Welcome everyone. Thanks for joining on today's episode. We're going to be talking about, of course the current sell off that's happening. We have a little bit of a sell off. We have the Dow Jones down 1.56% for today. We have the S&P 500 down 1.7% and we have the NASDAQ down 2.14%. So all three major indexes are heavily in the red today. And this is more than just a
September sell off. There's an actual catalyst, There's an actual reason why the markets are concerned today and that is of course the Ever grand company in China, Ever Grand is this massive real estate developer and housing developer in China and it can't pay back its debts. And we know what that's like. We know what that's like in the US when we have a big company that has a lot of debt, heavily leveraged, that develops homes that can't repay its debt.
So this whole situation in China right now with this massive real estate developer called Ever Grand not being able to repay their debts is a little reminiscent of the 2008 financial crisis. What I want to do in today's video is not only do I want to look at My Portfolio, I'll show you what My Portfolio is doing today, what companies are holding up and which ones are selling off.
But I also want to look at this ever grand situation and just look over what's going on and see if it's comparable to what happened in the US and see if this really poses A systemic risk and something that we should actually be very concerned about. So we'll be looking over this situation as well. And then also on this episode I want to do a reaction to Ellen Powell's oped in the New York Times regarding the Elizabeth Holmes trial.
She said it is a wake up call for sexism in tech and she's saying that part of the reason why Elizabeth Holmes is being charged with these crimes and other men that have done similar things aren't is because of sexism. So as someone who has worked in tech for most of my adult life as well as someone who has studied this case extensively, I'd like to give my reaction to Ellen Powell's claim that Elizabeth Holmes is the victim of sexism.
So we have a lot to jump into in this episode, a lot to cover. As always, if you enjoy this type of content, you can get bonus episodes, exclusive content, question and answer segments, as well as access to a very active Discord community with well over 1500 members by joining the Patreon using the link below, it's patreon.com/joseph Carlson. You can give that a try for free. The best part is, there's no risk to this.
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one in the market. Now let's go ahead and jump right into My Portfolio. This is what it looks like on the all time view. I'm up $56,000. At one point I was up around $70,000. So we've definitely had a big pullback. A lot of my main companies have pulled back as well as the market over the past two weeks has been on a big downtrend. Now if we just look at today, if we zoom in and ignore the all time view and I click on the one day view, this is what it looks like. It's not pretty.
I'm down 4000 dollars, 1.31%. This isn't the worst. There's a lot of tech portfolios that are down a lot more today. For instance, the ARC innovation ETF is down 3.79% today. So there's things that are struggling a little bit more, but My Portfolio is down quite a bit nonetheless. If I look at the actual companies that are down a lot, I can go into the tech and cloud computing category. This one's down more than the rest of My Portfolio.
The only other category that's down as much is the Fintech and banking. So if I go to tech and cloud computing, we have Apple down 2.29%, that's $1000. We have Microsoft down 1.63%. That's $300.00 for me. And then we have the I GV, which is the tech expanded software ETF. So lots of red across the board in the tech sector. Then we can go to the consumer category. We have Disney down 2.33%.
That's not surprising. What is surprising is when Costco goes down in price, you know when Costco goes down in price at all or Home Depot that things are bad. These companies typically go in One Direction and that's up. Costco continues to go up, Home Depot continues to go up and it takes a lot to pry these shares out of investors hands. They don't want to sell these shares. Some people are selling out of Costco or Home Depot.
I think it's typically the result of people just selling out of ETF's that happen to hold these companies because I rarely see individual investors selling their shares of Costco and Home Depot and I would love for Costco to go down 10%. That would be a very fortunate event because I've been looking to buy more and more of this company, but it rarely goes on sale. So I might take any little dip that I get with Costco as an opportunity to buy more of this
company. Now regardless, we look outside of Costco and Home Depot. We have Nike down 1%. We have Comcast down 1%, Target down 1%. Disney is the biggest loser today, down 2.3%. We have the real estate category that doesn't seem to be having a sell off. Let's take a look at it.
