The Stock Market Is Overvalued, Here's What I'm Doing Now
Duration
33:08
Captions
1
Language
EN
Published
Sep 29, 2025
Description
🎉 10,000 Member Patreon: https://www.patreon.com/josephcarlson 💵 Dividend Portfolio: https://click.linksynergy.com/deeplink?id=5mNcifgFllM&mid=50362&murl=https://dashboard.m1.com/share?token=3b283352-1bff-31d9-8576-f5770c2bfdfd 🚀 Growth Portfolio: https://click.linksynergy.com/deeplink?id=5mNcifgFllM&mid=50362&murl=https://dashboard.m1.com/share?token=39d17ae6-4a4a-3fc4-bb15-d86abe3fbb67 📈 Qualtrim Website: https://qualtrim.com/ Joseph Carlson After Hours: https://www.youtube.com/channel/UCfCT7SSFEWyG4th9ZmaGYqQ 00:00 Introduction 02:00 Overvalued Market 07:30 5 Quality Buys Today 19:27 Credit Market Concerns 23:38 EA Games Leverage Buyout 27:12 Tariff o=On Movie Industry 28:00 Fail Of The Week, Baby Naming --- Disclaimer -- Some of the links above are affiliate links, I can earn money from them at no cost to you. This content is not a solicitation, is not endorsed by M1, and was not reviewed by M1; the opinions expressed are solely those of the authors and do not reflect M1's views. Information presented is accurate as of the video posting date; for the most up-to-date information, please refer to m1.com. Before making any investment decisions, consult your personal investment, legal, and tax advisors, as this content is for informational purposes only and not intended as investment recommendations. -- Find me here -- Instagram: https://www.instagram.com/joecarlsonshow/ Twitter: https://twitter.com/joecarlsonshow My Favorite Investing Books: https://amzn.to/3KwyIhG All the tech I used to make this video: https://amzn.to/4547DLk About Joseph Carlson: I am not a professional investor and have never claimed to be. I'm an amateur investor sharing my experience of what I've learned, where I have had success, and where I've had failures. I share my thoughts on investing and performance with transparency. My approach and goal to investing is to buy high-quality long-term investments in world-class businesses that I call "compounders". I view my investments as businesses, not as stocks. Before creating content on YouTube full time I worked as a senior-level programmer for 8 years. Over the years as a programmer, I compounded my knowledge of development. I take the same iterative learning approach to my study of investing. I study investing as a craft in the continual pursuit of being better. I will make mistakes in investment decisions from time to time. Results are not guaranteed. Please do not blindly follow me into any investments, and make sure your portfolio and investments are built around your specific income, risk tolerance, personality, and timeline, and overall circumstances.
Captions (1)
Welcome back everyone. Today on the
Joseph Carlson Show, as our portfolios
gain in value, making tens of thousands,
if not hundreds of thousands of gains,
in fact, in my portfolio just this year,
I'm up a combined $100,000 plus between
the passive income portfolio and the
story fund. Now, the passive income
portfolio and the story fund are
performing at different rates. They're
both compounding steadily, creating
gains, and there'll be more compounding
in the future. But, of course, I'm not
the only one making gains. The overall
markets are going up this year with the
S&P 500 up 13.4%.
That's a really good year, far above
average, showing that we're still in a
massive bull market. The concerns about
the tariffs have been erased. They've
been replaced by investor enthusiasm. We
saw the swing in live time. We saw
investors move from being very depressed
and very concerned about their portfolio
to now incredible levels of optimism.
