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you're listening to an air wave media

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this podcast because he crushes your dreams getting

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the investing for beginners podcast,

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by step for

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beginners your path to financial

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freedom darth malgus

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right folks welcome to investing

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for beginners podcast tonight we have

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episode two hundred and thirty three it's

0:43

we're going to answer three great list

0:45

or questions without recently and

0:47

so without further ado i'll go ahead and

0:49

read first question in an error and i will

0:51

do our little usual given take for yes

0:53

so he has he dies i'll be

0:55

taking on some extra summertime work

0:57

and i'm wondering what the best place to put

0:59

that is have already got about three

1:01

times monthly expenses and savings

1:03

are putting money automatically in my four

1:06

o one k i have credit card or

1:08

car loan and student loans i

1:10

opened my first brokerage account and invested

1:12

my first index funds should i

1:14

try to get to the max roth ira

1:16

amount for the years to invest or

1:18

work in paying off loans i

1:20

already have plans take part of each of my regular

1:22

daytime paychecks and put into

1:24

wrath of just not sure what to do with

1:26

some of the extra income for couple months thank

1:29

you i appreciate all your help and advice

1:31

for your podcast and postings

1:33

madison so eager what your thoughts on medicines

1:35

great question well first off congrats

1:38

sounds like you're kill it deserves every

1:40

promised or haven't sounds like working

1:42

hard and really

1:44

working to improve yourself so that's

1:46

fantastic ago you

1:49

know lot people have different

1:51

opinions on what do with how

1:53

you prioritize extra money

1:55

and the at certain point

1:57

was wonder if it's who

2:00

counterproductive to try to get to queue

2:02

with some of that stuff you know

2:04

for a summer job so as me

2:06

the now is back to my young rebellious

2:09

south i definitely wanna

2:11

enjoy some of that you know by are

2:13

obviously have some that you on the

2:16

way in and do responsibly with to

2:18

i know people will say oh yeah the pay off

2:20

all your that and i get that and there is

2:23

value in working

2:25

towards paying off debt but if it's really

2:27

i don't see somebody paying off a student loans

2:29

from summer job or unless

2:31

you like the best

2:34

still loan deal with ever seen so

2:37

you know i am always big proponent of

2:39

how's that investing have

2:42

it in place meetings are you paying

2:44

yourself first the whatever

2:46

that dollar amount means to you are

2:48

you committing to doing that every month

2:50

when i recommend for people who have

2:53

started their careers and are kind of work in their

2:55

everyday life is to start at one hundred

2:57

and fifty dollars a month and as

2:59

use that as a

3:02

nasty habits it so that you're in the

3:04

market and you have that

3:06

have it in place which you can keep for

3:08

a long period of time it's really the consistency

3:11

and it's really about your behavior more

3:13

so than it is about the numbers in

3:15

my opinion and and just based

3:17

on my own experience in way i cannot live my life

3:19

pretty mostly to sometimes smells younger

3:22

so i would do what is

3:24

best for your behavior whatever that

3:26

will be the i think that's more

3:28

important than the numbers especially

3:31

because we're talking about something us three

3:33

months and length and not like

3:35

your next five year plan kind of a thanks

3:37

yeah that's great advice and i would agree

3:39

that having a plan and

3:41

following their plan is great idea and

3:44

enters idea about setting behaviors

3:46

especially as you're on the younger

3:49

side and can start to

3:51

the set those for a long

3:53

period of time disagree foundation to

3:55

build front of that's fantastic

3:57

advice and that's something

3:59

that i my younger self had heard

4:01

