Getting Our Ducks In A Row with Vincent Daniel & Porter Collins
Summary
AI Capex Cycle: Debate on sustainability of elevated AI capex at META and GOOGL (85-125% YoY) and how flattening spend could help their stocks but pressure suppliers like NVDA.
Data Centers: Concerns over data center economics and financing structures, with DLR cited and private credit/vendor financing flagged as risk; focus on cash flow and return-on-capital discipline.
Semiconductors: Valuation risk highlighted for NVDA versus real economy sectors, questioning whether current AI enthusiasm and implied earnings justify market cap extremes.
Quality Tech on Dips: Preference to accumulate high-quality names like META and MSFT on pullbacks while avoiding funding-dependent AI “pure plays.”
Bitcoin: Treats Bitcoin as distinct from broader crypto, a volatile trading vehicle with potential political/regulatory tailwinds; remains cautious on alt-coins.
Gold & Miners: Bullish on Gold as a debasement hedge and positive on Gold Miners as leveraged vehicles, expecting consolidation after a big run but supportive macro remains intact.
Energy & Offshore: Constructive on Energy setups and selective in offshore drillers like RIG, favoring strong balance sheets, buybacks, and optionality if oil trends toward mid-$60s/$70.
Private Credit & Brokers: Cautious on Private Credit underwriting and fundraising reliance at managers like OWL, BX, ARES, APO, preferring GS on relative valuation and earnings quality; notes ORCL as a recent AI-hype red flag.
Transcript
Welcome to the On the Tape podcast. I'm your host, Danny Moses. Back together again with my boys Porter Collins and Vincent Daniel for another What Are We Doing Guys. Thanks for joining me today. I'm a little bit under the weather, so appreciate you guys uh coming in here. >> You're you're a warrior to uh be on the podcast here today. So, uh well done. >> Absolutely. >> Let me just say that without getting into details, I had a little health scare. Had to go get cared for by doctors and nurses. And you forget all this rhetoric we hear in drug prices, ACA reimbursement, health insurance companies, all this stuff. We totally forget how dedicated nurses and doctors are. And I think back to COVID and the essential workers, nurses, I think over 3,000 died during COVID. So, whatever your opinion is on on all this other stuff, just know that I mean, I had incredible care doctors and nurses. And I think we lose sight of that when we're talking about all this. I had to get that off my chest because tremendous people that dedicate their lives and I'm sure that AI can improve a lot of things within administrative stuff and healthcare for sure signing paperwork you know you sign a thousand things those things should be simplified but when it comes to compassion and care and human element of it I'm sorry but you can't substitute that I don't care what so I just felt the need to get that out of my system and I'm fine and I'm on the mend so don't worry about me um but I just thought I should uh echo go that. So that's my lead in guys. >> But under a 24-hour turnaround from you is quite impressive. So >> yeah, that's good. Well, I'm happy to be with you guys. Great to see your faces. And so with that, let's get that out of the way. Let's move into kind of the macro on the markets. Um, you know, we kind of felt a lot of stuff going on the last few weeks. People have questioning the AI sustainability, not of the kind of the macro trade. I mean, it's still intact the same way that was, but the math behind it and the companies within it. And we're starting to see kind of a breakdown of kind of the pretenders I will say and the real companies you know names that are getting hit right now like the core weaves and the super micros of the world that feel like there's no sponsorship. Give me your thoughts kind of on the broad view as we head into Nvidia's uh quarter here which is going to be tomorrow evening. >> It's pretty funny. Everyone uh has been reaching out to us for for Michael Bur's contact information. They everyone wants to talk to Michael Bur about what he thinks now about uh this stuff. And you know, good for him for for timing it pretty well. And you know, the AI noise was obviously hitting a crescendo and you know, the Sam Alman has been in the press for, you know, last couple weeks and kind of making some goofy statements and stuff like that. And so, and obviously you got Meta, you know, down a lot on this. And and the the question is is how sustainable is this capex? you know, I think they're going to spend a lot of money on AI and AI is going to be with us for quite some time, but you know, how long can um Meta and and I think Google's numbers are up 85% year-over-year growth in capex, how long can they sustain themselves? Meta was up 125% year-over-year. How long can they sustain that year-over-year growth, I think, is the question. you know, as we know, it reversed the the clock a couple years to the to the metaverse question and people were upset and when Meta, you know, went under $100, people were very upset about Meta. Meta cut the capex and stock ripped again. So, it'll be, you know, it's not going to play out today or tomorrow, but what happens to Meta if they say, "Hey, we're going to flatten out capex." You know, stock probably does better. Does Nvidia do better on that? Probably not. But that's a different story for a different day. So, it's amazing to me how much price dictates the narrative of the story that we're talking about. And so, markets are down. So, now we're all questioning AI. If markets were up, would we be questioning AI? Probably not. Uh to me, the actual underlying data that is coming out um is still coming out. Like just today, Microsoft and Nvidia invested a bunch of money in anthropics. So, as Porter said, we're going to continue to see investment in AI. The question is whether it's enough for people. Uh but the market is reacting and and probably reacting correctly in the fact that you have questionable debt issuance and what is going to be the return on invested capital for all these companies. And and if we just take the internet, which hasn't been that long ago, like 20 20 25 years ago, there was massive capex, there were a lot of losers, and there were a bunch there were a few winners. And I'm I'm just going by that blueprint 20 25 years ago. That's that's what we're going to see again. >> No one's questioning the secular trade of AI and that is here to stay, but you're right within that. And people always say, "Oh, it's different. It it definitely rhymes with the dotcom bubble that we all live through and traded through. The one thing that's interesting back to Porter's point about Meta is, you know, they're not just using their balance sheet. And that should tell people something, right? That their their ability to go out in the private credit market and then get it funded by retail investors. The, you know, the um changes which have gone on for retail investors ability, which we always joked about, but in all seriousness, when that ends up on your desk is probably, oh, I get the opportunity to invest in a data center. I'm going to get a 10% return. You don't look at the fees. You're just so excited to have the ability to invest in it. always question that stuff because you know why why is it negative selection more times than not it ends up on your desk but good on meta for getting that last 40 billion or whatever off balance sheet and we've talked about soft bank in the last few weeks on our what are we doing contrarians at the gate substack which I would tell people uh we have a lot of information there as well just to give that a plug um about that and about these trades and our chats in that room with brilliant people going back and forth and so to your point Vinnie made the best comment is no one questions the market or stocks or fundamentals when the stocks are going up. It's always when they're down, why are they down? And when you start to do that and start to do the math, and Chainos does an amazing job right now, when you know, this is his type of market where facts start to matter and he lays out kind of the math. When math starts to matter and it's not just dream the dream, then things change. And that's a healthy rebalance. And I would tell people this last thing before I turn it back to you guys is you buy the quality on dips like this and you're going to be fine. um you know you you you buy the metas, you buy the Microsofts like on big draw downs and stuff like that because you know that there's there's safety there but when you're going to the pure plays or things that are dependent on funding or this vendor financing or stuff that goes on musical chairs has a way of stopping and you know chairs are getting pulled. That's it guys. That's that's kind of how I feel. Well, well, you know, the the Jim Chainos has been on this data center thing. I'm looking at DLR here for uh for reference, but stocks been flat for five years and he's been right to, you know, these things have been negative cash flow monsters. And then CPY put put a piece out, you know, I would say maybe five, six months ago talking about, you know, the the how the AI doesn't, you know, put uh, you know, doesn't pencil out. And I was thinking about it last night in that fact that you know I pay more in my YouTube TV um than I do for my uh Gemini, right? It's like I think it's like a hundred I want to say 100 bucks 100 plus bucks for for my YouTube TV, but it's 20 bucks a month for Gemini. I pay more for my