🏰 Do Moats Still Matter in 2025? What exactly is a competitive moat in today’s fast-moving market? Are brands like Coca-Cola and Apple still untouchable, or is AI changing the game? We debate whether classic economic moats still hold up.
🚀 Are The Magnificent Seven Still Magnificent? Once the undisputed kings of the stock market, are the Mag7 tech giants still as dominant as they seem? Or is there an undercurrent of risk threatening their long-term reign? We break down each company and where they stand today.
🔒 Never Sell: The Ultimate Investing Strategy or a Dangerous Myth? Holding stocks forever has made some investors rich, but is it really the best strategy for everyone? We take on the “Never Sell” philosophy and when it might actually be a terrible idea.
Plus:
➡ Why moats are harder to define than ever (and why Buffett still loves them)
➡ The shifting power of network effects, switching costs, and brand loyalty
➡ Amazon vs. Shopify – does Shopify have a moat, or is it doomed?
➡ Tesla’s future: Innovator or just another car company?
➡ Nvidia’s explosive rise – can it really keep going?
Huge thanks to special guest and friend of the show @TheMattCochrane for joining us on this week’s episode to share his wisdom!
Segments:
00:00 The Art of Investing and Innovation
02:28 Do Moats Still Matter? Classic examples vs. modern disruptions
08:05 Moats in the Modern Economy
23:12 Case Study: Moody’s Strong Moat
27:31 Challenges in Identifying Moats
40:20 Axon’s Moat: A Deep Dive $AXON
42:17 The Magnificent Seven: Dominance in the Market
44:01 NVIDIA: A Controversial Investment $NVDA
45:45 Meta’s Turnaround and Future Prospects $META
50:20 Amazon’s Unmatched Logistics and Fulfillment $AMZN
54:22 Tesla: The Future of Innovation or Overvalued Hype? $TSLA
01:01:33 Apple: Innovation or Iteration? $AAPL
01:05:30 Alphabet: The Uncertain Future of Search $GOOG
01:07:37 Never Sell – When It Works and When It Fails
01:22:06 Closing Thoughts and Final Remarks
WSW-E69 MOATS MAG7 NEVERSELL
[00:00:00] Luke: I wholly believe investing is an art, not a science, and it’s hard to put numbers on this stuff.
[00:00:07] matthew: to me, innovation is what builds a moat.
[00:00:10] matthew: And I think that’s what Musk is probably doing. He is innovating his way. Steve Jobs with the iPhone.
[00:00:15] Krzysztof: All told, had I followed Neversell, I would have my own castle.
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[00:01:43] Luke: Hello and welcome to the latest Wall Street Wildlife with Christoph and Luke and special guest Matt Cochran. Matt, welcome to the show.
[00:01:51] matthew: Hey guys, glad to be here. Glad to see you guys again. Like, uh, it’s like a reunion.
[00:01:55] Luke: It is a reunion, it’s been a little while but we were all Buddies at [00:02:00] Seven Investing and we’ve been reading your stuff for way, way back when you were writing for the Motley Fool. So it’s awesome to reconnect with you on the Wall Street Wildlife Podcast.
[00:02:07] matthew: That’s kind of you to say, Luke. I think I was reading Kristoff’s stuff when I first got involved investing on the old, uh, Motley Fool boards. But, uh, yeah, it’s always a, always a pleasure to catch up. Always a pleasure.
[00:02:17] Luke: listeners, we have got a fantastic show lined up for you this week. We said to Matt, hey, come on the show, come and chat to us. Like, what do you want to talk about? And he gave us three ideas to topics and we like them all. So we’re going to do them all.
[00:02:28] Luke: So today we are going to chat about, do moats still matter in this fast paced world? Why are moats important? Different kinds of moat. And we’ll give some examples of moats that are maybe built to last. And maybe some that have spectacularly failed. Is the Magnificent Seven still magnificent? We’re going to debate the future of those tech giants in the face of disruption and scrutiny.
[00:02:52] Luke: And finally, we’re going to tackle, is NeverSell a smart strategy or a recipe for [00:03:00] disaster?
[00:03:00] matthew: Looking forward to it. Looking forward to all three. We got a good three hour show ahead of us.
[00:03:04] Luke: Yes, sir. Well, Matt, like you’ve, uh, you’re new to the Wall Street Wildlife podcast. So just in case any of our listeners haven’t heard of you, do you want to tell us a little bit about, do you want to tell us a little bit about Who you are, what you do, and any fun projects you’re working on right now.
[00:03:20] matthew: yeah, I think, and one, just thanks for having me in, uh, and, and two, thanks for this opportunity. , Full time, I’m, uh, I’m a detective. That’s my day job. So like all my investing is like, uh, it’s kind of like my night shift and my weekends. And uh, right now, like I, I do some freelance work for longtermmindset.
[00:03:37] matthew: co. That’s the, the Brian Feroldi and Brian Stoffel guys. And old, uh, Motley Fool colleagues of mine. And I love working with them. And, uh, of course I used to be with seven investing and before that wrote for Motley Fool. And you can always find me on Twitter at the, at the Mac Cochran. I
[00:03:53] Krzysztof: I’m a big wire guy. And so everything I know about the world of detectives, I’ve learned [00:04:00] by watching the wire. Are you, uh, closer to, uh, detective McNulty or, uh, or the bunk? Assuming you’ve watched it, you
[00:04:11] matthew: actually. So the wire is like, I would say of like, well, first of all, let’s just say of all the cop shows that are out there in the world, like 99 percent of them are like. Right. Like if you, if you’re coming from the job, you’re just like these CSI or, you know, any of those shows, you’re just like completely unrealistic.
[00:04:30] matthew: However, the wire is like one of the three, which I say is like, you know, when people ask me, like I say, my job’s like maybe like 50 percent the wire and like 40 percent Bosch and like 10 percent Reno nine one, one. So it’s some kind of mix between those three, but the wire is a great show.
[00:04:48] matthew: Obviously, uh, you know, when you get into the seasons where they have, like, they set up a neighborhood where they don’t basically police anymore, or whatever, and all the criminals go there, I mean, like, you know, it gets a little silly at times, but, [00:05:00] uh, there’s a lot in the wire I really like, uh, especially how, like, the, the, the city politics play into the department and, and things like that there’s some good stuff there.
[00:05:08] Krzysztof: know, there is a segue to the investing world. There was a famous scene. I don’t know if you remember where, uh, an OG detective Lester. they’re all running around. They don’t know what’s going on, but he says every detail matters. And he shows the young whippersnappers. Like how to trace every last dot and to follow the logical conclusions of every last dot and then of course that blows open the case Eventually after all the dots get connected.
[00:05:35] Krzysztof: I kind of think that’s what good investors do to You know work from that mantra every detail matters and you don’t you never know ahead of time what? Particular detail will provide something fresh and exciting.
[00:05:50] matthew: Yeah, no, I mean, yeah, and there’s some parallels. You’re absolutely right. Like, um, you need to be thorough, you need to be detail oriented. And, I think mostly it’s like, [00:06:00] sometimes things are obvious and you have to know when they’re obvious and don’t look for like, don’t construct some conspiracy theory in your head when it, when it’s, something’s obvious, but also when something’s not obvious right away, like just keeping an open mind.
[00:06:12] matthew: being able to like, all right, well, I’m going to work. I’m going to go with this theory, but I also have to consider like, you know, the Butler did it or the wife, right? Right. Whatever. You have to, you have to keep an open mind.
[00:06:21] Luke: That’s great. Like Christoph and I are always dissecting each other’s stock picks on the podcast. and like keeping an open mind to like the bear case and hearing like someone else’s view. We’re doing battle over two companies right now, SpaceX versus ASTS SpaceMobile. So Christoph’s going to tell me next week, I think, why my SpaceX technology is a bag of shit.
[00:06:43] Krzysztof: I’ve already told you that I’ve already told you that numerable times. Maybe next week is when you actually listen.
[00:06:50] matthew: wait, they catch rockets. So, I mean, that can’t be like total garbage. They catch rockets. I’ve seen it. That’s pretty cool. I mean, [00:07:00] that’s, if you catch rockets, I mean, there’s, there’s something there.
[00:07:05] Krzysztof: Well, that’s the old leisure demand. It’s weird for me, actually. Uh, to be, split around Musk, uh, in terms of pure investing stuff, because I’m a Tesla shareholder, , so obviously I want that to succeed and I’ll believe everything he says about Tesla, sort of. But then when I see what he’s actually spouting, To make his inferior Starlink company appear way more than it is, I’m like, he’s outright lying, he’s bullshitting, and it’s kind of like, fascinating, you know, like, playing both sides in one human.
[00:07:36] matthew: I’ll tune in. I’ll, I’ll listen. I’ll listen to it. All right. Uh, like, I don’t know. I mean, they catch rockets. That’s, I mean, that’s not, is that CGI? Like, I don’t, I don’t get
[00:07:46] Krzysztof: No, no, well, they, they catch rockets, but rockets are not the things that send the signals to the, to your cell phones, so it’s a, it’s a whole different thing. Yes, they have excellent engineers, true.
[00:07:57] Luke: Well, we know what they do have. They have an excellent [00:08:00] moat because they’re the only ones catching rockets right now. And maybe that brings us nicely onto our first topic of today. Do moats matter? When you, when you kick us off, Matt, and tell us like, what is a moat?
[00:08:10] matthew: Uh, so yeah, I think a moat is just any kind of competitive advantage a business has, right? imagine a castle back in the day, right? And there was an evading army and they couldn’t get to the castle or sack the town because there’s a, a big moat around it.
[00:08:23] matthew: And I think that’s what we’re just, So we use it as a metaphor when we talk about companies. Do, does this company have something to protect it? When the competition comes, because like when you’re talking about like the free market, right? Like, um, and a capitalist economy, excess returns is always going to attract competitors.
[00:08:40] matthew: I mean, that’s like an economic law, right? if you went back 100 years or 150 years, whenever it was, and I make a beef patty and I grill it and I put cheese on top of it and I start selling it and people are like, wow, that’s really good. So everybody comes to my restaurant.
