Transcription
And hello everyone, I hope you are doing well and welcome to this weekend episode that we haven't done in quite some time. A little recap of the week. Uh, an episode that I take a lot of pleasure in making. I do it from time to time. We're going to talk a little bit about stock market volatility, about the central bank, about what's happening right now in the markets, and then quite a few stocks. Uh, we're going to talk about the valuation of certain companies, about options. We're going to talk about IMS, Amazon, ASML, Google, Service Now, about what I'm seeing right now. Am I seeing a lot of things to buy? How can we work with options? Companies perhaps that I might sell because some are a bit overvalued and so on. So these are usually casual videos on the weekend where I tell you a bit about everything I see and what interests me right now. And as usual, you have the table of contents to move from one chapter to another. The goal is not to waste your time but for you to be able to go directly to what interests you. For information also for the program and the community. I made you a post with quite a bit of fundamental analysis this morning and uh you will have uh obviously uh Monday the video that we do, well, therefore every Monday to prepare for the week, current purchases in terms of valuation and so on. And I also made you five quantitative stock analyses this Thursday. And for those who want to join us, to have access to a community without commitment where uh we exchange daily uh with quite a few investors now and uh I also share the videos, what I do uh in my investments, it's really a bit my investor's notebook, my logbook as I like to call it more and more. Well, don't hesitate to join us, it's without commitment. So you can discover the work beyond YouTube without too much friction and for those who also want the training aspect, it's available with the annual subscription since the update I made in March and April. OK, let's get started with the video and as usual obviously, this is not investment advice.
So, first point, we have quite a bit of volatility in the markets right now and it's quite interesting because we were in euphoria at the highs, we had quite a few drops due to fears that arose in the markets between the conflict between Iran and the USA where it goes, it comes, negotiations are happening, negotiations are no longer happening, the Fed opens, closes, or closes and uh also what happened with the interbank bank. So, I wanted to come back to this specifically, I was starting with a post. Before, I'm going to show you the markets, we'll take, let's say, the NASDAQ, you see the volatility, the days we're experiencing each time, the variations in a week, we do -3-4% then we recover everything the next day, that really creates volatility. Also look at what's interesting and I posted these three photos in a post recently in the school, you have the fear index, the euphoria which had returned to almost 70 in euphoria, almost 75, and now for about a month, we're going back down and we're moving back into pessimism. And meanwhile, the S&P, it made a drop and it recovered. It's not far from its all-time highs even though we went from euphoria to fear. And I'm very comfortable in this kind of situation. It reminds me a bit of where we were in January when I kept saying I'm increasing my cash, I'm taking it easy. Well, it's a bit like that right now. I also work with options, I'll talk about that later. And so regarding the American central bank, we will have neither a decrease nor an increase in rates. I made a complete video about this a few days ago on YouTube where I talk about it much more. Uh, we had the Fed meeting which obviously took place just after oil dropped. So that was rather good news. Uh, inflation is rising, we can't deny it. Employment is also deteriorating. Uh, now, the point to watch, I think, and we might discuss it again one day, is real estate, which is suffering. In the United States, it's blatant and even in Europe, I'm looking at real estate right now too and it shows. And so you have an American central bank that sees inflation picking up again but partly due to energy. So that can be resolved. And on the other hand, you have employment deteriorating but still acceptable, and real estate suffering. So personally, I see them not touching rates until further notice and then we'll see a bit later. The market thinks they will raise them. Personally, I don't amuse myself by betting on the future. On the other hand, I know the long-term cycles and I talked about it in the other video. Clearly, I remain invested because when you see the deficit, the difficulties we have, the monetary impression that has started again at full speed, they are printing 80 billion, 100 billion, 120 billion. Yes, I remain invested. And for me, it's not the time to be bearish either, meaning I'm taking advantage of it to increase my cash levels a bit, to buy good deals, even to take profits. I'll talk about that later. I'll take profits where I'll take them very soon, particularly by selling calls. Uh, buying current good deals, obviously, we always find them, but it's not the time to be in total euphoria. In any case, for me, it's not the time. Maybe, well, everyone will do as they please. I'm rather comfortable in a situation where we're not far from all-time highs, we're not in euphoria, there's a lot of fear, well, a super nice situation. Obviously, well, buying indices and stocks that are too expensive because I find some stocks too expensive right now. Some, in any case, I avoid doing it, but case by case, we still find them, and I'll talk to you about it because well, there are stocks that I don't find expensive right now. We can start with IMS.
