Ep 44: $MU Expectations Too High? $SPCX IPO, Revisiting $SMCI & $UBER

What's the latest following the SpaceX IPO and Cursor acquisition? And how do we feel about Elon Musk becoming the first trillionaire? In Episode 44 of Buy Hold Rant, hosts Hamid Shojaee and Dustin Alper discuss the latest with all things Elon Musk, share portfolio updates, and answer listener questions as usual!

They dive into the puzzling market reactions surrounding Meta ($META), examining why, even though the company has reported strong financial results, stock prices have struggled to gain momentum. Hamid also takes a look back at several of his past investment decisions including $SMCI, $UBER, and $NFLX, reflecting on which moves he would make again and which ones he might reconsider. Plus, the guys speculate about what Micron's ($MU) earnings results will be next week.

🔥 Key Topics:

🚀 Reactions to the SpaceX IPO and the Cursor acquisition
💰 What does it mean that Elon Musk has become the world's first trillionaire?
📉 Why is $META struggling despite strong financial results?
📞 What could Micron's earnings next week look like?
🤔 Hamid reviews past investments and discusses which decisions he regrets—and which he doesn't.
🧾 How investors should think about taxes when building long-term wealth.
🎙️ Listener questions

NOTE: This content isn't investment advice. Always do your own research.

Don't forget to check out:

The Best (and Free) Earnings Calendar: https://earningshub.com/
Hamid's Savvy Trader Portfolio: https://savvytrader.com/Hamid/my-actual-portfolio
Dustin's Savvy Trader Portfolio: https://savvytrader.com/dustin/rvr

#micron #micronstock #spacex #spacexipo #meta #ai #techstocks #stockmarket #rocketlab #elonmusk #tesla #stockmarket #investing #investingpodcast

Transcript

SPEAKER_02 0:00

All right, we're live.

SPEAKER_01 0:01

Hey Dustin. Hello, hello. It's another week.

SPEAKER_02 0:05

Another week. What's our agenda today?

SPEAKER_01 0:08

So we're going to talk a lot about our portfolios this week, mainly yours. Um, not only are we going to talk about the buys and sells like we typically do, we're also gonna go down memory lane and talk about some stocks uh you used to hold and how they're doing now, and if um you made the right call or the wrong call.

SPEAKER_02 0:27

Um I haven't looked at them recently, so that that'll be fun.

SPEAKER_01 0:30

Yeah, that'll it'll be a lot of fun. Um, we have a big week next week with micron earnings. So we'll talk a little bit about what we're kind of expecting and what analysts are expecting. Are expectations too high, too low? And then we need to talk about the SpaceX IPO. It finally happened. Um, how's that going? They already announced that they're acquiring cursor, and their CEO, Elon Musk, is now the first trillionaire. So we could discuss that as well. So let's jump into your portfolio to start. Um, what were the purchases and sales that you made this week? Okay, and let me know, let me know if you if I need to remind you.

SPEAKER_02 1:15

Yeah, I'm I might need a reminder. I I think I've had uh three transactions, if I'm not mistaken. I I uh uh trimmed slightly um just another two and a half percent of my uh micron. So in total, I've trimmed five percent of my micron uh at roughly 3x, um, over 200 return in such a short time. And by the way, going back to our sort of like capital gains discussion, all of the shares that I've trimmed are in my IRA, so no tax consequences. So um I have that going for uh from a tax perspective. Um and then I have bought Meta. I feel like we're getting punked with Meta. I just uh posted on X that uh what yeah, what is going on with Meta? It every day it just goes down another couple of percentage points, and it totally reminds me of, and by the way, everything about meta seems to be like solid, more solid than ever. They're expected to have a $60 billion quarter, which is up 36% compared to last year. Like they last year, you know, for Q2, they had 44 billion in in revenue, 60 billion is a 36 increase, faster you know, sales growth than Microsoft, Amazon, Apple, Google, uh you name it, it SpaceX, right? It's faster than all of them. Yet Meta, for whatever reason, is down 20%. The stock is down 20%, its price earnings ratio is below 20. Um, this is like one of the most attractive times for meta that I have ever seen as a as a stock. So um I had to add to my meta position. Um, so that that that uh was it was a um a buy. And then uh, you know, my portfolio again hit another all-time high today. Uh, and uh when when it hits all-time highs, I'm like a little nervous. I want to have more cash. Uh, and I'm like, okay, of all of the things that that I own, what do I like the least? And I like all of them. I just you know, it's they're they're they're all great investments, but then I was like, Dustin sold a little bit of Robin Hood, so I gotta trim my Robin Hood a little bit. So uh today with Robin Hood being up around 11 or 12 percent, is when I trimmed a little bit of my uh Robin Hood. So um, so yeah, so that those were the transactions I made. Uh, what about you? What did you do?

SPEAKER_01 3:43

Before we move on, or did you have questions? Yeah, well, just yeah, just breaking them down a little bit. So for the micron sale, that's the same mindset you kind of had when you were selling Rocket Lab, right? Where like you still fully believe in the stock, but you are just taking some profits out, or is it a different mindset?

SPEAKER_02 4:01

No, no, not not quite. So Rocket Lab, again, great company, love the company, but it is it's hard to argue it's undervalued, right? Like Rocket Lab is at a hundred times sales, similar to SpaceX, in terms of like uh you know, price sales ratio. If I'm saying SpaceX is overvalued, then then you know I have to believe that Rocket Lab is overvalued. It's just that in my view, Rocket Lab is a better investment because it has you know, a smaller company has less um less blockage and ability to sort of grow their revenue faster than a much larger company. But with Rocket Lab, the reason I've been trimming is because I feel like the stock price is ahead of its skis. With Micron, the reason I'm trimming is not, it's it feels still very undervalued, but the reason I'm trimming is because it's such a huge proportion of my portfolio. It's like, you know, if I hadn't trimmed, it'd be like 35% of my portfolio. So um, so I'm trimming for that reason and and not because I think it's gotten ahead of its skis. I think Micron still has, again, in my view, it has a lot of room to run, which is why I'm still holding 95% of the high watermark of how many shares I've I've uh had.

SPEAKER_01 5:15

So that's the reason I think that's good clarification. Um, for Meta, I agree with you that it definitely feels like Micron in the sense of like it's lagging where it should be, and it feels like this is a good opportunity, non-investment advice. But I do think a big difference between Meta and Micron is Meta's story is just murkier, like yeah, in regards to people aren't a huge fan of Mark Zuckerberg, kind of in general.

SPEAKER_02 5:50

Um he does make it hard to for for people to like him. He's working on it though, he's working on it. He he was getting a very favorable, you know, like uh persona, and then like uh he did the layoffs and pissed off a lot of people, and yeah, but keep going.

SPEAKER_01 6:08

I I don't think um they're there. Did you see that they're releasing the sequel to the social network, The Social Reckoning? Did you see the trailer for that? No, no, I think you should definitely watch it. It's all new actors, um, but it's still by uh Andy Sorkin. He's writing and directing it. Um definitely check it out.