[00:08:54] matthew: Well, the restaurant down the street is going to see that and be like, Oh, I can make a beef patty and put cheese on top of it. And, and, [00:09:00] you know, whenever somebody comes up with a good idea, you know, it’s just, it’s going to be copied. And that competition will drive down returns. If I’m the only restaurant.
[00:09:08] matthew: anywhere that makes cheeseburgers, I can charge almost whatever I want for it, right? I can charge like absurd amounts, but like if every restaurant on the street and in the city and in the country sells cheeseburgers, well then I can’t, you know, because if I charge too much, people are going to go to other restaurants.
[00:09:24] matthew: So in economic moat, it’s just basically something where if a competitor comes in and tries to copy what I’m doing, like I have something to protect my profit margins,
[00:09:33] Luke: Christoph, you got, uh, you got anything to add on this one? Give us some examples of moats. What’s a, what’s an example of a strong moat?
[00:09:39] Krzysztof: Well, I won’t do that. Instead, I’m going to philosophically question the, this definition, because I think it’s so important. I’ve always been confused by, by what makes an effective moat because, you know, to Matt’s analogy, sure. I could see a castle, right. And the drawbridge and alligators underneath.
[00:09:59] Krzysztof: And if, [00:10:00] you know, I get that, but then I think of something like Coca Cola. And as far as I could tell, Buffett, you know, is the OG and investing in moats. And he invests, you know, a huge portion of his portfolio across the years in sugar water, which anybody could make in theory. So what was the moat? Oh, it’s the, it’s call it the label on the bottle, but how hard is it to make another shinier label?
[00:10:28] Krzysztof: You know, and I invested in Celsius before, but when arguing for a moat and what makes it effective, I’m sometimes really confused. You know what I mean? They seem sometimes counterintuitive. When you have, yeah, so I don’t know how you think of it, of that particular weirdness of effective drawbridges.
[00:10:51] matthew: Yeah, that’s a great point, right? Look at the Apple iPhone. one of maybe the most beloved product in the world, I would say right now. [00:11:00] And I think Apple is one of maybe the most beloved brand. But what it does, I mean, like, you know, it’s a small rectangle that fits in my pocket. And like, basically, A lot of companies can do it now, right?
[00:11:13] matthew: That can, it can access the internet and access almost any app I want. And it can use Android as their operating system. They don’t even have to come up with a new operating system, but they really wanted to. They could, uh, and it could do basically everything that the Apple iPhone does. And yet people still go out and, you know, especially in the U S.
[00:11:32] matthew: They’re going to buy the Apple iPhone. One type of moat is intangible assets, and that’s when you’d start talking about like a brand Coca Cola, why do I, choose that sugar water over Pepsi? Because I do, I always choose Coke. And it’s, it’s a very minute difference.
[00:11:50] matthew: I could tell in a blind taste test, which one’s Coke and which one’s Pepsi. Um, but like, it’s a very, very small, subtle difference. So why do I choose that every [00:12:00] single time? Um, and then why do some people choose Pepsi and why do I would never ever, ever choose RC Cola or some brand I’ve never heard of?
[00:12:08] matthew: like I never buy the Walmart Cola. I always buy Coca Cola classic. Why do I do that? Um, I don’t know, but, but I do. And I do think , like brands, I kind of think are like the weakest moat. Um, but I still think like people, there’s probably something there with psychology and everything else, but like, why do, why does it, why, why do you choose your iPhone every time?
[00:12:31] matthew: And there’s other switching costs with an iPhone, you know, you use Apple photos. So it’s not a perfect example, but I think it goes back to, To like World War II, like didn’t the G. I. s have Coca Cola there and they, they all had it and they came home and that’s all they ate and same with the Hershey bar, like, you know, every, every G.
[00:12:47] matthew: I. meal in World War II had a Hershey bar in it, so they came home and they loved Hershey chocolate, but I don’t know, but I think brands are a moat, I think that’s real with some brands, it’s not real with a lot of brands, and I think maybe we overstate that, but [00:13:00] But
[00:13:00] matthew: I think if you talk
[00:13:01] matthew: about some brands that have been around for a hundred plus years There’s something to it.
[00:13:06] Krzysztof: looking at it from the other way is also interesting instances where we don’t care about the brand. Like for example, I would claim insurance companies have very little moat because I don’t care. I honestly give me 55 competitors, whatever they’re called, however pretty their brand and image is the one that’s going to cost me the least probably overall is the one I’m going to go to. So
[00:13:32] matthew: maybe
[00:13:32] Luke: a, like a UK example of exactly that. You guys have these like, uh, like account switching stuff, you know, like when your energy is coming up for renewal, like a website that helps you find like the best deal. like some clever marketing guys in the UK, there were like a couple of competing, like comparison sites.
[00:13:49] Luke: And these guys came up with this meerkat kind of puppet creature thing. And like this Muppet meerkat and their mark, their website is compare the market. And then just because I had this meerkat, [00:14:00] whenever I need to think of a comparison website, my brain fills with meerkats. It reminds me, Oh yeah, compare the market, compare the meerkat.
[00:14:07] Luke: And I just go to that one just because like, it’s as good as the others, but that’s the one I remember. Cause that, you know, that little viral idea got stuck in my head from watching a TV advert like 15 years ago.
[00:14:19] matthew: So,
[00:14:20] Luke: of ra moat.
[00:14:20] matthew: on brands and there’s different types of economic moats and we can talk about all of them. But like, um, just because a brand is well known and recognized doesn’t make it a moat. And like, so I follow Pat Dorsey on this. None of this is original coming from me.
[00:14:35] matthew: And, you know, I don’t even like the companies Pat Dorsey really invest in when you look at his 13 F, but I think his teachings and he has a book on, economic moats is outstanding. And he gave a talk at Google. I dunno, 15 years ago, let’s say. Right? And he’s at Google and he goes, how many people have heard of like a Sony DVD player?
[00:14:52] matthew: And everybody raises their hand and he goes, alright, now how many people would pay a hundred extra bucks for a Sony DVD player? And nobody raises their [00:15:00] hand. So, you know, most things, basically calls like every piece of technology. He goes like, eventually it’s a toaster. Like nobody cares what kind of brand of toaster they have.
[00:15:09] matthew: You’re gonna probably go buy a toaster, you know, it’s like a purchase you make once every 10 years and you’re probably just buying whatever like looks like it works and it, you know, a very affordable price, you know, and maybe something that matches the aesthetic of your kitchen.
[00:15:23] matthew: And that’s it. Like those are the only considerations. when you’re buying a toaster, um, and, you know, most brands are, are, are like that. Um, I think in the old, like, you know, old days, but like 20 years ago, pre internet days, right? And you’re on a road trip with your family and you stop at like a rest stop and you’re going to eat dinner and there’s a Chili’s there and a restaurant you’ve never heard of.
[00:15:46] matthew: brands lower the searching cost if I have a choice between two restaurants and if, if I like Chili’s, so I like that brand to somewhat, I know what I’m going to get there, like, I know I can go to Chili’s and get fajitas for two, right? And I, like, and my wife and I can [00:16:00] split the fajitas and we’re, we’re happy and I never, ever heard of this restaurant, so I’m not going to take a chance on it.
[00:16:05] matthew: But like, I think those kinds of like brands are like of lowering the searching costs have disappeared because now I can just pull up, pull up Google maps real quick and go, Oh, look this restaurant, this other restaurant, there’s a Chili’s there, but this other restaurant has 4. 5 stars and you know, the parking lot looks kind of crowded.
[00:16:22] matthew: So like, I’m going to try that out. So I think like a lot of the, the brands types of moats. Like have disappeared, you go to the grocery store or Target or Walmart, wherever you shop and you see it like a couple of like laundry detergents there, you know, in the old days, like I could buy Tide, I could buy cheer and I know what I’m getting with those brands.
[00:16:41] matthew: But now there’s another brand there. I can look it up on my phone in seconds and see like, Oh, is this a brand like I’m going to be interested in or not? So I think brands used to lower the searching cost. And I think that’s kind of gone now, uh, because we can all pull the phone out of our pocket and, and say, like, is this other brand that I’ve never heard of?
[00:16:57] matthew: Is this good or not? and make our own [00:17:00] determination, but I, people still do love some brands like the iPhone, like Coca Cola. So I, I still think, you know, there are some brands that really do have moats out there.
[00:17:09] Krzysztof: All right. So maybe let’s talk about a different version of moats. And since, uh, Luke, you’re squeezing my shoes about, uh, getting more ASTS info. Here’s an open question. One of the reasons that I’m gaining, uh, a lot of conviction in a pre revenue company that is ASTS is because they have lined up partnerships with call it I’m, I’m loosely approximating.
[00:17:39] Krzysztof: 80 percent of the, uh, cellular phone providers for their product. So the big guys, Starlink only has one basically T Mobile and, the big guys, Verizon, AT& T, Vodafone, uh, all of those. are also in strategic alliance with [00:18:00] ASTS. So they’ve invested in them, and ASTS is okay with white labeling themselves, so that it’s all about their partners.
[00:18:08] Krzysztof: So it’s an obvious relationship, where Starlink is basically doing the opposite. People are saying that, uh, Starlink is kind of a Trojan horse with T Mobile, and T Mobile is in a bad spot. Question. to what extent would you consider that a strong moat?
[00:18:25] Luke: I’ll respond to that because you’re attacking my company, right?
[00:18:28] Luke: Um, so I think the nature of that type of moat, like having a strong contractual relationship can be powerful when you’ve got like years and years of collaborating and working together and your companies are like tightly integrated.
[00:18:42] Luke: I think this is a bad example of that kind of moat because these guys have like two satellites. They’ve done one demo. I haven’t read the contracts, you know, maybe they’re more like. Indications of interest or something, anyway, let’s not, let’s not make it an ASTS conversation. I would class those kind of relationships [00:19:00] as like, yeah, a moat, but I would put them on the weaker end again because like companies break up.