And that optimism has concentrated even
greater into the big tech companies, the
Magnificent 7. Those companies are doing
particularly well, driving the QQQ up to
17.4% gains year to date. This is a
strong year. Having the markets go up 13
to 17% is very notable. While the market
continues to go up and companies get
more expensive, today I'll be
highlighting five companies that remain
cheap. These are companies that have not
kept up with this rally. they've been
left behind and I believe undeservedly
so. So, I'll be highlighting five
companies that are still buys in today's
market and haven't been swept up in this
bullishness. Now, of course, we have a
lot of other news to get to. The credit
market is becoming concerning for many
investors, particularly ones like Howard
Marx, citing that investors are making
poor deals leading to increased risk in
the credit market. We'll be looking at
that. EA Electronic Arts is going
private in a $55 billion LBO. That's a
leveraged buyout. This is the biggest
one ever and it's done primarily by
Saudi Arabia's public investment fund.
We'll be going over this news and what
it means for the future of these
companies, what it means for the video
game industry and microtransactions. We
have President Trump implementing his
favorite tool, which is tariffs. And
this is a renewed threat on the movie
industry, saying that any movie made
outside of the United States will be
faced with a 100% tariff. What does that
mean? How would a tariff even work for
movies? Now, finally, we have our fail
of the week, which is a woman that's
made a business out of charging people
to help name their baby. In this case,
she charges $30,000,
30 grand, to name your baby. Now, she's
not the fail of the week, but her
customers are. We'll explain why in this
episode. Now, we start things off today
by looking at five companies that are
still a great deal in this market. When
you have these returns like the S&P 500
surging up 13% year-to date, the QQQ
going up 17% year-to- date, investors
not only get more confident, but they
become even more bullish. Investors
start buying more, and that's what
causes stock prices to become inflated.
That's what causes big bare markets to
happen in the future. This rally is
twofold. It's not only that companies
are growing their earnings, but it's
also the case that multiples have been
expanding, meaning that many companies
are becoming more expensive today than
they have been over the past year or
even the past couple of years. We can
look at this visually illustrated with
this chart. The blue line on this chart
is the S&P 500's price toearnings ratio
on a forward-looking basis. So, this is
with analyst estimates of the future.
And what you can see is that generally
speaking since 2008, the S&P 500 has
become far more expensive. Now, I
believe that part of the reason is
justified. In fact, it was the case that
in 2008, things were just cheap because
the economy was in shambles. Investors
were really concerned. As investors
started to buy back up equities and
businesses and things started to
recover, the economy grew, equities
became a little bit more expensive. And
it's also the case that equities today
generate higher margins, more profits
than they did even 10 years ago. So the
companies that are successful today, the
ones that are the best companies are
higher quality companies deserving of a
higher multiple. So we've seen that
happen over the past decade. We've seen
companies go from the range of a 12
forward PE ratio, a 14 forward PE ratio,
now up into the 20s. But what we see
more recently is what I consider a bit
more concerning. We know that after
2020, we raced into 2021 with a lot of
exuberance and optimism. The S&P 500 as
a whole went up into the low 20s PE
ratio. The S&P 500 since 2021 into 2022,
even into early 2023, fell dramatically.
Many of the top companies fell even
more. Microsoft went to $220 per share.
Now it's above 500. Apple went down
close to $100 per share. Meta went down
to $80 per share. Now it's at $750.
Netflix went from $750 per share down to
below $200 per share. Now it's up to
$1,200 per share, 6xing the return from
the very lows in 2022. In fact, that
entire pink column that you can see
there highlights this epic sell-off that
happened as a result of excess
valuations. In fact, valuations are very
important in investing. It's one of the
most important indicators of returns.
It's not just good enough to buy
high-quality companies. We need to make
sure that most of our buys happen at
attractive valuations that we're
entering into these companies when they
offer us good deals. That's where
investors get the really good returns.
That's where you get things like Netflix
going from $200 to 12, Microsoft going
from $220 to 500, Spotify going from a
$20 billion market cap to a $100 billion
market cap. You buy during times where
multiples have compressed. What we see
overall in this chart is that blue line
went from a 23 Ford PE ratio all the way
down to a 16. The S&P 500 was selling at
a deal. Investors that bought during
those time periods were dramatically
rewarded for every share they bought.
But now we just follow what's happened.
