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My graduates from my school being forced back drop bag drop mic drop back drop drop.
Stock market investing right, talk about it.
What is your theory but from buying and holding and day trading, because that's kind of like the two trains of thought and investing. It was like day trading. Anybody's not familiar day trading. That's when you're actually buying a stock and you're trading it in today sometimes like within a couple of minutes, and you're getting your profits. Whereas buying hold, there's more of you're buying and you're holding
long term. That long term could be six months, a year, and ten years, twenty five years, but you're not looking to make quick decisions. So what's your theory between buying long term and day trading?
Alright, So with buying long term, that's where the wealth is at because when you buy a long term you're not affected by the short term activities that go on in the market, and you can't control that. So because I can't control that, I want to say I'm willing to wait that out.
Right, whereas with day trading, it's a high. It's like yo, it just went up.
Im about to get this bread and I'm gonna get out. But what people don't tell you about day trade and I have nothing against it because the money in it, but those capital gains taxes that come with it going to eat away at your profit. Right with stock market, With the way that I invest, my goal is to just hold it at least for a year and a day.
So all right, let's talk about that capital gains for most people, it's like fifteen percent for every person.
Nah, twenty twenty nine, twenty eight.
Short term capital gains, Oh yeah, you go, You're gonna go with eighteen.
Yeah, because long term capital game is fifteen percent. So yeah, so short term capital gains, yeah, it's higher. So capital gains is when you sell a stock, you gotta pay taxes on that. And as you said, the profit and the short term capital gains is more than long term capital gains, which is an incentive to hold it. And the long term capital gain started a year, right, right, So if.
I got I bought a stock one hundred dollars, I made one hundred and fifty. I'm paying a tax on the fifth.
You're gonna pay a tax on a fifty.
Now, if you hold it for a year and a day, you're only gonna pay about twelve percent. If you hold it for six months, you'll pay about twenty two. So the goal is just and so the goal in building wealth, and it's simply this. It's not about how much money you make, it's about how much you keep.
That's the fact.
So for me, I want to keep as much as I can. And so if I got a hold it for a year and a day. I'm cool with that. I'm cool with it because I've gained equity in it. And if they're paying divid dandces, I don't got some. I don't got full quarters with the dividends. I mean my bread, I'm good. And that's the part of like trading that people don't talk about.
Right.
It's like you said, it's not sexy.
It ain't sexy, and they want they want short term gratification without you know, being in it for the long haul, right. And the thing about it is that nothing happens overnight, nothing, and you don't. You don't build wealth overnight as well. And it's important. I always tell my climb my financial advice. I tell my clients whole time, you have to you have to diversify, Like you can't put all your eggs in any one basket. Right, You got diversified, so you
might have real estate, but it doesn't. It's not healthy to just put every dollar that you have into me now, right. It does. It's common sense for a lot of different reasons. But stocks is a key wealth building tool. It should definitely be part of somebody. Most people are invested in stock market without them even knowing it because of the
four one K plan. So dividends, right, because this is something that we haven't covered, and a lot of people have heard of dividends, but they don't fully understand what a dividend is.
So what is a dividend?
You said, that's one of the strategies you use. Yeah, I love them stocks with it.
Yeah, So what happens is dividends are a portion of the profit that companies pay to people who are invested in a business, not the revenue, but the profit. So if I have a business that brings in ten thousand dollars a month and I profit five thousand dollars a month, then out of that five thousand dollars, I'll take a percentage of that, which is called the dividend yield, and I'll pay it to my investors as a part of saying hey, thank you for investing in my business.
Is it paid equally or it obviously, depending on how many shares you have, you.
Get more not. Yeah, well the dividend is the same.
So if I pay fifty cent a ship, everybody, which is two dollars a year, everybody gets that depending on how much you have. If you got five, I have ten, you have fifteen, then we will all get a different amount, but the underlying asset value is the same.
So what are what are what are some top companies as far as dividends these days?
What are they at?
And T pays six that's major now they So this is a dupe part. So we talk about real estate, right, the real estate aspect of the stock market, which is called real estate investment trust, which is a rip, which is saying I can own Walmart as a business, and I can own the people who Walmart pay rent to because they don't own the building, they just own the name. Like Amazon has a warehouse, I can own Amazon, and I can also own the warehouse who pay who Amazon
pays the rent to? Rates pay higher dividends. We talking twelve percent, nine percent, seven percent, So individual stocks, uh AT and T Macy's centuryly, Now that's a bad business, but they pay a high dividend.
That's what it's called a dividend trap. We're not gonna get into that.
How they disperse quarterly, how they disperse.
So every business is different.
So with a lot of the rates they come out, some of them pay monthly and some Remember I was telling you that I have businesses.
One of my businesses is Apple Reality.
They own one hundred and twenty eight Schratons and Hilton's and two hundred and something Marriotts. They're not going out of business in the time zoom. But they pay me, I think, at a nine percent rate on their rates and they pay that monthly. So every month they're paying me.
So that's not sending the money that you have invested.
No, that's nine percent of the stock price. Okay, right, so that's all the dividend yield is. So a dividend yield is this. If the stock price is one hundred dollars and a dividend yield is five percent, then your dividend is five percent of that one hundred dollars.
That's what you're getting paid. Okay, that makes sense.
It's passive, superpass passive, but you do have to have large amount for it to It's the truth. But you were saying that you have to start looking at it like, okay, just to pay my cell phone?
Your freedom?
Can you talk about at and T but you So what happened to me was I started asking myself, how.
Do I buy back my freedom? Right? Like, how do I buy it back?
That's right, because it's not given to you, just like you know, shadow slavery, Like I'm not going to give it to you. You got to buy it back. You gotta fight for it. So I was like, how do I buy back my freedom with the stock market? Because you can't save to investigate it back, right, we know that you can't work a bunch of hours to get it back. So the next best thing for me was dividends. So I was like, Okay, what do I use every day? My phone bill? At and T and I have Apple product.
So because AT and T pays a five percent six percent dividend year, I was like, okay, I need this many shares of this business to pay off my phone bill.
Every four months.
Because AT and T pays quarterly, which is every three months, Disney pays semi annually, which is twice a year, and then you have some businesses that pay every month.
Right, So I was like, Okay, if I can get AT and T to pay my.
Phone bill through their dividends full times a year, then I have essentially bought back my freedom because I no longer have to work to pay for that phone bill.
AT and T paying for me and.
So you can do that which your if you're in Georgia, you can use Southern Company, which is another great dividend business. How much is your phone bill and your light buil eighty one hundred dollars? They pay like a three four percent dividend. Figure out how much the dividend is per quarter, how many shares your need of that business, and then.
Let that pay your light bail.
So if you can give your dividends from a business to pay your light buil and your phone bill, you've bought back some of your freedom because now you can take that money and invest it and do something else with it. That's optimizing your money. The money is just a tool. We know that much. So if we can use the tool to do that it's supposed to do, then we get maximum value for it.
And that's so once you fully understand that thing, you start to understand that. It's like Spanish, right, So I don't know how mean Spanish people in New Orleans, but they got half of like seventy percent of New York is Spanish. Maybe not fifty percent, Yeah, fifty percent of New York is Spanish. So I say, I have to say when you're around Spanish enough, you start to understand
it a little bit better. Maybe you might not be able to speak it, but you can kind of have a general understanding of Right, the same thing with investing. When you're around the language of investing, it starts to make sense and you realize that they're all kind of similar. It's just like actually when you learn foreign languages, like Spanish is similar to French. They all come from like a Dane. Yeah, they're all kind of similar. I forget
where they actually the route came from. But long story short of it is that what you just explained was the same theory that dj MVY explained to us. He says that he doesn't buy any liability until he has an asset to pay for. His thing is real estate, So he buys a home and now he has a home to actually pay rental for his Lamborghini or something like that. Like what I'm saying, So you just bring it down a small level.
But because I mean, that's key though, right if you break it out a small level like.
Well, yeah, well and then and then also people have to understand too.
Is that so people might say, okay, well I got to put two thousand dollars into a stock to get one hundred dollars diffidend, it's not worth it. But the thing about it is that it's not like you're paying for something. You're investing, so that two thousand is going to grow over the course of time while you're getting your diffidends. So it's not like you just putting your money into never ever Land. It's actually going to an investment that will probably gain value over the course of time.
