SPEAKER_01
So, Sam, tell me this. Do you like watching sweaty men fight to the death in their underwear? Me too.

SPEAKER_02
Every weekend. I built my Saturdays around it.

SPEAKER_01
Well, I think you should invest in your Saturdays. My pick for Stock up a Lose of 2024 is...

SPEAKER_00
I feel like I can rule the world I know I could be what I want to I put my all in it like the days off on a road like a road

SPEAKER_02
All right, we're live. Sean, did you just go to the Black Friday sale at Tommy Bahama? What's going on?

SPEAKER_01
I went into the old dad's closet today and got a little shirt because it's a special occasion and I needed to dress up. That's your version of dressing up? Yeah, this is up, dude.

SPEAKER_02
All right. What are we doing today?

SPEAKER_01
Today, this is Stock a Pallusa, the first ever first annual Stock a Pallusa, which you may not know what that means because we made it up. Basically, me and Sam said, what if we did an episode where we pick a stock? So each of us are going to go through the stock market. We're going to each pick a stock that we have to make a case for.

If you've ever seen, there's a conference called the Zone Conference. And it's kind of like a TED Talk, but for stock pickers. And all the biggest names go there.

Bill Ackman goes there and Druckenmiller and whoever. Chumath, they get on stage and they make like a 20 minute case for a particular stock. Why they're long or why they're bullish on something.

And those guys are good and those talks are fun. We wanted to try it too and do it our way. So the MFM style of this, it's called Stock a Pallusa.

Both me and Sam have picked a stock. We do not know what each other have picked. We're going to get 20 minutes each to present.

And so if you're on the like just the audio podcast feed, I know I've been telling you YouTube is where it's at. Today, YouTube is for sure where it's at because we got slides. Your boys came prepared and I have data.

I got charts. I have a whole bunch of stuff here. So you want to go to YouTube where you're going to actually be able to see the screen and see us sharing slides.

So we got 20 minutes each to do it.

SPEAKER_02
All right, everyone, we have a quick ad for HubSpot. But I want to let you know I actually use HubSpot and I use their sales tool, which is what this ad is for. HubSpot sales platform, it makes it just easier to sell stuff, to do it faster, to look at your pipeline, to see what sales are going to happen.

Just prospect to cold the outreach and get more customers faster and easier. Plus, it's easy to learn and free to start. So you guys can check it out, HubSpot.

com slash sales. For the listener who are on not YouTube, we have to ask them to do something when they finally go to YouTube.

SPEAKER_01
That's right. That's right. If you go there and you don't hit the subscribe button, a curse is placed on your family for seven years.

And I don't want that for any of you guys. So go ahead and hit subscribe when you're there because it's super important for your family.

SPEAKER_02
It's a simple pitch. We put all this work in and they don't have to pay us back with anything other than a subscribe on YouTube. It's free and easy for them and it makes just a ton of difference to us.

So just go do that. All right. Now, what are you saying?

SPEAKER_01
Okay. So you're ready to begin? Do we need us? Should we just go into it?

SPEAKER_02
No, rules. Okay. So we're kind of making up the rules on the fly. So we're going to do about 20 minutes.

So you get 20 minutes. I'll ask questions, but I'll try not to interrupt too much. And then we'll do like, we'll talk about it for a few minutes afterwards.

But then I'll pitch and then the last 10 or however many minutes left, we'll each vote. But then in the YouTube comments, you guys actually have to vote who wins. But when we say win, what does win mean here? Because we're not exactly, we're going to be, you guys can like, we could play a drinking game where it's like, count the disclosures.

You're going to see this disclosure constantly of saying, we have no idea what we're talking about. It's just something fun and cool. But how do we base win on? Is it by showmanship? Is it by what company do you think is going to have a long term? The best case.

But what does best mean? A 10 year?

SPEAKER_01
Well, I don't know. And that's part of the fun here.

SPEAKER_02
Making it up as we can. We can say 10 years.

SPEAKER_01
Is it just entertainment? Because that's different. Well, this is definitely entertainment. But the entertainment has to have a foundation of, you can't just be making shit up, right? We got to have actual good insights or good analysis presented in a wonderful way.

Right? The way that any presentation is sort of scored, you have style points and you have substance points. And we're going to take both of those factors into consideration to pick the ultimate winner. I don't know if you have ever gone and watched any of these, by the way.

Like, you know, in I remember when Chamath went on stage in 2016 and he was like, there's a multi trillion dollar company hidden in plain sight. And he made a case for why Amazon was going to get to three trillion by 2025. This is back in 2015.

What is it now? It's currently like close to two trillion. And we got a year left. He's not far off.

He then went up and did a case for box and I bought a shit ton of box stock. And box, then just shit the bed for the next three years. And if you go back, all the smartest guys, Bill Ackman, he goes up there and he makes a case for some housing thing.

Terrible stocks, right? I went back and I actually charted how these picks did really bad. So actually we might be just as good as them because we're also going to be terrible.

SPEAKER_02
What's considered good for these guys? Like, is it like a batting average? Or it's like, if you're 300, if you're, you know, which 30 percent, right? You're the best.

SPEAKER_01
No, I think it's just based on the returns, right? So like how much you put in versus how often you're right, right? The multiple of those two. So, you know, they just got to get enough right with the overall returns are there. But we should say this.

First slide is the most important slide, which is that this is not financial advice. This is entirely for entertainment purposes only. My lawyer has told me to say that, but it's actually true.

This is only for entertainment purposes. I forbid you from actually investing in any of the things that we talk about. I am a idiot when it comes to the stock market.

So if you take my financial advice, I consider you an idiot, too. That's my disclaimer.

SPEAKER_02
There needs to be a song where it's what did you say? Throw your hands in the air and lose your money like you just don't care.

SPEAKER_01
Exactly. Stock of pollution. That's the stock of pollution.

All right, let's jump in. All right, my turn. I'm going to start my clock.

Let's go. OK, so. Here's the general idea. If you're buying one stock, Sam, I know you're an index fund guy, right? You like to go into the S.

P. 500 and spread out your risk. And you're right.

If you're buying one stock, you're taking more risk than the index. And if you look back last 10 years, the index has given you about a 10 and a half percent annual return over a 10 year period, 10 and a half percent over 10 years. So that's we'd have to beat that to justify taking the additional risk of picking one stock, because that's going to basically 2.

7 extra money in a 10 year span. So if you want to do a little better than double, almost triple your money in 10 years, just put in the S.P. 500. So we're looking for something that if we're going to take more risk, we need to get more reward. So here's what I'm thinking.

I decided to peg for what do I think could get me a 5X in 10 years? OK, 5X in 10 years, double what the S.P. 500 is going to do. So which stock did I pick, Sam? I'm sure you're wondering.