It's been great to see a recovery. I've
seen many of my stocks go up incredibly
fast since 2022. Obviously, for me, the
biggest winner has been Netflix. That
was one of my top positions, and having
it go up that dramatically from the lows
was a massive turnaround. But it wasn't
the only winner. Many companies that I
own, whether it was Microsoft or Apple
or Google, many of them spurred up from
2022 in present day now to around a 22
to 23 price to earnings ratio on a
forward basis. And we're back at the
place of all-time high territory, back
to where prices were in 2021. We have
another chart that breaks this down not
just by the indicy, but now we have the
Magnificent 7. The Mag 7 trades at a
much more elevated price to earnings
than the rest of the market from a 22 to
around a 31 price to earnings ratio.
It's not the most expensive it's ever
been, but it's in the higher category.
Now, I'm not of the opinion that you
should try to time the market. That just
because valuations are high, you should
sell your investments. But I am of the
opinion that you should become more
cautious when everyone else is super
bullish, when everyone else is making a
lot of money in seemingly every company.
I still hold my investments. I'm still
buying stocks, but I'm doing so very
cautiously and deliberately. And I'm
focusing my buys on companies that I
still think are at very reasonable
valuations. And I'll highlight five of
them I believe are worth strong
consideration. Two of them are in my
portfolio, three of them are not. The
first one is a company that's in my
financial category. This is one that's
had a recent sell-off. It's S&P Global,
and I own this one across both
portfolios. The stock price is now below
$500 per share. When we look at some of
the metrics here, it trades at a 27 Ford
PE, 25 based off of 2026's earnings. And
the free cash flow yield is a healthy
3.6%.
Even adjusting for the stockbased comp,
which it's not that much because it's a
highly efficient business, it's still at
a 3.4% yield. We can put this in
perspective looking at the historical
valuation of this company. Here's the
trailing price to earnings of the
company. Now, obviously, if you could
have bought it in 2022, that would have
been the cheapest point to buy it, but
that's the case for nearly every
company. Today, at a trailing 37PE
ratio, this is one of the lowest
valuations this company has traded at.
And it's true that it can continue to go
down in valuation, but the company has
also become stronger over these years.
S&P Global is a tremendously powerful,
diversified, wide remote company.
They're growing revenue steadily, 10 to
11% per year. Their earnings per share
growing to the peak in 2021 despite not
having the same active market to
participate in. This shows the strength
of this company overall. The free cash
flow continues to grow near all-time
highs. In the most recent quarters,
they're generating in excess of $5
billion in free cash flow. They're
projecting for that to go up over time
as well. And despite that, the stock is
in the red year to date. It's completely
given up all of its gains. It did so
because another company called Faxet,
which sells market data, did not do
well. While the Swan is not a complete
steal, it's not one of the cheapest
companies in the market, it represents a
diversified, high-quality company that's
trading at a reasonable price that
hasn't followed with the surge in
enthusiasm that the rest of the market
has this year, and I believe this is a
good entry price. Now, the next stock
that's in my portfolio is one that I've
been beating the drum on for a while
now, and I'll mention it again. This is
one that I still believe is a buy, which
is Amazon. Now, I have a big position in
Amazon, $134,000
with $41,000 in the green. I bought a
lot of the company in 2022 when there's
the big sell-off. I've gone over
Amazon's bullcase extensively,
highlighting five points of I think this
one will be a secular compounder in the
future that investors will regret not
owning if they don't already own it. But
in this case, I want to highlight Amazon
just in terms of the valuation. When we
look at the company overall, it's made
no gains in 2025. Nothing. Amazon is
completely flat from the beginning of
the year. On a five-year basis, over the
past five years, this company's only up
40%. If we look at just the past 5
years, Amazon's revenue has gone from
$347 billion to $670. The revenue has
doubled, while the 5-year return has
only been 40%. AWS has gone from $50
billion in customer commitments to $195
billion. So AWS's contractual revenue
has 4xed over the past five years and
again the stock is up 40%. There's been
a lot of other notable advancements in
this company. We can take a look back in