[00:19:07] Luke: There was one in the news the other day. Uh, new bank, I think, I think they’ve taken a bit of a hit. I might have this wrong. I think Nubank take a bit of a hit in the last couple of days because they were seen to perhaps be now competing with one of their prior partners. And so there’s like some concern that maybe there’s like a competitor coming, but maybe they enabled through that partnership.
[00:19:28] Luke: Businesses ultimately CEO has got to protect their own business.
[00:19:31] matthew: So Christophe, how about this? I think it’s easier. Let me quickly say what I think are like the four primary economic moats. And then let’s go back to this and try to dissect it and see what the moat is. So the first one I say is a network effect, which is basically like the phenomenon by like any value or service or good I have.
[00:19:53] matthew: increases when there’s additional users. So like think of the telephone. If there’s only one telephone in [00:20:00] existence, it is, it’s worthless. It’s a paperweight. It’s no good. And if, there’s two, so if I make two telephones and I give Luke the other one, all right, there’s some value there. I can call Luke and we can talk.
[00:20:12] matthew: You know, all right, that, cool, but it’s not, it’s not like really a game changer, right? And then, but like the network effect of like when there’s a million telephones and I can call any one of the other people on the million other lines, that’s a network effect. It just gets more and more valuable as more, as users increase with it.
[00:20:29] matthew: There’s switching costs. So, like. Uh, a good example, like it’s like your bank, right? Like, uh, and you have a checking account and like, I don’t know about you guys, but like the thought of like changing my bank is like, gives me a headache. And there’s things my bank does all the time that I don’t like. And I’m like, but I’m like, I’m not switching like, right.
[00:20:49] matthew: Because like, it just, that just comes with like a whole bunch of headaches. There’s a lot of paperwork. There’s entering all your new bank information into all of your bills online. And you always forget about one. And then you get a late [00:21:00] payment or a late notice. And then there’s like that, that, that tricky time in between when you still have some money left in your old account, but your new account is getting set up and you’re like trying to pay bills and trying to determine which, bill to pay from.
[00:21:11] matthew: So there’s like a switching cost. When it comes to like switching your bank account, um, and then there’s cost advantages And that that can come from like all kinds of things but for now, let’s just say like some like walmart like they they have cost advantages because of their scale you know other companies might have cost advantages because they have like Corner to resource.
[00:21:29] matthew: Texas Pacific land, right? Like the, the trust in Texas, they own most of the land on the Permian basin and they can drill really, really cheap oil on that. So, you know, they have some cost advantages there and that can come from lots of things. Ford, right. when Henry Ford made the Model T like he, he invented like a new business process, like with the factory and assembly line.
[00:21:48] matthew: To make cars, and for a long time that was a competitive advantage because he could make cars cheaper than anyone else, you know, he wasn’t hiring like a fine craftsman to craft the whole thing, um, you know, and then [00:22:00] there’s intangible assets, which are like brands, patents, uh, licensing rights, intellectual property, you know, you can talk about Disney, um, and I think most moats can be categorized into one of those four categories.
[00:22:14] matthew: So what you’re talking about is like, if you have a contract, like AT& T has a contract with, your space company. So I would say they’re switching costs there. So now. AT& T and I don’t know the specifics, so I hope I’m not messing it up. But like if AT& T has like a contract with, and has invested in a company to, to switch, I mean, there’s switching costs there.
[00:22:32] matthew: And on top of that, depending on how strong that contract is, but it might be like, uh, it could be an intangible asset because there’s like legal. stuff that AT& T, like if AT& T pulled back and didn’t hold up their end of the bargain, or the space company didn’t hold up their end of the bargain, like they might be sued, right?
[00:22:48] matthew: So there’s, I would say like that moat there is potential switching costs and there’s potential like, uh, intangible assets. So that’s how I would categorize it.
[00:22:56] Luke: Matt, do you have a company in your portfolio today [00:23:00] or one that you’re, you’re a fan of perhaps that you think has a particularly strong moat?
[00:23:04] matthew: well, hopefully all the companies in my portfolio have strong moats. I mean, that, that’s, that’s ideally what I look for. Uh, like one example I love is, is Moody’s actually. So like, uh, you know, or any of the rating agencies. So like Moody’s, if you’re not familiar with the rating agencies, if I’m a city and I want to raise money for new water infrastructure in my city, right.
[00:23:26] matthew: So like I need to raise debt. So I’m going to issue a municipal bond for 200 million, the cost of the project. Right. Like I almost have to go to one of what they call the big three, which is S and P global. Moody’s or Fitch. Those are rating companies. Why do I have to go to one of those big three? So, like, back in the 70s, right?
[00:23:46] matthew: The SEC approved, I forget what they’re called, but like some kind of like, there’s a designation for it, like Statistical Rating Organization. But they only granted credit to three companies, and it was Fitch, it was S& P, and it was Moody’s. So for like 30 [00:24:00] years, uh, into the early 2000s, Like, those were the only companies that could give ratings to this kind of debt if I’m a city.
[00:24:07] matthew: So I had to go there. Now, in the early 2000s, they opened it up. And so now there’s like 25, 30 of these rating organizations that could theoretically, uh, grant a rating if I’m a city looking to, to build new water infrastructure. But I’m not going to any of those other 25. I’m only going to the big three.
[00:24:28] matthew: And usually you have to get rated by two. So usually I almost have to go to like Two of the big three. So why? Because like there’s a, I’ve, I’ve collected quotes over the years, but they’ll talk about like investors, hold on, I think I actually saved it up. This is from like an, an old Forbes article and they’re talking about Moody’s and, this bond trader goes, a broker calls you up and says, do you want to buy this bond?
[00:24:52] matthew: One prominent fixed income investor said, uh, he goes, you say, what’s the rating? And he says. S& P AA and you say sure. [00:25:00] He says XYZ firm AA and the conversation is totally different. Because as soon as you go to another company, nobody trusts that. And so even though like the, the legal, like the intangible assets are gone, there’s no more regulatory hurdles to becoming one of these statistical rating organizations.
[00:25:17] matthew: Those are gone. The brand is just so strong and like Moody’s has a slide up like on their investor deck when they go like basically like if, so if I’m a city, like I don’t care what Moody’s charges or what S& P charges. To rate my bond because i’m gonna get a lower interest rate. I have to pay on the 200 million dollars So whatever I pay moody’s if moody’s charges and i’m making this up, but like moody’s charges 20, 000 and I can go to xyz and get it for ten thousand dollars I could care less because if moody’s rates it i’m going to be paying way less interest rate because that’s what’s going to interest people who will buy my bonds so I can raise the money for this water infrastructure project Like it has to be rated by one of the big three or people won’t buy it.
[00:25:59] matthew: Uh, that’s [00:26:00] how strong those brands are so I do think To me and that’s one of the strongest moats if you’re familiar with uh, like with what happened in the financial crisis Um, you know, or you watch the movie big short or you read the book like Moody’s and SMP were the absolute villains there.
[00:26:15] matthew: There was a lot of winners, you know, the big, short highlight, some winners, there was a lot of losers and people did things wrong. And a lot of that can be chalked up to incompetence. But one of the main reasons everybody was like getting. Wrong was they thought these mortgage bonds were safe and they thought they were safe because Moody’s and S& P were giving, giving them triple A ratings, like, even though it was like full, full of garbage.
[00:26:39] matthew: And doomsday scenario for Moody’s and S& P and it didn’t matter at all. They got fined. They paid their hundreds of millions of dollars to the government business as usual. Nobody cares. Nobody blinked. You still go to Moody’s and S& P. I can’t imagine. A scenario worse than that, that they caused, that they were like a pivotal player in, [00:27:00] and nobody cares.
[00:27:01] matthew: Nobody cares. There’s still the big three. Between those three, Moody’s, S& P, and Fitch, they have like 95 percent market share.
[00:27:08] Krzysztof: Hey Matt, I care.
[00:27:10] matthew: Okay, you care, but are you raising money? If you had to raise money, you’re still going to go to Moody’s and S& P. Because if you have to raise a hundred million dollars to build a space rocket, like you’re, you don’t, you don’t want to pay 4 percent interest rate because you care so much that S and P were villains 15 years ago, you know, you want to pay a lower interest rate
[00:27:31] Luke: so Matt have you ever had something in your portfolio and you felt the moat has broken in some way and then as that steered you out of a stock?
[00:27:40] matthew: in hindsight or at the time, well, let’s talk about PayPal. So it’s a stock I recommended several times at seven investing, sadly in a stock. I. I, at one point at its peak, I had like a 10 bagger in it and we can, we can revisit this when we talk about never [00:28:00] sell. And I thought it had a real network effect, you know, I mean, had like hundreds of millions of users that used it all the time.
[00:28:06] matthew: Um, I used it in my personal life and, uh, like I could just see how easy it was. It made digital payments real easy. And then the COVID happened. And, and what’s funny about COVID is like, it definitely fooled me. There was a lot of like winners or. companies that seemed like winners at the time, but actually COVID turned out to be like one of the worst things I think that could have happened to them.
[00:28:29] matthew: And I, I think that’s because, it brought a lot of attention, to like their areas where they could dominate a niche before, and then other companies would move in really quickly because of COVID, because it kind of made it more necessary. Um, but PayPal probably was already doomed. I mean, like with things like Apple pay and Google pay and just things like that, I am by nature a slow technology adopter. So, like, I was probably one of the last of my friends to have a smartphone. I was one of the last of my friends to, [00:29:00] you know, do a lot of things. I’m very set in my ways and I, maybe that helped me miss it. Like the mobile payments and how that was changing.
[00:29:07] matthew: but in early 2021, PayPal gave some guidance that basically said they were going to double their users in the next five years and within 10 months. And so the stock skyrocketed, the stock had already gone up a lot. Um, the stock skyrocketed more. And, and within like 10, 11 months, they had to cancel all that guidance and said, basically they were not only not going to double their users in the next five years, but their users might actually slowly, steadily decline.
