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When you show your portfolio totals, it shows a 150k gain and a total value of 600k give or take. My math says this is about a 35% gain. Am I misunderstanding something, is this wrong? How many years is this over, and is it above the sp500 benchmark over multiple years? Thanks for your analysis and commentary.
@@twan102000 Your math would be correct if I lump sum deposited all my portfolio cash at the start of the portfolio and then never made any additional deposits, but that's not what I did, I continually add cash to the portfolio. The portfolio started with $2,000, so some of the % return is based on a smaller portion of cash. I earned a high rate of return, just with less amounts of deposited cash. Over the years I have deposited more cash which has the effect of making the total portfolio value larger than the gains percentage. An example to illustrate this is: If I deposited 1 million dollars tomorrow into my portfolio. The portfolio would be 1.6 million total, but my percentage return would not change at all, and my gains would remain at 155k. Therefore just by me depositing more money it makes the total portfolio value look larger in proportion to the gains. This is called the money weighted return, and you can find the exact calculation here: www.investopedia.com/terms/m/money-weighted-return.asp I also have started calculating my performance in time weighted return, starting from 2022. 2022: -16.22% 2023: +32.02%
@@JosephCarlsonShow Thanks for the reply, especially with the details. I have wondered about contributions for a while now. I totally get it, the transparency is refreshing. Good luck this year and beyond!
Thank you for stating your new position from the start instead of making us wait until the end like some other content creator's. I've been a long time fan, great video as always Joseph keep up the amazing content!
I agree that AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA last year.
I bought NVIDIA around September because my financial advisor recommended it to me. She said the company is selling shovels in a gold rush. It accounted for almost 80% of my market return this year.
That's a great analogy and I love the insight. Professionals could make a really big difference in investing, and I think everyone should have one. There are aspects of market trend that is difficult for the untrained eyes to see.
@@maryHenokNft I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
The decision on when to pick an Adviser is a very personal one. I take guidance from *Gertrude Margaret Quinto* to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
While the overall stock market is predicted to be bullish, it remains uncertain which sectors will dominate. If you lack expert advice from a financial advisor, avoid re-balancing. Personally, I work with an advisor and my $1.2M portfolio saw a 30% annualized gain in 2023.
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
I plan to get into the fin market putting a portion of my income monthly, I believe consistent and steady growth would have me rewarded in some time, I wonder though if there’re smart ways to go about investing, picking and selecting stocks? I’ve recently tried but have been met with red on my portfolio, I’m open to options
Everyone has means and unique ways of operation, the point is ensuring you’re profitable, I’ve seen my $170k startup surpass a million and its been only eighteen months having an FA guide me on my investments. It’s a necessity going about the fin market if you want to be profitable nothing can match professionalism and experience.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Consider "buying the dip," my friend. In the long run, it will yield positive results. While high interest rates often correlate with lower stock prices, investors should exercise caution during a bull run. It's advisable to engage with a well-qualified advisor to align your investment strategy with growth goals and avoid potential pitfalls.
Very true, you can be passively involved in the markts and still amass wealth-gains using an investment advisor. I first dabbled in stocks late 2019, just before the pandemic, and that same year gained over 150% with no prior investing experience, basically all I was doing was following directions of my advisor. We are working on a retirement ballpark of $3m and I’m certain my goal isn’t farfetched after subsequent investments and tremendous returns so far.
You're right, the best time to buy in the market is when there's fear. A huge part of my growth has also come during this bear market. This year alone, I have scaled from 180k to over 354k.
“Amanda Kathryn Sachs” my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.
I want to invest $400k in profit-yielding dividend shares but am not sure which to buy into because dividend-paying stocks don't give rapid price growth and can provide a steady income stream.
Remember that investing in the stock market carries risks, and it’s important to do your own research and consult with a financial advisor before making any investment decisions.
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
The professionals presently control the market since they not only have the essential business strategy but also have access to inside information that the general public is not aware of.
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
Yvette Ruta Musto' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
In my opinion, the purchase of MCO represents a diworsification. You already have SPGI. The money could just as easily have been invested in SPGI and will make no difference in terms of performance. FICO would have been a better option at the right price.
Great analysis Joseph! Thanks for covering Moody’s! I think one thing to add is to talk about the risks that could impact Moody’s businesses in the future. eg How Moody’s credit rating business is largely dependent on the debt market and how willing businesses are willing to issue debts which will need credit rating services from the biggest and most well-known credit rating agencies (and not the less well known ones), how long it may take for the debt market to recover that’ll affect Moody’s credit rating business the most and hence its earnings and FCF growth, or perhaps S&P Global Inc’s business is more diversified compared to Moody’s since S&P Global also has its index business eg S&P 500 vs Moody’s doesn’t have an index business. These are just ideas. Thanks for taking the time to make this video!
They keep issuing debt while they repurchase shares at absurd valuations. Goodwill and intangibles have 10x over the past decade, PP&E has 3x, while revenue and profit have roughly 2x. At $375, this trades at 40x normalized earnings (30% margin on 5.8b revenue as of FY22). You only get 33x when normalizing by 33% margin on FY21 revenue, the highest the company has achieved. Classic Wall Street: all will be perfect immediately and forever. FY20 and FY21 are the oddity to me. What do you get to hold this? 1% buyback yield (at prices nobody should pay), plus 1% dividend yield, plus 7-8% organic growth (look at years with no acquisition), so around 10% business return, plus massive valuation risk. 7% growth over 5 years, with a 30% margin, 25% dividend distribution, 1% buyback yield, 20x terminal multiple and a 10% discount rate result in $175, around the covid lows (and I bet with you that at $175 they would suspend the buyback program and start worrying about the debt pile.)
What has to happen to justify the current $375? 10% growth over 5 years, with a 35% profit margin (FY21) and a 30x terminal multiple, all else as above, get you close. That is what priced for perfection means. Everybody knows that this is a perfect undisruptable business, so every fund holds it. It will go up and down with the market, so what's the point? You used to bring up Mohnish often: chek out his Dec 18 interview, where he talks about ADP vs XOM: "What ADP is going to earn in FY23, 24, 25... 20 analysts can get within 5% of that, since the variance is so low, and Wall Street loves that. Do we have an interest in ADP? No. Even though it is a great business".
What has to happen to justify the current $375? 10% growth over 5 years, with a 35% profit margin (FY21) and a 30x terminal multiple, all else as above, get you close. That is what priced for perfection means. Everybody knows that this is a perfect undisruptable business, so every fund holds it. It will roughly go up and down with the market, so what's the point?
@@Amwatson801 Good analysis overview! I think much the same way, but then again I am probably too much towards Graham and not enough Fisher :) I can't feel comfortable holding a stock priced that way, so I avoid the US right now altogether as a Norwegian investor. Our market is priced around 10-14 PE!
Agree. It's also more cyclical than most think. Profits will be cut in half in a recession, and then the stock will go down 75%. Great business, I can't argue that... but way way way overvalued. 3% fcf yield with 10% growth on a good day doesn't cut it anymore.
