Transcription
Welcome back everyone. Today on the Joseph Carlson show, amidst all the news, all the chaos, the war with Iran, the spiking oil prices, the labor market, everything that we can look at on a day-to-day basis can be very distracting. It's all very important, but it can distract us as investors from some of the biggest opportunities happening today.
Right now, there are six stocks, six of the highest quality compounding machines in the market that the market has sold off. These are stocks that are in massive draw downs. These are also companies that some of the best investors in the world own like Bill Aman, DevCantasaria, Warren Buffett, Chris Hone. They own these very stocks. And these very stocks are selling down big. We're going to be going through them. I'm going to be looking at each of them and giving you my analysis of why they're selling off as well as why I think they're buys today. So, we'll be looking at six of the best companies in the market owned by these super investors that have sold off in our opportunities today.
Now, of course, we have a lot of other news to get to as well. For example, Tom Lee recently did a viral interview where he says that the market's going to go up this month. He believes that the market will go up, but then he's also predicting that we'll have a bare market later on this year. Why does he think we're going to have a bare market? We'll be looking at it. And then finally in the fail of the week, we have Andrew Yang going on to CNBC and talking about the end of the job market. The major disruptions that will happen, how everything is basically going to be bad in the future. People aren't going to be able to find jobs. It's going to wipe out entire industries. It's a lot of the rhetoric that we've heard before. Andrew Yang makes this case saying how bad things are going to be in the future. And he also offers a solution, which of course is government intervention. So, I'll be going over this point by point and ultimately why this interview is the fail of the week. So, we have a lot to get to in this episode. Let's go ahead and jump in.
Now, we'll start off by looking at six genuinely great companies that are in major draw downs. These are compounding machines. These are companies that some of the best investors in the world have given their stamp of approval. Some of them have done incredibly in-depth research on these companies. And it's very common in times of chaos and lots of world events, lots of macroeconomic events, lots of longtail risk, all of those things happening right now can cause great companies to sell down more than they deserve. And these are the type of companies that in many cases, looking forward in a year or two, many investors may look back and say, "Man, I wish I bought it when it was on that dip. I wish I got this company when no one else wanted it. I can't believe I didn't buy more of it when it was only at this price." Well, here they are. Let's go ahead and just go through them.
The first one is FICO. FICO is now down below $1,200 per share. It is currently in a massive sell-off. When we look at FICO just recently, in fact, year to date, it's down 26%. So, over a quarter of the market cap chopped off year to date. But FICO has also been as high as $2,200 per share in less than a year. FICO is down nearly 50% from its highs just a year ago.
Now, when we look at FICO, it's important to know who has actually owned this company, the stamp of approvals that it's had. Now, a number of super investors own FICO, one of them being Chuck Ori, who only holds 18 positions. So, it's a fairly concentrated portfolio to begin with, but if you look at the actual position waitings, maybe five or six of them aren't really meaningful at all. They're less than half a percent. So when you start getting to the meaningful ones, they really only have around 13 holdings. FICO is one of them at above a 5% waiting, meaning the team has done work on FICO. They believe that this stock is a an incredibly highquality company to be in the Chuck Ori portfolio. They hold this one, but we also have super investors holding it in even bigger size. One of them is Linds Train that manages $4 billion in assets under management. When we look at their portfolio, one of their top five, top six positions is FICO, a 9.29% waiting. So this is again a massive position and a massive fund by a super investor. But they're not the biggest. We have yet the biggest position in FICO held by none other than Dev Kantasaria from Valley Forge Capital. One of my favorite super investors. He's done in-depth analysis on this company. You can listen to it in a business breakdown. He talks at length 30 40 minutes breaking down every single detail of FICO. Why the moat is so incredibly difficult to break, how the company has so much pricing power, how it's deeply embedded in our system, in our economy. It's a really extensive look at FICO. And he represents this with 30% of his portfolio. 30% of currently $4.4 billion in this one holding. And this holding is down by 50% from its highs.