for sure because it would put myself

4:04

in a better position as these are some

4:06

things that i are in the waiter on and why so

4:08

i would doesn't see what the some the things that

4:10

andor was saying if you want to look at

4:12

the numbers part of it something

4:14

that has always kind of stuff in

4:16

my head was when was working in

4:18

the bank world i had a mortgage

4:21

banker talk to be one time because

4:23

he heard a customer talking to be

4:25

about kind of the same kind idea i have

4:28

money i don't know whether i should

4:30

invest it or if or if pay off some

4:33

debt and something that he

4:35

recommended to me after hearing

4:37

this conversation was

4:39

something that he was taught by a

4:41

private bankers was that

4:43

the work out what kind

4:45

of return you can get versus

4:47

the interest , you're paying

4:50

on your debt so for mortgages generally

4:53

tend to be a lower interest rates so

4:55

it's a little bit easier to make a decision in

4:57

that circumstance because you can

4:59

earn without a lot of effort you

5:01

can earn decent returns in a

5:03

market buying indexes in the t

5:05

s yeah on consistent basis

5:07

but the flip side of that is

5:09

that if you're trying to pay off a credit

5:12

card at twenty percent than

5:14

trying to beat to that hurdle in market

5:16

is it's a lot bigger a challenge challenge

5:19

know the professionals struggle to do that and

5:21

so somebody that would just be starting

5:23

out would be challenge and so his advice

5:26

would be to if you had extra

5:28

money as you want to put a good use and

5:30

a short term would be to maybe

5:32

we'll get a paying down your credit card debt because

5:34

that would be would in

5:36

theory would be at the higher interest rate of the

5:38

three that you're talking about if you're

5:40

talking about a mortgage then

5:42

you're working at depending on what your rate is

5:44

to four percent you could make more

5:46

money by putting that extra money in the

5:48

market because you can earn a greater

5:50

return that would offset

5:53

paying offset the student or the mortgage faster

5:55

for example so those are just i

5:57

guess some generalities of somebody

6:00

is that some people have suggested

6:02

to me that's something that kind of like to keep

6:04

in mind as well and if

6:06

you are looking at paying down debt says

6:09

as general rule i think it's better

6:11

to look at the ones that have higher interest

6:13

rates so say you have to credit cards and

6:15

one as twenty percent the other ones fifteen percent

6:18

past twenty percent faster than

6:20

fifteen percent because as can save your money

6:22

in long runs by sounds like mass

6:24

and has a good plan in his

6:27

got a great had on their shoulders and

6:29

has really started moving in right direction

6:31

as i would definitely suggest listening to what

6:33

andrew said and think you

6:35

know if you're younger have some fun i mean

6:37

life is short and you should have some

6:39

fun and easy to get little extra money take

6:42

trip or go someplace

6:44

or do something fun with cel friends

6:46

are significant other or family and

6:48

enjoy yourself because sometimes

6:50

focusing only on the money can we

6:52

do to not enjoying yourself

6:54

and we're all here to enjoy ourselves as

6:57

much as we can enjoy them that

6:59

an avid parker was real myself today

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awesome interviews with gas the the for the price the

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defense ideas and and the energy and

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us to podcast by now you've probably

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into into ira is for and ira

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how know companies the and know companies

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is to stock text to if dynamics

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stitcher we ira capital google

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the text by defense affirm ira com how

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raytheon our for into beginners we apple

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to stock for for we google investing our text price

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insight one spotify we google investing our

