Investing Unscripted Podcast 99: 2024 Portfolio Contest Q1 Review

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​Jason Hall: Hey everybody. Welcome back to Investing Unscripted, where we ask and answer the hard questions about investing. I am Jason Hall joined by my good friend, none other than the voice of the people, Jeff Santoro. Hey Jeff. Hey, how are you? I'm good. I'm a busy lot going on, starting to get into spring kids sports season, which, it's, the calendar is filling up. 

Jeff Santoro: Yeah. It feels like when I get out of every kind of phase in the year, I'm like, Oh, I got through that. And then I realized there's another phase coming. That's right. That's right. I'll just never not be busy. I'll always be busy. That's life. But- 

Jason Hall: Busy is good. Busy is good.

That's kind of the point, you know, that's kind of the point. So, all right. So this is This is one thing I think is kind of interesting. It feels like the cadence of when we record the podcast now means that this [00:02:00] quarterly show that we do for the portfolio contest seems like it comes out a little bit later than normal.

So we're recording this on April 2nd, but this is the update for the 2024. Investing Unscripted portfolio contest. 

Jeff Santoro: Yes. We're we're, we are recording this before the the first episode of the month drops, but this is the first time we're at the microphone since the quarter has ended. So I spent the weekend crunching the numbers and updating the spreadsheet.

If you check out the show notes, you can see the entire spreadsheet that we are referencing with all of the different portfolios. There is also a link at the top to the episode where we. Revealed all of these. So if you missed that, if you're new to the show and you want to go back and listen to the episode where we announced all this, you can go back and do that.

But today we are going to talk about Q1, talk about some of the trends we saw, who did well, who didn't, what stocks did well, what stocks didn't and ask each other some questions about, you know, What we're thinking the rest of the year might look like before we do that, real quick plugs for [00:03:00] everyone to follow us on social media.

You can find us on all of the apps. You can email us anytime at [email protected]. Please check out our YouTube channel. Please subscribe to our newsletter. There is so much Investing Unscripted content that if you're a huge fan, it should fill your whole day. And, and lastly the most important thing and the most helpful thing is for people to continue to give us reviews and ratings on the podcast apps.

Our number one goal is to have as many people hear the show as possible. So anytime you can take a few minutes to do that, it helps the show get out there. And with all that said, Jason, let it, let us dive in here. Let's do it. All right. So I think what makes sense is let's start with the headline numbers here.

So as a, as a reminder, every quarter we announce a winner for that quarter. So, this is a year to date. Winner as well, because it's just the first quarter of the year, and we have both of us have committed to donating to the charity of the winner's [00:04:00] choice. So the Q1 winner for this year's contest was Mitch Fatel, a comedian and one of the first guests we had on back when we started the podcast last year, or two years ago, almost.

His portfolio was up 27%. In Q1, and he also was the winner for March. So we'll just mention that while we're here. He also just for the month of March had the portfolio with the biggest gains. so Jason, you and I will be donating to the Wounded Warrior Project, which was the charity that Mitch chose.

And we encourage all listeners to donate to do the same. If you are willing and able to donate any amount of money to that charity we can put the, we will put the show note the link to that in our show notes and our transcript as well. So you can easily click and give some cash.  

Jason Hall: This one came down to the wire too.

It was really close. 

Jeff Santoro: Yeah, he just beat out Nick and Casey Rossolillo’s portfolio. They came in a close second. We'll talk more about them later. But Jason, I. [00:05:00] You reached out to Mitch to get a live, a hot take, a line, a commentary on his victory here. I did. I 

Jason Hall: reached out to his people and his publicist followed up with me and provided me with a quote.

Yeah, could you read the quote? They reached him on his private island that he paid for with the stocks that he put forth for this portfolio. If this, and this is again Mitch's words, “if this proves anything, it's that someone who can barely cut his own meat can pick stocks.”

Beautiful. And then he sent a follow up. “Can you let me know what I picked? I forget.”

Jeff Santoro: So it's funny as you would expect from a comedian and But it's also I know he's kidding or maybe he's not kidding about can you remind me what I picked? But that's kind of part of the fun in the point of this whole thing. Is that you know No one's expecting to declare anyone the world's best stock picker after three months.

And to some degree, you could pick a random five or six stocks and [00:06:00] do well or not do well in any three month span. That's sort of the randomness of the market. I'm using a hot take from Mitch regardless. Absolutely. All right. So Mitch is the winner. Wounded Warrior Project is the charity. We encourage people to give.

But Jason, let's dive into the results across the board here and just talk about some high level things. So I want to hear your thoughts on these These headline numbers here. So the best stock for the quarter was NVIDIA, which was up 82 percent from January 1st to March 31st. What do you, what did you think when you saw that?

Jason Hall: You know, it's unsurprising, but at the same time, it also would not have surprised me if NVIDIA was down 50%. The bottom line is that say whatever you want about valuation, say whatever you want about bubble, say whatever you want about AI, the business keeps delivering, they keep growing, they keep reporting more orders, they keep reporting higher demand, they keep reporting better margins, like all of the things that you want a business to do are, are, are [00:07:00] delivering.

Right. So I guess that's, I mean, that's about it really. It's just unsurprising. 

