Episode 109 - Why I’m Buying Streaming Stocks

Welcome back, everybody. Thanks for joining and this episode. I want to talk a little bit less about news. We're going to put news to the side for a little bit and I want to talk about my portfolio and specifically the opportunities that I see that lie ahead with different Industries and different sectors. I've been making changes to my portfolio. I've been selling completely out of some Industries. I no longer have any oil companies.

This is something that I mentioned a couple weeks back and I've decided to sell out of it and on the other side. I've been putting a lot of money into other Industries. In other sectors, and I want to go over that specifically. I want to discuss the stock picking checklist. This is something that I just put together and it's an outline of my decisions when I'm making these changes, when I'm deciding, which companies to invest in.

So we're going to be going through the stock picking checklist specifically, we're going to give the example of streaming. I think that video streaming is a misunderstood sector. I don't think that investors really appreciate the potential growth and the companies that are aligned to take advantage of That growth. So we're going to be talking about this in my Holdings. I have a couple of the top Holdings being streaming. Companies apple has a streaming service, but they're very small

player in this industry. We have Disney that I think is a massive player in the streaming industry. I think they're the second-best aside from Netflix. And then AT&T I would say is in third place. So we're going to be going over streaming and talking about Disney and AT&T. We also have an interview with the CEO of Warner media that I want to go through.

He talks about Out what he thinks the direction is of HBO Max what they're trying to accomplish with it, and their performance compared to Disney plus. So I think it's a pretty enlightening interview. We're going to look at this and talk about this industry overall. And then, of course, I will be responding to some of your comments and emails at the end of the episode. So we'll get to that as well. Okay. Now, first of all, let's jump into the portfolio. This is my primary account.

It is my passive income portfolio. And the goal of this is always been to show you investing and what it really is. And what I mean by that is As I show you every single week week by week. What happens with this portfolio? I don't know. What's going to happen. Sometimes we lose money. Sometimes we gain money. I've had episodes where this very portfolio has been in the red by like ten thousand dollars.

So it's been through good times. It's been through bad times during March. When we had the real effects of the coronavirus weigh in on investors. This was in the red by quite a bit. But over the past few months, we've made significant gains and we're back in the green now. In fact in the past 30 days were up seven. Eight hundred dollars. So it's been a pretty good month in the past. 90 days are up, 15 thousand dollars. We regained a lot of the losses

in the past 90 days. We went from the red back into the green. So that's how quickly things can change. Now, with this portfolio. I've been making significant changes to it. And I've been making some adjustments to the way that I view investing. And the way that I pick companies to invest in. I think that if you're unwilling to make any adjustments to the way that you view Investments, as you learn and experience new things, Things you're not going to have a good time. Investing.

What I'm trying to do is use the things that I've learned over the past two years, to try to adjust my portfolio to be a much stronger portfolio for the future and I want to talk about that. I sold out of the energy sector. I have companies that produce energy their utility companies, but by the energy sector, I mean, I sold out of oil companies. I held two of them which were Chevron and ExxonMobil. And the reason that I sold these companies are part of what I'm going to go over in this

episode. People do not think it was a good idea for me to sell these companies. In fact, I received emails where people explain that. I'm selling them at the wrong time, that they'll appreciate over the next couple years as the demand for oil goes back up. So let's go ahead and look at one of those emails as an example. This one's from Nicholas.

He's from Quebec Canada. He says hi Joseph firstly thank you for your channel, which helps normal people understand investment World better and the last episode 107 you read a post that said oil companies are thing of the past that they will slowly fade away. Way, I think that in the long term, it is true. But in the medium term due to the cut investments in research of new oil fields. It is very likely that there is a strong Peak because of the

demand that remains strong. And the supply that will have collapsed. Many companies in this sector among others in the USA are bankrupt or very close to it. It's almost certain that within two to three years. The shares of big oil companies will experience a dramatic rise, the two companies that you own will come back to the positive and even give you a good return. Then Might be a good time to think about selling them but not before taking advantage of their

price recovery. I don't have a crystal ball, but it seems very premature to get rid of your companies and suffer a significant loss in the process. Have a nice day necklace. Okay. So this is an example of what I'm talking about. Nicholas here makes very good points. In fact, I agree with him on everything. He's saying he's basically saying that right now the price of oil is so low that it's bankrupting a lot of the smaller companies, so they're not going to be in business anymore.

