Latest / The Dutch Investors / #87 | Misunderstood Quality & First Principles | Interview w/ Aria Radnia

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#87 | Misunderstood Quality & First Principles | Interview w/ Aria Radnia · The Dutch Investors

• 0:06
  SPEAKER_00: Cloudflare's at a hundred times sales, snowflakes at a hundred times sales, Shopify's at like 60, 70 times sales, right?
• 0:12
  SPEAKER_00: Like in the middle of like one of the craziest bull markets over the past couple decades.
• 0:16
  SPEAKER_00: And like the money was really easy.
• 0:18
  SPEAKER_00: He's like, Yeah, I bought into GM stock because on a peg ratio basis it's disgustingly cheap.
• 0:23
  SPEAKER_00: And by extension to that, like I gambled on Tesla earnings or whatever and like just held the stock.
• 0:30
  SPEAKER_00: Those shares ended up going down 75% and I held through them.
• 0:35
  SPEAKER_00: Try to challenge your own biases and try to think for yourself.
• 0:39
  SPEAKER_00: Again, easier said than done.
• 1:02
  SPEAKER_01: Maybe before we dive in, what do you do on a weekly basis, Aria?
• 1:07
  SPEAKER_01: You're a pretty busy man.
• 1:09
  SPEAKER_01: You work as fiscal AI, so uh what's going on?
• 1:12
  SPEAKER_00: How are you doing?
• 1:13
  SPEAKER_00: Yeah, well, uh first of all, thank you, thank you for uh getting me on the on the show here.
• 1:16
  SPEAKER_00: I'm excited to see what type of questions you got cooked up for me.
• 1:19
  SPEAKER_00: But uh on a weekly basis, what does uh what does my life look like?
• 1:22
  SPEAKER_00: So at the moment I am still a student.
• 1:25
  SPEAKER_00: I have some like random side projects I've been working on.
• 1:27
  SPEAKER_00: Uh if you guys follow me on Twitter, you know I'm selling toilet paper, which is uh quite comedic.
• 1:31
  SPEAKER_00: But uh yeah, I I do a variety of different things.
• 1:34
  SPEAKER_00: So the main thing that I guess I have going on is school, and then at the same time, uh obviously I'm running the the YouTube page, the Twitter, stuff like that.
• 1:42
  SPEAKER_00: Recently have been trying to kind of venture off a little bit more into short form content.
• 1:46
  SPEAKER_00: So there's uh stuff on that front as well.
• 1:48
  SPEAKER_00: Really trying to kind of make a name out of myself, name for myself, uh, and and you know, put put some investment content out there.
• 1:54
  SPEAKER_00: And so far it's uh resonated pretty well with the people.
• 1:57
  SPEAKER_00: So I think we're doing okay.
• 1:59
  SPEAKER_01: It appears so.
• 2:00
  SPEAKER_01: You told me uh before we uh we started that you worked at Fiscal AI.
• 2:04
  SPEAKER_01: What did you do there?
• 2:05
  SPEAKER_00: Yeah, so I was um I joined January of last year, not the most recent January, the January before that.
• 2:11
  SPEAKER_00: Um, and mostly on like the marketing and and sales side.
• 2:14
  SPEAKER_00: If you guys know Ryan Henderson, you might have interviewed, I think Brett, was it?
• 2:18
  SPEAKER_00: Uh so it's his co-host uh from Chit Chat.
• 2:20
  SPEAKER_00: Yeah, I've had all of them on the show.
• 2:22
  SPEAKER_00: Okay, you have.
• 2:23
  SPEAKER_00: Okay, yeah.
• 2:23
  SPEAKER_00: So I was I was working pretty closely with uh Ryan Henderson, um, just doing some like marketing stuff.
• 2:28
  SPEAKER_00: And uh it was a really great experience.
• 2:30
  SPEAKER_00: Um, you know, I got to learn a lot and like kind of see the internal workings of a company, which I prior to that had not really seen.
• 2:37
  SPEAKER_00: Uh for reference, by the way, I'm 20 years old.
• 2:39
  SPEAKER_00: Uh so uh at the time I was even uh younger, but uh no, it was it was just a very great learning experience, and and I got to meet you know all the founders and stuff like that.
• 2:48
  SPEAKER_00: Fantastic company.
• 2:48
  SPEAKER_00: They're building uh an amazing product, which you know is obviously for anybody who's used this goal, like you can kind of attest to that.
• 2:55
  SPEAKER_00: So yeah.
• 2:57
  SPEAKER_00: What made you decide to uh do something else?
• 3:00
  SPEAKER_00: I went back to school.
• 3:01
  SPEAKER_00: You know, full-time work and university doesn't exactly mix well.
• 3:05
  SPEAKER_00: Yeah, that's that's about it.
• 3:07
  SPEAKER_01: Alright, fair.
• 3:08
  SPEAKER_01: So you told me you live in Canada uh currently.
• 3:11
  SPEAKER_01: You go to school in Canada?
• 3:13
  SPEAKER_01: Yep, yep.
• 3:14
  SPEAKER_01: It's pretty funny.
• 3:15
  SPEAKER_01: I I always do a little bit of background research before jumping in.
• 3:18
  SPEAKER_01: I saw in I think it was your LinkedIn, maybe, that you were writing about being a lifelong learner, which is pretty funny because uh in my background, I have Neil deGrasse Tyson.
• 3:29
  SPEAKER_01: He's one of my uh idols.
• 3:31
  SPEAKER_01: I look up to him.
• 3:32
  SPEAKER_01: The way he just thinks about the world and about life.
• 3:35
  SPEAKER_01: And uh one of his phrases is always be a student of life, be a lifelong learner.
• 3:41
  SPEAKER_01: You describe yourself as being a lifelong learner and being curious.
• 3:45
  SPEAKER_01: What made you decide to jump into the world of investing and start your own socials, uh YouTube and stuff?
• 3:52
  SPEAKER_00: So that's like I guess three questions.
• 3:54
  SPEAKER_00: Um, so on the lifelong learning thing, uh, that's just something that's been like super innate to me since I was, you know, 10 years old, is consistently trying to kind of like learn about literally anything, right?
• 4:05
  SPEAKER_00: Um, whether it would be courses in school or and whatnot, uh, going through high school, like I was getting into like the gym and like fitness and stuff like that, and just trying to learn as much as I can about uh those different topics, down to like you know, like cold showers and the stuff.
• 4:17
  SPEAKER_00: Anyways, that's beyond the scope of today's uh conversation here.
• 4:20
  SPEAKER_00: In terms of how I got into investing, I've told the story before on on other podcasts, but I'll tell it to you again.
• 4:26
  SPEAKER_00: He's like a family friend, we're not blood related, effectively like an older cousin, older brother sort of figure.
• 4:31
  SPEAKER_00: His name's Parsa.
• 4:32
  SPEAKER_00: He actually um started a YouTube channel, although I don't think he's posted recently.
• 4:36
  SPEAKER_00: Um, and so he he kind of got me into investing.
• 4:38
  SPEAKER_00: He's three years older than me, and for uh an entire summer, this must have been like 2021, for an entire summer, we were just like going to the gym together every single morning, and he's kind of like um, you know, telling me a little bit about investing through throughout the morning.
• 4:52
  SPEAKER_00: Keep in mind, by the way, the summer of 2021 is we're in the midst of the bull market, uh, you know, cloud flares at a hundred times sales, snowflakes at a hundred times sales, Shopify's at like 60, 70 times sales, right?
• 5:03
  SPEAKER_00: Like in the middle of like one of the craziest bull markets over the past couple decades, and like the money was really easy.
• 5:09
  SPEAKER_00: He's like, Yeah, I bought into GM stock because on a peg ratio basis it's disgustingly cheap.
• 5:14
  SPEAKER_00: And he was telling me like Peter Lynch's philosophy.
• 5:17
  SPEAKER_00: Maybe Lynch or um what's the what's the uh super value guy?
• 5:22
  SPEAKER_00: Anyways, he's like telling telling me about like maybe it is Graham, right?
• 5:26
  SPEAKER_00: So he was like really deep into uh those guys.
• 5:29
  SPEAKER_00: And yeah, he's like telling me, you know, on a peg ratio basis, this is like a trading at 0.2 times peg, so undervalued, talking talking to me about uh price to buck ratio, right?
• 5:38
  SPEAKER_00: Like all this crazy stuff.
• 5:39
  SPEAKER_00: And so over the uh summer, I kind of get like interested in it and eventually I start investing.
• 5:44
  SPEAKER_00: And I recall my my first ever investment was actually I think 10 shares of AMD, and I sold it eight days later for a 10% profit.
• 5:51
  SPEAKER_00: And I'm like, this is the easiest thing I've ever done.
• 5:53
  SPEAKER_00: I just gotta do that again.
• 5:55
  SPEAKER_00: Biggest mistake because obviously that's not like a repeatable thing.
• 5:58
  SPEAKER_00: So I must have bought it at like 145, sold it at like about 160, call it.
• 6:03
  SPEAKER_00: And from there, I think maybe three or four weeks after I started investing, my portfolio turned red and it stayed red for 18 months.
• 6:11
  SPEAKER_00: So I would and at the time, I was a gambling on a bunch of random stuff.
• 6:15
  SPEAKER_00: So I would like you know the Netflix quarter where they lost subscribers for the first time?
• 6:19
  SPEAKER_00: I gambled on those earnings and I lost 25% in like basically over the span of two days, right?
• 6:24
  SPEAKER_00: So yeah, I I started, you know, a couple thousand dollars, whatever, but I was gambling on everything.
• 6:28
  SPEAKER_00: Uh this is just money I'd saved up like working like a restaurant job, and it was uh it was quite disastrous, but I definitely learned a lot from it, right?
• 6:36
  SPEAKER_00: By extension by extension to that, like I gambled on Tesla earnings or whatever and like just held the stock.
• 6:41
  SPEAKER_00: Those shares ended up going down 75%, and I held through them.
• 6:44
  SPEAKER_00: So like there is takeaways from it, but overall, uh you know, it was blowing up a lot of money at the start.
• 6:51
  SPEAKER_00: Didn't really have a strategy.
• 6:52
  SPEAKER_00: Yeah.
• 6:54
  SPEAKER_01: So it's fair to say you didn't look at the fundamentals back then.
• 6:57
  SPEAKER_01: Absolutely.
• 6:58
  SPEAKER_01: Do you think it was a necessary part of your learning curve?
• 7:02
  SPEAKER_00: Yeah, I mean, if I were to ad advise someone to like get into investing again, I definitely wouldn't tell them to just jump into the deep end and like go figure it out.
• 7:10
  SPEAKER_00: That's what I did, right?
• 7:11
  SPEAKER_00: Like buying Tesla at a hundred times earnings at the time, or like buying AMD, I think also was generally pretty expensive at the time.
• 7:18
  SPEAKER_00: Whatever.
• 7:18
  SPEAKER_00: Zero understanding of like the underlying business, uh, other than like AMD.
• 7:22
  SPEAKER_00: Oh, they do uh computer graphics, right?
• 7:24
  SPEAKER_00: Like that was the extent to which I I uh knew the company, or like oh, Amazon, the e-commerce company, just very simplistic, basic understanding of the business and zero clue into the fundamentals, precisely nothing, like nothing to do with revenue growth or or like uh earnings or margins or how much cash they have on the balance sheets, are they getting charged interest?
• 7:43
  SPEAKER_00: Whatever the case is, like literally zero fundamentals, just buying them based off of pretty much just vibes, like oh, this company looks cool.
• 7:50
  SPEAKER_01: And sometimes it works works out, right?
• 7:52
  SPEAKER_01: But uh yeah, for sure, 10%.
• 7:54
  SPEAKER_01: There you go.
• 7:56
  SPEAKER_01: I mean, if you look back now and just held held the shares, I mean, let's talk about the cost of omission, right?
