The Stock Market is Secretly Getting Killed | WAYT?
Summary
AI: Extensive discussion around AI’s commercialization, highlighted by Palantir’s growth, expanding contracts, and high Rule-of-40 metrics; broader takeaway is the durability of AI spend across enterprises and government.
Palantir (PLTR): Debated valuation versus fundamentals, with strong US/commercial growth, record TCV, and buyback authorization; positioned as a core AI/defense data platform despite concerns about exuberant retail sentiment.
Apple (AAPL): Framed as one of the best businesses globally, with segment revenues rivaling large standalone companies and justified premium multiple due to consistency, services-driven margins, and customer lock-in.
Restaurant Tech / Toast (TOST): Bullish on Toast’s ARR growth, expanding locations, and Uber partnership; thesis centers on digitization of restaurants, cross-selling software modules, and leadership in AI enablement for operators.
Autonomous Vehicles / Uber (UBER): Positive long-term setup with strong trip/bookings growth and a strategy to be the platform layer (not the fleet owner), leveraging partners like Nvidia and Lucid to scale AV supply.
Private Markets / Financials: Blackstone (BX) pitched as a secular winner in private investments despite a drawdown; Intercontinental Exchange (ICE) and S&P Global (SPGI) viewed as attractive data/exchange monopolies after pullbacks.
Cybersecurity / CrowdStrike (CRWD): Long-held winner underscoring a multi-year cybersecurity spend cycle; lesson emphasized is owning category leaders in obvious secular bull markets despite volatility and episodic setbacks.
Transcript
[music] Okay. Ready? You ready? >> Absolutely. Born ready. Let's go. >> All right. Ladies and gentlemen, boys and girls, children of all ages, welcome to an all new edition of what are your thoughts? >> What are your thoughts? >> The longest running uh show on our YouTube channel, the Compound YouTube channel. Um, Michael and I have been at it since 2018 in this format. There, some of you remember there was a time where we used to surprise each other with topics. >> Not forgot about that. [laughter] >> Not our best content. Uh all right. [laughter] Uh I think no big deal. We did it for four years. Guys, on this show we uh we talk about all of the most important things happening in the market, in the economy, in the financial news. We stay in our lane. We don't veer off into directions [music] where we don't belong. We try. >> I thought we were doing the race today. We're not We're not opening up with the race. >> What's the race? >> The mayor mayoral race. I thought we were starting the show. >> No, stay out of that. I for one embrace our new um socialist leadership and uh I don't know. I I'm out. I'm at a loss for words. All right. Anyway, we're going to stay in our lane. We're going to do stocks. We're going to do bonds, interest rates, tech, all the stuff that you uh you count on us for. I want to say hello to some people in the chat. But first, a word from our sponsor. Michael, tell us about the sponsor. >> Today's episode is brought to you by Cran Shares Morgan Stanley. Ticker MS, neither here nor there. They project the humanoid robotics industry could grow into a $5 trillion market by 2050. And investors are taking notice. Crane shares KOD ETF. I call it KOID. KOID KOID provides equal weight exposure to the companies powering this revolution. >> All right, I'll keep going. It's equal weight methodology. No, no, no. You're next. You're next. You're next. It avoids outsiz exposure to mega caps like Nvidia or Tesla, which many investors may already own while still capturing their influence on the theme. Josh, don't even bother. I got this. Coin's holdings include innovators like Robosense. That's a company specializing in LAR sensor technology. Ube, a significant humanoid robot maker, and Horizon Robotics. Advancing AI chips that bring robots to life together with other holdings across Asia, the US, and Europe. KID offers a broad-based way to invest in the rapidly emerging humanoid robot sector. Learn more at KOID. >> Read the disclosure, please. Koid is non-diversified. Diversification refers to theme, not regulatory status. Holdings change. See top 10 at craneshares.com/koid. Review the perspectives for risk and details. Investing involves risk including loss of principle. KOID is distributed by SEI Investments distribution company. All right. Shout out to uh shout out to Crane Sharers and um shout out to you guys that are joining us in the live. I see Chris Hayes is here, John Carlo, all all the all the gangsters are back. Curry Dip, C. Paul Breezy, we appreciate you. Ben Lupu, who else? Everybody's here. Um, it's an exciting time. I was saying to Michael before we came on, when it's not earning season, I don't even know what we talk about because when it is earning season, there's almost too much to talk about. It's just uh it's a deluge, if you will. What do you think? >> Well, you know what? I'm here for it because August in particular, sometimes too, it's just boring. There's nothing to talk about. stocks go up 40 basis points every day, whatever until you hear from the companies and we're gonna get into it today. Uh like in between times when there's nothing when there's no macro news going on really like a little Fed stuff here and there, it's just boring. We're saying the same [ __ ] every week. So, I'm here for it. I'm excited. There's new stories. There's news to talk about. Let's talk about it. I agree. Even the stuff that goes down that I own, at least it's like a little bit of variety. Um cuz that that rally from July into year end was sort of relentless or year end into into the fall was sort of relentless and now there's opportunities being created finally. >> All right. So Palanteer is the big one. I can't believe it's the big one cuz like comparably speaking its financials. It's not that big of a company. It's not small. They're on a run rate that's like four and a half to five billion in annual revenue and they've they're growing faster than almost any company I could think of. maybe any company I could think of not only growing but growing profitably and a lot of knocks on the company about its lack of profitability when it came public now look absurd in hindsight this company is minting money >> for a $500 billion company now obviously the question is is that valuation justified and you know we'll find out in due time >> yeah it's $450 holy [ __ ] that's the other thing >> dude it was $500 yeah it's huge >> I mean they've been all right so they're only public for 2 years, but they've been in business for 20. I think it's worth point the company was founded in 2003. So, it might seem more absurd than it actually is, like how quickly this company got to uh a half a trill, but be that as it may, this is a huge business um or or a huge market cap and a fast growing business would be the way I would phrase it. Do you think it's weird how defensive he is >> and combative he is? I do. I do. Um I don't think it's a great look. Um in particular, I think I don't know if he's talking to Bur directly, but he's yelling at the shorts. There are no shorts. I think we have a chart up. Throw this the chart up of the shorts. There's like 2% of the float to short. No, there are no shorts there. There's nothing here. So, I don't know who he's talking to now to the I think you know what he's doing. He's galvanizing his base because his base are retail holders and even if the shorts are imaginary, they're not imaginary because Barry just said he's short. It's like [ __ ] those guys. It's like we're in this together. We're saving America. We're making money. Why would anybody be short this company? Now, I'm I'm kind of sympathetic to like, why would you be short this great American company that is trying to defend our nation? It's doing all of these great things. >> It's not personal because it's not personal. That's why you'd be shorted. >> I understand why people are shorting the name and I understand him as the leader of the company. If this was you, you maniac, you would be relentless if there was anybody shorting your stock, your company, and you were the leader of the company. >> So, that's all right. I'm glad you said that. I do think when you're running a business for 20 years, something that you built with your bare hands and you've had criticism the whole way up, not from the investor class, but from political people, journalists who hate his message, his America first message, and I guess like a a lot. So, he considers himself to be center left. In today's America, he's obviously not. But I do think he gets a ton of criticism from the left where he's a war profiteeer and uh they're spying on everybody and he's like almost too gleeful about helping the Pentagon drop bombs in other countries and there's just this like distrust on the left of the military. There always has been. This is nothing new. And he sort of became the face of that as the AI enabler of the US military. For better or for worse, I would point out he's doing a ton of work with uh militaries and governments all over the world, including in Europe. He sees himself as somebody who's helping to erect a bullwark of technology against the enemies of the allied countries, what we think of this traditionally. So, he's kind of got that chip on his shoulder where they've been giving him [ __ ] in in in the press even before he was a public company. So, I understand the aggravation like why do you guys keep betting against me? I totally get that. >> But that that's one side of it, right? It's the political angle. And then the other side of it are the professional investors. >> I'm using air quotes, who think a stock is expensive. He's like, "Fuck you guys. You've been calling my stock expensive for the last 300%." And meanwhile, And meanwhile, fine. And meanwhile, my investor base, the quote dumb money, look how much money they're making. you arrogant pricks are talking [ __ ] about about us. >> I also think it's really hard as a founder who's still the CEO to disentangle people's um skepticism about your stock from being like skepticism about you. >> Yeah, it's him. It's his baby. It's his entire I think he like thinks of Palunteer and himself as interchangeable and obviously >> they are >> they they are right they're forever entwined. the where does the person end in the company begin? There's no line because that's what it is to be an entrepreneur and to build something. It's not he wasn't a hired CEO. >> Well, and guess what? You're 100% right. And the reason why they you can't untangle the man from the company or from the stock is because part of the thesis for shorting the company has nothing to do with the fundamentals. We're about to get into it. They are firing on all cylinders. The company is on fire. Um, but the people that are short would would say it's it is a great company, but it's not a $500 billion company. >> Oh, that's the question. Okay. >> And and the reason why it's a $500 billion company is because you are pumping the stock to retail investors. >> So, so that's a really great point. Like Bur does all this cryptic [ __ ] He's like Drake with the with the tweets. He like doesn't like actually come out and say what he wants to say or he drops hints that he might be long or short something. Um, I wonder if you sat down with Michael Bur, would he say exactly what you just said? Yeah, of course the company's doing great. Like, so I try to make that point on TV today. The bears aren't saying this is a bad company, >> just too expensive. They're just saying like investors today are paying for like growth from 10 years from now. Like it's been pulled forward. >> I don't hear anyone. This is not All right. You know what this is not? It's not valiant. >> No. >> Okay. It's a it's a really important distinction because in that case if people were saying Alex Karp is a fraud, Palanteer is [ __ ] then his combiveness would be fully understandable. Like how dare you say that? People are saying the opposite. They're saying investors are way too excited about this company despite the fact that things are going really well. >> Let's get to some of the fundamentals. pull up pull up the first their first slide that talks about some of the growth. >> All right. US revenue grew 77% year-over-year. I think the overall company revenue was up 63% was the number I heard. >> Dude, 20% quarter over quarter is why >> right sequential. So this quarter versus the prior quarter, not last year, 20%. >> We'll get to the 40, but look at the look. Okay, so closed. They closed 204 deals of at least a million dollars in revenue. 91 deals of at least $5 million in revenue and 53 deals of at least of at least $10 million in revenue. So this idea that it's just government spending, it's all government contracts, not true. Just not true. >> No, they're they're adding corporate customers, what they call commercial customers, um here's the the total contract value, TCV is the is the number they use, is $1.3 billion, up 342% year-over-year. That's I don't care what business you're in. If you're adding contract dollars at that rate, you are doing something very right. He obviously is the best version of a company helping other companies implement AI. >> Hands down. >> And and and also a lot of traditionally the highest growth companies are doing so because they're giving the store away, right? It's either negative value contracts or whatever. They're doing it with a margin rate that is off the charts. So they they're obsessed about the rule of 40, which is this term in enterprise software that measures your how how profitably you're growing. So your growth rate and your profitability and they're off the charts. John, throw some charts on. >> 115 114%. >> Their their rule of 40 score. >> This is them compared to enterprise software companies that have over a billion dollars in revenue. The next chart shows them compared to I think the top 25 companies around the world. Who's even close? Uh who's next? Nvidia. >> Nvidia. And and who's underneath him? I can't I can't make that out. >> Doesn't matter. They're all The point is they're off the charts. >> It looks like that is uh Rocky Mountain Chocolate Factory. >> That's exactly >> I don't Dude, I don't know what that says. L >> I can't say it. >> L L. Is that Lily? >> Could be. >> It could be. Right. Um go back to the Go back to the prior. There's nobody. >> No. One more. One more back. >> No, this is it. >> The rule is it. >> Oh, this is it. The rule of 80 frontier. So where like the 80 the 80 comes from or the rule of 40. The 40 comes from that combination of profit margins and revenue growth. So like what they're doing is not being done by anyone. And when he says that, he's not lying. >> And it's accelerating. So we have one more chart. Look at this. Look at this. It's accelerating. >> [snorts] >> It's at the point where every large company and every government around the world is going to be doing tens of millions or if not more in Palunteer business if the if this continues and he knows it. And so he's basically like, "Okay, let me get this straight. [snorts] Of the 5,000, 3,000 4,000 publicly traded companies in America, US and Nvidia, that's who you want to be short, >> right? like literally the two best companies on earth. >> Um in the chat people are pointing out Bur talked about getting short the um the semiconductor stocks last year. Not not a great idea. Um short media at different times. >> But it doesn't matter what he tweets because his we see his performance and this is a great lesson. Forget what they say. All right. They could change their mind. It doesn't what they're you look at the 13Fs. It's it's in the past. His performance has been kick-ass. He's been doing really well. So, don't worry about what he says. Ignore it. >> What if he short? You're right. What if What if he bought puts two days ago and he covered them today? The stock went down 8%. Right. >> He probably probably would have made money. So, how do you know? That's one. Two. Obviously, we've talked about this before. The dollar amount. People are people are calculating the notional value of what those options contracts uh stand for and they're saying, "Oh, it's half his fund is in puts." I very highly doubt that's the case. That's not that's not how to calculate what his actual financial exposure is. >> Yeah, it's leverage. >> It's cuz it's le