Jeff Santoro: So it's interesting you say unsurprising because. I know this is gonna sound like I'm hedging to me. It was unsurprising, but also kind of surprising. Yeah. And what I mean, a better way to put it. What? Yeah. And what I mean by that, I think you, you're, you're getting what I'm putting down here, which is I would not have picked NVIDIA, even though I think it's a fantastic company and I own it and I think it's going to be great and do well simply because of the run it had been on in late 2022 after All the AI results started coming in, in the second, third and well, we didn't get for Q4 results yet, but second and third quarter of last year, but then there it went on another 82%, which it reminds me of that expression.

And I know this is about the market going the other direction. You know, the market can stay true What, what is the expression about longer than you can be in solvent 

Jason Hall: or, the market can stay markets can stay irrational longer than you can stay solvent. 

Jeff Santoro: Yeah, that's the quote [00:08:00] I was looking for. And anyway, it reminds me of that, but sort of on the flip side, right? Like it's exactly 

Jason Hall: why I would, I would never short a stock like NVIDIA.

And yeah, I'm long NVIDIA. I own NVIDIA. Right. Jeff, Jeff, you own some too. You just, when the animal spirits have a stock or a theme or an idea. It goes until it doesn't go anymore. 

Jeff Santoro: And this is one, again, I, I know it's bubbly and there's obviously some enthusiasm baked in here, but it's, it's legit to, you know, companies are going to be spending more money on AI and they're going to buy chips to do it.

And right now the chips everyone wants to buy to do it come from Nvidia. So. For as long as that's the case, I think you're going to see these results. I think the question is, when does it stop? Because at some point it will, whether it's because there's enough out there or another competitor comes up and has a, you know, a chip that people want to buy.

So that's why I necessarily wouldn't necessarily add to it right now, but I certainly wouldn't short it or sell it. All right. The, Worse performing stock, and this will come as [00:09:00] no surprise to anyone who's listened to our podcast regularly. It was once again, Outset Medical, which was down another 59 percent in the first quarter of 2024.

And Jason, I have to start to wonder if I'm going to look back at myself in this phase of my life where I was still a big fan of Outset Medical and think like, did I just fall for A hype stock. Did I fall for a story stock? Will this end up being a massive disappointment in my portfolio or is there still hope for this company?

Jason Hall: Yeah, well, this is to me, this is a perfect example of like the unknowable stock, right? Because the reality is that all the seeds are still there for. Wonderful returns. But for a long time you could have said the same thing about Transderm. Oh Dermtech. Dermtech. Dermtech, right? It's a disruptive technology potentially upending an existing technology.

Product or service in the healthcare industry that had been the de facto gold standard for [00:10:00] forever that everything about it looks better. Everything about it looks better for patients, quality of care, lower cost of like all the stuff looks better, but it requires. Massive change, right? And the way that an industry operates and Dermtech had, they're still around, I haven't looked in months to be honest with you, but yeah, I haven't either.

It never, it just, it didn't, it didn't, it wasn't the big thing. Right. And we just don't quite know that yet with, with outset, the market's pretty clear in what it's voting right now. Yeah. 

Jeff Santoro: You know, for a while, I. As it was falling all throughout last year, I, I kept thinking to myself, well, you know, the results aren't fantastic.

So I could see, and maybe it was overvalued when I bought it. And therefore this is just a little bit of a correction back to what's a reasonable multiple for a company that's unproven and still in its early stages, but it just keeps falling. And it does make me wonder if I was just completely wrong about this one.

I will say this, it's made me think a lot about [00:11:00] position sizing for more speculative Position, you know, more speculative stocks because I have enough outset in my portfolio where if it turns it around and, you know, becomes a 10 bagger, I'll be very happy. But if it continues to go to zero, it won't have any impact on my future.

So I feel like I have like the right amount allocated to it. Oh, and by the way, if a year from now, it's up 100 percent a it's still going to be down for me and be. I'll have a lot more data and information and conviction to add more if I feel like the story has changed. So I think that's why I can laugh about it because I didn't make it like a 6 percent of my portfolio or anything crazy like that.

But yeah, this has had me scratching my head for quite a while now. 

Jason Hall: Jeff, I hope the one lesson you learned from it, and this is one that I've learned before, yes, despite having learned it before, have made mistakes like Dermtech. with position sizing, helping offset the damage is healthcare and biotech [00:12:00] startups are really hard, hard, super hard, super hard.

Like an order of magnitude harder than other less regulated. Less entrenched player businesses. So 

Jeff Santoro: yeah, and it's just I would say it's hard generally like even with the big established companies in terms of long term like beating the market, but it's especially difficult for these tiny upstart. Not the company.

I mean, you know, upstart biotech center. At the very early stages, like you said, to trying to disrupt something, I'll talk more about outset letter later because it's one that I have on our notes for a later question, but it was the worst performing stock. So we had to mention it here. All right. So here's some other headline things that we can, I'll just throw out here.

I don't know that we necessarily need to discuss them, but I do want to give some props to some other people who played our portfolio contest here. So these are the portfolios who beat the market in Q1. So the S and P 500 was up 10. 6 percent through. March 31st. And [00:13:00] these are the people who picked stocks that have so far this year beat the market.

So we have Mitch, obviously we mentioned him Nick and Casey Rosalillo were right behind Mitch's portfolio. They were up 26 percent with theirs. Tyler Crowe guest on the podcast and frequent YouTube video collaborator with you, Jason. His portfolio was up 11%. And then we had four listeners Who sent in portfolios who beat the market as well.

So Jamie was up 22 percent Lance was up 21%. Teo was up 17 percent and YouTube user and Marie lamb, seven, seven, four, eight, who we know only by her username was up 12%. So nice showing by some of our listeners here. 