The malls are down a little bit. Sign, the property is down 1.3%, but then we have Vici and MGM growth properties which is being purchased by Vici in the green today, which is very interesting to see as well as Realty income Corp in the green and store capital just teetering in the red. So overall real estate is doing OK today. We can take a look at my income funds. Jeppy's down 1% today, that's a little bit less than the S&P 500, so it is becoming less volatile than the S&P 500.
And then we have the Schwab US dividend, equity ETFSCHD that's down 1.2%. So these are both down a decent amount but nothing extreme. And then we have the Fintech and banking category, JP Morgan's down 2.86%, that's a lot for one day, almost down 3% and then T Rowe Price is down 3.52% that's also a lot for a one day sell off. In fact, T Rowe Price really got hit today. Now T Rowe is a smaller holding for me, I've held this for a
very long time. I'm heavily in the green on it overall, so 3.52% doesn't make too much of a difference. That's only $76.00. But with JP Morgan this hurts a little. Going down $750, that's a bit of a hit. And one thing that I said continually with JP Morgan, I said in video after video recently that I don't consider JP Morgan to buy. I think it ran up so much and was at lofty valuations for the company. It's trading higher than it's
ever traded before. When I bought JP Morgan, I bought it down in this area in the 90s in the one hundreds. And then I even bought a little bit more right here in like the one 20s. But I wasn't buying it up here. And I continue to think that JP Morgan isn't a special deal right now. In fact, I think it does have some downside pressure because it's ran up so much and it's a bank. And anytime people become worried about anything with the economy, banks seem to be the
first thing to sell off. So I haven't added to JP Morgan anytime recently. If I was to do anything right now between buy and sell, I would be taking some gains with JPMorgan and selling a little bit before buying it. Now moving on, we can go to the healthcare category. Abby's down .56% and Johnson and Johnson is completely flat today. So it's really not moving a whole lot because of any of this news.
Now the renewable and energy categories actually in the Green Dominion energy is up 1.58% and next era energy is up .6%. These are both smaller holdings, but it's interesting to see that when there's trouble in the world and people are looking for safety, they will start to shift money into these utility companies. They consider them a safe haven against trouble. And then we have the restaurant and delivery category, which is just one company. It's Texas Roadhouse, that's down 1% today.
I'm still very bullish on Texas Roadhouse. I think this is a fantastic company, growing revenues quickly, growing EBITDA quickly. It's buying back shares. It has no debt. I just think overall everything with the balance sheet and the growth prospects of this company is very good. So I remain bullish on this one. So this is how the portfolio looks overall today. Lots of red. It's pretty ugly, but as bad as this is, again, this is nowhere near as bad as a lot of tech
focus portfolios. Those are the ones that are really getting hit today. Overall, I'm still in the green by $56,000, but keep in mind we could go back in the red if the market decided to go down another 15, twenty 30%, all of these gains would quickly vanish and we'd be back in the red. And that would be when I would try to buy as many great opportunities as possible. So I'm not in a situation where
I'm necessarily concerned. If my gains go away and I go back in the red, I want to accumulate as much ownership of the best companies as possible and when prices go down, that's an opportunity to do that. So when I have days like today, it's not really A cause for concern. Now, if we go over all the various reasons that investors could be selling out of their shares today, we have a lot of
different things to choose from. Investors fear a contagion sweeping financial markets from the troubled China property market. We're going to be talking about that more a little bit later. We also have the Fed beginning their two day meeting Tuesday and investors are worried that the central banks will signal that it's ready to start pulling away monetary stimulus amid surging inflation and
improvement in the job market. So investors are concerned that the feds going to stop propping up the market. COVID cases, because of the delta variant remain at January levels as colder weather approaches in North America. And then also September is just not a good month for investing. The average return in September for the stock market is .4%
decline. Investors are also concerned about brinksmanship in DC Congress returned to Washington from recess, rushing to pass funding bills to avoid a government shutdown. So we also have some political stuff going on in the background as well that may concern some investors. Now to this big list of things to worry about. I think the ones that investors are the most concerned about right now is the China ever
grand situation. It's this large construction development company that took on an enormous amount of debt and now it's running into a lot of problems paying back its debt and now they're believing the company is going to go completely bankrupt. Now they describe what this company actually is. They say in a risky race against time that ran for two decades, China Ever Grand Group turned billions of dollars in borrowed money into the dream of home ownership for millions of Chinese citizens.