okay. Um, look, I think there's room for both of these guys to be right. This stock could pull back 20%. I think not even violated its 200 day moving average. >> It's up. It's up still. >> Can make money and then it could rebound. >> It What is it up year to date? I mean, it's first of all, it's the the pullback is it's a baby pullback. Who? It's up 116% year to date. So, >> oh, here's the other thing. >> A highs. Big deal. >> They're buying back stock. >> Really? >> Yeah. So, if you're buying back stock, don't you want there to be short sellers >> uh knocking the price down? You could just buy them out of their positions on the way back up. He said he has $880 million left on an existing buyback authorization. >> Do you want to buy You want to buy your stock at 200 or you want to buy it at 180? >> Yeah. On a $500 billion market cap. That's not That's nothing. >> Understood. But I'm just I'm making the point he's buying he was they bought back stock last quarter. They didn't not buy back stock. So if that's >> He's rallying the troops. That's all that that's what all the rhetoric the rhetoric is. I do think he is very wisely creating this retail army of people that he has made a lot of money for. I think you're right. He's galvanizing that base and I'm seeing a lot of C CEOs get religion on this. Netflix just announced the 10 for one split um after a really long time of not doing splits. And then I saw the guy from Service Now on with uh Kramer, the CEO, and he was saying explicitly, "We're doing this split because we want to make it so that our fans in the retail investor audience can continue to fight with us and and be on the team and buy more shares." I do think that that's now part of the playbook post GameStop, post uh 2020. I think technology CEOs in particular, but not only tech CEOs, recognize the value in having a vocal >> retail shareholder base to counteract some of the narratives coming out of Wall Street and institutions. I think like having a rabid army, >> you better deliver. There's there's not too many Alex carps. >> Um, >> there's not too many then there's not too many palenteers. >> Well, the Service Now guy has made a lot of money for uh investors, too. So, and and obviously so is Netflix. And I think um deliberately like uh catering to that retail investor with a lower share price is part of the modern CEO playbook. >> Not dumb. I like it. Um we should split our stock. What do you think? >> Do five for one. What's up? Little five for one. All right. Um let's see what else. Let's put up the price reaction. >> This is This is >> got back into the gap. >> I mean, it's actually nothing. It's down. It's in I mean, okay. Stock's up 300% over the last year. It pulled back 8%. Who cares? >> It pulled Wait, the point is it pulled back to the level it was trading at on October 29th. >> Yeah. Who cares? It's nothing. >> It's nothing. Uh, total return. Give me it. >> Yeah. >> Next chart. So, this is 160% since Christmas. Like, I think you can live through a couple of pullbacks. It'll >> it'll it'll work out. Um his opening statement on the conference call was as livid as what he did on CNBC after um on Squawk. >> It was a lot. >> So I just I asked Sean to grab this. This is how he opens the call. >> Greetings. By any normal or even reasonable standard, these are not normal results. These are not even strong results. These aren't extraordinary results. These are arguably the best results that any software company has ever delivered. And that's not hyperbolic despite what your analyst friends may want you to believe because they've been wrong at every price. They're wrong in every single round. But of course, their perspective and they're not investing their own money. But a normal enterprise company should not have a rule of 40 above 100. He goes on, I'm not going to read the whole thing, but basically like his entire tirade at this, this is the beginning of the conference call, not the end, is like [ __ ] everyone who doubts us. And I do believe there's a certain component of the shareholder base that loves that. >> Yeah. >> And he knows exactly who he knows exact. Uh Joe Alto in the chat saying he sounds like Trump. Yes. deliberately actually ven diagram of MAGA Trump stock market investors and Palunteer shareholders. There's probably 100% overlap. >> Well, how about how about how about how about Tesla shareholders? >> Yeah. What's what's Elon going to do to catch up to Karp at this point? >> I feel like he's got to throw some punches, too. >> All right. It's an interesting story. Um >> yeah, very >> we uh we had a video clip. I'm going to skip it. I don't think it's that important. Um, let's let's go into AI generally. You're >> Yeah, before we get there, um, to set up some of the things that's been happening in earning season, um, the stocks that are beating, nah, whatever. They already got rewarded, not not shock, and we were talking about the setup going into earning season. The bar was high. Uh, and but the stocks that are missing, oh boy, it's it's ugly. So, uh, misses have traded 5% lower on average the day after reporting, which is steeper than any other quarter in the history of our data, which goes back to looks like 2016. Um, yeah. Okay. Now, listen. So, I I love this. I love a I love a healthy reset. I love stocks falling even as they beat. I don't like to see anybody lose money. I'm not bearish by any means. I don't celebrate this. But there is obviously a lot of optimism baked into the market based on whatever you're looking at option activity sentiment. It's all saying the same thing. A healthy reset just blowing a little foam off the top of the beer. Let's reset. Let's everybody take a take a take a beat. I like I like it. I like where we're where we're headed. Um Oracle stock closed the gap after that 25% pop after the open AI announcement or about to close the gap. like a lot of the holy [ __ ] this is like scary vertical price stuff that's all that's all gone so now we can move forward hopefully in a healthy way all right anything else we're getting we're getting a heads up Axon Enterprise which is Taser and Body cameras for law enforcement huge blow up after hours um that stock had been rallying up until late summer and then >> I don't know anything about that name >> it's it started so it's like it's like um part of this like military industrial complex like law and order Trump trade kind of thing. They um they sell a lot of equipment for military, for police, for law enforcement. Stock had been doing really well until late summer. It broke down in September technically and I guess now we know why. Um it broke its 200 day three weeks ago and after hours tonight it's down $150 a share. It's down uh 21% um on earnings. I haven't seen the earnings themselves, but um >> All right. So, so >> not great. >> So, topic two is a bit stale at this point. I put this in the dock, I guess, like a week ago, so whatever. Um there's an interesting thing going on in the market where you're going to see this for the next I don't know three years because the stock market is so concentrated you're going to see a lot of very bizarre days whether it's equal weight outperforming or underperforming like in a dramatic way. So, for example, last Wednesday, I believe it was um or Tuesday, it was the day last week, Bespoke tweeted this where they showed it was the worst breath for an update ever for the S&P. So, um there were only 200 I guess there was 300 300 more stocks were down than up, which is off the charts. Um to which you would say, "Oh my god, Brett, it's every you know, the divergence is 20,000 all over again. It's being lifted by a handful of stocks while the rest of the stocks are crashing. Not so fast. Next chart by Duality Research. So, okay, it was last Tuesday as you could see, but also look at all the odd days in 2025. This is the opposite. Okay, these are when you see a lot of stocks that are actually advancing, but the index isn't moving. Uh, well, how could that possibly happen? John, we could skip the next chart. Um, go to my MAG7 chart. So, here's the deal. This is wild. The mag seven, the mag seven, the market cap of these stocks are equal to the bottom 449 stocks in the S&P, which is stocks 52 through 500. >> Stocks 52 through 500 are as big as the MAG 7. So, you're going to continue to see these really weird days inside the market where you could have a lot of stocks that are down, but the MAG 7 is a great day and the index is up. Conversely, you could see the MAG7 drag the index down with a lot of advancers. So, not to throw out this breath data, but just it needs context when you see it going forward because we're going to continue to see it. >> Yeah, I see it differently. I think the market is secretly getting killed below the surface and I think it's a function of a couple of things happening. >> Wait, hang on, hang on. I'm sorry to cut you off. You can't This is not You think the market is secretly getting killed because there's data. The market is not secretly getting killed. If you look at the equal weight NASDAQ 100, Russell 2000, >> stop looking at that. >> Stop looking at the equal weight stocks. What do you mean? How much should I look at it? How is the market secretly getting killed? >> Look at look at the internals. >> I Okay, those are internals, but what internals are you talking about? >> 31% of the S&P 500 are 20% or more below their 52- week highs. That's >> um I have this I have this data from uh chart M. >> I have this chart too and I didn't put in the doc. You know why? Because there's nothing there. It's average. It's average. There's nothing there. No, your data is wrong. Your data is wrong. 25% since 2018. So, it's average. >> It's not 30%. The the there 30% of the index is is down what? 20%. You said 30. It's a big difference. >> Or more. >> 20% or more. >> It's basically average. It's average. >> 6 and a half% of the S&P is now at a 52- week low. And I bet today it's worse. That's as of yesterday. That is the highest level of new 52- week lows since li liberation day. The average is 2%. It's 6 and a half. I know there's nothing there until there's >> there's nothing there, BRO. I HAD HIM CHART this and I didn't include it because there's nothing there. >> There's something there for me. [laughter] It's nothing there for you. >> It doesn't It doesn't There's nothing on the chart. >> Keep going. >> Uh okay. Median RSI in the S&P, not average. Median is 44. This is not consistent with bull markets. Um, median percentage of stocks below 52- week highs is uh uh minus is 15%. I look uh oh, this is the one actually. This is the only one I care about cuz I keep this best stocks in the market list and it's and it's shrinking and 66% of the S&P 500 is actually down over the last month. It's nothing to be alarmed about. Wait, >> nothing to be alarmed about. But it's also to your the way you say it, it's also not nothing. We have a chart. >> Wait, hold on. Hold on. Hold on. I'm just saying. You said the stock market is secretly getting killed. Can we just >> secretly getting killed? >> Okay, >> dude. Dude, Pinterest is blowing up right now after the close. I know. Not saying it's nothing but no but words last week as of last week of last week UPS Nike the list of brandame stocks while they're not important in dollar terms relative to Microsoft the list of stocks that are important to other people that are breaking down slashcrashing slashmaking new lows for the year is alarming. >> It is. >> It's notable. It's notable. Alarming. >> Well, we're different people. We have different biochemical >> notable. It's notable. So, all right. So, throw up throw up the nearing historic extremes. The way that I see it, Josh, is that the stock market was max long complacent uh and max above its its 200 day moving average. It was 13% above. So, we're just getting a little reset, a little a little foam beam blown off the top of the beer. And you're right, there are a lot of names. We can go down the list of Starbucks, of Nike. Uh there's a million of them. There's a million names that are getting leveled. >> My friend, you are in a kayak heading over Niagara Falls talking about a little reset. Stocks are secretly getting killed. You're not you're we're not experiencing it as a marketwide disruption yet because the stocks that really matter are holding up. Apple. >> Okay. But Josh, there's Josh, there's an index for this. It's called the equal weight. This weights all of the stocks equally, dude. And it is down 2.4%. So, shut the [ __ ] up. This is the data. The median stock is down two Well, no, that's not true. The media stock is not down 2.4%. The equal weighted stock market is down 2.4% from its all-time highs. So, when you say the stock market is secretly getting killed and it's alarming, you need to relax. >> I'm going to tell you the greatest thing about the show is we'll be back here next week and then we'll see who >> I'm not making any Hold on. And I'm not saying any predictions about what's going to happen next week. >> Now, here's what I want to say that's constructive. We needed this to happen. It got too easy. >> People are walking around with their big giant balls in a wheelbarrow. [laughter] They're they're not afraid of they're not afraid of they're not afraid of a a goddamn thing. >> Investors were definitely feeling themselves. And then when you look at like the strategies of the world, some of these um uh some of the smaller AI names and you look at like some of the things that people have made money in the Olo, I I I don't think it's negative. I don't think it's negative to see 30 40%. Uh strategies down 200 points, 450 to 250 in like six weeks. I don't root for people to lose money. I just think like some of these types of things needed that correction for people to calm down like relax. Can I quote myself >> with the level of risk that they're that they're assuming is not risky? >> A healthy correction or what did I say? Healthy pullbacks only look pullbacks only look healthy in other people's stocks. But >> but it is true in my estimation. Now again, it's not a prediction of where we go from here, but this is normal. This is normal. You can't go up every day forever and ever. You can't have these pre-revenue companies at $30 billion market caps up a,000% without any pullbacks. It doesn't work like that. So, this is this is the way it works. All right, before we have a few more charts, I just I I want to call this one out. I I did it with Ben on >> Wait, wait, I'm not but I'm not but I'm not done. Do you know what went up today? >> What? >> I do know not a rhetorical question. >> Oh, Apollo went up 6%. They rallied financials. >> Home Depot went up. >> This is what gives me hope. They rallied the defensives, which you know, not looking for. Healthcare went up, consumer staples went up, but the financials were the best sector on the day >> up a half of 1%. No big deal. But like >> that tell that tell that tells me >> that we're not just throwing out the baby with the bath water and giving up on the bull market. What we're what we're doing is we're we're um tamping down some of the more egregious silly stuff. And then like Bergkshire went up today, >> I should say. Goldman Sachs went up today. >> Home Depot went up. >> Like there was some good stuff happening today that I like to see and I think is healthy. >> Uh healthcare rotation is who said is this JC? Rotation is the lifeblood of a bull market. >> I don't know. >> This doesn't sound like a JC. Somebody said, "I rampor." >> Who cares? All right. So, I I I gotta share this chart because I blew my own face off with this. I had chart >> kids. Yeah, I think that was an Aapora, but maybe not. >> Okay. All right. So, um $4 trillion for Apple. It's a lot of market cap. And I think it's easy to just look at like the numbers and not really appreciate the underlying businesses of how large they are. So, I had Matt show me their the their segments broken down and compare that revenue to other giant companies. So, let's start at the top. The iPhone, which is basically half of the revenue of the company over the last 12 months, the iPhone did more revenue than Bank of America, not a small company, and Meta, also not a small company. Services, which are which is the crown jewel. It's the entire growth engine, the entire margin expansion engine of Apple. services did more revenue than Target. $ 107 billion. Wearables, which is the watch and the and uh and the uh I