Roaring 2020’s Stock Market Rolls On Into ‘26 | WAYT?

Summary

• Market Outlook: Ed Yardeni reiterates a bullish “Roaring 2020s” view with an S&P 500 path to ~10,000 by 2029 driven by resilient growth, robust earnings, and productivity gains.
• AI Theme: AI is framed as a broad, economy-wide application boosting productivity, with debate over Google’s TPUs vs NVIDIA’s GPUs and depreciation concerns fueling valuation shifts.
• Mega-Cap Dynamics: Notable dispersion within the Mag 7 as Alphabet outperforms while Microsoft and NVIDIA face pressure tied to OpenAI-related narratives and supplier risk.
• Digital-Asset Treasuries: MicroStrategy (MSTR) discussed as a key Bitcoin proxy and hedging vehicle; potential MSCI index exclusion is a near-term risk while shares trade near/below underlying BTC value.
• Healthcare Leadership: A sustained Health Care rotation highlighted, led by GLP-1 drugs (Eli Lilly, LLY) and strong momentum in Life Sciences Tools & Services (Agilent, A), with fundamental earnings drivers.
• Key Companies: NVIDIA (NVDA) vs Alphabet (GOOGL) valuation reversal, Microsoft (MSFT) as main OpenAI proxy, Apple (AAPL) back to highs amid shifting AI narrative, and Zoom (ZM) rebounding on better enterprise metrics.
• Macro Supports: Boomer spending, improved financial plumbing, and the Fed’s crisis response toolkit underpin resilience; drawdown risk is framed as milder absent recession, per historical context.

Transcript

[music] Okay, ladies and gentlemen, welcome to your favorite live stream, podcast, what have you on uh stock market, the economy. My name is Downtown Josh Brown. If you're here for the first time, [music] my co-host is Michael Batnik. Michael, say hello to everyone. >> Hello. You know, this is more your beat than mine. I usually don't do this, but I got to say, I think we're doing some of our best work. Like, this really is the best show in the world. I said it there. I'm comfortable. >> It's true. >> I appre I appreciate uh the degree to which you believe in what we're doing here. Um guys, the live uh YouTube last week, it took a while, but it took a while, but I'm coming around. >> You're finally with us. All right, guys. We hit a record number of uh viewers live I think last week. Um [music] I see the chat is full today. Say hello to a couple of people real quick. Chris Hayes is back. I see Georgie in the chat. Um [music] Riley Anderson, Kelly SF, what's up? Wildcat Creek Cattle gave us the P sign. How are you? Everybody's talking about my quarterzip. This is how I always roll. I've been I know it's trendy now. I've been wearing quarter zips for at least 25 26 years. [music] So, it's this is not me being on trend. This is just what I am. Um Joe Altoro says, "What's up, Pounders?" What's up? All right, we have a sponsor. Let's uh let's do a quick shout out. Better Advisor Solutions. Michael, tell us about Betterment. [music] >> That's right, Josh. Today's show is brought to you, in fact, by our sponsors at Betterment Advisor Solutions. If you happen to be thinking, "There's got to be a better way to grow my RAA," you're not alone. With Betterment Advisor Solutions, we do the heavy lifting so you can focus on what matters most, your clients. From improved service that makes asset transition smoother [music] to fast, paper-free on boarding that delights clients on day one. We've built a digital first platform designed to streamline your operations and make life easier. Now, if you're thinking, "Wow, they take the paper out of paperwork." That's right. Grow your raia your way with Betterment Advisor Solutions. Learn more at >> Learn more at betterment.com. Advisors.com/advisors. >> Come on now. >> Investing involves risk. Performance not guaranteed. >> All right. Michael has something he wants to get off off his chest real quick >> about uh the Warren Pies uh episode that we did last week. What did you want to say? >> All right. Getting off my chest is a bit strong, but I'll say this. had you asked you and me and most people at the end of Thursday after a day where the NASDAQ I'm sorry the S&P gapped higher by 1.5% closed down by as much very unusual on great earnings I would have said yeah probably we go lower the next few days at a bare minimum if you told me that the next 3 days the market would take back all of the losses that you would gain 3.5% and have the best 3-day session since May I probably wouldn't have believed you and the market if if you're not humbled by this market. You You're You're a psycho. >> I'm so glad you said that. Um and while I talk, just put up this chart that illustrates this reversal. >> It's unbelievable. >> So, like we're looking at the last few candles, the last few days. That big red one is uh Thursday. Uh chart off. So, the point is we're talking with Warren Pies on Thursday morning. The show is going to air Thursday uh a f the next day Friday and we have no way of knowing that we're going to have a gap up a crash and then the following day we're going to gain start gaining most of it back. Very difficult to do a market related show on any sort of delay. Uh but we sort of got bailed out. Oo >> is that >> who who could that be? >> No. >> Oh my goodness. >> Wow. We have we have leg living living legend Edard Denny in the house tonight. This is so exciting. >> You know, it's such a coincidence that you stopped by because we were going to talk about your research over the weekend and it's [laughter] >> a coincidence. >> It's so much better to have you here to do it. I wanted uh Ed, if you don't mind, >> without making you blush, I want to give you your flowers. I was I was saying this weekend um to a couple of people and I said to you as well of all of the research that I read and it's pretty much everybody. you have been the most consistently right um in the post-pandemic period talking about this roaring 2020s concept and it's almost note perfect the way it's played out and I think you drew that parallel between the Spanish flu of I guess 1918 >> okay and then the recovery from that leading into this roaring 2020s and they had back then the radio and some other technologies of course we have AI but it's just remarkable and you've stuck to it. Um, you never declared victory. You never said, "All right, I got it right. It's over." You stick, you've been sticking with it and it sounds like you're sticking with it for 2026. >> I'm definitely sticking with it for the rest of the year and going into next year and then through the end of the decade. I'm talking about 10,000 on the S&P 500 by the end of 2029. And that's only likely to happen if the economy remains resilient as it has for the past several years, absorbs shocks shocks remarkably well and uh that'll only happen if uh earnings are remarkably strong. Uh so that's my base case. I mean I can see alternative scenarios. Uh you know I'm I'm not saying that things can't go wrong but I have been seeing a lot of similarities with the 1920s. 1920s ended badly. I I don't think this is going to end badly. I think I'll be talking about the roaring 2030s. So, uh, no no rest for the weary. >> From from your lips to God's ears, roaring 2030s. We very happy with that. >> To what do you do you think the the economy owes um the stock market for its resilience? Is it a combination of the hyperscalers as well as fiscal accommodation? like we've had so much [ __ ] thrown at us over the years and we just continue to grind through. Not perfect, of course. There there's pockets of weakness. Um you don't have to squint too hard to find them, but by and large in the aggregate, we're going up and to the right. >> Yeah. I I think the uh there are a few reasons why the economy has been so resilient. Uh we had a terrible great financial crisis uh back in 2008 2009. We did restructure the banking system. the the credit markets develop some very important shock absorbers like uh the uh the funds that are always looking for distressed assets. U uh when a private credit blows up, it blows up in a diversified portfolio. So somebody's going to get a haircut on their rate of return, but it's not like the banking system suddenly goes into a credit crunch. So I didn't think we'd have a credit crunch. Uh and we didn't. We had a financial crisis in 2023 that lasted what about one Friday and then by Monday it was >> weekend. >> Yeah. The Fed is really good at playing whack-a-ole [snorts] in the financial markets and throwing liquidity in the Fed put. They've they've kind of become real masters of the Fed put. Uh the other important development which I think I I got was the uh and I have an