Weekly LIVE Office Hours #323: Q&A Career/Business/Finance Topics. SEE DESCRIPTION FOR CLICKABLE Q&A

Sam. Sa. Good morning, good afternoon, good evening, and welcome to our 323rd weekly webcast. Now, if this is the first time you're joining us, welcome. If you've been with us before, welcome back. The way the call works is this is an ama, like you see on Reddit, meaning ask me anything. You can ask me business questions, career questions, investing questions, startup questions, personal growth questions, any questions you want to. My humble goal is to help you take your career, happiness, etc. To the next level. Now, before I take your questions, please keep typing them. I want to apologize for not being able to do the call last week. I was in the hospital and I want you to laugh at me when I tell you how ridiculous the reason is why I was in the hospital and operating room and all that stuff. Although everything worked out okay. So when I exercise my garage, I have an elliptical trainer and what I do is I watch TikToks, okay? And I don't want to take my hand off the elliptical trainer. So I have my phone right here and I have a TikTok ring which has a battery in it. Okay. And so I'll click to go to the next video. Right? I'm all about efficiency, as you guys know. So what I did was this. I put the ring in my pocket. The doctors were laughing, it was so ridiculous. But I put the ring in my pocket and I always have a couple of vitamins or herbs in my clean pocket pants. And what I did was I threw the, the, the herbs, vitamins in my mouth and, and I took a sip of water and I swallowed my TikTok ring. This is another one, by the way. Yeah. And so I thought, hey, man, everything is cool. Everything's fine. I. I called poison control. They said, oh, probably pass. Then I searched chatgpt and I said it could be really dangerous, maybe lethal, I don't know, because what happens is the battery has acid in it and yada, yada. So I had to go to the hospital and I spent a day or two there and, and everything is fine now. But biggest lesson today is please, kids, don't eat TikTok rings. Don't be like me. Okay, all right, let me get to your questions now. All right, first question is from Tommy J. Great to see you. How would you evaluate an organization's capital structure? Can you elaborate on what you look at and why? Yeah. So capital structure means how much debt and how much equity a company has. So usually you want that ratio of debt divided by equity to be between one and two. And whenever you See a financial ratio for the rest of your life, always think of the denominator as being the number one. So a debt to rate debt to equity ratio 1.5 means for every $1, okay? And it's important for analyzing companies. For every $1 in equity on the denominator, you have 1.5 dollars in debt. It all depends on the company. So again, 1 to 2 is usually healthy. If it's very capital intensive industry like Caterpillar that has it makes big machines and stuff, it'll be closer to two. If it's a software company, it's going to be well under one in terms of a great capital structure for consumer. We usually want it to be under two if we can't. And for those of you that are looking to buy a house and please do so if you can. It took me until my 30s so I could afford one in New York City. But you can look at a debt to equity ratio of, pardon me, of underneath two, just to be safe. And let me show you what that looks like. So this is one of my real estate courses that my clients get my website only. But you want it to be below 2, right? So liabilities divided by equity below 2. And you want to put down at least 20% on the mortgage. And a house is the best investment you'll ever make. Now let me talk about the tax savings and why big companies take on debt and why a lot of people, the richest Americans actually they own tons of real estate because of what I'm about to show you, okay? And it's my dream before I show you this income statement here, this baby, it's my dream that all of my clients, all my students make way more money in 10 to 15 years from your residential investment properties that you rent out than you do from your base salary. The richest people in the world own tons of real estate. And here's why. All right, so you get. Let me first of all talk about debt. Okay? So big companies, they like to take on debt, especially when interest rates are low. Because what happens is before you calculate taxes, you have operating profit. And if you have a lot of interest, right? You deduct that, then you calculate your taxes, you're paying less taxes. Same thing with depreciation. If you own investment properties as well, big companies like to do that, right? So a lot of debt is not necessarily a bad thing. If the debt is rating rated high by one of the reasons agencies like Serrant Poor's, Moody's, Fitch, etc. Whatever. But you want to try to keep it keep it between one and two times for a big company. Yeah. And if you have more questions about capital structure, I'm happy to go there. The most important thing though when you're taking on debt or equity even is what's called the weighted average cost of capital. And if you want, I can run through a financial model, explain that more detail. You guys are the customer, please let me know when we talk about things. All right, next question is, can you please explain how an employee owned company works and structured and its implications? Yeah, it's called an esop, Employee Stock Owned Plan. So the way it works is all employees get equity in the company. It's a great thing. And it's the way that a lot of startups work in Silicon Valley. It's a great thing because everybody's interests are aligned. We eat what we kill because if we all do well as a company, then the value of the company goes up. Another great reason for offering equity, meaning options is it's a golden handcuff. And what that means is this. If you give options, meaning stock, to employees, the way it works is you can only cash them in every four years. And that's called vesting. So it means people don't want to quit, otherwise leaving a lot of money on the table. That's golden handcuffs. Now I want to quickly mention what should you do if you're trying to get a job or you're negotiating, should you get salary or stock, I would always urge you to err on the side of asking for way more salary. Okay, Cash. And the reason I say that, and you say this, you say I want some stock, obviously, because they don't. I don't want them to think you're a flight risk. I want them to believe you believe in the company. The reason I say always take more cash is because in the unlikely event that the startup does very well. That's right, unlikely event. What they're going to do is they're going to create more shares and give them to you anyway. It's a non cash expense, it costs them nothing. Okay. And I've had a couple of questions from students or clients of mine asking how should I negotiate for a higher salary in a new job? Well, what you want to do is when they ask you what your salary is and you never bring it up until they bring it up, what you're going to say is this. You're going to say my total compensation package is X and go from there. Let me explain. So if you're working at a company right now, and another company's trying to hire you. And your current base salary is $100,000. Okay. But you have the following benefits. $10,000 health care, $20,000, 401k and 529 matching and another $30,000 in benefits. Okay? So that's 50 grand of benefits and 100 grand in base. When they ask, what are you making now? You say, my total compensation package right now is $150,000. That gives you more leverage in terms of them trying to give you a massive increase when they're giving you an offer for the company you want to work at. All right, all right, Next question I've got here is Ray wrote you say ETS for the daily trading. Volume is very important. Yes. And don't ever. I don't ever want you guys to invest in illiquid stocks or illiquid ETFs, meaning ones that don't trade very much because in the fall of 2008, a lot of hedge funds went belly up. They went bankrupt because they owned really illiquid stocks. And when they were selling it, they were forcing it down. So illiquid stocks own you in a down market and not vice versa. So you wrote, as a European, I'm choosing ETFs listed on Italian exchanges. Makes sense. Probably for tax reasons. Yeah. Talk to your accountant first. Should I look at their volume specifically on that exchange? And how. And then you gave me the ticker as well, which I'll look up. Yeah. So the rule of thumb is, is this, everybody. I don't ever want you guys to invest in any security ETF, stock, etc, if you want to own 10% or more of the daily volume, okay? And this will save you a lot in the long run, I promise you. Okay, Let me. Let me show you what that means. So I'm going to go over here to Yahoo. Finance and then I'm going to type up, first of all, the ticker for my favorite etf, which I own when I'm not sure where to put my money. Do your research first. Which is. And the reason why I love ticker. Boo. Is because it's done by. It's made by Vanguard, and the fees are extraordinarily low at only.0.0.03%. That means for every 100 bucks you invest in this S&P 500 ETF, you're only paying three pennies per year in fees. Okay? And now here for the average volume, the average volume for this is 6.6 million shares. So you never. And this is ridiculous, but you Never want to own more than 10% of that meaning 660,000 shares. Okay. And the reason I say that is because you won't be able to get out or you might drive the price down if need be. If you want to sell, let me very quickly type in the ticker you have there. Phpd.mi mi For Milan, I think. Let me see, let me try one more time. Then I'll move on. Ph. P d.mi Here it is. Here. Okay. All right, so the volume on this one is 5,300 shares per day. So what that means is do not buy more than 530 shares. Okay. And 530 times 98. It's a large amount. Yeah. Just to be safe. And you never want to just invest in etf. After looking on Yahoo. Finance, the most important thing you can do is always read the prospectus. Now the prospectus by law, okay? The great thing about having regulated financial markets is governments require companies to write what's called an investment offering memorandum. And so in my, my MBA program, my course is on my website. See description of the video if you want to talk to us, learn more. But I teach one of the case studies is meta. Okay? So I own Facebook in my venture capital firm before it went public and then I invested afterwards, going short when it first went public. It's a long story. But before you invest in a company like Facebook, you read the S1 and you get this from sec.gov, okay? This is an investment offering memorandum. Don't ever invest in any ETF without reading the investment offering memorandum. If you don't know where to find it, just type the name of the ETF and then offering memorandum or prospectus. Read it cover to cover, please. Yeah, okay. All right, next question is, what do you think of swap ETFs? Yeah, I'm not a fan because of liquidity. Now for those of you not familiar with swaps, let me give you a very, very quick teach in on credit default swaps, okay? And this, this is what happened back in the 19, in 2008 when we were within 24 hours. Bankruptcy is not working. So what happened in 08 was you had a lot of crappy mortgages and the banks were like, well, how do we sell these mortgages? So they bundled them together in a mortgage backed security and other offerings, okay? And then what happened was people bought insurance on this called credit default swaps, okay? And the insurance was done mainly by a company called aig, which almost went belly up. The problem with these things is they're Very, very illiquid. Very illiquid. So I don't want you to do that. If you do want to invest in, in a swap based etf, I want you to read the prospectus cover to cover, okay. And understand the inherent risks. Liquidity is going to be a big one because see, swaps don't change on an official exchange. Like there's no like NASDAQ for swaps. It's like two counterparties, you know, swapping risk. So be careful of that, please. All right, next question I've got is what should be the portfolio distribution between large, small and mid caps? Yeah, it all depends on your age and your risk tolerance. So if you're 70 years old, 100 minus 70 is 30. That means 30% of your investments can be in riskier investments like small caps and maybe some mid caps. Okay. And 70% in larger cap stocks or AAA rated bonds or government securities. And the reason I say that is you don't have much time to make that back up money back if you lose it. By Contrast, if you're 20, 100 minus 20 is 80. 