2019 and 2020. The free cash flow is
higher then than it is today. But Amazon
has proven that it has the ability to
have explosive growth in their free cash
flow going from minus $30 billion to
plus 48 billion in a single year. That
is a $70 billion free cash flow swing in
a time period of 12 to 15 months. And we
can see that explosive nature in the
earnings per share in the net income of
the company. In 2022, the earnings per
share were $1 per share. Now they're
nearing $7 per share. This is an
incredible company. Meanwhile, the price
to earnings ratio of the company has
continually declined. Now it's near the
cheapest it's ever been at a mid30s PE
ratio. Amazon is another stock that has
not been caught up in this bull market
and it's worthy of looking at. Now,
finally, we move on to one that I don't
own. This one's Adobe. Adobe is a
company that a lot of investors,
including me, have been concerned about
primarily because of the competitive
landscape. First of all, we have stuff
like Google's Gemini Nano Banana. A
silly name, but an incredibly powerful
image editing tool. You can basically
just type in anything, hit enter, and
this image editing tool will do it for
you. It'll change the fruits in a bowl
and it will make it look real. Well, if
you have this power just by text prompts
in Google, why do you need Adobe's
Photoshop? We also have other
competitors that have caused investors
concern. Ones like Canva. Canvas's web
browser based while Adobe is still
primarily desktopbased, meaning that
Canva has that nice feel of just opening
up a website and being able to easily
manipulate different things on the page.
In fact, Canva is incredibly
userfriendly. It's very easy to learn.
It's very intuitive. They can make
updates really quick with Canva. And
this has caused rapid user adoption.
Canva's growth has been exponential,
going from a 100 million users in 2021
to now 170 million users. And it's
difficult to believe that part of these
users weren't previously Adobe Photoshop
users. So, we see these metrics of other
companies that are competitors to Adobe
growing so quickly in the area of video
and photo editing. We compare that to
Adobe and it causes concern. Add on to
that that Adobe has this cloud above it
of being a company that seems a little
older or outdated, a little stodgy. Even
their billing practices of annual
lockins with monthly billing seems a
little out ofd. People don't generally
like it. So when we're looking at Adobe,
we're looking at a hated stock, a
company that is out of favor. Nobody
wants to own it. And we can see that in
the share price. Adobee's down 18%
year-to- date. In the past 5 years, it's
down 26%. When we look at the
fundamentals of the company, that tells
a different story. From 2014, 2015
onwards, it's grown at this steady,
gradual clip. Every single year, Adobe
just continues to grow its revenue at a
decent pace around 10 to 11%. In fact,
even looking at this in the past couple
of years on a quarterly basis, so this
isn't the trailing 12 months. We're just
looking at a quarterly basis, it grew at
10.72%.
This is incredibly resilient and
consistent revenue growth by this
company with seemingly no end in sight.
The profitability of the company is
increasing significantly. In fact, it's
grown its earnings at a rapid pace
because the stock price is so cheap
while management obliterates their share
count. Management has indicated that
they're loving this deal on their own
stock. They love it and they can't get
enough of it. They're buying back their
own stock handover fist. They reduced
the share count by 4% year-over-year
last quarter. When you reduce the share
count that fast, you grow the earnings
per share, you grow the free cash flow
per share, you grow every per share
metric. So Adobee's using this sell-off
as an opportunity to buy back
aggressively. If we look at the
increases in their share buybacks, we
can see this just over the past 10
years. This is the total amount that
they're repurchasing in common stock.
Going from about 5 billion a year, 8
billion a year, now up to repurchasing
12 billion of stock per year. They are
buying back stock every single day as
much as they can. As the valuation
falls, Adobe buys back more. The PE
ratio has been cut from a 40 trailing PE
now to a 22. The free cash flow yield
has gone from a 2.87 now to a six. The
price to sales of the company have gone
from an 11.26 down to a 7. And while
there's many risks to every investment,
Adobe is actually showing that many of
the so-called risks for this company are
actually a benefit. In fact, one of the
things that investors are concerned
about is a declining customer base due
to competitors like Figma and Canva and
Gemini's Nano Banana is not really
showing up in any of these metrics.
