I'm Buying Microsoft Stock at an Unthinkable Price & 2 More New Buys!

I'm going to give you all a look into my portfolio today and I'm going to break down the stocks that I plan to buy and share my strategy so simply that even if you've never bought a stock in your life, you're going to walk away knowing exactly what I'm doing and why. Now guys, I actually had to come back and re-record this intro and the reason being is after I did my analysis in a few companies, I actually realized I wanted to own two of these companies and sell what I what are called cash secured puts on them. I'm going to go through that process in detail in this video and you'll see which two companies I'm talking about. So let's get right into it and I want you to stick around for the analysis and the lesson because that's really where this all gets good. So the first move I made recently, I outright bought more Adobe stock after earnings and the other stocks that I own in my portfolio right now are Sprouts Farmers Market, Target, HPQ, Brookfield Asset Management, Generac, 3M, Disney Corp, American [snorts] Express, PayPal, Southwest Airlines, T. Rowe Price, Nike, British Tobacco, Ulta Beauty, Starbucks, Paycom Intel Alibaba Adobe Pacifico in Mexico, Builders First Source. Now, before I get into the details, I have to say this and I cannot stress how much I mean this. Never ever copy my moves or anybody's moves on the internet. Even Warren Buffett. What I want you to do is copy the price versus value process. I want you to learn how to look at a stock in the right way. When you buy a stock, you're buying a piece of a business. You're not buying it for tomorrow, you're not buying it for a few weeks from now, you're buying it for years and years from now. Learn how to decide if the price makes sense for what you're getting. That is the price versus value idea. That is exactly what changed my life and will change your life in investing. It's not about following someone else's buys. Now, that doesn't mean that you shouldn't get ideas from other value investors, but just because somebody has an investment doesn't mean you just go buy it. It's about seeing what they see in it. We are never here to give you a stock pick. We are here to teach you a process so that one day you can sleep better at night because you know how to value a stock and make good assumptions about its future and understand the price you're paying. And to add to that, don't take our title and thumbnail literally. Now, let's go show the list of stocks on my watch list that are getting really close to my alert price and when they hit, I will most likely start selling cash secured puts on them and sometimes make an outright purchase. So, I'm going to go to the stocks part. I'm going to go to my watch list. Guys, here are some of the companies on my watch list. Some of these I already own. Now, I have Adobe at a price target of 185. I clearly bought Adobe recently at a higher price than that. What this is telling me is, Paul, it went down even further. Let's go down. Now, Tractor Supply, 2750. Louis Vuitton, $100. Ulta, 410. Paycom, 110. Meta, 500. Microsoft, 330. Uber, 62. Target, 110. Amazon, 200. Hershey's, 150. T. Rowe Price, 90. I'm showing this list, but these stocks are close. Most of them are within the 10 and 15% of where they are currently selling. Now, the whole point of this video is to share a lesson on how to find value. You can still find opportunity even in an overvalued market as we see today. You just have to know where to look and how to position yourself to take advantage of it. Also, I know some of you of you are looking at that list and thinking, what is a cash secured put? How does that even work? Stick with me. It's I'm going to break down how my strategy works and it was an absolute game changer that I wish I'd learned 25 years ago to buy companies that process. Now, before we talk about that cash secured puts, I want to do a quick analysis on two of the stocks on my list because it's an important thing, how to identify value. This is why we're here and this is exactly why I teach on YouTube. I want to help you understand value versus price and be able to determine that. Guys, everybody on the internet follows their price. Here's the case in point. I've been an Intel shareholder all the way down to $17 a share. Guys, it's at 130 today. I do not believe Intel is worth 130. The other schmucks on the internet and on YouTube would sit there and take their stock and say, "See, it's even more undervalued. Look how much more potential it has." You have if if you're always thinking your stock is undervalued, even if it goes up 5 6 10X, without a process, I think you just lose credibility. It is a very important skill to learn. When sentiment gets really negative on a stock, how do you know if the fear is justified or the market's just going too far? For me, I look at the numbers. The numbers can help tell the story alongside