AI: The hosts note the AI trade remains resilient, with mega-cap tech strength driven primarily by earnings growth rather than just multiple expansion.
Market Breadth: They caution that top-heaviness skews signals like 52-week lows and advocate watching S&P 100 lows for more meaningful risk signals.
Sports Betting: Prediction markets are growing, but fears of disruption to traditional sportsbooks may be overblown; DraftKings' selloff could present opportunity.
DraftKings (DKNG): Despite a deep drawdown and cost pressures, the guest views weakness as a potential buy-the-dip, arguing prediction market competition is likely overstated.
Quantum Exposure via Incumbents: Prefer established players like IBM and Alphabet for quantum computing exposure instead of risky pure-plays, given scale and commercialization pathways.
IBM (IBM): Positioned as a leading, safer quantum exposure with steady performance, making it a more prudent alternative to volatile small-cap quantum names.
Alphabet (GOOGL): Another quantum leader with vast enterprise reach and resources; presented as a better way to gain exposure versus early-stage pure-plays.
Tesla (TSLA) Context: Discussion emphasizes that Tesla’s long-term thesis hinges on Elon Musk delivering autonomy and robotics, highlighting the unique nature of its valuation and governance.
Transcript
[music] Okay. >> Mhm. >> We all set? We all good technically? Technically speaking. Okay. >> Fundamentally. >> All right. Hey guys, welcome. Welcome to an all new edition of What Are Your Thoughts? As you could probably tell, we are slightly ahead of schedule pre-taping. If you are watching live on YouTube, the chat is live. So, uh, so we're all with each other watching. Uh anyway, uh Michael and I every [music] week on Tuesday get together and discuss the biggest stories in the market, all the things that are moving stock prices, um all the the latest developments, and we have an absolute blast doing it. For those of you watching on video, welcome. And for those of you listening to the audio version, you know we love you. All right, we have a sponsor tonight. We're going to uh give a quick shout out and uh we will get on with the show. Michael, who do we have? Josh, curious about investing in crypto. Not sure where to start. Start with Grayscale. >> Grayscale is the world's largest cryptofocus investment platform and has been in crypto since 2013. That's a long time when you consider how early we option. Gosh, right. Is this Grayscale also offers the widest selection of crypto investment products in the US over 30 different funds for investors to choose from. That's plenty of choice for both first- time crypto choice or just crypto investors. >> I got it. Put the mic down. You may not be considering crypto for your portfolio. >> Are you doing it? >> I'm doing it. But whenever you're ready, Grayscale can be your guide. Grayscale. Invest in your share of the future. Investing involves risk, including loss of principle. For more information, visit grayscale.com. Thank you, Grayscale. Sorry on behalf of Josh. Let's get to the show. >> All right. My bad. My bad. All right, guys. Uh this is I think an interesting week because you you just have had this explosive comeback in large cap tech yet again. Like every time it looks like these stocks are faltering a little bit or the headlines have turned negative, the next day you get this huge rally in the NASDAQ and you get the same old same old. And I know people are looking for a turning point and they're pulling out all the stops trying to find reasons why we're about to have one. It just like it it's 24 hours and then the next day it's like oh my god the the the mag 7 is up again. The AI trade is back. Is that is that the way you is that the way you are interpreting it? >> That is exactly right. And until we see a 2000 level type of divergence where you see the rest of the market crashing and only the leadership holding up the index. I think a lot of this data that we're about to talk about is interesting but I think it might be noisy. So for example >> Christians de I'm about to bring the noise and it's good noise. It's quality noise. Dean Christians at Turning Point Market Research who used to be at Sentiment Trader. They do great stuff. So, they have this thing called the Titanic signal. And what that means is they're looking at the S&P 1500. When you have stocks that recorded more 52- week lows than highs for five straight sessions within a week of a multi-year high, the results on a forward basis are mixed to not great. Not catastrophic by any means, but here we're looking at all of the previous examples since 1950, uh, actually since 1928. And it it it happens not a ton. Looks like there's like 20 signals or so. And the upshot is this. Over the next four weeks, it's been positive just 40% of the time. So, it says not, they're not saying, you know, turn bearish or a crash is imminent, but over the next couple of weeks, historically, when you have this type of environment where the index is at an all-time high, but a lot of stocks are making 52- week lows, it just signals maybe maybe yellow light. That's all. Is it a lot of stocks making 52- week lows or is it just >> more 52- week lows than highs? >> Correct. >> Okay. >> But but by definition, that's that's kind of a lot. >> I especially in a bull market, that's when it's a it's not a lot period. It's a lot when the whole overall market is near an all-time high. >> So, I think the point the point that I was trying to make last week where it's like calm down when we're thinking about like stocks getting killed is that things have been so good for so long. So, this duality research company that I keep mentioning does incredible work. I didn't realize that we were just on the fifth longest momentum run since 1950 when measured this way. So, the they said the S&P 500 snapped a 137-day win streak without two consecutive RSI closes below 50. How nuts is that? 137 days without two consecutive closes on the on the S&P RSI below 50. That's the did they say the fifth longest the fifth longest streak since 1950. That's how good it's been. >> It's been relentless. The market has not been letting you in at an index level. Um how long does 137 days go back? >> Uh it's it's a long time there. If there's 20ish days in the month, I mean that's a lot. That's seven months basically. >> No, they can't be. Do they mean calendar days or market days? >> I would assume market days. >> Okay. I mean, it's a lot either way. I I think we would we would both agree. So, back to Turning Point. Why is it called the Titanic signal? What is >> I don't I assume that they >> like literally like the Titanic sinking or does it mean something else? >> I'm assuming >> it's like an iceberg. >> Ou [laughter] uh put back the table. The chart and table. Do they pay any attention to which stocks are making 52- week lows or is that not important? >> Um, I I don't think they went that deep. Or maybe they did. This is just >> because here's what I want to ask you. Who what's making a 52- week low right now? >> Uh, right this second. >> Yeah. >> Like what what is a 52-E low list even look like? Are the names even recognizable? because I I'm just trying to picture what would be on there besides consumer staples and I like I don't even think materials are on that list right now. >> So, let's see. Buy 52 weeks. Uh Airbnb is certainly recognizable. >> Okay. >> Uh there's a lot of names on this list. Um All State I hope I'm doing this right. There's there's a lot of names. Apollo. >> Okay. I mean, look, >> not >> I I just uh I just I I need more before I before I am willing to declare Titanic signal activated. I need to know what stocks are making 52- week lows, not just the fact that there are more stocks making 52-we lows than 52 week highs. >> Well, hang on. They're they're they're not they're not I don't think I don't want to put words in their mouth. They're not suggesting like everybody run the cash. I'm just saying this is a quantifiable system and the results looks mixed over four weeks. Now listen, you might say, "I don't care about four weeks." All right, fine. Fast forward. Who car? I don't care either. But this is the more this is the more interesting conversation. We've been saying that because the index is so topheavy because the top 10 names are basically 40% of the index. You're going to have these very weird occurrences where there's great breath, but the MAX 7 falls and the index is down. You're going to have the opposite day where it's reversed and you're there's be all tons of noise. So, last week we were talking about how far the >> I'm sorry, I just I got to interrupt you. Uh, the most prominent stocks on the 52- week low list right now, just for context. T-Mobile, ADP, that one's interesting. Martian Mclennon, which is insurance, Adobe, very idiosyncratic problems there. Constellation Brands, Gen Z doesn't drink. Dexcom, I don't know why. Trade Desk, their own issues. Chipotle, >> Monday.com, Surgery Partners, and Oscar Health, which is political. So, I I'm I don't want to explain away each one of those individually. I just I want people to understand it's not IBM, Exon Mobile, like it's >> it's like it's like really specific stuff going on on that list. So, >> totally. No, you're 100% right. Um, >> fly serve. I mean, think about what's think about what's what's going on there. It's I I just I guess I guess that's where I would draw a distinction and say Titanic off, not Titanic on. >> I I would agree. I would agree with you. All right. So, last week we spoke about that the median stock is at a 19% draw down, which isn't much different than what it's been for the last 10 years. Like, this is normal. This is this is not this is very, very, very normal. Chart on please, John. Okay. What's super interesting though, what I had chart do was all right, this tells you nothing. There's nothing here. Give me like some sort of baseline. Normalize this for me. So, next chart. So, I had him do this chart where it's how far the index is from an all-time high versus how far the median constituent is. And then give me the difference. Okay. >> So, this is the thing. >> This is the thing. You look what So it's it's been like this forever or forever said differently forever since the launch of ChachiBT. Look when this happened. Very interesting. So since the bull market started um or I guess close to the start of the current bull market in early 23 with tech recovering we have seen an increasing spread between the median draw down in stocks versus the S&P's overall draw down. >> Correct. And that's >> it's growing. >> So that's what I said like a lot of this stuff is going to be noise. That's why it's because the index is so topheavy that you have to take whatever Titanic and whatever else comes next. You have to take it with a grain of salt. Unless you really see, again, not to belabor the point, but unless you see the new 52 52- week low list really expanding, like really expanding, until that happens, I'm not that concerned. >> I would put it another way. I almost want to track the S&P 100 and tell me when that 52-E low list expands. That is so much more meaningful to me knowing what we know about um index composition overall. Um and look like Microsoft's in like a decentsized draw down for itself since earnings. Meta is in a big draw down 24% and and worsening. Um, and the headlines going against Meta have not been great lately in terms of like people leaving the AI team, etc. Like, I want to know when stocks, maybe not that large, but I want to know when the S&P 100's 52- week low list is is booming off the bottom >> and across different sectors that has more signal, >> right? Well, it almost doesn't matter because like let's say the S&P 100, like what sectors do you think are heavily represented there? Communication services tech financials, >> discretionary financials. Yeah. >> Like you already know what's in there, >> right? >> So, I want to know like like I I think maybe we'll rerun this next week and let's see if we can create our own version of the Titanic signal, but only focused on the stocks that matter um to to the modern market. >> And also, you have JP Morgan making a 52- week high yesterday. How bearish can you be? I also want to point out looking at the S&P 1500 may have been uh important historically. Think about how many quote unquote Russell 2000 divergences we've seen over the course of the last 15 years. Not one of them not one of them has been a canary in the coal mine. They just haven't they haven't been important. at best at best they've been uh they've been concurrent indicators of like economic data but not S&P they don't >> and if anything they've been the opposite when they've been a divergence they catch up like that's when you want to buy the breakdown >> I agree um let's do our own Titanic signal but let's look at lows let's look at 52 week lows in the S&P 100 and let's see historically whe uh historically over the last five or 10 years that's been a better signal than this one. >> I'll get chart kit on that. But uh anyway, shout out to Dean. They do great work over there. All right, this next segment that we're about to do, Josh, it's brought to you by Fidelity Trading. >> No, we're not there yet. We're not there yet. >> Oh, we are. Oh, okay. We are there. I'm sorry. >> Okay, >> I stand I stand corrected. >> Okay, >> I stand corrected. >> So, this next segment is brought to you by Fidelity Trader Plus. Check out the new platform that syncs your data across mobile, web, and desktop. We are going to be highlighting the work of friend of the show Yurian Timmer who is easily on the Mount Rushmore of Chartists. Like he just he's got a unique style. He does things that you've never seen before. So for example, >> Ben and I were in Vegas last week when we were talking about the cape ratio and you don't really hear too much talk about it these days. And the one of the reasons why it's so particularly useless right now is because literally who cares about the data from the index 10 years ago and the earnings. >> Nvidia GPUs didn't even start until four years ago. Like it's it's completely dog So Eurion has and I I've never seen this before. He has a five-year cape which makes a lot more sense. >> So check it's more relevant >> chart on. So the five-year cape ratio is uh I mean also it's not cheap. I mean, obviously, but but to me, this is much more relevant than the 10-year. >> So, this is taking the earnings per share of the S&P 500 over the last 5 years and coming up with a price earnings ratio, which I I suppose like what does this really do? It It's all post It's all post pandemic. >> It smooth it smooths out the volatility of earnings a little bit. You're not just looking at quarter to quarter, year to year. You're looking at Is the purpose of this to say that if you take out the preandemic economy, that 5-year period, we're not as expensive as the regular 10-year cape would would indicate. Is that the >> No, no, no. I would say that this actually reinforces what we already know. Stocks aren't cheap. No We know. >> We know that. I just thought this was interesting. >> I guess what do you do with this information? Because the knee-jerk reaction would be, well, if they're not cheap, we shouldn't be buying or >> Well, hang on. We should be lighting up. >> What do you do with any information? Honestly, we're we're we're talking. >> No, I get it. I I think I think one of the things that you continue to hear is that forward returns fall as you're paying higher valuations, which of course is obvious, makes intuitive sense, but the thing that gets lost in that equation is not not if there's uh not if there's above average earnings growth. >> Okay, >> that's the lesson that that it's the lesson that we've learned over the last 15 years. It's It's not Cape is not in a vacuum. Why are stocks expensive? Oh, here's why. Huge earnings growth as far as the eye can see that. I'm so glad you said that. So, the next chart breaks down the mag 7 versus the I'm sorry, my bad. It breaks down it break down breaks down the equal weight trailing PE >> versus the cap weight. Did I say that right? Equate versus cap weight. And look at the spread here. It's enormous. So the cap weight trailing PE is 26 times >> which is obviously on the high side but look at the rest of the market >> very much in line with historical numbers. >> What does that mean? >> Very much 18. >> Okay. So if you if you equal if you equal weight every stock in the index, the market is not quite as expensive as the cap weighted version would it's and again it's 18 times is not what you would historically say is like a discount >> to history obviously, >> right? 