Again, Adobe themselves has said that
they have a strong customer base and
expanding user segments. Adobe serves a
diverse and growing customer base. A
growing customer base spanning business
professionals, consumers, creative and
marketing professionals, small
businesses, and large enterprises.
Strategic focus on enabling the next
generation of creators and business pros
through accessible price points. PLG
motion expands the total addressable
market. So Adobe themselves are saying
our customer base isn't shrinking. In
fact, it's doing just the opposite.
We're getting into more segments and
we're getting more customers. At a 15p
ratio and a 6% free cash flow yield,
this company is uniquely cheap in an
expensive market. Most companies of this
type of caliber, you're having a tough
time finding them below a 30p ratio. And
here Adobe is trading at roughly half
the price. Next up, we have a company
that's not one I typically talk about.
This one's named Constellation Software.
This is a traditional compounding
machine that many investors have
gravitated to over the years and it's
going through a sell-off. Constellation
is down 17% year-to date. Over the past
5 years, it's up 150%. That's still
market beating of both the S&P 500 and
QQQ. Then we have over the past 10 years
a staggering 560% return. The business
model of Constellation Software is
highly unique. They basically are a
capital allocator driven by just a
couple people that acquire these small
highly niche software companies and then
they let them operate under their
guidance where they implement best
practices and standards across the
board. You can look at some graphics
that just show the sheer volume of
companies that they have and it's
incredible. There's thousands of these
small software companies that they have
control over and implement best
practices for and they've perfected a
recipe of doing this consistently and
repeatedly. And there's a lot to like
about this company. For example, there's
consistent revenue growth of around 16%.
It's one of the faster growing companies
in the market. It's consistently
profitable and consistently growing its
free cash flow. The free cash flow per
share also grows near 20%
year-over-year. In a market where
everything is going up, Constellation
Softwares is not one of those companies,
and it's one worth looking at. Finally,
we get to another company that's been a
compounding machine for a long period of
time. This one routinely shows up on the
super investor charts. It's a company
that many investors in the compounding
circles talk about because of the niche
focus of this company and the ability to
continually grow earnings throughout any
environment. The company's called
Copart. Copart stock price is down 20%
year-to date. So massive
underperformance from the index this
year. Over the past 5 years, the stock
has also underperformed because of this
recent sell-off. The stock has gone from
a recent price of $63 per share now down
to 44. So, a huge sell-off, but over the
past decade, it paints another picture.
The stock is up nearly 1,000% over the
past 10 years, showing that this
sell-off is more of a recent event. Now,
Copart is another very niche business.
They have a global online auction
platform for salvaged, used, or damaged
vehicles. So, they basically own a lot
of land. They take care of a lot of
salvaged vehicles. They have bidding on
it. They have service fees attached to
it. They have all these other revenue
streams associated with it like
logistics and storage and title work and
they are the biggest in this category by
far. They leverage their huge network
effects with insure relationships to
secure constant supply of inventory. So
this company has carved out a nice area
where it can continually grow its
earnings and its cash flows. And the
valuation has plummeted from its
normally 35 to 40 trailing PE ratio down
to the territory where it's getting
close to where it was in 2022. Another
little nice part of this company, one
little gym in it, is that they're so
good at all this auctioning, all this
title work, that they've actually
invested in and created their own unique
software. It's proprietary, and it's
basically how to run this entire
company. This software is an investment
that other companies would have to make
to even compete with Copart. They've
been investing in it for years. They've
designed it specifically for the
business that they run where no other
plug-and-play software will really be
adequate. So, it's another bit of a moat
on top of an already significant moat.
If you're looking for a high-quality
company to potentially jump into when
it's down 20% year-to date, this is one
to do so with. Now that we've looked at
five companies worthy of buying today,
we can take a look at the macro picture.
