In this episode Daniel and Austin recap Chris DeMuth Jr.’s excellent Twitter (TWTR) trade from the last episode, play Bullish or Bearish, dive into what is happening to 3M (NYSE:MMM) stock, and catch up with Louis Stevens from Beating The Market to get his take on Okta (NASDAQ:OKTA) stock.
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Editors’ Note: This is the transcript version of the show we recorded on Wednesday. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the show embedded above, if you need any clarification. Enjoy! Bring your questions and join us live every Wednesday at 12 pm ET.
– Here we go.
– Yeah, Dan.
– Welcome everyone. You are back with Stock Market Live. Oh man, what day? What a great week.
– Yeah, no kidding, no kidding.
– Markets were up crazy, crazy. Now it’s not the same story, but insane week, insane week.
– We’ll dive into it for sure. All right, let’s see who we have joining us today. Alfonso, Anna, Brian, Camille, Chris, Robert, Sam, Sergei. Saia’s back as well. William, Ziv. Great to see all of you here today. We love you guys comin’ to hang out with us on this East Coast lunch hour. We know you guys tune in from all around the world. By the way, Austin did you know, I was lookin’ through this, we have people in France, we have people in Germany, we have people down in Mexico. We have people all over the world that come and watch the show and hang out with us during this hour. Did you know that?
– Wow. Wow.
– How cool is that, right?
– That’s incredible.
– I gotta say, that’s-
– Shout out to all those people. We love having you all here, obviously. So we’ve got a full packed show today. We’re gonna dive in. We got a stock that we’re divin’ into that has been around for quite a long time, and it was actually emailed to us last week, after last week’s show, from Norm. Appreciate you, Norm. Thanks for tunin’ in, watchin’, hangin’ out, and givin’ us the stock idea.
He says something, he’s a dividend investor, and we should probably show some love to dividend investors. And this stock has a crazy dividend. We’ll get into that here shortly. Other than that, we’ve got Louis Stevens joining us here, probably at the bottom of the hour. He is from Beating the Market found on Seeking Alpha. It’s another marketplace service.
We’re gonna dive into him, dive in with him about some stocks that he’s been writing and covering about, and some stocks that he likes right now. But, to kick things off right now, I gotta mention that, I don’t know if you guys were here last week, we had Chris DeMuth. This guy’s call on Twitter (TWTR). Did he nail it or did he nail it? I mean, come on.
– He, oh my goodness. Oh my gosh. I mean, so if you guys don’t know Chris, maybe you weren’t here last week, he’s all about figuring out these arbitrage type spread plays. He kind of realizes, okay, here’s what the definitive agreement is saying, or here’s what the merger’s saying. Here’s where we should be going, here’s where we are today, and here’s what that return would look like if we hit those metrics.
We actually go through with what the news is saying was gonna happen. And obviously we’ve been seeing Elon tweet about, I’m gonna do it, I’m not gonna do it. The spam bots are in. What’s goin’ on with this? It’s been all over the place. But Chris said, “Hey listen, “let’s by, call it, next summer, “we’ll know that Twitter is gonna get purchased.” He was talking about Delaware, the judges, all this fun stuff, and he was right. He was spot on correct. We saw yesterday come out, Elon pretty much said, “Hey, let’s roll with it.” And it was actually pretty interesting. I’ll let you guys laugh at me here a moment. So, Chris shared with us that he bought some call options, $47 strike price call options that expire-
– June expiration of next year.
– Yeah, yeah, so June of next year, which I’m sure have done well. I actually followed him on that trade, but for whatever reason under the sun, I decided an hour before it was announced yesterday that I was gonna sell mine. And it was about, I think it was maybe 700 or $800 worth of these contracts. But yeah, I sold it an hour before it was announced. I probably even ate a little bit of a loss on the sale, too. But it was, I don’t know what came over me. I guess I just-
– Man, I mean you talkin’ about a missed out of like 200% gain at least. I mean that is his arb alpha trade. I mean this guy has nailed it. He dives into the litigation, and he just brought everything to you guys. If anybody joined him on that trade, will you let us know in the chat? I’m just kinda curious. Of course, everybody on social media that’s watching as well, if you were here last week, you would’ve heard Chris say the same thing. If you listen on the podcast, whatever. I mean, we are giving you opportunities here-
– We’re doin’ it right here, Daniel. Right here.
– This is what I love, and I’m glad that you guys are all here hanging out with us. Now, before I forget, I need to mention to everybody that on October 11th, next Tuesday, at one, or sorry, 2 p.m., I believe it is, me and Mike Saul. Mike Saul, the legendary Mike Saul, who has been on the program as well before here at Seeking Alpha. We are doing an earnings webinar. Obviously we all know that earnings are kicking off next Friday, starting with the banks. We’re gonna dive into some alpha for you that Seeking Alpha has put together, a screener. We’re going through a couple names to get you prepared for earning’s season. So join us next Tuesday, 2 p.m., October 11th. Put it on your calendars.
And if Josh, Josh, I believe, is in the… By the way, everybody, you gotta tell happy birthday to Josh. It’s his birthday. We appreciate everything he does in the back for us.
– Happy birthdays in the chat for Josh. Happy birthday.
– Happy birthdays for Josh.
– Up in the chat.
– Hangin’ out, makin’ sure that this show runs smoothly, helpin’ us with the slides. We love you, Josh. We appreciate you, man. But if you wouldn’t mind, please put that earnings webinar link in the chat so everybody can join us next Tuesday. Now let’s dive into our favorite little game that we’ve got on the program. It is time for bullish or bearish initial thoughts. Let’s go. Austin, you wanna kick things off?
– I’ll kick things off, and I feel like we’re, it’s kind of funny, I was, I had a friend today… You guys know I’m a big TikTok guy, right? So I had a friend today send me a video that I had already liked ’cause it was already on my for you page, which means that we’re lookin’ at the same stuff, so Daniel, I feel like you and I were probably looking at the same stuff, so we might have a little bit of overlap here on this bullish or bearish, but I wanna kick things off. Daniel, I gotta know, are you bullish or bearish on the Google (GOOGL) Pixel event?
North America Google smartphone shipments are up 230%. They’ve doubled market share year over year. Are you bullish or bearish on these Google Pixels?
– Man, I think about Google, bullish or bearish? I mean, as long as they’re continuing to hold onto their market share with these cellphones, I’d be bullish on it. I’m personally an iPhone guy. I’m in the Apple (AAPL) ecosystem. I probably will never go to the Pixel in my life.
– Same here.
– As long as they can keep batteries from exploding like in the past and having issues in that regard and being able to figure some things out, they might have a good product there. I’d be bullish.
