AI Investment Concerns: The discussion highlights skepticism about the profitability of AI investments, drawing parallels to past tech bubbles like Global Crossing, emphasizing the high costs and uncertain revenue models.
Market Dynamics: The conversation suggests that the current economic growth is heavily reliant on AI and tech sectors, masking underlying weaknesses in other parts of the economy.
Inflation and Economic Slowdown: There is a belief that inflation is understated and impacting consumer spending, with signs of a slowdown in the broader economy despite strong stock market performance.
Investment Strategies: The importance of patience and strategic cash holding in uncertain markets is emphasized, with a focus on waiting for clear opportunities rather than forcing trades.
Fiscal vs. Monetary Policy: The podcast argues that fiscal policy is currently more influential than monetary policy, with concerns about the impact of fiscal decisions on economic stability.
Systemic Risks: Potential systemic risks from AI investments are discussed, including the possibility of a significant economic downturn if the tech sector's growth is unsustainable.
Market Sentiment: The guest expresses a bearish outlook, suggesting that the market's current optimism may not be justified and warning of potential corrections.
Transcript
It's Friday, August 22nd, 2025. It's episode 271. I'm Kevin Mure, and I got no Patrick, but I got something even better. I got Harris Kupperman, aka Cuppy. Thanks for coming on, buddy. Hey, thanks for inviting me. It's been a while. Yeah, it has been a long time since you and I have chatted. And the reason I uh reached out to you and invited you on the show was because you recently wrote an absolutely terrific blog post that Oh, thanks. It just absolutely it was it was just it really spoke to me. And but before we talk about that, I wanted to talk about one of your tweets that went viral recently. Oh god. Which one? I'm terrified. Yeah. No, the one where the day in the life of a hedge fund trader and it was for those who don't know, go go find it on uh Harris's uh Twitter account or exac account. I don't know what I'm supposed to call it these days, but it was it was funny. It was hilarious and I think it really resonated with folks because it was it felt so real. Why don't you tell people just kind of briefly what it was about? Well, basically I wake up and then about every 10 minutes, Trump distracts me from what I'm trying to actually do, including, you know, research, talk to LPS, uh, talk to my wife, make my coffee, and he just randomly does stuff and the market moves, you know, 100 handles, and as soon as he's said something, you know, he said something because the market's moved. And then you scroll through X as fast you can to figure out what he said. And then you're either in sheer panic because it impacts one of your positions or you're like it might let me think about this a little or you're like thank god you know it's someone else getting screwed this time and then about 10 minutes later he usually changes his mind and it just goes back the other direction and I don't know like I used to be a really productive guy. I mean Joe Biden would wake up at noon he like you know he like give a press conference we kind of wandered off the middle and he shook hands with the cloud and it was great right it was super productive. I can sit there and read footnotes in a 10K and now I can't look away for three seconds because I don't know what Trump's going to do next. Yeah, it really was. It was really funny and uh I can't tell you the number of folks that sent it to me saying, "Wow, this just really truly feels like my day every single day." So, for anyone who's interested, go have a look at his Twitter account. But the real reason I am I got you on is because you wrote this piece saying Global Crossing is reborn. Uh, and I guess let's just start with what was Global Crossing for those who don't know, you know, like you you I'm actually surprised you remember Global Crossing because you're you're a younger guy. You're a millennial. Um, I'm surprised that you know that story, but why don't you let's just start with that. What was Global Crossing and why do you think that uh this resembles that? Well, Global Crossing was it's kind of a catch-all for a number of companies. you know, you could like lump Quest and like all these other companies in there. And these guys looked at the internet happening and they did this math that, you know, data usage is going to double every 3 months or something because that's the rate it had been going at. Yeah. This is in the late 90s, you know. Yep. But it's from a super low base, right? And they said, "Okay, let's build the next 25 years of fiber demand today because, you know, but I mean there's a certain logic to it. Like if you're gonna lay a fiber across the ocean, why not lay a really big fat pipe instead of lots of little pipes, right? The the problem is it's really expensive up front. And what turned out to happen is that while data demand grew a ton, it didn't grow as fast as anyone thought. And they all funded it with like jump bonds. And then when the revenue wasn't there, these things all collapsed. And guys bought the pieces at pennies on the dollar and they made a fortune actually. But it took another 20 years to fill the pipes. Some of those pipes are still dark now 25 years later, which is Is that true? I didn't know that. Yeah, some of the pipes are still dark or they're at half usage. And I think the other really interesting thing that people don't talk about is that in inflationadjusted dollars, uh, telecom spending peaked in in revenue in in the early 2000s. And as a result, I mean, despite the fact that I'm on my cell phone, you know, 19 hours a day, um, revenue to the global telecom industry has actually been shrinking in inflation adjusted terms. Uh, not not per megabyte, but but just total revenues. Oh, I had no idea about that. Well, you have uh you have businesses with super high fixed costs and they're fighting over incremental revenue dollar. As a result, they're in this never- ending price battle to gain customers and they're sort of uh just just competing the margins down to zero. Okay. And so tell us why you think that um this provides a roadmap for for us to think about at the very least when it comes to the current environment with AI. Well, I mean AI and I want to just preface this by saying like AI is going to be the future. I totally understand this. I'm not against AI. Um I'm not even against people building data centers because I mean I use AI and I mean this is like when they gave you free Uber rides to get you to use Uber. It was great. You know there's some VC somewhere that subsidized you know my lifestyle for a decade. It was great. And this is kind of how AI is, right? I mean I paid nothing for AI but AI gives me all these things back. And in the end, um, it's really a commodity product, especially at at the level that I'm going to be using it as, which is glorified search. Um, it's a commoditized product. they're gonna compete uh down to zero in terms of uh revenue and they're gonna fight over me as a customer and all my friends and they're gonna keep offering me more stuff and you know I'll be a perplexity guy some weeks and then you know Grock will get incrementally better and I'll go there and then I'm on chat GBT and they're just going to have to spend endless money to get me as a customer that pays no revenue and they won't ever have a way to monetize me and they're gonna have to keep building more and more data centers because I'm just going to keep building more and more memes and you No, but there's some like family in Arkansas that's trying to run their air conditioner right now and they can't because I'm making a meme here in Puerto Rico. Like, sorry. I mean, I actually did this kind of wrong. Like, uh, you know, electricity bills around the country are going up because, uh, AI is raising the price of electricity for residents. It's like this weird encroachment. Uh but anyway, you know, in broad numbers, and I'm sure there's people who will criticize me on this, you know, I wrote this blog post. I said that they're going to spend about $400 billion this year. And you know, if you assume a 10-year depreciation curve, they need 40 billion of revenue, right? Uh just to cover depreciation, but revenue it's like that's making no money. That's just covering their costs like in a right to get their money back with no return. But revenue is 15 to 20 billion now. And like we we all agree revenue is understated today because they're subsidizing it and they're trying to get you engaged in it and I get that. But I mean revenue doesn't cover depreciation. And then if you assume there's a 25% gross margin and the gross margin right now is highly negative, you know. So on top of the depreciation, you have super negative gross margin here. But the gross margin uh even if you get to like 25% which is kind of crazy when because when you look at you know other competing things like Bitcoin mining, it has negative gross margin still. Um and so but if you get this thing to a 25 margin and you work backwards um you you're going to need um you know 160 billion of revenue right to uh get this thing because you know that gets you to at 25% margin that gets you to 40 billion of gross margin that gets you to break even in this thing 160 billion of revenue and then I I kind of looked at this and I said okay what are some really big subscriptiony things and you know even Microsoft Office is like less than 100 billion and everyone's on Microsoft Office, right? Yeah. Netflix is like in the 30s or 40s. I don't have the the thing in front of me, but like and everyone's on Netflix. Like there's 300 million people on the thing. And it just makes you realize how uh I just wanted to work backwards. You know, everyone keeps telling me, oh, you know, just give it six more months and then AI will be better. Yes, it will be better, but I try to work backwards and say, how much revenue does it need? Because like it doesn't like AI doesn't prosper on me making memes. It prospers on revenue at some point. and you need 160 billion and then you start saying okay if you want to earn like a return on your capital of 20% well then you need like a half trillion and I'm not saying like AI has to eventually get to a half trillion to be profitable or have a 20% return on capital which is kind of what you'd want for like a capital intensive infrastructure asset unlevered when when you have you know huge obsolescence risk and everything else but that's just for the 2025 buildout and they're talking about next year like like doubling the the pace of buildout that. So maybe next year you need like a trillion and then you see you're like okay so for what the capital you're going to spend in 25 and 26 you need a trillion and a half dollars and like they're at 15 billion now and then you kind of like well the government you know the they love spying on people but like the whole defense department like that's like a trillion dollars and like we're talking about trillion five like it's bigger than the defense department and the defense department still needs like aircraft carriers and stuff like it just doesn't square right And then, you know, one of the great things about, you know, the position I'm in, and I'm super lucky, is I have a ton of people that are really smarter than me and they're really grateful with their time. And, you know, I always get emails back and some of the emails are like, "Cuppy, you don't get it. Like, AI is the future." And I'm like, "No, I get that." But you have some people who write back and they're like, "Actually, Cupy, you you're not um bearish enough or jaded enough." is like, you know, I work in an AI startup and, you know, we we have, you know, no revenue and we have like a 10 billion valuation and my only goal in life is can we limp this 30 more days and get it into a spack because we don't see how we ever get to profitable. We're not even like we're at negative revenue. We don't know how this works and like like but people keep tell us it's worth 10 billion. And it's like one of the the real push backs I got and I always appreciate push back is they said, "Cuppy, it's not a 10-year depreciation curve. It's more like five." And I'm like, "What do you mean it's more like five?" I have this one guy and he works at at a big data center. He's like, "Look, they're changing things so fast on us. One, you're saying the chips last three to five years." He's like, "No, one to two years." He's like, "As the chips right now that are getting ordered from Nvidia, by the time they show up in the warehouse and then they're put into the racks and they're all engaged, it's already an obsolete piece of equipment. Like