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Why do smart companies do dumb things? · The Financial Exchange Show

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Speaker 2: Second hour of the Financial Exchange kicking off Chuck, Mike
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Speaker 2: a dollar seventy announced to twenty six seventy four and
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Speaker 2: ten cents piece in Bloomberg. Why smart companies do dumb things?
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Speaker 2: And the answer is, look even at least, this is
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Speaker 2: my answer, companies that are actually like pushing the edge
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Speaker 2: on things, whether it's you know, Netflix or Google or
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Speaker 2: Amazon or Microsoft, whoever they are at and t pushing
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Speaker 2: the edge. Smart companies everyone does dumb things. My answers
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Speaker 2: they're led by humans, is why smart companies do dumb things.
2:46
Speaker 2: But even smart ones. Here's the thing, in order to
2:49
Speaker 2: maintain any kind of market leadership, you gotta be pushing
2:53
Speaker 2: otherwise you end up becoming a dumb company. And then
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Speaker 2: you are doing lots of dumb things, and so, you know,
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Speaker 2: the process of just trying new things out, some of
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Speaker 2: it inevitably is not going to work and will be
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Speaker 2: bad decisions. And the good companies pivot quickly from those
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Speaker 2: bad decisions. They realize, hey, this is not a place
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Speaker 2: we should be investing time and money, and they go
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Speaker 2: and try other things and hopefully find new better ways
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Speaker 2: of doing it.
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Speaker 3: Yeah, I think that's my answer to is if if
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Speaker 3: you as a leader of a company, haven't done something
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Speaker 3: that you look back at and say, wow, that was dumb,
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Speaker 3: we shouldn't have done that, then you're probably not you're
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Speaker 3: inviting and changing it.
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Speaker 2: You're either lying to yourself or you just haveing been
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Speaker 2: de leading the company very long.
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Speaker 3: You're not pushing the envelope on certain things, and you're
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Speaker 3: not trying to build the entire I feel like a
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Speaker 3: massive piece of the American success story in American ingenuity
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Speaker 3: is the frank idea that we are pretty comfortable with
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Speaker 3: the idea of failure.
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Speaker 2: You have to be the only way.
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Speaker 3: It's not a universal thing, by the way, Like you know,
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Speaker 3: there are many societies where failure is permanent and reflected
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Speaker 3: upon and you never work again. And I think America
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Speaker 3: looks at it very differently. Where if you declare bankruptcy,
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Speaker 3: if you if you go certain through certain types of failures, Yeah,
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Speaker 3: there's certain areas where you might not be able to
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Speaker 3: work again, but it's not seen as this final death
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Speaker 3: of your future.
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Speaker 2: No, And I think ultimately, remember every company makes bad
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Speaker 2: decisions at some point, Like it's it's just the nature
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Speaker 2: of the beast. And the two keys are a have
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Speaker 2: you built yourself, you know enough of a financial position
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Speaker 2: to be able to get yourself out of it before
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Speaker 2: you run into problems, depending on how big of the
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Speaker 2: you know big the problem is that you're dealing with,
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Speaker 2: and how quickly do you pivot away from bad ideas?
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Speaker 2: You mentioned at and T when we you know, jokingly
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Speaker 2: at and T's problem is what isn't was twofold? The
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Speaker 2: first is they made bad bets, yep. The second was
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Speaker 2: they didn't cut those bets quickly enough. And you can
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Speaker 2: even make a case third one they kept doubling down
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Speaker 2: on them.
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Speaker 3: I blame and when I look at those situations like
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Speaker 3: let's just look at the double piece there, bad bet
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Speaker 3: and didn't walk away from it soon enough.
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Speaker 2: Yep.
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Speaker 3: I blame them more for the second part than the
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Speaker 3: first one. Yes, is there a universe, a parallel universe
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Speaker 3: where them acquiring DirecTV was a good idea? Sure, I
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Speaker 3: hesitate to see it, but like it wasn't the dumbest
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Speaker 3: idea ever. No, it just took them way too long
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Speaker 3: to realize that we don't know how to do this,
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Speaker 3: it doesn't mesh with our business, and we need to
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Speaker 3: walk away.
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Speaker 2: And instead they held onto it and then said well,
5:40
Speaker 2: we just haven't done it enough, so let's go out
5:43
Speaker 2: and buy what is now spun off as Warner Brothers Discovery.
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Speaker 2: And they just compounded the problem by thinking that they
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Speaker 2: didn't realize the problem was the strategy. They thought it
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Speaker 2: was the specific deal, and so they said, well, we
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Speaker 2: got to try this again. Whereas I guarantee you, like
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Speaker 2: I haven't looked through it, but I'm guessing if you
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Speaker 2: looked at Facebooks or now metas companies that they've bought historically, Well,
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Speaker 2: how much money here's an example, how much money has
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Speaker 2: Meta spent on trying to make VR happen? Oh? Yeah,
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Speaker 2: tens of billions. Now they can afford to do it
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Speaker 2: because they basically have always just thrown like money at
6:27
Speaker 2: a bunch of different things, one of which, as an example,
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Speaker 2: happened to be Instagram, which worked out beautifully for them
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Speaker 2: and now makes them billions of dollars. Another one was WhatsApp,
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Speaker 2: which has worked out beautifully for them and makes them
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Speaker 2: billions of dollars. So it's something where look, if you are,
6:46
Speaker 2: you know, constantly innovating and adding other things, even if
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Speaker 2: that innovation is I know, no one looks at Instagram
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Speaker 2: and is like, wow, this is amazing, like innovation, but
6:54
Speaker 2: at the time like it was kind of impressive, you
6:56
Speaker 2: know what it was, And for better for worse, it
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Speaker 2: makes them a ton of money ultimately, if you are,
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Speaker 2: you know, continuing to try to throw darts at the
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Speaker 2: board and say, hey, what's going to hit? Well, if
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Speaker 2: you grow your profits enough, you can still deal with
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Speaker 2: the inevitable failures that come up, and those failures can
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Speaker 2: be bigger without even causing problems for you. You know
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Speaker 2: what I see as a I feel like consistent.