People said the same about Intuit when I purchased it. It traded at a much higher trailing and forward PE than Moodys. It’s up 55% over the past year. People have also said the same about Microsoft, Costco, and Chipotle. All positions that have beat the market since investing in them. I’ve held Costco for 6 years and the stock has always been called expensive. I think most people optimize their portfolios for short term performance with a hyper focus on multiples of 12 months of earnings. Instead of optimizing portfolios for longer term with focus on business quality and organic growth opportunities.
The problem here is in fact those acquisitions. In 2021 their capital went from $7.2B to $10.3B and the generated economical value almost halved since these acquisitions because of the heavily increased cost of capital and it's now where it was in 2017. I'd like to see these acquired companies start adding more value than the increased cost of capital takes away from their NOPAT/EVA. At the current price it's a hold for me at best, but it's on my watchlist too.
❤ your content....so simple yet so logical 1) Similar Duopoly- Visa and mastercard . 2) Please do a piece on Dev Kantesaria and Chuk Akre (like u did on terry smith and chris hohn). 3) MOODYS- sure a compounding machine but margin of safety ????
Joe has talked about Dev before, he was talking about Dev before he bought his stocks, Intuit S&P Global and now Moody's, he probably had Mastercard before he was following Dev, he might buy some Aspen and some ASML next just because Dev owns them, I certainly did :)
"Perpetually undervalued for a long period of time" PE 46 & DY 0.84% ~ Joseph 2024 Edit, since Joseph will just show you his reply, mine is this: Sorry to break it to you lad, exactly your words 20:42. What's in the following 18 months you won't even see it coming.
No need to be disingenuous when you disagree by making up fake quotes. That’s not a quote from me. I would never use trailing earnings on a company that just had an unusually low year of earnings to value a stock. MCO trades at 3% 2024 fcf yield which I believe is a reasonable valuation.
@@JosephCarlsonShow Unfortunately, far too many people rely on the rearview mirror looking P/E ratio when deciding whether or not to buy a company. It's one of the most useless metrics out there. As a new investor, what we're entitled to is the future cash flows, not net income and certainly not any cash flows that were generated in the past.
bought a ton of stocks with high PE, and they overperformed SP500. Not everything is about PE. People told me dont buy costco bc high PE. Its outperformed sp500 by a huge margin.
Yes. I believe Moody’s will look undervalued in 10 years based on the price today. Looking at near term PE ratios has never been a recipe for success. In 2015 chipotle had a PE ratio of 33. I bet you would have said that’s expensive as well. The stock is up over 5x since then and the PE ratio is the same. So what I’m saying is that my valuation is not based on forward or trailing PE ratio. It’s based on long term expectations of the company. Over a 5-10 year period.
I get it's great, Dev K. owns it, Buffet owns it, they all own it for good reasons, but it is dear in fairness, and yes if you're long term enough the PE dissapears and the 15% growth or the ROIC is what matters but if there's such a good shot of getting it 1/3 off or more over the next few years you could maybe hold off bigger buys at least. You were right Netflix was great too but not 700 dollars great. Didn't it go down to 150 or so? I mean it will be 700 hundred dollars great someday surely but these things can get 5 or even 10 years ahead of themselves, that leaves such a long runway to wait for lower prices, Moody's at 150 maybe, or some early 1970's PE ratios would see Moody's drop to 20 dollars, hardly but that kind of thing has happened before, having said all that I did buy a bit myself, lol, about 20% cheaper ago, it was too dear but the only way to own great companies is to buy them I suppose, I'd just worry a bit that the last 92 internal transactions - that is every insider transaction for the last 2 years in Moody's - were sells. Not one person who works there wants to own it, doesn't sound great that bit.
The more I learned I realized that their secondary businesses are quite different. I really like Moody’s analytics businesses and wanted to own it separately.
@@mrvictor60 He talked about it in a video about a month ago. His conclusion was its a fantastic business but a bit expensive at the moment. Would not be surprised if he added it at some point if it has a pull back.
I went over FICO pretty extensively when looking at potential stocks. Here's a few of my conclusions: - FICO trades at a PE of around 50 on a forward basis. It trades on a free cash flow yield of 1.2% On paper FICO is about twice as expensive as Moody's based on next years cash flows and earnings. - FICO has grown free cash flow per share extremely fast by aggressive price increases and aggressive buyback policy helped out by taking out low interest rate debt. - FICO cannot continue to take out debt, now they will maintain it and pay interest on it, which will dampen their future profitability. - Investors in FICO are relying mostly on extremely aggressive price increases to justify todays' valuation. There are reports that FICO could raise the prices on their credit runs by over 100% in the next year. They of course can do this because they have a deeply embedded monopoly in credit. Doing this aggressive of price increases however is something however doesn't look good to me. I have seen these types of value extractive price increases cause a lot of negative brand equity, criticism from other companies, and more government intervention. How much can a company inflict damage with it's price increases before people start saying it's abusive? - My biggest issue with FICO, and the reason I do not own it today, is because of it's very high expectations in valuation and the reliance on extremely aggressive price increasing to justify it. With Moody's I found a company which I believe has as equally powerful of a moat but more reasonable expectations that I'm more comfortable with. - I reserve the right to change my opinion on this in the future, as I get new info/studying.
@@JosephCarlsonShow I knew you had to have your reasons for choosing MCO over them today past just pure valuation. Incredible analysis, this is why we tune in. Have a good rest of your evening, Joe.
~40% MCO stock price increase over past 4 years. I bought a few MCO shares after the December 2023 Financial Report. Your thesis is solid in my opinion.
A couple of questions. 1. Why do you want companies that are perpetually undervalued? (Being undervalued is part of your defininton of "compounding machine.") 2. How do you make the case that MCO is undervalued? I understand your case that MCO is fairly valued. But it certainly doesn't seem to be undervalued, which is one of your criteria for being a compounding machine.
When I say perpetually undervalued I mean you could have bought MCO at any time in the past 20 years, even at the peak of 2007, and it would have outperformed S&P 500 to present day.
@@JosephCarlsonShowokay, that makes sense, still the word "perpetually" usually mean forever, including future. It's kind of confusing when you want to refer to the past.
One of the lessons Warren Buffett learned from Charlie Munger was to “pay up for higher quality (faster compounding) stocks”. Buffett’s cigar butt philosophy was not wrong. But adopting Charlie’s investing framework helped BerkshireHathaway compound returns at a faster rate. •MCO has had a very respectable CAGR going back to 1995 • DCA into this stock at any time from 1995 to date has doubled your investment every 4.7 years • $10k invested in 1995 would now be worth $632k Don’t sleep on this one. Stay Hungry
It's nice to see that my picks aren't wildly off the mark. But that Honda concept saloon though! I'd buy one. Too bad concept cars don't reach public roads that often. I was so bummed out when I saw a Saab Aero X concept and realized I would never see it in person again.
