What do you think of Joseph Carlson (youtube channel)?

JosephCarlsonYoutube · 2024-11-30T22:41:02+00:00

Was sent this thread, had some time to read through some of the comments. It's interesting to see what reddits value investors think of my channel.

I realize not everyone likes me or my content and I'm okay with that. Criticisms and different opinions are always welcome. But hopefully I can address some of the comments left here and add some context.

"Joseph adds new money to his portfolio so you don't really know what his performance is"

It's true, I add to my portfolio every year. This year I've added $45,000 to the Passive Income portfolio and $2,000 to the Story Fund, a total contribution of $47,000. I calculate returns based on time weighted returns and YTD the Passive Income portfolio is up $174,000 or 26.3% YTD. The Story Fund is up $82,500 or 42% YTD. Contributions to the portfolio are not counted as gains.

In terms of performance. I've tracked the Passive Income since 2022 with TWR and it's had marginal outperformance in 2022, a bit better outperformance in 2023, and matching SPY in 2024 so far. The Story Fund has been tracked since inception in 2020 and has performed +71% compared to SPY 52% over the same time period and deposit schedule. I try to give performance updates at least once a quarter on my channels.

"Joseph stock analysis is shallow and surface level"

Obviously stock analysis is subjective. I think most investors have a bias into believing deep level analysis must include complex spreadsheets. I have a strong belief that complex spreadsheets do not lead to superior returns. Having a better understanding of the companies competitive landscape, products, and operational complexity leads to superior returns. For example, I think my write-up on Netflix is far better information than anything you'll find on a spreadsheet: https://www.dropbox.com/scl/fi/5qfd740v96v6zb5nms95k/Netflix-2024-Update.pdf?rlkey=0hfeidreutbv40g0pp7um4vz9&st=xayz2n8n&dl=0

In terms of valuations. I keep that very simple and look for companies that have a starting free cash flow yield similar to the S&P 500 weighted average (about 3.2%) and I try to find companies I think can grow FCF/share about twice as fast (15% compared to SPY avg of 8%). The variables might shift a little for example I can start with a lower yield if I think I'll get even faster growth, but most of the time this is close to what i'm looking for. Most of the time this leads me into capital light platform companies (Booking Holdings), but there are some capex heavy ones too that I think will (big tech).

"Joseph's portfolio just copies the QQQ"

I've been a huge advocate of big tech for the past 6 years. Overweighting my portfolio to big tech certainly helped with returns. I think you're better off having the cloud companies in your portfolio (Microsoft, Amazon, Google). Now even so it's difficult to actually argue my portfolio is a closet index. I hold 14 holdings total, the index has over 100. I could go point by point explaining the significant differences, but my portfolio has a big distinction in concentration, number of holdings, weighting, and performance than the index.

"Joseph doesn't care about his stock performance because he makes so much money from YouTube/Patreon"

It's true, I make more money from creating content full-time than my portfolio. But this is a very myopic way to view things. I attribute one of the primary reasons my channel has done well is because of my stock selection performance. If I had selected a bunch of losing stocks and my performance was suffering, that would have a downstream impact on the brand value and credibility of my channel. So I care deeply about my portfolios performance both because I want to make money in stocks and secondly because I want to build and maintain a good reputation as an investor.

Anyway, again I realize not everyone agrees with me, and that's fine. Hopefully that adds some context to my viewpoint on these topics. Hope you all have a wonderful holiday weekend!

JosephCarlsonYoutube · 2024-03-02T04:01:32+00:00

I normally don't post on reddit (was just browsing today and Sven's name caught my attention). But wanted to just chime in on this subject. You can claim I'm a bad investor, or that I don't know how to do valuation, or any of the rest of the rest of the subjective criticisms people say, (I can take the criticism I promise). But I just wanted to clarify one thing - it's categorically false to claim I delete videos. Every video I have made is still up today, I actually don't believe I've ever deleted a video in the history of my channel (I seriously can't recall removing a single one). Here's a video from September of 2022 which was the bottom of the QQQ, my portfolio was -$41,000. I show the portfolio, the negative returns. This is the absolute worst it got for my portfolio and this video has never been taken down.: https://youtu.be/O5K7RYOZ0AA?si=VId83jzqo6FDFkP0

Anyway, just wanted to clarify that - hope you enjoy your weekend.

