SpaceX IPO: Extensive discussion of SpaceX’s debut with a small float, controlled trading, and a valuation near $2T, emphasizing that price and expectations matter as much as the story.
Valuation Discipline: The host cautions that even world-changing companies can be poor short-term investments if bought at excessive valuations, advising patience for better entry points.
IPO Dynamics: Detailed look at oversubscription, limited retail allocations, underwriter control, and powerful IPO FOMO that can push post-listing prices beyond fundamentals.
Space Economy: The case for long-term potential in rockets, satellites, Starlink, defense contracts, and space infrastructure is recognized, but near-term returns may be constrained by rich pricing.
AI IPOs: Potential listings from OpenAI and Anthropic are highlighted as coming attractions, with the same reminder to evaluate price versus promise rather than chasing hype.
Inflation and Investing: With inflation still biting, the host urges getting invested and using disciplined approaches (e.g., DCA) to protect purchasing power instead of waiting on perfect timing.
Fiduciary Approach: As an RIA, the host avoids pre-IPO allocations due to fairness and regulatory constraints, preferring seasoned, revenue-generating names over hot new issues.
Key Companies: SpaceX is central, with mentions of Tesla, OpenAI, Anthropic, and Blue Origin as context for broader space and AI narratives.
Transcript
This episode is brought to you by Interactive Brokers. And you know, world events unfold in real time. Now you can trade them with IBKR prediction markets, trade elections, climate, and economic outcomes alongside stocks, options, and bonds, all on one integrated platform. These are simple yes or no contracts priced to reflect the market's view of probability. If your prediction is right, you'll receive $1 per contract and earn interest on your position while you're invested. IBKR prediction markets turn market expectations into actionable trades. Prediction contracts, of course, are not suitable for all investors, but I want you to go to find out more about this. Go to ibkr.com/predictions. That's ibkr.com/predictions. The Disciplined [music] 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 [music] 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 [music] financial success. >> [music] >> SpaceX launches its IPO. Inflation still a problem. And I'm asking, yes, I'm asking you, what are you waiting for? I want to know all this and much more in episode number 977 of the Disciplined Investor podcast. [music] >> [music] [music] >> and welcome to the disciplined investor podcast. I'm Andrew Horowitz. I'm your host of this fine podcast, this fine show each and every week where we spend some time talking about you, your money, and everything in between. And of course, I'm also the co-host of DH Unplugged. Myself and John C. D'vorak, we get together each and every week on Tuesdays, and we banter back and forth like two, I don't even know, two old fogies trying to understand what's going on in the world around them of finance, business, and the stock market. So, you have to make sure that you spend some time listening to that as well because I think you'll get a kick out of it. It's more of a I think comedic type of finance than anything else. funny finance. Funny finance and finance can be funny. [laughter] No question about that. Right now, um you know, what are we doing? What's happening? I can tell you here at agency or Horowits Company headquarters, our clients, you know, they've been they've been curious. They've been curious like everybody else about what's going on with regard to, you know what I'm going to say, SpaceX. It feels like everything in the financial world is all about the SpaceX IPO. It happened uh just a few days ago on Friday. That's where the most attention has been involved in the markets in financial media. Even though there's not a lot of concrete information out there, plenty of options and opinions that you may expect because of course we know a bit about their financials. Of course, we know what's going on, but who knows exactly what's happening. They just went from private to public. The deal itself went without a hitch. That was good. Shares were priced at $135 per share. Held steady throughout the offering, throughout the day. When they came public, they didn't sway, by the way. Even though they were five, maybe four or five times over subscribed to that particular new issue, they held the price. A lot of times, what would happen is that a company would say, "Wait, let me get this straight. We're four or five times over over subscribed. That many people want to buy our shares. And what do they do? They immediately go and they start tinkering with the pricing. They turn it up. They're like, you know what? If it's 135 and there's four or five times over subscribed, make it 160. They want to get as much money as they can. The fact though on this deal was that it was a rather small and rather being uh in quotes, it was ridiculously small float. 4% 5% of the overall shares were actually allowed out into the IPO. About 50% of that plus was for institutions. Smaller share for um for the for the retail investor and we're going to talk about that in a second because I got a lot of questions about that particular topic about about retail and what retail is going to get and in particular we got questions from our clients. Now, on the first day of the offering, as you would expect, probably people knew this that there'll be an uptick in those shares because of all the people that want it, it's uh was up, I think 19% by the end of the day. I think it hit 160ish. I think it went as high as 174 173 and it finished a bit below its highs. Solid debut overall though. And as we touched on um a few things, I guess we got to talk about what we told our clients. And we talked about the idea that IPOs generally are not a big focus for us. And even though that initial pop can be attractive, history has shown us something that many of these deals tend to cool off after the initial excitement fades. And over the past several years when you actually look at that that's often been the pattern. So the question we had asked is this one going to be different? I mean maybe from a valuation standpoint it doesn't really stand out though, right? The the excitement feels a bit I guess familiar. It's driven on more about what people are saying and hope that the company will become rather than what it is today. investors paying upwards of a hundred times revenue I don't think are thinking about the next quarter they're thinking much further down the road or maybe they're even betting on something that think about this that they can't even see yet this idea that Elon Musk is a mastermind he's brought wealth to so many people I'm not arguing any of this by the way I agree with this but maybe he's got something else up his sleeve and it's going to go all through this company. We know that XAI is in there. Maybe he's going to roll Tesla in there. Who knows? But we have multiple companies inside of the SpaceX already. And that's something that's kind of interesting when we look at that. The the fact is that when we look at the SpaceX IPO and we look at the amount of excitement was there and finally this came public and from again from a market mechanic standpoint I got to tell you two thumbs up it's important large it was the largest ever there's always a chance for a messy debut but it worked out 19% up. So yeah, there's a pop. It looked to me like a lot of the underwriters wanted to keep this thing at about a $2 trillion valuation, but also seemed like there was a general desire to keep the trading somewhat controlled. This was not one of those wild double on a day type of IPOs. It was strong. was impressive, but it also felt like the market, the underwriters and the big institutions wanted to trade this in a way that kept its valuation high. Maybe somebody said, you know, whatever you do, keep the value of this thing above the level that Elon Musk will definitely be a trillionaire. I don't know. Who knows? But this is where the whole thing gets interesting because the question is not whether SpaceX is an amazing company. And I mentioned this just a second ago because it is. The question is not whether it has changed the world because it has. The question is not even I don't think whether Elon Musk and his team have built something extraordinary because they did. The real investment question here is what is the price that we're paying? And truthfully, that's always the question. Or I'll take that back. That's not always the question. It it should always be the question. We have to put a little preface on that. And the reason for that is that we need to know what we're paying for something. And is a value proposition where we're investing the right thing. Because a great company we know could be a very bad investment at the wrong price. And you think about it for a second, a mediocre company can sometimes be a good investment at the right price because price matters. Valuation matters. Expectations matter. And when you're talking about a company valued at around what now it's two trillion, the market's not just pricing in what exists today. It's pricing it at a very large piece of the future. It's pricing in the Starlink. We know that. It's pricing in launch dominance. It's it's pricing in the potential for even more defense contracts. It's maybe looking out so far and saying, you know what, uh I think that I'm buying this not for that, but for the space infrastructure play that we see could be developing. In fact, it's pricing in a future business that may or may not fully exist yet or in the future. It's pricing in dreams. It's pricing in technology. The ambition and the belief that SpaceX be SpaceX becomes one if not the most important companies in the world. And maybe that happens, maybe it doesn't, but maybe it does. But the stock still struggles for a period of time because the valuation got ahead of itself. That's really the hard part about investing in exciting companies. The story can be right, but the stock could be wrong for a while. Not suggesting that's going to happen, but I'm just trying to set up expectations for anybody that's actually bought this right on the open that you didn't get the IPO. Again, we did not pick up the IPO for IPO for our clients. We'd rather wait till we see the valuation come into a place that we want to buy it. There's other compliance issues that are out there, too. There's all sorts of things that I can list out to you like we did for our clients just to remind them that is not always we're going to be involved in something like this. Now, we may own rocket rocket related companies. That's possible. Those companies that either are on the road to revenue generation, profitability, or have a great product or that at least have a history of trading. We know what this animal is. We understand that we're past and post lockup periods and probably unless something really crazy happens like a huge pop on the stock probably well past anybody uh issuing you shares to try to you know capitalize on a price move and all of this is a lot of art. A lot of art. The science we understand that's the valuations. But yet a company that's losing$4 billion dollars last quarter with an opportunity to make x amount of dollars in the future. It's not just science. There's a lot of art. Do we want to be involved in that now? And you know what? It it all depends. Let's see how it plays out. It's not just about SpaceX either because SpaceX, while it may be the first of several very large IPOs coming to the market in the next several months, because we've heard speculation about other I don't even know if they're massive. It's it's bigger than that, right? Private companies, especially in artificial intelligence. We heard about open AI, Anthropic and other names in the ecosystem that these could eventually become public market stories. And if they do, investors are going to be faced with the same issue. You may love the company, you may love the product, you may use it every day. You may believe it will change the world, but what are you paying for it? That's the whole game. Because they're exciting. This is, you know, hey Johnny, uh, guess what I got? Yeah. Uh, I got allocated 250 shares of, uh, SpaceX in the IPO. You feel special. You feel like you're kind of getting in early. You feel like you're part of something before anyone else is, and you're smarter than everybody else in, too. But in many cases, by the time a company becomes public, a lot of the early money has been made. And that is in particular the new genre of public to private companies. The founders got in early. We know that the employees got in early. Obviously the venture capital firms they got in early too. The private investors hey they got in early. You know what the large institutions also may get favorable allocations. Then there's series A, B, C, D, E, F. Right? And then the public in and then let's back it up for a second. Before the public investor gets it, think about how these things just revalued themselves by using new capital. Even uh Open AI tripled in a matter of months. Now the public investor, you and me and uh the retail come in at the public offering price often after years and years of value creation have already happened privately. This was not the case back in the late 90s and 2000s and but what happened is you'd get in on the early stage and surely you know Amazon was worth plenty of money at that point but there was still a long road ahead of it. Is that here for the anthropics, the open AIs and the SpaceX of the world? Possibly. But the private investor, the VC, the angel investors learned a good lesson that they can really not only get in, but they could ride this value up much faster on the private side, then bring it public at a price that's enormously more handsome than what they did in the past. Now, this doesn't mean that IPOs are bad. It doesn't mean you can't make money in them, but it I think you need to understand what's going on in the structure. IPO is not always designed for the small investor. In many cases, it's an exit. We call this a liquidity event. That's what we're looking for here. A a branding event, a way to raise capital. And what they did was they used $75 billion to to issue 5% of the company. They knew there would be an enormous amount of buzz around it. Meanwhile, Elon Musk maintains the proportional share of oversight, management, voting power, privileges, and the value of the company. This can be great for the company and really good for the insiders, but that does not automatically make it great for the public buyer. Now, again, I am not dissing SpaceX. It's wonderful. It's it's it's minted millionaires and billionaires, but let's think about this. when we're going to hop on the train on the back end of this because when a hot IPO comes out, the float can be really limited compared to demand and that's exactly what happened here and I'm sure that's what going to happen with OpenAI and Anthropic. Not everyone who wants shares gets shares. I didn't think we were going to get shares even if we tried for this. What happens is it becomes public. The stock moves up, people chase, the headline hits, stock surge on debut, that creates even more demand and we got more demand. People f feel like, well, oh my god, I missed it. Then they buy in the open markets. Sometime at prices much higher than the IPO price. Can anybody say FOMO? IPO FOMO. Hello. Fear of missing out is really powerful. We know that. and the most famous company. And the more headlines they get, the more powerful that FOMO becomes. You know, SpaceX is just not simply another company. IT IS ROCKET, SATELLITES, it's going to Mars, it has Elon Musk, you know, it has government contracts, uh, and and he's a master at working the government angle. It's global and international and and and and ambitions beyond the stars and it's the kind of story that you you we all think you know people say yeah I need to own something like this and maybe you do but do you need to own it at any price that's a question that's really what I'm what I want to know right and there's a difference between wanting exposure to innovation and chasing a stock because everybody's talking about it and And that's generally why we don't do IPOs for clients. And and here is the the basic reason. As an as a registered indep you know independent registered uh investment advisor, we have a strict fiduciary standard which means that we are required to act in our clients absolute best interest at all time ensuring that the investment strategy is managed with total transparency and fairness objective analysis and because of this high standard we generally don't participate in traditional pre-public IPO allocations usually because why there's some favoritism that sometimes come you know who do we allocate these shares to we're going to get 300 shares 500 shares what what do I do with that give one share to this guy proportional to his account size but they don't want it but they want more so we give it to that person on that person that didn't want the shares and we give