You may be wondering if this stock is really so good, then why is it going down so much? What's going on here? And there is a number of reasons. One of them is simply that FICO did trade at a high valuation. So part of this is just multiple compressions. It went up to a valuation that was a little bit higher than even people like DevCantes expected. It just climbed a little too high. So that's part of it. The other part is that they gave a little bit softer guidance than what analysts expected in 2025. They had a really great year, just an amazing year for FICO. They tempered expectations a little bit in 2026 that they're not going to squeeze on pricing quite as much as people anticipate. Another problem for FICO is that the housing director is trying to make it so that they do have a level of competition specifically with Vantage Score. That's the one that's owned by all the credit bureaus like Equifax and TransUnion. and they've recently announced that they're basically making that score cost zero. They just want to try to get in the market against FICO. So investors are a little concerned. Is Vantage Score going to gain market share? Is it really going to start competing against the FICO score? It hasn't really so far, but there is some analysis showing that it may. So that's putting into question a little bit of the moat of FICO. Previously investors thought it was unbreakable and now they view the credit bureaus and vanish as a potential weakness in the moat. And then finally there is the overall selloff. FICO is just one of these companies that's in the software basket. You can see many of them in the financial category and the SAS category that have been selling down and that has put pressure down on the overall category of which FICO sits in. So there is a number of reasons that this stock is going down.
But at the end of the day, FICO's moat is very strong. It's likely that Vantage Score will take some market share, but not a meaningful amount. FICO is deeply embedded in the mortgage market in loan origination. It is the best scoring system, and beyond that, it's a common language. It's like saying that even if someone invented a better language than English, you know, even if it was more accurate or it could convey thought better than English, it likely still wouldn't win because English is what people are already using. It's the language that people use throughout a lot of the world. So, when you look at FICO, you can look at it in a similar way. Even if there is an AI score that's better or one that's cheaper, it still has an uphill battle competing with FICO because FICO is the dominant scoring system. It's the language by which every single bank, every single lender, every single business talks to each other when they try to talk about the creditworthiness of a customer or an individual. So even if there is something that's technically superior, it's likely not going to compete with FICO. The brand and the language are part of the mode.
Now, when we look at what's happened with FICO with this massive draw down, we can take a look at the historical valuation to get some context here. Here is what it looks like. The valuation was pretty low in 2016. Many people didn't realize how good of a company FICO was. It raced up in valuation in 2020. In 2021, it got into a higher range. Then it came crashing down with the rest of the market in 2022. It raced up in 2022 like crazy all the way into 2024. That's where it got a little bit ahead of itself. And now we're back down to reality. It's more in a normalized category. It's not the cheapest it's ever been historically. It's not cheaper than the lows of 2022, but now investors can buy into FICO and they're not buying a company with an insanely high historical valuation. You're not buying it at all-time highs. The valuation has been chopped down significantly. The concerns about the moat invasion and the slower growth are already heavily priced into the stock. And if FICO resumes growth like it has before, if they prove that their moat will hold up against Vantage Score and with the AI alternatives, if they prove that they can continue to grow earnings at a fast pace, is a highly efficient business, this stock could rocket back up another 20 30% in less than a year. It's one of those companies that can move very quickly. So right now I believe it's an opportunity.
Now next up we have another stock that super investors own, one that's in a big sell-off, a huge draw down, which is Uber. Uber's up today, but overall the stock price is back to $74.40 per share. When we look at where this one has recently traded over the past year, it got up to $100 per share. That's where it peaked. And now it's back down to $75 per share. It's down roughly 25% from its all-time highs. So Uber is in a 25% draw down, which is notable for a company like this, and it may give us an opportunity.
When we look at who owns Uber, we can see another slew of big-time investors. These are super investors. One of them is Eggerton Capital. They manage over $9 billion. They have a diversified portfolio, so this isn't a massive way to position, but it was a new buy. They just bought into Uber in their last quarter. They have it as a 2.38% position. We also have another super investor Thomas Russo. His Uber position is 4.5% and he's added recently to the position while reducing others. So he again also sees more value in Uber relative to other companies in the market. Then of course we have the biggest one here Bill Aman 15 plus billion in the portfolio. He's done extensive write-ups on Uber and he has it currently as a 16% position. Now, even when Uber was trading at a relatively higher price than it is today, Bill Aman called the stock deeply undervalued. In his investor presentation just recently, he also went over the bullcase of Uber. Said that it's a misunderstood stock, that it's going to stand up against artificial intelligence. It'll stand up against robo taxis. It's not going to be displaced. In fact, it has a lot of growth ahead of it. It has a ton of operating leverage and it has a very good CEO. He gave out a very good bullcase for the company and he's matching that with a huge position in his portfolio.