the story. Can you give me a clearer look at the truth? Let me show you that with Microsoft right now. Now guys, Microsoft has been grossly underperforming this year. It is down 20% this year to date versus the entire market's up what? 10 12 13%? That is a big difference. The market is scared of two things. One, Microsoft's spending a lot, 190 billion on AI infrastructure. That is a massive number and investors will look at that and go, "Okay, when does that actually pay off?" Because right now, you're not seeing it in the stock price. And number two, and this is the bigger fear, there's this worry that AI agents are going to kill the traditional software business. Think about it. Microsoft makes a ton of money selling software subscriptions, things like Microsoft 365 Teams, all of that stuff. Businesses will pay for every single license, every single seat. But now, people are saying, "Hey, if AI can just do these tasks automatically and cheaper, why would I keep buying all those seats?" That's the fear. And the fear is hitting the entire software industry as we speak including Microsoft. But here's what I want you to actually look at. Microsoft's cloud business. It's still growing. In Q3 of 2026 which actually ended back in March. Total Microsoft cloud revenue reached 54.5 billion dollars representing a 30% year-over-year increase. In addition to that, the company's dedicated AI business surpassed an annual revenue run rate of 37 billion dollars. Guys, that's not a struggling company. That's a company going through a transition that the market hasn't figured out how to price yet. So guys in the consumer side, they saw a 7% increase year-over-year on Office 365. And on the business side, they have over 450 million users with a 17% growth year-over-year. Now, I don't know what the future holds. But that does not sound like a dying business to me. So is Microsoft a buy now? Well, it depends on the valuation and that's what we're going to figure out right now, the value on Microsoft. Remember, a stock being up or down tells you nothing. It's what is that stock buying for you? So, we're going to pull up Microsoft. And the first thing I'm going to say to you guys is this is the price of the business, 2.8 trillion dollars the market cap. Okay? The enterprise value is 3.02. What's the difference? Well, that 200 billion-dollar difference here is essentially, hey, if you want to buy all of Microsoft, take all of its cash in your pocket and buy the debt with it and pay off all the debt, it would cost you 3.02 trillion. Well, guess what? They generated 73 billion dollars in free cash flow last year. That's after a lot of big capital expenditures. They can easily afford that 200 billion dollars in debt with that. Okay. It pays a dividend of 1% about 0.9% which is 25 billion dollars. That's a huge number. That comes off of this free cash flow number. They're selling for 38 times free cash flow, 22 times earnings. Here's something I love about the business. Look at this. 10-year profit margin, 33.9%. 5-year profit margin, 36.7. 1-year, 39.34. So, in the last 10 years the profit margin has increased 20% from 33 to 39. Again, big question, does that sound like a dying company to you? Again, we don't know the future, but that doesn't sound like a dying company to me. And really good returns on capital. 21% a year for the last five, 14% for the last one, and that's probably due to the big drop in uh free cash flow relative to the business value. Guys, I look at this going, "Man, it's really, really tough for me to sit there and say this is a dying business." Let's go to the eight pillars. Something we love to see. Only two X's here. And those two X's are the valuation metrics. So, it's basically saying, "Listen, are these expensive? Yeah, maybe, but you've got to remember, when you look at a company, just because there's an X on the free cash flow and the price and the PE, my question to you is, if the company was going to grow 100% a year for the rest of time, this is super cheap. If it's going to decline 3% a year for the rest of the time, this is super expensive. The same number, it just depends on what the growth level is, and that's what I want you guys to remember. I do like the fact that I think that even though Microsoft isn't buying back a ton of shares, if their stock is cheap, they should be buying back more shares. In fact, get rid of that stupid dividend. Why do you guys pay a dividend? I don't get that. I don't know why that happens. So, let's see what analysts think about the company going forward. Well, they have earnings per share of $17 growing to 40 in the next seven years. That's over double. It's two and a half almost two and a half times. Actually, it is about two and a half times over the next 7 years. Not a dying business in my opinion. And revenue growth over double. 