SPEAKER_02 6:28

I I have zero desire to watch anything by that guy because I watched uh the first movie, The Social The Social Network, thinking that it was you know, like um based on a true story. Like I thought everything in the in the movie was real, and uh and I thought it was such a great movie. I uh I loved it, uh, thinking that all of those things had happened. And then I went and uh did some research and realized that the whole thing was made up, like literally the whole thing was made up. There was there was like a couple of uh inklings of truth that they sort of like had hung their hats on, but they made it seem like most of the movie was based on depositions, and it was not, it was like just completely made-up stories, and I was very disappointed at that time, and then he did a movie uh about Steve Jobs's life.

SPEAKER_01 7:16

Steve Jobs, I remember you complaining about that.

SPEAKER_02 7:18

Oh my god, it was it was horrible because like I knew Steve Jobs' life in depth, and you know, like the whole story of Apple and all of that, and just I could not even come, I could not even watch that movie without wanting to throw up. It was just so bad.

SPEAKER_01 7:33

I mean, that one it was not to get too off track. It was an interesting uh artistic choice because basically he had all these major events happen during Apple keynotes, which like the Apple keynotes and the major events that happened in Apple's history did not line up like that.

SPEAKER_02 7:48

Um not only that, the major events were all made up, also like or or significant portions of them were. If you want an accurate documentary, there was one that um uh who's that actor? Ashton Ashton Butcher? Yep, yeah, he he did Steve Jobs, and oh my god, that one nailed it. And what's funny to me is that the critics railed on that one uh on Steve Jobs' life, which totally nailed it. Not only did he look exactly like Steve Jobs, the the other movie, the actor looked nothing like Steve Jobs, but he captured the essence of who he was, the movie was accurate in its like details. I mean, everything about that movie was accurate versus the other one, which was like complete fabrication. But uh the Ashton Kutcher one is the one to watch, even though it's poorly rated relative to the other one. But um, if you want to know the real story, Ashton Kutcher's story or Ashton Kutcher's Steve Jobs version of the movie.

SPEAKER_01 8:46

Um okay, moving on to the sale of Robinhood. I believe not that we ever really know why a stock's going up or down. I believe stock uh Robinhood is going up today because they announced that they were doing 10% uh employee layoffs.

SPEAKER_02 9:01

Um so that's quite possible. So that would uh decrease their expenses long term and uh increase their profitability, which uh would which makes sense. Uh Meta announced the same sort of thing a couple weeks ago, their stock went down as a result. So you never know uh what might happen, but uh some of it might have been execution style.

SPEAKER_01 9:26

Um yeah. Um okay, so for my portfolio, I'm pulling it up. Uh I just did one sale of again Rocket Lab, and for mostly the same reason I mentioned last week, which is someone has to sell Rocket Lab, either you or me every week. That's what we've been doing. So if you're not going to sell, I'm going to sell. Um, uh, like I said, if you're if you're watching the YouTube video um or the live stream, in in my comment of the sale, it says this is probably my last one for a while. Um, and again, I've just wanted to uh let go of some Rocket Lab before the SpaceX IPO. So this was Thursday of last week. Um, I sold roughly 10% of my position at $110 for a 2,700% gain, which is crazy. And at the moment, that seems to have been a good move. I mean, Rocket Lab did move up to like 115 right after the IPO. I think it was maybe like pre-market. Um, they were at 115.

SPEAKER_02 10:29

I was gonna thank you for selling selling Rocket Lab.

SPEAKER_01 10:31

So that it's like uh inevitable. Um, but yeah, so far it seems like it was a good move. I'm sure and I hope in the long term it was a terrible move, um, being that I still own plenty of Rocket Lab shares. Let's see. Yeah, it's 12.75% of my portfolio. It's my largest stock holding, uh, third largest position. Nice.

SPEAKER_02 10:54

So SpaceX while you have that uh open real quick. Is did SpaceX have its first down date today? Is it over for SpaceX? Yeah, it's they were down five percent. Okay, yeah, that's interesting, but still up uh what close to 40 25 roughly. Um at least in the week. Yeah, yeah. So SpaceX IPO has happened. That that was one of the top should we be talking about that now?

SPEAKER_01 11:26

Or do it? Yeah, let's do it.

SPEAKER_02 11:29

Um it they they got fully sold, stock shot up from their uh from the IPO price. It's up uh what uh how many percent did you say? I I thought it was up more than that.

SPEAKER_01 11:40

I guess one 135. Oh, if it's I think this uh uh savvy's basing it off of it looks like 150.

SPEAKER_02 11:47

Which would have been probably the first trade. So the cheapest you could have probably bought it for would have been 150 on the open market, as opposed if you didn't get any IPO shares. But if you got IPO shares, then you're up further than than the 20 20 something percent. What is it? 26. But if you bought it immediately when it was available to buy, you're probably up 26% still, uh, if you held on to it. But uh, so this you know, this is one of those things where you know it's kind of hard to know what's gonna happen with the stock. Like and what what's fascinating about SpaceX is that I now have had so many people ask me about SpaceX who don't normally invest in stocks, which is one of those times when you know, like you know, when the uh wrong people are asking you about a particular, you know, about Bitcoin or whatever, it might be it might be a time that uh uh things might have been overhyped or whatever. Yeah. So this is uh oftentimes compared to, you know, what if you had bought uh you know Amazon at IPO, everybody thought it was overvalued, or Nvidia at IPO when everybody thought it was overvalued. Um, and everybody thinks SpaceX is overvalued, and you know, I'm gonna go ahead and buy it at IPO anyway. Well, the difference is that when uh like Amazon uh IPO'd, it IPO'd at roughly $400 million market cap. Uh and uh at the time, so the largest companies in on the public market were valued at you know $150 billion market cap. So there was a huge delta between where Amazon IPO'd and the largest companies in the world, right? There was over three, four hundred time delta. Um and with SpaceX, it's IPOing at you know roughly two trillion dollars. The largest you know company in the world is Nvidia, which some people think is overvalued, at 5 trillion. It's only two and a half times larger. You know, the largest company in the world is only two and a half times larger. So SpaceX, and by the way, it's the the two trillion actually starts to compare. Once you get into the trillions in terms of market cap, it starts to compare to the GDP, you know, like the GDP is only the entire spending of the entire country is only in the 30-ish billion uh trillion dollar uh range. So once you start comparing to that number, things can't really go over a certain amount, you know, or the entire market cap of all of the companies combined in the stock market is roughly you know in the $60 trillion uh uh range, right? So uh again, you're already comparing size-wise to the entirety of the market. So SpaceX does not have the ability to run a hundred times, for example, in the same way that Amazon has ran you know over uh a thousand times, right? So uh those things are not comparable. Can SpaceX go up and double from here or triple from here? Yes, over the course of the next five years, 10 years, or whatever. Uh it could even go up further than that. Uh, but but you know, having a similar sort of return as if you had gotten in at the IPO prices of Nvidia or Amazon when people thought those companies were overvalued, this is not gonna have similar results. You know, just putting those things out there, even you know, that's almost like definitively true, unless we have this massive inflationary event that occurs that causes the dollar to basically be worthless, in which case everything will skyrocket in price, everything will inflate, yeah. Right. So you know, you it would be hard for it to have a higher value than the entire market cap of all companies combined. So, you know, just a little caveat there for SpaceX and asterisk.

