Chit Chat Stocks - Teladoc & Livongo with Richard Chu

Episode Date: November 10, 2020

Your hosts Ryan and Brett welcome on Richard Chu in this week's episode (22:33). Prior to the discussion with Richard, Ryan and Brett go over their stories from this week (2:25). With Richard we talk about the future of telahealth and the role Teladoc will play (31:30). Your hosts also dive into Peloton and the home fitness universe (49:08). Keep listening on the back half to hear who is in hot water (1:05:36), Buy-Sell-Hold (1:09:25) and anecdotal evidence (1:11:15). As always enjoy this episode! Follow Richard on Twitter: https://twitter.com/richard_chu97?s=20 Subscribe to 7 Investing with the code "CCM": https://7investing.com/subscribe/ Watch this episode on YouTube: https://www.youtube.com/channel/UCG5Ni-SI-jyrEsoNUhqftNQ/ Follow Chit Chat Money on Twitter: https://twitter.com/chitchatmoney Visit our website to see more from your hosts Ryan and Brett: https://www.chitchatmoney.com --- Support this podcast: https://anchor.fm/chit-chat-money/support Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

welcome to chit chat money today is tuesday november 10th uh i'm leaned back a little further in my chair than normal so if i sound relaxed i probably am yeah everyone's everyone's gonna love that right yeah uh but before we get to the show we should mention uh it's i'm doing the sales pitch this week right yeah your turn okay so should i try the reverse psychology or yeah okay uh if i were you i would not sign up for seven investing using the code ccm unless you really want uh good returns in your portfolio um good stock picks good analysis you probably don't want any of that so i would just make sure you don't sign up using ccm yeah you don't want to use ccm at checkout and you don't want to get a team of personable um almost advisors that can

help you out and also give great picks and you also don't want that's the last thing you want The last thing you would want is to get $10 off your first month because that's a terrible deal. And it's almost like getting the first month for free when it's only going to cost you $7. Exactly. So, yeah, don't use the code CCM. All right. You good? Yeah.

Ready to get to the real show? But what's your story today? Before we get to that, we have our interview with Richard Chu today. And we talk Teladoc, Livongo, the old Teladongo. And then we also have Peloton as well. Yeah, so timely stuff. I know they're getting hit hard because of the vaccine news. There are a lot of volatile stocks.

So if you're interested in those companies at all, he was great, super smart about that. Yeah, okay. And then what's your story? Story is going to be Ant Financial getting pulled. The IPO got pulled. A huge IPO is supposed to be $350 billion in Shanghai or Hong Kong, I believe. So giant story over there in the Chinese markets. Okay, and then I'm talking Square's earnings, which isn't really that compelling of a story,

but it's a little interesting because it's somewhat controversial and there's a lot of debate going on with it. And then, as always, we have our current state of FinTwit. We have Hotwater, Buy, Sell, Hold, and Anecdotal Evidence. Let's go. Welcome to Chit Chat Money. On this show, hosts Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investment. As a quick reminder, Chit Chat Money is a CCM Media Group podcast.

Ryan and Brett are not financial advisors. Anything discussed on Chit Chat Money by Ryan or Brett or any other podcast guest is not formal advice or a recommendation. Now please enjoy this episode. Okay, welcome in. I'm going to kick things off this week with Square's earnings. They had a blowout quarter when you look at the top line, but there's some nuance to that. So we're going to get into basically what all it was. but their total revenue was up 140% year-over-year to like $3 billion for the quarter. 54% of that revenue was Bitcoin revenue, which is zero margin, essentially.

It's almost like counting it as a gross market volume or merchandise volume, excuse me. So it should almost just be taken out when you're considering it. I think legally Square has to report that as revenue, even though it's essentially, yeah, like you said, they're not really taking any money on that. It's just the exchange of goods through them. If you're doing your own internal model, honestly, the best thing to do is just to subtract that revenue completely. Okay. And then, however, gross profit for all of Square was up 59% year over year, 63% if you exclude their sale of Caviar. The number of average daily transacting Cash App customers doubled year over year. Cash App gross profit grew 212% year over

year that's the number to look at if you're basing your thesis off cash app is gross profit because that basically subtracts out all the bitcoin revenue yeah and the they're giving out gross profit right now which probably indicates that it is not profitable but if you're growing um gross profit at 212 percent that is a fantastic number and it's the majority of the growth story for square right now and there's it feels like there's still some misunderstanding behind it because i've seen people go okay well gross margin went from 40 to 26 in a year and it's like well if their gross profit jumps 212 do you really care what the margin is on it yeah and then you just again make sure to subtract out that bitcoin revenue don't get hung up on it of how you know

it's it's misleading people like they put it in there right away you know and they explain how it's calculated why it's going to be zero margin um and then just don't get fooled when the total gross margin goes down look at it minus the bitcoin revenue is the fact that 54 of their revenue coming from bitcoin uh does that concern you uh it's not concerning right now because i know that you know overall gross profit is going up and that's even better than total revenue going up uh but it is concerning because it could be a way for them to hide uh falling sales uh in the future you know what i mean yeah and i have some hesitations around how much it'll actually drive uh customers to other functions on the cash app right i'm not sure people that are bringing money

to the cash app to buy bitcoin are also there to get the cash card and get all the other features that the cash app provides yeah i mean i use the cash card and i use the cash app and i don't i don't care about bitcoin at all and that's just one use case but yeah i mean focusing on the bitcoin is not i know it's back into the news and very trendy it's just not the growth story for them maybe it's a gross it's going to have a lot of volume flowing through the system if people are using it but really it's the cash card that you want to watch out for it's the direct deposit with that bank account they have set up they don't have a bank but they you know they're partnering with one it's gonna make i feel like for some bad comps once bitcoin sort of comes out of favor or

like if it's less you know if less people start trading bitcoin it's gonna make squares comps look pretty bad yeah and i guess that could be an opportunity if again gross profit and eventually the net income or free cash flow is getting better um and you know revenue technically drops or the comps are really bad because bitcoin revenue was down um that could be a good opportunity um just forecasting of how a lot of the people you know the short-term traders look at something like that you know yeah um in the markets outside the u.s the seller ecosystems gross payment volume grew 46 percent year over year that's a good sign um i guess the u.s is lagging behind in that regard but it also international seller gpv only makes up like 11 of overall gross payment volume for

the seller ecosystem so it's starting from a much smaller base yeah there's a lot of potential internationally i know europe's a little more fragmented because there's not as many big box places well i guess i don't know they're not really in big box places you know how in the united states it's a lot of standardized but in europe it's a lot of short you know places that take a lot of cash um cafes and things like that but australia united kingdom um a lot of other places there's a bunch of potential there but then the united states there's a lot more competition coming online i have clover um a few others i know in canada there's light speed yeah and there's a bunch of other competitors in the united states so we might be getting close to saturation there