9:03

text for for move on the next

9:06

question then got nothing else really that

9:08

are , this one is from

9:12

nate he says i wonder

9:14

what guys think about the sand sector

9:16

and thus seen both with long haul

9:18

the and what's going on currently have

9:20

a subscriber to the safe the research a leather

9:22

which has previously bought some of that and

9:24

i'm holding some others like lockheed and

9:26

raytheon raytheon saw

9:28

basically everything about sector jump in

9:30

price the day after the latest hostels

9:33

hostels is that good sell

9:35

or are these companies just more valuable

9:38

as anything special we as investors

9:40

need consider when looking at defense company

9:42

thanks mate well that's a very interesting

9:45

question and as a defense sector

9:47

is something that i've briefly looked at

9:49

i know andrew as much better insights

9:51

as defense sector other than i do but

9:54

think overall i would say that

9:56

the defense sector is is

9:59

strong it

10:00

history it tends to be undervalued

10:03

, a general rule and

10:05

is something that is not going

10:07

away and i do remember

10:09

that these contracts that these companies

10:11

were generating were pretty

10:14

big and pretty substantial and we're gonna

10:16

only continue to increase

10:18

and as even though the country

10:21

politically baby encouraging

10:23

us to downsize some of what's

10:25

going on as his baby and not

10:27

having as many soldiers are footsoldiers

10:30

but technology is improving and

10:32

that's something that were deathly scene was going

10:34

on in the unfortunate situation in ukraine

10:37

is that the ability for

10:39

the footsoldiers to inflict

10:41

lot more damage based on the technology

10:43

that are using is far greater than

10:45

it was five ten fifteen years ago and

10:48

so it looks like it has to even out things and battlefield

10:50

self all that to say the

10:52

money this gonna be spent on defense is

10:55

as sick as only than increase and everything

10:57

that sometimes doesn't it we saw

10:59

something that i noticed was that

11:01

a lot of these defense contractors

11:03

are also involved in the space industries

11:06

and so it satellites for

11:08

example as we increase

11:10

more of the technology we're going to eat more satellite

11:12

and better satellites and as going just

11:14

continue to evolve and

11:17

then there's the whole issue of this air

11:19

quotes space race between the

11:21

a spacex and blue origin

11:23

and you're all the other players these companies

11:25

are directly involved in lot that stuff as well

11:28

have tried to go to moon trying go mars and

11:30

some the other projects with working on so

11:32

there's definitely a lot of moving

11:34

parts and lot of things going on and defenses

11:37

the streets kind of beyond just the

11:39

airplanes and battleships for example

11:41

so i would be more curious to hear what and restart

11:43

on the defense industry are sounds

11:45

like you read my letter se of us as

11:48

i sir oh he did did

11:51

yeah we bought northrop grumman back

11:53

and say very twenty twenty one and

11:56

i'm still holding and the reason why of so

11:58

holdings because of believe it's still the undervalued

12:01

potentially or potentially fairly valued

12:03

at one of the things i would the

12:06

highly recommend if you're kind skeptical

12:08

on investments in defense

12:10

is if you look at the long term

12:12

government spending trans on defense

12:15

you'll see it's cyclical which is very

12:18

similar though a lot of other things we see in economy

12:20

things cycle up and down and

12:22

, defense spending is the

12:24

same way and so what since

12:26

seen as historically over

12:28

decades it's been around

12:30

for percent year growth

12:32

for defense spending the last ten

12:34

years it's been less than one

12:36

percent than year and growth the

12:39

you have to ask yourself is the human race

12:41

just that much better and more

12:43

peaceful and more socially

12:46

and behave really advanced that

12:49

we don't the defense spending any more or

12:52

is this one of those down cycles

12:54

i could cycle back up so

12:57

you know obviously you can't just always

12:59

simplify it's a safe and industries growing

13:01

than the stocks in that industry are good

13:03

investments that these are very well

13:05

run companies particularly the one that

13:07

we own they buyback lot of stock

13:09

they're not trying to go aggressive

13:11

crazy and and try take over the world anything

13:14

like that so they're providing good

13:16

returns for investors and

13:18

until that changes don't

13:21

see it as a cell because there's a reason

13:23

to believe that the growth could be even greater

13:26

that has bad and even of where he had

13:29

been like if that defense spending

13:31

the had stayed the same it was still

13:33

a great value at that time so that's

13:35

why did try to look for these kind margin of safety

13:37

companies where they somewhere there

13:40

at know it's a good value

13:42

to buy the stocks but things

13:44

could improve and epic could become an even