that cycle of just turning it around and ordering, he's like like these things are 18 months." And then he goes, you know, you're thinking like the the cooling system, the electrical system, and the racking system. That's 10 years because I mean, I don't know, an air conditioner at my house lasts 10 years. Like, I don't really know. He goes, "No, didn't you see what Kimoras just did? They just created this new coolant. And the new coolant means we need to do all of our flooding systems and all of our racking systems different. We get to cool it like 20% more." And then like there'll be some other guy with a different coolant that does. And it's like if when you have the one of these data centers, it's designed in a way that you can't just like pull up all the piping. The piping is in the floor. Like it's literally cheaper to demolish the entire data center and start again because you know you're going to have different dimensions. You're going to have different this, different that. But the technology is evolving on power, cooling, everything else just as fast as it is evolving on chips. He's like, maybe your other stuff is five years. And so you take my 1.5 trillion number and you take the depreation depreciation and you jack it up a little. What if it's three trillion dollars you need? Like right I mean it's such big numbers. It's like okay 10% of the economy will no longer be spent on food or clothing or you know it's just going to be me making memes. Like I don't know. But isn't the real problem like they're spending this and they're going to lose all this money because there won't be the revenue and it's actually it hasn't it reached a point where we should be worried about it as like a systemic risk to the economy. Yes. I I think there's a couple things like look you can look back at like railroads, okay? Like it was this really cool thing that the United States did. that integrated the entire country and they started building some of these railroads and it was the fourth or fifth guy who finally got to actually operate it, you know? Right. It's like restaurants like you never you never make money the first guy with the restaurant. It's always the the third guy who buys the restaurant fully furnished and stuff that makes all the money. Yes. Yes. And with railroads it's even worse. You just keep putting capital in until you finish the thing. Like there is no revenue. Like you can't get from you know the farm field to New York to export it. Like and so this is very much like that. And eventually, you know, some guy buys it at pennies on the dollar, completes it, and then he makes a lot of money. It's like the Global Crossing, guys, right? I think what's really interesting here is if you just look at this year, we're going to put uh 400 billion in. I think everyone kind of agrees that's roughly the number. You add in a bit of R&D, you add in a bit of, you know, corporate overheads and SGNA and everything else. Am I wrong to say this is like one and a half percent of the US GDP? And that's not including any of the downstream effects, you know, and there's a multiplier in this obviously. Yeah. Um so maybe you're at two two and a half% of GDP. And then I don't think people appreciate the wealth effect. Like we always talk about, you know, interest rates and QE QT and you were super early Kevin in realizing that uh fiscal is so much bigger than monetary. Um but I think uh wealth effect is even bigger than monetary. Yes. You know, I see it in friends of mine. I know. I see it in my parents like they're retired. They have no more revenue coming in and they have to live on their savings except for my dad's invested in a house, the S&P and my hedge fund. He's doing well at all three. And you know, it's just like I'm like, "Dad, you're going to Europe again?" Like, he's like, "Yeah, have you seen my S&Ps? They just keep going up." I'm like, "But and he's like he doesn't even sell any S&Ps. He he doesn't even sell the house. He he actually has one of these negative advertisingy things where I mean his LTV on the house is actually going down even though he can't spend the money fast enough and it's not even like a super nice house. It's like an upper middle class house. It's just like every time he takes money out like it appreciates more and the LTV keeps dropping. And so you have this wealth effect and I think that if Nvidia well basically Mag 7 because you could ignore the other 493 those never go up. Um, you just take Nvidia, you just take Max 7 and Bitcoin and if those ever go down and those Max 7 are all tied to AI. If those ever go down, the wealth effect goes in reverse. I we just said I just said that maybe AI is 200 pips of GDP this year going on like 400 bips next year, but the wealth effect is probably, you know, a couple hundred bits more. I mean, let's say the the the com combination of the AI bubble plus, you know, the actual capex plus the downstream. Maybe that's 500 pips this year of GDP where when you look at that, you're like, we're in a recession outside of that. And then if you look at the rest of the stocks in the market, you'd be like, huh, the US kind of is in a recession and I want to talk about that after. But then it's like, so next year it's supposed to be like seven to a thousand bits of GDP. Like these are huge numbers. And I mean, you you kind of call on some of my numbers. And yeah, I'm probably being a little bit, you know, flamboyant with how I approach these numbers, but I don't think I'm I'm off by basis points. I'm not off, you know, directionally. We're having an epic bubble in Mag 7 and wealth effect all tied to AI, which everyone says is the future. Yet, the people inside of AI, and I had about 10 people reach out to me tell me that it's not the future, and they all went out. Um, they I don't know. You're being a little hyperbolic there, aren't you? They're not saying it's not the future. They're just saying that the pricing is never going to be able to achieve what what's priced in now. Is that not what they're saying? Look, I have a farm. Uh, it occasionally produces an avocado or, you know, a mango. It's not going to be a profitable farm. Therefore, it has no economic value. And look, I get a lot of enjoyment out of going to my farm. It's great exercise. Every once in a while, I bring something home to my wife and she's amazed I produce something. But like if you were to approach my farm and you wanted to put it into a farmland re, they wouldn't give me a lot of money for it because it doesn't produce much of anything. And you know, my farm is very well suited to uh go back into jungle. And probably when I get bored of my farm, it'll return to jungle. And I think that's how we can save a lot of these data centers at some point in the future because the technology advances so far whereas like fiber hasn't advanced. So the old uh uh global crossing pipes still work when the data center of the future needs to be 10 feet taller or wider or something else. Well, that is a total writeoff. It's like my farm. They're basically saying like our AI startups on one hand is worth 10 billion and we're raising as much equity as fast we can. On the other hand, we we just can't figure out how to cash out fast enough, right? We know the music's about to stop. Okay. Uh and and I just before we go on about this wealth effect, I you're the one that's always, you know, reminding me, you say that in the old days, recessions cause stocks to go down. And he say, you know, stocks going down cause recessions. And I think that's a great line. Yeah. But did I say that? That sounds too uh Yeah. No, that was definitely you. You're the one who to tell me that. I'm kind of proud of myself. I must have been drunk. No, you're the one that tell me that. You know, and I'm not sure I'm completely on board, but I'm I'm definitely open to the possibility. And I think that the wealth effect is often underestimated. Okay. So now you're you're looking at this macro setup and you're you're worried about AI and that's a trade on its own, but you're also worried about the economy and you kind of alluded to it when you said that uh all the growth is in the AI and then the rest of the economy is doing badly. Can you expand on that and explain where you're thinking from that perspective right now? Well, I mean supposedly the statistic right now is that AI growth is faster than uh the growth of the the consumption economy. the service economy which is like 70s something percent of the economy. You know this this little 1% piece of the economy is growing faster than the rest of it. Uh which is kind of you know the first clue something's misbalanced in our economy. Um 10% of uh Americans are half of our spending now. Um and I bet that's even you know narrower. It's probably the top 1% that are a good chunk of that. Um the 1% they don't earn money from jobs. Well they do but they get you know 50% tax rate on that. So you can't really put much money in your pocket. They earn money because they have assets and the assets go up and you can borrow against those assets taxree and or you sell those assets to some other idiot. And as a result, you know, the wealth effect is such a big piece of the economy. And I I think people don't appreciate that if stocks go down, people stop spending. And I think it's almost immediate. You know, guys, they're like, maybe I don't want to spend a thousand bucks on dinner. or if we're going out to dinner, let's go get a cheap wine instead of the really fancy stuff. You know, it it happens really fast and there's a feedback loop to this. And I mean, we saw this in uh when we had that little slowdown in 22 and all the consumption numbers just collapsed. Even though the government was doing huge fiscal and we're doing infrastructure and all the states were flushed with money and like the middle class, they they were just going crazy. But, you know, NASDAQ came off and big ticket items just went no bid. And it it just shows you how tied to uh NASDAQ it is. But I really do think the US economy is slowing. Um, you know, I'm one of those believers that, you know, there's the real economy and there's a tech economy and that the tech VC economy exists in its own little bubble in San Francisco and they have no idea how anything works and they don't really care how anything works. And then you have the rest of the economy that uses things like plastic. And so you look at you know what are the prices of like uh methanol and napa and you know you go through you know ti2 and chloralkine. You go through all these things that are like precursor chemicals that then go downstream and get specialized and eventually end up in some product in your house and they're all no bid. And then, you know, look, I guess you know, oil's a bit, you know, political and the Saudis are producing a bit more. But, I mean, oil's kind of no bit. It's it's it's just been in freef fall and so is lumber and you just like start looking around the world at all the stuff that goes into stuff and you're like, huh, you know, the there's a big chunk of the economy that's just freezing up. And you look at a lot of the stocks, you know, the 493 as we call them, but a lot of those are still kind of, you know, buoied a bit by uh passive flow. But if you go to something like like the S&P 600, which these are companies a billion to five billion market cap, they tend to be regional banks which aren't really doing that great or they tend to be, you know, industrial things or they tend to be basic material that you have less of your tech stuff in there. These things are suffering. I mean, these stocks haven't really gone anywhere in almost a decade now. I mean, they they finally had some excess earnings in uh 202122 and then it all just went away and now they're b back to, you know, earning no money. And I just think the economy is really quite slow, but people don't realize it because everyone looks at the stock market and the seven stocks going up and everyone's like, "Oh, cool. Everything's great." And I mean, the employment numbers are okay. It's kind of rolling over now. I think we're setting up for a nasty recession. I mean, Kev, you and I talk about this a lot. I mean, I think it's be bad. I mean, how do you see it? Well, I I'm completely in your boat, your boat here. And the thing I I like when I talk to you is I'm sitting around looking at the macro numbers trying to come up with reasons why I think the economy is slowing. And you'll come to me and you'll say, Kev, I just on with another conference call and like again, no demand falling off a cliff. and and you'll and you'll have all these examples of like real world stuff that is rolling over and that's why I love talking to you because you are getting on those conference calls and you are listening to them and why don't you just tell people about those conference calls and how you know despondent they are because that is like there's nothing else to describe them right they're just not good it's like a funeral I mean look I probably listen to 300 of these calls uh I like tone you I read transcripts, too. I mean, earnings, the two weeks of earnings, I just don't sleep. Um, this reminds me a lot of summer of08 where like everything went no bid in the economy and the stock market was still pretty bid and everyone's like everything's fine, you know, and it's just like no one has to pay their mortgage. Look, everything's fine. The stock market's up, you know, and like there's a demand problem right now in the economy. Um, it started last year on lower income. And the issue is that I I really do think inflation's higher than what it's been stated at. And I mean, there's a billion people that could tell you, you know, the wise and how. I I'm just a human that lives. And they tell me inflation is 3%. And I wish my stuff was up 3% only. Um, you know, like they just told my company that our health care costs are going to go up 30% next year. They like just wanted to warn us, right? And it's like healthcare and the CPI officially went down. They told me it went down and I want to buy some of that healthcare because it's cheaper than the one that I have, right? Um and look, we've been a successful hedge fund. We could afford to, you know, take care of our people. But I understand why if you're, you know, a low-inccome earner, you're getting squeezed on everything. Yeah. And then, you know, it's kind of gone up the cap structure. I don't know how you want to call it. Cap structure, probably the wrong word, but it's like middle- inome guys now are suffering. And I just see it like you start seeing it in restaurants. I mean, that's the most disposable. You see it in uh retailers. You see it in, you know, mall traffic. Like, that's all been falling off, but it started on on the low end and it's just been like going up the cap structure. I mean, it's kind of funny how you can look at like different restaurant brands and some of them been doing great and then some of them, you know, just had a freeze up in Q2, some had a freeze up in Q1. And it's just I mean, look, when does Chipotle ever have negative comps? Like it's it's kind of bizarre, you know, like some of this stuff is just starting where it's like, okay, these are middle- inome guys and they're like it's probably even like upper income guys working at an office and they're like, you know, $22 for burrito bow like that's getting a little pricey. I mean, I remember when those things were like six bucks. Yeah. And Yeah. No, they are getting expensive. I completely Well, you know, most that was co, but it's it they are expensive and things aren't going as well as they used to. And to your point that people have less money in their jeans. One of the things that we've talked about is the volatility of economic policies from the new administration. I'm trying to be politically correct here. I'll let you go do it because, you know, I I'm not even an American. So, and I definitely don't lean that way. So, but I'll let you tell people what you think about his policies and whether you think that money will be attracted to the US to build plants and that this is the way you encourage more capex in the US. So, what he's managed to do, I think, is destroy demand with tariffs and have no resulting capex except for data centers. Um, look, he said, "I'm going to support American automobile." and he puts a 25% tariff on every car. And then he goes, "Okay, Japanese guys, you get 15%." And all the Americans like Ford are like, "Hey, wait a second. Like, we're building the United States at 25% because all the parts come from Mexico, but like you guys in Japan get to send us a finished car." And like Ford's like, "Come on." And look, remember like a month ago, he's like, "Oh, all the copper has to be made in America." And the price of copper in the United States was like a $150 more than the global number. And so everyone producing anything in the United States is just like well I could pay you know what is it 30 40% more for copper domestically or I could buy copper internationally produce it internationally and then bring a finished product in at 20%. And you sure this I'm sure there's all these people inside these large companies looking at this and being like well these are the three options. Let's do it this way. And then he changes his mind. He's like oh we got to do it this way now. Like we had this one day where copper was down like like a$150 on a tweet. I mean, imagine someone is in the copper industry and they didn't properly hedge. I mean, I'm surprised you don't have some like metals trading firm blowing up on this. Like, someone ate a huge loss there. And then because and then you have everyone globally that has copper inventory to do the thing they need to do and they're like, "Oh, it's cheaper to do it in America now. Let's, you know, get rid of all this half finishedish product we're making in Mexico and do it here." And but as you can imagine, this is really disruptive. I mean, I was planning to build a copper mine and and then the next week you had to fl, you know, put your shelf your plans to build a copper mine. Yeah. Yeah. I mean, I was looking for copper at my fina in Puerto Rico. Uh, and so do you think that this is part of the reason that the economy is slowing? I think, you know, capex is a big piece of our economy, construction. I mean, you're seeing it in, you know, everything touching construction, but you're seeing it throughout everything because no one can make a policy decision. No one even knows what to do. Like, do you want to order a pair of jeans as a retailer? Well, which country do you think he's going to tariff next? I mean, do you do it in Malaysia? Do you do you do them in China? Do you do them in Vietnam? Like, by the time you get those jeans built and on a ship, he's probably changed his mind three times. Yeah, at some point you're just kind of like, nah, jeans are so last year. So, I think that if you kind of thought about what somebody that would be on the other side of this belief would say, they go, "Well, look, the economy, the US economy is doing well. Our stock market's at all-time highs. You don't know what you're talking about." What would you say to them? I've been on a couple hundred conference calls and CEOs are saying there's no demand. That's because no one can make a decision. You can't go to your board of directors because the board of directors going to say, "What do you think Trump does tomorrow?" And the CEO is going to be like, "Well, we really want to build this factory, but we don't really know which country to build it in because we don't know what the tariff rates going to be." And the board's going to say, "Come back next quarter when you have some more visibility." Right? And look, I think this approach is really great if you're uh trying to screw some subcontractor at your condo uh project and you want to cheat him on his tile contract and get 15% off him. You get him half pregnant. he starts doing all your tile work and then you throw him off the job and you know you try to arrest some of his employees for something and you just it's it's great if you really want to you know just squeeze that tile guy. Yeah. And Yeah. I mean like we're going out there and we're in a trade war and we're going to squeeze some guy in Madagascar who's making vanilla and we're going to really make that guy in Madagascar hurt and it's like okay there's the rest of this like $30 trillion economy that's also hurting but we're going to save a nickel on vanilla. You know it's like that's that's Trump's approach. Got it. Okay. So now let's go. We, you know, that's the fiscal side of the situation. Let's talk a little bit about the monetary side. We're taping this. I know I said it's Friday, but we're taping it on Thursday. And so we don't know what Jackson Hole is going to be. But what do you feel is happening there? Do you feel it's important? And uh, you know, what do you worry about from a monetary side of the equation? Well, I actually think monetary doesn't really matter as much anymore. I think fiscal is what drives everything. Um, and we're running it super hot on fiscal. I at the same time are running 7% fiscal and the economy's rolling and it means we're going to have like a 15% deficit when the recession hits next year. Um, look, I think Powell is very much in his right to do nothing because no one has any visibility on anything. No one knows if tariffs are inflationary or deflationary. No one really knows. You know, look, a bunch of data says inflation's accelerating. a bunch of data says that the economy is falling apart, like the employment data. I mean, no one really knows. And as a result, I think he's well within his right just to say, "Let's see how this plays out a couple more uh months." I think he's also well within his right if he wanted to cut rates. I think he's well within his rights if he wants to raise rates. I I think he has every option available to him because you could make the case that rates should be higher right now. I mean, I know no one even talks about that, but I just think no one really knows. And as a result, I think he's going to give it a wait and see. Um, and he's going to piss off Trump and, uh, that's life. Um, I mean, the economy falling apart is Trump's fault. Uh, I don't think it has anything to do with rates. Um, and I just don't know. I mean, what what do you think? Oh, well, when you said that the fact that monetary matters a lot less than folks realize, I I couldn't agree more. I do think that's really important that way. I I do also happen to agree with you that uh that there is a good case for him to be to be made that he shouldn't do anything. Uh let's face it, you know, he's still not at target. We're we're five years above target now. Yeah. Like we're two we're still 3% inflation. And and to everyone that's screaming at me saying that he should be lowering rates, I go like, ask yourself what Steven Moran and Scott Besson would be saying if Kla Harris was in was in power. I think that he would they would be saying the Fed is in danger of losing their credibility because they haven't achieved their target and they would be talking about higher rates. But like I I don't I don't think it matters as much as folks think. I I do worry about though conflict at the Fed in terms of between Trump and the Fed longer term damaging the financial US financial markets and in in essence increasing the term premium. So what I'm worried about is is a is a revolt at the long end of the bond market. And I think you and I are on the same p you know you know page there and that we both worry about that. Yeah. I I mean I've kind of overused my Africa meme, but this is Africa. Like I mean what you don't want your president and your Fed banker having a a battle, you know, in the news. Like it's just not really good for it's usually not good for interest rates. I mean, there's a reason that, you know, interest rates in Africa tend to be at a preview to our rates. I mean, their cost of capital is higher because, you know, it's Africa. Um, I'm embarrassed to say it, but I actually think the coming recession will be so nasty that the visceral and knee-jerk reaction amongst people will be to reach for bonds early in this process just because that's what's worked every other time and every other cycle. Um, I think it's a trade long bonds. I mean, I'm embarrassed to say it. I mean, I almost want to like puke in my own mouth, but I'm long some bonds. By the time you see this, I may be out of the trade, depending on what they say at Jackson Hole, but I actually think bonds can rally here because I think the recession is going to be so nasty. And I think that they're so boxed in. I mean, look, Kevin, when I coined the phrase Project Zimbabwe, I said it's going to go up and it's not going to really matter if the economy is good or bad. They just going to throw so much fiscal and monetary at it. And I remember you and I were in Canada at a huddle event and everyone told us how wrong we were and I'm and I'm telling you just like I do all this earnings call thing. I'm like look I talked to a lot of these management teams you know also you know off the call and they're like my backlog is growing everything's accelerating like we're hiring people and so like when you have a you know super tanker like this a big corporate doesn't just turn around. Yeah. Like you have visibility for two years out that things are going to be awesome. Yeah. And it was just obvious that we weren't gonna have a recession, that things were going to accelerate. And you said the same thing. And we were with a room of huddlers telling us that we're wrong. And now I feel like everyone