It launched project after project in every Chinese provenance, selling apartments years before they were completed and scratching together enough cash to stay just ahead of the massive interest bills. That is not a business strategy that I like selling apartments years before they were completed and then scratching together enough cash to stay just ahead of massive interest bills? That sounds incredibly risky. This is the opposite of the type of company that you would want
to own. Well, the party has now ended. Years of aggressive borrowing have collided with Beijing's crackdown on debt, leaving the giant developer on the brink of collapse. Construction and ever grants projects in many cities has stopped. The company has faced A litany of complaints and protests from suppliers, small investors, home buyers who sink their savings into properties the company promised to deliver. So people actually bought these properties and now nothing's
being built. Now this story gets so sad, it's almost comical, the efforts they're going to, to try to repay this massive debt. They say cash is so short that this summer the developer said it begin paying bills to contractors and suppliers with unfinished apartments instead of actual money. So they have no money to pay these bills and they're saying, hey, do you want to take a half finished apartment as payment, right? That's got to be worth something, this half finished
apartment. Now, they also mentioned that things like the free meals that they used to provide their staffers are no longer a thing. They're saying that they're laying off a lot of people and the situation is unfolding in a really bad way. Now, the biggest problem with the story is just the scale of it. This company was a massive company in China. The amount of debt they had, the amount of debt that they took out was $109.56 billion and that doesn't account for the promises
that they made. That was well in excess of $200 billion. So they have people that have paid for $200 billion worth of construction that they now can't deliver. And part of what led to this massive problem is the inefficiency of ever grants business model. You can compare their growing revenue to their growing net income. Although the revenue went up multiples of where it was a few years ago, the net income didn't follow. It was mostly flat and it went up only slightly.
So this company was taking in a lot more money, but they weren't profitable. And now, of course, because this company's collapsing and they can't pay their debts, the stock is down around 80% from its highs. It used to be worth over $125 billion and now it's well below
25 billion. Now of course, with the collapse being a big company with a lot of debt that might pose systemic risk to the Chinese market, there's a lot of people making the comparison to the 2008 financial crisis in the US. Whether this will shake out similar to that is unknown.
Nobody can give you a firm answer on that and what the Chinese government will do. But what I take away from this is to always look at the balance sheet of companies that you're investing in and consider the amount of debt they have. Every time there's some huge collapse and huge problem with the company, it's almost always accompanied by excessive debt. Debt is almost always the primary culprit in every single financial collapse. Every time this happens, it has
to do with excessive debt. So now every company that I invest in, I heavily prefer that they have more cash than debt and if they do have debt that it's not used in excess. Now moving on, I want to jump into this oped from Ellen Powell. She writes that the Elizabeth Holmes trial is a wake up call for sexism in tech. Now we're going to look at the specific case in the allegations that Ellen Powell makes and how she connects it to sexism.
Before we jump into this, I just want to mention that I think if you're just making a general commentary that sexism exists in tech in general, I would agree with that. I think there's still a level of sexism that exists. But what I want to look at is specifically this case if Elizabeth Holmes in particular is the victim of sexism.
Now this oped starts out with Ellen Powell doing a little background saying that Theron else was founded in 2003 and that there's a lot of hyperbole and and different talk about the grand future. And Elizabeth Holmes raised a lot of money, $400 million in financing and Theron else was valued at one point in time at $9 billion. And then she gets to the main issue here, she says.