SPEAKER_01 15:42

What do you so in uh this week's news, they acquired Cursor. I think it came out uh in April that they were doing a deal with Cursor that gave them the option to uh acquire them, but like it was for a while from now, and they ended up executing much earlier. Um do you think that's a smart move on their part?

SPEAKER_02 16:05

Or absolutely that's a brilliant it's a brilliant move. First of all, uh they were struggling with their with their own AI efforts with uh with Grok and uh having Grok have any coding skills whatsoever. So um that was like basically lagging behind quite a bit. Uh Cursor had uh the opposite problem where they actually had pretty good uh access to code, but they didn't have enough access to data center uh capacity and uh AI chips. Uh, and uh they can now use um uh Colossus, uh SpaceX's AI data centers for training purposes. And they have you know, cursor being focused on code uh is going to be able to utilize that data center availability significantly to make their own product better, and their revenues are going to flow through XAI and therefore SpaceX. So that's a brilliant uh purchase, in my opinion. And then to be able to purchase it, instead of looking at it as like, oh wow, $60 billion is really expensive for cursor. Uh, if you look at it from the lens of, well, $60 billion is only 3% of the cost uh or of the market cap of uh SpaceX, well, then it's extremely cheap. You know, they 100% should be doing this deal for 60 billion, or even, you know, even if they paid 100 billion, it would have been worth it because it's all it's an all-stock deal, and therefore they're only giving up 3% dilution to gain this uh this cursor asset, which is worth significantly more than 3%, in my view.

SPEAKER_01 17:38

So and and to put um that 3% move more into focus, uh SpaceX dropped five percent today, so it's more they dropped more than the cursor deal. Right, exactly, exactly in just one day. So it's a it's uh you're totally right, it's a nothing acquisition for them. Um thoughts I have nothing from a cost perspective, but it will add significantly from an asset perspective. Yes, some some thoughts I have going into it is one cursor has their model called Composer, and obviously uh SpaceX has Grok. So I'm interested to see if they end up merging the two or if they maintain two different models. I would assume they're going to bring them together at some point. Um and then I hope, and I think the right now the way Cursor works is you could use pretty much any model you want within uh within cursor. And I I hope they they leave it that way and they don't force you to use uh grok or composer or whatever they're gonna go with. Um, because if they do, they're gonna have a lot of people leave in Exodus. But right again, I just don't see that. I don't think they're gonna do that. Yeah, I don't I don't see them doing that. Um, which leads me to my other point.

SPEAKER_02 18:55

Uh or yeah, where we're well the the smart thing to do, and I suspect this is exactly what Elon is already planning on doing, is to make uh cursor as good as the best models that are already out there, like Opus or whatever, uh and then just make it significantly cheaper. And then you would be, as a cursor user, you would be inclined to just use a cheaper model that does just as good or maybe even better. Because cursor does have access to a lot of code. People are using it to write code, and I suspect part of the terms of agreement with cursor is probably that it can use your code to train better models. Uh, and therefore, you know, their access to code is pretty significant, uh, probably much greater than than most.

SPEAKER_01 19:40

This is what I think is the interesting part is not only in theory can they train the models on what you're coding or programming, they could train the models on what you are with the prompt you are sending to Opus and then what Opus is returning back, right?

SPEAKER_02 19:58

Oh, yeah, that's a that's a great point.

SPEAKER_01 20:00

So so they could see what all of these models, how all of them work. Um that's a great point. There's a very interesting opportunity here. Again, to your to your point, I don't know what's in the the user agreement. Um, what if they can and can't do, I don't know if that's gonna stop them necessarily. Um, but uh I I do expect grok or composer to become significantly better um than uh these other models, you know.

SPEAKER_02 20:34

Yeah, if they can go down the training. That was a great purchase for SpaceX. I mean, we already kind of knew it was probably going to happen, uh, even pre-IPO, as uh they had announced a deal back in April, uh, that they had uh the option to buy them and they had made a significant investment investment in them. Um, but yeah, so I think in my view, this makes SpaceX more attractive or you know, like uh valued more than it would be the day before they made this deal. Uh and in fact, at the two trillion dollar valuation, they should they should try to buy as many things as possible. Uh if they can get yeah, and if they can get Tesla, uh, you know, for uh for right now, even if they paid a 10%, 15% premium for Tesla, uh, they could get it for roughly 1.6, 1.7 trillion. So, you know, they could get it for about 45 less less than a 50% dilution uh and quadruple their revenue. Right. So, and of course, there's like synergies that would happen with Tesla. So this might be a uh so the the the plan all along, anyway. But um one of the uh thoughts that I had is that Elon has way more shares of SpaceX than he does of Tesla. Not to mention SpaceX has the super voting shares as opposed to uh Tesla. Tesla's shares, which are just common common stocks. So uh with Tesla, he currently only has like under 15% voting power. Um, with um with SpaceX, he has 80% voting power. He owns 40% of the company, some something along those lines. Um, so you know, with SpaceX being valued more and more, and Tesla ideally being valued less and less relative to SpaceX, that ratio is actually to Elon Musk's benefit when if they merge, right? Which has been speculated that they'll eventually merge. Um, so the higher the SpaceX valuation, the better it is for Elon Musk because he gets to maintain control uh with super voting shares that uh of SpaceX, which is what his shares are. Uh and he could, you know, post-merger, he could even sell a significant chunk of his SpaceX and still have super majority share. So uh super fascinating thing to watch there. It also kind of interesting, he also hasn't been pumping Tesla in the in the way he normally does. So he's now just pumping SpaceX for the past few months, right?

SPEAKER_01 23:11

It it also um makes sense for SpaceX to acquire Tesla because they now own Grok, and Tesla is more and more focused on robotics, where Grok is going to be more critical. So it's not like it's a space company acquiring a car company, it's a uh it's an AI company acquiring a robotics company.

SPEAKER_02 23:37

Right, right. Well, you know, it's it's kind of interesting. One of the things that um Elon said, uh I think it was two or three years ago, is that he didn't want to do all the AI stuff under Tesla if he wasn't gonna control Tesla. And that was part of his reason for asking for such high compensation. Um, but he ended up sort of like doing them not under Tesla anyway. And his excuse for that was because, well, the talent was going to leave this giant company and go elsewhere and do do these things on their own, kind of like this that AI startups were doing. So to retain the talent, again, this these were Elon's explanations. To retain the talent, he created XAI as a separate entity uh that uh that you know then recruited the talent to do AI-related work, but then later merged that with X, which was Twitter, um, and then merged all of those with uh SpaceX. Uh and now all of it is under this massive company again, which is probably going to, you know, like uh merge with Tesla. And he will have that control that he essentially wanted and was complaining about that he wouldn't do the AI stuff under Tesla if he wasn't gonna have control. So ultimately he got to his goal, or he will get to his goal once that merger happens. Um and uh all the AI stuff is under his exact control, like there, there is he's his supermajority voting power, uh, makes sure that Elon has full control over everything under SpaceX.

