Robinhood: Viva Las Vegas with Vincent Daniel, Porter Collins & JB Mackenzie
Summary
Event Contracts: Robinhood is expanding its offerings with new products, including event contracts, which are regulated by the CFTC and NFA, providing a standardized and efficient trading experience across states.
Product Innovation: Robinhood emphasizes rapid product development and innovation, introducing features like short selling and social trading to meet the demands of increasingly sophisticated retail investors.
Market Dynamics: The discussion highlighted the importance of understanding market structure, with a focus on the impact of AI on employment and the potential for AI-driven market opportunities.
Investment Strategies: The speakers discussed the importance of identifying undervalued sectors, such as China and uranium, and the role of short interest in identifying potential investment opportunities.
Retail Investor Education: Robinhood aims to simplify complex financial products for retail investors, offering educational tools to help them understand and engage with the market effectively.
Regulatory Environment: The podcast touched on the regulatory landscape for event contracts and the importance of compliance with financial regulations, such as KYC and anti-money laundering requirements.
Economic Outlook: The conversation included insights into the current economic environment, with discussions on interest rate cuts, inflation, and the implications for different market sectors.
Investment Community: The importance of community and collaboration in investment decision-making was emphasized, with references to platforms like Discord and Substack for sharing insights and strategies.
Transcript
[Music] Welcome to the On the Tape podcast. I am Danny Moses. I'm coming to you from Las Vegas where I've been presenting and attending Robin Hood Summit 2025, Enter the mainframe. I moderated a panel earlier today on event contracts with the co-founder of couchy Luana Lopez Laura, my fellow big shorter and Seawolf Capital co-founder Porter Collins. And my guest on the pod today, vice president and general manager of futures and international Robin Hood JB Mackenzie. Welcome to On the Tape. Thanks for having me. I really appreciate it. All right. After JB, stick around and Porter and Vinnie are going to join me for a brief conversation. And of course, in the spirit of being in Las Vegas, I will give you my NFL week 2 picks. And you can find those events offered wear on Robin Hood. All right, JB, I got to say I did the event last year. Obviously, there weren't event contracts yet. Y >> um quite a turnout. Uh talk about just the excitement that you feel, you know, event contracts aside for the moment, just in general on what you're seeing out here. Look, we this is 2x the size we were last year. So, we're doubling it up. It's been a great experience. just love the interaction with people who are talking and asking us questions about the new products that we've been launching with the legend and how we're adding shorting and the the just the ability to add product at a great rate the social trading all that stuff coming together has been great Danny but really at the end of the day it's about sitting with the the the traders investors that work use our products and then asking what comes next and the thing I think I found more than anything else is they want to know what comes next and they keep hitting us and saying get us more we're trying to deliver but this has been an absolutely fantastic you can hear the buzz is behind us. It's just absolutely awesome. >> It's amazing. So, the years you had at Schwab and Amerit Trade, I'm sure there was 12 great years that have gone. Couldn't have been as exciting as what like I don't think people realize in our industry, you don't get product innovation and get to kind of do. How's that been for you as a kind of a personal working experience? >> No, I mean that was the big thing. thing. I mean, I had I had a great run helping develop product at uh at at at TD Maritary and Charles Schwab. But really, what you see here at Robin Hood is the ethos that's brought out by our leadership between Vlad and and and Steve Quirk is build, evolve, and push the envelope. And that's what we've been doing. And our focus has been how do you do this? And we do it quickly. You know, we were talking earlier about how fast we did event contracts last year. We pivoted to election contracts and did it in less than a month. So, in less than 12 months, that would sorry, less than uh four weeks. That was unbelievable pivot. And since then, we now have just built out this incredible group of product that's been there. But just the innovation and the drive by this team. Listen, we have the the vibe and it builds from us, but that all builds from what we get from the end clients who just keep asking us for more. I don't think people realize it's not that easy to come up with new products and then engineer them obviously and can interface both on Legend and then on mobile and so forth. So, pretty exciting time. I will say I know you guys announced six products last night, new products. Of course, you can figure out which was my favorite of the six. You know, event contracts had already been announced, but the shorting on and it was interesting to see the reception. I think people are intimidated by shorting a little bit to a degree, but at the same time, I hope people realize they can now use it as a tool as an extra way to kind of figure out what's going on in the markets because you use that in futures anyway over a period of time. It's just not called shorting. It's really selling futures. So, >> no, that's exactly it. And and actually, I think shorting is an important product that you need to have or capability, right? Because the markets are going to move and you're going to have differing opinions. And so I think bringing this out to our end clients who have become more and more sophisticated and really can utilize the education that we've been building at the same time is going to be a really powerful tool for them both in the short term but also in the longer term as we build that longer term investment idea and strategy. Listen, they're growing up and they're building and they're getting more and more mature. The things you can do on these phones now it just it's unbelievable the data. I mean think back to when I started 20 years ago. It was all Bloomberg machines that gave you this capability to be able to learn it. Now it's on it's my it's in my app. you know, you got between the charting and the capabilities of being able to access markets and now do it in do it efficiently and inexpensive. It's just a great combination coming together. >> So, let's move into the event contracts themselves. Um, it's not easy. Sounds like, oh, we just plug and play. There's regulators that are involved. Um, the CFTC obviously is who you've dealt with probably the most in your career. >> Talk about why the CFTC is the one that regulates it. And really, these are just swaps, you know, that's all it really is. So, give us kind of the landscape on a regulatory. Yeah, I mean look it's they they are swaps and swaps just like futures are regulated by the CFTC and the NFA National Futures Association. So really it's a the structure of this is built because it's a it's basically preeemption or where the actual CFTC has the ability over the local state governments to be able to actually have the overall oversight. And what we're seeing with it is it works just like futures. So corn futures, S&P, crude oil, all of those have the exact same structures as what you have. But the beauty of having products like event contracts in that structure, it means everybody regardless of the state that you're in gets the exact same price. It interacts with the exact same centralized order book. The efficiency that comes together and then on top of it just the the regatory oversight that we've put into play with that just allows us to build what I think is a much better product than a state-by-state uh regulated and oversighted uh product that you get in some of the the sports stuff and some of the other um sweep stakes type of of apps. So you partnered with Kowi, they were the pioneer obviously in the space. They kind of paved the way for you to kind of come in and behind. Talk about them as a partner and um how that's evolving. >> Yeah, I mean look I think what's interesting about Khi is Khi reminds me of us, right? They are pushing the envelope looking at different types of product asking us questions of what our clients need because look at the end of the day the product that we're building is based upon your demand as the end client. So when someone tells me that they're interested in trading the Fed fund rate, then I'm going to find a way to give them the best product that they can do for it. Whether that moves into sports or it moves into other economic um products or even into some social stuff. That's been the important part I think with Koshi is they have worked very very well with us handinand to help develop product that our end clients want, but then also doing it at a very very rapid pace. I mean just think about this 12 months ago election contracts one event that was it. I think we did 380 events last week alone fully automated going and being uh distributed and resolved and back around there and we're just doing it now faster and faster every day as we hear about different product that people are interested in. >> Yeah. So some of the events are year-long or an event that might occur. We were giving some examples earlier on the panel you know mentioned the Ryder Cup for instance where you can you know buy Europe at 38 cents and try to explain people what that really means. You can make 62 cents before commission. so called 60 cents uh on that event. And the really interesting thing about that is it's a two rounds on Friday, two rounds on Saturday and a round on Sunday. So the amount of activity I think is going to be spectacular in a word and you know you might have a situation where it really moves a lot based upon the outcomes of some of those matches. So that's really interesting. Um so we've seen you and Koshi, you know, Crypto.com with underdog in the daily fantasy sports. We've seen CME and FanDuel kind of work their way through. Now, Poly Markets come into the market and they're going to they they bought a license obviously to operate. So, we're going to keep seeing these, aren't we? >> Oh, absolutely. I mean, look, I think I think just those lists of participants that have come in have actually put the legitimacy back into the into this marketplace of where prediction markets are going, especially with the CME. Look, it's arguably the largest exchange in the world storied with its volume and and its importance for where people go to to to to hedge their risk. But I do think what you're seeing more and more is that these prediction markets are at their beginning of their life cycle and they are starting to develop and having a much more important and integral part of the financial system. For for me I think what they really give you is two key opportunities right is one it's a very interesting educational tool right you have people with their real opinions coming and putting their their money into that marketplace and you can see it directly as it's moving in in place. So what whatever the event is you see that that really gives you the true I would say belief of what does the people the social aspect look at. I think the other thing about it is the size of the contracts are small. It really lets you, it's a dollar that you can start at, it gives you the ability to customize your willingness to go into that risk or learn, right? So, if I don't know enough about the Fed, but I know that a Fed cut rate has a pretty big impact. I can go put $10 in there, watch the evolution of the market. We've always said this is like being a golfer, right? You practice your rounds, you learn to get there, and then you go on to the you go on to the course and you play. It may not go great every time, but be able to reduce and hold your risk at a very small amount, that's really, really powerful. So I think that the two pieces of creating this really new interesting piece of market data but also being able to also have this the ability of small contracts for people to learn and build I think it's just a powerful combination that comes together >> somehow when I practice and when I play on the course two different things that obviously occur and it's all mental. So but I would tell people that they should go through and look at the events whether you're going to partake in them or not it really kind of gives you a broad overview of what's going on and what people are paying attention to. Um, and I do want to point out that the offering that you have, you know, if you have a gold account or whatever, you can earn four and a half% on the cash anyway. And again, I'm not going to compare this. It's a whole different market to DraftKings and FanDuel in the sense of they're the house. You're not you're just matching buyers and sellers. And so, I think it's advantageous for people that want to use event contracts in that way from an opportunity perspective to look and see this product offering versus what they may be seeing on there. And so, you know, it's interesting that you're able to go in 49 states at the moment, including Texas and California, and those are the prized possessions for those two companies. So, we talk about what's next and type of announcements that we're going to see. It's hard to imagine we don't see further FanDuel CME announcements and then DraftKings probably doing something. And you're acquiring customers 18 and over, by the way, not 21 and over. Exactly. And the question I wanted you to answer on that and sorry for going on so long here is the crossover effect getting someone onto your platform that can understand whether they want to trade event contracts or they come for that reason spreading out and trading other products. >> No, and