Welcome back everyone. Today on the Joseph Carlson Show, Barons releases their list of their ten favorite stocks for 2024. I'll be going over each one of these stocks, their thesis, and giving a quick review. Apple, shockingly, has pulled their Apple Watches from the market. They're not selling them anymore because of a patent dispute. This has caused the company stock price to go down 1.2% on a Green Day.
We're going to be looking at this news and how it impacts Apple. The CEO of Costco went on for an interview. He gave insights into why Costco is doing so well. What they have is their core values as a company and what he sees in terms of future growth for this company with the new CEO. So we're going to be taking a look at this interview and then we have some news from the regulatory environment. The Adobe and Figma merger has been called off $20 billion.
Acquisition is ending because of regulatory scrutiny. This environment has become more difficult for big acquisitions like this. So we're going to be looking at how this effects Adobe and other companies. And then in the headline news we have the former Nicholas CEO, Trevor Milton. Remember him? The guy that pretended his truck was driving along the road when really it was rolling down a hill? Well, he is now facing sentencing for his conviction of
misleading investors. We're going to be looking at what they're trying to seek in terms of sentencing and how this will likely play out. So we have a lot to get to. Let's go ahead and start off with a quick portfolio update. This is my passive income portfolio. It's my personal investment account that I share publicly every single week. So you go to see transparently how this does on a week by week basis.
If I make money, if I lose money and each individual stock as well, I show the results of every single stock I invest in and I run a very concentrated portfolio with only eleven position. I'm buying compounding machines, Companies that are incredibly powerful with their Moat and the industries that they're in, they have pricing power. They can raise prices above the rate of inflation every single year. So these are economically powerful, highly free cash flow, positive, fast growing
companies. Now I'm doing something a bit different than what Barons is doing. I hold these companies for a multi year basis. In fact, as of today my average holding period for My Portfolio is 30 months. 30 months is a decent amount of time. For the history of this portfolio, 30 months is 3 times as long as the average investor and it's around twice as long as the average mutual fund. So the investment philosophy
here is very simple. I buy highly concentrated positions into high quality companies and I hold them as long as they stay high quality companies, I'll sell them if their fundamentals start to erode. So what I'm doing as an investor is quite a bit different than what Barons is doing. What Barons does is they pick 10 stocks at the beginning of each year that they think will have a particularly good year that year. So every year it's starting with a completely clean slate.
They don't really care about holding companies on a multi year basis. The Barron's 2023 portfolio has so far returned 31% beating out the S&P 5 hundreds, 24.5%. So their strategy has worked well in 2023. In fact, the 31% returns that they have are very similar to mine. I'm right around 31% as well. So historically this strategy has worked for them. Now let's go ahead and take a look at what their logic is behind these selections. First up, they have Alibaba.
It is one of the cheapest tech oriented companies in the world by a long shot. After dropping 18% in 2023, Alibaba's US listed shares are trading for just eight times projected earnings. Now we can check out Alibaba in Qualtrum. This website, by the way, is included as part of the Patreon membership, but we can see that they're correct. It's currently down around 19.4% year to date and the PE ratio is 7.42, super cheap for a company that has this type of growth potential.
This is where investors are concerned about it being a value trap. Keep in mind the Alibaba has been a disaster of a holding for the past five years. On a five year basis it's down 46%. From its highs it's down around 80%. So this company has really crushed value investors looking to buy the discount for a long period of time. They say with that decline, the stock at a recent $72 is back where it stood following its 2014 initial public offering.
Despite A tenfold rise in revenue and a fivefold increase in earnings, its market cap is less than 15% of its closest American pair, which is Amazon.com. Now this is where my view would diverge with Barron's. I agree the company's cheap. I agree that it probably deserves to be worth a bit more, But calling it basically comparable to Amazon I think is a little bit misleading. Amazon's cloud business is much bigger than Alibaba's. Amazon's advertising business is much bigger.
And most importantly, Amazon resides in a country where the government views private enterprise much more favorably. So I understand the investment thesis here, but my biggest concern for Alibaba is where the company's headquartered. Now moving on to their number two pick is a company that I fully agree with and I'm fully invested in. Alphabet could be the best bet amongst the Magnificent 7.