And when the price comes back up of oil, the companies will take the Lion's Share of the profit will be the very big companies, like Exxon Mobil and Chevron. That's a decent thought process. That's a decent investing philosophy. I actually agree with all of that, but I sold these companies anyways, because of one specific thing that I'm putting more focus on and that is part of the first line.

He says, in this email. He says, you write a post that said, oil companies are a thing of the past that they will slowly fade away. And he says that, I think that The long term, it is true. That's the part that I'm focusing on the long term. The reason that I sold out of oil companies is because of the way that I'm trying to reposition my portfolio. I'm trying to reposition it for

the long term. And what I want to do to go through the process of this, I want to go to the stock picking checklist where I can outline my thought process on this.

The first thing that I'm asking myself, when I'm picking a stock to invest in is, is it in a growing industry. This is the first question. An industry is the first thing that I'm looking at is the industry overall. A growing industry. You can look at examples of industries that are not growing oil is one of them energy by oil is not a growing industry. That doesn't mean the price won't come up with oil and that those companies will become more

valuable. It means that overall, the direction that our economy is going, the direction that countries are trying to go. The way that capital is being allocated and investing everybody's wanting to move out of oil. That's just something that's Inevitably true eventually over time. Oil is going to be an industry that continually is in decline because that's the direction that the world is going.

This doesn't mean that Exxon Mobil and Chevron are bad Investments necessarily you could invest like, Nicholas, put the money in there. Wait, two or three years in the price of oil might come up with demand, and he might make money on those, but I think that's a very difficult way to invest when you're investing in declining Industries.

Not only do you have to pick the best It's within those Industries, but you have to have Investments that outperform, their overall industry as the industries in Decline. You're picking the companies that are accelerating, that's very difficult to do. It's almost like trying to swim upstream. You have everything working against you. So I don't really want to do that. Even if Chevron and ExxonMobil are good Investments there in declining Industries.

And so I don't see them having a lot of the support of having oil, grow 10. Or 15 times in size over the next 10 or 20 years. So the first question I'm asking myself is, is the industry growing if the answer's? No, then it's unlikely that I'm going to want to invest in that company. Now we can ask ourselves what industries are growing, which ones are actually going to get a lot bigger over the next 10 or 20 years. I could name a few off the top of my head.

I think that cashless payments is a growing industry. You have visa and MasterCard that are picking up fintech companies. I think they're going to benefit from that. So I own. Visa and MasterCard in my portfolio, but there's another industry that I think is massively growing and I don't think investors appreciate the size of growth that will have over the next 10 years. That is video streaming video streaming is a growing industry. A massively, massively growing

industry. It's better than cable TV. In every single way, every single way. It's on demand. It's much cheaper for the amount of content that you get. You can download it to your device. It's and watch it anytime offline. You have the, the ability to watch shows and binge watch them. You don't have any advertisements with them. It's more lean, you can take it on multiple devices video. Streaming is so much better than traditional cable TV, that it's

incredible. There's still people using traditional cable TV, the fact that there's tens of millions of people currently viewing it in the old format is really crazy right now. Video streaming is better, consumers are using this and this industry is going to be benefiting from that. Now the question is when you identify an industry, like video streaming that is growing, you have to ask yourself. What companies are going to benefit from this. This is the second point on my

checklist. What companies will benefit if you look at video streaming and you say well this is a growing industry. I realize that Joseph, you know, obviously there's there's millions of people signing up for these different streaming platforms, but trying to pick which one's going to be, the winner is going to be very difficult. Because we have all these

different competitors. We have Amazon with Amazon, Prime we have apple with Apple TV plus we have Disney plus and Hulu and YouTube TV, and we even have other companies that are kind of video streaming but not really like YouTube. They do, you know, content creators make their own videos, but that's not the same thing as Netflix. So we have all these different companies. The question is, which ones will benefit with video streaming.