I think that's actually the power of of our platform is is that doesn't matter what your genuine genuine first interest is. It could be in equities, options, futures or event contracts. But what we do see is that people that want to participate in the market come in and they look at it. And again, I'll use this I think is a really good example is look, people have an opinion of digital assets or crypto. You may think that Bitcoin is good or bad, but it's going to go up or go down. You can use an event contract to actually say, I believe that it's going to go above $125,000 by the end of the year. You don't have to actually own the underlying asset. But let's say you did. Well, you can go and utilize and cross over into our crypto offering. Or let's say you didn't want to use the crypto offering, but you really had an interest in it. you go over to our futures offering where we have a Bitcoin futures product. the ability to provide basically one-stop shop um for anybody to be able to participate or come into these the products to your point that's really I think the big powerful component that Robin Hood brings to it right we we find a way to build great innovative technology that's simple and easy to use and then provide you with no barriers to access accessing it whether that's on price whether that's on market access or whether that is is just coming up with that new uh asset classes for you to tra to trade >> and it's giving retail investors the opportunity to trade products that have traditionally >> Yep. been for institutional investors only. And I talked about this earlier and I'll say it again that trading through the great financial crisis. Wall Street has a great way of making it difficult and confusing in terms of credit default swaps and acronyms here and there and the fees that adjusted with it. And if you look all a credit default swap was on the mortgage companies will say our home price is going to go up or down. I mean to a degree or you know it's just an insurance policy. And so again the way that you guys have written the event contracts and I'm sure it'll keep evolving. Dumb it down is probably the wrong word, but simplify the what those futures are without seeing all these screens and all these bid and offers and all these things that are flowing because it's intimidating. Absolutely. But I think it's a great stepping stool again for educating investor. I think you're making smart and and you still got to fill out KYC's. You still got to fill out anti-money moneyaundering. This is not a oh plug and play and and not be responsible. >> No, that's exactly it. I think what's really interesting about this is you follow the same financial rigor for opening an equity account with us to trade equities or options or to do futures. But but to your point of the simplicity and and so I have a I have a daughter as a freshman in high school and she said, "Hey, Dad, what is this you're building?" Literally asked me this question and I said, "Hey, let's go take a look at the the Fed rate." Because it was all over the news talking about Powell when he was in um when he was in uh Wyoming and they were talking about his Jackson Hole speech and she's like, "Well, what does this mean?" I was like, "Oh, well, this interest rate means how much your free cash can earn, and it has a dramatic impact on the rest of the of the global economy, both for the United States and beyond." And she's like, "Okay, well, how do I understand? How does it work?" And I said, "Well, right now 80% of the people think that there's going to be a 25 basis point rate cut." And she's like, "Okay, so 89% of the people think that's what's going to happen." She I said, "Yeah." She goes, "We should do that." And I said, "Okay, we can go do that. Let's go figure." Now, the thing that just did was that just captured the mind of a of a freshman in high school who now has the first step of understanding how the markets work. So, for me, when you have that ability to create a simplistic product that then has the impact of where it's going to go, I know what comes next with her, right? The next question is, well, tell me more about a stock. Oh, and tell me how it means in for futures. And so, I just think that is a such a powerful powerful message to have there and being able to do it in a direct way. And again, that's what I think you've seen out of Robin Hood is we find ways to take the complicated and we make it simple and direct and then we provide you education so you can learn and build. That's why you come to places like this because you meet with great people who are going to walk you through product and teach you about it so that you can then figure out whether or not it fits now or not in your portfolio. By the way, and no is never a bad thing, >> right? >> Like you don't need to do everything all the time. You can do it every so often. And I think that's the powerful part. Give you the tools for you to be successful when you're ready to do it. >> I have I had I have boys. They're no longer teenagers, but if I was running event contracts with them back then, they broke every single one of them. So, it was always no. But if I had a teenage daughter, I certain events like, "Will you be getting your driver's license?" I'd probably make it 99 cents. That's that's never going to happen. Well, listen, I know you're extremely busy. It's unbelievable what you guys have developed. I can't thank you enough for coming on at this event. I know we're going to hang out later. So, awesome. >> Thanks for coming on the tape and don't go away because after this, we're going to have Porter College and Vincent Daniel join us, my partners from Seawolf Capital and fellow Big Short characters, and then my NFL picks. So stick around. >> Hey guys. Well, listen, Porter College, Vincent Daniel, great to be back in Vegas with you, Vincent. Uh, >> yes. >> So, the last time you and I were here together, um, it was January 2007. It was the infamous uh, big short scene where our partner Steve Eisman held up the zero sign, which I actually used today on my previous thing. I didn't realize I was even doing it, where we were watching the end of the world unfold in the fixed income market. We sit here today. We're at the Robin Hood conference here. Enter the mainframe. There's Summit 2025 together. We've both been on panels. We're going to get to that. What a difference 18 years makes. Here is a retail platform that from last year's summit to this is exploding. The product offering is incredible. And while we're here, they announced short selling. So, I feel like they might have done that. I think Porter last year at the conference and they said, "Porter, what products would you recommend?" He goes, "Maybe we could short stocks here." But anyway, all right. So, we're all here in Vegas, guys. Let's talk about what your thoughts are in the 24 hours since we've been here and and Porter, I'll start with you since you and I did a panel earlier together. You've been, you know, talking to the crowd and friend of the people. So, give me your thoughts here. >> Well, I certainly feel like a fish out of water here. That's for sure. >> I'm uh I used to think of myself as a young kid. I'm old. Uh we were probably three oldest people here. >> Yes. >> Um we were probably the three most bearish people here. And I don't even think I'm that bearish. And uh here we sit, all-time highs, people talking about crypto and uh you know, momentum stocks and I'm uh I'm unsettled. That's that's how I feel. >> Then you were just on a panel in there. I don't know how unsettled you were following it if you're pretty good on it. Let's talk about your panel in there because I think uh I heard you talk a lot, but I couldn't hear what you were saying. >> I did talk a lot, but it was a great panel because uh it was essentially the 22V boys, the Bushers crew. >> Yeah. So explain to people what 22V is. >> 22V is a brokerage shop. They do an incredible job. And the two of the guys up there, Jordi Visser and John Rogue, we're three strike tri-state area kids. John is is an expert technician. He does technical analysis. majority is kind of a big level fundamental thinker and in many respects probably 90% was a discussion of process current events and where we agree or disagree and how the technicals are show up on our various fundamentals. I I would say I was probably not a surprise uh different in that and I the reason why I think Porter feels like a fish out of water is we're value people and if you say value here it's kind of like a four-letter word. a lot of them don't even know uh some of the names that we're playing in which is fine that's what makes markets so a discussion up there in terms of how the fundamentals are playing out and AI was a dominant theme and how we're playing it and how the technicals look on that we actually jived on a lot of stuff versus uh opposed to each other >> but we just don't we don't play in the same sandboxes just we can't >> we can but that's just not our expertise >> well I see like if you go on the website for Robin Hood and you look at the kind of the top 15 or 20 names probably the only name that you own on there is Google, >> correct? >> You know, and I don't know where that thing sits. It's not probably in the top five. It's probably somewhere in the middle because it just now became kind of a quote growth story even though it was it was a value name. >> One sector, one sector that we agreed on all three of us and came at it from different well similar but different conclusions was China, >> right? So all of us were bullish China, Jordy because of AI, John because the charts look great and us because it was dirt cheap and it was hated. So the combination of the three of what probably our our inherent skill sets were came together. >> But to be fair, Baba's not as cheap as it once was when we were buying the stock at correct 80 bucks Alibaba in January. Correct. Yeah. Listen, that's the thing, right? So looking for names that not everybody is in, I think is key. It doesn't mean that they're value as much. They're trading like value, but you're finding stories that have some type of catalyst, right, in your in your portfolio. All right, so let's talk about what's happening in the market right now. I had you on the podcast a couple weeks ago. Nothing's really changed. Probably changed now is that a rate cuts a certainty that we can't trust job numbers. I don't know if we can trust inflation numbers anymore, but we're going to get a cut now. The question is, is it 25 or 50 basis points? So, what does it do? What does it even mean to the market if they even cut 25 basis? >> So, Danny, you're the host usually of this. I'll ask you. >> Yeah. >> Yeah. >> Right. >> Okay. >> Well, let's turn it on you. >> Did we ever believe the jobs numbers? >> I mean, >> we've been working together for a long time. When was the last time you believed the jobs? >> We're doing this for 20 years. So we would make a wager on the desk every day, every every week or every month on the jobs numbers and it would always be way off. I mean, but there are other things you can look at, right? So there's weekly jobless claims. Those are harder to kind of move around. I'm not even saying they're manipulated. I just think it's a bad data that's being gathered. And so there's other things you need to look at. And I don't like when people just trade manically off of either a better print or a worse print. And the one thing that I'm having trouble reconciling right now is if the economy, we've been feeling like the economy has been slowing. And I'll tell you, I've been coming to Vegas for many years and with the exception of what's going on in this room and I know you guys were in Caesars last night. Of course, it was crowded. There was no taxi line. It was pretty it's been pretty empty. Talking to the dealers, I always have to converse to black dealers to see if maybe they'll pay me by accident, make friends with them and so forth. Things are extremely slow. So, that's part of what's going on within the economy is kind of the the halves and the have nots and it feels that way. But the it's not working that in the stock market. It's just not translating. >> You know, interesting antidote. The the an inside joke inside joke aneote. But yeah, we don't Yeah. >> And um >> I was talking to the cabbie and I and I said, "Well, how's business?" >> Kabby. >> The cabbby. >> Okay. >> He said it was terrible. >> Yeah. >> And one of the things he said, he goes, "It's just too expensive. Everything's too expensive." And I think all of us feel that going around everywhere and you know, it's food, it's you know, anything. He goes it was he bought paid 50 bucks for breakfast the other day and he goes, "It's just outrageous." Well, that's my point about whether inflation says that it's up or not doesn't matter. It's feeling in everybody's wallet and it's real. And so whether you believe tariffs or inflation, it doesn't matter. Someone's eating it. So is it going to happen on the corporate margin level, Vinnie, or is it going to be in people's pockets or combination of both? And if it's on the corporate margin level, then pe then earnings might be overstated right now and and or maybe coming down here. And what how does that translate? I know you don't necessarily care as much on the top down, but give me your thoughts. >> No, but in general, I think it's a sector by sector basis, right? So take what Oracle said yesterday. I just heard that on on the call as to why it was up 40%. >> I mean 40% on a market cap like that's insane just so everybody >> but apparently their their backlog was the size of the incremental growth of the country of Japan right whatever whatever that means. >> Uh but on the other hand you look at a lot of consumer discretionary names. So I think you got to go sector by sector and see I think you're seeing and feeling the pain. think about being in Las Vegas and you're seeing it like all over the place here. Where whereas if you're a Google or or an Nvidia, you're not. But that doesn't for me that's not really anything