Well, let's ask the Oracle of Omaha, a.k.a. Buff Daddy, what would Warren Buffett do? Because I'm not a great stock picker, so I wanted to go and study the great stock pickers of all time and look at what would be their criteria. What are they looking for so that I can learn from them? And I went back and I learned everything I could from Warren Buffett.

And I realized that there's five big things that he looks for. OK, so you're ready for the five big ones? The first, understandability, meaning he doesn't invest in shit. He doesn't understand if it's too complicated or if it's outside of his circle of competence, he's simply not investing.

And so the idea is, is the business simple enough that an idiot like me could understand it and that ideally an idiot can even run it. Right? Such a simple business. So understandability.

Number two, an economic moat. So we want few competitors. We want some pricing power.

And we want to make sure that this business is so defensible that it's going to be around in 50 years because, you know, Warren is usually a buy and hold investor. He's not really trying to trade in and out in time of the market. He's looking for time in market and he's looking to be in the in the company for a long time.

And so we want an economic moat, something that's super durable. All right. Number three, competent management.

So management basically is a strong management team is always going to be a you know, big benefit for anything and for any stock. OK, last last two, margin of safety means we got to be buying this. We can't be buying this at some extreme price, even if it's a great company.

If it's massively overpriced, it's too hot in the market, then we're taking too much risk. So what we want to do is buy dollar bills for 80 cents. Right? That's a that's a great margin of safety.

And of course, lastly, strong financials. So high earnings, low capex, low debt. That's really what we look for.

OK, so this is why Warren Buffett is buying brands, not stocks. I love this line actually in my research. He goes, don't buy a stock by a company.

Subtle difference. But he's looking to basically like what would what don't try to buy the stock because you think the price is going to go up by the company because you think that company is going to endure and be successful and just grow steadily for a long period of time.

SPEAKER_02
That's a new thing that he did. So it's not new for. I mean, he didn't start doing that until his 60s.

So before he was buying stocks purely in the financials, he's like, I don't care what they sell. And then he like met Coke and then he like invested in Washington Post. He's like, oh, no, the brand is actually where it's at.

SPEAKER_01
Exactly. He used to do the cigarette butt investing where, you know, if there's two puffs left on the cigarette, OK, let's do it. There's value there.

But he credits Charlie Munger for showing him that actually it's better to pay, you know, a fair price for a great business than a great price for just a fair business. And so that's why he's now invested in Apple Bank of America, American Express, Coca-Cola, Geico. These are brands that have been around for 50 years.

And that's what he's looking for. OK, so simple Buffett formula just to summarize by brands that you understand that'll be here 50 years from now that spit off cash at a fair price. If you do all that, you can hold forever.

You've done well. So I looked and I looked and truth be told, I actually started with one in mind and then reverse engineered this whole presentation. But I have one.

So, Sam, tell me this, do you like watching sweaty men fight to the death in their underwear? Me too.

SPEAKER_02
Every weekend, I built my Saturdays around it.

SPEAKER_01
Well, I think you should invest in your Saturdays. My pick for stock of Palooza 2024 is TKO. TKO is the stock that owns WWE and the UFC.

And I think that TKO is a Buffett stock. And here's Buffett, you know, looking ready for WrestleMania. Why is it? Why does it fit the criteria? So understandability, very easy to understand.

It's a holding company that owns these sports franchises and owns these leagues underneath them. OK, that's the that's all the businesses. It's it does nothing else besides that.

Finding is the easiest thing to understand in the world. I don't know if you've heard this great thing that that that Dana White says. He goes, let's say you walk out into a sports field on a Sunday and there's a soccer game over here and a basketball game over there.

And these guys are playing flag football. And you could go look at any one of those directions. You might have a favorite sport.

But if somebody else fight and there's a fight going on, everybody's head's going to turn. It is a human nature thing that we like to watch people compete and fight. And it is global everywhere in the world.

People don't you know, if you go to China, people don't know the rules of football. You come to America, people don't know the rules of cricket, but everybody understands the concept of these two guys are going to fight each other. Everybody around the world.

And so it is the easiest to understand product and business. The business is very simple. Fans pay to watch fights, people pay pay per view.

Sam, how much do you think you've paid in pay per view per year? What are you spending on your UFC fandom?

SPEAKER_02
So I would probably say I buy the five a year. So that's five hundred dollars, I think. And then I only have a ESPN subscription.

Like, dude, I don't know anything about sports. I just found out that the Super Bowl is this Sunday. I thought it was in November.

I only I pay for ESPN just for that. So that's 60. And then I attend one to three a year, which is quite expensive.

That's a thousand dollars a show, at least.

SPEAKER_01
Exactly. High LTV fans. OK, so let's let's go through these down.

Economic mode. Name the competitor to the UFC. Name a competitor to WWE.

They've all come and gone. Bellator was the most well funded competitor to UFC. It was funded by Viacom.

They put hundreds of millions of dollars into this thing. It failed and they just sold it for, you know, less than what they put what they invested into it. They sold it for a hundred million bucks.

The number two competitors sold for a hundred million. The UFC sold for four point two billion. So that's the gap between one and two.

Growing up, I love WCW. That was the big competitor to WWE. Guess what? It folded and they took all the wrestlers, AEW, all those things.

Basically, these two brands have over 95 percent market share in their market. This is total monopoly, more than Google has in the search market.

SPEAKER_02
Do you know how popular WWE is on YouTube? Have you? Did you look into that?

SPEAKER_01
I have. I have a couple of slides later. They dominate social media.

SPEAKER_02
It's the tenth, the tenth most popular channel on all of YouTube is WWE.

SPEAKER_01
That's insane. Right. Like the fact that these two have more market share in their market than Google has in the search market shows you they just kind of complete under dominance and the fact that competitors have come and gone. People have taken their best shot and they haven't been able to touch them.

So you have two brands that have been around for a while and will be around for a while. OK, competent management. We have Ari Emanuel.

If you've ever seen on Taraj, just the character Ari Gold is based on Ari Emanuel. He is an absolute power player, power broker in in the entertainment business. You have Dana White, the guy who's basically been a founder CEO of this, essentially, since they bought it for two million bucks, bought it for two million, sold it for four point two billion.

And he's he's still going and he's still going strong. This guy is an absolute animal. And we have Egan Durbin, who's with Silver Lake Partners.

That's their kind of institutional capital behind this. And that guy's also, you know, got a pretty crazy track record with multiple billion dollar or multi billion dollar plays like Skype and whatnot. So super good management team.

