AI Infrastructure: Extensive discussion on data center buildouts, hyperscaler capex, and power constraints driving demand for high-end GPUs and compute.
Nvidia (NVDA): Guest details long-term bullish view, GPU leadership, and strategic ecosystem investments versus competitors.
AMD (AMD): Compared unfavorably to Nvidia’s GPUs, with concerns about competitiveness despite partnership deals.
Microsoft (MSFT): Practical adoption of Copilot today, pricing power likely to rise as enterprises pay for productivity gains.
Tesla (TSLA): Deep dive on EV sales strategy, FSD progress/limits, robo-taxi timeline skepticism, and potential shift toward defense/robotics applications.
Energy Transition: Strong case for solar + batteries as the fastest, lowest-cost way to meet AI-driven electricity demand amid grid/transmission bottlenecks.
Geopolitics & Markets: Middle East conflict seen as near-term volatility but potentially bullish long-term if it reshapes regional risks; vigilance on energy prices and security.
Private Credit Risks: Critique of high-fee structures, liquidity traps, and potential losses, favoring liquid strategies and caution.
Transcript
This episode is sponsored by Interactive Brokers. So, will the US consumer confidence index be above 101 in March 2026? At IBKR Forecast Trader, the yes recently priced at 40% and no at 58%. But markets move fast. Forecast contracts let you turn your views into trades on future events like the economy, climate changes, and politics with very, very simple yes or no prediction style contracts. Explore trending data, spot the trends, and if you get your prediction right, you earn $1 per contract at settlement. Plus, you'll earn 3.14% APY on your investment with an interestlike incentive coupon. And you'll get $3 for signing up with IBKR forecaster, which you can use for any purpose or to start trading. Forecast contracts are not suitable for all investors. Go to ibkr.com/for and turn your views into IBKR forecast trader contracts today. The last trading day for this contract is March 22nd. The Disciplined Investor is all about you, your money, and the markets. Sit back and get ready for this edition of the Disciplined Investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. War and markets not a great mix. South Korea tumbles the most in history. Inflation risk is real again. And the Fed's quandry is getting worse. And our guest today, Ross Gerber of Gerber Kawasaki. All this and much more on episode number 963 of the Disciplined Investor podcast. It's always something these days, isn't it? I mean, the good news is that investors, well, they love their stocks. We love stocks. In fact, it doesn't really matter seemingly if there's a war of something going on in Mexico or maybe even uh an oil embargo, an issue with energy around the world. Yes, the lows of the days held and bounced back extraordinarily on US stocks and we've seen several days of these crazy moves just this week after the missiles were flying over the Middle East. But generally what we saw if you look at this in fact it looks like the trail of a missile when you look at the actual stock on a bar candle style uh uh chart where you see that the lows were down these long tails we call it and then right back up to the top each day that we saw the selloff this week there was a little bit of damage done yes but not so much I mean we're talking about this horrible feeling this crazy amount of risk the volatility VIX moving up to 24 1/2 or 25 and we're talking about 2 to 3% off of the recent highs on most indices in the US. Lots of long tales, lots of continued interest in buying. US stocks were the ones again that we were looking at around the world. A little bit different. Traders picked up buying at the bottoms. No real technicals that were flashing any signals. Just price action. At least as I see it, it was all this, oh my god, it's down so much. Let's buy. It wasn't like, oh, it hit the 50-day moving average, bounced, or the 200, the 150, the 100. Or it wasn't like, oh, the MACD was showing that a conversion divergence into the upside should be played or maybe the R squared or the uh the the the the stochcastics or the Ballinger bands or whatever you want to say. The fact is that it was all about, boy, this looks like it's really sold off a lot. I'm going to buy in now. kind of interesting, but some things were decisively sold. I got to tell you something. When we look at, for example, wow, the Cosby Korean stock market. Now, remember something, this market was up about 150% or so last year, which is an extraordinary number for a developed nation. You don't usually see something like that unless it's Venezuela that has inflation at a,000% per year. The Cosby last year was the epicenter of the tech trade. The opportunity for a very small market capitalized index to gather and garner all sorts of money in and interest thereby pushing it up dramatically. Then the momentum traders took over and it was off to the races. follow through this year with another 50% increase in the first two months of this year until all of a sudden there was a sell-off that was due to what? Well, the Middle East conflict. It was kind of interesting what happened here. We had a few historic days. One day, I think it was on Wednesday, their Wednesday, 12% drop for the market. numerous market halts. And why was that? Well, we had an overbought a fun fundamentally overdone uh kind of a over the skis kind of situation. And once there was a hiccup with investors who probably had an incredible amount of margin leverage in that market, they said the hell with this, I'm out. And because again small capitalized markets and a lot of money moving in moving out, it was exacerbated because of a lot of different things. One of the problems is that many countries like South Korea really doesn't have oil. They're reliant on others. And who are they relying on? Well, in this case, it's places like the Middle East, Iran, etc. And when you see that they are freaking out because of a potential energy emergency, things go a little crazy. And then you add to that the excessive margin that's on the account and the leverage in the system and the momentum players falling over each other trying to get in and now trying to get out. There's people that have left, you know, hanging dry. the rogue was pulled. India is another example of of a market that does an incredible amount of reliance externally for oil. A and by the way, if you didn't see it, there was something else that happened. Europe is now in a pickle. The problem is that in Qatar the one of the largest liquid natural gas LG producers and exporters about 20% of the world's LNG is shut down because of the bombings etc. And that is causing a major crimp. And it's still winter time. We're starting to work into spring here. I know it's it's the beginning of March, but we're working into spring, but yet still winter, still cold, still use of heating fuels, of natural gas, of course, for factories and other things like that, but also for heating. That price skyrocketed the LG price and heating oil. I mean, we saw LG prices go up 60% in one day. I'm talking about European natural gas, the natural gas on their markets. That's a big big big story. The streets of Hermuz is closed. And even with the backdrop, the promises of President Trump offering insurance and maybe even uh escorts, Navy escorts through the Straits of Hormuz. There's a lot of concern that we're going to see oil rising in price. And what's interesting is that oil did already rise in price, but it wasn't, you know, um it's not that big of a deal. It's just not that big of a deal. We didn't see oil really skyrocket. There was some concern about a $20 move. It moved what uh I don't know the range the range was $15, $14. Still not in a place that's you know, you know, above 80. It's not above 80. It's it's it's fine right now. And with that in mind, the concern that everybody had about this huge increase, it's not happening at the moment. At the moment, things can change. There's some reports midweek that talked about how Iran may be out of their missile capability. Then what? They're going to be left all alone. They have drones, but then they're sitting there. They pissed off everybody in the region. And who knows how fast this thing is going to shut down, especially if there's no government, no leadership, no ability to really uh coordinate any of this, which is, you know, that was the goal, right? That was the goal to to cut the head off the the serpent and to reestablish what's going on there and and have basically a regime change that can be much more friendly. And we'll see how that goes. You know, this is a little bit different because there's a lot of religious issues going on with this. is not just simply a leader that's a strong man. This is a religious cleric, the the uh the holy that was taken out and um due to Sharia law and the way that they worked there, you know, it's a little bit of a different environment. But like I said, not easy to point out, but basically we could all say there's a lot going on and and rightfully so. volatility measures are are heightened, but there's a lot of opportunity. Don't forget that. A lot of opportunity on all sides of this trade, whether it's a short side, the long side, a lot of opportunity. I'm going to say it again because I don't want you to forget it. I want you to recognize that this is not about fear and freaking out. We had some people call us last week um you know, wondering about this and nobody was freaking out or were worried to a point that they were, you know, like, "Oh my god, I got to do something bad." You know, people naturally get concerned, upset about this. Now, it also depends on how long you've been investing. If you're new to investing, you're probably a lot more worried, concerned about what's going on. If you an old hat at it, you've seen that wars in particular are those things that initially are shocks to the system, but then they kind of we get used to it. And that takes some time, but and hopefully we're not going to go that long with this particular conflict. But if we do, that's the progression unless something comes home on our turf. But the crazy thing that you have to understand about war is that war in his perverse way is actually good economically in some degrees. Clearly, even if you are the recipient of the bombs, it may not be good for you. and of course you as a person. But the rebuild process is actually economically positive. Think about that. The act of actually getting and having bombs built, munitions generated, manufactured, and then the rubble cleared and then rebuilt. All that is an economic benefit to various parties. something just to think about as horrible as that may sound. We're going to end there on this note because I want to spend a lot of time with our guest today and he's a great one and um someone who I really respect. Uh call a friend uh and uh who is a good friend of the show. Before we do so, I want to talk about Interactive Brokers again because you know it's it's March, right? Tax season. That's where we're at. We're in that in that zone. And this is a good time to meet Portfolio Analyst from Interactive Brokers. The free all-in-one dashboard that lets you consolidate, track, and analyze all your financial accounts in one place. You don't need to have an IBKR account to use it either. Just connect your accounts and see your complete financial picture, your investments, performance, and allocation all in one single screen. Plan smarter with IBKR's new tax and retirement planners, too. These are built around your goals and market assumptions. Get deep portfolio insights with detailed risk assessments and compare performance against more than 300 benchmarks. Plus, manage your with confidence thanks to GIPS. These are verified returns that you can review and benchmark against. Sign up for the free portfolio analyst at ibkr.com/frepa. Now, let me tell you about our guest real quick and then we'll bring him on. He's waiting in the wings. It's Ross Gerber. He's co-founder and president and CEO of Gerber Kawasaki Wealth and Investment Management. He oversees Gerber Kawasaki's corporate and investment management operations as well as serves individual clients. He's become one of the most followed investors on social and on traditional media. His investment ideas and advice have made him a regular in business news and is featured on CNN, CNBC, Fox, Bloomberg, Reuters. You name it, he's been there. He received a BA in communications from the Annenburgg School at the University of Pennsylvania with a concentration in business law at the Wharton School of Business. He also completed a second concentration in classical music studies and attended the Grove School of Music, which we're going to talk about. I have some questions for him. Let's bring him on right now. Ross Gerber, how are you? It's been a while. >> I'm pretty good. you know, it's been a definitely a different week than I would have predicted a month ago, but you know, I I'm pretty happy about um the success we've been having. So, you know, it's interesting. Next week is going to be much different than the week you would have predicted just this week, >> right? And I think that we're sort of entering a new stage of in some ways history that is pretty, you know, uncertain what that will look like, you know, a year from now. >> Yeah. I want to talk about some of your personal stuff first. do a little warm up, let people know a little bit more about who you are. So, >> we know that you're a musician. You're you you played guitar. You play guitar. And who who was I think I know this answer, but who was your earliest mu musical inspiration that really set the stage for I want to do that. >> Well, the real story is a little bit, you know, unique in that I had an experience when I was 16. Um, and in that experience, it involved uh seeing the Woodstock Jimmyi Hendricks performance on video around 2:00 in the morning. And during that experience, I decided that I could not live my life without actually playing music, playing guitar, and playing Jimmyi Hendris. So, my original inspiration was certainly Jimmyi Hendris, and still is to this day. And my my son's name is Jimmy, spelled J I M I. >> Look at that. Now, let's go back also and talk about the early days of your music. Uh, you played with uh the first band you played with was Third Eye and uh you played you >> you played weekly. >> What's that? >> You're digging deep here. >> I got some deep stuff here. You played you played in college. You played a place which was often to this day referred to as the Penstitution, the iconic Smokeoky Joe's. You had a weekly, right? >> That's right. And I love Smokeoky Joe's. And you know, I was back there about 5 years ago and and Paul Ryan still runs it and I walk in there and I haven't seen him in a long time. And I was like, you know, I'm so and so. And he was like, "Oh my god, how you doing? You want to play tonight?" You know, I was like I was like, "Really?" >> Right. You have like a certain memory of that spot that you have something >> I have a thousand memories. I you know, I learned so much playing music in Philadelphia for guys like Paul and and and the Irish guys that ran the bars over there and still run the bars over there. And and I learned life lessons that a kid who grew up in Bair could never learn in Bel Air. >> I love it. I love it. Now and now you're with the Danger Band. That's been your band for years. >> Well, no, that ended in with CO. >> Yeah. Unfortunately, when COVID hit, we were sort of at a high. I had just started a new music company, too, called Cocoon. So, we were like we we rented a house in Malibu, turned it into a studio. It was like amazing. The end of 2019 was like an amazing time in my music career just like building stuff and my band and all this was like coming together and then COVID hit. >> And when COVID hit, it was really detrimental to the music industry obviously. And unfortunately, one of my band members committed suicide and it was a very really hard thing to deal with in April of 2020. Tracy, rest in peace. Um, and so since then I've played live twice and one time I was lucky enough to play with Cisco Adler, a famous artist, uh, and his band. And of course, they make me sound really good. Um, and that was super fun. And I played live once, you know, several years back, but I'm looking to start doing this again, you know, as soon as time allows. I still play every day almost in practice, but >> yeah, you know, playing live is is wonderful. And so I'm I'm kind of trying to find figure out a different way to do it. Um, so I kind of when I built my new office, it's kind of partially a venue. Don't tell. >> That's great. Well, if you need anybody in the band, I could do, by the way, I am a I'm a hell of a triangle and tambourine guy. >> Well, tambourine has a role. I don't know about the triangle music, >> but we can work with a tambourine. All right, let's talk about uh I want to talk about I I have certain things that I put together for our discussion here because I know we can go into a lot of areas