Episode 106 - Big Tech Vs Congress

Okay, finally, there's a lot of news this week. I wanted to wait until the end of the week to record an episode because I know there's going to be all this news. But here we are. The first item is at Apple crushed their earnings expectations. Tim. Apple did it again? They crushed expectations. This was exciting for me in particular because I have a huge amount of my portfolio in apple. I've been talking about the stock.

I've been saying that I think it's undervalued even at a market cap of one point seven trillion dollars. I still think the company is undervalued. So that's hard for a lot of But a grasp, how can a company worth that much money be undervalued? I'll be talking more about Apple later. We also have news that they're going to be doing a four-to-one stock split. So I'll go over that. Give my thoughts on it. We have some less positive news, but I still think it's okay.

We have news that u.s. GDP plunge 33 percent and the second quarter. So as an economy gross domestic product is is the metric that we use to say. Hey, this is how much economic activity? The country has that went down about 33. % not the best news but we did be expectations. It was 35% and it went down 33 percent. So this isn't great news, but it was largely factored in already. The second quarter was going to be bad. We should see a strong Rebound

in the third quarter. So we'll look at that. And then we have what I'm most excited to talk about which was this house Judiciary Committee hearing the four biggest CEOs in the country. We got Jeff Bezos. Tim Cook Mark, Zuckerberg and Sundar pichai going before Congress. Answer their questions about antitrust. Congress is trying to paint the picture that these companies are monopolies that they don't have competition and that they need to be scaled down.

They need to be broken up and then you have stiff regulations on them. They're trying to say, we have a tremendous amount of competition. There's a whole great world out there. There's Chinese companies that compete with us and there's lots of companies within the u.s. It competes with us. Now, of course, Congress did what they do, best it, the typical thing. What Congress does is none of

them really have employed. D. None of them have ran companies and what they're going to do is explain to Jeff Bezos, how he should run his company and how to create wealth. You're going to see people that are lawyers that their best skill is arguing amongst each other. You're going to see them. Lecture people like Jeff Bezos and Mark Zuckerberg on creating jobs and creating wealth and competing and that's what

Congress does. So this is a clear dichotomy with this hearing you see the difference between the biggest Business Leaders in the world. Politicians. And what becomes clear is that these politicians Congress? They have no clue of what they're even expected to regulate. They don't know how these companies make money, how they grow and expand, and what their risks are. They don't know what their competition is. And that becomes very clear.

So you're seeing a body of government, all of Congress that has no clue on the thing that they're supposed to regulate. And you can see that very clearly in these clips. So we're going to take a deep dive into this. We're also going to, of course, do a portfolio update and get to questions and emails as well. So this should be a pretty fun

episode. So, let's first jump into this hearing. This is the chairman over the committee. He's the one that's going to give an introduction to why they're meeting with the CEOs. And basically he's laying out the case that these companies are too big, too restrictive that they need to be regulated by the government. Now, this is what I think is one of the most significant risks to these big companies.

If you're an investor in Google, or Apple or Facebook, or Amazon, one of the biggest risks to your investment is government. Intervention is government. Elation. So if he launches really effective attacks into these companies, it could be devastating. If Congress can get people on their side that these companies need to be regulated. That could be a significant risk to your investment. So I'll go ahead and watch and

play this clip. And keep in mind when you're watching this or anybody from Congress, like the chairman here. He's a lawyer which is over half of Congress. He has worked in government about 25 years. Basically, his entire adult life. He's never started a company. Never employed any Buddy, but he's going to make a breakdown of how bad these companies are. So let's go ahead and hear this from the chairman as Gatekeepers in the digital economy.

These platforms. Enjoy the power to pick winners and losers to shake down small businesses and enrich themselves. While choking off competitors, their ability to dictate terms, call the shots up and entire sectors, and Inspire fear represent the powers of a private government. Our Founders would not bow before King, nor should we bow before the emperor? Is the online economy already? He's referring to these companies as the emperor's and kings of our time and that we

shouldn't pal to him. So creating some visual there. I think it's effective. But let's go ahead and transition a Jeff Bezos. This opening statement from Jeff Bezos is pretty epic. It is an awesome opening statement. I don't know how he could have

done this better. This was incredible considering this is his first time in front of Congress, but the way that he humanizes himself reminds people that he's just a person that started a A really big company and the way that he lays out the Journey of Amazon was pretty incredible. So, let's go ahead and listen to it. I was born into great wealth, not monetary wealth, but it said the wealth of a loving family, a family that fostered, my curiosity and encouraged me to dream.

Big, my mom Jackie had me when she was a 17 year old high school student in Albuquerque. Being pregnant in high school was not popular. The school tried to kick her out, but she was allowed to finish after my grandfather. Negotiated terms with the principal. She couldn't have a locker. No, extracurriculars. And couldn't walk across the stage to get her diploma. She graduated and was determined to continue her education. So she enrolled in night school, bring me her infant son to class

with her throughout. My dad's name is Miguel. He adopted me when I was four. He was 16 when he came to U.s. From Cuba by himself shortly. After Castro took over. My dad didn't speak English and he did not have an easy path. What he did have was grit and determination. He received a scholarship to college and Albuquerque, which is where he met my mom together. With my grandparents.

He's hard-working resourceful and loving people made me who I am. I walked away from a study job on Wall Street, and to a shallow garage to found Amazon fully. Standing that it might not work. It feels like just yesterday. I was driving the packages to the post office myself dreaming that one day. We might afford a forklift.