Jason Hall: Yeah. I think they've all proven that they are more qualified to run large cap actively managed ETFs than most of the managers out there actually doing it.

So. Guys, get your CVs ready, put in your applications, make some real money. 

Jeff Santoro: Yes, I, I know you're saying that tongue in cheek, but it, it is interesting, like, [00:14:00] again, we said this all throughout last 

Jason Hall: year. I'm saying it tongue in cheek, but the majority of them underperform their index year in and year out.

Jeff Santoro: But I don't want people to misunderstand you, you know, this is three months. Oh, yeah. Right. This isn't three or 10 years. Right. So we'll see how the next quarter goes. Okay. So, 

Jason Hall: Hey, I believe in you people. You can do it. 

Jeff Santoro: Jason's the believer.

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So as you look through the entire portfolio, all the different, I'm sorry, the entire contest, all the different portfolios, what was the biggest surprise 

Jason Hall: The universe of stocks in the portfolio contest. 

Jeff Santoro: The universe of stocks in the portfolio contest. All right. As you look through the universe of stocks, What were your big takeaways any big surprises any contest wide noticings that you had? 

Jason Hall: So I think we're gonna subtitle this episode we're in Jeff dunks on Jason because I will say- 

Jeff Santoro: you're, you're shooting yourself before I get a chance to shoot you.

Is that what 

Jason Hall: you're doing? 

You're damn right I am. Of course. My portfolio is easily the worst performing. I've got three of the 10 worst performing stocks. There's probably a hundred stocks in this portfolio and the, in the contest. It's a 

Jeff Santoro: lot. I haven't counted individually because some repeat. We have some repeat.

Jason Hall: [00:16:00] Yeah. I would say it's between 75 and 100. It's a lot of stocks. And I've got three of the 10 worst performing in my portfolio. That's, that's remarkable. That's just remarkable. 

Jeff Santoro: I think if you, you might've had trouble doing that if you tried. 

Jason Hall: Yeah, no, that's the thing, right? And well, in a way I kind of did try because, Like I intentionally went through my portfolio of, of stocks that I own and picks not cherry pick some, but I like focused on the ones that had the worst 2023 that I thought had really good chances to rebound based on their business and what they were doing and tailwinds and that kind of stuff.

Like you said, it's only been a quarter. I have been, I have been 100 percent wrong. Right. So that's like, that's the one thing that personally has, has stood out. The other thing that's been surprising to me is how well the semiconductor stocks have continued to perform Nick and Casey's [00:17:00] portfolio.

They run the chip stock investor YouTube page. And I want to. Mentioned this to anybody that doesn't subscribe to the newsletter. On a show like this episode, the newsletter's really handy because we send the transcript we email a copy of the transcript when we release the podcast to, to new to newsletter subscribers, and it'll have all the links for, for these folks and what they're doing, and links to episodes when they came on the podcast with us.

So you'll have all that right there. So that's one thing that's useful, but I mean, the reality is that a lot of the semiconductor industry is still kind of in a lull, like industrial demand is way down, automotive demand is not great. The EV industry is kind of in a mess right now. And EVs call for a ton more semiconductors than.

Traditional vehicles do, which still like your average new car with a gasoline engine has like between semiconductors in them. But the industry, besides like demand for artificial intelligence, and we're starting to see a little bit of recovery [00:18:00] in smartphones, it's still not great. 

Jeff Santoro: Yeah. As I've read through.

Transcripts and semiconductor industry, it is stark to hear the commentary by management because it's mostly, here's how great AI is, and then it's here, here's how bad everything else is, you know, that language they use of like, it was, you know, impacted by this and offset by that, it's all like impacted positively by AI.

and offset by all other semiconductor things. So I think that's something that I agree, that was interesting to see. I think what jumped out to me, well, two things. One is that nobody has a portfolio where all the stocks are in the green, right? So like even Mitch, who's And, and, and the Rosalillo's who are crushing it each have two stocks in their portfolios respectively that are in the red and more that are trailing the market.

And I think that's a good reminder that no one bats a thousand [00:19:00] and that you can do. really great things as an investor with a Mets batting average, you know, like sub 300. I'm batting a thousand, Jeff. All of my Oxford. You're batting a thousand in the wrong direction. Yes, you're right. Yes, you actually, you are the only person who's entirely in the red.

So congratulations on that. But I think the other thing that's going to be. Here's what I'm doing. I 

Jason Hall: think I've talked to you about this offline, but last year I proved That I can be the best winner. I was the best, I mean, it was like, I won and it wasn't even close. So I think I can lose by more than anybody.

Jeff Santoro: Hey, you know what? You set your goals and you reach for them. 

Jason Hall: That's right. Proud of you. Aim low. Aim low, pal. 

Jeff Santoro: So one of the things that I noticed last year, as we went through the year, was how volatile and crazy some of the stocks were. Right. You know, one month up double digits, another month down double digits.

So like all the way to zero and then some and same thing quarter to quarter. And I'm curious if we're going to see as much volatility in this year's [00:20:00] contest over the course of the year as we did last year. And because I remember in January, February of March last year being very surprised at how many of the stocks in the portfolio contests were up because we all still had double digits The horror of 2022 in our minds, right?

And now that we've been through like a year of a decent market, the market still doesn't feel as surprising to me as it did last Q1, you know what I mean? Because like, it's been good for a while. So. I am curious to see how that plays out. So that was another thing that kind of jumped out at me looking across across the whole contest.