what's the what the AirPods and and home accessories. I don't know what that is. Um that did as much money as Starbucks almost and almost as much money as Salesforce. All right. Now you go on down to the computers. The Mac the Mac did more money than Schwab. Significantly more money than Schwab. And the iPad, which I can't believe this. I I don't know. I guess I would have guessed. I don't know what I would have guessed. The iPad did $28 billion over the last 12 months. That's more revenue than AMD. Holy [ __ ] >> So, keep that chart up. This is this is my takeaway. This is how crazy this is. AMD has a market value of 406 billion. Now, we know it's growing faster than iPad, but the fact that those two companies are revenue parody is bananas to me. >> We could say the same thing with uh with with uh Schwab. So just like just for people's context, Schwab has a market cap of 170 billion. MAC, just Mac alone is a bigger business um than than Schwab. And obviously, you know, the example with Target, the example with um this is still uh chart. This is still the best business in the world. It's just not the fastest growing anymore, but it's still the best business in Apple is the best business in the world. They're making money in year 20 of a product like an iPhone where most consumer technology companies at best they've had like a three-year run, a fiveyear run. Think about Japanese companies selling VCRs. Like they they have extended the lifespan of consumer technology devices. It's miraculous and found a way to keep these things at 40 50% profit margins. the I guess the the other two that I would say are competing and you know whatever we're splitting hairs would probably be Microsoft and maybe Google [snorts] >> I think this is better business than both. It's just it's not growing as fast right now >> but it's it's just bigger >> and it's better >> and it's global >> and the margins are still there. >> Yeah, it's it's wild. It's really impressive. And um they just keep coming up with new things to sell the same customers, keep charging the same customers more money for the same product, keep improving the products. They they have this consumer lock in. And people are like, "Oh, why why is Apple 35 times earnings?" Because because do you know how hard it is to shock a company like Apple in like off its game? They just continue to deliver >> and the buybacks and the dividends. >> Yeah. But they I'm saying people look at it like a consumer staple. It's a consumer luxury/consumer staple. >> Well, it's the same story as Costco. Why are people paying 50 times earnings for Costco? I'm not saying it's justified because they know the customers are going to show up everywhere. It's consistent. It's you know what you're getting. There's no downside surprises. >> People are paying up for that consistency. Even if it's not fast growth, it is it's going to be there tomorrow. It's going to be there the next day. people drop an iPhone, break it, they're not switching to another phone. >> They're locked in. And that's worth a lot >> to to an equity investor. >> Uh, all right. Uh, I had we had one more thing in that in that market secretly getting killed. >> We had the the quotes from No, I don't want I don't want to I want to skip the next chart. It's a lot of charts. Um, the thing from Sam Row or the thing about >> You want Let's save the alt. Let's save the alt stuff for uh for for TAFF. All right, Sam Row. I woke up to see almost every financial news site I read feature essentially the same alarming headline. Here's a partial roundup. Goldman Sachs and Morgan Stanley CEOs warn of possible draw down. Wall Street Journal. >> Just seven more of those. Here's some quotes. Quote, "It's likely there'll be a 10 to 20% draw down in equity markets sometime in the next 12 to 24 months." Oh my god. All right, Creskin. uh things run and then they pull back so people can reassess. A 10 to 15% draw down happens often even through positive market cycles. It's not something that changes your fundamental or structural belief as to how you want to allocate capital. That's David Solomon from Goldman. The Morgan Stanley CEO Ted Pick said I think they were at the same event in Hong Kong. Um, we should also welcome the possibility that there would be draw downs 10 to 15% that are not driven by some sort of macro cliff effect. >> It would be the best thing ever if we get a 10 to 15% pullback on no tariff nonsense. No, oh no, the Fed is going to start hiking again. Like if it's just like, hey, we were over our skis and let's just reassess. Wonderful. Let's set up for the next leg higher. That's healthy. What's not healthy are no pullbacks. What's not healthy is up 25% every year with no that's what that's what leads to a crash. Okay, you need pullbacks. You need doubt. We need the wall of worry to be rebuilt so that we can climb it. This is all good stuff. >> Um, Wall Street Journal, Bloomberg, CNBC, Reuters, Business Insider, and Fortune all wrote the same article based on those comments from the two the two Wall Street CEOs. >> You're not going to not write it. >> I guess you have to write it. They must know better that they're basically saying nothing. They're saying water is wet. They must know that. Like the editors at least who are >> Yeah. I mean, what I guess David Solomon, the stock market goes up and down. Write it. >> You know what's an act, you know what's an article? Ted pick of Morgan Stanley, no correction in sight. That's an article. But, you know, that's not what happened. These guys are these guys are saying, "Look, it's a bull market, but so what?" >> You know who's not You know what's what's Buffett's problem? Get involved. [laughter] >> Get involved. >> Sit there. Do something. All right. Uh, great segue. Buffett is still a seller. Uh, reported earnings like a like a gentleman on Saturday. No fanfare, no conference call. Um, just a almost like a handwritten note on the website. >> We like it that way. >> Yeah. Yeah. Uh, Berkshire was a net seller of stocks. They now have 380 billion in cash and cash equivalents or treasuries and they bought back zero shares of Bergkshire Hathaway during the quarter and they're obviously still not paying a dividend for the uh 70th consecutive year. Let's put this chart up. [snorts] Not huge sales. They did that already in 24 when they liquidated twothirds of their Apple, but still selling. We don't now we don't know what they sold um chart off because that will come out in the middle of November with the 13Fs, right? The quarter ended September 30th. They have 45 days. Typically, they nail it to the day all of these big investors will come out with their 13F filing um in about a week and a half. Then we'll find out if they sold more Apple. Did they sell more financial stocks? What did they b what if anything? >> Who cares? They didn't they didn't sell anything. At least the net the net is is nothing. >> 380 billion. I saw an analysis where it's like really 360 billion because of the way something's being calculated. It's like who cares >> dude? What are we doing here? >> Um chart on this is Bergkshire versus the S&P. >> So Josh, we were talking about this with Bellki yesterday. Look at how wild Liberation Day was. Bergkshire was flying high. The stock was up like 15% while the S&P was down about the same. And this was like the anti- AAI trade, right? And then uh and then sentiment flipped big time. >> Yeah. Uh Heather M42 in the chat is saying BRKB is my cash equivalent. You know, it's sort of like it's sort of like a joke, but it sort of actually is. >> Uh no, it actually isn't. Just stop. I know what she's saying. I know, but it's just >> No, but it's I'm saying the market cap is increasingly becoming dominated by this almost $400 billion in cash. And when the market dislocates and has an event, people understand the potential for Bergkshire to actually turn that into an opportunity for itself. They haven't yet. >> If you are looking if you are like, "Oh my god, just AI everything. I can't escape it. It's 40% of the index. This is the anti- AI." If this is a bubble that pops, whatever, whatever. Uh, I think Burks will do just fine. Better than just >> They don't They don't really own anything. They don't own enough of anything that requires this AI splurge to continue. Although they are absolutely involved from the perspective of the utility. Um they are obviously supplying power to a lot of data centers. They don't mean to. That's that wasn't the idea when they bought up all these utilities, but um they're they're not not involved. They're just not directly uh involved. >> All right. We talk about some of the blowups from last week. >> Yep. >> So, this is one of the reasons why I love earning season so much. You got to hear from the people in charge because I listened to some of the Chipotle call and we spoke a couple weeks ago and I I I can't remember when I said if I was like probably I I think it was probably like, "Yeah, Chipotle might be there might be some value here." I'm not touching that stock. I don't believe this guy. I just I don't believe what he says. I think he's I I don't know. It's full of [ __ ] Might be too strong. I just I don't trust him. I don't like what he said on the call and I don't buy the turnaround. I'm not buying the stock. I don't care how low it goes. >> It's not a turnaround. Like it's it's like statistically this is not turn around. It's getting worse. >> So So here's here's the story. Um the increase in total revenue, it was not a lot. It was not a big increase. Uh was driven by new restaurant openings and a 0.3% increase in comp restaurant sales. Yuck. due to a 1.1% increase in average check partially offset by lower transaction of 0.8%. Nobody wants to pay $14 for a ball anymore. And this guy had the >> 17 >> and this guy had the gall to say ear this like he opened it with this earlier this year as consumer sentiment declined sharply. We saw a broad-based pullback in frequency across all income cohorts. Since then the gap has widened with low to middle income guests further reducing frequency. we okay so all this might be true but then he's talking about like a particularly challenged cohort is a 25 to 35 year old age group it's like dude yeah fine there's some challenge there but they don't want your slop anymore they don't want it it's there's no value there and in terms of like their their stories and the the metrics for what they're going to be doing to turn around to get people back to the store I don't buy any of it not going to work at all and the stock is getting creamed it's a 54% draw down throw this chart on this >> whole and the and the whole sector is falling >> it's not just them so three years throw the chart This is them versus their peer group. So, the peer group is not doing great either, but nobody wants this. Uh, who is this? This is um Charter had a great chart, the slapole economy chart. It shows the year-over-year comp store sales. >> So, what this is measuring is like, all right, store X, how do they do one quarter to the next? Forget about new store openings. So, Sweet Green, Chipotle, Cavo, all of these slopp I'm here for the slop. I don't mind the food. Nobody wants it anymore. >> Preferences are changing. So, don't tell me about the consumer. Nobody wants >> food. All right. So, a few things are going on. Number one, the relentless price hikes are completely out of control. I can't speak to Cava. The sweet green salad with like an extra protein or something. It's like a $20 meal in Midtown Manhattan. >> It's obscene. >> And it's and it's a bowl of slop. It's not good. The ingredients are ice cold. It just it's there's nothing appealing about it. >> I had compliments. It's good. >> Chipotle. Everyone knows the food has gone downhill, but nobody can pinpoint how they know it. Um, I've never liked it. I've eaten it. I just uh I never thought it was good. But now people that love it are My kid is a great example. He and his friends, they're off it. They just they don't think it's good. It's by the time they serve it to you and you pay, which takes 30 seconds, it's already lukewarm, getting cold. They're banging you out for guacamole. That used to be cute. Guaca is extra in this economy. It's not cute anymore. Nobody wants to hear it. They're not in on the joke with you. And it's too much money for what it is. They overexpanded perhaps. And um now they told me at we opened 64 Chipot lanes. What is that? The drivethroughs. >> Nobody wants the >> drivethrough. Stop. >> Imagine eating this [ __ ] in your lap while you're driving. Are you [ __ ] kidding me? >> So I I I'm not buying the turnaround either. If I want to if I want to bet on a on a turnaround in this space, >> I'm Starbucks. I'm not Chipotle >> or And there's a lot of opportunities. Starbucks for sure or Dominoes like not this not this. Um all right. Uh let's >> What do you think is going lower? >> I'm not buying it. >> Going lower or is it just not going to go up? >> Um >> Chipotle. >> I have no interest in Yeah. I'm looking I'm looking right now. So there's no bounce. >> Is it Is this alleged turnaround artist buying any stock? What's his name? Scott Boatight. >> Any ins any insider buying to speak of? Or probably not, right? >> I I I doubt it. I don't like this guy's voice. I don't like what he's saying. I'm not buying what he's saying. I'm not buying the stock. If it, you know what, honestly, if it went to like 20 bucks, I would just be like, "All right, fine. There's an activist coming in >> here. Uh, number of open market buys last uh 3 months, zero. But last 12 months, 24." >> Okay. >> 55 sells. >> No, no, hold on. If it go If it go If it if it continues to get smashed and activists will get involved. Does Bill is Bill Aman still in this name? >> Taco Bell might have to ride again. I I don't know if he's in it. >> Okay. if it you know what I'll buy it at 20. In fact, I would buy a lot at 20, but uh we'll see. But for now, no, I'm I'm not interested. All right, let's talk about Ferf. So, Fiserf is one of the biggest financial technology companies that you probably don't know what they do. They're in a lot of behind thes scenes processing stuff, but one of the things that you do know what they do is the the you you you tap on the phone. So, it's a Clover competitor. Uh the stock actually >> No, it is it is it is Clover. It's a toast competitor. >> My bad. Okay. who owns Clover. It's a put it's called point of sale payment system and you see it in a lot of stores and restaurants. >> So chart goat and he is a goat >> made me a chart showing >> so the stocks that are in the S&P 500 today. Okay. He went back to 2007. So we're not saying that this is a top 10 blow up since 2007. It's just that of the 500 names today, this is a top 10 blow up of the names that are in the index today. So chart on please. So, AIG on a one-day basis fell 61%. Josh, I know you remember that. >> Yeah, I remember almost all of these. >> So, a lot of these were from the GFC, of course. >> Um, but insurance, >> look, like you don't see a you don't see you don't see this that often. And why did this happen? Because the results were an abomination. Um, and what is hilarious to me, I mean, there's a lot of things that stood out. They repurchased 7.2 million shares in the quarter, returning a billion dollars to shareholders. Returning a Excuse me. Excuse me. Excuse me. You bought 7.2 million shares knowing full well that this is going to be an absolute annihilation catastrophe. What are you mental? This is the most uh irresponsible, reckless behavior I've seen from a company in a long time. This is nuts. Yeah, the core >> the numbers were atrocious. >> The core business is challenged. The growth part of the business, which Clover is part of that is challenged, the payments. Um, they had the CEO basically running and gunning this thing with buybacks and bravado. Then he parachutes out. I I don't know if he sold all his stock or I know he >> did. He did. He did. He did. He did. He did. No. No. Didn't he do it taxfree because he's now in the administration >> and now Yeah. Yeah. And now the new guy >> And now the new guy who's running this has to >> has to deal with it. Um >> it was a disaster. The fundamentals are horrific, >> right? I don't even know. Like I don't even know if this is a buy. Like it it No, >> it's it's not a bank. It's like a It's like a paper pusher. It's like an information solution for financial companies. >> So Clover