336 to 760 also over the next 7 years. That's over 10% revenue growth a year. It's over 10% earnings per share growth over the next few years. Now, we have some story, very small amount of story. We have some numbers, a very high-level view. Our goal now is to use our stock analyzer tool to make assumptions about the future to determine what is the right price to pay for this business. So, the reason I do this so early in my methodology is I want to see if it's even worth my time. Should I even spend any more time on this company? So, I'm going to change this a little slightly. I'm going to do 7, 10, and 13% revenue growth for the next 10 years, cuz I do a 10-year analysis here. Profit margin, guys, I did 34, 37, and 40. Why? Cuz yes, it's getting better, but I'm still going to sit there and say let's just assume it takes a little bit of time to get maybe this is a fluke. I have no idea. Next thing, what is the PE and price to free cash flow I would assign to Microsoft 10 years from now. Guys, it's a high-quality business, high returns on capital, I think a very large moat. I'm putting a premium, 20, 23, 26. Now, you might be watching and thinking yourself that's too low. Yeah maybe. That's too high. Maybe. These are the things we're doing here. This is why I have a low, middle, and high assumption. We don't know the right number. It's about putting those variables in and seeing what it's worth. Now, guys, I'm going to do two different returns here. The first one is 9%. This is basically telling me what is the company worth? What's its intrinsic value? Then, I'm going to show you my return requirement, explain that properly. That way you understand that personal finance is more personal than finance. So, based on a 9% no margin of safety return, I think Microsoft is worth on the low side 360, high side 820, middle side 545. Based on these assumptions, it's about a 14% return based on the current price. Now, what return do I do? Well, guys, I do 15%. I want to tell everybody why I do 15% because I don't want you copying that. I've got a lot of real estate. I've got several businesses. I have enough. I dollar cost average in a low-cost ETFs. So, for me to buy a company, I want a really high return. I used to do 12%. But then I thought to myself but that's not like I want to really buy it when it's really good deal. So, I changed it to 15%. And this is exactly why we don't give stock tips on this channel because my situation is very different than yours. And because of that, you've got to remember that there's a big difference in how we're going to look at companies. So, guys, based on my 15% return, I hit the analyze button. I have a low price of 234, a high price of 514, middle price of 347. So, guys, it's gotten better. So, I'm going to add it to my watch list at 350, not 330. So, I'm increasing my my price and at that point, I will if it if it hits 350 or below, I get the notification from our software. I will go run the numbers again and either buy the stock or sell cash-secured puts for myself, knowing full well the company will probably go down further in price. Now, back to that cash-secured puts conversation. What this does is it allows me to generate income on my cash while I wait for a stock to go on sale at the price that I believe is below the intrinsic value. If the stock hits my price, I'm buying it at a level that I'm really happy with and I got paid to do that. That is the beauty of all of this. I'm not chasing. I'm not panic buying. I'm setting my price. I'm getting paid to wait. And the stock comes to me, great. If it doesn't, I still made money. Now, I'm going to show you exactly how that works right now and we're going to do it with a full analysis. So, guys, we're going to do Amazon real quick. I'm going to show you the numbers, and then we're going to pick either Amazon or Microsoft to do cash secured puts on. So, Amazon is a $2.64 trillion business with $2.97 enterprise value. That's roughly $350 billion in debt. Now, here's the crazy part about Amazon. Look at their free cash flow last year, -2.5 billion. Guys, their profit was 90 billion 91. This is all CapEx, and I'm going to show you that right now. Look at this CapEx number. So, we go to the cash flow statement, we go to look at the capital expenditures here. Look at it, 13 billion 17 40 61 64 52 83. It's up to 150. Look at our chart here. Now, guys, this is a beta version. We're going to change this CapEx chart because it's a negative number. It'll go different, but as you can tell, look at how much their CapEx has skyrocketed. Guys, Amazon is well-known for investing in the future. This is something I missed on Amazon 10 12 years ago. I absolutely missed for this exact reason. So, let's go back to our analysis. No dividend. I'm ignoring price to free cash flow because it's useless. Their PE is 29. Okay. Seems expensive. Cuz the market average is 15 or 16, but it's Amazon. It is a massive moat. It is a company that everybody needs, everybody uses. Does it deserve a premium? Yes. Is 29 the right