– He’s bullish, okay. I was actually with a friend this weekend, and to your point, I’m an iPhone guy as well. I’ve got every… If you have a green text bubble, I’m kinda mad at you off the rip. I just don’t wanna talk to you. But I was with a guy this weekend, I was speaking over at Duke University to their student athletes about money management, and my friend Kyle was there, and he’s like, “Hey man, check out this new phone I got.” And it was one of the cool new Pixels, and I’m like… I’m just really surprised that someone my age is bragging about getting a Pixel. I don’t know, it was, it just kinda threw me off. But hey, good for him, good for the Pixels. And let’s move on to the next question. So-
– At least it’s not the RAZR, right? We’re not bringing back the RAZR.
– Oh my God, what about the Sidekicks? Remember those, the little… The ones that flipped around? Those were the days. – Oh yeah.
– All right, bullish or bearish on Ray Dalio stepping down from Bridgewater? Is it a coincidence? Was it planned? What’s going on here in your mind?
– I’d be bullish in regards to the firm. I think Ray… I mean look, he came out earlier this week even talking about how he’s turned his conviction, which bravo to him by the way, right? Just because we’re investing for the long term or midterm swing traders, whatever it might be, the ability for somebody to change their opinion on a trade or on a stance of their thesis when things change is what we should all be wanting to do.
So he came out the beginning of this week, said, “Hey, U.S. dollar, I said cash is trash. “I don’t really believe that anymore.” He might have been super late with how the dollar has exploded to the upside, as we know. But the ability for him to have the lack of ego behind his conviction and come out and change his mind is applauding when it comes to the industry that we’re in.
And then I think for Bridgewater, this company, this firm that has been built on opinions and bringing people together and validating ideas and debating the pros and cons of your arguments in an open more setting, which I don’t know if you’ve ever researched, It’s like they have a whole, a software system inside the firm where as somebody is presenting, they kind of judge them and their thesis and everything else. It’s crazy. I think it’ll be bullish for the firm overall, though.
– Cool, yeah, no, to your point of changing your sort of thesis there, and having the lack of ego to say, “Hey, I don’t have this idea anymore,” or “My thesis is broken. “I’m gonna change what I said.” Bill Ackman did that with Netflix. I think at the turn of the year, coming into 2022, he had this big $400 million position in the company, and then he said, “Hey, I’m out. “This isn’t gonna work anymore.” And maybe he lost 400 million. I don’t know what it was, but he lost a bunch of money. But if he had held, it would’ve been a nightmare.
– It’s true.
– I think moving away from egos is a huge thing, for sure.
– And also, you gotta think about Ray Dalio’s been writing his books. I don’t know if you’ve been on YouTube, but he loves to every once in a while target people with his, I think it’s, like a 30-minute video that he put about the changing world order where he-
– Yeah, that was actually a really well-executed video.
– It’s a great video. I love… Whoever does his animation and helps him with the script, I mean, it’s so well done. I love watching those and how the economy works and the economic cycles and everything. But I think he’s got his focus more on maybe just pushing his book and his belief about this changing world order that’s happening beneath us right now, is what he claims. Is it actually gonna come to fruition? We’ll have to see. Obviously, he’s a lot older than we are, so we’ll be around to see what happens next, but yeah, time will tell.
– Yeah, I remember my friend Christian told me about it yesterday. He’s like, “Yeah, have you seen Ray Dalio’s steppin’ down?” I’m like, well, I don’t know if that’s like good or bad. I was like, wait, hold on, how old is this guy? I feel like if you’re in your 50s or 60s and you’re steppin’ down, you still got another season in front of you, but the guy’s 73 years old. Maybe it’s his time. So, all right, cool. Last one to ask you, Daniel, are you bullish or bearish on Elon Musk’s Everything app?
– X, Everything App X. – X, X, X.
– I was just reading about it. So he still has x.com. And he wants this Everything App. Now the thing that I’m kinda curious about, and he says this with his Twitter acquisition, it might help him get three to five years ahead instead of just starting the app by himself from the ground up is is he tryin’ to become NIO? The EV car company that’s over in China? Where it’s like NIO has an app, and it’s the culture and you go on the app, and then you go to their buildings where they have secret hangout clubs that only NIO people can get into. Is he just tryin’ to steal that kind of business model because there was so much hype? Did you hear about this?
– No, that’s just interesting. When you said NIO I thought you were talking about the Matrix. I’m like, I could totally see Elon Musk making the matrix. but no, I’ve not seen that. So what’s goin’ on with that?
– Yeah, NIO, so that’s the culture, that’s the brand. That’s the cool thing about owning a NIO EV car, besides the fact that they can swap out the battery so you don’t have to wait around for half an hour to charge your electric vehicle. They’ve built this culture where it’s like, people wear the NIO swag, people go to these Neo-only events, like you have to have a NIO car in order to go in these buildings and do all this stuff. And I’m wondering if that’s kind of what he wants to do as well. ‘Cause I’m like, what else can this X Everything App become? Is it supposed to replace Amazon (AMZN)? You know what I mean? Is it gonna get you into concerts and venues like that if you’re gonna have your ticket on? That’s where I’m a little confused.
– Now that you mention it like that, I definitely could see that happening. I mean, there’s something to be had… Obviously we all know.. What are those things? Soho House, there’s like Soho Houses all over the country, and there’s one that just opened up here in Nashville-
– Around the world.
– Yeah, around the world, rather. And one just opened up here in Nashville, and everyone’s, oh, I wanna be a part of that. Oh, what’d they do for 4th of July? What are they doing for Halloween? How do I get inside of that? Oh, I’d so spend that money. Let me do that. It’s a feeling, right? And now that you kind of wrap it into this NIO idea, I could totally see where, oh, because you have a Tesla car, and now because, generally speaking, the Model 3 is much more affordable now than Teslas (TSLA) were 10 years ago, it’s like, now that you’re a part of this club, not only can you talk with other people in the club, maybe it’s like a networking thing, but maybe it’s also free payment exchange, maybe… I don’t know, tons of different ways that you can go about this, but I could totally see this as being a massive marketing driver, a catalyst to sell more Teslas.
At the end of the day, that’s kinda where this is headed. I’m excited to learn more about it. I feel like this guy is… There’s just so much that he’s thought about that I’ve listened to on pod… For example, a Full Send podcast. I’m not the biggest fan of their brand and stuff, but I listen to anything that Elon talks on. So that was a really interesting podcast, and just hearing what Elon says, how he approaches problems, and what his biggest focuses are today is incredibly interesting to me, as someone who’s 26 and tryin’ to figure it out. – Yeah, no kidding. But also it’s like, is he going to spread himself too thin? I mean, we all know that he’s… I mean, yeah, he’s still involved with Tesla, but he’s more involved with SpaceX (SPACE) right now.
