AI Theme: Extensive discussion on AI infrastructure and demand, including data center capex expectations and potential valuation risks if rates rise.
Nvidia (NVDA): Highlighted a flurry of partnerships and a $1B strategic stake in Nokia, with PR momentum seen as diversification to mitigate any AI downturn.
Nokia (NOK): Detailed the NVDA-led $1B investment and 166M new share issuance, plus a 5G/6G collaboration running on Nvidia chips despite dilution; shares surged on the news.
Semiconductors: Qualcomm (QCOM) jumped on new AI data center chips, AMD (AMD) secured a $1B U.S. supercomputer project, and competition dynamics did not dent NVDA/AMD near term.
Microsoft (MSFT): Noted OpenAI’s structure change granting MSFT ~27% stake and its $4T market cap milestone, reinforcing big-tech leverage over AI platforms.
Tesla (TSLA): Despite margin compression and weak earnings, shares rallied on robo-taxi PR; added governance risk as Musk’s pay package drama raises leadership continuity questions.
Retail & Labor: Amazon (AMZN) to cut ~30,000 corporate roles (small relative to 1.5M workforce), while Target (TGT) trims ~1,800 corporate jobs to reignite growth after stagnation.
Macro & Markets: Hosts flagged a parabolic market and possible exhaustion as the Fed eyes a cut; Emerging Markets are strong (China, Vietnam, Indonesia, Korea) with a 37-38% YTD gain.
Transcript
Hello and welcome to D'vorak Horowitz Unplugged, an hour-long discussion of activity in the financial markets around the world featuring [music] columnist John C. D'vorak and money manager Andrew Horowitz. This conversation is casual [music] and unrehearsed. Let's join John and Andrew now. [music] >> I'm John Cavorak. >> And I'm Andrew Horowitz. >> And it's the 28th, I believe. >> Yep. >> Uh ending up the month here. uh 28th of October. >> Very exciting month. Another month is gone. Friday is Halloween. Do you get a lot of uh Halloween? >> I'm on I'm on uh you have to walk about three stories. >> Oh, >> up a small hill and then a long then two flights of steps to get to my front door. >> So, the answer is no. So, it's it's a great place if you want to throw hot boiling oil uh on people, but it's a very uh Yeah, I think in the last three Halloweens, I've had one family come finally make the trek. I don't really think I've heard many people say they've lived in an elevated house and that it's great so that in case somebody comes, I can throw scalding hot tar on them. That That's not a usual conversation you have. It >> was oil, not tar. Oh, >> oil. Yeah. >> Tar stinks. Yeah. >> Uh, well, we hardly get anybody. It's It's Although this year may be different because it's on a Friday. >> Why was it that Why don't you never get anybody? >> I I don't know. >> Are you one of those neighborhoods where you just everyone turns their lights off and they not welcoming? >> Yeah. Shut the shutters, turn the lights off, you know, just uh don't answer the door no matter what happens. We usually get like a group of people that come to our house and then that's it. >> Well, yeah. I'll tell you what. You give everyone in the group five bucks and you'll have more people if you want them. >> Definitely. Well, let's talk about what's happening with the markets. Clearly, the the answer right now to what to do at the moment is don't fight the tape. The tape is in a hysterical maneuver upward that nothing seems to bother it. No matter what happens, no matter how crazy it gets, no matter the news, no matter the fact that Tesla's earnings came in and they were short on margin by a long shot and it looked like it was pretty bad. Stock came down to about 100 4 I don't know 15. it ramped right back up two days later and uh god forbid you get some good news out of something like you saw from Wayfair today that seemingly the uh furniture tariffs aren't bothering anybody you know and the stock is up 23% today or you have Nvidia coming out and with probably 30 different deal announcements today Jensen Juan was on fire today and even inst ed a billion dollars into a company, which we'll get into. But at the same time, I must say, you're starting to see these potential exhaustion signals, the parabolic move up in markets like where we've seen the hockey stick. These are are similar signs you've seen in other exhaustion moves where everybody just says, "Okay, I can't hold back anymore. Let's just throw our money in and just get it done." I I Yeah, I had a I have a this I have a signal that I look for and it it came up. >> I did. >> Yeah. It's when one of the one of the one of my uh I won't say exactly who, but the family member who comes to the dinner table. >> Oh. >> And says, "You think I should get into the stock market?" >> Yep. >> Out of the blue. Uh that's my signal that things are gonna I'm reminding when I worked at TechTV uh I remember during the uh the runup of the dot crash uh one just right before it one of the uh cute little camera girls came over who handled the video and she comes up to me and she says you you knew a lot about the stock market. Do you think I should get in I should buy some stock? >> Yeah. It was just before the uh.com collapse. >> I have I have I have clients are accurate. I have clients that >> uh can tell you the top of bottom very easily. When things are too good, they want to buy more. When things are bad, they want out. And that is a sure signal that we're at the end of whatever that thrust is. >> Yeah. Yeah. It's it's it's noticeable. >> Just have one that a gentleman Bert Bert he was like that. and he was always on the wrong side of the trade >> and it was your fault. >> Well, I didn't listen to him because I don't have to. I can do what I want. But we're seeing a lot of signs of overheating. But don't worry, nothing to fear. Don't worry. You know, the government's here. We got a Fed rate decision coming tomorrow. The meeting was today. And even though we have some good things happening, which we'll talk about, the Fed's going to probably reduce rates anyway. We have the biggest week for S&P earnings. We got a lot of numbers that came out today, yesterday, tomorrow is Microsoft and we have some of the other big guns coming out throughout the end of the week. And um first time ever, the first time the S&P 500's over like 6,800 all-time highs and uh we have a surprise when it comes to the profit margins with these tariffs. I'm starting to believe that these tariffs aren't actually happening. Well, there's some money coming in because he keeps talking about a$ 1.5 or $150 billion uh tariffs going into the treasury. >> I don't know where they're coming from because it seems like all these companies particularly you look at Wayfair as a great example didn't it doesn't bother them at all. >> Didn't have any major effect. In fact, they had a great quarter. You would have think that there was buying >> D. I know exactly what you're saying. >> It's weird. Just weird. And emerging markets are on fire. Weren't those the ones where we were hitting pretty hard. You got China, you got uh Vietnam, you got Indonesia, you got uh Korea. All-time highs. Alltime highs. Great stuff ramping crazy. The emerging market uh index that we track and that we invest with our clients, we're up like 37% 38% this year. just in the emerging market stocks. Uh little factoid, the Fort Lauderdale boat show is uh starting tomorrow. Uh this is big because it's the equivalent, you know, a lot of cities vive for the Super Bowl because there's like a you know a billion dollars or so economic impact that comes to that city because of the Super Bowl. >> Yeah. This is like a Super Bowl every single year for Fort Lauderdale or for Florida in general. $1.78 billion in economic output, supporting more than 100,000 jobs and creating millions in sales and taxes. It's considered the largest boat show in the world. 3 million square feet of exhibition space across multiple marinas. >> So when you go there, what you do? You go in and out of boats and say, "Hey, nice boat." >> Yeah, you can if you want to. Sure. There's an inwater show. There's a uh uh I'm invited tomorrow to the VIP. >> Then this How is this different from a giant RV show? >> It's RVs don't float. >> Ah, okay. I knew there was a difference. >> I mean, some of these boats are spectacular. >> Yeah, bet. >> They're just they're just unbelievable. I'm going to be heading over tomorrow uh for a quick I was invited over to the VIP experience, which you go I'll have >> when you get to throw a football into a net >> maybe. I don't know. But uh the drinks are included and this is included and I got shuttles uh via the uh the uh the >> free drinks. They think you're a buyer. >> Yeah. I [clears throat] don't know. Somebody bought tickets for us and I'm like I'm not coming. They're like, "You want you to come?" I'm like, "I'm not going." "All right, we'll go." So we'll go for a couple hours in the afternoon tomorrow just to see what what's all about. I have I have plenty of stops. I have friends that have boats in the show. My son has a boat in the show um to sell and my friend uh recently bought a boat and he negotiated said listen you want my boat in the show you have to give me x amount of dollars back on the boat so they lowered the price for him so he's going to be in the show for the next three days so a lot of exciting things happening we'll see some of the newest greatest gadgets and fishing stuff and um it's usually back in the day John this was great this thing you know Why >> do you know why? >> No. Why? Why? >> I'll tell you why, Andrew. Why? This a good question. I'm glad you asked. Uh because the old back in the day, there wasn't any internet. I mean, I'm talking about back in the day. >> So, you didn't know what the newest and greatest products were out there, the new lures, the new uh uh, you know, GPS units, the new engines. You know, you read about them here and there, but the only place to see it was really in the show. Now all this stuff is available on the internet and you can find it cheaper at other places. Used to be also deals at the boat show and there's always that the German glue guy or the people that clean your glasses with that purple stuff which is just Windex with purple dye in it. My is my opinion. Um and you have all the you know the guy with the steak knives. There's all these cool things around the area. You go look and see what's going on >> like the like the county fair. >> Yeah. I will tell you though, the last time I bought something there was very disappointing. I was going to buy a um So, when you fish, you need a depending on what you're fishing for, you use a gaff. So, you grab the fish with the gaff and bring them on the boat, right? It's like a hook. >> So, I said there was there was one there was a gaff there that had a winthrop hook on it, which is kind of a squared off hook instead of a round one. I said, "How much is that right there?" He says, " $285." I said, "Oh, really?" He said, "Yeah." I said, "That's that's the boat show price." said, "Oh, it's boat show." I said, "How much is it if I go to your store?" $285. I said, "Wait a second. It used to be that we came to the boat show and got deals." He said to me, "Not anymore." That actually forced us to decide to go to a little um place called the what is it called? The fishing hole. There's a there's a place that you go online and has all the parts separately. So, we bought the the Winthr Hook. We bought the shaft and we bought all this other stuff with uh to design it and watched YouTube and made our own gas for like $100. >> Just as good as they would have had. >> That's a That's good. Yeah, >> that's what you're supposed to do. >> What was that called? The watering hole, the fishing hole or something? Mud hole. Mud hole. It's called the mud hole. Um I want to mention something a little uh little um announcement. I had a long discussion with my good friend Adam Curry this weekend and uh which by the way >> do a podcast with him. >> You do? I know. That's what I was going to mention. So what? It's on Thursdays and and Sundays. >> Yes, exactly. >> At 2 p.m. in the afternoon, the the No Agenda show. Uh, >> I want I want to mention before you continue with the story, I do want to mention that we did have a uh a few uh just before you went on your little sojourn the um we talked about getting more people to follow us on Twitter >> uh me at the real D'vorak >> and because I said that this is this is capped. It's phony. Y >> and and so since then I've lost 200 people. >> Really? >> Yeah. It went down after we did the promote. The promotion drove people away. >> Twitter is is I think really lost its luster. >> A lot of people say it's better than ever. I I don't think so. >> Well, you're in the wrong You're on the wrong dimension. You got to >> Well, you like Twitter. >> Yeah, I do. >> You know, it's it I find that um it it's to try to get people unless you get unless you're really controversial. You post videos that are controversial and to get people's blood pressure going. So, you know how to work the system. >> Well, I don't work it enough that I can get my numbers up. >> I guess not. Well, maybe it'll happen. Maybe. Maybe it'll happen because >> I think I have to take out a subscription. >> Oh, I see what you mean. >> I think there's something going on. >> Well, here's something new. An Adam Curry project that you should know about. You probably know about this. God is turning churches into local radio stations. Get the God app on Android and iOS. What do you think of that? >> Is this an advertisement? >> I'm just I I I told Adam I text him tonight. I said, "Listen, we talked about this all weekend what you're doing with this God app, which is specifically for um Christianbased uh podcasting and churches and things of that nature." And I and I had a little bit of a like some some people are going to be left out of that, sir. So, uh, we got that resolved. And I thought it was really interesting though what he's doing with this. So, I said, "You know what? I'm going to mention this on DH Unplugged." So, I said, "What do you want me to say?" And he said, "Goder is turning churches into local radio stations. Get the Godcaster app on Android and iOS." So, I just said it. >> Did he do this? Was a donation included to the show here? >> No. Good point, though. You make excellent excellent point. This was a a a not a really a >> this is just a freebie. >> This is a freebie to our good friend Adam Curry who helps >> just to get get him so that you would sell the the this product to the Jewish community. Is that the the I get that kind of from the I I'm kind of picking that up from the uh subtext of what you said. >> Yeah. Jeecaster was coming next. >> Jeecaster. Okay, that would do it. >> So there you go. But uh the I think it's I think it's an interesting project. So anyway, he's having a good time with that and that was his latest thing and uh Adam Curry's always always doing something. He's busy busy busy. All right, the Fed meeting. Uh here's a couple things to note. We have a Fed meeting coming today or it was today. And then the decision tomorrow, 2 p.m. is the rate decision. 2:30 is going to be the >> And what's the consensus? Well, the consensus is a 25 point a 25 basis point reduction in the Fed fund rate >> when >> so that that would account for the market running up. >> I don't know. Does it does it not? Gold's at an all-time high. Go uh was at an all-time high. It came down a little bit, dropped dropped a little bit, but still silver was rocking for a long time. Stocks at all time high. Crypto doing just fine. GDP is about 3.8%. Employment's fine generally speaking. The housing market's improving. And at the same time, by the way, we have limited information on economic activity because freaking government is closed. So, we can't get all that information. I don't know how they're going to get it to make a decision because they're supposed to be data dependent. By the way, there's no data coming out. So, how can they do that? Very frustrating. >> They should say, "We're not going to do anything." >> Yeah, that's what they should do. >> That's what they should do because we haven't got any information from the our sources in the government while it's shut down, so we're going to just >> kick the can down the road. That's what they should do. >> I agree. I agree. And and and then you have u inflation well above the Fed's own measure. The last inflation that came out was like 3%. >> It's too high. >> And so, but they got to reduce rates anyway. They got this all planned out. Let's just do it. But it seems to me that uh it's just going to you look you may have one of those moments right when everybody believes that going to cut rates market's going to be happy about it. You may have that okay that's it and probably you know they may say something like you know things are doing pretty well we may not do anymore for a while or we're going to assess the data. I mean, markets may all of a sudden say, you know what, that's probably all the best we're going to get right now and then turn around. But who knows, there's nothing to worry about. Trust the government. Things be fine. There was a CPI that was put out, which I don't know how they put this out, but maybe it was a delay. uh certain data comes is still available but the consumer price index did show a.3% increase on the month putting the annual inflation rate at 3% a little bit lower than expected but still much higher than the 2% prescribed amount that the Fed has excluding food and energy CPO CPI showed a 2% monthly gain and annual rate um was also 3% a little bit less than forecast the thing that we did get from this and one of the reasons why CPI did come out I guess was the Social Security Administration had to um point out what or or put on what was the annual rate of COLA cost of living adjustment for social security 2.8%. >> That's your number. >> One of us on this call is collecting social security. >> Yeah, I get social security every month. Y >> now you'll be getting social security plus 2.8%. Oo. >> Yep. There you go. Uh h quick quick quick quick meme update. I wish we had some music for this. Like you know quick bean up meme update. The Beyond Meat. Remember that one? It went from 50 cents up to seven. >> Yeah. >> What do you think happened recently? >> I haven't been following it. >> Well, what would you think would happen? >> Well, it should go down, >> right? Correct. We talked about that two weeks ago or a week ago. I think it was two weeks ago that we should short the stock and we didn't do it like an idiot. But basically, it went from seven bucks down to $1.75. >> There you go. >> Yep. And this was supposed to be the next Apple. This is supposed to be the next GameStop or or Build-A-Bear. >> Well, you know, they still have more. They these meme guys can come in there and buy it up again. Well, they don't buy anything, do they? Just just point a finger. >> Yeah. >> Here, you buy it. Everybody just rocks it up. Did you watch any of the news today about what's going on uh in the tech world with Jensen Hang uh with regard to Nvidia? >> I not really. I've been watching either the World Series or Trump's trip to Asia. >> Oh, what about that? Did you watch the whole entire 18 innings? >> Well, here's what here's what I did. I watched the I could say I watched the whole thing, but I didn't. I watched the beginning of the game. Then they had things to do and then I watched the end of the game from about the 13th inning on because I say, "Oh, there's a breaking record here." This game, of course, it won't go away. >> Is that the longest World Series? >> It's the sec. It's a tied for the longest. Both of them on the third game. Both of them at Dodger Field, >> which is funny. Uh, but I think it was 2018 when they had the other other 18 in game. And I watched this and I and then I got kind of fascinated by this guy. They brought this guy who never pitches much, this Klein guy, Red Beard, and he would shut out the uh Toronto team for four solid innings, including a line drive, hit right at his, you know, basically hit at him and he just caught it. It was the third out, I think, of the 16th, if I'm not mistaken. He came in the 17th and he went to the eighth. He threw more pitches than ever before. No one's ever heard of the guy. They just brought him up on, you know, like two weeks ago and now he's like this kind of the hero of the game besides Otani. We we expect to do what he does. It was I thought it was a terrific product. >> There was There was n >> You like baseball. >> There was 19 pitchers used. >> That's a deep bench. That's a deep bench. >> Dodgers set his record by using 10 pitchers. >> Not not 19 on both on one. >> No, it was 10 10 on the Dodgers. >> Yeah. And um >> nine on the Blue Jays. >> Yeah. Nine. >> That's a still a deep bench. >> It's Yes, but the game was ridiculous. Well, that's nowadays, of course, they want a lot of, you know, you need a lot of pitchers because they don't let anyone pitch for the whole game. Although the Dodgers have this one Japanese guy who is just a terrific pitcher who pitches complete games, which is like unheard of in today's world. >> Yep. You got to protect the arm. Well, there's a lot of the reason I bring up this other issue with regard to Jensen Wong. Um, what was a flurry I mean a flurry of deals, announcements, buys. It went on and on. The list went on. There's got to be honestly it may have been 30 different announcements today. The first thing that happened there was this massive this this is one of the first things that happened today earlier. Uh, a billion dollar stake in Nokia. I'm going to repeat that because you need to absorb that. A billion dollar stake in Nokia. Nokia, the phone company. Noia, >> are they going to Is this a billion dollars in stock? >> Yeah, they're buying they're buying a billion dollars of the company of shares. >> No, but I mean, is it is it being paid for with stock? >> I don't know. Probably being paid for with cash cuz they'll just >> Not cash. >> They'll peel off a few bucks from their stock and they'll buy it. They have so much money in the bank. It's ridiculous. >> Yeah. Well, there that's true. >> So, um, shares in Nokia store about 26% of the tie about 22% it closed at Nokia will issue more than 166 million new shares and we use the proceeds to fund his. You issue 166 million new shares. That is massively dilutive. But yet, the stock was up 22%. All Nvidia needs to do. There's a great game plan. Strike a deal. Say we want to buy it at the current value. That's fine. Lock it in. They make the announcement. Stock goes up. Pays for the whole deal. >> Well, it'd be a nice calculation to make to see if it did pay for the whole deal. >> I mean, it's 26%. Had to be up 100% to make the whole deal, but it made a lot of money. Who knows what they actually got the the deal at also. Now the two companies also struck struck a strategic alliance and a partnership to work together to develop next generation or we call it nextg 6G cellular technology. Nokia has a lot more infrastructure and backbone type of technology now versus just their handsets. The handsets I mean that was what year was that? I don't even know 80 something. >> I gave up on it. >> Yeah. Nokia said that it will adapt its 5G and 6G software to run on Nvidia chips and will collaborate on networking technology for AI. >> Uh that's just one that's just one announcement. >> That's to that's to protect Nvidia if the AI bubble pops. >> Well, that they have more partnerships that they announced today. It's it was really like I said >> this all defense that would I consider that defensive. >> It is. I would agree. I I'm now thinking the rest of them are too. >> I mean, they're diversifying is what they're doing, right? >> Yeah. So, they don't get killed in the AI collapse. >> But it was unbelievable today the PR team at at Nvidia is in overdrive announcing uh a deal with Uber. Not they're not buying Uber per se, but they're doing a strategic partnership blank blank, you know, so on and so forth about blah blah blah of what they're d you know what I mean? And it's like this, every one of them is the same thing. we have a strategic partnership that's going to do this and then da da d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d and we have this one that's going to develop a you know f next generation uh AI for use with Costco or something just you know that kind of stuff it was just on and on today on and on >> with Palunteer you know they're going to do a deal with Palunteer to increase the opportunity for you know Palanteer to use stuff and these are things that were usually happening in the background and um you know So the proof is in the pudding. When the earnings came out in the future, the companies would say, well, you know, we had all this great stuff because we have these partnership. Now they're announcing it in in front of everything and investors are just like hysterically excited about it. Nvidia closed above $200 per share for the first time ever. I believe Apple and Microsoft also passed $4 trillion of market cap today. Microsoft was a was really interesting because early in the day Open AI changed their corporate structure and now uh they went to this new structure of ownership giving Microsoft about 27% stake in open AI >> stock was up nicely >> 550 on that >> and then Qualcomm now they're in the game seems like Qualcomm has gotten the goods to compete with AMD and Nvidia stock was up 15% that >> this was something they were claiming some time back and I don't know what they've done to change the uh fact that now people have noticed >> what's really interesting is that if there's more competition in the markets you would think that that would benefit some and hurt others right but no >> generally it does >> generally it does but AMD Nvidia not at all phased at all yesterday when this news came out Qualcomm's up 15% now Qualcomm's data center chips are based on the AI parts in Qualcomm smartphone chips called hexagon neural processing or NPUs. There's a there's a there's a there's an expectation that nearly $6.7 trillion in capital expenditures will be spent on the data centers through 2030 with the majority going to systems based around AI chips which is basically 3% of our annual GDP for the next five years. each year. And uh Qualcomm is trying to cash in on this whole chip craze. They made this new service. >> Get on the bandwagon while you can. >> Yeah. Yeah. >> Because you're going to be kicked you're going to get kicked to the kicked to the curb whether you're on the bandwagon or not when things go south. >> Right. And now on that news with everybody's in the pool. >> That's basically right. Everybody in the pool. body in the pool. The US has formed a billion dollar partnership with Advanced Micro Devices AMD to construct two supercomputers that would tackle large scientific problems ranging from nuclear power to cancer treatments to national security. That was what uh energy secretary Chris Wright and AMD CEO Lisa Sue told reporters the US is building two machines. Just to be clear, that's 500 million per machine. You think you got an expensive laptop for three grand? >> [laughter] >> Right. >> Yeah. >> You got a 500,000 machine. >> Too much. >> 500,000. They're doing this to ensure the country has enough supercomputers to run increasingly complex experiments and require harnessing enormous amounts of data crunching capability. The machines can accelerate the process of making scientific discoveries in the US and the areas that the US is focused on. So, first we have quantum maybe computing >> quantum. >> Now we have to put all money in the quantum if it's so great. >> Do you notice though this billion we're just throwing around billions now? >> I should think that you know you could get a quantum laptop for that $3,000 and it should kick the crap out of the $500 million supercomput. >> I'm thinking that a million-doll computer is all that one would need. That would be stacks. It's it's it's a whole rack of CPUs, GPUs, blah blah blah. You could use like a little screen, little monitor, pull out drawers, air conditioning. You need to be keep it cool, right? >> Oh, yeah. Problem. >> I'm thinking a million bucks can get you a pretty sweet setup. But you get the government involved and they just have no control. I mean, it's And where is all this money coming from again? Where where where is the allocation? Where is this? >> It's only it's only a total of a billion. >> I know, but where is this money? That's a billion here. A billion there adds up after a while. I just don't understand where it's all coming from when we're in a government shutdown where we have flight delays, no EBT starting in November, pulling benefits from the blue states supposedly. Um a and of course our our uh uh illustrious Congress per people and senators, everybody in Congress is still getting paid throughout this by the way. Constitutionally they are to be paid. >> Yeah. Yeah. And they're not going to do anything symbolic where they won't get their money. >> Yeah. Well, some have said, "Oh, I'm not taking anything. I'm not taking my money." Uhhuh. Um, so it it's kind of interesting that we have all this money going out and we're buying stakes in this and we're doing that and we're somehow going to fund I know Peak Heg came out today and said we're going to fund the military. Well, how do you how do you do that? Where where you just you just you're just going to do that? Where's that money coming from? It's very >> Yeah. The whole thing is this is a house of mirror smokec screen house of cards. I don't know what you want to call it. And then we >> got assuming that eventually these guys are going to sign off on the on and start restarting the government, >> right? And then everything just falls in place. And we got and then and then we got farmer Scott, Treasury Secretary Scott Bessant. Farmer Scott, he said in a in a in a discussion over the weekend that he has personally felt pain from China refusing to buy American soybeans during a trade conflict with President Donald Trump. I'm actually a soybean farmer, he said on the ABC News program this week. H >> since when? >> I guess he's got some soybean farms in some of his hedge funds, which I'm sure he hasn't uh, you know, separated. Now, by the way, the latest framework for a deal with China includes, hold on to your pants, buying massive amounts of soybeans from American farmers. Exactly. You see the irony of all this? or the maybe not the irony, the uh continual uh miism of all this. >> Well, I think it was to be expected. >> Of course, >> I didn't know about Besson being a soybean farmer. >> The first deal that we had back in the early Trump 1.0 wasn't all about like soybeans. >> Soybeans are a big part of Trump's deals. >> We for whatever reason. Now, meanwhile, >> well, that's for to get the farmers to vote for Trump. >> But in meanwhile, all the soybean farmers, there's corn, but there's corn, there's wheat, there's a lot of other things, but soybean. Okay, what happened? We had a deal. Somebody broke the deal. >> The Chinese did. They don't agree to any Their terms are always, as far as they're concerned, flexible. >> Exactly. And that's what's going to be in this deal, too. >> Oh, yeah. Yeah. They're they're not good. I mean, they're for what they're doing for themselves is fabulous, but they're not they're not uh honest brokers. >> As long as we get a deal, we're happy, right? >> The way it's Yeah. That's like the $19 trillion in supposed uh investments in the United States, according to Trump. >> 19 trillion. >> Yeah. That's the latest. 19 trillion. [clears throat] >> There's like if they get two trillion, it'll be a miracle. >> Yeah. >> Now, Kathy, skeptical. I like Trump, but I don't. >> No, no, I get it. But but some of the stuff is just a little bit farfetched is what you're saying. >> That's what you're saying. >> Yeah. Yeah. And that's one of them, >> right? Uh Kathy Wood, you remember her? Remember from Arc Invest? She was all the rage back in >> Oh, yes. She was a hot she was the the go-to girl. >> Yep. She was she had everything to say. Well, she said on Tuesday she p pushed back on fears of an artificial intelligence bubble while at the same time flagging the possibility of a re a reality check. on AI valuations. Speaking on CNBC's Dane Dan Murphy on the sidelines of the Saudi Arabia Future Investment Initiative in Riad Riyad, she said, um, "If interest rates begin to rise, there will be a shutter in markets. We're going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates." Wow, that's kind of the other side. That seems unlikely >> that we're going to see rates go up like that. I I would agree. The only the only way that would happen if if these guys overdo it and really >> they're not going to do overdo it. >> Yeah. >> Not with Powell. >> No, I would agree. I don't think I I can't imagine rates going unless we get a lot of inflation. That that that's that's the that's the wild card. Well, so far so good. >> Yeah. Amazingly. All right. No way, Jose. Not good. This needs to be explained and reversed. I don't understand. There's a mystery donor, which we know who it is now, of $130 million in contributions to me to pay US military troops during the government shutdown. This guy named Timothy Melon. >> Yeah. From the Melon family. >> Yep. Renowned Gilded Age Banking Family. But Melon's donation works out to only about $100 per service member. Cause about 6.4 4 billion to pay US troops every two weeks, by the way. >> Oh, I didn't know that. >> Yep. And using his money might actually be a problem when it comes to federal law because the matter um you you can't you can't just give money to the government like that. Uh it's just like saying, "Hey, I have >> you can actually >> you can pay taxes." >> Yeah. by through the tax system, >> but you can't >> you can voluntarily pay more taxes than you are, >> but you can't direct where the money's going. >> That's true. >> And you cannot you really can't pay the military. What if what if this the problem is this invites all sorts of conflicts of interest? Can you imagine that's the case? And and there's a handshake done somewhere overseas to Iran. Say, Ian, do me a favor. >> About this for a theory. >> Yeah, >> this is bull crap. This whole thing is just just a smoke screen so they can so that some court can come up with what you just said and say no, you can't do that and they're going to cut off the servicemen's getting paid is what it's going to look like cuz you you yourself said it's only 100 bucks. It's not a big deal. But but just the the the visual uh aspect of a of a liberal justice, a liberal court, putting the kaibos on it and then having the Democrats have to defend not paying the military is all a ploy so Trump can throw it in their face. >> See, I think you I think you give too much credit on the the intellect uh of of some people. >> I do. You're right. That is it that is an issue when you come up with these ideas. >> Yeah. You give I think you do you are >> these guys really that smart? >> I can't imagine. >> Well, >> I mean would >> but it but but the theory is good. >> Theory is good. And the question is even if you come up with that whole idea is somebody have the balls enough to actually go ahead with that because who knows what the ramifications if it backfires is. >> I don't think the Melon kid's too worried. >> Well, bottom line here is it seemed to me when I saw this I was like this is not not this can't work. Now I talked to somebody tonight. and I was having dinner and uh the discussion came up about this and they said, "You know what? This what's going to happen here? The 130 million is just going to disappear. It's going to end up going into the ballroom. You know, Trump's going to say, you know, we couldn't do that because of this. We just, you know, took it took it anyway." >> That's actually a good one. >> Yeah. It's just going to come into >> Well, he said she had the 130. Uh, you know, you didn't give a crap. Give it to the ballroom. >> Do you want a refund? I don't Do you Do you want a refund? Supposedly, this guy Melon's only worth about a billion dollars. >> Uh, it's a lot of money for him then. a lot of money. 13% of your stake. >> Yeah. Yeah. >> Here's something interesting. Uh I did >> which again makes me think the whole thing's some sort of >> scripted. Again, I'm going with the fact that you give too much credence to an intellect of some people >> um profit margins. Something something I was really I've been concerned about is with not only the tariffs but uh the escalating cost factors and trying not to pass those on to uh individuals is the whole issue about profit margins and um the S&P 500 is a big week like I said this week but so far as report a lot we've seen a lot of companies the blended net profit margin for the S&P companies that have already uh posted their earnings for Q3 2025 is 12.8%. Which is equal to the previous quarter's net profit margin. But here's the interesting interesting thing. I think at first blush because we got to talk about this um above the year ago net profit margin and above the five-year profit margin on average. So, in fact, this quarter itself is going to mark the sixth consecutive quarter the S&P 500 is reporting a net profit margin above the 5-year average. Now, let's just hold that because that sounds great. Remember something, we had some real problems in 2022 with the higher inflation and higher costs. Profit margins sank. And we also probably are getting a little bit towards the end or middle of 2020 when basically everything was shut down and companies were struggling. >> So, you got all that into five years. So, I'm kind of throwing the 5-year out. But what's interesting is this. If you look at the four sectors that reporting year-over-year increase, one year, I'm talking about one year. Financials, 19.9% versus 18%. Utilities 16.7% versus 14.8. Uh, then there was six sectors that reported year-over-year decreases in the net profit margin. communication services, which is that's where Facebook is under that one. 13.8 versus 14.8. Real estate 34.3 versus 35.2. Healthcare 7.3 versus 8.3. So, it's kind of a mixed bag there, but I thought it was really interesting that we're seeing some some decent numbers come out um when it comes to the profit margins in a in a time when you should be really concerned due to the extraneous costs that are involved in doing business. Yeah, this is one of those moments where you should have put a one of your fabulous charts >> Oh. >> into the show notes for people to look at. >> Sorry. We'll do that next time. >> Big question. Is this the new normal? The Dutch government has invoked control of Nexperia, which is a Chinese-owned semiccomputer maker, semiconductor maker based in the Netherlands under its goods availability act. Following the announcement by the HEG um the listed shares plunged 10% of um next period and >> so so basically this is another word for nationalized. >> Yeah. Yeah. Well, you're nationalizing >> they're fudging it but it's this is nationalized. >> But you're nationalizing another country's company. >> Yeah. That's what you usually do. >> And you take over. We could do it for your own too. I guess. But what do you think about this? I mean, I find I was like, "Oh, I guess is this happening?" >> Becoming Soviets, >> but why is this happening? >> Nationalizing other This is what the Russians did. I mean, when they the Soviets took over. This is what South America did to our oil companies. This is this happens all over the world, usually to a foreign entity that's in there making money, doing well, and you nationalize them and take them over and let the thing falls apart after that, of course. And too bad. out of here, Charlie. >> But uh the question I guess I have for this is this hasn't happened in a while, right? >> Not in Europe. >> And now the Dutch government taking control of this company. They say it's because to ensure sufficient supply of its chips, which I don't know can't they now that's a standalone company. Now China won't have anything to say and then how are they going to get their goods? I mean, is this kind of situation because of all the things that are happening here with the US government taking positions and being heavy-handed in the capital markets? Is that somehow saying >> maybe somebody saw maybe somebody looked over here some idiot looked over here and said oh look the US government's nationalized AMD >> or Intel >> seeing the buy you know we've invested in some companies recently Intel oh the US government's nationalized Intel by buying them or buying some shares is all they really done but you know they invested in them uh and they're looking at this as oh this is the thing to not understanding anything. >> I mean this the AMD thing too >> that's the only thing I can come up with. >> I mean the same thing with companies doing it. Open AI for example like this whole vendor financing circular financing. It's coming up a lot in discussion but everybody >> I love the circular financing. >> Everybody's like ah it's no big deal. It's happening. Meanwhile, OpenAI has now close to a trillion dollars of commitments over the next 10 years. They signed a deal with AMD. We talked about that last uh week or the week before where the stock spiked like 40%, right? Where open AI can have the option of a 10% ownership through warrants. And as part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy 160 million shares. 1 cent. 1 cent. I want that deal. Now they have to make certain milestones. My point though is you know there's a lot of question. >> Who has to make the milestones? They have to make the uh open eye open AI. I'm sure it will. >> You sure? >> No. >> Uh it's something probably with the relationship with the two. I don't know what it is. We can look that up. >> I think one of these scam deals I've that go around come around these things. These guys do sign up on, you know, sign out the dotted line and there's little gotchas in there and next thing you know AMD is lost. Not as bad as the Columbia Record Club deals, but >> no, you know, I'm thinking more of like MOSFET, MOS Technology, uh the stuff that Jack Tal used to do, the the deals he used to pull. Um there's a couple of different couple of different mechanisms I was that somebody gave told me about. One of them is uh two different mechanisms to to end up owning your owning a company that you're investing in. One of them is you you have the have the uh company put together a spreadsheet of their goals and what they're going to do in the next 5 years or 10 years and if they don't meet the 10-year plan, you get the company. That's one of the mechanisms which has been floating around. you. So you you go in to buy the company, say, "I'm going to buy the company, but I don't want to buy it for what it's worth now. I want to buy it for what it's worth 10 years from now." So you give me a spreadsheet and that's and the money at the end there. That's what I'm going to pay you for this company. You do the deal. They don't meet the numbers. You say, "You scammed me and you get the company." That's one one great trick. >> The other one, which is I understand TL used to pull this one, and this is a great trick, too. It takes this takes a little more finesse is you you go to a company and you say I got to buy you is I got to buy you you it's important that we own you uh before the different reasons and the and the company says well we don't have any if we're not ready to sell or anything and the other guy says don't worry about it just throw together some numbers and we'll pay it because we need to own you and so they throw together some numbers which are always wrong. And then they they they say, "Look, you and then a little time goes by. They say, "Look, you've scammed us with these phony numbers you threw together. We're suing you." And you end up with the company. >> That's a great bit, by the way. And that's happened a lot. >> Well, I don't know if some of this is going to happen here because um you know, the big issue is that Open AI, the questions are being, we talked about this, the questions are, you know, can open AI really do this? Are they going to be able to actually fund these deals? Did we talk about or Oracle repricing >> down 18% from where it was, right? >> Yeah. No, this is a this is something's up. I don't know what the mechanism is, but there's this stinks. >> And then we have Tesla. Uh again, Tesla bad earnings, no problem. Just uh lead with the announcement there's more robo taxis possibly coming. horrible earnings, really ugly margin compression, 500 basis points reduction in overall, but just today, like I said, it went from 417 to 457 on a PR blitz. That's still a chance that the autonomous driving is going to happen. By the way, also Tesla chair Robin Denhomem uh was pleading with shareholders to approve CEO Elon Musk's unprecedented comp package that could be, you know, worth more than a trillion dollars over the next number of years because, you know, it's possible that if he doesn't get this, he's going to leave. He's going to leave the company. So she sent the letter out to shareholders Monday and said, >> you know, [clears throat] warned that the company stands to lose Musk's leadership if the shareholders don't approve the plan. >> Yeah. And we all know that without Musk, the thing's going to flop. >> Do you think that Musk would actually leave Tesla that now has wrapped up in it with open uh with um uh >> unless they bought him out? If they bought him out, I think he would. >> But he'd pull a shenanigan of some sort to because he's got other >> There's a side deal. There is has to be a side deal with the chair and all and the people involved to get his >> Well, yeah, there's stuff we don't have no clue about. >> There's got to be side deals. A trillion dollars is plenty of money to go around. >> Yeah. >> Look, do the deal for me. I'll give you five million bucks. You do get this happening. >> Yeah. >> All right. >> Yeah. This guy really is talented. >> Yep. Amazon planning to cut as many as 30,000 corporate jobs beginning Tuesday as the company works to pay expenses and compensate for overhiring during the peak demand of the pandemic. Small percentage of Do you know how many Do you know how many people that Amazon employs? I was shocked with this number. >> I don't know million. >> 1.5 million. >> Wow. That's like a lot. So 30,000 is a spit in the bucket. >> Yeah, spit in the bucket. Can you imagine that HR job? That's a big job. >> Oh god, >> it's like a small country. >> No, you had to have teams of people for HR. >> Unbelievable. Now, Target also said last week that it's cutting about 1,800 corporate jobs. They want to get back to growth after four years of roughly stagnant sales. And then, >> yeah, you know, my opinion. >> Yeah, it's crap. Um, they sent out a memo is, hey, you know what? Uh the elimination roles are a combination of about a thousand employee layoffs and about 800 positions that will no longer be filled. [clears throat] 8% of Target's uh corporate workforce is being done, gone. Bye-bye. Uh let's see what else we have. We have the thing we talked about Canada. What did you think about that? That Canada runs a ad that shows Reagan saying that tariffs are bad. Trump gets all pissed off. He says, "You know what? Negotiations are off. Ontario says, "You know what? We're pulling the ad." Trump says, "You know what? I'm still mad. I'm going to throw an extra 10% tariff on you." I believe, by the way, tomorrow there's a Supreme Court hearing on tariffs. Are you aware of this? >> Yes, I am. >> Uh, so what do you think? >> And Trump was thinking of going to it at sitting there, but I he's in Asia right now. He's supposed to come back, but I don't think he's going to make it because I I think he's going to be in Asia extra couple days. Mhm. Uh let's see what else we have here. Google entered a partnership with Next ERA Energy. They're going to restart a uh one of the nuclear facilities. So that's kind of interesting. China uh industrial profit soar 21 6% in September from a year ago. Pretty impressive. Sharp jump extended a strong rebound that began in August when the industrial profits jumped 20% year-on-year. first uh nine months of the year, the profits of major industries and firms grew at 3.2% though, so it's back end loaded right now. And I guess we got to talk about the the the word they use the word brazen when it comes to this. This is the brazen theft at the Lou. So simple, so effective, but they got caught. >> You saw Did you follow this story? >> No. There was a Do you Do you even see what happened? They They hundreds of millions of dollars worth of crown jewels and things of that nature. They stole >> Oh, no. I know that. No, I'm sorry. Yeah, I did follow that. Um I wasn't understanding quite where you were where you're headed. >> Yeah. The the the interesting thing here was they they pulled up with a work truck with an extension ladder. >> Yeah. >> Just went up there, smashed the window, went in. >> And by the way, I don't believe what you're going to say if you're going to say it. that the ladder company is now using that as an advertisement. >> Oh, though. How great would that be? An advertisement for what though? >> I think it's a a meme that's floating around. >> What are they advertising that how effective the ladder? >> The ladder is great. Oh, >> it gets you to places you never thought you'd get to. >> Yeah, something like that. >> Well, uh, >> they got two and the guys, but they're not even sure those are the right two guys. >> They got DNA off one of the helmets supposedly. And already there was a whole CNN documentary that showed all this somehow miraculously five or six days afterwards from start to finish from the start of how it happened as structured the the the brazen theft itself uh what happened in Lou with real life camera footage and how they were caught. I was like wait a second this is packaged already in to a CNN 1hour special like a >> Yeah, it doesn't make sense. Wow, that was fast. >> Well, the one thing about the robbery itself is it has to be noted and no none of the media is covering it much. I've I've seen it covered maybe once is that the head of chief of security for the museum is a woman with no experience in security of such a such a system. And she was hired as a as the French as a French version of a DEI hire. >> Oh, >> and she's never done anything like this. She was uh never managed anything and she was never a security expert. >> Well, it serves them right then. >> Well, yeah, but nobody it does. I guess it's But who's going to suffer from it? Uh >> well, they'll get back >> no heads are rolling that I know of. >> Well, it's interesting. You know who are they going to show up into a pawn shop like, "Hey, what can we get for this?" [laughter] >> You know, thinking it could be worth the smart money is you melt them down. melt down the metal and you pop out the jewels and you you parcel them out over the next 10 years. >> I I find that kind of um destruction of important property to be one of the most offensive crimes out there. >> Yeah, I think so. >> You It's common. It's the It's the smart It's the If you're a criminal and you're doing this, it's the smart thing to do. >> This is Pink Panther kind of stuff. Right. >> I guess >> or Shan Connory is uh a a a like the Rock or whatever his he's had a few of these or Nicholas Cage uh National Treasures type of >> Yeah, that'd be a good good example >> type of example there. So anyway, uh I thought it was a pretty interesting story. I like how they use the word brazen. There's always these words you have to use to describe something that's bra a brazen theft of uh very important artifacts from the French and of course the French said that they were it was like a day of mourning. They felt that the French people felt that there something was personally stolen from them and they were in it was invasive. It was almost like a it was almost like a rape to each individual person in France. >> Yeah. Well, the Mona Lisa was stolen at least once. now got returned. You've seen the Mona Lisa up close >> more than once. Yeah, I've said I've seen it probably three times. >> Everybody that goes to see the Mona Lisa, including myself, uh says the same thing after they've seen it. And I say something like, "What did you think of it, John? >> Did you see it before or after they put the glass in front of it?" >> Did you see it before or after they put the the little barrier in front of it? >> I think before. >> So, you saw it before they had the glass over. >> It was just a frame when I saw it. Well, it was, you know, picture in a frame. >> Yeah. And there was no >> nothing blocking you from going right up to it. And >> this is probably 20 years ago. >> Yeah. I saw it. First time I saw it was in 73, I think, which is longer than that. 50 years ago, >> right? >> And uh I don't know. I mean, it was it was interesting. It wasn't like a a showstopper, >> but how about this? Tell me. You're going to have to agree with me. I know you're going to agree with me. It was a lot smaller than you thought. Yeah, it's not that big. It's not small. I I wouldn't call it small, though. >> It's not It's smaller than you would have thought it was is all I'm saying. >> You know, when I saw it the first time, I that was not something that came to mind. >> We got to get to France again when they behave. >> Oh, well, the only reason to go to I think there's one good reason to go to Paris. >> Oh. uh now as opposed to like you know a few years ago is to see the remake of the Notraam. The interior is looks dynamite. >> I have not se I've been there but I have not seen the remake. >> No the remake looks I mean I've been there a couple of times and but you know it's it's dingy. >> Isn't that when to be honest Napoleon have uh >> isn't his grave there? >> I don't know about that but have you gone did you go to the roof? Ever go to the roof? >> Was that the dome roof thing? No, it's not that dome. It's just the roof. The actual roof of the place. You You can take There's a stairway. You can take it up to the roof and sit there, eat lunch if you want. Or you used to be able to. >> Maybe I did. I don't recall doing it, though. >> Well, you would have remembered. >> Yeah. >> Sitting on the roof of this place. >> That's pretty cool. All right, let's get to our uh next topic. This is a game that we play. It's not a solicitation to buy or sell any security. It's not a recommendation of any kind. Nothing on the show should be considered investment advice or a recommendation. If you choose to invest in any of the stocks mentioned, you should know that it may carry risk along with the risk of a loss of principle. You should also seek out professional financial advice for your particular situation. We assume no risk as these are not to be considered recommendations. Horowitz accompanied myself or John Cavoric may invest in any of the securities mentioned and we'll disclose that on the website under the weekly stock pick section. You can go to dhunplug.com and see all the names we discussed in the segment along with the performance information from the date discussed as well as any additional important disclosures. Look at you on your Freshworks. I like it. >> You did a short on freshworks because of insider selling. You're up 16%. >> Your unusual whale subversive >> up 14%. Thank you, Nancy. [cough] >> Yeah, >> your Nvidia. I I only have like five things on this. You have the rest. Nvidia up 41%. Uh howy Therapeutics says mine came off up 31%. What else do we got here? Up 30%. Primo Brands, which you bought. Uh, no, you shorted that insiders. You shorted Primo Brands. You have 30%. >> Yes. The second insider short I've done. I This is the not recommended strategy where you don't short insider trading by rule. But my thinking with these stocks and the one I have today >> Oh. >> is that when something's fishy >> Mhm. about the insider selling. Maybe it there there's some it's more than taking money off the table. >> Oh, you you tell or you want me to go first? >> Well, you can go first and I'll >> 1029 2025. Let's update this. Uh I'm going to short uh which is probably a really bad idea. Uh Carvana, last time we did this was >> Yeah, you tried it before >> and it worked out really well. Um, Corventa is coming out with earnings tomorrow. Stock uh came down pretty significantly last time. Rode right back into earnings again this time, figuring ah how bad could it be? Um, but you know, this is a company that is so overvalued. Now, that doesn't mean you can't go any further, but we're just going to pick a short on this and see what happens. Okay, I have a uh there's a couple of possibilities here. Uh, for example, Richard Kinder is buying a lot of our old favorite >> what >> what is it? Kinder, Peabody, Kinder, whatever the hell it is. >> KMP. >> But I'm not that's not my pick. My pick is a short. >> Okay. >> Because I'm just sketchy here. Um, monolithic power. >> Oh. Uh, what is the symbol of that? M >> M Power. MP. I'm trying to I'm trying to get to it on the on my page. >> MPWR. >> Yeah. Uh and the reason >> it's currently trading at $1,000 a share. >> Yeah. >> And you're going short. >> Yeah. And here's why. >> Yeah. >> There is a CEO, also an officer, the same guy. He's a CEO of this company. And he has for the last number of years been he I guess he's a founder, so he's got tons of stock. And so he's been selling to the tune of just consistently selling, taking money off the table, uh to the tune of I don't know how many millions, probably over a billion dollars by now. And it's always been the same. It's like every oh every month, usually every month he'll drop uh he'll drop 4,000 shares, 7,000 shares. I'm going to read these numbers just from the last year or so. uh 4,000 7,000 2,000 3,000 3,000 11,000 there. As the stock is going up, he's selling into the rise of the stock. Uh 11,000 2,000 5,000 5,000. Then he then recently he's done 20,000 uh 20,000 as a proposed sale and then out of the blue 300,000. >> Wow. What does that even amount to? Like 3 million? Three 334 million. >> Wow. Wow. >> So, I'm looking at this and what's it what's what's wrong with this picture. >> Uhhuh. >> Oh, I like that. >> And he's just he's got the proposed sale into the SCC form 4 October 28th. He just filed it. So, this company which is now trading he sold it at 11:05. So, I think it's already made money or at least a proposed sale, but it's it'll be fixed at that number. I believe something is wrong with this picture. And this is another one of these insider shorts. And I've never missed on them. >> All right. I like it. So, we got Carvana short and we got monolithic power system short for this week. >> Yeah. With the short brothers. >> Yeah. Short brothers. Short bros. Raz. All right. Well, that's going to wrap it. >> All right. >> I'll see you again uh next week, sir. >> Next Tuesday. >> Oh, next t It's next Tuesday, right? >> Yeah, I think so. >> It is. All right. See you then. >> Bye. Bye. >> You've been listening [music] in on a conversation with John C. D'vorak and Andrew Horowitz. Hope to be with you again soon. Bye-bye. [music] >> Now, I'm not broke, but badly bent. I'm not down to my last scent, cuz I got a dollar, but it's my last dollar bill. Yes, sir. In [music] my pocket there's a dent. All my dough is nearly spent, but I got a dollar and it's my last dollar bill. Oh, I'd love just one more buck. Fortune left me by chance. Now, here's a hint. I feel like a men. You can hardly tell by a glance. I don't care. No millionaire can give me the [music] Isis stack cuz I got a dollar. My last dollar bill. [music] >> [music] >> This podcast is intended forformational purposes only and does not constitute personalized investment advice. 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DHUnplugged #775: Everything Is Fine
Summary
Transcript
Hello and welcome to D'vorak Horowitz Unplugged, an hour-long discussion of activity in the financial markets around the world featuring [music] columnist John C. D'vorak and money manager Andrew Horowitz. This conversation is casual [music] and unrehearsed. Let's join John and Andrew now. [music] >> I'm John Cavorak. >> And I'm Andrew Horowitz. >> And it's the 28th, I believe. >> Yep. >> Uh ending up the month here. uh 28th of October. >> Very exciting month. Another month is gone. Friday is Halloween. Do you get a lot of uh Halloween? >> I'm on I'm on uh you have to walk about three stories. >> Oh, >> up a small hill and then a long then two flights of steps to get to my front door. >> So, the answer is no. So, it's it's a great place if you want to throw hot boiling oil uh on people, but it's a very uh Yeah, I think in the last three Halloweens, I've had one family come finally make the trek. I don't really think I've heard many people say they've lived in an elevated house and that it's great so that in case somebody comes, I can throw scalding hot tar on them. That That's not a usual conversation you have. It >> was oil, not tar. Oh, >> oil. Yeah. >> Tar stinks. Yeah. >> Uh, well, we hardly get anybody. It's It's Although this year may be different because it's on a Friday. >> Why was it that Why don't you never get anybody? >> I I don't know. >> Are you one of those neighborhoods where you just everyone turns their lights off and they not welcoming? >> Yeah. Shut the shutters, turn the lights off, you know, just uh don't answer the door no matter what happens. We usually get like a group of people that come to our house and then that's it. >> Well, yeah. I'll tell you what. You give everyone in the group five bucks and you'll have more people if you want them. >> Definitely. Well, let's talk about what's happening with the markets. Clearly, the the answer right now to what to do at the moment is don't fight the tape. The tape is in a hysterical maneuver upward that nothing seems to bother it. No matter what happens, no matter how crazy it gets, no matter the news, no matter the fact that Tesla's earnings came in and they were short on margin by a long shot and it looked like it was pretty bad. Stock came down to about 100 4 I don't know 15. it ramped right back up two days later and uh god forbid you get some good news out of something like you saw from Wayfair today that seemingly the uh furniture tariffs aren't bothering anybody you know and the stock is up 23% today or you have Nvidia coming out and with probably 30 different deal announcements today Jensen Juan was on fire today and even inst ed a billion dollars into a company, which we'll get into. But at the same time, I must say, you're starting to see these potential exhaustion signals, the parabolic move up in markets like where we've seen the hockey stick. These are are similar signs you've seen in other exhaustion moves where everybody just says, "Okay, I can't hold back anymore. Let's just throw our money in and just get it done." I I Yeah, I had a I have a this I have a signal that I look for and it it came up. >> I did. >> Yeah. It's when one of the one of the one of my uh I won't say exactly who, but the family member who comes to the dinner table. >> Oh. >> And says, "You think I should get into the stock market?" >> Yep. >> Out of the blue. Uh that's my signal that things are gonna I'm reminding when I worked at TechTV uh I remember during the uh the runup of the dot crash uh one just right before it one of the uh cute little camera girls came over who handled the video and she comes up to me and she says you you knew a lot about the stock market. Do you think I should get in I should buy some stock? >> Yeah. It was just before the uh.com collapse. >> I have I have I have clients are accurate. I have clients that >> uh can tell you the top of bottom very easily. When things are too good, they want to buy more. When things are bad, they want out. And that is a sure signal that we're at the end of whatever that thrust is. >> Yeah. Yeah. It's it's it's noticeable. >> Just have one that a gentleman Bert Bert he was like that. and he was always on the wrong side of the trade >> and it was your fault. >> Well, I didn't listen to him because I don't have to. I can do what I want. But we're seeing a lot of signs of overheating. But don't worry, nothing to fear. Don't worry. You know, the government's here. We got a Fed rate decision coming tomorrow. The meeting was today. And even though we have some good things happening, which we'll talk about, the Fed's going to probably reduce rates anyway. We have the biggest week for S&P earnings. We got a lot of numbers that came out today, yesterday, tomorrow is Microsoft and we have some of the other big guns coming out throughout the end of the week. And um first time ever, the first time the S&P 500's over like 6,800 all-time highs and uh we have a surprise when it comes to the profit margins with these tariffs. I'm starting to believe that these tariffs aren't actually happening. Well, there's some money coming in because he keeps talking about a$ 1.5 or $150 billion uh tariffs going into the treasury. >> I don't know where they're coming from because it seems like all these companies particularly you look at Wayfair as a great example didn't it doesn't bother them at all. >> Didn't have any major effect. In fact, they had a great quarter. You would have think that there was buying >> D. I know exactly what you're saying. >> It's weird. Just weird. And emerging markets are on fire. Weren't those the ones where we were hitting pretty hard. You got China, you got uh Vietnam, you got Indonesia, you got uh Korea. All-time highs. Alltime highs. Great stuff ramping crazy. The emerging market uh index that we track and that we invest with our clients, we're up like 37% 38% this year. just in the emerging market stocks. Uh little factoid, the Fort Lauderdale boat show is uh starting tomorrow. Uh this is big because it's the equivalent, you know, a lot of cities vive for the Super Bowl because there's like a you know a billion dollars or so economic impact that comes to that city because of the Super Bowl. >> Yeah. This is like a Super Bowl every single year for Fort Lauderdale or for Florida in general. $1.78 billion in economic output, supporting more than 100,000 jobs and creating millions in sales and taxes. It's considered the largest boat show in the world. 3 million square feet of exhibition space across multiple marinas. >> So when you go there, what you do? You go in and out of boats and say, "Hey, nice boat." >> Yeah, you can if you want to. Sure. There's an inwater show. There's a uh uh I'm invited tomorrow to the VIP. >> Then this How is this different from a giant RV show? >> It's RVs don't float. >> Ah, okay. I knew there was a difference. >> I mean, some of these boats are spectacular. >> Yeah, bet. >> They're just they're just unbelievable. I'm going to be heading over tomorrow uh for a quick I was invited over to the VIP experience, which you go I'll have >> when you get to throw a football into a net >> maybe. I don't know. But uh the drinks are included and this is included and I got shuttles uh via the uh the uh the >> free drinks. They think you're a buyer. >> Yeah. I [clears throat] don't know. Somebody bought tickets for us and I'm like I'm not coming. They're like, "You want you to come?" I'm like, "I'm not going." "All right, we'll go." So we'll go for a couple hours in the afternoon tomorrow just to see what what's all about. I have I have plenty of stops. I have friends that have boats in the show. My son has a boat in the show um to sell and my friend uh recently bought a boat and he negotiated said listen you want my boat in the show you have to give me x amount of dollars back on the boat so they lowered the price for him so he's going to be in the show for the next three days so a lot of exciting things happening we'll see some of the newest greatest gadgets and fishing stuff and um it's usually back in the day John this was great this thing you know Why >> do you know why? >> No. Why? Why? >> I'll tell you why, Andrew. Why? This a good question. I'm glad you asked. Uh because the old back in the day, there wasn't any internet. I mean, I'm talking about back in the day. >> So, you didn't know what the newest and greatest products were out there, the new lures, the new uh uh, you know, GPS units, the new engines. You know, you read about them here and there, but the only place to see it was really in the show. Now all this stuff is available on the internet and you can find it cheaper at other places. Used to be also deals at the boat show and there's always that the German glue guy or the people that clean your glasses with that purple stuff which is just Windex with purple dye in it. My is my opinion. Um and you have all the you know the guy with the steak knives. There's all these cool things around the area. You go look and see what's going on >> like the like the county fair. >> Yeah. I will tell you though, the last time I bought something there was very disappointing. I was going to buy a um So, when you fish, you need a depending on what you're fishing for, you use a gaff. So, you grab the fish with the gaff and bring them on the boat, right? It's like a hook. >> So, I said there was there was one there was a gaff there that had a winthrop hook on it, which is kind of a squared off hook instead of a round one. I said, "How much is that right there?" He says, " $285." I said, "Oh, really?" He said, "Yeah." I said, "That's that's the boat show price." said, "Oh, it's boat show." I said, "How much is it if I go to your store?" $285. I said, "Wait a second. It used to be that we came to the boat show and got deals." He said to me, "Not anymore." That actually forced us to decide to go to a little um place called the what is it called? The fishing hole. There's a there's a place that you go online and has all the parts separately. So, we bought the the Winthr Hook. We bought the shaft and we bought all this other stuff with uh to design it and watched YouTube and made our own gas for like $100. >> Just as good as they would have had. >> That's a That's good. Yeah, >> that's what you're supposed to do. >> What was that called? The watering hole, the fishing hole or something? Mud hole. Mud hole. It's called the mud hole. Um I want to mention something a little uh little um announcement. I had a long discussion with my good friend Adam Curry this weekend and uh which by the way >> do a podcast with him. >> You do? I know. That's what I was going to mention. So what? It's on Thursdays and and Sundays. >> Yes, exactly. >> At 2 p.m. in the afternoon, the the No Agenda show. Uh, >> I want I want to mention before you continue with the story, I do want to mention that we did have a uh a few uh just before you went on your little sojourn the um we talked about getting more people to follow us on Twitter >> uh me at the real D'vorak >> and because I said that this is this is capped. It's phony. Y >> and and so since then I've lost 200 people. >> Really? >> Yeah. It went down after we did the promote. The promotion drove people away. >> Twitter is is I think really lost its luster. >> A lot of people say it's better than ever. I I don't think so. >> Well, you're in the wrong You're on the wrong dimension. You got to >> Well, you like Twitter. >> Yeah, I do. >> You know, it's it I find that um it it's to try to get people unless you get unless you're really controversial. You post videos that are controversial and to get people's blood pressure going. So, you know how to work the system. >> Well, I don't work it enough that I can get my numbers up. >> I guess not. Well, maybe it'll happen. Maybe. Maybe it'll happen because >> I think I have to take out a subscription. >> Oh, I see what you mean. >> I think there's something going on. >> Well, here's something new. An Adam Curry project that you should know about. You probably know about this. God is turning churches into local radio stations. Get the God app on Android and iOS. What do you think of that? >> Is this an advertisement? >> I'm just I I I told Adam I text him tonight. I said, "Listen, we talked about this all weekend what you're doing with this God app, which is specifically for um Christianbased uh podcasting and churches and things of that nature." And I and I had a little bit of a like some some people are going to be left out of that, sir. So, uh, we got that resolved. And I thought it was really interesting though what he's doing with this. So, I said, "You know what? I'm going to mention this on DH Unplugged." So, I said, "What do you want me to say?" And he said, "Goder is turning churches into local radio stations. Get the Godcaster app on Android and iOS." So, I just said it. >> Did he do this? Was a donation included to the show here? >> No. Good point, though. You make excellent excellent point. This was a a a not a really a >> this is just a freebie. >> This is a freebie to our good friend Adam Curry who helps >> just to get get him so that you would sell the the this product to the Jewish community. Is that the the I get that kind of from the I I'm kind of picking that up from the uh subtext of what you said. >> Yeah. Jeecaster was coming next. >> Jeecaster. Okay, that would do it. >> So there you go. But uh the I think it's I think it's an interesting project. So anyway, he's having a good time with that and that was his latest thing and uh Adam Curry's always always doing something. He's busy busy busy. All right, the Fed meeting. Uh here's a couple things to note. We have a Fed meeting coming today or it was today. And then the decision tomorrow, 2 p.m. is the rate decision. 