• 8:02
  SPEAKER_00: Well, to be fair, it did go to$60 before rallying to 240.
• 8:06
  SPEAKER_00: So I'm fair.
• 8:07
  SPEAKER_00: Not sure, not sure I would have held all the way through, but yeah, yeah.
• 8:12
  SPEAKER_01: So what sort of um since you told me you're uh you're a lifelong learner, you like you started at an early age, you made some mistakes.
• 8:22
  SPEAKER_01: What sort of investors or authors, speakers do you like to read or listen to?
• 8:27
  SPEAKER_01: Anyone you look up to or get inspired by?
• 8:30
  SPEAKER_00: Yeah, so coming out of 2022, which was just a complete disaster, I think early 2023 I kind of discovered Terry Smith.
• 8:39
  SPEAKER_00: And the only investing book, I didn't even read the entire thing, but the only investing book that I actually like went through was uh his um Growth to Fallu or something?
• 8:48
  SPEAKER_00: That's yeah, yeah, growth to value, something like that, right?
• 8:51
  SPEAKER_00: So it's maybe 20 pages of actual content about like you know his investing philosophy and stuff like that, but then it's like all of his shareholder read letters.
• 9:00
  SPEAKER_00: Oh, you have it right there.
• 9:01
  SPEAKER_00: Amazing.
• 9:02
  SPEAKER_00: Investing for growth, that's right.
• 9:03
  SPEAKER_01: Investing for growth, yeah.
• 9:04
  SPEAKER_00: Yeah, so I I read maybe just the first 20 pages where it's like talking about general investing principles, not all the shareholder letters, because I I watch his uh shareholder conferences or whatever.
• 9:14
  SPEAKER_00: So yeah, for in the span of like two weeks, I was just like binging Terry Smith content, and I'm like, oh, this is like the holy grail of investing.
• 9:21
  SPEAKER_00: Of course, you should be investing in quality companies.
• 9:24
  SPEAKER_00: Screw the price as long as you hold long enough.
• 9:26
  SPEAKER_00: Hey, look at you know, if you bought Coca-Cola in 1980, you could have bought it at a 300 PE and still outperformed the SP 500.
• 9:34
  SPEAKER_00: Stuff like that, right?
• 9:35
  SPEAKER_00: So um, or uh maybe Estee Lauder is another example in there.
• 9:38
  SPEAKER_00: Some of the tobacco companies, he's like, Yeah, you could have paid a 90 times uh earnings multiple in in 1980 and you would have still outperformed just because of the uh growth, the the compounding growth over the next three decades.
• 9:50
  SPEAKER_00: So then I get interested in like what I would argue is like quality traps.
• 9:55
  SPEAKER_00: So, you know, I was I was buying like SP Global, which uh, you know, great business, great business.
• 10:00
  SPEAKER_00: But at the same time, like the growth relative to the historical valuation that company trades at, not exactly the best bargain, in my opinion, right?
• 10:07
  SPEAKER_00: Um, and and so like I was getting interested in like Estee Lauder and stuff like that, because that was one of his big holdings.
• 10:12
  SPEAKER_00: That's kind of my philosophy for that year.
• 10:14
  SPEAKER_00: Louis Vuitton, uh Hermez, like a bunch of these different companies that like are considered quality, but like trade at rich valuations.
• 10:21
  SPEAKER_00: And then eventually I kind of pivoted to like very tech heavy, so like you know, Amazon and and like Google and stuff like that.
• 10:27
  SPEAKER_00: And then more recently, I would say over the past 12 months or so, I'm still extremely tech heavy, but I'm and I hate the label, but it's like a contrarian sort of style of investing, where it's like you know, like Uber is one of my big positions.
• 10:41
  SPEAKER_00: I would argue it's pretty contrarian.
• 10:42
  SPEAKER_00: Adobe is one of my highest conviction bets that is extremely contrarian and like super battle ground battleground stock.
• 10:49
  SPEAKER_00: Uh Google, I was at like a hundred and fifty-three cost basis on that.
• 10:53
  SPEAKER_00: And I, you know, I was buying that throughout like uh a year and a half, whatever the case is.
• 10:56
  SPEAKER_00: Uh ASML, you could argue, even was a contrarian pick uh to a certain extent, right?
• 11:00
  SPEAKER_00: Like that was flat for what a year and a half, like it was just around that$700 mark.
• 11:05
  SPEAKER_00: I'm talking on the on the USD.
• 11:07
  SPEAKER_00: Um, so generally buy companies that just have like poor narratives, but I deem are extremely high quality, have extremely high durable earnings growth and earnings growth potential as well.
• 11:18
  SPEAKER_00: That's generally what I go for nowadays.
• 11:20
  SPEAKER_00: You know, again, like Adobe, Uber, ASML.
• 11:23
  SPEAKER_00: What else do I have?
• 11:25
  SPEAKER_00: Zeta.
• 11:26
  SPEAKER_00: Yeah, Zeta.
• 11:27
  SPEAKER_00: That one's more of a speculative bet.
• 11:29
  SPEAKER_00: FICO, I would even argue today, right?
• 11:30
  SPEAKER_00: Like it's down 50% from all-time highs.
• 11:33
  SPEAKER_00: It's uncertain, and like people don't know how much more they can raise their pricing power, whatever the case is.
• 11:38
  SPEAKER_00: I will bet the other side of that coin, happily.
• 11:41
  SPEAKER_01: Yeah.
• 11:42
  SPEAKER_01: Yeah.
• 11:43
  SPEAKER_01: Looking at your portfolio, it's I would say it's pretty concentrated.
• 11:46
  SPEAKER_01: Uh I believe it's seven companies.
• 11:48
  SPEAKER_01: You could argue six because Shopify is a tiny position.
• 11:51
  SPEAKER_01: Yeah, it's like one percent.
• 11:53
  SPEAKER_01: Yeah.
• 11:54
  SPEAKER_01: Is that uh a position you're currently analyzing or uh what's a yeah?
• 11:59
  SPEAKER_00: So Shopify, um, again, part of the toilet paper experiment, uh, I was thinking two birds, one stone.
• 12:04
  SPEAKER_00: I would learn the business of Shopify in the process of selling toilet paper online, which by the way, like I highly recommend just sell something online on Shopify.
• 12:13
  SPEAKER_00: It's a dollar, quite literally, the trial is a dollar a month for the first three months.
• 12:17
  SPEAKER_00: You have absolutely nothing to lose.
• 12:18
  SPEAKER_00: Just go like put something up, and uh honestly it'll uh make you kind of like learn and appreciate the business of Shopify as well.
• 12:24
  SPEAKER_00: Um so that that was part of the experiment was to learn the business.
• 12:28
  SPEAKER_00: Yeah, so the main problem I have right now with Shopify is the valuation is a little bit on the richer side.
• 12:33
  SPEAKER_00: I have a thesis where I think Shopify could re-accelerate revenue growth even beyond the current 30% growth rate.
• 12:39
  SPEAKER_00: I think they could probably close the year out like comfortably in the mids uh growth rate range.
• 12:44
  SPEAKER_00: But to answer your question of like what am I doing with it, it's kind of like a watcher position, waiting for it to drop a bit more.
• 12:49
  SPEAKER_00: Um, at the same time, I've consistently had this cash problem uh with my portfolio.
• 12:53
  SPEAKER_00: Basically, any cash that I am able to invest, I invest it right away, regardless of where the market is.
• 12:58
  SPEAKER_00: I can always sort of find some decent opportunity in the market, at least that's the general stance that I've maintained throughout the years.
• 13:05
  SPEAKER_00: And then on the concentration side, that's something that I've always kept.
• 13:08
  SPEAKER_00: Uh, I don't think I've ever had more than 10 holdings in my portfolio.
• 13:11
  SPEAKER_00: I think the most I ever had was nine back in the quality days, you know, I was buying like MSCI and all that crazy stuff.
• 13:17
  SPEAKER_00: Uh, but yeah, for the most part, I've maintained like probably six to eight holdings.
• 13:22
  SPEAKER_00: I I would say six uh yeah, like I think six six holdings probably.
• 13:26
  SPEAKER_01: So yeah, I quite like it.
• 13:30
  SPEAKER_01: I think my portfolio hasn't been over ten companies.
• 13:34
  SPEAKER_01: I think if you invest in individual equities, the more companies you have, the the more difficult it's going to be to track and really get like an edge in a company, right?
• 13:45
  SPEAKER_01: And and the edge is shrinking for all of us.
• 13:48
  SPEAKER_01: I mean the informational edge you could argue is almost gone.
• 13:52
  SPEAKER_01: So I would probably say like a psychological edge, having the patience to to to write through difficult waves and stuff is uh is more important today.
• 14:02
  SPEAKER_01: When um I think you called it a contrarian, I'm not sure how you explained it.
• 14:07
  SPEAKER_01: You your style is more of a contrarian than bad.
• 14:09
  SPEAKER_00: Yeah, I I I think uh I think I've I hate the label, like I really dislike the label because that kind of implies that like you know I'm buying like PayPal or like Pin Duo Duo and like all these other companies, like those are contrarian.
• 14:21
  SPEAKER_00: Um I have a better word then.
• 14:23
  SPEAKER_00: Okay.
• 14:24
  SPEAKER_01: Maybe you buy high-quality misunderstood companies.
• 14:28
  SPEAKER_00: Yeah, yeah, we can you know what I think misunderstood probably labels it better.
• 14:32
  SPEAKER_00: Or um like poor sentiment sort of high-quality companies.
• 14:36
  SPEAKER_00: So I like the clearest case of of something like this, in my opinion, is Adobe right now, where it's like, dude, for the past 30, 40 years, it's been this like quality compounder, like they have infinite pricing power, secular demand, durable growth, 90% gross margins, like just the like pitch perfect business, right?
• 14:53
  SPEAKER_00: Subscription revenues, uh, that's more of a recent thing, but still.
• 14:56
  SPEAKER_00: And so in the span of two, three years, the market has soured so hard on it that it is essentially pricing the business for declines starting next year.
• 15:04
  SPEAKER_00: Right now, it's trading at 10 times EBIT, right?
• 15:07
  SPEAKER_00: That implies that the revenues start to decline as of next year, literally, right?
• 15:11
  SPEAKER_00: Um, and at the moment, they just re-accelerated their revenue growth.
• 15:15
  SPEAKER_00: They went from 10% revenue growth to 12%.
• 15:17
  SPEAKER_00: So I the fundamentals from the valuation and what the sentiment that the market is telling us are like two totally different universes, right?
• 15:26
  SPEAKER_00: You have a company that is accelerating revenue growth and yet it is trading like it's about to decline.
• 15:31
  SPEAKER_00: So clearly, one of these two things needs to budge.
• 15:34
  SPEAKER_00: Either it actually does decline, which you know, I would take the other side of that coin any day.
• 15:38
  SPEAKER_00: Um, and we could dive into reasons for that if you'd like, or yeah, the market's right and it's gonna start declining.
• 15:44
  SPEAKER_01: To play uh devil's advocate here, a company can grow its revenue by selling more or increasing prices, right?
• 15:52
  SPEAKER_01: So it's it's pretty common knowledge that the switching costs in Adobe's business model is quite high.
• 15:58
  SPEAKER_01: Could it be possible that they are squeezing out their current customers to pay more and slowly losing customers and still losing the AI battle?
• 16:10
  SPEAKER_00: Absolutely.
• 16:11
  SPEAKER_00: So one of my biggest gripes with Adobe and and one of my main issues with them is that uh they actually don't give us like any sort of KPIs on on what you just kind of described.
• 16:20
  SPEAKER_00: We have nothing to to uh point us in the direction of what average revenue per user is.
• 16:25
  SPEAKER_00: We have nothing in terms of like, you know, like Monday.com, how they like put out like this percentage of our customers have 10 plus users, or like this percentage of our customers spend more than 50,000 with us.