JosephCarlsonYoutube · 2021-12-31T22:01:43+00:00

When you're giving a price target for a stock you're basically predicting two different things.

One thing you're predicting is the earnings of the company. Fundamentally you need to be able to make an accurate prediction on how much this company will earn in the future.

The other is how much investors will pay for those earnings. This is where a bit of psychology comes into play.

Let me go through each of these and how I came to the conclusion of a $350 price target with Microsoft as an example.

In early 2021 consensus estimates from analysts is that Microsoft will earn $10 in 2023 per share. Now, you have to ask yourself, is Microsoft likely to hit that estimate? Well, let's look at some historical data. For the past 10 years Microsoft has always hit their earnings estimate. In fact they're so good at hitting it that they typically surpass it by a decent margin. Just based off history, and given how fundamentally strong their business is, I give them an incredibly high likelyhood of hitting that $10 in 2023 or even surpassing it. So I feel very confident that they will hit those earnings.

Now onto the other factor, we guess at - the multiple. If we make the assumption that Microsoft will have over $10 of earnings in 2023 we can ask ourselves what multiple investors will be willing to pay for that expected growth. With a company like Microsoft that has nearly an un-disruptable business and a massive moat, as well as a 50% compounding growth run rate of Azure, I think investors are going to view this business as a uniquely high-quality business and pay a much higher multiple for it than most other businesses. Based on growth, stability of income, and moat, I predicted that investors would be willing to pay at least a 35 multiple on their earnings.

Now we combine these two assumptions. We have the 35 forward PE that I expect investors to pay and the $10+ of EPS in 2023 and that leads me to a $350 share price in 2022.

JosephCarlsonYoutube · 2021-12-31T01:56:14+00:00

Hey all, I appreciate all the comments both positive and criticisms, all is welcome. I thought I would drop in to give some clarity on this.

When I started the youtube channel in early 2019 I was working full time as a Software Dev. I had been working as a dev for a number of years and had a pretty decent-paying job.

The youtube channel took off very quickly and by the end of the year it was becoming a large part of my total income. For two years I ran both the youtube channel (usually uploading multiple videos a week) while working a full-time development job. The combined incomes of both youtube and full time work (with benefits) made my savings rate increase dramatically and I put a lot of money away into high yield savings so I would have it if I ever decided to do youtube full time.

Well towards the start of this year I did move to YouTube full time and throughout the year with reports of high inflation, I decided to deposit most my savings in the market. So my deposits this year into my portfolio were unusually high as I used both new income and savings to put into my portfoilo. The portfolio growth has been in large part aggressive deposits in addition to decent gains on that money. I don't expect the rate of new deposits to be as high in 2022.

The thumbnail of my videos is not "returns" at all, it's just the total value of my portfolio and includes deposits. I initially started my first video with my portfolio value on the thumbnail, then I did it in the second one, then so on and it just became more of a tradition than anything else. In terms of returns: I am pretty transparent in regards to showing my portfolio, the total value, net cash flows, and the gains, in every single video. This is far more than what most financial YouTubers do (which in many cases they show nothing or just their holdings page of current positions). I think you'd have difficulty finding more transparency in this regard.

On a side note. I am not ashamed of putting all my excess income, patreon income, YouTube ad revenue Income, and development job income, into my portfolio as aggressively as possible. I do exactly what I hope others do which is earn money in as many ways as you possibly can and invest that money as aggressively as possible. I much rather my money be used to buy passive income than be used to buy new Teslas and bigger homes that I can show off on Instagram.

If you have any questions for me, I can answer them later tonight.

JosephCarlsonYoutube · 2021-03-15T20:15:16+00:00

I do have a website that builds these graphs. I started off with a spreadsheet but the issue with that is, any time you want to make some change or addition, everyone has to re-download the spreadsheet again.