But after it was revealed that Theronos was not transparent when it's blood testing equipment failed, it became clear that the company would be the exception. That proves the rule that tech chief executives rarely face the full consequences of the harm they cause. Yet Miss Holmes is also exceptional for the basic fact
that she is a woman. Time and again we see that the boys club that is the tech industry supports and protects its own, even when the costs are huge and when the doors crack open ever so slightly to let a woman in, the same rules don't apply. Indeed, as Miss Holmes trial for fraud continues in San Jose, CA, it's clear that two things can
be true. She should be held accountable for her actions as CEO of Theranos, and it can be sexist to hold her accountable for the alleged serious wrongdoing and not hold an array of men accountable for reports of wrongdoing or bad judgment. So Ellen Pal Hare is not arguing that Elizabeth Holmes couldn't be held accountable. What she's saying is that Elizabeth Holmes is being held accountable by other guys that have done similar things, are
not held accountable. And so that's where the sexism comes in, is that Elizabeth Holmes is the victim of selective enforcement of these laws. And then Ellen Powell highlights examples of male entrepreneurs that weren't held accountable. Questionable, unethical, or even dangerous behavior has run rampant in the male dominated
world of tech startups. Though never charged with crimes, Weworks, Adam Newman, and Uber's Travis Kalanick hyped their way into raising over $10 billion for their companies, claiming they would disrupt their stagnant, tired industries. And this is where I think Ellen
Powell gets it very wrong. Comparing Elizabeth Holmes to Adam Newman or Travis Kalanick, she's saying that Elizabeth Holmes is being prosecuted because she's a woman, and Adam Newman and Travis Kalanick are not being prosecuted because they're men. That's inaccurate. The reason that Elizabeth Holmes is being prosecuted and Adam Newman and Travis Kalanick aren't is because Adam and Travis didn't lie about their current technology and their existing business. They did hype their way into a
$10 billion valuation. But hyping your way to a big valuation is not illegal. Saying that I'm going to become a trillion dollar company and I have all these big ambitious plans and I want to conquer the world is not illegal. Even if I raise a lot of money to go forward with my ambitious plan, and even if I lose money in the pursuit of this
ambitious, overly hyped plan. What is illegal is lying about my current technology, Lying about my current business and the capabilities of my products that is illegal. Lying about the present and the past is illegal. Hyping the future is not illegal and Elizabeth Holmes lied about
the present and the past. Another counterpoint I'd bring up to what Ellen Powell is arguing here is the story of Nicola and Trevor Milton. This is probably the most comparable company and CEO to Elizabeth Holmes and Theranos. What Trevor Milton did, like Elizabeth Holmes, was lie about the current and previous technology of the company. He didn't only boast a big vision about the grand future of Nicola, but he lied about their current technology, which is illegal. That is fraud.
So like Elizabeth Holmes, he lied about current technology and like Elizabeth Holmes he's being charged with fraud, 3 counts of it, and he could face up to 60 years in prison with these charges. So I don't see Trevor Milton hair being treated any differently than Elizabeth Holmes. Both of them lied about their technology and both of them are getting charged with fraud. And even more specific to Theranos itself, even at the specific company, Elizabeth Holmes is not the only one being
charged. They also charged the former president of Theranos, Sonny Balwani, who I'm fairly certain he's a man. He identifies as a man and they have raised charges against him as well for fraud. So even at this company, Elizabeth Holmes is not being singled out. They charged a man with similar
charges. And one more thing that I'd point out in regards to Ellen Powell's arguments is one of the points that she brings up is that Elizabeth Holmes was singled out because of her weird mannerisms, her voice and her eyes and the way that she dressed. That she got all this attention that males don't get. Well, that's not exactly accurate either.
Smirks, silence and nerves. A recap of the drug pricing hearing with Martin Shkreli. Martin Shkreli is serving A7 year prison sentence for wire transfer fraud, but the big focus of this trial was his behavior, his smirks and silence and the way that he looked, the way that he acted. His behavior and mannerisms got more media attention than the
actual crimes he committed. So again, if the overall message here is that there's still some sexism in the technology industry, a male dominated industry, I would agree with that. I think there's a lot of progress we can make and ruling out different instances of sexism, but trying to say that Elizabeth Holmes is being treated Biasly and other CEO's aren't being treated the same I
think is incorrect. I can find plenty of examples of male CEO's being charged and going to jail for the very same things that Elizabeth Holmes is being charged with. So in my opinion, so far, I don't see any examples of biasness or extra scrutiny on Elizabeth Holmes. Now that is all for today. I hope you enjoyed the episode. I'll do another update this week relatively soon to see how all of this shakes out, because so far today we're down one. 69% and the losses keep accumulating.
So I'll give you some more updates later on this week of how this pans out, but that's all for now. I'll see you next time.