So, uh, IMS is a company I have in my portfolio. It made quite a splash in February because it corrected significantly for reasons that I personally didn't find entirely founded. There were major fears about lawsuits and so on. I addressed all the fears. For me, it would be negotiated. I said so in the video and that's what happened. I'm happy, I had more than doubled my position. I kept talking about it. I had only made videos in February, given the number of messages I received. And congratulations by the way to all those who held on during the drop because it wasn't easy to maintain your rationality and emotions and your analysis in the face of all the fear. Now, we're back to $35 and even at $35, we're only at 8.21 billion in market capitalization. Uh, which gives us a price to revenue ratio of 1.26 based on the revenue announced and projected by management in 2030. That's still not shocking given the growth rates you can see for this company. We can look at them again together annually. There. So, it slowed down a bit in the last 12 months and quarterly due to the cost they incurred, particularly with Novordis, which you can sell and then you can no longer sell. You can imagine, well, cancelled sales at the last minute and all that, that was a little less than a year ago, and since then, well, they've recovered well, they've done things. So for me, the long-term trend will be very clear. But there were fears about it, let's be clear, which caused it to correct. Uh, I'm still impressed by how much the market can make a stock collapse. And there was a moment, I remember very well, we were talking about it together, I said I don't understand. I was thinking, I don't see where I'm missing something and I don't see why I wouldn't double my position because in fact, no matter how much I looked at the risk-reward ratio, I didn't understand where I was wrong and so well, I went for it. And so remember for those who were there, all the negativity that was at its peak, these are good lessons to learn. It's hard to be rational in those moments, and well, congratulations to those who did. And speaking of cheap stocks, well, IMS at $35.25, I don't find it cheap. I've put stocks on it now, it will be a bit reasonable. I might buy more later if it corrects again. I wouldn't be against it. For now, my position suits me. And at worst, we can work with options. You see, I'm doing it right now, for example, I took $104,178 in premium by selling puts. Also buying back, I had realized $664 in premium by buying back calls that I had sold a little earlier on companies where I had left them at the level of my red pointer. And even on IMS, I don't know, imagine someone who had done their analysis and had a target price to pay, I don't know, at $27-28, everyone will do their own calculations. Personally, I've already said it, at $35, I don't find it expensive. Well, I'm not buying more. At some point, I also have to diversify, that's why I can't buy more. I already have 1000. Uh, but for example, if you were to sell at $28 or $27, you could collect $143 for $2800 invested. That's a significant premium. You're at over 4% for 41 days. Obviously, with high volatility, you can be assigned if it corrects, but why not work with options on it? And yes, the valuation is not shocking. So you see, a company that, people asked me what to buy right now. Well, personally, if I didn't have IMS in my portfolio, I would ask myself questions. Now, obviously, we talked about it a lot. I know that the majority of your purchases, in any case for those who are buying, we talked about it in the school when I say we, I mean what I do and all the people I exchange with, I talk to a lot of people daily, I reply to you and so on. And the bulk of the purchases were made between 25 and 15. I had accelerated a lot around 25, but even at 35, long-term, I'm not shocked. Short-term, it can correct, you know. Don't make me say what I haven't said, but well, it's not a company that I find too expensive.