the revenue growth is probably not going to be where it was at like 40 50 percent like it was you know, a few years ago, but you know, the market's not dead at all. They're still going to get money from these, from these sellers. Some other numbers, sales and marketing expenses grew 133% year over year. The Square business card was really successful. I think it crossed 250 million in money being spent through the Square business card. Just overall, it feels like sometimes the cash app sort of overshadows the seller ecosystem because i think pretty sure seller ecosystem only grew eight percent gpv altogether does that is that like cause for concern that the cat yeah the cash app is doing really well and i think we were right about the

cash app but the rest of the business which generates a lot of subscription revenue might not be doing so well yeah and they get a lot of payment revenue where they get that two percent or three percent on the payments uh i'd say 2021 is the year to look at because 2020 it's a little bit of anomaly a lot of people were going bankrupt uh you know there was the covid lockdown stuff like that that really hurt square's seller business but if they can continue to grow going into 2021 uh you know the comps will be fine and i think that's just kind of an example all right in a normalized environment the new normal environment can square still grow its gross payment volume and its revenue from its seller business one the concern is though the

sales and marketing and 133 percent that just shows that their customer acquisition cost is increasing which decreases the lifetime value or sorry you have to get a higher lifetime value for that to be a profitable customer if you know everyone knows that if sales and marketing keeps increasing at a faster rate than revenue they're never going to get to profitability that's another thing to watch out for yeah are you more or less optimistic about square moving forward after this quarter well if you take into the valuation i know it's come down today um the valuation is up there on the business itself it's probably the same i like the cash app a lot and i think the seller business is solid however there's a lot of competition coming online for the seller business

i think the cash app has a strong you know they're very innovative over at the cash app although they have a lot of competitors you know venmo starting to copy a lot of their features um i don't know with the valuation higher i'm obviously less optimistic for the stock compared to when it was below 100 but in the business probably the same okay all right what's your story story uh and financial so their ipo got pulled last week it's a little bit of a drama story with jack ma uh so the ipo was pulled by chinese regulators right in the middle of the election uh which shocker I guess you know hide the news on Monday and Tuesday this Ant Financial is Jack Ma's baby and it was supposed to net him a few billion dollars with the 40 billion dollar stock sale

that was going to be in either Shanghai or Hong Kong I believe it was probably Shanghai or Beijing then because it was the Chinese regulators well some facts about Ant Financial it issues about one-tenth of all Chinese non-mortgage consumer loans and Alipay is their biggest product uh it is the thing that combined with alibaba it's sort of like their cash app or venmo except a lot bigger and it's used more than cash or credit cards in china um the storyline goes on november 2nd regulators met with mon so that in the future financial inclusion from internet platforms would have to take a back seat to financial stability which sounds great but that's kind of just their reasoning to take out this ipo um it's very important to the chinese

stock market because the ant ipo was to value the business at 359 billion dollars which would make it the largest financial institution in the world um larger than any bank and at least you know by market cap uh new the new rules would state that companies would have to put up at least 30 percent of their own capital in making loans and this became a problem with ant because right now they're just a middleman more of a matchmaker and they had to only put up two percent of the loans because they're just connecting banks and customers so it's kind of taking the middleman out of the equation now they're going to have to put up a lot of their own capital um they're going to have to rework their business model and that's going to take them a few months and maybe even a

year before they're eligible for the public markets so the trigger for this was the backlash from ma poking fun at regulators at a conference he lost upwards of 10 billion dollars from this one speech is that the costly one of the costliest mistakes of all time right there i don't think he cares but yeah he's still worth like a few billions so i don't know if he cares he's probably gonna get the company's worth the same as it was anyways apparently a lot of banks were lending vast amounts of money don't know the exact number to people so they can invest in this ipo which is a concerning anecdote i don't know why if i of hundreds of thousands of people in the united states we're getting loans to invest in the new ipo what's the big one like snowflake um that's

a concerning number to me i get it when banks do it um it's not it doesn't make them special you know going on leverage just you know it's dangerous either way if you're smart or just a retail investor but that concerns you right i don't like investing on borrowed money to begin with and yeah i mean if you're doing it for some hot new ipo it that makes it that much more suspect Yeah, that was a concerning anecdote. I saw the users of the app told the Financial Times that the app was designed so people unwittingly take out loans to shop at Alibaba. So in its offering documents, Ant said that Credit Tech Unit, which is the thing that we're talking about here, is now 39% of total sales, which is a large part and is actually their biggest growth driver. So this is an important part of the story for Ant Financial and is why they pulled back the IPO because if they couldn't do this business, the market cap they would get would be a lot lower.

Now, if you're confused on what this actually is, think of some American examples so people can get some – if you're a listener and you're thinking, how are these companies like something in America? It's kind of like if Amazon owned Venmo, 80% of the country used Venmo on a regular basis, and then it started partnering with banks to lend money to people just so they could shop on Amazon. And then banks also lent money so they could buy Amazon. yeah it seems um a bit concerning and this is one of the reasons when i hear stories about this all the time you know it's almost on a weekly basis maybe minimum of a monthly basis depending on what is happening in the chinese markets as someone who has no access over there i just can't get myself to want to invest what was this thing about them being like levered up 100 to 1 yeah i saw that um it could have been wrong because i didn't investigate that it's just something i tweeted

like wow someone someone tweeted an article that said they levered up 100 to 1 um it might be a little different because they're a middleman but uh if they're levering up a lot even if it's not actually 100 to 1 even if it's 10 to 1 or 20 to 1 uh if the values of those loans go down only you know 10 or so you're in a lot of trouble yeah it just it echoes our concerns about investing in Chinese companies and it's not necessarily I'm not bashing Ant Financial but there's like regulatory risk that you can't foresee obviously you probably couldn't have invested in this because it hadn't gone public but there's just so much government involvement yeah okay yeah it's almost like all right someone I guess we just talked about Square today it's almost like if

Square could get constrained just because the government can just decide that no one can use the cash app anymore all right then the business is screwed yeah and i mean i'm not sure what jack ma if he has anything to do with alibaba anymore but it's like once the government has sort of an issue with a person that can affect their other businesses too like this could i think alibaba was down like six percent on the news of financial not going public so there's too much like entanglement there it's like just way too much concern and risk for me as an investor oh yeah And I think what happened was Jack Ma thought he was above the CCP, the Chinese Communist Party. He thought he could say whatever he wants now, and they were like, no, no, no.

Not even our richest guy. He's not immune to our autocratic needs. All right. Current state of the Fintwit. You want to go first? Sure. I'll go first. And I basically – this week Fintwit basically just became election Twitter.

True. And so – Or comparing it to value. Yeah. Yeah, that too. I'm not going to say like anything political, but doesn't this week, election week, always amplify the Twitter bull thesis? Yeah. Because I am refreshing Twitter more than I probably ever have.