But in the meantime, you're actually gaining income that you can use via the dividend. And now you can actually use that to support your lifestyle because, like you said, you got to find a way to actually make money while you're sleep. That's what Warren Buffet said, right. He said it said if you don't make money while you're sleeping works. So by doing that, now you're actually Okay, Now I can, like you said, you can focus on Okay,
now I did that. Now I gotta do something to pay all right, I got to pay my mortgage, and I gotta do something to pay my card bill. And then before you know it, you're not actually paying anything yourself. It's all being paid for you, which leaves you more money because that two hundred that now you can actually reinvest and do other things and just kind of like a domino.
Fest like Lord said, but it's like yo, I treat money like little soldiers.
They have to go work, listen.
But also also he's forgetting something that's major, the ownership.
Yep, you feel me.
So while your money is working for you through the dividends, your ownership, your equity is also increasing. So that's how you like you leverage the game with that.
And that's something that people don't understand either. It's like people's like, well, everybody's not an entrepreneur. I don't want to own a business. There's a lot that comes with owning a business. But there's more than one way to own a business. If you buy a stock, you're an owner, and that come that's one that's probably the easiest way to own a business. Now you're not going to be a majority owner, but it doesn't matter, it doesn't you're still an owner.
Something better.
So Warren Buffett owns six percent of Coca Cola, right, so he's still not a majority owner, but he still has say sol and this is the one thing about the stock market that I love. I still can vote on every business that I own, and they have to acknowledge me, like, I literally bought three shells of brickshot have the way B. Let's make sure I say.
That, B.
What's what's the add hundred somethings.
Go up to one hundred. It's three hundred and some thousand. There's a difference. It's a big difference. So let me say because I don't know nobody to be like, hey man, you gotta you ain't got no man.
I heard.
Feel it. So I literally bought three shares of Berkshaw b which is.
Which is Warren Buffert's companybody.
Yes, I bought my daughter. That's another thing.
So at three years old, my daughter has five thousand dollars invested in the stock.
Oh I want to talk about that? You yeah? Finished.
But I bought three shares of Birkshaw Beat so I could go to.
The Warren Buffett annual meeting and I had right to vote on anything in Omaha.
Yeah, I went to NIPS. That's when everything happened.
I'm going next year for show for Shure, and the only way you can go is if you own at least one share, right, So I was like, okay, cool, and you actually get to talk to this man.
So I'm glad you said that about your daughter because speaking of Nip. Actually, when we I posted about Nip, you commented on that post for sure about and you were talking about a custodian account for your daughter. So I had put a post up that, like, if you celebrate Christmas or for kids' birthdays, a suggestion is that you know, if you're going to spend two hundred dollars on gifts, maybe spend one hundred dollars on the gifts and one hundred dollars on an anostment.
Right, You like, well, how do I do that?
So I walk you through that.
Yeah, exactly.
So it's basically, I don't buy my daughter toys at all, I told her mom, And I'm like, listen, I'll buy clothes, i'll buy food, I'll buy necessities, but everything else I'm buying stocks. So just walking it's called a UGMA account, it's a custodial com I use TDM ror Trade and all you're doing is is just like opening up a bank account, and you'll just add your kid to it. And what happens is you have actual control of the account until the kid is eighteen. Once the kid makes eighteen,
then they have control. My thing is simple, and so this is how we shift the dynamics, Like that's this ownership stuff is real powerful to me.
My daughter is three and I invest money for her.
Monthly weekly right Right now, my daughter at three can tell you what assets and liabilities are.
These is a conversation that we have.
Right she knows I said what dividends come from, She'll say, dividends come from shells.
She'll say that.
By the time she's eighteen, she'll already be six figures her own network.
That's powerful. That's a whole nother dynamic.
We've put her in position to have privileged opportunities.
Right.
Also, we've now established to her the importance of ownership.
Right.
So what happened with us when we was kids, I don't know about y'all. When I was kids, money was always scarce, like we ain't gonna money for that.
We got bills, right, you know.
But now at three, she can talk to me about Disney stoff.
