[#62] Stocks Are Tanking - What Are We Doing Now

there we are hello everyone welcome to stock unlock podcast episode 62 I've been doing this for well over a year you might recognize Daniel prank he has over a quarter million subscribers up in Canada uh covering investing content I am his a loyal co-founder without a big following more of The Tech Guy as we like to call it markets are going absolutely a wire today it feels like things have only been going up we're going to lightly touch on hyms but you will be able to find a more in-depth video on Daniel YouTube channel for that later uh I'm going to make a very small uh bull case for Lift just for the sake of discussion which I think could be interesting so we'll get into that a little bit later and of course we got our eyes on the chat Andrew great to see you uh so we will also be looking for your comments as well it's great to be live with you Daniel how's the weather up there you've been going through a cold spell up in Canada I think oh no it's uh getting better man it's plus seven degrees Celsius here now and can wear a t-shirt outside again yeah it went from like minus 40 to plus 7 in within 48 hours it's almost as volatile as the stock market that's right so I was actually looking on X before we started the

stream and stocks were pretty negative today but then I noticed that they kind of like took another dip they were kind of leveling out then they took another pretty big dip and I just saw news that apparently stocks are continuing to fall after China reports a new Corona virus with pandemic potential so not ready for this yeah so it s it seems like the market is maybe uh well it was initially reacting to some inflation news then it reacted further to this news that China put out that hey might be another covid coming out so that's great that's like brand new information though I have not looked into that I saw this like five minutes before we came on but the other news on why the market is down is because uh apparently inflation came in hotter in the United States and this is pre Trump trying to impose tariffs which he delayed until March on Canada so you know if inflation is already running hotter in the US than they want then it's like should he really be placing tariffs on all essential Commodities who knows so the Market's just very uncertain right now people are a little upset about the higher inflation and uncertainty with Trump is kind of his thing do you know what the print was like that it was that like a CPI number uh I did not have time to look into it further than the headlines unfortunately it's all good well you've looked into it more than me because I wasn't even aware of that uh I'm gonna respectfully ignore the uh covid thing just yeah that's uh that's kind of crazy I hope I really hope that's not true yeah uh well moving on from that one I know that you have been talking

about him a lot I also know before the show you said you do have a video coming out on your channel later so we're going to keep it pretty surface level here yep but one thing that I found funny I'll share my screen again to show this I get really frustrated I think when people online start like complaining about huge quote dips and I think it's mostly to get payouts on social media for like bombastic posts but like let's just look at the last month for hims um I understand it's down 23% today I'm not trying to downplay that objectively that's a lot to be down on the day yep can we also like acknowledge that even with the stock being down 23% right now it is up 76% and still almost a double on a on Monon price change this is the amount some stocks move in multiple years that is still considered to be a market beating return turn so yeah it just pisses me off when people start like crying about this like yeah it's what I'm going to discuss in my video later as well is I'm going to draw a chart in Photoshop really quickly where you know what I'll do it right now can I share my screen yes I'm just laughing because we were talking about not going in too deep and I heard you like on the ledge it's like ah we're just going to do the chart live I love it yeah because you're with us in the live chat let us know if you want Daniel do this chart yeah because oh you guys are going to see some photoshop stuff maybe that's okay I got nothing to hide all right let's create a new document so this is exactly what you're talking about right now Jake so let's say that this is the stock chart of hims oh I know what you're doing right now did didn't Joseph Carlson like troll omit on this morning uh no that was uh like yesterday okay I got everything proper so there's the stock chart uh let's say that as you saw HS went like this and then it like now it's like down like this and this right here is causing people to freak the freak out all right but the thing is if hims just went like this sorry let's just continue from here let's say that him just went like this with no bump and now it's still at the exact same spot but it didn't do this people would be so freaking happy today so it's exactly what you're saying it's like just because it's down or it went up and now it's down a little bit people are upset but if this big bump didn't happen and it was still right here up 76% and it was just smooth up no one would care and I find that so funny about the market it's like when you zoom out and put it in perspective like I'm still up almost 100% on my him's position like in a month that's ridiculous so I think people got to relax a little bit also like this is just a volatile stock just go look at it at its history it routinely has 20% drops like this is normal okay you can't get into him stck and be like freaking out about this because this is just how it is I freaked out on the other side now I think that's like a good um preface to your video that's going to come out later uh I think all you guys already know who Daniel pron is but you see that video come out there yeah I felt this on the reverse side because I bought a few Shar it was a pretty small position I was actually planning on building it up a bit around $24 and let's see I can bring up my portfolio here I know I'm not sharing my screen but yeah I came out with a quick like $250 gain uh which is honestly nothing but it was an 80% gain in five weeks when I bought this stock like I understand the business I like it I think there's risks involved we don't need to get into that I think people are really underplaying not understanding the regulatory risk in the US but anyways the risk reward compared to their fundamentals as you already explained in your videos like I went and did my own research like yeah this looks great bought it couldn't keep building my position because it ran so fast and then it went up to 80% I'm like look this might run another 100% like I might miss out on that but this is already more than I was bargaining for and I'm not super highly convicted on this stock to hold on to it very different from your mindset so I took a quick gain on that obviously the stock kept running but no one's ever going to convince me that I made a bad trade by making 80% in 5 weeks now I will agree that if I had held and magically knew where the top would be sure uh but if I could read the future and I had a crystal ball I think I'd be I'd be on Mars right now or something so I agree with you the psychology games are funny and speaking of it I don't know if you want to seg segue to another topic here on lift or if you had any more to say on hymn not really nope cool