Customer Obsession has driven our success and I take it as an Article of Faith. The customers, notice, when you do the right thing, you earn trust slowly over time by doing hard things. Well, delivering on time offering everyday, low prices, making promises and keeping them and making principal decisions, even when they are unpopular. And our approach is working eighty percent of Americans have a favorable. Favorable impression of Amazon

overall, who do Americans trust? More than Amazon, to do the right thing, only, their doctors, and the military. The retail Market we participate in is extraordinarily large and competitive. Amazon accounts for less than 1% of the twenty. Five trillion dollar Global retail market and less than four percent of us retail. There's room and retail for multiple winners. We compete against large established players like Target Costco. Kroger.

And of course, Walmart a company more than twice Amazon size 20 years ago. We made the decision to invite other sellers. Selling our store to share the scene valuable real estate. We spend billions to build market and maintain. We believe that combining the strengths of Amazon store with the vast selection of products offered by Third parties would be a better experience for customers and the growing pie of Revenue and profits would be big enough for all. We were betting that it was not

a zero-sum game. Fortunately, we were right there. Now, 1.7 million small and medium-sized businesses selling on Amazon. The trust customers put in US everyday, has allowed Amazon to create more jobs in the United States over the past decade than any other company. Hundreds of thousands of jobs across 42 States. Amazon employees, make a minimum of $15 an hour more than double, the federal minimum wage, and we offer the best benefits benefits that include comprehensive.

Health insurance, 401, k retirement and parental leave, which includes 20 weeks of paid maternity leave. We're than any place on Earth entrepreneurial companies, start grow, and Thrive here in the US. We nurture entrepreneurs and startups with stable rule of law, the finest University system in the world, the freedom of democracy and a deeply

accepted culture of risk. Taking of course, this, great nation of ours is far from perfect, even as remember Congressman, John, Lewis and honor his legacy. We're in the middle of a much-needed, race, Reckoning. We also face the challenges of climate change and income inequality, and we're stumbling through the crisis of a global pandemic. Still with all of our faults and problems. The rest of the world would love even the tiniest. Sip of The Elixir we have here in the u.s. Immigrants.

Like my dad, see what a treasure this country is, they have perspective and often can see it even more clearly, than those of us who were lucky enough to be born. Here. It is still A14 this country. And even in the face of today's humbling challenges. I have never been more optimistic about our future. I appreciate the opportunity to appear before you today. I'm very happy to take your questions.

I can't be the only one that listen to this live and thought to myself, I should just buy Amazon stock. I should throw my whole life savings into Amazon. And as long as that guy is the CEO. It's going to continue to do. Well as long as Jeff Bezos is the CEO of Amazon. It's going to be a successful company. This guy made this company not by mistake. He didn't stumble into creating Amazon. The reason it's so big and so successful is because of Jeff Bezos.

That's the reason to Amazon has done so well, so it's opening statement. I thought was very effective. I think anybody listening to this live, is going to have a more favorable view of Amazon. So I don't think Congress really did themselves any favors by having this hearing next up. We have Tim Cook. He did a little bit more of a sales pitch in his opening statement.

He's trying to sell Apple a little He doesn't talk as much about his background, but that makes sense when he's not the founder of the company like Jeff Bezos, but let's go ahead and listen to just a bit of his opening statement. My name is Tim Cook. I've been Apple CEO since 2011 and a proud employee of this uniquely American company since 1998. At Apple. We make ourselves a promise and our customers, the promise. It's a promise that will only build things that make us proud.

Loud and Steve put it. We only make things that we recommend to our family and friends. You can try to Define this difference in a lot of ways. You can call it the seamless integration of hardware and software. You can call it Simplicity of design or a great ecosystem. All of those things are true. But if you want to put it simply products, like iPhone just for when customers consistently give iPhone a 99 percent satisfaction

rating. That's the message, they're sending about the user experience. I love that all these companies mentioned their user satisfaction rating because Congress currently has an approval rating of 18%. So Congress is criticizing these

companies. When Apple has a 99% satisfaction rating, Congress is currently sitting at 18%, But we also know that customers have a lot of choices and there are products, a fierce competition companies like Samsung LG Huawei. Google had built successful businesses with different approaches. We okay with that. Our goal is the best, not the most. In fact, we don't have a dominant share in any Market or in any product category where we

do business. What does motivate us is that Timeless drive to build new things that we're proud to show our users. We focus relentlessly on those Innovations on deepening core principles like privacy and security. And I'm creating new features. Now. I want to pause it here because he's about to talk about the App Store. This is the focus point of the criticism. For Apple. Basically, the critics for Apple say that the App Store is a monopoly.

The Apple has this massive App Store and for developers to make money on the App Store. They have to give 30% of the take to Apple. That's the commission 30%. So that's the focus of the criticism. Tim. Cook is trying to explain how that's not a monopoly, and that's actually a pretty decent feet. When you compare it to any other type of similar store in 2008, we introduced a new feature of the iPhone called the App Store launched with 500 apps.

Which seemed like a lot at the time, the App Store provided a safe. And trusted way for users to get more out of their phone. We knew the distribution options for software developers at the time. Didn't work. Well, brick, and mortar stores charge, High fees, and had limited reach, physical media, like CDs had to be shipped. We're hard to update from the

beginning. The App Store was a revolutionary alternative app store, developers set, prices for their abs and never pay for shelf space. We provide every developer with cutting-edge tools, like compilers programming languages and more than 150,000 Essential Software, building blocks called apis. The App Store, guidelines, ensure a high-quality reliable

and secure user experience. They are transparent and applied equally to every developer for the vast majority of apps developers, keep 100% of the money. They made. The only apps that are subject to a commission. Are those where the developer acquires a customer on an Apple device, and where the features, our services would be experienced and consumed on an Apple device. In the App Stores more than 10 year history. We had never raised the commission or added a single fee.