SPEAKER_01 25:15

What do you think of Tesla or Tesla? What do you think of Elon being the first uh trillionaire?

SPEAKER_02 25:21

That that part doesn't bother me. People think that like I criticize Elon because I'm like anti-trillionaires or something, I'm like some Bernie Sanders type of viewpoint. No, I I'm not a socialist. This is like I I think that entrepreneurs are uh what the the people who are like solving the real problems in the world, and um I don't think that is a problem in my perspective. The the uh issues that I have with uh Elon is that you know he was already on this trajectory of being becoming a trillionaire. And by the way, he's a trillionaire, irrespective of his comp packages, both at Tesla and at SpaceX, because those comp packages have not actually come to fruition. But the fact that someone who was on their way to become a trillionaire anyway, because they had motivation because of their existing ownership in these companies, asking for additional trillion dollar comp package at Tesla and another trillion dollar comp package at uh SpaceX, which is what he essentially has, that just seems excessive, right? Like no other founder in history has ever asked for those things, right? Jeff Bezos, Mark Zuckerberg, Bill Gates, Larry Page, Sergey Brin. Like none of these guys have ever even taken like a tiny, tiny fraction of uh of additional uh compact or additional shares in general, uh, once they became billionaires, but certainly not uh anything egregious like this. So that's the part that bothers me about it, but not the fact that he's a trillionaire.

SPEAKER_01 26:58

Yeah, I also have no issues with it. He built real companies with real value, and the market is saying, whether it the market's right or wrong, that his shares are worth a trillion dollars. So you know, like I think it's totally fine. Moreover, it gives me a little bit of hope if there is an individual that could be worth a trillion dollars. Well, then I could be certainly worth a billion dollars, right? That should be easy. So I I do like that.

SPEAKER_02 27:28

Um what well let's move off. But go ahead, go ahead.

SPEAKER_01 27:37

Okay. Uh one thing I do want to also just note is technically he's really not a trillionaire. Like he's a trillionaire on paper, but if he ever wanted to sell those shares, the the share price would not remain at I forgot what the price was, uh like $200 for SpaceX, it would tank because there would be uh uh too many shares on the market. Um, so he can't tack, he can't, plus it would give a lot of people um a lack of confidence in those companies to necessarily buy uh the shares from him. Um so he can't sell it true.

SPEAKER_02 28:19

Yeah, I mean, like he can't sell all the shares, that's for sure, right? Like that's true also for like you know, Jeff Bezos or Mark Zuckerberg or whoever. Um but but like for example, he did sell $50 billion worth of shares in less than a couple of years of Tesla without Tesla's stock price getting impacted in any significant way. Um, so you know, at some point he might choose to take $100 billion off the table. And $100 billion is a lot. Like that's the yeah, yeah, it's definitely a lot.

SPEAKER_01 28:50

I'm just saying, like, you know, P you hear a lot of negative commentary of like no one should really have a trillion dollars that you could do like too much. And like technically, yes, he has a trillion dollars on paper, but he doesn't have access to the trillion dollars, right? Um and even if he didn't sell shares and he was just taking loans, you know, off of using his shares as as collateral, like yeah, you'd have to pay back. And also, um, no no bank is going to lend you a trillion dollars. So like it's a good headline, and like, yes, technically on paper it works out, but in reality it doesn't.

SPEAKER_02 29:29

So the criticism comes from a lot of people who don't understand how all of this stuff works, right? Like, so they they're like they claim you don't pay any taxes relative to a trillion dollars, you don't pay any taxes. But the reality is that he's also paid you know over $10 billion in taxes that year that he sold like $50 billion worth of stock, uh, right? So um he he's paid more taxes than the vast majority of people. Uh uh I think there might be one or two people whom who are at the same level, uh, maybe Bill Gates, maybe Jeff Bezos, but um not very many. Um but yeah, absolutely. You're absolutely right. I think from a, you know, this is getting way off topic, but from a taxation perspective, I think you could argue that maybe people um could pay more taxes when they sell their shares, or uh that uh maybe based on the assets that they own, uh they have to they're forced to sort of like pay 1% of taxes that they would have to pay if they were to sell it. Uh you know, you if you were to sell it, you'd pay 20%. Maybe you pay 1% per year uh while you're holding on to it on just the gains, right? So something like that might be might be kind of interesting. But from a taxation perspective, I think there is some like validity from a tax perspective on how we could improve things, but most of the criticism just comes from like if you have a trillion dollars, why don't you just solve homelessness or whatever? You know, it's like dude, you can't spend a trillion. And and then, like, that if that would have already happened at the billion dollar mark, which is what you know the all the criticism used to be at the billion dollar level, well, then we we wouldn't have any of this wealth to be able to tax all these rich people so that you know you we could pay for stuff. So, anyway, getting off the soapbox of taxes for a moment, we can move on to other topics. Okay, but let's you know, if people are interested, by the way, like there's a lot of tax-related topics that we could talk about that might be kind of interesting, but you know, oh yeah.

SPEAKER_01 31:33

I no joke, I love talking about taxes. Um, I just think it's fascinating.

SPEAKER_02 31:38

So we could definitely do that because I do think we have an unfair tax system, by the way, but you know, that's for another day. Yeah.

SPEAKER_01 31:45

Um, okay, let's talk about Micron. So they're reporting their earnings uh next week. Let me pull up their earnings chart here. Perfect. Um, I think they're reporting next Wednesday, so we'll probably cover that live.

SPEAKER_02 32:03

Uh I like this new feature. We we have uh two bars now of uh future projections. So what is the second? Okay, so we have Q3 2026, that's the quarter that they're expected to report next week. Yes, and it's now expected to be 34 billion. Yep. Wow. What was their guidance? Their guidance was not 34 billion, right? Their guidance 32 to 34 billion. Okay, but now the market is expecting it to be on the high end of that guidance that they had provided.

SPEAKER_01 32:32

Slightly above 34.4 versus 34.2 uh in guidance.

SPEAKER_02 32:39

So the market is saying they sandbag basically. Yes. Um, okay, and then and then the or the analyst, I should say, not the market, but then and then the analysts are also estimating Q for 2026 to be 40 billion of revenue. Yeah. Basically at a hundred and sixty billion dollar run rate. Wow, that's amazing.

SPEAKER_01 33:00

Um, yeah, and we'll see how that changes after earnings next week. Um, but it seems like the growth is not stopping, or at least that's the expectation.

SPEAKER_02 33:11

And shouldn't the cyclical aspect of this company have caused the growth to already have stopped a long time ago?