and and and >> I want to talk about AI, the revolution, the broader tech landscape and you've been bullish on Nvidia's dominance in the AI space, right? We know that. >> Well, yeah, I've been bullish on Nvidia since I was a little kid. >> Right. Exactly. Since since before Nvidia even knew they were Nvidia. Um that's right. >> Well, they did know then. >> Well, no, they knew about video games. >> Well, video games, they were second fiddle, my friend. by a long shot. >> For who? >> No, come on. They would Well, to the to the to the on the motherboard, it was like, "What chip do you want?" Well, you know, it was Intel, >> right? >> Right. Right. That's true. That's what I'm saying. >> But like, >> but we used to use like, I don't know, PlayStations and and Xboxes or whatever. And and the Nvidia PC route was sort of a different gamer route than the console route, which I was kind of a console guy. So, it was actually at E3. I was telling my kids about E3 because they don't do that anymore. And it used to be an just an amazing experience to go, you know, and that's where I learned about Nvidia because they pulled me aside and I said, "Listen, I'm not interested in chips. I'm interested in games." So the guy goes, "No, let me show you because this is going to make games way better." And that's when I invested in Nvidia. So this was long time ago. And this was before crypto and everything else that got it really going. and and then through uh Tesla was really when I started understanding where GPUs fat fit in the autonomy or ultimately what we call the AI equation now and and it was through GPUs this was now about 10 years ago at CES when when Jensen did his presentation it was like a big epiphany for us and we put millions of dollars into Nvidia then uh in 2016 and and that was about a decade ago and it's been just a wildly successful cost base is zero So that's awesome. >> Yeah, it's like one It's like$1 or2. >> So you recently had a CNN appearance. I think it was like two weeks ago or a week and a half ago and you talked about the AI trade. You t you highlighted Nvidia strength. >> Here's my question though. Um you know and I think as a matter of fact Nvidia came out this week it talked about that they think that last 30 bill with the B is the last time they're going to invest in open AI which I'm I want to get into that discussion in a minute. But do you see any risks in any of this AI discussion? Like for example, energy constraints or maybe >> like with what's going on with anthropic with this not totally out there with anthropic with the government with regulation over investment. I don't know something >> is there something that's concerning? >> Well, my basic premise right now is everybody's concerned about the capex spend and I don't think they're going to be able to deploy it all that rapidly. So that that's my concern which you I think was the first thing you said which was around infrastructure and and infrastructure in the United States especially around electricity is pretty old and poor and so just the idea that we're going to just like rapidly ramp up energy is not that simple or easy to do and it's quite you know expensive to fix and upgrade electrical infrastructure. And so we're in this period of time where electrical electric prices are going up here in LA. It was like a 20% increase in electric prices just this year. And and it's a big hit. Like I was like, "Wow, this is a big difference what we're paying per kilowatt hour than what I was paying." So it went from 25 cents to 30 cents. And I was like, "Wow." You know, like that like the demand for electricity is huge. But the supply and the ability to ramp um this supply is not that easy. and it's quite hard to deploy. So, so my basic thing is you're in this race to meet the demand for inference and you know for uh AI and yet you know these companies are going to struggle to be profitable because they're going to want to deploy the infrastructure and do all this as rapidly as possible and it's very expensive to do it this way. So I think that the profits for AI will be more driven in industries like mine where we can get immediate efficiencies from using AI that are profitable from like day one versus the actual AI companies which have a lot of investment to do before they profit. But I think in 5 years they'll be wildly profitable. >> Yeah. But the the the problem we have right now is that stuck stick on the energy issue for a second here. And you talk about the the infrastructure build and the amount of money that we're talking about from the hyperscalers that are giving and again I want to save this because I have a different part of this discussion about circular and vendor financing. But I have a whole I've been on this bandwagon for a while. I can't get off it. Somebody somebody should talk me off of it, but I can't get any >> I'm going to try to talk you off of it. >> Good. >> But um so >> you know you talk about this energy situation. Recently we saw that there's this thing where data centers hypers scale are going to need to supply their own energy right we were all hoping for >> this this SMR the small module reactors that whole thing with oak blue scale I mean who knows how long that's going to take if it's going to take >> um >> 5 years to 10 years >> five years to 10 years right so everybody was investing that was a big thing talk about the markets you know going in advance of things but where are we going to get the energy to do all this >> we don't have it >> so how does that work so how does that work So, so how it works is, so how do I rapidly deploy new energy? Okay, what Elon did was he just bought a bunch of turbines in Memphis, lied to the government, told them they were temporary, and just been running them all full boore all day long, and it's real bad for the environment, you know, so just running like gas turbines, you know, to make energy, you know, is it pollutes and so there's a lot of rules. Now in Texas, there aren't. So you can do these kind of things which is where they go to by the way. >> Right. Exactly. But in California you're not doing anything like that. So the first question is like how do we increase energy supply rapidly and the best way to do that is through solar deployment and battery systems. So solar is the cheapest way to get energy quickest with battery systems. So we really like that business especially battery. Uh >> the market doesn't like that business though. Let's be honest. Market >> I don't care what the market likes. I know what just saying from a >> I know how it works, you know, right? But like renewable energy needs battery systems to really get the most efficiency out of it. And battery systems with renewable energy have proven to be the lowest cost, best source of energy. So if we really want to do stuff, we've got to just go all in and start, you know, really deploying things like solar rapidly and and we can. We have the ability to do this. So So I think it's just about investment. The second side of it which I think is harder is the actual transmission lines and the actual infrastructure. This is a whole another level of difficulty than just putting up solar powers capturing energy and putting it in in a in a battery or whatever. Now I got to build transmission lines that take this to the place. So if I build my own power around my data center, you know, and then it's a pretty simple process, but that has to be put into the economics of building the data center, which is now I have to build a whole new energy source and transmission for each data center. How much more does it cost to do this? So, so that's why I say it's going to take more time to deploy the infrastructure than people will want to accept because there's a lot of like things that have to be done. And then when you go to the city or the county and you say, I want to add my own energy infrastructure here, it's, you know, you got to deal with politicians, which means nothing happens fast. >> And the problem you also have, Ross, tell me if I'm wrong about this, is the energy consumption that we have right now with, >> we'll call it, uh, AI 1, you know, 1.0 conceptually, right? Then moving into inference and then moving into Agentic is a whole, it's not just a one, two, three. It's a whole different level of of of consumption. it's already like maxed, you know, like we're using Claude a lot here at, you know, at work and and like it'll be like, okay, you've you maxed out your usage today and it's like how much more can we pay, you know, and then it was down the other day because there's so there's just so much demand and and they have to like kind of limit how much how many tokens you're using and you know, a token is kind of like a word and so like the more questions you ask AI and the more it spits out more data, it costs money. M and so they're undercharging for this product right now to get everybody to sign up charging 20 bucks a month. You know, Netflix costs more money and does a lot less for me than AI. >> You know, you talked about this. You talked about like, you know, Grock and Claude uh and Gorac and it doesn't matter the other ones we talk about, they're not going to stay cheap forever, right? So, right now I'm paying 30 bucks a month for co-pilot. Now, I know C-Pilot is a >> is the least good of all. It's the least, but it does a good job for things like uh, you know, grammar check this, you know, rewrite this sentence, uh, make sure this email looks good, look like, cut and paste, right? Yeah. Right. Or or look up look up, um, you know, look up, uh, find information on this client's information in my work side, you know, that that's all in there. But um do we think that the differential between pricing where you have AI models and the AI companies that are the open quote unquote open source, right? And and and the for the good of mankind versus the business-based ones, you know, those two competing forces these days, which everybody's starting to move much more towards the other side. Forget about the good of mankind. Um is this going to start costing us a lot more? Um, I don't think it's going to be right away, but yeah, for sure. And people will pay a lot more. But you have to look at it like as a cost benefit, you know, like how much am I willing to spend to get huge efficiencies in my business and, you know, not have to hire employees that we were going to hire. So, if you just don't hire one employee because of AI, let's say that's saving you hundred grand a year right there. So, like, wouldn't you pay $2,000 a month for Claude, you know, and people will, and that's what it's going to be, you know, and so companies will pay a lot more than individuals. I think there'll be free versions of these things obviously to get that'll be like ad supported, you know, and then there'll be like the $30 or $50 or how however many like tokens you're really using, you know. So it'll be based off usage because it's kind of like when the internet started and AOL used to charge, you know, $29.99 a month, you know, >> and so that they needed to do that. And when AOL said, "Okay, we're not going to charge anymore." It was down, you know, like the demand. >> I never understood that. I never understood that whole thing. >> They had the idea was to get everybody on the internet. Like it was just get everybody on the internet. So if we do like as soon as we could afford to like just not charge, it was better to get scale. And AOL was the biggest remember Time Warner of all people. >> Of course, >> you know, of course. >> Um, and so I was there 99 top of the market. AOL Time Warner, you know, that's why I was like, don't buy Time Warner Netflix. Please don't. It's it's like a curse, you know. Um, >> so when it comes to this AI uh jobs uh cannibalism, if you will, to a point, there's been a lot of discussion. I've heard it's almost I I I've been saying that it's it's he who protests too much. this whole idea on every out of everybody's mouth that no no no no no no we're not building this to replace employees but meanwhile meanwhile it seems like the it it's happening you know look what happened with >> no no we are building this to replace employees or not hire them in the first place >> correct isn't that the truth what is the [ __ ] >> but who the question is which employees right and that's where I think a lot of people are making a whole big deal about the fact that this is about efficiency What I'm telling my team is you better learn this. I tweeted this the other day. I I direct all members of my team to work on Claude immediately. I don't care what you do, just get on it, you know? And like the idea is we can become super advisors by having AI agents helping us do all of our work. And we do a lot of like behind the-scenes work, let's say building a financial plan. And now um with AI we'll be able to we're already we've already built platforms on quad that are super awesome you know like so we're just trying to figure out how to deploy this across the company because it's like you literally can't even share the documents and or save data you know so so we've got like templates that we've built that are amazing already and better than the stuff that these companies that charge us $10,000 a month for we don't need to pay anymore. So when you're talking about employees, well certainly if you're in what I call real work like construction, uh electrical, uh putting in, you know, electrical infrastructure, AI can't do that, >> right? >> When you're mechanical mechanical >> Yeah. And you're thinking about like a lot of jobs are you physically have to exist to do those jobs, right? And then you have this whole what I so this is what I was saying the other day. the the the the generation that's graduated from college over the last decade, >> their degrees are worth substantially less than ours. Okay? So, the education system has gone down the the gutter of tube of [ __ ] >> Okay? And what it's become is some sort of consensus building woke weird thing where you don't even learn the history that's actually the history anymore. like it's the least prepared co college educated people that have ever been produced by the colleges, let's say. And so now they're graduating and they're all these entitled kids who think that Facebook is everything or Instagram and that they spend half their day wasted, you know, high just like playing on their social medias and then they go get a job which is basically like how can I [ __ ] around as much as possible and look like I'm working and then they post this stuff online which is even funnier and those are the people losing their jobs and they'll never get jobs again because you know if you're not if you don't really have a skill you're screwed. food because of AI. So all these kind of cushy jobs at Meta, look at what happened at Block the other day and they go, "Well, Block's not doing well, you know, Block's not doing well, so maybe it was just layoffs." Like, "Oh, that's absolutely true. They have literally thousands of people who do nothing there, you know, and how did it get that way?" Because we just hire and we hire and and we hire and companies get big and they don't even realize that half the people don't actually do anything every day. And so it's going to be a tough time for college educated younger people who don't actually have real skill sets and actually didn't really learn anything of value in college, >> right? Who do this is a story that I've always had that >> if you don't know how to add and subtract, multiply and divide >> and understand the basics, how you can actually use that powerful Excel to its fullest. You know, if you don't understand what an average difference between a median, mean or whatever, pick whatever. How about if you don't understand why we're fighting in Iran right now, you should be like going back to school, >> right? Well, right. >> You missed history. Like you just missed history. >> Exactly. >> You know, let's talk about that. Let's talk about that. You've been pretty vocal about the ongoing conflict. >> I'm pretty excited. >> We see this market destabilization, energy spikes. >> I like it. >> It's You like it? What part of it? >> I love it. >> You like the word stocks. I want to buy stocks cuz when this is over, like the world has changed so much for the better. There is nothing more concerning to our future than a nuclear armed Iran. Right. Okay. I agree. And and and it, you know, honestly, it's not an opinion. It's just a fact. Like, you know what I'm saying? Like, I'm not trying to say this like I'm just saying that if they had a nuclear weapon right now, they would be using it. That's that's why we cannot let this happen. And we've played this game with them for like 20 plus years while they've attacked us and terrorized us and and and >> lied lied. >> I mean, it's just a million things. They played this game and they were building a weapon. Okay, I don't care what kind of propaganda nonsense you're reading online. They're building weapons. They have the ability to highlyenrich uranium and they just don't give a crap about the West. and they were are are trying to arm up to