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Intuit Buying Mailchimp, Plus a Look at the New iPhones

Intuit plans to buy Mailchimp for $12 billion in order to enhance its services for small businesses. Do we like the deal? Does it make sense? We’ll have most of the 7investing Team on Friday’s “7investing Now” to break down this surprise purchase. We’ll also discuss Apple’s new iPhones and whether we’re excited by them or find them a tad underwhelming live on Sept. 17 at 1 p.m.

September 16, 2021

Intuit plans to buy Mailchimp for $12 billion in order to enhance its services for small businesses. Do we like the deal? Does it make sense? We’ll have most of the 7investing Team on Friday’s “7investing Now” to break down this surprise purchase. We’ll also discuss Apple’s new iPhones and whether we’re excited by them or find them a tad underwhelming live on Sept. 17 at 1 p.m.


Sam Bailey  0:13  Welcome to 7Investing Now, a show that teaches you how to take a long term view on investing by better understanding what’s happening in the market now.

Dan Kline  0:24  Good afternoon 7Investors and welcome to the Friday edition, the post Yom Kippur edition of 7Investing Now my name of course is Daniel Brooks Kline. I’m being joined today by Steve Symington, Simon Erickson and Matt Cochrane and Maxx Chatsko. Normally we do something a little silly when we have the whole team here, Dana Abramovitz might join us later as well. But we’re gonna push this something silly a little further down into the show, because we want to talk a little bit at the top about a deal that surprised us, came out of nowhere. Intuit (NASDAQ: INTU), a company that’s incredibly big that we never think of, or most people don’t think of they own QuickBooks, they own Credit Karma, they bought MailChimp for $12 billion.

MailChimp was a private company. So we had no way of knowing if it was worth 300 million or 12 billion, but I’m going to assume the people at Intuit know what they’re doing, then we’re going to talk about the new iPhone, I tried all morning, while we were doing other things to log in and buy the new iPhone, and I couldn’t get into T Mobile, I could not log in. So I’m taking that as a good sign that pre-orders are heavy.

So let’s get right to it. Intuit is buying MailChimp for 12 billion, that’s billion with a B, if I’d said 12 million, I wouldn’t be that surprised either. Again, we have no information about MailChimp’s customer base, they’re an email sub service, it’s actually more expensive than you’d think it would be to sell email, and even to send email. And even though it’s a commodity, those prices have largely been the same since like, like the 90s. Like so this is actually an area where there’s cost associated with it, even though it doesn’t feel like it should be.

Intuit owns TurboTax, they own Credit Karma. They have their mint product for small businesses, this is a deceptively gigantic company and JT looked it up JT Street, our producer, they’re up something like 84% for the year. So this has been a company that is doing really well. But their previous largest acquisition was Credit Karma for 8 billion. And that has worked well. It’s it’s a highly integrated product. But let me just throw it out there. And we’ll start with Steve first, Steve and a very surface level because I know Intuit is not a company you spend a ton of time on. Do you like this deal?

Steve Symington  2:28  I think I could, Intuit is interesting. I applaud their acquisitive history, right. But we do have some perspective on MailChimp audience kind of after this deal came out, right, they said they have 2.4 million monthly active users, about 800,000 of those are actually paying customers. And I think 800 million in annual revenue in 2020, which was up about 20% year over year. So I should assume that maybe they’ve continued that growth, especially given the premium that they’ve kind of squeezed out of Intuit here.

But you know, Intuit itself is $150 billion business. Now I just took a look before the show. It’s its stock is kind of quietly quintupled over the past five years, it’s up about 83%, over the last year, about 50%, year-to-date in 2021. So Intuit definitely taking advantage of its kind of newfound size to acquire a business that five years ago, it wasn’t that much larger than so kind of an interesting deal. And definitely a play on small and medium businesses, which is kind of into its bread and butter, right. So I can see the synergies here. And it makes sense. It doesn’t mean I’m any more tempted to buy the stock, but makes sense.

Dan Kline  3:42  I’ve always been tempted to buy the stock. We’re gonna go to Matt Cochrane in a second, but I want to throw two things out. First, we’d love your questions and comments. So if you’re watching the show, if you have questions about what’s happening in the market, what we’re talking about what we might talk about, feel free to ask them.

I will say that I’ve regularly met with Intuit executives at various trade shows I go to, and I’m always impressed with how deep their company goes, they have a really large investment in AI, and knowing things about your finances as a way to sort of disrupt or to help you plan. So let’s say Matt Cochrane, you have like a retirement goal, Intuit as a really good picture of what you need to do and what products might benefit you. In my opinion, they don’t do a good enough job marketing themselves as a technology company, like we think of it as just this boring QuickBooks product, which is obviously a default, but I don’t think that’s actually what they are. But Matt, you’ve covered this company for many years. So what of your What are your top-line takeaways for this deal?

Matt Cochrane  4:38 Intuit is such a great company. And yes, they do have a consumer side. I mean, they purchased Credit Karma last year, the big acquisition for them, but more importantly, we talked about Square (NYSE: SQ) and Shopify (NYSE: SHOP)all the time about empowering small businesses. Well, Intuit was like the OG, right of the enabler of small businesses. They’ve been democratizing that technology you’re just talking about Dan. The AI. They’ve been giving that out with their platforms to small businesses for years decades, their stock is up approximately a kajillion trillion percent since it’s since it went public. I mean, it’s outperformed the market for years, great margins, great growth rates, and they know what small businesses want.

And so they bought MailChimp, because this is a great marketing tool for small businesses can reach out to their customers through email. And you know, the great thing about email is you can’t be de-platformed. So if you’re, you know, if you’re worried about being canceled, if you’re worried about like Facebook changing its algorithm, or whatever, you know, we’ve had problems. I’ve had problems on Twitter before, like being kicked off, because there was an imposter account.

And then they kicked me off, you know, for a few days. Like if you’re a business and you’re worried about these kinds of things. Well, the one thing you can’t be de-platformed from is email. So I don’t know about the price, I don’t know, MailChimp, numbers, but I mean, you know, Intuit has a lot of cash, they can afford to spend up for these kinds of acquisitions, and especially if they think it’s going to help their overall bundle that they can offer to small merchants.