SPEAKER_01 33:17

You know, okay. I hinted at it last week's episode. I have a cyclical topic for us for Micron, but I'm saving it for a different day when we don't have anything to talk about. I have a really fun cyclical topic. But yes, to your point, what when is the cycle stopping? Yeah. There's no evidence that it's stopping anytime soon. Okay. Um and then EPS. Yes, EPS. EP the estimate is that it's gonna shoot up from um this past quarter was eight dollars sixty cents.

SPEAKER_02 33:52

And now no, no, eight dollars was the estimate. They did 12 something. Yeah.

SPEAKER_01 33:58

Yeah. So it was uh 1220. The estimate of last quarter was 860. Um, and now they're expecting it to, analysts are expecting it to shoot up this quarter to a little over $19. Um, and continue to grow from there. We have actually four quarters of of data for EPS here. Um in regards to interesting. Yeah, sorry. In regards to guidance, it's looks like it's kind of a similar story where uh Micron is guiding that EPS will be $18 to uh $18.75 to $19.55. And again, the estimate is slightly over the higher end of the guidance at $19.63.

SPEAKER_02 34:39

And they'll probably beat both of those as well, both the um revenue estimate and the uh even.

SPEAKER_01 34:45

So this this is this is my question. Is obviously if they miss expectations, I would I would assume that's not going to be good short term for uh their stock price. But even if they beat expectations, because I feel like the market is expecting the world for Micron right now, even if they beat expectations, is there a chance that the stock price goes down? And do they need to there is no chance the stock price can go down? No, I'm just kidding. Uh yeah, so like do they have to significantly beat for there to be a real move here? Is too much priced in, or what are you kind of expecting for next week?

SPEAKER_02 35:28

I'm never surprised anymore, uh, based on what I have seen in the past, right? So two quarters ago, Micron beat and the stock price shot up. Um, last quarter, Micron destroyed their estimates. I mean, destroyed, but then beyond destroying their estimates, they raised the guidance beyond anything anyone had expected for this quarter that we're in that they're about to report on next uh next week. And the stock tanked from $440 down to 320. And this is why I was talking about were we punked by like analysts or like what the heck happened? Because the stock tanked for the next 10 days, but then it's shot up from $320 to $1,000, what is it, $1,080 right now? So roughly it has tripled, more than tripled from the $320 price range, uh, almost three and a half times, uh, in in just such a short period of time. And there hasn't been another sort of earnings report for them to be for the market to say, well, they they came out with another earnings report, that's why. Um, so nothing surprises me anymore. They could beat stock could be down, they could beat stock could be up. What would surprise me is if they miss, um, that would be a shock. Uh, and I think uh if they miss, uh, not only would it be a shock, it would probably hurt the stock pretty significantly. Um, as someone who has more than 30% of my portfolio in Micron, I hope they don't, I hope they don't miss. Uh, but uh, but if they beat and the stock goes down, I'm just gonna look at it as more attractive again. I'm not sure I would buy more because again, it's such a huge portion of my portfolio. But if they miss and it goes down 50% or something, ridiculous, I would probably buy more. Um just just because it would become so attractive again. It it just doesn't make sense. So um, so yeah, I'm I'm fully expecting them to beat, but I cannot predict what the market is gonna do based on that beat.

SPEAKER_01 37:31

Okay. Uh we we need to get to listener questions because we have a lot, but before we do, I just want to hit on some of the older positions that you've uh sold in your portfolio.

SPEAKER_02 37:43

So shoot, let me okay what well I was gonna say, should we get to micron related listener questions now so that we can put a micron segment together?

SPEAKER_01 37:55

Um Adrian, do we have uh micron questions?

SPEAKER_00 38:00

I was just gonna, I was just typing, we don't really have micron questions as many very many uh actually no micron questions that we're okay.

SPEAKER_02 38:10

Then then let's let's move on. Yeah, good.

SPEAKER_01 38:15

Nice. All right, okay. So uh let's I know you wanted to hit on SMCI, Uber, and American Eagle specifically. Which one do you want to talk about first?

SPEAKER_02 38:28

Uh oh, of the past positions. So the most recent uh past position, what one of the one of the things that happened is I sold American Eagle at around $18 when their uh report, their quarterly report was like not super interesting to me anymore. And it felt like they could not keep the momentum from the Sydney Sweeney ad campaign going. Um, and then of course the stock shot up from where I sold it to what $26, $27 a share.

SPEAKER_01 38:57

You sold it around $17.50 and it went up to 27.

unknown 39:01

Yeah.

SPEAKER_01 39:02

Almost 28, actually.

SPEAKER_02 39:04

Yeah, it's it was fascinating to sort of to sort of watch. But then now the stock is back down to below um what I had sold it for, which goes back to sort of, you know, they they couldn't keep the momentum going, which you know, and then it uh the whole retail space being outside of my wheelhouse. Um I have no regrets there, right? Um Uber was another company that uh I held for a long time. It I think it on average it trip tripled for me, uh, my Uber investments. And then my last sale of Uber was around, I want to say in the 90s.

SPEAKER_01 39:39

If you click on that minus sign, it should tell you exactly, right? Uh well that one's 83, but there's some hiding behind 86. I mean, I could also scroll down 90, yeah, 90 on the so um and then it went up higher uh as well.

SPEAKER_02 39:56

It went all the way to 100, almost 100, and then now back down to the 70s. Now the problem with Uber is not that it's not a cash-generating machine, it still is, and it's a great business, but they're uh the expectation of autonomy taking over Uber's business down the road is uh is pretty high. And then Uber's uh strategy of basically partnering with all the autonomous you know, uh car companies uh is uh is not being received well by the by the market, and it's not being received well by me either, which is why I sold it, right? So um I think that's the reason that Uber is down, but you know, and then what was SMCI was the was the other one. Uh and that that one the reason was because I uh lost trust in the uh founder or CEO. So um, so yeah, SMCI was uh uh I think I sold it. What was that last uh minus sign there? I sold it for a slight loss on on average.

SPEAKER_01 41:01

Uh I think I only lost like 1.8% loss. Um, and it's the same story where the sh the stock did go back up to $57, um, yeah, and then has since gone down and is now at $27. Yeah.

SPEAKER_02 41:19

Yeah. So uh interesting. And then um Netflix was another one that I held uh and it was a great investment for me as well. But then once it became overvalued, is when I I sold it and it's down pretty significantly from yeah, but you still would have been up.

SPEAKER_01 41:36

This one's a little bit yeah, it's like last $76. Your last sale was $61.

SPEAKER_02 41:42

Oh, okay. So yeah, yeah, still would have been up, but but yeah, I mean, in during that time, I've been in other things that have much better performed right than Netflix has. Okay, like Rocket Labor or Micron or whatever, or Bumble. Bumble has uh gone down significantly. Yeah, that's we don't talk about Bumble. No, it's just gonna be Bumble is still one of my favorite. I feel like Bumble is eventually gonna be like one of my great investments.

SPEAKER_01 42:13

Yeah, I can't wait for the stock to turn around at some point. Uh just it's it'll be a nice I told you so. Um, to everyone on Twitter. Okay, let's let's jump to listener questions. Adrian, what do we have?