Jason Hall: Yeah, things can change quickly because just, you know, again, going back to last year at the end of the 4th quarter. My portfolio was up 7 percent and. The unportfolio was up 33%, which that's bad, right? The unportfolio, the goal was to pick the stocks that were going to perform very poorly. And the unportfolio basically went sideways for the rest of the year.

Even though two stocks went down a ton, like they were supposed to, and then two stocks went [00:21:00] up a ton, which they weren't supposed to. And then my portfolio ended up. Going crazy as tech stocks took off. So you just don't know, like it gets back to that same theme that, that, you know, a lot, a lot is going to change between now and December 31st.

Jeff Santoro: Agreed. It'll be fun to watch. And we'll do this review show every quarter as close after the end of it as possible. So in three months, we'll do this again, see where we land. All right. I want you, Jason, go, you don't have to talk about every stock in your portfolio, because you have one of the portfolios with the most stocks in them.

But maybe go through And talk a little bit about what you learned or wondered or was impressed by or were worried about any of the companies in your portfolio, I guess, specifically related because like everyone reported earnings between when the contest started and now. So we have more information now than we did in December when we pick them.

So as you go through 

Jason Hall: your fiscal year earnings, or we've gotten their most recent quarter, if they don't follow 

Jeff Santoro: the calendar year, most of them are [00:22:00] Q four slash 2022. Three full years, but some are not so just yeah What jumped out to you as you went through the earnings of of the companies in your portfolio?

So there 

Jason Hall: I have three stocks that are all in the renewable energy business. I've got in phase which is residential batteries and then the electronics that go on solar panels and stem which does like big batteries and software and And TPI composites that does turbans the blades that go on turbines, they make the blades or contract manufacturer for basically all of the turbine manufacturers.

And those stocks are down two of those are, are down a lot. STEM and TPI are down 44 and 30 percent and then in phases down like 8%. And it's just a reminder of the, the, the pain of cyclical industries, because right now we're in the midst of the biggest downturn for solar. In a very, very long time the wind business is pretty weak now.

These are interest rates have gone up. So all of the big capital spenders are kind of re evaluating, even though there's huge incentives with the Inflation Reduction Act. [00:23:00] It takes these markets a long time to turn. And they continue to, the guidance continues, like all of these companies, like their guidance for the current quarter.

Is that it's just going to get worse. So the market still is, is waiting for some sign that things are going to turn. And I think that these could end up being from here, from these low points, these could be three of the 10 best performing stocks in the whole contest by the end of the year for this low point.

Jeff Santoro: Or they could be on the outset medical path and drop another 50 percent 

Jason Hall: maybe of these three, I think maybe stem because like they could run into capital issues. But in phase, I would, I would push back on that because their business is such high quality, but you're to your point, like things could stay bad for longer than you expect.

Right. What about you? 

Jeff Santoro: Well, I'll, I'll do mine in a second, but like, just to piggyback on what you just said, it reminds me a lot of the way I felt during 2022 when the market was going through that prolonged [00:24:00] downswing, that constant thing of like, Okay. Is this the day I should buy a lot more of this stock or will it be lower in a month?

You know, and it's like, you don't know. So I, I think it goes back to like, you know, the toolbox and having some sort of framework plan strategy amount you're willing to invest in a specific company, position sizing, all that stuff. It's like, you have to kind of prepare for those things when the market is sort of at normal, right?

So that when it does something crazy, whether it goes up a lot in a short period of time or tanks, you're not panic selling or panic buying and trying to figure it out as you go along. 

Jason Hall: Well, there's another part of that too. I think it's important to mention to bringing up the toolbox. When we get caught up in trying to get the perfect price or avoid, you know, the, the falling, was it the catching a falling knife or whatever it's called?

Like all of those things. Those are such short termism mentality, ideas. This is where valuation comes into play as [00:25:00] being useful, even for stocks that valuation can be really hard to do because they're not cashflow positive or, you know, any of those things. But like you can have some idea of like a range of price that makes sense and then overlay that with your long term goals, right?

You're not buying this stock because you think this is the bottom. You're buying it because you think in five or 10 or 30 years, it's going to help you have the wealth you need to, to have financial independence, right? Yeah. And remembering that, I think that's the, that's so important. 

Jeff Santoro: Don't forget your goals.

Yeah. Don't forget your goals. Right. So one of the ones I want to talk about in my portfolio, because it's one that I know you own is Boston Omaha. Yeah. And. The reason I want to talk about it is I, this is a company that I've followed probably closer than a lot of other companies for a couple of reasons.

It's one of the earliest ones I bought that I've still held on to. And it's one that I cover a little bit for the work I do at the fool. And I've been frustrated the last couple of quarters with. The lack of information that comes [00:26:00] out from Boston, Omaha, there are a conglomerate just in case anyone's not familiar with it.

There are tiny conglomerate, tiny conglomerate. They get compared a lot to a, a mini Berkshire Hathaway, which is completely unfair. It's only because they're based in Omaha and one of the. Directors, one of the co CEOs is vaguely related to Warren Buffett, and they're trying to do a similar thing, but there's no reason they should ever be in the same sentence.

But they pattern themselves after Berkshire in the sense that they don't do press releases. They don't do earnings calls. They just drop the 10 K or the 10 Q and they do an annual letter and that's it. And That's great when you're a freaking Berkshire Hathaway, but it's super frustrating when you're a tiny conglomerate trying to get your footing and convince investors that your business is worth investing in and.