Dan Kline  6:05  It’s sneaky, slowly, building out this platform of services. Simon, I know you want to weigh in Maxx, I apologize. I’m not gonna bring you in here because this is not really Maxx’s area, but I promise we will get him involved later

Maxx Chatsko  6:17  Intuit really needs to bolster his drug pipeline and Mailchimp has hardly any drugs. I don’t know what they’re doing.

Dan Kline  6:25  That would be a bold move for Intuit as well, though, I could see the quick brand, being a popular one. In the drug space, though maybe Nestle would have something to say about that as well. Simon Erickson, your thoughts here?

Simon Erickson  6:37  Dan, I think that you and Steve and Matt together nailed it. It’s exactly what I would like to echo, which is that AI is so important for this company. And when we say that it’s Intuit can actually make this happen because they really have all the information about you. TurboTax, year after year, you know, import your tax return from last year, QuickBooks, import your income statement and your financial statements from last year. And now you’ve got email, which is you know, import your email list and your open rates and all the things that people are doing email things are interested in.

And Intuit has done such a fantastic job, not only is it kind of the continuity of that information, right, you pay for this year for TurboTax versus last year, and everything just kind of lines up and makes it easy for you. But if you can use AI on that, that’s a that’s a huge ROI for any business or any individual that’s using this as well.

And I think that Intuit has done a fantastic job, Matt touched on this a little bit, but kind of the subscription model has moved digitally, right, you used to get the TurboTax, CD ROMs, you put them in, you’d install on your computer, and then you do it every year. Now it’s just seamless. It just happens online, there’s more and more information in the cloud for Intuit. They’ve done fantastic with that.

And I think one of the reasons that the stock has done so well is it’s more profitable that way, look at the operating margins of Intuit, they’re fantastic. And I think that the MailChimp, acquisition is going to be even better for them.

Dan Kline  7:52  Matt still uses a CD ROM. So now what I love about this is they have a sticky, sticky product, because here’s the reality, if you’ve used TurboTax, year after year, are you really going to export your taxes to go to something else that’s $70 cheaper, you’re just not going to do that.

And the same thing with QuickBooks like yes, you could go to another platform, but with AI, they have your taxes, they in a lot of cases have your payroll information, their ability to disrupt the mortgage business, even if they don’t become a lender, or we’ve talked a lot about buy now pay later, there is no company out there that isn’t a credit bureau, that could be a better gauge of creditworthiness, then Intuit.

Now, they might be doing some of that they might be powering, they might be selling some of that data on an aggregate basis. But their optionality in their business is very, very strong. We’re going to get to some of your questions soon. But Matt, I want to throwback to you here. My only question here on this one is email a declining service in the era of slack and social media and all that? My son doesn’t use email, like every now and then he has to get an email and he’ll like ask me for his password. It’s like, Well, you know, you really need to have an active email account. And the reality is he actually doesn’t. Matt?

Matt Cochrane  9:04  I think I would say email is an enduring service, I don’t think it’s going to go away. I think it’s going to be a fixture. Look, there’s a lot of social media platforms out there. But you’ve seen businesses complain all the time, or influencers and things like that, like when one of these like companies changes its algorithm a little bit or, or wants to emphasize like more positive interactions or whatever, and they tweak their algorithms, and then all of a sudden, they get half the engagement they used to, or they get de-platformed or who knows.

I mean, there’s just, there’s like a million when you’re if you build a business on top of a social media platform, you’re really putting your fate in their hands and a way to like take that control back is email, you get a customer’s email, you have a direct line to them. Look, you know, my son has an email address, you know, I just I don’t think email is going away.

Dan Kline  9:54  That ya know, I tend to believe that I do think it is a little bit more of an older person’s game. But if you use QuickBooks, you are likely a small business, integrate every small business has an email list and probably also post to social media. Being able to do that from one platform is very valuable. Simon, do we use QuickBooks? I hate to put you on the spot there.

Simon Erickson  10:17  I’ve used QuickBooks personally, and also, for business purposes for more than a decade, probably do two decades now, actually, Dan, it’s just a sticky platform. I use TurboTax for a long time, too. And MailChimp, you know, obviously, if you’re doing content marketing, or you know, like, like Matt just said, email is a much more in-depth engagement with your audience, then something like a social media platform would be.

And there’s a lot of information, a lot of data that you can mine from that. So I I don’t think it’s going away either. I think that maybe it’s it’s less used, then kind of the Twitter’s and the Facebook’s of the world are today by younger audiences. But I think it’s actually a probably a pretty fitting acquisition for Intuit.

Dan Kline  10:57  I have one last question. I’ll let anybody weigh in. We’re gonna after that, we’re going to take West band hands, question and feel free to get your questions and comments, and we’ll take them periodically throughout the show. We also know it’s a Friday, and it’s hard to type and people are tired. So we are more than happy to just have you watching along at home.

But I’ll let Matt answer this first. But why are Microsoft and Google not doing a MailChimp like product? It feels like you’re on their platforms, you’re probably writing your stuff in Gmail, why is there not an easy integration for business use there, Matt? Sorry, to put you on the spot. But it wasn’t a script. So if you could see it earlier?

Matt Cochrane  11:33  Yeah. Ah, you know, it’s a great question. I don’t have I don’t have a good answer for that. I would say like they have both like Google, they are not inherently an enterprise company. And they have a hard time reaching enterprise customers. They’re doing a much better job with that with their Google Cloud products. But everything is very consumer-oriented.

Microsoft, that’s a great question. You know, their email platform. They have Microsoft Teams like they should have could they do have Microsoft Dynamics, which is a customer relationship management platform competes a lot with Salesforce. I’m not sure if they have specific email solutions within that they probably do. But is it as a is it as ingrained as MailChimp with small businesses? Probably not even close. So but I don’t have a better answer for that.

Dan Kline  12:27  We have two great questions in the queue here, but our producer JT Street lost power. So we don’t actually have the ability to share those questions. So I will read West Ben’s question. Hello 7Investing Ben from Malaysia odd. It gives me a warm feeling every time to know we’re helping people all around the world. I would like to ask what is the long-term implication of the rise of buy now pay later on Visa (NYSE: V) and Mastercard (NYSE: MA) will BNPL grow into the runway for Visa and MasterCard? Simon, you can go first and then Matt, I’ll let you take a swing at this Steve. Maxx feel free if you want to jump in after Simon

Simon Erickson  13:01  Oh, Josh. Okay, so Matt, I’m gonna I’m gonna defer the part about Visa and MasterCard to you. Because really, that’s that’s your backyard? And I’ll let you handle that part of the question. But by now pay later, in my opinion, is more than just an alternative way to pay. Like a lot of people just say, Oh, it’s just an installment plan. We’ve had those rounds for decades, you know, even department stores had installment plans. In reality, this is about algorithms.