18 times is not 1999. >> Okay. So, >> now now in in fairness to the bears, it's a bit of a parlor game because why would you equal weight it? Like the reality is that the biggest stocks in the market are also among the most expensive. >> Like why why we're equaling it to make ourselves feel better that it's not a bubble. >> So So allow me to tie a bow on this. >> So Yurian says since 2022 >> the MAG 7 is up four-fold. So it is next chart but its earnings are up threefold >> right >> valuations are up there at 36 times for the mag 7 but earnings have been the dominant driver period. >> Yeah. >> Not margin not uh PE not PE expansion which is um what a lot of people who have been stubbornly bearish continue to bang on about that we're uh paying higher and higher and higher valuations for stocks. um >> but justified. >> We're we're paying higher valuations for stocks because they're earning more money than people expected a year ago systematically. It's happening every quarter at this point. So that that game will end hasn't ended yet. Um so that's that that's a good explainer for where we are. All right, I want to pivot to um some Schwab stuff. Uh, first of all, here's our friends at public making a definitive statement about whether or not sports betting should be side by side with investing in the same app. So, this is Life Abraham. He says, "We ran an ad in the Wall Street Journal today. This is a full page ad for people listening, not watching. Wealth >> wealth is not one in a bet. If you're let's say if you're looking for a broker that's not also your bookie, we invite you to try Public. And of course, full disclosure, Public is a frequent sponsor of uh of the Compound. What did you think about that that statement that they're making? >> I love it. They've been they've been very clear every time they advertise with us. We are a serious investment platform for serious investors. We are not here for gamblers. Um and their their platform shows it. doing great work on fundamental analysis and all sorts of stuff and they're making a stand and whether or not it's like you know a good business decision a whatever whatever we'll see but I love that they're doing it. >> What do you think their VC backers said um if and when they were consulted we are going to draw the line here we are not onboarding the next generation of investors who are conflating gambling with investing. What do you what do you think the money behind uh the company said? I would assume that their investors are deeply aligned with what they're doing. There's a reason why they gave them money in the first place. This is not a pivot. They've always been of the ethos that we're not doing that. We're not raining confetti down on our users. So, I would imagine that they're doubling down and they're all for it. If I had to guess, >> public doesn't call itself the anti-Rin Hood, but a lot of people when they're trying to understand the brokerage ecosystem, that's the way that they're thought of. It's like, okay, it's free trades. It's a super uh super slick user interface. like works at the speed of an app, not a clunky brokerage platform, but the big difference is they are not incentivizing their users to gamble um in the way that Robin Hood is. And that's sort of it's almost like a moralistic divide. Um and it's definitely a different uh investing philosophy behind, you know, like uh like Robin Hood the the ethos is whatever people want to do, we're going to create the best way for them to possibly do it. >> I I see I see both sides. public is like, "Yeah, we're going to we're going to try to encourage people to do the right things." >> So, I I think that's the So, this is like very on brand for that difference in in uh in philosophy. Um >> go ahead. >> I want to talk Oh, please. I want to just talk about the encroachment of um sports betting in general into the brokerage world and vice versa because I do think it's sort of a a two-way street. Um, I know the uh online casinos and the big gaming uh places would love it if the investment houses would stay out of their stay out of their business, but it's obviously not going to happen. And at this point, there doesn't appear to be anybody who wants to stop it. There are some state regulators that are coming out against this and and racing to institute some sort of a a ban in state, but at a federal level, it just it looks like it's going to be game on here. And there's going to be a ton of crossover between these three things. Prediction markets, sports betting, and stock trading. What are your thoughts? um prediction markets, sports betting and stock trading. Yeah, I think that the street is overestimating the impact to which these will have the prediction market specifically on DraftKing and Flutter. These stocks are both getting hit pretty good. I listened to some of DraftKings earnings calls. Quite literally, every single analyst call was asking about prediction markets. Um, and I think that this is going >> because they're because they're because they're nervous. The analysts covering these stocks are nervous. >> I think that this is going to be similar to um OpenAI is going to kill Google. I just don't believe that people I don't believe that customers of DraftKings and FanDuel, >> myself included, are going to leave that app and go to the prediction markets where I'm guessing the user interface isn't as good. I'm guessing the analytics aren't as good. I'm guessing the parlay experience, which is basically the whole business isn't as good. And I think that this is severely overblown. Now, if investors are looking using this as an excuse to dump a company that is still in a very competitive environment, DraftKings is still not gap profitable. uh they're still losing money. Now they're losing much less money. They're doing much better. But I think that this is an opportunity to buy DraftKings rather than uh rather than say that they're completely effed. >> All right, chart back on. So uh as we speak, um Flutter, which is the parent company of FanDuel, and DraftKings are uh well, let's let's go. DraftKings is in an almost 18% draw down from its January 2025 high and Flutter had been doing a little bit better um and then just completely fell apart and is now down 10%. And these are I look these are companies that like whether they like it or not they are going to be facing Robin Hood for this market because Robin Hood wants sports betting on its platform. that that chart that's not a draw down chart by the way. >> So DraftK draft it's way worse than that. Uh this is this is year to date. >> DraftKings is DraftKings DraftKings is in a 43% draw down. So this and and Flood is 25. So So DraftKings is getting killed and yes it's true that so let me I just want to quote this guy Jason Robbins. He's the co the chairman and CEO and the co-founder. >> He said this in the prepared remarks. So they said the word for predictions 42 times in the call. This is in the prepared remarks. He said, "I'd also like to touch on the recent rise in predictions. We have experienced numerous waves of competition in recent years, mostly from well- capitalized companies that have built or acquired strong sports betting product offerings, and those have had minimal impact on DraftKings revenue trajectory." He goes on to say, "We are excited about our pending launch of DraftKings predictions and its potential to expand our total addressable market in the coming months. We expect DraftKings predictions to enter many new states with sports events contracts, uh, unlocking a new customer base and revenue stream. Nearly half the country's population remains without access to legal online sports betting, but there are several other companies offering federally regulated predictions in all 50 states. So, he's basically saying like that should pave the way to more legalized sports betting. Then he last says to close out my thoughts on predictions, I would leave you all with three key takeaways. And the first is that we will pursue this opportunity. We will compete and we will win. >> Okay. But so here's the problem. So they are now going to go they're going to play offense which I think is smart and they're going to put prediction markets um onto their platforms. So in other words, the prediction market uh company like a cowshi for example could say why do you need to look at all these complicated stuff like odds and uh you know plus 150 minus 270 you don't need any of that just tell us who you think is going to win and here is the price of the contract. So from a simplicity standpoint, they are onboarding probably the youngest, least experienced gamblers who just want to express an opinion on something. And if it's sports, the user interface is way easier than what DraftKings and FanDuel are putting in front of you. That's for the the simplistic person who doesn't understand gambling lingo and doesn't really care to learn. Okay, that's a segment. >> But is that a is that a big business? Well, I mean, here's where I'm going with that, though. That segment will grow up. And do you want to try to onboard them when it's a higher cost to acquire that customer later when they're already very comfortable with the tools they use? That's why DraftKings has to go on offense, not just play defense, but they actually have to go into these markets and create sports contracts in the prediction >> uh in the prediction format. Y >> versus the traditional Vegas odds format. All but >> put that statement back up. >> Think about the statement. >> Um those competitors have had quote minimal impact on DraftKings revenue trajectory. Yes, we know. Chart off. We're not worried about the revenue trajectory. We're worried about the cost trajectory. We're worried about how much more advertising, you know, have to do versus new entrance to the market, including extremely powerful players that are well capitalized like like Robin Hood. So, that's that's the issue here. >> Oh, it's it's not a non-issue. I'm not trying to make believe that it's not an issue. I I am simply saying that I think they the 43% draw down. I don't know where the right numbers >> might already be overestimating. >> Yeah. So, all right. So, so Robin Hood So, Robin Hood said here's what Vlad said. prediction markets are really on fire. It's hard to believe that we launched this just about a year ago with the presidential election markets. We've doubled volume every quarter since then to 2.3 billion contracts in Q3. And the month of October alone was up to 2.5 billion contracts. So October by itself was bigger than all of Q3 combined. So um it is they said it's at a hundred million annualized revenue run rate already. It's not nothing. >> I'm I'm curious. I don't I doubt anyone's sharing this. I'm curious how many people place these bets and then never log in again because they're using small dollar amounts and they lose interest. >> Well, so I think a lot sports cuz sports has the ability to hold your interest throughout the course of a season and if you're a lifelong football fan, >> you don't need some you don't need somebody to keep stoking your attention. You are very aware it's football season, right? If you start placing random bets about like who's gonna win the Oscar for best picture or who's gonna win a who's gonna win a coin toss at a at a football game. >> That's the thing. Like how many people like all right that's like do they lose interest in the way that the app gaming like like uh Candy Crush has lost interest? I don't know the answer. >> I think they do. >> I think so too. Um that being said uh there is some tangible evidence that there is an effect already uh at both DraftKings and FanDuel at Bank of America downgraded both stocks to uh neutral from buy and they cited specifically the rise of prediction market platforms. There are other headwinds too as one of several factors eroding margins. Um, Koshi, uh, Koshi is operating in the US, but Poly Market is coming back to the US or coming to the US. I don't even think they're facing the full force of these two platforms, but they will be in 2026. >> And I think the market's discounting that. >> Okay. Um I also think I don't want to get there's like a whole bunch of partnerships being announced by these platforms as well which looks like uh like all right let me give give you a couple okay um they poly market today announced a multi-year partnership with prize picks which is sports gambling app um it's a very simple one to use it's not for hardcore sports people it's like pick which player is going to score the first basket in in the Lakers game tonight. Stuff like that. Um, but they're going to integrate prediction markets into Poly Market will into the prize picks app. Um, they also signed a deal with the NHL for league data and branding visibility. Um, so Poly Market's coming coming on strong with partnerships. Khi, uh, similar thing. they are starting to talk to all of the different leagues and you know they're like they're funded so they're also not going to go away. But if you think that this is already being priced in then DraftKings to me would be the obvious buy just because of how much more how much lower it is than than uh Flutter. Here's where I think this thing could get bigger than maybe I'm thinking if there's enough um let's say I respectfully dumb money because these are people that are not doing quantitative research. If you're betting 10 bucks, if there's enough volume there, then maybe you can see some institutional money come onto the platform and just eat their lunch. You know what I mean? >> Yeah. >> So maybe you >> like instit like people like institutional gamblers. >> Yes. Yes. Oh my god. >> Like like like not literally Jane Street just coming in and just quantitatively clipping these people, but something like that. >> Yeah. No, I you think you think the guys sitting at Susuana and Jane Street and Citadel aren't licking their chops. Like here's a multi-billion dollar marketplace with the dumbest in the world who think they know who's going to win a a a baseball uh series. like how how's like how like it they don't even directionally have to know the outcome of the games to figure out how to trick how to trick people into placing the wrong bets. >> Yeah. >> So, I'm not saying they're doing that. I'm saying I'd be shocked if they weren't talking about it, >> especially if this gets bigger and bigger. I think it's a really good point. Um, I thought it was interesting that Charles Schwab's CEO, Rick Worester, used his address at the impact conference to draw a line in the sand sort of. So, I wanted to I wanted to go through that. So, Schwab kind of has this reputation well-earned as an advocate of the in the American investor. um they are considered to be sort of like a paragon of um long-term investing and proper investing and sure they have gamblers on their platform like every other brokerage but they don't seem to be going out of their way to build products for those people. They seem to be very focused on just normal in investing. Um not going that far like they're still not even doing crypto to the extent that the other brokerages are. There's a lot of there's a lot of things about Schwab that is kind of slow money-esque. Um, the impact conference is an RAA event every year. And here's what uh Rick Worster said. Quote, "Only 5% of the people that go on gambling apps pull out more money than they put into the gambling app. It is the opposite of the benefits of being a long-term investor." He also said, "I just don't want young people in our country to think that betting on the Monday night football game is equivalent to being invested for the long term in stocks and bonds." Um, then they put out some content showing the difference between sports betting and investing. Um, drawing that distinction between like speculation versus goal oriented and and time horizon driven investing. So they're they're sort of like they're sort of drawing that line in the sand. But then and then they said the