You know what I'm saying. So for me, that's what I do.
Everything we do right now, her account, I think she had like fifty five hundred because I've been buying these weed stocks since they've been on sale and I bought some for her.
Can it be growth?
What was the name of the account at the bank, the type of account, It's called a custodial account, but when you look it up on the TD Amelitrade, it's going to be called U G and me.
Can it go through? I know you said TD Melitarde, but I'll do it. Is it all through other banks as well?
Well?
I went through.
You can go through Fidelity, Charles Swab most of them have.
Yeah, they have account. They have five twenty nine, which is a college savings plan a couple of different ways.
I don't like the five twenty nine. Why not because it's boxed in. That's true, it's boxed and just you have to use vocal.
Well, they actually changed it with the new tax law and now you canay any form of education.
Okay, it don't have to be used. Yeah yeah, yeah, yeah, you get penalized.
And so with the with the custodio account, she used for whatever she wants at eighteen.
So that's why it's good for you. Now you can build that conversation.
That's why it's good for us to learn how to invest because our kids are going to do what they see us doing. That's just a natural fact. We all are creatures of our environment.
It is what it is.
So we start having these conversations with them at a young age. Like her favorite book right now is a book called the Evolution of Money.
Right, she'd be like that, let's read the Evolution of Money right and three.
You know what I'm trying to read. Yeah, yeah, I'm trying to figure out.
We walked through this as a parent, I'm in educating my son is thest five and these.
What I mean? She read?
She she I will say this she identifies words, all right, Okay, so.
I'm not gonna say like she likes Yeah, I'm not gonna say like she on some dougie.
She identifies words now, But that's shouldn't be powerful, like you said, because the parents have to leave it by example.
You have to if you don't have an example for.
You, Ernest, what's up?
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Kids, then they're going to get the example just from pop culture, world music, world streets.
Like you know what I mean.
So it's extremely important. And like I said, it's just seeing different people in different conversations, and it's like that's one of the cool things about this podcast. It's like we have these conversations and if it's like we could be like people on the basketball court or just you know what I mean, like, but we're actually talking about things that are really important, you know what I'm saying. So it's like a cool feel because it's not stuck up,
it's not fake, it's not phony, it's natural. And a lot of times until yeah, people feel like they have to like dumb themselves down to be accepted or you can't. You got to watch how you speak because you don't want to sound too intelligent.
Right, these things is real.
I'm glad that that I think that the tide is starting to turn on that it is.
I actually like I love the the temperature that's going on right now, just with even with you all, you know, I'm like, bro, like y'all, y'all shifting the culture with this. Appreciate you know what I'm saying, because there are a lot of podcasts out there, right, everybody.
Everybody has something to say. It's a fact.
That's a fact.
Right, Everybody has something to say and they want to say it in their own unique way. What I love about y'all have it. However, you're gonna come speak speak it. You feel what I'm saying like, there is no Hey, we can't like whatever you want to speak about. But it's all about the improvement of the culture. As far as you know financial literacy, and I know you was in the finance.
Bro, so that's a whole nother life.
Next, right, the ownership ownership, Right, nobody's telling the right. Make sure y'all cover this bay. We're gonna put the cameras. Werena go hard speaking, right, it's problem man.
I remember you posted something.
You said something about ownership, something to be posted like recently, and I love when you post certain stuff because I can come in there and just go harder. Right, I'll be waiting, like, come on, man, come with it. Like so, and somebody complained about you talk. It was about taxes, and I said, the problem is that because somebody said, why don't they.
Teach you the wealthiest people?
Yeah, And so I was like, yo, why would they teach us this in school?
It's not that they should teach us. Why would they? Right, So this is a dope analogy that I always use.
So we know that the lion is at the top of the food chain, right, So he's not the king of the jungle, like we feel like that's some bullshit. Right, here's in a Safaris so I'm not gonna say that shit. But he's at the top of the food chain. The lion cannot tell the zebra, the impilor.
Or the water buffalo how to get away. He can't. If I tell you how to get away? What do I eat? What do I eat?
Either I become a vegetarian or I eat my own kind? Right, So he can't and if he did, they would tell one another how to get away.