is the crown jewel of this business. This was the growth engine. and they kept stuffing fees and stuffing fees into it. And matter of fact, Toast, which is a stock that I own thanks to you, uh, got killed on the back of this because it just threw into whole into question the whole economics of this business. Uh, Toast, we found out, is just fine. But they pissed off their customers so badly that it actually, I think I think Toast is gonna be a big beneficiary of this blowup. >> There's a great article this week. There was only one analyst who had a sell rating on Fiserf before it blew up and it's a 26-y old kid that no one's ever heard of before. >> Great story. >> And I love the I love the story. I'll just give people a little flavor of it. Ferves only bear is a Bloomberg story. Ferves only bear is a 26-year-old analyst who beat Wall Street and then of course I hit a registration wall. And I am a Bloomberg sub, but I it doesn't matter. the only the stock in the group that he really likes is Toast, which I like to see. Uh so we'll see if this kid is uh two for two. Um >> but wait, you know what's hilarious? Look at throw up this chart. So all right, I get it. No, it's hard to see the future. Nobody there's no sell ratings on Wall Street anyway. Whatever. But look at the hold ratings. Uh I guess it went up a lot, but like how are you still How are you still saying to your clients that >> Why didn't these people cut it to a cell? Because you know why? Who does that help? Who? No way. Does that help? >> In other words, a lot of the buys became holds, but none of the holds became sells. >> Yeah. Or or how about this? You hold >> If you were a hold, if you were a hold and a stock falls 44%, you better be up to a buy. Unless I guess you say no, the story's completely changed, but fine. But then go to a sell. >> The thing is, you don't want to go to a buy because you don't want the salespeople at the brokerage firm to start calling hedge fund clients and being like, "Hey, we're a buy on this today." So, you can't really Yeah, >> you can't really do that >> if you think that there are systemic problems at the company. You know, >> this is like a three or four quarter penalty box. >> Yeah, this is >> so you don't want your sales people taking a buy rating out to, >> right? Because this is about trading activity on the desk. That's what they're paying you to cover these companies for. >> You don't want to encourage the institutional customers of your broker dealer to start buying this thing. >> No, I guess I get it. I get going to a hold. It's four days removed from that bomb and the stock has no bounce. It It's It's another 52- week low. Guess what? >> So bad. >> This gap this gap unless this gap will never get filled, >> right? I don't This is This becomes a stock that you just remove from your life basically. >> Just get rid of it. >> Just get rid of it. >> Actually, Josh, but we we've been to the Fiser Forum twice in Milwaukee. >> Uh oh, right. They don't own the stadium. They just paid to name it. >> Yeah. Great investment. >> Great investment. Like FTX paid to uh paid to sponsor where uh the Miami Heat play. All right. It's a [ __ ] show. Um thank god thank god uh Toast reported and was a good report because this thing got lumped in with uh with that piece of [ __ ] And >> I bought more I bought more Toast on the day that Fiser board because I just wasn't buying that there was like systemic issues in the industry. I haven't had a chance to digest the toast numbers, but for people who are long-term viewers of the show, I am an investor, not a trader. I've been accumulating stock in the mid30s. Um, I think it's going to 6570 and, uh, I think it's one of the most exciting opportunities in software because of the degree to which they can truly own this TAM. Um, here was the report. Beat on revenue 1.63 billion versus 1.58 expected. Slightly missed on earnings. they did 16 cents versus 24 cents. ARR, which is the most important number, um, uh, annualized recurring revenue, was up 30% year-over-year to 2 billion. So that ARR is almost like annuitized revenue, provided they don't have high churn and lose a lot of restaurant customers. That's the best kind of software business there is. You can budget based on that. You can build on that. Um, you find other things to sell those same customers. They have a lot of different verticals that they've expanded into. It's not just payment processing. They're helping restaurant owners with staffing and what hours, which employees are working, different software. Um they're helping the chefs order ingredients. Um they're making loans to restaurants in some cases and that's a business now. Um and they are the most important provider of AI to the restaurant industry. Believe it or not, these uh companies are anxious to learn how AI can help them save money and Toast is on the front lines of getting these companies data ready to be uh used in various AI uh strategies. So, um they own that customer and uh they added uh 7,500 more net locations. There are now 156,000 locations all over the world and they partnered with Uber to help them expand that international TAM. I think Uber's in 100 countries. So, there's a partnership that was just announced yesterday where Uber's Uber Eats is going to pull in Toast data and help the Toast customer restaurants with their online ordering and Uber's going to help push Toast out to the rest of the world. So, I love that partnership. I own both stocks. Um, put up the Toast chart. Look, man. Like, this is volatile. It always will be. and it trades on rumors and innuendo and they make a change to the pricing on their website and people start dumping the stock cuz they think there's like weakness in the market. It's all stupid. U my opinion is the long-term trend is for restaurants to use more digital technology, not less in order to remain competitive. And this company has the the industry on smash right now, especially if Clover is going to be [ __ ] up for the next few quarters. Um, so I'm staying long here. Do Uber real quick. Um, this is another name we've talked about adnauseium on the show. My biggest position personally, stock fell uh four four or five% today by the close. Had an amazing report. Um, 22% year-over-year trip growth. Uh on the mobility side, 21% gross bookings growth, three and a half billion trips in the quarter, 50 billion dollars in bookings. Revenue was up 20% to 13.47 billion. Um crossplatform, which is the most important thing, Uber eats people using rides and vice versa. Um crossplatform users spend three times as much as everyone else. Um what what else did they say? Oh, uh, monthly active platform consumers are now at 189 billion. Next quarter they could have 200 million monthly activives at this pace. How many companies in the world have 200 million people using their product or service every month? It's a small list. It is not a lot of people. Not a lot of companies have that level. Um, they also announced a deal with Nvidia. They're talking about having a 100,000 autonomous cars on the road. Uber powering the the rides part of that business, getting connecting drivers with consumers, Nvidia providing the technology. And um basically what DAR has been saying is they don't think owning the fleet is the opportunity. They think that's going to be a private equity business much like real estate investment trusts own a lot of buildings. They think the cars will be owned in fleets by private equity and it'll be like an income play and the actual growth and value will acrue to the software and the and the technology, not the cars. The cars are rolling toaster ovens. So they are not pursuing that ownership strategy of the cars. They're sticking to what they do better than anyone which is connecting users. the manufacturer who's who's going to make the cars. >> Uh they have a deal with Lucid. Um so what they're doing is making deals with AI uh uh with uh with the autonomous vehicle technology companies who are in turn making deals with OEMs. So like everybody's going to make look in five years every car sold will be preloaded with this equipment to be level four autonomous. It'll be the ultimate commodity. It'll be like cup hold it'll be like cup holders. I can't wait. >> Yeah, you're looking at you're looking at the end of drunk driving arrests and accidents. >> It's phenomenal. >> Um, phenomenal. So, uh, Uber is going to play a really big role there and I think, uh, I think the stock belongs over 100 if today were a better day in the market. I think it'd be higher. >> Definitely. >> Um, all right. Uh, I was going to do Live Nation, but nobody cares. Okay. Uh, let's do make the case and then we'll do Mystery Chart. We'll get out of here. >> All right. I'm gonna go fast. I These are three companies that I own. Um there are so for for index investors there's no opportunity yet right like if you own the Q's if you own the S&P cap weighted there's nothing there right whatever um but as we mentioned at the top of the show uh albeit a little bit hyperbolic from Josh there are a lot of names that are pulling back a lot of really great names that are forget I'm not I'm not talking about Nike and Chipotle and Lulu like great businesses that are firing on all cylinders that are getting whacked for various reasons. One of them is Blackstone, a stock that I own that I think is going to continue to work. It's going to be a secular winner for the next decade. They are the premier name in private investments. The stock is in a 24% draw down. I think they're getting caught up in some of the news over the last couple weeks, >> which I didn't even realize that. >> Yeah, dude. 24% not nothing. Um, I think that news is blowing over. Uh, in fact, not I think I know it is, at least in the BDC land. Um, all of those names have have bounced pretty dramatically, but the private equity names and the private credit names, the asset managers have not. So, I think there's a great opportunity in Blackstone. Um, S&P is basically a monopoly. I don't know if the story there, so that's only 11% off its highs. I don't know if the story there is a lot of these, um, uh, lower grade companies are getting raided by not the big three. So, maybe that's hitting it a little bit. And then and then ICE, which is the listings business, um New York Stock Exchange. I think maybe Josh, I'd be curious to hear your take. I wonder if this is getting caught up in the prediction market, maybe taking some market share, which I do not think is going to happen. But either way, there is >> ICE just made a huge deal with Shane CPPley at um >> Poly Market >> at Poly Market, which is coming back to the US. >> I think ICE is like spreading its bets on the roulette table. And if this is really going to be a big chunk of financial activity in the prediction markets, they want to have a dance partner. I don't I I don't I don't know. That doesn't look like that severe of a a pullback compared to >> It's 20%. >> You know how much it's how much it's Is it? >> Yeah, dude. >> Which one are we looking at? Oh, the orange one. >> Yeah, it's it's not nothing. So, I think >> I got to dig deeper into that then. I don't know what's going on. >> These names are down a lot. Um so, I think there's opportunity there. Uh, I'm >> Oliver Ruff says it's a mom Donnie crash. >> Yeah, the New York Stock Exchange is now >> Oh my god. >> The New York Stock Exchange is now centrally located in the People's Republic of New York City. >> All right. Well, >> if you believe that, >> maybe there'll be a transaction tax. >> You if you believe that's the story, then buy this with both hands. Josh, make the I mean, I'm sorry. Mystery chart. What do we got? >> All right. I'm longing this stock. Okay. >> We haven't talked about it in a while. Let's go. What is it? [laughter] I love it. Let's go. [laughter] All right. Give me one clue. How about this? How about this? Market cap. Is it over under 25 billion? >> Way over. >> Okay. Okay. Um All right. I need another clue. >> Um it's an ARR story. >> Okay. [snorts] Is this this is as of today basically? Yeah, look look at the dates on the bottom. I'm not tricking you. Just I'm just double checking. All right. Uh one more one more clear. So it's an AR story. It's a large C very large stock. What else? >> I own it basically. I own it basically since inception. I'm one of the first people to own the stock and I have a four four or 5x return. >> Okay. Nvidia. >> No. >> Oh, okay. Uh >> reveal. Go ahead. >> Too many clothes. Reveal. >> Can't wear them all. Crowd strike. >> Oh, I should have >> This thing hit this thing hit 551 today. Good for you. >> It's unbelievable. >> Good for you. Great. Great. >> I have a post I have a post reveal chart I want to show you. >> Great winner. >> So, this stock is up 852% since the IPO. That's a 42% annualized return. Market cap is now 140 billion. And I have to tell you, I don't own enough of it to like really take a victory lap. I own a bunch, but like this was the most obvious bull market to have foreseen in advance. You you didn't know that Crowd Strike would win. They've obviously are amongst the winners. That you couldn't have known. Yeah, >> but I think the takeaway here for me for the future when you see an obvious bull market and you're not sure who's going to win, but like take a shot because like you had to know that cyber security spending was going to be in a bull market for the ne at least the next half decade to decade. You had to know it. And if you knew it, me, I'm talking to myself should have been way more aggressive. If I should have owned five of these things and never sold. >> All All credit to you. Can I ask you one thing before we head home? What's the next one, please? I need it. >> Dude, I don't know. The next thing I buy, I'll probably get cut in half. >> This is This is This is a great trade. I'll credit it to you. And not trade. Hold. Great. >> And uh shout out to a friend of the show, George Curts. And uh I know he listens and uh what an amazing job this guy has done. not without hiccups and setbacks along the way, but like man, you talk about a company come public and just absolutely crush it for public shareholders. This is And by the way, in his spare time, he he won the lemon. >> I don't know if you know that. >> Hey, wait. Literally won the race. >> So, when when was the massive outage hiccup? Was that last summer? >> Two years, two summers ago. I think it was summer 23. >> The stock has definitely doubled, maybe even tripled since then. And I remember you were on TV. You sounded like Alex Karp. You were so mad at people selling the stock. Well, it's Well, so I like I I guess I was just saying like, "Okay, now you're going to sell it." Like they they made a mistake. They had to clean up the mistake. It'll be a financial fix. They'll call their customers. They'll apologize. Maybe there'll be a fine. Life will go on. You're going to sell it today. You sell it 30 40% of the hole. This is the but you know oh and you know what that outage actually should have taught you about the company >> how important they are. >> Yeah. >> That glitch in a software update disrupted the entire planet. >> So it it was the summer of 2024. So the stock it got as low as it got as low as 200. The stock's at 532 today. So again you nailed it. Good. Good for you. >> I I I mean I I can't sell it now. >> I can't sell it. >> Yes. Like I look at that chart, but one more time with the chart. >> No, but this is why you're good at you're very good at >> I know I know it could pull Look at Look at how severe some of these pullbacks have been. >> Yeah. >> So, but like so so what? >> I'm not I'm not selling. >> Not so what? Not so it went from 300 to one to 120 and you held it. That's That's >> I know. >> Good for you. >> What did I tell you about the wheelbarrow? All right, guys. We uh we appreciate everybody who joined us for the live. We love you guys. Thank you so much. We miss you when we're not here. I want to remind everybody tomorrow's Wednesday. It's an all new edition of Animal Spirits with Michael and Ben Carlson. We'll do Ask the Compound later this week with Duncan and Ben. And then it's an all new edition of The Compound and Friends. And boy, do we have a special guest on tap. You guys are going to love the show this Friday. I guarantee it. Thanks so much for being here. We'll talk to you soon. >> [music] [music] [music]
The Stock Market is Secretly Getting Killed | WAYT?