the company said they are monitoring the space and regulatory landscape closely with respect to prediction markets, but they don't they don't seem to they don't seem to even be considering it. Uh and I I guess my question to you is they didn't say that they would never integrate sports betting into the app. They just said that they said that they won't, but they didn't say we will never. Do you think at some point they might cave if we see all of the other competing brokerages, and there are many, just start to onboard at a furiously faster rate than they do amongst the younger demographic? >> No, I I just I don't think it's going to be furious. I think it's going to be a really shitty business. It's going to be really expensive. I don't think that all of a sudden these type of companies are going to say, "All right, I guess we're gambling, too." I just I don't think so. >> But they did but they did that with crypto. And we watched them do it. It It happened within >> It happened within the last 10 years. Everyone Everyone on Wall Street who started out tweeting retweeting Charlie Munger lines about rat poison and now we're institutionally investing in crypto. We're trading crypto. We're doing block trades in crypto. >> The spreads on crypto are still a mile wide. It's a very very very lucrative business. This is not >> okay. I respect I respect uh Mr. Worester for coming out and definitively saying we're not doing this. I respect Life Abraham for the same reason. I'm not opposed to sports betting. I just don't understand the necessity to have it be in the same app with investing unless it's just a a money grab. And uh I I I think the thing that will make this difficult for Schwab that they've planted their flag here is if um they just start losing this nextgen customer to an app that lets people do whatever they want and it sticks. Um because then they're going to have to seed this whole generational cohort to Robin Hood. Um, I mean the this is obviously crackhead activity for the most part, but like it's still activity and it's still new account growth. So if you if you think it flames out and 6 months from now, we're like remember when people thought they should gamble in their investment. >> You know what I I I do think that's going to happen. I think two things. I think it's a it's a thing and it's here to stay and it could be it could be a lot bigger than it is today. But also, I think this idea that everybody's gonna be predicting, not gambling, I mean predicting, I just don't buy it. You know why? Because with stock gambling, at least the market's open tomorrow. The stock was down 8% today. It could come back tomorrow. When you make a wager, a prediction, >> when it's done, it's done. And you either make money or you lose all your money. >> It's an options trade. >> So, people get sick of that >> Yeah. >> That feels that feels like lighting money on fire. >> I think that's a really good point. Also, like when you're gambling in the stock market, it's unless you're doing like a zero a day, it's not like you're putting up $500 and you win or lose a thousand or it goes >> a really bad trade is you lose 30%. It happens. You're not losing a 100% every time you bet. >> How long? >> So, I'm I'm I'm bearish on this whole thing. How long before we're seeing the apps say, "We will give you brokerage margin against your securities to play sports wagers." >> So, [laughter] >> can that be far behind? >> Barry just goes, "You want to call?" No, I'm just talking to a mic. [laughter] >> All right. Shout shout out to Barry. All right. You're you're up. What do you got? >> Happy birthday, Barry. >> What do you got? Um >> Okay. Uh this K-shaped economy stuff, it's too much. Happy birthday. >> Too much. >> Grab grab him by the shoulder and pull him on the air. Come here. >> He's gone. Um, >> I want to say happy birthday. >> Okay, so Torson Slack showed this chart, the Atlanta Fed measure of median nominal wage growth and he shows the lowest wage cortile to the highest wage cortile. And I think not I think the thing that they are trying to convey the thing the the place where your mind goes on this map is the orange line crashing and it is separating itself from that is the lowest wage separating itself to the downside from the second the third and the highest wage. And you can't look at this chart and look at the line all the way on the right without looking to the left. Look at the gains on the by the lowest wage quintile uh quartortile, excuse me, during the pandemic. So, I had chart kid, hey, you know what? I need to I need some context behind these numbers. Please remake this chart and show me the spread between the low wage growth, the low wages, and the high wages. And from 2015 to 2023 and really hitting a peak, you had the low-wage people out earn, not out earning, having a higher wage growth rate. Now, listen, nobody, certainly not me, is saying that, oh, low-wage people have done so great. That that's not the point. But the point is they've been they've had more gains than high wage earners up until recently. And now we have companies that are talking a lot about some of the pressure on low-wage consumers without talking about the fact that you bury them with price hikes. So you're seeing all of these fast casual restaurants say the same thing. But you know who you're not hearing say the same thing that that the low end is struggling. How come the banks aren't reporting that? How come it's only companies that are getting their bells rung because the low wage and everybody else say, "No, I'm not spending $14 on a sloppole anymore." >> Okay, I think you've just fallen into a classical mathematic trap with that wage growth for the lowest income uh uh group because it's off a lower base. So, of course, during the pandemic, it rallied relative to everyone else's wage gain. Um, we also had like no net immigration for uh uh for that period of time. We have that again. So like you I I guess what I'm trying to say is the people that are doing those low-wage jobs were so in demand during the pandemic because of how many other people just were unwilling to work if they didn't have to. And those are the people that literally needed a paycheck and had to. And I just think like that was a really unique period of time. If you go back to the 1970s, >> Hold on, hold on before you before you give a history lesson. My only point is this. You can't look at the right tail of that chart today without zooming out. That's the point that I'm making. I'm not saying that that that the low wage earners were having a party during the pandemic because you're right, they were the people that needed to be there. My point is, if you're using that chart to say that they're no longer making as much, uh, their wages are not growing as fast as the other parts of the country. And therefore, like that's the part that I have issue with. >> Yeah. No, I don't disagree with that. But that's not the K. That's not the the average hourly wage is not even the main premise behind the K-shaped economy. The the premise, at least from my perspective, is people that have investable assets versus people who are living check to check. It's not even about what the dollar figure shows on their W2, although that's obviously a big part of why they can't invest, what that dollar amount is. But the K the real story of the K-shaped uh economy is who has the luxury of doing a job an email/ cellphone job and who has to actually stand behind a counter or at a warehouse in person. That's the K-shaped economy. And then furthermore, who has financial assets that are benefiting from asset price inflation or the ability to borrow against them and who doesn't? It's not about this group was making $18 an hour and it only went to $19 an hour. That's it. It's it's almost like um it's it's part of the story, but it's almost incidental to the bigger picture, which is in a in the in the current K-shaped economy, if you don't have financial assets, you absolutely cannot keep up with the people that that do. And that's always been true, but it's never been more true. >> Okay, true. And I guess where I was going with this conversation is that we are listening to the earnings calls from these fast casual restaurants. Okay. And they're all blaming the low-end consumer without talking about some of the idiosyncratic things that have been happening in their space. Overexpanding, overcharging, and we listen to them and conclude, okay, the consumer is getting crushed. H how about this? PNC Financial Services Group. They said we were just looking at the deep dive on October numbers. Spending is robust and while it's a little bit stronger at the upper end, and obviously it is. I'm not saying it isn't. While it's a little bit stronger at the upper end, it's still actually hanging in there among lower-end customers. And just because they're not choosing uh to eat at Sweet Green anymore, it doesn't mean that it is horrific. So, for example, Buco Capital tweeted, "Fast food, especially fast casual, expanded too quickly, charge too much, literally trying to raise prices while commoditizing. Don't be so quick to assume the consumers hurting. Uh, GPV location was up for toast. People are still eating out. They're just voting with their wallet." I guess that's really the point that I'm trying to make. Another one, Wasteland Capital said most of these restaurant stocks were trading at 35 to 100 times forward PE just recently. Many still are. They were valued at a massive premium to the MAG7 and any comparable growth stocks in tech and AI. This is just a bubble deflating bubbles can't be sustained indefinitely. So if we led with that quicker, my point was not that the low-end consumer is doing amazing, but looking at these numbers and concluding that they're getting obliterated and looking at the stock's reaction and concluding that we're about to fall off a cliff, that's the part that I take umbrage with. All right, it's a fair point. And you know, one of the big mistakes to make is to look at stock prices and then um come up with a story, an economic story that explains the stock price because you're doing that in the absence of starting valuation. >> Exactly. So you actually so you could have companies that are doing very well. Their share prices aren't um their you know their customer is just fine but their stock prices are falling because maybe the per the the customer base that's doing well isn't doing as well as what people had thought and therefore the share price comes down. That doesn't that doesn't perfectly explain the actual economy. So I totally agree with you there. But I also can't ignore it and I do view the economy through the lens of the stock market. And I'm looking at a chart of uh Dine Brands Global, DIN. This is the parent company of Applebees and IHOP. This is literally feeding the bottom 20% of of income earners. We could agree on that for the most part. >> Okay. Um over the last three years, the S&P 500 is up 80% and the stock is down 60%. Then I take a look at Darden. Darden had been hanging in there until the tariff started all over again just um just in the last couple of months the story has completely fallen apart. Uh it was one of the best stocks in the market. It was on our list started to break down and we have we have seen this thing go this DRRi we have seen this stock trade from 225 to 171. There is no bottom in sight. It is breaking. >> It looks horrific. These are not QSR. This is not Chipotle. This is something different. This is family of four, probably two working parents on a Saturday afternoon or a Sunday night or celebrating a birthday party. These stocks look like that customer has literally hopped aboard an alien spacecraft and left the planet. Now, they may be falling too fast and and and this is not an accurate representation of what's happening with that segment of the market, but what if it is? So I I contrast the way those stocks are acting with the demand for GPUs [laughter] and and I just say if this isn't a K-shaped economy, what it what is? So I I I firmly believe that we're in this this period of time where anyone and anything that caters to the upper 20% of the country is just living in a dramatically different environment than anyone or anything that's catering to the bottom 20%. And it's growing more extreme by the by the day, not less. And I know there's a big fat middle that we're not talking about. And the middle seems to be doing fine. But K is is is Kaying. >> Here's another stock on the other side of that. Airbnb. >> Who do you think stays at Airbnb? What do you think the financial circumstances of people that stay at Airbnb? I'd say pretty good. This stock sucks because it was too expensive. >> I would not say pretty good. I would not say I would say the opposite. I would wait. Hold on. I know you don't see >> I know I know they have you [snorts and clears throat] couldn't pay me. I know that they have I know they have an upper end. I know like when you go to a really fancy place like Hawaii there really fly Airbnbs. I am aware of that. I don't think that's their bread and butter business. >> You think the average person that says in an Airbnb is in the bottom half? No, I think it's I I think it's all over the map, but I think where they make their money is probably right down the middle. People that price out an Airbnb relative to a hotel and conclude this will be more fun for our weekend trip or our family if we do if we do a big house, but I I think it's aggressively middle class where it's one end. >> I think it's I think it's up I think it's upper class. Upper middle at least. >> You think Airbnb makes most of its money from the top 10% of listings? I No, I didn't say top 10%. >> Oh, okay. Top 20. >> Uh, >> I'd be I'd be interested I'd actually be interested to learn. >> I think the average profile of an Airbnb customer is somebody that's making well above average. Like I would say three times the median >> US income. >> Really? All right. Well, it's not looking good for that stock. So, I don't I don't know what the story is there then. You think that's a good counterbalance to real estate sales in in luxury? Like I I guess I'm thinking about a different consumer. I'm thinking about the first class passengers on the airlines. I'm thinking about the people that are in these like AMX lounges that you >> I think a lot of those people stay in dope Airbnbs. >> That could be that could be I don't know I don't know enough about it, but I'd love to I'd love to find out. Either way, I believe in the K. You don't believe in the K or you just think we've taken the concept too far? >> No, no, no, no, no. I'm sick of every article acting like there's only a small group of people that are doing okay and everybody else the rest of us are struggling. I reject that. >> That's not true because everything is still too crowded. So that actually >> that's what I reject. >> That fundamentally cannot be true. >> I mean dude, last thing listen when we were at the Lions Commander game, how many Lions fans did we see? Are those all top 20% earners? >> It's half the stadium. >> So I just reject the idea that everybody's struggling except for the rich people that own stocks, right? That's a that's that's that's the key thing here. I totally agree. That's a that's a random NFL game on a Sunday afternoon. That's not a polo match. The people that are at that football game are middle class. They're not all stock market millionaires, >> right? >> Abs like absolutely. We I totally agree with you. All right. >> Let's talk about Elon. So Elon got approved with a wide margin 75 to25 for a trillion air quote trillion dollar pay package and people are up in arms. The stock is only worth a trillion half dollars. I had Sean make this chart. Their cumulative revenue since 2020 is only $431 billion. Guess what? Doesn't matter. Read past the headline. So the deal this is this is from this is from uh the FT. He's not making a trillion dollars next year. The deal sets up ambitious targets for Mus to unlock his stock payouts in a series of installments. To reach a trillion dollars, he must sexuples Tesla's valuation to 8.5 trillion, boost earnings 24fold to 400 billion, and sell millions of robots and autonomous driving subscriptions over 10 years. over the 10 years the plan covers, Musk will receive no salary or