2:30 is going to be the >> And what's the consensus? Well, the consensus is a 25 point a 25 basis point reduction in the Fed fund rate >> when >> so that that would account for the market running up. >> I don't know. Does it does it not? Gold's at an all-time high. Go uh was at an all-time high. It came down a little bit, dropped dropped a little bit, but still silver was rocking for a long time. Stocks at all time high. Crypto doing just fine. GDP is about 3.8%. Employment's fine generally speaking. The housing market's improving. And at the same time, by the way, we have limited information on economic activity because freaking government is closed. So, we can't get all that information. I don't know how they're going to get it to make a decision because they're supposed to be data dependent. By the way, there's no data coming out. So, how can they do that? Very frustrating. >> They should say, "We're not going to do anything." >> Yeah, that's what they should do. >> That's what they should do because we haven't got any information from the our sources in the government while it's shut down, so we're going to just >> kick the can down the road. That's what they should do. >> I agree. I agree. And and and then you have u inflation well above the Fed's own measure. The last inflation that came out was like 3%. >> It's too high. >> And so, but they got to reduce rates anyway. They got this all planned out. Let's just do it. But it seems to me that uh it's just going to you look you may have one of those moments right when everybody believes that going to cut rates market's going to be happy about it. You may have that okay that's it and probably you know they may say something like you know things are doing pretty well we may not do anymore for a while or we're going to assess the data. I mean, markets may all of a sudden say, you know what, that's probably all the best we're going to get right now and then turn around. But who knows, there's nothing to worry about. Trust the government. Things be fine. There was a CPI that was put out, which I don't know how they put this out, but maybe it was a delay. uh certain data comes is still available but the consumer price index did show a.3% increase on the month putting the annual inflation rate at 3% a little bit lower than expected but still much higher than the 2% prescribed amount that the Fed has excluding food and energy CPO CPI showed a 2% monthly gain and annual rate um was also 3% a little bit less than forecast the thing that we did get from this and one of the reasons why CPI did come out I guess was the Social Security Administration had to um point out what or or put on what was the annual rate of COLA cost of living adjustment for social security 2.8%. >> That's your number. >> One of us on this call is collecting social security. >> Yeah, I get social security every month. Y >> now you'll be getting social security plus 2.8%. Oo. >> Yep. There you go. Uh h quick quick quick quick meme update. I wish we had some music for this. Like you know quick bean up meme update. The Beyond Meat. Remember that one? It went from 50 cents up to seven. >> Yeah. >> What do you think happened recently? >> I haven't been following it. >> Well, what would you think would happen? >> Well, it should go down, >> right? Correct. We talked about that two weeks ago or a week ago. I think it was two weeks ago that we should short the stock and we didn't do it like an idiot. But basically, it went from seven bucks down to $1.75. >> There you go. >> Yep. And this was supposed to be the next Apple. This is supposed to be the next GameStop or or Build-A-Bear. >> Well, you know, they still have more. They these meme guys can come in there and buy it up again. Well, they don't buy anything, do they? Just just point a finger. >> Yeah. >> Here, you buy it. Everybody just rocks it up. Did you watch any of the news today about what's going on uh in the tech world with Jensen Hang uh with regard to Nvidia? >> I not really. I've been watching either the World Series or Trump's trip to Asia. >> Oh, what about that? Did you watch the whole entire 18 innings? >> Well, here's what here's what I did. I watched the I could say I watched the whole thing, but I didn't. I watched the beginning of the game. Then they had things to do and then I watched the end of the game from about the 13th inning on because I say, "Oh, there's a breaking record here." This game, of course, it won't go away. >> Is that the longest World Series? >> It's the sec. It's a tied for the longest. Both of them on the third game. Both of them at Dodger Field, >> which is funny. Uh, but I think it was 2018 when they had the other other 18 in game. And I watched this and I and then I got kind of fascinated by this guy. They brought this guy who never pitches much, this Klein guy, Red Beard, and he would shut out the uh Toronto team for four solid innings, including a line drive, hit right at his, you know, basically hit at him and he just caught it. It was the third out, I think, of the 16th, if I'm not mistaken. He came in the 17th and he went to the eighth. He threw more pitches than ever before. No one's ever heard of the guy. They just brought him up on, you know, like two weeks ago and now he's like this kind of the hero of the game besides Otani. We we expect to do what he does. It was I thought it was a terrific product. >> There was There was n >> You like baseball. >> There was 19 pitchers used. >> That's a deep bench. That's a deep bench. >> Dodgers set his record by using 10 pitchers. >> Not not 19 on both on one. >> No, it was 10 10 on the Dodgers. >> Yeah. And um >> nine on the Blue Jays. >> Yeah. Nine. >> That's a still a deep bench. >> It's Yes, but the game was ridiculous. Well, that's nowadays, of course, they want a lot of, you know, you need a lot of pitchers because they don't let anyone pitch for the whole game. Although the Dodgers have this one Japanese guy who is just a terrific pitcher who pitches complete games, which is like unheard of in today's world. >> Yep. You got to protect the arm. Well, there's a lot of the reason I bring up this other issue with regard to Jensen Wong. Um, what was a flurry I mean a flurry of deals, announcements, buys. It went on and on. The list went on. There's got to be honestly it may have been 30 different announcements today. The first thing that happened there was this massive this this is one of the first things that happened today earlier. Uh, a billion dollar stake in Nokia. I'm going to repeat that because you need to absorb that. A billion dollar stake in Nokia. Nokia, the phone company. Noia, >> are they going to Is this a billion dollars in stock? >> Yeah, they're buying they're buying a billion dollars of the company of shares. >> No, but I mean, is it is it being paid for with stock? >> I don't know. Probably being paid for with cash cuz they'll just >> Not cash. >> They'll peel off a few bucks from their stock and they'll buy it. They have so much money in the bank. It's ridiculous. >> Yeah. Well, there that's true. >> So, um, shares in Nokia store about 26% of the tie about 22% it closed at Nokia will issue more than 166 million new shares and we use the proceeds to fund his. You issue 166 million new shares. That is massively dilutive. But yet, the stock was up 22%. All Nvidia needs to do. There's a great game plan. Strike a deal. Say we want to buy it at the current value. That's fine. Lock it in. They make the announcement. Stock goes up. Pays for the whole deal. >> Well, it'd be a nice calculation to make to see if it did pay for the whole deal. >> I mean, it's 26%. Had to be up 100% to make the whole deal, but it made a lot of money. Who knows what they actually got the the deal at also. Now the two companies also struck struck a strategic alliance and a partnership to work together to develop next generation or we call it nextg 6G cellular technology. Nokia has a lot more infrastructure and backbone type of technology now versus just their handsets. The handsets I mean that was what year was that? I don't even know 80 something. >> I gave up on it. >> Yeah. Nokia said that it will adapt its 5G and 6G software to run on Nvidia chips and will collaborate on networking technology for AI. >> Uh that's just one that's just one announcement. >> That's to that's to protect Nvidia if the AI bubble pops. >> Well, that they have more partnerships that they announced today. It's it was really like I said >> this all defense that would I consider that defensive. >> It is. I would agree. I I'm now thinking the rest of them are too. >> I mean, they're diversifying is what they're doing, right? >> Yeah. So, they don't get killed in the AI collapse. >> But it was unbelievable today the PR team at at Nvidia is in overdrive announcing uh a deal with Uber. Not they're not buying Uber per se, but they're doing a strategic partnership blank blank, you know, so on and so forth about blah blah blah of what they're d you know what I mean? And it's like this, every one of them is the same thing. we have a strategic partnership that's going to do this and then da da d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d d and we have this one that's going to develop a you know f next generation uh AI for use with Costco or something just you know that kind of stuff it was just on and on today on and on >> with Palunteer you know they're going to do a deal with Palunteer to increase the opportunity for you know Palanteer to use stuff and these are things that were usually happening in the background and um you know So the proof is in the pudding. When the earnings came out in the future, the companies would say, well, you know, we had all this great stuff because we have these partnership. Now they're announcing it in in front of everything and investors are just like hysterically excited about it. Nvidia closed above $200 per share for the first time ever. I believe Apple and Microsoft also passed $4 trillion of market cap today. Microsoft was a was really interesting because early in the day Open AI changed their corporate structure and now uh they went to this new structure of ownership giving Microsoft about 27% stake in open AI >> stock was up nicely >> 550 on that >> and then Qualcomm now they're in the game seems like Qualcomm has gotten the goods to compete with AMD and Nvidia stock was up 15% that >> this was something they were claiming some time back and I don't know what they've done to change the uh fact that now people have noticed >> what's really interesting is that if there's more competition in the markets you would think that that would benefit some and hurt others right but no >> generally it does >> generally it does but AMD Nvidia not at all phased at all yesterday when this news came out Qualcomm's up 15% now Qualcomm's data center chips are based on the AI parts in Qualcomm smartphone chips called hexagon neural processing or NPUs. There's a there's a there's a there's an expectation that nearly $6.7 trillion in capital expenditures will be spent on the data centers through 2030 with the majority going to systems based around AI chips which is basically 3% of our annual GDP for the next five years. each year. And uh Qualcomm is trying to cash in on this whole chip craze. They made this new service. >> Get on the bandwagon while you can. >> Yeah. Yeah. >> Because you're going to be kicked you're going to get kicked to the kicked to the curb whether you're on the bandwagon or not when things go south. >> Right. And now on that news with everybody's in the pool. >> That's basically right. Everybody in the pool. body in the pool. The US has formed a billion dollar partnership with Advanced Micro Devices AMD to construct two supercomputers that would tackle large scientific problems ranging from nuclear power to cancer treatments to national security. That was what uh energy secretary Chris Wright and AMD CEO Lisa Sue told reporters the US is building two machines. Just to be clear, that's 500 million per machine. You think you got an expensive laptop for three grand? >> [laughter] >> Right. >> Yeah. >> You got a 500,000 machine. >> Too much. >> 500,000. They're doing this to ensure the country has enough supercomputers to run increasingly complex experiments and require harnessing enormous amounts of data crunching capability. The machines can accelerate the process of making scientific discoveries in the US and the areas that the US is focused on. So, first we have quantum maybe computing >> quantum. >> Now we have to put all money in the quantum if it's so great. >> Do you notice though this billion we're just throwing around billions now? >> I should think that you know you could get a quantum laptop for that $3,000 and it should kick the crap out of the $500 million supercomput. >> I'm thinking that a million-doll computer is all that one would need. That would be stacks. It's it's it's a whole rack of CPUs, GPUs, blah blah blah. You could use like a little screen, little monitor, pull out drawers, air conditioning. You need to be keep it cool, right? >> Oh, yeah. Problem. >> I'm thinking a million bucks can get you a pretty sweet setup. But you get the government involved and they just have no control. I mean, it's And where is all this money coming from again? Where where where is the allocation? Where is this? >> It's only it's only a total of a billion. >> I know, but where is this money? That's a billion here. A billion there adds up after a while. I just don't understand where it's all coming from when we're in a government shutdown where we have flight delays, no EBT starting in November, pulling benefits from the blue states supposedly. Um a and of course our our uh uh illustrious Congress per people and senators, everybody in Congress is still getting paid throughout this by the way. Constitutionally they are to be paid. >> Yeah. Yeah. And they're not going to do anything symbolic where they won't get their money. >> Yeah. Well, some have said, "Oh, I'm not taking anything. I'm not taking my money." Uhhuh. Um, so it it's kind of interesting that we have all this money going out and we're buying stakes in this and we're doing that and we're somehow going to fund I know Peak Heg came out today and said we're going to fund the military. Well, how do you how do you do that? Where where you just you just you're just going to do that? Where's that money coming from? It's very >> Yeah. The whole thing is this is a house of mirror smokec screen house of cards. I don't know what you want to call it. And then we >> got assuming that eventually these guys are going to sign off on the on and start restarting the government, >> right? And then everything just falls in place. And we got and then and then we got farmer Scott, Treasury Secretary Scott Bessant. Farmer Scott, he said in a in a in a discussion over the weekend that he has personally felt pain from China refusing to buy American soybeans during a trade conflict with President Donald Trump. I'm actually a soybean farmer, he said on the ABC News program this week. H >> since when? >> I guess he's got some soybean farms in some of his hedge funds, which I'm sure he hasn't uh, you know, separated. Now, by the way, the latest framework for a deal with China includes, hold on to your pants, buying massive amounts of soybeans from American farmers. Exactly. You see the irony of all this? or the maybe not the irony, the uh continual uh miism of all this. >> Well, I think it was to be expected. >> Of course, >> I didn't know about Besson being a soybean farmer. >> The first deal that we had back in the early Trump 1.0 wasn't all about like soybeans. >> Soybeans are a big part of Trump's deals. >> We for whatever reason. Now, meanwhile, >> well, that's for to get the farmers to vote for Trump. >> But in meanwhile, all the soybean farmers, there's corn, but there's corn, there's wheat, there's a lot of other things, but soybean. Okay, what happened? We had a deal. Somebody broke the deal. >> The Chinese did. They don't agree to any Their terms are always, as far as they're concerned, flexible. >> Exactly. And that's what's going to be in this deal, too. >> Oh, yeah. Yeah. They're they're not good. I mean, they're for what they're doing for themselves is fabulous, but they're not they're not uh honest brokers. >> As long as we get a deal, we're happy, right? >> The way it's Yeah. That's like the $19 trillion in supposed uh investments in the United States, according to Trump. >> 19 trillion. >> Yeah. That's the latest. 