• 16:34
  SPEAKER_00: None of that exists with Adobe.
• 16:36
  SPEAKER_00: They don't give you user count, they don't give you average account value, they don't give you like they give you no clarity into like, you know, the mixture of price and and uh volume that is causing the revenue growth.
• 16:47
  SPEAKER_00: Like literally none of that.
• 16:48
  SPEAKER_00: The only thing we get is like they break it into segments.
• 16:50
  SPEAKER_00: They're like, okay, these are like business professionals, these are consumers over here, and like that's about it, which is not super helpful.
• 16:56
  SPEAKER_00: Um, so to answer your question, could this be them increasing prices?
• 16:59
  SPEAKER_00: Yeah.
• 17:00
  SPEAKER_00: Uh historically, they've only raised prices at about four or five percent over the past five years.
• 17:05
  SPEAKER_00: I think they've been a lot more aggressive with their pricing power to kind of potentially like balance out the lack of volume growth.
• 17:10
  SPEAKER_00: But I believe, based off of the most recent earnings that they just reported, ARR growth, annual recurring revenue, that ticked down in terms of growth.
• 17:18
  SPEAKER_00: So that went from like 14% down to 10% while revenue growth accelerated.
• 17:22
  SPEAKER_00: What that essentially tells you is there is incremental revenue growth coming to the business that is not subscription based, right?
• 17:30
  SPEAKER_00: So one would assume what is the only sort of revenue growth or the only sort of revenue that Adobe generates that is not subscription based, it's the AI credits, right?
• 17:38
  SPEAKER_00: And they directly called that out.
• 17:40
  SPEAKER_00: They said that uh I think the uh Firefly AI Consumption Group X year over year.
• 17:45
  SPEAKER_00: So we're getting nuggets in terms of like they're able to kind of like successfully pivot the business a little bit towards consumption and and charging for AI credits inside of Photoshop, for example, right?
• 17:55
  SPEAKER_00: Whether it's Firefly or partner models, that's something a lot of people don't know either.
• 17:59
  SPEAKER_00: Is that Adobe has you know Google's models and ChatGPT's models and all these uh 11 labs and all these different uh sort of companies inside of Photoshop and the app ecosystem.
• 18:09
  SPEAKER_00: And so I think that was the first sort of hints that like they're able to kind of drive revenues in in this new age of charging for consumption or charging for AI credits.
• 18:18
  SPEAKER_00: So to go all the way back to your question, um, yes, they could be squeezing like revenue growth uh or squeeze squeezing their customers, but I I think we got the hints that um they're actually not doing that.
• 18:28
  SPEAKER_00: That this new revenue growth is coming from um AI credits.
• 18:32
  SPEAKER_01: Yeah, they might be uh, you know, uh what speaks to Adobe's business model is speaking from experience and my personal philosophy, I look for companies that are either extremely boring or have a ton of optionality.
• 18:47
  SPEAKER_01: And for example, Amazon has a ton of optionality, and I would probably put Adobe in the bucket of optionality.
• 18:54
  SPEAKER_01: They uh they can go into so many different verticals and different ways of monetizing things, and uh so I can definitely see a path of Adobe growing revenue and profits even with AI coming up and losing arguably like some of the easy-to-churn customers that will probably use AI to build whatever they want, but uh most people will probably stick with Adobe.
• 19:18
  SPEAKER_01: I'd like to dig a little deeper into the misunderstood part because I think this is a a part many investors struggle with.
• 19:28
  SPEAKER_01: I mean, there are thousands of companies, uh most, I'd say like 80%, are probably mediocre or low quality.
• 19:36
  SPEAKER_01: We all know like the 1% high-quality companies, Visa, MasterCard, HML, we all know them.
• 19:42
  SPEAKER_01: But how do you determine whether a company like Uber or Adobe or even PayPal for that matter, is misunderstood?
• 19:50
  SPEAKER_01: So, what what makes you think that you're right and the market's wrong?
• 19:55
  SPEAKER_00: The agile question.
• 19:56
  SPEAKER_00: So I think a lot of this, that's actually a great question.
• 19:59
  SPEAKER_00: Um, but I think a lot of this comes down to just like looking at businesses over multiple years.
• 20:03
  SPEAKER_00: Like it's you know, there's no quick for somebody who's trying to get into you know analyzing businesses and and moats and stuff like that, uh this doesn't happen overnight, uh, unfortunately.
• 20:12
  SPEAKER_00: Over time, over analyzing, you know, tons of different companies and like making mistakes and uh whatnot.
• 20:16
  SPEAKER_00: I actually used to be a PayPal investor, I lost a little bit of money on it.
• 20:19
  SPEAKER_00: Um, a lot of people try to use that against me as like, oh, you're only bearish on PayPal because you you lost money on it, you're salty from from two years ago.
• 20:26
  SPEAKER_00: That's absolutely not the case.
• 20:27
  SPEAKER_00: For reference, by the way, I was bearish on PayPal at$70.
• 20:30
  SPEAKER_00: Obviously, we all know where it's at today.
• 20:32
  SPEAKER_00: But to go back to the the question of like how do you go about, yes, everybody knows the 1% great companies, everybody knows like this 80% is mediocre.
• 20:41
  SPEAKER_00: What about these in-between companies?
• 20:42
  SPEAKER_00: How do you determine whether they're quality or not?
• 20:45
  SPEAKER_00: Again, it goes back to uh a lot of analyzing it over time and what I like to call first principles line of thinking.
• 20:51
  SPEAKER_00: This is like the one thing I promote on my YouTube channel of like, if you're gonna get anything out of these videos, I don't care if you want to support the channel and subscribe to the sponsors or whatever the case is, if you're gonna just take away one thing, use a first principles line of thinking.
• 21:03
  SPEAKER_00: And what that kind of entails is instead of saying Tesla robo taxis are coming, it's gonna cost less than Uber's, and Uber's business is done.
• 21:14
  SPEAKER_00: Play through that scenario.
• 21:15
  SPEAKER_00: Don't just tell me it's gonna cost less, it's coming, and and Uber's done, right?
• 21:19
  SPEAKER_00: Play through the scenario of if you're Tesla today, what would it actually take for you to disaggregate Uber, right?
• 21:24
  SPEAKER_00: Well, so Uber operates in 10,000 cities uh across 70 different countries.
• 21:29
  SPEAKER_00: They have an Uber Eats arm, they have an Uber arm, they have like optionality with other stuff, but let's just not even include those, right?
• 21:35
  SPEAKER_00: At the same time, it's an app that works essentially internationally.
• 21:38
  SPEAKER_00: Uh, you click and then within three minutes, a ride arrives.
• 21:41
  SPEAKER_00: It's highly localized in the sense that, like, you know, if I'm in the airport of London, for example, there might be a specific lane in which Ubers can only go and they can't go anywhere else.
• 21:51
  SPEAKER_00: Uh actually, I was in Paris last year, and there's literally what I just described there's like two different lanes, right?
• 21:57
  SPEAKER_00: So there's like a lane for taxis to go, there's a lane for Ubers.
• 22:00
  SPEAKER_00: At the same time, if you go to certain hotels around the world, I'm sure that the Uber actually again in Paris, at the hotel we were staying at, it couldn't go all the way to the front of the uh entrance to the hotel.
• 22:10
  SPEAKER_00: It had to go to the gate.
• 22:12
  SPEAKER_00: It wasn't allowed.
• 22:12
  SPEAKER_00: And so that's a that's a degree of of localization that like it needs to be figured out on an international again, across 10,000 cities, they need to figure that.
• 22:21
  SPEAKER_00: And Uber's done that over the past 15 years.
• 22:23
  SPEAKER_00: At the same time, if you go a little bit deeper, there's like you know, five layers to this.
• 22:27
  SPEAKER_00: There's like regulations and like fleet management costs and stuff like that, the charging, the cleaning, uh, all that stuff, the actual cost of the fleet, uh, the cost of the electricity, like all that stuff, right?
• 22:37
  SPEAKER_00: But the main, main issue with AVs that you would uh eventually arrive at if you're using a first principles line of thinking is uh you would get to the utilization question, which essentially refers to like, okay, the demand for rides in in any given city.
• 22:50
  SPEAKER_00: Let's just take Toronto, for example, right?
• 22:51
  SPEAKER_00: There's at like baseline, there's a thousand rides being requested per hour in Toronto.
• 22:56
  SPEAKER_00: But at three in the morning, there's only a hundred rides being requested.
• 23:00
  SPEAKER_00: At Friday night at 8 p.m.
• 23:02
  SPEAKER_00: when everybody's going to restaurants and clubs and this and that, there's maybe 2,000 rides being requested.
• 23:08
  SPEAKER_00: So if you're Tesla and you're operating independent of Uber, right, you're just operating by yourself, how many cars do you put in the city of Toronto?
• 23:15
  SPEAKER_00: Serious question, right?
• 23:16
  SPEAKER_00: How many cars do you put in the in the city of Toronto?
• 23:18
  SPEAKER_00: Or if you're a Waymo, right?
• 23:19
  SPEAKER_00: You're operating without uh Uber, how many cars do you put?
• 23:21
  SPEAKER_00: Do you put a thousand?
• 23:22
  SPEAKER_00: Well, if you put a thousand, then when there's only a hundred uh rides being requested, you're way under monetized, right?
• 23:28
  SPEAKER_00: Like you are missing out on a huge portion of revenues.
• 23:30
  SPEAKER_00: At the same time, when there's 2,000 uh rides being requested, now you are over-monetized or undermonetized.
• 23:37
  SPEAKER_00: I don't know.
• 23:37
  SPEAKER_00: Um the point is you don't have enough cars to service the demand, right?
• 23:40
  SPEAKER_00: And so Uber ultimately solves that because it would be a hybrid network.
• 23:43
  SPEAKER_00: And so the way they currently run it is that of course drivers can come onto the platform at certain hours and they adjust the pricing based off of supply and demand.
• 23:52
  SPEAKER_00: It's like the biggest example of uh a naturally occurring sort of like supply-demand uh dynamic in the world, right?
• 23:57
  SPEAKER_00: So um to go all the way back to the question, how do you determine if it's a quality business?
• 24:02
  SPEAKER_00: It's through like literally tens of hours of research into the individual business model, and you ultimately arrive at like if there was a competitor to arise, how would they go um to try to like you know compete with this company or like uh disaggregate them?
• 24:17
  SPEAKER_00: If you run through the exact same scenario with PayPal, you would quickly arrive to like, okay, PayPal's charging two, three percent to like merchants and and like users and stuff like that.
• 24:25
  SPEAKER_00: Meanwhile, Apple Pay is free.
• 24:27
  SPEAKER_00: Switching costs are like nothing.
• 24:29
  SPEAKER_00: I think over time this business is going to erode, right?
• 24:32
  SPEAKER_00: So that's you kind of play through the analysis like that.
• 24:35
  SPEAKER_01: So let's talk about that little research and first principle thinking.
• 24:39
  SPEAKER_01: You like to look for quality companies that some of them might be uh what we call misunderstood now.
• 24:44
  SPEAKER_01: Where do we we start?
• 24:46
  SPEAKER_01: Let's assume you don't own Adobe just yet, but you found it on X or whatever, you find it interesting, you've used the product maybe.
• 24:53
  SPEAKER_01: Can you just walk us through your thinking and your process of finding out whether, in this case Adobe, but it could be any company for that matter, could be a good fit to your portfolio?
• 25:04
  SPEAKER_00: You're saying, like uh in the vetting process of trying to find like uh you come across an idea, like I think it's pretty normal.
• 25:10
  SPEAKER_00: Everybody comes across it on Twitter or Substack or whatever.
• 25:13
  SPEAKER_00: What's the process of me liking the business?