In fact, we've reduced it for subscriptions and Exempted additional categories of apps. I'm here today because scrutiny is reasonable and appropriate. We approach this process with respect and humility, but we make no concession on the facts. What began as 500 ABS is now more than 1.7 million only 60. With your Apple software. If apple is a gatekeeper. What we've done is open the gate wider. We want to get every app we can on the store, not keep them all.

So, there's this pitch. He's trying to get ahead of this saying that the app store has allowed more businesses to flourish. Look how many more apps are on it. Look how many people are making money on the App Store. This is basically what, what all of them said, what Sundar pichai of Google and what, Mark, Zuckerberg said a Facebook that these companies are expanding growth allowing businesses to grow and they Have a lot of

competition. That's what they're trying to sell Congress. Is that they have a lot of competition. They really don't need these harsh regulations. So let's jump into the part where they actually receive some real critical questions about their previous business practices. This first big criticism that was launched at Jeff. Bezos was about diapers.com. If you're not aware, we've talked about this on the channel.

Diapers.com was a website that's old diapers, Amazon wanted to get into that space because diapers is a huge market and online space. And they went direct competitive head-to-head battle with each other Amazon. The way that they dealt with diapers.com, is they undercut them with price to the point where they're taking substantial losses for every single diaper being sold. They lost hundreds of millions of dollars in the process of

competing with diapers.com. But what that did was show diapers.com, the Amazon can lose money for as long as possible. They can lose money longer than diapers.com, can survive and so diapers.com. Conceded defeat they sold off to. On Amazon invested some money in them. And eventually diapers.com was just shut down. The project was closed. So this is where Jeff Bezos gets asked about that event happening. So you said that Amazon focuses

excessively on customers. So how would customers especially Single Moms new Families? How would they benefit when the prices were driven up by the fact that you eliminated your main competitor? Well, I don't agree with great respect. I don't agree with the premise at the same time. You should recognize him context. Diapers is a very large product category. Sold in many many places not just it is not aligned.

We do have evidence that doors and throw and Kroger and Walmart is this is what happens a lot is. They get interrupted over and over again when they're trying to answer the question. They were just asked this is And it's completely obnoxious with Congress. Is they will ask a question, a very loaded question with a loaded premise, that CEOs, or whoever's, there is starting to answer the question. They don't like the answer, because it actually explains the context of it.

And so, they talked right over them as they're answering it. This drives me nuts, but this is how Congress works. And another thing she says is that Amazon drove up the prices of diapers. She says that without any evidence whatsoever, Amazon can't drive up the prices of diapers, if they charged a lot for diapers. People would go to Costco. Amazon is in direct competition with Costco. And because of Costco's warehouse model that the bulk sizes.

They sell everything in, they can sell things for extremely cheap. Diapers, is their biggest product sold in Costco. If Amazon tried to gouge people on the prices of diapers. They would make a trip to Costco and buy it for much cheaper. So, Amazon has not driven up the prices of diapers. She shows, no evidence of that, but that's what she's saying here.

It certainly is some something that has a really hard impact on. Going to, and I'm really concerned that pricing might have been driven up here by this tactic and I yield back. So to clarify. She's really concerned about Amazon driving up, the prices of products. When Amazon is known to be one of the cheapest places to buy anything. This is the dichotomy here. She has no evidence to say the Amazon has resulted in a net increase in diaper prices.

I don't think that's true at all because, like I said, Costco would bring the price down like crazy or Walmart or the many other competitors. That's what Jeff Bezos. Has tried to bring up, but she'll say she's very concerned about that, without any evidence. Next. Let's move on to Zuckerberg here. This is one of the most baffling exchanges of this entire hearing was Mark Zuckerberg being asked by one of these congresswoman about their competition.

With other companies, she acts as though companies can't compete with each other. Otherwise, they're doing some type of wrongdoing. Otherwise, it's some type of malevolent Behavior. Look at the malfeasance of Facebook trying to compete in an open competitive. Let's go ahead and listen to some of this questioning. It's just incredible how detached these politicians are from how business Works. Did you ever use this very similar Facebook Camera product to threaten Instagrams founder?

Kevin Systrom. Congresswoman. I'm not sure what you would mean by threatened. I think it was public that we were building a camera app at the time that was a well-documented thing. He says that we're building a camera app. This is something that Facebook was already doing and she's going to act like he was threatening other companies by explaining to them that they're going to be competing in the same field that these other companies are. So hear her explain this. It's just incredible.

Let me tell you that. Mr. In a chat. You told Mr. Size trim that Facebook was quote. Developing our own photos strategy. So how we engage now will also determine how much we're Partners versus competitors down the line Instagrams. Founder seemed to think that was a threat. He confided confided in an investor at the time that he feared you would go. He would that you would go into quote, destroy mode if he didn't sell Instagram to you.

So let's just recap, Facebook cloned, a popular product approach the company, you identified as a competitive threat and told them that if they didn't lie. Let you buy them up. There would be consequences. Yes congresswoman. That's exactly what they did. That's how business Works. What does she think business is you build products, you compete with other companies. You tell them, you're either going to buy them or you're

going to compete with them. What does she think happens in the business World mergers and Acquisitions is a huge part of business growth. A some companies get paid as they sell to other bigger companies. A lot of plays of tech companies is to sell the bigger tech companies. That's a lot of business, plans of companies. She has no Clue how business Works. She's acting like Facebook is doing a great Evil by building a product and competing with other companies that have similar products.

There's nothing malevolent about that. There's no wrongdoing. This is how business Works. What does she want Facebook to do? Go do Instagram. You're building a camera app. Well, I guess we'll just step to the side. We won't enter that field. You already have that covered. Is that how business works? Like she talking about here Mark Zuckerberg does? Is fantastic here.

