8/23 - a variety of stocks

great hi everyone I uh am ready to look at a bunch of stocks with you isn't that great I love that I love that for us what's up Tim first let make sure my ex fans know about this did you guys see yesterday the the guy who set his wife slept with uh somebody at Amazon that was pretty wild I was trying to pretend it it was me who worked at Amazon the weird part is the guy posting about it like I think in this culture everyone's trying to turn whatever they can into [Music] content but that's not content man that that's probably something I would not sure imagine wife and a ho many such cases there are many such cases that's why I try to stay away from women who are too beautiful there's going to be a lot of guys after them the temptation to be a hoe is high so I like my girls just pretty enough but not too pretty all right am I legally allowed to invest anymore yes um I don't really follow the law in case you haven't figured that out um the law just tries to keep up with scy there's no set of laws in a law book that can hold me down all right I'm just kidding about that but I do follow the law all right we're going to look at Boeing a lot of people want me to look at Boeing uh uh okay it's weird because my Boeing didn't autocomplete um let's see okay it allo completed that time at least let's read the 10K together this is the first thing Warren Buffett does when he looks at a stock he reads the 10K can't be that bad of a first step right I like to keep my notes in a file just because I don't know does it help you guys remember things I remember things whether or not I take notes I think it's good for collaborative work too like um if you have a team this is one of the better methods because your team can put their notes in and something like that I'm actually kind of working on a software that would make that a little easier um but the other big problem the other big reason to take notes is if you don't um if you don't take notes you lose the information from period to period it's pretty hard to analyze these you'd have to open up every 10K and stack them up against each other it seems a little impractical so better way to do it is to do it the way I'm doing it right now all right so at least that's at at the time of the 10K they had there's more recent information but at the time of the 10K they had 610 million shares outstanding it's 175 bucks a share so that's 100 Bill market cap that's Boeing ba classic stock been I haven't been following the company for that long but I I've certainly looked at it for about 25 years um but never in great detail you know uh so I'm not going to pretend as a Boeing analyst I think for a hot minute I I did look at defense stocks but not not that uh not that in depth oh boy one second guys I got a lot going on right now all right let's see here um it's funny because even even with all their problems they they haven't really um one second [Applause] [Applause] talking to a couple of my colleagues real quick okay so I guess Boeing split a bunch of times right so like in the 70s it was like a dollar and kept going up in the 90s it was like $36 in the.com bubble Peak it was $40 kind of crashed uh to $20 went up all the way to 70 or $80 and was this when their problem started no that was just the great financial crisis back down again to $20 huge run huge run to 200 even $400 wow wouldn't that been amazing to buy Boeing it's 2009 the financial crisis is over theoretically um nobody has any job or money but imagine you had a big pile of money and you bought you just said you know what I would just want to buy American classic American stocks so I'm I'm going to buy Boeing and you bought a bunch of Boeing and maybe you bought Coca Cola and fizer and all the stuff but your Boeing stock would have gone from 20 to 400 holy moly in just 10 years that's a you don't see that often um yeah you know and it's not like some kind of high tech grow company like this is a company that is very old and whatever okay so then the stock kind of crashed I guess because of various um problems with the the company's quality okay I remember when the plane crashes happened first it was definitely a wild time okay so now we're left with a100 billion company what does that mean well they have commercial airplanes that's one business they have defense space and security that's another business and then they have Global Services that's their third business all right so for airplanes pretty they're easy business to understand you've got 737 narrow body 767 widebody 777 widebody and 787 y body um they're working on couple other planes the 77070 X 777x X in development uh the 737 X 7377 in development and the 73710 in development okay for defense they do what you would think aircraft and weapon systems [Applause] aircraft manned and unmanned okay commercial satellites [Applause] is that spell satellites yeah okay Global Services this is just servicing the other two businesses okay they really have two businesses in a Way 171,000 employees and a bunch in the Union 57,000 union members anyone see Kamala speech last night we watched it in in our office I thought she did a decent job actually but she didn't really say anything it was just all like optimism she was a little scary I agree she was a little weird at the start she was just kind of laughing and smiling anyway let's get back to Boeing I don't want to talk about Kamal IRS a tax plan was definitely not good definitely not a good tax plan all right so they finally look at that they listed SpaceX as their competitor um Airbus is basically they're Airbus and some Chinese companies and then defense they've got locked Northrop what's Northrop stickers still n Ron General Dynamics and SpaceX and a couple of others all right all right so the 7379 I guess is there's a ton of problems there and then you have the 737 Max we all remember that one okay Bo was founded in 1916 110 years old almost or yeah 108 so the F FAA is a regulatory body for them this window is too wide resize it the Edgar thing is so bad man it's Chrome and Edgar all right non us customers accounted for 42% of our Revenue that's more than I would have thought actually 37% US Government contracts and what was it 42% so I'm guessing for defense the entire thing is US Government contracts which makes sense Okay so we've got the the KC 46a tanker the mq2 the t7a Red Hawk the vc25b presidential aircraft I'm guessing that is also called Air Force One let's see vc25b residential aircraft oh this is the military version of the Boeing 747 so that is also called Air Force One um it's a seven military 747 till number 28,000 and tail number 29,000 Air Force One and Air Force 2 or maybe they're two Air Force Ones I don't know $325 million kind of funny right it's kind of neat cost type Contracting okay I thought it was more more of that was Cost Plus interesting okay let's see here floor space okay so this is just Factory space so air traffic is back to pre-co levels even though I guess China is not Airline financial performance I guess it's quite important for them industrywide profit of 23 billion it's more than I would have thought that's pretty slow growing business isn't it 42,000 new airplanes over the next 20 years okay I should probably write that down 4255 new airplanes needed globally in the next 20 years this is the 2023 10K okay here is like a brief description of the companies really really Abridged so they've grow they've been growing Revenue where's all the hate coming from are there so many haters Revenue was 62 billion then 66 billion then 77 billion okay haters plebs get mad um yeah Zoom was uh Zoom was a quick one right um good for you guys you can uh uh email me about Goodell or um email our team Martin dl. software is my email Mar at dl. software our company is called DL software so hopefully that that's helpful um I'm not afraid to board a Boeing absolutely not all right let's keep going here I'm not sure about the profit or loss I want to look at the cash flow you know what they call me okay here's the disaggregation of Revenue oh no my windows went crazy all right so airplanes 14 billion 26 billion 34 billion defense 26 billion 23 billion 25 billion okay Services 16 billion 17 or 18 billion and 19 billion oh by the way guys I did um I co-hosted pirate wires so pirate wires is um like basically I guess Peter Teal's Media Company or Founders funds Media Company it's very cool very edgy very hip and I co-hosted it this week so check that out when it comes out it should be coming out later today I appreciate the super tip thank you I haven't looked at uh Bitcoin uh mining stocks sorry I don't know them very well I'll look at them at some point um so at least on a gap BAS basis all these businesses are seem to be running at a loss but all of you guys know that that's not always the full story because you're smart and you know Finance because you watch me and you're not a noob we hate noobs around [Music] here all those other channels they're alling noobs I hate noobs the worst biggest noob in the world is my cat where is she she's going to come around here later and she's goingon to be like nice homework it's not and whatever I if I like it she's gonna say I don't like it and if I like it she's gonna say I don't like it or if I don't like it she's gonna say I like it that's the way she is all right so this is the airplane backlog which has grown enormously the defense backlog and then Services backlog okay so backlog is how do they Define backlog actually it'd be interesting different companies Define it differently unfilled orders definitive contracts have not been executed customers have the unilateral right to terminate okay this is very important here this is airplane deliveries so we're going to 737 deliveries um they delivered 396 8 uh 387 and 263 okay that looks pretty good 770 747 deliveries looks like they don't do many of these they delivered like none is that is that the max or I don't know it says here I guess the what is the 747 bowling 7 47 longrange wide bodied airliner okay oh they no longer make it it's the OG plane got it I could probably just exclude this right all right 767 [Music] oh is that oh I see that's just the that's just Air Force One got it got it got it I'll buy a 74 747 when my puts print this guy is a fool fo Julio foolio all right 777 and then the 787 so if you look at how many planes they deliver in a year it's not that many these are pretty expensive little mfers so let's see total airplane deliveries right is like delivering pizza 340 480 528 if this was a startup that'd be a lot of growth but I'm guessing 2019 and 2020 wasn't so good but we'll see so do I have those right 340 480 528 cool interesting interesting interesting so these [Music] are firm orders cumulative firm orders H I don't know if I can I don't know how to parse this it seems strange cumulative first firm orders these are orders that acrew since