💥 Are Growth Stocks Dead? My Investing Plan for 2022

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in this episode i'm going to share my
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2022 investing plan with you as well as
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react to one of my favorite youtubers
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who just shared his own whether you're a
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fan of growth stocks or value stocks
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this episode is for you your time is
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valuable so let's get right into it this
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is joseph carlson we're going to be
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talking yet again about kathy wood and
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arkhanvest and i know that i've made
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some recent videos about them on my main
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channel one of them was how i i
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criticized kathy wood and arch invest
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analysis on tesla saying that they're
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going to be you know a 2-3 trillion
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dollar company in five years that
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they're going to have a robo taxi
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service that revenues 300 billion
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dollars in five years i just think that
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these these predictions were very overly
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optimistic i think that some of them are
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detached from reality if you haven't
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heard of him he's another finance
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youtuber and his channel is literally
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the exact opposite of mine he focuses on
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companies that dominate the present
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while i focus on companies that might
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dominate the future his main portfolio
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focuses on dividends and building
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passive income while mine is filled with
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companies that are barely profitable if
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they're profitable at all his investment
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style is all about slow and steady
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compounding while mine is about volatile
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and explosive growth if you're a fan of
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my channel i think that joseph carlson
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is one of the best possible youtubers
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that you can follow and if you haven't
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subscribed to his two channels i really
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think that you should he actually
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inspired me to create my own if you're
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not familiar with this channel here's a
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taste the stock market exploded in
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popularity with retail investors
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millions joined in just a couple months
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and kathy wood gained a name for herself
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with their arc invest funds and the
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outstanding performance they had in
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2020. we've also learned this year that
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good things don't go on forever the ark
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innovation etf which is one of the best
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performers in 2020 is now one of the
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worst performing etfs it's down 14.5
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percent while the rest of the markets up
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25
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an even bigger loser is the arc genomic
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revolution etf this is down 31.5
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the ctf holds some of the most
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speculative unproven companies many of
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them that have no revenue but people
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were buying into the ctf like crazy in
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2020. it was one of the best performers
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going up over 200 percent costco is
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another one of these big boring
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companies it's literally a warehouse
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corporation and it's up 46
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year-to-date crushing most meme stocks
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and hype investments they can't compare
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to costco i've said this before many
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times over time the weighing machine
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matters the companies that will be
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successful and give you good returns are
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the ones of the highest quality the
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highest caliber that will generate the
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most amount of money for you as a
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shareholder in the long run costco is
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still perceived as one of these
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companies that will continue to grow its
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ebeta its free cash flow and its
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profitability for decades into the
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future and in my humble opinion costco
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may very well be the best company in the
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world i've read and watched almost
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everything that arc invest has put out
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and i don't think i've ever heard them
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talk about costco so why in the world
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would i tell you to subscribe to
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somebody who thinks that costco is the
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best business on the planet and
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regularly calls kathy wood a hype
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investor well it's because joseph
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carlson is consistently high quality and
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transparent and he has a very different
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view on the market from my own he
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recently released a video on his second
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youtube channel where he talks about his
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top 10 growth stocks for 2022 those
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growth stocks include google apple
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microsoft netflix and amazon
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literally almost all of the fang stocks
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the same stocks that kathy wood uses as
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cash if she chooses to hold them at all
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so let's start there it's important to
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understand that all investors exist on a
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spectrum that spectrum is your risk
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tolerance joseph carlson is a value
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investor his definition of risk is
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volatility which is a completely fine
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definition of risk i'm on the other side
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of the spectrum from joseph my
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definition of risk is technical risk the
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actual technology that a company is
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building and whether it's going to
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dominate its market i don't care if the
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stock drops 20 percent i actually don't
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care if a stock drops 80 percent as long
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as i believe in the underlying business
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from where joseph carlson sits tesla is
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a hype stock it trades at crazy
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multiples it hasn't been profitable for
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very long and its valuation is crazy by
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any value investing metric to me it's a
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company that's consistently deepening
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its technical moat in robotics energy
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storage and artificial intelligence to
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joseph carlson apple is that growth
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stock it's a huge chunk of his
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portfolios just like it is warren
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buffett's to kathy wood apple is treated
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as cash that doesn't make it a bad
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company but to arc invest it's something
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that you hold because it's stable even
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in a choppy market to joseph carlson
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costco is that cash-like position it's a
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foundational stock in his portfolio best
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business in the world i don't think i've
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said the word costco once before this
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episode and i'd much rather invest in
