Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 248 - NVIDIA, META, TESLA, ALPHABET AND THE COMING MARKET CRASH
Welcome to Safe Dividend Investing's Podcast 248- (November 8, 2025)
This week's podcast was motivated by a question from one of my book readers. He asked why I was so sure there would be a market crash in the next two years.
I am old enough to remember very clearly the hype and hectic days prior to the dot com stock market crash in 2000. The internet was then going to be the next big thing. Investors would all get rich if they invested in companies that had dot com in their make up.
AI is now the next big thing. However, as I point out in my podcast, everything that glitters is not gold and AI brings problems with that need to be resolved.
Looking closely at the major AI stocks you can see that they are speculative investments. While it is advantageous to have a small percentage of your stocks in speculative stocks to hopefully grow your portfolio's value, you are advised to be very careful.
I write my investment books for those who fear that they will lose their life savings by investing in the stock market My books show investors an easy, safe way to select financially strong, safe, growing companies who pay high dividends . I have been successfully investing this way for more than twenty years . My portfolio of strong dividend stocks not only provides me with a reliable, growing source of income but over time has increase the value of my portfolio by several multiples.
Unlike mutual funds and index funds - where investors have no control over their investment and only a vague idea as to what stocks are in the fund - a self-directed investor can fully understand and appreciate the value of each stock in the portfolio that they created. They can escape the mundane returns and high fees inherent in owning funds.
For more information on self-directed investing go to my website www,.informus.ca or listen to the previous 248 weekly podcasts. The first 160 podcasts are devoted to answering questions from investors just like you. Some of the remainder give you an opportunity to practice choosing stocks and introduce new relevant topics.
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
Podcast 248
8 November 2025
Tesla, Nvidia, Meta, Alphabet and the Next Market Crash
PODCAST 248 (18 November 2025
SAFE DIVIDEND INVESTING
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast # 248, on November 1st of 2025. My name is Ian Duncan MacDonald, and I am an author of six investment books.
Today’s podcast was motivated by a discussion with one of my book readers. He asked why I thought the next market crash would be within two years.
I came to this conclusion because I see too much that reminds me of the hectic days in 1998 and1999 before the dot com crash in 2000. There is an old saying that if you do not study history then you will be destined to repeat it.
AI, Artificial Intelligence, seems to be the same kind of investment motivator that made the speculators throw caution to the wind as they frantically invested in the then new dot-com technology companies. Their biggest fear was missing out on a big chance to get rich, rich, rich.
Like then, the media today is fanning the flames of greed with their daily reports of AI stocks make gigantic price gains daily. Large, fast share price gains should make investors wary however it seems that it is too easy to ignore what they want to believe is true.
Huge stock price gains attract new competitors who undercut the prices and the competitive advantages of the established businesses. The sharks circle looking for opportunities to take advantage of investors who are ignoring safe investment practices such as diversifying their portfolios so that the fall of one stock or one industry in their portfolio does not cause them to lose more than 5% of their wealth.
While the AI companies will fight to hold onto their deteriorating technical advantages. It is almost impossible to maintain a monopoly. Already the AI companies are under attack. Forty U.S. states have introduced 260 bills involving AI’s involvement in deepfakes, intrusive surveillance and threats to national security. They raise concerns about uncontrolled AI’s harm to children, threats to intellectual property copyrights and democratic voting rights.
As AI companies fight to survive, their relationships with their suppliers and their banks could be negatively impacted. Bankruptcies could increase which could impact the lending activity and deal making that AI companies currently depend on.
Under this influence, the media are warning that we should expect higher unemployment and a shrinkage in the value of assets. If in reaction the financial institutions implement higher credit controls there will be a pullback in the stock market. Investors and all publicly traded companies will adjust to these threats.
It seems every day companies are announcing because of AI that they are cutting thousands of jobs. We are being told many employees are being replaced by clever, cost-efficient AI programs. Fewer people with reliable incomes translate into less money being spent and fewer loans being granted.
To further compound the current negative economic situation the newly implemented, widely applied tariffs are increasing prices for businesses and consumers. Excluding foreign competition results in domestic manufacturers becoming less efficient. By hiding behind protective tariffs these domestic producers no longer need to create better products at lower prices to survive.
Competition makes companies try harder. It is of little benefit to consumers to allow businesses to coast along without the competitive stresses that cause innovation and change.
Can you imagine what will happen to Tesla, when, not if, the tariffs are eventually removed on imported Chinese cars. These are electric cars that can be sold for between $10,000 and $20,000 cars. Tesla is already struggling with the removal of government incentives to buy their cars.
There is probably no technology including computer chips that Chinese engineers would not be able to dominate if they chose to. In 2024 Chinese universities graduated 1.5 million engineers. There were an additional 6.7 million undergraduate engineers coming along behind them. The US graduated fewer than 500,000 engineers in 2024.