It's expected to grow as fast as Microsoft, with its earnings forecast to be up 15%, and it's three times as quickly as Apple's 5% growth. So Alphabet's expected to grow faster than Microsoft and Apple. Yet its stock trades for just 20 times earnings, a discount to both Microsoft and Apple's 30 times, despite gaining 50% this year. Right now, Alphabet stock is trading lower because of a lot
of potential threats. Investors have been worried about the slowing growth in Alphabet's cloud computing division, the threat that artificial intelligence poses on the search business, and antitrust scrutiny. And this is absolutely true. I agree with their assessment here, but I also agree with their statement here that this looks manageable. I think a lot of these concerns
come and go over the years. When you study the history of companies and you look back, there's almost always something that seems very real and very concerning. And one of the most difficult things with good companies is staying invested in them, not getting scared out of them. As for antitrust issues, they may not go anywhere, and Alphabet might be worth more broken up anyway. Now I think that this looks at one part of this a little bit
favorably. We know the Alphabet just lost a case against Epic, so these antitrust issues are going somewhere. We know that the loss to Epic Games is going to hurt Alphabet's bottom line with their App Store revenue. They're going to have less revenue be transacted through their payment processor. So that's something that's going to gradually eat away at their bottom line. But they're still going to
outgrow that loss in revenue. Google's a company that despite all the headline risk and regulatory risk, I still view it very favorably, Esecially because a company is trading at such a low E ratio and a high free cash flow yield. Even adjusting out their stock based com, the valuation is low and they own some incredibly good assets with their search, cloud and YouTube business. So Alphabet's a company that I agree with Barrons on. Next up we have Barrack's gold.
Gold mining stocks haven't been able to keep up with gold prices, but this year may be the year that changes for Barrick. Gold gold miners are thought of as leverage plays on the metal, yet Barrack's shares are up just 3% this year while gold is up more than 10%. Barrack has several things going for it. The company has some of the world's best mines in spots like Nevada and the Dominican Republic, and it's the top gold producer in Africa.
It aims to boost its unique output, mostly gold and some copper, by 30% by the end of the decade. Barrick Gold seems like an OK bet, but it's not the type of company I'd like in My Portfolio. Even though it trades at a low valuation, I would rate this company as highly unpredictable. We can look at the stock price over the past five years. It's all over the place, bouncing up and down with high amounts of volatility only returning 37% over the last half of a decade.
In the past ten years, it's also only returned 7%, again highlighting the extreme volatility of this company. And if we look at any type of chart of their financial history, you can see the highly cyclical nature of gold companies. They go up and down and I think it's very difficult to predict. In my opinion, I'd rather buy the company that's selling gold bars and making $100 million in revenue in a single quarter. I'd rather just buy Costco. So Barrick Gold for me is one that I'd skip.
And #4 we have Berkshire Hathaway. It's interesting to see that one show up on the list. They see the case for Berkshire starts with the CEO Buffett of what he calls a Fort Knox balance sheet with over $150 billion in cash, or about 20% of the company's market value. Earnings are growing too with Berkshire's after tax operating profits up nearly 20% so far in 2023.
They could also hit $40 billion in operating profits this year powered by high interest income on Berkshire's cash and strong insurance underwriting results, helped by a turn around at GEICO. Berkshire's equity portfolio led by Apple is also having a great year and this is one that I fully agree with. I think that Berkshire is doing great. They are basically indestructible with the amount of cash that they have. Their revenue continues to go up on a steady trend quarter over
quarter, year over year. It's truly remarkable how much cash flow this company produces. Berkshire is a powerhouse company and it's likely still going to outperform the market over the next couple of years. Now #5, we have Bio N Tech. It's a COVID-19 vaccine maker that's been crushed this year. Unlike so many cash burning biotechs, Bio N Tech is expected to remain profitable in 2024 and the company's oncology focused pipeline could prove more promising than some investors
believe. Bio N Tech has oodles of cash, more than 18 billion, that's nearly 3/4 of its current market value and $25 billion. Investors effectively are paying just $7 billion for its COVID franchise and drug pipeline. So that's basically the investment case with this company. The market cap is currently $24 billion. And if we look at their cash and debt, they have almost no debt with $16 billion in cash.
