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- So we're looking ahead
to the second half of 2024.

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You've got some stock picks

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for us today. What are your picks?

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- Yeah, so looking at the second half,

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we are really excited
about Walmart and Costco

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and we can see that in our active choices,

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them being in some of our model portfolios

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and also being in our T-M-F-C-E-T-F,

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they display a great amount
of strength when it comes

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to delivering value to the consumer.

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And I think that that's
gonna be a really strong play

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as we go into the second half

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because they're able to deliver
on necessities while also

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having a business model that supports

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that sort of impulse purchase.

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And being able to treat
yourself at a value level.

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- Walmart and Costco, even

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with consumer spending cooling off

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- Even with, because when
we think about it in the,

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when we think about Costco
specifically, we know

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that they have a bit more
of a premium customer

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and we've seen that sort of
premiumization be a ballast

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for a lot of the consumer
and retail sector.

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So in a sense that they have more income

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and they've got a greater amount
of savings, typically the,

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the, the typical customer.

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And so they have already
sort of survived the worst

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of inflation and they're
not changing too much

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of their consumption as when compared

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to when we look a little bit
farther down the income ladder

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where those different choices
are continuing to be made.

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So the customer just tends
to be a bit more sticky.

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Any sort of shakeout that
Costco was going to see,

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especially in the executive membership,

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has really already happened.

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And so what's left are
loyal members who've not had

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to make any more trims on their income

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or on their discretionary

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- Spend.

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Walmart's been trading kind

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of like a growth company for a while.

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Is that gonna continue? It

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- Could.

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And I think where that stemmed from,

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and if it's of course something

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that we've noticed when
we look at, you know,

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how we wanna allocate to that
stock is that it's reliable.

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And so oftentimes we'll see
investors clinging to those sort

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of core stocks and treat them as growth

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because they're a place where you're going

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to get a stable dividend.

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And the share price is
sometimes reflecting more

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sentiment than fundamentals.

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So the sentiment is that
Walmart's going to continue

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to be very reliable

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and so that gives them a
sort of an intangible boost.

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It adds a sort of premium to the stocks

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that you can't necessarily model out,

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but I, I would disagree

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that it should be priced as a, as a growth

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- Stock.

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Looking into the second half
of the year, you got Walmart,

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you got Costco, any other ones? I would

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- Say we continue to be
excited about MasterCard.

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You know, when we look at the valuation,

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it is a little bit rich,

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but at the same time it is the sort

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of toll taker, if you will.

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And so even if real spending
is down, they still have

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to pass through the rails.

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So that continues to excite us.

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And then also sort of deeper
into the retail space,

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or not retail but consumer,

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we're still excited about Netflix.

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It's a bit rich. Again, that tends

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to be the story in this market,

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but they've proven themselves
to be a mature yet cash

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or rather growth producing

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and cash generative
company that is now sort

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of in the advertising era
of their company life.

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And I think that has surprised investors

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how well they've been able
to do now that this sort

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of subscription growth is a
smaller part of the engine.

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- So is Netflix gonna start trading like a

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traditional media company?

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- It's definitely possible.
I wouldn't say it's something

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that we're going to see
in the immediate future,

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but given the fact that
it's sort of starting

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to overtake traditional cable,

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we've seen in the internet chatter

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that people are recognizing
that when you combine all

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of these subscriptions, it's
effectively cable again,

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you no longer have to work
with a major telecom provider

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to have these different bundles

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and tiers if you wanna get your sports

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and your, you know, your cinema channels.

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But you do have to use three different

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providers in order to get that.

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So it's effectively
cable bundle bundled in a

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different sort of mechanism.

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So it's definitely possible.

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- Gotcha. Do you think
subscribers of Netflix might bail

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on Netflix and just go
back to traditional cable?

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- You know, I think that
has a lot to do with

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what the cable companies
are going to offer.

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And it comes down to
things like is on demand,

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is the on demand offering
competitive with Netflix

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and other streaming offerings?

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Because that's really
what the difference is.

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That is the differentiator
with these streaming networks.

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And we've also seen that
when we look at those sort

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of landing pages for
different major companies,

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they've got the APIs worked in

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for these different streaming networks.

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So they've already been
working together in such a way

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that I'm not quite sure
it would benefit them,

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the cable companies, the
traditional cable companies

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to split off and say,
you're not welcome here.

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Because that then means that
someone might leave Netflix

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and then they have to
have two subscriptions.

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Now either that or the
traditional cable company has

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to deliver on the exact same offering,

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which we start getting into all the rights

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and, and things like that.

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It's quite expensive.