inside track on this. I'm a baby boomer and the baby boomers are all my friends are retiring. I'm not. I'm still working for a living. I got five kids and still help helping them out. Uh but my friends who had maybe two kids, our young adults, they're all cruising around now. They're going to uh restaurants. They're checking out where they care pro their healthcare provider just to make sure they can climb Mount Machu Picchu on their next uh vacation. And they're spending money. They they have $80 trillion dollar of net worth. It's the wealthy. >> Just your just your friends. just my friend. >> So they're they're not bothered by higher interest rates. >> They love them. Are you kidding? They absolutely love them and they love the the fact that they're they can't spend money fast enough because as they're spending the money, they keep looking at their net worth and it keeps going up with the stock market. So again, it's the wealthiest retiring generation ever. And by the way, from my uh observations, a lot of my friends are helping their young adult kids with things like mortgage down payments, mortgage payments, uh helping out maybe with the grandchildren's after school activities. So, a lot of that just isn't really being uh captured by the standard talk about, you know, there's only one kind of consumer and uh not really understanding the varieties of consumers. And then as you mentioned uh the uh I've been talking about the dig digital revolution. The digital revolution started in the mid60s with the IBM mainframe and it's evolved to the point where we now have AI. To me AI is just an amazing application. It's kind of like you know we had Word and Excel back in the late 90s and once everybody used them it was like is that all we have? Well, along the way, we've got a lot more applications, but AI is an application that lends itself to just about every business and all of our per personal lives. And I think it's just kind of starting and um uh you know, technology is something where you can rent I mean when you go on the cloud, you can you can rent Microsoft uh office now and uh you don't have to upgrade it. You can have one IT person working remotely. So all these factors have been very uh conducive to the resiliency the economy and oh by the way we do have a rather large federal deficit and I've been telling people I'll worry about it. I'll worry about the debt. I'll worry about my friends of the bond vigilantes. I'll worry about all that when the bond vigilantes worried worry about it. Right now the bondless 4% is pretty calm. >> Yeah. We we heard a similar sentiment from uh Steve Eisman who basically said, "I'm on Wall Street 35 years. I've been hearing about bond vigilantes the entire time. The deficit, >> I I'm sure it'll matter one day. It's not going to stop me from investing today." I want to hold Hold on, Ed. Ed, you invented that term, did you not? >> That's correct. Back in >> bond vigilantes. >> Yep. >> Um so that's how that's how long people have been worried about uh the bond vigilant. I have a shelf uh uh just on my bookcase just devoted to books from the 80s and particularly in the 1980s you things like you know living beyond our means the debt bomb I mean this when I when I wrote my piece in July of 1983 and introduced the concept of bond bond vigilantes I said they're worrying about $250 billion in annual re annual deficits now we're talking about one and a half to two trillion >> yeah um I want to go through some of the specific things that you said to set up this roaring 2020 scenario. >> Um, and I guess and and I have your charts, so we'll I'll I'll set you up and you could explain what we're looking at in the chart. To start with, >> uh, S&P 500 operating earnings rising from 268 per share this year to $310 next year, >> right? >> $350 in 27. >> Mhm. >> $400 in 2028, $450 in 2029. This will require the S&P profit margin to rise to record highs in the coming years in response to faster productivity growth. And John, I think we have that as figure eight. >> We could want to pop that on screen so Ed can react to it. >> Yeah, that's it. Yeah, I just I just wanted to show that uh I think a an admittedly optimistic but I think a realistic scenario that could get us uh to the kind of earnings level that would justify the S&P 500 climbing to to 10,000. Uh I think by uh 2030, which gets us into the next decade, we'll get up to $500 a share. the market discounts. It looks forward and if the market gets kind of as optimistic as I do and in in 1920 and sorry in 2029 starts looking forward to the year to the new decade I think we'll be discounting something like $500 a share in earnings and you multiply that by a PE of 20 and you get 10,000 >> 10,000. Yeah. >> And where do you get those numbers from those operating earnings? Well, uh, basically I, uh, extrapolate what the growth rate of earnings has been in the past and it's usually, you know, six, seven, eight% is the kind of trend growth rate that we have. And the question is, it is it going to be six or is it going to be eight? It's uh, and you know, I've got more the optimistic side. So, you know, I I start out with a projection of revenues. Then I come up with earnings and I look at what the implied uh profit margin is and say well is that reasonable and so I think this is a reasonable scenario and again I'm not trying to pretend that things couldn't go ary but so far so good. Uh figure 10, John, forward PE of the S&P will range from 18 to 22 over the rest of the decade. Right. >> I I feel like there's a portion of the investor population, mostly professionals, who just feel this like almost magnetism toward a a 15 PE, a mythical PE that I of course we could see it. We we had >> we temporarily had it in 22. And if we have a recession, you'll definitely get it again. >> But abs absent that, like 18 to 22 seems to be like the new standard range. And I hate to say that out loud because that's probably >> we don't want we don't want to use that uh curse. Uh you know, we all know what it is, but >> permanently high plateau. We don't want to say things like that. >> You know, this time it's different. But uh look, it all depends on what you think about uh the prospects of a recession. Uh the economy since the beginning of the decade has absorbed a lot of shocks. As I said, uh the pandemic uh the pandemic was immediately followed by a two-month lockdown causing a two-month recession. The two-month recession was followed by social distancing which affected services. Social distancing then uh was followed by well, we had a war. Russia attacked Ukraine. So in 2022 2023 we had a spike in inflation because of the war and because of supply chain disruptions. The Fed came in and went from zero to 550 basis points on the Fed funds rate. Everybody said that's definitely cause a going to cause a recession. I disagreed with that. I said the Fed's going from zero which was the abnormality. Five and a half% wasn't the abnormality. And I I I kind of took took a stance that the economy would be resilient. And then what? Well, then uh the you know nothing happened uh no recession when the Fed raised interest rates and now we've had tariffs. So we're we're testing the Smooth Holly thesis that you know the idea that this is going to end badly the way the n 1920s ended which was really something that happened in 1930. Um and here we are with the economy at an all-time record high. The challenge today of course is the labor market. Uh kids coming out of college are finding it very very hard to find a job. I think part of that is AI. The baby boomers boomers are retiring but not at 65. They're kind of hanging around and that's creating uh fewer maybe job openings. But whatever is the problem in the labor market, um I think the fact that GDP has been so strong is proof positive that uh we're kind of in a productivity boom. And that's the whole thesis of the roaring 2020s like the 1920s is that there's a technology-led productivity boom. Uh which um generally speaking there's nothing wrong with it. I I think maybe there could be a couple years where people have to kind of reskill themselves to find jobs. Uh but uh productivity is like fairy dust. It's better growth uh lower inflation uh better uh real wages and uh a a better profit margin. Yeah. And and I think um just that concept of having the boomers still living and spending in their 70s as though they're in their 50s. Yeah. >> Um and supporting grand grandchildren like a 30 like people in their 30s would have supported their own children. Correct. >> That's a really big element especially in places where we live like uh like Long Island Ed. And I think that's I guess it's a demographic thing that was hard to foresee 15 years ago but that's sort of how it's playing out. I mean, look, there's no doubt that there is an affordabil affordability issue. It's become a hot polit political topic of late. Uh we know that uh you know, you go out to a restaurant, you go to a grocery store, you buy I mean auto insurance, I got uh five kids and the the youngest ones uh are in their 20s and insurance just for one is $4,000 a year. I mean, there's no way kids can afford that. So, I think there's a lot of parents helping out uh their young adult uh kids. Um and you know, that's kind of helping to offset the affordability issue for some people. Of course, there's a lot of people that are are doing very poorly here. Uh but from a macroeconomic standpoint, when you add it all together, the consumer on balance has been remarkably resilient. >> I want to um get to the result of the exercise. Figure 11. uh you have the S&P 500 on track to rise to 9,000 to 11,000, >> correct? >> Based on the earnings expectation and the uh potential multiple that we talked about by the end of 2029. Um so that's 10,000 by the end of the roaring 2020s, which you note would be up from 3,230 at the end of 2019, representing an increase of 210%. And you ask rhetorically, is that amount of gain delusional? Not really. Since it was exceeded during three of the previous decades, >> since the 1920s, um there have been three roaring decades in which the stock market gained over 200%. So what you're laying out here is not only feasible, there's precedent. >> Yeah. Take a take a look at Can you flash uh figure 12 on the screen? >> Uh figure 12. There we go. uh walk us through this. >> Yeah, I mean those straightforward. It's uh the uh the decade percent changes going all the way back to the decade of the the 1920s and uh we've exceeded 200% uh you know a few times here. We did it in the 20s. Uh we we did it in the in the late 40s. Uh and then u we >> almost almost did it last decade. >> Yeah, almost did it last decade. So, um, the [laughter] the bottom line is that there's nothing unusual about, uh, a roaring stock market. We've had it before. And, uh, just because I make the illusion to the roaring 1920s doesn't mean that it's that unique. >> I I want to I I want to finish by just telling you it's so refreshing to listen to people of your generation um, who are optimistic about the future. I think there's sort of like a a disconnect sometimes when you're talking to people who have seen a lot of history >> and you would expect them to be more optimistic given everything that they've witnessed in their lifetime. >> But it goes the other way. In in many cases, they sort of feel like the the golden era is long gone and all that's ahead of us is uh misery and and strife and class warfare and uh you know all the problems that we read about each day. But you have very notably gone the other way. You've been right from an investment perspective and I think you've sort of served as a beacon for people that want to hear somebody with wisdom and experience say something positive. So on on behalf of uh all of our viewers and listeners, I want to say thank you for that. Can you tell us about um quick takes and why people should check it out? And we're going to we're going to post a link to that while you're talking. >> Yeah. Well, on on Wall Street, I basically provided uh macroeconomic and strategy research to uh institutional investors. We had a lot of individual investors, financial adviserss asking us for a product for for them. And so we created quick takes. It comes out almost every single day. And uh it's h basically uh it's very market oriented. It's you know, we all get know these macroeconomic indicators and political developments occur. And what we try to do is relate them to the market. How's the market? Same thing. You do you do you both >> um but you know we just put in some more charts in it and u kind of have a a basic theme that uh we're we're pushing. So yeah the anybody who wants to have a look just go to your dennyquicktakes.com and give it a try. >> All right yordennyquicktakes.com check it out. I read it whenever it hits my inbox. And uh once again, Ed, on behalf of the viewers and listeners, thank you so much for surprising us tonight and walking us through your your uh your take. We we very much appreciate it. >> Thank you. Great. >> All right. Happy Thanks Happy Thanksgiving, Ed. >> All right. Wasn't that Wasn't that a delight? Wasn't that cool, >> Logan? Nice to hear from somebody with an optimistic take. >> I agree. um any any is any of that something that you would uh I I don't want to say like take issue with, but um if you were to push back on on that, I have an idea of where I would push back. Where would you where would you if if anywhere? >> I do think the S&P is going to 10,000. So, there wasn't anything that he said that I thought was so outlandish, but I'd be curious to hear your take. I think that um a market or economic or both sort of event could just delay the timetable. I do I do see think I I've said to you for the last 10 years that I've known you, I think I'm going to live to see Dow 100,000. So like S&P 10,000 and we're at seven is not so outrageous. Maybe the timing doesn't work and it doesn't happen by the end of this decade because we have like another bare market year like a 2022. Perfectly fine. I don't need it to happen by the end of the decade, I guess, would would be my comment. And I I don't think that Ed would disagree. Um, we have these like minor meltdowns. They don't feel minor in the moment. I shouldn't minimize the impact of them, but I feel like those just delay the the inevitable. And so if we don't if we don't get S&P 10,000 by New Year's Eve 2029, um I think ultimately it comes anyway. >> Can I tell you something? >> Go ahead. >> The the S&P is where right now 60 >> 6800 or something. >> Okay, so uh 6.8 to 10 in four years is what? >> Kager 6765. >> Okay, so check this out. Dude, it's way less than you think. It is survey. It's 10% a year. I mean, it's a lot. It's a lot. It's It's above average, but it's not outrageous. >> Barely. It's barely above historical average. Literally barely. >> All right. So, you So, let me get this straight. You pinging this for us? >> Personal guarantee. >> Uh, listen. I could I could What's the Tommy boy line? >> Whatever. You know what I mean? >> The Tommy The Tommy Boy line. Which one? >> I could [ __ ] in a whatever and guarantee. >> No, no, no, no. You could get a good look at a t-bone by sticking your head up a bull's ass. >> No, it's just or you could just take the butcher's word for it. >> That's what That's what it is. That's the >> That's the line. >> No, I know that is a line. That's not the line that I'm thinking of. That's the best line in the movie. >> Um anyway, Ed is the man. Let's move on to Let's get bearish. Um, [laughter] so it h it was we are three weeks removed from Sam Alman um inadvertedly pulling the pin out of the grenada and chucking it into the market. Thanks a lot Sam. >> Thank you Sam. >> Although um although I guess uh the wall of worry that he introduced uh I think ultimately is a good thing. But throughout this chart, so since since those comments, OpenAI's major suppliers, this is from Sherwood News, investors are under stress. We're talking about SoftBank, um, Microsoft, AMD, and Oracle. I just saw after the close, uh, Dear Jabosa posted another chart that was similar showing Google exposed infrastructure versus open AI. And the divergence, holy mackerel, since he said what he said has been pretty incredible. >> Yeah. So, it's like a it's like this interesting thing. It's like this Game of Thronesesque like the opening montage of Game of Thrones that they play during like the opening credits with the different kingdoms rising up. >> I love it. >> And then you think about like there's the Kingdom of Alphabet and all of the companies that are in deals with Alphabet, which Nvidia does supply them by the way, which we're going to talk about at the end of the show. Um, but like this this like idea that the kingdom of Alphabet is currently rising and you know, we talked about this with Kramer uh the other night like we don't have a stock price for Open AI. I do not think that would that stock price would look like uh Alphabet right now. I just don't and I can only% >> right. I can only judge by the last few companies that open AAI has signed these massive bilateral