19 trillion. [clears throat] >> There's like if they get two trillion, it'll be a miracle. >> Yeah. >> Now, Kathy, skeptical. I like Trump, but I don't. >> No, no, I get it. But but some of the stuff is just a little bit farfetched is what you're saying. >> That's what you're saying. >> Yeah. Yeah. And that's one of them, >> right? Uh Kathy Wood, you remember her? Remember from Arc Invest? She was all the rage back in >> Oh, yes. She was a hot she was the the go-to girl. >> Yep. She was she had everything to say. Well, she said on Tuesday she p pushed back on fears of an artificial intelligence bubble while at the same time flagging the possibility of a re a reality check. on AI valuations. Speaking on CNBC's Dane Dan Murphy on the sidelines of the Saudi Arabia Future Investment Initiative in Riad Riyad, she said, um, "If interest rates begin to rise, there will be a shutter in markets. We're going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates." Wow, that's kind of the other side. That seems unlikely >> that we're going to see rates go up like that. I I would agree. The only the only way that would happen if if these guys overdo it and really >> they're not going to do overdo it. >> Yeah. >> Not with Powell. >> No, I would agree. I don't think I I can't imagine rates going unless we get a lot of inflation. That that that's that's the that's the wild card. Well, so far so good. >> Yeah. Amazingly. All right. No way, Jose. Not good. This needs to be explained and reversed. I don't understand. There's a mystery donor, which we know who it is now, of $130 million in contributions to me to pay US military troops during the government shutdown. This guy named Timothy Melon. >> Yeah. From the Melon family. >> Yep. Renowned Gilded Age Banking Family. But Melon's donation works out to only about $100 per service member. Cause about 6.4 4 billion to pay US troops every two weeks, by the way. >> Oh, I didn't know that. >> Yep. And using his money might actually be a problem when it comes to federal law because the matter um you you can't you can't just give money to the government like that. Uh it's just like saying, "Hey, I have >> you can actually >> you can pay taxes." >> Yeah. by through the tax system, >> but you can't >> you can voluntarily pay more taxes than you are, >> but you can't direct where the money's going. >> That's true. >> And you cannot you really can't pay the military. What if what if this the problem is this invites all sorts of conflicts of interest? Can you imagine that's the case? And and there's a handshake done somewhere overseas to Iran. Say, Ian, do me a favor. >> About this for a theory. >> Yeah, >> this is bull crap. This whole thing is just just a smoke screen so they can so that some court can come up with what you just said and say no, you can't do that and they're going to cut off the servicemen's getting paid is what it's going to look like cuz you you yourself said it's only 100 bucks. It's not a big deal. But but just the the the visual uh aspect of a of a liberal justice, a liberal court, putting the kaibos on it and then having the Democrats have to defend not paying the military is all a ploy so Trump can throw it in their face. >> See, I think you I think you give too much credit on the the intellect uh of of some people. >> I do. You're right. That is it that is an issue when you come up with these ideas. >> Yeah. You give I think you do you are >> these guys really that smart? >> I can't imagine. >> Well, >> I mean would >> but it but but the theory is good. >> Theory is good. And the question is even if you come up with that whole idea is somebody have the balls enough to actually go ahead with that because who knows what the ramifications if it backfires is. >> I don't think the Melon kid's too worried. >> Well, bottom line here is it seemed to me when I saw this I was like this is not not this can't work. Now I talked to somebody tonight. and I was having dinner and uh the discussion came up about this and they said, "You know what? This what's going to happen here? The 130 million is just going to disappear. It's going to end up going into the ballroom. You know, Trump's going to say, you know, we couldn't do that because of this. We just, you know, took it took it anyway." >> That's actually a good one. >> Yeah. It's just going to come into >> Well, he said she had the 130. Uh, you know, you didn't give a crap. Give it to the ballroom. >> Do you want a refund? I don't Do you Do you want a refund? Supposedly, this guy Melon's only worth about a billion dollars. >> Uh, it's a lot of money for him then. a lot of money. 13% of your stake. >> Yeah. Yeah. >> Here's something interesting. Uh I did >> which again makes me think the whole thing's some sort of >> scripted. Again, I'm going with the fact that you give too much credence to an intellect of some people >> um profit margins. Something something I was really I've been concerned about is with not only the tariffs but uh the escalating cost factors and trying not to pass those on to uh individuals is the whole issue about profit margins and um the S&P 500 is a big week like I said this week but so far as report a lot we've seen a lot of companies the blended net profit margin for the S&P companies that have already uh posted their earnings for Q3 2025 is 12.8%. Which is equal to the previous quarter's net profit margin. But here's the interesting interesting thing. I think at first blush because we got to talk about this um above the year ago net profit margin and above the five-year profit margin on average. So, in fact, this quarter itself is going to mark the sixth consecutive quarter the S&P 500 is reporting a net profit margin above the 5-year average. Now, let's just hold that because that sounds great. Remember something, we had some real problems in 2022 with the higher inflation and higher costs. Profit margins sank. And we also probably are getting a little bit towards the end or middle of 2020 when basically everything was shut down and companies were struggling. >> So, you got all that into five years. So, I'm kind of throwing the 5-year out. But what's interesting is this. If you look at the four sectors that reporting year-over-year increase, one year, I'm talking about one year. Financials, 19.9% versus 18%. Utilities 16.7% versus 14.8. Uh, then there was six sectors that reported year-over-year decreases in the net profit margin. communication services, which is that's where Facebook is under that one. 13.8 versus 14.8. Real estate 34.3 versus 35.2. Healthcare 7.3 versus 8.3. So, it's kind of a mixed bag there, but I thought it was really interesting that we're seeing some some decent numbers come out um when it comes to the profit margins in a in a time when you should be really concerned due to the extraneous costs that are involved in doing business. Yeah, this is one of those moments where you should have put a one of your fabulous charts >> Oh. >> into the show notes for people to look at. >> Sorry. We'll do that next time. >> Big question. Is this the new normal? The Dutch government has invoked control of Nexperia, which is a Chinese-owned semiccomputer maker, semiconductor maker based in the Netherlands under its goods availability act. Following the announcement by the HEG um the listed shares plunged 10% of um next period and >> so so basically this is another word for nationalized. >> Yeah. Yeah. Well, you're nationalizing >> they're fudging it but it's this is nationalized. >> But you're nationalizing another country's company. >> Yeah. That's what you usually do. >> And you take over. We could do it for your own too. I guess. But what do you think about this? I mean, I find I was like, "Oh, I guess is this happening?" >> Becoming Soviets, >> but why is this happening? >> Nationalizing other This is what the Russians did. I mean, when they the Soviets took over. This is what South America did to our oil companies. This is this happens all over the world, usually to a foreign entity that's in there making money, doing well, and you nationalize them and take them over and let the thing falls apart after that, of course. And too bad. out of here, Charlie. >> But uh the question I guess I have for this is this hasn't happened in a while, right? >> Not in Europe. >> And now the Dutch government taking control of this company. They say it's because to ensure sufficient supply of its chips, which I don't know can't they now that's a standalone company. Now China won't have anything to say and then how are they going to get their goods? I mean, is this kind of situation because of all the things that are happening here with the US government taking positions and being heavy-handed in the capital markets? Is that somehow saying >> maybe somebody saw maybe somebody looked over here some idiot looked over here and said oh look the US government's nationalized AMD >> or Intel >> seeing the buy you know we've invested in some companies recently Intel oh the US government's nationalized Intel by buying them or buying some shares is all they really done but you know they invested in them uh and they're looking at this as oh this is the thing to not understanding anything. >> I mean this the AMD thing too >> that's the only thing I can come up with. >> I mean the same thing with companies doing it. Open AI for example like this whole vendor financing circular financing. It's coming up a lot in discussion but everybody >> I love the circular financing. >> Everybody's like ah it's no big deal. It's happening. Meanwhile, OpenAI has now close to a trillion dollars of commitments over the next 10 years. They signed a deal with AMD. We talked about that last uh week or the week before where the stock spiked like 40%, right? Where open AI can have the option of a 10% ownership through warrants. And as part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy 160 million shares. 1 cent. 1 cent. I want that deal. Now they have to make certain milestones. My point though is you know there's a lot of question. >> Who has to make the milestones? They have to make the uh open eye open AI. I'm sure it will. >> You sure? >> No. >> Uh it's something probably with the relationship with the two. I don't know what it is. We can look that up. >> I think one of these scam deals I've that go around come around these things. These guys do sign up on, you know, sign out the dotted line and there's little gotchas in there and next thing you know AMD is lost. Not as bad as the Columbia Record Club deals, but >> no, you know, I'm thinking more of like MOSFET, MOS Technology, uh the stuff that Jack Tal used to do, the the deals he used to pull. Um there's a couple of different couple of different mechanisms I was that somebody gave told me about. One of them is uh two different mechanisms to to end up owning your owning a company that you're investing in. One of them is you you have the have the uh company put together a spreadsheet of their goals and what they're going to do in the next 5 years or 10 years and if they don't meet the 10-year plan, you get the company. That's one of the mechanisms which has been floating around. you. So you you go in to buy the company, say, "I'm going to buy the company, but I don't want to buy it for what it's worth now. I want to buy it for what it's worth 10 years from now." So you give me a spreadsheet and that's and the money at the end there. That's what I'm going to pay you for this company. You do the deal. They don't meet the numbers. You say, "You scammed me and you get the company." That's one one great trick. >> The other one, which is I understand TL used to pull this one, and this is a great trick, too. It takes this takes a little more finesse is you you go to a company and you say I got to buy you is I got to buy you you it's important that we own you uh before the different reasons and the and the company says well we don't have any if we're not ready to sell or anything and the other guy says don't worry about it just throw together some numbers and we'll pay it because we need to own you and so they throw together some numbers which are always wrong. And then they they they say, "Look, you and then a little time goes by. They say, "Look, you've scammed us with these phony numbers you threw together. We're suing you." And you end up with the company. >> That's a great bit, by the way. And that's happened a lot. >> Well, I don't know if some of this is going to happen here because um you know, the big issue is that Open AI, the questions are being, we talked about this, the questions are, you know, can open AI really do this? Are they going to be able to actually fund these deals? Did we talk about or Oracle repricing >> down 18% from where it was, right? >> Yeah. No, this is a this is something's up. I don't know what the mechanism is, but there's this stinks. >> And then we have Tesla. Uh again, Tesla bad earnings, no problem. Just uh lead with the announcement there's more robo taxis possibly coming. horrible earnings, really ugly margin compression, 500 basis points reduction in overall, but just today, like I said, it went from 417 to 457 on a PR blitz. That's still a chance that the autonomous driving is going to happen. By the way, also Tesla chair Robin Denhomem uh was pleading with shareholders to approve CEO Elon Musk's unprecedented comp package that could be, you know, worth more than a trillion dollars over the next number of years because, you know, it's possible that if he doesn't