• 25:15
  SPEAKER_00: Yeah, so I think with like almost all my companies, and when I initially come across it, like I'm not like a hater per se, but like a uh skeptic in like for example, even Adobe, right?
• 25:26
  SPEAKER_00: Like there's public videos of me from a year and a half ago, two years ago, where I'm like, eh, I don't I don't know about this image generation stuff.
• 25:31
  SPEAKER_00: Like it looks pretty serious.
• 25:33
  SPEAKER_00: Um, and so like you know, I might follow a company for a very, very long time.
• 25:36
  SPEAKER_00: Def Cantasaria, going back to one of the questions you asked earlier of like who are your investment um heroes and stuff like that, I think Dev Cantasaria is is a massive one.
• 25:44
  SPEAKER_00: Uh Chris Hone, I'll just throw his name out there.
• 25:46
  SPEAKER_00: He's uh also another one.
• 25:47
  SPEAKER_00: But Dev in in uh podcast, I think on the business breakdowns podcast uh for FICO, he was talking about how like he might follow a company for like eight years before he ends up uh initiating a position.
• 25:57
  SPEAKER_00: And I found that so admirable that like you might like a company for many, many years.
• 26:02
  SPEAKER_00: You might do like, you know, a hundred hours of research into it, but you know, you're not gonna pull the trigger because maybe the valuation isn't right, maybe uh a certain development hasn't happened, you don't like the moat yet, it's a little bit unproven, whatever.
• 26:13
  SPEAKER_00: The point I'm trying to make with that is there's so many ideas that come in.
• 26:17
  SPEAKER_00: Like Mercado Libre is is one of them right now that I have no interest in owning.
• 26:21
  SPEAKER_00: I acknowledge the fundamentals are disgusting.
• 26:23
  SPEAKER_00: It's the only company on Earth to grow revenues at 30% for 28 quarters.
• 26:28
  SPEAKER_00: There's 60,000 public companies on Earth.
• 26:30
  SPEAKER_00: That that's the only one, right?
• 26:31
  SPEAKER_00: Like it's it's a unicorn at the same time.
• 26:34
  SPEAKER_00: Optionality gets ticked off seam.
• 26:35
  SPEAKER_00: I don't know.
• 26:36
  SPEAKER_00: Have you looked into Mercado Libre?
• 26:38
  SPEAKER_01: It's on my list to to look into, but um, I haven't I don't own it and I haven't analyzed it properly yet.
• 26:45
  SPEAKER_01: So I don't really have a like a good opinion about it.
• 26:48
  SPEAKER_00: Yeah, yeah.
• 26:49
  SPEAKER_00: So I'm kind of in a similar boat as you.
• 26:51
  SPEAKER_00: Like I've looked at the fundamentals, briefly looked at the moat and and uh you know the business and stuff like that.
• 26:56
  SPEAKER_00: Like I like what I see.
• 26:57
  SPEAKER_00: Yeah, it looks great.
• 26:58
  SPEAKER_00: Yeah.
• 26:58
  SPEAKER_00: Like it looks great, right?
• 27:00
  SPEAKER_00: So I bet but like I I just I can't be bothered to like do that extra level of of research and and get into it.
• 27:04
  SPEAKER_00: Maybe if the stock were to fall like a huge amount, I'd be like, okay, let me bunker down and kind of research and like do the valuation work, all that great stuff.
• 27:11
  SPEAKER_00: Adobe, the initiation in Adobe was largely the same, where again, for many it's a huge company, everybody knows Adobe.
• 27:18
  SPEAKER_00: I was following it for multiple, multiple years, but like it never really was at like a crazy cheap valuation or like I never felt that compelled to uh to invest in it.
• 27:26
  SPEAKER_00: Um Google was much in the same for me.
• 27:28
  SPEAKER_00: Uh and I think the main thing that kind of ticks me off, at least me personally, I I don't think this applies to the average investor, but the main thing that ticks me off is if I see like really bad sentiment on Twitter about it, which this is like anecdotal, right?
• 27:40
  SPEAKER_00: Like you you can't like quantify this.
• 27:42
  SPEAKER_00: But like if I if I because I consistently post about this stuff, if I'm posting about Adobe and like the average person is telling me, like, oh, this PDF company, their monopoly is over, that probably ticks me off that like, you know, sentiment is like so terrible on this company that there's a there's a huge disconnect in in value here.
• 27:58
  SPEAKER_00: People are thinking that they get money from their PDF monopoly when people were talking to me about like, you know, Google doesn't generate revenues from Gmail and stuff like that.
• 28:06
  SPEAKER_00: Yeah, you can use all that stuff, uh, but they don't generate revenues from it.
• 28:10
  SPEAKER_00: And like they're using that as a bearish point, like that part of the thesis, you know what I mean?
• 28:14
  SPEAKER_00: Um, like, yeah.
• 28:15
  SPEAKER_00: Uh I guess you know what?
• 28:18
  SPEAKER_00: Yeah.
• 28:19
  SPEAKER_00: Um, so like it usually ticks me off when there's a lot of investors online that just like, you know, quite literally misunderstand the business, right?
• 28:27
  SPEAKER_00: Like in in the Google case or the Uber case, for example, there's a there's a lot of start sort of stuff like that.
• 28:32
  SPEAKER_00: Not a great answer, unfortunately.
• 28:33
  SPEAKER_00: Um, but I hope you no no no.
• 28:35
  SPEAKER_01: I think it it sort of covers what what I asked for.
• 28:38
  SPEAKER_01: Like, we've mentioned the word quality a couple times now.
• 28:40
  SPEAKER_01: Quality is like a buzzword that I mean everyone uses it today.
• 28:45
  SPEAKER_01: Um, maybe we should define it what it means for you.
• 28:48
  SPEAKER_01: When you look at like businesses like ASML, Agen, uh Adobe, what does a quality business look like for you?
• 28:57
  SPEAKER_01: And maybe you could give like a some examples of the characteristics of the companies you own, like the quality part.
• 29:05
  SPEAKER_00: Yeah, yeah, definitely.
• 29:06
  SPEAKER_00: Um, so I I think the way Terry Smith would define it, because he's you know the godfather of quality, whatever, is essentially he's essentially just talking about the durability of the business over the long term.
• 29:15
  SPEAKER_00: Is this a business that's going to exist and you know, like have a solid moat 20, 30, 40 years down the line?
• 29:21
  SPEAKER_00: So you can think of like the ultimate quality company would be something like Coca-Cola, for example, right?
• 29:26
  SPEAKER_00: We know with a high degree of certainty, 50 years down the line people will be consuming Coca-Cola, right?
• 29:31
  SPEAKER_00: Um, and you can say that about a lot of different companies.
• 29:34
  SPEAKER_00: I think that's great.
• 29:36
  SPEAKER_00: You know, having having essentially like a wide moat business.
• 29:38
  SPEAKER_00: That's another thing he's kind of inferring with that, by the way.
• 29:41
  SPEAKER_00: For a business to exist for the next 50 years, it needs to have a really, really wide moat.
• 29:45
  SPEAKER_00: In the case of Coca-Cola, like the brand is uh unsaleable.
• 29:48
  SPEAKER_00: Unassailable?
• 29:49
  SPEAKER_00: I hope I'm pronouncing that word right.
• 29:50
  SPEAKER_00: You're cool.
• 29:51
  SPEAKER_00: Or like uh yeah, yeah.
• 29:52
  SPEAKER_00: Uh or like uh, you know, like Hermes, right?
• 29:55
  SPEAKER_00: Like Hermes has existed for 190 years.
• 29:58
  SPEAKER_00: It has like a once in you know multiple generation sort of brand value in the sense that like you're never gonna go back to 1940 and get uh Princess Kelly or whatever her name was to like take that photograph and then the Kelly bag becomes iconic for generations to come.
• 30:14
  SPEAKER_00: It's just not happening.
• 30:15
  SPEAKER_00: Like that was or like I would even argue like Nike, there is no other Michael Jordan.
• 30:20
  SPEAKER_00: Michael Jordan came and went, he's the goat of basketball, and that's that.
• 30:23
  SPEAKER_00: Uh Roger Federer, right?
• 30:25
  SPEAKER_00: In in tennis, I believe.
• 30:26
  SPEAKER_00: Again, like a once in a multiple generation sort of talent.
• 30:30
  SPEAKER_00: Like, yes, there's going to be other dominant athletes that come up in the future, but like these icons of history, it's it's like a once-in-a-lifetime thing.
• 30:37
  SPEAKER_00: So, like, I would argue Nike has unbelievable staying power over the next handful of decades.
• 30:41
  SPEAKER_00: Can they screw it up?
• 30:42
  SPEAKER_00: Yeah, but it would take a really long time.
• 30:44
  SPEAKER_00: So, going back to your question, like I would define a quality business as something that has great staying power.
• 30:51
  SPEAKER_00: By extension to that, you are basically saying that this company has a wide moat, uh, a very wide moat that's able to kind of have that sort of staying power.
• 31:00
  SPEAKER_01: What do you find the absolute most difficult thing about investing?
• 31:05
  SPEAKER_00: I would say the psychology of it, right?
• 31:07
  SPEAKER_00: Like, at least for me personally, and I'm I'm a victim to this even to this day, of like I consistently trade and like, you know, buy and sell stocks because I kind of like react emotionally to it, if you want to frame it that way.
• 31:17
  SPEAKER_00: But you can have excellent fundamental research.
• 31:20
  SPEAKER_00: You could do your evaluation work, you could do your growth work, your projections into the future.
• 31:23
  SPEAKER_00: I think that Adobe is going to re-accelerate.
• 31:26
  SPEAKER_00: Um, you can have excellent moat analysis and really understand the company better than like employees at the company, right?
• 31:32
  SPEAKER_00: You could do all of that.
• 31:33
  SPEAKER_00: No problem.
• 31:34
  SPEAKER_00: You could talk to industry experts, you could talk to people who use the product, you could do so, you could do hundreds of hours of research.
• 31:40
  SPEAKER_00: You buy the stock, if you're down 30% and you feel uncomfortable about it, you panic sell in that moment.
• 31:45
  SPEAKER_00: Your 600 hours of research and work is is out the window.
• 31:48
  SPEAKER_00: It's useless.
• 31:49
  SPEAKER_00: And then you'll sit on the opposite side of that coin trying to justify that, like, yeah, but you know, it became unpredictable, blah, blah, blah.
• 31:56
  SPEAKER_00: I know friends of mine who sold Google, they bought at$9,200.
• 32:00
  SPEAKER_00: And then when the Apple Safari news came out, they sold out at like$145.
• 32:04
  SPEAKER_00: You should have been buying in that moment.
• 32:05
  SPEAKER_00: You should have been buying the fear, right?
• 32:07
  SPEAKER_00: But simply because of like their gut reaction to the stock price going down, like they felt uncomfortable in that moment.
• 32:13
  SPEAKER_00: Or another issue is like if the stock was flat for a year, this didn't happen, but imagine like with ASML, it was a great business undervalued the whole time.
• 32:21
  SPEAKER_00: What if after in in uh what was it, May of last year, May 2025, after the stock had been flat for an entire year and a half, you're like, oh, you know what?
• 32:29
  SPEAKER_00: Screw this.
• 32:30
  SPEAKER_00: It's been dead money for for a while.
• 32:32
  SPEAKER_00: I see TSM rallying.
• 32:33
  SPEAKER_00: I should just like put money in somewhere else in the semiconductor train.
• 32:36
  SPEAKER_00: Sure, you could have made made money on somewhere else in the semiconductor train, but like right, like it's rallied double since.
• 32:44
  SPEAKER_00: And so, like, I think the patience part, the psychological part, I think those are the bigger challenges to the average investor.
• 32:50
  SPEAKER_00: Uh, something that most people, frankly, um kind of brush under the rug.
• 32:53
  SPEAKER_00: Like, no nobody really necessarily talks about it.
