Welcome back to the jaws of Carlson show. On today's episode, we're going to be reviewing three deep value companies, the way that I would define deep value, is basically every metric on the table. Every one of them from the PE Ratio, the price to books the price to sales, the dividend yield the historical valuation. All of them, show that these companies are very deep value. Ally Financial is one of them. This company trades at a 4.5 PE ratio.
And it pays a 3.6 percent dividend yield Paramount. Global is another one. This This company trades at a nine point three PE ratio and as a dividend yield of 3.7% and then Intel's the third one. This companies that at n PE ratio and a 3.9% forward dividend yield, so we'll be looking in depth on all three of these companies, and I'll share my opinion on whether or not I plan on buying them. Now, we also have a lot of news to go over in this episode as
well. Howard Mark says, now is the time to buy Ed Pitonyak, the CEO of each. He went on to Mad Money with Jim Cramer to explain new potential categories that Vici May grow into Cook basically admitted that apple is working on an AR VR headset, and he even gave kind of a hint of when it would be released and apple, reportedly is going to have a flood of new devices coming. This fall, we'll be looking at this news and the rumored devices and what it could mean for Apple stock.
So, we have a lot to jump into. Let's go ahead and get started. First of all, looking at the last week, if I filter by the past five days were up six, point eight, nine percent, that's twenty one thousand one hundred and seventy eight dollars. So this was actually a decent. Second week, stock price has moved up. We earned a thousand dollars in dividends in one week, twenty thousand dollars in capital gains and that's nice to have. But I really don't pay attention to this too much.
It's interesting to look at but these stock prices trade around week-by-week like crazy and timing. These moves is very difficult a week ago. There is many people, many content creators, many YouTubers, many tick talkers, many Financial Twitter accounts saying to not buy the dip to stay away from it. And here we are up 7%. Sent in the past five days. This is the risk of trying to time the market that I've repeatedly warned people against.
It is incredibly difficult to do and most people don't come out successful. I'm not doing that. I'm staying invested in these companies and I'm continually compounding my passive income. I record this level of passive income on a website that I use called quatrain sites. This is available to all patreon members. You can see the growth of it month over month throughout time, and I'll be adding in June's dividend income at the
end of the month. So next We will see how much I earned in June, but I'll give you a little bit of a preview so far. In June, we've had a total of three dividend payments. We've had one on June 9th from Microsoft for $95, one from Target for $10, and then one from Texas Roadhouse, for $140. So only three dividend payments so far this month. And based off, just these three payments. It looks like it'll be a pretty
low dividend amount this month. That's what it looks like because we're only going to get what $200 in dividends 250 bucks. That's not a lot but We can get some more information on this. If I go back to qual trim, I can see my upcoming dividends. This is my dividend pipeline. These are ones that are not projected. They're not hypothetical. These are officially declared dividends that I am 100% going to get paid based on my current Holdings and I will get paid $552 from SC HD tomorrow.
That'll hit my cash balance tomorrow. So this one dividend payment will raise my entire dividend income for the month to around 700 $800. This one dividend payments going to bail me out then on the 29th we also have 26 dollars from tiro price and then July 7th, I have that $445 dividend from Vici. So all in all this is adding up to what could be a pretty close to record month, it certainly will be a high one. So I'm excited to see the dividend income growing.
So I'll have some cash to spend. I'll have a little bit to put in this portfolio and hopefully by the most attractive companies I can. Now, before we get into companies, I'm looking at and doing analysis on I want to just go through some input that Howard marks has in my humble opinion. I think that Howard marks is one of the most remarkable introspective investors of at
least the past five years. When I look at different advice and and different actions that investors took, I think that his overall was was very good over the past three years, he behaved and acted and his input. I think was far more valuable than most other investors input. So I pay attention to what he says. And to my delight I was Eyes to see and happy to see an article where Howard marks was not cautious. He wasn't being defensive for
the past couple of years. He's been defensive and cautious, but right now he has turned aggressive. And in the article he goes on about why he's being more aggressive. He says, quote today I'm starting to behave more aggressively everything we deal in is significantly cheaper than it was six or 12 months ago. That is the key line there. Howard marks does look at relative valuation. If Is go up rapidly. He's less eager to continue buying because he knows that
those tend to revert. Back to the mean when prices go down rapidly that catches Howard marks attention and he's more eager to start buying and it is true that basically everything in the equity markets right now is significantly cheaper than it was 12 months ago. Now, what he deals with is high yield bonds, leveraged, loans mortgage-backed Securities and
collateralized Loan obligations. He's in a different category of investment but the point Still Remains and I think His advice here is completely applicable to what we're buying, which is typically stocks. And even though Howard marks will posture himself to become a little bit more aggressive in his buying and a little bit more conservative. He also thinks that timing the market is a terrible idea.