destroy our civilization. That's that's a reality. Okay. Then the Ukraine war starts and they're the first people to help Russia massacre our Ukrainian brothers and sisters left and right. Okay. And so, you know, then he who do you think was behind October 7th? So the the the Arab world wants to like end all this nonsense and you know Israel and Saudi Arabia start talking and then they unleash this Hamas attack on Israel which just changed everything you know and whether Iran realized it when they unleashed October 7th that it was going to be their undoing. I'm sure they did not think that in the end Netanyahu and the Jews would destroy them. They they probably didn't they they did the the old Sunsu era of underestimating their enemy of 5,000 years on Porum nonetheless. >> Okay. >> Yeah. >> They didn't even read the story of Porum. >> Okay. >> Which is about them. >> Yeah. >> It's amazing. >> So today we we actually sunk a ship with a torpedo an an Iranian Navy vessel. I I I was like cheering. We they have no navy. They have no air force and and we are just systematically um taking apart their entire military apparatus that have killed tens and tens and thousands of their own people in the most harsh and horrible ways. So how is the world not a better place today than it was two weeks ago? >> Yeah. I want to also talk about though the traditional war footing when it comes to markets for a second because there are I think I think there's three phases give or take. I mean, we could probably talk about this and argue about this, but there's this, you know, the the initial, right? The shock. This is why things are done on the weekend. >> So, they let it sink in a little bit, right? This is purposeful. Give a few days. Give a couple days by Sunday night. >> Sunday night at about 5:58 would be very nice Eastern time, right before futures open. Um, and um, you know, you get that shock, then you get that kind of adjustment. This is the old frog boiling in a pot, right? Then you get this normalization that, okay, we're in a war. We've been in a war forever. Who cares? It's over there. The only time it really gets crazy is if I got a bomb blowing up on my doorstep. Other than that, it's over, >> which is next, by the way. You know, here in LA, >> you're closer. >> No, I mean, I'm not kidding. I'm not kidding. >> You know, the Persian community here in LA is so happy. I I've never seen anything like it. They're dancing in the streets and >> I have Persian friends also, and they're they're like >> and and I'm telling you, it's a risk that they're going to attack us here in Los Angeles. between the Jewish community, the Iranian Jewish community, and the Persian community. That's just everybody here. LA is so happy right now, I can't even tell you. You know what I mean? And and like everybody, so we're a target. So, it's kind of what I told my kids, you know? I gave my kid I don't let him have the phone, you know, and I gave my he's 13. I gave him the phone. I said, "Listen, if [ __ ] goes down, I want you having the phone because shit's going to go down." I'm just when they get desperate enough, they will attack. And so I I think Americans need to not be complacent at this period of time. We're at war and many of the young people today don't remember the wars that we've been fighting for the last 55 years that I've been alive. And so, you know, I'm prepared. You you got to, you know, Americans need to watch out for each other right now. And we got to be smart. >> Let's talk about though what mistakes people make when wars happen when it comes to markets. Like we saw for example, you know, the first few days. Yeah. They panic. They get upset because we don't know. There's a lot of uncertainty, isn't that? Is this just the same uncertainty curve as as any uncertainty curve, >> tariff uncertainty, new political thing? You know, >> this with Trump, there's uncertainties that you can't quantify, which I think market participants don't like. But if you would have told me that the market really isn't down from all this, I would have said zero chance, you know, like I like >> Monday morning I had my like combat gear on, you know, ready to deal with clients in panic mode, you know what I mean? So I've done this pony, you know, that's why people pay me. I I've I'm the guy you want on in your bunker, you know what I mean? When the markets are getting killed, I've I've been there, done that. I'll get you through it. So, I I you know, my wife just doesn't understand these things. She doesn't pay attention to the news and stuff and she's try trying to act like everything's normal. As I looked at her, I said, "We're we just started a war, okay, in my business. That means we're included, you know, and so like I'm not the same today as I was yesterday. Like, I have to deal with some potentially really difficult things right now. So, please be supportive, you know, and and so, you know, and just understand the stress I'm under because I I warn my family because my job most of the time is not too bad, but these kind of times can be tough. >> But what you're saying was you were surprised. You were surprised. >> I'm surprised. I you know, I think the market should be down 5%. you know, maybe 10, right? But I but when I thought from a like a a rational perspective of like what are what is the potential outcomes and how good or bad are they, I was like, dude, we got them all the first night. Okay. >> Right. So when I started extrapolating out six months from now, to me there's the potential that this could be one of the greatest paradigm shifts in modern American history. like eliminating the Iranian regime threat, which ultimately neuters the Russian regime threat, maybe ends the Ukrainian war. And oh my god, this would be wildly bullish. Wildly bullish. And so that's why I was saying if it goes down, I'm a buyer hardcore because I I think we're going to win this war. I I think Iran is just, you know, I think they're done. Yeah, I I I think the people want to be free and and if we can give them a window to somehow take over their country, it'll be messy and it'll be messy for a long time, but there's an opportunity to re rejigger the world into a much better world order for everybody. And like the Middle East could become one of the wealthiest uh training areas in the world. And I I I I I venture to guess that the Persian community, if they come back to their country and rebuild it, will build an amazing country. >> I want to I'm hopeful. >> Yeah. Let's pivot to another hopeful area. Let's talk about SpaceX XAI. We'll talk about I mean, I knew that he was going to start combining those things. That was like a >> I'm glad I got out of my Twitter investment and now I own SpaceX. That's the best outcome I could have asked for. >> Yep. So, >> because I got screwed. Well, but the I listen I think the valuation of of well what is it now? When he went when Twitter got folded in when Phil when Twitter got folded into XAI, the number that came up was like this pie in the sky number of what Twitter was worth. Let's be honest, but you know >> well it started with 44 billion for Twitter, right? Then they merged it with XAI and they said it was 110 billion, >> right? >> Then they merged it with SpaceX and they said it was worth 250 billion, >> right? And then what do you say it's worth now? >> Now they're saying it's worth more. I don't know. >> It's just some crazy number. So yeah, you you were very against uh Musk dabbling in his governmental duties of the Doge Capola and all that and you were right that >> that worked out well, didn't it? >> Yeah, that was that that whole thing was ridiculous. I mean, it was it was a game. >> And Christine Gnome is flying around on a private jet with her with her own bed and sleeping with the special government employee and giving her friends $150 million contract right under Elon's nose. You got to love that. >> The whole thing was was bad. So um do are you are you >> first of all do you think that Tesla's going to become another division of X eventually of XAI SpaceX or whatever you want to call it at that point >> it it'll be part of X X will be the company and it'll be multiple verticals of the future basically and and at this point now I think that Elon's a little bit frustrated because he wanted to get this thing out public and now we got a war it's very hard to take companies public you know during conflict and So, it makes a lot of sense for Tesla and SpaceX to merge. They're basically worth the same amount of money and then it's like they could go public through this reverse merger process kind of thing. And if they do that, does he then get the benefit of the valuation uh benchmark to give him the cat trillion dollars that he was now having in his new contract or is that something different? >> I don't know. You know, I don't know how that would affect the the goals that were set for the new contract. And my assumption is that goals are goals. And so, you still have to achieve those goals to achieve the the pay. You know, at this point, I don't know how many goals they're going to achieve. So, you know, I don't know. I, you know, I've never I was just actually at the Tesla uh dealer taking my car in and and there's cars everywhere and these people are working their butts off and and and Tesla makes great vehicles and and they pretty much can drive themselves. And I just think that moving away from the vehicle sales business is a death blow to Tesla. >> Their vehicle sales stink. >> It stinks because they don't want to sell. They don't care. >> Like Elon is not trying to sell cars. He is basically saying, "You're gonna take my cabs and we're going to build these robots and and and we'll sell cars, too, but I don't care. I'm gonna end the Model S. The best car I every time I go over to the Tesla, that's the only Tesla I would buy, by the way. >> It's the best car they made." Yeah. >> The Model S Plaid with full self-driving is the best vehicle that's ever been made. And they discontinued it. and and over this fluffy lie that putting a robot line in Fremont makes any sense at all because we all know if you've ever been to Fremont, it does. You're not putting a robot line there. It's a mess over there. Okay. >> Yeah. I So, so then the valuation of where Tesla is and the price it is in the market currently is really a factor not of the anything to do with Tesla really. It's just the hope for roll up into >> hope for the future. When I talk to my my Tesla clients that won't sell their shares and I'm and and you know I approach it very delicately because they love Elon and Tesla and I say look you know what do you think of the Model S being discontinued and you know they have this big dissonance that they're having a trouble with but what they've bought into is that this future abundance with robots and and cabs is the future of Tesla and they're fine. They don't care about selling cars anymore. That's what I'm saying. They just don't care about selling cars. And that is, you know, you you have a hundred billion dollar revenue business that was doing $15 billion a year in profit and probably worth, you know, three to 400 billion, right? >> Yeah. >> And and they're going to abandon it. So, I don't know what what happens, but I know nobody's buying Teslas right now. So when you look at what they're trying to do, the the optimist ambitions and this whole is issue with, you know, I don't know whether it's a scene from from uh Sleeper. I keep vision envisioning this this this scene from Sleeper with the robots, you know, with Woody Allen with his little orb. Yeah. >> Um and and the um >> I mean, I just go straight to like Robocop. >> Yeah. Robocop. Tattoo. And that was LA. That was in LA. Um and and um what >> where are the limit? Where do you see the limitations, the boundaries, the the the potential for adoption for this whole thing? And and and are we are we ready for this? You know, first of all, getting a robot to work is really hard and to work for a long time, you know? So, let's be real. We've got some time here. Yeah. Before you, you know, I I I use the example all the time of my hands, you know, because I'm a guitar player. you know, the complexity of your hands and calluses and playing a a musical instrument um and the dexterity that humans have developed over millions of years of evolution is not that easy for them to build. And Elon will tell you that himself and and then you got eyes and you got feet. So, it turns out eyes, feet, and hands make humans super unique as animals. So we're fundamentally we're animals and animals adapt to millions of years of different uh challenges and the animals that don't adapt die and the stronger ones survive. And we've evolved over millions of years and and most species if you drop a human into Africa right now, humans would get eaten very quickly and we're not adept to survive in the wild anymore. We're domesticated animals now like a cat. And so when you think about this idea that we're going to just replace ourselves with these metal robots that think and need power and you look at some of the incredible feats that humans do on a day-to-day basis like that dude who just climbed that building. >> Oh god don't underestimate the humans is what I say. >> Right. So, so I I'll bet on the humans over the robots for a long time, but now because of what I'm reading in the military circles, what I actually believe is Tesla will be a military contractor. >> That's interesting. Yeah, that's interesting. Both on the AI side and the robotic side. Is that >> SpaceX, Tesla, robotics, AIS, all that's what he likes. He always likes >> he's building an army. He's building the US army. But isn't that what the the game he always played was to go after the highly profitable and very squishy government budgets or >> Well, there's that. I mean, Elon's been doing that since he started. And then there's the Iron Man model that he kind of buys into that like I'm creating technologies to protect America from its adversaries. And there's no question that Starlink has been a major factor in the conflicts that we're seeing today. And so for the first time in history where we launched a drone attack using Starlink antennas in the back of the drones that we can now drive directly to the target from anywhere in the world. This is a a gamecher technology when it comes to the modern combat and warfare that we're seeing in the battlefield today. And then when you extrapolate out robotics and what Tesla is building and cyber trucks and all of a sudden you've got an army of drones, robots and and and autonomous vehicles that could be extremely effective against our adversaries. So So I think that argument is probably a better argument than any human wanting some stupid metal robot in their house. >> I would agree with that. And then you know I mean obviously um there's there's a long as you said a long way now. What about the the the cyber cab or the robo tax? Which is it? Is it cyber cab or robo taxi? >> I I call them all robo taxis you know because certainly Tesla's not the only one. I'm a Whimo user. And you know one of the advantages you get about living in Santa Monica is you see all the technologies before everybody else and you see them compete. And that's how we found Tesla was because they were here in Santa Monica. And so the fact that robo taxis aren't even operating in Santa Monica currently just shows you how behind they are, >> right? >> Because you know they're they're operating in San Francisco supposedly and basically Austin. But they're not robo taxis. They're driven by drivers on full self-driving essentially. So it's no different than an Uber driver who uses full self-driving. You see what I'm saying? And so, so the promises have become a joke at this point because by the end of the year, the the people were supposed to be out of the cars. They're not out of the cars. And there's a reason why they're not out of the cars cuz the cars will kill people. And so, we need the safety drivers. And I use full self-driving, you know, extensively all the time. I think that the software is better than it's ever been. I think it works really, really well. I just went to San Diego and back and I had to disengage several times in that trip for safety reasons. And and a lot of that had to do with things that are super random that just happened. Like there was a motorcycle accident in the middle of the freeway that we drove right up on. Cars were like all over the place. People were out in the freeway trying to help this guy who was hurt. You know, it was a it was a tough driving situation. Well, humans can communicate with each other in the car. This is another thing that, you know, cabs can't do with robots. You know, it's like you wave at the person, you look at them so you don't hit each other. You know what I mean? >> Yeah. Yeah. Or you see where they're looking. You see where they're looking. >> Well, we had to navigate around all this mess, you know, and and and so, you know, fortunately, I was >> right one of the first person because the traffic, you know, was going to be a nightmare for the rest of the day. But um and I almost had to