Great content. MCO (is a quiet wealth compounding machine) has been in Warren Buffett’s portfolio for a long time. It’s CAGR from 1995 to date is 15.37% per year
The Honda Saloon looks interesting, but... 1) neither the front or the rear look like they have much in the way of an actual bumper, and look (first impressions) that they wouldn't hold up to even a 5 MPH fender bender. And 2) I'd want to make sure Honda wasn't implementing any kind of "hardware subscription" BS like some of the car companies are trying to pull off (like BMW's heated seat subscription)
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
I agree! That's why it is advisable that you have to invest while you still have a regular job or earning a regular income, and do it constantly. You still need to have something that will keep you going even if you're investing. Good financial planning and money allocation is the key.
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Based on my valuation, MCO is at most worth 250 as of now, can you please share what is the rational to enter this stock right now? Maybe I am wrong....
I appreciated your very thorough analysis of why you like MCO, but I was surprised you didn't include a valuation of its current worth using Qualtrim. Did you do one?
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
you are right. it's been a brisk tailwind for lnvestors in US stocks over the decades but it is still a delicate season now, so I advise you to consider the guidance of a financiaI advisor
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
I share the same investing philosophy as you but 2022 taught me not only buying good things but also buying things well. Amazon, Google, Meta, and Netflix all got hammered 40% plus ! Tsunami affects all boats regardless of the size!
While I agree with the notion that price matters - a lot - I don't really see the power of your example, seeing as those companies are already back up to new heights :) If anything the lesson could be that when you buy truly great companies, even when they fall 40% they bounce right back. Not so maybe for mediocre businesses.
You can't see the difference? You shouldn't be investing in individual stocks! I bought Amazon under $90! Now I'm up almost 80%! If I were to buy it when it was AH, I would still be under the water -10% right now. That's the difference!
@@Tiger-uk2xd Well, the issue with that is that that data point is extremely biased and is based on market timing. Warren Buffet himself says he does not try to time the market. You had no way of knowing in 2022 that tech companies would fall so much in the future and so that you would have a better buying oppurtunity soon afterwards. If you think you can divine stock market crashes maybe you are the one who should not be buying stocks.
@@theWebWizrd If a stock is at a PE of 40 or whatever Buffet doesn't buy it, probably no one should buy companies at these prices, there might be a rare exception. It's not that you think you can see the future and know you'll buy it for a PE of 15 in 2 years, it's just that if it doesn't get to a PE of 15 you'll never own it, you don't have to own it. If Snickers bars were all 100 dollars tomorrow you wouldn't give up Snickers because you know that you will buy a Snickers bar for 1 dollar again next week, you would give them up because 100 dollars is too much for a Snickers today, no reading tea leaves or sheeps guts necessary, you could just buy a Mars bar instead :)
@@theWebWizrd What you fail to understand is that you have to try to time the market one way or another. I'm not talking about swing trading in and out of the market. Warren Buffet has over a $100 billion on the side line. What do you think he's doing? He's waiting for opportunities, waiting for good companies to become cheap again so he can load up! Or else why doesn't he just put all his cash in all these great companies right now like Costco, Microsoft, or Google? Why? Because they are too expensive at this point. The name of the game is buy low, sell high not buy high and hoping it will go higher! Anyway, invest whichever way you like. Good luck to you.
CAT just got a $2 billion screwing from the Biden administration! A massive recall on Ram trucks coming up. All to appease the climate change fanatics! (Crooks) Might be a dip coming!
What is the greatest strategy to take advantage of the current market. I’m still deciding whether to diversify my $400k stocks portfolio? how do I redistribute stocks in my portfolio to hedge against crash?
The market is volatile at this time, hence I will advice you get yourself a financial advisor that can provide you with entry and exit points on the share/etf you focus on.
Accurate asset allocation is crucial, and some individuals use hedging strategies or allocate part of their portfOlio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay finan-cially secure for over five years, yielding nearly $1 million in returns on invest-ments.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
I think it's very dear mind you, it'll take you 140 years to get your money back on current earnings, I hope it grows pretty quick for you, it seems dear enough to have a 75% crash in the next few years, 90% if something actually goes wrong with the company, I'd be terrified to buy in at these prices, but I'm a scaredy cat
Not voting arm on float day is mind boggling to me and ot voting rolce Royce at penny's also I did both cashed out 180% up o both then bought gold days before this weeks record gains
in my case Chris Ryan Stewart has assisted me in doing that effectively, I'm not an expert so I lack experience in investment strategies, I work and my consultant handles the rest.
indeed, most people downplay the roles of financial planners until burnt by there mistakes. Productivity is optimized and keeping up to date strategies and analysis makes it more lucrative. I've been able to navigate the volatilities and scaled up 880k from 220k with professional guidance.
I just googled the name you mentioned, I am quite impressed with his credentials, will get in touch because I need all the help I can get, and consequently schedule a phone call. Thanks.
impressive, I'll definitely check it out, I buy the idea of employing the services of a financial advisor because finding that balance between saving and living requires counsel. How can one get in touch?
When you’re adding funds into your assets do you add by target weights or do you self balance and add more funds to underweight stocks in your slices and less to over weight stocks in your slices ?
Haha I like your investment objective of adding stocks to the portfolio that don't make your portfolio worse. That reminds me of Buffett's first rule of investing.
@@Coda1850 IMO focusing on TOTAL PORTFOLIO RETURN is more beneficial in the long run. SCHD prospectus explains the narrow focus it has. Hence there are periods of time it will underperform. These periods of underperformance can be as long as a decade. • younger investors need to own small cap and growth ETFs • SCHD is perfect for a retire who needs income (dividends)
Some numbers that speak to my point. Median P/FCF is 26.07… it’s trading at 40x FCF… just seems really richly valued. Share price has compounded at 40% annualized over the last 10 years… doesn’t seem sustainable…price/sales at over 12 compared to the median p/s of 7. Morningstar FVE of $335/share implies 12% overvaluation as well..
I know you said you'd skip VISA for Mastercard but don't ignore Dev Kantesaria's smaller purchases either, ASML and Aspen, you may as well buy them now or you'll be buying in when they're dearer in a couple of years :)
Boeing moving management 3000 miles from manufacturing seems like it has been a disaster. Management should be on site where they can monitor what's going on.
Can someone explain the math to me when he's had a 100% return but has only gained $150,668 from a 600,000 portfolio? My dad got confused and I had no explanation.
Some BS m1 finance does to make you feel youre doing better than you really are, it accounts time into how they calculate that percentage. Personally id rather just have a simple loss/gain percentage
It’s money weighted return or internal return. Newly added capital does not impact the returns. For example. If I added 400k tomorrow, my portfolio would be at 1 million but I’d still have 155k in gains and still have 100% returns. New capital only impacts the total value, not the gains or returns, and I’ve added a lot of new capital over the years.
@@JosephCarlsonShow I think that the way it is shown in your videoes is the best and most accurate way to show your returns in the sense of your portfolio performance :) I think it would be very misleading if in your example the displayed return dropped dramatically!
The amount of catastrophes with Boeing planes is deeply concerning. Aircraft manufacturers should not primarily be focusing on profits. We’re talking about dealing with real peoples’ lives on the line here. Airlines are also responsible for choosing the aircraft. Safety first and foremost. Always.