He's actually really good in front of Congress for the people that make fun of them that he's a nerdy programmer, or whatever. He's actually great in front of Congress files. In front of them. I would want to blow up at every question. I'd want to freak out at every single question here because they don't even know what they're talking about. But here he goes and he tries to explain that. This isn't really the context and that this is how normal business Works.

Congresswoman. I want over respectfully disagree with the characterization. I think it was, it was clear that this was a space that we were going to Compete in one way or another? I don't do those conversations as a threatened. Anyway, I just I'm just using the documents and the testimony that the committee has collected from others. Now, of course, Zuckerberg tries to explain the context. He tries to say that really isn't how it happened.

But as per usual, he's interrupted talked over by Congress. That's what they do. Best is they don't want to actually listen to anything. These people want to say they don't want to listen to anybody. They're talking to they just want to hear themselves talk. So she talks, right? Over him. And then, this is how she goes on to characterize Facebook. Listen to how she talks about this company.

Facebook is a case study in my opinion, in Monopoly power because your company harvests and monetizes our data and then your company uses that data to spy on competitors and to copy acquire and kill Rivals. They use their advantage to copy a choir and kill Rivals, copy acquire and kill Instagram was

purchased for a billion dollars. That's killing someone if that's killing Rivals. I want to be killed because if they pay me a billion dollars to buy my app and then they grow into something much bigger and I have the legacy of starting that plus I'm a billionaire that sounds like a pretty good situation to be in. It's not like Instagram was this little project that Facebook just crushed. They purchased it. They purchased it. And then they invested a lot of time and resources in it.

They had the smarts and the people to make it successful. So now, Instagram is 100 times bigger butt. They didn't kill Instagram. They made it much bigger and they paid the original founders of it a billion dollars. Now, this theme continues on with Mark Zuckerberg.

He gets asked more questions. They're trying to paint Facebook. Is this big Unstoppable Monopoly. So, here's their attempt at doing this mr. Zuckerberg, in 2004, when you had launched Facebook, it's fair to say, I think you'd agree with me that you had quite a few competitors. You agree with that. Congressman yes, my space Friendster Google's or cut. Mixi. Cyworld Yahoo! 360, aol's Bebo. They were all competitors Congressman. Those are some of the competitors, the time.

And it's only gotten a lot more competitive sense. Well, let's talk about that because I 2012 mr. Zuckerberg. None of those companies that I just identified existed and boom. He's got your Zuckerberg, all those companies. When you started Facebook, none of them exist anymore. You destroyed all of them. You're a monopoly, of course, the congressman fails to mention that Tick-Tock was the second most downloaded app in the US. And 2019. It is one of the biggest social media apps.

Now, it's a Chinese firm that came in here with a direct competitor to Facebook and their saturating, the US market with their app that is direct competition. That's happening right now. Today. Tick-Tock is one of the hottest apps. He doesn't mention that when instead he mentions companies like AOL that are gone. There are no Anger here, and he's trying to say that Facebook is a monopoly because they don't

exist anymore. He asked Zuckerberg if he agrees that Facebook is a monopoly Facebook, in my view, I think was in a monopoly by then. I wonder whether you would agree with that. I take it. You don't cover some that's correct. I don't we Face a lot of competitors and every part of what we do from connecting with friends privately to connecting with people and communities to connect him with all your friends at once to connecting with All kinds of user generated

content. And I would bet that that you were most people here have multiple apps for each of those. On your phones here. Mr. Zuckerberg looks. Now here it is. Again. Zuckerberg gets asked about normal business practices basically just competing as a business and it's talked about as if it's evil. Would you agree with me that Facebook its strategy since that time to essentially protect what I described as a monopoly, but I obviously what you would

describe as Market power. Our that Facebook has been engaged in purchasing competition in some cases, replicating competition. And in some cases, eliminating the competition. Would you agree? Mark Zuckerberg that you use any of these tactics that you buy other companies, something called, mergers and Acquisitions. Would you agree that you compete with other companies by making similar products that you expand

your product line. He's acting like this is somehow bad that Mark Zuckerberg is making concessions by admitting that as a business leader, he competes with Their businesses. I know it's hard for Congress to grasp this because they don't have to compete. They just have money pouring in from taxpayers. So they're not competing with anybody. They just get a paycheck regardless of what happens in the world, but other businesses actually do have to compete to survive.

If Facebook did not buy Instagram, if Facebook didn't do mergers and Acquisitions, if they didn't create new products that were similar to other Trends and things that we're going on, they would go out of business, but somehow he talks about this like, it's some how bad Dad. Now this next Parts, a little bit revealing because he takes what's clearly a joke in an email and tries to insist that Mark, Zuckerberg was being serious. Facebook also tried to buy other competitive startups.

In fact, as chairman a blur noted, you did tell one of Facebook, senior engineers in 2012 that you can quote, likely by just by any competitive start up, but, it'll be a while before we can by Google. Do you recall writing that email? Congressman, I don't specifically but it sounds like a joke. Clearly. This was a joke in 2012.

When Facebook purchased Instagram, Google is about four times, the size of Facebook. It was more likely that Google could have purchased Facebook during that time. So obviously he was just making a tongue-in-cheek joke here, but the congressman insists that this was serious. He says it wasn't a joke. I don't think he's a joke that, you know, as I review the email, it was in regards to having just closed the Instagrams. And the response from this individual is engineer to, you was quote.