He says, quote, I think the idea of waiting for a bottom is a terrible idea assets, could get cheaper than current valuations, in which case we'll buy more. Now this statement can be confusing if he is 100%. Sent invested right now. He has all of his money invested. He's not waiting for a bottom and prices move down. What is he going to use to buy more in his case?
He could raise money. Through different means you could raise cash maybe from investors and then you could do something else that we could do. He could look at Investments that did not move much during those downward movements because not every Investments going to fall in price. So if the market move down more, he could sell some Investments that have held up relatively well and move that money into the ones that have come down. And price significantly.
So even though you're 100% invested, that doesn't necessarily mean that you can't buy more in the future. Most of us are going to continue working will have incomes that we can use to fund future Investments. And we can sell conservative Investments to make room for more aggressive ones. For example, if the stock market goes down, another 20% odds are Pepsi will go down like five percent. That's the case I could sell my Pepsi holding to buy more aggressive Holdings in something
like tech companies. So there's Are ways to stay 100% invested and continue to buy as the market moves down. And Howard marks goes on of why he's being more aggressive right now than other points in the market. He says, quote were more aggressive if we think Bargains are Rife. So Howard marks thinks right now. Bargains are right. He says and we are more defensive.
If we think the market is elevated and investor behavior is imprudent and this is something that is repeated over and over again, with the less Prudence that other investors conduct themselves. The more Prudence you need to You have and the more prudent, other investors become, the less imprudent you should conduct yourself. So when other investors become less greedy, they start giving up on the stock market, they become fearful, they start
selling out of good companies. That's when it's time to become a really aggressive and by Deep value companies. Right now, if I look at my portfolio on the dip finder which is a tool I developed as part of the patreon membership, this tracks, the movement of every single company against their 200-day moving average, that is a technical analysis term of tracking them. Mentum of a stock if these companies have momentum downwards and momentum upwards.
Right now, every company in my portfolio has momentum downwards, except for Pepsi and Vici vgz only one that has positive momentum. So I completely agree with Howard marks sentiment here. So having said that, let's go ahead and look for deep value. Dividend-paying companies, I have three of them currently that I want to review the first one that we're going to. Look at is Ally Financial. And the website we're using here is quatrain site.
It's something we've developed as Part of the patreon membership, you can join the patron with a free trial with the link in the description or the pin comment below. Now, Ally Financial is a bank, so it's it's an online bank. It's kind of a newer version of a bank where they don't have physical branches, and that's been a big cost Advantage for Ally Financial. Because if you compare Ally Financial to something like Bank of America, right?
You compare it to these two different companies Bank of America or Wells Fargo or JP Morgan or Citigroup, All of them, have thousands of different physical branches, all across the United States. All of those branches have employees in them. They have rent. They have leases that they have to pay, and that adds to the cost of running a Bank of America. Well, Ally Financial came up with a different business model of having their Bank have no physical.
Branches 100% online and being 100% online. Improves their cost structure and allows them to do things that other Banks simply don't do. For example, they have a 1% interest on their savings account. Be Morgan Bank of America Wells, Fargo Citigroup typically, they don't do that. It's much lower, they have no overdraft fees. They were one of the first Banks to get rid of the overdraft
fees. And in terms of the concern of customer support, they have 24/7 customer support and both live chat and phone so you can get a hold of them at any time even though they have no physical branch that you can walk into. Now, this business model that Ally Financial has having no physical branch has made it so that they could build up their business without taking on as much debt. That's one of the huge advantages that they have, for example, take a look at their funding composition.
This is off of their most recent earnings report, they have deposits, and purple secured debt, which is the really bad debt in the gray there. And then they have other and unsecured debt. Over time. Ally Financial has gotten rid of more and more debt. And now they have almost no secured debt. So they've gotten rid of almost all of their bad debt. Only one percent of their funding is from secured debt and even unsecured debt only makes up five percent.