internet connection than I do for my AI. And so if you think about that and you think about the relative market caps of AI versus all the other stuff that we do, it's just so outsized. I mean, there's been a chart going around about how Nvidia's 3x the market cap of the entire S&P energy sector and it has 80% of the of its cash flows. So, you know, there there's it's it's in this meme territory and obviously these companies have been tremendously profitable for a long time, but question always comes down to valuation and and uh what is it worth and is this the peak of the the the insanity? I I don't know. >> You know, Vin, along those lines, uh switching here to crypto, um you know, we get asked a lot about crypto and I think the three of us are relatively neutral on it. We weren't bullish. We we don't want to be bearish on it just because we get it. We know how gold's viewed. We get it how the Bitcoin people want to view it. Although Bitcoin story keeps evolving. We don't want government regulation. We crave government regulation. It's a store of value, whatever. But when you the same point I just made about stocks dropping and finding a a point where you can start buy them. How do you kind of equate that into crypto just on a relative basis? Oh, it's down 25%, it's a buy. Like give me your thoughts on that. I swear I'm not trying to trick you. I just as a fundamental bottom up. I think I know the answer, but how do you think about that? >> Well, first off, let's differentiate. I was starting to laugh. Um, let's separate crypto into its two components, or at least the way I do it, Bitcoin and the rest, right? And generally speaking, I I have an appreciation for Bitcoin simply because I think they took the PowerPoint presentation of gold and digitized it, right? Unfortunately for Bitcoin, it doesn't act like gold. Meaning if you look at the correlations of Bitcoin relative to other securities, it tends to be a risk on liquidity on asset. And I think something interesting is happening today. the rest of crypto. I keep searching for a use case, Danny, and I can't seem to find one other than gambling or if you live in a jurisdiction like Venezuela or or some other country where they don't appreciate um the fiat currency and and damage the fiat currency, it makes a lot of sense. What's interesting today is that and I also believe like further step that because of the Trump administration's affinity for crypto and Bitcoin, it kind of serves as a leading indicator and a barometer of what is happening. So all that said, today is the first day in quite some time that crypto is rallying because crypto has been dirtnapping for the last few weeks. And so I'm starting to believe that well why is it rallying? Like it doesn't make sense that the NASDAQ's down 12 bought the dip. So maybe that's it. >> Okay. But but but perhaps that perhaps that's it, Porter. Perhaps someone in the Trump administration is buying it and something's coming out in a day or two, right? Like I always view it as saying, "Oh, I'm clearly not in the know with these things." So the fact that it it is showing strength in a day of weakness interests me. >> People viewed Gary Gensler um you know negatively in terms of his views on crypto and I get it. Um and he was trying to protect investors. I really think he had you know you know investors in mind thinking let let me protect you from these levered vehicles, the leverage vehicles, these lending vehicles, all the stuff associated with it. And I think a lot of the pure crypto people appreciated it to a point like okay let's but what we're seeing now to Vinnie's point is the Trump administration turning a blind eye pardoning CZ doing all these things and we've seen in the last few weeks liquidations or too much leverage being pulled in or the MNABs as they call them the navs on some of these companies that are two 3x the underlying crypto which makes which we all know makes no sense those have come in now so you get a deleveraging type adage and Vinnie's point we don't know what's going on today for all we know Micro Strategies back in the market buying Bitcoin and that and people front run that and get ahead of I don't know. My point is though is that investors beware and stay pure like you just talked about in stocks by owning quality to Vinnie's point there's Bitcoin and kind of there's everything else and I get it Ethereum and you know Ethereum and all these other applications which might come in stable coins but sorry Porter I just wanted to throw that in there before you went. No, I listen, I think that the three of us have had a very negative uh opinion of everything else in crypto. You know, the the the Baron coin, the the Melaniacoin, the Trump coin, the dog with hatcoin, the Dogecoin, you know, it's >> Fcoin. >> Yeah. >> Yeah. You deserve to lose money if you lost money in those things, right? You really do. >> And so, you know, Bitcoin is an interesting I just view it as an interesting trading vehicle. If I'm looking at at the um you know last three pullbacks, there was a pullback from the peak Trump euphoria to uh liberation day that was a 30% pullback. The in 24 we had a you know uh 30% pullback and here lo and behold we have a 30% pullback. So maybe this is just normal course you know volatility for for Bitcoin. Um, you know, I I don't really have very many thoughts of it, but if it if it, you know, it it got to an interesting level on a on the charts, I might buy it. But, you know, aside from that, you everyone knows that our our preferred debasement vehicle is gold. So, that that's how we view it. And, you know, the what's China buying? They're buying gold. They're not buying Bitcoin, right? Maybe the people within China are trying to buy Bitcoin and move it to get it out of China, but the central bank is is buying uh is buying gold. Let's move on to gold. Obviously, that's a good segue, Porter. Um, but I also want to close the loop on Bitcoin that I think it's perfectly fine to have that as an asset in your portfolio to some degree. I I I see nothing wrong with it at all if you can sustain all this volatility. Just don't overtrade it. If you're really a believer, you know, it's going to go up in the long term, great. All right, on to gold. Um, hanging around 4,000 um key level kind of bounced off of that here. Huge runup. I think we're all still very positive on it. There's nothing that I see in the macro that changes my view and I think your view as well. I don't want to speak for you guys. I had Luke Roman on the pod last week. Obviously, we know his thesis on gold. He thinks it's going to 10 then 20,000. It's going to replace the dollar, replace US treasuries, etc. He doesn't see that stopping. We given the debt levels, but Vinnie, maybe start with you, you guys thoughts. And I think that the names and the gold miners that we've talked about here before are really a great way to kind of express that view if not the commodity itself. >> It's really funny for us. We constantly underwrite our our views on gold because it's a very big position. So we have to and at the end of the day it was a classic Steve line just leave it right and and the reason why we conclude just leave it is because debasement's probably our best theme and as and when we look towards what the government fiscal monetary nothing is going to seem to as Lyn Alden says nothing stopping this train. So that said, >> Vinnie, I'll push back on you in this. How about this, >> Steve? You just mentioned Steve. Steve would say, "Oh, you guys are doing the oi the deficit thing again." >> Yeah. Yeah. Yes. And God bless Steve. He's right that if you just look at the surface of markets, right, just just it's almost like I I always equate it to being a duck on the water. If you look at a duck that's floating on the water, it's so elegantly moving on the lake. But you what you do not see are the legs and the spinning that's going underneath to make that elegant that duck look so elegantly. Right. What we look at Porter is what in the world does the government and and the monetary have to do in order to make Steve and everybody else go on TV the next day and advocate a position in Nvidia or Meta or or Amazon or anything else of that matter. And sad my brain goes to what's going on underneath. And what we see is constantly increasing and leveraging controlling volatility and making sure that some schmuck is buying our treasuries at 50 to1 leverage. And to me I say well that's the basement. And so and and look both of them are the basement vehicles as we speak about it. Amazon and Meta and the Max 7 are the basement vehicles. They got great cash flows. There's nothing wrong with it. Gold is also the debasement vehicle because the thing that's depreciating is the value of the dollar. And I and to back to your question, that's longwinded, Danny. I apologize, but to get back to your question, that's that whole conversation happens all the time for us and it's just a natural conclusion that gold should be fine. Does it need to rest for a little bit as the moving averages catch up to it? I think the answer is yes. But I I'd be more than happy if gold sat there being being invested in the miners and some of the developers. I'd be more than happy if gold just sat between 3,800 and 4200 for a few months. But, you know, listen, if if I stir your cocktail even even more here, Vin, you know, the the the deficit keeps getting worse because the economic data that we're looking at that the whole world's nervous about and pointing out that the, you know, Home