Amazon (AMZN) is considered one of the market's biggest opportunities and is attractively valued, with a belief it is worth well over $300 per share. Recent concerns about MasterCard (MA) are viewed as overstated, creating a buying opportunity on the stock's recent decline. The sell-off in Netflix (NFLX) is also seen as a chance to add to a position, as market fears are considered short-sighted. The significant drop in Duolingo (DUOL) stock presents another buying opportunity, as its fundamental business metrics remain strong despite poor market perception. Lastly, place Costco (COST) on a watchlist, as a 20-25% drop from its current high valuation would create an attractive entry point.

Google (GOOGL)

• This is the speaker's largest holding, making up 15% of the portfolio with a value of $198,000 and over $100,000 in gains.
• The speaker highlights that GOOGL has significantly outperformed the QQQ benchmark over the past five years (249% vs 89%).
• The initial bear case was that ChatGPT would destroy Google's search business. The speaker believed this was incorrect.
• Bullish Thesis: The company is far more diversified than just its search business. The speaker's confidence came from the strength of its other segments, which provided a significant safety net:
  • YouTube: Dominating television and beating competitors like Netflix on the TV screen.
  • Google Cloud: A "massively growing cloud hyperscaler."
  • Waymo: The self-driving car unit that "continues to expand."
• The speaker's assessment was that even if the search business was disrupted, these other segments would justify the market cap. Since search also continued to grow, the stock saw immense upside.

Takeaways

• The speaker's current action is to hold.
• He is not adding to the position because it's already very large and the valuation is higher now.
• He believes the valuation is not "too stretched" and that the company's growth story is only "halfway done."

MasterCard (MA)

• This is the second largest holding, at 12% of the portfolio with a value of $178,000.
• Bullish Thesis: The speaker emphasizes that MasterCard is more than a payment network. A core part of its business (40%) is "value-added services" or a "protocol of trust."
  • This includes services like fraud prevention, identity verification, and insurance.
  • MasterCard sells these services even for transactions that don't happen on its own network (e.g., on government networks or stablecoins).
• Risks Mentioned:
  • Competition from government payment rails like PIX (Brazil), UPI (India), and FedNow (US).
  • Alternative payment methods like Buy Now, Pay Later (BNPL), Zelle, and Venmo.
  • A potential 10% cap on credit card interest rates proposed by former President Trump, which the speaker believes would be "devastating" to MA and Visa (V) if it passed.

Takeaways

• The speaker believes the fears about competition and the proposed interest rate cap are "overstated" and "incredibly unlikely" to happen.
• He views the recent stock price decline, caused by these concerns, as a buying opportunity.
• The speaker has been actively buying shares of MasterCard.

Amazon (AMZN)

• This is the third largest holding, with a $150,000 position and $50,000 in gains.
• Bullish Thesis: The speaker is highly optimistic about Amazon's future for several reasons:
  • Improving Revenue Mix: The high-margin parts of the business are growing faster (13.8%) than the low-margin parts (8%), making the company "higher quality every single day."
  • Margin Expansion: He expects margins to expand, driven by factors like robotics.
  • Continued Growth: The company is still growing rapidly across retail, grocery, and Amazon Web Services (AWS).

Takeaways

• The speaker believes Amazon represents "one of the biggest opportunities in the market."
• He has a specific price target, stating he believes the company is "worth well over $300 per share."
• He considers the stock attractively valued today.

S&P Global (SPGI) & Moody's (MCO)

• These two companies are grouped together and make up a combined 14% of the portfolio.
• S&P Global has a $37,000 gain, and Moody's has a $15,000 gain.
• Bullish Thesis: The primary driver for these companies is the issuance of debt. The speaker believes they are well-positioned for a future "huge debt wall."
  • The key metric to watch is free cash flow per share.
  • He argues that if these companies experience "massive free cash flow per share growth," the stock price has "only one direction to go," which is up.

Takeaways

• The speaker is "equally bullish fundamentally on both" companies.
• He does not believe they are "dramatically overpriced."
• The investment thesis hinges on future growth in free cash flow driven by increased debt issuance.

ASML (ASML)

• This is a $119,000 position with approximately $57,000 in gains.
• Bullish Thesis: The speaker describes ASML as "one of the only true monopolies on planet Earth."
  • It makes lithography machines that are essential for every high-end chip and are "impossible to replicate."
  • The company's competitive advantage (moat) is widening as it continues to innovate faster than competitors (including the Chinese government) can catch up.
  • Demand for its machines is growing, fueled by the AI boom and increased capital expenditures from customers like TSM.

Takeaways

• The speaker's current action is to hold.
• He is not adding to the position but anticipates that the stock "will continue to give good returns."

Netflix (NFLX)

• This holding is an 8% position, valued at $104,000 with $38,000 in gains.
• The stock has recently sold off, but the speaker is not concerned, having held through a previous 75% decline.
• Bullish Thesis: The speaker has "never been more confident" in the company.
  • It has 325 million paying subscribers and is generating $9.46 billion in free cash flow, demonstrating massive operating leverage.
  • It has "industry-leading churn," meaning customer retention is extremely high despite how easy it is to cancel.
• Reasons for Recent Sell-off (viewed as short-term noise):
  • Halting stock buybacks to potentially save cash for an acquisition of Warner Brothers Discovery (WBD).
  • Increasing its content budget to $20 billion, which Wall Street fears will reduce free cash flow.