stop to to help these people, but there was already somebody doing that. So um but that said, self-driving didn't know what to do. You know what I'm saying? And so you just have to disengage, you know, and and so there's a lot of scenarios now that happen in LA driving that are non-quantifiable because it's LA. And so this is what's made it very very hard for full self-driving to work. Now, Whimo's solution, which turned out to work, is just put like tons of sensors everywhere so that we can really measure everything and and the cars don't look as good, but they work and they're safe because we know everything around us, how far it is, how fast it's going, and we're safe. So, you know, I think there's something to Tesla just like putting some sensors on the car and fixing their problem and moving on. But, you know, they're just too stubborn. Let's talk about this uh getting me off of the edge of the uh of of the ledge here and talk about this whole idea where these we've seen these hyperscalers right we've seen Amazon and Alphabet and Meta Microsoft Nvidia well that's they're not hypers scalers but invid all these guys spending in in your lifetime you've never I'm telling you and you're going to agree with me you've never seen spend like this the spend is absurd the numbers are they >> the numbers are absurd They they dwarf any I I think any stimulus package that has ever been given out by a government uh over time. Uh >> oh, come on. You know, Biden was sending checks to everybody. It was like a trillion dollars. >> Yeah. Okay. Yeah. Yeah. Yeah. Yeah. You know that that the changing the this this government's going to be changing the San Andreas fault uh name. Did you know that? >> That's to what? >> To Biden's fault. >> Yeah. So, >> I I fell for that joke. Sorry. Sorry. >> You got me. But that was funny. >> So, this whole spend, right, >> you shouldn't do that. >> This whole this whole uh spend that we've been hearing about and the numbers just go on and on and right. You're you're telling me that when Nvidia gives money to Open AI and Open AI then turns around and buys buys Nvidia chips or Microsoft to Open AI and OpenAI buys cloud service blah blah blah blah blah blah blah. This is not some kind of weird deal where brilliantly you take money off your balance sheet and you turn it into income >> and then you and you boost your EPS and then your stock goes up. >> This is like what everybody does. >> This is what everybody does. >> This is profound though. >> Okay. >> No, it's it's it's common in business. So now you got to share the wealth, you know, like Nvidia can't just make $43 billion in a quarter and just like distribute it to their shareholders. like they have customers that are spending all this money and they want to own a piece of all these people and if they're going to spend the money with them anyways, why not put give some of it back to these guys and own a piece of all of it? And that's what Nvidia is smart. >> But when you get a piece of it and you get like a deal with AMD, right, where Meta deploy AMD is going to deploy six gigabytes of this GPUs over time, blah blah blah. They're going to get this money, they're going to pay for it, and then they're going to get 10% of AMD Meta. You may like that as a Meta shareholder because they basically just got free shares of AMD, but what the hell? >> Well, that's what AMD has to do to get business because they're inferior to Nvidia. And so >> they gave away 10% of the company. >> Yeah. I I wouldn't have done that, you know, like but that's like we've done the analysis comparing an AMD chip to Nvidia. It's like day and night. So, you know, they're not competitive. They've never been competitive with Nvidia. They've always been a second tier chip company. and if I want to build GPUs with them, I'm accepting a lesser product essentially. And so why would you do that? So everybody's trying to sh spread the wealth and and do all this stuff. But I think you know if you look at a company like Coree, which is probably like the epicenter of where people don't like it, where it's like people invest in core, core turns around, buys the chips, then they build a data center, and then they rent it out basically the same people, right? Um but you know you have to understand it's actually quite smart. It it I'll give you an example of my company when we were starting um we needed money and we you know talked to LPL we we moved our business there and we said hey look you know and they said look we have a forgivable loan pro uh program we'll give you XYZ if you guys do XYZ. Now it's smart for them to give us money cuz we've grown to be 20 times bigger thanks with their help. it helps. And so you can say, "Oh, they're just giving money to the same RAS that come back and pay them." Well, that's true, but it's also now we're 20 times bigger. So, it's a huge win for them. Whatever they gave us, they're making back way more. You know what I mean? And so, I think that's part of the calculus. It's like if we invest in this ecosystem and we build it like and these companies succeed, what Nvidia's business is going to look like in 10 years will be way more than if they just are selfish and they keep all the money for themselves and pay it all to shareholders and pay dividends and do all this [ __ ] You know, all these companies might struggle a lot more and then they have less better customers in the future, you know. So, it's smart business. You see it all over the place. Almost every industry does this where they try to support the businesses that will help them get more business down the line. >> But does but does the increase in market cap that was based on some of these things immediately make sense? It took years. >> If you want sense, you do not trade the stock market. Okay? You trade in the stock market because you know that there isn't sense in certain areas and there's opportunity for you to make money. So there's opportunity for you to lose money, too. You see what I'm saying? And so >> nobody forces you to buy Coreweave. You know what I mean? >> And I looked at Core Weeave three or four times and I actually still think it's a good company, but I don't own it because I don't like the economics of investing, let's say, $50 billion into Nvidia technology today to build data centers. Then I've got to uh depreciate over, let's say, 6 to 10 years. and then I have to get all this revenue into the future which I'm sure they'll get but it's so uncertain. It's like how do you draw out the numbers, you know, and so that's my issue with COVID. How much business are they going to get in the future? I don't know. It could be tons. I, you know, I don't know. I know the demand is off the charts, but like do I want older chips or do I want to like diversify into different layers of different chips? You know, like I don't know. So there's a lot of people doing a lot of things and some of it's not going to work for sure. But I think Zuckerberg said, "I would rather overinvest. I would rather lose money on some of this than not be in the game because the game's over already." You get that, right? Like these are household names now. Gemini, Quad, you know, Chat, like my kids talk about chat, you know, like you see what I'm saying? Well, they do this. But what's interesting, Ross, is is we don't know who's actually come out. And one of the things I want to mention is that >> No, they won already. The game's over. >> AI is is open AI has pledged so much money to so many companies on the come that one in particular, >> right? >> Well, Sam Alman's a little bit crazy. Yeah. >> Yeah. And the question is, are they going to be the the winner in five years from now, two years from now, 10 years from now, whatever the number is when when the when the rooster comes to crow and and and and has to pay up. >> Well, remember who started the internet? We started this this podcast. I was talking about AOL. Where's AOL today? >> Yep. >> It's I still use it actually. >> Yep. You do you for what? >> Yeah. I have my email I have an email AOL address and I keep it because it makes me happy because it's >> I was the first person on the internet. I was I was you know I was like Al Gore you alore together huh emailing back and forth >> in Al Gore I have the first AOL address you know like I I take pride in my AOL you know that said um AOL is not the leader in the internet today >> you know so will open AI be the leader of AI in like 30 years I have no idea and and if you are an investor it would probably be a mistake not to invest in these companies right now, you know, like we don't know who's going to win. I'm a big investor in Google. I think Google wins here, you know. I'm a investor in Microsoft. I think they win here, you know. Um I I love that Google owns part of anthropic. I wouldn't invest in Anthropic. I would invest in Open AI. >> Yeah. I mean, what you got Microsoft and then you got Amazon, too. Of course, opening >> right now. Do I want to buy Open AI at 680 billion? No, I don't. But like it doesn't change that it's not a good company, you know. But like as I said, I think the hyperscalers have already won it. Like if I want to be a startup AI large language model and compete against any of these models, like how much money do I have to invest? Like hundreds of billions. So the game's over. And so these companies knew that if they didn't go all in, you know, they had good they had good cards. If they didn't go all in, there's very potential po possibility that a third party that they don't know could have come and eaten their lunch. >> Yeah. >> And so, and so this is the cost of the moat. It's the cost of the moat is 150 billion a year. And you know, I think they're smart. I think they're smart. I think that the way the world will look five years from now is extremely different than what any of us can imagine. Well, that's pretty cool. Let me let me ask you this on the end. I >> I wish I could tell you what that is. I'm gonna ask you something that's a little bit shorter term as a closing question. Uh and recognizing that we said last week we would know what's happened this week. This week we're not going to know what happens next week, but 6 months from now, what will investors wish they had had been paying more attention to today? I mean, is it is it I going to beat around a few things. The price of fuel, maybe the fact that we have a new the fact that that that uh the Fed is a new Fed's coming in and that's going to be very theoretically do. I don't know. Uh is it >> I don't know if they're going to be dovish. >> Is it the is it is it the Nvidia comment from a couple days ago about not spending any more on open AI? Is it uh is Oh, how about this? Private credit. Well, you know, it's funny because I do a lot of these shows and I get asked a lot of the same questions. So, you know, private credit is just junk bonds that rich people bought that suck and they lose money and that's that, you know. Um, it's not going to it's not going to infect the market because people in the market don't own it. It's just rich people. Um, so rich people like losing money on high fee products and I'm all for it. You know, if that's what they want to talk about, >> they could just call me and I tell them not to buy it. You know what I mean? We've been trying to get some clients out of it that we adopted some stuff for. >> Not. >> Yeah. It's hard. It's hard to get out of the stuff. That's why we don't sell it to people because my theory is how, you know, I str with like, how do I get my money back? You know, when you when the private credit guys come and the VC guys and the hedge fun guys come in and pitch me, I'm always like, well, how do I get my money back? And they're like, oh, nobody ever gets their money back. You know, it's like >> And Ross, why do they always come in with two people in the office? >> Well, they always come with two people, >> right? Am I right? It's always two. >> No, you're totally right. And and and and I always pose the same question to them. You know, we manage the client. It's a lot of effort to get the client, manage the client, get their assets under management, make them happy, service the client, and then they come to us with a 2 and 20 product. Yeah. >> And I go, well, I'm charging 75 basis points. Y >> and you want me to pay you 2 and 20 to buy a bunch of junk bonds, right? >> You know, and it's like, no, why should you make 4% off my clients? You know, so you you're you're buying garbage at 12% and you're paying them eight and nine. You know what I mean? >> Yeah. It's like a recycling machine. It's like it's like it's like a pay for recycling machine. >> So, we don't do that here at GK. You know, we just don't do it. You know, every year, like even this year, all these guys come in and then, you know, guys in my firm are like they see all this stuff and they're like, "Shouldn't we be offering all this stuff? Ross, why are you so stubborn?" And I said, "You know why? Because when these things go bad, >> oh yeah, >> everybody hates you. And so I've I've protected you multiple times through multiple cycles of garbage products that are pitched to us cuz I'm fortunately old enough to have seen many cycles of garbage products being pitched, including ones that caused the financial crisis for that matter. >> Yeah. It's funny because private credit always seemed to me to be the crap that already nobody wanted to buy that's being bought up by the people that already and if anything ever if everything's fine, okay, it all goes good because they don't market. They just kind of let it sit >> or rates go down go down or something like that. Then they can market to whoever they want. Then they don't have to remarket until some other deal and they can do side pocketing and then >> in the end though those are the ones that are going to have the worst problem because of liquidity issues and they have they have liquidity issues is why we have liquidity issues right to begin with. Well, right. And like if I if I give you $1,000 as a loan and you're going to pay me 10%. You know, it's not bad credit if you just pay me back. So, you know what I was saying the other day is that if you're looking to, you know, deploy capital, let's say $50 million into private credit, you know, that's probably pretty easy to do and you could hold out for good companies. But if you're looking to deploy a billion dollars, you start to have to go down the the the to the bottom of the barrel here to find investments or else you don't get paid. You know, so so much money goes into the sector, but how many high-quality private companies really exist? You know, and private companies are really tough to invest in, you know, you can't get your money out easy. And you know, what's your exit strategy? Is them going public or or or borrowing from somebody else to pay you back, I guess. Right. Right. Right. Right. So, so you know, there's a lot of people that don't want to do the hard work we do at GK, like getting and managing clients, and they rather just sell products to our clients, and that's why we don't let them in is because it's like, you lose the money. I'm the one that has to deal with it, you know, and I lose a client and you still got paid the whole way, >> right? >> You know, right. Right. >> So, so we don't have that here. It's not a problem for me. Um, and as I tell most people, um, I love liquidity, you know, like I I learned this lesson. I mean, it's like how old do you have to be before you just learn lessons? And and one lesson that is constant is when things go bad, liquidity is a massive premium. You know what I mean? It's like it's it's great to have liquidity because you can actually take action when things get bad. like you can now buy this private credit at 15 cents on the dollar >> and there's no and when things go bad it's not like let's do a redo let's have a second chance oh maybe let me let me go backwards a minute you're in it you're in it >> once you're in the quick sand you can't >> it's real hard to tell clients you know they wrote a $100,000 check for blue owl fun 7 and then you say it's all gone >> it's really hard to do that and I'm glad I've never had to do that >> I agree I agree Ross Gerber Gerber Kawasaki always a pleasure to have you on the show appreciate you we're going to have all the information on how to get in touch with you on the discipline.com. Episode notes for number 963. Thanks, buddy. >> Wow. Yeah. Thank you. >> All right. Thanks for having me. Yeah. >> And that's going to wrap up this episode of the discipline investor podcast. That was awesome. I mean, Ross Gerber, we seem to hit it off really well and and I really enjoyed that conversation. So, if you did too, send me a note, drop me a line, go over to the disciplineinvestor.com, click on the ask Andrew button to contact us, find somewhere something to click, send me a note, tell me what you think. I appreciate all the do all the good feedback. Uh, I'll take the bad feedback and read it, but then probably toss it. But nonetheless, I like your feedback. Any way you want to send it. Thanks for joining me this week and every week. Next week, coming up, we got a great guest. We got Thomas Peter. He is the founder. He is the guy that created he is the current one in charge of Interactive Brokers and uh quite a history and something that I'm going to enjoy. I've never really had the opportunity to speak with him before, but this is going to be a great episode. Make sure to be there next week when we bring him on. Thanks for joining me this week and every week. 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TDI Podcast: Gerber on Ai, Tech and War (#963)