Eventually that might change, but Tesla seems to have figured out the plan and figured out their system of using robots and factories, and finally figured out a factory deployment system that works, and he kinda hands it off to the people over there to just continue to run it. And of course he’s gonna step in and try to do what he can to continue to keep it top of mind, because he arguably is the marketing department of that company. They don’t spend money on marketing. So I think overall, you asked about the app, it’d probably be bearish on it. I don’t know how long it would actually take to come to fruition, but this Twitter acquisition might be the first step, but I really wouldn’t bet on it.
– Yeah, I think to that point, too, like I feel like there’s a lot of people that just hate billionaires. That just, oh, I hate Elon. Not because of who he is or anything he stands for, but the fact that he’s so rich. I feel like people just have that ingrained in them, and if he launches this sort of new Everything App, there’s gonna be people who, despite the app having would theoretically provide value to them as a user are just not gonna use it because it was made by Elon Musk, and they don’t wanna support this larger capitalism type, you’re a billionaire type thing. So I feel like that is definitely gonna be a thing, where with Twitter that’s not the case. I think it’s really the opposite right now with Twitter. And then also, too, though, to kinda push against that, I’d imagine that the Tesla, Elon Musk fanboys and die hards are gonna support anything he does, and so that will be bullish on that aspect for sure. Bullish on that aspect.
– Also, if you have an Everything App, isn’t that the same thing of, if we’re taking the word everything from its definition, isn’t that a monopoly? And do you think the government would really allow that to happen? You already see how Congress and Senate, everybody’s already attacking big tech for all the acquisitions they make, ’cause they’re tryin’ to do everything, and so if he’s tryin’ to do the exact same thing, isn’t he’s smart enough to know that you can’t have everything controlled by one person? That’s Monopoly.
– 100%. And I mean, if you think about, it too, it’s like, isn’t Facebook sort of an everything app? I mean, it’s social, it’s also buying stuff and shopping. It’s photos. The whole ecosystem. I feel like that’s very everything-ish. So who knows what’s going on, but okay, so he’s bearish on it, got it.
– Bearish, yep. All right, let’s move over to you. So first one I got up, I don’t know if you saw this, I gotta know, though. So American Airline (AAL) CEO, Robert Isom, testified on Monday that his airline needed, needed a partnership with JetBlue (JBLU), because Delta Airlines (DAL) had more takeoff and landing rights at New York airports as well as fewer unionized workers. So bullish or bearish on, let’s go with American Airlines and this scenario they’re in?
– So I’m generally bearish on anything with an airline at all, because from the perspective of, and we’re talking about financials, there are too many different variables that lead into what could become bad earnings reports. So, I mean, we’re thinking about weather. You can’t control that. Thinking about oil prices to run these things. You can’t control that. The demand of people to wanna travel, you can’t control that. I just, I think in general there’s just too many variables for airlines to get excited about. But the idea of American Airlines trying to pull this off, I just, I don’t know, generally just still bearish on American Airlines, Delta, all of it. I just, move it away from me. I do not care.
– I agree with you, man. I mean, look, as you mentioned, airlines are probably one of the least investible sectors out there. Even Warren Buffett tried it, and he sold everything. Whether it was Boeing (BA) with manufacturing of planes or the actual airlines themselves, like you said, there’s just too many variables. I agree with you on that. Even though I’m a Delta brat nowadays. ‘Cause my wife’s-
– Are you really?
– Yeah, my wife switched me into one, but love Delta. But I would not invest in the company. Just too many variables, like you’re saying. All right, let’s move on. So I don’t know if you saw this, sure you did, yesterday we got the JOLTS jobs numbers, right? They came out, number of open jobs has decreased. Now there is roughly only 1.7 jobs per every unemployed person. Bullish or bearish?
– I’m still bearish, man. I think that at the end of the day, we kinda fast forward six, nine, maybe 12 months, I don’t know when a bottom’s gonna be, but generally speaking, I think that there’s still gonna be a lot of sort of tightening of budgets that hasn’t yet happened. I think a lot of people are sitting in their boardrooms right now saying, We didn’t make as much money as we thought we were gonna make in Q3. Or Q4 is not lookin’ as bright as we thought it was gonna be at the beginning of the year, or like next year those contracts didn’t renew. What’s goin’ on?
I just, I feel like there’s a lot of conversations right now happening in boardrooms of people who are disappointed with their company’s performance, which means that they are not gonna be doing those big marketing efforts. They’re not gonna be doing maybe these salesy things or ABCXYZ to expand the company. ’cause they don’t have it in their budget anymore. Therefore, they will not be able to put out these open position, come work for us type things. And I think that’s gonna continue to decrease. Maybe I’m wrong, hopefully I’m wrong, ’cause I want everyone to have great prosperous and fruitful jobs and great careers. But just the way that things are shaping up from my side of it, I just don’t think that that’s gonna be the case for the coming three to six, maybe nine months. So, bearish.
– Good take, good take. All right, Austin, I gotta know. You teed yourself perfectly up for this one, actually. So I don’t know if you saw this. Earlier, a few days back, actually, probably about a week ago, Meta’s (META) very own Zuckerberg came out and announced hiring freezes as well as a possible restructuring that might come to the company, bullish or bearish? – So, oh gosh, I just, as a 26-year-old who hates Facebook, who hates Instagram, and who’s never used WhatsApp a day in his life, I have nothing to be excited about with Facebook. Zero. Meta in general, there’s nothing I’m excited about. I did meet, though, and when I was at Duke University this weekend, their head of NIL. So apparently Facebook’s tryin’ to do a big push with NIL athletes and help them navigate what that looks like both on Instagram, hook them up with different types of campaigns, things of that nature. I feel like that might be a little cool, but I don’t think the total addressable market there is enough to move the needle for the company.
To that point, I mean, I think Google had a similar approach, and I wanna say Microsoft (MSFT) did, too. It’s like, I feel like everyone’s kind of tightening up their budgets and people are saying, hey, remote work is not driving company culture the way we want it to. And in times of uncertainty, we need the troops to be feelin’ good. We need people to be productive as possible. And I think the first people to go will be those remote workers, if that’s what Facebook or Google, Microsoft, whatever it is. But yeah, Facebook, I just not, I don’t know, I just think that’s gonna be a trend for the next three, six, nine months. I don’t think this is gonna turn around anytime soon. And I think it’s people having begun to see the worst of it, unfortunately.
– Oof, all right, still bearish on meta. There we go. That’s the take, that’s your initial thoughts. And this goes on, let’s go on, let’s go on, let’s go on. This is a fun time. This is a fun one. So everybody’s joining us today. I see Brian. I see James, John, Kevin, Mark, all you guys are here. So we’re gonna play a little game called Guess the Stock. And this is gonna tee us up right into Norm’s stock that he pitched us last week via email. So Guess the Stock, get in the chat. If you think you know what it is, let us know, and then we’ll tell you what it is at the very end.