Yeah, if they were a subscription model or something. First off, get the ads to work. If there's no way for the ads to work, you've got to come up with a better business model. We talk about this all the time. You're providing more value than you're getting in for it. Simple as that. there was a period where i was getting relevant ads and now they're back to like the least relevant ads i've ever had yeah i don't need a gmc truck and i've never tweeted about trucks in my life

like well it's dorsey's like resistance to collecting data i feel like it's just screwing him i think i mean they collect data they're just really bad at executing it what what what data points are they collecting i know i mean they're just my age and my gender i'm sure they're collecting the same data points as facebook uh but they're just really they don't still have the data analysts and stuff to do it they don't have the algo if twitter ends up being like a crazy successful investment let's say it's a trillion dollar company like facebook might be here soon maybe they already are i would say no way twitter but okay 200 billion or something if they were would this be the most obvious miss uh i mean everyone knew how valuable it was yeah they were

just like what's the ceo isn't he's not doing anything i think it should be a cash cow i don't see it being a trillion dollar business but could they turn things around and get up to 200 billion dollars sure they have some really valuable users their arpu should be high yeah yeah all right what did you have okay today was the biggest day in value history everyone's talking about value being back because of the vaccine news is this a head fake do you think is this just the market gods tormenting all the quantitative value guys i was i woke up pretty hyped this morning so the day we're recording this was the news that uh pfizer broke with the vaccine thing monday morning and then i saw a thread that was like this really isn't gonna help for like a year

and a half and it was it was max from seven investing yeah and so i'm like all right well it feels like the markets are gonna come back down to earth at some point and they're gonna be like yeah this really doesn't impact anything for a while yeah and it it's tough when you look at the individual companies you really got to make a case-by-case basis but uh it could be a proponent to help in in total the value companies because then they're going to be able to hopefully pay down any of their debt because a lot of them are in the value camp because they're leo levered up a ton yeah i have no idea if it's a head fake though uh but it is interesting to see a value outperformed by like seven percent on one day or i think maybe it was small cat valley that was that

high i don't just to see like people competing you know i just don't see that yeah all right good value had their day it's been a rough decade for them so good for them but it to me like i'm not gonna stop shopping online now like i'm not ecstatic about going and seeing traffic again that's not what it's about it's it's the price you pay obviously you're not amazon's not gonna to be in the value bucket but are you going to pay for amazon at 70 times earnings or you want to pay for uh i don't know the company example are you going to pay for another company at six times earnings that's the question you have to ask and it's a lot harder one to make i don't think it changed i think people need something to react to i don't think it changes the thesis for a lot

of the oh the individual other than maybe other than maybe zoom purely paced purely based on just people not using it as much but at the same time it's subscription based and everyone's gonna need i am i imagine everyone's probably gonna keep a zoom subscription if you work for a business yeah the individual companies it could be like if you see the sell-off on an individual company i mean this is a great opportunity if you think it's trading at a 20 discount or maybe even 10 discount and you think all right well they're classifying this as a work from home stock but it's still gonna be fine uh well all right that's a good opportunity for you to buy shares for the long term but on the flip side when this first started people were like and and we saw quarterly

earnings uh whatever that first quarter was where it reflected march and second quarter yes and they were like everyone's like no this is not a temporary boost this is a permanent change this is everyone's going this way we're gonna see that in the next year year and a half we're gonna see okay is work from home here to stay forever because i think the market said today that maybe a lot of these were temporary shifts i think the easiest the one that i'm very confident is going to happen is when things open up when everything is safe or is 90 safe people are going to spend on travel and entertainment and you know outside entertainment you know going to places going to restaurants going to bars they're going to spend on that like crazy i'm i'm like 95

confident in that no big time all right like i'm gonna go to a movie theater as soon as i can probably so is amc good amc was up like 40 today i wonder if that bond i wonder if that bond uh idea i had that that half-baked idea would actually work never invest like that though all right is that all you had for current state of into it oh yeah okay next we have our interview with Richard Chu we did have some technical issues during the interview so yeah I think Brady over here chopped him up real well but yeah I think our man behind the glass uh was able to sort of smooth it out but if you hear any blips you probably know why what did you like from the interview uh definitely information on Livongo and Teladoc uh he goes into the telemedicine industry

learning about that what kind of things matter what's a commodity what's actually providing value how you can build a competitive advantage in that um i'll probably this is one of the ones i'm gonna have to listen to again because some things went a little bit over my head which i think is great because if you listen to it you're gonna learn a lot yeah and i i yeah i second all that and i don't always listen to our own interviews because i don't like hearing myself but this is one that i'm going to look forward to hearing richard's answers again so um i hope you guys enjoy the interview here you go cox panoramic wi-fi includes advanced security to help protect all your connected devices you'll get real-time alerts oh like this one so you don't

have to worry about malware or when your kid downloads a song from a shady link and now all your computer can play is red color red color where are you all blocked thanks to advanced security included with Cox panoramic Wi-Fi. Advanced security must be enabled in the panoramic Wi-Fi app. Restrictions apply. Today, we are welcomed by Richard Chu. Before we get started here, Richard, why don't you kind of give us the thumbnails of your career so far? What led you to investing and then what made you want to become an analyst? Sure. So for anyone who doesn't know, I am, like, I have my own Twitter account, RichardChu97. I also have my own sub stack, where I sort of go over my own story in more detail. And then I also do like

a number of different deep dives on different companies, such as Livongo, Agora, and more recently, GoHealth. And just to sort of give you like a background of my career so far, it hasn't been like too long I guess since I started investing I basically started back in around like mid-2018 and that was because mostly I'm not too old myself like I'm just turned 23 and I think that at that time I was still in university so I didn't really have that much disposable income to be investing and so like during the time I was working I was doing an internship and I had some like extra cash laying around and I figured that why not start like checking out investing in personal finance so I read this book I think like a lot of young

investors might be familiar Rich Dad Poor Dad it's a book on personal finance that a lot of people start with and from that book like it really sort of sparked my interest in investing it really introduced like concepts like um the power of compound interest for example and uh this was like all stuff that I was learning back at school at the time um because I was studying business but it wasn't like something that uh really like like like like like I don't think many people sort of get an interest in uh investing um from just their school work because it's very theory based. So Rich Dad Poor Dad really taught me sort of the practical implications of investing and the importance of starting early, the importance of sort of learning to invest for

yourself. And so that's what I did. And ever since then, I've just been learning and learning, improving my own investing and trying to sort of maximize my returns in any way I can. and uh so back in uh sort of last december december 2019 i got comfortable enough with my own investing acumen to want to uh start my own twitter um because i was working at a time as a technology consultant at ui and um at that job um i realized that i actually want to do investing full-time as a career and I didn't want to sort of continue doing technology consulting but I didn't really have any sort of finance experience and so I figured that Twitter and like starting to write my own articles would be a good way to build my track record because at the