deals with their share prices are behaving in such a manner that tells you the buy side doesn't believe the sell side that these earnings from these deals will actually materialize. That's it. That's the it's a huge dichotomy in the market right now and to ignore it would be sort of ridiculous. Well, I wish we had that stock price. We don't. >> Dude, did uh how much did Meta fall? Meta was down 25%. Nvidia as of this morning at the lows was down 16%. Coreweave as a proxy, obviously a much smaller company, but forget about it. I think I think OpenAI if it was public is down at least 30%. Microsoft, dude, Microsoft is the ultimate open AAI proxy on the [snorts] publicly traded stock market. Just look at Microsoft versus Apple price action wise. These are effectively these stocks became sort of interchangeable as the two largest uh most earnings reliable uh mag 7 names and Microsoft and Apple do not look the same. Microsoft is suffering as a result of being the company that is currently consolidating OpenAI's losses into their into their uh quarterly statements. Like they they're on the hook. They're they're working with them. They're benefiting, but then they're also on the hook. And >> John, throw up that Mag 7 rolling six today. Skip the next chart to just because we're on this topic. Look at this. So, shout out to Sean who was able to uh >> This is a great chart by Sean >> to to figure this out. This was not easy to make. So, we're looking at the correlation within the Mag 7 over the last 60 days. And prior to the most recent episode, they were all they were all moving in unison for the most part. It was one big trade. and then the something changed and they're all being treated very differently as they should. It's great. >> Um, just looking in the chat, a lot of opinions on this topic. [snorts] Uh, C. Paul Breezy says, "OpenAI publicly traded stock would be the TE-OU version Microsoft." That might be extreme. Um, Georgie says Nvidia is an 8-year roller coaster. Yeah, mostly up with some spills along the way. Uh, Apple wins all the time according to Mark. I don't know. Look, I I think um I think you know what the the really interesting question is? Does that dispersion continue into year end or is now the time you pull the trigger long on the lack of seven? >> I think they they all catch a bid. >> So do I. >> Yeah, it's been the history. >> Listen, the history people are still underweight. There's there's a melt at the year incoming. I think obviously you know who could be wrong but I think that one thing that is is not we're not talking about anymore you don't here's what doesn't happen during a bubble you don't get multiple compression throw this chart up please from from chart kid >> this was the forward PE of tech on uh before Nvidia reported it was 32 times and then a day or two later uh I'm sorry a month later my bad my bad this is a month later a month later it was down to 27 times this is a this eight. >> Let me stop. The the the gray dot is the new forward PE. >> You don't have to stop. That's what I was saying. Chart off. >> Well, I'm trying to figure it out. >> No, you don't have to figure it out. It's self-evident. Everyone who's everyone who's listening and watching Everyone who's listening and watching, they're very smart. They're very smart. Josh, >> I need a second. >> We had a We had a You are a slow visual learner. I've always said this. This is a healthy and now we could say it's healthy in hindsight because we've taken the losses back. But this is great stuff. We've got lots of doubt. Bring it. It's great. >> Show the doubt is wrong. >> Can I have that chart again just so I could fully absorb it? This is the biggest uh the tech sector. Um just eyeballing looks like it's the biggest rerate lower or higher of all the sectors. >> That's right. Um, healthcare and staples have rerated higher since October 29th. >> Healthcare in particular. >> Healthcare in particular, the stocks have rallied hard is the is the other way to phrase that. I mean, that's that's basically what we're saying. >> Yeah. >> Um, okay. Really? >> But but not something that not something that happens in a bubble. Uh, you don't see mult uh multiple compression. >> Ramza 675 says, "Michael Bur lowered the forward PE, lol." >> I don't know if I don't know if I totally disagree with that. No, no, he definitely introduced a lot of doubt. Um, nobody was talking about their depreciation schedule before him. I don't think so. He elevated a surface of the >> chainos. Uh, maybe maybe but there you you're right like Bur Bur very notably threw a rock into the pond and we're still experiencing the ripple effects and maybe it ends up not mattering or maybe it does but the market is paying attention. >> You know what's great? Like how does this end? We I think we say that a lot as if it ever ends. as if the market doesn't open the next day and the next week and the next year. It never ends. Um, but getting back to how we open the show, that sort of price action is, let's not gloss over that. That's like seriously bearish. When you have a blowout earnings report and the market just says, "Nah, no." Like, meaning my point is this, we're three days removed. If we if we're six months out and that was the top, I wouldn't be shocked just because that is very bearish price action. Now, hopefully the last three days have put that in the rearview mirror, but it's not over. It's never over. >> You know when it's over? When Bur does his Cassandra Unchained Substack for two weeks and people stop paying attention and these stocks all reverse and make new highs. >> Yeah. Yeah. That's when but your but the your bigger point which I agree with. You know what the difference is between us and let's say listening to a sports podcast on the ringer the season ends. The game this is the season never ends. The game is never over. One season bleeds into the next. There's no dividing line in between the two. It just it's the never- ending story. I think it's what I love about it. So uh I try to make this point on the air today. We were talking about uh Alphabet hitting $4 trillion in market cap or coming damn close and it's just like dude think about how many storylines within AI and the Mag 7 have come and gone this year and think about how many went in 180 degrees the other direction. In April, Google was finished. Now Google is the king of AI in in May or June. What the hell is wrong with Apple? They're falling behind in AI. Why can't they just buy Perplexity? >> So true. >> Blah blah blah. Now, now the stock's at an all-time high. Like >> Tim Kim Cook won't even mention AI on his quarterly calls. >> How about who's going to beat the Microsoft Open AI combo? Nobody. >> Now those stocks can't get arrested. So whatever we're at on Oracle, Oracle went up $200 and then gave it all back a month later. like is no one's talking about trillions of dollars coming and going in one company's market cap on on the back of an announcement. So whatever narrative you have about these individual kingdoms within the AI Game of Thrones, just understand they still rise and fall and we might be saying an entirely different thing about any and all of these companies six months from today. >> It happens all it happens. It's frustrating but it's also pretty cool >> and it happens all the time. Um, all right. I wanted to do some stuff on strategy because I think this is a really big story. I am aware that the market cap is just not all that big anymore. But I still think it matters because as recently as a year ago, basically Micro Strategy and Michael Sailor had given birth to a brand new I don't want to say asset class, but a brand new category of publicly traded company. like some of at some point you had the first ever oil and gas trust publicly traded. At some point you had the first ever real estate investment trust. At some point you had the first ETF. Like new things do get invented and then stay forever and people act like uh like like they came along the time of the dinosaurs and they've always been with us. No. Along the way we invent things. strategy a year ago looked like they invented a new category where it's a company that raises a ton of money equity and debt capital and accumulates a digital asset as quickly as it can >> faster than it dilutes its shareholders. >> Faster than it dilutes its shareholders thereby becoming a category killer, a must-own stock. And we had a few invitations. Um, but where we are with strategy and we we have a a video of Sully asking Tom Lee who has also launched a digital asset trust uh