That is a very small amount and they do this because they can fund their entire business purely from deposits. That's the difference between them and other Banks. They don't have as much overhead, so they don't need to take on as much dead. Now, in terms of valuation, it doesn't really get much cheaper for this high quality of a company Ally Financial currently trades at a 4.5 PE ratio.
That's a very low price to earnings even if we are going into recession this is really low in 2019, for example, this was a nice So Ally, financials trading at half the PE at was pre covid and then the price to book is point eight, which in absolute terms is also very inexpensive. So the basic metrics right now look like a lies deep value. If we bring up the price chart hair, we can look at the past
five years. This is how the companies traded in 2017 to 2019, the company traded around 25 to 30 dollars. That's the price range. Then of course, it's sold off during covid with everything else. And then it started at steady climb all the way back up to $55
investors were excited. During this time, all of financials including JPMorgan and other big Banks traded up to record highs and now the excitement has fizzled off and it's been replaced with fairs, many fears concerning their future and right now, the company trades at $35 per share, which you'll notice is right around where it was pre covid in 2019. But things have improved dramatically for Ally Financial since 2009.
Kane. We've already seen that their balance sheet, their deposits, and their debt have all improved. They've had more deposits and less debt. That's a good thing and it's actually improved significantly since 2019. Yet the stock trades at the same price, the liquidity composition of the company has also improved. They've added billions of Highly liquid Securities and cash equivalents, their allowance for loan losses which means how much
wiggle room they have for loan. Losses has also over doubled. In 2019 it was point nine. Nine percent So under one percent and now it's 2.63 percent. So Ally Financial has a lot more margin of safety.
They have a lot more wiggle room in case they take on loan losses and this is important to keep in mind because the reason that Ally financials trading down, so much right now is specifically for this concern, and that is because Ally Financial makes around 70 percent of their earnings from used auto loans. They are huge in the used auto loan market, and investors have very big concerns about that. Here is a chart showing the Average price of used cars over the past three years in 2019
there around 21,000. So if you wanted to buy an average is car, you're paying 21 Grand then it went down a little bit to 20,000. Then in 2020 it started to climb 22,000. Then in 2021 used car prices really exploded going up to twenty seven, twenty eight, twenty nine, thirty thousand dollars and they have not begun to come back down. Use car prices are now at 30,000 And $786. And this is the index price. Meaning, this is the average of all us car brands.
This is a 44 percent increase in price over the past two years. And this increase in used car prices has certainly benefited Ally Financial. This is a big part of the reason their net income went from 380 million, 400 million to 900 million in the course of one year. Loan volumes increased significantly because of used car prices, going up 40%. And although that's been great for Ally Financial for 20 21, The question is, how long will those used car prices? Stay this high will they
collapse? Will they go down 30-40 percent? Or will they stay at a very high level for a long period of time and this is where opinions differ greatly. Here's the CEO of Ally Financial and his opinion on the subject. But we think the normalization and used car pricing is going to be very, very gradual. In early signs in 2022, is the market staying quite strong. What?
I will tell you within our financial projections that we provide to the street we call, for a 15% decline between Tween, the start of 2022 and the end of 2023. I think the reality is going to likely pan out to be something different. We think used car prices are going to remain quite robust for the foreseeable future.
He just said that he's calling for a 15% decline. 15% from 2022 to 2023 so they think used car prices will only decrease by 15 percent over the year and he even says that those estimates are conservative and more than likely, it'll go down. Less now Ally Financial stability. It's on the subject differ greatly from other YouTubers and people that work in the industry.