OK, margin of safety. So I don't know if you know how much money these make, but they basically the combined entities generate over a million dollars. Oh, sorry, a billion dollars a year of EBITDA and it trades at about 14X.

So it's about a 14 billion dollar market cap company right now with four with with a billion dollars of EBITDA. Just to put this in a comparison, if you have C plus WWE, two full like leagues are 14 billion, the Phoenix Suns, one NBA franchise just sold for five billion. Right. So this is basically three Phoenix Suns and you get the entire universe of combat sport of of of of, you know, fighting entertainment, which is wrestling and UFC, everything except for boxing. F one, which is, you know, to me, seems super niche, like F one is is so so niche.

Do you know how much F one just sold for? No idea. Eight and a half billion dollars. And F one has a big problem, which is no matter how popular F one is, they have to pay out to all the teams, the franchises.

So, you know, half the revenue goes to the Aston Martin team and then the Mercedes team and whoever else. So you have C doesn't have any of that. All the fighters are independent contractors.

They don't even pay him salaries. There's no guaranteed salaries. Independent contractors who make about 15 to 17 percent of the overall revenue goes to the fighters way less than every other sport.

No teams, no, no, no rev sharing with anybody, basically. They get to bring that up later in your presentation. We do. I do have a wrist slide, which is around that. Yes. And the best part, this is all AI resistant. Like we don't know what the hell's going to happen with AI.

AI is pretty clearly the next big thing. And it's going to wreck a bunch of industries going to redo the way that insurance works and the way that cars work and the way that, you know, software is built and all this stuff. How are you going to use AI to generate like you can't use AI to make two guys fight in a ring? It's not going to happen.

And so this is an AI proof industry, which is nice because Warren Buffett, Buff Daddy, he's looking for things that are not going to change. And I think this is not going to change.

SPEAKER_02
All right, everyone, a quick break because I want to fill you in on a little experiment that I'm doing. I've got a new project. It's called Money Wise.

It's a personal finance podcast for high net worth people or young people who are on their way to becoming a high net worth. When I made a little bit of money, I didn't even know how much money I should be spending each month. Should be 10,000, 30,000, 50,000.

And I didn't really have a lot of people to ask. So I created a podcast called Money Wise because I wanted to figure out what are some of the things that people who have a lot of cash and who have a high net worth, what do they do with it? The first episode is with a friend of mine. He sold his company for $200 million when he was 31 years old.

He gets super transparent about his monthly expenses, his portfolio, how it impacts his happiness, everything. And so I want you guys to check it out. It's called Money Wise.

That's one word. You can find it on my Twitter bio. I'm theSampar.

Or you can just type in Money Wise on Apple, Spotify, and YouTube. All right, back to the pod. All right, everyone, this episode is brought to you by The Product Boss.

It's a podcast hosted by Jacqueline and Mina, their friends of mine. They're part of the HubSpot Podcast Network. And it's a podcast about taking your physical product sales and strategy to the next level.

And they deliver the podcast in an hour-long workshop style strategy. Some of their most popular episodes are debunking the myth of daily social media obligations, which dives deep on how you can grow your social media presence from an audience perspective and get audiences eager to buy your products without feeling overwhelmed. They give a comprehensive playbook that's filled with tips and strategy for building a big audience that align with your business objectives.

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SPEAKER_01
All right, last one, it's growing nicely. So it's growing 20% a year right now. But there's also the big prize with any sports league is the media rights deals.

And the media rights for both of these are coming up this year and next. And so they have a chance to renegotiate and basically double what they're getting paid for by all the streaming companies, by Netflix and by Amazon and ESPN and all the companies that want. They need live sports because live sports are one of the only things that people watch concurrently and have to look at the ads because they're watching during the thing.

There's no DVR. There's no binge mode. There's no streaming.

And so live sports is one of the few live sports assets that exist. And the media deals are coming up and they might be a lot bigger than people think. All right, last few slides, consistent cash flows.

So these are profitable companies. They spit off cash. They're spitting off a couple hundred million bucks a year for free cash flow.

And they don't need to invest it. They don't own a ton of real estate or they don't have to buy more machines in order to grow. They just keep putting it on shows.

It's all variable. A couple of the risks that are worth mentioning. It's got a bunch of debt.

They use debt to buy the franchises, these leagues. And so they still have a few billion dollars of debt. The last thing, stock performance has not been great.

I think this is one where we're going to have to buck the trend. We're going to have to know what the market doesn't know right now and we're going to have to go ahead and outperform. What date did that drop? So they merged in like mid-2023.

But does that drop because Vince McMahon? Not just Vince McMahon. I think basically what happened was they merged. People didn't understand the terms.

They didn't understand what was going to happen. What was the plan? All that stuff and the Vince McMahon stuff happened at the same time. And so they dropped about 15 percent on the merger, which is kind of crazy before they were both public and they were both trading at about eight to 10 billion in valuation.

And so when they merged, they were supposed to be like a 20 billion dollar entity and they're currently trading at 14 right after they merged. And so that was that's what happened last year. Lastly, a couple of the risks like you talked about, fighters not getting paid enough.

So their costs could go up if the fighters ever unionized and were able to collectively bargain, which they haven't done, but the NBA and NFL all has. And lastly, I don't know what's going to happen if Dana ever leaves. He is the powerhouse and the CEO who's driving this thing.

He's cashed out. So he does not own the same stake that he owned before. He's not even on.

If you're going to look at the stock filings, he's not on the cap table. So he said he has skin in the game still, but it's not listed anywhere. So I'm not sure what he has.

And he might, you know, might retire one day. And I think that would be a big shock to the business like Zuck retiring or or Bezos retiring. You know, it can affect the business.

SPEAKER_02
Can I add a few a few risks? Let me add a few risks. Yeah, go for it. All right.

First, Dana White is insane. So he's mostly insane in a good way. But there's a lot of liability.

There's a lot of liability in this industry because we're talking about grown men fighting in their underwear in front of millions of people. The person who likes that and runs that, as well as the person who actually does that in order to be great at that, you have to be insane. And so what that means is there's been risk with Dana.

Dana has said a lot of crazy stuff. I don't even think that I'm not even going to say if I think it's right or wrong. That it's irrelevant.

What's irrelevant is that a lot of people think it's wrong. He also got in trouble for smacking his wife. And that was on video.

Vince McMahon is now in trouble for not even sexual harassment. I think it's beyond that. And then also like the third famous guy in the UFC right now, Sean Strickland.

Again, I don't care if you like what he says or dislike what he says. There's a lot of people who dislikes what he says as it regards to like the whole trans thing and gay thing. And so inherently, there's going to be all types of nutty people like that.