time I was very bullish on Livongo Health and that was really because I like like like if there was any idea that I would sort of place a bet and place like a bet on then it would be that stock and I wanted to also like sort of get credit and like kind of help people kind of like open people's eyes to the stock before like I thought they would take off and so I started out by doing like a short thread on Twitter just like saying why Livongo is my top 2020 pick and I followed that up by doing an article on Seeking Alpha. And I thought that that really caught a lot of people's attention. One other thing that I did was because Saga Partners, they owned a position in the Vongo at the time. And because they saw my article, they really liked it and they reached

out to me. So that also helped because it put me in contact with them. And we started talking, exchanging emails over the past couple of months and then um luckily i was able to actually realize my um dream of like working in investing by uh like working on the buy side by uh getting an offer from them um back in august so ever since then i've just been building up my twitter following just looking at providing as much value as i could um through both my tweets and through the articles that I've done and it's been great so far at Saga as well. So I'm really glad to share more. Did you have like a sort of a special industry or a niche or like was there anything you were drawn to when you first started investing or was it kind of broad? Well I think that it was

mostly kind of broad. I thought that I like my own journey started in a way that's very similar to most people in terms of just investing in the stocks that I knew at the time I didn't know anything about SAS because I wasn't in the field like I don't have a technology background I didn't know anything about digital health so at the start like I started by investing in stocks that most people my age knew about like Facebook, Tesla and from there like I explored like I read a lot I explored different sectors, and it was a while later that I discovered that I want to focus in on SaaS and digital health. I think that those two, especially the SaaS business model, I think that it's very, very

powerful, and the market is realizing that now. It's very, very safe, even in recessionary times, like what just happened with COVID. And I think that, uh, just, um, sort of the appeal, like the long-term growth, long-term growth prospects for both industries, um, really drew me to them. And, uh, that's where I sort of focused my energy recently and building my circle of competence in that area, as opposed to, uh, sort of being more of a journalist. Right, right. Now, how has writing, um, helped?

I know you got a sub stack going now, uh, got a lot of, you know, got a lot of people following that. Um, how has that helped you in investing? Um, so like, I think that writing really helps build your conviction, um, because it forces you to like really think through your thesis from every possible angle, like looking at the competition, looking at the products, um, risks, um, the industry as a whole. And it really takes a lot of time to gather that research, right? So if you put it in sort of like a writing format, if you like force yourself to like

write like this, um, in-depth article and, uh, really cover all your bases there. like i think that that sort of really helps build your conviction um now i will say that like just because i write an article on the stock doesn't mean that i'm going to be married to that stock um like on twitter like um some people have been like sort of critical of like um me sort of writing the article and then sort of trimming the stock like a couple of months later like critical on twitter no no i never i never hear that no yeah like i've been uh sort of like like like people are asking questions about like you know like um i wrote an article on elastic and then i uh sort of sold out after their uh earnings report like a couple of weeks later and

then i wrote like another article on agora and i uh sort of trimmed that stock a couple of weeks later um not because of anything related to um the company itself but because of zoom sort of entry which i didn't expect to come this soon um like like zoom recently launched like a customizable sdk and they're using like a lot of the same terminology so that kind of spooked me a bit um and uh yeah like like like i think that you uh like like when you're writing about a stock you gotta be sort of open to that kind of criticism and um just because i write about it doesn't mean that sort of i'm actually gonna hold on to that stock forever or like um not ignore the risks associated with it like if anything i think that writing about a stock really opens your eyes to

like all the possible risks and sometimes just and and sometimes i'll like write about stock and not even take a position because there was something that i didn't realize that i didn't like about it yeah it feels like sometimes you go in optimistic and as sort of as you put your thoughts down on paper you start to think maybe there's some flaws in my thesis uh but a company or two companies i guess they've been pretty vocal about is teledoc i think it's your largest holding by a long ways right yeah 40 or something like that um so when you first heard about the merger what was your initial reaction um well like like i'll say that i first um first of all like i had like a large position in Livongo before. It was around like 20% of my portfolio. I didn't have a

position in Teladoc at the time. So when I first heard about the merger, I was kind of disappointed, just like a lot of people were, because sort of I saw like, I wanted to own Livongo, which was this really like high growth, sort of like remote patient monitoring company that I thought had a really, really bright future by itself. And it was in a better position than Teladoc. And so I was kind of disappointed that they would merge because of course like it was no longer a hyper growth company um and I didn't really like Teladoc as much and I'll go into that later but uh yeah like at first I was kind of disappointed but then after doing more research I figured that like hey like Livongo like management like they knew that they had something very very special with the company

and why would they want to sell this early like a lot of people were saying maybe there was something wrong with the company that the rest of us didn't know about that Livongo management probably uh hit but I think that's too sick that's too cynical like I think that um they like like in the past like they've repeatedly expressed and within the merger documents itself like they've repeatedly expressed um how bullish they were on the future of the company and they negotiated hard for that 10% premium because the stock like it rose like in like like it basically doubled in the span of a month so I don't think like it's too fair to be very critical of Livongo management for making that move especially when Teladoc itself

paid like like um what was it like like 30 times next year's sales for Livongo that was like a huge premium and that would clearly show that Livongo had something special that was worth paying for and so I dived deeper into how the synergies would benefit both companies and I loved what I saw so I instead of selling I started adding and I'm still adding to to this day yeah it felt like when it happened I owned a little bit of Livongo at the time as well it felt like when it happened it was almost a crush to a lot of shareholders like we had this long runway to grow and maybe management didn't see it the same way but like you said the merger seems people are optimistic about the merger now but you said you weren't that optimistic about Teladoc beforehand why

weren't you I guess excited about Teladoc on its own? Yeah so like I saw like basically the future of virtual care is going to be providing the right care so personalized care the right care to the right person at the right time and Teladoc it only solves sort of the right time like like um and and like sort of the right place like you can like have like on-demand telemedicine visits at your home and you can like sort of um like like like like it saves you like a lot of time and it also saves sort of the provider time because they don't have to worry about stuff like cancellations or whatever but um at the same time like it's not going to be solving sort of the issue of uh like health care costs in this country because you know

like the doctor is still going to be spending the same amount of time with each patient and And really the key is with Livongo is going to be sort of providing like sort of really looking at your entire population and monitoring them constantly and using that data that you collect in order to determine sort of the exact right time to provide that care and personalize that care using the data that sort of is collected by Livongo's connected devices. So I think that Livongo is a step forward ahead of Teladoc, and you already saw that they partnered with a bunch of other telemedicine companies like Doctor on Demand and MDLive.