80% of your investment should be in smaller cap or mid cap companies. And I believe in investing in companies that are a five by five. What does that mean? That means a 500% return within five years. And I do a ton of research on companies, I'm often wrong. But if I'm a little bit right and it's only up a couple hundred percent, I do quite well. So it all depends on your risk tolerance. But I don't think that anybody should have more than 5% of your portfolio in any one particular stock. ETFs, you can go a bit higher if they're, you know, lower risk ETFs, like the S&P 500, but no more than 5% in any one stock. That means if you have a portfolio of only stocks, you have 20 stocks. Okay. And I don't care if one stock has a cure for cancer. I really care about risk management for all of you. Now when it comes to portfolio diversification, I don't recommend having more than 20% of your portfolio in any one particular sector. As I mentioned in my short yesterday on YouTube. So no more than 20% in technology sector, retail sector, healthcare, financial services, etc. Okay, next question is, can you explain some go to market strategies? Yeah. So go to market strategy means understanding who you're selling to. But let me answer this a different way. So the hardest thing about starting any company is how the heck do you get customers? So there's direct and then there's indirect. Direct sales means you contact the customer directly and you sell directly to them. Okay, so for example, with my business, our direct sales is I have YouTube videos. People click a link, set up a call with my salesforce. That's direct sales, right? And that's high mark, higher margin for us. I also do it on LinkedIn, TikTok and all other platforms. And I do some paid advertising on Instagram. Indirect, and this is key. You need to have an indirect distribution channel to scale your business. These are customers you wouldn't have gotten otherwise. So for me, my indirect distribution channel is using platforms like Stack, Commerce, Udemy, Amazon and others. So you need to have both direct and indirect distribution strategies. Now, the best way to sell yourself and your products or your services is to step one, have an amazing LinkedIn profile. Okay? Step two, you want to be. You want to write articles on your LinkedIn profile once per week. Then what you want to do is you take those articles after a year or so, put them together into a book. Costs you nothing. I'll give you the template for free. Then bring that to your informational meetings or to give to customers a book. Okay? And if you think that's too much work, ask yourself, and I say this, love my heart, how badly do you want that job or that customer, et cetera. Okay, can I get a little bit of feedback here? Am I talking too quickly, too slowly? I just want to get some feedback so I can best serve you guys. Thanks. Okay, great. All right. All right, next up, Ray wrote, do you have any comments on these companies? Renjva, medspace, Omnicell? No, not at all. And the best thing I can tell you is this, always do your own research. Don't listen to idiots on television, okay? They will walk you off a bridge. And so what I do is in my programs and if you want, go to the link in the description of this video. Set up a call with my salesforce. But what I do is I teach you how to do due diligence on companies based on my, my, my, my, my work experience on Wall street, venture capital, et cetera. Okay? We analyze qualitative, quantitative and financial research. I teach you everything from scratch. What comes out of this is a one page summary. This is dummy data and a massive detailed report. Okay? And this is how you can do research on companies. What's also coming out in the next week or two is I've got a new course which uses AI, any AI product you want to do. Very, very detailed forensic, financial statement Analysis on, On, on income, on, on all the financial statements and the 10k, et cetera. And this works for any company in the world. You just type the company name. What comes out of it is a one pager, as well as a massive, massive, detailed report you can print out. Always do your own research. Um, I humbly believe in teaching my students. Whether you're a paying client or not doesn't matter to me. I just want to help. I believe in teaching you how to fish instead of providing the fish. That way you'll eat for a lifetime. Don't rely on idiots on television that tell you what stocks to buy. There's a reason why they're on tv. Because they're good salespeople. Okay. Same thing with portfolio managers of hedge funds or mutual funds. To get on TV and start saying good stuff about a stock. There's a bias there. They're good salespeople. Right. That's why they're. That's why they're on television. Yeah. Don't list anybody. They'll walk you off a cliff. Yeah. If you don't believe me, do a search for Jim Cramer, Bear Stearns. Thank you. All right, now, what I'm working on coming out next, in addition to that course I'm releasing next week is I'm releasing my most thorough YouTube vlog I've done ever. It's on a movie called Too Big to Fail. And there's going to be 20 investment lessons in there to help us invest better. Now, there's three movies that talk about the 2008 financial crisis. The Big Short, which I already did a vlog on, that's from the perspective of a hedge fund.08 perspective from a hedge fund. Margin call, which is the.08 perspective from an investment bank, Lehman Brothers in this case. And then Too Big to Fail, which is the perspective of the government, which comes out within the next week or so. Thanks. Thanks. Okay. Okay. Thanks for the feedback. James said my, my, my, my pace is, is. Is fine. Okay. I want to make sure I wasn't talking too quickly. All right, Next question is, what would be your thoughts if you see a company you've already evaluated that has insider buying and a high daily rsi? Yeah. Yeah. So when you look to analyze companies, the first thing you look at is fundamental. Second valuation. A distant third is technical analysis. So I don't really care about technical analysis mean the RSI as much unless I don't have a full position yet and the RSI is very low, in which case I will start buying. Meaning if the RSI is 30 or 20, or if it's a big position and it's way above my 5% threshold, percent of capital, and the RSI is 80, per your comment here, what you're applying, then I might take a little bit of profit off the table, especially if it's in my, my retirement savings account. But I'm very, very long term focused in terms of insider buying. That's more important to me than technical analysis. And this is part of what's called behavioral finance. And if you want to look into this more detail, there's, there's a mutual fund called Fuller and Taylor here in the Bay Area. My best friend's portfolio manager there, and Dick Fuller won a Nobel Prize in finance for behavioral finance. And what does that mean? How can you make money off this? What that means is you can always look at historical data to see if certain executives and you can use regression analysis to do this, which is a subset of machine learning, which is a subset of AI. You look at insider buying and selling by executives. And if certain executives bought stock in size, what happened to the stock one year later? And if they sold stock in size, same thing, what happened one year later? And if you have a 70% plus correlation between those two data points being the stock price, insider buying or selling, then it might be a good investment for you to look at that pattern. Okay. A lot of quants do this as well. Let me give you some examples. So when I used to work in the hedge fund industry, I used to meet with Bobby Kotick, who's the CEO founder of Activision. I met with him many times and of course now Microsoft owns a company. But whenever. And you can back test what I'm about to tell you. Whenever Bobby Kotick bought a lot of shares in Activision, a year later, the stock was higher and vice versa. Okay, behavioral finance, look into it. I promise you this will help you. A more recent example is this. If you go back to Q1 and all this data is publicly available, if you go back to Q1 of 2020, okay, the COVID crisis, it was insanity. What happened was Elon Musk bought a ton of shares in Tesla right then in the fall of 2021, I believe, six weeks before the market peaked, he sold tons of those shares, right? And then Tesla, of course, pulled back a lot. So you can always back test Elon Musk or any executive, sea level executive, usually in terms of when they buy or sell their shares. What does a stock do one year later? You can make money off this. Do the Work though, please. You have to analyze the data. Without data, you have an opinion and non investment thesis. Okay? All right, next question is how do you build a business case? Yeah, failing to plan is plan to fail. Don't ever launch a company, please, without writing a business plan. It might be the most important decision you make. And if you don't plan accordingly, you know, the following things can happen. You can lose a lot of money, your health will deteriorate, your relationship with your loved ones will deteriorate, and then your career might be off track. So let me, let me show you how you do this. So what I do is as part of my programs which you can, you can learn about in the description of this webcast. What do I do is I have what's called a venture capital boot camp and I don't let any of my clients or I encourage them not start a company without completing this first. Okay? So what this is is a business plan you complete with me. Okay? And there's tons of questions you answer down below in this Excel spreadsheet. You know, the customer, the market competition, go to market strategy, which is a question we had earlier today from Tommy. I think as well as sales and marketing, yada yada yada, most important thing is financial statements. And you're going to forecast the financial statements, okay? And I'll help you with that as well, teach you everything from scratch. Then you create a business plan which comes out of this automatically and investor slides. You have to create a very thorough business plan before you ever think about quitting your company and starting your own firm. Now for those of you that work for, for a schmuck who's paying you this much money to make their dreams become a reality, if you're frustrated, and I say this with love, my heart, I say good, I say good. Because on the side this can force you, okay, in a good way to write a business plan so you can get a better job or better yet, start your own company. And quite often my clients who start companies, they do very well on the side. They ask me, should I quit my full time job? And the answer to quit or not is based on this. The six months trailing revenue for your startup needs to be higher than your annual salary. Why six months? Because if you just take one month and annualize it like the month of December, that's not an accurate depiction of the future revenue growth your company because of seasonality. All right, next question I've got here is you say 5% per stock in a portfolio, 20% per sector minimum 20 stocks. What is the maximum both for stocks and ETFs? Yeah, the maximum position size for me at least. And I'm a steward of capital. I have a fiscal duty and a financial responsibility to make sure that I preserve capital for all my clients. I say 5% is max for any stock. Okay. And again, 20% per sector. If it's an ETF like Voo, for example, I don't mind in my portfolio going up to 10% or so in that amount. Now, a lot of people ask me about cryptocurrencies. I want to be careful with cryptos. I've done a ton of research on this. I've been on the boards of cryptocurrencies. I've owned Bitcoin since 2013. I've done a ton of work in the sector. Most cryptocurrencies are a scam. Okay. I don't want more than 5% of your entire portfolio in cryptos in total. Okay. Do I own bitcoin? Yes, I do. I think it's going to a million dollars at some point. It might go from 120k today down to 50k first. I don't really care. I'm a long term investor. All I care about is the destination and not the path. And Warren Buffett, who's. He's not a crypto fan, but when he bought Coca Cola and he bought it in 1990, still owns it today. But whenever he buys a stock like Coke, for example, he always tells himself, I'm assuming the market's going to be closed for 10 years and I can't sell this. That's what I want you to do as well. I want you to be an owner. I don't want you to be a tourist. I don't want you to rent stocks. I don't want to day trade. I want you to be a long term investor. You'll sleep better at night, I promise you. Day trading does not work. And I say it with love, my heart. Okay, how many companies do you have on your watch list evaluated and ready to buy if the stock is broken? What percent of them are small and mid caps? Yeah, the bulk of the investments I look at are smaller and mid caps. Okay. Now I do follow a lot of companies. If they pull back materially in the RSI is like 20 and I don't have a full position. Then I'll scale it as well. Yeah, I do have an extensive watch list, but don't make your watch list too many stocks. So if you work at a hedge fund and you're an analyst. If you cover 20 stocks, say the software Internet sector, you can do a lot of research and do exceptionally well. And what you'll do is you're going to write full reports and financial models per that template I showed you. But if you have a watch list of hundreds of stocks, garbage in, garbage out, you're not going to be able to master those companies. So follow fewer companies and don't ever buy a stock without doing an investment. Write up first, please. What is the Dan Mooser and other quiver strategies with 39% cat grive? I've never heard of those people. Sorry. But one thing I will say is there's no such thing as successful day trader. Find their names. They don't exist. Okay, maybe somebody did well for a couple of months or so, but it's not a repeatable skill and the reason why day trading doesn't work. And I get down on my knees and I say this because I really do love you guys and I care. Every month has 20 days the market's open, meaning 20 weekdays. You can't forecast what's going to happen in a short amount of time. Why? I don't know what Trump's going to say next about