Bit Miner which is um for Ethereum like strategies for Bitcoin. But let's let's play that clip. Let's bring up guys if we can MSTR that is the company formerly known as Micro Strategy now just known as Strategy. The stock's down 50% in three months Tom. It's down about 65% from its highs in the middle of July. Is Micro Strategy down because Bitcoin is down or is Bitcoin falling in part because the strategies of the world, the Michael Sailors of the world have to sell the crypto because their equity is going down. What's the chicken? What's the egg? >> Yeah. Well, uh, again, you know, uh, because of my world in research and in on Bitmine, we are really plugged into all the trading desks and all the clients that trade. Anybody who has a sizable Bitcoin long position, okay, let's say it's more than a billion, they have very limited ability to hedge it in crypto derivatives like calls. The chain, you know, the max they can do is maybe 5% of their holdings. And then if you go to traditional CME exchanges, their contract sizes prevent someone from hedging a billion dollar portfolio. However, someone can use Micro Strategy's options chain, which is so liquid, to hedge all of their crypto. So Micro Strategy is essentially absorbing all the hedging pressure that the crypto industry is trying to do to protect their Bitcoin longs. So the reason Micro Strategy is a leading indicator, it's actually the only convenient way to hedge someone's long is to short Micro Strategy or buy puts. That's what we're seeing today. >> This this is the kind of stuff, Tom. It's one of the main reasons that we bring you on because you understand what I would consider the engine oil of the stock market, right? We know how the engine works or people think they do. But inside that engine, there are gears, there are pistons, there are things that are occurring that for 99.9% of our audience, they don't do this for a living. We get it. This is a really important interview. I'm going to let you go, Tom. Um, we are watching Micro Strategy or Strategy. We're watching Bitcoin and we're watching possibly 77,000, which you think might be kind of a wash out period. Correct. >> Yeah, that's right. Tom Demar who is an adviser to Bitmine >> really giving us a lot of insights. Yeah. Uh he's watching that actually micro strategy at this level here probably is when you want to ratchet into the longs. >> Um and Bitcoin maybe just a few thousand lower. Okay. That is of course friend of the show Tom Lee. Um I love Brian Sullivan by the way. Such a such a great dude. Um I saw him the other day. I was out in Anglewood Cliffs for something. I hadn't seen him in in probably two years. Um he towers over me. I don't know if you real He's like 67 >> March man. >> All right. Anyway, uh what did you think about the point that Tom was making that a lot of the pressure on Micro Strategy is just because it's like the easiest way for people to hedge big money um in in in Bitcoin itself. It's like a the options chain is more liquid and and a quicker way and that ends up putting a lot of pressure onto the digital asset treasury stocks. >> Yeah, I mean I would defer to Tom on that. I think that he knows a lot more about this than I do. The story makes sense. It checks out. Uh but the bigger point um I think if you're selling Micro Strategy down here or strategy like I guess there is a hypothetical world where this thing unwinds the need to puke up their Bitcoin. I think it's a lot lower than where Bitcoin is today. I don't see that happening. I don't think strategy is a zero and I'm not buying it, but I definitely wouldn't be selling it. >> I think they can raise money. I think I think I think if this I think if the everyone's talking about like some mythical level 72,000 where Sailor gets a margin call and he has to sell. I don't think that's how it plays out. >> I I don't think that I don't think that number is accurate. I think it's >> even if it were even if it were, I think he makes a few phone calls and sellers. I think I think there's a lot of people that are dying dying for Sailor to go to zero and for him to have >> they do not like him >> for him to have to uh liquidate be forced to sell to meet margin whatever whatever I would be moderately surprised. Would I be shocked? No, I wouldn't be shocked. But I don't think that's how this plays out. I don't think he's I don't think he's going anywhere. And to your point, I think that he would he would I think it's more likely that he has the ability to to reach for a life a life vest or life than than he go to zero. I I don't see that. >> So do I. All right. Um let's do some charts. Here's three years of micro strategy or now we call it strategy performance. Effectively, this was I don't know a 10 or a $20 stock. they come up with this idea to convert this uh software business into a Bitcoin accumulator and you can see the result. Um it was I wrote about this on my blog the other day. I forget the number that I came up with. I think it was a 3,000% return >> between between when 3,50% return from when they announced in August of 2020 through um pro uh last Thanksgiving when this thing became like one of the biggest stocks in the market. I mean it was just just absolutely wild. There were no other stocks in the US stock market in that time that did anything even close to um 3,000% is 7x and I think Nvidia or or 10x, excuse me. Uh I don't know 30, excuse me, 30x. >> Wait, what? >> It's I'm sorry. 30x and Nvidia did 10x over the same period. So like it it truly was one of the great winners. Now, we're going to look at the NAV, which is the net asset value versus the the uh market cap. Uh, Michael will probably make fun of me for some reason that I I don't understand, but I'm looking at this in billions of dollars, and I'm just trying to get to >> It's so catty. Look at you. >> I don't know. Maybe Maybe I Maybe I'm looking at it the wrong way. But what I'm trying to figure out is like the market cap of the stock versus the value in dollar terms of how much Bitcoin they hold. >> Yeah. >> And it is now trading at N3. So it is a discount to its underlying holdings of crypto after having traded as high as 2.8 times its uh Bitcoin. What are your thoughts? >> Okay. So, I wasn't going to make fun of you, but I w what I was going to do. But now you will but but is point out that I took your chart and I enhanced it. Next chart, please. So, this Josh, >> what a dick. >> All right, go. Go. >> No, this is a better visual. You are a visual learner and I fixed it for you. So, this slow visual learner is >> you are a slow Yes, this is a this is the spread. John, toggle back. This is the difference of the of these two lines. So what we're looking at to your point earlier is next chart please. Micro strategy used to trade at a monster premium. The market cap was almost $80 billion more than the value of the Bitcoin that it held and now it is the opposite. It is the market cap is $6.4 billion less than the Bitcoin that it currently holds. Now of course it's a moving target because the price changes but I think the point is to what I said 30 sec two minutes ago. I would not be selling it down here. It's over. Chain's covered his trade. It's over. It's at a discount. Can the discount widen? Yeah, sure. Why not? But like I don't I wouldn't be pressing that here. And if you ask me again, you have to hold this for for for two months. Do you do you buy it? Do you sell it? I buy it. I think the problem with just looking at market cap versus underlying Bitcoin ignores some other things about the enterprise value. They have preferreds out there which are dilutive and they basically they're not debt but they represent a future obligation. The company has to pay make uh I think it's 8% or 11% or whatever the number is. They have to make pretty big interest payments on that preferred stock. Um and they and they um they have a [clears throat] a value. Yeah. >> Uh and then there of course there's also traditional debt. And I wrote about this on my site and I don't want to go through the whole post that I wrote, but um I think the bigger point that I was trying to make is not a criticism of people who own strategy or told you so. I think I was just trying to make the point of like when you have FOMO and I definitely did while this thing went up 30x. >> Everyone does >> of course like you you wouldn't be human if you didn't look at that and say, "Fuck, I should have just bought it." Um so I definitely felt that. But my point I the point I was trying to make is like there is a cure for FOMO and it's simpler than