13:46

greater value and you really wanna

13:48

hold through those periods to be

13:50

able to let those things play

13:52

out as a lot the things are are really long

13:54

term and so our something something

13:57

early on the site you can be right

13:59

but you could be so wrong if you sell too soon

14:01

because yeah you may have made sixty

14:03

percent on on the sox but was he

14:05

doesn't know how much you made and

14:08

it really hurts to be right on an idea

14:10

and wrong when you thought sixty

14:12

percent was a great return when

14:14

you can have earned two hundred percent or more that

14:16

hurts yeah that would hurt for sure so

14:19

i guess a couple questions i can i have about

14:21

defense industry just as the kind

14:23

of general rule the

14:26

kind of way that they generate revenue is

14:28

from these contracts that there givens

14:31

and those com from the appropriations

14:33

from congress correct supposed

14:38

get started and demanding download

14:40

andrea

14:42

at dot market d dot

14:44

com

14:47

a defensive the either

14:49

they're generally the longer

14:52

term contracts if i'm correct so

14:55

you can look at

14:57

one i guess it would be an accounting

14:59

term but it's something and than the company's financials

15:01

was called back log and

15:03

so not lot of businesses

15:05

necessarily deal with backlog but for something

15:08

that says contracts like the fence

15:10

they do a backlog so you can look and

15:12

you can kind of see how ,

15:14

revenue a defense company is going

15:16

to make and the next several years

15:18

based on what their backlog is because

15:21

even if they have they they don't

15:23

get out for court those revenues until they

15:25

actually perform the services rights

15:27

so as a backlog join our huge

15:30

the they're growing and

15:32

there's plenty of work to be done right so

15:34

so it is a very defensive

15:37

panels defensive in sense of like he said

15:39

the know what's gonna happen because

15:41

they'll muskets projected in the backlogs

15:45

yeah totally does so the thing that

15:47

took away from looking at the company's was

15:49

stay are gonna be the fastest growers in

15:51

world by any stretch his imagination but

15:54

you're also have a predictability

15:56

of the revenues over longer

15:58

period time because that back log and

16:00

as one of the things that makes them i

16:03

guess safer place you will and

16:05

it made me feel like if i was gonna

16:08

invest in these companies that that

16:10

these would be stable companies

16:12

as far as performance of the

16:14

business skills stock prices stock

16:16

prices that's going to do was gonna do

16:18

but still performance as a company yell

16:20

eventually in like it's the long run it

16:22

is going to impact the returned you make i

16:24

think another thing to point out is they

16:26

are very strong capital the

16:28

returners in the fact that

16:30

they pay strong dividends and they say they

16:33

do a lot buybacks as well correct cs

16:36

and yeah the are things i thought was kind of interesting

16:38

to was that the even no one

16:40

of the companies they all kind of they're

16:42

competing but they also are

16:45

working side by side so

16:47

because the f thirty five sets

16:50

the they have some one copy like

16:52

raytheon makes apart from the plane and

16:54

lockheed make supper for the plane and northrop

16:56

grumman mix our for the plane

16:58

so it's not just one company that's

17:01

making these a lot these weapons

17:03

is that correct

17:04

yeah so else for that three size

17:06

lockheeds plane the northrop's collaborating

17:09

with them on that raised in big way

17:11

and that's how the something as into

17:13

seem to about these companies

17:16

is that the government needs

17:18

a healthy market place to be able to has

17:20

fair bets on these contracts

17:22

right so sits highly

17:25

highly highly unlikely that was

17:27

companies it's a man and swallow

17:30

all the rest ray that us see

17:32

how that's ever gonna fly and

17:34

so you don't have to be number one

17:36

per se the have to be strong

17:38

and stay in in

17:40

your lane center that idea that

17:42

i've talked about several times over

17:44

the past several months so

17:47

yeah it is very interesting because

17:49

they'll have to worry about amazon coming in and and like

17:51

going cut through on their business because

17:54

there's not could be defense company that can stay

17:57

number one forever for act as

17:59

not in anybody's

18:00

that's interesting yeah yeah for

18:02

sure so there is one industry that has

18:04

appears that amazon's not gonna try to disrupt

18:06

this is a sister has access to that

18:09

, versus this one one

18:11

say never though right through a through

18:15

the i never say never suffer a major

18:18

phases did we the company so could do blue

18:20

origin so could guess he gets a seat he

18:23

did he decided he didn't want take that on

18:25

as amazon anyway breasts

18:27

are it's more move on to the

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eugenics dot com backslash turn hi