Every quarter comes out and the numbers are fine. I looked at Q4, I looked at the full year results and everything was good. You know, everything's growing nicely in the business, but they made a [00:27:00] decision to close their asset management part of the business. Fine. Businesses make decisions like that all the time.

But other than saying, basically this isn't working out. So we're closing it. There was no other. Color or commentary now their annual letter usually comes out in April. So there's a chance that there's going to be a little more information in that other most certainly will be. Yeah. But even that though, like, I don't know how much it might just be an extra couple sentences beyond what they already say.

So it's like, that's, that's where I'm frustrated. I'm not necessarily frustrated with the business results. It's the lack of it. It makes me, I have a hard time building higher conviction because other than the numbers that they're putting out, I don't have a lot to hold on to. I don't know. It's hard to evaluate 

Jason Hall: a business like this without more context about what they're doing and the decisions they're making, because especially Jeff, you and I were texting about it and full disclosure, I can say this because again, we're recording this on April 2nd.

So it's going to be a week before it comes out. I [00:28:00] actually added to my Boston Omaha position today. We got the 10 K Friday last Friday after the market closed, I believe. Or was it earlier this week? No, 

Jeff Santoro: they released on like Tuesday last week. That's right. That's what we usually do a Friday. So it was odd that 

Jason Hall: they did it at the Friday before, but they finally dropped it.

And so anyway, it came out and the so he came out Tuesday of last week. I read the report. I did a show for the, for the Motley Fool too, for members. Taking a look at it. So I really took some time focus on kind of the key things and like to think big picture about the, like, what is the real thesis here?

And has the thesis really should, is the thesis busted, right? Because first of all, the core part of the thesis for Boston Omaha is you've got these two co CEOs that founded the business, took it public. I think with the reverse merger, I don't think they did a traditional IPO. So they acquired a shell company, renamed it Boston Omaha.

Change the ticker, which [00:29:00] they've actually done twice. They changed it to one thing and then they moved it to the New York stock exchange and changed it to the current ticker. So they did an IPO in the traditional manner, but the whole thesis is you've got these two young guys that had some experience in allocating capital prior and some investing success.

They both ran their own running a publicly traded company combined. They own a substantial stake. So they got tons of skin in the game and you're betting on their ability to. Allocate capital to their core businesses. So the insurance and the the, the billboards and the cable, the, like the broadband business that are these, at least two, two of those are really high capital expenditure businesses where you put a lot of capital out, but you have assets that last a long time and generate a bunch of cashflow.

And what you're really betting on is that they're going to take that cashflow, that capital, and then they're going to go find something to generate better returns on. And it's really hard to tell that right now because. Well, the needle gets moved. Like with the asset management business, it feels like they told us last year [00:30:00] that they were going to stand up this great asset management business.

And then they just turned it off and it's really been around for five years. They finally found some things they wanted to do with it, but I don't think they could find investors that wanted to support it. I think it's a good thing. 

Jeff Santoro: There, it was a bad time to start asking other people to invest alongside of them.

Yeah. 

Jason Hall: Yeah. For, I mean, the market's gone gangbusters and you got, you know, you get 5 percent on treasuries. So it's, it's a tough, like all of those things combined, make it a tough time and then, so I really tried to internalize all of that and process and think about it, but then, like you were saying earlier, the core business, It's doing fine.

Growth is solid. The business generates positive cashflow. They generated free cashflow this year. And it's traded, the stock's trading for like a 2 per share discount to book 

Jeff Santoro: value. I think part of it too is, and this goes to what we talked about previously with the need to do something or to have information.

Right. So for a while they were acquiring bolt on billboard [00:31:00] companies, bolt on fiber companies, bolt on insurance company. You know, they were adding in the industries they're already in. They were adding other companies and buying more of them. So you'd get a 10 Q and, or there'll be a press release. They bought this billboard company and it added 5,000 billboards to their portfolio, right?

They haven't done a lot. In the last several quarters, so and at the same time that the stock has just sort of trickled down over time. So every quarter it's like I find myself wanting to be surprised with like some information like, Oh, this thing happened and now there's now it will be better or worse.

But it's just like every quarter is like Groundhog Day. It's just like everything's fine, 

Jason Hall: right? And the thing to me, Jeff, this is the last thing I'll say about him. We can move on. I don't want to turn this into the Boston Omaha episode, but so I think anybody that's followed me for any. Period of time knows that I'm a pretty big fan of Brookfield companies.

And it starts at the top with the, with Bruce flat, the CEO there and the leadership culture that they've [00:32:00] built across all the Brookfield businesses about capital allocation, where they move at their pace, not the market's pace. They will sell an asset when, when they've, I've already figured out, okay, this is not growing at our, like it doesn't meet our hurdle rates anymore.

So we'll put word out there that we're willing to sell it. And it may go a year and they don't sell it or it out of nowhere. It feels like they sell it quickly because some big pension fund wants the cashflow and they pay the multiple that they want. And then it may be nine months or a year before they find the right asset to redeploy that capital into.

You know, they're not trying to hit the market's quarterly number, they're trying to create value and things like what you were just talking about with Boston Omaha, like they're, they're, they're kind of cadence of, of acquisitions and expansion slowed to me that reinforces that they're probably pretty good with allocating capital because they're being disciplined, right?

