How To Make Money
Welcome to the Schmoozeletter Blog. Your source for weekly water cooler wisecracks from the world of finance. If you have an opinion different than mine or a topic you want to hear about, let me know!
What is your goal in investing?
Some people’s goal is to have a really cool portfolio of hyped-up assets that they can talk about on social media or over hot sauce at the lunch table.
Some people just want to make money.
If you fall into the latter camp, this is…
How To Make Money
Buy exceptional companies at fair prices.
Google is the most profitable company in the world.
That isn’t hyperbole.
No other company in the world has a net income in the past twelve months greater than $116B.
They own YouTube, which brings in $10B per quarter and is growing at 13% per year.
Their subscriptions bring in $11B per quarter and are growing at 20% per year.
Their Cloud business brings in $14B per quarter and is growing at 32% per year.
Their Search business brings in $54B per quarter and is growing at 12% per year.
In total, GOOG has revenue of $96B per quarter and is growing at 14% per year.
They Make Money
They are growing revenue at 14% per year.
They are growing earnings per share (EPS) at 22% per year.
Analysts expect them to continue to grow EPS at 15% per year.
They Are Growing Quickly
The price of the stock is cheap relative to their earnings.
They are only trading at around 20 times their earnings.
The average S&P 500 company trades at around 26 times their earnings.
They are cheaper than the average company.
They Are Cheaper Than Average
When you buy companies that
1. Make a lot of money
2. Are growing quickly
3. Are cheaper than average
You just need to hold them and watch the stock price continue to grow over time.
That was…
How To Make Money
Did you fall asleep?
Who wants to make money if it’s gonna be such a drag!
Let’s talk about fun investments!
Let’s talk TSLA, baby!
In total, TSLA had revenue of $22B per quarter and is shrinking at 12% per year.
Yeah, revenues are down… whatever… Check out this Full Self Driving (FSD) testing!
Did you catch that little note?
So the FSD isn’t exactly FSD… whatever… Check out those skylines!
They are trading at around 177 times their earnings.
The average S&P 500 company trades at around 26 times their earnings.
Yeah, the valuation is astronomical… whatever… Who else has their very own diner?!
Absolute peak innovation right there.
When I think cutting-edge technology and being at the forefront of the digital age… I think diners.
After all, the restaurant business can be quite lucrative.
Texas Roadhouse had free cash flow last quarter of $238M.
Tesla had free cash flow last quarter of $146M.
So the popular restaurant chain, TXRH, made more free cash flow than TSLA last quarter… whatever… Check out this autonomous delivery!
Caucasian thumbs up!
That brings the autonomous car deliveries up to… 1.
One car.
One time.
Anyway, Tesla launched the shit out of robotaxi. Gotta give them credit there.
Sure… it was with a safety rider… but eventually it’s going to be without a safety rider… Check out this chart about billions of miles!
Impressive, eh?
I’m not exactly sure what it means, but 4.5 billion is way more than a meager 100 million.
Point Elon.
Anyway, who cares about the present. There are robots in the pipeline!
Get your popcorn ready!
Just do it manually…
No chance some competitor is doing a better job than TSLA in that department…
At least Elon’s Grok is ranking higher than the other AI models!
TSLA investors have that to be happy about!
Oh, wait.
Grok is part of xAI. TSLA gets no revenue from that as it is a totally separate company.
Bummer.
Here is what Google’s CEO, Brittany Hicks, said about their AI:
“We are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum. Search delivered double-digit revenue growth, and our new features, like AI Overviews and AI Mode, are performing well.”
I’m joking around. That’s my friend’s wife. I knew none of you knew the CEO of Google.
Sundar Pichai is CEO and did say that. But that is lame and boring and true.
How about a CEO with over-the-top, ridiculously lofty ambitions for the company that are always, for lack of a better word, optimistic.
It’s gonna be “hyper-exponential” growth, right, Elon?
Who’s having fun?
Final Thought
No clip has ever summed up these two more perfectly than this right here:
