Key insights

• 💰 Joseph Carlson purchased $10,000 of ASML for his passive income portfolio, funding it by trimming existing positions in Vichi and Apple.
• 📈 Emphasizes the need to increase the overall quality of his portfolio by selling Vichi and trimming Apple.
• ⬆️ Plans to add more money to ASML if the company's stock continues to dip.
• 📊 Discusses the current market trend, Tom Lee's prediction of S&P 500 reaching 7,000 in 2025, and Bill Ackman's bullish case for Fannie Mae and Freddie Mac.
• ⏳ Emphasizes the importance of long-term, disciplined investing and avoiding speculation and hype.
• 🔌 ASML's monopoly market share in critical chip manufacturing processes gives it pricing power and potential for future growth.
• ⚙️ ASML's technological advantage, engineering know-how, and global distribution networks make it difficult for competitors to replicate their machines.
• 📉 Analyzes the stock of ASML, highlighting potential concerns and opportunities based on its track record and market trends.

Q&A

• Why is the current S&P 500 PE ratio higher?

  The current higher S&P 500 PE ratio is attributed to the index being more weighted towards faster-growing companies. The projected annual earnings growth for big tech companies is significantly higher than the market average. An analyst predicts a positive first half of the year with the potential for the S&P reaching 7,000. Additionally, Bill Ackman's long-held Fanny May and Freddy Mack stocks saw a 32% jump after he posted a bull case, sparking debate over ethics and transparency in influencing stock prices.

• What is the speaker's perspective on buying ASML stock?

  The speaker bought a substantial amount of ASML stock at a higher price than it is trading today, believing it to be undervalued and predicting strong future cash flows. Although other companies like Cintas, Spotify, and Uber were considered, ASML was ultimately chosen. The current market performance is highlighted, with stocks looking expensive due to the presence of fast-growing tech stocks.

• How is the stock of ASML analyzed?

  The analysis of ASML's stock reveals attractive attributes and some drawbacks. Despite high capex and R&D spending, the company maintains high profit margins and positive free cash flow. Its current nearly 40% decrease from all-time highs poses a potential buying opportunity. Notably, concerns about slower recovery in traditional markets and China's business normalization have impacted the stock, but ASML's long-term track record and strong secular trends suggest potential for growth.

• What gives ASML a competitive edge?

  ASML's technological advantage, engineering know-how, global distribution networks, and the difficulty for competitors to replicate their machines give the company a competitive edge. The rising global demand for high-end chips and efforts to bring chip manufacturing in-house further contribute to ASML's poised future growth.

• What attributes did Joseph Carlson look for while investing in ASML?

  Joseph Carlson emphasized the importance of long-term, disciplined investing and avoiding speculation and hype. He focused on buying 'compounding machines' with specific attributes, using ASML as an example. He highlighted ASML's monopoly market share in critical chip manufacturing processes, pricing power, potential for future growth, and strong moat due to its complex and unique technology.

• What did Joseph Carlson purchase for his passive income portfolio?

  Joseph Carlson purchased $10,000 of ASML for his passive income portfolio, funding it by trimming existing positions in Vichi and Apple. He explains his reasoning for selling Vichi and trimming Apple, emphasizing the need to increase the overall quality of his portfolio. Carlson plans to add more money to ASML if the company's stock continues to dip.

• 00:00 Joseph Carlson bought $10,000 of a new holding in his passive income portfolio, ASML, and explains his decision-making process. He also discusses the current market trend, Tom Lee's prediction for S&P 500, and Bill Ackman's bullish case for Fannie Mae and Freddie Mac.
• 05:32 The speaker outlines his investment approach, emphasizing the importance of long-term, disciplined investing and avoiding speculation and hype. He explains his strategy of buying 'compounding machines' with specific attributes, using ASML as an example. ASML's monopoly market share in critical chip manufacturing processes gives it pricing power and potential for future growth. The company's complex and unique technology forms a strong moat, making it difficult for competitors to enter the market.
• 12:07 ASML's technological advantage, engineering know-how, and global distribution networks make it difficult for competitors to replicate their machines. The company is poised for future growth due to increasing demand for high-end chips, emerging technologies, and global efforts to bring chip manufacturing in-house.
• 18:46 Analyzing the stock of ASML, a company with attractive attributes but also some drawbacks. Despite high capex and R&D spending, the company has consistently high profit margins and positive free cash flow. The stock is currently down nearly 40% from its all-time highs, presenting a potential buying opportunity. Concerns about slower recovery in traditional markets and China's business normalization have caused the stock to decline. However, ASML's long-term track record and strong secular trends suggest potential for growth. Notably, prominent investor Dev Canaria doubled his position in ASML last quarter.
• 25:20 The speaker bought a substantial amount of ASML stock at a higher price than it is trading today, believing it to be undervalued and predicting strong future cash flows. They also considered other companies like Cintas, Spotify, and Uber but ultimately chose ASML. The market is on pace for the best performance in decades, with stocks looking expensive but some investors justifying it due to the presence of fast-growing tech stocks.
• 31:31 The current higher PE ratio is due to the S&P 500 being more weighted towards faster-growing companies. Projected annual earnings growth for big tech companies is significantly higher than the market average. Analyst predicts a positive first half of the year with potential for S&P reaching 7,000. Bill Ackman's long-held Fanny May and Freddy Mack stocks saw a 32% jump after he posted a bull case, sparking debate over ethics and transparency in influencing stock prices.