the start of the project but without deliveries we have cumulative deliveries too right but is it cumulative net firm orders I guess a firm order you can't cancel right tell you what I'm just going to do the cumulative firm orders for the 737 because that's the biggest one and if it's important I will go back and finish the job I'm a little mystified as to how this will be useful but that's because I'm not in defense and Airline uh defense and air aircraft analyst I know biofarma I know software that's about it but I do my best for my good Ellens so many so many requests I wish I had all day and all night to analyze stocks for you but I make stock software so and also voice software I've been spending a lot of time on that's uh been pretty pretty important okay now we have the military side uh wow okay let's do these it's going to be this is like a biotech income statement so many different products or big Pharma more likely okay so the fa8 what is that and these are deliveries the fa8 are these the Hornets McDonald Douglas that was an old the company Boeing bought a long time ago I'm pretty sure Boeing bought McDonald Douglas almost certain yes they merged with Boeing in 97 I'm going to drop that down here 1997 well let me do this 1967 MI McDonald merges with Douglas 1997 McDonald Douglas merges with boing okay so this is the fa8 fighter fa8 so are these all Hornets or are some of them hornets and some of them aren't we got the 18c supersonic so this would be a really cool industry to follow professionally you know imagine going to the Boeing uh headquarters and they're like take a look at this the new fa19 and you're like holy [ __ ] and you have to get like security clearance to see it um like the CEO is like you want to take a ride let's that'd be sick um yeah I'm designing a bunch of software that makes the stock analysis methodology better because the way it's done now is not done great and a lot of people on Wall Street have followed my methodology but I've mostly been using off-the-shelf software but after programming for the last 10 years like I feel like I can make better software that streamlines this process every fund that does fundamental analysis has to go through this process and whether it's Quant or fundamental both sort of even the best professionals their processes aren't great and most of them the really good ones design their own software which is unnecessary so we'll see maybe I can make some more changes to this industry rag is probably not going to be too useful um we've done a lot of experiments with rag um like a lot a lot a lot um rag is okay for like an automated analyst we've made automated analysts we have one coming called Kathy named after you know who Kathy is uh an automated analyst you can talk to but the rag part's the easy part anyway let's get back to the fa8 what is this thing they've been making it since 1978 they retired the hornet in 2019 huh they still shipped a bunch twin engine high G pullup look at that isn't that beautiful unbelievable Right transonic Flight producing a Flo induced Vapor cone I mean if that isn't you know that doesn't motivate you or like instill awe on you I don't know what will this is a man-made object unbelievable right it's just uh beautiful so there's f18a as [Applause] well we'll go through the whole the whole list of products so they said they they plan to use the fa18 until the early 2030s that's the USMC which I'm guessing is the US military command or something like that okay so there's the ab Hornet and the CD Hornet CD hornet looks like it's newer where's the EF Super Hornet okay I think I got [Applause] this so the e is single seat and the f is dual seat that's an expensive ride this started in 95 GE engines second crew member for weapon systems officer so one is a pilot and one is the does the weapons if it were me I'd be I'd be doing both I don't need a second guy all right I'm doing both it's called the rhino in operational use and there's The Growler whatever that is all right enough of the [ __ ] how do I get my hands on one of these I got to call Putin I want one for the backyard listen I don't I'm not confused this is a this is a new industry to me okay US Marine Corp that's the USMC I'm not confused but this is definitely fascinating I've never studied military jets View some of these are on display I need one for the backyard man okay so the 18 CND one crew member 56 feet how long is that probably from here to the end of my apartment maybe not that long yeah maybe about right wingspan 40 feet height 15 feet you got to be a short guy to fit in there short King okay 23,000 PBS it's a big sucker Max Speed what is that mock 2 th000 knots oh there it is mach 1.8 range 1,000 miles so let's see if you had to scramble me from DC how fast could I get to New York DC to New York miles oh that's short 200 miles so you can cover that in what mock well know what the top speed is right it is 1,190 Miles so [Applause] 20419 17 17 time 60 minutes so 10 minutes from New York to uh at at full speed with no takeoff or Landing kind of issue 10 minutes New York to now I need that for my Miami trip I don't think you want to be in that at Mach 1.8 [Laughter] either might be a little turbulent okay Armament that's without traffic um we got a rotary Cannon damn this [ __ ] looks seen a lot of guns that's a gun the m61 A1 Vulcan air cools Gatling style rotary Cannon 20 mm rounds damn we got Rockets oh wait wait we got we got hard points which inside of which go Rockets so there's the Hydra 70 Dam and the Zuni okay and we got side winders the Sparrow Mavericks the slam er a damn anti the harm anti-radiation missile what then have a picture of this [ __ ] these are cruise missiles air launched cruise missile anti-ship missile called the Harpoon that's not on the ship that's not on the plane looks too big for that maybe that's just a launcher I don't know the bombs it holds it holds a beef 83 nuke sweet b61 nuke okay those probably the older planes the jdam we know the jdam the Paveway these are the I guess the stuff it can hold right the gator cluster bomb sensor fused weapon damn Rocky 2 so I guess they go out with loadouts right they don't all hold all of these weapons obviously there's no plane that could hold all these weapons but you get loaded out with say two of these one of these or whatever the case may be okay Hughes radar so they don't use the Boeing radar but I'm not sure about that that's really cool like I said it would be pretty dope to be an analyst in this space all right and for all you people wondering like you could study all these and become like an independent analyst or join a hedge fund or mutual fund and just be like you're the nerd you're all the autistic nerd who's like well technically the F-18 uh range is smaller than the F-15 and it uses the Hugh avionics to the Boeing avionics which gives it superiority and like people some hedge fund manager who's like was a jock in college would be like this [ __ ] guy knows aircraft we need this kid um and then like they'll put you in front of Boeing and Boeing will be like how do you know so much about our planes young man you'll be like I don't know I've always been fascinated by them they'd be like maybe you want a job with Boeing and believe me that's how this works that's how I did Pharma um in in Pharma I I was exactly the same way talking about every medicine talking about every you know thing like that so what's the Boeing F-15 all right so this is this is their ad advertisement for it at least tactical fighter Fleet oh [ __ ] God damn this N5 is a completely new platform [Music] this is to me this is boss [ __ ] I love this stuff like this doesn't get your heart going like [ __ ] a car man some people like Bugattis this is the [ __ ] look at it it Even's got that beep for backing out just like a car Dam imagine being in one of [Music] these holy [ __ ] [Music] [Music] oh these are Boeing guys he wearing a Boeing uh suit man is flying upside down a [Music] damn and that is why you do not want to [ __ ] with the United States of America okay they stopped shipping that or they're slowing down the shipping of that that one now the t7a Red Hawk this is what the [ __ ] this is this is a training system okay I I don't know if I'm going to uh be streaming regularly I kind of do it when I have some time but I'm doing it more often for sure thank you for asking I don't think I'm ever going to get into this business I'm not a hard tech guy uh ch47 chin hook so the chin hooks are the are those the the big like yeah there we go did they change the name from chin hook Chinook developed into the Chinook okay so this is the Chinook it's not chin hook it's Chinook so this is a transport helicopter okay [Applause] transport helicopter is that right [Applause] yeah need something just right for assault missions but also for transport load up the Chinook all right so what are they doing with the Chinook they've got two kinds of Chinooks I'm going to group those for Simplicity sake they got the refurbished get the refurbished model all right now we got the Apache so the apache's a helicopter man if they could get me one of these like on the low man I got the damn Apache in my backyard let's take that [ __ ] for a ride let's go that's a flex you know These Guys these rappers and your Tate they're flexing these [ __ ] bull [ __ ] Bugattis or whatever man I got the Apache oh I want to know the price of all these as well you can buy an Apache I don't think you could buy an Apache what's the current price 52 mil God damn okay let me see here 52 mil I mean if if you have a billion cash that's not bad maybe next year it's not going down this year this is a [ __ ] attack helicopter God damn Hellfire missiles need those these are million a piece I think although andal is probably going to make better ones Ander is the exciting company in defense maybe Boeing should buy andal and make Palmer the CEO Boeing now that would be [ __ ] sick like all right we're going to merge with andril on the condition that this man the man with the Hawaiian shirt he becomes a CEO of Boeing man that'd be the coolest [ __ ] ever that would be the that's the solution to Boeing's problems all right so the Apaches and now you've got the grey wolf I don't know what the heck that is I don't really care to be honest but let's look really quick gry wolf okay that's also an attack helicopter or something some kind of helicopter multi- mission helicopter okay great can't spend all day geeking out on military equipment okay the KC 46 tanker I'm guessing that's just a tanker okay just making sure all these numbers right okay uh the p8 that's pretty nondescript boing p8 that's the Poseidon anti-submarine Warfare aircraft okay oh Patrol and reconnaissance okay coniss sense with two s's I don't even know all right thank God that's it um commercial sets so the commercial satellite business they've probably been destroyed