the excess to this it's a real problem it's a real problem there's a regulatory challenge in in in this fair allocation of it and with these limited allocations under the Investment Advisor Act of 1940, we're require required to treat all clients equally, right, and equitably. So, if we receive a small number of shares, how can we possibly distribute them across our entire client base? There's a lot of issues that go along with that. and and you got audit and speculative risk issues also because IPOs are inherently speculative and often experience extreme short-term price volatility and the regulatory bodies that oversee them and our firm including the SEC for example, they heavily scrutinize the allocation of short-term new issues to ensure firms are not engaging in what they would call unfair trade distribution practices. There's all this stuff that's going on. So, our exclusion from the pre-market allocations doesn't mean that our clients missed out of the long-term viability of these great companies, right? Because we'll get involved in it if it's right, if the portfolio strategy, your risk time horizon is right. Sure, no problem. We're just we're just going to buy it because everybody else is buying it. I've seen a few friends do that recently because our primary goal is always going to be the deliberate conflict-free management of our clients financial future. So that doesn't mean again we're not going to be buying this, but we like innovation. We like growth. Our job is to manage risk as is yours as an investor. So this valuation at 100 times forward price earnings questionable. What happens if growth slows? What happens if margins don't improve as fast as expected? What happens if I don't know comp more competition arrives? I mean we didn't see that recently with the the uh experience of Blue Origin that blew up. But the lesson is not to avoid every hot company. Lesson to have discipline. You can admire a company without buying the stock immediately. You can believe in this theme without overconentrating. Maybe you can participate in innovation through a diversified portfolio. It's not missing out. This is investing with a process. So the whole idea of what's going on here, don't get swept up now. You want to buy a little because you feel like you have to buy a little. Fine. Let's see what's going to happen. in the next two, three weeks, two to a month and a half or so. So, let's say six weeks. Let's see what's going to happen with this. And if you can actually get a better price, then we're going to cap. We're going to call it 160 market. 160 is the number we're going to use just as a variance point for the price of this. I want to also talk about taking a hard right turn here. something that's uh come up very recently and I had to deal with this weekend and it's something that has been gnawing at me a uh a situation with a friend but but but a bigger picture that has that has arisen from that a question about life that wraps itself around the idea of your future and what you're doing now to protect it. What you're doing this very day and not putting off till tomorrow. And I'm going to ask you the question. We're going to talk about this right now. What are you waiting for? What are you waiting for? Why are you just sitting there not doing something? Now, this doesn't apply to everybody, but but I want to ask you that. I want you to think about that. I want you to chew on that and bake on it just for a second and I want to come back to this because I want to once again talk about interactive brokers first. You know, you research your investments, you analyze markets, but have you researched your broker for the past three years? Interactive Brokers, individual clients averaged 24.3% annual return, beating the S&P 500 on on that period. Lower costs, competitive rates, and access to over 170 global markets help investors keep more of what they earn because the broker that you choose matters. Interactive Brokers member SIPC. Learn more at ibkr.com/performance. That's ibkr.comerformance. Now, just to get back to this for a second here, this idea of what are you waiting for? You know, right now we have this inflation number that's wreaking havoc with us, right? Right now that people are starting to buy things like crazy because they're all concerned that things are going to move up. The CPI index rose 4.2% from a year earlier. Core inflation we saw, which takes out energy up 2.9%, years above 2%. That's that's that's better than the headline for inflation at 2.9 versus 4.2. Not exactly a victory lineup. The produc the producer price index the PPI came out rising 6.5% from a year ago. So I guess we have to think about these things. What is happening here? People are are making some moves very quickly. They're buying because they're afraid of it going higher. That's the inflation mantra. That's what people get concerned about. As prices rise, people get a little bit crazy. But let's kind of back this up of what what I'm talking about about what are you waiting for? Are you going to let this inflation monster just take control of where your money valuation is? Are you going to allow for the pricing of goods to get so out of reach that it's going to eat it up earlier in life, not keep pace with it because you have not been investing because you're afraid, you're concerned, you're worried about the markets, you're worried about the rigged nature of it, you're worried about the manipulation, you're worried about a crash, you're wor meanwhile, you worry, worry, worry, and onward goes the markets. Now, I'm not talking about one day, one month, one week, one quarter. I'm talking about years in the making. There's plenty of you listening right now and I'm talking to you and I'm asking you, what are you waiting for? And I want to put this into an important rapper. And again, I told you it's something that I've been dealing with for a little while now. And I think it's important to talk about because while it's personal, I want you to think about the times that you say, you know, I'll do it tomorrow. I'll wait for next week. I I I'll think about it later. I'll I'll take that trip when work slows down. Spend more time with my family when things calm down. Not going to buy that boat after that project is done. I'm going to start investing for my future when I have a little bit more money. I'm going to get organized in life when I'm a little bit less busy. Here's the problem. Life doesn't always give us what the clean that clean opening we want and that we're waiting for. There's always something. There's always work. There's always a deadline. There's always a reason. There's always another obligation that we have. There's always something that seems urgent enough to push off the timing for something that actually matters. And I'm saying this today because I just I just saw a friend of mine, a friend of over 30 years, 65 years old. He's dying of cancer. When I say he's dying of cancer, I mean I literally went to see him today to say goodbye. And that's a hard sentence to say. Because 30 years is a long time. You see someone through a different phase of life when they're early on with their family, work, good times, hard times, wins, losses, changes, and you're suddenly sitting there bedside holding his hand. Someone's only 65 years old who's not waking up again. And you know, you're reminded on how fragile all this is. Now, my buddy, he was not an unhappy person by any means. I don't want to paint it this picture that way. He had plenty of happiness. He had a good life, but he also had things that he wanted to do. My friend would talk to me all the time about this uh traveling that he was going to do once he got finished with his project. talked about buying a boat and doing the Great Loop one day once he retired. He would talk about things he wanted to experience once things slowed down a bit. Each thing was always after something else. after this work thing, after this obligation, after this next chapter, when he finally retires, after this problem gets solved, after the busy season is over, after everything just lines up just right. And I think we know how this all goes. That perfect time rarely comes. Life gets in the way. The news gets in the way. Work gets in the way. The family gets in the way. Fear gets in the way. Responsibility gets in the way. Sometimes even success gets in the way because the more you build the more you feel well I have to maintain it and then one day time becomes the thing you can't get more of. That is what hit me and that was what I'm talking about right now. I hope you're staying with me on this