Buy now pay later, the reason it’s so appealing is because you’re getting more information about people and what they’re buying and whose creditworthy and who’s not. And what’s the right term you should give them what’s the right interest rate, you should give them all of this factors into the algorithms that go into buy now pay later.

That’s why you see, Max Levchin is who originally just wanted to be a financier of a firm now actually comes in and takes the CEO role because he knows that world from PayPal, right, he’s the one that can go out there to Peloton and to Expedia and to all the other partners, especially their partnership with Shopify, you have vendors on Shopify and say, Hey, I can get you more business because people that sign up for my buy now pay later app, I can say, Hey, we see that you’re really an exercise. Do you want a peloton bike? Hey, we see you’re really really into travel? Do you want to do installments on the next time you book a flight? We use Expedia, that’s a lift in sales for retailers that partner with them.

And then on the other side of that, Dan to is the interest rates, right, who should you be making loans to? Are you making bad loans with people who aren’t gonna be able to pay it back? I mean, you don’t want to have delinquency if you’re holding that on your balance sheet and so Levchin, again at PayPal who started a firm and that’s the company I’m the most familiar with in the space, there’s a huge component to this, that is, make sure you’re not just going out and giving these installments to everybody. Find the outliers that you don’t want to make loans to which are the people who really shouldn’t be taking out credit or paying installments in the first place.

Dan Kline  14:42  And this is actually a rare example of something in the financial space. That’s not just good for the companies because if you’re Peloton you’re getting your money. If you’re a firm, you’re making a really sound loan. But if you’re a consumer, you are in almost every case paying a much lower interest rate. I think travel is the area, this is going to be massive.

Because we don’t have like the old Christmas club where you put a little money aside every year to then splurge on Christmas gifts. If you can book a cruise or a Disney (NYSE: DIS) vacation or whatever it might be, and pay, you know, maybe it’s two years from now and you’re paying $42 a month, that makes things attainable in a way that people aren’t good at planning. Matt, why don’t you weigh in a little bit on Visa and MasterCard here?

Matt Cochrane  15:23  Well, I agree with Simon, I mean, like I think buy now pay later is going to be big, it is big. That being said, like it’s still like a tiny, tiny percentage of the overall total payment volume that goes across all the rails everywhere. And a lot of times it’s funded with like a MasterCard or Visa Debit card or credit card. Sometimes it is funded with an ACH, which is an automatic clearing house, like a rail from your bank, which is like a different type of debit rail. So sometimes like MasterCard, and Visa are cut out of these transactions.

But a lot of times they’re not. And when they are part of the transaction, so you’re actually using MasterCard and Visa as rails like four times instead of once. So they actually get more money from some of these transactions than they would have if somebody had just paid like with a MasterCard or VISA credit card or debit card just once. So I think net net, it’s going to have a little effect on Visa or MasterCard overall, it could actually be good for Visa and MasterCard in the long run because of that dynamic where you’re using their rails more than once. But I think that would be small too. It might be a small negative. I think net it’s going to be very insignificant. Visa Mastercard’s total payment volumes.

Dan Kline  16:37  Amazon (NASDAQ: AMZN) offered me six months buy now pay later terms on a T shirt. It was an expensive t shirt. It was like $24 like so you know, but I went You know what? I can buy the T shirt all at once. Uh huh. So we’re gonna take Max Lucas’s question. I believe JT Street is back. So JT, if you can bring that one up, we would appreciate it. And feel free to ask us questions and comments. Maybe JT is not fully backup. Max says the company Upstart says it gets more than 50% of its of its revenue from Credit Karma. Is Upstart the next target for Intuit or will they create a competing product, I would tend to lean towards competing product. Simon, Steve, anybody have a thought here?

Matt Cochrane  17:23  I don’t think Intuit will acquire Upstart. Yes, I agree with you, Dan, like it would be much easier for them to make a competing product. It’s going to be a long time probably like through a credit cycle. Whether we see like which one of these like credit originators is actually like better if they actually do have better algorithms than traditional algorithms. And until that time, it’s really it’s hard to say who’s, who’s better or who’s not.

Dan Kline  17:47  I could see Intuit making a small acquisition for some of the things they don’t do. But they actually talked about this at the top of the show, they really have the ability to make these loans and know like, they could look like well, what were Simon’s taxes and income and all these different points, what’s his savings goal, like there’s a lot of voluntary information you give them that you can opt-in or not opt-in as to whether they like offer you loan products or offer you savings or investing or whatever it might be. Again, sneaky big company because they don’t brand everything as Intuit.

They have a lot of things like Credit Karma doesn’t really tie itself to into it, there’s probably some more integration to come there. That deal is relatively new. But we’re gonna move on momentarily. We’re going to talk about the new iPhones and I am very excited for absolutely no reason about the new iPhones.

But before we do that, I want to talk about something we did earlier today something that only 7Investing members get to do and that is our monthly subscriber call. So Simon why don’t you explain what the difference is between 7Investing Now our public-facing everyone can see it show. And our members call because the members get something special I baked cookies, but nobody came over to get them but other they also get a very special program.

Simon Erickson  19:02  The spelling and the pronunciation are different than right 7Investing Now is very different than subscriber call. We every every month, we found it very useful to to kind of give everyone a chance to talk about our recommendations with us. Now, rather than just write the reports and then we disappear into the ethos, we say, hey, investing is a long-term journey. This is very personal. You know, every pick is probably not the right fit for everybody. But also people might have questions after reading the report.

So saying, hey, Dan, can you explain this part to me? Or hey, Matt, what do you think about the competitive activity with this one or you know, anything else that they didn’t just necessarily get right out of reading the report. And so we really like to have an interactive kind of back and forth discussion about any of our previous recommendations directly with the team. This is something that’s very different about 7Investing is that we actually give that opportunity for all subscribers every single month to jump in and say hey, I’d like to ask about this month’s recommendations. I’d like to ask you about something that was recommended a year ago. whatever it might be. It’s a lot of fun, Dan, we’re all highly caffeinated. And we do that. It’s pretty fast paced, always have a good time.