Summary
Transcript
[music] Okay. Ready? You ready? >> Absolutely. Born ready. Let's go. >> All right. Ladies and gentlemen, boys and girls, children of all ages, welcome to an all new edition of what are your thoughts? >> What are your thoughts? >> The longest running uh show on our YouTube channel, the Compound YouTube channel. Um, Michael and I have been at it since 2018 in this format. There, some of you remember there was a time where we used to surprise each other with topics. >> Not forgot about that. [laughter] >> Not our best content. Uh all right. [laughter] Uh I think no big deal. We did it for four years. Guys, on this show we uh we talk about all of the most important things happening in the market, in the economy, in the financial news. We stay in our lane. We don't veer off into directions [music] where we don't belong. We try. >> I thought we were doing the race today. We're not We're not opening up with the race. >> What's the race? >> The mayor mayoral race. I thought we were starting the show. >> No, stay out of that. I for one embrace our new um socialist leadership and uh I don't know. I I'm out. I'm at a loss for words. All right. Anyway, we're going to stay in our lane. We're going to do stocks. We're going to do bonds, interest rates, tech, all the stuff that you uh you count on us for. I want to say hello to some people in the chat. But first, a word from our sponsor. Michael, tell us about the sponsor. >> Today's episode is brought to you by Cran Shares Morgan Stanley. Ticker MS, neither here nor there. They project the humanoid robotics industry could grow into a $5 trillion market by 2050. And investors are taking notice. Crane shares KOD ETF. I call it KOID. KOID KOID provides equal weight exposure to the companies powering this revolution. >> All right, I'll keep going. It's equal weight methodology. No, no, no. You're next. You're next. You're next. It avoids outsiz exposure to mega caps like Nvidia or Tesla, which many investors may already own while still capturing their influence on the theme. Josh, don't even bother. I got this. Coin's holdings include innovators like Robosense. That's a company specializing in LAR sensor technology. Ube, a significant humanoid robot maker, and Horizon Robotics. Advancing AI chips that bring robots to life together with other holdings across Asia, the US, and Europe. KID offers a broad-based way to invest in the rapidly emerging humanoid robot sector. Learn more at KOID. >> Read the disclosure, please. Koid is non-diversified. Diversification refers to theme, not regulatory status. Holdings change. See top 10 at craneshares.com/koid. Review the perspectives for risk and details. Investing involves risk including loss of principle. KOID is distributed by SEI Investments distribution company. All right. Shout out to uh shout out to Crane Sharers and um shout out to you guys that are joining us in the live. I see Chris Hayes is here, John Carlo, all all the all the gangsters are back. Curry Dip, C. Paul Breezy, we appreciate you. Ben Lupu, who else? Everybody's here. Um, it's an exciting time. I was saying to Michael before we came on, when it's not earning season, I don't even know what we talk about because when it is earning season, there's almost too much to talk about. It's just uh it's a deluge, if you will. What do you think? >> Well, you know what? I'm here for it because August in particular, sometimes too, it's just boring. There's nothing to talk about. stocks go up 40 basis points every day, whatever until you hear from the companies and we're gonna get into it today. Uh like in between times when there's nothing when there's no macro news going on really like a little Fed stuff here and there, it's just boring. We're saying the same [ __ ] every week. So, I'm here for it. I'm excited. There's new stories. There's news to talk about. Let's talk about it. I agree. Even the stuff that goes down that I own, at least it's like a little bit of variety. Um cuz that that rally from July into year end was sort of relentless or year end into into the fall was sort of relentless and now there's opportunities being created finally. >> All right. So Palanteer is the big one. I can't believe it's the big one cuz like comparably speaking its financials. It's not that big of a company. It's not small. They're on a run rate that's like four and a half to five billion in annual revenue and they've they're growing faster than almost any company I could think of. maybe any company I could think of not only growing but growing profitably and a lot of knocks on the company about its lack of profitability when it came public now look absurd in hindsight this company is minting money >> for a $500 billion company now obviously the question is is that valuation justified and you know we'll find out in due time >> yeah it's $450 holy [ __ ] that's the other thing >> dude it was $500 yeah it's huge >> I mean they've been all right so they're only public for 2 years, but they've been in business for 20. I think it's worth point the company was founded in 2003. So, it might seem more absurd than it actually is, like how quickly this company got to uh a half a trill, but be that as it may, this is a huge business um or or a huge market cap and a fast growing business would be the way I would phrase it. Do you think it's weird how defensive he is >> and combative he is? I do. I do. Um I don't think it's a great look. Um in particular, I think I don't know if he's talking to Bur directly, but he's yelling at the shorts. There are no shorts. I think we have a chart up. Throw this the chart up of the shorts. There's like 2% of the float to short. No, there are no shorts there. There's nothing here. So, I don't know who he's talking to now to the I think you know what he's doing. He's galvanizing his base because his base are retail holders and even if the shorts are imaginary, they're not imaginary because Barry just said he's short. It's like [ __ ] those guys. It's like we're in this together. We're saving America. We're making money. Why would anybody be short this company? Now, I'm I'm kind of sympathetic to like, why would you be short this great American company that is trying to defend our nation? It's doing all of these great things. >> It's not personal because it's not personal. That's why you'd be shorted. >> I understand why people are shorting the name and I understand him as the leader of the company. If this was you, you maniac, you would be relentless if there was anybody shorting your stock, your company, and you were the leader of the company. >> So, that's all right. I'm glad you said that. I do think when you're running a business for 20 years, something that you built with your bare hands and you've had criticism the whole way up, not from the investor class, but from political people, journalists who hate his message, his America first message, and I guess like a a lot. So, he considers himself to be center left. In today's America, he's obviously not. But I do think he gets a ton of criticism from the left where he's a war profiteeer and uh they're spying on everybody and he's like almost too gleeful about helping the Pentagon drop bombs in other countries and there's just this like distrust on the left of the military. There always has been. This is nothing new. And he sort of became the face of that as the AI enabler of the US military. For better or for worse, I would point out he's doing a ton of work with uh militaries and governments all over the world, including in Europe. He sees himself as somebody who's helping to erect a bullwark of technology against the enemies of the allied countries, what we think of this traditionally. So, he's kind of got that chip on his shoulder where they've been giving him [ __ ] in in in the press even before he was a public company. So, I understand the aggravation like why do you guys keep betting against me? I totally get that. >> But that that's one side of it, right? It's the political angle. And then the other side of it are the professional investors. >> I'm using air quotes, who think a stock is expensive. He's like, "Fuck you guys. You've been calling my stock expensive for the last 300%." And meanwhile, And meanwhile, fine. And meanwhile, my investor base, the quote dumb money, look how much money they're making. you arrogant pricks are talking [ __ ] about about us. >> I also think it's really hard as a founder who's still the CEO to disentangle people's um skepticism about your stock from being like skepticism about you. >> Yeah, it's him. It's his baby. It's his entire I think he like thinks of Palunteer and himself as interchangeable and obviously >> they are >> they they are right they're forever entwined. the where does the person end in the company begin? There's no line because that's what it is to be an entrepreneur and to build something. It's not he wasn't a hired CEO. >> Well, and guess what? You're 100% right. And the reason why they you can't untangle the man from the company or from the stock is because part of the thesis for shorting the company has nothing to do with the fundamentals. We're about to get into it. They are firing on all cylinders. The company is on fire. Um, but the people that are short would would say it's it is a great company, but it's not a $500 billion company. >> Oh, that's the question. Okay. >> And and the reason why it's a $500 billion company is because you are pumping the stock to retail investors. >> So, so that's a really great point. Like Bur does all this cryptic [ __ ] He's like Drake with the with the tweets. He like doesn't like actually come out and say what he wants to say or he drops hints that he might be long or short something. Um, I wonder if you sat down with Michael Bur, would he say exactly what you just said? Yeah, of course the company's doing great. Like, so I try to make that point on TV today. The bears aren't saying this is a bad company, >> just too expensive. They're just saying like investors today are paying for like growth from 10 years from now. Like it's been pulled forward. >> I don't hear anyone. This is not All right. You know what this is not? It's not valiant. >> No. >> Okay. It's a it's a really important distinction because in that case if people were saying Alex Karp is a fraud, Palanteer is [ __ ] then his combiveness would be fully understandable. Like how dare you say that? People are saying the opposite. They're saying investors are way too excited about this company despite the fact that things are going really well. >> Let's get to some of the fundamentals. pull up pull up the first their first slide that talks about some of the growth. >> All right. US revenue grew 77% year-over-year. I think the overall company revenue was up 63% was the number I heard. >> Dude, 20% quarter over quarter is why >> right sequential. So this quarter versus the prior quarter, not last year, 20%. >> We'll get to the 40, but look at the look. Okay, so closed. They closed 204 deals of at least a million dollars in revenue. 91 deals of at least $5 million in revenue and 53 deals of at least of at least $10 million in revenue. So this idea that it's just government spending, it's all government contracts, not true. Just not true. >> No, they're they're adding corporate customers, what they call commercial customers, um here's the the total contract value, TCV is the is the number they use, is $1.3 billion, up 342% year-over-year. That's I don't care what business you're in. If you're adding contract dollars at that rate, you are doing something very right. He obviously is the best version of a company helping other companies implement AI. >> Hands down. >> And and and also a lot of traditionally the highest growth companies are doing so because they're giving the store away, right? It's either negative value contracts or whatever. They're doing it with a margin rate that is off the charts. So they they're obsessed about the rule of 40, which is this term in enterprise software that measures your how how profitably you're growing. So your growth rate and your profitability and they're off the charts. John, throw some charts on. >> 115 114%. >> Their their rule of 40 score. >> This is them compared to enterprise software companies that have over a billion dollars in revenue. The next chart shows them compared to I think the top 25 companies around the world. Who's even close? Uh who's next? Nvidia. >> Nvidia. And and who's underneath him? I can't I can't make that out. >> Doesn't matter. They're all The point is they're off the charts. >> It looks like that is uh Rocky Mountain Chocolate Factory. >> That's exactly >> I don't Dude, I don't know what that says. L >> I can't say it. >> L L. Is that Lily? >> Could be. >> It could be. Right. Um go back to the Go back to the prior. There's nobody. >> No. One more. One more back. >> No, this is it. >> The rule is it. >> Oh, this is it. The rule of 80 frontier. So where like the 80 the 80 comes from or the rule of 40. The 40 comes from that combination of profit margins and revenue growth. So like what they're doing is not being done by anyone. And when he says that, he's not lying. >> And it's accelerating. So we have one more chart. Look at this. Look at this. It's accelerating. >> [snorts] >> It's at the point where every large company and every government around the world is going to be doing tens of millions or if not more in Palunteer business if the if this continues and he knows it. And so he's basically like, "Okay, let me get this straight. [snorts] Of the 5,000, 3,000 4,000 publicly traded companies in America, US and Nvidia, that's who you want to be short, >> right? like literally the two best companies on earth. >> Um in the chat people are pointing out Bur talked about getting short the um the semiconductor stocks last year. Not not a great idea. Um short media at different times. >> But it doesn't matter what he tweets because his we see his performance and this is a great lesson. Forget what they say. All right. They could change their mind. It doesn't what they're you look at the 13Fs. It's it's in the past. His performance has been kick-ass. He's been doing really well. So, don't worry about what he says. Ignore it. >> What if he short? You're right. What if What if he bought puts two days ago and he covered them today? The stock went down 8%. Right. >> He probably probably would have made money. So, how do you know? That's one. Two. Obviously, we've talked about this before. The dollar amount. People are people are calculating the notional value of what those options contracts uh stand for and they're saying, "Oh, it's half his fund is in puts." I very highly doubt that's the case. That's not that's not how to calculate what his actual financial exposure is. >> Yeah, it's leverage. >> It's cuz it's le okay. Um, look, I think there's room for both of these guys to be right. This stock could pull back 20%. I think not even violated its 200 day moving average. >> It's up. It's up still. >> Can make money and then it could rebound. >> It What is it up year to date? I mean, it's first of all, it's the the pullback is it's a baby pullback. Who? It's up 116% year to date. So, >> oh, here's the other thing. >> A highs. Big deal. >> They're buying back stock. >> Really? >> Yeah. So, if you're buying back stock, don't you want there to be short sellers >> uh knocking the price down? You could just buy them out of their positions on the way back up. He said he has $880 million left on an existing buyback authorization. >> Do you want to buy You want to buy your stock at 200 or you want to buy it at 180? >> Yeah. On a $500 billion market cap. That's not That's nothing. >> Understood. But I'm just I'm making the point he's buying he was they bought back stock last quarter. They didn't not buy back stock. So if that's >> He's rallying the troops. That's all that that's what all the rhetoric the rhetoric is. I do think he is very wisely creating this retail army of people that he has made a lot of money for. I