because this is important. Why do I preach early on you get a job your first job of your life and you start making X amount of dollars open that 401k. Why? Don't wait 6 months. Do it today. The amount of compounding of interest that you gain by doing something now versus the future is immeasurable when it comes to your retirement. I talk about the future you in the the present you. I talk about making the future you proud by doing something today. Today the way you make yourself proud is don't wait. Why are you waiting and sitting on the sidelines for what? for the markets to go down 25% and then you'll say, "I'm not going in because the markets are crashing. I knew it. I KNEW IT. I KNEW IT. It's going down even more." And that has happened to you how many times since 2000 since 1990. I'm not investing until I find a way to earn at least 5% taxfree and guaranteed. I don't know. You come up with these ideas. We all do reasons rationale for not doing something. And I ask you this question. Where is that getting you? Doing it today will get you somewhere. How How can you look at yourself in the mirror each and every day as you're getting older and keep on postponing what is not only inevitable, by the way, but what is necessary? How do you keep on putting money aside in a money market saying, "I'm going to time this market, man. I know it's going to drop eventually. Right now, if you started at the beginning of the year and said, you know what, I'm waiting for a 10% correction and invest. How's that going for you? Did you do it when it did correct a bit? So, somehow I'm trying to motivate you to make sure that you get in doing it, getting off of the sidelines, doing it today. Life can be short. Let's not get morbid and start thinking, "Well, if it's gonna be short, then what do I need to invest for?" Come on. You got a family, you got a wife, a husband, kids, grandkids, you invest for them. I'm not talking about being reckless. It doesn't mean quitting your job tomorrow for this fire idea, right? This whole idea of financial independence, retire early, or these mini vacations or the uh macro vacations and micro doing vacations, all that. I'm not talking about emptying your bank account, sailing around the world, unless that's actually your plan and you have enough time to go through it. No, I mean, stop assuming that you have unlimited time. You do not have unlimited time to do things. This isn't like, well, what's the point of me making my bed if all I'm going to do is get back in the bed tomorrow? That's not the same thing. You do not have unlimited time, and I don't even know how much time you actually have. I want you to start the conversation. I want you to book the trip. I want you to start the dollar cost averaging. I want to take care of your health. Call the person. Fix the relationship. Spend the time. Make the plan. Start the business, man. Buy the boat if it's really what you want to do. It fits your life. Listen, do the thing that keeps getting pushed off for some imaginary future date. And in particular, what I'm talking about right here is getting that investment portfolio activated properly. Because sometimes, look, the future date doesn't arrive the way you thought it would because investing is one of those biggest areas where people say, "Ah, I'll do it later. I'll start saving later. I'll increase my contribution later. What about estate plan?" Ah, I feel fine. I'll review my insurance. It looks okay. I'll rebalance my portfolio. I'll make a plan later. But later is really expensive. In this particular circumstance, putting things off for the future isn't just putting it off. It's costing you a nut. I mean, it is a hu the huge nut that you're supposed to swirl supposed to be burying. You're it's costing you because when you start early, you give yourself options. You give yourself that flexibility. You give yourself time. And most importantly, you give compounding a chance to work because compounding is one of the close things to magic and finance. But it only works only works if you give it time. The money that you invest today under this compounding process is more time to grow than the money money you you put aside 10 years from now. Obrew obviously that's the case. But I think most people are underestimating how powerful that really is because the early dollars do the heavy lifting. If you start early, you don't need everything to be perfect. You don't need to hit every hot IPO. You don't need to find the next SpaceX. You don't need to have uh a desire to go out and chase the market theme every single day. Time becomes your advantage. That's the whole cool thing here. But if you wait too long, you got to start to feel the pressure. You're going to feel like, wow, you know what? [sighs] I need a big win. You're going to probably feel like you need to take more risk. You're going to be tempted to hit that hot IPO, the hot stock, that hot trend, because you kind of feel behind. This is where people make mistakes. They wait too long to begin. Then they try to make up for lost time with too much risk. That's not a plan. That's that that's a panic disguised as investing. The better answer is to start. Start where you are. Increase over time. Be consistent. Let the plan work for you. And this is true beyond investing too. You don't build the life you want waiting forever. You build it by taking steps. Small steps, small investment counts, a small change counts, a short trip counts, a conversation counts, a review, a decision. The goal is not to be I I don't think it it it you necessarily have to be perfect. The goal is movement. And there's a balance here. I spend a lot of my professional life telling people to plan for their future. Save money, invest wisely. I kind Bobby, don't overspend. Avoid. Yeah, let's stay away from that risk over there. I tell people to think long term. Be patient. And I believe all that. But there's another side of this, too. I don't want you to I don't want you to save for a future that you never allow yourself to enjoy. I don't want you to build a life that looks great on a spreadsheet but leaves no room for living. Balance. The purpose of money is not to just become a bigger number. The purpose of money is to support the life that you want. Protect the people you care about. Create choices and as I always say, give you that freedom of the future what you want to do. That's why planning matters. Good financial investment planning is not about saying no to everything. It's about knowing what you can say yes to. Can you take that trip? Can you retire early? Can you help your kids? Can you buy that boat, that car? Can you change careers? Can I give more to charities? Can I work less? Can I spend more time while I'm healthy enough to enjoy it? Those are the real questions. A portfolio is not the goal. The portfolio is the tool. The goal is the life. And when someone close to you is facing the end of life much earlier than expected, I think it brings that into focus more quickly. And I got to tell you, my buddy 65, laying there helpless to do anything. You think, you start thinking and you start wondering what could I be doing better at? What should I have done? What if that's me? So, I think it's an important point to really think about that and respect and and and and cheer for a great life, opportunities, family, friends, and the opportunities that we give ourselves. Now's the time. It's not tomorrow. And I want you to think about that in the perspective of investing portfolios, your allocations, what you're going to do with it, where you going to go with it. What is the purpose? What is the tool? Again, we know the tool is the portfolio. The goal is the life. The goal is the life. So that's really what I want you to think about and I want to take from want you to take from this episode today. I'm going to end it there. Thanks for joining me this week and every week. Let's make it happen. See you soon. This podcast is intended [music] forformational purposes only and does not constitute personalized investment advice. Investing [music] involves risk, including the possible loss of principle and past performance is not indicative of future results. The views and opinions expressed are those of the host and any guests and may not necessarily reflect those of Horowits & Company Inc. [music] an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. Advisory services are only offered to a client or prospective clients where Horowits Company is properly registered or is excluded from registration requirements. Any mention of thirdparty companies, products, or services is provided forformational purposes only and does not constitute an endorsement. Hypothetical scenarios or forward-looking statements are for illustrated purposes and should not be viewed as guarantees. Content is intended for US residents only and may not be applicable in other jurisdictions. Listeners should consult a qualified financial adviser before making any investment decisions. Please visit our website for additional information, disclosures, as well as a copy of our form CS. Advertisements are not related to the host or [music] affiliates and are not considered recommendations by the host of the show or any affiliates department. [music]