Well played your response was. Thanks one reason. People underestimate. The importance of watching Google is that we can likely always just buy any competitive startups, but it'll be a while before we can buy Google. He insists saying that the Instagram sale is kind of evidence that he's not joking. Instagram was purchased for a billion dollars at that time. Google was worth about 210 billion dollars. A little bit of difference in

size there. R next day, attack Facebook, and Google based off the fact that the market changes with news and that there's less local journalism. Now, Facebook and Google have Gravely. Threatened journalism in the United States reporters. Have been fired, local newspapers have been shut down. And now we hear the Google and Facebook. I'm making money over what news the America, they let the

American people see. It actually seems like he's just upset that Facebook and Google have changed the way. People consume media that people don't read their local newspaper, quite as much because they can get a lot of news locally on apps like Facebook and Google. This is just a general complaint with changes in the market space, is he also going to complain that the the automobile got rid of the horse. And buggy as a mode of transportation that it's destroying jobs that the horse

and buggy. And the people that operate that are gone. Is he going to complain that Tesla? CEO. Elon Musk is getting rid of jobs at Ford and other competitors that have moved along to electric vehicles as fast. You look at Ford stock Tesla's bad for the economy. It's getting rid of job. In other lagging companies. A lot of this is just accusations and complaints about normal business. Now. This next question was a little bit more controversial.

One of the congressman asked to all four of them. Do. They believe that China Stills intellectual property from the US, does a Chinese government still intellectual property from American firms? I don't know of specific cases where we have been stolen from by the So, you don't believe that the Chinese government stealing technology from us companies. Are you just saying that not from yours?

I'm saying I know of no case hours where it occurred, which is I can only speak to first-hand knowledge. Mr. Petri, you believe that the Chinese government steals technology from United States companies. Congressman, I have no first-hand knowledge of any information, stolen from Google, both of them, kind of sidestep that question. They do a little Dodge there. They don't really answer it. They say, we don't know of it happening with our company that really wasn't the question

asked, what they asked was? Do you believe that China is stealing data from American companies? It's obvious why Tim Cook isn't answering this because they do all their Manufacturing in China. They have close relationships are. It's a really Port market for Apple.

So, Tim Cook does kind of sidestep the question and Sundar pichai does the same thing, but listen to the answer that Mark Zuckerberg gives Congressman. I think it's well, documented that the Chinese government steals technology from American companies. Thank you. Sure. They do. It's well documented and Mark Zuckerberg. He really doesn't have, I think close ties with China. There's no reason why he has to tiptoe around. This question. Facebook is blocked in China.

They block pretty much every aspect of their company from even being Operational there so he has no reason to tiptoe around the question. Don't another question. Jeff Bezos gets asked about counterfeit products on Amazon. This is a huge problem that Amazon faces. They try to make it out like Jeff Bezos likes counterfeits because he profits off of it. So here's this dialogue between the two of them, but I can tell you is that the we have a counterfeit crimes unit. We attempt to prosecute

counterfeiters. I would encourage this body to pass. After penalties for counterfeiters and to increase law enforcement resources to go after counterfeiters joke comes the artists make money off of counterfeit, Goods being sold on your platform. Isn't that correct? If it does in my view sir, it would only be in the short term we met. We don't may, I would much rather lose a sale to lose a customer. Counterfeiters. Do not help Amazon, not on their long-term growth.

And this is a problem that Amazon is having to deal with themselves because of the lack of support. The government is giving so Congress saying, NG you're benefiting from counterfeiters is not correct and when Jeff Bezos brings up. Hey, we need some help with this. Could you actually give us more resources to deal with the problems of these crimes? These counterfeits? They just glossed right over that they don't have to do anything on their end.

Actually passing legislation that would help protect against counterfeiters, but they're fine blaming Jeff Bezos for profiting off of these counterfeit sales. As this hearing went on the lines of questioning just got worse and lazier. Here's the last one that I'll share. I think it's summarizes the quality of the questions. So Basil's are are stolen goods sold on Amazon.

Congresswoman not to my knowledge, although you know this bird more, they're more than a million Sellers and so I'm sure that there have been stolen goods. Really? No really mr. Big. Sorry. There's not you don't believe that there is a surprise as me. No, I said with over a million sellers. I'm sure that it has happened. But certainly, I don't think it's a large part of what we're selling. Okay, so, mr. Basil's basically, then you're saying, yes. I guess so.

Okay, congresswoman. You got me? Good question. I can see that maybe out of the million sellers on our platform. Some of them might have sold stolen goods. Like that's some big gotcha answer. What kind of questions are these? You have the four biggest Business Leaders in the world sitting in front of you. Tim Cook, Jeff Bezos, Mark Zuckerberg Sundar pichai, you can ask them anything in. This is your line of questioning cheap, gotcha questions, that don't reveal anything

insightful. Unfortunately, that's what most of this hearing was were questions like this. Just got your moments trying to get their their attacks out on these big companies. All of it. Has to do with politics, going against these big dominating companies so that they can say to their constituents that they stood up to Jeff Bezos, but I think it's sad to waste opportunities like this to wrap. This up. Of course, the chairman gives his concluding remarks that this

hearing made it all clear. That these four companies are monopolies is hearing has made one fact. Clear to me. These companies as they exist today have Monopoly power. He says this meeting that their hat made clear to him that these companies are monopolies, but he's reading this closing statement from a stack of papers. Did he actually prepare that during the meeting? Did he go and type that out during this meeting? I think he probably type this concluding remark out last night.

He probably did it before the meeting even started. But Harry is reading from a stack of papers saying that this this meeting makes clear to him. That these companies are monopolies, so There you have it from the very open-minded Congress. Now the big question from all of this is is Congress really going to come forward with some huge antitrust action and do something like break up Instagram and Facebook or put in really punitive measures against

these companies. I don't believe so and I don't think it's because these companies are lobbying and paying off the politicians. I think it's because Congress really doesn't understand what they're dealing with and they know that if they screw anything up, they could cause a tremendous amount of damage to the These are four of the biggest companies in the US competing with the rest of the world. And if they mess with them too much, they mess with their business models.