by SpaceX right and on the military satellites they haven't done any either there so SpaceX has just been whooping their ass in general okay they have a different okay this is their earnings from operations for services right right here okay now the important part cash flow that's not bad but they have kept XS got to keep that in mind the thing about Boeing is that it's kind of too big to fail in a lot of ways it's like the government sweetheart like if you work in the government there's always a job for you a Boeing if you're in DOD or stuff like that oh that's interesting someone's saying that the satellites are different heights fair enough I suppose all right some real financials this is this I can sink my teeth into this I'm the expert at nobody can [ __ ] with me on financials take that to the bank find me a YouTube youber who knows more about financial statements find me one I challenge you I've seen every kind of income statement balance sheet every kind of reconciliation every country every currency scr's done it okay this is a bit of an odd bit of an odd business Canada's got some capitalism you know they're backpedaling for a while there we'll see if they go full Soviet communism I hope not our neighbors to the north man we need them I need all the pretty girls from Montreal all the pretty girls from toron come to Daddy man that's that's that's what I need Canada for they got some businesses there Shopify is their Shopify is their big big business punab I like Indian culture too okay other income that's CIA bribes kidding little other income section here don't worry about it it's classified i' I'd be kind of weirded out being a Boeing analyst on Wall Street I'd ask the CFO some stuff and they'd be like why are you asking so many questions like it's my job may be like torture this man follow this man right now sir my stock pick is a matter of National Security I'm on a need to no basis for your guidance the assumptions in your guidance so many Wall Street jokes here all right so they've been unprofitable three years in a row according to the income statement but we know because you're not a noob you know the income statement is one half of the story the other half is the cash flow statement Gap net income is one thing that's the income statement cash flow statement sort of tells the truth without the accounting [ __ ] but the accounting [ __ ] sometimes important too you can't take one without the other Love and Marriage Love and Marriage look at the inventories we usually don't look at companies like this where their inventories are so large but they have a year worth a Year's worth of Revenue of inventories in biofarma you don't have that in software you don't even have anything close to that so you don't even have inventories at all so invent iies the problem with inventories is working capital right inventory costs you money to make you have to buy the raw supplies you have to make the work in progress then you have to make the finished good all of those cost Capital right all of those are your money that you have to spend so there's quite a uh intensity it's sometimes called Capital intensity that comes with that that's kind of why Boeing is like fundamentally a [ __ ] business but we'll get into that later there's a tradeoff for having a monopoly it's not a [ __ ] business in that sense but take a look at the property plant and Equipment which I've told you guys many times is the one of the most important things it's actually rather small relative to what I would have predicted they only have 10 or 11 billion dollar of capital that's not that much a fixed Capital you would have thought a serious Manufacturing Company like this would have massive amounts of factories that's odd to me I wonder if it's made through you know subcontractors or something like that but the margins are so low look at the gross margins 10% it's something's not adding up here because I mean I just don't understand the business model but like you have a 10% gross margin as a manufacturer that's less [Music] than I what kind of company has that low margins but with that low margins you would think you have this massive cap x no you know what it is it's probably all these subcontractors that's what it's got to be tons and tons and tons of subcontractors that are this guy makes the windshields this guy makes the raadar this guy makes the seat this guy makes the chassis you know that's that's probably what's going on on [Applause] there okay wait hold up wait all right 137 in assets how much debt his balance sheet is not great it looks like all right so the inventory you can kind of assuage that issue by getting these advances so you can kind of make your customer pay for some of that inventory as it's progressing so they're not completely out of their own pocket so to speak we're looking at Boeing right now um they have a huge uh pension liability because the they were such a uh unionized company stockholders Equity negative that's just an embarrassment man get your cash up Boeing should have a fortress balance sheet not debt that foreign governments can buy that debt in the open market come on man okay here is the all important cash flow statement and I'm going to do an a bridged version because we don't have that much time this was supposed to be a quick and dirty analysis but I kind of got lost in the sauce as they say but here's the cash flow and and note the difference right you have I'm going to bold these two so all you noobs out there I know there's a few noobs that are watching most you are season Pros because you've been watching me but some of y'all are noobs and I hate noobs net income that is the profit left over after you deduct everything from revenue that is the product you've sold in this place planes and missiles all right sold $ 62 billion of planes and missiles they had -5 billion they lost money next year 67 billion planes and missiles but all the costs to make them they lost 5 billion okay 78 billion in Revenue all the costs -2 billion so this makes it look like it's an unprofitable business this is called the income statement this is Gap accounting generally accepted accounting principles which means this is how you treat these numbers these numbers just don't come out of nowhere they're numbers that are they have principles behind them there's a second set of books called the cash flow statement it has different principles this basically the income statement is basically an idealized version of accounting principles that are meant to convey a certain set of thoughts the cash flow statement is the same thing but it's a different conveying a different set of thoughts in this case it's conveying how much cash did we make this year that is not the same thing as net income although they both are pointing to that number one points at it from an accounting perspective one points at it from a pure cash perspective they're both important to look at in this case the cash flow from operations for Boeing was 6 billion if you look at the cash flow statement but if you ask the same question the same question of the income statement it says -2 billion so on one hand we have 6 billion profit on the other hand we have -2 billion of net income somebody says acrs yes there are principles in the income statement that will lead to expenses being treated a certain way and revenue being treated a certain way um and those differences can be big as you can see if you just look at the income statement Boeing is losing money they're unprofitable what does that mean well if you look at the cash flow statement they are profitable they made $6 billion last year they'll probably make more than that look at the trajectory neg3 last year or two years ago negative3 billion then positive 3 billion then positive 6 billion okay uh what about capex capex is important capex is excluded from the income statement so we can't look at cash flow from operations without giving some Credence to capex let's give that Credence and we get something called free cash flow free cash FL number is a little smaller because we're excluding the Capital Equipment but we've excluded that and it's still profitable at 4 billion I think you can take these numbers to the bank more than you can take the net income numbers to the bank so assuming that's the case let's look at the cash the business has they have 17 billion in cash let's look at the debt 52 in debt so the Enterprise Value is 142 billion this is December December yes okay so this is Q4 2023 Q4 2024 obviously hasn't happened yet so we'll get that annual report in like 6 months the Enterprise Value is 142 billion for that to that would be the cost to buy Boeing and retire its dead you get 4 billion in cash what's that ratio like well 32 times Enterprise Value to free cash flow okay but is this free cash flow steady state okay is this the number we can rely on it doesn't look like it because it's so volatile right this number is going up and down like a yo-yo and we've only looked at three years that's why we're going to go back and look at a couple more years and we're going to think about the backlog a little bit and we're going to think about us defense spending a little bit and then we're going to go on to another stock because I paid way much way too much spent way too much time on this but when you look at a stock you got to take your time got to sink your teeth into it you know it's like that wine guy that looked that you know on Twitter Wine Guy Twitter on Tik Tock is that this guy I don't even think it's this guy yes it's I think it's this guy [Music] this is how you have to look at stocks yes to look very carefully can't just race through it and make your trade like some Maniac that's how you lose money take it from me I used to do a long time ago I used to plan these trades out for months meticulous research burning the midnight oil cleaning the lady came in and left second cleaning lady came in and left at midnight the midnight shift security guard's there at 2: a.m. looking at me like what the [ __ ] you doing up like I'm working on something and then guess what the trade would work trade would work spectacularly I'd make millions then what it would happen I'd start feeling myself and I'd say you know what I'm just going to make a trade real quick I like this stock o lost 50 Grand that's no big deal I'm still up make another trade real quick lost 200 Grand on that before you know it all the money's gone you got to keep your discipline all the profits are gone so don't don't try to make you know a fortune in five minutes if it were that easy everybody would do it not saying you can't make money trading you can but you have to be extremely disciplined all right we can go through this one a lot faster because we've already read one of them right well some of the smartest people in the world invested in our company because our revenue is growing very rapidly and we're very talented and experienced managers I've built billion dollar companies before we're actually about to raise five to 10 million so I'm not autistic thank you Raptor yeah I mean I love working I love creating value I love being a manager so for me it's it's not hard to build a successful company but it is uh very very uh intense um I'm pretty sure Dr goop is working let's see yeah our image Den app I don't think is is doing so great but we have two two other apps that are doing very well and we are going to update Dr Gupta at some point we had hundreds of thousands of users for Dr G I'm sorry to hear that you're experiencing a headache headaches can be caused by ious factors such as stress dehydration lack of sleep or even certain medical conditions it's important to try to identify the possible triggers for your headaches have you noticed any patterns or specific situations that seem to coincide with your headaches [Applause] I understand that your headaches seem to occur randomly it's essential to well anyway so Dr grp does seem to work um that's good um you know trading view is pretty similar to godell and trading view is worth a few billion so anyway leave leave the business to me I'm I'm the business person here Bloomberg's worth 2 00 billion godell is $40 a month right now but we're going to raise the price to $100 a month soon so if you sign up now you will keep the permanent price that you sign up at so some people even have godell locked in at 20 bucks a month which is kind of wild um because I I don't think we lose money at $20 a month but it's probably pretty close but as we add um new sectors like we're adding we've added Canadian realtime stocks we haven't announced it yet though but they do work so like Shopify Canada works it is delayed although I think we have real time coming soon we're talking with the Canadian Stock Exchange people the TSX tsse um what other Canadian stocks are there RBC yeah so we have internationalization coming which is pretty awesome um there aren't too many um there aren't too many Dr gupa like things out there actually there's one called Cod MD which is pretty cool we have a similar we have like the same amount of uh traffic is them they raised they have 500,000 users we've we've serviced around 500,000 users too so I think for us like making our own science llm is the goal for Dr Gupta but also like Integrated Health all around your health Dr Gupta is like our third most valuable product our number one is godell and our number two is NE called neats and we're shipping a big neats update soon so pretty pretty sweet I'm not I'm not sure I'm going to sell to Bloomberg Bloomberg just needs to die nobody likes Bloomberg on Wall Street our second product is called neats we're not casual positive yet but we're rapidly approaching it actually so hopefully it we will be soon some are B great some achieve greatness and some have greatness thrust upon them yeah I'm sorry it fails every time you try to use it maybe you're in the UK we're blocked in the UK but I just used it on our stream and it worked fine so sorry proof as far as proof is concerned we show that to our investors not to you so in other words lick my balls so in other words lick my balls [Applause] this is a an API in lick my whole n in um so yeah we our API our Texas speech API has been behind our Ral um 11 Labs but we just about to ship something that's going to equal the score we're really excited about that so anyway I couldn't be happier with our how our startup is going we're also hiring yeah the media arm of blomberg is a loss leader for them I would never want want to do that to be honest speech to text and TTS I don't know it's more valuable honestly I think TDs is more valuable they're not too different modeling wise on the AI side um our jobs site is not does not list all the jobs we want but in general we're just looking for full stackers or AI people we're actually we're actually pretty like to need maybe two or three more people um and then we're probably going to hire salese and stuff like that um but yeah full stack people people who know machine learning keep learning really well um yeah we're not a fund or anything we we make software 10x devs who work 12 hours a day we were up till midnight last night we'll be up to midnight again oh yeah the you we ban uh we we we're banned in the UK for Dr gupa they have very specific regulations that they emailed us about the health minister of the UK and we just told him to [ __ ] off it's funny these countries think that like anybody gives a [ __ ] about what they what they think like oh you don't want it you know AI technology in your country cool man I don't give a [ __ ] we were so happy to block them meanwhile we got uh emails from other countries saying if we could do a pilot program for them um yeah because the EU broke away you know uh whatever the UK broke away from the EU but we have a um we got email from like three different countries actually to try to do pilot programs for social healthare yeah all a Europe man Europe and the UK are they want they want to commit suicide it's scary but like some middle two two of those countries in Middle Eastern countries actually and look they they want to use AI to lower their healthcare costs makes sense but to me Dr Gupta is a very very very long-term project like if AI is going to replace the way we do medicine it's not going to do it overnight it's going to do it over a very long period of time so our investors understand that it's not a huge bet for us um I'm not sure we've even spent a million dollars on Dr groupa or even half that so like for us it was a fun product we made in in a month and it has a lot of promise but it in markets like this like like for example the guys at Cody like I would say that we want to be their friend like we actually need to team up because you know yes they do exactly what we do right they're our competitors so to speak but they're not really our competitor because um to talk to a doctor oh that's funny $39 for tella Health huh doesn't seem very good [Applause] actually that's not bad [Applause] yeah we don't do any marketing yeah so marketing is uh not something we do yet yeah so anyway like both we and these guys and hopefully even a third or fourth company we need to get um together to create this market and make it um make it bigger because otherwise um like they did 500,000 customers not customers but us users we've done 500,000 users those are both over a period of like a year um which is not that much there are billions of Health searches a year on the on the web and none of them should be done on WebMD or Healthline they should be done with AI so how do we move the market there and we're going to have to do that together not against each other so I hope they get 500 million users and I hope we get 00 million users but we have to change the minds and hearts of lots of people and that's not going to be an overnight thing all right let's get back to Boeing give you my startup Secrets later there's a lot to creating a successful startup it's not just the product actually all right so Boeing had a pretty profound Revenue decline in 2020 yeah I don't think you need ads if you have a successful product if you need ads I think it's a bad sign we have 500,000 cumulative users since we launched that's what Cody Cody said as well but I mean 500,000 isn't a lot that's that's not successful enough for us it wasn't bad enough to kill the product but it wasn't good enough to like jump up and down and make the whole company around the [Applause] product so Gupta is definitely still in my mind but I want to think about how to make it make it a lot better we uh are not hiring for the unity role anymore we we had a small video game we were developing and we terminated it we hired somebody that couldn't meet uh our Milestones so we're kind of like a milestone oriented company and we terminated that project we lost around $25,000 so it wasn't so bad Unity the software yeah a video game software I actually developed the version one of the game I did that in JavaScript without Unity I did it with something called phaser which is kind of a crummy software but why hire and not use contractors I think if you ever started a software company you'd see that you can't really get contractors doesn't doesn't really work doesn't really work that way okay so look at that the Boeing had its worst year in 2020 really really bad Revenue really really bad deliveries so they're kind of coming back from that terrible period of time yeah I don't even want I don't want to hire remote anymore like I think remote is a disaster um I don't think B to see like I don't think for example godell is a b Toc um and nits isn't B Toc either so our two big STS are not B Toc but uh and they're not cheap either we have some pretty sizable contracts for neats but um I think that raising money is a function of who's the manager are they experienced are they talented what have they done before you know for example I've taken I at 30 I had a billion dollar public company um are they intelligent when when you meet with investors could they do do the investors believe that what you're saying does it come across as credible um do you have Revenue now do you have users now how are those charts going they have to be growing if you're not growing 20% month over month month you're basically dead um you have to have a reputation um even if you're not famous people who have worked for you know you Etc like if you're brand new to the world the business world it's going to be very difficult people have never heard of you you have to either have gotten a huge amount of Revenue a huge amount of users or something like that um I wouldn't bootstrap I think it's uh kind of crazy you need Capital um if you can bootstrap you know of course I would but who's going to pay for the office who's going to pay for the developers who's going to pay for marketing if you're going to do marketing who's going to pay for data vendors who's going to pay for AWS who's going to pay for gpus who's going to pay for data dog who's going to pay for post hog who's going to pay for all that stuff adds up even a small startup like it's going to be a couple Mill a year maybe a mill a year if you really really cut down on the costs you could do it for a mli year but it's it's not something I would uh advise being a oneman show has not really worked ever they called a company for a reason and I think investors want to see I mean the biggest part of investing in a company is who is the team can this person manage a team um that's in fact one of my best skills management if you can't manage a team and your product's not growing number one thing I I would look for as an investor and I invest number one thing is what are the numbers give me something users Revenue if you don't have Revenue give me users if you don't have users I wait I'm going to wait until