When I look at Uber and the valuation of the company, it's trading at a 22 Ford PE ratio, which is nothing extreme. In fact, this seems like a conservative PE ratio for a company that has this much potential growth. We also have a free cash flow yield that's in the range of 5 to 6%. This also seems very cheap for a company that's growing this quickly. If we look at the cash flows of Uber over time, you can see that this is a compounding machine. It's one that reached its operating leverage and its scale. And when we look at the valuation historically, Uber is also a company that the valuation has gone down with the stock price going down. You can see these same metrics, all of them are much lower over the past 5 years. So this is another company that has the validation and stamp of approval by three super investors. One of them making it roughly 1/5if of his portfolio. It's 25% off of its highs and the future does look bright for Uber if you believe that it won't be disrupted by Whimo or Roboaxi. This is certainly going to be a good stock to buy.
Now, third on the list, we have another seemingly highquality compounding machine stock owned by many institutional investors and super investors that's also in a massive draw down. The company's Inuit. If we look at the recent trading of INT, it's down 30% just year to date. So, it's been clobbered just this year. into. It's also a company that I own. I have it in the financial category. It's one that continues to bounce between the green and the red. Currently, it's down 4.63%, but this is one that I continue to hold and even buy more of.
When we look at into it, there are a number of big-time investors that own this company. One of which again is Valley Forge Capital Management. Valley Forge is heavily invested in the financial category and many of these stocks are being sold off with the market. into it is a 3.3% position of their fund, but value forge capital is actually not the biggest holder of in it amongst super investors. Lindso Train that manages a $4 billion portfolio has into it as their third largest position. It's a 10.25% waiting. So massive investment into in it.
Now when we look at in it, there's a few different reasons why this stock is getting hit so hard. One of them simply is the SAS apocalypse. We know that companies like Adobe into it, Service Now, Workday, Monday.com, you know, you can go on and on. These stocks are all getting crushed. But in it has its own particular set of concerns amongst the SAS apocalypse. One of them is that there's a belief of AI disruption that it will be very easy for companies like Chat GPT or Claude to do your taxes for you. I don't really see that as a viable path forward. Most people don't want to tinker with AI and do a lot of prompts to do their taxes. Most people just want to click a few buttons in Turboax. Know that Turboax is going to do it correctly and they take on the liability that they have your local and all your regulations and you can just feed Turboax your documents. Click a couple buttons and then you're done with your taxes. In fact, most people would pay $100 out of their tax return to have that done conveniently and easily. And I believe the concerns that a chat GPT is going to do your taxes for you are a bit overstated. There are going to be people that are do-it-yourself people that are willing to tinker with these type of things that are willing to feed it all the documents, follow all the instructions through a chat GBT and then hope that it's done correctly. But in most cases, the vast majority of people will just want AI to do it within a tax system like Turboax and know it's done correctly. So I see in it Turboax their main product as being somewhat resilient from AI disruption. Even though in it posted great earnings, they're growing quickly, all their fundamentals look great, the market still treating them as guilty of being disrupted and only time will be able to prove that wrong. In it will have to post quarter after quarter of strong earnings growth, reaceleration. They'll have to prove the story that AI is more of a benefit than a detriment for the market to get back on board.
Another problem with INT stock is simply multiple compression. Like many of these companies, in it was flying high. It was a stock that was super highly valued. One that in 2021, the PE ratios and valuation metrics got into incredible territories. It came down a little bit after 2021, but into it has always traded at one of these higher valuations. It was always priced as this dominant monopolistic company that had huge market share. And even though that was true, that being priced into the stock made it vulnerable. So now that the narrative has changed and investors aren't giving it that type of pricing, the stock price and multiples have collapsed. In it is no longer priced as an indestructible compounding machine with a very monopolistic market. It's priced as a company that needs to prove itself. It is trading at an 18 forward PE ratio, 16 forward PE based on 2027's estimated earnings. It's priced with a 5.5% free cash flow yield. Even when you factor in their stockbased comp, it's trading at a 4%. These are pretty hefty free cash flow yields. And this is a very low price toearnings ratio for a compounding machine. In a couple years, we could be looking back and see this as a big opportunity to have bought into it for $400 per share. It could be trading at $700, $800 per share in just a couple years if the magic comes back to this stock. If they continue to grow Turboax, if they implement artificial intelligence in it, if their SAS applications continue to grow and have high retention, we could see this be a stock that jumps up significantly in a short amount of time.