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Speaker 3: Stupid mistake that companies make is trying to be everything
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Speaker 3: to everyone. So I feel like that's oftentimes a source
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Speaker 3: of errors and it's not literally everything to everyone, unless
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Speaker 3: you're Amazon, in which case it might be. But you know,
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Speaker 3: in our own industry of wealth management, right every firm
7:37
Speaker 3: probably has clients that they don't know how to work
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Speaker 3: with and handle, and many of them will just ignore
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Speaker 3: that and take anybody on regardless and results in problems.
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Speaker 3: Many other companies, you know, at and T is a
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Speaker 3: perfect example here. We want to be a network provider,
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Speaker 3: a content deliverer, and frankly, their core competencies didn't really
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Speaker 3: get there. With all of those and so I see
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Speaker 3: that frequently of hey, we're really good at this, and
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Speaker 3: so we're probably just good at everything else too, and
8:07
Speaker 3: that's usually not the case. Amazon seems to be the exception,
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Speaker 3: not the rule here where they might be able to
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Speaker 3: just be everything to everyone. I mean, what business is
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Speaker 3: Amazon not engaged in at this point, like medicine, streaming,
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Speaker 3: home product delivery, data storage for big companies. They are
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Speaker 3: the only company that I can really look at and say, yeah,
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Speaker 3: they have succeeded in being just about everything to everyone.
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Speaker 2: Netflix you mentioned, Look, they've reinvented themselves twice now going
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Speaker 2: on three times. Actually. The first was remember Netflix, the
8:44
Speaker 2: original company mail your DVDs? They mailed you DVDs, you'd
8:48
Speaker 2: mail them back in the whole premise, Do you guys
8:49
Speaker 2: remember it? No, late fees, hold on to it as
8:53
Speaker 2: long as you want. We're not like Blockbusters. That was
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Speaker 2: the company early actually late two thousand's, early twenty tens.
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Speaker 2: Read Hastings says, No, everyone's gonna be streaming in the future.
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Speaker 2: This is what we're gonna being. We're gonna start streaming video.
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Speaker 2: They kicked off the streaming wars, and they were there first,
9:12
Speaker 2: and they made a bunch of money doing so. They
9:15
Speaker 2: actually didn't make much money operating the business. They made
9:17
Speaker 2: a lot of money growing the stock price because the
9:19
Speaker 2: business was largely unprofitable at the time. Actually, about five
9:23
Speaker 2: six years into that, they said, hey, we're tired of
9:26
Speaker 2: just buying everyone else's content. We got to reinvent ourselves again.
9:31
Speaker 2: What are we gonna do our own content? House of Cards,
9:35
Speaker 2: Orange of the New Black, those were like the first
9:36
Speaker 2: ones they came out with, and now they now they
9:38
Speaker 2: have like sixty two hundred new series a week that
9:41
Speaker 2: are all reality shows with beautiful people dating each.
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Speaker 3: Other, which is kind of fascinating because I'm seeing a
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Speaker 3: parallel to AT and T.
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Speaker 2: Here go go for it.
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Speaker 3: We deliver, We deliver content to people's homes and devices.
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Speaker 3: We need to reinvent ourselves and be able to make
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Speaker 3: that content. AT and T horridly failed at it.
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Speaker 2: Netflix.
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Speaker 3: Sure, I don't know why, because they were first of
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Speaker 3: the game, because they had the right people in the
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Speaker 3: right places, succeeded in something that AT and T. Again,
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Speaker 3: it's a parallel, it's not the exact same, but attempted
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Speaker 3: to do as well.
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Speaker 2: The big They've always been creative people. At and t
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Speaker 2: was a bunch of people that for better or for worse,
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Speaker 2: they were really good at logistics. One hundred year old company. Hey,
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Speaker 2: we got to run wire from here to there. Okay,
10:24
Speaker 2: let's figure out how to do it. Not Hey, what
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Speaker 2: makes a hit Netflix? I want to just do one
10:29
Speaker 2: more thing. They're going through this third one right now.
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Speaker 2: They're moving into live programming and video games. They are
10:37
Speaker 2: trying to skate where the puck is going. And it's
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Speaker 2: not say that they're going to be successful at every
10:43
Speaker 2: single thing that they do. I'm sure if we wanted
10:46
Speaker 2: to actually look at, you know, all the stuff Netflix
10:48
Speaker 2: has done, they probably got some flops out there, but
10:53
Speaker 2: everyone does. It doesn't matter whether you're a personal company like.
