Google, Amazon and Tesla, Why These 3 Big Stocks Are Likely to Move Higher (Episode 50)

You look at Amazon and the way I break down the good companies, do they have a product or service that we will need now and continue to need in the future? And so Amazon has deliveries unlock, they have eCommerce shopping unlock and there's not even a close competitor that can come in and build the type of trust that they have with people to leave their credit cards and their trust that it's gonna show up on their, If it's not on their, they'll get a, So that's tough to, And so while inflation and interest rates may be high, different things like that and the buying power may be getting crushed a little bit from the regular consumer, this is a company that will survive because not only do they sell everything you need, they sell everything that you want. Yeah. And then they throw in the factor that you can get it at convenience.

So what I've told our members, when you look at the chart here, Amazon was just down to about 1 0 5 and you can see if any of your listeners do technical analysis. That was the level that the stock bounced, not once, not twice, not three times, but four times in previous to today's two rallies. It's back up at 1 21, but it was just at one 13. And so when you look at the downside potential, you say, Okay, I can own Amazon at one 13. Worst case, maybe it goes down to about 1 0 5 based on the technical, but the upside first level is second level 73rd level 80. And so you have way more upside you downside and you have a company that you can sleep well at night because when you really think, let's just using round figure, don't, you'll can't can't see Amazon falling another 50% from where it's currently at. So that's what I mean when I talk about like it's a good company from a technical standpoint, it's a good company from the products and services that they serve without even getting into Amazon Web three and the servers and things that they provide for companies.

Absolutely. So what's huge about the Amazon web service AWS is everything that we do online has to be hosted on the server. And most people don't understand that The biggest companies use aws, Amazon web server. So Facebook, whenever you see a outage on Facebook, it's not that Facebook actually went down, it's perhaps something happened with their Amazon web server. So Amazon don't get a lot of credit for that because they take a backseat to serving some of the larger companies that we come to know and love and play on their platforms. But Amazon is the power behind that and they're getting billions of dollars from major corporations, which is totally separate from the company we know as a consumer, which where we shop at.

Exactly. Because where else are you gonna go? Right? I mean the second closest is Microsoft building out their Azure server, but I mean Amazon is the dominant player that can handle the workload of the billions of users that are on a Facebook, a Twitter, or you know, any other social media site. So that is the hidden business as well that again, that's not just gonna go away overnight next year or anytime in the future that you have to worry about losing all of your money or even 50% of your money.

Yeah, I think we have to put things in perspective. No different than you know, the real estate market. It's like we think it's a slowdown because we were used to an app, normal amount of shopping, right? Meaning interest rates were low so people could charge as much as they want on top of interest rates being low, people were getting free money so you could get free money and buy whatever you always wanted or needed. Then on top of that, you had companies fighting to get employees during the pandemic. So you were making, you know, in some cases you hear people say, I'm doing the same job and I'm making, you know, five, 10,000 more. And so what's happening is now some of those people are getting laid off, right? Some of we were getting laid off, cause now comes, they're like, ok, pandemic's over, we don't have this Russia shopping.

Some of the consumers are like, we don't have free money anymore and it costs more to borrow. So now you're seeing us come back down to normal. But as we come back down to normal, that's being equated to a slowdown. But if you take in effect that numbers that they were doing before the pandemic, before the shopping, before the free money, before the low interest rates, you'll see we're really coming back down to a normal trajectory and a normal curve. And when you look at the stock chart, it also tells the same story. If you look, I think it was about February 20, the stock had hit about 1 0 8 65. So if you take out the pandemic drop and take out the pandemic boom, we had recently come back down to about 1 0 5. That was the price you would've paid for the normal course of the business pre pandemic, not including all the new customers that have accepted that is okay to go on Amazon and shop. So maybe like an older customer might not have never used Amazon. So now they started capturing customers that weren't using their products before. They also probably started to capture new customers who needed more server space and server power that they didn't have before. And those customers don't, just not at the pandemic is over because doing work business things online is a way of living now. So you have to take the word slow down and really look at pre pandemic and yourself. Is it a slow down or are we resuming the normal course of business?