you show me some users give me ideas is worthless show me the users um if you don't have users it better be the greatest [ __ ] demo I've ever seen in my goddamn life uh otherwise I need some users um and I need to see a path to like monthly growth so let's say you have users of Revenue great um I need to see at least 20 % month over month growth and it has to at some point approach like a million dollars if you're on that trajectory like if you're doing 20% growth on $55,000 it's just not going to make sense right it has to be like that's not scale you know it has to be you has you have to be approaching a million dollars of Revenue annualized even is fine But like after like six or seven more 20% month over months hopefully around a million but if you're doing like $2,000 a month or something like let me let me open a spreadsheet I guess I don't know let's say it's what is it August 2024 September 2024 October 2024 November 2024 and then December 2024 and let's see if I can extend these to 2025 yes all right so let's say your startup uh you have um 200 users and they're paying you I don't know 100 bucks each that's that's actually not bad um but if you have 20 users yeah let's look at this case okay okay and ARR is this times 12 so let's go back to my model where you're growing 20% you have to grow 20% month over month let's say instead you're going just 10% like this just doesn't work because like by the time you get to a million annualized I'll be [Applause] asleep might be dead by then so yeah million annualized would happen in December 2027 three years from now before this is like even arguably that's still a small business [Music] um so I want to see like 20% month over month um because even from a very small number like this $2,000 of revenues not very much um but even with 2,000 you can see that I'm getting to a million in Revenue you know I guess 18 months from now that's not bad um so this is what it's all about right at the end of the day now if you just show me users growing um I don't know how I even did this uh if you just I ASP and stuff like that but um this is where it goes 20% this stays the [Music] same you get the [Applause] point so obviously this picture is a lot better if your monthly revenue is I don't know let's say something like that and you're growing 40% month over month you will very quickly um be a big company right here you're talking about 10 million in Revenue at some point so it's all about the numbers but without the numbers um you know it it doesn't mean much so you have to show the numbers otherwise the product itself doesn't doesn't really matter that much you know the numbers are what matter monthly numbers you can't put numbers up need to find a job you can put numbers up you're ready to have a start up I don't I don't deal in making small companies I deal in making huge companies investors don't want to talk about making a small company investors want to talk about how are you going to make a multi-billion dollar company no I mean companies start small but they get big I had a billion dollar company I had a huge drug company so watch your mouth when you talk to me I know how to make a huge company you don't and certainly not going to take any [ __ ] from somebody from the UK where they don't even [ __ ] do business shitty ass country shitty ass country that's going bankrupt talk [ __ ] about me [ __ ] out of here let me know when you go public all right anyway let's go even let's go back further for oink oh I have a lot of Revenue I have way more Revenue than you that's why I have a big office with lots of developers and you've got your dick in your hand when you have like 50% month-over-month growth you can get a meeting with anyone Peter teal Steve Balmer Elon Musk I'm in Manhattan all right let's look at Boeing it looks like they okay so they had Boeing Capital it looks like yeah I think like I said earlier I mean the only thing that matters is your growth no growth no product no company it's [ __ ] it's dead in the startup world the only thing that matters is growth that's it there's nothing else that matters what is your monthly or annualized growth that's it zero Else Matters product doesn't matter the ASP doesn't matter you can have a product that's $10 it's fine you give a product that's costs a million dollars none of that matters what matters is is it growing or is it shrinking if if it's growing slowly that's also as good as dead it has to be growing and has to be growing quickly does it scale I don't that's an important question but I don't know that it's like you calculate month over month every month has to be more than the last month if you're not doing that just give up all right so here's now we've got more years of Boeing um yeah look at figma canva they're pretty cheap products so they used to do 60 billion in Airplane Revenue wow I think Boeing might be cheap they will get these problems under control at some point I hope I'm uh I got distracted um talking to a business rookie trying to give some advice to youngan arrogant youngan uh we have godell uh needs those are two principal products Dr Gupta is like this like long-term experiment of you know will medicine move to AI I'm 41 all right let's keep look in here 16 73 wow they used to move a lot of 737s look at this 490 529 580 and then they Dro to like near Halt and then they went back up yeah I think we're going to roll out a student thing for sure uh our companies called DL software I think I've heard of trade zero okay so Boeing gets back on track could be a very cheap stock let's take a look but one question is like if they're not delivering planes who who is like can they really get back to selling 500 planes a year clearly the Mark is dissatisfied by somebody else that or like there's just no claims yeah I want to look at air buses deliveries obviously like these are long-term delivery schedules right these are not like you order the plane again it next week DL stands for deep learning keep it on the down low take take your pick so yeah plane deliveries for Boeing is well below the peak still and I'm guessing they have the quarterly numbers I can look at as well okay so this does look like it's a net number that goes down so it does look like the firm orders for 737 are at a peak that's pretty exciting hi sopia martinet dl. software I don't raise capital for anybody else but you can send me pictures or whatever but I'm very selective about what I'll invest in I don't like I don't really like to invest in startups it's not my skill set investing in startups you need deal flow you need like you need time time to evaluate all of them it's funny I had a friend I have a friend who is a multi-billion dollar Tech startup and he's an investor in my company and he emailed his friend about my company and said oh you should invest in Martin's company and this woman this is in the morning this woman said I can be at your office when when when is good for you and I said 5:00 she came right then at 5:00 knew nothing about my company knew nothing about my business that's what it takes to succeed in startup investing like you have to have the network so that you see cool deals and then you need to be like on top of it because a good deal will like go out your door to another company um just very quickly um is [Applause] so yeah there's a lot of that like just rapid um response and like availability to get into deals and then sometimes you need a lot of capital like let's say you know there's a hot deal and um you know they they they want a million-dollar check you know you want to do 20 of these deals a year you need some you need some capital and these are risky deals so to me like startup investing has just never been my jam one day I I don't know one day maybe I can do it but right now I a lot of people don't want me on their cap table as well you know I'm uh for a bunch of people I'm kind of a I I've been I I've been I was early to a lot of hot deals and then they were like oh Martin scowley nah we don't want his money I'm just like okay [ __ ] you I think there are investors uh that don't care they've made enough money that they'll invest with whoever the [ __ ] they want and nobody can tell them [ __ ] and that's the kind of investors I deal with you know if it's an investor that's like oh man I don't know what people would think if I invest with Martin I don't want to deal with that person I don't I don't even want them in my deal I want somebody who's just like independent they can do what they want they'll have to beg some investment committee for like some weird access um all right so let's keep looking at Boeing and I'd really like to wrap this up because I've been looking at this thing for like two hours and I don't want to ignore chat because that's kind of annoying and disrespectful but I also oh look at that they they had much higher margins at one point yeah this is a cheap stock I it's going to take a while for it to turn around probably but like this is an obviously cheap stock yeah I don't I don't see why you wouldn't have this in your portfolio to be honest because [Applause] like all they got to do is get their business back to where it was in 2016 it's just a question of how patient can you be because I don't think boing I mean they're on they're on the mend but like it's going to be a while before they turn around cuz it's it's that kind of long-term business and it's not the funny thing about the stock market is if if a process like a turnaround is going to take a long time the stock market is a discounting machine as long as that process is certain the market will discount it immediately because the Market's very smart it's a very strange phenomenon but it it is the case sometimes the market has a little myopia and it's not as smart as it looks and that's for us to take advantage of but in general the Market's very very quick about like oh okay there's going to be a turnaround and stock will just double and you'd be like yeah but the turnaround was was supposed to happen over like 10 years Market don't care Market's going to Discount that [ __ ] right now as long as it's certain if it's uncertain there'll be a turnaround or not different story and if you don't know when the turnaround is going to happen it's going to take forever ever different story but let's keep looking let's keep looking so they had Peak margins gross margin is 19% that's crazy all right there's uh free cash flow right here or cash flow from operations look at that at one point oh did I skip over the other years of cash flow oh I'm such a bum I was so distracted 10 billion 13 billion 15 billion capex all right so they had 14 billion Peak free cash flow so that's trading at 10 times prior Peak free cash flow yeah it's an okay stock some people like this safety of a big company that's got like this big brand and Boeing has that and I think that you could probably buy this stock and just forget