I think the in this industry, there's going to be two companies that will benefit the most Those are Netflix and Disney. Netflix is the clear leader with 180 million subscribers and it's still growing rapidly. Disney's in second place with 60 million subscribers. I think that these two companies are in the best position to take advantage of this growing industry. And then in third place, we have HBO with 36 million subscribers.

Two of my biggest Holdings are Disney and AT&T the owns HBO. Now, the reason that I really am bullish on these companies is because of their stream. Services. Now, you might look at these numbers 180 million, 60 million 36 million and then all the other different streaming competitors. You might say, Joseph, it's good and all that this industry is growing, but there's already a lot of people subscribe to these Services. How much growth are you really expecting?

Isn't it becoming a little bit saturated? Are you really going to eke out that much more growth with these type of services. Let's go ahead and take a look at that. There are about three point. One, two, three point two billion people that have an interest. Internet connection devices, to be able to stream, excluding the countries of China and Russia.

That is the the context that I'm looking at this with compared to 3.1 billion 180 million, 60 million, that is a tiny fraction of the addressable Market. A tiny fraction. Now, I'm not saying every single one of these 3.1 billion are going to sign up for Disney or Netflix, but it goes without saying that the potential Market here is multiples multiples because Her than it currently is these companies have tremendous amounts of opportunity here, and I don't think investors fully

appreciate that. When you look at something like Netflix with 180 million subscribers investors, have continually been saying it's overpriced. They are going to slow down with their subscribers. They're not slowing down with their subscribers. They have an enormous Head Start. I think that Netflix will continue to dominate and streaming. I think that Disney is uniquely positioned to be an extremely good value. Proposition right now because unlike Netflix, Disney is

misunderstood. Everybody understands Netflix. They say this is a streaming service. It's one of the most simple brands that exist. They do one thing and they do it really. Well. Disney does a lot of different

things. It is a stock that's harder to look at even though it's a recognizable, brand people have a harder time doing analysis on the stock, I go and I read through articles on Seeking Alpha and different places and I look at the type of analysis they're doing and they're Sickly just looking at the next three months. How much money does he's going to lose? Because of coronavirus. This is such a misunderstood way

of looking at this stock. This company is a streaming Powerhouse. The leaders of it has said that streaming is going to be the primary focus of this company. They have ESP n plus the currently has over 8 million subscribers. They have Hulu. The currently has over 30 million subscribers, and then they have Disney plus that currently has over 60 million.

Fibers. They have multiple streaming services and Disney plus is one that I think has tremendous value at $6 a month and the amount of content and the additional series that they're going to be adding to the service. The rate of growth has already been impressive and the subscribers that they've already gained allow them to push more content onto the service at a cheaper price per subscriber. So, Disney is the one that I see

the biggest opportunity. It is the most misunderstood company investors do not Realize that this company is transitioning from an old capital intensive, High fixed cost Park and Resort business to now, Aileen Tech production company streaming company. That's what Disney is right now and I don't think investors fully realized that the potential Market is enormous. The industry is growing and will be multiples bigger than it currently.

Is today in five or ten years, the companies that will benefit from this are the ones that already have a head start. If you try to get into the streaming game without having a head start, you have to have an incredible amount of capital. You have to be a company that already is massive. The only ones that can even start to get into this industry without already having the head start, our companies like apple and Amazon and they will try to buy their way into it.

The ones that already have the lead have a significant Advantage because the price per subscriber for their content becomes cheaper. Think about this. You buy one Movie for 100 million dollars and you have 180 million subscribers. You're only paying so much per subscriber for that movie. If you buy one movie that's 100 million dollars, but you have five subscribers. You just paid twenty million dollars per subscriber for that movie. That's the advantage that

Netflix has. They already have the subscriber base. The advantage that Disney has is they already have the content, it's all they need to do is go and sell it. The advantage that comes. Companies like apple and Amazon have is, they have money, but they are so far behind they'll try to push their way into it, but I don't think that that's a successful strategy. Is a companies that already have the content or they already have

the subscribers. Those are the ones that are going to benefit the most and I do think that this industry is a universally loved industry. Everybody loves entertainment. So it's not something that goes away. It's not something that's just this commodity that comes and goes entertainment. Something that's going to be around forever and all 3.1 billion people do enjoy entertainment. Everybody enjoys entertainment. It's Universal. So I see the industry growing.