I think it won't impact the business at all. I think it's actually going to make the business better because the people who are behind them are going to be harder behind them. And I think but I do think it will scare institutional money.

And that's basically my downside. Well, in that lawsuit, that lawsuit is actually a pretty big lawsuit.

SPEAKER_01
So I think that the only counter to that is usually the risks are what ifs. All the things you mentioned have already happened.

SPEAKER_02
They've already happened.

SPEAKER_01
They've already happened. And the business is doing fine. Right. So like Dana has been saying crazy stuff for 20 years. OK, I guess he'll just continue.

Continue as is. That's business. That's a risk.

That's a risk. That's a what if. I think there's some some risk there, but not that much.

In fact, I would actually say the UFC has shown tremendous anti fragility. So for example, if this is a business that depends on live events, it's all based on live events and it survived COVID. It could survive anything.

Right. Live events had to all shut down and the UFC figured out a way. Why? Because founder CEO, he's got the willpower.

The guy went to Abu Dhabi, created a bubble and started created something called Fight Island and host of the fights in a bubble on Fight Island himself. You know, they found a way around the pandemic. I think they could find a way around.

SPEAKER_02
But I'm an idiot. Keep in mind, I'm an idiot. I don't think that's going to impact any of the business.

I think all those things are going to make their business, their revenue, the profit greater. I just wonder how will that impact like if Fidelity or one of the big companies wants to buy a huge chunk of their of the stock.

SPEAKER_01
Yeah, yeah. I think that's that's fair. All right.

Well, last couple of things. I think the global nature of this is underrated. And so when you think about where does growth come from for these types of leagues, it comes from two things.

One is streaming streaming deals, which are getting bigger and bigger and bigger. And the other is globalization. I don't know if you know, but the NBA does like crazy amount of work to globalize.

They have like camps all throughout Africa and India. They go every summer. They broadcast games, they cut deals to broadcast games.

They will play a game in Europe to try to get fans. The NFL does the same thing. They play a game in London to try to get fans there.

But the UFC actually like inherently has that they get champions from all over the world.

SPEAKER_02
But they've never got to Africa. They've I think maybe one time they've done one event in China.

SPEAKER_01
Basically, China, India and Africa are still untapped, but they're proven that they have product market fit. They have they have fans that just haven't done the events there yet. In the biggest case for this is really that these leagues they develop lifelong fans.

You know, you've been a fan and I would guess that 20 years from now, you're probably still going to be a fan. Your kids might become fans. This is how sports works.

It's basically generational. People watch them till they're, you know, my grandparents will watch sports, but then they'll take their kids to the events and they'll get their kids involved and they become fans as well. The UFC is only 30 years old.

That's incredibly young when it comes to a league like this.

SPEAKER_02
And you know what they're better at than everyone else? Telling stories and creating characters. They are without a doubt the best at this. They kick ass compared to any of the other leagues.

SPEAKER_01
So check this out. This is on Instagram. The NFL, which is the biggest, most profitable sports league in the United States, biggest, most profitable league has 29 million followers.

The UFC has 39 million followers because they are better at social media and they're better at storytelling, which is essentially saying they're better at the way the world works now. And the NFL was better at the way the world worked 20 years ago. Same thing.

You know, here's YouTube. Here's the YouTube channel has 17 and a half million subscribers for the UFC on YouTube. Baseball, which has been around for whatever, 100 years, 4.

9 million subscribers. It's insane how they get dominated by this. And so they, you know, you get to you get to ride on the back of that.

And the other thing is that Ari Manuel's company, which bought bought these, they're just better at negotiating media rights. That's what they've been doing for their entire career for, you know, actors and television shows and whatnot, better negotiating sponsorships. If you look at where the UFC was when they bought it versus where it is now, you know, it was unprofitable there and growing, you know, growing at it.

OK, clip. Now it's growing faster and more profitable. And it is profitable because of the work that they've done.

WWE just kind of a 10 year, five billion dollar deal with Netflix just for one of their shows, which is kind of insane. It's going to go from USA Network to Netflix. These are now like three hundred million dollar a year streaming deals that they're picking up.

And that is all, Sam. Thank you very much. Ladies and gentlemen, Stockpiluza.

SPEAKER_02
That was very good. That was very good. My bias is heavy here.

I tell people they ask like what my hobbies are if I paid attention to sports. I say I paid attention to only two sports, fighting and the other ones way nerdy or track and field. I like track and field and UFC.

I'm a super fan and I think there's so many super fans like me. I don't know how those super fans compared to the other sports. I don't know if it's as strong, but I'm a huge fan.

The stock. It's a it's a good brand. I agree.

I think the risks are too high, though. I think there I think they're Dana's is do you think if someone left, he could you said that on your second point, it was like anyone can run it. Do you think someone can run it as good as him?

SPEAKER_01
I do think you get the benefit of the kind of founder led company when you have Dana there and you would lose that if he if he left. So I do think it will continue to run, but I don't think you'd get that X factor back of what Dana brings to the table and what Vince McMahon brought to the table till he was. How old is Vince McMahon? He's like 80 or something like that.

The guy ran the league for like 50 years or something.

SPEAKER_02
And he was a character.

SPEAKER_01
He was a character on the show in the show. And I think Dana is a character in the show.

SPEAKER_02
I think Dana is the most popular UFC fighter.

SPEAKER_01
Right. Well, Connor, but like I think he could run this thing for like 30 more years.

SPEAKER_02
Maybe. I think maybe. I think that I think that running this type of league is harder than any other league.

Maybe F1 actually would be really challenging because they're like they kind of seem like divas. But the UFC, I think, dealing with these types of fighters, have you ever hung out with a professional fighter or like up and coming professional fighters? I've been around a handful of them. They're insane.

They're insane. They're hard to work with. They're they're nuts and it would be very challenging.

And also the lawsuit that they have. So to put that in perspective, you said that they pay their fighters 14 percent. How much does the NFL pay their NFL NBA or about 50 percent?

SPEAKER_01
That's the collective bargaining. That's what they negotiated.

SPEAKER_02
And right now you made a case that they're a monopoly. That's the exact case that the lawsuit is trying to bake, which is that the UFC is a monopoly and that you guys you have to allow us to do collective bargaining. And I have looked into it a little bit, but it seems like they've got a great case and that could meaningfully change the economics.

SPEAKER_01
It could. It could. That is I would put that as the number one risk to shift the economics.

SPEAKER_02
Dude, there's some guys like they'll say in the post fight interviews, they're like, I'm the champion now. Eight months ago, I was driving Uber and they're like, and I'm still driving an Uber. Yeah, well, like to put this in perspective, there's this guy named Francis Negan, you.

I think he's from Cameroon. He's like the the American dream. He came over here with nothing.