It's the "perpetually undervalued" bit I dont get. 10 years ago Moodys had a free cash flow yield around 5-6% well above the 10 year yield of 2.5-3%. 5 years ago it had a yield of 3-5% when the 10 year had a yield below 3%. Valuing it based on other opportunities means testing it vs government/corporate bonds and there it has inverted on a free cash flow basis being below. Isn't moodys own debt a higher yield than its FCF? 10 years ago moodys EV/EBIT was as low as 12, Today its been as high as 37. Its value has been more than recognised by the market over that time.
good move, Joseph. Moody's is solid. With the debt markets expanding, they will make much coin. But SPGI and MCO are damn near the same company. And have performed in tandem. Why not just merge the position into one company?
@@JosephCarlsonShow Good job, maybe you could replace Warren? One year is not enough of a sample size, but as you know, over the long term the market is a weighing machine.
My point was that my portfolio is quite different than Buffetts. He’s limited by the massive size of Berkshire and the only buys that make a difference are of mega market cap companies. He couldn’t buy Texas Roadhouse for example.
@josephCarlsonShow Do you mind sharing what strategy you use to add more to a position? What event throughout the year help you know when to add more to a desired position? Every x time period do you try to dollar cost in, or set up an alert on the price, or manually watch it? How do you think about build out a position?
Atrocious valuation metrics but undoubtedly a compounder. I just like to buy with a margin of safety rather than overpay by 8-10%. That being said, hold it long enough and the quality will shine through.
Really liked the video, but showing free cash flow for Citigroup is not meaningful, since you can not use free cash flow for banks. Since a bank is paying out a lot of loans and the repayment is only coming back partly over years, the cash flow is most of the time negative (as long as it is growing it's loan book). So free cash flow (and a lot of other Financials metrics) are not useful for analyzing or comparing banks to other stocks. For banks you rather look at RoTE or CIR as the relevante metrics, but don't compare a bank (citi) to a non bank (Mastercard) based on free cash flow
I can thank you, Joseph, for helping me not invest in Boeing a few years ago when they had the 787 Max issues. It seems like the company hasn't changed much since then.
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields
Joseph, I'd love for you to look at Cintas (CTAS). Very similar fundamentals to Moody's, increased dividend 41 consecutive years, and 3 year annualized dividend growth of 12.5%
they didn't do it buying expensive, Graham is the father of the concept of margin of safety, it's not believing the business you are buying isn't that great is a preventive measure when something goes south, and wishful thinking earnings only go up and up forever can cause you buy before a better entry point and that reduces your margins
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When you show your portfolio totals, it shows a 150k gain and a total value of 600k give or take. My math says this is about a 35% gain. Am I misunderstanding something, is this wrong? How many years is this over, and is it above the sp500 benchmark over multiple years? Thanks for your analysis and commentary.
@@twan102000 I believe it's because he is depositing more money into his portfolio via transfers from his bank account
@@twan102000 Your math would be correct if I lump sum deposited all my portfolio cash at the start of the portfolio and then never made any additional deposits, but that's not what I did, I continually add cash to the portfolio.
The portfolio started with $2,000, so some of the % return is based on a smaller portion of cash. I earned a high rate of return, just with less amounts of deposited cash. Over the years I have deposited more cash which has the effect of making the total portfolio value larger than the gains percentage.
An example to illustrate this is: If I deposited 1 million dollars tomorrow into my portfolio. The portfolio would be 1.6 million total, but my percentage return would not change at all, and my gains would remain at 155k. Therefore just by me depositing more money it makes the total portfolio value look larger in proportion to the gains.
This is called the money weighted return, and you can find the exact calculation here: www.investopedia.com/terms/m/money-weighted-return.asp
I also have started calculating my performance in time weighted return, starting from 2022.
2022: -16.22%
2023: +32.02%
@@JosephCarlsonShow Thanks for the reply, especially with the details. I have wondered about contributions for a while now. I totally get it, the transparency is refreshing. Good luck this year and beyond!
Thank you for stating your new position from the start instead of making us wait until the end like some other content creator's. I've been a long time fan, great video as always Joseph keep up the amazing content!
Buying puts inside a Boeing plane while it's falling apart is the craziest story to tell your grand kids about how you got rich...
I agree that AI stocks will dominate 2024. Why I prefer NVIDIA is that they are better placed to maintain long term growth potential, and provide a platform for other AI companies. I know someone who has made more than 200% from NVIDIA last year.
I bought NVIDIA around September because my financial advisor recommended it to me. She said the company is selling shovels in a gold rush. It accounted for almost 80% of my market return this year.
That's a great analogy and I love the insight. Professionals could make a really big difference in investing, and I think everyone should have one. There are aspects of market trend that is difficult for the untrained eyes to see.
@@maryHenokNft I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
@@maryHenokNft Amazing! I hope it's okay to inquire if you're still collaborating with the same fiduciary and how I can get in touch with them?
The decision on when to pick an Adviser is a very personal one. I take guidance from *Gertrude Margaret Quinto* to meet my growth goals and avoid mistakes, she's well-qualified and her page can be easily found on the net.
I am actively searching for ways to invest/diversify my $800k portfolio so it can dramatically increase in folds throughout this next bull run.
While the overall stock market is predicted to be bullish, it remains uncertain which sectors will dominate. If you lack expert advice from a financial advisor, avoid re-balancing. Personally, I work with an advisor and my $1.2M portfolio saw a 30% annualized gain in 2023.
how I can get in touch with this advisor as my porfolio isnt doing well?
Thanks for sharing, I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an e-mail shortly.
I plan to get into the fin market putting a portion of my income monthly, I believe consistent and steady growth would have me rewarded in some time, I wonder though if there’re smart ways to go about investing, picking and selecting stocks? I’ve recently tried but have been met with red on my portfolio, I’m open to options
I think you should become more passionate about investing, if you don’t become lifelong learner you won’t make profit.
Everyone has means and unique ways of operation, the point is ensuring you’re profitable, I’ve seen my $170k startup surpass a million and its been only eighteen months having an FA guide me on my investments. It’s a necessity going about the fin market if you want to be profitable nothing can match professionalism and experience.
Being heavily liquid, I'd rather not reinvent the wheel. Since this strategy works for you, how can I contact your advisOr?
Carol Vivian Constable is the licensed advisOr I use. Just research the name. You’d find necessary details to work with to set up an appointment
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
Consider "buying the dip," my friend. In the long run, it will yield positive results. While high interest rates often correlate with lower stock prices, investors should exercise caution during a bull run. It's advisable to engage with a well-qualified advisor to align your investment strategy with growth goals and avoid potential pitfalls.
Very true, you can be passively involved in the markts and still amass wealth-gains using an investment advisor. I first dabbled in stocks late 2019, just before the pandemic, and that same year gained over 150% with no prior investing experience, basically all I was doing was following directions of my advisor. We are working on a retirement ballpark of $3m and I’m certain my goal isn’t farfetched after subsequent investments and tremendous returns so far.
You're right, the best time to buy in the market is when there's fear. A huge part of my growth has also come during this bear market. This year alone, I have scaled from 180k to over 354k.
“Amanda Kathryn Sachs” my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.
Scammer
I want to invest $400k in profit-yielding dividend shares but am not sure which to buy into because dividend-paying stocks don't give rapid price growth and can provide a steady income stream.