So this company could do a lot with that cash balance, including aggressive buybacks, buying back the shares, raising their earnings per share. Now, I never invest in pharmaceutical companies. Again, I believe they're too volatile. They're not compounders. They have too much regulatory risk. But I think that in that realm, this is a pretty good bet. They have such an incredible balance sheet that it brings a
lot of stability to the company. Number six, we have an oil company with Chevron. Some of the Sheen came off Chevron in 2023, but the company remains one of the best run big energy companies in the world. There's analysts saying that Chevron trades at a 15% discount to its average cash flow multiple and should have a total yield, dividends plus buy back of around 12%. A combined 12% yield is massive. So I can see why this is attracting value investors.
This is another example of the type of investing strategy I don't do. It is true that oil could have some huge run in 2024. I don't doubt that that's a possibility. But even with these cheap valuation metrics, when we look at the overall history of the company, it's down big time in the one year. It's only up 39% over the past five years. In the past decade it's up 21%, not including the dividends.
So this is another company that you cannot count on the compound year after year buying the dip on a volatile company can work and maybe it will in 2024 for barons. But I think overall it's again far too unpredictable. In #7 we have Hertz. Hertz high profile move into electric vehicles has proven a bust, but the stock looks cheap enough to be a winner in 2024. Now they say. To put it simply, Hertz big bet on E VS about 11% of its fleet against an estimated 2% for its rivals went bad.
Repair cost for its Tesla heavy fleet are high and Hertz is getting less than it had projected when the cars are sold due to deep price cuts. Customers aren't keen on the cars either due to charging and range issues, so this isn't a jab at Tesla, but this is just the reality. Hertz did this big partnership with Tesla vehicles and it has not worked out with the business.
As we know, Tesla has done a ton of price cuts throughout the year on their vehicles that's devalued, all the ones that were previously purchased. And then they also have a lot of customers that probably aren't familiar with EVs. They probably have issues with the charging and we know that Teslas do have very expensive repair costs.
OA lot of this stacked U together to be a bad move for Hertz. Now they mentioned that this industry, the rental car industry, is an oligopoly with over 90% of the US market controlled by enterprises Avis and Hertz. And even with cuts in their earnings estimates, Hertz trades at 8.6 times Ford earnings. There's analysts saying that Hertz is overwhelmingly attractive for patient investors. This is a very compelling investment thesis.
This is one I actually like. Now, granted, I'll never invest in car companies. I'm not investing in Tesla, I'm not investing in Ford, I'm not investing in Rivian. I'm not investing in any car company and I'm unlikely to invest in Hertz or any other company that directly deals with them. I think the auto industry has a lot of those traits that I don't like to see in companies. The cyclicality and the unpredictability.
When we take a quick glance at the fundamentals of this company, we can see that the revenue is not growing at a steady clip. It's basically flat. The free cash flows look decent if the graph was flipped upside down, but unfortunately they lose in cash flows every single year and even their balance sheet doesn't look good with a lot of leverage in the business. The only thing that I do find attractive about Hertz is the oligopoly position.
I like companies that are in monopolies, but there are some monopolies that are much better than others. Monopolies in the airlines or in the car rental industry are not monopolies I want to own. So this one for me is a pass. Now this next one is very interesting. They say Madison Square Garden is pick #8. MSG Sports owns two of the most valuable professional teams in their sports the New York Knicks and the Rangers.
According to estimates, the Knicks and Rangers are worth 7.4 billion and 2.4 billion respectively. But the companies current market value is just 4.2 billion plus some 300 million in net debt. It is worth less than half of that. The stock now trades at 173 and it's below where it stood five years ago. So what Barons has done here with their Madison Square Garden pick is called a sum of the parts valuation.