I think he worked in like a mine, you know, like a blood diamond type of mine, like crazy stuff. He's now champion. Do you know how much money he was? He was a world champion in the heavyweight division of the UFC.

He looks like an animal. It would you think of a heavyweight champion? This is what you want this guy to look like. Look like beautiful story.

Great guy. Do you know how much he was getting paid per fight?

SPEAKER_01
I feel like it was like 500 K or something.

SPEAKER_02
It was about $600,000. That's how much this guy was getting paid to fight the scariest people on earth.

SPEAKER_01
It's insane. I know a mid-level engineer at Google that makes more than that. It's insane.

SPEAKER_02
The baddest thing on the planet. Yeah, it's insane. It's it's insane.

And so that needs to change. I think the further to be true longevity for the sport. And if that changes, there's actually going to be bad stuff for the business or at least it'll be less good.

But great presentation. I'm a fan of UFC. I think that was a great presentation.

All right, your turn. All right, now it's my turn. So look, we said the disclosure already that this really we don't know anything.

So I'm actually going to not even focus too much on the numbers. I'm going to focus on the story. And I just want to put this disclosure up front.

Now, before I get into this, I want to tell you a few other companies that I looked at. I looked at Rivian. I looked at 23 Amid.

It's a total shit show. I looked at Container Store because there you that's the next Amid stop. And of course, I looked at HubSpot because I own HubSpot and I'm trying to do a little pump and dump scheme.

I'm kidding. I'm kidding. I'm not going to talk about that.

Now, I was trying to think about this and I was like, should we do like a Wolf of Wall Street pitch? You know how he's pitching penny stocks where he's like, hi, John. The reason I'm calling is I've got this new patent technology that has huge upside potential and little downside potential.

SPEAKER_01
Is this something where I could maybe get in on the ground floor?

SPEAKER_02
Yeah. And then I realized I'm not going to do that. I'm just going to tell you, I'm just going to base all of everything that I'm doing here on what do I think is cool and interesting? And so what do I think is cool and interesting? Look, if you want to make great money, you invest in Amazon.

It's a slow predictable. It's going to be, I think it's a great company. But that's not interesting to me.

We all know that same with everything Elon's doing. At this point, he's the man. I can't invest in Tesla.

I can't invest in anything he's ever done. That's dorky plus look at him. I don't want to invest in that.

SPEAKER_01
Yeah. I like how you use the pre-plastic surgery. Elon won there.

Nice.

SPEAKER_02
There's a point. I've got a point here. And then I looked at Bill Gates and I looked at this guy.

He's like, you know, Microsoft also great company. I like the CEO. They're doing great things.

But we've been there and done that. I think it all makes money, but it's a little bit boring. It's not for this podcast.

So what is interesting? Look at this guy.

SPEAKER_01
Do you know who that is? That is the LVMH guy, right?

SPEAKER_02
The LVMH guy. We're going to call him Escargo because I don't know how to pronounce his name. What's his name? Bernard.

Bernard all. How do you say his last name? Bernard Arnold. Yeah, we're going to call him Escargo.

Bernard Arnold as we call him here on MFM. The slug eating, suit wearing, beautiful Frenchman. That's what we're going to call this guy.

So he's great. So LVMH, here's what they do. This isn't my company, but this is the person I got inspired by.

So they own 100 plus luxury brands. Dior, Fendi, Sephora, Tiffany's, Hublot. They own luxury brands.

And the reason why this guy got into the luxury business, and I found three quotes by him. He used Warren Buffett as your kind of like rule setter for how you're going to pitch a stock. I'm going to use this guy.

He used to own a construction company. And then he got super into luxury businesses. And I'm going to explain three quotes as to why he said that.

So he said, in luxury business, you have to build on heritage. And so have you ever heard that phrase, Lindy? So Lindy's a popular phrase that's floating around on the Twitter circles. It basically just means the time of which something has existed is directly correlated to the time that it will continue to exist.

So something that's been around for a long time will likely be around for a long time. Something that's brand new and hasn't been around for a long time can go away easier. And so in order to build a luxury brand, I'm going to attract this guy.

He's like, I need something that's been around for a long time, and that means it's going to last a long time. He also said luxury goods are the only area in which it's possible to make luxury margins. High margins.

So I've got to find a company that can last a long time because it's been around for a long time. It has high margins. And then the final thing he says is affordable luxury.

Those two words, they don't even go together. Meaning, I've got to find a product, a company that sells a product that is expensive and exclusive. Now, what fits that bill, Sean? Originally, I thought of James Bond.

James Bond, that's the definition of cool guy and exclusive. And you dream wanting to be him, but it's going to be impossible to attain. And so the product and the brand that I almost chose was something that James Bond is synonymous for.

Do you know what that car is?

SPEAKER_01
The Aston Martin, I believe.

SPEAKER_02
That is an Aston Martin. And so Aston Martin, that kind of got me interested. Aston Martin has a strong brand, but they have a shit multiple.

They've got a decent product, but it's actually one of the least valuable car companies in the world. I believe right now it's only trading at $2 billion. So it's not that big of a business.

Now, Aston Martin, it's been around for a long time. I think it's going to continue being around for a long time. I think a lot of young men dream of having an Aston Martin.

Their margin is shit. So it's been losing money. So that kind of gets it out of the way.

I can't do that. And in terms of being exclusive and expensive, it is expensive, but because not that many people want an Aston Martin compared to all the other cars, I wouldn't exactly say that it's that exclusive. So Aston Martin, not good enough.

So what is good enough? So I found a company that has been around for a very long time. It's got huge margins. In fact, it's got the best margins in its industry.

It's very expensive. And it's so exclusive that even if you wanted to buy it, in many cases, you cannot. Do I have your interest?

SPEAKER_01
You have me interested. You had my attention, and now you have my interest.

SPEAKER_02
OK, so you probably don't know who this person is, do you? I do not. All right. This man, he's no longer around, but he was born in the early 1900s.

His name is Enzo. Enzo started out as a race car driver. And he drove, I actually believe he might have drove for Aston Martin at one point, but he also drove for Fiat, an Italian car company.

And he was so into race car driving that he goes, these Fiat's, they ain't cutting it for me. I have to make my own car, and I'm going to make the best car. He goes, I'm basically just going to make an engine, and I'm going to put wheels on it.

And aerodynamics be damned. That's what you say if you have a shit engine. I'm only going to focus on the engine.

And he was obsessed with making an engine. And eventually, other people got obsessed with his engines. And so in the first year, he made a car for himself.

In the second year, he sold two cars. In the third year, he sold only about eight cars. And he kept slowly growing.

