes can't possibly affect it why is it obvious you should always take just the second box well because the predictor's never been wrong again and again the one box Pickers get a million bucks and the two box Pickers get a th bucks so which why should this be any different and so this is Robert nosik who's a very famous intellectual also recommend reading his work um to almost everyone it is perfectly clear and obvious what should be done the difficulty is that the people seem to be divided almost evenly on the problem with large numbers thinking that the opposing half is just silly there's a third position position the wi vonstein position it's my father's favorite philosopher which says that the problem is just incoherent if the predictor existed then you wouldn't have the freedom to make the choice in the first place in other words the fact that you're debating Which choice to make implies the predictor can exist one student says can't you get out of the Paradox by flipping a coin and anyway the point of this book is that it goes through not just um complexity but also a little like Basics and math and things that you might want to know about like poo um axioms and things like that Zer Frankle and a whole lot of complexity so if you studied undergraduate complexity with classical Computing this would be very interesting for you to read a little bit more um there's a bunch of stuff um again dealing in you know quop physics a lot of derck notation and stuff like that there's some some of that the no cloning theorem you know a lot a lot of real great interesting theoretical physics but from a computational kind of perspective so wienstein witk wienstein what's up font Quantum Computing since demarus that's the book um and complexity Zoo the website look at all these complexity classes oh my God can you imagine knowing all of these what's some of the famous ones everyone knows p and NP but how about uh like BPP or ppace where's P space so what it heck is ppace ppace is polinomial space so all decisions all decision Problems solvable by turning machine and polinomial time so is it equal to NP space assuming the existence of one-way functions which maybe cannot assume this this is like the frontier of knowledge the frontier of thinking there's a reason I guess our our company is named godell or our product is named godell um BPP is another one so bounded error probabilistic polinomial time the class of decision Problem solvable by an NP machine such that if the answer is yes then at least 2/3 of the computational paths are correct and if it's no at most one/ third is so you have a b and there's a lot of people that debate and argue these bounds so with Quantum Computing you have like some other really interesting classes like QP space I'm sorry not QP space let me get you a better Quantum class than that trying to think like bpq I want to say well I haven't studied this too carefully bounded error Quantum ppace probabilistic P space so anyway that's if you really want to be smart learn that stuff I'm not smart enough for that stuff I'm just look at financial statements and try to make make a good investment monkey make good investment anyway that guy now works at open Ai and he knows nothing about AI or didn't and now he knows a lot about AI but he's just a great thinker so I really like Scotty arenson even though he probably doesn't know exist I'm cool with that he doesn't use social media either which is awesome can you imagine not using social media can you imagine no I like Lambda because it's got the lowest prices Steve school too but I mean we have other compute providers other than Lambda and some of them we we regret but another really good one is um shade form so again these guys don't pay us or anything but I highly recommend shade form if you want gpus they are kind of like a um oh wow $1.72 for a 180 gig I might want that um so they use every other Cloud if you can see here there's they use Lambda this is really cool actually they're doing a great job Lambda is not slow and not expensive the opposite Lambda is like oneclick deploys yeah we use Rod sometimes ronod is not Enterprise ready yeah we are hiring go to dl. soft we're um hiring full stack talented full stack Engineers so couple jobs here oh I this site changed I think I have to redo this actually um um yeah let me redo that but yeah any full stack Talent basically uh and machine learning talent and you get to work with me all day me yelling in your ear [Applause] I should head back to the office as a matter of fact right now I want to head back to bed so tired from last night's champagne binge all right so cash flow from this first quarter or no fourth technically calendar fourth quarter oh my God this is nuts this is long like you just got to buy this Zoom ZM go out and buy it today this is a this is a how is it this cheap how do you see this chat do you see this there's got to be something wrong with it a lawsuit something yeah the site isn't so great um Liam sorry about that is this real I don't know if this is real chat because I I haven't seen a stock this cheap in a long time I keep typing the Discord thing for you it's literally on my it's on my Twitter handle and everything zoom zoom I don't know man this is incredible these numbers are incredible I would think at this valuation Tomo Bravo or someone would buy it out this a no-brainer competitive Advantage competitive advantage playoffs you got four billion in Revenue a billion in cash flow a billion and a half in cash flow a year that's a competitive Advantage sh [ __ ] what you talking about that getting that that brand they got more cash than most companies they can buy any company they want look at this 1.6 billion in cash flow from operations they don't really have cacks I thought it was an anomaly quarter but no they they're pumping that cash out every quarter [Applause] you telling me I can buy $1.6 billion of cash flow right that's six times earnings bro what the [ __ ] yo buy this [ __ ] right now B get my get my broker on the phone man buy this [ __ ] right now man what the [ __ ] what these people smoking bro yeah CO's over that's fine give a [ __ ] about Co [ __ ] Co easy double easy double telling you right now take that to the bank man I never say that easy double thank you who who gave me this gem somebody's making me Rich who gave me the [Applause] zoom Google is no longer my friend Zoom is now my best friend 58 bucks we will see 100 that's all I got to say um something's wrong with my streamlabs I tried to stream to X it just didn't work so yeah Zoom looks good liquidia I don't really I mean it tripled it's that's that um I think that's it for me now I really appreciate the zoom can also do a lot of different things with their platform I mean just but the steady billion dollars in cash flow even if that starts declining a little bit it's really not that bad all right everyone that was fun um appreciate your time love all of you guys have a great day see you later thanks for watching