Some of the parts means you break down all the various parts of a company and you independently value each aspect of the company. Then you arrive at a full valuation and compare it with a market cap. If your sum of the parts is worth more than the market cap, you can say then that the company's undervalued. Now I like some of the parts valuations, but I also think there needs to be the caveat that companies aren't some of the parts. They are an entire company.
They are combined with all of their assets. So everything boils down to a couple true metrics, The amount of cash flow the overall company generates, the amount of earnings the overall company generates, and the consistency and growth of those metrics. Now they argue that when you do this sum of the parts valuation, that makes the company too
cheap. Even after factoring in the quote Dolan discount, a reference to the controlling Dolan family, the market is assigning a pretty punitive Dolan discount to these trophy assets. So they're arguing that the reason the company trades at such a cheap valuation is because this one private family owns such a massive portion of the company. They basically control the future. It's not really controlled by the shareholders, but even though it exists as a red flag, the company still may be
undervalued. They say that the company is worth up to $300.00 per share today. He says the company should sell a minority stake in the Knicks and Rangers, buy back a lot of stock, and pay a regular dividend. The ultimate payoff would be a sale of the entire company, and there probably isn't much downside given the discount to the asset value. So they view Madison Square Garden as being deeply undervalued because of this qualitative problem with the
ownership structure. But even after factoring that in, they believe the company's worth $300.00 which is roughly double the price it currently trades at and because of the deep value that it trades at already, they don't believe there's a lot of long term downside. Of course this doesn't meet my characteristics for an investment, but based on the value oriented investments they're doing, I think this is one of the best.
The company does have prized assets that are worth a lot of money and if they found any way to break out that value or sell it off, investors are going to make a lot of money in this company. And #9, we have PepsiCo. I sold PepsiCo late last year and early this year. I really liked the company. I think PepsiCo is a genuine compounder, a great company, a strong franchise of brands, and I think it's going to do well in the long term.
The ozempic effect and flagging investor interest in traditional consumer staples have weighed on PepsiCo stock this year, but the impact of the weight loss drugs on Pepsico's snack food and beverage franchise will likely be minimal. Though named for a soft drink, Pepsi has the best in class snack food franchise in Frito Lay, maker of Doritos, Cheetos
and lay potato chips. Frito Lay generated more than half the company's profits, making Pepsi less dependent on sugary soda than Coca-Cola. They believe the fear of Ozempic's a little bit overblown and the company's going to have a great year next year. And like I mentioned here, PepsiCo is a great company. They say quote Pepsi is one of the most durable businesses in our coverage.
Durable meaning they have a long standing Moat and a great growth path ahead with Pepsi trading at its twenty PE ratio, almost 3% free cash flow yield paying a 3% dividend. I do think that this is a company that might have a decent 2024 and has relatively little downside. I don't own the stock right now, but this is a pick that I can get behind. I like PepsiCo for 2024 and #10.
We have U-Haul Holdings. They say that there are few businesses with a stronger competitive position than U-Haul Holdings, which dominates the Do it yourself moving business with its nationwide fleet of trucks. This is a company that I have not looked into much and I didn't realize their dominance. U Haul's rivals, including Penske and Budget, are a
fraction of its size. It's the ultimate network effect business given its 23,000 locations around the US and Canada and nearly 200,000 rental trucks. The $12 billion company has steadily built a sizable self storage business that now ranks third in the industry and it could be worth 8 billion alone based on comparable companies. I'm a bit surprised to hear that. But when I think about it, almost everybody that I know
that moves does use U-Haul. Those are the ones that I always see and I did not realize how big their self storage business is, but that's incredible that it could be valued alone at $8 billion. I like the fact that the company has a monopoly on the moving business and I like the fact that they're building out this self storage business. Those are two very profitable businesses. So in terms of U-Haul Holdings so far, I like what I see when we look over all 10 picks from Barron's.
I like what they're doing with the strategy that they've outlined. They are buying some of the better picks when it comes to value oriented investing, meaning buying companies that are at low PE ratios, high free cash flow yields. These companies for the most part have been crushed in 2023 and are looking for a good 2024. Now I will say again that this is not my investing strategy. In essence, what Barron's is doing is sacrificing quality and
predictability for valuation. That's a trade off I have decided I'm no longer making. I'm much more in line with Buffett's thinking of it's better to buy a wonderful company at a fair price than a fair company at a wonderful price. As for me, I'm going to continue trying to find those wonderful companies at fair prices. Now moving on, we have to mention Costco yet another time.