Yeah. And 

Jeff Santoro: I would say, you know, you know, who else's cadence of acquisitions [00:33:00] has slowed dramatically over the last four years? Right. The great, 

Jason Hall: the great uncle of one of the co 

Jeff Santoro: sponsors. You know, it's, it's the exact same feeling people have when like 13F day comes and everyone's like, what did, what did Berkshire buy?

Like, and it's like, Oh, not much. Yeah. Like, all right, so let's move on. Yeah. We don't want to spend too much time. So there's only two others in my portfolio that I, I just want to say a few things about cause one. Is something we talked about earlier. And one is another company that I know you own, and I'm curious your thoughts.

So just circling back to outset medical for like 30 more seconds, only at the year end do they report their installed base of their Tableau devices. And I think this is worth Knowing, and this is why I still have a little bit of hope in the company. So in 2023, their total installed base of their devices was up 34%.

That's pretty good in a year when they had an voluntary stop sale on one of the versions of their device because of an FDA issue. And just general economic cautiousness [00:34:00] by companies buying things, right? Their acute and sub acute providers were up 27%, and the home install base, which is where I think the most exciting part of the future of the company is potentially, was up 63%.

Now, that's probably off a pretty low base, so I can't get too, too excited. 

Jason Hall: No, that's a number you wanted to see double last year. 

Jeff Santoro: Yeah, but 63 percent is not, Terrible. I guess, I guess you're right. Yeah. That is another way to look at it. Like maybe it should have been 200 percent off the small base. So those are, I mean, I'll have to wait a year to see, you know, if, if a year from now, those numbers are the same or lower.

That, that will be a big worries, you know, red flag, yellow flag to me. But 

Jason Hall: Yeah, you won't still own this stock if, if that's the case in a year. Yeah, probably not. Somebody else will own the business.

Jeff Santoro: Hey everybody, we'll be right back, but first, a word from our sponsors. Earlier in the show, you heard us talk about investing platform Public.com. That's where you can trade options with no commissions or per contract fees, and you get a rebate of up to 18 cents per contract traded. [00:35:00] NerdWallet recently gave public five out of five stars for options trading.

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Alright, the other one is EPR Properties, which is a REIT that owns a lot of experiential real estate. And I read their, I read their quarterly report and their earnings call and I was actually pretty encouraged.

That a lot of the biggest issues around their exposure to movie theaters was behind them. Well, 

Jason Hall: rent, rents are less than 40, it's less than 40 percent now, and I think it was like 47%. 

Jeff Santoro: Yeah, so it's, it's, right. It was two things that stuck out to me. One is that, That the theater industry is recovering.

It's not anywhere near where it was prior to the pandemic, but it's better and that they're actively trying to diversify away from that exposure and the [00:36:00] stock's been pretty beat down. So it feels like if they're, if they're on the upswing of that, it does make me wonder if right now is a, is a pretty compelling time to think about adding to my position.

So those were two more that jumped out to me in my portfolio over the first quarter of the year. 

Jason Hall: Yeah. I think I bought more EPR. today. 

Jeff Santoro: You think you did like you, it was today. So you should like, no, 

Jason Hall: Jeff, I sent you a screenshot. I bought a lot of stocks today. It was my bender. I wanted a bit of a bender today.

Yeah. 

Jeff Santoro: A raccoon on meth. Jason hit, hit the buy button today. Stocks raccoon on that. That's right. Stocks raccoon on that. All right. So let's, as we, as we, as we turn the page away from our own portfolios, or actually, no, let's stick with our portfolios a little bit longer. What is the stock in your portfolio that you would still buy today if we were starting this contest right now? So 

Jason Hall: I bought two of them today.

I bought Boston Omaha and I, for the first time in a long time, I I added to my quantum scape position. Wait, did I, I can't, I don't know. You did. [00:37:00] You did. I did. Okay. Cause I was thinking about it and I'm like, no, I want to wait for something more material. And then I'm like, They just promoted a new guy to CEO and this co founder who's CEO is just moving up to the chairman role.

That's a, that's the material thing. All right. So 

Jeff Santoro: if you're, all right, but you're hedging a little, if you had to pick one stock in your portfolio. So 

Jason Hall: if I had to pick one probably SoFi, I think probably SoFi because it's a combination of, so with all the other ones, there's little warts that are going on Wolfspeed.

We've talked about like, Industrial demand's down and like the weakness in EVs is, like that's a real problem for Wolfspeed. Renewable industry's a mess. QuantumScape's still a startup. SoFi's showing it, like they're doing it. They're gonna make money this year. They're gonna be gap profitable the full year.

And the stock's like, I don't know, 10 times, 12 times expected earnings per share in 2026, like gap earnings per share. So I'd say so far. 

Jeff Santoro: All right. What about you? [00:38:00] Mine would be EPR which I sort of just explained why a minute ago, as I look through my portfolio, it's probably the one I think is in the best position to be added to.

I mean, I own all of them, so I don't, I, I have to. I have some level of conviction in all of them. So yeah, I would go with EPR properties. All right. What is a do over stock? So if you're starting the contest today, you would not have included and you have to give me a business reason. You can't just say, cause it's down.

Jason Hall: Yeah, no

probably outset. I know that might seem a little unoriginal and maybe bias because we've talked about it so much, but of, of these, of this group in my portfolio, it's the one that I know the least. And I did it just because it 

Jeff Santoro: was down. Right. Right. I was going to say, I remember you specifically picked that just to sort of bottom feed.