I see the companies that will take advantage of it. What is the third thing that I look at? The third thing I look at is, is it simple? I ask myself, is the company. I'm investing in a simple easy to understand business model. Is that what it is? If it's a very complex difficult to understand business model. I probably shouldn't be investing in it. It what I'm looking for is Simplicity in the business model with Disney. It does have some other segments

of its business. It has the parks and Resorts, but overall, they are simplifying, their business model a lot. They're making it so that they are just going to be a Powerhouse streaming company. That's very simple. They produce content to put on their streaming service that makes it so that they gain subscribers those additional subscribers fund additional content and that Circle just goes in circles. Over and over again, more content, more subscribers, more

content, more subscribers. And when you gain more subscribers and makes the additional content cheaper, that's exactly what Netflix has been doing. They have a clear lead in this, but I think Disney will be a good Contender. So I look at the business model. It's very simple. When I look at companies that I've done well with historically, they likewise have been basically, simple companies. Apple, I think is relatively simple. You just look at the products. They sell and you go.

Well, people like these products and services. And they're probably going to be around in the future. It's a growing industry. Simple investment, MasterCard, and Visa. There's less cash in the world. It continues to go into decline, more people are using cashless forms of payment. They're paying with credit cards. They're paying with phones and MasterCard. And Visa are companies that will probably take advantage of that because all they do, is they ensure payments. That's all they do.

They process payments, Microsoft, likewise a company that's very simple Office Products that people use to communicate at work. Very simple company and consumers. All of these are very obvious household names that everybody uses almost on a daily basis. We have Disney which I already described I think is a simple business model Pepsi makes drinks and snacks. Costco has one of the most boring easy to understand

business models. They build these warehouses where they sell stuff, and they have a subscription. That's it. Then we have Comcast Home, Depot, Target and Nike all household names. I'm in the green on every single one of these Holdings. So so the places that I've made the most money have been following this advice. It's been investing in industries that are growing. It's been trying to find the companies that will take advantage of that growth.

The most the companies that are in the best position, and then it's companies that have simple business models. The ones that really have an easy-to-understand simple business model, that reinforces itself, as it continues to go, I think are the ones that are going to be the biggest beneficiaries of it. So that's over all the

direction. I've been going with my Flio, like I've said many times before, I want this portfolio to be a growing stream of Revenue. I look at it as an additional stream of Revenue outside of my job. In order, for these companies to pay dividends to their shareholders. They need a gain, massive market share. They need to be well, established. They need to be in growing Industries. So that's the direction I'm

going. And I think the more that I do this, I think that they'll be able to pay shareholders, a lot of money in the years to come. If you pick the right companies that gain huge market, share, they'll be able to return. Turn value to shareholders in the forms of dividends in the future. So that's what I plan on doing with the portfolio. You can let me know your feedback if you're interested in looking at this and seeing the precise allocations of every single holding.

I'm going to go ahead and update this and put the link in the description. So it'll say something like my main portfolio. You click on that link. It will open it up and then, you can look at every single company

and every single holding. Now on the snow of the streaming Wars between Netflix Disney and AT&T, or HBO. Max Lerner media. CEO, Jason kilar did an interview with CNBC and he was asked, directly a couple. I think pretty tough questions. I was actually impressed with the questions. He was asked, they basically said, look, we have all these streaming services. HBO Max is growing seemingly pretty slow. It's only gained a couple like a million or so subscribers a

month. What you have to say about this is HBO falling behind in the streaming War. Keep my Disney is a hundred-year surgically, precise brand with regards to families. With kids under the ages of nine, generally speaking. So they did exactly what they should have done. And kudos to them. Ours is a very different journey I argue in success. Art, is a bigger outcome because we are really going after, all members of the family, and all individuals. Now. I like Jason's response here.

He's saying kudos to them, Disney has been doing really well, and just for context with that Disney has been growing at somewhere around five million subscribers a month. While HBO, Max has been growing got like, 1 million subscribers a month. So Disney has been crushing them and growth and I know that HBO Max is a higher price point, right? It's 15 dollars instead of six. I don't think that matters that much right.