I know we've been talking about Costco a lot recently, but the stock is up another 3% today after being up 3% a day ago. It's incredible the run this stock has gone on. It's now getting close to $700.00 per share. Costco's valuation has expanded up to a 42 Ford PE ratio. Costco is now up nearly 50% year to date. This is an incredible run with a huge breakout at the end of the year. Now, I'm not sure the reason that Costco's up over 3% today. Maybe investors are excited
about the special dividend. Maybe it's the Santa Claus Rally, or maybe it's because the CEO went on to CNBC and talked about the company. Let's go ahead and dive into that interview and see if he says anything revealing. The first thing that he's asked about is the culture of Costco and how this company became the most profitable physical retailer and the one that pays their employees the most.
Well, you know, that's been the culture of the company since the day one, the first day that we opened up our first building. And you know, you're only as good as everybody around you. We don't want to turn a lot of employees. People deserve to have good wages and good benefits. And as I said, we're not a margin business. We just want to sell a lot of stuff and that's what we do. I can't explain about everybody else. I can only say that it works for Costco.
That's the way we run our business. That's the way we'll always run our business and it seems to work for us. He defines the incredibly complex and sophisticated and nuanced business model of Costco very clearly as we like to sell a lot of stuff and that's worked out well for us. I think that summarizes the business model really well. Costco does sell a lot of stuff. The next thing Craig mentions is obviously he's not going to be
the CEO for much longer. They have a replacement and he mentions where this replacement came from. In terms of Ron, Ron's been with the company for 40 plus years. He's been in every position in the company. He's ran real estate, he's ran buying, he's ran operations, he's been president the last two years. He will take the company further in the future.
Now he highlights the experience there, which that is great in and of itself, but more importantly to the future of Costco is the culture of the company and the focus on the long term. A lot of companies are way more
focused on the short term. In fact, a lot of companies would hire an outside executive that would be some corporate suit that would come in, look at the financials of Costco and look at all the ways that they could squeeze out more money from the customers that immediately start raising the prices on the membership that immediately start charging more for their merchandise for their services.
They would bump up the earnings in the short term and hit huge earnings per share numbers so that they can get their bonuses
and over their tenure. They'll make a lot of money by hitting short term metrics, hire after five years and go along their way and not have to worry about the long term consequences that they set the company on. That is the worst case scenario for a company like Costco, having someone come in short term, raise prices, bump up profitability, make a lot of money and leave because it sets the company on a different
culture. The fact that Costco is able to hire within people that have been at the company for 40 years and know all of the core values sets them up for long term success. The new CEO knows the business inside and out. He knows that it's a low margin business where everything they do is to offer the most value to the customer, keeping margins low, keeping prices low, keeping
customers satisfied. And that inverse thinking of not focusing on short term quarterly metrics is what leads to a highly profitable company in the long run. OI see Costcos deep bench of talented individuals that have been with the company for a long period of time has a huge advantage of Costco over many other corporations in America now. He's also asked about some of the seemingly random things that Costco sells like their gold bars that they sold $100 million worth.
Where does Costco come up with these ideas? Is it AI? Yeah, I wouldn't use. To go too far on artificial intelligence with us, we just we have creative buyers. Yes, you can see we sold a lot of gold. We've got a great buying group. We always want to make ourselves separate ourselves and be a little bit different from everybody else. That's why you pay a membership and we always turn merchandise. We're always looking for something exciting that we can
create a value for. As you know, at one time we had caskets, we sold all sorts of great crazy things and it seems to work for us. I think he's spot. On here, a lot of people visit Costco every week or every month because they want to see what new crazy things Costco has. And a lot of the merchandise that Costco gets is designed specifically for Costco by their suppliers and manufacturers.
They cultivate these great relationships that are long standing and the manufacturers love creating Costco items. The next thing he mentions is the stock price of the company. You know we. Do well for the company. We're going to continue to reward our shareholders, reward our employees and as you can tell the stock is also appreciated relatively well over the last actually four years. Since then we went public I think in, I want to say 19851986. So we've grown compounded about
1718% a year. So the stock's done well. We continue to generate a lot of cash. We, we don't do a lot with our cash other than open up more Costcos and give it back to our shareholders. So that's the way we run the business and to the extent that if we can reward our shareholders, we will continue to do so. He again talks. About this in a leisurely fashion like this is easy to accomplish. A 17% compound annual growth rate for over 40 years is insanely impressive.
This is one of the best performing companies in the world over the past 40 years. So Costco has a recipe that works. And most importantly, he mentions that they're keeping that recipe. Notice how he says we just open up new warehouses and return the excess cash back to the shareholders. Their predictable use of cash flow going into their core business is what sustains their incredibly high returns over a
long period of time. Costco has one of the most consistently high returns on capital employed of any company I do analysis on. The stock price is up like crazy over the past month, so maybe we'll have a bit of a pullback. I'm sure we will at some point, but this is one that I'm going to hang on to. Moving on. We have some big news about Apple. This is one of my larger holdings and one of my biggest
gainers with $27,000 in gains. Apple is down a little bit today because the company announced that it is no longer selling its Apple Watch. They had a pull the Apple Watch from the market because of a dispute. The Wall Street Journal reports that Apple is halting sales of the smart watch in the coming days as a company prepares to comply with AUS import ban stemming from Federal Trade ruling over blood oxygen sensors on some versions of the device.
The October ruling gave the Biden administration 60 days to review the decision, in which the US International Trade Commission found that Apple violated patents in most new models of the Apple Watch since 2020. That seems a little surprising for a company like Apple. This is one that would carefully inspect every existing patent before they release any device, so I was a little bit surprised to read that they violated patents.
The patent dispute is between Apple and Massimo, and it's been thorny over the past few years. Massimo is well known for its Pulse oximeter. Massimo filed 2 separate cases, one with the US District Court and Central District of California, and a second with the ITC, claiming that Apple infringed on its pulse oximetry tech. This particular import ban is the result of the latter.
I've highlighted many times that the reason I don't invest in pharmaceutical companies is because of the regulatory environment. It's incredibly difficult to bring a new drug to market. It's incredibly risky with the amount of lawsuits or recalls that can happen with pharmaceutical companies. So it makes sense that as Apple ventures into healthcare, they're going to run into these regulatory disputes. I don't believe this is a long term problem for the stock. This seems like a temporary
issue now. We also got some breaking news that Adobe and Figma call off their $20 billion acquisition because of regulatory scrutiny. When I look at this, there's two ways to interpret it. The first one is the view that this deal was overpriced to begin with and Adobe is better off not doing it, instead returning that $20 billion to investors. I think that's one take and I do believe that that's probably better in the short term.
But in my long term view of Adobe, I think it was better that they own Figma. What it does when they own Figma is they both get the extra revenue and the earnings that Figma is generating as a profitable company. But more importantly, they rule out a major competitor. Figma is growing like a weed. The company is taking over design studios and Adobe is having too much trouble
competing with them. So even in the case that it seems like an expensive acquisition, we've known repeatedly throughout history that acquisitions look expensive in the short term. And in many cases they turn out to be wonderful acquisitions. You can look at the case of Instagram or YouTube or many other companies that these big tech companies have paid billions of dollars for.