Remember that investing in the stock market carries risks, and it’s important to do your own research and consult with a financial advisor before making any investment decisions.
I added FICO & MCO in october after seeing your fundamental analysis video on rating companies and already up 30% consolidated.
Would you happen to remember the title to that video, champ?
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?
Credits to 'Carol Vivian Constable' she has a web presence, so you can simply
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my portfolio for retirement. I'm seeking to invest $200K across markets but don't know where to start.
The professionals presently control the market since they not only have the essential business strategy but also have access to inside information that the general public is not aware of.
I agree, having a brokerage advisor for investing is genius! Amidst the financial crisis in 2008, I was really having investing nightmare prior touching base with a advisor. In a nutshell, i've accrued over $2m with the help of my advisor from an initial $350k investment.
impressive gains! how can I get your advisor please, if you dont mind me asking? I could really use a help as of now
Yvette Ruta Musto' is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
In my opinion, the purchase of MCO represents a diworsification. You already have SPGI. The money could just as easily have been invested in SPGI and will make no difference in terms of performance. FICO would have been a better option at the right price.
SPGI and MCO arent identical companies
Great analysis Joseph! Thanks for covering Moody’s! I think one thing to add is to talk about the risks that could impact Moody’s businesses in the future. eg How Moody’s credit rating business is largely dependent on the debt market and how willing businesses are willing to issue debts which will need credit rating services from the biggest and most well-known credit rating agencies (and not the less well known ones), how long it may take for the debt market to recover that’ll affect Moody’s credit rating business the most and hence its earnings and FCF growth, or perhaps S&P Global Inc’s business is more diversified compared to Moody’s since S&P Global also has its index business eg S&P 500 vs Moody’s doesn’t have an index business. These are just ideas. Thanks for taking the time to make this video!
They keep issuing debt while they repurchase shares at absurd valuations.
Goodwill and intangibles have 10x over the past decade, PP&E has 3x, while revenue and profit have roughly 2x.
At $375, this trades at 40x normalized earnings (30% margin on 5.8b revenue as of FY22).
You only get 33x when normalizing by 33% margin on FY21 revenue, the highest the company has achieved. Classic Wall Street: all will be perfect immediately and forever. FY20 and FY21 are the oddity to me.
What do you get to hold this? 1% buyback yield (at prices nobody should pay), plus 1% dividend yield, plus 7-8% organic growth (look at years with no acquisition), so around 10% business return, plus massive valuation risk.
7% growth over 5 years, with a 30% margin, 25% dividend distribution, 1% buyback yield, 20x terminal multiple and a 10% discount rate result in $175, around the covid lows (and I bet with you that at $175 they would suspend the buyback program and start worrying about the debt pile.)
What has to happen to justify the current $375?
10% growth over 5 years, with a 35% profit margin (FY21) and a 30x terminal multiple, all else as above, get you close. That is what priced for perfection means. Everybody knows that this is a perfect undisruptable business, so every fund holds it. It will go up and down with the market, so what's the point?
You used to bring up Mohnish often: chek out his Dec 18 interview, where he talks about ADP vs XOM: "What ADP is going to earn in FY23, 24, 25... 20 analysts can get within 5% of that, since the variance is so low, and Wall Street loves that. Do we have an interest in ADP? No. Even though it is a great business".
is it the same case for their competitor SPGI? or does SPGI have a distinct advantage. they seem even more overpriced than MCO
What has to happen to justify the current $375?
10% growth over 5 years, with a 35% profit margin (FY21) and a 30x terminal multiple, all else as above, get you close. That is what priced for perfection means. Everybody knows that this is a perfect undisruptable business, so every fund holds it. It will roughly go up and down with the market, so what's the point?
@@Amwatson801 Good analysis overview! I think much the same way, but then again I am probably too much towards Graham and not enough Fisher :) I can't feel comfortable holding a stock priced that way, so I avoid the US right now altogether as a Norwegian investor. Our market is priced around 10-14 PE!
@@theWebWizrdyou should not buy based off of PE that is biggest mistake ever
Hey Joseph. In Qualtrim, can you create a line in the holdings section for cash. Thanks.
I would recommend just adding in SGOV. It’s short term treasuries so it will basically act like a cash account and track the same.
@@JosephCarlsonShow I'll do that. Thanks for the reply.
Not only is Moody's expensive. It looks overvalued AF to me.
Agree. It's also more cyclical than most think. Profits will be cut in half in a recession, and then the stock will go down 75%. Great business, I can't argue that... but way way way overvalued. 3% fcf yield with 10% growth on a good day doesn't cut it anymore.
Also agree. Been waiting for it to drop for months
@@neilo2323 It won't drop with the amount of debt servicing coming up.
@@neilo2323 Wasnt't it like 300 during the october lows or 20% less then now. Did you buy then?
People said the same about Intuit when I purchased it. It traded at a much higher trailing and forward PE than Moodys.
It’s up 55% over the past year.
People have also said the same about Microsoft, Costco, and Chipotle. All positions that have beat the market since investing in them. I’ve held Costco for 6 years and the stock has always been called expensive.
I think most people optimize their portfolios for short term performance with a hyper focus on multiples of 12 months of earnings. Instead of optimizing portfolios for longer term with focus on business quality and organic growth opportunities.
The problem here is in fact those acquisitions. In 2021 their capital went from $7.2B to $10.3B and the generated economical value almost halved since these acquisitions because of the heavily increased cost of capital and it's now where it was in 2017. I'd like to see these acquired companies start adding more value than the increased cost of capital takes away from their NOPAT/EVA. At the current price it's a hold for me at best, but it's on my watchlist too.
❤ your content....so simple yet so logical
1) Similar Duopoly- Visa and mastercard .
2) Please do a piece on Dev Kantesaria and Chuk Akre (like u did on terry smith and chris hohn).
3) MOODYS- sure a compounding machine but margin of safety ????
Joe has talked about Dev before, he was talking about Dev before he bought his stocks, Intuit S&P Global and now Moody's, he probably had Mastercard before he was following Dev, he might buy some Aspen and some ASML next just because Dev owns them, I certainly did :)
The first stock I ever bought was MCO at $47
"Perpetually undervalued for a long period of time" PE 46 & DY 0.84%
~ Joseph 2024
Edit, since Joseph will just show you his reply, mine is this:
Sorry to break it to you lad, exactly your words 20:42. What's in the following 18 months you won't even see it coming.
No need to be disingenuous when you disagree by making up fake quotes.
That’s not a quote from me. I would never use trailing earnings on a company that just had an unusually low year of earnings to value a stock.
MCO trades at 3% 2024 fcf yield which I believe is a reasonable valuation.
@@JosephCarlsonShow Unfortunately, far too many people rely on the rearview mirror looking P/E ratio when deciding whether or not to buy a company. It's one of the most useless metrics out there. As a new investor, what we're entitled to is the future cash flows, not net income and certainly not any cash flows that were generated in the past.
bought a ton of stocks with high PE, and they overperformed SP500. Not everything is about PE. People told me dont buy costco bc high PE. Its outperformed sp500 by a huge margin.