So, to start things off, this large cap company is a part of the Dow Jones Index. Ooh, that cuts it down very easy. One out of the 30. And actually this year it is one of the Dogs of the Dow. It employs over 88,000 people. It was founded in 1902. This company is number 102 currently on the Fortune 500 list. Last year this company brought in over $35 billion in revenue. Starting to see some people pop up in the chat with some stock ideas here. This company is a dividend king. Not aristocrat, a king, meaning that it has paid and grown their dividend for more than 50 years. Think about that. 50 years of growing and paying your dividend. In May of 2014, this company had received its 100,000 patent. Another company completely on the board of innovation. It is king of tape, not stock market tape, but obviously the rather transparent tape and more. It was started as the Minnesota Mining and Manufacturing Company as the original name.
But now we refer to it as… I think John’s got it. Mmm, I see it twice. Stephanie’s in there, mmm. There you go. – Christian said it. Christian said it. – Christian’s in it. Everybody’s there. 3M, 3M (MMM), great job everybody. Obviously this… Did you know that? 100,000 patents for this company. Employs people-
– I didn’t know it was 100,000.
– All over the world.
– I knew it was tens of thousands.
– It’s well over 100,000 now. This company gets like 4,000 additional patents every year. It’s ridiculous what this company is doing. So we’re gonna dive into 3M stock, pitched to us by Norm via email. Obviously if you have a stock that you want us to go through, you can pitch it to us as well at stockmarketlive@seekingalpha.com is the email address. Now Austin, I would love, can you give the people a little breakdown of what the 3M company does?
– I’d be happy to, but before I do that, Daniel, I just, my ears perked up. What did you say were the Ms that go into the name of 3M? I did not know that. What was that?
– Originally this company was called Minnesota Mining and Manufacturing Company. And it was actually a company started by doctors and lawyers and a couple of just wealthy individuals came together. They found this plot of land in Minnesota where they were supposed… I forget the name of the material they were mining. They were mining the material that is used in sandpaper, and they started with the sandpaper as a product. But originally when they first started mining, it turned out to be the wrong material. And so their sandpaper never actually got made. They had to bring in another investor. The story is crazy. But eventually they came around, they had a solid product, and it just grew from there.
– And now they do 30 billion a year.
– 30 billion plus.
– Okay, well that right there is a clip if I ever seen one. You should clip that part out. That was good. All right, so a big request, shout to Norm. And shout to everyone who’s always pitchin’ us cool stock ideas. I think we had Boeing, we’ve had shipping companies, we’ve had tons of companies. So continue with your ideas, we’d love to dive deep into them, and happy to show you the good stuff and the bad stuff every single week. So request we got last week was 3M, so we’re gonna do exactly that.
We’re gonna jump into 3M, and before you all doze off, oh 3M’s Dow, Dogs of the Dow, this company is actually being valued by the market in one of the most peculiar and unpredictable fashions in its history. So let’s start with who is 3M? With $30 billion in annual sales, 3M employs 88,000 people worldwide and produces more than 55,000 products. This includes adhesives, abrasives, laminates, passive fire protection, dental and orthodontic products, electronic materials, medical products, car care products, electric circuits, and optical films, among another 55,000 different things. 3M has operations in more than 65 countries, including 29 international companies with manufacturing operations and 35 companies with laboratories. 3M products are available for purchase through distributors and retailers as well as online directly from the company. So, we all know what the company does.
I’m sure you’ve seen their brands. You know what a Post-It Note is, you know what scotch tape is. But what’s been going on with their stock price since 2018? Why has it fallen so much? And how has that impacted that dividend? So, the company went from treating around 17 times price to earnings from about 2010 to 2016 to experiencing an absolute run up to 28 times price to earnings in 2018, which was catalyzed by above average growth, which was much higher than the 17 times sort of average.
Then in Q1 of 2019, they shared with their investors that they were experiencing significant growth challenges and were undergoing a restructuring process, which included laying off 2000 people. They downwardly revised top and bottom line estimates, which sent their stock price into a well-deserved correction. Earnings per share was also specifically impacted by litigation-related charges, which was sort of foreshadowing as to what was to come for the company. throughout 2019, while they underwent this restructuring season, the company’s revenue declined 2%, gross profits declined six and a half percent, and their earnings declined 16%. But throughout all this turbulence, and we all know this, that dividend was still paid and still raised even higher.
And for those of you that might not be familiar with the dividend, 3M has been paying a dividend for the last 63 years, paying and raising a dividend for the last 63 years. About a 5% CAGR over the last five years. And the payout ratio is now hovering around 60%. But there was a long-standing phase where that payout ratio was in like the high 40s, mid 50s. So throughout 2020 we saw the company generally perform well. The revenue remained flat, but gross profits expanded 4%, net profits expanded 20%, so they’re now back above that 2018 high, whenever they saw that big catalyst momentum.
The restructuring seemed to have worked a little bit. This financial momentum propelled their stock price back up to about 20 times price to earnings, peaking at 22 times price to earnings last summer before a violent 44% sell off where they’re trading at today. So what happened? It all started in their Q3 2021 earnings report. We saw flat EPS growth year over year, deteriorating gross operating and net margins, and a clear inability to offset inflationary headwinds, which was something their competitors, AKA, Honeywell (HON) had already begun doing pretty well, and down went 3M stock because of it.
This selling was then exacerbated by their recent litigation risk with their military combat earplugs. I think John mentioned it here, beware of the earplug litigation. You’re absolutely right, John. So what had happened is 3M is now facing 230,000 lawsuits accusing them of selling defective earplugs to the U.S. military. And I think just the other day 3M was tried in a bankruptcy court and they lost, now forcing them to find another way through this massive litigation, which is gonna be trials, appeals, and settlements. So dollar amount paid out so far has been 250 million with 70 million of that going to a single plaintiff.
But some analysts are saying they could be on the hook for up to $33 billion. 3M proposed about a billion to sell it all, but they were kinda laughed at. So, here’s the deal with the company. With all that being said, all this litigation stuff, the company’s fundamental business is generally fine, growth of like three to four, maybe 5% CAGR through 2026 is on the table. But these external factors are impacting the business, AKA this $33 billion litigation, which is making it really hard for the market to price this in. So you either believe 3M is gonna go bankrupt because of these lawsuits or you believe 3M is not gonna go bankrupt because of these lawsuits.
Right now, the market’s stuck in the middle. They’re trading about 11 times price to earnings compared to this multi-decade average of like 18 times. And they’re only trading at 10 times price to operating cash flow compared to about 15 times. Which is making them now offer a 5.2% forward dividend yield, which is insane if you’ve been following 3M stocks since, I don’t know, 2002. It’s also worth noting that some of the largest product liability awards have been dramatically reduced even after they’ve kind of come to fruition. So that could also be on the table-
– Josh, can you throw up that first slide, actually? I think people need… You should break this down, ’cause you found this, and you sent it over. I wanna make sure that people see this. On that point-
– Yeah, yeah, so-
– Award amounts and then they got reversed.