Summary
Transcript
This episode is sponsored by Interactive Brokers. So, will the US consumer confidence index be above 101 in March 2026? At IBKR Forecast Trader, the yes recently priced at 40% and no at 58%. But markets move fast. Forecast contracts let you turn your views into trades on future events like the economy, climate changes, and politics with very, very simple yes or no prediction style contracts. Explore trending data, spot the trends, and if you get your prediction right, you earn $1 per contract at settlement. Plus, you'll earn 3.14% APY on your investment with an interestlike incentive coupon. And you'll get $3 for signing up with IBKR forecaster, which you can use for any purpose or to start trading. Forecast contracts are not suitable for all investors. Go to ibkr.com/for and turn your views into IBKR forecast trader contracts today. The last trading day for this contract is March 22nd. The Disciplined Investor is all about you, your money, and the markets. Sit back and get ready for this edition of the Disciplined Investor podcast. This episode of The Disciplined Investor is sponsored by Horowits & Company. If you're looking for a portfolio manager, look no further. Horowits & Company. From seed through harvest, cultivating financial success. War and markets not a great mix. South Korea tumbles the most in history. Inflation risk is real again. And the Fed's quandry is getting worse. And our guest today, Ross Gerber of Gerber Kawasaki. All this and much more on episode number 963 of the Disciplined Investor podcast. It's always something these days, isn't it? I mean, the good news is that investors, well, they love their stocks. We love stocks. In fact, it doesn't really matter seemingly if there's a war of something going on in Mexico or maybe even uh an oil embargo, an issue with energy around the world. Yes, the lows of the days held and bounced back extraordinarily on US stocks and we've seen several days of these crazy moves just this week after the missiles were flying over the Middle East. But generally what we saw if you look at this in fact it looks like the trail of a missile when you look at the actual stock on a bar candle style uh uh chart where you see that the lows were down these long tails we call it and then right back up to the top each day that we saw the selloff this week there was a little bit of damage done yes but not so much I mean we're talking about this horrible feeling this crazy amount of risk the volatility VIX moving up to 24 1/2 or 25 and we're talking about 2 to 3% off of the recent highs on most indices in the US. Lots of long tales, lots of continued interest in buying. US stocks were the ones again that we were looking at around the world. A little bit different. Traders picked up buying at the bottoms. No real technicals that were flashing any signals. Just price action. At least as I see it, it was all this, oh my god, it's down so much. Let's buy. It wasn't like, oh, it hit the 50-day moving average, bounced, or the 200, the 150, the 100. Or it wasn't like, oh, the MACD was showing that a conversion divergence into the upside should be played or maybe the R squared or the uh the the the the stochcastics or the Ballinger bands or whatever you want to say. The fact is that it was all about, boy, this looks like it's really sold off a lot. I'm going to buy in now. kind of interesting, but some things were decisively sold. I got to tell you something. When we look at, for example, wow, the Cosby Korean stock market. Now, remember something, this market was up about 150% or so last year, which is an extraordinary number for a developed nation. You don't usually see something like that unless it's Venezuela that has inflation at a,000% per year. The Cosby last year was the epicenter of the tech trade. The opportunity for a very small market capitalized index to gather and garner all sorts of money in and interest thereby pushing it up dramatically. Then the momentum traders took over and it was off to the races. follow through this year with another 50% increase in the first two months of this year until all of a sudden there was a sell-off that was due to what? Well, the Middle East conflict. It was kind of interesting what happened here. We had a few historic days. One day, I think it was on Wednesday, their Wednesday, 12% drop for the market. numerous market halts. And why was that? Well, we had an overbought a fun fundamentally overdone uh kind of a over the skis kind of situation. And once there was a hiccup with investors who probably had an incredible amount of margin leverage in that market, they said the hell with this, I'm out. And because again small capitalized markets and a lot of money moving in moving out, it was exacerbated because of a lot of different things. One of the problems is that many countries like South Korea really doesn't have oil. They're reliant on others. And who are they relying on? Well, in this case, it's places like the Middle East, Iran, etc. And when you see that they are freaking out because of a potential energy emergency, things go a little crazy. And then you add to that the excessive margin that's on the account and the leverage in the system and the momentum players falling over each other trying to get in and now trying to get out. There's people that have left, you know, hanging dry. the rogue was pulled. India is another example of of a market that does an incredible amount of reliance externally for oil. A and by the way, if you didn't see it, there was something else that happened. Europe is now in a pickle. The problem is that in Qatar the one of the largest liquid natural gas LG producers and exporters about 20% of the world's LNG is shut down because of the bombings etc. And that is causing a major crimp. And it's still winter time. We're starting to work into spring here. I know it's it's the beginning of March, but we're working into spring, but yet still winter, still cold, still use of heating fuels, of natural gas, of course, for factories and other things like that, but also for heating. That price skyrocketed the LG price and heating oil. I mean, we saw LG prices go up 60% in one day. I'm talking about European natural gas, the natural gas on their markets. That's a big big big story. The streets of Hermuz is closed. And even with the backdrop, the promises of President Trump offering insurance and maybe even uh escorts, Navy escorts through the Straits of Hormuz. There's a lot of concern that we're going to see oil rising in price. And what's interesting is that oil did already rise in price, but it wasn't, you know, um it's not that big of a deal. It's just not that big of a deal. We didn't see oil really skyrocket. There was some concern about a $20 move. It moved what uh I don't know the range the range was $15, $14. Still not in a place that's you know, you know, above 80. It's not above 80. It's it's it's fine right now. And with that in mind, the concern that everybody had about this huge increase, it's not happening at the moment. At the moment, things can change. There's some reports midweek that talked about how Iran may be out of their missile capability. Then what? They're going to be left all alone. They have drones, but then they're sitting there. They pissed off everybody in the region. And who knows how fast this thing is going to shut down, especially if there's no government, no leadership, no ability to really uh coordinate any of this, which is, you know, that was the goal, right? That was the goal to to cut the head off the the serpent and to reestablish what's going on there and and have basically a regime change that can be much more friendly. And we'll see how that goes. You know, this is a little bit different because there's a lot of religious issues going on with this. is not just simply a leader that's a strong man. This is a religious cleric, the the uh the holy that was taken out and um due to Sharia law and the way that they worked there, you know, it's a little bit of a different environment. But like I said, not easy to point out, but basically we could all say there's a lot going on and and rightfully so. volatility measures are are heightened, but there's a lot of opportunity. Don't forget that. A lot of opportunity on all sides of this trade, whether it's a short side, the long side, a lot of opportunity. I'm going to say it again because I don't want you to forget it. I want you to recognize that this is not about fear and freaking out. We had some people call us last week um you know, wondering about this and nobody was freaking out or were worried to a point that they were, you know, like, "Oh my god, I got to do something bad." You know, people naturally get concerned, upset about this. Now, it also depends on how long you've been investing. If you're new to investing, you're probably a lot more worried, concerned about what's going on. If you an old hat at it, you've seen that wars in particular are those things that initially are shocks to the system, but then they kind of we get used to it. And that takes some time, but and hopefully we're not going to go that long with this particular conflict. But if we do, that's the progression unless something comes home on our turf. But the crazy thing that you have to understand about war is that war in his perverse way is actually good economically in some degrees. Clearly, even if you are the recipient of the bombs, it may not be good for you. and of course you as a person. But the rebuild process is actually economically positive. Think about that. The act of actually getting and having bombs built, munitions generated, manufactured, and then the rubble cleared and then rebuilt. All that is an economic benefit to various parties. something just to think about as horrible as that may sound. We're going to end there on this note because I want to spend a lot of time with our guest today and he's a great one and um someone who I really respect. Uh call a friend uh and uh who is a good friend of the show. Before we do so, I want to talk about Interactive Brokers again because you know it's it's March, right? Tax season. That's where we're at. We're in that in that zone. And this is a good time to meet Portfolio Analyst from Interactive Brokers. The free all-in-one dashboard that lets you consolidate, track, and analyze all your financial accounts in one place. You don't need to have an IBKR account to use it either. Just connect your accounts and see your complete financial picture, your investments, performance, and allocation all in one single screen. Plan smarter with IBKR's new tax and retirement planners, too. These are built around your goals and market assumptions. Get deep portfolio insights with detailed risk assessments and compare performance against more than 300 benchmarks. Plus, manage your with confidence thanks to GIPS. These are verified returns that you can review and benchmark against. Sign up for the free portfolio analyst at ibkr.com/frepa. Now, let me tell you about our guest real quick and then we'll bring him on. He's waiting in the wings. It's Ross Gerber. He's co-founder and president and CEO of Gerber Kawasaki Wealth and Investment Management. He oversees Gerber Kawasaki's corporate and investment management operations as well as serves individual clients. He's become one of the most followed investors on social and on traditional media. His investment ideas and advice have made him a regular in business news and is featured on CNN, CNBC, Fox, Bloomberg, Reuters. You name it, he's been there. He received a BA in communications from the Annenburgg School at the University of Pennsylvania with a concentration in business law at the Wharton School of Business. He also completed a second concentration in classical music studies and attended the Grove School of Music, which we're going to talk about. I have some questions for him. Let's bring him on right now. Ross Gerber, how are you? It's been a while. >> I'm pretty good. you know, it's been a definitely a different week than I would have predicted a month ago, but you know, I I'm pretty happy about um the success we've been having. So, you know, it's interesting. Next week is going to be much different than the week you would have predicted just this week, >> right? And I think that we're sort of entering a new stage of in some ways history that is pretty, you know, uncertain what that will look like, you know, a year from now. >> Yeah. I want to talk about some of your personal stuff first. do a little warm up, let people know a little bit more about who you are. So, >> we know that you're a musician. You're you you played guitar. You play guitar. And who who was I think I know this answer, but who was your earliest mu musical inspiration that really set the stage for I want to do that. >> Well, the real story is a little bit, you know, unique in that I had an experience when I was 16. Um, and in that experience, it involved uh seeing the Woodstock Jimmyi Hendricks performance on video around 2:00 in the morning. And during that experience, I decided that I could not live my life without actually playing music, playing guitar, and playing Jimmyi Hendris. So, my original inspiration was certainly Jimmyi Hendris, and still is to this day. And my my son's name is Jimmy, spelled J I M I. >> Look at that. Now, let's go back also and talk about the early days of your music. Uh, you played with uh the first band you played with was Third Eye and uh you played you >> you played weekly. >> What's that? >> You're digging deep here. >> I got some deep stuff here. You played you played in college. You played a place which was often to this day referred to as the Penstitution, the iconic Smokeoky Joe's. You had a weekly, right? >> That's right. And I love Smokeoky Joe's. And you know, I was back there about 5 years ago and and Paul Ryan still runs it and I walk in there and I haven't seen him in a long time. And I was like, you know, I'm so and so. And he was like, "Oh my god, how you doing? You want to play tonight?" You know, I was like I was like, "Really?" >> Right. You have like a certain memory of that spot that you have something >> I have a thousand memories. I you know, I learned so much playing music in Philadelphia for guys like Paul and and and the Irish guys that ran the bars over there and still run the bars over there. And and I learned life lessons that a kid who grew up in Bair could never learn in Bel Air. >> I love it. I love it. Now and now you're with the Danger Band. That's been your band for years. >> Well, no, that ended in with CO. >> Yeah. Unfortunately, when COVID hit, we were sort of at a high. I had just started a new music company, too, called Cocoon. So, we were like we we rented a house in Malibu, turned it into a studio. It was like amazing. The end of 2019 was like an amazing time in my music career just like building stuff and my band and all this was like coming together and then COVID hit. >> And when COVID hit, it was really detrimental to the music industry obviously. And unfortunately, one of my band members committed suicide and it was a very really hard thing to deal with in April of 2020. Tracy, rest in peace. Um, and so since then I've played live twice and one time I was lucky enough to play with Cisco Adler, a famous artist, uh, and his band. And of course, they make me sound really good. Um, and that was super fun. And I played live once, you know, several years back, but I'm looking to start doing this again, you know, as soon as time allows. I still play every day almost in practice, but >> yeah, you know, playing live is is wonderful. And so I'm I'm kind of trying to find figure out a different way to do it. Um, so I kind of when I built my new office, it's kind of partially a venue. Don't tell. >> That's great. Well, if you need anybody in the band, I could do, by the way, I am a I'm a hell of a triangle and tambourine guy. >> Well, tambourine has a role. I don't know about the triangle music, >> but we can work with a tambourine. All right, let's talk about uh I want to talk about I I have certain things that I put together for our discussion here because I know we can go into a lot of areas and and and >> I want to talk about AI, the revolution, the broader tech landscape and you've been bullish on Nvidia's dominance in the AI space, right? We know that. >> Well, yeah, I've been bullish on Nvidia since I was a little kid. >> Right. Exactly. Since since before Nvidia even knew they were Nvidia. Um that's right. >> Well, they did know then. >> Well, no, they knew about video games. >> Well, video games, they were second fiddle, my friend. by