@@JosephCarlsonShow Sorry to break it to you lad, exactly your words 20:42. What's in the following 18 months you won't even see it coming.
Yes. I believe Moody’s will look undervalued in 10 years based on the price today.
Looking at near term PE ratios has never been a recipe for success. In 2015 chipotle had a PE ratio of 33. I bet you would have said that’s expensive as well. The stock is up over 5x since then and the PE ratio is the same.
So what I’m saying is that my valuation is not based on forward or trailing PE ratio. It’s based on long term expectations of the company. Over a 5-10 year period.
I get it's great, Dev K. owns it, Buffet owns it, they all own it for good reasons, but it is dear in fairness, and yes if you're long term enough the PE dissapears and the 15% growth or the ROIC is what matters but if there's such a good shot of getting it 1/3 off or more over the next few years you could maybe hold off bigger buys at least. You were right Netflix was great too but not 700 dollars great. Didn't it go down to 150 or so? I mean it will be 700 hundred dollars great someday surely but these things can get 5 or even 10 years ahead of themselves, that leaves such a long runway to wait for lower prices, Moody's at 150 maybe, or some early 1970's PE ratios would see Moody's drop to 20 dollars, hardly but that kind of thing has happened before, having said all that I did buy a bit myself, lol, about 20% cheaper ago, it was too dear but the only way to own great companies is to buy them I suppose, I'd just worry a bit that the last 92 internal transactions - that is every insider transaction for the last 2 years in Moody's - were sells. Not one person who works there wants to own it, doesn't sound great that bit.
Hey Joseph. Why did you decide to buy MCO instead of just add more to your SPGI position? What main differences do you see?
The more I learned I realized that their secondary businesses are quite different. I really like Moody’s analytics businesses and wanted to own it separately.
MCO and SPGI have comparable market share in credit rating industry, by owning both of them you get the true monopoly in your holding.
He literally goes over it
Ever look at FICO?
@@mrvictor60 He talked about it in a video about a month ago. His conclusion was its a fantastic business but a bit expensive at the moment. Would not be surprised if he added it at some point if it has a pull back.
Bro you the legit G you brighten my day keep it up brother ❤❤
Now time to watch the vid😊
There we go Joe! Are you still hoping to get a position in FICO one day?
Yeah he is!! But its at a big premium and doesn't seem like it will be coming down!
I went over FICO pretty extensively when looking at potential stocks. Here's a few of my conclusions:
- FICO trades at a PE of around 50 on a forward basis. It trades on a free cash flow yield of 1.2% On paper FICO is about twice as expensive as Moody's based on next years cash flows and earnings.
- FICO has grown free cash flow per share extremely fast by aggressive price increases and aggressive buyback policy helped out by taking out low interest rate debt.
- FICO cannot continue to take out debt, now they will maintain it and pay interest on it, which will dampen their future profitability.
- Investors in FICO are relying mostly on extremely aggressive price increases to justify todays' valuation. There are reports that FICO could raise the prices on their credit runs by over 100% in the next year. They of course can do this because they have a deeply embedded monopoly in credit. Doing this aggressive of price increases however is something however doesn't look good to me. I have seen these types of value extractive price increases cause a lot of negative brand equity, criticism from other companies, and more government intervention. How much can a company inflict damage with it's price increases before people start saying it's abusive?
- My biggest issue with FICO, and the reason I do not own it today, is because of it's very high expectations in valuation and the reliance on extremely aggressive price increasing to justify it. With Moody's I found a company which I believe has as equally powerful of a moat but more reasonable expectations that I'm more comfortable with.
- I reserve the right to change my opinion on this in the future, as I get new info/studying.
@@JosephCarlsonShow I knew you had to have your reasons for choosing MCO over them today past just pure valuation. Incredible analysis, this is why we tune in. Have a good rest of your evening, Joe.
~40% MCO stock price increase over past 4 years.
I bought a few MCO shares after the December 2023 Financial Report.
Your thesis is solid in my opinion.
The hypothetical around observing change early is essentially the whole process Chris Camillo uses, but to the most over the top hypothetical.
Hi Joseph, are you looking to get into MSCI someday?
A couple of questions.
1. Why do you want companies that are perpetually undervalued? (Being undervalued is part of your defininton of "compounding machine.")
2. How do you make the case that MCO is undervalued? I understand your case that MCO is fairly valued. But it certainly doesn't seem to be undervalued, which is one of your criteria for being a compounding machine.
agree, fair-valued is more reasonable.
When I say perpetually undervalued I mean you could have bought MCO at any time in the past 20 years, even at the peak of 2007, and it would have outperformed S&P 500 to present day.
@@JosephCarlsonShowokay, that makes sense, still the word "perpetually" usually mean forever, including future. It's kind of confusing when you want to refer to the past.
@@JosephCarlsonShow
100%. This is the important lesson Munger taught Buffett.
One of the lessons Warren Buffett learned from Charlie Munger was to “pay up for higher quality (faster compounding) stocks”. Buffett’s cigar butt philosophy was not wrong. But adopting Charlie’s investing framework helped BerkshireHathaway compound returns at a faster rate.
•MCO has had a very respectable CAGR going back to 1995
• DCA into this stock at any time from 1995 to date has doubled your investment every 4.7 years
• $10k invested in 1995 would now be worth $632k
Don’t sleep on this one.
Stay Hungry
It's nice to see that my picks aren't wildly off the mark.
But that Honda concept saloon though! I'd buy one. Too bad concept cars don't reach public roads that often. I was so bummed out when I saw a Saab Aero X concept and realized I would never see it in person again.
Great content. MCO (is a quiet wealth compounding machine) has been in Warren Buffett’s portfolio for a long time. It’s CAGR from 1995 to date is 15.37% per year
Why Not MSCI?
Spam comments are insane.
The Honda Saloon looks interesting, but... 1) neither the front or the rear look like they have much in the way of an actual bumper, and look (first impressions) that they wouldn't hold up to even a 5 MPH fender bender. And 2) I'd want to make sure Honda wasn't implementing any kind of "hardware subscription" BS like some of the car companies are trying to pull off (like BMW's heated seat subscription)
they would need to accommodate a list of safety features to be sold in the united states
FICO and Moody are the sort of maffia stocks that are overlooked. Good video as always
Maffia? English and grammar are required skills to acquire.
Yes, no mistakes are allowed on UA-cam, if you are not American, you are not allowed to coment!
The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.
I agree! That's why it is advisable that you have to invest while you still have a regular job or earning a regular income, and do it constantly. You still need to have something that will keep you going even if you're investing. Good financial planning and money allocation is the key.
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
please who is the consultant that assist you with your investment and if you don't mind, how do I get in touch with them?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I knew you'd end up biting into a position of this sooner or later! Awesome stuff Joe
Based on my valuation, MCO is at most worth 250 as of now, can you please share what is the rational to enter this stock right now? Maybe I am wrong....
Can you share why you arrive at $250?
also, it is outside of my circle of competence. I can't honestly say I understand it's in-and-outs.
@@madzyadzy07i use DCF model to estimate the current value
@@dgi012 is investing something you just recently got in to?