TDI Podcast: WHAT ARE YOU WAITING FOR? (#977)
Summary
Transcript
This episode is brought to you by Interactive Brokers. And you know, world events unfold in real time. Now you can trade them with IBKR prediction markets, trade elections, climate, and economic outcomes alongside stocks, options, and bonds, all on one integrated platform. These are simple yes or no contracts priced to reflect the market's view of probability. If your prediction is right, you'll receive $1 per contract and earn interest on your position while you're invested. IBKR prediction markets turn market expectations into actionable trades. Prediction contracts, of course, are not suitable for all investors, but I want you to go to find out more about this. Go to ibkr.com/predictions. That's ibkr.com/predictions. The Disciplined [music] 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 [music] 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 [music] financial success. >> [music] >> SpaceX launches its IPO. Inflation still a problem. And I'm asking, yes, I'm asking you, what are you waiting for? I want to know all this and much more in episode number 977 of the Disciplined Investor podcast. [music] >> [music] [music] >> and welcome to the disciplined investor podcast. I'm Andrew Horowitz. I'm your host of this fine podcast, this fine show each and every week where we spend some time talking about you, your money, and everything in between. And of course, I'm also the co-host of DH Unplugged. Myself and John C. D'vorak, we get together each and every week on Tuesdays, and we banter back and forth like two, I don't even know, two old fogies trying to understand what's going on in the world around them of finance, business, and the stock market. So, you have to make sure that you spend some time listening to that as well because I think you'll get a kick out of it. It's more of a I think comedic type of finance than anything else. funny finance. Funny finance and finance can be funny. [laughter] No question about that. Right now, um you know, what are we doing? What's happening? I can tell you here at agency or Horowits Company headquarters, our clients, you know, they've been they've been curious. They've been curious like everybody else about what's going on with regard to, you know what I'm going to say, SpaceX. It feels like everything in the financial world is all about the SpaceX IPO. It happened uh just a few days ago on Friday. That's where the most attention has been involved in the markets in financial media. Even though there's not a lot of concrete information out there, plenty of options and opinions that you may expect because of course we know a bit about their financials. Of course, we know what's going on, but who knows exactly what's happening. They just went from private to public. The deal itself went without a hitch. That was good. Shares were priced at $135 per share. Held steady throughout the offering, throughout the day. When they came public, they didn't sway, by the way. Even though they were five, maybe four or five times over subscribed to that particular new issue, they held the price. A lot of times, what would happen is that a company would say, "Wait, let me get this straight. We're four or five times over over subscribed. That many people want to buy our shares. And what do they do? They immediately go and they start tinkering with the pricing. They turn it up. They're like, you know what? If it's 135 and there's four or five times over subscribed, make it 160. They want to get as much money as they can. The fact though on this deal was that it was a rather small and rather being uh in quotes, it was ridiculously small float. 4% 5% of the overall shares were actually allowed out into the IPO. About 50% of that plus was for institutions. Smaller share for um for the for the retail investor and we're going to talk about that in a second because I got a lot of questions about that particular topic about about retail and what retail is going to get and in particular we got questions from our clients. Now, on the first day of the offering, as you would expect, probably people knew this that there'll be an uptick in those shares because of all the people that want it, it's uh was up, I think 19% by the end of the day. I think it hit 160ish. I think it went as high as 174 173 and it finished a bit below its highs. Solid debut overall though. And as we touched on um a few things, I guess we got to talk about what we told our clients. And we talked about the idea that IPOs generally are not a big focus for us. And even though that initial pop can be attractive, history has shown us something that many of these deals tend to cool off after the initial excitement fades. And over the past several years when you actually look at that that's often been the pattern. So the question we had asked is this one going to be different? I mean maybe from a valuation standpoint it doesn't really stand out though, right? The the excitement feels a bit I guess familiar. It's driven on more about what people are saying and hope that the company will become rather than what it is today. investors paying upwards of a hundred times revenue I don't think are thinking about the next quarter they're thinking much further down the road or maybe they're even betting on something that think about this that they can't even see yet this idea that Elon Musk is a mastermind he's brought wealth to so many people I'm not arguing any of this by the way I agree with this but maybe he's got something else up his sleeve and it's going to go all through this company. We know that XAI is in there. Maybe he's going to roll Tesla in there. Who knows? But we have multiple companies inside of the SpaceX already. And that's something that's kind of interesting when we look at that. The the fact is that when we look at the SpaceX IPO and we look at the amount of excitement was there and finally this came public and from again from a market mechanic standpoint I got to tell you two thumbs up it's important large it was the largest ever there's always a chance for a messy debut but it worked out 19% up. So yeah, there's a pop. It looked to me like a lot of the underwriters wanted to keep this thing at about a $2 trillion valuation, but also seemed like there was a general desire to keep the trading somewhat controlled. This was not one of those wild double on a day type of IPOs. It was strong. was impressive, but it also felt like the market, the underwriters and the big institutions wanted to trade this in a way that kept its valuation high. Maybe somebody said, you know, whatever you do, keep the value of this thing above the level that Elon Musk will definitely be a trillionaire. I don't know. Who knows? But this is where the whole thing gets interesting because the question is not whether SpaceX is an amazing company. And I mentioned this just a second ago because it is. The question is not whether it has changed the world because it has. The question is not even I don't think whether Elon Musk and his team have built something extraordinary because they did. The real investment question here is what is the price that we're paying? And truthfully, that's always the question. Or I'll take that back. That's not always the question. It it should always be the question. We have to put a little preface on that. And the reason for that is that we need to know what we're paying for something. And is a value proposition where we're investing the right thing. Because a great company we know could be a very bad investment at the wrong price. And you think about it for a second, a mediocre company can sometimes be a good investment at the right price because price matters. Valuation matters. Expectations matter. And when you're talking about a company valued at around what now it's two trillion, the market's not just pricing in what exists today. It's pricing it at a very large piece of the future. It's pricing in the Starlink. We know