new. That's been the way for I would say the last nine months. What's new to me is now the Fed's intent is to cut rates. The question is how much? And because they want to quote unquote now save the economy. the implications of that while inflation is still rearing its ugly head is going to be an interesting one over the next six months. But I just think there's some opportunities knowing that the market structure that we have right now. Uh, one of the things I went off on, by the way, we were talking a lot a lot of AI and it just start I don't know if you were at the airport or listening, it started getting I felt like Danny was starting to get a little bit too bullish, right? And then I turned on I turned on it. I said, "Okay, guys, >> AI, AI, AI, AI. Let's talk about the negative implications of AI." And I go, >> "The goal of AI, >> how dare you, by the way. I know. I know. But but but it's not really a stock related thing, but it might be eventually. The goal of AI is to lay off 20 to 25% of the workforce. >> When when Microsoft's cutting jobs, you know, there's a problem. >> Correct. >> The most profitable. >> Well, it's not a problem. That's what they want to do. >> Yeah, I know. >> Um but as I was asking people, where do we fill the void? Like if you go to the old Henry Vo Henry Ford, someone's got to buy your cars. We're just making a natural assumption that you could lay off 10 to 15% of the workforce and the revenue generation capabilities are still going to be there. Now, we know in markets like this, you bull first and ask questions later, right? But, of course, being the stupid bears that we are, I'm asking the bear question, but we're trying to keep our bearish instincts intact while while this plays out as rates are declining. >> This is just proof that just the stock market's not the economy because you can have a stock market going up because of what you're saying. There's no impact on stock prices and the level of quote the S&P 500, but you're right within the market. I know you guys were talking about today, Jordy brought up the point, imagine the Oracle market cap move today, the impact that had on the S&P 500 and yet the S&P 500 wasn't up that much. So, it tells you the bifurcation even in the stock market, but what's really happening out there? So, I know we look for ideas within themes uh to to stay with that. One area that you guys have been early on is uranium. Um, and uh, I've talked to you guys a lot about that. And it's one of these things where if you really believe in the AI trade and the power, by the way, your power bills are going up. I'm not sure if if anyone is paying attention as much as should be, but on an apples apples basis, they're going up 15 20%. I've seen the change. Um, is is that you have to power this stuff. So, you can't politically, it's unides, you can be unhappy if your if the grid goes out or if your prices go up. So what's the only thing is nuclear which has come on but because that's a 30 40year generational trade the stocks don't go up like they do on an Oracle news of just a backlog. So tell me how you guys manage through that. >> That's not necessarily true right and this gets into the intricacies of market structure. >> I just say the price of uranium not necessarily I mean Oaklo goes up. Sorry but go ahead. >> That's my point. That's my point. So, so if you think about the uranium trade, right, and we've loved it for four years, and it's funny because all three of us talk backstage about the need for power and we all agree with uranium and we didn't speak about it once on on stage, interestingly enough, >> but because it's not sexy. >> So, and it it's not touched. However, what's going up in uranium? >> It's radioactive. >> It's the mean. It's not radioactive. >> Oh, sorry, Vinnie. Yeah. >> Um, that's the point. Um, Jeez, >> now you got me angry. >> Keep going. Go ahead. >> So, so but the meme names >> in your in nuclear are going up. SMR, >> right? Ollo news. The traditional names >> are not going up. >> The industrials that are going to be producing are going up. Why? Because that's what longonies can buy. The utilities are going up that that have a predominance of nuclear. Why is it going up? Because that's what long only can buy. So, you keep getting back to this market structure thing of why things in a certain theme are going up. And sometimes when you have a theme like this or and we do this on occasion, we did it in China with web, but sometimes when you have a theme like that, like I don't know how the market's going to play out, let me just buy the ETF and make my life easier from time to time. Uh but >> I mean it goes back to our subprime days, we you know, at first we we instead of picking individual bonds, we should have just done the index, but it ended up okay for us. >> What do you mean? >> Which way if you pick the wrong index, you got Howie Ubler and you're going to get carried out. So I don't necessarily agree with that. We we did bespoke single name work obviously all those names. So the stuff that was announced last night, right, the short selling, better technicals that are available, you guys kind of use all of that. And I think I would tell people that hate short sellers, uh, use it to your advantage. You know, high short interest on names and I want to talk about a couple which you guys have. Maybe Pure Cycle Technologies, PCT is a name obviously with some reason high short interest. how that's just absolute fuel if you have a fundamental long bias on a name and you should welcome you should you should make the shorts want to short it because those are people that have to buy the stock back these aren't additional buyers they have to buy that back at one point so talk about that in your process we >> we talk a lot about AI but you know AI some form of AI in terms of quantitative trading has been in markets for a long time right and there are we know they're al we call them algos they're alos that go after high short interest stocks and so you know we Vinn and I and three of us love shorting stocks but I don't like messing around in high in high short interest right and I it's just too dangerous because there are people out there seeking to try to destroy you in those those names >> you're saying on the short side >> on the on the short side you can't >> but on the long side how short interest would be like what I was going to say is one of the things we've done over the last year and a half was pretty much change our process us to look for names that we like that have a heavy short interest. And it's difficult because in general, particularly on the institutional side of capital, the heavily shorted names are the are the pieces of crap generally speaking. But every once in a while, it might be a function of, for example, and the stock has already moved, but I'm just using it as a prior example in American Eagle, right? That was a function of bad store sales, but in addition to that, the entire institutional base wanting to short consumer discretionary for all the right reasons. Of course, they took it too far and so you had a very heavy short interest in a very in an idiosyncratic name that might have had an earnings inflection. You know, John Ror was talking about how, you know, you don't want to buy stocks in in downward trending moving averages in terms of consumer discretionary stocks. And obviously AI's killing all the jobs the job market's weak anyway. And so but you know are there opportunities in there and that's one that's you know that's where we go ahead and mine and look for idiosyncratic inflection points and try to and try to you know use that short interest to our advantage. You know the thing about Robin Hood and the access which I wish they would also get access to some research right per I think that would be really cool if they I think that's probably their next thing but at the same time I'll tell people that Wall Street research for the most part you know 22V excluded because those are economic a lot of stuff is driven by that kind of macro factors you really got to take with a grain of salt because just keep in mind the majority of I know there separation of banking and research but let's be clear no one wants to have a sell rating on Wall Street if you're if you If you sell rating, you're wrong, you lose your job. If you buy rating, you're wrong. Oh well, you know, we'll just we'll just go to the next one. So, I don't think it's ever been. So, my point is that someone like a Robin Hood or someone that can do their own work. And there's a lot of bespoke information. So, you guys over the last kind of 3, four years have worked your way into various silos, whether it's on Discord or whether it's on X and now we started a Substack together and there's a community there and all that stuff. Talk about how you kind of were able to balance I know Vinnie hates paying for anything. hate hate paying for research on the street but still maintain all that connectivity and how you guys kind of use it. >> Well, it goes back this is not new and goes back kind of 25 years to the cell side you know Henry Blahett and it was tainted research. Well, he worked we worked with Henry. So, yeah. >> And so, you know, sellside research is always tainted. And I think one of the things that that Robin Hood talked about is is trying to find, you know, the Robin Hood social getting into people, actual influencers that have good track record and are pitching stocks for the right reason. And I think there's, you know, people sort through on Twitter to try to find that, right? signal noise and and and kind of trying to distill who's providing good information, who's bei who's providing information that they actually believe they're not trading against you and it's it's a trust thing and you know trust in our daily lives is a big thing and so so should it in trading and so I think that's what we've tried to do is curate you know our own universe of people whether it's Discord, Twitter, our institutional relationships, our friends and try to put that all together and triangulate who we can trust, who puts out good ideas. Uh we also share ideas with each other and and try to push back and when you know we have an idea, we go to a lot of our friends and say, "Hey, what do you think?" And they'll give us, "Hey, this is a bad idea because XYZ or you know, we >> or everybody or that's already out there or >> Exactly." Yeah. >> You know, Jordy said something f I'm thinking about my head's still a little bit on the ground on Jordy Vis. >> No, I did. But he said something extremely interesting and and when I think about what he said was he goes, "You have access, we have access to maybe more timely information on social media feeds like Twitter or Reddit and the like than some institutional capital does or or what they've historically relied on." Now, what what I find so interesting about that is Jordi and John both provide the institutional research, right? So he's essentially saying there's someone out there better than us, right? So I said therefore I don't have to pay you, right? Um as a result, but it was such a truthful statement that he made when I was thinking about it. I was like, "Wow, he just said there's there's better stuff." And I think that's what technology a >> different type of research. >> And look, as I was going to say it, that research on the institutional side, which some of you may or may not be privy to, caters to a much different objective. They're usually catering to a very high-paying hedge fund V targeting client that has a different objective and return thresholds than you are. They're more much more interested in meeting every management team 10 or 20 times a quarter and then going out to dinners to determine the crowding factor of these things so they can make bets on the quarter. That's not what we're doing. >> Right. There's also a different type the sell side trying to distill what the economy is doing, right? because we we start Danny started off but this uh podcast by talking about how you know we had we've had fake jobs numbers for 25 years and you know we revised it down to a almost a million jobs uh just the other day you know the the PPI came out today looks like it was totally doctorred as well and so I think that you know the these um >> you know these institutional shops provide economic research it's it's hard to figure out what's going on right And and I think the three of us have been talking about the jobs market, how it's very weak, and they're they're probably going to have to cut in September, and now it's actually worse than we we thought it was, but but inflation's still hanging around. So >> that was my question to you guys a few minutes ago is what a rate cut really means. So there are definite impacts. You have, you know, helock home equity loan, it'll drop it. 20 certain loans, it'll drop it. But what's it really going to do other other than it's symbolic in nature? Certainly there's some impact, but what are you guys thoughts? cuz I people I think it's going to happen and maybe it's a sell the news event because what happens after that obviously the language associated what's attached to the cut that day I get it but >> well what's Vinn what's the most important part about rate cuts >> it basically lowers the borrowing cost of incremental mortgage payments auto payments >> and who's the big guy >> treasury I mean oh god yes and and >> they're the one who need >> remember that 37 trillion that you mean that thing >> they need the lower rates the most right because it's it's such a big uh percentage of of you know the budget deficit. I would say >> just to keep this apolitical >> obuscation and data engineering has been a bipartisan tool by both parties. Sure. >> They've they've used it to their advantage and I just think we're seeing this right now in that the intent and desire for Bess and Trump and co right now for the time being is to try and get rates lower by 100 to 150 basis points. That's what they need. If they don't get it, then you're going to continue to have massive headwinds for the consumer. So, to