Yeah. And, 

Jason Hall: and, and, and with the rest, I think broadly, maybe may stem, eh, but I know STEM pretty well, and I know the demand, like the, the industry demand for what they do is giant. If they can just kind of execute a little better, I'd say, I'd say [00:39:00] outset because like we just talked about with that, like that one number with the home units.

Sure, it grew 60 something percent, but double or triple is really what we would have liked to have seen. What about you? 

Jeff Santoro: I mean, if I was going to pick like based on price, I'd say outset because obviously that was my biggest mistake. Actually the one I would probably not pick, I struggle with this one.

So you, it's Health Peak Properties, but the ticker changed to DOC. It's just, I even, I even forced myself to read through the 10K again, just to sort of wrap my head around the business a little bit better. It's a REIT that specializes in healthcare and medical facilities, which I, I think is a pretty resilient area in the world of REITs in my mind, I think to myself, because those are very specific buildings, right?

Like if, if a big pharmaceutical company leaves. a campus, you're not going to move an Amazon warehouse, you know, Amazon's not going to take over the building, you know what I mean? Because there's specific things and vice versa, too. If [00:40:00] a big biotech is looking for a facility, they need one with certain specifications, or it's a huge renovation.

So I feel like that distinguishes them a little bit. And I check every quarter I look at the results and I'm just like everything is like it's just boring. It's it's like everything's fine. Like there's no red flags. There's no green flags and the stock doesn't seem to react or go anywhere. I don't know.

It just bores me. I'm not interested in it. I picked it to force myself to learn more about it. And as I have, I've become less interested. So purely from a do I care about this business standpoint, I would probably do over. Yeah. 

Jason Hall: Well, I think the thing too, with, with health peak is health peak and physicians realty merged.

Jeff Santoro: That's why the ticker 

Jason Hall: changed. That's a pretty big merger of two, like as much as there's growth and potential. It's also not a great industry. So even though these are mostly like doctor's offices, all like a lot of office space and [00:41:00] then like some biotech space too, it's not like hospitals and that kind of thing.

I don't think that's a big part of the portfolio. Hospitals are terrible business, right? You don't want to own a hospital and lease to a hospital operator. Cause they're probably going to go bankrupt, right? They just, it's a tough business. It's still just, there's a ton of inventory right now. Right. And we've seen the big pullback in biotech investment over the past couple of years.

That's been tough on these businesses. So it's kind of in the too hard pile for me right 

Jeff Santoro: now. Yeah. Yeah. And it's one I bought on total borrowed conviction too. I never really had a, you know, it's in my portfolio because of that. But I'm again, I've said before, I'm trying not to sell anything in 2024. I'm trying to force myself to like own my mistakes and learn more about them.

So, yeah, it's just not what I'm super interested in, not want to have a high level of conviction. All right, last question before we wrap things up here. If there, is there, is there a stock anywhere in the contest that has gone up that you think is a buy right now?

So I asked, and I asked that it's gone up because I want to challenge you to think about like the idea of adding to a [00:42:00] winner. So you can't bottom feed again, you have to pick one that's done well. 

Jason Hall: Yeah, no, I love this question because I think this is a time to be doing exactly that, right? Because it's a good time to like, re force yourself to think about your goals.

And I'm gonna say probably CrowdStrike. Even though it's probably overvalued. This is best of breed. In a company, in an industry that's going to continue to expand and grow, they've gotten to scale. It's become a cash cow. Especially if you're looking five or 10 years out or more, I think the potential for just incredible market beating gains from here are wonderful.

You know, you can look at a company like Adobe or Microsoft over the past decade. And there was at any given point, you're like, well, this is a really big company. How much can they really grow stocks a little bit pricey. And still looking back 10 years later, be like, man, that was smart. I think that's CrowdStrike right now.

Jeff Santoro: I'm I'm mad. You took CrowdStrike. Cause that probably would have been my [00:43:00] pick too, because I could be your pick too. Well, I'll think of a different one too. But the reason I say that is because it's one of those companies where it looks like every single quarter, I look forward to seeing the results. I opened their results.

I read the results and I'm just like, it's, it's great. It's like, like they, they impress me every single quarter. And even when it's like a less than stellar quarter compared to other ones, it's still really, really good. And it does feel like they're one of those companies where you can make a mistake buying at a higher valuation.

Because I, I just, I think they have a very long runway of growth still ahead of them. And then that scares me. And I worry that I'm wrong. I would probably pick them. All right. Let me think of a, of a different one though. Well, while you're 

Jason Hall: thinking, I would say my, my, my, my next one, and this may be the one that you'll, you'll go with and I was very tempted to go with Taiwan Semiconductor, TSMC.

Jeff Santoro: So, before I ask the question and, and changed it to one that has gone up, I would have picked Enphase. Or maybe Transmatics, [00:44:00] because I love the story of Transmatics. Yeah, yeah, I'm glad you mentioned that one. And Enphase, because, actually, you know what? No, Transmatics did go up. Yeah, so, if it was, if I was going to pick one that went down, I'd go with Enphase, because I, I feel like they're going to turn it around.

It's the quarter. Is Transmatics up? 

Jason Hall: No, I think it's down like 6 percent because I was looking because that's in it's in Mitch's. 

Jeff Santoro: Yeah. It's in Mitch's. That's one of the few that's down. Yeah. 

Jason Hall: It's down. It was down 6%. And I remember thinking it's so funny looking at his portfolio. The two that are down are Transmatics and MercadoLibre.