And eventually, that company became Ferrari. So Ferrari is my company. And you're going to like Enzo Ferrari.

Enzo Ferrari, he's a crazy person. He's sort of like Conor McGregor, that quote that we have from Conor McGregor. He goes, I'm like Vincent Van Gogh, I've lost my mind in this game.

Enzo Ferrari is like that. He's got this great quote where he goes, a great mania to which one must sacrifice everything without reticence, without hesitation. So he's one of these guys who has totally bought into his brand, sort of like Dana White, where he lives and breathes this shit.

He was known as being kind of a shit dad, kind of a shit husband. And all he cared about was Ferrari, making it great. So let me give you a little bit of high-level facts about Ferrari.

In 2023, the revenue grew 17% to about $6.5 billion. They're very profitable.

Their net profit last year was $1.3 billion. Now, here's an interesting stats.

An interesting stats. So Honda last year sold something like 1.2 million cars.

Ferrari only sold 13,000 cars. Their market cap. Now, when I started working on this, their market cap was a lot lower.

They released some really big news on Friday and their market cap skyrocketed, and they are now worth $72 billion. That makes them roughly this eighth or seventh largest car company in the world. And they're still growing at around 23% a year.

Unfortunately, their PE ratio is crazy high. It's like 54, so 54 times earning, which is like one of the highest. But check out this.

Look at the highest or the most valuable car companies in the world. Number one, Tesla, number two, Toyota, and then Porsche Mercedes. And then you go down to Ferrari, $68 billion.

I think on Friday, it was like $75 billion. So they're more valuable than BMW, more valuable than Volkswagen, more valuable than Honda, and they only make something like 13,000 cars a year. Isn't that insane? That's crazy.

So here's my case as to why this is an interesting company. I'm going to try and talk a little bit about the numbers, but again, that's not our specialty. So I'm going to try and say a little bit away from it.

But they are a cash cow. They are the cash cow of the industry. In fact, Ferrari makes more profit per unit.

Every unit they sell, they make more profit than any other car maker in the business. Some car makers, in fact, like a GM, they actually lose money and they hope to make money through their other models or through selling parts or fixing the cars. Ferrari makes a profit on everything they make.

Last year, sorry, in 2021, they made over 100 grand per unit sold. The second place company that sold the, profited the second most was Tesla at $6,700.

SPEAKER_01
Wow. So, you know, whatever, 15X more profit per car than the second place person.

SPEAKER_02
But it gets even crazier. So in order to make the same amount of profit that Ferrari makes per car, Ford has to sell 900 cars. OK, and you think Ford, that's just a middle line car.

OK, what about Mercedes? Mercedes has to sell 67. BMW also has to sell 67. They make the most profit of any other luxury car maker in the business and then make more profit per unit sold than any other car in the industry.

Now, here's where it gets even crazier. Crazier. You don't choose Ferrari.

Ferrari chooses you. So, did you know about this with Ferrari, about their wait list?

SPEAKER_01
I did not know this.

SPEAKER_02
All right. So here's how it works. And there's a lot of mystery around this.

Like they don't even openly say exactly how it works. But let's say you want to buy a base Ferrari, like the cheaper models. A lot of times you can just go in and buy it.

But if you want to buy the more expensive one, what they do is they have got a wait list and they look at the wait list. And in order to buy the fancier ones, oftentimes you have to buy three to four of the base models. And so Jay Leno, you know how Jay Leno is a big car nerd.

Yep. He openly says he goes, I refuse to buy a Ferrari because of how elitist they are. You have to they're not.

Well, he's like, obviously they're not the every guy, every man car. But you can't even buy one if you want one. And you have to once you buy one, if you if you're able to acquire one, you have to sign paperwork that says that you're not going to put any stupid parts on it.

You can't repaint it certain colors. So there's this lawsuit that just ended recently where this famous celebrity painted his Ferrari pink and they sued him. And he had to pay them three hundred and fifty thousand dollars because he posted it on Instagram.

They said that that hurt their reputation. Justin Bieber did the same thing. Justin Bieber bought a car and he did three or four things that were crazy.

The first thing is he just left the car at the at a hotel parking lot for like a few weeks or something while he traveled. Another thing that he did was I think he took like the Ferrari badge off of it. You know, some people debadged the car to be cool.

And so they banned them. Justin Bieber could no longer buy a Ferrari if he wants to. Another thing is bummer for the Bebes.

Bummer for the Bebes. If you and if you and just this is very similar to the Rolex and luxury watch industry. So do you know that if you buy like a Rolex and they find out that you buy it at retail and you flip it for above retail, oftentimes the dealer will never sell you a Rolex again.

Ferrari does the exact same thing. So if you flip a Ferrari and you don't tell them and ask for their permission, you get in trouble. And so it's a big deal and they ban you.

And so they have so much demand that they literally ban people from buying a five hundred thousand dollar item. Is that insane or what? I mean, that's like truly pinnacle of exclusive and elite. Like people are dying to have this product.

SPEAKER_01
Nothing makes me want to get in more than a wall preventing me from getting in.

SPEAKER_02
And they do a great job of creating that wall. And their brand is incredibly hard to kill. So if you if you Google, what are the most expensive cars ever sold at auction? A recent one is a, I forget it's a GTO 250.

I forget which year it is, but it was an 80 million dollar car. Eleven of the top 15 most expensive cars ever sold are Ferrari. In fact, people love Ferrari so much that there's a theme park, obviously, in Dubai just for Ferrari.

They make something. So this company, what did I say? Seven hundred seven billion dollars a year in revenue. Something like that.

Six billion six billion five hundred million of that comes from merch. So a pretty substantial amount just comes from people buying Ferrari hats. And this is even crazier.

So for every Ferrari sold, something like 65 percent is being sold to someone who already buy or who already owns a Ferrari and has bought one from a dealer. Meaning their LTV is massive. They've done a bunch of really crazy, crazy things to prevent like or to keep their brand strong.

So they have this bounty program. So they basically have just created a bunch of snitches. So if you're in the streets and you see someone has painted their Ferrari a certain color has put a modification on it, like a part that that Ferrari doesn't approve of.

If you report that to Ferrari, you get an allowance, you get a little bit of money. They pay you to report that people are breaking the rules as they have a new bounty system. It's insane.

Now, I talked about the Lindy effect. So here's the exact definition. The future life expectancy of some non-perishable things like technology or an idea is proportional to their current age.

Thus, the Lindy effect proposes the longer a period of something has survived to exist or the longer something has existed, the longer it's remaining life expectancy expectancy. So Ferrari has been around. It's it's going to be, I believe they were launched in the fifties or so.