– Exactly, so it’s worth noting that the largest product liability rewards in the history, nearly all of them, have been either reversed, reduced by 50% or more, or settled for a much lower amount. So I’m not saying this is gonna happen for 3M, but this has been the historical reality. So for me, I’m on the fence. On one side, I’m seeing a generational buying opportunity for a company that I’m confident is gonna be around in 20 years, and likely still paying a healthy dividend. But on the other side, I’m seeing uncertainty everywhere, absolutely everywhere. But I think the biggest understanding that a potential investor should have right now is that I don’t think there’s any urgency.
There’s no urgency around. You need to make a decision if you’re gonna buy or sell now. We’ve never seen this before. Let’s all panic and can go crazy. I don’t think there’s any urgency around here. It doesn’t matter if you get into 5.2 or 5% or 5.5. I still think that the yield on the dividend’s gonna be great regardless of where you get in. But yeah, that’s kind of a high-level breakdown of this insane company with an insane potential opportunity if things get figured out. Daniel, what do you think?
– I love how you just put that. I love how you said it’s an insane potential opportunity, because that’s exactly how I feel about this company as well after doing all of this research. To kinda get things started, obviously we like to look at the ratings summary card from Seeking Alpha. So Josh, let’s go to the next slide. Just show people where everybody’s at. Seeking Alpha authors have a hold on the stock. Wall Street analysts are a hold, and our quant system is currently a hold as well. Let’s look at the factor grades, Josh, next slide. And you got the valuation at B minus, growth at an F, profitability A plus, momentum C minus, and revisions are a C minus as well. Josh, let’s go ahead and turn the slides off for a second.
Now, as you’re talkin’ about, this litigation is, like if this litigation did not exist, people would be flooding into this stock.
– Oh my gosh. If this wasn’t a thing, people would be calling their retired parents and say, “Do you want 5% yield? “Go and jump on this company.” Absolutely.
– Well, it wouldn’t be, it wouldn’t be a 5% yield at that point, right? The only thing that Wall Street is freaking out about when it comes to this company is this litigation case right now. This is the same thing as like a Johnson and Johnson with the baby powder with the cancer and everything. It’s happened before, and you just don’t know the dollar amount that’s gonna come from the overall… I mean, it might become class action. I’m not sure how they’re gonna do this. 230,000 people, right? Isn’t that what you said?
– 230,000.
– Some insane amount of- I mean, and it comes to the earbuds. they were combat ear protection that didn’t work and now people are experiencing hearing loss. A very significant event for these people in their lives. Obviously this is a problem, and it stinks for 3M as a company to have acquired this company back in 2008, but since you acquired it and you’ve been selling this product and you had your stamp of approval on it, you have to deal with the consequences. So when I was reading through all of this, I’m thinking, okay, well what else is going on? Sure, they had the litigation, but also I was diving into the balance sheet and the structure of where revenues come from. International sales for this company are 20.3 billion, okay? And their revenue for 2021 was something like 35 billion. So a significant amount of their sales are coming from overseas out of the states. What does that mean? Well, as the dollar continues to get stronger, their sales are going to continue to get weaker.
And that’s something that also investors are keeping an eye on. This company, as you had mentioned, 3M is in one of the biggest bear markets it’s ever experienced as a personal company starting in 2018 around that whole tax cut infrastructure spending euphoria. Raw material costs are going up. If you’re talking about the Jamie Diamond hurricane of the economy, this company has its own specific Hurricane Ian ripping through the company right now, and there seems to be a couple years that this might play out. So, is it investible right now? Would I get in for a trade right now? Probably not. I mean, if this is gonna be taking three, four, five years, and you don’t know the dollar amount of the payout for the litigation, even if raw materials come down, even if the dollar comes down, that could be $30 billion. That’s an entire year worth of revenue.
Now granted, this company does have like $10 billion of plans and manufacturing assets. If they do go solvent there’s that they could sell off. Also, I was diving in their treasury stock is actually sitting around 30 billion. So they could always reissue that stock. It would hurt shareholders, but it would let the company survive. So they have a few options, and I think right now with what you’re seeing, and where they drop the dividend yields are growing only 1% a year right now is… Oh and no share buybacks. They just cut those as well. They suspended ’em. Might come back after the litigation. But all they’re doing right now is playing defense, because I feel like they don’t know what the final payout amount is going to be either.
And obviously that’s why the Street’s worried. That’s why investors are worried. That’s why people are getting out. For us, as you mentioned, it could be the generational potential buying opportunity of our lifetimes, and we’re looking at it right now dead in the face. But there is a lot of uncertainty. If I was recommending it to somebody, I’m not a personal owner of this company in my portfolio, but if I was recommending it to somebody, I’d say, “Take a very small position.” Obviously don’t heavy yourself into it, but obviously think about that’s gonna be the industrial side of your portfolio.
Industrial side of the economy is getting hit right now, we all know this, but they have those products that have been around forever, and they have the ability to spin some things off, sell some things off if they need to. I think the company might be around, but now we’re just trying to figure out, okay, where we gonna be? As a shareholder, are we gonna be more diluted? Are we gonna get that earnings that we’re paying for right now? What was that? The PE? You mentioned that, didn’t you? – Yeah, I think the PE right now is… Let me grab it here. I think it was right around 11 times?
– 11 times, yeah, okay. So obviously-
– Yeah, yeah, stocks trading 11 times priced to earnings right now, versus the multi-decade, literally 22-year average, of 18 times. And their price to operating cash flow is at 10 times versus the 15 times multi-decade average. So, I mean this is clearly in bear market territory, discount territory like crazy. And I think to your point, though, of… So here’s how I’m thinking about it. Either this company gets hit with a $30 billion something and it gets reduced to, call it, I don’t know, 10 billion.
– 10, yeah.
– Somewhere in that, maybe 15. But somewhere around 10. And they’re growing their operating cash flow. Clearly it’s moving the right direction. I think between this year and next, or this year and 2024, it’ll grow about a billion and a half, billion eight maybe. So they’re making more cash to pay down this kind of settlement. So I guess I’m not worried about the growth side and having the money to pay it, assuming it’s gonna get paid off over several years.
But if you’re a dividend growth investor, I don’t think that this is the play. I don’t think that 3M is gonna continue to raise at that 5% CAGR assuming that they’re also gonna have to like pay off all this money, right?
– Right, right.
– So if you’re just tryin’ to park it and maybe nibble and kinda keep up with it very closely, sure, maybe consider opening a starter position in the company. Lots of volatility ahead, just full warning there. Every time you see something in the headlines about this litigation, the stock’s gonna do this. It’s gonna be up and down, going crazy. No predictability at all. But if you’re a dividend growth investor, I don’t think that this is the play. I think there’s better-
– If you’re a dividend investor I think, I mean look, if you wanna park your money somewhere safer, think about something like the NOBL ETF, the ProShares ETF, that diversify across dividend companies. The dividend yield on this thing might go higher just because the share price might go lower. Obviously that’s how it works. But real quick, before we’re kinda… I wanna get to Louis Stevens here in a second, but I wanna take a second and just look at this chart real quick, just to get eyes on what is happening with 3M stock. Wait, that is, where are we? Josh, slide off for me. I’m gonna go to the chart. Thank you.