premium? So, that's the question to ask on Amazon, and I think it's a legitimate question. Returns on capital aren't great, but it's cuz their cash flow is down. They keep investing in the future. Now, look at this. 10-year profit margin 6.5, 5-year 7.4, 1-year is 12%. You guys are going to see something very interesting on my stock analyzer, but before we get there, here are the eight pillars. Garbage, don't care. I literally look at Amazon going, "I'm not looking at this with eight pillars." I look at it saying, "What is this telling me?" It's telling me nothing about the business in terms of what their growth is, except that how can a business grow so much and have this many X's? It tells me there's more going on. Let's go to analyst estimates here. Not as well Not as good as I would have thought. $9 per share growing to 1750. So, basically 2X over the next 7 years. Not as good as I would have thought. Revenue growth, look at this. 840 billion growing to 1.66 trillion. Again, 2X over the next 7 years. Man, that's a lot. So, let's go to our stock analyzer tool. So, guys, again, a 10-year analysis. I did 4, 8, and 12% revenue growth. I did profit margin and free cash flow of 8, 12, and 16. Now, two things on this. My middle number, they've only hit one time. So, I'm assuming that their profits going to continue to get better and better. They have a gross margin of 50%. AWS is doing better, and their ad business is getting even better from that. Next, what PE would I assign to Amazon 10 years from now? Guys, I put 20, 23, and 26. And I'm not going to lie to you, I think it's low. Like I look at Amazon going, "You got to pay a premium for this." We are all like living off of Amazon. How many packages do you receive a day or a week from Amazon? If you're like my wife and I, anytime we need anything, we just go to Amazon and buy it. Anything. Toilet paper, paper towels. Unless she's at the store, we just buy it from Amazon. Next, my 9% first analysis on 9%. So, guys, as you can see, I feel like I've made some pretty reasonable assumptions on Amazon, and it's something that you guys can easily learn to do with our stock analyzer tool to save you countless hours. Here is why. What you just watched me do took about 3 minutes. And it told me more about the future of Amazon and the time I need to spend on Amazon than most people will ever ever know before they buy it. Most investors would have just looked at the price, maybe read a headline or two, and made a decision based on that. Guys, that is not investing. That is speculating. That's how you buy a stock and then feel sick to your stomach when it drops because you never really knew what it was worth in the first place. The stock analyzer tool is exactly what changes all of that. You put in smart reasonable assumptions about a company's growth and their cash flow and their profit, exactly what you just saw me do right here, and it's going to show you exactly the price that you need to pay to get the return that you want. This isn't a guess on the numbers. It's a guess on your inputs. You're making educated assumptions about the future, but the output is exactly based on the numbers you put in. And that number means a lot. So, if you put that together with the eight pillars, and you're not just getting a price, guys. You're getting a full picture of whether the business is even worth owning it all or even doing more research. And people who are community, surrounded by like-minded investors, are using these tools, and they're more likely to stop making bad emotional decisions. They're in a better position to stop buying on hype and hoping for the best. They know what they own. They know what they paid, and they know why. So, the price goes down further, they're ready to buy more. That's what it feels like to sleep at night no matter what the market is doing. The people in our community cheer negative days. And here's the thing. You saw how simple it was. If I can do it live right here in a few minutes, you can do it, too. You don't need a finance degree. You don't need to be a math person. You just need the right tool. Now, here's something I haven't shared in our recent videos. We actually have a class coming up this week. Eight sessions from now until August where you get to work with me directly and Dalton in a very small group on Zoom. You get to ask the questions you want to ask. You get to learn the foundations of investing. We grade your stock, analyze your assumptions, and your retirement plans, and most importantly, you walk away with a process that will pay you far more than the cost of the class. We have a special price going on right now. Only a few spots left, and registrations close on Wednesday morning. So, pause this video, click the foundations link to this video in the description below. And as a bonus, you'll also get 3 months of our Everything Money software and community absolutely free. So, go check out the class. I