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amazon than costco and by the way let me
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tell you something about amazon since
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its ipo in 1997 amazon has dropped
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between 10 and 19
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35 different times it's dropped between
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20 and 29
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15 separate times it's dropped between
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30 and 39 eight times between 40 and 49
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five times and it's dropped more than
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fifty percent four separate times oh and
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by the way it's dropped over ninety
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percent one time which was the dot-com
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bubble but if you would have invested
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just one thousand dollars in amazon's
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ipo and held through all that you would
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have 1.8 million dollars today if you
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would have invested in amazon just 10
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years ago you would still have almost
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20xed your money since then thanks to my
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buddy from value on twitter for sharing
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those stats about amazon with me from
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value runs a great community over at
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seeking alpha called potential
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multibaggers which i'll link in the
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description below i really think this
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context is important so let me give you
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a more current example and then i'll get
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into our investment plans for 2022. if
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you caught my last episode i spent a lot
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of time talking about zoom ticker symbol
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zm zoom has been busy developing
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innovations for a core unified
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communication solution to provide
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customers with everything they need to
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support digital and hybrid work
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environments this isn't a company
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catering to a single customer market
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it's a communication and collaboration
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platform designed for the entire market
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businesses and individuals alike it's
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arc invest's seventh biggest position
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overall with almost 1.2 billion dollars
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in it across all of their funds here's
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what joseph carlson has to say about
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this company what we can see over and
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over again example after example is that
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chasing hype doesn't work out in the
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long run you can take an example of zoom
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this is a company that had a lot of hype
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during 2020. if we overlay the stock
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performance of microsoft and zoom you
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can see that over time slowly but surely
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the companies that have stable earnings
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growth and profitability and reasonable
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valuations went out in the end okay
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let's just look at this chart over a
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consistent time frame instead of over
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the last five years since zoom ipod in
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april of 2019 at 62 dollars per share on
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the day zoom ipod microsoft was worth
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130 dollars per share over most of 2020
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zoom more than 8xed in under a year and
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microsoft returned less than 20 in that
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same timeframe zoom outperformed
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microsoft so hard in 2020 that even
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after a 45 drawdown from its highs it
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still provided more returns than
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microsoft you could actually literally
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cut that stock in half again and it
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would still be microsoft by a mile in
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fact that's exactly what happened today
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zoom is trading at just under 200
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dollars a share that's still a tripling
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in under three years microsoft is
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trading at 330 dollars so it hasn't
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tripled since zoom came onto the market
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that means that even after zoom's
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disastrous 30 drop over the last month
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it's actually still outperforming
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microsoft since the pandemic began
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you know how most people tell you that
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they love strong dark coffee but
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secretly they add a lot of milk and
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sugar to it when nobody's looking i
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think that's what goes on with a lot of
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youtube channels that focus on investing
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everyone says that they're a long-term
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growth-oriented investor until their
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stocks get cut in half then they find
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out that they're really more like a
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midterm oriented value investor who
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doesn't really like volatility the thing
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i really like about joseph carlson is no
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matter what he knows exactly what type
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of investment style he has and he's
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consistent regardless of what's going on
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in the market your risk tolerance and
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your ideal portfolio are probably
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somewhere in between joseph carlson and
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my own he does a great job of making
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consistent safe incremental returns in
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choppy markets sometimes even beyond the
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s p 500 and he's incredibly transparent
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about how he does it his microsoft
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thesis is the milk and sugar to even out
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the bitter volatile cup of coffee that
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is my zoom thesis there's nothing wrong
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with value investing and there's nothing
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wrong with putting milk and sugar in
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your coffee if that's how you like it
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it's only an issue if you keep doing
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something that you don't actually like
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because the media you watch including
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youtube tells you that that's how you
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should do it your portfolio is your cup
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of coffee and you can mix in as much
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milk and sugar as you like i mean that
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with all sincerity and respect in the
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world because at the end of the day
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you're the one that has to drink it
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that's why i recommend you subscribe to
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joseph carlson as well watching us both
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will help you find that right balance
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for yourself which is actually the most
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important part of our plan for 2022 so
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here's joseph carlson's plan for
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investing in 2022 and i'll add mine in
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as we go along i think it's good that
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every year we look back and assess our
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investing strategy see what we did right
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and what we did wrong and what we plan
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on changing for the future i want to
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highlight some lessons that i've learned
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and some things that i plan on
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implementing into my investing the first
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thing is one that's very simple that
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i've tried to avoid for a long time and
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that is to not chase hype this is not a