Now, company number four that of course is a compounder. It's obvious to anyone, but it may not be obvious the type of sell-off this company's actually in is Microsoft. It's rare that Microsoft gets sold off at the market out of a bunch of fears. It is rare, but it does happen and it's happening now. Microsoft is down 14% year-to- date. When we look at it over the past year, Microsoft got as high as $540. So from $540 to $400. When we look at Microsoft, investors are clearly concerned about something. They've bid the company down over a full $100.
When we look at who owns this company, there are many notable super investors that own Microsoft. It's one of the most owned companies across super investors portfolios because Microsoft historically is looked at as being bulletproof. For example, we have Chris Hone, one of the investors that manages the most money. He manages 53 54 billion depending on the day. And when we look at his portfolio, it's only in a handful of companies like nine US companies. We have here Microsoft being the third one 15% or roughly 17 billion dollars invested in this single company. Now Chris Hone has such an incredibly high standard for a moat that he literally won't have any holding in his portfolio that he thinks there's even a question about the moat. He even sold out at Google just because the moat was becoming questionable to some degree. A slight question about the moat. Chris Hone is out. Yet, he's been adding to Microsoft. Amongst this sell-off, he continues to believe that Microsoft has an unquestionably large moat. We also have other investors that have even a bigger percentage of their portfolio in Microsoft. Triple Front Partners has nearly a billion dollars invested. They have Microsoft as their top position, about 18%. And there are many more super investors that own this stock. And it'll be interesting to see next quarter how many super investors were buying these companies because this reflects their trades as of Q4 when Microsoft was much higher.
Now when we look at Microsoft there's a couple reasons of why this company is selling off right now. One of them is just a valuation reset. Like many of these companies last year the valuations were high. Stocks were moving upwards. Microsoft at 550 was a bit on the high end. So some of it could just be valuations coming down a little bit. With Microsoft, there is more to be concerned about. There's more that investors are worried about. One of them is the massive capex spend. We've highlighted this before. Meta, Microsoft, Amazon, and Google, the four capex spenders have all had questions regarding their spend. How much are they spending? What is the return going to be on this? Why are they spending it? When is it going to end? On and on and on. When investors know that you're going to spend hundreds of billions of dollars on capex and you don't quite know the returns, that makes investors a little bit nervous. Microsoft is moving from a very high margin software company to now a mixture, a company that's running massive amounts of power requirement, spending massive amounts of money. It is moving from a capital efficient business to a far less capital efficient business. We also have the relationship closely tied with OpenAI and the fates of OpenAI. It seems like ChateBBT used to be a good thing when you're partnered with it. The stock would go up like 10% anytime someone partnered with them. Now it's kind of the opposite. Investors want diversification. They're saying that they don't want all the eggs in one basket that's catchy BT. They want to have a diversified consumer base using the cloud hosting. So investors are looking at this and they're a little bit concerned about the relationship with OpenAI. They have concerns about the valuation and the reset. They have concerns that AI is going to compete with the software aspects of Microsoft as well. And when you stew all these concerns together, you get a stock falling 20 to 25%.
So here we have Microsoft today. Lots of concerns being priced into the company. The company's also now trading at a 23 Ford PE ratio. That's super low for Microsoft. The trailing PE ratio is a 25. The free cash flow yield is at a 2.6, which is on the higher end for Microsoft. Usually this company demands a 2% or below free cash flow yield. To illustrate this over time, you can look at the valuation multiples. The price to free cash flow is way down from its recent highs. The price to earnings is even further down from its recent highs. And the price to operating cash flow is also way down. Every single metric is down. And it's more in line with the median of the past 5 years. So if you're buying Microsoft today, you're not paying a premium. You're buying the company much closer to fair value on a historical basis. And I would argue that you're also buying a fantastic Microsoft. It hasn't really been slowing down. The revenue is growing at 17%. We have the RPO backlog. A lot of this again is Open AI, but it's even good without open AAI. Their backlog continues to grow. Their segment growth, every single segment of the business continues to grow. When I look at Microsoft, I see it as a very healthy company. It has some real concerns, but I believe that those are already reflected in the price. Right now, Microsoft is an opportunity to buy at this company much closer to fair value or at undervalued ranges. It's one to be adding to.