We can continue now with Exact, which for my part, I find expensive, and I warned you, this video will be a bit longer. I'm talking about everything, I'm telling my life story, I'm repeating myself, but it's okay. Uh, sometimes repetition is extremely important for learning too. So, uh, we find stocks that are more expensive, and then I'll talk to you about stocks that are cheaper. That way, I'll have done both today. And I'm telling you about it because I'm considering taking partial profits. Uh, three companies I'm thinking about would be ASML, Google, and Apple. Three companies I have in my portfolio. ASML, it's incredible that the market let us buy this company at 600-something euros, well, last summer. It's quite impressive. So, wait, I'll find the quote. Here it is. I bought my position around €642. We're at 1660. Uh, it's expensive, I can't deny it. We can even look at the indicators together. So here you have Apple, but I'll start with ASML. At some point, I do have questions, I won't hide it from you. You see, we're trading at over 56-57 times free cash flow without reintegrating stock-based compensation, and uh, 19 times revenue, uh, whereas we were at less than 10 times revenue. So, yes, it's tempting to sell. For now, I haven't done it. Uh, we'll see, why not take partial profits? Uh, Google too. And by the way, speaking of partial profits, before talking about Google, you see here in my "when to sell" algorithm, and I'm telling you this because precisely I have nothing against selling, in fact, let's go back to what makes us decide to sell, and if I say this, it's because I've often regretted selling too early, you know Nvidia, Palantir, I've already told you about cases like that where I regret it, and I had convictions in the companies, and even Nvidia, I ended up buying it back seven times more expensive than I had paid for it, having sold it with a x3 when I could have had a x10. It's okay, we learn from mistakes, and moreover, I make them live, I have the pleasure of making them on YouTube. But well, I will always do it sparingly, for example, selling Oscar before talking about Google. I'm just making detours because I wanted to talk to you precisely about the "when to sell" aspect, about having these reasons, but once we have them, I have nothing against it. You see, Oscar, I got into it clearly for a trade around 13-14. I have options with strikes at 15 and a position also between 13 and 14. Today, it's at 28. I'm selling calls and it will certainly leave in a few weeks and I'll take my profits. I have no problem because well, I find it too expensive now. I bought it really at a discount. And well, that's what I'm writing here. You see in the "when to sell" video, you can exit with options. Another alternative, well, is to take partial profits. For example, Oscar, I'd like to keep a hundred shares. I have 400 for information. Well, no, I have 100 shares, 200 now actually, since I exercised a call with a strike of 15, I allowed myself to buy them, and I still have two calls on it, and uh, yes, I can see myself selling 3, 300 shares, sorry, out of the 400, keeping a quarter of my position, that reimburses my initial investment, and then it's all bonus, you know. So, well, ask yourself these kinds of questions because you might regret selling. Likewise, I'm taking my Apple profits. Apple, I put it in this slide in the sense that yes, I'm tempted to sell, but the company gives me no reason to sell. I'm at a x6 on it. Yes. After all, it's been a while, August, August 2019. Uh, so, it's true that it's expensive on paper, I won't hide it from you. Uh, tell me what you think of Apple. I don't think you're buying it. Uh, I find it expensive too, but would you sell a company like Apple? Personally, I call them my silent innovator, and even if it's true that I'm at 33 times operating cash flow, 37 times free cash flow without reintegrating stock-based compensation, 9.5 times revenue, I find it's not expensive enough to justify selling it when I still like the business. And the more I study Apple, the more I use their products and so on, the more I realize that well, it's a business I like a lot, which has a lot of customer data, uh, billions of unique active users on their devices. Well, I think the statistic is around 1 billion unique iPhones. And in terms of Apple devices, I think we're over 2 billion. I don't have the exact statistics. If I'm wrong in the comments, tell me. But an incredible business. It's true that at the time, we were at 12 times operating cash flow in mid-2019. Well, I'll go through this slide a bit quickly because the goal is not to talk to you about overpriced companies. You're also here to see companies that are priced reasonably, as I was talking about just before with IMS, for example. But it's also important because it's just as emotionally difficult to ask yourself the question of whether to sell or not, to take full or partial profits, how to manage that? And I exchange with many of you through the small exposure I have on YouTube, and it's a question that comes up very often and is sometimes even more complex to answer than what we should buy. So I'll talk about it regularly. And Google too, uh, Google, I'm at a cost price of a hundred-something per unit. [sigh] Uh, I'm hesitating to sell a bit. You see. We'll see. The valuations would really have to explode. Of the three, the one I'm most tempted by, I won't hide it, is because my position is much smaller than Google's, for example. So I'm hesitating to cut a part of ASML. So there you go, and it's also expensive.