[00:29:33] matthew: And, uh, and that wrecked the stock. So like, whether it ever had an economic moat or not, like I would argue that at one time it probably did, but I missed it when that economic moat eroded and dissipated and Then my instincts to hold on to a stock during bad times held me, you know, compelled me to hold on to it longer than I should have when the thesis had [00:30:00] changed.
[00:30:00] matthew: So, um, so that, that would be an example of where in hindsight. I was like, Oh yeah, their moat is gone that they do not have a competitive advantage. Um, lots of companies can do this now and there’s no real switching cost of going from PayPal to Apple pay to wise or, any other now, I mean, now there’s like a dozen Zelle, uh, you know, I mean, I really, I missed that one. I missed the economic moat eroding. And, uh, you know, it was a stock I was very intimately familiar with. And, uh, I totally missed it.
[00:30:35] Luke: I’m curious about your take because I’ve, I exited Shopify from my portfolio, probably six or seven months ago. I finally sold my last piece of it. And it’s a stock that I was really in love with. And I was a big fan of at seven investing. And I know you and I kind of did battle of like Shopify versus Amazon several times.
[00:30:53] Luke: Like I’m, I’m a massive Amazon bull these days. And I wonder if I’ve been a bit too hasty in [00:31:00] judging Shopify’s moat as eroded. So my thinking was. Like they in, they, they made some unforced errors, right? They spent a ton of money. They bought, deliver, they brought like logistics in house. And then they realized this was probably like the wrong answer.
[00:31:15] Luke: And I think Toby Lutke’s quote was forget about the side missions. We’re going to focus on like the main thing, which is commerce. And so they outsourced their logistics to Flexport, like Flexport provide services to a whole bunch of other e commerce platforms. So I started to look at it and go.
[00:31:32] Luke: Like what is their moat really? Like how do they really compare to just like a WooCommerce or website builder? What are they doing that like when they were doing the physical stuff, like the real moving stuff from A to B, I could see they were doing something hard that would be hard to replicate. But then it’s just software.
[00:31:49] Luke: And if it’s just software, like is the mote gone? I dunno. Do you think I’ve stepped out of this one too soon?
[00:31:55] matthew: Man, we’re the never sell the session is going to be great. All right. [00:32:00] Because so Shopify, it was luck, but like I sold it almost at the top. Like I was in it for a very long time and, uh, the valuation to me was like, I, I, I couldn’t make sense of it anymore, but I kept holding, holding, holding, and I was like, finally, I just kind of didn’t have enough and like, literally, it’s like the one time in my life I could say, like, I point to and like, wow, I’m, I freaking nailed it, I mean, it was all luck.
[00:32:22] matthew: I mean, I’ve never, ever done that again. I’ve never bought at the low. I’ve never sold at the high, but, but Shopify, like I, just kind of sold at the right time. I think you can make arguments and it’s funny how, like when you sell a stock, it’s, it’s just harder to keep track of, you know, it’s like a, I really liked Toby and the CEO of Shopify.
[00:32:40] matthew: I liked their leadership. I think Harley Finkelstein is still there. Um, but like great executives. I love what they’re doing. I think there’s some moats there. I think they have like some network effect for their services and there’s definitely switching cost if I’m a seller on Shopify, you know, and my payments come through Shopify and I’m using their, marketing [00:33:00] services or, you know, there’s a dozen services they have, like as little add ons, they can, Uh, sell to their vendors, that would be very costly to move off of Shopify onto another platform.
[00:33:10] matthew: And, um, so I, I do think they have like switching cost a moats. the problem with the switching cost moat is like that doesn’t help you get new customers. Right. That helps you keep your customers, which is obviously very important, but you also want to win new customers. and Amazon offers a lot too.
[00:33:27] matthew: And, uh, can they probably offer it cheap and full disclosure? Amazon’s my largest position. I think they have wonderful moats all over that business. love what they’re doing. and can they deliver it faster? So like I remember when Shopify announced they were getting into logistics and they were saying we were spending and it sounded like a lot of money, right?
[00:33:44] matthew: I forget what it was, but I think it was like two billion or two and a half billion dollars to build up all our infrastructure so that we can have everything delivered in two days. And this is I want to say this is 2017 2018 right? Yeah. And that sounded great. I’m like, wow, [00:34:00] they’re going to get everything sold, you know, delivered in two days.
[00:34:02] matthew: That’s what people want. I’m not sure that’s what people want anymore. So like, you know, when we talk about Amazon, like Amazon delivers now, like same day, like I remember I’ve told this story before, but like there was a computer part, my son was into building computers and there was a computer part he ordered, like before school one day, he’s like, dad, can you just order this real quick?
[00:34:19] matthew: Blah, blah, blah. I’m like, sure. Whatever. I pull up my phone. It’s so easy. Right. And I just find it. I ordered it. It’s done. We, I get home from work. He gets home from school, whatever. He’s like, dad, where’s my part? I’m like, what do you mean? Where’s your part? He’s like, well, we ordered it this morning. I’m like, well, I don’t know.
[00:34:33] matthew: And I look it up and whatever. It’s getting there the next day or something. And, but his expectations have told like what I think getting something delivered in two days is a miracle, right? Like, I mean. When I grew up, if you ordered something off of a mail catalog or something like that, or when the internet was new, you were like, well, I’ll get it in a month from now.
[00:34:51] matthew: You know, like I’ll forget about that. I ordered this and then it’ll come and I’ll be surprised and remember that I ordered it and it’ll be like Christmas, but like [00:35:00] now it’s like. It’s same day on so many items and or next day on almost everything else, two days doesn’t do it for people anymore.
[00:35:09] matthew: And I just, you know, I think the expectations have changed and I don’t know if anyone has the infrastructure, maybe outside Walmart that, that can really do that. Um, which is incredible, but like, so I think that’s what makes it tough for Shopify. I think they have a niche. If you’re a small seller, small.
[00:35:26] matthew: Okay. And they have big sellers too. Don’t get me wrong, but like. And you want to set up shop. I don’t think there’s any place better to do it except maybe amazon So I you know, I I don’t know I Shopify is a great company. I just think they’re they’re competing against the beast
[00:35:42] Krzysztof: I have a bird’s eye view on this, which is one, to Matt’s point, in the capitalist framework, the giant behemoths, gorillas, over time, I think, end up taking more and more until they get broken apart by [00:36:00] monopoly rulings. So in this case, I think the advantage goes to, Amazon, but there’s also listening to this.
[00:36:06] Krzysztof: So far, there’s also something about moats down one in one sense seems obvious and simple, right? Castle drawbridge it’s there or it ain’t. And in other ways, it’s like you can’t actually predict it, even if you’re really super smart and you’ve, you know, read all these things because life is. complicated or complex.
[00:36:27] Krzysztof: So I want to say something that I don’t know if you know this, but in every episode, I try really hard to say something that pisses Luke off really hard. Like it’s my job as the resident gorilla.
[00:36:38] matthew: Luke looks at he has that british demeanor. He’s cool as a this man. You can’t
[00:36:42] matthew: piss him off. Yeah, but watch this reaction when I say, I don’t know, I can’t back this up like with like pure definitive proof.
[00:36:54] Krzysztof: But I keep getting an incredibly strong intuition that [00:37:00] moat is not as impenetrable as, as Luke thinks in that, in that to this point of what is a good moat and that in the age of AI in ways that we can’t yet understand or know because it’s not yet been built or whatever.
[00:37:17] Krzysztof: That companies that, for example, rely on, I don’t know, AI networking or, or I don’t know how you would describe CrowdStrike’s moat, but something to do with like networking AI effects and relationships that that too will be disrupted in what we think of as a moat now won’t be later. You still have your, you’re still not exploding.
[00:37:38] Krzysztof: Or you almost exploded.
[00:37:40] Luke: We, uh, we had this argument a few podcasts ago. I think there’s definitely something in what you’re saying, right? I regularly just look down my whole portfolio and just ask myself the question like, like, what’s, what are the risks to each of these businesses? What’s going to get them? And like, every time I’m saying to myself, is AI going to help them or hurt them?
[00:37:58] Luke: Like I was going to trim [00:38:00] Palantir again recently, but I’m like this deep seek news, like the efficiencies, this is going to support them massively. It’s going to be like a tidal wave because suddenly every business can afford to do incredible stuff with AI. And that’s just going to play into Palantir’s like backyard.
[00:38:17] Luke: But you’re right. Maybe CrowdStrike could get hurt by this.
[00:38:20] matthew: I think I do this a lot like Microsoft, another one of my top positions in my portfolio because I love their moats. And whenever I come across, so I come across a company like Shopify and I say, can they really compete with Amazon? And I look at a company like CrowdStrike and I wonder, can they really compete with Microsoft?
[00:38:39] matthew: who sees more digital tax or who’s, who’s on more computers and in the cloud more than Microsoft and if I’m an HVAC company, if I’m a, a lawyer firm or attorney, you know, something like that, I don’t want to like it. Spend my day trying to find the right cyber security company or the necessarily the best one, but if I have to go to Microsoft anyways for a [00:39:00] million things, and then they say, buy our cyber security package, and I, I just think that easy, right?
[00:39:06] matthew: and to me, the rest is gobbledygook, right? Like Microsoft will say why their security stuff is the best. CrowdStrike will say why theirs is the best. And then Fortinet and all the rest, right? They all say. They’re the best, or they have to have this or, or that. And I don’t know, you know, like I’m, I’m a cop, but if I’m a plumber or a lawyer or an accountant, like, I feel like I don’t know either, to me, the distribution that Microsoft already has is, is, it’s just incredible. I’m always like, like, you know, I’m not a cyber security expert. So maybe CrowdStrike is better. I don’t know. But then I also feel like, well, most people aren’t cybersecurity experts. So it’s almost like imperative for CrowdStrike to come in and tell me why you’re better.
[00:39:46] matthew: Now, if they have like a huge runway still in the fortune 500, where they have like whole, like, you know, these companies have. Like IT branches and you can just go talk to the head IT guy and maybe they know. So at a certain point, like, I feel like their reach is [00:40:00] maybe a little limited, to get to like that next tier of business down.