Same thing with this the upper echelon or.
The financial predators, we are the financial prey. I can't teach you how to get away, but if you learn, I can't stop you. I can't stop you.
Wealthy people don't meet wealthy people. Rich poor people do. Fact, because we.
Have no relationship with money. So I can't teach you how to get away and what I'm gonna do. But I'm gonna teach my kids how to be predators. And I'm teaching my daughter how to be a predator, not on people, but just how to have ownership.
They can't teach you that in school.
Why what they Yeah, that's like, yeah, that's what. That's what the five percenters say, like eighty five percents by tempercent, which is like the bloodsuckers are the poor and the five percent the poor righteous teachers. But we're not poor, but we.
Right facts, we're gonnaerate that.
We're gonna take the poor part out that because like that, we we're gonna even pay the full like that, you know, because yeah, we're gonna We're gonna liberate the people from the bloodsuckers of the poor for.
Sure, for the facts.
Appreciate that.
Can we just talk about investing in ETFs.
Let's talk about so explain Can you explain what the ETF is and then how so ETF is an exchange traded fund, So it's basically this is this is so all my people tell me, like I just had the dopest analogies, bro, Like I come up with them because I love to relate to people. Right, So ETF is like saying this without even getting technical. Let's say you're going Walmart. Right, You're going Walmart, and you don't know what you want to buy, so you buy the whole store.
That's an index fund.
Let's say you go to Walmart and you want to buy a specific kind of pop tarts. Right, so you go to the pop tart our and you see so many flavors of pop tarts. You're like, you know what, I just want this whole hour of pop tarts, So you buy the whole out of pop tarts.
That's the ETF. Doesn't make sense. So what the ETF is.
It's a group of businesses that operate the same or self simuli products. Example, you want to invest in marijuana, but you don't know which marijuana stock to buy. You buy either a marijuana ETF called YOLO, or you buy MJ And now at this point you have.
All the marijuana stocks. They're all onside. That's an ETF.
Gotcha A trick to that is this, You can buy ETF and because they've already done the homework, because they gonna have the best performance stocks in the ETF. At that point, you can see you can go to what's called ETF dB, which is ETF database.
I'm giving y'all some game, right, good, Like, you go.
To ETF database, you put that ETF in and they'll tell you every ETF that's in the ETF, and then they'll tell you how much of a percentage of that ETF is holding that business. So it'll say this ETF has fifteen percent of cannopy growth. I mean for every dollar you put enough, fifteen percent of that is going to cannopy growth. It may have ten percent of Aurora cannabis. It may have five percent of chromes. So you can literally say, Okay, I don't want to do the homework.
I want to be I'll go to the ETF, see what's one they hold, and just pick the top companies in the ETF. And at that point you went, Now, you don't know the value of it. That's why that's what I teach people about value, how to value it. But if you just want to be a lazy investor, you can all you can just do that because ETF is gonna have the top performing businesses in that sector inside the ETF, and you just picked.
That and indexed funds.
So index funds would be you buying a whole market. Now they are broken down different ways. So you can buy the Dial Jones, you can buy the S and P five hundred, these are indexes as well. Yeah, you can buy a Nastak, you can buy the Rustle two thousand, which are the full majors. Then you can break it down and say, okay, I just want to get a
large cap ETF. So that's all businesses that have one billion, two billion are better, right, so every business in here is going to be two billion dollars or better ten billion. I'm sorry, ten billion are better. Then you can buy a mi cap, which businesses that stop at two billion. And then you can buy a small cap, which is businesses under two billion, two billion dollars worth under two billion dollars market cap.
Yeah, the market cap, so market capitalization, that's kind of how they categorize stop.
Yeah.
And I always like the analogy that I use is like you have giant cap large cap.
Those are like you know, giant companies hundred billion better.
Yeah, Then you have you know, mid cap, then you have a small cap, and you have micro cap. So the thing is that usually and correct me if I'm wrong. The larger the cap, the less volatile, Like it's almost impossible for Apple to just fall apart overnight, and they're also not going to quad droople over night either, where a smaller company, good news can send their stocks skyrocketing,
but then bad news can bankrupt them. So it's kind of like a speedboat and a cruise ship, like a we work situation.