that. It's pricing in launch dominance. It's it's pricing in the potential for even more defense contracts. It's maybe looking out so far and saying, you know what, uh I think that I'm buying this not for that, but for the space infrastructure play that we see could be developing. In fact, it's pricing in a future business that may or may not fully exist yet or in the future. It's pricing in dreams. It's pricing in technology. The ambition and the belief that SpaceX be SpaceX becomes one if not the most important companies in the world. And maybe that happens, maybe it doesn't, but maybe it does. But the stock still struggles for a period of time because the valuation got ahead of itself. That's really the hard part about investing in exciting companies. The story can be right, but the stock could be wrong for a while. Not suggesting that's going to happen, but I'm just trying to set up expectations for anybody that's actually bought this right on the open that you didn't get the IPO. Again, we did not pick up the IPO for IPO for our clients. We'd rather wait till we see the valuation come into a place that we want to buy it. There's other compliance issues that are out there, too. There's all sorts of things that I can list out to you like we did for our clients just to remind them that is not always we're going to be involved in something like this. Now, we may own rocket rocket related companies. That's possible. Those companies that either are on the road to revenue generation, profitability, or have a great product or that at least have a history of trading. We know what this animal is. We understand that we're past and post lockup periods and probably unless something really crazy happens like a huge pop on the stock probably well past anybody uh issuing you shares to try to you know capitalize on a price move and all of this is a lot of art. A lot of art. The science we understand that's the valuations. But yet a company that's losing$4 billion dollars last quarter with an opportunity to make x amount of dollars in the future. It's not just science. There's a lot of art. Do we want to be involved in that now? And you know what? It it all depends. Let's see how it plays out. It's not just about SpaceX either because SpaceX, while it may be the first of several very large IPOs coming to the market in the next several months, because we've heard speculation about other I don't even know if they're massive. It's it's bigger than that, right? Private companies, especially in artificial intelligence. We heard about open AI, Anthropic and other names in the ecosystem that these could eventually become public market stories. And if they do, investors are going to be faced with the same issue. You may love the company, you may love the product, you may use it every day. You may believe it will change the world, but what are you paying for it? That's the whole game. Because they're exciting. This is, you know, hey Johnny, uh, guess what I got? Yeah. Uh, I got allocated 250 shares of, uh, SpaceX in the IPO. You feel special. You feel like you're kind of getting in early. You feel like you're part of something before anyone else is, and you're smarter than everybody else in, too. But in many cases, by the time a company becomes public, a lot of the early money has been made. And that is in particular the new genre of public to private companies. The founders got in early. We know that the employees got in early. Obviously the venture capital firms they got in early too. The private investors hey they got in early. You know what the large institutions also may get favorable allocations. Then there's series A, B, C, D, E, F. Right? And then the public in and then let's back it up for a second. Before the public investor gets it, think about how these things just revalued themselves by using new capital. Even uh Open AI tripled in a matter of months. Now the public investor, you and me and uh the retail come in at the public offering price often after years and years of value creation have already happened privately. This was not the case back in the late 90s and 2000s and but what happened is you'd get in on the early stage and surely you know Amazon was worth plenty of money at that point but there was still a long road ahead of it. Is that here for the anthropics, the open AIs and the SpaceX of the world? Possibly. But the private investor, the VC, the angel investors learned a good lesson that they can really not only get in, but they could ride this value up much faster on the private side, then bring it public at a price that's enormously more handsome than what they did in the past. Now, this doesn't mean that IPOs are bad. It doesn't mean you can't make money in them, but it I think you need to understand what's going on in the structure. IPO is not always designed for the small investor. In many cases, it's an exit. We call this a liquidity event. That's what we're looking for here. A a branding event, a way to raise capital. And what they did was they used $75 billion to to issue 5% of the company. They knew there would be an enormous amount of buzz around it. Meanwhile, Elon Musk maintains the proportional share of oversight, management, voting power, privileges, and the value of the company. This can be great for the company and really good for the insiders, but that does not automatically make it great for the public buyer. Now, again, I am not dissing SpaceX. It's wonderful. It's it's it's minted millionaires and billionaires, but let's think about this. when we're going to hop on the train on the back end of this because when a hot IPO comes out, the float can be really limited compared to demand and that's exactly what happened here and I'm sure that's what going to happen with OpenAI and Anthropic. Not everyone who wants shares gets shares. I didn't think we were going to get shares even if we tried for this. What happens is it becomes public. The stock moves up, people chase, the headline hits, stock surge on debut, that creates even more demand and we got more demand. People f feel like, well, oh my god, I missed it. Then they buy in the open markets. Sometime at prices much higher than the IPO price. Can anybody say FOMO? IPO FOMO. Hello. Fear of missing out is really powerful. We know that. and the most famous company. And the more headlines they get, the more powerful that FOMO becomes. You know, SpaceX is just not simply another company. IT IS ROCKET, SATELLITES, it's going to Mars, it has Elon Musk, you know, it has government contracts, uh, and and he's a master at working the government angle. It's global and international and and and and ambitions beyond the stars and it's the kind of story that you you we all think you know people say yeah I need to own something like this and maybe you do but do you need to own it at any price that's a question that's really what I'm what I want to know right and there's a difference between wanting exposure to innovation and chasing a stock because everybody's talking about it and And that's generally why we don't do IPOs for clients. And and here is the the basic reason. As an as a registered indep you know independent registered uh investment advisor, we have a strict fiduciary standard which means that we are required to act in our clients absolute best interest at all time ensuring that the investment strategy is managed with total transparency and fairness objective analysis and because of this high standard we generally don't participate in traditional pre-public IPO allocations usually because why there's some favoritism that sometimes come you know who do we allocate these shares to we're going to get 300 shares 500 shares what what do I do with that give one share to this guy proportional to his account size but they don't want it but they want more so we give it to that person on that person that didn't want the shares and we give the excess to this it's a real problem it's a real problem there's a regulatory challenge in in in this fair allocation of it and with these limited allocations under the Investment Advisor Act of 1940, we're require required to treat all clients equally, right, and equitably. So, if we receive a small number of shares, how can we possibly distribute them across our entire client base? There's a lot of issues that go along with that. and and you got audit and speculative risk issues also because IPOs are inherently speculative and often experience extreme short-term price volatility and the regulatory bodies that oversee them and our firm including the SEC for example, they heavily scrutinize the allocation of short-term new issues