They're going to be around, I think, for an extended period of time. I think Ferrari is a very hard brand to kill. If you put Ferrari on a Rolex, someone's going to pay extra to buy that Rolex and put Ferrari on anything.

Someone's going to want to pay more money to have that that item. Now, and that's not the same case with the Honda. It's often, I don't I mean, there's like a handful of car companies that are able to pull that off or there's a handful of any type of company.

SPEAKER_01
I just went to the website and put a six hundred dollar baseball cap into my cart. But I need to like have a cool down period before I click buy just because I think I don't know if you're selling me the stock, but you're definitely selling me some Ferrari merch today.

SPEAKER_02
It was a hat, really, six hundred dollars. There's yeah, it's six hundred dollar hat.

SPEAKER_01
The cheapest hat is like one hundred and eighty dollars.

SPEAKER_02
That's insane. That's absolutely insane. Like I went to a kid's I went to a friend's house yesterday and their kid had like a Ferrari coat that he was wearing because he like he like, you know, and he has like Ferrari toys and they sell so much of this stuff.

It's insane. Is it was it really a six hundred dollar hat? What makes it so good? Does it does it does the hat drive?

SPEAKER_01
The entire story, you just told me made it so good.

SPEAKER_02
It's an insane brand. And have you ever been in a Ferrari?

SPEAKER_01
I have been in a Ferrari. Yes.

SPEAKER_02
I've been in I've been in a Ferrari. They're definitely cool. My takeaway is that they're a fucking pain in the ass to own.

Everyone stares at you. So they've that Ferrari red was actually formally the it was the national racing color of Italy and Ferrari and so Ferrari was like, oh, we'll just use that. And then eventually they got so popular, they patented or they trademarked that red.

So that red is only for Ferrari. But if you're in one of those cars, you get stared at like crazy, which is one of the reasons why people love driving it. I hated driving it for that reason.

And they're loud and they are kind of rough. They're fucking race cars. It's a race car.

And so if you like driving Ferrari, you're going to love it. I my opinion was this is a pain in the ass to drive. But I get it.

I get the appeal. Ferrari is bad ass, but their P.E. ratio is insane. So I don't know how much value is left to be had here.

But they are but they are growing. They are growing consistently. So if you look at if you look at their last if you look at their last, I think they went public in 2018, it's grown on average roughly 30 percent a year.

They're stock their stock price. So it's like been a pretty consistent growth. They Ferrari Enzo Ferrari, when he died, he sold a lot of the business to Fiat and then Fiat spun it off.

And they built they took it public on on its own. And so it's been very consistent since it's gone public. You had a great return.

Recently, they signed a deal with Lewis Hamilton, who's like the LeBron James of like F1 racing. And their their their price skyrocketed because also their earnings, they're like, dude, we're killing it. So they make something like I believe their EBITDA margin is 35 percent.

So no car company has that much that big of a margin. I mean, that's like ridiculous.

SPEAKER_01
What you got to do the smart rich guy thing, which is you say, Ferrari is not a car company. It is a luxury brand and it's priced incorrectly. They're pricing it like a car company, but it's actually a luxury brand.

Right. That's what all the stock pickers do. They're like, Tesla, it's not a car company.

SPEAKER_02
That was my argument. And then I looked at what the P ratios of some of the other luxury brands were.

SPEAKER_01
You know, it's actually a it's actually a AI chip company, I guess, based on this B multiple.

SPEAKER_02
Well, my original point, I was like, this is a luxury company. And then I looked at what the what some of the numbers were for some of the other luxury companies. I was like, well, this is bad timing.

If you if we would have done this if we would have done this like two or three weeks ago, it would have made a little bit more sense. But they just had they just released earnings on Friday and so they crushed it. But there is a bunch of downside.

So P ratio is insane. It's at an all time high right now. I think it's what did I say, 55 times earning? That's insane.

That's a lot. Another question. When you were a kid, did you have like car posters on your wall like or like a folder like a binder that had a car on it?

SPEAKER_01
I did not. I had a life size poster of the rock.

SPEAKER_02
OK, well, you didn't do the pro move and prove my point. But many young kids when we were young did you go to that book fair and you buy like a Ferrari eraser or you'd buy like a Porsche Lamborghini folder, whatever we cared about that with your kids. And so it was very aspirational.

Do you know that young people nowadays are barely even getting driver's licenses?

SPEAKER_01
Yeah, it's like a loser move, right?

SPEAKER_02
It's like a loser move to have a driver's license. And so oftentimes I wonder are young kids even going to care about this? And then finally, EU regulations. So for Arisa, based in Europe, the EU is cracking down.

So for a lot of cars, they have to be hybrid. I think the ruling is by like 2030. I think all cars have to be have some type of hybrid component.

I don't think it's going to kill Ferrari because they're already making hybrids and a large percentage of the cars, something like 25 percent are already hybrids. So I think they're going to be fine, but that is a risk. Now, beyond the stock, I just want to talk about a couple lessons here.

Ferrari is an amazing company to aspire to build, at least if you wanted to build like a luxury product, a great company. The first thing they're fucking missionaries. They're not mercenaries.

A lot of times we talk about we use that word arbitrage. If Enzo Ferrari heard that word arbitrage, he would take off his leather glove and smack you in the face. He would ask you about passion.

That's what he cares about. And it's paid off. He's built a brand that, you know, is one of the most valuable brands known by billions of people in the world that they aspire to attain.

And it's all about him being a missionary. He's truly bought in the people who work there are bought in. They built a brand that's aspirational.

Now, in order to do that, in order to build one of those brands, you have to do something really hard, something you and I struggle with, something I think every entrepreneur struggles with, which is you have to say no to so many great opportunities. And that's really hard. So someone could have said, hey, Enzo, what about like a fifty thousand dollar car that like everyone likes? Like we would just we'd crush it like the average man would buy this and they all want it.

We'd kill it. He said, uh-uh, how do they say no in Italy? He would say no. I don't know how they say it, but I bet I bet it's just no.

That's what he would say. And they didn't and they refuse to do that. But that's been very hard for them to do, I'd imagine, because there's so much opportunity, but that's just a real lesson for a builder.

However, the last lesson is if you can say no for that long and you do build a really good luxury brand, it can pay off so much. I had no idea getting into this. I would have thought that Ferrari was worth like ten billion.

I didn't realize it was the seventh largest car company in the world, only selling 10, 13,000 units. That's insane compared to another company like Honda or Toyota that's selling a million plus units. So anyway, that's my pitch for Ferrari.

SPEAKER_01
Good job. Give it. Let's give it up.

Let's give it up. Um, that's kind of insane. And by the way, I feel like your point about Italians, not just Enzo, not doing arbitrage.