me, it's it's kind of like a tugof-war race as to how quickly that happens. I don't know the answer to that. >> Well, the 10-year yield is kind of the universal thing that's used that kind of is the report card, right? Or calls it out. So, if the world believes that we're cutting rates too much and that there's actually inflation in the system, it's going to rear its head in that. And then you have a situation where I have no doubt quantitative easing is coming back because they're going to throw everything in the kitchen sink because they can't let it go. They can't let tenure yields move higher because it will slow everything down to a point and we've seen in the LA how financialized our system is that every time the 10ear yield now it seems like long time ago and far away 5%. We're near 4% basically at this point which is hard to believe but it remains to be seen. I want to go back to one thing that I glossed over that about buying stocks in general and >> I think one of the great tools that everyone can use for themselves is if you have interest in a name or a sector buy a very small amount to start. This is not an investment recommendation. I'm just saying because you know if you have any even if it's $10, you're going to do work. you're gonna force yourself to do the work and something that you guys have done like all right we think it's good let's buy a little bit and keep going and you get confirmation or you don't you know worse so with the wear but unless you're invested in something you don't really take the time to kind of look at it >> that's usually how we do it we always put some sort of starter position on first right put a starter position on feel it out do the research and then we either scale in or or sell it and so you know taking small tax loss is not not the worst thing in the world it's it's not a big deal at all honestly. But, you know, as we do more research, we can uh, you know, leg into it. And you you we're trying to buy stocks for a year, >> right? And we're trying to produce long-term capital gains because it's just a better way of building compounding wealth, right? And so, you know, I honestly, you know, like the like Buffett that his his preferred time horizon is forever, right? And so if you can if you can buy stocks with a super long-term time horizon, um that that's the that's the goal. >> You Vinnie, you you talked about FOMO, you know, fear of missing out up on the stage back there. I heard it. And you know, it's not about being bearish. It's about being practical or logical in the sense, but I do worry that when an open door moves from 1 to 7 that somehow a higher price begets a higher price. And you just can't get caught up in that. I'm not going to not try to make some money and be like, "Oh, you're a hater." No, cuz we know how it ends. Whether it's tomorrow, a week, a month, or a year, fundamentals, we're in Vegas, cards speak. You want to play poker in the poker room and you have 27 offuit and you want to go up against Helm Youth and start raising, you're going to get called eventually. You can have fun at the table while you're sitting there. Maybe you can bluff your way out. But that's just something that I think my dad was a finance professor. Benny, you're dressed like a prof. You look great, by the way. You're like professor. You teach at Bingmpington. We we did a Texas teaching at Austin. You're doing some of this stuff now. We like helping people and it's not about oh the three old bears. Yeah. >> Well, one of the great things about being here, this is the second year that we've come here. First time in in Miami, >> by the way, in Miami, Vegas. What could be the third city? >> I don't know. We'll see. Um but the great thing about it is you get to speak to a lot of different investors and look, we have different styles than the majority of the people here. Uh, but I like to hear their style, their process, their strategy. And and when you hear names of that ilk, there are more than the average people here that will play the opens that the names we would never even think of playing. And the only thing I would I would strongly suggest is don't get greedy, right? Like like you're you're playing with fire, right? Like that we do the analysis on some of these names. They're not worth where they're trading if liquidity wasn't going in their their way. But I understand it's it it's probably fun to make a heck of a lot of money 25% on a name like Open because some dude is on Twitter trying to get Drake to be the CEO. It's just not what we do, right? >> Um but I get it. >> But honestly, you know, I know people like to talk about Robin Hood and retail platforms and people owning the top, you know, seven, you know, most highly traded stocks, but we had a conversation with a guy last night buying Ford. Yeah. Yeah, >> it was a very intelligent conversation and you know the guy knew his fundamentals. you know, uh, another investor was debating DraftKings with us and he had some very excellent points. And so there's there's, you know, I I think that the, uh, the knowledge base of a lot of these retail investors is very very deep and you, you know, you can get a lot of research, you know, for free these days, right? And and Robin Hood gives you a lot of research and they have a pretty interesting AI tool these days and, you know, chat GBT. So I think there's um, there's a, you know, people are doing their research too >> as a result of that. Should we open up the mic to Q&A for retail if anyone wanted to ask a question? >> Sure. Well, let's go. Before we do that, we're going to do this, but I got to get my NFL picks and then we're going to do it. >> Okay. Sorry. Sorry. Sorry. Sorry. >> I'm in Las Vegas. So, I don't know if anyone knows that they listen on the tape. I've been making picks for years. Amazing first year, like like 80%. Okay. Second, third year made great runs in the playoffs. But anyway, so Vinnie, last week I took your I know >> your Jets. They covered, but they didn't. So, last week I was two and one. All three games were within a half point of the spread, >> which tells you go to the event contracts. Don't mess around with the Lions cuz it can be really tough. But I'll get to the Jets in a second. So Dallas at home against the Giants laying five and a half. Dak Prescott looked great. This is going to be Russell Wilson's last game as an NFL player. I believe they're going to send him out. You know, this I think this is it. Jackson Dart era will begin. I think Jerry Jones is going to treat this like a college football game. >> By the way, your new favorite uh Blackjack player, Bob Ax, is a massive Giants fan. I just >> Good. Well, okay. We'll talk about him later. But anyway, so take Dallas, lay the five and a half and then the Jets >> getting either six and a half or seven. By the way, take the seven, even have to pay a little bit extra on the vig to do it against the Bills. Jets look great. They should have won that game. Bills have to be emotionally exhausted after that win. Maybe there's a lot of points in this one. Who knows? It's been such a weird season already. Maybe it goes low scoring. I don't know. But Jets aren't going to I just think they might win outright. But I like the Jets. Vinnie, I'm sorry to do that to you again. you know, plus seven, but you know, and uh Axe, maybe you could Bob Axe is in here. I've been playing blackjack with him a little bit and uh they sell those cards, you know, where you're supposed to tell you what to do. You take without amazing hedge fun manager, but not quite sure why it doesn't translate. All right, let's go to questions that you guys have. So, >> first comment on your NFL picks. Uh I'm from Washington. Take the um Packers against the Commanders money line tomorrow. >> Interesting. Okay, >> I like that. Um so, going back before you guys made it break big, right? What gave you conviction to stay with a trade, right? I mean, the old saying is markets can stay irrational longer than I can stay solvent. So, if you have conviction in something, how do you know to stay with it? You know, it's interesting. I I went back and read some of our old letters from 2006 and 2007. We were all over the fundamentals, right? We wrote about it. We wrote about it a year before it happened. And so I think trust your gut, trust your research and uh you know try to bounce it off as many people as you can open open discussions. I think that's the best way to to flesh it out. That's >> and the only thing I would add is if something changes in the fundamentals, if the story changes, don't move the goalpost. If if everything's consistent with what you're seeing and the price is changing, then reunderite and maybe you add some on on material or or somewhat weakness. >> It's a great question and I would add this part. So we see here today with the kind of the top seven names really don't have balance sheet issues for the most part. Um back in 2006 and 7 it was finite in terms of if there's going to be defaults these companies are going out of business period. So no one was rescuing them. Yes various government programs came in. You have to respect the tarp and tal and every acronym that they threw at it. But it was just math. This isn't math right now. So shorting a stock or selling a stock on a price earnings multiple is not a great thing. But shorting a stock that you know is probably going to go bankrupt because they have balance sheet issues and debt coming due probably is. So that's what gave us conviction. >> Hey guys, one of my favorite scenes in the movie is when you guys go to the American Securization Forum in Vegas. So, I just want to say I don't know if that really happened, but uh >> yeah, I just mentioned it happened. Uh not only did it happen, um Steve Eisman, played by Steve Carell, played by the name Mark Bal, held up this in a meeting about mortg mortgage delinquency rates or loss rates, sorry, mortgage portfolio. And I we were supposed to be hiding in this fixed income conference because we were equity people. And so it kind of exposed us a little bit messing around. But that one that was probably the most accurate scene of the entire movie. We didn't get chased by an alligator. No, that's the only thing that wasn't true, >> right? And then the Moody's meeting we had ongoing with the rating agencies. Those happen in various cities and place, but that was true. Surreal >> honored to be here with you guys in Vegas. Uh questions for your China trade. Uh just wanted to note Chinese stocks have been washed out for a while. Um just wondering what green lit uh your entry on that trade. Can you walk us through uh the play and how you guys >> Sure. You know, one of the things is trying to understand sentiment, right? and and and we were looking at how Trump was treating the Chinese and and his change of tone in terms of the harshness on the ch because it's it's it's both administrations, you know, the Biden administration and the Trump administration had been very very tough on the Chinese and you can kind of see how that changed. And so, you know, we we first got into because they were extremely cheap. You know, we were buying BU at essentially cash value, right? and and uh and Baba was trading at four or five times EVA. So that's a starting point and then you could see the sentiment shift and and uh the tone change shift and so and and they were China was doing a lot more stimulus in terms trying to stimulate the consumer economy and so kind of put a mosaic together. That's that's how we try to do things. >> Hi, my name is Amea. I'm from SF. So quick question. So from the retros perspective, right? um how how do you suggest like um we operate more like a hedge fund like for example right um retail stop loss is usually like hedge funds entry right I think it's a very common phenomenon so my question is like um do you have any like you know advised risk uh management strategies and the other question is basically like you know um you know how do you like define stop-loss take profit uh do you use like technical analysis flow or some other thing like I'm kind of curious on how I can let my winners run and not cut my uh cut like cut my losers but not cut my winners. Right. That's the common uh like problem I face in my trading. Thank you. >> So So what we like doing and I think I advise a lot of people to do is you take a dollar amount than you're comfortable losing. >> Yeah. >> Right. If if you think you know five grand I can't take any bigger losses on on if I come back in a year and say wow I I lost 25 grand. That would be a disaster. But I but five grand I can live with right and so take a dollar amount and to say on an individual trade I'm willing to lose that. And I think, you know, when it hits that level, you're gone, right? Because otherwise you you've sized it incorrectly at first, right? It went down quicker than you thought. Um or or just or things went against you. And so that I like picking a dollar amount. And so when you you when you review history and you know, you don't have a a big name crush you, right? Because it's the it's the big losers that really hurt you. And I would add to that that there's an emotional toll and an opportunity cost. And more so the opportunity cost of getting yourself, you know, wrapped up in a position that you can't you spend all this time on a name that you can't figure out. You're probably better off finding new names the same energy you're going to put in and cutting loss >> and you can always come back. You know, it's a it's a month it's a month a cooling off period, right? In terms of the the the wash tail rule, right? So you sell it. >> Now you're giving tax advice. >> Well, yeah. This is not tax advice nor investment advice, >> but you know, but you you take your loss and you can you can look at it again in in 30 days, >> right? That's what we do. >> Good stuff. Well, thanks everyone in attendance here. Uh this wraps up our On the Tape podcast in Las Vegas. Great to be with you guys, Porter and Vinnie, and great to be at the Robin Conference. So, thank you so much. >> Thank you. Thank you.