gives me some variation on this. Uh, nothing stops this train. You know, nothing stops this train. And I don't mean to, you know, single anyone out. I mean, that's basically my phrase, except for I'm saying I think it's stopping, right? And I I don't really know what to think or say, but everyone's absolutely convinced that we're just going to go run it hot. And Trump's trying to run it hot. And I think people forget that when you run it hot, there's reasons why we don't just, you know, do Spinal Tap 11 full, you know, for that's not how you run an economy. And the reason for that is that eventually with with with unequal legs, uh there's side effects. Uh inflation is one of those. um you know your your cost of capital starts going up as I mean I think one of the reasons why bonds have sold off is that a lot of people are looking at other options they're saying I can get you know foreign change in a 10 or I can get inflation protected 10 owning you know some sort of US equity that's trading at 25 times earnings and you know paying me two in dividend plus two three in growth you know real growth and so I'm getting this inflation protected bond Plus, I'm getting a little bit of growth. You know, it's a better product. And I mean, you kind of have this weird crowding out of the, you know, equity market's crowding out. Um, bonds, I I I think you end up with a multiple compression, though, too, you know, because as bond rates go up, if you run it hot because the equities crowded out, you you start to get this multiple compression. I mean, we ran it hot throughout the 70s. Remember, you know, guns and butter. Guns and Yeah. Guns and butter. Yeah. Yeah. And I mean, look, everything traded at like high singledigit multiples. I mean, that's why private equity back when they actually did creative interesting stuff. They would buy these companies at seven times earnings and sell off divisions and move stuff around, made a lot of money doing it. But everything was seven times earnings because interest rates were higher and uh we were running it hot. Like getting from mid20s earnings down to seven, I mean that would break the world. Yes, it would really cause a lot of problems. All right, one last topic. I think that uh you highlighted that we should chat about is trading in a slump. Yeah. Uh and I'd love to, you know, you you penned something another blog that was very very wellreceived about uh the difficulties when things aren't going your way and uh just the human element. So, I'd love for you to kind of expand on that and talk about uh the challenges that portfolio managers and all investors face, right? I mean, look, uh to to preface this, you know, we're doing just fine. I mean, you know, we're actually up on the air. Um yeah, you are like I I must say I just just to set the stage uh uh like uh clear here, Cupy will be the kind of guy who'll be bitching about how he's not doing well and then I ask him and I'll be like, "What the hell are you complaining about, buddy?" like it's like you're still better than most people like you know this is terrific. Uh anyway, so so I'll just completely say that like when when you when when CPY is getting mad at himself, it doesn't mean that he's actually like had a bad year in terms of like how most people think about their bad years. He's just very hard on himself. Look, I set really high expectations for myself. This is a hobby. It's a business. It's it's just, you know, a point of personal pride. I want It's your life passion. Yes. Yes. and I don't feel like I'm doing as well as I should be this year and I think you say the same for the last couple years and you know eventually it kind of you know gets to you like why am what am I doing wrong what am I missing I think you know you do a lot of introspection I mean the first step is when it's not working you kind of pull back you know you just pull back all the marginal positions you don't want right um all those little things that are distractions and you start going through the core book and you kind of say why do we own this what do we really think what's really happening here. It's super helpful just to go away for a month and just do something else. I mean, focus on your eating and your drinking and maybe some tourism and you know, it's just like this is a cleansing thing. And I think, you know, it's weird in this industry because everyone on Twitter is doing victory laps about everything, but if these guys were all so good, they'd all be in PJs and they're not. I mean, they're they're selling you newsletters because they really need the $100 subscription. That's right. They're they're in PJs. It's just not their private jets. They're in their pajamas. Yeah, they're in grandma's house. Um, and so, you know, but there's this culture in our industry to never admit they're kind of not hitting it as hard as you should be. And I think as a result, there's a lot of people that don't really know how to fix themselves. And I've seen friends totally self-destruct where they just start trading bigger and harder, and that's the wrong thing to do. You know, I've seen a lot of things where you almost need to have an intervention on the guy. I mean, for me, I think it's just it's important to step away and just look at what's not working and why. I tend to be a guy that owns um these sort of smidcap things that tend to be tied to the economy. You know, I I do well when GDP is growing and I don't do so well because I don't short uh when GDP is negative. And I think that the GDP, you know, Xtech and X AI is probably negative. And it's probably been negative for over a year now, right? I think, you know, when you take a step back and you're just kind of like, why is my stuff not working? Well, we're in a recession. And stupid me, I'm looking at the S&P and I'm not realizing we're in a recession. I mean, even they tricked me. Um, and it really took to this earnings co this season's earnings calls where I'm like, "Wow, it's brutal out there, right? It's hard." I think the other really hard thing about this and it's really, I think, important is a lot of the time there's nothing to do and we all want there to be something to do and we all want there to be something we're really passionate about. We all want to be, you know, 130 long and, you know, just talking about your favorite things. Look, Buffett got to be really, really rich because he sits on cash and about once every 10 years, guys come to him for capital and he disperses it and makes a lot of money. I mean, I'm not Buffett, but I can sit on cash also. And about every 5 to 10 years, the world almost dies and about every 18 months, some sector dies. And there's plenty of opportunity. You have to have cash when that comes. And I think the hardest thing I've ever seen because when I had with my own personal money, I would just sit in cash. The hardest thing possible is to run a hedge fund and LPs call you up. So what are we doing today? Ah, I went to the farm. I got a good surf in. Like I mean, I don't want people to think I'm not working because I'm working my ass off. I'm building an inventory of stuff I want to buy in six to 18 months, right? Then you have employees. They want to put names on the book. And there's all these things and I didn't realize how hard it is to do this at an institutional level as opposed to a private level. Well, for you, you know, it's hard at an institutional level, but it's even hard at a private level. Like, you know, what's the the line about there's nothing harder than watching your neighbor get rich. And that's in essence what's happening right now. Um I I just when you said that, there's so many great investors that that just immediately sprung to my mind. Um, like what was the Marco wizard guy that said something to the effect of I just sit around waiting for there would be money in line there in the corner and I go pick it up. I think it might have been Jim Rogers. Yeah, something like that. Yeah. And then the other one I remember specifically is Byron W. No, Barton Bigs. One of the two. Barton Biggs and Soros were chatting and uh it must, you know, I'm thinking it's Byron Wayne now that I'm thinking about it. And Byron said something, you know, Soros says, 'Why are you in a at work today? Like, and and Byron's like,"Well, you know, what do you mean, why am I in a work today? I work every day." And he goes, "Well, there's nothing going on. There's nothing to do." Soros says, and uh you know, Byron says, "The difference between me and you, George, is that you know when there's nothing to do, right?" and and and the kind of implicit uh our you know wisdom in that was there was lots of times when there is nothing to do and you just need to wait. Yeah. And yes and waiting is really really hard. Look there's a ton of cheap stocks I want to buy. I think they're going to get cheaper. I think there's a lot of things. I mean look event driven is great. I give a quick plug to ketam kedm.com. Goh take a trial. I think there's always stuff to do in event driven because corporate actions are their own special thing idiosyncratic to the world but the stuff I do tailwind investing there's not a lot of tailwinds so not don't force it yeah got it okay listen I'm going to spring something on you I hope you're not going to be upset about this uh since you haven't been on in a while and you're not especially not as like a proper guest um my recent things that I ask everyone is the the desert island investing Okay. And so with the desert island investing, what it is, you're allowed three albums or three bands and then one trader slash portfolio manager from history. And it's just going to be you, the three the trader and the three albums. So I hope you're okay with this. First of all, the three bands. What are your three bands you would take to the desert island? Oh, I'd probably take like I don't know was like Zeppelin or something. Okay. Zeppelin. Good choice. I don't know. Maybe like like uh Government Mule or something. A little hip. Almonds. I don't know. Something like that. What is Government Mule? Is that what you said? Yeah. Yeah. It's like an almond spin-off band. This is You're going to the desert island and you're taking Government Mule. Okay. Anything else? No, that's it. I'll take the Almond. Okay. The Almond Brothers. Is that what you're saying? All right. I probably have tick to something angry. Probably like Metallica or Nirvana or something to kind of balance out a hippie. I'm actually surprised at how many traders so far have said like hard metal rock. Like it really actually is kind of shocking to me how I traders must be an angry bunch. Okay, now you ever have a bad day and you just put like Rob Street on you and uh the guy from Big Short, Christian Bale's character. Um, okay. So, now the trader, you're not allowed to pick uh somebody that's already been picked. And so far, Ed Thorp and Ducken Miller have been picked. So, you got to pick somebody other than Draen Miller or Ed Thorp. I I think I'd take Mark Faber. He's just the most interesting man alive. He is the most interesting man alive. I mean, we did at Ketum. We did a Ketum happy hour. I think it was like 4:00 a.m. in Shiang Mai and he's like Shane smoking and drinking a bourbon or something. I'm just going to leave that. I'm not say anything to that. I just Good old Guppy could have picked Mark Favor. Okay. You know what the good news about picking Mark Favor is? I I think you're going to be alone in picking that. But if you're going to be on an island for a long time, he's really one of the most fascinating humans alive. Okay. Well, there you go. Harris, it's been a real pleasure having you on. Why don't you tell people where they can find your blog? Cuz they should all sign up for your blog. It's free. It's terrific. You've been knocking out of the park. Tell them about your blog. Tell them about your Twitter account or your ex account, whatever it's called, and tell them about uh for potential investors uh where they can reach out to learn more about your friend from my blog. Go to pray.com, P R A P. Uh sign up for the the blog. I mean, drop our email. We're not going to spam you or anything. And uh if you go to the blog, there's also somewhere on that website a way to reach out to uh the investment relations guy Nick at my fund and he'll tell you about our fund and how great we're doing. Um for X, uh go tohcuppy.com. Uh I hope you have some thick skin though because I'll find a way to offend everyone eventually. Um and uh yeah, that that's oh kedm.com. Oh yeah, that's right. And that's our event driven newsletter. Okay, great. Well, CPY, it's great having you on. Thank you very much for taking the time to share this with us. Hey, thanks for having me on as a bear for once. That's true. Human blue cells. That's right. Dum cells. Okay. Thanks again, bud.