Okay, In my opinion, Google is one of the best position to kinda emerge from this, you know, post pandemic sell off or interest rate increases. Because when you really think about what Google does, nothing that they do has anything to do with gas prices for the most part. They don't really have anything to do with interest rates. You're not running your ads on a credit card, typically. It's usually big companies that have a budget set aside for ads. Now you could argue that if they start selling less product, they may cut back on their marketing budget. But the reality is most companies need you to know who they are. So when things return to normal, they don't wanna leave that door open for a competitor come slip in. So unlikely that they'll see a huge dip in ad budget decline. But you know, so their biggest market is advertising.

They have YouTube advertising. So when you're stuck at home, you're doing more searching and more watching more videos, you're seeing ads. And then companies are spending not, I wouldn't say more money, but they're definitely spending money to reach you while you're at home on your computer and on your cell phone and on the internet because that's where you're at now. You're not, even if I was spending money on billboards, I would've took that money down during the pandemic cause nobody was driving, right? And so Google is perfectly positioned to withstand any gas price increases and any interest rate hikes. And yes, the consumer may be slowing down in spending, but the consumer is not really Google's customers or it's not where they drop their revenue from. They drop their revenue from other businesses paying the advertise on their platform. Now again, you could argue that if businesses aren't selling much, they may slow down on their advertising spending, but for how long before they start to ramp back up and want to capture the sales and the eyeballs of the people in the marketplace.

And then when you understand how advertising works, you have to think about it like this. Maybe a big company pulls back from spending money on Google or YouTube. Cause you gotta think about all the little entrepreneurs who are now willing to slide in and compete. Now for those same numbers, there's words that if I bid for the word stock market or investment, you will see Charles, you'll see Etrade, they're willing to pay $50 a click, not a lead, not for a sale, just for a click. I mean if a thousand people click that, that would be a huge bill for somebody like me. But when those companies say we're not willing to spend that much money for a click, we're gonna kinda pause our spending. That allows people like us to kind of slide in and pick up that slack for a lower price because we're not competing against a $50 click.

So there's also opportunity for the small guy to come in and pick up that, that revenue spend. And then also there are companies that thrive during interest rates slow down or pandemic post recovery that can come in. So for example, companies who are in real estate may start to come in and say, our interest rates too high. We're we're doing adjustable rate mortgages now. Or Bank of America has this new no money down first time home buyers program. So there are companies that now say, this is our time to advertise this. We thrive in this market. Maybe grocery stores on different things that they're selling that are on sale. So there's a huge opportunity for some people, even when there's chaos, that are willing to kind of slide in and pick up that slack so you won't see advertising go all the way away. And then what happens when the big boys come back in with their money? You know? So we'll start to see that increase again. So when I see companies like this down, I technically look at it as an opportunity to own, again that cliche word, a good company not because of their name but because of their business model.

Absolutely. And the other thing, Google, like Amazon, they don't get enough credit for their G suite. So I have my real estate license for example, but our whole company is powered by Google. So our email is the Google email, like on the front you'll see like Keller Williams or something, but on the back actually powered by Google, all of their email, their cloud based forms, everything. It's actually powered for government governments contracts that are providing us the Google Cloud services. And that's another segment of their business that they don't really get credit for. Cause we don't really think about them as a software and cloud provider to corporations.

Exactly. So the Gmail is free, the G suite is not. But again, when you give you a free Gmail, what are they doing? They're growing their advertisement base because once you log into that free Gmail, the top two emails are usually ads. You'll see the little ad thing next to 'em. So that's given more space for advertise. So it's just a beautiful business model. We could even go a step further and talk about the Android marketplace. So they're in the cell phone business, the number two competitor to Apple. There's no other better platform than those two. And so they're licensing their software to Samsung and all these other cell phone manufacturers. So there's, you know, the Samsung tablets. So that's another segment of business that they're running up revenue in that we don't really think about.