tariffs. I don't know what's going to happen in the Middle east next. I don't know what intel is going to say about guidance. I have no idea. You need to be long term focused. And we've all made the cardinal sin of selling stocks because they go down. And Warren Buffett said the New York Stock Exchange is the only store in the world where consumers sell stuff when it goes on sale. Think about that. Think about the stocks that you love. In the past, the chart was like this and it went to here and you sold it and now it's up here. I know I'm being simplistic about this, but I want, I want you to sleep better at night. I want to tell you that. Don't care about the path, care about the destination. Be an owner. Okay. Be long term focused and value companies based on your earnings estimates in five years, which I teach you in the financial models in my program. Next question is, do you follow RSI for ETFs? I do sometimes. Sometimes ETFs for me are a little bit more of a placeholder. So if I have capital to deploy, I'm not sure where to deploy it. I usually just put it in the S&P 500. And I'll be more aggressive with ticker VO if the RSI is lower. And I also look at the Vix volatility index, I can go into more detail on that. But whenever the Vix index, okay, which measures fear, whenever it's above 70, which has happened a couple times, I go all in on riskier stocks and I put my reputation online in that. And when that happens, and it will happen again, it almost happened back in April, you know, during the taco days. You know, Trump always chickens out with tariffs. When that happens, you're going to think to yourself, Chris is crazy and I'm crazy to buy stocks. That's when you buy. You got to buy when there's blood in the streets. If you buy the same stock that everybody already owns and loves, there's not that many incremental investors to buy it and push it higher. So be a contrarian and watch your net worth take off. Would you sell part of your ETF positions? To buy a company you've evaluated is selling at a bargain price. Yeah, everything is relative. So I don't use leverage in my portfolio. I did when I ran hedge funds, but what I do is I have a maximum, I don't use leverage. So I have $100 to invest. Let's say 100%. Okay. I don't go to 120, 140. And I've done that in the past. Don't do it. But If I have $100 to invest and I have $5 in each position and one of these positions hit my target price. Yeah, I'll gut it, I'll sell it, and I'll put something else in. Yeah. And I always have a little bit of dry powder as well, just in case. All right, next question I've got is when you say to buy the lowest EV to sales, do you mean for the last five years or the last year? Yeah, I know what you're talking about. So the smartest semiconductor investor that I know, who launched a very, very large multi billion dollar hedge fund, I worked with him years ago. He told me when he invests in semiconductor companies, Right. And this won't work for Nvidia, but it will for other ones. Okay. It'll work for stocks like amat, Asmel, I mean ASML and others. What you do, these are cyclical companies. You look historically and, and what you want to do is you want to look at the EBITDA sales, which is kind of like price to revenue. And whenever you, you hear, see a formula for the rest of your life, always assume the denominator is one. So price to revenue means this. For every $1 in revenue how many times that $1 are investors paying? That's kind of like what EBITA sales is. So what you're going to do is this with cyclical companies, because cyclical companies, which are very much tied to the economic cycle because they don't make any money or they make very little money in recessions or when the economy sucks, you don't look at pe, you look at price to revenue or EV to sales. And what you want to do is you want to look at past cycles, 10 year cycles for when the trough EBITDA sales or price to revenue make it easier was and that's when you accumulate. Yeah. Okay. Question is, what are your thoughts on Moderna Intuitive Surgical? What other companies in healthcare might be a good choice? I'll leave it up to you. When it comes to ISRG Intuitive Surgical, which is robotic based surgery, what I usually do is this. Before I invest in a company, before I start doing research, I ask myself this. In five years, will this company be more relevant or less relevant than it is today? And this will stop you from getting seduced into buying value traps, meaning stocks that are cheap for a reason. So in five years, will more robots be doing surgery or fewer robots? A heck of a lot more. Start there, then do your due diligence and then the next step is you want to fill out that 100 step template I showed you earlier today. Yeah. Okay. What are your thoughts on Coinbase? Yeah, I know Fred Ursum, who's the founder. He was in my office a bunch of times back in 2013, but way before Coin. I don't think he's there anymore. He's a very confident guy. We overlapped that at Goldman. I think he years ago. If cryptocurrencies get regulated, I'm much more bullish on it. And I think they will get regulated. And that's a good thing because before you buy a stock, you always have to read the S1, especially for an IPO. Right. And this is written by investment wankers. Sorry, it took me 31 minutes for bad dad humor. This is written by investment bankers as well as lawyers and it highlights every risk. Now, the SEC does not regulate cryptos yet, but when they do and these things start coming out, then I'll feel much more comfortable to be bullish on stocks like Coinbase. Yeah. Should I evaluate Nvidia, also an EBD sales basis? No, no, As I mentioned before, Nvidia is a little bit different. It's in a cyclical industry with insane secular growth. Okay, yeah, that one is different. $4 trillion market cap. It's unbelievable though. Yeah. Okay. And, and with Nvidia, like for those that, that are day trading, Nvidia don't do that. We had no idea that the Trump administration was going to say, okay, China, you can now buy these certain chips from Nvidia. The other day, would you invest in a company with high capex needs as Rocket Lab or Symbiotic? All that matters to me is what are their earnings going to be in five years. That's the only thing that matters. Don't look at this year's earnings or last year's earnings or next year's earnings. Right. Everybody does that. What I want you to do is this. I want you to build a financial model. Okay. It's a lot easier than you think. And I love to teach with props. You're going to forecast revenue. Okay. Step one. Then you're going to forecast these red items for the most part as a percent of revenue. You look at a couple other things which I explain detail in my programs. Then you'll get net income. So you're going to forecast your net income in five years. Right. And that's, and that's earnings per share. And what I want you to do is I want you to look at the earnings growth between year four and five based on your research. If earnings growth is 20% between year four and five, then your target price is going to be 20 times $1 in five years. So look at very, very long term. Yeah, yeah. But also be careful. So when it comes to companies that are very capex intensive, you have to also look at the footnotes, okay. In the annual report, in the 10K and what people don't, people don't look at this stuff. But for very capex intensive companies and all companies, by law, in the footnotes, they have to tell you how much cash is due in the next five years and thereafter. It's in the, it's in the documents. Look at it and then you decide if they can be cash flow positive, the extent that they can make those payments. Yeah. Or refinance at least. Yeah. What is the maximum percent in the S&P 500 ETF for a European investor? Should I choose Euro Hedge ETF? Yeah. You want to be really careful about US dollar exposure. If you're not in the United States. It can be quite volatile. Right. I have no idea what's going to happen with the Federal Reserve. Right. And people probably have questions about this. Let me go down the path really quickly. So Trump wants to fire the head of the Federal Reserve, meaning the person in America decides what interest rates are. And the reason he wants to do it is because Trump wants interest rates to go down immediately. Right. And that's problematic because if interest rates go down immediately, what happens is the price of all stuff goes up in value. You get inflation. Right. And then you have to raise interest rates massively. And I don't know why the market's making a big deal of this because. Because Powell is not going to be Federal Reserve chair next year. You know, Trump appointed back in 2017. He blames Biden, but it's both their faults for keeping him on board. But he's not going to be his, his term is up next year. Yeah, yeah, yeah. So I just, just be careful, Be careful. And what I would probably do, hedging is probably a, a good idea if you want. I'm sure that there's a, an ETF in Europe you can buy that that's exposed. The S P 500 that hedges FX is as well. Just be careful. But I do believe the very last company on the planet to ever go bankrupt will be the US government. It's all relative. And I think that The S&P 500 companies are much more, are run much better than US government. So I think it's a great investment longer term. I think that The S&P 500 is going to be up 15 to 20% on average for the next 20 years or so. There will be massive down years, I promise you. But I don't care. You gotta be long term focused. And the reason I say that is because I'm seeing this. I have a lot of clients at S&P 500 companies and what they're doing is they're cutting these rules massively and replacing it with, with, with AI. They're cutting sales and marketing, research, development and gna. Right. And if these red items go down, then that income goes up a lot. Yeah. All right. And if all you did was you invested your 401k meaning your retirement savings program in the S&P 500. Right. And you did that for, for 20 years. It's. And you can invest over 20k every year in your 401k, then you're going to have over a million dollars in 20 years. If your wife does it to your spouse, your husband, whatever, then that means that you have $2 million in 20 years. If you set up the educational savings account for your kids, which I think is about 15 grand a year. Right. It's hard to do every year. I know, right. This is better than a 401k. If you do that for each kid over 18 years, you'll have 700k. So it all adds up. It all adds up. And it's tax free. Okay? You pay taxes in your 401k when you take the money out. But a 521 educational savings account is even better for your kids because you don't pay tax if you take the money out to pay for university. Right? And if there's excess money left in the account, they can always use it to buy. Buy a house. That's how we say in Canada, it's not house. Americans, it's house. Later on, they will pay tax on that. And don't anybody do your own accounting, please, I'm begging you. I want you to get an accountant, okay? Doing your own taxes is like doing surgery on yourself. It's that cray cray. I know, because the tax code, the tax code changes all the time based on new government administrations, laws in Congress, you know, etc. Make sure that an accountant does your taxes, please. You'll thank me for that. All right. Are there sectors that you would prefer investing in ETFs because of higher failure rate? For example, biotech, genomics, space, clean tech, et cetera? Yeah, that's a great question. So a good friend of mine, Evan McCulloch, he was the portfolio manager at Franklin Templeton, he had biotechs for years. And I asked him, how the hell do you invest in this sector? Because when you invest in a biotech, it can be a binary event. They get FDA approval, stock goes through the roof, vice versa, stock gets cut in half. Even larger cap stocks like Biogen, ticker, biib in 2005. And he said he has a spray and pray mentality with smaller caps. I said, what does that mean? He said, well, the smaller cap bio companies, what he does is he invests in a ton of them. Okay? Very tiny position each of them. Maybe 5% of a portfolio can be in relatively risky biotech stocks. And if one does well, you make a killing. But a bunch of them could go belly up. So there's nothing wrong with looking at ETFs. Now I want to show you, I'm going to show you guys a website you can use that's free to do tons of research on about 5,000 ETFs. Okay? So I want you guys to go with me to a website called ETFDB.com. that's ETF database.com, and it's free to use. What you can do is you can screen ETFs by. By type. Okay. By geography as well. So but if you go here by. By type, if you scroll down, I'm sure you'll find biotech in here somewhere. Let me see if I can find it. Yeah, biotech right here. Here we go. Good fun. Then what you're going to do is you're going to look at all of these here. Okay. And you're going to look to see how liquid these are like I talked about earlier in the call. Okay. Meaning average daily trading volume as well as the fees. You want the fees to be well under 0.5%, etc. And you can look at the holdings as well. And if you have follow up questions, let me know, please. Thanks. Do you invest in consumer staples and what percent of your portfolio? Yeah, before I go there, please somebody, I don't want to date myself, but somebody tell me what movies this from. My stapler. My stapler, sorry. Consumer staples means stuff that people are going to buy even in a recession like Campbell's Soup