A lack of close coordination between U.S. business and the U.S. government impacts the US market. The Chinese Communist Party co-ordinates all institutions including education towards specific strategic national objectives. Their government, not private enterprise, maintains direct control of utilities, energy, oil, financial institutions and heavy industry. Thus while 96% of Chinese businesses may be private their government has total control over the infrastructure that private businesses need to operate.
The industrial advantage that the United States had after World War II when they were the only major power to survive with its industry intact has faded away. I remember visiting Detroit in 1954 when Detroit was a booming, wealthy, industrial city. The auto manufacturers thought their dominance of the automotive industry would last forever.
At that time foreign cars were rarely seen on the road, now American cars seem to be a minority on streets flooded with Toyotas, Hondas, Nissans and Volkswagens. Detroit is now a depressed shadow of what it once was. However, America did learn from this competition. American cars now, are of far better quality than they were before.
When you look at the giant AI tech companies that trade on the New York Stock Exchange who are embracing Artificial Intelligence as their savior, you questions how long they will be able to stay ahead of their competitors.
For example, I looked at Alphabet (Google), Nvidia, Tesla and Meta (Facebook). Only Nvidia has been a listed stock for more than 20 years. When it was first listed in 1999 it was a four-cent penny stock. It only reached $5.75 a share in 2022.
Investing in stocks is a matter of choosing from the more than 10,000 stocks available on North American exchanges. There are many companies listed who have been operating for 50 years that have shown steady growth in their share prices almost every year and who have paid steadily higher dividend payouts for decades. Nvidia with a dividend payout of 0.02% and a price-to-earnings ratio of 53.5x pales by comparison next to these long-established companies.
While Nvidia’s share price may currently be $179.94, its auditors report that its book value is only $3.24. I like to see book values close to their share price. With an operating margin of 58.09% and such a low book value you would wonder how high is the debt load they are carrying. I also would wonder how much thought the buyers of the 113,256,017 Nvidia shares today put into the risk of acquiring its shares.
Nvidia is still speculative. Having more than 5% of your wealth in speculative stocks to increase the value of a portfolio can be justified. More than 5% may be considered difficult to justify.
In the inevitable next market crash it will be the speculative stocks that will suffer the most as speculators sell financially challenged stocks and purchase strong stocks with long histories of stability and careful growth.
The next stock I looked closely at was Meta Platforms Inc (the owner of Facebook, Instagram and WhatsApp). It traded 12,000,015 shares today with a share price of $602.64. It is the most expensive of the four AI stocks.
Its book value of $72.87 is the highest of the four stocks as is its share price. Some analysts see the Meta share price rising to $1,117. Its operating margin of 43.23% while not as high as Nvidia’s 53.5% is still much stronger than most public companies. It first started to pay a dividend of fifty cents quarterly in February of 2024. This works out to an unimpressive dividend yield percent of 0.35.
Alphabet (Google) whose share price was $276.73 had a book value of $26.62 and operating margin of 32.19%. It was first listed in 2014 at $28.40. It is the more established of the four speculative stocks.
The weakest speculative stock appears to be Tesla currently trading at $424.37 a share. Its book value is $22.67 and its operating margin, at 4.74%, is the lowest of the four stocks. While its price to earnings ratio is the highest at 309.2x, which is almost six times higher than Nvidia’s 53.5x. These figures indicate that Tesla’s shares may be overpriced.
The financial information seems to have influenced three dozen analysts rating the stock. While three of the four stocks might have one analyst giving it a sell recommendation, Tesla had 29% of its analysts recommending it be sold while 41% rated it a buy. One analyst projected that he thought the Tesla stock would decline to $19.05.
Tesla hit its highest share price of $462 in December of 2024 which is significant growth from when it was first listed at $1.59 in 2010. However, by April of 2025 Tesla was down to $272. While it is now back over $420 a share, significant future share price growth may be difficult.
Managing one company well demands your full attention. There are many questions as to how well Elon Musk can manage the development of 4 large companies, who are involved in everything from space travel to tunnel drilling. For a business owner to then get involved in politics and government administration would seem to greatly increase the probability of future problems. It is not good for your business when angry consumers demonstrate in front of your car dealerships over your political activities.
Will I be buying any AI stocks? No. There is not one AI stock that meets my minimum requirement of being financially strong and paying a dividend of five percent or more.
I live off my dividend income. While AI stocks may well increase in value, I see no great benefit in trying to predict when to buy a stock at a low price knowing that I will then have to predict when to sell it at a higher price to generate enough profit to cover my living expenses. Even during market crashes when the share prices in my portfolio may drop by 50%, my generous dividends are consistently paid as they have always been month- after- month through all the market crashes for the last 25 years.
. Until next week this is Ian Duncan MacDonald encouraging you to take the little time it requires to learn how to manage your portfolio as a self-directed investor. Learn how to recognize a strong reliable stock from a weak pending disaster of a stock. Investing need not be complicated. It is far easier than those who employed in the financial industry want you to believe it is