Absolutely. And they're not just gonna go away overnight because interest rates went back to 6% on a house or something.

So Google, if you go back to about, I'm looking at 2021 February, if you look Google was trading at a hundred dollars and like 50 cents, we can just call it a hundred dollars. Even after today's rally, Google was trading at about 1 0 2. So we're trading $2 higher than we were trading at, you know, February 19th, 2021. And then if you go back to trying to pull up the pre pandemic numbers, cause I always like to look at like when the stock dropped during the pandemic, Google was trading at about $76. So we're still $25 higher than the pandemic price. But again, look how many eyeballs they have now captured that are online, that are searching YouTube, that are now using Google Chrome. How many more companies had to add the G suite and move their stuff to the cloud so that their people can work remotely. So when people look at the numbers and say, well they could fall all the way back down to $75 a share, that would assume they give up 100% of all the new business that they captured because of the pandemic. And I don't see that happening. People aren't just gonna revert back to the old ways and it's proof because everybody's not back in the office either, right? Some people are working from home permanently now and they have captured all that new business as well as how many times did you look at YouTube and and browse the internet while you're at home? And if that wasn't part of your behavior, it's part of it now.

Well it's something to panic about if you're in the wrong tech, right? If you're in, you know, DocuSign, this is, you know, this isn't really for interest. Rates are going up, less people are buying homes, less people are buying homes. They don't need the DocuSign plan that's sending all the signatures as much. So there are companies that are tech based and cloud based, like a DocuSign that will fill it. But not every company is gonna fill it the same. And I think that's what traders and investors alike have to decipher. What are the companies that we want to be in that are gonna A, not fall as fast or fall as much from this and B, they're gonna rebound the fastest when things start to turn around and Google, Amazon and two of those companies,

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So the beautiful thing about Tesla, and I wanted to bring this cause I know it's a fan favorite and people probably searching for it after what happened the other day when they missed deliveries by about 14 to 15,000 deliveries. But here's the thing, you can't continue to raise the price of a car and then most people don't pay cash for a car, they finance it. So obviously as interest rates goes up, they're gonna question do I need a a new car B, does it have to be a Tesla? However, on the flip side though, depending on the clientele though, they're also gonna weigh the fact that, well I can also save on gas and not have to worry about, you know, whether gas fluctuates or not. So they they, they'll have a little bit to offset those missed delivery numbers. But I think traders and investors have to look at the big picture.

If you look at the big picture before the split, Tesla was trading at about 214 bucks and that's maybe 2 25 is where you'll see like support. We are at about two 50 right now, so we're 25 away from that support level. So that's number one, the floor. We have a floor that we're closer to that we believe buyers will come in and proper stock up. The second thing is really understanding not just the business model but the growth that's ahead. Most people are worried about what Tesla's doing today and not really thinking about the future. If you look at every car company, what are they saying? You had Ferrari come out and say we're building an electric Ferrari, you got Lamborghini, you have Rose Royce, they're gonna start working on their electric Rose Royce next year. You have four GM Chrysler all saying by 2030 all cars are gonna be electric. You have the state of California saying all new cars have to be sold, all new cars sold in the state, not used cars but all new ones sold in the state by, I forget the date will have to be electric

20, 30 maybe. But the point is that is where we're going. We're going towards all electric. And so when you look at the fact of where we're going and you say how much market share this Tesla have, they don't even have the biggest portion of what available once we transition from the current vehicles being gas, they have the biggest market share of electric vehicles, but they don't have the biggest share compared to how many gas vehicles are still out there. You also have to take into consideration they haven't released a Tesla truck yet. So they're not capturing any of the SUV market. They also have to take into consideration they are the only company at this time that have a concept and a plan for an 18 wheeler that's safer than any gas truck with a human driving it out there today. What company like Amazon who ships products Walmart, who would not invest in putting their driver in a Tesla truck and try to remove the factor of them falling asleep on the road.