ticker. Cpb. Soup is good food, has a decent dividend yield. I tend to only invest in consumer staples if we're in a horrific bear market and I need long exposure. So for example, in the fall of 2008 when we were within 24 hours bank machines not working, my biggest position included gold ticker gld. People buy it when they're scared as well as Campbell's Soup ticker, cpb. Consumer staple. Yeah. Yeah. And I only recommend really looking at consumer staples if, if you really want to preserve capital. Like if you're older and you want to invest in companies that throw off a good dividend and you don't want to take any risks because you don't have that much time to make back the money, then maybe investing in consumer staples makes. Makes sense. Yes. Do good stuff or go go do stuff. Wrote Office Space is a great movie. That's right. My stapler. Yeah, I think Jennifer Aniston was in that too. She doesn't age, man. What's up with that? What is the most budget option to enroll in your program? The previous silver. Yeah. So what you want to do is just go to the description description link in this webcast and set up a call with somebody on my team and they'll explain all the options. Yeah. And everything we do has a money back guarantee too. Yeah. Okay. And for those of you in any of my programs, there's a three day event that you can attend here in the Bay Area with me this September. We also Go to Napa Valley to visit Francis Ford Coppola's vineyard. I pay for all that. Would love to see you guys. Yeah. Okay, in the template in the balance sheet, you have a row called Capex. Should this equal property, plant and equipment net. That is the original balance sheet of the company I'm analyzing. Yes, yes. And it's important to look at that. So that's actually part of the cash flow statement. I would focus a little bit more on that in the cash flow statement. So in the cash flow statement you got three items. Cash flow from operation, cash flow from investing, cash flow from financing. It's going to be part of cash flow from investing. Because you're investing in the company by buying equipment to make stuff. Yeah, yeah. And if you're in one of my premium products, what you can do is every. Every day, actually I have at least one hour of small group zoom meetings with me. You can actually share that template in that zoom meeting with me and I'll help you go through the model and forecast and stuff. Thanks. All right, next question I've got here is I have difficulty recreating a company's balance sheet in the seven step template from your course. What should I do with the rows that are in the balance sheet but aren't in your template? Like goodwill, tax, etc. Yeah, let me show you that. So one thing I want to say is every single company has slightly different financial statements. Okay. So that's why it's important to understand this stuff in a lot of detail. Give me one second instead of memorizing it. So you're talking about step four here, balance sheet. Yeah. So what you're going to do is you're going to add a couple of line items. You can right click and insert them. Or what you can do is you can combine them here. So you can combine AR and something else if you want to. Yeah, I hope that makes sense. And then during the daily zoom calls, if you want, and if you're a premium client, I do one on ones as well. I'm happy to walk through that with you. Thanks. Yeah. But what I would focus on. So when you're forecasting financial statements, like spend most of your time on the income statement. Right. Balance sheet's important too, if they have a lot of debt. But for the most part, I want you to focus on the income statement and look at just cash in, cash out. Right. So I want you to ignore crap that's non cash, like depreciation. And then I just want you to forecast the income statement. Because net income and cash flow in the long run usually converge. Yeah. So I would ignore stuff like goodwill because that's not a cash expense. Yeah. And stock options, too. All right, next question is, do you mean to invest a maximum of 20% in technology or 20% in cybersecurity? 20%. No, 20% tech, period. Yeah, yeah. So your portfolio, if all you own is tech stocks and there's a tech market crash, you're going to get hit very, very hard. Okay. I want you to be careful with that. So I recommend maximum 20% is technology. Now, I've been criticized on YouTube recently. Actually, yesterday in the YouTube short I published, somebody said, that's kind of old school, Chris. I mean, the S&P 500 closer, I think close to 30% of it is in technology stocks. Yeah. But I still want to be conservative. Right. So let me, Let me show you what that means. So if we go here to my favorite etf, which is ticker voo, because the fees are quite low. And we go down here to holdings. I'll show you the holdings. It appears much larger than 20% is in tech. Okay. So right here it's 31%. It was actually 19% in early 2020. Yeah, but I still think 20% is safer. Yeah, yeah. And it's so interesting. But America investing in American ETFs, the big. The big ones like Dow 30 or, I don't know, S P 500, you're kind of investing in big tech, a third of your exposure. I'd just be careful with that. Yeah, yeah. Tommy wrote, how do you get buy in from key stakeholders for a project or a business initiative? Yeah. So you always have to think of people being motivated by three things in business. And what I'm about to say will help you with informational meetings, selling, getting buy in from stakeholders, etc. People are usually motivated by three things. They want to make more money. Okay. They want to get promoted, or they want to enjoy what they do. So with that in mind, when you go into your informational meetings, you can help them to make more money or get promoted by helping them with investment ideas, templates, et cetera, of which I provide plenty for you. You can also help them from a stakeholder perspective, helping them understand what's in it for them. Right. If you make your boss look good, for example, and you know your division makes more money, your boss is going to get promoted, and then your boss will pull you up as they empire built. Yeah. I hate politics. Okay. All right. Eileen, how are you? Great to see You. Eileen has the most incredible last name ever. It's Deo Gracias, which is Spanish for thank God. Excellent. From the Philippines. And I didn't know this, but the Philippines was part of the United States up until, I think the 1940s. 46 or so. I just read that. Very cool. Yeah. Great to see you. Small world. Because Eileen, who is one of my graduates, graduated from my program years ago. She grew up with my priest, who's Filipino, in my Catholic church here in the Bay Area. Next up, I got Daniel, who wrote, do you think it's a good idea to get a charter in caia? Charter Alternative Investment Analyst or just the private equity certification? I've never heard of those certifications before. Sorry. If you are going to get a certification, the only one I really recommend is a cfa, and that stands for Certified Financial Analyst designation. It's a three year thing you take. You write one exam at night or during the day. Sorry. Once every. Every three years. And then you're a CFA charter holder. Yeah. And if you want to study for that, let me know. I've got plenty of tips on how you can work smarter, not harder, and save. Save money doing it as well. Eileen wrote you did not swallow your TikTok ring. Okay. The fact that you have a TikTok ring is already hilarious, dude. I'm telling you, I want you guys to laugh at me and not with me. Yeah. This is why I was in the hospital last week. I swallowed this. And to make matters. And this is not the same one, please. But to make matters worse, you see this part here in mine, it broke off, so it was sharp. So kind of. Yeah, I'm not going to go there, but it's okay. And right before they put me under in the operating room, the. The doctor said to me. And I've never had gone in operating before, right. She said. She said to me, how are you feeling? And I said, oh, I feel great. She goes, well, evidently not. And she was like giving me crap for what I did. I was like, please, I didn't say that. I was thinking that. Yeah, laugh at me. All right. Tommy J. Wrote, how do you identify a business value? Yeah. Yeah. So don't start a company ever unless the total addressable market is at least $20 billion. And venture capital firms won't touch you if the size of the total addressable market is at least 20 billion. Because in the unlikely event you get 5% share of a $20 billion market, that means a billion dollars in revenue annually. And when those are called unicorns and venture capital firms. Only 1% of the top 10 venture capital firms on the planet, only 1% of their portfolios become unicorns. With Sequoia, it's 5%. But let me pivot, answer the question a different way. How do you compete with big companies? Let's say you want to start your own company. How do you compete with big companies? Well, what you do is you say this, you say, unlike big companies, our customer service is impeccable. We are there for you 24, 7. Yeah. That sort of thing. And as Jeff Bezos said years ago, a company is only as good as its customer service. And Bezos also said that cash flow or net income and customer service are 100% correlated in the long run. I believe that. Yeah. We are here to serve others. Daniel wrote, I'd like to get back into hedge funds, venture capital or investment banking. What's the best path? I've got a background in consumer banking. Yeah, yeah. Book a call with my team. Please go to the link in the description of this video. Set up a call and they'll walk you through it. But what I'll say is this, and I'll answer this generically for everybody in this call. How do you get a job in another sector or another job? Well, don't send in your resume. Don't send in your resume because when you see a job opening online, you apply, you have a 1 in 250 chance getting the job. So who the heck gets that job? It's a person that knows somebody at the company. So step one, let us write an incredible LinkedIn profile for you or write it yourself. Step two, publish articles every week on your LinkedIn profile. Makes you look like a content subject matter expert. Okay. It'll help you with social proof in the long run. Step three or three, as my son Andrew used to say, set up a ton of informational meetings with people that work at big companies. You want to work at step four, in that meeting, I want you to think the following. Like I mentioned earlier today, people are usually motivated by three things in business. Number one, they want to make more money. Number two, they want to get promoted. Number three, they want to enjoy what they do. So help them with one of those. And I have tons of templates that you can bring in into these, these one on one meetings to help them. Okay. Then after the meeting for a while they're going to a while into the meeting, they're going to say, why are we meeting? They won't say it like that. Then I want you to pivot and just say, well, I'm really inspired by what you do. I'd love to ask you for just advice on how you made it to where you are and any advice you have for me. Now let me take a step back. There are some people watching. They're thinking, chris, you're cray cray. It's okay, I did swallow TikTok. Right? You're thinking, kris, why the hell would anybody take a meeting with me? Here's why. We appeal to emotions. Okay? So I want you to imagine this. It's 20 years in the future and you're way more successful than you already are today. And somebody reaches out to you and says, john, hope all is well. I also went to the same high school you went to. I also went to the same undergrad you went to. And I'm also from the same place you're from. Please let me know if you have time for a quick coffee or a zoom call. Thanks. Would you take that meeting? Remember this person reminds you of yourself 20 years ago. Would you take that meeting? Yes or no? You're darn tuition. You would? Of course. That's what I'm talking about. Okay. It's a radically new way of networking to get what you want. And just remember, people want to help you in business, especially if you're similar to them. Let me help you go to the description of this webcast, Set up a call with my team if you want to learn more. Thanks. And that's how you're going to get a job in banking or whatever is. And actually one of my clients in one of my programs, Vicente Correa, I helped him using this methodology. Halfway through my program he got a job at Goldman Sachs investment banking as an associate in the same SART class as HBS students, Harvard Business School students. Two thirds of HBS is BS and he had his undergrad from a non target school. He didn't even have an MBA. All right, Ms. DEO, Gracias wrote Chris, I'm having my my daughter read through your networking book. Awesome. And I'll tell you guys in a second how everybody can get it for free. This is what it looks like like here. Okay. Once she finishes she needs to fix her LinkedIn profile, identify possible informational interviews or network and do all of that. Awesome. Awesome. And if you want bring her like you're a lifetime member. You signed up for my product, so join my my, my weekly 3 1/2 hour Zoom call today at 10am if you want to. Now let me show everybody how to get that Book for free. Okay. So you're going to go to harounmba.com and then you're going to scroll down past all my propaganda and then you're going to just enter in your name here and you'll get this book. Yeah, that's it. Yeah. And