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hype channel this is real investing i am
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a value investor my goal as a value
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investor is to buy high quality highly
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productive assets for reasonable
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valuations most hype investments are low
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quality they're highly speculative
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they're not productive and in most cases
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they don't have reasonable valuations i
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completely agree with this there are a
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ton of hyped-up growth stocks and a ton
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of value traps the best thing we can do
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is learn to separate the true
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opportunities from the traps the real
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value stocks from the dying businesses
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and the real growth opportunities from
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the hype machines both of these types of
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bad investments get pumped up by
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mediocre market commentators so we need
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to drown out the noise i'm going to take
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stock of where i feel my time is being
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wasted and actively do something about
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it in 2022 i'm going to unsubscribe from
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every youtube channel and publication
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that doesn't respect my time as an
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investor or provide me with some sort of
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value if it's not informative or
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entertaining or actually relaxing i'm
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dropping it and moving forward i'm going
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to be much pickier about the things that
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i watch and read and listen to by the
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way i'm not saying i'm only going to
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keep the ones that i agree with for
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example i subscribe to joseph carlson
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exactly because i don't agree with him
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he's a great resource for poking holes
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in my own investment ideas and that's a
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super valuable thing to have
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ask yourself which channels which
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newsletters and which twitter accounts
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are providing you with the most value
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which ones are providing you with the
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least now ask yourself which ones you're
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going to double down on in 2022
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alright let's move on to joseph's second
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point the other thing that i think is
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important to outline for 2022 is to
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ignore predictions of economic doom and
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gloom predictions of doom and gloom will
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always exist you'll see many of them in
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2022 and maybe the market will have a
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correction maybe it will have a bear
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market but nobody knows no one has a
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clue the wolf of wall street says this
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best nobody
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okay if you're warren buffett or if
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you're jimmy buffett nobody knows if the
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stock is going to go up down sideways or
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in circles at least of all stock brokers
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that is the truest line in that whole
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movie so as we get to the end of the
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year it's a popular time for content
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creators to make videos about the
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upcoming collapse of the housing market
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next year or the stock market next year
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you'll see those thumbnails i'm going to
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be ignoring them nobody has a clue no
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one has a clue if the housing market
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will collapse or the stock market will
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collapse and people lose more money
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waiting for corrections than in the
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corrections themselves this again is
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wonderful advice but with a small caveat
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you should ignore people who are only
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doom and gloom there are a lot of
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channels that talk about nothing but
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crashes because it's cool and it gets a
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lot of clicks that's the type of noise
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that you should unsubscribe from but
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when one of the channels that you decide
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to keep talks about protecting your
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downside you shouldn't ignore it you
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don't want to keep your head in the sand
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you want to build the kind of portfolio
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that you're happy holding through doom
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and gloom especially if you're holding
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volatile growth stocks if i'm lucky
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enough to be one of the channels that
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you decide to keep around when you do
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your purge you'll notice that i made an
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episode saying stocks will collapse and
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explaining exactly what i'm watching out
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for and how i'm preparing since then the
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market has been nothing but red and many
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of the stocks that i talk about on this
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channel are down by double digits this
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isn't and i told you so it's a reminder
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that downturns are a real part of
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investing and there's value in thinking
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about them just like there's value in
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thinking about the bare thesis to your
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favorite stocks and etfs especially when
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they're going down so in 2022 instead of
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getting complacent i'm going to do a
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better job protecting my downside by
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learning about different kinds of risks
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and ways to counteract them inside my
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portfolio great let's get to the third
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point which i feel is the most important
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and lastly but i think also most
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importantly is i'm going to continue
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investing i'm not going to stop
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investing because of different fears or
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concerns i'll keep finding stocks in the
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stock market that offer good value if
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you've done a good job eliminating the
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noise and building a good all-weather
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portfolio that you believe in the best
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thing you can do is keep going build
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that momentum and keep it up just like
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everything else investing is a skill you
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learn what to keep up with and what you
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can ignore you learn about important
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technologies and products and services
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and how the companies building them are
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making money as a result you learn to
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find a fair price to pay for these
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companies today to enjoy gains in the
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future and then you learn to build good
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investment habits so you don't blow it
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when you see red i promise that i'm
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still working on many of these things
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myself and i'm going to keep working on
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them in 2022 so stay long stay strong
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and keep investing you got this this is
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ticker symbol you my name is alex
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reminding you that the best investment
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you can make
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is in you
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you