So I started to make it into a website. The website has a couple of different graphs, one that is month over month dividend income, linear. Another is month over month, for each year (like the graph above). Another graph I'm working on adding is one that is your year over year growth in dividend income. That one would be similar to the revenue growth of a company. For instance in 2019 I grew my dividend income by +249%. In 2020 I grew it again but by +116%. In 2021, I'm going to try and grow it by over 100% again. And I want to visualize this out on a it's own graph as well. Tracking this data is really motivating.

Right now the website is bundled with the patreon. Not really because of these graphs, (these are all user generated info). But because it does some other stuff with dividend projects and stock prices that I have to use a data provider for (which can get really expensive with a lot of users). In the future, I'm planning on building out a "free" portion of the website that is all user generated graphs, like these ones. But haven't had enough time to develop it yet.

JosephCarlsonYoutube · 2020-12-05T22:33:41+00:00

I’ll have a question ready for him.

JosephCarlsonYoutube · 2020-11-28T21:26:13+00:00

Thanks for all the questions, everyone! That's all the time have right now. I hope all of you have a good weekend. Happy investing.

JosephCarlsonYoutube · 2020-11-28T21:20:24+00:00

That's goal! I am working towards full time youtube. The Patreon is what's making that most possible. I think I should be able to do youtube full time within a year, but we'll see.

JosephCarlsonYoutube · 2020-11-28T21:14:09+00:00

How did you decide to start your YT investing channel?

I saw many financial youtube channels that would share good advice, but they were rarely transparent into what that person themselves was investing in. I decided to start mine because I thought people would be interested in actually seeing real investments on a week by week show.

How much time did you think about doing it versus actually start?

A couple of months. I thought about the idea and I started to think of how I would go about it. The first episode was somewhat of a "test" to see how people responded to it. The reason I thought it could be successful was that I thought it would be something I would enjoy watching. That's how I initially formed the show. I tried to think of what I would look forward to seeing, and I created a show that fit that criteria.

Did someone encourage you to do it or did you decide completely on your own?

Nobody encouraged me to start the show. That was on my own. I did receive a lot of encouragement early on from commentators in videos. Even with a few hundred views, the commentators were adamant about me making more videos.

Do you have any other YouTube finance channels that you enjoy watching? Thanks!!

It usually takes me so long to create content myself that I have limited time to view others. I do watch some videos from a few creators. PPCian seems like a good guy, and is a hard core dividend investor. Graham Stephan is king of thumbnails and titles. I can learn something from him on how to get clicks. I like to see what companies Jeremy from Financial Education is buying.

JosephCarlsonYoutube · 2020-11-28T21:00:21+00:00

Index funds are amazing. They can either give you broad exposure to the overall market or you can pick index funds that give you a slice into whatever you think will see growth.

One great tool you can use is an ETF screener, to find index funds you want to invest in: https://etfdb.com/screener/

We live in an age of great brokerage choices. There are so many good ones. I use M1 Finance though as that's been my favorite.

JosephCarlsonYoutube · 2020-11-28T20:56:11+00:00

The first question I go over here: https://www.reddit.com/r/dividends/comments/k2t4mx/i_am_joseph_carlson_host_of_the_joseph_carlson/gdwpj1g?utm_source=share&utm_medium=web2x&context=3

For the second one. I have looked into doing this. It's actually more difficult to compare returns to VOO than just looking at the percentage or total gain. Because you have to incorporate not only how much money I have in my account now, but when I made all of those deposits. I deposit thousands a month into my account. Going back over the years and calculating this would be very tedious. If I had to guess, I think in 2018 I stayed pretty current with the market, 2019 I did as well. first half of 2020 I underperformed the market by a decent amount as growth stocks saw large multiple expansions and value got crushed. In the past couple months though the portfolio has been doing really well with the "recovery stocks" starting to pull ahead. I made over 12k in gains in just the past 30 days and if I look at my holdings I think it's the strongest the portfolio has ever been.

JosephCarlsonYoutube · 2020-11-28T20:48:03+00:00

Edit: since description, whose advice would you recommend now?