19:41

thanks for the very helpful info on the site

19:43

i am struggling with how to assign a premium

19:45

for company growing at faster rate

19:48

than another but having the same margins

19:50

and for argument's sake similar risk characteristics

19:53

so take karbala cb

19:55

and a who's priced sales

19:57

is zero point four six with the

19:59

growth us fifty five percent versus

20:01

affirm a fr m whose

20:04

price to sales is five point for with

20:06

growth sixty percent how

20:08

would you assess the to from pricing

20:10

vantage point and this is from neal

20:12

is a interesting question would you like to

20:15

chat little bit about numbers or would you like

20:17

me to talk about affirm

20:19

and particular first on our love

20:22

to grab some popcorn and hear you

20:24

talk about affirm because know feel very strongly

20:26

very strongly real quick before and

20:28

it i'll just

20:30

quickly talk about price the sales so

20:32

that's just looking up the price of the stock

20:34

compared to how much sales it generates

20:37

purser so ,

20:40

i'm just going to make these numbers up if a from is

20:42

like three billion dollar company and

20:44

they make one billion dollars

20:46

in sales that would be a price to sales of

20:49

three because the market pricing

20:51

i'm at three billion they generate one billion

20:53

in sales that's what prices cells

20:55

does so you can does apples to apples

20:57

comparisons between different companies

21:00

regardless of how big or small they are by using

21:02

price to sales so the case

21:04

this question karbala at point four

21:06

six price to sales and

21:08

the from at five point four press the

21:10

sales implies that

21:13

the market is value in affirm much

21:16

much higher based on it sales

21:18

then they are valuing carbonic

21:22

now yeah how do you feel

21:24

about smith there's some he was eager probably

21:26

go with this but how you feel nervous

21:28

question

21:29

right so is a really interesting question

21:31

and for those of you unfamiliar with

21:34

price to sales it's an easy metric to calculate

21:36

and and gave great overview of kind

21:38

of how to calculate it's it

21:40

tends to be used a lot of

21:42

with companies that are unprofitable

21:45

and when we're talking about unprofitable that

21:48

means that the company is not

21:50

generating earnings either

21:52

on an operating bases are net

21:54

income base itself when you think about

21:56

the income statement as you work down

21:58

the income statements the top weiner

22:00

the revenue or the sales and that's what everybody

22:03

knows but you start getting into the costs

22:05

and expenses and the taxes and

22:07

all the different things that are

22:10

company has to undertake to generate

22:12

those sales their that all stars

22:14

detract from the sales in

22:17

new companies which both of these companies

22:19

very new to the market in general are

22:21

newer companies do or companies tend

22:23

did not make money coming

22:25

out the gates not always case but just

22:27

as general rule and so lot of people

22:30

will use metric like price

22:32

to sales to help them value

22:34

company or as andrew was pointing out

22:37

use relative numbers to work at

22:39

which one is more expensive than the other

22:41

according to what the market think south's

22:43

affirm is for those of you

22:45

and to speak more on affirmed i'm not as

22:47

familiar with curve on so i can't speak to that

22:49

specifically affirm is company

22:52

that offers a product called

22:54

by now pay later which is

22:57

a do or updated version of way

22:59

away so older folks like myself

23:01

know what layaway as as something that they used

23:03

have in the seventies and eighties and

23:05

basically what it is it used be that you could

23:08

take a product whatever it

23:10

was a game or something like

23:12

that and they

23:14

would set it aside for you and for you would make

23:16

monthly payments on it and know when you paid

23:18

it off he took the product now

23:20

you can actually take the product home you can buy

23:22

whatever does you want and

23:24

just about everything now is eligible for

23:27

a by now pay later with

23:29

companies like affirm after pay corner

23:31

in particular he could literally by almost

23:33

everything including a him parker says by

23:36

now pay later idea and so it's basically

23:38

the way that they're set up these companies difference

23:41

they offer the ability to

23:43

split up the payments into

23:45

three five different payments for example

23:48

as you would pay the interest like have used

23:50

it for your credit card so that's the allure

23:52

and the idea of the companies so

23:55

a from is a new company and

23:58

they are one of the leaders in this now

24:00

pay later space and this is really good gained

24:02

a lot of traction in last few years