bonus. So, I don't even want to talk about the shareholder part of it, which was overwhelmingly in favor of it, because if he leaves, the the shares worth nothing. I just want to ask you this. >> I mean, >> imagine voting imagine voting against this. >> Will he get what's the bull case for Tesla without him? >> Will he get a trillion dollars? I mean, he'll I think he'll find a way to renegotiate this as we get closer to these deadlines. And yes, he will get it because what the hell what is plan B? Find a new Elon Musk. It's almost like hilarious that there are if you're voting against this, do yourself a favor and just sell the stock because you don't get it. You don't understand why why Tesla is Tesla and why the valuation is where it is. Like, if you instead of voting Elon out, vote yourself out. Go buy go buy shares in insurance company where uh the guy's only making $8 million a year because this whole thing is about him making robots. That's it. There's nothing else. >> They didn't even talk They didn't even talk. All right. >> 8.5 trillion market cap. 20 million Tesla vehicles I guess between now and then. Um 1 million humanoid robots. When does he have to do this by when does he have to deliver? >> I don't know. I don't 10 years. I don't. It says over the 10 years of playing covers. >> Let me ask you a question. What's a higher likelihood if they're going to sell a million humanoid robots with Elon or without? >> Right. >> You know what [snorts] I mean? 10 million active full self-driving subscriptions, operate 1 million robo taxis, 400 billion in adjusted Ebida for four consecutive quarters, and then develop a framework for a new CEO. He I don't know if he can do all of those things. Let's say he does half of them. You think they're not going to find a way to pay him just to keep him? Like like what? What? They're going to be like, "Ah, you almost did it. Sorry. See you later, Elon." It's the stupidest thing I've ever heard, honestly. >> So, in recent weeks, in recent weeks, we've made comparisons to other CEOs talking and acting like this. Sam Alman, Alex Karp, Elon just said, "It's going to be the biggest product of all time by far. Optimus is kind of like an infinite money glitch. Nobody's nobody's Elon. An infinite money glitch. He is a one of one. >> Uh I mean I I don't know anything about D. Like if you're a shareholder, you just you've put your fate in his hands and so far he's delivered. So there's no there's really no other way to think about the stock. If you're looking at this and calling balls and strikes on like whether or not they hit their earnings guidance from the prior quarter, etc. No one else that's involved in the stock is playing the same game that you are. They're all of your fellow shareholders are playing a different game. They believe that autonomous taxis and robots are going to be ubiquitous and that Tesla will make more money at that than anyone else. And if you and if you're looking at conventional metrics like how many cars they sell in Germany, you're you're watching a completely different sport than the one that you think you're playing. And I I just I feel like by now everybody should have gotten that through their heads. I I don't I don't know that there's anyone left really that's involved in the stock that doesn't get that. What do you think? >> Yeah. I can't imagine being on the other side of this >> if it's if it's pay Elon a trillion uh imaginary dollars over a 10-year period. If he gets earnings to 240 billion or whatever it is, 400 billion, >> give it to him. >> He'll have earned it. All right, move on. >> Um, all right. I got I got three stocks. I won't call them falling knives, although others have. I think I already know your answer. Um, we're going to play by buy the dip or no. Let's put up the first one. This is strategy one-year performance. It is now, forget about relative to Bitcoin. This is just the share price of MSTR. It is now at a 50.3% draw down. and it is officially lost half of its value from the peak which was almost exactly one year ago this month. Um it's a $235 stock that was $450. Uh do you buy this? >> I have z I have zero interest in this. >> I don't like that it made a new low relative to uh April 2025 because they actually own more Bitcoin now than they did then. the the premium the MNAV shrank from over 2x or maybe over 3x to 1.2 too. Maybe, listen, maybe they get it back somehow. I don't see how. There's other ways to get leverage in crypto. You don't need them. I think the gig is up and I have no interest in that stock. >> Do you think this stock ultimately will trade at a discount to its Bitcoin holdings? >> Most who were you saying this? Most close-end funds do. Somebody was saying >> yeah, I was saying that and I'm very wise. I I was just pointing out the similarity between this and a typical leveraged close end. And there leverage closed ends come in every flavor. They there are leverage closed end funds that uh buy mut bonds that buy corporate bonds that buy REITs or or um real estate debt blah blah blah blah blah. Almost none of them ever trade at a premium because why would they and almost all of them at some point or for most of their life trade at some sort of a discount to NAV and that's normal in the stock market. This is the aberration. Why would a company promising to dilute you? >> Yeah. >> And raising and consistently raising money in the market trade at a premium. It almost seems like now like sort of like a fever dream that it ever did. And I and I still don't quite understand the rationale. He's going to be really good at buying Bitcoin at the right price seems to have been the the bull case. >> No, he was he was buying Bitcoin fast and then he was diluting shareholders and it was working and now it's not working. So I have no interest. >> Okay. Uh, DKNG, >> I think you want I think you want this one. >> Um, I do. I mean, 30 bucks has been a level of historical support and resistance. >> Uh, what's that? >> When? >> Uh, in April of 2025, in August of 2024, and >> it's below, >> what' I say? 30 bucks. >> Yeah, it's it's it's lower now. >> I'm saying it's well, it's a it's a 3031. It's right there. I uh Yeah, I'm interested. >> 58% draw down. Uh, I don't know, man. This I I want to be right there with you because I I might agree with you that the fear of prediction markets is overblown and this could be an Alphabet-l like situation, but then I go back to like, well, what do they really do that anyone else can't do? In the case of Alphabet, like they do a lot of things that other people can't do. >> I know there's a million differences. And and to to your point, put it this way, I'm not buying it, so I don't want it that badly because ultimately they're still not even they're still not even profitable. Even though they're going in the right direction, I'm not buying the stock. >> All right. >> But if I had to choose between the three, this would be the stock. >> Okay, last one. Also a 50.1% draw down from the all-time high. >> Coreweave. >> Nope. n uh $91 stock hit a high of 180 something in May uh June of this year and it is now officially cut in half from its high. No. Uh you're not a buyer. >> I'm not buying this falling knife. No way. >> This one is at the same support level that you cited with DraftKings. >> Well, dude, you hit that in in September. >> Yeah, but DraftKings had three previous instances of that being a level of interest. >> This has what? One. This is one fresh off, >> right? Brand new company. >> I'm not interested. This thing This This thing looks terrible. It's at 88 bucks now. This thing looks god awful. >> Okay, so to recap, it came public at 40. I was bearish. It went to almost 200. I was wrong, but I never flipped bullish and I'm still bearish. And I still don't understand why they ran it up to 180 other than to humiliate me. I don't I don't know that I can come up with a better reason for why that ever happened in the first place. effectively. >> Wow, that is an incredibly narcissistic thing to say about a $50 billion market cap. Congratulations. >> Effectively, this company is leasing compute to um the hyperscalers and other companies that need to uh go bigger in AI. For by all by all reports, it's a it's a great CEO. It's a good company, but from a valuation standpoint, and now you have this new wrinkle where people like Michael Bry and Jim Chenos are calling into question whether or not they're pumping up their short-term profits by spreading out the expensing of depreciation over more years than they should. So, the contro the controversy now and Dr. Barry has just uh intimated on Twitter to an audience of a million of his closest friends that on November 25th he'll be revealing something in this regard. But the the new battleground or the battleground now is uh Cororeweave is telling Wall Street that they are depreciating over the course of six years all these GPUs and all this equipment. Jim Chenos and Dr. and other bears on this story are saying 6 years the GPU upgrade cycle at this point at Nvidia is every 18 months. So maybe you are taking liberties with the length of time that you're saying uh you can depreciate and what that will lead to in the future then is impairment charges against earnings which would be a downside shock. Um so that's the battleground here and that's why I think the stock looks the way it does. Thoughts? >> I'm not interested. This is This is >> in conclusion, DraftKings is the one. >> Yeah, dude. DraftKings. Too much smoke. >> All right. Uh, we're gonna do Make the Case and Michael has a mystery chart and we'll get out of here. I'm making the case to not buy quantum computing stocks. Are you surprised to hear that from me? >> Okay. >> No, these names look these names look terrible. >> I I think it's one of the most fascinating potential growth stories in the market. the more I and I All right, here's a quick disclaimer. Do not take any of uh any of your information about quantum computing from me without doing your own homework. So, I >> Shake Shake Shack is one thing. You could listen to Josh and Shake Shack. >> That's right. Uh that being said, I did look at these. I took a very close look. They're all really exciting. I think they are so far away from prime time that these stocks could get they could triple or get cut in half and it's like flipping a coin or worse rolling the dice. And I just I don't see the investment opportunity here. I can't even believe they're public given how early it is in their field. Um but I just wanted to give people a very quick overview of why I concluded that and that'll be my make the case. All right, let's put up Regetti. So, this is the smallest of the three that we're going to talk about. And what's interesting is that the the type of quantum computing that they're pursuing, and there are three types of architectures here, the type that they're pursuing is the most in line with what both Alphabet and IBM are trying to do, which is superconducting. So, this is just their methodology of going about quantum computing. And I'll spare you the the explanation because I don't even know what I'm talking about anyway. Um, but if you're real if you're like really bullish on what what Regetti is doing specifically, Alphabet and IBM will probably do it better and and bigger, I don't know that that means their share prices will appreciate. I just know it means that you have a better option if you really want to be invested in in in that. Um, do we put up RGTI? Yeah, it looks so bad. Oh my god. >> We have one more. This is how much it's up still in the past year, 2,000%. >> Right. >> Even with this massive drop from the from the recent highs, it's still up huge. Um, let me show you IBM. Here's a quantum stock uh that you don't have to risk your life owning. Uh, IBM is by all accounts as far advanced on the quantum uh side as any other publicly traded compute company. and is probably working feverishly to maintain that lead. IBM is up 30% a year over the last three years. Not 2,000%, but not bad. Here's Alphabet, another leader in quantum computing, and it'll probably stay that way. And again, the architecture that Alphabet is pursuing is the same that Regetti is pursuing. um but with access to I don't know millions of uh enterprise customers maybe a billion uh uh different applications that they can build in go like god knows what they could do with this thing. So um for that reason I would avoid it. INQ um NQ is the ticker. Put this up. I mean this is like crashing right before our eyes. It hit a high of almost 90. Now it's 54. Um, I guess the charitable way of thinking about this would be that it it held its rising 200 day, the last time it had a bout of volatility in July, but this also looks terrible. Um, Ionq is the largest of the three standalone quantum computing companies, and it is the furthest along in terms of commercialization by some measures. It's important to understand they're not commercializing anything other than companies uh, and other research people that want to experiment. There's no product here. This is just people that want access to their knowhow and equipment. That's what all these bookings are. None of these companies actually have a product that's beyond just here, use our lab, use this, use that. And then the last one um is D-Wave. The let's put up the chart also crashing also uh 50 to uh 20s. Uh this is cubits guys. QBTS. Thank you. Uh here's the one-year performance though. It's up huge. It was a penny stock that went as high as 50 and is now 29. >> Wow. >> Um Cubix is doing a kneeling computer a computing. So So ion Q is doing this like captivated ion architecture whatever that is. And then this is the third type. Annealing is more like um making modifications along the way. Optimizing. and supposedly they are further along of the three in terms of actually delivering something to a customer that they can use right now. Um it is not considered to be the most advanced version of quantum computing whatever that will be in the future but it does have like immediate applications today. So this is the second largest one. >> So which one do I buy? >> None. And I'm making the case that you keep these on your radar. you follow the storylines for these companies loosely and if Jensen Wang is right and we're more than a decade away from these things being like commercially viable or if the founders of these companies are right and it's right around the corner like only science will hold the the answer as to which of those is true >> and so my take would be like just pay attention without being invested if you could like ma if you could manage that >> that is very charitable the the the real Josh Brown would say you could safely ignore these names and come back in 10 years. >> I don't think you can and and they could all be zeros because the IBMs and the and the Alphabets just run away with the whole opportunity or they could be like make like really important breakthroughs and I will not be the person to tell you which of those two things is going to happen. So I I would I would say loosely follow these names and watch for milestones along the way. But like I draw the line at flying cars these days. So that [laughter] >> Oh my god. >> I'm trying to be responsible here. Michael, >> that was that was really well done. All right, I got a mystery chart. I'm going to make this very simple. I'm going to give you one clue and one clue only. Okay, this is the best performing stocks of the S&P 500 this year. Um, the bottom one, my bad, I should have included this. The bottom one, I'll give you the clue there. The bottom one is the market cap. Uh, the top one is the price. The market cap is $118 billion. And to reiterate, this is the single best performing stock in the S&P 500 year to date. It's up 300%. There you go. >> Robin Hood. >> Boom. >> Look how good I am at this. [applause] >> Good job. >> You know, I I sometimes feel that I don't uh I don't get enough credit for how good I am at Make the Case because you're better at it than me, but I'm still pretty I'm still pretty I meant at at uh Mystery Chart. I'm still pretty good. >> You're still pretty good. Listen, you're way better at make the case and I'm a better chart guesser. So, I think your skills are a better guess. Your skills are more valuable than mine. >> Well, listen, we could end on that note. Always always nice where we find an area of agreement. I am better than you, >> guys. Thank you. So, thank you so much for tuning into the show. We miss you when we're not here. Uh we will be back live very soon. In the meanwhile, I want to let you know tomorrow is Wednesday, which means all new animal spirits with Michael and Ben. My personal favorite podcast. We'll do Ask the Compound with Ben and Duncan later this week and then an all new edition of The Compound and Friends, which I think you're going to love. Thank you so much for watching. Thanks [music] to our sponsor and we'll talk to you soon. [music] >> [music]