it's called networking to get customers a job or anything you want. All right. Devon, how are you? Devon wrote. Hey, Chris, how are you? I'm always great, thanks. What do you think about the current bond market situation? Can we expect bond yields to go down anytime soon as Trump is pushing the Fed to bring Fed fund rates down? I think what could happen is short term bonds, short term bonds could decline in price, but I think the 30 year will go up. And the reason why I think the 30 year rate will go up is because if he pushes Powell, the Federal Reserve chairperson, and he cuts rates, forces that person to cut rates near term, then what's going to happen is the market's going to start thinking, hey, this is going to lead to inflation in a long run. Okay? We'll have a very healthy yield curve, which means not averted, which means that current rates are lower, 30 is higher. So I think short term rates go down, 30 year goes up. Yeah, yeah. And if you're curious about how bonds work, this is an actual bond from World War II. Use of proceeds was to fight the Nazi scum in World War II. But I can tell you exactly how this works. All right. That's right. Nazi scum. All right, let's see here. Terror Bear, how are you? Wrote. Hey, Chris. Terrence from the Silver MBA program. Great to see you. Thank you. And then, Terence, if you want, you get access to a one hour weekly zoom call. Starts in just over one hour. Go to the first lecture of your curriculum to access that call. But always ask questions here too, please. You wrote, I haven't been catching up on the weekly office hours, but glad to be here. Thank you. Good to see you. Moving on to Nakin, who wrote Bonjour, Chris. Bonjour. Je veuf el grasse martinet. You wrote, what's the best way to build wealth from nothing while working a full time job? Yeah. So Warren Buffett said, you want to save what is left, you want to spend what is left after saving instead of saving what is left after spending. So what that means is this. Every paycheck you get, if you can. Every paycheck you get, I want as much money taken out as possible and put into your retirement savings program. And if you work at a big Company. I want you to call up human resources and say, do you have any retirement savings matching programs and other benefits? And what I want you to do is talk to your accountant today or get an account today and ask, how do I set up a retirement savings account? You have to talk to an accountant because if you start, if you start buying stocks or other assets and it's not already in a retirement savings program, sometimes you can never move it in. And I want you to get the tax savings. That's what I would do. Step two, what I want you to do is if you haven't already done so, look into buying your own place. And I have a template to help you decide which place to buy, et cetera. Step three, if you have kids, you want to max out. If you can. We can't always do it. Times are tough. I want you to max out your 529 savings plan as well. Yeah. And I want you to be cheap, really cheap. And I'm going to show you something real quick here, okay? And this is going to change your perception of money. And this might be life changing for some people, myself included. All right? So if you spend $1,000 every month on rent, okay? So that means 12 times 12 and you do that over 50 years, okay? And the return is 9%. Right. The house goes up by that amount with tax, savings, etc. So that means in 50 years you're not going to have, you're not going to be worth $600,000. You're to be worth here $11.7 million. It's just simple math, okay? Be cheap. Everything you buy, be cheap. Think about the future value. Be cheap. Don't spend 20 bucks today on Fortnite skins like my kids do because that might be worth thousands of dollars in the future. Okay, now, but another great way to build wealth from nothing when you're working for somebody, okay, is I want you to write a business plan on the side. And I have a template for you to do that as well. And I want you to start companies on the side if you're allowed to do so. Don't tell anybody. Don't trust anybody in your company, please. It's the only way to create generational wealth is to be self employed. There's a reason why in the United States, the federal, the tax rate is only 21% right for companies, but we pay more than that as people, right? It's consumers. Start your own company. The system is rigged to help you. I don't want anybody to wake up when you're 90 years old and say to yourself, I hate my job. I'm not happy because I work for a schmuck that's paying me this much money to make their dreams become a reality. Don't let that be you. Yeah. And the way you know you have a good business model is if you finish the business plan. And again, I can provide you with the template as well. But it's my dream that all my students make more money from your real estate investment properties than you do your base salary in 10 to 15 years. I can help you do that as well. The tax savings are insane. So back in 2016, in the first televised debate between Hillary Clinton and Donald Trump, and I did not vote in the last election. Please, I'm more of a libertarian. But in that first televised debate in 2016 between Trump and Clinton, Clinton, she said, hey, Trump, it's not fair. You're not paying, you know, much in taxes. Why? And he said, of course I'm not. Because of depreciation. He owns a lot of real estate, and the richest Americans don't pay much in taxes. It is what it is legally because they use depreciation. I want you all to use depreciation as well. I want you to own multiple investment properties. I'm here to help you do it. Yeah. All right. Matthew, that's my son's name, too, which is Hebrew for gift from God. Matthew wrote, how are you? I'm always good, thanks. Good to see you. Do you think it makes sense to send jobs overseas instead of the United States? Many people say that the talent overseas sucks, especially in technology. Yeah, I believe in a free market. I believe in capitalism. I'm not a socialist, so I believe in free flow of labor. Now, a lot of my employees are overseas, a lot in Canada, actually, I have a bunch in the United States, but I have them overseas as well. Why would you pay somebody domestically more money if you can get the same value overseas? Doesn't make sense. Right? So I'll show you a great website that you can use, okay? And this might change everything for you guys, called online jobs. Ph. Okay, good. So this here is a company in the Philippines, okay? And let's say you want to hire somebody to do SEO search engine optimization, okay? You click here and you can hire people and pay $3.64 per hour, high school diploma, or somebody with. With a bachelor's degree, university degree, $4.18 per hour. Now, what some people do. I don't do this. What some people do is they hire three people at the same time. And say, I'm going to keep one of you. Yeah. Why would you pay, you know, a kid 25 bucks an hour in the United States or anybody, I should say, when you can do it overseas. Yeah. Now you do get what you pay for. You can also look online at places like fiverr.com, that's a f I-v e r dash.com or upwork.com, which is more expensive but better quality. Yeah. Yeah. And contractors make sense, too, because you don't pay benefits. And that's how Microsoft scaled. A lot of people don't realize is Microsoft had a gazillion contractors for years. Yeah. Now my biggest nightmare is if Trump becomes more of a protectionist and says, you can't do that anymore or you have to pay tariffs on that, then it's Armageddon for everybody. Yeah. All right. All right. Tear Bear. Terrence wrote, I'm going through FA19. That's finest in accounting semester one class, nine through. And I wish to do proper valuation investment summary for sustainability investing, namely renewable energy. Any tips to incorporate sustainability ratings into the investment summary Excel that you provide? Yeah. That'll take me a couple steps to tweak your spreadsheet. Tell you what, join me in about an hour. Okay. On the weekly webcast for your product and share that file with me during that Zoom meeting, and I'll help you. Thanks. Okay. Siraj wrote, what do you think about Jane street being banned from the Indian market? I don't know anything about that. I'm sorry. Yeah. And then King wrote, why do you think day trading does not work? Because what happens is every month has 20 weekdays, meaning 20 days the markets are open and stocks go up and down for random reasons. Like somebody says something in the Middle east, or Trump says something about tariffs, or Trump says, I want to fire the Federal Reserve chairperson right now. Or intel lays off tons of people, which impacts some other semiconductor companies. Or the price of oil spikes. Or an election occurs somewhere in the world that drives down the price of the market. Everything is random. And it's what I refer to as black swans. Right. And a black swan means. And I had a great book on this. All right. Somewhere in my office, there's a great book called the Black Swan, written by Nicholas Taylor. Read it, please. A black swan means a random event you can't forecast, which causes share prices to drop materially or go up. Material black swan events you can't forecast, which screws up day trading include 9, 11. Okay. As well as Covid, as well as Trump's tariff Comments In April, there's so many black swan events. Just be long term focus, I promise you. Right. In day trading, what are we trying to do? Make you know, 10, 15% per year, like what's the point? Pay a lot more in taxes, fees, etc. Why not just do the research and invest for the long term in companies that you think are five by fives, meaning 500% return within five years? Yeah. Day trading does not work. If you disagree, please tell me. I say with love my heart, please tell me the names of very successful day traders that have been successful for decades or whatever. They don't exist. Yeah. And I say with love my heart, because I care. And day trading is like going to a casino. The system is rigged. You will never make money in the long run. And it breaks my heart when I have clients or potential clients, I meet with that say I'm going to quit my job and be a day trader. No, if doesn't work, please don't do it. Please don't do it. And if you want more information on that, let me show you really quickly here. Okay. So I published, I'm sure a bunch of you watch my videos but have a video, let me see here on day trading and why it doesn't work. And what I'll do is I'll provide the link in the description right, right here. Yeah. Why day trading does not work. So what I'm going to do is I'm going to paste that in the link of the description of this video and you guys can watch that to learn more. Thanks. Terence wrote, very thankful for your finance and accounting classes. Thank you. Especially on the buy side and sell side stuff. Buy side means firms that buy stocks like mutual funds or hedge funds. Sell side means firms that sell stocks like Goldman Sachs, Morgan Stanley, etc. It helps a lot. Any tips for somebody with investment operations background to jump to Investment Research Analyst? Yeah. So yeah, since you're in one of my paid programs, please ask me at 10am today in less than an hour. And what I'll do is if you want me to on that call, I'll look through your LinkedIn profile, give you tons of tips and I'll help you think about how to network in order to be able to get a job in that respective sector. Yeah. And don't think like you have to have a graduate degree from HBS 2/3. HBS is BS to get into these great firms. A lot of it comes down to networking. Case in point, the former CEO of Goldman Sachs, Cindy Weinberg. In the 60s, 70s, I think he was CEO for ages. High school degree, started in the mailroom. Tons of people that start in the mailroom become CEO. I can give you so many examples if you want me to. Your network is your net worth, and relationships are always more important than product knowledge. Okay. McFlash. And I love your image. That's Bill Gates when he got arrested in Albuquerque, I think. Yeah. For driving too fast. Yeah. So McFlash wrote, hey, Chris, do you think Ken Griffin. And who's the brilliant CEO, founder of Citadel? Do you think Ken Griffin is a better investor than Warren Buffett, or does he have the potential to become better? I think far better. Far better. Yeah. Warren Buffett has one strategy. Buffett's great. Please. Right. And I met with both. I worked at Citadel years ago. I remember one day I spent half an hour talking to. To Ken Griffin in his office. And when I. When I. When I worked there, what I did, whenever I go into somebody's office that's more successful than me, which is every time I go into somebody's office, what I always do is I look at books they have in their bookshelf, and I order them in the elevator on the way down from the meeting. So his books were. I think they were by Demodorian, who's a finance professor. But the brilliance of Ken is that he has many strategies that make a lot of money. Right. Whereas Warren Buffett kind of has one portfolio, does value investing. Yeah. And I do think that Ken Griffin's gonna be the richest man in the world one day. Yeah. Yeah. And he sent me. My son Matthew was born. He sent a really, really nice teddy bear as well to my house. Yes, it was nice. My son still has it. Okay. Anonymous wrote, do I need to have a suit to be a finance bro like you? No, no. I mean, when it comes to informational interviews or interviews in general, if you're not sure what to wear, look