[00:40:04] matthew: Um, but maybe I’m wrong, but a lot of times I will go look at a company, whether it’s Shopify and say, can they compete with Amazon? I look at CrowdStrike and I think, can they compete with Microsoft? And to me, that’s a. That’s a high hurdle and maybe they can. I mean, there are companies that do compete with these giants.
[00:40:18] matthew: I just think it’s hard.
[00:40:20] Krzysztof: I think, uh, Badger, you have a great company that you’re very fond of that in recent days has taken a little bit of a haircut. Uh, but when I, when I listened to you describing axons moat, it really makes sense as a perfect example of, you know, a moat that seems like pretty firm. You want to talk about it a little bit in terms of moat.
[00:40:42] Luke: Well, and this is maybe I’ll. Defer this one to Matt and get his take because, like, Matt, I’m assuming you and your colleagues are using like Axon’s products pretty much every day. Okay,
[00:40:53] matthew: uh, we’ve talked about Exxon before Luke and, uh, it’s an incredible moat, , that they are basically a monopoly and, [00:41:00] when a law enforcement agency. Switches to Axon and they eventually go, they’re eventually going to get evidence. com, which has a network effect. In my job, like when I upload evidence of a case, it goes on evidence.
[00:41:12] matthew: com and then the state attorney accesses it from there. With the cameras,, it’s cheap to get the cameras and then you pay that high monthly subscription every day, uh, every month. You know, same thing with the tasers, and they do incredible work with those tasers.
[00:41:26] matthew: When I started, it was like a one shot cartridge and you had to switch the cartridge. There’s a whole ordeal. They’re easy to miss. I mean, now they’re making like tasers with like eight shots and you can shoot it different ways. It’s great to me. It’s, it’s complicated, but it’s, it’s crazy what they’re doing.
[00:41:40] matthew: And those are one, there’s really no competitors that can do all those things. And they’ve already locked up most law enforcement agencies now. You’re not switching, you’re just growing. Like, you know, as the population grows, you hire more officers, uh, you hire more detectives that use evidence.
[00:41:55] matthew: com, you need more cameras, the storage goes up, you know, on [00:42:00] cloud storage. I mean, all those things, make it very difficult to switch from Axon, an incredible company.
[00:42:06] Luke: at least you guys are not attacking one of my holdings. We all like Axon, fantastic. Fuck CrowdStrike, but we’re happy with Axon. Okay.
[00:42:16] Luke: Should we,
[00:42:17] Luke: uh, should we bring it round to the Magnificent Seven because we talked about a couple of them. Sounds like Matt’s a fan of quite a few. I own four of the seven. Let’s list them just so we know who we’re talking about. I think the Mag7 is Apple, Microsoft. Alphabet, Amazon, Nvidia, Tesla, and Meta.
[00:42:36] Luke: So Matt, you’re a, Oh, let me give, give me, give a couple of stats actually to tee up this conversation. So something like interesting has happened. I think in the last couple of years, I’ll pop a graphic up on screen. Like on here, you can see back in 2014, the magnificent seven was just under 10 percent of the total.
[00:42:56] Luke: Market cap of the whole s and p 500 at the end of [00:43:00] 2024, it was nearly 35%, like seven companies basically being like a third of almost, you know, the 500 biggest companies market, total market cap. So that’s like incredible dominance. And Matt, you shared a really interesting tweet I moatd, yesterday.
[00:43:17] Luke: And you shared your view on large cap. US stocks outperforming small caps for a record eight years and small caps are now less than 4 percent at the US equity market, levels last seen in the 1930s. So like the world has pivoted towards these guys and that’s why we’re calling them the magnificent seven.
[00:43:39] Luke: Are the Magnet 7 dead? Are we about to, uh, wind back? And could it be, like, the rise up of the mid caps and the small caps?
[00:43:48] matthew: So I think you have to separate ’em, right? I, I don’t think there is a group, I know we talk about ’em as a mag seven and, and everybody does, but I think you could go through ’em and, and make, you know, [00:44:00] at least educated guests. But I’m gonna be the last person to come on here and talk about Nvidia.
[00:44:04] matthew: it’s almost audacious for me. To question like the last one of the last times we talked was about two years ago, and I was trying to convince Seven investing team to sell NVIDIA because it was too highly valued and since then it’s only gone up a gazillion percent You know after you had recommended it, so I’m definitely not going to talk about NVIDIA Like you can give your opinion of NVIDIA and I know you’ve already done that.
[00:44:28] matthew: I mean, it’s an amazing company. I don’t know what to say. Eventually, I think this CapEx that the rest of the Mag7 is basically paying NVIDIA is going to die down. But I have no idea when, like, I thought it was two years ago, right? So, like, I don’t know. So, uh, you know, I think NVIDIA. At some point, I think NVIDIA is going to fall like 50 percent or more.
[00:44:53] matthew: I mean, that’s, I think, consistent with its history, but it could, it could quadruple before, you know, [00:45:00] it could, in the meantime, it could quadruple again. I, I honestly have no idea. Just the other day, actually, I was at an investor presentation, by Poland Capital and they did, Like a presentation on AI and they projected like Nvidia’s data center revenue to, uh, double over the next two years, So I have no idea. So when you talk about Nvidia, and I think them or Apple is like the biggest company right now, right? Like, but like, I just, like, I don’t know. Like, I think at some point it’s going to fall, but what it does in the meantime, like I said, I think it’ll fall in half, but could it quadruple in the meantime too?
[00:45:32] matthew: Yeah. Yeah, it could. I just don’t know. And I’m glad you took a victory lap on that. It was well deserved, very well deserved victory lap. And, at some point I think that massive AI capex from the hyperscalers is going to end. I have no idea when, though.
[00:45:45] Luke: Maybe just to return the compliment, so I also remember a 7vesting conversation where the whole team wanted to sell Meta, Facebook, and you stood, you held your ground and said, No. Like, Zuckerberg’s turning this thing around, and you’ve been proven very, [00:46:00] very right on that one.
[00:46:01] matthew: Yes, thank you. Thank you. That might have been the same conversation, which is, it might have been like very wrong and very right all at once. Yeah, Meta, I mean, I think it’s a super impressive company. I think Zuckerberg, he’s super young, still. and like just always underrated. And, you know, I forget.
[00:46:20] matthew: When exactly we had that conversation. Um, but you know, at the time one of the things we could look at was like meta repurchasing and stock. And it looked like it had repurchased stock in the year prior to its downfall, like at really, really bad levels.
[00:46:34] matthew: And now when you look at that, you’re like, wow, they bought all that stock back at like great levels, right? Because it’s like triple the price from there or whatever. Um, they’re still growing revenue like, uh, at. 20 plus percent. I think, their full year EPS grew at 60 percent, uh, plus, they still have a lot of cash compared to their long term debt.
[00:46:52] matthew: Um, and they’re still growing users, which is incredible because it’s like basically the whole developed entire adult [00:47:00] world is on their platform. Right? Um, and it’s not even that expensive still. I mean, it’s like, I think forward earnings at like 29 times, 30 times. just an incredible company. And they, I think like, so this is my friend.
[00:47:13] matthew: Uh, I don’t know if you guys follow him, but the science of hitting. And, Alex Morris and, and he writes about meta and he’s, he was talking about like why the stock has gone up and he goes, I think the answer is straightforward. There has been some needed clarity on the near term financial benefit from these investments because they’re capex.
[00:47:30] matthew: Has exploded and I think that’s what people I think that’s what we were all questioning At that time when we were talking to invest in they’re spending all this money. Is it’s just a good idea I mean, they’re just Seemed like just seemingly seemed like they’re just spending money into oblivion and are they lining cash on fire or not?
[00:47:46] matthew: But I think now we he goes with strong evidence. That meta is seeing an attractive roi on all these investments And so what was once viewed skeptically is now seen as the past to improved results at the family of apps for meta And I think that’s what we’re [00:48:00] seeing. I mean they have seen an incredible return on investment from all the capex they poured in The the capex they spent on the metaverse.
[00:48:07] matthew: We’ll see I you know, that’s still I think you know,
[00:48:11] Krzysztof: Actually, if I met, if I made, a comment on as you were talking, I think, yeah, uh, near term, you’re right about all of that. But I read up quite a bit of, uh, around the metaverse. And because I’m, uh, interested metaverse right now. legitimate crypto projects, which are tiny, tiny amount, uh, relative to the circus.
[00:48:35] Krzysztof: I’m convinced that the world is moving to blockchain and that the metaverse. In fact, will be the next frontier. And obviously meta is the company that’s going to be the, as it’s in their name, place you go for the metaverse. So it’s futurism, and we can’t prove it yet, but my bet is on meta for those reasons as well.
[00:48:57] Krzysztof: So I’m bullish meta, despite [00:49:00] my own hesitancies about its past.
[00:49:02] matthew: Yeah, to me it’s one of those companies where you can kind of take a flyer on the Metaverse, but you get the family of apps in the meantime, which is just a cash flow machine. And, if the Metaverse doesn’t work out, I don’t think that breaks the thesis for me. So I think, like I said, I think 30 times forward earnings.
[00:49:17] matthew: So it, I, I still don’t, you know, it’s not for a company that grew its earnings at 60% last year. I just think it’s a great company in Zuckerberg is just. , Continually, underestimated, I will say for that call, like when we did on meta, I think that I’ve never done more.
[00:49:34] matthew: Due diligence on a company than that. Like on, on X, I was like DMing people and scheduling zooms, uh, with people who did online advertising and just like, and, and they were more than gracious with their time,
[00:49:47] matthew: like, detail matters. There we go.
[00:49:49] matthew: because I remember it like
[00:49:51] matthew: a lot of smart people were saying like, no, this company’s not doing well at all. Like time to get out, time to get out. And, uh, like that was [00:50:00] probably the peak of my like research or diligence on a company.