a long shot. >> For who? >> No, come on. They would Well, to the to the to the on the motherboard, it was like, "What chip do you want?" Well, you know, it was Intel, >> right? >> Right. Right. That's true. That's what I'm saying. >> But like, >> but we used to use like, I don't know, PlayStations and and Xboxes or whatever. And and the Nvidia PC route was sort of a different gamer route than the console route, which I was kind of a console guy. So, it was actually at E3. I was telling my kids about E3 because they don't do that anymore. And it used to be an just an amazing experience to go, you know, and that's where I learned about Nvidia because they pulled me aside and I said, "Listen, I'm not interested in chips. I'm interested in games." So the guy goes, "No, let me show you because this is going to make games way better." And that's when I invested in Nvidia. So this was long time ago. And this was before crypto and everything else that got it really going. and and then through uh Tesla was really when I started understanding where GPUs fat fit in the autonomy or ultimately what we call the AI equation now and and it was through GPUs this was now about 10 years ago at CES when when Jensen did his presentation it was like a big epiphany for us and we put millions of dollars into Nvidia then uh in 2016 and and that was about a decade ago and it's been just a wildly successful cost base is zero So that's awesome. >> Yeah, it's like one It's like$1 or2. >> So you recently had a CNN appearance. I think it was like two weeks ago or a week and a half ago and you talked about the AI trade. You t you highlighted Nvidia strength. >> Here's my question though. Um you know and I think as a matter of fact Nvidia came out this week it talked about that they think that last 30 bill with the B is the last time they're going to invest in open AI which I'm I want to get into that discussion in a minute. But do you see any risks in any of this AI discussion? Like for example, energy constraints or maybe >> like with what's going on with anthropic with this not totally out there with anthropic with the government with regulation over investment. I don't know something >> is there something that's concerning? >> Well, my basic premise right now is everybody's concerned about the capex spend and I don't think they're going to be able to deploy it all that rapidly. So that that's my concern which you I think was the first thing you said which was around infrastructure and and infrastructure in the United States especially around electricity is pretty old and poor and so just the idea that we're going to just like rapidly ramp up energy is not that simple or easy to do and it's quite you know expensive to fix and upgrade electrical infrastructure. And so we're in this period of time where electrical electric prices are going up here in LA. It was like a 20% increase in electric prices just this year. And and it's a big hit. Like I was like, "Wow, this is a big difference what we're paying per kilowatt hour than what I was paying." So it went from 25 cents to 30 cents. And I was like, "Wow." You know, like that like the demand for electricity is huge. But the supply and the ability to ramp um this supply is not that easy. and it's quite hard to deploy. So, so my basic thing is you're in this race to meet the demand for inference and you know for uh AI and yet you know these companies are going to struggle to be profitable because they're going to want to deploy the infrastructure and do all this as rapidly as possible and it's very expensive to do it this way. So I think that the profits for AI will be more driven in industries like mine where we can get immediate efficiencies from using AI that are profitable from like day one versus the actual AI companies which have a lot of investment to do before they profit. But I think in 5 years they'll be wildly profitable. >> Yeah. But the the the problem we have right now is that stuck stick on the energy issue for a second here. And you talk about the the infrastructure build and the amount of money that we're talking about from the hyperscalers that are giving and again I want to save this because I have a different part of this discussion about circular and vendor financing. But I have a whole I've been on this bandwagon for a while. I can't get off it. Somebody somebody should talk me off of it, but I can't get any >> I'm going to try to talk you off of it. >> Good. >> But um so >> you know you talk about this energy situation. Recently we saw that there's this thing where data centers hypers scale are going to need to supply their own energy right we were all hoping for >> this this SMR the small module reactors that whole thing with oak blue scale I mean who knows how long that's going to take if it's going to take >> um >> 5 years to 10 years >> five years to 10 years right so everybody was investing that was a big thing talk about the markets you know going in advance of things but where are we going to get the energy to do all this >> we don't have it >> so how does that work so how does that work So, so how it works is, so how do I rapidly deploy new energy? Okay, what Elon did was he just bought a bunch of turbines in Memphis, lied to the government, told them they were temporary, and just been running them all full boore all day long, and it's real bad for the environment, you know, so just running like gas turbines, you know, to make energy, you know, is it pollutes and so there's a lot of rules. Now in Texas, there aren't. So you can do these kind of things which is where they go to by the way. >> Right. Exactly. But in California you're not doing anything like that. So the first question is like how do we increase energy supply rapidly and the best way to do that is through solar deployment and battery systems. So solar is the cheapest way to get energy quickest with battery systems. So we really like that business especially battery. Uh >> the market doesn't like that business though. Let's be honest. Market >> I don't care what the market likes. I know what just saying from a >> I know how it works, you know, right? But like renewable energy needs battery systems to really get the most efficiency out of it. And battery systems with renewable energy have proven to be the lowest cost, best source of energy. So if we really want to do stuff, we've got to just go all in and start, you know, really deploying things like solar rapidly and and we can. We have the ability to do this. So So I think it's just about investment. The second side of it which I think is harder is the actual transmission lines and the actual infrastructure. This is a whole another level of difficulty than just putting up solar powers capturing energy and putting it in in a in a battery or whatever. Now I got to build transmission lines that take this to the place. So if I build my own power around my data center, you know, and then it's a pretty simple process, but that has to be put into the economics of building the data center, which is now I have to build a whole new energy source and transmission for each data center. How much more does it cost to do this? So, so that's why I say it's going to take more time to deploy the infrastructure than people will want to accept because there's a lot of like things that have to be done. And then when you go to the city or the county and you say, I want to add my own energy infrastructure here, it's, you know, you got to deal with politicians, which means nothing happens fast. >> And the problem you also have, Ross, tell me if I'm wrong about this, is the energy consumption that we have right now with, >> we'll call it, uh, AI 1, you know, 1.0 conceptually, right? Then moving into inference and then moving into Agentic is a whole, it's not just a one, two, three. It's a whole different level of of of consumption. it's already like maxed, you know, like we're using Claude a lot here at, you know, at work and and like it'll be like, okay, you've you maxed out your usage today and it's like how much more can we pay, you know, and then it was down the other day because there's so there's just so much demand and and they have to like kind of limit how much how many tokens you're using and you know, a token is kind of like a word and so like the more questions you ask AI and the more it spits out more data, it costs money. M and so they're undercharging for this product right now to get everybody to sign up charging 20 bucks a month. You know, Netflix costs more money and does a lot less for me than AI. >> You know, you talked about this. You talked about like, you know, Grock and Claude uh and Gorac and it doesn't matter the other ones we talk about, they're not going to stay cheap forever, right? So, right now I'm paying 30 bucks a month for co-pilot. Now, I know C-Pilot is a >> is the least good of all. It's the least, but it does a good job for things like uh, you know, grammar check this, you know, rewrite this sentence, uh, make sure this email looks good, look like, cut and paste, right? Yeah. Right. Or or look up look up, um, you know, look up, uh, find information on this client's information in my work side, you know, that that's all in there. But um do we think that the differential between pricing where you have AI models and the AI companies that are the open quote unquote open source, right? And and and the for the good of mankind versus the business-based ones, you know, those two competing forces these days, which everybody's starting to move much more towards the other side. Forget about the good of mankind. Um is this going to start costing us a lot more? Um, I don't think it's going to be right away, but yeah, for sure. And people will pay a lot more. But you have to look at it like as a cost benefit, you know, like how much am I willing to spend to get huge efficiencies in my business and, you know, not have to hire employees that we were going to hire. So, if you just don't hire one employee because of AI, let's say that's saving you hundred grand a year right there. So, like, wouldn't you pay $2,000 a month for Claude, you know, and people will, and that's what it's going to be, you know, and so companies will pay a lot more than individuals. I think there'll be free versions of these things obviously to get that'll be like ad supported, you know, and then there'll be like the $30 or $50 or how however many like tokens you're really using, you know. So it'll be based off usage because it's kind of like when the internet started and AOL used to charge, you know, $29.99 a month, you know, >> and so that they needed to do that. And when AOL said, "Okay, we're not going to charge anymore." It was down, you know, like the demand. >> I never understood that. I never understood that whole thing. >> They had the idea was to get everybody on the internet. Like it was just get everybody on the internet. So if we do like as soon as we could afford to like just not charge, it was better to get scale. And AOL was the biggest remember Time Warner of all people. >> Of course, >> you know, of course. >> Um, and so I was there 99 top of the market. AOL Time Warner, you know, that's why I was like, don't buy Time Warner Netflix. Please don't. It's it's like a curse, you know. Um, >> so when it comes to this AI uh jobs uh cannibalism, if you will, to a point, there's been a lot of discussion. I've heard it's almost I I I've been saying that it's it's he who protests too much. this whole idea on every out of everybody's mouth that no no no no no no we're not building this to replace employees but meanwhile meanwhile it seems like the it it's happening you know look what happened with >> no no we are building this to replace employees or not hire them in the first place >> correct isn't that the truth what is the [ __ ] >> but who the question is which employees right and that's where I think a lot of people are making a whole big deal about the fact that this is about efficiency What I'm telling my team is you better learn this. I tweeted this the other day. I I direct all members of my team to work on Claude immediately. I don't care what you do, just get on it, you know? And like the idea is we can become super advisors by having AI agents helping us do all of our work. And we do a lot of like behind the-scenes work, let's say building a financial plan. And now um with AI we'll be able to we're already we've already built platforms on quad that are super awesome you know like so we're just trying to figure out how to deploy this across the company because it's like you literally can't even share the documents and or save data you know so so we've got like templates that we've built that are amazing already and better than the stuff that these companies that charge us $10,000 a month for we don't need to pay anymore. So when you're talking about employees, well certainly if you're in what I call real work like construction, uh electrical, uh putting in, you know, electrical infrastructure, AI can't do that, >> right? >> When you're mechanical mechanical >> Yeah. And you're thinking about like a lot of jobs are you physically have to exist to do those jobs, right? And then you have this whole what I so this is what I was saying the other day. the the the the generation that's graduated from college over the last decade, >> their degrees are worth substantially less than ours. Okay? So, the education system has gone down the the gutter of tube of [ __ ] >> Okay? And what it's become is some sort of consensus building woke weird thing where you don't even learn the history that's actually the history anymore. like it's the least prepared co college educated people that have ever been produced by the colleges, let's say. And so now they're graduating and they're all these entitled kids who think that Facebook is everything or Instagram and that they spend half their day wasted, you know, high just like playing on their social medias and then they go get a job which is basically like how can I [ __ ] around as much as possible and look like I'm working and then they post this stuff online which is even funnier and those are the people losing their jobs and they'll never get jobs again because you know if you're not if you don't really have a skill you're screwed. food because of AI. So all these kind of cushy jobs at Meta, look at what happened at Block the other day and they go, "Well, Block's not doing well, you know, Block's not doing well, so maybe it was just layoffs." Like, "Oh, that's absolutely true. They have literally thousands of people who do nothing there, you know, and how did it get that way?" Because we just hire and we hire and and we hire and companies get big and they don't even realize that half the people don't actually do anything every day. And so it's going to be a tough time for college educated younger people who don't actually have real skill sets and actually didn't really learn anything of value in college, >> right? Who do this is a story that I've always had that >> if you don't know how to add and subtract, multiply and divide >> and understand the basics, how you can actually use that powerful Excel to its fullest. You know, if you don't understand what an average difference between a median, mean or whatever, pick whatever. How about if you don't understand why we're fighting in Iran right now, you should be like going back to school, >> right? Well, right. >> You missed history. Like you just missed history. >> Exactly. >> You know, let's talk about that. Let's talk about that. You've been pretty vocal about the ongoing conflict. >> I'm pretty excited. >> We see this market destabilization, energy spikes. >> I like it. >> It's You like it? What part of it? >> I love it. >> You like the word stocks. I want to buy stocks cuz when this is over, like the world has changed so much for the better. There is nothing more concerning to our future than a nuclear armed Iran. Right. Okay. I agree. And and and it, you know, honestly, it's not an opinion. It's just a fact. Like, you know what I'm saying? Like, I'm not trying to say this like I'm just saying that if they had a nuclear weapon right now, they would be using it. That's that's why we cannot let this happen. And we've played this game with them for like 20 plus years while they've attacked us and terrorized us and and and >> lied lied. >> I mean, it's just a million things. They played this game and they were building a weapon. Okay, I don't care what kind of propaganda nonsense you're reading online. They're building weapons. They have the ability to highlyenrich uranium and they just don't give a crap about the West. and they were are are trying to arm up to destroy our civilization. That's that's a reality. Okay. Then the Ukraine war starts and they're the first people to help Russia massacre our Ukrainian brothers and sisters left and right. Okay. And so, you know, then he who do you think was behind October 7th? So the the the Arab world wants to like end all this nonsense and you know Israel and Saudi Arabia start talking and then they unleash this Hamas attack on Israel which just changed everything you know