So here we are with the chart. Obviously, I’m gonna back out to the monthly view. I mean, so this is obviously going back to, I mean this is 1984-
– Sheesh, look at that.
– Down bottom left. This company had a stellar run. And unfortunately, one lawsuit can bring it all down. I mean this kinda looks a little bit like a head and shoulders pattern, something to keep an eye on. If it is, and this is your neck line right here, I mean by standards of what a head and shoulders pattern playing out typically looks like is from the neck line to the very top, which here is about 50%, 47%. So you could see a 47% drop, which would put you where? If this is actually, if you believe the pattern. And look, patterns are patterns. They’re pretty much telling you what psychologic behavior is going on underneath. But that brings you back down to like the 70s. And if you get down to the 70s, I mean the dividend yield on this thing could shoot up 10, 11%. Especially as it continue to grow. But it broke right through the 200 monthly moving average. Think about that.
– I don’t give a damn about that. We’re goin’ through it.
– It went straight through. I mean, typically that is where you find some serious resistance over time, because institutions like to buy, I mean that’s where you kinda get the institutional buy in. But let’s just go look at the one year, one day real quick. Obviously we’ve seen some gaps back here that have filled.
I mean this thing has been tanking lately. I mean there is no end in sight. All the moving averages aren’t a significant down trend. I mean, look, you had a little bit of a gap from two days ago. That gap already filled, now it’s bouncin’ back around. Actually that’s a great point to point out right here. Lemme just do that real quick. ‘Cause obviously we always talk about the gap, right?
So I’m looking at the gap here, and I go, okay, two days ago we had the gap up and then we had the close. This thing reversed pretty much at the bottom of the gap. 80% of the time, once the gap fills, it changes direction. And that looks like exactly what we have goin’ on here today, if we go in and look at it. Okay, it’s a little bit shorter. It hit the 200 day. This is the 30-minute time frame, by the way. So I mean it, but it still saw the bounce. I mean is it coincidence? Is it whatever? I don’t know.
I just look at the charts and tell you what the chart’s doin’ and where the price and the volume moves afterwards. So obviously I call that a gap fill. That’s moved on. But this thing is just in significant downtrend. I’m not sure I would be ready to touch it at these levels. Anything last to say on 3M, Austin?
– Be careful, that’s all. Just be careful.
– There you go, that’s a good take right there. Now, let’s go ahead and get to our headliner joining us today. This is awesome, man. I’m glad he is taking the time to be a part of this stock market live episode today. Louis Stevens from Beating the Market is here to join us. We’ve got some things to break down with him. Louis, there he is, the man, the myth, the legend. Obviously welcome to the show. Welcome to the show. Louis, let’s just kick things off. Why don’t you go ahead and just tell people, obviously your name’s Louis Stevens, but tell ’em him a little bit about the service that you run over there on Seeking Alpha.
– Sure, well, at the outset, I’m very grateful to be here. Thank you for having me. I’ve thoroughly enjoyed the show so far, and it’s always a good day operating on the best investing platform on the internet, that is Seeking Alpha. –
– Say it louder for the people in the back.
– I genuinely believe it to be true. I genuinely believe it to be true. There are certainly other options out there, but I think Seeking Alpha has such a vibrant ecosystem, and the comment section of the news flow of the articles alone is worth its weight in gold. A lot of productive debate. A lot of bear theses, a lot of interesting stuff. So love Seeking Alpha, grateful to be here. And on Seeking Alpha I operate Beating the Market, and Beating the Market is a subscription service focused on purchasing companies that we will own for three, five, 10, 20, 30 years. We want to own these companies forever.
So we look for, basically templates from the most successful investments of all times, such as Walmart (WMT) or Amazon or Lowe’s (LOW) or Home Depot (HD) or Starbucks (SBUX). And we, or there’s a lot… Or AWS within Amazon. That’s just a few examples, and we apply those templates alongside a lot of wisdom from the best investors of the 20th century to our capital allocation strategies. And then we do nothing for very long periods of time. So that’s beating the market in a nutshell. But yeah, there’s a lot of interesting stuff to discuss within all of that.
– Yeah, so actually, I wanna get started with you just put out an article just yesterday, I was reading it this morning about Okta. And Okta stock has been completely demolished. Actually, I’m gonna pull it up real quick just so everybody can see. I mean, I would love to hear your thesis on this and what you kinda laid out. I mean, this stock went from 24 to 294 and has been pulling back ever since, what is that, beginning of the year? Maybe a little bit, February. What’s goin’ on with this stock right now? Why is it seeing such a significant retrace of these prices?
– Yeah, well today, so today I wrote that we are going to discuss Okta for, I think it’ll be discussed in 30 years. I don’t think that it can… I don’t think that a company that has what amounts to a monopoly… Can you hear me?
– Yep, we can hear you.
– Yes, we gotcha.
– What amounts to, at worst, I would call it a duopoly, and I think it could be contended that it’s close to a monopoly outside of Microsoft’s product. But, Microsoft competes with virtually every single company under the sun from The Trade Desk (TTD) to Cloudflare (NET) to SentinelOne (S) to Slack to Salesforce (CRM). Microsoft competes with everyone. So… I think it’s in an extremely dominant position within its industry. I wanna keep it concise, because there’s literally so much I could say about it-
– I think, Louis, it would be really beneficial, too, and not to interrupt you, but I’ve read a lot of your research, and you do a really good job of walking people through a bunch of different sort of factors that you consider before investing, the management team, the total addressable market, things of that nature. Do you mind walking us through maybe what some of those factors are and why they’re so important for everyday investors to consider before they might open a position in a company they’re excited about?
– Sure. Well, I think there’s… Okay, so there’s a variety of templates, as I mentioned, that are very useful in discerning what will be a successful investment. And the last time I was on this call on this show, I walked through one of them, which is the idea that, a new entrant into a market or an industry will build a product that is far superior to all of the products within the industry. And that new entrant will go into this industry, and that industry’s also highly, often highly fragmented. There’s a lot of competition. The competition’s product is pretty weak. it was invented maybe three or four decades ago. The founders have long left. It’s basically just a cash flow producing asset.
Lots of times it might just be owned by private equity firms who are literally looking at it as a discounted cash flow, net present value formula. They came straight out of Wharton Business school into PE, and they’re taking these giant public companies private, or they’re buying private companies and just feasting on their cash flows. So these don’t, these are… And the customers just have them by sheer inertia. So, these don’t represent real competitive threats. And that’s certainly the case with Okta.