Now, number five, we have another compounding machine, a company that's in many super investors portfolios that's in a draw down. This one's Brookfield Corporation, ticker symbol BN. It's ran by Bruce Flatt, which is like the Canadian Warren Buffett. Some people say he's really good at alternative asset management, huge investments. These are big capital industrial investments. And the company's one of these ones. It doesn't really produce earnings in the same way a typical company would. So when you look at this company and the growth of it, you want to look at the distributable earnings. This is a KPI that we track. So it's a company that generates profits. It can issue them back out to investors or it can reinvest back into different projects and build up those distributable earnings in the future.
When we look at who owns this company, we have it in the Chuck Ori portfolio and Brookfield is the second largest position, 13.51% of their portfolio, right behind Mastercard. So, this is a massive position in Chuck Orey's portfolio. We also have Bill Aman making this one the largest position now. It's at 18%. And then finally, we have another super investor here, a much smaller portfolio, but he also has a huge percentage into Brookfield Corporation. We have Josh Kerasoff with 19% of his portfolio in Brookfield. And this stock is a bit unique. It's not selling off because of a SAS apocalypse or anything like that. It's not selling off because of claude. This company is selling off more because of macro concerns. All the chaos in the world. What does that mean for the economy? What does it mean for interest rates? There's a concern that interest rates might be a little bit higher for longer. If oil prices go up, it could spur inflation. So investors in Brookfield are looking at this and saying, "Hey, this company does really well when interest rates go down. If this is going to make oil prices higher and interest rates up for longer, then maybe I'll move to a different company." So, it's these macro concerns that are being priced into the stock.
But all of those concerns are cyclical and they're not even certain. There's a good chance that interest rates could continue to go down. Oil prices go up quickly, but they also go down quickly. It's highly volatile. If the war ends relatively soon, if oil prices start to crash back down, if it looks like inflation is not going to skyrocket and the future looks a bit more clear, which could happen, it's happened before, then Brookfield Corporation could be at an incredibly good deal today. It could be a stock that's a very wide moat stock that has nothing wrong with the business. The business is fantastic. This one is down off of its highs around 15% and in most outcomes, this will be a great company to hold.
Now, finally, in number six, we have another company that is a genuine compounding machine. One of the most, well, at least considered the most high-quality company on planet Earth, but it's also a company that sold down out of real fears. The narrative has changed for this one, which is S&P Global. S&P Global is down to $420. It's down another 3.5% on the day. If we look at it just this year, it's down 16%. And if we look over the past year, it's down around 25% from its recent highs.
When we look at the list of concerns that investors have for S&P Global, you can basically summarize it into just a few things. One of them is the AI concerns. We have the SAS apocalypse and you've seen what Claude can do, right? It can write code. It can do legal work. And a lot of investors are saying it can even do a lot of research on stocks. What if it replaces all the analysts at S&P Global? We have a concern that AI is going to commoditize data. And it's one of those things where it's guilty until proven innocent.
Now, when we look at who owns this stock, there are a list of some of the best investors in the world. They have a large portion of their portfolio in S&P Global. One of them is Canton Capital Management. They have over $18 billion invested. They have S&P Global right here as their third largest position, 5%. Huge stamp of approval given to this company. And again, they've held the stock before it traded down, so it's at a better valuation than it was when this is reported. We also have Chris Hone. This is an 11% weighted position. And again, Chris Hone doesn't own stocks that have weak moes. He just won't. If he thinks there's any concern for the moat at all, he'll sell the stock. So, we'll see if he's selling the company right now. Maybe he is, but I have my doubts. When we look at S&P Global, many of the concerns about AI are dramatically overstated. And of course, we have Valley Forge Capital Management. Right at the crosshairs of many of these sell-offs, we have S&P Global as his second largest position, a massive 21% weighted position. Last quarter, he didn't sell a single share. I'm doubtful that he will this next quarter.