[00:50:04] Luke: So we’re, uh, we’re giving you a pass on NVIDIA. We’ll let you not have an opinion on that one. But if you had to pick, say, your favorite and your least favorite of the Mag 7 today, all things considered, valuation, everything else, how would you, uh, how would you stack them? Do
[00:50:20] matthew: , it would either be Meta or Amazon. just incredible company. And, when you look at AWS, I think they’re incredible switching costs, like in companies, entire digital infrastructure is, is on AWS. And when you look at their logistics and fulfillment that they have built out, I don’t have the current stats in front of me, but like, if you look at the square footage, just the raw square footage they have devoted to logistics and fulfillment and deliveries, and all the rest, it dwarfs anything else that anybody has in North America.
[00:50:54] matthew: And it’s not like they have double what Walmart has, they have like ten times what Walmart [00:51:00] has. , When they reported their full year earnings, they were, uh, they talked about like how they had delivered at the fastest speed ever for Prime members in 2024. And they like, I think they had more than like 65% more items to US Prime members the same day or overnight than the previous year.
[00:51:18] matthew: And, and I told that story about my son, you know, I think expectations now have changed where five, even five. Years ago, 10 years ago, two days sounded great. Hey, I ordered this and in two days, I’m gonna get it. That’s fantastic Now it’s like I, if I order it right now, I might get it by dinnertime.
[00:51:38] matthew: And that’s like, I don’t know how they do that. How is that profitable? I ordered a toothbrush. You know, if I need a toothbrush because I dropped mine and my dog licks it or something like I might have it by the time I need to brush my teeth tonight before I go to bed. I mean, that’s just incredible. So if it saves me a trip to Walgreens, so I don’t have to buy my toothbrush.
[00:51:56] matthew: Like I’m all for that. I don’t know how that’s profitable for them, but I [00:52:00] know I’m never leaving prime. Like, ever! Like, I will never leave Prime. The only thing that worries me about Amazon is like their day one mentality. Where, everything’s day one, you know, we’re always growing, we’re always investing in the next big thing, and the bigger we grow, we have to invest in bigger and bigger things.
[00:52:16] matthew: And I kind of wish they would go to day two and just say, like, let’s, let’s worry about becoming more profitable and, you know, buy back some shares. You know, something like that. I worry that as long as Bezos is alive, they might never get there and they might spend money on a bad project next time.
[00:52:35] matthew: But I think money, even when they overbuilt during the pandemic, they overbuilt their logistics infrastructure. And they said that, was fine with that. Like, I know if you build a warehouse. In South Florida somewhere, like eventually like e commerce will continue to grow and you, you will be able to use that warehouse, just maybe not whatever for the first year or two years or whatever it is.
[00:52:56] matthew: Um, but I was never worried like they’re just, you know, like, Oh, just [00:53:00] totally gone. Just forget about it. It’s, it’s a wasted money. Uh, and like for things like logistics and infrastructure, like I don’t think anybody’s going to catch them. And in the cloud, they’re one of the biggest players. And I don’t think that’s changing either.
[00:53:11] matthew: whether Microsoft is slightly ahead of them or not, or Google cloud, you know, catches up more all possible, all well within the possibility, the realm of possibility. But I love Amazon’s economic moats. I love their company. It’s, it’s hard for me. Uh, it’s my largest position and up until recently, I was still, I was still buying shares.
[00:53:32] Luke: any of us have one of the seven we think might be in more jeopardy than the others?
[00:54:00]
[00:54:19] matthew: Well, Christophe, I would like your opinion on Tesla. I feel like it’s audacious for me to come on here and talk about NVIDIA to, to Luke, but I feel like it’s audacious for me to come on here and talk about Tesla. sometimes I feel like Tesla’s like, is it like, okay, here’s my very high opinion of Tesla where.
[00:54:36] matthew: I don’t know the details, but like, it’s like, if it’s just a car company, I think it’s wildly overvalued. And if the, all the energy projects and all the robots they want to build or whatever, if that doesn’t come exactly to like what, what’s that going to look like and what are the odds, I guess, that comes to fruition.
[00:54:53] Krzysztof: it’s interesting living in Tesla’s Mecca now. I’m basically next door to Captain Ahab himself. [00:55:00] Uh, and it’s weird to say, but I think, forget all the political complexity of this, but Elon has positioned himself to be potentially the world’s most powerful man. Which is a shocking thing to say. I like this kind of thing exists.
[00:55:19] Krzysztof: It’s like Napoleon, but for 200 years later, and he surrounded himself with the world’s best engineers. We know that, they could handle whatever complexity that comes their way, between launching and catching rockets, to, outside the shitty Starlink thing, to, the world’s best cars.
[00:55:40] Krzysztof: When you take away the regulatory hurdles that probably would have limited them, I can see, legitimately see, a world in which their what feels to us now futuristic robots are the de facto reality, including the, you know, robots that replace labor or [00:56:00] change manufacturing to the same degree that Ford changed it as you were talking about with, the model T.
[00:56:06] Krzysztof: And when you stack all of the, call it vertically related components from the robots to driverless cars to the energy products that could kind of help power all of that and all the, ways in which Musk is completely unafraid to invest as fast and hard in the AI as possible. I am one of those people that thinks it could be the world’s most valuable company by magnitudes.
[00:56:33] Krzysztof: And right now, I mean, obviously it’s hard to put quantifiable data on things that are still non existent, but probabilistically wise, I think it’s more likely than not. And that’s my bet, you know, out of the right out of the mag seven, it is the only company that I essentially have. a full position in, uh, I only have a [00:57:00] nibble in, NVIDIA
[00:57:01] Luke: It’s a funny one, isn’t it? Because for all the reasons you guys have both just said. You can’t, you just can’t value, you can’t do anything objective to understand the valuation of Tesla. It doesn’t make sense, or it makes such incredible sense. It’s all about like the story, and whether you believe in that story and your kind of vision of the future, that’s going to dictate like where it ends up.
[00:57:22] Luke: Because in many respects, it’s probably. the easiest to catch. Like they’ve got BYD hot on the heels, NVIDIA Drive is going into like a bunch of other manufacturers, Waymo is arguably like the better autonomous driving solution we could debate that. I feel like competition is coming for them hard.
[00:57:41] Luke: There are other people making robots, but are they Doing it with the same mindset as Musk, where he’s really thinking about like the economics and being able to like production line these things at like 30, 000 a piece. You know, maybe other people have got like Atlas and some of the other guys have got like incredible robots, but I’m sure they can’t [00:58:00] produce them at the cost that Musk is trying to.
[00:58:03] Luke: And it’s that cost, like that engineering, that’s really the revolutionary thing that, as you say, Christoph, could change the world, but just maybe they never get there.
[00:58:11] Krzysztof: you know, it’s interesting when I hear you use the word story, it takes me back to the conversation around moats, where I feel like we need some intermediary word that’s a little more nuanced than that, because on one hand, yes, everything I mentioned. Because it doesn’t exist yet, at least not at any scale, is still a story.
[00:58:32] Krzysztof: But, at the same time, it’s Tesla’s already existing manufacturing, call it brilliance, and infrastructure, and call it AI knowledge, and the fact that my car now drives itself already, that’s not a story, that’s already reality. So somewhere in the middle between, I’m not, you know, I would say metaverse?
[00:58:59] Krzysztof: [00:59:00] is closer to a story because only meta, I guess, knows the reality of how far they are. And you know, it’s still, but Tesla, I have to swallow when I hear, that it’s call it just a story at this point.
[00:59:19] matthew: here’s how I do that, work that out mentally is for, uh, I think there’s companies can outperform in the short term for lots of reasons, right? Like you could buy a company that sells at four times earnings and you buy it and it goes to 10 times earnings, right? And maybe nothing much changes. It just got re rated by the market.
[00:59:42] matthew: So it outperforms for that time. You can buy a company that comes out with a, Cool marketing strategy, right? Because that has a little logo on their website, right? Like the, their mirador or whatever it was, or Geico comes up with the gecko, like we don’t care about insurance companies, but it comes up with a, like a good marketing campaign and [01:00:00] maybe that increases sales and, and over the short term that can drive sales.
[01:00:05] matthew: And then I think a company can innovate, right? Like, so somebody can innovate. So. Like just going back and thinking about like a higher level. Like at some point, Henry Ford was like, I’m going to build this assembly line, this factory with an assembly line. He didn’t have a cost advantage yet, but he had this idea if I build a car this certain way, I’m gonna have a huge cost advantage and I can sell a much cheaper and get them to everybody.
[01:00:26] matthew: Then, um, then what’s being done now. And so he innovated his way and I, to me, innovation is what builds a moat. Okay. So like, I think you’re, you’re in the building stages of a moat. Now, maybe you don’t get there. Like maybe your idea is wrong or, uh, something else happens and, uh, or there’s a A paradigm shift somewhere else and you just get leapfrogged technologically.
[01:00:48] matthew: But I think you can innovate your way to a moat. And I think that’s what Musk is probably doing. He is innovating his way. Steve Jobs with the iPhone. Like, uh, when it first came out, like, I don’t know if Apple’s brand was all that great. And I [01:01:00] don’t know if there were any switching costs for that first few generations of the iPhone.
[01:01:04] matthew: But he was innovating, uh, which drove sales. And that innovation built the moat for the iPhone. Just the way it’s the same way. Like if you went back and Henry Ford innovated his way to serious cost advantages for building cars. So to me, innovation is what, it’s what builds moats.
[01:01:19] matthew: And I think that’s where, you call it a story and I do too. I call it that, and it is, but it’s like the story of like how he’s trying to build a moat. That’s how I think of it mentally.
[01:01:29] Krzysztof: Luke, the second half of your question, and maybe you want some, uh, airtime on this. What used to be my favorite company of all time, Apple, uh, I’m one of those loyalists that remains a question mark for me because on the one hand it’s like, damn it, this company hasn’t done any, well, not anything that’s not, not, not fair.
[01:01:49] Krzysztof: Uh, like when I think of the AirPods is now like a massive product and the Apple watch, you know, past Steve jobs, but for the world’s first [01:02:00] or second most valuable company. It’s so iterative that you wonder is what the hell is going on behind the scenes and because we know they’re so secretive I’m left, not knowing whether they really are dinosaurs And they’re just gonna lose because they’re they’ve peaked or whether there’s this, you know secret cave down there where they’re going to revolutionize something that nobody saw coming from anywhere What do you think?