24:05

and

24:06

the way that a from works is you

24:08

can go to on wine or

24:10

you can go into a store and

24:13

as one of your payment options you can choose

24:16

a company like a from to buy

24:18

your product it tends to work

24:20

better for a larger purchases it

24:22

gained as first claim to fame with

24:24

peloton so it was one the

24:26

ways that peloton allowed

24:28

people to buy the bikes

24:30

to to five thousand dollar bikes using

24:33

from and it got

24:35

a from a foothold into the retail

24:37

space and it allowed the

24:39

peloton to generate

24:41

lot of revenue quickly because the

24:43

way it works is that

24:46

a from basically guarantees the payment

24:48

so if you buy a three thousand dollar

24:50

bike with a from through peloton

24:52

peloton gets to three thousand dollars from

24:54

a from and then you pay from back

24:57

so now you you peloton is completely cut

24:59

out of the equation and peloton happy

25:01

because they've gotten money for the bike and

25:03

so works great for retailer a

25:05

from makes money from

25:08

the take rate which is the percentage that

25:10

they charge company like peloton

25:12

for the ability to get their money up

25:14

front and then affirmed deals with

25:16

collecting of from us so

25:19

the market i guess about two years

25:21

ago these buy now pay

25:23

later companies in particular from was

25:25

one of the hottest companies out there twitter

25:27

was all abuzz about from in

25:29

particular that was the hot stock

25:32

for awhile and everybody was all

25:34

a flutter are all a twitter no pun

25:36

intended about from and

25:38

it ran up in price huge

25:41

now both of these companies carve on into

25:43

from do have very very

25:45

nice revenue growth like there are

25:47

growing fast there's no question about it

25:49

you can't argue about that but what

25:51

is now happening in the markets

25:54

with both these companies in particular with the

25:56

from his they're getting hammered because

25:58

they're starting to see a lot of things

26:01

about both companies that

26:03

are unprofitable in it appears they

26:05

mean i'd ever get profitability so

26:08

as much as a best tesla in the

26:10

past the , are profitable

26:12

making money and that's the

26:14

whole goal of every business is to make money

26:16

because eventually it's the money's gonna

26:18

run out other words the money you could borrow from

26:20

other people weather's bank or private

26:23

investors is gonna run out and as you can't

26:25

produce enough money to pay your bills

26:27

you go out of business it's pretty simple business

26:30

economics and so what's happening

26:32

in a market now is that curve

26:34

on a particular as was ninety one percent

26:36

from it's high was trading three hundred seventy

26:38

dollars back in august of twenty

26:40

twenty one is now trading around twenty three

26:42

bucks and so is fallen off

26:45

cliff i would miss i don't know much about

26:47

the company at all other than the fact that it's

26:49

really the market sentiment

26:51

against company's very negative or

26:53

from his become more negative

26:56

for sir over the last six months

26:58

so one of the

27:00

issues with from in particular

27:03

is it it enables

27:05

people to buy stuff

27:08

they can't afford and

27:10

my biggest issue with it is

27:12

the credit checks so the

27:14

buy now pay later companies are not regulated

27:17

like credit card companies and banks

27:19

in particular and so that those two

27:22

entities have a lot of government

27:24

regulations that oversee

27:26

making sure they do not operate on a

27:28

predatory level in other words allowing

27:30

people to buy more than they can afford

27:33

and then they can't they get in lotta trouble

27:35

and it causes everybody a lot of pain

27:38

a from after pay karna pay lot

27:40

of these paypal apple

27:42

now these companies are not regulated

27:45

like american express's for example

27:47

for even capital one

27:49

and so they don't have the same regulatory

27:52

requirements regulatory offer a

27:54

credit checks for people so

27:57

one of the hindrances to

28:00

the credit cards is you have to have a

28:02

decent credit score to get the credit it's

28:04

not free money you gotta pay back in his interest

28:06

and and others in the by now

28:08

pay later companies are

28:10

offering in essence what

28:12

they were people think is free and

28:14

so my concern

28:17

from the get go after working at the

28:19

banking industry for a for else has see

28:21

how poorly people were managing credit and

28:23

these are people that have decent enough credit

28:25

they can get credit cards a lot of the people

28:27

that are qualifying for these i

28:29

know peter alone are people that are

28:31

don't have either don't have to the scores

28:33

or don't have good credit scores and because