Dan Kline  20:08  It’s very nice for us to be able to do something where our guard is down, because when we’re doing 7Investing Now, and obviously, I love doing the show, and so many of you are watching or listening to it later. But we don’t talk about our recommendations. So this is an opportunity for someone who read 3000 words that I wrote, or any of us wrote, or maybe watch the deep dive video that we give members where which is a PowerPoint presentation to the whole team, where you see, okay, those were Maxx’s objections to to Dan’s pick that these are Simon’s questions.

And they might ask Dan, change your mind, do you? Are you less concerned about this now, or maybe something happened, my pick this month, the day I picked it, something happened, and I wrote about it right away. But it was really nice to be able to talk to members about it. So if you are not a member, what are you waiting for? Go to And for $49 a month, or $399 a year, that is a two plus month savings, you will get access to our seven highest conviction stock picks every month, this is not easy. We have to go through the entire world of stocks and pick our one highest conviction. So that means you’re getting seven very different people with very different areas of expertise, very different life situations. I have one kid, much of the team does. Maxx doesn’t. Dana owns a business. We’re all in different places. You know, Dana has a Ph. D. Max has a Master’s I do not. But I worked in retail and I bought commodities and Simon has an MBA and Steve has a dog.

Simon Erickson  21:47  Don’t sell yourself short, though. I mean, you’ve got some incredible boots on the ground operational experience for the retail sector you cover as well.

Dan Kline  21:54  And I’m trying to be a little silly. And you’ve all heard me say this. And I always get a little mushy on this whole team call and obviously, near bond and Dana are not here. But the wealth of experience we bring from different angles, and how much we all make each other better, is something I’ve never been part of before. And I’ve worked lots of wonderful places. But the fact that there’s so much support on our team and with our audience, and I appreciate that as well.

If Matt has a question for me, I take it as an intellectual curiosity question, not like an affront to what I’m saying. And you learn from that my pick a few months ago, came out of conversations with Matt, like Simon you mentioned we live close to each other. Yeah, we actually see each other physically which I know is, is not normal. Now, if you’re a member, one of the members on our call, messaged me and said, Hey, I’m in town this weekend want to grab coffee? Yeah, he’s a good guy, I’m gonna grab coffee with him. So like we are that type of service. And we’re like, the way we are interacting here is the way we are in real life. But that being said, we’re going to get back to the program to your questions to your comments.

We’re going to talk about the new iPhone. So Apple (NASDAQ: AAPL) came out with the iPhone 13, there were a lot of questions whether they were going to go with like the X3, or just skip to 14, I like the boldness of Apple realizing how silly it is when a building goes from 12 to 14. So if you’re on 14, you’re not dumb, you know, you’re on 13. So this is the iPhone 13. And it’s coming out in a variety of versions out there’s a mini, there’s a pro, there’s a max, here are the big differences.

And I’m underwhelmed, but I as I said earlier, I’ve been trying to order it all day. It is a new battery. It’s a physically bigger battery. And they’re saying an hour and a half of extra battery life. I’m wary of that. Because Steve, do you ever remember an Apple press event where they didn’t say an extra hour and a half of battery life? yet? We’ve never actually experienced an extra hour and a half of battery life?

Steve Symington  23:48  No, no, it’s no. And it’s funny, because I would have been more intrigued had they said, you know, this isn’t just a physically larger battery, but it’s a more efficient battery that’s the same size and gives you an hour and a half more. So many of these things seem like just kind of modest incremental improvements. I think we get kind of a collective shrug. But the one thing that maybe throws a wrench in that shrug and maybe does spur some sales of the these devices are the deals that people are getting from the carriers for like trade-ins. I think that’s a function of the fact that this is kind of a modest incremental upgrade. So that might make an interesting, but the battery thing is –

Dan Kline  24:32  I’ve heard a lot of people refer to this as d 12SE. Karen, I promise if you stick around, we will get to your question. Matt, you’re you’re a fan here. And I’ll actually get curious to hear Maxx’s opinion too. But let’s get to Matt first. Did anything excite you here? Like, is there a part of you that wants to run out and get this?

Matt Cochrane  24:50  No, I’m actually I’m actually not an Apple fan. Like I have an Android phone. I’m not familiar with the OS ecosystem. My kids love it. My kids are iPhone users. But like, No, I’m not actually, I don’t have too much to add here.

Dan Kline  25:04  So the pricing has stayed the same. And they’ve actually upped the minimum memory. There’s no more 64 gigabyte version of this. Simon, I’m actually surprised that they didn’t raise prices? Because is, is this Apple admitting that maybe there’s a ceiling on prices? Cuz I don’t think there is I’m not sure the difference between 1100 and 1300 matters all that much, especially when while they don’t call it a contract, everybody is buying this on an installment plan, or the vast majority of people are buying this on an installment plan.

Simon Erickson  25:33  So true, Dan. I mean, like, if you look at it, you know, so we see the consumer side of it, right? It’s like, what’s the price point that we pay for the most cutting edge iPhone, but behind the scenes, there’s a lot going on in the semiconductor industry right now, Apple wants to have the most cutting edge chips in its phones that can handle the most processes and applications so that we’ve got 17 apps open, you can handle all of them at the same time, in addition to the radios and the sell signal and everything else like that.

But behind the scenes, chip prices are going up significantly, and Apple is definitely going to be experiencing those. We see a semiconductor supply shortage. And a lot of the manufacturers of chips are increasing prices right now. And Apple even as large as Apple is not going to be immune from those. So it’s curious, Dan, to your point to see if they’re not rate increasing prices, Apple’s eating those margins and just saying, Hey, we might be tapped out and how much we can charge people for the iPhone.

Dan Kline  26:22  It’s also important that the goal of Apple and they’ve always made money on hardware, but their focus on services in recent years has grown exponentially and their service sector has grown by double digits. I think it’s for four or five quarters in a row. I didn’t didn’t quite look that up. Maxx, let me throw this out to you. Because I am pretty sure you are using a cricket or some form of like phone like you might even have a rotary dial on your phone. I’m pretty sure you’re not an early adopter, what does it take to get you to get a new phone? And are you like when you look at something like this? Are you excited about it? Or is it just very ho hum?