DOOM AND GLOOM SELLS (Guest: Kuppy)
Summary
Transcript
It's Friday, August 22nd, 2025. It's episode 271. I'm Kevin Mure, and I got no Patrick, but I got something even better. I got Harris Kupperman, aka Cuppy. Thanks for coming on, buddy. Hey, thanks for inviting me. It's been a while. Yeah, it has been a long time since you and I have chatted. And the reason I uh reached out to you and invited you on the show was because you recently wrote an absolutely terrific blog post that Oh, thanks. It just absolutely it was it was just it really spoke to me. And but before we talk about that, I wanted to talk about one of your tweets that went viral recently. Oh god. Which one? I'm terrified. Yeah. No, the one where the day in the life of a hedge fund trader and it was for those who don't know, go go find it on uh Harris's uh Twitter account or exac account. I don't know what I'm supposed to call it these days, but it was it was funny. It was hilarious and I think it really resonated with folks because it was it felt so real. Why don't you tell people just kind of briefly what it was about? Well, basically I wake up and then about every 10 minutes, Trump distracts me from what I'm trying to actually do, including, you know, research, talk to LPS, uh, talk to my wife, make my coffee, and he just randomly does stuff and the market moves, you know, 100 handles, and as soon as he's said something, you know, he said something because the market's moved. And then you scroll through X as fast you can to figure out what he said. And then you're either in sheer panic because it impacts one of your positions or you're like it might let me think about this a little or you're like thank god you know it's someone else getting screwed this time and then about 10 minutes later he usually changes his mind and it just goes back the other direction and I don't know like I used to be a really productive guy. I mean Joe Biden would wake up at noon he like you know he like give a press conference we kind of wandered off the middle and he shook hands with the cloud and it was great right it was super productive. I can sit there and read footnotes in a 10K and now I can't look away for three seconds because I don't know what Trump's going to do next. Yeah, it really was. It was really funny and uh I can't tell you the number of folks that sent it to me saying, "Wow, this just really truly feels like my day every single day." So, for anyone who's interested, go have a look at his Twitter account. But the real reason I am I got you on is because you wrote this piece saying Global Crossing is reborn. Uh, and I guess let's just start with what was Global Crossing for those who don't know, you know, like you you I'm actually surprised you remember Global Crossing because you're you're a younger guy. You're a millennial. Um, I'm surprised that you know that story, but why don't you let's just start with that. What was Global Crossing and why do you think that uh this resembles that? Well, Global Crossing was it's kind of a catch-all for a number of companies. you know, you could like lump Quest and like all these other companies in there. And these guys looked at the internet happening and they did this math that, you know, data usage is going to double every 3 months or something because that's the rate it had been going at. Yeah. This is in the late 90s, you know. Yep. But it's from a super low base, right? And they said, "Okay, let's build the next 25 years of fiber demand today because, you know, but I mean there's a certain logic to it. Like if you're gonna lay a fiber across the ocean, why not lay a really big fat pipe instead of lots of little pipes, right? The the problem is it's really expensive up front. And what turned out to happen is that while data demand grew a ton, it didn't grow as fast as anyone thought. And they all funded it with like jump bonds. And then when the revenue wasn't there, these things all collapsed. And guys bought the pieces at pennies on the dollar and they made a fortune actually. But it took another 20 years to fill the pipes. Some of those pipes are still dark now 25 years later, which is Is that true? I didn't know that. Yeah, some of the pipes are still dark or they're at half usage. And I think the other really interesting thing that people don't talk about is that in inflationadjusted dollars, uh, telecom spending peaked in in revenue in in the early 2000s. And as a result, I mean, despite the fact that I'm on my cell phone, you know, 19 hours a day, um, revenue to the global telecom industry has actually been shrinking in inflation adjusted terms. Uh, not not per megabyte, but but just total revenues. Oh, I had no idea about that. Well, you have uh you have businesses with super high fixed costs and they're fighting over incremental revenue dollar. As a result, they're in this never- ending price battle to gain customers and they're sort of uh just just competing the margins down to zero. Okay. And so tell us why you think that um this provides a roadmap for for us to think about at the very least when it comes to the current environment with AI. Well, I mean AI and I want to just preface this by saying like AI is going to be the future. I totally understand this. I'm not against AI. Um I'm not even against people building data centers because I mean I use AI and I mean this is like when they gave you free Uber rides to get you to use Uber. It was great. You know there's some VC somewhere that subsidized you know my lifestyle for a decade. It was great. And this is kind of how AI is, right? I mean I paid nothing for AI but AI gives me all these things back. And in the end, um, it's really a commodity product, especially at at the level that I'm going to be using it as, which is glorified search. Um, it's a commoditized product. they're gonna compete uh down to zero in terms of uh revenue and they're gonna fight over me as a customer and all my friends and they're gonna keep offering me more stuff and you know I'll be a perplexity guy some weeks and then you know Grock will get incrementally better and I'll go there and then I'm on chat GBT and they're just going to have to spend endless money to get me as a customer that pays no revenue and they won't ever have a way to monetize me and they're gonna have to keep building more and more data centers because I'm just going to keep building more and more memes and you No, but there's some like family in Arkansas that's trying to run their air conditioner right now and they can't because I'm making a meme here in Puerto Rico. Like, sorry. I mean, I actually did this kind of wrong. Like, uh, you know, electricity bills around the country are going up because, uh, AI is raising the price of electricity for residents. It's like this weird encroachment. Uh but anyway, you know, in broad numbers, and I'm sure there's people who will criticize me on this, you know, I wrote this blog post. I said that they're going to spend about $400 billion this year. And you know, if you assume a 10-year depreciation curve, they need 40 billion of revenue, right? Uh just to cover depreciation, but revenue it's like that's making no money. That's just covering their costs like in a right to get their money back with no return. But revenue is 15 to 20 billion now. And like we we all agree revenue is understated today because they're subsidizing it and they're trying to get you engaged in it and I get that. But I mean revenue doesn't cover depreciation. And then if you assume there's a 25% gross margin and the gross margin right now is highly negative, you know. So on top of the depreciation, you have super negative gross margin here. But the gross margin uh even if you get to like 25% which is kind of crazy when because when you look at you know other competing things like Bitcoin mining, it has negative gross margin still. Um and so but if you get this thing to a 25 margin and you work backwards um you you're going to need um you know 160 billion of revenue right to uh get this thing because you know that gets you to at 25% margin that gets you to 40 billion of gross margin that gets you to break even in this thing 160 billion of revenue and then I I kind of looked at this and I said okay what are some really big subscriptiony things and you know even Microsoft Office is like less than 100 billion and everyone's on Microsoft Office, right? Yeah. Netflix is like in the 30s or 40s. I don't have the the thing in front of me, but like and everyone's on Netflix. Like there's 300 million people on the thing. And it just makes you realize how uh I just wanted to work backwards. You know, everyone keeps telling me, oh, you know, just give it six more months and then AI will be better. Yes, it will be better, but I try to work backwards and say, how much revenue does it need? Because like it doesn't like AI doesn't prosper on me making memes. It prospers on revenue at some point. and you need 160 billion and then you start saying okay if you want to earn like a return on your capital of 20% well then you need like a half trillion and I'm not saying like AI has to eventually get to a half trillion to be profitable or have a 20% return on capital which is kind of what you'd want for like a capital intensive infrastructure asset unlevered when when you have you know huge obsolescence risk and everything else but that's just for the 2025 buildout and they're talking about next year like like doubling the the pace of buildout that. So maybe next year you need like a trillion and then you see you're like okay so for what the capital you're going to spend in 25 and 26 you need a trillion and a half dollars and like they're at 15 billion now and then you kind of like well the government you know the they love spying on people but like the whole defense department like that's like a trillion dollars and like we're talking about trillion five like it's bigger than the defense department and the defense department still needs like aircraft carriers and stuff like it just doesn't square right And then, you know, one of the great things about, you know, the position I'm in, and I'm super lucky, is I have a ton of people that are really smarter than me and they're really grateful with their time. And, you know, I always get emails back and some of the emails are like, "Cuppy, you don't get it. Like, AI is the future." And I'm like, "No, I get that." But you have some people who write back and they're like, "Actually, Cupy, you you're not um bearish enough or jaded enough." is like, you know, I work in an AI startup and, you know, we we have, you know, no revenue and we have like a 10 billion valuation and my only goal in life is can we limp this 30 more days and get it into a spack because we don't see how we ever get to profitable. We're not even like we're at negative revenue. We don't know how this works and like like but people keep tell us it's worth 10 billion. And it's like one of the the real push backs I got and I always appreciate push back is they said, "Cuppy, it's not a 10-year depreciation curve. It's more like five." And I'm like, "What do you mean it's more like five?" I have this one guy and he works at at a big data center. He's like, "Look, they're changing things so fast on us. One, you're saying the chips last three to five years." He's like, "No, one to two years." He's like, "As the chips right now that are getting ordered from Nvidia, by the time they show up in the warehouse and then they're put into the racks and they're all engaged, it's already an obsolete piece of equipment. Like that cycle of just turning it around and ordering, he's like like these things are 18 months." And then he goes, you know, you're thinking like the the cooling system, the electrical system, and the racking system. That's 10 years because I mean, I don't know, an air conditioner at my house lasts 10 years. Like, I don't really know. He goes, "No, didn't you see what Kimoras just did? They just created this new coolant. And the new coolant means we need to do all of our flooding systems and all of our racking systems different. We get to cool it like 20% more." And then like there'll be some other guy with a different coolant that does. And it's like if when you have the one of these data centers, it's designed in a way that you can't just like pull up all the piping. The piping is in the floor. Like it's literally cheaper to demolish the entire data center and start again because you know you're going to have different dimensions. You're going to