28:36

these companies are basically allow

28:38

anybody to buy something they

28:41

can't afford it puts more

28:43

pressure on these people

28:45

to try to haley

28:47

thing back in the allure

28:50

is united guitars doing saying the

28:52

you're going to get charged interest like you will with credit

28:54

card and i guess that's but the

28:56

problem is is that now

28:59

these companies are accelerating their sales

29:01

and especially during christmas time

29:03

everything came with the opportunity to buy this buy

29:05

now pay later stuff and

29:07

what's happening now is people are signs default

29:10

and they're starting to this payments and

29:12

they're starting to get behind and

29:15

it's causing lot a hardship and a lot of pain

29:17

on people and you could argue

29:19

that it's not ethical and that is

29:21

where i started to have big

29:24

problem with these companies because

29:26

i don't think it's ethical and just because

29:28

it makes it easy to give people credit

29:30

doesn't mean that it's right now

29:32

there's some people to get managed to this in are some people

29:34

that gotten in trouble credit wise

29:37

in the past for making poor decisions and now

29:39

they're in a better place in are trying to build ourselves

29:41

out great know finds

29:44

but the majority of these people are not

29:46

in that position and in particular

29:49

young people that don't know how to manage

29:51

their money or bennett's the payments

29:54

they start getting in trouble and

29:56

i was reading something online yesterday

29:58

i that badawi to go off from the there is

30:00

go chronicle and it was

30:02

highlighting person did a blots five

30:05

different things from five different i

30:07

know pay waiters they couldn't afford

30:09

and there's no regulation

30:11

so other words would you buy something

30:13

on your credit card you get statement you know

30:15

how much it is you know how much money you

30:17

borrowed with these by now pay

30:19

waiters because are not connected you

30:22

can lose track of what you buy and

30:24

were and that's what happened to this person is

30:27

that the oh this young woman when i

30:29

bought shoes for three hundred dollars

30:31

and used by now pay later that she went

30:33

bought four hundred our dress and

30:35

as found some your jewelry that she

30:37

liked it because the way these companies

30:39

present their products with

30:41

his by now pay later if it's like

30:43

it's free money as like i don't need to pay

30:45

us back it's is zo interest it's easy

30:48

you know i'm only paying twenty dollars

30:50

now and my next team in his one hundred

30:53

hours i can afford that easily but

30:55

what happened is to her that she lost

30:57

track of track and the next thing know she

30:59

had two thousand dollars in debt and

31:01

she can't afford payments so

31:03

now she's defaulting on the the payments and

31:05

going to her credit and hurting her credit so

31:08

i guess aldous to say affirm

31:11

is i don't like sick of unethical

31:14

and i don't like the fact the of what

31:16

they're trying to do i'm worried that

31:18

it's as weeding people down path that

31:20

they can't manage and is gonna get a more

31:22

in trouble and so even

31:25

the market is really hammered them over the last

31:27

few months i think it's gonna hammer me even more because

31:30

corner which is the other really big

31:32

it's by now pay later companies their

31:34

losses are crippling

31:36

over the last two years because they're accelerating

31:39

marks and or try to get more people into

31:41

the system so the more people they bring into

31:43

the system the more people are defaulting and

31:45

it's gotten to the point now where of england's

31:47

is considering banning it because

31:50

it's become so harmful to people

31:52

and there's no regulation against that right now

31:55

and so on ios and of her from cystic

31:57

bravo weights probably tell

32:00

really couldn't tell that

32:03

itself safe to say like

32:06

least for the story of from there's

32:09

more to the story them whatever the numbers

32:11

show particularly because

32:14

it's not a traditional type of business

32:17

it's a new innovation

32:19

in finance and feel quote

32:22

unquote new innovation in finance

32:24

which he should always be skeptical as and

32:27

so maybe one those situations

32:29

where knowing about the

32:31

business model is more important than looking at

32:33

the numbers and see have that kind of tells

32:35

you more about how expenses you

32:37

consider the sock the yeah for sure there's

32:40

a line in the first drastic park movie

32:42

long long long time ago were

32:44

malcolm the guy that just go booms

32:47

character plays his discussing the

32:49

ethical illness of creating these dinosaurs

32:52

and when things he says in the movie is still

32:54