@@dgi012 THAT IS CYNICAL....HE COULD PICK ANY STOCK THEN...REPUTATION IS EVERYTHING
Moody's is a great buy. Nice work
I'd bet you listened to the Business Breakdowns podcast. I really enjoyed the Moody's episode.
I wish Fitch was publicly traded as well.
Canadian Pacific is EXACTLY where it was in 2021.
I appreciated your very thorough analysis of why you like MCO, but I was surprised you didn't include a valuation of its current worth using Qualtrim. Did you do one?
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
you are right. it's been a brisk tailwind for lnvestors in US stocks over the decades but it is still a delicate season now, so I advise you to consider the guidance of a financiaI advisor
Due to my demanding job, I lack the time to thoroughly assess my investments and analyze individual stocks. Consequently, for the past seven years, I have enlisted the services of a fiduciary who actively manages my portfolio to adapt to the current market conditions. This strategy has allowed me to navigate the financial landscape successfully, making informed decisions on when to buy and sell. Perhaps you should consider a similar approach.
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
I just checked her out and I have sent her an e-mail. I hope she gets back to me soon.
"More modern younger investors"
*shows a man who looks old enough to have fought in WW2*
I share the same investing philosophy as you but 2022 taught me not only buying good things but also buying things well. Amazon, Google, Meta, and Netflix all got hammered 40% plus ! Tsunami affects all boats regardless of the size!
While I agree with the notion that price matters - a lot - I don't really see the power of your example, seeing as those companies are already back up to new heights :) If anything the lesson could be that when you buy truly great companies, even when they fall 40% they bounce right back. Not so maybe for mediocre businesses.
You can't see the difference? You shouldn't be investing in individual stocks! I bought Amazon under $90! Now I'm up almost 80%! If I were to buy it when it was AH, I would still be under the water -10% right now. That's the difference!
@@Tiger-uk2xd Well, the issue with that is that that data point is extremely biased and is based on market timing. Warren Buffet himself says he does not try to time the market. You had no way of knowing in 2022 that tech companies would fall so much in the future and so that you would have a better buying oppurtunity soon afterwards. If you think you can divine stock market crashes maybe you are the one who should not be buying stocks.
@@theWebWizrd If a stock is at a PE of 40 or whatever Buffet doesn't buy it, probably no one should buy companies at these prices, there might be a rare exception. It's not that you think you can see the future and know you'll buy it for a PE of 15 in 2 years, it's just that if it doesn't get to a PE of 15 you'll never own it, you don't have to own it. If Snickers bars were all 100 dollars tomorrow you wouldn't give up Snickers because you know that you will buy a Snickers bar for 1 dollar again next week, you would give them up because 100 dollars is too much for a Snickers today, no reading tea leaves or sheeps guts necessary, you could just buy a Mars bar instead :)
@@theWebWizrd What you fail to understand is that you have to try to time the market one way or another. I'm not talking about swing trading in and out of the market. Warren Buffet has over a $100 billion on the side line. What do you think he's doing? He's waiting for opportunities, waiting for good companies to become cheap again so he can load up! Or else why doesn't he just put all his cash in all these great companies right now like Costco, Microsoft, or Google? Why? Because they are too expensive at this point. The name of the game is buy low, sell high not buy high and hoping it will go higher! Anyway, invest whichever way you like. Good luck to you.
This is off topic but have you ever considered adding CAT or DE towards your industrial holdings? Informative video as always, cheers man 💪
Very pleased with how CAT did in my portfolio, it's ahead of the market and sector by more than +10% since November last year
@@yoxal4373 Nice. I myself have recently added CAT at a 5% weight
Great businesses. Terrible buys on a CAPE ratio basis though. Which for cyclicals like them should be analyzed as such.
CAT just got a $2 billion screwing from the Biden administration! A massive recall on Ram trucks coming up. All to appease the climate change fanatics! (Crooks) Might be a dip coming!
I bought the dip on both of these last year. 👍🏼
Imagine being so profitable that you can 2x everyone’s salary and still be profitable.
What is the greatest strategy to take advantage of the current market. I’m still deciding whether to diversify my $400k stocks portfolio? how do I redistribute stocks in my portfolio to hedge against crash?
The market is volatile at this time, hence I will advice you get yourself a financial advisor that can provide you with entry and exit points on the share/etf you focus on.
Accurate asset allocation is crucial, and some individuals use hedging strategies or allocate part of their portfOlio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay finan-cially secure for over five years, yielding nearly $1 million in returns on invest-ments.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
’Vivian Louise Dehoff’’. is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Hi Joseph, could you make video 'fair price of your stocks' please
Buy NVDA
Its gonna be worth 1500, if not 2000, by the end of the decade
with P/E = 47 , don't u think this stock is a bit expensive right now as entry point ?
Next Buy: Visa 😅
I just bought ARM today. Looking forward to Joseph ripping it apart like he has with my past stocks. 😂
I think it's very dear mind you, it'll take you 140 years to get your money back on current earnings, I hope it grows pretty quick for you, it seems dear enough to have a 75% crash in the next few years, 90% if something actually goes wrong with the company, I'd be terrified to buy in at these prices, but I'm a scaredy cat
Not voting arm on float day is mind boggling to me and ot voting rolce Royce at penny's also I did both cashed out 180% up o both then bought gold days before this weeks record gains
How do you know what amount of stock you should buy when building your portfolio?
in my case Chris Ryan Stewart has assisted me in doing that effectively, I'm not an expert so I lack experience in investment strategies, I work and my consultant handles the rest.
indeed, most people downplay the roles of financial planners until burnt by there mistakes. Productivity is optimized and keeping up to date strategies and analysis makes it more lucrative. I've been able to navigate the volatilities and scaled up 880k from 220k with professional guidance.
I just googled the name you mentioned, I am quite impressed with his credentials, will get in touch because I need all the help I can get, and consequently schedule a phone call. Thanks.
impressive, I'll definitely check it out, I buy the idea of employing the services of a financial advisor because finding that balance between saving and living requires counsel. How can one get in touch?
Honestly this cannot be overemphasized, helping people mitigate unforseen circumstances and mistakes .It's always good to have a financial plan,
I hoped for ASML when i saw the title of this video
Those MAX jets were not grounded, each carrier has to do an inspection and then the plane can fly again. Some are already flying.
When you’re adding funds into your assets do you add by target weights or do you self balance and add more funds to underweight stocks in your slices and less to over weight stocks in your slices ?
Haha I like your investment objective of adding stocks to the portfolio that don't make your portfolio worse. That reminds me of Buffett's first rule of investing.
Boeings issue is quantity over quality. Basically, they need to focus on better quality planes.
Joseph, I would like to hear your opinion on holding SCHD for the long term. Thanks for the great content.
I love the etf but feel that investors in it would do well to add in some big tech exposure in addition to it.
@@JosephCarlsonShow big tech dividends
@@JosephCarlsonShow
100%. SCHG is a good complement to SCHD. Investor’s narrowly focused on dividends could be sacrificing superior TOTAL RETURN 😊😊
@@Coda1850
IMO focusing on TOTAL PORTFOLIO RETURN is more beneficial in the long run. SCHD prospectus explains the narrow focus it has. Hence there are periods of time it will underperform. These periods of underperformance can be as long as a decade.