• 32:55
  SPEAKER_00: There's no like direct formula, there's no DCF to like uh, you know, if like you're down 30% on a stock and you're feeling emotional about it, do this.
• 33:03
  SPEAKER_00: None of that exists.
• 33:04
  SPEAKER_00: It's a lot more ambiguous, and I think that's the more difficult part of investing.
• 33:08
  SPEAKER_01: For sure.
• 33:09
  SPEAKER_01: I think it's uh the most misunderstood but the most important part about investing.
• 33:15
  SPEAKER_01: I think that's part of why we started the podcast as well.
• 33:19
  SPEAKER_01: I mean, there are so many great research podcasts out there, many of them share the same insights, but uh like going, I I just get so sometimes frustrated by what I see online, and uh nobody really touches on like the psychological aspect of investing, and it that fascist it fascinates me the brain and how human behavior always acts the same, no matter whether there's new technological advances or you know geopolitical situations.
• 33:47
  SPEAKER_01: People always do the same stuff, it's so it's so fascinating.
• 33:51
  SPEAKER_01: I think once people start realizing more and more that the psychological part is going to determine your returns over the long term, it should get more attention, but um, we'll see.
• 34:04
  SPEAKER_01: I think this is probably where most investors struggle with FOMO, panic selling, or like you mentioned, the other side of the coin, like buying when a stock keeps falling or whatever.
• 34:14
  SPEAKER_01: What helps you?
• 34:14
  SPEAKER_01: What how do you stay grounded, or do you have like mental tricks or tips you use?
• 34:20
  SPEAKER_00: So I'm I'm in a very lucky position where, for example, I have a Discord server with like 400 people in it.
• 34:25
  SPEAKER_00: For example, I want to sell Google.
• 34:27
  SPEAKER_00: I can, hey, at everyone, thinking of selling Google, buying Adobe, what do you think?
• 34:31
  SPEAKER_00: In the span of 30 minutes, I have 100 people that are telling me their thoughts.
• 34:35
  SPEAKER_00: So I have this like instant feedback of like, you know, essentially investors and stuff like that.
• 34:39
  SPEAKER_00: So that's nice.
• 34:40
  SPEAKER_00: I understand the average you know investor probably can't have something like that.
• 34:44
  SPEAKER_00: Maybe what you could do is, you know, I not even my Discord server, but there's plenty of big YouTubers, whoever you like, right?
• 34:50
  SPEAKER_00: Um, that have Discord servers and stuff like that.
• 34:52
  SPEAKER_00: I would encourage you become a part of a community.
• 34:54
  SPEAKER_00: Join, you know, some somebody's Discord server or s join somebody's substack group chat, right?
• 34:59
  SPEAKER_00: Like substack has group chats, right?
• 35:01
  SPEAKER_00: Something like that.
• 35:02
  SPEAKER_00: Um, so like join stuff like that and you're able to discuss with other like-minded people.
• 35:07
  SPEAKER_00: I would assume if you're kind of like self-selecting into like a Seams, you know, Substack, you're interested in his stocks.
• 35:13
  SPEAKER_00: If you're self-selecting into my Discord server, you're probably interested in Uber, Adobe, Google, ASML, like that that universe of stocks, right?
• 35:20
  SPEAKER_00: So by extension to that, the other audience members inside of that Discord also, you know, are interested in like generally the same stocks as you.
• 35:27
  SPEAKER_00: And so what's kind of powerful in that is that A, you kind of learn from others and like you get feedback from others.
• 35:32
  SPEAKER_00: Um, but also in the event of like, for example, I don't know, Google's down 30%, Uber's down whatever, you can go in there and talk to other people and be like, hey, like uh is the thesis being broken, whatever, and kind of get feedback and like crowdsource research and stuff like that.
• 35:45
  SPEAKER_00: Uh maybe it like reinforces your conviction that other people are buying and stuff like that.
• 35:50
  SPEAKER_00: Maybe it detaches you from the actual stock price movements of just like staring at it on your screen.
• 35:56
  SPEAKER_00: Maybe somebody mentions something about the fundamentals and like it brings you back to reality of like, oh, this is a great underlying business and whatnot.
• 36:03
  SPEAKER_00: And it kind of maybe helps out a little bit uh with that emotional aspect uh on that front.
• 36:08
  SPEAKER_00: But again, like boring answer, I'm sorry, but like part of this part of this just comes with time.
• 36:13
  SPEAKER_00: Like you can't expect to be a a third month investor and like have all of this figured out.
• 36:18
  SPEAKER_00: Even I myself, I'm four years into investing, you can practically do this for a living.
• 36:22
  SPEAKER_00: I arguably spent, you know, the the better part of my past three, four years doing this sort of stuff.
• 36:27
  SPEAKER_00: I still make mistakes to this day.
• 36:29
  SPEAKER_00: In fact, I have my closest friend Nick, he buys generally the same stocks as me.
• 36:33
  SPEAKER_00: He has a significantly higher portfolio return than I simply because he just like holds longer or like he just doesn't sell, right?
• 36:41
  SPEAKER_00: Like I sold Google at 290, he only trimmed it at like 340 or like 330 or something like that.
• 36:47
  SPEAKER_00: He he just like holds a little bit longer, he's more detached from the stock market.
• 36:50
  SPEAKER_00: That's maybe an advice that that would help out a lot of people as well.
• 36:53
  SPEAKER_00: Is unless, like, you know, it's part of your job, you don't need to look at the stock market every day.
• 36:58
  SPEAKER_00: Like, do you do you look at the uh price of your home every day?
• 37:01
  SPEAKER_00: No, obviously not.
• 37:02
  SPEAKER_00: In fact, like you should be thinking of it as as something like that.
• 37:05
  SPEAKER_00: Like these are assets you're trying to hold for the long term.
• 37:07
  SPEAKER_00: I would assume if you know you're listening to a podcast like this, um, you are a long-term-oriented investor, and you should act like one.
• 37:15
  SPEAKER_00: You know what I mean?
• 37:16
  SPEAKER_01: Yeah, it blows my mind sometimes.
• 37:19
  SPEAKER_01: I am probably working on like analyzing businesses and reading books probably six days a week.
• 37:26
  SPEAKER_01: I just love it.
• 37:26
  SPEAKER_01: I just love learning and reading about it.
• 37:28
  SPEAKER_01: But I never ever look at my portfolio.
• 37:31
  SPEAKER_01: Maybe, maybe once every three, four months.
• 37:34
  SPEAKER_01: Wow.
• 37:34
  SPEAKER_01: Um, since that is my perspective, my view.
• 37:37
  SPEAKER_01: I always think people are more like more like me.
• 37:40
  SPEAKER_01: But like having been in a couple communities, I mean, many of them, even investors who've been doing this for like 10 or 20 years, look at their portfolio daily.
• 37:51
  SPEAKER_01: It blows my mind.
• 37:52
  SPEAKER_01: And I think it's such a bad thing in the long term.
• 37:55
  SPEAKER_01: I always tell people remove the broker app from your phone.
• 37:58
  SPEAKER_01: It forces you to take a little extra, open your laptop, log in, you know.
• 38:01
  SPEAKER_01: It's the more friction to buy and sell, the better, I always say.
• 38:05
  SPEAKER_00: I was gonna use the same exact word.
• 38:07
  SPEAKER_00: The more friction you add to being able to check the stock prices is probably better for your long-term returns.
• 38:13
  SPEAKER_01: Yeah, add two-factor authentication.
• 38:15
  SPEAKER_01: I mean, it's always annoying, you know, but uh yeah.
• 38:19
  SPEAKER_01: So you talked about having a community.
• 38:21
  SPEAKER_01: This instant feedback can also be a bad thing, right?
• 38:24
  SPEAKER_01: I mean, they have different views, different styles, beliefs.
• 38:28
  SPEAKER_01: So, does having these followers and people sharing their thoughts with you sometimes influence your decision making?
• 38:36
  SPEAKER_00: Um, so uh sorry, influence my decision making.
• 38:38
  SPEAKER_00: Yeah, I would I would say yes to that as well.
• 38:40
  SPEAKER_00: But like this is something I'm kind of learning as I go as well.
• 38:43
  SPEAKER_00: You know, obviously I don't have like the biggest YouTube channel out there or anything like that, but I'm I'm getting to a stage where like I have an overwhelming amount of feedback coming my way, whether it's from Twitter or YouTube comments or even the Discord and stuff like that.
• 38:56
  SPEAKER_00: So I I am kind of training to build that muscle on a personal level of like, you know, like filtering essentially the the feedback that I get.
• 39:04
  SPEAKER_00: Um and you know, more recently, like I've slowed the pace in which I respond to Twitter replies and and YouTube comments and stuff like that as a part of that.
• 39:12
  SPEAKER_00: Um that again, that's more of just like a personal thing.
• 39:15
  SPEAKER_00: Uh so you are right in the sense of like too much information is also problematic.
• 39:19
  SPEAKER_00: And you can probably experience that if you if you join um, you know, a community, again, it doesn't have to be my community or whatever, but like if you join somebody's community having too much information on a certain stock, that could also be problematic.
• 39:31
  SPEAKER_00: Or if it's like too consensus, if, for example, you join RBS community, everybody's hyper bullish on Adobe, and you just like borrow conviction because, okay, well, I'm part part of the group here.
• 39:41
  SPEAKER_00: Uh that's the wrong thing to do.
• 39:42
  SPEAKER_00: No, you should do your own due diligence and come out to your own conclusion of whether or not you like the business.
• 39:48
  SPEAKER_00: You shouldn't buy it just because uh uh like the group think and like the the herd of like everybody or like the tribalism of like everybody's uh invested in this together.
• 39:56
  SPEAKER_00: That's super dangerous.
• 39:57
  SPEAKER_00: Borrowing conviction is like a whole topic we could get into as well if you'd like, of like uh how that can become uh dangerous on its own.
• 40:04
  SPEAKER_00: Um, a quick example I have of this is one of my uh close friends from from the Discord is super you know well-seasoned investor, extremely knowledgeable.
• 40:12
  SPEAKER_00: He's one of the people that like I think called out Google, and I think he went like as far as like 40% into Google.
• 40:18
  SPEAKER_00: He had like unbelievable conviction on it.
• 40:20
  SPEAKER_00: I think he understands the business way better than anybody I've I've seen, right?
• 40:24
  SPEAKER_00: But he said no to Adobe.
• 40:26
  SPEAKER_00: And when I brought the Adobe you know research and stuff like that, and he obviously watches my videos, he's just like, dude, like I'm not a creative person, I'm not a marketing person, I've been a sales type of guy uh my entire life.
• 40:37
  SPEAKER_00: I I've never interacted with even a Canva or any of that.
• 40:40
  SPEAKER_00: I just don't get it.
• 40:41
  SPEAKER_00: And like I don't want to look into it further than that.
• 40:44
  SPEAKER_00: And you know what?
• 40:44
  SPEAKER_00: He acknowledged that.
• 40:46
  SPEAKER_00: And I would assume had he actually bought just based off of my conviction, for example, stocks down about 30% since he would have probably had a bit of uh trouble with that and and kind of questioned the thesis or psychologically had problems with it, right?
• 40:59
  SPEAKER_00: And so he made the right call of like I don't have the conviction.
• 41:02
  SPEAKER_00: Sorry, I keep going on side tangents, but this is a good shit that's for it as well.
• 41:06
  SPEAKER_00: If the stock were to drop 30%, would you still have the same conviction?
• 41:09
  SPEAKER_00: If you can't if you can't say yes to that, you shouldn't buy the stock.
• 41:12
  SPEAKER_00: Because that means you're borrowing somebody else's conviction, right?
• 41:15
  SPEAKER_00: Like I'm perfectly happy being matter of fact, perfectly happy being down 50% on Adobe because I know what the business is worth.