Depot is weak, the the builders are weak, consumer discretionary is weak, jobs mount uh losses are mounting, you know, that keeps the underlying deficit higher, right? cash or you know flows into the government weaker and so I I think that that's that's what I think we're looking at and and the funny question poised to us is that you know gold and the gold miners I think gold miners are up 100% this year but over five years they're up 80% or 85% I'm probably getting the numbers wrong but so why why in 2025 what was so special about it in 2025 and I think some of it is people finally coming to the realization that you know the debt's mounting where I think we're at 39 trillion and 105 trillion off balance sheet and you know if you look in the way of a company we're negative two trillion in earnings right there's no way that debt's being paid back without printed money right that that that's that's the this is you know this is why you know we stay stay bearish for too long most of the time we look at the at the underlying guts of of what's going on, what's keeping the duck looking pretty on top of that water. And it's it's just the everinccreasing debt levels. Um, >> yeah. And I would say this that when you have several or a few Open AI executives effectively saying, well, if we're wrong on our timing, the government's going to bail us out. Um, that's great. If you're if you want to be long AI and that's the attitude, you better be long gold because the only way that they're getting bailed out and they may indeed be too big to fail. When you tie in the private credit bubble and you tie in um AI and all the leverage which is, you know, quickly mounting in the space and when you change that numerator, meaning to Porter's point, revenues are less coming in, right? But your your debt is growing. That's a witch's brew and quote another chainos quote today. things that only to me adds fuel to the fire, you know, to kind of be long gold here. And I think the belief on the moral hazard stuff is within private credit and open AI is, and by the way, government's buying stakes in companies already that the government's going to come along. But when does it matter when I I don't know, but I would just again third time on this pod, stick to quality, the names that you're >> I I'll risk throwing my hat in the ring in terms of this this private credit thing. I don't know if it's a bubble. How do you define a bubble? But listen, I I think the underwriting has been poor, right? And that that's that's fairly clear. Um, you know, the the the same stuff that the banks did in in ' 0708 uh sorry, 05 to 08, you know, was was bad underwriting, right? They they you know, the covenant light loans, you know, that that the banks don't do that anymore. And so where can they do that? they did it in the in the private credit arena. So, I don't know that that it's a bubble that cracks. I I think the people that invested in the last vintage of of private credit funds, the returns are going to suck, right? And and you might not see that cash back for a long time. And that's why you're seeing a lot of these um you know, uh public companies like Blackstone and and and Blue Owl and and Aries and Apollo, the stocks have been terrible, right? Whereas Goldman Sachs stocks been fine, right? But the but the the the companies that uh need ever increasing, you know, fundraising to to get the, you know, keep the party going, the stocks have been bad. And it's a very interesting to we've been talking about this on our Substack this week, the interesting dichotomy of, you know, Goldman Sachs versus Blue Owl, right? And Blue Owl's 52- week low. Goldman's at a 52- week high. >> Yeah. Vinnie, go on with that because I know you've done a lot of work on kind of relative valuation and taking a look at the brokers here and where they're trading historically, the Wall Street brokers on book value. >> Well, just on on that alone, it was sort of a three-prong analysis, right, Danny? One, if I just look at the brokers on an absolute basis based upon its historic averages and price to tangible book still uh is relevant for for these big brokers. uh they're trading at all-time highs or close to all-time high price the tangible books. So, in and of itself, that would tell you if you own them, maybe you should trim. In my view, uh, if your if your portfolio is set up another way, perhaps you should short or maybe on an absolute basis, the earnings expectations for next year are going to be lower. Perhaps that second part of the analysis comes is that I believe all of capital markets are intertwined. Um, and and they're all connected. So it was it's a struggle for me to see where earnings expectations for the private equity space whether it's markdowns or less flows or less realizations uh are coming down or at least coming down relative to expectations and it's such a big big piece now of the banking system um providing capital markets advisory to these names that brokerage earnings are going to continue to thrive while these things continue to deteriorate. So my big call here is convergence. Something has to converge. And then if I marry that with valuation, uh it just said to me that the brokerage on a riskadjusted basis, the big brokers are more short than a long. Uh I'm not really comfortable going long to private equity names just right now, but they are down a lot. And and to me, the easier Vinnie, they're down, but they're not like they're not they're cheap. I mean, Blue Owl is the same PE as as black as Goldman Sachs. So, you know, we we've been kind of going back and forth, jousting a little bit back and forth. Is that I'd rather buy Goldman over over Blue Owl here at the same valuation. You know, the the problem with Blackstone is it's 25 times earnings and you have a lot of incentive uh fee income in that in that earnings. And so, as and as we've seen, you know, real estate realizations are very low. >> You're channeling your inner Danny. So, so, so I I I chose a short, >> but I didn't choose both of them to be short. So, now I'm being yelled at >> for for for for uh >> How dare you? Only one versus the other. How dare you? Um, >> by the way, when by the way, that that that move that Blue made the other day by merging, I guess, one of their funds into their BDC if I'm not mistaken. You guys can correct me if I'm wrong. those type things when you start I'm not saying good bank bad bank or when you start to see that shifting because you want to avoid redemptions or whatever it might be you have to ask yourself that question I'm not saying it's illegal I'm not saying it's nefarious at all but as an investor from a protection perspective let me just back up when I say bubble private equity is fine like there's enough lines in Blackstone and Apollo these companies are not going anywhere I'm really talking on the private credit lines of business that have to do with either AI or to Vinnie's point some of the loose lending stuff that we're seeing and we're seeing defaults occur. And so when you're paid to gather assets and get a management fee, you're paid to deploy them. Why? So you can go out and raise another fund. And that those are longtail management fees that come in on a fund of 10, 20, 30 billion. So these companies aren't going anywhere. But I think it's key to know where they're allocating, why they're allocating, you know, and how they're allocating in terms of the, you know, the terms and stuff like that. So I just wanted to close the loop on that. interesting point on on blue alowl is is you know the firm started 10 years ago right and now it's one of the biggest asset managers in the world like putting to that much capital to work in that short a period of time is is hard to do right and and I like to say that you know some of the best investing is just sitting around waiting for good ideas you can't do that you know when when the money's coming in the door you're paid to deploy it just like that the you know blackstone happened with the bite they got so much inflows they had to put all that capital to work at the peak market and during COVID and so you know that that's the that's the problem and and that's what that's why you're not going to see great realizations come out of these funds is that because everyone you know so many assets are also chasing you know too all that money is chasing two fu assets at the same time so the returns are going to go down >> and so >> and in some respects AI filled a hole hole for uh direct lending because they were just raising so much money they probably didn't know where to put it and then all of a sudden AI data centers come into play and they could just fund those at at higher yields. It it just seems like is real true underwriting going on given how much headers given how much money has come into the system and they have to put it to work. My gut answer says probably not. But that said, I think, you know, a lot of these, you know, Meta is a pretty good credit. You know, Amazon's a pretty good credit, Google's a pretty good credit. you know, I guess when you look to OpenAI, I guess it's got backing from from uh Microsoft, but that's not as good of a credit, I guess, or >> well, one of the names within credit in that world, and we actually talked about over the last year why kind of tight credit spreads aren't a leading indicator of as much of the health of the government system as they are about how people want to avoid treasuries potentially and buy these corporate credits, which have better balance sheets and are