SPEAKER_00 42:31

Hey guys. Um okay, one of uh here's let's just dive in. Um it says, hi Hamid and Dustin. Hope you're doing good. What is your long-term, short-term view time frame normally of a stock?

SPEAKER_02 42:50

Okay, so um I'll go first and then maybe Dustin, you can uh add to it as well. But um basically uh what I have found is that the market, okay, there's a uh common saying in the market that the market can be irrational longer than you can be solvent. That's a that's a very uh very great statement because a lot of times when a company is um uh very overvalued or undervalued, people think, well, if it's undervalued, I'm just instead of just buying the stock, I'm gonna buy options and load up on this thing and bet that it's gonna go up and the market is gonna correct. But the market can be irrational longer than whatever length options you buy. And in fact, that has happened to me before where um where uh you know I have given myself on on things that I've thought is like severely undervalued. Uh, and I've bought options for giving myself one year, thinking that okay, like uh after a year it's gonna the the stock will adjust itself, or even two years in some cases. And uh sure enough, the market has. Shrugged it and like been like still undervalued two years later. And then of course it shoots up after the uh stock options expire. So those lessons I learned early on, uh fortunately. And um and then you know, when when you learn those lessons, you re realize, especially if you were correct and directionally on uh on you know, like maybe a company is undervalued or overvalued, um, then um then you start thinking much more long term and uh a willingness to hold on to a stock for years before it actually uh materializes, assuming the story doesn't change uh and get worse during those years, right? So uh a perfect example of that is a stock that uh we just talked about Bumble, but another one in my portfolio is Rivian, right? Rivian have been accumulating for more than a couple of years now, at um anywhere from like I think $11 maybe on the low end of what I have purchased it for to as much as $20, uh $20 on the high end. And it's still trading in that same band uh and it hasn't gone anywhere after a couple of years. But the company has just continued to get better and better and better, and it's executing really well. So, you know, who knows how much longer I might have to hold on to it. And of course, there's always the possibility I'm wrong, but but my perspective is not like angry at Ribbian as to why it hasn't gone up. It's just that, like, oh, I came into it thinking that it might take years. It took Tesla five years. I had held Tesla for five years before it finally shot up in 2020. Um and and during those previous five years, it was just like you know, uh playing in a band between $150 a share and $300 a share would go all the way up to $300, fall back all the way down to one $160, $170, whatever it was. Uh and it was very frustrating. So, but if you have a long-term perspective and the company just keeps getting better during that time frame, then it makes it a lot easier to digest the um the ups and downs. So I know that was a long-winded uh answer to your question, but hopefully that that's helpful.

SPEAKER_01 46:12

Yeah, from my perspective, I don't think too much about the short term when I'm investing. Um just because it's a lot, at least for me, it's a lot harder to be right in the short term than it is in the long term. Um eventually things tend to work themselves out. Um but and when I think about the long term, I typically I I always give it like a 10-year time frame, but that doesn't necessarily mean I'm gonna hold a stock for 10 years and um it could be shorter, it could be longer. Um, but typically just the for the mental exercise of it all, I think about where things will be in 10 years' time.

SPEAKER_02 46:51

Yeah. Actually, using that 10 year sort of like uh analogy, a great question that I often ask is can this thing 10x in 10 years? And if the answer to that is yes, then then it becomes like much more interesting to me. Adrian, do you want to move on? Yeah, yeah.

SPEAKER_00 47:08

Okay, here's a fun one. Hamid and Dustin, you have the chance to have dinner one-on-one with any company founder in history, dead or alive. Who are you choosing and why?

SPEAKER_01 47:19

Dustin, you go first. Easy. I'm choosing Hamid to get some brownie points. No, um I you know, my first the I first go to like Steve Jobs, um because he's fantastic, but at the same time, I feel like it's a scenario where like you don't want to meet your heroes, especially with all the like crazy stories you hear about him. Of like, I don't want him to be uh rude to me, to put it lightly. Um you could interview interview him, right? Uh it would be interesting. Yeah, pick his brain. Um honestly, I I would also love to get dinner with um Whitney Wolf Hurd, just because I feel like we could talk a lot about product, um, and there would be a lot of overlap there. Um, but those those are the three people that come to mind.

SPEAKER_02 48:13

Um so for me, Steve Jobs is definitely on the top of the list. Uh, Elon Musk would be another, probably uh Steve is higher on the list. Jeff Bezos would be on the list, largely because there's so many great sayings that Jeff Bezos has as well. Um and Steve uh also like there uh I've watched almost every minute of publicly available interviews with Steve Jobs, and there are so many things that um oftentimes I'm referring to something that Steve said uh at some point or another. And and at one time when I was running Axosoft, people were just so sick of me talking, like quoting Steve Jobs on uh on something. Uh, but he had like great sort of like responses to like deep philosophical questions, and like the way he would answer something might be like very it was obvious he had like had a lot of deep discuss uh thought about it, the the subject before answering it. So um one of my favorite interviews with Steve, uh, which is roughly an hour long uh and publicly available now, um, is uh an interview that um this guy, Robert Kringley, did for uh Triumph of the Nerds, um, which was a documentary made in the 90s, fantastic documentary about a three-hour documentary of the PC revolution from the 80s all the way up to 1995. And Steve Jobs is a huge part of that documentary, but so is Bill Gates and like many, many early sort of pioneers of the PC industry. And uh and then after he died, he he which was a fantastic set of interviews of clips of Steve Jobs in there. But after Steve died, Robert Kringley published a full one-hour interview because he found a tape, the original tape of uh his interview with Steve, and that had even more gems in it than what was in the documentary, which was fantastic. But um that one was a really good one. There's like lots of others, but Steve would probably be on the top of my list. Yeah, he was one of a kind.

SPEAKER_00 50:20

Should we move on?

SPEAKER_02 50:21

Let's do it.

SPEAKER_00 50:23

Okay, this is in reference to the Fed chair meeting. What is your view on Warsh and today FM oh F O M C I don't look at the macro uh very much at all.

SPEAKER_02 50:39

In fact, I did not even know there was an FOMC meeting today. Um, I probably missed it just because I'm traveling, but um, but it's also not an important thing from my decision making. It doesn't apply to you because you're international right now.

SPEAKER_01 50:54

It still applies to to the markets, so you know. Um no, they they kept rates the same. Um I my opinion of Warsh, I mean, I'm positive to optimistic. Uh I they they did exactly what I expected them to do and what I thought made the most sense uh keeping rates the same. But um my views will definitely develop over time as he's he's in the position longer.

SPEAKER_00 51:25

Ready?

SPEAKER_01 51:26

Yeah, yeah.

SPEAKER_00 51:27

Here's a new one. Hi, Hamid and Destin. Quick question. I see a trend of all hyperscalers, Microsoft, Amazon, and Meta being sold in the last few weeks, maybe due to the high capex. When do you think this drawdown ends?