Here is one example that recently got highlighted the use car bubble, lucky Lopez hair goes to a repossession lot and says that repossessions are picking up because people are underwater and they're used cars and they're going to start ditching them which would cause low and losses for investors in Ally Financial. He goes to parking lots where there is repossessed vehicles or unsold vehicles and he shows how many of them are coming in that more and more repossessed or
unsold vehicles are filling lat. It's and there's actually going to be a cart influx, not a desperate need for them. Like we have. Right now, there's also another piece of data I looked at, from KPMG, which is a used car price market, and whether or not it will crash in it. They have a section called when the Music Stops nature abhors vacuums and Market support, and balances demand. And supply of new vehicles. In the US will come back into
equilibrium, how that happens. We'll make an enormous difference to automakers consumers, Parts, suppliers Auto retailers. Perhaps the economy itself, given the current trends of inflation, new car prices could continue to rise through 2022. However, as Supply comes back, automakers are likely to reintroduce incentives and
dealer margins will compress. As a result, we may see a reversal of some portion of the price increases, whatever path, the new car market takes to The New Normal used car prices will eventually return to the traditional relationship with new vehicle prices. In other words, a 20 to And plunge and used vehicle prices is in the cards and then they show different charts, illustrating likely outcomes
based on inflation. But they admit this is not a perfect science and they really can't predict the outcome. What they can predict with a certain level of confidence, is it used car prices, won't trade in line with new cars for long. That is an imbalance in the market. And as we've seen over the past two years imbalances, eventually get worked out. So, as of right now, I'm pretty torn on Ally Financial. I really am. The company's a fantastic company.
That's honesty. If you can't dip, it has growing revenues ibadah cash flow. It has a better balance sheet. That dividend growth is superb. This company has grown its dividend like crazy over the past five years. It pays a very high 3.6 percent yield with the low payout ratio. So the dividend does have room to raise over time even more than what it's currently at and the company's doing share BuyBacks. They raise their buyback program to two billion and the shares have been going down.
Steadily over the past five years in terms of the Metrics in the fundamentals of this company. It looks like it's incredibly well priced deep value and it has very strong fundamentals and maybe the market is overreacting and this is a great entry point. Now, the next deep value dividend-paying company we have is Paramount Global. This is the Paramount plus company. This caught a lot of investors attention. When Warren Buffett added it to his portfolio.
This is actually a decent amount to their portfolio. A point seven two percent waiting not insignificant when you're looking at two point, six billion dollars. So Berkshire, thought Paramount was worth holding. The company also trades at a very low valuation, a 9.3 forward, P/E ratio that is well below the S&P 500 17 over the past five years. This stock has continually been on a downward Trend it dipped heavily in 2020 then it
skyrocketed. When Bill Huang used his twenty billion dollars of Leverage to bid up to ninety four dollars, a share, all that leverage quickly, got unraveled back to where it was at forty, one dollars, a share. And now, the stock price is all the way down to $25 per share.
Now, over that steady decline in stock price, It's a lot is change Viacom and CBS merged together in 2019 to form Paramount. Plus that's why you see the rapid increase in their revenue, going from fourteen point five billion to twenty seven point eight million. This was because of a merger. This also caused their ibadah to climb. You can see it go up in 2019.
So even though the ibadah is going up like many content companies we've seen similar to Netflix, the free cash flow is going down because they have outflows of cash to pay for content. That they all hopefully monetize by new subscriber gains and this is where the difficulty of the story comes into play. The free cash flow is going down over time because the economics of cable companies is well proven to be very good economics, very profitable.
The economics of streaming businesses is not yet proven to be very profitable, and you can see that through the free cash flow line. So, as they make this transition from cable company to streaming company, it's very similar to what Disney's doing, and there's a lot of volatility And unknowns in the process, but they are driven to make this a successful and profitable change. Now, the balance sheet shows
that they have a lot of debt. In fact, if we filter by the amount of debt, you can see that in 2019 with that deal their debt, roughly doubled. And right now it's at 18, point three billion, but this debt has been moving in the right direction down from 21 billion to 18 point three billion. So their debts going down and their cash.
Balance is increasing over time to things that I like to see and as of right now their debt really Isn't considered a problem they can cover through their ibadah. Now the shares outstanding for this stock jumped, when they did the mergers. So, in 2019 that shares outstanding went up like crazy, but it's sense basically leveled off and the past four quarters, they haven't really issued any new shares and they're not a company that I think wants to
dilute the shareholder. So, here's my thoughts on Paramount, overall the company fundamentally looks fine, the valuation of its low, the dividend yield is high. The payout ratio is low. It looks like it's going in the right direction, but I very hesitant to jump in to another
big entertainment company. With a lot of debt transitioning from a legacy cable company, to a new streaming company, the challenges, these companies face in the process, I think are immense and we can see Disney going through these challenges right now. Disney is my biggest loser, in my entire portfolio. The stock price went up like crazy and then it's gone back down since investors are starting to question the economics of streaming.