10:57
Speaker 4: This Christmas slate is a huge test for Netflix and
11:01
Speaker 4: people's confidence in them in terms of live program.
11:03
Speaker 2: You're talking to the NFL games, Yeah.
11:05
Speaker 4: Because they're already getting criticized for the Jake Paul and
11:07
Speaker 4: Mike Tyson thing.
11:08
Speaker 2: Who's the what are the games this Christmas? Do you
11:10
Speaker 2: know who's on there?
11:12
Speaker 4: I think the Chiefs was one of them. But they
11:17
Speaker 4: invested like a lot of money into bringing on pregame
11:20
Speaker 4: personalities like it. They're bringing on the like notable names
11:25
Speaker 4: for that, but yeah yeah Chiefs at Steelers, although that
11:31
Speaker 4: lost some lester because who knows about Patrick Mahomes with
11:33
Speaker 4: his ankle in Joe now ye, but then you got
11:35
Speaker 4: the Ravens and Texans and don't forget for that one
11:38
Speaker 4: that's in Houston.
11:39
Speaker 2: Beyonce is going to be the halftime show. There you go.
11:42
Speaker 2: Let's take a quick break here. When we come back,
11:45
Speaker 2: we've got trivia and then we're talking boeing.
11:50
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13:47
Speaker 2: Peace in Bloomberg Boeing's year of crisis leaves investors wary
13:52
Speaker 2: of beating up stock and hey, it's it's look with
13:57
Speaker 2: with aerospace companies, change is hard, yo, that's the uh,
14:04
Speaker 2: that's that's kind of how it works. These are not
14:07
Speaker 2: companies that you can turn quickly because they are huge,
14:11
Speaker 2: capital intensive with long supply lines that take a long
14:15
Speaker 2: time to make improvements on. But you've got a new
14:19
Speaker 2: CEO that came into the role. What was it in August,
14:23
Speaker 2: I think when Kelly Ortberg took over, I don't know, August, September,
14:27
Speaker 2: somewhere in the last few months. I'm not expecting huge
14:30
Speaker 2: changes next year, just because, quite honestly, if you're a
14:34
Speaker 2: CEO coming into a brand new company, especially a turnaround one,
14:39
Speaker 2: I think you need to take a little bit of
14:40
Speaker 2: time to figure out where your best bang for your
14:43
Speaker 2: buck is going to be. So you probably don't see
14:44
Speaker 2: any major changes for you know, six to nine months.
14:47
Speaker 2: But even then it's Hey, the biggest thing Boeing has
14:51
Speaker 2: to do is prove that they're competent at making airplanes.
14:54
Speaker 2: And if they do that, quite honestly, the rest takes
14:58
Speaker 2: care of itself. Because the problem Boeing faces on the
15:02
Speaker 2: commercial airliner side confidence, Yeah, confidence in the product and all.
15:08
Speaker 3: This is one of those examples where investors are just saying,
15:12
Speaker 3: prove it before we trust you.
15:14
Speaker 2: They don't have to innovate right now, take the next
15:18
Speaker 2: two years and focus on getting all of the quality
15:21
Speaker 2: stuff right. And if you do that, then you've got
15:25
Speaker 2: the runway nah uh huh to be able to innovate
15:30
Speaker 2: a little bit from there. Wow. So yeah, that's uh,
15:35
Speaker 2: that's I think that The thing for Boeing is it's
15:39
Speaker 2: rare that I say this. Don't try to do too
15:42
Speaker 2: much as a company. Just do be the Bill Belichick
15:47
Speaker 2: of CEOs. Do your job, like that's what you need
15:50
Speaker 2: to do. And if Boeing does that, if they get
15:53
Speaker 2: all of their people actually doing their job and even
15:55
Speaker 2: meet like.
15:57
Speaker 3: The baseline of expectations, that's all Boeing needs to do.
16:00
Speaker 3: They don't need to not to cover off the ball, No,
16:01
Speaker 3: they literally just need to like, don't do anything. Steep said,
16:05
Speaker 3: we would deliver this many planes, and we delivered that
16:07
Speaker 3: number of planes.
16:08
Speaker 2: Don't do anything stupid. Restore confidence in your product and
16:14
Speaker 2: the rest will follow. I would say that.
16:19
Speaker 3: I wonder where the actual risks aligned now for Boeing,
16:21
Speaker 3: because the tendency or the push is probably going to
16:25
Speaker 3: be for Boeing to sell off units, and that that
16:30
Speaker 3: is a potential risk. Here is missed execution on Hey,
16:33
Speaker 3: you know, we sold off their own business when you
16:35
Speaker 3: look back ten.
16:36
Speaker 2: Years, I don't know what they have to sell off.
16:39
Speaker 2: I don't know what they have to sell off at
16:41
Speaker 2: this point unless look. The interesting restructuring that that I've
16:45
Speaker 2: talked about is you could potentially get into a few
16:47
Speaker 2: different units where you say, okay, here's our core you know,
16:50
Speaker 2: narrow aisle business, here's our wide body business, and here's
16:53
Speaker 2: our military. But then both the civil sides end up
16:57
Speaker 2: losing the protection of being attached into a company with
17:00
Speaker 2: all those DD contracts and you've got problems there.