you think. A lot of times the cure is just time. Just letting things play out. Nothing is really as great as people think it is when it's going up 30x or 10x. Like there are always there are always uh flies around everything. Like it nothing's perfect. Nothing's pristine. So sometimes just waiting a little a little while and then things come back around. And the the irony is if you had FOMO watching Micro Strategy run up 10, 20, 30x, well now it's at a discount to its underlying Bitcoin. So if you loved it so much, why aren't you buying it? And this gets me to another point, which is like uh we don't really want the asset that badly. We want the performance of the asset. And when the perception of that performance continuing goes away, it's like, well, who the hell wants to buy this thing. Yeah. And that's where that's where I think this stock is right now. What What do you think about that idea? >> I think I no notes. It's perfect. Perfectly said. I I could not agree with you more. The answer to FOMO is give a time. Whether it's the Aqua or the Rietonies of the world, like you have to accept as an investor, especially in today's market, which is never not going to be like it is now. Okay. The the beehive of investors, the people that are able to bring a story to life, that's never going away with with the advent of social media, there will always be stocks that are 10xing that you wish you owned. You have to just accept that that is part of the game now. And you're either in that game full-time and you accept that it's there and you're not playing it or you're not. That's it. And so, you just have to deal with it. The really great the really great news is that you don't have to play that game if you're not built for it. Nobody is make nobody is forcing you to. >> It's it's a young person's game. Now, getting back to strategy, this is this is the more interesting part of the story that we haven't discussed yet. Um so JP Morgan, who listen, let's be honest, they're no fans of crypto, say strategy is at risk of exclusion for major equity indices as the January MSCI decision approaches. Quote, >> what is what is that? I'll tell you right now, with MCI now considering removing Micro Strategy and other digital asset treasury companies from its equity indices, outflows could amount to $2.8 billion if Micro Strategy gets excluded from MSEI indexes and $ 8.8 billion from all other equity indices if other index providers choose to follow MCI. So, this is probably going to hang over the stock, I would assume. And if it doesn't get kicked out, then it will be a huge lift off of it. But this is I don't know that I want to get in front of the story either to be honest. This is a this is a big one. >> You know what's funny here? The analyst at JP Morgan writing this made a a mistake. It would not be outflows. It's not a fund. Micro Strategy is an equity. When people sell Apple, we don't sell say Apple had outflows. Say people liquidated their stock or they sold it. It's not. It's interesting like the JP Morgan person writing this is like thinking of this like an ETF, >> right? You're right. >> He should have said like selling pressure from passive index index funds or something like that. >> Outflows could amount to 2.8 billion. It should be uh people mimicking the index might sell 2.8 billion worth of strategy stock. >> Yeah. >> Uh interestingly also they're calling it Micro Strategy. >> Yeah. That's so so that's kind of interesting too. >> They know they know what they're doing. They're definitely uh they're definitely like pushing his face in in in the dump. So, >> and we have a we have a chart. Is this worth putting up or is there nothing new in here? >> Not at all. All right. Um Okay, let's move on to the next segment which is brought to you by PIMCO ETFs. To learn more, check out pimpco.cometfs. All right, Josh. >> Chart of the week. What are we What are we What are we saying? >> Chart of the day. >> We'll get there. We're not saying either of those things. I want to start out with some of our charts and then I'll bring their work into into the conversation. So Ben posted this on his site the other day. the number of years between 40% bare markets. And the reason, and there are obviously a litany of reasons why we haven't had a great crash uh that's persisted or or blown past 40% in in 16 years um is because we haven't really had a sustained recession. 2020 was a quick man-made recession. Obviously, the fiscal impulse stopped that that in its tracks. 2022. Um, there was pockets of a recession, but you can't have a real recession with the unemployment rate at 4%. So, however, I had chart Kid show me, well, what about all of the 20% draw downs? Now, I drew I made him start at 19% because we've had a few of those over the years, but this chart looks so much different. >> We've had we've had a ton. I think we've had five in the last six years. So, yes, it's been a while since we've had a 40% bare market. Like a And that only happens in recessionary bare markets, but look at all of these 19% draw downs, effectively quick bare markets. There's been a ton of them. Yeah, I like this chart. As a um as a financial advisor, I like the 19% chart better than the 40% bare market charts. unless and until I run into the person who's obsessed with 1929/208 and th those people exist, but that's not the normal the normal person is not walking around saying it's almost it's almost lean o'clock. That's like that's not normal behavior amongst most investors. I think most investors accept the fact that there are going to be bare markets. They don't accept they don't accept the fact that we're always on the verge of a depression, >> right? Um, so I like the second chart better showing the 19% draw downs because a they're almost always about to happen or have just happened. >> B, the length of them is not that long. >> The first chart shows, oh [ __ ] we're due, right? We haven't had any pain. And the second chart is like, no, no, no, no. There's been plenty of pain. We've had plenty of bare markets along the way. So, which brings me to this chart from PIMCO. So, the big distinction is this. There are two types of equity drawdowns and we've spent a lot of time over the years talking about these two types. There is the non-recessionary equity drawdowns which on average are a 17% draw down. They last five months and then there is the recessionary equity draw down. The GFC, the dot bust, >> the knockout punch, >> the knockout, the one that ruins a generation of investors that completely leaves you with PTSD, not believing that things will ever get better. And that lasts uh an average of 11 months, which sounds light to be honest, but that's 27%. And of course, the point that Pimco is trying to make is that is when the treasuries really add balance to the portfolio, but absent absent a recession, we're not we're not just going to fall 40% because stocks are overvalued. Do you want to apologize for referring to this table as a chart when it's clearly a table? >> Sure. >> Okay, put that back up. This is really good stuff. Everybody should screen screen grab this um from their phone or or their computer, wherever they're watching this. I feel like this is such a great reference because the next time somebody's talking about uh equity pullback, draw down, correction, whatever um whatever nomenclature, like answer me one thing. Is it a recession with that draw down or is it just like the normal course of stock market pullbacks which happen all the time? Because the difference could not be more stark. Think about forget about the depth 17 versus 27%. The length is the killer. >> And five months an average of let's just say five months average meaning some are way longer versus 11 months. that is a huge gamecher in terms of people's ability to get through it um and how what changes they might have to make if any. And so if you know we're in a stock market pullback but the economy is held up like you should not be waiting for the knockout punch to be delivered cuz it's just not what normally happens. >> Well said my friend. >> Okay, I think we did that justice. Uh, >> great table. Not a chart. Not a chart. >> All right, we're gonna finish with this Nvidia versus Alphabet stuff. Um, just because I think it has tremendous implications for the the year end. Michael and I are both on record saying if they're going to run the stock market into year end, they'll probably bid for all of these mega cap stocks just because they're liquid. Nobody yells at you. even if they go down, you're not in trouble with your