We continue. Uh, Amazon, a company that is, frankly, not that expensive. So you know I like, well, you know if you're new to the channel, welcome and thank you. But I really like buying companies that are cheap. In any case, according to my figures, everyone can be wrong. I built my position well in April. I kept talking about it. I don't know, I put it here. Look between April 5th and April 21st, I made five videos where I mentioned Apple, it was during the dip. Apple, sorry, Amazon, I kept talking about it. And frankly, I already said it not long ago, uh, yes, it was here, see, April. I was telling you recently, at $240, well, if someone tells me, "Dorian, you're overdoing your valuation, you're really too conservative." You see, I ask for a safety margin, I really slow down the growth rates, I always include dilution, and so on. Uh, one could tell me, "You're a bit too conservative." And if someone did their calculations and tells me, "I'm going for it at 240," I'll tell you I'm not shocked. Not at all. Uh, now, we're not quite at my price. I'm at 216. Sometimes I'm a bit rigid about my prices to pay, but that's okay. Uh, I've already built 30% of my final position. So that's good. Uh, if we come back to it, I could build more and even exceed my initial investment if it corrects further. Uh, and I might do it through options. I'll look into that. Uh, for example, you see here, 41 days, and we can sell further out, sorry, at 60, 90, and so on. Uh, if I were to sell a put at 205-210, for example, well, that could bring my average cost price down even lower because I would pocket the premium. And uh, for example, if I were to sell for 3 months, 6 months, 1 year, and I asked myself, would I be willing in 1 year to buy Amazon at 210? Well, why not commit to doing it via a contract? It's not something that shocks me. So, I've said it many times, we also talked about it last time live. I use options as a cherry on top. That is to say, I would never amuse myself by not having bought Amazon the hard way in April, by buying several times a week, and by selling puts feeling clever, thinking, "Ah, it's at 200, I want it at 160, and I'll never buy it." No, if I like the business, I enter it the hard way first, and then I work with options. I specify this every time because, well, because I was talking about it last time with one of you who told me, "Oh, I missed the boat because I only sold puts," and since that conversation, it's true that I, well, it was maybe 3 months ago that I talked about it, 3-4 months ago, and I talked about it again live, I also talked about it on the podcast, and yes, cherry on top, but I have nothing against doing it, and if someone tells me Amazon is too expensive right now, I reply, "Yes, it's a bit expensive, it's not that expensive either." So, if I didn't have any in my portfolio at a unit cost of 206, I would ask myself questions. So, there you go, the goal of this video, which is mega long, [laughs] mega long compared to what I usually do. Amazon and IMS are companies about which I'm seriously considering, and there are others that I'm hesitating a bit to sell. We'll see if it happens, I'll talk about it. Uh, Service Now, an interesting and recent lesson, and I wanted to talk to you again about all the software, but specifically Service Now. Personally, I'm being patient with it. So, uh, I've started qualitative analysis a bit, but as long as it's not at the right price, I won't go for it. I made a video, well, I won't go for it, I mean I'll continue my analysis, I'll spend a lot of time listening to management if it's not too expensive. I made a video about it on June 4th, I noted it on my side, it must have been here. Yes, it was trading at $120. The video was interesting. Uh, I hear that the rise also caused reactions. And uh, the question to ask, well, is what price to pay? Because for example, here, I think it had recovered, so it might have caused some reactions, I know it too because we exchange. And we've corrected again since then. How do we look for these kinds of situations? Because imagine, and I'm telling you about it because I like talking about these kinds of things. Emotional management and rationality are extremely important to me. How did we react if it was at 80 and someone said it went up to 120 and we thought we missed the train and we started buying up there? Well, if we start buying up there because our spreadsheet, well, this one is for Amazon, tells us yes, you're at the right price. Ah, there's no need to have too many regrets. But in any case, don't pay more than what we decided. And uh, in the meantime, I've redone my figures, and personally, even right now at 95, I was looking earlier for this video, it's still not a sufficient discount for me. So yes, it's going down, but for me, Dorian, doing my work, which is not finished because again, I repeat, I usually find a rough price to pay, and then I'll go listen to management and so on, obviously, before getting into the company and at least doing some qualitative analysis and so on. Uh, but again, like Amazon, it's my figures, and I understand the interest. OK, it's a bit expensive for me, but I can't say it's extremely expensive. So there are many stocks right now that are not that expensive if you like qualitative analysis. There's Seris, there's Amazon, there's IMS in my opinion. In this Service Now video, you also have Meta. Meta's valuation right now is a bit excessive, it's really low. I also included Docusign and Adobe in it. And so I wanted to talk about Service Now again because it's an interesting lesson because we push the debate a bit further than just "What do you think of X Y Z stock that's going up or down?" And I also know that well, you like it when we talk, well, I know it because I talk to you