well you're talking about Uber everyone's talking about Uber uh I think every familiar with the bull case of uber and in our stock unlock Discord there's a very heavy bull crowd of uber investors typically people who came in around the60 to 70 range Yep this conversation is actually more meant to be about lift but just taking a step back like Lyft and Uber are both the two players in the ride sharing Network today Uber is obviously winning they have more market share uh they have more cash flows now and they are just winning that being said the ride sharing Market is growing if you are someone who believes that the autonomous vehicles is only going to augment that for these companies huge debate point but stay with me here if you believe that you are in a very big growing market and in the sense that a rising Tide Rises All Ships I started looking at lift stock what I'm going to share I guess is a narrative of a bull case but just to let everyone know I have not bought this stock yet I don't have a plan to but this is just meant to promote conversation so I'm definitely going to take more of a bull stance on this but that is kind of my disclaimer so as people come in later on the stream they'll think I'm some crazy lift bu but that's their loss also wow we really have viewers from around the world here looks like we have a lot of people from Europe probably because we're doing this during work hours uh us time that's yeah I also saw that grab like randomly over the weekend last weekend uh grab just started popping up all over Twitter and x and everyone well not everyone but the majority of people randomly seemed extremely bullish on crab and it came out of nowhere so yeah I think people are just looking at this uh industry right now after Bill lman took a position in Uber and whatnot so I just context for me and other viewers is grab involved in ride sharing is that what their business is they're the number one in Asia I believe okay like when I was on my Asia trip it was in Uber we were taking grabs everywhere that makes sense let's put a pin in that because I also want to throw Oscar into that mix where I think that there's a new roaring Kitty and I actually met him in New York City the other day that I believe is responsible for all this grab Mayhem um in a good way it's omit investing if people know who I'm talking about actually friends with a guy he's a good person anyways uh bringing us back on uh track here or on Wheels uh since we're talking about cars and not trains um I'm GNA talk about lifter a little bit we've had some new people join uh this is just going to be a this is bull case for Lift just understand that I am taking that role for this discussion and I personally do not have any vested interest in the stock as of today so Lyft uh they've been losing to Uber but they're the other main player as you could see their stock performance has been nothing short uh from atrocious it has completely eviscerated shareholder value and we're going to get into why that is here uh as you will see the stock currently is trading at a $ 1. 6 billion market cap it did take another fall after earnings uh let's just make this a little bit smaller here so you can even see in the small band the stock is pretty volatile uh it currently has roughly a 13 14% free cash flow yield which is pretty quote cheap for uh stocks that would be considered growth and of course you want to ask yourself well is this a growth stock I'm G to make the case that it is so let's actually dive into their insights here just to get like a top level uh view of what's going on another thing to keep in mind is lift had a new CEO come in a few years ago and that's going to play into my bull case here I did listen to the last earnings call um this is more than just doing like 10 minutes of research I did actually spend a couple hours like really taking a dive here um the company has a lot of stock based compensation is going down we'll get into that but that's part of the reason why the management score is so low and historically this stock has destroyed shareholder value I'm not trying to sugarcoat that anyone who's invested in the past few years has gotten absolutely their butts handed to them uh unless if you got really lucky timing a low on this one the stock as it stands today is not super profitable they actually just flipped to Gap uh Financial profitability within the last couple quarters uh as you can see they are growing I think that this is enough to call this a growth stock which I'm going to put air quotes around because you want to measure pre and uh postco uh Financial Health iffy analysts love it I don't care what analysts think and uh I'm not huge we're going to redo the evaluation score soon but I digress so kind of like mixed signals here the overall stance that I'm going to take on this is that Lyft is turning it around with a new CEO they made tons of fups in the past but there's a lot of strong reason to believe why I think this has more of a PO potential to be a multibagger than Uber based on its current valuation within the next like three to five year time span as you can see the stock has been operating quite unprofitably so we're going to go and figure out you know where all those uh where all that money was coming from to build this business but as you could see their revenue has been growing fairly nicely and if we want to put this into the postco time frame uh the kager on the revenue growth is over 30% which is very strong the one thing that is really scary to see is in terms of where shareholder returns go to die up until the last quarter uh they have been diluting to raise money uh they have also taken out debt which they have started to pay back down so when I looked at the stock about a year ago I noticed that they had over a billion that they had taken out debt I actually looked at