uh investor base as a fund manager. Um they lend themselves to borrowing against. Like there's just a lot of reasons why these stocks will probably get bought as a group, but it won't doesn't necessarily have to play out that way. Let's pull up Google versus Nvidia year to date. Google, I'm told by Sean and and Chart Kid Matt, is on track to have its best year since 2009. >> It's unreal. >> It was up 102% then. It's up 69 nice and a half% this year. And Nvidia is up 31%. It looks like a loser relative to Alphabet, but it's, you know, it's a pretty good year for any stock. I think most people would agree. Um, but this is a really interesting thing being set up here. I wanted to ask you, do you think a lot of the buyers in Alphabet are pulling money from Nvidia to do it? >> It's a $4 trillion market cap. >> Yes. And I know you're a big money has to come from somewhere guy. Yes. And I think it's overdone. I think like this is I think the the ratio the whatever you want to look at it the spread between Nvidia. I am generally a I don't like when people say those alligator draws have to close because like I think that's normally Charlotte and [ __ ] But I think this is too much. >> You want to reverse the reversal. >> Yeah. I think it's too much. >> Do you want I would I would much rather own Nvidia through the for the rest of the year than Gemini. I mean sorry than Google. >> Um okay. Okay, next chart. Google is now more expensive than Nvidia. How many people do you think know this? >> Two. >> Two people, you and I. All right. Google's forward PE minus Nvidia's forward PE for the entirety of the last 10 years, Nvidia has been the more expensive stock. And you can see by that those gray that that gray kind of stochastic below, that's just measuring the degree to which Google has been a discount to Nvidia. And now for the first time since 2016, Google sells at a premium on forward PE to Nvidia. That's pretty that's pretty insane. Yeah, >> I love this chart. >> So, normally the price drives the narrative, but I think that in this case, the narrative actually is driving the price, which is then also driving the narrative. So, here's where we So, right, so here's where we are today. Dan Gallagher at the Wall Street Journal said, uh, talking about Google, the company offers a level of AI vertical integration that even the other big tech companies can't quite match. The recently launched Gemini 3 is a perfect example. Google trained its own Frontier AI model on its own networks using its own TPU chips that that it designed in house. That effectively makes Google, this is a good one, that effectively makes Google into a combination of OpenAI and Microsoft with a bit of NVIDIA thrown in. Wow. >> So, it's it's it's it's good, but it's aggressive. So, so to which to which the Nvidia newsroom, >> because this is all there's there's smoke here. The Nvidia newsroom knows what's going on. They tweeted today, "We're delighted by Google's success. They've made great advance. They've made great advances in AI and we continue to supply Google. Nvidia is a generation ahead of the industry. It's the only platform that runs every AI model and does it everywhere computing is done. NVIDIA offers a great uh greater performance, versatility, and fungeability than AS6, which are designed for specific AI frameworks or functions. >> It's such a subweet. It's such a bless, you know, the southern people, they say, "Oh, bless." No, not blessed be. Bless your heart. >> Bless your heart. Yeah. >> That's like how they say go [ __ ] yourself to each other, right? Ble. Oh, bless bless his heart. >> Yeah. So, so Nvidia drawing that distinction between GPUs and uh application specific integrated circuits or AS6, which we did a whole episode about that, I don't know, 6 months ago, a year ago. Can't get into it again. Um, but just this idea TPUs have been part of the Google story since way before we were talking about generative AI. Um, so it's not a brand new breakthrough technology. They've just gotten very effective at finding ways to be more efficient on cost, plugging up some of the things that they're doing with their own with their own silicon. And I think that's admirable. I think it's a good sign for shareholders that like Google is playing offense and is got their foot on the gas. And if they do a big deal with Meta, yeah, maybe it's a wakeup call to Nvidia about pricing um and and and that they might not have the pricing power that they think. And so to me, the sell off in Nvidia seems sort of rational. I don't love that they felt the need to answer this. Um I'm not quite sure. And I also don't love what they did over the weekend, which is the last thing I want to get into. They sent a they sent a memo around to the sell side like to analysts covering the stock responding to Michael Bur and other short sellers talking about depreciation schedules. Um let me just read this cuz I paraphrasing it doesn't do it justice. This is Baron's quoting from the memo. Nvidia also responds to claims that the current situation is analogous to historical accounting frauds Enron, WorldCom, and Lucent that featured vendor financing and SPVS. Nvidia quote, this is this is the company Nvidia does not resemble historical accounting frauds because Nvidia's underlying business is economically sound. Our reporting is complete and transparent and we care about our reputation for integrity. Unlike Enron, Nvidia does not use special purpose entities to hide debt and inflate revenue. Is it weird that they felt the need to do that? You like literally invoke the name Enron next to the word Nvidia? I don't know if I love it. >> Listen, I don't I think the wording is weird. like it's not a fraud because their underlying business is economically sound. I don't think the two are mutually exclusive. I think you can have fraud with a good business, but whatever. I don't want to parse their words. The market took $700 billion away from it. >> Yeah. >> I'm not I'm not shocked that they responded >> like oh you like in other words like what are they supposed to do? Just let their shareholders get pummeled and not say anything? their narrative is driving the price action and went from 5 trillion to 4.3 and they felt the need to respond. $700 billion is a lot of market cap to go up in thin air over over allegations. They responded. >> Bro, I'm not Enron. You're Enron. [laughter] I It's not all right. Um, last part of this. Nvidia's customers depreciate GPUs over four to six years based on real world longevity and utilization patterns. Older GPUs such as A100s released in 2020 continue to run at high utilization and generate strong contribution margins, retaining meaningful economic value well beyond the 2 to three years claimed by some commentators. How much do you want to bet that Cororee asked them to say that one of their biggest customers definitely among their most vulnerable customers to this type of innuendo? How much you want to bet the comm's people representing Cororeweave, who let's just assume are among the top crisis PR firms on the planet at this point, how much you want to bet they uh demanded demanded of their supplier, we bought all this [ __ ] from you and now people are saying it's obsolete. You need to go out there and say that it's not. I would bet almost any amount of money that that conversation took place uh somewhere in PaloAlto or San Jose over the last couple of days. What do you think? >> I would I would agree with you. People are human and that's how humans behave. >> Absolutely. >> This is a developing story. You guys know we will we will it's very as fluid as it gets. We'll we'll stay on it. All right. Let's do make the case and then a mystery chart and we'll get out of here for the night. Um healthcare. I don't think this is a run-of-the-mill um uh uh what's called rotation that's just like going to come and go and and we're going to laugh about it. I genuinely think it has legs >> because of the level of participation of the components of the XLV and then seeing followthrough in the midcaps and there's just a lot happening here on the earnings front that justifies it. It's not just a rerating. It's not just people being like, "Oh, these stocks are too cheap." And getting bullish on them for 10 days. I understand that type of rotation. I I could be wrong, but I think this is more. Eli Liy just became the first trillion dollar name in the category. The first healthc care stock ever to it's joined a group with only nine other names. The Mag 7 plus Berkshire plus Saudi Ramco now plus Lily. And that's uh