MercadoLibre's been my best performing stock by, by far. Wealth creation of all yeah, and trans medics is one that I deeply believe 

Jeff Santoro: in So I think I would go with and I'm gonna put my my mouth where my money has just been I would actually go with Celsius holdings and and here's why it's gone up a lot.

Although in the last couple months, it's sort of cooled off a little bit It's one that I had at the top of my list of stocks I felt like I should add to for a really long time and I just couldn't bring myself to do it because I there's still Part of me that can't [00:45:00] believe You An energy drink company is going to be a long term sustained winner, even though we've seen it happen with Monster Beverage in the past.

But we've 

Jason Hall: only seen it happen with Monster. 

Jeff Santoro: Agreed. But again, I got to a point where I said to myself, do the thing that you say you believe in, which is Adding to winning stocks and having the guts to put enough money in that. It's like a reasonable allocation in my portfolio because as I was hemming and hauling over all these months, I think my total cost basis for the company was like 330, which is, you know, in, in, in my 

Jason Hall: portfolio, Jeff, let's get some real money here.

So. 

Jeff Santoro: I finally did it a couple weeks ago. I, I brought it up to a much more reasonable allocation in my portfolio. And I'll, I'm happy there for a while. I'll see how it goes, but because I just added to it and because I did have that, a struggle, I will say that that's, that's my pick. All right, last question.

Your portfolio will win Q2, if

you pick [00:46:00] all new stocks. If 

Jason Hall: the, yes, yes, no, it's

my portfolio wins Q2 if we start seeing better outlooks for renewable energy. Yeah, you are pretty 

Jeff Santoro: heavily allocated there, right? 

Jason Hall: Huge. The three, three of the stocks in it's three of two, two of my worst performing, which is saying a lot. , I mean, if there's like one binary action, it would be just that better, better outlook for renewables.

What about yours? 

Jeff Santoro: So my first thought was if outset turns it around, but then I realized I can keep that as a loser and still have a fine portfolio because I have enough stocks. I think for me, it's about one of two things would have to happen. One of the stocks that has the potential to really take off does.

So CrowdStrike has another great, you know, last three quarters or DreamFinder homes, which has done really well for me. It's a home builder. If they really take off, you know, have some good results in the next couple of quarters. If one of those really kind of hits, I feel like it. I could pull ahead, or if all the ones that are sort of break even ish, [00:47:00] just have good Q1 results, and go from down three to maybe up five.

Do you know what I mean? Like, if my batting average gets a little higher, I feel like that might be enough to get me over the edge, too. But it's probably more likely that CrowdStrike takes off or something like that and carries me over the Over the finish line, 

Jason Hall: if we see a stock market correction in the second quarter, my portfolio could be down 50 percent halfway through the year.

Jeff Santoro: Yeah, well, and I didn't I meant to mention this earlier when we were talking about like takeaways for the whole contest. I was struck by how many people ended Q one. around break even up one down to up three down for something, you know, around break even. And I'm interested to see how that shakes out. Is this a year where we sort of middle along and people are always kind of around 0%?

Or do does it does it get a little more binaries as time goes on? All right. And then the final question, Jason, then we will wrap this review up. Whose portfolio do you think will win q2? 

Jason Hall: [00:48:00] Oh,

I think mine will. I'm kidding. I like the confidence. Yeah, this is maybe Gillies. I think Jim Gillies could do well because he's got some energy exposure and then he's kind of taken a little bit of a beating because of AI check, for example, is down a ton because everybody's convinced AI is going to put it out of business.

So, I would be surprised to see to see a bounce back like that. What about you? Who do you think? 

Jeff Santoro: So, I think it'll probably be one of the audience members, cause that just seems to be how this goes. But if I had to pick a I actually think it's gonna be Nick and Casey Rossalillo. I I think that their decision to build a semiconductor portfolio was actually really smart.

And I think they were smart about the specific companies they chose. It 

Jason Hall: was really unique that the people behind chip stop and stock investing decided to put a portfolio of [00:49:00] chip stocks together. 

Jeff Santoro: I will give them credit for this. They are the one team that viewed this as a great marketing opportunity for their YouTube channel and they nailed it.

They did. 

Jason Hall: They did. Check it out. They've got some great. It 

Jeff Santoro: is really great. We should, we should we should connect with, with, with them again and have one or both of them on the show. Yeah. All right. I think that's it, man. I think we, I think we covered the, the contest pretty thoroughly. We'll, we'll do it again in a couple months.

Jason Hall: We did. I'm proud of our, I'm proud of our listeners doing, doing great work back there. They are very proud of Mitch Fatale. Mitch Fatale, good luck cutting your meat, buddy. 

Jeff Santoro: Yeah. We should, we should we should let him know what he picked. 

Jason Hall: I'll reach out to his publicist. Yeah. 

Jeff Santoro: Have your people call his people.

Let him know what his stocks are. 

Jason Hall: I will. I'll have our social media intern contact his publicist. That's what I'll do. Hi, Jeff. We have done it. You were correct. All right, everybody. Always like to remind you. We love giving our insights, giving our answers to the hard questions about investing, personal finance, picking [00:50:00] stocks and more, but you got to figure out your own answers.

Some of you have figured it out, giving us some great portfolios to get in the contest here, but you got to do more than that. You got to manage your own decisions, own them, and you're going to find your own path to financial success. I believe in you. You can do it. 

All right, Jeff, we'll see you next time.

Jeff Santoro: See you next time.