have different this, different that. But the technology is evolving on power, cooling, everything else just as fast as it is evolving on chips. He's like, maybe your other stuff is five years. And so you take my 1.5 trillion number and you take the depreation depreciation and you jack it up a little. What if it's three trillion dollars you need? Like right I mean it's such big numbers. It's like okay 10% of the economy will no longer be spent on food or clothing or you know it's just going to be me making memes. Like I don't know. But isn't the real problem like they're spending this and they're going to lose all this money because there won't be the revenue and it's actually it hasn't it reached a point where we should be worried about it as like a systemic risk to the economy. Yes. I I think there's a couple things like look you can look back at like railroads, okay? Like it was this really cool thing that the United States did. that integrated the entire country and they started building some of these railroads and it was the fourth or fifth guy who finally got to actually operate it, you know? Right. It's like restaurants like you never you never make money the first guy with the restaurant. It's always the the third guy who buys the restaurant fully furnished and stuff that makes all the money. Yes. Yes. And with railroads it's even worse. You just keep putting capital in until you finish the thing. Like there is no revenue. Like you can't get from you know the farm field to New York to export it. Like and so this is very much like that. And eventually, you know, some guy buys it at pennies on the dollar, completes it, and then he makes a lot of money. It's like the Global Crossing, guys, right? I think what's really interesting here is if you just look at this year, we're going to put uh 400 billion in. I think everyone kind of agrees that's roughly the number. You add in a bit of R&D, you add in a bit of, you know, corporate overheads and SGNA and everything else. Am I wrong to say this is like one and a half percent of the US GDP? And that's not including any of the downstream effects, you know, and there's a multiplier in this obviously. Yeah. Um so maybe you're at two two and a half% of GDP. And then I don't think people appreciate the wealth effect. Like we always talk about, you know, interest rates and QE QT and you were super early Kevin in realizing that uh fiscal is so much bigger than monetary. Um but I think uh wealth effect is even bigger than monetary. Yes. You know, I see it in friends of mine. I know. I see it in my parents like they're retired. They have no more revenue coming in and they have to live on their savings except for my dad's invested in a house, the S&P and my hedge fund. He's doing well at all three. And you know, it's just like I'm like, "Dad, you're going to Europe again?" Like, he's like, "Yeah, have you seen my S&Ps? They just keep going up." I'm like, "But and he's like he doesn't even sell any S&Ps. He he doesn't even sell the house. He he actually has one of these negative advertisingy things where I mean his LTV on the house is actually going down even though he can't spend the money fast enough and it's not even like a super nice house. It's like an upper middle class house. It's just like every time he takes money out like it appreciates more and the LTV keeps dropping. And so you have this wealth effect and I think that if Nvidia well basically Mag 7 because you could ignore the other 493 those never go up. Um, you just take Nvidia, you just take Max 7 and Bitcoin and if those ever go down and those Max 7 are all tied to AI. If those ever go down, the wealth effect goes in reverse. I we just said I just said that maybe AI is 200 pips of GDP this year going on like 400 bips next year, but the wealth effect is probably, you know, a couple hundred bits more. I mean, let's say the the the com combination of the AI bubble plus, you know, the actual capex plus the downstream. Maybe that's 500 pips this year of GDP where when you look at that, you're like, we're in a recession outside of that. And then if you look at the rest of the stocks in the market, you'd be like, huh, the US kind of is in a recession and I want to talk about that after. But then it's like, so next year it's supposed to be like seven to a thousand bits of GDP. Like these are huge numbers. And I mean, you you kind of call on some of my numbers. And yeah, I'm probably being a little bit, you know, flamboyant with how I approach these numbers, but I don't think I'm I'm off by basis points. I'm not off, you know, directionally. We're having an epic bubble in Mag 7 and wealth effect all tied to AI, which everyone says is the future. Yet, the people inside of AI, and I had about 10 people reach out to me tell me that it's not the future, and they all went out. Um, they I don't know. You're being a little hyperbolic there, aren't you? They're not saying it's not the future. They're just saying that the pricing is never going to be able to achieve what what's priced in now. Is that not what they're saying? Look, I have a farm. Uh, it occasionally produces an avocado or, you know, a mango. It's not going to be a profitable farm. Therefore, it has no economic value. And look, I get a lot of enjoyment out of going to my farm. It's great exercise. Every once in a while, I bring something home to my wife and she's amazed I produce something. But like if you were to approach my farm and you wanted to put it into a farmland re, they wouldn't give me a lot of money for it because it doesn't produce much of anything. And you know, my farm is very well suited to uh go back into jungle. And probably when I get bored of my farm, it'll return to jungle. And I think that's how we can save a lot of these data centers at some point in the future because the technology advances so far whereas like fiber hasn't advanced. So the old uh uh global crossing pipes still work when the data center of the future needs to be 10 feet taller or wider or something else. Well, that is a total writeoff. It's like my farm. They're basically saying like our AI startups on one hand is worth 10 billion and we're raising as much equity as fast we can. On the other hand, we we just can't figure out how to cash out fast enough, right? We know the music's about to stop. Okay. Uh and and I just before we go on about this wealth effect, I you're the one that's always, you know, reminding me, you say that in the old days, recessions cause stocks to go down. And he say, you know, stocks going down cause recessions. And I think that's a great line. Yeah. But did I say that? That sounds too uh Yeah. No, that was definitely you. You're the one who to tell me that. I'm kind of proud of myself. I must have been drunk. No, you're the one that tell me that. You know, and I'm not sure I'm completely on board, but I'm I'm definitely open to the possibility. And I think that the wealth effect is often underestimated. Okay. So now you're you're looking at this macro setup and you're you're worried about AI and that's a trade on its own, but you're also worried about the economy and you kind of alluded to it when you said that uh all the growth is in the AI and then the rest of the economy is doing badly. Can you expand on that and explain where you're thinking from that perspective right now? Well, I mean supposedly the statistic right now is that AI growth is faster than uh the growth of the the consumption economy. the service economy which is like 70s something percent of the economy. You know this this little 1% piece of the economy is growing faster than the rest of it. Uh which is kind of you know the first clue something's misbalanced in our economy. Um 10% of uh Americans are half of our spending now. Um and I bet that's even you know narrower. It's probably the top 1% that are a good chunk of that. Um the 1% they don't earn money from jobs. Well they do but they get you know 50% tax rate on that. So you can't really put much money in your pocket. They earn money because they have assets and the assets go up and you can borrow against those assets taxree and or you sell those assets to some other idiot. And as a result, you know, the wealth effect is such a big piece of the economy. And I I think people don't appreciate that if stocks go down, people stop spending. And I think it's almost immediate. You know, guys, they're like, maybe I don't want to spend a thousand bucks on dinner. or if we're going out to dinner, let's go get a cheap wine instead of the really fancy stuff. You know, it it happens really fast and there's a feedback loop to this. And I mean, we saw this in uh when we had that little slowdown in 22 and all the consumption numbers just collapsed. Even though the government was doing huge fiscal and we're doing infrastructure and all the states were flushed with money and like the middle class, they they were just going crazy. But, you know, NASDAQ came off and big ticket items just went no bid. And it it just shows you how tied to uh NASDAQ it is. But I really do think the US economy is slowing. Um, you know, I'm one of those believers that, you know, there's the real economy and there's a tech economy and that the tech VC economy exists in its own little bubble in San Francisco and they have no idea how anything works and they don't really care how anything works. And then you have the rest of the economy that uses things like plastic. And so you look at you know what are the prices of like uh methanol and napa and you know you go through you know ti2 and chloralkine. You go through all these things that are like precursor chemicals that then go downstream and get specialized and eventually end up in some product in your house and they're all no bid. And then, you know, look, I guess you know, oil's a bit, you know, political and the Saudis are producing a bit more. But, I mean, oil's kind of no bit. It's it's it's just been in freef fall and so is lumber and you just like start looking around the world at all the stuff that goes into stuff and you're like, huh, you know, the there's a big chunk of the economy that's just freezing up. And you look at a lot of the stocks, you know, the 493 as we call them, but a lot of those are still kind of, you know, buoied a bit by uh passive flow. But if you go to something like like the S&P 600, which these are companies a billion to five billion market cap, they tend to be regional banks which aren't really doing that great or they tend to be, you know, industrial things or they tend to be basic material that you have less of your tech stuff in there. These things are suffering. I mean, these stocks haven't really gone anywhere in almost a decade now. I mean, they they finally had some excess earnings in uh 202122 and then it all just went away and now they're b back to, you know, earning no money. And I just think the economy is really quite slow, but people don't realize it because everyone looks at the stock market and the seven stocks going up and everyone's like, "Oh, cool. Everything's great." And I mean, the employment numbers are okay. It's kind of rolling over now. I think we're setting up for a nasty recession. I mean, Kev, you and I talk about this a lot. I mean, I think it's be bad. I mean, how do you see it? Well, I I'm completely in your boat, your boat here. And the thing I I like when I talk to you is I'm sitting around looking at the macro numbers trying to come up with reasons why I think the economy is slowing. And you'll come to me and you'll say, Kev, I just on with another conference call and like again, no demand falling off a cliff. and and you'll and you'll have all these examples of like real world stuff that is rolling over and that's why I love talking to you because you are getting on those conference calls and you are listening to them and why don't you just tell people about those conference calls and how you know despondent they are because that is like there's nothing else to describe them right they're just not good it's like a funeral I mean look I probably listen to 300 of these calls uh I like tone you I read transcripts, too. I mean, earnings, the two weeks of earnings, I just don't sleep. Um, this reminds me a lot of summer of08 where like everything went no bid in the economy and the stock market was still pretty bid and everyone's like everything's fine, you know, and it's just like no one has to pay their mortgage. Look, everything's fine. The stock market's up, you know, and like there's a demand problem