SPEAKER_02 51:44

Um, it's again, it's hard to say, but um I I think that um the market is looking for good results from the standpoint of free cash flows. And you know, the market has been somewhat concerned about free cash flows in particular. Um and the companies themselves have not been concerned about that. So as witnessed by Google, for example, going to the markets and uh selling $80 billion worth of stock so that they can invest even more in uh in CapEx. Um so in you know, what's fascinating to me is I consider the leaders of these companies to be some of the smartest people in the world. So there's this sort of like um tug and uh or push and pull between the smartest people in the world who are thinking that all this CapEx is worth spending on. Uh, and then the market's kind of saying, yeah, but what about free cash flows? And um the smartest people in the world are saying that free cash flows are going to come down the road, as you can see and witness by the rapid growth of our revenues. Um, and the market is sort of like saying, Yeah, but show us the free cash flows anyway. So, you know, as the uh as the growth rates continue to improve, as they have been for Meta, Microsoft, Google, for example, Amazon, uh the free cash flows are simply gonna come. And the moment that happens, or uh um the increase in free cash flows. The moment that happens, uh, I think the market is going to start recognizing that uh they may have been right. The leaders of these companies may have been right. Now, if that doesn't happen, then the market might punish them even further. So uh both of those things are possibilities. But it's gonna just basically come down to quarterly reports and earnings reports.

SPEAKER_01 53:42

Um I think it's too hard, at least for me, to answer. Uh, like one, it's hard to know why these stocks are being sold off. Um, and two, it if it's hard to know when the sell-off will will stop. So that is my longer way of saying, but I don't know.

SPEAKER_03 54:03

Yeah.

SPEAKER_00 54:04

Okay, let's move on to diving into Microsoft. Thoughts on Microsoft given the poor performance of the stock recently.

SPEAKER_02 54:14

I guess you kind of talked about that, but you know, I haven't looked at Microsoft personally for a long time. Let me pull it up real quick. Um so Microsoft is uh trading at a PE of 23, a forward PE of 21, uh 2.8 trillion. This is probably the most attractive it has looked for a long time. I tend to agree that this is actually pretty good. Um wow. The the estimates for uh this quarter is 87.6 billion, up from 82 billion, which was a record quarter last quarter, so up another 5 billion basically. Um, and then the estimates for the following quarter is close to 90 billion of revenue. It does seem to be crushing it uh by all measures. It does seem inexpensive, honestly, like uh just looking at these numbers. Pretty decent growth rate of close to 18. Um, I like Microsoft. I mean, I think it's it's not bad. I like Satya, I think he's a good uh good leader. Yeah, he's a great CEO. So uh it does look attractive. Uh, but you know, you know, personally for me, what between those companies, the company that I've chosen is Meta between Microsoft, Google, Meta, Meta has been my pick. Largely lower PE, faster growth rate, you know.

SPEAKER_01 55:44

So on a similar note, I'm invested in Meta, Google, and Amazon. So I don't necessarily want to be adding more Mag 7 positions. I would want to switch one out. Um, and to me, I'm more excited about Amazon, Google, and and Meta than I am about Microsoft. And that's not to say I'm not excited about Microsoft. I think they're a great company and a healthy company, but um I'm just more excited about the others.

SPEAKER_00 56:12

Okay, we've got a lot of requests in the chat for you guys to do a taxes video. Oh, um but here is a taxes question. Question for you guys How much taxes do you pay on your trims? Micron is 82% of my portfolio, and I still don't want to trim because it's undervalued, and every trim costs me 26% taxes.

SPEAKER_02 56:36

Yeah, this is a great question because uh let's say, for example, you could um you could double your portfolio every year, just just for theoretical uh uh purposes. Um and uh if you know, starting with a thousand dollars, if you could go to two thousand dollars the the the uh at the end of the year, uh if you had to pay taxes on that thousand dollars because you sold everything with short-term gains, uh if you're in the top tax bracket, you would be paying roughly 40% of you know that $1,000 gain. So the next year you start with $1,600 as opposed to $2,000. If you don't sell anything, you just buy one thing and hold on to it. The next year you have a $2,000 base and let's say it doubles again, just for sake of argument. Like if the same stock that you just held on to could double every year for this uh demonstration purposes, then the next year you have uh $4,000 instead of starting with $1,600 and doubling it to $3,200. So your gain is significantly greater. So if you paid taxes on the $3,000 in gains after two years, you're better off still than uh doubling $1,600 and paying taxes on that additional uh $1,600 of gain. So ideally, buying one thing, holding on to it for you know 10 years or longer, or whatever amount of time you intend to just hold on to to be in the stock market, that would have the best tax consequence ever because you're not paying taxes along the way. And the portion that you're not paying taxes on is also increasing in value and potentially doubling or tripling or whatever, whatever gains you're getting from your investment portfolio. Now, um, when you do sell, if you are selling long-term versus short-term capital gains, uh, that also has a pretty significant impact for most people. That's roughly double the taxes on short-term gains as opposed to long-term gains, uh, or almost double. It's not quite double. But uh, but basically, um it's you know, it's inevitable, you're eventually going to pay taxes, but it is better to hold on longer if you can get the same gains, assuming you could get the same gains from the same investment. So that's the perspective that I have on the taxes. And maybe Dustin, you can add a little bit more. Yeah, I feel like sometimes you can give a much more articulate answer because you have time more time to think about it while while I'm talking.

SPEAKER_01 59:16

I just I just kind of zone out, uh, go to my own little happy place. Um yeah. So when it comes to taxes, what I try to do doesn't mean I always do this, but what I try to do is sell when I've been holding for a year to hit those long-term capital gains. Like Hamid said, um, it's roughly half of what you're paying for uh versus short-term capital gains. Um at least that that's what's in my like normal brokerage account. I also have retirement accounts uh that aren't taxed when I when I make a sale. That's not tracked in my savvy trader portfolio. Um, but that I'll I'll move in and out of kind of whenever I feel like if there's um because there's no there's no tax uh penalty. Um one other thing to think about when it comes to like the tax picture, uh not that it's too relevant, but it is interesting, is like technically the short-term capital gains tax is the same as income tax, but it doesn't include uh social security tax. So you're actually taxed better on your short-term investment than you are your own income. Um, so you're still coming out ahead uh when you look at it that way. But if you can hold it for a year, um that is obviously optimal, but you also don't want to hold something and then you know, if it's 82% of your portfolio, not uh investment advice. But you know, you have to manage risk and and it might be worth um taking the tax hit. Or you might have, I don't know what the the remaining uh 18% of your portfolio is, but if you have some losses there, you could always offset it as well. So yeah, great, yeah, great points.

SPEAKER_00 1:01:05

Let's go. Well, we're almost to the end, but let's just do one more question. I just wanted to add one more question.

SPEAKER_03 1:01:11

Yeah.

SPEAKER_00 1:01:13

Dustin and Hamid, the two of you have very different portfolio structures. Dustin's portfolio is diversified while Hamid's is concentrated. Can you share a little on your investment investment philosophy?