Takeaways

• The speaker believes the market's concerns are short-sighted and views the sell-off as an opportunity.
• He has been adding to his position.
• He predicts the stock may "continue to fall... into the 70s," which would represent a buying opportunity.

Microsoft (MSFT)

• This is a position of roughly $100,000 with a $38,000 gain, held across two accounts.
• The speaker credits CEO Satya Nadella for expertly transforming the company towards the Azure cloud and making it an "AI toolbox."
• Azure is growing quickly.

Takeaways

• The speaker's current action is to hold.
• While he considers it a great company, he believes that Google and Amazon are "a little bit better positioned today."

Costco (COST)

• This is a 6.15% position, valued at $84,000 with $50,000 in gains. It has been in the portfolio since day one.
• Bullish Thesis: Costco has a powerful and unique business model.
  • It acts as an inflation hedge by passing on rising costs while always remaining the best value compared to competitors.
  • The subscription-based membership revenue, though a "tiny sliver" of total sales, generates over half of the company's profits.
  • It accumulates large amounts of cash and pays it out in large special dividends.
• Valuation: The speaker notes the stock is trading at a 50 P.E. ratio, which he considers "far too expensive" and "unattractive."

Takeaways

• The speaker's current action is to hold. He is unwilling to sell but is also "unwilling to buy" at the current high valuation.
• He recommends putting the stock on a watchlist and waiting for a 20-25% drop to create a buying opportunity.
• He predicts another special dividend of around $20 per share is coming soon as the company's cash balance grows.

Intuit (INTU)

• This is a 4% position, valued at $60,000 with $9,000 in gains. The stock is currently experiencing a "big sell-off."
• Fundamental Strength: Despite the stock's poor performance, the business is doing very well.
  • Revenue growth is accelerating.
  • Earnings per share (EPS) grew 42% over the past year.
  • Free cash flow is at all-time highs.
• Risk Mentioned: The primary risk is not fundamental but related to market perception. The speaker is concerned the stock could get the "SaaS treatment" and be re-valued downwards to multiples similar to Salesforce or Adobe, causing a "valuation collapse."

Takeaways

• The speaker's current action is to hold.
• He "refuses to add to the position" due to the significant valuation risk, even though the company's fundamentals are excellent.

Salesforce (CRM)

• This is a 4% position, valued at $56,000 and is currently down $10,000. The speaker calls it a "loser" in the portfolio.
• Bullish Thesis: Despite being out of favor, the fundamentals remain solid.
  • Revenue is still growing at 9% per year.
  • Free cash flow per share continues to grow, and EPS is at all-time highs.
  • The valuation, based on P/E ratio and free cash flow yield, is the "lowest that it's been in years."
• Risk Mentioned: The entire Software-as-a-Service (SaaS) sector is "out of favor" with investors, leading to "too much pessimism."

Takeaways

• The speaker's current action is to hold.
• He is practicing patience and will continue to own the stock as long as the "fundamentals are moving in the right direction."

Texas Roadhouse (TXRH)

• This is a 4% position, valued at $50,900 with $47,000 in gains. The speaker has already taken some profits from this position.
• Bullish Thesis: The company is "fundamentally excellent" and well-managed.
  • It has a unique structure where restaurant managers have equity, incentivizing high performance at the unit level.
  • It sells a product (steak) that is not at risk of disruption from AI or plant-based alternatives like Beyond Meat.
  • Revenue growth has been nearly perfect, with the only dip occurring during COVID shutdowns.

Takeaways

• The speaker's current action is to hold.
• He likes the business and feels comfortable with the position size in his portfolio.

Equifax (EFX)

• This is a 3% position, valued at $45,000 and is currently down $4,700.
• Bullish Thesis: The company's core business is "workforce verification," a valuable service that helps businesses verify identity and work history to prevent fraud.
• Risk Mentioned: The stock has performed poorly due to "unfortunate timing." Shortly after the speaker bought shares, a competitive "war" broke out between Equifax and FICO, with both companies cutting prices and hurting margins, which investors dislike.

Takeaways

• The speaker's current action is to hold.
• However, he notes that he currently views Netflix and Amazon as "bigger opportunities" than Equifax.

Duolingo (DUOL)

• This is the smallest holding at 1.5%, valued at $20,000 and is down $14,000 (roughly 50%).
• Bear Case (Market's View): The stock has collapsed because revenue growth is decelerating, and investors fear the company is being disrupted.
• Bullish Thesis (Speaker's View): The fundamentals are the "exact opposite" of what the stock price suggests.
  • Key metrics like subscriber revenue, monthly active users, and paid subscribers are all "growing up and to the right."
  • Free cash flow per share is growing at 48%.
  • The speaker believes revenue deceleration is normal for a high-growth company and that the market is wrong.

Takeaways

• The speaker is very bullish and sees the sell-off as an opportunity.
• He has been adding to his position, recently buying $5,000 worth of stock at $150 per share.
• He advises that while it's a good opportunity, it is a smaller, riskier company and should not be the largest holding in a portfolio.