[01:02:32] Luke: You and I were in Austin last year and we did like the demo of the Apple Vision Pro and I think they’ve now cancelled that as a product because they’re seeing where meta is going with like the Ray Ban glasses. Like this big clunky headset just isn’t the form factor. So yeah, like I feel like they’ve misstepped like all of my experience of Apple is secondhand.
[01:02:55] Luke: It’s like hearing other people. Cause I just don’t, I’ve never liked the products myself. Cause I’m just, frankly, I’m just [01:03:00] afraid of getting trapped with the high switching costs because if I’ve got like an Apple phone. I got to buy the Apple watch and I got to buy a Mac and I got to buy like 20 other things.
[01:03:08] Luke: And each thing individually costs like 10 times what the Android equivalent would cost. So like, I’m a tired ass. I’d rather have my Google stuff. Like I’m hearing anecdotal reports that the latest. Phone and the latest iOS, like Apple intelligence is not working so well, it’s not, it’s not like you would always think about Apple in the past as being super reliable.
[01:03:30] Luke: They really nail it. And then when they launch something, it’s like a perfect launch, but they’ve, yeah, they seem to have. like slip their standards lately, perhaps because they’re feeling like the pace and the pressure of the competitors. And everyone’s got an AI product. So like how they got to like rush to market with their one,
[01:03:48] Krzysztof: Yeah. Right. And I’d say if it wasn’t for them being the world’s most valuable company, that’s, that’s a precarious position to be in. It’s almost like they better have something [01:04:00] in that I would say is one of those. Now you’re kind of. in limbo land, relying on story and history to repeat itself.
[01:04:09] Krzysztof: And that’s not a secure place for me as an investor.
[01:04:13] matthew: I agree. on top of that, the, the stock’s kind of expensive, right? I mean, it’s not really grow. I think they grew revenues 4 percent in the first quarter and, you know, selling at like, I think like close to 40 times earnings trailing basis. to me. That’s just like with a company that like with the moat on the iPhone is huge.
[01:04:32] matthew: And people love the brand. How long does that last, I guess, and like, when AI comes out and will that change people, if AI is going to be such a game changer, that it will, that it could get people to finally consider changing their, like, however, their personal device on them, whether that’s glasses in the future or a phone or whatever it is.
[01:04:50] matthew: , I have questions about Apple too. I think they’re expensive. I think they’re slow growing. And I think they’re like, like, you hate to say it because the stock has done [01:05:00] phenomenally well under a cook, but like it, it did seem like he, maybe he was just carrying out jobs playbook. And now that, that the playbook has ended or you’re getting near to the end of that, what’s next for them.
[01:05:11] matthew: And I kind of wonder what, what is next?
[01:05:13] Luke: we’ve got to get like our other ex colleague and a band back on here because he and I used to do battle with Apple versus alphabet all the time. I’m a big alphabet bull. And yeah, I think we seem to be agreeing around the table that Maybe, it might be the most valuable company in the world today, but maybe it’s the weakest of the Mag 7.
[01:05:30] matthew: so I have questions about alphabet too. So this used to be one of my larger positions. So since I I’ll say this, since I’ve left seven investing. I probably had like 40 positions when I left and now I’ve cut it down to 20 and it’s just something like At my stage of life right now. Like I just want less to keep track of and one of the companies I cut was alphabet And not because of anything they’re doing now.
[01:05:52] matthew: I think their moat with search is is huge. I just wonder with ai and it’s not I don’t think i’m alone in this I think [01:06:00] that’s kind of why they have a lower multiple right now than the rest of the mag seven is that going to change the way we interact with like digital information? And if it does, I think Alphabet can be a winner there.
[01:06:10] matthew: I think they could be one of the huge winners. But are they going to keep that market share that they have for search? I don’t know. I questioned that and maybe they do and maybe search doesn’t go away. Maybe, maybe AI, it changes a lot of things, but maybe I’ll always use Google search. I use Google search for everything.
[01:06:29] matthew: But it’s just enough question mark for me to say I don’t know, and it’s too hard for me. So in the process of cutting down my positions, like I got rid of it.
[01:06:39] Luke: All right, gents, anything else we want to say about the Mag 7? Or I’ll just come back to our original question. Is the Magnificent 7 dead? So today it’s directionally 35 percent of the S& P. Is that going to go up or down, say by the end of this year?
[01:06:53] Krzysztof: Yeah, dead, let’s define dead, right? Obviously, the companies aren’t dead. are they good investments from here? Right?
[01:06:59] Krzysztof: I’ll take [01:07:00] the I’ll take the not dead, because of the laws of capitalism, the big are going to get bigger, and they have innovators at the helm. So
[01:07:07] matthew: . I don’t know if it keeps the 35%, but they’re definitely not dead. The one moat I would question would be Tesla, but like, I think Elon Musk is a genius. So if anyone can innovate their way into moats, it’s probably him. It’s just hard for me.
[01:07:18] matthew: , They’re incredible companies. That’s how they got to be where they are. And I don’t think any of them are at ridiculous valuations again, like Nvidia, maybe, but like the way they’re growing, I can’t say it is ridiculous. And, I’m definitely not trying to time that.
[01:07:31] matthew: So great companies.
[01:07:33] Luke: All right, great stuff. Should we come on to our final topic of today? Never sell. Matt, you threw this one into the ring as something you’d like to talk about. So why don’t you kick us off? What were you thinking about, uh, when you said, Hashtag never sell.
[01:07:45] matthew: Well, I grew up on Motley Fool, right? Like as an investor, I grew up on Motley Fool and, uh, you know, they definitely preach never sell. And, uh, you can, look at Warren Buffett where he says, our preferred holding period is, forever. And [01:08:00] I think there are a lot of virtues to that.
[01:08:03] matthew: For instance, I sold Nvidia. And I regret selling NVIDIA, i’ve never done the numbers for this because I’ve sold more losers than winners, right? Like I’ve sold, Shopify. Like I said, at a very good time, I sold Paycom, another company, uh, at a, at a really good time.
[01:08:19] matthew: that years later, like I’m still ahead of where those stocks are now. Um, but if I had never sold Nvidia, I would have whatever, you know, the money, the position I had there would have been like six or seven fold down. I don’t know where that comes out. So what I did with axon Luke is that after they’re like huge recent gains, , it was like up like a, it was like overall, like a 12 bagger for me, I think.
[01:08:41] matthew: And it was like my second largest position, but at that valuation, I wasn’t comfortable with it. So I, I kind of just cut it in half and that made me, you know, a lot more comfortable. Like I know. So now I have, no matter what happens to the other half. Like, uh, I, I took my profits and it’s going to be a successful investment.
[01:08:56] matthew: so I think there’s like maybe a happy middle ground I also think like when you have a [01:09:00] win, just take the win. Like, so I go back to PayPal and, uh, like, like I said, I had like a, a 10 bagger with PayPal and, uh, I held onto it and I basically sold it, you know, I held it for like eight years or something.
[01:09:11] matthew: And, uh, it came out like, you know, like it lost to the market badly. Let’s just say that. I think I made money in it over eight years, but, I lost to the market very, very badly with that money. And could have, I just taken a win at a certain point and said, Oh, look, they’re multi roading it’s at a ridiculous valuation.
[01:09:29] matthew: but I won, let’s just take the win and sell it. I think there’s probably like a happy middle ground where you try to try to trim your positions as they go up in valuation and maybe add to them. As they go down. But that’s where I’m at. It’s, I don’t have an answer. I’m just kind of just almost just thinking out loud.
[01:09:43] Krzysztof: this is a maddening question. Because it’s a, it’s, I think a para there’s, there’s, uh, I don’t want to use the word paradox lightly, or try not to, but it’s paradoxical. The two arguments in favor and against depending on your perspective and personal situation, [01:10:00] they are both legitimately correct. We talk about this all the time.
[01:10:04] Krzysztof: You just did, my greatest mistakes as an investor repeatedly has been selling. anyone listened to our show at this point must be sick of me saying that. And on the other hand, nobody has ever gone broke taking profits. Money is there. To be used to live and do things with, for many, unless your life is about the game itself.
[01:10:32] Krzysztof: And there are things like, companies that have reached the kinds of valuations that are absurd in the way the tulip bubble was absurd. And when you could see that clearly, to not take money off the table is, I think, an error. So it’s weird for me it’s this impossible. It’s not that it’s impossible, but it’s riding a surfboard on a really [01:11:00] angry ocean, and you gotta just know why you would make the decision you would.
[01:11:05] Krzysztof: All told, had I followed Neversell, I would have my own castle. I wouldn’t just be talking about castles.
[01:11:15] Luke: It’s a tough one to navigate, isn’t it? And Like, you can be so in love with a company, let’s say like Axon, because actually Matt for very, very similar reasons, like the valuation scared me about two weeks ago, I also halved my position coincidentally. And I think we’re both probably looking back because they just reported and like the stock’s taken a bit of a ding, we’re both pretty happy with that decision.
[01:11:36] Luke: I’m happy to hold it for the longterm though. And the way I, cause you’re right, Christophe, it’s hard to navigate, but the way I try to do this myself. Cause I. I wholly believe investing is an art, not a science, and it’s hard to put numbers on this stuff. But if you just kind of immerse yourself in the news flow and you read everything you can read and you listen to all the podcasts [01:12:00] and the earnings calls, like your limbic system, like some monkey bit of your brain just kind of figures out how comfortable you are.
[01:12:08] Luke: With that company, given all the information that’s distilling around. And so I try and say to myself, okay, if I woke up tomorrow and axon had doubled in price, how would I feel? And if I woke up tomorrow and axon had halved in price, how would I feel? And I just try and get my allocation in my portfolio kind of proportionate to that so that like when I sold.
[01:12:30] Luke: Half my position the other day, I felt it was too value. I thought it was too expensive. And I thought if I sell half, if it doubles, I’ve still got like, I’m still going to get like, you know, a doubling on the half I kept. And if it halves, I’m going to be like wiping my brow and maybe I put some money back in play.