and whether Iran realized it when they unleashed October 7th that it was going to be their undoing. I'm sure they did not think that in the end Netanyahu and the Jews would destroy them. They they probably didn't they they did the the old Sunsu era of underestimating their enemy of 5,000 years on Porum nonetheless. >> Okay. >> Yeah. >> They didn't even read the story of Porum. >> Okay. >> Which is about them. >> Yeah. >> It's amazing. >> So today we we actually sunk a ship with a torpedo an an Iranian Navy vessel. I I I was like cheering. We they have no navy. They have no air force and and we are just systematically um taking apart their entire military apparatus that have killed tens and tens and thousands of their own people in the most harsh and horrible ways. So how is the world not a better place today than it was two weeks ago? >> Yeah. I want to also talk about though the traditional war footing when it comes to markets for a second because there are I think I think there's three phases give or take. I mean, we could probably talk about this and argue about this, but there's this, you know, the the initial, right? The shock. This is why things are done on the weekend. >> So, they let it sink in a little bit, right? This is purposeful. Give a few days. Give a couple days by Sunday night. >> Sunday night at about 5:58 would be very nice Eastern time, right before futures open. Um, and um, you know, you get that shock, then you get that kind of adjustment. This is the old frog boiling in a pot, right? Then you get this normalization that, okay, we're in a war. We've been in a war forever. Who cares? It's over there. The only time it really gets crazy is if I got a bomb blowing up on my doorstep. Other than that, it's over, >> which is next, by the way. You know, here in LA, >> you're closer. >> No, I mean, I'm not kidding. I'm not kidding. >> You know, the Persian community here in LA is so happy. I I've never seen anything like it. They're dancing in the streets and >> I have Persian friends also, and they're they're like >> and and I'm telling you, it's a risk that they're going to attack us here in Los Angeles. between the Jewish community, the Iranian Jewish community, and the Persian community. That's just everybody here. LA is so happy right now, I can't even tell you. You know what I mean? And and like everybody, so we're a target. So, it's kind of what I told my kids, you know? I gave my kid I don't let him have the phone, you know, and I gave my he's 13. I gave him the phone. I said, "Listen, if [ __ ] goes down, I want you having the phone because shit's going to go down." I'm just when they get desperate enough, they will attack. And so I I think Americans need to not be complacent at this period of time. We're at war and many of the young people today don't remember the wars that we've been fighting for the last 55 years that I've been alive. And so, you know, I'm prepared. You you got to, you know, Americans need to watch out for each other right now. And we got to be smart. >> Let's talk about though what mistakes people make when wars happen when it comes to markets. Like we saw for example, you know, the first few days. Yeah. They panic. They get upset because we don't know. There's a lot of uncertainty, isn't that? Is this just the same uncertainty curve as as any uncertainty curve, >> tariff uncertainty, new political thing? You know, >> this with Trump, there's uncertainties that you can't quantify, which I think market participants don't like. But if you would have told me that the market really isn't down from all this, I would have said zero chance, you know, like I like >> Monday morning I had my like combat gear on, you know, ready to deal with clients in panic mode, you know what I mean? So I've done this pony, you know, that's why people pay me. I I've I'm the guy you want on in your bunker, you know what I mean? When the markets are getting killed, I've I've been there, done that. I'll get you through it. So, I I you know, my wife just doesn't understand these things. She doesn't pay attention to the news and stuff and she's try trying to act like everything's normal. As I looked at her, I said, "We're we just started a war, okay, in my business. That means we're included, you know, and so like I'm not the same today as I was yesterday. Like, I have to deal with some potentially really difficult things right now. So, please be supportive, you know, and and so, you know, and just understand the stress I'm under because I I warn my family because my job most of the time is not too bad, but these kind of times can be tough. >> But what you're saying was you were surprised. You were surprised. >> I'm surprised. I you know, I think the market should be down 5%. you know, maybe 10, right? But I but when I thought from a like a a rational perspective of like what are what is the potential outcomes and how good or bad are they, I was like, dude, we got them all the first night. Okay. >> Right. So when I started extrapolating out six months from now, to me there's the potential that this could be one of the greatest paradigm shifts in modern American history. like eliminating the Iranian regime threat, which ultimately neuters the Russian regime threat, maybe ends the Ukrainian war. And oh my god, this would be wildly bullish. Wildly bullish. And so that's why I was saying if it goes down, I'm a buyer hardcore because I I think we're going to win this war. I I think Iran is just, you know, I think they're done. Yeah, I I I think the people want to be free and and if we can give them a window to somehow take over their country, it'll be messy and it'll be messy for a long time, but there's an opportunity to re rejigger the world into a much better world order for everybody. And like the Middle East could become one of the wealthiest uh training areas in the world. And I I I I I venture to guess that the Persian community, if they come back to their country and rebuild it, will build an amazing country. >> I want to I'm hopeful. >> Yeah. Let's pivot to another hopeful area. Let's talk about SpaceX XAI. We'll talk about I mean, I knew that he was going to start combining those things. That was like a >> I'm glad I got out of my Twitter investment and now I own SpaceX. That's the best outcome I could have asked for. >> Yep. So, >> because I got screwed. Well, but the I listen I think the valuation of of well what is it now? When he went when Twitter got folded in when Phil when Twitter got folded into XAI, the number that came up was like this pie in the sky number of what Twitter was worth. Let's be honest, but you know >> well it started with 44 billion for Twitter, right? Then they merged it with XAI and they said it was 110 billion, >> right? >> Then they merged it with SpaceX and they said it was worth 250 billion, >> right? And then what do you say it's worth now? >> Now they're saying it's worth more. I don't know. >> It's just some crazy number. So yeah, you you were very against uh Musk dabbling in his governmental duties of the Doge Capola and all that and you were right that >> that worked out well, didn't it? >> Yeah, that was that that whole thing was ridiculous. I mean, it was it was a game. >> And Christine Gnome is flying around on a private jet with her with her own bed and sleeping with the special government employee and giving her friends $150 million contract right under Elon's nose. You got to love that. >> The whole thing was was bad. So um do are you are you >> first of all do you think that Tesla's going to become another division of X eventually of XAI SpaceX or whatever you want to call it at that point >> it it'll be part of X X will be the company and it'll be multiple verticals of the future basically and and at this point now I think that Elon's a little bit frustrated because he wanted to get this thing out public and now we got a war it's very hard to take companies public you know during conflict and So, it makes a lot of sense for Tesla and SpaceX to merge. They're basically worth the same amount of money and then it's like they could go public through this reverse merger process kind of thing. And if they do that, does he then get the benefit of the valuation uh benchmark to give him the cat trillion dollars that he was now having in his new contract or is that something different? >> I don't know. You know, I don't know how that would affect the the goals that were set for the new contract. And my assumption is that goals are goals. And so, you still have to achieve those goals to achieve the the pay. You know, at this point, I don't know how many goals they're going to achieve. So, you know, I don't know. I, you know, I've never I was just actually at the Tesla uh dealer taking my car in and and there's cars everywhere and these people are working their butts off and and and Tesla makes great vehicles and and they pretty much can drive themselves. And I just think that moving away from the vehicle sales business is a death blow to Tesla. >> Their vehicle sales stink. >> It stinks because they don't want to sell. They don't care. >> Like Elon is not trying to sell cars. He is basically saying, "You're gonna take my cabs and we're going to build these robots and and and we'll sell cars, too, but I don't care. I'm gonna end the Model S. The best car I every time I go over to the Tesla, that's the only Tesla I would buy, by the way. >> It's the best car they made." Yeah. >> The Model S Plaid with full self-driving is the best vehicle that's ever been made. And they discontinued it. and and over this fluffy lie that putting a robot line in Fremont makes any sense at all because we all know if you've ever been to Fremont, it does. You're not putting a robot line there. It's a mess over there. Okay. >> Yeah. I So, so then the valuation of where Tesla is and the price it is in the market currently is really a factor not of the anything to do with Tesla really. It's just the hope for roll up into >> hope for the future. When I talk to my my Tesla clients that won't sell their shares and I'm and and you know I approach it very delicately because they love Elon and Tesla and I say look you know what do you think of the Model S being discontinued and you know they have this big dissonance that they're having a trouble with but what they've bought into is that this future abundance with robots and and cabs is the future of Tesla and they're fine. They don't care about selling cars anymore. That's what I'm saying. They just don't care about selling cars. And that is, you know, you you have a hundred billion dollar revenue business that was doing $15 billion a year in profit and probably worth, you know, three to 400 billion, right? >> Yeah. >> And and they're going to abandon it. So, I don't know what what happens, but I know nobody's buying Teslas right now. So when you look at what they're trying to do, the the optimist ambitions and this whole is issue with, you know, I don't know whether it's a scene from from uh Sleeper. I keep vision envisioning this this this scene from Sleeper with the robots, you know, with Woody Allen with his little orb. Yeah. >> Um and and the um >> I mean, I just go straight to like Robocop. >> Yeah. Robocop. Tattoo. And that was LA. That was in LA. Um and and um what >> where are the limit? Where do you see the limitations, the boundaries, the the the potential for adoption for this whole thing? And and and are we are we ready for this? You know, first of all, getting a robot to work is really hard and to work for a long time, you know? So, let's be real. We've got some time here. Yeah. Before you, you know, I I I use the example all the time of my hands, you know, because I'm a guitar player. you know, the complexity of your hands and calluses and playing a a musical instrument um and the dexterity that humans have developed over millions of years of evolution is not that easy for them to build. And Elon will tell you that himself and and then you got eyes and you got feet. So, it turns out eyes, feet, and hands make humans super unique as animals. So we're fundamentally we're animals and animals adapt to millions of years of different uh challenges and the animals that don't adapt die and the stronger ones survive. And we've evolved over millions of years and and most species if you drop a human into Africa right now, humans would get eaten very quickly and we're not adept to survive in the wild anymore. We're domesticated animals now like a cat. And so when you think about this idea that we're going to just replace ourselves with these metal robots that think and need power and you look at some of the incredible feats that humans do on a day-to-day basis like that dude who just climbed that building. >> Oh god don't underestimate the humans is what I say. >> Right. So, so I I'll bet on the humans over the robots for a long time, but now because of what I'm reading in the military circles, what I actually believe is Tesla will be a military contractor. >> That's interesting. Yeah, that's interesting. Both on the AI side and the robotic side. Is that >> SpaceX, Tesla, robotics, AIS, all that's what he likes. He always likes >> he's building an army. He's building the US army. But isn't that what the the game he always played was to go after the highly profitable and very squishy government budgets or >> Well, there's that. I mean, Elon's been doing that since he started. And then there's the Iron Man model that he kind of buys into that like I'm creating technologies to protect America from its adversaries. And there's no question that Starlink has been a major factor in the conflicts that we're seeing today. And so for the first time in history where we launched a drone attack using Starlink antennas in the back of the drones that we can now drive directly to the target from anywhere in the world. This is a a gamecher technology when it comes to the modern combat and warfare that we're seeing in the battlefield today. And then when you extrapolate out robotics and what Tesla is building and cyber trucks and all of a sudden you've got an army of drones, robots and and and autonomous vehicles that could be extremely effective against our adversaries. So So I think that argument is probably a better argument than any human wanting some stupid metal robot in their house. >> I would agree with that. And then you know I mean obviously um there's there's a long as you said a long way now. What about the the the cyber cab or the robo tax? Which is it? Is it cyber cab or robo taxi? >> I I call them all robo taxis you know because certainly Tesla's not the only one. I'm a Whimo user. And you know one of the advantages you get about living in Santa Monica is you see all the technologies before everybody else and you see them compete. And that's how we found Tesla was because they were here in Santa Monica. And so the fact that robo taxis aren't even operating in Santa Monica currently just shows you how behind they are, >> right? >> Because you know they're they're operating in San Francisco supposedly and basically Austin. But they're not robo taxis. They're driven by drivers on full self-driving essentially. So it's no different than an Uber driver who uses full self-driving. You see what I'm saying? And so, so the promises have become a joke at this point because by the end of the year, the the people were supposed to be out of the cars. They're not out of the cars. And there's a reason why they're not out of the cars cuz the cars will kill people. And so, we need the safety drivers. And I use full self-driving, you know, extensively all the time. I think that the software is better than it's ever been. I think it works really, really well. I just went to San Diego and back and I had to disengage several times in that trip for safety reasons. And and a lot of that had to do with things that are super random that just happened. Like there was a motorcycle accident in the middle of the freeway that we drove right up on. Cars were like all over the place. People were out in the freeway trying to help this guy who was hurt. You know, it was a it was a tough driving situation. Well, humans can communicate with each other in the car. This is another thing that, you know, cabs can't do with robots. You know, it's like you wave at the person, you look at them so you don't hit each other. You know what I mean? >> Yeah. Yeah. Or you see where they're looking. You see where they're looking. >> Well, we had to navigate around all this mess, you know, and and and so, you know, fortunately, I was >> right one of the first person because the traffic, you know, was going to be a nightmare for the rest of the day. But um and I almost had to stop to to help these people, but there was already somebody doing that. So um but that said, self-driving didn't know what to do. You know what I'm saying? And so you just have to disengage, you know, and and so there's a lot of scenarios now that happen in LA driving that are non-quantifiable because it's LA. And so this is what's made it very very hard for full self-driving to work. Now, Whimo's solution, which turned out to work, is just put like tons