Another thing that's going on with S&P Global is while this company's stock price is getting clobbered year- to- date. It's down 16%, it's had a dramatic sell-off, they are a very cash flow positive company. They are using their cash to aggressively buy back their shares. If we look at just the past five years, they issued a lot of shares for an acquisition. Ever since then, they've been reducing their share count every single quarter. Now, management has specifically said because of this sell-off, they are buying back shares more aggressively, far more aggressively than planned. They're basically doubling the buybacks that they previously planned on doing. So, right now, there's no bigger buyer of S&P Global stock than S&P Global. They're in the market every single day doing buybacks, which should make the stock go up.
So, when I look at this company, I also look at the historical valuation. It's at basically a 5-year low and its historical valuation. When we look at the Ford PE ratio, it's very reasonable. It's a high quality company trading at a 22 Ford PE. The free cash flow yield is now above 4%. The company's being priced with a lot of pessimism. A lot of the AIARS are priced into this one and I continue to hold this one in my portfolio and buy more of it. So, this is another compounding machine owned and validated by many of the greatest investors in the world. And it's the patient investors that get the reward. The ones that are willing to buy today and then to hold on as the narrative switches for these companies. And I think all of these companies are buys today.
Now, let's go ahead and move on to some news. Now, the first piece of news we have to get to is Tom Lee in this interview that went rather viral because he's making a couple predictions here that don't seem like the normal Tom Lee predictions. Let's go ahead and listen to this. You sort of are. Now, you're you're not negative on stocks, but you you do have a base case that at some point this year we're going to go down 20%. That we're going to have a bare market. Was this the first whiff of that? um you know our our take is we do expect that decline to happen when markets don't respond to good news. So I think we're in a period where we had a bare market already in software the mag 7 and in crypto. I think that's already taken out a lot of speculation. So to me, I think our bet would be markets are actually going to lift through the end of the month that we're going to actually be positive for March and maybe hit 7,300. Later in the year is when we think a bare market might show itself. >> What What about oil? >> So he says he believes the S&P 500 is going to go up to 7300. Right now it's at 6760. So he thinks we're going to have a rally, but then we're going to enter into a bare market later on this year. Now that seems a little odd. So, let's go ahead and listen to his explanation of why he thinks this is the case.
>> But if I look back at the last two days, oil's $15 higher than it was last week, but the S&P is higher. So, to me, the market actually is handling higher oil prices better. And, you know, we wrote in our note this morning that we think higher oil prices are actually good for the US stock market. Remember, there's the stock market and it's not always the economy. So, I think the US economy is going to have some risks uh for the reasons you described, which is why I think growth stocks start to look better, which is a lot of tech. And again, the US is a growth index. I'd probably lean towards growth stocks outperform, which is not necessarily a broadening trade.
This is another point and another phrase that you'll hear frequently. Again, the stock market's not the economy. And although that's true, the stock market is not some perfect representation of the economy. But when you really dig down to it, the stock market is reliant on economic growth. It is reliant on consumers. Consumers are the economy. When consumers don't spend money on your favorite business, when they're not hiring at their companies, when they're not signing up for licenses of Adobe or Microsoft, when they're not signing up for Google products and and licenses, when people aren't able to afford anything, uh these companies that we're investing in don't make as much money. So, one of the beliefs that I again I've always had is that overall what's good for the economy is good for the stock market. That is the relationship over the grand scheme. I don't agree that we should view oil going up as a fine thing and that growth stocks will be just fine in that case. And I also don't believe we should act as though the stock market is totally detached from the economy.
Now, moving on, we get to the fail of the week, which in this case is this interview by the politician Andrew Yank. He went on to CNBC, and you'll see throughout this interview that he makes many points about how the US economy is in for a huge disruption, how people should be concerned about what jobs they're going to get, how everything looks bad because of AI. So, let's go ahead and just listen to this interview.
>> Um, I just came from an AI conference out west and holy cow, they said to me that what we're going to see in the next 6 months outstrips what we've seen in the last 10 years cuz the rate of change is on a hockey stick and heading up. And I got to say I'm pretty up to date on this stuff and it blew my mind on some of the stuff I was seeing >> in terms of what.