17:03
Speaker 3: That's risky business, but it's yeah, I think it would
17:06
Speaker 3: be the space exploration and defense side would be the
17:09
Speaker 3: only area that you could look at a spin and
17:12
Speaker 3: then yeah, I don't know what you're left with a
17:14
Speaker 3: non essential business.
17:15
Speaker 2: I don't know what you can spin on the space
17:16
Speaker 2: exploration side, given that the only time that they launched
17:19
Speaker 2: the thing with a crew, they couldn't bring the crew
17:21
Speaker 2: back with it. Yeah, I hear you.
17:25
Speaker 3: But if you don't, then it's just going to continue
17:27
Speaker 3: to eat up operating costs because I think they're still
17:29
Speaker 3: going to get asked to make stuff.
17:32
Speaker 2: Which it's really too bad when they get asked to
17:34
Speaker 2: make stuff that's supposed to go into space. Piece on
17:37
Speaker 2: automakers here, this just I often say, look that the
17:42
Speaker 2: three worst businesses to run in the world automakers, airlines,
17:47
Speaker 2: and anything that related to fashion, like they are just
17:50
Speaker 2: absolute sucks of capital. And this proves it here because
17:55
Speaker 2: three years ago, the only business people wanted to start
17:59
Speaker 2: We're going to start building evs car makers. We're gonna
18:03
Speaker 2: start an EV maker and we're gonna build it in
18:05
Speaker 2: the US. And now, well, we don't really want to
18:10
Speaker 2: start an EV company. In fact, we're trying to close
18:12
Speaker 2: this one down. And man, it's expensive to build in
18:16
Speaker 2: the US. That battery plant we were talking about.
18:18
Speaker 3: Yeah, let's close that thing up because I don't think
18:20
Speaker 3: it's gonna work out so well.
18:22
Speaker 2: And this is not just US automakers that are dealing
18:24
Speaker 2: with this. We've talked about Stalantis and their uniform you know,
18:28
Speaker 2: myriad problems. I mean Stillantis is you know, like fifty
18:32
Speaker 2: percent of it is European companies that you can't figure
18:35
Speaker 2: out how to make cars. You've got US automakers we've
18:38
Speaker 2: talked about having issues. The only ones that seem to
18:41
Speaker 2: be executing particularly well right now, the Korean car companies
18:45
Speaker 2: seem to be clicking on at a pretty good clip
18:47
Speaker 2: from what I see.
18:48
Speaker 3: Well, it's tough to argue that Chinese car makers aren't
18:51
Speaker 3: doing terribly well. It's just that they're kind of cheating
18:54
Speaker 3: at the entire system. But yeah, aside from tough to
18:56
Speaker 3: say byd is struggling at the moment when they continue
18:58
Speaker 3: to make inroads in every re emerging market country in
19:01
Speaker 3: the world other than maybe India.
19:02
Speaker 2: Well listen, when you get hugely subsidized by the Chinese
19:05
Speaker 2: government who also then works to keep labor costs down
19:07
Speaker 2: through you know, manipulating the exchange rate and things like
19:10
Speaker 2: that easy to execute. What kind of executionists do you
19:13
Speaker 2: have at that point? But yeah, this is why again,
19:18
Speaker 2: being an automaker, it's it's just hard because the profits
19:21
Speaker 2: in the business are so fickle and the level of
19:24
Speaker 2: investment required to do it is so high. Let's take
19:29
Speaker 2: a quick break here. When we come back, we've got
19:31
Speaker 2: the trivia answer right after this.
19:41
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20:07
Speaker 4: Chrivy question today was what is the name of Ralphie's
20:11
Speaker 4: younger brother in a Christmas story?
20:14
Speaker 2: That will be Randy. Randy is the answer today.
20:17
Speaker 4: Mark from Up to Mess is our winner today, taking
20:19
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20:23
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20:30
Speaker 2: Mike, we got a piece here today from Barons. It's
20:34
Speaker 2: titled I Think you Can Beat the Stock Market? How
20:37
Speaker 2: to bet on individual stocks and limit risk. What do
20:40
Speaker 2: we see in here, Mike, Well, they talk to a
20:44
Speaker 2: number of people who do invest, bet or gamble.
20:49
Speaker 3: Choose your word how you want to describe it on
20:52
Speaker 3: individual stocks, and I'm sure they all have varying results
20:56
Speaker 3: in their work here, but one of the people interviewed
20:59
Speaker 3: I think has a remarkably reasonable approach to it, which
21:03
Speaker 3: is that she limits her individual stocks at no more
21:06
Speaker 3: than one percent of her investable assets because in her mind,
21:09
Speaker 3: she seems to be acknowledging that she's gambling rather than investing.
21:13
Speaker 3: And I think when it comes to any sort of investing,
21:17
Speaker 3: but let's be honest, buying and selling individual stocks comes
21:20
Speaker 3: with a different type of risk attached to it. Sure,
21:23
Speaker 3: you first step should be asking yourself honestly what am
21:29
Speaker 3: I doing and why. There's a lot of different reasons
21:33
Speaker 3: people buy individual stocks, right, like, sure, I want to
21:36
Speaker 3: own this company. I love the thing, and I want
21:39
Speaker 3: to participate in its upside for life. If I'm going
21:42
Speaker 3: to like, I have a long term vision of owning
21:44
Speaker 3: this company, and I want to support it through owning
21:47
Speaker 3: its shares. Others are saying, I am trying to beat
21:50
Speaker 3: the market, and I'm going to do so by buying
21:53
Speaker 3: and selling individual stocks. Others are saying, man if I
21:56
Speaker 3: had just bought a thousand dollars worth of Nvidia ten
22:01
Speaker 3: years ago, than look how much money I would have,
22:04
Speaker 3: and I want a lottery ticket. I'm not saying any well,
22:10
Speaker 3: I am kind of saying some of those reasons are
22:12
Speaker 3: dumber than others. But depending on your reason for buying
22:15
Speaker 3: those individual stocks, it needs to, you know, affect your strategy.