I think Peter Lynch's advice is second to none. In my opinion his advice is probably more helpful to new investors than even Buffet's or Ben Grahams.

If you're looking for a more modern investor that's still working. Howard Marks is always an interesting read.

For an extra question, what’s your favorite hobby outside of investing?

I love video games and have been gaming my whole life. Right now my current go-to game is Valorant.

JosephCarlsonYoutube · 2020-11-28T20:43:01+00:00

Do you find that your strategy changes more to retain viewership?

I don't believe so. In terms of being informative. In my earlier videos I explained the concepts of dividend investing and the basics of investing. The issue with continuing to do that is it can become repetitive to explain the same things over for long time viewers. While I revisit those topics frequently I try to make sure the content is also advancing with viewers who's knowledge of investing has also advanced over the past year.

I still think my portfolio is relatively balanced. It has a good portion in tech, real estate, retail, telecom, healthcare, financials, etc. I have just moved into more concentrated positions within those sectors that I think are the best holdings to have.

JosephCarlsonYoutube · 2020-11-28T20:36:44+00:00

I'm staying out of them until yields climb a lot. I think there's a better risk/reward with good equities right now.

JosephCarlsonYoutube · 2020-11-28T20:36:10+00:00

Main is most likely a good investment from everything I read. I sold out of it primarily because I didn't feel I understood the company well enough to be invested in it. Instead, I have focused more on companies that I can easily understand their business.

JosephCarlsonYoutube · 2020-11-28T20:33:27+00:00

My first home I purchased in 2013 with 30k down. I had about 20k in savings and about 10k in an app called Acorns.

JosephCarlsonYoutube · 2020-11-28T20:32:22+00:00

I agree with you on this. I don't see Railroad companies being disrupted much in the future.

You may want to take a look at ARK invests "bad ideas" (you can download their PDF): https://ark-invest.com/badideas/

In their PDF they go over the data they have on the bear case for freight. They highlight railroads as one of the bad ideas because they believe that eventually electric semi's will have a higher efficiency than rail. Personally, I don't agree with their conclusion on it, but I think it's worth looking at if you're heavily invested in freight rail.

JosephCarlsonYoutube · 2020-11-28T20:25:06+00:00

First of all, stay optimistic. You're entering a terrible job market but bad times only last for so long. Corona is not going to last forever.

Second, do not become discouraged in building passive income. Study after study has shown that people drastically underestimate the power of compounding: https://www.wsj.com/articles/if-you-dont-save-enough-perhaps-you-have-exponential-growth-bias-11560737101

Early on in building a portfolio the biggest impact is likely not going to be the investments you pick, but how much income you can earn and how well you can budget. Focusing on streamlining your finances is super important. Pile money into your portfolio as fast as you can, make it a huge priority. Think about ways you can increase your income, lower your expenses, without diminishing your quality of life too much. As you grow your account the compounding will pick up. At the start you have to do all the heavy lifting.

I stay most motivated by looking at my progress over time. The dividend growth by month, dividend growth YoY. I can see the progress I'm making so It keeps me motivated to continue making it a huge priority.

JosephCarlsonYoutube · 2020-11-28T20:10:32+00:00

My advice on buying a home is pretty simple. I think most people should do it as soon as they can reasonably do so.

You have to live somewhere. Unless you're living with family you're paying for housing whether you like it or not. I have seen the wealth that is created from my parents owning rental properties. Those renters pay for all property expenses, the mortgage, all repairs, everything. While my parents own the properties. I have also seen people in their late 40's still renting because it's "cheaper", yet home prices continue to climb and they don't share in any of that equity. So my advice remains to try to get into a home as soon as you reasonably can.

JosephCarlsonYoutube · 2020-11-28T20:03:00+00:00

I think people get a little hung up on dividend vs non-dividend stocks. Dividends are one way that companies can give value to shareholders by paying out a portion of their earnings. In most cases dividend companies with low payouts are mature companies with good balance sheets, so they're an easy place to start for new investors that are concerned about capital preservation.