• 41:20
  SPEAKER_00: And this is what Peter Lynch talks about, I believe, as well, where I think at one point he was down 90% on Taco Bell or something like that, and he just like helped right through it, no problem, because he knew what the business was worth.
• 41:30
  SPEAKER_00: So um, yeah.
• 41:33
  SPEAKER_01: Yeah.
• 41:34
  SPEAKER_01: And don't worry about all the all the tantrums.
• 41:37
  SPEAKER_01: I mean, I like it, it goes all over the place, but uh that brings up new ideas and questions for me too.
• 41:42
  SPEAKER_01: So uh don't change.
• 41:43
  SPEAKER_00: Yeah, it's uh I I just always like talk like that.
• 41:46
  SPEAKER_00: I just keep going on side tangents.
• 41:47
  SPEAKER_00: Some former friends and and girlfriends have uh problems with that, but anyways, maybe that's why they're former friends.
• 41:52
  SPEAKER_01: Let's uh let's talk about friends because let's say a friend comes up to you and uh I don't know, has 10k to uh start investing.
• 42:01
  SPEAKER_01: Yeah, he saves a little bit, but he has no experience.
• 42:04
  SPEAKER_01: What do you tell your uh friend?
• 42:06
  SPEAKER_01: Uh, how how does one get started?
• 42:09
  SPEAKER_00: Yeah, so I I've um been kind of known as like the investment guy in you know my circles and stuff like that.
• 42:14
  SPEAKER_00: Like I'm talking in real life.
• 42:16
  SPEAKER_00: Uh so this is actually a situation that happens pretty frequently.
• 42:19
  SPEAKER_00: Actually, it happened literally a week ago.
• 42:21
  SPEAKER_00: Um I I do two things personally.
• 42:23
  SPEAKER_00: One, I I don't really want to like waste time on them if they're not being serious.
• 42:26
  SPEAKER_00: So I send them this Ali Abdal video.
• 42:28
  SPEAKER_00: You know, Ali Abdal, huge YouTuber, five million subscribers.
• 42:31
  SPEAKER_00: Yeah, I'm I think the like the UK guy efficient productivity.
• 42:34
  SPEAKER_00: Yeah, yeah, yeah.
• 42:35
  SPEAKER_00: Yeah, yeah, yeah.
• 42:36
  SPEAKER_00: Um so he's he's done a video of like how to invest, and it's just like super basic stuff.
• 42:40
  SPEAKER_00: So if they're being serious, they would watch a 30-minute Ali Abdal video, right?
• 42:44
  SPEAKER_00: So I just send them the Ali Abdal video um as like a sort of uh filter of like, are you being serious?
• 42:49
  SPEAKER_00: Because I I don't want to I've done this plenty in the past where I invest my time, I explain to them all these things, and they just don't do anything with it.
• 42:55
  SPEAKER_00: If that's the route we're going, I would rather just kind of like filter that out right away, right?
• 43:00
  SPEAKER_00: So I send them that video.
• 43:01
  SPEAKER_00: If they usually uh watch it or like they hit me back and and come back to me and they're uh serious about actually investing and stuff like that.
• 43:07
  SPEAKER_00: The number one recommendation that I've you know consistently dished out as advice to again, like personal friends and stuff like that, is uh just buy the SP 500 and like dollar cost average into it until you learn a couple different things.
• 43:20
  SPEAKER_00: So, like A, like understand stocks and investing a little bit better, but also I think what you learn in that is that you're putting in small amounts of money and uh psychologically you are getting to a state where you are watching your money trade up and down and like lose money and gain money and stuff like that.
• 43:36
  SPEAKER_00: And again, like the SP 500 is a very, very low risk in any given year, right?
• 43:41
  SPEAKER_00: If the guy's investing a thousand dollars, for example, uh he's he's gonna lose what, like 20% if like we go into a brutal uh you know historic crash with the SP.
• 43:51
  SPEAKER_00: And at the same time, he's consistently buying, right?
• 43:53
  SPEAKER_00: So that's the general advice I I give to people.
• 43:55
  SPEAKER_00: Do they end up following that advice?
• 43:57
  SPEAKER_00: No, not always.
• 43:58
  SPEAKER_00: Uh at the same time, They're like, you know what, I really like uh Amazon, for example, or I really like uh Google.
• 44:04
  SPEAKER_00: Should I be buying Google?
• 44:05
  SPEAKER_00: I'm like, yeah, listen, if you if you want to do that, no problem.
• 44:07
  SPEAKER_00: I would just restrict it to a smaller percentage of your portfolio because you're taking on more individual risk uh buying into um you know individual stocks and stuff like that.
• 44:16
  SPEAKER_00: And so I've different people that like I've structured like one of my friends is like, oh dude, I like it, uh, I get Uber Eats every single day for me and my roommates.
• 44:24
  SPEAKER_00: We Uber all over to downtown and this and that all the time.
• 44:26
  SPEAKER_00: Like, hey, this is a great business.
• 44:28
  SPEAKER_00: I know you own it.
• 44:28
  SPEAKER_00: Should I buy it?
• 44:29
  SPEAKER_00: I'm like, hey, listen, if that's your thesis, yeah, go for it.
• 44:31
  SPEAKER_00: Put a little bit of money in it, no problem.
• 44:32
  SPEAKER_00: Uh, he's down a lot on that, but that's okay.
• 44:35
  SPEAKER_00: He's learning.
• 44:36
  SPEAKER_01: Yeah.
• 44:37
  SPEAKER_01: It's such a difficult question to answer when your friends ask, like, what's what's a what's a company I gotta buy right now?
• 44:43
  SPEAKER_01: They they just don't understand how investing works.
• 44:46
  SPEAKER_01: Like, I I can't tell you what to buy.
• 44:49
  SPEAKER_01: I mean, even if you buy it, you still have to hold it and do make all the decisions yourself.
• 44:53
  SPEAKER_00: There's so many disclaimers that come before I answer that question.
• 44:57
  SPEAKER_01: I know.
• 44:58
  SPEAKER_01: Yeah, I get the feeling, yeah.
• 45:00
  SPEAKER_01: So what do you do in that situation?
• 45:01
  SPEAKER_01: I'm I'm curious.
• 45:03
  SPEAKER_01: I usually tell them if they're serious, I think the filter is a good one because I do spend a lot of time explaining stuff, and uh it doesn't really give me a lot of energy in return.
• 45:16
  SPEAKER_01: But I usually don't tell them to buy an SP, I usually tell them to invest in an all-world index fund.
• 45:22
  SPEAKER_01: You Europeans, man.
• 45:24
  SPEAKER_01: Yeah, it's it's more safe.
• 45:26
  SPEAKER_01: You know, uh there's a lot going on, and I think just spreading your investments across across the globe is just always a good idea.
• 45:33
  SPEAKER_01: And then I just tell them to to read a couple books.
• 45:36
  SPEAKER_01: I mean, if they're serious, you have to understand some of the basics, right?
• 45:39
  SPEAKER_01: So if you want the most basic answer, buy an all-world index fund and put money in there every three or four months or something, and don't look at it for 40 years, that's it.
• 45:50
  SPEAKER_01: Yeah.
• 45:50
  SPEAKER_00: Another another kind of piece of advice that actually just came to me is um if it's like a gym guy, for example, I try to give him analogies in terms of gym.
• 45:59
  SPEAKER_00: So, like, you know, if he's like, Oh, but I want to invest in this, but are yeah, have you heard of options?
• 46:04
  SPEAKER_00: That's like a huge red flag, right?
• 46:05
  SPEAKER_00: I'm like, yeah, yeah, no, I've heard of options.
• 46:06
  SPEAKER_00: Yeah, no, you could do that, no problem.
• 46:08
  SPEAKER_00: Um, but question for you on your first day in the gym, will you go steroids?
• 46:13
  SPEAKER_00: Right, right.
• 46:13
  SPEAKER_00: Do you do you use steroids and then do you go to like the squat rack and start like lifting it and then doing all these crazy stuff?
• 46:19
  SPEAKER_00: The answer is obviously no.
• 46:20
  SPEAKER_00: That's like an expert level, like four or five years into lifting, you start doing stuff like that, maybe.
• 46:25
  SPEAKER_00: So that's what options is.
• 46:27
  SPEAKER_00: I wouldn't recommend it.
• 46:27
  SPEAKER_00: I wouldn't recommend it right now.
• 46:29
  SPEAKER_01: Turbos, which is uh two injections and uh yeah, exactly.
• 46:33
  SPEAKER_00: Oh, that's a good that's a good one.
• 46:35
  SPEAKER_01: Make it personal, right?
• 46:36
  SPEAKER_00: I try to, right?
• 46:37
  SPEAKER_00: So depending on whether it's a gym guy, whether it's an ac academic guy, he's like into school.
• 46:42
  SPEAKER_00: I speak to him in terms of like school stuff, where I'm like, oh, like in your first math class, do you learn about all this stuff?
• 46:48
  SPEAKER_00: No, obviously not.
• 46:49
  SPEAKER_00: So that that's that's what that is.
• 46:50
  SPEAKER_00: He's like, oh, okay, yeah, that that clicks.
• 46:53
  SPEAKER_01: Yeah.
• 46:54
  SPEAKER_01: What companies are you uh currently looking at?
• 46:57
  SPEAKER_00: Any examples?
• 46:58
  SPEAKER_00: Yeah, the the watch list is largely stayed the same for for for a while.
• 47:02
  SPEAKER_00: Shopify, I would include Shopify still on the watch list because again, it's like a 1% position.
• 47:07
  SPEAKER_00: Adian's been on my watch list since you know like the past two years.
• 47:10
  SPEAKER_00: It's down a lot recently, so I gotta take a relook at that.
• 47:14
  SPEAKER_00: Revenue is slowing down on Adian though, right?
• 47:17
  SPEAKER_00: It is, yeah.
• 47:18
  SPEAKER_00: Somewhat, yeah.
• 47:19
  SPEAKER_01: Is that like a sort of like an ongoing thing or I haven't looked into it too much, so maybe I gotta do my own homework, but I don't own Adian myself, so I am not as deep as some of my uh of my colleagues, but I'll be sure to ask them.
• 47:33
  SPEAKER_01: I'm not sure.
• 47:34
  SPEAKER_01: I do know that there's like uh a couple things changing within management, which they don't really like, but everything from the from a fundamental basis still looks good, but yeah, I don't know.
• 47:46
  SPEAKER_01: I think it's also like Stripe is doing very good.
• 47:50
  SPEAKER_01: But in the long term, I think I gen and Stripe will probably operate like a duopoly where they are both like big winners, so uh I wouldn't be too worried.
• 48:00
  SPEAKER_01: Yeah, of course.
• 48:01
  SPEAKER_00: Um and then of course, you know, like the enterprise sort of tilt with the with the company, higher authorization rates, all that stuff.
• 48:07
  SPEAKER_00: I I would imagine it has some sort of uh staying power longer term, yeah.
• 48:11
  SPEAKER_00: Um just kind of listing off names here, but like MasterCards there, Netflix.
• 48:15
  SPEAKER_00: I was so close to buying it in like the 70s.
• 48:17
  SPEAKER_00: Um I was thinking of buying it at like 70 flat, but I think the lowest it went was like 73 or something like that.
• 48:22
  SPEAKER_00: So a bit unfortunate with that one.
• 48:24
  SPEAKER_00: Uh by the way, part of my thesis was like that was that was a great contrary and pick, by the way.
• 48:28
  SPEAKER_00: We should have talked a little bit more about this, but I I was bullish on the acquisition.
• 48:32
  SPEAKER_00: I thought the acquisition would be absurdly accretive to shareholders, and yet the market had the complete opposite view as me.
• 48:38
  SPEAKER_00: I was thinking, you know, like, and I've ran through the math on this on videos in in the past, I won't bore you with with the mathematics here.