this stock earlier in the year I was like they're unprofitable they're taking out a ton of debt and they're diluting shareholders and they're losing to Uber this is a dumpster fire um is what I thought nine months ago objectively I think I was right uh so anyways they have taken out debt they are starting to pay that back down if we look at their cash position they actually are producing positive operating cash flow and positive free cash flow even after stock based compensation adjustments which is very nice to see uh and you can see their cash position has stabilized they have been able to start paying down uh some of their debt and I actually have reason to believe that they are actually going to start to uh correct this very bad runaway share inflation here which no investor really wants heading into their cash flow statement this is something that I think is really cool to look at and Daniel you and I really took a dump on Uber when two or three years ago uh they looked like this and I actually brought Uber up now please notice that I have not scroll this all the way out like just look at Uber right here I don't think that this is a coincidence um whenever you build a network business like Uber or l they have a very unique way that they need to build out their platform where you need to flood money and new drivers into a new region and you need to hit a critical mass of drivers in order to drive the weight times down to an acceptable point and also have elastic supply and demand economics on uh Riders and drivers in order to make that Network work um you can't do it if you don't have above that critical mass and lift just like Uber has had to spend massively and they're also playing catchup with Uber now I believe Lyft is about to have their Uber moment where Lyft has actually flipped to profitability recently they just announced a $500 million share buyback which I actually have mixed feelings about but it is nice to see that they are starting to keep shareholder uh returns and share count in mind they are able to afford this based on their cash position while still being able to invest in the business one because they have the cash position to do that but two because they're actually making positive operating cash flow and that is also taking into account stock based compensation uh stock based compensation was way out of control it's going down and if you listen to the earnings call they are managing that way better and finally here what I want to show you is for all of their uh key performance indicators for active number of riders numbers of rides gross bookings those are all going up uh the last things I'll share here Daniel is on the earnings call I found it very interesting that the lift CEO so that they did not see any market share loss in the markets where whmo was coming in even though Uber did see market share loss I'm not sure what to think of that they talked a lot about how they were positively incentivizing drivers and giving them a fair Revenue share which is better than Uber which is now having them see all their internal metrics for numbers of drivers on the network how engaged all their drivers are and the driver satisfaction going up uh I'm not trying to say at all that this means anything bad for Uber my bull case here is this Stock's turning it around now might be the time to get in not Financial advice just playing the bull case here and there's room for two players in these markets lastly my bold prediction is I think that this is a huge takeover Target for a lot of big businesses that are going to want to have access to this Market or another autonomous vehicle driver for example Tesla could come in and buy a lift I think Amazon uh could potentially come in here I've always thought that Airbnb and Uber would be a good merger um I could potentially see that with lift but would be a little bit less happy about that until they prove more scale so I'll finally shut up because that was a long thesis but I think that there's something here there was one red flag that I could still bring up but probably a good time to open up for comments from either you Daniel or the chat yeah I have not looked at this stock so I don't uh have a lot to say do you want to buy it now after my pitch just sell all your Brookfield and throw it all into lift oh yeah let's do it on stream uh no definitely not uh I think for me this stock based compensation is uh I get it's coming down yeah it's probably okay yeah so they have a lot of rolling vest schedules that they need to honor from past grants but they have lowered the grants a lot and you are starting to see that I agree it's pretty high yeah I'm I'm also noticing that its margins are actually like pretty similar to Uber right now gross margins pretty much the same free cash flow margins almost the same the revenue is actually growing faster so I mean at a seven pric to free cash flow which is a basically 14% free cash flow yield I mean yeah you're right the stock is not pricing in any future growth in my opinion like if they held cash flow steady that's still a very good return so yeah I don't know the market could be wrong on this one definitely looks like it's not pricing in any future growth so yeah the could be interesting when you start peeling under the covers here that's where I start to get a little like iffy so for example I I'll share my screen here they increased their marketing spend this last year I didn't run the numbers but it looks like about 80% I'll scroll down to get it here yeah so let's look at this line right here sales and marketing uh Daniel I saw you do this on hyms and I've done this before but it's now becoming more of a regular part of my uh analysis for like consumer facing companies basically being like how much are they spending on sales and marketing and then is that increased in spend materializing in Revenue growth I guess a little handwavy because sometimes when you do brand recognition marketing spend it's actually not for immediate Revenue growth so this isn't like a hard tell but I wasn't a huge fan that it raised from uh 481 million to 788 million but it did not result in nearly that percentage increase on the top line for that spend um so I'm a little skeptical on how much they can use their Capital to grow efficiently so I'd love to see that marketing spend get more efficient obviously want to see them start to build more market share but even if they remain a number two player like you said Daniel the cost versus risk right here is it seems like there's a high margin of safety like the business they're not going out of business they have tons of loyal customers their customers are growing they're flipping cash flow