22:22
Speaker 2: It doesn't specifically the question that you need to ask yourself.
22:27
Speaker 2: That the first one that you need to ask yourself.
22:29
Speaker 2: If you're making the decision to buy them because you
22:31
Speaker 2: think you're going to be able to beat the market,
22:34
Speaker 2: why do you think you're going to be able to
22:36
Speaker 2: beat the market? And that sounds like a really easy question.
22:41
Speaker 2: But if your answer can't be in one or two
22:43
Speaker 2: sentences and clearly show where your edge is, then you
22:49
Speaker 2: don't have an edge, right. And the other part of that,
22:53
Speaker 2: the corollary to it is it's easy for anyone in
22:56
Speaker 2: any given year to be right. Yeah, like you, you
23:01
Speaker 2: can be really right in any given year. Go look
23:06
Speaker 2: at Dave Portnoy in twenty twenty one when he told
23:08
Speaker 2: everyone who was a better investor than Warren Buffett? Correct
23:10
Speaker 2: and and then and then go look at Dave Portnoy
23:12
Speaker 2: in twenty twenty two when I think you like store
23:14
Speaker 2: off swore off stock investing and finally got back into
23:17
Speaker 2: it like two years later. Yeah, And I think that
23:20
Speaker 2: this is like actually a great demonstration because anyone can
23:23
Speaker 2: be really good at picking stocks in one given year
23:27
Speaker 2: because it's not it's a good point.
23:29
Speaker 3: It's not basketball, no, right, Like I will never be
23:32
Speaker 3: able to take the court and uh beat anyone I've
23:37
Speaker 3: ever met at basketball other than my three children.
23:39
Speaker 1: Right.
23:39
Speaker 2: If if I put you in a room with Jason Tatum,
23:43
Speaker 2: you're never scoring a point on him in your entire life.
23:46
Speaker 2: If you put me in a room with Warren Buffett,
23:49
Speaker 2: you might beat him two out of every five years
23:51
Speaker 2: at basketball. At basketball. Give a guy Warren Buffett at
23:57
Speaker 2: his prime, in his prime at basketball, but genuinely investing
24:01
Speaker 2: like you know, Heck, you could have a monkey throw
24:04
Speaker 2: a bunch of darts at the board and they might
24:06
Speaker 2: beat Warren Buffett two out of time. Rest. So it's
24:09
Speaker 2: something where understanding. Hey, just because this worked for me once, twice,
24:14
Speaker 2: three times, however many it is, there's a difference between
24:18
Speaker 2: that and what me and being able to generate those
24:21
Speaker 2: returns in the long run, and the biggest problem, quite honestly,
24:24
Speaker 2: and I saw this in twenty twenty two from a
24:27
Speaker 2: number of my friends where I had some friends who
24:31
Speaker 2: back in twenty twenty and twenty twenty one made obscene
24:35
Speaker 2: amounts of money sure trading really dumb stuff too, like
24:39
Speaker 2: all kinds of cryptomeme coins and NFTs and this is
24:43
Speaker 2: like all kinds of weird stuff. They made life changing money.
24:48
Speaker 2: They don't know what to sell. And I know at
24:50
Speaker 2: least a couple of them, one in particular, who not
24:54
Speaker 2: only did he end up losing it all, but did
24:57
Speaker 2: so in a way that basically he screwed himself on
25:01
Speaker 2: his taxes to the point where he now has like
25:03
Speaker 2: a five figure tax into the irs because he can't
25:07
Speaker 2: he still can't pay all the capital gains taxes he
25:09
Speaker 2: accumulated during that time. And again it's something that pains
25:15
Speaker 2: me seeing this because you see people effectively go to
25:19
Speaker 2: the casino and not know when to leave the casino
25:21
Speaker 2: because they've they've already won.
25:24
Speaker 3: Well, that is the that's and that's in like a
25:27
Speaker 3: good situation. Yeah, that's a very tricky part about stocks.
25:31
Speaker 2: You have to be right twice. Right.
25:33
Speaker 3: You have to you have to be right about when
25:34
Speaker 3: is a good time to buy something and then also
25:38
Speaker 3: identify an appropriate time to sell it. Yeah, that's really tricky.
25:42
Speaker 3: That is really really tricky if your goal is to
25:45
Speaker 3: beat the market. Now, like I said, there are other
25:47
Speaker 3: people who don't invest for those reasons. There are other
25:49
Speaker 3: people who are basically saying, look, this is a lottery ticket,
25:53
Speaker 3: and if you're going to acknowledge that, then just treat
25:56
Speaker 3: it the same way you might with a lottery. If
25:58
Speaker 3: you wouldn't put fifty percent of your investment net worth
26:01
Speaker 3: on powerball, then don't do it there either. Is I
26:05
Speaker 3: think some pretty sound strategy. Yeah, YOLO is not sustainable.