The Wall Street Journal just had a
report out today that the credit market
is humming and it's causing some Wall
Street veterans, even ones like Howard
Marks, to become nervous about this
market. They say that investors are
gobbling up corporate debt like it's
going out of style, even though the
rewards by some measures are lower than
they've been in decades. The frothy mood
has some on Wall Street worried that the
market is priced for perfection and ripe
for a fall. They say that that is why
any bad news is touching a nerve and
raising the question of whether
something more profound is ailing
American borrowers. Two sudden
bankruptcies in the auto world, a
subprime lender and a part supplier have
triggered those conversations among bond
investors and analysts. So, right now,
things are going so good in the debt
market. People are flush with cash.
They're buying debt and they're not
really looking as close at the terms.
Similar to what we've been talking
about, investors start to become a
little bit more relaxed when stocks go
up and things seem like they're good and
they make worse deals. So, we have two
sudden bankruptcies making investors
rethink all of these things that they're
purchasing. They say so far there's been
no sign of a wider fallout. And each of
those situations had unique
characteristics that don't point to a
broader trend. But combined with other
challenges such as persistent inflation,
rising defaults on hot Wall Street
segments known as private credit, it is
enough to give longtime traders a pause.
quote, "There's been a very positive
investment environment for a long time
with a large amount of money and a lot
of optimism." This is from Howard Marx.
Now, Howard Marx loves this next
sentence. It's a phrase that he's used
over and over and over again. If you
followed him for years, you'll know that
he's used it for years. He says, quote,
"The worst loans are made at the best of
times." And he'll also say, inversely,
the best loans are made at the worst of
times. High yield bond analysts at
Barlade compared the current situation
with valuations so high and signs of
stress emerging to being in a Star Wars
garbage shoot with Princess Leia and Han
Solo. Quote, "The walls are compressing
on all sides. Ultimately, the fate of
this market could depend on the
direction of the economy. Some investors
note that the current benign environment
could continue if inflation pressures
ease and if there's no further
deterioration in the labor market. So
basically these bad loans and these bad
investments can work out still to a
positive if things go really well with
the economy and there is reason to
believe that things may just go well
with the economy. The economist Jeremy
Seagull believes that things are going
to continue to go well with this economy
and yesterday strong strong economic
data. I think that uh both on the trade
deficit going down and on the durable
goods report and I think all forecasters
have now raised their GDP estimates for
the third quarter. So with tame
inflation stronger uh real growth I mean
that these are all good signs for the
stock market.
He says inflation is tame that inflation
continues to stay relatively low and now
we're actually getting GDP revised
upwards. Investors and analysts are
expecting higher GDP, not lower, which
is exactly what we need for this good
scenario to play out, for these loans to
not go belly up. Now, while Jeremy
Seagull believes that things are better
than they look, inflation is actually
under control and GDP is going higher,
we have people like Michael Senfield
talking about how the ultra rich are
actually pulling back. They're pulling
away from risk assets like stocks and
real estate.
But for the first time, cash is coming
up a little, fixed income is coming up a
little. So, a little bit of a shift,
maybe a little bit of caution.
As the market goes up, the ultra rich
sell, they take their gains, and they
try to preserve their capital. He also
notes that this is a different type of
investing strategy than people trying to
earn money and compound wealth. They're
looking to preserve wealth first and
foremost and grow it secondly. So, this
the growth part is less important than
preserving what they have. That's a good
rule. If you can keep what you have, you
you'll do pretty well. While we shoot
for returns of maybe 10 to 15% per year,
they may be shooting for returns of 3 to
7% per year, just enough to beat out
inflation and preserve their wealth.
Now, moving on, we can get to some news
here. The big headline of the day is
that EA Electric Arts is officially
going private. The video game maker said
it would go private in a $55 billion
deal with a group of investors including
Saudi Arabia's public investment fund,
private equity firm Silver Lake, and
Jared Kushner's investment firm Affinity
Partners. So, you have a bit of a
hodgepodge there of big-time investors.