because we could do it doesn't mean we should and

32:57

, because we can offer you

32:59

know this kind of credit to people doesn't mean

33:01

we should an ios

33:03

just looking at the top line in

33:05

investing in companies you have to what

33:07

kind of the whole story and understand the

33:09

business model and also look at

33:12

the other parts of the finances of

33:14

company because it's not just about sales

33:16

it's about the what kinds of causes the

33:18

company running and whether they can

33:20

be profitable at some point that

33:22

you want to see and evolution towards

33:24

profitability and i'll give give you example

33:26

really quick crowd strike which is one the

33:28

companies that offers on wind

33:31

security it's just as a general rule

33:33

on not an expert in copy and all but

33:35

david growing very very fast but

33:37

as they've grown their losses

33:39

are sinking which means that

33:41

they're moving towards profitability and

33:43

probably the next year or two it's

33:45

going to be profitable company so

33:47

with from and with curve ana they're not

33:49

moving towards profitability if anything they're going

33:52

the other way and that's where the

33:54

market is starting to can hammer

33:56

these companies because they're not moving towards

33:58

profitability and that's ultimately

34:00

what you want see it as it or not

34:02

an expert carbonite i've just pulled

34:04

up some other filings because i was curious

34:07

so you can look and they owed

34:10

close to two billion dollars on

34:12

this that facility that

34:15

they had pay in next twelve

34:17

months otherwise they're gonna they're gonna so

34:20

as of april twenty eighth

34:22

they had a filing a said they did borrow

34:24

enough to pay that off the

34:27

ten percent ten point two five percent

34:30

interest rate do so

34:32

that can potentially her unprofitability

34:34

for while and it's

34:36

kind of goes to that idea of those

34:38

companies are raising capital

34:41

the you can safely say there's more risk

34:43

involved with those sapper companies it

34:46

also more reward so it's

34:48

kinda like that's you don't get

34:50

the reward without the higher risks so

34:52

is important to look at things like that in

34:54

my opinion if you'd be lucky that's super

34:57

fast rowers like that take

35:00

a look out what kind of deaths studio

35:02

in the next year two

35:04

years whether they oh in three years if

35:06

don't know how to look that up we

35:08

are posts on our blog about that feel

35:10

no had look that up probably wouldn't go

35:13

for those kana highly speculative

35:15

companies yep i agree so

35:17

neo i hope that we help the answer your question

35:20

hope that i did turn you off on investing

35:22

but did once you to know my guess my

35:24

thoughts on a from i'm not fan

35:26

of any those by now pay later things as six

35:28

probably don't i think he's as have to be careful

35:30

in general the know we talk about

35:33

the stock market returns about ten percent

35:35

year and , when you talk about companies

35:37

are growing like five times that

35:39

by city five percent sixty percent

35:41

like affirming or bother you

35:44

have to be really to be about

35:46

that because of all of the things that

35:48

we sat so as if thou is

35:50

all really overwhelming

35:53

as because as because lot nuance to these kind

35:55

as high growers so

35:57

you can the avoid lot

36:00

that risk by sticking to some other more

36:02

boring safe established

36:04

companies and

36:07

sometimes the you know depending on the company

36:09

you know after now nearly as much in order

36:11

to do well with it

36:13

at i totally agree its website all

36:15

, folks well with that will go ahead and

36:17

wrap up our conversation for this evening i

36:19

want thank everybody for taking the time to send us

36:21

those great questions those were lot fun to talk about

36:24

and hope you guys got some good information from all

36:26

that and if you have any

36:28

questions about anything that we talked about today

36:30

andrew mentioned it and all we mention it

36:32

again we do have website investing

36:34

for beginners dot com we this awesome

36:37

search by top have the page the follows you

36:39

wherever you go into website to answer

36:41

any questions the you might have about

36:43

price to sales or income statements

36:45

balance sheets that all those

36:47

kinds of things theres lots have great resources there

36:49

to help you learn more about what were

36:51

talking about and more you learn the more the compounds

36:54

will help you learn more so its

36:56

great resource for you so hope guys can

36:58

use it right without a further do

37:00

i go ahead sign us off you guys go out there invest

37:02

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37:14

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