US Stock Market Flashes Dreaded “Titanic” Signal
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[music] Okay. >> Mhm. >> We all set? We all good technically? Technically speaking. Okay. >> Fundamentally. >> All right. Hey guys, welcome. Welcome to an all new edition of What Are Your Thoughts? As you could probably tell, we are slightly ahead of schedule pre-taping. If you are watching live on YouTube, the chat is live. So, uh, so we're all with each other watching. Uh anyway, uh Michael and I every [music] week on Tuesday get together and discuss the biggest stories in the market, all the things that are moving stock prices, um all the the latest developments, and we have an absolute blast doing it. For those of you watching on video, welcome. And for those of you listening to the audio version, you know we love you. All right, we have a sponsor tonight. We're going to uh give a quick shout out and uh we will get on with the show. Michael, who do we have? Josh, curious about investing in crypto. Not sure where to start. Start with Grayscale. >> Grayscale is the world's largest cryptofocus investment platform and has been in crypto since 2013. That's a long time when you consider how early we option. Gosh, right. Is this Grayscale also offers the widest selection of crypto investment products in the US over 30 different funds for investors to choose from. That's plenty of choice for both first- time crypto choice or just crypto investors. >> I got it. Put the mic down. You may not be considering crypto for your portfolio. >> Are you doing it? >> I'm doing it. But whenever you're ready, Grayscale can be your guide. Grayscale. Invest in your share of the future. Investing involves risk, including loss of principle. For more information, visit grayscale.com. Thank you, Grayscale. Sorry on behalf of Josh. Let's get to the show. >> All right. My bad. My bad. All right, guys. Uh this is I think an interesting week because you you just have had this explosive comeback in large cap tech yet again. Like every time it looks like these stocks are faltering a little bit or the headlines have turned negative, the next day you get this huge rally in the NASDAQ and you get the same old same old. And I know people are looking for a turning point and they're pulling out all the stops trying to find reasons why we're about to have one. It just like it it's 24 hours and then the next day it's like oh my god the the the mag 7 is up again. The AI trade is back. Is that is that the way you is that the way you are interpreting it? >> That is exactly right. And until we see a 2000 level type of divergence where you see the rest of the market crashing and only the leadership holding up the index. I think a lot of this data that we're about to talk about is interesting but I think it might be noisy. So for example >> Christians de I'm about to bring the noise and it's good noise. It's quality noise. Dean Christians at Turning Point Market Research who used to be at Sentiment Trader. They do great stuff. So, they have this thing called the Titanic signal. And what that means is they're looking at the S&P 1500. When you have stocks that recorded more 52- week lows than highs for five straight sessions within a week of a multi-year high, the results on a forward basis are mixed to not great. Not catastrophic by any means, but here we're looking at all of the previous examples since 1950, uh, actually since 1928. And it it it happens not a ton. Looks like there's like 20 signals or so. And the upshot is this. Over the next four weeks, it's been positive just 40% of the time. So, it says not, they're not saying, you know, turn bearish or a crash is imminent, but over the next couple of weeks, historically, when you have this type of environment where the index is at an all-time high, but a lot of stocks are making 52- week lows, it just signals maybe maybe yellow light. That's all. Is it a lot of stocks making 52- week lows or is it just >> more 52- week lows than highs? >> Correct. >> Okay. >> But but by definition, that's that's kind of a lot. >> I especially in a bull market, that's when it's a it's not a lot period. It's a lot when the whole overall market is near an all-time high. >> So, I think the point the point that I was trying to make last week where it's like calm down when we're thinking about like stocks getting killed is that things have been so good for so long. So, this duality research company that I keep mentioning does incredible work. I didn't realize that we were just on the fifth longest momentum run since 1950 when measured this way. So, the they said the S&P 500 snapped a 137-day win streak without two consecutive RSI closes below 50. How nuts is that? 137 days without two consecutive closes on the on the S&P RSI below 50. That's the did they say the fifth longest the fifth longest streak since 1950. That's how good it's been. >> It's been relentless. The market has not been letting you in at an index level. Um how long does 137 days go back? >> Uh it's it's a long time there. If there's 20ish days in the month, I mean that's a lot. That's seven months basically. >> No, they can't be. Do they mean calendar days or market days? >> I would assume market days. >> Okay. I mean, it's a lot either way. I I think we would we would both agree. So, back to Turning Point. Why is it called the Titanic signal? What is >> I don't I assume that they >> like literally like the Titanic sinking or does it mean something else? >> I'm assuming >> it's like an iceberg. >> Ou [laughter] uh put back the table. The chart and table. Do they pay any attention to which stocks are making 52- week lows or is that not important? >> Um, I I don't think they went that deep. Or maybe they did. This is just >> because here's what I want to ask you. Who what's making a 52- week low right now? >> Uh, right this second. >> Yeah. >> Like what what is a 52-E low list even look like? Are the names even recognizable? because I I'm just trying to picture what would be on there besides consumer staples and I like I don't even think materials are on that list right now. >> So, let's see. Buy 52 weeks. Uh Airbnb is certainly recognizable. >> Okay. >> Uh there's a lot of names on this list. Um All State I hope I'm doing this right. There's there's a lot of names. Apollo. >> Okay. I mean, look, >> not >> I I just uh I just I I need more before I before I am willing to declare Titanic signal activated. I need to know what stocks are making 52- week lows, not just the fact that there are more stocks making 52-we lows than 52 week highs. >> Well, hang on. They're they're they're not they're not I don't think I don't want to put words in their mouth. They're not suggesting like everybody run the cash. I'm just saying this is a quantifiable system and the results looks mixed over four weeks. Now listen, you might say, "I don't care about four weeks." All right, fine. Fast forward. Who car? I don't care either. But this is the more this is the more interesting conversation. We've been saying that because the index is so topheavy because the top 10 names are basically 40% of the index. You're going to have these very weird occurrences where there's great breath, but the MAX 7 falls and the index is down. You're going to have the opposite day where it's reversed and you're there's be all tons of noise. So, last week we were talking about how far the >> I'm sorry, I just I got to interrupt you. Uh, the most prominent stocks on the 52- week low list right now, just for context. T-Mobile, ADP, that one's interesting. Martian Mclennon, which is insurance, Adobe, very idiosyncratic problems there. Constellation Brands, Gen Z doesn't drink. Dexcom, I don't know why. Trade Desk, their own issues. Chipotle, >> Monday.com, Surgery Partners, and Oscar Health, which is political. So, I I'm I don't want to explain away each one of those individually. I just I want people to understand it's not IBM, Exon Mobile, like it's >> it's like it's like really specific stuff going on on that list. So, >> totally. No, you're 100% right. Um, >> fly serve. I mean, think about what's think about what's what's going on there. It's I I just I guess I guess that's where I would draw a distinction and say Titanic off, not Titanic on. >> I I would agree. I would agree with you. All right. So, last week we spoke about that the median stock is at a 19% draw down, which isn't much different than what it's been for the last 10 years. Like, this is normal. This is this is not this is very, very, very normal. Chart on please, John. Okay. What's super interesting though, what I had chart do was all right, this tells you nothing. There's nothing here. Give me like some sort of baseline. Normalize this for me. So, next chart. So, I had him do this chart where it's how far the index is from an all-time high versus how far the median constituent is. And then give me the difference. Okay. >> So, this is the thing. >> This is the thing. You look what So it's it's been like this forever or forever said differently forever since the launch of ChachiBT. Look when this happened. Very interesting. So since the bull market started um or I guess close to the start of the current bull market in early 23 with tech recovering we have seen an increasing spread between the median draw down in stocks versus the S&P's overall draw down. >> Correct. And that's >> it's growing. >> So that's what I said like a lot of this stuff is going to be noise. That's why it's because the index is so topheavy that you have to take whatever Titanic and whatever else comes next. You have to take it with a grain of salt. Unless you really see, again, not to belabor the point, but unless you see the new 52 52- week low list really expanding, like really expanding, until that happens, I'm not that concerned. >> I would put it another way. I almost want to track the S&P 100 and tell me when that 52-E low list expands. That is so much more meaningful to me knowing what we know about um index composition overall. Um and look like Microsoft's in like a decentsized draw down for itself since earnings. Meta is in a big draw down 24% and and worsening. Um, and the headlines going against Meta have not been great lately in terms of like people leaving the AI team, etc. Like, I want to know when stocks, maybe not that large, but I want to know when the S&P 100's 52- week low list is is booming off the bottom >> and across different sectors that has more signal, >> right? Well, it almost doesn't matter because like let's say the S&P 100, like what sectors do you think are heavily represented there? Communication services tech financials, >> discretionary financials. Yeah. >> Like you already know what's in there, >> right? >> So, I want to know like like I I think maybe we'll rerun this next week and let's see if we can create our own version of the Titanic signal, but only focused on the stocks that matter um to to the modern market. >> And also, you have JP Morgan making a 52- week high yesterday. How bearish can you be? I also want to point out looking at the S&P 1500 may have been uh important historically. Think about how many quote unquote Russell 2000 divergences we've seen over the course of the last 15 years. Not one of them not one of them has been a canary in the coal mine. They just haven't they haven't been important. at best at best they've been uh they've been concurrent indicators of like economic data but not S&P they don't >> and if anything they've been the opposite when they've been a divergence they catch up like that's when you want to buy the breakdown >> I agree um let's do our own Titanic signal but let's look at lows let's look at 52 week lows in the S&P 100 and let's see historically whe uh historically over the last five or 10 years that's been a better signal than this one. >> I'll get chart kit on that. But uh anyway, shout out to Dean. They do great work over there. All right, this next segment that we're about to do, Josh, it's brought to you by Fidelity Trading. >> No, we're not there yet. We're not there yet. >> Oh, we are. Oh, okay. We are there. I'm sorry. >> Okay, >> I stand I stand corrected. >> Okay, >> I stand corrected. >> So, this next segment is brought to you by Fidelity Trader Plus. Check out the new platform that syncs your data across mobile, web, and desktop. We are going to be highlighting the work of friend of the show Yurian Timmer who is easily on the Mount Rushmore of Chartists. Like he just he's got a unique style. He does things that you've never seen before. So for example, >> Ben and I were in Vegas last week when we were talking about the cape ratio and you don't really hear too much talk about it these days. And the one of the reasons why it's so particularly useless right now is because literally who cares about the data from the index 10 years ago and the earnings. >> Nvidia GPUs didn't even start until four years ago. Like it's it's completely dog So Eurion has and I I've never seen this before. He has a five-year cape which makes a lot more sense. >> So check it's more relevant >> chart on. So the five-year cape ratio is uh I mean also it's not cheap. I mean, obviously, but but to me, this is much more relevant than the 10-year. >> So, this is taking the earnings per share of the S&P 500 over the last 5 years and coming up with a price earnings ratio, which I I suppose like what does this really do? It It's all post It's all post pandemic. >> It smooth it smooths out the volatility of earnings a little bit. You're not just looking at quarter to quarter, year to year. You're looking at Is the purpose of this to say that if you take out the preandemic economy, that 5-year period, we're not as expensive as the regular 10-year cape would would indicate. Is that the >> No, no, no. I would say that this actually reinforces what we already know. Stocks aren't cheap. No We know. >> We know that. I just thought this was interesting. >> I guess what do you do with this information? Because the knee-jerk reaction would be, well, if they're not cheap, we shouldn't be buying or >> Well, hang on. We should be lighting up. >> What do you do with any information? Honestly, we're we're we're talking. >> No, I get it. I I think I think one of the things that you continue to hear is that forward returns fall as you're paying higher valuations, which of course is obvious, makes intuitive sense, but the thing that gets lost in that equation is not not if there's uh not if there's above average earnings growth. >> Okay, >> that's the lesson that that it's the lesson that we've learned over the last 15 years. It's It's not Cape is not in a vacuum. Why are stocks expensive? Oh, here's why. Huge earnings growth as far as the eye can see that. I'm so glad you said that. So, the next chart breaks down the mag 7 versus the I'm sorry, my bad. It breaks down it break down breaks down the equal weight trailing PE >> versus the cap weight. Did I say that right? Equate versus cap weight. And look at the spread here. It's enormous. So the cap weight trailing PE is 26 times >> which is obviously on the high side but look at the rest of the market >> very much in line with historical numbers. >> What does that mean? >> Very much 18. >> Okay. So if you if you equal if you equal weight every stock in the index, the market is not quite as expensive as the cap weighted version would it's and again it's 18 times is not what you would historically say is like a discount >> to history obviously, >> right? 