Robinhood: Viva Las Vegas with Vincent Daniel, Porter Collins & JB Mackenzie
Summary
Transcript
[Music] Welcome to the On the Tape podcast. I am Danny Moses. I'm coming to you from Las Vegas where I've been presenting and attending Robin Hood Summit 2025, Enter the mainframe. I moderated a panel earlier today on event contracts with the co-founder of couchy Luana Lopez Laura, my fellow big shorter and Seawolf Capital co-founder Porter Collins. And my guest on the pod today, vice president and general manager of futures and international Robin Hood JB Mackenzie. Welcome to On the Tape. Thanks for having me. I really appreciate it. All right. After JB, stick around and Porter and Vinnie are going to join me for a brief conversation. And of course, in the spirit of being in Las Vegas, I will give you my NFL week 2 picks. And you can find those events offered wear on Robin Hood. All right, JB, I got to say I did the event last year. Obviously, there weren't event contracts yet. Y >> um quite a turnout. Uh talk about just the excitement that you feel, you know, event contracts aside for the moment, just in general on what you're seeing out here. Look, we this is 2x the size we were last year. So, we're doubling it up. It's been a great experience. just love the interaction with people who are talking and asking us questions about the new products that we've been launching with the legend and how we're adding shorting and the the just the ability to add product at a great rate the social trading all that stuff coming together has been great Danny but really at the end of the day it's about sitting with the the the traders investors that work use our products and then asking what comes next and the thing I think I found more than anything else is they want to know what comes next and they keep hitting us and saying get us more we're trying to deliver but this has been an absolutely fantastic you can hear the buzz is behind us. It's just absolutely awesome. >> It's amazing. So, the years you had at Schwab and Amerit Trade, I'm sure there was 12 great years that have gone. Couldn't have been as exciting as what like I don't think people realize in our industry, you don't get product innovation and get to kind of do. How's that been for you as a kind of a personal working experience? >> No, I mean that was the big thing. thing. I mean, I had I had a great run helping develop product at uh at at at TD Maritary and Charles Schwab. But really, what you see here at Robin Hood is the ethos that's brought out by our leadership between Vlad and and and Steve Quirk is build, evolve, and push the envelope. And that's what we've been doing. And our focus has been how do you do this? And we do it quickly. You know, we were talking earlier about how fast we did event contracts last year. We pivoted to election contracts and did it in less than a month. So, in less than 12 months, that would sorry, less than uh four weeks. That was unbelievable pivot. And since then, we now have just built out this incredible group of product that's been there. But just the innovation and the drive by this team. Listen, we have the the vibe and it builds from us, but that all builds from what we get from the end clients who just keep asking us for more. I don't think people realize it's not that easy to come up with new products and then engineer them obviously and can interface both on Legend and then on mobile and so forth. So, pretty exciting time. I will say I know you guys announced six products last night, new products. Of course, you can figure out which was my favorite of the six. You know, event contracts had already been announced, but the shorting on and it was interesting to see the reception. I think people are intimidated by shorting a little bit to a degree, but at the same time, I hope people realize they can now use it as a tool as an extra way to kind of figure out what's going on in the markets because you use that in futures anyway over a period of time. It's just not called shorting. It's really selling futures. So, >> no, that's exactly it. And and actually, I think shorting is an important product that you need to have or capability, right? Because the markets are going to move and you're going to have differing opinions. And so I think bringing this out to our end clients who have become more and more sophisticated and really can utilize the education that we've been building at the same time is going to be a really powerful tool for them both in the short term but also in the longer term as we build that longer term investment idea and strategy. Listen, they're growing up and they're building and they're getting more and more mature. The things you can do on these phones now it just it's unbelievable the data. I mean think back to when I started 20 years ago. It was all Bloomberg machines that gave you this capability to be able to learn it. Now it's on it's my it's in my app. you know, you got between the charting and the capabilities of being able to access markets and now do it in do it efficiently and inexpensive. It's just a great combination coming together. >> So, let's move into the event contracts themselves. Um, it's not easy. Sounds like, oh, we just plug and play. There's regulators that are involved. Um, the CFTC obviously is who you've dealt with probably the most in your career. >> Talk about why the CFTC is the one that regulates it. And really, these are just swaps, you know, that's all it really is. So, give us kind of the landscape on a regulatory. Yeah, I mean look it's they they are swaps and swaps just like futures are regulated by the CFTC and the NFA National Futures Association. So really it's a the structure of this is built because it's a it's basically preeemption or where the actual CFTC has the ability over the local state governments to be able to actually have the overall oversight. And what we're seeing with it is it works just like futures. So corn futures, S&P, crude oil, all of those have the exact same structures as what you have. But the beauty of having products like event contracts in that structure, it means everybody regardless of the state that you're in gets the exact same price. It interacts with the exact same centralized order book. The efficiency that comes together and then on top of it just the the regatory oversight that we've put into play with that just allows us to build what I think is a much better product than a state-by-state uh regulated and oversighted uh product that you get in some of the the sports stuff and some of the other um sweep stakes type of of apps. So you partnered with Kowi, they were the pioneer obviously in the space. They kind of paved the way for you to kind of come in and behind. Talk about them as a partner and um how that's evolving. >> Yeah, I mean look I think what's interesting about Khi is Khi reminds me of us, right? They are pushing the envelope looking at different types of product asking us questions of what our clients need because look at the end of the day the product that we're building is based upon your demand as the end client. So when someone tells me that they're interested in trading the Fed fund rate, then I'm going to find a way to give them the best product that they can do for it. Whether that moves into sports or it moves into other economic um products or even into some social stuff. That's been the important part I think with Koshi is they have worked very very well with us handinand to help develop product that our end clients want, but then also doing it at a very very rapid pace. I mean just think about this 12 months ago election contracts one event that was it. I think we did 380 events last week alone fully automated going and being uh distributed and resolved and back around there and we're just doing it now faster and faster every day as we hear about different product that people are interested in. >> Yeah. So some of the events are year-long or an event that might occur. We were giving some examples earlier on the panel you know mentioned the Ryder Cup for instance where you can you know buy Europe at 38 cents and try to explain people what that really means. You can make 62 cents before commission. so called 60 cents uh on that event. And the really interesting thing about that is it's a two rounds on Friday, two rounds on Saturday and a round on Sunday. So the amount of activity I think is going to be spectacular in a word and you know you might have a situation where it really moves a lot based upon the outcomes of some of those matches. So that's really interesting. Um so we've seen you and Koshi, you know, Crypto.com with underdog in the daily fantasy sports. We've seen CME and FanDuel kind of work their way through. Now, Poly Markets come into the market and they're going to they they bought a license obviously to operate. So, we're going to keep seeing these, aren't we? >> Oh, absolutely. I mean, look, I think I think just those lists of participants that have come in have actually put the legitimacy back into the into this marketplace of where prediction markets are going, especially with the CME. Look, it's arguably the largest exchange in the world storied with its volume and and its importance for where people go to to to to hedge their risk. But I do think what you're seeing more and more is that these prediction markets are at their beginning of their life cycle and they are starting to develop and having a much more important and integral part of the financial system. For for me I think what they really give you is two key opportunities right is one it's a very interesting educational tool right you have people with their real opinions coming and putting their their money into that marketplace and you can see it directly as it's moving in in place. So what whatever the event is you see that that really gives you the true I would say belief of what does the people the social aspect look at. I think the other thing about it is the size of the contracts are small. It really lets you, it's a dollar that you can start at, it gives you the ability to customize your willingness to go into that risk or learn, right? So, if I don't know enough about the Fed, but I know that a Fed cut rate has a pretty big impact. I can go put $10 in there, watch the evolution of the market. We've always said this is like being a golfer, right? You practice your rounds, you learn to get there, and then you go on to the you go on to the course and you play. It may not go great every time, but be able to reduce and hold your risk at a very small amount, that's really, really powerful. So I think that the two pieces of creating this really new interesting piece of market data but also being able to also have this the ability of small contracts for people to learn and build I think it's just a powerful combination that comes together >> somehow when I practice and when I play on the course two different things that obviously occur and it's all mental. So but I would tell people that they should go through and look at the events whether you're going to partake in them or not it really kind of gives you a broad overview of what's going on and what people are paying attention to. Um, and I do want to point out that the offering that you have, you know, if you have a gold account or whatever, you can earn four and a half% on the cash anyway. And again, I'm not going to compare this. It's a whole different market to DraftKings and FanDuel in the sense of they're the house. You're not you're just matching buyers and sellers. And so, I think it's advantageous for people that want to use event contracts in that way from an opportunity perspective to look and see this product offering versus what they may be seeing on there. And so, you know, it's interesting that you're able to go in 49 states at the moment, including Texas and California, and those are the prized possessions for those two companies. So, we talk about what's next and type of announcements that we're going to see. It's hard to imagine we don't see further FanDuel CME announcements and then DraftKings probably doing something. And you're acquiring customers 18 and over, by the way, not 21 and over. Exactly. And the question I wanted you to answer on that and sorry for going on so long here is the crossover effect getting someone onto your platform that can understand whether they want to trade event contracts or they come for that reason spreading out and trading other products. >> No, and I think that's actually the power of of our platform is is that doesn't matter what your genuine genuine first interest is. It could be in equities, options, futures or event contracts. But what we do see is that people that want to participate in the market come in and they look at it. And again, I'll use this I think is a really good example is look, people have an opinion of digital assets or crypto. You may think that Bitcoin is good or bad, but it's going to go up or go down. You can use an event contract to actually say, I believe that it's going to go above $125,000 by the end of the year. You don't have to actually own the underlying asset. But let's say you did. Well, you can go and utilize and cross over into our crypto offering. Or let's say you didn't want to use the crypto offering, but you really had an interest in it. you go over to our futures offering where we have a Bitcoin futures product. the ability to provide basically one-stop shop um for anybody to be able to participate or come into these the products to your point that's really I think the big powerful component that Robin Hood brings to it right we we find a way to build great innovative technology that's simple and easy