think you're right. He's galvanizing that base and I'm seeing a lot of C CEOs get religion on this. Netflix just announced the 10 for one split um after a really long time of not doing splits. And then I saw the guy from Service Now on with uh Kramer, the CEO, and he was saying explicitly, "We're doing this split because we want to make it so that our fans in the retail investor audience can continue to fight with us and and be on the team and buy more shares." I do think that that's now part of the playbook post GameStop, post uh 2020. I think technology CEOs in particular, but not only tech CEOs, recognize the value in having a vocal >> retail shareholder base to counteract some of the narratives coming out of Wall Street and institutions. I think like having a rabid army, >> you better deliver. There's there's not too many Alex carps. >> Um, >> there's not too many then there's not too many palenteers. >> Well, the Service Now guy has made a lot of money for uh investors, too. So, and and obviously so is Netflix. And I think um deliberately like uh catering to that retail investor with a lower share price is part of the modern CEO playbook. >> Not dumb. I like it. Um we should split our stock. What do you think? >> Do five for one. What's up? Little five for one. All right. Um let's see what else. Let's put up the price reaction. >> This is This is >> got back into the gap. >> I mean, it's actually nothing. It's down. It's in I mean, okay. Stock's up 300% over the last year. It pulled back 8%. Who cares? >> It pulled Wait, the point is it pulled back to the level it was trading at on October 29th. >> Yeah. Who cares? It's nothing. >> It's nothing. Uh, total return. Give me it. >> Yeah. >> Next chart. So, this is 160% since Christmas. Like, I think you can live through a couple of pullbacks. It'll >> it'll it'll work out. Um his opening statement on the conference call was as livid as what he did on CNBC after um on Squawk. >> It was a lot. >> So I just I asked Sean to grab this. This is how he opens the call. >> Greetings. By any normal or even reasonable standard, these are not normal results. These are not even strong results. These aren't extraordinary results. These are arguably the best results that any software company has ever delivered. And that's not hyperbolic despite what your analyst friends may want you to believe because they've been wrong at every price. They're wrong in every single round. But of course, their perspective and they're not investing their own money. But a normal enterprise company should not have a rule of 40 above 100. He goes on, I'm not going to read the whole thing, but basically like his entire tirade at this, this is the beginning of the conference call, not the end, is like [ __ ] everyone who doubts us. And I do believe there's a certain component of the shareholder base that loves that. >> Yeah. >> And he knows exactly who he knows exact. Uh Joe Alto in the chat saying he sounds like Trump. Yes. deliberately actually ven diagram of MAGA Trump stock market investors and Palunteer shareholders. There's probably 100% overlap. >> Well, how about how about how about how about Tesla shareholders? >> Yeah. What's what's Elon going to do to catch up to Karp at this point? >> I feel like he's got to throw some punches, too. >> All right. It's an interesting story. Um >> yeah, very >> we uh we had a video clip. I'm going to skip it. I don't think it's that important. Um, let's let's go into AI generally. You're >> Yeah, before we get there, um, to set up some of the things that's been happening in earning season, um, the stocks that are beating, nah, whatever. They already got rewarded, not not shock, and we were talking about the setup going into earning season. The bar was high. Uh, and but the stocks that are missing, oh boy, it's it's ugly. So, uh, misses have traded 5% lower on average the day after reporting, which is steeper than any other quarter in the history of our data, which goes back to looks like 2016. Um, yeah. Okay. Now, listen. So, I I love this. I love a I love a healthy reset. I love stocks falling even as they beat. I don't like to see anybody lose money. I'm not bearish by any means. I don't celebrate this. But there is obviously a lot of optimism baked into the market based on whatever you're looking at option activity sentiment. It's all saying the same thing. A healthy reset just blowing a little foam off the top of the beer. Let's reset. Let's everybody take a take a take a beat. I like I like it. I like where we're where we're headed. Um Oracle stock closed the gap after that 25% pop after the open AI announcement or about to close the gap. like a lot of the holy [ __ ] this is like scary vertical price stuff that's all that's all gone so now we can move forward hopefully in a healthy way all right anything else we're getting we're getting a heads up Axon Enterprise which is Taser and Body cameras for law enforcement huge blow up after hours um that stock had been rallying up until late summer and then >> I don't know anything about that name >> it's it started so it's like it's like um part of this like military industrial complex like law and order Trump trade kind of thing. They um they sell a lot of equipment for military, for police, for law enforcement. Stock had been doing really well until late summer. It broke down in September technically and I guess now we know why. Um it broke its 200 day three weeks ago and after hours tonight it's down $150 a share. It's down uh 21% um on earnings. I haven't seen the earnings themselves, but um >> All right. So, so >> not great. >> So, topic two is a bit stale at this point. I put this in the dock, I guess, like a week ago, so whatever. Um there's an interesting thing going on in the market where you're going to see this for the next I don't know three years because the stock market is so concentrated you're going to see a lot of very bizarre days whether it's equal weight outperforming or underperforming like in a dramatic way. So, for example, last Wednesday, I believe it was um or Tuesday, it was the day last week, Bespoke tweeted this where they showed it was the worst breath for an update ever for the S&P. So, um there were only 200 I guess there was 300 300 more stocks were down than up, which is off the charts. Um to which you would say, "Oh my god, Brett, it's every you know, the divergence is 20,000 all over again. It's being lifted by a handful of stocks while the rest of the stocks are crashing. Not so fast. Next chart by Duality Research. So, okay, it was last Tuesday as you could see, but also look at all the odd days in 2025. This is the opposite. Okay, these are when you see a lot of stocks that are actually advancing, but the index isn't moving. Uh, well, how could that possibly happen? John, we could skip the next chart. Um, go to my MAG7 chart. So, here's the deal. This is wild. The mag seven, the mag seven, the market cap of these stocks are equal to the bottom 449 stocks in the S&P, which is stocks 52 through 500. >> Stocks 52 through 500 are as big as the MAG 7. So, you're going to continue to see these really weird days inside the market where you could have a lot of stocks that are down, but the MAG 7 is a great day and the index is up. Conversely, you could see the MAG7 drag the index down with a lot of advancers. So, not to throw out this breath data, but just it needs context when you see it going forward because we're going to continue to see it. >> Yeah, I see it differently. I think the market is secretly getting killed below the surface and I think it's a function of a couple of things happening. >> Wait, hang on, hang on. I'm sorry to cut you off. You can't This is not You think the market is secretly getting killed because there's data. The market is not secretly getting killed. If you look at the equal weight NASDAQ 100, Russell 2000, >> stop looking at that. >> Stop looking at the equal weight stocks. What do you mean? How much should I look at it? How is the market secretly getting killed? >> Look at look at the internals. >> I Okay, those are internals, but what internals are you talking about? >> 31% of the S&P 500 are 20% or more below their 52- week highs. That's >> um I have this I have this data from uh chart M. >> I have this chart too and I didn't put in the doc. You know why? Because there's nothing there. It's average. It's average. There's nothing there. No, your data is wrong. Your data is wrong. 25% since 2018. So, it's average. >> It's not 30%. The the there 30% of the index is is down what? 20%. You said 30. It's a big difference. >> Or more. >> 20% or more. >> It's basically average. It's average. >> 6 and a half% of the S&P is now at a 52- week low. And I bet today it's worse. That's as of yesterday. That is the highest level of new 52- week lows since li liberation day. The average is 2%. It's 6 and a half. I know there's nothing there until there's >> there's nothing there, BRO. I HAD HIM CHART this and I didn't include it because there's nothing there. >> There's something there for me. [laughter] It's nothing there for you. >> It doesn't It doesn't There's nothing on the chart. >> Keep going. >> Uh okay. Median RSI in the S&P, not average. Median is 44. This is not consistent with bull markets. Um, median percentage of stocks below 52- week highs is uh uh minus is 15%. I look uh oh, this is the one actually. This is the only one I care about cuz I keep this best stocks in the market list and it's and it's shrinking and 66% of the S&P 500 is actually down over the last month. It's nothing to be alarmed about. Wait, >> nothing to be alarmed about. But it's also to your the way you say it, it's also not nothing. We have a chart. >> Wait, hold on. Hold on. Hold on. I'm just saying. You said the stock market is secretly getting killed. Can we just >> secretly getting killed? >> Okay, >> dude. Dude, Pinterest is blowing up right now after the close. I know. Not saying it's nothing but no but words last week as of last week of last week UPS Nike the list of brandame stocks while they're not important in dollar terms relative to Microsoft the list of stocks that are important to other people that are breaking down slashcrashing slashmaking new lows for the year is alarming. >> It is. >> It's notable. It's notable. Alarming. >> Well, we're different people. We have different biochemical >> notable. It's notable. So, all right. So, throw up throw up the nearing historic extremes. The way that I see it, Josh, is that the stock market was max long complacent uh and max above its its 200 day moving average. It was 13% above. So, we're just getting a little reset, a little a little foam beam blown off the top of the beer. And you're right, there are a lot of names. We can go down the list of Starbucks, of Nike. Uh there's a million of them. There's a million names that are getting leveled. >> My friend, you are in a kayak heading over Niagara Falls talking about a little reset. Stocks are secretly getting killed. You're not you're we're not experiencing it as a marketwide disruption yet because the stocks that really matter are holding up. Apple. >> Okay. But Josh, there's Josh, there's an index for this. It's called the equal weight. This weights all of the stocks equally, dude. And it is down 2.4%. So, shut the [ __ ] up. This is the data. The median stock is down two Well, no, that's not true. The media stock is not down 2.4%. The equal weighted stock market is down 2.4% from its all-time highs. So, when you say the stock market is secretly getting killed and it's alarming, you need to relax. >> I'm going to tell you the greatest thing about the show is we'll be back here next week and then we'll see who >> I'm not making any Hold on. And I'm not saying any predictions about what's going to happen next week. >> Now, here's what I want to say that's constructive. We needed this to happen. It got too easy. >> People are walking around with their big giant balls in a wheelbarrow. [laughter] They're they're not afraid of they're not afraid of they're not afraid of a a goddamn thing. >> Investors were definitely feeling themselves. And then when you look at like the strategies of the world, some of these um uh some of the smaller AI names and you look at like some of the things that people have made money in the Olo, I I I don't think it's negative. I don't think it's negative to see 30 40%. Uh strategies down 200 points, 450 to 250 in like six weeks. I don't root for people to lose money. I just think like some of these types of things needed that correction for people to calm down like relax. Can I quote myself >> with the level of risk that they're that they're assuming is not risky? >> A healthy correction or what did I say? Healthy pullbacks only look pullbacks only look healthy in other people's stocks. But >> but it is true in my estimation. Now again, it's not a prediction of where we go from here, but this is normal. This is normal. You can't go up every day forever and ever. You can't have these pre-revenue companies at $30 billion market caps up a,000% without any pullbacks. It doesn't work like that. So, this is this is the way it works. All right, before we have a few more charts, I just I I want to call this one out. I I did it with Ben on >> Wait, wait, I'm not but I'm not but I'm not done. Do you know what went up today? >> What? >> I do know not a rhetorical question. >> Oh, Apollo went up 6%. They rallied financials. >> Home Depot went up. >> This is what gives me hope. They rallied the defensives, which you know, not looking for. Healthcare went up, consumer staples went up, but the financials were the best sector on the day >> up a half of 1%. No big deal. But like >> that tell that tell that tells me >> that we're not just throwing out the baby with the bath water and giving up on the bull market. What we're what we're doing is we're we're um tamping down some of the more egregious silly stuff. And then like Bergkshire went up today, >> I should say. Goldman Sachs went up today. >> Home Depot went up. >> Like there was some good stuff happening today that I like to see and I think is healthy. >> Uh healthcare rotation is who said is this JC? Rotation is the lifeblood of a bull market. >> I don't know. >> This doesn't sound like a JC. Somebody said, "I rampor." >> Who cares? All right. So, I I I gotta share this chart because I blew my own face off with this. I had chart >> kids. Yeah, I think that was an Aapora, but maybe not. >> Okay. All right. So, um $4 trillion for Apple. It's a lot of market cap. And I think it's easy to just look at like the numbers and not really appreciate the underlying businesses of how large they are. So, I had Matt show me their the their segments broken down and compare that revenue to other giant companies. So, let's start at the top. The iPhone, which is basically half of the revenue of the company over the last 12 months, the iPhone did more revenue than Bank of America, not a small company, and Meta, also not a small company. Services, which are which is the crown jewel. It's the entire growth engine, the entire margin expansion engine of Apple. services did more revenue than Target. $ 107 billion. Wearables, which is the watch and the and uh and the uh I what's the what the AirPods and and home accessories. I don't know what that is. Um that did as much money as Starbucks almost and almost as much money as Salesforce. All right. Now you go on down to the computers. The Mac the Mac did more money than Schwab. Significantly more money than Schwab. And the iPad, which I can't believe this. I I don't know. I guess I would have guessed. I don't know what I would have guessed. The iPad did $28 billion over the last 12 months. That's more revenue than AMD. Holy [ __ ] >> So, keep that chart up. This is this is my takeaway. This is how crazy this is. AMD has a market value of 406 billion. Now, we know it's growing faster than iPad, but the fact that those two companies are revenue parody is bananas to me. >> We could say the same thing