right now in the economy. Um, it started last year on lower income. And the issue is that I I really do think inflation's higher than what it's been stated at. And I mean, there's a billion people that could tell you, you know, the wise and how. I I'm just a human that lives. And they tell me inflation is 3%. And I wish my stuff was up 3% only. Um, you know, like they just told my company that our health care costs are going to go up 30% next year. They like just wanted to warn us, right? And it's like healthcare and the CPI officially went down. They told me it went down and I want to buy some of that healthcare because it's cheaper than the one that I have, right? Um and look, we've been a successful hedge fund. We could afford to, you know, take care of our people. But I understand why if you're, you know, a low-inccome earner, you're getting squeezed on everything. Yeah. And then, you know, it's kind of gone up the cap structure. I don't know how you want to call it. Cap structure, probably the wrong word, but it's like middle- inome guys now are suffering. And I just see it like you start seeing it in restaurants. I mean, that's the most disposable. You see it in uh retailers. You see it in, you know, mall traffic. Like, that's all been falling off, but it started on on the low end and it's just been like going up the cap structure. I mean, it's kind of funny how you can look at like different restaurant brands and some of them been doing great and then some of them, you know, just had a freeze up in Q2, some had a freeze up in Q1. And it's just I mean, look, when does Chipotle ever have negative comps? Like it's it's kind of bizarre, you know, like some of this stuff is just starting where it's like, okay, these are middle- inome guys and they're like it's probably even like upper income guys working at an office and they're like, you know, $22 for burrito bow like that's getting a little pricey. I mean, I remember when those things were like six bucks. Yeah. And Yeah. No, they are getting expensive. I completely Well, you know, most that was co, but it's it they are expensive and things aren't going as well as they used to. And to your point that people have less money in their jeans. One of the things that we've talked about is the volatility of economic policies from the new administration. I'm trying to be politically correct here. I'll let you go do it because, you know, I I'm not even an American. So, and I definitely don't lean that way. So, but I'll let you tell people what you think about his policies and whether you think that money will be attracted to the US to build plants and that this is the way you encourage more capex in the US. So, what he's managed to do, I think, is destroy demand with tariffs and have no resulting capex except for data centers. Um, look, he said, "I'm going to support American automobile." and he puts a 25% tariff on every car. And then he goes, "Okay, Japanese guys, you get 15%." And all the Americans like Ford are like, "Hey, wait a second. Like, we're building the United States at 25% because all the parts come from Mexico, but like you guys in Japan get to send us a finished car." And like Ford's like, "Come on." And look, remember like a month ago, he's like, "Oh, all the copper has to be made in America." And the price of copper in the United States was like a $150 more than the global number. And so everyone producing anything in the United States is just like well I could pay you know what is it 30 40% more for copper domestically or I could buy copper internationally produce it internationally and then bring a finished product in at 20%. And you sure this I'm sure there's all these people inside these large companies looking at this and being like well these are the three options. Let's do it this way. And then he changes his mind. He's like oh we got to do it this way now. Like we had this one day where copper was down like like a$150 on a tweet. I mean, imagine someone is in the copper industry and they didn't properly hedge. I mean, I'm surprised you don't have some like metals trading firm blowing up on this. Like, someone ate a huge loss there. And then because and then you have everyone globally that has copper inventory to do the thing they need to do and they're like, "Oh, it's cheaper to do it in America now. Let's, you know, get rid of all this half finishedish product we're making in Mexico and do it here." And but as you can imagine, this is really disruptive. I mean, I was planning to build a copper mine and and then the next week you had to fl, you know, put your shelf your plans to build a copper mine. Yeah. Yeah. I mean, I was looking for copper at my fina in Puerto Rico. Uh, and so do you think that this is part of the reason that the economy is slowing? I think, you know, capex is a big piece of our economy, construction. I mean, you're seeing it in, you know, everything touching construction, but you're seeing it throughout everything because no one can make a policy decision. No one even knows what to do. Like, do you want to order a pair of jeans as a retailer? Well, which country do you think he's going to tariff next? I mean, do you do it in Malaysia? Do you do you do them in China? Do you do them in Vietnam? Like, by the time you get those jeans built and on a ship, he's probably changed his mind three times. Yeah, at some point you're just kind of like, nah, jeans are so last year. So, I think that if you kind of thought about what somebody that would be on the other side of this belief would say, they go, "Well, look, the economy, the US economy is doing well. Our stock market's at all-time highs. You don't know what you're talking about." What would you say to them? I've been on a couple hundred conference calls and CEOs are saying there's no demand. That's because no one can make a decision. You can't go to your board of directors because the board of directors going to say, "What do you think Trump does tomorrow?" And the CEO is going to be like, "Well, we really want to build this factory, but we don't really know which country to build it in because we don't know what the tariff rates going to be." And the board's going to say, "Come back next quarter when you have some more visibility." Right? And look, I think this approach is really great if you're uh trying to screw some subcontractor at your condo uh project and you want to cheat him on his tile contract and get 15% off him. You get him half pregnant. he starts doing all your tile work and then you throw him off the job and you know you try to arrest some of his employees for something and you just it's it's great if you really want to you know just squeeze that tile guy. Yeah. And Yeah. I mean like we're going out there and we're in a trade war and we're going to squeeze some guy in Madagascar who's making vanilla and we're going to really make that guy in Madagascar hurt and it's like okay there's the rest of this like $30 trillion economy that's also hurting but we're going to save a nickel on vanilla. You know it's like that's that's Trump's approach. Got it. Okay. So now let's go. We, you know, that's the fiscal side of the situation. Let's talk a little bit about the monetary side. We're taping this. I know I said it's Friday, but we're taping it on Thursday. And so we don't know what Jackson Hole is going to be. But what do you feel is happening there? Do you feel it's important? And uh, you know, what do you worry about from a monetary side of the equation? Well, I actually think monetary doesn't really matter as much anymore. I think fiscal is what drives everything. Um, and we're running it super hot on fiscal. I at the same time are running 7% fiscal and the economy's rolling and it means we're going to have like a 15% deficit when the recession hits next year. Um, look, I think Powell is very much in his right to do nothing because no one has any visibility on anything. No one knows if tariffs are inflationary or deflationary. No one really knows. You know, look, a bunch of data says inflation's accelerating. a bunch of data says that the economy is falling apart, like the employment data. I mean, no one really knows. And as a result, I think he's well within his right just to say, "Let's see how this plays out a couple more uh months." I think he's also well within his right if he wanted to cut rates. I think he's well within his rights if he wants to raise rates. I I think he has every option available to him because you could make the case that rates should be higher right now. I mean, I know no one even talks about that, but I just think no one really knows. And as a result, I think he's going to give it a wait and see. Um, and he's going to piss off Trump and, uh, that's life. Um, I mean, the economy falling apart is Trump's fault. Uh, I don't think it has anything to do with rates. Um, and I just don't know. I mean, what what do you think? Oh, well, when you said that the fact that monetary matters a lot less than folks realize, I I couldn't agree more. I do think that's really important that way. I I do also happen to agree with you that uh that there is a good case for him to be to be made that he shouldn't do anything. Uh let's face it, you know, he's still not at target. We're we're five years above target now. Yeah. Like we're two we're still 3% inflation. And and to everyone that's screaming at me saying that he should be lowering rates, I go like, ask yourself what Steven Moran and Scott Besson would be saying if Kla Harris was in was in power. I think that he would they would be saying the Fed is in danger of losing their credibility because they haven't achieved their target and they would be talking about higher rates. But like I I don't I don't think it matters as much as folks think. I I do worry about though conflict at the Fed in terms of between Trump and the Fed longer term damaging the financial US financial markets and in in essence increasing the term premium. So what I'm worried about is is a is a revolt at the long end of the bond market. And I think you and I are on the same p you know you know page there and that we both worry about that. Yeah. I I mean I've kind of overused my Africa meme, but this is Africa. Like I mean what you don't want your president and your Fed banker having a a battle, you know, in the news. Like it's just not really good for it's usually not good for interest rates. I mean, there's a reason that, you know, interest rates in Africa tend to be at a preview to our rates. I mean, their cost of capital is higher because, you know, it's Africa. Um, I'm embarrassed to say it, but I actually think the coming recession will be so nasty that the visceral and knee-jerk reaction amongst people will be to reach for bonds early in this process just because that's what's worked every other time and every other cycle. Um, I think it's a trade long bonds. I mean, I'm embarrassed to say it. I mean, I almost want to like puke in my own mouth, but I'm long some bonds. By the time you see this, I may be out of the trade, depending on what they say at Jackson Hole, but I actually think bonds can rally here because I think the recession is going to be so nasty. And I think that they're so boxed in. I mean, look, Kevin, when I coined the phrase Project Zimbabwe, I said it's going to go up and it's not going to really matter if the economy is good or bad. They just going to throw so much fiscal and monetary at it. And I remember you and I were in Canada at a huddle event and everyone told us how wrong we were and I'm and I'm telling you just like I do all this earnings call thing. I'm like look I talked to a lot of these management teams you know also you know off the call and they're like my backlog is growing everything's accelerating like we're hiring people and so like when you have a you know super tanker like this a big corporate doesn't just turn around. Yeah. Like you have visibility for two years out that things are going to be awesome. Yeah. And it was just obvious that we weren't gonna have a recession, that things were going to accelerate. And you said the same thing. And we were with a room of huddlers telling us that we're wrong. And now I feel like everyone gives me some variation on this. Uh, nothing stops this train. You know, nothing stops this train. And I don't mean to, you know, single anyone out. I mean, that's basically my phrase, except for I'm saying I think it's stopping, right? And I I don't really know what to think or say, but everyone's absolutely convinced