>> So, right from the start we can see where he's getting his information. He just came from an AI conference where in the conference they said that things are going to be so different in the future. everything's going to change and we're in a hockey stick moment. You know, these are the these are the big grandiose changes that all the AI leaders are promising and that's something that you you see a lot of. We had Ben Affleck talk about this and he says that in many cases he believes a lot of these AI leaders are saying that everything's going to change to justify their high valuations of their stocks to make it so that they get more investment. But we'll continue on here. Well, there was one company that is selling autonomous uh coding for enterprises to big businesses and their revenue is up 100fold in the last 12 months. So, if that continues, it's going to eat a lot of the tech budgets from major corporates that used to go to humans. And so, you're seeing the uh employment of recent computer science graduates fall off a cliff from a lot of programs. If you rewind what, four years ago, what would we tell young people? For a secure career, learn to code. Uh, and now the opposite of that is true.
>> And this isn't just Andrew Yang saying this. There's many people that have reiterated the same point, trying to scare the general public that nobody can find a job. And this is one of the common tactics of manipulation. It's highlighting certain data while completely ignoring other pieces of important data. For example, if we look at just the data that new college graduates can't find jobs, although there is some truth to that, there's also a lot of important context missing. For example, one of the reasons why that's the case, why it's so difficult for new graduates to find jobs, is because companies are keeping employees longer. They're not firing employees as often. They're not turning over employees quite as frequently. So, while it's true that it's harder to find a job, it's also true that once you found one, you're likely going to keep it a lot longer. You have the economy having less turnover, less firing of long tenured employees, which is a good thing. So, basically, what people like Andrew Yang are doing are highlighting one negative thing going on that it's harder to find a job without highlighting the other relevant fact that people that are in jobs today are keeping them longer.
Now, another thing that's being left out here is it is true that in the past year, it's harder for college graduates to find jobs. But that's also not something that you can purely blame on artificial intelligence. For example, many of the industries that college graduates are trying to go into, whether it's engineering, finance, and consulting are the very type of jobs that had massive hiring just a couple years ago. So, two to three years ago, those industries were hiring everyone, paying them massive salaries. Every college graduate was guaranteed a great job a few years ago and those businesses overhired. They pulled forward demand. So now they're going through a period where there's some cyclicality. It doesn't mean that the job market's broken indefinitely or the AI is crushing all these jobs. What this means is that there's a lot of hiring a couple years ago. A lot of these companies are wanting to keep their employees for longer. So there's some cyclicality in the pull forward for jobs. And this is what a normal economy looks like. There's time periods where it's easier to find jobs, and there's time periods where it's more difficult to find jobs. By Andrew Yang suggesting that this is because of AI, that everything's changed and that no college graduate will find a job ever again, that is taking a select piece of data without proper context and trying to put it into this overall narrative. That's not really proven by the facts today.
Now, he makes a lot of other points. So, we'll continue on with this. Look, uh, Dario Amade, the CEO of Anthropic, laid it out very clearly, and he's been doing so repeatedly, saying, "We're going to automate away up to 50% of entrylevel white collar jobs in the next several years." And I believe him. The easiest people to fire are the people you haven't hired yet, which again is why you see the hiring of recent college graduates uh, heading down. and the underemployment rate over 50%, the unemployment rate among college graduates is now the same or higher than non-ol graduates for the first time in history.
>> This is again Andrew Yang doing something that is a common tactic for any politician, which is using a hyperspecific anecdote and applying that broadly as impending doom for the rest of the entire economy. You referenced one company that 100xed its revenue. We don't even know the starting point. Maybe it went from $10 to a$10,000, right? We don't know what company this was, but that's his evidence to brace for impact that these AI companies are taking over. He won't even give us the name of the company to look at as the example. And then a core part of his argument is that new college graduates this year are having a hard time finding a job, which goes in perfect consistency with the overall economic cycles. Couple years ago, they found jobs just fine. Many companies overhired. He doesn't attribute that to a low hire, lowf fire situation, which is common in the economy. He gives it as another example of impending doom. And of course, he'll keep referencing AI companies. He went to an AI conference. That's why he's so shocked about this. He heard a story of one AI company 100xing its revenue. And now he's referencing the CEO of Anthropic, an AI company, where the CEO again makes grandiose promises. These are the core of his arguments and they ignore almost every bit of other economic data. For example, while it is difficult for new graduates to find jobs in very specific sectors, there's also many sectors that can't hire enough people. In healthcare, many of the financial services, skilled trades, their companies can't hire enough. They can't find enough talent. There are still huge swaps of the economy that are hiring aggressively, but none of that is mentioned here because it doesn't fit with the narrative being painted.