• 48:44
  SPEAKER_00: Um but I was looking at like if they really wanted to with that acquisition, they could bring about$10 billion of incremental free cash flow starting year one of that acquisition going through.
• 48:54
  SPEAKER_00: Within one year, that would double the free cash flow at the business.
• 48:56
  SPEAKER_00: So on a forward basis, you were buying the business at about 20 times like free cash flow clean.
• 49:02
  SPEAKER_00: And then yes, you bring on a lot of debt, but again, like look at all the extra profit uh generation, because my thesis was that like those assets in the hands of Netflix would be able to be distributed, and like, you know, they would cross-sell HBO Max or like bundle it and whatnot, and that would bring on a huge amount of incremental uh revenues and free cash flows to the business.
• 49:21
  SPEAKER_00: But going through the watch list, yeah, like I would say Shopify is like the main one I want to build out.
• 49:25
  SPEAKER_00: I had ServiceNow for like a month, sold it, bought Shopify.
• 49:29
  SPEAKER_00: I I just way higher conviction, I understand Shopify infinitely better.
• 49:33
  SPEAKER_00: FICO is something I still want to add to.
• 49:35
  SPEAKER_00: Meta is obviously like a disgusting uh opportunity.
• 49:38
  SPEAKER_00: Bit of a bold prediction that I have over the next five years is they kind of turn into a mini commerce app.
• 49:43
  SPEAKER_00: I think it just it's such a natural adjacency for them.
• 49:45
  SPEAKER_00: It just makes the most sense.
• 49:47
  SPEAKER_00: We obviously see you know TikTok shop and and how massive and powerful that business has become for TikTok, right, as a means of monetizability.
• 49:54
  SPEAKER_00: You only like you can only imagine just how monetizable Instagram and and Facebook would be.
• 50:00
  SPEAKER_00: If TikTok shop is making like$25 billion of revenue, you gotta imagine like within two, three years, Meta could probably pull in, I don't know, 50 north of maybe close to like a hundred billion dollars of revenue from uh if they're able to make like a TikTok shop equivalent inside of their app, um, and and you know, like charge affiliate revenues and like connect creators to like uh sponsors or or you know, like brands and stuff like that.
• 50:22
  SPEAKER_00: Like it's gonna be massive, I think, if they if they do decide to go sort of that route.
• 50:26
  SPEAKER_00: App Lovin'.
• 50:28
  SPEAKER_01: Is that just speculation for purely speculation?
• 50:30
  SPEAKER_00: Purely speculation, yeah.
• 50:31
  SPEAKER_00: Um the only sort of hint that we have is like um if you go into your Instagram settings, there's like a meta pay thing in there.
• 50:38
  SPEAKER_00: They have recently integrated the glasses, the meta glasses.
• 50:42
  SPEAKER_00: You can click on the Instagram app to like take you over to the meta app.
• 50:46
  SPEAKER_00: So I think those are like the early innings of signs of commerce being introduced directly into Instagram.
• 50:51
  SPEAKER_00: At the same time, you gotta imagine like there's a super targeted advertising that you can include.
• 50:56
  SPEAKER_00: So, like if you if I, Arya Radnia, is is self-selecting to like um you know follow the Nike page, odds are that like I'm probably interested in in Nike products and stuff like that.
• 51:05
  SPEAKER_00: What if they gave Nike the ability to put like a super targeted advertisement only to followers, right?
• 51:10
  SPEAKER_00: Like there's a lot of fun stuff they can do over the next handful of years.
• 51:13
  SPEAKER_00: I'm I'm curious to see what they what they do, especially in the age of AI and like super targeted advertising.
• 51:18
  SPEAKER_00: It should be interesting.
• 51:20
  SPEAKER_01: Yeah, and it's uh another company that has like a ton of optionality, right?
• 51:24
  SPEAKER_01: I mean unbelievable optionality.
• 51:26
  SPEAKER_01: Yeah, like they just didn't they just get rid of like the metaverse?
• 51:31
  SPEAKER_00: They did, and then they didn't, and then they're cutting back some of it.
• 51:34
  SPEAKER_00: It's like a huge back and forth.
• 51:36
  SPEAKER_00: I don't know what they're doing.
• 51:37
  SPEAKER_01: Yeah, you know, I think a good book for you could probably be um yeah, I think the book is called What I Learned from Darwin about investing.
• 51:46
  SPEAKER_01: Uh I'll get the name right uh in a second.
• 51:49
  SPEAKER_01: I'll get this right after the podcast.
• 51:50
  SPEAKER_01: I need to get the book, and uh, I think this will be uh a good book for you to to read.
• 51:55
  SPEAKER_00: Are you talking about like the range of possibilities sort sort of sort of thing?
• 51:59
  SPEAKER_01: No, it's it's mostly about it's it's usually better to avoid a type 1 mistake than a type 2 mistake.
• 52:07
  SPEAKER_00: Okay, definitely.
• 52:08
  SPEAKER_00: Uh I'm actually I'm trying to get back into reading.
• 52:10
  SPEAKER_00: I used to, when I was like 15, 16, I was like a huge, huge reader.
• 52:13
  SPEAKER_00: I was you know taking notes and like I have this like notion doc with like all my notes and it's like color-coded, all this crazy stuff.
• 52:19
  SPEAKER_00: Haven't been reading as much past couple years, so I'm I'm trying to I'm trying to get back to to that level, but at the same time, you know, there's there's more responsibility, so uh a bit of a balance like and it's it's not only a fun book, but it's it's very insightful as well.
• 52:31
  SPEAKER_01: I'll share with you the book afterwards.
• 52:33
  SPEAKER_01: Um for sure.
• 52:34
  SPEAKER_01: Anyway, so let's say the market's closed for a decade, and you can only keep like a single business from your current portfolio or a company you don't own.
• 52:48
  SPEAKER_01: Let's ignore valuation.
• 52:49
  SPEAKER_01: You just have to hold the company for the coming decades, just a single business.
• 52:53
  SPEAKER_00: Which uh which one would you pick?
• 52:56
  SPEAKER_00: Yeah, that's a fantastic question.
• 52:58
  SPEAKER_00: Instantly, what came to my mind was Amazon.
• 53:01
  SPEAKER_00: Because I I actually cannot possibly think of a single way that a decade down the line the business hasn't done phenomenally well, even though the stock recently has not done well, whatever the case is.
• 53:10
  SPEAKER_00: But I think you know, some other like if you wanted to ask me like uh which company are you certain will outperform the SP over the next decade, I instantly think of Visa MasterCard.
• 53:19
  SPEAKER_00: That's that's where my brain sort of goes.
• 53:22
  SPEAKER_00: Um But yeah, I I would I would probably say if stock market closed had to hold something for a decade blindly, uh no sort of look into how the business is developing or evaluation, all that, um yeah, I would buy Amazon today and and hold it for a decade and and just not think about it.
• 53:39
  SPEAKER_01: I would probably have thought about this, and the first two companies that came to mind as well were Fizan MasterCard, just because no matter what you do, they always make money.
• 53:50
  SPEAKER_01: Like whether you buy online or swipe a card in a in a shop, that was those were the first two companies that came to mind for me.
• 53:57
  SPEAKER_01: And otherwise it's gotta be like three other companies that came to mind were TSMC, ASML, and Amazon.
• 54:05
  SPEAKER_01: I just cannot imagine for the life of me that they are gone 10, 20 years from now.
• 54:11
  SPEAKER_00: No, no.
• 54:11
  SPEAKER_00: Well, I don't think it's a question of them being gone.
• 54:13
  SPEAKER_00: I think it's a question of how's the financial performance of the business 10 years out.
• 54:17
  SPEAKER_00: Yeah, fair.
• 54:18
  SPEAKER_00: And for every single one of those examples, it's going to be incredibly well.
• 54:22
  SPEAKER_00: Like the secular tailwind of, for example, in the case of Amazon, e-commerce and uh cloud advertising getting integrated into their e-commerce, like it's it's only going to get better.
• 54:31
  SPEAKER_00: And it's this flywheel, it's like an avalanche that just is not stopping.
• 54:35
  SPEAKER_00: Again, I saw the flip side of this with my little toilet paper experiment of dude, like shipping just within North America is so unbelievably expensive.
• 54:44
  SPEAKER_00: For example, from Toronto to ship like a uh package that is one kilogram over to Vancouver, which is the other coast, uh, or just California, for example, it costs like$15.
• 54:54
  SPEAKER_00: So for a product that I'm selling for like$35,$15 of those dollars go just straight to shipping.
• 54:59
  SPEAKER_00: And like that's the cheapest provider that I was able to find.
• 55:02
  SPEAKER_00: So now imagine like the scale at which Amazon has gone to to just say shipping is free for everybody.
• 55:08
  SPEAKER_00: Nobody's ever gonna compete with that.
• 55:09
  SPEAKER_00: Just as simple as that, right?
• 55:10
  SPEAKER_00: Like, and it's becoming faster.
• 55:12
  SPEAKER_00: I don't like I live in a uh pretty suburban area, like I'm not exactly in the actual city of Toronto, and I get the option sometimes where it's like I'm ordering at like 10, 11 p.m.
• 55:23
  SPEAKER_00: and it's like, yeah, we'll deliver this to you tomorrow morning.
• 55:26
  SPEAKER_00: How are you possibly able to do that?
• 55:29
  SPEAKER_00: So I I click this button on my phone, and like my toothpaste is available to me uh, you know, eight hours from now.
• 55:34
  SPEAKER_00: Like, wait, what are we talking about?
• 55:36
  SPEAKER_00: Uh so it's it's just a it's a different level of scale that business has has achieved, and nobody's nobody's ever gonna be able to compete with them.
• 55:43
  SPEAKER_01: Yeah, and since you live in Canada and North America, you you probably have a different view, but I don't know if you know, but Amazon is not dominant in Europe.
• 55:52
  SPEAKER_01: And uh I think people underestimate how much more room for growth there is for Amazon.
• 56:00
  SPEAKER_01: And uh I think it it's a done deal for the Dutch e-commerce business if Amazon tries to compete.
• 56:06
  SPEAKER_01: I mean, they have so much money.
• 56:09
  SPEAKER_01: I I I think the flywheel at this point without regulation is uh almost impossible to like really stop at this point.
• 56:15
  SPEAKER_00: Yeah, well, it it's kind of unfair, right?
• 56:17
  SPEAKER_00: Like they have this like AWS business with 40% operating margins that could fund losses forever.
• 56:24
  SPEAKER_00: Like it it's yeah, like it's like uh playing a basketball game against like Michael Jordan.
• 56:30
  SPEAKER_00: Like, yeah, you're gonna lose, dude.
• 56:31
  SPEAKER_00: If if they if he really wanted to beat that uh local player, like they they would go about it.
• 56:36
  SPEAKER_00: Like they would just subsidize prices for uh as long as they basically want.
• 56:40
  SPEAKER_00: Uh, it just comes down to the individual regulations within those countries.
• 56:43
  SPEAKER_00: I think for both Uber and Amazon's e-commerce business, this is a super like under talked about and like underrated component of both of the theses of like they have so much white space, particularly international and Europe and stuff.
• 56:55
  SPEAKER_00: I don't know about Uber, uh particularly with uh within the Netherlands, but um not not not really that big, right?
• 57:02
  SPEAKER_00: So like the North American investor thinks like, oh, everybody uses Uber, everybody has an Amazon Prime subscription.
• 57:08
  SPEAKER_00: How much how much more can they grow?
• 57:09
  SPEAKER_00: And yet, like international is like super uh underpenetrated, right?
• 57:13
  SPEAKER_01: Yeah.
• 57:14
  SPEAKER_01: Some of the businesses don't really translate well to different geographies.
• 57:19
  SPEAKER_01: That's something I've been thinking about lately.