positive they're starting to manage their negative things right like the stock based compensation was an issue the debt I think was an issue and when you find these things in the market like the time to buy Uber was not now it was two or three years ago and I'm just asking myself like is Lyft about to have its Uber moment yeah it's definitely not in the news like everyone's excited about Uber right now I don't think anyone's looking at lift um yeah on that marketing spend thing I also wouldn't just look at the Topline growth what I did for him is I looked at the uh marketing spend versus gross profit growth not just Topline um so that' be one thing I would do and uh yeah I don't know looks interesting to me I'm not uh super well I don't even I'm not even really interested in Uber I just don't think I want to be in this industry I don't feel I don't know when I invest I have to have the gut feeling you know that conviction and I just don't have it in this industry so it's not for me but I see why it's interesting so you weren't ever going to own Uber either or was there like a price for Uber you just wasn't feeling it I mean there's a price for everything if Uber was trading for $100 you know I'd buy the whole company but fair enough that that's where I'm at with lft like for example if lft went to like a 20% free cash flow margin sorry not a price a free cash flow yield it would be hard for me not to scoop some up but yeah no I understand like I recently bought a small cap oil company because it has a 20% free cash flow yield that's growing and I was like this is just stupid so I bought it so you know I get it love it uh any fun inside information to share about the stock unlock mobile

app uh so oh it's going to be beautiful yeah just to quickly tee this up we're really doubling down as a business this year we've got a team of seven people uh really making a super big stab at hunting more viral growth I'd say our main like issues today is just not enough people know that we exist uh so we're supporting the company uh barely and spending a little bit into growth and part of that is a mobile app uh Daniel is kind of like the brainchild with our user experience designer named D who has been designing this so what can we forward to there I mean what's the experience going to be like is it going to feel exactly like I'm holding stock unlock when I open up a web browser today um is it gonna be sock unlock like will I socks what what's happening there yeah the app when we launch it it's going to be a little bit of a lighter version than stock unlock the desktop app today like the free form tool DCF calculator probably not going to be included immediately um the goal is really to just get it out as quickly as possible but also still have it be extremely useful so we're focusing on portfolio tracking showing off the stock unlock Insight scores and having a watch list and then also just stock details pages so like you can actually look at a stock it's dividends key metrics financials whatever all that stuff and that's pretty much going to be the V1 and then we're going to do what we do and build well over time but yeah we're starting from the ground up it's actually been a lot of fun because we're not sorry I just read a comment uh we're not taking what we've built from stock unlock and just copy and pting it into the app we're actually like starting from the ground and thinking about every single decision with no historical bias so it's like we're building a new platform and I think some of the ideas that we've come up with are actually going to make their way onto the desktop app over time because we're coming up with some pretty cool stuff so I'm excited about it I'm excited to get the app out and let people track their portfolios much more intelligently on the go it's going to be great yeah I was talking to one of the engineers on the team today and a huge conceptual difference that feels amazing is many people don't know stock unlock. com now it's a colorful product we have different pricing tiers thousands of users all that it obviously did not start out that way it was a little side project we did not even realize that a big business would form around this so there was never a first principles like intelligent design that went into stock unlock. com it kind of just naturally Grew From a hackathon project and then like over time we improved it uh the mobile app is exciting because as Daniel says like first principles is reimagining like what do you actually want to see when you're getting stocks on the go uh push notifications directly to your phone and existing stock and loock subscribers will benefit from all this within their existing subscription package which uh is obviously great so we're continuing to add more value there anyways I'm not seeing too many comments about that if anyone has questions in the chat let us know Daniel you want to take one of these comments it looks like we're getting some pretty good questions from the past uh conversation we just had uh

okay uh this one from David says when you differentiate that marketing is a drive for company growth versus being the only that sustains a company a little bit of a typo in there but yeah I think maybe some typos in there um I think the question is basically asking how do you differentiate that marketing is growing the company versus only sustaining it I would say well in my HMS video that I did for my patreon what I noticed was Ted do for example I was comparing the financials of the two companies their income statements and with tedoc they were spending something like $700 million per year on marketing and the revenue was flat and declining so in that case they're spending $700 million on marketing and it's not growing the business whereas hims I don't remember the exact figures off the top of my head but it was I don't know let's say I'm just going to say like $400 million in marketing probably not the right number but they would spend $400 million on marketing and then over the next year their gross profits would increase by like $500 million and that's not Revenue that's gross profits by the way so when you take a look at how much did they input to marketing versus what did they get out it was $400 million in to marketing spend $500 million out in Gross profits that they could then use to continue marketing so how much does hims need to spend to sustain the business I have no freaking idea um all I know is they're spending as much as they can to grow the business and I personally think it's paying off massively so I want them to continue doing that and with tedoc it was a completely different story $700 million in no growth out major red flag