18 times is not 1999. >> Okay. So, >> now now in in fairness to the bears, it's a bit of a parlor game because why would you equal weight it? Like the reality is that the biggest stocks in the market are also among the most expensive. >> Like why why we're equaling it to make ourselves feel better that it's not a bubble. >> So So allow me to tie a bow on this. >> So Yurian says since 2022 >> the MAG 7 is up four-fold. So it is next chart but its earnings are up threefold >> right >> valuations are up there at 36 times for the mag 7 but earnings have been the dominant driver period. >> Yeah. >> Not margin not uh PE not PE expansion which is um what a lot of people who have been stubbornly bearish continue to bang on about that we're uh paying higher and higher and higher valuations for stocks. um >> but justified. >> We're we're paying higher valuations for stocks because they're earning more money than people expected a year ago systematically. It's happening every quarter at this point. So that that game will end hasn't ended yet. Um so that's that that's a good explainer for where we are. All right, I want to pivot to um some Schwab stuff. Uh, first of all, here's our friends at public making a definitive statement about whether or not sports betting should be side by side with investing in the same app. So, this is Life Abraham. He says, "We ran an ad in the Wall Street Journal today. This is a full page ad for people listening, not watching. Wealth >> wealth is not one in a bet. If you're let's say if you're looking for a broker that's not also your bookie, we invite you to try Public. And of course, full disclosure, Public is a frequent sponsor of uh of the Compound. What did you think about that that statement that they're making? >> I love it. They've been they've been very clear every time they advertise with us. We are a serious investment platform for serious investors. We are not here for gamblers. Um and their their platform shows it. doing great work on fundamental analysis and all sorts of stuff and they're making a stand and whether or not it's like you know a good business decision a whatever whatever we'll see but I love that they're doing it. >> What do you think their VC backers said um if and when they were consulted we are going to draw the line here we are not onboarding the next generation of investors who are conflating gambling with investing. What do you what do you think the money behind uh the company said? I would assume that their investors are deeply aligned with what they're doing. There's a reason why they gave them money in the first place. This is not a pivot. They've always been of the ethos that we're not doing that. We're not raining confetti down on our users. So, I would imagine that they're doubling down and they're all for it. If I had to guess, >> public doesn't call itself the anti-Rin Hood, but a lot of people when they're trying to understand the brokerage ecosystem, that's the way that they're thought of. It's like, okay, it's free trades. It's a super uh super slick user interface. like works at the speed of an app, not a clunky brokerage platform, but the big difference is they are not incentivizing their users to gamble um in the way that Robin Hood is. And that's sort of it's almost like a moralistic divide. Um and it's definitely a different uh investing philosophy behind, you know, like uh like Robin Hood the the ethos is whatever people want to do, we're going to create the best way for them to possibly do it. >> I I see I see both sides. public is like, "Yeah, we're going to we're going to try to encourage people to do the right things." >> So, I I think that's the So, this is like very on brand for that difference in in uh in philosophy. Um >> go ahead. >> I want to talk Oh, please. I want to just talk about the encroachment of um sports betting in general into the brokerage world and vice versa because I do think it's sort of a a two-way street. Um, I know the uh online casinos and the big gaming uh places would love it if the investment houses would stay out of their stay out of their business, but it's obviously not going to happen. And at this point, there doesn't appear to be anybody who wants to stop it. There are some state regulators that are coming out against this and and racing to institute some sort of a a ban in state, but at a federal level, it just it looks like it's going to be game on here. And there's going to be a ton of crossover between these three things. Prediction markets, sports betting, and stock trading. What are your thoughts? um prediction markets, sports betting and stock trading. Yeah, I think that the street is overestimating the impact to which these will have the prediction market specifically on DraftKing and Flutter. These stocks are both getting hit pretty good. I listened to some of DraftKings earnings calls. Quite literally, every single analyst call was asking about prediction markets. Um, and I think that this is going >> because they're because they're because they're nervous. The analysts covering these stocks are nervous. >> I think that this is going to be similar to um OpenAI is going to kill Google. I just don't believe that people I don't believe that customers of DraftKings and FanDuel, >> myself included, are going to leave that app and go to the prediction markets where I'm guessing the user interface isn't as good. I'm guessing the analytics aren't as good. I'm guessing the parlay experience, which is basically the whole business isn't as good. And I think that this is severely overblown. Now, if investors are looking using this as an excuse to dump a company that is still in a very competitive environment, DraftKings is still not gap profitable. uh they're still losing money. Now they're losing much less money. They're doing much better. But I think that this is an opportunity to buy DraftKings rather than uh rather than say that they're completely effed. >> All right, chart back on. So uh as we speak, um Flutter, which is the parent company of FanDuel, and DraftKings are uh well, let's let's go. DraftKings is in an almost 18% draw down from its January 2025 high and Flutter had been doing a little bit better um and then just completely fell apart and is now down 10%. And these are I look these are companies that like whether they like it or not they are going to be facing Robin Hood for this market because Robin Hood wants sports betting on its platform. that that chart that's not a draw down chart by the way. >> So DraftK draft it's way worse than that. Uh this is this is year to date. >> DraftKings is DraftKings DraftKings is in a 43% draw down. So this and and Flood is 25. So So DraftKings is getting killed and yes it's true that so let me I just want to quote this guy Jason Robbins. He's the co the chairman and CEO and the co-founder. >> He said this in the prepared remarks. So they said the word for predictions 42 times in the call. This is in the prepared remarks. He said, "I'd also like to touch on the recent rise in predictions. We have experienced numerous waves of competition in recent years, mostly from well- capitalized companies that have built or acquired strong sports betting product offerings, and those have had minimal impact on DraftKings revenue trajectory." He goes on to say, "We are excited about our pending launch of DraftKings predictions and its potential to expand our total addressable market in the coming months. We expect DraftKings predictions to enter many new states with sports events contracts, uh, unlocking a new customer base and revenue stream. Nearly half the country's population remains without access to legal online sports betting, but there are several other companies offering federally regulated predictions in all 50 states. So, he's basically saying like that should pave the way to more legalized sports betting. Then he last says to close out my thoughts on predictions, I would leave you all with three key takeaways. And the first is that we will pursue this opportunity. We will compete and we will win. >> Okay. But so here's the problem. So they are now going to go they're going to play offense which I think is smart and they're going to put prediction markets um onto their platforms. So in other words, the prediction market uh company like a cowshi for example could say why do you need to look at all these complicated stuff like odds and uh you know plus 150 minus 270 you don't need any of that just tell us who you think is going to win and here is the price of the contract. So from a simplicity standpoint, they are onboarding probably the youngest, least experienced gamblers who just want to express an opinion on something. And if it's sports, the user interface is way easier than what DraftKings and FanDuel are putting in front of you. That's for the the simplistic person who doesn't understand gambling lingo and doesn't really care to learn. Okay, that's a segment. >> But is that a is that a big business? Well, I mean, here's where I'm going with that, though. That segment will grow up. And do you want to try to onboard them when it's a higher cost to acquire that customer later when they're already very comfortable with the tools they use? That's why DraftKings has to go on offense, not just play defense, but they actually have to go into these markets and create sports contracts in the prediction >> uh in the prediction format. Y >> versus the traditional Vegas odds format. All but >> put that statement back up. >> Think about the statement. >> Um those competitors have had quote minimal impact on DraftKings revenue trajectory. Yes, we know. Chart off. We're not worried about the revenue trajectory. We're worried about the cost trajectory. We're worried about how much more advertising, you know, have to do versus new entrance to the market, including extremely powerful players that are well capitalized like like Robin Hood. So, that's that's the issue here. >> Oh, it's it's not a non-issue. I'm not trying to make believe that it's not an issue. I I am simply saying that I think they the 43% draw down. I don't know where the right numbers >> might already be overestimating. >> Yeah. So, all right. So, so Robin Hood So, Robin Hood said here's what Vlad said. prediction markets are really on fire. It's hard to believe that we launched this just about a year ago with the presidential election markets. We've doubled volume every quarter since then to 2.3 billion contracts in Q3. And the month of October alone was up to 2.5 billion contracts. So October by itself was bigger than all of Q3 combined. So um it is they said it's at a hundred million annualized revenue run rate already. It's not nothing. >> I'm I'm curious. I don't I doubt anyone's sharing this. I'm curious how many people place these bets and then never log in again because they're using small dollar amounts and they lose interest. >> Well, so I think a lot sports cuz sports has the ability to hold your interest throughout the course of a season and if you're a lifelong football fan, >> you don't need some you don't need somebody to keep stoking your attention. You are very aware it's football season, right? If you start placing random bets about like who's gonna win the Oscar for best picture or who's gonna win a who's gonna win a coin toss at a at a football game. >> That's the thing. Like how many people like all right that's like do they lose interest in the way that the app gaming like like uh Candy Crush has lost interest? I don't know the answer. >> I think they do. >> I think so too. Um that being said uh there is some tangible evidence that there is an effect already uh at both DraftKings and FanDuel at Bank of America downgraded both stocks to uh neutral from buy and they cited specifically the rise of prediction market platforms. There are other headwinds too as one of several factors eroding margins. Um, Koshi, uh, Koshi is operating in the US, but Poly Market is coming back to the US or coming to the US. I don't even think they're facing the full force of these two platforms, but they will be in 2026. >> And I think the market's discounting that. >> Okay. Um I also think I don't want to get there's like a whole bunch of partnerships being announced by these platforms as well which looks like uh like all right let me give give you a couple okay um they poly market today announced a multi-year partnership with prize picks which is sports gambling app um it's a very simple one to use it's not for hardcore sports people it's like pick which player is going to score the first basket in in the Lakers game tonight. Stuff like that. Um, but they're going to integrate prediction markets into Poly Market will into the prize picks app. Um, they also signed a deal with the NHL for league data and branding visibility. Um, so Poly Market's coming coming on strong with partnerships. Khi, uh, similar thing. they are starting to talk to all of the different leagues and you know they're like they're funded so they're also not going to go away. But if you think that this is already being priced in then DraftKings to me would be the obvious buy just because of how much more how much lower it is than than uh Flutter. Here's where I think this thing could get bigger than maybe I'm thinking if there's enough um let's say I respectfully dumb money because these are people that are not doing quantitative research. If you're betting 10 bucks, if there's enough volume there, then maybe you can see some institutional money come onto the platform and just eat their lunch. You know what I mean? >> Yeah. >> So maybe you >> like instit like people like institutional gamblers. >> Yes. Yes. Oh my god. >> Like like like not literally Jane Street just coming in and just quantitatively clipping these people, but something like that. >> Yeah. No, I you think you think the guys sitting at Susuana and Jane Street and Citadel aren't licking their chops. Like here's a multi-billion dollar marketplace with the dumbest in the world who think they know who's going to win a a a baseball uh series. like how how's like how like it they don't even directionally have to know the outcome of the games to figure out how to trick how to trick people into placing the wrong bets. >> Yeah. >> So, I'm not saying they're doing that. I'm saying I'd be shocked if they weren't talking about it, >> especially if this gets bigger and bigger. I think it's a really good point. Um, I thought it was interesting that Charles Schwab's CEO, Rick Worester, used his address at the impact conference to draw a line in the sand sort of. So, I wanted to I wanted to go through that. So, Schwab kind of has this reputation well-earned as an advocate of the in the American investor. um they are considered to be sort of like a paragon of um long-term investing and proper investing and sure they have gamblers on their platform like every other brokerage but they don't seem to be going out of their way to build products for those people. They seem to be very focused on just normal in investing. Um not going that far like they're still not even doing crypto to the extent that the other brokerages are. There's a lot of there's a lot of things about Schwab that is kind of slow money-esque. Um, the impact conference is an RAA event every year. And here's what uh Rick Worster said. Quote, "Only 5% of the people that go on gambling apps pull out more money than they put into the gambling app. It is the opposite of the benefits of being a long-term investor." He also said, "I just don't want young people in our country to think that betting on the Monday night football game is equivalent to being invested for the long term in stocks and bonds." Um, then they put out some content showing the difference between sports betting and investing. Um, drawing that distinction between like speculation versus goal oriented and and time horizon driven investing. So they're they're sort of like they're sort of drawing that line in the sand. But then and then they said the the company said they are monitoring the space and regulatory landscape closely with respect to prediction markets, but they don't they don't seem to they don't seem to even be considering it. Uh and I I guess my question to you is they didn't say that they would never integrate sports betting into the app. They just said that they said that they won't, but they didn't say we will never. Do you think at some point they might cave if we see all of the other competing brokerages, and there are many, just start to onboard at a furiously faster rate than they do amongst the younger demographic? >> No, I I just I don't