that we're just going to go run it hot. And Trump's trying to run it hot. And I think people forget that when you run it hot, there's reasons why we don't just, you know, do Spinal Tap 11 full, you know, for that's not how you run an economy. And the reason for that is that eventually with with with unequal legs, uh there's side effects. Uh inflation is one of those. um you know your your cost of capital starts going up as I mean I think one of the reasons why bonds have sold off is that a lot of people are looking at other options they're saying I can get you know foreign change in a 10 or I can get inflation protected 10 owning you know some sort of US equity that's trading at 25 times earnings and you know paying me two in dividend plus two three in growth you know real growth and so I'm getting this inflation protected bond Plus, I'm getting a little bit of growth. You know, it's a better product. And I mean, you kind of have this weird crowding out of the, you know, equity market's crowding out. Um, bonds, I I I think you end up with a multiple compression, though, too, you know, because as bond rates go up, if you run it hot because the equities crowded out, you you start to get this multiple compression. I mean, we ran it hot throughout the 70s. Remember, you know, guns and butter. Guns and Yeah. Guns and butter. Yeah. Yeah. And I mean, look, everything traded at like high singledigit multiples. I mean, that's why private equity back when they actually did creative interesting stuff. They would buy these companies at seven times earnings and sell off divisions and move stuff around, made a lot of money doing it. But everything was seven times earnings because interest rates were higher and uh we were running it hot. Like getting from mid20s earnings down to seven, I mean that would break the world. Yes, it would really cause a lot of problems. All right, one last topic. I think that uh you highlighted that we should chat about is trading in a slump. Yeah. Uh and I'd love to, you know, you you penned something another blog that was very very wellreceived about uh the difficulties when things aren't going your way and uh just the human element. So, I'd love for you to kind of expand on that and talk about uh the challenges that portfolio managers and all investors face, right? I mean, look, uh to to preface this, you know, we're doing just fine. I mean, you know, we're actually up on the air. Um yeah, you are like I I must say I just just to set the stage uh uh like uh clear here, Cupy will be the kind of guy who'll be bitching about how he's not doing well and then I ask him and I'll be like, "What the hell are you complaining about, buddy?" like it's like you're still better than most people like you know this is terrific. Uh anyway, so so I'll just completely say that like when when you when when CPY is getting mad at himself, it doesn't mean that he's actually like had a bad year in terms of like how most people think about their bad years. He's just very hard on himself. Look, I set really high expectations for myself. This is a hobby. It's a business. It's it's just, you know, a point of personal pride. I want It's your life passion. Yes. Yes. and I don't feel like I'm doing as well as I should be this year and I think you say the same for the last couple years and you know eventually it kind of you know gets to you like why am what am I doing wrong what am I missing I think you know you do a lot of introspection I mean the first step is when it's not working you kind of pull back you know you just pull back all the marginal positions you don't want right um all those little things that are distractions and you start going through the core book and you kind of say why do we own this what do we really think what's really happening here. It's super helpful just to go away for a month and just do something else. I mean, focus on your eating and your drinking and maybe some tourism and you know, it's just like this is a cleansing thing. And I think, you know, it's weird in this industry because everyone on Twitter is doing victory laps about everything, but if these guys were all so good, they'd all be in PJs and they're not. I mean, they're they're selling you newsletters because they really need the $100 subscription. That's right. They're they're in PJs. It's just not their private jets. They're in their pajamas. Yeah, they're in grandma's house. Um, and so, you know, but there's this culture in our industry to never admit they're kind of not hitting it as hard as you should be. And I think as a result, there's a lot of people that don't really know how to fix themselves. And I've seen friends totally self-destruct where they just start trading bigger and harder, and that's the wrong thing to do. You know, I've seen a lot of things where you almost need to have an intervention on the guy. I mean, for me, I think it's just it's important to step away and just look at what's not working and why. I tend to be a guy that owns um these sort of smidcap things that tend to be tied to the economy. You know, I I do well when GDP is growing and I don't do so well because I don't short uh when GDP is negative. And I think that the GDP, you know, Xtech and X AI is probably negative. And it's probably been negative for over a year now, right? I think, you know, when you take a step back and you're just kind of like, why is my stuff not working? Well, we're in a recession. And stupid me, I'm looking at the S&P and I'm not realizing we're in a recession. I mean, even they tricked me. Um, and it really took to this earnings co this season's earnings calls where I'm like, "Wow, it's brutal out there, right? It's hard." I think the other really hard thing about this and it's really, I think, important is a lot of the time there's nothing to do and we all want there to be something to do and we all want there to be something we're really passionate about. We all want to be, you know, 130 long and, you know, just talking about your favorite things. Look, Buffett got to be really, really rich because he sits on cash and about once every 10 years, guys come to him for capital and he disperses it and makes a lot of money. I mean, I'm not Buffett, but I can sit on cash also. And about every 5 to 10 years, the world almost dies and about every 18 months, some sector dies. And there's plenty of opportunity. You have to have cash when that comes. And I think the hardest thing I've ever seen because when I had with my own personal money, I would just sit in cash. The hardest thing possible is to run a hedge fund and LPs call you up. So what are we doing today? Ah, I went to the farm. I got a good surf in. Like I mean, I don't want people to think I'm not working because I'm working my ass off. I'm building an inventory of stuff I want to buy in six to 18 months, right? Then you have employees. They want to put names on the book. And there's all these things and I didn't realize how hard it is to do this at an institutional level as opposed to a private level. Well, for you, you know, it's hard at an institutional level, but it's even hard at a private level. Like, you know, what's the the line about there's nothing harder than watching your neighbor get rich. And that's in essence what's happening right now. Um I I just when you said that, there's so many great investors that that just immediately sprung to my mind. Um, like what was the Marco wizard guy that said something to the effect of I just sit around waiting for there would be money in line there in the corner and I go pick it up. I think it might have been Jim Rogers. Yeah, something like that. Yeah. And then the other one I remember specifically is Byron W. No, Barton Bigs. One of the two. Barton Biggs and Soros were chatting and uh it must, you know, I'm thinking it's Byron Wayne now that I'm thinking about it. And Byron said something, you know, Soros says, 'Why are you in a at work today? Like, and and Byron's like,"Well, you know, what do you mean, why am I in a work today? I work every day." And he goes, "Well, there's nothing going on. There's nothing to do." Soros says, and uh you know, Byron says, "The difference between me and you, George, is that you know when there's nothing to do, right?" and and and the kind of implicit uh our you know wisdom in that was there was lots of times when there is nothing to do and you just need to wait. Yeah. And yes and waiting is really really hard. Look there's a ton of cheap stocks I want to buy. I think they're going to get cheaper. I think there's a lot of things. I mean look event driven is great. I give a quick plug to ketam kedm.com. Goh take a trial. I think there's always stuff to do in event driven because corporate actions are their own special thing idiosyncratic to the world but the stuff I do tailwind investing there's not a lot of tailwinds so not don't force it yeah got it okay listen I'm going to spring something on you I hope you're not going to be upset about this uh since you haven't been on in a while and you're not especially not as like a proper guest um my recent things that I ask everyone is the the desert island investing Okay. And so with the desert island investing, what it is, you're allowed three albums or three bands and then one trader slash portfolio manager from history. And it's just going to be you, the three the trader and the three albums. So I hope you're okay with this. First of all, the three bands. What are your three bands you would take to the desert island? Oh, I'd probably take like I don't know was like Zeppelin or something. Okay. Zeppelin. Good choice. I don't know. Maybe like like uh Government Mule or something. A little hip. Almonds. I don't know. Something like that. What is Government Mule? Is that what you said? Yeah. Yeah. It's like an almond spin-off band. This is You're going to the desert island and you're taking Government Mule. Okay. Anything else? No, that's it. I'll take the Almond. Okay. The Almond Brothers. Is that what you're saying? All right. I probably have tick to something angry. Probably like Metallica or Nirvana or something to kind of balance out a hippie. I'm actually surprised at how many traders so far have said like hard metal rock. Like it really actually is kind of shocking to me how I traders must be an angry bunch. Okay, now you ever have a bad day and you just put like Rob Street on you and uh the guy from Big Short, Christian Bale's character. Um, okay. So, now the trader, you're not allowed to pick uh somebody that's already been picked. And so far, Ed Thorp and Ducken Miller have been picked. So, you got to pick somebody other than Draen Miller or Ed Thorp. I I think I'd take Mark Faber. He's just the most interesting man alive. He is the most interesting man alive. I mean, we did at Ketum. We did a Ketum happy hour. I think it was like 4:00 a.m. in Shiang Mai and he's like Shane smoking and drinking a bourbon or something. I'm just going to leave that. I'm not say anything to that. I just Good old Guppy could have picked Mark Favor. Okay. You know what the good news about picking Mark Favor is? I I think you're going to be alone in picking that. But if you're going to be on an island for a long time, he's really one of the most fascinating humans alive. Okay. Well, there you go. Harris, it's been a real pleasure having you on. Why don't you tell people where they can find your blog? Cuz they should all sign up for your blog. It's free. It's terrific. You've been knocking out of the park. Tell them about your blog. Tell them about your Twitter account or your ex account, whatever it's called, and tell them about uh for potential investors uh where they can reach out to learn more about your friend from my blog. Go to pray.com, P R A P. Uh sign up for the the blog. I mean, drop our email. We're not going to spam you or anything. And uh if you go to the blog, there's also somewhere on that website a way to reach out to uh the investment relations guy Nick at my fund and he'll tell you about our fund and how great we're doing. Um for X, uh go tohcuppy.com. Uh I hope you have some thick skin though because I'll find a way to offend everyone eventually. Um and uh yeah, that that's oh kedm.com. Oh yeah, that's right. And that's our event driven newsletter. Okay, great. Well, CPY, it's great having you on. Thank you very much for taking the time to share this with us. Hey, thanks for having me on as a bear for once. That's true. Human blue cells. That's right. Dum cells. Okay. Thanks again, bud.