safer. However, Oracle has been the red flag name that, you know, the red flags come out on that thing. Um, you guys traded it well. Uh, Dan had a great call on it, Nathan. You know, literally, we were out with we were out with him in Las Vegas the moment that they reported the quarter and the stock market cap moved $250 billion in a day. Stocks pulled in what 30 35% maybe since that high. I don't know exact lower than that that that initial >> maybe even more. >> But that to me is and again, I'm sure they're going to be fine. Oracle, but that was the hype, right? Those are the type things you need to watch for, right? >> I mean, when when Moody's and S&P downgrade you to junk, you know something's really wrong at that, you know? >> Well, because they're always so good. Mood is at S&P. >> Yeah, they're so good. Yeah. Speaking of another sector that got thrown into the junk that on days when the markets are having you know bad days overall certainly the NASDAQ they kind of get the benefit of flows and that's been energy specifically maybe even natural gas is a real uh you know power provider uh to the AI space I know you guys have done a lot of work there um on our substack you've talked about Trans Ocean RI uh more than I think I want to say six four to six weeks ago um looking for value there tell me your thoughts on energy here. It seems like a pretty safe place to kind of hide out here in the market, >> you know. Yes and no. We obviously we've been doing a lot of looking and and watching about what's going on. And when you when you see stuff like that Nvidia's got, you know, three times the market cap of the entire energy sector, you know, you should probably start looking around. You know, that said, oil's still $60 and, you know, it it doesn't seem to want to get off the mat. And so what we've been doing is trying to do research, you know, when prices are low and trying to figure out what we want to buy in case, you know, prices do move. and and um you know one of the you know one of the things that was po we looked at in terms of um some of the offshore providers that's that's kind of where we went first and you know because in terms of onshore you know some of the growth slowdown and they they've gone to look at in offshore and so it hasn't quite turned yet and and rigged that their the last I think with their last capital raise so that was a good entry point you know I don't know if I would chase these names right now But I think it it I think energy in general is a good place to start to do work you know because if if Saudi does change their mind and um you know oil prices start to you know head to the mid60s and maybe even $70 I think a lot of these stocks have really clean balance sheets you know I mean the entire sector is buying back stock um has healthy dividends and so I think that's a place where as a contrarian I think I would look As a value investor, I laugh because the energy space can be a a dangerous place because there's so many there's so many things that that look and meet our eye, right? As Porter said, valuation, balance sheets, improvements, dividend yields. Um what but you you have to understand for the most part if the underlying KPI KPI doesn't have some form of positive rate of change, the investor TAM is just so low, no one's going to come. So what we, as Porter said, what we've done was we've drilled, no pun intended, a little deeper and chose names that fit all those characteristics with quality management teams that were actually doing something about the excess cash flows that they have, whether it's through share buybacks in in a major way or uh debt payowns such as Trans Ocean or a potential M&A play uh like Taier. And I'm not giving any new news out that was on the transcript. They've they've been raising capital. They had So, this is not this is not getting anyone into trouble. They they've already said that they would like to buy something. Uh and if they do so, because they're the 400 pound gorilla in a very small space, uh they should be able to extract um economics and increase their moat. So, that's where we've been trafficing. Like Porter said, we we don't just discriminately buy them. We wait for dips. we do our work. So that margin of safety in our cost basis is really low. >> You know, we we were looking at ENP name yesterday trying to do work on it. You know, it's called just over three times EVIDA has a 5% dividend yield is returning, you know, uh returning uh shareholder funds, you know, shareholders, returning capital to shareholders in terms of buy dividends, buybacks, and paying down debt. and you know they're being really prudent and so you know that's the interesting thing right and so you know not many people want to buy and hold and wait on these names I mean it's a very hard thing to do being patient with with some of this stuff and you know hoping that maybe oil goes up and so in that sense it's a hard trade and trying to time the inflection point can be difficult and so that's kind of what we're doing and that's the only kind of value we out see out there at the markets you know we're looking at we talk about Home Depot today, you know, earnings were weak, but you know, and and the stocks at a 52- week low, but we look at it and say there's not value there yet, right? That I think that, you know, still trading rich on a on a priced earnings on an EVDOT basis. And so, as as sort of value investors, we sort of try to find out where there's real not a lot of downside and asymmetric upside. And so, that's that's where we're hunting right now. >> All right. Well, with that, you got a Home Depot founder, Arthur Blank, that owns the Falcons. You got an oil guy, Jerry Jones, that owns the Cowboys. It's NFL pick time. >> Good. >> Week 12. Thank you, buddy. Uh, NFL week 12. Last week, I was two and one, so off the 500 Schneider, 1413 and one. You would still have to pay your local bookie on that one on a net basis with Vig on that. So, it's not winning, but I'm close. All right. I've won with the Eagles in the uh the last two weeks. Okay. And they look good. Now they're going into Dallas and they're laying three and a half and I get it. Dallas has looked inconsistent, but I'm going to take Dallas at home getting three and a half. The Eagles offense is just having some issues. Dallas defense isn't great, but I maybe it's a high-scoring game, but I think Dallas keeps it close. I think that win last night. You guys have thoughts on that one before I get to my uh second pick here? >> Dallas defense a little better with Quinnon Williams there, so you know. Yeah, sure. >> Well, that's true. That's true. So, we got that. All right. That's my first pick. The second one, >> although he's bringing his bad Jets juju to the Cowboys, that might that might be a bad pick. >> No, but that being said, anyone who leaves the Jets usually lights it up. Look at Leonard Williams in for for uh Seattle. So, continue. >> And another exjet that that Gino Smith um Dallas got some momentum from that game last night by destroying the Raiders. So, another Jet connection obviously. All right. The other game though is the Chiefs coming back home. My one loss last week was taking the Chiefs at Denver. They didn't look great. Denver defense was tough. Uh they just didn't have enough. But now they're coming home laying three and a half against the Colts coming off of a buy. I get it. I was short Daniel Jones when the year started. I covered him too early like four weeks ago. He's been really terrible overall the last few weeks. I I think the Chiefs are going to focus on shutting down Taylor in the running game and let Jones try to beat them. And I think Jones old habits are all coming out. The fumbles on the sacks, the bad decisions, interceptions. So, Chiefs at home make a statement game late three and a half against Daniel Jones and Guyadami's ex- favorite player there. What do you guys think that? >> Well, now you have a uh long 1xjet and short 1xjet with they got sauce Gardner for the uh Colts. >> That's a good point. I I can't see the Chiefs losing three games overall. >> I I think I'm long Mahomes for the rest of the year. Like I I I can't see him not making the playoffs. I >> That's like being long the market in December though, Vinnie. It's like, you know, 83% of the time it goes up. >> If it works, just do it. >> Yeah. When you see a picture of Daniel Jones and Mahomes next to each other, I'm going to take Mahomes on that every single time. Well, guys, listen. I appreciate you guys coming on last second this week. Um, I actually have JB McKenzie in a few weeks coming on. He runs the prediction market stuff at Robin Hood who we all met with in Las Vegas. This will be great timing update from there and all the things that are going on in Kowi Poly Market, DraftKings, FanDuel. Tons of stuff to talk about there. So, I'll save that subject matter for then. But, uh, guys, thanks so much for coming on. >> Danny, you you going to, uh, you gonna be long into the print tonight or what are you doing? >> It's a good question. >> Is it tonight or tomorrow night? Oh, when this comes out, it'll be that it'll be night. You're right. It'll be Wednesday night. >> No, I don't think so. Um, I'm not even going to wager because depends on where the stock closes. But on the chart, tell me on the chart. This is a huge obviously level four. This is kind of where it's been battling back and forth for a while. I'm not a technician, but that's a good Carter worth question on that. I'm sure >> you know who's gonna make money. You know, Vinnie knows. Vinnie, who's going to make money tomorrow? >> The Night King. >> Yep. The Night King. >> Ken Griffin. >> The option market makers. You have to The options are implying, I'm sure, a grotesque move for such a large market cap name. So, you probably want to be the casino tomorrow night and just take in all that premium would be my guess. if I were to weigh you on it. But anyway, all right, guys. Um, have a great Thanksgiving. Love you. And, uh, be back on here soon. I appreciate you guys coming on. >> All right. Feel better, Danny. >> All right. >> Thanks for listening to the On the Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the on the tape channel on YouTube and give us a thumbs up there as