Now. The amount of subscribers is way more valuable Disney has substantial pricing power. Once they get 100 million, 200 million, 300, 400 million subscribers. They will be able to price their service up and up and up Netflix showed that they can do that. They originally started at like seven dollars a month and now they're twelve dollars a month. So You can do the exact same thing. The amount of subscribers is way more powerful than the current price that subscribers are

paying. So he recognizes that Disney has been crushing them with the amount of subscriber growth. But he says that Disney is a surgically precise brand by that. He means they are family-oriented content. You're not going to find gratuitous violence and nudity and profane language on Disney. Plus. That works to Disney's Advantage. Because parents can say, look here is the catalog pick whatever you want kids. You don't have to worry about them. I'm stumbling their way into a series.

You don't want them to watch. So, Disney has executed with their brand extremely well, but he says it the ultimate outcome is much bigger with HBO because they have broader a pill. They have shows that appeal to more people. He continues on referring to Disney as a surgically precise service. I think he's almost trying to pigeonhole Disney and to being just this service for children. Ours is a very different Journey. I'd argue in success. Art is a bigger outcome because

we are really going out. After all, members of the family, and all individuals, and so the opportunity is bigger, but it does mean that our journey is going to be different because we don't have a hundred year, surgically precise brand around families, specifically with kids under the age of nine. So he says that Disney plus is more family-oriented content, especially children. The target age being nine is what he says. I definitely don't agree with that. I think that Disney Plus for

sure. Is more family friendly, but they also have shows like the Mandalorian and that was a show that had broad appeal across every age demographic. I think that they'll have Mandalorian season 2, they'll have an Obi-Wan Kenobi series. They have a ton of Marvel spin-offs that people of all ages. Usually enjoy those shows. When you look at the movies, they sell the tickets to everybody of every different

age. So Disney, I think has the advantage of both being family friendly, but also having content that appeals to a wide range of Ages. So I think there's significant advantage to Disney their HBO. Max does have family. Only friendly content. They have a section on it. That's just for kids and it's all family friendly, but I think as a brand HBO's known as more of the mature content nitty-gritty, that is not really family friendly. So they kind of suffer from the

opposite effect. I think HBO has branded themselves as not being quite as much for families. Something that AT&T has done in the past is poorly, executed their products. They have good products like HBO, but then they confuse the customer. They offer HBO now and HBO Go and then they have HBO. Oh Max, this is something that has caused confusion. You can even look at Google search as a people asking, what is even the difference between HBO now and HBO GO like, what

does it even mean? This is what he's responding to. I think, in hindsight a mistake, which is, we did have a number of brands in the market that were ultimately confusing, which is HBO now. And HBO GO, we have sunsetted those brands in those services. So now we are left with rightly. So HBO Max and HBO, so, it's a much simpler proposition for

consumers. So he says, Is getting rid of HBO Go and HBO now, but they still have HBO and HBO Max as two different things you can sign up for, I wish that they would follow the lead of other companies have done. This successfully, Disney has Disney, plus there's no Disney plus, and then Disney plus Max. There's just one service. It's very simple and customers Minds.

So, this is something that AT&T continually struggles with is keeping things, simple making, it easy for customers to understand, they have good products, but they They, they really complicate things unnecessarily. So they're moving in the right direction, getting rid of HBO Go and HBO now I think is good. But I wish they would just combine HBO and Max into one product. That would make it so easy for consumers.

The last thing that he gets asked is what are you doing to gain an edge over the competitors you have Netflix, which has the lead you have Disney plus, which is growing really fast. You have these other services she mentions peacock as a free streaming service, you know, there's YouTube. There's all these other competitors. What is Doing to gain an edge over all these. Many competitors quality is the

answer. We want people when they think of HBO Max, when they think of all the things that they can get from HBO Max, we want people to think that while these stories there A Cut Above, and that really plays into the Legacy in the history of HBO quality. That's the biggest distinction that HBO has over its competitors. While Netflix has done the shotgun approach, just blasting content everywhere and hoping that some of its really good.