Maxx Chatsko  26:57  Yeah, I use smoke signals to text all my friends. It works pretty well. There’s some delay, you know, but now I I’m actually like, man, I use an Android phone, I was actually thinking about switching to the iPhone, because I’m very pro-privacy. And then they came up with a decision recently I only deleted but where there might be scanning phones for different information. Obviously, that doesn’t affect me. But that’s a little bit too much for me. So privacy was something that was enough to overcome the switching costs for me to maybe try out a different ecosystem.

But after that decision, I’m just gonna stick with my Google Android phone, I do use the budget phones, I refuse to pay hundreds of dollars or like $1,000 for a new phone, I run my phone to the ground. I don’t really use my phone very much. I don’t have any things on there. No games, or I don’t have social media on my phone. So I kind of use it like a phone. I know that’s weird for a millennial. That’s how I approach it.

Dan Kline  27:50  I use my phone like a pocket computer. I wanted to get West Ben’s comment in it. And then we’re gonna go to one final comment from the team before we move on topics here. So JT, if you could bring up West Ben’s comment, 7Investing  I’m an Apple fan, but I’m still an iPhone eight, because it already is a very powerful smartphone for most applications. And it still works perfectly. Yeah, I’ll talk about it. I’m generally a pretty frugal guy, but I upgrade my phone every year.

And I either return the old one. So it’s not actually as expensive as it seems. Or I cycle it down to the rest of the family. So my son had the original iPhone SE. And he got like my iPhone 10 like so there are ways to do this. And I agree the iPhone 8 is an incredibly powerful phone. I mean, you know, we all remember maybe not Maxx as much but we all remember when like your phone was barely even a phone like it wasn’t great at calling and text messaging wasn’t a thing. And I remember my dad had like a phone in like a briefcase that only worked in like three places.

So this world has gone very, very quickly. I write stories on my phone. I watch movies on my phone. And you know, Maxx, you mentioned you don’t play games, I play backgammon and Solitaire. And I know that ages me but you know, like, I’m not playing like Call of Duty on my phone, though I suppose you could. So again, this is it’s a pretty ho-hum product announcement from Apple that the phones, an incremental upgrade.

The new iWatch has a bigger screen, but it doesn’t have any groundbreaking technology. And I think Maxx has actually explained the reason for that that it is not simple to go from something like I can tell your heart rate, which is just interesting and not necessarily that useful to I’m giving you your blood pressure that makes it a medical device. And that is a layer of regulation that I’m guessing this apple watch can do that. But there is a level that they have to get to to be able to practically do that. Matt, anybody else have any thoughts they want to weigh in here on the iPhone before we move on to our final topic?

Simon Erickson  29:46  I mean, just something interesting is kind of what are you paying for in your phone? Right? This is something that Steve and I and several others on the team look at the most important or not the most important necessarily, but the most expensive components of high-end phones and that goes not just for Apple but for Samsung and everything else.

A lot of it is for the cellular radios so you can connect to 4G, 5G, whatever you’re connecting for. The screens themselves are now using organic light-emitting diodes, OLED screens are very expensive. And there’s a handful of other components that the majority of the cost of these phones. And so it’s kind of interesting when you see the announcements about, you know, what’s, what’s the most, the sexiest thing in the industry and cell phones, oh, it’s 5G, it’s because there’s a lot of money that’s kind of going into those things.

It’s just kind of interesting as an investor to see for the form factor that we all have embraced mobile devices are everywhere now, who’s actually making the margins and can keep those margins for the big manufacturers like Apple and Samsung.

Dan Kline  30:40  And we’re also seeing 5G being sort of a, an increasingly strong benefit. So when I got the latest iPhone, latest for another two weeks, but when I got it, there was 5g in one parking lot here in West Palm Beach. And to test it, I drove to that parking lot and like watch Netflix (NASDAQ: NFLX), and it was amazing. But it wasn’t practical to every time I want to watch a movie on my phone, drive to the Publix parking lot like that’s inefficient.

So now more and more places. I’m seeing 5G. And I don’t mean the sort of pretend 5g. I mean, the meaningful, you’re actually faster 5G we’ve got a comment here from Gregory Spira. That I will let Steve weigh in on. And he says, If you missed the subscriber call that is the call we did earlier today, just for members, when will it be posted on the site? Steve, you know the answer to that, so I’ll throw it to you.

Steve Symington  31:29  And for anyone who is unfamiliar, our subscriber calls are always held on the third Friday of every month, which is today. And we post the recordings to the site the Friday after on the video section of our research page. Or the Monday after rather. So Monday, we’ll have it we just have to get the transcript and recording and all that stuff process. So yes, it’ll be there Monday.

Dan Kline  31:52  And even though we know she’s no longer listening, we promised Karen, we would answer her question, and she has promised to listen to it later. So we will go on that faith. I’m gonna let Simon weigh in first. And Simon, why don’t you read the question? Because it is a lot of words.

Simon Erickson  32:05  Yeah, Karen, thank you for the question here. She says Dementia Care businesses are in every aspect. They need big time positive disruption. One in two Americans get dementia over 85. I’d love to invest in innovation in health care for cognitive decline. I mean, this is I don’t think that the advisors on this call are the best to answer this, Karen. But I would recommend looking at our colleague, Dana Abramovitz’s recommendations and also the content that she writes a lot about these topics.

She has agreed with exactly what you said that mental health and cognitive decline are really, really important health care topics, that she is not only looking for companies that financially benefit from those trends, but in healthcare, it’s more than it’s a lot more than that. It’s kind of improving society, and you know, people’s lives. And she takes that very seriously in her recommendations, including her recommendation this month, I will say Dana’s pick, when we talked about it as a team for the team call here recently, she pointed out this is something that needs to be addressed. And I think that kind of gets to the spirit of your question there as well.

Dan Kline  33:07  I want Maxx’s perspective here. But I’ll just throw out very quickly. Before I started doing the show, I had no idea the level of innovation that was going on, and the amount of high level thought that was going into things like dementia and other areas where Maxx, is it fair to say like we could make some pretty big leaps in these areas in the next? Maybe not six months, but maybe 10 years? 15 years? What like in a manageable amount of time. Is that reasonable?