26:12
Speaker 3: You see us being a bit cynical here, but everyone
26:16
Speaker 3: here knows people who have fallen susceptible to this, and
26:20
Speaker 3: individual stocks can be a part of a well balanced portfolio.
26:25
Speaker 3: It's not that they never have their place. It is
26:28
Speaker 3: merely that they are very commonly misunderstood and misused when
26:33
Speaker 3: it comes to an overall strategy. If you are trying
26:36
Speaker 3: to sort out your own investment portfolio and specifically how
26:41
Speaker 3: it's going to work for you down the road, and
26:44
Speaker 3: having a tough time categorizing, Hey, which of these buckets
26:47
Speaker 3: does it fall in? Is it truly an investment for
26:49
Speaker 3: my future? Where I'm trying to beat the market. Is
26:51
Speaker 3: it simply the lottery ticket that I'm hoping to cash
26:53
Speaker 3: in one day? And then how will I deal with
26:56
Speaker 3: the different tax strategies and other things that come with
26:59
Speaker 3: owning individu jewel companies that don't necessarily apply to other
27:02
Speaker 3: areas of the market. If you can't answer some of
27:04
Speaker 3: those questions that we brought up about investing, then please
27:08
Speaker 3: give the folks at Armstrong Advisory Group a call. We
27:11
Speaker 3: work with our clients day in and day out to
27:13
Speaker 3: develop financial plans and investment portfolios that are tailored to
27:17
Speaker 3: suit their needs. If you have questions along those lines
27:21
Speaker 3: and could use one of those consultations, please call the
27:24
Speaker 3: Armstrong Advisor Group at eight hundred three nine three for
27:27
Speaker 3: zero zero one. We have real, live human beings standing
27:30
Speaker 3: by to talk to you about what it means to
27:32
Speaker 3: work with Armstrong. That number again is eight hundred three
27:36
Speaker 3: nine three for zero zero one.
27:38
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:41
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:43
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:46
Speaker 1: your own financial tax into state planning advisors before making
27:49
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
27:52
Speaker 1: advisory services.
27:54
Speaker 2: Seems like we see pieces like this upcoming one every
27:58
Speaker 2: I don't know ten to fifteen years titled Amazon and
28:00
Speaker 2: the Endangered Future of the Middle Manager. And basically what
28:04
Speaker 2: happens is companies get to a certain size and they
28:07
Speaker 2: start struggling to figure out how to meet their goals,
28:11
Speaker 2: and they say, hey, the best thing that we can
28:13
Speaker 2: do now is cut out some managers. They do that,
28:17
Speaker 2: they have some initial success, and then a few years
28:20
Speaker 2: later they say, you know what, we're not hitting our
28:22
Speaker 2: goals right now. We need better managers. And then they
28:25
Speaker 2: kind of go through this whole cycle and it takes
28:28
Speaker 2: about ten to fifteen years to play out.
28:30
Speaker 3: Yeah, and nobody has found the perfect equilibrium on all this.
28:35
Speaker 2: This is called being human.
28:37
Speaker 3: It's what happens cyclically is, Yeah, you go and fire
28:40
Speaker 3: a bunch of people that have really good institutional knowledge
28:42
Speaker 3: about your business. You realize that you fired some of
28:44
Speaker 3: the wrong people at the wrong time and don't have
28:47
Speaker 3: that same institutional knowledge.
28:48
Speaker 2: You make a couple of mistakes here.
28:49
Speaker 3: And there because of that lack of institutional knowledge, and
28:53
Speaker 3: then realize, yeah, all of our leftover managers are way
28:56
Speaker 3: too busy can't focus on the long term strategy, so
28:59
Speaker 3: we need more of them.
29:00
Speaker 2: So that's what Amazon's going through right now.
29:02
Speaker 3: And they are on the fewer managers trajectory at the
29:06
Speaker 3: moment according to reports, and they're saying they may cut
29:09
Speaker 3: up to fourteen thousand manager positions. How many managers do
29:14
Speaker 3: we guess Amazon probably has across their business because they
29:17
Speaker 3: are now up there with Walmart in terms of the
29:20
Speaker 3: largest employers in the world.
29:22
Speaker 2: So I'm guessing twice that number. How many total employees
29:29
Speaker 2: do they have? Well, are we talked here? There are
29:31
Speaker 2: managers and warehouses, so I'm including that. If you're including that,
29:35
Speaker 2: maybe five six times, may like maybe seventy five thousand total.
29:38
Speaker 4: Right, So I'm seeing at the end of the second quarter,
29:41
Speaker 4: Amazon had about one hundred and five thousand managers globally.
29:45
Speaker 2: There you go, Yeah, thank you, Tucker.
29:46
Speaker 1: There was Walkell.
29:47
Speaker 2: Yeah, hopefully it's right. Was that generated by AI, because
29:50
Speaker 2: if it was, it was.
29:51
Speaker 4: A business insider, so generated by al pretty much.
29:57
Speaker 2: Let's take a quick break here when we come back
29:59
Speaker 2: with you Stack Roulette.
30:00
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30:24
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30:40
Speaker 2: Mike, what do you got for stack Roulett cruise lines? Uh?
30:44
Speaker 3: Basking in holiday cheer as people are spending again, and
30:49
Speaker 3: I think using a lot of their pent up cash
30:52
Speaker 3: as well as pent up credits on holiday cruise season.
30:56
Speaker 2: And I've been pondering this.
30:59
Speaker 3: I think we are the worst people to talk about
31:01
Speaker 3: cruises because if I recall, Chuck, you've never been on
31:03
Speaker 3: a cruise. No, Tucker, you've been on one cruise.
31:07
Speaker 4: No, I've been on zero cruises. And my kid actually
31:09
Speaker 4: the other day saw a cruise commercial.
31:11
Speaker 1: He's like, Oh, that looks fine.
31:12
Speaker 4: I was like, well, too bad, You're never gonna go one.
31:14
Speaker 2: No, it doesn't look fun throwing up.
31:17
Speaker 3: So I have figured out what I actually don't want
31:21
Speaker 3: to do about cruise because I hear you, but I'm
31:23
Speaker 3: not actually all that worried about that. I think generally
31:26
Speaker 3: I'm probably just as likely to get sick on another
31:28
Speaker 3: vacation as I am on a.
31:30
Speaker 2: Cruise ship, would be as likely to be stuck. True
31:33
Speaker 2: when you're regardless.
31:35
Speaker 3: I think what I finally figured out about what it
31:38
Speaker 3: just freaks me out about cruises is I genuinely feel
31:45
Speaker 3: uncomfortable when I am very easily identified as a tourist,
31:49
Speaker 3: and nothing is more easy to identity, just like walking
31:53
Speaker 3: off into a place and like immediately being looked at like, oh,
31:57
Speaker 3: that guy's a tourist. I'm gonna pray upon that person.
31:59
Speaker 3: I hate that feeling, yeah, genuinely, And I feel that
32:02
Speaker 3: that's what you probably get anywhere that you get off
32:05
Speaker 3: a cruise ship, anywhere you go in the world.
32:08
Speaker 2: I don't really bother. I don't want that kind of
32:10
Speaker 2: cruise if I were to do one, I just want
32:13
Speaker 2: to go from Boston to Lisbon and just see for
32:19
Speaker 2: seven days.
32:19
Speaker 3: Yeah, I mean that's the type of escapism travel that
32:22
Speaker 3: I can get. Behind all tourists on the boat. I'm
32:25
Speaker 3: gonna disconnect. I'm going to uh, you know, I'm not
32:29
Speaker 3: going to be stressed. I'm just going to be ultimate
32:33
Speaker 3: luxury no, no, cultural experience is nothing type of trip
32:38
Speaker 3: that I can understand that. But yeah, the the trip
32:42
Speaker 3: where you're stopping off at five different ports of call
32:45
Speaker 3: with different tours pre arranged just sounds like kind of
32:48
Speaker 3: a nightmare to me.
32:49
Speaker 2: Honestly, doesn't sound relaxing to me. There are different people.
32:53
Speaker 2: There are people who absolutely love cruises, and they're listening
32:56
Speaker 2: to us right now. They're like, yeah, those guys are idiots.
32:58
Speaker 2: Will find it's more for you, like Mike and I
32:59
Speaker 2: aren't going to oh like, that's okay. You guys can
33:01
Speaker 2: have it more space for you. And there's plenty stuff
33:03
Speaker 2: that Mike can I do where you're like, oh, like
33:05
Speaker 2: that sounds awful, And that's fine too. The world's big
33:07
Speaker 2: enough that we can all like different things. True. But
33:11
Speaker 2: the other thing, if I were to ever do a cruise,
33:13
Speaker 2: I want to do it with like sixty two of
33:16
Speaker 2: my closest friends. I don't want to go on a
33:20
Speaker 2: cruise to be like scrounging the befets. I got enough friends.
33:25
Speaker 2: I just want to bring them with me. I don't
33:28
Speaker 2: need to go on the cruise to be like, oh
33:30
Speaker 2: like I met my cruising friends, Like I'm not gonna
33:33
Speaker 2: have enough time to hang out with you. I don't
33:34
Speaker 2: have enough time to see my friends as it is
33:36
Speaker 2: right now.
33:37
Speaker 3: That said, I do kind of get the appeal of that,
33:38
Speaker 3: again for a retiree who's yeah, totally.
33:44
Speaker 2: The worst part about travel over the last decade that
33:47
Speaker 2: has changed in my view social media.
33:50
Speaker 3: Social media has to the point where so much travel
33:56
Speaker 3: is now predicated on this social media trend that I
33:59
Speaker 3: saw in TikTok. I have to get this picture in
34:01
Speaker 3: front of this statue at this time of day with
34:05
Speaker 3: things like what's the place in.
34:07
Speaker 2: The White Mountains with the the person the leak.
34:11
Speaker 3: And you saw the pictures of people just like you know,
34:14
Speaker 3: there's a line of people two hours long to take
34:16
Speaker 3: a picture on top of this mountain.
34:18
Speaker 2: What's the one in New York City where the Empire State.