about it that you even have it for the next like 10 years or five years or something like that and you could probably just do fine if you're like a really active Trader you know I hate giving like buy the stock type advice because like one of the problems is one I mean every investor is wrong a lot like you don't just um there's no investor that only makes money you get lucky you get unlucky [ __ ] happens it's just not that easy you know if I'm right 60% of the time I'm thrilled um somebody uh yesterday was criticizing me over a stock pick I forgot I even made I don't even know for sure if I made it and I was just like look man there's nobody on the planet that can give you stock picks that work all the time even on Wall Street even Steve Cohen even the best of the best this is not happening nobody's that [ __ ] good nobody will ever be that good you know so get that out of your head so if you get a stock pick from somebody you got to be pretty cautious about what that means doesn't mean drop everything and go go do what they say it means you know maybe I'll buy a little bit maybe I'll do some homework maybe something like that it's certainly not you got to be crazy if you just want to go do what they say go all in that's just nutty nobody nobody should do that and this is what the process looks like I mean got to look at hundreds of stocks before you buy one do that sound fun to you if it sounds fun to you do it but it doesn't sound fun to you and you think that sucks you're in the wrong game being in the stock market it it's like going through a garage sale axon who's axon you're talking about axan from a million years ago working in the markets is is like going through a a huge garage sale that never ends a never ending garage sale and you have to be happy at how big the garage sale is ideally you want it as big as possible and and you're going through each stock each little trinket each little Trinket in the garage sale and you're looking for the one trinket that they mistakenly left out that's worth a ton of money you know sometimes there's these like I would stereotype them it could be men they could be women they could be young they can be old maybe it's a little old lady in my head but it's whoever you want in your head and they're just going through the all this rubbish basically and then they find this one thing and they're like aha this is a official swars what is that the those things called sworski or it's an official Fab egg imagine that the fabri egg you see one of these and it's sitting there for 20 bucks it was just passed down and it's worth millions I need to know this was an official 19 00 look at this thing you just look at that you know it's worth something right um so you have to peruse each one of these very carefully and you might find the Fab egg but if you just go to the garage sale and you see five things one of them is GameStop and one of them is AMC and you see a bunch of people crowed around the AMC but it's it's dog [ __ ] it's literally I don't know this it's a vitamin bottle but everyone's crowded around and they're looking at and they're saying wow look at this vitamin bottle it's only $20 and over there there's a Fab egg sitting there that's worth millions and it's $5 but the row of things that you have to examine is enormous there's thousands of things and you got to go through each one and then if you have the patience and the time to go to the Fab EGU one you can make millions but if you're stuck on the AMC one or you get bored after you look at five or 10 of these you know what there's no fabri eggs here I'm done I can't look through all [Applause] these that's why many investors the best thing they can do is have a clear schedule they have to have the freedom to look at as many stocks as possible if your day is spent going to this meeting and that meeting and this meeting and that meeting you know you you have a ton of distractions you can't be a great investor you need basically all day and all night to be able to look for the fabic look through the garage sale and needless to say if you don't like looking and examining things closely this isn't the job okay for one of the tricky parts of Boeing is that they never were really operating at the scale they were operating at until they fell from Grace so that kind of makes it trickier to analyze the company because it's really hard to know like if they had decades where they're making that many CLS it'd be fine and you just jump into the stock and AP in but they never really were that at that scale ever right so like they grew like in 2011 revenue is just 30 36 billion so it wasn't like they were killing it you know oh oh wait a second actually I might have this wrong this is just the airline Revenue take it back okay so they did they did have a period of time what I said is still valid but let's take a look like they they only have had a a decade 15 years where they were selling that many planes but the defense business is like I wonder if that defense business is worth I mean they have a lot of competition now with enderal oh they used to break out defense more carefully military aircraft Network in space and services there that defense business is very stable that's okay so there's revenue for the last 12 [Applause] years 69 billion growing to 100 and then falling to wow fell a lot to 58 which I don't know it was 10 years ago when they had that much revenue and now slowly going back up sometimes they call it kitchen sinking but in their very best year they generated 14 in cash so yeah I'd buy this I don't know if I'd get the greatest return in the world but the safety of such a big company kind of compensates for the lower return I also would have to look at Airbus pretty carefully if I wanted to buy the stock because I want to see if they lost share or like the kind of good thing for them is that Co happened around the same time of their their safety problems so like they normally would have lost a ton of share but they ended up kind of I think not losing a bunch of share if I'm not mistaken but again these contracts play out over such long durations that it's not clear yeah I'm sorry I'm so sorry about your your your brother Patrick DMD is something very close to my heart as you know that breaks my heart um there really should be a drug for duchan uh I started my my most famous company trying to make a drug for duchan and um yeah it's tough it's it's it's one of the toughest medical problems and only somebody really really smart could figure it out and I wanted to be that person but the reality of starting a drug company and trying to maintain a profit and make your shareholders happy but also do great science it's difficult it's very difficult and I wanted to spend some time building a stronger company that I could then tackle a problem like that uh uh with the limited gifts I have um but uh it wasn't meant to be um there's a lot of diseases like that that uh really can rock a whole family and they're very very tough you know the the people that suffer or the patient and the family uh and I couldn't imagine how hard that be all right let's keep going here we're getting closer and closer to some answers on Boeing I I think they'll I mean clearly to to play this stock you you just sort of have to have a sense for is this turnaround happening or not and that's something that'll you know it could take many years there many examples of companies like this that sort of had these big problems Johnson and Johnson had them for many years um there was a company called American Home Products that had one a long time ago that I was me deep in uh AMX had one very famous famously that Warren Buffett took advantage of so like there isn't necessarily uh um quality issues are sometimes great opportunities quality issues can be solved if they linger long enough it hurts the brand Boeing has a brand that's are you really not going to take a Boeing airplane no I don't think boing this brand is long as low as it can be I still go on a Boeing airplane stranded astronauts not good all right this is kind of interesting like before their peak in 2018 they were doing like six or seven or eight of free cash flow so one has to wonder is that more steady state representative of the kind of cash you can expect from Boeing if that's the case let's call it seven that's not cheap 20 times so you really got to understand the airline business Commercial airplane business because and I don't um I don't know jack [ __ ] about airplanes why in 2018 in 2017 that they have such big earnings it's not too expensive like I'm it's very like it's like very attractive in some ways but like it's not you know jump up and down by this tomorrow kind of thing so it's a tough one for me especially since I don't know the space no pun intended [Music] um okay what other stocks should I look at I'm going to ask my godell my God delians these guys have had great stock picks honestly um they gave me iance and they gave me um Zoom yeah BuzzFeed BuzzFeed could be interesting all right this guy wanted me to do wbd which is is that's that's the big Media company I'm pretty sure yeah Warner Brothers discovery my uh internet's like super slow or my my Chrome browser super slow I I've been needing to restart this computer for like days and days all right let me see here actually let me yeah like you can see like these these are not the companies I look at Toyota rathon Union Pacific Lockheed caterpillar deer Porsche Airbus Volkswagon like I don't I don't know anything about these companies I don't do industrial you know and it's also asking me to look at a media company and I don't do media so of course I for my customers I'll do anything so of course I'll give it a stab but it's also probably going to be multiple hours of work because to even catch up to like what are these guys even do how do they do it it's like very tough for me because I try to be intellectually honest like I don't want to be like giving you an opinion like really quickly without like serious work but but Boeing definitely I mean I can't imagine that they're not going to do everything they can to get quality right right like they have to be doing everything they can at this point um have they permanently lost some brand against like Airbus maybe but I I still think they're they're just gonna you know it's G to stay you know the way it is or the way it was but it's just not like with large cap stocks like a 30% return is good with small cap stocks a 30% time return is not even wor worth your time so it's like a very tricky very tricky thing so Warner Brothers Discovery is like a recent merger gigantic you know reverse merger basically I really want to eat this Bagel that's been sitting on my desk is that okay chat are you okay with that chat all right two billion shares outstanding $8 stock you do the math what is that two time 8 you guys know two and a half two and a half times8 well8 