What it ultimately is really competing against outside of Microsoft, especially in light of SalePoint and Ping getting, well Ping likely will be acquired and SalePoint was recently acquired by Thoma Bravo, but a company like Okta will go into a very fragmented, low net promoter score, highly competed industry with a 10x, quote, unquote, a superior product, to what’s being offered, and it will start capturing customers within that industry. And then over time, a company like Okta, that new entrant will continue to add new products on top of its initial superior product, and it will continue to capture market share, and over time it will grow into something close to a monopoly.
Lowe’s did this throughout the 70s, 80s, 90s with the home building, supply chain home building industry. Walmart did this with groceries. Amazon’s kind of still doing this with eCommerce. And we see the same dynamics unfolding for Okta, where it started with single sign on. Its competition was mostly legacy identity solutions and or custom built identity solutions, which, as soon as the IT team leaves, that’s basically a house of cards waiting to collapse, the IT team that custom built it. So we see this with Okta where it started with single sign on, and it’s captured huge market share as this cloud identity platform.
And now it’s building out all of these new offerings such as PAM, these are abbreviations, but PAM, IGA, and C-I-A-M, CIAM. And I think you look back on how the market treated Okta in the 2010s. The market acknowledged that it was a far superior product consuming market share in a highly fragmented industry with a low net promoter score attached to the solutions within this highly fragmented industry. And the market saw that it was consuming market share at a rapid pace. Over the last three or four years, it’s gone from 400 million in sales to trailing 12 months as of October 5th, today, about 1.8 billion. It’s grown extraordinarily fast.
It represents what amounts, in my estimation, to a monopoly within the industry, quote, unquote, with Microsoft being its primary competitor, but Microsoft has been in the industry since 2014, and Okta has, as I just mentioned, grown its sales from 400 million to 1.8 billion in the span of just a few years. But yeah, so this… So this is kind of the template that we apply to every company we buy.
And I think… I’m just gonna share a couple more thoughts here, but I think we look at Adeon or Okta or Affirm or even Amazon, a larger kind of safer company, across the board we see these companies executing this strategy as well as a couple other kind of templates that we employ. And these companies are really the strongest they have ever been in their corporate histories. Okta included. Okta is experiencing nonlinearity in its business. It’s having execution issues. Objectively there are issues within the company right now, but there’s no company on earth that will not go through a period where there are issues.
I hate to use the example, but 3M’s a great example. 3M’s a great example. I think that’s slightly more existential, but I think you guys painted a compelling picture of it being far less existential than what the market is pricing in currently. And to give the viewers a little bit of caution there, you look at the California wildfires, the campfire or whatever, and the role that PG&E, whatever the utility company that was somewhat culpable in that, I was considering that as a potential turnaround maybe five years ago. I never ended up pulling the trigger, but it did not turn around, to say the least. And it’s, I think today, it might actually be a good investment. And I’ve actually seen some very large hedge funds purchasing it like, Dan Loeb’s Third Point, I believe has been accumulating it through this year, now, after it’s 90% decline.
So that’s kind of a cautionary tale in terms of these turnaround stories. But I don’t think Okta’s near… There’s no multi-billion dollar class action lawsuit being filed against Okta nor Adeon nor Amazon, nor basically any of these companies that we focus on that are kind of executing this strategy where they bring a superior product to a very fragmented, highly competed market and consume market share over time. We’re seeing these companies in their strongest state they’ve ever been. With Okta it’s somewhat an exception here, because objectively they have mismanaged the business to some degree. But if you look at the products that Okta has fielded, you look at their product roadmap, which isn’t in the future. It’s happening right now. Like they’re executing it.
They have the products in market, for instance, their IGA product, Identity, Governance, and Administration, and the business is certainly, from a product perspective, the strongest it’s ever been in its history, and it trades at 5.5 enterprise, basically 5.5 times enterprise value to sales.
But I’ll conclude with this. I’ll punctuate all these thoughts. Something fun or, it’s been fun for me, this… I’m writing this series called The Greatest Irony. And the greatest irony is that so many businesses are stronger than they have ever been, and I understand the Great Depression is just on the horizon, which I say flippantly. Who knows what ultimately… I have a macro take, but, I think everybody’s macro take is, they’re everyone’s opinion. We all have one, and they aren’t all great. I think I messed that up, but, in an attempt to be polite about the whole thing, I didn’t say that phrase exactly correctly, but what I’ve been enjoying doing is looking back at what the market thought was, what did the market say about the best companies of the 2010s?
What did the market… ‘Cause the market often has good points. Not always, but the market can have some good points. What companies were the best companies to own in the 2010s? According to the market. And I think Okta was one of them. It traded sustainably. It wasn’t just 2020, it wasn’t just 2021. I mean, it was from 2017 to late 2021, Okta traded from between, basically it IPO’d at about 15 times enterprise value sales. But really the majority of its time as a public company it spent at 20 times enterprise value of sales to 50 times enterprise value to sales, and for good reason.
You look at how dominant the platform is, you look at the product roadmap, you look at the technologists at the helm, and it’s evident they have what amounts to something very close to a monopoly in the identity, the cloud-based identity market, with the exception of Microsoft’s offering. But Microsoft competes against everyone. – I wanna jump in here just to break it down. So you’re talking about companies mismanagement, the stocks probably getting hit as well from the overall market compression of the multiple being lowered over time, whether it’s the bond market freaking out or whatever it might be, or maybe that it’s this company within the IT sector.
Obviously, information technology is being hit first and hardest, ’cause that’s typically how it goes. Kinda curious, though, because EV sales, you’re talking about, yeah, it’s five and a half times EV to sales right now, but the overall sector median for information technology is 2.5. So it still seems a little bit elevated. So from this position right now where the stocks at $58 a share, I mean, is this where people should start their positions if they don’t have one? If we’re talking 10 years in the future? – I appreciate all of those points. So let me… I almost wanna have you remind me what you, ’cause each statement was very thought provoking.
So number one, information technology. What is information technology? I call it 1.5 trillion. Five companies over the last 30 years have gone from about 10 billion in sales to 1.5 trillion. Five companies. Microsoft, Amazon, Google, Alphabet, and Meta. Just five companies, $1.5 trillion. So don’t buy tech, don’t buy tech. Not everybody… A lot of VCs made a lot of money there, and public investors didn’t quite make as much. They kinda did. Microsoft and Amazon and Apple created unbelievable wealth for investors. This idea, don’t buy tech, don’t buy tech, well here’s my response. $1.5 trillion, five companies. That’s only five. Because it gets much larger when we start thinking about Oracle and Salesforce, and we start thinking about all these private companies, Trend Micro, Alibaba, JD, we don’t invest in CC purview companies, but I say it flippantly, because I… But it’s incredible. It’s a part of the series that I’m writing, The Greatest Irony. It’s incredible that this industry that has created arguably more wealth than any other industry over the last 30 years, is now being hit the hardest.