Some of it, not so, Good, but people find things to watch HBO is more focused on having less content, but higher quality. And I definitely don't think that he's lying about that. Some of the new trailers that they're releasing look absolutely incredible in terms of their production quality. Here's one that's a TV series by Ridley. Scott the HBO Max's releasing. This one's called Raised by Wolves. I watch this trailer just a couple days ago and you just have to see it.

First little pig, little pig. This looks trippy, looks kind of weird. The production quality looks incredible. I have no clue what's going on in this trailer. But I'm very much intrigued by it, if HBO, is going to do this and hire people, like Ridley Scott, that's done Gladiator. And alien to do TV series on their platform. I definitely think there's an

audience for this. If they do the strategy of having the highest quality content, the highest quality Productions that, you look at HBO and you think of their brand as just the best content, not focusing on what Netflix is doing or they have thousands of shows. Some of them very good, but some of them not so good. HBO needs to just focus on being the best and I think if they do that, there's certainly a story there. I think that's a good strategy to do.

So, we'll see how this plays out but it does seem like Jason is telling the truth when they're focusing on making their series the best series. Okay, now moving on from that. Let's get to some emails. Joseph at Joseph Carlson show.com is the email address. Josephat Joseph Carlson show.

You can also follow me on Instagram and message me there, or on Twitter. I checked those as well, the first ones from Alex Alex has, hey, Joseph. Would love to get your thoughts on, Simon Property. Possibly making a deal with Amazon to turn Sears and JCPenney locations into fulfillment centers. How do you think it changes the business model? How does it impact the cash flow? Would you be a fan of this move? Love the videos and can't wait for more Alex. Well, Alex, I did read that

news. Basically. What's going on right now? If you haven't heard, is that Amazon has been in talks with Simon Property, which was one of the largest small REITs in the country, they have over. Hundreds of miles across the u.s. And Amazon has been talking to them to have the idea of turning. Some of their JC Penney locations in Sears locations, the big spots in the mall and to these Amazon distribution centers.

And the more I read about this, the more it made sense, Amazon is trying to get quicker deliveries. That's their goal to get items to you very quickly, same day if they can. Well, that creates a logistics problem. Basically, they need to have distribution centers in the middle of Highly dense. Areas, and as it turns out malls are in the middle of Highly dense areas. In fact, they're right dead center of most of them and they're close to freeways.

So it makes sense to Amazon. Would look at malls and say, hey, these might turn out. Well, they're struggling to fill their locations. What if we just rent it out? One of the Sears and made that like a little mini Distribution Center. What they would do is they would look for items that are commonly ordered in that geographic area. And then they would fill that distribution center with those commonly ordered items. That way people can get the things that they want very quickly.

Now. I don't know what's going to materialize from this. I don't know what Simon properties going to do, if they're going to make any agreements. I actually see this as a viable thing to have happen. I know that in terms of leasing out the malls, Amazon would probably barter with them to get very low prices. So they're not going to be making a ton of money, but more importantly than that, they'll have their place is filled with tenants that are actually paying rent. Right now.

Simon properties not collecting rent for A lot of their outlets in their malls. So just having them filled with the tenets that has endless Pockets. That can pay rent would be a win-win for Simon. They wouldn't be losing money. And that would be good for them until they can build back up demand and tell her over the coronavirus. Simon Property needs to fill these malls with renters that can pay rent. And Amazon, certainly fits that description.

So, I think it would be a good thing for both of them. Amazon would get extremely cheap rent and a centralized area that they can use to distribute products and Property would be able to survive until demand comes back with malls. And I think that eventually it will come back. I've seen locally some models that are doing very well. If I go by them, the parking lot is completely packed and I've never viewed malls as just a mall. I view them. As real estate.