and 8 is 16 half of eight is four and that makes 20 quick math [Applause] quick [Applause] maths man's still hot man's not hot does anybody get that reference I've been in like 30 or 40 rap songs dude I can't play them now because I'll get like copyright strikes 69ine has been dming me I don't know what that's all [Applause] about he's a real folio Julio or Julio folio Dion donon Dion and Dion I don't think the music business is the business for me I tried that it sucks [Applause] okay distribution advertising content could it be any less descriptive and other so distribution is probably what TV advertising is what it sounds like content is like probably film or other media well 10 billion in Revenue not growing they actually shrunk that's classic media for you right these guys are just getting owned by social media [Applause] [Applause] what would you rather watch media about literally you and your life or about people you don't give a [ __ ] about social media is just like genius idea it's like top top three ideas of humanities from all time you got the wheel you got fire and you got social media pray to PE pray on people's narcissism and they pray on my downfall [Applause] too I love Black Culture I don't know why I just do I know all the sayings I know all the words I got the best words I was teaching my my colleagues yesterday about a black culture phrase called God don't love ugly like there's some that are like esoteric come correct and there's something like a lot of people are saying nowadays like Unk everybody knows an I wouldn't say rap is Nursery rhym some rap is rather good a lot of rap is is kind of not that intelligent but some of it's rather good and it would be no different from Shakespeare today standing on business is another like new one people didn't say that five or 10 years ago people would say stuff like I'm about my business or stuff like that no I would I've been like this before jail in fact if anything jail turned me off to a lot of Black Culture I've compared Shakespeare and rap many times in fact there's a vocabulary analysis of rappers Snoop Dog has the lowest vocabulary and the wuen clan actually the highest vocabulary I mentioned that ter Riza when we met to discuss the album like quantitatively the wuang was one of the most creative albums there's always great artists in any time period um but you have to look for them and I don't have the time to look for them they're people that spend their whole lives like looking through archives listening to every record they can man I don't got time for that I don't know that human nature differs that much that Shakespeare understood life better than we did he was a brilliant writer maybe the greatest of all time so it's not easy to compare the average rapper to Shakespeare it's a ridiculous comparison nevertheless um Jay-Z for example especially his most recent work is fairly good even L Wayne I put up there and then there's lesser known rappers I mean to live quali or others that write masterfully um these guys are not fools then you you know you get the 50 cents of the world that are entertaining but they're not and he's a master of entertainment as you can tell from his film success and television success but he's not you know Shakespeare the insulting to even put them in the same sentence Eminem I would say Eminem could be compared to Shakespeare quite easily all right so Warner Brothers Discovery is this like gigantically debt loaded company because they did that merger so they actually I mean it's kind of nuts this is a good example of like talking about Enterprise Value real quick so Chad I want you to pay attention in case you haven't heard this for the zillionth time I've given this lecture a 100,000 times but I'm going to do it one more time I hope scr pill or somebody like that gets understands it or or shows it all right so you got the stock price we all understand stock price right like that's something you can keep on your screen and in this case it's like $8 and in fact using godell if you're so inclining let's say you're the CEO of Warner Brothers or something oh my God I got so many things open and you're like all you care about is Warner Brother stock you can like it's my favorite feature godell it's such a small lame feature but I just love it like I could just make a gigantic like Warner Brothers Discovery stock price um man my chroma is killing is dying right now it's like choking um but it's not the sight's fault it's like just been I really need to restart my computer but I have all these windows open what do I do um [Applause] okay so let's uh sorry I should start that over I got distracted by some colleagues all right so you have this the stock price and it changes every second and we kind of know why and where and when that happens right so that's Warner Brothers Discovery um why it's not changing every second is another story but it should be changing every second um could be my computer could be my software okay it changed um so you know it's 798 you know be$ 799 in a second from now or 796 or whatever so price stock price is simple that's really really simple shares is a little less simple but you can look up the shares outstanding and really good investors know how many shares outstanding there are for all the companies in their portfolio challenge yourself to think do you know how many shares outstanding there are of your favorite stock it's important you should know because that's how many shares the business is divided into and for this company it's this massive number I'm going to use this uh righta here it's this pig number 2.4 billion which makes sense cuz like if one share is only $8 you're buying a share of a business like that's not you know a lot of money $8 when you see how many shares there are well that is a lot so if I just own one share just a zero turns into a one like or maybe a better way to do it is like here um like this is how many shares there are and this is how many I own just one out of 2.45 billion I don't own that much of Warner Brothers but let's say your dad was John Warner or whatever and he he created Warner Brothers a long long time ago and after all of the inheritances and splits and so forth you own a million shares what does that mean you you have $8 million right because each share is $8 and you have a million and you could sell them for around $8 maybe it' be $795 5 maybe it'll be 805 maybe it goes up a lot it goes to 10 but you own 242,4 50th of Warner Brothers not quite 1% let's say John Warner or whatever his name is I'm just making that name up was very generous and you had no brothers and sisters and you were the sole Heir and you had 24 million shares so what is that chat like 150 million maybe 200 million yeah maybe $200 million and you own 1% of Warner Brothers what if you owned 99% of the shares what if you owned like I don't know 2.4 billion and there was only 50 million shares publicly traded but your shares you own like 99% of the company well I would just multiply that times eight and that would be What's called the market cap so that's just the the all the shares outstanding times the current share price and we did that earlier that calculation came out to be 19.6 billion so that's what this company is worth when we say what's the market cap that's kind of what the company is worth and this number is called the shares outstanding and this number is called the stock price and if you understand all this like you're actually got a good ways of like stock market 101 if you really understand this um you're sort of past stock market 101 now stock market 102 it's going to be a little harder and this is a really perfect company to teach the stock market 102 um and stock market 102 revolv around this concept called Enterprise Value so market cap is how much it would cost right to buy all of the shares roughly 20 billion and that's important because if somebody says well um Warner Brothers makes four billion a year well that would only take me five years to buy uh for for Warner Brothers to make all of its money back for that 20 billion if that makes sense like it would be such a good deal if Warner Brothers made four or five billion a year but if you tell me Warner Brother only makes 50 million a year Well 50 million is a lot of money to anybody but that would not be worth 20 billion $50 million a year income company is maybe worth like 1 billion so I would avoid Warner Brother stock if that was the case and of course we can look at the financial statements and decide but what is Enterprise Value well it's part of an equation that's really important involving cash and debt Warner Brothers has cash and debt why well any business has cash and debt debts not necessarily A Bad Thing by the way you might borrow money to buy another company which is what happened here but what if you owned all those shares again let's go back to John Warner and you inherited all of um Warner Brothers so you inherited every single share and the company has cash in its a bank account because it's a company right it it has operate and how much cash does it have well you can look it up I looked it up in the 10 q and it's 2.9 billion it's a lot of money right and you say hey I own all the shares or most of the shares of Warner Brothers I want you to give me all that money the CFO would have no choice but say okay where should I send the money because it's your money you own all of the shares that's standing and if you went on the stock market and you had the money maybe you're weering Buffet and you started clicking by on your Robin Hood and you spent all of your money or some of your money or whatever buying every share of water Brothers you actually also own the cash right you own all of the assets of the company you own the movies you own the TV channels you own the movies that haven't been made yet you own the video games you own everything and they have a lot of stuff you own bug bunny uh which I think is a Warner brother's asset um all of those things become yours um and the company's still making money and so forth but the company also has debt and if the company has debt you also owe that money now it does not personal recourse to you but the business the debt of the company is gigantic it's 20 it's $42 billion in fact they have more debt than the company's worth it's pretty wild $42 billion of debt and three billion of cash so if you were to buy this company out and you tried to wire out this three billion the problem is your your lenders would say wait a second you got to pay me first you owe $42 billion and the business is only worth 20 billion so the Enterprise Value is a way of reconciling all this so what we do is we do Enterprise value is equal I make this a little thinner if possible Enterprise Value is the market cap which we get from over here the 20 billion minus the Cash Plus the debt and that's the Enterprise Value what's important is to answer the