We got to talk about we work. We can talk about we work. But that's called beta. What you're talking about the volatility. So if you're going to invest in the stock, you can look at the beta of it. A low beta means it's not volatile. A high beta means like Tesla, high beta, high risk.
High reward, right.
But McDonald's probably a beta of zero point nine, right, So it's not gonna you know, it's not like you're not about the week. Up to day, McDonald's is at two thirty and tomorrow tomorrow is at one fifty. That's not about app But with Tesla you'll wake up today's at to fifty.
Tomorrow you can wake up.
Is that one to eighty easy, right, So high beta and the market cap is just simply this. If I have ten shares of my business on the stock market, and there were ten dollars a share at that point. I have one hundred dollars market cap. So it's how many outstanding shares on the market times of stock price, that's how much. That's how you can tell what the market cap is of a business.
Can we talk about that? We work situation.
Let's talk about it.
So, yeah, if anybody's not familiar, we work was the talk of Wall Street.
It was IPO. They were the most.
Valuable forty five billions coming in at forty.
Five something.
And they fell apart and now they had to withdraw their IPO. The CEO got fired, stepped down, step down, he lost his billionaire status.
Yes, so today in a day.
So a lot of times people see these stories, they don't fully understand, like how is this possible?
Like what's your take on that?
Well, so shout my people house on the two one six. She had me one day, cousin Nita. She hit me and she was like travel shout out, it's my heart right there. She hit me up on that.
She was like, trapper man, I won't invest and we were I said, oh no, you not know you not. She was like why. I was like, man, these people don't make money.
So one of the things I love about the stock market is it literally teaches you how to be a businessman or a woman because you look at businesses all day.
Right, so they're not profitable.
Well, a lot of companies aren't finish off.
So they aren't profitable and they don't have the revenue to back it up. So like, not only aren't they so you can actually not be profitable but still have a lot of revenue Netflix, you know what I'm saying, but Uber or Uber, but they aren't profitable and they don't have the revenue coming in. And it's so when I invest in the business, I look at this. I always looked at the inverse, meaning if something bad happens, how likely is it for this stock to fall?
So we know we work.
It's based off of entrepreneurial space, right, so they rent space to entrepreneurs. So I looked at it like this, they already are not profitable if something happens as far as recession wise, well, entrepreneurs rather come sit in the room at their own house and a table and do work and not pay that rent or would they still pay that rent? He probably would cut that rent out. So that business model isn't to me. It wasn't something
that has a lot of longevity in it. Now, dude was a bad seal with a great idea though, But when he got the bread, he just was on some wild and he was on he was some party city wolf of Wall Street off the butchees.
I inventioned.
Yeah, he had a lot going on and he didn't want he didn't want up it.
But once, so this is the thing.
Once somebody who's a major investor said, yo, I'm pulling my bread soft bank, which is up.
Yeah.
Once they're like, I'm pulling my bread, you know, like do it on the wrong level. He living his life wrong. Now other major investors are like, wait a minute, I'm gonna pull my bread to that even that ship.
Ye.
And so now the people nobody wants to get stuck hold in the bag. So the next biggest thing is do you gotta go. We don't want you to go, but you gotta step down because we need another face. Right.
And so he was stubborn for a while, like nah, because he made the business. You know, it's harf you let your baby go, because even if you step down, you know what's coming next the ship be thinking. So I just thought it was a.
Bad business as a whole out They get what you think about.
I think that it has potential because there's a lot of coworking, is one.
Yeah, like actualpeak back the night, back there the night.
It's interesting what you said as far as economic downturn, because I was gonna ask you about the recession or people saying it's to come to be a recession. It's interesting. I never really thought about that from that understand point. But it makes a lot of sense as far as to say, Okay, if if worst comes the worst, I'll just stay in my living room, right, I don't have to you know, if you're going to offer you don't
have to have an office. Nah, if you're doing that right because other than like holding meetings which you just pay.
Zoom yeah or so I'm invested this, it's just not sustainable, right, Like I might not have meetings every day of every month.
I think people are working differently now too. It's kind of a whole business model to actually go and like I have a office I probably go to like once a week.