to use and then provide you with no barriers to access accessing it whether that's on price whether that's on market access or whether that is is just coming up with that new uh asset classes for you to tra to trade >> and it's giving retail investors the opportunity to trade products that have traditionally >> Yep. been for institutional investors only. And I talked about this earlier and I'll say it again that trading through the great financial crisis. Wall Street has a great way of making it difficult and confusing in terms of credit default swaps and acronyms here and there and the fees that adjusted with it. And if you look all a credit default swap was on the mortgage companies will say our home price is going to go up or down. I mean to a degree or you know it's just an insurance policy. And so again the way that you guys have written the event contracts and I'm sure it'll keep evolving. Dumb it down is probably the wrong word, but simplify the what those futures are without seeing all these screens and all these bid and offers and all these things that are flowing because it's intimidating. Absolutely. But I think it's a great stepping stool again for educating investor. I think you're making smart and and you still got to fill out KYC's. You still got to fill out anti-money moneyaundering. This is not a oh plug and play and and not be responsible. >> No, that's exactly it. I think what's really interesting about this is you follow the same financial rigor for opening an equity account with us to trade equities or options or to do futures. But but to your point of the simplicity and and so I have a I have a daughter as a freshman in high school and she said, "Hey, Dad, what is this you're building?" Literally asked me this question and I said, "Hey, let's go take a look at the the Fed rate." Because it was all over the news talking about Powell when he was in um when he was in uh Wyoming and they were talking about his Jackson Hole speech and she's like, "Well, what does this mean?" I was like, "Oh, well, this interest rate means how much your free cash can earn, and it has a dramatic impact on the rest of the of the global economy, both for the United States and beyond." And she's like, "Okay, well, how do I understand? How does it work?" And I said, "Well, right now 80% of the people think that there's going to be a 25 basis point rate cut." And she's like, "Okay, so 89% of the people think that's what's going to happen." She I said, "Yeah." She goes, "We should do that." And I said, "Okay, we can go do that. Let's go figure." Now, the thing that just did was that just captured the mind of a of a freshman in high school who now has the first step of understanding how the markets work. So, for me, when you have that ability to create a simplistic product that then has the impact of where it's going to go, I know what comes next with her, right? The next question is, well, tell me more about a stock. Oh, and tell me how it means in for futures. And so, I just think that is a such a powerful powerful message to have there and being able to do it in a direct way. And again, that's what I think you've seen out of Robin Hood is we find ways to take the complicated and we make it simple and direct and then we provide you education so you can learn and build. That's why you come to places like this because you meet with great people who are going to walk you through product and teach you about it so that you can then figure out whether or not it fits now or not in your portfolio. By the way, and no is never a bad thing, >> right? >> Like you don't need to do everything all the time. You can do it every so often. And I think that's the powerful part. Give you the tools for you to be successful when you're ready to do it. >> I have I had I have boys. They're no longer teenagers, but if I was running event contracts with them back then, they broke every single one of them. So, it was always no. But if I had a teenage daughter, I certain events like, "Will you be getting your driver's license?" I'd probably make it 99 cents. That's that's never going to happen. Well, listen, I know you're extremely busy. It's unbelievable what you guys have developed. I can't thank you enough for coming on at this event. I know we're going to hang out later. So, awesome. >> Thanks for coming on the tape and don't go away because after this, we're going to have Porter College and Vincent Daniel join us, my partners from Seawolf Capital and fellow Big Short characters, and then my NFL picks. So stick around. >> Hey guys. Well, listen, Porter College, Vincent Daniel, great to be back in Vegas with you, Vincent. Uh, >> yes. >> So, the last time you and I were here together, um, it was January 2007. It was the infamous uh, big short scene where our partner Steve Eisman held up the zero sign, which I actually used today on my previous thing. I didn't realize I was even doing it, where we were watching the end of the world unfold in the fixed income market. We sit here today. We're at the Robin Hood conference here. Enter the mainframe. There's Summit 2025 together. We've both been on panels. We're going to get to that. What a difference 18 years makes. Here is a retail platform that from last year's summit to this is exploding. The product offering is incredible. And while we're here, they announced short selling. So, I feel like they might have done that. I think Porter last year at the conference and they said, "Porter, what products would you recommend?" He goes, "Maybe we could short stocks here." But anyway, all right. So, we're all here in Vegas, guys. Let's talk about what your thoughts are in the 24 hours since we've been here and and Porter, I'll start with you since you and I did a panel earlier together. You've been, you know, talking to the crowd and friend of the people. So, give me your thoughts here. >> Well, I certainly feel like a fish out of water here. That's for sure. >> I'm uh I used to think of myself as a young kid. I'm old. Uh we were probably three oldest people here. >> Yes. >> Um we were probably the three most bearish people here. And I don't even think I'm that bearish. And uh here we sit, all-time highs, people talking about crypto and uh you know, momentum stocks and I'm uh I'm unsettled. That's that's how I feel. >> Then you were just on a panel in there. I don't know how unsettled you were following it if you're pretty good on it. Let's talk about your panel in there because I think uh I heard you talk a lot, but I couldn't hear what you were saying. >> I did talk a lot, but it was a great panel because uh it was essentially the 22V boys, the Bushers crew. >> Yeah. So explain to people what 22V is. >> 22V is a brokerage shop. They do an incredible job. And the two of the guys up there, Jordi Visser and John Rogue, we're three strike tri-state area kids. John is is an expert technician. He does technical analysis. majority is kind of a big level fundamental thinker and in many respects probably 90% was a discussion of process current events and where we agree or disagree and how the technicals are show up on our various fundamentals. I I would say I was probably not a surprise uh different in that and I the reason why I think Porter feels like a fish out of water is we're value people and if you say value here it's kind of like a four-letter word. a lot of them don't even know uh some of the names that we're playing in which is fine that's what makes markets so a discussion up there in terms of how the fundamentals are playing out and AI was a dominant theme and how we're playing it and how the technicals look on that we actually jived on a lot of stuff versus uh opposed to each other >> but we just don't we don't play in the same sandboxes just we can't >> we can but that's just not our expertise >> well I see like if you go on the website for Robin Hood and you look at the kind of the top 15 or 20 names probably the only name that you own on there is Google, >> correct? >> You know, and I don't know where that thing sits. It's not probably in the top five. It's probably somewhere in the middle because it just now became kind of a quote growth story even though it was it was a value name. >> One sector, one sector that we agreed on all three of us and came at it from different well similar but different conclusions was China, >> right? So all of us were bullish China, Jordy because of AI, John because the charts look great and us because it was dirt cheap and it was hated. So the combination of the three of what probably our our inherent skill sets were came together. >> But to be fair, Baba's not as cheap as it once was when we were buying the stock at correct 80 bucks Alibaba in January. Correct. Yeah. Listen, that's the thing, right? So looking for names that not everybody is in, I think is key. It doesn't mean that they're value as much. They're trading like value, but you're finding stories that have some type of catalyst, right, in your in your portfolio. All right, so let's talk about what's happening in the market right now. I had you on the podcast a couple weeks ago. Nothing's really changed. Probably changed now is that a rate cuts a certainty that we can't trust job numbers. I don't know if we can trust inflation numbers anymore, but we're going to get a cut now. The question is, is it 25 or 50 basis points? So, what does it do? What does it even mean to the market if they even cut 25 basis? >> So, Danny, you're the host usually of this. I'll ask you. >> Yeah. >> Yeah. >> Right. >> Okay. >> Well, let's turn it on you. >> Did we ever believe the jobs numbers? >> I mean, >> we've been working together for a long time. When was the last time you believed the jobs? >> We're doing this for 20 years. So we would make a wager on the desk every day, every every week or every month on the jobs numbers and it would always be way off. I mean, but there are other things you can look at, right? So there's weekly jobless claims. Those are harder to kind of move around. I'm not even saying they're manipulated. I just think it's a bad data that's being gathered. And so there's other things you need to look at. And I don't like when people just trade manically off of either a better print or a worse print. And the one thing that I'm having trouble reconciling right now is if the economy, we've been feeling like the economy has been slowing. And I'll tell you, I've been coming to Vegas for many years and with the exception of what's going on in this room and I know you guys were in Caesars last night. Of course, it was crowded. There was no taxi line. It was pretty it's been pretty empty. Talking to the dealers, I always have to converse to black dealers to see if maybe they'll pay me by accident, make friends with them and so forth. Things are extremely slow. So, that's part of what's going on within the economy is kind of the the halves and the have nots and it feels that way. But the it's not working that in the stock market. It's just not translating. >> You know, interesting antidote. The the an inside joke inside joke aneote. But yeah, we don't Yeah. >> And um >> I was talking to the cabbie and I and I said, "Well, how's business?" >> Kabby. >> The cabbby. >> Okay. >> He said it was terrible. >> Yeah. >> And one of the things he said, he goes, "It's just too expensive. Everything's too expensive." And I think all of us feel that going around everywhere and you know, it's food, it's you know, anything. He goes it was he bought paid 50 bucks for breakfast the other day and he goes, "It's just outrageous." Well, that's my point about whether inflation says that it's up or not doesn't matter. It's feeling in everybody's wallet and it's real. And so whether you believe tariffs or inflation, it doesn't matter. Someone's eating it. So is it going to happen on the corporate margin level, Vinnie, or is it going to be in people's pockets or combination of both? And if it's on the corporate margin level, then pe then earnings might be overstated right now and and or maybe coming down here. And what how does that translate? I know you don't necessarily care as much on the top down, but give me your thoughts. >> No, but in general, I think it's a sector by sector basis, right? So take what Oracle said yesterday. I just heard that on on the call as to why it was up 40%. >> I mean 40% on a market cap like that's insane just so everybody >> but apparently their their backlog was the size of the incremental growth of the country of Japan right whatever whatever that means. >> Uh but on the other hand you look at a lot of consumer discretionary names. So I think you got to go sector by sector and see I think you're seeing and feeling the pain. think about being in Las Vegas and you're seeing it like all over the place here. Where whereas if you're a Google or or an Nvidia, you're not. But that doesn't for me that's not really anything new. That's been the way for I would say the last nine months. What's new to me is now the Fed's intent is to cut rates. The question is how much? And because they want to quote unquote now save the economy. the implications of that while inflation is still rearing its ugly head is going to be an interesting one over the next six months. But I just think there's some opportunities knowing that the market structure that we have right now. Uh, one of the things I went off on, by the way, we were talking a lot a lot of AI and it just start I don't know if you were at the airport or listening, it started getting I felt like Danny was starting to get a little bit too bullish, right? And then I turned on I turned on it. I said, "Okay, guys, >> AI, AI, AI, AI. Let's talk about the negative implications of