Getting Our Ducks In A Row with Vincent Daniel & Porter Collins
Summary
Transcript
Welcome to the On the Tape podcast. I'm your host, Danny Moses. Back together again with my boys Porter Collins and Vincent Daniel for another What Are We Doing Guys. Thanks for joining me today. I'm a little bit under the weather, so appreciate you guys uh coming in here. >> You're you're a warrior to uh be on the podcast here today. So, uh well done. >> Absolutely. >> Let me just say that without getting into details, I had a little health scare. Had to go get cared for by doctors and nurses. And you forget all this rhetoric we hear in drug prices, ACA reimbursement, health insurance companies, all this stuff. We totally forget how dedicated nurses and doctors are. And I think back to COVID and the essential workers, nurses, I think over 3,000 died during COVID. So, whatever your opinion is on on all this other stuff, just know that I mean, I had incredible care doctors and nurses. And I think we lose sight of that when we're talking about all this. I had to get that off my chest because tremendous people that dedicate their lives and I'm sure that AI can improve a lot of things within administrative stuff and healthcare for sure signing paperwork you know you sign a thousand things those things should be simplified but when it comes to compassion and care and human element of it I'm sorry but you can't substitute that I don't care what so I just felt the need to get that out of my system and I'm fine and I'm on the mend so don't worry about me um but I just thought I should uh echo go that. So that's my lead in guys. >> But under a 24-hour turnaround from you is quite impressive. So >> yeah, that's good. Well, I'm happy to be with you guys. Great to see your faces. And so with that, let's get that out of the way. Let's move into kind of the macro on the markets. Um, you know, we kind of felt a lot of stuff going on the last few weeks. People have questioning the AI sustainability, not of the kind of the macro trade. I mean, it's still intact the same way that was, but the math behind it and the companies within it. And we're starting to see kind of a breakdown of kind of the pretenders I will say and the real companies you know names that are getting hit right now like the core weaves and the super micros of the world that feel like there's no sponsorship. Give me your thoughts kind of on the broad view as we head into Nvidia's uh quarter here which is going to be tomorrow evening. >> It's pretty funny. Everyone uh has been reaching out to us for for Michael Bur's contact information. They everyone wants to talk to Michael Bur about what he thinks now about uh this stuff. And you know, good for him for for timing it pretty well. And you know, the AI noise was obviously hitting a crescendo and you know, the Sam Alman has been in the press for, you know, last couple weeks and kind of making some goofy statements and stuff like that. And so, and obviously you got Meta, you know, down a lot on this. And and the the question is is how sustainable is this capex? you know, I think they're going to spend a lot of money on AI and AI is going to be with us for quite some time, but you know, how long can um Meta and and I think Google's numbers are up 85% year-over-year growth in capex, how long can they sustain themselves? Meta was up 125% year-over-year. How long can they sustain that year-over-year growth, I think, is the question. you know, as we know, it reversed the the clock a couple years to the to the metaverse question and people were upset and when Meta, you know, went under $100, people were very upset about Meta. Meta cut the capex and stock ripped again. So, it'll be, you know, it's not going to play out today or tomorrow, but what happens to Meta if they say, "Hey, we're going to flatten out capex." You know, stock probably does better. Does Nvidia do better on that? Probably not. But that's a different story for a different day. So, it's amazing to me how much price dictates the narrative of the story that we're talking about. And so, markets are down. So, now we're all questioning AI. If markets were up, would we be questioning AI? Probably not. Uh to me, the actual underlying data that is coming out um is still coming out. Like just today, Microsoft and Nvidia invested a bunch of money in anthropics. So, as Porter said, we're going to continue to see investment in AI. The question is whether it's enough for people. Uh but the market is reacting and and probably reacting correctly in the fact that you have questionable debt issuance and what is going to be the return on invested capital for all these companies. And and if we just take the internet, which hasn't been that long ago, like 20 20 25 years ago, there was massive capex, there were a lot of losers, and there were a bunch there were a few winners. And I'm I'm just going by that blueprint 20 25 years ago. That's that's what we're going to see again. >> No one's questioning the secular trade of AI and that is here to stay, but you're right within that. And people always say, "Oh, it's different. It it definitely rhymes with the dotcom bubble that we all live through and traded through. The one thing that's interesting back to Porter's point about Meta is, you know, they're not just using their balance sheet. And that should tell people something, right? That their their ability to go out in the private credit market and then get it funded by retail investors. The, you know, the um changes which have gone on for retail investors ability, which we always joked about, but in all seriousness, when that ends up on your desk is probably, oh, I get the opportunity to invest in a data center. I'm going to get a 10% return. You don't look at the fees. You're just so excited to have the ability to invest in it. always question that stuff because you know why why is it negative selection more times than not it ends up on your desk but good on meta for getting that last 40 billion or whatever off balance sheet and we've talked about soft bank in the last few weeks on our what are we doing contrarians at the gate substack which I would tell people uh we have a lot of information there as well just to give that a plug um about that and about these trades and our chats in that room with brilliant people going back and forth and so to your point Vinnie made the best comment is no one questions the market or stocks or fundamentals when the stocks are going up. It's always when they're down, why are they down? And when you start to do that and start to do the math, and Chainos does an amazing job right now, when you know, this is his type of market where facts start to matter and he lays out kind of the math. When math starts to matter and it's not just dream the dream, then things change. And that's a healthy rebalance. And I would tell people this last thing before I turn it back to you guys is you buy the quality on dips like this and you're going to be fine. um you know you you you buy the metas, you buy the Microsofts like on big draw downs and stuff like that because you know that there's there's safety there but when you're going to the pure plays or things that are dependent on funding or this vendor financing or stuff that goes on musical chairs has a way of stopping and you know chairs are getting pulled. That's it guys. That's that's kind of how I feel. Well, well, you know, the the Jim Chainos has been on this data center thing. I'm looking at DLR here for uh for reference, but stocks been flat for five years and he's been right to, you know, these things have been negative cash flow monsters. And then CPY put put a piece out, you know, I would say maybe five, six months ago talking about, you know, the the how the AI doesn't, you know, put uh, you know, doesn't pencil out. And I was thinking about it last night in that fact that you know I pay more in my YouTube TV um than I do for my uh Gemini, right? It's like I think it's like a hundred I want to say 100 bucks 100 plus bucks for for my YouTube TV, but it's 20 bucks a month for Gemini. I pay more for my internet connection than I do for my AI. And so if you think about that and you think about the relative market caps of AI versus all the other stuff that we do, it's just so outsized. I mean, there's been a chart going around about how Nvidia's 3x the market cap of the entire S&P energy sector and it has 80% of the of its cash flows. So, you know, there there's it's it's in this meme territory and obviously these companies have been tremendously profitable for a long time, but question always comes down to valuation and and uh what is it worth and is this the peak of the the the insanity? I I don't know. >> You know, Vin, along those lines, uh switching here to crypto, um you know, we get asked a lot about crypto and I think the three of us are relatively neutral on it. We weren't bullish. We we don't want to be bearish on it just because we get it. We know how gold's viewed. We get it how the Bitcoin people want to view it. Although Bitcoin story keeps evolving. We don't want government regulation. We crave government regulation. It's a store of value, whatever. But when you the same point I just made about stocks dropping and finding a a point where you can start buy them. How do you kind of equate that into crypto just on a relative basis? Oh, it's down 25%, it's a buy. Like give me your thoughts on that. I swear I'm not trying to trick you. I just as a fundamental bottom up. I think I know the answer, but how do you think about that? >> Well, first off, let's differentiate. I was starting to laugh. Um, let's separate crypto into its two components, or at least the way I do it, Bitcoin and the rest, right? And generally speaking, I I have an appreciation for Bitcoin simply because I think they took the PowerPoint presentation of gold and digitized it, right? Unfortunately for Bitcoin, it doesn't act like gold. Meaning if you look at the correlations of Bitcoin relative to other securities, it tends to be a risk on liquidity on asset. And I think something interesting is happening today. the rest of crypto. I keep searching for a use case, Danny, and I can't seem to find one other than gambling or if you live in a jurisdiction like Venezuela or or some other country where they don't appreciate um the fiat currency and and damage the fiat currency, it makes a lot of sense. What's interesting today is that and I also believe like further step that because of the Trump administration's affinity for crypto and Bitcoin, it kind of serves as a leading indicator and a barometer of what is happening. So all that said, today is the first day in quite some time that crypto is rallying because crypto has been dirtnapping for the last few weeks. And so I'm starting to believe that well why is it rallying? Like it doesn't make sense that the NASDAQ's down 12 bought the dip. So maybe that's it. >> Okay. But but but perhaps that perhaps that's it, Porter. Perhaps someone in the Trump administration is buying it and something's coming out in a day or two, right? Like I always view it as saying, "Oh, I'm clearly not in the know with these things." So the fact that it it is showing strength in a day of weakness interests me. >> People viewed Gary Gensler um you know negatively in terms of his views on crypto and I get it. Um and he was trying to protect investors. I really think he had you know you know investors in mind thinking let let me protect you from these levered vehicles, the leverage vehicles, these lending vehicles, all the stuff associated with it. And I think a lot of the pure crypto people appreciated it to a point like okay let's but what we're seeing now to Vinnie's point is the Trump administration turning a blind eye pardoning CZ doing all these things and we've seen in the last few weeks liquidations or too much leverage being pulled in or the MNABs as they call them the navs on some of these companies that are two 3x the underlying crypto which makes which we all know makes no sense those have come in now so you get a deleveraging type adage and Vinnie's point we don't know what's going on today for all we know Micro Strategies back in the market buying Bitcoin and that and people front run that and get ahead of I don't know. My point is though is that investors beware and stay pure like you just talked about in stocks by owning quality to Vinnie's point there's Bitcoin and kind of there's everything else and I get it Ethereum and you know Ethereum and all these other applications which might come in stable coins but sorry Porter I just wanted to throw that in there before you went. No, I listen, I think that the three of us have had a very negative uh opinion of everything else in crypto. You know, the the the Baron coin, the the Melaniacoin, the Trump coin, the dog with hatcoin, the Dogecoin, you know, it's >> Fcoin. >> Yeah. >> Yeah. You deserve to lose money if you lost money in those things, right? You really do. >> And so, you know, Bitcoin is an interesting I just view it as an interesting trading vehicle. If I'm looking at at the um you know last three pullbacks, there was a pullback from the peak Trump euphoria to uh liberation day that was a 30% pullback. The in 24 we had a you know uh 30% pullback and here lo and behold we have a 30% pullback. So maybe this is just normal course you know volatility for for Bitcoin. Um, you know, I I don't really have very many thoughts of it, but if it if it, you know, it it got to an interesting level on a on the charts, I might buy it. But, you know, aside from that, you everyone knows that our our preferred debasement vehicle is gold. So, that that's how we view it. And, you know, the what's China buying? They're buying gold. They're not buying Bitcoin, right? Maybe the people within China are trying to buy Bitcoin and move it to get it out of China, but the central bank is is buying uh is buying gold. Let's move on to gold. Obviously, that's a good segue, Porter. Um, but I also want to close the loop on Bitcoin that I think it's perfectly fine to have that as an asset in your portfolio to some degree. I I I see nothing wrong with it at all if you can sustain all this volatility. Just don't overtrade it. If you're really a believer, you know, it's going to go up in the long term, great. All right, on to gold. Um, hanging around 4,000 um key level kind of bounced off of that here. Huge runup. I think we're all still very positive on it. There's nothing that I see in the macro that changes my view and I think your view as well. I don't want to speak for you guys. I had Luke Roman on the pod last week. Obviously, we know his thesis on gold. He thinks it's going to 10 then 20,000. It's going to replace the dollar, replace US treasuries, etc. He doesn't see that stopping. We given the debt levels, but Vinnie, maybe start with you, you guys thoughts. And I think that the names and the gold miners that we've talked about here before are really a great way to kind of express that view if not the commodity itself. >> It's really funny for us. We constantly underwrite our our views on gold because it's a very big position. So we have to and at the end of the day it was a classic Steve line just leave it right and and the reason why we conclude just leave it is because debasement's probably our best theme and as and when we look towards what the government fiscal monetary nothing is going to seem to as Lyn Alden says nothing stopping this train. So that said, >> Vinnie, I'll push back on you in this. How about this, >> Steve? You just mentioned Steve. Steve would say, "Oh, you guys are doing the oi the deficit thing again." >> Yeah. Yeah. Yes. And God bless Steve. He's right that if you just look at the surface of markets, right, just just it's almost like I I always equate it to being a duck on the water. If you look at a duck that's floating on the water, it's so elegantly moving on the lake. But you what you do not see are the legs and the spinning that's going underneath to make that elegant that duck look so elegantly. Right. What we look at Porter is what in the world does the government and and the monetary have to do in order to make Steve and everybody else go on TV the next day and advocate a position in Nvidia or Meta or or Amazon or anything else of that matter. And sad my brain goes to what's going on underneath. And what we see is constantly increasing and leveraging controlling volatility and making sure that some schmuck is buying our treasuries at 50 to1 leverage. And to me I say well that's the basement. And so and and look both of them are the basement vehicles as we speak about it. Amazon and Meta and the Max 7 are the basement vehicles. They got great cash flows. There's nothing wrong with it. Gold is also the debasement vehicle because the thing that's depreciating is the value of the dollar. And I and to back to your question, that's longwinded, Danny. I apologize, but to get back to your question, that's that whole conversation happens all the time for us and it's just a natural conclusion that gold should be fine. Does it need to rest for a little bit as the moving averages catch up to it? I think the answer is yes. But I I'd be more than happy if gold sat there being being invested in the miners and some of the developers. I'd be more than happy if gold just sat between 3,800 and 4200 for a few months. But, you know, listen, if if I stir your cocktail even even more here, Vin, you know, the the the deficit keeps getting worse because the economic data that we're looking at that the whole world's nervous about and pointing out that the, you know, Home Depot is weak, the the builders are weak, consumer discretionary is weak, jobs mount uh losses are mounting, you know, that keeps the underlying deficit higher, right? cash or you know flows into the government weaker and so I I think that that's that's what I think we're looking at and and the funny question poised to us is that you know gold and the gold miners I think gold miners are up 100% this year but over five years they're up 80% or 85% I'm probably getting the numbers wrong but so why why in 2025 what was so special about it in 2025 and I think some of it is people finally coming to the realization that you know the debt's mounting where I think we're at 39 trillion and 105 trillion off balance sheet and you know if you look in the way of a company we're negative two trillion in earnings right there's no way that debt's being paid back without printed money right that that that's that's the this is you know this is why you know we stay stay bearish for too long most of the time we look at the at the underlying guts of of what's going on, what's keeping the duck looking pretty on top of that water. And it's it's just the everinccreasing debt levels. Um, >> yeah. And I would say this that when you have several or a few Open AI executives effectively saying, well, if we're wrong on our timing, the government's going to bail us out. Um, that's great. If you're if you want to be long AI and that's the attitude, you better be long gold because the only way that they're getting bailed out and they may indeed be too big to fail. When you tie in the private credit bubble and you tie in um AI and all the leverage which is, you know, quickly mounting in the space and when you change that numerator, meaning to Porter's point, revenues are less coming in, right? But your your debt is growing. That's a witch's brew and quote another chainos quote today. things that only to me adds fuel to the fire, you know, to kind of be long gold here. And I think the belief on the moral hazard stuff is within private credit and open AI is, and by the way, government's buying stakes in companies already that the government's going to come along. But when does it matter when I I don't know, but I would just again third time on this pod, stick to quality, the names that you're >> I I'll risk throwing my hat in the ring in terms of this this private credit thing. I don't know if it's a bubble. How do you define a bubble? But listen, I I think the underwriting has been poor, right? And that that's that's fairly clear. Um, you know, the the the same stuff that the banks did in in ' 0708 uh sorry, 05 to 08, you know, was was bad underwriting, right? They they you know, the covenant light loans, you know, that that the banks don't do that anymore. And so where can they do that? they did it in the in the private credit arena. So, I don't know that that it's a bubble that cracks. I I think the people that invested in the last vintage of of private credit funds, the returns are going to suck, right? And and you might not see that cash back for a long time. And that's why you're seeing a lot of these um you know, uh public companies like Blackstone and and and Blue Owl and and Aries and Apollo, the stocks have been terrible, right? Whereas Goldman Sachs stocks been fine, right? But the but the the the companies that uh need ever increasing, you know, fundraising to to get the, you know, keep the party going, the stocks have been bad. And it's a very interesting to we've been talking about this on our Substack this week, the interesting dichotomy of, you know, Goldman Sachs versus Blue Owl, right? And Blue Owl's 52- week low. Goldman's at a 52- week high. >> Yeah. Vinnie, go on with that because I know you've done a lot of work on kind of relative valuation and taking a look at the brokers here and where they're trading historically, the Wall Street brokers on book value. >> Well, just on on that alone, it was sort of a three-prong analysis, right, Danny? One, if I just look at the brokers on an absolute basis based upon its historic averages and price to tangible book still uh is relevant for for these big brokers. uh they're trading at all-time highs or close to all-time high price the tangible books. So, in and of itself, that would tell you if you own them, maybe you should trim. In my view, uh, if your if your portfolio is set up another way, perhaps you should short or maybe on an absolute basis, the earnings expectations for next year are going to be lower. Perhaps that second part of the analysis comes is that I believe all of capital markets are intertwined. Um, and and they're all connected. So it was it's a struggle for me to see where earnings expectations for the private equity space whether it's markdowns or less flows or less realizations uh are coming down or at least coming down relative to expectations and it's such a big big piece now of the banking system um providing capital markets advisory to these names that brokerage earnings are going to continue to thrive while these things continue to deteriorate. So my big call here is convergence. Something has to converge. And then if I marry that with valuation, uh it just said to me that the brokerage on a riskadjusted basis, the big brokers are more short than a long. Uh I'm not really comfortable going long to private equity names just right now, but they are down a lot. And and to me, the easier Vinnie, they're down, but they're not like they're not they're cheap. I mean, Blue Owl is the same PE as as black as Goldman Sachs. So, you know, we we've been kind of going back and forth, jousting a little bit back and forth. Is that I'd rather buy Goldman over over Blue Owl here at the same valuation. You know, the the problem with Blackstone is it's 25 times earnings and you have a lot of incentive uh fee income in that in that earnings. And so, as and as we've seen, you know, real estate realizations are very low. >> You're channeling your inner Danny. So, so, so I I I chose a short, >> but I didn't choose both of them to be short. So, now I'm being yelled at >> for for for for uh >> How dare you? Only one versus the other. How dare you? Um, >> by the way, when by the way, that that that move that Blue made the other day by merging, I guess, one of their funds into their BDC if I'm not mistaken. You guys can correct me if I'm wrong. those type things when you start I'm not saying good bank bad bank or when you start to see that shifting because you want to avoid redemptions or whatever it might be you have to ask yourself that question I'm not saying it's illegal I'm not saying it's nefarious at all but as an investor from a protection perspective let me just back up when I say bubble private equity is fine like there's enough lines in Blackstone and Apollo these companies are not going anywhere I'm really talking on the private credit lines of business that have to do with either AI or to Vinnie's point some of the loose lending stuff that we're seeing and we're seeing defaults occur. And so when you're paid to gather assets and get a management fee, you're paid to deploy them. Why? So you can go out and raise another fund. And that those are longtail management fees that come in on a fund of 10, 20, 30 billion. So these companies aren't going anywhere. But I think it's key to know where they're allocating, why they're allocating, you know, and how they're allocating in terms of the, you know, the terms and stuff like that. So I just wanted to close the loop on that. interesting point on on blue alowl is is you know the firm started 10 years ago right and now it's one of the biggest asset managers in the world like putting to that much capital to work in that short a period of time is is hard to do right and and I like to say that you know some of the best investing is just sitting around waiting for good ideas you can't do that you know when when the money's coming in the door you're paid to deploy it just like that the you know blackstone happened with the bite they got so much inflows they had to put all that capital to work at the peak market and during COVID and so you know that that's the that's the problem and and that's what that's why you're not going to see great realizations come out of these funds is that because everyone you know so many assets are also chasing you know too all that money is chasing two fu assets at the same time so the returns are going to go down >> and so >> and in some respects AI filled a hole hole for uh direct lending because they were just raising so much money they probably didn't know where to put it and then all of a sudden AI data centers come into play and they could just fund those at at higher yields. It it just seems like is real true underwriting going on given how much headers given how much money has come into the system and they have to put it to work. My gut answer says probably not. But that said, I think, you know, a lot of these, you know, Meta is a pretty good credit. You know, Amazon's a pretty good credit, Google's a pretty good credit. you know, I guess when you look to OpenAI, I guess it's got backing from from uh Microsoft, but that's not as good of a credit, I guess, or >> well, one of the names within credit in that world, and we actually talked about over the last year why kind of tight credit spreads aren't a leading indicator of as much of the health of the government system as they are about how people want to avoid treasuries potentially and buy these corporate credits, which have better balance sheets and are safer. However, Oracle has been the red flag name that, you know, the red flags come out on that thing. Um, you guys traded it well. Uh, Dan had a great call on it, Nathan. You know, literally, we were out with we were out with him in Las Vegas the moment that they reported the quarter and the stock market cap moved $250 billion in a day. Stocks pulled in what 30 35% maybe since that high. I don't know exact lower than that that that initial >> maybe even more. >> But that to me is and again, I'm sure they're going to be fine. Oracle, but that was the hype, right? Those are the type things you need to watch for, right? >> I mean, when when Moody's and S&P downgrade you to junk, you know something's really wrong at that, you