will see you there. Now, for my 9% returns on Amazon, I hit the analyze button. The stock's at 240. Guys, I have a low price of 107, a high price of 485, and middle price of 240. So, it's basically selling for my intrinsic value, based on my assumptions. But, again, let's put my 15% returns in. Hit the analyze button. And guys, I have a low price of 70, high price of 304, middle price of 155. Guys, I was just asked by Tim in the studio, "Paul, aren't isn't Amazon getting leaner?" They are, but you remember, I put in 12% for my middle assumptions on profit margin, and that's their best ever. So, I'm giving them a benefit of that leanness and other growth in their in their profit. So, I think the better company to look at is Microsoft right now. So, let me show you how I would sell cash-secured puts on Microsoft. The stock's currently at 375. We saw my price is basically 348. Let's call it 350. So, I go to our options chain in our software. What I'm going to do here is I'm going to pick a date in the future that I want to own the stock at. I usually go a month or two out. So, let's go to July 17th, 2026. Here's the put side, here's the call side. What I'm being told is, "Paul, if you want the stock at 350 per share, someone will pay you $3.41 per share." So, what this means is if on July 17th, the stock is above 350, I just keep my 341, I don't get the shares. If it falls below 350, I pay 350 for the stock, but I still keep my 341. So, essentially, I paid 346.6 for the stock because it's my 350 minus my 340. So, you might be wondering, "Oh, that's pretty cool." But even more cool, right now the cash in my accounts are in US Treasuries. 90-day Treasuries making around 3.7%. If I did this over and over for an entire year, I'd make 12.2% per year on my cash. That's assuming I never get the stock. But that's what I want to look at. Like am I getting a decent return on my money? Now, some people would say, "You know, I need a 15% return." Well, if you're okay paying 355, that's okay. And you're going to get a 15.5% return on your cash. So, I want to repeat what I'm doing here. What I'm doing is I'm getting paid to buy Microsoft at a lower price. Now, you might sit there and say, "Well, what's the catch?" Well, here is the catch emotionally. I don't experience this, but a lot of people do. What if What if Microsoft goes to $300 a share? What price am I paying? Guys, I'm still paying that 350 and keep my $3.40. So, you might sit there and say, "Oh my god, Paul, you lost $45." Well, I don't look at it as a loss of $45. I was going to buy If it was today if Microsoft was still at 350, I'd be buying it anyhow. So, if it falls to 300, I still lost that money anyhow. The only difference is I'm getting paid a little bit of money to wait. That's the only difference. And that's the big difference. So, I'm either going to buy a great stock that I love at a price that I love, or I'm going to pocket the money and wait for another position. Either way, I feel like I won. So guys, Meta is another company that everybody looks at. I'm going to pull up my stock analyzer tool, and I'm going to do my 15% assumptions in here. And I'll show you guys where it's at. The stock is currently at 573. It's basically there right now. It's at 570 based on discounted cash flow, 588 on multiple of earnings. So, how greedy do I want to get? And I say that with uh you know, a grain of salt. Let's again go to July 17th. And let's sit there and say, "Okay, I want it at 535." That's a 16.8% return on my cash and somebody can pay me $7.15. Guys, I'm going to tell you this right now. I didn't realize how good this was. I'm actually going to go sell puts on Microsoft and Meta at these prices. Again, don't do it just cuz I'm doing it. But, I want you guys to see the full disclosure I have on the trades I make. The only thing I'll never tell you is the position size. Only because it changes and I'll be honest with you guys, I never look at my position sizes because I look at it saying, "Is the stock worth it? Should I add to it?" That's all I care about. And also remember, every month I buy SCHD like clockwork. That is my dollar cost average in my low-cost ETF. Why? Because it fits my goals. It pays a high dividend, lets me use that money to go live off of, and that's exactly what I need. So guys, if you're interested in learning more about options, we do covered calls, we do cash secured puts. I have an absolutely free PDF. Click the link in the description below or in our first pin comment and download the PDF absolutely free. It'll be sent to your email in a matter of minutes. So guys, if you're looking for potential value in this market right now, I put together a video on five stocks that look like if the execution goes well, might be a massive opportunity right now. I ran them through our process and they look extremely interesting. So, click the video on your screen and go watch it right now. Thank you for your time.