AI." And I go, >> "The goal of AI, >> how dare you, by the way. I know. I know. But but but it's not really a stock related thing, but it might be eventually. The goal of AI is to lay off 20 to 25% of the workforce. >> When when Microsoft's cutting jobs, you know, there's a problem. >> Correct. >> The most profitable. >> Well, it's not a problem. That's what they want to do. >> Yeah, I know. >> Um but as I was asking people, where do we fill the void? Like if you go to the old Henry Vo Henry Ford, someone's got to buy your cars. We're just making a natural assumption that you could lay off 10 to 15% of the workforce and the revenue generation capabilities are still going to be there. Now, we know in markets like this, you bull first and ask questions later, right? But, of course, being the stupid bears that we are, I'm asking the bear question, but we're trying to keep our bearish instincts intact while while this plays out as rates are declining. >> This is just proof that just the stock market's not the economy because you can have a stock market going up because of what you're saying. There's no impact on stock prices and the level of quote the S&P 500, but you're right within the market. I know you guys were talking about today, Jordy brought up the point, imagine the Oracle market cap move today, the impact that had on the S&P 500 and yet the S&P 500 wasn't up that much. So, it tells you the bifurcation even in the stock market, but what's really happening out there? So, I know we look for ideas within themes uh to to stay with that. One area that you guys have been early on is uranium. Um, and uh, I've talked to you guys a lot about that. And it's one of these things where if you really believe in the AI trade and the power, by the way, your power bills are going up. I'm not sure if if anyone is paying attention as much as should be, but on an apples apples basis, they're going up 15 20%. I've seen the change. Um, is is that you have to power this stuff. So, you can't politically, it's unides, you can be unhappy if your if the grid goes out or if your prices go up. So what's the only thing is nuclear which has come on but because that's a 30 40year generational trade the stocks don't go up like they do on an Oracle news of just a backlog. So tell me how you guys manage through that. >> That's not necessarily true right and this gets into the intricacies of market structure. >> I just say the price of uranium not necessarily I mean Oaklo goes up. Sorry but go ahead. >> That's my point. That's my point. So, so if you think about the uranium trade, right, and we've loved it for four years, and it's funny because all three of us talk backstage about the need for power and we all agree with uranium and we didn't speak about it once on on stage, interestingly enough, >> but because it's not sexy. >> So, and it it's not touched. However, what's going up in uranium? >> It's radioactive. >> It's the mean. It's not radioactive. >> Oh, sorry, Vinnie. Yeah. >> Um, that's the point. Um, Jeez, >> now you got me angry. >> Keep going. Go ahead. >> So, so but the meme names >> in your in nuclear are going up. SMR, >> right? Ollo news. The traditional names >> are not going up. >> The industrials that are going to be producing are going up. Why? Because that's what longonies can buy. The utilities are going up that that have a predominance of nuclear. Why is it going up? Because that's what long only can buy. So, you keep getting back to this market structure thing of why things in a certain theme are going up. And sometimes when you have a theme like this or and we do this on occasion, we did it in China with web, but sometimes when you have a theme like that, like I don't know how the market's going to play out, let me just buy the ETF and make my life easier from time to time. Uh but >> I mean it goes back to our subprime days, we you know, at first we we instead of picking individual bonds, we should have just done the index, but it ended up okay for us. >> What do you mean? >> Which way if you pick the wrong index, you got Howie Ubler and you're going to get carried out. So I don't necessarily agree with that. We we did bespoke single name work obviously all those names. So the stuff that was announced last night, right, the short selling, better technicals that are available, you guys kind of use all of that. And I think I would tell people that hate short sellers, uh, use it to your advantage. You know, high short interest on names and I want to talk about a couple which you guys have. Maybe Pure Cycle Technologies, PCT is a name obviously with some reason high short interest. how that's just absolute fuel if you have a fundamental long bias on a name and you should welcome you should you should make the shorts want to short it because those are people that have to buy the stock back these aren't additional buyers they have to buy that back at one point so talk about that in your process we >> we talk a lot about AI but you know AI some form of AI in terms of quantitative trading has been in markets for a long time right and there are we know they're al we call them algos they're alos that go after high short interest stocks and so you know we Vinn and I and three of us love shorting stocks but I don't like messing around in high in high short interest right and I it's just too dangerous because there are people out there seeking to try to destroy you in those those names >> you're saying on the short side >> on the on the short side you can't >> but on the long side how short interest would be like what I was going to say is one of the things we've done over the last year and a half was pretty much change our process us to look for names that we like that have a heavy short interest. And it's difficult because in general, particularly on the institutional side of capital, the heavily shorted names are the are the pieces of crap generally speaking. But every once in a while, it might be a function of, for example, and the stock has already moved, but I'm just using it as a prior example in American Eagle, right? That was a function of bad store sales, but in addition to that, the entire institutional base wanting to short consumer discretionary for all the right reasons. Of course, they took it too far and so you had a very heavy short interest in a very in an idiosyncratic name that might have had an earnings inflection. You know, John Ror was talking about how, you know, you don't want to buy stocks in in downward trending moving averages in terms of consumer discretionary stocks. And obviously AI's killing all the jobs the job market's weak anyway. And so but you know are there opportunities in there and that's one that's you know that's where we go ahead and mine and look for idiosyncratic inflection points and try to and try to you know use that short interest to our advantage. You know the thing about Robin Hood and the access which I wish they would also get access to some research right per I think that would be really cool if they I think that's probably their next thing but at the same time I'll tell people that Wall Street research for the most part you know 22V excluded because those are economic a lot of stuff is driven by that kind of macro factors you really got to take with a grain of salt because just keep in mind the majority of I know there separation of banking and research but let's be clear no one wants to have a sell rating on Wall Street if you're if you If you sell rating, you're wrong, you lose your job. If you buy rating, you're wrong. Oh well, you know, we'll just we'll just go to the next one. So, I don't think it's ever been. So, my point is that someone like a Robin Hood or someone that can do their own work. And there's a lot of bespoke information. So, you guys over the last kind of 3, four years have worked your way into various silos, whether it's on Discord or whether it's on X and now we started a Substack together and there's a community there and all that stuff. Talk about how you kind of were able to balance I know Vinnie hates paying for anything. hate hate paying for research on the street but still maintain all that connectivity and how you guys kind of use it. >> Well, it goes back this is not new and goes back kind of 25 years to the cell side you know Henry Blahett and it was tainted research. Well, he worked we worked with Henry. So, yeah. >> And so, you know, sellside research is always tainted. And I think one of the things that that Robin Hood talked about is is trying to find, you know, the Robin Hood social getting into people, actual influencers that have good track record and are pitching stocks for the right reason. And I think there's, you know, people sort through on Twitter to try to find that, right? signal noise and and and kind of trying to distill who's providing good information, who's bei who's providing information that they actually believe they're not trading against you and it's it's a trust thing and you know trust in our daily lives is a big thing and so so should it in trading and so I think that's what we've tried to do is curate you know our own universe of people whether it's Discord, Twitter, our institutional relationships, our friends and try to put that all together and triangulate who we can trust, who puts out good ideas. Uh we also share ideas with each other and and try to push back and when you know we have an idea, we go to a lot of our friends and say, "Hey, what do you think?" And they'll give us, "Hey, this is a bad idea because XYZ or you know, we >> or everybody or that's already out there or >> Exactly." Yeah. >> You know, Jordy said something f I'm thinking about my head's still a little bit on the ground on Jordy Vis. >> No, I did. But he said something extremely interesting and and when I think about what he said was he goes, "You have access, we have access to maybe more timely information on social media feeds like Twitter or Reddit and the like than some institutional capital does or or what they've historically relied on." Now, what what I find so interesting about that is Jordi and John both provide the institutional research, right? So he's essentially saying there's someone out there better than us, right? So I said therefore I don't have to pay you, right? Um as a result, but it was such a truthful statement that he made when I was thinking about it. I was like, "Wow, he just said there's there's better stuff." And I think that's what technology a >> different type of research. >> And look, as I was going to say it, that research on the institutional side, which some of you may or may not be privy to, caters to a much different objective. They're usually catering to a very high-paying hedge fund V targeting client that has a different objective and return thresholds than you are. They're more much more interested in meeting every management team 10 or 20 times a quarter and then going out to dinners to determine the crowding factor of these things so they can make bets on the quarter. That's not what we're doing. >> Right. There's also a different type the sell side trying to distill what the economy is doing, right? because we we start Danny started off but this uh podcast by talking about how you know we had we've had fake jobs numbers for 25 years and you know we revised it down to a almost a million jobs uh just the other day you know the the PPI came out today looks like it was totally doctorred as well and so I think that you know the these um >> you know these institutional shops provide economic research it's it's hard to figure out what's going on right And and I think the three of us have been talking about the jobs market, how it's very weak, and they're they're probably going to have to cut in September, and now it's actually worse than we we thought it was, but but inflation's still hanging around. So >> that was my question to you guys a few minutes ago is what a rate cut really means. So there are definite impacts. You have, you know, helock home equity loan, it'll drop it. 20 certain loans, it'll drop it. But what's it really going to do other other than it's symbolic in nature? Certainly there's some impact, but what are you guys thoughts? cuz I people I think it's going to happen and maybe it's a sell the news event because what happens after that obviously the language associated what's attached to the cut that day I get it but >> well what's Vinn what's the most important part about rate cuts >> it basically lowers the borrowing cost of incremental mortgage payments auto payments >> and who's the big guy >> treasury I mean oh god yes and and >> they're the one who need >> remember that 37 trillion that you mean that thing >> they need the lower rates the most right because it's it's such a big uh percentage of of you know the budget deficit. I would say >> just to keep this apolitical >> obuscation and data engineering has been a bipartisan tool by both parties. Sure. >> They've they've used it to their advantage and I just think we're seeing this right now in that the intent and desire for Bess and Trump and co right now for the time being is to try and get rates lower by 100 to 150 basis points. That's what they need. If they don't get it, then you're going to continue to have massive headwinds for the consumer. So, to me, it's it's kind of like a tugof-war race as to how quickly that happens. I don't know the answer to that. >> Well, the 10-year yield is kind of the universal thing that's used that kind of is the report card, right? Or calls it out. So, if the world believes that we're cutting rates too much and that there's actually inflation in the system, it's going to rear its head in that. And then you have