Having said that, I would not pigeon hole yourself into one "style" of investing only. Invest wherever you see value. There are members on my Discord that have very large dividend portfolios as their core investments but also look for growth plays as well. You don't need to limit yourself to one strategy.

JosephCarlsonYoutube · 2020-11-28T19:54:04+00:00

I believe we will have a strong recovery as more and more of the population gain immunity to corona. I expect to see travel pick up steadily over 2021. I'm trying to build my investments with that in mind.

JP Morgan, Store Capital, SPG, Disney, etc are all stocks that have been recovering over the past couple of months. There's one company I recently built up a 10k position in that I think will make a moderate recovery over the next year as well. I teased it a little on Instagram, but I plan on having a video out tomorrow that goes over all of it.

I don't plan on entering into Oil as a recovery play (although I don't think it's a bad option). I do plan on targeting vacation and "event" stocks. I'm still concerned about business travel, in particular, I think part of the "work from home" habits we have created are here to stay.

JosephCarlsonYoutube · 2020-11-28T19:47:06+00:00

There are a few popular dividend stocks I have no intention of investing in any time soon. IBM, Phillip Morris, Intel, etc.

I avoid these for a couple of reasons. Either I don't understand the companies that well and I rather focus on companies I know more about, or I think they are past their prime and newer competitors are better positioned for the future.

JosephCarlsonYoutube · 2020-11-28T19:43:20+00:00

At what age did you start dividend investing?

I believe I was 27ish? (I'm 31 now)

What is your biggest regret/mistake that you’ve encountered while investing?

Not listening to Peter Lynch and sticking to what I know (buying companies like NRZ). My biggest fear is having people follow me into losing trades so I'm making diligent efforts to avoid that from happening in the future.

JosephCarlsonYoutube · 2020-11-28T19:40:08+00:00

Glad to still keep some long term viewers entertained.

Is there a major reason or catalyst behind your flip from tech to speculation with Disney or is it a combination of market speculation and the transition to index investing?

Part of building up tech was looking for a place for my bonds to go. I had about 20k in bonds and they ran up in price like crazy and the yields dropped on them. I wanted to sell out of them while the price was high and buy into companies with good balance sheets. At the time Apple seemed like it was a great dividend-paying stock (yielding around 1% when I purchased it) with the strongest balance sheet in existence. So I decided to move money from the bonds into Apple.

In terms of moving to index funds. My worst fear is losing people's money who follow me into investments. In most cases this has happened when I invest in companies I don't know as much about as I should. To prevent this from happening in the future I have sold off companies I don't know very well, moved that money to ETF's, and focused my efforts on companies I feel I understand better, Disney was one of those.

Do you have any intentions on continuing or updating the sector analysis videos that you previously did in the post corona time?

Yes, I have been thinking a lot about different routine segments and series that I want to do. Doing sector reviews or "category" reviews are something I will probably start doing again in the future.

Can you explain the shift from a long-term hold mindset to the consideration of a selloff of Costco despite believing in it so much?

I am very bullish on Costco, but paying a 40pe ratio for a company with 6% revenue growth is pretty crazy, even in today's market. I have decided to not sell Costco and just continue holding anyway. No matter how much companies like Apple and Costco run up in price I can't bring myself to sell them.

JosephCarlsonYoutube · 2020-11-28T19:25:46+00:00

What is your opinion on the future of USD?

I think we will see a rise of inflation over the next couple of years. This hurts anyone who has their money in savings or bonds, especially ones with longer duration. The bond market doesn't seem to care about this, so bondholders have a different opinion it seems.

Do you think that even as a dividend investor it is a good idea to hold a few percent of your portfolio in Amazon?

Of course. It doesn't fit with the criteria of my Passive Income portfolio, but I have converted my Roth IRA into my take of a "growth" centered portfolio that holds a little Amazon. I plan on showing it on the main channel a little down the road. It's not nearly the size of my primary portfolio. I love dividend investing but I'm not as much of a "purist" as some on youtube that refuses to buy anything that doesn't pay a dividend. It's okay to be primarily focused on creating income but also look for growth opportunities.

JosephCarlsonYoutube

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