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You want to know where.
The current price is because you want to know where it falls in its range. And its range means it's fifty two week high versus fifty two week low, right, So that range is where it's at for its peak for the year and where it's for it's low for the year. Now, if that current price is near the peak, and this is what we always tell people, but nobody listens.
You have to wait, God'll wait. If you buy the High, you will die. I'm sorry, I'm so sorry. Please write it down. If you buy the High, you will die. You are going to be upset and you're gonna text me and Troy. Hey, I need to talk to him. Hey, don't do it. Everyone who bought it at Apple water High, they are shipping their pants right now.
I'm like, I told you to wait.
Even the greatest companies have pullbacks, which is a sign of the overall economy.
Right, So this is important, right, You want to make sure that you're in a range. Like I would say a ten to fifteen percent pulled back from it's high. Some people might go further twenty percent, which was equal of correction. So anytime a company pulls back any between ten to twenty percent, that is considered a correction. So if we look at Apple, which was at one hundred and ninety dollars now going down to one sixty seven.
But these are the times when you want to look at so when you start seeing red, and that's why we always tell people never, never, never be fearful. When you see red, this is the time you should be greedy. This is the time, you should be like, all right, I was patient. Now my patient is going to pay off. It's pulled back to a point where I cannot get into the investment and see the benefits on the appreciation all the way up. So the fifty two week and
fifty two week high and low are important. Profitability is important. Is the company making money?
That's so key. I know it seems like a basic thing. But some companies people ask about they are negative. So if the company is not making money, how do you think that the company is going to grow. It may grow off speculation and may grow if it was an aspect, but a lot of those companies end up dying.
So please like, make sure that the company at least is in profit.
Ability is important, right, profit margin and this is something and we'll do two together. Right, We'll do profit margin operating margin, because I know when I'm listening sometimes and I'm like, we'll use Disney for example, like we did the other day, and we're like, wait, what's the profit margin? The profit margin means what?
How for every one hundred dollars, Well, how much are they're keeping? So for Apple to be a multi trillion dollar company, they keep twenty five dollars out of every one hundred that comes in phenomenal business model, especially at scale. So if they're keeping between fifteen percent to thirty percent, I'm in love with it. If it's single digit profit margin, it's a business I don't want to invest in. And I think it's one of the purest ways you can
evaluate a company to see if it's worth investing in. Like, I want to pick on Disney again, but if you do look, Disney profit margin is two point sixty five percent. So if I had a business that for every one hundred dollars I came and I kept two bucks, what you want to invest in me? I don't care about the I ain't King three that they got in the vault, Simba died. Sorry, Until you get that pret well in theory, until that profit margin is higher, I'm scar.
I hate all of Disney right now. Now.
I wanted to win for Troy as an investor, I'm like, I can't.
There's no way on.
Earth I can touch that investment right now. So profit margin matters a hell of a lot.
It's a it's a huge indicator, and it's the reason why we love in videos so much. When we talk about profit margins Like we brought up Apple and when you hear twenty five percent thirty six percent, I think for Microsoft, when you're hearing videos at forty eight percent, nearly fifty percent profit margins every hundred dollars, they're keeping fifty of it.
Yes, And if they pick up one hundred and twenty million from UH from Meta for the metaglasses, like not knowing billion, they're keeping forty eight percent of that. Like you see why Jenson's so happy on stage. Jenson looked like a rock star at that last conference. I would too if for every billion came in I was.
Keeping for Yes.
I think Zuckerberg said they're buying three hundred was it three hundred thousand, three hundred thousand GPUs from the video at an average price, let's say the price, and they said that the prices could range from twenty thousand to forty thousand per chip. You're talking about a six to ten billion dollar transaction. If they're keeping a fifty percent profit margin on that transaction, keeping.
Three billion off of one company from.
One company, they've they've they've made three to five billion.
Come on, man, which is like unstoppable, I.
Mean pretty, that's pretty remarkable operating margin.
Yeah, operate margin. Just think of it as like gross and how much we'll a room they have.
So if you go to Nvidia, they have fifty four percent operate margin, which is amazing. So I'm looking at the differential between how much operating margin and how much margin they're keeping inside of the profit margin, and it's really a good range. All that really means is like, for they're managing the money that comes in incredibly well. Like if they had let's say fifty five percent operate margin fifteen percent profit margin, I would be like, what are.
You doing with the money?
You're doing some music industry accounting with the money that's coming in, right, But they're doing a great job. For most of the money that is coming in for operating expenses, they are converting that into profit, which I absolutely love.
Perfect revenue sounds self explanatory, but this is the money that is being brought into the company, right, So when we talk about revenue, that's important, But the next line is equally is important.
Right.
You could be bringing in money, but what is the debt?
Right, So when we.
Talk about revenue, we talk about debt. What we're really encumbassing is the balance sheet. So you might hear people talk about what's the balance sheet, what's the balance sheet, what are they bringing in? How much is it costing them to bring that in, and what is the overall debt that s left over after that that revenue is brought in. So those when we talk about balance sheets, that's the encumbass in the last one I think is I mean when we talk about importance when we're looking
at a company. Now we're telling you these things, but in a set we're going to show you exactly how to find these things, so that when you try to evaluate the company, you can know exactly where they are and then you could say, all right, this is a
good investment. This may not be a good investment, like you might hear all the news in the world, right, Like Uber would be like two years ago, if we put Uber to this test, yeah, we would look at it and say, I'm not sure if this is a sound investment right now.
Yeah, it would have been a failed two years ago.
It would have been a fail right because they weren't even profitable. That has changed over the past couple of years. But operating cash flow in encompassed.
That for us, well, I took the last two. I'll let you take this.
Yeah, I always talk about operating clash flow. It's like one of my favorite things to talk about. It's the last line budget on on the statistics for financial the fundamentals for a company, because it talks about how much money they have left over? Right when they have their assets, Yep, their liability is are weighed? What is left over?
What's left over?
A thing we've heard before, right, Yeah, I ass of a liabilities great slogan. Right, that's what's left over? And why is that important? Because when companies have operating cash flow or we could say free cash flow, that means that they have money for innovation. That means they have money for maybe the best hiring. That means they have money for murders and acquisitions.
Acquisitions are key. Yeah. Look, we talked about it on Monday.
Without Instagram, Facebook will probably be dead in the water.
I mean, I put the clip.
Microsoft made a big Bomber made a bid for twenty billion, got it turned down. Great move by Zuckerberg, and Zuckerberg then goes and buys Instagram. And at the time you can argue Zuckerberg was a better CEO than Bomber, But they had to operate in cash flow to be able to make that acquisition for a billion, which has been like one hundred and fifty extra turn for pH risiculous.
And shout off to black Belt that.
When you guys are talking about the biggest or the greatest investments of all time, you spoke about Meta acquiring Instagram, but you talked about Google acquiring YouTube for one point six billion of all time.
Yeah, I mean think about that.
That was twenty years ago. What has that returned then?
Right?
We talked about YouTube by itself is a multi billion dollar company.
Mustily and if they were in public, YouTube were probably number one in that communications list.
Definitely on the ATV. Absolutely.
Yeah, It's bigger than any communications network you can think of. It's far to pass for Rizon or any other service Charter Disney for sure. YouTube is that Netflix.
I would say YouTube is TV for this generation.
It is.
It is like if I said to you twenty years ago, Google is going to go buy all the TV networks in America, You're like, there's no way, And then they got YouTube.
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