Maxx Chatsko  33:33  Yeah, I mean, we’re making a lot of advances in medicine, a lot of exciting things going on in genetic medicines, which tend to have a lot fewer side effects, we can target them to DNA or RNA, and we seem to be getting some really, really good results there. It’s going to take some time to deliver these medicines to the tissues that matter for some of these, you know, cognitive disabilities like dementia, right? We need to get the medicine into the brain, which isn’t very easy to do.

But yeah, we should, you know, start to see more medicines that maybe help to manage symptoms better, maybe slow cognitive decline, that’s when it kind of the holy grails maybe the one day kind of prevent dementia, maybe we’ll have more of an understanding, but it’s a very complex disease, it’s, it’s hard to really get a good read on because it takes place over many decades, right? I mean, we have no idea we might be starting to form, you know, certain dementia-related diseases in our 30s and 40s. And we might not pick up on it until you know, your sixth seventh or eighth decade of life.

So it’s very hard to kind of really, you know, get an accurate understanding of the disease pathology, but for sure, we’re making some good advances. And I thought I’d be not the only one on the screen by now. But I’ll just be talking to myself. Okay. Yeah. Yeah, no, he has to be optimistic, for sure. Maybe by the end of the decade, we’ll have some really interesting stuff going on.

Dan Kline  34:48  We’re gonna move on to the Home Stretch here. This is something I shared out on Twitter that got an astounding amount of response. So we’re going to share some of yours but my question here was, what’s the stock you own that brings you the most joy as a customer so not from owning the stock not like Gee, I’m really proud that I own this but so for me and we’re gonna go around the room for me it’s a toss-up. Everyone thought online that I would say Starbucks (NASDAQ: SBUX) and Starbucks does bring me tiny bits of joy every day like I have not every day but like four or five days a week I think that’s fair to say.

But Disney has recently bought me so much joy with like, you know, the release of the different superhero shows I would so look forward to those Fridays and watching you know, Falcon and Winter Soldier or Wanda Vision or whatever it might be. And then the third one to throw out there is Royal Caribbean. I just got off a cruise. And I’m not a great relaxer. So getting to spend you know, three or four days you know, with people and you know, working from the cafe or from whatever random Island.

So I actually think it’s important not every company that brings you joy is a good stock to own. Like you might really love you know, I don’t know Burger King, and you might look into RBI the parent company and go oh, I don’t really want to own that. That’s okay. But let me throw it to Simon and Maxx, I know this is gonna be a tough one for you. But Simon you can go first.

Simon Erickson  36:04  Oh, God, I got to go into Chipotle Dan. I every time I get your poll, I’m in a good mood for the rest of the day. So and that’s my take I’ll go Chipotle.

Dan Kline  36:12  I think it is fair to say Steve Symington, I haven’t been following this whole conversation your cat slept in your face last night as my mind tends to do that as well. And she’s been crying outside my door while I’m while we’re taping this.

Steve Symington  36:26  And you’re making fun of me for sniffling a little today but I had one like right here last night. I was like I love you but my god.

Dan Kline  36:34  Steve what’s a stock that you own that brings you joy?

Steve Symington  36:38  iRobot (NASDAQ: IRBT) actually. Yeah, I would say right there we’ve got their little mopping, the Brava, and a couple of Roombas and it’s just such a robotics nerd anyway, that it’s so much fun to like, I haven’t cleaned our floors, like, you know, unless you like pour grease on the floor. And you need to give it like a spot clean or something. It’s fantastic hardwood carpet, everything I just want one that will do my stairs now.

Dan Kline  37:03  The new Roomba and I have I also have a Roomba at Steve’s recommendation and love it. It is so much better than the previous ones. But they’re I guess you’d call it AI I’m not sure if that’s the term but their ability to learn things. And I apologize for being a tiny bit graphic here. But they can now know that there is pet waste on the floor and not get that caught in its rotors, which creates a very big mess.

That sounds like it’s no big deal. That’s a giant deal. That is a level of AI robotics that’s very practical in people’s lives. Like it’s cool. We might go to Mars in 30 years, but it’s cooler that I could come home. And if my cat threw up, it’s not gonna be smeared all around my house. And I know it sounds a little silly, but just the fact that it doesn’t fall down the stairs, or get stuck in the bathroom anymore. Mine used to close itself into the bathroom by closing the door. And then I’d have the world’s cleanest eight foot bathroom. It doesn’t do that anymore.

This is a robot that learns a company that look, I came home today and in my mail was a new bag for myself emptying thing. I don’t have to order it. It knows when my bag is full. And it sent me a few weeks ago. I like a little part like a filter. This is a really smart company. Matt Cochrane, what company brings you joy?

Matt Cochrane  38:16  Well, two things first, we’ve been tan knows what’s up with his comment on Facebook. Second, Amazon, I hate going to the store. I don’t want to go to the store ever. So like if you can deliver packages to my door for everything I need. And I don’t have to leave the house that wins. So Amazon.

Dan Kline  38:34  Yeah, Matt, you actually haven’t been ordering from Amazon. We’ve just been delivering packages to your door. Just kidding. Maxx Chatsko. You cover a space? That might be a little more difficult, because if something gives you joy, it’s probably because something bad happened. But which one would you pick here?

Maxx Chatsko  38:51  Yeah. So I think this is my unique portfolio preference. I invest almost exclusively in drug developers and picks and shovels plays within biotech helping those companies and enterprise software companies, and maybe a couple electric utility. So I’m not really a customer of any of my companies, per se. And if I was, I would not be a good thing. I mean, I have some disease. So hopefully I don’t have to be a customer.

So I don’t know. But I do agree with the general. You know, that you say this all the time, Dan, you know, invest in companies that, you know, you use as a customer, I think you said you told your son when he was starting to invest like pick some companies you use all the time and start there, you know, and I think that’s great advice for anyone who’s trying to get started in investing.

Dan Kline  39:35  I will say there are some Dana Abramovitz picks or stocks, she’s talked about that I’d feel a lot of joy at being a customer if those were areas. And there’s a Simon pick recently that I’m not a customer of but if I had been, I think I’d be very, very happy for that. So there’s a lot here and look, I know investors that invest in companies, they believe are gonna make money and then take that money and you Use it to support whatever they like.