• younger investors need to own small cap and growth ETFs
• SCHD is perfect for a retire who needs income (dividends)
Some numbers that speak to my point. Median P/FCF is 26.07… it’s trading at 40x FCF… just seems really richly valued. Share price has compounded at 40% annualized over the last 10 years… doesn’t seem sustainable…price/sales at over 12 compared to the median p/s of 7. Morningstar FVE of $335/share implies 12% overvaluation as well..
I know you said you'd skip VISA for Mastercard but don't ignore Dev Kantesaria's smaller purchases either, ASML and Aspen, you may as well buy them now or you'll be buying in when they're dearer in a couple of years :)
Boeing moving management 3000 miles from manufacturing seems like it has been a disaster. Management should be on site where they can monitor what's going on.
Can someone explain the math to me when he's had a 100% return but has only gained $150,668 from a 600,000 portfolio? My dad got confused and I had no explanation.
M1 Finance
Some BS m1 finance does to make you feel youre doing better than you really are, it accounts time into how they calculate that percentage.
Personally id rather just have a simple loss/gain percentage
@@JohnBrowningsGhost ah okay thank you
It’s money weighted return or internal return.
Newly added capital does not impact the returns. For example. If I added 400k tomorrow, my portfolio would be at 1 million but I’d still have 155k in gains and still have 100% returns. New capital only impacts the total value, not the gains or returns, and I’ve added a lot of new capital over the years.
@@JosephCarlsonShow I think that the way it is shown in your videoes is the best and most accurate way to show your returns in the sense of your portfolio performance :) I think it would be very misleading if in your example the displayed return dropped dramatically!
The amount of catastrophes with Boeing planes is deeply concerning. Aircraft manufacturers should not primarily be focusing on profits. We’re talking about dealing with real peoples’ lives on the line here. Airlines are also responsible for choosing the aircraft. Safety first and foremost. Always.
How does this compare with MSCI?
What’s the difference between Moody’s Analytics and S&P Market Intelligence? Aka both their data analytics divisions
I have MCO on my watch list as well.
I added Jepq to my VTI and SCHD
Brilliant. As always, thank you Joseph!
Already had Moody's excellent choice!
The first thing that popped into my head seeing the front of that EV car was that it looked like a catfish.
Boeing is hard to trust after what they did. I only swing trade the stock. Never wanting to stay in the position long term. I wish I had Airbus.
Great Video. Thanks!
I'm favoured financially, Thank you Jesus.$52,000 weekly profit regardless of how bad it gets on the economy.
neah, overvalued MCO - i'd better add to SPGI, MA or open a new position in V, than MCO at these valuations...
Im surprise you didnt buy into FICO when it was in the low $800 range around October 2023…. I remember a video you did on it.
It's the "perpetually undervalued" bit I dont get. 10 years ago Moodys had a free cash flow yield around 5-6% well above the 10 year yield of 2.5-3%.
5 years ago it had a yield of 3-5% when the 10 year had a yield below 3%.
Valuing it based on other opportunities means testing it vs government/corporate bonds and there it has inverted on a free cash flow basis being below.
Isn't moodys own debt a higher yield than its FCF?
10 years ago moodys EV/EBIT was as low as 12, Today its been as high as 37. Its value has been more than recognised by the market over that time.
What brokerage do you use?
Are you not worried about the price of MCO? 45PE ratio seems high for a finance company
It does not trade at a 45 PE.
Its earnings estimates for 2024 are $11.17. At $375 that’s a 33 fwd PE.
good move, Joseph. Moody's is solid. With the debt markets expanding, they will make much coin. But SPGI and MCO are damn near the same company. And have performed in tandem. Why not just merge the position into one company?
Hey there! How can I calculate if a company can return all of its cash flow to owners?
OK, I grant this is a good company. But why buy at its peek? I would be shocked if it didn't drop to at least $350 in the next few months.
You could save yourself a lot of time and research and just buy Berkshire Hathaway, but then, I guess, you wouldn't have a show.
I outperformed Berkshire by over 15% last year.
@@JosephCarlsonShow Good job, maybe you could replace Warren? One year is not enough of a sample size, but as you know, over the long term the market is a weighing machine.
My point was that my portfolio is quite different than Buffetts. He’s limited by the massive size of Berkshire and the only buys that make a difference are of mega market cap companies. He couldn’t buy Texas Roadhouse for example.
@@JosephCarlsonShow Looks pretty similar (which is good), but you're right about the size issue. Small caps make no difference to Berkshire.
SCHG has all these companies and they beat the S&P. So does VGT, VUG, QQQ...add SMH/SOXX and your locked into a market beating portfolio.
Any thoughts about adding bitcoin to your portfolio one day? Etfs were just approved
Buy fico, I thought they were topped out a 1000 but they continue to impress
Buy a company you think is past its topped out price?
Bought at 1k, liking it at 1.1, tempted to increase position
@josephCarlsonShow Do you mind sharing what strategy you use to add more to a position? What event throughout the year help you know when to add more to a desired position? Every x time period do you try to dollar cost in, or set up an alert on the price, or manually watch it? How do you think about build out a position?
Atrocious valuation metrics but undoubtedly a compounder. I just like to buy with a margin of safety rather than overpay by 8-10%. That being said, hold it long enough and the quality will shine through.
Really liked the video, but showing free cash flow for Citigroup is not meaningful, since you can not use free cash flow for banks.
Since a bank is paying out a lot of loans and the repayment is only coming back partly over years, the cash flow is most of the time negative (as long as it is growing it's loan book).
So free cash flow (and a lot of other Financials metrics) are not useful for analyzing or comparing banks to other stocks.
For banks you rather look at RoTE or CIR as the relevante metrics, but don't compare a bank (citi) to a non bank (Mastercard) based on free cash flow
To be clear as an aviation nerd it was the 737 not 747
I can thank you, Joseph, for helping me not invest in Boeing a few years ago when they had the 787 Max issues. It seems like the company hasn't changed much since then.
That's what happens when the executives overpay themselves and underpay the engineers.
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields
What happened to TROW?
Joseph, I'd love for you to look at Cintas (CTAS). Very similar fundamentals to Moody's, increased dividend 41 consecutive years, and 3 year annualized dividend growth of 12.5%
Wow that's amazing find. Thank you!
Can you please make a video of FMC, it dropped really hard and I would like to know what you think about the company.
but MCO only pays 0.82%
Is it your definition of good history?
Interested what you think about Gartner? Symbol: IT
Hey Joseph love the content! Jusr curious, whats up with crowdstrikes -5000 p/e ratio?
@JosephCarlsonShow Greetings, can you review Novo Nordisk A/S stock in one of your videos. It looks like a great one.
they didn't do it buying expensive, Graham is the father of the concept of margin of safety, it's not believing the business you are buying isn't that great is a preventive measure when something goes south, and wishful thinking earnings only go up and up forever can cause you buy before a better entry point and that reduces your margins