know? >> Well, because they're always so good. Mood is at S&P. >> Yeah, they're so good. Yeah. Speaking of another sector that got thrown into the junk that on days when the markets are having you know bad days overall certainly the NASDAQ they kind of get the benefit of flows and that's been energy specifically maybe even natural gas is a real uh you know power provider uh to the AI space I know you guys have done a lot of work there um on our substack you've talked about Trans Ocean RI uh more than I think I want to say six four to six weeks ago um looking for value there tell me your thoughts on energy here. It seems like a pretty safe place to kind of hide out here in the market, >> you know. Yes and no. We obviously we've been doing a lot of looking and and watching about what's going on. And when you when you see stuff like that Nvidia's got, you know, three times the market cap of the entire energy sector, you know, you should probably start looking around. You know, that said, oil's still $60 and, you know, it it doesn't seem to want to get off the mat. And so what we've been doing is trying to do research, you know, when prices are low and trying to figure out what we want to buy in case, you know, prices do move. and and um you know one of the you know one of the things that was po we looked at in terms of um some of the offshore providers that's that's kind of where we went first and you know because in terms of onshore you know some of the growth slowdown and they they've gone to look at in offshore and so it hasn't quite turned yet and and rigged that their the last I think with their last capital raise so that was a good entry point you know I don't know if I would chase these names right now But I think it it I think energy in general is a good place to start to do work you know because if if Saudi does change their mind and um you know oil prices start to you know head to the mid60s and maybe even $70 I think a lot of these stocks have really clean balance sheets you know I mean the entire sector is buying back stock um has healthy dividends and so I think that's a place where as a contrarian I think I would look As a value investor, I laugh because the energy space can be a a dangerous place because there's so many there's so many things that that look and meet our eye, right? As Porter said, valuation, balance sheets, improvements, dividend yields. Um what but you you have to understand for the most part if the underlying KPI KPI doesn't have some form of positive rate of change, the investor TAM is just so low, no one's going to come. So what we, as Porter said, what we've done was we've drilled, no pun intended, a little deeper and chose names that fit all those characteristics with quality management teams that were actually doing something about the excess cash flows that they have, whether it's through share buybacks in in a major way or uh debt payowns such as Trans Ocean or a potential M&A play uh like Taier. And I'm not giving any new news out that was on the transcript. They've they've been raising capital. They had So, this is not this is not getting anyone into trouble. They they've already said that they would like to buy something. Uh and if they do so, because they're the 400 pound gorilla in a very small space, uh they should be able to extract um economics and increase their moat. So, that's where we've been trafficing. Like Porter said, we we don't just discriminately buy them. We wait for dips. we do our work. So that margin of safety in our cost basis is really low. >> You know, we we were looking at ENP name yesterday trying to do work on it. You know, it's called just over three times EVIDA has a 5% dividend yield is returning, you know, uh returning uh shareholder funds, you know, shareholders, returning capital to shareholders in terms of buy dividends, buybacks, and paying down debt. and you know they're being really prudent and so you know that's the interesting thing right and so you know not many people want to buy and hold and wait on these names I mean it's a very hard thing to do being patient with with some of this stuff and you know hoping that maybe oil goes up and so in that sense it's a hard trade and trying to time the inflection point can be difficult and so that's kind of what we're doing and that's the only kind of value we out see out there at the markets you know we're looking at we talk about Home Depot today, you know, earnings were weak, but you know, and and the stocks at a 52- week low, but we look at it and say there's not value there yet, right? That I think that, you know, still trading rich on a on a priced earnings on an EVDOT basis. And so, as as sort of value investors, we sort of try to find out where there's real not a lot of downside and asymmetric upside. And so, that's that's where we're hunting right now. >> All right. Well, with that, you got a Home Depot founder, Arthur Blank, that owns the Falcons. You got an oil guy, Jerry Jones, that owns the Cowboys. It's NFL pick time. >> Good. >> Week 12. Thank you, buddy. Uh, NFL week 12. Last week, I was two and one, so off the 500 Schneider, 1413 and one. You would still have to pay your local bookie on that one on a net basis with Vig on that. So, it's not winning, but I'm close. All right. I've won with the Eagles in the uh the last two weeks. Okay. And they look good. Now they're going into Dallas and they're laying three and a half and I get it. Dallas has looked inconsistent, but I'm going to take Dallas at home getting three and a half. The Eagles offense is just having some issues. Dallas defense isn't great, but I maybe it's a high-scoring game, but I think Dallas keeps it close. I think that win last night. You guys have thoughts on that one before I get to my uh second pick here? >> Dallas defense a little better with Quinnon Williams there, so you know. Yeah, sure. >> Well, that's true. That's true. So, we got that. All right. That's my first pick. The second one, >> although he's bringing his bad Jets juju to the Cowboys, that might that might be a bad pick. >> No, but that being said, anyone who leaves the Jets usually lights it up. Look at Leonard Williams in for for uh Seattle. So, continue. >> And another exjet that that Gino Smith um Dallas got some momentum from that game last night by destroying the Raiders. So, another Jet connection obviously. All right. The other game though is the Chiefs coming back home. My one loss last week was taking the Chiefs at Denver. They didn't look great. Denver defense was tough. Uh they just didn't have enough. But now they're coming home laying three and a half against the Colts coming off of a buy. I get it. I was short Daniel Jones when the year started. I covered him too early like four weeks ago. He's been really terrible overall the last few weeks. I I think the Chiefs are going to focus on shutting down Taylor in the running game and let Jones try to beat them. And I think Jones old habits are all coming out. The fumbles on the sacks, the bad decisions, interceptions. So, Chiefs at home make a statement game late three and a half against Daniel Jones and Guyadami's ex- favorite player there. What do you guys think that? >> Well, now you have a uh long 1xjet and short 1xjet with they got sauce Gardner for the uh Colts. >> That's a good point. I I can't see the Chiefs losing three games overall. >> I I think I'm long Mahomes for the rest of the year. Like I I I can't see him not making the playoffs. I >> That's like being long the market in December though, Vinnie. It's like, you know, 83% of the time it goes up. >> If it works, just do it. >> Yeah. When you see a picture of Daniel Jones and Mahomes next to each other, I'm going to take Mahomes on that every single time. Well, guys, listen. I appreciate you guys coming on last second this week. Um, I actually have JB McKenzie in a few weeks coming on. He runs the prediction market stuff at Robin Hood who we all met with in Las Vegas. This will be great timing update from there and all the things that are going on in Kowi Poly Market, DraftKings, FanDuel. Tons of stuff to talk about there. So, I'll save that subject matter for then. But, uh, guys, thanks so much for coming on. >> Danny, you you going to, uh, you gonna be long into the print tonight or what are you doing? >> It's a good question. >> Is it tonight or tomorrow night? Oh, when this comes out, it'll be that it'll be night. You're right. It'll be Wednesday night. >> No, I don't think so. Um, I'm not even going to wager because depends on where the stock closes. But on the chart, tell me on the chart. This is a huge obviously level four. This is kind of where it's been battling back and forth for a while. I'm not a technician, but that's a good Carter worth question on that. I'm sure >> you know who's gonna make money. You know, Vinnie knows. Vinnie, who's going to make money tomorrow? >> The Night King. >> Yep. The Night King. >> Ken Griffin. >> The option market makers. You have to The options are implying, I'm sure, a grotesque move for such a large market cap name. So, you probably want to be the casino tomorrow night and just take in all that premium would be my guess. if I were to weigh you on it. But anyway, all right, guys. Um, have a great Thanksgiving. Love you. And, uh, be back on here soon. I appreciate you guys coming on. >> All right. Feel better, Danny. >> All right. >> Thanks for listening to the On the Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the on the tape channel on YouTube and give us a thumbs up there as