They are real estate locations. They can be used for whatever whatever they want. They can be used for Amazon Fulfillment centers. They can be used for business and Commercial renting, they can be used for restaurants. I see a lot of malls. Increasingly becoming just this Hub of restaurants that people go to Central to the city. So I am still after all this time. I still have Simon Property in my portfolio. I just think that there's so many different ways that they

can use the opportunities. I don't plan on selling this company at a loss because I do think it will retain its value and I still think that malls are going to be something in the future people like to get outside, they like to do some shopping and if they're not doing the same type of shopping, I think that the malls will evolve they'll fill Centers, to be more of a kind of Lifestyle experience place, where you can walk around go to restaurants, see different shows and that

type of thing. So, I think there's still a lot of opportunity for Miles. I really haven't given up on them yet. But I do see this deal with Amazon. Potentially being a good thing

for both of them. Right now. Dan says, hey Joseph, love the show and I've been listening / watching for over a year. Now. I have a couple questions regarding finance, companies. I see that you really like JP Morgan, but would like to see what your thoughts are on Aflac. They seem to be undervalued currently and could have potentially huge upside.

Currently. I have a decent portion of my portfolio in a small cap bank and would like to diversify this sector a bit especially with it being down so much and seemingly under valued as a whole, just looking for, what your opinion is. Keep up the great work. Well, Dan Aflac is one of the companies that I actually sold out of recently. So I no longer hold a flag at my

portfolio. What I did was I just looked over the company and I was asking myself these questions, is this company in a Growing industry is the company itself has potential to grow quite a bit. I I look at those two questions and a flag has 70% of their business in Japan, which Japan has a pretty stagnant economy and a pretty stagnant population. They really don't have much growth in their population.

And Aflac is an insurance company that relies on more people to ensure and they have 70% of their business in a country that has no growth. So that's a huge limiting factor for a flag. Back. And then the 30% that they have in other countries are competing with insurance companies that have significant advantages of scale over Aflac. So although I don't think it's a Bad Company 2 own. I think it will do fine in the

future. I just don't see a ton of potential with it. It's just kind of this company that will be around, but I see that. The growth is extremely limited with a flex. So for that reason, I took the proceeds of the sale and I put it in j.p. Morgan, which has investment portions of their bank. They have And take portions of it. They have a much bigger opportunity to grow in the future, I believe.

So, that's the reason that I took money out of a flak and I put it into Bank of America and JP Morgan. I just see a lot more potential upside but there's a little bit more risk, I'd say to the banks. So you just have to decide

between the two. We have a question from another Dan. He says, hi Joseph. Your show is great. Keep up the good work. I appreciate that Dan. He says, also, I was wondering on your opinion, on the Intel stock to me. It looks like quite Stay strong dividend stock. However, it could be that I'm missing something kind regards. Well, then this is a good question. I have seen Intel as a stock passed around the Discord quite

a bit. Some people discussing investing in it. I personally probably will not be investing in Intel for the same reason that I don't invest in most Hardware tech companies. I see them as very difficult Investments to get right. Basically, apple is the only exception to this that I've made. And the reason why is, because I view apple, as I've said many times as More of a software company that a hardware company.

I think their phones are great Hardware, but the cohesion with their hardware and their software is the final product with Intel. I look at them as just a chip maker. They are a hardware tech company. That's all they do is they make Hardware. So that's not a category. I really like to invest in the same reason. I don't invest in broadcom or Qualcomm or Western Digital or Seagate any of these Hardware companies. I just don't like investing them because I think it's such.

A difficult business with the software company, you can gain subscriptions. You can gain Customer Loyalty, you have companies like apple that they have brand loyalty. They have an enormous amount of subscription income. Their products are very sticky. You have other software companies like visa and MasterCard. A lot of people consider these Financial companies. I consider them text software companies Visa has been gobbling up, fintech companies left and right.

They recently bought plaid which is a software company, so, I like investing in that side of things, the software for it has more residual, reliable income with Hardware companies. If they get anything really wrong, they can lose a lot of business really quickly, like you look at Intel and one of their biggest customers. Apple said, we're going to make our own silicon so we don't need you anymore for that.

An intelligence goes. Okay, we can't do really anything about it. So I don't plan on investing in until. I'm not saying that it's a bad investment. It might go up in price quite a bit after this video. I'm not saying that it won't. I just don't like to invest in Hardware companies. It's not an industry that I think is easy to invest in and it's not an industry. I understand really well. All right. Well with that question I'm

going to end this episode there. I appreciate everybody that likes the video, subscribe and share it with friends. It helps out the YouTube algorithm that mysterious algorithm. So I appreciate everybody that does that and I will talk with you guys next time.