And I really saw them sort of having sort of the advantage here, and I think Teladoc did as well, which is why they were so adamant on buying them. And I think that really when you look at telemedicine companies as a whole, it's really sort of a services business, like it's a more of a commodity, right? Like, um, Teladoc really won based on their scale, based on their execution. And I think that's, um, something that sort of can be, uh, eroded over time because really what's the benefit of scale? Like you have, um, Teladoc, which has like, like, like, like physicians, like a huge network of physicians, but it's the same thing like uber right like once you meet sort of a certain um level of of a

patient of like of physicians then you can sort of pump out like these on-demand visits you you don't need like hundreds of thousands of doctors to be able to really um do that um of course like with teladoc scale like they're able to scale up really really quickly and you saw that because they were able to handle COVID much, much better than the other telemedicine companies. But scale alone, I don't think it's enough because at the product level, fundamentally, each patient doesn't really care if you get your services from Teladoc or Amwell or any of the other telemedicine providers, as long as it's covered by your insurance. And as long as you don't have to wait an hour to get it, I don't think it really matters.

So the moat was a bit light there. And really, I think that that was a problem that Livongo would be solving because Livongo, I think it has a really, really wide moat. Okay. Okay. That makes a lot of sense. And they've talked about the companies having a lot of, you know, quote synergies together. I think they mentioned $500 million in potential cross sell by like 20, whatever. I think it might've been 2025. I mean, what benefit does it provide to the shareholders of each of these companies? Is there anything besides just cost savings that will work out here? Yes. I feel like overall, basically, the merger really extended TAM as well as the moat for both companies.

And the reason why they did that is, for one, we already know, everyone knows that they're both dominant in their own fields, and they're both already at scale. and that can't be said for any of their major competitors. Like they're both dominating their spaces and really combining them, you're creating sort of the dominant sort of virtual care player here. But that's not really my thesis, right?

Like my thesis goes beyond that. And I think that really sort of the value that's going to be unlocked by integrating their two platforms, integrating their capabilities is going to be opening up sort of new pathways to reshape healthcare fundamentally. And the reason why I say that is because once you have sort of this feedback loop where you have like Livongo's data feeding into Teladoc's physician network, who can then use that data to provide sort of customized, better on-demand care to patients, both acute and chronic, I think that that is

really going to open up pathways to sort of build this longitudinal relationship with a patient so like over the entire sort of care journey from the primary care exam all the way to like providing mental health care all the way to providing like possibly in the future drugs as well and I think that that really opens up sort of new opportunities in terms of payment models because once you're sort of managing that care throughout the entire journey like that's something that can't be said for most of the health care system today because it's so disjointed right like you have like um one health uh system like like like one provider for like handling your primary care another one for handling your mental health and none of them ever talk to each other

so like what happens when you have like an issue with your mental health that your primary care provider doesn't know about so like because they can't talk to each other they can't really provide the best personalized care and they don't have the data either so really integrating Livongo into all of that really provides that capability and what i mean with the payment models is that right now a major source of waste within the healthcare system like 25 of healthcare spending is wasted right so and that's a lot of it is due to a fee for service fee for service meaning that it incentivizes physicians providers to provide as many services as possible in order to get reimbursed by the greatest amount and really you're seeing sort of a gradual shift to more

value-based care and what value-based care like fixed fee payments like what they really are is like you pay like sort of a fixed fee like under like different models like capitation bundle payments shared savings shared risk whatever you provide sort of that fixed fee to sort of the health plan and the health plan sort of takes charge of all of those patients and they have to manage their patient costs they're like all their conditions in a very cost-effective way in order to sort of not overspend and see negative profits and they're also being tracked on the quality of the outcomes so really like you're seeing that system that really aligns sort of incentives for like all the different players and what that results in ultimately is better care for a lower

price. And so I think that that is going to be the future of the healthcare system, no matter who like is like under the White House. I think that this is definitely like what we're gradually moving towards. And what you're seeing Teladoc do is they're the technology layer that really enables that kind of system to really thrive. So you're going to see health plans adopting more and more Teladoc in order to empower sort of their value-based offerings, I think. Right. And I mean, we know telemedicine has gotten a big bump from COVID. You know, all the companies have been doing well. I think they saw triple-digit revenue growth combined. Between the two, I didn't really crunch the numbers, but they both had phenomenal quarters, but the market kind of discounted that

And maybe thought, well, I mean, let's see you prove it in a not a tailwind environment. What makes you think that this growth is sustainable as opposed to a temporary boost? Well, like a lot of people talk about how COVID was really sort of the iPhone moment for digital health in terms of like the spark that really sort of opened up like a universe of possibilities. and what i mean by that is that you know like from both uh societal standpoint like you're seeing patients all over the country they're being exposed to telemedicine they're being exposed to the merits of telemedicine people in rural areas right like they don't want to like travel for like a two-hour commute just to see their doctor for like a bee sting and i think that um Yeah. And I think that really, like, you're, like, seeing patients argue for this. You're seeing providers now, they're being forced to do it because they don't want to lose their patients. Like, patients only can see you through telemedicine, then you're going to have to offer that option. Otherwise, they'll go to someone else.

and you're really seeing that both way adoption from both physicians and patients and that's also happening at sort of the high level the regulatory level like you're seeing sort of regulations really opening up and because health care was such a regulated industry before like this has totally changed the game because before like you couldn't even see patients at their own homes like you could provide telemedicine services like like um physicians like they had to only provide in states and to uh patients at sort of the right place but like now like sort of that's all opening up because of covid and physicians like they can now see patients across all states as well and you're seeing things like equal payments so like reimbursing

health systems at the same level for telemedicine visits as you're doing in-person visits and that's really sort of um boosting adoption because making telemedicine a fundamentally more convenient product and that's already being made permanent by um forces within the government there's bipartisan support for telemedicine so what do you think we always sort of try to ask ourselves this when we own a company, what can go wrong? What do you think could potentially go wrong with the merger? Is there anything, I guess, what are you looking for where your thesis would either be busted or it's a total change in your thesis? Well, I'd say like mainly it's concerns around execution risk. So making sure that Teladoc doesn't sort of lose Livongo's focus, patient

focus. I think that a lot of people have criticized Teladoc as being more of a acquisitive entity, really just adding on all of these bolt-on acquisitions rather than sort of making sure that they all play together in order to create more integrated experience. And also making sure that management, Teladoc management, like I think at Livongo, a lot of the high level people have left. Like you saw Jennifer, she was a president left. Zane, he was a CEO left. Like Hemant and And Glenn, like Glenn is the chairman of Livongo and Hamant was sort of this, like he's a general catalyst of VC firm and he helped build Livongo with Glenn. They're still staying on the board.