a situation where I have no doubt quantitative easing is coming back because they're going to throw everything in the kitchen sink because they can't let it go. They can't let tenure yields move higher because it will slow everything down to a point and we've seen in the LA how financialized our system is that every time the 10ear yield now it seems like long time ago and far away 5%. We're near 4% basically at this point which is hard to believe but it remains to be seen. I want to go back to one thing that I glossed over that about buying stocks in general and >> I think one of the great tools that everyone can use for themselves is if you have interest in a name or a sector buy a very small amount to start. This is not an investment recommendation. I'm just saying because you know if you have any even if it's $10, you're going to do work. you're gonna force yourself to do the work and something that you guys have done like all right we think it's good let's buy a little bit and keep going and you get confirmation or you don't you know worse so with the wear but unless you're invested in something you don't really take the time to kind of look at it >> that's usually how we do it we always put some sort of starter position on first right put a starter position on feel it out do the research and then we either scale in or or sell it and so you know taking small tax loss is not not the worst thing in the world it's it's not a big deal at all honestly. But, you know, as we do more research, we can uh, you know, leg into it. And you you we're trying to buy stocks for a year, >> right? And we're trying to produce long-term capital gains because it's just a better way of building compounding wealth, right? And so, you know, I honestly, you know, like the like Buffett that his his preferred time horizon is forever, right? And so if you can if you can buy stocks with a super long-term time horizon, um that that's the that's the goal. >> You Vinnie, you you talked about FOMO, you know, fear of missing out up on the stage back there. I heard it. And you know, it's not about being bearish. It's about being practical or logical in the sense, but I do worry that when an open door moves from 1 to 7 that somehow a higher price begets a higher price. And you just can't get caught up in that. I'm not going to not try to make some money and be like, "Oh, you're a hater." No, cuz we know how it ends. Whether it's tomorrow, a week, a month, or a year, fundamentals, we're in Vegas, cards speak. You want to play poker in the poker room and you have 27 offuit and you want to go up against Helm Youth and start raising, you're going to get called eventually. You can have fun at the table while you're sitting there. Maybe you can bluff your way out. But that's just something that I think my dad was a finance professor. Benny, you're dressed like a prof. You look great, by the way. You're like professor. You teach at Bingmpington. We we did a Texas teaching at Austin. You're doing some of this stuff now. We like helping people and it's not about oh the three old bears. Yeah. >> Well, one of the great things about being here, this is the second year that we've come here. First time in in Miami, >> by the way, in Miami, Vegas. What could be the third city? >> I don't know. We'll see. Um but the great thing about it is you get to speak to a lot of different investors and look, we have different styles than the majority of the people here. Uh, but I like to hear their style, their process, their strategy. And and when you hear names of that ilk, there are more than the average people here that will play the opens that the names we would never even think of playing. And the only thing I would I would strongly suggest is don't get greedy, right? Like like you're you're playing with fire, right? Like that we do the analysis on some of these names. They're not worth where they're trading if liquidity wasn't going in their their way. But I understand it's it it's probably fun to make a heck of a lot of money 25% on a name like Open because some dude is on Twitter trying to get Drake to be the CEO. It's just not what we do, right? >> Um but I get it. >> But honestly, you know, I know people like to talk about Robin Hood and retail platforms and people owning the top, you know, seven, you know, most highly traded stocks, but we had a conversation with a guy last night buying Ford. Yeah. Yeah, >> it was a very intelligent conversation and you know the guy knew his fundamentals. you know, uh, another investor was debating DraftKings with us and he had some very excellent points. And so there's there's, you know, I I think that the, uh, the knowledge base of a lot of these retail investors is very very deep and you, you know, you can get a lot of research, you know, for free these days, right? And and Robin Hood gives you a lot of research and they have a pretty interesting AI tool these days and, you know, chat GBT. So I think there's um, there's a, you know, people are doing their research too >> as a result of that. Should we open up the mic to Q&A for retail if anyone wanted to ask a question? >> Sure. Well, let's go. Before we do that, we're going to do this, but I got to get my NFL picks and then we're going to do it. >> Okay. Sorry. Sorry. Sorry. Sorry. >> I'm in Las Vegas. So, I don't know if anyone knows that they listen on the tape. I've been making picks for years. Amazing first year, like like 80%. Okay. Second, third year made great runs in the playoffs. But anyway, so Vinnie, last week I took your I know >> your Jets. They covered, but they didn't. So, last week I was two and one. All three games were within a half point of the spread, >> which tells you go to the event contracts. Don't mess around with the Lions cuz it can be really tough. But I'll get to the Jets in a second. So Dallas at home against the Giants laying five and a half. Dak Prescott looked great. This is going to be Russell Wilson's last game as an NFL player. I believe they're going to send him out. You know, this I think this is it. Jackson Dart era will begin. I think Jerry Jones is going to treat this like a college football game. >> By the way, your new favorite uh Blackjack player, Bob Ax, is a massive Giants fan. I just >> Good. Well, okay. We'll talk about him later. But anyway, so take Dallas, lay the five and a half and then the Jets >> getting either six and a half or seven. By the way, take the seven, even have to pay a little bit extra on the vig to do it against the Bills. Jets look great. They should have won that game. Bills have to be emotionally exhausted after that win. Maybe there's a lot of points in this one. Who knows? It's been such a weird season already. Maybe it goes low scoring. I don't know. But Jets aren't going to I just think they might win outright. But I like the Jets. Vinnie, I'm sorry to do that to you again. you know, plus seven, but you know, and uh Axe, maybe you could Bob Axe is in here. I've been playing blackjack with him a little bit and uh they sell those cards, you know, where you're supposed to tell you what to do. You take without amazing hedge fun manager, but not quite sure why it doesn't translate. All right, let's go to questions that you guys have. So, >> first comment on your NFL picks. Uh I'm from Washington. Take the um Packers against the Commanders money line tomorrow. >> Interesting. Okay, >> I like that. Um so, going back before you guys made it break big, right? What gave you conviction to stay with a trade, right? I mean, the old saying is markets can stay irrational longer than I can stay solvent. So, if you have conviction in something, how do you know to stay with it? You know, it's interesting. I I went back and read some of our old letters from 2006 and 2007. We were all over the fundamentals, right? We wrote about it. We wrote about it a year before it happened. And so I think trust your gut, trust your research and uh you know try to bounce it off as many people as you can open open discussions. I think that's the best way to to flesh it out. That's >> and the only thing I would add is if something changes in the fundamentals, if the story changes, don't move the goalpost. If if everything's consistent with what you're seeing and the price is changing, then reunderite and maybe you add some on on material or or somewhat weakness. >> It's a great question and I would add this part. So we see here today with the kind of the top seven names really don't have balance sheet issues for the most part. Um back in 2006 and 7 it was finite in terms of if there's going to be defaults these companies are going out of business period. So no one was rescuing them. Yes various government programs came in. You have to respect the tarp and tal and every acronym that they threw at it. But it was just math. This isn't math right now. So shorting a stock or selling a stock on a price earnings multiple is not a great thing. But shorting a stock that you know is probably going to go bankrupt because they have balance sheet issues and debt coming due probably is. So that's what gave us conviction. >> Hey guys, one of my favorite scenes in the movie is when you guys go to the American Securization Forum in Vegas. So, I just want to say I don't know if that really happened, but uh >> yeah, I just mentioned it happened. Uh not only did it happen, um Steve Eisman, played by Steve Carell, played by the name Mark Bal, held up this in a meeting about mortg mortgage delinquency rates or loss rates, sorry, mortgage portfolio. And I we were supposed to be hiding in this fixed income conference because we were equity people. And so it kind of exposed us a little bit messing around. But that one that was probably the most accurate scene of the entire movie. We didn't get chased by an alligator. No, that's the only thing that wasn't true, >> right? And then the Moody's meeting we had ongoing with the rating agencies. Those happen in various cities and place, but that was true. Surreal >> honored to be here with you guys in Vegas. Uh questions for your China trade. Uh just wanted to note Chinese stocks have been washed out for a while. Um just wondering what green lit uh your entry on that trade. Can you walk us through uh the play and how you guys >> Sure. You know, one of the things is trying to understand sentiment, right? and and and we were looking at how Trump was treating the Chinese and and his change of tone in terms of the harshness on the ch because it's it's it's both administrations, you know, the Biden administration and the Trump administration had been very very tough on the Chinese and you can kind of see how that changed. And so, you know, we we first got into because they were extremely cheap. You know, we were buying BU at essentially cash value, right? and and uh and Baba was trading at four or five times EVA. So that's a starting point and then you could see the sentiment shift and and uh the tone change shift and so and and they were China was doing a lot more stimulus in terms trying to stimulate the consumer economy and so kind of put a mosaic together. That's that's how we try to do things. >> Hi, my name is Amea. I'm from SF. So quick question. So from the retros perspective, right? um how how do you suggest like um we operate more like a hedge fund like for example right um retail stop loss is usually like hedge funds entry right I think it's a very common phenomenon so my question is like um do you have any like you know advised risk uh management strategies and the other question is basically like you know um you know how do you like define stop-loss take profit uh do you use like technical analysis flow or some other thing like I'm kind of curious on how I can let my winners run and not cut my uh cut like cut my losers but not cut my winners. Right. That's the common uh like problem I face in my trading. Thank you. >> So So what we like doing and I think I advise a lot of people to do is you take a dollar amount than you're comfortable losing. >> Yeah. >> Right. If if you think you know five grand I can't take any bigger losses on on if I come back in a year and say wow I I lost 25 grand. That would be a disaster. But I but five grand I can live with right and so take a dollar amount and to say on an individual trade I'm willing to lose that. And I think, you know, when it hits that level, you're gone, right? Because otherwise you you've sized it incorrectly at first, right? It went down quicker than you thought. Um or or just or things went against you. And so that I like picking a dollar amount. And so when you you when you review history and you know, you don't have a a big name crush you, right? Because it's the it's the big losers that really hurt you. And I would add to that that there's an emotional toll and an opportunity cost. And more so the opportunity cost of getting yourself, you know, wrapped up in a position that you can't you spend all this time on a name that you can't figure out. You're probably better off finding new names the same energy you're going to put in and cutting loss >> and you can always come back. You know, it's a it's a month it's a month a cooling off period, right? In terms of the the the wash tail rule, right? So you sell it. >> Now you're giving tax advice. >> Well, yeah. This is not tax advice nor investment advice, >> but you know, but you you take your loss and you can you can look at it again in in 30 days, >> right? That's what we do. >> Good stuff. Well, thanks everyone in attendance here. Uh this wraps up our On the Tape podcast in Las Vegas. Great to be with you guys, Porter and Vinnie, and great to be at the Robin Conference. So, thank you so much. >> Thank you. Thank you.