So I view this overall as a negative for the long term of Adobe. I think they're now set to face a very real competitor with Figma. Now finally, we have Trevor Milton receiving sentencing. Today, a judge sentenced Trevor Milton to four years in prison for defrauding investors in Nikola. Now, right off the bat, my initial reaction without reading any more of this, that seems a bit light. Four years in prison for the level of fraud that he
committed, I was expecting. In fact, my prediction was going to be somewhere in the range of 7 to 8 years. That's what I was expecting. So he got roughly half of what I thought he would get. Now he's 41 years old. He was convicted on several fraud charges. Last year. Witness testified that he lied to ordinary investors about nearly every aspect of Nikola. This is true. He intentionally deceived the investor by lying about nearly every aspect of the company,
Milton said. The company's 0 emission Truck prototype was drivable when it wasn't. He said Nikola was equipped to produce the necessary hydrogen to power the trucks when it wasn't, and he boasted that the company had a long list of sales orders, many to companies that didn't exist. They don't mention it in this little list here, but his most ridiculous con was setting up an entire promo of one of the trucks driving when it really wasn't. So why was he given such a small
sentence? Only four years? For these crimes, sentencing and fraud cases can depend heavily on how much financial loss a defendant caused. In Milton's case, U.S. District Judge Edgardo Ramos was sorting through three very different calculations, as well as philosophical questions about how long is appropriate for first time offenders to spend behind bars. Prosecutors pegged the total loss caused by Milton at more than 660 million, which under federal sentencing guidelines
could mean 60 years in prison. They conceded that 60 years was too long, but pushed for 11 years, akin to what Theronos founder Elizabeth Holm received a year ago for a deception about the blood testing company's technology. In the case of Holmes, I actually thought 11 years was appropriate. I didn't think it was way overboard, putting her in jail for 20 years or 30 years because of what she did. But it also wasn't a slap on the hand where it's two or three years plus you get off early
with good behavior. So 11 years seemed fair for Elizabeth Holmes. Four years for Milton so far does not seem fair. So the prosecutors pegged the total loss by Milton at over $600 million. But the probation officials estimated that Milton caused 125 million in losses, substantially less by the probation officials, the amount Nicola paid to settle an investigation by the Security and Exchange Commission while neither confirming nor denying
wrongdoing. That still translates under the sentencing guidelines, to 17 1/2 years, though they also recommended 11 years. So the prosecutors and the probation officials both recommended 11 year sentencing and in either case the guidelines were much more so. This is way below the recommended amount. Milton's lawyers, in keeping with their go big spirit of their client, said $0.00 was a more reasonable number and asked the judge for no prison time at all.
I think Milton's defense team, his lawyers should be ashamed of themselves. Do they have no integrity whatsoever? I realize that lawyers goals are to protect their clients and Milton does deserve an honest defense. But standing there next to this convicted criminal that intentionally duped investors and saying that he did $0.00 in damage and he deserves no prison time at all. Literally no punishment whatsoever. Not even a slap on the hand for intentionally deceiving investors.
That is shameful from these defense attorneys. The fact that they can stand there and say that with a straight face is ridiculous. The defense attorney said that there is not a shred of evidence from the trial or from Trevor's personal life that he was motivated by spite, nastiness, ill will or cruelty. Trevor Milton built himself a mega mansion worth $32 million. He was getting rich by tricking other people. That is fraud. This is again another ridiculous statement from the defense
attorneys. Trevor Milton may not have been motivated by spite or nastiness or cruelty, but he was certainly motivated by monies, like many criminals are. He was motivated by having an enormous mansion and hundreds of millions of dollars, and he got that money by tricking people. That is called fraud. That is a crime. They are suggesting with a straight face, that he should face no penalty for such behavior.
Now, Milton's lawyers also argued that media coverage for his trial, including the Wall Street Journal podcast series, will punish Trevor for the rest of his life. In that one part, they are accurate. He's received a lot of bad publicity. His name is tarnished. His life is never going to be the same. Everyone that searches his name, all of his children, his family, everyone that knows him will
know him. For a con man, someone that took money from someone else, and that's something that he's not going to be able to repair himself. There's a lot of information to take in with every case, and I think that the judge put honest effort into breaking this down and coming up to an appropriate sentencing. But I agree that this is a bit on the low side. I think he should have got 7 plus years. Sentencing him for four years for this shows that you can try
to calm people. You can try to become an overnight billionaire and if you get caught you only spend a few years in jail. And I don't believe that's the message we want to send to others now. That's going to be it for this episode I hope you enjoyed. If you want to see more exclusive content, you can check out the Patreon and the pin comment below. If you want to try out Qualtrum, you can do so with a free trial. It is included with the Patreon membership.
Other than that, I'll see you in the next one.