But I think that from a high level, like you're seeing like a lot of these people leave and that introduces more execution risk. what I will say to that is that Jason who is the Teladoc CEO he has a really great vision I think he has talked about entering into chronic care from the very start since their IPO that was like five years ago and he's talked about entering chronic care he's talked about remote patient monitoring he's a new he's he's known to like enter the employer market before the provider market because the provider market wasn't developed at the time. So he's been making all the right moves so far. And so I think that I'm pretty confident in his abilities to really

integrate Livongo as well. And I think on the other side, you can really look at how competition is pretty strong too, because it's such a big space. Like you're seeing all sorts of different players enter. You see UnitedHealth with Optum. And you see like other like PBNs, like CVS, like they're all building out their own solutions for this but i think like it's the same thing that you see in a cloud market right like like these big players like they don't have to focus they don't have sort of um the incentive right now i think because really what you're seeing with these insurers is that they're incentivized to keep their premiums up like they're incentivized to keep raising the premiums and if you have something like teladoc if you have something

like a bongo that employers like self-insured employers can directly go to then i think you're going to see more and more go directly to Teladoc. And if these insurers don't offer Teladoc, then people are going to sort of buy Teladoc, go directly to Teladoc. It's going to be sort of this, like the power of the integrated platform is going to be so big that other like health plans have no choice but to sort of buy Livongo and Teladoc. And management has already sort of talked with a bunch of industry stakeholders who have said the same thing so how would you measure or sort of track how they're executing is it is any number is it far more qualitative like management turnover or um customers that are unsatisfied how would you kind

of what are you looking at for that yeah like um of course i like attract like the financials like i want to make sure that you know like growth stays up um and they've projected like some great numbers for next year like I think it was 40 to 45 percent revenue growth before synergies so definitely like if they aren't able to meet those targets then I'll be concerned I also think that really it's important to look at sort of how well like they're executing on sort of my story here like they're going to be launching virtual primary care next year and that is really going to be sort of the forest i think really combines both offerings together so i really want to see how adoption for that takes off all right the next company we want to talk about is

peloton i believe you own them as well so just uh generally what do you like about them yeah so um peloton is a relatively smaller position like i acknowledge that there is some merit to the bare thesis um but I think that overall like I really like sort of the company I think that they have a huge opportunity um actually if you don't know like I own sort of a Peloton bike myself I recently purchased it and um I really love it like I think that it's really a huge step up from any of the other sort of exercise equipment I've owned as well as um sort of being better than going to a gym um i think like for myself i uh am not like a huge gym person um but um that was sort of the appeal of the peloton because i kind of like video games and um seller of peloton is really gamifying

the whole um sort of exercise um sort of uh like like connective fitness and everything um it's really gamifying um the whole experience and with metrics like being able to compete against your friends being able to really um to be against all these other people and then especially being your personal best over time like that really motivates you like having all that data um and being able to track your progress on like a minute by minute basis like i think that's something that doesn't exist when you're going to the gym like you're kind of having to rely more or self-discipline and I think that uh really with uh Peloton um it's sort of like a really um aspirational brand like a lot of people you know like um post on social media like hey like

I got Peloton and then all their friends are like wow um so I think that there is definitely um that component for a lot of people um i also think that uh really like it's something that um like like with the leaderboard being patented and like really um like i think they're hiring some other engineers like unity engineers to like further gamify the experience like i think that uh really it's sort of creating um this sort of friendly competitive environment it's really higher energy environment with the instructors and with like music and everything um you know like when you play video games like a lot of people um sort of you know grind for stuff and like what that basically means is like they spend like hours and hours doing like these really

repetitive sort of tasks um and they do it in order to level up and feel that sort of instant gratification and that's something that early peloton is bringing to fitness where on like a minute by minute basis you can see your progress and you get addicted to that data you get addicted to that feedback and that keeps people coming back so i think like it's really sort of something very unique that they've spearheaded here and uh i think that's quite disruptive to sort of the old way of doing things like traditional gyms right and people talk about the community part of peloton is there any competitive um advantage with that is that going to give them any sort of moat over um i think there was a rumor that amazon it might have been a fake uh product but there was a rumor

that amazon was going to launch um apple's launching into this too um is there any sort of moat with just the community part of it yeah like i think like it's definitely a huge meltdown or estimated um when i first looked at it like there's definitely some network effects there and basically like as i mentioned it's kind of like a social network where you can add your friends you can video chat with them when you're riding the bike and you can like even put like tags on there like there's been like over a hundred thousand tags created by 795 000 members um and then the tags range from like stuff like peloton teachers like um peloton preggers like like pregnant women um like like like army vets like all that kind of different stuff and uh

that really sort of there's a communities within communities and like you go on Facebook when you buy Peloton you're invited to the group and you see like people posting there all the time about how Peloton has changed your life and I think that really it's this very tight-knit community that they've created here and that not only helps build the brand but it also helps welcome other people because you know like if you're on Peloton you can race against your friends you can track each other's progress and not only that but you can sort of validate each other by like hey like like hey i got a peloton you got peloton too like like like it's sort of something like a brand that everyone wants kind of like tesla you know um so yeah like i feel like

definitely community is a huge is a huge uh note do you think people will or do you think the product sort of has an upgrade cycle kind of like an iphone do you think i mean it's a two thousand dollar bike built to last you know and i have heard i mean i've heard nothing but great things from the users do you think people will upgrade over let's say like five years they'll go out and buy a new bike yeah i definitely think they would um you know like the evidence that we have so far is like they've already launched a bike plus and it's exceeded all of their expectations like last earning call they were talking about how supply chain is a big issue because they're struggling to meet with demand for the bike um they also like underestimated the amount of people who

would be keeping their existing bike like you know like um people who already owned a bike the original bike they want to upgrade um they like peloton thought that they would uh trade in their old bike so they can like sort of kickstart you know like their used peloton um bike program but uh that turns out to be not the case because a lot of people were actually keeping their old bikes and giving it away to like family members um and then plus as well so it's been um really uh sort of um shocking in terms of the demand for that right now and i think that uh even though it's very expensive that it's still like a brand that um a lot of people want these days so i can definitely see how people will keep sort of upgrading it like even though like it

seems to you and me like um like i personally bought like the original bike because i didn't really see sort of how the bike plus was enough to warrant sort of the premium and they still like expect the bike the original bike to be their best-selling product going into 2021 um but i think that um the bike plus is going to work for a lot of people not only that but they're also going to come out with different more fitness items like they have the peloton tread and they're getting into uh like like they could get into uh strength as well like you see other startups in the place like tonal um they have like those uh strength workouts um so yeah all right who do you think peloton's target audience is um i know some people think that their addressable market might