with uh with with uh Schwab. So just like just for people's context, Schwab has a market cap of 170 billion. MAC, just Mac alone is a bigger business um than than Schwab. And obviously, you know, the example with Target, the example with um this is still uh chart. This is still the best business in the world. It's just not the fastest growing anymore, but it's still the best business in Apple is the best business in the world. They're making money in year 20 of a product like an iPhone where most consumer technology companies at best they've had like a three-year run, a fiveyear run. Think about Japanese companies selling VCRs. Like they they have extended the lifespan of consumer technology devices. It's miraculous and found a way to keep these things at 40 50% profit margins. the I guess the the other two that I would say are competing and you know whatever we're splitting hairs would probably be Microsoft and maybe Google [snorts] >> I think this is better business than both. It's just it's not growing as fast right now >> but it's it's just bigger >> and it's better >> and it's global >> and the margins are still there. >> Yeah, it's it's wild. It's really impressive. And um they just keep coming up with new things to sell the same customers, keep charging the same customers more money for the same product, keep improving the products. They they have this consumer lock in. And people are like, "Oh, why why is Apple 35 times earnings?" Because because do you know how hard it is to shock a company like Apple in like off its game? They just continue to deliver >> and the buybacks and the dividends. >> Yeah. But they I'm saying people look at it like a consumer staple. It's a consumer luxury/consumer staple. >> Well, it's the same story as Costco. Why are people paying 50 times earnings for Costco? I'm not saying it's justified because they know the customers are going to show up everywhere. It's consistent. It's you know what you're getting. There's no downside surprises. >> People are paying up for that consistency. Even if it's not fast growth, it is it's going to be there tomorrow. It's going to be there the next day. people drop an iPhone, break it, they're not switching to another phone. >> They're locked in. And that's worth a lot >> to to an equity investor. >> Uh, all right. Uh, I had we had one more thing in that in that market secretly getting killed. >> We had the the quotes from No, I don't want I don't want to I want to skip the next chart. It's a lot of charts. Um, the thing from Sam Row or the thing about >> You want Let's save the alt. Let's save the alt stuff for uh for for TAFF. All right, Sam Row. I woke up to see almost every financial news site I read feature essentially the same alarming headline. Here's a partial roundup. Goldman Sachs and Morgan Stanley CEOs warn of possible draw down. Wall Street Journal. >> Just seven more of those. Here's some quotes. Quote, "It's likely there'll be a 10 to 20% draw down in equity markets sometime in the next 12 to 24 months." Oh my god. All right, Creskin. uh things run and then they pull back so people can reassess. A 10 to 15% draw down happens often even through positive market cycles. It's not something that changes your fundamental or structural belief as to how you want to allocate capital. That's David Solomon from Goldman. The Morgan Stanley CEO Ted Pick said I think they were at the same event in Hong Kong. Um, we should also welcome the possibility that there would be draw downs 10 to 15% that are not driven by some sort of macro cliff effect. >> It would be the best thing ever if we get a 10 to 15% pullback on no tariff nonsense. No, oh no, the Fed is going to start hiking again. Like if it's just like, hey, we were over our skis and let's just reassess. Wonderful. Let's set up for the next leg higher. That's healthy. What's not healthy are no pullbacks. What's not healthy is up 25% every year with no that's what that's what leads to a crash. Okay, you need pullbacks. You need doubt. We need the wall of worry to be rebuilt so that we can climb it. This is all good stuff. >> Um, Wall Street Journal, Bloomberg, CNBC, Reuters, Business Insider, and Fortune all wrote the same article based on those comments from the two the two Wall Street CEOs. >> You're not going to not write it. >> I guess you have to write it. They must know better that they're basically saying nothing. They're saying water is wet. They must know that. Like the editors at least who are >> Yeah. I mean, what I guess David Solomon, the stock market goes up and down. Write it. >> You know what's an act, you know what's an article? Ted pick of Morgan Stanley, no correction in sight. That's an article. But, you know, that's not what happened. These guys are these guys are saying, "Look, it's a bull market, but so what?" >> You know who's not You know what's what's Buffett's problem? Get involved. [laughter] >> Get involved. >> Sit there. Do something. All right. Uh, great segue. Buffett is still a seller. Uh, reported earnings like a like a gentleman on Saturday. No fanfare, no conference call. Um, just a almost like a handwritten note on the website. >> We like it that way. >> Yeah. Yeah. Uh, Berkshire was a net seller of stocks. They now have 380 billion in cash and cash equivalents or treasuries and they bought back zero shares of Bergkshire Hathaway during the quarter and they're obviously still not paying a dividend for the uh 70th consecutive year. Let's put this chart up. [snorts] Not huge sales. They did that already in 24 when they liquidated twothirds of their Apple, but still selling. We don't now we don't know what they sold um chart off because that will come out in the middle of November with the 13Fs, right? The quarter ended September 30th. They have 45 days. Typically, they nail it to the day all of these big investors will come out with their 13F filing um in about a week and a half. Then we'll find out if they sold more Apple. Did they sell more financial stocks? What did they b what if anything? >> Who cares? They didn't they didn't sell anything. At least the net the net is is nothing. >> 380 billion. I saw an analysis where it's like really 360 billion because of the way something's being calculated. It's like who cares >> dude? What are we doing here? >> Um chart on this is Bergkshire versus the S&P. >> So Josh, we were talking about this with Bellki yesterday. Look at how wild Liberation Day was. Bergkshire was flying high. The stock was up like 15% while the S&P was down about the same. And this was like the anti- AAI trade, right? And then uh and then sentiment flipped big time. >> Yeah. Uh Heather M42 in the chat is saying BRKB is my cash equivalent. You know, it's sort of like it's sort of like a joke, but it sort of actually is. >> Uh no, it actually isn't. Just stop. I know what she's saying. I know, but it's just >> No, but it's I'm saying the market cap is increasingly becoming dominated by this almost $400 billion in cash. And when the market dislocates and has an event, people understand the potential for Bergkshire to actually turn that into an opportunity for itself. They haven't yet. >> If you are looking if you are like, "Oh my god, just AI everything. I can't escape it. It's 40% of the index. This is the anti- AI." If this is a bubble that pops, whatever, whatever. Uh, I think Burks will do just fine. Better than just >> They don't They don't really own anything. They don't own enough of anything that requires this AI splurge to continue. Although they are absolutely involved from the perspective of the utility. Um they are obviously supplying power to a lot of data centers. They don't mean to. That's that wasn't the idea when they bought up all these utilities, but um they're they're not not involved. They're just not directly uh involved. >> All right. We talk about some of the blowups from last week. >> Yep. >> So, this is one of the reasons why I love earning season so much. You got to hear from the people in charge because I listened to some of the Chipotle call and we spoke a couple weeks ago and I I I can't remember when I said if I was like probably I I think it was probably like, "Yeah, Chipotle might be there might be some value here." I'm not touching that stock. I don't believe this guy. I just I don't believe what he says. I think he's I I don't know. It's full of [ __ ] Might be too strong. I just I don't trust him. I don't like what he said on the call and I don't buy the turnaround. I'm not buying the stock. I don't care how low it goes. >> It's not a turnaround. Like it's it's like statistically this is not turn around. It's getting worse. >> So So here's here's the story. Um the increase in total revenue, it was not a lot. It was not a big increase. Uh was driven by new restaurant openings and a 0.3% increase in comp restaurant sales. Yuck. due to a 1.1% increase in average check partially offset by lower transaction of 0.8%. Nobody wants to pay $14 for a ball anymore. And this guy had the >> 17 >> and this guy had the gall to say ear this like he opened it with this earlier this year as consumer sentiment declined sharply. We saw a broad-based pullback in frequency across all income cohorts. Since then the gap has widened with low to middle income guests further reducing frequency. we okay so all this might be true but then he's talking about like a particularly challenged cohort is a 25 to 35 year old age group it's like dude yeah fine there's some challenge there but they don't want your slop anymore they don't want it it's there's no value there and in terms of like their their stories and the the metrics for what they're going to be doing to turn around to get people back to the store I don't buy any of it not going to work at all and the stock is getting creamed it's a 54% draw down throw this chart on this >> whole and the and the whole sector is falling >> it's not just them so three years throw the chart This is them versus their peer group. So, the peer group is not doing great either, but nobody wants this. Uh, who is this? This is um Charter had a great chart, the slapole economy chart. It shows the year-over-year comp store sales. >> So, what this is measuring is like, all right, store X, how do they do one quarter to the next? Forget about new store openings. So, Sweet Green, Chipotle, Cavo, all of these slopp I'm here for the slop. I don't mind the food. Nobody wants it anymore. >> Preferences are changing. So, don't tell me about the consumer. Nobody wants >> food. All right. So, a few things are going on. Number one, the relentless price hikes are completely out of control. I can't speak to Cava. The sweet green salad with like an extra protein or something. It's like a $20 meal in Midtown Manhattan. >> It's obscene. >> And it's and it's a bowl of slop. It's not good. The ingredients are ice cold. It just it's there's nothing appealing about it. >> I had compliments. It's good. >> Chipotle. Everyone knows the food has gone downhill, but nobody can pinpoint how they know it. Um, I've never liked it. I've eaten it. I just uh I never thought it was good. But now people that love it are My kid is a great example. He and his friends, they're off it. They just they don't think it's good. It's by the time they serve it to you and you pay, which takes 30 seconds, it's already lukewarm, getting cold. They're banging you out for guacamole. That used to be cute. Guaca is extra in this economy. It's not cute anymore. Nobody wants to hear it. They're not in on the joke with you. And it's too much money for what it is. They overexpanded perhaps. And um now they told me at we opened 64 Chipot lanes. What is that? The drivethroughs. >> Nobody wants the >> drivethrough. Stop. >> Imagine eating this [ __ ] in your lap while you're driving. Are you [ __ ] kidding me? >> So I I I'm not buying the turnaround either. If I want to if I want to bet on a on a turnaround in this space, >> I'm Starbucks. I'm not Chipotle >> or And there's a lot of opportunities. Starbucks for sure or Dominoes like not this not this. Um all right. Uh let's >> What do you think is going lower? >> I'm not buying it. >> Going lower or is it just not going to go up? >> Um >> Chipotle. >> I have no interest in Yeah. I'm looking I'm looking right now. So there's no bounce. >> Is it Is this alleged turnaround artist buying any stock? What's his name? Scott Boatight. >> Any ins any insider buying to speak of? Or probably not, right? >> I I I doubt it. I don't like this guy's voice. I don't like what he's saying. I'm not buying what he's saying. I'm not buying the stock. If it, you know what, honestly, if it went to like 20 bucks, I would just be like, "All right, fine. There's an activist coming in >> here. Uh, number of open market buys last uh 3 months, zero. But last 12 months, 24." >> Okay. >> 55 sells. >> No, no, hold on. If it go If it go If it if it continues to get smashed and activists will get involved. Does Bill is Bill Aman still in this name? >> Taco Bell might have to ride again. I I don't know if he's in it. >> Okay. if it you know what I'll buy it at 20. In fact, I would buy a lot at 20, but uh we'll see. But for now, no, I'm I'm not interested. All right, let's talk about Ferf. So, Fiserf is one of the biggest financial technology companies that you probably don't know what they do. They're in a lot of behind thes scenes processing stuff, but one of the things that you do know what they do is the the you you you tap on the phone. So, it's a Clover competitor. Uh the stock actually >> No, it is it is it is Clover. It's a toast competitor. >> My bad. Okay. who owns Clover. It's a put it's called point of sale payment system and you see it in a lot of stores and restaurants. >> So chart goat and he is a goat >> made me a chart showing >> so the stocks that are in the S&P 500 today. Okay. He went back to 2007. So we're not saying that this is a top 10 blow up since 2007. It's just that of the 500 names today, this is a top 10 blow up of the names that are in the index today. So chart on please. So, AIG on a one-day basis fell 61%. Josh, I know you remember that. >> Yeah, I remember almost all of these. >> So, a lot of these were from the GFC, of course. >> Um, but insurance, >> look, like you don't see a you don't see you don't see this that often. And why did this happen? Because the results were an abomination. Um, and what is hilarious to me, I mean, there's a lot of things that stood out. They repurchased 7.2 million shares in the quarter, returning a billion dollars to shareholders. Returning a Excuse me. Excuse me. Excuse me. You bought 7.2 million shares knowing full well that this is going to be an absolute annihilation catastrophe. What are you mental? This is the most uh irresponsible, reckless behavior I've seen from a company in a long time. This is nuts. Yeah, the core >> the numbers were atrocious. >> The core business is challenged. The growth part of the business, which Clover is part of that is challenged, the payments. Um, they had the CEO basically running and gunning this thing with buybacks and bravado. Then he parachutes out. I I don't know if he sold all his stock or I know he >> did. He did. He did. He did. He did. He did. No. No. Didn't he do it taxfree because he's now in the administration >> and now Yeah. Yeah. And now the new guy >> And now the new guy who's running this has to >> has to deal with it. Um >> it was a disaster. The fundamentals are horrific, >> right? I don't even know. Like I don't even know if this is a buy. Like it it No, >> it's it's not a bank. It's like a It's like a paper pusher. It's like an information solution for financial companies. >> So Clover is the crown jewel of this business. This was the growth engine. and they kept stuffing fees and stuffing fees into it. And matter of fact, Toast, which is a stock that I own thanks to you, uh, got killed on the back of this because it just threw into whole into question the whole economics of this business. Uh, Toast, we found out, is just fine. But they pissed