I like to feel good about the companies I own. I’m not consistent about that in any way. We’re going to share some of your comments and we’re just going to make a little quick comment on them. So raise your hand you know throw out I’ll throw it to people when I can. Ken McInerney, a friend of the family a part of the family really says in the in the most joy as a customer category, Apple, all their products good are as good as the stock gain. Yeah, I am a diehard Apple person, Matt, Simon, anybody want to weigh in on this one? No one does.

But yeah, this is an obvious one. This is a you know, Apple is foundational products. I’m doing this on a Mac. I have an iPhone. I’m not wearing an Apple Watch, but I own an Apple Watch. Neeraj Propor. If you want to share that one, JT says Square and DocuSign (NASDAQ: DOCU) I use both services and it just makes it such a smooth experience compared to legacy forms of transaction slash documents signing Matt Cochrane, these are two companies you care a lot about, do you think of Square and DocuSign is bringing joy?

Matt Cochrane  41:00  Well, I’m not a merchant, but if I was I can imagine like Square like you’re a small merchant, you used to need a landline expensive hardware to take credit card payments. And people spend more with credit cards like that. That’s been proven in several studies. And now you can like buy a dongle online or go to Best Buy, buy a smart dongle, plug it in, and I’ll be onboarded within a within a few minutes and start taking credit and debit cards for payments. Like I can imagine like Yes, that would make it a that you would love that product as a merchant.

Dan Kline  41:29  Yeah, I actually think and Steve, I’ll let you weigh in in a second as a customer. I hate signing my name. My handwriting is atrocious. When someone sends me a DocuSign It is such a joyous thing because it’s like, wait, I don’t have to like go through 80 pages of my lease and like, initial and sign I can just because we don’t read those documents. I think we know nobody when they get a mortgage reads through it. Like you just sort of take it at the word. Steve, your thoughts on this one?

Steve Symington  41:53  Yeah, I love DocuSign so much for that but but man Square is is kind of incredible for they’re, they’re enabling all these small businesses and little merchants to like accept payments and like, for me, you know, I live in Missoula, Montana right and we have an epic Farmers Market takes up several blocks they close downtown and and and it used to be kind of a pain in the butt because you’d be like, where’s the ATM? Nobody takes you know, everyone’s only cash but now everybody’s got a Square reader and you can go down there with your garden. And fantastic but the world they’ve enabled and continue to expand upon this is amazing. So I think that was a fantastic answer Square and DocuSign.

Dan Kline  42:33  Maxx a little bit of a trivia question. I’ll throw your way. Where is the USA Today? number one rated farmers market where would you think that might be?

Maxx Chatsko  42:43  Boise Idaho.

Dan Kline  42:44  It would not be Boise, Idaho and it would not be Missoula, Montana. It would be right here in West Palm Beach, Florida, where ours is seasonal because there’s three months out of the year where our temperature is surface of the sun. And you couldn’t sell something like like we have a really great fishmonger I fish merchant, I’m not sure if fishmonger is a term they still use but a place that sells fresh fish. You cannot buy fresh fish in July in Florida farmers market and then walk it home and hot coffee does not sell particularly well which is a big component of our farmers market. For the pandemic they did discontinue all-you-can-drink mimosas that used to be a thing that is a pandemic sacrifice right now.

We got a few more of these we we got hundreds of them. But we’re only going to do a few more here. Tall seller says I really enjoy supporting independent brands and local business by buying directly off their own websites. And I get even more enjoyment from such when they use Shopify. Pay one-click Checkout where I can then trace those orders in Shopify shop app.

Oh, I echo this so much. I am so happy when Shopify is there. Simon, have you had some experiences? I think Shopify does a really good job of showing you when an order is coming. And I think that’s important because a lot of the merchants aren’t offering two-day shipping. So if I buy some, like, you know, obscure coffee from a vendor I’ve never heard of it is very comforting when I could see okay, it shipped. It’s not gonna be here for 10 days, but it shipped and here’s where it’s moving. Your thoughts here?

Simon Erickson  44:07  Oh, ultimate, ultimate customer-focused company, right visionary leader makes it super easy to set up gets a lot of attention on your brands, and then makes it easy for people to pay and whether they want to I mean, Shopify is a really, really good company.

Dan Kline  44:20  I want to get to just a few more of these. Mabel says probably Nike (NYSE: NKE) and Starbucks, but I love all my holdings. I’m one proud shareholder. Yeah, I follow Mabel on Twitter. And you really do get that from her say. I agree. I don’t even think there’s that much we can we can say on this one. But Nike is a lifestyle brand and you sort of feel good about it for the most part.

Let’s get to just a couple more. We’ve got a lot saying Amazon. So we’ll skip the next one. But Sammy Sosa who I don’t think is the Sammy Sosa based on his picture, says Tesla (NASDAQ: TSLA) no question commuting in the ’21 Model 3 long range is one of the best parts of my day anybody want to weigh in for Anirban? Who is not here but as our resident drives a Tesla evangelist, Maxx, you want to you want to share what Anirban said. Maxx, go ahead.

Maxx Chatsko  45:06  Yeah, Anirban says, once you own and drive a Tesla, you’ll never drive any other car and you think every other car is stupid. And I’ve heard that from a number of Tesla owners actually. So I’ve never actually driven a Tesla. I imagine I’ll have an electric vehicle one day but pretty interesting, you know, as obviously anecdotal evidence, but you do see that quite a bit among Tesla owners.

Dan Kline  45:27  We will throw out Ben Unsworth, says Disney and McDonald’s they’re actually used to be McDonald’s in Disney. That is no longer a thing. Of course there are Starbucks at every Walt Disney location, and multiple in some of them. Last one here, we’ll put up a Peter Zumins and we’ll let maybe Matt can talk about this one, Spotify (NYSE: SPOT) and Netflix, I’ll push back a little bit.

And that was Spotify. Maybe I’m wrong. But I don’t see a big difference between any of the various podcast players like I’m not a big playlist guy. So maybe, but I’m searching for the podcast I want. I’m listening to it. I’m searching for the album’s I want and I’m listening to them. So again, I don’t want to take away the joy here. Matt, your thoughts on this one?

Matt Cochrane  46:11  Well, yeah, I kind of agree with you about Spotify. I’ll say this about Netflix. Like, how they transformed the entertainment and movie watching and TV show watching industry is amazing. I remember blockbuster. And I, we could we could do a whole show on blockbuster and how much I hated those stores and, and hated they were just almost pure evil.