The biggest one is Saudi Arabia's public
investment fund. If you haven't been
keeping track, Saudi Arabia has been
trying to take specific assets from the
United States for a long period of time.
They did so with golf. They started Live
Golf, which competes with the PGA Tour.
They used immense amounts of wealth and
huge offers to buy out many of the top
golf players to compete in their league,
transferring a lot of the attention away
from the PGA Tour. And it seems like
they still have strong ambitions in
games and in sports. Saudi Arabia is the
one that's leading this purchase. And
this deal represents the largest
leverage buyout of all time. Now, a
leverage buyout just means that they're
using a ton of debt in order to complete
this transaction. My history of just
looking just looking at leverage
buyouts, immediately my thoughts go
negative. Whenever I see LBO, a leverage
buyout, I just immediately believe this
is bad news. We had the leverage buyout
of Caesar's Entertainment in Vegas. It
simply took on too much debt. And even
though Caesars in Vegas was profitable,
they couldn't service all the debt. The
debt amplified the risk in the deal
causing Caesars to go bankrupt. We have
other examples like Toys R Us. That was
another company that probably could
exist today without the leverage buyout
nature. The leverage again amplified the
risk causing the company to go bankrupt.
You have J Crew and Chrysler and so many
other examples. And although there are
examples of it working out okay, there's
some examples of it doing well, there's
many examples of this type of thing not
working. Another problem I I see with
this deal is the video game industry
already has a scourge. It's already
plagued by one thing, which is
microtransactions,
where when you pay $50 to buy a game or
$30 or $80 to buy a game, you're not
done buying it. Once you get into the
game, you have to keep buying the game
to be able to continue enjoying the
game. And that is through
microtransactions.
You buy the game once and then you have
season passes, you have skins, you have
uh new unlocks and weapons and vehicles
or whatever it may be. In some cases, to
even be able to compete in the game, to
be able to play it to its fullest
extent, you have to keep dishing up
money in more and more
microtransactions.
And these companies do this, of course,
to generate more revenue. They generate
more revenue because the video game
industry is a very difficult industry to
begin with. Now, think of that type of
problem of microtransactions
while having increased leverage on these
companies. If you believe that
microtransactions were a problem that
existed in the video game industry,
especially with EA games before the LBO,
you better believe that problem is going
to become dramatically worse after this
leverage buyout. The heavy debt load
that happens from these buyouts will put
further pressure on these companies to
monetize and monetize. They'll need
billions of additional revenue every
single year to just cover the interest
payments alone. Not just to get to where
they were before, but just to make up
the difference. So, I don't consider
this good news. I I don't think it's
good news for the video game industry.
Maybe I'll be proven wrong. Hopefully,
I'll be proven wrong. But right now, I
don't like this development. Now, next
up, we have news that President Trump is
renewing one of his threats. And this
time, it's another tariff, another big
number, 100% tariffs against any movie
made outside of the United States. He
says, quote, "Our movie making business
has been stolen from the United States
of America by other companies, just like
stealing candy from a baby." Trump
hasn't provided specific details on this
tariff. He's just argued that foreign
countries have undermined the US film
industry by tax incentives to get
Hollywood production to shoot overseas.
Now, we don't know how this would even
work. For example, if Netflix makes a
movie out of South Korea with a South
Korean production company, does that
fall under the tariff? Is it only a
movie that's filmed both within the
United States and outside? So, there's a
lot that we don't know from this news.
So far, Netflix seems to be shrugging it
off until we get further details. Now,
moving on, we finally get to the fail of
the week. In this case, it's an article
here. This is the headline of the
article. Meet the San Francisco woman
that charges $30,000 to name your baby.