So right now, I'm already exposed to the streaming industry through Disney. Eventually Disney and Netflix and other companies will prove that streaming has good economics. But as of right now, I don't want to add any additional exposure to my portfolio. I already have Disney in it. Already have a thesis on this company and I think Paramount plus would be kind of, more of the same. A big Legacy company with a lot of debt moving from cable to streaming.
So, I know that Paramount plus is not the same as Disney. I realize they're different companies, but they're in similar enough Industries and situations that I don't want to double my exposure. Now the next That deep value dividend-paying company. I'm looking at is Intel it trades at a 10 forward, P/E ratio, and Evita ibadah of 3.7. This is cheap. This is numerically cheap. The dividend yield is three point nine five percent.
So you're getting almost a four percent starting yield on the company with a low payout ratio of 24. Moreover, if we look at the valuation, we can look at the free cash flow. This company generally speaking it's been growing over time and 2020. It was twenty point nine billion last year. Is nine point six billion. This is significant free cash
flow. This means the company with its 157 billion market cap is trading anywhere from a 10 priced free, cash flow to a 20. That's a very cheap price to free cash flow ratio. And it's not like this company is trading at a price that normally trades that it's currently down, 21% below, its 200-day moving average which means the company is in a dip. In fact if we bring up the price chart here we zoom out ten years. We can see that until right now is around 37.
Evan per share and its trading around the same price. It was in 2017. And in between that time period, it's traded well above that up into $67 per share. So, let's go ahead and look at the fundamentals of this company. First of all, we want Revenue growth. This company is growing its Revenue, even though it's an old company that's getting beaten up by AMD and Nvidia. They're still growing Revenue, which is something reassuring to investors.
Another thing we want to see is that ibadah growing over time and clearly that ibadah is growing especially over the past four years. Here's the free cash flow like we've seen is generally speaking growing over time. This won't be perfectly consistent every single year but you can see the Trends. They are pumping out a lot of free cash flow every year they're balanced. She actually looks really good. They currently have 38 billion dollars in cash. Thirty two billion dollars in
debt. So this is actually a company that's cash-rich they have more cash than debt and Intel also has been a very consistent dividend pair. They haven't grown it consecutively every single year. There's some years where they've taken a break and raising it, which I think is prudent from the management team to do when they need to. But you can see over the past 10 or so years. You've had pretty significant dividend growth with this company.
Now, this is a company that historically has done a lot of share BuyBacks, so they've been paying a dividend and doing share, BuyBacks returning. Most of the capital immediately to shareholders, but you can see that over the past couple of quarters, they've taken a break from it and I believe to do more capex, spend. They're trying to reinvest back into the business to compete with AMD and Nvidia.
And other chip makers because we can see if we look at the capex, spend that it's gone up quite a bit over the past five years and this can be viewed as a positive or A negative for Intel investors. I view this as a positive, they have to spend heavily to continue making money and maintaining a competitive Advantage.
So I think this 20 billion dollars in capex spend is probably well spent, so overall in tells another good dividend paying company that I think is in deep value territory, the big assessment here is whether or not You think this company can continue to compete with the likes of AMD? These companies have really raced ahead and their technology and Intel is kind of in catch-up mode. You can see the revenue growth of a company like AMD. This is what they're competing with.
Nvidia is another one. This company's raced ahead and Technology leaving until in the dust. So these are the issues at Intel's dealing with and I don't think that it's it's a death sentence for Intel. I don't think it means the company is a bad investment. It's just a judgment from the investor. Do you think Intel will continue to grow and keep up with competition? Or will it get steamrolled by AMD and my big reservation that I've always had with Intel is
them keeping up of competition? In fact, out of these three companies one that I'm closest to buying, the one that I think has the best story of the best fundamentals in, the least amount of overall risk to its future, is Ally Financial. This is one that I really could see myself buying in the near-term future. I think that there's a decent chance that the concerns with Ally Financial are being
overstated. By the market ever since 2008, the market looks at any type of recession, Fair any type of loan losses, and they think that banks are poison that you have to avoid them. You have to get out of financials. And I think there's a very good chance that companies like Ally Financial will fare far better than expected even in a recession.
So those are three companies I'm looking at but I haven't added any of them to the portfolio and in the meantime, I will be using my cash balance to reinvest, so if I can't find any new company to buy currently all Ploy my cash into my current Holdings. The way I do that is pretty simple. I just look at which companies selling off the most. I go in and add to the ones that I think have the best combination of their current future outlook and the lowest price. Now, moving on, I want to jump
into some news here. One of my largest Holdings which is VT property, the CEO went on to mad money last week and he shared with Jim Cramer some, some different categories that VG's looking into expanding into different real estate that they're in talks of buying and I want to give my action to this. Now, before we jump into this clip, I have to mention today's sponsor, you probably know them. It's FTX us which is one of the largest US regulated crypto exchanges.
And this company's been on a sponsorship spree, you've seen their name all over the place. From the Miami Heat arena. They sponsored Steph Curry. Trevor Lawrence, Tom. Brady, Kevin O'Leary all these different bigwigs because they want to get their name out of their product and platform. Most people are familiar with ft x as a large crypto currency exchange and it is true if you're into And seeing you like
trading this. You can go in and trade cryptocurrencies on FTX with with minimal fees. So their fees are far less than most of their competitors. They're also very well back. So there are a lot more stable. There are just valued at thirty two billion dollars so it's a pretty big Stable Company and they're moving into different categories. One of them that they're moving into right now and this is currently in beta with thousands of testers is their stock trading platform.
This is what they wanted to sponsor me and get get more people aware of their I'm moving into stocks and they're doing this aggressively. They have a lot of ambitious plans with it. For one, you can simply go in right now do buys and sells of any company during Market hours, you can do fractional, shares, or whole shares, and you can also trade without worry of them selling your information for payment for order flow. A lot of the other brokerages
are doing that right now. FTX doesn't do that and there's no fees what they're trading. So go ahead and set up your account right now. It takes two minutes to do. It's completely free. There's no bait and switch. There's no upsells or anything. That you simply open up an account. When you're opening up the account, use the referral code Carlson.
My last name. That lets them know that I sent you a help support the channel, and when you use that code Carlson, you will be automatically credited $10. When you do your first 100 dollar trade. So your first 100 dollar trade, you'll automatically get a 10% return. So there's a link in the pink comment below if you want to sign up now. All right. Now let's go ahead and get back to this clip. Here we have the VTC 0 which is a A CEO of one of my biggest Holdings in my portfolio.
I currently have a value of thirty seven thousand nine hundred and Vici around 6,000 of that gains. And I plan to continue adding more to this company. I really like the leadership. I like the future of it and I especially like the valuation and risk profile. I think the risk adjusted returns Avicii, in my opinion, I think it will be pretty good over the next ten years. But VG has started off with the majority of its exposure.
In gaming. Real estate which is is basically gambling like Caesars Palace and MGM and the VTC O'Hara's explaining different experiential categories that they're going into. We're also very excited about growth in non-gaming which was evident when we announced our very exciting transactional. Cavett the first place outside of casinos that he mentions is Cabot, which I've known for a while that VG's going into golfing.
So, this wasn't much of a surprise, one of the leading Place makers and operators and what we call pilgrimage golf globally. So we know that VG's, big into casinos, Hotels and golf, but what other categories might they be looking at now? Jim asks him if they plan on doing deals with the NFL and Ed has a different category of sport in mind. We know we haven't cracked the NFL yet but I will tell you that the global soccer Global
football is a category. We're intrigued with the category in which we are having some initial discussions and Global soccer. Global football is a category that they're having initial discussions with and he goes on to highlight that Global soccer they believe will have more. Flex of cash and New Capital into that sport category than the NFL. So we've seen Vici grow its business from gambling hotels, golfing, and now they may be
going into soccer. So I'll be along for the ride and I'll let you know if they announce any new deals. Now, moving up to a different category of company. My biggest holding and total value is Apple. This company's been a great performer so far. Even after the pullback I'm still up twelve thousand dollars. Now we know that Mark Zuckerberg is really excited about the metaverse.