Have you ever met an Italian running an arbitrage? Like is there an Italian affiliate marketer on Earth? I don't think I've ever seen one. It just seems so beneath them as it should be. They're the they are the luxury brand of ethnicities.

Also, they are the.

SPEAKER_02
Yeah, dude, you want like an old lady in the back. Like so I grew up in an Italian neighborhood, by the way. I grew up in St.

Louis. For some reason, St. Louis has a large amount of Italians.

I was the only non-Italian at my grade school. We used to learn Italian in grade school. They used to teach at just we have to go to Mass three days a week.

And one of those days was in Italian.

SPEAKER_01
But you didn't know the Italian word for no.

SPEAKER_02
I wasn't a good student, but I could tell you that I could tell you the our father Italian. And and the best part was like everyone would have their old grandmom like in the back of the house, like rolling up these raviolis.

SPEAKER_01
All right, I want to hear you speak some Italian.

SPEAKER_02
Let's go. Don't put me on the spot, bro.

SPEAKER_01
You just said I could tell you the our father in Italian. OK, tell me.

SPEAKER_02
No, I don't even want to say it. I'm so bad, dude. I got a thick, I got a thick tongue just like our boy Bernard.

I got a tongue like a slug. It's a thick tongue. I can't roll my eyes.

It's disgusting. The back here is bad. My first girlfriend in grade school, her name was Filomena.

Like I was all in. I was all in on the Italians.

SPEAKER_01
I feel like American Italian people, like Italian people who live in America are just they give it the wrong rep really. It's sort of like it's like Tex-Mex or whatever. It's like two Americanized Italian Italians, man.

SPEAKER_02
It's just yeah, I want like a really I want a skinny Italian with like wearing skinny, skinny, tight jeans, smoking a cig, constantly drinking espresso with a buzz cut. I don't want like these gabbagool like, you know what I mean? Well, that's not the type of Italian.

SPEAKER_01
I don't like the Sopranos. I don't want Tony Soprano, right? Like the Italian grandmother who's still like, you know, smokes the cigarettes.

SPEAKER_02
But a lot of great car companies are Italian, you know, Lamborghini is also Italian. And I believe the story, by the way, you know, the story of Lamborghini. He invented the Lamborghini because Ferrari wouldn't sell him a car.

Oh, revenge. And he was making tractors. Lamborghini was a tractor maker and Ferrari wouldn't sell my car.

So he made his own. And so they've been assholes from day one. And that's why it's such a great brand.

SPEAKER_01
You definitely sold me on how cool Ferrari is as a business. I don't think you sold me on the stock just because it's like at an all time high and 70 billion. It's at an all time high.

It also sounds like they're not trying to grow fast, right? That's like part of the shtick is like sell part of the limited number of these. Insane margins. And so I think that's, you know, maybe maybe one of the downsides.

But very cool story and also more like MFM, more of inspiring for how to build a business.

SPEAKER_02
Then by hold on, great stock. Don't discount. Don't discount me.

Listen, I actually don't know how stock stocks works. You know, I'm a dummy. How does the stock work? I don't know.

Let's go back. But if it's growing 20 percent a year and if we think that it could continue doing that.

SPEAKER_01
But you're saying the stock price is growing 20 percent a year.

SPEAKER_02
No, revenue, revenue, revenue is growing 20 percent a year. If revenue is consistent, doesn't like that that other shtick follow?

SPEAKER_01
I does, it does, it does. But you didn't talk about that. So, you know, it was on the slide.

SPEAKER_02
I can only go based on what you told us, right? The business is growing. It's good. Just you started the pitch with.

SPEAKER_01
For my stock analysis, we're not going to be talking about numbers, which was just a masterful.

SPEAKER_02
Isn't that what you said? Warm Buffett said, Brantz or some bullshit?

SPEAKER_01
Yes, something like that, something like that. I do think that, you know, that's the best way, right? Like if you didn't prepare for your speech in school, you're just like, you know what? You rip up. I'm not going to read off those prepared notes.

I'm just going to speak from the heart. It's like you're ripping a blank piece of paper up and throwing it away.

SPEAKER_02
Dude, I did prepare it. I prepared a long time for this. I just really took Buff Daddy's words to heart and I looked at the brand.

Fair enough. OK. It is kind of an interesting dichotomy here. We did just pitch the two exact opposite things, right?

SPEAKER_01
Yeah, exactly. Yeah, the highest of high fashion and luxury and sort of the lowest form of human behavior, getting in your underwear and fighting in front of other people for their entertainment. We give you the full spectrum here on MFM, right?

SPEAKER_02
So let me let me think about it. OK, so if I had to put my own money, if I had to put $100,000, let's say, into either Ferrari or TKO, I think I would go Ferrari. I think I would go Ferrari, but I think TKO has significantly higher upside.

Significantly. Right, right. So that's fair.

I don't know how you would engage the winner.

SPEAKER_01
If I had to put my money in either, I would put it in either. It's my takeaway from Stock of Palooza.

SPEAKER_02
Oh, I emphasis on the if I had to, which I don't have to. Which I will not. Yeah, which I'm not in that position.

SPEAKER_01
And by the way, I don't know if it showed, but I definitely worked backwards from. I looked at the stock and I was like, I actually what happened was I saw that they merged and I was like, these companies have no competitors. This is a true monopoly.

And in tech, people from the Peter Thiel School of Thought really value a monopoly. And it's so hard to build a monopoly. Like there are so few businesses that are truly a monopoly.

We talked about even DuckDuckGo eating into Google's market share last time. But Google, Facebook, these are one of the few monopolies that exist. And I was like, huh, it's funny that like this TKO thing is actually a monopoly.

But I don't know how good of a business is. I don't know if that's going to grow. But if you're Warren Buffett and you're looking for something with a sustainable competitive advantage, that would be it.

And so that's where I started. And to be truthful, I didn't even consider any other stocks. I started with that.

Then I texted Sam, hey, we should do a stockmaking episode because I already have one picked.

SPEAKER_02
All right, I'll give you my vote there. We have it. unanimous unanimous decision.

SPEAKER_01
You know, I got the vote to go. Amazing. Well, guys, I don't know if I'm supposed to do an accepted speech now, or if I should just say.

I'm not surprised, but that's that's where I stand as far as stocking. I hope you guys liked it. Go to the comments and vote in the comments.

Who won Sam or Sean? Put it in the comments. We will tally them up and name the official winner after we do that.

SPEAKER_02
And if you got any joy from this, or if there was a time that you were pulling your hair out and being like, these fucking idiots don't know anything about this stuff. If whatever the spectrum is, if you got a little emotion, click, click subscribe. And we'll owe you one.

All right, that's a pot.