Broadcom too. And that's the list. There's nothing else. Um, there's a healthc care stock. I don't suggest that that means all these other stocks are going to go to a trillion. I'm just making the point people are looking at that as the upside potential if they own a company that hits a really big category like diabetes and um and uh GLP1. So Lily is Zbound and Mangaro combined $19 billion in the first nine months of this year in sales. Wait, what words did you just use? >> Zapbound and [clears throat] Mjaro. >> What What are those? >> Those are the weight loss shots and the diabetes shots that are part of this GLP-1 tepatide monster. Um those two drugs combined did 19 billion in the first nine months of the year. They're now bigger than Kituda, which is Merc's flagship uh cancer amunotherapy. And um it's the bestselling drug in the world right now. So, um, analysts are talking about a hundred billion in annual sales by 2030. And, uh, at a trillion dollars, Lily is twothirds the value of Meta and worth more than Walmart. Did you know that? Um, >> double the size of Johnson and Johnson, which is the closest to Lily in the whole pharma industry. So, double the size of number two. Um, I also want to tell you that this is one of the greatest turnaround stories in the history of the US stock market. 10 years ago, people were saying this thing should just go private. It's just worthless. They have nothing. And out of nowhere, they found this metabolic market and they ran with it and they got approvals and they launched and they marketed. And it's just an incredible come from behind story. Eli Liy is a 150y old business. The founder was fought in the Civil War and 10 years ago this stock was nowhere and and look at it now. And I think that's really exciting for equity investors. Um let's do these charts really quickly. [sighs] This is Eli Liy versus Merc J&J and Fizer. It's like another planet. Uh next chart. This is the market value um as a as a bubble versus all of the other bubbles on the chart. There's nothing even in the same category >> um in terms of not just this is uh this is a multiple of sales. >> Yeah, >> it's revenue and market. Okay. Yeah. >> Revenue and market cap. Eli Liy is 10 times uh sales. Um and >> nothing else is close. >> Yeah. I mean, and and and it's not as big revenue-wise as J&J, which is a $90 billion revenue company. Um, so it's so it's not as big, but uh it's growing much faster, which is why it's getting that uh multiple. Next one. Last one. This is uh Eli Liy's market cap. Another way to look at this at a trillion versus the 15 largest biioharmaceutical companies. >> Oh, I like this visual. This is clever. It's a good one, right? Just like to just like to wrap your head around the relative size and you see like Santa, Fizer, Gilead, Novo, Ro, Astroenica, Abby. Like none of these are even in the same ballpark. >> Yeah. Right now, >> dude, I haven't I haven't looked at these. Regeneron, Biogen, Gilead, J&J's at all time high. I haven't looked at these charts in literally years. >> All right, so here's my make the case then. We're not saying buy Lily. Um, for best stocks in the market this week at CNBC, I wrote up three companies that are on my best stocks list. Sean and I did a dive into this um instrument measurement and instruments group, which is really interesting stocks. Here's the first one. I want you to do a a beauty contest. Metler Toledo. >> Oh my god, it's a buy. >> It's a [ __ ] buy, right? >> It's beautiful. What a breakout. Beautiful. Okay. Um, thermofisher, same sector. This is the biggest one. >> This is a two. This is a $220 billion. It didn't break out yet, but what do you think's gonna happen? >> Uh, I don't know. I would maybe chop around 600, but higher. >> You like But do you like the base? >> Yeah, dude. >> Almost perfectly bullshaped. You got a gap fill in there. >> Okay. Um, that's TMO. Here's Agyant, which uh a this broke out today. >> Looks great. Yeah, it's going higher. >> Uh, which you like the best? >> Uh, this one looks the cleanest to me. >> You like Agelant? This is a $50 billion market cap. >> Agyant was a spin-off from Hullet Packard in 1999. >> Um, so it's got a long history trade. All right. >> What? What? What, Josh? What? Like what is the overarching story? Like why are these working after years of being >> AI? [laughter] >> No, no, no. Hear me out. Hear me out. These are ARR businesses now. They used to be sending a salesperson out to a doctor's office or a hospital to sell them a bunch of [ __ ] And now they sell the razor, the razor, and everyone needs to buy razor blades, all this measurement equipment. Once they get installs in these medical facilities all over the world, universities, hospitals, clinics, once they get installs, the ARR just kicks in and they start to look more like software companies. And that's what's that's how they've transformed their businesses. I got a few more um healthc care on the best stocks list. Sean threw them in just for the hell of it. Biogen. >> Yeah. Unbelievable. I was just looking at this. Unbelievable. >> Unbelievable. >> Um IQV. >> I don't know what this is. >> No idea. Just buy it. Shut up and buy it. Um >> here's uh S uh STE. This is Steris. This is an Irish company with an NYC listing. >> This is about to go >> like like very obviously RSI not overbought. Um anyway, it's interesting to see the degree to which healthcare names have totally taken over. best stocks in the market list. And uh it's it's fun. I think it's fun. >> And it's a big sector. Is it the fourth biggest? I mean, it's not it's it's >> it's these some of these are some of these are gigantic companies that you don't have a lot of these in other areas. >> It's a big sector. Okay. Or maybe it's not. I don't know. I think it is. All right. I got a mystery chart for you, Josh. Um I would I jumped the gun. I sent this to John at I don't know 230 and it did give back a little bit of its gain. So, it doesn't look quite as good, but chart on um again looks a little bit less impressive after the close. >> What is it? >> I haven't Hold on. You don't cut me off during a Mr. Try. I'm talking. >> Okay. >> I'll tell you this is a stock that you made the case for a few weeks ago and I said it's a compelling make the case. Uh I forgot to buy it. Um, but this is a stock and this is a clue that I'll give you. This is a stock that's been left behind. Nobody really cares about it. There's no expectations in the name. Michael, all I want to do is zoom zoom zoom and boom boom. >> That was funny. [applause] >> Look at how I nailed this trade. What do you think? >> Well, like I said, the the stock closed at >> Do you know that it went up for the reason I said it would, >> which is even more satisfying? Throw that throw that back on. The stock closed at $86, so it's not quite as good. But but back to you, Josh. Why did you say it was going to go up? >> I lit like I telegraphed this and very publicly. I said, "You're jumping out of a basement window with a parachute on this. This is a company that the forecast was for 3% revenue growth. They did four and a half. Good enough." >> Yeah. >> All the metrics people cared about were higher. Gross margins were up. Um they're they have this segment of the enterprise business which is companies doing over $100,000 in revenue with them. That was up uh I think that was up 9%. Uh like all the important stuff on the enterprise side, forget about the video stuff. Um they're I mean we're customers. Their AI products I think there was a 4x increase in AI companion which is one of their verticals. Um so I I can't sell it. I think it's going 100. Oh, you bought it. >> I I've owned it for uh I don't know, a month or two. >> Oh, credit to you. >> I made the case and it was long. >> Great call. Great call. Great call. >> So, all right. Hey, I I I get a lot wrong. I got one right. Okay. Uh guys, that's the show. Thank you so much to everyone who joined us live. We really appreciate you. Thank you so much. Want to wish all the pounders a very happy Thanksgiving. We are going to get a show up for you guys on Friday. We're taking a little bit of a risk uh in that we're not taping it Thursday night because we're not psychopaths. Uh so it'll be a little bit pre-taped, but it's going to be awesome. Another returning champion and a fan favorite guest. So uh look for that. [music] Animal Spirits never misses. You'll get that tomorrow morning. And uh thanks so much for all the ratings and reviews. They go a long way. We appreciate you. Happy holidays. We'll talk to you soon. [music] >> [music]