I've got a question for you for my own understanding the concept of comparing it to gross profits as in addition to revenue as another line item Am I Wrong to think that the costs you take out of gross profits are like fixed costs so like for us it would be like the cost for the financial data API so how are those costs related like wouldn't there be other costs that aren't influenced by marketing that will change the gross margin like am I understanding this correctly or does that like come into play when you think about like the gross margin changing versus just the Topline Revenue because there might be like fixed cost light items that shifted that weren't impacted by marketing for the cost of goods yeah I don't know how to answer your question um what I would just try and frame it as is what matters is profitable growth what creates share older value is profits growing not Revenue so if a business puts in let's say Oley was actually a really good example about this and I wrote about this in my book actually Oley put in something like I don't know let's say $400 million of marketing again their revenue grew by I think it was like 300 million or you know what for just for an example let's say their revenue Grows by 500 million but let's say their um cost of goods sold does not increase at all or sorry their gross profits don't increase at all then it's like did the marketing actually benefit anyone and the answer would be no so marketing is it's an expense that's paid from the gross profits and I think that's why I would use it there is because it's not an it's an operating expense so it's not paid with operating income net income it's paid from gross profits so I want to see the marketing expense grow gross profits and that was kind of my reason appreciate your knowledge sir let's go to the next question here when is the app releasing we do not have a release date set I believe we should be testing it by or before April and if you are one of our beta testers which is a kind of like private beta testing crew of subscribers we are going to be privately testing this with some people if you don't know what that crew is and you want to become a part of it uh just send us an email uh to support at stock unlock. com which I'm sending in the chat uh we see all these emails they'll be triage to us and you could just say that you want to join the beta testing crew uh you just have to be a paying subscriber and be accepted by us and then you might be able to use the app as a tester just know that if you are in that group we do expect feedback it's not just kind of like a freebie thing we obviously test to find bug so if you aren't interested in that no hard feelings uh no Free Loaders yeah I think we've actually kicked people out of the beta testing group because they were in there to kind of get like free early releases to Features without giving us feedback and it's like it's not why you're here I found them I some people I didn't kick them out in the right way though because some I was like I was like kind of blunt about just like not thinking about emotions and then people were like yo sorry like I have a job like in real and I was like okay I'm sorry so yeah we're more yeah like a hand wavy thing uh Andrew says the DCF is huge I hope it's included soon I think this is in regards to the app yeah so the I think the DCF will be included long term but the goal is to get it out as soon as possible and then start getting feedback immediately so we're not going to build it in right away but you know if we get a 100 people like well where the heck is the DCF and if that becomes the number one thing then it's like okay yeah we should probably put that in pretty soon you can use stock unlock today on your phone I know Daniel's going to laugh his uh behind off here you can use a mobile web browser stock and loock works very well on the mobile web browser maybe you are already doing that uh I have learned the hard way that no one's going to save a mobile bookmark on their phone uh and Daniel and I have had much pain from uh my poor decisions around this but native mobile app is coming just know that if you do want to use any of these on the go it does work today uh you just got to open up a web browser uh it is how many people from around the world are in here I'm seeing Spain I see Morocco Germany Montreal Vancouver uh Brookland over here Germany Netherlands another person from Spain shout out to all you thanks for hanging out with us on this Friday Daniel do you see any more uh com comments here I guess Airbnb did report earnings so since I kind of feel like I'm the resident Airbnb bull if anyone's curious to hear my thoughts on that I'm happy to share but at the same time I feel like I've done enough talking with the lift presentation today um I do see one more comment that I think I can answer I see one on new bank but I have not taken a look at the earnings so I'm just not going to be able to provide value there Andrew Andrew's on fire today what are your thoughts on PRL and go easy so PRL I don't know if you remember but we were when we were in San Francisco walking around that one day I told you about that company that I looked into that was growing ridiculously quickly but it offers loans at like 130% interest rates PRL is that company so I think that this company is obviously growing very quick but I think their business model is uh it's just too dirty for me to get behind and I know I try not to put morals into investing too much but that one as I said earlier I have to have the gut feeling behind it like that one I just don't also I was reading if you go on X and you just type in PRL you can like see some people's prior analysis to the stocks you're look you're looking at it's actually very good to do um and I found that someone did some intelligent math where PRL actually has something like 30% loss rates on their loans like it's ridiculous and if they weren't growing Revenue they would actually be unprofitable like significantly unprofitable so basically the company's story right now is they have to continue growing at a fast rate to maintain profits and make it look like they're doing a good job that was kind of the summary of what the person said so I don't know looked sketchy to me and uh I didn't look into it further than that but I was just like damn the math looks right there so yeah I L into it I think another way to have this conversation like taking emotions out of it more because I do agree with you on that comment I was listening to a podcast the other day um I don't know if anyone knows uh who coffeezilla is he does a lot of like debunking on YouTube he's great um he's not like in the investing space I