They might inhibit their ability to compete and also destroy a lot of jobs in the US and not really help competition that much as well. So, basically, they're messing with something that they don't fully understand that if they get it wrong, could have extremely adverse consequences. So, I think that they will tread very lightly with antitrust measures. Okay.

Now, moving on, from that. Let's get to the big news. Apple stock head. As for all-time highs after crushing wall Street's expectations. This was a really big beat. If we look at the numbers on Revenue, they beat on earnings per share on iPhone Revenue, Service, revenue and accessories. I think, out of all of these, the service revenue is the most important. The fact that they're on track with service Revenue, I think is really important but let's go

through the numbers real quick. Apple said that they earn fifty nine point, seven billion versus 50 2.3 billion. That is their overall Revenue earnings per share 2.58. Versus 2.07. IPhone Revenue was twenty six point four two billion service Revenue. 13.2 billion versus thirteen, Point 1, billion and accessories 6.5 billion versus 6.1. They crushed it in every single category. I was excited about this for a

couple different reasons. One of them was that I recently purchased about 50 shares of Apple sigh made significant purchases in this company. Many people criticize me for these purchases for a variety of different reasons. Basically, saying that I'm buying the company at all-time highs. Sighs that, it's fomo, all these different things, but I looked at the company I compared it to other companies. For instance. Apple has about a 30 PE ratio right now.

It's trading at a 30 times multiple. It might be a little bit higher right now. But at the time that I purchased it, it was trading at around a 27, multiple Costco. For instance, has above 30, multiple. Nike has above 30, multiple, Facebook, and Microsoft and all these companies have a higher multiple than Apple and I don't think that that's really Justified. I think apple is growing really. Deadly as a business and has a very significant boat.

So that's part of the reason that I purchased it is I think in general terms, the company's undervalued. And I think that it has really high quality products that brings a lot of brand loyalty. So, I was excited that they had a strong earnings report. I can't control what direction the market goes. But the market has gone crazy with this stock. It's up 8.3%, and one day, if I go to my holding of Apple, that market is generally down right

now. In fact, if I go to the one day view here, you can see my portfolio every single sector. Is in the red except for Tech and that is mostly because of one company. Apple. I'm up, fifteen hundred dollars. Just today on this holding a point to three percent as it stands right now. So this has been a pretty good company to hold. They do pay a dividend. They grow it over time. They do, share BuyBacks. They do everything, Apple's, a Growth Company. It's a value company.

If it's into a lot of different categories, but I don't think apple is a company. You should be excluding from your portfolio along with other. Good companies, MasterCard, Microsoft, and Visa. Overall, my portfolio has a significantly higher yield than the market overall. I continue to grow a stream of cash flow. So I'm focusing on those companies. But if there's really good growth potential and other

companies like apple. I still think that it's worth purchasing now, there's other news as well. Apple is announcing a four-to-one stock split. This is something that they've done frequently over time. And I think that this is for a good reason, if we look at Apple's share price. It is $417 a share, it continues to go up every hour. It. Like, but it's $417 a share right now.

When they do a, four-to-one stock split, that means that every share based on today's price would be around, you know, a little over $100 like $104. So if we look at share splits a lot of people are confused of what this means. Does this mean you get 4 times a dividends know, the dividend stays the same, the dividend will be split just like the sheer. So instead of Ash are paying x amount that will be x amount divided by 4 in the end.

The company will have the exact same yield so Sure, splits is mostly a cosmetic thing. The biggest functional difference is the ability for people to purchase small amount of quantities of Apple. If they don't have fractional shares on M1 and many other Brokers. We are benefiting from having fractional shares. I put in the dollar amount. I want to buy apple and M1 just buys that amount. So I don't have an exact share count, my sure counts like forty nine and a half or something

like that. So I can buy fractional shares, but some people are limited to buying the whole share and I think that that's what they're trying to address here. They're making it more available for retail investors. Esther small-time investors that don't have fractional shares to pick up a little bit of Apple. They want to buy two shares. They can buy it. I also think there's another pretty big benefit to stock splits.

And that is that it makes it a little bit psychologically easier to purchase shares in these companies. If you look at this and you're just a retail investor and you're looking at Apple and you see the prices $419. Now, for one chair, you think that's a lot of money. Then you look at Amazon and a share of Amazon is three thousand one hundred and seventy dollars for one. Share. So as a retail investor, you think, is it really worth buying Amazon? One. Share of it for over three

grand. Is that really worth it? It's really a tough pill to swallow for investors. So I think it makes it a little bit easier for investors to purchase the shares when they're at smaller prices, even though right now apple is a bigger company than Amazon. It's a more expensive company to buy than Amazon, but the share price being smaller has a psychological effect of making it easier to dollar cost average into this company.

I think that's The Reason by investors do well on ETFs is because it's a level of obfuscation you by the ETF like the S&P 500 for 200 bucks. And really, what it's doing is buying shares of Amazon for three thousand dollars, but you don't have to see your money being used directly that way. So, when I look at this, I think the stock split will also help

investors retail investors. Pick up a few shares of Apple when they might have otherwise not now, I know another question I'm going to get asked is Joseph. Should I buy Apple now? Should I buy it now? After this? Recent Spike? Or did I miss the window of opportunity? I didn't buy it a month ago. I didn't buy it two months ago. And now it's spiked up like crazy. It's up almost 10% just today. Should I buy into this company?