SPEAKER_02 1:01:26

Yeah, I'll I'll um I'll start it. I've touched on this on some other episodes as well. But when I started out investing, my my thinking was I want to be diversified so that my my eggs are not all in one basket and um uh and de-risk essentially, you know, and and what happened is I was picking roughly, I want to say 15, 20 stocks uh and diversifying amongst a lot of companies that uh I wasn't necessarily very interested in, but I thought, okay, these are good companies that uh that I'm gonna add to my portfolio. But the what I found over time is that the companies that did best in my portfolio and were getting the vast majority of my returns were the two or three that I was the most interested in and had the most conviction in. Um and at some point, you know, you know, this is back when I still had uh my company. Um at some point I realized that uh wait a second, my portfolio is sort of like my secondary income, and the vast majority of my income and assets is in my company anyway. I can go super high risk with my portfolio and it won't matter. Uh and I decided rather than trying to diversify to de-risk, I'm just going to bet on the two or three things that I have the most conviction on. And from that point forward, my portfolio just skyrocketed and it just did far superior, far better than uh than it had previously, and uh it destroyed the market. So for the previous 20 years, before I shared my portfolio publicly on Savvy Trader, I had averaged roughly 30% annualized returns for 20 years. And most people wouldn't didn't believe me because you know, if you do the math, 1.3 to the 20th power, that's roughly 200 times. It's like 190 times or something like that. So for every dollar that I kept in, in fact, from 20 years ago, um, you know, it had become 190 dollars. Now, I hadn't kept all the dollars because you know I took it to buy a house and put down payment on, you know, like various different things. So I used up a lot of the portfolio money, but um, but for every dollar I had kept in, it had become you know significantly greater. Um, and then I, you know, have been sharing my portfolio publicly for the past four years on Savvy Trader. And in the past four years, it has uh gone up, and it just hit another record today, and it's like up over 800% in four years. So, again, like for every dollar that was in four years ago, it's eight dollars or nine dollars, I guess, if it's up eight hundred percent uh today. Now, again, like I haven't kept everything in the portfolio because I bought you know bought another house and bought other things and paid for life expenses. I don't have uh the same uh uh, you know, I don't have other income. I don't have a company that uh is you know, like the vast majority of my assets, vast majority of my assets are at the portfolio. So I'm actually more diversified today than the way in which I built my portfolio the previous 20 years, um, in that I have six stocks rather than two or three. So um, even though I am more diversified, I'm still a very concentrated investor. So that's uh that's the reason why I have been very concentrated, is because um I feel like the risk reward has been worth it for me. Uh, and uh that's also why I have a significant amount of cash, because uh my portfolio is relatively high risk, and you know, cash helps cushion that risk for me. So that's my perspective on it, and I'll let Dustin respond to that as well.

SPEAKER_01 1:05:04

Yeah. I mean, I don't I think our portfolios, they're not the same, but they're fairly similar. Like, I don't think mine is much more diverse, diversified than yours. Um, I hold three more positions than you do. Um, but what I will say is I'm actually more in line with your philosophy of holding less than holding more. Um, and I've been getting closer and closer to holding less and less um as as we kind of talk and have these discussions. Like when I started my savvy trader portfolio, I think I had double uh the number of positions. Uh so I've been slowly, you know, weaning off certain positions, and then you know, eventually I'll add more and you know, it fluctuates. Um so then the question is well, what what's the issue right now? Why why do I have you know more positions? Than I necessarily want. And the answer for me is just like lack of strong conviction. Um, so a good example is my Mag 7 positions that we talked about earlier in the episode. I own Meta, Google, and Amazon. And I think Hamid, I like how he's approaching it, where he has the strongest conviction in Meta, and therefore that is his only Mag 7 investment. And for me, my conviction is just not as strong. I like all three of these companies a lot. Um, I am more invested in meta than than Google and Amazon uh by almost double. But to me, I want I want to own all three. Um and over time, that that difference between our two strategies can definitely hurt me. There's also a world that could help. Um, you know, if if meta if meta does, you know, uh, I don't know, maybe they they continue to go all in on the metaverse and they never see a profit from that, you know, like or Mark Zuckerberger gets hit by a bus and they lose, you know, direction in the company. Like you never know what can happen. So there are benefits, um, but I'm I'm not investing with that mindset. I I am investing in companies where I have the highest conviction, and you know, the it's just I I I like all the companies. So that's kind of how I'm approaching it. But I do think my portfolio is fairly concentrated.

SPEAKER_02 1:07:33

One other thing, by the way, I realized um, you know, roughly I want to say 20, 25 years ago, is that nobody gets rich diversifying. So um, you know, you you can get rich by being diversified and slowly save over the course of a long period of time uh as you keep adding uh to your savings and uh to your diversified portfolio, but your portfolio is probably not what's going to make you rich. But lots of people become rich with a highly concentrated either portfolio or the one thing that they're working on themselves, which is their own company. So those are the two paths in which like the vast majority of people become very rich very quickly. Is like they build a company or they bet on uh you know one or two or three companies, uh, and those companies at least one of them tends to do really well. So those things are uh the way in which uh most people become wealthy. And then to preserve wealth, it makes sense to to be lower risk and diversify more. Uh, but to build wealth, uh, and this is a this is a uh common quote that I have stolen from uh um I think it's Warren Buffett who said it is like to build wealth, um you you need to be concentrated, but to preserve wealth, you need to be diversified. So you know, this is uh this is not my thing, but uh, but I did have this realization a while back, which helped me sort of like be like, all right, I can I can take the risk, why wouldn't I?

SPEAKER_01 1:09:10

So I think the the the other epiphany here for me is you don't need to own that many stocks to be diversified. Like even if we look at the main six stocks you own, you you own a car company, uh memory chip company, a social network company, like they're all very different businesses. And at the end of the day, they're all gonna move with the market pretty much regardless. Um but yes. Um but I would say you're still diversified. And to me, and what I've realized, it is that like with these index funds, you're just overly diversified, right? Where it's probably doing more harm than good. Um, not investment advice, but that's kind of where I've landed over time. Um, okay. With that said, let's let's wrap here. This was a fantastic episode. If you want to follow our portfolios, uh the link is in the description below. It's totally free um to follow and you'll get notified about all of our trades as we make them.

SPEAKER_02 1:10:20

And by the way, I realize not everybody knows this, but um Dustin and I are two of the team members behind uh Savvy Trader and Earnings Hub. So we share our portfolios for free on Savvy Trader. Uh, we were the first two portfolios to be shared on Savvy Trader because we wanted to make sure that the product works well. And uh part of the motivation behind even creating Savvy Trader was for us to share our portfolios. Or uh that was my motivation anyway, to to to uh found and start savvy trader. But uh, but yeah, so you can subscribe to our portfolios if you're interested. Um, the links are in the description or will be if they're not yet. But uh, but yeah, check them out, subscribe, let us know what you think. Awesome. Please thanks every thanks everyone. Bye. Bye.