get this, he's going to leave. He's going to leave the company. So she sent the letter out to shareholders Monday and said, >> you know, [clears throat] warned that the company stands to lose Musk's leadership if the shareholders don't approve the plan. >> Yeah. And we all know that without Musk, the thing's going to flop. >> Do you think that Musk would actually leave Tesla that now has wrapped up in it with open uh with um uh >> unless they bought him out? If they bought him out, I think he would. >> But he'd pull a shenanigan of some sort to because he's got other >> There's a side deal. There is has to be a side deal with the chair and all and the people involved to get his >> Well, yeah, there's stuff we don't have no clue about. >> There's got to be side deals. A trillion dollars is plenty of money to go around. >> Yeah. >> Look, do the deal for me. I'll give you five million bucks. You do get this happening. >> Yeah. >> All right. >> Yeah. This guy really is talented. >> Yep. Amazon planning to cut as many as 30,000 corporate jobs beginning Tuesday as the company works to pay expenses and compensate for overhiring during the peak demand of the pandemic. Small percentage of Do you know how many Do you know how many people that Amazon employs? I was shocked with this number. >> I don't know million. >> 1.5 million. >> Wow. That's like a lot. So 30,000 is a spit in the bucket. >> Yeah, spit in the bucket. Can you imagine that HR job? That's a big job. >> Oh god, >> it's like a small country. >> No, you had to have teams of people for HR. >> Unbelievable. Now, Target also said last week that it's cutting about 1,800 corporate jobs. They want to get back to growth after four years of roughly stagnant sales. And then, >> yeah, you know, my opinion. >> Yeah, it's crap. Um, they sent out a memo is, hey, you know what? Uh the elimination roles are a combination of about a thousand employee layoffs and about 800 positions that will no longer be filled. [clears throat] 8% of Target's uh corporate workforce is being done, gone. Bye-bye. Uh let's see what else we have. We have the thing we talked about Canada. What did you think about that? That Canada runs a ad that shows Reagan saying that tariffs are bad. Trump gets all pissed off. He says, "You know what? Negotiations are off. Ontario says, "You know what? We're pulling the ad." Trump says, "You know what? I'm still mad. I'm going to throw an extra 10% tariff on you." I believe, by the way, tomorrow there's a Supreme Court hearing on tariffs. Are you aware of this? >> Yes, I am. >> Uh, so what do you think? >> And Trump was thinking of going to it at sitting there, but I he's in Asia right now. He's supposed to come back, but I don't think he's going to make it because I I think he's going to be in Asia extra couple days. Mhm. Uh let's see what else we have here. Google entered a partnership with Next ERA Energy. They're going to restart a uh one of the nuclear facilities. So that's kind of interesting. China uh industrial profit soar 21 6% in September from a year ago. Pretty impressive. Sharp jump extended a strong rebound that began in August when the industrial profits jumped 20% year-on-year. first uh nine months of the year, the profits of major industries and firms grew at 3.2% though, so it's back end loaded right now. And I guess we got to talk about the the the word they use the word brazen when it comes to this. This is the brazen theft at the Lou. So simple, so effective, but they got caught. >> You saw Did you follow this story? >> No. There was a Do you Do you even see what happened? They They hundreds of millions of dollars worth of crown jewels and things of that nature. They stole >> Oh, no. I know that. No, I'm sorry. Yeah, I did follow that. Um I wasn't understanding quite where you were where you're headed. >> Yeah. The the the interesting thing here was they they pulled up with a work truck with an extension ladder. >> Yeah. >> Just went up there, smashed the window, went in. >> And by the way, I don't believe what you're going to say if you're going to say it. that the ladder company is now using that as an advertisement. >> Oh, though. How great would that be? An advertisement for what though? >> I think it's a a meme that's floating around. >> What are they advertising that how effective the ladder? >> The ladder is great. Oh, >> it gets you to places you never thought you'd get to. >> Yeah, something like that. >> Well, uh, >> they got two and the guys, but they're not even sure those are the right two guys. >> They got DNA off one of the helmets supposedly. And already there was a whole CNN documentary that showed all this somehow miraculously five or six days afterwards from start to finish from the start of how it happened as structured the the the brazen theft itself uh what happened in Lou with real life camera footage and how they were caught. I was like wait a second this is packaged already in to a CNN 1hour special like a >> Yeah, it doesn't make sense. Wow, that was fast. >> Well, the one thing about the robbery itself is it has to be noted and no none of the media is covering it much. I've I've seen it covered maybe once is that the head of chief of security for the museum is a woman with no experience in security of such a such a system. And she was hired as a as the French as a French version of a DEI hire. >> Oh, >> and she's never done anything like this. She was uh never managed anything and she was never a security expert. >> Well, it serves them right then. >> Well, yeah, but nobody it does. I guess it's But who's going to suffer from it? Uh >> well, they'll get back >> no heads are rolling that I know of. >> Well, it's interesting. You know who are they going to show up into a pawn shop like, "Hey, what can we get for this?" [laughter] >> You know, thinking it could be worth the smart money is you melt them down. melt down the metal and you pop out the jewels and you you parcel them out over the next 10 years. >> I I find that kind of um destruction of important property to be one of the most offensive crimes out there. >> Yeah, I think so. >> You It's common. It's the It's the smart It's the If you're a criminal and you're doing this, it's the smart thing to do. >> This is Pink Panther kind of stuff. Right. >> I guess >> or Shan Connory is uh a a a like the Rock or whatever his he's had a few of these or Nicholas Cage uh National Treasures type of >> Yeah, that'd be a good good example >> type of example there. So anyway, uh I thought it was a pretty interesting story. I like how they use the word brazen. There's always these words you have to use to describe something that's bra a brazen theft of uh very important artifacts from the French and of course the French said that they were it was like a day of mourning. They felt that the French people felt that there something was personally stolen from them and they were in it was invasive. It was almost like a it was almost like a rape to each individual person in France. >> Yeah. Well, the Mona Lisa was stolen at least once. now got returned. You've seen the Mona Lisa up close >> more than once. Yeah, I've said I've seen it probably three times. >> Everybody that goes to see the Mona Lisa, including myself, uh says the same thing after they've seen it. And I say something like, "What did you think of it, John? >> Did you see it before or after they put the glass in front of it?" >> Did you see it before or after they put the the little barrier in front of it? >> I think before. >> So, you saw it before they had the glass over. >> It was just a frame when I saw it. Well, it was, you know, picture in a frame. >> Yeah. And there was no >> nothing blocking you from going right up to it. And >> this is probably 20 years ago. >> Yeah. I saw it. First time I saw it was in 73, I think, which is longer than that. 50 years ago, >> right? >> And uh I don't know. I mean, it was it was interesting. It wasn't like a a showstopper, >> but how about this? Tell me. You're going to have to agree with me. I know you're going to agree with me. It was a lot smaller than you thought. Yeah, it's not that big. It's not small. I I wouldn't call it small, though. >> It's not It's smaller than you would have thought it was is all I'm saying. >> You know, when I saw it the first time, I that was not something that came to mind. >> We got to get to France again when they behave. >> Oh, well, the only reason to go to I think there's one good reason to go to Paris. >> Oh. uh now as opposed to like you know a few years ago is to see the remake of the Notraam. The interior is looks dynamite. >> I have not se I've been there but I have not seen the remake. >> No the remake looks I mean I've been there a couple of times and but you know it's it's dingy. >> Isn't that when to be honest Napoleon have uh >> isn't his grave there? >> I don't know about that but have you gone did you go to the roof? Ever go to the roof? >> Was that the dome roof thing? No, it's not that dome. It's just the roof. The actual roof of the place. You You can take There's a stairway. You can take it up to the roof and sit there, eat lunch if you want. Or you used to be able to. >> Maybe I did. I don't recall doing it, though. >> Well, you would have remembered. >> Yeah. >> Sitting on the roof of this place. >> That's pretty cool. All right, let's get to our uh next topic. This is a game that we play. It's not a solicitation to buy or sell any security. It's not a recommendation of any kind. Nothing on the show should be considered investment advice or a recommendation. If you choose to invest in any of the stocks mentioned, you should know that it may carry risk along with the risk of a loss of principle. You should also seek out professional financial advice for your particular situation. We assume no risk as these are not to be considered recommendations. Horowitz accompanied myself or John Cavoric may invest in any of the securities mentioned and we'll disclose that on the website under the weekly stock pick section. You can go to dhunplug.com and see all the names we discussed in the segment along with the performance information from the date discussed as well as any additional important disclosures. Look at you on your Freshworks. I like it. >> You did a short on freshworks because of insider selling. You're up 16%. >> Your unusual whale subversive >> up 14%. Thank you, Nancy. [cough] >> Yeah, >> your Nvidia. I I only have like five things on this. You have the rest. Nvidia up 41%. Uh howy Therapeutics says mine came off up 31%. What else do we got here? Up 30%. Primo Brands, which you bought. Uh, no, you shorted that insiders. You shorted Primo Brands. You have 30%. >> Yes. The second insider short I've done. I This is the not recommended strategy where you don't short insider trading by rule. But my thinking with these stocks and the one I have today >> Oh. >> is that when something's fishy >> Mhm. about the insider selling. Maybe it there there's some it's more than taking money off the table. >> Oh, you you tell or you want me to go first? >> Well, you can go first and I'll >> 1029 2025. Let's update this. Uh I'm going to short uh which is probably a really bad idea. Uh Carvana, last time we did this was >> Yeah, you tried it before >> and it worked out really well. Um, Corventa is coming out with earnings tomorrow. Stock uh came down pretty significantly last time. Rode right back into earnings again this time, figuring ah how bad could it be? Um, but you know, this is a company that is so overvalued. Now, that doesn't mean you can't go any further, but we're just going to pick a short on this and see what happens. Okay, I have a uh there's a couple of possibilities here. Uh, for example, Richard Kinder is buying a lot of our old favorite >> what >> what is it? Kinder, Peabody, Kinder, whatever the hell it is. >> KMP. >> But I'm not that's not my pick. My pick is a short. >> Okay. >> Because I'm just sketchy here. Um, monolithic power. >> Oh. Uh, what is the symbol of that? M >> M Power. MP. I'm trying to I'm trying to get to it on the on my page. >> MPWR. >> Yeah. Uh and the reason >> it's currently trading at $1,000 a share. >> Yeah. >> And you're going short. >> Yeah. And here's why. >> Yeah. >> There is a CEO, also an officer, the same guy. He's a CEO of this company. And he has for the last number of years been he I guess he's a founder, so he's got tons of stock. And so he's been selling to the tune of just consistently selling, taking money off the table, uh to the tune of I don't know how many millions, probably over a billion dollars by now. And it's always been the same. It's like every oh every month, usually every month he'll drop uh he'll drop 4,000 shares, 7,000 shares. I'm going to read these numbers just from the last year or so. uh 4,000 7,000 2,000 3,000 3,000 11,000 there. As the stock is going up, he's selling into the rise of the stock. Uh 11,000 2,000 5,000 5,000. Then he then recently he's done 20,000 uh 20,000 as a proposed sale and then out of the blue 300,000. >> Wow. What does that even amount to? Like 3 million? Three 334 million. >> Wow. Wow. >> So, I'm looking at this and what's it what's what's wrong with this picture. >> Uhhuh. >> Oh, I like that. >> And he's just he's got the proposed sale into the SCC form 4 October 28th. He just filed it. So, this company which is now trading he sold it at 11:05. So, I think it's already made money or at least a proposed sale, but it's it'll be fixed at that number. I believe something is wrong with this picture. And this is another one of these insider shorts. And I've never missed on them. >> All right. I like it. So, we got Carvana short and we got monolithic power system short for this week. >> Yeah. With the short brothers. >> Yeah. Short brothers. Short bros. Raz. All right. Well, that's going to wrap it. >> All right. >> I'll see you again uh next week, sir. >> Next Tuesday. >> Oh, next t It's next Tuesday, right? >> Yeah, I think so. >> It is. All right. See you then. >> Bye. Bye. >> You've been listening [music] in on a conversation with John C. D'vorak and Andrew Horowitz. Hope to be with you again soon. Bye-bye. [music] >> Now, I'm not broke, but badly bent. I'm not down to my last scent, cuz I got a dollar, but it's my last dollar bill. Yes, sir. In [music] my pocket there's a dent. All my dough is nearly spent, but I got a dollar and it's my last dollar bill. Oh, I'd love just one more buck. Fortune left me by chance. Now, here's a hint. I feel like a men. You can hardly tell by a glance. I don't care. No millionaire can give me the [music] Isis stack cuz I got a dollar. My last dollar bill. [music] >> [music] >> This podcast is intended forformational purposes only and does not constitute personalized investment advice. 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