think he did Bash some investing YouTubers yeah he did recently pretty hard um but he was uncovering a lot of the Griff that happened with this Libre or Libra coin uh the latest like um in the news like meme uh pump and dump that unfortunately got really big and the person who he was interviewing actually like was confessing to a lot of real crimes like this person's probably going to go to jail but uh one of the quotes this person said in terms of like why they were and by the way this person is someone who is in their 20s has a0 million plus dollars from grifting and basically like stealing and doing fraud and crypto uh seems like someone who got like caught up in it and is like feeling really guilty I'm sure that there's a lot of people that want this person dead now but anyways what they said really stuck with me and I'm going to tie it back to that conversation we were just having in a sec it was that crypto projects in general the concept of a cryptocurrency coin and like building that implementation of blockchain products is BU default a value extracting business he went on to say that there are tons of companies who are crypto companies and you'll have the founders kind of talking about like community and all this other stuff but he basically waved his hand and said look you can't argue around this like it is a value extracting company like they are not adding value to anyone like they're selling you on a dream or a community like there's no tangible product there it's like similar to like owning like gold or something right where it's like everyone just has to kind of believe in Gold like that hard because it's a non-productive asset and it just really made me think about this company that you're talking about they're sending out subprime loans to very vulnerable people who are very poor and down their luck and we can call it what it is they are taking advantage of poor people and extracting even more money from them so that they could squeak out some profits and try to make themselves rich and like not really give a crap that some large percentage of the people they're working with either already are or going farther into Financial ruin I think that's a value extracting business like let's take emotions out of it like do businesses generally do well longterm that are only extracting value no yeah no that's a very good way to put it so yeah that's where I'm at that's a very good way to put it now on the flip side um a lot of people say the same thing about gsy which is what Andrew was also asking about to go back to your comment Jake I would actually argue that gsy is a value creating company because can you just say what it is quickly gsy it's a subprime lender as well but their interest rates their average interest rate is around 33% today which is still high but you have to know that like they are lending to subprime people and they have a competitor down in the United States I did a full video on gsy I did a deep dive on it and they have a competitor down in the United States who clearly said if we are offered 35% interest rates to our customers we would go out of business like that's just how risky these lenders are or the customers are so the fact that go easy can offer 35% or 33% loans and maintain profits is actually a testament to how good the business is because their competitors can't do it so they've figured out how to do this extremely profitably now what they also do is they work with the subprime lenders their customers to get them out of the subprime lending uh or to improve their credit scores that they can actually graduate to lower and lower interest rates over time and I think it's something around like over 50% of their customers graduate out of subprime into Prime so they actually work with them so I think that's creating value yeah I was about to call you on your until like the last part of that where I'm like okay so it's actually good because they do it profitably but that last thing I think buttons it all together where they're not just giving like 33% is insane um it's not a good Financial instrument but to your point like you can't really lend people in that category money at any other rate uh and I actually think that that's pretty awesome they're actually like really trying hard to help their customers and then even in terms of the business I'd imagine that those customers are forever going to be loyal to them as opposed to like all the other players out there that are really uh continuing to extract value I guess to your point um I'll have to think about that one a bit more it's um I see your side I I see where you're coming from I think it's a fair point no and the reason I brought up that their competitors can't even offer um 35% interest rates profitably is because uh I think I actually just lost my thought uh the other competitors who can't make a profit off of charging oh yes like these these customers are risky and like every you're in business to make money right like let's not sugarcoat it every business is in business to make money Drive profits so I don't think it's bad for a business to make money too it's also just like okay are you actually creating value for the customer in the meantime and I do believe they are like we've had this discussion in my Discord deeply because people uh see this as like a non-moral business which is fair I get it but it's also like if you were someone who is down on your luck really needed some money right now you know a short-term loan it's not like a fiveyear loan just a short-term loan to get some cash so that you can make it to your next paycheck you'd wish that you could have an interest rate at 33% and get the money rather than just not have it yeah I'll have to bite my tongue on that one I I've been fortunate enough in life to not have been in that situation so it's hard for me to yeah put myself in the shoes but I to I totally hear you um to I mean I'm a little bit more extreme on this stuff but very inconsistently like I'll own a beer company I'll own a cannabis company I won't own like a tobacco company which like makes no sense like there's no logical lines on that so I'm not trying to claim Savant or like moral highground to any of this um the hims commercial during the Super Bowl made me feel terrible like it made me feel so bad dude like do you want to know what I thought after watching the hims commercial was like Hey all those big bad guys that are giving you pills no no no no you don't want their pills but our pills yeah you want pills from us like we're the cool guy so go take more pills and I'm like look I totally get the argument on like if someone's obese and this helps them and exercise isn't working for them like