be a little limited with the expensive bikes and the fact that they're going to compete with gyms when they open up could they get to 100 million members um is that an achievable goal for them um yeah like they've um talked about like their big audacious goal being like 100 million members um and i think that that is definitely something very admirable to aim for they talk about how there's like 200 000 gym goers right now in the u.s and how they're paying for access to really inferior fitness equipment at sort of an inferior location as opposed to having it on demand very very high quality fitness content right under like like um like within their homes and so like i think that uh really it's going to be like a huge potential market because not only you have

like the gym goers but you also have people who own the like your own fitness equipment like i think like they said around uh 35 million u.s households have a treadmill already so um that 200 million gym goers like those could be all potential peloton digital um members because like you know like you see people who even like if they don't have peloton the bike the actual bike they go with like a third party bike like um like knowledge has a few and uh um like like a bunch of others as well and i think that people recognize the high quality of peloton's content so they pay for that subscription there and so um it's really a huge market for their content and that content really um sort of gets people on the path to eventually owning their own peloton bike

themselves so really it's like this huge market of not only gym goers but also people like me who weren't necessarily very, very, um, active gym goers myself, but, uh, really saw the appeal of the Peloton and how that, that sort of, uh, really could change like a bunch of, uh, potential gripes of like why people don't work out regularly. Yeah. And I've, yeah. So I've heard stories a lot like yours, Richards, where it's, uh, you know, I wasn't really that into going to the gym, but when I got the chance to do that at home, i loved it and historically companies that have sort of uh fanatic consumers come consumers that love the product tend to do pretty well i might be missing some but apple and even tesla

customers like that but we're going to get into our wrap-up questions these are our last two i'll hit the first one what is one financial saying that you disagree with um so i think one financial saying I disagree with probably would be diversifying for the sake of diversifying like I see so many people like when they first start investing they're like hey like I got it on like 10% of my portfolio in tech stocks 10% of my portfolio in industrials 10% energy 10% in financials 10% consumer staples and you sort of get like this mishmash of like stocks that maybe like you might not be an expert in that industry um but um you like um still own them just because you like like you think like it's too dangerous to like keep all your eggs in sort

of this one basket of maybe like tech stocks for example like people look at my portfolio and i've got some comments about like hey like why are you like 100 of your portfolios in like digital health and SaaS shouldn't you diversify more and I think like first of all like when you look at a company like let's say Cloudflare it's running mission critical services for 101,000 I think paying customers across every single industry and globally as well so you really have extreme diversification there in terms of their customer base and you have no single customer forming more than five percent of their total revenues so if you have a combination like that of recurring revenues like that they're very very stable across such a huge portion like even if like one or two

customers go bankrupt then it's not going to really affect their total revenue as much as opposed to like looking at sort of traditionally safe stocks like people look at Boeing people look at Ford and look how they've done like I'm sure you could like talk about how it's confirmation bias um but i think that it just makes sense to me how um these uh companies would be very safe even in recessions and i think that um the one that we just went through with covid i think that that really goes to show because like they were still growing at like very very high rates um when every other industry was basically collapsing and also like just because the company has been around for a long time doesn't mean that it's safe right like just because it's at scale doesn't mean

it's safe um like like i think that uh like like with the examples i gave like they've proven it like um like i don't own any of these uh sort of cyclical um old economy stocks um and it's not because i don't sort of like cheap investments like of course like i want to buy a stock um the cheapest i can get it but most of the times like good companies they trade at high multiples and so i think that uh really like that shouldn't stop an investor from investing in them just like having a cheap multiple loan shouldn't be a reason for investing in a cheap stock um the company really has to have a durable competitive advantage i like i look for factors like i've written out in my own um newsletter about like sort of the factors like

the 16 factors that i look for in companies and you're looking at large um large addressable market you're looking at really optionality you're looking at great management you're looking at great product um durable moats um sort of all these different factors come to play and so that's really what i focus on is business quality i like i really like that answer too because i i do think sometimes sort of diverse revenue streams can almost be a good substitute for diversification within your portfolio. Yeah. And if you're going to diversify at all, unless you're going to go into maybe an index fund, I think most people would be better to not go into stuff that they don't understand, especially if it's in individual stocks, they're going to be a decent concentration

in your portfolio. Yeah. Yeah. All right. Last question. We asked this to everyone. What is one piece of advice you would give for anyone starting out in a career in investing which i guess i hear you're just getting going here so yeah so like i'd say like super super important like it's extremely important to be open-minded i think that a lot of people like when they come into investing they come in with really preconceptions um that is like it could be like a simple bias like oh like um i don't want to like sort of buy like very expensive stocks like i want to go and sort of with uh looking for cheap undervalued companies or like i want to like like like i read this book on like um intelligent investor and i'm gonna stick to that philosophy i'm gonna stick to

buffett's philosophy you know like it's really really important for you to really take in as much information from as many different sources as you can when you're starting out to really form your own investment philosophy and decide if it's really sort of the right style for you like the most common question I get when people ask me for investing advice is like when do I buy and sell a stock and I'm like I can't tell you that because I don't know your financial situation here like like like I don't know your time horizon I don't know your risk tolerance I don't know like um like like like what performance you're aiming for and so like that's something that you really have to decide for yourself and that only comes when you have developed your own investing

philosophy and sort of read as much as you can and sort of decided which area which sector you want to focus on and so I think that that's helped me a lot like when I started out just like being open mind like taking advice from like whoever I can get and like in the rest of my life as well like I like to think of myself as like sort of very open mind like I tried to come into any situation with as few preconceptions about something as possible and sort of really letting data dictate my decision making. All right. Yeah. Thank you for coming on the show, Richard. Had a fun conversation. Great interview. Thanks, guys. Okay. Welcome back in. Thanks again to Richard Chu for joining us. Next, we have hot water. I have

one no i have two so i have two as well go ahead i'll go first i'd be remorse if i didn't mention this i think everyone knew this was coming uh the funniest thing of all time the four seasons landscaping ipo is imminent yes or no it's gonna be spacked yeah uh but how i mean someone got fired right yeah we don't need to uh everyone knows what we're talking about it possibly and everyone says oh this is the funniest thing of all time it may have been the funniest thing of all time there i don't know if there's anything funnier there's an i mean veep couldn't come up with this if in the veep writers are like yeah we're gonna do this they're like no no that's not believable what do you think they thought when they got there like no who did this i can't

i would read a whole book on that day just like all the figures all the people in charge i would it's like all the president's men but this this election okay and the second one uh we're in hot water again because we always bash robin hood but it's true i'm pretty sure all the major brokerages were down this morning except robin hood yeah they tweeted um they actually had a they had a sub tweet today that that they're like uh we had old all-time traffic this morning but we actually stayed up and i'd be like congrats you did your job but i mean that's actually it's it's interesting to see so maybe robin hood's not as bad i still think like the stuff we talked about with bill brucer last week um it doesn't change the fact that they're basically treating uh trading or