to ensure firms are not engaging in what they would call unfair trade distribution practices. There's all this stuff that's going on. So, our exclusion from the pre-market allocations doesn't mean that our clients missed out of the long-term viability of these great companies, right? Because we'll get involved in it if it's right, if the portfolio strategy, your risk time horizon is right. Sure, no problem. We're just we're just going to buy it because everybody else is buying it. I've seen a few friends do that recently because our primary goal is always going to be the deliberate conflict-free management of our clients financial future. So that doesn't mean again we're not going to be buying this, but we like innovation. We like growth. Our job is to manage risk as is yours as an investor. So this valuation at 100 times forward price earnings questionable. What happens if growth slows? What happens if margins don't improve as fast as expected? What happens if I don't know comp more competition arrives? I mean we didn't see that recently with the the uh experience of Blue Origin that blew up. But the lesson is not to avoid every hot company. Lesson to have discipline. You can admire a company without buying the stock immediately. You can believe in this theme without overconentrating. Maybe you can participate in innovation through a diversified portfolio. It's not missing out. This is investing with a process. So the whole idea of what's going on here, don't get swept up now. You want to buy a little because you feel like you have to buy a little. Fine. Let's see what's going to happen. in the next two, three weeks, two to a month and a half or so. So, let's say six weeks. Let's see what's going to happen with this. And if you can actually get a better price, then we're going to cap. We're going to call it 160 market. 160 is the number we're going to use just as a variance point for the price of this. I want to also talk about taking a hard right turn here. something that's uh come up very recently and I had to deal with this weekend and it's something that has been gnawing at me a uh a situation with a friend but but but a bigger picture that has that has arisen from that a question about life that wraps itself around the idea of your future and what you're doing now to protect it. What you're doing this very day and not putting off till tomorrow. And I'm going to ask you the question. We're going to talk about this right now. What are you waiting for? What are you waiting for? Why are you just sitting there not doing something? Now, this doesn't apply to everybody, but but I want to ask you that. I want you to think about that. I want you to chew on that and bake on it just for a second and I want to come back to this because I want to once again talk about interactive brokers first. You know, you research your investments, you analyze markets, but have you researched your broker for the past three years? Interactive Brokers, individual clients averaged 24.3% annual return, beating the S&P 500 on on that period. Lower costs, competitive rates, and access to over 170 global markets help investors keep more of what they earn because the broker that you choose matters. Interactive Brokers member SIPC. Learn more at ibkr.com/performance. That's ibkr.comerformance. Now, just to get back to this for a second here, this idea of what are you waiting for? You know, right now we have this inflation number that's wreaking havoc with us, right? Right now that people are starting to buy things like crazy because they're all concerned that things are going to move up. The CPI index rose 4.2% from a year earlier. Core inflation we saw, which takes out energy up 2.9%, years above 2%. That's that's that's better than the headline for inflation at 2.9 versus 4.2. Not exactly a victory lineup. The produc the producer price index the PPI came out rising 6.5% from a year ago. So I guess we have to think about these things. What is happening here? People are are making some moves very quickly. They're buying because they're afraid of it going higher. That's the inflation mantra. That's what people get concerned about. As prices rise, people get a little bit crazy. But let's kind of back this up of what what I'm talking about about what are you waiting for? Are you going to let this inflation monster just take control of where your money valuation is? Are you going to allow for the pricing of goods to get so out of reach that it's going to eat it up earlier in life, not keep pace with it because you have not been investing because you're afraid, you're concerned, you're worried about the markets, you're worried about the rigged nature of it, you're worried about the manipulation, you're worried about a crash, you're wor meanwhile, you worry, worry, worry, and onward goes the markets. Now, I'm not talking about one day, one month, one week, one quarter. I'm talking about years in the making. There's plenty of you listening right now and I'm talking to you and I'm asking you, what are you waiting for? And I want to put this into an important rapper. And again, I told you it's something that I've been dealing with for a little while now. And I think it's important to talk about because while it's personal, I want you to think about the times that you say, you know, I'll do it tomorrow. I'll wait for next week. I I I'll think about it later. I'll I'll take that trip when work slows down. Spend more time with my family when things calm down. Not going to buy that boat after that project is done. I'm going to start investing for my future when I have a little bit more money. I'm going to get organized in life when I'm a little bit less busy. Here's the problem. Life doesn't always give us what the clean that clean opening we want and that we're waiting for. There's always something. There's always work. There's always a deadline. There's always a reason. There's always another obligation that we have. There's always something that seems urgent enough to push off the timing for something that actually matters. And I'm saying this today because I just I just saw a friend of mine, a friend of over 30 years, 65 years old. He's dying of cancer. When I say he's dying of cancer, I mean I literally went to see him today to say goodbye. And that's a hard sentence to say. Because 30 years is a long time. You see someone through a different phase of life when they're early on with their family, work, good times, hard times, wins, losses, changes, and you're suddenly sitting there bedside holding his hand. Someone's only 65 years old who's not waking up again. And you know, you're reminded on how fragile all this is. Now, my buddy, he was not an unhappy person by any means. I don't want to paint it this picture that way. He had plenty of happiness. He had a good life, but he also had things that he wanted to do. My friend would talk to me all the time about this uh traveling that he was going to do once he got finished with his project. talked about buying a boat and doing the Great Loop one day once he retired. He would talk about things he wanted to experience once things slowed down a bit. Each thing was always after something else. after this work thing, after this obligation, after this next chapter, when he finally retires, after this problem gets solved, after the busy season is over, after everything just lines up just right. And I think we know how this all goes. That perfect time rarely comes. Life gets in the way. The news gets in the way. Work gets in the way. The family gets in the way. Fear gets in the way. Responsibility gets in the way. Sometimes even success gets in the way because the more you build the more you feel well I have to maintain it and then one day time becomes the thing you can't get more of. That is what hit me and that was what I'm talking about right now. I hope you're staying with me on this because this is important. Why do I preach early on you get a job your first job of your life and you start making X amount of dollars open that 401k. Why? Don't wait 6 months. Do it today. The amount of compounding of interest that you gain by doing something now versus the future is immeasurable when it comes to your retirement. I talk about the future you in the the present you. I talk about making the future you proud by doing something today. Today the way you make yourself proud is don't wait. Why are you waiting and sitting on the sidelines for what? for the markets to go down 25% and then you'll say, "I'm not going in because the markets are crashing. I knew it. I KNEW IT. I KNEW IT. It's going down even more." And that has