look I'm not trying to go that far into this conversation other than just to say I'm not even sure if himn is a value adding or value abstracting uh sorry value extracting or value adding company obviously these things are gray area so it could probably be argued either way but uh anyways when we were having that conversation I thought of hims as well a little bit more iffy I don't think I'd go as far as to say I think they are a value extracting business um but yeah there were aspects I commercially really I would agree with you like I watched that commercial and they kind of called out the healthc care industry for just selling people drugs but then at the same time it's like hey we sell drugs too should just come buy them from us like I actually do agree with you I watched that commercial I was like I don't get the point like their whole thing was like screw Pharma companies for selling drugs but hey we sell these same drugs for cheaper so like check us out and that was also after the row commer like the row commercial was almost like the exact same thing like also around like semi Glu tiddes or whatever like the glp1 drugs are so fun stuff well news is I uh the line that I draw on this hand is I never like judge people for their Investments like for example if I wouldn't make an investment let's say I decide like go easy is the worst company on earth like I'm still clinking beers with you man like I am not impacted At All by your decisions there so yeah I saw a YouTube video of one person actually saying that you have to sell your soul to own go easy and I was like dude relax like just relax take it down a notch okay love it uh all right Chad looks like we got 56 people in here if anyone's got another question for us or if you want to hear any more plans about where we're taking stock unlock in 2025 super happy to answer them probably going to start to bring us to a close here Daniel I'm not sure if you have any fun plans uh this Friday you got anything going on um going out for Indian food tonight with my family super stoked we found a nice Indian restaurant in Calgary so always love going there did you me and your mom I'm forgetting did we hit Indian or did we hit Asian like that was Tai or Tha okay I like that spot all right well is this your first time going to that Indian spot no okay so this is like confirmed good what's your order you gonna get buttered chicken again like you did in Japan no this place is more like sharing style so you order quite a bit and then uh all right we got a couple more quick questions and we can't take a ton of time on these um so I'm not familiar with ACR but I am familiar with rocket

lab a bit Daniel this is one of those meme stocks that like I looked at again I was like you know what like I think that you and I wrote it off a bit too quickly now don't take this the other way and interpret that as Jake is a rocket lab bu uh but I watched a documentary on a plane ride uh and the CEO of Rocket lab was in it and I just kind of more so got it wasn't a pro rocket Lab company story at all it actually went through um SpaceX it was focusing on Rocket lab and then Astra I think it's like a company that came up and then died but yeah like the rocket lab story is pretty cool basically they are like a second Market option to SpaceX they're like one of the only other companies that's having a lot of successful rocket launches the CEO has been doing it since he's been like 10 or 11 years old the company's been slowly growing like Grassroots very well and they're actually having a ton of successful launches they're like bringing payloads into space if you were to have looked at the financials of this business Daniel like a year or two ago for Value investors like us you kind of look at it and just scoff it's like A2 billion doll market cap business that made 30 million in revenues last year and their costs are like 120 million it's just like a very atypical one to look at so uh I actually think I missed the boat where like if I looked into rocket lab a lot more and really understood the story when it was actually at four or five dollars I know that's easy to say now uh but I actually could see myself taking a smaller speculative position there uh it has since sorted New Heights my only caution not advice to investors there is it is a new space it's very hard to tell where this uh industry is going and in the past there's a lot more examples of Boom bust Industries than everyone gets in that on the ground floor and gets Rich um so I think it's like worth looking at uh the price action's been Wild on it recently and just try to keep your head on your shoulders there's you probably don't know more than the other half of the market on this stuff and that's what keeps me uh kind of at a p length distance from it um I'm not familiar withr but yeah I just want to own up to that I actually think Rock ALB is a really cool company I don't own the stock but I think in hindsight it was definitely a buy at four bucks relative to where they were going lack of competition and the amount of innovation happening at that business yeah I'm looking at them now they're selling for a 35 time sales today what's their stock price right now like 25 20 uh 2357 as of right now yes so this stock stayed at like a$2 billion doll market cap for a while um I'm not sure if it's worth screen sharing but their stock price was around four bucks like a super long time um and they just kept executing they kept uh getting permission to raise more money because the Rockets kept working uh the team kept growing they kept meeting the guidance and Milestones that they said that they would be meeting and eventually the Stock's going to respond like people just kind of viewed it as a 2021 or meme stock like ACH people who own rocket lab are also like talking about Tesla and pltr like nothing against businesses but there is like a Vibe towards the mem stock investor like let's just call it what it is and like that stock was bucketed with it hims has actually kind of been that one too so I think you and I Daniel have like cracked the ice a bit there where it's like yep hey look you know if you got a big thing of apples and maybe not all them taste good there's probably a right ripe apple somewhere in there but yeah I no I agree I actually I would go as far to say I put off analyzing hims deeply because of the crowd just like the crowd mentality around that stock and like some of the blatant pumping that I saw on X I was like if this is the type of people that are in this stock like I didn't really want to get involved and then it got to a point where I was like okay I'm going to take a look now liked what I saw dug deeper and deeper