question why and there's a lot of ways to answer this question but again if you think about the stock as this box when you buy a stock you're buying a piece of the Box what's in the box all of the company's assets which I'll say are green like cash property and plant intellectual property but you're also buying a share of the debt of the accounts payable things like that and the stuff in the Box determines in some part what the company is worth so if the stuff in the box is negative 39 billion of cash you have to take that into account that when you pay 20 billion for the Box there's- 40 billion in the Box too so the Enterprise Value we calculated is 59 billion it's $59 billion so if the company makes 5 billion a year it's a lot less attractive than we thought why well we have to pay this debt off and it's going to take us nine years to pay that off and then it'll start going to the cash uh you know bank accounts which are yours but you still have to now get this debt lower so the Enterprise Value is often what I look instead of the market cap often they're pretty similar in this case they're wildly different because Warner Brothers has so much debt sorry for the basic example but sometimes I want to make sure you understand uh Wall Street 2.0 I'm sorry Wall Street 10 102 or stock market 102 101's pretty easy now as you can see Warner Brothers makes a ton of money uh in fact before interest in taxes they're making like six seven billion a year so they're going to pay off that debt pretty quickly and by the time the debts like half paid off it basically is like they not affecting the company right now they have so much debt they really have to kind of get rid of it but the way you get rid of it is with your profits and a billion every quarter means it'll take about 40 quarters before the debts gone 40 quarters is 10 years like other companies they have a cash flow statement cash flow looks a little weird weird actually but the other weird thing is that this isn't a Growth Company it's an old Media company that isn't that exciting you know they're not doing exciting things no media company really is doing exciting things media is being torn apart by the internet um now some managers are really good and they find a way to grow even if they're in a crappy industry and I would argue that right now the media industry is a pretty crappy industry but once once they get out of all this debt from they that they had from combining Discovery in Warner Brothers or basically AT&T owned Time Warner and they merged Time Warner with discovery okay so Studios try to understand the business a little bit better okay so Studios is so they release Dune Hogwarts Aquaman and then there's networks networks is TNT like all the all the normal um Time Warner stuff and then they have HBO Max okay I think I get this so content this films Etc is that in distribution it's h Max it's just a little confusing to me how they segment this this merger is actually closed while back right so 10K will be useful they closed in [Applause] 2022 give us one of the biggest mergers ever okay Warner Brothers Motion Picture group they own DC Comics interesting interesting CNN Discovery Channel Game of Thrones Batman of course Looney Tunes all right so Studios is films makes sense networks is TV and then they have DTC but they also have distribution which I didn't really understand but all right networks is television simple right [Applause] content makes sense it's interesting social media like people making their own content like inen Ross or uh whoever you know and then celebrities kind of owning their own ability to make content on Instagram or on wherever that's kind of killing these companies and it's hard to have a 360 deal with somebody like the rock or something like that like he's got his own assets and companies all right so here again they have distribution so annoying advertising and content but earlier they said it's Studios networks DTC Studios seems to me to be content networks to me seems to be distribution I don't know this thing's like kind of [ __ ] maybe advertising is Networks I don't know so so dumb to me okay they have eaab by segment too so networks is their most profitable segment at least that tells us something yeah I get that I get that like all three of them are in different buckets I I sort to get that but it's just like content is like I don't know somebody made a unow joke in chat about my mother I don't appreciate it um my mom is a nice lady leave her alone your mother TR okay so within Studios I see the it's all content so all of the studi revenue is recognized in content which makes sense within networks all of it's recognized in distribution uh well not all of it but like half distribution half 54% distribution 39% advertising and the rest content what's the rest 80 7% that makes sense right because like they do CNN but they don't charge for the content they charge for the advertising they get a little bit of content maybe from some something or other but uh CNN Plus or something I don't know but most of its distribution to like Comcast pays them and then they get some advertising something like that and then DTC is all distribution okay but net net the company is not growing and and I'm happy about this [ __ ] media man it's making it personal for a second but quarterly it's not growing after the merger obviously they they went through a gigantic growth e [Applause] [Applause] [Applause] [Applause] [Applause] e [Applause] [Applause] let's assume that they have the same operating results forever which kind of is like me what media is right like Looney Tunes and some of these films and stuff like that they're like very like one brother's been around forever right a lot of us grew up with Looney Tunes I know I did e [Applause] [Applause] go [Applause] [Applause] ah taxes forgot about taxes very important Cala wants a lot of taxes all right I get 11 bucks it's at eight I don't know to me like companies like this will always have like a way to exist but like I also think the nature of content is changing dramatically like CNN is actually grown quite a bit so I'm not sure that's where it's going to come from eventually CNN is going to kind of go away I mean cows have to go forever companies live in perpetuity they're not like people will movies go away I kind of think so right yeah I think yeah a lot of the stuff yeah could be like AI so there some threat that there's going to be some of this content going to social media I mean more of it right people might make their own movies stuff like that maybe it gets easier to make content in the past it was harder celebrities make their own content so forth look at uh Mr Beast for example so yeah I wouldn't touch Warner Brothers it's not compelling enough like the manager zaslav or whatever his name is he's pretty good I just don't well I mean this isn't my space and to me I also have an emotional hatred for media so I'm like not the best person to like really um look at these businesses and the massive amount of debt like usually helps kind of things kind of go wrong it's a really big bet on content because like between HBO films and I would argue even cat's content basically it could be a Ubi play if you think about Ubi people have nothing to do with their time but but taking content but video games are also kind of a big competitor Here video games and social media seem to be winning the content fors nobody wants to watch movies you know they want something cooler if you think they'll grow at all it's a decent why but last quarter they didn't grow and all the stuff I'm saying right now like is it net positive for the company because some of this will help lower their costs too right doesn't seem to be a net positive I think it's a net negative but I have to be open-minded about that so like if they have a quarter where they grow like at all it's really good long I think but they have to show a way to grow in a pretty tough media climate like TV is going away right so like how do they do networks like how does networks work half their business you know is networks they own game studios Warner Brothers games yeah it's not really a serious Studio Hogwarts [Applause] games are pretty low margin too games aren't exactly uh they can be high margin but they're it's a drop in the bucket for these guys it's a it's a Content company all right that was fun I wish uh I had time to look at every stock in the stock market I do not um most of these picks so if you're in like Zoom or um ioans they came from the godell chat room there's a lot of really smart people there so if you want to join godell uh and jump in the chat room please please feel free to do so it's a godell num um nuum let me give you the link that's right there you see it Godel n.com um it's 40 bucks a month the price is going to be going up a lot as we add more features so um and it cost us money to add those features uh so if you but if you subscribe you get to lock in your price for life and you can also sell your account down the road it's probably going to be pretty expensive because Bloomberg's $3,000 a month so Bloomberg is uh our competitor and we're looking to sync Bloomberg over the long run um but yeah if you if you're in the godell chat I'm happy to look at stocks for you if you're not you know I have to prioritize those people sorry and my method of looking at stocks unfortunately is so long so if you just throw tickers at me I'm not going to have the time to do that but um there's a lot of smart people there doing a lot of smart ideas a couple of my very wealthy friends are in there too so I have a couple of uh aces of my sleeve there so some of the guys that have like names like cat guy 222 or you know nerd autist 135 some of those dudes are some famous guys so um check that out and if you've ever used Bloomberg you'll find goodel to be exactly like Bloomberg other than that yeah I'm um got a lot going on I've been programming a lot so maybe I'll stream later tonight some programming some video games something unlike um unlike uh just stocks I've been streaming a lot about stocks um because I'm trying to make sure that I'm as close to it as possible and I got some couple good investment ideas out of it so uh Warner Brothers I'm not so hot on like it's okay Zoom was a [ __ ] awesome you know that was really cool um iance I like too um but uh it's always nice to look at socks for people because you might you might find something cool uh all right guys well thanks for everything oh this is the godell website you know on Wall Street you're not supposed to ever use your mouse so we designed a system that you don't have to use your mouse but it's pretty complicated to learn it's like Bloomberg you have to learn all the key strokes if you don't understand the keystrokes one day I'll make like a howto to use the system um because it's really not simple anyway guys I love you see you guys soon adios amigos