in DMs and so on, I know you like it when we go much further than just three figures and an opinion on a price. Ah, you saw, it went up, or you saw, it's going down, and do qualitative analysis, push research. And in this video, I did it, I asked myself a lot of questions. Don't hesitate to go back and watch it about software, about much more qualitative questions, open-mindedness about the business model, about its future. Much more than just talking about three figures that I share with you all the time, the figures, but in fact, it's the easiest part of the analysis. Numerical analysis, it's not, it's 5-10% of the work, and 80% of the work will be qualitative analysis, and over 80% of long-term success, in my opinion, will be emotional management and not being swayed by the market. So, well, it's still a bit expensive for my taste. Service Now, you realize, was a bit of an excuse to give you a monologue, but a tiny bit expensive for my taste. If it corrects, why not talk about it again, because I would say that among my software picks, it's not the one I like the least. Uh, I'm adding software to my portfolio, we even talked about it when I say software, I'm also thinking about all the companies that are suffering from the narrative around investments in artificial intelligence and so on. For me, everything has been put in the same basket. Software will be killed by artificial intelligence, and companies are investing too much in capex and are, so to speak, throwing money out the window because perhaps it will never be profitable. I recently talked about Nebulas, I think. Well, Amazon too, obviously, which invests, invests, and so on. So I'm buying in the sector, and it can happen so often to say, no, the stock is going down, it's going down, it's going down, and then one day it's yes. So we'll see the latest one where that happened. Well, it was like Amazon, we were talking about it before. But I really like what I'm doing right now. You see, I'm making a little less videos on YouTube. We're at 3-4 per week. I spend an enormous amount of time analyzing in the background, looking for businesses that interest me, buying, managing my portfolio, uh, also talking a lot about everything related to management, emotions, and so on because, and you know, I'll finish the video on this, I noted it down. We were talking about it for the last 6 months and even the last 2 years. And well, what we've been through is quite impressive, and you see, I'm spending more and more time, yes, doing analysis, talking to you about macroeconomics too. I know it's interesting when we talk about central banks, the fundamental reasons why we should invest long-term, and so on, but also much more, and I realize this, and in fact, it's thanks to the community, I realize that it's one of the things you like the most, like the video we do on Monday about macroeconomics, about emotions in the market right now, and for example, well, in January, it was so relevant to say, "Ah, we're at the highs, we're coming out of a period of euphoria around Christmas, remember the end of the year and all that." Maybe it's time to increase cash levels a bit, to not get carried away in this euphoria. Well, we didn't know it, but in March, we had a big drop. And then, it was extreme fear, buy, buy, buy. I was pestering you in April, and I love following these sites because in fact, it allows us to manage our emotions. For example, it's the little phrase I often say, don't worry, we'll get another one, we'll get another hit, we'll get another drop. I don't know when it will be, but we'll be there. And so, when I'm in these moments, and I talk about it a lot right now, because well, we see it, I exchange with you, well, I exchange with you, we talk and so on [grunts], and well, the questions I see right now are, we're at the highs, what do we do? How do we manage? Sell, reallocate, withdraw money to wait for the next drop, questions that I also feel. And uh, well, that's why I made the video. And so right now, my mindset, well, is that I'm finding a lot of good companies to buy. I keep showing you interesting companies. Uh, spending a lot of time analyzing, increasing cash levels, why increase cash levels. Profits, I have nothing against it, but following an algorithm or a selling methodology that suits you and not regretting having sold, and then, well, taking a step back. Summer is coming, volatility might decrease, and so on. Uh, well, I hope this was interesting for you, this tangent at the end. And certainly perhaps the most important part of the video, even if it's just me saying, "Ah, right now the market feels this, it feels that." But well, as Charlie Munger used to say, perhaps in a slightly less delicate way, and in any case, he had his way of saying it. Sometimes, it is urgent to do nothing, it is urgent to wait. I really liked this investor, may he rest in peace. And uh, well, yes, right now, my feeling is that it is urgent to do a lot of analysis. I'm still buying, but it's also urgent not to get carried away and not to buy a company, I don't know, like Service Now, because it went from 80 to 120 and oh, it's done, software is coming back, I'm buying at 120 without knowing why we bought it and what price we're going to pay. But in fact, we all feel it. Right now, I'm talking to you, there's a camera between us, but I'm telling you about my Saturday, I'm telling you my life story, but we all feel it daily, and I think it's important to protect ourselves from it and to talk about it. In short, I hope this video was interesting for you, a bit longer than expected, but it's fascinating, it's my passion. I hope that comes across. It's a pleasure, portfolios are doing well, we're almost at the highs. I wish you all an excellent day. It's finished for today.