at the LinkedIn profile of the person, see what they're wearing. Or what you do is go to the. Go to the website of the company you're interviewing out to see what they wear. Now, what I usually do when I go to interviews, or I used to, 8 million years ago, dating myself, I'm 53, old man child. What I used to do is I would bring a tie. Okay. And at the. Before going up the elevator, I would ask the person at the desk, do they wear ties upstairs in the office? They say, no, I just junk it, put in my pocket. Yeah, yeah. You don't even like Barack Obama. Wears the same $600 suit for every speech that he's worn for his whole life. I think it's Brooks Brothers. Yeah. It's killing me not to make a joke now. I'm not going to do it. Okay. All right. Exhausted investor wrote, are high yield ETFs worth the risk? No. And here's why. Every time you see, oh, goodness, I lost a ton of people because I mentioned Obama. Or maybe it's because of Trump. I don't know. All right? Or maybe it's because I gave you guys that link to. To go watch that. That video for it for day trading. Yeah. My marketing person is going to hate me now. That's okay. I don't give a damn. All right? Now, when it comes to any high yielding stock or etf, I want to be really careful. And here's why. If you see a stock that has a dividend yield or an ETF with a dividend yield of 20%, it's not sustainable. It's not sustainable because the market is saying, hey, you might not exist in the future. Or it could just be a one off or it could be a mistake in the data. So what you got to do is this. You always got to go directly to the investment offering prospectus for that company to understand what the yield really is. It could have been a one time special dividend. Yeah. But I'd be very skeptical if I see the yield money. That's 20%. Yeah. The exception, there might be a REIT, a real estate investment trust. Now, by law, real estate investment trusts have to pay out 90%, I think, of their operating profit in the form of dividends. Yeah, but if it was 20%, I'd still be worried. Yeah. All right. Yeah. The Riddler wrote. And I read every question, Ken, why do you sell your courses instead of teaching it on YouTube for free? I will show you exactly why. Okay? So my reason for existing, okay, my raison d' etre for people speak French better than I do, is I want to use the proceeds from what I do to build schools. Okay? And I'm building a thousand schools in Africa. I believe that education is the most powerful weapon we can use to change the world. Okay. So I'm currently building a school in Kenya for one of my students. Okay. And this guy is great. This is a. This is Marin's father. Good dude. I met with him in Kenya a couple months ago. He actually came to the United States when he was a kid on a scholarship and saw Dr. Martin Luther King's I have a Dream Speech Live. I loved it. So I'm currently building one in Kenya. A couple of years ago I finished one in Rwanda for Vital one of my students. I pay for the whole thing. But I did get IBM as well as Microsoft to donate computers, which is nice. Everything is self sustainable again. I'm booking a thousand of these things. I think every problem the world can be solved with education. That's why I do what I do. I will die broke. And I really believe if you chase money, you lose your money and your dreams. But if you chase your dreams and you don't give a damn what people think you, something wonderful happens. Your dreams come true and the money follows accidentally. It always does. Most important lesson of the day. Here we go. This chart or chat, as they say in South Boston, will change your life. This is your age on the x axis. This is give a damn. When you're younger, you don't give a damn. You just don't care about nothing. You have meltdowns and restaurants, you don't care. When you're old, you don't have confidence problems either. You don't care. The problem is when you're, I don't know, teenagers, 20s, 30s, 40s, 50s, whatever it is, you're up here, you care what people think. Earmuffs. Because I'm going to swear because I love you guys. I want to get a point across. I don't want you guys to give a about what anybody thinks of you. I want you to eliminate this triangle of despair and I want you to live at this level like all the greats do. Like Steve Jobs didn't care. Oprah Winfrey, Larry Ellison, they don't care. I'm not saying be rude or disingenuous. I want you to live at this level. And, and I want you to give a damn what people think of you. Because as Les Brown said, someone else's opinion of you does not have to become your reality. I don't want you to care. And I want you to think about your career and life as follows. If I give you a month off right now, you can't go to school, you can't travel, you can't work. You have to stay home. What are you going to do with your time? That is your next career. And let me humbly help you make that a reality. Yeah, okay. That was deep. Okay, quit. Quit. Open brackets. Who's a. I guess a programmer, developer. Wrote. Can you explain front running? Yeah, yeah. So front running, I've heard of that in the form of. Of people trying to trade or Invest before big money does. Right. So. And you can get in trouble for this as well with flash trading and all that stuff. I'm not going to go there. But let's say that you work on a trading floor, okay. And you see that a big money account like Fidelity is about to buy 100,000 shares of a certain stock that's not that liquid. And you get another client to buy before that, or you buy yourself before that. You're front running, getting in front of that trade before that buy order comes in to push it off. It's a market order. Yeah, yeah. In any form of market manipulation is against the law. And I love the Reddit crowd and I love what happened with GameStop. It was, it was so fun to watch. But be careful because if people get together and purposely on forums drive up the price of a stock, the SEC can come after you. Just be a long term investor, please. I think they will one day, but not for GameStop. That was a one off. Okay, Go do stuff. Wrote, give a man a fish and he'll eat for a day. Teach a man to fish and he'll sit in a boat and drink beer all day. Hey, that's, that's a good, that's a good living. I don't drink anymore, but I don't drink any less. Yeah. Peter, how are you? Peter Wrote, your current speaking speed is fine and understandable. For context, I'd watch. Oh, I watch your recorded videos in the, in the MBA program on 1.25 times to 1.5 times. Yeah, yeah, I do speak of it. Speak a bit slower in my recorded content. Yeah. And I often say things twice, only the second time, much slower. I often say things twice, only the second time, much slower. I sold that from Mike Myers. Okay, next question is, is this live on YouTube only or also Twitch, his site rumble or what? It's just on, on, on YouTube. I'll show you what I do behind the scenes in case you guys want to do the same thing. So I use a product called Wirecast right here. You can use a free product called obs, which stands for Open Broadcasting Software. And what you can do is, is you can select what platform that you want to broadcast on. Right. So I could select multiple platforms here if, if I wanted to. Right. So I could ask. I could add Twitch and LinkedIn and other stuff and maybe one day I'll do it. I don't know. I'm just having too much fun doing this. Yeah. All right. Manas, how are you? From Calcutta. Great to see you, Manas. Wrote, good morning. Seeing you after 5,000 years. A lot to ask. Let's go for this, sir. Thank you. And I'm so sorry I was out last week because I, I ate this. Don't eat this, folks. Okay, okay. All right, so I just started watching the, the silver MBA course. What should I look out for in the course? Yeah, tell you what. I give you. I do a, an onboarding, one on one with every one of my students. Okay. So what you can do is email supportheroonventures.com and say I want a one on one with Chris and I'll give it to you. Yeah. Or my staff will take care. Yeah. All right. Dumb question. There are no dumb questions. Only dumb teachers. Those who can't do, teach, and those who can't teach, teach gym class. And you know that's true. Yeah, I'm just kidding about teachers. Okay, dumb question. But are the people on New York Stock Exchange, do ones who have Bernstein and Barclay on their jackets, what's their job? Why are they relevant next decade or two? Yeah, yeah, yeah, yeah. So New York Stock Exchange trading floor should not really exist, right? If you look at nasdaq, there's no trading floor. Everything is electronic. Right. It's just a marketing thing. And it's a brilliant marketing thing that has a massive return on investment because when the market crashes, the market rallies. You know, you get journalists that go up there in the second floor and the rafters have been there as well, just to give an update on what's happening. Right. It's just free marketing. It shouldn't really exist. Right. It's just symbolic. It's kind of like, I don't know, Buckingham Palace. You have those, those cray cray guys that stand there all day with the crazy hats. Yeah, but the people on the floor are traders, right? Big block traders. And if you want to really understand how that works, I want you to watch a movie called Trading. It's with Dan Aykroyd. Somebody help me out here. Trading Places, I think it's called. Yeah, but that's more about options. But it's fine. All right, I just had a senior moment there, guys. Trading Places, I think. Yeah, Eddie Murphy was in it too. All right, Daniel wrote, what are your thoughts on IUL Index Universal life insurance? Is it worth the hype? Nope. So don't ever invest. And this is my humble opinion, do your research first, please. I don't want you to do any investments through life insurance companies. You want to buy stocks, you just invest in the markets yourself. Why? Because there's tons of hidden fees. Here's what I want you to do. I want you to call up the insurance company, right, and get customer support in the line and say exactly this. I'm going to explain to you what I think the fees are for every hundred dollars I invest. And then I want you to tell me if I'm right or wrong. Okay. And do it over and over and over again. And you'll see the fees are probably 3 or 4% at least. You can buy ETFs for.03% fees if you buy the Voo, for example. Yeah. Next question is, is PayPal a broken stock or broken company according to you Also, what is the future when Coinbase and Robinhood are our dominant boys here? Thank you. Yeah, yeah. So what I would do is manas. I would go to E. EMS 42 in your curriculum, Economics Management Strategy, Semester 4, Class 2. And then what I would do is this. It'll take 10 seconds, I promise you. Then what you're going to do is you're going to fill out this 100 step investment template for those companies and then I'll let you decide. And if you're interviewing with investment firms, this is dummy data. You can always bring these one page write ups too. Yeah. Okay, give me a second. Okay. Armand wrote. Hey, Chris, do I value oil and gas companies like Aramco, Exxon etc or commodity companies in general? Yeah, you can definitely value Saudi Aramco if you can get access to all the data as well. It's a massive company as well as Exxon Ticker Xom. Now when you value those companies, right, the biggest driver is going to be the price of oil. So when you create your financial model in cell A1, for example, you're going to put what you think the price of oil is going to be and that will have a big impact on the rest of your financial model in terms of forecast. The top line which is revenue, and the bottom line which is net income. Yeah. And every, every sector has its own driver. Have you read the man who Solves the Markets? Its book on Jim Simmons? Do you think quants will be viable And AI can do trillions of calculations in a minute. Yeah. So for those you're not familiar with Jim Simmons, brilliant man, God bless me, recently passed away. He worked for the National Security Agency and then he quit in the 80s, early 80s, to start Renaissance Tech Renaissance. It's a. It's a hedge fund that has average gross adjusted returns of 60% every year since the 1980s. Right. And he's one of the few companies on the planet that have figured out how to use machine learning, artificial intelligence, regression analysis, et cetera, in order to generate alpha, meaning massively beat the market. Yeah. So I'm a little bit less bullish on his strategy because he's no longer around. I never invest in a company when the founder leaves. Yeah, yeah. In terms of AI, a lot of people are worried about AI. I have a lot of clients, actually, that work in the tech industry and they're worried because their job is about to be made irrelevant because of AI. They're developers and they want to switch to the finance or another industry. If you work as a developer, I would be very worried. Okay. Now, Jensen Huang, who's the brilliant CEO founder of Nvidia, he said, do not, do not ever study computer science in school because AI is perfect for that. And I see I'm on the front lines here in the Bay Area. I've started going out to DARE with my buddies on weekends in Shallow Alto, which we also call Palo Alto. And it's kind of empty, man. Big companies out here are laying off thousands of developers because AI is replacing it. So what will AI not replace? There's an inherent trust issue with AI. I don't trust AI. You shouldn't. So I think sales is not going to be replaced. Like direct sales, where you trust a person, not a fricking