off their customers so badly that it actually, I think I think Toast is gonna be a big beneficiary of this blowup. >> There's a great article this week. There was only one analyst who had a sell rating on Fiserf before it blew up and it's a 26-y old kid that no one's ever heard of before. >> Great story. >> And I love the I love the story. I'll just give people a little flavor of it. Ferves only bear is a Bloomberg story. Ferves only bear is a 26-year-old analyst who beat Wall Street and then of course I hit a registration wall. And I am a Bloomberg sub, but I it doesn't matter. the only the stock in the group that he really likes is Toast, which I like to see. Uh so we'll see if this kid is uh two for two. Um >> but wait, you know what's hilarious? Look at throw up this chart. So all right, I get it. No, it's hard to see the future. Nobody there's no sell ratings on Wall Street anyway. Whatever. But look at the hold ratings. Uh I guess it went up a lot, but like how are you still How are you still saying to your clients that >> Why didn't these people cut it to a cell? Because you know why? Who does that help? Who? No way. Does that help? >> In other words, a lot of the buys became holds, but none of the holds became sells. >> Yeah. Or or how about this? You hold >> If you were a hold, if you were a hold and a stock falls 44%, you better be up to a buy. Unless I guess you say no, the story's completely changed, but fine. But then go to a sell. >> The thing is, you don't want to go to a buy because you don't want the salespeople at the brokerage firm to start calling hedge fund clients and being like, "Hey, we're a buy on this today." So, you can't really Yeah, >> you can't really do that >> if you think that there are systemic problems at the company. You know, >> this is like a three or four quarter penalty box. >> Yeah, this is >> so you don't want your sales people taking a buy rating out to, >> right? Because this is about trading activity on the desk. That's what they're paying you to cover these companies for. >> You don't want to encourage the institutional customers of your broker dealer to start buying this thing. >> No, I guess I get it. I get going to a hold. It's four days removed from that bomb and the stock has no bounce. It It's It's another 52- week low. Guess what? >> So bad. >> This gap this gap unless this gap will never get filled, >> right? I don't This is This becomes a stock that you just remove from your life basically. >> Just get rid of it. >> Just get rid of it. >> Actually, Josh, but we we've been to the Fiser Forum twice in Milwaukee. >> Uh oh, right. They don't own the stadium. They just paid to name it. >> Yeah. Great investment. >> Great investment. Like FTX paid to uh paid to sponsor where uh the Miami Heat play. All right. It's a [ __ ] show. Um thank god thank god uh Toast reported and was a good report because this thing got lumped in with uh with that piece of [ __ ] And >> I bought more I bought more Toast on the day that Fiser board because I just wasn't buying that there was like systemic issues in the industry. I haven't had a chance to digest the toast numbers, but for people who are long-term viewers of the show, I am an investor, not a trader. I've been accumulating stock in the mid30s. Um, I think it's going to 6570 and, uh, I think it's one of the most exciting opportunities in software because of the degree to which they can truly own this TAM. Um, here was the report. Beat on revenue 1.63 billion versus 1.58 expected. Slightly missed on earnings. they did 16 cents versus 24 cents. ARR, which is the most important number, um, uh, annualized recurring revenue, was up 30% year-over-year to 2 billion. So that ARR is almost like annuitized revenue, provided they don't have high churn and lose a lot of restaurant customers. That's the best kind of software business there is. You can budget based on that. You can build on that. Um, you find other things to sell those same customers. They have a lot of different verticals that they've expanded into. It's not just payment processing. They're helping restaurant owners with staffing and what hours, which employees are working, different software. Um they're helping the chefs order ingredients. Um they're making loans to restaurants in some cases and that's a business now. Um and they are the most important provider of AI to the restaurant industry. Believe it or not, these uh companies are anxious to learn how AI can help them save money and Toast is on the front lines of getting these companies data ready to be uh used in various AI uh strategies. So, um they own that customer and uh they added uh 7,500 more net locations. There are now 156,000 locations all over the world and they partnered with Uber to help them expand that international TAM. I think Uber's in 100 countries. So, there's a partnership that was just announced yesterday where Uber's Uber Eats is going to pull in Toast data and help the Toast customer restaurants with their online ordering and Uber's going to help push Toast out to the rest of the world. So, I love that partnership. I own both stocks. Um, put up the Toast chart. Look, man. Like, this is volatile. It always will be. and it trades on rumors and innuendo and they make a change to the pricing on their website and people start dumping the stock cuz they think there's like weakness in the market. It's all stupid. U my opinion is the long-term trend is for restaurants to use more digital technology, not less in order to remain competitive. And this company has the the industry on smash right now, especially if Clover is going to be [ __ ] up for the next few quarters. Um, so I'm staying long here. Do Uber real quick. Um, this is another name we've talked about adnauseium on the show. My biggest position personally, stock fell uh four four or five% today by the close. Had an amazing report. Um, 22% year-over-year trip growth. Uh on the mobility side, 21% gross bookings growth, three and a half billion trips in the quarter, 50 billion dollars in bookings. Revenue was up 20% to 13.47 billion. Um crossplatform, which is the most important thing, Uber eats people using rides and vice versa. Um crossplatform users spend three times as much as everyone else. Um what what else did they say? Oh, uh, monthly active platform consumers are now at 189 billion. Next quarter they could have 200 million monthly activives at this pace. How many companies in the world have 200 million people using their product or service every month? It's a small list. It is not a lot of people. Not a lot of companies have that level. Um, they also announced a deal with Nvidia. They're talking about having a 100,000 autonomous cars on the road. Uber powering the the rides part of that business, getting connecting drivers with consumers, Nvidia providing the technology. And um basically what DAR has been saying is they don't think owning the fleet is the opportunity. They think that's going to be a private equity business much like real estate investment trusts own a lot of buildings. They think the cars will be owned in fleets by private equity and it'll be like an income play and the actual growth and value will acrue to the software and the and the technology, not the cars. The cars are rolling toaster ovens. So they are not pursuing that ownership strategy of the cars. They're sticking to what they do better than anyone which is connecting users. the manufacturer who's who's going to make the cars. >> Uh they have a deal with Lucid. Um so what they're doing is making deals with AI uh uh with uh with the autonomous vehicle technology companies who are in turn making deals with OEMs. So like everybody's going to make look in five years every car sold will be preloaded with this equipment to be level four autonomous. It'll be the ultimate commodity. It'll be like cup hold it'll be like cup holders. I can't wait. >> Yeah, you're looking at you're looking at the end of drunk driving arrests and accidents. >> It's phenomenal. >> Um, phenomenal. So, uh, Uber is going to play a really big role there and I think, uh, I think the stock belongs over 100 if today were a better day in the market. I think it'd be higher. >> Definitely. >> Um, all right. Uh, I was going to do Live Nation, but nobody cares. Okay. Uh, let's do make the case and then we'll do Mystery Chart. We'll get out of here. >> All right. I'm gonna go fast. I These are three companies that I own. Um there are so for for index investors there's no opportunity yet right like if you own the Q's if you own the S&P cap weighted there's nothing there right whatever um but as we mentioned at the top of the show uh albeit a little bit hyperbolic from Josh there are a lot of names that are pulling back a lot of really great names that are forget I'm not I'm not talking about Nike and Chipotle and Lulu like great businesses that are firing on all cylinders that are getting whacked for various reasons. One of them is Blackstone, a stock that I own that I think is going to continue to work. It's going to be a secular winner for the next decade. They are the premier name in private investments. The stock is in a 24% draw down. I think they're getting caught up in some of the news over the last couple weeks, >> which I didn't even realize that. >> Yeah, dude. 24% not nothing. Um, I think that news is blowing over. Uh, in fact, not I think I know it is, at least in the BDC land. Um, all of those names have have bounced pretty dramatically, but the private equity names and the private credit names, the asset managers have not. So, I think there's a great opportunity in Blackstone. Um, S&P is basically a monopoly. I don't know if the story there, so that's only 11% off its highs. I don't know if the story there is a lot of these, um, uh, lower grade companies are getting raided by not the big three. So, maybe that's hitting it a little bit. And then and then ICE, which is the listings business, um New York Stock Exchange. I think maybe Josh, I'd be curious to hear your take. I wonder if this is getting caught up in the prediction market, maybe taking some market share, which I do not think is going to happen. But either way, there is >> ICE just made a huge deal with Shane CPPley at um >> Poly Market >> at Poly Market, which is coming back to the US. >> I think ICE is like spreading its bets on the roulette table. And if this is really going to be a big chunk of financial activity in the prediction markets, they want to have a dance partner. I don't I I don't I don't know. That doesn't look like that severe of a a pullback compared to >> It's 20%. >> You know how much it's how much it's Is it? >> Yeah, dude. >> Which one are we looking at? Oh, the orange one. >> Yeah, it's it's not nothing. So, I think >> I got to dig deeper into that then. I don't know what's going on. >> These names are down a lot. Um so, I think there's opportunity there. Uh, I'm >> Oliver Ruff says it's a mom Donnie crash. >> Yeah, the New York Stock Exchange is now >> Oh my god. >> The New York Stock Exchange is now centrally located in the People's Republic of New York City. >> All right. Well, >> if you believe that, >> maybe there'll be a transaction tax. >> You if you believe that's the story, then buy this with both hands. Josh, make the I mean, I'm sorry. Mystery chart. What do we got? >> All right. I'm longing this stock. Okay. >> We haven't talked about it in a while. Let's go. What is it? [laughter] I love it. Let's go. [laughter] All right. Give me one clue. How about this? How about this? Market cap. Is it over under 25 billion? >> Way over. >> Okay. Okay. Um All right. I need another clue. >> Um it's an ARR story. >> Okay. [snorts] Is this this is as of today basically? Yeah, look look at the dates on the bottom. I'm not tricking you. Just I'm just double checking. All right. Uh one more one more clear. So it's an AR story. It's a large C very large stock. What else? >> I own it basically. I own it basically since inception. I'm one of the first people to own the stock and I have a four four or 5x return. >> Okay. Nvidia. >> No. >> Oh, okay. Uh >> reveal. Go ahead. >> Too many clothes. Reveal. >> Can't wear them all. Crowd strike. >> Oh, I should have >> This thing hit this thing hit 551 today. Good for you. >> It's unbelievable. >> Good for you. Great. Great. >> I have a post I have a post reveal chart I want to show you. >> Great winner. >> So, this stock is up 852% since the IPO. That's a 42% annualized return. Market cap is now 140 billion. And I have to tell you, I don't own enough of it to like really take a victory lap. I own a bunch, but like this was the most obvious bull market to have foreseen in advance. You you didn't know that Crowd Strike would win. They've obviously are amongst the winners. That you couldn't have known. Yeah, >> but I think the takeaway here for me for the future when you see an obvious bull market and you're not sure who's going to win, but like take a shot because like you had to know that cyber security spending was going to be in a bull market for the ne at least the next half decade to decade. You had to know it. And if you knew it, me, I'm talking to myself should have been way more aggressive. If I should have owned five of these things and never sold. >> All All credit to you. Can I ask you one thing before we head home? What's the next one, please? I need it. >> Dude, I don't know. The next thing I buy, I'll probably get cut in half. >> This is This is This is a great trade. I'll credit it to you. And not trade. Hold. Great. >> And uh shout out to a friend of the show, George Curts. And uh I know he listens and uh what an amazing job this guy has done. not without hiccups and setbacks along the way, but like man, you talk about a company come public and just absolutely crush it for public shareholders. This is And by the way, in his spare time, he he won the lemon. >> I don't know if you know that. >> Hey, wait. Literally won the race. >> So, when when was the massive outage hiccup? Was that last summer? >> Two years, two summers ago. I think it was summer 23. >> The stock has definitely doubled, maybe even tripled since then. And I remember you were on TV. You sounded like Alex Karp. You were so mad at people selling the stock. Well, it's Well, so I like I I guess I was just saying like, "Okay, now you're going to sell it." Like they they made a mistake. They had to clean up the mistake. It'll be a financial fix. They'll call their customers. They'll apologize. Maybe there'll be a fine. Life will go on. You're going to sell it today. You sell it 30 40% of the hole. This is the but you know oh and you know what that outage actually should have taught you about the company >> how important they are. >> Yeah. >> That glitch in a software update disrupted the entire planet. >> So it it was the summer of 2024. So the stock it got as low as it got as low as 200. The stock's at 532 today. So again you nailed it. Good. Good for you. >> I I I mean I I can't sell it now. >> I can't sell it. >> Yes. Like I look at that chart, but one more time with the chart. >> No, but this is why you're good at you're very good at >> I know I know it could pull Look at Look at how severe some of these pullbacks have been. >> Yeah. >> So, but like so so what? >> I'm not I'm not selling. >> Not so what? Not so it went from 300 to one to 120 and you held it. That's That's >> I know. >> Good for you. >> What did I tell you about the wheelbarrow? All right, guys. We uh we appreciate everybody who joined us for the live. We love you guys. Thank you so much. We miss you when we're not here. I want to remind everybody tomorrow's Wednesday. It's an all new edition of Animal Spirits with Michael and Ben Carlson. We'll do Ask the Compound later this week with Duncan and Ben. And then it's an all new edition of The Compound and Friends. And boy, do we have a special guest on tap. You guys are going to love the show this Friday. I guarantee it. Thanks so much for being here. We'll talk to you soon. >> [music] [music] [music]