It really is the greatest irony. So I just… I wanna share that ’cause I think it contextualizes the experiences. I think there’s a lot of PTSD from the dot-com bubble. I think technology is, can be very challenging to invest in. I’ve studied Okta for years, and I’m still learning more about the company. Every time I review it, I’m like, okay, I didn’t really fully understand that. Now I get that aspect. And it’s taken years to really reach that point. So I understand why information technology would sell off. But it also is the great irony, in my opinion, because it will continue with almost unequivocal certainty information technology. It may not be Okta. Okta may have catastrophic issues with management.
That may be the case, and the same way that 3M. Offers huge upside, but there’s real risks. But the information technology space is going to continue to proliferate, and it’s likely only going to accelerate. And then valuation multiples in the space. This was a big point that I touched on in my review of Okta. SalePoint, it offers only an IGA product. Okta offers single sign on, IGA, PAM, CIAM, an entire platform of identity solutions. Think Microsoft or all of software, you can go to Microsoft and you can completely outfit your global 2000 company. One company within a global 2000 with everything you need, from security to communications, everything. You can do that with Microsoft. You can go to Okta and outfit your entire company, for the most part. There might be some gaps here that I’m missing, but they have a holistic platform for identity solutions.
And that’s Okta within this niche. So SalePoint was just acquired by Thoma Bravo. Thoma Bravo is a highly reputable, reputable private equity firm that takes undervalued public companies, private often does, and then sometimes it spins them off like it did with Dynatrace, and it just acquired SalePoint at annualizing Q2’s revenue. So multiplying Q2’s revenue, SalePoint’s Q2 revenue by four, annualized 13.2 times, Q2 annualized revenue. Currently Okta trades at 5.2 times annualized revenue. And IGA is just one product that Okta offers, and it’s going to offer either the best IGA product. It’s still relatively new. As I discussed it, Okta has been evolving this product offering over the last five years. But it’s IGA product will likely reach the top of the Gartner charts over the next three to five years.
SalePoint’s growing at, it grew at 31% with 130 million in revenue in Q2. Okta generated 450 million and grew at 43%, and it trades at less than half SalePoint’s multiple. So, I mean that just… That really blew my mind. Like that was one of the things that I really- – It’s a compelling point. – But it doesn’t stop there. I’m sorry it doesn’t stop that. It really is incredible. So Ping, Ping Identity is a company I’ve studied over the last couple years, and basically the conclusion we reached was Ping’s a fine company, but Okta is the 800-pound gorilla here.
Don’t touch Ping. This is not Coke versus Pepsi. This is Amazon versus whatever Walmart’s eCommerce platform is. It’s non-existent. – Shots fired. – Yeah, well, with all due respect to Walmart. I think Walmart’s one of… For our listeners, my goal is to create as much value for you. I think studying Walmart is one of the most incredible things you can do as an investor. Founded in 1962, and basically it stopped generating returns by 2000. But why did it create such immense wealth from 1962 to 2000? And then why has it stopped generating wealth from 2000 to today? Those two questions go out there and ask that. I won’t get into it today. Walmart’s just a phenomenal… It’s such a fascinating company. And it’s been so important to my investing growth journey.
– That’s awesome, man. Awesome, I wanted to jump in. Sorry to jump… We’re gettin’ towards the end of our show here. Austin, I wanted to see if you had a quick question for Louis before we let him go. We’re obviously taking way too much of his time. So Austin, anything from your side?
– No, I think you did a really good job answering sort of his approach on how he thinks about investing in new companies. Finding those fragmented markets, and then who are those new entrants that are absolutely disrupting what the status quo is today and how are they, after they disrupt that, add on the new products on top of that? I think you did a really good job explaining that with Okta. So, I appreciate it, man. Thanks so much. A huge fan of your work, and it’s a privilege to sit down with you.
– Thank you for saying that. That was better than I did-
– Nah, you did great, you did great. Louis, I gotta ask you-
– Thank you.
– If people wanna find you, where can they find you besides Beatin’ the Market?
– Well-
– Twitter, he’s a great Twitter follower.
– On Twitter.
– Yeah, well, yeah, I’ve-
– Podcast?
– I’ve been so focused on Beating the Market. I’ve been working so hard within Beating the Market to give our community just the absolute best I can during this time where I think, like Warren Buffett said, “The economic skies get dark and gold starts raining.” There’s a two week free trial, and I would genuinely be doing this for free. I love it so much. And I’m just relentlessly serving my community during this time where I think there really is exceptional opportunity out there.
Like 3M, not everything is going to be the smashing success. There’s so many things down 50 to 90%, like 3M. I think it’s down 50%. Not everything’s going to work out perfectly, but there will be… This is the best time to be considering investing, in my opinion, since the great recession, and it’s a special time to invest, and yeah, check us out, Beating the Market on Seeking Alpha, the best investing website on the internet. And thanks for having me, guys.
– This was a lot of fun. Thanks for joining us.
– Thank you for joining us, Louis. This was awesome. It was great having you on this show. Everyone go make sure you check out Louis Stevens. He is an excellent, excellent writer. He really breaks down his research. I enjoy reading it. That’s just me. And I’m sure you will as well. Remember, like he said, he has a two-week free trial for this service. So go check it out. And you can also chat with him within the service, which is awesome. So, Louis, thanks for joining us today, man. Really appreciate it.
All right, everyone, we’re about to get on outta here. Thanks for joining us today. Obviously, if you have any stock recommendations that you want us to dive into, stockmarketlive@seekingalpha.com. We’ll see you all-
– I wanna see them. I want someone to give a stock idea, like 3M, where I had to dig deep, man. I wanna find that next idea. I want someone to say, “Austin, look at this. “Talk to me about this one.”
– John’s over here in the chat saying General Electric (GE), another industrial conglomerate. I mean, that’s the thing, just like you said, this 3M, I went down the rabbit hole.
– Oh yeah, yeah.
– And then trying to figure out what’s going on with this litigation, what’s going on with the financials, how has this company been around forever? I mean, they’ve acquired so many great companies. They innovate like crazy. Just like we were talking about with Micron (MU). Micron with all their patents, 3M with all of their patents. I mean, geez Louise, that company is a beast. I hope this litigation figures out soon. ‘Cause I’m gonna keep an eye on this one.
– Yeah, absolutely, and it looks like we’re getting a lot of suggestions here in the chat. So, I got some work ahead of me, Daniel.
– We have some work. We’ll definitely discuss on our end, before we come back with the war chest for next week’s episode. Wednesday, 12 p.m. Eastern. Thanks for joining us, everyone. We appreciate you. And we’ll see you again next week. All right, Josh, get us on here. Happy birthday, man. – Happy birthday, Josh.
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