They bought Oculus, they've sold millions of these devices and their spending and around 10 billion dollars per year on research and development just for the metaverse. Just for a are Mark Zuckerberg sees the metaverse and these headsets as the growth path for Facebook. It's why they changed the name of Facebook to Metta and he recently just released a video of all the different headsets
they're developing. Today, I want to show you for VR research prototypes that we're working on to invent displays that are as Vivid and realistic as the physical world and much more advanced than traditional computer screens we use today. First we need retinol resolution and that means getting up towards, you know, that 60 pixels per degree. So we built butterscotch? That's this prototype that lets you comfortably. Read the smallest letters on an eye chart. Second is focal depth, normal
monitors or a set distance away. So you just focus on one place but in VR and AR you need to be able to focus on things that are very close and very far from you with varifocal and eye, tracking tech power, half tone prototypes but you focus on any object. Eject at any distance, we also need to fix Optical distortions and software so quickly that it's imperceptible to the human
eye. Next is high dynamic range nature is often 10 or 100 times brighter than modern HD TVs and the highest and monitors and we need those colors to be just as Vivid to feel realistic. So we built Starburst. The first HDR VR system that we know of the goal is to fit all of these Technologies into a device that is lighter and thinner. Than anything that currently
exists. So we built Halo kick to a working experimental device, using holographic displays that can already play PC VR experiences and there's still a long way to go, but I'm excited to bring all this Tech to our products in the coming years. Now while Zuckerberg and meta has been very open about their development, and their goals, and their process, even showing us, their prototypes, there's other big competitors that have taken a different approach.
Apple has been rumored to be working on the same project. For some time, but all of this has really been rumors. We know that they've been working on this through deduction of employees and different people that have been hired at the company, different rumors and maybe a couple leaks. But so far this has been second and third party sources. Here is a clip right from the CEO of the company, the actual source and he's asked specifically about AR and VR.
Hi, mr. Cook nice to meet you online. Chinese consumers are highly enthusiastic about VR and AR Technologies, but some of them Not very satisfied with the products currently available on the market. So what do you think are the key factors for a our products such as a I had access to succeeding in the consumer Market? He's a specifically about AR and VR headset Chinese consumers are excited about the prospects but they don't like the devices that much. What does Apple have up its
sleeve? That's a great question. I am incredibly excited about AR as you might know and the critical thing to any Technology including a are, is putting Humanity at the center of it and that is what we focus on everyday. I couldn't be more excited about the opportunities we see in this space. This is where he gets to the important line of his little speech here and sort of stay tuned. And you'll see what we have to offer and sort of stay tuned. And you'll see what we have to offer.
I don't know if that could be. More direct apple is going to release a virtual reality headset. Now, there's still lots of questions surrounding this. When is it going to be released? What is it going to look like, what type of technology is it going to use a report by Mark Germann on Bloomberg? Which is one of the best leakers of Apple news. He's been pretty accurate. He says that apple is going to flood the market with new
products. Later this year, these new products should be somewhere between fall of 2022. And the first half of 2023, the new products will include for iPhone 14 models 38 Apple watch variations several Max with M2 and M3 chips. The company's first mixed reality headset so they're calling it mixed reality low end and high end iPads updated earpod Pro are buds a fresh home pod and an upgraded Apple TV. Sounds like they have a number
of devices in store. Now, Mark also goes into more detail on the mixed reality headset. He says that he's told the latest internal incarnations of the device, run the base M2 Chip along with 16 gigabytes of RAM. That's pretty powerful. That's like a lot of high end laptops having the M2 Chip and 16 gigs of RAM.
They also say that they're already working on the release of the M3 chip, the successor to the M2 again, technically, these are rumors, these are reported from third parties but when Tim Cook himself, is saying just wait and see, see what we have in store. I think he's giving some validation to the fact that they're going to be releasing an
AR headset. And I've said this many times and I know that it upsets people and I say because Facebook's and undervalued stock, lots of value investors have piled Add into it, in many cases, it's their biggest holding. But again, if I have to choose between Facebook, say R VR headset and apples, which one I think will be the most successful. I much rather bet on Apple's Hardware Division and their developer base. I think in both cases, apples ecosystem, their developer base.
And their Hardware team is far superior to Facebook's. So, when I look at the two options, I think that apple is going to run away with this category. That's my prediction. I think they'll make Facebook become a small player. If Apple does eventually introduced their own VR headset. Now, that doesn't mean that Facebook's not a goodbye, it can still be a good investment but if I'm talking specifically about these two companies competing an AR and VR, I will bet on Apple every day of the
week. Now, that's all for. Now, I hope you enjoyed the show and I'll have more content out later this week. So if you haven't already subscribe to the channel and we'll have another update out this week.