[01:12:46] Luke: So it felt like, I think I had like a 4 percent allocation at the valuation of, I think it was like 36 times gross profit. I’m like. It should be like a 2 percent allocation in my portfolio. So it’s that kind of, that’s how I try to navigate that.
[01:12:59] Krzysztof: [01:13:00] I’m honored that you said you have a monkey in your brain.
[01:13:03] matthew: I feel like there’s an angel and a demon on each shoulder. Right. Saying like, Oh, sell it, take profits, whatever. And then the other one, and I don’t know which one’s the angel or demon, but it’s saying like, no, just put it in the coffee can at the same time, like, I’ll say this just mentally, I don’t want a hundred positions.
[01:13:19] matthew: I don’t want to just say like, well, it’s in the coffee can, but I don’t have to think about it anymore. Like I can’t, I’m not built that way. I’ve liked the process of getting the number of positions I have down to a more reasonable number. It’s much easier to follow. And, um, uh, and, and that’s just like less mental bandwidth for me.
[01:13:37] matthew: Like I can, it’s a lot easier for me to keep tabs on 15 to 20 companies. 40 to 50 companies. And if I never sell, like, that’s what it will be, right? Because I’m always, uh, you know, looking at the next bright, shiny object and like getting intoxicated with that and learning about that new company. and I think, that’s, there’s an element to that too.
[01:13:55] matthew: Like, I don’t want a portfolio of 200 stocks where like 50 of them, I don’t even follow anymore, [01:14:00] but I never sell. So they’re there, again, I’m just talking out loud though. I like, I don’t know the right answer. Like monetarily.
[01:14:06] Krzysztof: I have another reframe for this never sell. I think it’s too draconian. It’s too extreme. So, but we get the idea, right? as a badger knows, I made a new year’s resolution to not sell any, my EOS shares. That’s not, I think, a never sell kind of frame. That’s me saying that I am so confident due to my research in the story that when the dips and the volatility show up, when the complexities of the tax code start wobble in the.
[01:14:46] Krzysztof: I am committed to wading it through because I trust all the serious foundations I’ve laid unless the thesis like supremely gets busted. [01:15:00] But I now know the difference between a broken thesis and just an inevitable problem. So I’m sort of saying I’m never going to sell my shares. In the sense of, I’m not going to get thrown off by the crosswinds.
[01:15:16] Luke: So open question. Do you fellas have a never sell like a true never sell in your portfolios today?
[01:15:22] matthew: The closest I have is probably Microsoft and Amazon it would take an awful lot for me to be convinced that their moats are broken and their business models are not going to work. I think it would be like a whole. Maybe like a whole new kind of regulatory framework that came down from on top that would shake me.
[01:15:37] matthew: So those are probably what I would say are the closest I have where like I don’t even I mean, obviously I read their quarterly reports, but like, you know I, I know the clouds will go be cyclical and sometimes Azure will be, Oh, Azure growth was 22%, but we were expecting 25%. The stock’s down 5 percent or whatever, you know, like I could care less about that stuff for those companies.
[01:15:59] matthew: [01:16:00] Like, all I’m looking for is like, basically, are their moats still intact? And they seemingly always are. Those are the companies, like if you ask me in five years, I’m pretty confident I will still be holding.
[01:16:11] Krzysztof: Tesla is the closest I have, but that’s wobbly. I mean, sorry, it’s not wobbly, it’s, I don’t know what Captain Ahab’s going to do tomorrow. So, you know, it’s, it’s hard. It’s a hard version of this. Badger you?
[01:16:25] Luke: talk about a lot, but like intuitive surgical, but I’m kind of, I’m kind of never selling it for a dumb reason because I just, I want it to be, it was the first thing I ever bought and I want it to be the stock. Like I never trimmed, I’ve got probably a 60 bagger on it now. Like I’ve had better performers, but this is like a substantial part of my portfolio.
[01:16:43] Luke: I’ve got one other stupid one, which is a never sell for like the totally opposite reason. So I think I signed up to some motley fool, like international service in 2010. And I bought a company called China green agriculture, who have now rebranded to In [01:17:00] lightify ink, I’ve got no idea what they do even when I haven’t been tracking this.
[01:17:03] Luke: Like I looked a couple of years ago and I was down like 90%. I’ve just got like wiped out on my position. I was like, holy hell, like it’s hardly, it’s not even worth selling it. I’ve kept it and I looked at it today and it’s now my original position is now down 99. 39%. And so the reason I’m never selling this is it’s like I don’t even report on it because it’s literally like a Couple of dollars in my investment portfolio.
[01:17:30] Luke: It reminds me every time I look at my investment portfolio, this little dangly thing at the bottom, which is down over 99%. When I was down 90%, if I’d like added a bunch of money to try and, you know, reduce my cost basis, well, that new money would still be down more than like 10 X from then. And it’s just a stark reminder that like what goes down.
[01:17:52] Luke: Can always go down further and further and further. So I’m keeping that one for a stupid reason just as that reminder.
[01:17:59] matthew: That’s [01:18:00] a great story. Like my first stocks I bought after subscribing to Motley Fool and what got me to subscribe to them were, was 3d printing. You guys remember that? Like it’s going to be the next industrial revolution. And so, the thankful thing about investing is that when you start off and you’re really dumb and you’re going to make a lot of mistakes, is that comparatively like in the, to your future self, it’s, it’s not a lot of money, but I think my wife and I had to like about, you know, You know, a few thousand dollars.
[01:18:25] matthew: And we put all of it into like this basket of 3d printing stocks. And for about a year, I thought I was the greatest investor of all time because they went straight up, they were in such bubble territory in retrospect. But, whatever I turned like, you know, 4000-5000, into like 15, 000 or something like that.
[01:18:45] matthew: And then about a year after that, It was like 2, 000. So, so that was my, that was my lesson on, not blindly trusting investment services.
[01:18:55] Luke: Yeah.
[01:18:55] Luke: Like we say every episode, like don’t even trust us. We do our due diligence. We pick [01:19:00] stocks. We talk about stocks that we love and believe in. Like you got to do your own work. You can’t borrow someone else’s conviction.
[01:19:06] matthew: Absolutely. Can’t borrow conviction.
[01:19:08] Krzysztof: because territory will become unstable. And, all the market games that have to do with price and short term stuff are really confusing. There are, it’s just par for course that a great stock releasing good numbers might plummet, a bad stock might go up based on pure technicals and the sort of fly by their seat of their pants investors. reason logically actually will get fooled and make the exact wrong conclusion if they do not have that fundamental conviction. And this is badger. You and I talk about this all the time. This is, I would say the most obvious way for anybody to up their game from [01:20:00] a dilettante or a complete, call it, unserious investor where you could even say you’re gambling to no, you’re in this in a legitimate way.
[01:20:11] Krzysztof: And you’re here to make money for yourself and your family. And all you got to do is cross the line of. doing the work, which for us is enjoyable because we learn about lots of things. I know I sound a little preachy about this, but it’s kind of shocking. You, say this all the time. It’s shocking how many people are unwilling to take that step towards, no, I’m going to get serious and I’m going to actually understand, try to understand what I own.
[01:20:41] matthew: Well, the 3D printing socks was like the best thing that ever happened to me because, uh, that’s what made me seek out Motley Fool discussion boards because I was like, seriously? Like, what the heck is going on? Like, I, I’m like, my wife’s about to pull the plug on me investing ever again. So I need to figure out what’s going on, like right now, I can’t keep losing my money.
[01:20:59] matthew: [01:21:00] And it was literally one of the, be financially the best thing that ever happened to me was, uh, losing a lot of money.
[01:21:05] Luke: There’s a lot to be said for that, like having a community of smart folk with different experiences, you know, ideally people who actually use these devices like axon with yourself, you know, someone who’s actually sat in front of evidence dot com, you just learn so much by being in a community, and that is something we’re trying to do with our patrion over wall street wildlife.
[01:21:26] Krzysztof: Yeah. I think this is a good spot for a quick shout out to that growing community because it’s so lovely to see, you know, people legitimately contributing to the conversations and. building trust, which takes time and you could only do it when you surround yourself by legit by legitimate people as opposed to, you know, the unfiltered knuckleheads on totally social platforms where people say shit to get a rise out of you.
[01:21:54] Krzysztof: So patreon. com slash Wall Street wildlife is where you could go to support [01:22:00] our show and conversations like this one with our old legendary colleague, Matt. So check us out,
[01:22:06] Luke: Matt, we’ve, uh, we didn’t make three hours, but we have, I think I’m clocking an hour and a half and we’ve probably taken way more of your time than you planned today.
[01:22:14] matthew: no, guys, it was, uh, I always loved talking to you. It was great catching up and, uh, like I had a lot of fun. Thanks for having me on. Guys.
[01:22:20] Krzysztof: go bust some, go pop some caps and asses in dark alleyways, but you stay safe.
[01:22:27] matthew: All right. Thanks for that. Thanks for that, Christophe.
[01:22:29] Luke: Well, Matt, before you go, give your, uh, give your Twitters and give your website another plug, just so our listeners know where to find you and your wisdom. Fantastic.
[01:22:36] matthew: Oh, yeah, sure. You can always find me at the Matt Cochran on Twitter. and, uh, I’m on it way too much. , That’s where you can find me the quickest. Uh, but like I said, I also write for longtermmindset. co. Uh, they do a, like a, basically host a lot of classes for different investing lessons and things like that.
[01:22:53] matthew: You can sign up for some free newsletters. Um, you should check it out.
[01:22:56] Luke: We’re big fans of the Bryants over here. It’s [01:23:00] good work you guys are doing.
[01:23:01] matthew: Yeah, no, they’re fantastic. Fantastic. Absolutely.
[01:23:04] Luke: Awesome. Well, we, uh, we always close out this episode with the one question, Christoph, are you ready to become a beast of an investor?
[01:23:10] Krzysztof: Your journey starts right here.