think it's going to be furious. I think it's going to be a really shitty business. It's going to be really expensive. I don't think that all of a sudden these type of companies are going to say, "All right, I guess we're gambling, too." I just I don't think so. >> But they did but they did that with crypto. And we watched them do it. It It happened within >> It happened within the last 10 years. Everyone Everyone on Wall Street who started out tweeting retweeting Charlie Munger lines about rat poison and now we're institutionally investing in crypto. We're trading crypto. We're doing block trades in crypto. >> The spreads on crypto are still a mile wide. It's a very very very lucrative business. This is not >> okay. I respect I respect uh Mr. Worester for coming out and definitively saying we're not doing this. I respect Life Abraham for the same reason. I'm not opposed to sports betting. I just don't understand the necessity to have it be in the same app with investing unless it's just a a money grab. And uh I I I think the thing that will make this difficult for Schwab that they've planted their flag here is if um they just start losing this nextgen customer to an app that lets people do whatever they want and it sticks. Um because then they're going to have to seed this whole generational cohort to Robin Hood. Um, I mean the this is obviously crackhead activity for the most part, but like it's still activity and it's still new account growth. So if you if you think it flames out and 6 months from now, we're like remember when people thought they should gamble in their investment. >> You know what I I I do think that's going to happen. I think two things. I think it's a it's a thing and it's here to stay and it could be it could be a lot bigger than it is today. But also, I think this idea that everybody's gonna be predicting, not gambling, I mean predicting, I just don't buy it. You know why? Because with stock gambling, at least the market's open tomorrow. The stock was down 8% today. It could come back tomorrow. When you make a wager, a prediction, >> when it's done, it's done. And you either make money or you lose all your money. >> It's an options trade. >> So, people get sick of that >> Yeah. >> That feels that feels like lighting money on fire. >> I think that's a really good point. Also, like when you're gambling in the stock market, it's unless you're doing like a zero a day, it's not like you're putting up $500 and you win or lose a thousand or it goes >> a really bad trade is you lose 30%. It happens. You're not losing a 100% every time you bet. >> How long? >> So, I'm I'm I'm bearish on this whole thing. How long before we're seeing the apps say, "We will give you brokerage margin against your securities to play sports wagers." >> So, [laughter] >> can that be far behind? >> Barry just goes, "You want to call?" No, I'm just talking to a mic. [laughter] >> All right. Shout shout out to Barry. All right. You're you're up. What do you got? >> Happy birthday, Barry. >> What do you got? Um >> Okay. Uh this K-shaped economy stuff, it's too much. Happy birthday. >> Too much. >> Grab grab him by the shoulder and pull him on the air. Come here. >> He's gone. Um, >> I want to say happy birthday. >> Okay, so Torson Slack showed this chart, the Atlanta Fed measure of median nominal wage growth and he shows the lowest wage cortile to the highest wage cortile. And I think not I think the thing that they are trying to convey the thing the the place where your mind goes on this map is the orange line crashing and it is separating itself from that is the lowest wage separating itself to the downside from the second the third and the highest wage. And you can't look at this chart and look at the line all the way on the right without looking to the left. Look at the gains on the by the lowest wage quintile uh quartortile, excuse me, during the pandemic. So, I had chart kid, hey, you know what? I need to I need some context behind these numbers. Please remake this chart and show me the spread between the low wage growth, the low wages, and the high wages. And from 2015 to 2023 and really hitting a peak, you had the low-wage people out earn, not out earning, having a higher wage growth rate. Now, listen, nobody, certainly not me, is saying that, oh, low-wage people have done so great. That that's not the point. But the point is they've been they've had more gains than high wage earners up until recently. And now we have companies that are talking a lot about some of the pressure on low-wage consumers without talking about the fact that you bury them with price hikes. So you're seeing all of these fast casual restaurants say the same thing. But you know who you're not hearing say the same thing that that the low end is struggling. How come the banks aren't reporting that? How come it's only companies that are getting their bells rung because the low wage and everybody else say, "No, I'm not spending $14 on a sloppole anymore." >> Okay, I think you've just fallen into a classical mathematic trap with that wage growth for the lowest income uh uh group because it's off a lower base. So, of course, during the pandemic, it rallied relative to everyone else's wage gain. Um, we also had like no net immigration for uh uh for that period of time. We have that again. So like you I I guess what I'm trying to say is the people that are doing those low-wage jobs were so in demand during the pandemic because of how many other people just were unwilling to work if they didn't have to. And those are the people that literally needed a paycheck and had to. And I just think like that was a really unique period of time. If you go back to the 1970s, >> Hold on, hold on before you before you give a history lesson. My only point is this. You can't look at the right tail of that chart today without zooming out. That's the point that I'm making. I'm not saying that that that the low wage earners were having a party during the pandemic because you're right, they were the people that needed to be there. My point is, if you're using that chart to say that they're no longer making as much, uh, their wages are not growing as fast as the other parts of the country. And therefore, like that's the part that I have issue with. >> Yeah. No, I don't disagree with that. But that's not the K. That's not the the average hourly wage is not even the main premise behind the K-shaped economy. The the premise, at least from my perspective, is people that have investable assets versus people who are living check to check. It's not even about what the dollar figure shows on their W2, although that's obviously a big part of why they can't invest, what that dollar amount is. But the K the real story of the K-shaped uh economy is who has the luxury of doing a job an email/ cellphone job and who has to actually stand behind a counter or at a warehouse in person. That's the K-shaped economy. And then furthermore, who has financial assets that are benefiting from asset price inflation or the ability to borrow against them and who doesn't? It's not about this group was making $18 an hour and it only went to $19 an hour. That's it. It's it's almost like um it's it's part of the story, but it's almost incidental to the bigger picture, which is in a in the in the current K-shaped economy, if you don't have financial assets, you absolutely cannot keep up with the people that that do. And that's always been true, but it's never been more true. >> Okay, true. And I guess where I was going with this conversation is that we are listening to the earnings calls from these fast casual restaurants. Okay. And they're all blaming the low-end consumer without talking about some of the idiosyncratic things that have been happening in their space. Overexpanding, overcharging, and we listen to them and conclude, okay, the consumer is getting crushed. H how about this? PNC Financial Services Group. They said we were just looking at the deep dive on October numbers. Spending is robust and while it's a little bit stronger at the upper end, and obviously it is. I'm not saying it isn't. While it's a little bit stronger at the upper end, it's still actually hanging in there among lower-end customers. And just because they're not choosing uh to eat at Sweet Green anymore, it doesn't mean that it is horrific. So, for example, Buco Capital tweeted, "Fast food, especially fast casual, expanded too quickly, charge too much, literally trying to raise prices while commoditizing. Don't be so quick to assume the consumers hurting. Uh, GPV location was up for toast. People are still eating out. They're just voting with their wallet." I guess that's really the point that I'm trying to make. Another one, Wasteland Capital said most of these restaurant stocks were trading at 35 to 100 times forward PE just recently. Many still are. They were valued at a massive premium to the MAG7 and any comparable growth stocks in tech and AI. This is just a bubble deflating bubbles can't be sustained indefinitely. So if we led with that quicker, my point was not that the low-end consumer is doing amazing, but looking at these numbers and concluding that they're getting obliterated and looking at the stock's reaction and concluding that we're about to fall off a cliff, that's the part that I take umbrage with. All right, it's a fair point. And you know, one of the big mistakes to make is to look at stock prices and then um come up with a story, an economic story that explains the stock price because you're doing that in the absence of starting valuation. >> Exactly. So you actually so you could have companies that are doing very well. Their share prices aren't um their you know their customer is just fine but their stock prices are falling because maybe the per the the customer base that's doing well isn't doing as well as what people had thought and therefore the share price comes down. That doesn't that doesn't perfectly explain the actual economy. So I totally agree with you there. But I also can't ignore it and I do view the economy through the lens of the stock market. And I'm looking at a chart of uh Dine Brands Global, DIN. This is the parent company of Applebees and IHOP. This is literally feeding the bottom 20% of of income earners. We could agree on that for the most part. >> Okay. Um over the last three years, the S&P 500 is up 80% and the stock is down 60%. Then I take a look at Darden. Darden had been hanging in there until the tariff started all over again just um just in the last couple of months the story has completely fallen apart. Uh it was one of the best stocks in the market. It was on our list started to break down and we have we have seen this thing go this DRRi we have seen this stock trade from 225 to 171. There is no bottom in sight. It is breaking. >> It looks horrific. These are not QSR. This is not Chipotle. This is something different. This is family of four, probably two working parents on a Saturday afternoon or a Sunday night or celebrating a birthday party. These stocks look like that customer has literally hopped aboard an alien spacecraft and left the planet. Now, they may be falling too fast and and and this is not an accurate representation of what's happening with that segment of the market, but what if it is? So I I contrast the way those stocks are acting with the demand for GPUs [laughter] and and I just say if this isn't a K-shaped economy, what it what is? So I I I firmly believe that we're in this this period of time where anyone and anything that caters to the upper 20% of the country is just living in a dramatically different environment than anyone or anything that's catering to the bottom 20%. And it's growing more extreme by the by the day, not less. And I know there's a big fat middle that we're not talking about. And the middle seems to be doing fine. But K is is is Kaying. >> Here's another stock on the other side of that. Airbnb. >> Who do you think stays at Airbnb? What do you think the financial circumstances of people that stay at Airbnb? I'd say pretty good. This stock sucks because it was too expensive. >> I would not say pretty good. I would not say I would say the opposite. I would wait. Hold on. I know you don't see >> I know I know they have you [snorts and clears throat] couldn't pay me. I know that they have I know they have an upper end. I know like when you go to a really fancy place like Hawaii there really fly Airbnbs. I am aware of that. I don't think that's their bread and butter business. >> You think the average person that says in an Airbnb is in the bottom half? No, I think it's I I think it's all over the map, but I think where they make their money is probably right down the middle. People that price out an Airbnb relative to a hotel and conclude this will be more fun for our weekend trip or our family if we do if we do a big house, but I I think it's aggressively middle class where it's one end. >> I think it's I think it's up I think it's upper class. Upper middle at least. >> You think Airbnb makes most of its money from the top 10% of listings? I No, I didn't say top 10%. >> Oh, okay. Top 20. >> Uh, >> I'd be I'd be interested I'd actually be interested to learn. >> I think the average profile of an Airbnb customer is somebody that's making well above average. Like I would say three times the median >> US income. >> Really? All right. Well, it's not looking good for that stock. So, I don't I don't know what the story is there then. You think that's a good counterbalance to real estate sales in in luxury? Like I I guess I'm thinking about a different consumer. I'm thinking about the first class passengers on the airlines. I'm thinking about the people that are in these like AMX lounges that you >> I think a lot of those people stay in dope Airbnbs. >> That could be that could be I don't know I don't know enough about it, but I'd love to I'd love to find out. Either way, I believe in the K. You don't believe in the K or you just think we've taken the concept too far? >> No, no, no, no, no. I'm sick of every article acting like there's only a small group of people that are doing okay and everybody else the rest of us are struggling. I reject that. >> That's not true because everything is still too crowded. So that actually >> that's what I reject. >> That fundamentally cannot be true. >> I mean dude, last thing listen when we were at the Lions Commander game, how many Lions fans did we see? Are those all top 20% earners? >> It's half the stadium. >> So I just reject the idea that everybody's struggling except for the rich people that own stocks, right? That's a that's that's that's the key thing here. I totally agree. That's a that's a random NFL game on a Sunday afternoon. That's not a polo match. The people that are at that football game are middle class. They're not all stock market millionaires, >> right? >> Abs like absolutely. We I totally agree with you. All right. >> Let's talk about Elon. So Elon got approved with a wide margin 75 to25 for a trillion air quote trillion dollar pay package and people are up in arms. The stock is only worth a trillion half dollars. I had Sean make this chart. Their cumulative revenue since 2020 is only $431 billion. Guess what? Doesn't matter. Read past the headline. So the deal this is this is from this is from uh the FT. He's not making a trillion dollars next year. The deal sets up ambitious targets for Mus to unlock his stock payouts in a series of installments. To reach a trillion dollars, he must sexuples Tesla's valuation to 8.5 trillion, boost earnings 24fold to 400 billion, and sell millions of robots and autonomous driving subscriptions over 10 years. over the 10 years the plan covers, Musk will receive no salary or bonus. So, I don't even want to talk about the shareholder part of it, which was overwhelmingly in favor of it, because if he leaves, the the shares worth nothing. I just want to ask you this. >> I mean, >> imagine voting imagine voting against this. >> Will he get what's the bull case for Tesla without him? >> Will he get a trillion dollars? I mean, he'll I think he'll find a way to renegotiate this as we get closer to these deadlines. And yes, he will get it because what the hell what is plan B? Find a new Elon Musk. It's almost like hilarious that there are if you're voting against this, do yourself a favor and just