Now, we get into some backstory here of
how she actually made this into a
business. Humphrey didn't set out to
build a luxury baby naming enterprise
when she started posting online a decade
ago about her baby naming obsession. She
was just hoping for a distraction from
one of her life's bleakest periods. The
37year-old Humphrey now has 100,000
combined followers on Tik Tok and
Instagram and an everexpanding portfolio
of more than 500 children's names that
she helped select. Her best spoke naming
service costs up to $30,000. Now, it
highlights that finding the perfect name
for a baby can often feel like high
stakes exercise in baby branding. So,
they're starting to act like babies are
like babies are are companies. It's like
a startup tech company or some company
you're starting and you need to brand
that baby for success. Humphrey is one
of a dozen or so professional baby
naming consultants nationwide whose
full-time job is to guide expectant
parents along their naming journey. See
the way that you can term anything
however you want. You can brand anything
however you want. Uh it's not just
giving a baby a name. Now it's a baby
branding and your baby naming journey.
She's also believed to be the only one
in the Bay Area where affluence and an
innovative ethos makes it one of the
niche industry's top markets. For some
moneyed parents, choosing a name is no
different than selecting a kitchen
backsplash. It's personal, yes, but best
outsourced to a pro. Humphrey's
clientele tends to span everyone from
high-profile celebrities to anonymously
rich, regardless of the intricacies of
their naming needs. This is real. I'm
not making up these sentences. I promise
you, uh, this is not satire. It
literally said, regardless of the
intricacies of their naming needs, now
to give a a child a name, it's
intricate. Uh, you have to have an
intricate experience doing so. If you
just want an email with some
personalized baby name recommendations,
that's $200. Need something far more
in-depth? Any higherend services which
start at $10,000 amount to VIP
treatment. Add-on features include baby
name branding campaigns, a genealogical
investigation designed to figure out old
family names, and even think tank to
discuss the top naming options. As
Humphrey notes on her official website,
the only limits are your own
imagination. Now, when I look at
articles like this, I don't use the term
grift that often. In fact, if you look
at my previous history, I rarely use the
term grift. And I personally believe
it's one of the most overused words
online today. People calling everything
where anybody makes any money a grift.
But in this case, I think that it
accurately defines what's going on here.
This feels a lot like a grift. having a
branding campaign for a baby, charging
$30,000 for VIP services to brainstorm
and think tank a baby, labeling it as
your baby naming journey, saying that
it's like picking out a backsplash for
your home. This is the level that we've
got to, and this is the problem that
many rich people face. When people get a
certain amount of wealth, when they they
get up into the upper echelons of
wealth, they start to distance
themselves from doing anything
themselves to the point where they just
take an executive role in every part of
their life, in every single part of
their life. When it comes to spending
time with your family, well, you can't
just spend time with your family when
you travel on vacations. You have to
have an assistant that makes the
itinerary for you. You have to have
helpers that take care of your children
for you while on vacation. So, no longer
are you spending time with your family.
Now you have assistants and executives
planning your vacations and taking care
of your kids while you go off and spend
time by yourself. They don't mow their
yards. They have yard care takers to do
that. They don't clean their dishes.
They have cleaning services to do that.
They don't cook their food. They have
cooks to do that for them. When you get
that wealthy, you get into the rhythm of
just paying someone else to do
everything for you. And we're seeing
that trend continue until we get to the
point of people actually paying $30,000
to have someone else think of names for
your baby. This literally is the least
amount of work possible, but yet they'll
pay to do it. So, the fail of the week
is not Taylor Humphrey. After all, she's
just taking advantage of this extreme
desire of wealthy people to outsource
every part of their life to someone
else. to have everyone else decide every
aspect of what they're doing. The fail
of the week is the customers, the ones
paying $30,000 to have someone else pick
out a name for your child. In fact, I
would go as far to say that if you're
paying someone else $30,000 to pick out
the name of your own child, that is not
only a failure, it's dishonorable.
You're bringing dishonor to your family
line. You and your spouse should be
picking out the name of your baby. Not a
consultant, not a PR firm, not a
branding expert. So, the customers of
this business are the failure of the
week. That's going to be it for this
episode.