computer. In the financial services sector, 75% of all jobs in investment banks are sales oriented. I think we're relatively safe right now. Yeah. But if you do something repetitive, I'd be worried. Yeah. Tesla launched in India. Does that mean demise of most EV brands in India? And also, will Tesla be able to compete with BYD in Asia? Thank you. Yeah, it's going to be tough because BYD is a Chinese company and the Chinese government, you know, they say that Chinese communists are the best capitalists, but the Chinese government certainly favors BYD for strategic reasons. Yeah. In terms of. Of Tesla competing effectively in India. I don't know what the tariff situation is there. Yeah. But I wouldn't, I certainly wouldn't discount Tata. Yeah. What do you think of tariffs in Canada? Like 35%. Will it last? Carney, who's our prime minister, who I overlap with that? Goldman. He's a good guy, actually. Although I'm not a liberal. Let me read this. Yeah, yeah. So let me answer that. So you mentioned the word taco, which. Which is an acronym for Trump always chickens out. So my dad taught me, actually. And, dad, if you're watching, you're like a father to me. My dad taught me, don't focus on what Trump says, focus on what he does. Okay. And Trump right now. So Trump is a master negotiate liberal, hate him. It is what it's got. Now, when two people negotiate, one party says, I want this. The other party says, I want this. They meet right here. With Trump, it's different. One party says, this, Trump says, I want this. They meet right here. Okay, so the jury's out. I think it's a bluff. I still do. But I do think this is controversial. But I do think in 20 years we're going to look back and say by Trump bluffing like that and being a hard negotiator, it made the deficit go down a lot. The deficit is now $36.6 trillion. Not sustainable. So I agree to a certain extent with what he does. I, I don't like the fact he's bullying my people. Canada. But yeah, maybe Canada joins eu. I don't know. Okay. Manas wrote, I think Powell, the Federal Reserve chairperson is a good guy and nice chairman. He's been responsible and a cool man. Hedge fund manager. Former maybe. Mature and calm and sensible and not a bad mouth guy. Yeah, I think he's, I think he's doing a good job. I really do. I really. And it's. Trump appointed him in 2017. Yeah. Yeah. All right, let me move down for other questions here. Mac, how are you? Give me one second. Just jumped on me when I get a lot of questions. Okay, so Mac wrote. Hey, Chris, I have a quick question about dca. Sure. In this environment, the more I DCA dollar cost average, meaning buy more stocks over time in the same stock gap, the higher my cost basis. Should I wait for a pullback? Thank you. Yeah. So the way I look at it is do your investment research. Okay. And you're in my class. That takes place every Monday and Tuesday, 4pm to 7pm you can always ask me here, ask me there, whatever you want. Or today, during the three and a half hour office hours, zoom call. It starts soon. What I would do is just do Investment Research. Identify 20 stocks you love. Okay. And then just keep adding to them over time. And you got to tell yourself, I don't really care about the path, I care about the destination. If you buy a stock today down here, okay. And it's going to be that, you know, in say, I don't know, 20 years, does it really matter what the path is? Okay. What are the best products and desk for sales and trading? S T. And is this a Good place to gain experience and possibly switch to private asset management, private banking. That's a good place to start a career because you're learning sales, you know, you're learning how to be resilient. And hear no on the phone. No means not yet. Until then, all I heard was not no. I think sales is the best place to start any career because that's what a great CEO founder is, a great salesperson. Nothing wrong with that. In terms of your question, products or desks? Yeah. So a Herman Miller chair is great. I have a Herman Miller chair in my office. It's the Aeon brand. I never sit down though. I always stand in terms of my desk. I'm going to show you here. It's really, really messy. But this is my desk here. So I have a desk that goes up and down. And I was on a call the other day and somebody saw this right here and they said, why do you have sluts on your desk? I said, no, it suits. I'm going to do a review video on each season of suits. I'm an idiot. I'm sorry. But I have a desk that moves up and down and then I also have a treadmill where I get my 20,000 steps in a day. I'm always moving. Just like a shark. Yeah. And if you're curious about this, this is for a presentation I gave and you got to use props when you present. It's a lot of fun. And it's, it's, it's a NFL football I custom made and on it says broke. And the reason is because 78% of all people that play in the NFL within two years of retiring, they're broke. We are here today to talk about personal finance. Yeah, it's kind of fun. And this is like a Tom Brady football. Anybody tell me why you grew up around the corner from me here? All right. All right. Xander, first time I see you on the call. Hope you join us again. Welcome. Wrote what are some of the safer option strategies on stock such as Google you recommend that allows you to boost your portfolio returns? Yeah, I would say so. I teach 35 different option strategies in my programs on my website. The best option strategy is very simplistic. Okay. And I want anybody to sell options being underwrite them because you can get randomly assigned which means you can owe much more money than the amount of amount of you invested. But what I recommend doing is this. Step one, create a 100 step investment write up per the template showed earlier. Step two, come up with your target price five years from now. On Google or whatever stock it might be. Step three, if you see several hundred percent upside, then step three is going to be buy a Leap. Okay. Way out of the money that expires in two to three years. Yeah. Call Leap. Of course. Yeah. All right. Manas wrote. What do you think of crypto exchanges? Will they be replaced by Schwab and Vanguard? I feel more comfortable investing in Bitcoin if there is an ETF that exists under, under Vanguard and Schwabisch than I do in, in investing in Coinbase. Yeah. So I think that there will be material risk. But I, I do think that if cryptos, if and when they get regulated, it'll be positive for Coinbase. All ships rise longer term. But there's more cryptos now than there are fiat based currencies, meaning paper based currencies. It's, it's ridiculous. And by the way, there's fifty more dollar bills yo, today than there were, you know, at the beginning of COVID Yeah. That's why cash is trash. And this is for an upcoming video I'm recording right now. And I've had a lot of people ask me to do other videos. So I'm doing succession. I love my job. I don't have a job, a passion. I'm doing suits. I'm also going to be doing Silicon Valley and a lot of people are asking me to do industry as well. I'm kind of running out of movies to do, but I'll keep creating content. It's fun. So Aidan wrote, why would I want domestic equity exposure that isn't VOO when the majority of professional managers fail to beat it? Yeah. Yeah. Domestic equity exposure, in my, in my humble opinion, means stocks you've done research on. And if you do the research and you work on five by fives, like I mentioned earlier, you can easily outperform, you know, the S&P 500 money managers because they're like sheep and sheep get slaughtered. They'll follow each other. And at the end of the year, a lot of these mutual fund people and hedge funds too, they chase performance in year end, all ends badly. Do your own research, you can massively outperform them. Yeah. I promise you. All right, next up, we got Ryan White who wrote I have a web3 company. Cool. I'm looking to start learning how to raise while I'm finishing this code. What are the top three classes you have that I should get? Already done. Entire MBA one course. Yeah. So an entire MBA one course. It's a seven half hour course on Udemy. I made in 2016. What I recommend doing is book a call with my team and tell them what you're looking for. You can go to the link in the description of this video to learn more. Yeah, we'd be happy to talk to you about it. Yeah. Amber, how are you? Amber is a former platinum student of mine from two years ago, I think based in Connecticut. You worked for, I think it was a healthcare startup or something. Silicon Valley bank was one of your bankers. I remember that years ago. Great to see you again. You wrote, you mentioned before to keep your resume to one page. Yes, yes. Use the Harvard Business School format that I mentioned in our curriculum. Always. Okay. Always. Yeah. Is this also for people who are not free, fresh out of college? Will it look like employment gaps if I don't have a full history? No, no. Do it. Everybody. HR managers look at this format and they're comfortable with it. The dumbest thing we can do, and I say dumb, pointing at me, is to have a multi page resume or to have too much stuff on a resume. Tell you what, join me at 10am today, right? You have lifetime access to my weekly in the program. You're in weekly 3 1/2 hour Zoom call. Bring your resume and your LinkedIn and I'll change everything. I'll help you with it. Okay? Yeah. And if you don't have the link for that call, Amber, just email right now supportaroonventures.com and I'll look for your email before we start the call. I'm turning my watch around so I can remember that. So later on when I look at my watch, like what? Oh yeah, Amber, this works only if you have one thing to remember. Yeah. Great to see. Okay, next up, we got Ryan, who wrote what are your top three pieces of advice on finding an all star team? Yes, yes. Number one, have they had exits before meaning startup? Like for example, there's this guy I know, Andy Becklershire. I met him a number of times. Good. Good dude. You know, he's had so many exits, I don't even care what company he starts next. If he asked me to invest, I'd invest. Period. Okay. Because past performance does indicate future performance for private companies. If somebody's had multiple exits, that's number one. Okay. All right, let me see. Let me read the question again. Give you two more advices on team number two. I want the team to be able to sell. So when I used to work at venture capital and I would meet with tons of startups, I always think of them as a salesperson and I'm their customer for whatever product or service they're making. Do they get me excited about their product or service? Can they sell? Can they make something really boring like cloud computing sound awesome like Marc Benioff does? Can they get me excited? Because I do know that they're probably early. You know, they're a private company investing in a company that might be relevant in the future. And I know that their end market's going to change and their business model probably changed too. But I want to see if I can still get very excited by them. Number three or three. As my son Andrew used to say. There's one question that I love to ask, and if they don't ask it, answer it the right way. I don't invest or even think about investing. And I learned this from a brilliant man named Saeed Amidi, who was one of the first investors in PayPal. He taught me this as I was on this board helping him select investments years ago in bc. The question is this. We ask the entrepreneur, do you have a plan B? And if they say, yeah, if this doesn't work out, I might go to business school or law school or go back to work at IBM. Industry's biggest mistake. I mean, IBM, etcetera, we don't invest. What we're looking for is this. No, I don't have a plan B. I'm all in. That's what I want. Yeah. And when I invest in companies, the first thing you always have to do is really focus on the management team and business. It's bullshit. The way they teach you business in business school, they never tell you that. So when I look at investing companies, you know, I have target prices down here. Last. That might be technical analysis. The first thing is always the management team, because that's what a company is. A company is management. And the second a founder resigns from a company is no longer involved, you got to run for the exits because 99% of the time when the founder leaves, that company is in secular decline. Because most executives are chicken and they won't take any risks because all they care about is getting promoted. If they take a risk and they mess up with a new product, they're gone. They're no longer climbing the corporate ladder. Yeah. And that's why I believe that two guys or two gals in a garage can beat the pants off of large companies. All right, next question is from Tommy John wrote, hey, Chris. Is a primary source to look up or understand a company's capital structure is by examining the. The balance sheet. Yeah. Yeah, because, well, it's, it's the balance sheet, but it's also the 10k. Okay, so let me show you. So I've got a new product coming out and if anybody's a student of mine and one of my products on my website, you're gonna get this for free. Okay? So when you do forensic accounting, you have to look at the footnotes in a lot of detail. Okay? And in the footnotes, you can't just look at the three financial statements. You gotta look at the footnotes because the footnotes in the 10 gave me the annual report. By law, they will list how much money is coming due, debt that's due in