of sensors everywhere so that we can really measure everything and and the cars don't look as good, but they work and they're safe because we know everything around us, how far it is, how fast it's going, and we're safe. So, you know, I think there's something to Tesla just like putting some sensors on the car and fixing their problem and moving on. But, you know, they're just too stubborn. Let's talk about this uh getting me off of the edge of the uh of of the ledge here and talk about this whole idea where these we've seen these hyperscalers right we've seen Amazon and Alphabet and Meta Microsoft Nvidia well that's they're not hypers scalers but invid all these guys spending in in your lifetime you've never I'm telling you and you're going to agree with me you've never seen spend like this the spend is absurd the numbers are they >> the numbers are absurd They they dwarf any I I think any stimulus package that has ever been given out by a government uh over time. Uh >> oh, come on. You know, Biden was sending checks to everybody. It was like a trillion dollars. >> Yeah. Okay. Yeah. Yeah. Yeah. Yeah. You know that that the changing the this this government's going to be changing the San Andreas fault uh name. Did you know that? >> That's to what? >> To Biden's fault. >> Yeah. So, >> I I fell for that joke. Sorry. Sorry. >> You got me. But that was funny. >> So, this whole spend, right, >> you shouldn't do that. >> This whole this whole uh spend that we've been hearing about and the numbers just go on and on and right. You're you're telling me that when Nvidia gives money to Open AI and Open AI then turns around and buys buys Nvidia chips or Microsoft to Open AI and OpenAI buys cloud service blah blah blah blah blah blah blah. This is not some kind of weird deal where brilliantly you take money off your balance sheet and you turn it into income >> and then you and you boost your EPS and then your stock goes up. >> This is like what everybody does. >> This is what everybody does. >> This is profound though. >> Okay. >> No, it's it's it's common in business. So now you got to share the wealth, you know, like Nvidia can't just make $43 billion in a quarter and just like distribute it to their shareholders. like they have customers that are spending all this money and they want to own a piece of all these people and if they're going to spend the money with them anyways, why not put give some of it back to these guys and own a piece of all of it? And that's what Nvidia is smart. >> But when you get a piece of it and you get like a deal with AMD, right, where Meta deploy AMD is going to deploy six gigabytes of this GPUs over time, blah blah blah. They're going to get this money, they're going to pay for it, and then they're going to get 10% of AMD Meta. You may like that as a Meta shareholder because they basically just got free shares of AMD, but what the hell? >> Well, that's what AMD has to do to get business because they're inferior to Nvidia. And so >> they gave away 10% of the company. >> Yeah. I I wouldn't have done that, you know, like but that's like we've done the analysis comparing an AMD chip to Nvidia. It's like day and night. So, you know, they're not competitive. They've never been competitive with Nvidia. They've always been a second tier chip company. and if I want to build GPUs with them, I'm accepting a lesser product essentially. And so why would you do that? So everybody's trying to sh spread the wealth and and do all this stuff. But I think you know if you look at a company like Coree, which is probably like the epicenter of where people don't like it, where it's like people invest in core, core turns around, buys the chips, then they build a data center, and then they rent it out basically the same people, right? Um but you know you have to understand it's actually quite smart. It it I'll give you an example of my company when we were starting um we needed money and we you know talked to LPL we we moved our business there and we said hey look you know and they said look we have a forgivable loan pro uh program we'll give you XYZ if you guys do XYZ. Now it's smart for them to give us money cuz we've grown to be 20 times bigger thanks with their help. it helps. And so you can say, "Oh, they're just giving money to the same RAS that come back and pay them." Well, that's true, but it's also now we're 20 times bigger. So, it's a huge win for them. Whatever they gave us, they're making back way more. You know what I mean? And so, I think that's part of the calculus. It's like if we invest in this ecosystem and we build it like and these companies succeed, what Nvidia's business is going to look like in 10 years will be way more than if they just are selfish and they keep all the money for themselves and pay it all to shareholders and pay dividends and do all this [ __ ] You know, all these companies might struggle a lot more and then they have less better customers in the future, you know. So, it's smart business. You see it all over the place. Almost every industry does this where they try to support the businesses that will help them get more business down the line. >> But does but does the increase in market cap that was based on some of these things immediately make sense? It took years. >> If you want sense, you do not trade the stock market. Okay? You trade in the stock market because you know that there isn't sense in certain areas and there's opportunity for you to make money. So there's opportunity for you to lose money, too. You see what I'm saying? And so >> nobody forces you to buy Coreweave. You know what I mean? >> And I looked at Core Weeave three or four times and I actually still think it's a good company, but I don't own it because I don't like the economics of investing, let's say, $50 billion into Nvidia technology today to build data centers. Then I've got to uh depreciate over, let's say, 6 to 10 years. and then I have to get all this revenue into the future which I'm sure they'll get but it's so uncertain. It's like how do you draw out the numbers, you know, and so that's my issue with COVID. How much business are they going to get in the future? I don't know. It could be tons. I, you know, I don't know. I know the demand is off the charts, but like do I want older chips or do I want to like diversify into different layers of different chips? You know, like I don't know. So there's a lot of people doing a lot of things and some of it's not going to work for sure. But I think Zuckerberg said, "I would rather overinvest. I would rather lose money on some of this than not be in the game because the game's over already." You get that, right? Like these are household names now. Gemini, Quad, you know, Chat, like my kids talk about chat, you know, like you see what I'm saying? Well, they do this. But what's interesting, Ross, is is we don't know who's actually come out. And one of the things I want to mention is that >> No, they won already. The game's over. >> AI is is open AI has pledged so much money to so many companies on the come that one in particular, >> right? >> Well, Sam Alman's a little bit crazy. Yeah. >> Yeah. And the question is, are they going to be the the winner in five years from now, two years from now, 10 years from now, whatever the number is when when the when the rooster comes to crow and and and and has to pay up. >> Well, remember who started the internet? We started this this podcast. I was talking about AOL. Where's AOL today? >> Yep. >> It's I still use it actually. >> Yep. You do you for what? >> Yeah. I have my email I have an email AOL address and I keep it because it makes me happy because it's >> I was the first person on the internet. I was I was you know I was like Al Gore you alore together huh emailing back and forth >> in Al Gore I have the first AOL address you know like I I take pride in my AOL you know that said um AOL is not the leader in the internet today >> you know so will open AI be the leader of AI in like 30 years I have no idea and and if you are an investor it would probably be a mistake not to invest in these companies right now, you know, like we don't know who's going to win. I'm a big investor in Google. I think Google wins here, you know. I'm a investor in Microsoft. I think they win here, you know. Um I I love that Google owns part of anthropic. I wouldn't invest in Anthropic. I would invest in Open AI. >> Yeah. I mean, what you got Microsoft and then you got Amazon, too. Of course, opening >> right now. Do I want to buy Open AI at 680 billion? No, I don't. But like it doesn't change that it's not a good company, you know. But like as I said, I think the hyperscalers have already won it. Like if I want to be a startup AI large language model and compete against any of these models, like how much money do I have to invest? Like hundreds of billions. So the game's over. And so these companies knew that if they didn't go all in, you know, they had good they had good cards. If they didn't go all in, there's very potential po possibility that a third party that they don't know could have come and eaten their lunch. >> Yeah. >> And so, and so this is the cost of the moat. It's the cost of the moat is 150 billion a year. And you know, I think they're smart. I think they're smart. I think that the way the world will look five years from now is extremely different than what any of us can imagine. Well, that's pretty cool. Let me let me ask you this on the end. I >> I wish I could tell you what that is. I'm gonna ask you something that's a little bit shorter term as a closing question. Uh and recognizing that we said last week we would know what's happened this week. This week we're not going to know what happens next week, but 6 months from now, what will investors wish they had had been paying more attention to today? I mean, is it is it I going to beat around a few things. The price of fuel, maybe the fact that we have a new the fact that that that uh the Fed is a new Fed's coming in and that's going to be very theoretically do. I don't know. Uh is it >> I don't know if they're going to be dovish. >> Is it the is it is it the Nvidia comment from a couple days ago about not spending any more on open AI? Is it uh is Oh, how about this? Private credit. Well, you know, it's funny because I do a lot of these shows and I get asked a lot of the same questions. So, you know, private credit is just junk bonds that rich people bought that suck and they lose money and that's that, you know. Um, it's not going to it's not going to infect the market because people in the market don't own it. It's just rich people. Um, so rich people like losing money on high fee products and I'm all for it. You know, if that's what they want to talk about, >> they could just call me and I tell them not to buy it. You know what I mean? We've been trying to get some clients out of it that we adopted some stuff for. >> Not. >> Yeah. It's hard. It's hard to get out of the stuff. That's why we don't sell it to people because my theory is how, you know, I str with like, how do I get my money back? You know, when you when the private credit guys come and the VC guys and the hedge fun guys come in and pitch me, I'm always like, well, how do I get my money back? And they're like, oh, nobody ever gets their money back. You know, it's like >> And Ross, why do they always come in with two people in the office? >> Well, they always come with two people, >> right? Am I right? It's always two. >> No, you're totally right. And and and and I always pose the same question to them. You know, we manage the client. It's a lot of effort to get the client, manage the client, get their assets under management, make them happy, service the client, and then they come to us with a 2 and 20 product. Yeah. >> And I go, well, I'm charging 75 basis points. Y >> and you want me to pay you 2 and 20 to buy a bunch of junk bonds, right? >> You know, and it's like, no, why should you make 4% off my clients? You know, so you you're you're buying garbage at 12% and you're paying them eight and nine. You know what I mean? >> Yeah. It's like a recycling machine. It's like it's like it's like a pay for recycling machine. >> So, we don't do that here at GK. You know, we just don't do it. You know, every year, like even this year, all these guys come in and then, you know, guys in my firm are like they see all this stuff and they're like, "Shouldn't we be offering all this stuff? Ross, why are you so stubborn?" And I said, "You know why? Because when these things go bad, >> oh yeah, >> everybody hates you. And so I've I've protected you multiple times through multiple cycles of garbage products that are pitched to us cuz I'm fortunately old enough to have seen many cycles of garbage products being pitched, including ones that caused the financial crisis for that matter. >> Yeah. It's funny because private credit always seemed to me to be the crap that already nobody wanted to buy that's being bought up by the people that already and if anything ever if everything's fine, okay, it all goes good because they don't market. They just kind of let it sit >> or rates go down go down or something like that. Then they can market to whoever they want. Then they don't have to remarket until some other deal and they can do side pocketing and then >> in the end though those are the ones that are going to have the worst problem because of liquidity issues and they have they have liquidity issues is why we have liquidity issues right to begin with. Well, right. And like if I if I give you $1,000 as a loan and you're going to pay me 10%. You know, it's not bad credit if you just pay me back. So, you know what I was saying the other day is that if you're looking to, you know, deploy capital, let's say $50 million into private credit, you know, that's probably pretty easy to do and you could hold out for good companies. But if you're looking to deploy a billion dollars, you start to have to go down the the the to the bottom of the barrel here to find investments or else you don't get paid. You know, so so much money goes into the sector, but how many high-quality private companies really exist? You know, and private companies are really tough to invest in, you know, you can't get your money out easy. And you know, what's your exit strategy? Is them going public or or or borrowing from somebody else to pay you back, I guess. Right. Right. Right. Right. So, so you know, there's a lot of people that don't want to do the hard work we do at GK, like getting and managing clients, and they rather just sell products to our clients, and that's why we don't let them in is because it's like, you lose the money. I'm the one that has to deal with it, you know, and I lose a client and you still got paid the whole way, >> right? >> You know, right. Right. >> So, so we don't have that here. It's not a problem for me. Um, and as I tell most people, um, I love liquidity, you know, like I I learned this lesson. I mean, it's like how old do you have to be before you just learn lessons? And and one lesson that is constant is when things go bad, liquidity is a massive premium. You know what I mean? It's like it's it's great to have liquidity because you can actually take action when things get bad. like you can now buy this private credit at 15 cents on the dollar >> and there's no and when things go bad it's not like let's do a redo let's have a second chance oh maybe let me let me go backwards a minute you're in it you're in it >> once you're in the quick sand you can't >> it's real hard to tell clients you know they wrote a $100,000 check for blue owl fun 7 and then you say it's all gone >> it's really hard to do that and I'm glad I've never had to do that >> I agree I agree Ross Gerber Gerber Kawasaki always a pleasure to have you on the show appreciate you we're going to have all the information on how to get in touch with you on the discipline.com. Episode notes for number 963. Thanks, buddy. >> Wow. Yeah. Thank you. >> All right. Thanks for having me. Yeah. >> And that's going to wrap up this episode of the discipline investor podcast. That was awesome. I mean, Ross Gerber, we seem to hit it off really well and and I really enjoyed that conversation. So, if you did too, send me a note, drop me a line, go over to the disciplineinvestor.com, click on the ask Andrew button to contact us, find somewhere something to click, send me a note, tell me what you think. I appreciate all the do all the good feedback. Uh, I'll take the bad feedback and read it, but then probably toss it. But nonetheless, I like your feedback. Any way you want to send it. Thanks for joining me this week and every week. Next week, coming up, we got a great guest. We got Thomas Peter. He is the founder. He is the guy that created he is the current one in charge of Interactive Brokers and uh quite a history and something that I'm going to enjoy. I've never really had the opportunity to speak with him before, but this is going to be a great episode. Make sure to be there next week when we bring him on. Thanks for joining me this week and every week. 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