sorry investing like social media this is that this is that meme where the guy's like celebrating with champagne on the third place podium but it's all zoomed in on him do you know which one i'm talking about yeah this is what robin hood is doing right now they're celebrating but they're in the midst of like the biggest sort of turmoil they're always there's always something going wrong there yeah i can't wait yeah they just finally have their day to celebrate yeah each month there's another thing that goes wrong at robin hood all right those were my only two what do you have okay ppp loans uh apparently it was a fraudster free-for-all shocker so they're in hot water um who knew that steve mnuchin wouldn't be for the common people and just giving up money to

big businesses does he just look like he's doing something wrong he has like a face of a villain he looks like he's from golden sacks that's all i'll say uh all right here's the quote from the wall street journal article sorry don't have the subscription we're poor over here researchers at the mit in july compared payroll data at ppp eligible companies to ineligible ones estimated the program had boosted employment by about 2.3 million jobs at that rate the ppp would have cost about 224 000 per job supported that seems inaccurate no it seems no i mean that seems like not good not 224 000 worth for every job that seems not high yeah that's that's why it's bad okay um any other hot waters yeah commercial flights are in hot water this one's more sarcasm

because the middle class now is apparently joining the private jet boom this is a wired article transport the pandemic has created a middle class private jet boom with commercial airlines grounded holiday households are booking business flights to beat local lockdowns now i understand what they may think the middle class is but there's not one actual middle class person that is booking in private flight no i don't know where wired is getting this wired and the onion were on fire this week with terrible headlines so i don't know just classifying us the same at this point yeah middle class one percent hamptons same deal okay uh any others nope okay buy sell hold the theme this week is companies that would significantly benefit from a vaccinated population i have norwegian

cruise lines starbucks and boeing i don't like boeing just because of the executive team i think they have a tough corporate history over the last few years 737 max was obviously a horrible tragedy uh but it's a lot stable it's a lot more stable than the norwegian cruise lines i'd have to look at norwegian cruise lines balance sheet so that might be something where i hold and i'm selling boeing and i'm definitely buying starbucks because i think it's a quality business although they have fueled their buybacks with debt um it's not something i'd likely own either any of these companies but out of these three starbucks is solid norwegian cruise lines revenue was down 99.7 percent this quarter yeah if i knew that number maybe i go maybe i put that on the sell

maybe maybe they go back to sell listen even if like maybe you bought a few bonds to save you for this time but if it takes another year it's going to take them so long to pay off the debt even if they do survive yeah it doesn't just because people got vaccinated or will get vaccinated doesn't mean that makes this a good investment well same thing with boeing right because they they've had the they had to fund their uh gosh what was it pension or something or no something they had to fund something that was already fueled by debt with more debt um and it's just concerning and they're susceptible to airlines being insolvent like airlines might have problems and then who does boeing sell to i guess maybe there's consolidation but i still don't know if

commercial flying goes back to where it was ever at uh yeah well i guess commercial if you separate it out to business business probably won't be where it's ever at it may get back who knows the exact number 70 of what it was okay anecdotal evidence um i got pulled over this week speeding wow yeah and the guy came up to the window and he like tapped on it i rolled it down he's like he said did you buy tesla he said just want you to know you're being recorded with audio and video i really got so bullish on axon yes sir great report i actually thought that was like an actual anecdote i was like yeah i was like that that max on camera probably is yeah got out of it sweet talked him nice did you just give him a stock pick yeah no of course but no

yeah you actually hey buy uh you actually should buy uh nicolo yeah all right uh what do you have okay there has been a lot of news about forgiveness of student loans i think there was a senator not sure which that did it um it sounds good in theory but the student loan stuff forgiveness it doesn't make sense there's a good tweet here from drew dixon he said a student loan bailout is unfair to those who have foregone college already. It's unfair to those who have gone and paid back their loans and particularly unfair to the less fortunate in the future who want to go but won't be able to secure loans as easily. Now, does this feel like something in the financial world where you're treating a symptom and you're not treating the actual problem, which is college

is expensive and bloated with high administrative costs that all these administrators getting paid in the high six figures that um you know aren't providing as many value much value to students yeah i don't think bailing out student loans is a great idea and my thing yeah so the underlying problem is university is too expensive and the underlying problem beneath that is the system has made it so that people feel like they need college or people go to college without hoping for the degree but not the education yeah and so my solution has always been lower the drinking age to 18 for the united states i'm telling you that's going to filter out the people that just want to party and they'll stay home and just go to the bars and the people that actually want to

study and get educated and then if they need loans to do it at least they're getting an education so they can hopefully pay those off like it's not going to be a bunch of student loans that aren't like payable yeah you get a degree that actually uh makes sense i don't know that's my solution yeah look or or you just issue a bunch of money and joe biner are you listening make this guy the educations are yeah i'm i'm free these next few years if you need someone yeah you're not doing anything uh but yeah i'm not a fan of it yeah i am not either but i also don't i don't know i'm probably the preppy one without student loans so as someone that doesn't have it it's really easy to say i'm not a fan of that but yeah it is true without having the i mean it's not like

we don't feel bad for the people that had to take them out you know but it's not solving the issue for everyone all right last one i have here whatsapp launched payments in india do you think this can be as big as a venmo or cash app in the united states where it's probably it could potentially be a hundred billion dollar business my only question is does a hundred billion dollar business move the needle that much for facebook anymore yeah yeah it moves the needle for facebook oh what is a hundred billion what revenue or market value oh like what that's a 20 percent i can see the market cap like that's just one of those businesses that has always made sense like text payments to one another yeah the whatsapp and maybe it's bigger than 100 billion dollars but

um i mean i like it i guess why not i guess why not do it but it's kind of the thing about when i talk or think about the law of large numbers for these companies whatsapp payments in india This seems like a fantastic opportunity, but, I mean, come on. This thing's almost a trillion dollars. As an investor, I would love to see these companies get broken up. Oh, I know. There's so many parts of the business that I would love to own. AWS, Instagram, YouTube, WhatsApp.

What if they start trying to monetize? Yeah, I get mad because they're just locked up in these conglomerates. Okay, well, that's going to do it for this week. Remember, definitely don't sign up using our code CCM for 7investing unless you want great advice. With great picks. For $10 off. Right.

And then you can message us on Twitter, shout us out, or whatever you want. If you want us to do a show, just feel free to message us on Twitter or email us, chitchatmoneypodcast at gmail.com. We are not financial advisors. Anything we say or discuss here on Chitchat Money is not formal advice or recommendation. Thank you guys for listening. We'll see you next week. Thank you. this family is on the brink of civil war on september 18th mob land the hit original

series is back on paramount plus we are the harrigans don't know the net and google us from the underworld of guy ritchie do you want to step up the ladder i want karma dead starring tom hardy pierce brosnan and helen mirren do i have to do everything myself New season hits September 18th on Paramount Plus.