This is a tough question, but I think it's actually pretty simple Apple's trading at a 33 PE ratio. It has a market cap of over 1.8 trillion dollars. Currently. I have said repeatedly that I think Apple will easily surpass a two trillion dollar market cap. I just think it will get there eventually. It's just a matter of time. So I think that you still can buy it right now. It's historically more expensive than it's ever been.

But this is a company that continues to grow and innovate and make really good products and they're expanding into different services. So I think they have a lot of growth potential ahead of them. But the bigger point is the reason that I originally purchased. This company was, the PE Ratio was about 27. And basically every other company around Apple had a much higher PE ratio, and I thought, why is this company have such a low P/E ratio? Paired to the rest of them.

And the reason why that I looked up was that people said, well, apples a hardware company. They're just one bad phone away from having some huge dip and I didn't really agree with that. I thought the Apple is, is a whole ecosystem of products. It has incredible brand loyalty. I think that the people that are fans of Apple, they're going to buy their products. Their can expect them to be good, but they're going to buy their products every time they come out.

So I think the apple is being treated like some clunky hardware company. When in reality, they are a very polished. List ecosystem of products, to iterate through improvements over time. The iPhone really doesn't have to change that much. It just gets better and better every single version with small improvements and that's enough to keep people buying that

product over and over again. So I think that they have an extremely loyal customer base as long as Apple makes good products that loyal customer base, will buy those products. I'm one of them. I'm going to continue buying Apple products until I don't like him anymore. And as soon as I don't like the product, I'm going to sell the

company. So that's where my conviction with this company comes in. It's partly because I really just like the products that they make if that changes I'm going to be selling out of the stock because if I don't like the products that they're making I'm assuming other people like me aren't going to like them as well. So that's part of the reason that I purchased it.

If you don't have that level of conviction with the company, I don't think you should buy it at this price because if it does have some ten or twenty percent dip, you might end up selling out instead of buying more of it, if this would have went the other direction and apple would have had some poor earnings. Port, they missed a couple metrics and all the analysts had really bearish views on them. All of a sudden, I wouldn't have

been concerned. I would not be concerned about this company until I don't like their products. That's how I'm treating most of this investment. So if you're considering making apple, a big part of your portfolio, you should look at whether or not you think that they're going to continue to make market-leading devices.

What are the best devices with the best software if you think the company can continue doing that into the future, I think the Answer is yes, you should make this part of your portfolio just realize that there's going to be dips in between. If you're going to sell out when the stock comes down 10 or 20%, Then don't buy it today, because there's going to be times when big hedge, funds, shift things around, or they take profits, or do whatever an apple come back down for a while.

But as far as I'm concerned, if they keep making an improving their products like they have been, I'm really not concerned about this company. This is one of the least stressful companies in my portfolio. I have next to no stress. Buying Apple just II. I don't worry about it, their earnings reports great. It's good news, but I wouldn't have sold this company. If they had a bad earnings. Now as far as a general portfolio update, we've almost reached four thousand dollars in

earn dividends. That's a good amount of earn dividends. The market gains are at two thousand dollars. Now finally, we're getting both sides of it. We're having a market gains and we're having dividends or enjoying valuations going up. And we're enjoying a constant stream of income. This has been an evolving process coronavirus is highlighted that some companies are more susceptible. Oh, that this type of event than others.

The cloud companies and tech companies have not been affected as much by the coronavirus so you can see this Illustrated through out my profile. In fact, if I go to the one day view hair, you see it Illustrated right here. Tech is in the green by quite a bit. Every single other sector real estate, consumer health care, Finance, utilities. All of them are in the red, and this is what most of this year has been value. Companies have been getting crushed tech companies have been

doing well. Now, I don't think this is going to be the case forever. That real estate will recover. I think these consumer companies will do. Well. Healthcare is obviously growing industry finances as well. So I think there's going to be eventual growth with these other sectors. But right now, I would be careful how much money you put into real estate and how much money you put into Industrials. These sectors are being damaged, pretty heavily.

The sectors that I've tried to focus on is growing Tech, growing consumer, health care and finance. These are the ones that I've been focusing on the most. I've been growing Finance because I think there's going to be a lot of innovation there in the fintech space. I've been buying MasterCard and Visa as well as a lot of JP Morgan. I've been buying different healthcare companies and there's some consumer companies that have been buying so that's most of the purchases.

I've been doing. I'm going to continue to make purchases of Bank of America, of JPMorgan a Visa and MasterCard because I think that those companies are going to do really well over the next year. Now, if I go on I filter by the one month you here, I've earned 300 dollars in dividends and thirty five hundred dollars in market gains. It's about 30. Eight hundred dollars in the past 30 days. It's been a good month that has

been a really good month. So this shows you how quickly things can change just a short time ago. This portfolio is in the red by quite a bit but repositioning it and moving into some companies moving out of some companies and continuing with the strategy I think has put this in a good position for the future. So I have an updated link of this portfolio in the description if you want to.

Look at all the Holdings, I have what companies I've dropped and which ones I've added new, they're all in the description in that. Link that says My main portfolio. Okay. Let's move on to some emails. Joseph at Joseph Carlson show.com is the email address. You can write in any of your questions, criticisms, anything you want to talk about and we'll

discuss it here on the show. The first one's from Jason. He says, Joseph, I seen all of your videos and think you're doing a great job, following your information. I have a sizable investment in various individual dividend growth stocks in one of your newest videos, you decided to move towards your growth stocks such as Apple Microsoft and less towards other sectors. I know you have a few van. Our DTS in your auth are a what do you think of the Vanguard