• 57:21
  SPEAKER_01: Like Uber is such a great business model, and whenever I go on vacation to uh larger countries, I always use uh Uber.
• 57:30
  SPEAKER_01: But in the Netherlands, for example, our country is so small, we can drive to the other side of our country in two hours, so we just always bike or take the bus or you know, so Uber is so unnecessary in our country.
• 57:45
  SPEAKER_01: But when you go to Germany, for example, it's a it's a very large European country, but uh like the public transport is very well served there.
• 57:55
  SPEAKER_01: So even then, Uber is like the most expensive option.
• 57:59
  SPEAKER_01: Yeah.
• 58:00
  SPEAKER_01: So Uber is like a great business in America, but in Europe it doesn't really translate that well.
• 58:05
  SPEAKER_01: Yeah.
• 58:06
  SPEAKER_00: It's funny you bring up Germany, it's actually one of their worst markets.
• 58:09
  SPEAKER_00: Uh, there's a stat they share where it's like a percentage of adults within that country that use Uber once a month.
• 58:15
  SPEAKER_00: For reference, like I think Canada's 20%.
• 58:17
  SPEAKER_00: So one in five adult Canadians use Uber every single month.
• 58:21
  SPEAKER_00: In Germany, it's one percent.
• 58:23
  SPEAKER_00: One in one hundred Germans, German adults uses Uber every month.
• 58:27
  SPEAKER_00: So um they're trying to kind of uh bump up the frequency of that over time.
• 58:31
  SPEAKER_00: But as you mentioned, yeah, it's a huge challenge where it's like in a Germany which has phenomenal uh public transport, um odds are like maybe it doesn't translate that well, and um maybe it'll never get to the penetration in which a a uh Canada is at or like an Australia is at, right?
• 58:47
  SPEAKER_00: Like these are some of the best markets for for Uber, is Canada, Australia, US, uh stuff like that.
• 58:52
  SPEAKER_00: Like uh maybe it never gets to 20-30 percent um because of just public transport's way better in Europe.
• 58:57
  SPEAKER_00: So uh yeah, definitely definitely something to consider.
• 58:59
  SPEAKER_00: I don't have an answer for it.
• 59:00
  SPEAKER_01: Yeah.
• 59:02
  SPEAKER_01: But like like we mentioned, the optionality is massive and they have so many verticals.
• 59:06
  SPEAKER_01: Like the food delivery is I do see quite some Uber food delivery, but the competition is intense and low margin, obviously, but uh lots of optionality for them.
• 59:17
  SPEAKER_00: I believe they're aggregating uh like a parking now as well.
• 59:20
  SPEAKER_00: So maybe like that's the business that people use Uber in Germany for, right?
• 59:24
  SPEAKER_00: Like parking or car rentals, right?
• 59:26
  SPEAKER_00: Like I would assume plane, dude.
• 59:28
  SPEAKER_00: Like they'll figure something.
• 59:29
  SPEAKER_00: The point is, like they've become essentially an app to aggregate.
• 59:32
  SPEAKER_00: And actually, this is like the Airbnb thesis of like they'll just start aggregating services.
• 59:36
  SPEAKER_00: I think Uber might beat them to it over the next decade.
• 59:40
  SPEAKER_01: I think I uh I went to uh um Scotland uh a couple weeks ago, and I remember looking at the Uber app, and they also sell train tickets now, which that would probably do well if it's I don't know, whether it's cheaper or uh not than getting it from uh the train itself, but uh that could be something.
• 59:59
  SPEAKER_01: I always end any episode with like a timeless lesson.
• 1:00:04
  SPEAKER_01: So you probably you might need some time to think about this, but if you had to pass like uh a single lesson, it could be an investing lesson, it could be something you've learned along the way, a mistake you've made to our listeners.
• 1:00:20
  SPEAKER_01: What would what would be uh your lesson?
• 1:00:23
  SPEAKER_00: Can I give you two?
• 1:00:24
  SPEAKER_00: Because uh one of them is more investing related, one of them is more like personal life.
• 1:00:27
  SPEAKER_00: The more investing related one is this is I think the biggest problem that is plaguing the investment world.
• 1:00:34
  SPEAKER_00: And I have, in my opinion, I have a unique view on this because of all the feedback I get as a YouTuber, as a as a personality on Twitter and stuff like that.
• 1:00:41
  SPEAKER_00: I think there is this whole whole sort of like herd mentality, particularly with stocks, and and people like kind of form cults around stocks.
• 1:00:47
  SPEAKER_00: And I'm not talking Palantir Tesla, I'm talking even down to like Apple.
• 1:00:51
  SPEAKER_00: Like people refuse to see a bearish opinion about Apple because they've held it for so long and they just their love for the business is is is so vast that they refuse to see anything bad about the company.
• 1:01:01
  SPEAKER_00: So I would my advice on the investing side, I think is the biggest problem we have as investors, and we should all kind of work towards uh making improving on this, is to like think for yourself, which is easier said than done, of course.
• 1:01:13
  SPEAKER_00: But again, like try to kind of like challenge your own opinions or like be generally open-minded, or perhaps try to acknowledge you know the biases you may have against the business.
• 1:01:21
  SPEAKER_00: There's so many people that hate Uber just for the sake of like, you know, their political beliefs, and they think that immigrants are Uber drivers and Uber doesn't pay their drivers and this and that and whatever.
• 1:01:30
  SPEAKER_00: And just based off of that bias or based off of that narrative, essentially, they hate the company.
• 1:01:35
  SPEAKER_00: For the longest time, me personally, I hated Instagram and Meta because I thought it was stupid.
• 1:01:41
  SPEAKER_00: I didn't I didn't have Instagram, or I hated Netflix, right?
• 1:01:43
  SPEAKER_00: Because I'm just like, this is this is stupid.
• 1:01:45
  SPEAKER_00: I don't I don't watch Netflix, and why would anybody pay for anything like this?
• 1:01:48
  SPEAKER_00: That uh and because of that, I hated the stock or I hated the company, or I uh trash talked the company, whatever the case is, simply off the back of I don't use the service and I dislike the service, or I think Instagram is like a poison to to the world, and I had that negative bias against it, right?
• 1:02:03
  SPEAKER_00: So on the investment side, try to challenge your own biases and try to think for yourself.
• 1:02:07
  SPEAKER_00: Again, easier said than done, but uh just like a continuous self-improvement process on that front.
• 1:02:11
  SPEAKER_00: On the more personal side, if I could leave uh the audience with something, is uh my favorite quote ever, which is each step illuminates the next.
• 1:02:18
  SPEAKER_00: I think people, and you know, I'm obviously younger here, so I haven't lived that much life, but I think people have this notion of like, uh, you know, everything's figured out, my career's figured out, I'm gonna go through school and I'm gonna get this job and then I'm gonna work my way up and the corporate ladder, whatever.
• 1:02:30
  SPEAKER_00: If you spend any amount of time studying history's greatest entrepreneurs and the founding story of even, for example, Adien, right?
• 1:02:37
  SPEAKER_00: Most of these entrepreneurs they didn't have it figured out.
• 1:02:40
  SPEAKER_00: Steven Van Vender, what's his name?
• 1:02:42
  SPEAKER_00: The CEO's name?
• 1:02:43
  SPEAKER_00: I'm butchering that for sure.
• 1:02:44
  SPEAKER_00: The CEO of Adien.
• 1:02:45
  SPEAKER_00: Yeah, yeah.
• 1:02:46
  SPEAKER_00: Vendor Dust.
• 1:02:46
  SPEAKER_00: Steven from the yeah, from the Dush, yes.
• 1:02:48
  SPEAKER_00: Yeah, yeah, there we go.
• 1:02:49
  SPEAKER_00: Um, so he he didn't have it figured out that he would make Adian and it would be this juggernaut of a business powering uh the payments for all these international brands.
• 1:02:58
  SPEAKER_00: He he just like he started his first payments business, and that led him to realize that you can't do acquisitions as a as a payments company.
• 1:03:05
  SPEAKER_00: And so then he started Addien, and and that was a story there.
• 1:03:08
  SPEAKER_00: CEO of Salesforce, Mark Benioff, interned randomly.
• 1:03:12
  SPEAKER_00: He he called up uh Apple in like 1980, randomly got a summer internship.
• 1:03:17
  SPEAKER_00: That eventually led him to working at Oracle and becoming the youngest uh chief marketing officer of Oracle.
• 1:03:22
  SPEAKER_00: At the turn of 2000, um, with the internet, he realized, hey, we should take this online and do software as a service.
• 1:03:30
  SPEAKER_00: And so, like, the point is each step illuminates the next.
• 1:03:33
  SPEAKER_00: If you went to a 22-year-old Mark Benioff and asked him, What will you do in your career?
• 1:03:37
  SPEAKER_00: He might have told you, Oh, I might do consulting or this or that, I'm gonna go into finance, whatever.
• 1:03:42
  SPEAKER_00: He has no idea he's gonna start Salesforce.
• 1:03:44
  SPEAKER_00: You could not predict that.
• 1:03:45
  SPEAKER_00: If you ask the founder of Adian when he's 22 years old, what are you gonna go do?
• 1:03:50
  SPEAKER_00: There's precisely a 0% chance that he has any idea that, yeah, we're gonna create the first payments company that doesn't do acquisitions and we're gonna do it exceptionally well.
• 1:03:58
  SPEAKER_00: We're gonna be the highest authorization rate payments company in the world.
• 1:04:01
  SPEAKER_00: Dara, the CEO of Uber, again, exact same story of you could not have predicted that he would eventually become a CEO.
• 1:04:07
  SPEAKER_00: It's like a chain of like just random events and opportunistically taking those events.
• 1:04:12
  SPEAKER_00: So this whole notion of like, I have a plan, no, you don't.
• 1:04:16
  SPEAKER_00: Each step illuminates the next.
• 1:04:17
  SPEAKER_00: You'll figure it out over time and opportunistically uh take advantage of these situations, right?
• 1:04:23
  SPEAKER_00: Beautiful.
• 1:04:24
  SPEAKER_01: Arya, thank you so much for taking the time out of your busy schedule and school life to do this.
• 1:04:31
  SPEAKER_01: I uh really appreciate it, and uh I found it fun and insightful.
• 1:04:35
  SPEAKER_01: Before we leave, where uh can people find and learn more about you?
• 1:04:39
  SPEAKER_00: Yeah, definitely.
• 1:04:39
  SPEAKER_00: Um well thank you again for having me on.
• 1:04:41
  SPEAKER_00: I this was a great conversation.
• 1:04:43
  SPEAKER_00: I thoroughly enjoyed it.
• 1:04:44
  SPEAKER_00: Uh just my name.
• 1:04:45
  SPEAKER_00: So it's it's Arya Radnia.
• 1:04:46
  SPEAKER_00: I'm sure I'm sure Seam will have some of my links in the description down below.
• 1:04:49
  SPEAKER_00: Yeah, I have a YouTube channel, Twitter page.
• 1:04:51
  SPEAKER_00: If you liked what we talked about here, I cover a lot more on the stocks, whole bunch of Adobe videos, whole bunch of Uber videos, all that, all that great stuff.
• 1:04:59
  SPEAKER_00: Yeah.
• 1:04:59
  SPEAKER_00: ASML as well.
• 1:05:01
  SPEAKER_00: Definitely.
• 1:05:02
  SPEAKER_01: Yeah.
• 1:05:02
  SPEAKER_01: I have a couple listeners or shareholders of ASML for sure.
• 1:05:06
  SPEAKER_01: Yes, yes, yes.
• 1:05:06
  SPEAKER_01: Uh you can find all of Aria's socials in the show notes.
• 1:05:10
  SPEAKER_01: Once again, thank you so much for listening, and we'll see you in the next one.
• 1:05:14
  SPEAKER_01: Thanks, Aria.
• 1:05:15
  SPEAKER_01: Yep, cheers.