34:20
Speaker 3: Building, the Liberty the sun aligns right down like seventh
34:24
Speaker 3: ave or whatever it is, and everyone gets the the
34:28
Speaker 3: New York City Stonehenge, Stonehead, New York City Stonehenge. Yeah, again,
34:32
Speaker 3: just tens of thousands of people lining up on the
34:34
Speaker 3: same bridge to get the same picture. I don't get
34:38
Speaker 3: that trend, and it is I guess it's nice that
34:42
Speaker 3: you can just predict where all the tourists will be
34:43
Speaker 3: and avoid those spots. But rather frustrating that everyone wants
34:47
Speaker 3: the same dumb picture of themselves in front of the
34:49
Speaker 3: same dumb.
34:50
Speaker 2: Thing with you. And you know what the worst part is,
34:53
Speaker 2: none of it's for your own consumption. Yeah, it's all
34:56
Speaker 2: about the social media status. I see people at sporting
34:59
Speaker 2: events and they're taking all these pictures of this and that,
35:02
Speaker 2: and oh like, look at do you ever actually look
35:07
Speaker 2: at your own pictures? Are you just putting them up
35:08
Speaker 2: on Instagram? No?
35:10
Speaker 4: You just post and never look at it, probably.
35:13
Speaker 2: You know, and and and look, I know that the
35:16
Speaker 2: genie's out of the bottle on this like it is
35:18
Speaker 2: what it is. But man, I watched it. Either of
35:22
Speaker 2: you guys know, uh, you guys are probably in the target.
35:25
Speaker 2: You guys remember the band MGMT from the early two thousands,
35:29
Speaker 2: Electric Feel, Yeah, kids, So I saw a video of
35:33
Speaker 2: they went to I think Wesleyan some like some like
35:37
Speaker 2: New New England Liberal Arts College, and I saw a
35:40
Speaker 2: video of the first concert they ever played there, which
35:43
Speaker 2: was in front of like eight people in two thousand
35:45
Speaker 2: and five or six. There's not one cell phone anywhere
35:51
Speaker 2: in this entire thing, and you just get this longing
35:54
Speaker 2: for it because it's just a bunch of people hanging
35:56
Speaker 2: out doing their thing without thinking, Hey, how can I
36:00
Speaker 2: make this look cool for other people?
36:02
Speaker 3: They do comedy shows where you're required to lock your
36:04
Speaker 3: phone in like a lock box. Maybe maybe that's the
36:07
Speaker 3: next thing that's gonna hit concert venues.
36:09
Speaker 2: It's kind of fun. I think the only place where
36:11
Speaker 2: you should be allowed to look at your phones at home.
36:16
Speaker 2: Impractical advice from Chuck on on a Monday. It's kind
36:20
Speaker 2: of way I've gotten to at this point, Like you
36:22
Speaker 2: can't do it safely while driving. It totally distracts from
36:26
Speaker 2: anything you're actually experiencing. That's cool, it's annoying as heck,
36:30
Speaker 2: if you're you know, out just like walking around, bumping
36:33
Speaker 2: into street lights and stuff like that.
36:36
Speaker 3: You know it's gonna actually maybe help us on the
36:39
Speaker 3: social media stupidity travel thing. I can make an AI
36:43
Speaker 3: image today of me in front of Mount Fuji. You
36:46
Speaker 3: just got a photo no one in the general. Yeah,
36:49
Speaker 3: but I don't know how to photoshop, but AI. You
36:51
Speaker 3: know how to AI either, But AI does, And so
36:54
Speaker 3: we're probably only a year away from anybody that wants
36:57
Speaker 3: a you know, stupid picture of Mount Fuji that they
36:59
Speaker 3: could post to their Instagram being able to be created
37:02
Speaker 3: in like sixty seconds and the average person not being
37:05
Speaker 3: able to tell the difference. So that'll be uh yeah,
37:08
Speaker 3: that might actually kill all of this stupid social media
37:12
Speaker 3: fuel to travel. All right, So I just asked. I
37:15
Speaker 3: was asking me to describe Mike Armstrong's physical appearances. Short, short,
37:19
Speaker 3: brown hair, hockey player, that bad hockey player, not hockey hair.
37:26
Speaker 2: Not good, not good? Well I had to go quickly. Yeah. Okay,
37:32
Speaker 2: So chat GPT, or rather Dolly from Chat GPT is
37:35
Speaker 2: now making you in front of Mount Fuji, which I
37:37
Speaker 2: also spelled wrong. I spelled Fugi for some reason. I
37:41
Speaker 2: don't know why. Oh this is pretty good.
37:43
Speaker 4: Actually right, yeah, but how they have a picture?
37:46
Speaker 2: No, this is it. It's not actually Mike.
37:49
Speaker 3: But I so imagine for a moment that I might
37:51
Speaker 3: be able to actually upload my photo into this, which
37:53
Speaker 3: you can, uh, and this will completely decimate that entire
37:57
Speaker 3: stupid trend of Instagram.
37:59
Speaker 2: One other thing, here's one thing I've realized about all
38:02
Speaker 2: AI generators for images. They only make beautiful people. It
38:06
Speaker 2: can't make me correct, it can't make me. It only
38:09
Speaker 2: makes this guy's got perfect hair. Is that just you
38:12
Speaker 2: calling me perfect looking? Look at that jawline. No, because
38:15
Speaker 2: it didn't make you either. Let's take a quick break
38:18
Speaker 2: for the rest of the sun. Is pretty good, Chuck,
38:21
Speaker 2: pretty good, and uh yeah, we'll see you tomorrow on
38:23
Speaker 2: the Financial Exchange