Now, he continues on again going through the most fear-mongering scenarios possible. Let's go ahead and look at the next one here.
>> The big one, and Jamie Diamond referenced this just the other day. If you get to truck driving, then all bets are off because this is the number one job in 28 states. You're talking about millions uh of middle-aged men for the most part, 10 to 15% of whom are military veterans. A lot of them are gun owners. So, if you get to that occupation, uh, then you're going to see, in my opinion, riots in the streets,
>> we're going to see riots on the streets. If we get to truck driving, riots on the streets. See the imagery being painted here. And this is more of the panic and fear that people try to instill to say that you should be concerned if you're a young person. The future looks really dark and it's desolate. And it's completely wrong. These people are completely wrong. And they have been completely wrong ever since the beginning of the country. They've been wrong over and over again. You can look at any type of technological evolution. Whether it's the internet, whether it's the assembly lines, whether it's advanced farming, every single one of them led to better jobs, more job growth. It was very visible how many jobs would be destroyed. But what was invisible is how many jobs it would create afterwards. For example, when you look at just coding as an example, it has gotten much easier to code things. Most developers now can simply just type in text and it will code for you. And although you think that that may destroy jobs that will need fewer coders, we're seeing a bit of the opposite. Since companies are getting a higher return on their developers, they have more cash flows and profits to hire more developers. When you get a higher return on something that has incredible levels of demand, like coding talent, you want more of it. I can see the very same thing with Qualram. We went from one developer to two. We doubled our development capacity specifically because I'm getting a higher return on them. They can work faster. They don't need to do all the leg work of writing every single line of code by themselves. Since they're doing more, I can invest more in them and get a higher return. I can get more for my dollar. In many cases, these type of technological disruptions create more cash flows, higher profits for companies that are then reinvested in new opportunities. Andrew Yang will tell you none of that. He won't paint a picture of new companies developing new products and entirely new industries that create new demand and higher profits and better jobs for people. Even though this is exactly what's happened all throughout the beginning of this country, it's likely what's going to happen in the future. He paints a desolate outcome where all there is is job destruction with no higher profits, no margins, no reinvestment, no new capital, no new risk being invested into the market, no new company started. That doesn't really sound practical. That doesn't sound realistic because it's not. This is fear-mongering. We're seeing it over and over again. And the concerning thing is that some people buy into it. You become very concerned about the future that you don't have a bright future that you shouldn't invest in your skill set. And this couldn't be further from the truth. Even the example of trucking, like if we just look at that one example, the only thing that AI can accurately do right now in robotics is drive a truck on a very long straight road with no adverse weather and no hazards. That's not what truck drivers deal with. They have to pull big trucks. It's dangerous for long periods of time. They have to deal with adverse weather. They have to deal with road hazards. They have to secure loads and hitches. They have to unload things. They have to inspect the truck. They have to make sure everything's running smoothly. In this case, AI is going to be complimentary to their job. Make it safer as they're driving on those long straight corridors, but it's not going to replace them. It's not even close to doing that. And there's a demand for truck drivers right now that continues to increase. We need more of them, not less. So, even in the example of a job that he's saying is going to go away, these jobs are saying just the opposite. Please apply today. We'll pay you good money. My suggestion is to not listen to people like Andrew Yang. Not only because they're wrong, but also because you'll get far less far listening to people like him than people that are optimistic. Ones that would say to continue working, continue your skill set. That you will eventually find a job if you haven't already. That unemployment's 4.4% which is considered fully employed right now. The economy is great within the United States. And that the future is not going to be some bleak desolate future where AI takes over every job. That's not even happening today. The predictions that it's going to happen in the future are in most cases in markets where these companies are trying to hire more aggressively. AI makes things more efficient and profitable. Profits are reinvested into future growth. The people that remain optimistic, the people that ignore the doom and gloom will get much further. And that is why today Andrew Yang is the fail of the week. That's all for now. See you in the next one.