the next five years and thereafter. Okay, so you have to look at that. You can't just look at the balance sheet. Okay. But when it comes to capital structure, I think was the first question asked today by you. Great question. What you also want to look at is you want to make sure, in addition to what I said earlier, that the interest coverage ratio is high, like way above 1. And what that means is operating profit or EBIT divided by interest. So they can make their debt payments. And that will help you with the capital structure. Another way to look at the capital structure is to really, really dissect the weighted average cost of capital, you know, by looking at the cost of equity, cost of debt as well. All right. And then Ryan wrote, thank you for everything. You're most welcome. Thank you for being here. You wrote, I listen to you every Thursday while I'm working and I've learned a ton from you. Thank you, thank you. It means a lot. Thank you. And I'm never going to stop doing this. This is week 323, guys. I'm never going to stop. Yeah. Okay, so Tommy wrote, can you please explain how to calculate the, the weighted average cost of capital and its components? Absolutely. So winning average cost capital means what is the cost for a specific company of debt and the cost of equity? I'll show you the formula very quickly in a second. Okay. Now the cost of debt, if it's a AAA rated company, like a really good company, like an apple, right? The they're only going to pay. The cost of debt's gonna be very, very low. They're gonna pay, you know, low to mid single digits interest rate, probably something like that. Okay. Then what you do is you tax effect is you get a tax benefit. Now the great thing about debt, if done properly is you can deduct the interest on your debt, okay, before taxes. And that makes taxes go down and that's why you tax affected. And I'll show you in the formula in a second. So now we covered the cost of debt. Let's talk about the cost of equity. So the cost of equity, you guys have heard of beta, right? So beta means how volatile a stock is relative to The S&P 500. S&P 500 has a beta of 1. If a stock has a beta of 2, it means it goes up twice as much as the S and P and vice versa goes down twice as much as well. So the cost of equity, a lot of it comes down to the beta of the stock. So what I'm going to do is I'm not sure if you're in any of my programs, but you can access everything I'm about to show you in my programs. But when you do the weighted average cost of capital, it's part of discounted cash flow. So you basically take for the cost of debt. Let's do cost of debt first. So you do the percent they pay in their debt which you can get from their financial statements times one minus the tax rate. Okay. The cost of equity, you're going to take the risk free rate which means government treasury is the lowest risk in the world. Plus the beta times the stock market return, whatever you think it's going to be, minus the risk free rate. Now once you have the cost of equity and cost of debt, then you need to weight it. So if 50% of capital structure is equity, 50% is debt, then you're going to do 50% times the cost of equity plus 50% times the cost of debt. And that's used calculate to calculate net present value and discount your free cash flow. Yeah, yeah. And if you're in any of my premium products, if you want, I can explain that in much more detail in about 15 minutes on, on our daily daily Zoom call. Yeah. Okay. Manasse wrote, who do you think will can be a good Fed chief now? Post Powell, another hedge fund manager or somebody out of the blue. I prefer somebody with experience. You know, maybe somebody that, that worked at a bulge bracket like a Goldman Sachs, for example. Somebody like a Mark Carney. Yeah. Who is the head of the Bank Canada and also the head of the bank of England. Yeah. And, and Janet Yellen was, was the head of the Federal Reserve as well as the treasury as well. So somebody like that. But I, I like people that have experience and not people that are just brains on a stick. Like people that have PhDs and have been a professor forever. Yeah, yeah. Okay. Do you think AI is in a bubble now as we have a gazillion companies doing the same thing. What could be a good space for AI to disrupt them there? Yeah, yeah, it was definitely, we're definitely in a bubble right now. Right. I mean, and that's why everybody is screaming to get access to AI. And there's only a couple plays really. You know, there, there's, you know, there's Palantir, which is overvalued. And I invest in Palantir pre ipo. I know it very well, which is overvalued because everyone is, is dying for AI exposure. And then you've got a $4 trillion company called Nvidia. Yeah. What I would do if you want, and I actually do a case study of this in a course that my students on my website are getting access to. What you can do is this. You can actually go to Nvidia's annual report and you can do research to see, you can do research to see what, who their suppliers are. Right. And look at their auto report, etc. Much, much more. We do a case study on this in a lot of detail as well. Yeah. And smci, et cetera. Or you can listen to Nvidia earnings calls or watch Nvidia's. Go to Nvidia's investor relations website to watch webcasts and really pay attention to the Wall street questions from the sell side. Analysts on the competition and suppliers as well. Right. You want to find out who is supplying Nvidia, who are the smaller cap, you know, semiconductor companies or service providers. Because all ships may rise. Yeah. Or look at their competition. And if you look at Nvidia's, you know, 10K, they have to list their competition, they have to disclose all risk by law. That's why regulation of markets is a good thing. All right, I'll take a couple more questions and then I'll, I'll wrap it up. Okay. Louisiana Wrote. Chris. Do you think it's a good idea to sell my Berkshire Hathaway stock? It's going down. Yeah. Yeah. Well, people have been getting into more risk assets recently, which means growth goes up, value underperforms. That could be a reason. I don't know. You'd have to analyze what are the components of it. That's it Probably a good long term investment. But I personally probably wouldn't buy Berkshire if Warren Buffett's not managing the fund anymore. That's just me. You know, it's like innovation, performance can die when a founder leaves. Like when Steve Jobs, for example, when he left Apple God bless him. They haven't really done anything innovative that works. They've done nothing. They made a bigger iPhone, smaller iPhone, bigger iPad, smaller iPad. The Apple Watch already exists under Jony I've who I met. Great guy. When Steve Jobs was there. He's in development. The Vision Pros is a loser product. They've done nothing. Yeah, innovation dies, I think. And performance longer term like Cook is a great operator, that's for sure. That's why, you know, he's CEO because he was CEO before. He can operate. But I don't like to invest in companies when the founder leaves. Just who I am. Yeah. And if you want more detail on that, just do a search for. I did a. I read a lot online. It's fun. But I wrote an article in venturebeat.com years ago about that called When a Founder Leaves, Investors run for the exit. Okay, next question is. Great question. How do I find a great accountant or lawyer for myself, for my business? Yeah. So there's no, there's no yelp for lawyers or pardon me, there's no yelp for accountants. So what you need to do is this. Ask a successful friend, family member, co worker who they use for their account. Ask for an introduction. They'll gladly do it because if they introduce their accountant to you, their accountant is going to say, hey, thanks for more business. They'll do a better job for your buddy. Okay. That's what I would say. And you want the same account to do your personal taxes and your business tax as well. Moving on to how to find a lawyer. Here's the easiest way. Okay. What I want you to do is you go directly to legalzoom.com okay. Legalzoom.com and I've used them a lot. Okay. This is the cheapest way to get access to lawyer. I think it's like 35 bucks for half hour call. They speak really slowly though. Just kidding. But you can get all types of lawyers here, incorporating, etc. And a lot of my trademarks and copyright stuff over the years I've done through LegalZoom because it is cost effective. Yeah, yeah. All right. And after you have a relationship with a lawyer on LegalZoom, don't tell them I'll hire you offline off the platform. Don't do that. Okay. I wanted to be a lawyer at one point. And so I set up tons of informational meetings with lawyers and then I came to the conclusion, are you a jerk before you go to law school or is that something they actually teach you in law school? I'm so glad I'm not a lawyer. Yeah. Although I do love civil rights lawyers. The rest of them, not so much. Okay, next question is, if you were to start a YouTube channel today, what will your focus on shorts or longs be? And do you think people are losing patience and retention time? Yeah, absolutely. There's a reason why shorts are really taking off. So I would never create content just for the sake of it doing well. Because you're chasing money. You got to chase your heart. And really think of it in terms of how can. How can I help people? Right. How can I help people and enjoy the process as well. Yeah. Just do it because you love it. Like this right here. I don't have to do this. I don't have to work, but I want to help people. It's fun for me. Yeah. And I want to build schools. That's why I do what I do. Yeah. So. Yeah. But shorts are really, really taking off. I'll show you my channel and I'm fully transparent with everything, as you guys know. Transparent to a fault. But what we found with. With our channel lately, we've had 11 and a half million views in the past 28 days. A lot of it is shorts, actually. It's interesting. Yeah. So this is yesterday's video. 136,000 views here. It's been fun, man. But. But shorts are doing much, much better for us, right? We. We had a couple. 2.2 million views. 2.3 million views. I do them. I do them daily. But what I like to really focus on, which is less profitable, I don't care, is doing my reaction videos to movies and billions and stuff. Right? So this is the most recent one I did here. It's on Margin Call. And I love teaching based on movies. It's so fun, man. So I did this one, Margin Call. Great movie. Really underrated. The next one I'm working on is that's 25 minute video. Sorry to bore you guys, but it's fun talking about this stuff. The next one I'm working on is this one here, which is going to be by far my longest video I've ever made. I don't care if I get no views. It's just fun. Yeah. I want to teach. Okay. All right, next question is, what do you think of De Shawn, a fund manager, and his comparison with Cathie Wood? Any idea? Yeah. So I. I learned from you, actually, that Cathie Wood, although she uses media a lot, she underperforms massively in terms of D. Shaw. I know the firm very Well, I almost worked there actually. So before I got recruited by Citadel here on the left coast, I mean west coast, I. I actually was in late stage discussions with, with D.E. shaw. Yeah, yeah, good company. Actually, it was going to be the same position, same office as Jeff Bezos used to work there. It's kind of a weird culture though. Everything there is black and green, like green lights. Yeah, yeah. All right, all right, guys, I know there's tons more questions. I am going to wrap, wrap it up right now and click the like button. Subscribe all that crap. My CMO wants me to say I love you guys and then go to the link in the description of this video. Set up a call with somebody in my staff. You want to talk about joining my services, where I help you get a job in finance. 65 Blue Eyes Trust Fund. Anybody watch that video? So sorry, I got that from TikTok. Don't eat these things, okay? Or if you want, go to the link in the description. Set up a call with my team if you want to join my business academy, my MBA products, all that stuff. We have an AI boot camp coming soon, which you'll be part of a lot of fun. God bless you all. Again, do not eat TikTok rings. And for those of you in my paid programs, I'll see you for our three and a half hour zoom call, I think starting in a couple of minutes. God bless you. I'm going to end this webcast like I always do with a very short interview with Steve Jobs that I licensed from the Silicon Valley Historical association that will change your life. God bless you. Thank you. When you grow up, you tend to get told that the world is the way it is and your life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life, have fun, save a little money. But life, that's a very limited life. Life can be much broader once you discover what one simple fact, and that is, everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. And the minute that you understand that, you can poke life and actually something will, if you push in, something will pop out the other side, that you can change it, you can mold it. That's maybe the most important thing is to shake off this erroneous notion that life is there and you're just going to live in it versus embrace it, change it, improve it, make your mark upon it. I think that's very important. And however you learn that, once you learn it, you. You'll want to change life and make it better. Because it's kind of messed up in a lot of ways. Once you learn that, you'll never be the same again. It. Sam.