But I’m like, but now there’s a lot of competing services. So it’s not like an exclusive joy anymore. I mean, you can stream it a lot of places. So I don’t know if it’s not that special, like place in my heart. But for years, Netflix was like, just like compared to the experience, you’d get a blockbuster, like just 90 days. So Netflix will always have a special place in my heart just for that.

Dan Kline  46:53  Matt are you recommending I sell my blockbuster stock? I haven’t checked on that on in a while is it not performing well?

Matt Cochrane  47:00 Long-term buy and hold.

Dan Kline  47:01  If, if anyone wants to see there was a john Oliver bit a couple years ago, but the last two remaining blockbusters and whether you like his show or not, it was really really funny that there were just a couple of places where blockbuster was holding on, you know, and doing everything they possibly could. But all I’ll say is be kind rewind.

We’re gonna get to our finisher, in a minute or two here but a Steve Symington I thought you might want to close with Max Lucas’s comment JT if you want to bring that one up, Steve, you can read it to the to the audience here.

Steve Symington  47:32  Max says he’s asked a lot of coworkers that have Roombas how good they are. And the answer always seems to be pretty good get stuck doesn’t get everything keeps him from buying just yet. I would ask them what model they have. Because the newest iterations are at least an order of magnitude better. As far as how smart they are their mapping their section, their ability to empty themselves. It’s incredible. So yeah, I would say the newer iteration and they’ve got iRobot select now so you don’t have to just buy the whole robot you can pay 29 bucks a month. Fantastic. You think this is commercial forum i’d love

Maxx Chatsko  48:04  Are the newer ones quieter Steve?

Steve Symington  48:07  The new one is like, well, I’ve got like yeah, I’ve got a 980 behind me here and it’s twice as loud is the i7 I think that they sent me through iRobot.

Maxx Chatsko  48:18  That’s my biggest issue is there’s so loud like vacuum and get it over with.

Steve Symington  48:22  And the newest one has a quiet mode actually noticed that it applied to my i7 to is really weird where it turns off the vacuum when it’s not actively when it’s traveling from room to room, which is awesome. So then it’s only loud where it’s like you guys are Bravo.

Dan Kline  48:37  And yeah, I actually sort of echo Steve and it’s very loud. And we both have the one that automatically empties. That is the loudest noise you’ve ever heard.

Steve Symington  48:46  It’s actually like a plane taking off.

Dan Kline  48:49  Mine actually runs on Tuesday and Thursday when we are not doing some investing now because I can hear it from my studio here. We are going to move to our finisher. This ties back to something we talked about earlier in the show. JT street welcome back from your brief power outage. Will you buy the new iPhone 13 7.5% said right away 17.8% said eventually 37.4% said if my phone dies 37.4% said never obviously if you’re not an Apple user, I don’t think there’s anything here that’s going to sway you.

But let me go around the room and ask the question. We’ll start with Steve. How often do you update your phone assuming you don’t drop it in the ocean or have some you know the screen break or whatever it is? Steve how often do you upgrade your phone?

Steve Symington  49:38  I it’s like every few years for me. You know my phone’s fine and it’s like every three or four years just when it becomes slow and it’s consistently for because all the new apps are massive like I’m not a needs the latest phone kind of guy.

Dan Kline  49:54  Simon Erickson same question there.

Simon Erickson  49:56  Steve and I tend to be on the same page about these things. I would probably say Three years for me personally.

Dan Kline  50:02  Yeah, see, like, for me, I don’t update my wardrobe but I update my phone pretty much every year and I always say I’m not going to and then here’s the dump thing I get the beautiful you know stainless steel whatever it is iPhone and then I put it on a plastic case and you can’t see what it is in any way or fashion. Maxx Chatsko every decade every every 20 years, like how often is it for you here?

Maxx Chatsko  50:22  Yeah, so that Nokia phone that has snake on it? Still trying to beat my high score from the early 2000s But yeah, maybe three four years I try to go as long as possible and then I’m always blown away by like phones do that now like well, also since the last time I bought a phone like they keep getting way bigger. I like to use it when I run which as you can tell I haven’t been doing much lately but they’re like it’s harder to hold like a seven inch screen. Why do they keep making these bigger I don’t want a tablet. I want a phone message sent.

Dan Kline  50:49  You can just get a Fitbit and not have to run with your phone strapped to your back. Matt Cochrane, your thoughts on this one?

Matt Cochrane  50:56  Yeah, every three to four years. I mean, again, I buy cheaper androids like sometimes around three years they start to like, like fizz out on you. So like but be up three, three to four. As long as I can. As long as I still get this you know reasonable performance from them. Usually it’s the batteries that start to go and it gets annoying ordering new batteries. They never work quite as well. So three to four years.

Dan Kline  51:17 We thank you for watching 7Investing Now. We do this every Monday, Wednesday and Friday. We are live 99% of the time every now and then we do a tape show of travel or technology gets in the way but the vast majority of the shows are live the third Friday of every month we do as many of the team members as we can this is a any member of the team is welcome on any show. But we rotate everybody in and out.

We appreciate you watching. If you’d like to get in touch with us that is that is an email it is usually Steve answering it. That is questions about your membership, questions about wanting to be a member, maybe a procedural question, trouble finding something on the site, that type of thing.

If you want to interact with us and we recommend you do we are fun people to interact with. That is @7Investing. If you’re a member, tag us when you share your referral code or if you are talking about having a great stock market conversation and want us to be part of it. We are always happy to meet new people and to be able to advocate for 7Investing just by sharing our opinions and talking about what we like.

If you want to see you know an occasional vacation photo follow us on social media of course that will be indirectly not through the main account that will be through our personal accounts. We thank you for watching. We will be back on Monday. I don’t know who’s on Monday show. Sorry about that. I blanked a little bit there. We have not planned that one yet. Thank you for watching. We will see you then. Have a good day.

7investing Operations  52:44 


Mastercard (NYSE: MA)

Visa (NYSE: V)


Starbucks (NASDAQ: SBUX)

Netflix (NASDAQ: NFLX)


Square (NYSE: SQ)



Disney (NYSE: DIS)

Shopify (NYSE: SHOP)

Nike (NYSE: NKE)


Spotify (NYSE: SPOT)



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