happened to you how many times since 2000 since 1990. I'm not investing until I find a way to earn at least 5% taxfree and guaranteed. I don't know. You come up with these ideas. We all do reasons rationale for not doing something. And I ask you this question. Where is that getting you? Doing it today will get you somewhere. How How can you look at yourself in the mirror each and every day as you're getting older and keep on postponing what is not only inevitable, by the way, but what is necessary? How do you keep on putting money aside in a money market saying, "I'm going to time this market, man. I know it's going to drop eventually. Right now, if you started at the beginning of the year and said, you know what, I'm waiting for a 10% correction and invest. How's that going for you? Did you do it when it did correct a bit? So, somehow I'm trying to motivate you to make sure that you get in doing it, getting off of the sidelines, doing it today. Life can be short. Let's not get morbid and start thinking, "Well, if it's gonna be short, then what do I need to invest for?" Come on. You got a family, you got a wife, a husband, kids, grandkids, you invest for them. I'm not talking about being reckless. It doesn't mean quitting your job tomorrow for this fire idea, right? This whole idea of financial independence, retire early, or these mini vacations or the uh macro vacations and micro doing vacations, all that. I'm not talking about emptying your bank account, sailing around the world, unless that's actually your plan and you have enough time to go through it. No, I mean, stop assuming that you have unlimited time. You do not have unlimited time to do things. This isn't like, well, what's the point of me making my bed if all I'm going to do is get back in the bed tomorrow? That's not the same thing. You do not have unlimited time, and I don't even know how much time you actually have. I want you to start the conversation. I want you to book the trip. I want you to start the dollar cost averaging. I want to take care of your health. Call the person. Fix the relationship. Spend the time. Make the plan. Start the business, man. Buy the boat if it's really what you want to do. It fits your life. Listen, do the thing that keeps getting pushed off for some imaginary future date. And in particular, what I'm talking about right here is getting that investment portfolio activated properly. Because sometimes, look, the future date doesn't arrive the way you thought it would because investing is one of those biggest areas where people say, "Ah, I'll do it later. I'll start saving later. I'll increase my contribution later. What about estate plan?" Ah, I feel fine. I'll review my insurance. It looks okay. I'll rebalance my portfolio. I'll make a plan later. But later is really expensive. In this particular circumstance, putting things off for the future isn't just putting it off. It's costing you a nut. I mean, it is a hu the huge nut that you're supposed to swirl supposed to be burying. You're it's costing you because when you start early, you give yourself options. You give yourself that flexibility. You give yourself time. And most importantly, you give compounding a chance to work because compounding is one of the close things to magic and finance. But it only works only works if you give it time. The money that you invest today under this compounding process is more time to grow than the money money you you put aside 10 years from now. Obrew obviously that's the case. But I think most people are underestimating how powerful that really is because the early dollars do the heavy lifting. If you start early, you don't need everything to be perfect. You don't need to hit every hot IPO. You don't need to find the next SpaceX. You don't need to have uh a desire to go out and chase the market theme every single day. Time becomes your advantage. That's the whole cool thing here. But if you wait too long, you got to start to feel the pressure. You're going to feel like, wow, you know what? [sighs] I need a big win. You're going to probably feel like you need to take more risk. You're going to be tempted to hit that hot IPO, the hot stock, that hot trend, because you kind of feel behind. This is where people make mistakes. They wait too long to begin. Then they try to make up for lost time with too much risk. That's not a plan. That's that that's a panic disguised as investing. The better answer is to start. Start where you are. Increase over time. Be consistent. Let the plan work for you. And this is true beyond investing too. You don't build the life you want waiting forever. You build it by taking steps. Small steps, small investment counts, a small change counts, a short trip counts, a conversation counts, a review, a decision. The goal is not to be I I don't think it it it you necessarily have to be perfect. The goal is movement. And there's a balance here. I spend a lot of my professional life telling people to plan for their future. Save money, invest wisely. I kind Bobby, don't overspend. Avoid. Yeah, let's stay away from that risk over there. I tell people to think long term. Be patient. And I believe all that. But there's another side of this, too. I don't want you to I don't want you to save for a future that you never allow yourself to enjoy. I don't want you to build a life that looks great on a spreadsheet but leaves no room for living. Balance. The purpose of money is not to just become a bigger number. The purpose of money is to support the life that you want. Protect the people you care about. Create choices and as I always say, give you that freedom of the future what you want to do. That's why planning matters. Good financial investment planning is not about saying no to everything. It's about knowing what you can say yes to. Can you take that trip? Can you retire early? Can you help your kids? Can you buy that boat, that car? Can you change careers? Can I give more to charities? Can I work less? Can I spend more time while I'm healthy enough to enjoy it? Those are the real questions. A portfolio is not the goal. The portfolio is the tool. The goal is the life. And when someone close to you is facing the end of life much earlier than expected, I think it brings that into focus more quickly. And I got to tell you, my buddy 65, laying there helpless to do anything. You think, you start thinking and you start wondering what could I be doing better at? What should I have done? What if that's me? So, I think it's an important point to really think about that and respect and and and and cheer for a great life, opportunities, family, friends, and the opportunities that we give ourselves. Now's the time. It's not tomorrow. And I want you to think about that in the perspective of investing portfolios, your allocations, what you're going to do with it, where you going to go with it. What is the purpose? What is the tool? Again, we know the tool is the portfolio. The goal is the life. The goal is the life. So that's really what I want you to think about and I want to take from want you to take from this episode today. I'm going to end it there. Thanks for joining me this week and every week. Let's make it happen. See you soon. This podcast is intended [music] forformational purposes only and does not constitute personalized investment advice. Investing [music] involves risk, including the possible loss of principle and past performance is not indicative of future results. The views and opinions expressed are those of the host and any guests and may not necessarily reflect those of Horowits & Company Inc. [music] an investment adviser registered with the US Securities and Exchange Commission. Registration with the SEC does not imply a certain level of training or skill. Advisory services are only offered to a client or prospective clients where Horowits Company is properly registered or is excluded from registration requirements. Any mention of thirdparty companies, products, or services is provided forformational purposes only and does not constitute an endorsement. Hypothetical scenarios or forward-looking statements are for illustrated purposes and should not be viewed as guarantees. Content is intended for US residents only and may not be applicable in other jurisdictions. Listeners should consult a qualified financial adviser before making any investment decisions. Please visit our website for additional information, disclosures, as well as a copy of our form CS. Advertisements are not related to the host or [music] affiliates and are not considered recommendations by the host of the show or any affiliates department. [music]