and was like holy crap yeah no this is actually a pretty cool highly profitable company it is so yeah if I just took a look sooner man but it is what was that like Chinese like drone company that you had like back in the like pre- stock unlock days yeah e- hang is that still around I have no idea that was part of like it's one of those things where it's so cool like you talk to your friends at a party like yeah like I'm an eang investor like I'm investing in drones like flying over uh Beijing and like dropping off like people that was part of my 2020 to 2021 hard learning curve that I went through publicly on my channel uh you know not knowing the difference between speculating and investing and that was definitely speculation I'm very happy I got out with a profit on that one but yeah that is uh yeah let's BR up some wounds let's take a couple more of these questions here and then we'll close Daniel just an ask for you read the question from Mitchell vasovski because he is calling you out and I think that's going to be a fun one to respond to but while you think of a response to that uh what's going on Patrick great to see you uh longtime

viewer uh really appreciate the support you are also a software engineer let's go uh I have not heard of open text I just Googled them and it looks like a Canadian software company I'm not sure if the right one came up they're going through a going through absorbing a big merger let me know more about this I'd like to see where your thoughts are going and if we don't get it on the call you can always email me jaob stock. com and I'd love to continue the conversation there Andrew asks is there any way to make the so that the app has Daniel you're gonna love this has incognito mode on the portfolio so it will not show your value uh when you're checking in the gym we literally had the same idea and yes we are going to do this um we're basically going to have a toggle where it goes like Incognito or stealth mode and then all you'll see is like waiting and percent gains and averages and stuff like that but you won't see any absolute dollar amounts or like share counts which we think is cool it'll be easier to like share screenshots of your performance without like giving away what your um underlying dollar sign holding is just because not everyone wants to share their net worth like that and we respect that Daniel do you want to take this uh question or you think this person's just trolling you I don't think that they heard the beginning of the call when you said all you used in Asia was grab to Hell cars yeah so Mitchell said you bought hims a company with no mo L and complaining about Uber so I feel like that's just kind of disrespectful um like it comes off as disrespectful to me but I don't really care um I would just say everyone has a difference of opinions and that's really what it comes down to investing is subjective we can disagree respectfully is what I would do and um that's really all it comes down to we could talk about the St like you were not complaining about Uber from my understanding of what you said for someone that took the time to listen to you um you have a lot of positive things to say about Uber's business and with thousands of stocks in the market while you recognize it's a great company with good prospects it's not within your circle of Competency or got feel enough that you wanted to make it a large portion of your portfolio I think that's very different from like on Uber uh and yeah like I guess agree to disagree on the hims mode what's funny is I actually agree with Mitchell a little bit more on the hims moat comment than uh your thoughts on the moat which I also respect it's like a good academic conversation so we don't have to rehash that right now but yeah come on Mitchell we're nice people why do you got to put us down like that man all right man uh we've

been going for close to an hour here really appreciate everyone hanging out we do this once a month wish we could do it more Daniel anything else on your chest that you want to get out here while we're on the call together I don't think so I think I'm good yeah we've almost been going for an hour it's funny because when Jake and I start these we're like very busy people we're always like oh yeah I can do like 30 minutes today and then uh you know you just get talking about stocks and it's fun and now we're at 52 minutes so we should probably get back to work yeah I'm going to do the at home push-ups workout instead of going to the gym uh just because there's like so many exciting things to get to uh I'll riddle them off and then I'll end the call uh Canadian 15minute delayed uh stock quotes are coming to a stock unlock near you we went out and we bought this data it was more of a money problem than a coding problem so you will be able to check your stock and lock portfolio during the day looking at you Daniel if you own Canadian stocks uh we are also getting closer to having much quicker Financial updates on our we it there is a technical complexity in that one that I won't bore you guys with explaining but uh we are very deeply looking into that and what else is worth mentioning here oh uh we just found out that we have prices for crypto so for all of you that have brokerages connected to stock unlock and we currently are not modeling and ignoring your Bitcoin eth Holdings we are going to be able to start to model that historically in our portfolio tracker and add that into your actual value which will better show your total uh Network which is great again that was more of a data issue than a Time issue so don't worry uh these things actually should not take too much time in engineering land and yeah just say it again mobile apps are coming IOS and Android we're about to 10x our Insight scores uh we gonna keep our lips a little bit tight on exactly what we're doing there uh just for our own IP sake but stay tuned 2025 is going to be awesome uh yes quick quarterly uh yearly TTM results likely for us companies it's a quick auto parsing for 10K 10q reports just I am biting my tongue on that one we're doing everything we can uh but I can't guarantee that one with a 100% certainty but we're really trying um so it we feel the pain too trust us what things go everything will be customizable in cognito mode trust can be a difficult thing and it's understandable that you feel pain around it thanks Google wow yeah anyways cool hi everyone thanks for hanging out Patrick thanks for all the questions if we're missing any uh again please send us an email uh we love to continue the chat and see everyone next month it'll be the spring hard to believe yeah can't wait all right clicking the end stream bye everyone