ETFs V ug + V? GT to capture the apples. Microsoft's excetera? Yeah. That's a good question. Jason. If you look at the bottom of my portfolio, if you look at the link in the bottom, it said one line that I've had there since day, one of creating my portfolio that it's a defensive portfolio focused around creating a stream of passive income. Its defensive. That's something that I've been trying to focus on what I found is that Coronavirus Has highlighted the Achilles heel to

this type of strategy. The, the type of companies that have been really punished. During this specific environment, have not been the high-flying tech stocks. They haven't been punished, the companies that have been punished have been, the more conservative value stocks like the ones that most dividend growth investors invest in. So with the goal of making my portfolio defensive. I don't want to have an Achilles heel. I don't want to have anything that can do substantial damage

to my portfolio. And so, all I'm trying to do. Is make it a more well-rounded more defensive portfolio. So that has been the main goal in this transition is to try to balance that the different type of value stocks as well as having stocks that are more growth-oriented. But more importantly, their stocks that are less affected by the coronavirus. They're less affected by this term. This type of environment that

happens to be tech stocks. And the reason that tech stocks are less affected is because they don't have a lot of capital expenditures. They don't have to have millions of employees and lots of retail locations there in the Cloud. And so they continue to operate. Even if things are close down, the government closed down States, all the tech stocks continue to do. Well, in fact, more of the focus

moves towards them. The longer things are closed down, and I'm going to continue doing episodes. One of them I have planned, is basically to show that I think that things are going to stay shut down for a little bit longer than I originally anticipated. So, when I'm looking at the current environment right now, I'm seeing the coronavirus, not really seem like it's going anywhere too fast. It continues to go up in the US. Everybody seems to be wearing masks right now and it's still

around. So this has been a bit of a dynamic shift that viewing this historically, the growth stocks seemed like the more risky stocks. That's what growth stocks are there more risky than more volatile. Their risk, your Holdings, but coronavirus has kind of swap things to now value stocks seem more risky buying and companies like Delta Airlines is the risky bet buying an AMC, Theaters. That's a risky bet buying in real estate right now. That's a Risk, right there.

Buying growth stocks, like apple and Amazon. That's kind of the safe bet right now. So I don't feel like I'm increasing risk in my portfolio. What I think I'm doing is actually decreasing risk. I think I'm trying to balance the portfolio out. I think it will actually reduce risk in the portfolio. So that's the primary goal behind it. Now you bring up these Vanguard ETFs, I think vug is really good

side like that ETF a lot. If you look through the Holdings of it, it has a really solid Holdings. I don't know vgt as well. But I do like vug a lot. I also like just as a general growth ETF one that's mentioned a lot on our Discord as s py g. That's SP. YG. You can check out that ATF as well. If you're looking at extremely high quality growth companies. So I would check that one out as

well. Emile says, my name is Emil. I'm coming all the way from Belgian with a question. I'm a second year Bachelor student in business engineering economics, at the University of Ghent. What books did you read on finance? Testing, what are your sources to get new interesting titles? There's a lot of good books on investing. I think the best one is from Peter Lynch. I've read the intelligent investor. I've read books from Warren Buffett. I've read books from Howard marks.

I think the best book on investing is from Peter Lynch beating. The street is a fantastic book. His advice I think is second to none. He has such good advice for everyday investors. He basically says to invest in things that, you know, and understand, don't invest in companies that you Don't know how they're making money and you really don't understand them.

Don't put your money with them. Put your money in companies that you really understand, you really like, how they make money, the products that they sell. And they have a really good story. He's all about story of the investment. If the company has a great story, if it's growing and expanding is going to be a lot bigger in five years than it is. Today. That's probably a good investment. So that's been his primary advice and that's really how he ran his fund.

The Magellan fund did really well. He was one of the Arzo Fidelity. He's the one that made Fidelity what it is today. So, Peter Lynch was this Rockstar investor. He was one of the best investors of history, and his strategy was basically to look for companies that have a great story that he really likes the products. They sell one of his best investments was Dunkin Donuts. He went to a Dunkin Donut. He thought this is a long line for a donut place. What type of donuts are these?

And he got one, and he thought, this is a great doughnut and it came off an assembly line Dunkin Donuts. How many of these locations are there? R. So we started to do research. He saw that they were expanding rapidly and then he went to new locations and saw that the new locations were packed. And after that, he decided I love the doughnuts. Everybody loves he sings, they're expanding like crazy. I need to buy this company, so he bought that company. That had a 10 times return on it.

He made 10 times as original investment on it, with Dunkin Donuts. That's why he believes and buying what, you know, what you think, has a good story. So I think that's really good advice, of course. Is other good books on investing from Warren Buffett, the intelligent investor, I think is good. It's a little bit more of a dry read and then I think on the subject of investing there's lots of good books. You can read about the ride of a lifetime.

If you want to read about Bob Iger, lots of books that I read outside of investing specifically, but just in general business, like bad blood from John Kerry, you it's about Elizabeth Holmes and theranos and the big scam that happened with that. So I like reading about all this stuff, but I think Peter Lynch really has The most applicable and easy-to-implement advice for retail investors.

And then the question. What are your sources to get new interesting titles, I think of the titles myself. So I don't have any sources to get the titles for videos. If that's what you're talking about. Most of what I talk about is, just whatever is going on. Whatever is on my mind. So that will continue to be the episodes are basically what my thoughts are on current events and what I'm doing with my investments and all of that.

Okay. Well, I think I covered some of the news, there's a lot more to go over. I An episode plan where I'm going to give a little bit of an economic update. Now that we have some economic news, so not as uplifting of an episode, but we need to talk about the economy. So I'm going to be doing that in the next episode. So I appreciate everybody for listening. Thank you for all the support. If you haven't like, half of you, listening are not subscribed. So it does help me out.

When you hit the Subscribe button, it's free to do. I appreciate everybody that does that and shares the channel and I'll talk to you guys next time.