sell the stock because you don't get it. You don't understand why why Tesla is Tesla and why the valuation is where it is. Like, if you instead of voting Elon out, vote yourself out. Go buy go buy shares in insurance company where uh the guy's only making $8 million a year because this whole thing is about him making robots. That's it. There's nothing else. >> They didn't even talk They didn't even talk. All right. >> 8.5 trillion market cap. 20 million Tesla vehicles I guess between now and then. Um 1 million humanoid robots. When does he have to do this by when does he have to deliver? >> I don't know. I don't 10 years. I don't. It says over the 10 years of playing covers. >> Let me ask you a question. What's a higher likelihood if they're going to sell a million humanoid robots with Elon or without? >> Right. >> You know what [snorts] I mean? 10 million active full self-driving subscriptions, operate 1 million robo taxis, 400 billion in adjusted Ebida for four consecutive quarters, and then develop a framework for a new CEO. He I don't know if he can do all of those things. Let's say he does half of them. You think they're not going to find a way to pay him just to keep him? Like like what? What? They're going to be like, "Ah, you almost did it. Sorry. See you later, Elon." It's the stupidest thing I've ever heard, honestly. >> So, in recent weeks, in recent weeks, we've made comparisons to other CEOs talking and acting like this. Sam Alman, Alex Karp, Elon just said, "It's going to be the biggest product of all time by far. Optimus is kind of like an infinite money glitch. Nobody's nobody's Elon. An infinite money glitch. He is a one of one. >> Uh I mean I I don't know anything about D. Like if you're a shareholder, you just you've put your fate in his hands and so far he's delivered. So there's no there's really no other way to think about the stock. If you're looking at this and calling balls and strikes on like whether or not they hit their earnings guidance from the prior quarter, etc. No one else that's involved in the stock is playing the same game that you are. They're all of your fellow shareholders are playing a different game. They believe that autonomous taxis and robots are going to be ubiquitous and that Tesla will make more money at that than anyone else. And if you and if you're looking at conventional metrics like how many cars they sell in Germany, you're you're watching a completely different sport than the one that you think you're playing. And I I just I feel like by now everybody should have gotten that through their heads. I I don't I don't know that there's anyone left really that's involved in the stock that doesn't get that. What do you think? >> Yeah. I can't imagine being on the other side of this >> if it's if it's pay Elon a trillion uh imaginary dollars over a 10-year period. If he gets earnings to 240 billion or whatever it is, 400 billion, >> give it to him. >> He'll have earned it. All right, move on. >> Um, all right. I got I got three stocks. I won't call them falling knives, although others have. I think I already know your answer. Um, we're going to play by buy the dip or no. Let's put up the first one. This is strategy one-year performance. It is now, forget about relative to Bitcoin. This is just the share price of MSTR. It is now at a 50.3% draw down. and it is officially lost half of its value from the peak which was almost exactly one year ago this month. Um it's a $235 stock that was $450. Uh do you buy this? >> I have z I have zero interest in this. >> I don't like that it made a new low relative to uh April 2025 because they actually own more Bitcoin now than they did then. the the premium the MNAV shrank from over 2x or maybe over 3x to 1.2 too. Maybe, listen, maybe they get it back somehow. I don't see how. There's other ways to get leverage in crypto. You don't need them. I think the gig is up and I have no interest in that stock. >> Do you think this stock ultimately will trade at a discount to its Bitcoin holdings? >> Most who were you saying this? Most close-end funds do. Somebody was saying >> yeah, I was saying that and I'm very wise. I I was just pointing out the similarity between this and a typical leveraged close end. And there leverage closed ends come in every flavor. They there are leverage closed end funds that uh buy mut bonds that buy corporate bonds that buy REITs or or um real estate debt blah blah blah blah blah. Almost none of them ever trade at a premium because why would they and almost all of them at some point or for most of their life trade at some sort of a discount to NAV and that's normal in the stock market. This is the aberration. Why would a company promising to dilute you? >> Yeah. >> And raising and consistently raising money in the market trade at a premium. It almost seems like now like sort of like a fever dream that it ever did. And I and I still don't quite understand the rationale. He's going to be really good at buying Bitcoin at the right price seems to have been the the bull case. >> No, he was he was buying Bitcoin fast and then he was diluting shareholders and it was working and now it's not working. So I have no interest. >> Okay. Uh, DKNG, >> I think you want I think you want this one. >> Um, I do. I mean, 30 bucks has been a level of historical support and resistance. >> Uh, what's that? >> When? >> Uh, in April of 2025, in August of 2024, and >> it's below, >> what' I say? 30 bucks. >> Yeah, it's it's it's lower now. >> I'm saying it's well, it's a it's a 3031. It's right there. I uh Yeah, I'm interested. >> 58% draw down. Uh, I don't know, man. This I I want to be right there with you because I I might agree with you that the fear of prediction markets is overblown and this could be an Alphabet-l like situation, but then I go back to like, well, what do they really do that anyone else can't do? In the case of Alphabet, like they do a lot of things that other people can't do. >> I know there's a million differences. And and to to your point, put it this way, I'm not buying it, so I don't want it that badly because ultimately they're still not even they're still not even profitable. Even though they're going in the right direction, I'm not buying the stock. >> All right. >> But if I had to choose between the three, this would be the stock. >> Okay, last one. Also a 50.1% draw down from the all-time high. >> Coreweave. >> Nope. n uh $91 stock hit a high of 180 something in May uh June of this year and it is now officially cut in half from its high. No. Uh you're not a buyer. >> I'm not buying this falling knife. No way. >> This one is at the same support level that you cited with DraftKings. >> Well, dude, you hit that in in September. >> Yeah, but DraftKings had three previous instances of that being a level of interest. >> This has what? One. This is one fresh off, >> right? Brand new company. >> I'm not interested. This thing This This thing looks terrible. It's at 88 bucks now. This thing looks god awful. >> Okay, so to recap, it came public at 40. I was bearish. It went to almost 200. I was wrong, but I never flipped bullish and I'm still bearish. And I still don't understand why they ran it up to 180 other than to humiliate me. I don't I don't know that I can come up with a better reason for why that ever happened in the first place. effectively. >> Wow, that is an incredibly narcissistic thing to say about a $50 billion market cap. Congratulations. >> Effectively, this company is leasing compute to um the hyperscalers and other companies that need to uh go bigger in AI. For by all by all reports, it's a it's a great CEO. It's a good company, but from a valuation standpoint, and now you have this new wrinkle where people like Michael Bry and Jim Chenos are calling into question whether or not they're pumping up their short-term profits by spreading out the expensing of depreciation over more years than they should. So, the contro the controversy now and Dr. Barry has just uh intimated on Twitter to an audience of a million of his closest friends that on November 25th he'll be revealing something in this regard. But the the new battleground or the battleground now is uh Cororeweave is telling Wall Street that they are depreciating over the course of six years all these GPUs and all this equipment. Jim Chenos and Dr. and other bears on this story are saying 6 years the GPU upgrade cycle at this point at Nvidia is every 18 months. So maybe you are taking liberties with the length of time that you're saying uh you can depreciate and what that will lead to in the future then is impairment charges against earnings which would be a downside shock. Um so that's the battleground here and that's why I think the stock looks the way it does. Thoughts? >> I'm not interested. This is This is >> in conclusion, DraftKings is the one. >> Yeah, dude. DraftKings. Too much smoke. >> All right. Uh, we're gonna do Make the Case and Michael has a mystery chart and we'll get out of here. I'm making the case to not buy quantum computing stocks. Are you surprised to hear that from me? >> Okay. >> No, these names look these names look terrible. >> I I think it's one of the most fascinating potential growth stories in the market. the more I and I All right, here's a quick disclaimer. Do not take any of uh any of your information about quantum computing from me without doing your own homework. So, I >> Shake Shake Shack is one thing. You could listen to Josh and Shake Shack. >> That's right. Uh that being said, I did look at these. I took a very close look. They're all really exciting. I think they are so far away from prime time that these stocks could get they could triple or get cut in half and it's like flipping a coin or worse rolling the dice. And I just I don't see the investment opportunity here. I can't even believe they're public given how early it is in their field. Um but I just wanted to give people a very quick overview of why I concluded that and that'll be my make the case. All right, let's put up Regetti. So, this is the smallest of the three that we're going to talk about. And what's interesting is that the the type of quantum computing that they're pursuing, and there are three types of architectures here, the type that they're pursuing is the most in line with what both Alphabet and IBM are trying to do, which is superconducting. So, this is just their methodology of going about quantum computing. And I'll spare you the the explanation because I don't even know what I'm talking about anyway. Um, but if you're real if you're like really bullish on what what Regetti is doing specifically, Alphabet and IBM will probably do it better and and bigger, I don't know that that means their share prices will appreciate. I just know it means that you have a better option if you really want to be invested in in in that. Um, do we put up RGTI? Yeah, it looks so bad. Oh my god. >> We have one more. This is how much it's up still in the past year, 2,000%. >> Right. >> Even with this massive drop from the from the recent highs, it's still up huge. Um, let me show you IBM. Here's a quantum stock uh that you don't have to risk your life owning. Uh, IBM is by all accounts as far advanced on the quantum uh side as any other publicly traded compute company. and is probably working feverishly to maintain that lead. IBM is up 30% a year over the last three years. Not 2,000%, but not bad. Here's Alphabet, another leader in quantum computing, and it'll probably stay that way. And again, the architecture that Alphabet is pursuing is the same that Regetti is pursuing. um but with access to I don't know millions of uh enterprise customers maybe a billion uh uh different applications that they can build in go like god knows what they could do with this thing. So um for that reason I would avoid it. INQ um NQ is the ticker. Put this up. I mean this is like crashing right before our eyes. It hit a high of almost 90. Now it's 54. Um, I guess the charitable way of thinking about this would be that it it held its rising 200 day, the last time it had a bout of volatility in July, but this also looks terrible. Um, Ionq is the largest of the three standalone quantum computing companies, and it is the furthest along in terms of commercialization by some measures. It's important to understand they're not commercializing anything other than companies uh, and other research people that want to experiment. There's no product here. This is just people that want access to their knowhow and equipment. That's what all these bookings are. None of these companies actually have a product that's beyond just here, use our lab, use this, use that. And then the last one um is D-Wave. The let's put up the chart also crashing also uh 50 to uh 20s. Uh this is cubits guys. QBTS. Thank you. Uh here's the one-year performance though. It's up huge. It was a penny stock that went as high as 50 and is now 29. >> Wow. >> Um Cubix is doing a kneeling computer a computing. So So ion Q is doing this like captivated ion architecture whatever that is. And then this is the third type. Annealing is more like um making modifications along the way. Optimizing. and supposedly they are further along of the three in terms of actually delivering something to a customer that they can use right now. Um it is not considered to be the most advanced version of quantum computing whatever that will be in the future but it does have like immediate applications today. So this is the second largest one. >> So which one do I buy? >> None. And I'm making the case that you keep these on your radar. you follow the storylines for these companies loosely and if Jensen Wang is right and we're more than a decade away from these things being like commercially viable or if the founders of these companies are right and it's right around the corner like only science will hold the the answer as to which of those is true >> and so my take would be like just pay attention without being invested if you could like ma if you could manage that >> that is very charitable the the the real Josh Brown would say you could safely ignore these names and come back in 10 years. >> I don't think you can and and they could all be zeros because the IBMs and the and the Alphabets just run away with the whole opportunity or they could be like make like really important breakthroughs and I will not be the person to tell you which of those two things is going to happen. So I I would I would say loosely follow these names and watch for milestones along the way. But like I draw the line at flying cars these days. So that [laughter] >> Oh my god. >> I'm trying to be responsible here. Michael, >> that was that was really well done. All right, I got a mystery chart. I'm going to make this very simple. I'm going to give you one clue and one clue only. Okay, this is the best performing stocks of the S&P 500 this year. Um, the bottom one, my bad, I should have included this. The bottom one, I'll give you the clue there. The bottom one is the market cap. Uh, the top one is the price. The market cap is $118 billion. And to reiterate, this is the single best performing stock in the S&P 500 year to date. It's up 300%. There you go. >> Robin Hood. >> Boom. >> Look how good I am at this. [applause] >> Good job. >> You know, I I sometimes feel that I don't uh I don't get enough credit for how good I am at Make the Case because you're better at it than me, but I'm still pretty I'm still pretty I meant at at uh Mystery Chart. I'm still pretty good. >> You're still pretty good. Listen, you're way better at make the case and I'm a better chart guesser. So, I think your skills are a better guess. Your skills are more valuable than mine. >> Well, listen, we could end on that note. Always always nice where we find an area of agreement. I am better than you, >> guys. Thank you. So, thank you so much for tuning into the show. We miss you when we're not here. Uh we will be back live very soon. In the meanwhile, I want to let you know tomorrow is Wednesday, which means all new animal spirits with Michael and Ben. My personal favorite podcast. We'll do Ask the Compound with Ben and Duncan later this week and then an all new edition of The Compound and Friends, which I think you're going to love. Thank you so much for watching. Thanks [music] to our sponsor and we'll talk to you soon. [music] >> [music]