The Tesla truck is supposed to have a motor or three motors on each wheel. So to keep it stabilized from tipping over in the winter storm or from Jack, what company wouldn't invest in this truck to protect their load, protect their worker, get lower insurance? So most people aren't thinking about the future of what this company can do, they're just looking at, oh they just mis deliveries in this quarter, but there's gonna be a day where they're gonna continue to beat every delivery number I believe. And then there's no Tesla Roadster yet and we're just looking at 'em as a car manufacturer company. What happens when Tesla and Harley Davidson partners together and doing electric bike? I don't know if they will, I'm just using as an example, what happens when Tesla becomes the go to company to the batteries for seas or for some type of boat and boats go T motorcycles, boats, that in that space as well.

So I think there's so much upside but of we gotta get the right now. But I think if you can look long term, this is gonna be a company that we look back on. I remember talking to my wife's grandmother and I asked this question, I said, How did you feel when you saw she just passed away at 96 years old to bless. But I remember I said you saw electricity being put in houses, like you went from the candle burning to electricity going into houses. I believe we're living through that right now. We're seeing the electrification of cars of transportation. We're gonna look back and why didn't I buy the, why didn't I own it and hold it for the,

It definitely means more competition. But think about cars today. I mean, you know, I don't know what Subaru is worth. I don't know what, you know, some of these cion, you know there's so many small cars that I would never consider buying if it's not

A Cadillac, if it's not a Lincoln, if it's not a Tesla, right? And so while there's room for everybody, but there's only really three dominant players, right? You got four GM and I know Christ, I forget their name, but you got the players Fi. Yeah, I think they even changed from that. You look at the supercar world, there's only three dominant players. You got Ferrari, you got Lamborghini, you have, okay, maybe four, you got Bentley, but you have the newcomers, right? Like McLaren, you have the newcomers like P, right? So you have these niche car companies that make a good super car. You have Bugatti as well, but big picture, there's only one Ferrari, there's only one Lamborghini. And I believe there'll only be one Tesla. Yes, there'll be many small knockoffs, but when you think about a motorcycle, there's only one Harley Davidson. Yes, there's Suzuki, there's Yamaha, right?

Those are Japanese or Chinese companies. But there's only one Harley Davidson where people are paying 40, 5,000 thousand plus for motorcycle. And I think that's what the Tesla brand represents. Not that they'll be the only one, I believe they'll be the best one. And one of the reasons I wanna say I believe they'll be the best one is because in any type of fight, right, you want the person that's 100% committed. You look at gm, you looking forward, you look at Chrysler, they still have gas, they still have dealerships to deal with. They're still trying to build the gases and see what they can do with electric Elon and Tesla is 100% focused on electric. There is no conflict of interest. There is no, well, what's gonna happen on our local dealership network? There is no, well, you know, we're worried about the gas stations. We got no commitment to anything other than building the best electric vehicles that we can build. And I believe when you're that laser focused with no distractions, I think everyone else at best, they only can be second.

So again, that's where I'm saying they have the opportunity to license their battery out for all these other products that they could go into. You know, motorcycles, they can go into boats, you know, who knows, maybe they come up with a sweet battery and partner with Apple and they're the new provider of a battery for an iPhone. And so that's a whole nother business. That's not even the business that they're really monetizing right now, if that makes sense. Elon Musk even says like we open source our technology so people can come in and use it now don't get it twisted. The guy's smart. If you open source, use his technology, he also gets to see probably what you're working on, get some data on how you're using his technology. So it's kind of a tongue in cheek thing. It's like anyone can come in and use our software and our battery technology, but you get to see how they're improving it and possibly come in and I don't wanna say steal it, but borrow it or make it better. Borrow

He's a smart, but that's the line of business that they're not even capitalizing on yet. They could become the world's best battery supplier.

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I appreciate you having me on. Thank you.