Exactly.
You don't need to physically go into an office.
Like and you're them once a week. But you know what I'm saying, Like, what's the point.
It's not you may go just to like clear your mind. I'm just going, yeah, let me go ahead. But yeah, you don't need it, you're right. So that's what that's what I thought about it. Now the bad part some of some of them are actually profitable. So at that point, the whole dynamic of the business changes because if you're a profitable business in an economic downturn, So now we're gonna tap into something that's deeper called free cash flow. Right, So this this is the money that a business has
that's not attached to anything. So after they pay the bills and after they pay everything, they still have this. Or Apple is like one of the has the biggest, Like yo, they free cast is like crazy million, it's like one hundred and ninety billion. So what happens is in case of an economic downturn, they still have money to keep the business going. If you a profitable business and you have a good free cash flow, you can still sustain for a given amount of time.
But if you're a negative all around the board, you're going to collapse. And so for me, that's something I look for in a business.
I need you to have a mote, which is a competitive advantage, and I need you to have a good like free cast floor.
I need that to be positive.
So when you look at a business, what are you looking at? You're looking at their earning report? Do you like?
What do you actually look at? How do you evaluate what a right?
So I look for a few things like so it's like me looking at a woman no to nobody, like, I don't want nobody to say right. So you have what you look for, and then you have what's there right, and then you ask yourself, how does this fit to what I want?
Right? So what I do is I look at The first thing I look at is this.
I never look at the stock price because the stock price is only based on how you and I feel about it, right, So first thing I look at who running a business? And I put this on my page all the time. How a person runs a business tells me a lot about the business because if you can't man, if you can't run the business, I can't make no money. So I'm gonna look at when did you get into a position of the CEO? How did the business run before you? And what have you done since you got
taken control of the business. That's first and foremost, So I won't look at management first. The next thing I'm gonna look at is do you have a competitive EDG right? So like, what makes you better than everybody else? What makes you sustainable? So, for instance, if you bought Coca Cola, so you have to ask yourself this. If you're a retail business, what does your shelf domination look like? How do you dominate the shells? So if you go into sodas,
Coca Cola dominates. But if you look at the overall business, Pepsi does. Pepsi has more products, But if you look in that sheer beverages, Coca Cola dominates. Even when you go to a fast food store, they're predominantly coke products.
One of those things where they coined the names like coke.
Coke, and.
Bingo.
When your name becomes synonymous with something, you have a competitive edd We have that conversation.
It's like dandid Bingo's It's like we can go hold that style of shirtolo, even if it's a cost shirt, it's a polo shirt exactly. So I'm looking for that doable competitive edge and now we're going to tap into earnings. So I want to see me, what have you done the last eight quarters? Have you beat earnest the last eight quarters? Meaning have you made profit the last eight quarters? And then I want to look at your free cash flow.
I want to look at work in capital, which is current assets and current liabilities, meaning what you have in these next twelve months. So something happening in the next twelve months, it's that money positive. If it's negative, we got an issue. It's not bad, but we got an issue. If it's positive, then I know you can hold it down. It's like having money and sale accounty.
So when you're looking at all these things, are we looking what are we looking through publications?
Are we going to a site like is it like? Yeah? So face value.
You can go to Yahoo finance just face value. You go to y'aho find and you can do the numbers. If you want to dig deep, you go to that company's quarterly report, an annual report. So what happens is it's another thing like while I love the stock market, if you're a public company, you have to tell people what you're doing has to be public. It has to be so even your competitors get to see what you're doing.
So that's what I do.
Like if I like a business, I won't see what the competitors doing, and then I won't see how are you at matching up to what they're doing?
Are you shifting that way right?
So I won't see are they how are they moving to all the future because we know every two years the business cycle changes.
That's why when you hear like on CNBC, it's like, oh, their quarterly reports coming.
In and go into every have too.
Everybody has to do it. And so if it's a dividend paying company, are you increasing those? If you increase from those, that mean you have some profitability, because no business can consistently increase paying me more money if they don't have money.
Soot about the education?
Am I going to d right now?
No?
Man, perfect.
My graduates from my school being forced bad drop bag drop my drop bad drop drop.
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